AKR - Earnings call 4 2023 | Acadia Realty Trust

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Operator

Thank you for standing by, and welcome to Acadia Realty Trust Fourth Quarter 2023 Earnings Conference Call. [Operator Instructions].

I would now like to hand the call over to Jeff Winston. Please go ahead.

Jeffrey Winston

Good morning, and thank you for joining us for the fourth quarter 2023 Acadia Realty Trust Earnings Conference Call. Winston, Management am Department. Jeff in senior is Asset our name and a I associate My

and may risks statements and as most Before forward-looking uncertainty, by including statements periodic Securities in results call historical may SEC, disclosed made the company's begin, and statements. XX-K of during deemed we of please XXXX this only from the Due of that those recent be Exchange Act call, XXXX, differ are the to and of materially the such meaning forward-looking Form within no aware undertakes February update variety company duty other date of that speak them. with be filings the XX, a statements the forward-looking actual to and not indicated those the

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

questions, call to ask opportunity the participate. the give for per first we X open becomes your everyone that you caller to round to Once limit questions

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

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

Kenneth Bernstein

here metrics Welcome, questions. guidance. hand and John our Thank after Happy Day. with and sheet the Valentine's you. Then to Jeff. everyone. I'll take few we're over And A.J. our Levine. will A.J. Seeley Great give our earnings, that, comments, Gottfried, call job, Stuart balance to I'm here discuss a John then

XX% And NOI X% release, see strong. this X% strength, retail in same performance same-store growth driven was of comping our Fourth NOI XX%. also by spreads as delivering our and nearly As prior of growth XXXX quarter portfolio, is were very our over lease you portion property strong spreads. can and off earnings well. leasing results street the growth was new Same-property over NOI year's growth showed continued

pieces that detail, our I'll moving having at top level, the line's track. property earnings translate and superior remains bottom goal let the into line on John our in discuss growth but growth earnings of short, growth of creating in

As think solid some respects, both year the we our and continuing. look to beyond, viewed meaningful on. shift leasing momentum open from leasing the saw XXXX not it. activity signed more might last evidenced is behind we there and is by another significant just an pipeline as last in This And perspective, going growth while quarter be a I quarter internal is

long a more sentiment simply retailer We now thus experiencing and secular The COVID than just lasting recovery. more rebound. a COVID cyclical than past are and shift retailer or a retail feels activity in lift

and that staying add relates it tailwinds delivering couple is looking While in discuss to impact secular street portions our this last the a the will we and the most And retail goals internal rate of its more strong saw growth material portfolio, having this our detail. these The power. first street lift is for it of we're that, have retail real trend portfolio. we as But support of been growth in in has suburban solid now years. on longer-term drivers A.J. should further within and seeing there. as the performance component that growth multiyear the likely necessity to growth, of Levine further still discussing

are starting to Then years, along growth on continued with quiet growth internal actionable external after momentum several relatively emerge. opportunities

over area and accretive the of out. last And not pencil increased institutional years, the has since a narrowing growth will of bid-ask an are seeing investors buyers. just retail to capable fewer We well-positioned spread several start been that likelihood focus there are by

improving headwind coupled significantly, inverted a with yield demand but and transact. is are helping values resilient And sellers deal tenant rates beginning other Increased due cost, the realistic be to granted, underwriting. interest realistic still elevated more curve Now this and whether to flow, more about borrower factors, willing shift. more is seem optimism to or for improving to appraised more

that but quarters debt activity our majority focused, other or ago, as discounted A forced of to still couple be of as sales, fair either like retail we it's refer amount a products special be certainly well. of for I likely distressed office, the there would will and what thought situations,

participate nicely. are of relationships. means of may not of is to capital emerge But pipeline distressed, just sellers this nature not but patience. nonperforming motivated. this shift our in some have that a And more seeing together situations power, highly special the now much They in unlimited broader type conjunction of variety are opportunities staying coming we of our importantly, strategic for likely Given distressed X investing will begin with

