AKR - Earnings call transcript Q3 2019

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Operator

Good day, ladies and gentlemen. Thank you for standing by and welcome to the Third Quarter Acadia Realty Trust Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation there will be a question-and-answer session. [Operator Instructions]. today’s being that advised be conference recorded. is Please Instructions]. [Operator

hand over Leasing to I Please would speaker conference to like Seligman, now the the today, ahead, ma’am. go Representative. Jarette

Jarette Seligman

thank earnings conference My the and Good a us and Jarette call. for our Leasing Acadia Trust XXXX Representative name for in afternoon Realty third you Seligman quarter I’m is joining Department. Leasing

of not statements please made Act and during such that those meaning are statements within Exchange be forward-looking the indicated deemed that historical Securities aware begin, be of we actual Before differ may and results by the the materially statements. call XXXX, forward-looking may from

the risks the and the to recent to other the call, Form of variety of those with speaks update duty them. including and this XXXX, company's forward-looking as only and SEC, Due date October statements of most company in disclosed XX, XX-K no a filings undertakes uncertainties, periodic

may from non-GAAP posted GAAP financial website management with press measures. non-GAAP release reconciliations refer on certain net call, directly most the see measures earnings financial Please these of and this income. for operations During Acadia's to funds financial its including comparable measures, operating

my Chief management to call turn to Bernstein, President begin Ken and is the remarks. it Executive Now, will pleasure who Officer, over today's

Ken Bernstein

Thanks, and well as as Jarette. had made We to Great quarter our job. existing portfolio new Good another important respect solid afternoon, everybody. both progress with investments.

of current some So, our I we're the for overview drivers and to of the business. an like key then growth of would with start seeing, trends discuss

Amy that more sheet made in John, the turn fund discuss the quarterly will metrics, will detail front. results on platform our our I'll we've over and and to balance progress discuss who Next, call and finally our

slowdown macroeconomic our economy. well has U.S. the plenty the of impact perspective, of and trade terms growth there the the attention our consumer, they're be Since our on U.S. next both occur, From last as in we economy But components and global proceed of to and around late might been for retail-focused we cycle. as it’s that quarterly in around in irrespective almost seem call, means, potential recession decelerating, concern of that business. And their while First, the that the footing. assumption think do the solid like on to market prudent we still the companies under are ours. and at when least could job think trends

exposure First foremost our focus on cash than and growing to to flow development. is rather new increasing

finally, eventually, and that the make today. Apocalypse And to down whether for today leverage then, to investment or is opportunities, to make so-called road. recent sure we dry where that but sure liquidity it Second, the new it powder from arising opportunities they're is arising want our access is not our retail we have

think growth factors about we here's these our with how for key mind, of drivers in business. So the

of the there's in key as growth. First, three terms core our drivers past, portfolio, we've discussed internal in of

in portfolio, is the First the our some finally of is portfolio. redevelopments few a growth is lease-up through successful third that's key second and completion vacancies, our embedded in the and key of and contractual

are enable deliver in discuss Now John internal detail, these we X% to nicely third the further of proceeding three our drivers as will forecasted. have thesis. to are quarter growth And long-term with growth that NOI results this us consistent

be and on and NAV our our our to urban consistent need must-have when to markets. in our to earnings have Then straightforward. street The focus is goals our the and add align. accretive pretty with long-term to to properties the properties ability are complementing our requirements internal core portfolio The to they as be the well as stars growth core growth, acquisitions key

said our to bottom. as have is current in on what growth that excess call of embedded our bumpy should acquisitions drive in we last these that describe words, X% we we long-term are what the at portfolio. growth other the a In ability rental is And existing

the market ignoring estate an haves fact many out, this retailers, disruptive in it's that Our not the in and the are significant. highly some increase that of the And rents has is have-nots retail still even but then, still acquisitions corresponding amongst separation playing the real instances in of in that has best-in-class and locations. been facing the caused vacancy challenges drop

during the that while where volatility. markets, saw were that we through XXXX rollercoaster to navigated has to not even we aggressively make a to we an period, this rents sure were we're our too the have we ride. has some dramatic, level, into unsustainable fall the at we that now period. correction, still some this in years from we this place, rents taking Thankfully, around few corrections best able XXXX seeing compelling meant that growing clear drive And are For growth to it opportunities the we immune were arise and been and did grew run-up been

institutional the to still are is Many the of And beginning of the that we year recovery time, street at valuations. sellers same beginning finally terms in demand and continuing. locations, retail investors a leasing are saw from tenant certain at whiplash ago occupancies, realistic sidelined transact for

necessity they costs, the or customer and for locations it recognizing are certain day, brand is clearer appreciating most acquisition execution. more and physical our Every the re-emerging becoming emerging of that of profitable key omnichannel then in importantly, whether reinforcement reduction retailers are

create on on sellers transact, acquisition focused that selective to bottomed streets So beginning with exciting with we’re combining be to a key opportunities improving, out, some to rents for motivated on. the in basis time the first factors having are years with these tenant demand several

