[PART I - FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) The company's Q1 2021 financial statements show a turnaround to profitability, driven by the absence of prior-year impairment charges, with total assets slightly decreasing and equity increasing [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) As of March 31, 2021, total assets were **$4.15 billion**, a slight decrease from **$4.19 billion** at December 31, 2020, with liabilities decreasing and equity increasing Consolidated Balance Sheet Summary (in thousands) | Account | March 31, 2021 | December 31, 2020 | | :--- | :--- | :--- | | **Total Assets** | **$4,153,682** | **$4,186,882** | | Net investments in real estate | $3,472,369 | $3,507,488 | | Cash and cash equivalents | $15,424 | $19,232 | | **Total Liabilities** | **$2,069,313** | **$2,138,329** | | Mortgage and other notes payable, net | $1,188,695 | $1,204,581 | | Unsecured line of credit | $105,400 | $138,400 | | **Total Equity** | **$2,084,369** | **$2,048,553** | [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) For Q1 2021, the company reported a net income of **$1.86 million**, a significant improvement from a **$60.04 million** net loss in Q1 2020, primarily due to the absence of impairment charges Q1 2021 vs Q1 2020 Statement of Operations (in thousands) | Metric | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | | :--- | :--- | :--- | | Total Revenues | $69,394 | $71,420 | | Impairment Charges | $0 | $51,549 | | Operating Income (Loss) | $8,681 | $(46,343) | | Net Income (Loss) | $1,860 | $(60,039) | | Net Income (Loss) Attributable to Acadia | $5,162 | $(8,414) | | Basic and Diluted EPS | $0.06 | $(0.10) | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities was **$30.9 million** for Q1 2021, with investing activities providing **$11.5 million** and financing activities using **$45.2 million**, primarily for debt repayments Cash Flow Summary (in thousands) | Cash Flow Activity | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | | :--- | :--- | :--- | | Net cash provided by operating activities | $30,934 | $27,978 | | Net cash provided by (used in) investing activities | $11,492 | $(90,728) | | Net cash (used in) provided by financing activities | $(45,203) | $70,356 | | (Decrease) increase in cash and restricted cash | $(2,777) | $7,606 | [Notes to Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail the company's REIT structure, real estate transactions, debt, COVID-19 impact, and segment performance, providing context for its financial position - The company operates as a fully-integrated equity REIT with assets held through the Acadia Realty Limited Partnership (UPREIT structure) As of March 31, 2021, its portfolio consisted of 130 Core Portfolio properties and 56 properties within its four opportunity Funds[20](index=20&type=chunk)[21](index=21&type=chunk) - The company has three reportable operating segments: Core Portfolio, Funds, and Structured Financing[26](index=26&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=42&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations%20(MD%26A)) Management discusses the ongoing impact of COVID-19, a **$13.6 million** increase in net income attributable to Acadia, and the company's liquidity position, focusing on debt maturities and extension options [Overview and Significant Developments](index=42&type=section&id=Overview%20and%20Significant%20Developments) The company's portfolio comprises 186 properties, with Q1 2021 developments including a **$16.4 million** property sale and **$3.7 million** in COVID-19 related pro-rata charges - The company incurred pro-rata charges of **$3.7 million** in Q1 2021 due to the COVID-19 pandemic, compared to **$16.7 million** in the prior-year period These charges included credit loss, straight-line rent reserves, and abatements[174](index=174&type=chunk) - During Q1 2021, the company sold one Core Portfolio property for **$16.4 million**, recognizing a gain of **$4.6 million**[176](index=176&type=chunk) [Results of Operations](index=44&type=section&id=Results%20of%20Operations) Net income attributable to Acadia increased by **$13.6 million** year-over-year, driven by the absence of prior-year impairment charges in the Funds segment, despite a slight decline in total revenues Change in Net Income Attributable to Acadia by Segment (in millions) | Segment | Q1 2021 | Q1 2020 | Increase / (Decrease) | | :--- | :--- | :--- | :--- | | Core Portfolio | $7.5 | $5.7 | $1.8 | | Funds | $5.2 | $(8.4) | $13.6 | | Structured Financing (SF) | $1.7 | $2.4 | $(0.7) | | **Total** | **$5.2** | **$(8.4)** | **$13.6** | - The absence of the **$51.5 million** impairment charge recorded in Q1 2020 was the primary driver for the year-over-year improvement in the Funds segment's results[190](index=190&type=chunk) [Supplemental Financial Measures (NOI & FFO)](index=45&type=section&id=Supplemental%20Financial%20Measures%20(NOI%20%26%20FFO)) Core Portfolio Same-Property NOI decreased by **14.5%** in Q1 2021, while Diluted FFO per share was **$0.26**, down from **$0.30** in the prior-year period Core Portfolio Same-Property NOI (in thousands) | Metric | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | | :--- | :--- | :--- | | Same-Property NOI | $28,357 | $33,156 | | Percent change | (14.5)% | N/A | Funds from Operations (FFO) (in thousands, except per share) | Metric | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | | :--- | :--- | :--- | | FFO attributable to Common Shareholders | $24,343 | $27,738 | | Diluted FFO per Share | $0.26 | $0.30 | [Liquidity and Capital Resources](index=49&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity is supported by various sources, with total consolidated debt at **$1.72 billion** and significant maturities in 2021 and 2022, partially mitigated by extension options - At March 31, 2021, the company's share of remaining capital commitments to its Funds aggregated **$76.3 million**[209](index=209&type=chunk) Consolidated Debt Summary (in thousands) | Debt Type | March 31, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Total Debt - Fixed and Effectively Fixed Rate | $1,102,250 | $1,143,152 | | Total Debt - Variable Rate | $618,493 | $626,902 | | **Total Indebtedness** | **$1,715,055** | **$1,763,839** | - Excluding extension options, **$360.6 million** of consolidated debt is maturing in the remainder of 2021, and **$535.6 million** is maturing in 2022 The company has options to extend **$260.5 million** and **$250.6 million** of this debt, respectively[214](index=214&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=52&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's primary market risk is interest rate exposure on its **$1.72 billion** consolidated debt, with **35.9%** being variable-rate, where a 100 basis point LIBOR increase would raise annual interest expense by **$6.2 million** - As of March 31, 2021, **64.1%** (**$1.10 billion**) of the company's consolidated debt was fixed-rate or hedged, while **35.9%** (**$618.5 million**) was variable-rate[233](index=233&type=chunk) - A 100 basis point increase in LIBOR would increase annual interest expense on the variable-rate debt by **$6.2 million** After accounting for noncontrolling interests, the company's share of this increase would be **$1.7 million**[237](index=237&type=chunk) [Controls and Procedures](index=54&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2021, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of March 31, 2021[245](index=245&type=chunk) - No material changes were made to the internal control over financial reporting during the most recently completed fiscal quarter[246](index=246&type=chunk) [PART II - OTHER INFORMATION](index=55&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) [Legal Proceedings](index=55&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal proceedings but does not expect their outcomes to have a material adverse effect on its financial position - The company states that it does not expect any ongoing legal proceedings to have a material adverse effect on its consolidated financial position[248](index=248&type=chunk) [Risk Factors](index=55&type=section&id=Item%201A.%20Risk%20Factors) No material changes were reported to the risk factors previously disclosed in the 2020 Annual Report on Form 10-K - No material changes were reported to the risk factors previously disclosed in the 2020 Annual Report on Form 10-K[249](index=249&type=chunk)

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, 2020 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-12002 ACADIA REALTY TRUST (Exact name of registrant in its charter) Maryland 23-2715194 (State or Other Jurisdiction of Incorporation or Organiz ...

Acadia Realty Trust (NYSE:AKR) Q4 2020 Earnings Conference Call February 11, 2021 1:00 PM ET Company Participants Alex Burger - Analyst, Acquisitions Department Ken Bernstein - President & Chief Executive Officer John Gottfried - Senior Vice President & Chief Financial Officer Amy Racanello - Senior Vice President, Capital Markets & Investments Conference Call Participants Todd Thomas - KeyBanc Capital Markets Linda Tsai - Jefferies Katy McConnell - Citi Craig Schmidt - Bank of America Paulina Rojas-Schmid ...

[PART I - FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents Acadia Realty Trust's unaudited consolidated financial statements for the periods ended September 30, 2020 and 2019, including balance sheets, statements of operations, comprehensive income, equity changes, cash flows, and notes [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) Total assets decreased from **$4.31 billion** to **$4.25 billion**, while total liabilities increased to **$2.20 billion**, leading to a decrease in total equity to **$2.05 billion** Consolidated Balance Sheet Highlights (in thousands) | Account | September 30, 2020 (Unaudited) | December 31, 2019 | | :--- | :--- | :--- | | **Total Assets** | **$4,251,408** | **$4,309,114** | | Net investments in real estate | $3,615,729 | $3,609,315 | | Cash and cash equivalents | $16,108 | $15,845 | | **Total Liabilities** | **$2,199,308** | **$2,122,149** | | Mortgage and other notes payable, net | $1,159,688 | $1,170,076 | | Unsecured line of credit | $127,400 | $60,800 | | **Total Equity** | **$2,052,100** | **$2,186,965** | [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) The company shifted from net income to a **$33.4 million net loss** for the nine months ended September 30, 2020, driven by decreased revenues and **$51.5 million** in impairment charges Statement of Operations Summary (in thousands) | Metric | Three Months Ended Sep 30, 2020 | Three Months Ended Sep 30, 2019 | Nine Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2019 | | :--- | :--- | :--- | :--- | :--- | | **Total Revenues** | **$51,281** | **$73,327** | **$186,474** | **$217,543** | | Rental income | $50,300 | $72,191 | $183,396 | $214,490 | | **Total Operating Expenses** | **$65,330** | **$64,118** | **$253,109** | **$187,054** | | Impairment charges | $— | $321 | $51,549 | $1,721 | | **Operating (Loss) Income** | **($14,025)** | **$21,265** | **($66,126)** | **$44,559** | | **Net (Loss) Income** | **($38,289)** | **$8,840** | **($33,422)** | **$6,539** | | **Net (Loss) Income Attributable to Acadia** | **($9,030)** | **$10,458** | **$1,966** | **$31,735** | | **Basic and Diluted (Loss) EPS** | **($0.10)** | **$0.12** | **$0.02** | **$0.38** | [Consolidated Statements of Comprehensive Income (Loss)](index=6&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20%28Loss%29) A comprehensive loss of **$106.3 million** for the nine months ended September 30, 2020, was primarily driven by operating losses and **$82.4 million** in unrealized swap valuation losses Comprehensive Loss Summary (in thousands) | Metric | Nine Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2019 | | :--- | :--- | :--- | | Net (loss) income | ($33,422) | $6,539 | | Unrealized (loss) on valuation of swap agreements | ($82,444) | ($51,347) | | **Comprehensive loss** | **($106,268)** | **($46,182)** | | **Comprehensive loss attributable to Acadia** | **($52,732)** | **($12,919)** | [Consolidated Statements of Changes in Shareholders' Equity](index=7&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Shareholders%27%20Equity) Total equity decreased from **$2.19 billion** to **$2.05 billion** due to **$22.4 million** in share repurchases, **$24.9 million** in dividends, and a **$52.7 million** comprehensive loss - During the first nine months of 2020, the company repurchased **1,219,000 common shares** for a total of **$22.4 million**[15](index=15&type=chunk) - Dividends and distributions declared for the nine months ended September 30, 2020, totaled **$24.9 million**[15](index=15&type=chunk) [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operations decreased to **$81.1 million**, investing activities used **$92.9 million** (down from **$359.6 million**), and financing activities provided **$11.6 million** (down from **$290.6 million**) Cash Flow Summary (in thousands) | Activity | Nine Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2019 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | **$81,081** | **$95,187** | | **Net cash used in investing activities** | **($92,868)** | **($359,624)** | | **Net cash provided by financing activities** | **$11,558** | **$290,596** | | (Decrease) increase in cash and restricted cash | ($229) | $26,159 | [Notes to Consolidated Financial Statements (Unaudited)](index=11&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements%20%28Unaudited%29) This section details disclosures on segments, accounting policies, real estate activities, debt, financial instruments, and the significant impact of the COVID-19 pandemic - The company operates through three reportable segments: **Core Portfolio, Funds, and Structured Financing**[25](index=25&type=chunk) - Effective January 1, 2020, the company adopted ASU 2016-13 regarding credit losses, recording a cumulative-effect adjustment of **$0.4 million** to retained earnings for its Structured Financing portfolio[32](index=32&type=chunk) - The company made an accounting policy election to account for lease concessions related to COVID-19 as though the enforceable rights and obligations for those concessions existed in the original contract[42](index=42&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=49&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the COVID-19 pandemic's impact on operations, including tenant issues, rent collections, and impairment charges, alongside liquidity, capital resources, and a decrease in FFO per share - Due to the COVID-19 pandemic, the company recorded credit loss reserves of approximately **$24.0 million** and **$39.9 million** during the three and nine months ended September 30, 2020, respectively[218](index=218&type=chunk) - The Board of Trustees temporarily suspended common share distributions from Q2 2020 through Q4 2020, with reinstatement expected in Q1 2021, subject to approval[218](index=218&type=chunk)[277](index=277&type=chunk) Rent Collections of Pre-COVID Billings (as of Oct 31, 2020) | Portfolio | Q2 2020 Collections | Q3 2020 Collections | October 2020 Collections | | :--- | :--- | :--- | :--- | | Core | 76% | 87% | 90% | | Fund | 67% | 79% | 81% | Funds from Operations (FFO) per Share - Diluted | Period | 2020 | 2019 | | :--- | :--- | :--- | | **Three Months Ended Sep 30** | **$0.17** | **$0.34** | | **Nine Months Ended Sep 30** | **$0.96** | **$1.09** | [Quantitative and Qualitative Disclosures about Market Risk](index=63&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's primary market risk is interest rate exposure on its **$1.8 billion** debt, with **75.8%** fixed-rate and **24.2%** variable-rate, where a 100 basis point increase would raise annual interest expense by **$4.3 million** - As of September 30, 2020, total mortgage and other notes payable was **$1.8 billion**, with **75.8% ($1.36 billion)** fixed-rate or effectively fixed, and **24.2% ($435.1 million)** variable-rate[308](index=308&type=chunk) - A **100 basis point** increase in LIBOR would increase annual interest expense on the company's variable-rate debt by **$4.3 million**[312](index=312&type=chunk) - The company's interest rate risk exposure increased as variable-rate debt grew from **$314.6 million (18.3% of total)** at year-end 2019 to **$435.1 million (24.2% of total)** by September 30, 2020[319](index=319&type=chunk) [Controls and Procedures](index=65&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of September 30, 2020, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were **effective** as of September 30, 2020[320](index=320&type=chunk) - No material changes were made to the company's internal control over financial reporting during the third quarter of 2020[321](index=321&type=chunk) [PART II - OTHER INFORMATION](index=65&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) [Legal Proceedings](index=65&type=section&id=Item%201.%20Legal%20Proceedings) Litigation regarding a defaulted mortgage loan was settled on October 30, 2020, with a **$30 million** payment, expected to result in a gain in the fourth quarter - Litigation related to the defaulted Brandywine Loan, which had an original principal of **$26.3 million**, was settled on October 30, 2020[322](index=322&type=chunk)[324](index=324&type=chunk) - The settlement involved a **$30 million** payment by Brandywine Holdings, which was a discount to the carrying value and is expected to result in a gain for accounting purposes in Q4 2020[324](index=324&type=chunk) [Risk Factors](index=66&type=section&id=Item%201A.%20Risk%20Factors) The company highlights material risks from the COVID-19 pandemic, including adverse effects on business, financial condition, and liquidity due to tenant closures and reduced rent collections - The primary updated risk factor relates to the adverse effects of the **COVID-19 pandemic** on the company's and its tenants' businesses, financial condition, and results of operations[327](index=327&type=chunk)[328](index=328&type=chunk) - Key pandemic-related risks include tenants' inability to make timely rental payments, uncertainty regarding lease renewals, potential delays and reduced returns on development projects, and disruptions to capital markets[331](index=331&type=chunk) - As of October 31, 2020, the company had collected approximately **87%** of Core Portfolio and **79%** of Fund Portfolio pre-COVID billings for the third quarter of 2020[329](index=329&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=67&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This item is not applicable for the reporting period - Not applicable[333](index=333&type=chunk) [Defaults Upon Senior Securities](index=67&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item is not applicable for the reporting period - Not applicable[333](index=333&type=chunk) [Mine Safety Disclosures](index=67&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable for the reporting period - Not applicable[333](index=333&type=chunk) [Other Information](index=67&type=section&id=Item%205.%20Other%20Information) This item is not applicable for the reporting period - Not applicable[333](index=333&type=chunk) [Exhibits](index=68&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including CEO and CFO certifications and XBRL data files - Exhibits filed include CEO and CFO certifications under Sections 302 and 906 of the Sarbanes-Oxley Act, and XBRL interactive data files[335](index=335&type=chunk)

Acadia Realty Trust (NYSE:AKR) Q3 2020 Earnings Conference Call November 4, 2020 11:00 AM ET Company Participants Jennifer Han - IR Kenneth Bernstein - President, CEO & Trustee John Gottfried - SVP & CFO Amy Racanello - SVP, Capital Markets & Investments Conference Call Participants Craig Schmidt - Bank of America Merrill Lynch Floris Van Dijkum - Compass Point Research & Trading Mary McConnell - Citigroup Todd Thomas - KeyBanc Capital Markets Linda Tsai - Jefferies Ki Bin Kim - Truist Securities Vince Tibo ...

