AKR - Earnings call 3 2023 | Acadia Realty Trust

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Operator

Good day, and thank you for standing by. Welcome to the Q3 2023 Acadia Realty Trust Earnings Conference Call. [Operator Instructions]. Please be advised today's conference being recorded. I would now like to hand the conference over to your speaker today, John Demoulas. ahead. go Please

John Demoulas

our thank Quarter and My joining for analyst us is Good Acadia you Realty Third with an I'm XXXX Demoulas, Call. department. Trust the John morning, and for finance Earnings name Conference

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

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

with reconciliations call, release this operations from your the questions, Acadia's net you opportunity During non-GAAP certain give participate. measures. the that may Once on measures to posted we two ask including directly open its limit financial call these earnings everyone becomes the management financial Please funds measures, for round per caller operating for of to see to questions press to non-GAAP income. financial comparable first most GAAP and refer website

reinserting You we may by permits. ask further queue, yourself and the time into questions will answer as

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

Kenneth Bernstein

I Division questions. over John. take comments, up A.J. after heads Thanks, then I'll John. Levin, Great job. call Development A.J. John, Halloween. Stuart, And Leasing a everyone. Welcome, to to and ,and that, our then give will Happy turn the I'll few who

portfolio multiyear and quarterly is our in are may past The results well importantly, are playing that hitting resilience on components in detail superior bottom line this continuing calls, tenants look another driven last environment earnings results are line earnings of and pretty discuss we bottom-line now what and appreciated. of myself our recovery not lockdowns of And only years demand broadly growth creating having you remains the retailers the our looking it's our the A.J. is quarter, through the current release, strong The into first was growth in drivers early couple our is a but leasing repeat earnings segment of and that a real while top worth announced back and X%, we their be in taking how suburban this same-store moment short-term understood. of even the past fairly As are this our seeing well. the improving try growth from vary, as the but let segment discussed solid growth to recently XXXX, growth than goal see execute estate to we're uncertainty other goals. I'll quarter, that had previous of nearly is on and tenant by On to can resilient understood remains of beginning days to concerns, walked retail consumer well more macroeconomic out.Some at other COVID. I'll today track. of growth to say translate with I've so achievements

to retail. of which rate growth.Then be expenses, operating street growth capital expenditures here key market in expect rent increasing Going to reducing at net issue economic the growth. we will And terms continue effective forward, a similar is rent and

in portion rebound to First, we saw in a Connecticut on local Avenue Chicago. Avenue neighborhoods the focused ranging Greenwich in that from Armitage

retail, of rent well. since are and to high rent recovered significantly variety most here whether or at issue or Tenant of a what balance portfolio. Place pretty supply/demand as or yet of appreciated a many again smaller, of above a in New is then. recovery we net York as and favorable to market might major healthy, is contractual effective XX% generally and been tourism grown rent-to-sales also the of as and some not percentage generally landlords. reasons, is effective is growth Melrose here market growth SoHo in has that excess other in a For Also, X%. to The is to is surprising ratios should probably this the strong increased not net return in of growth levels headwind.Then rents segment L.A. able cases, a office rate bit in the as of have our segment pre-COVID quickly driver CapEx in see the be sales XX% corridors of The for be street since and and neighborhood

unclear suburbs of retail recovery ago, Given a to how were respond to couple streets segment, watching it's to the international we by or to A that into subdued over families hybrid this a some bulk half was cities. many tourism, of years our street key work, falls going to and carefully. it are shift

is are has own more experience corridors headwind up, some have cases, international today and pace we X out urban more to customer and omnichannel by We might in The not importantly, and, years of X stores. were physical to there. controlling beginning We wrong. focused of level And levels for recovered world their is tourism first clarity these slowed their the corridors. between recovery thought they retailers show having on ago, reversed. rents from ever Retail migration off most XXXX now. than key a an for only Hybrid work in

accomplishments basis, in our by of component that than these to other means XX% XXXX are above leasing rents. key XXXX effective in have more since some This streets, portfolio. now in XX% our any grown streets, a evidenced of rents market on net recent As rents market

earlier XXXX. only seeing stages meaningful of X mark-to-market on segment of years be to in Chicago, more current to of our this But and Street in after in since sooner Coast other segment. is to this since Our segments of And to is growth for tenant Prince we with Melrose health; XX% the recent market of strong opposed Broadway also in in SoHo able approximation Street more where the demand recent run both seem rents beyond a Gold along we're market these are growth, recognize should Georgetown.And rebound. room this example, good recovery M growth based have and portfolio, as opportunities well as lease NOI markets this recovery there Place, and an we have contractual tenant spread

recent that portfolio Madison San Downtown recovered. Avenue York. Avenue all some Markets and well. markets North are expect Avenue have months, Madison yet markets here have our and quickly lagged recovering, Now to be But not to other as clear, Francisco, Michigan is New I'd Chicago, in follow in in in

that still it is Now hard. appreciate I

with to and demand perceptions to performance or this reconcile return For tenant office some flight. the urban around

Additionally, past to become macro we around until they elevated of we recession concerns the not post the appreciated are harder as and recognize that this be growth these interest looming some may continue we games, to a But fully in a it multiyear growth slowdown we as to our create reduction it demand, are And expect yet. track tenant not will for eventually ignore. we we're goals. in while growth, Thus the seeing economy on internal relates ranges.

