Exhibit 99.1
Acadia Realty Trust Reports First Quarter 2007 Operating Results
NEW YORK--(BUSINESS WIRE)--April 26, 2007--Acadia Realty Trust
(NYSE: AKR - "Acadia" or the "Company"), a real estate investment
trust ("REIT"), today reported operating results for the quarter ended
March 31, 2007. All per share amounts discussed below are on a fully
diluted basis.
First Quarter 2007 Highlights
Earnings - 2007 first quarter FFO up 29% and EPS up 54%
-- Funds from operations ("FFO") per share of $0.36 for the first
quarter 2007 compared to $0.28 for first quarter 2006
-- Earnings per share ("EPS") for 2007 of $0.20 compared to $0.13
for 2006
Core Portfolio - Continued asset recycling
-- Completed acquisitions in both Manhattan and Staten Island,
New York in connection with core portfolio asset recycling
program
New York Urban/Infill Redevelopment Initiative - Addition to
pipeline under contract
-- Entered into agreement for the purchase of leasehold interest
in The Gallery at Fulton Street in downtown Brooklyn for
approximately $120.0 million
-- Commenced construction at Fordham Plaza during first quarter
2007
RCP Venture -Albertson's investment returns 192% of invested
capital
-- Received distributions totaling approximately $44.4 million
during quarter of which Acadia's share, after allocation to
minority interests, amounted to approximately $8.9 million
First Quarter Operating Results
For the quarter ended March 31, 2007, FFO, a widely accepted
measure of REIT performance, was $12.1 million, or $0.36 per share,
compared to $9.6 million, or $0.28 per share for the quarter ended
March 31, 2006. EPS was $0.20 for first quarter 2007 compared to $0.13
for first quarter 2006. Included in the first quarter 2007 operating
results was $2.9 million of income, net of income taxes and minority
interest, from Acadia's investment in Albertson's through its Retailer
Controlled Property ("RCP") Venture.
Portfolio Activity -Continued asset recycling with two New York
City acquisitions
During the first quarter of 2007, Acadia furthered its goal of
continually upgrading the quality of its core asset base with the
completion of two acquisitions through its 1031 exchange program. The
Staten Island acquisition enabled Acadia to defer, for income tax
purposes, a $15.8 million gain from the fourth quarter 2006 sale of a
non-core asset. The Manhattan acquisition established a new forward
1031 exchange position. Details of the two acquisitions are as
follows:
200 West 54th Street, Manhattan, NY
Acadia acquired the retail commercial condominium spanning 7th
Avenue between 53rd and 54th Streets along with a contiguous medical
office unit for $36.6 million in cash. The property is approximately
10,000 square feet and includes 165 feet of frontage on 7th Avenue.
The location is in a prime commercial and retail neighborhood in
Manhattan, five blocks south of Central Park, three blocks south of
Carnegie Hall, and borders Times Square to the north. The largest
tenant in the property is the Stage Delicatessen, a New York landmark
and tourist attraction which has operated out of this location for
more than 70 years.
145 East Service Road, Staten Island, NY
Acadia also acquired, for $17.0 million, a 52,000 square foot
building located on Route 440 (West Shore Expressway), near the
intersection of Route 440 and the Staten Island Expressway (I-278).
The entire property, which is currently being renovated, is net-leased
to LA Fitness, which currently operates approximately 150 fitness
centers throughout the United States and is considered a leader in the
fitness industry. Completion of the build-out is anticipated during
the third quarter of 2007.
Core portfolio performance
Including its pro-rata share of joint venture operating
properties, Acadia's portfolio occupancy was 94.0% for the quarter
ended March 31, 2007, which is unchanged from December 31, 2006
occupancy levels. Same store net operating income ("NOI") for the
retail portfolio decreased approximately $0.1 million, or 0.8%, for
first quarter 2007 compared with first quarter 2006. A 0.4% increase
from revenues was offset by 1.2% increase in winter-related expenses
for 2007. During the first quarter of 2007, Acadia executed new leases
at an average rent increase of 6% and renewal leases at an average
rent increase of 10% from the previous rents on a cash basis.
Including the effect of the straight-lining of rents, new and renewal
leases had an average rent increase of 16% and 15%, respectively.
Balance Sheet - Portfolio debt is now 94% fixed-rate
In connection with the underwriter's over-allotment option related
to the $100.0 million issuance of 3.75% convertible notes during 2006,
Acadia issued an additional $15.0 million of these notes during
January 2007. During the first quarter 2007, Acadia paid down $21.3
million of floating-rate debt and refinanced a $30.0 million revolving
and fully available line of credit, which bears interest at LIBOR plus
1.25% and matures in 2010. In addition, Acadia refinanced a $15.7
million mortgage with $26.0 million of fixed-rate debt at 5.4%.
