Acadia Realty Trust Reports Third Quarter 2013 Operating Results Business Wire WHITE PLAINS, N.Y. -- October 22, 2013 Acadia Realty Trust (NYSE:AKR) today reported operating results for the quarter ended September 30, 2013. All per share amounts are on a fully diluted basis. Third Quarter 2013 Highlights Earnings *Funds from operations (“FFO”) of $0.32 per share *Earnings per share (“EPS”) from continuing operations of $0.16 *2013 annual FFO guidance increased to a range of $1.26 - $1.29 per share and EPS to a range of $0.69 - $0.72, excluding transaction costs Core Portfolio –Strong Internal Growth Accompanied by Asset Recycling *Same store net operating income (“NOI”) for the third quarter up 4.8% compared to 2012 and increased 8.4% on a year-to-date basis *September 30, 2013 94.0% portfolio occupancy; 95.7% including leased space not yet occupied *Currently under contract to sell an A&P supermarket-anchored shopping center for $18.4 million *Closed on previously announced $11.8 million acquisition in Georgetown, D.C. Fund Platform – Acquisitions, Monetization and Redevelopment Progress *Fund IV closed on $18.9 million and is currently under contract for another $37.3 million of acquisitions *Fund II currently under contract to sell Fordham Place and Pelham Manor Shopping Plaza for $192.4 million *Signed Target as a co-anchor at Fund II’s City Point project; now 65% pre-leased Balance Sheet – Low Leverage with Available Capital *Core portfolio debt, net of cash on hand and restricted cash related to financings (“Net Debt”), to EBITDA ratio of 3.6x at September 30, 2013; 4.3x including pro-rata share of Opportunity Funds *Combined Net Debt to total equity and debt capitalization (“Total Market Capitalization”) of 23% at September 30, 2013 Third Quarter 2013 Operating Results FFO and Net Income from Continuing Operations for the quarter ended September 30, 2013 were $17.9 million and $8.9 million, respectively, compared to $12.7 million and $5.8 million, respectively, for the quarter ended September 30, 2012. For the nine months ended September 30, 2013, FFO and Net Income from Continuing Operations were $52.1 million and $26.0 million, respectively, compared to $34.2 million and $14.8 million, respectively, for the nine months ended September 30, 2012. Earnings for the three and nine months ended September 30, 2013 and 2012, on a per share basis, were as follows: Quarters ended September 30, Nine Months ended September 30, 2013 2012 Variance 2013 2012 Variance FFO per share $0.32 $0.27 $0.05 $0.93 $0.75 $0.18 EPS from continuing $0.16 $0.12 $0.04 $0.47 $0.33 $0.14 operations EPS from discontinued $0.01 $0.04 ($0.03 ) $0.03 $0.08 ($0.05 ) operations EPS $0.17 $0.16 $0.01 $0.50 $0.41 $0.09 The following significant items contributed to the above 2013 increase in EPS from continuing operations: 2013 v 2012 Variance Quarter Nine Months Income from 2012 and 2013 acquisitions and $ 0.04 $ 0.12 redevelopment projects (Decrease)/increase in fee income (0.01 ) 0.04 Additional interest income 0.02 0.06 Impairment of asset -- (0.02 ) Dilution from additional outstanding Common Shares (0.02 ) (0.07 ) Increase in income from RCP Ventures 0.01 0.01 Total variance $ 0.04 $ 0.14 Core Portfolio – Strong Internal Growth and Strategic Asset Recycling 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 4.8% for the third quarter 2013 compared to the third quarter 2012, and 8.4% year-to-date. At September 30, 2013, Acadia’s Core Portfolio occupancy was 94.0%, as compared to 93.7% as of June 30, 2013. Including space currently leased but not yet occupied, the Core Portfolio was 95.7% 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 14.3% on 155,000 square feet of new and renewal leases executed during the third quarter of 2013 in its Core Portfolio. On a contractual rent basis, which excludes straight-line rent, the Company experienced an increase of 4.6% in average rents for these same leases. Recycling Activity – Acquired in Georgetown and Selling in New Jersey The Company has closed on $120.9 million of Core Portfolio acquisitions since the beginning of 2013. As previously announced, 