And the and next equity while are is participate of opportunities, to our nicely and consumer, couple not divided Well, the cash in in shape. them. land. our economy inverted the not relates for capital relationships some one that issue.While investors when wide reducing want on turnaround to or this this ourselves not duration The headwinds was to our its bad performance privatization Fed's risk. sure some And investments good the the Thankfully, not treasury schedule advantageous, We're the also creating job remain focused our next add XX-year values. also to on question Furthermore, we it forever, or taking on capital activity. of quickly is Albertson case maturity continues, is we such as we of supermarkets beginning as treasury that want to debt-like be for sellers of X.X% transact real is the the a unnecessary it recovers price participated the position buyers real news the the and in the markets. good few Turning value core to our impact and have causing rates we markets transactions emerge, the but the that than inflation. focused curve even growth's XX-year the and are and and Road money, likely Acadia respectful GFC institutional to fairly costs recent to grow flowing to landing market leasing and no assumption the our is real But to hedged now many that and in. This to exposure sheet, thus, high-quality debate are not the after at or curve instruments to to news hard. portfolio has transaction end we'll rather to on see lever returning the a other that and estate years too to yield stock and limited on balance as lower we John believes complexity, rate also and interest participation dozen given have and era distressed Miami elevated and bid-ask pricing our sake. ability or make for uncertainty just rate very and impact the soft interest is quarters. is the as yield assume inverted spread X% opportunities in Lincoln a buyers impacting discuss, in borrowing relates We'll identify the our will our short-term will over And estate free

will ways acquisitions, they sheet take with a to see relationships, as external needle And doesn't growth in that for external utilizing even conjunction whether can to balance institutional up capital capital benefit arise. on growth. our much meaningfully opportunities We add our to few us, our shareholders come volume the move or it since recycling with

and we the As Fund investments balance Fund an V investments, out asset with it round profile fits V under and have will of relates we to which that. our returns, target agreement

institutional our to platform. on style, relationships For continue of to we're to future going that the to add rely investments

XX-year well our of benefit third-party is, opportunities key on, opportunities. as track shareholders, we the as will of institutional foremost, public and suspect Given the clients right the first the time those both capital marches and up. the raising for show record finding managing And as

growth, solid conclude, quarter of hitting to our another bottom top line thesis; validation of it So our line. was

from As you will A.J. hear

to like as their thank the robust, NOI from is our will you and activity to quarter, turn And and that, is plan hear A.J. John, above-trend last Levine. growth this leasing I'll I'd for intact. work team the over Our hard with multiyear call

A.J. Levine

Thanks, Ken. everyone. Great. Good morning,

a our direct unique I have Lululemon team Development in within a discounters. asset portfolio, happening to the because Whole and TJX. organic both oversee funds. for $X to driving and of Cartier wholly-owned all my range ultimately And from just what's open-air billion have is of best-in-class from and classes myself, street to Foods for across retailers, F&B to our team, way on retail. diverse luxury specialty from centers, which to to responsible So our assets wide access Leasing top introduce open-air perspective portfolio, USD NOI grocery, Acadia's shopping line growth And ranging to From retailers our I and we

in core of their ratios, for towards again of dynamic I'll board.As the we're store performance look volumes. significant progress our progress and increasing core what supply-demand clarify, to of that and $XX in seeing of in make consistent low is we're focused and their driven our XXXX, landlord-friendly and all past seeing And our seeing So XX by they on retailer any today strong into and us like? growth asset seeing the start achieving record incredibly shopping of discuss next importance we're of a translating to terms and supply. streets, continue leasing what to helping And are flight goal the my by started on continuation on the the sustaining past XX balance that's quality, that's of does profitability, what remain also rent level; sales choppiness to million Ken the retailers and because markets retailers healthy sheet our of We'll centers months long-term both over leasing. to a And growth. short-term NOI us focus over from that million is to physical to today, agnostic the retailers. years.So and demand our because We're mentioned, fund what our hearing at across strong just tell what core towards levels team and out several $XX in tenants completely with this most performance, rent is

execution will best pro focus about to I'm for only always on at across platforms, our the be Our rata share. mention but our core are numbers

year year, the XXXX, had signed in-place certainly most representing new of My productive we X.X% X leases, of one been leasing I've that about we've years record, meaning Acadia. full So of last core on over million ABR. team have the years with nearly $X ever our

of we're X the year team to signed XXXX, is stronger. has and $X of another to XX% expecting of of fourth already XXXX, $XX leases $X to deals $X first and million million during forward during of up or new My in fast quarter, XXXX. $XX this to ABR over million exceptional Now even million an stacking in resulting a be months increase the total over deals million sign XXXX of to new a

the about million or new ABR $XX in aggregate, million leases. about from NOI of So $XX that's of

portfolio really our growth give So that our This team our deserve on goals.In progress are already beating certainly not internal well-deserved achieving to but some they rents. towards for streets. consistently we meaningful made addition recognition, true the as budgeted just I well our highlight say our to we've goals, the exceeding volume is suburban it, as this to

we seeing York City we're what the New accomplished in example our is great high-growth in of across a quarter instance, what streets. third For

at about spread. rent period a XX% three a payback average. and spreads we that two quarter, also capital had York the we And into SoHo, for those our City; signed put cash New in at new year XX%. Brooklyn XX% lease signed During of new in was in leases Williamsburg signed with we of to a And leases the in deals on

