ACADIA REALTY TRUST
For the period ended Jun 30, 2024. Filed Jul 31, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Jul 31, 2024
AKR$19.80+0.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-04-30.
0000950170-24-050536
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-07-31.
0000950170-24-088594
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 122 previous paragraphs and 167 current paragraphs.
61 unchanged; 41 reworded; 57 added; 18 removed; 2 previous and 8 current paragraphs rearranged.
Tables are not compared: 9 previous and 10 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (57)
Current report
Acadia Realty Trust (the “Trust”, collectively with its consolidated subsidiaries, the “Company”), a Maryland real estate investment trust (“REIT”), is a fully-integrated equity REIT focused on the ownership, acquisition, development, and management of retail properties located primarily in high-barrier-to-entry, supply-constrained, densely 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 June 30, 2024 and December 31, 2023, the Trust controlled approximately 96% and 95%, respectively, 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.
Current report
We own and operate a high-quality core real estate portfolio ("Core" or "Core Portfolio") in the nation's most dynamic retail corridors, along with an investment management platform (“Investment Management”). As part of the Investment Management platform, we have active investments through the following opportunity funds, including: 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, collectively with Fund II, Fund III and Fund IV, “the Funds”).
Current report
Generally, we focus on the following strategies to enhance the value of our Company and provide long-term, profitable growth:
Current report
maximize internal growth of the Core Portfolio through constant optimization of tenant mix, time-sensitive and cost-effective re-tenanting, and active management of our properties;
Current report
pursue accretive acquisition opportunities for the Core Portfolio with a focus on high-growth, residentially-dense and destination urban retail shopping corridors;
Current report
capitalize on accretive development/redevelopment opportunities and re-tenanting activities in order to maximize the value of Core properties;
Current report
within Investment Management, pursue a wide range of investments in various co-investment vehicles while matching individual investments and return profiles with strategic institutional partners;
Current report
Segment Reporting
Current report
We renamed our historical Funds segment as the Investment Management segment. No prior period information was recast and the designation change did not impact our condensed consolidated financial statements. Refer to Note 12.
Current report
Investments
Current report
During the six months ended June 30, 2024, we deconsolidated one Core property, two consolidated Investment Management properties and one outparcel, and one unconsolidated investment, as follows:
Current report
On April 3, 2024, Fund IV sold its consolidated 2207 and 2208-2216 Fillmore Street properties for a total sales price of $14.1 million and repaid the related $6.4 million of debt at closing. Fund IV recognized a gain of $2.4 million, of which the Company’s proportionate share was $0.5 million (Note 2).
Current report
On May 16, 2024, we sold a 95% interest in the Shops at Grand property for a total of $48.3 million and retained a 5% ownership interest through an investment in a newly formed joint venture which was fair valued at $2.4 million. As we now have a noncontrolling interest, we recognized a loss on deconsolidation of $2.2 million related to transaction costs (Note 2).
Current report
On June 28, 2024, Fund V sold an outparcel at Canton Marketplace for $2.2 million and recognized a gain of $0.6 million, of which the Company’s proportionate share was $0.1 million (Note 2).
Current report
On June 28, 2024, Fund IV sold its unconsolidated Paramus Plaza property for a total of $36.8 million and repaid the related debt of $27.9 million. Fund IV recognized a gain of $4.1 million, of which the Company’s proportionate share was $1.0 million (Note 4).
Current report
In July 2024, the Company acquired a shopping center, the Walk at Highwoods Preserve, located in Tampa, Florida for $30.7 million, inclusive of transaction costs (Note 16).
Current report
extended a Core mortgage loan of $60.0 million (excluding principal reductions of $2.5 million);
Current report
repaid two consolidated Investment Management mortgage loans of $6.4 million upon disposition of the properties (Note 2);
Current report
repaid a portion of one consolidated Investment Management mortgage loan of $1.5 million in connect with an outparcel disposition (Note 2);
Current report
extended two Investment Management mortgage loans totaling $67.7 million;
Current report
repaid one unconsolidated Investment Management mortgage loan of $27.9 million upon disposition of the property (Note 4); and
Current report
Structured Financing Investments
Current report
During the six months ended June 30, 2024, we originated one Core note receivable of $7.6 million to a related party, which is collateralized by the borrower’s equity interest in various partnerships, bears interest at 12% and matures on December 31, 2025.