Street contract. Soho Greene own of will we core acquisition million we is closing our buildings five are acquisitions, on. Last contiguous for of other quarter, move add to balance acquisitions a to Year-to-date, announced closed building Greene and continued to $XXX Street. property with who have reasons our on assets, announced economics another or upon on Theory to that we sellers In assets. and to ready contiguous Street our previously added the we pipeline in Soho, by are under This Greene variety occupied our of similar growth

And on added two contiguous to you already Avenue our and portfolio, we across eight in Armitage with Armitage tenants Alberts. And we may Chicago one with recall, buildings the properties from as Parker own buildings existing our street. one Avenue, Warby ranging to

the street occupied fact, the with years. significantly prior retailers vacancies two now is exciting of past growing in In being now and the unique by dominated over successfully most rents

What and capabilities streets to we with markets, powerful the right portfolio. these dots can our is aggregate we the we in connect then creates use mix buildings curate right tenants. teams' This can the in where the found enough where right locations, of elsewhere, here a and

supply of demand have grow. kick-in, when we found rents scarcity well, that Additionally, dry and the up, when vacancies and rules

Angeles. on represents Along or LA is key to mix Melrose of in contiguous The presence smaller format strategy Los that highly retailers luxury, corridor Place Melrose presence. even five has on Place executing but a create soft Rodeo in market of differentiated has storefronts LA many unique Lincoln that food, supply with demographics, goods, not in Park, Soho for we this storefronts Drive, their portfolio local key street, service, from shopping a enabled corridors. only Retail other complement strong the on a constrained agreed recently acquire This retailers to surrounding a

supply driven strong And performance, strong retailer demand, given time. then opportunities provide contractual and should growth constrained opportunities, creation growth, this the strong by some longer-term opportunities market retailer given value over the mark-to-market

continue for Shopping In differentiator of terms of is continue these us our growth Suburban further fund In grow our Centers. to potential V our fund acquisitions the other the but Fund primarily of and out favor growth the platform. portfolio a to quarter, be driver business, our we of complementing core third portfolio, stable, and through

this property properties short, invested. million thesis further attractive an Amy our we of mid-teens $XXX yields is discuss investments. and acquired with can But where will secured V recent driver XX% detail. transactions is we've acquiring stable the levered non-recourse financing, yield, in create in on Fund at enhanced Year-to-date, our further now of

unlevered mid-teens of approximately of at So have about current yield two-thirds blending years yield. far million to in plus with rate X% leveraged a few we a resulting $XXX centers a in, fixed shopping blended leverage X.X% acquired at

have choosing. we've in to the these to yields. rent we're shopping That's hold in acquisitions. centers carefully why screening over the why sales, able rent not pool by whether flow. current we for their stable be that a replacement had That's portfolio we of discount assets secondary to created right avoided the recognize be or right on markets, U.S. But will is many we provisions, investments co-tenancy retailed. locations, market, selective And costs, the Now primary cash to to for

fund private aggressive make think Now for public like with we use limited are assets can market portfolios, that sense investments growth appreciate not leverage, why the quite but a type these might compelling. ours we these in more of

rare fact, costs it it is achieve unlevered existing yield our In we now, return to can that is as and borrowing the from between goals see be wide spread such as hesitant cash likely still market flow for continue. investment Since re-enter contrary growth to be this without or to expect appreciation. to retail, material institutional seems the capital most capital we opportunity

continuing that construction given new are rental side at while returns cycle yet. not developments the we value-add that the than to growth, given there On the growing for spectrum, look costs risk still of are fund opportunities are adjusted investment we other late faster are undertaking just

we quarter, to enough our and core as supported begin for our see continue conclusion, carefully we to solid growth in fund add our utilize opportunistic third portfolio, opportunities the growth and assets drive to core, strong growth. in So then for same-store platform that in our by performance accretively

thank solid like over the another John. to team I'd and that, call With to turn the for quarter

John Gottfried

good afternoon and Ken Thanks, everyone.

our release, in As in strong and came quarter our expectations. and metrics third our outlined line key results with in

of a reaffirm the moment to to want spend few Before diving into messages. details key quarter, a the I

of remains NOI NOI comprises over of X% excess grow to core on of majority Our vast the next NAV years. $XX million several track underlying which over incremental our in the

redevelopments. X% this discussed, other of growth X% we've growth of handful a and X% profitable As consists from embedded

$XXX cost on the we recurring this as as third these of nearing well million redevelopment growth, we substantial the of Secondly, we as in amounts, our to spend, key of inclusive terms are to And and XX% of of fund as track $XX tenanting CapEx spend funded remain two the costs. over to redevelopments. have completion million quarter,

strength. of And balance terms lastly, sheet in

our as raising proactively have an sheet, to through solid million increasing accretive we acquisition $XXX further of pipeline, balance as strengthened our year, fund During approximately equity our already additional million capacity. $XXX the of liquidity revolver rock well

the By quarter same-store into diving and NOI. with starting

initial third line X.X% over points expectations the with our drive urban with at our quarter X.X% to quarter our our Year-to-date, which of XXX X.X% growing in X% same-store results, with portfolio our streets basis grew coming continuing range was portfolio. for is X% and contributing X.X% to suburban of at suburban Our portfolio, roughly X%. urban our around NOI in or same-store upper the and and street end

coming also excludes that the is consistent past in this prior It accretive practice, out NOI incremental pointing from two comp is projects. off year strong with our a growth it our mid-Xs worth redevelopment and the

our a to spend want I moment And on occupancy.