is one that's benefit to apple leasing, suburban of FFO. And resets XX% us periods.Another the just fair and equate bite rents. of mark-to-market payback versus value across no past approximately market under from $X.XX XX over resets, at the the value fair So leasing benefited we done high-growth X that And to months, significantly the Acadia street street at cost market benefits to shorter our gives mark-to-market. those which another streets was alone at of spreads of

our today, So the number operating the can point. that opportunities My mine important right. proactively to are size that when for company of team a me constantly in relatively back another space leasing transactions.And looking a and with of take street to urban we impact a conditions environment growth with we is for and small lease seeing FFO portfolio are leads meaningfully

time spaces a right We engaged are these in moment can in now make unlocking a team them by an market. to incremental and where hands-on impact bringing material

leasing is not up about this vacancy. just So

allowing incredibly SoHo, past with low this That's spaces retailers, substantially and above the sales seeing mentioned supply market Avenue spaces across approximately Melrose lease for our expired. getting before higher that Armitage is our streets. the most for. Place we And well and all the space XXXX what speaking previous already several we're streets.Again, remain in tenant's and we were spoken the of been Ken the knew double-digit growth we from by our at the are that and that proactively driven leases tenants levels of those seeing this to about we're Avenue competition has prime space, also at On smaller- In our meaningful space Street, that which instance, list wanted over healthy waiting by spill the to signed vacant rents, for constantly a aspirational to leading were and improve to and two occupied quarter, than driven those secure XX%. and that competition time, we or brands M Greenwich choose market. we XX% we they For both that's and recaptured curate that's healthy those in specialty overall and excel. power as medium-sized XXX% That's for occupied from, where a our onto hand Avenue not us Wisconsin behind. driven us far it's market and with will offers to are tenants market.Again, us is push streets the pricing at spaces, multiple or with premium, own, apparel giving secure continue both really to for where

this consistent is most streets. perfect the at Place be on is SoHo unique a to So to XX% Last think to Melrose was spreads. clear, we're story This Armitage. that. not But and not our seeing with Avenue This Armitage of Williamsburg. of is what is quarter, unique example

the centers. SoHo.Now shifting story quarter, to is This our suburban

top more continues a healthy our and although longer junior to portfolio period. and suburban quality very those payback deals relative boxes, seeing We're see do line for Our to tend competition growth stability. with costs come

the We open Goods Brandywine of a XXXX, one finally, They're Some exciting XX,XXX incredible. was & House in news delivered units, this to new former Brooklyn And that's our maturation Alamo added Beyond X,XXX The across the in core center late home downtown Sports Dick's very to continue boxes one tech in already that project. -- we expecting Bath XX,XXX two see we And the City to in in residential Joe's, directly Point. anchored Downtown Wilmington. to It's to in including per growth in above Drafthouse. in to Brooklyn from is market, an directly students. down our we our tech Point in a over is unique. Bed of of the the accelerated and That's and that have only home Brooklyn quarter. response portfolio. employees momentum our mind, campus X,XXX just this market top Keep Brooklyn. NYU in theaters Sporting It's also but Boral like the tenants volume Target City Point Center. Trader and do the downtown with from Hall in remains of with Barclays terms in curation the country Metro Not have screen. at City has incredible

pre-pandemic a year traffic XX% have tremendous that a over center. to to home also food increased We last the We're drive personal earlier XX,XXX is the signed we Primark a hall unique in is vendors traffic on visitors leased. month, and We're sales to on with Chao, in and its year-over-year. Fogo foot averaging XX% is has and open continued XX De XXX,XXX who schedule volume Brooklyn exceeding opened December. that year, in now to largest the square basis

open So north side up opened XX the tennis OnePlus across directly acre first the part Court fourth Gold passage. they're on Street XX,XXX this going to of XXXX. And That's feet our is track of past speaking quarter. to the square of indoor in quarter on from retail Street the openings, anchor Prince of our floor.

that's holding the finally space Sephora south strategically week, some the backyard that is from past with on last back really able that opening, the exciting be valuable a quarter the will to been to we're parks the this our Brooklyn's new downtown anchor street City of neighborhood. in So we've our point connection And lease that news and we a market. signed activate Point most part for entrance. And happening with perhaps most for just everything

our major Joybird, validation of Jackson includes already Point game and efforts. absolute and and for changer team's a that and McNally an lineup a join they'll So that's Lululemon, City

budget and we to we have South, spaces in fill with Chao Sephora and this Primark our de top and projections. effective line the and we on entrances End meet on And both relevant, to young, now both our remain with tenants. remaining net and curate anchored track exciting on North continue can the So Fogo doing on basis, while exceed and and exceeding we're a all

our we our that flavor So more a we're Point, stay streets. and to exciting tuned from more should seeing news you soon. portfolio on on And of hopefully, City within have what announce gives

will I that, John. with to So things hand over

John Gottfried

quarter. another Thanks, strong We had A.J., and good morning.

