UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended December 31, 2022
or
☐ | |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period fromto
Commission File Number 001-12002
ACADIA REALTY TRUST AND SUBSIDIARIES
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(Exact name of registrant in its charter)
Maryland | 23-2715194 | |
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) |
411 Theodore Fremd Avenue, Suite 300Rye, NY10580
(Address of principal executive offices)
(914) 288-8100
(Registrant’s telephone number, including area code)
Title of class of registered securities | Trading symbol | Name of exchange on which registered |
Common shares of beneficial interest, par value $0.001 per share | AKR | The New York Stock Exchange |
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes ☒ | no ☐ |
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
yes ☐ | No ☒ |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes ☒ | no ☐ |
Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes ☒ | no ☐ |
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer | ☒ | Accelerated Filer | ☐ | Emerging Growth Company | ☐ |
Non-accelerated Filer | ☐ | Smaller Reporting Company | ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13 (a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act) YES ☐ NO ☒
The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant as of June 30, 2022, the last business day of the registrant’s most recently completed second fiscal quarter was approximately $1,482.8 million, based on a price of $15.62 per share, the average sales price for the registrant’s common shares of beneficial interest on the New York Stock Exchange on that date.
The number of shares of the registrant’s common shares of beneficial interest outstanding on February 15, 2023 was 96,265,126.
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Part III – Portions of the registrant’s definitive proxy statement relating to its 2023 Annual Meeting of Shareholders presently scheduled to be held May 4, 2023 to be filed pursuant to Regulation 14A.
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ACADIA REALTY TRUST AND SUBSIDIARIES
FORM 10-K
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7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure |
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9C. | Disclosure Regarding Foreign Jurisdictions that Prevent Inspections |
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12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters |
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13. | Certain Relationships and Related Transactions and Director Independence |
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements contained in this Annual Report on Form 10-K (this “Report”) of Acadia Realty Trust, a Maryland real estate investment trust, (the “Report”“Company”) 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 and Exchange Act of 1934, as amended (the “Exchange Act”) and as such may involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements.. Forward-looking statements, which are based on certain assumptions and describe our future plans, strategies and expectations are generally identifiable by the use of the words such as “may,” “will,” “should,” “expect,” “anticipate,” “estimate,” “believe,” “intend” or “project”“project,” or the negative thereof, or other variations thereon or comparable terminology. FactorsForward-looking statements involve known and unknown risks, uncertainties and other factors that could cause our 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) the economic, political and social impact of, and uncertainty surrounding the COVID-19 pandemic (the “COVID-19 Pandemic”) or future pandemics, including its impact on our tenants and their ability to make rent and other payments or honor their commitments under existing leases; (ii) macroeconomic conditions, such as a disruption of or lack of access to the capital markets and rising inflation; (iii) our success in implementing our business strategy and our ability to identify, underwrite, finance, consummate and integrate diversifying acquisitions and investments; (iv) changes in general economic conditions or economic conditions in the markets in which could have a material adversewe may, from time to time, compete, and their effect on our operationsrevenues, earnings and future prospects include, butfunding sources; (v) increases in our borrowing costs as a result of rising inflation, changes in interest rates and other factors, including the discontinuation of USD LIBOR, which is currently anticipated to occur in 2023; (vi) our ability to pay down, refinance, restructure or extend our indebtedness as it becomes due; (vii) our investments in joint ventures and unconsolidated entities, including our lack of sole decision-making authority and our reliance on our joint venture partners’ financial condition; (viii) our ability to obtain the financial results expected from our development and redevelopment projects; (ix) our tenants’ ability and willingness to renew their leases with us upon expiration, our ability to re-lease our properties on the same or better terms in the event of nonrenewal or in the event we exercise our right to replace an existing tenant, and obligations we may incur in connection with the replacement of an existing tenant; (x) our potential liability for environmental matters; (xi) damage to our properties from catastrophic weather and other natural events, and the physical effects of climate change; (xii) uninsured losses; (xiii) our ability and willingness to maintain our qualification as a real estate investment trust (REIT) in light of economic, market, legal, tax and other considerations; (xiv) information technology security breaches, including increased cybersecurity risks relating to the use of remote technology; (xv) the loss of key executives; (xvi) the accuracy of our methodologies and estimates regarding environmental, social and governance (“ESG”) metrics, goals and targets, tenant willingness and ability to collaborate towards reporting ESG metrics and meeting ESG goals and targets, and the impact of governmental regulation on our ESG efforts; and (xvii) the risk that the Restatement (as defined herein) or material weaknesses in internal controls could negatively affect investor confidence and raise reputational issues.
The factors described above are not limited to thoseexhaustive 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” set forth under the headings “
SPECIAL NOTE REGARDING CERTAIN REFERENCES
All references to “Notes” throughout the document refer to the footnotes to the consolidated financial statements of the registrant referenced in Part II,
Item 8. Financial Statements.PART I
ITEM 1. BUSINESS.
GENERAL
Acadia Realty Trust (the “Trust”“Company”) was formed on March 4, 1993 as a Maryland real estate investment trust (“REIT”). All references to “Acadia,” “we,” “us,” “our” and “Company” refer to the TrustCompany and its consolidated subsidiaries. We are a fully integrated REIT focused on the ownership, acquisition, development, and management of high-quality retail properties located primarily in high-barrier-to-entry, supply-constrained, densely-populateddensely populated metropolitan areas in the United States. We currently own or have an ownership interest in these properties through our Core Portfolio and(as defined below). We generate additional growth through our Funds (each as(as defined below).
All of our assets are held by, and all of our operations are conducted through, Acadia Realty Limited Partnership (the “Operating Partnership”) and entities in which the Operating Partnership owns an interest. As of December 31, 2017,2022, the TrustCompany controlled approximately 95% of the Operating Partnership as the sole general partner. As the general partner, the TrustCompany is entitled to share, in proportion to its percentage interest,
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in the cash distributions and profits and losses of the Operating Partnership. The limited partners primarily represent entities or individuals that contributed their interests in certain properties or entities to the Operating Partnership in exchange for common or preferred units of limited partnership interest (“Common OP Units” or “Preferred OP Units,” respectively, and collectively, “OP Units”) and employees who have been awarded restricted Common OP Units as long-term incentive compensation (“LTIP Units”). Limited partners holding Common OP and LTIP Units are generally entitled to exchange their units on a one-for-one basis for our common shares of beneficial interest, par value $0.001 per share, of the TrustCompany (“Common Shares”). This structure is referred to as an umbrella partnership REIT, or “UPREIT.”
BUSINESS OBJECTIVES AND STRATEGIES
Our primary business objective is to acquire and manage commercial retail properties that will provide cash for distributions to shareholders while also creating the potential for capital appreciation to enhance investor returns. We focus on the following fundamentals to achieve this objective:
Some of these investments historically have also included, and may in the future include joint ventures with private equity investors for the purpose of making investments in operating retailers with significant embedded value in their real estate assets.
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Investment Strategy — Generate External Growth through our Dual Platforms;Platforms: Core Portfolio and Funds
The requirementsobjective that acquisitions be accretive on a long-term basis based on our cost of capital, as well as increase the overall Core Portfolio quality and value, areis a key strategic considerationsconsideration to the growth of our Core Portfolio. As such, we constantly evaluate the blended cost of equity and debt and adjust the amount of acquisition activity to align the level of investment activity with capital flows.
Given the growing importance of technology and e-commerce, many of our retail tenants are appropriately focused on omni-channel sales and how to best utilize e-commerce initiatives to drive sales at their stores. In light ofConsidering these initiatives, we have found retailers are becoming more selective as to the location, size and format of their next-generation stores and are focused on dense, high-traffic retail corridors, where they can utilize smaller and more productive formats closer to their shopping population. Accordingly, our focus for Core Portfolio and Fund acquisitions is on those properties which we believe will not only remain relevant to our tenants but become even more so in the future.
In addition to our Core Portfolio investments in real estate assets, we have also capitalized on our expertise in the acquisition, development, leasing, and management of retail real estate by establishing discretionary opportunity funds. Our Fund platform is an investment vehicle where the Operating Partnership invests, along with outside institutional investors, including, but not limited to, endowments, foundations, pension funds and investment management companies, in primarily opportunistic and value-add retail real estate. To date, we have launched five funds (“Funds”); Acadia Strategic Opportunity Fund, LP (“Fund I,” which was liquidated in 2015), Acadia Strategic Opportunity Fund II, LLC (“Fund II”), Acadia Strategic Opportunity Fund III LLC (“Fund III”), Acadia Strategic Opportunity Fund IV LLC (“Fund IV”) and Acadia Strategic Opportunity Fund V LLC (“Fund V,” and our “current fund”). Due to our level of control, we consolidate these Funds for financial reporting purposes. Fund I and Fund II have also included investments in operating companies through Acadia Mervyn Investors I, LLC (“Mervyns I”)I,” which was liquidated in 2018), Acadia Mervyn Investors II, LLC (“Mervyns II”) and, in certain instances, directly through Fund II, all on a non-recourse basis. These investments comprise, and are referred to as, the Company's Retailer Controlled Property Venture (“RCP Venture”).
The Operating Partnership is the sole general partner or managing member of the Funds and Mervyns I and II and earns priority distributions or fees for asset management, property management, construction, development, leasing, and legal services. Cash flows from the Funds and the RCP Venture are distributed pro-rata to their respective partners and members (including the Operating Partnership) until each receives a certain cumulative return (“Preferred Return”), and the return of all capital contributions. Thereafter, remaining cash flows are distributed 20% to the Operating Partnership (“Promote”) and 80% to the partners or members (including the Operating Partnership).
See
Note 1Capital Strategy — Balance Sheet Focus and Access to Capital
Our primary capital objective is to maintain a strong and flexible balance sheet through conservative financial practices, including moderate use of leverage within our Core Portfolio, while ensuring access to sufficient capital to fund future growth. We intend to continue financing acquisitions and property development and redevelopment with sources of capital determined by management to be the most appropriate based on, among other factors, availability in the current capital markets, pricing, and other commercial and financial terms. TheSuch sources of capital may include the issuance of public equity, unsecured debt, mortgage and construction loans, and other capital alternatives including the issuance of OP Units. We manage our interest rate risk through the use of fixed-rate debt and, where we use variable-rate debt, through the use of certain derivative instruments, including Secured Overnight Financing Rate (“SOFR”) and London Interbank Offered Rate (“LIBOR”) swap agreements and interest rate caps as discussed further in
We launchedmaintain a share repurchase program that authorizes management, at its discretion, to repurchase up to $200.0 million of outstanding Common Shares. The program may be discontinued or extended at any time. We repurchased 1,219,065 shares for $22.4 million, inclusive of fees, during the year ended December 31, 2020. We did not repurchase any shares during the years ended December 31, 2022 or 2021. As of December 31, 2022, management may repurchase up to approximately $122.5 million of Common Shares under the program. See Note 10.
We also maintain an at-the-market (“ATM”) equity issuance program in 2012 which(the "ATM Program") that provides us with an efficient and low-cost vehicle for raising capital through public equity issuances on an as-we-go basis to fund our capital needs. Through this program,the ATM Program, we have been able to effectively “match-fund” a portion of the required equitycapital for our Core Portfolio and Fund acquisitions through the issuance of Common Shares over extended periods employing a price averaging strategy. In addition, from time to time, we have issued and intend to continue to issue equity in follow-on offerings separate from our ATM program.Program. Net proceeds raised through our ATM programProgram and follow-on offerings are primarily used for acquisitions, both for our Core Portfolio and our pro-rata share of Fund acquisitions and for other general corporate purposes.
(shares and dollars in millions) | 2017 | 2016 | 2015 | ||||||
ATM Issuance | |||||||||
Common Shares issued | — | 4.5 | 2.0 | ||||||
Gross proceeds | $ | — | $ | 157.6 | $ | 65.6 | |||
Net proceeds | $ | — | $ | 155.7 | $ | 64.4 | |||
Follow-on Offering Issuances | |||||||||
Common Shares issued | — | 8.4 | — | ||||||
Gross proceeds | $ | — | $ | 302.0 | $ | — | |||
Net proceeds | $ | — | $ | 296.6 | $ | — |
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Operating Strategy — Experienced Management Team with Proven Track Record
Our senior management team has decades of experience in the real estate industry. We have capitalized on our expertise in the acquisition, development,development/redevelopment, leasing, and management of retail real estate by creating value through property development,development/redevelopment, re-tenanting and establishing joint ventures, such as the Funds, in which we earn, in addition to a return on our equity interest, Promotes,promotes, priority distributions and fees.
Operating functions such as leasing, property management, construction, finance and legal (collectively, the “Operating Departments”) are generally provided by our personnel, providing for a vertically integrated operating platform. By incorporating
INVESTING ACTIVITIES
See Item 2. Properties for a description of the Operating Departmentsproperties in our Core and Fund portfolios. See Significant Developments under Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations for a detailed discussion of our consolidated and unconsolidated acquisitions, dispositions and financing activity for the acquisition process, acquisitions are appropriately priced giving effect to each asset’s specific risks and returns and transition time is minimized allowing management to immediately execute on its strategic plan for each asset.
Core Portfolio
Our Core Portfolio consists primarily of high-quality street retail and urban assets, as well as suburban properties located in high-barrier-to-entry, densely-populated trade areas.
As we typically hold our Core Portfolio properties for long-term investment, we periodically review theour portfolio and implement programs to renovate and re-tenant targeted properties to enhance their market position. This in turn is expected to strengthen the competitive position of theour leasing programdepartment to attract and retain quality tenants, increasing cash flow, and consequently, property values. From time to time, we also identify certain properties for disposition and redeploy the capital for acquisitions and for the repositioning of existing properties with greater potential for capital appreciation. During 2017, there were no dispositions within the Core Portfolio.
Funds
Our Fund investments consist of suburban shopping centers and urban retail assets structured as wholly-owned or jointly-owned investments.
Structured Finance Program
We also make investments in first mortgages and other notes receivable collateralized by real estate, (“(which we refer to as our Structured Finance Program”)Program) either directly or through entities having an ownership interest therein. During 2017, we made investments totaling $10.0 million in this program
Development and as of December 31, 2017 had $101.7 million invested in this program and we exchanged a portion of our notes receivable for interests in two properties as described above. See
As part of our investing strategy, we invest in real estate assets that may require significant development. In addition, certain assets may require redevelopment to meet the demand of changing markets. As of December 31, 2017,2022, there were two Fund and two Core and four FundPortfolio development projects consisting ofand five consolidated properties and one unconsolidated property.Core Portfolio redevelopment projects. During the year ended December 31, 2017, the Company2022, we placed five consolidated and three unconsolidateda portion of two Fund development properties into service reclassified one consolidated property as held for sale and placed one consolidated propertytwo Core properties into development. See
GOVERNMENT REGULATIONS AND ENVIRONMENTAL LAWS
We are subject to mitigate the adverse impact of inflation on our net income. Such provisions include clauses enabling us to receive percentage rents based on tenants’ gross sales, which generally increase as prices rise, and/or, in certain cases, escalation clauses, which generally increase rental rates during the termsfederal, state and local laws and regulations, including environmental laws and regulations. As of the leases. Such escalation clauses are often relateddate of this Report, we do not expect the cost of compliance with such laws and regulations to increases in the consumer price index or similar inflation indexes. In addition, many of our leases are for terms of less than ten years, which permits us to seek to increase rents upon re-rental at market rates if current rents are below the then existing market rates. Most of our leases require the tenants to pay their share of operating expenses, including common area maintenance, real estate taxes, insurance and utilities, thereby reducing our exposure to increases in costs and operating expenses resulting from inflation.
We are exposed to possible liabilitymay be liable for the costs of removal or remediation of certain hazardous or toxic substances at our property sites, as well as certain other potential costs relating to environmental matters.”
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Our existing properties, as well as properties we may acquire, as commercial facilities, are required to comply with the Americans with Disabilities Act of 1990, as amended (the "ADA"). See Item 1A. Risk Factors — Compliance with the Americans with Disabilities Act and fire, safety and other regulations may require us to make unplanned expenditures that could adversely affect our first mortgagesfinancial condition, cash flows and notes receivableresults of operations.
In addition, we may become subject to new compliance requirements and/or new costs or taxes associated with natural resource or energy usage and related interest income. The accounting policies of the segments are the sameemissions (such as those described in the summary of significant accounting policies set forth in
CORPORATE HEADQUARTERS AND EMPLOYEES
Our executive office is located at 411 Theodore Fremd Avenue, Suite 300, Rye, New York 10580, and our telephone number is (914) 288-8100.
HUMAN CAPITAL
We recognize that our ability to achieve the high standards we set for our company can best be accomplished by curating a diverse team of top talent. We are committed to fostering an energized and motivated workforce through programs and benefits that promote employee satisfaction, advancement, equity, and inclusion.
As of December 31, 2017,2022, we had 118115 employees, of which 97whom 94 were located at our executive office and 21 were located at regional property management offices. During 2022, our total turnover rate was approximately 23%. None of our employees are covered by collective bargaining agreements. Managementagreements and management believes that its relationship with employees is good.
Diversity, Equity, and Inclusion
Diversity, equity, and inclusion (“DEI”) are fundamental values of our business. We believe that our potential for success is maximized by having a diverse workforce that is reflective of our society and the communities we serve.
As of December 31, 2022, women represent 50% of our employees, 32% of our management-level positions and 22% of the independent trustees on our board of trustees (the "Board"), and racially and ethnically diverse individuals represent 25% of our employees, 24% of our management-level positions, and 11% of the independent trustees on our Board.
Our DEI Program is focused on fostering a professional environment that fully embraces individuals with varied backgrounds, cultures, races, identities, ages, perspectives, beliefs, and values. The four pillars of our DEI Program are awareness, acknowledgment, acceptance and advancement, and our mission is to raise awareness of systemic inequities and promote initiatives to dismantle any such inequities. Through education and awareness – including compulsory unconscious bias training and training dedicated to allyship in 2022 – we are working to establish a corporate culture that is characterized by respect, acceptance, and inclusivity. We believe that we have an individual and institutional responsibility to observe, promote and protect DEI principles. As part of our commitment to promoting DEI principles, we signed the CEO Action for Diversity & Inclusion pledge in 2020, which brings together more than 2,400 CEOs who have pledged to, among other initiatives: (i) cultivate environments that support open dialogue on DEI; (ii) implement unconscious bias education and training; (iii) share DEI programs and initiatives; and (iv) engage boards when developing and evaluating DEI strategies.
We are committed to providing equal employment opportunities without regard to any actual or perceived characteristic protected by applicable local, state or federal laws, rules, or regulations.
Employee Engagement
We have been recognized as a Great Place to Work® based on employee satisfaction surveys for three consecutive years. We analyze the survey results to identify opportunity areas for enhancing employee satisfaction and engagement.
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Training and Development
We believe in investing in talent at all levels within our organization. Whether through property tours that allow employees to learn about the projects they work on, or through access to online learning tutorials, employees are encouraged to take full advantage of professional development opportunities.
Our senior management team focuses on succession planning for senior leadership and business unit lead roles and presents a succession plan to our Board annually.
We are committed to building our own talent pipeline. Through our summer internship program, we hope to plant the seeds for future growth and innovation. This program offers hands-on experience to students looking to specialize in the retail real estate industry and offers our company a fresh perspective. We attempt to recruit diverse candidates for our internship program through partnerships with external organizations.
Health and Wellness
All employees are eligible to participate in our Wellness Program which advocates for and provides resources regarding nutrition, exercise, mental health, and workplace ergonomics. We value the importance of personal growth and encourage employees to participate in company events, health initiatives and training courses.
We offer a comprehensive benefits package to all employees.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE (“ESG”)
Achievements and Initiatives
We seek to drive financial performance while engaging in environmentally and socially responsible business practices grounded in sound corporate governance. Our ESG program is overseen by the Board’s Nominating and Corporate Governance Committee (“NCG Committee”). The NCG Committee periodically reviews our ESG strategy, practices and policies, receives regular updates from management regarding our ESG activities and reports to the full Board for further discussion and evaluation as needed and appropriate. Day-to-day management of our ESG program, including developing and guiding the implementation of our ESG initiatives, is performed by our full-time dedicated Director of ESG and our internal ESG Committee, comprised of senior leaders and representatives from various departments. The ESG Committee meets regularly, at least quarterly, and provides periodic updates on our ESG program to our Chief Executive Officer and the Board.
We maintain a robust Enterprise Risk Management (“ERM”) plan to identify and formulate responses to the most critical risks to operations, including those related to climate change and environmental impact. ERM planning serves as an additional forum for the integration of ESG considerations into our business operations.
In addition to a dedicated team of professionals, we have established ESG policies and procedures that inform and guide our ESG approach and drive our ESG goals forward, including a firm-wide ESG Policy and a Tenant Sustainability Guide. We have aligned our sustainability practices to the Global Reporting Initiative (“GRI”) standards and to the Sustainability Accounting Standards Board (“SASB”) and the Task Force on Climate-Related Financial Disclosures (“TCFD”) frameworks. We seek to align our ESG strategy and goals with certain United Nations Sustainable Development Goals ("UN SDGs"), such as goals to combat climate change and to promote the sustainability of our communities.
Below are some highlights of our ESG program. Additional information is available in our Proxy and Corporate Responsibility Report. Such information is not incorporated by reference into, and is not part of this Report.
Environmental
We are committed to understanding the environmental impact of our operations and promoting environmental sustainability while maintaining high standards for our company and our stakeholders.
We are building the resiliency of our portfolio to the physical and transition risks of climate change. For standing investments, we analyze climate-related physical and transition risks and we consider any identified risks as part of our enterprise risk management and budgeting, and capital improvements processes. Climate-related physical and transition risks are also assessed as part of the due diligence process for acquisitions. Understanding climate-related risks in our portfolio enables us to implement mitigation measures, including increased insurance coverage and physical enhancements, such as waterproofing systems, as necessary. In addition, we established a GHG emissions reduction goal for scope 1 and 2 emissions in our portfolio in an effort to reduce our exposure to, and our contribution to, the negative impacts of climate change.
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We prioritize energy efficiency to try to reduce the amount of GHG emissions generated by our properties. Our energy reduction strategy seeks to reduce energy consumption through a variety of measures, including through LED lighting, smart lighting controls upgrades in our parking areas, and smart thermostat installations in our vacant tenant spaces. For substantially all of our properties with landlord-controlled parking areas, we have installed LED parking lot lighting and smart lighting controls .
Our energy reduction strategy is complemented by our renewable energy strategy which seeks to incorporate the use of electricity sourced from on-site and off-site renewable energy projects, such as solar and wind, for the landlord-controlled common areas of our properties. We engage in renewable energy projects through leasing roof and parking lot space at our properties for solar panel arrays and electric vehicle charging stations. This contributes to the production of renewable energy for off-site consumption. Lastly, we are evaluating onsite offtake and using renewable energy credits (RECs).
Our water management program focuses on monitoring and reducing common area water consumption, while encouraging best water management practices by our tenants. We leverage technology to track and analyze our water consumption to identify and decrease excessive use. A majority of our properties benefit from the use of a landscape design focused on drought-resistant, native, pollinator-friendly plantings that save water. For substantially all of our properties with landlord-controlled irrigation, we have installed smart irrigation systems with features like rain sensors, to ensure the irrigation is turned on only when necessary. In addition, we use submeters at certain of our properties to give our retail tenants visibility into their water consumption and a financial incentive to decrease their consumption.
We include a “green” clause into our standard form of retail leases to align tenant and landlord interests in promoting the sustainability of our properties, which provides for, among other requirements, cooperation on environmental and social initiatives, and upgrades. We are proud to be named a 2022 Green Lease Leader by the Institute for Market Transformation/the U.S. Department of Energy’s Better Buildings Alliance and achieved gold status for using “green” leases to engage our tenants in making our properties more sustainable.
Our sustainable practices extend to our corporate offices where we have adopted energy reduction, waste management and water conservation initiatives. These initiatives include, for example, installing LED lighting and automatic occupancy sensors for lighting and equipment, recycling programs, implementing electronic communication systems for tenant billing, and using low-flow faucets. Our corporate headquarters is easily accessible by public transit due to the close proximity to two train stations, helping to reduce air pollution and greenhouse gas emissions from employee travel. As a result of sustainability efforts made at our corporate headquarters, we were awarded the Outstanding Achievement in Land Use Award by the Green Business Partnership in 2019.
Social
DEI are fundamental values of our business. For additional details regarding our DEI Program, as well as employee engagement, employee training and development, and employee health and wellness initiatives, see Item 1. Human Capital.
Employee volunteerism and philanthropy program are key areas of focus for our company. We engage with local charitable and volunteer organizations to connect with those in need and provide support. We also encourage our employees to participate in company-sponsored events and to give back through time, effort, or monetary donations.
We value the importance of community engagement through the facilitation of events at our properties. We engage in partnerships with local communities and non-profit organizations to host community events and fundraisers throughout our portfolio.
The health and well-being of our tenants and their employees and customers are important to us. Our property operations professionals conduct regular inspections, repairs and improvements to maintain safe and secure shopping centers and enhance the retail experience.
We strive to respect and promote human rights in accordance with the UN Guiding Principles on Business and Human Rights. We support freedom of association as proclaimed in the Universal Declaration of Human Rights.
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Governance
We are dedicated to maintaining a high standard for corporate governance predicated on integrity, ethics, diversity, and transparency. All of our Board members stand for re-election every year. We seek to maintain a diverse Board primarily comprised of independent trustees who represent a mix of varied experience, backgrounds, tenure, and skills to ensure a broad range of perspectives is represented. In 2021, our NCG Committee formally committed in its charter to seek to include candidates with a diversity of race, ethnicity, and gender in the pool from which it selects trustee candidates. The Committee annually reviews the composition of the Board and recommends measures to ensure the Board reflects the appropriate balance of knowledge, experience, skills, expertise, and diversity of backgrounds to enable the Company to execute its strategic plan and achieve its objectives. As of December 31, 2022, two of our nine independent trustees are female and one independent trustee represents racial and ethnic diversity.
Additionally, we regularly monitor developments in the area of corporate governance and seek to enhance our corporate governance structure based upon a review of new developments and recommended best practices, considering investor feedback. We believe that sound corporate governance strengthens the accountability of our Board and management and promotes the long-term interests of our shareholders. Governance highlights include: opt-out of the Board self-classification provisions of Subtitle 8; no shareholder rights plan; annual election of trustees; majority voting standard for trustees in uncontested elections with a resignation policy if an incumbent trustee fails to receive the required vote for re-election; independent and diverse Board with a lead independent trustee; regular succession planning; risk oversight by the full Board and committees; claw-back, anti-hedging and anti-pledging policies; annual Say-on-Pay vote; and shareholders’ ability to call a special meeting.
Our Corporate Governance Guidelines and associated policies mandate an elevated level of excellence from our company, the Board and management. Through transparency, alignment of interests, and removal of potential conflicts of interests, we ensure that our decisions and actions advance the interests of our shareholders, employees, and other stakeholders.
We are diligent about cybersecurity risk management, strategy, and governance. Our Board is regularly briefed by management on cybersecurity risks and initiatives, and our employees are trained to help safeguard our systems from unauthorized access, including phishing and hacking. We conduct comprehensive monitoring of our computer networks and we maintain appropriate insurance coverage.
COMPANY WEBSITE
All of our filings with the Securities and Exchange Commission (the “SEC”), including our annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, and any amendments to thosesuch reports, filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, are available at no cost aton the Investors page of our website at www.acadiarealty.com, as soon as reasonably practicable after we electronically file such materialmaterials with, or furnish itthem to, the Securities and Exchange Commission.SEC. These filings can also be accessed through the Securities and Exchange Commission’sSEC’s website at www.sec.gov. Alternatively, we will provide paper copies of our filings, including this Report, at no cost upon request. If you wishrequest addressed to receive a copy of the Form 10-K, you may contact Jason Blacksberg, Corporate Secretary,Investor Relations at Acadia Realty Trust, 411 Theodore Fremd Avenue, Suite 300, Rye, NY 10580. You may also call10580, phone number (914) 288-8100 or email investorrelations@acadiarealty.com.
We use, and intend to requestuse, the Investors page of our website as a copymeans of disclosing material nonpublic information and of complying with our disclosure obligations under Regulation FD, including, without limitation, through the Form 10-K. Information includedposting of investor presentations that may include material nonpublic information. Accordingly, investors should monitor the Investors page, in addition to following our press releases, SEC filings, public conference calls, presentations and webcasts.
The information contained on, or referred to onthat may be accessed through, our website is not incorporated by reference in or otherwiseinto, and is not a part of, this Form 10-K.
CODE OF ETHICS AND WHISTLEBLOWER POLICIES
Our Board of Trustees adopted a Code of Business Conduct and Ethics applicable to all employees, as well as a “Whistleblower Policy.” Copies of these documents are available in the Investor Information sectionInvestors – Corporate Governance page of our website.website at www.acadiarealty.com. We intend towill disclose future amendments to, or waivers from (with respect to our senior executive financial officers)officers and trustees), our Code of Business Conduct and Ethics in the Investor Information section ofon our website within four business days following the date of such amendment or waiver.
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ITEM 1A. RISK FACTORS.
Set forth below are the risk factors that we believe are material to our investors. You should carefully consider these risk factors, together with all of the other information included in this Form 10-K,Report, including our consolidated financial statements and the related notes thereto, before you decide whether to make an investment in our securities. The occurrence of any of the following risks could adversely affect our business,financial condition, cash flows, results of operations, financial condition and value ofability to satisfy our Common Shares.debt service obligations and to make distributions to our shareholders. In such case, the value of our Common Shares and the trading price of our securitiesCommon Shares could decline, and you may lose all or a significant part of your investment. This section includes or refers to certain forward-looking statements. Refer to the explanation of the qualifications and limitations on such forward-looking statements discussed in the beginning of this Form 10-K.
The following risk factors are not exhaustive. Other sections of this reportReport may include additional factors that could adversely affect our businessfinancial condition, cash flows, results of operations, and financial performance.ability to satisfy our debt service obligations and to make distributions to our shareholders. Moreover, we operate in a very competitive and rapidly changing environment. New risk factors emerge from time to time, and it is not possible for us to predict all such risk factors, nor can we assess the impact of all such risk factors on our business or the extent to which any factor, or combination of factors, may affect our business. Investors should also refer to our quarterly reports on Form 10-Q and current reports on Form 8-K for future periods for material updates to these risk factors.
Risk factors pertaining to our Company generally fall within the following broad areas:
There are risks relating to investments in real estate that maycould adversely affect our incomefinancial condition, cash flows, results of operations, and cash flow.
Real property investments are subject to multiple risks. Real estate values are affected by a number ofseveral factors, including:including changes in the general economic climate, local conditions (such as an oversupply of space or a reduction in demand for real estate in an area)demand), the quality and philosophy of management, competition from other available space, and the ability of the owner to provide adequate maintenance and insurance and to control variable operating costs. Retail properties, in particular, may be affected by changing perceptions of retailers or shoppers regarding the safety, convenience and attractiveness of the property and by the overall climate for the retail industry. Real estate values are also affected by such factors as government regulations, interest rate levels, the availability of financing and potential liability under, and changes in, environmental, zoning, tax, and other laws. A significant portion of our income is derived from rental income from real property. Our income and cash flow would be adversely affected if we were unable to rent our vacant space to viable tenants on economically favorable terms.terms or at all. In the event of default by a tenant, we may experience delays in enforcing, as well as incur substantial costs to enforce, our rights as a landlord. In addition, certain significant expenditures associated with each equity investment (such as mortgage payments, real estate taxes and maintenance costs) are generally not reduced even though there may be a reduction in income from the investment.
We rely on revenues derived from tenants, in particular our key tenants, and a decrease in those revenues maycould adversely affect our ability to make distributions.
Revenue from our properties depends primarily on the ability of our tenants to pay the full amount of rent and other charges due under their leases on a timely basis. We derive significant revenues from a concentration of certain20 key tenants thatwhich occupy space at more than one property.property and collectively account for approximately 19.3% of our consolidated revenue. We could be adversely affected in the event of the bankruptcy or insolvency of, or a downturn in the business of, any of our key tenants, or in the event that any such tenant does not renew its leases as they expire or renews such leases at lower rental rates. See “
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Anchor tenants and co-tenancy are crucial to the success of retail properties and vacated anchor space directly and indirectly affects our rental revenues.
Certain of our properties which are supported by “anchor” tenants. Anchor tenants pay a significant portion of the total rents at a property and contribute to the success of other tenants by drawing large numbers of customers to a property. Vacated anchor space not only directly reduces rental revenues, but, if not re-tenanted with a similar tenant or one with equalcomparable consumer attraction, could adversely affect the entire shopping centerrest of the property primarily through the loss of customer drawing power. This can also occur through the exercise of the right that most anchors have, to vacate and prevent re-tenanting by paying rent for the balance of the lease term, (“goingalso known as “going dark”), such as wouldthe case of the departure of a “shadow” anchor tenant that is owned by another landlord. In addition, in the event that certain anchor tenants cease to occupy a property, such an action may resultresults in a significant number of other tenants having the contractual right to terminate their leases, or pay a reduced rent based on a percentage of the tenant'stenant’s sales, at the affected property, which could adversely affect the future income from such property, (“co-tenancy”).also known as “co-tenancy.” Although it may not directly reduce our rental revenues, and there are no contractual co-tenancy conditions, vacant retail space adjacent to, or even on the same block as our street and urban properties may similarly affect shopper traffic and re-tenanting activities at our properties. See “
The bankruptcy of, or a downturn in the business of, any of our major tenants or a significant number of our smaller tenants may adversely affect our financial condition, cash flows, results of operations and property values.
The bankruptcy of, or a downturn in the business of, any of our major tenants causing them to reject their leases, or to not renew their leases as they expire, or renew at lower rental rates, may adversely affect our cash flows and property values. Furthermore, the impact of vacated anchor space and the potential reduction in customer traffic may adversely impact the balance of tenants at a shopping center.
Historically and from time to time, certain of our tenants experienced financial difficulties and filed for bankruptcy protection, typically under Chapter 11 of the United States Bankruptcy Code (“Chapter 11 Bankruptcy”).Code. Pursuant to bankruptcy law, tenants have the right to reject some or all of their leases. In the event a tenant exercises this right, the landlord generally has the right to file a claim for lost rent equal to the greater of either one year's rent (including tenant expense reimbursements) for remaining terms greater than one year, or 15% of the rent remaining under the balance of the lease term, but not to exceed three years rent. Actual amounts to be received in satisfaction of those claims will be subject to the tenant's final bankruptcy plan and the availability of funds to pay its creditors.
We may not be able to renew current leases or the terms of re-letting (including the cost of concessions to tenants) may be less favorable to us than current lease terms.
Upon the expiration of current leases for space located in our properties, we may not be able to re-let all or a portion of that space, or the terms of re-letting (including the cost of concessions to tenants) may be less favorable to us than current lease terms. If we are unable to re-let promptly all or a substantial portion of the space located in our properties or if the rental rates we receive upon re-letting are significantly lower than current rates, our net income and ability to make expected distributions to our shareholders will be adversely affected due to the resulting reduction in revenues. There can be no assurance that we will be able to retain tenants in any of our properties upon the expiration of their leases. See “
Item 2. Properties—Lease Expirations”Our business is significantly influenced by demand for retail space generally, and a decrease in such demand may have a greater adverse effect on our business than if we owned a more diversified real estate portfolio.
A decrease in the demand for retail space due to the economic factors discussed above or otherwise, may have a greater adverse effect on our business and financial condition than if we owned a more diversified real estate portfolio. The market for retail space has been, and could continue to be, adversely affected by weakness in the national, regional, and local economies, the adverse financial condition of some large retailing companies and bankruptcy incidence, the ongoing consolidation in the retail sector, the excess amount of retail space in a number of markets and increasing consumer purchases through the Internet. To the extent that any of these conditions occur, they are likely to negatively affect market rents for retail space and could materially and adversely affect our financial condition, cash flows, results of operations, cash flow, the trading price of our common sharesCommon Shares and our ability to satisfy our debt service obligations and to pay distributions to our shareholders.
E-commerce can have an impact on our business because it may cause a downturn in the business of our current tenants and affect future leases.
The use of the internetInternet by retail consumers continues to gain in popularity. Thepopularity and the migration toward e-commerce is expected to continue. ThisThe increase in internetInternet sales could result in a downturn in the business of our current tenants in their “brick and mortar” locations, adversely impacting their ability to satisfy their rent obligations, and could affect the way future tenants lease space.
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While we devote considerable effort and resources to analyze and respond to tenant trends, preferences, and consumer spending patterns, we cannot predict with certainty what future tenants will want, what future retail spaces will look like and how much revenue will be generated at traditional “bricks and mortar” locations. If we are unable to anticipate and respond promptly to trends in the market because of the illiquid nature of real estate (Seeour occupancy levels and financial results could suffer. See the Risk Factor entitled, “Our ability to change our portfolio is limited because real estate investments are illiquid” below), our occupancy levels and financial results could suffer.
Many of our real estate costs are fixed, even if income from our properties decreases, which would cause a decrease in revenue.
Our financial results depend primarily on leasing space at our properties to tenants on terms favorable to us. Costs associated with real estate investment, such as real estate taxes, insurance, and maintenance costs, generally are not reduced even when a property is not fully occupied, rental rates decrease, or other circumstances cause a reduction in income from the property. As a result, cash flow from the operations of our properties may be reduced if a tenant does not pay its rent or we are unable to fully lease our properties on favorable terms. Additionally, properties that we develop or redevelop may not produce any significant revenue immediately, and the cash flow from existing operations may be insufficient to pay the operating expenses and debt service associated with such projects until they are fully occupied.
Our ability to change our portfolio is limited because real estate investments are illiquid.
Equity investments in real estate are relatively illiquid and, therefore, our ability to change our portfolio promptly in response to changed conditions is limited, which could adversely affect our financial condition, cash flows, and results of operations and our ability to pay dividendssatisfy our debt service obligations and to make distributions.distributions to our shareholders. In addition, the Internal Revenue Code of 1986, as amended (the “Code”), contains restrictions on a REITsREIT’s ability to dispose of properties that are not applicable to other types of real estate companies. Our Board of Trustees may establish investment criteria or limitations as it deems appropriate, but our Board of Trusteesit currently does not limit the number of properties in which we may seek to invest or on the concentration of investments in any one geographic region. As discussed under the heading “Our Board of Trustees may change our investment policy or objectives without shareholder approval” below, we could change our investment, disposition and financing policies and objectives without a vote of our shareholders, but such change may be delayed or more difficult to implement due to the illiquidity of real estate.
We could be adversely affected by conditions in the markets where our properties are geographically concentrated.
Our performance depends on the economic conditions in markets where our properties are geographically concentrated. We have significant exposure to the greater New York and Chicago metropolitan regions, from which we derive 38.2% and 24.6% of the annual base rents within our Core Portfolio, respectively. In addition, our Funds derive 32.8%, 22.6% and 22.2% of their annual base rents in the New York metropolitan, Southeast, and Northeast regions of the United States, respectively. Our operating results could be adversely affected if market conditions, such as an oversupply of space or a reduction in demand for real estate, occur in these areas.
Our development and construction activities could affect our operating results.
We intend to continue the selective development and construction of retail properties. See “Item 1. Business —Investing Activities–Funds–Development Activities”.
As opportunities arise, we may delay construction until sufficient pre-leasing is reached, and financing is in place. Our development and construction activities include the risk that:
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In addition, the entitlement and development of real estate entails extensive approval processes, sometimes involving multiple regulatory jurisdictions. It is common for a project to require multiple approvals, permits and consents from U.S. federal, state and local governing and regulatory bodies. Compliance with these and other regulations and standards is time intensive and costly and may require additional long range infrastructure review and approvals which can add to project cost. In addition, development of properties containing delineated wetlands may require one or more permits from the U.S. federal government and/or state and local governmental agencies. Any of these issues can materially affect the cost, timing and economic viability of our development and redevelopment projects.
At times, we may also be required to use unionized construction workers or to pay the prevailing wage in a jurisdiction to unionized workers, which could increase a project’s costs and the risk of a strike, thereby affecting construction timelines.
Additionally, the time frame required for development, construction and lease-up of these properties means that we may not realize a significant cash return for several years. If any of the above events occur, the development of properties may hinder our growth and could have an adverse effect on our financial condition, cash flows and results of operations. In addition, new development activities, regardless of whether or not they are ultimately successful, typically require substantial time and attention from management.
Developments and acquisitions may fail to perform as expected, which could adversely affect our results of operations.
Our investment strategy includes the development and acquisition of retail properties in supply constrained markets in densely populated areas with high average household incomes and significant barriers to entry. The acquisition of such properties is highly competitive. Additionally, the development and acquisition of such properties entails risks that include the following, any of which could adversely affect our financial condition, cash flows, results of operations, and our ability to meet our debt obligations and make distributions to shareholders:
Historically, Fund I, Mervyns I and Fund III have provided Promote income. There can be no assurance that our joint ventures will continue to operate profitably and thus provide additional Promote income in the future. These factors could limit the return that we receive from such investments or cause our cash flows to be lower than our estimates. In addition, a partner or co-venturer may not have access to sufficient capital to satisfy its funding obligations to the joint venture.
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We may not be able to recover our investments in marketable securities or other investments, which may result in significant losses to us.
Our investments in marketable securities are subject to specific risks relating to the particular issuer of the securities, including the financial condition and business outlook of the issuer, which may result in significant losses to us. Marketable securities are generally unsecured and may also be subordinated to other obligations of the issuer. As a result, investments in marketable securities are subject to risks of substantial market price volatility, resulting from changes in prevailing interest rates and the possibility that earnings of the issuer may be insufficient to meet its debt service and distribution obligations. These risks may adversely affect the value of outstanding marketable securities and the ability of the issuers to make distribution payments.
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Note 17 for additional discussion regarding the shares held by the Company of Albertsons Companies, Inc. (“Albertsons”).
The economic performance and value of our other investments, which we do not control and are in retail operations, are subject to risks associated with owning and operating retail businesses, as outlined in our other risk factors provided herein. A decline in the value of our other investments may require us to recognize an other-than-temporary impairment (“OTTI”) against such assets. When the fair value of an investment is determined to be less than its amortized cost at the balance sheet date, we assess whether the decline is temporary or other-than-temporary. If we intend to sell an impaired asset, or it is more likely than not that we will be required to sell the impaired asset before any anticipated recovery, then we must recognize an OTTI through charges to earnings equal to the entire difference between the asset’s amortized cost and its fair value at the balance sheet date. When an OTTI is recognized through earnings, a new cost basis is established for the asset, and the new cost basis may not be adjusted through earnings for subsequent recoveries in fair value.
Our real estate assets may be subject to impairment charges.
We periodically assess whether there are any indicators that the value of our real estate assets and other investments may be impaired. A property’s value is considered to be impaired only if the estimated aggregate future undiscounted property cash flows are less than the carrying value of the property. In our estimate of cash flows, we consider factors such as trends and prospects and the effects of demand and competition on expected future operating income. If we are evaluating the potential sale of an asset or redevelopment alternatives, the undiscounted future cash flows consider the most likely course of action as of the balance sheet date based on current plans, intended holding periods and available market information. We are required to make subjective assessments as to whether there are impairments in the value of our real estate assets and other investments. Impairment charges have an immediate direct impact on our earnings. There can be no assurance that we will not take additional charges in the future related to the impairment of our assets. Any future impairment could have a material adverse effect on our operating results in the period in which the charge is taken.
If a third-party vendor fails to provide agreed upon services, we may suffer losses.
We are dependent and rely on third party vendors, including Cloud providers, for redundancy of our network, system data, security, and data integrity. If a vendor fails to provide services as agreed, suffers outages, business interruptions, financial difficulties, or bankruptcy, we may experience service interruption, delays, or loss of information. Cloud computing is dependent upon having access to an Internet connection in order to retrieve data. If a natural disaster, blackout, or other unforeseen event were to occur that disrupted the ability to obtain an Internet connection, we may experience a slowdown or delay in our operations. We conduct appropriate due diligence on all services providers and restrict access, use and disclosure of personal information. We engage vendors with formal written agreements clearly defining the roles of the parties and specifying privacy and data security responsibilities.
Actual or perceived threats associated with epidemics, pandemics or other public health crises, including the COVID-19 Pandemic, have had and could continue to have a material adverse effect on our and our tenants’ businesses, financial condition, results of operations, cash flow, liquidity, and ability to access the capital markets and satisfy debt service obligations.
Epidemics, pandemics, or other public health crises, including the COVID-19 Pandemic, that impact economic and market conditions, particularly in the markets where our properties are located, and preventative measures taken to alleviate their impact may have a material adverse effect on our and our tenants’ businesses, financial condition, results of operations, liquidity, and ability to access capital markets and satisfy debt service obligations.
Our retail tenants depend on in-person interactions with their customers to generate unit-level profitability, and an epidemic, pandemic or other public health crisis may decrease customer willingness to frequent, and “shelter-in-place” or “stay-at-home” orders or recommendations may prevent customers from frequenting our tenants’ businesses, which may result in their inability to maintain profitability and make timely rental payments to us under their leases. Such restrictions may also affect customer behavior longer term by, among other things, creating a preference for e-commerce, discussed further in our risk factors above.
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If we decided to employ higher leverage levels, we would be subject to increased debt service requirements and a higher risk of default on our debt obligations, which could adversely affect our financial conditions, cash flows and ability to make distributions to our shareholders. In addition, increases or changes in interest rates could cause our borrowing costs to rise and may limit our ability to refinance debt.
Although we have historically used moderate levels of leverage, if we employed higher levels of leverage, it would result in increased risk of default on our obligations and in an increase in debt service requirements, which could adversely affect our financial condition and results of operations and our ability to pay dividends and make distributions. In addition, the viability of the interest rate hedges we use is subject to the strength of the counterparties.
None of our Declaration of Trust, our bylawsBylaws or any policy statement formally adopted by our Board of Trustees limits either the total amount of indebtedness or the specified percentage of indebtedness that we may incur. Accordingly, we could become more highly leveraged, resulting in increased debt service requirements and a higher risk of default on our financial obligations and in an increase in debt service requirements.obligations. This in turn could adversely affect our financial condition, resultscash flows and ability to make distributions to our shareholders.
Although approximately 79.8% of operationsour outstanding debt has fixed or effectively fixed interest rates, we also borrow funds at variable interest rates. We are exposed to risks related to a potential rising interest rate environment for our current or any future variable interest rate debt, which could cause our borrowing costs to rise and may limit our ability to make distributions.
We expect that all LIBOR settings relevant to us will cease to be published or will no longer be representative after June 30, 2023. As a result, any of our LIBOR-based borrowings and hedges that extend beyond such date will need to be converted to a replacement rate. U.S. regulators identified the Secured Overnight Financing Rate (“SOFR”) as their preferred alternative to USD LIBOR in derivatives and other financial contracts. We have contracts indexed to LIBOR and are monitoring and evaluating the risks related to potential discontinuation of LIBOR, including transitioning contracts to a new alternative rate and any resulting value transfer that may occur. When USD LIBOR is discontinued, the interest rates would cause our borrowing costs to rise and may limit our ability to refinance debt.
Our inability to raise capital for ournew Funds or to carry out our growth strategy could adversely affect our financial condition, cash flows and results of operations.
Our earnings growth strategy is based on the acquisition and development of additional properties, including acquisitions of core properties through our Operating Partnership and our high return investment programs through our Fund platform. The consummation of any future acquisitions will be subject to satisfactory completion of our extensive valuation analysis and due diligence review and to the negotiation of definitive documentation. We cannot be sure that we will be able to implement our strategy because we may have difficulty finding new properties, obtaining necessary entitlements, negotiating with new or existing tenants or securing acceptable financing. Furthermore, if we were unable to obtain sufficient investor capital commitments in order to initiate future Funds, this would adversely impact our current growth strategy.
Acquisitions of additional properties entail the risk that investments will fail to perform in accordance with expectations, including operating and leasing expectations. In the context of our business plan, “development” generally means an expansion or renovation of an existing property. Development is subject to numerous risks, including risks of construction delays, cost overruns or uncontrollable events that may increase project costs, new project commencement risks such as the receipt of zoning, occupancy and other required governmental approvals and permits, and incurring development costs in connection with projects that are not pursued to completion.
Historically, a component of our growth strategy has been through private-equity type investments made through our RCP Venture. TheseVenture, which have included investments in operating retailers. The inability of thesuch retailers to operate profitably would have an adverse impact on income realized from these investments. Through our investments in joint ventures, we have also invested in operating businesses that have operational risk in addition to the risks associated with real estate investments, including among other risks, human capital issues, adequate supply of product and material, and merchandising issues.
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Furthermore, if we may delay construction until sufficient pre-leasing is reached and financing is in place. Our development and construction activities include risks that:
Our structured financing portfolio is subject to specific risks relating to the structure and terms of the instruments and the underlying collateral.
We invest in notes receivables and preferred equity investments that are collateralized by the underlying real estate, a direct interest or the borrower’s ownership interest in the entities that own the properties and/or by the borrower’s personal guarantee. The underlying assets are sometimes subordinate in payment and collateral to more senior loans. The ability of a borrower or entity to make payments on these investments may be subject to the senior lender and/or the performance of the underlying real estate. In the event of a default by the borrower or entity on its senior loan, our investment will only be satisfied after the senior loan and we may not be able to recover the full value of the investment. In the event of a bankruptcy of an entity in which we have a preferred equity interest, or in which the borrower has pledged its interest, the assets of the entity may not be sufficient to satisfy our investment.
We are exposed to possible liability relating to environmental matters.
Under various Federal, state and local environmental laws, statutes, ordinances, rules, and regulations, as an owner of real property, we may be liable for the costs of removal or remediation of certain hazardous or toxic substances at, on, in or under our property, as well as certain other potential costs relating to hazardous or toxic substances (including government fines and penalties and damages for injuries to persons and adjacent property). These laws may impose liability without regard to whether we knew of, or were responsible for, the presence or disposal of those substances. This liability may be imposed on us in connection with the activities of an operator of, or tenant at, the property. The cost of any required remediation, removal, fines or personal or property damages and our liability therefore could exceed the value of the property and/or our aggregate assets. In addition, the presence of those substances, or the failure to properly dispose of or remove those substances, may adversely affect our ability to sell or rent that property or to borrow using that property as collateral, which, in turn, could reduce our revenues and affect our ability to make distributions.
A property can also be adversely affected either through physical contamination or by virtue of an adverse effect upon value attributable to the migration of hazardous or toxic substances, or other contaminants that have or may have emanated from other properties. Although our tenants are primarily responsible for any environmental damages and claims related to the leased premises, in the event of the bankruptcy or inability of any of our tenants to satisfy any obligations with respect to the property leased to that tenant, we may be required to satisfy such obligations. In addition, we may be held directly liable for any such damages or claims irrespective of the provisions of any lease.
From time to time, in connection with the conduct of our business, and prior to the acquisition of any property from a third party or as required by our financing sources, we authorize the preparation of Phase I environmental reports and, when necessary, Phase II environmental reports, with respect to our properties. Based upon these environmental reports and our ongoing review of our properties, we are currently not aware of any environmental condition with respect to any of our properties that we believe would be reasonably likely to have a material adverse effect on us. There can be no assurance, however, that the environmental reports will reveal all environmental conditions at our properties or that the following will not expose us to material liability in the future:
Changes in laws increasing the potential liability for environmental conditions existing on properties or increasing the restrictions on discharges or other conditions may result in significant unanticipated expenditures or may otherwise adversely affect the operations of our tenants, which could adversely affect our financial condition, orcash flows and results of operations.
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Uninsured losses or a loss in excess of insured limits could adversely affect our financial condition.
We carry comprehensive general liability, all-risk property, extended coverage, loss of rent insurance, and environmental liability on our properties, with policy specifications and insured limits customarily carried for similar properties. However, with respect to those properties where the leases do not provide for abatement of rent under any circumstances, we maintain a minimum of twelve months loss of rent insurance. In addition, there are certain types of losses, such as losses resulting from wars, terrorism or acts of God that generally are not insured because they are either uninsurable or not economically insurable. Should an uninsured loss or a loss in excess of insured limits occur, we could lose capital invested in a property, as well as the anticipated future revenues from a property, while remaining obligated for any mortgage indebtedness or other financial obligations related to the property. Any loss of these types wouldcould adversely affect our financial condition.
We may from time to time be subject to litigation that maycould negatively impact our cash flow, financial condition, cash flows, results of operations and the trading price of our Common Shares.
We may from time to time be a defendant in lawsuits and regulatory proceedings relating to our business. Such litigation and proceedings may result in defense costs, settlements, fines, or judgments against us, some of which may not be covered by insurance. Due to the inherent uncertainties of litigation and regulatory proceedings, we cannot accurately predict the ultimate outcome of any such litigation or proceedings. An unfavorable outcome may result in our having to pay significant fines, judgments, or settlements, which, if uninsured, or if exceeding insurance coverage, could negativelyadversely impact our cash flow, financial condition, cash flows, results of operations and the trading price of our Common Shares.
Compliance with the Americans with Disabilities Act and fire, safety and other regulations may require us to make unplanned expenditures that could adversely affect our financial condition, cash flows.
All of our properties are required to comply with the Americans with Disabilities Act, or ADA.as amended (the “ADA”). The ADA has separate compliance requirements for “public accommodations” and “commercial facilities,” but generally requires that buildings be made accessible to people with disabilities. Compliance with the ADA requirements could require removal of access barriers, and non-compliance could result in imposition of fines by the U.S. government or an award of damages to private litigants, or both. While the tenants to whom we lease properties are obligated by law to comply with theapplicable ADA provisions, and are typically obligated to cover costs of compliance, if required changes involve greater expenditures than anticipated, or if the changes must be made on a more accelerated basis than anticipated, the ability of these tenants to cover costs could be adversely affected. As a result of the foregoing or if a tenant is not obligated to cover the cost of compliance, we could be required to expend funds to comply with the provisions of the ADA, which could adversely affect our financial condition, cash flows and results of operations and financial condition and our ability to make distributions to shareholders.operations. In addition, we are required to operate our properties in compliance with fire and safety regulations, building codes and other land use regulations, as they may be adopted by governmental agencies and bodies and become applicable to the properties. We may be required to make substantial capital expenditures to comply with those requirements, and these expenditures could also adversely affect our financial condition, cash flows and results of operations.
The loss of key management members could have an adverse effect on our business, financial condition, and results of operations.
Our success depends on the contribution of key management members. The loss of the services of Kenneth F. Bernstein, President and Chief Executive Officer, or other key executive-level employees could have a material adverse effect on our business, financial condition, and results of operations. Management continues to strengthen our team and we have CEO succession planning in place, but there can be no assurance that such planning will be capable of implementation or that our efforts will be successful. We have obtained key-man life insurance for Mr. Bernstein. In addition, we have entered into an employment agreement with Mr. Bernstein and into severance agreements with other senior executives; however, Mr. Bernstein and such executives may terminate their employment with us at will.
We have pursued and may in the future continue to pursue extensive growth opportunities, including investing in new markets, which may result in significant demands on our operational, administrative, and financial resources.
We have pursued and may pursue growth opportunities, some of which have been, and in the future may be, in locations in which we have not historically invested. This expansion places significant demands on our operational, administrative, and financial resources. The continued growth of our real estate portfolio can be expected to continue to place a significant strain on our resources. Our future performance will depend in part on our ability to meetsuccessfully attract and retain qualified management personnel to manage the growth and operations of our business. In addition,
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the acquired properties may fail to operate at expected levels due to the numerous factors that may affect the value of real estate. There can be no assurance that we will have sufficient resources to identify and manage the newly acquired properties.
Our Board may change our investment policy or objectives without shareholder approval.
Our Board may determine to change our investment and financing policies or objectives, our growth strategy and our debt, capitalization, distribution, acquisition, disposition, and operating policies. Our Board may establish investment criteria or limitations as it deems appropriate, but currently does not limit the number of properties in which we may seek to invest or the concentration of investments in any one geographic region. Although our Board has no present intention to revise or amend our strategies and policies, it may do so at any time without a vote by our shareholders. Accordingly, the results of decisions made by our Board as implemented by management may or may not serve the interests of all of our shareholders and could adversely affect our financial condition, cash flows, results of operations, and ability to satisfy our debt service obligations and to make distributions to our shareholders.
Concentration of ownership by certain investors may allow these investors to exert influence over the business and affairs of our Company.
As of December 31, 2022, four institutional shareholders own 5% or more individually, and 54.4% in the aggregate, of our Common Shares. While this ownership concentration does not jeopardize our qualification as a REIT for U.S. federal income tax purposes (due to certain “look-through provisions” of the Code), a significant concentration of ownership may allow an investor or a group of investors to exert a greater influence over our management and affairs and may have the effect of delaying, deferring, or preventing a change in control of us. Additionally, our Board may, in its sole discretion, waive or modify the 9.8% Common Shares ownership limit in our Declaration of Trust with respect to one or more persons if it is satisfied that ownership in excess of the limit will not jeopardize our qualification as a REIT for U.S. federal income tax purposes. From time to time, we have entered into waivers with certain institutional investors, subject to certain representations from such investors, including that the Common Shares held by the investors will be held in the ordinary course of business and not with the purpose or effect of changing or influencing control of us.
Restrictions on a potential change of control could prevent changes that would be beneficial to our shareholders.
Our Board is authorized by our Declaration of Trust to establish and issue one or more series of preferred shares of beneficial interest without shareholder approval. We have not established any series of preferred shares other than the Series A and Series C Preferred OP Units in the Operating Partnership. However, the establishment and issuance of a class or series of preferred shares could make a change of control of us that could be in the best interests of the shareholders more difficult. In addition, we have entered into an employment agreement with our Chief Executive Officer and severance agreements with certain of our executives, which provide that, upon the occurrence of a change in control of us and either the termination of their employment without cause (as defined) or their resignation for good reason (as defined), such executive officers would be entitled to certain termination or severance payments made by us (which may include a lump sum payment equal to defined percentages of annual salary and prior years’ average bonuses, paid in accordance with the terms and conditions of the respective agreement), which could deter a change of control of us that could be in the best interests of our shareholders generally.
Certain provisions of Maryland law may limit the ability of a third party to acquire control of our Company.
Under the provisions of the Maryland General Corporation Law (the “MGCL”) applicable to REITs, certain business combinations, including certain mergers, consolidations, share exchanges and asset transfers and certain issuances and reclassifications of equity securities, between a Maryland REIT and any person who beneficially owns 10% or more of the voting power of the REIT’s outstanding voting shares or an affiliate or an associate, as defined in the MGCL, of the REIT who, at any time within the two-year period immediately prior to the date in question, was the beneficial owner of 10% or more of the voting power of the then-outstanding shares of beneficial interest of the REIT (an “interested shareholder”) or an affiliate of the interested shareholder, are prohibited for five years after the most recent date on which the interested shareholder becomes an interested shareholder. After that five-year period, any such business combination must be recommended by the board of trustees of the REIT and approved by the affirmative vote of at least (i) 80% of the votes entitled to be cast by holders of outstanding voting shares of beneficial interest of the REIT and (ii) two-thirds of the votes entitled to be cast by holders of voting shares of beneficial interest of the REIT other than shares held by the interested shareholder with whom, or with whose affiliate, the business combination is to be effected or held by an affiliate or associate of the interested shareholder, unless, among other conditions, the REIT’s common shareholders receive a minimum price, as defined in the MGCL, for their shares and the consideration is received in cash or in the same form as previously paid by the interested shareholder for its common shares.
These provisions of the MGCL do not apply, however, to business combinations that are approved or exempted by the board of trustees of the REIT before the interested shareholder becomes an interested shareholder, and a person is not an interested shareholder if the board of trustees approved in advance the transaction by which the person otherwise would have become an interested shareholder. In approving a transaction, our Board may provide that its approval is subject to compliance, at or after the time of approval, with any terms and conditions determined by the Board. We have not elected to opt out of the business combination statute.
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The MGCL also provides that holders of “control shares” of a Maryland REIT (defined as voting shares that, when aggregated with all other shares owned by the acquirer or in respect of which the acquirer is entitled to exercise or direct the exercise of voting power (except solely by virtue of a revocable proxy), would entitle the acquirer to exercise one of three increasing ranges of voting power in electing trustees) acquired in a “control share acquisition” (defined as the direct or indirect acquisition of ownership or control of “control shares”) have no voting rights except to the extent approved by the affirmative vote of holders of at least two-thirds of all the votes entitled to be cast on the matter, excluding shares owned by the acquirer, by officers or by employees who are also trustees of the REIT. Our Bylaws contain a provision exempting from the control share acquisition statute any and all acquisitions by any person of our shares of beneficial interest. Our Bylaws can be amended by our Board by majority vote or by our shareholders, pursuant to a binding proposal properly submitted for consideration at a meeting of shareholders, by the affirmative vote of a majority of all votes entitled to be cast on the matter, and there can be no assurance that this provision will not be amended or eliminated at any time in the future.
Additionally, Title 3, Subtitle 8 of the MGCL permits our Board, without shareholder approval and regardless of what is currently provided in our Declaration of Trust or Bylaws, to elect to be subject to certain provisions relating to corporate governance that may have the effect of delaying, deferring or preventing a transaction or a change of control of our Company that might involve a premium to the market price of our Common Shares or otherwise be in the best interests of our shareholders. We are subject to some of these provisions (for example, a two-thirds vote requirement for removing a trustee) by provisions of our Declaration of Trust and Bylaws unrelated to Subtitle 8. However, pursuant to the Articles Supplementary filed with the State Department of Assessments and Taxation of Maryland on November 9, 2017, which are referenced in Part IV Item 15 hereto, the Board approved a resolution to opt out of Section 3-803 of Subtitle 8 of Title 3 of the MGCL that allows the Board, without shareholder approval, to elect to classify into three classes with staggered three-year terms. The Articles Supplementary prohibit the Company, without the affirmative vote of a majority of the votes cast on the matter by shareholders entitled to vote generally in the election of trustees, from classifying the Board under Subtitle 8.
Becoming subject to, or the potential to become subject to, these provisions of the MGCL could inhibit, delay, or prevent a transaction or a change of control of our Company that might involve a premium price for our shareholders or otherwise be in our or their best interests. In addition, the provisions of our Declaration of Trust on removal of trustees and the provisions of our Bylaws regarding advance notice of shareholder nominations of trustees and other business proposals and restricting shareholder action outside of a shareholders meeting unless such action is taken by unanimous written consent could have a similar effect.
Our rights and shareholders’ rights to take action against trustees and officers are limited, which could limit recourse in the event of actions not in the best interests of shareholders.
As permitted by Maryland law, our Declaration of Trust eliminates the liability of our trustees and officers to the Company and its shareholders for money damages, except for liability resulting from:
In addition, our Declaration of Trust authorizes, and our Bylaws obligate, us to indemnify each present or former trustee or officer, to the maximum extent permitted by Maryland law, who is made a party to any proceeding because of his or her service to our Company in those or certain other capacities. As part of these indemnification obligations, we may be obligated to fund the defense costs incurred by our trustees and officers.
We operate through a partnership structure, which could have an adverse effect on our ability to manage our assets.
Our primary property-owning vehicle is the Operating Partnership, of which we are the general partner. Our acquisition of properties through the Operating Partnership in exchange for interests in the Operating Partnership may permit certain tax deferral advantages to limited partners who contribute properties to the Operating Partnership. Since properties contributed to the Operating Partnership may have unrealized gains attributable to the differences between the fair market value and adjusted tax basis in such properties prior to contribution, the sale of such properties could cause adverse tax consequences to the limited partners who contributed such properties. Although we, as the general partner of the Operating Partnership, generally have no obligation to consider the tax consequences of our actions to any limited partner, we own several properties subject to material contractual restrictions for varying periods of time designed to minimize the adverse tax consequences to the limited partners who contributed such properties. Such restrictions may result in significantly reduced flexibility to manage some of our assets.
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We currently have an exclusive obligation to seek investments for our Funds, which may prevent us from making acquisitions directly.
Under the terms of the organizational documents of our Funds, our primary goal is to seek investments for the Funds, subject to certain exceptions. We may only pursue opportunities to acquire retail properties directly through the Operating Partnership if (i) the ownership of the acquisition opportunity by the Funds would create a material conflict of interest for us; (ii) we require the acquisition opportunity for a “like-kind” exchange; (iii) the consideration payable for the acquisition opportunity is our Common Shares, OP Units or other securities or (iv) the investment is outside the parameters of our investment goals for the Funds (which, in general, seek more opportunistic level returns). As a result, we may not be able to make attractive acquisitions directly and instead may only receive a minority interest in such acquisitions through the Funds.
Our joint venture investments carry additional risks not present in our direct investments.
Partnership or joint venture investments (that may include, among others, tenancy-in common and other similar investments) may involve risks not otherwise present for investments made solely by us, including the possibility that our partner or co-venturer might become bankrupt, and that our partner or co-venturer may take action contrary to our instructions, requests, policies, or objectives, including with respect to maintaining our qualification as a REIT. Actions by, or disputes with, joint venture partners might result in subjecting properties owned by the joint venture to additional risks. Other risks of joint venture investments include impasses on decisions, such as a sale, because neither we nor a joint venture partner may have full control over the joint venture. Also, there is no limitation under our organizational documents as to the amount of our funds that may be invested in joint ventures.
Additionally, our partners or co-venturers may engage in malfeasance in spite of our efforts to perform a high level of due diligence on them, which may jeopardize an investment and/or subject us to reputational risk. Such acts may or may not be covered by insurance.
Any disputes that may arise between joint venture partners and us may result in potentially costly litigation or arbitration that would prevent our officers and/or trustees from focusing their time and effort on our business. In addition, we may in certain circumstances be liable for the actions of our third-party joint venture partners.
There can be no assurance we have qualified or will remain qualified as a REIT for Federal income tax purposes.
We believe that we have consistently met the requirements for qualification as a REIT for Federal income tax purposes beginning with our taxable year ended December 31, 1993, and we intend to continue to meet these requirements in the future. However, qualification as a REIT involves the application of highly technical and complex provisions of the Internal Revenue Code, for which there may be only limited judicial or administrative interpretations. No assurance can be given that we have qualified or will remain qualified as a REIT. The Internal Revenue Code provisions and income tax regulations applicable to REITs differ significantly from those applicable to other entities. The determination of various factual matters and circumstances not entirely within our control can potentially affect our ability to continue to qualify as a REIT. In addition, no assurance can be given that future legislation, regulations, administrative interpretations, or court decisions will not significantly change the requirements for qualification as a REIT or adversely affect the Federal income tax consequences of such qualification. Under current law, if we fail to qualify as a REIT, we would not be allowed a deduction for dividends paid to shareholders in computing our net taxable income. In addition, our income would be subject to tax at the regular corporate rates. Also, we could be disqualified from treatment as a REIT for the four taxable years following the year during which qualification was lost. Cash available for distribution to our shareholders would be significantly reduced for each year in which we do not qualify as a REIT. In that event, we would not be required to continue to make distributions. Although we currently intend to continue to qualify as a REIT, it is possible that future economic, market, legal, tax or other considerations may cause us, without the consent of our shareholders, to revoke the REIT election or to otherwise take action that would result in disqualification.
Legislative or regulatory tax changes could have an adverse effect on us.
There are a number of issues associated with an investment in a REIT that are related to the Federal income tax laws, including, but not limited to, the consequences of our failing to continue to qualify as a REIT. At any time, the Federal income tax laws governing REITs, or the administrative interpretations of those laws may be amended or modified. Any new laws or interpretations may take effect retroactively and could adversely affect us or our shareholders. Reduced tax rates applicable to certain corporate dividends paid to most domestic noncorporate shareholders are not generally available to REIT shareholders since a REIT's income generally is not subject to corporate level tax. As a result, investment in non-REIT corporations may be viewed as relatively more attractive than investment in REITs by domestic noncorporate investors. Moreover, in the event that there is a reduction in tax rates applicable to corporate dividends, or a reduction in the corporate tax rate, such views may strengthen as the perceived benefits of investing in REITs by domestic noncorporate investors may decline. The foregoing factors could adversely affect the market price of our shares.
We may be required to borrow funds or sell assets to satisfy our REIT distribution requirements.
Our cash flows may be insufficient to fund distributions required to maintain our qualification as a REIT as a result of differences in timing between the actual receipt of income and the recognition of income for U.S. Federal income tax purposes, or the effectas a result of non-deductibleour inability to currently deduct certain expenditures that we must currently pay, such as capital expenditures, payments of compensation for which Section 162(m) of the Code denies a deduction, any business interest expense that is disallowed under Section 163 (j) of the Code (unless we elect to be an “electing
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real property trade or business”), and the creation of reserves or required amortization payments. IfWhile we do not have historically satisfied these distribution requirements by making cash distributions to our stockholders, a REIT is permitted to satisfy these requirements by making distributions of cash or other funds availableproperty, including, in limited circumstances, its own stock. Assuming we continue to satisfy these situations,distribution requirements with cash, we may need to borrow funds on a short-termshort term basis or sell assets, to meet the REIT distribution requirements and avoid the payment of income and excise taxes even if the then-then prevailing market conditions are not favorable for these borrowings or sales,sales. These cash needs could result from differences in ordertiming between the actual receipt of cash and inclusion of income for U.S. federal income tax purposes, or the effect of non-deductible capital expenditures, the creation of cash reserves or required debt or amortization payments. These sources, however, may not be available on favorable terms or at all. Our access to satisfythird-party sources of capital depends on a number of factors, including the market's perception of our REIT distribution requirements.growth potential, our current debt levels, the market price of our common stock, and our current and potential future earnings. Such actions could adversely affect our cash flow and results of operations.
Dividends payable by REITs generally do not qualify for reduced tax rates
Certain qualified dividends paid by corporations to individuals, trusts and estates that are U.S. shareholders are taxed at capital gain rates, which are lower than ordinary income rates. Dividends of current and accumulated earnings and profits payable by REITs, however, are taxed at ordinary income rates as opposed to the capital gain rates. FromPursuant to section 199A of the Code, from 2018 through 2025, certain REIT shareholders will be permitted to deduct 20% of ordinary REIT dividends received. Dividends payable by REITs in excess of these earnings and profits generally are treated as a non-taxable reduction of the shareholders’ basis in the shares to the extent thereof and thereafter as taxable gain. The more favorable rates applicable to regular corporate dividends could cause investors who are individuals, trusts, and estates to perceive investments in REITs, including us, to be relatively less attractive than investments in the stock of non-REIT corporations that pay dividends, which may negatively impact the trading prices of our securities.
Complying with REIT requirements may cause us to forego otherwise attractive opportunities or liquidate otherwise attractive investments.
To qualify as a REIT, we must continually satisfy tests concerning, among other things, the sources of our income, the nature and diversification of our assets, the amounts we distribute to our shareholders and the ownership of our Common Shares. In order to meet these tests, we may be required to forego investments we might otherwise make and refrain from engaging in certain activities. Thus, compliance with the REIT requirements may hinder our performance.
In addition, if we fail to comply with certain asset ownership tests at the end of any calendar quarter, we must correct the failure within 30 days after the end of the calendar quarter or qualify for certain statutory relief provisions to avoid losing our REIT qualification. As a result, we may be required to liquidate otherwise attractive investments.
We have limits on ownership of our shares of beneficial interest.
For us to qualify as a REIT for Federal income tax purposes, among other requirements, not more than 50% of the value of our shares of beneficial interest may be owned, directly or indirectly, by five or fewer individuals (as defined in the Internal Revenue Code to include certain entities) at any time during the last half of each taxable year, and such shares of beneficial interest must be beneficially owned by 100 or more persons during at least 335 days of a taxable year of 12 months or during a proportionate part of a shorter taxable year (in each case, other than the first such year). Our Declaration of Trust includes certain restrictions regarding transfers of our shares of beneficial interest and ownership limits that are intended to assist us in satisfying these limitations, among other purposes. These restrictions and limits may not be adequate in all cases, however, to prevent the transfer of our shares of beneficial interest in violation of the ownership limitations. The ownership limits contained in our Declaration of Trust may have the effect of delaying, deferring, or preventing a change of control of us.
Actual or constructive ownership of our shares of beneficial interest in excess of the share ownership limits contained in our Declaration of Trust would cause the violative transfer or ownership to be null and void from the beginning and subject to purchase by us at a price equal to the fair market value of such shares (determined in accordance with the rules set forth in our Declaration of Trust). As a result, if a violative transfer were made, the recipient of the shares would not acquire any economic or voting rights attributable to the transferred shares. Additionally, the constructive ownership rules for these limits are complex and groups of related individuals or entities may be deemed a single owner and consequently in violation of the share ownership limits.
Distribution requirements imposed by law limit our operating flexibility.