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. During the third quarter, Acadia entered into a contract to sell the A&P Shopping Center located in Boonton, New Jersey for $18.4 million. The closing of this transaction and those under contract as discussed hereafter are subject to customary closing conditions, and specific to the sale of the A&P Shopping Center, the assumption of debt. As such, no assurance can be given that the Company will successfully complete these transactions. Core Portfolio Anchor Recycling As previously announced, Acadia initiated three key re-anchoring projects during 2011. Two of the projects, the Bloomfield Town Square, located in Bloomfield Hills, Michigan, and the Branch Plaza located in Smithtown (Long Island), New York were completed prior to 2013. During the third quarter, the Company completed a lease with Designer Shoe Warehouse (“DSW”) at the Crossroads Shopping Center located in White Plains, New York. Together with the recently signed PetSmart, these tenants will replace the former A&P supermarket at approximately double the rent and will raise the center’s leased rate to 96%. Fund Platform – Closed on $18.9 Million Acquisition; Continued Monetization of Fund II Assets Fund IV New Investments During the third quarter, Fund IV, in partnership with two unaffiliated entities, completed the acquisition of Paramus Plaza for $18.9 million. This 152,100 square foot property is anchored by Babies “R” Us and Ashley Furniture. The center is located on Route 17 South in the affluent suburban neighborhood of Paramus, New Jersey with a population of approximately 106,000 within a three mile radius and a median annual household income of approximately $123,000. Also during the quarter, Fund IV entered into contracts to purchase $37.3 million of new acquisitions. Fund II Continued Monetization During the third quarter, Fund II entered into a contract to sell Fordham Place and the retail portion of the Pelham Manor Shopping Plaza for a combined purchase price of $192.4 million. The Fund developed these properties in connection with its New York Urban/Infill Redevelopment Initiative. The Company anticipates closing on this transaction prior to the end of the year. City Point Progress During the quarter, Fund II entered into a lease with Target to co-anchor City Point, its 1.8 million square foot mixed-use project located in downtown Brooklyn with a vibrant mix of retail, entertainment, food and residential uses. The new CityTarget store, which will occupy 120,000 square feet representing the entire second floor, will join other high-quality anchors Century 21 Department Store, Armani Exchange and Alamo Drafthouse Cinema. Following the signing of this lease, the Company has now completed all pre-leasing of the anchor retail space at City Point and the 675,000 square foot retail component is now 65% pre-leased. With the second through fifth floors now leased, only the first floor and concourse level remain to be leased between now and the expected opening of the center in 2015. 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 September 30, 2013: *Combined Net Debt to Total Market Capitalization of 23% *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 4.3x *Core Portfolio and Combined fixed-charge coverage ratios of 3.2 to 1 *The Company had total liquidity of $193.2 million, including $55.7 million of cash on hand and $137.5 million available under its unsecured line of credit, excluding the Funds’ cash and credit facilities. Outlook – Increased Earnings Guidance Range for 2013 Previously, the Company had forecasted its 2013 annual FFO to range from $1.17 - $1.25 per share and EPS from $0.66 - $0.71. Management now anticipates Acadia’s 2013 annual FFO will range from $1.26 - $1.29 per share and EPS from $0.69 - $0.72. Consistent with the original earnings guidance, these increased ranges are before transaction costs, which through September 30, 2013 totaled $0.04 per share. Inclusive of these costs, FFO is expected to range from $1.22 - $1.25. Management Comments “Our portfolio delivered another quarter of solid results,” stated