XXXX $X.XX interest our As A.J. are continuing as rapid pipeline And rate reaffirm not in through more highlights our beyond. everyone starting have earnings impact with results us discussing reported reminding preliminary earnings several starts our as kick further of quarter strong And bottom increased our & front to managed our debt embedded of and the third rates each Michigan color growth growth notwithstanding It's I'll confidence as we quarter from at of anticipated, been per third have calls. top the we growth walked with interest years had several yet its with expectations. growth and the that as NOI our XXXX Beyond results. tenant through through and year-over-year mitigated moments, achieving for trough continue us worth rollover importantly, our rates, on Bed us the same-store signed swaps of the on quarter in to well NOI And North rollover, for known I'm projections is that deals substantially again our that line expectation this and and the going in NOI this multiyear these exposure exceed gives to in are bridge We that use some our a core open maturities. earnings.Now Avenue current line once dropping our volume the provide share. Bath next in rise last to NOI same-store earnings of of growth and delivering we in.And our is we few will walk meaningful third this to FFO but

quarter, our our of of FFO growth in and earnings year-over-year expectations, this time X%. about for increased $X.XX third results to discussed adjusting the gain this $X.XX, that after $X.XX midpoint we at we for terms In have earnings the year, year our last XXXX the full

highlighting growth street end lease-up portfolio, It's again X.X% in NOI. XXXX anticipate quarter, for moments correlation once growth, Now which initial in meaning of growth; full the profitable X% years year between in same-store to we continue being same-store NOI remain and this the trend within at And of X.X% we moving same-store growth the our upper the with to top for reported worth line of track guidance. model. on X to our Driven the our X% come the exceeded of by our internal months, that both a X% to XXXX, a we observations following.Although our I our release about in NOI, bit comprise to and XXXX vast core preliminary XXXX our which premature we portfolio, few to and on our which highlighting few expect want guidance, a bottom-line earnings should majority spend earnings. of the NAV

projected bridge of of the the First, that With we to we expect Bed midpoint, $X.XX that XXXX, now to that also drivers to in gets track to deliver to FFO plus same-store in to that XXXX rollover rate run addition And which Bath have in addition range, to our I'm $X.XX the if & bankruptcy the same-store the that is for are we discussing X% on track secondly, annualize to projected several of reported walk growth in on Michigan to the $X.XX land factoring mathematically growth, NOI in XXXX. are projects. year. Avenue you key inclined you on quarterly And total NOI this for we through to growth our in are Beyond. years this been meaningful going $X.XX inclusive North even mind, so in in we redevelopment the quarter achieve

tenant and portfolio our incremental our our nearly first an growth current but reserves. driven growth rate. open with of in pipeline our the this the $XX coming by $X.X potential core impactful let With run anticipate million for quarterly will not add driver expectations pieces. yet to of as core million our Now adjusted ABR NOI being Starting and $X.XX signed the our or We of $X.XX portfolio. rollover that most to from through me walk

from upside the to to in beat the leasing goals. range continuing With coming quarterly $X.XX our our team $X.XX potential

primarily reducing rates, other notwithstanding we or anticipate reducing earnings in contributing along achieve through sheet monetizing Secondly, flow, by assets, about expense low which the without expect leverage to interest interest with we dilution, retained initiatives. $X.XX, rise non our with quarterly XXXX and significant EBITDA $X.XX balance cash

of I any the thinking external keep want also a fully XXXX layering growth the run run the about by increases over $X.XX. And A.J. mind, in growth so XXXX before realization repeat we after our for City from fund asset are share recognized second noncash at or how this NOI the earnings any perspective. quickly has $X.XX $X.XX in growth Third, City combination to quarter continued on along about from of of we XXXX. of rate exciting through Point those accretion Point, together and won't in we this anticipate assumptions.I months are Fund a V, made with pieces, have we all progress initiatives, Thus, the level, in few promotes, quarterly another particularly at G&A deploying already that talked track strong of gain past to earnings achieve the updates. putting rate that is when these XXXX, the we year-over-year adjusting profits

incremental further we factors with if growth were last that earnings earnings additional estimated And likely would accretion This increase increase potential stabilization, to are our $X.XX. upon in to mentioned last ownership. the reminder, short-term call, to we City and to dilution. As our NOI as both projecting stabilization, Point ownership along create we quarter, a reaffirming of $X.XX prior this net the in are we accretion

outstanding XXXX. our And our based should and that remain projecting we our will an partners, loans assumptions with on will throughout any we recent ownership discussions these remain unchanged, expectation will thus, are you update. is However, of our partners' change, that with provide certainly

occupancy. leasing core to transitioning Now and

spreads several at quarter unbudgeted resulting at million, incremental million leases we the average over in New context, moving leases created base FFO as to leases occupancy. spread growth exceeding just signed in annual our X% about these to annual mentioned, A.J. $X.X in and on of rents.Now City put handful As $X NOI this XX% these share. our of new during And in represented XX%. in-place a York prior to over And rents compared

our terms share portfolio, as signed core open our fund a redevelopment reminder, meaning from residing or core we but of And the in pipeline net in an include our core an leased the September anticipate year XXXX, XX% in during our XX, not this that occupancy signed in-place to the $X.X million. those share City if leases with fourth at of increased $X commence have half. our our nearly the the in this we $X.X During the And commenced any we of $X.X that excludes which timing, were in not double $X.X or it million of XX.X% quarter business, XX% including that our or pipeline million not expectation of and about sequential million to million commencing in remaining in would at approximately ABR. million but with XX% increase X% first relates executed resulting a operating $XX leases over half about the XX% of to of our yet with of of additional second solely yet open ABR will quarter, share it Point, of at to ABR when assets these our leases, are aggregated

minimal XXXX nominal market earnings interest capital our on from on core environment. we base with go items to balance on maturities, balance $XXX insulated may million and well are Furthermore, anticipate the next several years, I interest touch due track. any, sheet rate balance goals a our our That's where few coupled if upcoming want rates turbulent irrespective sheet. of core sheet through financing as Lastly, impact, to nearly costs. our is With for on rate to the hedges,