Current report
Common Shares
Current report
During the six months ended June 30, 2024, we sold 1,739,288 Common Shares under our ATM Program generating $29.9 million of net proceeds after related issuance costs (Note 10).
Current report
Comparison of Results for the Three Months Ended June 30, 2024 to the Three Months Ended June 30, 2023
Current report
Revenues for our Core Portfolio decreased $7.5 million for the three months ended June 30, 2024 compared to the prior year period primarily due to the accelerated amortization of a below market lease for a bankrupt tenant in 2023.
Current report
Depreciation and amortization for our Core Portfolio decreased $2.0 million for the three months ended June 30, 2024 compared to the prior year period primarily due to the acceleration of in-place lease intangible assets for a bankrupt tenant in 2023.
Current report
Loss on disposition of property for our Core Portfolio relates to the deconsolidation of the Shops at Grand property in 2024 (Note 2).
Current report
Interest expense for our Core Portfolio decreased $1.1 million for the three months ended June 30, 2024 compared to the prior year period primarily due to lower average outstanding borrowings in 2024.
Current report
The results of operations for our Investment Management segment are depicted in the table above under the headings labeled “IM.” Segment net income attributable to Acadia for Investment Management increased $1.1 million for the three months ended June 30, 2024 compared to the prior year period as a result of the changes described below.
Current report
Revenues for Investment Management increased $4.8 million for the three months ended June 30, 2024 compared to the prior year period primarily due to property acquisitions in the second half of 2023.
Current report
Depreciation and amortization for Investment Management increased $2.3 million for the three months ended June 30, 2024 compared to the prior year period primarily due to property acquisitions in the second half of 2023.
Current report
Gain on disposition of properties for Investment Management increased $3.0 million for the three months ended June 30, 2024 compared to the prior year period due to the sale of two properties at Fund IV and an outparcel at Fund V (Note 2).
Current report
Equity in earnings (losses) of unconsolidated affiliates for Investment Management increased $6.2 million for the three months ended June 30, 2024 compared to the prior year period primarily due to the gain on sale of Paramus Plaza in 2024 (Note 4).
Current report
Comparison of Results for the Six Months Ended June 30, 2024 to the Six Months Ended June 30, 2023
Current report
Core Portfolio
Current report
Depreciation and amortization for our Core Portfolio decreased $2.5 million for the six months ended June 30, 2024 compared to the prior year period primarily due to the write-off of in-place lease intangible assets for a bankrupt tenant in 2023.
Current report
Loss on disposition of property for our Core Portfolio relates to the deconsolidation of the Shops at Grand property in 2024 (Note 2).
Current report
Interest expense for our Core Portfolio decreased $1.7 million for the six months ended June 30, 2024 compared to the prior year period due to lower average outstanding borrowings in 2024.
Showing the first 40 of 57 passages. Open the source sections for the rest.
Removed paragraphs (18)
Previous report
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. Generally, we focus on the following fundamentals to achieve this objective:
Previous report
Own and operate a Core Portfolio of high-quality retail properties located primarily in high-barrier-to-entry, densely populated metropolitan areas and create value through accretive development and re-tenanting activities coupled with the acquisition of high-quality assets that have the long-term potential to outperform the asset class as part of our Core asset recycling and acquisition initiative.
Previous report
Generate additional external growth through an opportunistic yet disciplined acquisition program within our Funds. We target transactions with high inherent opportunity for the creation of additional value through:
Previous report
o
Previous report
value-add investments in street retail properties, located in established and “next generation” submarkets, with re-tenanting or repositioning opportunities,
Previous report
o
Previous report
opportunistic acquisitions of well-located real-estate anchored by distressed retailers, and
Previous report
o
Previous report
other opportunistic acquisitions that may include high-yield acquisitions and purchases of distressed debt.
Previous report
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.
Previous report
extended two Fund mortgages totaling $67.7 million; and
Previous report
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 $10.8 million for the three months ended March 31, 2024 compared to the prior year period as a result of the changes described below.
Previous report
Structured Financing
Previous report
Interest and other income for the Structured Financing portfolio increased $0.4 million for the three months ended March 31, 2024 compared to the prior year period primarily due to new loans issued during the three months ended March 31, 2024.
