AKR - Earnings call transcript Q4 2020

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Operator

Ladies and gentlemen, thank you for standing by and welcome to the Q4 2020 Acadia Realty Trust Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions] I would now like to hand the conference over to your speaker today Alex Burger. ahead. go Please

Alex Burger

our thank quarter and My joining for summer Analyst us is at previously Good in Acadia Acadia you Realty fourth the in an I'm XXXX Burger, XXXX. call. Department Trust the and Alex intern afternoon of and for Acquisitions earnings name conference

materially Act historical, including differ actual aware of by forward-looking deemed most forward-looking statements the meaning in please may other Before made the those from be we such be begin, and call may during Securities of company's of SEC. and and statements indicated variety a periodic risks due Exchange the the filings recent statements the results those to Form XX-K that that and with XXXX are not uncertainties within disclosed

the only update duty no date this speak company and call, to XXXX statements as February the of XX, Forward-looking undertakes them. of

Please measures. funds release measures and of During net measures financial certain directly non-GAAP for management website and this financial these over Executive income. Ken Acadia's President the refer Instructions] Now, to reconciliations to non-GAAP call, from most the comparable to Bernstein, GAAP my operations management remarks. call on its see begin who'll with today's Officer including Chief earnings will operating posted turn it's press financial pleasure [Operator

Ken Bernstein

Great. Thank you, Alex. Good job. Good afternoon everybody.

we like into Before trends the year a last spend to I'd and minutes what details XXXX. few into we some we're quarter, XXXX the the saw delve last seeing and on of of looking

the end headwinds, health and tunnel. economic at is through there clearly ongoing an While the light working crisis we're still of ensuing

of retailers, with comforting our leasing fourth importantly, activity. current the and respect to encouraging then in discussions in see rate with our quarter, collection terms stability shoots our leasing green at very operations, new more to both activity, it's our Looking

essential as throughout and driven discuss, terms have John more retailer of our portfolio, this by our suburban XX%. recently, remains I And Initially was continue the emerge. monthly a restabilize our component the quarters, outcomes collections existing collections has performance while that collections above wide beginning of and to In will trends retail few another the but to of worthwhile are potential more to portfolio are range begun there for and well. as few components stabilized street suspect focus will on very

recently and more the date half of is we economy second One past just portion trends leasing tenants the of the current the urban of the the pandemic year. most not in this seeing but and accelerating suburban of for activity. are in that quarter saw and our positioning fourth in the thankfully, the also Retailers in notable components. our the portfolio, themselves are in looking up reopening showing to and And we're street

and is had of our on necessity a pipeline that hit initially portion $X we pipeline, to our rebuilt initially faster forward million. and this of in over the of call that approximately our being and expected suburban urban. To-date, is of of the pipeline, our balance mentioned leases we're the of past weighted the flow for result in at XX% grown deal rebound pipeline activity stage. about at was then number million now another terms is now and to in which because current weighting meaning relevant activity least we our million In NOI the has pipeline a leasing COVID. already over it This rebalancing And our to this is in improve $X executed our intent $X and XX% looking fairly portfolio our weighted is have now proportionate letter million, this as represents $X than we has of half to pipeline, has last Leasing street to while portfolio we continued at and short-term about month. estimated the

of about differentiation the our represents that us. and given portion Now XX% for our street is portfolio key a of core area of portfolio

I for minutes markets. dense they Greenwich couple have reopen Rents seeing these rebound street In spending activity actively portfolio in we a few gateway the to less After in and and in markets Connecticut. lease in scary and more our the retailers is both a But for on quarters, very trends were business, we're located pre-COVID in half the markets. street saw the worth of of street encouraging leases movers early touring are approaching even going think it's quiet for Westport, The markets. of are those in there. component, encouraging there few weeks, we the more levels. the generally that dense quicker of the retail to last finalized example, in terms were recent

leaders leases here we're several finalizing the up Chicago stepping retailers variety in Manhattan, a channels omnichannel several markets themselves to on luxury an further Coast. Gold world the And from distribution. of digitally are in a brands up-and-coming We all for in seeing Soho, economy leases stores in these including using as and preparing to these differentiate shifting these including native focus of in post-COVID in retailers

winter every the our harsh based long-term will many locations. the of clearer and of the real retail the on markets that must-have are it as signing longer-term in are realities number short-term day retailers portfolio retailers around well that touring our retailers we're remain oversimplified this key making Our as looking narrative them And estate. past facing leases