To maintain our status as a REIT for Federal income tax purposes, we are generally required to distribute to our shareholders at least 90% of our taxable income for each calendar year. Our taxable income is determined without regard to any deduction for dividends paid and by excluding net capital gains. To the extent that we satisfy the distribution requirement, but distribute less than 100% of our taxable income, we will be subject to Federal corporate income tax on our undistributed income. In addition, we will incur a 4% nondeductible excise tax on the amount, if any, by
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which our distributions in any year are less than the sum of (i) 85% of our ordinary income for that year; (ii) 95% of our capital gain net income for that year; and (iii) 100% of our undistributed taxable income from prior years. We intend to continue to make distributions to our shareholders to comply with the distribution requirements of the Code and to minimize exposure to Federal income and excise taxes. Differences in timing between the receipt of income and the payment of expenses in determining our income as well as required debt amortization payments and the capitalization of certain expenses could require us to borrow funds on a short-term basis to meet the distribution requirements that are necessary to achieve the tax benefits associated with qualifying as a REIT. The distribution requirements also severely limit our ability to retain earnings to acquire and improve properties or retire outstanding debt.
GENERAL RISK FACTORS
The economic environment may cause us to lose tenants and may impair our ability to borrow money to purchase properties, refinance existing debt or finance our current development projects.
Our operations and performance depend on general economic conditions, including consumer health. The U.S. economy has historically experienced financial downturns from time to time, including a decline in consumer spending, credit tightening and high unemployment.
While we currently believe we have adequate sources of liquidity, there can be no assurance that, in the event of a financial downturn, we will be able to obtain secured or unsecured loan facilities to meet our needs, including to purchase additional properties, to complete current development projects, or to successfully refinance our properties as loans become due. To the extent that the availability of credit is limited, it would also adversely impact our notes receivable, as counterparties may not be able to obtain the financing required to repay the loans upon maturity.
Certain sectors of the U. S. economy are still experiencing weakness. Over the past several years, this structural weakness has resulted in periods of high unemployment, rising inflation, the bankruptcy or weakened financial condition of a number of retailers, decreased consumer spending, increased home foreclosures, low consumer confidence, and reduced demand and rental rates for certain retail space. There can be no assurance that an economic recovery will occur or continue. General economic factors that are beyond our control, including, but not limited to, economic recessions, decreases in consumer confidence, reductions in consumer credit availability, increasing consumer debt levels, rising energy costs, higher tax rates, continued business layoffs, downsizing and industry slowdowns, and/or rising inflation, could have a negative impact on the business of our retail tenants. In turn, this could have a material adverse effect on our business because current or prospective tenants may, among other things, (i) have difficulty paying their rent obligations as they struggle to sell goods and services to consumers, (ii) be unwilling to enter into or renew leases with us on favorable terms or at all, (iii) seek to terminate their existing leases with us or request rental concessions on such leases, or (iv) be forced to curtail operations or declare bankruptcy.
Political and economic uncertainty could have an adverse effect on our business.
In the past year, microeconomic and macroeconomic conditions, including the fallout from the COVID-19 Pandemic, the war in Ukraine, supply-chain disruptions, and the recessionary outlook of the current financial markets, has increased volatility in the market and has caused a surge in already increasing inflation and interest rates. We cannot predict how current political and economic uncertainty will affect our critical tenants, joint venture partners, lenders, financial institutions, and general economic conditions, including the health and confidence of the consumer and the volatility of the stock market.
Political and economic uncertainty poses a risk to us in that it may cause consumers to postpone discretionary spending in response to tighter credit, reduced consumer confidence and other macroeconomic factors affecting consumer spending behavior, resulting in a downturn in the business of our tenants. In the event current political and economic uncertainty results in financial turmoil affecting the banking system and financial markets generally or significant financial service institution failures, there could be a new or incremental tightening in the credit markets, low liquidity, and extreme volatility in fixed income, credit, currency, and equity markets. Each of these factors could adversely affect our financial condition, cash flows and results of operations.
Inflation may adversely affect our financial condition, cash flows and results of operations.
Increased inflation could have a more pronounced negative impact on our mortgage and debt interest, any of our remaining development and redevelopment costs, and general and administrative expenses, as these costs could increase at a rate higher than our rents. Also, inflation may adversely affect tenant leases with stated rent increases or limits on such tenant’s obligation to pay its share of operating expenses, which could be lower than the increase in inflation at any given time. It may also limit our ability to recover all of our operating expenses. Inflation could also have an adverse effect on consumer spending, which could impact our tenants’ sales and, in turn, our average rents, and in some cases, our percentage rents, where applicable. In addition, renewals of leases or future leases may not be negotiated on current terms, in which event we may recover a smaller percentage of our operating expenses.
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Competition may adversely affect our ability to purchase properties and to attract and retain tenants.
There are numerous commercial developers, real estate companies, financial institutions, and other investors with greater financial resources than we have that compete with us in seeking properties for acquisition and tenants who will lease space in our properties. Our competitors include other REITs, financial institutions, private funds, insurance companies, pension funds, private companies, family offices, sovereign wealth funds and individuals. This competition may result in a higher cost for properties than we wish to pay. In addition, retailers at our properties (both in our Core Portfolio and in the portfolios of the Funds) face increasing competition from outlet malls, discount shopping clubs, e-commerce, direct mail, and telemarketing, which could (i) reduce rents payable to us and (ii) reduce our ability to attract and retain tenants at our properties leading to increased vacancy rates at our properties.
Changes in market conditions could have an adverse effect on our share price and our ability to access the public equity markets.
The market price of our Common Shares may fluctuate significantly in response to many factors, including:
Many of the factors listed above are beyond our control. Those factors may cause the market price of our Common Shares to decline significantly, regardless of our financial performance, condition, and prospects. We cannot provide any assurance that the market price of our Common Shares will not fall in the future, and it may be difficult for holders to sell such securities at prices they find attractive, or at all. A decline in our share price, as a result of this or other market factors, could unfavorably impact our ability to raise additional equity in the public markets.
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Outages, computer viruses and similar events could disrupt our operations.
We rely on information technology networks and systems, some of which are owned and operated by third parties, to process, transmit and store electronic information. Any of these systems may be susceptible to outages due to fire, floods, power loss, telecommunications failures, terrorist or cyber-attacks and similar events. Despite the implementation of network security measures, our systems and those of third parties on which we rely may also be vulnerable to computer viruses and similar disruptions. If we or the third parties on whom we rely are unable to prevent such outages and breaches, our operations could be disrupted.
Increased Information Technology (“IT”) security threats and more sophisticated computer crime could pose a risk to our systems, networks, and services.
Cyber incidents can result from deliberate attacks or unintentional events. There have been an increased number of significant cyber-attacks targeted at the retail, insurance, financial and banking industries that include, but are not limited to, gaining unauthorized access to digital systems for purposes of misappropriating assets or sensitive information, corrupting data or causing operational disruption. Cyber-attacks may also be carried out in a manner that does not require gaining unauthorized access, such as by causing denial-of-service attacks on websites. Cyber-attacks by third parties or insiders utilize techniques that range from highly sophisticated efforts to electronically circumvent network security or overwhelm a website to more traditional intelligence gathering, and social engineering aimed at obtaining information necessary to gain access.
Increased global IT security threats are more sophisticated and targeted computer crimes pose a risk to the security of our systems and networks and the confidentiality, availability and integrity of our data. The open nature of interconnected technologies may allow for a network or Web outage or a privacy breach that reveals sensitive data or transmission of harmful/malicious code to business partners and clients. Because the techniques used to obtain unauthorized access, disable, or degrade service, or sabotage systems change frequently and may be difficult to detect for long periods of time, we may be unable to anticipate these techniques or implement adequate preventive measures.
Cyber-attacks may result in substantial financial and reputational cost, including but are not limited to:
The control environment for cyber security is an ever-changing risk landscape across the entire attack surface which includes risks from on-premises, cloud infrastructure, software as a service and mobile applications. While we attempt to mitigate these risks by employing a number of measures, including a dedicated IT team, employee training and background checks, maintenance of backup systems, utilization of third-party service providers to provide redundancy over multiple locations, and comprehensive monitoring of our networks and systems along with purchasing cyber security insurance coverage, our systems, networks, and services remain potentially vulnerable to advanced threats.
Use of social media may adversely impact our reputation and business.
There has been a significant increase in the use of social media platforms, including weblogs, social media websites and other forms of Internet-based communications, which allow individuals access to a broad audience, including our significant business constituents. The availability of information through these platforms is virtually immediate as is its impact and may be posted at any time without affording us an opportunity to redress or correct it timely. This information may be adverse to our interests, may be inaccurate and may harm our reputation, brand image,
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goodwill, performance, prospects, or business. Furthermore, these platforms increase the risk of unauthorized disclosure of material non-public Company information.
Climate change, natural disasters or health crises could adversely affect our properties and business.
Some of our current or future properties could be subject to natural disasters and may be impacted by climate change. To the extent climate change causes adverse changes in weather patterns, rising sea levels or extreme temperatures, our properties in certain markets may be adversely affected. Specifically, properties located in coastal regions, including Florida, Virginia, Georgia, New York, and Massachusetts could be affected by any future increases in sea levels or in the frequency or severity of hurricanes and storms, whether caused by climate change or other factors. Additionally, we own properties in California, which in recent years has experienced intense drought and wildfires and has had earthquake activity.
Climate change could have a variety of direct or indirect adverse effects on our properties and business, including:
Moreover, compliance with new laws or regulations related to climate change, including compliance with “green” building codes, may require us to make improvements to our existing properties or pay additional taxes and fees assessed on us or our properties. Although we strive to identify, analyze, and respond to the risk and opportunities that climate change presents, at this time there can be no assurance that climate change will not have an adverse effect on us.
Public health crises, pandemics, and epidemics, such as those caused by new strains of viruses such as H5N1 (avian flu), severe acute respiratory syndrome (SARS) and, most recently, the COVID-19 Pandemic, may increase as international travel continues to rise and could adversely impact our business by interrupting our tenants’ business, supply chains and transactional activities, disrupting travel, and negatively impacting local, national, or global economies.
Future terrorist attacks or civil unrest could harm the demand for, and the value of, our properties.
Over the past several years, a number of highly publicized terrorist acts and shootings have occurred at domestic and international retail properties. Future terrorist attacks, civil unrest and other acts of terrorism or war could harm the demand for, and the value of, our properties. Terrorist attacks could directly impact the value of our properties through damage, destruction, loss or increased security costs, and the availability of insurance for such acts may be limited or may be subject to substantial cost increases. To the extent that our tenants are impacted by future attacks, their ability to continue to honor obligations under their existing leases could be adversely affected. A decrease in retail demand could make it difficult for us to renew or re-lease our properties at lease rates equal to or above historical rates. These acts might erode business and consumer confidence and spending and might result in increased volatility in national and international financial markets and economies. Any
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one of these events might decrease demand for real estate, decrease or delay the occupancy of our properties, and limit our access to capital or increase our cost of raising capital.
Increased scrutiny by and changing expectations from investors, tenants, employees, and other stakeholders regarding our ESG practices and reporting could cause us to incur additional costs and adversely impact our reputation, tenant and employee acquisition and retention, and access to capital.
Companies across all industries are facing increasing scrutiny related to their ESG practices and disclosure. Investors, tenants, employees, and other stakeholders have begun to focus increasingly on ESG practices and to place heightened importance on the environmental and social cost of their investments, business decisions and consumer choices. For example, an increasing number of investment funds focus on positive ESG practices and sustainability scores when making an investment decision. Additionally, certain institutional investors have demonstrated increased activism with respect to their existing investments, including by urging companies to take certain actions in areas of perceived ESG significance.
Investors, particularly institutional investors, use or may use third-party benchmarks and scores to assess our ESG practices against our peers and if we are perceived as lagging, such investors may decide to not invest in our Common Shares or to divest from their current investment, and we may face reputational challenges. Alternatively, such investors may decide to actively engage with us to improve ESG disclosure or performance, and may also make voting decisions on this basis. Given increased investor focus and demand, public disclosure regarding ESG practices is becoming more broadly expected. Any disclosure we make may include our policies and practices on a variety of ESG matters, including corporate governance, environmental compliance, human capital management, and workforce inclusion and diversity. It is possible that stakeholders may not be satisfied with our ESG practices, reporting and goals, or with our speed of adoption. If our ESG practices and disclosures do not meet investor, tenant, employee or other stakeholder expectations, which continue to evolve, our reputation and tenant and employee retention, and access to capital may be negatively impacted.
In 2022, the SEC proposed extensive rules aimed at enhancing and standardizing climate-related disclosures in an effort to foster greater consistency, comparability and reliability of climate-related information among public issuers. The proposal, if adopted, would require public issuers to include prescribed climate-related information in their registration statements and annual reports, including information regarding greenhouse gas emissions and climate-related risks and opportunities and related financial impacts, governance and strategy. Additionally, we may become subject to new compliance requirements and/or new costs or taxes associated with natural resource or energy usage and related emissions (such as a “carbon tax”), which could increase our operating costs.
We could incur additional costs relating to implementing, monitoring and reporting various ESG practices and initiatives, as well as complying with applicable law, which could place a strain on our personnel, systems and resources. Our failure, or perceived failure, to meet the goals and objectives we set in any ESG disclosure within the timelines announced or at all, or the expectations of our various stakeholders could negatively impact our reputation, tenant and employee retention, and access to capital.
We previously identified a material weakness in our internal control over financial reporting which resulted in the restatement of certain of our previously issued consolidated financial statements, which resulted in unanticipated costs and may affect investors' confidence and raise reputational issues. If we fail to maintain effective internal control over financial reporting, we may not be able to accurately report our financial results.
Effective internal controls over financial reporting are necessary for us to provide reliable and accurate financial reports. We previously identified and reported a deficiency in internal control over financial reporting as of December 31, 2021 and determined that the Company did not maintain effective internal control over financial reporting because of an error in accounting treatment at the time of formation related to the improper consolidation of two investments that are less-than-wholly-owned through the Company’s opportunity funds. As a consequence, these two Fund Investments, which were formed in 2012 and 2013, were adjusted from consolidated investments to investments in unconsolidated affiliates within the restated financial statements, as of and for the years ended December 31, 2020 and 2019, and as of and for each of the quarterly periods ended March 31, 2021 and 2020, June 30, 2021 and 2020, September 30, 2021 and 2020, and December 31, 2020 (collectively, the "Restatement"). The Restatement also included corrections for certain immaterial unrecorded adjustments in the Company's previously issued financial statements. See Item 9A, “Controls and Procedures”, in this Annual Report on Form 10-K for additional information regarding the previously identified material weakness and our actions to date to remediate the material weakness.
The Restatement may affect investor confidence in the accuracy of our financial disclosure and may raise reputational risks for our business, both of which could harm our business and financial results. Additionally, if material weaknesses in our internal control over financial reporting are discovered or occur in the future, our financial statements may contain material misstatements, and we could be required to restate such financial results, which could materially and adversely affect our business and financial results, restrict our ability to access the capital markets, require us to expend significant resources to correct the material weaknesses, subject us to fines, penalties or judgements, harm our reputation or otherwise cause a decline in investor confidence.
28
ITEM 1B. UNRESOLVED STAFF COMMENTS.
None.
29
ITEM 2.PROPERTIES.
Retail Properties
The discussion and tables in this Item 2. include wholly-owned and partially-owned properties held through our Core Portfolio and our Funds. We define our Core Portfolio as those properties either 100% owned by, or partially owned through joint venture interests by the Operating Partnership or subsidiaries thereof, not including those properties owned through our Funds.
As of December 31, 2017, there are 116 operating properties in2022, our Core Portfolio consisted of 143 operating properties totaling approximately 6.35.6 million square feet (or 5.2 million at our pro rata share) of gross leasable area (“GLA”) excluding twofive properties under redevelopment and three properties in development. The Core Portfolio properties are located in 1213 states and the District of Columbia and primarily consist of street retail and dense suburban shopping centers. These properties are diverse in size, ranging from approximately 1,000 to 800,000 square feet and as of December 31, 2017,2022, were in total,92.1% occupied and 94.4% leased (or 92.7% occupied and 94.9% leased at our pro rata share), excluding the properties under development 93.5% occupied.
As of December 31, 2017,2022, we owned and operated 5449 properties totaling approximately 4.28.0 million square feet in total (or 1.7 million square feet at our pro rata share) of GLA in our Funds, excluding fourtwo properties under development. In addition to shopping centers, the Funds have invested in mixed-use properties, which generally include retail activities. The Fund properties are located in 1319 states and the District of Columbia and, as of December 31, 2017,2022, were in total,88.9% occupied and 92.5% leased (or 86.1% occupied and 91.4% leased at our pro rata share), excluding the properties under development, 86.5% occupied.
Within our Core Portfolio and Funds, we had approximately 900more than 1,100 retail leases as of December 31, 2017.2022. A majoritysignificant portion of our rental revenues wereare from national retailers and consist of rents received under long-term leases. These leases generally provide for the monthly payment of fixed minimum rent and the tenants' pro-rata share of the real estate taxes, insurance, utilities, and common area maintenance of the shopping centers. CertainAn insignificant portion of our leases also provide for the payment of rent based on a percentage of a tenant's gross sales in excess of a stipulated annual amount, either in addition to, or in place of, minimum rents, which we refer to as percentage rents. Minimum rents, percentage rents and expense reimbursements accounted for approximately 97%substantially all of our total revenues for the year ended December 31, 2017.
Six of our Core Portfolio properties and two of our Fund properties are subject to long-term ground leases in which a third party owns and has leased the underlying land to us. We pay rent for the use of the land and are responsible for all costs and expenses associated with the building and improvements at all of these locations.
No individual property or tenant contributed in excess of 10% of our total revenues for the years ended December 31, 2017, 20162022, 2021 or 2015.2020. See
30
The following table sets forth more specific information with respect to each of our Core properties at December 31, 2017:
Property (a) |
| Key Tenants |
| Year |
| Acadia's |
|
| Gross Leasable |
|
| In Place |
|
| Leased |
|
| Annualized Base |
|
| ABR/ Per |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
STREET AND URBAN RETAIL |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Chicago Metro |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
664 N. Michigan Avenue |
| Tommy Bahama, |
| 2013 |
|
| 100.0 | % |
|
| 18,141 |
|
|
| 100.0 | % |
|
| 100.0 | % |
| $ | 3,350,038 |
|
| $ | 184.67 |
|
840 N. Michigan Avenue |
| H & M, Verizon |
| 2014 |
|
| 88.4 | % |
|
| 87,135 |
|
|
| 100.0 | % |
|
| 100.0 | % |
|
| 8,521,951 |
|
|
| 97.80 |
|
Rush and Walton Streets |
| Lululemon, BHLDN, |
| 2011 |
|
| 100.0 | % |
|
| 40,384 |
|
|
| 88.2 | % |
|
| 88.2 | % |
|
| 6,996,440 |
|
|
| 196.50 |
|
Clark Street and W. Diversey |
| Starbucks;TJ Maxx; J Crew Factory |
| 2011 |
|
| 100.0 | % |
|
| 53,277 |
|
|
| 68.3 | % |
|
| 78.0 | % |
|
| 1,452,248 |
|
|
| 39.93 |
|
Halsted and Armitage |
| Serena and Lily, |
| 2011 |
|
| 100.0 | % |
|
| 51,596 |
|
|
| 97.6 | % |
|
| 100.0 | % |
|
| 2,493,561 |
|
|
| 49.52 |
|
North Lincoln Park Chicago |
| Champion, |
| 2011 |
|
| 100.0 | % |
|
| 49,921 |
|
|
| 67.9 | % |
|
| 67.9 | % |
|
| 1,065,847 |
|
|
| 31.42 |
|
State and Washington |
| Nordstrom Rack, |
| 2016 |
|
| 100.0 | % |
|
| 78,771 |
|
|
| 100.0 | % |
|
| 100.0 | % |
|
| 3,364,962 |
|
|
| 42.72 |
|
151 N. State Street |
| Walgreens |
| 2016 |
|
| 100.0 | % |
|
| 27,385 |
|
|
| 100.0 | % |
|
| 100.0 | % |
|
| 1,573,000 |
|
|
| 57.44 |
|
North and Kingsbury |
| Old Navy, Backcountry |
| 2016 |
|
| 100.0 | % |
|
| 41,791 |
|
|
| 100.0 | % |
|
| 100.0 | % |
|
| 1,845,756 |
|
|
| 44.17 |
|
Concord and Milwaukee |
| — |
| 2016 |
|
| 100.0 | % |
|
| 13,147 |
|
|
| 80.8 | % |
|
| 100.0 | % |
|
| 359,012 |
|
|
| 33.79 |
|
California and Armitage |
| — |
| 2016 |
|
| 100.0 | % |
|
| 18,275 |
|
|
| 78.8 | % |
|
| 78.8 | % |
|
| 725,404 |
|
|
| 50.40 |
|
Roosevelt Galleria |
| Petco, Vitamin |
| 2015 |
|
| 100.0 | % |
|
| 37,995 |
|
|
| 63.4 | % |
|
| 89.7 | % |
|
| 698,674 |
|
|
| 29.02 |
|
Sullivan Center |
| Target |
| 2016 |
|
| 100.0 | % |
|
| 176,181 |
|
|
| 78.9 | % |
|
| 78.9 | % |
|
| 5,023,101 |
|
|
| 36.14 |
|
|
|
|
|
|
|
|
|
|
| 693,999 |
|
|
| 86.1 | % |
|
| 88.8 | % |
|
| 37,469,994 |
|
| $ | 62.71 |
| |
New York Metro |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Soho Collection |
| Faherty, Outerknown, |
| 2011 |
|
| 100.0 | % |
|
| 36,389 |
|
|
| 73.8 | % |
|
| 90.7 | % |
|
| 9,137,418 |
|
|
| 340.36 |
|
5-7 East 17th Street |
| — |
| 2008 |
|
| 100.0 | % |
|
| 8,593 |
|
|
| 0.0 | % |
|
| 47.5 | % |
|
| - |
|
|
| — |
|
200 West 54th Street |
| — |
| 2007 |
|
| 100.0 | % |
|
| 5,862 |
|
|
| 100.0 | % |
|
| 100.0 | % |
|
| 1,569,139 |
|
|
| 267.68 |
|
61 Main Street |
| — |
| 2014 |
|
| 100.0 | % |
|
| 3,470 |
|
|
| 100.0 | % |
|
| 100.0 | % |
|
| 312,925 |
|
|
| 90.18 |
|
181 Main Street |
| TD Bank |
| 2012 |
|
| 100.0 | % |
|
| 11,514 |
|
|
| 100.0 | % |
|
| 100.0 | % |
|
| 980,044 |
|
|
| 85.12 |
|
4401 White Plains Road |
| Walgreens |
| 2011 |
|
| 100.0 | % |
|
| 12,964 |
|
|
| 100.0 | % |
|
| 100.0 | % |
|
| 625,000 |
|
|
| 48.21 |
|
Bartow Avenue |
| — |
| 2005 |
|
| 100.0 | % |
|
| 14,590 |
|
|
| 80.0 | % |
|
| 80.0 | % |
|
| 396,697 |
|
|
| 33.97 |
|
239 Greenwich Avenue |
| Watches of Switzerland |
| 1998 |
|
| 75.0 | % |
|
| 16,621 |
|
|
| 100.0 | % |
|
| 100.0 | % |
|
| 1,793,298 |
|
|
| 107.89 |
|
252-256 Greenwich Avenue |
| Veronica Beard, |
| 2014 |
|
| 100.0 | % |
|
| 7,986 |
|
|
| 100.0 | % |
|
| 100.0 | % |
|
| 910,725 |
|
|
| 114.04 |
|
2914 Third Avenue |
| Planet Fitness |
| 2006 |
|
| 100.0 | % |
|
| 40,603 |
|
|
| 100.0 | % |
|
| 100.0 | % |
|
| 1,099,431 |
|
|
| 27.08 |
|
868 Broadway |
| Dr. Martens |
| 2013 |
|
| 100.0 | % |
|
| 2,031 |
|
|
| 100.0 | % |
|
| 100.0 | % |
|
| 838,855 |
|
|
| 413.03 |
|
313-315 Bowery (b) |
| John Varvatos |
| 2013 |
|
| 100.0 | % |
|
| 6,600 |
|
|
| 100.0 | % |
|
| 100.0 | % |
|
| 527,076 |
|
|
| 79.86 |
|
120 West Broadway |
| Citizens Bank |
| 2013 |
|
| 100.0 | % |
|
| 13,838 |
|
|
| 79.8 | % |
|
| 100.0 | % |
|
| 2,089,073 |
|
|
| 189.25 |
|
2520 Flatbush Avenue |
| Bob's Disc. Furniture, |
| 2014 |
|
| 100.0 | % |
|
| 29,114 |
|
|
| 100.0 | % |
|
| 100.0 | % |
|
| 1,181,175 |
|
|
| 40.57 |
|
Williamsburg Collection (c) |
| Sephora, SweetGreen, |
| 2022 |
|
| 100.0 | % |
|
| 50,842 |
|
|
| 100.0 | % |
|
| 100.0 | % |
|
| 5,027,426 |
|
|
| 98.88 |
|
991 Madison Avenue |
| Vera Wang, |
| 2016 |
|
| 100.0 | % |
|
| 7,513 |
|
|
| 91.1 | % |
|
| 91.1 | % |
|
| 3,007,496 |
|
|
| 439.24 |
|
Shops at Grand |
| Stop & Shop (Ahold) |
| 2014 |
|
| 100.0 | % |
|
| 99,685 |
|
|
| 100.0 | % |
|
| 100.0 | % |
|
| 3,335,287 |
|
|
| 33.46 |
|
Gotham Plaza |
| Bank of America, |
| 2016 |
|
| 49.0 | % |
|
| 25,922 |
|
|
| 73.9 | % |
|
| 91.6 | % |
|
| 1,588,117 |
|
|
| 82.91 |
|
|
|
|
|
|
|
|
|
|
| 394,137 |
|
|
| 92.1 | % |
|
| 96.5 | % |
|
| 34,419,182 |
|
|
| 94.86 |
| |
Los Angeles Metro |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31
8833 Beverly Blvd |
| Luxury Living |
| 2022 |
|
| 100.0 | % |
|
| 9,757 |
|
|
| 100.0 | % |
|
| 100.0 | % |
|
| 1,272,860 |
|
|
| 130.46 |
|
Melrose Place Collection |
| The Row, Chloe, |
| 2019 |
|
| 100.0 | % |
|
| 14,000 |
|
|
| 100.0 | % |
|
| 100.0 | % |
|
| 2,677,460 |
|
|
| 191.25 |
|
|
|
|
|
|
|
|
|
|
| 23,757 |
|
|
| 100.0 | % |
|
| 100.0 | % |
|
| 3,950,320 |
|
|
| 166.28 |
| |
District of Columbia Metro |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
1739-53 & 1801-03 |
| TD Bank |
| 2012 |
|
| 100.0 | % |
|
| 20,669 |
|
|
| 66.7 | % |
|
| 66.7 | % |
|
| 875,265 |
|
|
| 63.53 |
|
14th Street Collection (3 properties) |
| Mitchell Gold and Bob Williams, Verizon |
| 2021 |
|
| 100.0 | % |
|
| 19,461 |
|
|
| 100.0 | % |
|
| 100.0 | % |
|
| 1,410,882 |
|
|
| 72.50 |
|
Rhode Island Place |
| Ross Dress for Less |
| 2012 |
|
| 100.0 | % |
|
| 57,667 |
|
|
| 100.0 | % |
|
| 100.0 | % |
|
| 2,080,617 |
|
|
| 36.08 |
|
M Street and Wisconsin Corridor |
| Lululemon, Duxiana, |
| 2011 |
|
| 24.8 | % |
|
| 245,249 |
|
|
| 82.1 | % |
|
| 87.9 | % |
|
| 12,867,936 |
|
|
| 63.88 |
|
|
|
|
|
|
|
|
|
|
| 343,046 |
|
|
| 85.2 | % |
|
| 89.4 | % |
|
| 17,234,700 |
|
|
| 58.95 |
| |
Boston Metro |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
165 Newbury Street |
| Starbucks |
| 2016 |
|
| 100.0 | % |
|
| 1,050 |
|
|
| 100.0 | % |
|
| 100.0 | % |
|
| 303,471 |
|
|
| 289.02 |
|
|
|
|
|
|
|
|
|
|
| 1,050 |
|
|
| 100.0 | % |
|
| 100.0 | % |
|
| 303,471 |
|
|
| 289.02 |
| |
Dallas Metro |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Henderson Avenue Portfolio (14 properties) |
| Sprouts Market |
| 2022 |
|
| 100.0 | % |
|
| 121,715 |
|
|
| 91.8 | % |
|
| 93.1 | % |
|
| 4,379,233 |
|
|
| 39.20 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Total Street and Urban Retail |
|
|
|
|
|
|
|
|
| 1,577,704 |
|
|
| 88.1 | % |
|
| 91.4 | % |
| $ | 97,756,900 |
|
| $ | 70.37 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Acadia Share Total Street and Urban Retail |
|
|
|
|
|
|
|
|
| 1,365,719 |
|
|
| 89.0 | % |
|
| 91.8 | % |
| $ | 86,404,051 |
|
| $ | 71.07 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
SUBURBAN PROPERTIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
New Jersey |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Elmwood Park Shopping Center |
| Walgreens, Lidl |
| 1998 |
|
| 100.0 | % |
|
| 143,910 |
|
|
| 83.7 | % |
|
| 100.0 | % |
| $ | 3,245,133 |
|
| $ | 26.95 |
|
Marketplace of Absecon |
| Walgreens, Dollar Tree |
| 1998 |
|
| 100.0 | % |
|
| 104,556 |
|
|
| 92.2 | % |
|
| 92.2 | % |
|
| 1,488,815 |
|
|
| 15.44 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
New York |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Village Commons |
| — |
| 1998 |
|
| 100.0 | % |
|
| 87,128 |
|
|
| 92.1 | % |
|
| 92.1 | % |
|
| 2,765,190 |
|
|
| 34.44 |
|
Branch Plaza |
| LA Fitness, |
| 1998 |
|
| 100.0 | % |
|
| 123,345 |
|
|
| 98.8 | % |
|
| 98.8 | % |
|
| 3,532,225 |
|
|
| 28.98 |
|
Amboy Center |
| Stop & Shop (Ahold) |
| 2005 |
|
| 100.0 | % |
|
| 63,290 |
|
|
| 88.4 | % |
|
| 92.2 | % |
|
| 1,924,058 |
|
|
| 34.38 |
|
Crossroads Shopping Center |
| HomeGoods, PetSmart, BJ's Wholesale Club |
| 1998 |
|
| 49.0 | % |
|
| 311,655 |
|
|
| 85.3 | % |
|
| 88.5 | % |
|
| 8,154,634 |
|
|
| 30.68 |
|
New Loudon Center |
| Price Chopper, |
| 1993 |
|
| 100.0 | % |
|
| 258,701 |
|
|
| 95.2 | % |
|
| 95.2 | % |
|
| 2,249,812 |
|
|
| 9.14 |
|
28 Jericho Turnpike |
| Kohl's |
| 2012 |
|
| 100.0 | % |
|
| 96,363 |
|
|
| 100.0 | % |
|
| 100.0 | % |
|
| 1,996,500 |
|
|
| 20.72 |
|
Bedford Green |
| Shop Rite, CVS |
| 2014 |
|
| 100.0 | % |
|
| 90,589 |
|
|
| 75.1 | % |
|
| 75.1 | % |
|
| 2,366,064 |
|
|
| 34.79 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Connecticut |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Town Line Plaza (e) |
| Wal-Mart, Stop |
| 1998 |
|
| 100.0 | % |
|
| 206,089 |
|
|
| 97.3 | % |
|
| 97.3 | % |
|
| 1,807,822 |
|
|
| 17.07 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Massachusetts |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Methuen Shopping Center |
| Wal-Mart, |
| 1998 |
|
| 100.0 | % |
|
| 130,021 |
|
|
| 100.0 | % |
|
| 100.0 | % |
|
| 1,467,752 |
|
|
| 11.29 |
|
Crescent Plaza |
| Home Depot, Shaw's |
| 1993 |
|
| 100.0 | % |
|
| 218,148 |
|
|
| 96.0 | % |
|
| 100.0 | % |
|
| 2,066,246 |
|
|
| 9.87 |
|
201 Needham Street |
| Michael's |
| 2014 |
|
| 100.0 | % |
|
| 20,409 |
|
|
| 100.0 | % |
|
| 100.0 | % |
|
| 646,965 |
|
|
| 31.70 |
|
163 Highland Avenue |
| Staples, Petco |
| 2015 |
|
| 100.0 | % |
|
| 40,505 |
|
|
| 100.0 | % |
|
| 100.0 | % |
|
| 1,490,575 |
|
|
| 36.80 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Vermont |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
The Gateway Shopping Center |
| Shaw's (Supervalu) |
| 1999 |
|
| 100.0 | % |
|
| 101,474 |
|
|
| 98.6 | % |
|
| 98.6 | % |
|
| 2,205,414 |
|
|
| 22.05 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Illinois |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Hobson West Plaza |
| Garden Fresh |
| 1998 |
|
| 100.0 | % |
|
| 98,962 |
|
|
| 98.7 | % |
|
| 98.7 | % |
|
| 1,394,982 |
|
|
| 14.28 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Indiana |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32
Merrillville Plaza |
| Jo-Ann Fabrics, |
| 1998 |
|
| 100.0 | % |
|
| 235,926 |
|
|
| 78.8 | % |
|
| 92.8 | % |
|
| 2,711,118 |
|
|
| 14.57 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Michigan |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Bloomfield Town Square |
| HomeGoods, |
| 1998 |
|
| 100.0 | % |
|
| 234,951 |
|
|
| 99.4 | % |
|
| 99.4 | % |
|
| 4,263,415 |
|
|
| 18.26 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Delaware |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Town Center and Other |
| Lowes, Bed Bath & |
| 2003 |
|
| 100.0 | % |
|
| 800,063 |
|
|
| 94.0 | % |
|
| 94.0 | % |
|
| 12,980,977 |
|
|
| 17.26 |
|
Market Square Shopping Center |
| Trader Joe's, |
| 2003 |
|
| 100.0 | % |
|
| 102,047 |
|
|
| 100.0 | % |
|
| 100.0 | % |
|
| 3,270,246 |
|
|
| 32.05 |
|
Naamans Road |
| — |
| 2006 |
|
| 100.0 | % |
|
| 19,850 |
|
|
| 63.9 | % |
|
| 63.9 | % |
|
| 698,462 |
|
|
| 55.08 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Pennsylvania |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Mark Plaza |
| Kmart |
| 1993 |
|
| 100.0 | % |
|
| 106,856 |
|
|
| 100.0 | % |
|
| 100.0 | % |
|
| 246,274 |
|
|
| 2.30 |
|
Plaza 422 |
| Home Depot |
| 1993 |
|
| 100.0 | % |
|
| 156,279 |
|
|
| 100.0 | % |
|
| 100.0 | % |
|
| 909,901 |
|
|
| 5.82 |
|
Chestnut Hill |
| — |
| 2006 |
|
| 100.0 | % |
|
| 36,492 |
|
|
| 100.0 | % |
|
| 100.0 | % |
|
| 961,735 |
|
|
| 26.35 |
|
Abington Towne Center (f) |
| Target, TJ Maxx |
| 1998 |
|
| 100.0 | % |
|
| 216,871 |
|
|
| 100.0 | % |
|
| 100.0 | % |
|
| 1,314,679 |
|
|
| 22.19 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Total Suburban Properties |
|
|
|
|
|
|
|
|
| 4,004,480 |
|
|
| 93.7 | % |
|
| 95.7 | % |
| $ | 66,158,994 |
|
| $ | 18.83 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Acadia Share Total Suburban Properties |
|
|
|
|
|
|
|
|
| 3,845,536 |
|
|
| 94.1 | % |
|
| 95.9 | % |
| $ | 62,000,131 |
|
| $ | 18.36 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Total Core Properties |
|
|
|
|
|
|
|
|
| 5,582,184 |
|
|
| 92.1 | % |
|
| 94.4 | % |
| $ | 163,915,894 |
|
| $ | 33.40 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Acadia Share Total Core Properties |
|
|
|
|
|
|
|
|
| 5,211,255 |
|
|
| 92.7 | % |
|
| 94.9 | % |
| $ | 148,404,182 |
|
| $ | 32.29 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Acquired | Acadia's Interest | Gross Leasable Area (GLA) | In Place Occupancy | Leased Occupancy | Annualized Base Rent (ABR) | ABR/ Per Square Foot | ||||||||||||||||||
Property (a) | Key Tenants | |||||||||||||||||||||||
STREET AND URBAN RETAIL | ||||||||||||||||||||||||
Chicago Metro | ||||||||||||||||||||||||
664 N. Michigan Avenue | Tommy Bahama, Ann Taylor Loft | 2013 | 100.0 | % | 18,141 | 100.0 | % | 100.0 | % | $ | 4,597,909 | $ | 253.45 | |||||||||||
840 N. Michigan Avenue | H & M, Verizon Wireless | 2014 | 88.4 | % | 87,135 | 100.0 | % | 100.0 | % | 7,673,433 | 88.06 | |||||||||||||
Rush and Walton Streets Collection - 5 properties | Lululemon, BHLDN, Marc Jacobs | 2011/12 | 100.0 | % | 32,501 | 85.3 | % | 85.3 | % | 5,854,996 | 211.19 | |||||||||||||
651-671 West Diversey | Trader Joe's, Urban Outfitters | 2011 | 100.0 | % | 46,259 | 100.0 | % | 100.0 | % | 2,008,816 | 43.43 | |||||||||||||
Clark Street and W. Diversey Collection - 3 properties | Ann Taylor, Akira | 2011/12 | 100.0 | % | 23,531 | 91.3 | % | 91.3 | % | 1,244,789 | 57.94 | |||||||||||||
Halsted and Armitage Collection - 9 properties | Club Monaco | 2011/12 | 100.0 | % | 45,151 | 75.9 | % | 75.9 | % | 1,235,966 | 36.07 | |||||||||||||
North Lincoln Park Chicago Collection - 6 properties | Forever 21, Aldo, Carhartt | 2011/14 | 100.0 | % | 50,961 | 85.0 | % | 85.0 | % | 1,733,715 | 40.02 | |||||||||||||
State and Washington | H & M, Nordstrom Rack | 2016 | 100.0 | % | 78,819 | 100.0 | % | 100.0 | % | 2,969,482 | 37.67 | |||||||||||||
151 N. State Street | Walgreens | 2016 | 100.0 | % | 27,385 | 100.0 | % | 100.0 | % | 1,430,000 | 52.22 | |||||||||||||
North and Kingsbury | Old Navy, Pier 1 Imports | 2016 | 100.0 | % | 41,700 | 100.0 | % | 100.0 | % | 1,608,789 | 38.58 | |||||||||||||
Concord and Milwaukee | — | 2016 | 100.0 | % | 13,105 | 87.8 | % | 87.8 | % | 355,976 | 30.94 | |||||||||||||
California and Armitage | — | 2016 | 100.0 | % | 18,275 | 70.6 | % | 70.6 | % | 612,519 | 47.47 | |||||||||||||
Roosevelt Galleria | Petco, Vitamin Shoppe | 2015 | 100.0 | % | 37,995 | 63.4 | % | 63.4 | % | 701,982 | 29.14 | |||||||||||||
Sullivan Center | Target, DSW | 2016 | 100.0 | % | 176,181 | 98.6 | % | 100.0 | % | 6,444,079 | 37.10 |
Year Acquired | Acadia's Interest | Gross Leasable Area (GLA) | In Place Occupancy | Leased Occupancy | Annualized Base Rent (ABR) | ABR/ Per Square Foot | ||||||||||||||||||
Property (a) | Key Tenants | |||||||||||||||||||||||
New York Metro | ||||||||||||||||||||||||
Soho Collection - 4 properties | Paper Source, Kate Spade, 3x1 Jeans | 2011/14 | 100.0 | % | 12,511 | — | 82.4 | % | — | 82.4 | % | — | 3,157,177 | 306.25 | ||||||||||
5-7 East 17th Street | Union Fare | 2008 | 100.0 | % | 11,467 | 100.0 | % | 100.0 | % | 1,300,014 | 113.37 | |||||||||||||
200 West 54th Street | Stage Coach Tavern | 2007 | 100.0 | % | 5,777 | 77.8 | % | 77.8 | % | 1,941,814 | 432.04 | |||||||||||||
61 Main Street | — | 2014 | 100.0 | % | 3,400 | — | % | — | % | — | — | |||||||||||||
181 Main Street | TD Bank | 2012 | 100.0 | % | 11,350 | 100.0 | % | 100.0 | % | 870,274 | 76.68 | |||||||||||||
4401 White Plains Road | Walgreens | 2011 | 100.0 | % | 12,964 | 100.0 | % | 100.0 | % | 625,000 | 48.21 | |||||||||||||
Bartow Avenue | Mattress Firm | 2005 | 100.0 | % | 14,590 | 100.0 | % | 100.0 | % | 485,495 | 33.28 | |||||||||||||
239 Greenwich Avenue | Betteridge Jewelers | 1998 | 75.0 | % | 16,553 | 100.0 | % | 100.0 | % | 1,546,912 | 93.45 | |||||||||||||
252-256 Greenwich Avenue | Madewell, Jack Wills | 2014 | 100.0 | % | 7,986 | 71.0 | % | 71.0 | % | 1,027,271 | 181.17 | |||||||||||||
2914 Third Avenue | Planet Fitness | 2006 | 100.0 | % | 40,320 | 100.0 | % | 100.0 | % | 963,001 | 23.88 | |||||||||||||
868 Broadway | Dr. Martens | 2013 | 100.0 | % | 2,031 | 100.0 | % | 100.0 | % | 745,315 | 366.97 | |||||||||||||
313-315 Bowery (b) | John Varvatos, Patagonia | 2013 | 100.0 | % | 6,600 | 100.0 | % | 100.0 | % | 479,160 | 72.60 | |||||||||||||
120 West Broadway | HSBC Bank | 2013 | 100.0 | % | 13,838 | 100.0 | % | 100.0 | % | 2,255,814 | 163.02 | |||||||||||||
2520 Flatbush Avenue | Bob's Discount Furniture, Capital One | 2014 | 100.0 | % | 29,114 | 100.0 | % | 100.0 | % | 1,064,374 | 36.56 | |||||||||||||
991 Madison Avenue | Vera Wang, Perrin Paris | 2016 | 100.0 | % | 7,513 | 65.6 | % | 65.6 | % | 1,553,292 | 315.16 | |||||||||||||
Shops at Grand | Stop & Shop (Ahold) | 2014 | 100.0 | % | 99,975 | 92.7 | % | 92.7 | % | 2,873,056 | 31.00 | |||||||||||||
Gotham Plaza | Bank of America, Children's Place | 2016 | 49.0 | % | 26,182 | 68.6 | % | 68.6 | % | 1,064,361 | 59.26 | |||||||||||||
San Francisco Metro | ||||||||||||||||||||||||
City Center | City Target, Best Buy | 2015 | 100.0 | % | 204,648 | 98.1 | % | 98.1 | % | 7,759,488 | 38.65 | |||||||||||||
555 9th Street | Bed, Bath & Beyond, Nordstrom Rack | 2016 | 100.0 | % | 148,832 | 100.0 | % | 100.0 | % | 6,105,614 | 41.02 | |||||||||||||
District of Columbia Metro | ||||||||||||||||||||||||
1739-53 & 1801-03 Connecticut Avenue | Ruth Chris Steakhouse, TD Bank | 2012 | 100.0 | % | 20,669 | 100.0 | % | 100.0 | % | 1,266,138 | 61.26 | |||||||||||||
Rhode Island Place Shopping Center | Ross Dress for Less | 2012 | 100.0 | % | 57,667 | 45.5 | % | 93.4 | % | 1,246,065 | 47.49 | |||||||||||||
M Street and Wisconsin Corridor - 25 Properties (c) | Lululemon, North Face, Coach | 2011/16 | 25.4 | % | 241,182 | 91.5 | % | 91.5 | % | 15,168,759 | 68.74 | |||||||||||||
Boston Metro | ||||||||||||||||||||||||
330-340 River Street | Whole Foods | 2012 | 100.0 | % | 54,226 | 100.0 | % | 100.0 | % | 1,200,045 | 22.13 | |||||||||||||
165 Newbury Street | Starbucks | 2016 | 100.0 | % | 1,050 | 100.0 | % | 100.0 | % | 261,777 | 249.31 | |||||||||||||
Total Street and Urban Retail | 1,747,584 | 92.4 | % | 94.2 | % | 93,432,667 | 57.86 | |||||||||||||||||
Acadia Share Total Street and Urban Retail | 1,540,088 | 92.8 | % | 95.1 | % | 80,531,452 | 56.35 | |||||||||||||||||
SUBURBAN PROPERTIES | ||||||||||||||||||||||||
New Jersey | ||||||||||||||||||||||||
Elmwood Park Shopping Center | Walgreens, Acme | 1998 | 100.0 | % | 143,910 | 97.2 | % | 97.2 | % | 4,046,223 | 28.93 | |||||||||||||
Marketplace of Absecon | Rite Aid, Dollar Tree | 1998 | 100.0 | % | 104,556 | 90.3 | % | 90.3 | % | 1,362,152 | 14.43 | |||||||||||||
60 Orange Street | Home Depot | 2012 | 98.0 | % | 101,715 | 100.0 | % | 100.0 | % | 695,000 | 6.83 | |||||||||||||
New York | ||||||||||||||||||||||||
Village Commons Shopping Center | — | 1998 | 100.0 | % | 87,128 | 91.1 | % | 91.1 | % | 2,612,204 | 32.91 | |||||||||||||
Branch Plaza | LA Fitness, The Fresh Market | 1998 | 100.0 | % | 123,378 | 92.2 | % | 92.2 | % | 3,024,863 | 26.59 | |||||||||||||
Amboy Center | Stop & Shop (Ahold) | 2005 | 100.0 | % | 63,290 | 100.0 | % | 100.0 | % | 2,072,234 | 32.74 | |||||||||||||
Pacesetter Park Shopping Center | Stop & Shop (Ahold) | 1999 | 100.0 | % | 97,806 | 100.0 | % | 100.0 | % | 1,338,641 | 13.69 | |||||||||||||
LA Fitness | LA Fitness | 2007 | 100.0 | % | 55,000 | 100.0 | % | 100.0 | % | 1,485,287 | 27.01 | |||||||||||||
Crossroads Shopping Center | Home Goods, PetSmart, Kmart, DSW | 1998 | 49.0 | % | 311,958 | 94.6 | % | 94.6 | % | 6,834,714 | 23.16 | |||||||||||||
New Loudon Center | Price Chopper, Marshalls | 1993 | 100.0 | % | 255,673 | 100.0 | % | 100.0 | % | 2,153,484 | 8.42 | |||||||||||||
28 Jericho Turnpike | Kohl's | 2012 | 100.0 | % | 96,363 | 100.0 | % | 100.0 | % | 1,815,000 | 18.84 | |||||||||||||
Bedford Green | Shop Rite, CVS | 2014 | 100.0 | % | 90,589 | 84.9 | % | 84.9 | % | 2,495,885 | 32.45 | |||||||||||||
Connecticut | ||||||||||||||||||||||||
Town Line Plaza (d) | Wal-Mart, Stop & Shop (Ahold) | 1998 | 100.0 | % | 206,346 | 98.7 | % | 98.7 | % | 1,756,884 | 16.32 | |||||||||||||
Massachusetts | ||||||||||||||||||||||||
Methuen Shopping Center | Wal-Mart, Market Basket | 1998 | 100.0 | % | 130,021 | 100.0 | % | 100.0 | % | 1,360,858 | 10.47 | |||||||||||||
Crescent Plaza | Home Depot, Shaw's (Supervalu) | 1993 | 100.0 | % | 218,148 | 90.9 | % | 90.9 | % | 1,764,520 | 8.90 | |||||||||||||
201 Needham Street | Michael's | 2014 | 100.0 | % | 20,409 | 100.0 | % | 100.0 | % | 591,861 | 29.00 | |||||||||||||
163 Highland Avenue | Staples, Petco | 2015 | 100.0 | % | 40,505 | 100.0 | % | 100.0 | % | 1,311,747 | 32.38 | |||||||||||||
Vermont | ||||||||||||||||||||||||
The Gateway Shopping Center | Shaw's (Supervalu) | 1999 | 100.0 | % | 101,655 | 95.3 | % | 98.2 | % | 1,956,540 | 20.20 | |||||||||||||
Illinois | ||||||||||||||||||||||||
Hobson West Plaza | Garden Fresh Markets | 1998 | 100.0 | % | 99,137 | 83.0 | % | 85.8 | % | 897,118 | 10.90 |
33
Year Acquired | Acadia's Interest | Gross Leasable Area (GLA) | In Place Occupancy | Leased Occupancy | Annualized Base Rent (ABR) | ABR/ Per Square Foot | ||||||||||||||||||
Property (a) | Key Tenants | |||||||||||||||||||||||
Indiana | ||||||||||||||||||||||||
Merrillville Plaza | Jo-Ann Fabrics, TJ Maxx | 1998 | 100.0 | % | 236,087 | 96.8 | % | 96.8 | % | 3,350,975 | 14.66 | |||||||||||||
Michigan | ||||||||||||||||||||||||
Bloomfield Town Square | Best Buy, Home Goods, TJ Maxx, Dick's Sporting Goods | 1998 | 100.0 | % | 235,786 | 90.6 | % | 90.6 | % | 3,266,797 | 15.29 | |||||||||||||
Ohio | ||||||||||||||||||||||||
Mad River Station | Babies 'R' Us | 1999 | 100.0 | % | 123,335 | 77.1 | % | 82.7 | % | 1,255,391 | 13.20 | |||||||||||||
Delaware | ||||||||||||||||||||||||
Town Center | Lowes, Bed Bath & Beyond, Target, Dick's Sporting Goods | 2003 | 61.1 | % | 824,411 | 89.2 | % | 93.8 | % | 12,107,759 | 16.46 | |||||||||||||
Market Square Shopping Center | Trader Joe's, TJ Maxx | 2003 | 100.0 | % | 102,047 | 100.0 | % | 100.0 | % | 3,034,567 | 29.74 | |||||||||||||
Naamans Road | — | 2006 | 100.0 | % | 19,850 | 30.1 | % | 63.9 | % | 433,785 | 72.60 | |||||||||||||
Pennsylvania | ||||||||||||||||||||||||
Mark Plaza | Kmart | 1993 | 100.0 | % | 106,856 | 100.0 | % | 100.0 | % | 244,279 | 2.29 | |||||||||||||
Plaza 422 | Home Depot | 1993 | 100.0 | % | 156,279 | 100.0 | % | 100.0 | % | 850,978 | 5.45 | |||||||||||||
Route 6 Plaza | Kmart | 1994 | 100.0 | % | 175,589 | 100.0 | % | 100.0 | % | 1,327,169 | 7.56 | |||||||||||||
Chestnut Hill | — | 2006 | 100.0 | % | 37,646 | 100.0 | % | 100.0 | % | 953,589 | 25.33 | |||||||||||||
Abington Towne Center (e) | Target, TJ Maxx | 1998 | 100.0 | % | 216,278 | 94.5 | % | 94.5 | % | 914,927 | 16.50 | |||||||||||||
Total Suburban Properties | 4,581,751 | 93.9 | % | 95.1 | % | 67,315,431 | 16.57 | |||||||||||||||||
Acadia Share Total Suburban Properties | 4,099,922 | 94.3 | % | 95.3 | % | 59,105,909 | 16.30 | |||||||||||||||||
TOTAL CORE PROPERTIES | 6,329,335 | 93.5 | % | 94.9 | % | 160,748,098 | 28.30 | |||||||||||||||||
Acadia Share Total Core Properties | 5,640,010 | 93.9 | % | 95.3 | % | 139,637,361 | 27.61 |
The following table sets forth more specific information with respect to each of our Fund properties at December 31, 2017:
Property (a) |
| Key Tenants |
| Year |
| Acadia's |
|
| Gross Leasable |
|
| In Place |
|
| Leased |
|
| Annualized Base |
|
| ABR/Per |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Fund II Portfolio Detail |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
New York |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
City Point (b) |
| Primark, Target, Basis Schools, |
| 2007 |
|
| 58.1 | % |
|
| 541,070 |
|
|
| 64.8 | % |
|
| 83.0 | % |
| $ | 14,408,337 |
|
| $ | 41.07 |
|
Total - Fund II |
|
|
|
|
|
|
|
|
| 541,070 |
|
|
| 64.8 | % |
|
| 83.0 | % |
| $ | 14,408,337 |
|
| $ | 41.07 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Fund III Portfolio Detail |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
New York |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
640 Broadway |
| Swatch |
| 2012 |
|
| 24.5 | % |
|
| 4,637 |
|
|
| 91.6 | % |
|
| 91.6 | % |
| $ | 1,082,505 |
|
| $ | 254.89 |
|
Total - Fund III |
|
|
|
|
|
|
|
|
| 4,637 |
|
|
| 91.6 | % |
|
| 91.6 | % |
| $ | 1,082,505 |
|
| $ | 254.89 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Fund IV Portfolio Detail |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
New York |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
801 Madison Avenue |
| ─ |
| 2015 |
|
| 23.1 | % |
|
| 2,522 |
|
|
| — | % |
|
| — | % |
| $ | — |
|
| $ | — |
|
210 Bowery |
| ─ |
| 2012 |
|
| 23.1 | % |
|
| 2,538 |
|
|
| — | % |
|
| — | % |
|
| — |
|
|
| — |
|
27 East 61st Street |
| ─ |
| 2014 |
|
| 23.1 | % |
|
| 4,177 |
|
|
| — | % |
|
| — | % |
|
| — |
|
|
| — |
|
17 East 71st Street |
| The Row |
| 2014 |
|
| 23.1 | % |
|
| 8,432 |
|
|
| 82.2 | % |
|
| 82.2 | % |
|
| 1,878,913 |
|
|
| 271.05 |
|
1035 Third Avenue (c) |
| ─ |
| 2015 |
|
| 23.1 | % |
|
| 7,634 |
|
|
| 100.0 | % |
|
| 100.0 | % |
|
| 1,299,967 |
|
|
| 170.29 |
|
New Jersey |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Paramus Plaza |
| Ashley Furniture, Marshalls |
| 2013 |
|
| 11.6 | % |
|
| 153,494 |
|
|
| 100.0 | % |
|
| 100.0 | % |
|
| 3,258,849 |
|
|
| 21.23 |
|
Massachusetts |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Restaurants at Fort Point |
| ─ |
| 2016 |
|
| 23.1 | % |
|
| 15,711 |
|
|
| 100.0 | % |
|
| 100.0 | % |
|
| 1,050,946 |
|
|
| 66.89 |
|
Rhode Island |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
650 Bald Hill Road |
| Dick's Sporting Goods, |
| 2015 |
|
| 20.8 | % |
|
| 160,448 |
|
|
| 85.4 | % |
|
| 85.4 | % |
|
| 2,052,672 |
|
|
| 14.99 |
|
Delaware |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Eden Square |
| Giant Food, LA Fitness |
| 2014 |
|
| 22.8 | % |
|
| 229,171 |
|
|
| 90.9 | % |
|
| 96.3 | % |
|
| 3,249,992 |
|
|
| 15.60 |
|
Georgia |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Broughton Street Portfolio |
| H&M, Lululemon, |
| 2014 |
|
| 23.1 | % |
|
| 95,201 |
|
|
| 86.5 | % |
|
| 95.5 | % |
|
| 3,017,138 |
|
|
| 36.62 |
|
California |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
146 Geary Street |
| ─ |
| 2015 |
|
| 23.1 | % |
|
| 10,151 |
|
|
| — | % |
|
| — | % |
|
| — |
|
|
| — |
|
Union and Fillmore |
| Eileen Fisher, Bonobos |
| 2015 |
|
| 20.8 | % |
|
| 7,148 |
|
|
| 77.9 | % |
|
| 77.9 | % |
|
| 636,247 |
|
|
| 114 |
|
Total - Fund IV |
|
|
|
|
|
|
|
|
| 696,627 |
|
|
| 88.6 | % |
|
| 91.6 | % |
| $ | 16,444,724 |
|
| $ | 26.66 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Fund V Portfolio Detail |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
New Mexico |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Plaza Santa Fe |
| TJ Maxx, Best Buy, |
| 2017 |
|
| 20.1 | % |
|
| 224,152 |
|
|
| 97.3 | % |
|
| 99.4 | % |
| $ | 3,998,589 |
|
| $ | 18.33 |
|
Texas |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Wood Ridge Plaza |
| Kirkland's, Office Depot |
| 2022 |
|
| 18.1 | % |
|
| 211,674 |
|
|
| 84.5 | % |
|
| 87.3 | % |
|
| 3,787,696 |
|
| $ | 21.19 |
|
La Frontera Plaza |
| Kohl's, Hobby Lobby |
| 2022 |
|
| 18.1 | % |
|
| 534,430 |
|
|
| 88.7 | % |
|
| 94.3 | % |
|
| 6,532,919 |
|
| $ | 13.78 |
|
Michigan |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
New Towne Center |
| Kohl's, Jo-Ann's, DSW |
| 2017 |
|
| 20.1 | % |
|
| 190,530 |
|
|
| 100.0 | % |
|
| 100.0 | % |
|
| 2,344,851 |
|
| $ | 12.31 |
|
Fairlane Green |
| TJ Maxx, Michaels |
| 2017 |
|
| 20.1 | % |
|
| 270,187 |
|
|
| 95.2 | % |
|
| 95.2 | % |
|
| 5,051,602 |
|
| $ | 19.64 |
|
Maryland |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Frederick County (2 properties) |
| Kohl's, Best Buy, |
| 2019 |
|
| 18.1 | % |
|
| 530,816 |
|
|
| 88.5 | % |
|
| 94.8 | % |
|
| 6,915,187 |
|
|
| 14.72 |
|
Connecticut |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Tri-City Plaza |
| TJ Maxx, HomeGoods, ShopRite |
| 2019 |
|
| 18.1 | % |
|
| 302,888 |
|
|
| 88.5 | % |
|
| 91.5 | % |
|
| 3,812,027 |
|
|
| 14.22 |
|
New Jersey |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Midstate |
| ShopRite, Best Buy, DSW, PetSmart |
| 2021 |
|
| 20.1 | % |
|
| 385,116 |
|
|
| 83.8 | % |
|
| 88.8 | % |
|
| 6,223,830 |
|
|
| 19.28 |
|
New York |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Shoppes at South Hills |
| ShopRite, At Home, Ashley Furniture |
| 2022 |
|
| 18.1 | % |
|
| 512,218 |
|
|
| 74.3 | % |
|
| 74.3 | % |
|
| 4,375,401 |
|
|
| 11.50 |
|
Pennsylvania |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Monroe Marketplace |
| Kohl's, Dick's Sporting Goods, |
| 2021 |
|
| 20.1 | % |
|
| 371,652 |
|
|
| 100.0 | % |
|
| 100.0 | % |
|
| 4,243,262 |
|
|
| 11.42 |
|
Rhode Island |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
34
Lincoln Commons |
| Stop and Shop, Marshalls, |
| 2019 |
|
| 20.1 | % |
|
| 462,021 |
|
|
| 88.0 | % |
|
| 88.0 | % |
|
| 5,482,073 |
|
|
| 13.48 |
|
Virginia |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Landstown Commons |
| Best Buy, Burlington Coat Factory, |
| 2019 |
|
| 20.1 | % |
|
| 386,415 |
|
|
| 90.4 | % |
|
| 90.4 | % |
|
| 7,366,896 |
|
|
| 21.08 |
|
Florida |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Palm Coast Landing |
| TJ Maxx, PetSmart, |
| 2019 |
|
| 20.1 | % |
|
| 171,799 |
|
|
| 96.9 | % |
|
| 96.9 | % |
|
| 3,435,796 |
|
|
| 20.64 |
|
North Carolina |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Hickory Ridge |
| Kohl's, Best Buy, Dick's Sporting Goods |
| 2017 |
|
| 20.1 | % |
|
| 380,565 |
|
|
| 100.0 | % |
|
| 100.0 | % |
|
| 4,775,096 |
|
|
| 12.55 |
|
Alabama |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Trussville Promenade |
| Wal-Mart, Regal Cinemas |
| 2018 |
|
| 20.1 | % |
|
| 463,681 |
|
|
| 95.6 | % |
|
| 95.6 | % |
|
| 4,491,844 |
|
|
| 10.14 |
|
Georgia |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Canton Marketplace |
| Dick's Sporting Goods, TJ Maxx, Best Buy |
| 2021 |
|
| 20.1 | % |
|
| 351,988 |
|
|
| 89.3 | % |
|
| 94.4 | % |
|
| 5,434,763 |
|
|
| 17.29 |
|
Hiram Pavilion |
| Kohl's, HomeGoods |
| 2018 |
|
| 20.1 | % |
|
| 362,675 |
|
|
| 99.4 | % |
|
| 99.4 | % |
|
| 4,563,956 |
|
|
| 12.66 |
|
California |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Elk Grove Commons |
| Kohl's, HomeGoods |
| 2018 |
|
| 20.1 | % |
|
| 242,078 |
|
|
| 98.4 | % |
|
| 99.1 | % |
|
| 5,076,275 |
|
|
| 21.31 |
|
Utah |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Family Center at Riverdale |
| Target, Sportsman's |
| 2019 |
|
| 18.0 | % |
|
| 372,475 |
|
|
| 85.9 | % |
|
| 97.9 | % |
|
| 3,355,288 |
|
|
| 10.49 |
|
Total - Fund V |
|
|
|
|
|
|
|
|
| 6,727,360 |
|
|
| 90.8 | % |
|
| 93.3 | % |
| $ | 91,267,351 |
|
| $ | 14.94 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
TOTAL FUND PROPERTIES |
|
|
|
|
|
|
|
|
| 7,969,694 |
|
|
| 88.9 | % |
|
| 92.5 | % |
| $ | 123,202,917 |
|
| $ | 17.40 |
| |
Acadia Share of Total Fund Properties |
|
|
|
|
|
|
|
|
| 1,756,761 |
|
|
| 86.1 | % |
|
| 91.4 | % |
| $ | 29,754,638 |
|
| $ | 19.68 |
|
Year Acquired | Acadia's Interest | Gross Leasable Area (GLA) | In Place Occupancy | Leased Occupancy | Annualized Base Rent (ABR) | ABR/ Per Square Foot | |||||||||||||||
Property (a) | Key Tenants | ||||||||||||||||||||
Fund II Portfolio Detail | |||||||||||||||||||||
New York | |||||||||||||||||||||
City Point - Phase I and II | — | 2007 | 26.7 | % | 475,000 | 72.6 | % | 80.1 | % | $ | 9,384,250 | $ | 27.21 | ||||||||
Total - Fund II | 475,000 | 72.6 | % | 80.1 | % | $ | 9,384,250 | $ | 27.21 | ||||||||||||
Fund III Portfolio Detail | |||||||||||||||||||||
New York | |||||||||||||||||||||
654 Broadway | — | 2011 | 24.5 | % | 2,896 | — | % | — | % | $ | — | $ | — | ||||||||
640 Broadway | Swatch | 2012 | 15.5 | % | 4,247 | 70.6 | % | 70.6 | % | 975,313 | 325.28 | ||||||||||
3104 M Street | — | 2012 | 19.6 | % | 3,608 | — | % | — | % | — | — | ||||||||||
Nostrand Avenue | — | 2013 | 24.5 | % | 42,628 | 87.3 | % | 96.8 | % | 1,738,116 | 46.71 | ||||||||||
Total - Fund III | 53,379 | 75.3 | % | 82.9 | % | $ | 2,713,429 | $ | 67.51 | ||||||||||||
35
Year Acquired | Acadia's Interest | Gross Leasable Area (GLA) | In Place Occupancy | Leased Occupancy | Annualized Base Rent (ABR) | ABR/ Per Square Foot | |||||||||||||||
Property (a) | Key Tenants | ||||||||||||||||||||
Fund IV Portfolio Detail | |||||||||||||||||||||
New York | |||||||||||||||||||||
801 Madison Avenue | — | 2015 | 23.1 | % | 2,625 | — | % | — | % | $ | — | $ | — | ||||||||
210 Bowery | — | 2012 | 23.1 | % | 2,300 | — | % | — | % | — | — | ||||||||||
27 East 61st Street | — | 2014 | 23.1 | % | 4,177 | — | % | — | % | — | — | ||||||||||
17 East 71st Street | The Row | 2014 | 23.1 | % | 8,432 | 100.0 | % | 100.0 | % | 1,988,159 | 235.79 | ||||||||||
1035 Third Avenue (b) | — | 2015 | 23.1 | % | 7,617 | 67.1 | % | 67.1 | % | 982,035 | 192.14 | ||||||||||
Colonie Plaza | Price Chopper, Big Lots | 2016 | 23.1 | % | 153,483 | 96.9 | % | 96.9 | % | 1,680,527 | 11.30 | ||||||||||
New Jersey | |||||||||||||||||||||
Paramus Plaza | Babies R Us, Ashley Furniture | 2013 | 11.6 | % | 152,509 | 88.3 | % | 88.3 | % | 2,385,448 | 17.71 | ||||||||||
Massachusetts | |||||||||||||||||||||
Restaurants at Fort Point | — | 2016 | 23.1 | % | 15,711 | 100.0 | % | 100.0 | % | 329,155 | 20.95 | ||||||||||
Maine | |||||||||||||||||||||
Airport Mall | Hannaford, Marshalls | 2016 | 23.1 | % | 221,830 | 89.2 | % | 89.2 | % | 1,272,679 | 6.43 | ||||||||||
Wells Plaza | Reny's, Dollar Tree | 2016 | 23.1 | % | 90,434 | 92.4 | % | 94.4 | % | 680,143 | 8.14 | ||||||||||
Shaw's Plaza (Waterville) | Shaw's | 2016 | 23.1 | % | 119,015 | 100.0 | % | 100.0 | % | 1,407,316 | 11.82 | ||||||||||
Shaw's Plaza (Windham) | Shaw's | 2017 | 23.1 | % | 124,330 | 86.5 | % | 86.5 | % | 1,008,393 | 9.38 | ||||||||||
JFK Plaza | Hannaford, TJ Maxx | 2016 | 23.1 | % | 151,107 | 78.0 | % | 78.0 | % | 761,510 | 6.46 | ||||||||||
Pennsylvania | |||||||||||||||||||||
Dauphin Plaza | Price Rite, Ashley Furniture | 2016 | 23.1 | % | 205,727 | 84.2 | % | 84.2 | % | 1,656,365 | 9.56 | ||||||||||
Mayfair Shopping Center | — | 2016 | 23.1 | % | 115,411 | 62.4 | % | 62.4 | % | 1,365,002 | 18.95 | ||||||||||
Virginia | |||||||||||||||||||||
Promenade at Manassas | Home Depot | 2013 | 22.8 | % | 265,442 | 86.4 | % | 86.4 | % | 2,978,427 | 12.99 | ||||||||||
Lake Montclair | Food Lion | 2013 | 23.1 | % | 105,832 | 98.5 | % | 98.5 | % | 2,009,651 | 19.28 | ||||||||||
Delaware | |||||||||||||||||||||
Eden Square | Giant Food, LA Fitness | 2014 | 22.8 | % | 231,044 | 73.9 | % | 88.9 | % | 2,432,867 | 14.25 | ||||||||||
Illinois | |||||||||||||||||||||
938 W. North Avenue | Sephora | 2013 | 23.1 | % | 33,228 | 16.1 | % | 16.1 | % | 326,350 | 61.00 | ||||||||||
Lincoln Place | Kohl's, Marshall's | 2017 | 23.1 | % | 271,866 | 91.2 | % | 91.2 | % | 2,884,796 | 11.63 | ||||||||||
Georgia | |||||||||||||||||||||
Broughton Street Portfolio - 19 properties | J. Crew, L'Occitane, Lululemon, Michael Kors | 2014 | 11.6 | % | 115,640 | 76.3 | % | 76.3 | % | 3,441,130 | 39.00 | ||||||||||
North Carolina | |||||||||||||||||||||
Wake Forest Crossing | — | 2016 | 23.1 | % | 203,131 | 98.5 | % | 98.5 | % | 2,955,442 | 14.77 | ||||||||||
California | |||||||||||||||||||||
146 Geary Street | — | 2015 | 23.1 | % | 11,436 | — | % | — | % | — | — | ||||||||||
Union and Fillmore Collection - 4 properties | — | 2015 | 20.8 | % | 10,048 | 71.1 | % | 71.1 | % | 689,790 | 96.55 | ||||||||||
Total - Fund IV | 2,622,375 | 85.3 | % | 86.7 | % | $ | 33,235,185 | $ | 14.86 | ||||||||||||
Fund V Portfolio Detail | |||||||||||||||||||||
New Mexico | |||||||||||||||||||||
Plaza Santa Fe | TJ Maxx, Best Buy, Ross Dress for Less | 2017 | 20.1 | % | 224,223 | 88.3 | % | 97.3 | % | $ | 3,401,093 | $ | 17.18 | ||||||||
Michigan | |||||||||||||||||||||
New Towne Plaza | Kohl's, Jo-Ann's, DSW | 2017 | 20.1 | % | 190,530 | 96.3 | % | 96.3 | % | 2,163,338 | 11.79 | ||||||||||
Fairlane Green | TJ Maxx, Bed Bath & Beyond, Michaels | 2017 | 20.1 | % | 252,904 | 100.0 | % | 100.0 | % | 5,225,804 | 20.66 | ||||||||||
North Carolina | |||||||||||||||||||||
Hickory Ridge | Kohl's, Best Buy, Dick's | 2017 | 20.1 | % | 380,565 | 98.7 | % | 98.7 | % | 4,140,630 | 11.02 | ||||||||||
Total - Fund V | 1,048,222 | 96.4 | % | 98.3 | % | $ | 14,930,865 | $ | 14.78 | ||||||||||||
TOTAL FUND PROPERTIES | 4,198,976 | 86.5 | % | 88.8 | % | $ | 60,263,729 | $ | 16.59 | ||||||||||||
Acadia Share of Total Fund Properties | 923,247 | 86.3 | % | 88.5 | % | $ | 13,058,882 | $ | 16.39 |
Major Tenants
No individual retail tenant accounted for more than 5.3%5.1% of total Core Portfolio and Fund base rents for the year ended December 31, 2017,2022 or occupied more than 6.5%7.3% of total Core Portfolio and Fund leased GLA as of December 31, 2017.2022. The following table sets forth certain information for theour 20 largest retail tenants by base rent for leases in place as of December 31, 2017.2022. The amounts below include our pro-rata share of GLA and annualized base rent for the Operating Partnership’s partial ownership interest in properties including the Funds (GLA and Annualized Base Rent in thousands):
|
|
|
|
|
|
|
|
|
|
| Percentage of Total |
| ||||||||
Retail Tenant |
| Number of |
|
| Total GLA |
|
| Annualized |
|
| Total |
|
| Annualized |
| |||||
Target |
|
| 5 |
|
|
| 512 |
|
| $ | 9,036 |
|
|
| 7.3 | % |
|
| 5.1 | % |
H&M |
|
| 2 |
|
|
| 60 |
|
|
| 5,144 |
|
|
| 0.9 | % |
|
| 2.9 | % |
Royal Ahold (b) |
|
| 6 |
|
|
| 198 |
|
|
| 4,047 |
|
|
| 2.8 | % |
|
| 2.3 | % |
TJX Companies (c) |
|
| 26 |
|
|
| 326 |
|
|
| 3,857 |
|
|
| 4.7 | % |
|
| 2.2 | % |
Walgreens (d) |
|
| 6 |
|
|
| 85 |
|
|
| 3,794 |
|
|
| 1.2 | % |
|
| 2.1 | % |
PetSmart, Inc. |
|
| 13 |
|
|
| 121 |
|
|
| 3,756 |
|
|
| 1.7 | % |
|
| 2.1 | % |
Bed, Bath, and Beyond (e) |
|
| 5 |
|
|
| 143 |
|
|
| 3,500 |
|
|
| 2.1 | % |
|
| 2.0 | % |
Trader Joe's |
|
| 5 |
|
|
| 54 |
|
|
| 3,355 |
|
|
| 0.8 | % |
|
| 1.9 | % |
Kohl's |
|
| 8 |
|
|
| 212 |
|
|
| 2,859 |
|
|
| 3.0 | % |
|
| 1.6 | % |
Verizon |
|
| 6 |
|
|
| 28 |
|
|
| 2,844 |
|
|
| 0.4 | % |
|
| 1.6 | % |
Lululemon |
|
| 4 |
|
|
| 11 |
|
|
| 2,767 |
|
|
| 0.2 | % |
|
| 1.6 | % |
Gap(f) |
|
| 9 |
|
|
| 66 |
|
|
| 2,498 |
|
|
| 0.9 | % |
|
| 1.4 | % |
Fast Retailing (g) |
|
| 2 |
|
|
| 32 |
|
|
| 2,388 |
|
|
| 0.5 | % |
|
| 1.3 | % |
Ulta Salon Cosmetic & Fragrance |
|
| 14 |
|
|
| 54 |
|
|
| 2,088 |
|
|
| 0.8 | % |
|
| 1.2 | % |
Dick's Sporting Goods, Inc |
|
| 6 |
|
|
| 141 |
|
|
| 2,086 |
|
|
| 2.0 | % |
|
| 1.2 | % |
Albertsons Companies(h) |
|
| 2 |
|
|
| 123 |
|
|
| 1,981 |
|
|
| 1.8 | % |
|
| 1.1 | % |
Bob's Discount Furniture |
|
| 3 |
|
|
| 75 |
|
|
| 1,945 |
|
|
| 1.1 | % |
|
| 1.1 | % |
Wakefern Food Corporation (i) |
|
| 4 |
|
|
| 80 |
|
|
| 1,699 |
|
|
| 1.1 | % |
|
| 1.0 | % |
Tapestry (j) |
|
| 2 |
|
|
| 4 |
|
|
| 1,696 |
|
|
| 0.1 | % |
|
| 1.0 | % |
Watches of Switzerland (k) |
|
| 2 |
|
|
| 14 |
|
|
| 1,625 |
|
|
| 0.2 | % |
|
| 0.9 | % |
Total |
|
| 130 |
|
|
| 2,339 |
|
|
| 62,965 |
|
|
| 33.6 | % |
|
| 35.5 | % |
Number of Stores in Portfolio (a) | Percentage of Total Represented by Retail Tenant | |||||||||||||||
Retail Tenant | Total GLA | Annualized Base Rent (a) | Total Portfolio GLA | Annualized Base Rent | ||||||||||||
Target | 3 | 367 | $ | 7,424 | 6.5 | % | 5.3 | % | ||||||||
H & M | 2 | 81 | 5,310 | 1.4 | % | 3.8 | % | |||||||||
Royal Ahold (b) | 4 | 208 | 3,653 | 3.7 | % | 2.6 | % | |||||||||
Walgreens | 5 | 78 | 3,599 | 1.4 | % | 2.6 | % | |||||||||
Best Buy (c) | 2 | 87 | 3,595 | 1.5 | % | 2.6 | % | |||||||||
Nordstrom, Inc. | 2 | 89 | 3,339 | 1.6 | % | 2.4 | % | |||||||||
Albertsons Companies (d) | 3 | 171 | 3,304 | 3.0 | % | 2.4 | % | |||||||||
Bed, Bath, and Beyond (e) | 3 | 115 | 2,797 | 2.0 | % | 2.0 | % | |||||||||
Ascena Retail Group (f) | 5 | 23 | 2,567 | 0.4 | % | 1.8 | % | |||||||||
LA Fitness International LLC | 2 | 100 | 2,525 | 1.8 | % | 1.8 | % | |||||||||
Lululemon | 2 | 8 | 2,268 | 0.1 | % | 1.6 | % | |||||||||
Trader Joe's | 3 | 41 | 2,226 | 0.7 | % | 1.6 | % | |||||||||
TJX Companies (g) | 7 | 208 | 2,095 | 3.7 | % | 1.5 | % | |||||||||
Home Depot | 3 | 313 | 1,894 | 5.5 | % | 1.4 | % | |||||||||
Gap | 3 | 37 | 1,747 | 0.7 | % | 1.3 | % | |||||||||
Tapestry 8 | 2 | 4 | 1,463 | 0.1 | % | 1.0 | % | |||||||||
JP Morgan Chase | 7 | 29 | 1,405 | 0.5 | % | 1.0 | % | |||||||||
Ulta Salon Cosmetic & Fragrance | 3 | 31 | 1,395 | 0.6 | % | 1.0 | % | |||||||||
DSW | 2 | 36 | 1,319 | 0.6 | % | 0.9 | % | |||||||||
Mattress Firm | 8 | 39 | 1,289 | 0.7 | % | 0.9 | % | |||||||||
Total | 71 | 2,065 | $ | 55,214 | 36.6 | % | 39.5 | % |
36
Lease Expirations
The following tables show scheduled lease expirations on a pro rata basis for retail tenants in place as of December 31, 2017,2022, assuming that none of the tenants will exercise renewal options (GLA and Annualized Base Rent in thousands):
Core Portfolio
|
|
|
|
| Annualized Base Rent (a, b) |
|
| GLA |
| |||||||||||
Leases Maturing in |
| Number of |
|
| Current |
|
| Percentage |
|
| Square |
|
| Percentage |
| |||||
Month to Month |
|
| 4 |
|
| $ | 156 |
|
|
| 0.1 | % |
|
| 5 |
|
|
| 0.1 | % |
2023 |
|
| 51 |
|
|
| 13,088 |
|
|
| 8.8 | % |
|
| 292 |
|
|
| 6.4 | % |
2024 |
|
| 66 |
|
|
| 16,024 |
|
|
| 10.8 | % |
|
| 642 |
|
|
| 14.0 | % |
2025 |
|
| 67 |
|
|
| 21,350 |
|
|
| 14.4 | % |
|
| 602 |
|
|
| 13.2 | % |
2026 |
|
| 71 |
|
|
| 17,650 |
|
|
| 11.9 | % |
|
| 616 |
|
|
| 13.5 | % |
2027 |
|
| 56 |
|
|
| 10,513 |
|
|
| 7.1 | % |
|
| 263 |
|
|
| 5.7 | % |
2028 |
|
| 57 |
|
|
| 20,087 |
|
|
| 13.5 | % |
|
| 707 |
|
|
| 15.4 | % |
2029 |
|
| 38 |
|
|
| 9,910 |
|
|
| 6.7 | % |
|
| 373 |
|
|
| 8.1 | % |
2030 |
|
| 19 |
|
|
| 5,055 |
|
|
| 3.4 | % |
|
| 96 |
|
|
| 2.1 | % |
2031 |
|
| 26 |
|
|
| 6,161 |
|
|
| 4.2 | % |
|
| 176 |
|
|
| 3.8 | % |
2032 |
|
| 46 |
|
|
| 10,009 |
|
|
| 6.7 | % |
|
| 221 |
|
|
| 4.8 | % |
Thereafter |
|
| 36 |
|
|
| 18,401 |
|
|
| 12.4 | % |
|
| 585 |
|
|
| 12.9 | % |
Total |
|
| 537 |
|
| $ | 148,404 |
|
|
| 100.0 | % |
|
| 4,578 |
|
|
| 100.0 | % |
Funds
|
|
|
|
| Annualized Base Rent (a, b) |
|
| GLA |
| |||||||||||
Leases Maturing in |
| Number of |
|
| Current |
|
| Percentage |
|
| Square |
|
| Percentage |
| |||||
Month to Month |
|
| 7 |
|
| $ | 84 |
|
|
| 0.3 | % |
|
| 5 |
|
|
| 0.3 | % |
2023 |
|
| 51 |
|
|
| 1,200 |
|
|
| 4.0 | % |
|
| 61 |
|
|
| 4.1 | % |
2024 |
|
| 87 |
|
|
| 2,449 |
|
|
| 8.2 | % |
|
| 163 |
|
|
| 10.8 | % |
2025 |
|
| 90 |
|
|
| 3,392 |
|
|
| 11.4 | % |
|
| 191 |
|
|
| 12.7 | % |
2026 |
|
| 95 |
|
|
| 2,588 |
|
|
| 8.7 | % |
|
| 128 |
|
|
| 8.5 | % |
2027 |
|
| 81 |
|
|
| 3,330 |
|
|
| 11.2 | % |
|
| 164 |
|
|
| 10.8 | % |
2028 |
|
| 52 |
|
|
| 2,243 |
|
|
| 7.5 | % |
|
| 121 |
|
|
| 8.0 | % |
2029 |
|
| 36 |
|
|
| 1,671 |
|
|
| 5.6 | % |
|
| 115 |
|
|
| 7.6 | % |
2030 |
|
| 30 |
|
|
| 1,118 |
|
|
| 3.8 | % |
|
| 78 |
|
|
| 5.1 | % |
2031 |
|
| 38 |
|
|
| 1,515 |
|
|
| 5.1 | % |
|
| 91 |
|
|
| 6.0 | % |
2032 |
|
| 44 |
|
|
| 2,755 |
|
|
| 9.3 | % |
|
| 175 |
|
|
| 11.5 | % |
Thereafter |
|
| 32 |
|
|
| 7,410 |
|
|
| 24.9 | % |
|
| 220 |
|
|
| 14.6 | % |
Total |
|
| 643 |
|
| $ | 29,755 |
|
|
| 100.0 | % |
|
| 1,512 |
|
|
| 100.0 | % |
Annualized Base Rent (a, b) | GLA | |||||||||||||||
Leases Maturing in | Number of Leases | Current Annual Rent | Percentage of Total | Square Feet | Percentage of Total | |||||||||||
Month to Month | 8 | $ | 525 | 0.4 | % | 28 | 0.4 | % | ||||||||
2018 | 55 | 9,734 | 7.0 | % | 313 | 2.9 | % | |||||||||
2019 | 56 | 9,391 | 6.7 | % | 508 | 10.1 | % | |||||||||
2020 | 58 | 12,592 | 9.0 | % | 595 | 9.7 | % | |||||||||
2021 | 78 | 17,065 | 12.2 | % | 837 | 10.8 | % | |||||||||
2022 | 56 | 12,320 | 8.8 | % | 426 | 15.7 | % | |||||||||
2023 | 44 | 16,588 | 11.9 | % | 517 | 8.4 | % | |||||||||
2024 | 44 | 15,202 | 10.9 | % | 485 | 6.9 | % | |||||||||
2025 | 41 | 11,446 | 8.2 | % | 262 | 9.4 | % | |||||||||
2026 | 30 | 5,203 | 3.7 | % | 133 | 5.3 | % | |||||||||
2027 | 27 | 5,270 | 3.8 | % | 172 | 2.6 | % | |||||||||
Thereafter | 38 | 24,301 | 17.4 | % | 763 | 17.8 | % | |||||||||
Total | 535 | $ | 139,637 | 100.0 | % | 5,039 | 100.0 | % |
Annualized Base Rent (a, b) | GLA | |||||||||||||||
Leases Maturing in | Number of Leases | Current Annual Rent | Percentage of Total | Square Feet | Percentage of Total | |||||||||||
Month to Month | 8 | $ | 63 | 0.6 | % | 4 | 0.5 | % | ||||||||
2018 | 41 | 604 | 4.6 | % | 37 | 4.6 | % | |||||||||
2019 | 33 | 545 | 5.7 | % | 45 | 4.2 | % | |||||||||
2020 | 44 | 1,205 | 13.8 | % | 110 | 9.2 | % | |||||||||
2021 | 68 | 2,031 | 16.9 | % | 134 | 15.6 | % | |||||||||
2022 | 43 | 1,266 | 9.9 | % | 78 | 9.7 | % | |||||||||
2023 | 30 | 842 | 8.6 | % | 69 | 6.4 | % | |||||||||
2024 | 18 | 956 | 5.9 | % | 47 | 7.3 | % | |||||||||
2025 | 20 | 769 | 2.9 | % | 23 | 5.9 | % | |||||||||
2026 | 27 | 782 | 5.1 | % | 40 | 6.0 | % | |||||||||
2027 | 20 | 824 | 4.4 | % | 35 | 6.3 | % | |||||||||
Thereafter | 21 | 3,172 | 21.6 | % | 172 | 24.3 | % | |||||||||
Total | 373 | $ | 13,059 | 100.0 | % | 794 | 100.0 | % |
37
Geographic Concentrations
The following table summarizes our operating retail properties by region, excluding redevelopment properties, as of December 31, 2017.2022. The amounts below include our pro-rata share of GLA and annualized base rent for the Operating Partnership’s partial ownership interest in properties, including the Funds (GLA and Annualized Base Rent in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
| Percentage of Total |
| |||||||||
Region |
| GLA (a,c) |
|
| % Occupied (b) |
|
| Annualized |
|
| Annualized Base |
|
| GLA |
|
| Annualized |
| ||||||
Core Portfolio: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
New York Metro (d) |
|
| 1,497 |
|
|
| 91.1 | % |
| $ | 56,725 |
|
| $ | 41.57 |
|
|
| 28.7 | % |
|
| 38.2 | % |
Chicago Metro |
|
| 684 |
|
|
| 85.9 | % |
|
| 36,481 |
|
|
| 62.10 |
|
|
| 13.1 | % |
|
| 24.6 | % |
Mid-Atlantic |
|
| 1,438 |
|
|
| 96.2 | % |
|
| 20,382 |
|
|
| 16.55 |
|
|
| 27.6 | % |
|
| 13.7 | % |
New England |
|
| 717 |
|
|
| 97.8 | % |
|
| 9,988 |
|
|
| 16.46 |
|
|
| 13.8 | % |
|
| 6.7 | % |
Washington D.C. Metro |
|
| 159 |
|
|
| 90.1 | % |
|
| 8,129 |
|
|
| 56.89 |
|
|
| 3.1 | % |
|
| 5.5 | % |
Midwest |
|
| 570 |
|
|
| 90.8 | % |
|
| 8,370 |
|
|
| 16.18 |
|
|
| 10.9 | % |
|
| 5.6 | % |
Los Angeles Metro |
|
| 24 |
|
|
| 100.0 | % |
|
| 3,950 |
|
|
| 166.28 |
|
|
| 0.5 | % |
|
| 2.7 | % |
Dallas Metro |
|
| 122 |
|
|
| 91.8 | % |
|
| 4,379 |
|
|
| 39.20 |
|
|
| 2.3 | % |
|
| 3.0 | % |
Total Core Operating Properties |
|
| 5,211 |
|
|
| 92.7 | % |
| $ | 148,404 |
|
| $ | 32.29 |
|
|
| 100.0 | % |
|
| 100.0 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Fund Portfolio: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Southeast |
|
| 448 |
|
|
| 94.7 | % |
| $ | 6,741 |
|
| $ | 15.90 |
|
|
| 25.6 | % |
|
| 22.6 | % |
Northeast |
|
| 526 |
|
|
| 86.7 | % |
|
| 6,609 |
|
|
| 14.50 |
|
|
| 29.9 | % |
|
| 22.2 | % |
New York Metro |
|
| 339 |
|
|
| 66.7 | % |
|
| 9,749 |
|
|
| 43.13 |
|
|
| 19.3 | % |
|
| 32.8 | % |
West |
|
| 116 |
|
|
| 91.1 | % |
|
| 1,624 |
|
|
| 15.41 |
|
|
| 6.6 | % |
|
| 5.5 | % |
Midwest |
|
| 92 |
|
|
| 97.2 | % |
|
| 1,487 |
|
|
| 16.52 |
|
|
| 5.2 | % |
|
| 5.0 | % |
Mid-Atlantic |
|
| 52 |
|
|
| 90.9 | % |
|
| 741 |
|
|
| 15.60 |
|
|
| 3.0 | % |
|
| 2.5 | % |
Southwest |
|
| 180 |
|
|
| 90.0 | % |
|
| 2,672 |
|
|
| 16.49 |
|
|
| 10.2 | % |
|
| 9.0 | % |
San Francisco Metro |
|
| 4 |
|
|
| 30.2 | % |
|
| 132 |
|
|
| 114.33 |
|
|
| 0.2 | % |
|
| 0.4 | % |
Total Fund Operating Properties |
|
| 1,757 |
|
|
| 86.1 | % |
| $ | 29,755 |
|
| $ | 19.68 |
|
|
| 100.0 | % |
|
| 100.0 | % |
Percentage of Total Represented by Region | ||||||||||||||||||||
Region | GLA (a,c) | % Occupied (b) | Annualized Base Rent (b,c) | Annualized Base Rent per Occupied Square Foot (c) | GLA | Annualized Base Rent | ||||||||||||||
Core Portfolio: | ||||||||||||||||||||
Operating Properties: | ||||||||||||||||||||
New York Metro | 1,675 | 87 | % | $ | 47,459 | $ | 32.53 | 30 | % | 34 | % | |||||||||
New England | 772 | 96 | % | 10,204 | 15.66 | 14 | % | 7 | % | |||||||||||
Chicago Metro | 687 | 93 | % | 37,583 | 58.88 | 12 | % | 27 | % | |||||||||||
Midwest | 694 | 89 | % | 8,770 | 14.16 | 12 | % | 6 | % | |||||||||||
Washington D.C. Metro | 140 | 75 | % | 6,600 | 63.36 | 2 | % | 5 | % | |||||||||||
San Francisco Metro | 354 | 99 | % | 13,865 | 39.68 | 6 | % | 10 | % | |||||||||||
Mid-Atlantic | 1,318 | 94 | % | 15,157 | 13.91 | 24 | % | 11 | % | |||||||||||
Total Core Operating Properties | 5,640 | 94 | % | $ | 139,638 | $ | 27.61 | 100 | % | 100 | % | |||||||||
Fund Portfolio: | ||||||||||||||||||||
Operating Properties: | ||||||||||||||||||||
New York Metro | 198 | 78 | % | $ | 4,434 | $ | 28.66 | 21 | % | 34 | % | |||||||||
San Francisco Metro | 5 | 31 | % | 143 | 96.56 | 1 | % | 1 | % | |||||||||||
Chicago Metro | 70 | 83 | % | 742 | 12.68 | 8 | % | 6 | % | |||||||||||
Northeast | 241 | 85 | % | 1,959 | 9.56 | 26 | % | 15 | % | |||||||||||
Midwest | 89 | 98 | % | 1,485 | 16.93 | 10 | % | 11 | % | |||||||||||
Southeast | 137 | 96 | % | 1,914 | 14.51 | 15 | % | 15 | % | |||||||||||
Southwest | 45 | 88 | % | 684 | 17.18 | 5 | % | 5 | % | |||||||||||
Mid-Atlantic | 138 | 84 | % | 1,698 | 14.72 | 14 | % | 13 | % | |||||||||||
Total Fund Operating Properties | 923 | 86 | % | $ | 13,059 | $ | 16.39 | 100 | % | 100 | % |
38
Development and Redevelopment Activities
As part of our strategy, we invest in retail real estate assets that may require significant development. As of December 31, 2017,2022, we had 6the following development or redevelopment projects of which two are under construction and four are in various stages of the development process.
