Acadia Realty Trust(AKR) - 2019 Q4 - Annual Report

PART I Business Overview 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] - 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] - As of December 31, 2019, the Trust controlled 95% of the Operating Partnership as the sole general partner, utilizing an UPREIT structure[4] - The company operates through its Core Portfolio and generates growth via Funds, co-investing with institutional partners[4][5] - 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] - 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][8] General Information 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] - 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] - As of December 31, 2019, the Trust controlled 95% of the Operating Partnership as the sole general partner, utilizing an UPREIT structure[4] Business Objectives and Strategies 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] - 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] - The Fund strategy emphasizes opportunistic, disciplined acquisitions with high value creation potential, executed and realized through asset sales[5] - 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] Investing Activities 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] - In 2019, Fund V invested $318.0 million in seven properties (four unconsolidated, three consolidated)[9] - Dispositions in 2019 included the sale of Pacesetter Park for $22.6 million (Core Portfolio) and Fund properties totaling $86.8 million[9][93] - 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] - As of December 31, 2019, five Fund development projects and five Core development/redevelopment projects were underway[9] 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] - Many leases are for less than ten years, allowing for rent increases at market rates upon re-rental[10] - 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] Environmental Laws 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] 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] - Competition for tenants is primarily based on location, total occupancy costs (base rent and operating expenses), and the design and condition of improvements[11] Corporate Headquarters and Employees 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] - As of December 31, 2019, the company had 118 employees (92 at executive office, 26 at regional offices)[12] - No employees are covered by collective bargaining agreements; management believes employee relations are good[12] Company Website 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] Code of Ethics and Whistleblower Policies 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] - Documents are available in the Investor Information section of the company website[14] - Future amendments or waivers (for senior executive financial officers) will be disclosed on the website within four business days[14] Risk Factors 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] - The company operates in a very competitive and rapidly changing environment, with new risk factors emerging frequently[16] Risks Related to Our Business and Our Properties 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] - 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] - Vacated anchor space directly reduces rental revenues and can trigger co-tenancy clauses, allowing other tenants to terminate or reduce rent[19] - Inability to renew current leases or less favorable re-letting terms (including concessions) could adversely affect net income and distributions[20] - Decreased demand for retail space, exacerbated by e-commerce growth, could negatively affect market rents and financial performance[21][22] - Economic uncertainty and inflation could adversely affect tenant solvency, consumer spending, borrowing ability, and increase operating costs faster than rents[23][24][25] - Real estate investments are illiquid, limiting the ability to quickly adjust the portfolio to changed conditions[27] Risks Related to Structure and Management 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][35] - The Board of Trustees can change investment and financing policies or objectives without shareholder approval, potentially not serving all shareholders' interests[36] - REIT distribution requirements (at least 90% of taxable income) limit the ability to retain earnings for property acquisition/improvement or debt retirement[37] - Concentration of ownership by five institutional shareholders (54.5% of Common Shares) could allow greater influence over management[38] - Restrictions on potential change of control (e.g., preferred share issuance, executive severance agreements, Maryland law provisions) could prevent beneficial changes for shareholders[39][41] - 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][43] - Social media use may adversely impact reputation and business through inaccurate or unauthorized disclosures[45] - 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] - Exposure to possible liability relating to environmental matters, including remediation costs and fines, which could exceed property value or aggregate assets[47][48] - Uninsured losses or losses exceeding insured limits (e.g., from wars, terrorism, acts of God) could adversely affect financial condition[49] - Future terrorist attacks or civil unrest could harm demand for and value of properties, increase security costs, and limit insurance availability[50] - Litigation and compliance with regulations like the Americans with Disabilities Act (ADA) and fire/safety codes may require unplanned expenditures[51][52] Risks Related to Our REIT Status 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] - Legislative or regulatory tax changes, including the Tax Cuts and Jobs Act, could adversely affect the company or its shareholders[54] - May be required to borrow funds or sell assets to satisfy REIT distribution requirements, even under unfavorable market conditions[55] - Dividends payable by REITs generally do not qualify for reduced tax rates, potentially making REIT investments less attractive to individual investors[56][58] - Complying with REIT requirements may force the company to forgo otherwise attractive opportunities or liquidate investments[59] - Ownership limits on shares are in place to ensure REIT qualification, which may delay, defer, or prevent a change of control[59] Unresolved Staff Comments There are no unresolved staff comments to report - No unresolved staff comments[60] Properties 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] - Core Portfolio properties were 93.4% occupied, and Fund properties were 88.6% occupied, excluding properties under development/redevelopment or pre-stabilized[61] - Rental revenues primarily come from national retailers under long-term leases, providing fixed minimum rent and pro-rata share of operating expenses[61][63] - No individual property contributed more than 10% of total revenues for the years ended December 31, 2019, 2018, or 2017[63] Retail Properties 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] - 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] - 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] - Revenues primarily consist of fixed minimum rent and tenants' pro-rata share of operating expenses; percentage rents are an insignificant portion[61][63] Major Tenants 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] 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 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 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 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] 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 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] - 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][81] - 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] - Management does not expect other ordinary course legal