Acadia Realty Trust (NYSE:AKR) Q2 2020 Results Conference Call August 6, 2020 11:00 AM ET Company Participants Joy Liu - Intern Finance and Capital Markets Department Ken Bernstein - President and CEO John Gottfried - SVP and CFO Amy Racanello - SVP, Capital Markets & Investments Conference Call Participants Craig Schmidt - Bank of America Christy McElroy - Citi Todd Thomas - KeyBanc Capital Markets Mike Mueller - JPMorgan Linda Tsai - Jefferies Floris Van Dijkum - Compass Point Vince Tibone - Green Street ...

SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2020 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-12002 ACADIA REALTY TRUST (Exact name of registrant in its charter) | --- | --- | --- | |----------------------------------------------------------------- ...

Financial Data and Key Metrics Changes - The company reported a 1.4% decline in same-store NOI for Q1 2020, driven by increased tenant credit reserves due to COVID-19, resulting in a $0.04 decline in FFO per share [24][27][29] - Approximately 50% of April rents were collected, allowing the company to breakeven on operating expenses and core debt obligations [29][34] Business Line Data and Key Metrics Changes - Over one-third of the portfolio is essential necessity-based tenants, with strong rent collection rates [10][29] - The next largest group consists of nonessential but high-quality tenants, with April collections being less consistent but showing progress [10][11] - Local tenants, younger national brands, and those on the watch-list represent about 25% of the portfolio, with varying collection rates and risks [12][14][30] Market Data and Key Metrics Changes - The street and urban portfolio represents about 60% of NOI, with April collections for street and urban being similar to suburban collections [15][25] - Collection rates varied by location, with Chicago at 45% and Manhattan lower due to the shutdown of non-essential businesses [16] Company Strategy and Development Direction - The company remains focused on its diverse tenant base and strong balance sheet, with limited exposure to new development [8][21] - The strategy includes acquiring out-of-favor assets with high yields and attractive cash flow, while avoiding new developments [20][39] - The company is positioned to take advantage of opportunities as the market stabilizes post-COVID [21][44] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the retail sector is at the epicenter of the crisis but believes in the long-term value of their real estate [9][18] - The company is cautiously optimistic about recovery, emphasizing the importance of location and quality tenants [19][22] - Management has experience navigating through past economic cycles and believes unique opportunities will arise from the current situation [22] Other Important Information - The company has temporarily paused its quarterly dividend to preserve capital and enhance liquidity [37] - There is ample liquidity with over $100 million available, and no material core maturities for several years [34][35] Q&A Session Summary Question: How does the company expect to approach Q2 from a collectibility perspective? - The company will assess each tenant's financial strength and may consider moving leases to a cash basis for those at heightened risk [46][48] Question: What is the collection rate for digitally native retailers? - The collection rate for this group is expected to be low, but many have solid online sales and are communicating plans to reopen [49][50] Question: What is required to reopen high street locations compared to suburban shopping centers? - The company will ensure sidewalks are ready and work with retailers to facilitate safe reopening, with more support for local retailers [53][54] Question: What is the strategy for the $600 million dry powder in the fund? - The company plans to be opportunistic with remaining capital, monitoring the recovery and potential distressed opportunities [56][57] Question: What percentage of the portfolio is luxury or aspirational tenancy? - Luxury tenants make up just under 7% of the total portfolio, and management is cautious about their recovery [60][64] Question: What percentage of restaurant revenues is considered resilient? - About 8% of revenues come from restaurants, with 75% of that from quick-service establishments, which are expected to be more resilient [66]

Front Matter [General Information](index=1&type=section&id=General%20Information) This section covers the company's 10-Q quarterly report cover information, including company name, jurisdiction, contact details, file number, and confirmation as a Large Accelerated Filer - Company name: **ACADIA REALTY TRUST**[1](index=1&type=chunk) - Jurisdiction of incorporation: **Maryland**[1](index=1&type=chunk) - The company is designated as a **Large Accelerated Filer**[1](index=1&type=chunk) - As of April 30, 2020, **86,089,836 shares of common stock** were outstanding[1](index=1&type=chunk) [SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS](index=3&type=section&id=SPECIAL%20NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) This report contains forward-looking statements based on certain assumptions, involving known and unknown risks, uncertainties, and other factors that could cause actual results to differ materially from expectations - Forward-looking statements are based on specific assumptions, describing the company's future plans, strategies, and expectations[3](index=3&type=chunk) - Risk factors include economic, political, and social uncertainties from the **COVID-19 pandemic**, such as government relief effectiveness, duration of lockdowns, rent payment obligations, property sale uncertainties, development project return impacts, and broader economic contraction and unemployment rate increases[3](index=3&type=chunk) - Other risks include tenant performance, capital market access, business strategy implementation, changing economic conditions, increased borrowing costs, debt repayment ability, joint venture investments, lease renewals, environmental issues, natural disasters, REIT qualification maintenance, information technology security breaches, and loss of key executives[3](index=3&type=chunk) - The company undertakes no obligation to publicly update or revise any forward-looking statements[4](index=4&type=chunk) [SPECIAL NOTE REGARDING CERTAIN REFERENCES](index=3&type=section&id=SPECIAL%20NOTE%20REGARDING%20CERTAIN%20REFERENCES) This section clarifies that all references to "Notes" in the report refer to the footnotes to the consolidated financial statements under "Financial Statements" in Part I - All "Notes" in the report refer to the footnotes to the consolidated financial statements under "Financial Statements" in Part I[5](index=5&type=chunk) Part I [ITEM 1. FINANCIAL STATEMENTS.](index=3&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS.) This section presents the company's unaudited consolidated financial statements as of March 31, 2020, and December 31, 2019, including balance sheets, statements of operations, comprehensive (loss) income, shareholders' equity, and cash flows [CONSOLIDATED BALANCE SHEETS](index=3&type=section&id=CONSOLIDATED%20BALANCE%20SHEETS) This section provides the company's consolidated balance sheets, detailing assets, liabilities, and equity as of March 31, 2020, and December 31, 2019 Consolidated Balance Sheets Key Data (As of March 31, 2020, and December 31, 2019) | Metric | March 31, 2020 (Thousands of Dollars) | December 31, 2019 (Thousands of Dollars) | | :--- | :--- | :--- | | **Assets** | | | | Real estate investments, net | 3,568,874 | 3,609,315 | | Notes receivable, net | 173,159 | 114,943 | | Investments in and advances to unconsolidated affiliates | 294,195 | 305,097 | | Cash and cash equivalents | 23,404 | 15,845 | | **Total Assets** | **4,305,138** | **4,309,114** | | **Liabilities** | | | | Mortgage and other notes payable, net | 1,170,622 | 1,170,076 | | Unsecured notes payable, net | 480,658 | 477,320 | | Unsecured revolving credit facility | 174,700 | 60,800 | | Accounts payable and other liabilities | 425,330 | 371,516 | | **Total Liabilities** | **2,293,578** | **2,122,149** | | **Equity** | | | | Total Acadia shareholders' equity | 1,434,464 | 1,542,308 | | Noncontrolling interests | 577,096 | 644,657 | | **Total Equity** | **2,011,560** | **2,186,965** | | **Total Liabilities and Equity** | **4,305,138** | **4,309,114** | [CONSOLIDATED STATEMENTS OF OPERATIONS](index=5&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) This section presents the company's consolidated statements of operations, outlining revenues, expenses, and net (loss) income for the three months ended March 31, 2020, and 2019 Consolidated Statements of Operations Key Data (For the Three Months Ended March 31, 2020, and 2019) | Metric | 2020 (Thousands of Dollars) | 2019 (Thousands of Dollars) | | :--- | :--- | :--- | | Rental income | 70,457 | 73,188 | | Other income | 963 | 797 | | **Total Revenues** | **71,420** | **73,985** | | Depreciation and amortization | 33,377 | 30,333 | | General and administrative expenses | 9,070 | 8,323 | | Real estate taxes | 10,447 | 9,603 | | Property operating expenses | 13,320 | 11,532 | | Impairment charges | 51,549 | — | | **Total Operating Expenses** | **117,763** | **59,791** | | Gain on disposition of property | — | 2,014 | | **Operating (Loss) Income** | **(46,343)** | **16,208** | | Equity in earnings of unconsolidated affiliates | 1,255 | 2,271 | | Interest income | 2,929 | 2,270 | | Other expenses | (530) | — | | Interest expense | (18,302) | (17,859) | | **(Loss) Income from Continuing Operations Before Income Taxes** | **(60,991)** | **2,890** | | Income tax benefit | 952 | 46 | | **Net (Loss) Income** | **(60,039)** | **2,936** | | Net loss attributable to noncontrolling interests | 51,625 | 9,261 | | **Net (Loss) Income Attributable to Acadia** | **(8,414)** | **12,197** | | **Basic and Diluted (Loss) Earnings Per Share** | **(0.10)** | **0.15** | [CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME](index=6&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20COMPREHENSIVE%20(LOSS)%20INCOME) This section details the company's consolidated statements of comprehensive (loss) income, including net (loss) income and other comprehensive loss components Consolidated Statements of Comprehensive (Loss) Income Key Data (For the Three Months Ended March 31, 2020, and 2019) | Metric | 2020 (Thousands of Dollars) | 2019 (Thousands of Dollars) | | :--- | :--- | :--- | | Net (loss) income | $(60,039) | $2,936 | | Other comprehensive loss: | | | | Unrealized loss on valuation of swap agreements | $(74,774) | $(13,306) | | Reclassification of realized interest on swap agreements | $977 | $(551) | | **Other Comprehensive Loss** | **$(73,797)** | **$(13,857)** | | **Comprehensive Loss** | **$(133,836)** | **$(10,921)** | | Comprehensive loss attributable to noncontrolling interests | $70,882 | $11,581 | | **Comprehensive (Loss) Income Attributable to Acadia** | **$(62,954)** | **$660** | [CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY](index=7&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20SHAREHOLDERS'%20EQUITY) This section outlines changes in the company's consolidated shareholders' equity for the three months ended March 31, 2020, and 2019, including stock repurchases and dividends Summary of Consolidated Shareholders' Equity Changes (For the Three Months Ended March 31, 2020, and 2019) | Equity Item | Balance January 1, 2020 (Thousands of Dollars) | Balance March 31, 2020 (Thousands of Dollars) | Balance January 1, 2019 (Thousands of Dollars) | Balance March 31, 2019 (Thousands of Dollars) | | :--- | :--- | :--- | :--- | :--- | | Common stock | $87 | $86 | $82 | $83 | | Additional paid-in capital | $1,706,357 | $1,686,794 | $1,548,603 | $1,577,503 | | Accumulated other comprehensive (loss) income | $(31,175) | $(85,715) | $516 | $(11,021) | | Accumulated earnings in excess of distributions | $(132,961) | $(166,701) | $(89,696) | $(100,634) | | **Total Acadia shareholders' equity** | **$1,542,308** | **$1,434,464** | **$1,459,505** | **$1,465,931** | | Noncontrolling interests | $644,657 | $577,096 | $622,442 | $640,421 | | **Total Equity** | **$2,186,965** | **$2,011,560** | **$2,081,947** | **$2,106,352** | - In Q1 2020, the company repurchased **1,219,065 shares of common stock** totaling **$22,352 thousand**[11](index=11&type=chunk) - In Q1 2020, the company declared and paid dividends/distributions of **$26,786 thousand** (**$0.29 per common share/OP unit**)[11](index=11&type=chunk) [CONSOLIDATED STATEMENTS OF CASH FLOWS](index=8&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) This section presents the company's consolidated statements of cash flows, categorizing cash movements into operating, investing, and financing activities Consolidated Statements of Cash Flows Key Data (For the Three Months Ended March 31, 2020, and 2019) | Cash Flow Activity | 2020 (Thousands of Dollars) | 2019 (Thousands of Dollars) | | :--- | :--- | :--- | | Net cash from operating activities | $27,735 | $19,785 | | Net cash from investing activities | $(90,485) | $(93,013) | | Net cash from financing activities | $70,356 | $78,672 | | **Increase in Cash and Restricted Cash** | **$7,606** | **$5,444** | | Cash and restricted cash at beginning of period | $30,010 | $34,848 | | Cash and restricted cash at end of period | $37,616 | $40,292 | - In Q1 2020, net cash from operating activities increased primarily due to higher depreciation and amortization, impairment charges, and credit loss allowances, partially offset by net loss and a decrease in accounts payable and accrued expenses[13](index=13&type=chunk) - In Q1 2020, cash outflows from investing activities were mainly for **real estate acquisitions ($19,088 thousand)**, **development, construction, and property improvement costs ($13,333 thousand)**, and **issuance or advances of notes receivable ($59,000 thousand)**[13](index=13&type=chunk) - In Q1 2020, cash inflows from financing activities primarily came from **unsecured debt proceeds ($122,245 thousand)** and **noncontrolling interest capital contributions ($7,268 thousand)**, partially offset by **common stock repurchases ($22,352 thousand)** and **dividends paid to common shareholders ($25,245 thousand)**[13](index=13&type=chunk) [NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)](index=10&type=section&id=NOTES%20TO%20CONSOLIDATED%20FINANCIAL%20STATEMENTS%20(Unaudited)) This section provides detailed notes to the consolidated financial statements, covering organization, accounting policies, real estate investments, debt, and subsequent events [1. Organization, Basis of Presentation and Summary of Significant Accounting Policies](index=10&type=section&id=1.%20Organization,%20Basis%20of%20Presentation%20and%20Summary%20of%20Significant%20Accounting%20Policies) This section describes the company's organizational structure, basis of financial statement presentation, and a summary of its significant accounting policies - Acadia Realty Trust is a fully integrated equity real estate investment trust (REIT) focused on owning, acquiring, developing, and managing retail properties in high-barrier-to-entry, supply-constrained, and densely populated urban areas in the United States[16](index=16&type=chunk) - The company controls approximately **94% of the operating partnership interests** through its operating partnership and its subsidiaries, utilizing an umbrella partnership REIT (UPREIT) structure[17](index=17&type=chunk) - As of March 31, 2020, the company held interests in **131 properties** in its Core Portfolio and **57 properties** in its Opportunity Funds, totaling **188 properties**, primarily comprising street-retail and urban retail, and dense suburban shopping centers[17](index=17&type=chunk) - The company has three reportable operating segments: **Core Portfolio**, **Funds**, and **Structured Financing**[21](index=21&type=chunk) - The company adopted **ASU 2016-13 (Financial Instruments—Credit Losses)** and related amendments on January 1, 2020, recording a **$0.4 million loan loss allowance** adjusted through accumulated earnings in excess of distributions[28](index=28&type=chunk) - In Q1 2020, the company recorded a **$0.5 million credit loss allowance**[28](index=28&type=chunk) [2. Real Estate](index=13&type=section&id=2.%20Real%20Estate) This section provides details on the company's real estate investments, including net property values, acquisitions, and dispositions Net Real Estate Investments (As of March 31, 2020, and December 31, 2019) | Real Estate Item | March 31, 2020 (Thousands of Dollars) | December 31, 2019 (Thousands of Dollars) | | :--- | :--- | :--- | | Land | $756,833 | $756,297 | | Buildings and improvements | $2,740,001 | $2,740,479 | | Tenant improvements | $179,356 | $173,686 | | Construction in progress | $6,659 | $13,617 | | Right-of-use assets - finance leases | $102,050 | $102,055 | | Right-of-use assets - operating leases, net | $59,386 | $60,006 | | **Total** | **$3,844,285** | **$3,846,140** | | Less: Accumulated depreciation and amortization | $(513,242) | $(490,227) | | **Operating real estate, net** | **$3,331,043** | **$3,355,913** | | Real estate under development | $237,831 | $253,402 | | **Real Estate Investments, Net** | **$3,568,874** | **$3,609,315** | Consolidated Retail Property Acquisitions in Q1 2020 | Property and Location | Acquisition Percentage | Acquisition Date | Purchase Price (Thousands of Dollars) | | :--- | :--- | :--- | :--- | | Soho Acquisitions - 37 Greene Street - New York, NY | 100% | January 9, 2020 | $15,689 | | 917 W. Armitage - Chicago, IL | 100% | February 13, 2020 | $3,515 | | **Total 2020 Acquisitions** | | | **$19,204** | - In Q1 2020, the company did not make any property dispositions[45](index=45&type=chunk) - In Q1 2020, the company placed a Fund III project (Cortlandt Crossing) into service[49](index=49&type=chunk) [3. Notes Receivable, Net](index=16&type=section&id=3.