Acadia Realty Trust(US:AKR)2021-08-02 02:21Financial Data and Key Metrics Changes - Funds from Operations (FFO) for Q2 2021 came in at $0.30 per share, exceeding expectations due to early lease commencements and improved cash collections, with a 96% collection rate of pre-COVID rents [21][22] - Full-year FFO guidance was raised to a range of $5 to $14 million, representing a 7% increase at the low end compared to original guidance [23][24] - The company anticipates Core NOI growth between 5% to 10% annually through 2024, aiming for over $25 million incremental NOI by 2024 [24][25] Business Line Data and Key Metrics Changes - Approximately 60% of executed leases came from the street and urban portfolio, with New York City representing nearly 40% of the current pipeline [26] - The company has a $14 million pro rata share of ABR in its core pipeline, with over 400,000 square feet of space, 70% of which is incremental to 2020 NOI [27] - The spread between physical and leased occupancy grew over 100 basis points during the quarter to 260 basis points [27] Market Data and Key Metrics Changes - Retailer demand is accelerating, with a shift from necessity-based to discretionary spending, particularly in key street locations in major markets [6][7] - The luxury segment is seeing retailers expanding their footprints in key markets, indicating a rebound in high-density corridors [9][10] - Positive sales performance is being reported by several retailers, with some already comping positively to pre-COVID sales [12] Company Strategy and Development Direction - The company is focusing on acquiring out-of-favor properties with unleveraged yields of about 8%, leveraging them to achieve mid-teens current cash flow [16] - There is an emphasis on selectively acquiring assets in high barrier entry markets to achieve superior long-term growth [17] - The company is optimistic about the potential for above-trend NOI growth driven by the recovery in street and urban portfolios [14][25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in a multi-year rebound in leasing and operating trends, particularly in street retail [19] - The company is seeing a return of sellers to the market, indicating a potential for increased acquisition opportunities [18][68] - Management remains cautious about markets heavily dependent on tourism, focusing instead on areas with strong domestic demand [57][58] Other Important Information - The company successfully closed on a $700 million unsecured credit facility, significantly increasing liquidity and extending maturities [31] - The company raised approximately $46 million through an ATM at an average issuance price of $20.37, which will be used for investments and debt repayment [32] Q&A Session Summary Question: Clarification on NOI growth and Soho portfolio - Management confirmed that the projected doubling of Soho street retail NOI refers specifically to the Soho collection of assets [42] Question: Growth expectations for suburban retail portfolio - Management acknowledged positive momentum in suburban retail but noted different starting points compared to street retail [44][45] Question: Potential for capital recycling in suburban retail - Management indicated that while there is interest in capital recycling, a significant calling is not expected until private markets align with public markets [47] Question: Insights on lease structures and negotiating power - Management noted a shift back to longer-term leases with contractual growth, indicating a more favorable negotiating position [74] Question: Timing for external growth and acquisitions - Management expressed confidence in deploying capital wisely and indicated that deal flow is expected to increase [68][77]