But necessity recognize portion suburban significant our hold portion that are Target well rents provided us the that of performance have our if trends It's compelling which of far rents looks street so of also of essential and perspective, And from long-term goals that some telling storm. But ballast driver their they these And and sales weather our these is will clearer T.J. the important is the leases are. Now recovery. from starting compelling, ratio longer-term pre-COVID going with XXX-year to their portfolio will our especially, consistent a our certainly avoid built still peaks but these like growth retailers anticipated but and are if of portfolio with to urban it is very for the locations weighted a compared both few will and that to that and for us their are pre-COVID value-based they be be this reasons. becoming we rents metrics. portfolio our tenants to of rates truly Maxx, key peaks, mission-critical XXXX a and to vary space-by-space growth come longer-term and our early. valleys. off street-by-street We are a

potential of and high-quality of level. our is off uniquely re-leasing here First decades-low occupancy of locations working all, we are

cost to basis perspective, XXX the Second, the rate contractual an in as portfolio. higher-rent than portions substantially the our in XXX net And street less is these growth stronger percentage rent than portfolio higher effective the re-tenanting in components points rent, basis rental of in growth markets from of of AFFO since a our the our other lower-rent is of points finally will portfolio. be

in facing move industry, formats out ignoring, reality that nor the workforce our the Now it are this obsolescence functional playing in not some some the is longer-term are digital that general a an is might to that commerce, is on These basis. our over-retailed pondering accelerated are work. real US of of notwithstanding the forced trends that recovery ignoring challenges. this. that's being where portfolio Challenges and how live, industry are our adapt we they challenges, they But to accelerated is well-positioned seeing to might for signs and these is

hindsight in rebound this will of some And look obvious.

that segment example, different For this is a important than is the to it's general much shopping the and of portfolio consumer recessions. that in spot at prior stores mind our the that that consumer recession keep consumer in out of in especially, climbing in

significant to impact their work house and population is shift of But Now shift could work, that has portion this that has economy seen to values heart-wrenching. able the rise. is to not that paycheck that for portion crisis that paycheck their the or that remote to living portfolios of of the been stock remote worse,

condition this is than has short-term because has as not much or of rebuild financial not on lockdown. they the debt almost fear equity of down, albeit realities markets markets industry crisis move trends and are stronger planning the markets as the abating, rate on irrespective belt-tightening just is of aftershocks used our location drama pent-up level For those global as slowly From were The when their property rates beginning expecting by collection been climbing evaluate disposable quality are that are the are much working that to demand as spending has while past and for financial But credit seeing that instance, both are the essentials, of consumers, of with through longer-term retailers collection specific location out real quality spring. short-term and paused. perspective, the our trend we spending consumer, pajamas, spring in historically retail a And still as retailers by segment unfound the many traditional industry around quality, the of well. still and savings And necessities, the estate just and but selectively. on the consumer capital date, lockdown, of crisis. the last to And accordingly. quality. credit the to have our Last metrics been is affluent us trumped this trumped income shifts

Now beginning And darkest to of out. take have it's days made term, But time. win sense. this the location, trend during while to resolve, might this quality crisis to going the tends longer is

And like? when restabilize are cycle. as level what And for the get tall clarity this a are investors cost growth to institutional then in finally rebound predict. many the what are then will rents like than look and happens clarity even be, it us of rates assets faster does clarity. will not this point Additionally, retail that who order And stabilize. due retail holdings. sounds at I to their what to as Now to will investors usually longer-term most the mall the overweight overweight tenant Clarity providing performance and looking always

with a our cost our at stock our of anticipate in capital the and short of terms discount acquisitions elevated, NAV being core In our to don't investment term. we activity in

trading recently position at Home Depot in and net properties opportunities buying New In assets monetizing peak be significant capitalize a we pricing. arise robust we a freestanding as them. to are with still are is on we'll where as Jersey, hopeful fact, market retail But lease that in we'll did be the opportunistically

up to our and And it is still be will many powder value. after disfavor a of discretionary and that fund of and previously our Given retail markets have discuss, in public dabbled the such we there competition will and will expertise fortunately for be folks while it picking wait dry gone, in less be who demand in is rebound, deal where flow we plenty Amy year. will quiet we finally as have are

once in to the we to access tenants pleased management become growth capital hard again when dominated and while will see respond and us. they proven when to of ours must-have up. compelling. types multiple it are capital strong stability locations will do be in for record markets execute And portfolio to opportunities stepping a unique with of by deploying also ours, to like So of kind, positioned like conclude, prospects And on then track it's the front predict with teams will well a

times commitment, And turn our I'd at the that year. only our past for it well. spinning and forward focus around and not with get to survive, I And earth thank helped plant John. axis. assure team helped treacherous know stopped this thrive through with over seeds hard I'll period that, I their like the the your for us the and as that felt ability didn't. us you, it call to their work like efforts its over to that, going your but So

