Acadia Realty Trust(US:AKR)2025-07-30 20:17PART I - FINANCIAL INFORMATION Item 1. Financial Statements This section presents Acadia Realty Trust's unaudited condensed consolidated financial statements, including balance sheets, statements of operations, comprehensive income, changes in equity, and cash flows, with detailed notes on accounting policies and financial activities Condensed Consolidated Balance Sheets Total assets increased to $4.88 billion from $4.37 billion, driven by real estate investments, while total liabilities rose to $2.15 billion from $1.84 billion, and total equity grew to $2.71 billion from $2.50 billion Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Net investments in real estate | $4,116,002 | $3,673,593 | | Total assets | $4,875,569 | $4,371,203 | | Liabilities | | | | Mortgage and other notes payable, net | $1,007,588 | $953,700 | | Unsecured notes payable, net | $743,049 | $569,566 | | Total liabilities | $2,148,236 | $1,838,931 | | Equity | | | | Total Acadia shareholders' equity | $2,269,126 | $2,065,672 | | Total equity | $2,706,159 | $2,501,689 | Condensed Consolidated Statements of Operations The company reported a net loss of $32.6 million for the six months ended June 30, 2025, primarily due to a $24.6 million impairment charge and a $9.6 million loss on change in control, despite a 14.8% increase in total revenues to $205.0 million Statement of Operations Summary (in thousands, except per share data) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Total revenues | $204,986 | $178,610 | | Impairment charges | $24,640 | $0 | | Loss on change in control | $9,622 | $0 | | Net (loss) income | $(32,599) | $(5,275) | | Net income attributable to Acadia shareholders | $3,571 | $4,712 | | Diluted income per share | $0.02 | $0.04 | Condensed Consolidated Statements of Cash Flows Net cash provided by operating activities increased to $90.7 million from $58.0 million, while net cash used in investing activities was $394.7 million due to real estate acquisitions, and net cash provided by financing activities was $332.1 million Cash Flow Summary (in thousands) | Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $90,700 | $58,019 | | Net cash (used in) provided by investing activities | $(394,699) | $19,976 | | Net cash provided by (used in) financing activities | $332,105 | $(48,235) | | Increase in cash and cash equivalents and restricted cash | $28,106 | $29,760 | Notes to Condensed Consolidated Financial Statements (Unaudited) These notes detail the company's accounting policies and activities, highlighting significant acquisitions, debt facility updates including a new $250 million term loan, derivative instruments, and segment performance breakdowns - The company operates through two main platforms: the Core Portfolio (167 properties) and the Investment Management platform (51 properties), including several opportunity funds3637 - During the six months ended June 30, 2025, the company acquired seven properties and increased its stake in another for a total purchase price of $551.5 million54 - On January 23, 2025, the company acquired an additional 48% interest in the Renaissance Portfolio, increasing its stake to 68% and resulting in a $9.6 million loss on change in control55 - Total consolidated indebtedness was $1.81 billion as of June 30, 2025, up from $1.55 billion at year-end 2024, with a new $250 million term loan added to its credit facility8289 - In March 2025, the company settled 11.2 million forward shares under its ATM program, receiving net proceeds of $277.9 million, with 2.4 million forward shares remaining outstanding as of June 30, 2025130129 Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's performance, strategic priorities, and financial condition, highlighting $423.7 million in accretive acquisitions, 4.1% same-property NOI growth, and balance sheet strengthening through a credit facility amendment, alongside operational results, liquidity, and non-GAAP measures - Strategic priorities include maximizing internal growth, executing accretive acquisitions, advancing development projects, scaling investment management, and maintaining financial flexibility193 - Year-to-date acquisitions totaled approximately $423.7 million in the Core and Investment Management portfolios, focusing on high-quality street retail in key urban corridors193 - The Core Portfolio achieved 4.1% same-property NOI growth for the six months ended June 30, 2025193243 - The company amended its credit facility, establishing a new $250.0 million term loan (of which $175.0 million was drawn) and increasing the accordion feature to $1.5 billion200 Funds from Operations (FFO) (in