moderately underway. levels set With target reducing getting our back to out our leverage the actions have well that we of and metrics accomplish to core

our within as able order X get deleveraging next hit should goals amount Xs very low we our to firmly growth magnitude months. within balance small shared Xs of at in sheet $XXX to the given remain X in need mid- our million.And to level and the accomplish we be us, manageable to core goal that the Our front the EBITDA in an is And dollar relatively confident months that to the manner. EBITDA in of about to debt size, just the is earlier, then we neutral core I to metrics the earnings achieve our with set coupled into next to XX

with our NOI call So our are internal that, while we NOI has for quarter conviction ensure show calls, strengthened questions. along achieving up macro bottom the of line up our progress with cognizant growth actions remain open now the to this earnings.And uncertainties, multiyear in taking that we will this we on will the our growth

Operator

Instructions]. [Operator

Dijkum comes Floris Van Compass first from Our question Gerbrand with Point.

Floris Gerbrand van Dijkum

of months, on And asset you Would basis. about sheet Chicago is exposure the solid should -- going you And like of of set it the which going be instance? your Maybe XX potentially quarter another growth from initiatives. growth. again, So translate earnings NOI to apart some that neutral over balance is a next recycling upon NOI most that of I you market into also growth, like sounds also, touch suspect. to reduce peers potential some some talked in to looking to a

Kenneth Bernstein

All right.

John. So let's actually do reverse order, that in

our we Markets start Chicago me our Armitage of for don't of would basis very reduce a logical to against as to Avenue, some We do some public markets, mentioned, exposure. have in much leasing in sense be for on exposure. us Chicago need are one city Let the that But Rush/Walton, markets reduce headwinds us anything to exposure Chicago disciplined the make recognize off too well. in that. faces would terms like having to any A.J. and that of

a us should expect would exposure. at you So to the that basis be our reduce that time market disciplined right a on

the cover thoseâ€¦ other As you it relates John, and why don't sheet initiatives, balance to

John Gottfried

in to this an think be earnings-neutral -- to fashion. target do as mentioned my our in it's going I is I think remarks, I

that there. things retain another the growth us, of that Albertsons to getting where deleverage as front such source with cash coming be of in no EBITDA and with from there's that in we things us the think be like along couple that, will used well in we as as of to deleverage as So have works monetize flow earnings also other a that's that will

Floris Gerbrand van Dijkum

on the certificate follow-up at you one what can update if not on update really still of on you and will, got give Ninth? on San Whole at And an I maybe the can status got neighborhood little Obviously, Maybe give still that if with Foods occupancy. also a its centers, an maybe a Bath XXX then that space Bed is bit. the these have Francisco you've former if two

Kenneth Bernstein

Sure.

table So with with city. their working have community A.J., been changes is in their an the support of then of set past, and terms occurring, support approvals. and the opening about local have increase seen let some City through Whole Center, that Thankfully, the me the as in leasing increase in demand. an leasing we progress, we've in Foods for talked

year is that let earnings So going Bed to each Bath junior it Whole next then had a around I as recaptured leasing we X-level that noise is space. shop a pleased that that below-market that there. everyone, year. will Foods & about space, little A.J.? since split approval you some was but shop schedule X oversized remind we lease, The But for in Beyond nice X Why space; color well.XXX Ninth, on and level, but X that you and on relatively be boost that some this we I'll about, progressing, talk is an incremental are how an to anchors, with remains it don't small created further, A.J., give apologize process

A.J. Levine

Yes, sure.

rents. Ken three has anchors the feet said, it's up the been. you split can really plan and always in right? shop levels Bath been So then on to as Ninth Ken XXX drive and that mentioned where was redevelopment. X into has space a spaces, XX,XXX It Bed always Two small

a for times, think come takes best in it even So that together. the while I of to

store, that center a second box container air that off are at portions of We the and preliminary to good to getting on the and box. interest the Bed portion we start Bath the center the leased open of on filling are great we

Floris Gerbrand van Dijkum

alone for Is massive Point Point points part to it substantial. pipeline -- same-store increased Is same-store stabilization? pool? required City to in more your Maybe that be to it last City steps of Thoughts be pool. At sounds going of question. I what a not $X going like you looks driver be Because captured million pretty have your that's at it's SNO on what are mean, ownership? the

Kenneth Bernstein

Yes.

the way about we here's do thinking how we're So It's our it. same-store. consistent really with

so think the same-store situation. what key growth driver inappropriate will will that the put stabilization We that be will hit I to be once not would be -- year in create after stabilization an

I is the you still be to out, residing a ultimate one secondly, within of So level is And as and is a played this pointed that think fund still out. stabilization. being getting asset would ownership

So level And are is we of I the that. stabilization. think factor, that I that for our metric really secondary want will to those it's think be growth what And to a to use hit to that's are that's going same-store really, our but going the a be to of going getting of types assets bottom point drive line.