Previous report
Fund Capital
Previous report
Other Transactions
Previous report
Inflation and Economic Condition Considerations
Previous report
The three months ended March 31, 2024, and the year ended December 31, 2023, were impacted by significant volatility in global markets, largely driven by rising inflation and interest rates, slowing economic growth, geopolitical uncertainty and instability in the banking sector following multiple bank failures. Central banks have responded to rapidly rising inflation by tightening monetary policies that are likely to create headwinds to economic growth. The Federal Reserve has raised interest rates eleven times since January 2022, and has signaled that further interest rate increases may be forthcoming in 2024. The rate hikes enacted by the Federal Reserve have had a significant impact on interest rate indexes such as SOFR and the Prime Rate. As of March 31, 2024, approximately 81.0% of our outstanding debt is fixed or effectively fixed rate with the remaining 19.0% indexed to SOFR or Prime plus an applicable margin per the loan agreement. As of March 31, 2024, we were counterparty to 36 interest rate swap agreements and four 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.
Reworded paragraphs (41)
Previous wording
Maintain a strong and flexible balance sheet through conservative financial practices while ensuring access to sufficient capital to fund future growth.
Current wording
maintain a strong and flexible balance sheet to support our business activities through conservative financial practices while ensuring access to sufficient capital to fund future growth.
Previous wording
As of March 31, 2024, we own or have an ownership interest in 201 properties held through 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 suburban shopping centers. Our Funds are investment vehicles through which our Operating Partnership and outside institutional investors invest in primarily opportunistic and value-add retail real estate. Currently, we have active investments in four Funds. A summary of our wholly-owned and partially-owned retail properties and their physical occupancies as of March 31, 2024 is as follows:
Current wording
As of June 30, 2024, we own or have an ownership interest in 199 properties held through our Core Portfolio and Investment Management platform. 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 the Investment Management platform. These properties primarily consist of street and urban retail, and suburban shopping centers. The Investment Management platform consists of investment vehicles through which our Operating Partnership and outside institutional investors invest in primarily opportunistic and value-add retail real estate. 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.
Previous wording
SIGNIFICANT DEVELOPMENTS DURING THE THREE MONTHS ENDED MARCH 31, 2024 AND SUBSEQUENT EVENTS
Current wording
SIGNIFICANT DEVELOPMENTS DURING THE SIX MONTHS ENDED JUNE 30, 2024 AND SUBSEQUENT EVENTS
Previous wording
During the three months ended March 31, 2024, we (Note 7):
Current wording
During the six months ended June 30, 2024, we (Note 7):
Previous wording
repaid a Core mortgage totaling $7.3 million at maturity;
Current wording
repaid a Core mortgage loan totaling $7.3 million at maturity;
Previous wording
entered into a new Fund mortgage of $43.4 million;
Current wording
entered into a new Investment Management mortgage loan of $43.4 million;
Previous wording
made scheduled principal payments totaling $1.8 million.
Current wording
made scheduled principal payments totaling $6.1 million.
Previous wording
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. We also continue to see consumer confidence and we expect to continue to add value to our portfolio through executing on our current leasing momentum, our active development and redevelopment projects, and leasing pipeline.
Current wording
In recent years, inflation levels were elevated resulting in increased costs for certain goods and services and cost of borrowing. Inflation began to decrease in the second quarter of 2023 but still remains at elevated levels compared to the years preceding 2021. Most of our leases include contractual rent escalations and 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. 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. We also continue to see rising consumer confidence and we expect to continue to add value to our portfolio by executing on our current leasing momentum, our active development and redevelopment projects, and leasing pipeline.
Previous wording
The three months ended March 31, 2024 and the year ended December 31, 2023 were impacted by significant volatility in global markets, largely driven by rising inflation, rising interest rates, slowing economic growth, geopolitical uncertainty and instability in the banking sector following multiple bank failures. The rate hikes enacted by the Federal Reserve have had a significant impact on interest rate indexes such as SOFR and the Prime Rate and cost of borrowing. We manage our exposure to fluctuations in interest rates primarily through the use of fixed-rate debt and interest rate swap and cap agreements. 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. We also continue to see consumer confidence and we expect to continue to add value to our portfolio by executing on our current leasing momentum, our active development and redevelopment projects, and leasing pipeline. Except for increased interest costs, we have not experienced any material negative impacts at this time, and we intend to actively manage our business to respond to the ongoing economic and social impact from such events.