Our spreads, demonstrates that is our street down in-place and at slightly Both growth, consists currently fairly rental operating the portfolio, our of occupancy not year from contractual business. XX.X%. which our positive from NOI with if of growth lease at coming and which urban is prior largely flat, operations XX.X% efficiently of which are comps,

street we We and future so which gains, gives bumps us basis view above beyond XX%, contractual occupancy our points a primarily value of full rent positive drive lease existing few this our growth and hundred our will our within and urban expect portfolio, occupancy higher spreads. of

Now our the the quarterly during moving had credit Forever an XX impact of to XX loss, approximately points quarter. basis bankruptcy on

opened concept we discussed, Chicago, at have in XX,XXX of the have our that will recently portfolio, feet to a one prime in Lululemon XX core adjacent Lincoln discuss Amy we As square a consisting moment. location Forever in approximately Park, experiential

roughly we and profitable are we alternatives. the when rent impact various the redevelopment is of yet basis don't have interest and also on XX NOI in recoveries. and and space in annual While full-year Forever The the factoring strong tenant XXX recapture have certainty points exploring the timing, active

to we that on we have lease signed, want spend back spaces to few I new And that a activities get including over along moment the with those a expect leases of quarters. next handful

rents urban active of being and across as suburban, continuing As above markets we at our our with at to our are interest well new street see tenant highlighted, in all portfolio or as deals executed Ken expectations.

executed the we XX% third and we from new approximately square signed This $X.X million $X leases, prior leases. approximately and new up over During the non-conforming conforming over volume feet million is quarter, Year-to-date, XX,XXX quarter. have of leases. including of

very of retail may we terms accomplished for that all recall, nine-month activity XXXX, as So of notwithstanding what year rollercoaster exceeds was in the a volume. deal discussed, our which Ken in you leasing us strong

we million leases with For $X.X throughout Soho, including to new final the Avenue San in signed that our and we Of Connecticut. markets, at Madison redevelopment the are with in leases in our Francisco, at vacancy Spring street our AT&T Street and Westport, line this continuing at execute and expectations on quarter, X Center Brown, Orlebar Aurate Mankind City urban All at

reset very at On -- XXX market line Madison signed. rent their top final executed space feet. terms our of XX% in in our a spreads about of foot It $X,XXX of is the and XXXX square involved at few leases consists spreads, was It in the expectations approximately including lower. approximately reported of The initially our Avenue. with we one lease

the of was the XX%. the other approximately space the Excluding spread impact single conforming cash on lease,

what Now want to the are moving a tenant highlight XXXX read a in we to items. process, get we our rollover, few budgeting as on solid on midst I annual did have don't of

to consisting a of on with locations $XXX their we lease Street in at locations expect XX,XXX approximately back Avenue square few street in-place natural foot. upon feet and Chicago, rents the few a get demand from Walton $XXX next ranging Over expiration high Soho, quarters, over to Greenwich including prime

have XXXX after vast discussions active majority profitable don't spoken rents we that get a optimistic And these the of in at precise of while estimate we are are shortly should expiration. high prior spaces each the We of quality have we spaces. these or to for on downtime, lease

with Elmwood XXs. rents Pacesetter low over the average two with few that suburban feet, comprised the portfolio, and leases our Within our we Park grocers have in approximately of next These expire leases square quarters. XXX,XXX in properties reside

the of approximately have expiring we already We months XX% anticipated with leases spaces. downtime XX on as this approximately turn to signed of new space, XX

NOI from few So in while high integral our rents diversity variability in particularly ranging that metrics, locations plan market. we rents profitable to to $XXX quality creates over of thankfully, grow $X portfolio given of exists the tenant is demand at this short-term rollover inevitably our foot bring next part as over to and rollover our an portfolio years expiring X% of a consists high our the

by of in earnings, our came on moving a $X.XX Now portfolio. our strength of our quarter to the our third expectations at strong and core driven share, ahead

range In not the additional the are have terms of to to annual we guidance, for we transactional of $X.XX maintained year. as towards any mid-point but the tightened income guiding our $X.XX balance

in the raised have investment of pipeline. our to highlighted we during equity approximately our $XXX pre-fund release, year As million

or Based penny XXXX. upon expected closing dilution dates, so of a we short-term in anticipate