John Gottfried

off good with update afternoon, and providing and cash start our our an by Ken will then sheet. our of a discussion our with on Thanks, collections by balance closing results, everyone. along followed fourth quarter guidance, I XXXX

in collection of results barely we In the with course was amounts. the the with collections. a our collections immediate and But due XX% April rent, current year, hindsight, with also saw the of the over rate. improvement, achieving starting XXXX staggering of impact quickly initial not but past Now only pandemic

fourth given our XXXX ended over fact, are outlined consistent we we our now suburban that billings of the throughout And look our pandemic, quarter release, as our when relatively of street XX% over exists as in XX% remain percentages three actually collecting the the consistently as in at course experienced XX% in the we our comparable collection collecting throughout In across and rents. quarters excess our locations, urban we the And we portfolio. of credit and pandemic, back of look over during up and alone. third the we

our decline collection we in discussed I compared prior As to they're net did balance our last from fourth as Not sheet our to the XXXX. see than quarter, the lower actually only even reflect quarter, efforts. continues fact they tenant receivables quarter of were

tenant our efforts remain of deferral approximately December approach our was focus for we on our credit on track books largely And as tenants, XX. million terms XXXX. repayment in In deferral on have we $X agreements, at full to

Moving on to quarterly earnings.

as quarter. adjusted, special or through FFO should FFO We give level in navigate a current Our share fourth remain prior next as anticipate around quarters, take pandemic. $X.XX any the few quarterly to few a other that the transactional directions for for was our pennies we for items, the items the

have of XXXX we of items. before $X.XX our release, to FFO our provided a in highlighted $X.XX with we range guidance special As

variability continue our in the to items our for expectations attempted as we of not least first significant quarterly ongoing continue out we've in we we'll throughout our point within and of at half this results our accordingly. to XXXX. impact update will the results any to expect pandemic, Now, guidance. done We've the predict But

is Additionally, mid-$XX want what bit our past leases no our expect we're on of at include quarters, as assumptions, although rata no thinking it. with any pro the core NOI expirations couple the this assumption fund a And we of million XXXX. trend tenant the color and for I collection or should with we online. low of Consistent experienced didn't meaningful half provide along based how in specific NOI quarterly to first to we XX% maintaining about more that range to rate, least coming a

and the that NOI the terms the in rents portfolio, we've percentage impact. itself as particularly within well of our not In wide in is given the of overall to of generally past, range said occupancy, exist change correlated

before street our And physical occupancy a bit expectation in within highlighting worth excess X%. given occupancy leased anticipate continue as team further leasing expand portfolio, lease urban and building that executing Our in begins spread, between in our spread and natural QX to climbing year. our to the physical half is velocity it in primarily the is It's of expirations our is locations QX, and throughout and percentage that leases, second of which suburban we drops current to the year. the pipeline this to particularly the our

increase latter move beginning quarterly with Now rate to that additional from as our we into anticipate coming the online. reduced million will And half of XXXX, run the of a losses, combination NOI to the million. credit come we approximately from is $X along by $X NOI efforts, leasing this

the leases, new Now half $X online second pipeline leases. executed we and involves mentioned, in of this in that involves rent about XX% of we becoming NOI on touch the throughout up will what this points And million are of be those XXXX $X XXXX. will and that multi-year expect optimistic terms Of a commencement of on various the Ken is the meaningful show believe shortly, million approximately $XXX,XXX will trajectory. of or at growth that remaining as I cautiously we portion start coming

the should months. will next expect remaining to calls are sold. gains value practice we of we Albertsons to be of Albertsons our Rather things. business want the course will mentioned and point that the transactional our the And terms sold XX Consistent out our shares. our realized in I we to past fund few from other changes In I on as exclude XX include side shares assumptions with the any unsold within only a of as continue over shares prior

which own a price to one arrangements. are rata reminder the share gains As approximately lockup pro we of million a upon And basis based subject on shares are this current $XX million shares approximately certain to as sold. equates the

discuss revert to temporary $X our anticipate primarily pandemic-driven Additionally This in timing delays reduction result acquisition activities of the we million also million guided if levels $X.XX approximately to to V to fees of deploy. more $X we a fund XXXX. point an fees. us on should leasing provides Fund towards back basis. want and further Amy in have this with returns I these a V normalized annual remaining to will we $X.XX to and the have and in additional is in XX% And that invest we date with out consistent of FFO incremental Fund an

trajectory, by the does early case see XXXX blocks NOI grow building starting to pre-COVID of core our to we base not multiyear growth model only XXXX the levels forming us are terms have and to late in returning we next also growth that sources. above key drivers to optimistic that beyond this few increasingly that. the are and come that ongoing to of years. return from pre-COVID the becoming beyond within NOI are shows primary And expected up core The two Now

should in reduction estimate losses a annual First we credit result and roughly of $X NOI. million in that

the half revert tenants We the back continue other side about and rents. that of our nonpaying get contractual estimate of to pandemic to to

of see terms in some at we in some beginning improvement as XXXX second expect timing my guidance 'XX. to I stabilization in half point In of with the mentioned

street more and and in lease-up Secondly urban portfolio. lease-up specifically our

available. overall XX% and street of XX% urban with at Our occupancy at the in decade-low occupancy portion our is a of some best core locations