The following reflects the Company's ongoing focus on maintaining
a strong balance sheet:
-- Fixed-charge coverage ratio (EBITDA / interest expense plus
preferred distributions) of 3.0 to 1 for the first quarter
2007
-- Debt to total market capitalization of 33%
-- Dividend payout ratio for the first quarter 2007 of 55% of FFO
-- Approximately $160 million available under existing credit
facilities
-- 94% of the Company's total mortgage debt is now fixed-rate,
inclusive of long-term interest rate swaps and adjusted for
its pro-rata share of consolidated joint venture debt
External Growth Continues with Focus on New York Urban/Infill
Redevelopments and RCP Venture
New York Urban/Infill Redevelopment Program
As previously announced during the first quarter of 2007, Acadia,
through its Fund II New York Urban-Infill Redevelopment Initiative
with P/A Associates ("Acadia P/A") and Paul Travis of Washington
Square Partners (collectively, "Acadia P/A-Travis"), entered into an
agreement for the purchase of the leasehold interest in The Gallery at
Fulton Street and adjacent parking garage in downtown Brooklyn for
approximately $120 million. The fee position in the property is owned
by the City of New York and the agreement includes an option to
purchase this fee position at a later date. Acadia P/A-Travis is
partnering with MacFarlane Partners ("MacFarlane"), a leading national
minority-owned real estate management firm, to co-develop the project.
Plans for the property include the demolition of the existing
structure and the development of a 1.6 million square foot mixed-use
complex. The proposed development calls for the construction of a
combination of retail, office and residential components, all of which
are currently allowed as of right. The new lease with the City of New
York is subject to approval at a hearing of the Mayor's Office of
Contracts.
Acadia P/A-Travis, a majority partner, together with MacFarlane,
will develop and operate the retail component, which is anticipated to
total 475,000 square feet of prime retail space. Acadia P/A-Travis
will also participate in the development of the office component with
MacFarlane, which is expected to include approximately 125,000 square
feet of Class A office space. MacFarlane plans to develop and operate
approximately 1,000 residential units with underground parking. Acadia
P/A-Travis does not plan on participating in the development of, or
having an ownership interest in, the residential component of the
project.
At the Company's Liberty Avenue project, an 11,000 square foot CVS
and a 98,000 square foot self-storage facility opened for business
during the first quarter of 2007. Leasing efforts are ongoing for the
remaining 16,000 square feet of retail space. Also during the first
quarter 2007, Acadia commenced construction activities at its Fordham
Plaza project located in The Bronx.
To date, the New York Urban/Infill program includes a total of
eight projects for which acquisition and development costs are
anticipated to total approximately $695.0 million. Construction is
near completion at Liberty Avenue as discussed above and is ongoing at
three additional locations.
RCP Venture -Albertson's Investment Returns 192% of Invested
Capital
Also as previously announced, the Company received, through its
investment in the RCP Venture, a cash distribution totaling
approximately $44.4 million from its ownership position in Albertson's
during the first quarter of 2007. Acadia's share of this distribution,
after allocation to minority interests, amounted to approximately $8.9
million. The distribution resulted from cash proceeds obtained by
Albertson's in connection with its disposition of certain operating
stores and a refinancing of the remaining assets held by the entity.
The distribution in excess of invested capital resulted in an
extraordinary gain of $23.7 million of which Acadia's share, net of
minority interests and income taxes, amounted to $2.9 million.
Outlook - Earnings Guidance for 2007
The Company currently reaffirms its previously announced 2007 FFO
and earnings per share forecast. On a fully diluted basis, FFO for
2007 is anticipated to range from $1.30 to $1.35 per share. 2007 EPS
is expected to range from $0.65 to $0.70.
Management Comments
Commenting on the results for the first quarter, Kenneth F.
Bernstein, President and CEO, stated, "We are extremely pleased with
our first quarter results. The key components of our business are
continuing to provide strong earnings growth and value creation. Our
core portfolio was further enhanced with the addition of two New York
City properties, replacing the five properties that we sold in the
fourth quarter of 2006. On the external front, we continue to utilize
our discretionary investment fund vehicles to enhance shareholder
returns. With the addition of the Albee Square, Brooklyn redevelopment
as our eighth New York Urban/Infill redevelopment, we are building an
exciting portfolio of unique retail/mixed-use properties that should
help fuel future significant growth for the next several years."
