- Acadia Realty Trust (AKR) Valuation Check After Recent Share Price Momentum
May 6, 2026
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Acadia Realty Trust: Recent Returns Put Fundamentals Back in Focus
With no single headline event driving attention to Acadia Realty Trust (AKR), the stock's recent performance is putting more focus on its fundamentals, from property mix to earnings profile and valuation.
See our latest analysis for Acadia Realty Trust.
The recent 14.05% 1 month share price return, alongside a 7.36% year to date share price gain and a 19.19% 1 year total shareholder return, signals rebuilding momentum after earlier volatility, supported by a much stronger 89.46% 3 year total shareholder return.
If Acadia's move has you thinking about what else might be setting up interesting opportunities, take the next step and check out 21 top founder-led companies
With Acadia trading at $22.16, a modest discount of about 6% to the average analyst price target and a larger implied intrinsic discount of roughly 26%, the key question is whether there is still a buying opportunity here or if the market is already pricing in future growth.
Most Popular Narrative: 5.4% Undervalued
With Acadia Realty Trust last closing at $22.16 and the most followed narrative pointing to a fair value around $23.43, the current setup centers on how that gap is justified by the business model and future cash flow assumptions.
The company's outsized exposure to dense, affluent urban corridors, where urbanization trends and demographic shifts continue to drive premium consumer demand and limited new retail development, supports strong occupancy rates, rent increases, and margin expansion.
Read the complete narrative.Read the complete narrative.
Want to understand why a relatively small discount is still getting attention? The narrative leans on rising corridor revenue, controlled supply, and a richer earnings multiple built into long range forecasts.
Result: Fair Value of $23.43 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, you still need to weigh the concentration in affluent urban corridors and potential shifts in e‑commerce and high‑income consumer spending that could challenge this setup.
Find out about the key risks to this Acadia Realty Trust narrative.
Another Way To Look At Valuation
So far the focus has been on fair value estimates that suggest Acadia is undervalued. On plain P/E, though, the stock trades at about 75.3x earnings versus 43.3x for peers and 24.2x for the US Retail REITs industry, while the fair ratio is 21x. That kind of gap can mean investors are paying up today or simply front loading a lot of optimism. Which side of that trade do you want to be on?
Story Continues
For a closer look at how this pricing stacks up against earnings power and peers, it helps to step through the detailed valuation breakdown and see what the numbers imply about risk and reward over time, not just in the next quarter. See what the numbers say about this price — find out in our valuation breakdown.NYSE:AKR P/E Ratio as at May 2026
Next Steps
Given that the story so far is mixed, with both clear risks and some potential rewards, it makes sense to look through the detail yourself and then move quickly to form an informed view using the 2 key rewards and 4 important warning signs
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include AKR.
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- REITs Excel, Earnings Swell, Fed Rebels
May 3, 2026 · seekingalpha.com
U.S. equity markets advanced for a fifth straight week - their longest winning streak since 2024 - as strong earnings, resilient data, and hopes for lasting Iran peace fueled optimism. Investors looked through another oil-price surge and inflationary pressure, focusing instead on corporate resilience and economic strength despite a complex macro backdrop shaped by geopolitical and policy uncertainty. The Fed held rates steady in an unusually fractured 8-4 vote, while Powell's plan to remain on the Board broke precedent and raised politically charged succession questions.
- Acadia Realty Trust (AKR) Q1 2026 Earnings Call Highlights: Strong Earnings Growth and ...
Apr 30, 2026
This article first appeared on GuruFocus.
Earnings Growth: 11% year-over-year increase. Same-Store Growth: Nearly 6% increase. Transactional Activity: Over $2.5 billion, including $600 million in new investments and $500 million in recapitalizations. New Corporate Borrowing Facility: $1.4 billion. Signed Leases Volume: $3.5 million in Q1. Pipeline of New Leases: $11.5 million, a net increase of $2.5 million from the previous quarter. Acquisitions and Recapitalizations: Over $1 billion closed in Q1 and through April. FFO Guidance for 2026: Raised to $1.22 to $1.26, representing 9% growth at the midpoint. Economic Occupancy: Increased to 94% at quarter end. Signed-Not-Open Pipeline: $10.5 million, approximately 5% of ABR. Same-Store NOI Growth Expectation for 2026: Midpoint of 7%. Unsecured Corporate Credit Facility: $1.4 billion agreement, increasing borrowing capacity by $250 million.
Warning! GuruFocus has detected 6 Warning Signs with AKR. Is AKR fairly valued? Test your thesis with our free DCF calculator.
Release Date: April 29, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
Acadia Realty Trust (NYSE:AKR) reported an 11% year-over-year earnings growth driven by nearly 6% same-store growth. The company completed over $2.5 billion in transactional activity, including $600 million in new investments and a $1.4 billion corporate borrowing facility. Strong tenant demand and performance, particularly in street retail, are driving solid internal top-line growth. Acadia Realty Trust (NYSE:AKR) is seeing significant leasing activity with a pipeline of new leases in advanced negotiation totaling $11.5 million. The company has successfully entered new markets, such as Worth Avenue in Palm Beach and Newbury Street in Boston, with promising mark-to-market opportunities.
Negative Points
Geopolitical events have added unwanted uncertainty to the global economy, impacting capital markets. Increased competition in the retail investment landscape makes it more challenging to achieve targeted returns. Some markets, like San Francisco and North Michigan Avenue, are slower to recover, although they show significant upside potential. The company faces challenges in prying loose mark-to-market opportunities, which may impact short-term earnings. There is a risk of variability in returns for projects like the Henderson Avenue development, with potential delays affecting stabilization timelines.
Q & A Highlights
Q: Can you provide details on the expected acquisition activity for the remainder of the year and its potential earnings impact? A: Reginald Livingston, Executive Vice President and Chief Investment Officer, stated that they expect to maintain the same volume of acquisitions as last year, with around $400 million on the REIT portfolio side and $250 million on the Investment Management side. John Gottfried, CFO, added that their target is a penny of accretion per $200 million of acquisitions, both for REIT and Investment Management.
Story Continues
Q: How much of the fair market value adjustments in leasing are already included in the guidance, and what could be incremental? A: John Gottfried, CFO, explained that any necessary leasing to meet the midpoint of their guidance has already occurred. Any additional leasing activity would be considered upside, particularly in street retail, where they are typically conservative with fair market value assumptions.
Q: What is the timeline for realizing mark-to-market opportunities in new corridors like Palm Beach and Newbury? A: Reginald Livingston, Executive Vice President and Chief Investment Officer, mentioned that they have an active pipeline in these markets and believe they can scale. The timeline for realizing mark-to-market opportunities depends on asset-specific factors, but they aim to achieve 6%-plus yields in the near term.
Q: Can you provide an update on the Henderson Avenue development and expected returns? A: John Gottfried, CFO, stated that they expect the development to stabilize at an 8% to 10% return on incremental dollars spent. Alexander Levine, Executive Vice President, added that leasing interest has been strong, with some recent leases justifying rent doubling on the street.
Q: What are the prospects for additional market entries, and why is street retail less competitive? A: Kenneth Bernstein, CEO, explained that they are considering additional markets where they can build scale and where there is strong tenant demand. Street retail is less competitive due to the need for a deep understanding of the market, tenants, and local laws, which creates higher barriers to entry.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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- Acadia Realty Trust Q1 Earnings Call Highlights
Apr 30, 2026
Acadia Realty Trust logo
Key Points
Acadia reported roughly 11% y/y earnings growth driven by nearly 6% same-store growth, raised full-year FFO guidance to $1.22–$1.26 (about 9% growth at the midpoint), and completed over $2.5 billion of transactional activity while securing a new $1.4 billion corporate credit facility. Street retail remains the core driver: leasing momentum accelerated (Q1 signed $3.5M with $11.5M in advanced negotiations), REIT occupancy rose to 94% and the street/urban portfolio to 91.7% (+570 bps y/y), and certain mark-to-market deals could produce a weighted average rent spread just over 40%. Management has been active on acquisitions and recapitalizations—closing over $1 billion of deals including 225 Worth (Palm Beach) and 428 Newbury (Boston) and a $440M JV with TPG—to expand luxury corridors, recycle capital, and target high single-digit cash yields within about two years. Interested in Acadia Realty Trust? Here are five stocks we like better.
Acadia Realty Trust (NYSE:AKR) executives said the company delivered a “strong quarter” to start 2026, pointing to continued momentum in its street retail portfolio, accelerating leasing activity, and a busy slate of acquisitions and recapitalizations despite a more uncertain macro backdrop.
During the company’s first-quarter 2026 earnings call on April 29, President and CEO Ken Bernstein said Acadia posted 11% year-over-year earnings growth, driven in part by nearly 6% same-store growth. Bernstein also highlighted more than $2.5 billion of transactional activity, including $600 million of new investments, over $500 million of recapitalizations in the investment management platform, and a new $1.4 billion corporate borrowing facility.
Street retail tailwinds remain the core driver
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Bernstein attributed the company’s performance to what he described as five key factors supporting street retail: shrinking supply, rising retailer demand for physical stores, resilient tenant performance—particularly among higher-income shoppers—lighter relative capital expenditures to re-tenant street locations, and stronger annual income growth due to contractual increases and more frequent mark-to-market opportunities.
He said those tailwinds are supporting internal growth “hitting the bottom line” in both earnings and net asset value. While acknowledging increased competition for open-air retail assets, Bernstein said street retail remains “a less crowded field than in other formats with fewer capable buyers,” in part because it requires localized market knowledge, tenant understanding, and familiarity with local laws.
Story Continues
Leasing activity builds, with notable rent spread potential
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In prepared remarks focused on internal growth, management said leasing remained strong across the REIT and the investment management platform. The company reported $3.5 million (its share) of signed leases in the first quarter and said leases in “advanced negotiation” rose to $11.5 million, up nearly $2.5 million from the prior quarter.
Executives also pointed to rising market rents on key “high-growth streets,” where Acadia is negotiating new leases, fair-market renewals, and “pry loose” mark-to-markets in areas including SoHo, Upper Madison Avenue, M Street, Armitage Avenue, and Melrose Place. Management said that if certain deals are completed, they could result in a weighted average spread “just over 40%,” noting that street leases generally have 3% contractual growth and that spreads should be viewed in the context of multi-year rent compounding.
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When asked about how leasing could affect guidance, CFO John Gottfried said leasing needed to reach the midpoint of guidance “has already happened,” and additional signed and opened deals could be additive. Management said it is typically conservative with fair market value assumptions and characterized those as “typically upside.”
San Francisco and North Michigan Avenue show recovery progress
Management said it is “building conviction” around markets that are earlier in their recovery cycle, specifically San Francisco and North Michigan Avenue in Chicago.
For San Francisco, the company said that since the start of 2025 it signed about 90,000 square feet of new leases at two assets, including LA Fitness’ Club Studio and T&T Supermarkets. Following the end of the first quarter, the company said it signed an additional 25,000 square feet with Sprouts Farmers Market at 555 Ninth Street, joining Trader Joe’s and Club Studio. Management emphasized that Sprouts, T&T, and Club Studio will each represent their “first store in San Francisco.” With about 70,000 square feet remaining to lease, the company said it is gaining confidence it can continue unlocking embedded value at the two centers.
On North Michigan Avenue, management said foot traffic has returned to pre-2019 levels and tenant demand has increased since the start of 2026. The company cited recent openings and signings from brands including Mango, Aritzia, Uniqlo, and American Eagle, as well as a 60,000-square-foot Candy Hall of Fame at 830 North Michigan Avenue. Even with improving activity, management said rents on the corridor remain about 50% below prior peak levels.
Responding to an analyst question about Chicago, management pushed back on the idea that the market is broadly weak, arguing the issue on North Michigan Avenue has been “difficult spaces” such as multi-level retail and the challenge of backfilling former flagship locations. Bernstein also referenced “three underperforming malls on the street” as a headwind, adding that as those are addressed, momentum could improve.
Acquisitions and recapitalizations expand corridors and recycle capital
Chief Investment Officer Reggie Livingston said the company has been “incredibly busy” year-to-date, closing over $1 billion in acquisitions and recapitalizations through the first quarter and into April. He said Acadia gained a foothold on two luxury retail corridors with REIT acquisitions not previously announced:
225 Worth (Worth Avenue, Palm Beach): Acquired for $43 million at quarter-end. Livingston said the asset includes Gucci, J.McLaughlin, and G4 and offers “meaningful mark-to-market opportunity.” 428 Newbury (Newbury Street, Boston): Acquired after quarter-end for $109 million. Livingston said the assets are anchored by Chanel and Cartier and have “meaningful value creation opportunity.”
Livingston said the company’s intent in new markets is not limited to single assets, but to build “scale” over time—targeting the ability to amass “100, 200 plus” in a market where feasible—so Acadia can become a preferred counterparty for sellers and tenants. Gottfried added that from a modeling perspective, the company assumes acquired leases may be below market and said Acadia aims to reach “sixes cash” yields in roughly two years, while tolerating up to three or four years for the right deal.
On the investment management side, Livingston said the quarter was defined by recapitalizations, including a joint venture with TPG Real Estate covering Avenue at West Cobb and six Fund V assets in a $440 million transaction. He also cited a $68 million recapitalization of Pinewood Square in Palm Beach County with private funds managed by Cohen & Steers, noting it was the second recapitalization with that investor. Livingston said these transactions validate the platform and “free up capital” to redeploy.
Guidance raised; occupancy and pipeline point to embedded growth
Gottfried said first-quarter results showed internal growth accelerating and external growth goals being achieved on both accretion and volume. He said the company raised full-year 2026 earnings guidance to $1.22 to $1.26 of FFO, representing 9% growth at the midpoint over the $1.14 of FFO reported in 2025. He described a breakdown of the projected year-over-year increase as follows:
Internal NOI growth (including redevelopments): $0.07 to $0.09 of FFO External growth: $0.04 to $0.05 of FFO Investment management growth: $0.01 to $0.02 of FFO Offset: approximately $0.04 of dilution embedded from an anticipated City Point loan conversion in the second quarter, which Gottfried said should become accretive as the asset stabilizes
The company said its REIT economic occupancy increased to 94% at quarter-end. Gottfried emphasized that the street and urban portfolio—the company’s “most valuable space”—rose 140 basis points sequentially and 570 basis points year over year, with that portfolio 91.7% occupied as of March 31.
