Acadia Realty Trust(US:AKR)2020-02-14 01:14Financial Data and Key Metrics Changes - Same-store NOI grew 3.9% for the year and 3.1% during the fourth quarter, driven by a strong fourth quarter 2018 comp [26][30] - Full-year 2019 FFO was $1.41 per share, with fourth quarter FFO at $0.32 per share, aligning with expectations [30][32] - 2020 FFO guidance is anticipated to be between $1.32 and $1.46, with variability due to potential transactional activities [32] Business Line Data and Key Metrics Changes - The street and urban portfolio drove same-store results with growth of approximately 6% in 2019, while suburban portfolio contributed 1% [26][30] - The company completed over $500 million in new acquisitions and $100 million in dispositions during 2019, contributing to a projected $0.05 or roughly 3% annual FFO accretion [14][31] Market Data and Key Metrics Changes - Market rents on Armitage Avenue in Lincoln Park, Chicago, grew approximately 20% over the past two years [11] - The company is seeing increased demand from DTC brands, which are recognizing the importance of physical stores, positively impacting the street and urban portfolio [10][12] Company Strategy and Development Direction - The company is focusing on acquiring high-quality street and urban assets in must-have markets to capture outsized growth [14][19] - The strategy includes a mix of internal growth through same-store NOI and external growth through acquisitions and fund investments [19][21] Management's Comments on Operating Environment and Future Outlook - Management noted a "bumpy bottom" for retail real estate, with improved leasing demand and tenant performance in 2019 compared to previous years [6][7] - The company is well-positioned to benefit from ongoing trends in retail, including the importance of physical stores and the growth of DTC brands [10][12] Other Important Information - The company has a strong balance sheet, with the ability to deploy similar volumes of capital in 2020 as in 2019 [32][33] - The fund platform has achieved mid-teens levered returns through opportunistic acquisitions of out-of-favor suburban shopping centers [16][21] Q&A Session Summary Question: Who is the competition for acquisitions of contiguous high street assets? - Management noted that competition varies, with private funds like Asana Group being involved, but the biggest challenge is getting sellers to understand current market realities [36] Question: How significant is the trend of direct-to-consumer brands opening physical stores? - Management indicated that while not all DTC brands will succeed, there is a growing recognition of the profitability of physical stores, leading to increased demand [38][40] Question: What is the impact of Pier 1 and Forever 21 on same-store NOI? - Management clarified that Forever 21 has been recaptured and is not in the bad debt reserve, while Pier 1 is expected to be recaptured early in the year [44][46] Question: What is the expected growth of the Structured Financing portfolio? - Management stated that the structured financing component has been reduced significantly and will only pursue opportunities that align with their long-term strategy [56] Question: What are the rent bumps in the street and urban portfolio leases? - Management indicated that the average rent bump is around 3%, with shorter lease terms becoming more common [80]