our to core addition also As our Amy strength in of are will discuss strength portfolio, seeing in the we business. fund

million of levered over XX% XXXX, yield. During generating in have closed V $XXX on investments a Fund are AFFO which we

and our higher from our routinely be NAV operating estate comes income, FFO FFO of business, real business, profitable creating dual and our value construction up approximately fees of majority leasing, percentage transactional promotes even for it across other whether fund vast our or XX% platform. transactions the our from our shows While development within of

fees V QX NOI fees in supplemented by investments. on from less XXXX, During the IV our leasing to expected anticipate high income. and towards with results, few stabilized XXXX evident quality assets, mind being assets Again XXXX, with would decline from early recurring dispositions given turnover, we provide expectations, transactional high transactional keeping a of stream Fund earn asset yield to and while approximately expect cent our along fund as Fund management are shift these $X.XX too I in in

to I related below adjustments. on non-cash, decline a and penny our recent straight in to quarter about the want moving to Before acquisitions, also of market highlight a rent lease line

million As the continuing quarter million throughout to we non-cash XXXX. in on these pro $X.X adjustments would a beginning rata expect look the that and in forward, $X I basis be to quarterly range fourth

anticipating for of remarks, penny Now, investments, key a we acquisitions that those the we’ve million in-place assets hit last points accretion terms of of Further, to we core FFO that we be in existing of core expected well contract quarter, but X%. NOI growth are in as are discussed Ken, $XXX every as do. acquired, that the under accretive to as are his our

in And balance lastly, as our segway excess a a share. our into have investment of approximately sheet, issuance an pre-funded $XX.XX pipeline price raising we million at equity $XXX of

next maturities expanding always no debt core another by under has the over price balance and $XXX our strides we sheet best-in-class million. EBITDA strengthen past few revolver to made the for X%, While to been several capacity have further with it our months, years,

sheet in we our have fund and a poised significant along on aggressively will that continue business in balance dry we to marketplace. with Our capitalize opportunities the pursue is powder to remaining the

we finish as our of remain internal in both So and and growth looking terms strong. and into start another strong outlook, quarter external beyond, XXXX

to call that, to And discuss fund our turn business. I with the Amy will over

Amy Racanello

Thanks, John.

million important that to on Today I'll acquisitions. of buy-fix-sell XXXX, with steady our through review Beginning million progress compares This the of to mandate. acquisitions, all XXXX. approximately completed $XXX for the third Fund $XXX we platforms, continue of acquisition quarter volume approximately and make funds we of

respective their quote $XX quarter, for properties and million V as of competitive a game That to properties among in line-up. third is, three in $XXX positioning million, the, acquired these of of properties tenant total “best three handful the view acquired markets to considered two Fund DLC. was their partnership strong town”. top with the of be a we due During properties in which We

Tree, Ross Buy, include for Ulta. properties these Dollar Less, To that point, Dress tenants and at Best

located is Kmart third anchored well a shopping center. The property

we've an pays $X continues accretive Kmart few our yield. over the identified which to foot the next years. a as property less strong In value-add square at square cap per rent of XX,XXX the interim opportunity the foot, acquisition rate, than Here leverage generate

few we V approximately mentioned, million have XX property X%. we've at past aggregated on behalf yield portfolio an Ken so done the years, over of successfully and Fund As of approximately $XXX an unleveraged

expansion for basis With are downside zero points are can how we anchored leverage, a we have quickly goals, six much goals, high-teens as the we XXX to equity years. realistically, currently rate, on equity. non-supermarket a more can only yield these this we of From types past cost about more basis perspective, years a over at clipping thinking invested approximately But centers our rate multiple begins few achieve multiple we've our equity cap seen of the that reverse. in

general, in XXX the multiple XXX achieve with given the In positive five the is period cap generally basis of compressed can three compression, of of north points. basis roughly on points exit years that instead cold equity same IRR we and impact

where As that continue North that discussed, point, Hickory, box to stability our been able unexpectedly cash for with we carefully previously “R” we on are in perform the report backfill our expectations. underwritten Babies Home few pleased in lost to at Goods these flow instance To is instances Carolina, consistent strategy. with selected in basis. And neutral have to that key Us a assets example, generally to tenant, we've yield a the

Park, We West In acquired North sold September, this to Fund now Turning XXX November dispositions. XXXX. Chicago. in property in Avenue IV Lincoln

flagship space. meditation new a shopping period, such supersized elements Lululemon, building as studios previously new re-tenanted and our this their beyond As workout the includes with discussed, we restaurant, during hold

that property is the recall another Acadia as from Lincoln Center. You known Park this block redevelopment down may

on sold XX% retail Formerly and Park re-anchoring design Lincoln and within achieving is neighboring are Lululemon After In taking returns XXXX, assets is January nearly anchored the to Border's reflects multiple up reach. completing returns. in equity. pressure Books, there X.X that Center invested we IRR realized that by now happens, comparison, reality on that post when downward the lease that our Armageddon longer for property

a achieved further Lincoln on very mind we've through that with in a on and a respect and XX investments IV is on IRR monetization invested already And XX% Miami quarter. of north III has That its along Beach. benefited keep period, in Road III, on our equity said; growth both basis, Funds investments profitable to which in sold last Fund from

right ahead, from that stabilizing Looking across notably focused the most New Cortland Westchester on a Final new we're Funds investments, York. County, Town in street Center directly shop IV

to next we sales, winding of early exact sales too our of still prior over lease us down have of predict years, the successful to Fund put especially in it's profitable Although look the timing forward a couple since III the position.