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Development: |
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CORE |
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1238 Wisconsin |
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| 80.0 | % |
| Washington DC |
| 2023 |
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| 29,000 |
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| 12%/70% |
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| Wolford, Everbody |
| Redevelopment/addition to existing building with ground level retail, upper floor office and residential units upon completion. Discretionary spend upon securing tenant(s) |
| $ | 18.3 |
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| $ | 14.4 |
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| $ | 15.2 |
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| $ | 32.7 |
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| $ | 33.5 |
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Henderson - Development 1 & 2 |
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| 100.0 | % |
| Dallas, TX |
| TBD |
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| 160,000 |
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| — | % |
| TBD |
| Ground up development for mixed-use street-level retail spaces and upper level office spaces. |
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| 10.5 |
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FUND III |
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Broad Hollow Commons |
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| 100.0 | % |
| Farmingdale, NY |
| TBD |
| TBD |
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| — | % |
| TBD |
| Discretionary spend upon securing necessary approvals and tenant(s) for lease up |
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| 25.9 |
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FUND IV |
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717 N. Michigan Avenue |
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| 100.0 | % |
| Chicago, IL |
| TBD |
| TBD |
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| 14%/26% |
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| Alo Yoga |
| Discretionary spend upon securing tenant(s) for lease up |
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| 116.6 |
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| $ | 171.3 |
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Major Redevelopment: |
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City Center |
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| 100.0 | % |
| San Francisco, CA |
| 2024 |
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| 241,000 |
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| 75%/99% |
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| Target, Whole Foods, PetSmart |
| Ground up development of pad sites and street level retail and re-tenanting/redevelopment for Whole Foods |
| $ | 203.3 |
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| $ | 210.0 |
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555 9th Street |
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| 100.0 | % |
| San Francisco, CA |
| TBD |
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| 149,000 |
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| 65%/81% |
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| The Container Store |
| Re-tenanting and potential split of former 46,000 square foot Nordstrom; façade upgrade and possible vertical expansion |
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| 0.2 |
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| 17.8 |
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| 27.8 |
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651-671 West Diversey |
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| 100.0 | % |
| Chicago, IL |
| TBD |
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| 46,000 |
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| 86%/86% |
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| TBD |
| 'Discretionary spend for future re-tenanting and re-configuration of approximately 30,000 sf. |
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Route 6 Mall |
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| 100.0 | % |
| Honesdale, PA |
| TBD |
| TBD |
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| 32%/47% |
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| TJ Maxx |
| Discretionary spend for re-tenanting former 120,000 square foot Kmart anchor space once tenant(s) are secured |
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Mad River |
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| 100.0 | % |
| Dayton, OH |
| TBD |
| TBD |
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| 73%/73% |
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| TBD |
| Discretionary spend for the re-tenanting former 33,000 square foot Babies R Us space once tenant(s) are secured |
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| $ | 203.6 |
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| $ | 235.9 |
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Property | Location | Costs to Date | Anticipated Additional Costs (a) | Status | Square Feet Upon Completion | Estimated Stabilization Date | ||||||||||||||
(dollars in millions) | ||||||||||||||||||||
Cortlandt Crossing | Mohegan Lake, NY | $ | 40.4 | $ | 20.0 | to | $ | 25.0 | Construction commenced | 130,000 | 2019 | |||||||||
Broad Hollow Commons | Farmingdale, NY | 16.5 | 33.5 | to | 43.5 | Pre-construction | 180,000 - 200,000 | 2020 | ||||||||||||
Total Fund III | 56.9 | 53.5 | 68.5 | |||||||||||||||||
650 Bald Hill Road (b,c) | Warwick, RI | 33.0 | 2.5 | to | 3.5 | Construction commenced | 161,000 | 2018 | ||||||||||||
717 N. Michigan Avenue | Chicago, IL | 109.2 | 10.8 | to | 18.3 | Pre-construction | 62,000 | 2018 | ||||||||||||
Total Fund IV | 142.2 | 13.3 | 21.8 | |||||||||||||||||
613-623 West Diversey | Chicago, IL | 16.1 | 6.9 | to | 8.4 | Construction commenced | 30,000 | 2018 | ||||||||||||
56 E. Walton Street | Chicago, IL | 8.5 | 2.0 | to | 3.0 | Construction commenced | TBD | 2018 | ||||||||||||
Total Core | 24.6 | 8.9 | 11.4 | |||||||||||||||||
Total | $ | 223.7 | $ | 75.7 | $ | 101.7 |
39
ITEM 3. LEGAL PROCEEDINGS.
From time to time, we are involved ina party to various matterslegal proceedings, claims or regulatory inquiries and investigations arising out of, litigation arising in the normalor incident to, our ordinary course of business. While we are unable to predict with certainty the outcome of any particular matter, Management is of the opinionmanagement does not currently expect, when any such matters are resolved, that when such litigation is resolved, our resulting exposure to loss contingencies, if any, will not have a significantmaterial adverse effect on our consolidated financial position, results of operations, or liquidity.
ITEM 4. MINE SAFETY DISCLOSURES.
Not applicable.
PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
Market Information, Dividends and Holders of Record of our Common Shares
At February 15, 2023, there were 251 holders of record of our Common Shares, as reportedwhich are traded on the New York Stock Exchange under the symbol “AKR.” Our quarterly dividends are discussed in Note 10and cashthe characterization of such dividends declared during the two years ended December 31, 2017 and 2016:
Quarter Ended | Dividend | |||||||||||
2017 | High | Low | Per Share | |||||||||
March 31, 2017 | $ | 33.45 | $ | 29.23 | $ | 0.26 | ||||||
June 30, 2017 | 32.02 | 26.70 | 0.26 | |||||||||
September 30, 2017 | 30.36 | 26.97 | 0.26 | |||||||||
December 31, 2017 | 30.63 | 26.85 | 0.27 | |||||||||
2016 | ||||||||||||
March 31, 2016 | $ | 35.24 | $ | 30.25 | $ | 0.25 | ||||||
June 30, 2016 | 35.98 | 32.76 | 0.25 | |||||||||
September 30, 2016 | 38.01 | 34.91 | 0.25 | |||||||||
December 31, 2016 | (a) | 36.02 | 31.31 | 0.41 |
Our 2020 Share Incentive Plan (the “2020 Plan”) which was approved by our shareholders at the 20162020 annual shareholders’ meeting, the shareholders' approved the Second Amended and Restated 2006 Incentive Plan (the “Second Amended 2006 Plan”). This plan replaced all previous share incentive plans and increased the authorizationauthorizes us to issue options, Restricted Shares andrestricted shares, LTIP Units and other securities (collectively, the “Awards”) available to, among others, the Company’s officers, trustees, and employees by 1.6 million shares, forup to a total of 3.7 million shares available to be issued.2,829,953 Common Shares (on a converted basis). See
The following table provides information related to the Second Amended 20062020 Plan as of December 31, 2017:
Equity Compensation Plan Information | ||||||||||||||
(a) | (b) | (c) | ||||||||||||
Number of | Weighted-average | Number of | ||||||||||||
Equity compensation plans approved by security holders | — | $ | — | 1,540,116 | ||||||||||
Equity compensation plans not approved by security holders | — | — | — | |||||||||||
Total | — | $ | — | 1,540,116 |
Remaining Common Shares available under the Amended 20062020 Plan are as follows:
Outstanding Common Shares as of December 31, | 95,120,773 | |||
Outstanding OP Units as of December 31, | 5,135,755 | |||
Total Outstanding Common Shares and OP Units | 100,256,528 | |||
Common Shares and OP Units pursuant to the | 2,829,953 | |||
Less: Issuance of Restricted Shares and LTIP Units Granted | (1,289,837 | ) | ||
Number of Common Shares remaining available | 1,540,116 |
40
Share Price Performance
The following graph compares the cumulative total shareholder return for our Common Shares for the period commencing December 31, 2012,2017, through December 31, 2017,2022, with the cumulative total return on the Russell 2000 Index (“Russell 2000”), the NAREIT All Equity REITREITs Index (the “NAREIT”“All Equity”) and the NAREIT Equity Shopping Centers Index (the “Equity Shopping Centers”) (previously SNL REIT Shopping Center REITs (the “SNL”)Index which was discontinued) over the same period. Total return values for the Russell 2000, the NAREIT,All Equity, the SNLEquity Shopping Centers and the Common Shares were calculated based upon cumulative total return assuming the investment of $100.00 in each of the Russell 2000, the NAREIT,All Equity, the SNLEquity Shopping Centers and our Common Shares on December 31, 2012,2017, and assuming reinvestment of dividends. The shareholder return as set forth in the table below is not necessarily indicative of future performance. The information in this section is not “soliciting material,” is not deemed “filed” with the SEC and is not to be incorporated by reference into any of our filings under the Securities Act or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language contained in such filing.
At December 31, | ||||||||||||||||||||||||
Index | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | ||||||||||||||||||
Acadia Realty Trust | $ | 100.00 | $ | 102.39 | $ | 137.70 | $ | 148.00 | $ | 150.95 | $ | 131.10 | ||||||||||||
Russell 2000 | 100.00 | 138.82 | 145.62 | 139.19 | 168.85 | 193.58 | ||||||||||||||||||
NAREIT All Equity REIT Index | 100.00 | 102.86 | 131.68 | 135.40 | 147.09 | 159.85 | ||||||||||||||||||
SNL REIT Retail Shopping Ctr Index | 100.00 | 106.84 | 138.44 | 145.85 | 150.94 | 134.21 |
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| At December 31, |
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Index |
| 2017 |
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| 2018 |
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| 2019 |
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| 2020 |
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| 2021 |
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| 2022 |
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Acadia Realty Trust |
| $ | 100.00 |
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| $ | 90.60 |
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| $ | 103.08 |
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| $ | 57.63 |
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| $ | 91.27 |
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| $ | 62.81 |
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Russell 2000 Index |
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| 100.00 |
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| 88.99 |
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| 111.70 |
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| 134.00 |
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| 153.85 |
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| 122.41 |
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NAREIT All Equity REITs Index |
|
| 100.00 |
|
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| 95.96 |
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| 123.46 |
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| 117.14 |
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| 165.51 |
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| 124.22 |
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NAREIT Equity Shopping Centers Index |
|
| 100.00 |
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| 85.45 |
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| 106.84 |
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| 77.31 |
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| 127.60 |
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| 111.60 |
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Recent Sales of Unregistered SecuritiesSecurities; Use of Proceeds from Registered Securities
None.
Issuer Purchases of Equity Securities
The Company maintains a share repurchase program thatwhich authorizes management, at its discretion, to repurchase up to $20.0$200.0 million of ourits outstanding Common Shares. The program may be discontinued or extended at any time and there is no assurance that we will purchase the full amount authorized. There were no Common Sharestime. The Company repurchased by us1,219,065 shares for $22.4 million, inclusive of fees, during the year ended December 31, 2017. Under this program we have repurchased 2.1 million Common Shares, none of which were repurchased after2020. The Company did not repurchase any shares during the years ended December 2001.31, 2022 or 2021. As of December 31, 2017,2022, management may repurchase up to approximately $7.5$122.5 million of ourthe Company’s outstanding Common Shares under this program. On February 20, 2018, this plan was revised as discussed in
41
ITEM 6. [RESERVED] Not applicable. 42 ITEM |
Year Ended December 31, | ||||||||||||||||||||
(dollars in thousands, except per share amounts) | 2017 | 2016 | 2015 | 2014 | 2013 | |||||||||||||||
OPERATING DATA: | ||||||||||||||||||||
Revenues | $ | 250,262 | $ | 189,939 | $ | 199,063 | $ | 179,681 | $ | 156,486 | ||||||||||
Operating expenses, excluding depreciation and reserves | (113,554 | ) | (98,039 | ) | (88,850 | ) | (79,104 | ) | (72,108 | ) | ||||||||||
Depreciation and amortization | (104,934 | ) | (70,011 | ) | (60,751 | ) | (49,645 | ) | (40,299 | ) | ||||||||||
Impairment charges | (14,455 | ) | — | (5,000 | ) | — | (1,500 | ) | ||||||||||||
Equity in earnings and gains unconsolidated affiliates inclusive of gains on disposition of properties | 23,371 | 39,449 | 37,330 | 111,578 | 12,382 | |||||||||||||||
Interest income | 29,143 | 25,829 | 16,603 | 12,607 | 11,800 | |||||||||||||||
Gain on change in control and other | 5,571 | — | 1,596 | 2,724 | — | |||||||||||||||
Interest expense | (58,978 | ) | (34,645 | ) | (37,297 | ) | (39,426 | ) | (40,239 | ) | ||||||||||
Income from continuing operations before income taxes | 16,426 | 52,522 | 62,694 | 138,415 | 26,522 | |||||||||||||||
Income tax (provision) benefit | (1,004 | ) | 105 | (1,787 | ) | (629 | ) | (19 | ) | |||||||||||
Income from continuing operations before gain on disposition of properties | 15,422 | 52,627 | 60,907 | 137,786 | 26,503 | |||||||||||||||
Income from discontinued operations, net of tax | — | — | — | 1,222 | 18,137 | |||||||||||||||
Gain on disposition of properties, net of tax | 48,886 | 81,965 | 89,063 | 13,138 | — | |||||||||||||||
Net income | 64,308 | 134,592 | 149,970 | 152,146 | 44,640 | |||||||||||||||
(Income) loss attributable to noncontrolling interests: | ||||||||||||||||||||
Continuing operations | (2,838 | ) | (61,816 | ) | (84,262 | ) | (80,059 | ) | 7,523 | |||||||||||
Discontinued operations | — | — | — | (1,023 | ) | (12,048 | ) | |||||||||||||
Net income attributable to noncontrolling interests | (2,838 | ) | (61,816 | ) | (84,262 | ) | (81,082 | ) | (4,525 | ) | ||||||||||
Net income attributable to Acadia | $ | 61,470 | $ | 72,776 | $ | 65,708 | $ | 71,064 | $ | 40,115 | ||||||||||
Supplemental Information: | ||||||||||||||||||||
Income from continuing operations attributable to Acadia | $ | 61,470 | $ | 72,776 | $ | 65,708 | $ | 70,865 | $ | 34,026 | ||||||||||
Income from discontinued operations attributable to Acadia | — | — | — | 199 | 6,089 | |||||||||||||||
Net income attributable to Acadia | $ | 61,470 | $ | 72,776 | $ | 65,708 | $ | 71,064 | $ | 40,115 | ||||||||||
Basic earnings per share: | ||||||||||||||||||||
Income from continuing operations | $ | 0.73 | $ | 0.94 | $ | 0.94 | $ | 1.18 | $ | 0.61 | ||||||||||
Income from discontinued operations | — | — | — | — | 0.11 | |||||||||||||||
Basic earnings per share | $ | 0.73 | $ | 0.94 | $ | 0.94 | $ | 1.18 | $ | 0.72 | ||||||||||
Diluted earnings per share: | ||||||||||||||||||||
Income from continuing operations | $ | 0.73 | $ | 0.94 | $ | 0.94 | $ | 1.18 | $ | 0.61 | ||||||||||
Income from discontinued operations | — | — | — | — | 0.11 | |||||||||||||||
Diluted earnings per share | $ | 0.73 | $ | 0.94 | $ | 0.94 | $ | 1.18 | $ | 0.72 | ||||||||||
Weighted average number of Common Shares outstanding | ||||||||||||||||||||
Basic | 83,683 | 76,231 | 68,851 | 59,402 | 54,919 | |||||||||||||||
Diluted | 83,685 | 76,244 | 68,870 | 59,426 | 54,982 | |||||||||||||||
Cash dividends declared per Common Share | $ | 1.05 | $ | 1.16 | $ | 1.22 | $ | 1.23 | $ | 0.86 | ||||||||||
BALANCE SHEET DATA: | ||||||||||||||||||||
Real estate before accumulated depreciation | $ | 3,466,482 | $ | 3,382,000 | $ | 2,736,283 | $ | 2,208,595 | $ | 1,819,053 | ||||||||||
Total assets | 3,960,247 | 3,995,960 | 3,032,319 | 2,720,721 | 2,264,957 | |||||||||||||||
Total indebtedness | 1,424,409 | 1,488,718 | 1,358,606 | 1,118,602 | 1,039,997 | |||||||||||||||
Total common shareholders’ equity | 1,567,199 | 1,588,577 | 1,100,488 | 1,055,541 | 704,236 | |||||||||||||||
Noncontrolling interests | 648,440 | 589,548 | 420,866 | 380,416 | 417,352 | |||||||||||||||
Total equity | 2,215,639 | 2,178,125 | 1,521,354 | 1,435,957 | 1,121,588 | |||||||||||||||
OTHER: | ||||||||||||||||||||
Funds from operations attributable to Common Shareholders and Common OP Unit holders (a) | 134,667 | 117,070 | 111,560 | 78,882 | 67,161 | |||||||||||||||
Cash flows provided by (used in): | ||||||||||||||||||||
Operating activities | 119,833 | 111,760 | 113,598 | 82,519 | 65,233 | |||||||||||||||
Investing activities | 10,082 | (610,970 | ) | (354,503 | ) | (268,516 | ) | (87,879 | ) | |||||||||||
Financing activities | (126,897 | ) | 498,239 | 96,101 | 324,388 | 10,022 |
OVERVIEW
As of December 31, 2017,2022, there were 176202 properties, which we own or have an ownership interest in, within our Core Portfolio and Funds. Our Core Portfolio consists of those properties either 100% owned, or partially owned through joint venture interests by the Operating Partnership, or subsidiaries thereof, not including those properties owned through our Funds. These properties primarily consist of street and urban retail, and dense suburban shopping centers. See
The majority of our operating income is derived from rental revenues from operating properties, including expense recoveries from tenants, offset by operating and overhead expenses. As our RCP Venture invests in operating companies, the Operating Partnership invests through a taxable REIT subsidiary (“TRS”).
Our primary business objective is to acquire and manage commercial retail properties that will provide cash for distributions to shareholders while also creating the potential for capital appreciation to enhance investor returns. We focus on the following fundamentals to achieve this objective:
SIGNIFICANT DEVELOPMENTS DURING THE YEAR ENDED DECEMBERyear ended December 31, 2017
Acquisitions
During the year ended December 31, 2017, within2022, we made four new consolidated investments in our Core Portfolio and Fund portfoliosV acquired three unconsolidated properties totaling $425.0 million, inclusive of transaction costs, as described below (Note 2).
43
On June 5, 2017,27, 2022, we made an $18.5 million investment in Fund II and Mervyns II increasing our ownership in each by 11.67% to 40.00%. Additionally, on August 1, 2022, we made an additional $5.8 million investment in Fund II and increased our ownership by 21.67% to 61.67% (Note 1). As the Company retained its controlling interest in Fund II and Mervyns II, we accounted for these additional investments as equity transactions.
In addition, and as discussed below, Fund III obtained the venture partner's interest in its 640 Broadway investment through a foreclosure proceeding and subsequently consolidated the property (Note 2, Note 4).
On January 27, 2023, Fund V acquired a consolidated suburban90% interest in an unconsolidated venture. The venture purchased a shopping center in Santa Fe, New Mexico for $35.2 million referred to as “Plaza Santa Fe.”
Dispositions of Real Estate
During the year ended December 31, 2017, within our Funds2022, we sold 13disposed of one Core property and one Core land parcel, five consolidated Fund properties for an aggregate sales price of $345.8 million and our proportionate share of the aggregate gains was $15.6 millionone land parcel, and two unconsolidated investments, as follows (
44
We recognized aggregate gains of $57.1 million on the sales of the above properties, excluding the gain recognized on the sale of our unconsolidated interest in Self Storage Management and Promenade at Manassas, during the year ended December 31, 2022, of which our share was $1.6 million netis $23.3 million.
In addition, during the third quarter of Financing Activity During the year ended December 31, The Operating Partnership has a $700.0 million senior unsecured credit facility, as amended (the “Credit Facility”), with Bank of America, N.A. as administrative agent, comprised of a $300.0 million senior unsecured revolving credit facility (the “Revolver”) which bears interest at a floating rate based on SOFR with margins based on leverage or credit rating, and a $400.0 million senior unsecured term On On July 29, 2022, the Operating Partnership entered into the $75.0 million term loan, with TD Bank, N.A. as administrative agent, which bears interest at a Structured Financing During the year ended December 31, amounts attributable2022, we entered into an agreement to noncontrolling interests.On June 30, 2017, Fund IV sold an unconsolidatedsell a property 1701 Belmont Avenue, for $5.6 million for whichapproximately $18.0 million. As this disposition is deemed probable within one year, this property has been classified as "held-for-sale" on the gain was $3.3 million of which our pro-rata share was $0.8 million and was recognized within equity in earnings of unconsolidated affiliates in theCompany's consolidated statements of income.On February 15, 2017, Fund III sold an unconsolidated property, Arundel Plaza, for $28.8 million for which the gain was $8.2 million of which our pro-rata share was $1.3 million and was recognized within equity in earnings of unconsolidated affiliates in the consolidated statements of income.On January 31, 2017, Fund IV sold an unconsolidated property, 2819 Kennedy Boulevard, for $19.0 million, for which the gain was $6.3 million of which our pro-rata share was $1.4 million and was recognized within equity in earnings of unconsolidated affiliates in the consolidated statements of income.Financings2017,2022, we obtained aggregateeffected the following financing of $352.9 million includingactivities (
•We obtained•$162.9$110.0 million, and one mortgage of $27.3 million at an unconsolidated property in financingsconnection with eleven new non-recourse mortgages, primarily for Fund IV.the sales of properties (Note 2, Note 4);On September 30, 2017,•closed on a newmortgage and unsecured note collateralized by the real estate assets of City Point in the third quarter with an outstanding balance of $257.9 million and $40.0 million, respectively, with a single $198.0 million mortgage loan and initial proceeds of $132.3 million; andloan.May 4, 2017, Fund V closedApril 6, 2022, the Operating Partnership entered into the $175.0 million term loan facility, with Bank of America, N.A. as administrative agent, which bears interest at a floating rate based on SOFR with margins based on leverage or credit rating, and which matures on April 6, 2027. The proceeds of the $175.0 million term loan were used to pay down the Revolver. Currently the $175.0 million term loan bears interest at SOFR + 1.60%. The $175.0 million term loan is guaranteed by the Company and certain subsidiaries of the Company.new $150.0floating rate based on SOFR with margins based on leverage or credit rating and which matures on July 29, 2029. Currently the $75.0 million subscription line.We also repaid thirteen mortgages aggregating $280.8 million.2017 (Note 3) we entered into the following structured financing transactions:
45
ATM Program Activity
We sold 5,525,419 Common Shares under our ATM Program during the year ended December 31, 2022 for gross proceeds of $123.9 million, or $119.5 million net of issuance costs, at a weighted-average gross price per share of $22.43 (Note 10).
Albertsons
On January 20, 2023, Mervyns II received cash dividends totaling $28.2 million related to the special dividend received from its investment in Albertsons Companies Inc. ("Albertsons") (Note 4). The special dividend was originally scheduled to be paid on November 7, 2022 and was settleddelayed by a temporary restraining order which enjoined Albertsons from paying the special dividend. The Company's proportionate share of the special dividend was $11.3 million. The special dividend will be recognized in bankruptcy proceedings duringthe first quarter of 2023 given the uncertainty that existed as of December 31, 2022, which was resolved following the lifting of the temporary restraining order by the Supreme Court of the State of Washington on January 17, 2023 (Note 17).
Fund II and City Point Refinancing
During the second Additionally, in August 2022, through Fund II, we refinanced and de-levered City Point. The outstanding mortgage debt of $257.9 million and term loan of $40.0 million were refinanced with a single mortgage loan of $198.0 million, with initial proceeds of $132.2 million (Note 7). We quarter.funded an additional $10.0 million on an existing $10.0 million note receivable, allprovided a loan, through a separate lending subsidiary, to other Fund II investors in City Point, through a separate borrower subsidiary, to fund the investors' pro rata contribution necessary to complete the refinancing of the City Point debt, of which $65.9 million was subsequently repaid.Retail Real Estate TrendsOur performance is driven, in part, by factors affectingfunded at closing ("City Point Loan") (Note 3). In addition, the retail sector. Trends affecting the retail sector over the past few years include changes related to: department stores, apparel spending, consumer demographics and retail technology including internet shopping; as well as the maturity of the retail industry. The number of full-line department stores has been declining steadily and many tenants are reducing both the number and size of stores they lease. Further, consumers are spending less on apparel and housewares and more on entertainment and dining out. Although internet sales are continuing to trend up, these sales constitute a relatively small portion of total consumer spending. As delivery costs impede growth, internet retailers are continuing to move towards an “omni-channel” retailing approach whereby brick and mortar retail still plays a critical role in attracting and retaining consumers. Weremaining partners have and will continue to focus on owning assets in locationscertain redemption rights that maximize our potential to address these ongoing industry changes and challenges.Tax Cuts and Jobs ActThe Tax Cuts and Jobs Act (the ‘‘Act’’) enacted in December 2017, makes substantial changes to the Federal income tax laws. These changes include a reduction in the generally applicable corporate tax rate to 21%, substantial limitations on the deductibility of interest, and preferential rates of taxation on most ordinary REIT dividends and certain business income derived by non-corporate taxpayers. The Act also limits the use of net operating losses, which may requirecould enable us to make additional distributions tofurther increase our stockholders. The effect of these, and the many other, changes madeownership in the Act is highly uncertain, both in terms of their direct effect on the taxation of an investment in our common stock and their indirect effect on the value of our assets or market conditions generally. Furthermore, many of the provisions of the Act will require guidance through the issuance of Treasury regulations in order to assess their effect. There may be a substantial delay before such regulations are promulgated, increasing the uncertainty as to the ultimate effect of the Act on us. There may be technical corrections legislation with respect to the Act this year, the effect of which cannot be predicted. However, the Company has recorded an adjustment of $2.0 million to its deferred tax assets at December 31, 2017 owned by its taxable subsidiaries to reflect the lower Federal corporate tax rate and other provisions effective in 2018.Share Repurchase PlanIn February 2018, our board of trustees elected to terminate the existing repurchase program and authorized a new common share repurchase program under which we may repurchase, from time to time, up to a maximum of $200.0 million of our common sharesFund II (Note 1710). The shares may be repurchased in the open market or in privately negotiated transactions. The timing and actual number of shares repurchased will depend on a variety of factors, including, share price in relation to the estimated value of our assets, corporate and regulatory requirements, market conditions and other corporate liquidity requirements and priorities. The common share repurchase program does not obligate us to repurchase any specific number of shares and may be suspended or terminated at any time at our discretion without prior notice.39
46
RESULTS OF OPERATIONS
See
Note 12 in the Notes to Consolidated Financial Statements for an overview of our three reportable segments.Comparison of Results for the Year Ended December 31, 20172022 to the Year Ended December 31, 2016
The results of operations by reportable segment for the year ended December 31, 20172022 compared to the year ended December 31, 20162021 are summarized in the table below (in millions, totals may not add due to rounding):
Year Ended December 31, 2017 | Year Ended December 31, 2016 | Increase (Decrease) | ||||||||||||||||||||||||||||||||||||||||||||||
Core | Funds | SF | Total | Core | Funds | SF | Total | Core | Funds | SF | Total | |||||||||||||||||||||||||||||||||||||
Revenues | $ | 170.0 | $ | 80.3 | $ | — | $ | 250.3 | $ | 150.2 | $ | 39.7 | $ | — | $ | 189.9 | $ | 19.8 | $ | 40.6 | $ | — | $ | 60.4 | ||||||||||||||||||||||||
Depreciation and amortization | (61.7 | ) | (43.2 | ) | — | (104.9 | ) | (54.6 | ) | (15.4 | ) | — | (70.0 | ) | 7.1 | 27.8 | — | 34.9 | ||||||||||||||||||||||||||||||
Property operating expenses, other operating and real estate taxes | (45.3 | ) | (34.4 | ) | — | (79.8 | ) | (39.6 | ) | (17.8 | ) | — | (57.4 | ) | 5.7 | 16.6 | — | 22.4 | ||||||||||||||||||||||||||||||
Impairment charges | — | (14.5 | ) | — | (14.5 | ) | — | — | — | — | — | 14.5 | — | 14.5 | ||||||||||||||||||||||||||||||||||
General and administrative expenses | — | — | — | (33.8 | ) | — | — | — | (40.6 | ) | — | — | — | (6.8 | ) | |||||||||||||||||||||||||||||||||
Operating income | 62.9 | (11.8 | ) | — | 17.3 | 56.0 | 6.5 | — | 21.9 | 6.9 | (18.3 | ) | — | (4.6 | ) | |||||||||||||||||||||||||||||||||
Gain on disposition of properties | — | 48.9 | — | 48.9 | — | 82.0 | — | 82.0 | — | (33.1 | ) | — | (33.1 | ) | ||||||||||||||||||||||||||||||||||
Interest income | — | — | 29.1 | 29.1 | — | — | 25.8 | 25.8 | — | — | 3.3 | 3.3 | ||||||||||||||||||||||||||||||||||||
Gain on change in control | 5.6 | — | — | 5.6 | — | — | — | — | 5.6 | — | — | 5.6 | ||||||||||||||||||||||||||||||||||||
Equity in earnings and gains of unconsolidated affiliates inclusive of gains on disposition of properties | 3.7 | 19.6 | — | 23.4 | 3.8 | 35.7 | — | 39.4 | (0.1 | ) | (16.1 | ) | — | (16.0 | ) | |||||||||||||||||||||||||||||||||
Interest expense | (28.6 | ) | (30.4 | ) | — | (59.0 | ) | (27.4 | ) | (7.2 | ) | — | (34.6 | ) | 1.2 | 23.2 | — | 24.4 | ||||||||||||||||||||||||||||||
Income tax (provision) benefit | — | — | — | (1.0 | ) | — | — | — | 0.1 | — | — | — | (1.1 | ) | ||||||||||||||||||||||||||||||||||
Net income | 43.6 | 26.3 | 29.1 | 64.3 | 32.4 | 116.9 | 25.8 | 134.6 | 11.2 | (90.6 | ) | 3.3 | (70.3 | ) | ||||||||||||||||||||||||||||||||||
Net income attributable to noncontrolling interests | (1.1 | ) | (1.7 | ) | — | (2.8 | ) | (3.4 | ) | (58.4 | ) | — | (61.8 | ) | (2.3 | ) | (56.7 | ) | — | (59.0 | ) | |||||||||||||||||||||||||||
Net income attributable to Acadia | $ | 42.5 | $ | 24.6 | $ | 29.1 | $ | 61.5 | $ | 29.0 | $ | 58.5 | $ | 25.8 | $ | 72.8 | $ | 13.5 | $ | (33.9 | ) | $ | 3.3 | $ | (11.3 | ) |
|
| Year Ended |
|
| Year Ended |
|
|
|
| |||||||||||||||||||||||||||||||||||||||
|
| December 31, 2022 |
|
| December 31, 2021 |
|
| Increase (Decrease) |
| |||||||||||||||||||||||||||||||||||||||
|
| Core |
|
| Funds |
|
| SF |
|
| Total |
|
| Core |
|
| Funds |
|
| SF |
|
| Total |
|
| Core |
|
| Funds |
|
| SF |
|
| Total |
| ||||||||||||
Revenues |
| $ | 202.5 |
|
| $ | 123.7 |
|
| $ | — |
|
| $ | 326.3 |
|
| $ | 181.3 |
|
| $ | 111.2 |
|
| $ | — |
|
| $ | 292.5 |
|
| $ | 21.2 |
|
| $ | 12.5 |
|
| $ | — |
|
| $ | 33.8 |
|
Depreciation and amortization |
|
| (75.6 | ) |
|
| (60.3 | ) |
|
| — |
|
|
| (135.9 | ) |
|
| (69.1 | ) |
|
| (54.3 | ) |
|
| — |
|
|
| (123.4 | ) |
|
| 6.5 |
|
|
| 6.0 |
|
|
| — |
|
|
| 12.5 |
|
Property operating expenses, other |
|
| (60.3 | ) |
|
| (41.6 | ) |
|
| — |
|
|
| (101.9 | ) |
|
| (57.0 | ) |
|
| (41.9 | ) |
|
| — |
|
|
| (98.9 | ) |
|
| 3.3 |
|
|
| (0.3 | ) |
|
| — |
|
|
| 3.0 |
|
General and administrative expenses |
|
| — |
|
|
| — |
|
|
| — |
|
|
| (44.1 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| (40.1 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 4.0 |
|
Impairment charges |
|
| — |
|
|
| (33.3 | ) |
|
| — |
|
|
| (33.3 | ) |
|
| — |
|
|
| (9.9 | ) |
|
| — |
|
|
| (9.9 | ) |
|
| — |
|
|
| 23.4 |
|
|
| — |
|
|
| 23.4 |
|
Gain on disposition of properties |
|
| 7.2 |
|
|
| 49.9 |
|
|
| — |
|
|
| 57.2 |
|
|
| 4.6 |
|
|
| 5.9 |
|
|
| — |
|
|
| 10.5 |
|
|
| 2.6 |
|
|
| 44.0 |
|
|
| — |
|
|
| 46.7 |
|
Operating income |
|
| 73.9 |
|
|
| 38.4 |
|
|
| — |
|
|
| 68.2 |
|
|
| 59.9 |
|
|
| 10.9 |
|
|
| — |
|
|
| 30.7 |
|
|
| 14.0 |
|
|
| 27.5 |
|
|
| — |
|
|
| 37.5 |
|
Interest income |
|
| — |
|
|
| — |
|
|
| 14.6 |
|
|
| 14.6 |
|
|
| — |
|
|
| — |
|
|
| 9.1 |
|
|
| 9.1 |
|
|
| — |
|
|
| — |
|
|
| 5.5 |
|
|
| 5.5 |
|
Equity in (losses) earnings of |
|
| (45.9 | ) |
|
| 13.0 |
|
|
| — |
|
|
| (32.9 | ) |
|
| 0.4 |
|
|
| 5.0 |
|
|
| — |
|
|
| 5.3 |
|
|
| (46.3 | ) |
|
| 8.0 |
|
|
| — |
|
|
| (38.2 | ) |
Interest expense |
|
| (37.9 | ) |
|
| (42.3 | ) |
|
| — |
|
|
| (80.2 | ) |
|
| (29.5 | ) |
|
| (38.6 | ) |
|
| — |
|
|
| (68.0 | ) |
|
| 8.4 |
|
|
| 3.7 |
|
|
| — |
|
|
| 12.2 |
|
Realized and unrealized holding gains (losses) |
|
| 1.2 |
|
|
| (35.6 | ) |
|
| (0.6 | ) |
|
| (35.0 | ) |
|
| — |
|
|
| 53.7 |
|
|
| (4.5 | ) |
|
| 49.1 |
|
|
| 1.2 |
|
|
| (89.3 | ) |
|
| 3.9 |
|
|
| (84.1 | ) |
Income tax provision |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (0.1 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 0.1 |
|
Net (loss) income |
|
| (8.8 | ) |
|
| (26.4 | ) |
|
| 14.0 |
|
|
| (65.3 | ) |
|
| 30.8 |
|
|
| 30.9 |
|
|
| 4.5 |
|
|
| 26.0 |
|
|
| (39.6 | ) |
|
| (57.3 | ) |
|
| 9.5 |
|
|
| (91.3 | ) |
Net loss attributable |
|
| — |
|
|
| 5.5 |
|
|
| — |
|
|
| 5.5 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (5.5 | ) |
|
| — |
|
|
| (5.5 | ) |
Net loss (income) attributable |
|
| 1.0 |
|
|
| 23.3 |
|
|
| — |
|
|
| 24.3 |
|
|
| (2.3 | ) |
|
| (0.2 | ) |
|
| — |
|
|
| (2.5 | ) |
|
| (3.3 | ) |
|
| (23.5 | ) |
|
| — |
|
|
| (26.8 | ) |
Net (loss) income attributable to Acadia |
| $ | (7.8 | ) |
| $ | 2.4 |
|
| $ | 14.0 |
|
| $ | (35.4 | ) |
| $ | 28.5 |
|
| $ | 30.7 |
|
| $ | 4.5 |
|
| $ | 23.5 |
|
| $ | (36.3 | ) |
| $ | (28.3 | ) |
| $ | 9.5 |
|
| $ | (58.9 | ) |
Core Portfolio
The results of operations for our Core Portfolio segment are depicted in the table above under the headings labeled “Core.” Segment net income attributable to Acadia for our Core Portfolio increased by $13.5decreased $36.3 million for the year ended December 31, 20172022 compared to the prior year as a result of the changes as further described below.
Revenues fromfor our Core Portfolio increased by $19.8$21.2 million for the year ended December 31, 20172022 compared to the prior year primarily due to $22.7(i) $15.1 million related tofrom Core Portfolio property acquisitions in 2016 partially2021 and 2022 (Note 2), (ii) $2.2 million from lease up within the Core Portfolio, (iii) $2.1 million collection of cash for a fully reserved tenant, (iv) $1.8 million from the write off of two tenant's below market leases, and (v) $0.9 million from the conversion of tenants from cash to accrual basis. These increases were offset by $3.8a $0.9 million attributablecredit loss benefit related to the deconsolidationcollection of the Brandywine Portfoliopreviously reserved tenants accounts in 2016.
Depreciation and amortization for our Core Portfolio increased by $7.1$6.5 million for the year ended December 31, 20172022 compared to the prior year primarily due to $10.3 million of additional depreciation related to Core propertyPortfolio acquisitions in 2016 partially offset by $3.4 million of additional depreciation2021 and amortization related to an adjustment for tenant kick-out options in 2016 (
Property operating expenses, other operating expenses and real estate taxes for our Core Portfolio increased by $5.7$3.3 million for the year ended December 31, 20172022 compared to the prior year primarily due to Core Portfolio property acquisitions in 2016.
The gain on change in controldisposition of $5.6 million during the year ended December 31, 2017 resulted from the consolidation ofproperties for our investment in Market Square upon acquisition of the outstanding third party interests (
Equity in (losses) earnings of unconsolidated affiliates for our Core Portfolio decreased $46.3 million for the year ended December 31, 2022 compared to the prior year primarily due to $2.1the Company's $50.8 million proportionate share of an impairment charge at 840 N. Michigan Avenue
47
(Note 4). This decrease was offset by (i) a $2.2 million decrease in credit loss reserves in 2022 at unconsolidated properties related to the COVID-19 Pandemic, and (ii) $1.3 million for the acceleration of a below market tenant lease at a property in 2022.
Interest expense for our Core Portfolio increased $8.4 million for the year ended December 31, 2022 compared to the prior year primarily due to $7.1 million from higher average principal balanceoutstanding borrowings in 20172022, and a $0.9by $1.3 million increase in capital lease interest in 2017, partially offset by $1.0 million due to lowerhigher average interest rates.
Realized and unrealized holding gains (losses) on investments and other for our Core Portfolio includes $1.2 million related to the bargain purchase gain on the acquisition of the Williamsburg Collection (Note 2).
Net incomeloss attributable to noncontrolling interests for our Core Portfolio decreased $2.3$3.3 million duefor the year ended December 31, 2022 compared to the change in controlprior year based on the noncontrolling interests’ share of the Brandywine Portfolio in 2016.
Funds
The results of operations for our Funds segment are depicted in the table above under the headings labeled “Funds.” Segment net income attributable to Acadia for the Funds decreased by $33.9$28.3 million for the year ended December 31, 20172022 compared to the prior year as a result of the changes described below.
Revenues fromfor the Funds increased by $40.6$12.5 million for the year ended December 31, 20172022 compared to the prior year primarily due to $26.1(i) $13.7 million related tofrom consolidated Fund property acquisitions in 20162021 (Note 2), (ii) $4.4 million related to the completion and 2017 as well as $13.6 millionrent commencement from development projects being placed in service during 2017 (
Depreciation and amortization for the Funds increased by $27.8$6.0 million for the year ended December 31, 20172022 compared to the prior year
Impairment charges for the Funds increased by $16.6$23.4 million for the year ended December 31, 20172022 compared to the prior year due to $8.5 million from the development projects placed into service in 2017 as well as $6.8 million from Fund property acquisitions in 2016 and 2017.
Gain on disposition of properties for the Funds decreased by $33.1increased $44.0 million for the year ended December 31, 20172022 compared to the prior year. Gains duringyear due to the current year period comprised $31.5 million fromsales of Cortlandt Crossing at Fund III, Wake Forest Crossing, Lincoln Place, Mayfair and Dauphin at Fund IV, and a New Towne outparcel at Fund V in 2022 compared to the saledispositions of 654 Broadway at Fund II’s 260 E. 161st Street property, $6.5 million fromIII, and the sale ofNE Grocer Portfolio and 110 University at Fund II’s 216th Street property, $5.2 million from Fund IV’s 1151 Third Avenue property and $6.4 million from the sale of Fund III’s New Hyde Park Shopping Center. Gains during the prior year period comprised $16.6 million from the sale of Fund III’s Heritage Shops and $65.4 million from the sale of a 65% interestIV in Cortlandt Town Center.
Equity in (losses) earnings of unconsolidated affiliates for the Funds decreased by $16.1increased $8.0 million for the year ended December 31, 20172022 compared to the prior year due to the $12.8 million gain on sale of Promenade at Manassas in 2022 offset by a $3.2 million gain on sale related to two land parcels at Riverdale Family Center in Fund V (Note 5) in 2021.
Interest expense for the Funds increased $3.7 million for the year ended December 31, 2022 compared to the prior year primarily due to the Fund’s proportionate share of $14.8 million in aggregate gains from the sales of 1701 Belmont Avenue, Arundel Plaza and 2819 Kennedy Boulevard during the current year period as well as distributions in excess of our carrying value related to investments in Mervyn’s and Albertsons (
Realized and unrealized holding gains (losses) on investments and other for the Funds increased $23.2decreased $89.3 million for the year ended December 31, 20172022 compared to the prior year primarily due to a $38.9 million mark-to-market unrealized loss on the Investment in Albertsons offset by $ 1.5 million related to the Company's proportionate share of the gain on sale of Fund III's interest in Self Storage Management (Note 4) in 2022 compared to a $51.9 million mark-to-market unrealized gain on the Investment in Albertsons in 2021.
Net loss (income) attributable to redeemable noncontrolling interests for the Funds increased $5.5 million for the year ended December 31, 2022 compared to the prior year due to $7.8 million less interest capitalized during 2017, a $6.0 million increase related to higher average interest ratesthe City Point Loan in 2017, a $5.1 million increase related to higher average outstanding borrowings in 2017, and a $2.9 million increase in amortization of additional loan costs in 2017.
Net incomeloss attributable to noncontrolling interests infor the Funds decreased by $56.7$23.5 million for the year ended December 31, 20172022 compared to the prior year due tobased on the noncontrolling interests’ share of the variances discussed above.
48
Structured Financing
The results of operations for our Structured Financing segment are depicted in the table above under the headings labeled “SF.” NetInterest and other income for the Structured Financing portfolio increased by $3.3$5.5 million for the year ended December 31, 2022 compared to the prior year
Unallocated
The Company does not allocate general and administrative expense and income taxes to its reportable segments. These unallocated amounts are
depicted in the table above under the headings labeledYear Ended December 31, 2016 | Year Ended December 31, 2015 | Increase (Decrease) | ||||||||||||||||||||||||||||||||||||||||||||||
Core | Funds | SF | Total | Core | Funds | SF | Total | Core | Funds | SF | Total | |||||||||||||||||||||||||||||||||||||
Revenues | $ | 150.2 | $ | 39.7 | $ | — | $ | 189.9 | $ | 150.0 | $ | 49.0 | $ | — | $ | 199.1 | $ | 0.2 | $ | (9.3 | ) | $ | — | $ | (9.2 | ) | ||||||||||||||||||||||
Depreciation and amortization | (54.6 | ) | (15.4 | ) | — | (70.0 | ) | (46.2 | ) | (14.5 | ) | — | (60.8 | ) | 8.4 | 0.9 | — | 9.2 | ||||||||||||||||||||||||||||||
Property operating expenses, other operating and real estate taxes | (39.6 | ) | (17.8 | ) | — | (57.4 | ) | (37.3 | ) | (21.2 | ) | — | (58.5 | ) | 2.3 | (3.4 | ) | — | (1.1 | ) | ||||||||||||||||||||||||||||
Impairment charges | — | — | — | — | (5.0 | ) | — | — | (5.0 | ) | (5.0 | ) | — | — | (5.0 | ) | ||||||||||||||||||||||||||||||||
General and administrative expenses | — | — | — | (40.6 | ) | — | — | — | (30.4 | ) | — | — | — | 10.2 | ||||||||||||||||||||||||||||||||||
Operating income (loss) | 56.0 | 6.5 | — | 21.9 | 61.5 | 13.3 | — | 44.5 | (5.5 | ) | (6.8 | ) | — | (22.6 | ) | |||||||||||||||||||||||||||||||||
Gain on disposition of properties | — | 82.0 | — | 82.0 | — | 89.1 | — | 89.1 | — | (7.1 | ) | — | (7.1 | ) | ||||||||||||||||||||||||||||||||||
Interest income | — | — | 25.8 | 25.8 | — | — | 16.6 | 16.6 | — | — | 9.2 | 9.2 | ||||||||||||||||||||||||||||||||||||
Equity in earnings and gains of unconsolidated affiliates inclusive of gains on disposition of properties | 3.8 | 35.7 | — | 39.4 | 1.2 | 36.2 | — | 37.3 | 2.6 | (0.5 | ) | — | 2.1 | |||||||||||||||||||||||||||||||||||
Other | — | — | — | — | — | — | 1.6 | 1.6 | — | — | (1.6 | ) | (1.6 | ) | ||||||||||||||||||||||||||||||||||
Interest expense | (27.4 | ) | (7.2 | ) | — | (34.6 | ) | (27.9 | ) | (9.4 | ) | — | (37.3 | ) | (0.5 | ) | (2.2 | ) | — | (2.7 | ) | |||||||||||||||||||||||||||
Income tax benefit (provision) | — | — | — | 0.1 | — | — | — | (1.8 | ) | — | — | — | 1.9 | |||||||||||||||||||||||||||||||||||
Net income (loss) | 32.4 | 116.9 | 25.8 | 134.6 | 34.8 | 129.2 | 18.2 | 150.0 | (2.4 | ) | (12.3 | ) | 7.6 | (15.4 | ) | |||||||||||||||||||||||||||||||||
Net (income) loss attributable to noncontrolling interests | $ | (3.4 | ) | $ | (58.4 | ) | $ | — | $ | (61.8 | ) | $ | (0.1 | ) | $ | (84.1 | ) | $ | — | $ | (84.3 | ) | $ | 3.3 | $ | (25.7 | ) | $ | — | $ | (22.5 | ) | ||||||||||||||||
Net income attributable to Acadia | $ | 29.0 | $ | 58.5 | $ | 25.8 | $ | 72.8 | $ | 34.6 | $ | 45.0 | $ | 18.2 | $ | 65.7 | $ | (5.6 | ) | $ | 13.5 | $ | 7.6 | $ | 7.1 |
Discussions of 2020 items and 2015.
NON-GAAP FINANCIAL MEASURES
Net Property Operating Income
The following discussion of net property operating income (“NOI”) and rent spreads on new and renewal leases includes the activity from both our consolidated and our pro-rata share of unconsolidated properties within our Core Portfolio. Our Funds invest primarily in properties that typically require significant leasing and development. Given that the Funds are finite-life investment vehicles, these properties are sold following stabilization. For these reasons, we believe NOI and rent spreads are not meaningful measures for our Fund investments.
NOI represents property revenues less property expenses. We consider NOI and rent spreads on new and renewal leases for our Core Portfolio to be appropriate supplemental disclosures of portfolioCore Portfolio operating performance due to their widespread acceptance and use within the REIT investor and analyst communities. NOI and rent spreads on new and renewal leases are presented to assist investors in analyzing our property performance, however, our method of calculating these may be different from methods used by other REITs and, accordingly, may not be comparable to such other REITs.
A reconciliation of consolidated operating income to net operating income (loss) - Core Portfolio follows (in thousands):
|
| Year Ended December 31, |
| |||||||||
|
| 2022 |
|
| 2021 |
|
| 2020 |
| |||
|
|
|
|
|
|
|
|
|
| |||
Consolidated operating income (loss) |
| $ | 68,230 |
|
| $ | 30,656 |
|
| $ | (115,062 | ) |
Add back: |
|
|
|
|
|
|
|
|
| |||
General and administrative |
|
| 44,066 |
|
|
| 40,125 |
|
|
| 35,798 |
|
Depreciation and amortization |
|
| 135,917 |
|
|
| 123,439 |
|
|
| 147,229 |
|
Impairment charges |
|
| 33,311 |
|
|
| 9,925 |
|
|
| 85,598 |
|
|
|
|
|
|
|
|
|
|
| |||
Less: |
|
|
|
|
|
|
|
|
| |||
Above/below-market rent, straight-line rent and other adjustments (a) |
|
| (20,182 | ) |
|
| (19,488 | ) |
|
| 13,581 |
|
Gain on disposition of properties |
|
| (57,161 | ) |
|
| (10,521 | ) |
|
| (683 | ) |
Consolidated NOI |
|
| 204,181 |
|
|
| 174,136 |
|
|
| 166,461 |
|
|
|
|
|
|
|
|
|
|
| |||
Redeemable noncontrolling interest in consolidated NOI |
|
| (1,919 | ) |
|
| — |
|
|
| — |
|
Noncontrolling interest in consolidated NOI |
|
| (57,957 | ) |
|
| (48,401 | ) |
|
| (46,316 | ) |
Less: Operating Partnership's interest in Fund NOI included above |
|
| (15,310 | ) |
|
| (12,337 | ) |
|
| (11,518 | ) |
Add: Operating Partnership's share of unconsolidated joint ventures NOI (b) |
|
| 14,965 |
|
|
| 13,811 |
|
|
| 15,659 |
|
NOI - Core Portfolio |
| $ | 143,960 |
|
| $ | 127,209 |
|
| $ | 124,286 |
|
Year Ended December 31, | ||||||||||||
2017 | 2016 | 2015 | ||||||||||
Consolidated Operating Income | $ | 17,319 | $ | 21,889 | $ | 44,462 | ||||||
Add back: | ||||||||||||
General and administrative | 33,756 | 40,648 | 30,368 | |||||||||
Depreciation and amortization | 104,934 | 70,011 | 60,751 | |||||||||
Impairment charges | 14,455 | — | 5,000 | |||||||||
Less: | ||||||||||||
Above/below market rent, straight-line rent and other adjustments | (21,110 | ) | (5,313 | ) | (8,192 | ) | ||||||
Consolidated NOI | 149,354 | 127,235 | 132,389 | |||||||||
Noncontrolling interest in consolidated NOI | (28,379 | ) | (20,872 | ) | (34,675 | ) | ||||||
Less: Operating Partnership's interest in Fund NOI included above | (7,927 | ) | (4,981 | ) | (5,767 | ) | ||||||
Add: Operating Partnership's share of unconsolidated joint ventures NOI (a) | 19,539 | 16,547 | 10,382 | |||||||||
NOI - Core Portfolio | $ | 132,587 | $ | 117,929 | $ | 102,329 | ||||||
49
Same-Property NOI includes Core Portfolio properties that we owned for both the current and prior periods presented, but excludes those properties which we acquired, sold or expected to sell, redeveloped and developed during these periods. The following table summarizes Same-Property NOI for our Core Portfolio (in thousands):
Year Ended December 31, | ||||||||
2017 | 2016 | |||||||
Core Portfolio NOI | $ | 132,587 | $ | 117,929 | ||||
Less properties excluded from Same-Property NOI | (31,778 | ) | (17,172 | ) | ||||
Same-Property NOI | $ | 100,809 | $ | 100,757 | ||||
Percent change from prior year period | 0.1 | % | ||||||
Components of Same-Property NOI: | ||||||||
Same-Property Revenues | $ | 137,590 | $ | 133,086 | ||||
Same-Property Operating Expenses | (36,781 | ) | (32,329 | ) | ||||
Same-Property NOI | $ | 100,809 | $ | 100,757 |
|
| Year Ended December 31, |
| |||||
|
| 2022 |
|
| 2021 |
| ||
Core Portfolio NOI |
| $ | 143,960 |
|
| $ | 127,209 |
|
Less properties excluded from Same-Property NOI |
|
| (23,515 | ) |
|
| (13,954 | ) |
Same-Property NOI |
| $ | 120,445 |
|
| $ | 113,255 |
|
|
|
|
|
|
|
| ||
Percent change from prior year period |
|
| 6.3 | % |
|
|
| |
|
|
|
|
|
|
| ||
Components of Same-Property NOI: |
|
|
|
|
|
| ||
Same-Property Revenues |
| $ | 170,575 |
|
| $ | 165,841 |
|
Same-Property Operating Expenses |
|
| (50,130 | ) |
|
| (52,586 | ) |
Same-Property NOI |
| $ | 120,445 |
|
| $ | 113,255 |
|
Rent Spreads on Core Portfolio New and Renewal Leases
The following table summarizes rent spreads on both a cash basis and straight-line basis for new and renewal leases based on leases executed within our Core Portfolio for the year ended
|
| Year Ended December 31, 2022 |
| |||||
Core Portfolio New and Renewal Leases |
| Cash Basis |
|
| Straight- |
| ||
Number of new and renewal leases executed |
|
| 76 |
|
|
| 76 |
|
GLA commencing |
|
| 713,312 |
|
|
| 713,312 |
|
New base rent |
| $ | 33.80 |
|
| $ | 34.85 |
|
Expiring base rent |
| $ | 30.68 |
|
| $ | 30.09 |
|
Percent growth in base rent |
|
| 10.2 | % |
|
| 15.8 | % |
Average cost per square foot (a) |
| $ | 15.65 |
|
| $ | 15.65 |
|
Weighted average lease term (years) |
|
| 5.4 |
|
|
| 5.4 |
|
Year Ended December 31, 2017 | ||||||||
Core Portfolio New and Renewal Leases | Cash Basis | Straight-Line Basis | ||||||
Number of new and renewal leases executed | 72 | 72 | ||||||
GLA commencing | 500,028 | 500,028 | ||||||
New base rent | $ | 23.63 | $ | 24.23 | ||||
Expiring base rent | $ | 21.66 | $ | 20.48 | ||||
Percent growth in base rent | 9.1 | % | 18.3 | % | ||||
Average cost per square foot | $ | 6.16 | $ | 6.16 | ||||
Weighted average lease term (years) | 5.3 | 5.3 |
50
Funds from Operations
We consider funds from operations (“FFO”) as defined by the National Association of Real Estate Investment Trusts (“NAREIT”) to be an appropriate supplemental disclosuremeaningful non-GAAP measure of operating performance for an equity REIT due to its widespread acceptance and use within the REIT and analyst communities. FFO is presented to assist investors in analyzing our performance. It is helpful as it excludes 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. Our method of calculating FFO 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 our performance or to cash flows as a measure of liquidity. Consistent with the NAREIT definition, we define FFO as net income (computed in accordance with GAAP), excluding gains (losses) from sales of depreciated property and impairment of depreciable real estate, plus depreciation and amortization, and after adjustments for unconsolidated partnerships
|
| Year Ended December 31, |
| |||||||||
|
| 2022 |
|
| 2021 |
|
| 2020 |
| |||
|
|
|
|
|
|
|
|
|
| |||
Net (loss) income attributable to Acadia |
| $ | (35,445 | ) |
| $ | 23,548 |
|
| $ | (8,976 | ) |
|
|
|
|
|
|
|
|
|
| |||
Depreciation of real estate and amortization of leasing costs (net of |
|
| 104,910 |
|
|
| 93,388 |
|
|
| 106,220 |
|
Impairment charges (net of noncontrolling interests' share) (a) |
|
| 58,481 |
|
|
| 2,294 |
|
|
| 17,323 |
|
Gain on disposition of properties (net of noncontrolling interests' share) |
|
| (22,137 | ) |
|
| (4,163 | ) |
|
| (291 | ) |
(Loss) Income attributable to Common OP Unit holders |
|
| (1,800 | ) |
|
| 1,584 |
|
|
| (370 | ) |
Distributions - Preferred OP Units |
|
| 492 |
|
|
| 492 |
|
|
| 495 |
|
Funds from operations attributable to Common Shareholders and |
| $ | 104,501 |
|
| $ | 117,143 |
|
| $ | 114,401 |
|
|
|
|
|
|
|
|
|
|
| |||
Less: Impact of City Point share conversion (b) |
|
| (906 | ) |
|
| — |
|
|
| — |
|
Funds from operations attributable to Common Shareholders and |
| $ | 103,595 |
|
| $ | 117,143 |
|
| $ | 114,401 |
|
|
|
|
|
|
|
|
|
|
| |||
Funds From Operations per Share - Diluted |
|
|
|
|
|
|
|
|
| |||
Basic weighted-average shares outstanding, GAAP earnings |
|
| 94,575,251 |
|
|
| 87,653,818 |
|
|
| 86,441,922 |
|
Weighted-average OP Units outstanding |
|
| 6,299,222 |
|
|
| 5,115,319 |
|
|
| 4,993,267 |
|
Basic weighted-average shares and OP Units outstanding, FFO |
|
| 100,874,473 |
|
|
| 92,769,137 |
|
|
| 91,435,189 |
|
Assumed conversion of Preferred OP Units to Common Shares |
|
| 463,898 |
|
|
| 464,623 |
|
|
| 464,623 |
|
Assumed conversion of LTIP units and restricted share units to |
|
| — |
|
|
| — |
|
|
| — |
|
Diluted weighted-average number of Common Shares and Common |
|
| 101,338,371 |
|
|
| 93,233,760 |
|
|
| 91,899,812 |
|
|
|
|
|
|
|
|
|
|
| |||
Diluted Funds from operations, per Common Share and Common OP Unit (c) |
| $ | 1.02 |
|
| $ | 1.26 |
|
| $ | 1.24 |
|
(dollars in thousands except per share data) | Year Ended December 31, | |||||||||||
2017 | 2016 | 2015 | ||||||||||
Net income attributable to Acadia | $ | 61,470 | $ | 72,776 | $ | 65,708 | ||||||
Depreciation of real estate and amortization of leasing costs (net of noncontrolling interests' share) | 83,515 | 67,446 | 52,013 | |||||||||
Impairment charges (net of noncontrolling interests’ share) | 1,088 | — | 1,111 | |||||||||
Gain on sale (net of noncontrolling interests’ share) | (15,565 | ) | (28,154 | ) | (11,114 | ) | ||||||
Income attributable to Common OP Unit holders | 3,609 | 4,442 | 3,811 | |||||||||
Distributions - Preferred OP Units | 550 | 560 | 31 | |||||||||
Funds from operations attributable to Common Shareholders and Common OP Unit holders | $ | 134,667 | $ | 117,070 | $ | 111,560 | ||||||
Funds From Operations per Share - Diluted | ||||||||||||
Basic weighted-average shares outstanding, GAAP earnings | 83,682,789 | 76,231,000 | 68,851,083 | |||||||||
Weighted-average OP Units outstanding | 4,741,058 | 4,435,041 | 3,894,542 | |||||||||
Basic weighted-average shares outstanding, FFO | 88,423,847 | 80,666,041 | 72,745,625 | |||||||||
Assumed conversion of Preferred OP Units to common shares | 505,045 | 435,274 | 25,067 | |||||||||
Assumed conversion of options, LTIP units and restricted share units to common shares | 69,488 | 150,843 | 296,815 | |||||||||
Diluted weighted-average number of Common Shares and Common OP Units outstanding, FFO | 88,998,380 | 81,252,158 | 73,067,507 | |||||||||
Diluted Funds from operations, per Common Share and Common OP Unit | $ | 1.51 | $ | 1.44 | $ | 1.53 |
51
LIQUIDITY AND CAPITAL RESOURCES
Uses of Liquidity and Cash Requirements
Generally, our principal uses of liquidity are (i) distributions to our shareholders and OP unit holders, (ii) investments which include the funding of our capital committed to the Funds and property acquisitions and development/re-tenanting activities within our Core Portfolio, (iii) distributions to our Fund investors, and (iv) debt service and loan repayments.
