• Same Store NOI Growth: Averaged over 6% for the past three years.
• Acquisitions: Closed or under contract for $270 million, with $120 million already closed.
• Initial GAAP Yield on Acquisitions: Mid 6% range.
• Cash Yield on Acquisitions: Mid 5% range, growing to over 7% in the next few years.
• Earnings Accretion from Acquisitions: Over 1% upon closing, close to 3% upon stabilization in 2027-2028.
• Leasing Activity: Signed $7 million in core leases in Q3.
• Signed Not Yet Open Pipeline: Increased to $10 million.
• FFO: $32 per share, reflecting sequential growth of $1 and year-over-year growth of $5 per share.
• Core Same Store NOI Growth: 5.9% for the quarter, 5.7% for the year.
• Debt to GAV Ratio: Reduced to about 30%.
• Debt to EBITDA Ratio: Reduced to 5.6 times.
• Revolver Capacity: Increased to $525 million.
• Incremental Core ABR: Approximately $11.6 million, representing core growth of approximately 8%.

• Warning! GuruFocus has detected 10 Warning Signs with AKR.

Release Date: October 28, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Acadia Realty Trust (NYSE:AKR) reported strong internal growth, with an average of over 6% same-store NOI growth over the past three years.
• The company has maintained a strong balance sheet, securing over $1 billion in debt and equity capital on a non-dilutive basis.
• Acadia Realty Trust (NYSE:AKR) has closed or is under contract for $270 million in acquisitions, which are expected to contribute significantly to earnings accretion.
• The company has a robust leasing pipeline, having signed a record $7 million in core leases in the third quarter, with several more leases in advanced negotiation stages.
• Acadia Realty Trust (NYSE:AKR) is expanding its portfolio with strategic acquisitions in high-growth markets like SoHo, Williamsburg, and Georgetown, which are expected to drive long-term growth.

Negative Points

• The retail industry has faced a challenging capital market backdrop, impacting on-balance sheet acquisitions.
• There is competition in the street retail market, which could affect Acadia Realty Trust (NYSE:AKR)'s ability to secure favorable deals.
• The company's occupancy rate dipped slightly, which could impact short-term revenue until new leases commence.
• Acadia Realty Trust (NYSE:AKR) faces potential risks with new development projects, such as the Henderson Avenue expansion, which could be impacted by market demand fluctuations.
• The company must carefully manage its cost of capital to ensure that acquisitions remain accretive to earnings and NAV.

Q & A Highlights

Q: Given the recent acquisitions, is this indicative of the pace and level of opportunities you see going forward? A: Kenneth Bernstein, President and CEO, confirmed that the pace of acquisitions is sustainable, provided they remain accretive to earnings and net asset value. The company is positioned to continue its growth strategy in street retail.

Q: How does Acadia Realty Trust plan to deal with competition in the street retail market? A: Kenneth Bernstein noted that while competition exists, it is mainly from professional landlords, which is beneficial. Acadia's expertise and cost of capital allow it to identify and secure attractive deals despite competition.

Q: What percentage of NOI comes from New York City, and how high could it potentially grow? A: John Gottfried, CFO, stated that about a third of NOI comes from NYC, with no set target for growth. The focus is on diversification and capturing growth opportunities across various markets.

Q: Can you discuss the occupancy cost ratios across different markets like SoHo, Bleecker, and Williamsburg? A: AJ Levine, SVP of Leasing and Development, explained that established markets like SoHo have mid-teens occupancy costs, while emerging markets like Bleecker are closer to 10%, indicating room for rent growth.

Q: How does Acadia plan to fund its growth strategy while maintaining leverage? A: John Gottfried emphasized that any growth will be leverage-neutral, with a focus on maintaining a strong balance sheet. The company will match fund external growth to ensure accretive earnings and NAV.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.