on our City Camp are and openings Kasper update We the the Street Store the at for property Prince will McNally process Alamo Drafthouse, retail also pleased movie fourth theaters. on Point, Street a the in Downtown, we Finally, end urban short were summer. our of to And expanding of Jackson welcome to follow Brooklyn. floor, Prince brief order. in successful on incredibly in

its compelling sales. City at and and continues soft strong in of traffic and strong it's growth from drive to Point the entertainment, anchor food, food Brooklyn of epicenter benefits critical which location Downtown mass uses, good

the Looking of new especially at construction completed is Street a as ahead, have once we Gold a Square runway, Willoughby opens. rents park property believe on that this of lot

In our had quarter platform. Fund productive we another conclusion, in

stabilized We value-add continue opportunistic fund investment and our within on strategy, our monetize our existing properties, to value portfolio. create execute and

to happy are answer questions. we Now, your

Operator

Instructions]. [Operator you. Thank

comes of Our Citi. Christy first from McElroy question

open. now is line Your

Christy McElroy

of everyone. growth. reconcile for expectations some afternoon, John, items to good I around wanted just you the same-store Hey, discussed NOI that

getting occupancy XX%. the ultimately to talked You about runway and

should that you growth, about? is sustainable term, or that X.X% of You have the space be those to X.X% something XXXX expect this How about Uniqlo rate context also leases executed, into we parts the should other that next talked embedded of closer thinking to you but about talked longer and we the you've recaptures commencing X% street year. same-store value also growth all lease seen kind in of high NOI moving these year

John Gottfried

guidance next certainty of several early in years that have is that but too as lot sort we think but moving will, moving a I guess I we think little same-store a more we and the definitive And bit through the to until there pieces, pieces. think at X%, I around I Christy, February, are point is reaffirm anything of highlighted always some Yes, it's give we you give this the which firm. X% intact, do,

Christy McElroy

Okay.

the when on impacted of rent that the context they the rent of sort there timing you timing versus to rent. about as took impact and when can commences how lease, talk the space, that -- that’s get impacted Just when starts how Uniqlo straight of P&L in the the around and line booked cash the

they rent? the So, when took they of paying sort space actually start versus over when

John Gottfried

Yes.

So, we're a day, for think straight I GAAP began second-generation start work, will as purposes, the we, this space, when over we lining we turn of significant which doing where not turnover quarter.

that there's few and adjustments a will showing they in it but until results. thousand to rent start commence late be related doesn’t straight-line So, be Uniqlo, same-store reflected hundred in going their open, our to QX dollars of that’s given that

Operator

Thank question from Schmidt of our Craig you. And next comes America. Bank of

line now Your is open.

Craig Schmidt

five Thank contiguous Place. you you. square foot total wondering Melrose could of on the give storefronts I if the me was

Ken Bernstein

want to pretty we as a we we're as this closed But happens. Craig, will talk a close soon As close, detail, about we more contract. lot have give getting as firm there there's soon to we that and and

Craig Schmidt

Francisco, maybe in New and let's San advantage or that? Okay. But, was LA of I market could on you limit wondering take And this well. as and to street how the you maybe contrast York want this might then urban if versus say

Ken Bernstein

be, what’s you And in different LA working, Union retailers versus you Melrose is Francisco stop do where do affordable, certainly it's stretch omnichannel combination Sure. And to each three is our want on San them what Where Greene also of quite markets, and these been drive with moments on ,but really for while it. and the a Place, our so, to how retailers profitable, you Instagrammable it telling that's epicenter have what’s us, about sales, Media here's in at retailers. But block Social all conversations Avenue for think than on market first unique Square, their your is what’s the businesses? and the have Street, of Armitage different different. certainly of

opportunity basis, beyond affordable powerful to it's especially whether The the shopping say our are because streets they than out really unique in So, on are. they're is but for them where brand to positive above they they then They relative are being can because in or unique, there what looking Soho, the as strolling at very that sales where way which Glossier experiences Row, are get telling and this LA, let's profitable rent importantly these they different, in their are. retailers providing are drive wall fact four to us But a alternatives, other a they a as EBITDA, is which both omnichannel.

consider we're own And now want you're a perspective, see to our way. we to positive with this and can stretch. others this, in from where we a where clusters it conversations going pretty that Armitage, about then because unique In we going retailers, want right dots can in to And continue to is alternatives. control expand, enough other been different such already want because spaces we've some clear connect through the

we been where for So, that has spaces, where we near proven us. continuous can move own tenants or a success around, enough

about there think retailers States United we in excited? And the when we sit ask so and where markets first down what with that's they the are And and different leads them, foremost. us

And retailers there's just we If like then and can the don't realistic because see realistic -- to be sellers. we need secondly, there, want we location, because nothing do. just we because sellers,

we value-add So, long-term we a there's where here opportunities. have think situation

business enjoyed with. a have doing seller have that We we

forward So, it. we're to looking

Operator

Thomas from comes our And question of Markets. next you. Capital KeyBanc Thank Todd

line Your now is open.