Kenneth F. Bernstein, President and CEO of Acadia Realty Trust. “Importantly, our company, through its dual – core and fund – operating platforms, is well positioned for growth with its multifaceted value-creation capabilities. Over the past 12 months, we have either completed or are in the process of completing, more than $1 billion of transactions, including both strategic acquisitions and profitable asset sales. Additionally, tenant interest in the high-quality real estate within our existing portfolio remains strong, as exemplified by our core portfolio’s 95.7% leased rate and the successful completion of the anchor leasing at Fund II’s Downtown Brooklyn project. We remain convinced of the benefits of our location-driven capital-allocation strategy.” Investor Conference Call Management will conduct a conference call on Wednesday, October 23, 2013 at 12:00 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 “35746700” 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 “35746700#”. The phone replay will be available through Wednesday, October 30, 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 Nine Months ended September 30, 2013 and 2012 (dollars and Common Shares in thousands, except per share data) For the Quarters ended For the Nine Months ended September 30, September 30, Revenues 2013 2012 2013 2012 Rental income $ 29,913 $ 21,708 $ 88,067 $ 59,208 Interest income 2,969 1,921 9,265 6,127 Expense reimbursements 7,279 4,567 20,800 13,770 Other property income 139 345 737 762 Management fee income 18 290 60 1,166 Other income -- -- 2,962 -- Total revenues 40,318 28,831 121,891 81,033 Operating expenses Property operating 5,937 4,487 16,130 13,041 Real estate taxes 5,795 4,353 15,739 11,973 General and 5,335 5,517 17,261 16,636 administrative Depreciation and 10,450 7,376 29,278 20,671 amortization Total operating 27,517 21,733 78,408 62,321 expenses Operating income 12,801 7,098 43,483 18,712 Equity in earnings (losses) of 4,209 (2,538 ) 7,274 1,997 unconsolidated affiliates Impairment of asset -- -- (1,500 ) -- Interest expense and (10,517 ) (6,085 ) (29,562 ) (16,547 ) other finance costs Income (loss) from continuing operations 6,493 (1,525 ) 19,695 4,162 before income taxes Income tax (provision) (186 ) 104 (53 ) (1,125 ) benefit Income (loss) from 6,307 (1,421 ) 19,642 3,037 continuing operations ACADIA REALTY TRUST AND SUBSIDIARIES Financial Highlights ^1 For the Quarters and Nine Months ended September 30, 2013 and 2012 (dollars and Common Shares in thousands, except per share data) For the Quarters ended For the Nine Months ended September 30, September 30, 2013 2012 2013 2012 Operating income from 2,835 2,159 6,100 9,030 discontinued operations Gain on sale of -- 5,917 4,191 8,585 properties Income from discontinued 2,835 8,076 10,291 17,615 operations Net income 9,142 6,655 29,933 20,652 Loss (income) attributable to noncontrolling interests: Continuing operations 2,551 7,223 6,391 11,775 Discontinued operations (2,208 ) (6,297 ) (8,459 ) (13,998 ) Net loss (income) attributable to 343 926 (2,068 ) (2,223 ) noncontrolling interests Net income attributable $ 9,485 $ 7,581 $ 27,865 $ 18,429 to Common Shareholders Supplemental Information Income from continuing operations attributable $ 8,858 $ 5,802 $ 26,033 $ 14,812 to Common Shareholders Income from discontinued operations attributable 627 1,779 1,832 3,617 to Common Shareholders Net income attributable $ 9,485 $ 7,581 $ 27,865 $ 18,429 to Common Shareholders Net income attributable to Common Shareholders per Common Share – Basic Net income per Common Share – Continuing $ 0.16 $ 0.12 $ 0.48 $ 0.33 operations Net income per Common Share – Discontinued 0.01 0.04 0.03 0.08 operations Net income per Common $ 0.17 $ 0.16 $ 0.51 $ 0.41 Share Weighted average Common 55,460 46,338 54,686 44,447 Shares Net income attributable to Common Shareholders per Common Share – Diluted ^2 Net income per Common Share – Continuing $ 0.16 $ 0.12 $ 0.47 $ 0.33 Operations Net income per Common Share – Discontinued 0.01 0.04 0.03 0.08 Operations Net income per Common $ 0.17 $ 0.16 $ 0.50 $ 0.41 Share Weighted average Common 