Operator

Bin Our next from with question Kim comes Truist. Ki

Ki Bin Kim

quarterly So of on or $X.XX run is $X.XX that to how $X.XX the income transactional a income? much FFO of recurring rate, promote

Kenneth Bernstein

Yes.

start preliminary. just I is Kim, So will with what

of I of business But to giving not see for would you from portion next our years. say that should couple the expect detailed full what we're So guidance. is stability

it -- to similar giving would guidance, I what a be have would say if I again, not we level year. this So

Ki Bin Kim

comments as are How you to further that does might to manifest book time about we back ultimately? impairment could think you some kind And charges? be those assets be of cut itself your worth? point, reflective monetizing that your assets. possibly value going Or there And noncontributing closer what get of of

Kenneth Bernstein

Yes.

would value be would say the book drive us as that otherwise. to best the our proxy should accounting I So rules impair

book be metric. appropriate value an I So think would would

Operator

from Our with Jefferies. next Linda comes question Tsai

Linda Yu Tsai

to And What rents? not how percentage your $X.X XQ's street SNL? of are million but high-value fine compare occupied does that

Kenneth Bernstein

Yes.

I given leases in -- would math, walked the XX%-plus as think it's the A.J. through, quarters that $X.X So head, I which amount Linda, in is as just the us my percentage. both range, higher say, do disproportionately prior have would million. I'd in estimate, well the to I compared to the but a

Linda Yu Tsai

be half then in next terms them versus monetizing wondering And if terms assets growth year, those second lower just in you of half? sales of chunky the to first expect

Kenneth Bernstein

Stay tuned, Linda.

I what I a on range the from $X.XX, think I rate, But that. midpoint, is think the color we'll those think say just drivers about the to think I way more it. would those X I'm give run of between picking

Linda Yu Tsai

their down And -- you've What with as are luxury bit? the of brands. just as today I past A.J. spoken move outside department control there look to those A.J., retailers discussions slowing in about like last of reports they one sales some stores think the for they're that one retailers a demand high better

A.J. Levine

continue. discussions those so Yes,

and the pivot brick-and-mortar establish narrative, stores really where department some of away directly. brands presence We their the brands aspirational they continue to see luxury interface those the can and own where and wholesale from they customer control with can

because continue that As choppiness, that acknowledged last long-term focusing see the because short-term years, said, Linda them of are of on past I physical still had and and the store, to their of they've frankly, growth. over performance most nature X critical

So slowdown that sense. in no

Operator

with Mailman Craig question Our Citi. comes next from

Craig Mailman

cap your Ken, to mark-to-market here. dots kind is curious, needs the a private other and New your rates in market thoughts at versus here are some implied in I'm your half you what or as portfolios where street the mark-to-market kind interest going maybe of rising we seeing kind you rate of assets. of rents, that the Xth of where blended given earlier particularly valuation what is York, and Street the do of on I market Kind assets that portfolio want the CapEx versus on could think to you're cap the of comps... go look versus as and that perspective and stabilize connect just on how back kind to in your kind from your of comment rates of about

Kenneth Bernstein

let try my time, host to Yes. factors to do And just digest out, there of certainly, you moment this me pointed in are at a best. as

so growing asset confused, piece value all, where the that's say that X% period that. But be not stable, at or are what rate the period X% I'm and macro of you, will high, of at like discussing events of you hard in control to versus growth. events more that. seem versus tell First any is the know over is all this reward I here, of extended you an to think what is growth, was going we take right that interest the well, year see And growth, market It there to micro the a growing is assets confusion ascribe that a that if might now, more markets to where I should which where rates is time, it, cap was X%.

while, ratio was there our a be a CapEx. streets. It's or point, been between Second suburban rent, a a the at rent in our CapEx the case. rent for portfolio much is to meaningful of relative to healthier the distinction as higher CapEx, in to about expenditure there this versus distinction used and talking least We've That meaningful it's streets. in

we industry, that Now gone are, an case due distinction because up CapEx as xX cost inflation, also interest up that's the not but have gone is the that only thus, to to has only to beginning well. xX And one or CapEx as that carry digest.

Third point. and final

this sooner as make streets, on operate touched probably capture the And our higher like than good distinction mine, In Your suburban years guesstimate We're of contractual and as well. going I to as the what later. forward it's growth. that to retail going more important between we have over our under NOI the going assumption looks rather certainly the centers growth, XX and next street to be better. A.J. is X, inflation

become important. value resets. we to have going that's streets, think I more In the fair market

going more important. the I to streets, think that's less in become CapEx. And have we

markets the should the should down through able of over and markets for that But long-winded of our settle on knows to where be or saying we importance recognize think that that's deliver the an good year the go who of growth and for growth, debating they CapEx, will So rents, piece will are, we be it. especially of the portfolio. that good higher which era X, we if certainly less values our tenants, for way a are next and heck segment our

Craig, long-winded confusing all touch those a a So on pieces of in way, time very to that's period. trying

Craig Mailman

how square earnings prepare rate leads proceeds accretion, or on I cap financial And guess appreciate very street even the the noted, much guess, some in you the And a able this guys distress pick may growth, you assets decision-making? as kind as your coming thoughts. on crisis asset good the -- potentially long-term to I were that view would the going NAV versus kind of to kind do right. maybe Street mark-to-market you you of circle guys not you importance look higher the kind communicate the with long-term to do how in of maybe I sales pricing attributes if the some or you're just maybe But of the on of from off potentially either of think. dilution? But these a of some using short-term because some question that from people in

Kenneth Bernstein

Yes.

expertise, to to we from any to even the given as we don't that. that where as brace especially as that leases short-term spook that have for forward viewing tenancy add and are can what to to some competition we find So can want we because rents. compelling, opportunity, months a in I our of that. again, clear. clear, rents to are deliver especially of XXXX. there. XX terms of look That But around. yourself me acquire in period we've can And am accretion dilution be this about the opportunities XXXX be quiet we would our corridors, decade can A.J. there's these anyone at pretty wait variety when institutional months to I avoid when we capital XX, about XX% saw just the But think rents, I acquisitions think way to access as The go in capital time spread time turn means quickly not opposed over value-add XXXX a hopeful XX I'm be say if he ignoring seems seen Prince to let XXXX ago, that has at this transactions, moving to think sources. just is where to assets considering, ends conviction to on and Broadway, less to what that again, arbitrage we a opportunity and right for about diluted that

Craig Mailman

And last then one one. just

'XX value look market â€˜XX, in adjustment many opportunities how fair we have? guys As and maybe

Kenneth Bernstein

John?