Todd Thomas

Hi, thanks.

question, in here. of first terms Just operations

but the that the and annual basis XXX you quarter to So impact that John, impact ForeverXX yet. expected was the points, you space XX-basis-point discussed, a there you is be roughly haven't said recaptured in

the XX that attributable and rate to of points recapture what and is the already for basis the accounting downtime the NOI So or in quarter run specifically rent was space?

John Gottfried

rents Yes, have would Todd prepetition or been September's wasn't paid. bankruptcy the rent so

why So quarter. on month so reserve that the the we is put a one recoveries month, that's of rent open full so and the third receivables, one

Todd Thomas

here. a and on Okay, got so it. -- And couple then, investments of questions

this. pace think curious accelerate investment the the investments of pipeline a should And see of should as in seen some more smaller Soho you're have and than further thinking wondering just if portfolios far we've -- just you've whether seeing first, about to still maybe be I'm assets seem as so on seen the expect particularly we market seller up XXXX then to collections we in in and this So some what's activity some come portfolios mostly based what LA larger pick or small like core. something now, in one-offs or sizable to some expectations and little year we about reset

Ken Bernstein

So, Todd. short is, it's great And know. the a answer don't I question

where and and so people not and more five, I'm and to we too would and XX active larger a pick dialogue because urban to specially ought see street not locations argue both when plus much I not, of who meaning retailers, with next years of over coming who that the our I bidding aspirational terms really high I lot say, now one, about growth to is was can time to our around work. a I what of There in market. last look both observational the pathway about the that there And about we are assets. competition is We who feel in more sidelines position terms portfolios of understand seem three, into quality talked read and what is good

not are, of sellers point, beginning them, more all but realistic. to I your think to are sellers become And

drive do core in nothing So, order that growth. to in order is more internal see in to reality we any strong it would have think to couldn't growth, ramp we cause don't that me the is up, strong but investment drive activity deals to there

So, the stock to that change pause. But if in early in us I the have-nots, we're shifts to caused that now, minds, are if shakeout like us . and still pause sellers there the the their in stages seeing and shifts so economy of haves pause, market we're the of caused right what we'll

that we wholesale going DTC, we're piece while brands grow this we retailers more know an seeing the we way you So business as do rethinking just more and from through amount need but more adamant selling natives try as of to but we're in, clarity direct and do the to reduce consumer, their important models, to are they're you're channel. We'll iconic comes to not the grow business. from what, saying, digitally become stores that acknowledge

retailers hear own those where say, we of that, to sense can for type you that talking the we we can us. when foot our to want makes on multiple be? where especially buildings, we do door when in And Well, like the acquisitions, extent get

already can do or and two on a active enough, You've side, we seen that we're company in that given one any well. street on enough small small have can nimble we're the we buildings

excited. that I them. but like As don't there how we we competition. I two, know, as makes us need there, do terms competition it's of the or of pretty sense think is about they one, much I than out make won't to look around, lack when to larger plenty but portfolio of But I to used and concentration we're this and positioned needs it transactions, be be started different in still There conversation,

Todd Thomas

Okay, cap that's strategy yielding Fund Are noted being borrowing rates you what spread on the starting with compress a see and And product. there investment to costs the in between you unlevered about high little bit attractive. that so V returns extremely helpful.

is it changing given based your you those competition at in like As or costs. underwriting the assets for all might the borrowing sounds decline anticipating on be comments, and

KenBernstein

Yes.

occur. It's But not supermarket there’s and of when flow. in up I There anchored redevelopment at non-supermarket disruption centers live still centers. to around down world priced remarks, they memory non-supermarket we primarily Could where everyone into prepared for go or may anchored we're that of hinted we so talk waiting talk be that his supermarket this amount spread could but understands waiting. may to space, lot lot to centers. them, is deal that So in shopping anchored shopping schizophrenia go the clear, are to earlier of in this a keep a don't decent some a for and far, John be seeing there like you that muscle not has you rates somewhat even so the is others? in, cap So we when people,

has What last so great. and over of saying to and much are I on sidelines. accomplished to me investors the based many seems that their how plus a used primarily appropriately the nearly think on companies not competition, been because I of mission It part side are seller public selling assets institutional be There’s them. it trade deleverage as on data of expect as the recent bunch couple stocks them have there and to type of the for most still, but do years change is