%20Notes%20Receivable,%20Net) This section details the company's notes receivable, net of credit loss allowances, and significant lending activities Notes Receivable, Net (As of March 31, 2020, and December 31, 2019) | Description | March 31, 2020 (Thousands of Dollars) | December 31, 2019 (Thousands of Dollars) | | :--- | :--- | :--- | | Core Portfolio | $135,467 | $76,467 | | Fund II | $33,316 | $33,170 | | Fund III | $5,306 | $5,306 | | **Total Notes Receivable** | **$174,089** | **$114,943** | | Allowance for credit losses | $(930) | — | | **Notes Receivable, Net** | **$173,159** | **$114,943** | - In Q1 2020, the company originated a **$54 million loan** at a **9% interest rate** in the form of a redeemable preferred equity investment in the 850 Third Avenue property in Brooklyn[54](index=54&type=chunk) - In Q1 2020, the company originated a new **$5 million Core note** to its joint venture partner at an **8% interest rate**[54](index=54&type=chunk) - As of March 31, 2020, a **Core note totaling $21 million** was in default[55](index=55&type=chunk) - The company calculated an allowance for credit losses for its structured financing portfolio's amortized cost basis under ASC 326, with total credit loss allowances for non-collateral dependent loans amounting to **$0.9 million** as of March 31, 2020[59](index=59&type=chunk) [4. Investments in and Advances to Unconsolidated Affiliates](index=18&type=section&id=4.%20Investments%20in%20and%20Advances%20to%20Unconsolidated%20Affiliates) This section outlines the company's investments in and advances to unconsolidated affiliates, primarily accounted for using the equity method Investments in and Advances to Unconsolidated Affiliates (As of March 31, 2020, and December 31, 2019) | Portfolio | March 31, 2020 (Thousands of Dollars) | December 31, 2019 (Thousands of Dollars) | | :--- | :--- | :--- | | Core Portfolio | $223,088 | $225,907 | | Fund III | $224 | $224 | | Fund IV | $38,411 | $39,885 | | Fund V | $32,857 | $38,649 | | Various (due from affiliates, other) | $(3,85) | $432 | | **Total Investments in and Advances to Unconsolidated Affiliates** | **$294,195** | **$305,097** | - The company primarily accounts for investments in and advances to unconsolidated affiliates using the **equity method**, as it has significant influence but no financial or operating control over them[61](index=61&type=chunk) - In Q1 2020, the company made an additional **$0.2 million investment** in Fifth Wall Ventures Retail Fund, L.P., bringing its total investment to **$2.0 million**[65](index=65&type=chunk) - In Q1 2020 and Q1 2019, the company received **$0.1 million** in property management, construction, development, leasing, and legal service fees from its unconsolidated partnership investments[78](index=78&type=chunk) Unconsolidated Affiliates Consolidated and Condensed Statements of Operations (For the Three Months Ended March 31, 2020, and 2019) | Metric | 2020 (Thousands of Dollars) | 2019 (Thousands of Dollars) | | :--- | :--- | :--- | | Total revenues | $24,112 | $19,973 | | Operating and other expenses | $(8,135) | $(5,106) | | Interest expense | $(5,489) | $(4,776) | | Depreciation and amortization | $(7,096) | $(4,792) | | **Net Income Attributable to Unconsolidated Affiliates** | **$3,392** | **$5,299** | | Company's equity share in net income of unconsolidated affiliates | $1,948 | $2,995 | | Amortization of basis differences | $(693) | $(724) | | **Company's Equity in Earnings of Unconsolidated Affiliates** | **$1,255** | **$2,271** | [5. Other Assets, Net and Accounts Payable and Other Liabilities](index=22&type=section&id=5.%20Other%20Assets,%20Net%20and%20Accounts%20Payable%20and%20Other%20Liabilities) This section provides a breakdown of other assets, net, and accounts payable and other liabilities, including derivative financial instruments Other Assets, Net (As of March 31, 2020, and December 31, 2019) | Item | March 31, 2020 (Thousands of Dollars) | December 31, 2019 (Thousands of Dollars) | | :--- | :--- | :--- | | Lease intangibles, net | $108,723 | $116,820 | | Deferred expenses, net | $30,212 | $28,746 | | Prepaid expenses | $14,948 | $18,873 | | Accrued interest income | $11,181 | $9,872 | | Derivative financial instruments | $14 | $2,583 | | **Total Other Assets, Net** | **$179,043** | **$190,658** | Accounts Payable and Other Liabilities (As of March 31, 2020, and December 31, 2019) | Item | March 31, 2020 (Thousands of Dollars) | December 31, 2019 (Thousands of Dollars) | | :--- | :--- | :--- | | Derivative financial instruments | $104,253 | $39,061 | | Lease intangible liabilities, net | $81,288 | $82,926 | | Lease liabilities - finance leases, net | $77,881 | $77,657 | | Accounts payable and accrued expenses | $64,701 | $68,838 | | Lease liabilities - operating leases, net | $56,387 | $56,762 | | Deferred revenue | $28,414 | $33,682 | | **Total Accounts Payable and Other Liabilities** | **$425,330** | **$371,516** | [6. Lease Intangibles](index=23&type=section&id=6.%20Lease%20Intangibles) This section details the net book value and amortization schedule of the company's lease intangible assets and liabilities Net Book Value of Amortizable Intangible Assets (As of March 31, 2020, and December 31, 2019) | Item | March 31, 2020 (Thousands of Dollars) | December 31, 2019 (Thousands of Dollars) | | :--- | :--- | :--- | | In-place lease intangibles | $105,054 | $112,853 | | Above-market rents | $3,669 | $3,967 | | **Total** | **$108,723** | **$116,820** | Net Book Value of Amortizable Intangible Liabilities (As of March 31, 2020, and December 31, 2019) | Item | March 31, 2020 (Thousands of Dollars) | December 31, 2019 (Thousands of Dollars) | | :--- | :--- | :--- | | Below-market rents | $(80,782) | $(82,406) | | Above-market ground leases | $(506) | $(520) | | **Total** | **$(81,288)** | **$(82,926)** | - In Q1 2020, the company acquired **$1.5 million** in in-place lease intangibles and **$1.4 million** in below-market rents, with weighted-average useful lives of **3.4 years** and **2.6 years**, respectively[88](index=88&type=chunk) Amortization Schedule for Lease Intangible Assets and Liabilities (As of March 31, 2020, in Thousands of Dollars) | Year Ended December 31 | Increase in Rental Revenue | Increase in Amortization | Decrease in Rental Expense | Net (Expense) Income | | :--- | :--- | :--- | :--- | :--- | | 2020 (remaining) | $5,656 | $(31,683) | $44 | $(25,983) | | 2021 | $7,172 | $(21,358) | $58 | $(14,128) | | 2022 | $6,427 | $(15,267) | $58 | $(8,782) | | 2023 | $6,063 | $(11,403) | $58 | $(5,282) | | 2024 | $5,621 | $(8,773) | $58 | $(3,094) | | Thereafter | $46,174 | $(16,570) | $230 | $29,834 | | **Total** | **$77,113** | **$(105,054)** | **$506** | **$(27,435)** | [7. Debt](index=24&type=section&id=7.%20Debt) This section summarizes the company's consolidated debt, including mortgage and unsecured notes, and its principal repayment schedule Summary of Consolidated Debt (As of March 31, 2020, and December 31, 2019) | Debt Type | March 31, 2020 (Thousands of Dollars) | December 31, 2019 (Thousands of Dollars) | | :--- | :--- | :--- | | Total mortgage notes payable | $1,170,622 | $1,170,076 | | Total unsecured notes payable | $480,658 | $477,320 | | Unsecured revolving credit facility | $174,700 | $60,800 | | **Total Debt** | **$1,834,375** | **$1,717,928** | | Net unamortized debt issuance costs | $(9,020) | $(10,383) | | Unamortized premium | $625 | $651 | | **Total Liabilities** | **$1,825,980** | **$1,708,196** | - As of March 31, 2020, the company had **$1,422.6 million (77.6%)** in fixed-rate debt (including floating-rate debt fixed through interest rate swap agreements) and **$411.7 million (22.4%)** in floating-rate debt[93](index=93&type=chunk)[252](index=252&type=chunk) - In Q1 2020, the company extended two Fund IV loans to **February and March 2021**[97](index=97&type=chunk) - In Q1 2020, the company entered into two swap agreements, each with a notional value of **$50 million**, effective in **April 2022** and **April 2023**, respectively[97](index=97&type=chunk) - A **$26.3 million mortgage loan** in the Core Portfolio was in default and subject to litigation as of both March 31, 2020, and December 31, 2019[100](index=100&type=chunk) Debt Principal Repayment Schedule (As of March 31, 2020, in Thousands of Dollars) | Year Ended December 31 | Amount | | :--- | :--- | | 2020 (remaining) | $393,596 | | 2021 | $333,837 | | 2022 | $281,578 | | 2023 | $415,476 | | 2024 | $211,991 | | Thereafter | $197,897 | | **Total** | **$1,834,375** | [8. Financial Instruments and Fair Value Measurements](index=27&type=section&id=8.%20Financial%20Instruments%20and%20Fair%20Value%20Measurements) This section discusses the company's financial instruments, fair value measurements, and the impact of derivative instruments - Fair value measurements utilize a three-level hierarchy: **Level 1 (quoted prices in active markets)**, **Level 2 (observable market inputs other than quoted prices)**, and **Level 3 (unobservable inputs)**[109](index=109&type=chunk) Fair Value of Derivative Financial Instruments (As of March 31, 2020, and December 31, 2019) | Item | March 31, 2020 (Thousands of Dollars) | December 31, 2019 (Thousands of Dollars) | | :--- | :--- | :--- | | Derivative financial assets | $14 | $2,583 | | Derivative financial liabilities | $(104,253) | $(39,061) | | **Net Derivative Financial Instruments** | **$(104,239)** | **$(36,478)** | - In March 2020, due to the **COVID-19 pandemic**, the company re-evaluated the holding periods and projected operating income for certain properties, resulting in **$51.5 million** in impairment charges recorded for Fund assets, with Acadia's proportionate share being **$12.4 million**[117](index=117&type=chunk)[118](index=118&type=chunk) - All of the company's derivative instruments are designated as **cash flow hedges** to hedge future cash outflows on floating-rate debt[120](index=120&type=chunk) - Approximately **$18 million** of accumulated other comprehensive (loss) income related to derivative instruments is expected to be reclassified to interest expense within the next twelve months[120](index=120&type=chunk) [9. Commitments and Contingencies](index=30&type=section&id=9.%20Commitments%20and%20Contingencies) This section outlines the company's contractual commitments for property construction and development, as well as ongoing legal contingencies - As of March 31, 2020, the company had approximately **$37.6 million** in property construction or development agreements with general contractors[128](index=128&type=chunk) - As of March 31, 2020, the company had **$14.6 million** in outstanding letters of credit[129](index=129&type=chunk) - The company is involved in various legal proceedings, including litigation related to a mortgage loan, but management expects the resolution of these matters not to have a **material adverse effect** on the company's consolidated financial position[127](index=127&type=chunk) [10. Shareholders' Equity, Noncontrolling Interests and Other Comprehensive Loss](index=31&type=section&id=10.%20Shareholders'%20Equity,%20Noncontrolling%20Interests%20and%20Other%20Comprehensive%20Loss) This section details changes in shareholders' equity, noncontrolling interests, and other comprehensive loss, including share repurchases and dividends - In Q1 2020, the company repurchased **1,219,065 shares of common stock** totaling **$22.4 million**, with **$122.6 million** remaining available under the repurchase program[134](index=134&type=chunk) - On February 26, 2020, the company declared a **$0.29 per common share/OP unit dividend**, paid on April 15, 2020[135](index=135&type=chunk) Changes in Accumulated Other Comprehensive Loss (For the Three Months Ended March 31, 2020, and 2019) | Item | 2020 (Thousands of Dollars) | 2019 (Thousands of Dollars) | | :--- | :--- | :--- | | Balance January 1 | $(31,175) | $516 | | Other comprehensive loss before reclassifications | $(74,774) | $(13,306) | | Reclassification of realized interest on swap agreements | $977 | $(551) | | **Net Other Comprehensive Loss for the Period** | **$(73,797)** | **$(13,857)** | | Net other comprehensive loss for the period attributable to noncontrolling interests | $19,257 | $2,320 | | **Balance March 31** | **$(85,715)** | **$(11,021)** | Summary of Noncontrolling Interests Changes (For the Three Months Ended March 31, 2020, and 2019) | Item | Balance January 1, 2020 (Thousands of Dollars) | Balance March 31, 2020 (Thousands of Dollars) | Balance January 1, 2019 (Thousands of Dollars) | Balance March 31, 2019 (Thousands of Dollars) | | :--- | :--- | :--- | :--- | :--- | | Operating partnership noncontrolling interests | $97,670 | $93,382 | $104,223 | $105,044 | | Partially owned affiliate noncontrolling interests | $546,987 | $483,714 | $518,219 | $535,377 | | **Total** | **$644,657** | **$577,096** | **$622,442** | **$640,421** | - As of March 31, 2020, the operating partnership had **3,205,931 common OP units** and **3,003,027 LTIP units** outstanding[138](index=138&type=chunk) [11. Leases](index=34&type=section&id=11.%20Leases) This section provides information on the company's leasing activities as both a lessor and lessee, including lease costs and obligations - In Q1 2020, as a lessor, the company recognized **$14.6 million** in variable lease income, primarily from real estate taxes and common area maintenance fees[143](index=143&type=chunk) - In Q1 2020, as a lessee, the company did not enter into any new lease contracts[144](index=144&type=chunk) Lease Costs (For the Three Months Ended March 31, 2020, and 2019) | Lease Cost Item | 2020 (Thousands of Dollars) | 2019 (Thousands of Dollars) | | :--- | :--- | :--- | | Finance lease costs | $1,507 | $1,339 | | Operating lease costs | $1,394 | $536 | | Variable lease costs | $16 | $32 | | **Total Lease Costs** | **$2,917** | **$1,907** | Lease Information (As of March 31, 2020, and 2019) | Information Item | March 31, 2020 | March 31, 2019 | | :--- | :--- | :--- | | Weighted-average remaining lease term for finance leases (years) | 42.3 | 47.4 | | Weighted-average remaining lease term for operating leases (years) | 34.1 | 8.4 | | Weighted-average discount rate for finance leases | 4.4% | 4.4% | | Weighted-average discount rate for operating leases | 5.8% | 5.0% | - In Q1 2020, due to business closures from the **COVID-19 pandemic**, the company re-evaluated its allowance for credit losses on straight-line rent receivables and recorded a **$2.5 million charge**[154](index=154&type=chunk) Schedule of Lease Obligations (As of March 31, 2020, in Thousands of Dollars) | Year Ended December 31 | Minimum Rental Income | Minimum Lease Payments | | :--- | :--- | :--- | | 2020 (remaining) | $151,850 | $5,251 | | 2021 | $201,955 | $6,823 | | 2022 | $182,397 | $6,832 | | 2023 | $161,665 | $6,825 | | 2024 | $139,995 | $7,008 | | Thereafter | $575,373 | $312,421 | | **Total** | **$1,413,235** | **$345,160** | [12. Segment Reporting](index=36&type=section&id=12.%20Segment%20Reporting) This section presents financial information by the company's three reportable segments: Core Portfolio, Funds, and Structured Financing - The company has three reportable segments: **Core Portfolio**, **Funds**, and **Structured Financing**[155](index=155&type=chunk) Segment Revenues (For the Three Months Ended March 31, 2020, and 2019) | Segment | 2020 (Thousands of Dollars) | 2019 (Thousands of Dollars) | | :--- | :--- | :--- | | Core Portfolio | $39,933 | $46,423 | | Funds | $31,487 | $27,562 | | Structured Financing | $0 | $0 | | Unallocated | $0 | $0 | | **Total Revenues** | **$71,420** | **$73,985** | Net (Loss) Income Attributable to Acadia by Segment (For the Three Months Ended March 31, 2020, and 2019) | Segment | 2020 (Thousands of Dollars) | 2019 (Thousands of Dollars) | | :--- | :--- | :--- | | Core Portfolio | $5,671 | $14,548 | | Funds | $(8,366) | $3,656 | | Structured Financing | $2,399 | $2,270 | | Unallocated | $(8,118) | $(8,277) | | **Total** | **$(8,414)** | **$12,197** | - The Funds segment recorded **$51,549 thousand** in impairment charges in Q1 2020, significantly impacting its net loss[157](index=157&type=chunk)[206](index=206&type=chunk) [13. Share Incentive and Other Compensation](index=38&type=section&id=13.