Acadia ended the quarter with $10.5 million, or about 5% of annual base rent, in its “signed not open” (SNO) pipeline, which management said increased about 18% during the quarter even after nearly 25% of the pipeline commenced in the first quarter. Gottfried said the company expects approximately 80% of SNO to commence during 2026, with the remainder in the first half of 2027, and noted that more than $4 million of anticipated commencements are projected for the fourth quarter, tied primarily to the expected openings of T&T Supermarket and LA Fitness’ Club Studio at San Francisco redevelopment projects.
For same-store performance, management said it remains on track for the midpoint of its guidance at 7% and provided a quarterly outlook, while cautioning that small changes can swing results. Gottfried said the current model shows same-store growth of 6% to 8% in the second quarter, 7% to 9% in the third quarter, and 5% to 7% in the fourth quarter, with the street and urban portfolio expected to outperform suburban by 400 to 500 basis points.
On financing, Gottfried said Acadia completed a refinancing of its unsecured corporate credit facility, entering into a $1.4 billion agreement that tightened pricing, extended maturities, and increased borrowing capacity by $250 million. He said the facility was “significantly oversubscribed,” and the company added two new banks to its group of lenders. Gottfried also said the company completed more than $600 million of REIT and investment management deals so far in 2026 without issuing equity and cited revolver capacity, unsettled forward equity, and anticipated proceeds from structured finance and investment management as sources of capital to fund the acquisition pipeline.
Looking ahead, Bernstein said the company’s street retail thesis “is working” and that Acadia believes it has a clear line of sight to multi-year growth supported by internal leasing and external investment opportunities.
About Acadia Realty Trust (NYSE:AKR)
Acadia Realty Trust (NYSE: AKR) is a Maryland real estate investment trust (REIT) that focuses on the acquisition, development, ownership and operation of grocery-anchored and necessity-based shopping centers. The company targets retail properties that serve densely populated urban and suburban markets and typically feature essential tenants such as supermarkets, drugstores, fitness centers and other service-oriented retailers. As a self-managed REIT, Acadia oversees leasing, property management, financing and construction activities through its in-house platform.
Acadia's portfolio is diversified across property types and lease structures, with an emphasis on sites that benefit from long-term consumer traffic and resilient tenancy.
The article "Acadia Realty Trust Q1 Earnings Call Highlights" was originally published by MarketBeat.
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- Acadia Realty Trust (AKR) Q1 2026 Earnings Call Transcript
Apr 29, 2026 · seekingalpha.com
Acadia Realty Trust (AKR) Q1 2026 Earnings Call Transcript
- Acadia (AKR) Q1 2026 Earnings Call Transcript
Apr 29, 2026
Image source: The Motley Fool.
DATE
Wednesday, April 29, 2026 at 11:00 a.m. ET
CALL PARTICIPANTS
President and Chief Executive Officer — Kenneth F. Bernstein Executive Vice President and Chief Financial Officer — John Gottfried Executive Vice President, Head of Leasing — Alexander J. Levine Executive Vice President, Chief Investment Officer — Reginald Livingston Lease Administration and Due Diligence Analyst — Lynelle Ray
Need a quote from a Motley Fool analyst? Email pr@fool.com
Full Conference Call Transcript
Lynelle Ray: Good morning, and thank you for joining us for the first quarter 2026 Acadia Realty Trust earnings conference call. My name is Lynelle Ray, and I am a lease administration and due diligence analyst. Before we begin, please be aware that statements made during the call that are not historical may be deemed forward-looking statements within the meaning of the Securities Exchange Act of 1934, and actual results may differ materially from those indicated by such forward-looking statements due to a variety of risks and uncertainties, including those disclosed in the company's most recent Form 10-Ks and other periodic filings with the SEC.
Forward-looking statements speak only as of the date of this call, 04/29/2026, and the company undertakes no duty to update them. During this call, management may refer to certain non-GAAP financial measures including funds from operations and net operating income. Please see Acadia Realty Trust’s earnings press release posted on its website for reconciliations of these non-GAAP financial measures with the most directly comparable GAAP financial measures. Once the call becomes open for questions, we ask that you limit your first round to two questions per caller to give everyone the opportunity to participate. You may ask further questions by reinserting yourself into the queue, and we will answer as time permits.
Now it is my pleasure to turn the call over to Kenneth F. Bernstein, President and Chief Executive Officer, who will begin today's management remarks.
Kenneth F. Bernstein: Thank you, Lynelle. Great job. Welcome, everyone. As you can see in our press release, we had another strong quarter in what is shaping up to be a very solid year, both with respect to our internal as well as our external growth initiatives. And while geopolitical events have certainly added unwanted uncertainty to the global economy, thankfully, due to the tailwinds for open-air retail in general, and then even more so for street retail, we are seeing continued strong results driven by strong tenant demand, strong tenant performance, and attractive investment opportunities. As the team will discuss in more detail, we delivered 11% year-over-year earnings growth driven by nearly 6% same-store growth.
Story Continues
And even with heightened uncertainty in the capital markets, we completed over $2.5 billion of transactional activity, comprised of $600 million of new investments, $500 million of recapitalizations within our investment management platform, and a new $1.4 billion corporate borrowing facility. Now, since I have discussed in detail the key drivers of the tailwinds in open-air retail on our previous calls, I will limit my explanation a bit. But in short, our continued strong performance is being driven most significantly by our street retail portfolio and more specifically by five key factors. First, limited supply that continues to shrink.
Second, and probably more importantly, increasing demand due to the ongoing focus by retailers on having their own physical locations rather than being so heavily reliant on either wholesale or digital channels. Third, strong tenant performance due to a resilient consumer, especially the upper-end shoppers at our street locations. Fourth, lighter relative CapEx in our re-tenanting of street locations. And finally, stronger annual income growth in our street locations, due to both higher contractual growth and then more frequent mark-to-market opportunities. These continued tailwinds are enabling us to deliver solid internal top-line growth and have that growth hit the bottom line, both in terms of earnings growth as well as net asset value growth. Alexander J.
Levine will discuss our progress last quarter and why we are poised to continue to deliver superior growth for the foreseeable future. And then supplementing this internal growth, and ensuring that we can continue to deliver this steady growth well into the future, are our external growth initiatives. Reginald Livingston will discuss our acquisition activity over the last quarter where we continue to deliver on our goals, both with respect to our on-balance sheet acquisitions of street retail and our execution through our investment management platform. But let me give a few observations. As we have seen more investor interest in retail over the past year, competition has increased for most formats of open-air retail.
But so has the volume of deals coming to market. So even with increased competition, we expect to be able to meet our acquisition goals. And while we welcome the company, it has been a bit more difficult to simply buy existing yield to make our targeted returns. So, as it relates to street retail investment opportunities, while competitive, it is still a less crowded field than in other formats, with fewer capable buyers. We are still seeing enough attractive investments that are accretive day one both to earnings and net asset value. And we are most focused on investments where there are near-term value creation opportunities where we can use our skill set and relationships to unlock that value.
We are still finding deals that get us to a 6% plus yield in the near term, but require a few more moving pieces. And since our team has never been hesitant to use its value-add skills and relationships, this shift is welcomed. The same is true for our investment management platform. The ability to achieve opportunistic returns by simply buying stable assets, as we successfully did during our Fund V investment period a few years ago, is becoming increasingly difficult; thus our recent investments over the past year have been much more value-add focused and we expect that focus to continue.
And as it relates to our investment management activity, we can actually team up with the increasing pool of institutional capital and harness that increased interest. So we do not have to just beat them; we can join them as well. And to be clear, with respect to both our REIT and investment management acquisitions, our goal continues to be to make sure our investments are accretive to earnings and to net asset value day one, and to achieve a penny of FFO for every $200 million of assets acquired.
Reggie will walk through how our most recent activity is meeting our goals both in terms of volume and accretion, and then equally importantly, how we are planting seeds for continued superior growth down the road. Then finally, John Gottfried will walk through our balance sheet metrics and how we are positioned to continue to drive both internal and external growth with plenty of dry powder and diverse sources of capital. So to conclude, our street retail investment thesis is working. The internal and external opportunities we see provide clear line of sight into providing solid multi-year top-line growth and then having that growth drop to the bottom line.
Then with ample balance sheet capacity, we are in a position to capitalize on the exciting opportunities that we have in front of us. I would like to thank the team for their continued hard work. And with that, I will hand the call over to AJ.
Alexander J. Levine: Thanks, Ken. Good morning, everyone. So I would like to start out with an update on internal growth with a focus on trends and performance on our high-growth streets. Then I will touch on some of our slower-to-recover markets with significant upside, namely San Francisco and North Michigan Avenue, and I will finish with an update on Henderson Avenue in Dallas. Overall, another strong quarter of leasing across the board—street, suburban—both within the REIT portfolio as well as our investment management platform. Total volume of signed leases in Q1 was an additional $3.5 million at our share.
We have grown our pipeline of new leases in advanced negotiation to $11.5 million, which is a net increase of nearly $2.5 million above the previous quarter. As we sign leases, we are quickly reloading the pipeline and then some. As Ken articulated, because of the historically strong supply-demand dynamic and the resilient high-income consumer that shops our streets, all signs indicate that we will be able to deliver similar results through the remainder of this year and beyond. In addition to an accelerating leasing velocity, we are also seeing a steady rise in market rents on our high-growth streets.
We are currently negotiating new leases, fair market renewals, and pry-lease mark-to-markets along several of our streets, including SoHo, Upper Madison Avenue, M Street, Armitage Avenue, and Melrose Place. These are all markets that have experienced several years of double-digit rent growth and, if we are successful in signing these new deals, it will result in a weighted average spread of just over 40%. Now remember, street leases have 3% contractual growth. So a 40% spread after five years of 3% growth means that rents have grown closer to 60% over that time period. This is what we mean when we say that not all spreads are created equal.
Now, incremental to the sector-leading growth that we are seeing on our streets, we are also continuing to build conviction around historically strong markets that are in the earlier stages of recovery, like San Francisco and North Michigan Avenue in Chicago. At our last update, we reported that since the start of 2025, we had signed about 90 thousand square feet of new leases across our two assets with LA Fitness Club Studio and T&T Supermarkets. Since our last update, and following the end of the first quarter, we have added another 25 thousand square feet by signing Sprouts Farmers Market, who will be joining Trader Joe’s and Club Studio at 555 9th Street.
And like T&T and Club Studio, this will be their first store in San Francisco. What has become clear is that tenants are strengthening their conviction around the recovery of San Francisco. And with another 70 thousand square feet of space remaining to lease, in addition to some accretive pry-lease opportunities, we are gaining increased confidence that we can continue to unlock the meaningful remaining embedded value within our two San Francisco centers. Now right behind San Francisco is North Michigan Avenue, which continues to see steady improvement and has certainly moved beyond the green shoots phase of recovery.
We still have a ways to go, but foot traffic has returned to pre-2019 levels, and since the start of this year, there has been a noticeable increase in tenant demand. Over the last year, we have seen new store openings and new lease signings from top brands like Mango, Aritzia, Uniqlo, and American Eagle, and most recently, the 60 thousand square foot Candy Hall of Fame at 830 North Michigan Avenue. Even so, rents are still 50% below where they were at prior peak. North Michigan Avenue is an iconic, irreplaceable street, and we are confident that the recovery will continue to accelerate, and when it does, we will be well positioned to capture that upside.
And finally, I will end with an update on Henderson Avenue in Dallas. As a reminder, the vision on Henderson is to create a vibrant, walkable street curated with a mix of today’s most sought-after retailers and supplemented with dynamic and recognizable F&B—mixing the best of what has worked on streets like Armitage Avenue in Chicago, Bleecker Street in New York, Melrose Place in LA, and M Street in DC. In short, Dallas’ first and only true street retail shopping experience. The street is already off to a great start, with tenants like Tecovas and Warby Parker producing sales that could already justify rents doubling.
And with 80% of our retail on the street now spoken for, our new leases are doing just that. I cannot reveal the names of all of the brands that have committed, but to give you a flavor, the project will consist of a healthy mix of nationally recognized tenants like Rag & Bone, who is relocating from Highland Park Village, along with a collection of younger brands that have had success on some of our other high-growth streets like Gizio, Cami, and Margaux. And we are saving around 10% of our space for brands that are more local and authentic to Texas.
Add in some fun, high-volume F&B like Prince Street Pizza, Papa Bagels, and Salt N’ Stir ice cream, and you have the makings of a well-curated, walkable street. So in summation, the key takeaway is that, despite consistently high levels of leasing activity over the past several quarters, we continue to see meaningful runway ahead, both in terms of mark-to-market opportunity and ongoing lease-up of our high-growth streets, as well as tapping into markets that have more recently begun to show the signs of a strong recovery. As always, I would like to thank the team for their hard work. And with that, I will turn things over to Reggie.
Reginald Livingston: Thanks, AJ, and good morning, everyone. I will cover two things: our transaction activity for Q1 and through April, and then I will share some perspective on what we are seeing in the market. On the transaction front, we have been incredibly busy year to date. We have closed over $1 billion in acquisitions and recapitalizations, gained footholds on two of the country’s premier luxury retail corridors, all while achieving our accretion and growth thresholds and building a pipeline that should maintain a high level of activity for the balance of the year. So let us walk through some details. Starting with the acquisitions not previously announced.
At the end of the quarter, within our REIT portfolio, we made our inaugural investment on Worth Avenue in Palm Beach, with the acquisition of 225 Worth for $43 million. This street is one of the most irreplaceable luxury retail corridors in the country, and it has all the ingredients for continued rent growth, including strong performing tenancy, a high-end customer base, and limited supply. The asset contains Gucci, Jay McLaughlin, and G4, and possesses a meaningful mark-to-market opportunity that we will harvest in the near future. Our conviction on Worth goes beyond this single asset.
We have an active pipeline in that corridor, and our strategy there mirrors what we have executed in other markets: acquire a foundational position, build scale, and activate the benefits of concentration to drive returns over time. Subsequent to quarter-end, also in our REIT portfolio, we closed on 4 and 28 Newbury for $109 million. These assets are anchored by Chanel and Cartier, two of the most sought-after luxury tenants in the world. These buildings are between Arlington and Berkeley Streets on Newbury—one of the best concentrations of luxury retail on the East Coast. And most importantly, this asset has a meaningful value-creation opportunity that we expect to harvest soon.
The same scale thesis applies here: understand the Newbury Street market and have relationships to create a path to building a greater presence on the corridor. For both Palm Beach and Boston, it is important to note they adhere to our metrics—being accretive to NAV, hitting our FFO accretion target of a penny per $200 million, with CAGR in excess of 5%. On the investment management side, Q1 was defined by executing on recapitalizations. We formed a joint venture with TPG Real Estate that encompassed the recap of Avenue at West Cobb and six Fund V assets, a $440 million transaction. The scale of this recap is a meaningful validation of our platform, our assets, and our relationships.
