Acadia Realty Trust Reports Second Quarter 2013 Operating Results

  Acadia Realty Trust Reports Second Quarter 2013 Operating Results

Business Wire

WHITE PLAINS, N.Y. -- July 29, 2013

Acadia Realty Trust (NYSE: AKR) today reported operating results for the
quarter ended June 30, 2013. All per share amounts are on a fully diluted
basis.

Second Quarter 2013 Highlights

Earnings

  *Funds from operations (“FFO”) of $0.31 per share for the second quarter
    2013
  *Earnings per share (“EPS”) from continuing operations of $0.15 for the
    second quarter 2013

Core Portfolio – Strong Same Store NOI; Closed on Two Street Retail Locations
in Chicago and Georgetown

  *Same store net operating income (“NOI”) for the second quarter up 7.4%
    compared to 2012
  *June 30, 2013 portfolio occupancy of 93.7%
  *Closed on $34.3 million of new acquisitions during and after the quarter

Balance Sheet – Continued Strength with Available Capital

  *Core portfolio debt net of cash on hand (“Net Debt”) to EBITDA ratio of
    3.6x at June 30, 2013; 4.8x including pro-rata share of Opportunity Funds
  *Combined Net Debt to total equity and debt capitalization (“Total Market
    Capitalization”) of 24% at June 30, 2013

Fund Platform – Fund IV Acquisitions and Fund II Continued Monetization of
Self-Storage

  *Fund IV completed $47.0 million of new acquisitions
  *Fund II closed on the sale of a self-storage asset for $11.8 million

Second Quarter 2013 Operating Results

FFO and Net Income from Continuing Operations for the quarter ended June 30,
2013 were $17.3 million and $8.2 million, respectively, compared to $12.2
million and $5.8 million, respectively, for the quarter ended June 30, 2012.
For the six months ended June 30, 2013, FFO and Net Income from Continuing
Operations were $34.1 million and $17.8 million, respectively, compared to
$21.5 million and $9.3 million, respectively, for the six months ended June
30, 2012.

Earnings for the three and six months ended June 30, 2013 and 2012, on a per
share basis, were as follows:

                                                               
                       Quarters ended June 30,                            Six Months ended June 30,
                       2013       2012       Variance           2013       2012       Variance
FFO per                $0.31           $0.27           $0.04             $0.62           $0.48           $0.14  
share
EPS from
continuing             $0.15           $0.13           $0.02             $0.33           $0.21           $0.12  
operations
EPS from
discontinued           $0.01           $0.02           ($0.01 )           $0.01           $0.04           ($0.03 )
operations
EPS                    $0.16           $0.15           $0.01             $0.34           $0.25           $0.09  
                                                                                                          

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

                                                
                                                    2013 v 2012 Variance
                                                    Quarter      Six Months
Income from 2012/2013 acquisitions and              $ 0.03          $  0.09
redevelopment projects
Additional 2013 fee income                            0.02             0.05
Additional 2013 interest income                       0.02             0.05
Impairment of asset                                   (0.02 )          (0.02 )
Dilution from additional outstanding Common          (0.03 )         (0.05 )
Shares
Total variance                                      $ 0.02         $  0.12  
                                                                    

During the quarter ended June 30, 2013, the Company recorded an impairment
charge of $1.5 million on the Walnut Hill Plaza located in Woonsocket, Rhode
Island, due to market changes. As previously discussed during 2012, the
Company anticipates that in the event that this property is disposed of, it
would be for an amount not less than the current non-recourse mortgage debt.
In such an event, the accretion to net income from a disposition would exceed
this current impairment charge.

Existing Core Portfolio Solid Performance; Closed on $34.3 Million of
Acquisitions

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 7.4% for the second quarter 2013
compared to the second quarter 2012, which includes growth of 2.4% from
re-anchoring activities at the Bloomfield Town Square and Branch Plaza.