thousands) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net income attributable to Acadia shareholders | $3,571 | $4,712 | | Adjustments (Depreciation, Impairment, etc.) | $78,754 | $54,428 | | FFO attributable to Common Shareholders and Common OP Unit holders | $82,657 | $59,446 | Results of Operations Total net income attributable to Acadia shareholders decreased to $3.6 million from $4.7 million, with Core Portfolio net income increasing by $3.8 million offset by a $9.6 million loss on change in control, and Investment Management net income decreasing by $4.0 million due to a $24.6 million impairment charge Net Income (Loss) Attributable to Acadia Shareholders by Segment (in millions) | Segment | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change | | :--- | :--- | :--- | :--- | | Core Portfolio | $13.7 | $9.9 | $3.8 | | Investment Management | $0.7 | $4.7 | $(4.0) | | Structured Financing | $12.6 | $10.3 | $2.3 | | Unallocated | $(23.5) | $(20.1) | $(3.4) | | Total | $3.6 | $4.7 | $(1.1) | - Core Portfolio rental revenue increased by $24.9 million, driven by new acquisitions ($8.6 million), a termination fee from Whole Foods ($8.4 million), and the consolidation of the Renaissance Portfolio ($6.5 million)224 - Investment Management recognized impairment charges of $24.6 million due to shortened hold periods for one Fund III and one Fund IV property233 Liquidity and Capital Resources The company's liquidity sources include equity/debt issuances, property sales, and operating cash flow, with $42.8 million cash and $471.5 million credit facility capacity, while total consolidated debt stood at $1.81 billion with 75.1% fixed-rate - Primary sources of liquidity include equity/debt issuances, property sales, repayments of structured financing, liquidation of marketable securities, and cash flow from operations261 - As of June 30, 2025, total consolidated indebtedness was $1.81 billion, with 75.1% fixed or effectively fixed at a weighted average interest rate of 4.92%258 - The company has $443.7 million remaining available under its $500.0 million ATM Program, with 2.4 million forward shares outstanding yielding $55.5 million upon settlement as of June 30, 2025128204263 Quantitative and Qualitative Disclosures about Market Risk The company's primary market risk is interest rate risk on its $1.81 billion debt, with 75.1% fixed, where a 100 basis point increase in rates would raise annual interest expense by $4.5 million on $451.9 million of variable-rate debt - As of June 30, 2025, 75.1% of the company's $1.81 billion debt was fixed-rate or effectively fixed through derivative instruments282 - A 100 basis point increase in interest rates would increase annual interest expense on the $451.9 million of variable-rate debt by approximately $4.5 million284 - The fair value of total consolidated debt would decrease by approximately $11.5 million if interest rates increased by 1%285 Controls and Procedures Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of June 30, 2025, with no material changes in internal control over financial reporting during the quarter - The CEO and CFO concluded that disclosure controls and procedures were effective as of June 30, 2025291 - No material changes to internal control over financial reporting occurred during the quarter292 PART II - OTHER INFORMATION Legal Proceedings The company is party to various legal proceedings incidental to its business but does not expect them to have a material adverse effect on its financial position - The company does not expect any outstanding legal proceedings to have a material adverse effect on its consolidated financial position293 Risk Factors No material changes to the risk factors disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2024, were reported - No material changes to risk factors were reported since the 2024 Annual Report on Form 10-K294 Unregistered Sales of Equity Securities and Use of Proceeds No unregistered sales of equity securities or use of proceeds were reported for the period - None295 Other Information No officers or trustees adopted, terminated, or modified any Rule 10b5-1 trading plans or non-Rule 10b5-1 trading arrangements during the three months ended June 30, 2025 - No officers or trustees adopted, terminated, or modified any Rule 10b5-1 trading plans during the quarter298 Exhibits This section lists exhibits filed with the Form 10-Q, including the Third Amendment to the Credit Agreement and various officer certifications required by the Sarbanes-Oxley Act - Key exhibits filed include the Third Amendment to the Third Amended and Restated Credit Agreement and certifications from the CEO and CFO300