We also completed the recap of Pinewood Square in Palm Beach County with private funds managed by Cohen & Steers, a $68 million transaction. This is our second recap with Cohen & Steers, a highly regarded investor; their involvement reflects both the quality of the asset and the credibility of our business plan. These transactions, in part, demonstrate our incubated recap model at work, and in total, free up capital that we can accretively redeploy. Turning to what we are seeing in the market. The retail investment landscape remains active, even as the macro backdrop has grown more complex. Supply remains constrained, new development is sparse, and institutional capital flows into quality retail continue to grow.
None of the current macro noise has changed those underlying dynamics. What that environment rewards, though, is exactly what we have built. Recall, in the street retail world, the majority of our acquisitions are off-market, and that sourcing advantage does not diminish in periods of volatility; if anything, it improves as motivated sellers gravitate towards certainty of execution. And this rewards us disproportionately because there are just fewer players in the street retail segment. And our pipeline reflects that reality. We have a number of opportunities in advanced stages of negotiation, and we will continue to underwrite to the same disciplined thresholds that have defined our recent activity.
On the investment management side, while the institutional appetite remains elevated, so does the number of owners looking to monetize. Owners without the capital, patience, or expertise to unlock value in their assets are looking for an exit, and that is creating a compelling opportunity for a platform like ours that has all three. Our pipeline on this side is as active as it has been. So to close, as I said, we have been busy: find the right assets, on the right corridors, with the right growth profile, while continuing to accretively build the investment management business.
We expect this activity to continue as we are on track to deliver transaction volume for the balance of the year consistent with our past activity. Thank you to the team for their hard work this quarter. And with that, I will turn it over to John.
John Gottfried: Thanks, Reggie, and good morning. Our first quarter results are clear: our internal growth is accelerating, and we are achieving our external growth goals on both accretion and volume. And these accomplishments are driving our bottom-line earnings. Our year-over-year earnings are up 11%, and with the acquisitions completed to date, we raised our full-year 2026 earnings guidance. I will start my remarks by laying out the building blocks for the remainder of the year, followed by an update on 2027, and then closing with the balance sheet.
For those of you that know our approach towards earnings expectations, we set robust targets for ourselves, and thus it makes it unlikely we will raise our guidance, particularly so early in the year. However, given the strength in our operations and the accretive acquisitions we have completed to date, we raised both the high and low of our guidance to $1.22 to $1.26, representing 9% growth at the midpoint over the $1.14 of FFO we reported in 2025. And with the simplified reporting that we rolled out last year, you can clearly see what is driving that growth. Based on our latest model, here is how that $0.10 of projected year-over-year growth breaks down.
We expect that our internal NOI growth, inclusive of redevelopments, should contribute about $0.07 to $0.09 of FFO. External growth is projected to add $0.04 to $0.05, driven by the full-year impact of 2025 deals and those closed year to date in 2026. And a continued expansion and scaling of our investment management program should add another $0.01 to $0.02. And as we have previously discussed, partially offsetting our projected growth is approximately $0.04 that is embedded in our guidance from the anticipated conversion of the CityPoint loan in the second quarter. Again, while dilutive in the near term, it will ultimately be accretive as the asset stabilizes.
And the earnings growth that we expect to deliver in 2026 provides us with a roadmap for what we aim to achieve in 2027 and beyond. Before moving to same-store NOI, I want to give a few updates on our earnings model and anticipated quarterly FFO cadence for the balance of 2026. We anticipate our quarterly run rate will be in the $0.30 to $0.32 range for the balance of the year, which, consistent with our past practice, does not factor in additional acquisition accretion, notwithstanding the active pipeline our acquisition team is underwriting.
Secondly, and as I will discuss shortly, rent commencements from our signed-not-open portfolio are weighted to the back half of the year, positioning us for strong embedded growth heading into 2027. Now I want to give an update on occupancy, internal growth, and same-property NOI. At quarter-end, our REIT economic occupancy increased to 94%. But as we have said repeatedly, not all occupancy is created equal. Our street and urban portfolio—our most valuable space—sequentially increased 140 basis points and 570 basis points from Q1 of last year. And we still have several hundred basis points of embedded upside with the portfolio 91.7% occupied as of March 31.
As outlined in our release, we ended the quarter with $10.5 million, or approximately 5% of RABR, in our signed-not-open pipeline. We grew our pipeline by approximately 18% during the quarter—and that is even after nearly 25% of our pipeline commenced in Q1. And as AJ discussed, our leasing pipeline remains robust, and we anticipate that our SNO should continue to build over the next couple of quarters. I will now spend a moment to highlight a few key items on our $10.5 million pipeline for those updating models. We anticipate that approximately 80% of our SNO, representing $7.9 million of ABR, will commence during 2026, with the remaining balance targeted for 2027.
I want to highlight that over $4 million of this $7 to $9 million is projected to commence in the fourth quarter of this year, primarily from the anticipated openings of T&T Supermarket and LA Fitness’s Club Studio at our San Francisco redevelopment projects. And when incorporating the timing of commencement, we expect approximately $2 to $3 million of incremental ABR to be recognized in 2026, with the vast majority of that being in our same-store pool, which leaves us with $7 to $8 million of embedded incremental ABR growth heading into 2027.
And lastly, on earnings flow-through, with nearly half of our SNO coming from our REIT redevelopment portfolio, we are capitalizing certain costs—primarily interest and real estate taxes—so not all of that incremental ABR flows to the bottom line. Of the $5.3 million of ABR in our SNO redevelopment pool, we expect to capitalize between $3 to $4 million of cost on a full-year run-rate basis. Moving on to an update on our 2026 same-store expectations. We remain on track to land at the midpoint of our guidance, or 7%.
I will likely regret providing this level of granularity, given it only takes a few hundred thousand dollars to move us 100 basis points in either direction, but based on our current model, we see same-store growth trending 6% to 8% in Q2, 7% to 9% in Q3, and 5% to 7% in Q4, with our street and urban portfolio anticipated to outperform suburban by 400 to 500 basis points. And now moving on to our balance sheet. So far in 2026—and it is still early—we have acquired over $600 million of REIT and investment management deals, and we did so without issuing any equity.
And with the available capacity on our revolver, unsettled forward equity, anticipated proceeds from our structured finance and investment management businesses, we have all the accretive capital we need to fund our acquisition pipeline. As highlighted in our release, we completed the refinancing of our unsecured corporate credit facility, entering into a $1.4 billion agreement. As part of this refinancing, we tightened pricing, extended maturities, and increased our total borrowing capacity by $250 million to support our growth. The new facility was significantly oversubscribed, and we strategically added two new banks to our incredible and long-standing lineup of capital partners.
Following the completion of this facility, we have very manageable maturities and swap expirations over the next couple of years, which means our top-line earnings will largely drop to the bottom line. So in summary, we had an incredibly busy and productive start to the year. Our multi-year expectations of strong internal growth are intact, and we have a balance sheet that has ample capacity to support our expansion goals. And with that, I will turn the call over to questions.
Operator: We will now open the call for questions. Our first question comes from Craig Mailman with Citi.
Craig Mailman: Hey, guys. So, John, that was helpful going through the guidance detail there. Just kind of curious, between AJ and Reggie, I know there is not a lot incrementally for acquisitions. Maybe just to start there—Reggie, I think you said that activity for the balance of the year could be similar to what we have seen recently. In terms of magnitude on gross, and then maybe pro rata share, can you goalpost what you are looking at—what could conceivably close this year—and maybe what the earnings impact of that could be?
Reginald Livingston: Sure. I will focus on what I think could close this year. Taking a step back, run-rate retail on the REIT portfolio side has been about $400 million or so over the last year plus. We have done about $200 million of that so far this year. So I think we could pencil in doing basically the same volume that we did last year from a REIT portfolio side. On the investment management side, where we have averaged about $250 million plus per year over the last two and a half to three years, I think we can do that as well.
That is, by definition, a little lumpier because we are focused more on value-add opportunities, but that is how we think about it from a goalpost standpoint for volume.
John Gottfried: And then on the earnings side—so, Craig, the one thing that we pointed out is that our target, which is unchanged, is a penny of accretion per $200 million. That is both REIT and investment management. So on $200 million of REIT acquisitions, our target is day-one earnings accretion of a penny per $200 million. And that same math, even though our pro rata share is much less of the equity on investment management, when you factor in the fees, $200 million of investment management is also a penny. So, in terms of earnings impact, you would just prorate that throughout the year. Those targets are unchanged.
Craig Mailman: Okay, that is helpful. And, John, you are breaking up a little bit. Just a heads up. And then, similarly, on the leasing side, AJ, you said you guys are working on a fair bit of fair market value adjustments and some other deals. How much of those are already embedded in guidance versus could be incremental upside as we head into 2026 into early 2027?
John Gottfried: Craig, are you referring to what is in the pipeline that would convert to show up in rents?
Craig Mailman: Yeah, like what is actually considered in some of the metrics you guys talked about versus what could be additive that you do not want to put in there yet because the predictability is not great.
John Gottfried: Got it. Any leasing that we need to happen has already happened to hit the midpoint of our guidance, both on same-store and earnings. So whatever AJ gets signed that is in his pipeline—and we get them open and operating—that would be additive, which in the street is possible.
Alexander J. Levine: Yeah. We are typically fairly conservative with FMV assumptions, and it is typically upside for us.
Operator: Our next question comes from Andrew Reale with Bank of America.
Andrew Reale: Good morning. Thanks for taking my questions. Maybe if you could talk about your new corridors—Palm Beach and prime Newbury. First, what is the timeline for realizing the mark-to-market opportunities there that Reggie mentioned? And then are there any additional assets in the pipeline in either of those markets today? How scalable do you think those markets could ultimately be?
Reginald Livingston: Sure. I will start with the second one, Andrew. For us to identify a market, it is never just about one deal. We think, how can we amass $100 to $200 million plus over time, so that we can enjoy the benefits of that scale—being the first call for sellers and the first call for tenants, etc. So we have an active pipeline that we feel pretty good about. We are always going to stay disciplined in our underwriting, but we think those markets can scale. Before we even talk about scaling, though, we ask: do those markets have the same rent growth drivers and demand that we have in SoHo, in Georgetown, and our other corridors?
We think these corridors do. There is tight supply, tenant demand is very high, and the sales volumes are there not only to justify the rent run-up from previous years but to continue rent growth in the future. So we feel good about the opportunities that make sense there and that we will be able to scale.
John Gottfried: And just to add on to that—from a modeling perspective—two thoughts. In these instances, the in-place lease would typically be below market, so when we think about that in the initial bookkeeping, we are conservative as to where we think the market is on day one. A rough rule of thumb we think about is, ideally, we want to get to the 6%s cash that Reggie referred to. Our target is two years, but we will tolerate up to three or four years for the right deal where we have conviction. That frames the timeline and how we establish the gap yield from the below-market impact.
Andrew Reale: Okay, that is helpful. Thanks. And then, John, I think it was last quarter you said pry-lease could potentially be the most impactful variable within the 5% to 9% same-store range, with the real benefit maybe accruing in 2027 or 2028. If you were to maximize the pry-lease opportunity in the 7%—
John Gottfried: Andrew, we gave a wide range, and I will start with our historical practice. We have not updated same-store guidance once we have given it, which is why we are not doing it this quarter. I would say assume we are targeting the 7%, and the pry-lease upside is very real and actionable, but it is not going to deviate us from the 7% target.
Kenneth F. Bernstein: Good luck getting John to count his chickens before they hatch.
Andrew Reale: Fair enough. Thank you.
Operator: Our next question comes from Floris van Dijkum with Ladenburg Thalmann.
Floris van Dijkum: Thanks. Good morning, guys. A question that does not seem to get a lot of attention these days—your Henderson Avenue developments. It is about $200 million. Should investors expect something like a 9% or 10% return on that, as you have indicated? And is the remaining forward ATM going to be used to fund that? Maybe also talk a little bit about the timing of that development, what kind of rents you are getting, and how much of that is pre-leased.
John Gottfried: Let me start with the yields and timing, and then I will turn it over to AJ on the leasing specifics. We have put out there—and we are on, if not ahead of, target—that we think the development is going to stabilize to an 8% to 10% yield. Very consistent with what you shared. Another point is that the 8% to 10% is on the incremental dollars we are spending. That is not factoring in that we have a whole other portfolio of assets on the street that, as AJ will share, is proving to be very below market; we are not factoring in the lift from the balance of the portfolio that the development is going to add to.
In terms of timeline, we will be through our part of construction in the back half of this year, begin delivering space, stabilizing in 2027, and up and running in 2028. AJ will cover where we are in leasing.
Alexander J. Levine: I would say the interest and excitement on Henderson has been far beyond what we even initially imagined. Remember, existing sales on the street are already in excess of the sales we are seeing in markets like Armitage Avenue, and rents on Henderson are half of what we have currently on Armitage. There is already justification for rents doubling on the street, and some of the more recent leases that we are signing are actually doing just that. Rag & Bone, obviously having a lot of success over at Highland Park Village, is shifting to merchandising more in line with what they prefer from a co-tenancy standpoint. Some of the younger brands like Margaux and Gizio are committing as well.
I am anxious to give you more names—we have shared what we can at this point—but we are off to a great start.
Floris van Dijkum: Great. And as a follow-up, I wanted to touch base on Chicago. I know you talked about the momentum. I think TPG has bought into your JV, if I am not mistaken, at 717. What is the appetite to take advantage of some of the opportunistic investment opportunities that could be achievable in that market? And maybe talk about where the upside is—people often say Chicago is terrible. What has changed, and why is it not a bad place to be?
John Gottfried: Let me start with a clarification. The recap with TPG was Fund V—nothing to do with Fund IV—so everything we own at 717 is in Fund IV and still held by Fund IV. There has been no transaction there.
Alexander J. Levine: And I just want to correct one thing—Chicago is not terrible. It has never been a bad place to be, certainly in our neighborhoods, where we have had many years of success. The issue with North Michigan Avenue has never been fundamentals. Street footfalls are back in excess of 2019 volumes. Sales have seen very real growth over the last few years. It has really been a challenge of difficult spaces—multi-level retail and flagship locations that are historically more difficult to backfill—but those spaces are filling in. I mentioned names like Uniqlo, H&M coming back to the street, American Eagle, Aritzia—large-format spaces. As those fill in, we will continue to see increased activity.
The challenge of having three underperforming malls on the street has not helped, so as those pieces start to get figured out, we will see more and more momentum.