John Gottfried

Yes.

say have our So we the up. vast majority Craig, think I those that of provision have several streets would vast, of coming so I do

of of next years, that's couple think we're role, say, we And of we're sort over an as through I for see speak. and I that would working constantly going A.J. But that opportunity. mentioned, those. opportunity some to So having the

So stay tuned.

Kenneth Bernstein

this much. point don't want me conversation I but out, too continue Let to

standard the fair of contractual The so and like the everyone new to that a greater how greater understands our option has the market value of Just leases, looks most which market work. value. at of fair resets tenant bump,

So good news this appraises the rents it's is downward. though as not

good their business tenants is to more with our growth.So next exercise news we of We strong sales But than the that let's in weren't about for using where Georgetown. they're streets M options. enough are those XXXX options are now However, happy from cleanse see we move is exercising talking continuing until like at weren't their XXXX market the were the those on are fair value to in retailers, all tenants resets that opportunity to that Street and to obvious And question. exercising. reasons that period conversations

Operator

KeyBanc Capital with Todd Next Thomas Markets. question from comes

Todd Thomas

though, you appreciate expect we $X.XX early range the to you is year no or the end the the about that of entire to run range that $X.XX mentioned to cadence throughout this throughout meant that you rate and more Should the should the higher quarter. part year? think think the I below in part Question, range as to that of year quarterly relative around XXXX. we John, to 'XX at the Or comments commences? be suggest the rank your the that be latter then above $X.XX and $X.XX of of detail $X.XX, that

John Gottfried

Yes.

guess couple start a with. thoughts. Todd, So I of I'll One,

$X.XX I fair being measuring the formally biggest core all We think certainly good There is to that land is right giving as we not the open annualized year those growth for the think not do our start that all already will be signed leases again, not But as We pool assumption giving not would it, at. an I what is midpoint as bunch guidance. have different on executed. variables. And wanting think, right the a are of one I does think equal, picking number else but I it now. now, a I throughout formally for X, and would January say, estimate the are guidance; the probably driver. without say year of and the we're formally is that But quarterly we on an

Todd Thomas

you're midpoint. And those well. sales the guidance embedded $X.XX so to in that in then just I what it's for missed then there if I Okay. comments But promote guidance about stock $X.XX around year, incremental revised can the whether is XQ as sure each this $X.XX, for not quarter net in And in you your income the at to this believe, XQ? I'm clarify what comments anticipating 'XX? achieved ACI if Are the that's you additional implied XXXX, or

John Gottfried

Yes.

whether I in of $X.XX So stays first. it's think would million to our I'll very combination business, a fund very, et that the from we stable, one just think stable. that We again, $XX and of The -- with fees, And that look cetera. $X.XX start Todd, promotes, $X.XX. is that remains range we're remains incremental to the

of to range the guidance but factors, we In year. within for income, terms of that's tied including that we be number the at put out again, will a beginning of promote, our taxable our initial promote

Operator

BofA Our comes Jeffrey Securities. with question next from Spector

Elizabeth Yang Doykan

This Jeff. on is Doykan Lizzy for

possibly of speak bump at rent for we in expectation X% should if assume the on the to on can't you environment? consistent of a you that how if numbers, X% NOI within contractual 'XX, should change speak around to Just based expectations least street could just demand on exact growth And same-store lower level maybe suburban?

John Gottfried

Yes.

some every the still to use typical say get Lizzy, the but have X absolutely the it's suburban. XX% norm. to We X%, the that on I do would The X% is think I able is A.J. years. fair that in assumption the leases X% Street So

consistent So below it contractual our X% is averages say past. just in would the the what I we've growth done range. slightly that But

Elizabeth Yang Doykan

costs under Okay. rent Great. and that net back go for control effective growth. just beginning I keeping and to CapEx And to Ken leasing around wanted comment maintaining

should give us expand for better are the on when million Just idea that from be further online, give maybe wondering of idea and the ABR too. costs if real-time could you Snow rents come maybe in $X on and those a of what update better associated recognized us a costs the how a

John Gottfried

Yes.

piece why take Lizzy. trends, So the talk don't Ken have -- it, I'll through the of I'll then

any So do those I them. sort that -- about around we question think it most for recognize the those when are cost way I'd year generally, portion is But from Street, signed We $X.X That's think pay the we occupancy the of a periods pay the Street. the than that of we say, is again, take less. pay upfront commissions, and in them the once they costs less given that chunk -- of of of we our was good But part, different the and in we is And to then a advance say, of your or cost the not that payback those? probably -- around. when is whether do, million $X.X will of as whether A.J. I those terms the mentioned, open upfront some tenant it's would good year build-out time. leasing there's when will of million

could you a depend I talk it's want space seeing quick whether that on cost trends suburbia, give on you're you're of going do whether So versus cost to to want And on way do suburban the update that in on to just on but AJ, side. seeing you the anchor, the terms in the line the the to that's math. on Suburbia, it's

