Acadia Realty Trust Reports First Quarter 2013 Operating Results

  Acadia Realty Trust Reports First Quarter 2013 Operating Results

Business Wire

WHITE PLAINS, N.Y. -- April 23, 2013

Acadia Realty Trust (NYSE: AKR) today reported operating results for the
quarter ended March 31, 2013. All per share amounts are on a fully diluted
basis.

First Quarter 2013 Highlights

Earnings

  *Funds from operations (“FFO”) of $0.31 per share for the first quarter
    2013
  *Earnings per share (“EPS”) from continuing operations of $0.18 for the
    first quarter 2013

Dividend Increase

  *The Company increased its quarterly dividend 17%, from $0.18 to $0.21 for
    the first quarter 2013

Core Portfolio – Strong Same Store NOI; Significant progress towards 2013
Acquisitions Goal

  *Same store net operating income (“NOI”) for the first quarter up 10.9%
    compared to 2012
  *March 31, 2013 portfolio occupancy of 93.6%
  *During the first quarter 2013, closed on an $86.6 million “Magnificent
    Mile” retail property in Chicago

Balance Sheet – Positioned for Growth with Low Leverage and New $150 Million
Unsecured Line

  *Core portfolio debt net of cash on hand (“Net Debt”) to EBITDA ratio of
    4.1x at March 31, 2013; 5.0x including pro-rata share of Opportunity Funds
  *Combined Net Debt to total equity and debt capitalization (“Total Market
    Capitalization”) of 22% at March 31, 2013
  *Closed on a new $150 million unsecured line of credit during the quarter
  *Subsequent to quarter end, completed $125 million ATM program and
    initiated a new ATM program for $150 million

First Quarter 2013 Operating Results

FFO and Net Income from Continuing Operations for the quarter ended March 31,
2013 were $16.8 million and $9.6 million, respectively, compared to $9.3
million and $3.5 million, respectively, for the quarter ended March 31, 2012.

Earnings for the quarters ended March 31, 2013 and 2012, on a per share basis,
were as follows:

                                   Quarters ended March 31,
                                     2013     2012     Variance
FFO per share                        $ 0.31     $ 0.21     $ 0.10   
EPS from continuing operations       $ 0.18     $ 0.08     $ 0.10   
EPS from discontinued operations     $ --       $ 0.01      ($0.01 )
EPS                                  $ 0.18     $ 0.09     $ 0.09   
                                                                    

The following significant items contributed to the above variances in EPS from
continuing operations:

                                                                2013 v 2012
                                                                  Variance
                                                                  Quarter
Income from 2012/2013 acquisitions and redevelopment projects     $  0.06
Additional 2013 fee income                                           0.03
Additional 2013 interest income                                      0.03
Dilution from additional outstanding Common Shares                  (0.02  )
Total variance                                                    $  0.10   
                                                                  

Strong Core Portfolio Performance; Closed on $87 Million in Chicago

Acadia’s core portfolio (“Core Portfolio”) is comprised of properties that are
owned in whole or in part by Acadia outside of its opportunity funds (the
“Funds”).

Same-Store NOI and Occupancy

Core Portfolio same-store NOI increased 10.9% for the first quarter 2013
compared to the first quarter 2012. Excluding the impact of re-anchoring
activities at the Bloomfield Town Square and Branch Plaza that occurred during
2012, same-store NOI increased 5.6%.

At March 31, 2013, Acadia’s Core Portfolio occupancy was 93.6%, as compared to
94.2% as of December 31, 2012. Including space currently leased but not yet
occupied, the Core Portfolio was 94.0% leased.

Rent Spreads on New and Renewal Leases

The Company realized an increase in average rents on a GAAP basis, which
includes the effect of the straight-lining of rents, of 23.3% on 87,000 square
feet of new and renewal leases executed during the first quarter of 2013 in
its Core Portfolio. On a contractual rent basis, which excludes straight-line
rent, the Company experienced an increase of 6.4% in average rents for these
same leases.

Acquisition Activity – Continued Investment in Street Retail

During the first quarter 2013, Acadia closed on 664 North Michigan Avenue in
Chicago, IL for a purchase price of $86.6 million. The property is located on
Michigan Avenue between Erie and Huron Streets, in the middle of Chicago’s
premier retail corridor. Also called the Magnificent Mile, this is the city’s
most popular shopping destination with eight blocks of high-quality retail,
world-class hotels, museums and noted art galleries and an international
tourist draw for Chicago’s over 38 million annual tourists.

The property is an 18,141 square foot retail property which is a vertically
subdivided commercial parcel that forms the base of the 40-story Ritz-Carlton
Residences Chicago, luxury residential condominiums. Tenants at the property
include Tommy Bahama and Ann Taylor Loft which are expected to open during the
second quarter of 2013. The property is surrounded by both mainstream and
high-end retailers including Apple, Burberry, Niketown, Crate & Barrel, Rolex,
Cartier, Zara, Saks Fifth Avenue, Cole Haan and Salvatore Ferragamo.