Operator: Our next question comes from Todd Thomas with KeyBanc Capital Markets.
Todd Thomas: Thanks. Good morning. First, I wanted to ask whether there are any more markets or partners that you are evaluating today. Should we expect some additional inaugural investments in the quarters ahead as we contemplate additional investment activity? And then, Ken, a bigger picture question for you or Reggie. You talked about increased competition for open-air centers—you referenced that in the context of Fund V assets, for example—but you indicated you are still finding opportunities in the street and urban segment, which seems less crowded. Why do you think competition is lower and the acquisition environment is more favorable where there are strong IRR and risk-adjusted opportunities and good rent growth, with escalators?
Kenneth F. Bernstein: I will tackle both, and Reggie should chime in. In terms of additional markets, we spend a fair amount of time—AJ and I especially—talking to our retailers about which markets are perhaps ones you might want to be in and which ones are going from “nice to have” to “need to have.” In the case of Palm Beach, it is transitioning from a seasonal market to, for a variety of reasons we all read about, a must-have market. In those instances, where we see fragmented ownership and our retailers say they would welcome institutional, high-quality ownership like Acadia, that is where we spend the majority of our time.
In some markets, like Dallas, there was no place to buy, so there we are building and creating that street retail environment. But for Palm Beach, Worth Avenue clearly checks that box, as does Newbury in Boston. There are probably a half-dozen—perhaps a dozen—additional markets that fit that spectrum that we constantly spend time on. Then we ask: is there enough to acquire over a realistic period of time so that we can build adequate scale? Is there a spine? Are there barriers to entry on a given corridor so it does not just wander up and down, left and right?
When it does—in the case of Worth Avenue and Newbury, and a half-dozen others—you should expect over time that we will focus on those. We do not have to add new markets to achieve our goals of being the premier owner-operator of street retail in the United States, but it would be nice to have a few more, and our retailers would welcome that. As to competition, street retail has a longer learning curve. It is pretty easy to underwrite some formats of open-air retail, and that is why you saw capital move first and foremost back to supermarket-anchored.
You still need to underwrite thoughtfully and carefully your supermarket, but for the satellites—the dry cleaner, the coffee shop—you do not get into the same level of underwriting. So there are just lower barriers to entry. For street retail, you have to understand the market, the tenants, the local laws—it has taken us well over a decade to get to the point we are at right now. For a lot of institutional owners, gearing up is just too difficult. They would rather partner with us. So we like our positioning in street retail. That said, as Reggie has pointed out, the team has been very active in other formats of open-air retail.
Thankfully, volume is coming back, so we will achieve our volume goals notwithstanding it being more competitive. We just have to work a little harder, and so far, so good.
Todd Thomas: Okay, that is helpful. And then, John, just real quick—appreciate the update on CityPoint as it pertains to the guidance. What is the ABR upside opportunity there today? You are at a little over $21 million of ABR—where does that stabilize, and what is the current thinking around the stabilization timeframe?
John Gottfried: In terms of stabilization, Todd, we have always thought of it in two distinct phases. The first phase—in the next 18 to 24 months—we should be able to add 10% to 20% to current ABR. That is our goal and leasing plan over the next year or two. Secondly, after that—again, the neighborhood is still filling in—once we prove out the concept and have some leases we have signed rolling, we think we add another 30% to 40% off of that once we get to that next level of stabilization after we get through the first phase.
Alexander J. Levine: For sure. The last 18 months have been pivotal at CityPoint. Between Sephora and Swarovski, most recently Warby Parker and Van Leeuwen, it really is starting to get that Armitage and M Street feel. At this point, it is about finding the right retailers and completing the right merchandising mix. There is a lot of runway ahead.
John Gottfried: The way we look at it to give us conviction is the sales being generated. We do not want to give individual tenant sales, but you can guess who they are. They are doing increasing volumes that are attracting the attention of retailers. That gives us conviction it is a matter of when, not if.
Todd Thomas: Okay. That is helpful. Thank you.
Operator: Our next question comes from Michael Mueller with JPMorgan.
Michael Mueller: Yes, hi. First, you mentioned 8% to 10% returns for the Henderson expansion. What are some of the moving parts that pull you to 8% versus 10%? Is there that much variability in the rents being discussed?
Kenneth F. Bernstein: Mike, some of it is cost, some is timing of openings and when we declare stabilization. When you are doing a full lease-up like this, 200 basis points of variability feels normal. Maybe it is a little wide so that we are being conservative, but it is not appropriate to say we are getting to 9% right now. Give us a little latitude. Hopefully, the tenant sales performance we have seen so far and the tenant enthusiasm continue. A lot of it is logistics—how long it takes to get the various tenants open. A few months’ delay could change those numbers 10 to 20 basis points one direction or another.
Michael Mueller: Okay. And second question: you now have, what, three buildings on Newbury and one in Palm Beach. The goal is to scale that, but could you operate those buildings efficiently over the longer term if you could not find additional acquisitions, or do you need five or ten assets in a market to have it work over the long term?
John Gottfried: We could absolutely operate them.
Kenneth F. Bernstein: When we refer to benefits of scale, it is very different than G&A as a percentage of assets in a given corridor. While there are cost benefits, what we are seeing is different. When we control enough buildings on a given corridor—as we have on Armitage Avenue, on M Street, and as you will see on Greene Street in New York—we can pull other levers that enable us to get higher rents more efficiently, with less downtime. AJ and team are constantly shuffling tenants. Some tenants want to be larger; others are ready to leave.
By having enough choices on a given corridor and being a trusted landlord, the benefits of scale we are referring to are not cost related—it is really the ability to drive rents and NOI over time. That requires more than just a couple of buildings on any corridor. For those benefits of scale, I look forward to Reggie and team adding to both of these corridors over time.
Operator: Thank you. That concludes today’s question-and-answer session. I would like to turn the call back to Kenneth F. Bernstein for closing remarks.
Kenneth F. Bernstein: Great. Thank you, everyone. We look forward to speaking with you next quarter. This concludes today’s conference call.
Operator: Thank you for participating. You may now disconnect.
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Acadia (AKR) Q1 2026 Earnings Call Transcript was originally published by The Motley Fool
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- Acadia Realty Trust: Q1 Earnings Snapshot
Apr 28, 2026
RYE, N.Y. (AP) — RYE, N.Y. (AP) — Acadia Realty Trust (AKR) on Tuesday reported a key measure of profitability in its first quarter.
The Rye, New York-based real estate investment trust said it had funds from operations of $41.8 million, or 30 cents per share, in the period.
Funds from operations is a closely watched measure in the REIT industry. It takes net income and adds back items such as depreciation and amortization.
The company said it had net income of $28.4 million, or 22 cents per share.
The real estate investment trust posted revenue of $103 million in the period.
Acadia Realty Trust expects full-year funds from operations in the range of $1.22 to $1.26 per share.
The company's shares have increased 3% since the beginning of the year. In the final minutes of trading on Tuesday, shares hit $21.20, a rise of 7% in the last 12 months.
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This story was generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on AKR at https://www.zacks.com/ap/AKR
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- Acadia Realty Trust Reports First Quarter 2026 Operating Results
Apr 28, 2026
Key Highlights for the first quarter ended March 31, 2026 include:
First quarter GAAP net earnings of $0.22 per share (compared to $0.01 in first quarter 2025) and FFO As Adjusted of $0.30 per share, up 11% from the prior-year quarter First quarter REIT Portfolio same-property NOI increased 5.9% and reaffirmed 5-9% annual guidance Delivered REIT Portfolio GAAP and cash leasing spreads on new leases of 50% and 31%, respectively Increased SNO Pipeline to $10.5 million (from $8.9 million at December 31, 2025) Increased REIT Portfolio economic occupancy by 20 basis points to 94.1% during the first quarter driven by the street and urban portfolio, which increased 140 basis points from the fourth quarter to 91.7% as of March 31, 2026 Completed approximately $503 million of accretive acquisitions comprised of REIT Portfolio (street retail of $79 million) and Investment Management ($424 million) Completed recapitalizations of approximately $504 million of assets in the Investment Management platform Raised full-year 2026 guidance: Earnings per share to $0.37-$0.39 (from $0.24-$0.26) and FFO As Adjusted to $1.22-$1.26 (from $1.21-$1.25)
Subsequent Events
Signed an approximately 26,000 square foot lease with Sprouts Farmers Market at 555 9th Street in San Francisco, joining the previously signed Club Studio (expected to open late 2026), reflecting the market’s accelerating retail recovery Completed a $109 million accretive portfolio acquisition on Newbury Street in Boston Increased its borrowing capacity, extended duration and improved pricing on a $1.425 billion credit facility (replacing its $1.175 billion facility)
RYE, N.Y., April 28, 2026--(BUSINESS WIRE)--Acadia Realty Trust (NYSE: AKR) ("Acadia" or the "Company") today reported operating results for the quarter ended March 31, 2026. All per share amounts are on a fully-diluted basis, where applicable. Acadia owns and operates a high-quality real estate portfolio of street and open-air retail properties in the nation's most dynamic retail corridors ("REIT Portfolio"), along with an investment management platform that targets opportunistic and value-add investments through its institutional co-investment vehicles ("Investment Management").
Kenneth F. Bernstein, President and CEO of Acadia, commented:
"Our first quarter results reflect continued execution across Acadia's differentiated dual-platform strategy. Our street portfolio continues to benefit from strong tenant demand, enabling us to deliver same-property NOI growth of 5.9% for the quarter. Complementing this internal growth, we completed over $600 million of accretive REIT and Investment Management acquisitions in 2026. This includes our inaugural investment on Worth Avenue in Palm Beach, and our continued deployment of capital through our Investment Management platform. With strong internal growth, a well-positioned balance sheet, and an active acquisition pipeline, we remain well positioned to deliver sustained NOI and earnings growth over a multi-year horizon."
Financial Results
A complete reconciliation, in dollars and per share amounts, of (i) net earnings attributable to Acadia to Funds From Operations ("FFO") (as defined by the National Association of Real Estate Investment Trusts ("NAREIT") and As Adjusted) attributable to common shareholders and Common OP Unit holders and (ii) operating income to net operating income ("NOI") and definitions of non-GAAP metrics are included in the financial tables of this release. The amounts discussed below are net of noncontrolling interests (except for the Common OP Unit holders) and all per share amounts are on a fully-diluted basis.
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Net Income
Net income per share for the three months ended March 31, 2026 was $0.22. This compares with net income per share for the three months ended March 31, 2025 of $0.01. The increase for the quarter ended March 31, 2026, as compared to the quarter ended March 31, 2025, was primarily a result of gains on sale of $0.22 per share in 2026, and the loss on change in control related to the Company’s additional investment in its Georgetown Renaissance portfolio of $0.08 per share in 2025. Offsetting these items, during the three months ended March 31, 2026, the Company incurred charges of approximately $5 million, or $0.04 per share, to net income and NAREIT FFO, primarily comprised of retirement-driven, non-cash acceleration of unvested stock-based compensation awards (approximately $4.1 million included in general and administrative expenses), an unrealized loss on an investment (approximately $600,000) and non-capitalizable transaction costs (approximately $300,000, included in general and administrative expenses).
NAREIT FFO
NAREIT Funds From Operations ("NAREIT FFO") for the quarter ended March 31, 2026 was $36.9 million, or $0.26 per share, as compared to $44.6 million, or $0.34 per share, for the quarter ended March 31, 2025.
FFO As Adjusted
FFO As Adjusted for the quarter ended March 31, 2026 was $41.8 million, or $0.30 per share, as compared to $35.1 million, or $0.27 per share, for the quarter ended March 31, 2025.
REIT Portfolio Same-Property NOI
Same-Property NOI grew 5.9%, for the first quarter, primarily driven by 7.0% growth from the street and urban retail portfolio. These amounts exclude developments and redevelopments.
REIT Portfolio Occupancy and Leasing Update
As of March 31, 2026, economic occupancy and leased occupancy increased 20 and 60 basis points to 94.1% and 95.3%, respectively, compared to 93.9% and 94.7% as of December 31, 2025. For the quarter ended March 31, 2026, conforming GAAP and cash leasing spreads on new leases were 50% and 31%, respectively, and 23% and 11%, inclusive of renewal leases.
Signed Not Opened Update
The following summarizes the activity, at the Company’s pro-rata share, of ABR of its signed not opened pipeline during the first quarter (amounts in millions):
Balance at
December 31,
2025 Commencing
ABR New Leases Balance at
March 31,
2026 REIT Portfolio (Same-property) $ 4.4 $ (1.5 ) $ 1.6 $ 4.5 REIT Portfolio (Redevelopment/Prestabilized) 3.5 (0.2 ) 1.9 5.2 Investment Management 1.0 (0.5 ) 0.3 0.8 Total $ 8.9 $ (2.2 ) $ 3.8 $ 10.5
Transactional Activity
During the quarter ended March 31, 2026, the Company completed approximately $503 million in accretive acquisitions comprised of REIT Portfolio ($79 million) and Investment Management ($424 million). Subsequent to quarter end, the Company completed an additional $109 million street retail portfolio acquisition in its REIT Portfolio. Details of the acquisitions are discussed below.
In addition, the Company completed recapitalizations of approximately $504 million in its Investment Management platform.
REIT Portfolio
Manhattan, New York. As previously disclosed, in January 2026, the Company acquired 1045 and 1165 Madison Avenue in Manhattan for an aggregate purchase price of $21 million. These assets further expand the Company’s ownership on upper Madison Avenue and align with its strategy of expanding its portfolio on must-have street retail corridors. Palm Beach, Florida. In March 2026, the Company acquired 225 Worth Avenue for a purchase price of $43 million. Worth Avenue in Palm Beach is an exclusive retail corridor serving one of the wealthiest and fastest-growing markets in the country. The Company's inaugural investment in this market provides it with a compelling near-term opportunity to drive rental growth, as well as a platform to pursue additional acquisitions and grow our presence on this irreplaceable street. Boston, Massachusetts. In April 2026, the Company, in conjunction with Osiris Ventures, acquired 4-6 Newbury Street and 28 Newbury Street for an aggregate purchase price of $109 million, expanding its presence on Newbury Street, Boston's premier luxury shopping corridor. The properties are leased to two of the world's most iconic luxury brands and provide a near-term opportunity to capture significant rental growth as a key retail lease approaches expiration. Strategic Add-on Acquisitions (Washington D.C. and Armitage Avenue Chicago): In the first quarter, the Company added approximately $14 million of new acquisitions to further increase its scale in two of its key corridors.