Current wording
In response to the rising rate of inflation, the Federal Reserve raised benchmark interest rates, resulting in an increase in the cost of borrowing, which could remain at elevated levels in the near-term and long-term. The rate hikes enacted by the Federal Reserve have had a significant impact on interest rate indexes such as SOFR and the Prime Rate and cost of borrowing. We manage our exposure to fluctuations in interest rates primarily through the use of fixed-rate debt and interest rate swap and cap agreements, which qualify for, and are designated as, hedging instruments. Except for increased interest costs, we have not experienced any material negative impacts at this time, and we intend to actively manage our business to respond to the ongoing economic and social impact from such events.
Previous wording
See Note 12 in the Notes to Condensed Consolidated Financial Statements for an overview of our three reportable segments.
Current wording
See Note 12 in the Notes to Condensed Consolidated Financial Statements for an overview of our three reportable segments: Core Portfolio (“Core”), Investment Management (“IM”) and Structured Financing (“SF”).
Previous wording
Comparison of Resultsof operations by reportable segment for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 are summarized in the table below (in millions, totals may not add due to rounding):
Current wording
The results of operations by reportable segment for the three months ended June 30, 2024 compared to the three months ended June 30, 2023 are summarized in the table below (in millions, totals may not add due to rounding):
Previous wording
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 $0.5 million for the three months ended March 31, 2024 compared to the prior year period as a result of the changes further described below.
Current wording
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 decreased $9.6 million for the three months ended June 30, 2024 compared to the prior year period as a result of the changes further described below.
Previous wording
Realized and unrealized holding (losses) gains on investments and other for our Core Portfolio decreased $3.4 million for the three months ended March 31, 2024 compared to the prior year period primarily due to a change in the mark-to-market adjustment on the Investment in Albertsons. In January 2023, following the expiration of the lock-up period and distribution of approximately 2.5 million shares by Mervyns II to its partners, the Company received 1.6 million shares of Albertsons, the remaining amount of which are now included in the Core Portfolio (Note 4, Note 8).
Current wording
Realized and unrealized holding (losses) gains on investments and other for our Core Portfolio decreased $4.0 million for the three months ended June 30, 2024 compared to the prior year period primarily due to a change in the mark-to-market adjustment on the Investment in Albertsons (Note 8).
Previous wording
Funds (all amounts below are consolidated amounts and are not representative of our proportionate share)
Current wording
Investment Management (all amounts below are consolidated amounts and are not representative of our proportionate share)
Previous wording
Interest expense for the Funds increased $2.8 million for the three months ended March 31, 2024 compared to the prior year period primarily due to higher average interest rates in 2024.
Current wording
Interest expense for Investment Management increased $2.5 million for the three months ended June 30, 2024 compared to the prior year period primarily due to higher average interest rates in 2024.
Previous wording
Net (income) loss attributable to noncontrolling interests for the Funds increased $17.7 million for the three months ended March 31, 2024 compared to the prior year period based on the noncontrolling interests’ share of the variances discussed above. Net income attributable to noncontrolling interests in the Funds includes asset management fees earned by the Company of $2.4 million and $2.5 million for the three months ended March 31, 2024 and 2023, respectively.
Current wording
Net (income) loss attributable to noncontrolling interests for Investment Management decreased $8.4 million for the three months ended June 30, 2024 compared to the prior year period based on the noncontrolling interests’ share of the variances discussed above. Net income attributable to noncontrolling interests in Investment Management includes asset management fees earned by the Company of $2.4 million and $2.3 million for the three months ended June 30, 2024 and 2023, respectively.
Previous wording
Revenues for our Core Portfolio increased $3.7 million for the three months ended March 31, 2024 compared to the prior year period primarily due to the recognition of a forfeited deposit within Other revenues in the Condensed Consolidated Statements of Income for a property previously under contract for sale.