At June 30, 2013, Acadia’s Core Portfolio occupancy was 93.7%, as compared to
93.6% as of March 31, 2013. Including space currently leased but not yet
occupied, the Core Portfolio was 95.0% 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 23.4% on 63,000 square
feet of new and renewal leases executed during the second quarter of 2013 in
its Core Portfolio. On a contractual rent basis, which excludes straight-line
rent, the Company experienced an increase of 13.4% in average rents for these
same leases.

Acquisition Activity –New Street Retail in Chicago and Georgetown

The Company has closed on $120.9 million of core acquisitions since the
beginning of 2013.

During the second quarter 2013, Acadia closed on 8-12 East Walton Avenue in
Chicago, IL for a purchase price of $22.5 million. The property is located on
Walton Avenue next door to the Company’s property on 930 North Rush Street in
the Gold Coast neighborhood of Chicago, which is the prominent high-end and
luxury shopping area within the Magnificent Mile, Chicago’s premier retail
corridor. This newly constructed 8,244 square foot retail property is tenanted
by high-end retailers Brioni and BHLDN, a brand of Urban Outfitters.

During July, Acadia closed on 3200-3204 M Street in Georgetown, DC for a
purchase price of $11.8 million. This 7,000 square foot property, tenanted by
Banana Republic, is located at the intersection of M Street and Wisconsin
Avenue, the two most desirable retail corridors in Georgetown. The location
benefits from excellent demographics including a population of approximately
321,000 and an average income of approximately $114,000 within a 3-mile
radius.

Fund Platform – Closed on $47.0 Million in Acquisitions; Continued
Monetization of Self-Storage

Fund IV Capital Deployment

During the second quarter 2013, Fund IV in partnership with MCB Holdings,
completed two acquisitions totaling $47.0 million.

The first property, The Promenade at Manassas in Manassas, Virginia, was
purchased for $38.0 million. This 265,442 square foot shopping center is
anchored by Home Depot, Ashley Furniture, HH Gregg and Planet Fitness.

The second property, 2819 Kennedy Blvd in North Bergen, NJ, was acquired for
$9.0 million. This 41,477 square foot property, is situated in a highly
trafficked location less than one mile from the entrance to the Lincoln
Tunnel, which is one of three major gateways to Manhattan from New Jersey.

Fund II Continued Monetization

During the second quarter 2013, Acadia completed the sale of its Fund II
self-storage facility at Pelham Manor which was under contract for sale as of
December 2012, for a price of $11.8 million. This property was one of the
remaining self-storage assets to be sold following the Company’s December 2012
disposition of 12 self-storage facilities. This property is a condominium unit
attached to the Company’s Pelham Manor Shopping Plaza, which is still owned by
Fund II.

Balance Sheet – Continued Strength with Available Capital

Acadia continues to maintain a solid balance sheet with available liquidity
and low leverage as evidenced by the following as of June 30, 2013:

  *The Company had total liquidity of $199.3 million, including $61.8 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 3.6x
  *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 4.8x
  *Combined Net Debt to Total Market Capitalization of 24%
  *Core Portfolio and Combined fixed-charge coverage ratios of 3.2 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 will further discuss its 2013 forecast on the conference call.

Management Comments

“During the second quarter, our team made significant progress across both our
core and fund platforms,” stated Kenneth F. Bernstein, President and CEO of
Acadia Realty Trust. “Year to date, within our core portfolio, we have
acquired $121 million of street-retail assets located in Chicago and
Georgetown, Washington, D.C. In doing so, we are continuing to differentiate
our core real estate holdings and position the portfolio for solid growth in
an evolving retailing environment. With respect to our fund platform, during
the second quarter, we made steady progress executing the strategic business
plans for our existing assets, while, at the same time, deploying Fund IV
capital into new opportunistic and value-add investments.”