Fund Platform – Continued Progress Following $569 Million of Transactions
during December 2012

During the first quarter 2013, redevelopment activities continued to progress
at various projects within the Company’s Fund platform, including City Point
(Brooklyn), Cortlandt Crossing (Westchester County, NY) and Broad Hollow
Commons (Long Island). These projects are anticipated to aggregate
approximately $350 million to $450 million in total costs when complete. This
follows significant transactional activity during December 2012 including
acquisitions in Acadia’s recently formed Fund IV aggregating $151.2 million
and monetization of Fund II and Fund III assets totaling $417.9 million.

Balance Sheet – New Unsecured Line; Maintaining Low Leverage

During the first quarter, Acadia closed on a new unsecured line of credit,
replacing its existing $64.5 million secured line. The current availability of
up to $150 million under the facility can be increased to $300 million based
on achieving certain thresholds. Interest is based on levels of leverage
starting with a rate of LIBOR plus 155 basis points.

During the first quarter, the Company issued 2.0 million Common Shares under
its ATM program for net proceeds of $52.9 million. Subsequent to March 31,
2013, the Company completed its existing $125 million ATM program and renewed
it for $150 million.

Acadia continues to maintain a solid balance sheet with available liquidity
and low leverage as evidenced by the following as of March 31, 2013:

  *The Company had total liquidity of $182.0 million, including $44.5 million
    of cash on hand and $137.5 million available under its unsecured line of
    credit, excluding the Funds’ cash and credit facilities.
  *Core Portfolio Net Debt to EBITDA ratio of 4.1x
  *Including the Company’s Core Portfolio debt and pro-rata share of the
    Company’s Fund debt (“Combined”), a Net Debt to EBITDA ratio of 5.0x
  *Combined Net Debt to Total Market Capitalization of 22%
  *Core Portfolio fixed-charge coverage ratio of 3.5 to 1 and a Combined
    fixed-charge coverage ratio of 3.4 to 1

Outlook - Earnings Guidance for 2013

The Company reaffirms its previously announced 2013 FFO and EPS forecast. On a
fully diluted basis, the Company forecasts that its 2013 annual FFO will range
from $1.17 to $1.25 per share and 2013 EPS from $0.66 to $0.71 per share.

Management Comments

“We are very pleased with the progress our team made during the first quarter
across our dual platforms” stated Kenneth F. Bernstein, President and CEO of
Acadia Realty Trust. “Our core portfolio’s operating performance exceeded our
expectations. Additionally, our acquisition of 664 North Michigan Avenue on
Chicago’s “Magnificent Mile” adds another high-street property to our core
portfolio in one of our key markets. With respect to our fund platform, in the
first quarter we continued to execute on the initiatives we put into place
over the past year as we made progress with both new fund investments as well
as stabilizing and monetizing existing investments.”

Investor Conference Call

Management will conduct a conference call on Wednesday, April 24, 2013 at
10:00 AM ET to review the Company’s earnings and operating results. The live
conference call can be accessed by dialing 888-771-4371. The pass code is
“34572463” or “Acadia Realty”. The call will also be webcast and can be
accessed in a listen-only mode at Acadia’s web site at www.acadiarealty.com.
If you are unable to participate during the live webcast, the call will be
archived and available on Acadia’s website. Alternatively, to access the
replay by phone, dial 888-843-7419, and the passcode will be “34572463#”. The
phone replay will be available through Wednesday, May 1, 2013.

About Acadia Realty Trust

Acadia Realty Trust, a fully-integrated equity real estate investment trust,
is focused on the acquisition, ownership, management and redevelopment of
high-quality retail properties and urban/infill mixed-use properties with a
strong retail component located primarily in high-barrier-to-entry,
densely-populated metropolitan areas along the East Coast and in Chicago.
Acadia owns, or has an ownership interest in, these properties through its
core portfolio and its opportunistic/value-add investment funds. Additional
information may be found on the Company’s website at www.acadiarealty.com.