Investment Management Platform Acquisition
Queens, New York. As previously disclosed, in January 2026, the Company, through its Investment Management platform, formed a joint venture with TPG Real Estate to acquire the Shops at Skyview for a gross purchase price of approximately $424 million of which the Company has a 20% ownership interest. The Shops at Skyview is a 555,000 retail center in Flushing, Queens, attracting 12 million visitors a year and anchored by three grocers along with an attractive mix of essential goods, value-oriented brands, and experiential concepts.
Investment Management Platform Recapitalizations
Fund V and Avenue at West Cobb Recapitalization. As previously disclosed, in February 2026, the Company and TPG Real Estate completed a $435 million portfolio transaction involving six Fund V assets (Hickory Ridge, Palm Coast Landing, Hiram Pavilion, Canton Marketplace, Elk Grove Commons, and Midstate Mall) along with the Avenue West Cobb (acquired in the third quarter of 2025). In connection with this transaction, the Company recognized a gain on sale of approximately $112 million, or $22 million ($0.15 per share) at its share.
TPG acquired an 80% interest across the portfolio, with Acadia retaining a 20% ownership in the previously held Fund V assets, along with a 20% interest in West Cobb. Lake Worth, Florida. During March 2026, the Company completed the recapitalization of Pinewood Square, a 204,000 square foot retail center in Lake Worth, Florida, which was acquired in the first quarter of 2025. The Company sold an 80% interest to the Private Real Estate Group of Cohen & Steers, reflecting a total asset valuation of approximately $68 million. The Company recognized a gain on sale of $4.1 million ($0.03 per share) in connection with this transaction.
In connection with each of these recapitalizations, the Company will continue to manage the respective properties, earning asset management, property management, and leasing fees, as well as a potential promote upon ultimate disposition.
Dispositions
Virginia Beach, Virginia. As previously disclosed, during January 2026, the Company, through its Fund V platform, completed the disposition of Landstown Commons for $102 million, of which the Company’s share was $21 million. In connection with this transaction, the Company recognized a gain on sale of $26 million, or $5.1 million ($0.04 per share) at its share. San Francisco, California. During March 2026, the Company, through its Fund IV platform, completed the disposition of 1964 Union Street for $2.6 million, of which the Company’s share was approximately $0.5 million. Warwick, Rhode Island. During April 2026, the Company, through its Fund IV platform, completed the disposition of 650 Bald Hill Road for $20.5 million, of which the Company’s share was approximately $4.3 million.
Balance Sheet
Equity Activity:
The Company did not issue any equity during the first quarter of 2026. Additionally, during the first quarter, the Company settled approximately 2.4 million shares of previously issued forward equity contracts for cash proceeds of approximately $56 million. The Company currently has unsettled forward equity contracts to sell 12.3 million shares for aggregate net proceeds of approximately $239 million to accretively fund its acquisition pipeline and the Henderson Avenue redevelopment project in Dallas, TX.
Extension and Expansion of $1.425 Billion Corporate Credit Facility
In April 2026, the Company amended and upsized its corporate credit facility by $250 million to $1.425 billion, and extended maturity dates. The credit facility has an accordion feature that allows the Company to increase the capacity to $2.0 billion. The facility was oversubscribed and priced at improved spreads relative to the prior facility. Proceeds from the $250 million upsize were used to repay outstanding amounts on its revolving credit facility and other secured indebtedness.
Pro-Rata REIT Portfolio and Investment Management Debt-to-EBITDA (as adjusted):
Net Debt-to-EBITDA, as adjusted, inclusive of pro-rata share of Investment Management platform debt and unsettled forward equity contracts that were issued prior to March 31, 2026 as discussed above, was 5.5x at March 31, 2026. Refer to the first quarter 2026 Supplemental Information package for reconciliations and details on financial ratios.
No Significant REIT Portfolio Debt Maturities until 2029:
The Company has REIT portfolio debt maturing of 2.5%, 2.6%, and 7.5% in 2026, 2027, and 2028, respectively.
Guidance
The Company is increasing its previously issued guidance for Earnings per Share from $0.24-0.26 to $0.37-$0.39 and FFO As Adjusted from $1.21-$1.25 per share to $1.22-$1.26 per share.
The following updated guidance is based upon Acadia’s current view of market conditions and assumptions for the year ended December 31, 2026.
2026 Guidance1 Revised Prior Net earnings per share attributable to Acadia $0.37-$0.39 $0.24-$0.26 Depreciation of real estate and amortization of leasing costs (net of noncontrolling interest share other than Common OP Units) 0.95-0.97 0.95-0.97 Gain on disposition on real estate properties (net of noncontrolling interest share other than Common OP Units) (0.22) (0.04) Adjustment of redeemable noncontrolling interest to estimated redemption value 0.04 — Noncontrolling interest in Operating Partnership 0.03 0.03 NAREIT Funds from operations per share attributable to Common Shareholders and Common OP Unit holders $1.17-$1.21 $1.18-$1.22 Adjustments to FFO: Transaction and other expenses2 0.05 0.03 Funds From Operations As Adjusted per share attributable to Common Shareholders and Common OP Unit holders3 $1.22-$1.26 $1.21-$1.25
Totals may not foot due to rounding. Transaction and other expenses include those costs that the Company believes are not reflective of ongoing core operating results, including investment transaction costs, debt extinguishment costs and employee retirement costs. Refer to the "Notes to Financial Highlights" on page 14 of this release for definitions of non-GAAP measures
Management will conduct a conference call on Wednesday, April 29, 2026 at 11:00 AM ET to review the Company’s earnings and operating results. Participant registration and webcast information is listed below.
Live Conference Call: Date: Wednesday, April 29, 2026 Time: 11:00 AM ET Participant call: First Quarter 2026 Dial-In Participant webcast: First Quarter 2026 Webcast Webcast Listen-only and Replay: www.acadiarealty.com/investors under Events & Presentations
The Company uses, and intends to use, the Investors page of its website, which can be found at https://www.acadiarealty.com/investors, 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 and certain portfolio updates. Additionally, the Company also uses its LinkedIn profile to communicate with its investors and the public. Accordingly, investors are encouraged to monitor the Investors page of the Company's website and its LinkedIn profile, in addition to following the Company’s press releases, SEC filings, public conference calls, presentations and webcasts.
About Acadia Realty Trust
Acadia Realty Trust is an equity real estate investment trust focused on delivering long-term, profitable growth. Acadia owns and operates a high-quality core real estate portfolio of street and open-air retail properties in the nation's most dynamic retail corridors ("REIT Portfolio"), along with an investment management platform that targets opportunistic and value-add investments through its institutional co-investment vehicles ("Investment Management"). 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 (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). We intend these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and we are including this statement for the purposes of complying with those safe harbor provisions, in each case, to the extent applicable. Forward-looking statements, which are based on certain assumptions and describe the Company's future plans, strategies and expectations (including with regards to acquisition pipeline) 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) macroeconomic conditions, including due to geopolitical instability (such as ongoing armed conflicts and heightened regional tensions in the Middle East), contemplated tariff increases and other trade restrictions, 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) the Company’s success in implementing its business strategy and its ability to identify, underwrite, finance, consummate and integrate diversifying acquisitions and investments; (including the potential acquisitions discussed in this press release); (iii) changes in general economic conditions or economic conditions in the markets in which the Company may, from time to time, compete, including the impact of recently announced tariffs on our tenants and their customers, and their effect on the Company’s and our tenants' revenues, earnings and funding sources and those of our tenants; (iv) increases in the Company’s borrowing costs as a result of rising inflation, changes in interest rates and other factors; (v) the Company’s ability to pay down, refinance, restructure or extend its indebtedness as it becomes due; (vi) 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; (vii) the Company’s ability to obtain the financial results expected from its development and redevelopment projects; (viii) 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; (ix) the Company’s potential liability for environmental matters; (x) damage to the Company’s 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 future public health crisis which may adversely affect us and our tenants’ business, financial condition, results of operations and liquidity; (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 ("IT") security breaches, including increased cybersecurity risks relating to the use of remote technology and artificial intelligence ("AI"); (xv) risks associated with our use of AI tools, which could result in reputational harm, and legal or regulatory liability; (xvi) the loss of key executives; and (xvii) the accuracy of the Company’s methodologies and estimates regarding corporate responsibility metrics, goals and targets, tenant willingness and ability to collaborate towards reporting such metrics and meeting such goals and targets, and the impact of governmental regulation on our corporate responsibility 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 most recent Annual Report on Form 10-K 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 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.
Acadia Realty Trust and Subsidiaries Condensed Consolidated Statements of Operations(1) (Unaudited, Dollars and Common Shares and Units in thousands, except per share amounts) Three Months Ended
March 31, 2026 2025 Revenues Rental $ 98,568 $ 102,640 Other 4,424 1,754 Total revenues 102,992 104,394 Expenses Depreciation and amortization 40,155 39,440 General and administrative 15,303 11,597 Real estate taxes 12,922 13,303 Property operating 18,249 18,280 Impairment charges — 6,450 Total expenses 86,629 89,070 Gain on disposition of properties 142,148 — Operating income 158,511 15,324 Equity in losses of unconsolidated affiliates (1,508 ) (1,713 ) Interest income 4,788 6,096 Realized and unrealized holding (losses) gains on investments and other (616 ) 1,621 Interest expense (22,052 ) (23,247 ) Loss on change in control — (9,622 ) Income (loss) from continuing operations before income taxes 139,123 (11,541 ) Income tax provision (12 ) (116 ) Net income (loss) 139,111 (11,657 ) Net loss attributable to redeemable noncontrolling interests 698 1,669 Net (income) loss attributable to noncontrolling interests (109,332 ) 11,596 Net income attributable to Acadia shareholders $ 30,477 $ 1,608 Less: earnings attributable to unvested participating securities (333 ) (339 ) Less: adjustment of redeemable noncontrolling interests to estimated redemption value (1,793 ) — Income from continuing operations net of income attributable to participating securities for diluted earnings per share $ 28,351 $ 1,269 Weighted average shares for basic earnings per share 131,247 121,329 Weighted average shares for diluted earnings per share 131,332 121,329 Net earnings per share - basic (2) $ 0.22 $ 0.01 Net earnings per share - diluted (2) $ 0.22 $ 0.01
Acadia Realty Trust and Subsidiaries Reconciliation of Consolidated Net Income to Funds from Operations and Funds from Operations As Adjusted (1,3) (Unaudited, Dollars and Common Shares and Units in thousands, except per share amounts) Three Months Ended
March 31, 2026 2025 Net income attributable to Acadia $ 30,477 $ 1,608 Depreciation of real estate and amortization of leasing costs (net of noncontrolling interests' share other than Common OP Units) 35,851 31,607 Impairment charges (net of noncontrolling interests' share other than Common OP Units) — 1,583 Gain on disposition of properties (net of noncontrolling interests' share other than Common OP Units) (30,954 ) — Loss on change in control — 9,622 Income attributable to Common OP Unit holders 1,496 96 Distributions - Preferred OP Units 5 67 Funds from operations attributable to Common Shareholders and Common OP Unit holders - Diluted $ 36,875 $ 44,583 Transaction and other expenses 4,358 526 Unrealized holding loss (gain) (net of noncontrolling interest share) 616 (1,672 ) Tenant lease settlement — (8,309 ) FFO As Adjusted attributable to Common Shareholder and Common OP Unit holders1 $ 41,849 $ 35,128 Funds From Operations per Share - Diluted Basic weighted-average shares outstanding, GAAP earnings 131,332 121,329 Weighted-average OP Units outstanding 8,376 7,778 Assumed conversion of Preferred OP Units to Common Shares 25 256 Weighted average number of Common Shares and Common OP Units 139,733 129,363 Diluted Funds From Operations, per Common Share and Common OP Unit $ 0.26 $ 0.34 Diluted Funds From Operations As Adjusted, per Common Share and Common OP Unit $ 0.30 $ 0.27
Acadia Realty Trust and Subsidiaries Reconciliation of Consolidated Operating Income to Net Property Operating Income ("NOI") (1) (Unaudited, Dollars in thousands) Three Months Ended
March 31, 2026 2025 Consolidated operating income $ 158,511 $ 15,324 Add back: General and administrative 15,303 11,597 Depreciation and amortization 40,155 39,440 Impairment charges — 6,450 Gain on disposition of properties (142,148 ) — Less: Above/below-market rent, straight-line rent and other adjustments (6,985 ) (2,704 ) Termination income — (8,366 ) Consolidated NOI 64,836 61,741 Redeemable noncontrolling interest in consolidated NOI (1,840 ) (1,888 ) Noncontrolling interest in consolidated NOI (14,997 ) (17,655 ) Less: Operating Partnership's interest in Investment Management NOI included above (7,542 ) (6,747 ) Add back: Operating Partnership's share of unconsolidated joint ventures NOI (4) 1,358 1,279 REIT Portfolio NOI $ 41,815 $ 36,730
Reconciliation of Same-Property NOI (Unaudited, Dollars in thousands) Three Months Ended
March 31, 2026 2025 REIT Portfolio NOI $ 41,815 $ 36,730 Less properties excluded from Same-Property NOI (2,973 ) (52 ) Same-Property NOI $ 38,842 $ 36,678 Percent change from prior year period 5.9 % Components of Same-Property NOI: Same-Property Revenues $ 54,709 $ 51,442 Same-Property Operating Expenses (15,867 ) (14,764 ) Same-Property NOI $ 38,842 $ 36,678
Acadia Realty Trust and Subsidiaries Condensed Consolidated Balance Sheets (1) (Unaudited, Dollars in thousands, except shares) As of: March 31, 2026 December 31, 2025 Assets Investments in real estate, at cost Buildings and improvements $ 3,057,952 $ 3,421,366 Tenant improvements 321,489 339,414 Land 1,100,492 1,147,236 Construction in progress 26,266 32,969 Right-of-use assets - finance leases 61,366 61,366 Total 4,567,565 5,002,351 Less: Accumulated depreciation and amortization (979,837 ) (1,018,597 ) Operating real estate, net 3,587,728 3,983,754 Real estate under development 178,050 167,051 Net investments in real estate 3,765,778 4,150,805 Notes receivable, net ($2,176 and $1,638 of allowance for credit losses as of March 31, 2026 and December 31, 2025, respectively) 154,430 154,892 Investments in and advances to unconsolidated affiliates 275,770 161,955 Other assets, net 190,101 223,980 Right-of-use assets - operating leases, net 22,596 23,594 Cash and cash equivalents 31,415 38,818 Restricted cash 17,374 18,081 Rents receivable, net 56,259 65,027 Assets of property held for sale 18,932 — Total assets $ 4,532,655 $ 4,837,152 Liabilities: Mortgage and other notes payable, net $ 624,764 $ 893,944 Unsecured notes payable, net 880,012 879,462 Unsecured line of credit 91,500 89,500 Accounts payable and other liabilities 222,654 273,479 Lease liabilities - operating leases 24,918 25,972 Dividends and distributions payable 28,421 28,526 Distributions in excess of income from, and investments in, unconsolidated affiliates 16,241 16,838 Liabilities of property held for sale 161 — Total liabilities 1,888,671 2,207,721 Commitments and contingencies Redeemable noncontrolling interests 8,457 9,113 Equity: Acadia Shareholders' Equity Common shares, $0.001 par value per share, authorized 200,000,000 shares, issued and outstanding 133,513,864 and 131,036,560 shares as of March 31, 2026 and December 31, 2025, respectively 134 131 Additional paid-in capital 2,755,574 2,710,651 Accumulated other comprehensive income 20,057 15,585 Distributions in excess of accumulated earnings (498,735 ) (500,720 ) Total Acadia shareholders’ equity 2,277,030 2,225,647 Noncontrolling interests 358,497 394,671 Total equity 2,635,527 2,620,318 Total liabilities, redeemable noncontrolling interests, and equity $ 4,532,655 $ 4,837,152
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, which is available on the SEC's website at www.sec.gov and on the Company’s website at www.acadiarealty.com. 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 (the "Operating Partnership"), 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 As Adjusted" is also an appropriate supplemental disclosure of operating performance. FFO, FFO As Adjusted and NOI are presented to assist investors in analyzing the performance of the Company. The Company believes they are helpful as they exclude various items included in net income (loss) that are not indicative of operating performance, such as (i) gains (losses) from sales of real estate properties; (ii) depreciation and amortization, (iii) impairment of depreciable real estate assets related to the Company’s main business and land held for the development of property, and (iv) items that management believes are not reflective of ongoing core operating results, including non-comparable revenues, expenses, gains, and losses. While these adjustments may be subject to fluctuations from period to period, with both positive and negative short-term impacts, management believes that the removal of the impacts of these items enhances our understanding of the operating performance of our properties. The Company believes that introducing a new supplemental measure beginning with fiscal year 2026 is useful for evaluating operating performance and comparing historical financial periods. The Company’s method of calculating FFO, FFO As Adjusted 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 As Adjusted represent cash generated from operations as defined by generally accepted accounting principles ("GAAP"), nor 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 properties; depreciation and amortization; impairment of real estate assets related to the Company’s main business and land held for the development of property for its operating portfolio; gains and losses from change in control; and after adjustments for unconsolidated partnerships and joint ventures. Also consistent with NAREIT’s definition of FFO, the Company has elected to include: the impact of the unrealized holding gains (losses) incidental to its main business, including those related to its investments in Albertsons in FFO. FFO As Adjusted (new metric starting in 2026) begins with the NAREIT definition of FFO and adjusts FFO (or as an adjustment to the numerator within its earnings per share calculations) 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. The pro-rata share of NOI is based upon the Operating Partnership’s stated ownership percentages in each venture’s operating agreement and does not include the Operating Partnership's share of NOI from unconsolidated partnerships and joint ventures within Investment Management.