proceedings to have a material adverse effect on consolidated financial position[81] Mine Safety Disclosures This section is not applicable to Acadia Realty Trust - Not applicable[82] PART II Market for Registrant's Common Equity, Related Stockholder Matters, Issuer Purchases of Equity Securities and Performance Graph 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] - 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] Market Information, Dividends and Holders of Record of our Common Shares 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] - Quarterly dividends declared are discussed in Note 10, and their Federal Income Tax characterization in Note 14[84] Securities Authorized for Issuance Under Equity Compensation Plans 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] - The plan increased authorization by 1.6 million shares, totaling 3.7 million shares available for officers and employees[85] 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 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 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] Issuer Purchases of Equity Securities 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] - Repurchased 2,294,235 shares for $55.1 million in 2018[89] - No shares repurchased in 2019 or 2017[89] - Approximately $145.0 million remained available under the program as of December 31, 2019[89] Selected Financial Data 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 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] - Primary business objective: acquire and manage commercial retail properties for cash distributions and capital appreciation[91] - Strategies include: operating a high-quality Core Portfolio, generating external growth through opportunistic Fund acquisitions, and maintaining a strong and flexible balance sheet[91] 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] - Majority of operating income derived from rental revenues from operating properties, including expense recoveries from tenants[91] - 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] Significant Developments During the Year Ended December 31, 2019 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] - 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] - Disposed of Pacesetter Park shopping center for $22.6 million, recognizing a $16.8 million gain[93] - 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][94] - 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] - Redeemed a $15.3 million Fund IV Structured Financing investment and provided $13.5 million in seller financing[97] - Issued 5,164,055 Common Shares through its ATM program for gross proceeds of $147.7 million[98] Results of Operations 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] - 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] - 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] - Unallocated general and administrative expense increased $1.1 million, mainly due to internal leasing salaries no longer being capitalized[101] Supplemental Financial Measures 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 $1.41 diluted FFO per share - NOI and rent spreads are used for Core Portfolio performance analysis, but not for Funds due to their opportunistic nature and finite-life[102] Core Portfolio Net Operating Income (NOI, in thousands) | Metric | 2019 ($) | 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 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] - Invested $514.4 million in 20 new properties within Core and Fund portfolios in 2019[110] - Remaining capital commitments to Funds aggregated $86.1 million as of December 31, 2019[111] - 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 $111.1 million)[112] Consolidated Debt Summary (in thousands) | Debt Type | December 31, 2019 ($) | 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] - 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][118] - ATM Program: sold 5,164,055 Common Shares in 2019 for gross proceeds of $147.7 million[116] Historical Cash Flow (in millions) | Activity | 2019 ($) | 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 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 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 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] - 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][123][124][125][127][128] - 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] Recently Issued Accounting Pronouncements 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] Quantitative and Qualitative Disclosures about Market Risk 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] - 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] - 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] - 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] - 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] - Interest rate risk exposure decreased from 35.8% of consolidated debt in 2018 to 18.3% in 2019[135] Information as of December 31, 2019 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] - Fixed-rate debt (including derivatives): $1,403.3 million (81.7%) at 3.56% weighted-average interest rate[113] - 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] - Scheduled debt maturities in 2020: $437.3 million consolidated debt and $10.1 million pro-rata share of unconsolidated debt, mostly Fund debt[133] - 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] - Fair value of total consolidated outstanding debt would decrease by approximately $11.5 million if interest rates increase by 1%[133] Summarized Information as of December 31, 2018 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] - Fixed-rate debt (including derivatives): $1,001.7 million (64.2%)[135] - Variable-rate debt: $558.7 million (35.8%) based on LIBOR or Prime rates[135] - Used 29 interest rate swap agreements ($609.9 million notional) and three interest rate cap agreements ($143.8 million notional)[135] - A 100-basis-point increase in LIBOR would have increased interest expense on variable-rate debt by $5.6 million annually[135] Changes in Market Risk Exposures from December 31, 2018 to December 31, 2019 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] - Variable-rate debt as a percentage of total consolidated debt decreased from 35.8% (2018) to 18.3% (2019)[135] Financial Statements and Supplementary Data 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] - 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][139] - 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][142] - 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][179][191][193][203][204][208][213][222][231][241][247][254][263][266] - Financial Statement Schedules include Valuation and Qualifying Accounts, Real Estate and Accumulated Depreciation, and Mortgage Loans on Real Estate[136][271][273][282] Report of Independent Registered Public Accounting Firm 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] - Also issued an unqualified opinion on the effectiveness of the company's internal control over financial reporting as of December 31, 2019[138] - 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][142] Consolidated Balance Sheets 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 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 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 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] - Offset by: Dividends/distributions declared of $103.4 million and a net current period other comprehensive loss of $36.5 million[148][227] Consolidated Statements of Cash Flows 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] - 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] - 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] Notes to Consolidated Financial Statements 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] - The company has three reportable segments: Core Portfolio, Funds, and Structured Financing, wit