Distributions
In order to qualify as a REIT for Federalfederal income tax purposes, we must currently distribute at least 90% of our taxable income to our shareholders. During the year ended December 31, 2017,2022, we paid dividends and distributions on our Common Shares, Common OP Units and Preferred OP Units totaling $106.7$68.3 million. This amount included a $13.3 million special dividend that was paid in January 2017, which related to the Operating Partnership’s share of cash proceeds from property dispositions during 2016. The balance of the distributions were funded from the Operating Partnership’s share of operating cash flow.
Investments in Real Estate
During the year ended December 31, 2017, within2022, we made four new consolidated investments in our Core Portfolio and Fund portfoliosV acquired three unconsolidated properties totaling $425.0 million as described below (Note 2, Note 4):
On June 27, 2022, we made an $18.5 million investment in Fund II and Mervyns II increasing our ownership in each by 11.67% to 40.00%. Additionally, on August 1, 2022, we made an additional $5.8 million investment in Fund II and increased our ownership by 21.67% to 61.67% (Note 1). As the Company retained its controlling interest in Fund II and Mervyns II, we accounted for these additional investments as equity transactions.
On January 27, 2023, Fund V acquired a 90% interest in an unconsolidated venture. The venture purchased a shopping center referred to as Mohawk Commons in Schenectady, New York, for $62.1 million, inclusive of transaction costs (Note 17).
Structured Financing Investments
On August 1, 2022, we originated the City Point Loan to other Fund II investors of $65.9 million (Note 3, Note 10). We funded $7.5 million of a $12.8 million construction loan commitment to an unconsolidated venture (Note 4). Fund V originated a temporary bridge loan of $31.7 million to an unconsolidated venture in the third quarter (Note 4).
52
Capital Commitments
During the year ended December 31, 2017,2022, we made capital contributions of $11.1aggregating $25.6 million to our Funds and $106.1 million to Fund IV, $9.2II along with the City Point Loan to other Fund II investors (see Structured Financing Investments above) (Note 10). Additionally, we made an additional $24.3 million investment in Fund II and Mervyns II, increasing our ownership from 28.33% in each to Fund V,61.67% and $3.6 million to Fund III in connection with acquisitions and development costs. 40.00%, respectively (Note 1).
At December 31, 2017,2022, our share of the remaining capital commitments to our Funds aggregated $131.9$44.8 million as follows:
Development Activities
During the year ended December 31, 2017,2022, capitalized costs associated with development activities totaled $108.1 million. These costs primarily related to Fund II’s City Point project.$4.9 million (Note 2). At December 31, 2017,2022, we had 6 propertiesa total of nine consolidated projects and one unconsolidated project under development or redevelopment, for which the estimated total cost to complete these projects through 20202025 was $75.7$70.8 million to $101.7$98.0 million, and our estimated share was approximately $25.1$49.7 million to $33.2$69.2 million.
Debt
A summary of our consolidated debt, which includes the full amount of Fund related obligations and excludes our pro rata share of debt at our unconsolidated subsidiaries, is as follows (in thousands):
December 31, | December 31, | |||||||
2017 | 2016 | |||||||
Total Debt - Fixed and Effectively Fixed Rate | $ | 899,650 | $ | 860,486 | ||||
Total Debt - Variable Rate | 538,736 | 645,185 | ||||||
1,438,386 | 1,505,671 | |||||||
Net unamortized debt issuance costs | (14,833 | ) | (18,289 | ) | ||||
Unamortized premium | 856 | 1,336 | ||||||
Total Indebtedness | $ | 1,424,409 | $ | 1,488,718 |
|
| December 31, |
|
| December 31, |
| ||
|
| 2022 |
|
| 2021 |
| ||
|
|
|
|
|
|
| ||
Total Debt - Fixed and Effectively Fixed Rate |
| $ | 1,440,773 |
|
| $ | 1,038,803 |
|
Total Debt - Variable Rate |
|
| 364,641 |
|
|
| 780,935 |
|
|
|
| 1,805,414 |
|
|
| 1,819,738 |
|
Net unamortized debt issuance costs |
|
| (12,697 | ) |
|
| (7,946 | ) |
Unamortized premium |
|
| 343 |
|
|
| 446 |
|
Total Indebtedness |
| $ | 1,793,060 |
|
| $ | 1,812,238 |
|
As of December 31, 2017,2022, our consolidated outstanding mortgage and notes payableindebtedness aggregated $1,438.4$1,805.4 million, excluding unamortized premium of $0.9$0.3 million and unamortized loan costs of $14.8$12.7 million, and were collateralized by 4231 properties and related tenant leases. InterestStated interest rates on our outstanding indebtedness ranged from 1.00%3.35% to 5.89%LIBOR + 3.65% with maturities that ranged from May 1, 2018,January 2023 to April 15, 2035.2035, without regard to available extension options. Taking into consideration $504.0$1,264.0 million of notional principal under variable to fixed-rate swap agreements currently in effect, $899.7$1,440.8 million of the portfolio debt, or 62.5%79.8%, was fixed at a 3.74%5.19% weighted-average interest rate and $538.7$364.6 million, or 37.5%20.2% was floating at a 3.44%6.13% weighted average interest rate as of December 31, 2017.2022. Our variable-rate debt includes $196.4$103.8 million of debt subject to interest rate caps.
Without regard to available extension options, at December 31, 2022 there is $87.7$333.0 million of debt maturing in 20182023 at a weighted-average interest rate of 4.17%6.06%; there is $6.7$7.1 million of scheduled principal amortization due in 2018;2023; and our share of scheduled remaining 20182023 principal payments and maturities on our unconsolidated debt was $7.9 million at December 31, 2017.$47.2 million. In addition, $213.6$251.7 million of our total consolidated debt and $1.0$45.0 million of our
53
pro-rata share of unconsolidated debt will come due in 2019.2024. As it relates to the aforementioned maturing debt in 20182023 and 2019,2024, we have options to extend consolidated debt aggregating $51.2 million and $0.0 million at December 31, 2022, respectively; however, there can be no assurance that we will be able to successfully execute any or all of its available extension options. As it relates to the remaining maturing debt in 2023 and 2024, we may not have sufficient cash on hand to repay such indebtedness, and, therefore, we expect to refinance at least a portion of this indebtedness or select other alternatives based on market conditions as these loans mature; however, there can be no assurance that we will be able to obtain financing at acceptable terms.
Share Repurchase Program
We maintain a share repurchase program under which $122.5 million was in default atremains available as of December 31, 2017 and2022 (Note 10). The Company did not repurchase any of its Common Shares under this program during the year ended December 31, 2016 (
Sources of Liquidity
Our primary sources of capital for funding our short-term (less than 12 months) and long-term (12 months and longer) liquidity needs include (i) the issuance of both public equity and OP Units, (ii) the issuance of both secured and unsecured debt, (iii) unfunded capital commitments from noncontrolling interests within our Funds, (iv) future sales of existing properties, (v) repayments of structured financing investments, and (v)(vi) cash on hand and future cash flow from operating activities. Our cash on hand in our consolidated subsidiaries at December 31, 20172022 totaled $74.8$17.2 million. Our remaining sources of liquidity are described further below.
ATM Program
We have an at-the-market (“ATM”ATM Program (Note 10) equity issuance program whichthat provides us with an efficient and low-cost vehicle for raising capital through public equity issuances on an as-we-go basis to fund our capital needs. Through this program, we have been able to effectively “match-fund” the required equitycapital for our Core Portfolio and Fund acquisitions through the issuance of Common Shares over extended periods employing a price averaging strategy. In addition, from time to time, we have issued and intend to continue to issue, equity in follow-on offerings separate from our ATM program.Program. Net proceeds raised through our ATM programProgram and follow-on offerings are primarily used for acquisitions, both for our Core Portfolio and our pro-rata share of Fund acquisitions, and for general corporate purposes. There were no issuances of equity under the ATM program during the year ended December 31, 2017.
Fund Capital
During the year ended December 31, 2022, Funds II and V called for capital contributions to Fund IV of $37.0$175.8 million and $121.7 million, respectively, of which our aggregate share was $131.7 million, inclusive of $106.1 million to Fund V of $36.6 million, andII along with the City Point Loan to other Fund III of $11.2 million were primarily used to fund recent acquisitions and development activities.II investors (see Structured Financing Investments above). At December 31, 2017,2022, unfunded capital commitments from noncontrolling interests within our Funds II, III, IV and V were $29.1zero, $1.4 million, $90.2$32.2 million, and $378.9$137.5 million, respectively.
Asset Sales and Other Transactions
During the year ended December 31, 2022, we disposed of one Core property, five consolidated Fund properties, two land parcels and two unconsolidated investments as follows (Note 2):
54
We recognized aggregate gains of $57.1 million on the sales of the above properties during the year ended December 31, 2017, within2022, excluding the gain recognized on the sale of our Fund portfolio we sold five consolidated and eight unconsolidated properties, for an aggregate sales price of $345.8 million for which our proportionate share was $23.3 million.
In January 2023, we recognized cash dividends totaling $28.2 million related to the special dividend received from Mervyns II investment in Albertsons, of the aggregate gainswhich our share was $15.6$11.3 million (Note 217, Note 4).
Structured Financing Repayments
During 2017,the year ended December 31, 2022, we received total collectionsfull payment on our notes receivablea $16.0 million and $13.5 million first mortgage loan, respectively (Note 3). In January 2022, through an affiliate of $32.0Fund III, foreclosed on one Structured Financing loan in the amount of $10.0 million including full repaymentaccrued interest (exclusive of two notes issueddefault interest and other amounts due on the loan that have not been recognized), which had previously been in prior periodsdefault. We also have one Structured Financing investment in the amount of $21.6 million including accrued interest (exclusive of default interest and other amounts due on the loan that have not been recognized), that previously matured and has not been repaid. Scheduled maturities of Structured Financing loans include $39.3 million maturing during 2023 (
Financing and Debt
As of December 31, 2017,2022, we had $166.5$173.5 million of additional capacity under existing consolidated Core and Fund revolving debt facilities. In addition, at that date within our Core and Fund portfolios, we had 7194 unleveraged consolidated properties with an aggregate carrying value of approximately $1.6$1.8 billion, and 25 unleveraged unconsolidated properties for which our share of the carrying value was $62.9 million, although there can be no assurance that we would be able to obtain financing for these properties at favorable terms, if at all.
Inflation and Economic Condition Considerations
In the past two years, microeconomic and macroeconomic conditions, including the fallout from the COVID-19 Pandemic, the war in Ukraine, supply-chain disruptions, and the recessionary outlook of the current financial markets, has increased volatility in the market and has caused a surge in already increasing inflation and interest rates. We believe we manage our properties in a cost-conscious manner to minimize recurring operational expenses and utilize multi-year contracts to alleviate the impact of inflation on our business and our tenants. Most of our leases require tenants to pay their share of operating expenses, including common area maintenance, real estate taxes and insurance, thereby reducing our exposure to increases in costs and operating expenses resulting from inflation. These provisions are designed to partially mitigate the impact of inflation; however, current inflation levels are much greater than the contractual rent increases we obtain from our tenant base. The rate hikes enacted by the Federal Reserve have had a significant impact on interest rate indexes such as LIBOR, SOFR and the Prime Rate. As of December 31, 2022, approximately 79.8% of our outstanding debt is fixed or effectively fixed interest rate with the remaining 20.2% indexed to LIBOR, SOFR or Prime plus an applicable margin per the loan agreement. As of December 31, 2022, we were counterparty to 36 interest rate swap agreements and three interest rate cap agreements, all of which qualify for and are designated as hedging instruments, which helps to alleviate the impact of rising interest rates on our operations. While we have not experienced any material negative impacts at this time, we are actively managing our business to respond to the ongoing economic and social impact from such events. See Item 1A Risk Factors.
55
HISTORICAL CASH FLOW
Year Ended December 31, 2022 Compared to 2016
The following table compares the historical cash flow for the year ended December 31, 20172022 with the cash flow for the year ended December 31, 20162021 (in millions)millions, totals may not add due to rounding):
Year Ended December 31, | ||||||||||||
2017 | 2016 | Variance | ||||||||||
Net cash provided by operating activities | $ | 119.8 | $ | 111.8 | $ | 8.0 | ||||||
Net cash provided by (used in) investing activities | 10.1 | (611.0 | ) | 621.1 | ||||||||
Net cash (used in) provided by financing activities | (126.9 | ) | 498.2 | (625.1 | ) | |||||||
Increase (decrease) in cash and cash equivalents | $ | 3.0 | $ | (1.0 | ) | $ | 4.0 |
|
| Year Ended December 31, |
| |||||||||
|
| 2022 |
|
| 2021 |
|
| Variance |
| |||
|
|
|
|
|
|
|
|
|
| |||
Net cash provided by operating activities |
| $ | 133.2 |
|
| $ | 105.0 |
|
| $ | 28.2 |
|
Net cash used in investing activities |
|
| (124.2 | ) |
|
| (198.5 | ) |
|
| 74.3 |
|
Net cash (used in) provided by financing activities |
|
| (4.4 | ) |
|
| 91.3 |
|
|
| (95.7 | ) |
Increase (decrease) in cash and restricted cash |
| $ | 4.7 |
|
| $ | (2.2 | ) |
| $ | 6.9 |
|
Operating Activities
Our operating activities provided $8.0$28.2 million more cash during the year ended December 31, 2017, primarily due to additional cash flow from 2016 and 2017 Core and Fund acquisitions partially offset by a $27.0 million rent prepayment received from a tenant in 2016.
Investing Activities
During the year ended December 31, 2022 as compared to the year ended December 31, 2021, our investing activities used $621.1$74.3 million less cash, primarily due to (i) $291.8$160.7 million less cash used for the acquisition of real estate, (ii) $146.8 million less cash used for the issuance of notes receivable, (iii) $111.8 million more cash received from disposition of properties, including unconsolidated affiliates, (iv) $65.6 million less cash used for investments and advances to unconsolidated investments, and (v) $41.3 million less cash used for development and property improvement costs. These items were partially offset by (i) $30.5 million less cash received from return of capital from unconsolidated affiliates, and (ii) $10.8 million less cash received from repayments of notes receivable.
Year Ended December 31, | ||||||||||||
2016 | 2015 | Variance | ||||||||||
Net cash provided by operating activities | $ | 111.8 | $ | 113.6 | $ | (1.8 | ) | |||||
Net cash used in investing activities | (611.0 | ) | (354.5 | ) | (256.5 | ) | ||||||
Net cash provided by financing activities | 498.2 | 96.1 | 402.1 | |||||||||
Total | $ | (1.0 | ) | $ | (144.8 | ) | $ | 143.8 |
56
Financing Activities
Our financing activities provided $402.1used $95.7 million more cash during 2016,the year ended December 31, 2022 as compared to the year ended December 31, 2021, primarily from (i) $386.9$125.0 million more cash received fromused by net borrowings, (ii) $78.6 million more cash used for the issuanceacquisition of Common Shares and (ii) an increasedistributions to noncontrolling interests, and (iii) $25.1 million more cash used in dividends paid to common shareholders. These uses of $259.6 million from capital contributions from noncontrolling interests. These itemscash were partially offset by (i) a decrease of $210.7 million of cash provided from net borrowings, (ii) distributions to noncontrolling interests increased $21.4 million, (iii) $7.3$79.3 million more cash used for deferred financingprovided by contributions from noncontrolling interests and other costs, and (iv) an additional $5.0(ii) $55.6 million more cash provided by the sale of cash used to pay dividends to Common Shareholders.
Payments Due by Period | ||||||||||||||||||||
Contractual Obligations | Total | Less than 1 Year | 1 to 3 Years | 3 to 5 Years | More than 5 Years | |||||||||||||||
Principal obligations on debt | $ | 1,438.4 | $ | 94.4 | $ | 790.0 | $ | 353.9 | $ | 200.1 | ||||||||||
Interest obligations on debt | 217.3 | 60.7 | 92.5 | 34.4 | 29.7 | |||||||||||||||
Lease obligations (a) | 207.2 | 4.5 | 8.9 | 8.7 | 185.1 | |||||||||||||||
Construction commitments (b) | 92.2 | 92.2 | — | — | — | |||||||||||||||
Total | $ | 1,955.1 | $ | 251.8 | $ | 891.4 | $ | 397.0 | $ | 414.9 |
OFF-BALANCE SHEET ARRANGEMENTS
We have the following investments made through joint ventures (that may include, among others, tenancy-in common and other similar investments) for the purpose of investing in operating properties. We account for these investments using the equity method of accounting. As such, our financial statements reflect our investment and our share of income and loss from, but not the individual assets and liabilities, of these joint ventures.
See
Note 4 in the Notes to Consolidated Financial Statements, for a discussion of our unconsolidated investments. The Operating Partnership’s pro-rata share of unconsolidated non-recourse debt related to those investments is as follows (dollars in millions):
|
| Operating Partnership |
|
| December 31, 2022 | |||||||||
Investment |
| Ownership |
|
| Pro-rata Share of |
|
| Effective Interest Rate (a) |
|
| Maturity Date | |||
Eden Square |
|
| 22.8 | % |
| $ | 5.1 |
|
|
| 6.41 | % |
| Mar 2023 |
Gotham Plaza |
|
| 49.0 | % |
|
| 8.7 |
|
|
| 5.09 | % |
| Jun 2023 |
Renaissance Portfolio |
|
| 20.0 | % |
|
| 32.0 |
|
|
| 3.81 | % |
| Aug 2023 |
3104 M Street |
|
| 20.0 | % |
|
| 0.8 |
|
|
| 7.50 | % |
| Jan 2024 |
Crossroads |
|
| 49.0 | % |
|
| 29.8 |
|
|
| 3.94 | % |
| Oct 2024 |
Tri-City Plaza (c) |
|
| 18.1 | % |
|
| 7.0 |
|
|
| 3.01 | % |
| Oct 2024 |
Frederick Crossing (c) |
|
| 18.1 | % |
|
| 4.4 |
|
|
| 3.26 | % |
| Dec 2024 |
Paramus Plaza (b) |
|
| 11.6 | % |
|
| 3.3 |
|
|
| 6.43 | % |
| Dec 2024 |
Frederick County Square (c) |
|
| 18.1 | % |
|
| 4.1 |
|
|
| 4.00 | % |
| Jan 2025 |
840 N. Michigan Avenue |
|
| 88.4 | % |
|
| 65.0 |
|
|
| 4.36 | % |
| Feb 2025 |
Wood Ridge Plaza (b) |
|
| 18.1 | % |
|
| 5.9 |
|
|
| 7.63 | % |
| Mar 2025 |
650 Bald Hill Road |
|
| 20.8 | % |
|
| 3.3 |
|
|
| 3.75 | % |
| Jun 2026 |
La Frontera |
|
| 18.1 | % |
|
| 10.0 |
|
|
| 6.68 | % |
| Jun 2027 |
Family Center at Riverdale (b) |
|
| 18.0 | % |
|
| 6.1 |
|
|
| 5.99 | % |
| Nov 2027 |
Georgetown Portfolio |
|
| 50.0 | % |
|
| 7.5 |
|
|
| 4.72 | % |
| Dec 2027 |
Total |
|
|
|
| $ | 193.0 |
|
|
|
|
|
|
Operating Partnership Ownership Percentage | Operating Partnership Pro-rata Share of Mortgage Debt | |||||||||||
Investment | Interest Rate at December 31, 2017 | Maturity Date | ||||||||||
230/240 W. Broughton | 11.6 | % | $ | 1.2 | 4.37 | % | May 2018 | |||||
Promenade at Manassas | 22.8 | % | 5.7 | 3.07 | % | November 2018 | ||||||
650 Bald Hill | 20.8 | % | 2.9 | 4.02 | % | April 2020 | ||||||
Eden Square | 22.8 | % | 5.1 | 3.52 | % | June 2020 | ||||||
Gotham Plaza (a) | 49.0 | % | 10.0 | 2.97 | % | June 2023 | ||||||
Renaissance Portfolio | 20.0 | % | 32.0 | 3.07 | % | August 2023 | ||||||
Crossroads | 49.0 | % | 33.0 | 3.94 | % | October 2024 | ||||||
840 N. Michigan | 88.4 | % | 65.0 | 4.36 | % | February 2025 | ||||||
Georgetown Portfolio | 50.0 | % | 8.4 | 4.72 | % | December 2027 | ||||||
Total | $ | 163.3 |
57
CRITICAL ACCOUNTING POLICIES
Management’s discussion and analysis of financial condition and results of operations is based upon our Consolidated Financial Statements, which have been prepared in accordance with U.S. GAAP. The preparation of these Consolidated Financial Statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, and expenses. We base our estimates on historical experience and assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We believe the following critical accounting policies affect the significant judgments and estimates used by us in the preparation of our Consolidated Financial Statements.
Impairment of Properties
On a quarterlyperiodic basis, we reviewassess whether there are any indicators that the value of real estate assets, including undeveloped land and construction in progress, may be impaired. A property’s value is impaired only if the estimate of the aggregate future cash flows (undiscounted and without interest charges) to be generated by the property are less than the carrying value of properties held for usethe property. The determination of undiscounted cash flows requires significant estimates by management. In management’s estimate of cash flows, it considers factors such as expected future sale of an asset or development alternatives, capitalization rates and for salethe undiscounted future cash flows analysis, which is probability-weighted based upon management’s best estimate of the likelihood of the alternative courses of action. Expected future cash flows and recoverability conclusions could be materially impacted by changes in items such as well asfuture leasing activity, occupancy, property operating costs, market pricing, our development properties. We performview or strategy relative to a tenant’s business or industry, the manner in which a property is used and the expected hold period of an asset. Subsequent changes in estimated undiscounted cash flows arising from changes in anticipated actions could affect the determination of whether an impairment analysis by calculatingexists and reviewingwhether the effects could have a material impact on the Company’s net operating incomeincome. To the extent an impairment has occurred, the loss will be measured as the excess of the carrying amount of the property over the fair value of the property.
The Company is required to make subjective assessments as to whether there are impairments in the value of its real estate properties and other investments. These assessments have a direct impact on the Company’s estimates of the projected future cash flows, anticipated holding periods or market conditions change, its evaluation of the impairment charges may be different, and such differences could be material to the Company’s consolidated financial statements. Plans to hold properties over longer periods decrease the likelihood of recording impairment losses.
We periodically review our investment in unconsolidated joint ventures and other cost-method investments for other-than-temporary declines in market value. An impairment charge is recorded for a property-by-property basis. We evaluate leasing projections and perform other analysesdecline that is considered to conclude whether an asset is impaired. We record impairment losses and reducebe other-than-temporary as a reduction in the carrying value of properties when indicators ofthe investment.
During 2022 and 2021, the Company recognized impairment are present and the expected undiscounted cash flows related to those properties are less than their carrying amounts. In cases where we do not expect to recover our carrying costscharges on properties held for use, we reduce our carrying cost to fair value. For properties held for sale, we reduce our carrying value to the fair value less costs to sell.
Additionally, during 2022, the Company impaired its unconsolidated investment in unconsolidated joint ventures840 N. Michigan Avenue resulting in a charge of $50.8 million. See Note 4 for a discussion of impairments recognized during the periods presented.
Bad Debts
We assess the collectability of our accounts receivable related to tenant revenues under ASC Topic 842 “Leases” (“ASC 842”). Management exercises judgment in assessing collectability and considers customer credit worthiness, assessment of risk associated with the tenant, and current economic trends, among other than temporary declines in market value. Any decline that isfactors. In addition to the lease-specific collectability assessment performed under ASC 842, the Company may also recognize a general reserve based on the Company’s historical collection experience, as provided under ASC 450-20, as a reduction to Lease income for its portfolio of operating lease receivables which are not expected to be recovered infully collectible. Billed tenant receivables, and receivables arising from the next twelve monthsstraight-lining of rents, are reserved when management deems the collectability of substantially all future lease payments from a specific lease is considered other-than-temporary and an impairment chargenot probable, at which point, the Company will begin recognizing revenue from such leases prospectively on a cash basis, based on actual amounts received. If the Company subsequently determines that it is recorded as a reduction in the carrying valueprobable it will collect substantially all of the investment. No impairment chargeslessee’s remaining lease payments under the lease term, the Company will reinstate the receivables balance, including those arising from the straight-lining of rents, adjusting for the amount related to our investment in unconsolidated joint ventures were recognizedthe period when the lease was accounted for on a cash basis.
Rents receivable at December 31, 2022 and 2021 are shown net of an allowance for doubtful accounts of $32.1 million and $38.5 million, respectively (Note 11). Rental income for the years ended December 31, 2017, 20162022, 2021 and 2015.
58
Real Estate
Real estate assets are stated at cost less accumulated depreciation. Expenditures for acquisition, development, construction and improvement of properties, as well as significant renovations are capitalized. Interest costs are capitalized until construction is substantially complete. Construction in progress includes costs for significant property expansion and development. Depreciation is computed on the straight-line basis over estimated useful lives of 40 years for buildings, the shorter of the useful life or lease term for tenant improvements and five years for furniture, fixtures, and equipment. Expenditures for maintenance and repairs are charged to operations as incurred.
Upon acquisitions of real estate, we assess the fair value of acquired assets (including land, buildings and improvements, and identified intangibles such as above and below marketbelow-market leases and acquired in-place leases and customer relationships)leases) and acquired liabilities in accordance with the FASBFinancial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”)
Revenue Recognition and Accounts Receivable
Leases with tenants are accounted for as operating leases. Minimum rents are recognized on a straight-line basis over the non-cancelable term of the respective leases, beginning when the tenant takes possession of the space.leases. Certain of these leases also provide for percentage rents based upon the level of sales achieved by the tenant. Percentage rent is recognized in the period when the tenants’ sales breakpoint is met. In addition, leases typically provide for the reimbursement to us of real estate taxes, insurance, and other property operating expenses. These reimbursements are recognized as revenue in the period the expenses are incurred.
We make estimates ofassess the uncollectabilitycollectability of our accounts receivable related to tenant revenues. An allowance for doubtful accounts has been provided against certain tenant accounts receivable that are estimated to be uncollectible. Seerevenues as described under the heading “Bad Debts” above. Once the amount is ultimately deemed to be uncollectible, it is written off.
Structured Financings
Real estate notes receivable investments and preferred equity investments (“Structured Financings”) are intended to be held to maturity and are carried at cost.cost less an allowance for credit loss. Interest income from Structured Financings areis recognized on the effective interest method over the expected life of the loan. Under the effective interest method, interest or fees to be collected at the origination of the Structured Financing investment is recognized over the term of the loan as an adjustment to yield.
Allowances for credit loss related to our Structured Financing investments are established based upon management’s quarterly review of the investments. In performing this review, management considers the estimated net recoverable value of the investment as well as other factors, including the fair value of any collateral, the amount and status of any senior debt, and the prospects for the borrower. Because this determination is based upon projections of future economic events, which are inherently subjective, the amounts ultimately realized from the Structured Financings may differ materially from the carrying value at the balance sheet date. Interest income recognition is generally suspended for investments when, in the opinion of management, a full recovery of income and principal becomes doubtful. Income recognition is resumed when the suspended investment becomes contractually current, and performance is demonstrated to be resumed.
Notes receivable at December 31, 2022 and 2021 are reported net of an allowance for credit loss of $0.9 million and $5.8 million, respectively (Note 3).
Recently Issued Accounting Pronouncements
Reference is made to
Note 1 for information about recently issued and recently adopted accounting pronouncements.59
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Information as of December 31, 2017
Our primary market risk exposure is to changes in interest rates related to our mortgage and other debt. See
Note 7 in the Notes to Consolidated Financial Statements, for certain quantitative details related to our mortgage and other debt.Currently, we manage our exposure to fluctuations in interest rates primarily through the use of fixed-rate debt and interest rate swap and cap agreements. As of December 31, 2017,2022, we had total mortgage and other notes payable of $1,438.4$1,805.4 million, excluding the unamortized premium of $0.9$0.3 million and unamortized loandebt issuance costs of $14.8$12.7 million, of which $899.7$1,440.8 million, or 62.5%79.8% was fixed-rate, inclusive of debt with rates fixed through the use of derivative financial instruments, and $538.7$364.6 million, or 37.5%20.2%, was variable-rate based upon LIBOR or Prime rates plus certain spreads. As of December 31, 2017,2022, we were party to 2736 interest rate swap and fourthree interest rate cap agreements to hedge our exposure to changes in interest rates with respect to $504.0$1,264.0 million and $196.4$103.8 million of LIBOR-basedLIBOR or SOFR-based variable-rate debt, respectively.
The following table sets forth information as of December 31, 20172022 concerning our long-term debt obligations, on a pro-rata share basis, including principal cash flows by scheduled maturity and weighted average interest rates of maturing amounts (dollars in millions):
Core Consolidated Mortgage and Other Debt
Year | Scheduled Amortization | Maturities | Total | Weighted-Average Interest Rate | |||||||||||
2018 | $ | 3.1 | $ | 45.9 | $ | 49.0 | 4.2 | % | |||||||
2019 | 3.0 | — | 3.0 | — | % | ||||||||||
2020 | 3.1 | 91.5 | 94.6 | 2.7 | % | ||||||||||
2021 | 3.2 | 200.0 | 203.2 | 2.7 | % | ||||||||||
2022 | 3.4 | 50.0 | 53.4 | 3.0 | % | ||||||||||
Thereafter | 17.4 | 147.7 | 165.1 | 3.7 | % | ||||||||||
$ | 33.2 | $ | 535.1 | $ | 568.3 |
Year |
| Scheduled |
|
| Maturities |
|
| Total |
|
| Weighted-Average |
| ||||
2023 |
| $ | 2.1 |
|
| $ | — |
|
| $ | 2.1 |
|
|
| — | % |
2024 |
|
| 1.7 |
|
|
| 7.3 |
|
|
| 9.0 |
|
|
| 4.7 | % |
2025 |
|
| 2.1 |
|
|
| 228.3 |
|
|
| 230.4 |
|
|
| 4.1 | % |
2026 |
|
| 2.4 |
|
|
| 400.0 |
|
|
| 402.4 |
|
|
| 4.1 | % |
2027 |
|
| 2.2 |
|
|
| 200.1 |
|
|
| 202.3 |
|
|
| 4.0 | % |
Thereafter |
|
| 4.3 |
|
|
| 161.6 |
|
|
| 165.9 |
|
|
| 4.4 | % |
|
| $ | 14.8 |
|
| $ | 997.3 |
|
| $ | 1,012.1 |
|
|
|
|
Fund Consolidated Mortgage and Other Debt
Year | Scheduled Amortization | Maturities | Total | Weighted-Average Interest Rate | |||||||||||
2018 | $ | 0.7 | $ | 5.1 | $ | 5.8 | 3.6 | % | |||||||
2019 | 0.8 | 46.0 | 46.8 | 4.2 | % | ||||||||||
2020 | 0.5 | 111.8 | 112.3 | 3.9 | % | ||||||||||
2021 | 0.5 | 11.3 | 11.8 | 3.5 | % | ||||||||||
2022 | 0.4 | 10.1 | 10.5 | 3.4 | % | ||||||||||
Thereafter | 0.1 | 7.0 | 7.1 | 3.6 | % | ||||||||||
$ | 3.0 | $ | 191.3 | $ | 194.3 |
Year |
| Scheduled |
|
| Maturities |
|
| Total |
|
| Weighted-Average |
| ||||
2023 |
| $ | 5.0 |
|
| $ | 333.0 |
|
| $ | 338.0 |
|
|
| 6.1 | % |
2024 |
|
| 2.6 |
|
|
| 240.0 |
|
|
| 242.6 |
|
|
| 3.6 | % |
2025 |
|
| 0.2 |
|
|
| 178.4 |
|
|
| 178.6 |
|
|
| 6.1 | % |
2026 |
|
| 0.1 |
|
|
| 34.0 |
|
|
| 34.1 |
|
|
| 6.8 | % |
2027 |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — | % |
Thereafter |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — | % |
|
| $ | 7.9 |
|
| $ | 785.4 |
|
| $ | 793.3 |
|
|
|
|
Mortgage Debt in Unconsolidated Partnerships (at our Pro-Rata Share)
Scheduled Amortization | Maturities | Total | Weighted-Average Interest Rate | ||||||||||||
2018 | $ | 1.0 | $ | 6.9 | $ | 7.9 | 3.1 | % | |||||||
2019 | 1.0 | — | 1.0 | — | % | ||||||||||
2020 | 1.1 | 8.0 | 9.1 | 1.9 | % | ||||||||||
2021 | 1.1 | — | 1.1 | — | % | ||||||||||
2022 | 1.2 | — | 1.2 | — | % | ||||||||||
Thereafter | 2.6 | 140.4 | 143.0 | 3.9 | % | ||||||||||
$ | 8.0 | $ | 155.3 | $ | 163.3 |
Year |
| Scheduled |
|
| Maturities |
|
| Total |
|
| Weighted-Average |
| ||||
2023 |
| $ | 1.5 |
|
| $ | 45.7 |
|
| $ | 47.2 |
|
|
| 4.3 | % |
2024 |
|
| 1.3 |
|
|
| 43.7 |
|
|
| 45.0 |
|
|
| 4.0 | % |
2025 |
|
| 0.5 |
|
|
| 74.6 |
|
|
| 75.1 |
|
|
| 4.6 | % |
2026 |
|
| 0.4 |
|
|
| 3.0 |
|
|
| 3.4 |
|
|
| 3.8 | % |
2027 |
|
| 0.3 |
|
|
| 22.0 |
|
|
| 22.3 |
|
|
| 5.9 | % |
Thereafter |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — | % |
|
| $ | 4.0 |
|
| $ | 189.0 |
|
| $ | 193.0 |
|
|
|
|
60
Without regard to available extension options, in 2023, $340.1 million of our total consolidated debt and $7.9$47.2 million of our pro-rata share of unconsolidated outstanding debt will become due. In addition, $213.6$251.7 million of our total consolidated debt and $1.0$45.0 million of our pro-rata share of unconsolidated debt will become due in 2019.2024. As it relates to the maturing debt in 2023 and 2024, we have options to extend consolidated debt aggregating $51.2 million and $0.0 million, respectively; however, there can be no assurance that the Company will be able to successfully execute any or all of its available extension options. As we intend on refinancing some or all of such debt at the then-existing market interest rates, which may be greater than the current interest rate, our interest expense would increase by approximately $3.1$6.8 million annually if the interest rate on the refinanced debt increased by 100 basis points. After giving effect to noncontrolling interests, our share of this increase would be $1.0$1.3 million. Interest expense on our variable-rate debt of $538.7$364.6 million, net of variable to fixed-rate swap agreements currently in effect, as of December 31, 2017,2022, would increase $5.4$3.6 million if LIBORinterest rates increased by 100 basis points. After giving effect to noncontrolling interests, our share of this increase would be $1.3$1.2 million. We may seek additional variable-rate financing if and when pricing and other commercial and financial terms warrant. As such, we would consider hedging against the interest rate risk related to such additional variable-rate debt through interest rate swaps and protection agreements, or other means.
Based on our outstanding debt balances as of December 31, 2017,2022, the fair value of our total consolidated outstanding debt would decrease by approximately $15.9$5.4 million if interest rates increase by 1%. Conversely, if interest rates decrease by 1%, the fair value of our total outstanding debt would increase by approximately $17.3$6.5 million.
As of December 31, 2017,2022, and December 31, 2016,2021, we had consolidated notes receivable of $153.8$123.9 million and $276.2$153.9 million, respectively. We determined the estimated fair value of our notes receivable by discounting future cash receipts utilizing a discount rate equivalent to the rate at which similar notes receivable would be originated under conditions then existing.
Based on our outstanding notes receivable balances as of December 31, 2017,2022, the fair value of our total outstanding notes receivable would decrease by approximately $1.9$0.4 million if interest rates increase by 1%. Conversely, if interest rates decrease by 1%, the fair value of our total outstanding notes receivable would increase by approximately $2.0$2.6 million.
Summarized Information as of December 31, 2016
As of December 31, 2016,2021, we had total mortgage and other notes payable of $1,505.7$1,819.7 million, excluding the unamortized premium of $1.3$0.4 million and unamortized loandebt issuance costs of $18.3$7.9 million, of which $860.5$1,038.8 million, or 57.1% was fixed-rate, inclusive of interest rate swaps,debt with rates fixed through the use of derivative financial instruments, and $645.2$780.9 million, or 42.9%, was variable-rate based upon LIBOR, SOFR or Prime rates plus certain spreads. As of December 31, 2016,2021, we were party to 1828 interest rate swap and fourthree interest rate cap agreements to hedge our exposure to changes in interest rates with respect to $365.3$860.4 million and $196.4$110.5 million of LIBOR-based variable-rate debt, respectively.
Interest expense on our variable-rate debt of $645.2$780.9 million as of December 31, 2016,2021, would have increased $6.5$7.8 million if LIBORcorresponding rate indices increased by 100 basis points. Based on our outstanding debt balances as of December 31, 2016,2021, the fair value of our total outstanding debt would have decreased by approximately $20.3$8.4 million if interest rates increased by 1%. Conversely, if interest rates decreased by 1%, the fair value of our total outstanding debt would have increased by approximately $22.8$16.0 million.
Changes in Market Risk Exposures from 2016December 31, 2021 to 2017
Our interest rate risk exposure from December 31, 2016,2021, to December 31, 2017,2022, has decreased on an absolute basis, as the $645.2$780.9 million of variable-rate debt as of December 31, 2016,2021, has decreased to $538.7$364.6 million as of December 31, 2017.2022. As a percentage of our overall debt, our interest rate risk exposure has decreased as our variable-rate debt accounted for 42.9% of our consolidated debt as of December 31, 2016, and decreased2021 compared to 37.5%20.2% as of December 31, 2017.
61
ITEM 8. FINANCIAL STATEMENTS.
ACADIA REALTY TRUST AND SUBSIDIARIES
INDEX TO FINANCIAL STATEMENTS
Page | |
Financial Statements: | ||
63 | ||
65 | ||
66 | ||
67 | ||
68 | ||
70 | ||
72 | ||
Financial Statement Schedules: | ||
118 | ||
119 | ||
124 |
62
Report of Independent Registered Public Accounting Firm
Shareholders and Board of Trustees of
Acadia Realty Trust
Rye, New York
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheets of Acadia Realty Trust and subsidiaries (the “Company”) as of December 31, 20172022 and 2016, and2021, the related consolidated statements of income,operations, comprehensive income (loss), changes in shareholders’ equity, and cash flows for each of the three years in the period ended December 31, 20172022, and the related notes and financial statement schedules listed in the Index at Item 15accompanying index (collectively referred to as the “financial“consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 20172022 and 2016,2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2017
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’sCompany's internal control over financial reporting as of December 31, 2017,2022, based on criteria established in
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Assessment of Impairment of Real Estate and Real Estate Related Investments
As described in Notes 2, 4 and 6 to the consolidated financial statements, as of December 31, 2022, the Company’s net investment in real estate was $3.5 billion, the net carrying value of intangible lease assets was $0.1 billion, and the carrying value of investments in and advances to unconsolidated affiliates was $0.3 billion. The Company tests the recoverability of the real estate and intangible lease assets held by the Company and its unconsolidated affiliates, whenever events or changes in circumstances indicate that amounts may not be recoverable. The Company identified impairment indicators, which resulted in the Company recording impairment charges of $33.3 million in 2022 related to its consolidated real estate investments and $50.8 million, representing the Company’s share of real estate impairment related to its unconsolidated affiliate.
63
We identified the assessment of impairment of the real estate and intangible lease assets held by the Company and its unconsolidated affiliates as a critical audit matter due to the complexity of management’s judgments relating to: (i) the assessment of impairment indicators for the real estate and intangible lease assets held by the Company and its unconsolidated affiliates, including long-term vacancy, recurring negative cash flows and tenant bankruptcies, (ii) the assessment of assumptions used in the expected future undiscounted cash flows for certain properties, and (iii) the assessment of assumptions used in the measurement of impairment of certain properties, including discount rates, market rents and capitalization rates, given the inherent uncertainties that exist related to the Company’s forecasts and how various economic and other factors could affect the Company’s forecasted future cash flows. Auditing management’s assumptions relating to its assessment of potential impairment indicators, market rents and capitalization rates used in the cash flow projections, and the discount rates used in the measurement of impairment, involved especially challenging auditor judgment due to the nature and extent of audit effort required to address these matters, including the extent of specialized skill or knowledge required.
The primary procedures we performed to address this critical audit matter included:
/s/ BDO USA, LLP
We have served as the Company’sCompany's auditor since 2005.
March 1, 2023
64
ACADIA REALTY TRUST AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
|
| December 31, |
|
| December 31, |
| ||
(dollars in thousands, except per share amounts) |
| 2022 |
|
| 2021 |
| ||
ASSETS |
|
|
|
|
|
| ||
Investments in real estate, at cost |
|
|
|
|
|
| ||
Operating real estate, net |
| $ | 3,343,265 |
|
| $ | 3,219,373 |
|
Real estate under development |
|
| 184,602 |
|
|
| 203,773 |
|
Net investments in real estate |
|
| 3,527,867 |
|
|
| 3,423,146 |
|
Notes receivable, net |
|
| 123,903 |
|
|
| 153,886 |
|
Investments in and advances to unconsolidated affiliates |
|
| 291,156 |
|
|
| 322,326 |
|
Other assets, net |
|
| 229,591 |
|
|
| 186,509 |
|
Right-of-use assets - operating leases, net |
|
| 37,281 |
|
|
| 40,743 |
|
Cash and cash equivalents |
|
| 17,158 |
|
|
| 17,746 |
|
Restricted cash |
|
| 15,063 |
|
|
| 9,813 |
|
Rents receivable, net |
|
| 49,506 |
|
|
| 43,625 |
|
Assets of properties held for sale |
|
| 11,057 |
|
|
| 63,952 |
|
Total assets (a) |
| $ | 4,302,582 |
|
| $ | 4,261,746 |
|
|
|
|
|
|
|
| ||
LIABILITIES |
|
|
|
|
|
| ||
Mortgage and other notes payable, net |
| $ | 928,639 |
|
| $ | 1,140,293 |
|
Unsecured notes payable, net |
|
| 696,134 |
|
|
| 559,040 |
|
Unsecured line of credit |
|
| 168,287 |
|
|
| 112,905 |
|
Accounts payable and other liabilities |
|
| 196,491 |
|
|
| 236,415 |
|
Lease liability - operating leases, net |
|
| 35,271 |
|
|
| 38,759 |
|
Dividends and distributions payable |
|
| 18,395 |
|
|
| 14,460 |
|
Distributions in excess of income from, and investments in, unconsolidated affiliates |
|
| 10,505 |
|
|
| 9,939 |
|
Total liabilities (a) |
|
| 2,053,722 |
|
|
| 2,111,811 |
|
Commitments and contingencies |
|
|
|
|
|
| ||
Redeemable noncontrolling interests |
|
| 67,664 |
|
|
| — |
|
EQUITY |
|
|
|
|
|
| ||
Acadia Shareholders' Equity |
|
|
|
|
|
| ||
Common shares, $0.001 par value per share, authorized 200,000,000 shares, issued and outstanding 95,120,773 and 89,303,545 shares, respectively |
|
| 95 |
|
|
| 89 |
|
Additional paid-in capital |
|
| 1,945,322 |
|
|
| 1,754,383 |
|
Accumulated other comprehensive income (loss) |
|
| 46,817 |
|
|
| (36,214 | ) |
Distributions in excess of accumulated earnings |
|
| (300,402 | ) |
|
| (196,645 | ) |
Total Acadia shareholders’ equity |
|
| 1,691,832 |
|
|
| 1,521,613 |
|
Noncontrolling interests |
|
| 489,364 |
|
|
| 628,322 |
|
Total equity |
|
| 2,181,196 |
|
|
| 2,149,935 |
|
Total liabilities, equity and redeemable noncontrolling interests |
| $ | 4,302,582 |
|
| $ | 4,261,746 |
|
December 31, | ||||||||
(dollars in thousands, except per share amounts) | 2017 | 2016 | ||||||
ASSETS | ||||||||
Investments in real estate, at cost | ||||||||
Operating real estate, net | $ | 2,952,918 | $ | 2,551,448 | ||||
Real estate under development | 173,702 | 543,486 | ||||||
Net investments in real estate | 3,126,620 | 3,094,934 | ||||||
Notes receivable, net | 153,829 | 276,163 | ||||||
Investments in and advances to unconsolidated affiliates | 302,070 | 272,028 | ||||||
Other assets, net | 214,959 | 192,786 | ||||||
Cash and cash equivalents | 74,823 | 71,805 | ||||||
Rents receivable, net | 51,738 | 43,842 | ||||||
Restricted cash | 10,846 | 22,904 | ||||||
Assets of properties held for sale | 25,362 | 21,498 | ||||||
Total assets | $ | 3,960,247 | $ | 3,995,960 | ||||
LIABILITIES | ||||||||
Mortgage and other notes payable, net | $ | 909,174 | $ | 1,055,728 | ||||
Unsecured notes payable, net | 473,735 | 432,990 | ||||||
Unsecured line of credit | 41,500 | — | ||||||
Accounts payable and other liabilities | 210,052 | 208,672 | ||||||
Capital lease obligation | 70,611 | 70,129 | ||||||
Dividends and distributions payable | 24,244 | 36,625 | ||||||
Distributions in excess of income from, and investments in, unconsolidated affiliates | 15,292 | 13,691 | ||||||
Total liabilities | 1,744,608 | 1,817,835 | ||||||
Commitments and contingencies | ||||||||
EQUITY | ||||||||
Acadia Shareholders' Equity | ||||||||
Common shares, $0.001 par value, authorized 200,000,000 and 100,000,000 shares, issued and outstanding 83,708,140 and 83,597,741 shares, respectively | 84 | 84 | ||||||
Additional paid-in capital | 1,596,514 | 1,594,926 | ||||||
Accumulated other comprehensive loss | 2,614 | (798 | ) | |||||
Distributions in excess of accumulated earnings | (32,013 | ) | (5,635 | ) | ||||
Total Acadia shareholders’ equity | 1,567,199 | 1,588,577 | ||||||
Noncontrolling interests | 648,440 | 589,548 | ||||||
Total equity | 2,215,639 | 2,178,125 | ||||||
Total liabilities and equity | $ | 3,960,247 | $ | 3,995,960 |
The accompanying notes are an integral part of these consolidated financial statements
65
ACADIA REALTY TRUST AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
Year Ended December 31, | ||||||||||||
(in thousands except per share amounts) | 2017 | 2016 | 2015 | |||||||||
Revenues | ||||||||||||
Rental income | $ | 198,941 | $ | 152,814 | $ | 158,632 | ||||||
Expense reimbursements | 44,907 | 32,282 | 36,306 | |||||||||
Other | 6,414 | 4,843 | 4,125 | |||||||||
Total revenues | 250,262 | 189,939 | 199,063 | |||||||||
Operating expenses | ||||||||||||
Depreciation and amortization | 104,934 | 70,011 | 60,751 | |||||||||
General and administrative | 33,756 | 40,648 | 30,368 | |||||||||
Real estate taxes | 35,946 | 25,630 | 25,384 | |||||||||
Property operating | 41,668 | 24,244 | 28,423 | |||||||||
Other operating | 2,184 | 7,517 | 4,675 | |||||||||
Impairment charges | 14,455 | — | 5,000 | |||||||||
Total operating expenses | 232,943 | 168,050 | 154,601 | |||||||||
Operating income | 17,319 | 21,889 | 44,462 | |||||||||
Equity in earnings and gains of unconsolidated affiliates inclusive of gains on disposition of properties of $15,336, $35,950 and $24,043, respectively | 23,371 | 39,449 | 37,330 | |||||||||
Interest income | 29,143 | 25,829 | 16,603 | |||||||||
Interest expense | (58,978 | ) | (34,645 | ) | (37,297 | ) | ||||||
Gain on change in control and other | 5,571 | — | 1,596 | |||||||||
Income from continuing operations before income taxes | 16,426 | 52,522 | 62,694 | |||||||||
Income tax (provision) benefit | (1,004 | ) | 105 | (1,787 | ) | |||||||
Income from continuing operations before gain on disposition of properties | 15,422 | 52,627 | 60,907 | |||||||||
Gain on disposition of properties, net of tax | 48,886 | 81,965 | 89,063 | |||||||||
Net income | 64,308 | 134,592 | 149,970 | |||||||||
Net income attributable to noncontrolling interests | (2,838 | ) | (61,816 | ) | (84,262 | ) | ||||||
Net income attributable to Acadia | $ | 61,470 | $ | 72,776 | $ | 65,708 | ||||||
Basic and diluted earnings per share | $ | 0.73 | $ | 0.94 | $ | 0.94 |
|
| Year Ended December 31, |
| |||||||||
(in thousands except per share amounts) |
| 2022 |
|
| 2021 |
|
| 2020 |
| |||
Revenues |
|
|
|
|
|
|
|
|
| |||
Rental income |
| $ | 317,814 |
|
| $ | 285,898 |
|
| $ | 246,432 |
|
Other |
|
| 8,476 |
|
|
| 6,599 |
|
|
| 4,476 |
|
Total revenues |
|
| 326,290 |
|
|
| 292,497 |
|
|
| 250,908 |
|
Operating expenses |
|
|
|
|
|
|
|
|
| |||
Depreciation and amortization |
|
| 135,917 |
|
|
| 123,439 |
|
|
| 147,229 |
|
General and administrative |
|
| 44,066 |
|
|
| 40,125 |
|
|
| 35,798 |
|
Real estate taxes |
|
| 44,932 |
|
|
| 45,357 |
|
|
| 42,477 |
|
Property operating |
|
| 56,995 |
|
|
| 53,516 |
|
|
| 55,551 |
|
Impairment charges |
|
| 33,311 |
|
|
| 9,925 |
|
|
| 85,598 |
|
Total operating expenses |
|
| 315,221 |
|
|
| 272,362 |
|
|
| 366,653 |
|
|
|
|
|
|
|
|
|
|
| |||
Gain on disposition of properties |
|
| 57,161 |
|
|
| 10,521 |
|
|
| 683 |
|
Operating Income (loss) |
|
| 68,230 |
|
|
| 30,656 |
|
|
| (115,062 | ) |
Equity in (losses) earnings of unconsolidated affiliates |
|
| (32,907 | ) |
|
| 5,330 |
|
|
| (3,057 | ) |
Interest income |
|
| 14,641 |
|
|
| 9,065 |
|
|
| 8,979 |
|
Realized and unrealized holding (losses) gains on investments and other |
|
| (34,994 | ) |
|
| 49,120 |
|
|
| 113,362 |
|
Interest expense |
|
| (80,209 | ) |
|
| (68,048 | ) |
|
| (69,671 | ) |
(Loss) income from continuing operations before income taxes |
|
| (65,239 | ) |
|
| 26,123 |
|
|
| (65,449 | ) |
Income tax provision |
|
| (12 | ) |
|
| (93 | ) |
|
| (269 | ) |
Net (loss) income |
|
| (65,251 | ) |
|
| 26,030 |
|
|
| (65,718 | ) |
Net loss attributable to redeemable noncontrolling interests |
|
| 5,536 |
|
|
| — |
|
|
| — |
|
Net loss (income) attributable to noncontrolling interests |
|
| 24,270 |
|
|
| (2,482 | ) |
|
| 56,742 |
|
Net (loss) income attributable to Acadia |
| $ | (35,445 | ) |
| $ | 23,548 |
|
| $ | (8,976 | ) |
|
|
|
|
|
|
|
|
|
| |||
Basic (loss) earnings per share |
| $ | (0.38 | ) |
| $ | 0.26 |
|
| $ | (0.11 | ) |
Diluted (loss) earnings per share |
| $ | (0.40 | ) |
| $ | 0.26 |
|
| $ | (0.11 | ) |
The accompanying notes are an integral part of these consolidated financial statements
66
ACADIA REALTY TRUST AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Year Ended December 31, | ||||||||||||
(in thousands) | 2017 | 2016 | 2015 | |||||||||
Net income | $ | 64,308 | $ | 134,592 | $ | 149,970 | ||||||
Other comprehensive income (loss): | ||||||||||||
Unrealized income (loss) on valuation of swap agreements | 634 | (646 | ) | (5,061 | ) | |||||||
Reclassification of realized interest on swap agreements | 3,317 | 4,576 | 5,524 | |||||||||
Other comprehensive income | 3,951 | 3,930 | 463 | |||||||||
Comprehensive income | 68,259 | 138,522 | 150,433 | |||||||||
Comprehensive income attributable to noncontrolling interests | (3,377 | ) | (62,081 | ) | (85,183 | ) | ||||||
Comprehensive income attributable to Acadia | $ | 64,882 | $ | 76,441 | $ | 65,250 |
|
| Year Ended December 31, |
| |||||||||
(in thousands) |
| 2022 |
|
| 2021 |
|
| 2020 |
| |||
|
|
|
|
|
|
|
|
|
| |||
Net (loss) income |
| $ | (65,251 | ) |
| $ | 26,030 |
|
| $ | (65,718 | ) |
Other comprehensive income (loss): |
|
|
|
|
|
|
|
|
| |||
Unrealized gain (loss) on valuation of swap agreements |
|
| 96,858 |
|
|
| 30,500 |
|
|
| (73,686 | ) |
Reclassification of realized interest on swap agreements |
|
| 8,232 |
|
|
| 21,407 |
|
|
| 15,059 |
|
Other comprehensive income (loss) |
|
| 105,090 |
|
|
| 51,907 |
|
|
| (58,627 | ) |
Comprehensive income (loss) |
|
| 39,839 |
|
|
| 77,937 |
|
|
| (124,345 | ) |
Comprehensive loss attributable to redeemable noncontrolling interests |
|
| 5,536 |
|
|
| — |
|
|
| — |
|
Comprehensive loss (income) attributable to noncontrolling interests |
|
| 2,211 |
|
|
| (15,712 | ) |
|
| 71,952 |
|
Comprehensive income (loss) attributable to Acadia |
| $ | 47,586 |
|
| $ | 62,225 |
|
| $ | (52,393 | ) |
The accompanying notes are an integral part of these consolidated financial statements.
67
ACADIA REALTY TRUST AND SUBSIDIARIES
Years Ended December 31, 2017, 20162022, 2021 and 2015
Acadia Shareholders | ||||||||||||||||||||||||||||||
(in thousands, except per share amounts) | Common Shares | Share Amount | Additional Paid-in Capital | Accumulated Other Comprehensive (Loss) Income | (Distributions in Excess of Accumulated Earnings) Retained Earnings | Total Common Shareholders’ Equity | Noncontrolling Interests | Total Equity | ||||||||||||||||||||||
Balance at January 1, 2017 | 83,598 | $ | 84 | $ | 1,594,926 | $ | (798 | ) | $ | (5,635 | ) | $ | 1,588,577 | $ | 589,548 | $ | 2,178,125 | |||||||||||||
Conversion of OP Units to Common Shares by limited partners of the Operating Partnership | 87 | — | 1,541 | — | — | 1,541 | (1,541 | ) | — | |||||||||||||||||||||
Dividends/distributions declared ($1.05 per Common Share/OP Unit) | — | — | — | — | (87,848 | ) | (87,848 | ) | (6,453 | ) | (94,301 | ) | ||||||||||||||||||
Employee and trustee stock compensation, net | 23 | — | 698 | — | — | 698 | 10,457 | 11,155 | ||||||||||||||||||||||
Noncontrolling interest distributions | — | — | — | — | — | — | (32,805 | ) | (32,805 | ) | ||||||||||||||||||||
Noncontrolling interest contributions | — | — | — | — | — | — | 85,206 | 85,206 | ||||||||||||||||||||||
Reallocation of noncontrolling interests | — | — | (651 | ) | — | — | (651 | ) | 651 | — | ||||||||||||||||||||
Comprehensive income | — | — | — | 3,412 | 61,470 | 64,882 | 3,377 | 68,259 | ||||||||||||||||||||||
Balance at December 31, 2017 | 83,708 | $ | 84 | $ | 1,596,514 | $ | 2,614 | $ | (32,013 | ) | $ | 1,567,199 | $ | 648,440 | $ | 2,215,639 | ||||||||||||||
Balance at January 1, 2016 | 70,258 | $ | 70 | $ | 1,092,239 | $ | (4,463 | ) | $ | 12,642 | $ | 1,100,488 | $ | 420,866 | $ | 1,521,354 | ||||||||||||||
Conversion of OP Units to Common Shares by limited partners of the Operating Partnership | 351 | 1 | 7,891 | — | — | 7,892 | (7,892 | ) | — | |||||||||||||||||||||
Issuance of Common Shares, net of issuance costs | 12,961 | 13 | 450,117 | — | — | 450,130 | — | 450,130 | ||||||||||||||||||||||
Issuance of OP Units to acquire real estate | — | — | — | — | — | — | 31,429 | 31,429 | ||||||||||||||||||||||
Dividends/distributions declared ($1.16 per Common Share/OP Unit) | — | — | — | — | (91,053 | ) | (91,053 | ) | (6,753 | ) | (97,806 | ) | ||||||||||||||||||
Acquisition of noncontrolling interests | — | — | 7,546 | — | — | 7,546 | (25,925 | ) | (18,379 | ) | ||||||||||||||||||||
Employee and trustee stock compensation, net | 28 | — | 926 | — | — | 926 | 12,768 | 13,694 | ||||||||||||||||||||||
Change in control of previously unconsolidated investment | — | — | — | — | — | — | (75,713 | ) | (75,713 | ) | ||||||||||||||||||||
Windfall tax benefit | — | — | 555 | — | — | 555 | — | 555 | ||||||||||||||||||||||
Noncontrolling interest distributions | — | — | — | — | — | — | (80,769 | ) | (80,769 | ) | ||||||||||||||||||||
Noncontrolling interest contributions | — | — | — | — | — | — | 295,108 | 295,108 | ||||||||||||||||||||||
Comprehensive income | — | — | — | 3,665 | 72,776 | 76,441 | 62,081 | 138,522 | ||||||||||||||||||||||
Reallocation of noncontrolling interests | — | — | 35,652 | — | — | 35,652 | (35,652 | ) | — | |||||||||||||||||||||
Balance at December 31, 2016 | 83,598 | $ | 84 | $ | 1,594,926 | $ | (798 | ) | $ | (5,635 | ) | $ | 1,588,577 | $ | 589,548 | $ | 2,178,125 | |||||||||||||
|
| Acadia Shareholders |
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||
(in thousands, except per share amounts) |
| Common |
|
| Share |
|
| Additional |
|
| Accumulated |
|
| Distributions |
|
| Total |
|
| Noncontrolling |
|
| Total |
|
| Redeemable Noncontrolling Interest |
| |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Balance at January 1, 2022 |
|
| 89,304 |
|
| $ | 89 |
|
| $ | 1,754,383 |
|
| $ | (36,214 | ) |
| $ | (196,645 | ) |
| $ | 1,521,613 |
|
| $ | 628,322 |
|
| $ | 2,149,935 |
|
| $ | — |
|
Issuance of Common Shares, net |
|
| 5,525 |
|
|
| 6 |
|
|
| 119,479 |
|
|
| — |
|
|
| — |
|
|
| 119,485 |
|
|
| — |
|
|
| 119,485 |
|
|
| — |
|
Conversion of OP Units to Common Shares by limited partners of the Operating Partnership |
|
| 235 |
|
|
| — |
|
|
| 3,945 |
|
|
| — |
|
|
| — |
|
|
| 3,945 |
|
|
| (3,945 | ) |
|
| — |
|
|
| — |
|
Dividends/distributions declared ($0.72 per Common Share/OP Unit) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (68,312 | ) |
|
| (68,312 | ) |
|
| (5,094 | ) |
|
| (73,406 | ) |
|
| — |
|
Acquisition of noncontrolling interest |
|
| — |
|
|
| — |
|
|
| 67,475 |
|
|
| — |
|
|
| — |
|
|
| 67,475 |
|
|
| (91,811 | ) |
|
| (24,336 | ) |
|
| — |
|
City Point Loan |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (65,391 | ) |
City Point Loan accrued interest |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (3,923 | ) |
Employee and trustee stock compensation, net |
|
| 57 |
|
|
| — |
|
|
| 1,122 |
|
|
| — |
|
|
| — |
|
|
| 1,122 |
|
|
| 10,000 |
|
|
| 11,122 |
|
|
| — |
|
Noncontrolling interest distributions |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (79,838 | ) |
|
| (79,838 | ) |
|
| — |
|
Noncontrolling interest contributions |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 109,428 |
|
|
| 109,428 |
|
|
| 65,945 |
|
Comprehensive income (loss) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 83,031 |
|
|
| (35,445 | ) |
|
| 47,586 |
|
|
| (2,211 | ) |
|
| 45,375 |
|
|
| (5,536 | ) |
Reclassification of redeemable noncontrolling interests |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (76,569 | ) |
|
| (76,569 | ) |
|
| 76,569 |
|
Reallocation of noncontrolling interests |
|
| — |
|
|
| — |
|
|
| (1,082 | ) |
|
| — |
|
|
| — |
|
|
| (1,082 | ) |
|
| 1,082 |
|
|
| — |
|
|
| — |
|
Balance at December 31, 2022 |
|
| 95,121 |
|
| $ | 95 |
|
| $ | 1,945,322 |
|
| $ | 46,817 |
|
| $ | (300,402 | ) |
| $ | 1,691,832 |
|
| $ | 489,364 |
|
| $ | 2,181,196 |
|
| $ | 67,664 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Balance at January 1, 2021 |
|
| 86,269 |
|
| $ | 86 |
|
| $ | 1,683,165 |
|
| $ | (74,891 | ) |
| $ | (167,321 | ) |
| $ | 1,441,039 |
|
| $ | 609,165 |
|
| $ | 2,050,204 |
|
| $ | — |
|
Conversion of OP Units to Common Shares by limited partners of the Operating Partnership |
|
| 90 |
|
|
| — |
|
|
| 1,431 |
|
|
| — |
|
|
| — |
|
|
| 1,431 |
|
|
| (1,431 | ) |
|
| — |
|
|
| — |
|
Cancellation of OP Units |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (568 | ) |
|
| (568 | ) |
|
| — |
|
Issuance of Common Shares |
|
| 2,889 |
|
|
| 3 |
|
|
| 63,873 |
|
|
| — |
|
|
| — |
|
|
| 63,876 |
|
|
| — |
|
|
| 63,876 |
|
|
| — |
|
Dividends/distributions declared ($0.60 per Common Share/OP Unit) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (52,872 | ) |
|
| (52,872 | ) |
|
| (4,185 | ) |
|
| (57,057 | ) |
|
| — |
|
Employee and trustee stock compensation, net |
|
| 56 |
|
|
| — |
|
|
| 1,146 |
|
|
| — |
|
|
| — |
|
|
| 1,146 |
|
|
| 11,284 |
|
|
| 12,430 |
|
|
| — |
|
Noncontrolling interest distributions |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (27,051 | ) |
|
| (27,051 | ) |
|
| — |
|
Noncontrolling interest contributions |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 30,164 |
|
|
| 30,164 |
|
|
| — |
|
Comprehensive income |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 38,677 |
|
|
| 23,548 |
|
|
| 62,225 |
|
|
| 15,712 |
|
|
| 77,937 |
|
|
| — |
|
Reallocation of noncontrolling interests |
|
| — |
|
|
| — |
|
|
| 4,768 |
|
|
| — |
|
|
| — |
|
|
| 4,768 |
|
|
| (4,768 | ) |
|
| — |
|
|
| — |
|
Balance at December 31, 2021 |
|
| 89,304 |
|
| $ | 89 |
|
| $ | 1,754,383 |
|
| $ | (36,214 | ) |
| $ | (196,645 | ) |
| $ | 1,521,613 |
|
| $ | 628,322 |
|
| $ | 2,149,935 |
|
| $ | — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
68
Acadia Shareholders | ||||||||||||||||||||||||||||||
(in thousands, except per share amounts) | Common Shares | Share Amount | Additional Paid-in Capital | Accumulated Other Comprehensive (Loss) Income | (Distributions in Excess of Accumulated Earnings) Retained Earnings | Total Common Shareholders’ Equity | Noncontrolling Interests | Total Equity | ||||||||||||||||||||||
(Continued) | ||||||||||||||||||||||||||||||
Balance at January 1, 2015 | 68,109 | $ | 68 | $ | 1,027,861 | $ | (4,005 | ) | $ | 31,617 | $ | 1,055,541 | $ | 380,416 | $ | 1,435,957 | ||||||||||||||
Conversion of OP Units to Common Shares by limited partners of the Operating Partnership | 101 | — | 2,451 | — | — | 2,451 | (2,451 | ) | — | |||||||||||||||||||||
Issuance of Common Shares, net of issuance costs | 1,973 | 2 | 64,415 | — | — | 64,417 | — | 64,417 | ||||||||||||||||||||||
Acquisition of noncontrolling interests | — | — | (4,409 | ) | — | — | (4,409 | ) | (3,561 | ) | (7,970 | ) | ||||||||||||||||||
Dividends/distributions declared ($1.22 per Common Share/OP Unit) | — | — | — | — | (84,683 | ) | (84,683 | ) | (5,983 | ) | (90,666 | ) | ||||||||||||||||||
Employee and trustee stock compensation, net | 75 | — | 1,921 | — | — | 1,921 | 6,723 | 8,644 | ||||||||||||||||||||||
Noncontrolling interest distributions | — | — | — | — | — | — | (74,950 | ) | (74,950 | ) | ||||||||||||||||||||
Noncontrolling interest contributions | — | — | — | — | — | — | 35,489 | 35,489 | ||||||||||||||||||||||
Comprehensive (loss) income | — | — | — | (458 | ) | 65,708 | 65,250 | 85,183 | 150,433 | |||||||||||||||||||||
Balance at December 31, 2015 | 70,258 | $ | 70 | $ | 1,092,239 | $ | (4,463 | ) | $ | 12,642 | $ | 1,100,488 | $ | 420,866 | $ | 1,521,354 |
|
| Acadia Shareholders |
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||
(in thousands, except per share amounts) |
| Common |
|
| Share |
|
| Additional |
|
| Accumulated |
|
| Distributions |
|
| Total |
|
| Noncontrolling |
|
| Total |
|
| Redeemable Noncontrolling Interest |
| |||||||||
Balance at January 1, 2020 |
|
| 87,050 |
|
| $ | 87 |
|
| $ | 1,706,357 |
|
| $ | (31,474 | ) |
| $ | (133,019 | ) |
| $ | 1,541,951 |
|
| $ | 646,439 |
|
| $ | 2,188,390 |
|
| $ | — |
|
Conversion of OP Units to Common Shares by limited partners of the Operating Partnership |
|
| 408 |
|
|
| — |
|
|
| 6,544 |
|
|
| — |
|
|
| — |
|
|
| 6,544 |
|
|
| (6,544 | ) |
|
| — |
|
|
| — |
|
Cumulative effect of change in accounting principle |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (389 | ) |
|
| (389 | ) |
|
| (11 | ) |
|
| (400 | ) |
|
| — |
|
Dividends/distributions declared ($0.29 per Common Share/OP Unit) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (24,937 | ) |
|
| (24,937 | ) |
|
| (2,218 | ) |
|
| (27,155 | ) |
|
| — |
|
Employee and trustee stock compensation, net |
|
| 30 |
|
|
| — |
|
|
| 782 |
|
|
| — |
|
|
| — |
|
|
| 782 |
|
|
| 10,130 |
|
|
| 10,912 |
|
|
| — |
|
Repurchase of Common Shares |
|
| (1,219 | ) |
|
| (1 | ) |
|
| (22,385 | ) |
|
| — |
|
|
| — |
|
|
| (22,386 | ) |
|
| — |
|
|
| (22,386 | ) |
|
| — |
|
Acquisition of noncontrolling interest |
|
| — |
|
|
| — |
|
|
| (15,330 | ) |
|
| — |
|
|
| — |
|
|
| (15,330 | ) |
|
| 15,918 |
|
|
| 588 |
|
|
| — |
|
Noncontrolling interest distributions |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (27,574 | ) |
|
| (27,574 | ) |
|
| — |
|
Noncontrolling interest contributions |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 52,174 |
|
|
| 52,174 |
|
|
| — |
|
Comprehensive (loss) income |
|
| — |
|
|
| — |
|
|
| — |
|
|
| (43,417 | ) |
|
| (8,976 | ) |
|
| (52,393 | ) |
|
| (71,952 | ) |
|
| (124,345 | ) |
|
| — |
|
Reallocation of noncontrolling interests |
|
| — |
|
|
| — |
|
|
| 7,197 |
|
|
| — |
|
|
| — |
|
|
| 7,197 |
|
|
| (7,197 | ) |
|
| — |
|
|
| — |
|
Balance at December 31, 2020 |
|
| 86,269 |
|
| $ | 86 |
|
| $ | 1,683,165 |
|
| $ | (74,891 | ) |
| $ | (167,321 | ) |
| $ | 1,441,039 |
|
| $ | 609,165 |
|
| $ | 2,050,204 |
|
| $ | — |
|
The accompanying notes are an integral part of these consolidated financial statements.