View source version on businesswire.com: https://www.businesswire.com/news/home/20260428210586/en/
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Acadia Realty Trust
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- Acadia (AKR) Q3 2025 Earnings Call Transcript
Apr 28, 2026
Image source: The Motley Fool.
DATE
Wednesday, October 29, 2025 at 12 p.m. ET
CALL PARTICIPANTS
President and Chief Executive Officer — Kenneth Bernstein Executive Vice President, Chief Operating Officer, and Head of Street Retail — Alexander Levine Executive Vice President, Chief Investment Officer — Reginald Livingston Executive Vice President and Chief Financial Officer — John Gottfried
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Full Conference Call Transcript
Kenneth Bernstein: Thank you, Gabriella, great job. Welcome, everyone. Last quarter, I commented that in the ongoing tug of war between economic uncertainty and resilience, resilience seems to be winning. Well, looking at our third quarter results, this continues to be the case. Notwithstanding, continued noise and uncertainty around the broader economy, tenant performance and tenant demand at our properties, especially the street retail component, is continuing, and if anything, this positive momentum is accelerating. In fact, we are probably at an inflection point for our portfolio's operating performance. As John Gottfried will explain, as we look at our forecast for 2026, we see both total NOI growth and same-store growth accelerating, keeping us well above our long-term goal of 5% growth.
And we remain focused on making sure that this top line growth hits the bottom line with respect to our earnings. As A.J. Levine will discuss, we see enough internal growth opportunities beginning to take shape to enable us to maintain this 5% plus annual growth well into the foreseeable future. A.J. will walk through in detail our continued progress in the third quarter. But in short, we were busy both harvesting current opportunities as well as planting seeds for longer-term internal growth. This includes realizing a 45% lease spread in SoHo, a 70% mark-to-market on Bleecker Street while successfully opening new stores, representing nearly $7 million from our SNO Pipeline and then positioning us for future growth.
We also added nearly $4 million in new leases into our SNO Pipeline. I discussed in detail on previous calls, the tailwinds for open-air retail demand. They're still continuing and remain encouraging, both for our suburban and our street retail portfolio, but the tailwinds for our street retail portfolio seem to have even more momentum for a few reasons. First, is the longer-term secular trend of retailers recognizing the critical need to establish their own network of stores, what we refer to as or DTC or direct-to-consumer stores. This trend is increasing the demand from mission-critical locations, especially in the key markets where we are most active.
Story Continues
Second, is the continued resilience and increasing importance of the affluent consumer who are the majority of the shoppers at our street locations. And then third and perhaps most encouraging is the noticeable resurgence of foot traffic and energy on these streets. This energy and excitement was on full display earlier this month at Kith's grand opening at our Walton Street property in the Gold Coast of Chicago. Hundreds of eager customers waited online for hours to shop this exciting 10,000 square foot flagship store. If you've recently shopped at Gold Coast of Chicago and were impressed by what you saw, you're not alone.
Our team consistently hears from investors after touring [indiscernible] a given city, how they did not appreciate the vibrancy that is occurring until they saw firsthand. And if you've not toured some of these markets, and are simply relying on your new speed, especially depending on what cable channel you watch, you are missing out on the power of these retail markets. Thankfully, our retailers get this. This is why Melrose Place in L.A. or Green Street in SoHo are experiencing the continued tailwinds well in excess of our expectations. And it is expanding beyond a few major markets and in ways that might surprise you. For instance, in Georgetown in D.C.
Notwithstanding all of the attention and concern around Washington, D.C. and surrounding markets due to DOGE or government shutdowns for the majority of our retailers on M Street, foot traffic and sales are up year-over-year and tenant demand has not been this strong in a decade. New York experienced this rebound earlier than most markets. But now we are seeing this play out across all of our urban markets. San Francisco is the most recent example of this momentum, driven by the growth in artificial intelligence, accelerating a return to office and a new mayor, who is making important progress on quality of life issues, that had burdened the city coming out of COVID.
And what we are seeing on the ground is that the live, work, play vibrancy that San Francisco has historically enjoyed is coming back and so are our retailers. That resurgence is coming at the right time for our 2 significant San Francisco redevelopment projects. At City Center, we have our new T&T supermarkets slated to open in late 2026, and at our 555 9th Street redevelopment, we recently expanded our Trader Joe's and have a new lease with LA Fitness' high-end club studio, slated to open next year. On a combined basis, these 2 projects have close to 100,000 square feet of additional space for us to lease and are slated to add roughly 5% to our REIT NOI.
And if the positive momentum continues, we'll have even more growth. Along with continuing to drive our internal growth, a key additional driver of our business is adding accretive and complementary external growth, both on balance sheet and then through our investment management platform. While we saw a bit of a pause in investment activity around Liberation Day concerns, based on the current status of our pipeline, we are now confident that our 2025 investment activity will match the strength of 2024, which was also a great year for us in terms of external growth.
Reggie will walk through our transactions closed last quarter and the opportunities we see going forward, but to reiterate our goals and outlook, given our size, we see our acquisition activity continuing to enable us to move the needle. And while our cost of capital increased some last quarter, we are confident that we can still invest accretively and we will. For our on-balance sheet street retail investments, this confidence is due to a few factors. First, Acadia is in somewhat of a unique position of being a buyer of choice.
There are certainly private market participants that are active competitors, but we have carved out a niche and a reputation that gives us a competitive advantage in the street retail space, an advantage that does not exist in other segments of open-air retail where there are too many well-capitalized private participants for any one public or a private player to have a unique advantage. Second, along with being a buyer of choice, many retailers view us as a landlord of choice, and they are steering acquisition opportunities our way as well.
And then finally, as we discussed on the last call, the scale that we continue to build, both in terms of ownership concentration in a given corridor as well as tenant relationships nationwide, is giving us increased visibility into the accretion potential we can achieve in any given investment and providing us a competitive advantage over other bidders. All of this makes us uniquely well positioned to continue to attractively add street retail to our portfolio, and it provides further support for why we are focused on building Acadia into the premier owner operator of street retail in the U.S. Then for our Investment Management platform. The volatility in the REIT market is less of an issue.
Perhaps, it's even a tailwind, since we rely on our institutional partners for the majority of the capital and are generally recycling our equity in this complementary and profitable by fixed sell arm of our business. So in conclusion, as we look forward, our peer-leading internal growth looks like it has several years of tailwinds behind it. Coupled with continued strong external growth and a balance sheet with multiple avenues of access to capital, we are well positioned to absorb any speed bumps and more importantly, capitalize on the exciting opportunities in front of us. I'd like to thank the team for their continued hard work. And with that, I will hand the call over to A.J. Levine.
Alexander Levine: Thanks, Ken. Hi, everybody. Good afternoon. So jumping right in, I'm happy to report another successful and productive quarter of leasing, with the team executing on another $3.7 million in ABR and bringing total signed leases year-to-date to $11.4 million, keeping us well ahead of last year's record-setting pace. To put that into some context, for every $1.4 million of new revenue we add, that equates to about $0.01 of FFO. And overall GAAP spreads for new and renewal leases on our streets were 32%. Looking forward, we've seen no signs of a slowdown in tenant demand.
And in addition to the leases we signed during the quarter, we've increased the size of our lease negotiation pipeline to $8 million, which is $1 million ahead of where we were at the end of Q2. In short, that translates to an increase in leasing velocity, fueled by pending new leases on North 6th Street in Williamsburg, Newbury Street in Boston and on Melrose Place in Los Angeles, all markets where we will see the highest level of contractual growth at 3% per annum.
The pipeline also includes another impactful deal in San Francisco, where so far this year, we've executed on over 90,000 square feet, including new leases with T&T Supermarkets, LA Fitness Club Studio and a long-term renewal and expansion of Trader Joe's. John will get into the details of our SNO pipeline, but in Q3, we converted approximately $7 million of ABR from SNO to open and paying tenants. Impactful openings from the quarter included the Richemont brand Watchfinder, John Varvatos and Alex Moss, all in SoHo; Kith on the Gold Coast of Chicago; Moscot on Armitage Avenue; and J.Crew on M Street in D.C. But this is not just leasing and delivering space.
In addition to filling vacancies, we are prying loose and profitably backfilling space while improving the curation and merchandising along our high-growth streets. In the third quarter, we pried loose and replaced 4 tenants in high-growth markets, including M Street, Williamsburg, Bleecker Street and SoHo at an average GAAP spread of 36%. Each of those leases is subject to 3% contractual increases and the opportunity to once again mark-to-market in the relative near term through FMV resets. During the quarter, we added, expanded or renewed some highly coveted brands, including Veronica Beard, Faherty, Theory and Frame Denim, again, all in SoHo.
Sezane on M Street, Doen on Bleecker Street, Tecovas on Henderson and Practice Room in Williamsburg, just to name a few. I'm also happy to report that momentum on Henderson Avenue in Dallas continues to build, and the redevelopment is ahead of pro forma. Over 60% of the retail is spoken for with some of today's most recognizable and coveted brands, several of which you will find elsewhere in our portfolio on Armitage Avenue, the Gold Coast of Chicago, in SoHo and on Melrose Place. Which become clear over the last several quarters is that our strategy of building scale in must-have street markets means that our team is getting the first call, the early call and the urgent calls.
Our recent lease with Sezane in M Street is a perfect example of our first call advantage. Like many recent negotiations, this one started with the simple question, where can you put me? As the largest owner of retail on M Street, Sezane knew that we were the right landlord to help them find a long-term home in Georgetown. And true to form, we were able to pry loose an under-market tenant, increase the rent by double digits and upgrade the overall curation of the street. Historically, tight supply means that tenant calls are coming in early, sometimes 12 to 15 months before a space will become available.
We are currently in active negotiations with tenants on Melrose, in SoHo and on North 6th Street for space with expirations that are all more than 12 months out. And finally, the strong sales performance we continue to see on our streets is creating a sense of urgency amongst our tenants. There is a very real fear among tenants of missing out on the incredible sales growth that our highest earning consumers are continuing to drive on our streets. From reporting tenants on our streets, year-to-date comparable soft goods and apparel sales continue to outperform.
In SoHO, sales are up 15%; on Bleecker Street, north of 30%; and on the Gold Coast of Chicago, driven largely by an accelerated recovery on North Michigan Avenue, sales are up over 40%. Even on State Street in Downtown Chicago, which has certainly felt the effects of hybrid work over the last several years, we are seeing the early signs of a strong recovery with sales in our portfolio up over 10% year-to-date with one flagship tenant in particular, up over 20%. And on M Street, despite all of the headlines in D.C. this year, sales are up 16% year-over-year and show no signs of slowing.
To be fair, we are seeing positive sales growth in our suburbs as well, but nothing resembling the double-digit growth on our streets. So when we consider the overall landscape, accelerating sales growth on our streets, strong tenant demand and the scale we've built to capture that demand, it's full steam ahead. With that, I'll echo Ken on thanking and congratulating the team for their hard work this quarter, and I will turn things over to Reggie.
Reginald Livingston: Thanks, A.J. Good afternoon, everyone. As noted in our earnings release, our Q3 activity brings our year-to-date acquisition volume to over $480 million. And based on our current pipeline, we're looking to double that amount by year-end. It's important to note for a company of our size, that's extraordinary growth unmatched within our sector, but it's not simply growth for growth's sake. These deals are poised to deliver the earnings and NAV accretion consistent with our goals, not to mention strong CAGR to complement our internal growth. Our year-to-date activity and our pipeline are being driven by a few factors we're noticing.