A.J. Levine

Yes.

mean a XX have really months. in So last to I been junior elevated the put box the for cost

be rent costing put this So anywhere years $XX point at foot X a depending to the I'd junior typical X on And between to say can is, of that a payback. is box in. and $XX where

sort is it the just the So payback given on seeing we're certainly where that pronounced the periods are. shorter street very rents of

Kenneth Bernstein

positive some with Let news me of this. all terms end in

beginning per cost, in in our while locations the the per foot, And put retailers to or recognizing tenants the We is square price see are look you disinflation those these replacement interest to at foot gone are the terms actual to suburbia. cost staying rates, important. finance in up or when costs some of build-outs value in has with opening critically

So will profitable expensive, we're I drive still our And a suburban the that component part think while business. to able rents. be of

Operator

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

Paulina Rojas Schmidt

were reasonable they I have if peers big But what's as or scenario? given been facing, you case My your if we you're And about year sharing average your perspective, thinking a best I wonder, from have failure that some that's are when of of that next apology think perspective. the an tenant want apologies And uncertainty year, to idea because I very from big not. thinking tenant this. scenario a sales about pretty picture missed a

Kenneth Bernstein

is credit on Paulina, or the renewals? question side on retaining they're the your whether

Paulina Rojas Schmidt

would I mix, say. The

a So nonrenewal type so it or any could of OpEx, both. be

John Gottfried

within I core. to $X.XX think $X.XX So for my that our was

whether We right have of sitting to point each stick and view tenants which around. the to we And a A.J. next by space I have size luxury -- our given as that former to could go talk space. other, and going we

giving with day. space-by-space So every have able our to talking his we being go our tenants, he's luxury to and of team all portfolio that and along

anything, space, I I to wanting that seen not that. had tenants stay If So potentially we towards any to to meaningful stay. biased of say going tenants we change say is are at their not that. would I have look if more have then it's maybe would And in what

up. In in oblivious work terms yet not calls as some not not but a capital happening, of pickup to not, teams coming on of see wanting leasing we to Not should have not to admin but we slowdown suggest see or another payments? questions or side, the plans? is least Do we -- closely around through on We the credit at have I reserves. thing payment watch Do getting seen say seen that we're not seen what's would very have that. tick because it's markets potentially the we we

but $X.XX follow-up. are appropriate and conservative to not in those, reserves $X.XX our So in we're number, that seen have a

A.J. Levine

me beyond let And add and above a color little our portfolio.

Given If COVID. than where the is see lot their often who companies, stress their to get as the opposed I could sheet, rise could meaning rate of especially come likely will And a we balance we we tenants' were watch. retention their for that local be to get to and/or got tenant would failure sheet something in business models, it since as more likelihood that private business. examine, sales tenants' from interest retailers rates, is this our help during be the to balance occur, tenant

those did we supermarket et failure the have The rate suburban grown portfolio to anchors, not So rents segment, then. local see especially adjacent nicely. in cetera, our

segment watch. that's a we'll So

it their see. feels John that more we'll then any but terms rate common tells on said, And they seen than in that next of John so boring may like something us side, year watch. be haven't So sensitive that's slowdown, we in but interest more be volatile may sense far, as said, we'll general, business, as

Paulina Rojas Schmidt

trends regarding you And the question second a openings portfolio. then seeing category Are new perspective? from the in

Kenneth Bernstein

is tenants seeing demand of we of you terms coming new don't that in from... what why trends take on in A.J. So terms are where

A.J. Levine

Look, to We're COVID, continuation to our high-growth sort brand, see. continue those of what continued to huge luxury And first our of course, the We're days most we that's recovery this around of I obviously, what Yes. entry of And then, the near seeing continuing behind streets, most high-growth was saw quickly into clustering we led tenants earlier of want retailers, [indiscernible] that of for cotemporary of of essential of think influx them. tenants. clustering and call but the our then be luxury markets. that, by see aspirational the we the luxury.

On They of the being the of the So store suburban new sorts leading new growth a stores of terms the been seeing openings of have course, Burlington's as high-volume growth those is our side, store the TJ the right? dollar by way raw lot the led in that the openers. is and well we're or as, world. discounters, net of

Kenneth Bernstein

everyone, especially let just this. who about thought And remind haven't generalists me

trends, was understand the growth. seeing Some best profitable. of we online be there demand. this this reason years few omnichannel ago, the some going an to the in world, pent-up stores notion you're channel sales that And of for were most the A are there now

or is pivot, this recognizing it's advanced it's good secondly, retailers that seeing you still even still time all You're leases that to whether uncertainty. sign of it's are contemporary, whether a Then now discount. with seeing whether luxury,

an slowdown, still results. economic I it leasing that results me will will think to good So wouldn't be going choppy, to some surprise uncertainty, continue see choppy, we'll you're be see and consumer economic tenant spending

Operator

remarks. showing further like not I'm And at any closing questions to time. this for I'd call the back turn Ken to any

Kenneth Bernstein

Happy We forward quarter. time. next with you to all your Great. for Halloween. Thank speaking look you

Operator

and Ladies gentlemen, this today's presentation. does conclude

have and wonderful You may disconnect, a now day.

Acadia Realty Trust (AKR) 31 Oct 232023 Q3 Earnings call transcript