69
ACADIA REALTY TRUST AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended December 31, | ||||||||||||
(in thousands) | 2017 | 2016 | 2015 | |||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||||||
Net income | $ | 64,308 | $ | 134,592 | $ | 149,970 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
Gain on disposition of properties | (48,886 | ) | (81,965 | ) | (89,063 | ) | ||||||
Gain on change in control | (5,571 | ) | — | — | ||||||||
Depreciation and amortization | 104,934 | 70,011 | 60,751 | |||||||||
Distributions of operating income from unconsolidated affiliates | 9,249 | 7,256 | 12,291 | |||||||||
Equity in earnings and gains of unconsolidated affiliates | (23,371 | ) | (39,449 | ) | (37,330 | ) | ||||||
Stock compensation expense | 11,155 | 13,695 | 7,438 | |||||||||
Amortization of financing costs | 5,985 | 3,204 | 3,537 | |||||||||
Impairment charges | 14,455 | — | 5,000 | |||||||||
Other, net | (10,610 | ) | (8,095 | ) | (6,483 | ) | ||||||
Changes in assets and liabilities: | ||||||||||||
Other liabilities | (4,285 | ) | 26,532 | 5,354 | ||||||||
Prepaid expenses and other assets | (6,498 | ) | (11,677 | ) | 12,690 | |||||||
Rents receivable, net | (11,274 | ) | (4,847 | ) | (5,673 | ) | ||||||
Restricted cash | 11,474 | 1,912 | (6,168 | ) | ||||||||
Accounts payable and accrued expenses | 8,768 | 591 | 1,284 | |||||||||
Net cash provided by operating activities | 119,833 | 111,760 | 113,598 | |||||||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||||||
Acquisition of real estate | (200,429 | ) | (495,644 | ) | (338,700 | ) | ||||||
Development and property improvement costs | (108,142 | ) | (149,434 | ) | (164,315 | ) | ||||||
Issuance of or advances on notes receivable | (10,600 | ) | (157,352 | ) | (48,500 | ) | ||||||
Proceeds from the disposition of properties | 260,711 | 150,378 | 168,895 | |||||||||
Investments in and advances to unconsolidated affiliates | (6,535 | ) | (72,098 | ) | (24,168 | ) | ||||||
Return of capital from unconsolidated affiliates | 23,946 | 54,444 | 11,892 | |||||||||
Proceeds from notes receivable | 32,000 | 42,819 | 15,984 | |||||||||
Deposits for properties under contract | (2,000 | ) | 1,424 | (5,776 | ) | |||||||
Proceeds from disposition of properties of unconsolidated affiliates | 26,045 | 24,586 | 38,392 | |||||||||
Payment of deferred leasing costs | (5,202 | ) | (7,515 | ) | (8,207 | ) | ||||||
Change in control of previously unconsolidated (consolidated) affiliate | 288 | (2,578 | ) | — | ||||||||
Net cash provided by (used in) investing activities | 10,082 | (610,970 | ) | (354,503 | ) |
|
| Year Ended December 31, |
| |||||||||
(in thousands) |
| 2022 |
|
| 2021 |
|
| 2020 |
| |||
CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
|
|
|
|
|
|
| |||
Net (loss) income |
| $ | (65,251 | ) |
| $ | 26,030 |
|
| $ | (65,718 | ) |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
| |||
Depreciation and amortization |
|
| 135,917 |
|
|
| 123,439 |
|
|
| 147,229 |
|
Gain on disposition of properties and other investments |
|
| (58,634 | ) |
|
| (10,521 | ) |
|
| (683 | ) |
Net unrealized holding losses (gains) on investments |
|
| 37,751 |
|
|
| (51,925 | ) |
|
| (72,391 | ) |
Stock compensation expense |
|
| 11,122 |
|
|
| 12,430 |
|
|
| 10,912 |
|
Straight-line rents |
|
| (8,669 | ) |
|
| (6,726 | ) |
|
| (4,869 | ) |
Equity in losses (earnings) of unconsolidated affiliates |
|
| 32,907 |
|
|
| (5,330 | ) |
|
| 3,057 |
|
Distributions of operating income from unconsolidated affiliates |
|
| 24,179 |
|
|
| 3,828 |
|
|
| 3,286 |
|
Adjustments to straight-line rent reserves |
|
| (292 | ) |
|
| 2,682 |
|
|
| 21,871 |
|
Amortization of financing costs |
|
| 5,639 |
|
|
| 4,396 |
|
|
| 5,038 |
|
Non-cash lease expense |
|
| 3,462 |
|
|
| 3,721 |
|
|
| 3,392 |
|
Adjustments to allowance for credit loss |
|
| (102 | ) |
|
| (2,796 | ) |
|
| 24,569 |
|
Impairment charges |
|
| 33,311 |
|
|
| 9,925 |
|
|
| 85,598 |
|
Termination of ground lease |
|
| — |
|
|
| (3,615 | ) |
|
| — |
|
Gain on debt extinguishment |
|
| — |
|
|
| — |
|
|
| (18,339 | ) |
Other, net |
|
| (7,675 | ) |
|
| (5,304 | ) |
|
| (8,155 | ) |
Changes in assets and liabilities: |
|
| — |
|
|
| — |
|
|
|
| |
Rents receivable |
|
| 1,586 |
|
|
| 7,384 |
|
|
| (28,321 | ) |
Other liabilities |
|
| (2,959 | ) |
|
| 7,856 |
|
|
| (3,959 | ) |
Accounts payable and accrued expenses |
|
| (2,141 | ) |
|
| 572 |
|
|
| 3,005 |
|
Prepaid expenses and other assets |
|
| (3,452 | ) |
|
| (7,427 | ) |
|
| 4 |
|
Lease liability - operating leases |
|
| (3,488 | ) |
|
| (3,636 | ) |
|
| (1,579 | ) |
Net cash provided by operating activities |
|
| 133,211 |
|
|
| 104,983 |
|
|
| 103,947 |
|
CASH FLOWS FROM INVESTING ACTIVITIES |
|
|
|
|
|
|
|
|
| |||
Acquisitions of real estate |
|
| (242,633 | ) |
|
| (161,846 | ) |
|
| (21,208 | ) |
Proceeds from the disposition of properties and other investments, net |
|
| 224,558 |
|
|
| 63,901 |
|
|
| 20,930 |
|
Investments in and advances to unconsolidated affiliates and other |
|
| (154,695 | ) |
|
| (14,835 | ) |
|
| (14,483 | ) |
Development, construction and property improvement costs |
|
| (51,046 | ) |
|
| (40,671 | ) |
|
| (36,579 | ) |
Deposits for properties under purchase contract |
|
| (729 | ) |
|
| — |
|
|
| 187 |
|
Deposits for properties under sales contract |
|
| 2,000 |
|
|
| — |
|
|
| — |
|
Change in control of previously unconsolidated affiliate |
|
| 3,592 |
|
|
| — |
|
|
| 950 |
|
Return of capital from unconsolidated affiliates and other |
|
| 77,774 |
|
|
| 17,722 |
|
|
| 14,686 |
|
Payment of deferred leasing costs |
|
| (7,997 | ) |
|
| (4,914 | ) |
|
| (6,407 | ) |
Acquisition of investment interests |
|
| (4,527 | ) |
|
| — |
|
|
| — |
|
Proceeds from notes receivable |
|
| 29,530 |
|
|
| — |
|
|
| — |
|
Issuance of notes receivable |
|
| — |
|
|
| (57,895 | ) |
|
| (59,000 | ) |
Net cash used in investing activities |
|
| (124,173 | ) |
|
| (198,538 | ) |
|
| (100,924 | ) |
CASH FLOWS FROM FINANCING ACTIVITIES |
|
|
|
|
|
|
|
|
| |||
Proceeds from unsecured debt |
|
| 850,120 |
|
|
| 323,200 |
|
|
| 236,804 |
|
Principal payments on unsecured debt |
|
| (656,556 | ) |
|
| (206,781 | ) |
|
| (136,490 | ) |
Proceeds from the sale (repurchase) of Common Shares |
|
| 119,485 |
|
|
| 63,876 |
|
|
| (22,386 | ) |
Capital contributions from noncontrolling interests |
|
| 109,428 |
|
|
| 30,164 |
|
|
| 52,174 |
|
Principal payments on mortgage and other notes |
|
| (447,998 | ) |
|
| (98,602 | ) |
|
| (51,949 | ) |
Distributions to noncontrolling interests |
|
| (84,723 | ) |
|
| (30,410 | ) |
|
| (31,461 | ) |
Dividends paid to Common Shareholders |
|
| (64,586 | ) |
|
| (39,476 | ) |
|
| (50,182 | ) |
Proceeds received from mortgage and other notes |
|
| 204,138 |
|
|
| 56,847 |
|
|
| 5,351 |
|
Deferred financing and other costs |
|
| (9,348 | ) |
|
| (7,436 | ) |
|
| (2,215 | ) |
Acquisition of noncontrolling interest |
|
| (24,336 | ) |
|
| — |
|
|
| — |
|
Payments of finance lease obligations |
|
| — |
|
|
| (63 | ) |
|
| (903 | ) |
Net cash (used in) provided by financing activities |
|
| (4,376 | ) |
|
| 91,319 |
|
|
| (1,257 | ) |
Increase (decrease) in cash and restricted cash |
|
| 4,662 |
|
|
| (2,236 | ) |
|
| 1,766 |
|
Cash of $17,746, $18,699 and $14,149 and restricted cash of $9,813, $11,096 and $13,880, respectively, beginning of year |
|
| 27,559 |
|
|
| 29,795 |
|
|
| 28,029 |
|
Cash of $17,158, $17,746 and $18,699 and restricted cash of $15,063, $9,813 and $11,096, respectively, end of year |
| $ | 32,221 |
|
| $ | 27,559 |
|
| $ | 29,795 |
|
70
ACADIA REALTY TRUST AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended December 31, | ||||||||||||
(Continued) | 2017 | 2016 | 2015 | |||||||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||||||
Principal payments on mortgage and other notes | (306,119 | ) | (394,864 | ) | (148,423 | ) | ||||||
Principal payments on unsecured debt | (277,134 | ) | (541,790 | ) | (234,815 | ) | ||||||
Proceeds received on mortgage and other notes | 156,344 | 222,071 | 90,234 | |||||||||
Proceeds from unsecured debt | 359,625 | 666,716 | 417,425 | |||||||||
Proceeds from issuance of Common Shares, net of issuance costs of $0, $9,238 and $1,150, respectively | — | 450,130 | 63,234 | |||||||||
Capital contributions from noncontrolling interests | 85,206 | 295,108 | 35,489 | |||||||||
Distributions to noncontrolling interests | (39,942 | ) | (105,994 | ) | (84,610 | ) | ||||||
Dividends paid to Common Shareholders | (99,527 | ) | (91,334 | ) | (86,353 | ) | ||||||
Deferred financing and other costs | (6,211 | ) | (11,678 | ) | (4,376 | ) | ||||||
Loan proceeds held as restricted cash | 861 | 9,874 | 48,676 | |||||||||
Purchase of convertible notes payable | — | — | (380 | ) | ||||||||
Net cash (used in) provided by financing activities | (126,897 | ) | 498,239 | 96,101 | ||||||||
Increase (decrease) in cash and cash equivalents | 3,018 | (971 | ) | (144,804 | ) | |||||||
Cash and cash equivalents, beginning of the year | 71,805 | 72,776 | 217,580 | |||||||||
Cash and cash equivalents, end of the year | $ | 74,823 | $ | 71,805 | $ | 72,776 | ||||||
Supplemental disclosure of cash flow information | ||||||||||||
Cash paid during the period for interest, net of capitalized interest of $13,509, $21,109 and $16,447, respectively | $ | 49,942 | $ | 42,279 | $ | 47,960 | ||||||
Cash paid for income taxes, net of (refunds) | $ | 875 | $ | 2,036 | $ | 2,038 | ||||||
Supplemental disclosure of non-cash investing activities | ||||||||||||
Acquisition of real estate through assumption of debt | $ | — | $ | 120,672 | $ | 91,885 | ||||||
Acquisition of real estate through issuance of OP Units | $ | — | $ | 29,336 | $ | — | ||||||
Acquisition of capital lease obligation | $ | — | $ | 76,461 | $ | — | ||||||
Mortgage debt financed at time of acquisition | $ | — | $ | 63,900 | $ | — | ||||||
Assumption of accounts payable and accrued expenses through acquisition of real estate | $ | 2,173 | $ | 3,587 | $ | — | ||||||
Assumption of prepaid expenses and other assets through acquisition of real estate | $ | 2,226 | $ | — | ||||||||
Disposition of air rights through issuance of notes receivable | $ | — | $ | (29,539 | ) | |||||||
Acquisition of real estate through assumption of restricted cash | $ | — | $ | (28,912 | ) | |||||||
Acquisition of real estate through conversion of note receivable | $ | 9,000 | $ | — | $ | 13,386 | ||||||
Acquisition of undivided interest in a property through conversion of notes receivable | $ | 60,695 | $ | — | $ | — | ||||||
Change in control of previously unconsolidated (consolidated) investment | ||||||||||||
(Increase) decrease in real estate, net | $ | (39,322 | ) | $ | 90,559 | $ | — | |||||
Gain on change in control | 5,571 | — | — | |||||||||
Decrease in notes receivable | 32,010 | — | — | |||||||||
Decrease (increase) in investments in and advances to unconsolidated affiliates | 4,159 | (21,421 | ) | — | ||||||||
Decrease in noncontrolling interest | — | (75,713 | ) | — | ||||||||
Change in other assets and liabilities | (2,130 | ) | 3,997 | — | ||||||||
Increase (decrease) in cash upon change of control | $ | 288 | $ | (2,578 | ) | $ | — | |||||
|
| Year Ended December 31, |
| |||||||||
(in thousands) |
| 2022 |
|
| 2021 |
|
| 2020 |
| |||
Supplemental disclosure of cash flow information |
|
|
|
|
|
|
|
|
| |||
Cash paid during the period for interest, net of capitalized interest of $4,166 and $3,421 and $7,110 respectively |
| $ | 65,109 |
|
| $ | 44,663 |
|
| $ | 70,383 |
|
Cash paid for income taxes, net of (refunds) |
| $ | 11 |
|
| $ | 147 |
|
| $ | (329 | ) |
|
|
|
|
|
|
|
|
|
| |||
Supplemental disclosure of non-cash investing and financing activities |
|
|
|
|
|
|
|
|
| |||
Distribution declared and payable on January 13, 2023, and January 14, 2022 and January 15, 2020, respectively |
| $ | 18,368 |
|
| $ | 14,314 |
|
| $ | 123 |
|
Assumption of accounts payable and accrued expenses through acquisition of real estate |
| $ | 4,062 |
|
| $ | 1,319 |
|
| $ | 116 |
|
Right-of-use assets, operating leases exchanged for operating lease liabilities |
| $ | — |
|
| $ | 412 |
|
| $ | 33,189 |
|
Issuance of note receivable used as capital contributions from redeemable noncontrolling interests |
| $ | 65,945 |
|
| $ | — |
|
| $ | — |
|
Accrued interest on note receivable recorded to redeemable noncontrolling interest |
| $ | 3,923 |
|
| $ | — |
|
| $ | — |
|
Reclassification of non-controlling interest in excess of amount paid to additional paid-in capital |
| $ | 67,475 |
|
| $ | — |
|
| $ | — |
|
Adjustment to equity as a result of the implementation of CECL (defined below) |
| $ | — |
|
| $ | — |
|
| $ | 400 |
|
Note receivable exchanged for real estate |
| $ | — |
|
| $ | — |
|
| $ | 72,430 |
|
Acquisition of real estate through assumption of debt |
| $ | — |
|
| $ | 31,801 |
|
| $ | — |
|
Right-of-use assets, finance leases (modified) obtained in exchange for finance lease liabilities |
| $ | — |
|
| $ | — |
|
| $ | (70,427 | ) |
Right of use assets, operating leases terminated in exchange for finance lease liabilities |
| $ | — |
|
| $ | — |
|
| $ | (1,432 | ) |
Settlement of note receivable through cancellation of OP Units |
| $ | — |
|
| $ | 479 |
|
| $ | — |
|
|
|
|
|
|
|
|
|
|
| |||
Change in control of previously unconsolidated investment |
|
|
|
|
|
|
|
|
| |||
Increase in real estate |
| $ | (55,791 | ) |
| $ | — |
|
| $ | (135,190 | ) |
Increase in mortgage notes payable |
|
| 35,970 |
|
|
| — |
|
|
| — |
|
Decrease in investments in and advances to unconsolidated affiliates |
|
| 17,822 |
|
|
| — |
|
|
| 96,816 |
|
Decrease in notes receivable |
|
| 5,306 |
|
|
| — |
|
|
| — |
|
Decrease (increase) in reserve on note receivable |
|
| (4,582 | ) |
|
| — |
|
|
| 38,674 |
|
Decrease in accrued interest on notes receivable |
|
| 4,691 |
|
|
| — |
|
|
| — |
|
Change in other assets and liabilities |
|
| 176 |
|
|
| — |
|
|
| 1,238 |
|
Acquisition of noncontrolling interest asset |
|
| — |
|
|
| — |
|
|
| (588 | ) |
Increase in cash and restricted cash upon change of control |
| $ | 3,592 |
|
| $ | — |
|
| $ | 950 |
|
The accompanying notes are an integral part of these consolidated financial statements.
71
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Organization, Basis of Presentation and Summary of Significant Accounting Policies
Organization
Acadia Realty Trust, anda Maryland real estate investment trust (collectively with its subsidiaries, (collectively, the “Company”), is a fully-integrated equity real estate investment trust (“REIT”) focused on the ownership, acquisition, development, and management of retail properties located primarily in high-barrier-to-entry, supply-constrained, densely-populateddensely populated metropolitan areas in the United States.
All of the Company’s assets are held by, and all of its operations are conducted through, Acadia Realty Limited Partnership (the “Operating Partnership”) and entities in which the Operating Partnership owns an interest. As of December 31, 20172022 and December 31, 2016,2021, the Company controlled approximately 95%95% of the Operating Partnership as the sole general partner and is entitled to share, in proportion to its percentage interest, in the cash distributions and profits and losses of the Operating Partnership. The limited partners primarily represent entities or individuals that contributed their interests in certain properties or entities to the Operating Partnership in exchange for common or preferred units of limited partnership interest (“Common OP Units” or “Preferred OP Units”) and employees who have been awarded restricted Common OP Units (“LTIP Units”) as long-term incentive compensation (
As of December 31, 2017,2022, the Company has ownership interests in 118151 properties within its core portfolio, which consist of those properties either 100%100% owned, or partially owned through joint venture interests, by the Operating Partnership, or subsidiaries thereof, not including those properties owned through its funds (“Core Portfolio”). The Company also has ownership interests in 5851 properties within its opportunity funds, Acadia Strategic Opportunity Fund II, LLC (“Fund II”), Acadia Strategic Opportunity Fund III LLC (“Fund III”), Acadia Strategic Opportunity Fund IV LLC (“Fund IV”), and Acadia Strategic Opportunity Fund V LLC (“Fund V”). Acadia Strategic Opportunity and, collectively with Fund I, LP (“II, Fund I,” together with Funds II, III, IV, and V,Fund IV, the “Funds”) was liquidated in 2015.. The 176202 Core Portfolio and Fund properties primarily consist of street and urban retail, and suburban shopping centers. In addition, the Company, together with the investors in the Funds, investinvested in operating companies through Acadia Mervyn Investors I, LLC (“Mervyns I”),I,” which was liquidated in 2018) and Acadia Mervyn Investors II, LLC (“Mervyns II”) and Fund II,, all on a non-recourse basis. The Company consolidates the Funds as it has (i) the power to direct the activities that most significantly impact the Funds’ economic performance, (ii) is obligated to absorb the Funds’ losses and (iii) has the right to receive benefits from the Funds that could potentially be significant.
The Operating Partnership is the sole general partner or managing member of the Funds and Mervyns I and II and earns fees or priority distributions for asset management, property management, construction, development, leasing, and legal services. Cash flows from the Funds and Mervyns I and II are distributed pro-rata to their respective partners and members (including the Operating Partnership) until each receives a certain cumulative return (“Preferred Return”) and the return of all capital contributions. Thereafter, remaining cash flow is distributed
The following table summarizes the general terms and Operating Partnership’s equity interests in the Funds and Mervyns II (dollars in millions):
Entity |
| Formation |
| Operating |
|
| Capital Called |
|
| Unfunded |
|
| Equity Interest |
|
| Preferred |
|
| Total |
| ||||||
Fund II and Mervyns II (c,d) |
| 6/2004 |
|
| 61.67 | % |
| $ | 557.3 |
|
| $ | — |
|
|
| 61.67 | % |
|
| 8 | % |
| $ | 172.9 |
|
Fund III |
| 5/2007 |
|
| 24.54 | % |
|
| 448.1 |
|
|
| 1.9 |
|
|
| 24.54 | % |
|
| 6 | % |
|
| 603.5 |
|
Fund IV |
| 5/2012 |
|
| 23.12 | % |
|
| 488.1 |
|
|
| 41.9 |
|
|
| 23.12 | % |
|
| 6 | % |
|
| 221.4 |
|
Fund V (e) |
| 8/2016 |
|
| 20.10 | % |
|
| 347.9 |
|
|
| 172.1 |
|
|
| 20.10 | % |
|
| 6 | % |
|
| 88.7 |
|
Entity | Formation Date | Operating Partnership Share of Capital | Capital Called as of December 31, 2017 | Unfunded Commitment | Equity Interest Held By Operating Partnership (a) | Preferred Return | Total Distributions as of December 31, 2017 (b) | ||||||
Fund II and Mervyns II | 6/2004 | 28.33% | $ | 347.1 | $ | — | 28.33% | 8% | $ | 131.6 | |||
Fund III | 5/2007 | 24.54% | 411.5 | 38.5 | 24.54% | 6% | 551.9 | ||||||
Fund IV | 5/2012 | 23.12% | 412.7 | 117.3 | 23.12% | 6% | 131.5 | ||||||
Fund V | 8/2016 | 20.10% | 45.8 | 474.2 | 20.10% | 6% | — |
Represents the total for the Funds, including the Operating Partnership and noncontrolling interests’ shares. |
72
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Basis of Presentation
Segments
At December 31, 2017,2022, the Company had three reportable operating segments: Core Portfolio, Funds and Structured Financing. The Company’s chief operating decision maker may review operational and financial data on a propertyproperty-level basis and does not differentiate properties on a geographical basis for purposes of allocating resources or capital. Each property is considered a separate operating segment; however, each property on a stand-alone basis represents less than 10% of revenues, profit or loss, and assets of the combined reported operating segment and meets the majority of the aggregations criteria under the applicable standard.
Principles of Consolidation
The consolidated financial statements include the consolidated accounts of the Company and its investments in partnerships and limited liability companies in which the Company has control, including where the Company has been determined to be a primary beneficiary of a variable interest entity ("VIE"), in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 810 “Consolidation” (“ASC Topic 810”). The ownership interests of other investors in these entities are recorded as noncontrolling interests. All significant intercompany balances and transactions have been eliminated in consolidation. Investments in entities for which the Company has the ability to exercise significant influence over, but does not have financial or operating control, are accounted for using the equity method of accounting. Accordingly, the Company’s share of the earnings (or losses) of these entities are included in consolidated net income.
Use of Estimates
GAAP requires the Company’s management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The most significant assumptions and estimates relate to the valuation of real estate, depreciable lives, revenue recognition and the collectability of notes receivable and rents receivable. Application of these estimates
Summary of Significant Accounting Policies
Real Estate
Land, buildings, and personal property are carried at cost less accumulated depreciation. Improvements and significant renovations that extend the useful life of the properties are capitalized, while replacements, maintenance, and repairs that do not improve or extend the lives of the respective assets are expensed as incurred. Real estate under development includes costs for significant property expansion and development.
Depreciation is computed on the straight-line basis over estimated useful lives of the assets as follows:
Buildings and improvements | Useful lives of 40 years for buildings and 15 years for improvements |
Furniture and fixtures | Useful lives, ranging from five years to 10 years |
Tenant improvements | Shorter of economic life or lease terms |
Purchase Accounting –
Upon acquisitions of real estate, the Company assesses the fair value of acquired assets and assumed liabilities (including land, buildings and improvements, and identified intangibles such as above- and below-market leases and acquired in-placeThe Company assesses fair value of its tangible assets acquired and assumed liabilities based on estimated cash flow projections that utilize appropriate discount and capitalization rates and available market information at the measurement period. Estimates of future cash flows are based on a number of factors including the historical operating results, known trends, and market/economic conditions that may affect the property.
In determining the value of above- and below-market leases, the Company estimates the present value difference between contractual rent obligations and estimated market rate of leases at the time of the transaction. To the extent there were fixed-rate options at below-market rental
73
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
rates, the Company included these periods along with the current term below-market rent in arriving at the fair value of the acquired leases. The discounted difference between contract and market rents is being amortized to rental income over the remaining applicable lease term, inclusive of any option periods.
In determining the value of acquired in-place leases, and customer relationships, the Company considers market conditions at the time of the transaction and values the costs to execute similar leases during the expected lease-up period from vacancy to existing occupancy, including carrying costs. The value assigned to in-place leases and tenant relationships is amortized over the estimated remaining term of the leases. If a lease were to be terminated prior to its scheduled expiration, all unamortized costs (e.g., lease intangibles) relating to that lease would be written off.
The Company estimates the value of any assumption of mortgage debt based on market conditions at the time of acquisitions including prevailing interest rates, terms, and ability to obtain financing for a similar asset. Mortgage debt discounts or premiums are amortized into interest expense over the remaining term of the related debt instrument.
Real Estate Under Development –
The Company capitalizes certain costs related to the development of real estate. Interest and real estate taxes incurred during the period of the construction, expansion or development of real estate are capitalized and depreciated over the estimated useful life of the building. The Company will cease the capitalization of these costs when construction activities are substantially completed and the property is available for occupancy by tenants, but no later than one year from the completion of major construction activity at which time the project is placed in service and depreciation commences. If the Company suspends substantially all activities related to the development of a qualifying asset, the Company will cease capitalization of interest and taxes until activities are resumed.Real Estate Impairment
– The Company reviews its real estate,Dispositions of Real Estate –
The Company recognizes property sales in accordance with ASC TopicReal Estate Held for Sale –
The Company generally considers assets to be held for sale when it has entered into a contract to sell the property, all material due diligence requirements have been satisfied, and management believes it is probable that the disposition will occur within one year. Assets that are classified as held for sale are recorded at the lower of their carrying amount or fair value, less cost to sell.Notes Receivable
Notes receivable include certain loans that are held for investment and are collateralized by real estate-related investments and may be subordinate to other senior loans. Notes receivable are reported net of allowance for credit loss ("CECL") and are recorded at stated principal amounts or at initial investment less accretive yield for loans purchased at a discount, which is accreted over the life of the note. The Company defers loan origination and commitment fees, net of origination costs, and amortizes them over the term of the related loan. Changes in cash flows from previous estimates are included in future interest income on a prospective basis and a new effective interest rate is computed based on the current cost basis of the instrument and remaining cash flows. The Company evaluates the collectability of both principal and interest based upon an assessment of the underlying collateral value to determine whether it is impaired. A reserve is recorded when,Allowance for credit loss represents management’s estimate of future losses based upon current informationon national historical economic loss rates for similar obligations, management’s estimate of future economic impacts and events, it is probable that the Company will be unable to collect all amounts due accordingfactors specific to the existing contractual terms. The amountborrower. Certain of the reserveCompany’s loans are considered “collateral dependent” in that settlement of the amount is calculatedlikely to be achieved by comparing the recorded investmentobtaining access to the value of the underlying collateral. As the underlying collateral for a majority of the(e.g., notes receivable is real estate-related investments, thein default). The same valuation techniques are used to value the collateral for such collateral dependent instruments as those used to determine the fair value of real estate investments for impairment purposes. Given the small number of notes outstanding, the Company does not provide for an additional reserve based on the grouping of loans, as the Company believes the characteristics of its notes are not sufficiently similar to allow an evaluation of these notes as a group for a possible loancredit loss allowance. As such, all of the Company’s notes are evaluated individually for this purpose. Interest income on performing notes is
74
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
accrued as earned. A note is placed on non-accrual status when, based upon current information and events, it is probable that the Company will not be able to collect all amounts due according to the existing contractual terms. RecognitionIncome accrual is generally suspended for loans when recovery of interest income on anand principal becomes doubtful. Interest received is then recorded as a reduction in the outstanding principal balance until the accrual basis on non-performing notes is resumed when it is probable that the Company will be able to collect amounts due according to the contractual terms.
Investments in and Advances to Unconsolidated Joint Ventures
Some of the Company’s joint ventures obtain non-recourse third-party financing on their property investments, contractually limiting the Company’s exposure to losses. The Company recognizes income for distributions in excess of its investment where there is no recourse to the Company and no intention or obligation to contribute additional capital. For investments in which there is recourse to the Company or an obligation or intention to contribute additional capital exists, distributions in excess of the investment are recorded as a liability.
When characterizing distributions from equity investees within the Company's consolidated statements of cash flows, all distributions received are first applied as returns on investment to the extent there are cumulative earnings related to the respective investment and are classified as cash inflows from operating activities. If cumulative distributions are in excess of cumulative earnings, distributions are considered return of investment. In such cases, the distribution is classified as cash inflows from investing activities.
To the extent that the Company’s carrying basis in an unconsolidated affiliate is different from the basis reflected at the joint venture level, the basis difference is amortized over the life of the related assets and included in the Company’s share of equity in net income (loss)earnings (losses) of investments in unconsolidated affiliates the joint venture.
The Company periodically reviews its investments in unconsolidated joint ventures for other-than-temporary losses in investment value. Any decline that is not expected to be recovered based on the underlying assets of the investment, is considered other than temporary and an impairment charge is recorded as a reduction in the carrying value of the investment. During the periods presented there were no impairment charges related to the Company’s investments in unconsolidated joint ventures.
Cash and Cash Equivalents
The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. Cash and cash equivalents are maintained at financial institutions and, at times, balances may exceed the limits insured by the Federal Deposit Insurance Corporation.
Restricted Cash
Restricted cash consists principally of cash held for real estate taxes, construction costs, property maintenance, insurance, minimum occupancy, and property operating income requirements at specific properties as required by certain loan agreements.
Deferred Costs
External fees and costs paid in the successful negotiation of leases are deferred and amortized on a straight-line basis over the terms of the respective leases. FeesExternal fees and costs incurred in connection with obtaining financing are deferred and amortized as a component of interest expense over the term of the related debt obligation on a straight-line basis, which approximates the effective interest method. The Company capitalizes salaries, commissions and benefits related to time spent by leasing and legal department personnel involved in originating leases.
Derivative Instruments and Hedging Activities
The Company measures derivative instruments at fair value and records them as assets or liabilities, depending on its rights or obligations under the applicable derivative contract. Derivatives that are not designated as hedges must be adjusted to fair value through earnings. For a derivative designated and that qualified as a cash flow hedge, the effective portion of the change in fair value of the derivative is recognized in OtherAccumulated other comprehensive (loss) incomeloss until the hedged item is recognized in earnings. The ineffective portion of a derivative’s change in fair value is immediately recognized in earnings.
Although the Company's derivative contracts are subject to master netting arrangements, which serve as credit mitigants to both the Company and its counterparties under certain situations, the Company does not net its derivative fair values or any existing rights or obligations to cash collateral on the consolidated balance sheets. The Company does not use derivatives for trading or speculative purposes. For the periods presented, all of the Company's derivatives qualified and were designated as cash flow hedges, and none of its derivatives were deemed ineffective.
75
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Noncontrolling Interests
Noncontrolling interests represent the portion of equity that the Company does not own in those entities it consolidates. The Company identifies its noncontrolling interests separately within the equity section on the Company’s consolidated balance sheets. The amounts of consolidated net earnings attributable to the Company and to the noncontrolling interests are presented separately on the Company’s consolidated statements of income.operations. Noncontrolling interests also include amounts related to common and preferred OP Units issued to unrelated third parties in connection with certain property acquisitions. In addition, the Company periodically issues common OP Units and LTIPs to certain employees of the Company under its share-based incentive program. Unit holders generally have the right to redeem their units for shares of the Company's common stockCommon Shares subject to blackout and other limitations. Common and restricted OP Units are included in the caption Noncontrolling interest within the equity section on the Company’s consolidated balance sheets.
Variable Interest Entities
The Company consolidates a VIE in which it is considered the primary beneficiary. The primary beneficiary is the entity that has (i) the power to direct the activities that most significantly impact the entity's economic performance and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could be significant to the VIE. The Company assesses the accounting treatment and determines whether it is the primary beneficiary of a VIE at the time it becomes involved with a VIE and continuously reconsiders that conclusion. In determining whether the Company is the primary beneficiary, it evaluates its control rights as well as economic interests in the entity held either directly or indirectly by the Company. Each entity is assessed on an individual basis to determine the rights provided to each party and whether those rights are protective or participating. For all VIEs, the Company reviews such agreements in order to determine which party has the power to direct the activities that most significantly impact the entity's economic performance.
For those entities evaluated under the voting interest model, the Company consolidates the entity if it has a controlling financial interest. The Company has a controlling financial interest in a voting interest entity (“VOE”) if it owns a majority voting interest in the entity. Investments in entities for which the Company has the ability to exercise significant influence over but does not have financial or operating control through its voting interest and entities which are VIEs but where the Company is not the primary beneficiary, are accounted for using the equity method of accounting. Accordingly, the Company’s share of the earnings (or losses) of these entities are included in consolidated net income or loss.
Revenue Recognition and Accounts Receivable
The Company accounts for its leases under ASC 842. Pursuant to ASC 842, the Company has made an accounting policy election to not separate the non-lease components from its leases, such as common area maintenance, and has accounted for each of its leases as a single lease component. In addition, the Company has elected to account only for those taxes that it pays on behalf of the tenant as reimbursable costs and will not account for those taxes paid directly by the tenant. Minimum rents from tenants are recognized using the straight-line method over the non-cancelable lease term of the respective leases. Lease termination fees are recognized upon the effective termination of a tenant’s lease when the Company has no further obligations under the lease. As of December 31, 20172022 and 2016,2021, unbilled rents receivable relating to the straight-lining of rents of $37.3$48.1 million and $34.9$43.4 million, respectively, are included in Rents Receivable, net on the accompanying consolidated balance sheets. Certain of these leases also provide for percentage rents based upon the level of sales achieved by the tenant. Percentage rent is recognized in the period when the tenants’ sales breakpoint is met. In addition, leases typically provide for the reimbursement to the Company of real estate taxes, insurance, and other property operating expenses. These reimbursements are recognized as revenue in the period the related expenses are incurred.
The Company makes estimates ofassesses the uncollectabilitycollectability of its accounts receivable related to tenant revenues. An allowance for doubtful accounts has been provided against certain tenantrevenues under ASC 842. The Company estimates the collectability of the accounts receivable that are estimatedrelated to be uncollectible. Oncebilled rents, straight-line rents, recoveries from tenants, and other revenue taking into consideration the
Stock-Based Compensation
Stock-based compensation expense for all equity-classified stock-based compensation awards is based on the grant date fair value estimated in accordance with current accounting guidance for share-based payments. The Company recognizes these compensation costs for only those shares or units expected to vest on a straight-line or graded-vesting basis, as appropriate, over the requisite service period of the award. The Company includes stock-based compensation within general and administrative expense on the Additional paid-in capital captionconsolidated statements of equity.operations.
Income Taxes
76
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The Company has made an election to be taxed, and believes it qualifies, as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the “Code”). To maintain REIT status for Federal income tax purposes, the Company is generally required to distribute at least 90%90% of its REIT taxable income to its shareholders as well as comply with certain other income, asset and organizational requirements as defined in the Code. Accordingly, the Company is generally not subject to Federal corporate income tax to the extent that it distributes 100%100% of its REIT taxable income each year.
The Company is permitted to participate in certain activities and still maintain its qualification as a REIT, so long as these activities are conducted in entities that elect to be treated as taxable subsidiaries under the Code. As such, the Company is subject to Federal and state income taxes on the income from these activities. The Protecting Americans from Tax Hikes Act (PATH Act) was enacted in December 2015, and included numerous law changes applicable to REITs. The provisions have various effective dates beginning as early as 2016. These changes did not materially impact the Company's operations or consolidated financial statements.
Although it may qualify for REIT status for Federalfederal income tax purposes, the Company is subject to state or local income or franchise taxes in certain statesjurisdictions in which some of its properties are located. In addition, taxable income from non-REIT activities managed through the Company’s taxableTaxable REIT subsidiariesSubsidiary (“TRS”) is fully subject to Federal,federal, state and local income taxes.
The Company accounts for TRS income taxes under the liability method as required by ASC Topic 740, “Income Taxes.” Under the liability method, deferred income taxes are recognized for the temporary differences between the GAAP basis and tax basis of the TRS income, assets, and liabilities.
In March 2020, Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) temporarily relaxed existing limitations on the use and carryback of net operating losses incurred by our TRSs. Net operating losses generated in taxable years beginning in 2019, 2020 or 2021 can be carried back to the preceding 5 years. In addition, TRSs can fully offset their taxable income for taxable years beginning before 2022 using net operating loss carrybacks and carryforwards and can fully offset their taxable income for taxable years beginning after 2021 using pre-2019 net operating loss carryforwards. Any post-2018 net operating loss carryforwards can be used to offset up to 80% of taxable income after using pre-2019 net operating loss carryforwards. In 2020, the Company carried back $3.1 million of net operating losses, resulting in a refund of $1.0 million.
The Company records net deferred tax assets to the extent it believes it is more likely than not that these assets will be realizedrealized. In 2022 and would record a2021, the Company recorded valuation allowanceallowances to reduce deferred tax assets when it has determined that an uncertainty existsexisted regarding their realization, which would increaseincreased the provision for income taxes. In making such determination, the Company considersconsidered all available positive and negative evidence, including forecasts of future taxable income, the reversal of other existing temporary differences, available net operating loss carry-forwards,carryforwards, tax planning strategies and recent results of operations. Several of these considerations require assumptions and significant judgment about the forecasts of future taxable income and are consistent with the plans and estimates that the Company is utilizing to manage its business. To the extent facts and circumstances change in the future, further adjustments to the valuation allowances may be required.
Recent Accounting Pronouncements
In May 2014,January 2021, the FASB issued Accounting Standards Update
In August 2015,December 2022, the FASB issued ASU 2015-14, which2022-06 Reference Rate Reform (Topic 848). The guidance in this update defers the effectivesunset date of ASU 2014-09Topic 848 from December 31, 2022, to December 31, 2024, after which entities will no longer be permitted to apply the relief in Topic 848. The amendments are effective for all entities by one year, until years beginning in 2018, with early adoption permitted but not before 2017. Entities may adopt ASU 2014-09 using either a full retrospective approach reflecting the applicationscope upon issuance of the standard in each prior reporting periodASU. The Company plans to transition all variable rate loans currently indexed to LIBOR to SOFR or another applicable benchmark index based on discussions with the
Any other recently issued accounting standards or pronouncements not disclosed above have been excluded as they are not relevant to elect certain practical expedients or a modified retrospective approach with the cumulative effect recognized at the date of adoption. Substantially all of the Company’s revenue is derived from its leases and therefore falls outside of the scope of this guidance. With respect to its fee-derived revenue, the Company, does not anticipate any significant changes to the timing of the Company’s revenue recognition; however, the recognition of gains on sales of properties may be impacted prospectively under limited circumstances under which collectability may not be reasonably assured or if the Company has continuing involvement with a sold property. The Company intends to implement the standard using the modified retrospective approach with the cumulative effect recognized in retained earnings at the date of application.
77
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
2. Real Estate
The Company’s consolidated real estate is comprised of the following for the periods presented (in thousands):
|
| December 31, |
|
| December 31, |
| ||
|
| 2022 |
|
| 2021 |
| ||
|
|
|
|
|
|
| ||
Land |
| $ | 817,802 |
|
| $ | 739,641 |
|
Buildings and improvements |
|
| 2,987,594 |
|
|
| 2,892,051 |
|
Tenant improvements |
|
| 216,899 |
|
|
| 199,925 |
|
Construction in progress |
|
| 21,027 |
|
|
| 11,131 |
|
Right-of-use assets - finance leases (Note 11) |
|
| 25,086 |
|
|
| 25,086 |
|
Total |
|
| 4,068,408 |
|
|
| 3,867,834 |
|
Less: Accumulated depreciation and amortization |
|
| (725,143 | ) |
|
| (648,461 | ) |
Operating real estate, net |
|
| 3,343,265 |
|
|
| 3,219,373 |
|
Real estate under development |
|
| 184,602 |
|
|
| 203,773 |
|
Net investments in real estate |
| $ | 3,527,867 |
|
| $ | 3,423,146 |
|
December 31, 2017 | December 31, 2016 | |||||||
Land | $ | 658,835 | $ | 693,252 | ||||
Buildings and improvements | 2,406,488 | 1,916,288 | ||||||
Tenant improvements | 131,850 | 132,220 | ||||||
Construction in progress | 18,642 | 19,789 | ||||||
Properties under capital lease | 76,965 | 76,965 | ||||||
Total | 3,292,780 | 2,838,514 | ||||||
Less: Accumulated depreciation | (339,862 | ) | (287,066 | ) | ||||
Operating real estate, net | 2,952,918 | 2,551,448 | ||||||
Real estate under development, at cost | 173,702 | 543,486 | ||||||
Net investments in real estate | $ | 3,126,620 | $ | 3,094,934 |
Acquisitions and Conversions
During the years ended December 31, 20172022 and December 31, 2016,2021, the Company acquired (through purchase, investment, or foreclosure) the following consolidated retail properties and other real estate investments (dollars in thousands):
Property and Location |
| Percent |
| Date of |
| Purchase |
| |
2022 Acquisitions and Foreclosure |
|
|
|
|
|
|
| |
Core |
|
|
|
|
|
|
| |
121 Spring Street - New York, NY |
| 100% |
| Jan 12, 2022 |
| $ | 39,637 |
|
Williamsburg Collection - Brooklyn, NY (a) |
| (a) |
| Feb 18, 2022 |
|
| 97,750 |
|
8833 Beverly Boulevard - West Hollywood, CA |
| 100% |
| Mar 2, 2022 |
|
| 24,117 |
|
Henderson Avenue Portfolio - Dallas, TX (b) |
| 100% |
| Apr 18, 2022 |
|
| 85,192 |
|
Subtotal Core |
|
|
|
|
|
| 246,696 |
|
|
|
|
|
|
|
|
| |
Fund III |
|
|
|
|
|
|
| |
640 Broadway - New York, NY (Foreclosure) (c) |
| 100% |
| Jan 26, 2022 |
|
| 59,207 |
|
Subtotal Fund III |
|
|
|
|
|
| 59,207 |
|
Total 2022 Acquisitions and Foreclosure |
|
|
|
|
| $ | 305,903 |
|
|
|
|
|
|
|
|
| |
2021 Acquisitions |
|
|
|
|
|
|
| |
Core |
|
|
|
|
|
|
| |
14th Street Portfolio - Washington, DC |
| 100% |
| Dec 23, 2021 |
| $ | 26,320 |
|
Subtotal Core | �� |
|
|
|
|
| 26,320 |
|
|
|
|
|
|
|
|
| |
Fund V |
|
|
|
|
|
|
| |
Canton Marketplace - Canton, GA |
| 100% |
| Aug 20, 2021 |
|
| 50,954 |
|
Monroe Marketplace - Selinsgrove, PA |
| 100% |
| Sept 9, 2021 |
|
| 44,796 |
|
Monroe Marketplace (Parcel) - Selinsgrove, PA |
| 100% |
| Nov 12, 2021 |
|
| 1,029 |
|
Midstate - East Brunswick, NJ |
| 100% |
| Dec 14, 2021 |
|
| 71,867 |
|
Subtotal Fund V |
|
|
|
|
|
| 168,646 |
|
Total 2021 Acquisitions |
|
|
|
|
| $ | 194,966 |
|
|
|
|
|
|
|
|
|
Property and Location | Percent Acquired | Date of Acquisition | Purchase Price | Debt Assumed | |||||
2017 Acquisitions and Conversions | |||||||||
Core | |||||||||
Market Square Shopping Center - Wilmington, DE (Conversion) (Note 4) | 100% | Nov 16, 2017 | $ | 42,800 | $ | — | |||
Subtotal Core | 42,800 | — | |||||||
Fund IV | |||||||||
Lincoln Place - Fairview Heights, IL | 100% | Mar 13, 2017 | 35,350 | — | |||||
Shaw's Plaza - Windham, ME (Conversion) (Note 3) | 100% | Jun 30, 2017 | 9,142 | — | |||||
Subtotal Fund IV | 44,492 | — | |||||||
Fund V | |||||||||
Plaza Santa Fe - Santa Fe, NM | 100% | Jun 5, 2017 | 35,220 | — | |||||
Hickory Ridge - Hickory, NC | 100% | Jul 27, 2017 | 44,020 | — | |||||
New Towne Plaza - Canton, MI | 100% | Aug 4, 2017 | 26,000 | — | |||||
Fairlane Green - Allen Park, MI | 100% | Dec 20, 2017 | 62,000 | — | |||||
Subtotal Fund V | 167,240 | — | |||||||
Total 2017 Acquisitions and Conversions | $ | 254,532 | $ | — | |||||
2016 Acquisitions | |||||||||
Core Portfolio | |||||||||
991 Madison Avenue - New York, NY (a) | 100% | Mar 26, 2016 | $ | 76,628 | $ | — | |||
165 Newbury Street - Boston, MA | 100% | May 13, 2016 | 6,250 | — | |||||
Concord & Milwaukee - Chicago, IL | 100% | Jul 28, 2016 | 6,000 | 2,902 | |||||
151 North State Street - Chicago, IL | 100% | Aug 10, 2016 | 30,500 | 14,556 | |||||
State & Washington - Chicago, IL | 100% | Aug 22, 2016 | 70,250 | 25,650 | |||||
North & Kingsbury - Chicago, IL | 100% | Aug 29, 2016 | 34,000 | 13,409 | |||||
Sullivan Center - Chicago, IL | 100% | Aug 31, 2016 | 146,939 | — | |||||
California & Armitage - Chicago, IL | 100% | Sep 12, 2016 | 9,250 | 2,692 | |||||
555 9th Street - San Francisco, CA | 100% | Nov 2, 2016 | 139,775 | 60,000 | |||||
Subtotal Core Portfolio | 519,592 | 119,209 | |||||||
Fund IV | |||||||||
Restaurants at Fort Point - Boston, MA | 100% | Jan 14, 2016 | 11,500 | — | |||||
1964 Union Street - San Francisco, CA (a) | 90% | Jan 28, 2016 | 2,250 | 1,463 | |||||
Wake Forest Crossing - Wake Forest, NC | 100% | Sep 27, 2016 | 36,600 | — | |||||
Airport Mall - Bangor, ME | 100% | Oct 28, 2016 | 10,250 | — | |||||
Colonie Plaza - Albany, NY | 100% | Oct 28, 2016 | 15,000 | — | |||||
Dauphin Plaza - Harrisburg, PA | 100% | Oct 28, 2016 | 16,000 | — | |||||
JFK Plaza - Waterville, ME | 100% | Oct 28, 2016 | 6,500 | — | |||||
Mayfair Shopping Center - Philadelphia, PA | 100% | Oct 28, 2016 | 16,600 | — | |||||
Shaw's Plaza - Waterville, ME | 100% | Oct 28, 2016 | 13,800 | — | |||||
Wells Plaza - Wells, ME | 100% | Oct 28, 2016 | 5,250 | — | |||||
717 N Michigan - Chicago, IL | 100% | Dec 1, 2016 | 103,500 | — | |||||
Subtotal Fund IV | 237,250 | 1,463 | |||||||
Total 2016 Acquisitions | $ | 756,842 | $ | 120,672 |
78
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2022 and 2021, the Company The purchase prices for the Year Ended December 31, Year Ended December 31, 2022 2021 Net Assets Acquired Land $ 119,898 $ 37,290 Buildings and improvements 168,862 134,065 Acquisition-related intangible assets (Note 6) 29,016 39,953 Accounts receivable, prepaids and other assets 4,077 — Accounts payable and other liabilities (661 ) — Acquisition-related intangible liabilities (Note 6) (14,126 ) (16,342 ) Net assets acquired $ 307,066 $ 194,966 Consideration Cash $ 242,633 $ 161,846 Carrying value of note receivable exchanged in foreclosure (Note 3) 5,416 — Existing interest in previously unconsolidated investment (Note 4) 17,822 — Debt assumed 35,970 31,801 Liabilities assumed 4,062 1,319 Total consideration 305,903 194,966 Gain on bargain purchase 1,163 — $ 307,066 $ 194,966 The Company determines the fair value of the individual components of income producing real estate asset acquisitions primarily through calculating the "as-if vacant" value of a building, using an income approach, which relies significantly upon internally determined assumptions. The Company has determined that these estimates primarily rely on Level 3 inputs, which are unobservable inputs based on our own assumptions. The most significant assumptions used in calculating the "as-if vacant" value for acquisition activity during 2022 and 2021, respectively, are as follows: 2022 2021 Low High Low High Exit Capitalization Rate 4.25 % 7.25 % 6.50 % 7.75 % Annual net rental rate per square foot on acquired buildings $ 20.00 $ 825.00 $ 10.00 $ 85.00 Annual net rental rate per square foot on acquired ground lease $ — $ — $ 3.65 $ 95.00 79 ACADIA REALTY TRUST AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The estimate of the portion of the "as-if vacant" value that is allocated to the land underlying the acquired real estate relies on Level 3 inputs and is primarily determined by reference to recent comparable transactions. Dispositions During the years ended December 31, Property and Location Owner Date Sold Sale Price Gain (Loss) 2022 Dispositions NE Grocer Portfolio (Selected Assets) - Pennsylvania Fund IV Jan 26, 2022 Mar 4, 2022 $ 45,350 $ 13,784 New Towne (Parcel) - Canton, MI Fund V Feb 1, 2022 2,231 1,776 Cortlandt Crossing - Westchester County, NY Fund III Feb 9, 2022 65,533 13,255 Lincoln Place - Fairview Heights, IL Fund IV May 25, 2022 40,670 12,216 Wake Forest Crossing - Wake Forest, NC Fund IV Aug 24, 2022 38,919 8,885 Henderson Avenue (Parcel) - Dallas, TX Core Oct 7, 2022 3,050 (194 ) 330-340 River Street - Cambridge, MA Core Dec 13, 2022 26,400 7,439 Total 2022 Dispositions $ 222,153 $ 57,161 2021 Dispositions 60 Orange St - Bloomfield, NJ Core Jan 29, 2021 $ 16,400 $ 4,612 654 Broadway - New York, NY Fund III May 19, 2021 10,000 111 NE Grocer Portfolio (Selected Assets) - ME Fund IV Jun 18, 2021 39,925 5,064 Total 2021 Dispositions (a) $ 66,325 $ 9,787 The aggregate rental revenue, expenses and pre-tax income reported within continuing operations for the aforementioned consolidated properties that were sold as well as the lease that was terminated (Note 11) during the years ended December 31, Year Ended December 31, 2022 2021 2020 Revenues $ 6,598 $ 22,002 $ 27,514 Expenses (5,205 ) (19,661 ) (24,945 ) Gain on disposition of properties 57,161 10,521 683 Net income attributable to noncontrolling interests (39,117 ) (5,893 ) (1,627 ) Net income attributable to Acadia $ 19,437 $ 6,969 $ 1,625 Properties Held At December 31, Real Estate Under Development and Construction in Progress Real estate under development represents the Company’s consolidated properties that have not yet been placed into service while undergoing substantial development or construction.expensed $2.1capitalized $1.2 million and $3.6 million of acquisition costs forin connection with the 2022 Acquisitions and Foreclosure and the 2021 Acquisitions, respectively. In addition, during the year ended December 31, 2017, of which $1.2 million related to2022, the Core Portfolio and $0.9 million related to the Funds and $8.2Company expensed $2.0 million of acquisition costs for(including a $1.5 million acquisition fee paid to an affiliate of a joint venture partner). Acquisition costs that were expensed are included in General and administrative expenses in the consolidated statements of operations. During the year ended December 31, 2016,2022, the Company assumed a $36.0 million mortgage with the consolidation of which $5.5 million related to the Core Portfolio640 Broadway and $2.7 million related to the Funds.Revenues, net loss and loss per share from the Company’s consolidated 2017 acquisitions and conversions totaled $10.2 million, $3.5 million and $0.04, respectively forduring the year ended December 31, 2017. Revenues, net loss and loss per share from2021, the Company’s consolidated 2016 acquisitions totaled $15.3Company assumed a $31.8 million $4.7 million and $0.06, respectively formortgage with the year ended December 31, 2016.business combinations2022 Acquisitions and Foreclosure and 2021 Acquisitions were allocated to the acquired assets and assumed liabilities based on their estimated relative fair values at the dates of acquisition. The following table summarizes the allocation of the purchase price of properties acquired during the years ended December 31, 20172022 and December 31, 20162021 (in thousands): Year Ended
December 31, 2017 Year Ended December 31, 2016 Net Assets Acquired Land $ 48,138 $ 225,729 Buildings and improvements 173,576 458,525 Other assets 84 3,481 Acquisition-related intangible assets (in Acquired lease intangibles, net) 44,269 63,606 Acquisition-related intangible liabilities (in Acquired lease intangibles, net) (11,535 ) (72,985 ) Above and below market debt assumed (included in Mortgages and other notes payable, net) — (119,601 ) Net assets acquired $ 254,532 $ 558,755 Consideration Cash $ 200,429 $ 439,546 Conversion of note receivable 41,010 — Debt assumed — 119,209 Liabilities assumed 3,363 — Existing interest in previously unconsolidated investment 4,159 �� — Change in control of previously unconsolidated investment 5,571 — Total Consideration $ 254,532 $ 558,755 73Dispositions20172022 and December 31, 2016,2021, the Company disposed of the following consolidated properties and other real estate investments (in thousands):
on SaleProperty and Location Owner Date Sold Sale Price Gain/(Loss) on Sale 2017 Dispositions New Hyde Park Shopping Center - New Hyde Park, NY Fund III Jul 6, 2017 $ 22,075 $ 6,433 216th Street - New York, NY Fund II Sep 11, 2017 30,579 6,543 City Point Condominium Tower I - Brooklyn, NY Fund II Oct 13, 2017 96,000 (810 ) 1151 Third Avenue - New York, NY Fund IV Nov 16, 2017 27,000 5,183 260 E 161st Street - Bronx, NY Fund II Dec 13, 2017 105,684 31,537 Total 2017 Dispositions $ 281,338 $ 48,886 2016 Dispositions Fund III Jan 28, 2016 $ 107,250 $ 65,393 Heritage Shops - Chicago, IL Fund III Apr 26, 2016 46,500 16,572 Total 2016 Dispositions $ 153,750 $ 81,965 The Company has recognized impairment charges duringDoes not include the periods presentedgain on lease termination of $0.7 million related to certain properties classified as held for sale and or soldthe Fund IV lease at 110 University Place (Note 811).2017, 20162022 and 20152021 were as follows (in thousands): 2017 2016 2015 Rental revenues $ 13,021 $ 16,946 $ 31,935 Expenses (18,964 ) (13,653 ) (27,265 ) Loss on extinguishment of debt (1,380 ) (81 ) (111 ) (Loss) income from continuing operations of
disposed properties before gain on disposition of properties (7,323 ) 3,212 4,559 Gain on disposition of properties, net of tax 48,886 81,965 89,063 Net income attributable to noncontrolling interests (30,072 ) (70,850 ) (1,732 ) Net income attributable to Acadia $ 11,491 $ 14,327 $ 91,890 Forfor Sale2017,2022, the Company had one property in Fund IIunder contract for sale with assets totaling $11.1 million, which was probable of disposition. This property was classified as held-for-sale, Sherman Avenue, with total assets of $25.4 million and recognized an impairment charge of $10.6 million inclusive of an amount attributable to a noncontrolling interest of $7.6 million (Note 8). This property had a net loss of $12.0 million and $0.8 million and $0.0"held for sale" on the years endedCompany's consolidated balance sheets at December 31, 2017, 2016, and 2015, respectively. At December 31, 2015, the property was under development.2022.At December 31, 2016, the Company had one property in Fund II classified as held-for-sale with total assets of $21.5 million and subject to a mortgage of $25.5 million.74ACADIA REALTY TRUST AND SUBSIDIARIESNOTES TO FINANCIAL STATEMENTSPro Forma Financial Information (Unaudited)The following unaudited pro forma consolidated operating data is presented for the year ended December 31, 2017, as if the acquisitions of the properties acquired during that period were completed on January 1, 2016 and as if the acquisition of the properties acquired during the year ended December 31, 2016 were completed on January 1, 2015. The related acquisition expenses of $2.1 million and $8.2 million reported during the years ended December 31, 2017 and 2016, respectively have been reflected as pro forma charges at January 1, 2016 and January 1, 2015, respectively. The unaudited supplemental pro forma operating data is not necessarily indicative of what the actual results of operations of the Company would have been, assuming the transactions had been completed as set forth above, nor do they purport to represent the Company’s results of operations for future periods. Year Ended December 31, 2017 2016 2015 Pro forma revenues $ 266,485 $ 247,843 $ 243,237 Pro forma income from continuing operations 21,878 63,681 52,442 Pro forma net income attributable to Acadia 64,107 82,485 58,232 Pro forma basic and diluted earnings per share 0.77 1.02 0.79
80
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Development activity for the Company’s consolidated properties comprised the following during the periods presented (dollars in thousands):
|
| January 1, 2022 |
|
| Year Ended December 31, 2022 |
|
| December 31, 2022 |
| |||||||||||||||||||
|
| Number of |
|
| Carrying |
|
| Transfers In |
|
| Capitalized |
|
| Transfers Out |
|
| Number of |
|
| Carrying |
| |||||||
Core |
|
| — |
|
| $ | 42,517 |
|
| $ | 9,610 |
|
| $ | 2,690 |
|
| $ | — |
|
|
| 2 |
|
| $ | 54,817 |
|
Fund II (a) |
|
| — |
|
|
| 35,125 |
|
|
| — |
|
|
| 503 |
|
|
| 1,556 |
|
|
| — |
|
|
| 34,072 |
|
Fund III |
|
| 1 |
|
|
| 24,296 |
|
|
| — |
|
|
| 1,502 |
|
|
| — |
|
|
| 1 |
|
|
| 25,798 |
|
Fund IV (b) |
|
| 1 |
|
|
| 101,835 |
|
|
| — |
|
|
| 215 |
|
|
| 32,135 |
|
|
| 1 |
|
|
| 69,915 |
|
Total |
|
| 2 |
|
| $ | 203,773 |
|
| $ | 9,610 |
|
| $ | 4,910 |
|
| $ | 33,691 |
|
|
| 4 |
|
| $ | 184,602 |
|
December 31, 2016 | Year Ended December 31, 2017 | December 31, 2017 | |||||||||||||||||||||||
Number of Properties | Carrying Value | Transfers In | Capitalized Costs | Transfers Out | Number of Properties | Carrying Value | |||||||||||||||||||
Core | 1 | $ | 3,499 | $ | 22,422 | $ | 819 | $ | 4,843 | 2 | $ | 21,897 | |||||||||||||
Fund II | 2 | 443,012 | — | 6,851 | 444,955 | — | 4,908 | ||||||||||||||||||
Fund III | 3 | 50,452 | — | 22,572 | 9,085 | 2 | 63,939 | ||||||||||||||||||
Fund IV | 4 | 46,523 | 80,508 | 2,158 | 46,231 | 1 | 82,958 | ||||||||||||||||||
Total | 10 | $ | 543,486 | $ | 102,930 | $ | 32,400 | $ | 505,114 | 5 | $ | 173,702 |
|
| January 1, 2021 |
|
| Year Ended December 31, 2021 |
|
| December 31, 2021 |
| |||||||||||||||||||
|
| Number of |
|
| Carrying |
|
| Transfers In |
|
| Capitalized |
|
| Transfers Out |
|
| Number of |
|
| Carrying |
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Core |
|
| — |
|
| $ | 63,875 |
|
| $ | — |
|
| $ | 1,855 |
|
| $ | 23,213 |
|
|
| — |
|
| $ | 42,517 |
|
Fund II |
|
| — |
|
|
| 74,657 |
|
|
| — |
|
|
| 3,921 |
|
|
| 43,453 |
|
|
| — |
|
|
| 35,125 |
|
Fund III |
|
| 1 |
|
|
| 23,104 |
|
|
| — |
|
|
| 1,192 |
|
|
| — |
|
|
| 1 |
|
|
| 24,296 |
|
Fund IV (a) |
|
| 2 |
|
|
| 85,565 |
|
|
| 29,758 |
|
|
| 2,026 |
|
|
| 15,514 |
|
|
| 1 |
|
|
| 101,835 |
|
Total |
|
| 3 |
|
| $ | 247,201 |
|
| $ | 29,758 |
|
| $ | 8,994 |
|
| $ | 82,180 |
|
|
| 2 |
|
| $ | 203,773 |
|
The number of properties in the tables above refers to projects comprising the entire property under development; however, certain projects represent a portion of a property. At December 31, 2022, consolidated development projects included: portions of the Henderson Portfolio, City Center, 555 9th Street, 651-671 West Diversey, Route 6 Mall and Mad River for the Core Portfolio, portions of City Point Phase I and II at Fund II, Broad Hollow Commons at Fund III, and a portion of 717 N. Michigan Avenue at Fund IV. In addition, at December 31, 2022, the Company had one Core unconsolidated development project, 1238 Wisconsin Avenue.
During the year ended December 31, 2017,2022, the Company:
At December 31, 2021, consolidated development projects included: portions of City Center, 555 9th Street, Route 6 Mall and Mad River for Core, portions of City Point Phase I and II at Fund II, Broad Hollow Commons at Fund III and 717 N. Michigan Avenue at Fund IV. In addition, at December 31, 2021, the Company had one Core unconsolidated development project, 1238 Wisconsin Avenue. During the year ended December 31, 2021, the Company:
81
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Construction in progress pertains to construction activity at the Company’s operating properties whichthat are in service and continue to operate during the construction period.
3. Notes Receivable, Net
The Company’s notes receivable, net wereare generally collateralized either by the underlying properties or the borrower’sborrowers’ ownership interestinterests in the entities that own the properties, and were as follows (dollars in thousands):
|
| December 31, |
|
| December 31, |
|
| December 31, 2022 |
| |||||||||||
Description |
| 2022 |
|
| 2021 |
|
| Number |
|
| Maturity Date |
|
| Interest Rate |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Core Portfolio (a) |
| $ | 124,801 |
|
| $ | 154,332 |
|
|
| 5 |
|
| Apr 2020 - Dec 2027 |
|
| 4.65% - 9.00% |
| ||
Fund III |
|
| — |
|
|
| 5,306 |
|
|
| — |
|
|
| — |
|
|
| — |
|
Total notes receivable |
|
| 124,801 |
|
|
| 159,638 |
|
|
|
|
|
|
|
|
|
| |||
Allowance for credit loss |
|
| (898 | ) |
|
| (5,752 | ) |
|
|
|
|
|
|
|
|
| |||
Notes receivable, net |
| $ | 123,903 |
|
| $ | 153,886 |
|
|
| 5 |
|
|
|
|
|
|
|
December 31, | December 31, | December 31, 2017 | ||||||||||||
Description | 2017 | 2016 | Number | Maturity Date | Interest Rate | |||||||||
Core Portfolio | $ | 101,695 | $ | 216,400 | 3 | June 2018 - April 2019 | 6.0% - 8.1% | |||||||
Fund II | 31,778 | 31,007 | 1 | May 2020 | 2.5% | |||||||||
Fund III | 5,106 | 4,506 | 1 | July 2020 | 18.0% | |||||||||
Fund IV | 15,250 | 24,250 | 1 | February 2021 | 15.3% | |||||||||
$ | 153,829 | $ | 276,163 | 6 |
During the year ended December 31, 2017,2022, the Company:
During the year ended December 31, 2016,2021, the Company:
82
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Default
One Core Portfolio note aggregating $21.6 million including accrued interest (exclusive of default interest and other amounts due on the loan that have not been recognized) was in default at December 31, 2022 and December 31, 2021. On April 1, 2020, the loan matured and was not repaid. The Company recoveredexpects to take appropriate actions to recover the amounts due under the loan and has issued a reservation of rights letter to the borrowers and guarantor, reserving all of its fullrights and remedies under the applicable loan documents and otherwise. The Company has determined that the collateral for this loan is sufficient to cover the loan’s carrying value of principalat December 31, 2022 and interest and recognized additional interest income and expense reimbursements of $2.2 million in the first quarter of 2017 and $1.4 million in the second quarter of 2017 upon settlement of this transaction.
Allowance for Credit Losses
The Company monitors the credit quality of its notes receivable on an ongoing basis and considers indicators of credit quality such as loan payment activity, the estimated fair value of the underlying collateral, the seniority of the Company’s loan in relation to other debt secured by the collateral and the prospects of the borrower.
Earnings from these notes and mortgages receivable are reported within the Company’s Structured Financing segment (
Note 12). Interest receivable is included in Other assets (Note 5).The Company’s estimated allowance for credit losses related to its Structured Financing segment has been computed for its amortized cost basis in the portfolio, including accrued interest (Note 5), factoring historical loss experience in the United States for similar loans, as adjusted for current conditions, as well as the Company’s expectations related to future economic conditions. Due to the lack of comparability across the Structured Financing portfolio, each loan was evaluated separately. As a result, there were three non-collateral-dependent loans with a total amortized cost of $112.9 million, inclusive of accrued interest of $11.9 million, for which an allowance for credit losses has been recorded aggregating $0.9 million at December 31, 2022. For two loans in this portfolio, aggregating $27.9 million, inclusive of accrued interest of $4.1 million at December 31, 2022, the Company has elected to apply a practical expedient in accordance with ASC 326 and did not establish an allowance for credit losses because (i) these loans are collateral-dependent loans, which due to their settlement terms are not expected to be settled in cash but rather by the Company’s possession of the real estate collateral; and (ii) at December 31, 2022, the Company determined that the estimated fair value of the collateral at the expected realization date for these loans was sufficient to cover the carrying value of its investments in these notes receivable. Impairment charges may be required if and when such amounts are estimated to be nonrecoverable upon a realization event, which is generally at the time a loan is repaid, or in the case of foreclosure, when the underlying asset is sold; however, non-recoverability may also be concluded if it is reasonably certain that all amounts due will not be collected.
83
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
4. Investments Inin and Advances to Unconsolidated Affiliates
The Company accounts for its investments in and advances to unconsolidated affiliates primarily under the equity method of accounting as it has the ability to exercise significant influence but does not have financial or operating control over the investment, which is maintained by each of the unaffiliated partners who co-invest with the Company. The Company’s investments in and advances to unconsolidated affiliates consist of the following (dollars in thousands):
|
|
|
| Ownership Interest |
| December 31, |
|
| December 31, |
| ||
Portfolio |
| Property |
| December 31, 2022 |
| 2022 |
|
| 2021 |
| ||
|
|
|
|
|
|
|
|
|
|
| ||
Core: |
| 840 N. Michigan Avenue (a,h) |
| 88.43% |
| $ | — |
|
| $ | 51,513 |
|
|
| Renaissance Portfolio |
| 20% |
|
| 28,755 |
|
|
| 28,466 |
|
|
| Gotham Plaza |
| 49% |
|
| 30,112 |
|
|
| 29,187 |
|
|
| Georgetown Portfolio (b) |
| 50% |
|
| 4,048 |
|
|
| 4,089 |
|
|
| 1238 Wisconsin Avenue (b, c) |
| 80% |
|
| 14,502 |
|
|
| 5,895 |
|
|
|
|
|
|
|
| 77,417 |
|
|
| 119,150 |
|
|
|
|
|
|
|
|
|
|
|
| ||
Mervyns II: |
| KLA/ABS (d) |
| 36.7% |
|
| 85,403 |
|
|
| 124,316 |
|
|
|
|
|
|
|
|
|
|
|
| ||
Fund III: |
| Self Storage Management (b) |
| 0% |
|
| — |
|
|
| 207 |
|
|
| 640 Broadway (e) |
| 100% |
|
| — |
|
|
| 17,825 |
|
|
|
|
|
|
|
| — |
|
|
| 18,032 |
|
|
|
|
|
|
|
|
|
|
|
| ||
Fund IV: |
| Fund IV Other Portfolio |
| 98.57% |
|
| 7,914 |
|
|
| 12,675 |
|
|
| 650 Bald Hill Road |
| 90% |
|
| 10,203 |
|
|
| 11,677 |
|
|
| Paramus Plaza |
| 50% |
|
| 936 |
|
|
| 1,975 |
|
|
|
|
|
|
|
| 19,053 |
|
|
| 26,327 |
|
|
|
|
|
|
|
|
|
|
|
| ||
Fund V: |
| Family Center at Riverdale (a) |
| 89.42% |
|
| 4,995 |
|
|
| 12,449 |
|
|
| Tri-City Plaza |
| 90% |
|
| 8,422 |
|
|
| 6,827 |
|
|
| Frederick County Acquisitions |
| 90% |
|
| 12,240 |
|
|
| 10,748 |
|
|
| Wood Ridge Plaza |
| 90% |
|
| 12,751 |
|
|
| — |
|
|
| La Frontera Village |
| 90% |
|
| 20,803 |
|
|
| — |
|
|
| Shoppes at South Hills (f) |
| 90% |
|
| 44,677 |
|
|
| — |
|
|
| Mohawk Commons |
| 90% |
|
| 775 |
|
|
| — |
|
|
|
|
|
|
|
| 104,663 |
|
|
| 30,024 |
|
|
|
|
|
|
|
|
|
|
|
| ||
Various: |
| Due from (to) Related Parties |
|
|
|
| 305 |
|
|
| 666 |
|
|
| Other (g) |
|
|
|
| 4,315 |
|
|
| 3,811 |
|
|
| Investments in and advances to |
|
|
| $ | 291,156 |
|
| $ | 322,326 |
|
|
|
|
|
|
|
|
|
|
|
| ||
Core: |
| Crossroads (h) |
| 49% |
| $ | 8,832 |
|
| $ | 9,939 |
|
|
| 840 N. Michigan Avenue (a, h) |
| 88.43% |
| $ | 1,673 |
|
|
| — |
|
|
| Distributions in excess of income from, |
|
|
| $ | 10,505 |
|
| $ | 9,939 |
|
Nominal Ownership Interest | December 31, 2017 | December 31, 2016 | ||||||||
Fund | Property | December 31, 2017 | ||||||||
Core: | ||||||||||
840 N. Michigan (a) | 88.43% | $ | 69,846 | $ | 74,131 | |||||
Renaissance Portfolio | 20% | 35,041 | 36,437 | |||||||
Gotham Plaza | 49% | 29,416 | 29,421 | |||||||
Market Square (a, b) | 100% | — | 5,469 | |||||||
Town Center (a, b) | 61.11% | 78,801 | 15,286 | |||||||
Georgetown Portfolio | 50% | 3,479 | 4,287 | |||||||
216,583 | 165,031 | |||||||||
Mervyns I & II: | KLA/Mervyn's, LLC (c) | 10.5% | — | — | ||||||
Fund III: | ||||||||||
Fund III Other Portfolio | 90% | 167 | 8,108 | |||||||
Self Storage Management (d) | 95% | 206 | 241 | |||||||
373 | 8,349 | |||||||||
Fund IV: | ||||||||||
Broughton Street Portfolio (e) | 50% | 48,335 | 54,839 | |||||||
Fund IV Other Portfolio | 90% | 20,199 | 21,817 | |||||||
650 Bald Hill Road | 90% | 13,609 | 18,842 | |||||||
82,143 | 95,498 | |||||||||
Various Funds: | Due from Related Parties (f) | 2,415 | 2,193 | |||||||
Other (g) | 556 | 957 | ||||||||
Investments in and advances to unconsolidated affiliates | $ | 302,070 | $ | 272,028 | ||||||
Core: | ||||||||||
Crossroads (h) | 49% | $ | 15,292 | $ | 13,691 | |||||
Distributions in excess of income from, and investments in, unconsolidated affiliates | $ | 15,292 | $ | 13,691 |
Represents |
84
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
During the year ended December 31, 2022, the Company:
85
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
During the year ended December 31, 2021, the Company:
Fees from Unconsolidated Affiliates
The Company earned property management, construction, development, legal and leasing fees from its investments in unconsolidated partnerships totaling $1.3 million, $1.2$0.4 million and $0.3$0.6 million and $1.1 million for the yearyears ended December 31, 2017, 2016,2022, 2021 and 20152020, respectively, which is included in other revenues in the consolidated financial statements.