As Ken said, while street retail opportunities slowed down midyear, caused in part by Liberation Day hangover, we're starting to see more of those sellers come off the sidelines. And just as A.J.'s leasing team gets that first call from tenants, we're getting that first call from sellers of street retail as our reputation as a group that knows how to underwrite and close these transactions is well known throughout our target markets. Recall, the vast majority of our street retail transactions this year have been off market, and we expect that competitive advantage to continue. It's also worth noting the improved debt environment is causing sellers to test the sales market more in open-air retail across the board.
And as that environment continues, we're confident we'll get more than our fair share. Turning to specific activity in Q3. Within our investment management platform, we acquired Avenue at West Cobb for $63 million. This asset is a 250,000 square foot lifestyle center in an affluent Atlanta suburb, where we will deliver value-add returns through a combination of significant lease-up, upgrading tenancy and harvesting mark-to-market opportunities. As we've done previously for assets slated for the investment management platform, we closed the asset on balance sheet and we'll recapitalize with an institutional investor.
And speaking of that capability, we're close to selecting a top-tier investor to recapitalize Pinewood Square, the Florida Power Center we purchased back in Q2, and we expect that transaction to close in due course. So to summarize, through 3 quarters, we've acquired approximately $0.5 billion of assets, and we're looking to double that amount in the fourth quarter. And with respect to our metrics, that nearly $1 billion in deals will yield an attractive going-in GAAP yield in the mid-6s and 5-year CAGR in excess of 5%.
And most importantly, these deals will deliver accretion consistent with our $0.01 per $200 million target, a target we could achieve, frankly, with either our balance sheet transactions or our investment management deals. Bottom line, we're achieving our growth goals, and we're excited about a Q4 pipeline that will be keeping our team very busy across street acquisitions in our target corridors and value-add deals for our IMP. I want to thank the team for their hard work this quarter. And with that, I'll turn it over to John.
John Gottfried: Thanks, Reggie, and good afternoon. I'm going to dive straight into the quarter, and my remarks today will focus on 3 key themes. First, our differentiated street retail business hit an inflection point this quarter, delivering same-store growth of 13%, and we expect to have this above-trend growth continuing into 2026 and beyond. Secondly, as you just heard from our team, we are on offense, and we have the balance sheet flexibility and liquidity to fund it with our debt-to-EBITDA at 5x and over $800 million available under our revolver and forward equity contracts. And lastly, simplification.
We recognize that our guidance methodology of including investment management gains and other items is unduly complicated and results in a level of volatility that is not at all indicative of our underlying NOI growth. And as discussed on our last call, we will be refining our 2026 FFO definition to provide investors with a single metric that directly links to the growth of our real estate business to bottom line earnings, driven by our highly differentiated street retail portfolio. Now diving into our results. The third quarter was an inflection point for us, and I want to discuss a few key data points that's driving our confidence of above-average NOI and earnings growth for the next several years.
Starting with NOI. Same-store NOI came in ahead of our expectations at 8.2% with our street retail portfolio delivering 13% growth during the quarter. And with expected same-store growth of 6% to 7% in Q4, we are on track to come in at the upper end of our 5% to 6% projection for the year. And now for those modeling on the call, here come some numbers. Our growth was driven by approximately 5% of our ABR comprised of $6.7 million in pro rata rents commencing during the third quarter, with virtually all of it representing leases in the same-store pool. In terms of the earnings impact, approximately $1 million was recognized in Q3 earnings.
The full $1.7 million impact will show up in Q4, leaving us with an incremental $4 million in 2026. Additionally, the $6.7 million of commencing rents increased our occupancy by 140 basis points this quarter, keeping us on track to achieve 94% to 95% by year-end. It's also worth highlighting that our street and urban occupancy sequentially increased 280 basis points this quarter, with several hundred basis points of future growth in front of us with just 89.5% of our street and urban portfolio occupied as of September 30. And our leasing team continues to set us up for future growth.
We signed $3.7 million in new leases or approximately 2% of ABR during the third quarter, resulting in an $11.9 million signed not yet open pipeline as of September 30. Over 80% of the $11.9 million pipeline resides in our street and urban portfolio and is comprised of $4.4 million in our REIT operating portfolio, which, as a reminder, means our same-store pool, $6.5 million from our REIT redevelopment projects and $1 million from our share from the investment management platform. And in terms of the estimated timing and earnings impact of the $11.9 million signed not yet open pipeline, approximately $5.5 million of ABRs are projected to commence in Q4 with the remaining $6.4 million in 2026.
And when factoring in the expected rent commencement dates, this results in anticipated earnings of approximately $700,000 in Q4 2025, of which roughly $200,000 is same-store, $7.4 million in 2026 with about $3.5 million of it being in same-store, leaving us with $3.8 million in 2027. Additionally, consistent with our discussion last quarter, approximately $9 million of the $11 million will hit our bottom line earnings after adjusting for interest and other carry costs that we are capitalizing, primarily for REIT assets and redevelopment, with the vast majority of these capital costs attributable to our City Center redevelopment project in San Francisco and our new grocer TNT, which we are targeting a late 2026 rent commencement date.
I recognize that I just dropped a lot of numbers on you. But when stepping back, it's these data points that are driving our confidence in Q3 being an inflection point and setting us up for outsized growth in 2026 and beyond. And more specifically, our increased conviction of achieving the 10% REIT portfolio NOI growth target in 2026 that we discussed on the second quarter call. Based on our current model, we are projecting total same-store growth inclusive of redevelopments between 8% to 12% and between 5% to 9% same-store growth, excluding redevelopments, with our street and urban portfolio projected to contribute growth in excess of 10%.
In terms of dollars, the projected 8% to 12% NOI growth approximates $12 million to $14 million of incremental NOI over our 2025 projected results or roughly $0.09 a share of FFO at our current share count. And while we're still finalizing our budgets and have some more leases to sign, we are well on our way of hitting our targets. Now moving on to earnings. The NOI growth from our street retail portfolio is dropping to the bottom line and the simplified method of reporting FFO that we discussed on our last call will provide even greater visibility.
Driven by the 8.2% same-store NOI growth, we sequentially increased our quarterly FFO by $0.01, to $0.29 as compared to the $0.28 we reported last quarter after adjusting for the gains from our investment management business. And this growth was achieved despite the short-term dilution from the partial conversion of the City Point Loan. In terms of City Point, as mentioned on the last call and disclosed in the second quarter Form 10-Q, about half of our partners converted their interest during the third quarter. As a reminder, had all the loans converted at the beginning of the year, it would have been approximately $0.06 dilutive on an annualized basis against 2025 FFO.
So as we've previously discussed, while the loss of interest income will be short-term dilutive for the balance of 2025 and into 2026, this sets us up for meaningful future NOI and earnings growth over the next several years as we continue to stabilize the asset. Moving on to guidance. As highlighted in our release, even with the dilution from City Point, we maintained our FFO prior to the realized gains we earned from our investment management business. Additionally, we have revised and tightened FFO inclusive of gains of our investment management business, driven primarily by the decline in share price of Albertsons.
In terms of 2026 guidance, as we discussed last call, we will be moving to a simplified reporting metric. Our new metric will be FFO as adjusted and will exclude the gains from our investment management business, along with material noncomparable items that we believe are not reflective of our core operating results. Please take a look at our investor deck on our website, which further discusses the reporting change and what this revised metric would have looked like for our 2025 earnings. And for those on the sell side that have not yet done so, please update your 2026 earnings estimates based upon our revised definition.
Additionally, while an important and highly profitable part of what we do, we are no longer going to include investment management gains and promotes in any of our earnings guidance metrics going forward. So we would ask that you please also exclude these from your metrics to avoid any inconsistencies amongst the analyst community. Thus, NAREIT FFO and our new metric, FFO as adjusted, should be identical when we provide our 2026 guidance in February. And when we earn a promote in any given quarter, it will be included in NAREIT FFO and excluded from FFO as adjusted.
And please keep in mind, while we won't be including investment management gains and promotes as part of our guidance, this profitable part of our strategy will continue to be an important part of our business with approximately $30 million of near-term gains anticipated. And finally, I'll close with an update on our balance sheet. With our pro rata debt EBITDA at 5x and meaningful liquidity, our balance sheet has a dry powder to play offense. We raised approximately $212 million of equity at the quarter at just under $20 a share to accretively fund our acquisition pipeline and the Henderson Redevelopment project in Dallas.
As A.J. mentioned, Henderson is on track, and we are in advanced stages of lease negotiations on a significant portion of the project, giving us increased confidence of achieving our targeted 8% to 10% development yield and $0.02 to $0.04 of projected incremental FFO growth commencing in 2027 and into 2028. I also want to point out that over the past few quarters, we have acquired 5 additional properties on Henderson Avenue, which we've set aside for future development. And combined with our existing holdings, this brings our ownership to well over 50% of this premier retail corridor.
So in summary, with strong embedded internal growth and meaningful dry powder on hand to accretively fuel our large and growing pipeline of external opportunities, we are incredibly excited as we look forward over the next several years. And with that, I will turn the call over to the operator for questions.
Operator:[Operator Instructions] And our first question will come from Floris Van Dijkum with Ladenburg.
Floris Gerbrand Van Dijkum: Obviously, underlying results appear to be really solid here and you did raise some equity. Maybe my first question is, can you lift the veil a little bit on your -- the pipeline of acquisitions you're looking at? You did talk -- I think, Reggie, you indicated that about a chunk of the doubling of investments or ballpark figure, $500 million of investments is Henderson, which I believe the total cost is around $190 million, $200 million. Maybe talk about some of the other potential investments you're looking at and maybe talk about the difference between cash yields versus GAAP yields.
John Gottfried: Before I turn it over to Reggie, just to clarify, the acquisitions Reggie is mentioning are separate and beyond what we're talking about for Henderson. So those are incremental to Henderson. So Reggie, do you want to take the...
Reginald Livingston: Yes. Let me start with the bottom of GAAP yield and cash yield. As I said before, we feel really confident that we're finding the right opportunities in street retail that may take a 5% cash yield into the mid-6s, which is our target for GAAP yield. So trying to find those deals with the right attributes of lease duration and mark-to-market. We found those. We're continuing to find those in the pipeline as well. So we feel good about not only getting deals done, but getting deals done at our metrics. What was the first part, Floris?
Floris Gerbrand Van Dijkum: Are they in existing markets in particular? I'm curious what percentage would you say is New York versus other areas?
Reginald Livingston: They are in existing markets. We still like New York and still doing a lot of activity there. But they go kind of up and down the East Coast, but I would say most of it is focused on New York, just looking at our pipeline today.
Kenneth Bernstein: Floris, again expect our geographies, though, to expand, and it's a fluid situation. So we'll be in other spots as well.
Floris Gerbrand Van Dijkum: Great. And then maybe the momentum in the street appears to be really strong. You guys are seeing no signs of slowing down in terms of tenant demand? And are retailers focused on their occupancy cost, i.e., are they able to generate the sales to be able to pay the rents to be in your street locations?
Kenneth Bernstein: Yes. I think a few things are at work in terms of that. Some of the economic recovery that we're going through that some refer to as a K recovery. Certainly, the affluent consumer is driving more of this recovery, more of the spending than was historically the case, and that seems to be continuing. Couple that with the fact that the affluent consumer is who drives street retail and from our retailers' perspective, the shift from wholesale to stores, the shift to DTC, as I touched in my remarks, means that these retailers in order to capture that customer have to be on these key streets, means that they need these stores.
And to your point, the sales are showing up, the profitability is showing up. The other thing, as I reflected on the last 6 months, we, as investors, perhaps were fighting the last war. And so immediately, when Liberation Day hit, we were all focused on, oh my gosh, the consumer is going to focus only on necessity items. Well, for some segments of the consumer, that may have been the case, those living paycheck to paycheck. But in general, the affluent consumer has continued full speed ahead and thus, our retailers has followed. And I guess my takeaway was we thought with Liberation Day, it was what you are selling, i.e., necessities versus discretionary.
And it's really more about who are you selling to and how are you selling? Who, meaning to the customers who are shopping on our streets and then how our retailers recognize that the physical channel in an omnichannel world is by far the most profitable. All of that's leading to this much longer-term trend, what I refer to as a secular trend of the street locations being must-have for a wider and wider variety of important retailers, and that's why you're seeing the kind of results that A.J. discussed.
Operator: And our next question will come from Linda Tsai with Jefferies.
Linda Yu Tsai: A question for John. The 5% to 9% same-store growth ex redevs in '26 is impressive considering the tough comp in '25. But could you go into some of the considerations of what would make you hit the 5% versus the 9% since it's a wide range?
John Gottfried: Yes. Linda why don't we first start with -- and I know I throw a lot of numbers out there. When you look at the transcript, you could digest them. But a couple of data points that gives us confidence in doing that. If you look at the commencements, this quarter alone, right, with the $6.7 million that commenced, our incremental pickup from that is $4 million plus of what we have in our SNO that will commence. So this is all same-store, another $3.5 million. So when you apply both of those numbers together, you're above 5% already in that number. You then have contractual growth that's going to go on top of that.
And not to accept there's going to be move-outs as there's always in that portfolio. But in terms of our level of conviction, we feel really good about the 5%. And to get us to the 9%, it's -- as I mentioned, we have some leasing in the normal course to do. So it's how quickly do we get some of those spaces leased and open, gets us to the 9%. But that factors in as we sit here today, rollover credit, et cetera. But we'll update that as we get closer, but feel pretty confident of that range for sure.
Linda Yu Tsai: And I have a follow-up for Ken. If you could snap your fingers and vastly increase your street retail concentration in 1 or 2 specific markets, which would they be?
Kenneth Bernstein: Oh, no. Thank goodness. I don't get to snap my fingers. So of our existing markets, there are some that are up and coming and intriguing. San Francisco certainly would fall into that category. Their new mayor is doing a fantastic job, and we're enjoying the tailwinds in our 2 redevelopments. I'd be happy to see more there. Dallas, certainly of one of our existing markets, strong demographic trends, and we're capturing the right retailers at the right time. So those will be 2 that would add good balance, good diversity overall. But open order from, frankly, most of our markets. M Street, there's no reason we shouldn't continue to add there.
New York selectively, no reason we shouldn't add there as well.
Operator: And our next question will come from Craig Mailman with Citi.
Craig Mailman: Just to go back to the acquisitions, just to clarify. So Reggie, should we take away from it that there could be up to $500 million of potential deals in 4Q? And is that like a gross number and maybe your net would be lower as you partner with people? Can you just kind of put some goalposts around it?