Investor Conference Call
Management will conduct a conference call on Friday, April 27,
2007 at 2:00 PM ET to review the Company's earnings and operating
results. The live conference call can be accessed by dialing
888-419-5570 (internationally 617-896-9871). The pass-code is
"Acadia". The call will also be webcast and can be accessed in a
listen-only mode at Acadia's web site at www.acadiarealty.com. If you
are unable to participate during the live webcast, the call will be
archived and available on Acadia's website. Alternatively, to access
the replay by phone, dial 888-286-8010 (internationally 617-801-6888).
The pass-code will be 58903997. The phone replay will be available
through Friday, May 4, 2007.
Acadia Realty Trust, headquartered in White Plains, NY, is a fully
integrated, self-managed and self-administered equity REIT focused
primarily on the ownership, acquisition, redevelopment and management
of retail properties, including neighborhood/community shopping
centers and mixed-use properties with retail components.
Certain matters in this press release may constitute
forward-looking statements within the meaning of federal securities
law and as such may involve known and unknown risk, uncertainties and
other factors which may cause the actual results, performances or
achievements of Acadia to be materially different from any future
results, performances or achievements expressed or implied by such
forward-looking statements. These forward-looking statements include
statements regarding our future earnings, estimates regarding the
timing of completion of, and costs relating to, our real estate
redevelopment projects. Factors that could cause our forward-looking
statements to differ from our future results include, but are not
limited to, those discussed under the headings "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" and "Risk Factors" in the Company's most recent annual
report on Form 10-K filed with the SEC on March 1, 2007 ("Form 10-K")
and other periodic reports filed with the SEC, including risks related
to: (i) the Company's reliance on revenues derived from major tenants;
(ii) the Company's limited control over joint venture investments;
(iii) the Company's partnership structure; (iv) real estate and the
geographic concentration of our properties; (v) market interest rates;
(vi) leverage; (vii) liability for environmental matters;(viii) the
Company's growth strategy; (ix) the Company's status as a REIT (x)
uninsured losses and (xi) the loss of key executives. Copies of the
Form 10-K and the other periodic reports Acadia files with the SEC are
available on the Company's website at www.acadiarealty.com. Any
forward-looking statements in this press release speak only as of the
date hereof. Acadia expressly disclaims any obligation or undertaking
to release publicly any updates or revisions to any forward-looking
statements contained herein to reflect any change in Acadia's
expectations with regard thereto or change in events, conditions or
circumstances on which any such statement is based.
For more information visit Acadia Realty Trust's Web site at
www.acadiarealty.com, which is not to be deemed a part of this press
release
ACADIA REALTY TRUST AND SUBSIDIARIES
Financial Highlights
For the Quarters ended March 31, 2007 and 2006
(dollars in thousands, except per share data)
For the quarters ended
March 31,
Revenues 2007 2006
----------- ---------
Minimum rents $ 18,854 $ 17,287
Percentage rents 138 185
Expense reimbursements 3,342 3,877
Other property income 264 209
Management fee income 1,075 1,201
Interest income 2,860 1,746
Other 165 1,141
----------- ---------
Total revenues 26,698 25,646
----------- ---------
Operating expenses
Property operating 4,906 3,867
Real estate taxes 2,198 2,700
General and administrative 5,448 5,307
Depreciation and amortization 6,537 6,230
----------- ---------
Total operating expenses 19,089 18,104
----------- ---------
Operating income 7,609 7,542
Equity in earnings of unconsolidated affiliates 130 2,971
Interest expense (6,147) (5,185)
Minority interest 2,288 (1,076)
----------- ---------
Income from continuing operations before income
taxes 3,880 4,252
Income taxes (44) (449)
----------- ---------
Income from continuing operations 3,836 3,803
----------- ---------
ACADIA REALTY TRUST AND SUBSIDIARIES
Financial Highlights
For the Quarters ended March 31, 2007 and 2006
(dollars in thousands, except per share data)
For the quarters ended
March 31,
2007 2006
----------- ---------
Discontinued operations:
Operating income from discontinued operations $ -- $ 561
Minority interest -- (11)
----------- ---------
Income from discontinued operations -- 550
----------- ---------
Net income before extraordinary item 3,836 4,353
----------- ---------
Extraordinary item:
Share of extraordinary gain from investment in
unconsolidated affiliate 23,690 --
Minority interest (18,959) --
Income taxes (1,848) --
----------- ---------
Income from extraordinary item 2,883 --
----------- ---------
Net income $ 6,719 $ 4,353
=========== =========
Net income per Common Share - Basic
Net income per Common Share - Continuing
operations $ .12 $ .12
Net income per Common Share - Discontinued
operations -- .01
Net income per Common Share - Extraordinary item .09 --
----------- ---------
Net income per Common Share $ .21 $ .13