In addition, the Company paid to certain unaffiliated partners of its joint ventures, $2.0 million, $2.4$1.6 million and $2.5$1.4 million duringand $2.1 million for the yearyears ended December 31, 2017, 2016,2022, 2021 and 20152020, respectively, for leasing commissions, development, management, construction, and overhead fees.
Summarized Financial Information of Unconsolidated Affiliates
The following combined and condensed Balance Sheets and Statements of Income,operations, in each period, summarize the financial information of the Company’s investments in unconsolidated affiliates that were held as of December 31, 2022, and accordingly exclude the results of any investments disposed of or consolidated prior to that date (in thousands):
December 31, | ||||||||
2017 | 2016 | |||||||
Combined and Condensed Balance Sheets | ||||||||
Assets: | ||||||||
Rental property, net | $ | 518,900 | $ | 576,505 | ||||
Real estate under development | 26,681 | 18,884 | ||||||
Investment in unconsolidated affiliates | 6,853 | 6,853 | ||||||
Other assets | 100,901 | 75,254 | ||||||
Total assets | $ | 653,335 | $ | 677,496 | ||||
Liabilities and partners’ equity: | ||||||||
Mortgage notes payable | $ | 405,652 | $ | 407,344 | ||||
Other liabilities | 61,932 | 30,117 | ||||||
Partners’ equity | 185,751 | 240,035 | ||||||
Total liabilities and partners’ equity | $ | 653,335 | $ | 677,496 | ||||
Company's share of accumulated equity | $ | 185,533 | $ | 191,049 | ||||
Basis differential | 95,358 | 61,827 | ||||||
Deferred fees, net of portion related to the Company's interest | 3,472 | 3,268 | ||||||
Amounts receivable by the Company | 2,415 | 2,193 | ||||||
Investments in and advances to unconsolidated affiliates, net of Company's share of distributions in excess of income from and investments in unconsolidated affiliates | $ | 286,778 | $ | 258,337 |
Year Ended December 31, | ||||||||||||
2017 | 2016 | 2015 | ||||||||||
Combined and Condensed Statements of Income | ||||||||||||
Total revenues | $ | 83,222 | $ | 84,218 | $ | 43,990 | ||||||
Operating and other expenses | (24,711 | ) | (25,724 | ) | (13,721 | ) | ||||||
Interest expense | (18,733 | ) | (16,300 | ) | (9,178 | ) | ||||||
Equity in earnings of unconsolidated affiliates | — | — | 66,655 | |||||||||
Depreciation and amortization | (24,192 | ) | (35,432 | ) | (12,154 | ) | ||||||
Loss on debt extinguishment | (154 | ) | — | — | ||||||||
Gain (loss) on disposition of properties | 18,957 | (1,340 | ) | 32,623 | ||||||||
Net income attributable to unconsolidated affiliates | $ | 34,389 | $ | 5,422 | $ | 108,215 | ||||||
Company’s share of equity in net income of unconsolidated affiliates | $ | 26,039 | $ | 40,538 | $ | 37,722 | ||||||
Basis differential amortization | (2,668 | ) | (1,089 | ) | (392 | ) | ||||||
Company’s equity in earnings of unconsolidated affiliates | $ | 23,371 | $ | 39,449 | $ | 37,330 |
|
| December 31, |
|
| December 31, |
| ||
|
| 2022 |
|
| 2021 |
| ||
Combined and Condensed Balance Sheets |
|
|
|
|
|
| ||
Assets: |
|
|
|
|
|
| ||
Rental property, net |
| $ | 650,997 |
|
| $ | 631,661 |
|
Real estate under development |
|
| 17,359 |
|
|
| 8,112 |
|
Other assets |
|
| 127,070 |
|
|
| 78,300 |
|
Total assets |
| $ | 795,426 |
|
| $ | 718,073 |
|
Liabilities and partners’ equity: |
|
|
|
|
|
| ||
Mortgage notes payable |
| $ | 609,923 |
|
| $ | 571,461 |
|
Other liabilities |
|
| 96,532 |
|
|
| 69,166 |
|
Partners’ equity |
|
| 88,971 |
|
|
| 77,446 |
|
Total liabilities and partners’ equity |
| $ | 795,426 |
|
| $ | 718,073 |
|
|
|
|
|
|
|
| ||
Company's share of accumulated equity |
| $ | 131,878 |
|
| $ | 113,285 |
|
Basis differential |
|
| 52,813 |
|
|
| 66,031 |
|
Deferred fees, net of portion related to the Company's interest |
|
| 5,937 |
|
|
| 4,071 |
|
Amounts receivable/payable by the Company |
|
| 305 |
|
|
| 666 |
|
Investments in and advances to unconsolidated affiliates, net of Company's |
|
| 190,933 |
|
|
| 184,053 |
|
Investments carried at fair value or cost |
|
| 89,718 |
|
|
| 128,334 |
|
Company's share of distributions in excess of income from and |
|
| 10,505 |
|
|
| 9,939 |
|
Investments in and advances to unconsolidated affiliates |
| $ | 291,156 |
|
| $ | 322,326 |
|
86
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
| Year Ended December 31, |
| |||||||||
|
| 2022 |
|
| 2021 |
|
| 2020 |
| |||
Combined and Condensed Statements of Operations |
|
|
|
|
|
|
|
|
| |||
Total revenues |
| $ | 96,080 |
|
| $ | 80,823 |
|
| $ | 78,054 |
|
Operating and other expenses |
|
| (29,858 | ) |
|
| (28,572 | ) |
|
| (28,718 | ) |
Interest expense |
|
| (26,807 | ) |
|
| (21,228 | ) |
|
| (22,651 | ) |
Depreciation and amortization |
|
| (34,596 | ) |
|
| (30,518 | ) |
|
| (30,917 | ) |
Loss on extinguishment of debt |
|
| (7 | ) |
|
| (35 | ) |
|
| — |
|
Impairment of Investment (a) |
|
| (57,423 | ) |
|
| — |
|
|
| — |
|
Gain on disposition of properties (b) |
|
| 12,983 |
|
|
| 3,206 |
|
|
| — |
|
Net (loss) income attributable to unconsolidated affiliates |
| $ | (39,628 | ) |
| $ | 3,676 |
|
| $ | (4,232 | ) |
|
|
|
|
|
|
|
|
|
| |||
Company’s share of equity in net (loss) income of unconsolidated affiliates |
| $ | (31,907 | ) |
| $ | 6,023 |
|
| $ | (2,503 | ) |
Income attributable to unconsolidated affiliates recently sold or consolidated |
|
| — |
|
|
| — |
|
| $ | 1,280 |
|
Basis differential amortization |
|
| (1,000 | ) |
|
| (693 | ) |
|
| (1,834 | ) |
Company’s equity in (losses) earnings of unconsolidated affiliates |
| $ | (32,907 | ) |
| $ | 5,330 |
|
| $ | (3,057 | ) |
5. Other Assets, Net and AccountsAccounts Payable and Other Liabilities
Other assets, net and accounts payable and other liabilities are comprised of the following for the periods presented:
December 31, | ||||||||
(in thousands) | 2017 | 2016 | ||||||
Other assets, net: | ||||||||
Lease intangibles, net (Note 6) | $ | 127,571 | $ | 114,584 | ||||
Deferred charges, net (a) | 24,589 | 25,221 | ||||||
Prepaid expenses | 16,838 | 14,351 | ||||||
Other receivables | 11,356 | 9,514 | ||||||
Accrued interest receivable | 11,668 | 9,354 | ||||||
Deposits | 6,296 | 4,412 | ||||||
Due from seller | 4,300 | 4,300 | ||||||
Deferred tax assets | 2,096 | 3,733 | ||||||
Derivative financial instruments (Note 8) | 4,402 | 2,921 | ||||||
Due from related parties | 1,479 | 1,655 | ||||||
Corporate assets | 2,369 | 1,241 | ||||||
Income taxes receivable | 1,995 | 1,500 | ||||||
$ | 214,959 | $ | 192,786 | |||||
(a) Deferred charges, net: | ||||||||
Deferred leasing and other costs | $ | 41,020 | $ | 40,728 | ||||
Deferred financing costs | 7,786 | 5,915 | ||||||
48,806 | 46,643 | |||||||
Accumulated amortization | (24,217 | ) | (21,422 | ) | ||||
Deferred charges, net | $ | 24,589 | $ | 25,221 | ||||
Accounts payable and other liabilities: | ||||||||
Lease intangibles, net (Note 6) | $ | 104,478 | $ | 105,028 | ||||
Accounts payable and accrued expenses | 61,420 | 48,290 | ||||||
Deferred income | 31,306 | 35,267 | ||||||
Tenant security deposits, escrow and other | 10,029 | 14,975 | ||||||
Derivative financial instruments (Note 8) | 1,467 | 3,590 | ||||||
Income taxes payable | 176 | 1,287 | ||||||
Other | 1,176 | 235 | ||||||
$ | 210,052 | $ | 208,672 |
|
| December 31, |
|
| December 31, |
| ||
(in thousands) |
| 2022 |
|
| 2021 |
| ||
Other Assets, Net: |
|
|
|
|
|
| ||
Lease intangibles, net (Note 6) |
| $ | 102,374 |
|
| $ | 108,918 |
|
Derivative financial instruments (Note 8) |
|
| 54,902 |
|
|
| 7 |
|
Deferred charges, net (a) |
|
| 28,478 |
|
|
| 28,438 |
|
Accrued interest receivable (Note 3) |
|
| 18,082 |
|
|
| 21,148 |
|
Prepaid expenses |
|
| 15,872 |
|
|
| 17,230 |
|
Due from seller |
|
| 3,036 |
|
|
| 3,364 |
|
Income taxes receivable |
|
| 1,876 |
|
|
| 2,279 |
|
Deposits |
|
| 1,624 |
|
|
| 1,647 |
|
Corporate assets, net |
|
| 1,287 |
|
|
| 1,648 |
|
Other receivables |
|
| 2,060 |
|
|
| 1,830 |
|
|
| $ | 229,591 |
|
| $ | 186,509 |
|
|
|
|
|
|
|
| ||
(a) Deferred Charges, Net: |
|
|
|
|
|
| ||
Deferred leasing and other costs |
| $ | 63,920 |
|
| $ | 58,281 |
|
Deferred financing costs related to line of credit |
|
| 9,494 |
|
|
| 9,953 |
|
|
|
| 73,414 |
|
|
| 68,234 |
|
Accumulated amortization |
|
| (44,936 | ) |
|
| (39,796 | ) |
Deferred charges, net |
| $ | 28,478 |
|
| $ | 28,438 |
|
|
|
|
|
|
|
| ||
Accounts Payable and Other Liabilities: |
|
|
|
|
|
| ||
Lease intangibles, net (Note 6) |
| $ | 78,416 |
|
| $ | 76,778 |
|
Accounts payable and accrued expenses |
|
| 59,922 |
|
|
| 56,580 |
|
Deferred income |
|
| 34,503 |
|
|
| 38,373 |
|
Tenant security deposits, escrow and other |
|
| 16,582 |
|
|
| 13,045 |
|
Lease liability - finance leases, net (Note 11) |
|
| 7,022 |
|
|
| 6,612 |
|
Derivative financial instruments (Note 8) |
|
| 46 |
|
|
| 45,027 |
|
|
| $ | 196,491 |
|
| $ | 236,415 |
|
87
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
88
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
6. Lease Intangibles
Upon acquisitions of real estate (Note 2), the Company assesses the relative fair value of acquired assets (including land, buildings, and improvements, and identified intangibles such as above- and below-market leases, including below- marketbelow-market options and acquired in-place leases) and assumed liabilities. The lease intangibles are amortized over the remaining terms of the respective leases, including option periods where applicable.
Intangible assets and liabilities are included in Other assets and Accounts payable and other liabilities (Note 5) on the consolidated balance sheets and summarized as follows (in thousands):
|
| December 31, 2022 |
|
| December 31, 2021 |
| ||||||||||||||||||
|
| Gross Carrying |
|
| Accumulated |
|
| Net Carrying |
|
| Gross Carrying |
|
| Accumulated |
|
| Net Carrying |
| ||||||
Amortizable Intangible Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
In-place lease intangible assets |
| $ | 301,556 |
|
| $ | (205,951 | ) |
| $ | 95,605 |
|
| $ | 290,819 |
|
| $ | (189,981 | ) |
| $ | 100,838 |
|
Above-market rent |
|
| 24,064 |
|
|
| (17,295 | ) |
|
| 6,769 |
|
|
| 24,191 |
|
|
| (16,111 | ) |
|
| 8,080 |
|
|
| $ | 325,620 |
|
| $ | (223,246 | ) |
| $ | 102,374 |
|
| $ | 315,010 |
|
| $ | (206,092 | ) |
| $ | 108,918 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Amortizable Intangible Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Below-market rent |
| $ | (176,253 | ) |
| $ | 98,182 |
|
| $ | (78,071 | ) |
| $ | (171,245 | ) |
| $ | 94,871 |
|
| $ | (76,374 | ) |
Above-market ground lease |
|
| (671 | ) |
|
| 326 |
|
|
| (345 | ) |
|
| (671 | ) |
|
| 267 |
|
|
| (404 | ) |
|
| $ | (176,924 | ) |
| $ | 98,508 |
|
| $ | (78,416 | ) |
| $ | (171,916 | ) |
| $ | 95,138 |
|
| $ | (76,778 | ) |
December 31, 2017 | December 31, 2016 | ||||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | ||||||||||||||||||
Amortizable Intangible Assets | |||||||||||||||||||||||
In-place lease intangible assets | $ | 193,821 | $ | (72,749 | ) | $ | 121,072 | $ | 156,420 | $ | (47,827 | ) | $ | 108,593 | |||||||||
Above-market rent | 16,786 | (10,287 | ) | 6,499 | 16,649 | (10,658 | ) | 5,991 | |||||||||||||||
$ | 210,607 | $ | (83,036 | ) | $ | 127,571 | $ | 173,069 | $ | (58,485 | ) | $ | 114,584 | ||||||||||
Amortizable Intangible Liabilities | |||||||||||||||||||||||
Below-market rent | $ | (147,232 | ) | $ | 43,391 | $ | (103,841 | ) | $ | (137,032 | ) | $ | 32,004 | $ | (105,028 | ) | |||||||
Above-market ground lease | (671 | ) | 34 | (637 | ) | — | — | — | |||||||||||||||
$ | (147,903 | ) | $ | 43,425 | $ | (104,478 | ) | $ | (137,032 | ) | $ | 32,004 | $ | (105,028 | ) |
During the year ended December 31, 2017,2022, the Company Company:
During the year ended December 31, 2021, the Company:
89
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Amortization of in-place lease intangible assets is recorded in depreciation and amortization expense and amortization of above-market rent and below-market rent is recorded as a reduction to and increase to rental income, respectively, in the consolidated statements of income.operations. Amortization of above-market ground leases are recorded as a reduction to rent expense in the consolidated statements of income.
The scheduled amortization of acquired lease intangible assets and assumed liabilities as of December 31, 20172022 is as follows (in thousands):
Years Ending December 31, |
| Net Increase in |
|
| Increase to |
|
| Reduction of |
|
| Net (Expense) Income |
| ||||
2023 |
| $ | 5,768 |
|
| $ | (25,125 | ) |
| $ | 58 |
|
| $ | (19,299 | ) |
2024 |
|
| 5,607 |
|
|
| (18,056 | ) |
|
| 58 |
|
|
| (12,391 | ) |
2025 |
|
| 5,177 |
|
|
| (13,075 | ) |
|
| 58 |
|
|
| (7,840 | ) |
2026 |
|
| 4,901 |
|
|
| (10,674 | ) |
|
| 58 |
|
|
| (5,715 | ) |
2027 |
|
| 4,737 |
|
|
| (8,474 | ) |
|
| 58 |
|
|
| (3,679 | ) |
Thereafter |
|
| 45,112 |
|
|
| (20,201 | ) |
|
| 55 |
|
|
| 24,966 |
|
Total |
| $ | 71,302 |
|
| $ | (95,605 | ) |
| $ | 345 |
|
| $ | (23,958 | ) |
Years Ending December 31, | Net Increase in Lease Revenues | Increase to Amortization | Reduction of Rent Expense | Net Income (Expense) | ||||||||||||
2018 | $ | 10,005 | $ | (29,005 | ) | $ | 58 | $ | (18,942 | ) | ||||||
2019 | 9,642 | (21,678 | ) | 58 | (11,978 | ) | ||||||||||
2020 | 8,655 | (16,797 | ) | 58 | (8,084 | ) | ||||||||||
2021 | 7,503 | (12,524 | ) | 58 | (4,963 | ) | ||||||||||
2022 | 7,185 | (8,778 | ) | 58 | (1,535 | ) | ||||||||||
Thereafter | 54,352 | (32,290 | ) | 347 | 22,409 | |||||||||||
Total | $ | 97,342 | $ | (121,072 | ) | $ | 637 | $ | (23,093 | ) |
90
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
7. Debt
A summary of the Company’s consolidated indebtedness is as follows (dollars in thousands):
Interest Rate at December 31, | Maturity Date at | Carrying Value at December 31, | |||||||||||
2017 | 2016 | December 31, 2017 | 2017 | 2016 | |||||||||
Mortgages Payable | |||||||||||||
Core Fixed Rate | 3.88%-5.89% | 3.88%-6.65% | February 2024 - April 2035 | $ | 179,870 | $ | 234,875 | ||||||
Core Variable Rate - Swapped (a) | 1.71%-3.77% | 1.71%-3.77% | July 2018 - July 2027 | 74,152 | 82,250 | ||||||||
Total Core Mortgages Payable | 254,022 | 317,125 | |||||||||||
Fund II Fixed Rate | 1.00%-4.75% | 1.00%-5.80% | August 2019 - May 2020 | 205,262 | 249,762 | ||||||||
Fund II Variable Rate | LIBOR+1.39% | LIBOR+0.62%-LIBOR+2.50% | November 2021 | — | 142,750 | ||||||||
Fund II Variable Rate - Swapped (a) | 2.88% | 2.88% | November 2021 | 19,560 | 19,779 | ||||||||
Total Fund II Mortgages Payable | 224,822 | 412,291 | |||||||||||
Fund III Variable Rate | Prime+0.50% -LIBOR+4.65% | Prime+0.50%-LIBOR+4.65% | May 2018 - December 2021 | 65,866 | 83,467 | ||||||||
Fund IV Fixed Rate | 3.4%-4.50% | 3.4%-4.50% | October 2025-June 2026 | 10,503 | 10,503 | ||||||||
Fund IV Variable Rate | LIBOR+1.70%-LIBOR+3.95% | LIBOR+1.70%-LIBOR+3.95% | January 2018 - April 2022 | 250,584 | 233,139 | ||||||||
Fund IV Variable Rate - Swapped (a) | 1.78% | 1.78% | May 2019 - April 2022 | 86,851 | 14,509 | ||||||||
Total Fund IV Mortgages Payable | 347,938 | 258,151 | |||||||||||
Fund V Variable Rate | LIBOR+2.25% | — | October 2020 | 28,613 | — | ||||||||
Net unamortized debt issuance costs | (12,943 | ) | (16,642 | ) | |||||||||
Unamortized premium | 856 | 1,336 | |||||||||||
Total Mortgages Payable | $ | 909,174 | $ | 1,055,728 | |||||||||
Unsecured Notes Payable | |||||||||||||
Core Unsecured Term Loans | LIBOR+1.30%-LIBOR+1.60% | LIBOR+1.30%-LIBOR+1.60% | July 2020 - December 2022 | $ | — | $ | 51,194 | ||||||
Core Variable Rate Unsecured Term Loans - Swapped (a) | 1.24%-3.77% | 1.24%-3.77% | July 2018 - March 2025 | 300,000 | 248,806 | ||||||||
Total Core Unsecured Notes Payable | 300,000 | 300,000 | |||||||||||
Fund II Unsecured Notes Payable | LIBOR+1.40% | — | September 2020 | 31,500 | — | ||||||||
Fund IV Term Loan/Subscription Facility | LIBOR+1.65%-LIBOR+2.75% | LIBOR+1.65%-LIBOR+2.75% | December 2018 - October 2019 | 40,825 | 134,636 | ||||||||
Fund V Subscription Facility | LIBOR+1.60% | — | May 2020 | 103,300 | — | ||||||||
Net unamortized debt issuance costs | (1,890 | ) | (1,646 | ) | |||||||||
Total Unsecured Notes Payable | $ | 473,735 | $ | 432,990 | |||||||||
Unsecured Line of Credit | |||||||||||||
Core Unsecured Line of Credit | LIBOR+1.40% | LIBOR+1.40% | June 2020 | $ | 18,048 | $ | — | ||||||
Core Unsecured Line of Credit - Swapped (a) | 1.24%-3.77% | — | July 2018 - March 2025 | 23,452 | — | ||||||||
Total Unsecured Line of Credit | $ | 41,500 | $ | — | |||||||||
Total Debt - Fixed Rate (b) | $ | 899,650 | $ | 860,486 | |||||||||
Total Debt - Variable Rate (c) | 538,736 | 645,185 | |||||||||||
Total Debt | 1,438,386 | 1,505,671 | |||||||||||
Net unamortized debt issuance costs | (14,833 | ) | (18,289 | ) | |||||||||
Unamortized premium | 856 | 1,336 | |||||||||||
Total Indebtedness | $ | 1,424,409 | $ | 1,488,718 |
|
| Interest Rate at |
|
|
| Carrying Value at |
| |||||||
|
| December 31, |
| December 31, |
| Maturity Date at |
| December 31, |
|
| December 31, |
| ||
|
| 2022 |
| 2021 |
| December 31, 2022 |
| 2022 |
|
| 2021 |
| ||
Mortgages Payable |
|
|
|
|
|
|
|
|
|
|
|
| ||
Core Fixed Rate |
| 3.88%-5.89% |
| 3.88%-5.89% |
| Feb 2024 - Apr 2035 |
| $ | 143,838 |
|
| $ | 145,464 |
|
Core Variable Rate - Swapped (a) |
| 4.54% |
| 3.41%-4.54% |
| Nov 2028 |
|
| 50,000 |
|
|
| 72,957 |
|
Total Core Mortgages Payable |
|
|
|
|
|
|
|
| 193,838 |
|
|
| 218,421 |
|
Fund II Variable Rate |
| SOFR+2.61% |
| LIBOR+2.75% - PRIME+2.00% |
| Aug 2025 |
|
| 83,655 |
|
|
| 255,978 |
|
Fund II Variable Rate - Swapped (a) |
| 5.85% |
|
|
| Aug 2025 |
|
| 50,000 |
|
|
| — |
|
Total Fund II Mortgages Payable |
|
|
|
|
|
|
|
| 133,655 |
|
|
| 255,978 |
|
Fund III Variable Rate |
| SOFR+3.35% |
| LIBOR+2.75% |
| Jul 2023 |
|
| 35,970 |
|
|
| 34,728 |
|
Fund IV Fixed Rate |
| 4.50% |
| 4.50% |
| Oct 2025 |
|
| 1,120 |
|
|
| 1,120 |
|
Fund IV Variable Rate |
| LIBOR+2.25%-LIBOR+3.65% |
| LIBOR+1.60%-LIBOR+3.65% |
| Apr 2023 - Jun 2026 |
|
| 145,110 |
|
|
| 221,832 |
|
Fund IV Variable Rate - Swapped (a) |
|
|
| 3.48%-4.61% |
|
|
|
| — |
|
|
| 23,316 |
|
Total Fund IV Mortgages and Other Notes Payable |
|
|
|
|
|
|
|
| 146,230 |
|
|
| 246,268 |
|
Fund V Fixed Rate |
| 3.35% |
| 3.35% |
| May 2023 |
|
| 31,801 |
|
|
| 31,801 |
|
Fund V Variable Rate |
| LIBOR + 1.85% - SOFR + 2.76% |
| LIBOR + 1.85% - SOFR + 2.76% |
| Jun 2023 - Nov 2026 |
|
| 36,409 |
|
|
| 58,878 |
|
Fund V Variable Rate - Swapped (a) |
| 2.93%-5.11% |
| 2.43%-4.78% |
| Jan 2023 - Apr 2025 |
|
| 358,014 |
|
|
| 297,731 |
|
Total Fund V Mortgages Payable |
|
|
|
|
|
|
|
| 426,224 |
|
|
| 388,410 |
|
Net unamortized debt issuance costs |
|
|
|
|
|
|
|
| (7,621 | ) |
|
| (3,958 | ) |
Unamortized premium |
|
|
|
|
|
|
|
| 343 |
|
|
| 446 |
|
Total Mortgages Payable |
|
|
|
|
|
|
| $ | 928,639 |
|
| $ | 1,140,293 |
|
Unsecured Notes Payable |
|
|
|
|
|
|
|
|
|
|
|
| ||
Core Variable Rate Unsecured |
| 3.74%-5.11% |
| 3.65%-5.32% |
| Jun 2026 - Jul 2029 |
| $ | 650,000 |
|
| $ | 400,000 |
|
Fund II Unsecured Notes Payable |
|
|
| LIBOR+2.25% |
|
|
|
| — |
|
|
| 40,000 |
|
Fund IV Subscription Facility |
|
|
| SOFR+2.01% |
|
|
|
| — |
|
|
| 5,000 |
|
Fund V Subscription Facility |
| SOFR+1.86% |
| LIBOR+1.90% |
| May 2023 |
|
| 51,210 |
|
|
| 118,028 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Net unamortized debt issuance costs |
|
|
|
|
|
|
|
| (5,076 | ) |
|
| (3,988 | ) |
Total Unsecured Notes Payable |
|
|
|
|
|
|
| $ | 696,134 |
|
| $ | 559,040 |
|
Unsecured Line of Credit |
|
|
|
|
|
|
|
|
|
|
|
| ||
Core Unsecured Line of Credit - Variable Rate |
| SOFR+1.50% |
| LIBOR + 1.40% |
| Jun 2025 |
| $ | 12,287 |
|
| $ | 46,491 |
|
Core Unsecured Line of Credit -Swapped (a) |
| 3.74%-5.11% |
| 3.65%-5.32% |
| Jun 2025 |
|
| 156,000 |
|
|
| 66,414 |
|
Total Unsecured Line of Credit |
|
|
|
|
|
|
| $ | 168,287 |
|
| $ | 112,905 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Total Debt - Fixed Rate (b) |
|
|
|
|
|
|
| $ | 1,440,773 |
|
| $ | 1,038,803 |
|
Total Debt - Variable Rate (c) |
|
|
|
|
|
|
|
| 364,641 |
|
|
| 780,935 |
|
Total Debt |
|
|
|
|
|
|
|
| 1,805,414 |
|
|
| 1,819,738 |
|
Net unamortized debt issuance costs |
|
|
|
|
|
|
|
| (12,697 | ) |
|
| (7,946 | ) |
Unamortized premium |
|
|
|
|
|
|
|
| 343 |
|
|
| 446 |
|
Total Indebtedness |
|
|
|
|
|
|
| $ | 1,793,060 |
|
| $ | 1,812,238 |
|
91
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Credit Facilities
The Operating Partnership has a $700.0 million senior unsecured credit facility, as amended (the “Credit Facility”), with Bank of America, N.A. as administrative agent, comprised of a $300.0 million senior unsecured revolving credit facility (the “Revolver”) which bears interest at a floating rate based on SOFR with margins based on leverage or credit rating, and a $400.0 million senior unsecured term loan (the “Term Loan”) which bears interest at a floating rate based on SOFR with margins based on leverage or credit rating. Currently, the Revolver bears interest at SOFR + 1.50% and the Term Loan bears interest at SOFR + 1.65%. The Revolver matures on June 29, 2025, subject to two six-month extension options, and the Term Loan matures on June 29, 2026. The Credit Facility provides for an accordion feature, which allows for one or more increases in the revolving credit facility or term loan facility, for a maximum aggregate principal amount not to exceed $900.0 million. The Credit Facility is guaranteed by the Company and certain subsidiaries of the Company.
On April 6, 2022, the Operating Partnership entered into a $175.0 million term loan facility (the “$175.0 Million Term Loan”), with Bank of America, N.A. as administrative agent, which bears interest at a floating rate based on SOFR with margins based on leverage or credit rating, and which matures on April 6, 2027. The proceeds of the $175.0 million term loan were used to pay down the Revolver. Currently the $175.0 million term loan bears interest at SOFR + 1.60%. The $175.0 million term loan is guaranteed by the Company and certain subsidiaries of the Company.
On July 29, 2022, the Operating Partnership entered into the $75.0 million term loan (the “$75.0 Million Term Loan”), with TD Bank, N.A. as administrative agent, which bears interest at a floating rate based on SOFR with margins based on leverage or credit rating and which matures on July 29, 2029. Currently the $75.0 million term loan bears interest at SOFR + 2.05%. The proceeds of the $75.0 million term loan were used to pay down the Revolver. The $75.0 million term loan is guaranteed by the Company and certain subsidiaries of the Company.
The Company has entered into various swap agreements to effectively fix its interest costs on a portion of its Revolver and term loans, as described above, at December 31, 2022 (Note 8).
Mortgages and Other Notes Payable
During the year ended December 31, 2017,2022, the Company obtained eleven(amounts represent balances at the time of transactions):
92
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
During the year ended December 31, 2021, the Company (amounts represent balances at the time of transactions):
At December 31, 20172022 and December 31, 2016,2021, the Company’s mortgages were collateralized by 4231 and 3937 properties, respectively, and the related tenant leases. Certain loans are cross-collateralized and contain cross-default provisions. The loan agreements contain customary representations, covenants, and events of default. Certain loan agreements require the Company to comply with affirmative and negative covenants, including the maintenance of debt service coverage and leverage ratios. The Operating Partnership has guaranteed up to $50.0 million related to the Fund II City Point mortgage loan. The Company is not in default on any of its loan agreements at December 31, 2022. A portion of the Company’s variable-rate mortgage debt has been effectively fixed through certain cash flow hedge transactions (
Unsecured Notes Payable
Unsecured notes payable for which total availability was $70.3$41.8 million and $9.9$16.3 million at December 31, 20172022 and December 31, 2016,2021, respectively, are comprised of the following:
93
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Unsecured Revolving Line of Credit
At December 31, 2022 and 2021, the Company had a total of $96.2$131.7 million and $138.7$183.1 million, respectively, available under its $150.0 million Core unsecured revolving line of creditRevolver, reflecting borrowings of $41.5$168.3 million and $0$112.9 million and letters of credit of $12.3$0.0 million and $11.3$4.0 million at December 31, 20172022 and 2021, respectively. At each of December 31, 2016, respectively. At December 31, 2017 a portion2022 and 2021, $156.0 million and $66.4 million, respectively, of the Core unsecured revolving line of credit wasoutstanding borrowings under its revolver were swapped to a fixed rate. The Core unsecured revolving line of credit was refinanced in February 2018 (
Scheduled Debt Principal Payments
The scheduled principal repayments, without regard to available extension options (described further below), of the Company’s consolidated indebtedness, as of December 31, 20172022 are as follows (in thousands):
Year Ending December 31, |
|
|
| |
2023 |
| $ | 340,075 |
|
2024 |
|
| 251,663 |
|
2025 |
|
| 408,988 |
|
2026 |
|
| 436,426 |
|
2027 |
|
| 202,354 |
|
Thereafter |
|
| 165,908 |
|
|
|
| 1,805,414 |
|
Unamortized premium |
|
| 343 |
|
Net unamortized debt issuance costs |
|
| (12,697 | ) |
Total indebtedness |
| $ | 1,793,060 |
|
Year Ending December 31, | |||
2018 | $ | 94,400 | |
2019 | 213,573 | ||
2020 | 576,379 | ||
2021 | 255,027 | ||
2022 | 98,840 | ||
Thereafter | 200,167 | ||
1,438,386 | |||
Unamortized fair market value of assumed debt | 856 | ||
Net unamortized debt issuance costs | (14,833 | ) | |
Total indebtedness | $ | 1,424,409 |
The table above does not reflect available extension options (subject to customary conditions) on consolidated debt with balances as of December 31, 2022 of $51.2 million contractually due in 2023, $0.0 million contractually due in 2024, $344.3 million contractually due in 2025 and $0.0 million contractually due in 2026; all for which the Company has available options to extend by up to 12 months and for some an additional 12 months thereafter. However, there can be no assurance that the Company will be able to successfully execute any or all of its available extension options.
See
Note 4 for information about liabilities of the Company’s unconsolidated affiliates.8. Financial Instruments and Fair Value Measurements
The fair value of an asset is defined as the exit price, which is the amount that would either be received when an asset is sold or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The guidance establishes a three-tier fair value hierarchy
94
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
based on the inputs used in measuring fair value. These tiers are: Level 1, for which quoted market prices for identical instruments are available in active markets, such as money market funds, equity securities, and U.S. Treasury securities; Level 2, for which there are inputs other than quoted prices included within Level 1 that are observable for the instrument, such as certain derivative instruments including interest rate caps and interest rate swaps; and Level 3, for financial instruments or other assets/liabilities that do not fall into Level 1 or Level 2 and for which little or no market data exists, therefore requiring the Company to develop its own assumptions.
Items Measured at Fair Value on a Recurring Basis
The methods and assumptions described below were used to estimate the fair value of each class of financial instrument. For significant Level 3 items, the Company has also provided the unobservable inputs along with their weighted-average ranges.
Money Market Funds
— The Company has money market funds, which at times have zero balances and are included in Cash and cash equivalents in the consolidatedEquity Investments – Albertsons became publicly traded during 2020 (Note 4). Upon Albertsons’ IPO, the Company’s Investment in Albertsons has a readily determinable market value (traded on an exchange) and is being accounted for as a Level 1 investment.
Derivative Assets
— The Company has derivative assets, which are included in Other assets, netDerivative Liabilities
— The Company has derivative liabilities, which are included in Accounts payable and other liabilitiesThe Company did not have any transfers into or out of Level 1, Level 2, and Level 3 measurements during the yearsyear ended December 31, 2017, 20162022 or 2015.
The following table presents the Company’s fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis (in thousands):
|
| December 31, 2022 |
|
| December 31, 2021 |
| ||||||||||||||||||
|
| Level 1 |
|
| Level 2 |
|
| Level 3 |
|
| Level 1 |
|
| Level 2 |
|
| Level 3 |
| ||||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Money market funds |
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
Derivative financial instruments |
|
| — |
|
|
| 54,902 |
|
|
| — |
|
|
| — |
|
|
| 7 |
|
|
| — |
|
Investment in Albertsons (Note 4) |
|
| 85,403 |
|
|
| — |
|
|
| — |
|
|
| 124,316 |
|
|
| — |
|
|
| — |
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Derivative financial instruments |
|
| — |
|
|
| (46 | ) |
|
| — |
|
|
| — |
|
|
| (45,027 | ) |
|
| — |
|
December 31, 2017 | December 31, 2016 | |||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Level 1 | Level 2 | Level 3 | |||||||||||||||||||
Assets | ||||||||||||||||||||||||
Money Market Funds | $ | 3 | $ | — | $ | — | $ | 20,001 | $ | — | $ | — | ||||||||||||
Derivative financial instruments | — | 4,402 | — | — | 2,921 | — | ||||||||||||||||||
Liabilities | ||||||||||||||||||||||||
Derivative financial instruments | — | 1,467 | — | — | 3,590 | — |
In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability.
95
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Items Measured at Fair Value on a Nonrecurring Basis (Including
Impairment Charges)
During the year ended December 31, 2017,2022, the Company recognized an impairment charge of $3.8 million, inclusive of an amount attributable to a noncontrolling interest of $2.7 million, on Fund II’s City Point Condominium Tower I property,reduced its holding period and intended use, and projected operating income at certain properties. During 2021, the Company was impacted by the COVID-19 Pandemic, which was classified as held for sale at September 30, 2017, in ordercaused the Company to reduce the carrying value of the property to its estimated fair value. In addition, the Company recognized an impairment charge of $10.6 million, inclusive of an amount attributable to a noncontrolling interest of $7.6 million, on a property classified as held for saleforecasted operating income at December 31, 2017 (
|
|
|
|
|
|
|
|
|
| Impairment Charge |
| |||||
Property and Location |
| Owner |
| Triggering Event |
| Level 3 Inputs |
| Effective Date |
| Total |
|
| Acadia's Share |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
2022 Impairment Charges |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
146 Geary Street, |
| Fund IV |
| Reduced projected operating income |
| Projections of: holding period, net operating income, cap rate, incremental costs |
| Sept 30, 2022 |
| $ | 12,435 |
|
| $ | 2,875 |
|
717 N. Michigan Avenue, |
| Fund IV |
| Reduced holding period and intended use |
| Offering price |
| Sept 30, 2022 |
|
| 20,876 |
|
|
| 4,827 |
|
Total 2022 Impairment Charges |
|
|
|
|
|
|
|
|
| $ | 33,311 |
|
| $ | 7,702 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
2021 Impairment Charges |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
210 Bowery commercial unit, |
| Fund IV |
| Reduced projected operating income |
| Projections of: holding period, net operating income, cap rate, incremental costs |
| Sept 30, 2021 |
| $ | 3,016 |
|
| $ | 697 |
|
27 E. 61st Street |
| Fund IV |
| Reduced projected operating income |
| Projections of: holding period, net operating income, cap rate, incremental costs |
| Sept 30, 2021 |
|
| 6,909 |
|
|
| 1,597 |
|
Total 2021 Impairment Charges |
|
|
|
|
|
|
|
|
| $ | 9,925 |
|
| $ | 2,294 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
96
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Derivative Financial Instruments
The Company had the following interest rate swaps and caps for the periods presented (dollars in thousands):
|
|
|
|
|
|
|
|
| Strike Rate |
|
|
|
| Fair Value |
| |||||||||||||
Derivative |
| Aggregate Notional Amount |
|
| Effective Date |
| Maturity Date |
| Low |
|
|
| High |
|
| Balance Sheet |
| December 31, |
|
| December 31, |
| ||||||
Core |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Interest Rate Swaps |
| $ | 50,000 |
|
| Dec 2022 |
| Dec 2029 |
|
| 3.61 | % |
| — |
|
| 3.61 | % |
| Other Liabilities |
| $ | (46 | ) |
| $ | (40,650 | ) |
Interest Rate Swap |
|
| 806,000 |
|
| Mar 2015 - Aug 2022 |
| Mar 2023 - Jul 2030 |
|
| 2.10 | % |
| — |
|
| 3.36 | % |
| Other Assets |
|
| 40,884 |
|
|
| — |
|
|
| $ | 856,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 40,838 |
|
| $ | (40,650 | ) | |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Fund II |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Interest Rate Swap (a) |
| $ | — |
|
| Jan 2023 |
| Dec 2029 |
|
| 3.23 | % |
| — |
|
| 3.23 | % |
| Other Assets |
| $ | 1,108 |
|
| $ | — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Fund III |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Interest Rate Cap |
| $ | 35,970 |
|
| Jul 2022 |
| Jul 2023 |
|
| 3.50 | % |
| — |
|
| 3.50 | % |
| Other Assets |
| $ | 232 |
|
| $ | — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Fund IV |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Interest Rate Swaps |
| $ | — |
|
|
|
|
|
|
|
|
|
|
|
|
| Other Liabilities |
| $ | — |
|
| $ | (167 | ) | |||
Interest Rate Caps |
|
| 76,338 |
|
| Jul 2021 - Dec 2022 |
| Jul 2023 - Dec 2023 |
|
| 3.00 | % |
| — |
|
| 3.50 | % |
| Other Assets |
|
| 1,093 |
|
|
| 7 |
|
|
| $ | 76,338 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 1,093 |
|
| $ | (160 | ) | |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Fund V |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Interest Rate Swaps (b) |
| $ | 308,014 |
|
| Jun 2018 - Jan 2023 |
| Jan 2023 - Dec 2027 |
|
| 0.91 | % |
| — |
|
| 3.36 | % |
| Other Assets |
| $ | 11,585 |
|
| $ | — |
|
Interest Rate Swaps |
|
| — |
|
|
|
|
|
|
|
|
|
|
|
|
| Other Liabilities |
|
| — |
|
|
| (4,210 | ) | |||
|
| $ | 308,014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 11,585 |
|
| $ | (4,210 | ) | |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Total asset derivatives |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 54,902 |
|
| $ | 7 |
| ||||||
Total liability derivatives |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | (46 | ) |
| $ | (45,027 | ) |
Aggregate Notional Amount | Strike Rate | Balance Sheet Location | Fair Value | |||||||||||||
Derivative Instrument | Effective Date | Maturity Date | Low | High | December 31, 2017 | December 31, 2016 | ||||||||||
Core | ||||||||||||||||
Interest Rate Swaps | $ | 149,036 | Oct 2011 - March 2015 | July 2018 - Mar 2025 | 1.38% | — | 3.77% | Other Liabilities | $ | (1,438 | ) | $ | (3,218 | ) | ||
Interest Rate Swaps | 248,571 | Sep 2012 - July 2017 | July 2020 - July 2027 | 1.24% | — | 3.77% | Other Assets | 4,076 | 2,609 | |||||||
$ | 397,607 | $ | 2,638 | $ | (609 | ) | ||||||||||
Fund II | ||||||||||||||||
Interest Rate Swap | $ | 19,560 | October 2014 | November 2021 | 2.88% | — | 2.88% | Other Liabilities | $ | (29 | ) | $ | (228 | ) | ||
Interest Rate Cap | 29,500 | April 2013 | April 2018 | 4.00% | — | 4.00% | Other Assets | — | — | |||||||
$ | 49,060 | $ | (29 | ) | $ | (228 | ) | |||||||||
Fund III | ||||||||||||||||
Interest Rate Cap | $ | 58,000 | Dec 2016 | Jan 2020 | 3.00% | — | 3.00% | Other Assets | $ | 14 | $ | 127 | ||||
Fund IV | ||||||||||||||||
Interest Rate Swaps | $ | 86,851 | May 2014 - March 2017 | May 2019 - April 2022 | 1.78% | — | 2.11% | Other Assets | $ | 295 | $ | — | ||||
Interest Rate Swaps | — | May 2014 - March 2017 | May 2019 - April 2022 | 1.78% | — | 2.11% | Other Liabilities | — | $ | (144 | ) | |||||
Interest Rate Caps | 108,900 | July 2016 - November 2016 | August 2019 - December 2019 | 3.00% | — | 3.00% | Other Assets | 17 | 185 | |||||||
$ | 195,751 | $ | 312 | $ | 41 | |||||||||||
Total asset derivatives | $ | 4,402 | $ | 2,921 | ||||||||||||
Total liability derivatives | $ | (1,467 | ) | $ | (3,590 | ) |
All of the Company’s derivative instruments have been designated as cash flow hedges and hedge the future cash outflows on variable-rate debt (Note 7). It is estimated that approximately $0.6$26.4 million included in accumulatedAccumulated other comprehensive (loss) income related to derivatives will be reclassified to interest expense inwithin the 2018 results of operation.next twelve months. As of December 31, 20172022 and 2016, 2021, no derivatives were designated as fair value hedges or hedges of net investments in foreign operations. Additionally, the Company does not use derivatives for trading or speculative purposes and currently does not have any derivatives that are not designated hedges.
During the first quarter of 2021, the Company terminated two interest rate swaps with forward effective dates with an aggregate notional value of $100.0 million (Note 7) for cash proceeds of $3.4 million. As the hedged forecasted transaction is still expected, amounts deferred in Accumulated other comprehensive loss has been amortized into earnings as a reduction of interest expense over the original term of the swaps beginning in 2022.
97
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Risk Management Objective of Using Derivatives
The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company manages economic risks, including interest rate, liquidity, and credit risk, primarily by managing the amount, sources, and duration of its debt funding and, from time to time, through the use of derivative financial instruments. The Company enters into derivative financial instruments to manage exposures that result in the receipt or payment of future known and uncertain cash amounts, the values of which are determined by interest rates. The Company’s derivative financial instruments are used to manage differences in the amount, timing and duration of the Company’s known or expected cash receipts and its known or expected cash payments principally related to the Company’s investments and borrowings.
The Company is exposed to credit risk in the event of non-performance by the counterparties to the Swapsswaps if the derivative position has a positive balance. The Company believes it mitigates its credit risk by entering into Swapsswaps with major financial institutions. The Company continually monitors and actively manages interest costs on its variable-rate debt portfolio and may enter into additional interest rate swap positions or other derivative interest rate instruments based on market conditions. The Company has not entered, and does not plan to enter, into any derivative financial instruments for trading or speculative purposes.
Year Ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
Amount of (loss) income related to the effective portion recognized in other comprehensive income | $ | 634 | $ | (646 | ) | $ | (5,061 | ) | |||
Amount of loss related to the effective portion subsequently reclassified to earnings | — | — | — | ||||||||
Amount of gain (loss) related to the ineffective portion and amount excluded from effectiveness testing | — | — | — |
Credit Risk-Related Contingent Features
The Company has agreements with each of its Swapswap counterparties that contain a provision whereby if the Company defaults on certain of its unsecured indebtedness, the Company could also be declared in default on its swaps, resulting in an acceleration of payment under the swaps.
Other Financial Instruments
The Company’s other financial instruments had the following carrying values and fair values as of the dates shown (dollars in thousands)thousands, inclusive of amounts attributable to noncontrolling interests where applicable):
|
|
|
|
| December 31, 2022 |
|
| December 31, 2021 |
| |||||||||||
|
| Level |
|
| Carrying |
|
| Estimated |
|
| Carrying |
|
| Estimated |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Notes Receivable (a) |
|
| 3 |
|
| $ | 123,903 |
|
| $ | 122,716 |
|
| $ | 153,886 |
|
| $ | 154,093 |
|
City Point Loan (a) |
|
| 3 |
|
|
| 65,945 |
|
|
| 65,856 |
|
|
| — |
|
|
| — |
|
Mortgage and Other Notes Payable (a) |
|
| 3 |
|
|
| 935,917 |
|
|
| 906,348 |
|
|
| 1,143,805 |
|
|
| 1,125,571 |
|
Investment in non-traded equity securities (b) |
|
| 3 |
|
|
| 4,160 |
|
|
| 5,593 |
|
|
| 3,656 |
|
|
| 4,062 |
|
Unsecured notes payable and Unsecured line of credit (c) |
|
| 2 |
|
|
| 869,497 |
|
|
| 868,399 |
|
|
| 675,933 |
|
|
| 680,171 |
|
December 31, 2017 | December 31, 2016 | |||||||||||||||||
Level | Carrying Amount | Estimated Fair Value | Carrying Amount | Estimated Fair Value | ||||||||||||||
Notes Receivable (a) | 3 | $ | 153,829 | $ | 151,712 | $ | 276,163 | $ | 272,052 | |||||||||
Mortgage and Other Notes Payable, net (a) | 3 | 909,174 | 921,891 | 1,055,728 | 1,077,926 | |||||||||||||
Investment in non-traded equity securities (b) | 3 | 411 | 22,824 | 802 | 25,194 | |||||||||||||
Unsecured notes payable and Unsecured line of credit, net (c) | 2 | 515,235 | 515,330 | 434,636 | 435,779 |
The Company’s cash and cash equivalents, restricted cash, accountsrents receivable, accounts payable and certain financial instruments included in other assets and other liabilities had fair values that approximated their carrying values due to their short maturity profiles at December 31, 2017.2022.
9. Commitments and Contingencies
The Company is involved in various matters of litigation arising in the normal courseout of, or incidental to, its business. While the Company is unable to predict with certainty the amounts involved, the Company’soutcome of any particular matter, management and counsel are of the opinion that,does not expect, when such litigation is resolved, that the Company’s resulting liability,exposure to loss contingencies, if any, will not have a significantmaterial adverse effect on the Company’sits consolidated financial position or results of operations, or liquidity. The Company's policy is to accrue legal expenses as they are incurred.
98
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Commitments and Guaranties
In conjunction with the development and expansion of various properties, the Company has entered into agreements with general contractors for the construction or development of properties aggregating approximately $92.2$39.1 million and $85.4$38.1 million as of December 31, 20172022 and 2021, respectively.
At December 31, 2016, respectively.
99
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Common Shares
In addition to the ATM Program activity discussed below, the Company completed the following transactions in its common sharesCommon Shares during the year ended December 31, 2017:
In addition to the ATM Program and share repurchase activity discussed below, the Company completed the following transactions in its Common Shares during the year ended December 31, 2021:
ATM Program
The Company has an amendment to the Company’s Declaration of Trust to increase the authorized share capital ofat-the-market equity issuance program (“ATM Program”) that provides the Company from 100 million shares of beneficial interestan efficient vehicle for raising public equity capital to 200 million shares which became effective on July 24, 2017.
Share Repurchase Program
During 2018, the employees’ statutory minimum income taxes due on the valueCompany’s board of the portion of their Restricted Shares that vested.
Dividends and Distributions
The following table sets forth the distributions declared and/or paid during the periods presented:
Date Declared |
| Amount Per Share |
|
| Record Date |
| Payment Date | |
|
|
|
|
|
|
|
| |
March 15, 2021 |
| $ | 0.15 |
|
| March 31, 2021 |
| April 15, 2021 |
May 5, 2021 |
| $ | 0.15 |
|
| June 30, 2021 |
| July 15, 2021 |
August 5, 2021 |
| $ | 0.15 |
|
| September 30, 2021 |
| October 15, 2021 |
November 3, 2021 |
| $ | 0.15 |
|
| December 31, 2021 |
| January 14, 2022 |
February 15, 2022 |
| $ | 0.18 |
|
| March 31, 2022 |
| April 14, 2022 |
May 4, 2022 |
| $ | 0.18 |
|
| June 30, 2022 |
| July 15, 2022 |
August 10, 2022 |
| $ | 0.18 |
|
| September 30, 2022 |
| October 14, 2022 |
November 9, 2022 |
| $ | 0.18 |
|
| December 30, 2022 |
| January 13, 2023 |
100
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Accumulated Other Comprehensive Income
The following table setstables set forth the activity in accumulated other comprehensive income (loss) income for the yearyears ended December 31, 20172022, 2021 and 20162020 (in thousands):
|
| Acadia's Share |
| |
Balance at January 1, 2022 |
| $ | (36,214 | ) |
|
|
|
| |
Other comprehensive income before reclassifications - swap agreements |
|
| 96,858 |
|
Reclassification of realized interest on swap agreements |
|
| 8,232 |
|
Net current period other comprehensive income |
|
| 105,090 |
|
Net current period other comprehensive loss attributable to redeemable noncontrolling |
|
| — |
|
Net current period other comprehensive income attributable to noncontrolling |
|
| (22,059 | ) |
Balance at December 31, 2022 |
| $ | 46,817 |
|
|
|
|
| |
Balance at January 1, 2021 |
| $ | (74,891 | ) |
|
|
|
| |
Other comprehensive income before reclassifications - swap agreements |
|
| 30,500 |
|
Reclassification of realized interest on swap agreements |
|
| 21,407 |
|
Net current period other comprehensive income |
|
| 51,907 |
|
Net current period other comprehensive income attributable to noncontrolling |
|
| (13,230 | ) |
Balance at December 31, 2021 |
| $ | (36,214 | ) |
|
|
|
| |
Balance at January 1, 2020 |
| $ | (31,474 | ) |
|
|
|
| |
Other comprehensive loss before reclassifications |
|
| (73,686 | ) |
Reclassification of realized interest on swap agreements |
|
| 15,059 |
|
Net current period other comprehensive loss |
|
| (58,627 | ) |
Net current period other comprehensive income attributable to noncontrolling |
|
| 15,210 |
|
Balance at December 31, 2020 |
| $ | (74,891 | ) |
Gains or Losses on Derivative Instruments | |||
Balance at January 1, 2017 | $ | (798 | ) |
Other comprehensive loss before reclassifications | 634 | ||
Reclassification of realized interest on swap agreements | 3,317 | ||
Net current period other comprehensive loss | 3,951 | ||
Net current period other comprehensive loss attributable to noncontrolling interests | (539 | ) | |
Balance at December 31, 2017 | $ | 2,614 | |
Balance at January 1, 2016 | $ | (4,463 | ) |
Other comprehensive loss before reclassifications | (646 | ) | |
Reclassification of realized interest on swap agreements | 4,576 | ||
Net current period other comprehensive loss | 3,930 | ||
Net current period other comprehensive loss attributable to noncontrolling interests | (265 | ) | |
Balance at December 31, 2016 | $ | (798 | ) |
101
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Noncontrolling Interests
The following table summarizestables summarize the change in the noncontrolling interests for the yearyears ended December 31, 20172022, 2021 and 20162020 (dollars in thousands):
Noncontrolling Interests in Operating Partnership (a) | Noncontrolling Interests in Partially-Owned Affiliates (b) | Total | |||||||||
Balance at January 1, 2017 | $ | 95,422 | $ | 494,126 | $ | 589,548 | |||||
Distributions declared of $1.05 per Common OP Unit | (6,453 | ) | — | (6,453 | ) | ||||||
Net income (loss) for the period January 1 through December 31, 2017 | 4,159 | (1,321 | ) | 2,838 | |||||||
Conversion of 5,000 Preferred and 81,453 Common OP Units to Common Shares by limited partners of the Operating Partnership | (1,541 | ) | — | (1,541 | ) | ||||||
Other comprehensive income - unrealized loss on valuation of swap agreements | 85 | (232 | ) | (147 | ) | ||||||
Reclassification of realized interest expense on swap agreements | 141 | 545 | 686 | ||||||||
Noncontrolling interest contributions | — | 85,206 | 85,206 | ||||||||
Noncontrolling interest distributions | — | (32,805 | ) | (32,805 | ) | ||||||
Employee Long-term Incentive Plan Unit Awards | 10,457 | — | 10,457 | ||||||||
Rebalancing adjustment (d) | 651 | — | 651 | ||||||||
Balance at December 31, 2017 | $ | 102,921 | $ | 545,519 | $ | 648,440 | |||||
Balance at January 1, 2016 | $ | 96,340 | $ | 324,526 | $ | 420,866 | |||||
Distributions declared of $1.16 per Common OP Unit | (6,753 | ) | — | (6,753 | ) | ||||||
Net income for the period January 1 through December 31, 2016 | 5,002 | 56,814 | 61,816 | ||||||||
Conversion of 351,250 Common OP Units to Common Shares by limited partners of the Operating Partnership | (7,892 | ) | — | (7,892 | ) | ||||||
Issuance of Common and Preferred OP Units to acquire real estate | 31,429 | — | 31,429 | ||||||||
Acquisition of noncontrolling interests (c) | — | (25,925 | ) | (25,925 | ) | ||||||
Other comprehensive income - unrealized loss on valuation of swap agreements | (43 | ) | (289 | ) | (332 | ) | |||||
Change in control of previously unconsolidated investment | — | (75,713 | ) | (75,713 | ) | ||||||
Reclassification of realized interest expense on swap agreements | 223 | 374 | 597 | ||||||||
Noncontrolling interest contributions | — | 295,108 | 295,108 | ||||||||
Noncontrolling interest distributions | — | (80,769 | ) | (80,769 | ) | ||||||
Employee Long-term Incentive Plan Unit Awards | 12,768 | — | 12,768 | ||||||||
Rebalancing adjustment (d) | (35,652 | ) | — | (35,652 | ) | ||||||
Balance at December 31, 2016 | $ | 95,422 | $ | 494,126 | $ | 589,548 |
|
| Noncontrolling |
|
| Noncontrolling |
|
| Total |
|
| Redeemable Noncontrolling Interests (c) |
| ||||
Balance at January 1, 2022 |
| $ | 94,120 |
|
| $ | 534,202 |
|
| $ | 628,322 |
|
| $ | — |
|
Distributions declared of $0.72 per Common OP Unit and distributions on Preferred OP Units |
|
| (5,094 | ) |
|
| — |
|
|
| (5,094 | ) |
|
| — |
|
Net loss for the year ended December 31, 2022 |
|
| (1,308 | ) |
|
| (22,962 | ) |
|
| (24,270 | ) |
|
| (5,536 | ) |
Conversion of 234,473 Common OP Units to Common Shares by limited partners of the Operating Partnership |
|
| (3,945 | ) |
|
| — |
|
|
| (3,945 | ) |
|
| — |
|
Other comprehensive income - unrealized gain on valuation of swap agreements |
|
| 4,641 |
|
|
| 15,567 |
|
|
| 20,208 |
|
|
| — |
|
Reclassification of realized interest expense on swap agreements |
|
| 58 |
|
|
| 1,793 |
|
|
| 1,851 |
|
|
| — |
|
Acquisition of noncontrolling interest (d) |
|
| — |
|
|
| (91,811 | ) |
|
| (91,811 | ) |
|
| — |
|
City Point Loan |
|
| — |
|
|
| — |
|
|
| — |
|
|
| (65,391 | ) |
City Point Loan accrued interest |
|
| — |
|
|
| — |
|
|
| — |
|
|
| (3,923 | ) |
Noncontrolling interest contributions |
|
| — |
|
|
| 109,428 |
|
|
| 109,428 |
|
|
| 65,945 |
|
Noncontrolling interest distributions |
|
| — |
|
|
| (79,838 | ) |
|
| (79,838 | ) |
|
| — |
|
Employee Long-term Incentive Plan Unit Awards |
|
| 10,000 |
|
|
| — |
|
|
| 10,000 |
|
|
| — |
|
Reclassification of redeemable noncontrolling interests(e) |
|
| — |
|
|
| (76,569 | ) |
|
| (76,569 | ) |
|
| 76,569 |
|
Reallocation of noncontrolling interests (f) |
|
| 1,082 |
|
|
| — |
|
|
| 1,082 |
|
|
| — |
|
Balance at December 31, 2022 |
| $ | 99,554 |
|
| $ | 389,810 |
|
| $ | 489,364 |
|
| $ | 67,664 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Balance at January 1, 2021 |
| $ | 89,431 |
|
| $ | 519,734 |
|
| $ | 609,165 |
|
| $ | — |
|
Distributions declared of $0.60 per Common OP Unit |
|
| (4,185 | ) |
|
| — |
|
|
| (4,185 | ) |
|
| — |
|
Net income for the year ended December 31, 2021 |
|
| 2,075 |
|
|
| 407 |
|
|
| 2,482 |
|
|
| — |
|
Conversion of 89,765 Common OP Units to Common Shares by limited partners of the Operating Partnership |
|
| (1,431 | ) |
|
| — |
|
|
| (1,431 | ) |
|
| — |
|
Cancellation of OP units(g) |
|
| (568 | ) |
|
| — |
|
|
| (568 | ) |
|
| — |
|
Other comprehensive income - unrealized gain on valuation of swap agreements |
|
| 2,072 |
|
|
| 3,918 |
|
|
| 5,990 |
|
|
| — |
|
Reclassification of realized interest expense on swap agreements |
|
| 210 |
|
|
| 7,030 |
|
|
| 7,240 |
|
|
| — |
|
Noncontrolling interest contributions |
|
| — |
|
|
| 30,164 |
|
|
| 30,164 |
|
|
| — |
|
Noncontrolling interest distributions |
|
| — |
|
|
| (27,051 | ) |
|
| (27,051 | ) |
|
| — |
|
Employee Long-term Incentive Plan Unit Awards |
|
| 11,284 |
|
|
| — |
|
|
| 11,284 |
|
|
| — |
|
Reallocation of noncontrolling interests (f) |
|
| (4,768 | ) |
|
| — |
|
|
| (4,768 | ) |
|
| — |
|
Balance at December 31, 2021 |
| $ | 94,120 |
|
| $ | 534,202 |
|
| $ | 628,322 |
|
| $ | — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
102
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Balance at January 1, 2020 |
| $ | 97,670 |
|
| $ | 548,769 |
|
| $ | 646,439 |
|
| $ | — |
|
Distributions declared of $0.29 per Common OP Unit |
|
| (2,218 | ) |
|
| — |
|
|
| (2,218 | ) |
|
| — |
|
Net income (loss) for the year ended December 31, 2020 |
|
| 125 |
|
|
| (56,867 | ) |
|
| (56,742 | ) |
|
| — |
|
Conversion of 407,594 Common OP Units to Common Shares by limited partners of the Operating Partnership |
|
| (6,544 | ) |
|
| — |
|
|
| (6,544 | ) |
|
| — |
|
Other comprehensive loss - unrealized loss on valuation of swap agreements |
|
| (2,709 | ) |
|
| (17,995 | ) |
|
| (20,704 | ) |
|
| — |
|
Reclassification of realized interest expense on swap agreements |
|
| 174 |
|
|
| 5,320 |
|
|
| 5,494 |
|
|
| — |
|
Noncontrolling interest contributions |
|
| — |
|
|
| 52,174 |
|
|
| 52,174 |
|
|
| — |
|
Noncontrolling interest distributions |
|
| — |
|
|
| (27,574 | ) |
|
| (27,574 | ) |
|
| — |
|
Employee Long-term Incentive Plan Unit Awards |
|
| 10,130 |
|
|
| — |
|
|
| 10,130 |
|
|
| — |
|
Rebalancing adjustment (c) |
|
| (7,197 | ) |
|
| — |
|
|
| (7,197 | ) |
|
| — |
|
Acquisition of noncontrolling interest |
|
| — |
|
|
| 15,918 |
|
|
| 15,918 |
|
|
| — |
|
Cumulative effect of change in accounting principle |
|
| — |
|
|
| (11 | ) |
|
| (11 | ) |
|
| — |
|
Balance at December 31, 2020 |
| $ | 89,431 |
|
| $ | 519,734 |
|
| $ | 609,165 |
|
| $ | — |
|
103
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Preferred OP Units
There were no issuances of Preferred OP Units during the year ended December 31, In 1999 the Operating Partnership issued 1,580 Series A Preferred OP Units in connection with the acquisition of a property, which have a stated value of During Redeemable Noncontrolling Interests Williamsburg Portfolio In connection with the Williamsburg Portfolio acquisition in February 2022 (Note 2), the Company evaluated the Williamsburg Noncontrolling Interest ("NCI"), which represents the venture partner's one-time right to put its 50.01% interest in the property to the Company for redemption at fair value at a future date. As it was unlikely as of the acquisition date that the venture partner would receive any consideration on redemption due to the Company’s preferential returns, the initial fair value of the Williamsburg NCI was determined to be zero. The Company is required to periodically evaluate the NCI and adjust it to redemption value. At December 31, 2022, the Company determined that the fair value of the Williamsburg NCI was zero. City Point Loan In August 2022, the Company provided a loan, through a separate lending subsidiary, to other Fund II investors in City Point, through a separate borrower subsidiary, to fund the investors' pro rata contribution necessary to complete the refinancing of the City Point debt (Note 7), of which $65.9 million was funded at closing ("City Point Loan"). The City Point Loan has a five-year term which matures on August 1, 2027 and is collateralized by the investors' equity in City Point ("City Point NCI"). Because the City Point Loan was granted in return for a capital contribution from the investors, and is collateralized by the City Point NCI, the City Point Loan, net of a $0.5 million allowance for credit loss, and accrued interest are presented as a reduction of the City Point NCI balance. The borrower subsidiary of the City Point Loan was determined to be a variable interest entity ("VIE") for which the Company is not the primary beneficiary. The maximum loss in the VIE is limited to the amount of the City Point Loan and any accrued interest. In connection with the City Point Loan, each partner has a one-time right to put its City Point NCI to the Company for redemption in exchange for the settlement of its proportion of the City Point Loan amount plus either (i) a fixed cash amount or (ii) a cash amount equal to the value of fixed number of Common Shares of the Company on the trading day prior to the election, at a future point in time beginning in August 2023 ("redemption value"). As a result of granting these redemption rights, the City Point NCI, net of the City Point Loan, has been reclassified and presented as redeemable noncontrolling interests on the Company's consolidated balance sheets. Given the carrying value of the City Point NCI at the time of the transaction exceeded the maximum redemption value, the Company did not recognize any initial adjustment to accrete the City Point NCI to the redemption value. The Company is required to periodically evaluate the maximum redemption amount of the NCI interest and recognize an increase in the carrying value of the City Point NCI if the redemption value exceeds the then current carrying value. At December 31, 2022, the Company determined that the carrying value exceeded the maximum redemption value and no adjustment was required. 104 ACADIA REALTY TRUST AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 11. Leases Operating Leases As Lessor The Company is engaged in the operation of shopping centers and other retail properties that are either owned or, with respect to certain shopping centers, operated under long-term ground leases (see below) that expire at various dates through June 20, 2066, with renewal options. Space in the shopping centers is leased to tenants pursuant to agreements that provide for terms ranging generally from one month to Reserve Analysis The Year Ended December 31, 2022 Specific Allowance Balance at Provision (Recovery), Net Write-Offs General Allowance Balance at Allowance for credit loss - billed rents $ 23,586 $ (102 ) $ (4,656 ) $ - $ 18,828 Straight-line rent reserves 14,885 (1,742 ) (1,348 ) 1,450 13,245 Total - credit losses and reserves $ 38,471 $ (1,844 ) $ (6,004 ) $ 1,450 $ 32,073 Year Ended December 31, 2021 Specific Allowance Balance at Provision (Recovery), Net Write-Offs General Allowance Balance at Allowance for credit loss - billed rents $ 30,170 $ (2,796 ) $ (3,788 ) $ — $ 23,586 Straight-line rent reserves 14,839 807 (2,636 ) 1,875 14,885 Total - credit losses and reserves $ 45,009 $ (1,989 ) $ (6,424 ) $ 1,875 $ 38,471 Tenant Settlement2017.$1,000$1,000 per unit, and are entitled to a preferred quarterly distribution of the greater of (i) $22.50 (9%$22.50 (9.00% annually) per Series A Preferred OP Unit or (ii) the quarterly distribution attributable to a Series A Preferred OP Unit if such unit was converted into a Common OP Unit. Through December 31, 2016, $7.50$7.50 or the market price of the Common Shares as of the conversion date. the first quarter of 2016, the Operating Partnership issued 442,478 Common OP Units and 141,593 Series C Preferred OP Units to a third party to acquire Gotham Plaza ($100.00$100.00 per unit and are entitled to a preferred quarterly distribution of $0.9375$0.9375 per unit and are convertible into Common OP Units at a rate based on the share price at the time of conversion. If the share price is below $28.80 on the conversion date, each Series C Preferred OP Unit will be convertible into 3.4722 Common OP Units. If the share price is between $28.80$28.80 and $35.20$35.20 on the conversion date, each Series C Preferred OP Unit will be convertible into a number of Common OP Units equal to $100.00 divided by the closing share price. If the share price is above $35.20 on the conversion date, each Series C Preferred OP Unit will be convertible into 2.8409 Common OP Units. The Series C Preferred OP Units have a mandatory conversion date of December 31, 2025, at which time all units that have not been converted will automatically be converted into Common OP Units based on the same calculations. Through December 31, 2022, 15,209 Series C Preferred OP Units were converted into 52,613 Common OP Units and then into Common Shares.ninety-ninesixty years and generally provide for additional rents based on certain operating expenses as well as tenants’ sales volumes.The Company leases land at seven of its shopping centers, which are accounted for as operating leases and generally provide the Company with renewal options. Ground rent expense was $1.4 million, $1.2 million and $1.7 million (including capitalized ground rent at a property under development of $0.1 million, $0.6 million and $0.9 million) for the years ended December 31, 2017, 2016 and 2015, respectively. The leases terminate at various dates between 2020 and 2066. These leases provide the Company with options to renew for additional terms aggregating from 25 to 71 years. The Company also leases space for its corporate office. Office rent expense under this lease was $1.0 million, $1.0 million and $1.4 million for the years ended December 31, 2017, 2016 and 2015, respectively.Capital LeaseDuring 2016, the Company entered into a 49-year master lease at 991 Madison Avenue, which is accounted for as a capital lease. During the years ended December 31, 20172022 and 2016, payments for this lease totaled $2.52021, the Company earned $59.3 million and $1.3$58.3 million, respectively. respectively, in variable lease revenues, primarily for real estate taxes and common area maintenance charges, which are included in rental income in the consolidated statements of operations.lease was initially valued at $76.6 million, which representsactivity for the total discounted paymentsreserves related to billed rents and straight-line rents (including those under specific operating leases where the collection of rents is assessed not to be madeprobable) is as follows:
Beginning of
Period
End of Period
Beginning of
Period
End of Period
On September 24, 2021, the Company entered into a conditional settlement agreement with its former tenant ("Former Tenant") and lease guarantor at one of its Core properties for the payment by Former Tenant and guarantor of a minimum of $5.4 million in accordance with a payment schedule set forth and subject to the terms in the conditional settlement agreement. The payments relate to judgments entered in favor of the Company totaling $8.6 million, plus interest, for the Former Tenant’s default under the lease. The property underlease and its subsequent termination by the capital lease is includedCompany. Given the inherent uncertainties involving collectability, the Company has deferred any amounts not received in Note 2.92
As Lessee
During the year ended December 31, 2022, there were no leasing transactions where the Company acted as lessee.
105
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
During the year ended December 31, 2021, the Company:
Additional disclosures regarding the Company’s leases as lessee are as follows:
|
| Year Ended December 31, |
| |||||
|
| 2022 |
|
| 2021 |
| ||
Lease Cost |
|
|
|
|
|
| ||
Finance lease cost: |
|
|
|
|
|
| ||
Amortization of right-of-use assets |
| $ | 903 |
|
| $ | 903 |
|
Interest on lease liabilities |
|
| 410 |
|
|
| 388 |
|
Subtotal |
|
| 1,313 |
|
|
| 1,291 |
|
Operating lease cost |
|
| 5,338 |
|
|
| 7,184 |
|
Variable lease cost |
|
| 80 |
|
|
| 84 |
|
Total lease cost |
| $ | 6,731 |
|
| $ | 8,559 |
|
|
|
|
|
|
|
| ||
Other Information |
|
|
|
|
|
| ||
Weighted-average remaining lease term - finance leases (years) |
|
| 31.9 |
|
|
| 32.6 |
|
Weighted-average remaining lease term - operating leases (years) |
|
| 13.5 |
|
|
| 14.1 |
|
Weighted-average discount rate - finance leases |
|
| 6.3 | % |
|
| 6.3 | % |
Weighted-average discount rate - operating leases |
|
| 5.1 | % |
|
| 5.1 | % |
Right-of-use assets – finance leases are included in Operating real estate (Note 2) in the consolidated balance sheet. Lease liabilities – finance leases are included in Accounts payable and other liabilities in the consolidated balance sheet (Note 5). Operating lease cost comprises amortization of right-of-use assets for operating properties (related to ground rents) or amortization of right-of-use assets for office and corporate assets and is included in Property operating expense or General and administrative expense, respectively, in the consolidated statements of
106
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
operations. Finance lease cost comprises amortization of right-of-use assets for certain ground leases, which is included in Property operating expense, as well as interest on lease liabilities, which is included in Interest expense in the consolidated statements of operations.
