Acadia Realty Trust(US:AKR)2021-10-28 07:16Financial Data and Key Metrics Changes - The third quarter earnings per share were $0.27, exceeding expectations and landing in the upper end of the guided range of $0.25 to $0.27 [17] - Same-store NOI increased approximately 7%, driven by improving occupancy and a reduction in credit reserves [21] - Cash collections were over 97% of core billings during the quarter, with each 1% increase in collections equating to approximately $500,000 in earnings [19] Business Line Data and Key Metrics Changes - Year-to-date, the company signed over $11 million in leases, with a pipeline of $6.5 million, indicating strong leasing activity [10] - Positive lease spreads were achieved in key locations, with cash increases of approximately 11% and GAAP increases of 19% [21] - The company anticipates $25 million in internal core NOI growth by year-end 2024, resulting in over $150 million of core NOI [22] Market Data and Key Metrics Changes - Tenant sales performance has exceeded expectations, with some locations seeing sales in the $2,000 per foot range [20] - The company is observing a recovery in the debt and equity markets, which should enable competitive acquisition costs [13] - The company noted that urban markets like SoHo and Melrose Place are showing strong recovery, while Chicago and DC are slower to reopen [60][61] Company Strategy and Development Direction - The company is focusing on both internal growth through lease-up and external growth through on-balance sheet investing and fund acquisitions [9][12] - The strategy includes acquiring out-of-favor open-air retail at substantial discounts to replacement costs, targeting mid-teens yields [27] - The company is optimistic about achieving pre-COVID NOI levels by late 2022 or early 2023 [23] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about internal growth, projecting 5% to 10% same-store NOI growth per year through 2024 [36] - The company is seeing a resurgence in tenant interest and sales performance, which is expected to drive rental growth [43] - Management acknowledged the potential impact of supply chain disruptions but noted that it has not materially affected operations thus far [68][69] Other Important Information - The company has not issued any equity since the last call, maintaining a strong balance sheet with ample liquidity [26] - The fund platform is well-positioned with a successful capital allocation strategy, focusing on grocery-anchored properties for future dispositions [30] - The company is preparing to refinance the City Point project, which has seen positive momentum with increased shopper traffic and tenant sales [31][32] Q&A Session Summary Question: Expectations for quarterly earnings excluding Albertsons' gains - Management confirmed that the growth from the leasing pipeline will offset move-outs, with growth expected to accelerate in the second half of 2022 [34][35] Question: Trends in leasing momentum across the portfolio - Management noted that tenant interest continues to grow, with sales performance exceeding expectations, particularly in street retail [42][43] Question: Same-store NOI and lease spreads - Management explained that the same-store NOI was solid at 7%, driven by strong fundamentals and a narrowing gap between cash and GAAP spreads [47][49] Question: Interest in the Nordstrom Rack space in San Francisco - Management indicated strong interest in the space, which has been consistent pre- and during COVID [72] Question: Increases in leasing costs per square foot - Management noted that increases in leasing costs were primarily seen in suburban deals, while street deals remained stable [73][74]