Current wording
Revenues for our Core Portfolio decreased $3.8 million for the six months ended June 30, 2024 compared to the prior year period primarily due to $7.8 million accelerated amortization of a below market lease for a bankrupt tenant in 2023, offset by $3.5 million for the recognition of a forfeited deposit within Other revenues in the Condensed Consolidated Statements of Operations for a property previously under contract for sale in 2024.
Previous wording
Property operating expenses and real estate taxes increased $1.8 million for the three months ended March 31, 2024 compared to the prior year period primarily due to a $1.0 million reserve for increased legal expenses along with higher non-recurring operating expenses throughout the Core Portfolio.
Current wording
Property operating expenses and real estate taxes for our Core Portfolio increased $1.1 million for the six months ended June 30, 2024 compared to the prior year period primarily due to increased legal expense reserves in the current year.
Previous wording
Revenues for the Funds increased $5.8 million for the three months ended March 31, 2024 compared to the prior year period primarily due (i) $4.8 million from Fund property acquisitions and (ii) $1.7 million from new tenant lease up within the Funds in 2024 and 2023.
Current wording
Revenues for Investment Management increased $10.6 million for the six months ended June 30, 2024 compared to the prior year period primarily due to (i) $9.6 million from acquisitions in 2023, and (ii) $1.7 million from new tenant lease-up within Investment Management in 2023 and 2024.
Previous wording
Depreciation and amortization for the Funds increased $2.2 million for the three months ended March 31, 2024 compared to the prior year period primarily due to Fund property acquisitions. Property operating expenses and real estate taxes for the Funds increased $3.0 million for the three months ended March 31, 2024 compared to the prior year period primarily due to Fund property acquisitions and non-recurring property operating expenses within the Fund Portfolio.
Current wording
Property operating expenses and real estate taxes for Investment Management increased $3.9 million for the six months ended June 30, 2024 compared to the prior year period primarily due to property acquisitions in 2023 and non-recurring property operating expenses within Investment Management.
Previous wording
Loss on disposition of property for the Funds increased $1.2 million for the three months ended March 31, 2024 compared to the prior year period due to a loss related to a previously disposed property (Note 2).
Current wording
(Loss) gain on disposition of property for Investment Management increased $1.8 million for the six months ended June 30, 2024 compared to the prior year period due to the $3.0 million gain on disposition of two properties at Fund IV and an outparcel at Fund V, offset by a $1.2 million loss related to a previously disposed property (Note 2).
Previous wording
Realized and unrealized holding (losses) gains on investments and other for the Funds decreased $25.0 million for the three months ended March 31, 2024 compared to the prior year period primarily due to a $28.2 million increase in dividend income from Albertsons in 2023 offset by a $2.0 million mark-to-market loss in 2023.
Current wording
Realized and unrealized holding (losses) gains on investments and other for the Investment Management decreased $25.0 million for the six months ended June 30, 2024 compared to the prior year period primarily due to a $28.2 million increase in dividend income from Albertsons in 2023 offset by a $2.0 million mark-to-market loss in 2023 (Note 8).
Previous wording
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.
Current wording
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. Investment Management invests primarily in properties that typically require significant leasing and development. Given that Investment Management is primarily comprised of 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 Investment Management investments.
Previous wording
Does not include the Operating Partnership’s share of NOI from unconsolidated joint ventures within the Funds.
Current wording
Does not include the Operating Partnership’s share of NOI from unconsolidated joint ventures within Investment Management.
Previous wording
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, (iv) debt service and loan repayments and (v) share repurchases.
Current wording
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 in our Investment Management platform and property acquisitions and development/re-tenanting activities within our Core Portfolio, (iii) distributions to our Fund investors, (iv) debt service and loan repayments and (v) share repurchases.
Previous wording
In order to qualify as a REIT for federal income tax purposes, we must distribute at least 90% of our taxable income to our shareholders. During the three months ended March 31, 2024, we paid dividends and distributions on our Common Shares and Preferred OP Units totaling $18.6 million.
Current wording
In order to qualify as a REIT for federal income tax purposes, we must distribute at least 90% of our taxable income to our shareholders. During the six months ended June 30, 2024, we paid dividends and distributions on our Common Shares and Preferred OP Units totaling $37.5 million.
Previous wording
During the three months ended March 31, 2024, we made capital contributions aggregating $11.1 million to our Funds.
Current wording
During the six months ended June 30, 2024, we made capital contributions aggregating $11.1 million to our Funds.