Reginald Livingston: Yes, that's a gross number. And just to be clear, when I talk about this pipeline, this is the product of exclusive negotiations, right? So it's not just, "Oh, there's an OM on the street and I'm just included in the pipeline." These are specific conversations we're having, but that is a gross number that we could achieve in the fourth quarter.
Kenneth Bernstein: And keep in mind, Craig, somewhat coincidentally, but conveniently, the earnings accretion, whether it's on the investment management platform side or on the street retail from an earnings perspective only, they're both about equally accretive on a gross-to-gross basis and our effective input. So from an earnings perspective, the same. That being said, we certainly appreciate the importance of us adding the street retail piece, the long-term permanent ownership.
Craig Mailman: Right. And so it could be $0.025 accretive on an annual basis is what you're saying, given the magnitude in your historic $200 million or $0.01 for every $200 million.
Kenneth Bernstein: Exactly. And that's still playing out at...
Craig Mailman: Okay. Then...
Kenneth Bernstein: Go ahead.
Craig Mailman: Okay. So I was just going to say from the financing perspective, right, you guys have -- you did the forward equity. You potentially have some capital coming back in from the recap of the 2Q acquisition. And then you guys have -- clearly, the debt market is wide open here. So from a -- as we think about kind of sources to fund this and maybe timing with taking down some of that forward ATM and some dispo proceeds, like how should we think about that whole mix given maybe what you guys have in the fourth quarter plus Henderson Ave financing to continue, right?
And that's a higher return, so maybe you earmark more equity for that versus more debt for acquisitions? I mean could you just talk about the puts and takes on how you guys are thinking about that to maximize accretion?
John Gottfried: Yes. Why don't I start and then, Ken, if you want to jump in. But I think, Craig, the way we want to -- the way that we're going to manage the balance sheet is that we're going to stay on a pro rata basis debt-to-EBITDA, inclusive of whatever share we do in Investment management, sub-6 and sub-5 where we just look at rebalance sheet debt to EBITDA. So that's just sort of our goalpost as to where we're looking for. And we look at -- you mentioned the liquidity in the debt market, and it is outstanding in terms of both primarily on the secured side, we're seeing incredible tightening of spreads and availability of capital.
But on the unsecured side, we are borrowing at 120 over. So we look at on a 5-year swap that we borrow on an unsecured basis, we'll be able to do in the mid-4s. So when we look at the mix of what we do -- so think of those goalposts as to where we're going to keep our debt-to-EBITDA targets. We have plenty of liquidity available. Our revolver is virtually completely untapped. And you mentioned we have the proceeds coming back from the recap of the asset we did during the second quarter.
So plenty of liquidity that are going to be able to manage the acquisition pipeline that's coming on, and we're going to do that in the most efficient way possible.
Kenneth Bernstein: Yes. And just to clarify or just so that there's no doubt, we are in a position now to fully fund all of those opportunities as well as play offense going forward. And what John is articulating is the wide variety of choices we have in terms of how we fund this, both in the secured debt market for our investment management platform and then the unsecured market.
Operator: And our next question comes from Andrew Reale with Bank of America.
Andrew Reale: I guess first on the investment management platform. First, on West Cobb, Reggie, I think you said you're close to closing with an institutional partner there. So I'd just be curious to kind of hear how the level of demand from potential partners was after you closed on that asset? And maybe just more broadly, are you seeing increased partnership interest from institutional capital? And how might that be shaping your investment management strategy overall?
Reginald Livingston: Yes. We're seeing broad demand. There's a lot of institutional investor demand. All of the fundamentals that A.J. and Ken have discussed are not a secret anymore. I feel like they were a secret for some time with institutional investors. But now the note is out, everyone gets it and everyone is looking to do retail. What they're finding at the same time is retail can be very idiosyncratic. And so you have to have best-in-class operators in order to do it.
So we're certainly on inbounds of a lot of groups saying, "Hey, we want retail, but we need a best-in-class operator to do it." So whether it be Pinewood or Cobb, we have no shortage of opportunities to recap those 2. And as far as on a go-forward basis, we feel really good that we'll be able to do all the deals that we want to do from the investment management platform and find the capital as needed.
Andrew Reale: Okay. And maybe one for A.J. Specifically at the core properties you've acquired this year, I'd just be curious what proportion of that mark-to-market and pry loose opportunity kind of has already been addressed or is going to be addressed by year-end versus how much is still left to be realized in '26 and beyond?
Alexander Levine: Yes. Well, we're not going to get into specific numbers, but I'll tell you a few things, right? I mean we look to number one, the incredible growth we've seen in these markets, right? 15% sales growth in SoHo, 30% Bleecker, 40% in Chicago. We look at tenant health, right, which is stable and only improving as those sales outpace contractual growth, demand at the highest level it's been in a decade. And then, of course, the scale that we've built in these markets to capture that. Couple that with what we've already accomplished this year through our pry loose strategy, right, taking back 9 spaces, re-leasing them at an average spread of about 32%.
That should give you an indication of where our markets stand and the opportunity that we think is ahead of us in each one of those markets.
Operator: And our next question will come from Todd Thomas with KeyBanc.
Todd Thomas: First, I wanted to follow up on the funding questions around investments. Any sense what the split might look like on that $500 million pipeline between core and investment management deals? I'm trying to just get a sense what the net number might sort of look like as you're looking at that today? And then, John, it doesn't sound like the accretion math changes right now for the current pipeline with the capital that's been raised. But does the current stock price and your current cost of equity capital change how you would think about funding future investments or the returns that you might require going forward?
John Gottfried: Yes. Let me start with that and then kind of Reggie can take the second piece. So Todd, at the current, and we highlighted where we raised the equity just under $20 a share, which is lower than we had done previously in the past year or so. But what has counterbalanced that where we look at our funded cost of capital is the debt market. So if we do and what we're going to do is on a leverage-neutral basis.
So with the mix between the debt portion and the equity portion, we're in the mid-5s when we look at the -- when we put in -- using the FFO yield on the equity raising at the price that we did it at, plus the mid-4s on the debt piece. So that's where our all-in funding cost, and I'll let Reggie and Ken talk about where we can deploy that and grow accretively at that $0.01 per 200. But that's how we're looking to fund it, and we can do it accretively and it's stuff we want to buy with the current capital markets.
Kenneth Bernstein: Let me take a stab then at the first part of the question where Todd asked, how much is the breakout between the investment management platform or on balance sheet. Let me take a stab at not answering that, Todd. And I apologize, but I've always struggled with providing too much information about deals that are in our pipeline because I don't think it creates shareholder value. I think it actually hurts to provide too much information and sellers hear about it and this or that. We have a robust pipeline. Otherwise, we wouldn't mention it. It is earnings equivalent either way.
And as John just said, we are in a current position where we can fund all of it if it were all street retail or all investment management platform. So no one should have any funding concerns. And then I will be that, and we're going to be that vague until we see which ones get done by year-end, how much of those then fall into the next quarter. But I'm confident that there are investment management platform deals that are going to be very accretive, very exciting, very profitable.
And I'm even more confident over the next quarter, but more importantly, over the next year or 2 that we're going to continue to grow that street retail accretively, notwithstanding a volatile REIT market, accretively and profitably as we continue to drive Acadia to be the premier owner-operator of street retail in the U.S. Quarter-to-quarter, I just don't want Reggie to answer that question, even though he knows the answer.
Todd Thomas: Okay. Understood. My other question, A.J., you mentioned that the suburban portfolio is performing well, but noted the growing delta in growth rates between the street and suburban portfolios, which we've seen now for quite some time. The company sold one asset in Dayton from that suburban portfolio. Can you just comment on pricing for that disposition and whether or not you'd consider selling more suburban strips to improve portfolio growth and sort of further reshape the complexion of the portfolio overall or accelerate that?
Alexander Levine: I'm happy to take a guess, but I'll pass it off to Reggie. I think he's probably better equipped to answer that one.
Reginald Livingston: Yes. Look, if we can accretively dispose of assets that are no longer core, Dayton, that's a legacy Acadia asset. If they're no longer core and the business plan is finished, and we can sell those assets and accretively redeploy, we'll always look at those opportunities to do so.
Kenneth Bernstein: Todd, the devil's in the details of transaction costs, friction costs, tax issues and all of that. So it's not as easy as snapping my fingers as someone said earlier. But you should expect the majority -- vast majority of our growth to be street and urban and over time, whether we cycle assets into our investment management platform, which you have seen us do or just outright sell them, that's how we will be dealing with the suburban side. That being said, and it's important to note, suburban retail has real tailwinds as well.
There's nothing about us focusing our long-term REIT ownership on street retail that in any way negates us being opportunistic on acquiring shopping centers in our investment management platform. That's where they belong, utilizing more leverage and being leveraging off of our institutional equity partners as well.
Operator: And the next question will come from Michael Mueller with JPMorgan.
Michael Mueller: First, I guess, what was the ballpark range of rents that you achieved on the 300 to 400 basis points of street openings that occurred during the quarter?
John Gottfried: Yes. So A.J., maybe give some color on the biggest markets where of the openings were in Chicago and D.C. So maybe just talk about those 2 markets that -- on Walton and M Street. So maybe to see what -- just talk through the range on that.
Alexander Levine: Yes. Specific to the properties that we rolled online. I mean those are -- especially in those markets, those are multilevel space. There's a lot of nuance within those markets. So it's really hard to peg a per foot number. I can talk to you about growth in each of those markets...
John Gottfried: [ Footage ] on the ground. What would you say the ground would be on...
Alexander Levine: Armitage. Yes. Ground on Armitage is, let's call it, between $120 to $130 a square foot. And Wisconsin Avenue seeing real increase in rents there. I mean, rents are up to the $150 a foot range.
John Gottfried: And then on Walton Street.
Alexander Levine: On Walton Street, ground floor space at this point is leasing for, call it, $350 to $400 a square foot, which again is pretty remarkable when we look at where we were even just a few years ago.
Michael Mueller: Got it. Okay. So if we think of those numbers and try to do some blending, that's probably representative of the blended rent for the 360 basis points that came on?
John Gottfried: Probably is, Mike. And then here's the challenge that I know you and I have had multiple conversations on. A, just a wide range that A.J. gave would give one challenge. Secondly, if you just look at square feet, and if you look at the one building that came on in Chicago, it's 2 floors, right? So it's 2 floors. So the second floor is going to get a different attribute. So I would -- as we've talked about in the past, I would love to just say you could just use a single dollar mark, $137.5 per square foot, but it really, really depends on the building that's going in because it really can move the needle dramatically.
Michael Mueller: Got it. Okay. And then the second question, for the City Point conversions, are there any more expected over the near term?
John Gottfried: I would say at this point, we don't have new information as to -- we now own 80%, so there's another 20%. Look, I would say that -- and we're not putting out guidance, but I was putting out -- if I was forced to put out guidance at this point, I would assume that, that comes out in '26, Mike. But we don't have new information. But I think for modeling, you should assume that, that does come out in '26.
Operator: And our next question will come from Paulina Rojas with Green Street.
Paulina Rojas-Schmidt: I only have one question. The strong underground fundamentals you have described extensively in this call, I don't think they have been reflected in the year-to-date performance of the stock. So what do you see as the main drivers behind that share pullback? And what would be your contra arguments to the market's reaction?
Kenneth Bernstein: I wish I could control our stock performance, I can't. We are doing as good a job as we can is providing additional clarity, and I think this will be important of top line growth hitting the bottom line. But what we have seen, and I've been through more than a few cycles, is if we take care of our day-to-day business, meaning leasing and acquisitions, sooner or later, the market follows. I always prefer if it's sooner. And I'd say over the last 6 months, it's been a little frustrating that it's taking longer for us than I think is deserved. But Liberation Day was very disconcerting for a lot of different folks.
And the immediate conclusion that discretionary retail was going to somehow be significantly impacted and high rent street retail even more so turned out to be dead wrong. Our retailers have done a fantastic job of navigating around supply chain and the consumer has hung in there. Now whether it takes us 3 months, 6 months or 9 months, sooner or later, what we have found is shareholders get it.
And when we're posting the kind of results that we are at the real estate level, well, I'm going to rely on you, Paulina, to get the story out of what you saw in Chicago, what is going on in San Francisco, what is happening certainly in M Street and things like that because when people see it with their own eyes, then sooner or later, it shows up. And if we continue to deliver at the property levels, both in terms of internal growth, external growth, we've seen time and again the stock recovers, not fast enough for my impatience, but overall, it tends to work. And so I believe it will.
That being said, I'd rather it be sooner than later.
Paulina Rojas-Schmidt: Okay. Hopefully, you're right and things go your way.
Kenneth Bernstein: We're counting on Green Street to help us. Did you have a follow-up?
Operator: My apologies.
Kenneth Bernstein: No, I'm going to add one other thing to help Green Street and everyone else, and John maybe chime in. One area that continues to frustrate me is leasing spreads. We have said in the past, not all spreads are created equal. John, why don't you chime in just quickly because we have a minute or 2.
John Gottfried: Yes. And I think where we look at that calculation, there's lots of metrics out there.
I think the one that Ken mentioned, not created equal, and we have a -- anyone interested, we have a page in our deck, but the simplest form that if we look at, and we have both of them, a suburban lease and a street retail lease that we would need to accomplish the same growth rate that from the time the lease started to the time we get to mark that to market, we would need probably more than double the spread that we get from suburban than we would on the street because of the 3% contractual growth as part of the street piece.
So that's one metric that I think that we want to keep reminding folks that we have the 3% contractual growth. And when you look at a spread, that sort of ignores what you have done historically.
Kenneth Bernstein: So Paulina, you can add that to your thoughtful pieces. And operator, I think that concludes all of the questions. So I'd like to thank everybody for taking the time to meet with us. Thank you to the team for producing some extraordinary results.
Operator: This concludes today's conference call. Thank you for participating, and you may now disconnect.
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Acadia (AKR) Q3 2025 Earnings Call Transcript was originally published by The Motley Fool
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- Acadia Realty Trust Reports First Quarter 2026 Operating Results
Apr 28, 2026 · businesswire.com
RYE, N.Y.--(BUSINESS WIRE)--Acadia Realty Trust (NYSE: AKR) (“Acadia” or the “Company”) today reported operating results for the quarter ended March 31, 2026. All per share amounts are on a fully-diluted basis, where applicable. Acadia owns and operates a high-quality real estate portfolio of street and open-air retail properties in the nation's most dynamic retail corridors (“REIT Portfolio”), along with an investment management platform that targets opportunistic and value-add investments thr.