Certain matters in this press release may constitute forward-looking
statements within the meaning of federal securities law and as such may
involve known and unknown risks, uncertainties and other factors that may
cause the actual results, performances or achievements of Acadia to be
materially different from any future results, performances or achievements
expressed or implied by such forward-looking statements. These forward-looking
statements include statements regarding Acadia’s future financial results and
its ability to capitalize on potential opportunities arising from continued
economic uncertainty. Factors that could cause the Company’s forward-looking
statements to differ from its future results include, but are not limited to,
those discussed under the headings “Risk Factors” and “Management’s Discussion
and Analysis of Financial Condition and Results of Operations” in the
Company’s most recent annual report on Form 10-K filed with the SEC on
February 27, 2013 (“Form 10-K”) and other periodic reports filed with the SEC,
including risks related to: (i) the current global financial environment and
its effect on retail tenants; (ii) the Company’s reliance on revenues derived
from major tenants; (iii) the Company’s limited control over joint venture
investments; (iv) the Company’s partnership structure; (v) real estate and the
geographic concentration of the Company’s properties; (vi) market interest
rates; (vii) leverage; (viii) liability for environmental matters; (ix) the
Company’s growth strategy; (x) the Company’s status as a REIT; (xi) uninsured
losses and (xii) the loss of key executives. Copies of the Form 10-K and the
other periodic reports Acadia files with the SEC are available on the
Company’s website at www.acadiarealty.com. Any forward-looking statements in
this press release speak only as of the date hereof. Acadia expressly
disclaims any obligation or undertaking to release publicly any updates or
revisions to any forward-looking statements contained herein to reflect any
change in Acadia’s expectations with regard thereto or change in events,
conditions or circumstances on which any such statement is based.

                        (Financial Highlights Follow)

                                                  
ACADIA REALTY TRUST AND SUBSIDIARIES

Financial Highlights ^1

For the Quarters ended March 31, 2013 and 2012

(dollars and Common Shares in thousands, except per share data)
                                                     
                                                     For the Quarters ended
                                                     March 31,
Revenues                                              2013       2012   
                                                                    
Minimum rents                                        $ 28,762       $ 21,708
Percentage rents                                       95             243
Mortgage interest income                               2,869          2,055
Expense reimbursements                                 7,156          5,402
Other property income                                  399            72
Management fee income                                  146            433
Other income                                          2,962        --     
Total revenues                                        42,389       29,913 
Operating expenses
Property operating                                     6,427          5,457
Real estate taxes                                      4,858          4,139
General and administrative                             5,623          5,925
Depreciation and amortization                         9,756        7,146  
Total operating expenses                              26,664       22,667 
                                                                    
Operating income                                       15,725         7,246
                                                                    
Equity in earnings (losses) of unconsolidated          2,377          (56    )
affiliates
Other interest income                                  29             54
Interest expense and other finance costs              (7,805 )      (6,560 )
Income from continuing operations before income        10,326         684
taxes
Income tax benefit (provision)                        140          (188   )
Income from continuing operations                     10,466       496    
                                                                             

                                                  
ACADIA REALTY TRUST AND SUBSIDIARIES

Financial Highlights ^1

For the Quarters ended March 31, 2013 and 2012

(dollars and Common Shares in thousands, except per share data)
                                                     
                                                     For the Quarters ended
                                                     March 31,
                                                      2013       2012   
                                                                    
Operating income from discontinued operations         397          2,327  
Net income                                            10,863       2,823  
                                                                    
(Income) loss attributable to noncontrolling
interests:
Continuing operations                                  (892   )       2,992
Discontinued operations                               (348   )      (1,805 )
Net (income) loss attributable to noncontrolling
interests                                             (1,240 )      1,187  
                                                                    
Net income attributable to Common Shareholders       $ 9,623       $ 4,010  
                                                                    
Supplemental Information
Income from continuing operations attributable
to
Common Shareholders                                  $ 9,574        $ 3,488
Income from discontinued operations attributable
to
Common Shareholders                                   49           522    
                                                                             
Net income attributable to Common Shareholders       $ 9,623       $ 4,010  
                                                                    
Net income attributable to Common Shareholders
per Common Share –
Basic
Net income per Common Share – Continuing
operations                                           $ 0.18         $ 0.08
Net income per Common Share – Discontinued
operations                                            --           0.01   
Net income per Common Share                          $ 0.18        $ 0.09   
Weighted average Common Shares                        53,414       42,736 
                                                                    
Net income attributable to Common Shareholders
per Common Share –
Diluted ^2
Net income per Common Share – Continuing
Operations                                           $ 0.18         $ 0.08
Net income per Common Share – Discontinued
Operations                                            --           0.01   
Net income per Common Share                          $ 0.18        $ 0.09   
Weighted average Common Shares                        53,851       43,146 
                                                                    

                                                     
ACADIA REALTY TRUST AND SUBSIDIARIES

Financial Highlights ^1

For the Quarters ended March 31, 2013 and 2012

(dollars and Common Shares in thousands, except per share data)
RECONCILIATION OF NET INCOME TO FUNDS FROM OPERATIONS ^3
                                                        
                                                        For the Quarters ended
                                                        March 31,
                                                        2013        2012
                                                                      