Previous wording
During the three months ended March 31, 2024, capitalized costs associated with development activities totaled $1.8 million (Note 2). As of March 31, 2024, we had a total of thirteen consolidated projects under development or redevelopment, for which the estimated total cost to complete these projects through 2025 was $44.8 million to $71.2 million, and our estimated share was approximately $23.8 million to $40.2 million. Substantially all remaining development and redevelopment costs are discretionary, and could be affected by various risks and uncertainties, including, but not limited to, the effects of the current inflationary environment, rising interest rates, and other risks detailed in Part I, Item 1A. Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2023.
Current wording
During the six months ended June 30, 2024, capitalized costs associated with development activities totaled $7 million (Note 2). As of June 30, 2024, we had a total of 13 consolidated projects under development or redevelopment, for which the estimated total cost to complete these projects through 2025 was $35.0 million to $61.2 million, and our estimated share was approximately $18.9 million to $33.7 million. Substantially all remaining development and redevelopment costs are discretionary, and could be affected by various risks and uncertainties, including, but not limited to, the effects of the current inflationary environment, rising interest rates, and other risks detailed in Part I, Item 1A. Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2023.
Previous wording
As of March 31, 2024, our consolidated indebtedness aggregated $1,734.5 million, excluding unamortized premium of $0.2 million and net unamortized loan costs of $11.0 million, and was collateralized by 33 properties and related tenant leases. Stated interest rates on our outstanding indebtedness ranged from 3.99% to SOFR + 3.75% with maturities that ranged from January 1, 2025 to April 15, 2035, without regard to available extension options. With respect to the debt maturing in 2024, we are actively pursuing refinancing the remaining obligations, though there can be no assurance that we can refinance such obligations on favorable terms or at all. Taking into consideration $1,207.6 million of notional principal under variable to fixed-rate swap agreements currently in effect, $1,404.6 million of the portfolio debt, or 81.0%, was fixed at a 4.77% weighted average interest rate and $329.8 million, or 19.0%, was floating at a 8.09% weighted average interest rate as of March 31, 2024. Our variable-rate debt includes $151.3 million of debt subject to interest rate caps.
Current wording
As of June 30, 2024, our consolidated indebtedness aggregated $1,707.7 million, excluding unamortized premium of $0.2 million and net unamortized loan costs of $12.1 million, and was collateralized by 31 properties and related tenant leases. Stated interest rates on our outstanding indebtedness ranged from 3.99% to SOFR + 3.75% with maturities that ranged from July 8, 2024 to April 15, 2035, without regard to available extension options. With respect to the debt maturing in 2024, we are actively pursuing refinancing the remaining obligations, though there can be no assurance that we can refinance such obligations on favorable terms or at all. Taking into consideration $1,188.3 million of notional principal under variable to fixed-rate swap agreements currently in effect, $1,379.8 million of the portfolio debt, or 80.8%, was fixed at a 4.74% weighted average interest rate and $327.9 million, or 19.2%%, was floating at a 8.10% weighted average interest rate as of June 30, 2024. Our variable-rate debt includes $151.2 million of debt subject to interest rate caps.
Previous wording
Without regard to available extension options, as of March 31, 2024, we had $218.4 million of debt maturing in 2024 at a weighted-average interest rate of 4.27%; $4.4 million of scheduled principal amortization due in the remainder of 2024; and our share of scheduled remaining 2024 principal payments and maturities on our unconsolidated debt was $65.6 million. In addition, $309.8 million of our total consolidated debt and $61.0 million of our pro-rata share of unconsolidated debt will come due by March 31, 2025. With respect to the debt maturing in 2024 and 2025, we have options to extend consolidated debt aggregating $40.1 million and $438.7 million as of March 31, 2024 and; however, there can be no assurance that the Company will be able to successfully execute any or all of its available extension options. For the remaining indebtedness, 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 on acceptable terms or at all. Our ability to obtain financing could be affected by various risks and uncertainties, including, but not limited to, the effects of the current inflationary environment, rising interest rates, and other risks detailed in Part I, Item 1A. Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2023.