55,818 46,812 55,092 44,884 Shares ACADIA REALTY TRUST AND SUBSIDIARIES Financial Highlights ^1 For the Quarters and Nine Months ended September 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 Nine Months ended September 30, September 30, 2013 2012 2013 2012 Net income attributable $ 9,485 $ 7,581 $ 27,865 $ 18,429 to Common Shareholders Depreciation of real estate and amortization of leasing costs (net of noncontrolling interests' share): Consolidated affiliates 7,558 5,827 21,145 16,308 Unconsolidated affiliates 777 374 1,978 1,155 Impairment of asset -- -- 1,500 -- Gain on sale (net of noncontrolling interests’ share): Consolidated affiliates -- (1,178 ) (776 ) (1,391 ) Unconsolidated affiliates -- -- -- (609 ) Income attributable to noncontrolling interests’ in Operating Partnership 104 105 329 269 Distributions – Preferred 5 4 16 14 OP Units Funds from operations $ 17,929 $ 12,713 $ 52,057 $ 34,175 Funds from operations per share – Diluted Weighted average Common 56,436 47,410 55,735 45,513 Shares and OP Units ^4 Funds from operations, $ 0.32 $ 0.27 $ 0.93 $ 0.75 per share ACADIA REALTY TRUST AND SUBSIDIARIES Financial Highlights ^1 For the Quarters and Nine Months ended September 30, 2013 and 2012 (dollars in thousands) RECONCILIATION OF OPERATING INCOME TO NET PROPERTY OPERATING INCOME (“NOI”) ^3 For the Quarters ended For the Nine Months ended September 30, September 30, 2013 2012 2013 2012 Operating income $ 12,801 $ 7,098 $ 43,483 $ 18,712 Add back: General and 5,335 5,517 17,261 16,636 administrative Depreciation and 10,450 7,376 29,278 20,671 amortization Less: Management fee income (18 ) (290 ) (60 ) (1,166 ) Interest income (2,969 ) (1,921 ) (9,265 ) (6,127 ) Straight line rent and (1,724 ) (262 ) (4,271 ) (1,322 ) other adjustments Consolidated NOI 23,875 17,518 76,426 47,404 Noncontrolling interest (6,695 ) (4,638 ) (24,709 ) (10,906 ) in NOI Pro-rata share of NOI 17,180 12,880 51,717 36,498 Operating Partnerships’ interest in Opportunity (930 ) (1,064 ) (3,683 ) (2,427 ) Funds Operating Partnerships’ share of unconsolidated 662 1,521 2,017 4,900 joint ventures ^1 NOI – Core Portfolio $ 16,912 $ 13,337 $ 50,051 $ 38,971 Note: ^1 Does not include share of unconsolidated joint ventures within Opportunity Funds SELECTED BALANCE SHEET INFORMATION As of September 30, December 31, 2013 2012 (dollars in thousands) Cash and cash equivalents $ 88,421 $ 91,813 Rental property, at cost 1,348,979 1,051,531 Total assets 2,349,368 1,908,440 Notes payable 1,004,555 603,973 Total liabilities 1,236,212 838,184 ACADIA REALTY TRUST AND SUBSIDIARIES Financial Highlights For the Quarters and Nine Months ended September 30, 2013 and 2012 (dollars and Common Shares in thousands, except per share data) Notes: For additional information and analysis concerning the Company’s results 1 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. 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 2 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. 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 3 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. In addition to the weighted average Common Shares outstanding, basic and diluted FFO also assume full conversion of a weighted average 592 and 612 OP Units into Common Shares for the quarters ended September 30, 2013 and 2012, respectively and 618 and 617 OP Units into Common Shares for the nine months ended September 30, 2013 and 2012, respectively. Diluted FFO 4 also includes the assumed conversion of Preferred OP Units into 25 Common Shares for each of the quarters and nine months ended September 30, 2013 and 2012. In addition, diluted FFO also includes the effect of 358 and 435 employee share options, restricted share units and LTIP units for the quarters ended September 30, 2013 and 2012, respectively and 406 and 424 employee share options, restricted share units and LTIP units for the nine months ended September 30, 2013 and 2012, respectively. Contact: Acadia Realty Trust Jon Grisham, 914-288-8100
Acadia Realty Trust Reports Third Quarter 2013 Operating Results
Press spacebar to pause and continue. Press esc to stop.