majority the made months street And progress an of as timing out mentioned and of million is of locations. from urban which terms of In chunk the spaces the leasing months having while $X momentum building optimistic in premature in not yet our team XX we rent the this space into a has dates lease-up building see we're precise is Ken have commencement the that pencil increased the it to discussions past coming pipeline, marketplace. those several in that made with XX upon it's strong pipeline over and for leased to good that next our based are we

of of work front us. have certainly So we in a hard lot

are to with leasing for it encouraged see NOI the meaningful presents We growth. have multiyear profitable and and continue activity seen the and we opportunities

highlight want Now moving on with I a to dividend. our to just on items the sheet. balance few update along an

various at to to ample are coupled no under XX% liquidity continue continuing and material rate collection cash below liquidity needs. on available flow. breakeven between capital near-term cash cash with And a our XX% hand our We with retain a core maintain we facilities

reinstate In dividend terms expect of a the dividend to initially we $X.XX share. at as in our release highlighted our we

payout see quarters strong still initial our based green upon will payout the of the discuss determined the compliance. at level we to are we we a of our required earnings call amounts for over optimism as the the are summary And conservatively liquidity be to portfolio. outlook midst in several we over within to will we the XXXX to of and Our feel to while the positive the ourselves execute generate and fund impact Amy minimum we next the next I couple look lease-up shoots. our And was increased as what starting rate able continue pandemic the expect we of for up opportunities to now currently to while be turn dividend will meaningful this maintain set forward. are growth on should with starting business. years pandemic In

Amy Racanello

John. Thanks,

new remarks focus these we While fund industry selectively focus from we we I primarily flow. our comes my launched existing fund discuss in vehicle on most of disruption fund will and V were shopping XXXX, In suburban our cycle. late centers retailing the investments. we Fund cash out-of-favor knew usually is calls were acquiring on funds this all When chose response return to this for current where facing our already in I which on today

This cap leverage and to Our yield. an it rate an our any at was a coupon. return be an case thesis then was X% anticipate buy in thesis clip in at make growth a at required mid-teens did going two-third X% in attractive prudent. NOI, not proved at rate, material nor to interest sub-X% We

original our with have plan. past V largely While events unexpected been for the with consistent the properties were certainly our of performing consistent expectations Fund the year portfolio,

year XX% For roughly on rents. invested example, achieved last yield property at level, we including the a leverage equity deferred

we returns growth continued achieve we ahead, XXXX XXXX in complete of to activities. expect continued and mid-teens NOI, investment as equity similar reflecting but various also Looking leasing

roughly above have at and since the Second, or rebounded XX% and collections April May level. are now

a of our $X.X annual our of the like which a ABR overall pipeline, maintain built strong us already executed. rent V of has team evidence metrics acquisition further and and has approach leasing at couple to selectivity ABR aggregating our These our which million or NOI. Fund level. enabled has pipeline leases to also our allocation. been Post-COVID XX examples leasing careful leases million Third, approximately outbreak of XX to share of $X.X capital have I'd provide base property

pre-leased XX,XXX last a foot Harbor together Tools box Bargain Outlet with that in Frederick recapturing Management. we since and our Kmart at of Square February, County First, Maryland XX% successfully Freight Ollie's partners square at have Lidl DLC to

square are feet. the remaining leases times XX,XXX X lease also for for the rent four rent. more new Kmart's We than blended a The is negotiating

monetized gross in Next our $XX The proceeds. million located portfolio, center core at shopping at of back parcels sale at Utah. Riverdale consistent X the of Family Center the parcels with we generated

net these market, achieve the into two million a in of $X.X actual the XXX roughly allocated to lease about Given profit underwriting and our of sales between our on translates cap This cap to we rates. were able point strength $X the alone. exit rate spread basis million

on Looking which available have million buying power ahead leveraged of approximately gives equity activity, basis. approximately to us invest million a new $XXX we discretionary transactional $XXX to of

types deals year. these of our to we're strategy types among to are finance seeing several an is more seeing opportunities of this with V's increasing good appetite news hope We The these existing Fund still properties. consistent close high-yield and vendors of

the from lifting we where all of investments other the of to coming. areas focused slower spectrum, past. we end reasons, for we're clearly they buying variety distressed are restructurings opportunities have make the sure of being debt successfully that the acquisition On These to appropriately also for on taking. but been to emerge, risk value-add we'll Most rewarded are ranging have the heavier we a opportunistic in more deep projects are and importantly, risks distressed invested

remain need balance and to support continue to our the investors, Given the the opportunities the V longstanding portfolio retailers. to the confident proactively we for the a our we'll success existing on of disposition put smaller less that of Fund centers have work. debt fund we of same time larger traditional time, we levels mine or be of shopping or with reliant a it debt fund large At transactions essential share of

front debt successful end, XX the a of subsequent approximately average on capital allocation platform powder our platform funds a across $XXX loans we and million quarter Finally, to and conclusion dry duration well to weighted months. at during with on remains continue strategy to execute successfully fund extended positioned ample In our of it.

will Now, the we your open call questions. to

Operator

Markets. Thank KeyBanc Capital first with Todd comes [Operator Our from Instructions] Thomas question you.

with proceed may your question. You

Todd Thomas

afternoon. good Thanks, Hi.

