01/08/2023 - Acadia Realty Trust: Second Quarter 2023

Jennifer Han (914) 288-8100

ACADIA REALTY TRUST REPORTS SECOND QUARTER OPERATING RESULTS

RYE, NY (August 01, 2023) - Acadia Realty Trust (NYSE: AKR) ("Acadia" or the "Company") today reported operating results for the quarter ended June 30, 2023. For the quarter ended June 30, 2023, net earnings per share was $0.09. and for the six months ended June 30, 2023, net earnings per share was $0.23. 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.

Second Quarter and Recent Highlights

• Second Quarter Earnings and Operating Results: o NAREIT FFO per share of $0.37
  o FFO Before Special Items per share of $0.36

1. Second quarter results exceeded expectations, driving a full year guidance increase due to outperformance in leasing and better than anticipated collections, along with a one-time gain described below

• 1. Within its Core Portfolio, generated an increase in same-property NOI of 5.0% and 5.9% for the three and six months ended June 30, 2023, respectively
• Non-recurringGain Recognized in the Second Quarter:
• 1. Results for the quarter ended June 30, 2023 included a gain of $7.8 million, or $0.08 per share, from the termination of the Bed Bath and Beyond below-market lease at 555 9th Street in San Francisco

• 1. The Company had budgeted $0.03 per share to be realized throughout 2023 in its initial full year 2023 guidance reflecting this lease; the lease termination resulted in an incremental $0.05 relative to its prior full year 2023 guidance
• Core Portfolio Leasing:
• 1. Driven by leasing activity within its street assets, generated GAAP and cash leasing spreads of 21.6% and 13.1%, respectively, on conforming new and renewal leases

1. As of June 30, 2023, the Core Portfolio was 95.2% leased and 92.2% occupied, compared to leased and occupied rates of 94.6% and 92.8% as of March 31, 2023

1. In July 2023, the Company signed a new lease at 565 Broadway (corner of Prince and Broadway) in Soho, New York with a cash rent spread of approximately 45% and terminated the previously executed lease signed in October 2021

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• Fund V Transactional Activity:

• 1. Post quarter end, completed a Fund V acquisition in Tampa, Florida for $49.4 million, inclusive of transaction costs
• Balance Sheet:
• 1. Approximately 96% of the Core Portfolio debt was fixed or effectively fixed, inclusive of swap contracts, at a blended rate of 4.28% as of June 30, 2023

• 1. The Company has limited near-term maturity risk on its $1.2 billion of Core Portfolio debt with 3.7%, 3.4% and 11.1% maturing in 2023, 2024 and 2025, respectively, assuming all extension options are exercised
• Guidance Increase Update:
• 1. Updated and increased its annual 2023 guidance to reflect $0.02 to $0.03 from continued strong leasing, better than anticipated collections and an incremental $0.05 from a one-time gain as follows:
  2. • Net earnings per share increased to $0.25 to $0.33 from $0.16 to $0.23
     • NAREIT FFO per share increased to $1.28 to $1.36 from $1.19 to $1.26
     • FFO Before Special Items per share increased to $1.26 to $1.34 from $1.19 to $1.26

"We had another strong quarter driven by the internal growth embedded in our Core Portfolio. This quarter marks the seventh of the last nine quarters with same-store NOI growth at 5% or higher with an average of 6.9% overall for the nine quarters. While there is uncertainty and mixed signals about near-term economic conditions, tenant demand and tenant performance remain robust and consistent with our near-term and long-term growth expectations. We expect our leasing momentum and executed leases to more than offset the near-term asset repositionings that we have been rightly focused on for some time," stated Kenneth F. Bernstein, President and CEO of Acadia Realty Trust. "Additionally, we are starting to see interesting opportunities arise from the dislocation in the capital markets. We continue to be actively engaged with our institutional capital partners and are well-positioned to quickly pursue investments which benefit both Acadia's shareholders and our partners."

CORE PORTFOLIO OPERATING RESULTS

The Company had net earnings per share of $0.09, NAREIT FFO per share of $0.37 and FFO Before Special Items per share of $0.36 for the quarter ended June 30, 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 assets, the Company's same-property NOI, excluding redevelopments, increased 5.0% for the quarter ended June 30, 2023 and 5.9% during the six months ended June 30, 2023.

CORE PORTFOLIO LEASING UPDATE

Driven by street assets, the overall GAAP and cash leasing spreads were 21.6% and 13.1%, respectively, on 19 conforming new and renewal leases aggregating approximately 234,000 square feet during the quarter ended June 30, 2023. Within the street portfolio, the GAAP and cash leasing spreads for new and renewal leases were 64.3% and 32.1%, respectively.

As of June 30, 2023, the Core Portfolio was 95.2% leased and 92.2% occupied compared to 94.6% leased and 92.8% occupied as of March 31, 2023. The leased rate includes space that is leased but not yet occupied and excludes development and redevelopment properties. The quarterly decline in the occupied leased rate reflects the previously announced recapture of the Bed Bath and Beyond space in Wilmington, Delaware, which has been leased to Dick's Sporting Goods, where they will be expanding and opening a flagship House of Sports. The recaptured and now re-

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leased Bed Bath and Beyond space represented approximately 100 bps of occupancy decline sequentially from March 31, 2023 to June 30, 2023.

In July 2023, the Company signed a new lease at 565 Broadway (corner of Prince and Broadway) in Soho, New York with a cash rent spread of approximately 45%. The Company terminated its previously executed lease signed in October 2021.