%20Share%20Incentive%20and%20Other%20Compensation) This section details the company's equity incentive plans, including grants of LTIP units and restricted stock units, and related compensation expenses - In Q1 2020, the company granted **396,149 LTIP units** and **13,766 restricted stock units** to employees under its equity incentive plans[161](index=161&type=chunk) - Total long-term incentive compensation expense was **$2.1 million** in Q1 2020, compared to **$1.9 million** in the same period of 2019[163](index=163&type=chunk) - As of March 31, 2020, total unrecognized compensation cost related to unvested equity incentive arrangements was **$21.2 million**, expected to be recognized over a weighted-average period of **1.7 years**[168](index=168&type=chunk) - In Q1 2020, the company incurred **$0.1 million** in expenses for employee benefit plans, including the employee stock purchase plan and 401(k) plan[169](index=169&type=chunk) [14. Earnings Per Common Share](index=40&type=section&id=14.%20Earnings%20Per%20Common%20Share) This section outlines the calculation of basic and diluted earnings per common share, reflecting net income attributable to common shareholders - Basic earnings per common share is calculated by dividing net income attributable to common shareholders by the **weighted-average number of common shares outstanding**[171](index=171&type=chunk) - Diluted earnings per common share reflects the potential dilutive effect of convertible obligations and assumed exercise of securities, including restricted stock units issued under equity incentive plans[172](index=172&type=chunk) Basic and Diluted Earnings Per Share (For the Three Months Ended March 31, 2020, and 2019) | Metric | 2020 | 2019 | | :--- | :--- | :--- | | Net (loss) income attributable to Acadia (Thousands of Dollars) | $(8,414) | $12,197 | | Weighted-average shares outstanding for basic EPS | 86,971,552 | 82,032,852 | | **Basic and Diluted (Loss) Earnings Per Common Share** | **$(0.10)** | **$0.15** | [15. Subsequent Events](index=40&type=section&id=15.%20Subsequent%20Events) This section discloses significant events occurring after the reporting period, including property transactions, capital calls, and dividend policy changes - On April 1, 2020, the company converted its remaining **$38.7 million** in notes receivable (plus **$2.0 million** in accrued interest) into a **24.78% interest** in its joint venture partner's Town Center property, and will consolidate this property entity starting in Q2 2020[175](index=175&type=chunk)[176](index=176&type=chunk) - On April 7, 2020, Fund II requested an additional **$15.0 million capital call**, with the company's share being **$4.3 million**[177](index=177&type=chunk) - On April 13, 2020, Fund IV sold the Colonie Plaza property in Albany, New York, for **$15.3 million**[177](index=177&type=chunk) - On May 5, 2020, the company's Board of Trustees voted to **suspend distributions** on common shares and common OP units for Q2 2020 in response to the **COVID-19 pandemic**[179](index=179&type=chunk) - As of April 30, 2020, the company estimated approximately **34%** of its consolidated and unconsolidated annualized base rent came from "essential businesses" and **66%** from "non-essential businesses"[180](index=180&type=chunk) - As of April 30, 2020, the collection rate for April rents and recoveries exceeded **50%**[180](index=180&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.](index=43&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS.) This section discusses the company's financial condition and operating results for the three months ended March 31, 2020, focusing on COVID-19 impacts, investments, and liquidity [OVERVIEW](index=43&type=section&id=OVERVIEW) This section provides an overview of the company's property portfolio, business objectives, and growth strategies - As of March 31, 2020, the company owned or held interests in **188 properties** through its Core Portfolio and Funds, primarily comprising street-retail and urban retail, and dense suburban shopping centers[185](index=185&type=chunk) Property Portfolio Overview and Occupancy Rate (As of March 31, 2020) | Portfolio | Number of Operating Properties | Operating Gross Leasable Area (GLA) | Occupancy Rate | | :--- | :--- | :--- | :--- | | Core Portfolio | 126 | 5,644,467 | 92.2% | | Fund Portfolio | 53 | 7,468,046 | 86.8% | | **Total Core and Funds** | **179** | **13,112,513** | **89.2%** | - The company's primary business objective is to provide cash distributions to shareholders and create capital appreciation potential through the acquisition and management of commercial retail properties[187](index=187&type=chunk) - The company achieves growth through development and re-leasing activities in its Core Portfolio and opportunistic acquisitions in its Funds, while striving to maintain a **strong and flexible balance sheet**[187](index=187&type=chunk)[189](index=189&type=chunk) [SIGNIFICANT DEVELOPMENTS DURING THE THREE MONTHS ENDED MARCH 31, 2020](index=44&type=section&id=SIGNIFICANT%20DEVELOPMENTS%20DURING%20THE%20THREE%20MONTHS%20ENDED%20MARCH%2031,%202020) This section highlights key events and their impacts during the first quarter of 2020, particularly the effects of the COVID-19 pandemic - The **COVID-19 pandemic** led to government-imposed travel restrictions, stay-at-home orders, social distancing measures, and mandatory closures of "non-essential" businesses in most U.S. states, significantly impacting the company's retail tenants[190](index=190&type=chunk) - The company recorded **$51.5 million** in non-cash impairment charges as of March 31, 2020, with its proportionate share being **$12.4 million**, due to changes in estimated holding periods, net operating income, and capitalization rates for certain properties caused by the **COVID-19 pandemic**[190](index=190&type=chunk) - As of April 30, 2020, **66%** of retail tenants in the Core Portfolio and **71%** in the Fund Portfolio were considered "non-essential" businesses and remained closed, accounting for approximately **66% of total April rents**[190](index=190&type=chunk) - The company anticipates a **negative impact on revenues** in Q2 2020 and potentially for the full year, and is negotiating rent relief (primarily in the form of deferrals) with some tenants[190](index=190&type=chunk) - In Q1 2020, the company invested **$19.2 million** to acquire two Core properties, including 37 Greene Street in SoHo, New York, and a mixed-use building in Chicago[193](index=193&type=chunk) - In Q1 2020, the company repurchased **1,219,065 shares of common stock** totaling **$22.4 million**[196](index=196&type=chunk) [RESULTS OF OPERATIONS](index=45&type=section&id=RESULTS%20OF%20OPERATIONS) This section analyzes the company's operating results, including revenue and expense drivers, and segment performance Net (Loss) Income Attributable to Acadia by Segment (For the Three Months Ended March 31, 2020, and 2019) | Segment | 2020 (Thousands of Dollars) | 2019 (Thousands of Dollars) | Change (Thousands of Dollars) | | :--- | :--- | :--- | :--- | | Core Portfolio | $5,671 | $14,548 | $(8,877) | | Funds | $(8,366) | $3,656 | $(12,022) | | Structured Financing | $2,399 | $2,270 | $129 | | Unallocated | $(8,118) | $(8,277) | $159 | | **Total** | **$(8,414)** | **$12,197** | **$(20,611)** | - Core Portfolio revenue decreased by **$6.5 million**, primarily due to a **$5.7 million write-off of below-market rents** from tenant move-outs in 2019 and a **$4.3 million increase in credit loss allowances** in 2020, mainly related to the **COVID-19 pandemic**[199](index=199&type=chunk) - Fund segment revenue increased by **$3.9 million**, primarily benefiting from **Fund property acquisitions in 2019**, partially offset by a **$1.5 million decrease** from Fund property dispositions[203](index=203&type=chunk) - The Fund segment recorded **$51.5 million** in impairment charges, primarily involving 654 Broadway and Cortlandt Crossing in Fund III, and 801 Madison and 146 Geary in Fund IV[206](index=206&type=chunk) - Interest income from the Structured Financing portfolio increased by **$0.6 million**, mainly due to **$1.3 million** from new notes issued in 2020 and 2019, partially offset by a **$0.9 million decrease** from Fund IV note repayments in 2019[210](index=210&type=chunk) [SUPPLEMENTAL FINANCIAL MEASURES](index=47&type=section&id=SUPPLEMENTAL%20FINANCIAL%20MEASURES) This section presents supplemental financial metrics such as Net Operating Income (NOI) and Funds From Operations (FFO) to assess operational performance - Net Operating Income (NOI) and rent spreads on new and renewal leases are considered supplemental disclosures for measuring the **Core Portfolio's operating performance**[213](index=213&type=chunk) Core Portfolio Same-Property NOI (For the Three Months Ended March 31, 2020, and 2019) | Metric | 2020 (Thousands of Dollars) | 2019 (Thousands of Dollars) | Year-over-Year Change | | :--- | :--- | :--- | :--- | | Core Portfolio NOI | $34,737 | $33,665 | 3.2% | | Less: Excluded properties | $(3,443) | $(1,934) | | | **Same-Property NOI** | **$31,294** | **$31,731** | **(1.4)%** | Core Portfolio Rent Spreads on New and Renewal Leases (For the Three Months Ended March 31, 2020) | Metric | Cash Basis | Straight-Line Basis | | :--- | :--- | :--- | | Percentage increase in base rent | -0.3% | 11.8% | | Average cost per square foot | $7.58 | $7.58 | | Weighted-average lease term (years) | 7.9 | 7.9 | Funds From Operations (FFO) (For the Three Months Ended March 31, 2020, and 2019) | Metric | 2020 (Thousands of Dollars) | 2019 (Thousands of Dollars) | | :--- | :--- | :--- | | Net (loss) income attributable to Acadia | $(8,414) | $12,197 | | Real estate depreciation and amortization of lease costs (net of noncontrolling interests' share) | $24,088 | $21,999 | | Impairment charges (net of noncontrolling interests' share) | $12,400 | — | | Gain on disposition of property (net of noncontrolling interests' share) | — | $(384) | | (Loss) income attributable to common OP unit holders | $(462) | $795 | | Distributions - preferred OP units | $126 | $135 | | **Funds From Operations Attributable to Common Shareholders and Common OP Unit Holders** | **$27,738** | **$34,742** | | **Diluted FFO Per Share** | **$0.30** | **$0.39** | [LIQUIDITY AND CAPITAL RESOURCES](index=51&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) This section discusses the company's liquidity sources and uses, capital commitments, debt structure, and cash flow activities - The company's primary uses of liquidity include distributions to shareholders and OP unit holders, property investments, Fund capital commitments, debt repayments, and stock repurchases[224](index=224&type=chunk) - The company has **suspended distributions** on common shares and common OP units for Q2 2020[225](index=225&type=chunk) - As of March 31, 2020, the company's remaining capital commitments to Funds totaled **$83.9 million**[227](index=227&type=chunk) - As of March 31, 2020, capitalized costs for the company's development activities totaled **$4.6 million**. The estimated total cost to complete these projects by 2022 is **$130.2 million to $169.1 million**, with the company's share being approximately **$86.6 million to $106.1 million**[229](index=229&type=chunk) Summary of Consolidated Debt (As of March 31, 2020, and December 31, 2019) | Debt Type | March 31, 2020 (Thousands of Dollars) | December 31, 2019 (Thousands of Dollars) | | :--- | :--- | :--- | | Total fixed and effectively fixed-rate debt | $1,422,627 | $1,403,324 | | Total floating-rate debt | $411,748 | $314,604 | | **Total Debt** | **$1,834,375** | **$1,717,928** | | Net unamortized debt issuance costs | $(9,020) | $(10,383) | | Unamortized premium | $625 | $651 | | **Total Liabilities** | **$1,825,980** | **$1,708,196** | - The company's primary capital sources include the issuance of public equity and OP units, issuance of secured and unsecured debt, uncalled capital commitments from Fund noncontrolling interests, sales of existing properties, repayment of structured financing investments, and cash on hand and future cash flows from operations[235](index=235&type=chunk) Historical Cash Flows (For the Three Months Ended March 31, 2020, and 2019) | Cash Flow Activity | 2020 (Millions of Dollars) | 2019 (Millions of Dollars) | Difference (Millions of Dollars) | | :--- | :--- | :--- | :--- | | Net cash from operating activities | $27.7 | $19.8 | $7.9 | | Net cash from investing activities | $(90.5) | $(93.0) | $2.5 | | Net cash from financing activities | $70.4 | $78.7 | $(8.3) | | **Increase in Cash and Restricted Cash** | **$7.6** | **$5.4** | **$2.2** | [CONTRACTUAL OBLIGATIONS](index=54&type=section&id=CONTRACTUAL%20OBLIGATIONS) This section summarizes the company's contractual obligations, including debt principal, interest, lease obligations, and construction commitments Summary of Contractual Obligations (As of March 31, 2020, in Millions of Dollars) | Contractual Obligation | Total | Less than 1 Year | 1 to 3 Years | 3 to 5 Years | More than 5 Years | | :--- | :--- | :--- | :--- | :--- | :--- | | Debt principal obligations | $1,834.4 | $497.2 | $916.2 | $283.8 | $137.2 | | Debt interest obligations | $199.8 | $62.1 | $77.5 | $32.1 | $28.1 | | Lease obligations | $345.2 | $5.3 | $13.7 | $13.8 | $312.4 | | Construction commitments | $37.6 | $37.6 | — | — | — | | **Total** | **$2,417.0** | **$602.2** | **$1,007.4** | **$329.7** | **$477.7** | - As of March 31, 2020, all remaining development and redevelopment costs (discretionary expenditures) were temporarily on hold pending a recovery in tenant interest due to the **COVID-19 pandemic**[245](index=245&type=chunk) [OFF-BALANCE SHEET ARRANGEMENTS](index=54&type=section&id=OFF-BALANCE%20SHEET%20ARRANGEMENTS) This section describes the company's off-balance sheet arrangements, primarily investments in unconsolidated joint ventures - The company invests through joint ventures and accounts for them using the **equity method**, so the assets and liabilities of these joint ventures are not reflected in the company's financial statements[246](index=246&type=chunk) Operating Partnership's Proportionate Share of Non-Recourse Mortgage Debt in Unconsolidated Partnerships (As of March 31, 2020, in Millions of Dollars) | Investment Project | Proportionate Share of Mortgage Debt | | :--- | :--- | | 650 Bald Hill Road | $3.5 | | Eden Square | $5.5 | | Promenade at Manassas | $5.9 | | 3104 M Street | $0.9 | | Family Center at Riverdale | $5.8 | | Gotham Plaza | $9.5 | | Renaissance Portfolio | $32.0 | | Crossroads | $31.6 | | Tri-City Plaza | $6.4 | | Frederick Crossing | $4.4 | | Frederick County Square | $2.7 | | 840 N. Michigan | $65.0 | | Georgetown Portfolio | $8.0 | | **Total** | **$181.2** | [CRITICAL ACCOUNTING POLICIES](index=55&type=section&id=CRITICAL%20ACCOUNTING%20POLICIES) This section outlines the critical accounting policies that involve significant estimates and judgments in preparing the financial statements - Management's discussion and analysis of financial condition and results of operations are based on consolidated financial statements prepared in accordance with **U.S. GAAP**, involving estimates and judgments regarding real estate valuation, depreciation lives, revenue recognition, and collectibility of notes and rents[249](index=249&type=chunk) - No significant changes occurred in the critical accounting policies disclosed in the company's **2019 Form 10-K**[249](index=249&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.](index=55&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK.) This section discloses the company's primary market risk exposure to interest rate changes and its strategies for managing this risk through fixed-rate debt and derivatives - The company's primary market risk exposure is to **changes in interest rates** related to mortgage and other debt[251](index=251&type=chunk) - As of March 31, 2020, **77.6%** of the company's total debt was at **fixed interest rates** (including rates fixed through derivative financial instruments), and **22.4%** was at **floating interest rates**[252](index=252&type=chunk) - As of March 31, 2020, the company held **41 interest rate swap agreements** and **4 interest rate cap agreements** to hedge **$1,038.8 million** and **$143.6 million** of LIBOR-based floating-rate debt, respectively[252](index=252&type=chunk) - If LIBOR were to increase by **100 basis points**, interest expense on the company's **$411.7 million** in floating-rate debt would increase by **$4.1 million annually**, with the company's share being **$1.0 million**[256](index=256&type=chunk) - As of March 31, 2020, the fair value of the company's total outstanding debt would decrease by approximately **$13.0 million** with a **1% increase in interest rates**, and increase by approximately **$27.4 million** with a **1% decrease in interest rates**[257](index=257&type=chunk) - From December 31, 2019, to March 31, 2020, the company's absolute interest rate exposure increased, with floating-rate debt rising from **$314.6 million to $411.7 million**, and its proportion of total debt increasing from **18.3% to 22.4%**[262](index=262&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES.](index=57&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES.) This section confirms the effectiveness of the company's disclosure controls and procedures and reports no significant changes in internal control over financial reporting - As of March 31, 2020, the company's disclosure controls and procedures were deemed **effective**[264](index=264&type=chunk) - No significant changes occurred in internal control over financial reporting during the reporting period[265](index=265&type=chunk) Part II - Other Information [ITEM 1. LEGAL PROCEEDINGS.](index=57&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS.) This section discloses the company's involvement in legal proceedings, including a significant mortgage default lawsuit, and management's assessment of their financial impact - The company is involved in a **$26.3 million mortgage loan default lawsuit**, where the Delaware Superior Court ruled Brandywine Holdings and the Operating Partnership liable for recourse[266](index=266&type=chunk) - Management expects that the resolution of existing legal proceedings will not have a **material adverse effect** on the company's consolidated financial position[267](index=267&type=chunk) [ITEM 1A. RISK FACTORS.](index=57&type=section&id=ITEM%201A.