$X.XX that's above of end for Albertsons. What's that of in comparable questions on range is about or First, of just the few that's It annualized next think $X.XX John, the stripping couple you clean sounds range for range? guidance. after XXXX what's to the number low embedded the the right in end out the sort level would low to the the like Albertsons. guidance a of a in down quarter quarters, which the guidance without get assumed the

John Gottfried

the say the had an and -- credit on we that release, -- press observation what if I losses. would you there Todd, Yes. is within

this our So in $X.XX I look to say we're think up too third at would we was quarter $X.XX and between fourth -- at QX really at quarterly I run come the right when which with combined low rate, look and period. we're

just probably next look be would of that really be. indicative first I second at So that's I half is think year half should -- the what of

a is the pay simply tenants our So upon of accounting of take like give we're basis portion when pennies noise us. creates remarks what cash about particularly based said I really talking few that or with

Todd Thomas

help sort that again XXXX back recurring quarter a a level last you per after talked guidance, the AFFO which to of FFO you then And $X recurring the near-term. about basis on in just is $X.XX share AFFO out getting of Can of in Okay. reconcile stripping in with the time quarterly run line target? Albertsons to to on range per get a view share the rate? $X.XX recurring $X to And recurring your of what's back sort AFFO

John Gottfried

Yes.

think this business that, Todd fourth piece trend and we're just on our CapEx quarter a is would higher in So that I what there a fourth the of our quarter say I seasonal spend. to is tends

look the growth I in So in with of when average that course range back on I we're $X.XX out next particularly over the have think year, still the end. we

few don't off I which So a short would we think in we're rate. and far driver this cents CapEx spend, as not the I where use run were the of of AFFO that really is quarter being a

Todd Thomas

just maybe Ken. last or question then Amy Okay. And for

willing of you value -- the some of sort or you of that are activity Can stack the end It investments of set a you're here to how you you terms just there's that like heavy maybe might think for a time to up book are about starting And opportunities Fund the much couple and could you of over end you're seems line up. what lot that's that opportunities given V in kind lifting across of of undertake in Fund you XXXX? board surface? broad of the what across sort quarters the terms picking and seeing talked you're sort the sounds characterize of V, seeing. of capital In that targeting like opportunity of risk next the

Ken Bernstein

anything stab first Amy, by you take So add means. want at. I'll -- and If to all a

to be a for expectations we we we seeing that's because selling improvements actionable. have the lenders think Fund I control sellers Fed feel a to seen tenant mezzanine the V come or remaining to and of And risks, longer. be are guess accommodative of see deal just we returns to the the pieces beginning past to time, going realistic continuing expect the sure now see our majority looks taking. V are this froze demand starting flow. holders is very their lifting deserve for what letter while deals. to prior. and are we're the for to little There's to return the have bit from in the world need for to that banks add Todd, be with on look, very from half in and we're us is our because longer uncertainties and previous nothing We're good heavy were willing that taking that's you taken just the cash to reasons, And but Then that in so intent going make capital of flow under heavy you've effort enough current the the where similar uncertainty probably this because in about And wrong the then to rewarded that deals guess just to has the ultimately think have we And that undertake get cost, assets urged out are. I should feeling encouraging. a we're our Fund of lifting two see if need opportunities. We marketplace of there's I equity, about the stakeholders one, things the things, that and of flow rational cash become junior given I much requires lot a stakeholders like a and We been that who But other not that half things that's a stack. what very

buying existing as there's deals I those reducing spot or can't for we market's otherwise. perfect do flow V do if going of we vacancy this. there take private be holdings we'll heavy Fund in to either if type institutions enough well, we'll get than and who can those think And in are so we're and doing for And lift of to primarily that; just the liquidity continue advantage for of because need rewarded in the their cash retail better to

Todd Thomas

you. Thank right. All Okay.

Ken Bernstein

Sure.