institutional try institutions or I'm those life now But think enough seeing I to jumping spreads What core time into we're compress. not in keep of for it seeing funds saying that we monetize? new funds in given are those them mind, a is there do win-win private capital in sync other is is the position. to And

still underwrote at, stay think, returns So cap rate. model underwrite lot, buy-fix-sell we higher. interest our and didn't low because bit, compress a rates achieve if have hinted I interest compress rates can monetizing. in Amy, we our X.X% We we a rates little no cap problem blended If

we great. if coming if shareholder just that. terms return see shift, have enough see is create or continue, around capital a we'll be we value low is two. environment, my growth, for into the to to But stable next that if institutional how base retail how and stable monetize know to the back year my in a but guess of we So nimble markets add. this We That to case continue

Operator

next Vince the comes Tibone Green Street question And from you. of Thank Advisors.

line is Your open. now

Vince Tibone

good Hey, morning.

the find curious, or there streets LA market to in Acadia. interesting? for further would is Los that likely scale gain so, be in looking Angeles you're just you concentrated and if or area I'm other there Melrose are submarkets So actively new it if a

Ken Bernstein

So barriers is anything pretend Vince, we it's years, it’s market it's scale, we that don't in markets of we'd even get of strong York a entry, to LA dispersion, where right to disperse one combination add watching the to it different. that see call can the casually of to months, level different and adequate spent demand, terms retailer new New like San very or Francisco markets and not

So them. if welcome opportunities see we would the we

could if of do see much of And given in. promenade location that now the be key where where off on right aggregate we'll is turning we we portfolio have probably run streets sellers until is just it's realistic are too it's You your active enough we question want difference. through a going too list say a then still that enough can to we the on And corner. to can through the the hold and headwind, it we no disperse answer and make a

may are other three there or retailers’ entry to to of in see and us each go dinner LA, may can see five we we If And the right to different discipline. can different larger a until are probably no again, excite them point, are patient but separate really add, think markets add there don't building we not be different are I out that hip. we way. for that we to that opportunity. wait we see enough other But areas But great there reason

focused now, would I Place. on for stay see So to Melrose expect us

next. shows Let's that and out see up then prove what we'll

Vince Tibone

I mean makes sense. that

seems possibly near-term your like unlikely – will that kind is Los now on markets it fair probably it will concentrated markets no, be to of other and mean, growth Angeles. seem new I the pretty core in growth external be then, say So that point, in more

Ken Bernstein

acquisition we're ratio XX time on and those team currently a of in. leasing investment that on spends X, active We to markets our

So we market quarter, year. need to a not feel a add like go a a month, do new or we even

place to to going I a their know where down maybe retailers their market must-have channel gateway that team we're New other ones are markets retailers brand than or Boston, because way build the looking spending have to should in one in omnichannel and the XX% our time City. for or are in But where what effort Chicago, unique Francisco, concentration York We We offline must-have locations. be. would the expect be debate of best. And express are are online The locations we've their consumer on San to We're key to now great that's in other beginning concentration saying frankly, DC. finally two compliments LA. could the existing next strategies. those

Operator

Thank Dijkum you. Floris And next Point. comes our from Compass van question from

line now open. Your is

Floris van Dijkum

the unlevered obviously of the bit composition expectations, level needing income guys. the Thanks returns a for or Quick presumably question the X%, same Great. it's you’ve returns, talked growth. for on your is And if about and funds return core not little both higher.

portfolio? Melrose your about the does and your to overall on think assets growth acquisition Place, you York composition income and As between your compare New how

Ken Bernstein

Sure.

rent can and be then having yield anticipate there assets the may to growth and world yield me more building-by-building versus well that be have eight let money. you and even or think very little be million what way but of And about you spend Melrose buy at an unlevered we vague Meaning Soho, there there's core lower you So our assets a right. unlevered talk a to-date and cetera. we $XXX about Floris growth. And about eight the are buy you here to as that limited is et turn, the absolutely is acquisitions tenants

goal making it So eight an to to don't and you sure fours. we grow that grows eights started and at an is eight buy our

And a been what core is through growth then X%. annual we've combination leases. or contractual we're X% clear pretty to on of longer-dated for tend looking assets, contractually about These the plus be minus compounded leases

good they're then is Sometimes higher, sometimes looking pretty upticks for are a they're too, certain we X% the but number. way. probably And along

realities are Although about the right we now. of sober very the marketplace

not if you there to believe trees use sky but So are to grow going the do X%. we

rebound. case, feel close will And X% to feel expect decline that after X%, we seen the and be to pieces then call some be again precipitously, tell it and them But X% growth a and on even we quarter in. X% there acquisitions moving that pretty to but a Then a we expect good can't this good pretty have the tell on markets few of rents we $XXX some what I with year have cases moving in a we said before would X% you darn going remains becomes we is, John closed. pretty last which get yield million we pieces, still you few

in rent a was the XXXX which XX% for. an XX% is which periodically will rebound increasing we to occurring be great, not the XX%, or XXXX which whether was Now, at are period, unhealthy what or wishing

do we're with about be for footprint, not a, rebound, ownership there be core in But yield a the think long-term I of continue levering as what years. day But more longer-dated not there's upside cap we such asymmetrical us interesting, that get will the might two their in the more less. We're sitting at eight getting we returns one. one not it current some form think reward for there if us two worried to to where shrink exit also more robust investment retailers it's reward

way So saying eight you a hopefully get three zero or returns. plus of long to or plus that's I four that, guess similar five