%20RISK%20FACTORS.) This section updates the company's risk factors, emphasizing the significant adverse impact of the COVID-19 pandemic on its business, financial condition, and operations - The **COVID-19 pandemic** poses a **significant adverse impact** on the company's and its tenants' business, financial condition, results of operations, cash flows, liquidity, and access to capital markets[270](index=270&type=chunk)[271](index=271&type=chunk) - As of April 30, 2020, **66%** of retail tenants in the Core Portfolio and **71%** in the Fund Portfolio were considered non-essential businesses and remained closed, accounting for approximately **66% of total April rents**[272](index=272&type=chunk) - The company anticipates a **negative impact on revenues** in Q2 2020 and potentially for the full year, and is negotiating rent relief (primarily in the form of deferrals) with some tenants[272](index=272&type=chunk) - The pandemic may affect tenant lease renewal ability, development project returns, property sale prices, capital market access, debt repayment capacity, and financial covenant compliance[273](index=273&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.](index=59&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS.) This section states that information regarding unregistered sales of equity securities and use of proceeds is not applicable - This section is **not applicable**[276](index=276&type=chunk) [ITEM 3. DEFAULTS UPON SENIOR SECURITIES.](index=59&type=section&id=ITEM%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES.) This section states that information regarding defaults upon senior securities is not applicable - This section is **not applicable**[276](index=276&type=chunk) [ITEM 4. MINE SAFETY DISCLOSURES.](index=59&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES.) This section states that information regarding mine safety disclosures is not applicable - This section is **not applicable**[276](index=276&type=chunk) [ITEM 5. OTHER INFORMATION.](index=59&type=section&id=ITEM%205.%20OTHER%20INFORMATION.) This section states that no other information is applicable - This section is **not applicable**[276](index=276&type=chunk) [ITEM 6. EXHIBITS.](index=59&type=section&id=ITEM%206.%20EXHIBITS.) This section lists all exhibits filed with the quarterly report, including equity incentive plan agreements and certification documents - Exhibits include **Long-Term Incentive Plan Award Agreements** (time-based and time-and-performance-based)[277](index=277&type=chunk) - Exhibits contain **certification documents** from the Chief Executive Officer and Chief Financial Officer under Sections 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934 and Sections 302 and 906 of the Sarbanes-Oxley Act[277](index=277&type=chunk) - Exhibits also include **XBRL instance document** and **taxonomy extension documents** (Schema, Calculation, Definitions, Labels, Presentation)[277](index=277&type=chunk) Signatures [SIGNATURES](index=60&type=section&id=SIGNATURES) This report was formally signed on May 6, 2020, by Kenneth F. Bernstein, John Gottfried, and Richard Hartmann of Acadia Realty Trust - This report was signed on **May 6, 2020**[279](index=279&type=chunk) - Signatories include **Kenneth F. Bernstein** (Chief Executive Officer, President, and Trustee), **John Gottfried** (Senior Vice President and Chief Financial Officer), and **Richard Hartmann** (Senior Vice President and Chief Accounting Officer)[279](index=279&type=chunk)

PART I [Business Overview](index=4&type=section&id=1.%20Business) Acadia Realty Trust is a REIT focused on acquiring, developing, and managing high-quality retail properties in dense U.S. metropolitan areas through its Core Portfolio and opportunistic Funds - Acadia Realty Trust was formed on March 4, 1993, as a Maryland real estate investment trust (REIT)[4](index=4&type=chunk) - The Trust is a fully integrated REIT focused on owning, acquiring, developing, and managing high-quality retail properties in high-barrier-to-entry, densely-populated U.S. metropolitan areas[4](index=4&type=chunk) - As of December 31, 2019, the Trust controlled **95%** of the Operating Partnership as the sole general partner, utilizing an UPREIT structure[4](index=4&type=chunk) - The company operates through its Core Portfolio and generates growth via Funds, co-investing with institutional partners[4](index=4&type=chunk)[5](index=5&type=chunk) - Key business objectives include acquiring and managing commercial retail properties for shareholder distributions and capital appreciation, focusing on accretive development, re-tenanting, and opportunistic acquisitions[5](index=5&type=chunk) - A strong and flexible balance sheet is maintained through conservative financial practices and diverse capital sources, including public equity, unsecured debt, and mortgage loans[5](index=5&type=chunk)[8](index=8&type=chunk) [General Information](index=4&type=section&id=GENERAL) Acadia Realty Trust, a Maryland REIT formed in 1993, operates as a fully integrated entity focused on high-quality retail properties in dense U.S. metropolitan areas through its Operating Partnership - Acadia Realty Trust was formed on March 4, 1993, as a Maryland real estate investment trust (REIT)[4](index=4&type=chunk) - The Trust is a fully integrated REIT focused on owning, acquiring, developing, and managing high-quality retail properties in high-barrier-to-entry, densely-populated U.S. metropolitan areas[4](index=4&type=chunk) - As of December 31, 2019, the Trust controlled **95%** of the Operating Partnership as the sole general partner, utilizing an UPREIT structure[4](index=4&type=chunk) [Business Objectives and Strategies](index=4&type=section&id=BUSINESS%20OBJECTIVES%20AND%20STRATEGIES) Acadia's core objective is to acquire and manage commercial retail properties for cash distributions and capital appreciation through its Core Portfolio, opportunistic Funds, and a strong balance sheet - Primary business objective: acquire and manage commercial retail properties for cash distributions and capital appreciation[5](index=5&type=chunk) - Strategies include operating a Core Portfolio of high-quality retail properties, generating growth through opportunistic Funds (value-add, distressed retailer-anchored, other opportunistic acquisitions), and maintaining a strong, flexible balance sheet[5](index=5&type=chunk) - The Fund strategy emphasizes opportunistic, disciplined acquisitions with high value creation potential, executed and realized through asset sales[5](index=5&type=chunk) - Capital strategy emphasizes conservative financial practices, moderate leverage, and access to diverse capital sources including public equity, unsecured debt, mortgage/construction loans, and OP Units[8](index=8&type=chunk) [Investing Activities](index=6&type=section&id=INVESTING%20ACTIVITIES) In 2019, Acadia invested **$185.9 million** in its Core Portfolio and **$318.0 million** in Funds, while disposing of properties totaling **$109.4 million** and engaging in structured financing - During 2019, Acadia invested **$185.9 million** in its Core Portfolio, including unconsolidated leasehold interests and nine consolidated properties[9](index=9&type=chunk) - In 2019, Fund V invested **$318.0 million** in seven properties (four unconsolidated, three consolidated)[9](index=9&type=chunk) - Dispositions in 2019 included the sale of Pacesetter Park for **$22.6 million** (Core Portfolio) and Fund properties totaling **$86.8 million**[9](index=9&type=chunk)[93](index=93&type=chunk) - As of December 31, 2019, Acadia had **$76.5 million** invested in its Structured Finance Program, providing **$13.5 million** in seller financing and advancing **$4.3 million** on an existing loan[9](index=9&type=chunk) - As of December 31, 2019, five Fund development projects and five Core development/redevelopment projects were underway[9](index=9&type=chunk) [Inflation](index=7&type=section&id=INFLATION) Acadia mitigates inflation risks through long-term lease escalation clauses, market-rate rent increases on shorter leases, and tenant-covered operating expenses - Long-term leases contain escalation clauses (often related to CPI) and percentage rents to mitigate inflation's impact on net income[10](index=10&type=chunk) - Many leases are for less than ten years, allowing for rent increases at market rates upon re-rental[10](index=10&type=chunk) - Most leases require tenants to pay their share of operating expenses (common area maintenance, real estate taxes, insurance, utilities), reducing exposure to cost increases from inflation[10](index=10&type=chunk) [Environmental Laws](index=7&type=section&id=ENVIRONMENTAL%20LAWS) Information on environmental laws and their potential business impact is detailed in the 'Risk Factors' section - Information on environmental laws and their impact is referenced under 'Item 1A. Risk Factors — We are exposed to possible liability relating to environmental matters'[11](index=11&type=chunk) [Competition](index=7&type=section&id=COMPETITION) Acadia faces significant competition in property acquisition and tenant leasing, primarily based on location, occupancy costs, and property design - Numerous entities compete with Acadia in seeking properties for acquisition and tenants for leasing, including other REITs, financial institutions, insurance companies, pension funds, private companies, and individuals[11](index=11&type=chunk) - Competition for tenants is primarily based on location, total occupancy costs (base rent and operating expenses), and the design and condition of improvements[11](index=11&type=chunk) [Corporate Headquarters and Employees](index=7&type=section&id=CORPORATE%20HEADQUARTERS%20AND%20EMPLOYEES) Acadia Realty Trust's executive office is in Rye, New York, with **118** employees as of December 31, 2019, none of whom are unionized - Executive office located at 411 Theodore Fremd Avenue, Suite 300, Rye, New York 10580[12](index=12&type=chunk) - As of December 31, 2019, the company had **118** employees (**92** at executive office, **26** at regional offices)[12](index=12&type=chunk) - No employees are covered by collective bargaining agreements; management believes employee relations are good[12](index=12&type=chunk) [Company Website](index=7&type=section&id=COMPANY%20WEBSITE) Acadia Realty Trust's SEC filings are available on its website and the SEC's website, with paper copies of the 10-K available upon request - All SEC filings (10-K, 10-Q, 8-K) are available at www.acadiarealty.com and www.sec.gov[13](index=13&type=chunk) - Paper copies of the Form 10-K can be requested from Jason Blacksberg, Corporate Secretary[13](index=13&type=chunk) [Code of Ethics and Whistleblower Policies](index=7&type=section&id=CODE%20OF%20ETHICS%20AND%20WHISTLEBLOWER%20POLICIES) Acadia's Board of Trustees adopted a Code of Business Conduct and Ethics and a Whistleblower Policy, accessible on its website, with future amendments disclosed online - Board of Trustees adopted a Code of Business Conduct and Ethics and a Whistleblower Policy[14](index=14&type=chunk) - Documents are available in the Investor Information section of the company website[14](index=14&type=chunk) - Future amendments or waivers (for senior executive financial officers) will be disclosed on the website within four business days[14](index=14&type=chunk) [Risk Factors](index=7&type=section&id=1A.%20Risk%20Factors) This section outlines material risks to Acadia Realty Trust's financial condition, cash flows, operations, and shareholder distributions, categorized by business, structure, and REIT status - Risk factors could adversely affect financial condition, cash flows, results of operations, and ability to satisfy debt service obligations and make distributions to shareholders[15](index=15&type=chunk) - The company operates in a very competitive and rapidly changing environment, with new risk factors emerging frequently[16](index=16&type=chunk) [Risks Related to Our Business and Our Properties](index=8&type=section&id=RISKS%20RELATED%20TO%20OUR%20BUSINESS%20AND%20OUR%20PROPERTIES) Business risks include real estate illiquidity, economic sensitivity, reliance on key tenants, e-commerce impact, and the potential for inflation to negatively affect financial performance - Real estate investments are subject to risks from economic climate, local conditions, competition, and regulatory changes, with retail properties particularly vulnerable to changing perceptions and industry climate[17](index=17&type=chunk) - Significant revenue reliance on **20 key tenants** (**37.8%** of consolidated revenue) poses a risk if these tenants face bankruptcy, business downturns, or do not renew leases favorably[18](index=18&type=chunk) - Vacated anchor space directly reduces rental revenues and can trigger co-tenancy clauses, allowing other tenants to terminate or reduce rent[19](index=19&type=chunk) - Inability to renew current leases or less favorable re-letting terms (including concessions) could adversely affect net income and distributions[20](index=20&type=chunk) - Decreased demand for retail space, exacerbated by e-commerce growth, could negatively affect market rents and financial performance[21](index=21&type=chunk)[22](index=22&type=chunk) - Economic uncertainty and inflation could adversely affect tenant solvency, consumer spending, borrowing ability, and increase operating costs faster than rents[23](index=23&type=chunk)[24](index=24&type=chunk)[25](index=25&type=chunk) - Real estate investments are illiquid, limiting the ability to quickly adjust the portfolio to changed conditions[27](index=27&type=chunk) [Risks Related to Structure and Management](index=15&type=section&id=RISKS%20RELATED%20TO%20OUR%20STRUCTURE%20AND%20MANAGEMENT) Structure and management risks include loss of key personnel, board policy changes, distribution limits, ownership concentration, change of control restrictions, IT security threats, and environmental liabilities - Loss of key management members, particularly Kenneth F. Bernstein (President and CEO), could materially adversely affect business[34](index=34&type=chunk)[35](index=35&type=chunk) - The Board of Trustees can change investment and financing policies or objectives without shareholder approval, potentially not serving all shareholders' interests[36](index=36&type=chunk) - REIT distribution requirements (at least **90%** of taxable income) limit the ability to retain earnings for property acquisition/improvement or debt retirement[37](index=37&type=chunk) - Concentration of ownership by five institutional shareholders (**54.5%** of Common Shares) could allow greater influence over management[38](index=38&type=chunk) - Restrictions on potential change of control (e.g., preferred share issuance, executive severance agreements, Maryland law provisions) could prevent beneficial changes for shareholders[39](index=39&type=chunk)[41](index=41&type=chunk) - Outages, computer viruses, increased IT security threats, and third-party vendor failures could disrupt operations, compromise data, and result in financial and reputational costs[42](index=42&type=chunk)[43](index=43&type=chunk) - Social media use may adversely impact reputation and business through inaccurate or unauthorized disclosures[45](index=45&type=chunk) - Climate change, natural disasters (e.g., hurricanes, wildfires, earthquakes), or health crises (e.g., COVID-19) could cause property damage, operational disruptions, increased insurance costs, and decreased consumer demand[46](index=46&type=chunk) - Exposure to possible liability relating to environmental matters, including remediation costs and fines, which could exceed property value or aggregate assets[47](index=47&type=chunk)[48](index=48&type=chunk) - Uninsured losses or losses exceeding insured limits (e.g., from wars, terrorism, acts of God) could adversely affect financial condition[49](index=49&type=chunk) - Future terrorist attacks or civil unrest could harm demand for and value of properties, increase security costs, and limit insurance availability[50](index=50&type=chunk) - Litigation and compliance with regulations like the Americans with Disabilities Act (ADA) and fire/safety codes may require unplanned expenditures[51](index=51&type=chunk)[52](index=52&type=chunk) [Risks Related to Our REIT Status](index=20&type=section&id=RISKS%20RELATED%20TO%20OUR%20REIT%20STATUS) Maintaining REIT status is complex; failure to qualify would result in corporate income tax and reduced distributions, while compliance may force the company to forgo attractive opportunities - No assurance of continued REIT qualification; failure would result in corporate income tax and disqualification for four subsequent taxable years, significantly reducing cash for distributions[53](index=53&type=chunk) - Legislative or regulatory tax changes, including the Tax Cuts and Jobs Act, could adversely affect the company or its shareholders[54](index=54&type=chunk) - May be required to borrow funds or sell assets to satisfy REIT distribution requirements, even under unfavorable market conditions[55](index=55&type=chunk) - Dividends payable by REITs generally do not qualify for reduced tax rates, potentially making REIT investments less attractive to individual investors[56](index=56&type=chunk)[58](index=58&type=chunk) - Complying with REIT requirements may force the company to forgo otherwise attractive opportunities or liquidate investments[59](index=59&type=chunk) - Ownership limits on shares are in place to ensure REIT qualification, which may delay, defer, or prevent a change of control[59](index=59&type=chunk) [Unresolved Staff Comments](index=21&type=section&id=1B.