Current wording
Without regard to available extension options, as of June 30, 2024, we had $211.8 million of debt maturing in 2024 at a weighted-average interest rate of 4.18%; $2.8 million of scheduled principal amortization due in the remainder of 2024; and our share of scheduled remaining 2024 principal payments and maturities on our unconsolidated debt was $59.6 million. In addition, $373.6 million of our total consolidated debt and $57.7 million of our pro-rata share of unconsolidated debt will come due by June 30, 2025. With respect to the debt maturing in 2024 and 2025, we have options to extend consolidated debt aggregating $40.0 million and $327.3 million as of June 30, 2024 and; however, there can be no assurance that the Company will be able to successfully execute any or all of its available extension options. For the remaining indebtedness, 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 on acceptable terms or at all. Our ability to obtain financing could be affected by various risks and uncertainties, including, but not limited to, the effects of the current inflationary environment, rising interest rates, and other risks detailed in Part I, Item 1A. Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2023.
Previous wording
We maintain a share repurchase program under which $122.5 million remains available as of March 31, 2024 (Note 10). We did not repurchase any shares under this program during the three months ended March 31, 2024.
Current wording
We maintain a share repurchase program under which $122.5 million remains available as of June 30, 2024 (Note 10). We did not repurchase any shares under this program during the six months ended June 30, 2024.
Previous wording
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, (vi) liquidation of marketable securities, and (vii) cash on hand and future cash flow from operating activities. Our cash on hand in our consolidated subsidiaries as of March 31, 2024 totaled $18.8 million. Our remaining sources of liquidity are described further below.
Current wording
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 Investment Management, (iv) future sales of existing properties, (v) repayments of structured financing investments, (vi) liquidation of marketable securities, and (vii) cash on hand and future cash flow from operating activities. Our cash on hand in our consolidated subsidiaries as of June 30, 2024 totaled $31.9 million. Our remaining sources of liquidity are described further below.
Previous wording
We have an ATM Program (Note 10) 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, we have been able to effectively “match-fund” the required capital for our Core Portfolio and our share of 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 may issue, equity in follow-on offerings separate from our ATM Program. Net proceeds raised through our ATM Program 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. The Company sold 87,139 Common Shares under its ATM Program during the three months ended March 31, 2024 generating $1.5 million of net proceeds.
Current wording
We have an ATM Program (Note 10) 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, we have been able to effectively “match-fund” the required capital for our Core Portfolio and our share of Investment Management 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 may issue, equity in follow-on offerings separate from our ATM Program. Net proceeds raised through our ATM Program and follow-on offerings are primarily used for acquisitions, both for our Core Portfolio and our pro-rata share of Investment Management acquisitions, and for general corporate purposes. The Company sold 1,739,288 Common Shares under its ATM Program during the six months ended June 30, 2024 generating $29.9 million of net proceeds after related issuance costs.
Previous wording
During the three months ended March 31, 2024, Fund V called for capital contributions of $52.2 million, of which our aggregate share was $11.1 million. As of March 31, 2024, unfunded capital commitments from noncontrolling interests within Funds II, III, IV and V were zero, $1.4 million, $18.5 million and $48.3 million, respectively.
Current wording
During the six months ended June 30, 2024, Fund V called for capital contributions of $52.2 million, of which our aggregate share was $11.1 million. As of June 30, 2024, unfunded capital commitments from noncontrolling interests within Funds II, III, IV and V were $0, $1.4 million, $18.5 million and $48.3 million, respectively.
Previous wording
During the three months ended March 31, 2024, we sold 175,000 shares of Albertsons, generating net proceeds of $4.0 million. As of March 31, 2024, we held 1.3 million shares with a fair value of $27.3 million (Note 8). In addition, during the three months ended March 31, 2024, we recognized dividend income of $0.2 million (Note 8).
Current wording
During the six months ended June 30, 2024, we sold 350,000 shares of Albertsons, generating net proceeds of $7.6 million. As of June 30, 2024, we held 1.1 million shares with a fair value of $21.7 million (Note 8). In addition, during the six months ended June 30, 2024, we recognized dividend income of $0.3 million (Note 8).
Previous wording
During the three months ended March 31, 2024, the Company received full payment on a $6.0 million Core Portfolio note.
Current wording
During the six months ended June 30, 2024, the Company received full payment on a $6.0 million Core Portfolio note.