Lease Obligations
The scheduled future minimum (i) rental revenues from rental properties under the terms of all non-cancelable tenant leases assuminggreater than one year (assuming no new or renegotiated leases or option extensions for such premisespremises) and (ii) rental payments under the terms of all non-cancelable operating and capitalfinance leases in which the Company is the lessee, principally for office space, land, and ground leases,equipment, as of December 31, 2017,2022, are summarized as follows (in thousands):
|
|
|
|
| Minimum Rental Payments |
| ||||||
Year Ending December 31, |
| Minimum Rental |
|
| Operating Leases (b) |
|
| Finance |
| |||
2023 |
| $ | 229,366 |
|
| $ | 5,389 |
|
| $ | — |
|
2024 |
|
| 223,138 |
|
|
| 5,414 |
|
|
| — |
|
2025 |
|
| 193,277 |
|
|
| 5,329 |
|
|
| — |
|
2026 |
|
| 166,582 |
|
|
| 5,173 |
|
|
| — |
|
2027 |
|
| 143,435 |
|
|
| 4,373 |
|
|
| — |
|
Thereafter |
|
| 608,168 |
|
|
| 20,065 |
|
|
| 12,549 |
|
|
|
| 1,563,966 |
|
|
| 45,743 |
|
|
| 12,549 |
|
Interest |
|
| — |
|
|
| (10,472 | ) |
|
| (5,527 | ) |
Total |
| $ | 1,563,966 |
|
| $ | 35,271 |
|
| $ | 7,022 |
|
Year Ending December 31, | Minimum Rental Revenues | Minimum Rental Payments | ||||||
2018 | $ | 165,893 | $ | 4,540 | ||||
2019 | 163,576 | 4,560 | ||||||
2020 | 149,453 | 4,356 | ||||||
2021 | 130,834 | 4,302 | ||||||
2022 | 111,958 | 4,395 | ||||||
Thereafter | 514,271 | 185,014 | ||||||
Total | $ | 1,235,985 | $ | 207,167 |
During the years ended December 31, 2017, 20162022, 2021 and 2015,2020, no single tenant or property collectively comprised more than 10%10% of the Company’s consolidated total revenues.
107
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
12. Segment Reporting
The Company has three reportable segments: Core Portfolio, Funds and Structured Financing. The Company’s Core Portfolio consists primarily of high-quality retail properties located primarily in high-barrier-to-entry, densely-populateddensely populated metropolitan areas with a long-term investment horizon. The Company’s Funds hold primarily retail real estate in which the Company co-invests with high-quality institutional investors. The Company’s Structured Financing segment consists of earnings and expenses related to notes and mortgages receivable which are held within the Core Portfolio or the Funds (
The following tables set forth certain segment information for the Company (in thousands):
As of or for the Year Ended December 31, 2017 | ||||||||||||||||||||
Core Portfolio | Funds | Structured Financing | Unallocated | Total | ||||||||||||||||
Revenues | $ | 169,975 | $ | 80,287 | $ | — | $ | — | $ | 250,262 | ||||||||||
Depreciation and amortization | (61,705 | ) | (43,229 | ) | — | — | (104,934 | ) | ||||||||||||
Property operating expenses, other operating and real estate taxes | (45,349 | ) | (34,449 | ) | — | — | (79,798 | ) | ||||||||||||
Impairment charges | — | (14,455 | ) | — | — | (14,455 | ) | |||||||||||||
General and administrative expenses | — | — | — | (33,756 | ) | (33,756 | ) | |||||||||||||
Operating income | 62,921 | (11,846 | ) | — | (33,756 | ) | 17,319 | |||||||||||||
Gain on disposition of properties | — | 48,886 | — | — | 48,886 | |||||||||||||||
Interest income | — | — | 29,143 | — | 29,143 | |||||||||||||||
Equity in earnings of unconsolidated affiliates inclusive of gains on disposition of properties | 3,735 | 19,636 | — | — | 23,371 | |||||||||||||||
Interest expense | (28,618 | ) | (30,360 | ) | — | — | (58,978 | ) | ||||||||||||
Gain on change in control | 5,571 | — | — | — | 5,571 | |||||||||||||||
Income tax provision | — | — | — | (1,004 | ) | (1,004 | ) | |||||||||||||
Net income | 43,609 | 26,316 | 29,143 | (34,760 | ) | 64,308 | ||||||||||||||
Net income attributable to noncontrolling interests | (1,107 | ) | (1,731 | ) | — | — | (2,838 | ) | ||||||||||||
Net income attributable to Acadia | $ | 42,502 | $ | 24,585 | $ | 29,143 | $ | (34,760 | ) | $ | 61,470 | |||||||||
Real estate at cost | $ | 2,032,485 | $ | 1,433,997 | $ | — | $ | — | $ | 3,466,482 | ||||||||||
Total assets | $ | 2,305,663 | $ | 1,500,755 | $ | 153,829 | $ | — | $ | 3,960,247 | ||||||||||
Cash paid for acquisition of real estate | $ | — | $ | 200,429 | $ | — | $ | — | $ | 200,429 | ||||||||||
Cash paid for development and property improvement costs | $ | 49,339 | $ | 66,116 | $ | — | $ | — | $ | 115,455 |
As of or for the Year Ended December 31, 2016 | ||||||||||||||||||||
Core Portfolio | Funds | Structured Financing | Unallocated | Total | ||||||||||||||||
Revenues | $ | 150,211 | $ | 39,728 | $ | — | $ | — | $ | 189,939 | ||||||||||
Depreciation and amortization | (54,582 | ) | (15,429 | ) | — | — | (70,011 | ) | ||||||||||||
Property operating expenses, other operating and real estate taxes | (39,598 | ) | (17,793 | ) | — | — | (57,391 | ) | ||||||||||||
General and administrative expenses | — | — | — | (40,648 | ) | (40,648 | ) | |||||||||||||
Operating income | 56,031 | 6,506 | — | (40,648 | ) | 21,889 | ||||||||||||||
Gain on disposition of properties | — | 81,965 | — | — | 81,965 | |||||||||||||||
Interest income | — | — | 25,829 | — | 25,829 | |||||||||||||||
Equity in earnings of unconsolidated affiliates inclusive of gains on disposition of properties | 3,774 | 35,675 | — | — | 39,449 | |||||||||||||||
Interest expense | (27,435 | ) | (7,210 | ) | — | — | (34,645 | ) | ||||||||||||
Income tax benefit | — | — | — | 105 | 105 | |||||||||||||||
Net income | 32,370 | 116,936 | 25,829 | (40,543 | ) | 134,592 | ||||||||||||||
Net income attributable to noncontrolling interests | (3,411 | ) | (58,405 | ) | — | — | (61,816 | ) | ||||||||||||
Net income attributable to Acadia | $ | 28,959 | $ | 58,531 | $ | 25,829 | $ | (40,543 | ) | $ | 72,776 | |||||||||
Real estate at cost | $ | 1,982,763 | $ | 1,399,237 | $ | — | $ | — | $ | 3,382,000 | ||||||||||
Total assets | $ | 2,271,620 | $ | 1,448,177 | $ | 276,163 | $ | — | $ | 3,995,960 | ||||||||||
Cash paid for acquisition of real estate | $ | 323,880 | $ | 171,764 | $ | — | $ | — | $ | 495,644 | ||||||||||
Cash paid for development and property improvement costs | $ | 13,434 | $ | 136,000 | $ | — | $ | — | $ | 149,434 |
|
| As of or for the Year Ended December 31, 2022 |
| |||||||||||||||||
|
| Core |
|
| Funds |
|
| Structured |
|
| Unallocated |
|
| Total |
| |||||
Revenues |
| $ | 202,547 |
|
| $ | 123,743 |
|
| $ | — |
|
| $ | — |
|
| $ | 326,290 |
|
Depreciation and amortization |
|
| (75,614 | ) |
|
| (60,303 | ) |
|
| — |
|
|
| — |
|
|
| (135,917 | ) |
Property operating expenses, other operating and real estate taxes |
|
| (60,306 | ) |
|
| (41,621 | ) |
|
| — |
|
|
| — |
|
|
| (101,927 | ) |
General and administrative expenses |
|
| — |
|
|
| — |
|
|
| — |
|
|
| (44,066 | ) |
|
| (44,066 | ) |
Impairment charges |
|
| — |
|
|
| (33,311 | ) |
|
| — |
|
|
| — |
|
|
| (33,311 | ) |
Gain on disposition of properties |
|
| 7,245 |
|
|
| 49,916 |
|
|
| — |
|
|
| — |
|
|
| 57,161 |
|
Operating income |
|
| 73,872 |
|
|
| 38,424 |
|
|
| — |
|
|
| (44,066 | ) |
|
| 68,230 |
|
Interest income |
|
| — |
|
|
| — |
|
|
| 14,641 |
|
|
| — |
|
|
| 14,641 |
|
Equity in (losses) earnings of unconsolidated affiliates |
|
| (45,919 | ) |
|
| 13,012 |
|
|
| — |
|
|
| — |
|
|
| (32,907 | ) |
Interest expense |
|
| (37,892 | ) |
|
| (42,317 | ) |
|
| — |
|
|
| — |
|
|
| (80,209 | ) |
Realized and unrealized holding gains (losses) on investments and other |
|
| 1,163 |
|
|
| (35,559 | ) |
|
| (598 | ) |
|
| — |
|
|
| (34,994 | ) |
Income tax provision |
|
| — |
|
|
| — |
|
|
| — |
|
|
| (12 | ) |
|
| (12 | ) |
Net (loss) income |
|
| (8,776 | ) |
|
| (26,440 | ) |
|
| 14,043 |
|
|
| (44,078 | ) |
|
| (65,251 | ) |
Net loss attributable to redeemable noncontrolling interests |
|
| — |
|
|
| 5,536 |
|
|
| — |
|
|
| — |
|
|
| 5,536 |
|
Net loss attributable to noncontrolling interests |
|
| 1,000 |
|
|
| 23,270 |
|
|
| — |
|
|
| — |
|
|
| 24,270 |
|
Net (loss) income attributable to Acadia |
| $ | (7,776 | ) |
| $ | 2,366 |
|
| $ | 14,043 |
|
| $ | (44,078 | ) |
| $ | (35,445 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Real estate at cost (a) |
| $ | 2,597,394 |
|
| $ | 1,655,616 |
|
| $ | — |
|
| $ | — |
|
| $ | 4,253,010 |
|
Total Assets (a) |
| $ | 2,599,268 |
|
| $ | 1,579,411 |
|
| $ | 123,903 |
|
| $ | — |
|
| $ | 4,302,582 |
|
Cash paid for acquisition of real estate |
| $ | 242,633 |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | 242,633 |
|
Cash paid for development and property improvement costs |
| $ | 32,406 |
|
| $ | 18,640 |
|
| $ | — |
|
| $ | — |
|
| $ | 51,046 |
|
108
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
As of or for the Year Ended December 31, 2015 | ||||||||||||||||||||
Core Portfolio | Funds | Structured Financing | Unallocated | Total | ||||||||||||||||
Revenues | $ | 150,015 | $ | 49,048 | $ | — | $ | — | $ | 199,063 | ||||||||||
Depreciation and amortization | (46,223 | ) | (14,528 | ) | — | — | (60,751 | ) | ||||||||||||
Property operating expenses, other operating and real estate taxes | (37,259 | ) | (21,223 | ) | — | — | (58,482 | ) | ||||||||||||
Impairment charges | (5,000 | ) | — | — | — | (5,000 | ) | |||||||||||||
General and administrative expenses | — | — | — | (30,368 | ) | (30,368 | ) | |||||||||||||
Operating income | 61,533 | 13,297 | — | (30,368 | ) | 44,462 | ||||||||||||||
Gain on disposition of properties | — | 89,063 | — | — | 89,063 | |||||||||||||||
Interest income | — | — | 16,603 | — | 16,603 | |||||||||||||||
Equity in earnings of unconsolidated affiliates inclusive of gains on disposition of properties | 1,169 | 36,161 | — | — | 37,330 | |||||||||||||||
Other | — | — | 1,596 | — | 1,596 | |||||||||||||||
Interest expense | (27,945 | ) | (9,352 | ) | — | — | (37,297 | ) | ||||||||||||
Income tax provision | — | — | — | (1,787 | ) | (1,787 | ) | |||||||||||||
Net income | 34,757 | 129,169 | 18,199 | (32,155 | ) | 149,970 | ||||||||||||||
Net income attributable to noncontrolling interests | (140 | ) | (84,122 | ) | — | — | (84,262 | ) | ||||||||||||
Net income attributable to Acadia | $ | 34,617 | $ | 45,047 | $ | 18,199 | $ | (32,155 | ) | $ | 65,708 | |||||||||
Real estate at cost | $ | 1,572,681 | $ | 1,163,602 | $ | — | $ | — | $ | 2,736,283 | ||||||||||
Total assets | $ | 1,662,092 | $ | 1,223,039 | $ | 147,188 | $ | — | $ | 3,032,319 | ||||||||||
Cash paid for acquisition of real estate | $ | 181,884 | $ | 156,816 | $ | — | $ | — | $ | 338,700 | ||||||||||
Cash paid for development and property improvement costs | $ | 16,505 | $ | 147,810 | $ | — | $ | — | $ | 164,315 |
|
| As of or for the Year Ended December 31, 2021 |
| |||||||||||||||||
|
| Core |
|
| Funds |
|
| Structured |
|
| Unallocated |
|
| Total |
| |||||
Revenues |
| $ | 181,332 |
|
| $ | 111,165 |
|
| $ | — |
|
| $ | — |
|
| $ | 292,497 |
|
Depreciation and amortization |
|
| (69,103 | ) |
|
| (54,336 | ) |
|
| — |
|
|
| — |
|
|
| (123,439 | ) |
Property operating expenses, other operating and real estate taxes |
|
| (56,957 | ) |
|
| (41,916 | ) |
|
| — |
|
|
| — |
|
|
| (98,873 | ) |
General and administrative expenses |
|
| — |
|
|
| — |
|
|
| — |
|
|
| (40,125 | ) |
|
| (40,125 | ) |
Impairment charges |
|
| — |
|
|
| (9,925 | ) |
|
| — |
|
|
| — |
|
|
| (9,925 | ) |
Gain on disposition of properties |
|
| 4,612 |
|
|
| 5,909 |
|
|
| — |
|
|
| — |
|
|
| 10,521 |
|
Operating income (loss) |
|
| 59,884 |
|
|
| 10,897 |
|
|
| — |
|
|
| (40,125 | ) |
|
| 30,656 |
|
Interest income |
|
| — |
|
|
| — |
|
|
| 9,065 |
|
|
| — |
|
|
| 9,065 |
|
Equity in income of unconsolidated affiliates |
|
| 353 |
|
|
| 4,977 |
|
|
| — |
|
|
| — |
|
|
| 5,330 |
|
Interest expense |
|
| (29,454 | ) |
|
| (38,594 | ) |
|
| — |
|
|
| — |
|
|
| (68,048 | ) |
Realized and unrealized holding gains (losses) on investments and other |
|
| — |
|
|
| 53,654 |
|
|
| (4,534 | ) |
|
| — |
|
|
| 49,120 |
|
Income tax provision |
|
| — |
|
|
| — |
|
|
| — |
|
|
| (93 | ) |
|
| (93 | ) |
Net income |
|
| 30,783 |
|
|
| 30,934 |
|
|
| 4,531 |
|
|
| (40,218 | ) |
|
| 26,030 |
|
Net (income) attributable to redeemable noncontrolling interests |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Net (income) attributable to noncontrolling interests |
|
| (2,276 | ) |
|
| (206 | ) |
|
| — |
|
|
| — |
|
|
| (2,482 | ) |
Net income attributable to Acadia |
| $ | 28,507 |
|
| $ | 30,728 |
|
| $ | 4,531 |
|
| $ | (40,218 | ) |
| $ | 23,548 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Real estate at cost (a) |
| $ | 2,356,645 |
|
| $ | 1,714,962 |
|
| $ | — |
|
| $ | — |
|
| $ | 4,071,607 |
|
Total Assets (a) |
| $ | 2,212,877 |
|
| $ | 1,894,983 |
|
| $ | 153,886 |
|
| $ | — |
|
| $ | 4,261,746 |
|
Cash paid for acquisition of real estate |
| $ | 26,176 |
|
| $ | 135,670 |
|
| $ | — |
|
| $ | — |
|
| $ | 161,846 |
|
Cash paid for development and property improvement costs |
| $ | 13,625 |
|
| $ | 27,046 |
|
| $ | — |
|
| $ | — |
|
| $ | 40,671 |
|
109
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
| As of or for the Year Ended December 31, 2020 |
| |||||||||||||||||
|
| Core |
|
| Funds |
|
| Structured |
|
| Unallocated |
|
| Total |
| |||||
Revenues |
| $ | 160,262 |
|
| $ | 90,646 |
|
| $ | — |
|
| $ | — |
|
| $ | 250,908 |
|
Depreciation and amortization |
|
| (76,125 | ) |
|
| (71,104 | ) |
|
| — |
|
|
| — |
|
|
| (147,229 | ) |
Property operating expenses, other operating and real estate taxes |
|
| (57,246 | ) |
|
| (40,782 | ) |
|
| — |
|
|
| — |
|
|
| (98,028 | ) |
General and administrative expenses |
|
| — |
|
|
| — |
|
|
| — |
|
|
| (35,798 | ) |
|
| (35,798 | ) |
Impairment charges |
|
| (419 | ) |
|
| (85,179 | ) |
|
| — |
|
|
| — |
|
|
| (85,598 | ) |
Gain on disposition of properties |
|
| 174 |
|
|
| 509 |
|
|
| — |
|
|
| — |
|
|
| 683 |
|
Operating income (loss) |
|
| 26,646 |
|
|
| (105,910 | ) |
|
| — |
|
|
| (35,798 | ) |
|
| (115,062 | ) |
Interest income |
|
| — |
|
|
| — |
|
|
| 8,979 |
|
|
| — |
|
|
| 8,979 |
|
Equity in losses of unconsolidated affiliates |
|
| (874 | ) |
|
| (2,183 | ) |
|
| — |
|
|
| — |
|
|
| (3,057 | ) |
Interest expense |
|
| (33,185 | ) |
|
| (36,486 | ) |
|
| — |
|
|
| — |
|
|
| (69,671 | ) |
Realized and unrealized holding gains (losses) on investments and other |
|
| 18,564 |
|
|
| 95,366 |
|
|
| (568 | ) |
|
| — |
|
|
| 113,362 |
|
Income tax provision |
|
| — |
|
|
| — |
|
|
| — |
|
|
| (269 | ) |
|
| (269 | ) |
Net income (loss) |
|
| 11,151 |
|
|
| (49,213 | ) |
|
| 8,411 |
|
|
| (36,067 | ) |
|
| (65,718 | ) |
Net (income) loss attributable to redeemable noncontrolling interests |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Net (income) loss attributable to noncontrolling interests |
|
| (5,837 | ) |
|
| 62,579 |
|
|
| — |
|
|
| — |
|
|
| 56,742 |
|
Net income (loss) attributable to Acadia |
| $ | 5,314 |
|
| $ | 13,366 |
|
| $ | 8,411 |
|
| $ | (36,067 | ) |
| $ | (8,976 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Real estate at cost |
| $ | 2,330,116 |
|
| $ | 1,681,210 |
|
| $ | — |
|
| $ | — |
|
| $ | 4,011,326 |
|
Total Assets |
| $ | 2,254,680 |
|
| $ | 1,775,507 |
|
| $ | 100,882 |
|
| $ | — |
|
| $ | 4,131,069 |
|
Cash paid for acquisition of real estate and leasehold interest |
| $ | 19,963 |
|
| $ | 1,245 |
|
| $ | — |
|
| $ | — |
|
| $ | 21,208 |
|
Cash paid for development and property improvement costs |
| $ | 11,170 |
|
| $ | 25,409 |
|
| $ | — |
|
| $ | — |
|
| $ | 36,579 |
|
Share Incentive Plan
On March 23, 2020, the Board approved the 2020 Share Incentive Plan (the “Share Incentive“2020 Plan”), which increased the aggregate number of Common Shares authorized for issuance by 2,650,000 shares. The 2020 Plan authorizes the Company to issue options, Restricted Shares, LTIP Units and other securities (collectively “Awards”) to, among others, the Company’s officers, trustees, and employees. At December 31, 20172022 a total of 1,756,3171,540,116 shares remained available to be issued under the Share Incentive2020 Plan.
Restricted Shares and LTIP Units
During the year ended December 31, 2017,2022, the Company issued 306,635603,267 LTIP Units and 7,628 15,878 restricted share units (“Restricted Share UnitsUnits”) to employees of the Company pursuant to the 2020 Plan. Certain of these equity awards were granted in performance-based Restricted Share Incentive Plan.Units or LTIP Units with market conditions as described below (“2021 Performance Shares”). These awards were measured at their fair value on the grant date, whichincorporating the following factors:
110
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For valuation of the 2022 and 2021 Performance Shares, a Monte Carlo simulation was established asused to estimate the fair values based on probability of satisfying the market priceconditions and the projected share prices at the time of payments, discounted to the valuation dates over the three-year performance periods. The assumptions include volatility (49.0% and 48.0%) and risk-free interest rates of (1.7% and 0.2%) for 2022 and 2021, respectively. The total value of the 2022 and 2021 Performance Shares will be expensed over the vesting period regardless of the Company’s Common Shares as of the close of trading on the day preceding the grant date. performance.
The total value of the above Restricted Share Units and LTIP Units as of the grant date was $9.5 million, of which $2.2 million was recognized as compensation expense in 2016, and $7.3 million will be recognized as compensation expense over the remaining vesting period.$13.1 million. Total long-term incentive compensation expense, including the expense related to the Share Incentive2020 Plan, was $8.4$7.4 million, $9.4 million, and $10.9$8.4 million for the yearyears ended December 31, 20172022, 2021, and 2016,2020, respectively and is recorded in General and Administrative on the Consolidated Statements of Income.
In addition, members of the Board of Trustees (the “Board”) have been issued shares and units under the Share Incentive2020 Plan. During 2017,2022, the Company issued 11,81436,471 LTIP Units and 29,935 Restricted Shares and 11,105 LTIP Units to Trustees of the Company in connection with Trustee fees. Vesting with respect to 3,864A portion of theLTIP Units and Restricted Shares and 5,805 of the LTIP Units will be on the first anniversary of the date of issuance and 7,950 of the Restricted Shares and 5,300 of the LTIP Units vest over three years with 33%33% vesting May 9, 2023 and the remaining amount vesting ratably on each of the next three anniversaries of the issuance date.May 9, 2024 and May 9, 2025. The remaining awards vest on May 9, 2023. The Restricted Shares do not carry voting rights or other rights of Common Shares until vesting and may not be transferred, assigned, or pledged until the recipients have a vested non-forfeitable right to such shares. Dividends are not paid currently on unvested Restricted Shares but are paid cumulatively from the issuance date through the applicable vesting date of such Restricted Shares. Total trustee fee expense, including the expense related to the Share Incentive2020 Plan, was $1.2 million and $1.1$1.7 million for the year ended December 31, 20172022, $1.6 million for the year ended December 31, 2021 and 2016, respectively.
In 2009, the Company adopted the Long TermLong-Term Investment Alignment Program (the “Program”) pursuant to which the Company may grant awards to employees, entitling them to receive up to 25%25% of any potential future payments of Promote to the Operating Partnership from Funds III, IV and IV. TheV. As of December 31, 2022, the Company has granted such awards to employees representing 25%25% of the potential Promote payments from Fund III to the Operating Partnership and 14.4%23.1% of the potential Promote payments from Fund IV to the Operating Partnership and 10.7% of the potential Promote payments from Fund V to the Operating Partnership. Payments to senior executives under the Program require further Board approval at the time any potential payments are due pursuant to these grants. Compensation relating to these awards will be recognized in each reporting period in which Board approval is granted.
As payments to other employees are not subject to further Board approval, compensation relating to these awards will be recorded based on the estimated fair value at each reporting period in accordance with ASC Topic 718,
The Company recognized $0.4 million and $5$0.1 million was recognizedcompensation expense for Funds III and V, respectively for the year ended December 31, 20172022 in connection with the resignation of an employee. No compensation expense was recognized for the years ended 2021, and 2016, respectively,2020, related to the Program in connection with Fund III.
111
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A summary of the status of the Company’s unvested Restricted Shares and LTIP Units is presented below:
Unvested Restricted Shares and LTIP Units |
| Common |
|
| Weighted |
|
| LTIP Units |
|
| Weighted |
| ||||
Unvested at January 1, 2020 |
|
| 42,390 |
|
| $ | 23.73 |
|
|
| 936,180 |
|
| $ | 28.24 |
|
Granted |
|
| 66,824 |
|
|
| 13.70 |
|
|
| 440,829 |
|
|
| 19.64 |
|
Vested |
|
| (19,264 | ) |
|
| 27.72 |
|
|
| (250,241 | ) |
|
| 30.44 |
|
Forfeited |
|
| (39 | ) |
|
| 24.77 |
|
|
| (3,879 | ) |
|
| 24.67 |
|
Unvested at December 31, 2020 |
|
| 89,911 |
|
| $ | 15.42 |
|
|
| 1,122,889 |
|
| $ | 24.38 |
|
Granted |
|
| 43,078 |
|
|
| 19.94 |
|
|
| 666,967 |
|
|
| 19.48 |
|
Vested |
|
| (43,084 | ) |
|
| 16.85 |
|
|
| (283,024 | ) |
|
| 26.66 |
|
Forfeited |
|
| (159 | ) |
|
| 36.22 |
|
|
| (91,637 | ) |
|
| 36.22 |
|
Unvested at December 31, 2021 |
|
| 89,746 |
|
|
| 16.87 |
|
|
| 1,415,195 |
|
|
| 20.85 |
|
Granted |
|
| 45,813 |
|
|
| 20.98 |
|
|
| 637,818 |
|
|
| 21.04 |
|
Vested |
|
| (40,894 | ) |
|
| 19.75 |
|
|
| (309,283 | ) |
|
| 22.86 |
|
Forfeited |
|
| (1,930 | ) |
|
| 31.82 |
|
|
| (278,332 | ) |
|
| 31.16 |
|
Unvested at December 31, 2022 |
|
| 92,735 |
|
| $ | 17.31 |
|
|
| 1,465,398 |
|
| $ | 18.59 |
|
Unvested Restricted Shares and LTIP Units | Common Restricted Shares | Weighted Grant-Date Fair Value | LTIP Units | Weighted Grant-Date Fair Value | ||||||||||
Unvested at January 1, 2016 | 49,899 | $ | 25.90 | 1,020,121 | $ | 23.92 | ||||||||
Granted | 21,675 | 33.35 | 359,484 | 34.40 | ||||||||||
Vested | (24,886 | ) | 29.17 | (522,680 | ) | 26.08 | ||||||||
Forfeited | (189 | ) | 35.37 | (48 | ) | 35.37 | ||||||||
Unvested at December 31, 2016 | 46,499 | 27.58 | 856,877 | 26.99 | ||||||||||
Granted | 19,442 | 29.85 | 310,551 | 31.80 | ||||||||||
Vested | (23,430 | ) | 30.47 | (257,124 | ) | 28.27 | ||||||||
Forfeited | (1,184 | ) | 32.65 | (205 | ) | 32.49 | ||||||||
Unvested at December 31, 2017 | 41,327 | $ | 26.92 | 910,099 | $ | 28.28 |
The weighted-average grant date fair value for Restricted Shares and LTIP Units granted for the yearyears ended December 31, 20172022 and the year ended December 31, 20162021 were $31.69$21.04 and $34.34,$19.51, respectively. As of December 31, 2017,2022, there was $14.3$15.7 million of total unrecognized compensation cost related to unvested share-based compensation arrangements granted under the Share Incentive2020 Plan. That cost is expected to be recognized over a weighted-average period of 2.21.5 years. The total fair value of Restricted Shares that vested for each of the yearyears ended December 31, 20172022 and the year ended December 31, 2016,2021, was $0.7$0.8 million. The total fair value of LTIP Units that vested (LTIP units vest primarily in the first quarter) during the yearyears ended December 31, 20172022 and the year ended December 31, 2016,2021, was $7.3$7.1 million and $13.6$7.5 million, respectively.
Other Plans
On a combined basis, the Company incurred a total of $0.2$0.4 million, $0.4 million, and $0.3 million of compensation expense related to the following employee benefit plans for each of the years ended December 31, 20172022, 2021 and 2016,2020, respectively:
Employee Share Purchase Plan
The Acadia Realty Trust Employee Share Purchase Plan (the “Purchase Plan”), allows eligible employees of the Company to purchase Common Shares through payroll deductions. The Purchase Plan provides for employees to purchase Common Shares on a quarterly basis at a 15%15% discount to the closing price of the Company’s Common Shares on either the first day or the last day of the quarter, whichever is lower. A participant may not purchase more the $25,000than $25,000 in Common Shares per year. Compensation expense will be recognized by the Company to the extent of the above discount to the closing price of the Common Shares with respect to the applicable quarter. DuringOn March 23, 2021, the years ended December 31, 2017 and 2016,Board adopted, which was subsequently approved by the Company’s shareholders at the 2021 annual meeting of shareholders, the Acadia Realty Trust 2021 Employee Share Purchase Plan which allows for a maximum aggregate issuance of 200,000 Common Shares. A total of 4,5149,747 and 4,0167,721 Common Shares respectively, were purchased by employees under the Purchase Plan.
Deferred Share Plan
The Company adoptedmaintains a Trustee Deferral and Distribution Election program, under which the participating Trustees earn deferred compensation.
Employee 401(k) Plan
The Company maintains a 401(k) plan for employees under which the Company currently matches 50%50% of a plan participant’s contribution up to 6%6% of the employee’s annual salary. A plan participant may contribute up to a maximum of 15%15% of their compensation, up to $18,000,$20,500, for the year ended December 31, 2017.2022.
112
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
14. Federal IncomeIncome Taxes
The Company has elected to qualify as a REIT in accordance with Sections 856 through 860 of the Code and intends at all times to qualify as a REIT under the Code. To qualify as a REIT, the Company must meet a number of organizational and operational requirements, including a requirement that it currently distribute at least 90%90% of its annual REIT taxable income to its shareholders. As a REIT, the Company generally will not be subject to corporate Federal income tax, provided that distributions to its shareholders equal at least the amount of its REIT taxable income as defined under the Code. As the Company distributed sufficient taxable income for the years ended December 31, 2017, 20162022, 2021 and 2015,2020, no U.S. Federal income or excise taxes were incurred. If the Company fails to qualify as a REIT in any taxable year, it will be subject to Federal income taxes at the regular corporate rates (including any applicable alternative minimum tax) and may not be able to qualify as a REIT for the four subsequent taxable years. Even though the Company qualifies for taxation as a REIT, the Company is subject to certain state and local taxes on its income and property and Federal income and excise taxes on any undistributed taxable income. In addition, taxable income from non-REIT activities managed through the Company’s TRS’s is subject to Federal, state and local income taxes. For taxable years beginning after 2017, noNo more than 20%20% of the value of our total assets may consist of the securities of one or more taxable REIT subsidiaries.
In the normal course of business, the Company or one or more of its subsidiaries is subject to examination by Federal, state and local jurisdictions, as well as certain jurisdictions outside the United States, in which it operates, where applicable. The Company expects to recognize interest and penalties related to uncertain tax positions, if any, as income tax expense. For the three years ended December 31, 2017,2022, the Company recognized no material adjustments regarding its tax accounting treatment for uncertain tax provisions. As of December 31, 2017,2022, the tax years that remain subject to examination by the major tax jurisdictions under applicable statutes of limitations are generally the year 20142019 and forward.
Reconciliation of Net Income to Taxable Income
Reconciliation of GAAP net income attributable to Acadia to taxable income (loss) is as follows:
|
| Year Ended December 31, |
| |||||||||
(in thousands) |
| 2022 |
|
| 2021 |
|
| 2020 |
| |||
|
|
|
|
|
|
|
|
|
| |||
Net (loss) income attributable to Acadia |
| $ | (35,445 | ) |
| $ | 23,548 |
|
| $ | (8,976 | ) |
Deferred rental and other (loss) income (a) |
|
| (1,854 | ) |
|
| 3,209 |
|
|
| (2,498 | ) |
Book/tax difference - depreciation and amortization (a) |
|
| 28,337 |
|
|
| 24,756 |
|
|
| 27,052 |
|
Straight-line rent and above- and below-market rent adjustments (a) |
|
| (11,917 | ) |
|
| (8,588 | ) |
|
| 8,630 |
|
Book/tax differences - equity-based compensation |
|
| 5,952 |
|
|
| 7,663 |
|
|
| 6,825 |
|
Joint venture equity in earnings (losses), net and other investments (a) |
|
| 22,493 |
|
|
| 3,962 |
|
|
| (163 | ) |
Impairment charges and reserves |
|
| 54,822 |
|
|
| 2,657 |
|
|
| 18,734 |
|
Acquisition costs (a) |
|
| 2,048 |
|
|
| 22 |
|
|
| 14 |
|
(Loss) gain on disposition of properties |
|
| (14,960 | ) |
|
| (2,170 | ) |
|
| 4,936 |
|
Book/tax differences - miscellaneous |
|
| 5,638 |
|
|
| (1,203 | ) |
|
| (36 | ) |
Taxable income |
| $ | 55,114 |
|
| $ | 53,856 |
|
| $ | 54,518 |
|
Distributions declared (b) |
| $ | 68,312 |
|
| $ | 52,872 |
|
| $ | 24,937 |
|
Year Ended December 31, | ||||||||||||
(in thousands) | 2017 | 2016 | 2015 | |||||||||
Net income attributable to Acadia | $ | 61,470 | $ | 72,776 | $ | 65,708 | ||||||
Deferred cancellation of indebtedness income | 2,050 | 2,050 | 2,050 | |||||||||
Deferred rental and other income (a) | (934 | ) | 1,610 | 82 | ||||||||
Book/tax difference - depreciation and amortization (a) | 21,334 | 15,189 | 9,983 | |||||||||
Straight-line rent and above- and below-market rent adjustments (a) | (10,559 | ) | (7,882 | ) | (8,041 | ) | ||||||
Book/tax differences - equity-based compensation | 5,325 | 10,307 | 5,833 | |||||||||
Joint venture equity in earnings, net (a) | 9,114 | (2,011 | ) | 5,776 | ||||||||
Impairment charges and reserves | — | 769 | (714 | ) | ||||||||
Acquisition costs (a) | 1,135 | 5,116 | 1,190 | |||||||||
Gains | (5,181 | ) | — | (760 | ) | |||||||
Book/tax differences - miscellaneous | 930 | (4,924 | ) | 2,573 | ||||||||
Taxable income | $ | 84,684 | $ | 93,000 | $ | 83,680 | ||||||
Distributions declared | $ | 87,848 | $ | 91,053 | $ | 84,683 |
113
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Characterization of Distributions
The Company has determined that the cash distributed to the shareholders for the periods presented is characterized as follows for Federal income tax purposes:
|
| Year Ended December 31, |
| |||||||||||||||||||||
|
| 2022 |
|
| 2021 |
|
| 2020 |
| |||||||||||||||
|
| Per Share |
|
| % |
|
| Per Share |
|
| % |
|
| Per Share |
|
| % |
| ||||||
Ordinary income - Section 199A |
| $ | 0.650 |
|
|
| 90 | % |
| $ | 0.550 |
|
|
| 92 | % |
| $ | 0.520 |
|
|
| 90 | % |
Qualified dividend |
|
| 0.010 |
|
|
| 1 | % |
|
| 0.010 |
|
|
| 1 | % |
|
| — |
|
|
| — | % |
Capital gain |
|
| 0.060 |
|
|
| 9 | % |
|
| 0.040 |
|
|
| 7 | % |
|
| 0.060 |
|
|
| 10 | % |
Total (a) |
| $ | 0.720 |
|
|
| 100 | % |
| $ | 0.600 |
|
|
| 100 | % |
| $ | 0.580 |
|
|
| 100 | % |
Year Ended December 31, | ||||||||||||||||||||
2017 | 2016 | 2015 | ||||||||||||||||||
Per Share | % | Per Share | % | Per Share | % | |||||||||||||||
Ordinary income | $ | 0.82 | 78 | % | $ | 0.77 | 66 | % | $ | 0.83 | 68 | % | ||||||||
Qualified dividend | — | — | % | — | — | % | — | — | % | |||||||||||
Capital gain | 0.23 | 22 | % | 0.39 | 34 | % | 0.39 | 32 | % | |||||||||||
Total | $ | 1.05 | 100 | % | $ | 1.16 | 100 | % | $ | 1.22 | 100 | % |
Taxable REIT Subsidiaries
Income taxes have been provided for using the liability method as required by ASC Topic 740, “Income Taxes.” The Company’s TRS income (loss) and provision for income taxes associated with the TRS for the periods presented are summarized as follows (in thousands):
|
| Year Ended December 31, |
| |||||||||
|
| 2022 |
|
| 2021 |
|
| 2020 |
| |||
|
|
|
|
|
|
|
|
|
| |||
TRS loss before income taxes |
| $ | (3,178 | ) |
| $ | (4,240 | ) |
| $ | (3,856 | ) |
(Provision) benefit for income taxes: |
|
|
|
|
|
|
|
|
| |||
Federal |
|
| — |
|
|
| — |
|
|
| 376 |
|
State and local |
|
| — |
|
|
| — |
|
|
| (268 | ) |
TRS net loss before noncontrolling interests |
|
| (3,178 | ) |
|
| (4,240 | ) |
|
| (3,748 | ) |
Noncontrolling interests |
|
| — |
|
|
| 9 |
|
|
| 746 |
|
TRS net loss |
| $ | (3,178 | ) |
| $ | (4,231 | ) |
| $ | (3,002 | ) |
Year Ended December 31, | ||||||||||||
2017 | 2016 | 2015 | ||||||||||
TRS income (loss) before income taxes | $ | (3,604 | ) | $ | (1,583 | ) | $ | 1,008 | ||||
(Provision) benefit for income taxes: | ||||||||||||
Federal | (982 | ) | 378 | (526 | ) | |||||||
State and local | 423 | 97 | (134 | ) | ||||||||
TRS net income (loss) before noncontrolling interests | (4,163 | ) | (1,108 | ) | 348 | |||||||
Noncontrolling interests | 8 | (9 | ) | (208 | ) | |||||||
TRS net income (loss) | $ | (4,155 | ) | $ | (1,117 | ) | $ | 140 |
The income tax provision for the Company differs from the amount computed by applying the statutory Federal income tax rate to income (loss) before income taxes as follows. Amounts are not adjusted for temporary book/tax differences (in thousands):
|
| Year Ended December 31, |
| |||||||||
|
| 2022 |
|
| 2021 |
|
| 2020 |
| |||
|
|
|
|
|
|
|
|
|
| |||
Federal tax benefit at statutory tax rate |
| $ | (667 | ) |
| $ | (890 | ) |
| $ | (810 | ) |
TRS state and local taxes, net of Federal benefit |
|
| (201 | ) |
|
| (268 | ) |
|
| (244 | ) |
Tax effect of: |
|
|
|
|
|
|
|
|
| |||
Permanent differences, net |
|
| 194 |
|
|
| 252 |
|
|
| 227 |
|
Adjustment to deferred tax reserve |
|
| 691 |
|
|
| 1,061 |
|
|
| 851 |
|
Other |
|
| (16 | ) |
|
| (156 | ) |
|
| (132 | ) |
REIT state and local income and franchise taxes |
|
| 11 |
|
|
| 94 |
|
|
| 377 |
|
Total provision for income taxes |
| $ | 12 |
|
| $ | 93 |
|
| $ | 269 |
|
Year Ended December 31, | ||||||||||||
2017 | 2016 | 2015 | ||||||||||
Federal tax provision (benefit) at statutory tax rate | $ | (1,225 | ) | $ | (538 | ) | $ | 343 | ||||
TRS state and local taxes, net of Federal benefit | (190 | ) | (84 | ) | 53 | |||||||
Tax effect of: | ||||||||||||
Permanent differences, net | 1,131 | 1,663 | 396 | |||||||||
Prior year (over) under-accrual, net | (1,541 | ) | — | 938 | ||||||||
Effect of Tax Cuts and Jobs Act | 1,982 | — | — | |||||||||
Other | 404 | (1,516 | ) | (131 | ) | |||||||
REIT state and local income and franchise taxes | 443 | 370 | 188 | |||||||||
Total provision (benefit) for income taxes | $ | 1,004 | $ | (105 | ) | $ | 1,787 |
As of December 31, 2017,2022, and 2016,2021, the Company’s deferred tax assets (netwere $0.0 and $0.0 million net of applicable reserves) in its taxable REIT subsidiaries consistedreserves of the following: additional tax basis in RCP investments of $1.0$4.3 million and $1.7$3.7 million, deferred interestrespectively and were comprised of $0capital loss carryovers of $0.1 and $0.8$0.1 million and net operating loss carryovers of $1.1$4.2 million and $1.3$3.6 million, respectively.
Under GAAP a reduction of the carrying amounts of deferred tax assets by a valuation allowance is required, if, based on the evidence available, it is more likely than not (a likelihood of more than 50 percent) that some portion or all of the deferred tax assets will not be realized. The valuation allowance should be sufficient to reduce the deferred tax asset to the amount that is more likely than not to be realized. For the years ended December 31, 2022, 2021, and 2020, the Company determined that the realization of its deferred tax assets was not likely and as such, the Company recorded a valuation allowance against its deferred tax assets of $0.7 million, $1.1 million, and $0.9 million, respectively.
114
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Basic earnings (loss) per Common Share is computed by dividing net income (loss) attributable to Common Shareholders by the weighted average Common Shares outstanding.outstanding (Note 10). During the periods presented, the Company had unvested LTIP Units which provide for non-forfeitable rights to dividend equivalent payments. Accordingly, these unvested LTIP Units are considered participating securities and are included in the computation of basic earnings per Common Share pursuant to the two-class method.
Diluted earnings per Common Share reflects the potential dilution of the conversion of obligations and the assumed exercises of securities including the effects of restricted share units (“Restricted Share Units”) and share option awardsUnits issued under the Company’s Share Incentive Plans (
The effect of the conversion of Common OP Units is not reflected in the computation of basic and diluted earnings per share, as they are exchangeable for Common Shares on a one-for-one basis.one-for-one basis. The income allocable to such units is allocated on this same basis and reflected as noncontrolling interests in the accompanying consolidated financial statements. As such, the assumed conversion of these units would have no net impact on the determination of diluted earnings per share.
| Year Ended December 31, |
| |||||||||
(dollars in thousands) | 2022 |
|
| 2021 |
|
| 2020 |
| |||
Numerator: |
|
|
|
|
|
|
|
| |||
Net (loss) income attributable to Acadia | $ | (35,445 | ) |
| $ | 23,548 |
|
| $ | (8,976 | ) |
Less: net income attributable to participating securities |
| (805 | ) |
|
| (624 | ) |
|
| (233 | ) |
(Loss) income from continuing operations net of income attributable to participating securities for basic (loss) earnings per share |
| (36,250 | ) |
|
| 22,924 |
|
|
| (9,209 | ) |
Impact of City Point Loan share conversion option (a) |
| (1,804 | ) |
|
| — |
|
|
| — |
|
(Loss) income from continuing operations net of income attributable to participating securities for diluted (loss) earnings per share | $ | (38,054 | ) |
| $ | 22,924 |
|
| $ | (9,209 | ) |
|
|
|
|
|
|
|
|
| |||
Denominator: |
|
|
|
|
|
|
|
| |||
Weighted average shares for basic earnings (loss) per share |
| 94,575,251 |
|
|
| 87,653,818 |
|
|
| 86,441,922 |
|
Effect of dilutive securities: |
|
|
|
|
|
|
|
| |||
Series A Preferred OP Units |
| — |
|
|
| — |
|
|
| — |
|
Employee unvested restricted shares |
| — |
|
|
| — |
|
|
| — |
|
City Point Loan common stock conversion option (Note 10) (a) |
| 68,215 |
|
|
| — |
|
|
| — |
|
Denominator for diluted earnings per share |
| 94,643,466 |
|
|
| 87,653,818 |
|
|
| 86,441,922 |
|
|
|
|
|
|
|
|
|
| |||
Basic (loss) earnings per Common Share from continuing operations attributable to Acadia | $ | (0.38 | ) |
| $ | 0.26 |
|
| $ | (0.11 | ) |
Diluted (loss) earnings per Common Share from continuing operations attributable to Acadia | $ | (0.40 | ) |
| $ | 0.26 |
|
| $ | (0.11 | ) |
|
|
|
|
|
|
|
|
| |||
Anti-Dilutive Shares Excluded from Denominator: |
|
|
|
|
|
|
|
| |||
Series A Preferred OP Units |
| 188 |
|
|
| 188 |
|
|
| 188 |
|
Series A Preferred OP Units - Common share equivalent |
| 25,067 |
|
|
| 25,067 |
|
|
| 25,067 |
|
|
|
|
|
|
|
|
|
| |||
Series C Preferred OP Units |
| 126,384 |
|
|
| 126,593 |
|
|
| 126,593 |
|
Series C Preferred OP Units - Common share equivalent |
| 438,831 |
|
|
| 439,556 |
|
|
| 439,556 |
|
Restricted shares |
| 68,832 |
|
|
| 70,827 |
|
|
| 76,394 |
|
Year Ended December 31, | ||||||||||||
(dollars in thousands) | 2017 | 2016 | 2015 | |||||||||
Numerator: | ||||||||||||
Net income attributable to Acadia | $ | 61,470 | $ | 72,776 | $ | 65,708 | ||||||
Less: net income attributable to participating securities | (642 | ) | (793 | ) | (927 | ) | ||||||
Income from continuing operations net of income attributable to participating securities | $ | 60,828 | $ | 71,983 | $ | 64,781 | ||||||
Denominator: | ||||||||||||
Weighted average shares for basic earnings per share | 83,682,789 | 76,231,000 | 68,851,083 | |||||||||
Effect of dilutive securities: | ||||||||||||
Employee unvested restricted shares | 2,682 | 12,550 | 18,556 | |||||||||
Denominator for diluted earnings per share | 83,685,471 | 76,243,550 | 68,869,639 | |||||||||
Basic and diluted earnings per Common Share from continuing operations attributable to Acadia | $ | 0.73 | $ | 0.94 | $ | 0.94 | ||||||
Anti-Dilutive Shares Excluded from Denominator: | ||||||||||||
Series A Preferred OP Units | 188 | 188 | 188 | |||||||||
Series A Preferred OP Units - Common share equivalent | 25,067 | 25,067 | 25,067 | |||||||||
Series C Preferred OP Units | 136,593 | 141,593 | — | |||||||||
Series C Preferred OP Units - Common share equivalent | 479,978 | 410,207 | — |
115
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
16. SummaryVariable Interest Entities
Pursuant to GAAP consolidation guidance, the Company consolidates certain VIEs for which the Company is the primary beneficiary. The Operating Partnership is considered a VIE in which the Company is the primary beneficiary because the limited partners do not have substantive kick-out or participating rights. As of Quarterly Financial Information (Unaudited)
The quarterly resultsmajority of the operations of these VIEs are funded with fees earned from investment opportunities or cash flows generated from the properties. The Company has not provided financial support to any of these VIEs that it was not previously contractually required to provide, which consists primarily of funding any capital commitments and capital expenditures, which are deemed necessary to continue to operate the entity and any operating cash shortfalls the entity may experience.
Since the Company forconducts its business through and substantially all of its interests are held by the years endedOperating Partnership, the assets and liabilities on the consolidated balance sheets represent the assets and liabilities of the Operating Partnership. As of December 31, 20172022 and 2016December 31, 2021, the consolidated balance sheets include the following assets and liabilities of the consolidated VIEs of the Operating Partnership:
(dollars in thousands) |
| December 31, 2022 |
|
| December 31, 2021 |
| ||
VIE ASSETS |
|
|
|
|
|
| ||
Operating real estate, net |
| $ | 1,466,381 |
|
| $ | 1,482,636 |
|
Real estate under development |
|
| 129,888 |
|
|
| 161,485 |
|
Notes receivable, net |
|
| — |
|
|
| 725 |
|
Investments in and advances to unconsolidated affiliates |
|
| 210,922 |
|
|
| 200,827 |
|
Other assets, net |
|
| 98,675 |
|
|
| 94,303 |
|
Right-of-use assets - operating leases, net |
|
| 2,535 |
|
|
| 2,935 |
|
Cash and cash equivalents |
|
| 13,330 |
|
|
| 9,761 |
|
Restricted cash |
|
| 14,995 |
|
|
| 9,757 |
|
Rents receivable, net |
|
| 17,915 |
|
|
| 16,126 |
|
Total VIE assets (a) |
| $ | 1,954,641 |
|
| $ | 1,978,555 |
|
|
|
|
|
|
|
| ||
VIE LIABILITIES |
|
|
|
|
|
| ||
Mortgage and other notes payable, net |
| $ | 761,166 |
|
| $ | 948,045 |
|
Unsecured notes payable, net |
|
| 51,202 |
|
|
| 162,828 |
|
Accounts payable and other liabilities |
|
| 95,385 |
|
|
| 96,212 |
|
Lease liability - operating leases, net |
|
| 2,657 |
|
|
| 3,077 |
|
Total VIE liabilities (a) |
| $ | 910,410 |
|
| $ | 1,210,162 |
|
The Company also holds variable interest in certain VIEs which are not consolidated as follows (in thousands,it is determined that the Company is not the primary beneficiary (Note 4). The Company's involvement with such entities is in the form of direct and indirect equity interests and fee arrangements. The maximum exposure to loss is limited to the amount of the Company's equity investment in these VIEs, except per share amounts):with regard to the Company's remaining $5.3 million construction commitment related to its investment in 1238 Wisconsin. The Company's aggregate investment in the unconsolidated VIEs assets was $41.5 million and $32.2 million at December 31, 2022 and 2021, respectively. The Company's aggregate investment in unconsolidated VIE liabilities was $49.2 million and $41.9 million at December 31, 2022 and 2021, respectively.
Three Months Ended (a,b,c,d) | ||||||||||||||||
March 31, 2017 | June 30, 2017 | September 30, 2017 | December 31, 2017 | |||||||||||||
Revenues | $ | 61,999 | $ | 59,504 | $ | 62,678 | $ | 66,081 | ||||||||
Net income | 19,971 | 6,108 | 13,285 | 24,944 | ||||||||||||
Net (income) loss attributable to noncontrolling interests | (4,340 | ) | 5,952 | (418 | ) | (4,032 | ) | |||||||||
Net income attributable to Acadia | 15,631 | 12,060 | 12,867 | 20,912 | ||||||||||||
Earnings per share attributable to Acadia: | ||||||||||||||||
Basic | $ | 0.18 | $ | 0.14 | $ | 0.15 | $ | 0.25 | ||||||||
Diluted | 0.18 | 0.14 | 0.15 | 0.25 | ||||||||||||
Weighted average number of shares: | ||||||||||||||||
Basic | 83,635 | 83,662 | 83,700 | 83,733 | ||||||||||||
Diluted | 83,646 | 83,662 | 83,700 | 83,733 | ||||||||||||
Cash dividends declared per Common Share | $ | 0.26 | $ | 0.26 | $ | 0.26 | $ | 0.27 |
116
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Three Months Ended (a, b, c, d) | ||||||||||||||||
March 31, 2016 | June 30, 2016 | September 30, 2016 | December 31, 2016 | |||||||||||||
Revenues | $ | 48,045 | $ | 43,918 | $ | 43,855 | $ | 54,121 | ||||||||
Net income | 73,875 | 26,155 | 326 | 34,236 | ||||||||||||
Net (income) loss attributable to noncontrolling interests | (44,950 | ) | (8,237 | ) | 5,786 | (14,415 | ) | |||||||||
Net income attributable to Acadia | 28,925 | 17,918 | 6,112 | 19,821 | ||||||||||||
Earnings per share attributable to Acadia: | ||||||||||||||||
Basic | $ | 0.40 | $ | 0.24 | $ | 0.08 | $ | 0.24 | ||||||||
Diluted | 0.40 | 0.24 | 0.08 | 0.24 | ||||||||||||
Weighted average number of shares: | ||||||||||||||||
Basic | 70,756 | 72,896 | 78,449 | 82,728 | ||||||||||||
Diluted | 71,215 | 72,896 | 78,624 | 82,728 | ||||||||||||
Cash dividends declared per Common Share | $ | 0.25 | $ | 0.25 | $ | 0.25 | $ | 0.41 |
17. Subsequent Events
Albertsons
On February 21, 2018,January 17, 2023, Albertsons announced that the State of Washington’s Supreme Court denied a motion by the Attorney General of the State of Washington to hear an appeal from the trial court’s denial of its request to enjoin Albertsons from paying its previously announced $6.85 per common share special dividend (the “Special Dividend”), originally scheduled to be paid November 7, 2022. Albertsons further announced that the temporary restraining order preventing the payment of the Special Divided was lifted as a result of the decision. Albertsons paid the Special Dividend on January 20, 2023 to record holders as of October 24, 2022. On January 20, 2023 the Company received its share of the Special Dividend of $11.3 million which will be recognized in January 2023.