FUND TRANSACTIONAL ACTIVITY

Fund V

Cypress Creek, Lutz (Tampa), Florida. In July 2023, Fund V completed its purchase of a 100% interest in Cypress Creek for $49.4 million, inclusive of transaction costs. The asset is 98% leased with anchors including Burlington Coat Factory, Total Wine and Home Goods. Shop space includes national tenants Chipotle, Verizon, T-Mobile, Five Below and Aspen Dental.

BALANCE SHEET

As of June 30, 2023, approximately 96% of the Core Portfolio debt was fixed or effectively fixed, inclusive of interest rate swap contracts at a blended rate of 4.28%. The Company has limited near-term maturity risk on its $1.2 billion of Core debt with 3.7%, 3.4% and 11.1% maturing in 2023, 2024 and 2025, respectively, assuming all extension options are exercised. At June 30, 2023, the Company had $872 million of notional swap agreements associated with managing and mitigating future interest rate risk on maturing Core Portfolio debt with various maturities through 2030.

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 June 30, 2023, was $9.0 million, or $0.09 per share, which included: (i) $7.8 million gain, or $0.08 per share, from the termination of the Bed Bath and Beyond below-market lease and (ii) $1.7 million, or approximately $0.02 per share, from the unrealized mark-to-market holding gain on Albertsons Companies, Inc ("Albertsons").

Net loss attributable to Acadia for the quarter ended June 30, 2022, was $0.4 million, or $0.00 per share, which included a $8.9 million loss, or $0.09 per share, from the unrealized mark-to-market holding loss on its investment in Albertsons, partially offset by a $3.0 million gain, or $0.03 per share, on a Fund disposition.

Net income attributable to Acadia for the six months ended June 30, 2023, was $22.1 million, or $0.23 per share, which included: (i) $11.3 million, or $0.11 per share, from the receipt of the Albertsons Special Dividend ("Special Dividend");

1. $7.8 million gain, or $0.08 per share, from the termination of the Bed Bath and Beyond below-market lease and (iii) $1.8 million, or approximately $0.02 per share, from the unrealized mark-to-market holding gain on Albertsons.

Net income attributable to Acadia for the six months ended June 30, 2022, was $16.1 million, or $0.17 per share, which included an $11.3 million gain, or $0.11 per share, on Fund dispositions partially offset by $5.3 million, or $0.05 per share, from the unrealized mark-to-market holding loss on Albertsons.

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FFO as Defined by NAREIT

1. Second quarter NAREIT FFO exceeded expectations due to outperformance in leasing and better than anticipated collections, along with a one-time gain described below

1. NAREIT FFO per share was $0.37 for the quarter ended June 30, 2023 compared with $0.23 per share for the quarter ended June 30, 2022

FFO as defined by NAREIT for the quarter ended June 30, 2023 was $38.2 million, or $0.37 per share.

During the quarter ended June 30, 2023, the Company benefited from $0.03 per share driven by continued strong leasing and better than anticipated collections (primarily within its Funds) and also included $1.7 million, or approximately $0.02 per share, from unrealized mark-to-market holding gain on Albertsons. The Company did not recognize any promote or other Fund transactional income during the quarter.

FFO as defined by NAREIT for the quarter ended June 30, 2023 also included a gain of $7.8 million, or $0.08 per share, from the termination of the Bed Bath and Beyond below-market lease. The Company had initially budgeted $0.03 per share to be realized throughout 2023 within its initial full year 2023 guidance associated with this lease, resulting in an incremental $0.05 relative to its prior full year 2023 guidance.

FFO as defined by NAREIT for the quarter ended June 30, 2022 was $23.4 million, or $0.23 per share, which included $8.9 million, or $0.09 per share, primarily from the unrealized mark-to-market holding loss on Albertsons.

FFO as defined by NAREIT for the six months ended June 30, 2023 was $78.9 million, or $0.77 per share, which included: (i) $11.3 million, or $0.11 per share from the Albertson's Special Dividend; (ii) $7.8 million, or $0.08 per share gain from termination of the Bed Bath and Beyond below-market lease and (iii) $1.8 million, or approximately $0.02 per share from unrealized mark-to-market holding gain on Albertsons.

FFO as defined by NAREIT for the six months ended June 30, 2022 was $58.8 million, or $0.59 per share and included $5.3 million, or $0.05 per share, from the unrealized mark-to-market holding loss on Albertsons and was offset by $1.5 million, or $0.01 per share from the Fund III disposition of its interest in Self Storage Management.

FFO Before Special Items

1. Second quarter FFO Before Special Items also exceeded expectations due to the same outperformance in leasing and better than anticipated collections, along with the one-time gain

1. FFO Before Special Items was $0.36 per share for the quarter ended June 30, 2023 compared with $0.32 per share for the quarter ended June 30, 2022

FFO Before Special Items for the quarter ended June 30, 2023 was $36.5 million, or $0.36 per share.

During the quarter ended June 30, 2023, the Company benefited from $0.03 per share driven by continued strong leasing and better than anticipated collections (primarily within its Funds) and also excluded $1.7 million, or approximately $0.02 per share from the unrealized mark-to-market holding gain on Albertsons. The Company did not recognize any promote or other Fund transactional income during the quarter.

FFO Before Special Items for the quarter ended June 30, 2023 also included a gain of $7.8 million, or $0.08 per share, from the termination of the Bed Bath and Beyond below-market lease. The Company had initially budgeted $0.03 per share to be realized throughout 2023 within its initial full year 2023 guidance associated with this lease, resulting in an incremental $0.05 relative to its prior full year 2023 guidance.

FFO Before Special Items for the quarter ended June 30, 2022 was $32.3 million, or $0.32 per share, which excluded $8.9 million, or $0.09 per share, primarily from the unrealized mark-to-market holding loss on Albertsons.

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