Acadia Realty Trust(AKR) - 2022 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported second quarter earnings of $0.32 per share, exceeding expectations, with expected year-over-year FFO growth of about 15% at the midpoint of guidance [19][20] - Same-store NOI grew by 4.8% for the quarter and 7.1% year-to-date, driven primarily by the street portfolio, which grew nearly 7% in the second quarter [23][24] - Quarterly cash collections remained strong at 98% [19] Business Line Data and Key Metrics Changes - The street portfolio is experiencing significant growth, with anticipated 15% growth over the next two years, particularly in high-growth markets like Soho, which is expected to double its NOI [27][28] - The suburban portfolio remains stable, but the street portfolio is outperforming, contributing to the overall positive growth outlook [8][10] Market Data and Key Metrics Changes - Key markets showing strong rental growth include Soho (13% year-over-year), M Street in Georgetown, and various locations in Chicago, LA, and Dallas [9][10] - The company noted that affluent demographics in certain markets are maintaining strong pricing power despite inflationary pressures [12] Company Strategy and Development Direction - The company is focused on internal growth with expectations of 5% to 10% multi-year core internal growth, supported by strong leasing activity and tenant demand [10][24] - The strategy includes responding to market shifts by increasing ownership in high-potential assets like City Point, which is expected to provide significant long-term value [17][36] Management's Comments on Operating Environment and Future Outlook - Management acknowledged concerns about economic slowdown and inflation but emphasized the strength of their portfolio and the ongoing demand for retail space [10][13] - The company is optimistic about future growth, particularly in high-demand areas, and believes that the current market volatility may create compelling opportunities [17][18] Other Important Information - The company has added nearly $250 million in acquisitions year-to-date, including properties in Williamsburg, Brooklyn, and Dallas [15][16] - The refinancing of City Point has reduced borrowing costs and positioned the asset for future growth [22][30] Q&A Session Summary Question: Details on City Point's expected yield - The expected unlevered yield on the initial cost for City Point is 6%, anticipated to kick in within the next 12 to 24 months [39][40] Question: Potential for additional interest in City Point - Additional opportunities to increase interest in City Point are expected within the next 12 to 24 months [40][41] Question: Current market value of City Point - The current pricing is not indicative of the asset's high-quality value, with expectations for long-term value creation remaining strong [43][45] Question: H&M lease situation - The company anticipates regaining the H&M space in the second half of the year, which is factored into growth projections [49][50] Question: Pro forma leverage ratio expectations - The company is targeting a pro forma leverage ratio in the mid-6s by the end of the year [51][52] Question: Opening date for Primark at City Point - Primark is on track to open in the second half of the year, likely in time for the holiday season [62][63] Question: Additional leasing at City Point - The remaining leasing needed for stabilization is being actively pursued, with strong interest expected as surrounding developments complete [69][70]