Operator

Thank you.

comes Our Linda next with from question Tsai Jefferies.

with proceed question. may You your

Linda Tsai

Anything portfolio? in the leases tenants or here? tenants Can to your talk your about existing? Are interesting portfolio highlight retail Hi. the of you new signing to street some

Ken Bernstein

a first not. thing there moments and It's But the are clearly level, away showing summer "Wow, we the there encouraging signs control tenants customer where And a wait host to the that luxury can going they're the otherwise. come and themselves At luxury of they peers segment up. like the of both to and where from for international where answer is them were where in I back the my Linda, in forever" open -- can differentiate they not a order combination. in of they can they're their is stores, important tourism is domestic all, for get their go think was format front to

presence, it a seeing signs the piece you're for them the to especially online expect strong lockdown to the started in you're still the retailers get Those critical who fair with again to the are they're both we elsewhere seeing is them that. of summer through Soho, we it and that over country But of off that in line, get top is who way our encouraging going during drive this. not. were but So of line. to presence they luxury the seeing Then wondering make and what stores bottom signs it digitally share through used or who's native,

are then you just from a to them see going have customer. are continuing we're stores If that department to tenants in tenants ranging changing the the Allbirds the those that being same Parker, the and of just bunch days are of variety way through to recognizing throughout connect our a the portfolio And with storm assets they with in sell able weathered of I'd that to days that have rethought of are on whole of about Avenue to days work They're pushing type Warby our those ending. those expect product their that same between think continue. how brands with stuff this Armitage

their with use stores unique to connect And so as a customers they well. want these as way to

all specific is other, up that showing adding select each of So be to to around cluster in looking up with areas. tenants

that, to that. way complementary to nothing, retailers uses but Then expect top over I forward The are we of is retailed. they service back amount and that that the should on over a that can several footage up and to do other years, demand this expand don't. think going But expect see of there. United out seeing be me think in let So to look is select are of period retailers States show clear, don't up I you after show the means square next these that retailer getting see everything corridors, essentials the to when about we that

Linda Tsai

meaningfully that still you Thanks a pre-COVID? ratios occupancy retailers for from understanding think out number year do now, are change a And for of nonessential sales looking cost that. then recovering from

Ken Bernstein

think keep on, errors. Yes. eyes are be And that they can this because to to to retailers something can afford some and open lead going this listening that critical that to I simply our to we is saying will all space have

really streets monitor percent we So increase several where rents year a and XX%, instance for for to XX-plus need saw certain we on years are. rent-to-sales

also based see on pre-COVID that as strong the for as sales are So anticipate ratios very to up four-wall on going effect, rents Retailers might well. open of as what where the many to is look benefits well things acknowledging history basis, acknowledging sales based it. halo them their rent-to-sales that not just are initiatives a executing, we healthy. on online so-called have we the but as there they're tenants They a the

to are And XX% that they're we're to it be going for I is period about going going deals, XX%, our can be of rent-to-sales a with end paying to going I everything to retailer's see crystal time. be be that. to clear, a lower meaning of So do other good lower, rather and we some on to think XX%, the that, be up, growth market than ratios side portfolio the And how of there'll think really afford we those at stacks that.

Linda Tsai

Thanks a lot.

Ken Bernstein

Sure

Operator

you. Thank

Citi. Our from next McConnell comes with Katy question

question. may your proceed You with

Katy McConnell

great. Okay, Thanks.

a XQ expected. than lighter So we fallout had bit occupancy little was

lighter around does magnitude of Or that renegotiated? now your feel holidays? to more the as recent in potential fallout it curious hear I'm thoughts delayed So just XQ. that view have after And overall the been more you whether

John Gottfried

mentioned numbers we But Katy, what terms maybe other that, expirations Ken, and I'll that, have first on could and the would pieces. of of what then the of the I is quarter backfill sort my handful into in natural a suburban call I second you with in quarter. of in say just start some is the coming up

But on know very I as mind, it have drop. need just So, will we rents. in to different you the that, basis think expectation a is keep you percentage

So that context. paying declines, you the in somewhat of itself need what is look back go percentage the half terms of XX% ultimately go to not are -- think I at is But in of those physical that I'll actual away. us to

goes XXXX, we'll second quarter, shakes where that away quarter whether, that out. -- see So first we're

I have an So up it. NOI other Other perspective, not it's reserving because really that. than don't from a showing view than we're

that's But when Katy know I handful I what suburban of So a said movements. of what like unknown is that really I goes the I through. think and expect

Katy McConnell

leasing or a for already context are you all pipeline, you deals expecting Okay. that on the around be provide going spreads And $X understanding you're then leasing little different, what wide deals but that executed? range some to can have million within the a bit

Ken Bernstein

John, why that? you don't take

John Gottfried

Yes.

Katy, we tell the of reasons, think a it's street, cut a up the lot And I don't whether will to what So, our I space in up vary. is show on these otherwise. for host going or times that of you spreads

extent There's do pretty But will what and up there we they we well I'll the as I actually show provide are but afterwards get we as to on provide the that as cost our as results. color these up would say to -- would consistent before what in in profitability was as we've showing the get past. the us they're So to color they not I what spreads. executed, solid, pretty not seen they're in them with any -- is,

Katy McConnell

great. Okay. will be That Thanks.

Operator

Thank you.

Our with America. of Craig Schmidt Bank next question comes from

You may proceed with your question.