Acquisitions
On January 27, 2023, Fund V acquired a 90% interest in an unconsolidated venture. The venture purchased a shopping center locatedreferred to as Mohawk Commons in Trussville, AlabamaSchenectady, New York, for
117
ACADIA REALTY TRUST AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
|
| Balance at |
|
| Charged to |
|
| Adjustments |
|
| Deductions |
|
| Balance at |
| |||||
Year Ended December 31, 2022: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Allowance for deferred tax asset |
| $ | 3,660 |
|
| $ | — |
|
| $ | 691 |
|
| $ | — |
|
| $ | 4,351 |
|
Allowance for uncollectible accounts |
|
| 38,471 |
|
|
| (394 | ) |
|
| (6,004 | ) |
|
| — |
|
|
| 32,073 |
|
Allowance for notes receivable |
|
| 5,752 |
|
|
| (272 | ) |
|
| (4,582 | ) |
|
| — |
|
|
| 898 |
|
Year Ended December 31, 2021: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Allowance for deferred tax asset |
| $ | 2,599 |
|
| $ | — |
|
| $ | 1,061 |
|
| $ | — |
|
| $ | 3,660 |
|
Allowance for uncollectible accounts |
|
| 45,009 |
|
|
| (114 | ) |
|
| (6,424 | ) |
|
| — |
|
|
| 38,471 |
|
Allowance for notes receivable |
|
| 1,218 |
|
|
| 4,534 |
|
|
| — |
|
|
| — |
|
|
| 5,752 |
|
Year Ended December 31, 2020: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Allowance for deferred tax asset |
| $ | 1,748 |
|
| $ | — |
|
| $ | 851 |
|
|
| — |
|
| $ | 2,599 |
|
Allowance for uncollectible accounts |
|
| 11,408 |
|
|
| 46,440 |
|
|
| (12,839 | ) |
|
| — |
|
|
| 45,009 |
|
Allowance for notes receivable |
|
| 400 |
|
|
| 818 |
|
|
| — |
|
|
| — |
|
|
| 1,218 |
|
Balance at Beginning of Year | Charged to Expenses | Adjustments to Valuation Accounts | Deductions | Balance at End of Year | |||||||||||||||
Year ended December 31, 2017: | |||||||||||||||||||
Allowance for deferred tax asset | $ | 859 | $ | — | $ | 671 | $ | — | $ | 1,530 | |||||||||
Allowance for uncollectible accounts | 5,720 | 200 | — | — | 5,920 | ||||||||||||||
Allowance for notes receivable | — | — | — | — | — | ||||||||||||||
Year ended December 31, 2016: | |||||||||||||||||||
Allowance for deferred tax asset | — | — | 859 | — | 859 | ||||||||||||||
Allowance for uncollectible accounts | 7,451 | — | — | (1,731 | ) | 5,720 | |||||||||||||
Allowance for notes receivable | — | — | — | — | — | ||||||||||||||
Year ended December 31, 2015: | |||||||||||||||||||
Allowance for deferred tax asset | — | — | — | — | — | ||||||||||||||
Allowance for uncollectible accounts | 5,952 | 1,499 | — | — | 7,451 | ||||||||||||||
Allowance for notes receivable | — | — | — | — | — |
118
ACADIA REALTY TRUST
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 2017
Initial Cost to Company | Amount at Which Carried at December 31, 2017 | |||||||||||||||||||||||||||||||||||||
Description and Location | Encumbrances | Land | Buildings & Improvements | Increase (Decrease) in Net Investments | Land | Buildings & Improvements | Total | Accumulated Depreciation | Date of Acquisition (a) Construction (c) | Life on which Depreciation in Latest Statement of Income is Compared | ||||||||||||||||||||||||||||
Core Portfolio: | ||||||||||||||||||||||||||||||||||||||
Crescent Plaza Brockton, MA | — | 1,147 | 7,425 | 3,194 | 1,147 | 10,619 | 11,766 | 7,749 | 1993 | (a) | 40 years | |||||||||||||||||||||||||||
New Loudon Center Latham, NY | — | 505 | 4,161 | 14,118 | 505 | 18,279 | 18,784 | 14,486 | 1993 | (a) | 40 years | |||||||||||||||||||||||||||
Mark Plaza Edwardsville, PA | — | — | 3,396 | — | — | 3,396 | 3,396 | 2,934 | 1993 | (c) | 40 years | |||||||||||||||||||||||||||
Plaza 422 Lebanon, PA | — | 190 | 3,004 | 2,765 | 190 | 5,769 | 5,959 | 5,192 | 1993 | (c) | 40 years | |||||||||||||||||||||||||||
Route 6 Mall Honesdale, PA | — | 1,664 | — | 12,446 | 1,664 | 12,446 | 14,110 | 9,234 | 1994 | (c) | 40 years | |||||||||||||||||||||||||||
Abington Towne Center Abington, PA | — | 799 | 3,197 | 2,870 | 799 | 6,067 | 6,866 | 3,890 | 1998 | (a) | 40 years | |||||||||||||||||||||||||||
Bloomfield Town Square Bloomfield Hills, MI | — | 3,207 | 13,774 | 23,557 | 3,207 | 37,331 | 40,538 | 21,396 | 1998 | (a) | 40 years | |||||||||||||||||||||||||||
Elmwood Park Shopping Center Elmwood Park, NJ | — | 3,248 | 12,992 | 15,857 | 3,798 | 28,299 | 32,097 | 19,237 | 1998 | (a) | 40 years | |||||||||||||||||||||||||||
Merrillville Plaza Hobart, IN | — | 4,288 | 17,152 | 5,661 | 4,288 | 22,813 | 27,101 | 12,260 | 1998 | (a) | 40 years | |||||||||||||||||||||||||||
Marketplace of Absecon Absecon, NJ | — | 2,573 | 10,294 | 4,900 | 2,577 | 15,190 | 17,767 | 8,107 | 1998 | (a) | 40 years | |||||||||||||||||||||||||||
239 Greenwich Avenue Greenwich, CT | 27,000 | 1,817 | 15,846 | 1,032 | 1,817 | 16,878 | 18,695 | 7,830 | 1998 | (a) | 40 years | |||||||||||||||||||||||||||
Hobson West Plaza Naperville, IL | — | 1,793 | 7,172 | 1,983 | 1,793 | 9,155 | 10,948 | 5,095 | 1998 | (a) | 40 years | |||||||||||||||||||||||||||
Village Commons Shopping Center Smithtown, NY | — | 3,229 | 12,917 | 4,265 | 3,229 | 17,182 | 20,411 | 9,389 | 1998 | (a) | 40 years | |||||||||||||||||||||||||||
Town Line Plaza Rocky Hill, CT | — | 878 | 3,510 | 7,736 | 907 | 11,217 | 12,124 | 9,062 | 1998 | (a) | 40 years | |||||||||||||||||||||||||||
Branch Shopping Center Smithtown, NY | — | 3,156 | 12,545 | 15,935 | 3,401 | 28,235 | 31,636 | 11,247 | 1998 | (a) | 40 years | |||||||||||||||||||||||||||
Methuen Shopping Center Methuen, MA | — | 956 | 3,826 | 1,260 | 961 | 5,081 | 6,042 | 2,518 | 1998 | (a) | 40 years | |||||||||||||||||||||||||||
The Gateway Shopping Center South Burlington, VT | — | 1,273 | 5,091 | 12,262 | 1,273 | 17,353 | 18,626 | 9,521 | 1999 | (a) | 40 years | |||||||||||||||||||||||||||
Mad River Station Dayton, OH | — | 2,350 | 9,404 | 2,102 | 2,350 | 11,506 | 13,856 | 5,597 | 1999 | (a) | 40 years | |||||||||||||||||||||||||||
Pacesetter Park Shopping Center Ramapo, NY | — | 1,475 | 5,899 | 3,602 | 1,475 | 9,501 | 10,976 | 4,976 | 1999 | (a) | 40 years | |||||||||||||||||||||||||||
Brandywine Holdings Wilmington, DE | 26,250 | 5,063 | 15,252 | 2,495 | 5,201 | 17,609 | 22,810 | 6,796 | 2003 | (a) | 40 years | |||||||||||||||||||||||||||
Bartow Avenue Bronx, NY | — | 1,691 | 5,803 | 1,184 | 1,691 | 6,987 | 8,678 | 2,958 | 2005 | (c) | 40 years | |||||||||||||||||||||||||||
Amboy Road Staten Island, NY | — | — | 11,909 | 2,483 | — | 14,392 | 14,392 | 6,564 | 2005 | (a) | 40 years | |||||||||||||||||||||||||||
Chestnut Hill Philadelphia, PA | — | 8,289 | 5,691 | 4,509 | 8,289 | 10,200 | 18,489 | 3,877 | 2006 | (a) | 40 years | |||||||||||||||||||||||||||
2914 Third Avenue Bronx, NY | — | 11,108 | 8,038 | 4,768 | 11,855 | 12,059 | 23,914 | 2,757 | 2006 | (a) | 40 years | |||||||||||||||||||||||||||
West Shore Expressway Staten Island, NY | — | 3,380 | 13,499 | — | 3,380 | 13,499 | 16,879 | 4,114 | 2007 | (a) | 40 years | |||||||||||||||||||||||||||
West 54th Street Manhattan, NY | — | 16,699 | 18,704 | 1,236 | 16,699 | 19,940 | 36,639 | 5,480 | 2007 | (a) | 40 years | |||||||||||||||||||||||||||
5-7 East 17th Street Manhattan, NY | — | 3,048 | 7,281 | 5,183 | 3,048 | 12,464 | 15,512 | 2,426 | 2008 | (a) | 40 years | |||||||||||||||||||||||||||
651-671 W Diversey Chicago, IL | — | 8,576 | 17,256 | 8 | 8,576 | 17,264 | 25,840 | 2,841 | 2011 | (a) | 40 years | |||||||||||||||||||||||||||
15 Mercer Street New York, NY | — | 1,887 | 2,483 | — | 1,887 | 2,483 | 4,370 | 404 | 2011 | (a) | 40 years | |||||||||||||||||||||||||||
4401 White Plains Bronx, NY | — | 1,581 | 5,054 | — | 1,581 | 5,054 | 6,635 | 800 | 2011 | (a) | 40 years | |||||||||||||||||||||||||||
Chicago Street Retail Portfolio | — | 17,527 | 49,501 | 5,544 | 17,565 | 55,007 | 72,572 | 11,383 | 2012 | (a) | 40 years |
|
|
|
|
| Initial Cost |
|
|
|
|
| Amount at Which |
|
|
|
|
|
|
|
|
| |||||||||||||||||
Description and |
| Encumbrances |
|
| Land |
|
| Buildings & |
|
| Increase |
|
| Land |
|
| Buildings & |
|
| Total |
|
| Accumulated |
|
| Date of |
|
| Life on which | ||||||||
Core Portfolio: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Crescent Plaza |
|
| — |
|
|
| 1,147 |
|
|
| 7,425 |
|
|
| 3,504 |
|
|
| 1,147 |
|
|
| 10,929 |
|
|
| 12,076 |
|
|
| 9,405 |
|
| 1993 | (a) |
| 40 years |
New Loudon Center |
|
| — |
|
|
| 505 |
|
|
| 4,161 |
|
|
| 16,346 |
|
|
| 505 |
|
|
| 20,507 |
|
|
| 21,012 |
|
|
| 17,230 |
|
| 1993 | (a) |
| 40 years |
Mark Plaza |
|
| — |
|
|
| — |
|
|
| 3,396 |
|
|
| — |
|
|
| — |
|
|
| 3,396 |
|
|
| 3,396 |
|
|
| 3,153 |
|
| 1993 | (c) |
| 40 years |
Plaza 422 |
|
| — |
|
|
| 190 |
|
|
| 3,004 |
|
|
| 2,809 |
|
|
| 190 |
|
|
| 5,813 |
|
|
| 6,003 |
|
|
| 5,370 |
|
| 1993 | (c) |
| 40 years |
Route 6 Mall |
|
| — |
|
|
| 1,664 |
|
|
| — |
|
|
| 12,897 |
|
|
| 1,664 |
|
|
| 12,897 |
|
|
| 14,561 |
|
|
| 11,509 |
|
| 1994 | (c) |
| 40 years |
Abington Towne Center |
|
| — |
|
|
| 799 |
|
|
| 3,197 |
|
|
| 4,227 |
|
|
| 799 |
|
|
| 7,424 |
|
|
| 8,223 |
|
|
| 4,898 |
|
| 1998 | (a) |
| 40 years |
Bloomfield Town Square |
|
| — |
|
|
| 3,207 |
|
|
| 13,774 |
|
|
| 29,476 |
|
|
| 3,207 |
|
|
| 43,250 |
|
|
| 46,457 |
|
|
| 28,386 |
|
| 1998 | (a) |
| 40 years |
Elmwood Park Shopping Center Elmwood Park, NJ |
|
| — |
|
|
| 3,248 |
|
|
| 12,992 |
|
|
| 21,246 |
|
|
| 3,798 |
|
|
| 33,688 |
|
|
| 37,486 |
|
|
| 22,446 |
|
| 1998 | (a) |
| 40 years |
Merrillville Plaza |
|
| — |
|
|
| 4,288 |
|
|
| 17,152 |
|
|
| 10,646 |
|
|
| 4,288 |
|
|
| 27,798 |
|
|
| 32,086 |
|
|
| 16,271 |
|
| 1998 | (a) |
| 40 years |
Marketplace of Absecon |
|
| — |
|
|
| 2,573 |
|
|
| 10,294 |
|
|
| 5,796 |
|
|
| 2,577 |
|
|
| 16,086 |
|
|
| 18,663 |
|
|
| 10,495 |
|
| 1998 | (a) |
| 40 years |
239 Greenwich Avenue |
|
| 26,000 |
|
|
| 1,817 |
|
|
| 15,846 |
|
|
| 2,892 |
|
|
| 1,817 |
|
|
| 18,738 |
|
|
| 20,555 |
|
|
| 10,158 |
|
| 1998 | (a) |
| 40 years |
Hobson West Plaza |
|
| — |
|
|
| 1,793 |
|
|
| 7,172 |
|
|
| 5,637 |
|
|
| 1,793 |
|
|
| 12,809 |
|
|
| 14,602 |
|
|
| 7,448 |
|
| 1998 | (a) |
| 40 years |
Village Commons Shopping Center Smithtown, NY |
|
| — |
|
|
| 3,229 |
|
|
| 12,917 |
|
|
| 5,628 |
|
|
| 3,229 |
|
|
| 18,545 |
|
|
| 21,774 |
|
|
| 12,175 |
|
| 1998 | (a) |
| 40 years |
Town Line Plaza |
|
| — |
|
|
| 878 |
|
|
| 3,510 |
|
|
| 8,286 |
|
|
| 907 |
|
|
| 11,767 |
|
|
| 12,674 |
|
|
| 9,872 |
|
| 1998 | (a) |
| 40 years |
Branch Shopping Center |
|
| — |
|
|
| 3,156 |
|
|
| 12,545 |
|
|
| 17,445 |
|
|
| 3,401 |
|
|
| 29,745 |
|
|
| 33,146 |
|
|
| 19,135 |
|
| 1998 | (a) |
| 40 years |
Methuen Shopping Center |
|
| — |
|
|
| 956 |
|
|
| 3,826 |
|
|
| 1,856 |
|
|
| 961 |
|
|
| 5,677 |
|
|
| 6,638 |
|
|
| 3,453 |
|
| 1998 | (a) |
| 40 years |
The Gateway Shopping Center |
|
| — |
|
|
| 1,273 |
|
|
| 5,091 |
|
|
| 12,889 |
|
|
| 1,273 |
|
|
| 17,980 |
|
|
| 19,253 |
|
|
| 12,394 |
|
| 1999 | (a) |
| 40 years |
Mad River Station |
|
| — |
|
|
| 2,350 |
|
|
| 9,404 |
|
|
| 2,352 |
|
|
| 2,350 |
|
|
| 11,756 |
|
|
| 14,106 |
|
|
| 7,460 |
|
| 1999 | (a) |
| 40 years |
Brandywine Holdings |
|
| — |
|
|
| 5,063 |
|
|
| 15,252 |
|
|
| 2,815 |
|
|
| 5,201 |
|
|
| 17,929 |
|
|
| 23,130 |
|
|
| 8,819 |
|
| 2003 | (a) |
| 40 years |
Bartow Avenue |
|
| — |
|
|
| 1,691 |
|
|
| 5,803 |
|
|
| 1,489 |
|
|
| 1,691 |
|
|
| 7,292 |
|
|
| 8,983 |
|
|
| 3,999 |
|
| 2005 | (c) |
| 40 years |
Amboy Road |
|
| — |
|
|
| — |
|
|
| 11,909 |
|
|
| 3,279 |
|
|
| — |
|
|
| 15,188 |
|
|
| 15,188 |
|
|
| 10,563 |
|
| 2005 | (a) |
| 40 years |
Chestnut Hill |
|
| — |
|
|
| 8,289 |
|
|
| 5,691 |
|
|
| 4,802 |
|
|
| 8,289 |
|
|
| 10,493 |
|
|
| 18,782 |
|
|
| 6,201 |
|
| 2006 | (a) |
| 40 years |
2914 Third Avenue |
|
| — |
|
|
| 11,108 |
|
|
| 8,038 |
|
|
| 5,586 |
|
|
| 11,855 |
|
|
| 12,877 |
|
|
| 24,732 |
|
|
| 4,530 |
|
| 2006 | (a) |
| 40 years |
West 54th Street |
|
| — |
|
|
| 16,699 |
|
|
| 18,704 |
|
|
| 1,515 |
|
|
| 16,699 |
|
|
| 20,219 |
|
|
| 36,918 |
|
|
| 8,471 |
|
| 2007 | (a) |
| 40 years |
5-7 East 17th Street |
|
| — |
|
|
| 3,048 |
|
|
| 7,281 |
|
|
| 6,301 |
|
|
| 3,048 |
|
|
| 13,582 |
|
|
| 16,630 |
|
|
| 8,877 |
|
| 2008 | (a) |
| 40 years |
651-671 W Diversey |
|
| — |
|
|
| 8,576 |
|
|
| 17,256 |
|
|
| 233 |
|
|
| 8,576 |
|
|
| 17,489 |
|
|
| 26,065 |
|
|
| 5,005 |
|
| 2011 | (a) |
| 40 years |
15 Mercer Street |
|
| — |
|
|
| 1,887 |
|
|
| 2,483 |
|
|
| 6 |
|
|
| 1,887 |
|
|
| 2,489 |
|
|
| 4,376 |
|
|
| 714 |
|
| 2011 | (a) |
| 40 years |
4401 White Plains |
|
| — |
|
|
| 1,581 |
|
|
| 5,054 |
|
|
| — |
|
|
| 1,581 |
|
|
| 5,054 |
|
|
| 6,635 |
|
|
| 1,432 |
|
| 2011 | (a) |
| 40 years |
56 E. Walton |
|
| — |
|
|
| 994 |
|
|
| 6,126 |
|
|
| 3,016 |
|
|
| 994 |
|
|
| 9,142 |
|
|
| 10,136 |
|
|
| 1,162 |
|
| 2011 | (a) |
| 40 years |
841 W. Armitage |
|
| — |
|
|
| 728 |
|
|
| 1,989 |
|
|
| 422 |
|
|
| 728 |
|
|
| 2,411 |
|
|
| 3,139 |
|
|
| 907 |
|
| 2011 | (a) |
| 40 years |
2731 N. Clark |
|
| — |
|
|
| 557 |
|
|
| 1,839 |
|
|
| 32 |
|
|
| 557 |
|
|
| 1,871 |
|
|
| 2,428 |
|
|
| 550 |
|
| 2011 | (a) |
| 40 years |
2140 N. Clybourn |
|
| — |
|
|
| 306 |
|
|
| 788 |
|
|
| 54 |
|
|
| 306 |
|
|
| 842 |
|
|
| 1,148 |
|
|
| 235 |
|
| 2011 | (a) |
| 40 years |
853 W. Armitage |
|
| — |
|
|
| 557 |
|
|
| 1,946 |
|
|
| 508 |
|
|
| 557 |
|
|
| 2,454 |
|
|
| 3,011 |
|
|
| 954 |
|
| 2011 | (a) |
| 40 years |
2299 N. Clybourn Avenue |
|
| — |
|
|
| 177 |
|
|
| 484 |
|
|
| — |
|
|
| 177 |
|
|
| 484 |
|
|
| 661 |
|
|
| 138 |
|
| 2011 | (a) |
| 40 years |
843-45 W. Armitage |
|
| — |
|
|
| 731 |
|
|
| 2,730 |
|
|
| 294 |
|
|
| 731 |
|
|
| 3,024 |
|
|
| 3,755 |
|
|
| 871 |
|
| 2012 | (a) |
| 40 years |
1525 W. Belmont Avenue |
|
| — |
|
|
| 1,480 |
|
|
| 3,338 |
|
|
| 887 |
|
|
| 1,480 |
|
|
| 4,225 |
|
|
| 5,705 |
|
|
| 1,307 |
|
| 2012 | (a) |
| 40 years |
2206-08 N. Halsted |
|
| — |
|
|
| 1,183 |
|
|
| 3,540 |
|
|
| 359 |
|
|
| 1,183 |
|
|
| 3,899 |
|
|
| 5,082 |
|
|
| 1,302 |
|
| 2012 | (a) |
| 40 years |
2633 N. Halsted |
|
| — |
|
|
| 960 |
|
|
| 4,096 |
|
|
| 359 |
|
|
| 998 |
|
|
| 4,417 |
|
|
| 5,415 |
|
|
| 1,209 |
|
| 2012 | (a) |
| 40 years |
50-54 E. Walton |
|
| — |
|
|
| 2,848 |
|
|
| 12,694 |
|
|
| 642 |
|
|
| 2,848 |
|
|
| 13,336 |
|
|
| 16,184 |
|
|
| 3,732 |
|
| 2012 | (a) |
| 40 years |
662 W. Diversey |
|
| — |
|
|
| 1,713 |
|
|
| 1,603 |
|
|
| 10 |
|
|
| 1,713 |
|
|
| 1,613 |
|
|
| 3,326 |
|
|
| 406 |
|
| 2012 | (a) |
| 40 years |
119
ACADIA REALTY TRUST
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Initial Cost to Company | Amount at Which Carried at December 31, 2017 | |||||||||||||||||||||||||||||||||||||
Description and Location | Encumbrances | Land | Buildings & Improvements | Increase (Decrease) in Net Investments | Land | Buildings & Improvements | Total | Accumulated Depreciation | Date of Acquisition (a) Construction (c) | Life on which Depreciation in Latest Statement of Income is Compared | ||||||||||||||||||||||||||||
1520 Milwaukee Avenue Chicago, IL | — | 2,110 | 1,306 | 2 | 2,110 | 1,308 | 3,418 | 193 | 2012 | (a) | 40 years | |||||||||||||||||||||||||||
330-340 River St Cambridge, MA | 11,644 | 8,404 | 14,235 | — | 8,404 | 14,235 | 22,639 | 2,179 | 2012 | (a) | 40 years | |||||||||||||||||||||||||||
Rhode Island Place Shopping Center Washington, D.C. | — | 7,458 | 15,968 | 1,708 | 7,458 | 17,676 | 25,134 | 2,709 | 2012 | (a) | 40 years | |||||||||||||||||||||||||||
930 Rush Street Chicago, IL | — | 4,933 | 14,587 | — | 4,933 | 14,587 | 19,520 | 2,097 | 2012 | (a) | 40 years | |||||||||||||||||||||||||||
28 Jericho Turnpike Westbury, NY | 14,402 | 6,220 | 24,416 | — | 6,220 | 24,416 | 30,636 | 3,575 | 2012 | (a) | 40 years | |||||||||||||||||||||||||||
181 Main Street Westport, CT | — | 1,908 | 12,158 | 333 | 1,908 | 12,491 | 14,399 | 1,612 | 2012 | (a) | 40 years | |||||||||||||||||||||||||||
83 Spring Street Manhattan, NY | — | 1,754 | 9,200 | — | 1,754 | 9,200 | 10,954 | 1,265 | 2012 | (a) | 40 years | |||||||||||||||||||||||||||
60 Orange Street Bloomfield, NJ | 7,522 | 3,609 | 10,790 | — | 3,609 | 10,790 | 14,399 | 1,562 | 2012 | (a) | 40 years | |||||||||||||||||||||||||||
179-53 & 1801-03 Connecticut Avenue Washington, D.C. | — | 11,690 | 10,135 | 802 | 11,690 | 10,937 | 22,627 | 1,522 | 2012 | (a) | 40 years | |||||||||||||||||||||||||||
639 West Diversey Chicago, IL | — | 4,429 | 6,102 | 779 | 4,429 | 6,881 | 11,310 | 1,069 | 2012 | (a) | 40 years | |||||||||||||||||||||||||||
664 North Michigan Chicago, IL | 40,584 | 15,240 | 65,331 | — | 15,240 | 65,331 | 80,571 | 7,973 | 2013 | (a) | 40 years | |||||||||||||||||||||||||||
8-12 E. Walton Chicago, IL | — | 5,398 | 15,601 | 939 | 5,398 | 16,540 | 21,938 | 1,879 | 2013 | (a) | 40 years | |||||||||||||||||||||||||||
3200-3204 M Street Washington, DC | — | 6,899 | 4,249 | 168 | 6,899 | 4,417 | 11,316 | 547 | 2013 | (a) | 40 years | |||||||||||||||||||||||||||
868 Broadway Manhattan, NY | — | 3,519 | 9,247 | 5 | 3,519 | 9,252 | 12,771 | 942 | 2013 | (a) | 40 years | |||||||||||||||||||||||||||
313-315 Bowery Manhattan, NY | — | — | 5,516 | — | — | 5,516 | 5,516 | 893 | 2013 | (a) | 40 years | |||||||||||||||||||||||||||
120 West Broadway Manhattan, NY | — | — | 32,819 | 1,116 | — | 33,935 | 33,935 | 2,192 | 2013 | (a) | 40 years | |||||||||||||||||||||||||||
11 E. Walton Chicago, IL | — | 16,744 | 28,346 | 192 | 16,744 | 28,538 | 45,282 | 2,923 | 2014 | (a) | 40 years | |||||||||||||||||||||||||||
61 Main St. Westport, CT | — | 4,578 | 2,645 | 182 | 4,578 | 2,827 | 7,405 | 307 | 2014 | (a) | 40 years | |||||||||||||||||||||||||||
865 W. North Avenue Chicago, IL | — | 1,893 | 11,594 | 23 | 1,893 | 11,617 | 13,510 | 1,105 | 2014 | (a) | 40 years | |||||||||||||||||||||||||||
152-154 Spring St. Manhattan, NY | — | 8,544 | 27,001 | — | 8,544 | 27,001 | 35,545 | 2,509 | 2014 | (a) | 40 years | |||||||||||||||||||||||||||
2520 Flatbush Ave Brooklyn, NY | — | 6,613 | 10,419 | 193 | 6,613 | 10,612 | 17,225 | 1,026 | 2014 | (a) | 40 years | |||||||||||||||||||||||||||
252-256 Greenwich Avenue Greenwich, CT | — | 10,175 | 12,641 | 119 | 10,175 | 12,760 | 22,935 | 1,300 | 2014 | (a) | 40 years | |||||||||||||||||||||||||||
Bedford Green Bedford Hills, NY | — | 12,425 | 32,730 | 1,929 | 12,425 | 34,659 | 47,084 | 3,228 | 2014 | (a) | 40 years | |||||||||||||||||||||||||||
131-135 Prince Street Manhattan, NY | — | — | 57,536 | 135 | — | 57,671 | 57,671 | 8,969 | 2014 | (a) | 40 years | |||||||||||||||||||||||||||
Shops at Grand Ave Queens, NY | — | 20,264 | 33,131 | 312 | 20,264 | 33,443 | 53,707 | 2,746 | 2014 | (a) | 40 years | |||||||||||||||||||||||||||
201 Needham St. Newton, MA | — | 4,550 | 4,459 | 105 | 4,550 | 4,564 | 9,114 | 419 | 2014 | (a) | 40 years | |||||||||||||||||||||||||||
City Center San Francisco, CA | — | 36,063 | 109,098 | 2,604 | 36,063 | 111,702 | 147,765 | 7,731 | 2015 | (a) | 40 years | |||||||||||||||||||||||||||
163 Highland Avenue Needham, MA | 9,112 | 12,679 | 11,213 | — | 12,679 | 11,213 | 23,892 | 911 | 2015 | (a) | 40 years | |||||||||||||||||||||||||||
Roosevelt Galleria Chicago, IL | — | 4,838 | 14,574 | — | 4,838 | 14,574 | 19,412 | 856 | 2015 | (a) | 40 years | |||||||||||||||||||||||||||
Route 202 Shopping Center Wilmington, DE | — | — | 6,346 | 13 | — | 6,359 | 6,359 | 467 | 2015 | (a) | 40 years | |||||||||||||||||||||||||||
991 Madison Avenue New York, NY | — | — | 76,965 | 175 | — | 77,140 | 77,140 | 2,749 | 2016 | (a) | 40 years | |||||||||||||||||||||||||||
165 Newbury Street Boston, MA | — | 1,918 | 3,980 | — | 1,918 | 3,980 | 5,898 | 166 | 2016 | (a) | 40 years | |||||||||||||||||||||||||||
Concord & Milwaukee Chicago, IL | 2,802 | 2,739 | 2,746 | — | 2,739 | 2,746 | 5,485 | 103 | 2016 | (a) | 40 years | |||||||||||||||||||||||||||
State & Washington Chicago, IL | 24,974 | 3,907 | 70,943 | — | 3,907 | 70,943 | 74,850 | 2,365 | 2016 | (a) | 40 years |
|
|
|
|
| Initial Cost |
|
|
|
|
| Amount at Which |
|
|
|
|
|
|
|
|
| |||||||||||||||||
Description and |
| Encumbrances |
|
| Land |
|
| Buildings & |
|
| Increase |
|
| Land |
|
| Buildings & |
|
| Total |
|
| Accumulated |
|
| Date of |
|
| Life on which | ||||||||
837 W. Armitage |
|
| — |
|
|
| 780 |
|
|
| 1,758 |
|
|
| 151 |
|
|
| 780 |
|
|
| 1,909 |
|
|
| 2,689 |
|
|
| 585 |
|
| 2012 | (a) |
| 40 years |
823 W. Armitage |
|
| — |
|
|
| 717 |
|
|
| 1,149 |
|
|
| 95 |
|
|
| 717 |
|
|
| 1,244 |
|
|
| 1,961 |
|
|
| 329 |
|
| 2012 | (a) |
| 40 years |
851 W. Armitage |
|
| — |
|
|
| 545 |
|
|
| 209 |
|
|
| 139 |
|
|
| 545 |
|
|
| 348 |
|
|
| 893 |
|
|
| 165 |
|
| 2012 | (a) |
| 40 years |
1240 W. Belmont Avenue |
|
| — |
|
|
| 2,137 |
|
|
| 1,589 |
|
|
| 1,357 |
|
|
| 2,137 |
|
|
| 2,946 |
|
|
| 5,083 |
|
|
| 866 |
|
| 2012 | (a) |
| 40 years |
21 E. Chestnut |
|
| — |
|
|
| 1,318 |
|
|
| 8,468 |
|
|
| 44 |
|
|
| 1,318 |
|
|
| 8,512 |
|
|
| 9,830 |
|
|
| 2,146 |
|
| 2012 | (a) |
| 40 years |
819 W. Armitage |
|
| — |
|
|
| 790 |
|
|
| 1,266 |
|
|
| 594 |
|
|
| 790 |
|
|
| 1,860 |
|
|
| 2,650 |
|
|
| 463 | �� |
| 2012 | (a) |
| 40 years |
1520 Milwaukee Avenue |
|
| — |
|
|
| 2,110 |
|
|
| 1,306 |
|
|
| 290 |
|
|
| 2,110 |
|
|
| 1,596 |
|
|
| 3,706 |
|
|
| 489 |
|
| 2012 | (a) |
| 40 years |
Rhode Island Place Shopping Center Washington, D.C. |
|
| — |
|
|
| 7,458 |
|
|
| 15,968 |
|
|
| 2,542 |
|
|
| 7,458 |
|
|
| 18,510 |
|
|
| 25,968 |
|
|
| 5,969 |
|
| 2012 | (a) |
| 40 years |
930 Rush Street |
|
| — |
|
|
| 4,933 |
|
|
| 14,587 |
|
|
| — |
|
|
| 4,933 |
|
|
| 14,587 |
|
|
| 19,520 |
|
|
| 3,920 |
|
| 2012 | (a) |
| 40 years |
28 Jericho Turnpike |
|
| — |
|
|
| 6,220 |
|
|
| 24,416 |
|
|
| 46 |
|
|
| 6,220 |
|
|
| 24,462 |
|
|
| 30,682 |
|
|
| 6,780 |
|
| 2012 | (a) |
| 40 years |
181 Main Street |
|
| — |
|
|
| 1,908 |
|
|
| 12,158 |
|
|
| 719 |
|
|
| 1,908 |
|
|
| 12,877 |
|
|
| 14,785 |
|
|
| 3,376 |
|
| 2012 | (a) |
| 40 years |
83 Spring Street |
|
| — |
|
|
| 1,754 |
|
|
| 9,200 |
|
|
| 33 |
|
|
| 1,754 |
|
|
| 9,233 |
|
|
| 10,987 |
|
|
| 2,415 |
|
| 2012 | (a) |
| 40 years |
179-53 & 1801-03 Connecticut Avenue Washington, D.C. |
|
| — |
|
|
| 11,690 |
|
|
| 10,135 |
|
|
| 1,874 |
|
|
| 11,690 |
|
|
| 12,009 |
|
|
| 23,699 |
|
|
| 3,269 |
|
| 2012 | (a) |
| 40 years |
639 West Diversey |
|
| — |
|
|
| 4,429 |
|
|
| 6,102 |
|
|
| 1,089 |
|
|
| 4,429 |
|
|
| 7,191 |
|
|
| 11,620 |
|
|
| 2,199 |
|
| 2012 | (a) |
| 40 years |
664 North Michigan |
|
| — |
|
|
| 15,240 |
|
|
| 65,331 |
|
|
| 319 |
|
|
| 15,240 |
|
|
| 65,650 |
|
|
| 80,890 |
|
|
| 16,139 |
|
| 2013 | (a) |
| 40 years |
8-12 E. Walton |
|
| — |
|
|
| 5,398 |
|
|
| 15,601 |
|
|
| 977 |
|
|
| 5,398 |
|
|
| 16,578 |
|
|
| 21,976 |
|
|
| 4,455 |
|
| 2013 | (a) |
| 40 years |
3200-3204 M Street |
|
| — |
|
|
| 6,899 |
|
|
| 4,249 |
|
|
| 168 |
|
|
| 6,899 |
|
|
| 4,417 |
|
|
| 11,316 |
|
|
| 1,177 |
|
| 2013 | (a) |
| 40 years |
868 Broadway |
|
| — |
|
|
| 3,519 |
|
|
| 9,247 |
|
|
| 5 |
|
|
| 3,519 |
|
|
| 9,252 |
|
|
| 12,771 |
|
|
| 2,100 |
|
| 2013 | (a) |
| 40 years |
313-315 Bowery |
|
| — |
|
|
| — |
|
|
| 5,516 |
|
|
| — |
|
|
| — |
|
|
| 5,516 |
|
|
| 5,516 |
|
|
| 2,009 |
|
| 2013 | (a) |
| 40 years |
120 West Broadway |
|
| — |
|
|
| — |
|
|
| 32,819 |
|
|
| 2,097 |
|
|
| — |
|
|
| 34,916 |
|
|
| 34,916 |
|
|
| 5,277 |
|
| 2013 | (a) |
| 40 years |
11 E. Walton |
|
| — |
|
|
| 16,744 |
|
|
| 28,346 |
|
|
| 1,444 |
|
|
| 16,744 |
|
|
| 29,790 |
|
|
| 46,534 |
|
|
| 6,868 |
|
| 2014 | (a) |
| 40 years |
61 Main Street |
|
| — |
|
|
| 4,578 |
|
|
| 2,645 |
|
|
| 1,838 |
|
|
| 4,578 |
|
|
| 4,483 |
|
|
| 9,061 |
|
|
| 1,025 |
|
| 2014 | (a) |
| 40 years |
865 W. North Avenue |
|
| — |
|
|
| 1,893 |
|
|
| 11,594 |
|
|
| 233 |
|
|
| 1,893 |
|
|
| 11,827 |
|
|
| 13,720 |
|
|
| 2,573 |
|
| 2014 | (a) |
| 40 years |
152-154 Spring St. |
|
| — |
|
|
| 8,544 |
|
|
| 27,001 |
|
|
| 347 |
|
|
| 8,544 |
|
|
| 27,348 |
|
|
| 35,892 |
|
|
| 5,985 |
|
| 2014 | (a) |
| 40 years |
2520 Flatbush Ave |
|
| — |
|
|
| 6,613 |
|
|
| 10,419 |
|
|
| 313 |
|
|
| 6,613 |
|
|
| 10,732 |
|
|
| 17,345 |
|
|
| 2,413 |
|
| 2014 | (a) |
| 40 years |
252-256 Greenwich Avenue |
|
| — |
|
|
| 10,175 |
|
|
| 12,641 |
|
|
| 1,172 |
|
|
| 10,175 |
|
|
| 13,813 |
|
|
| 23,988 |
|
|
| 3,295 |
|
| 2014 | (a) |
| 40 years |
Bedford Green |
|
| — |
|
|
| 12,425 |
|
|
| 32,730 |
|
|
| 4,690 |
|
|
| 13,765 |
|
|
| 36,080 |
|
|
| 49,845 |
|
|
| 8,479 |
|
| 2014 | (a) |
| 40 years |
131-135 Prince Street |
|
| — |
|
|
| — |
|
|
| 57,536 |
|
|
| 1,126 |
|
|
| — |
|
|
| 58,662 |
|
|
| 58,662 |
|
|
| 23,530 |
|
| 2014 | (a) |
| 40 years |
Shops at Grand Ave |
|
| — |
|
|
| 20,264 |
|
|
| 33,131 |
|
|
| 1,966 |
|
|
| 20,264 |
|
|
| 35,097 |
|
|
| 55,361 |
|
|
| 7,502 |
|
| 2014 | (a) |
| 40 years |
201 Needham Street |
|
| — |
|
|
| 4,550 |
|
|
| 4,459 |
|
|
| 110 |
|
|
| 4,550 |
|
|
| 4,569 |
|
|
| 9,119 |
|
|
| 1,000 |
|
| 2014 | (a) |
| 40 years |
City Center |
|
| — |
|
|
| 36,063 |
|
|
| 109,098 |
|
|
| 5,956 |
|
|
| 26,386 |
|
|
| 124,731 |
|
|
| 151,117 |
|
|
| 24,771 |
|
| 2015 | (a) |
| 40 years |
163 Highland Avenue |
|
| 7,689 |
|
|
| 12,679 |
|
|
| 11,213 |
|
|
| (107 | ) |
|
| 12,529 |
|
|
| 11,256 |
|
|
| 23,785 |
|
|
| 2,355 |
|
| 2015 | (a) |
| 40 years |
Roosevelt Galleria |
|
| — |
|
|
| 4,838 |
|
|
| 14,574 |
|
|
| 559 |
|
|
| 4,838 |
|
|
| 15,133 |
|
|
| 19,971 |
|
|
| 2,717 |
|
| 2015 | (a) |
| 40 years |
Route 202 Shopping Center |
|
| — |
|
|
| — |
|
|
| 6,346 |
|
|
| 705 |
|
|
| — |
|
|
| 7,051 |
|
|
| 7,051 |
|
|
| 1,811 |
|
| 2015 | (a) |
| 40 years |
991 Madison Avenue |
|
| — |
|
|
| — |
|
|
| 76,965 |
|
|
| (75,370 | ) |
|
| — |
|
|
| 1,595 |
|
|
| 1,595 |
|
|
| 631 |
|
| 2016 | (a) |
| 40 years |
165 Newbury Street |
|
| — |
|
|
| 1,918 |
|
|
| 3,980 |
|
|
| — |
|
|
| 1,918 |
|
|
| 3,980 |
|
|
| 5,898 |
|
|
| 663 |
|
| 2016 | (a) |
| 40 years |
Concord & Milwaukee |
|
| 2,394 |
|
|
| 2,739 |
|
|
| 2,746 |
|
|
| 486 |
|
|
| 2,739 |
|
|
| 3,232 |
|
|
| 5,971 |
|
|
| 636 |
|
| 2016 | (a) |
| 40 years |
State & Washington |
|
| 22,051 |
|
|
| 3,907 |
|
|
| 70,943 |
|
|
| 6,225 |
|
|
| 3,907 |
|
|
| 77,168 |
|
|
| 81,075 |
|
|
| 13,094 |
|
| 2016 | (a) |
| 40 years |
151 N. State Street |
|
| 12,570 |
|
|
| 1,941 |
|
|
| 25,529 |
|
|
| — |
|
|
| 1,941 |
|
|
| 25,529 |
|
|
| 27,470 |
|
|
| 4,095 |
|
| 2016 | (a) |
| 40 years |
North & Kingsbury |
|
| 10,891 |
|
|
| 18,731 |
|
|
| 16,292 |
|
|
| 3,066 |
|
|
| 18,731 |
|
|
| 19,358 |
|
|
| 38,089 |
|
|
| 3,068 |
|
| 2016 | (a) |
| 40 years |
Sullivan Center |
|
| 50,000 |
|
|
| 13,443 |
|
|
| 137,327 |
|
|
| 1,590 |
|
|
| 13,443 |
|
|
| 138,917 |
|
|
| 152,360 |
|
|
| 22,243 |
|
| 2016 | (a) |
| 40 years |
California & Armitage |
|
| 2,243 |
|
|
| 6,770 |
|
|
| 2,292 |
|
|
| 98 |
|
|
| 6,770 |
|
|
| 2,390 |
|
|
| 9,160 |
|
|
| 405 |
|
| 2016 | (a) |
| 40 years |
120
ACADIA REALTY TRUST
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Initial Cost to Company | Amount at Which Carried at December 31, 2017 | |||||||||||||||||||||||||||||||||||||
Description and Location | Encumbrances | Land | Buildings & Improvements | Increase (Decrease) in Net Investments | Land | Buildings & Improvements | Total | Accumulated Depreciation | Date of Acquisition (a) Construction (c) | Life on which Depreciation in Latest Statement of Income is Compared | ||||||||||||||||||||||||||||
151 N. State Street Chicago, IL | 14,179 | 1,941 | 25,529 | — | 1,941 | 25,529 | 27,470 | 904 | 2016 | (a) | 40 years | |||||||||||||||||||||||||||
North & Kingsbury Chicago, IL | 12,931 | 18,731 | 16,292 | — | 18,731 | 16,292 | 35,023 | 564 | 2016 | (a) | 40 years | |||||||||||||||||||||||||||
Sullivan Center Chicago, IL | — | 13,443 | 137,327 | 54 | 13,443 | 137,381 | 150,824 | 4,578 | 2016 | (a) | 40 years | |||||||||||||||||||||||||||
California & Armitage Chicago, IL | 2,622 | 6,770 | 2,292 | 2 | 6,770 | 2,294 | 9,064 | 84 | 2016 | (a) | 40 years | |||||||||||||||||||||||||||
555 9th Street San Francisco, CA | 60,000 | 75,591 | 73,268 | — | 75,591 | 73,268 | 148,859 | 2,154 | 2016 | (a) | 40 years | |||||||||||||||||||||||||||
Market Square Wilmington, DE | — | 8,100 | 31,221 | 157 | 8,100 | 31,379 | 39,479 | 75 | 2017 | (a) | 40 years | |||||||||||||||||||||||||||
Undeveloped Land | — | 100 | — | — | 100 | — | 100 | — | ||||||||||||||||||||||||||||||
Fund II: | ||||||||||||||||||||||||||||||||||||||
City Point Brooklyn, NY | 224,820 | — | 100,316 | 455,125 | — | 555,441 | 555,441 | 13,628 | 2007 | (c) | 40 years | |||||||||||||||||||||||||||
Fund III: | ||||||||||||||||||||||||||||||||||||||
654 Broadway Manhattan, NY | — | 9,040 | 3,654 | 2,883 | 9,040 | 6,537 | 15,577 | 921 | 2011 | (a) | 40 years | |||||||||||||||||||||||||||
640 Broadway Manhattan, NY | 49,470 | 12,503 | 19,960 | 12,921 | 12,503 | 32,881 | 45,384 | 4,694 | 2012 | (a) | 40 years | |||||||||||||||||||||||||||
3104 M St. Washington, DC | 4,419 | 750 | 2,115 | 5,139 | 750 | 7,254 | 8,004 | 283 | 2013 | (c) | 40 years | |||||||||||||||||||||||||||
3780-3858 Nostrand Avenue Brooklyn, NY | 10,617 | 6,229 | 11,216 | 6,139 | 6,229 | 17,355 | 23,584 | 2,157 | 2013 | (a) | 40 years | |||||||||||||||||||||||||||
Fund IV: | — | — | ||||||||||||||||||||||||||||||||||||
210 Bowery Manhattan, NY | 10,919 | 1,875 | 5,625 | 17,104 | 1,875 | 22,729 | 24,604 | 142 | 2012 | (c) | 40 years | |||||||||||||||||||||||||||
Paramus Plaza Paramus, NJ | 18,454 | 11,052 | 7,037 | 11,560 | 11,052 | 18,597 | 29,649 | 1,739 | 2013 | (a) | 40 years | |||||||||||||||||||||||||||
Lake Montclair Center Dumfries, VA | 14,098 | 7,077 | 12,028 | 702 | 7,077 | 12,730 | 19,807 | 1,482 | 2013 | (a) | 40 years | |||||||||||||||||||||||||||
938 W. North Avenue Chicago, IL | 14,100 | 2,314 | 17,067 | 2,044 | 2,314 | 19,111 | 21,425 | 1,733 | 2013 | (a) | 40 years | |||||||||||||||||||||||||||
27 E. 61st Street Manhattan, NY | — | 4,813 | 14,438 | 6,693 | 4,813 | 21,131 | 25,944 | 131 | 2014 | (c) | 40 years | |||||||||||||||||||||||||||
17 E. 71st Street Manhattan, NY | 19,000 | 7,391 | 20,176 | 266 | 7,391 | 20,442 | 27,833 | 1,680 | 2014 | (a) | 40 years | |||||||||||||||||||||||||||
Broughton St. Portfolio Savannah, GA | 24,699 | — | — | — | — | — | — | — | 2014 | (c) | 40 years | |||||||||||||||||||||||||||
1035 Third Ave Manhattan, NY | 41,387 | 12,759 | 37,431 | 4,648 | 14,099 | 40,739 | 54,838 | 2,992 | 2015 | (a) | 40 years | |||||||||||||||||||||||||||
801 Madison Avenue Manhattan, NY | — | 4,178 | 28,470 | 4,474 | 4,178 | 32,945 | 37,123 | 206 | 2015 | (c) | 40 years | |||||||||||||||||||||||||||
2208-2216 Fillmore Street San Francisco, CA | 5,606 | 3,027 | 6,376 | 26 | 3,027 | 6,402 | 9,429 | 348 | 2015 | (a) | 40 years | |||||||||||||||||||||||||||
146 Geary Street San Francisco, CA | 27,700 | 9,500 | 28,500 | 7 | 9,500 | 28,507 | 38,007 | 1,544 | 2015 | (a) | 40 years | |||||||||||||||||||||||||||
2207 Fillmore Street San Francisco, CA | 1,120 | 1,498 | 1,735 | 119 | 1,498 | 1,854 | 3,352 | 93 | 2015 | (a) | 40 years | |||||||||||||||||||||||||||
1861 Union St. San Francisco, CA | 2,315 | 2,188 | 1,293 | 8 | 2,188 | 1,301 | 3,489 | 67 | 2015 | (a) | 40 years | |||||||||||||||||||||||||||
1964 Union Street San Francisco, CA | 1,463 | 563 | 1,688 | 2,577 | 563 | 4,265 | 4,828 | 44 | 2016 | (c) | 40 years | |||||||||||||||||||||||||||
Restaurants at Fort Point Boston, MA | 6,425 | 1,041 | 10,905 | — | 1,041 | 10,905 | 11,946 | 545 | 2016 | (a) | 40 years | |||||||||||||||||||||||||||
Wakeforest Crossing Wake Forest, NC | 24,000 | 7,570 | 24,829 | 196 | 7,570 | 25,025 | 32,595 | 989 | 2016 | (a) | 40 years | |||||||||||||||||||||||||||
Airport Mall Bangor, ME | 5,613 | 2,294 | 7,067 | 74 | 2,294 | 7,141 | 9,435 | 278 | 2016 | (a) | 40 years | |||||||||||||||||||||||||||
Colonie Plaza Albany, NY | 11,890 | 2,852 | 9,619 | 4 | 2,852 | 9,623 | 12,475 | 338 | 2016 | (a) | 40 years | |||||||||||||||||||||||||||
Dauphin Plaza Harrisburg, PA | 10,270 | 5,290 | 9,464 | 317 | 5,290 | 9,781 | 15,071 | 351 | 2016 | (a) | 40 years | |||||||||||||||||||||||||||
JFK Plaza Waterville, ME | 4,490 | 751 | 5,991 | 7 | 751 | 5,998 | 6,749 | 222 | 2016 | (a) | 40 years | |||||||||||||||||||||||||||
Mayfair Shopping Center Philadelphia, PA | — | 6,178 | 9,266 | 32 | 6,178 | 9,298 | 15,476 | 294 | 2016 | (a) | 40 years | |||||||||||||||||||||||||||
Shaw's Plaza Waterville, ME | 8,035 | 828 | 11,814 | — | 828 | 11,814 | 12,642 | 388 | 2016 | (a) | 40 years |
|
|
|
|
| Initial Cost |
|
|
|
|
| Amount at Which |
|
|
|
|
|
|
|
|
| |||||||||||||||||
Description and |
| Encumbrances |
|
| Land |
|
| Buildings & |
|
| Increase |
|
| Land |
|
| Buildings & |
|
| Total |
|
| Accumulated |
|
| Date of |
|
| Life on which | ||||||||
555 9th Street |
|
| 60,000 |
|
|
| 75,591 |
|
|
| 73,268 |
|
|
| 869 |
|
|
| 75,591 |
|
|
| 74,137 |
|
|
| 149,728 |
|
|
| 11,468 |
|
| 2016 | (a) |
| 40 years |
Market Square |
|
| — |
|
|
| 8,100 |
|
|
| 31,221 |
|
|
| 626 |
|
|
| 8,100 |
|
|
| 31,847 |
|
|
| 39,947 |
|
|
| 4,445 |
|
| 2017 | (a) |
| 40 years |
613-623 W. Diversey |
|
| — |
|
|
| 10,061 |
|
|
| 2,773 |
|
|
| 11,717 |
|
|
| 10,061 |
|
|
| 14,490 |
|
|
| 24,551 |
|
|
| 4,303 |
|
| 2018 | (c) |
| 40 years |
51 Greene Street |
|
| — |
|
|
| 4,488 |
|
|
| 8,992 |
|
|
| 100 |
|
|
| 4,488 |
|
|
| 9,092 |
|
|
| 13,580 |
|
|
| 870 |
|
| 2019 | (a) |
| 40 years |
53 Greene Street |
|
| — |
|
|
| 3,605 |
|
|
| 12,177 |
|
|
| 2 |
|
|
| 3,605 |
|
|
| 12,179 |
|
|
| 15,784 |
|
|
| 1,142 |
|
| 2019 | (a) |
| 40 years |
41 Greene Street |
|
| — |
|
|
| 6,276 |
|
|
| 9,582 |
|
|
| — |
|
|
| 6,276 |
|
|
| 9,582 |
|
|
| 15,858 |
|
|
| 858 |
|
| 2019 | (a) |
| 40 years |
47 Greene Street |
|
| — |
|
|
| 6,265 |
|
|
| 16,758 |
|
|
| 6 |
|
|
| 6,265 |
|
|
| 16,764 |
|
|
| 23,029 |
|
|
| 1,432 |
|
| 2019 | (a) |
| 40 years |
849 W Armitage |
|
| — |
|
|
| 837 |
|
|
| 2,731 |
|
|
| — |
|
|
| 837 |
|
|
| 2,731 |
|
|
| 3,568 |
|
|
| 239 |
|
| 2019 | (a) |
| 40 years |
912 W Armitage |
|
| — |
|
|
| 982 |
|
|
| 2,868 |
|
|
| 183 |
|
|
| 982 |
|
|
| 3,051 |
|
|
| 4,033 |
|
|
| 267 |
|
| 2019 | (a) |
| 40 years |
Melrose Place Collection |
|
| — |
|
|
| 20,490 |
|
|
| 26,788 |
|
|
| — |
|
|
| 20,490 |
|
|
| 26,788 |
|
|
| 47,278 |
|
|
| 2,128 |
|
| 2019 | (a) |
| 40 years |
45 Greene Street |
|
| — |
|
|
| 2,903 |
|
|
| 8,487 |
|
|
| 288 |
|
|
| 2,903 |
|
|
| 8,775 |
|
|
| 11,678 |
|
|
| 713 |
|
| 2019 | (a) |
| 40 years |
565 Broadway |
|
| — |
|
|
| — |
|
|
| 22,491 |
|
|
| 1,123 |
|
|
| — |
|
|
| 23,614 |
|
|
| 23,614 |
|
|
| 1,747 |
|
| 2019 | (a) |
| 40 years |
907 W Armitage |
|
| — |
|
|
| 700 |
|
|
| 2,081 |
|
|
| — |
|
|
| 700 |
|
|
| 2,081 |
|
|
| 2,781 |
|
|
| 175 |
|
| 2019 | (a) |
| 40 years |
37 Greene Street |
|
| — |
|
|
| 6,721 |
|
|
| 9,119 |
|
|
| — |
|
|
| 6,721 |
|
|
| 9,119 |
|
|
| 15,840 |
|
|
| 684 |
|
| 2020 | (a) |
| 40 years |
917 W Armitage |
|
| — |
|
|
| 901 |
|
|
| 2,368 |
|
|
| — |
|
|
| 901 |
|
|
| 2,368 |
|
|
| 3,269 |
|
|
| 187 |
|
| 2020 | (a) |
| 40 years |
Brandywine Town Center |
|
| — |
|
|
| 15,632 |
|
|
| 101,861 |
|
|
| 7,855 |
|
|
| 15,632 |
|
|
| 109,716 |
|
|
| 125,348 |
|
|
| 8,421 |
|
| 2020 | (a) |
| 40 years |
1324 14th Street |
|
| — |
|
|
| 728 |
|
|
| 3,044 |
|
|
| — |
|
|
| 728 |
|
|
| 3,044 |
|
|
| 3,772 |
|
|
| 76 |
|
| 2021 | (a) |
| 40 years |
1526 14th Street |
|
| — |
|
|
| 1,377 |
|
|
| 6,964 |
|
|
| — |
|
|
| 1,377 |
|
|
| 6,964 |
|
|
| 8,341 |
|
|
| 174 |
|
| 2021 | (a) |
| 40 years |
1529 14th Street |
|
| — |
|
|
| 1,485 |
|
|
| 10,411 |
|
|
| — |
|
|
| 1,485 |
|
|
| 10,411 |
|
|
| 11,896 |
|
|
| 260 |
|
| 2021 | (a) |
| 40 years |
121 Spring St |
|
| — |
|
|
| 5,380 |
|
|
| 31,707 |
|
|
| — |
|
|
| 5,380 |
|
|
| 31,707 |
|
|
| 37,087 |
|
|
| 793 |
|
| 2022 | (a) |
| 40 years |
8833 Beverly Blvd |
|
| — |
|
|
| 14,423 |
|
|
| 8,314 |
|
|
| — |
|
|
| 14,423 |
|
|
| 8,314 |
|
|
| 22,737 |
|
|
| 174 |
|
| 2022 | (a) |
| 40 years |
Williamsburg Portfolio |
|
| — |
|
|
| 31,500 |
|
|
| 60,720 |
|
|
| 1,856 |
|
|
| 31,500 |
|
|
| 62,576 |
|
|
| 94,076 |
|
|
| 1,280 |
|
| 2022 | (a) |
| 40 years |
Henderson Portfolio |
|
| — |
|
|
| 27,086 |
|
|
| 41,823 |
|
|
| 255 |
|
|
| 27,086 |
|
|
| 42,078 |
|
|
| 69,164 |
|
|
| 918 |
|
| 2022 | (a) |
| 40 years |
Fund II: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
City Point |
|
| 133,655 |
|
|
| — |
|
|
| 100,316 |
|
|
| 529,026 |
|
|
| — |
|
|
| 629,342 |
|
|
| 629,342 |
|
|
| 115,052 |
|
| 2007 | (c) |
| 40 years |
Fund III: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
640 Broadway |
|
| 35,970 |
|
|
| 27,831 |
|
|
| 27,291 |
|
|
| 572 |
|
|
| 27,831 |
|
|
| 27,863 |
|
|
| 55,694 |
|
|
| 639 |
|
| 2012 | (a) |
| 40 years |
Fund IV: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
210 Bowery |
|
| — |
|
|
| 1,875 |
|
|
| 5,625 |
|
|
| (6,490 | ) |
|
| 518 |
|
|
| 492 |
|
|
| 1,010 |
|
|
| 192 |
|
| 2012 | (c) |
| 40 years |
27 E. 61st Street |
|
| 15,002 |
|
|
| 4,813 |
|
|
| 14,438 |
|
|
| 1,658 |
|
|
| 3,523 |
|
|
| 17,386 |
|
|
| 20,909 |
|
|
| 2,707 |
|
| 2014 | (c) |
| 40 years |
17 E. 71st Street |
|
| - |
|
|
| 7,391 |
|
|
| 20,176 |
|
|
| 338 |
|
|
| 7,391 |
|
|
| 20,514 |
|
|
| 27,905 |
|
|
| 4,356 |
|
| 2014 | (a) |
| 40 years |
1035 Third Avenue |
|
| 7,473 |
|
|
| 12,759 |
|
|
| 37,431 |
|
|
| 5,842 |
|
|
| 14,100 |
|
|
| 41,932 |
|
|
| 56,032 |
|
|
| 9,494 |
|
| 2015 | (a) |
| 40 years |
801 Madison Avenue |
|
| 16,725 |
|
|
| 4,178 |
|
|
| 28,470 |
|
|
| (4,885 | ) |
|
| 2,922 |
|
|
| 24,841 |
|
|
| 27,763 |
|
|
| 3,842 |
|
| 2015 | (c) |
| 40 years |
2208-2216 Fillmore Street |
|
| 5,397 |
|
|
| 3,027 |
|
|
| 6,376 |
|
|
| 205 |
|
|
| 3,027 |
|
|
| 6,581 |
|
|
| 9,608 |
|
|
| 1,192 |
|
| 2015 | (a) |
| 40 years |
2207 Fillmore Street |
|
| 1,120 |
|
|
| 1,498 |
|
|
| 1,735 |
|
|
| 125 |
|
|
| 1,498 |
|
|
| 1,860 |
|
|
| 3,358 |
|
|
| 355 |
|
| 2015 | (a) |
| 40 years |
146 Geary St. |
|
| 19,338 |
|
|
| 9,500 |
|
|
| 28,500 |
|
|
| (12,896 | ) |
|
| 5,243 |
|
|
| 19,861 |
|
|
| 25,104 |
|
|
| 1,608 |
|
| 2015 | (a) |
| 40 years |
1964 Union Street |
|
| 1,381 |
|
|
| 563 |
|
|
| 1,688 |
|
|
| 2,071 |
|
|
| 563 |
|
|
| 3,759 |
|
|
| 4,322 |
|
|
| 499 |
|
| 2016 | (c) |
| 40 years |
Restaurants at Fort Point |
|
| 5,855 |
|
|
| 1,041 |
|
|
| 10,905 |
|
|
| 182 |
|
|
| 1,041 |
|
|
| 11,087 |
|
|
| 12,128 |
|
|
| 1,967 |
|
| 2016 | (a) |
| 40 years |
717 N. Michigan |
|
| 5,796 |
|
|
| 8,675 |
|
|
| 4,235 |
|
|
| (2,744 | ) |
|
| 6,847 |
|
|
| 3,319 |
|
|
| 10,166 |
|
|
| 104 |
|
| 2016 | (a) |
| 40 years |
18 E. Broughton St. |
|
| 1,515 |
|
|
| 609 |
|
|
| 1,513 |
|
|
| 57 |
|
|
| 609 |
|
|
| 1,570 |
|
|
| 2,179 |
|
|
| 168 |
|
| 2018 | (a) |
| 40 years |
20 E. Broughton St. |
|
| 989 |
|
|
| 588 |
|
|
| 937 |
|
|
| 12 |
|
|
| 588 |
|
|
| 949 |
|
|
| 1,537 |
|
|
| 102 |
|
| 2018 | (a) |
| 40 years |
25 E. Broughton St. |
|
| 3,117 |
|
|
| 1,324 |
|
|
| 2,459 |
|
|
| 364 |
|
|
| 1,324 |
|
|
| 2,823 |
|
|
| 4,147 |
|
|
| 392 |
|
| 2018 | (a) |
| 40 years |
109 W. Broughton St. |
|
| 6,341 |
|
|
| 2,343 |
|
|
| 6,560 |
|
|
| 351 |
|
|
| 2,343 |
|
|
| 6,911 |
|
|
| 9,254 |
|
|
| 752 |
|
| 2018 | (a) |
| 40 years |
204-206 W. Broughton St. |
|
| 892 |
|
|
| 547 |
|
|
| 439 |
|
|
| 47 |
|
|
| 547 |
|
|
| 486 |
|
|
| 1,033 |
|
|
| 61 |
|
| 2018 | (a) |
| 40 years |
121
ACADIA REALTY TRUST
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
|
|
|
|
| Initial Cost |
|
|
|
|
| Amount at Which |
|
|
|
|
|
|
|
|
| |||||||||||||||||
Description and |
| Encumbrances |
|
| Land |
|
| Buildings & |
|
| Increase |
|
| Land |
|
| Buildings & |
|
| Total |
|
| Accumulated |
|
| Date of |
|
| Life on which | ||||||||
216-218 W. Broughton St. |
|
| 2,612 |
|
|
| 1,160 |
|
|
| 2,736 |
|
|
| 2,031 |
|
|
| 1,160 |
|
|
| 4,767 |
|
|
| 5,927 |
|
|
| 631 |
|
| 2018 | (a) |
| 40 years |
220 W. Broughton St. |
|
| 1,827 |
|
|
| 619 |
|
|
| 1,799 |
|
|
| 985 |
|
|
| 619 |
|
|
| 2,784 |
|
|
| 3,403 |
|
|
| 387 |
|
| 2018 | (a) |
| 40 years |
223 W. Broughton St. |
|
| 892 |
|
|
| 465 |
|
|
| 688 |
|
|
| 33 |
|
|
| 465 |
|
|
| 721 |
|
|
| 1,186 |
|
|
| 77 |
|
| 2018 | (a) |
| 40 years |
226-228 W. Broughton St. |
|
| - |
|
|
| 660 |
|
|
| 1,900 |
|
|
| 34 |
|
|
| 660 |
|
|
| 1,934 |
|
|
| 2,594 |
|
|
| 210 |
|
| 2018 | (a) |
| 40 years |
309/311 W. Broughton St. |
|
| 2,300 |
|
|
| 1,160 |
|
|
| 2,695 |
|
|
| 30 |
|
|
| 1,160 |
|
|
| 2,725 |
|
|
| 3,885 |
|
|
| 287 |
|
| 2018 | (a) |
| 40 years |
230-240 W. Broughton St. |
|
| 4,955 |
|
|
| 2,185 |
|
|
| 9,597 |
|
|
| 6 |
|
|
| 2,185 |
|
|
| 9,603 |
|
|
| 11,788 |
|
|
| 621 |
|
| 2020 | (a) |
| 40 years |
102 E. Broughton St. |
|
| — |
|
|
| — |
|
|
| 514 |
|
|
| — |
|
|
| — |
|
|
| 514 |
|
|
| 514 |
|
|
| 33 |
|
| 2020 | (a) |
| 40 years |
Fund V: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Plaza Santa Fe |
|
| 22,893 |
|
|
| — |
|
|
| 28,214 |
|
|
| 1,402 |
|
|
| — |
|
|
| 29,616 |
|
|
| 29,616 |
|
|
| 4,657 |
|
| 2017 | (a) |
| 40 years |
Hickory Ridge |
|
| 28,351 |
|
|
| 7,852 |
|
|
| 29,998 |
|
|
| 4,877 |
|
|
| 7,852 |
|
|
| 34,875 |
|
|
| 42,727 |
|
|
| 5,746 |
|
| 2017 | (a) |
| 40 years |
New Towne Plaza |
|
| 14,716 |
|
|
| 5,040 |
|
|
| 17,391 |
|
|
| 587 |
|
|
| 4,719 |
|
|
| 18,299 |
|
|
| 23,018 |
|
|
| 2,910 |
|
| 2017 | (a) |
| 40 years |
Fairlane Green |
|
| 32,877 |
|
|
| 18,121 |
|
|
| 37,143 |
|
|
| 3,174 |
|
|
| 18,121 |
|
|
| 40,317 |
|
|
| 58,438 |
|
|
| 5,424 |
|
| 2017 | (a) |
| 40 years |
Trussville Promenade |
|
| 28,831 |
|
|
| 7,587 |
|
|
| 34,285 |
|
|
| 50 |
|
|
| 7,587 |
|
|
| 34,335 |
|
|
| 41,922 |
|
|
| 4,518 |
|
| 2018 | (a) |
| 40 years |
Elk Grove Commons |
|
| 40,990 |
|
|
| 6,204 |
|
|
| 48,008 |
|
|
| 1,766 |
|
|
| 6,204 |
|
|
| 49,774 |
|
|
| 55,978 |
|
|
| 5,790 |
|
| 2018 | (a) |
| 40 years |
Hiram Pavilion |
|
| 28,341 |
|
|
| 13,029 |
|
|
| 25,446 |
|
|
| 557 |
|
|
| 13,029 |
|
|
| 26,003 |
|
|
| 39,032 |
|
|
| 3,537 |
|
| 2018 | (a) |
| 40 years |
Palm Coast Landing |
|
| 26,409 |
|
|
| 7,066 |
|
|
| 27,299 |
|
|
| 433 |
|
|
| 7,066 |
|
|
| 27,732 |
|
|
| 34,798 |
|
|
| 3,134 |
|
| 2019 | (a) |
| 40 years |
Lincoln Commons |
|
| 38,722 |
|
|
| 14,429 |
|
|
| 34,417 |
|
|
| 4,876 |
|
|
| 14,429 |
|
|
| 39,293 |
|
|
| 53,722 |
|
|
| 3,994 |
|
| 2019 | (a) |
| 40 years |
Landstown Commons |
|
| 60,743 |
|
|
| 10,222 |
|
|
| 69,005 |
|
|
| 4,116 |
|
|
| 10,222 |
|
|
| 73,121 |
|
|
| 83,343 |
|
|
| 6,647 |
|
| 2019 | (a) |
| 40 years |
Canton Marketplace |
|
| 31,801 |
|
|
| 11,883 |
|
|
| 34,902 |
|
|
| 1,187 |
|
|
| 11,883 |
|
|
| 36,089 |
|
|
| 47,972 |
|
|
| 1,350 |
|
| 2021 | (a) |
| 40 years |
Monroe Marketplace |
|
| 29,150 |
|
|
| 8,755 |
|
|
| 35,452 |
|
|
| 406 |
|
|
| 8,755 |
|
|
| 35,858 |
|
|
| 44,613 |
|
|
| 1,482 |
|
| 2021 | (a) |
| 40 years |
Midstate Mall |
|
| 42,400 |
|
|
| 13,062 |
|
|
| 43,290 |
|
|
| 463 |
|
|
| 13,062 |
|
|
| 43,753 |
|
|
| 56,815 |
|
|
| 1,543 |
|
| 2021 | (a) |
| 40 years |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Real Estate Under Development |
|
| 42,703 |
|
|
| 95,588 |
|
|
| 31,205 |
|
|
| 57,809 |
|
|
| 95,588 |
|
|
| 89,014 |
|
|
| 184,602 |
|
|
| — |
|
|
|
|
|
|
Debt of Assets Held for Sale |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
|
|
|
|
Unamortized Loan Costs |
|
| (7,621 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
|
|
|
|
Unamortized Premium |
|
| 343 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
|
|
|
|
Total |
| $ | 928,639 |
|
| $ | 929,089 |
|
| $ | 2,534,857 |
|
| $ | 789,064 |
|
| $ | 913,390 |
|
| $ | 3,339,620 |
|
| $ | 4,253,010 |
|
| $ | 725,143 |
|
|
|
|
|
|
Notes:
Initial Cost to Company | Amount at Which Carried at December 31, 2017 | |||||||||||||||||||||||||||||||||||||
Description and Location | Encumbrances | Land | Buildings & Improvements | Increase (Decrease) in Net Investments | Land | Buildings & Improvements | Total | Accumulated Depreciation | Date of Acquisition (a) Construction (c) | Life on which Depreciation in Latest Statement of Income is Compared | ||||||||||||||||||||||||||||
Wells Plaza Wells, ME | 3,368 | 1,892 | 2,585 | — | 1,892 | 2,585 | 4,477 | 124 | 2016 | (a) | 40 years | |||||||||||||||||||||||||||
717 N. Michigan Chicago, IL | 18,199 | 20,674 | 10,093 | — | 20,674 | 10,093 | 30,767 | 270 | 2016 | (c) | 40 years | |||||||||||||||||||||||||||
Shaw's Plaza North Windham, ME | 5,988 | 1,876 | 6,696 | — | 1,876 | 6,696 | 8,572 | 94 | 2017 | (a) | 40 years | |||||||||||||||||||||||||||
Lincoln Place Fairview Heights, IL | 23,100 | 7,149 | 22,201 | 55 | 7,149 | 22,256 | 29,405 | 545 | 2017 | (a) | 40 years | |||||||||||||||||||||||||||
Fund V: | ||||||||||||||||||||||||||||||||||||||
Plaza Santa Fe Santa Fe, NM | — | — | 28,214 | — | — | 28,214 | 28,214 | 452 | 2017 | (a) | 40 years | |||||||||||||||||||||||||||
Hickory Ridge Hickory, NC | 28,613 | 7,852 | 29,998 | — | 7,852 | 29,998 | 37,850 | 312 | 2017 | (a) | 40 years | |||||||||||||||||||||||||||
New Towne Plaza Canton, MI | — | 5,040 | 17,391 | 1 | 5,040 | 17,392 | 22,432 | 208 | 2017 | (a) | 40 years | |||||||||||||||||||||||||||
Fairlane Green Allen Park, MI | — | 18,121 | 37,626 | — | 18,121 | 37,626 | 55,747 | — | 2017 | (a) | 40 years | |||||||||||||||||||||||||||
Real Estate Under Development | 47,061 | 88,108 | 31,473 | 54,122 | 88,108 | 85,594 | 173,702 | — | ||||||||||||||||||||||||||||||
Debt of Assets Held for Sale | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Unamortized Loan Costs | (12,943 | ) | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||
Unamortized Premium | 856 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Total | $ | 909,174 | $ | 743,847 | $ | 1,960,389 | $ | 762,245 | $ | 746,943 | $ | 2,719,539 | $ | 3,466,482 | $ | 339,862 |
The following table reconciles the activity for real estate properties from January 1, 20152020 to
Year Ended December 31, | ||||||||||||
2017 | 2016 | 2015 | ||||||||||
Balance at beginning of year | $ | 3,382,000 | $ | 2,736,283 | $ | 2,208,595 | ||||||
Other improvements | 55,763 | 152,129 | 162,760 | |||||||||
Property acquisitions | 179,292 | 761,400 | 418,396 | |||||||||
Property dispositions or held for sale assets | (189,895 | ) | (134,332 | ) | (66,359 | ) | ||||||
Prior year purchase price allocation adjustments | — | (9,844 | ) | — | ||||||||
Deconsolidation of previously consolidated investments | — | (123,636 | ) | — | ||||||||
Consolidation of previously unconsolidated investments | 39,322 | — | 12,891 | |||||||||
Balance at end of year | $ | 3,466,482 | $ | 3,382,000 | $ | 2,736,283 |
|
| Year Ended December 31, |
| |||||||||
|
| 2022 |
|
| 2021 |
|
| 2020 |
| |||
|
|
|
|
|
|
|
|
|
| |||
Balance at beginning of year |
| $ | 4,071,607 |
|
| $ | 4,011,326 |
|
| $ | 3,960,411 |
|
Improvements and other |
|
| 50,696 |
|
|
| 32,070 |
|
|
| 71,409 |
|
Property acquisitions |
|
| 234,557 |
|
|
| 172,558 |
|
|
| 19,109 |
|
Property dispositions or held for sale assets |
|
| (125,933 | ) |
|
| (134,422 | ) |
|
| (19,659 | ) |
Right-of-use assets - finance leases obtained and reclassified |
|
| — |
|
|
| — |
|
|
| (76,965 | ) |
Capital lease reclassified as Right-of-use assets - finance lease |
|
| — |
|
|
| — |
|
|
| — |
|
Consolidation of previously unconsolidated investments |
|
| 55,394 |
|
|
| — |
|
|
| 129,863 |
|
Impairment charges |
|
| (33,311 | ) |
|
| (9,925 | ) |
|
| (72,842 | ) |
Balance at end of year |
| $ | 4,253,010 |
|
| $ | 4,071,607 |
|
| $ | 4,011,326 |
|
122
ACADIA REALTY TRUST
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
The following table reconciles accumulated depreciation from January 1, 20152020 to
|
| Year Ended December 31, |
| |||||||||
|
| 2022 |
|
| 2021 |
|
| 2020 |
| |||
|
|
|
|
|
|
|
|
|
| |||
Balance at beginning of year |
| $ | 648,461 |
|
| $ | 573,364 |
|
| $ | 478,991 |
|
Depreciation related to real estate |
|
| 98,414 |
|
|
| 90,456 |
|
|
| 101,849 |
|
Property dispositions or held for sale assets |
|
| (21,732 | ) |
|
| (15,359 | ) |
|
| (939 | ) |
Right-of-use assets - finance leases reclassified |
|
| — |
|
|
| — |
|
|
| (6,537 | ) |
Balance at end of year |
| $ | 725,143 |
|
| $ | 648,461 |
|
| $ | 573,364 |
|
123
Year Ended December 31, | ||||||||||||
2017 | 2016 | 2015 | ||||||||||
Balance at beginning of year | $ | 287,066 | $ | 298,703 | $ | 256,015 | ||||||
Depreciation related to real estate | 73,268 | 49,269 | 49,775 | |||||||||
Property dispositions | (20,472 | ) | (27,829 | ) | (7,087 | ) | ||||||
Deconsolidation of previously consolidated investments | — | (33,077 | ) | — | ||||||||
Balance at end of year | $ | 339,862 | $ | 287,066 | $ | 298,703 |
ACADIA REALTY TRUST
SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE
December 31, 2017
(in thousands)
Description | Effective Interest Rate | Final Maturity Date | Face Amount of Notes Receivable | Net Carrying Amount of Notes Receivable as of December 31, 2017 | ||||||||
First Mortgage Loan | 6.0% | 6/1/2018 | $ | 15,000 | $ | 15,000 | ||||||
First Mortgage Loan | LIBOR + 7.1% | 6/25/2018 | 26,000 | 26,000 | ||||||||
First Mortgage Loan | 8.1% | 4/30/2019 | 153,400 | 60,695 | ||||||||
Zero Coupon Loan | 2.5% | 5/31/2020 | 29,793 | 31,778 | ||||||||
Mezzanine Loan | 18.0% | 7/1/2020 | 3,007 | 5,106 | ||||||||
Preferred Equity | 15.3% | 2/3/2021 | 14,000 | 15,250 | ||||||||
Total | $ | 241,200 | $ | 153,829 |
Description |
| Effective |
| Final Maturity |
| Face Amount |
|
| Net Carrying Amount of |
| ||
First Mortgage Loan |
| 6.00% |
| 4/1/2020 |
| $ | 17,810 |
|
| $ | 17,801 |
|
Mezzanine Loan |
| 9.25% |
| 1/9/2024 |
|
| 54,000 |
|
|
| 54,000 |
|
First Mortgage Loan |
| 6.56% |
| 9/17/2024 |
|
| 43,000 |
|
|
| 42,000 |
|
Other |
| 4.65% |
| 4/12/2026 |
|
| 6,000 |
|
|
| 6,000 |
|
Mezzanine Loan |
| 8.00% |
| 12/11/2027 |
|
| 5,000 |
|
|
| 5,000 |
|
Total |
|
|
|
|
| $ | 125,810 |
|
|
| 124,801 |
|
Allowance for credit loss |
|
|
|
|
|
|
|
|
| (898 | ) | |
Net carrying amount of notes receivable |
|
|
|
|
|
|
|
| $ | 123,903 |
|
The Company monitors the credit quality of its notes receivable on an ongoing basis and considers indicators of credit quality such as loan payment activity, the estimated fair value of the underlying collateral, the seniority of the Company's loan in relation to other debt secured by the collateral, the personal guarantees of the borrower and the prospects of the borrower.
The following table reconciles the activity for loans on real estate from January 1, 20152020 to
|
| Reconciliation of Loans on Real Estate |
| |||||||||
|
| Year Ended December 31, |
| |||||||||
|
| 2022 |
|
| 2021 |
|
| 2020 |
| |||
|
|
|
|
|
|
|
|
|
| |||
Balance at beginning of year |
| $ | 159,638 |
|
| $ | 102,100 |
|
| $ | 114,943 |
|
Additions |
|
| — |
|
|
| 58,000 |
|
|
| 59,585 |
|
Repayments |
|
| (29,531 | ) |
|
| — |
|
|
| — |
|
Conversion of OP Units |
|
| — |
|
|
| (462 | ) |
|
| — |
|
Conversion to real estate through receipt of deed or through foreclosure |
|
| (5,306 | ) |
|
| — |
|
|
| (72,428 | ) |
Total |
| $ | 124,801 |
|
| $ | 159,638 |
|
| $ | 102,100 |
|
|
|
|
|
|
|
|
|
|
| |||
Allowance for credit loss |
|
| (898 | ) |
|
| (5,752 | ) |
|
| (1,218 | ) |
Balance at end of year |
| $ | 123,903 |
|
| $ | 153,886 |
|
| $ | 100,882 |
|
Reconciliation of Loans on Real Estate | |||||||||||
Year Ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
Balance at beginning of year | $ | 276,163 | $ | 147,188 | $ | 102,286 | |||||
Additions | 11,371 | 171,794 | 48,500 | ||||||||
Disposition of air rights through issuance of notes | — | — | 29,539 | ||||||||
Repayments | (32,000 | ) | (42,819 | ) | (15,984 | ) | |||||
Conversion to real estate through receipt of deed or through foreclosure | (101,705 | ) | — | (13,386 | ) | ||||||
Other | — | — | (3,767 | ) | |||||||
Balance at end of year | $ | 153,829 | $ | 276,163 | $ | 147,188 |
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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES.
None.
ITEM 9A. CONTROLS AND PROCEDURES.
Disclosure Controls and Procedures
We conducted an evaluation, under the supervision and with the participation of management including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of December 31, 20172022 to provide reasonable assurance that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
Management’s Report on Internal Control Over Financial Reporting
Management of Acadia Realty Trust is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in the Securities Exchange Act of 1934 Rule 13(a)-15(f). Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an assessment of the effectiveness of our internal control over financial reporting as of December 31, 20172022 as required by the Securities Exchange Act of 1934 Rule 13(a)-15(c). In making this assessment, we used the criteria set forth in the framework in Internal Control–Integrated Framework (2013 Framework) issued by the Committee of Sponsoring Organizations of the Treadway Commission (the “COSO criteria”). Based on our evaluation under the COSO criteria, our management concluded that our internal control over financial reporting was effective as of December 31, 20172022 to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accordance with U.S. generally accepted accounting principles.
BDO USA, LLP, an independent registered public accounting firm that audited our Financial Statements included in this Annual Report, has issued an attestation report on our internal control over financial reporting as of December 31, 2017,2022, which also appears in paragraph (b) of this Item 9A.
Acadia Realty Trust
Rye, New York
March 1, 2023
Remediation Efforts of Prior Year Material Weakness
We disclosed a material weakness in our internal control over financial reporting in our Form 10-K for the year ended December 31, 2021. During 2022, we implemented new and enhanced existing internal controls, related to evaluating the accounting treatment of less-than-wholly-owned investments to remediate the material weakness.
As a result of the remediation efforts, we have concluded that the material weakness has been remediated as of December 31, 2022.
Changes in Internal Control Over Financial Reporting
During the three months ended December 31, 2017,2022, other than the remediation of the material weakness described above, there were no changes in the Company’s internal control over financial reporting that materially affected or are reasonably likely to materially affect the Company’s internal control over financial reporting.
125
Report of Independent Registered Public Accounting Firm
Shareholders and Board of Trustees of
Acadia Realty Trust
Rye, New York
Opinion on Internal Control over Financial Reporting
We have audited Acadia Realty Trust and subsidiaries’Trust’s (the “Company”“Company’s”) internal control over financial reporting as of December 31, 2017,2022, based on criteria established in
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated balance sheets of the Company as of December 31, 20172022 and 2016, and2021, the related consolidated statements of income,operations, comprehensive income (loss), changes in shareholders’ equity, and cash flows for each of the three years in the period ended December 31, 2017,2022, and the related notes and financial statement schedules, and our report dated February 27, 2018,March 1, 2023 expressed an unqualified opinion thereon.
Basis for Opinion
The Company’s management is responsbileresponsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Item 9A, Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit of internal control over financial reporting in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ BDO USA, LLP
New York, New York
March 1, 2023
126
ITEM 9B. OTHER INFORMATION.
None.
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS.
None.
PART III
In accordance with the rules of the SEC, certain information required by Part III is omitted and is incorporated by reference into this Form 10-KReport from our definitive proxy statement relating to our 20182023 annual meeting of stockholdersshareholders (our “2018“2023 Proxy Statement”) that we intend to file with the SEC no later than April 30, 2018.
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
The information under the following headings in the 20182023 Proxy Statement is incorporated herein by reference:
ITEM 11. EXECUTIVE COMPENSATION.
The information under the following headings in the 20182023 Proxy Statement is incorporated herein by reference:
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
The information under the heading “SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT” in the 20182023 Proxy Statement is incorporated herein by reference.
The information under
ItemThe information under the following headings in the 20182023 Proxy Statement is incorporated herein by reference:
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.
The information under the heading “AUDIT COMMITTEE INFORMATION” in the 20182023 Proxy Statement is incorporated herein by reference.
127
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
1. |
2. | Financial Statement Schedule: See “Schedule II—Valuation and Qualifying Accounts” at Item 8. |
3. | Financial Statement Schedule: See “Schedule III—Real Estate and Accumulated Depreciation” at Item 8. |
4. | Financial Statement Schedule: See “Schedule IV—Mortgage Loans on Real Estate” at Item 8. |
5. | For the year ended December 31, 2022, 840 N. Michigan Avenue is considered a significant subsidiary of the Company based upon reaching certain income thresholds per the SEC Regulation S-X Rule 3-09. As such, the Company has included audited financial statements of 840 N. Michigan Avenue as Exhibit 99.3 to this annual report on Form 10-K. Additionally, the Company’s Equity in earnings of unconsolidated affiliates from 840 N. Michigan Avenue for the year ended December 31, 2022, exceeded 10% of the Company’s income from continuing operations per the SEC Regulation S-X Rule 4-08(g). As the Company has included separate audited financial statements for the investee in its annual report, it has not separately disclosed the summarized financial information of the investee. |
6. | Exhibits: |
The following is an index to all exhibits including (i) those filed with this Annual Report on Form 10-K and (ii) those incorporated by reference herein:
Exhibit | Description | Method of Filing | ||
Declaration of Trust of the Company | Incorporated by reference to | |||
First Amendment to Declaration of Trust of the Company | Incorporated by reference to | |||
Second Amendment to Declaration of Trust of the Company | Incorporated by reference to | |||
Third Amendment to Declaration of Trust of the Company | Incorporated by reference to | |||
Fourth Amendment to Declaration of Trust | Incorporated by reference to | |||
Fifth Amendment to Declaration of Trust | Incorporated by reference to | |||
Sixth Amendment to Declaration of | Incorporated by reference to | |||
Articles Supplementary | Incorporated by reference to | |||
Amended and Restated | Incorporated by reference to | |||
Description of Acadia Realty Trust Securities Registered Under Section 12 of the | Filed herewith | |||
Acadia Realty Trust 2020 Share Incentive Plan | Incorporated by reference to |
128
Description of | Incorporated by reference to page 20 to the Company’s 2009 Annual Proxy Statement filed with the SEC April 9, 2009. | |||
Amended and Restated Employment | Incorporated by reference to | |||
129
Exhibit | Description | Method of Filing | ||
Form of Second Amended and Restated Severance Agreement, effective as of February 26, 2018, with each of: | ||||
Incorporated by reference to | ||||
Form of 2018 Long-Term Incentive Plan Award Agreement (time- and | ||||
Incorporated by reference to | ||||
Form of Assignments and Assumptions of Carried Interest with respect to the Company's Long-Term Incentive Alignment Program | Incorporated by reference to | |||
Form of Omnibus Amendment to the Series of Assignments and Assumptions of Carried Interest with respect to the Company's Long-Term Incentive Alignment Program | Incorporated by reference to | |||
Form of 2018 Long-Term Incentive Plan Award Agreement | Incorporated by reference to Exhibit 10.13 to the Company's Annual Report on Form 10-K for the year ended December 31, 2017. | |||
Form of | Incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2020. | |||
Form of Long-Term Incentive Plan Award Agreement (Time and Performance Based) (Chief Executive Officer) | Incorporated by reference to Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2020. | |||
Form of Long-Term Incentive Plan Award Agreement (Time and Performance Based) (SVP/EVP) | Filed herewith | |||
Form of Long-Term Incentive Plan Award Agreement (Time and Performance Based) (Chief Executive Officer) | Filed herewith | |||
Second Amended and Restated Credit Agreement dated as of June 29, 2021, by and among Acadia Realty Limited Partnership, as borrower, Acadia Realty Trust and certain subsidiaries of Acadia Realty Limited Partnership from time to time party thereto, as guarantors, Bank of America, N.A., as administrative agent, Wells Fargo Bank, National Association, Truist Bank, and PNC Bank, National Association, as syndication agents, BofA Securities, Inc. and Wells Fargo Securities, LLC, as joint bookrunners, and BofA Securities, Inc., Wells Fargo Securities, LLC, Truist Bank and PNC Capital Markets LLC, as joint lead arrangers and the lenders party thereto | Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on July 2, 2021. | |||
First Amendment to the Second Amended and Restated Credit Agreement dated as of March 3, 2022, by and among Acadia Realty Limited Partnership, as borrower, Acadia Realty Trust and certain subsidiaries of Acadia Realty Limited Partnership from time to time party thereto, as guarantors, the Lenders and L/C Issuers from time to time party thereto, and Bank of America, N.A., as administrative agent | Filed herewith | |||
Second Amendment to the Second Amended and Restated Credit Agreement dated as of December 21, 2022, by and among Acadia Realty Limited Partnership, as borrower, Acadia Realty Trust and certain subsidiaries of Acadia Realty Limited Partnership from time to time party thereto, as guarantors, the Lenders and L/C Issuers from time to time | Filed herewith |
130
party thereto, and Bank of America, N.A., as administrative agent |
Credit Agreement dated as of April 6, 2022, by and among Acadia Realty Trust, Acadia Realty Limited Partnership, Bank of America, N.A., as administrative agent, BofA Securities, Inc., as sole lead arranger and sole bookrunner and the lenders party thereto | Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on April 11, 2022. | |||
Exhibit | Description | Method of Filing | ||
List of Subsidiaries of Acadia Realty Trust | Filed herewith | |||
Consent of Registered Public Accounting Firm | Filed herewith | |||
Consent of Registered Public Accounting Firm | Filed herewith | |||
Certification of Chief Executive Officer pursuant to rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | Filed herewith | |||
Certification of Chief Financial Officer pursuant to rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | Filed herewith | |||
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | Furnished herewith | |||
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | Furnished herewith | |||
Amended and Restated Agreement of Limited Partnership | Incorporated by reference to | |||
Certificate of Designation of Series A Preferred Operating Partnership Units of Limited Partnership Interest of Acadia Realty Limited Partnership | Incorporated by reference to | |||
840 North Michigan Avenue, Tenant-in-Common Interests Combined Financial Statements for the Years Ended December 31, 2022 and 2021 and Independent Auditor’s Report | Filed herewith | |||
101.INS | XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | Filed herewith | ||
101.SCH | Inline XBRL Taxonomy Extension Schema Document | Filed herewith | ||
101.CAL | Inline XBRL Taxonomy Extension Calculation Document | Filed herewith | ||
101.DEF | Inline XBRL Taxonomy Extension Definitions Document | Filed herewith | ||
101.LAB | Inline XBRL Taxonomy Extension Labels Document | Filed herewith | ||
101.PRE | Inline XBRL Taxonomy Extension Presentation Document | Filed herewith |
104 | Cover Page Interactive Data File (formatted as |
inline XBRL and contained in Exhibit 101) | Filed herewith | |||
131
ITEM 16. Form 10-K SUMMARY.
None.
132
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act, of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereto duly authorized.
ACADIA REALTY TRUST | ||
(Registrant) | ||
By: | /s/ Kenneth F. Bernstein | |
Kenneth F. Bernstein | ||
Chief Executive Officer, | ||
President and Trustee | ||
By: | /s/ John Gottfried | |
John Gottfried | ||
Executive Vice President and | ||
Chief Financial Officer | ||
By: | /s/ Richard Hartmann | |
Richard Hartmann | ||
Senior Vice President and | ||
Chief Accounting Officer |
Dated: February 27, 2018
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
Signature | Title | Date | ||
/s/ Kenneth F. Bernstein | Chief Executive Officer, President and Trustee (Principal Executive Officer) | March 1, 2023 | ||
(Kenneth F. Bernstein) | ||||
/s/ John Gottfried | Executive Vice President and Chief Financial Officer | March 1, 2023 | ||
(John Gottfried) | ||||
/s/ Richard Hartmann | Senior Vice President and Chief Accounting Officer | March 1, 2023 | ||
(Richard Hartmann) | ||||
/s/ Douglas Crocker II | Trustee | March 1, 2023 | ||
(Douglas Crocker II) | ||||
/s/ Mark A. Denien | Trustee | March 1, 2023 | ||
(Mark A. Denien) | ||||
/s/ Lorrence T. Kellar | Trustee | March 1, 2023 | ||
(Lorrence T. Kellar) | ||||
/s/ | Trustee | March 1, 2023 | ||
(Kenneth A. McIntyre) | ||||
/s/ William T. Spitz | Trustee | March 1, 2023 | ||
(William T. Spitz) | ||||
/s/ Lynn Thurber | Trustee | March 1, 2023 | ||
(Lynn Thurber) | ||||
/s/ Lee S. Wielansky | Trustee | March 1, 2023 | ||
(Lee S. Wielansky) | ||||
133
/s/ Hope B. Woodhouse | Trustee | March 1, 2023 | ||
(Hope B. Woodhouse) | ||||
/s/ C. David Zoba | Trustee | March 1, 2023 | ||
(C. David Zoba) | ||||
134