Investor Conference Call

Management will conduct a conference call on Tuesday, July 30, 2013 at 2:00 PM
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 “35232073” 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 “35232073#”. The phone replay will
be available through Wednesday, August 7, 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 and Six Months ended June 30, 2013 and 2012
(dollars and Common Shares in thousands, except per share data)
                                                     
                          For the Quarters ended     For the Six Months ended
                          June 30,                   June 30,
Revenues                  2013         2012         2013         2012
                                                                   
Minimum rents             $ 34,555      $ 24,052     $ 67,415      $ 45,760
Percentage rents            297           47           492           290
Mortgage interest           3,399         2,097        6,297         4,206
income
Expense                     7,307         5,760        15,278        11,162
reimbursements
Other property              351           346          750           418
income
Management fee              27            443          42            876
income
Other income               --          --         2,962       --      
Total revenues             45,936      32,745     93,236      62,712  
Operating expenses
Property operating          6,202         5,901        13,351        11,358
Real estate taxes           5,695         4,744        10,891        8,883
General and                 6,301         5,205        11,927        11,130
administrative
Depreciation and           10,976      8,201      21,604      15,351  
amortization
Total operating            29,174      24,051     57,773      46,722  
expenses
                                                                   
Operating income            16,762        8,694        35,463        15,990
                                                                   
Equity in earnings
of unconsolidated           815           4,591        3,065         4,535
affiliates
Impairment of asset         (1,500  )     --           (1,500  )     --
Interest expense
and other finance          (10,913 )    (7,070 )    (21,222 )    (13,626 )
costs
Income from
continuing                  5,164         6,215        15,806        6,899
operations before
income taxes
Income tax                 (7      )    (1,039 )    133         (1,227  )
(provision) benefit
Income from
continuing                 5,157       5,176      15,939      5,672   
operations
                                                                             

                                                  
ACADIA REALTY TRUST AND SUBSIDIARIES
Financial Highlights ^1
For the Quarters and Six Months ended June 30, 2013 and 2012
(dollars and Common Shares in thousands, except per share data)
                                                      
                            For the Quarters ended    For the Six Months ended
                            June 30,                  June 30,
                            2013        2012         2013         2012
                                                                    
Operating income from         266          3,332         663          5,659
discontinued operations
Gain on sale of              4,191      2,668       4,191      2,668  
properties
Income from                  4,457      6,000       4,854      8,327  
discontinued operations
Net income                   9,614      11,176      20,793     13,999 
(Income) loss
attributable to
noncontrolling
interests:
Continuing operations         3,054        669           1,846        3,661
Discontinued operations      (3,911 )    (5,006 )     (4,259 )    (6,811 )
Net (income) loss
attributable to
noncontrolling
interests                    (857   )    (4,337 )     (2,413 )    (3,150 )
                                                                    
Net income attributable     $ 8,757     $ 6,839     $  18,380    $ 10,849 
to Common Shareholders
                                                                    
Supplemental
Information
Income from continuing
operations attributable
to
Common Shareholders         $ 8,211      $ 5,845      $  17,785     $ 9,333
Income from
discontinued operations
attributable to
Common Shareholders          546        994         595        1,516  
Net income attributable     $ 8,757     $ 6,839     $  18,380    $ 10,849 
to Common Shareholders
                                                                    
Net income attributable
to Common Shareholders
per Common Share –
Basic
Net income per Common
Share – Continuing
operations                  $ 0.15       $ 0.13       $  0.33       $ 0.21
Net income per Common
Share – Discontinued
operations                   0.01       0.02        0.01       0.04   
Net income per Common       $ 0.16      $ 0.15      $  0.34      $ 0.25   
Share
Weighted average Common      55,160     44,245      54,292     43,491 
Shares
Net income attributable
to Common Shareholders
per Common Share –
Diluted ^2
Net income per Common
Share – Continuing
Operations                  $ 0.15       $ 0.13       $  0.33       $ 0.21
Net income per Common
Share – Discontinued
Operations                   0.01       0.02        0.01       0.04   
Net income per Common       $ 0.16      $ 0.15      $  0.34      $ 0.25   
Share
Weighted average Common      55,584     44,674      54,723     43,910 
Shares
                                                                             

                                                  
ACADIA REALTY TRUST AND SUBSIDIARIES
Financial Highlights ^1
For the Quarters and Six Months ended June 30, 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    For the Six Months ended
                            June 30,                  June 30,
                            2013        2012         2013         2012
                                                                    