                                                                      
Net income attributable to Common Shareholders          $  9,623      $ 4,010
                                                                      
Depreciation of real estate and amortization of
leasing costs
(net of noncontrolling interests' share):
Consolidated affiliates                                    6,697        4,828
Unconsolidated affiliates                                  397          392
Income attributable to noncontrolling interests’ in
Operating Partnership                                      124          63
Distributions – Preferred OP Units                        5           5
                                                                        
Funds from operations                                   $  16,846     $ 9,298
Funds from operations per share – Diluted
Weighted average Common Shares and OP Units ^4            54,531      43,792
Funds from operations, per share                        $  0.31       $ 0.21
                                                                      

                                                 
ACADIA REALTY TRUST AND SUBSIDIARIES

Financial Highlights ^1

For the Quarters ended March 31, 2013 and 2012

(dollars in thousands)
RECONCILIATION OF OPERATING INCOME TO NET PROPERTY

OPERATING INCOME (“NOI”) ^3
                                                    
                                                    For the Quarters ended
                                                    March 31,
                                                     2013        2012   
                                                                    
Operating income                                    $ 15,725        $ 7,174
                                                                    
Add back:
General and administrative                            5,623           5,925
Depreciation and amortization                         9,756           7,150
Less:
Management fee income                                 (146    )       (433   )
Mortgage interest income                              (2,869  )       (1,987 )
Straight line rent and other adjustments             (697    )      456    
                                                                    
Consolidated NOI                                     27,392        18,285 
                                                                    
Noncontrolling interest in NOI                       (10,006 )      (6,468 )
Pro-rata share of NOI                                 17,386          11,817
Operating Partnerships’ interest in Opportunity       (2,391  )       (1,511 )
Funds
Operating Partnerships’ share of unconsolidated      1,568         1,689  
joint ventures ^1
NOI – Core Portfolio                                $ 16,563       $ 11,995 
                                                                    
Note:
^1 Does not include share of unconsolidated
joint ventures within
Opportunity Funds

                 
         
SELECTED BALANCE SHEET INFORMATION
                            As of
                              March 31,       December 31,
                                           
                              2013            2012
                              (dollars in thousands)
                                           
Cash and cash equivalents     $ 79,516        $  91,813
Rental property, at cost        1,358,268        1,249,140
Total assets                    2,169,337        1,908,440
Notes payable                   936,121          727,978
Total liabilities               1,048,312        838,184
                                                 

                     ACADIA REALTY TRUST AND SUBSIDIARIES
                             Financial Highlights
                For the Quarters ended March 31, 2013 and 2012
       (dollars and Common Shares in thousands, except per share data)

Notes:

^1 For additional information and analysis concerning the Company’s results of
operations, reference is made to the Company’s Quarterly Supplemental
Disclosure furnished on Form 8-K to the SEC and included on the Company’s
website at www.acadiarealty.com.

^2 Reflects the potential dilution that could occur if securities or other
contracts to issue Common Shares were exercised or converted into Common
Shares. The effect of the conversion of Common OP Units is not reflected in
the above table as they are exchangeable for Common Shares on a one-for-one
basis. The income allocable to such units is allocated on the same basis and
reflected as noncontrolling interests in the consolidated financial
statements. As such, the assumed conversion of these units would have no net
impact on the determination of diluted earnings per share.

^3 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. FFO and NOI are presented to
assist investors in analyzing the performance of the Company. They are helpful
as they exclude various items included in net income that are not indicative
of the operating performance, such as gains (losses) from sales of depreciated
property, depreciation and amortization, and impairment of depreciable real
estate. In addition, NOI excludes interest expense. The Company’s method of
calculating FFO and NOI may be different from methods used by other REITs and,
accordingly, may not be comparable to such other REITs. FFO does not represent
cash generated from operations as defined by generally accepted accounting
principles (“GAAP”) and is not indicative of cash available to fund all cash
needs, including distributions. It should not be considered as an alternative
to net income for the purpose of evaluating the Company’s performance or to
cash flows as a measure of liquidity. Consistent with the NAREIT definition,
the Company defines FFO as net income (computed in accordance with GAAP),
excluding gains (losses) from sales of depreciated property, plus depreciation
and amortization, impairment of depreciable real estate, and after adjustments
for unconsolidated partnerships and joint ventures.

^4 In addition to the weighted average Common Shares outstanding, basic and
diluted FFO also assume full conversion of a weighted average 655 and 621 OP
Units into Common Shares for the quarters ended March 31, 2013 and 2012,
respectively. Diluted FFO also includes the assumed conversion of Preferred OP
Units into 25 Common Shares for each of the quarters ended March 31, 2013 and
2012. In addition, diluted FFO also includes the effect of 437 and 410
employee share options, restricted share units and LTIP units for the quarters
ended March 31, 2013 and 2012, respectively.

Contact:

Acadia Realty Trust
Jon Grisham, 914-288-8100