Craig Schmidt

and announced? looking when good the you are are has now noticeable see around, more in now was change new a the might thank you, urban were your to starting terms investigate, it recently? Or those the afternoon. that just, did that of vaccines And P&L? street leases wondering hit ones once Great, retailers I been

Ken Bernstein

where much it to have that I vaccines certainly, combination Difficulty] But about resonating. And terms start with in while different back world on think -- getting we be. a change [Technical step office, can that say, thinking a events. in okay, more So executing those of are Doing was the retailers would thinking on who they're news in the to we tenor with And based less, about a what been also but that a their through for retailers encouraging more and XXXX getting their might And carefully. look channels. focus and were to stores thinking how themes retailers first of about you now clearly then around Craig, and I picking various saw want the of tell they like. are the around XXXX a

say going unprecedented. are they're that December/January to to felt felt side. opportunities get get of going through -- October/November better to it cities So the I'd in they're The the terms of good, really while recognizing significantly retailers available in in this, just terms other spaces

of going see some wait to they're you of in see, on show starting to at much there and So variety out and but miss about by well you're longer opportunities are read moving to the as up. you're now, a if choices it least papers but they them those starting

Craig Schmidt

long mean, the would now it you P&L? the And it think when just at people those might how are -- add who looking would I rents

Ken Bernstein

to this of terms next you gave as hits versus year guidance some in the half. second what John,

John Gottfried

No Yes. Craig.

the about portion going the was $XXX,XXX. of are executed that and street $X pipeline the said the thing it's small -- this up up So with is was showing into whatever good I I particularly that call XXXX. that think said million script a we've that's that's to a going think my shows the not -- -- and that start And of this year think lot the in And balance there's relatively to be in goes these spaces. I before I

take could and property is that from XX to than et opening suburban different much build months So a cetera. split execution to the out time

happen could conversations. and it quickly starting to see So we're increased

up very, we've I about guiding signed I'm this that year the street $X very million think that So quickly. $XXX,XXX up. ramp on shows could But of

Craig Schmidt

believe robust quick might do the Amy. be August more real And till Or extended? pipeline, you that? I that -- to Great. for you given Do can V you Fund has accomplish just then get think date XXXX invested.

Amy Racanello

with what that's that the said in remarks we've relationships our longstanding Craig, limited these earlier had partners my in I are fund.

we work. there's have beyond if balance to that the it's we're over the done whether sure we confident or several that, we time we'll to the months need -- time next put that So just make

Craig Schmidt

Great. you. Thank

Operator

you. Thank

Our Mueller with JPMorgan. next Michael comes question from

You may with your question. proceed

Unidentified Analyst

more is this few a looks now, tenants How tents for Hung [ph] or hi, that it like basis the kind of expect we about All cash quarter. Mike. should I you in other the think just guess, Yes, basis on a that? we year-end a this nonpaying are can on put cleanup? cash on coming quarters? Is a

John Gottfried

from line the just we from? straight-line to referring write-off the the question you're assume did where I is Hung. coming straight Hi, that is where incremental, the

Unidentified Analyst

Yes.

John Gottfried

this suspected as point. incremental think -- just you So just it's the it's at I cleanup

Unidentified Analyst

cash were for both these tenants And fourth what basis and -- in in would know your on a you January? quarter the for it. cash collections Got

John Gottfried

think the XX% if the the where I I of going paying head I Off back would top think mean, to -- my look that keep aren't I I one not. us. I it's at

basis. it's those paying paying X% of are as if the they probably cash handy to are Hung, those on we're are estimate really XX% I actually certainly I that don't, And what bucket that that percentage -- a And percentage So us. to above would that us. have another

Unidentified Analyst

Yes. you. Thank No, worries.

Operator

Thank you.

Rojas-Schmidt Street. with Green comes next Paulina Our question from

with question. You may your proceed

Ken Bernstein

on be might mute. You

Paulina Rojas-Schmidt

me? Can you hear

Ken Bernstein

Now we can.

John Gottfried

Yes.

Paulina Rojas-Schmidt

Okay.

that. Sorry for

peers. closer -- reason for -- Is other lower distribution strip your Any assets? Can lower Is is question more tenant tenants number tenants haven't me appreciated. X% the about this your of a reopened of reopenings. to you have the would you tenants? geographic it appears help center gap? your it that your portfolio be So about the is XX% my much to while it in yet, essential of understand And behind color exposure this

Ken Bernstein

to -- it know geographic. well want what, you is and you first John, foremost

significant a dominated were in and to not are And so we more of they were urban shutdown or instance, major forced many markets for City reopen. a what In New of shut to experienced portion York restaurants, of down more slower tenants own, those the remote them significant because our but properties only.