                                                                    
Net income attributable     $ 8,757      $ 6,839      $  18,380     $ 10,849
to Common Shareholders
                                                                    
Depreciation of real
estate and amortization
of leasing costs
(net of noncontrolling
interests' share):
Consolidated affiliates       7,043        5,427         13,587       10,048
Unconsolidated                650          615           1,201        1,214
affiliates
Impairment of asset           1,500        --            1,500        --
Gain on sale (net of
noncontrolling
interests’ share):
Consolidated affiliates       (776   )     (213   )      (776   )     (213   )
Unconsolidated                             (609   )                   (609   )
affiliates
Income attributable to
noncontrolling
interests’ in
Operating Partnership         102          101           225          164
Distributions –              5          5           11         10     
Preferred OP Units
Funds from operations       $ 17,281    $ 12,165    $  34,128    $ 21,463 
Funds from operations
per share – Diluted
Weighted average Common      56,215     45,317      55,378     44,555 
Shares and OP Units ^4
Funds from operations,      $ 0.31      $ 0.27      $  0.62      $ 0.48   
per share
                                                                    

                                                  
ACADIA REALTY TRUST AND SUBSIDIARIES
Financial Highlights ^1
For the Quarters and Six Months ended June 30, 2013 and 2012
(dollars in thousands)
RECONCILIATION OF OPERATING INCOME TO NET PROPERTY
OPERATING INCOME (“NOI”) ^3
                                                     
                          For the Quarters ended     For the Six Months ended
                          June 30,                   June 30,
                          2013         2012         2013         2012
                                                                   
Operating income          $ 16,762      $ 8,694      $ 35,463      $ 15,990
                                                                   
Add back:
General and                 6,301         5,205        11,927        11,130
administrative
Depreciation and            10,976        8,201        21,604        15,351
amortization
Less:
Management fee income       (27     )     (443   )     (42     )     (876    )
Mortgage interest           (3,399  )     (2,097 )     (6,297  )     (4,206  )
income
Straight line rent and     (1,843  )    86         (2,577  )    542     
other adjustments
                                                                   
Consolidated NOI           28,770      19,646     60,078      37,931  
                                                                   
Noncontrolling interest    (10,773 )    (6,225 )    (23,824 )    (12,693 )
in NOI
Pro-rata share of NOI       17,997        13,421       36,254        25,238
Operating Partnerships’
interest in Opportunity     (1,816  )     (1,440 )     (4,207  )     (2,951  )
Funds
Operating Partnerships’
share of unconsolidated    796         1,493      1,493       3,182   
joint ventures ^1
NOI – Core Portfolio      $ 16,977     $ 13,474    $ 33,540     $ 25,469  
                                                                   
Note:
^1 Does not include
share of unconsolidated
joint
ventures within
Opportunity Funds
                                                                   

        
SELECTED BALANCE SHEET INFORMATION
                              As of
                                     June 30,                December 31,
                                                         
                                     2013                    2012
                                     (dollars in thousands)
                                                         
Cash and cash                        $    100,022         $    91,813
equivalents
Rental property, at                          1,507,622               1,249,140
cost
Total assets                                 2,310,544               1,908,440
Notes payable                                1,091,197               727,978
Total liabilities                            1,196,657               838,184
                                                             

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 606 and 618 OP
Units into Common Shares for the quarters ended June 30, 2013 and 2012,
respectively and 630 and 620 OP Units into Common Shares for the six months
ended June 30, 2013 and 2012, respectively. Diluted FFO also includes the
assumed conversion of Preferred OP Units into 25 Common Shares for each of the
quarters and six months ended June 30, 2013 and 2012. In addition, diluted FFO
also includes the effect of 424 and 428 employee share options, restricted
share units and LTIP units for the quarters ended June 30, 2013 and 2012,
respectively and 431 and 419 employee share options, restricted share units
and LTIP units for the six months ended June 30, 2013 and 2012, respectively.

Contact:

Acadia Realty Trust
Jon Grisham, 914-288-8100
 
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