02/05/2023 - Acadia Realty Trust: First Quarter 2023

Jennifer Han (914) 288-8100

ACADIA REALTY TRUST REPORTS FIRST QUARTER OPERATING RESULTS

RYE, NY (May 02, 2023) - Acadia Realty Trust (NYSE: AKR) ("Acadia" or the "Company") today reported operating results for the quarter ended March 31, 2023. For the quarter ended March 31, 2023, net earnings per share was $0.14. All per share amounts are on a fully-diluted basis, where applicable. Acadia operates dual platforms, comprised of a high-quality core real estate portfolio ("Core Portfolio"), through which the Company owns and operates retail assets in the nation's most dynamic corridors, and a series of discretionary, institutional funds ("Funds") that target opportunistic and value-add investments.

Please refer to the tables and notes accompanying this press release for further details on operating results and additional disclosures related to net income (loss), funds from operations ("FFO") as per NAREIT and Before Special Items, net property operating income ("NOI") and same-property NOI.

First Quarter and Recent Highlights

• First Quarter Earnings and Operating Results:

1. NAREIT FFO and FFO Before Special Items per share of $0.40

• 1. Driven by its Street portfolio, generated an increase in same-property NOI of 7.0% within its Core Portfolio
• Core Portfolio Leasing:
• 1. Generated GAAP and cash leasing spreads of 22.3% and 9.9%, respectively, on new and renewal leases

• 1. As of March 31, 2023, the Core Portfolio was 94.6% leased and 92.8% occupied, compared to leased and occupied rates of 94.9% and 92.7% as of December 31, 2022 (refer to detailed discussion below further describing first quarter events impacting occupancy percentages from December 31, 2022 to March 31, 2023)
• Fund Transactional Activity:
• 1. As previously announced, completed a Fund V acquisition in suburban New York for $62.1 million

• 1. As previously announced, recognized approximately $11.3 million, or $0.11 per share of Acadia's share of the Albertsons Special Dividend ("Special Dividend")
• Balance Sheet:
• 1. Substantially all of the Core Portfolio debt was fixed or effectively fixed, inclusive of swap contracts, at a blended rate of 4.25% as of March 31, 2023
• Guidance Update:
• 1. Increased annual 2023 guidance as follows:
  2. • Net earnings per share to $0.16 - $0.23 from $0.14 - $0.23
     • NAREIT FFO per share to $1.19 - $1.26 from $1.17 - $1.26
     • FFO Before Special Items per share to $1.19 - $1.26 from $1.17 - $1.26

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"We are very pleased with a simple 'beat and raise quarter' with the upside driven by internal growth. Despite pressures from rising interest rates, we were able to achieve robust growth in the first quarter, which is reflective of the multi-year embedded growth that we see from our existing portfolio. Looking forward, we remain confident in meeting our internal growth expectations coming from lease-up, contractual rent steps, rebounding market rents and the execution of our value-add business plan on recently acquired properties," stated Kenneth F. Bernstein, President and CEO of Acadia. "While we have visibility on the internal growth leading to earnings growth, we are also prepared to take advantage of external growth opportunities by leveraging our institutional relationships which will add further accretion to our earnings."

CORE PORTFOLIO OPERATING RESULTS

The Company had net earnings per share of $0.14, NAREIT FFO per share of $0.40 and FFO Before Special Items per share of $0.40 for the quarter ended March 31, 2023. Please refer to the Consolidated Financial Results section below for additional details.

Driven by a combination of market rent growth, lease-up and contractual rent increases within its Street portfolio, the Company's same-property NOI, excluding redevelopments, increased 7.0% for the quarter ended March 31, 2023.

CORE PORTFOLIO LEASING UPDATE

During the quarter ended March 31, 2023, GAAP and cash leasing spreads were 22.3% and 9.9%, respectively, on 17 new and renewal leases aggregating approximately 55,000 square feet.

As of March 31, 2023, the Core Portfolio was 94.6% leased and 92.8% occupied. As of December 31, 2022, the Core Portfolio was 94.9% leased and 92.7% occupied. The leased rate includes space that is leased but not yet occupied and excludes development and redevelopment properties.

As previously announced, the Company placed its North Michigan Avenue assets within the Core Portfolio into redevelopment during the first quarter of 2023 (and thus are excluded from Core occupancy metrics).

Additionally, as part of its initial accretive acquisition plan, the Company successfully recaptured two below-market spaces with aggregate GLA of approximately 9,500 square feet during the first quarter of 2023 within its Henderson Avenue portfolio. The planned recapture contributed to a 730-bps decline in occupancy within the Company's Dallas portfolio. The recapture of these spaces will allow the Company to execute its value-add strategy to re-demise and re- tenant this site and is in advanced stages of lease negotiations at rents in excess of its initial underwriting.

As previously announced, during the quarter ended March 31, 2023, the Company signed a lease for the entirety of Bed Bath and Beyond store at Brandywine Town Center in Wilmington, Delaware. The space is being taken by the adjacent tenant, Dick's Sporting Goods, which plans to open in the combined space a flagship House of Sport, its newest comprehensive format. As part of the expansion, Dick's Sporting Goods profitably executed a new 15-year lease covering the combined space. The Bed Bath and Beyond store at Brandywine is one of its two locations within the Company's Core Portfolio.

FUND TRANSACTIONAL ACTIVITY

Fund V

Mohawk Commons (Fund V). As previously announced, in January 2023, Fund V completed the acquisition of a 90% interest in Mohawk Commons in Schenectady, New York for $62.1 million in a joint venture with DLC Management. The investment, which was funded with a new non-recourse mortgage of $39.7 million, is expected to result in mid-teens leveraged returns. This grocery-anchored power center is currently 98% leased and is anchored by Lowe's and a shadow anchor, Target, along with other national junior anchors, including Burlington Coat Factory, PetSmart and Marshalls.