Previous wording
As of March 31, 2024, we had $185.3 million of additional capacity under existing Core Portfolio debt facilities. In addition, as of that date within our Core and Fund portfolios, we had 92 unleveraged consolidated properties with an aggregate carrying value of approximately $1.8 billion, although there can be no assurance that we would be able to obtain financing for these properties at favorable terms, if at all.
Current wording
As of June 30, 2024, we had $253.6 million of capacity under existing Core Portfolio debt facilities. In addition, as of that date within our Core Portfolio and Investment Management, we had 91 unleveraged consolidated properties with an aggregate carrying value of approximately $1.8 billion, although there can be no assurance that we would be able to obtain financing for these properties at favorable terms, if at all.
Previous wording
The following table compares the historical cash flow for the three months ended March 31, 2024 with the cash flow for the three months ended March 31, 2023 (in millions, totals may not add due to rounding):
Current wording
The following table compares the historical cash flow for the six months ended June 30, 2024 with the cash flow for the six months ended June 30, 2023 (in millions, totals may not add due to rounding):
Previous wording
Our operating activities provided $33.4 million less cash for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023, primarily due to the $28.2 million dividend received from our investment in Albertsons in 2023.
Current wording
Our operating activities provided $31.5 million less cash for the six months ended June 30, 2024 as compared to the three months ended June 30, 2023, primarily due to the $28.2 million dividend received from our investment in Albertsons in 2023.
Previous wording
Our investing activities used $0.2 million more cash for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023, primarily due to $32.8 million less cash received from return of capital from unconsolidated affiliates. This use of cash was offset by (i) $22.4 million less cash used in our investments in and advances to unconsolidated affiliates, (ii) $6.0 million more received from proceeds from notes receivable and (iii) $4.0 million more cash received from the sale of marketable securities.
Current wording
Our investing activities provided $46.7 million more cash for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023, primarily due to (i) $58.7 million more cash received form the disposition of properties in 2024, (ii) $22.8 million less cash used in our investments in and advances to unconsolidated affiliates, (iii) $7.6 million more cash received from the sale of marketable securities, and (iv) $6.0 million more received from the payment of a note receivable. These sources of cash were offset by (i) $33.4 million less cash received from return of capital of unconsolidated affiliates, (ii) $7.9 million more cash used to originate a note receivable, and (iii) $6.8 million more cash used for development, construction and property improvement costs.
Showing the first 40 of 41 pairs. Open the source sections for the rest.
Rearranged current paragraphs (8)
Current report — wording carried from elsewhere
A summary of our wholly-owned and partially-owned retail properties and their physical occupancies as of June 30, 2024 is as follows:
Current report — wording carried from elsewhere
The results of operations by reportable segment for the six months ended June 30, 2024 compared to the six months ended June 30, 2023 are summarized in the table below (in millions, totals may not add due to rounding):
Current report — wording carried from elsewhere
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 decreased $9.2 million for the six months ended June 30, 2024 compared to the prior year period as a result of the changes further described below.
Current report — wording carried from elsewhere
Realized and unrealized holding (losses) gains on investments and other for our Core Portfolio decreased $7.4 million for the six months ended June 30, 2024 compared to the prior year period primarily due to a change in the mark-to-market adjustment on the Investment in Albertsons (Note 8).
Current report — wording carried from elsewhere
Net income attributable to noncontrolling interests for our Core Portfolio increased $1.0 million for the six months ended June 30, 2024 compared to the prior year period based on the noncontrolling interests’ share of the variances discussed above.
Current report — wording carried from elsewhere
Investment Management (all amounts below are consolidated amounts and are not representative of our proportionate share)
Current report — wording carried from elsewhere
Interest expense for Investment Management increased $5.3 million for the six months ended June 30, 2024 compared to the prior year period primarily due to higher average interest rates in 2024.
Current report — wording carried from elsewhere
The Company does not allocate general and administrative expenses and income taxes to its reportable segments. These unallocated amounts are depicted in the table above under the headings labeled “Total.”
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
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.
Previous report — wording carried elsewhere
While we have not experienced any material negative impacts at this time, we intend to actively manage our business to respond to the ongoing economic and social impact from such events. See Risk Factors in Part I, Item 1A, of our Annual Report on Form 10-K for the year ended December 31, 2023.