%20Unresolved%20Staff%20Comments) There are no unresolved staff comments to report - No unresolved staff comments[60](index=60&type=chunk) [Properties](index=21&type=section&id=2.%20Properties) Acadia's portfolio includes **186** operating properties totaling **13.1 million** square feet of GLA, with Core Portfolio **93.4%** occupied and Fund properties **88.6%** occupied as of December 31, 2019 - As of December 31, 2019, Acadia owned or had an ownership interest in **186** operating properties (**123** Core Portfolio, **53** Funds), totaling approximately **13.1 million** square feet of GLA[61](index=61&type=chunk) - Core Portfolio properties were **93.4%** occupied, and Fund properties were **88.6%** occupied, excluding properties under development/redevelopment or pre-stabilized[61](index=61&type=chunk) - Rental revenues primarily come from national retailers under long-term leases, providing fixed minimum rent and pro-rata share of operating expenses[61](index=61&type=chunk)[63](index=63&type=chunk) - No individual property contributed more than **10%** of total revenues for the years ended December 31, 2019, 2018, or 2017[63](index=63&type=chunk) [Retail Properties](index=21&type=section&id=Retail%20Properties) Acadia's Core Portfolio comprises **123** properties (**5.6 million** sq ft GLA, **93.4%** occupied), and Funds own **53** properties (**7.5 million** sq ft GLA, **88.6%** occupied), primarily with national retailers - Core Portfolio: **123** operating properties, ~**5.6 million** sq ft GLA, **93.4%** occupied as of December 31, 2019, located in **12** states and D.C., primarily street retail and dense suburban shopping centers[61](index=61&type=chunk) - Funds: **53** properties, ~**7.5 million** sq ft GLA, **88.6%** occupied as of December 31, 2019, located in **17** states and D.C., including mixed-use properties[61](index=61&type=chunk) - Across both portfolios, there were approximately **1,100** retail leases as of December 31, 2019, with a significant portion of rental revenues from national retailers[61](index=61&type=chunk) - Revenues primarily consist of fixed minimum rent and tenants' pro-rata share of operating expenses; percentage rents are an insignificant portion[61](index=61&type=chunk)[63](index=63&type=chunk) [Major Tenants](index=29&type=section&id=Major%20Tenants) As of December 31, 2019, no single retail tenant exceeded **5.1%** of base rents or **6.9%** of GLA, with the top **20** tenants representing **37.8%** of both - No individual retail tenant accounted for more than **5.1%** of base rents or occupied more than **6.9%** of total leased GLA as of December 31, 2019[71](index=71&type=chunk) Top 20 Retail Tenants by Base Rent (as of Dec 31, 2019) | Retail Tenant | Number of Stores in Portfolio | Total GLA (thousands sq ft) | Annualized Base Rent (thousands $) | Percentage of Total Portfolio GLA | Percentage of Total Retail Tenant Annualized Base Rent | |:--------------|:------------------------------|:----------------------------|:-----------------------------------|:----------------------------------|:-------------------------------------------------------| | Target | 5 | 454 | 8,248 | 6.9% | 5.1% | | H & M | 2 | 56 | 5,039 | 0.9% | 3.1% | | Walgreens | 7 | 98 | 4,204 | 1.5% | 2.6% | | TJX Companies | 26 | 330 | 3,784 | 5.0% | 2.4% | | Royal Ahold | 5 | 182 | 3,711 | 2.8% | 2.3% | | Nordstrom, Inc. | 2 | 89 | 3,515 | 1.4% | 2.2% | | Bed, Bath, and Beyond | 6 | 137 | 3,371 | 2.1% | 2.1% | | Ascena Retail Group | 12 | 28 | 2,735 | 0.4% | 1.7% | | LA Fitness International LLC | 3 | 108 | 2,680 | 1.6% | 1.7% | | Trader Joe's | 5 | 49 | 2,642 | 0.7% | 1.6% | | Kohls | 7 | 203 | 2,600 | 3.1% | 1.6% | | Verizon | 8 | 29 | 2,566 | 0.4% | 1.6% | | Lululemon | 3 | 8 | 2,431 | 0.1% | 1.5% | | Gap | 8 | 61 | 2,327 | 0.9% | 1.4% | | Albertsons Companies | 4 | 154 | 2,266 | 2.4% | 1.4% | | Home Depot | 4 | 337 | 2,193 | 5.1% | 1.4% | | Ulta Salon Cosmetic & Fragrance | 10 | 48 | 1,801 | 0.7% | 1.1% | | Bob's Discount Furniture | 2 | 58 | 1,629 | 0.9% | 1.0% | | Tapestry | 2 | 4 | 1,552 | 0.1% | 1.0% | | DSW | 3 | 40 | 1,464 | 0.6% | 0.9% | | **Total** | **124** | **2,473** | **60,758** | **37.8%** | **37.8%** | [Lease Expirations](index=30&type=section&id=Lease%20Expirations) Acadia's Core Portfolio has **481** leases, with **4.0%** of ABR expiring in 2020; Funds have **621** leases, with **6.9%** of ABR expiring in 2020 Core Portfolio Lease Expirations (as of Dec 31, 2019) | Leases Maturing in | Number of Leases | Annualized Base Rent (thousands $) | Percentage of Total ABR | GLA Square Feet (thousands) | Percentage of Total GLA | |:-------------------|:-----------------|:-----------------------------------|:------------------------|:----------------------------|:------------------------| | Month to Month | 6 | 470 | 0.3% | 13 | 0.3% | | 2020 | 33 | 5,546 | 4.0% | 92 | 2.1% | | 2021 | 74 | 16,470 | 11.9% | 758 | 17.1% | | 2022 | 53 | 13,288 | 9.6% | 345 | 7.8% | | 2023 | 61 | 21,621 | 15.6% | 666 | 15.0% | | 2024 | 56 | 15,043 | 10.8% | 656 | 14.8% | | 2025 | 51 | 16,112 | 11.6% | 486 | 11.0% | | 2026 | 33 | 7,134 | 5.1% | 161 | 3.6% | | 2027 | 23 | 5,673 | 4.1% | 127 | 2.9% | | 2028 | 41 | 18,502 | 13.3% | 674 | 15.2% | | 2029 | 23 | 6,667 | 4.8% | 157 | 3.6% | | Thereafter | 27 | 12,216 | 8.9% | 291 | 6.6% | | **Total** | **481** | **138,742** | **100.0%** | **4,432** | **100.0%** | Funds Lease Expirations (as of Dec 31, 2019) | Leases Maturing in | Number of Leases | Annualized Base Rent (thousands $) | Percentage of Total ABR | GLA Square Feet (thousands) | Percentage of Total GLA | |:-------------------|:-----------------|:-----------------------------------|:------------------------|:----------------------------|:------------------------| | Month to Month | 16 | 164 | 0.7% | 13 | 0.9% | | 2020 | 68 | 1,522 | 6.9% | 88 | 6.4% | | 2021 | 94 | 2,325 | 10.5% | 147 | 10.7% | | 2022 | 84 | 2,321 | 10.5% | 152 | 11.1% | | 2023 | 79 | 2,133 | 9.7% | 155 | 11.2% | | 2024 | 71 | 2,182 | 9.9% | 144 | 10.5% | | 2025 | 54 | 2,503 | 11.4% | 185 | 13.4% | | 2026 | 43 | 1,238 | 5.6% | 61 | 4.4% | | 2027 | 19 | 546 | 2.5% | 51 | 3.7% | | 2028 | 28 | 1,248 | 5.7% | 57 | 4.1% | | 2029 | 32 | 1,894 | 8.6% | 116 | 8.4% | | Thereafter | 33 | 3,965 | 18.0% | 208 | 15.2% | | **Total** | **621** | **22,041** | **100.0%** | **1,377** | **100.0%** | [Geographic Concentrations](index=31&type=section&id=Geographic%20Concentrations) As of December 31, 2019, Core Portfolio concentrations were in New York Metro and Chicago Metro, while Funds concentrated in the Southeast and Northeast Operating Retail Properties by Region (as of Dec 31, 2019) | Region | GLA (thousands sq ft) | % Occupied | Annualized Base Rent (thousands $) | Annualized Base Rent per Occupied Square Foot | Percentage Represented by Region GLA | Percentage of Total Annualized Base Rent | |:-------------------------------|:----------------------|:-----------|:-----------------------------------|:----------------------------------------------|:-------------------------------------|:-----------------------------------------| | **Core Portfolio:** | | | | | | | | New York Metro | 1,454 | 93.8% | 50,190 | 36.81 | 29.1% | 36.2% | | Mid-Atlantic | 1,191 | 95.5% | 15,803 | 16.02 | 23.9% | 11.4% | | New England | 772 | 96.9% | 10,721 | 16.40 | 15.5% | 7.7% | | Chicago Metro | 700 | 89.5% | 38,340 | 61.23 | 14.0% | 27.6% | | Midwest | 570 | 91.5% | 7,745 | 14.85 | 11.4% | 5.6% | | San Francisco Metro | 149 | 100.0% | 6,219 | 41.79 | 3.0% | 4.5% | | Washington D.C. Metro | 139 | 91.8% | 7,358 | 57.55 | 2.8% | 5.3% | | Los Angeles Metro | 14 | 100.0% | 2,366 | 168.97 | 0.3% | 1.7% | | **Total Core Operating Properties** | **4,989** | **94.0%** | **138,742** | **31.20** | **100.0%** | **100.0%** | | **Fund Portfolio:** | | | | | | | | Southeast | 425 | 96.3% | 6,158 | 15.06 | 27.3% | 27.9% | | Northeast | 480 | 83.7% | 5,044 | 12.55 | 30.7% | 22.9% | | New York Metro | 217 | 72.1% | 4,621 | 29.52 | 13.9% | 21.0% | | West | 121 | 96.4% | 1,665 | 14.23 | 7.8% | 7.6% | | Mid-Atlantic | 117 | 84.4% | 1,406 | 14.27 | 7.5% | 6.4% | | Midwest | 90 | 95.0% | 1,437 | 16.86 | 5.8% | 6.5% | | Chicago Metro | 63 | 99.6% | 766 | 12.23 | 4.0% | 3.5% | | Southwest | 45 | 99.4% | 794 | 17.73 | 2.9% | 3.6% | | San Francisco Metro | 1 | 100.0% | 149 | 100.20 | 0.1% | 0.6% | | **Total Fund Operating Properties** | **1,559** | **88.3%** | **22,040** | **16.00** | **100.0%** | **100.0%** | [Development and Redevelopment Activities](index=32&type=section&id=Development%20and%20Redevelopment%20Activities) As of December 31, 2019, Acadia had six development/redevelopment projects underway, with an estimated total completion cost of **$154.0 million** to **$191.3 million** - As of December 31, 2019, Acadia had six development or redevelopment projects in various stages[77](index=77&type=chunk) Development and Redevelopment Projects (as of Dec 31, 2019) | Property | Ownership | Location | Estimated Stabilization | Square Feet Upon Completion | Leased Rate | Outstanding Debt (millions $) | Incurred (millions $) | Estimated Future Range (millions $) | Estimated Total Range (millions $) | |:--------------------------------|:----------|:---------|:------------------------|:----------------------------|:------------|:------------------------------|:----------------------|:------------------------------------|:-----------------------------------| | **Development: CORE** | | | | | | | | | | | 1238 Wisconsin | 100.0% | Washington DC | 2022 | 29,000 | —% | — | 1.3 | 31.3 to 32.7 | 32.6 to 34.0 | | **FUND II** | | | | | | | | | | | City Point Phase III | 94.2% | Brooklyn, NY | 2021 | 63,000 | —% | 24.2 | 10.0 | 52.0 to 55.0 | 62.0 to 65.0 | | **FUND III** | | | | | | | | | | | Broad Hollow Commons | 100.0% | Farmingdale, NY | 2021 | 180,000 - 200,000 | —% | — | 17.9 | 32.1 to 42.1 | 50.0 to 60.0 | | **FUND IV** | | | | | | | | | | | 110 University Place | 100.0% | New York, NY | 2022 | 46,000 | —% | — | 14.2 | 6.4 to 10.8 | 20.6 to 25.0 | | 146 Geary | 100.0% | San Francisco, CA | 2022 | 13,000 | —% | 22.9 | 42.6 | 17.4 to 22.4 | 60.0 to 65.0 | | 717 N. Michigan Avenue | 100.0% | Chicago, IL | 2020 | 62,000 | 30.0% | 56.7 | 110.0 | 10.0 to 17.5 | 120.0 to 127.5 | | **Major Redevelopment: CORE** | | | | | | | | | | | City Center | 100.0% | San Francisco, CA | 2021 | 241,000 | 90.0% | — | 190.2 | 4.8 to 10.8 | 195.0 to 201.0 | | Elmwood Park | 100.0% | Elmwood Park, NJ | 2021 | 144,000 | 100.0% | — | — | TBD to TBD | TBD to TBD | | Route 6 Mall | 100.0% | Honesdale, PA | TBD | TBD | 100.0% | — | — | TBD to TBD | TBD to TBD | | Mad River | 100.0% | Dayton, OH | TBD | TBD | 50.0% | — | — | TBD to TBD | TBD to TBD | [Legal Proceedings](index=32&type=section&id=3.%20Legal%20Proceedings) Acadia Brandywine Holdings, LLC is in litigation over a defaulted **$26.3 million** mortgage loan, with a partial summary judgment against it, which the company intends to appeal - Acadia Brandywine Holdings, LLC (**22.22%** interest) is in litigation over a defaulted **$26.3 million** mortgage loan (Brandywine Loan) since July 1, 2016[79](index=79&type=chunk) - The Successor Lender sued Brandywine Holdings for judgment on the note and foreclosure, and the Operating Partnership as guarantor for the full balance (approx. **$33.0 million** as of Nov 9, 2017, plus accruing interest/fees)[79](index=79&type=chunk)[81](index=81&type=chunk) - On February 7, 2020, the Delaware Superior Court granted partial summary judgment to the Successor Lender, finding recourse liability for both Brandywine Holdings and the Operating Partnership, a ruling they intend to appeal[81](index=81&type=chunk) - Management does not expect other ordinary course legal proceedings to have a material adverse effect on consolidated financial position[81](index=81&type=chunk) [Mine Safety Disclosures](index=33&type=section&id=4.%20Mine%20Safety%20Disclosures) This section is not applicable to Acadia Realty Trust - Not applicable[82](index=82&type=chunk) PART II [Market for Registrant's Common Equity, Related Stockholder Matters, Issuer Purchases of Equity Securities and Performance Graph](index=34&type=section&id=5.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%2C%20Issuer%20Purchases%20of%20Equity%20Securities%20and%20Performance%20Graph) As of February 12, 2020, Acadia had **255** common share holders, with **708,632** shares available under its incentive plan, and repurchased **$55.1 million** in shares in 2018 - As of February 12, 2020, there were **255** holders of record of Acadia's Common Shares, traded on the New York Stock Exchange under the symbol "AKR"[84](index=84&type=chunk) - The company repurchased **2,294,235** shares for **$55.1 million** in 2018. No shares were repurchased in 2019 or 2017. Approximately **$145.0 million** remains available under the share repurchase program as of December 31, 2019[89](index=89&type=chunk) [Market Information, Dividends and Holders of Record of our Common Shares](index=34&type=section&id=Market%20Information%2C%20Dividends%20and%20Holders%20of%20Record%20of%20our%20Common%20Shares) As of February 12, 2020, Acadia Realty Trust had **255** common share holders, with shares traded on the NYSE under "AKR" - As of February 12, 2020, there were **255** holders of record of Acadia's Common Shares, traded on the New York Stock Exchange under the symbol "AKR"[84](index=84&type=chunk) - Quarterly dividends declared are discussed in Note 10, and their Federal Income Tax characterization in Note 14[84](index=84&type=chunk) [Securities Authorized for Issuance Under Equity Compensation Plans](index=34&type=section&id=Securities%20Authorized%20for%20Issuance%20Under%20Equity%20Compensation%20Plans) The Second Amended and Restated 2006 Incentive Plan authorized **3.7 million** shares, with **708,632** shares remaining available for issuance as of December 31, 2019 - The Second Amended and Restated 2006 Incentive Plan (Second Amended 2006 Plan) authorizes the issuance of options, Restricted Shares, and LTIP Units[85](index=85&type=chunk) - The plan increased authorization by **1.6 million** shares, totaling **3.7 million** shares available for officers and employees[85](index=85&type=chunk) Equity Compensation Plan Information (as of Dec 31, 2019) | Category | Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted-average exercise price of outstanding options, warrants and rights | Number of securities remaining available for future issuance | |:---------------------------------------|:--------------------------------------------------------------------------|:--------------------------------------------------------------------------|:-------------------------------------------------------------| | Equity compensation plans approved by security holders | — | $— | 708,632 | | Equity compensation plans not approved by security holders | — | $— | — | | **Total** | **—** | **$—** | **708,632** | [Share Price Performance](index=35&type=section&id=Share%20Price%20Performance) From 2014-2019, Acadia Realty Trust's common shares generated a cumulative total return of **$98.24**, lagging broader indices but outperforming the SNL REIT Retail Shopping Ctr Index Cumulative Total Shareholder Return (2014-2019) | Index | 2014 ($) | 2015 ($) | 2016 ($) | 2017 ($) | 2018 ($) | 2019 ($) | |:-----------------------------|:---------|:---------|:---------|:---------|:---------|:---------| | Acadia Realty Trust | 100.00 | 107.51 | 109.70 | 95.30 | 86.34 | 98.24 | | Russell 2000 | 100.00 | 95.59 | 115.95 | 132.94 | 118.30 | 148.49 | | NAREIT All Equity REIT Index | 100.00 | 102.83 | 111.70 | 121.39 | 116.48 | 149.86 | | SNL REIT Retail Shopping Ctr Index | 100.00 | 105.35 | 109.02 | 96.94 | 81.36 | 103.18 | [Recent Sales of Unregistered Securities; Use of Proceeds from Registered Securities](index=35&type=section&id=Recent%20Sales%20of%20Unregistered%20Securities%3B%20Use%20of%20Proceeds%20from%20Registered%20Securities) No recent sales of unregistered securities or specific uses of proceeds from registered securities were reported - No recent sales of unregistered securities or specific uses of proceeds from registered securities[89](index=89&type=chunk) [Issuer Purchases of Equity Securities](index=35&type=section&id=Issuer%20Purchases%20of%20Equity%20Securities) In 2018, Acadia repurchased **2,294,235** shares for **$55.1 million** under its **$200.0 million** program, with **$145.0 million** remaining as of December 31, 2019 - Revised share repurchase program in 2018 authorizes up to **$200.0 million** of outstanding Common Shares[89](index=89&type=chunk) - Repurchased **2,294,235** shares for **$55.1 million** in 2018[89](index=89&type=chunk) - No shares repurchased in 2019 or 2017[89](index=89&type=chunk) - Approximately **$145.0 million** remained available under the program as of December 31, 2019[89](index=89&type=chunk) [Selected Financial Data](index=36&type=section&id=6.