Acadia Realty Trust(US:AKR)2020-05-10 08:18Financial Data and Key Metrics Changes - The company reported a 1.4% decline in same-store NOI for Q1 2020, driven by increased tenant credit reserves due to COVID-19, resulting in a $0.04 decline in FFO per share [24][27][29] - Approximately 50% of April rents were collected, allowing the company to breakeven on operating expenses and core debt obligations [29][34] Business Line Data and Key Metrics Changes - Over one-third of the portfolio is essential necessity-based tenants, with strong rent collection rates [10][29] - The next largest group consists of nonessential but high-quality tenants, with April collections being less consistent but showing progress [10][11] - Local tenants, younger national brands, and those on the watch-list represent about 25% of the portfolio, with varying collection rates and risks [12][14][30] Market Data and Key Metrics Changes - The street and urban portfolio represents about 60% of NOI, with April collections for street and urban being similar to suburban collections [15][25] - Collection rates varied by location, with Chicago at 45% and Manhattan lower due to the shutdown of non-essential businesses [16] Company Strategy and Development Direction - The company remains focused on its diverse tenant base and strong balance sheet, with limited exposure to new development [8][21] - The strategy includes acquiring out-of-favor assets with high yields and attractive cash flow, while avoiding new developments [20][39] - The company is positioned to take advantage of opportunities as the market stabilizes post-COVID [21][44] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the retail sector is at the epicenter of the crisis but believes in the long-term value of their real estate [9][18] - The company is cautiously optimistic about recovery, emphasizing the importance of location and quality tenants [19][22] - Management has experience navigating through past economic cycles and believes unique opportunities will arise from the current situation [22] Other Important Information - The company has temporarily paused its quarterly dividend to preserve capital and enhance liquidity [37] - There is ample liquidity with over $100 million available, and no material core maturities for several years [34][35] Q&A Session Summary Question: How does the company expect to approach Q2 from a collectibility perspective? - The company will assess each tenant's financial strength and may consider moving leases to a cash basis for those at heightened risk [46][48] Question: What is the collection rate for digitally native retailers? - The collection rate for this group is expected to be low, but many have solid online sales and are communicating plans to reopen [49][50] Question: What is required to reopen high street locations compared to suburban shopping centers? - The company will ensure sidewalks are ready and work with retailers to facilitate safe reopening, with more support for local retailers [53][54] Question: What is the strategy for the $600 million dry powder in the fund? - The company plans to be opportunistic with remaining capital, monitoring the recovery and potential distressed opportunities [56][57] Question: What percentage of the portfolio is luxury or aspirational tenancy? - Luxury tenants make up just under 7% of the total portfolio, and management is cautious about their recovery [60][64] Question: What percentage of restaurant revenues is considered resilient? - About 8% of revenues come from restaurants, with 75% of that from quick-service establishments, which are expected to be more resilient [66]