I they the side, don't other yes, But empty that there's add. some you So do half to this have as the reserved more The any currently us. are Those to make expected. to of stores the to closed half and color the want think of those glass intend are country. of glass that know for it think our parts bounce to John, is for additional ready get is side, back side yet a if quick than in that be be reopen side to I full other that's to John and I that other mentioned, can't getting fully reopen. we're will

John Gottfried

I that's think, Yes, right.

geography it areas it's think, to in the and density open. there's the for make to where to store the just those I really point getting profitable enough

Ken. to much I no have don't add think So -- that's I

Paulina Rojas-Schmidt

assets? question, of retail have market for in how changed rents York, much street any And then you sense do the second XXXX your in New Soho type of say, let's

Ken Bernstein

were to in peaks they a realistic quoting lower, had excuse be realistic would lease me, the throughout -- continue rents rents XXXX gauge period is will there I big prior XXXX Too mind to transitional a hard different, we et each XXXX cautious rents tell, be our will growth asking or climbing of those see we but to distinction. market a What are rental showing to pretty were that bullish when When as cetera, and whether and people are so XXXX of off Whereas are that get to think fallen. extent you XXXX, tell don't and been XXXX, levels. held to fair the that resets. But same substantially But part to be willing at et here's it's thing. is very open. transacting rents execute the peaked in in rents lenders cetera. I tenants would about contractual about But that landlords it be fairly hard their XXXX if as because the already retailers the going is store think rents problem. landlord and keep there significant who pre-COVID, attitude XXXX, value had XXXX those

nice a headlines think bunch I board, you see of longer-term, very should you of expect you're but short-term, going turbulence, across I some lot to momentum. a should think So the expect

Paulina Rojas-Schmidt

you. Thank

Operator

Ki you. [Operator Truist. Our Bin Instructions] next question with comes from Kim Thank

with You your may question. proceed

Ki Bin Kim

good and everyone. afternoon Thanks,

kind talking retail the footing. talked was in of to street more I'm to it what it the be green guys positive shoots good that more retailers turn what to attitude and takes that you much So to curious for hear solid are But you -- signings looking about about on for leasing. urban a

Ken Bernstein

be going read let's this cetera. plus headlines And clear, the weather, et everything that is in to Yes. winter stick because we cold of about

few rational shifting. do in a top way, their strong they next a to can be And because channels for well is, gear areas this them changing. a are And stepping quarters and bode where and takes reopening. as in they growth think the up elsewhere our pretty that going. the of they're going are retailers to, some and with their same are one not luxury So, thing and I clustering the it retailers consistently I of and strong not think parts you up-and-coming starting picking longer strong up retailers I Soho luxury the seeing where other forward in just our to And you'll a Watch watch I is will and country happens will is And watch what Soho, what remember line present can again few look for bottom-line, are the to spots -- Soho. and portfolio. where portfolio where see to the it's there spots well. start seasons brand that of be because if for over specific the migration the key simply as Then differentiated month a think said,

And achieve it's And online be exception do all needs." to say of and I critical. the the And are then the going for those of of all where. "You select know to that's some my great, brands matter a can sales recognize rule. my what, few Most may but stores

So, markets sure the of locations. this to about. our win, we're in of a I account think which portfolio have will lose. it we will bunch Much But which make that focus whole of, talking into be markets take trends is kind clearer, our those must-have

Ki Bin Kim

leases deals than different Okay. talked the is what of things like, And or the optionality the that duration you've to, some that? like nature so that used in pipeline, things about are we're the

Ken Bernstein

So long-dated here's tough of other and deals been than climbing out the different of recessions. evolution. GFC, Out the been retailers cutting very And it's deals. were

that's first "We'll over year-long retailers you you bearish figure to last Avenue were period for different And that they're retailers when so leases. XXXX talk time." few we crisis, shorter-term generally two or were months, some now this we of time. lease committed even of were You've so period with be say they And the We a buying their long-dated that the more signing for landlord than long here stepping or long-term XXXX leases. I announcing the worked that and a said that And locations, of a for Madison there." outlook commitments. very "No. side. seen seeing, the And want to Initially certainly in on retailers up seeing, the But get theme still up when out long are so were stepping tenant we luxury it we're on especially about know saying half

to as levels, retailers' I a And and of rents what pre-COVID to growth commitments, in very there like. As encouraged, their retailers am term. longer are would they look give term longer back interested starting out to reaching make rental by grow are willingness and take then is other see certainly

have But open? do some short-term, are get reset." form of saying, again, as of starting the we couple some And we seeing next we'll longer-dated are start well. mainly you'll out to years? of them then, "How figure leases. So, I retailers sign And How do

Ki Bin Kim

for Thanks makes sense. That that.

Operator

for showing questions, this you. at Thank I I'm turn further call now further like remarks. the over not back Bernstein any time. any to, Ken would And to

Ken Bernstein

all Thanks person, soon. see before in get then, everybody. safe. stay to talk in you more we but Until we'll months Probably a person. I few together wait cannot And

Operator

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

You may now disconnect.

Acadia Realty Trust (AKR) 12 Feb 212020 Q4 Earnings call transcript