%20Selected%20Financial%20Data) Acadia's 2019 selected financial data shows revenues of **$295.3 million**, net income of **$53.0 million**, total assets of **$4.3 billion**, and FFO of **$126.9 million** Selected Financial Data (2015-2019, in thousands) | Metric | 2019 ($) | 2018 ($) | 2017 ($) | 2016 ($) | 2015 ($) | |:------------------------------------------|:------------|:------------|:------------|:------------|:------------| | **OPERATING DATA:** | | | | | | | Revenues | $295,327 | $259,681 | $248,552 | $189,804 | $196,783 | | Operating expenses, excluding depreciation and impairment charges | (125,884) | (114,591) | (111,844) | (97,904) | (86,570) | | Depreciation and amortization | (125,443) | (117,549) | (104,934) | (70,011) | (60,751) | | Impairment charges | (1,721) | — | (14,455) | — | (5,000) | | Gain on disposition of properties | 30,324 | 5,140 | 48,886 | 81,965 | 89,063 | | Equity in earnings of unconsolidated affiliates | 8,922 | 9,302 | 23,371 | 39,449 | 37,330 | | Interest income | 7,988 | 13,231 | 29,143 | 25,829 | 16,603 | | Other income | 6,947 | — | 5,571 | — | 1,596 | | Interest expense | (73,788) | (69,978) | (58,978) | (34,645) | (37,297) | | Income (loss) from continuing operations before income taxes | 22,672 | (14,764) | 65,312 | 134,487 | 151,757 | | Income tax (provision) benefit | (1,468) | (934) | (1,004) | 105 | (1,787) | | Net income (loss) | 21,204 | (15,698) | 64,308 | 134,592 | 149,970 | | Loss (income) attributable to noncontrolling interests | 31,841 | 47,137 | (2,838) | (61,816) | (84,262) | | Net income attributable to Acadia | $53,045 | $31,439 | $61,470 | $72,776 | $65,708 | | Basic and diluted earnings per share | $0.62 | $0.38 | $0.73 | $0.94 | $0.94 | | Cash dividends declared per Common Share | $1.13 | $1.09 | $1.05 | $1.16 | $1.22 | | **BALANCE SHEET DATA (period end):** | | | | | | | Real estate before accumulated depreciation | $4,099,542 | $3,697,805 | $3,466,482 | $3,382,000 | $2,736,283 | | Total assets | 4,309,114 | 3,958,780 | 3,960,247 | 3,995,960 | 3,032,319 | | Total indebtedness, net | 1,708,196 | 1,550,545 | 1,424,409 | 1,488,718 | 1,358,606 | | Total common shareholders' equity | 1,542,308 | 1,459,505 | 1,567,199 | 1,588,577 | 1,100,488 | | Noncontrolling interests | 644,657 | 622,442 | 648,440 | 589,548 | 420,866 | | Total equity | 2,186,965 | 2,081,947 | 2,215,639 | 2,178,125 | 1,521,354 | | **OTHER:** | | | | | | | Funds from operations attributable to Common Shareholders and Common OP Unit holders | 126,862 | 118,870 | 134,667 | 117,070 | 111,560 | | Cash flows provided by (used in): | | | | | | | Operating activities | 127,177 | 96,076 | 114,655 | 109,848 | 113,598 | | Investing activities | (397,057) | (136,619) | 4,063 | (613,564) | (354,503) | | Financing activities | 265,042 | (10,278) | (127,758) | 488,365 | 96,101 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=37&type=section&id=7.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section analyzes Acadia Realty Trust's financial condition and operational results, covering business objectives, 2019 developments, segment performance, liquidity, and critical accounting policies - As of December 31, 2019, Acadia owned or had an ownership interest in **186** properties within its Core Portfolio and Funds[91](index=91&type=chunk) - Primary business objective: acquire and manage commercial retail properties for cash distributions and capital appreciation[91](index=91&type=chunk) - Strategies include: operating a high-quality Core Portfolio, generating external growth through opportunistic Fund acquisitions, and maintaining a strong and flexible balance sheet[91](index=91&type=chunk) [Overview](index=37&type=section&id=OVERVIEW) As of December 31, 2019, Acadia managed **186** properties, generating operating income from rental revenues, with objectives focused on shareholder distributions and capital appreciation - As of December 31, 2019, Acadia managed **186** properties across its Core Portfolio and Funds[91](index=91&type=chunk) - Majority of operating income derived from rental revenues from operating properties, including expense recoveries from tenants[91](index=91&type=chunk) - Business objectives include acquiring and managing commercial retail properties for cash distributions and capital appreciation, focusing on accretive development, re-tenanting, opportunistic Fund acquisitions, and maintaining a strong balance sheet[91](index=91&type=chunk) [Significant Developments During the Year Ended December 31, 2019](index=38&type=section&id=SIGNIFICANT%20DEVELOPMENTS%20DURING%20THE%20YEAR%20ENDED%20DECEMBER%2031%2C%202019) In 2019, Acadia invested **$185.9 million** in Core Portfolio and **$328.5 million** in Fund properties, disposed of **$109.4 million** in assets, secured **$481.4 million** in new financings, and issued **$147.7 million** in common shares - Invested **$185.9 million** in **12** Core Portfolio properties, including Soho retail condominiums (**$87.0 million**), Chicago properties (**$7.8 million**, **$2.9 million**), and a Los Angeles retail building (**$48.7 million**)[92](index=92&type=chunk) - Invested **$328.5 million** in eight Fund properties, including Family Center at Riverdale (**$48.5 million**), Tri-City Plaza (**$36.7 million**), Palm Coast Landing (**$36.6 million**), Lincoln Commons (**$54.3 million**), Landstown Commons (**$87.0 million**), and Frederick County Acquisitions (**$54.9 million**)[92](index=92&type=chunk) - Disposed of Pacesetter Park shopping center for **$22.6 million**, recognizing a **$16.8 million** gain[93](index=93&type=chunk) - Sold four consolidated Fund properties and three condominium units for **$86.8 million**, recognizing a net aggregate gain of **$13.6 million** (Acadia's share **$2.9 million**)[93](index=93&type=chunk)[94](index=94&type=chunk) - Obtained **$358.9 million** in new consolidated financings and **$122.5 million** in unconsolidated financings, including an additional **$100.0 million** borrowing capacity on the senior unsecured revolving credit facility[95](index=95&type=chunk) - Redeemed a **$15.3 million** Fund IV Structured Financing investment and provided **$13.5 million** in seller financing[97](index=97&type=chunk) - Issued **5,164,055** Common Shares through its ATM program for gross proceeds of **$147.7 million**[98](index=98&type=chunk) [Results of Operations](index=39&type=section&id=RESULTS%20OF%20OPERATIONS) In 2019, Acadia's net income attributable to Acadia increased by **$21.6 million** to **$53.0 million**, driven by Core Portfolio and Funds growth, despite reduced Structured Financing income and higher unallocated expenses Segment Net Income Attributable to Acadia (2019 vs 2018, in millions) | Segment | 2019 ($) | 2018 ($) | Increase (Decrease) ($) | |:--------------------|:---------|:---------|:------------------------| | Core Portfolio | 62.5 | 42.4 | 20.1 | | Funds | 19.5 | 11.0 | 8.5 | | Structured Financing | 8.0 | 13.2 | (5.2) | | Unallocated | (36.9) | (35.3) | (1.6) | | **Total** | **53.0** | **31.4** | **21.6** | - Core Portfolio revenues increased **$6.4 million**, primarily from accelerated amortization on a below-market lease (**$5.8 million**) and property acquisitions (**$3.4 million**)[98](index=98&type=chunk) - Funds revenues increased **$29.3 million**, driven by property acquisitions (**$19.8 million**), accelerated amortization on a below-market lease (**$5.1 million**), lease-up at City Point (**$3.6 million**), and consolidation of Broughton Street Portfolio (**$2.1 million**)[100](index=100&type=chunk) - Structured Financing interest income decreased **$5.2 million** due to conversion of notes receivable into real estate ownership and payoff of a Fund IV note[101](index=101&type=chunk) - Unallocated general and administrative expense increased **$1.1 million**, mainly due to internal leasing salaries no longer being capitalized[101](index=101&type=chunk) [Supplemental Financial Measures](index=42&type=section&id=SUPPLEMENTAL%20FINANCIAL%20MEASURES) Acadia's Core Portfolio NOI increased **3.9%** to **$123.9 million** in 2019, with FFO attributable to common shareholders rising to **$126.9 million**, or **$1.41** diluted FFO per share - NOI and rent spreads are used for Core Portfolio performance analysis, but not for Funds due to their opportunistic nature and finite-life[102](index=102&type=chunk) Core Portfolio Net Operating Income (NOI, in thousands) | Metric | 2019 ($) | 2018 ($) | |:-------------------|:---------|:---------| | Core Portfolio NOI | 140,242 | 133,545 | | Less: properties excluded from Same-Property NOI | (16,312) | (14,235) | | **Same-Property NOI** | **123,930** | **119,310** | | Percent change from prior year period | 3.9% | | | Same-Property Revenues | 167,806 | 163,469 | | Same-Property Operating Expenses | (43,876) | (44,159) | Rent Spreads on Core Portfolio New and Renewal Leases (Year Ended Dec 31, 2019) | Metric | Cash Basis | Straight-Line Basis | |:----------------------------|:-----------|:--------------------| | Number of new and renewal leases executed | 42 | 42 | | GLA commencing (sq ft) | 507,431 | 507,431 | | New base rent ($) | 17.48 | 18.22 | | Expiring base rent ($) | 16.65 | 15.77 | | Percent growth in base rent | 5.0% | 15.5% | | Average cost per square foot ($) | 5.52 | 5.52 | | Weighted average lease term (years) | 6.9 | 6.9 | Funds from Operations (FFO) Attributable to Common Shareholders and Common OP Unit Holders (in thousands) | Metric | 2019 ($) | 2018 ($) | 2017 ($) | |:--------------------------------------------------------------------|:---------|:---------|:---------| | Net income attributable to Acadia | 53,045 | 31,439 | 61,470 | | Depreciation of real estate and amortization of leasing costs (net of noncontrolling interests' share) | 89,373 | 85,852 | 83,515 | | Impairment charge (net of noncontrolling interests' share) | 395 | — | 1,088 | | Gain on disposition of properties (net of noncontrolling interests' share) | (19,786) | (994) | (15,565) | | Income attributable to Common OP Unit holders | 3,295 | 2,033 | 3,609 | | Distributions - Preferred OP Units | 540 | 540 | 550 | | **Funds from operations attributable to Common Shareholders and Common OP Unit holders** | **126,862** | **118,870** | **134,667** | | Diluted Funds from operations, per Common Share and Common OP Unit | $1.41 | $1.35 | $1.51 | [Liquidity and Capital Resources](index=44&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) Acadia's liquidity uses include **$101.0 million** in distributions and **$514.4 million** in investments, with **$1.7 billion** in consolidated debt and **$431.5 million** of Fund debt maturing in 2020, supported by equity, debt, and unfunded commitments - Primary uses of liquidity: distributions to shareholders/OP unit holders (**$101.0 million** in 2019), investments (property acquisitions, development/re-tenanting), distributions to Fund investors, debt service/repayments, and share repurchases[109](index=109&type=chunk) - Invested **$514.4 million** in **20** new properties within Core and Fund portfolios in 2019[110](index=110&type=chunk) - Remaining capital commitments to Funds aggregated **$86.1 million** as of December 31, 2019[111](index=111&type=chunk) - Capitalized costs for development activities totaled **$25.6 million** in 2019; estimated total cost to complete ongoing projects through 2022 is **$154.0 million** to **$191.3 million** (Acadia's share **$93.0 million** to **$111.1 million**)[112](index=112&type=chunk) Consolidated Debt Summary (in thousands) | Debt Type | December 31, 2019 ($) | December 31, 2018 ($) | |:----------------------------------------|:----------------------|:----------------------| | Total Debt - Fixed and Effectively Fixed Rate | 1,403,324 | 1,001,658 | | Total Debt - Variable Rate | 314,604 | 558,675 | | **Total Debt** | **1,717,928** | **1,560,333** | | Net unamortized debt issuance costs | (10,383) | (10,541) | | Unamortized premium | 651 | 753 | | **Total Indebtedness** | **1,708,196** | **1,550,545** | - Fund debt maturing in 2020 totals **$431.5 million** (weighted-average interest rate of **4.46%**), including **$240.0 million** at Fund II actively seeking refinancing[113](index=113&type=chunk) - Primary sources of capital: public equity/OP Units, secured/unsecured debt, unfunded capital commitments from noncontrolling interests (**$386.8 million** at Dec 31, 2019), asset sales, structured financing repayments, and cash on hand (**$15.8 million** at Dec 31, 2019)[115](index=115&type=chunk)[118](index=118&type=chunk) - ATM Program: sold **5,164,055** Common Shares in 2019 for gross proceeds of **$147.7 million**[116](index=116&type=chunk) Historical Cash Flow (in millions) | Activity | 2019 ($) | 2018 ($) | Variance ($) | |:--------------------------|:---------|:---------|:-------------| | Net cash provided by operating activities | 127.2 | 96.1 | 31.1 | | Net cash used in investing activities | (397.1) | (136.6) | (260.5) | | Net cash provided by (used in) financing activities | 265.0 | (10.3) | 275.3 | | Decrease in cash and restricted cash | (4.8) | (50.8) | 46.0 | [Contractual Obligations](index=47&type=section&id=CONTRACTUAL%20OBLIGATIONS) As of December 31, 2019, Acadia's total contractual obligations were **$2.31 billion**, including **$1.72 billion** in principal debt and **$346.9 million** in lease obligations Contractual Obligations (as of Dec 31, 2019, in millions) | Obligation Type | Total ($) | Less than 1 Year ($) | 1 to 3 Years ($) | 3 to 5 Years ($) | More than 5 Years ($) | |:--------------------------|:----------|:---------------------|:-----------------|:-----------------|:----------------------| | Principal obligations on debt | 1,717.9 | 437.3 | 455.2 | 627.5 | 197.9 | | Interest obligations on debt | 207.4 | 63.1 | 78.1 | 37.4 | 28.8 | | Lease obligations | 346.9 | 7.0 | 13.7 | 13.8 | 312.4 | | Construction commitments | 41.1 | 41.1 | — | — | — | | **Total** | **2,313.3** | **548.5** | **547.0** | **678.7** | **539.1** | [Off-Balance Sheet Arrangements](index=47&type=section&id=OFF-BALANCE%20SHEET%20ARRANGEMENTS) Acadia's off-balance sheet arrangements primarily consist of **$180.6 million** in pro-rata mortgage debt from unconsolidated affiliates as of December 31, 2019 Off-Balance Sheet Mortgage Debt from Unconsolidated Affiliates (as of Dec 31, 2019, in thousands) | Investment Property | Operating Partnership Pro-rata Share of Mortgage Debt ($) | Effective Interest Rate | Maturity Date | |:--------------------------|:----------------------------------------------------------|:------------------------|:--------------| | 650 Bald Hill Road | 3,500 | 4.35% | Apr 2020 | | Eden Square | 5,500 | 3.00% | Jun 2020 | | Promenade at Manassas | 5,900 | 3.45% | Dec 2021 | | 3104 M Street | 900 | 5.25% | Dec 2021 | | Family Center at Riverdale | 5,800 | 3.40% | May 2022 | | Gotham Plaza | 9,500 | 3.30% | Jun 2023 | | Renaissance Portfolio | 32,000 | 3.40% | Aug 2023 | | Crossroads | 31,800 | 3.94% | Oct 2024 | | Tri-City Plaza | 5,500 | 3.09% | Oct 2024 | | Frederick Crossing | 4,400 | 3.26% | Dec 2024 | | Frederick County Square | 2,700 | 4.00% | Jan 2025 | | 840 N. Michigan | 65,000 | 4.36% | Feb 2025 | | Georgetown Portfolio | 8,100 | 4.72% | Dec 2027 | | **Total** | **180,600** | | | [Critical Accounting Policies](index=48&type=section&id=CRITICAL%20ACCOUNTING%20POLICIES) Acadia's critical accounting policies involve significant estimates and judgments for property valuation, unconsolidated joint ventures, bad debts, and revenue recognition under ASC 842 - Management's discussion and analysis is based on Consolidated Financial Statements prepared in accordance with U.S. GAAP, requiring estimates and judgments[122](index=122&type=chunk) - Critical accounting policies include: valuation of properties (impairment analysis based on undiscounted cash flows), investments in and advances to unconsolidated joint ventures (periodic review for other-than-temporary declines), bad debts (collectability assessment for tenant revenues and general reserves), real estate (capitalization of acquisition/development costs, depreciation, purchase price allocation based on fair value), revenue recognition (straight-line minimum rents, percentage rents, expense reimbursements), and structured financings (held at cost, interest income on effective interest method, allowances based on collateral value)[122](index=122&type=chunk)[123](index=123&type=chunk)[124](index=124&type=chunk)[125](index=125&type=chunk)[127](index=127&type=chunk)[128](index=128&type=chunk) - Rents receivable at December 31, 2019 and 2018 were net of an allowance for doubtful accounts of **$11.4 million** and **$7.9 million**, respectively[124](index=124&type=chunk) [Recently Issued Accounting Pronouncements](index=49&type=section&id=Recently%20Issued%20Accounting%20Pronouncements) This section refers to Note 1 for details on recently issued and adopted accounting pronouncements - Reference is made to Note 1 for information about recently issued and recently adopted accounting pronouncements[129](index=129&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=49&type=section&id=7A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) Acadia's primary market risk is interest rate exposure on its **$1.7 billion** debt, with **81.7%** fixed-rate and **18.3%** variable-rate as of December 31, 2019 - Primary market risk exposure is to changes in interest rates related to mortgage and other debt[130](index=130&type=chunk) - As of December 31, 2019, total debt was **$1,717.9 million**: **$1,403.3 million** (**81.7%**) fixed-rate (including derivatives) and **$314.6 million** (**18.3%**) variable-rate[130](index=130&type=chunk) - Managed interest rate exposure through fixed-rate debt and **40** interest rate swap agreements (**$948.8 million** notional) and four interest rate cap agreements (**$143.3 million** notional)[130](index=130&type=chunk) - A **100-basis-point** increase in interest rates on variable-rate debt would increase annual interest expense by **$3.1 million** (Acadia's share **$0.3 million**)[133](index=133&type=chunk) - Fair value of total consolidated outstanding debt would decrease by approximately **$11.5 million** if interest rates increase by **1%**, and increase by **$13.6 million** if rates decrease by **1%**[133](index=133&type=chunk) - Interest rate risk exposure decreased from **35.8%** of consolidated debt in 2018 to **18.3%** in 2019[135](index=135&type=chunk) [Information as of December 31, 2019](index=49&type=section&id=Information%20as%20of%20December%2031%2C%202019) As of December 31, 2019, Acadia's **$1.72 billion** consolidated debt was **81.7%** fixed-rate, with **$437.3 million** maturing in 2020 - Total mortgage and other notes payable: **$1,717.9 million** (excluding unamortized premium/costs)[130](index=130&type=chunk) - Fixed-rate debt (including derivatives): **$1,403.3 million** (**81.7%**) at **3.56%** weighted-average interest rate[113](index=113&type=chunk) - Variable-rate debt: **$314.6 million** (**18.3%**) at **3.71%** weighted-average interest rate, with **$143.3 million** subject to interest rate caps[113](index=113&type=chunk) - Scheduled debt maturities in 2020: **$437.3 million** consolidated debt and **$10.1 million** pro-rata share of unconsolidated debt, mostly Fund debt[133](index=133&type=chunk) - A **100-basis-point** increase in interest rates on variable-rate debt would increase annual interest expense by **$3.1 million** (Acadia's share **$0.3 million**)[133](index=133&type=chunk) - Fair value of total consolidated outstanding debt would decrease by approximately **$11.5 million** if interest rates increase by **1%**[133](index=133&type=chunk) [Summarized Information as of December 31, 2018](index=51&type=section&id=Summarized%20Information%20as%20of%20December%2031%2C%202018) As of December 31, 2018, Acadia's **$1.56 billion** total debt was **64.2%** fixed-rate and **35.8%** variable-rate, with hedges including **$609.9 million** in interest rate swaps - Total mortgage and other notes payable: **$1,560.3 million** (excluding unamortized premium/costs)[135](index=135&type=chunk) - Fixed-rate debt (including derivatives): **$1,001.7 million** (**64.2%**)[135](index=135&type=chunk) - Variable-rate debt: **$558.7 million** (**35.8%**) based on LIBOR or Prime rates[135](index=135&type=chunk) - Used **29** interest rate swap agreements (**$609.9 million** notional) and three interest rate cap agreements (**$143.8 million** notional)[135](index=135&type=chunk) - A **100-basis-point** increase in LIBOR would have increased interest expense on variable-rate debt by **$5.6 million** annually[135](index=135&type=chunk) [Changes in Market Risk Exposures from December 31, 2018 to December 31, 2019](index=51&type=section&id=Changes%20in%20Market%20Risk%20Exposures%20from%20December%2031%2C%202018%20to%20December%2031%2C%202019) Acadia's interest rate risk exposure decreased from December 31, 2018, to December 31, 2019, with variable-rate debt falling from **$558.7 million** to **$314.6 million** - Interest rate risk exposure decreased on an absolute basis from **$558.7 million** (2018) to **$314.6 million** (2019)[135](index=135&type=chunk) - Variable-rate debt as a percentage of total consolidated debt decreased from **35.8%** (2018) to **18.3%** (2019)[135](index=135&type=chunk) [Financial Statements and Supplementary Data](index=52&type=section&id=8.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents Acadia Realty Trust's audited consolidated financial statements, independent auditor's report, detailed notes, and supplementary schedules for 2017-2019 - Includes audited consolidated financial statements: Balance Sheets, Statements of Income, Comprehensive Income, Shareholders' Equity, and Cash Flows for 2019, 2018, and 2017[136](index=136&type=chunk) - Features the Report of Independent Registered Public Accounting Firm, expressing an unqualified opinion on the consolidated financial statements and internal control over financial reporting[138](index=138&type=chunk)[139](index=139&type=chunk) - Critical audit matters identified include purchase price allocation and assessment of impairment of real estate and real-estate related investments, due to significant management judgment and specialized knowledge required[140](index=140&type=chunk)[142](index=142&type=chunk) - Detailed Notes to Consolidated Financial Statements provide information on organization, accounting policies, real estate, notes receivable, unconsolidated affiliates, debt, financial instruments, equity, leases, segment reporting, compensation, federal income taxes, earnings per share, and quarterly financial information[153](index=153&type=chunk)[179](index=179&type=chunk)[191](index=191&type=chunk)[193](index=193&type=chunk)[203](index=203&type=chunk)[204](index=204&type=chunk)[208](index=208&type=chunk)[213](index=213&type=chunk)[222](index=222&type=chunk)[231](index=231&type=chunk)[241](index=241&type=chunk)[247](index=247&type=chunk)[254](index=254&type=chunk)[263](index=263&type=chunk)[266](index=266&type=chunk) - Financial Statement Schedules include Valuation and Qualifying Accounts, Real Estate and Accumulated Depreciation, and Mortgage Loans on Real Estate[136](index=136&type=chunk)[271](index=271&type=chunk)[273](index=273&type=chunk)[282](index=282&type=chunk) [Report of Independent Registered Public Accounting Firm](index=53&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) BDO USA, LLP issued an unqualified opinion on Acadia Realty Trust's 2019 and 2018 consolidated financial statements and internal control over financial reporting - BDO USA, LLP issued an unqualified opinion on the consolidated financial statements for December 31, 2019 and 2018, and for the three years ended December 31, 2019[138](index=138&type=chunk) - Also issued an unqualified opinion on the effectiveness of the company's internal control over financial reporting as of December 31, 2019[138](index=138&type=chunk) - Critical audit matters: purchase price allocation for real estate acquisitions (due to significant judgment in market-based assumptions for cash flow models) and assessment of impairment of real estate and real-estate related investments (due to complexity of judgments on impairment indicators and fair value inputs)[140](index=140&type=chunk)[142](index=142&type=chunk) [Consolidated Balance Sheets](index=55&type=section&id=Consolidated%20Balance%20Sheets) As of December 31, 2019, Acadia reported total assets of **$4.31 billion**, net real estate investments of **$3.61 billion**, and total equity of **$2.19 billion** Consolidated Balance Sheets (in thousands) | ASSETS | December 31, 2019 ($) | December 31, 2018 ($) | |:------------------------------------------|:----------------------|:----------------------| | Investments in real estate, at cost | | | | Operating real estate, net | 3,355,913 | 3,160,851 | | Real estate under development | 253,402 | 120,297 | | **Net investments in real estate** | **3,609,315** | **3,281,148** | | Notes receivable, net | 114,943 | 111,775 | | Investments in and advances to unconsolidated affiliates | 305,097 | 262,410 | | Other assets, net | 190,658 | 206,408 | | Cash and cash equivalents | 15,845 | 21,268 | | Restricted cash | 14,165 | 13,580 | | Rents receivable | 59,091 | 62,191 | | **Total assets** | **4,309,114** | **3,958,780** | | | | | | LIABILITIES | | | | Mortgage and other notes payable, net | 1,170,076 | 1,017,288 | | Unsecured notes payable, net | 477,320 | 533,257 | | Unsecured line of credit | 60,800 | — | | Accounts payable and other liabilities | 371,516 | 286,072 | | Dividends and distributions payable | 27,075 | 24,593 | | Distributions in excess of income from, and investments in, unconsolidated affiliates | 15,362 | 15,623 | | **Total liabilities** | **2,122,149** | **1,876,833** | | | | | | EQUITY | | | | Acadia Shareholders' Equity | | | | Common shares, $0.001 par value | 87 | 82 | | Additional paid-in capital | 1,706,357 | 1,548,603 | | Accumulated other comprehensive (loss) income | (31,175) | 516 | | Distributions in excess of accumulated earnings | (132,961) | (89,696) | | **Total Acadia shareholders' equity** | **1,542,308** | **1,459,505** | | Noncontrolling interests | 644,657 | 622,442 | | **Total equity** | **2,186,965** | **2,081,947** | | **Total liabilities and equity** | **4,309,114** | **3,958,780** | [Consolidated Statements of Income](index=56&type=section&id=Consolidated%20Statements%20of%20Income) For 2019, Acadia Realty Trust reported total revenues of **$295.3 million** and net income attributable to Acadia of **$53.0 million**, with basic and diluted EPS at **$0.62** Consolidated Statements of Income (in thousands) | Metric | 2019 ($) | 2018 ($) | 2017 ($) | |:------------------------------------------|:---------|:---------|:---------| | **Revenues** | | | | | Rental income | 291,190 | 254,508 | 242,138 | | Other | 4,137 | 5,173 | 6,414 | | **Total revenues** | **295,327** | **259,681** | **248,552** | | **Operating expenses** | | | | | Depreciation and amortization | 125,443 | 117,549 | 104,934 | | General and administrative | 35,416 | 34,343 | 33,756 | | Real estate taxes | 39,315 | 36,712 | 35,946 | | Property operating | 51,153 | 42,679 | 39,958 | | Impairment charges | 1,721 | — | 14,455 | | Other operating | — | 857 | 2,184 | | **Total operating expenses** | **253,048** | **232,140** | **231,233** | | Gain on disposition of properties | 30,324 | 5,140 | 48,886 | | **Operating income** | **72,603** | **32,681** | **66,205** | | Equity in earnings of unconsolidated affiliates | 8,922 | 9,302 | 23,371 | | Interest income | 7,988 | 13,231 | 29,143 | | Other income | 6,947 | — | 5,571 | | Interest expense | (73,788) | (69,978) | (58,978) | | Income (loss) from continuing operations before income taxes | 22,672 | (14,764) | 65,312 | | Income tax provision | (1,468) | (934) | (1,004) | | **Net income (loss)** | **21,204** | **(15,698)** | **64,308** | | Net loss (income) attributable to noncontrolling interests | 31,841 | 47,137 | (2,838) | | **Net income attributable to Acadia** | **$53,045** | **$31,439** | **$61,470** | | Basic and diluted earnings per share | $0.62 | $0.38 | $0.73 | [Consolidated Statements of Comprehensive Income](index=57&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) Acadia Realty Trust reported comprehensive income attributable to Acadia of **$21.35 million** for 2019, influenced by net income and a **$36.55 million** other comprehensive loss Consolidated Statements of Comprehensive Income (in thousands) | Metric | 2019 ($) | 2018 ($) | 2017 ($) | |:----------------------------------------------------------|:---------|:---------|:---------| | Net income (loss) | 21,204 | (15,698) | 64,308 | | Other comprehensive (loss) income: | | | | | Unrealized (loss) income on valuation of swap agreements | (35,674) | (2,659) | 634 | | Reclassification of realized interest on swap agreements | (872) | 71 | 3,317 | | **Other comprehensive (loss) income** | **(36,546)** | **(2,588)** | **3,951** | | **Comprehensive (loss) income** | **(15,342)** | **(18,286)** | **68,259** | | Comprehensive loss (income) attributable to noncontrolling interests | 36,696 | 47,627 | (3,377) | | **Comprehensive income attributable to Acadia** | **$21,354** | **$29,341** | **$64,882** | [Consolidated Statements of Shareholders' Equity](index=58&type=section&id=Consolidated%20Statements%20of%20Shareholders'%20Equity) Acadia Realty Trust's total equity increased to **$2.19 billion** as of December 31, 2019, driven by share issuance, noncontrolling interest contributions, and net income Consolidated Statements of Shareholders' Equity (in thousands) | Metric | December 31, 2019 ($) | December 31, 2018 ($) | December 31, 2017 ($) | |:--------------------------------------------------------------------|:----------------------|:----------------------|:----------------------| | **Acadia Shareholders' Equity** | | | | | Common Shares (issued and outstanding) | 87 | 82 | 84 | | Additional Paid-in Capital | 1,706,357 | 1,548,603 | 1,596,514 | | Accumulated Other Comprehensive (Loss) Income | (31,175) | 516 | 2,614 | | Distributions in Excess of Accumulated Earnings | (132,961) | (89,696) | (32,013) | | **Total Acadia Shareholders' Equity** | **1,542,308** | **1,459,505** | **1,567,199** | | Noncontrolling Interests | 644,657 | 622,442 | 648,440 | | **Total Equity** | **2,186,965** | **2,081,947** | **2,215,639** | - Key changes in 2019: Issuance of **5,164** Common Shares for **$145.5 million**, noncontrolling interest contributions of **$161.6 million**, and net income attributable to Acadia of **$53.0 million**[148](index=148&type=chunk) - Offset by: Dividends/distributions declared of **$103.4 million** and a net current period other comprehensive loss of **$36.5 million**[148](index=148&type=chunk)[227](index=227&type=chunk) [Consolidated Statements of Cash Flows](index=59&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) In 2019, Acadia's operating activities provided **$127.18 million** in cash, investing activities used **$397.06 million**, and financing activities provided **$265.04 million** Consolidated Statements of Cash Flows (in thousands) | Cash Flow Activity | 2019 ($) | 2018 ($) | 2017 ($) | |:----------------------------------------------------------|:---------|:---------|:---------| | Net cash provided by operating activities | 127,177 | 96,076 | 114,655 | | Net cash used in investing activities | (397,057) | (136,619) | 4,063 | | Net cash provided by (used in) financing activities | 265,042 | (10,278) | (127,758) | | Decrease in cash and restricted cash | (4,838) | (50,821) | (9,040) | | Cash and restricted cash, beginning of year | 34,848 | 85,669 | 94,709 | | Cash and restricted cash, end of year | $30,010 | $34,848 | $85,669 | - Operating activities provided **$31.1 million** more cash in 2019 compared to 2018, primarily due to property acquisitions and **$10.0 million** from accrued interest collection[118](index=118&type=chunk) - Investing activities used **$260.5 million** more cash in 2019, mainly due to **$209.5 million** more cash used in property acquisitions/leases and **$148.1 million** more in unconsolidated affiliates[118](index=118&type=chunk) - Financing activities provided **$275.3 million** more cash in 2019, primarily from **$145.5 million** more from common share sales, **$114.1 million** more from noncontrolling interest contributions, and **$40.9 million** more from net borrowings[118](index=118&type=chunk) [Notes to Consolidated Financial Statements](index=61&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The Notes provide detailed disclosures on Acadia's financial reporting, covering organization, segment reporting, critical accounting policies, debt, equity, leases, and tax information - Acadia Realty Trust operates as a fully-integrated equity REIT, utilizing an UPREIT structure where the Trust controls **95%** of the Operating Partnership as of December 31, 2019[153](index=153&type=chunk) - The company has three reportable segments: Core Portfolio, Funds, and Structured Financing, wit