Floris van Dijkum

enough. Fair

And it. about we so should -- think

it? So, that maybe five-ish the then to over time initial is return and growing about way think right

Ken Bernstein

cap that. low yes. it, acknowledge acknowledge the right don't those find well and low elsewhere. these to trade huge for we that don't can portfolios, have assets the below answer going that meet a very be the assets We rate in, we following chase when bunch But there's the right caveat recognize that it. but trades rates We surprised is, where you With needs, are interest we markets, of that how global that given see and

Floris van Dijkum

time. to to let Fair potentially see you're to looking return we will that that be that if lower X% get presumably have so assume me we so return yields, enough. those growth If your just, X.X% over plus the at, means so - the higher

Ken Bernstein

Fifth there's is. on very let with should mark-to-market not in acquirer. effective When a how transactions thing just you those been low yields I case think wasn’t. been the of see Well assume have But we're in yield the transactions clear few incredible the that printed, first is me terms Avenue, you be I low

to this. you that acquirers X.X. can't the at to great can't, markets. there's know terms not backstop core, we a and is why with a liquid markets. sellers focus wealth of And In the well, like chasing to not our say, We and the sovereign We're fund buy liquidity in compete of as point won't. capital them that It's there

stand chase where to chance and growth. a to Our want where retailers of focus be seeing we exceptional rental fighting is

discussed. in And just yes, because lower, at you long lower that if it's If we is should in if you're own them yields, going that us going expect the run, to discussed, I papers acquire to higher right, than that was the we're to than can referring the in be rates but at growth transactions lower able we just rental made I to compete realize I upon primarily have yields cap with. some yield can't

Floris van Dijkum

have and when question do stabilization, having be retail follow-up and the One expected Points City on you that floor are all asset stabilized be getting the enough. Fair of you closer leased expect to or ground to that happen?

Ken Bernstein

the in with as we're we The Drafthouse, the what construction as the across been stabilized the it challenge so Alamo the closer still us still the the not today haven't retail topped basement? your zone. that's the part tallest Joe's, but Market, do answer solve year a to do yes, to least great we're that but off, and would work are and do retailers at use upper Downtown Trader case, is still what DeKalb are going the they in realities incredible we tower to That's what some getting do is but with between do control in frankly to fully our is Target, part, beyond historically news have mixed And solved you more is levels? away. nowhere in crushing that And they're is adjacent near has you always like do. Brooklyn So we That a I be we're is hard be. urban able been close and for street, short to

another will tower it tower long feels for be once that a probably away then So down tallest and it in construction like complete, that still block will That more time. the the is street there's then tower Brooklyn -- road. the

when of gets predict So all want this I to don't done.

then of are as the sales going and Trader area clearer as in aggressively this take. terms but to is to up. need of at becoming look sober we doing doing, long leased to in to is that we cetera pretty transit, we be just how we floor exciting terms what et Alamos that to us Joe's about get need a ground it's around mass as But need we can, We epicenter of

Our on this. would We I work want here the money be, don't hard for focus long too table. to too leave

market, So at full these rents telling I year that predicting is be all think unlikely. next or you will

up I a think we're it. multi-year to it's task, but

Operator

of question JPMorgan. next our And you. Hong from Zhang Thank comes

now Your is open. line

Hong Zhang

Yes, hi guys.

benefiting quarter, will it I like from loss credit expected reserve. last still about a to next that year the you're fair you than state? case? lower higher, loss that sounds Just Is be is guess current the talked how

John Gottfried

Hi Hong.

the for the So the by terms XX were yes, that I the with say we we were exception in of of this say little Forever higher XX basis quarter, quarter. we would a I'd we that were points took where

we but points. In terms the start about of thinking always somewhere next year, I think a it’s between bit XXX, basis early, year I to think XXX

a get on definitely as call. I'll we next better have that view up So to our

Operator

this call to gentlemen, for Thank turn remarks. Bernstein you. I like our Ken the session. does to back and now And ladies over question-and-answer any would closing conclude

Ken Bernstein

quarter. you to next I to look everyone. forward speaking Thanks,

Operator

Ladies gentlemen, conference concludes you and call. this Thank for participating. today's

You disconnect. may now

Acadia Realty Trust (AKR) 24 Oct 192019 Q3 Earnings call transcript