=========== =========
Weighted average Common Shares 32,753 32,468
=========== =========
Net income per Common Share - Diluted (1)
Net income per Common Share - Continuing
operations $ .11 $ .12
Net income per Common Share - Discontinued
operations -- .01
Net income per Common Share - Extraordinary item .09 --
----------- ---------
Net income per Common Share $ .20 $ .13
=========== =========
Weighted average Common Shares 33,274 32,766
=========== =========
ACADIA REALTY TRUST AND SUBSIDIARIES
Financial Highlights
For the Quarters ended March 31, 2007 and 2006
(dollars in thousands, except per share data)
RECONCILIATION OF NET INCOME TO FUNDS FROM OPERATIONS (2)
For the quarters ended
March 31,
2007 2006
------------- --------
Net income $ 6,719 $ 4,353
Depreciation of real estate and amortization of
leasing costs
(net of minority interests' share)
Wholly owned and consolidated affiliates 4,797 5,034
Unconsolidated affiliates 475 412
Income attributable to minority interest in
Operating Partnership 144 94
Distributions - Preferred OP Units 8 62
Gain on sale (net of minority interests' share
and income taxes) -- (372)
Extraordinary item (net of minority interests'
share and income taxes) (2,883) --
------------- --------
Funds from operations 9,260 9,583
Add back: Extraordinary item, net (3) 2,883 --
------------- --------
Funds from operations, adjusted for
extraordinary item $ 12,143 $ 9,583
============= ========
Funds from operations per share - Diluted
Weighted average Common Shares and OP Units (4) 34,113 33,757
============= ========
Funds from operations, adjusted, per share $ .36 $ .28
============= ========
ACADIA REALTY TRUST AND SUBSIDIARIES
Financial Highlights
As of March 31, 2007 and December 31, 2006
(dollars in thousands, except per share data)
SELECTED BALANCE SHEET INFORMATION
March 31, December 31,
2007 2006
---------------- ------------
Cash and cash equivalents $111,643 $139,571
Rental property, at cost 738,572 677,238
Total assets 841,931 851,692
Mortgage notes payable 452,265 447,402
Total liabilities 505,703 496,836
Notes:
(1) Reflects the potential dilution that could occur if securities
or other contracts to issue Common Shares were exercised or converted
into Common Shares. The effect of the conversion of Common OP Units is
not reflected in the above table as they are exchangeable for Common
Shares on a one-for-one basis. The income allocable to such units is
allocated on this same basis and reflected as minority interest in the
consolidated financial statements. As such, the assumed conversion of
these units would have no net impact on the determination of diluted
earnings per share.
(2) The Company considers funds from operations ("FFO") as defined
by the National Association of Real Estate Investment Trusts
("NAREIT") and net operating income ("NOI") to be appropriate
supplemental disclosures of operating performance for an equity REIT
due to its widespread acceptance and use within the REIT and analyst
communities. FFO and NOI are presented to assist investors in
analyzing the performance of the Company. They are helpful as they
exclude various items included in net income that are not indicative
of the operating performance, such as gains (losses) from sales of
depreciated property and depreciation and amortization. In addition,
NOI excludes interest expense. The Company's method of calculating FFO
and NOI may be different from methods used by other REITs and,
accordingly, may not be comparable to such other REITs. FFO does not
represent cash generated from operations as defined by generally
accepted accounting principles ("GAAP") and is not indicative of cash
available to fund all cash needs, including distributions. It should
not be considered as an alternative to net income for the purpose of
evaluating the Company's performance or to cash flows as a measure of
liquidity. Consistent with the NAREIT definition, the Company defines
FFO as net income (computed in accordance with GAAP), excluding gains
(losses) from sales of depreciated property, plus depreciation and
amortization, and after adjustments for unconsolidated partnerships
and joint ventures. Reference is made to the Company's Quarterly
Supplemental Disclosure filed on Form 8-K with the SEC for a
reconciliation of the other non-GAAP financial measures used in this
press release (i.e. "net operating income" and "EBITDA") to the most
comparable GAAP financial measures.
(3) The extraordinary item represents the Company's share of
estimated extraordinary gain related to its investment in Albertson's.
The Albertson's entity has recorded an extraordinary gain in
connection with the allocation of purchase price to assets acquired.
The Company considers this as an investment in an operating business
as opposed to real estate. Accordingly, all gains and losses from this
investment are included in FFO.
(4) In addition to the weighted average Common Shares outstanding,
basic and diluted FFO also assumes full conversion of a weighted
average 660 and 654 OP Units into Common Shares for the quarters ended
March 31, 2007 and 2006, respectively. Diluted FFO also includes the
assumed conversion of Preferred OP Units into 179 and 337 Common
Shares for the quarters ended March 31, 2007 and 2006, respectively.
CONTACT: Acadia Realty Trust
Investor Relations
Jon Grisham, VP, 914-288-8142