Acadia Realty Trust(US:AKR)2022-05-03 19:32Financial Data and Key Metrics Changes - The company reported first-quarter earnings of $0.33 per share, exceeding expectations, driven by strong internal growth of nearly 10% and accretion from approximately $380 million of core and fund investments [20][21] - Same-store NOI grew by 9.7%, attributed to improved credit conditions, occupancy increases, and positive cash spreads on new leases [23][24] - The company conservatively increased its full-year guidance, projecting year-over-year FFO growth in excess of 13% [23] Business Line Data and Key Metrics Changes - The street and urban portfolio saw a sequential occupancy growth of 100 basis points, contributing to improved tenant credit and cash collections [21][22] - The company achieved core collections exceeding 98% for the quarter, reflecting strong tenant performance [22] - The street leases are expected to outperform suburban assets by approximately 300 basis points, with embedded rental growth exceeding 15% on signed but not yet opened leases [26] Market Data and Key Metrics Changes - The company noted a significant reduction in vacancies in key markets, such as Green Street and Soho, where vacancies dropped from 14 to 1 [10] - The Dallas market, particularly the Henderson Avenue corridor, is highlighted as a must-have market for retailers due to positive demographic shifts [15][16] Company Strategy and Development Direction - The company is focused on acquiring assets in high barrier-to-entry markets where tenant performance is expected to drive market rents higher [12][13] - The strategy includes a combination of accretive growth and long-term value-add opportunities, with a focus on retail corridors that enhance the shopping experience [12][14] - The company aims to maintain a strong balance sheet with ample liquidity and minimal upcoming core debt maturities [20][29] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the strength of the job market and consumer spending, despite concerns about inflation and supply chain issues [6][8] - The recovery in physical retail is happening faster and stronger than expected, with many retailers reporting sales exceeding pre-COVID levels [11][56] - Management remains cautious but optimistic about the future, indicating that the current economic environment presents both challenges and opportunities [64][66] Other Important Information - The company has funded approximately $125 million of equity year-to-date, with various avenues to access capital for external growth [29] - The fund platform remains well-positioned, with a successful capital allocation strategy and ongoing discussions for Fund VI [32][35] Q&A Session Summary Question: Is there any change in updated guidance for core and fund investment activity? - Management confirmed that there were no updates to the individual detailed assumptions for investment activity [38] Question: Can you elaborate on the investment pipeline and any changes in investment hurdles? - Management indicated that the acquisition team remains active and expects to update on a quarterly basis, with a focus on opportunistic acquisitions [39][40] Question: What is the competition like for buyers of street retail assets? - Management noted that while there is competition, it is less intense compared to previous cycles, with many institutional investors focusing on defensive assets [51] Question: How are street retail tenants performing in terms of traffic and sales? - Management reported that retailers are experiencing positive sales growth, often exceeding pre-COVID levels, driven by a rebound in residential demand [56] Question: What is the expected investment opportunity in the Henderson corridor? - Management indicated that the investment could potentially double or triple, with a mix of redevelopment and incremental acquisitions [46][80]