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Albertsons Special Dividend

As previously announced, on January 17, 2023, Albertsons Companies, Inc. ("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 the Company from paying its previously announced $6.85 per common share of 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. Acadia's share of the Special Dividend was approximately $11.3 million, or $0.11 per share, and was recognized in the first quarter of 2023 and is included in Net Promote and Other Transactional Income.

BALANCE SHEET

As of March 31, 2023, substantially all of the Core Portfolio debt was fixed or effectively fixed, inclusive of interest rate swap contracts at a blended rate of 4.25%.

CONSOLIDATED FINANCIAL RESULTS

A complete reconciliation, in dollars and per share amounts, of (i) net income attributable to Acadia to FFO (as defined by NAREIT and Before Special Items) attributable to common shareholders and common OP Unit holders and (ii) operating income to NOI is included in the financial tables of this release. Amounts discussed below are net of noncontrolling interests and all per share amounts are on a fully-diluted basis.

Net Income

Net income attributable to Acadia for the quarter ended March 31, 2023, was $13.1 million, or $0.14 per share, which included $11.3 million, or $0.11 per share, from the receipt of the Special Dividend.

Net income attributable to Acadia for the quarter ended March 31, 2022, was $16.6 million, or $0.18 per share, which included: (i) $8.3 million gain, or $0.08 per share, on dispositions and (ii) $3.6 million, or $0.04 per share, primarily from the unrealized mark-to-market holding gain on its investment in Albertsons supermarkets, offset by $0.9 million, or $0.01 per share for net acquisition and transaction costs from a Core acquisition.

FFO as Defined by NAREIT

FFO as defined by NAREIT for the quarter ended March 31, 2023 was $40.7 million, or $0.40 per share, which included $11.3 million, or $0.11 per share, from the receipt of the Special Dividend.

FFO as defined by NAREIT for the quarter ended March 31, 2022 was $35.4 million, or $0.36 per share, and included $3.6 million, or $0.04 per share, primarily from the unrealized mark-to-market holding gain on Albertsons and (ii) $1.5 million, or $0.01 per share from the Fund III disposition of its interest in Self Storage Management.

FFO Before Special Items

FFO Before Special Items for the quarter ended March 31, 2023 was $40.7 million, or $0.40 per share, which included $11.3 million, or $0.11 per share, from the receipt of the Special Dividend. The unrealized mark-to-market holding gain on Albertsons was insignificant for the quarter ended March 31, 2023. Therefore, FFO Before Special Items and FFO as defined by NAREIT for the quarter ended March 31, 2023 were both $0.40 per share.

FFO Before Special Items for the quarter ended March 31, 2022 was $32.7 million, or $0.33 per share, which excluded $3.6 million, or $0.04 per share, primarily from the unrealized mark-to-market holding gain on Albertsons offset by $0.9 million, or $0.01 per share for net acquisition and transaction costs from a Core acquisition.

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GUIDANCE

The Company increased its annual 2023 guidance as follows:

• Net earnings per share to $0.16 - $0.23 from $0.14 - $0.23
• NAREIT FFO per share to $1.19 - $1.26 from $1.17 - $1.26
• FFO Before Special Items per share to $1.19 - $1.26 from $1.17 - $1.26

			2023 Guidance
			Revised		Prior
	Net earnings per share attributable to Acadia		$0.16 to $0.23		$0.14 to $0.23
	Depreciation of real estate and amortization of leasing costs (net of
	noncontrolling interest share)	$1.01	$1.01
	Impairment charges (net of noncontrolling interest share)		-		-
	Gain on disposition of properties (net of noncontrolling interest share)		-		-
	Noncontrolling interest in Operating Partnership	0.02	0.02
	NAREIT Funds from operations per share attributable to Common
	Shareholders and Common OP Unit holders		$1.19 to $1.26		$1.17 to $1.26
	Unrealized holding loss (gain) (net of noncontrolling interest share)		-		-
	Transaction and other related costs		-		-
	Funds from operations Before Special Items per share attributable to
	Common Shareholders and Common OP Unit holders		$1.19 to $1.26		$1.17 to $1.26

CONFERENCE CALL

Management will conduct a conference call on Wednesday, May 3, 2023 at 10:00 AM ET to review the Company's earnings and operating results. Participant registration and webcast information is listed below.

Live Conference Call:
Date:	Wednesday, May 3, 2023
Time:	10:00 AM ET
Participant Registration:	First Quarter 2023 Registration
Webcast Listen-only and Replay:	www.acadiarealty.comunder Investors, Presentations & Events

The Company uses, and intends to use, the Investors page of its website, which can be found at www.acadiarealty.com, as a means of disclosing material nonpublic information and of complying with its disclosure obligations under Regulation FD, including, without limitation, through the posting of investor presentations that may include material nonpublic information. Accordingly, investors should monitor the Investors page, in addition to following the Company's press releases, SEC filings, public conference calls, presentations and webcasts. The information contained on, or that may be accessed through, the website is not incorporated by reference into, and is not a part of, this document.

About Acadia Realty Trust

Acadia Realty Trust is an equity real estate investment trust focused on delivering long-term, profitable growth via its dual - Core Portfolio and Fund - operating platforms and its disciplined, location-driven investment strategy. Acadia Realty Trust is accomplishing this goal by building a best-in-class core real estate portfolio with meaningful concentrations of assets in the nation's most dynamic corridors; making profitable opportunistic and value-add investments through its series of discretionary, institutional funds; and maintaining a strong balance sheet. For further information, please visit www.acadiarealty.com.

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