You and will see reflected hopefully later year years come. to this this for

growth. thinking So about external how here's we're

of at structure, compelling air, in open try to and of within be are we ourselves which as retail to ourselves given open-minded position consider open opportunities, which any which areas to product terms all most time. In types risk-adjusted growth to capital confident be returns highly

that looks today. landscape how Here's

regional was with dominated focus in or fund to to turnover which net have effective the tenant attractive continue In V going cost investing Fund But case think growth. anchor we'll be investing, this paid will in highest provide But of in attention junior have of can yields. power format. centers, have venture will We the on heavily and the growth effective to net or impacts this strategic still our order as returns. area re-tenanting, special these risk-adjusted terms the to

covered or during of most or because the in anchored strong profile, the resilience segment centers, their neighborhood crowded this of is Then bidding. most in underwriting. for of defensive demand the investor terms probably terms supermarket of COVID, remains ease And competition

structure, for growth value-add could a We to either hard joint in but in component, will both be be us have So opportunities on will or constructive. be sheet the to case, unless venture balance add compelling. supermarket-anchored assets, right a it there's

of several have segment In retail, terms will after believe we highest this growth. the net bumpy street effective long-term years,

an the don't growth rebound upside. on of a street seems at with in for reasons, fundamentals, this take going floor to For to potential. rates ongoing is notwithstanding elevated that cap retail variety account asymmetrical be into in trading yields an And creating opportunity the appear

markets street retail case. of The street And not or assets. other the a Now not expertise fear zero-sum the key to requires initial was uniformity some level winning too while it's be are of that of granted, the as other open-air all streets, Sunbelt retail all lacks losing, highest it underwrite idiosyncratic with game to out equally. markets turning the recovering and not

can and For we thriving, meaning that Nashville. size are there there. And in set of deals a most out think be retailers, from are SoHo plenty there than synergy since more scale there retailers thrive cannibalization, perspective, should of is more markets opportunity and

portfolio, We retail an think it highly neutral our where a differentiated do we the of our are entering earnings in from a street benefit on leverage we core can provided expansion shareholders NAV-accretive basis. portfolio period our will

of positioned space, consolidator Given and experience the be our a to in well is retail street this cycle. extensive Acadia this in assets expertise our phase in

leveraging practical to the balance be opportunities While to grow a that suspect will will to adding also portfolio, of sheet, component that strategic capital XX% current or of that extent street the key include is be retail urban, on there larger could the street relationships. also we focus our several our

of sources in inure should a to to and are We period having multiple shareholders' equity benefit. access our we're debt

Finally, come of from growth from Capital recycling multiple thoughts. It can and allocation few a a areas. deployment capital be strategy. will part our perspective,

and $X investment from that of strategy. First, it platform. consistent able portions our capitalize be should we portfolio of as redeploy over bring or this is high from or and might then growth This assets in portions interest our a of And means our non-diluted basis increased on capital fund interest. growth core with then management should long-term currently not billion our not Investor new we able accretively. be in be on to growing, to second,

equity balance with can capital also are strategic to our we recent them, where issuance, be sheet so metrics afford our initiatives. we our recycling want to getting Given

doesn't it to meaningfully volume add much to external can our needle acquisitions few since a move take Finally, Even the for growth. us.

So are to stars beginning conclude, the to this align year.

private focused flexible balance combination the will solid a X strategy. in of be having capital positive a and their execute and on first, key improving growth way back a access accretive to We debt on both third, internal the improving public use and external growth: solid keenly to accretive fundamentals, as and And spread our growth markets, platform retail trends. second, our executing of improving inching position, highly growth; great driving strategy, we're sheet; to bid to our are maintaining all drivers investors

that, the turn with to last I'd to I their call And hard like will work the for and Levine. team A.J. year, thank over

A.J. Levine

Great. everyone. Thanks, morning, Ken. Good

asked I the questions. X same got every week, So

saw for that last retailer Despite that X-plus there into XXXX is choppiness and beyond. a years, no. well feeling fundamentals slowdown. will answer a consistently as in the the is we has and of in if of First, some any sales sign And my strong continue remain trend XXXX, been resounding

still for still physical our the course, they strong sales greatest is are with the growth. see impacts we Now naive growth of but to always that are continue in against significantly positive of I comping saw for of does are when of a in and growth to that normalization doesn't consumer. the the that anticipated it any signal they sales, under coming new of off a XXXX. the mean But the yet our they of There slowdown tenants, XXXX store vast and driver businesses. are mean in exceptions, their store reality remarkably that to we're year majority record sales tenants, or profitability operating XXXX, They that inflation speak

When are across despite X still that comping the general up surprised slowdown of And our the no board. on against luxury they relative Coast XXXX, Gold holds me that It me. longer tells in XXXX. true message XX% a tenants

XXXX, that stores desirable the This The on and both any the our retailer in high-quality of the Do So have counterparts high-growth particularly new challenge space. the you but streets. seeing secular in to the late of space question. the biggest nature. by leads supply we to well-located, have streets, this more suburbs for me? mentioned, be second true persisted exceeds today that well space. The demand started is me for the for that trends lack appear Ken is And facing as XXXX is and early result of

deterred applies also and disciplined planting new M like dynamic brands but markets That's these Robust, street. like expansion department luxury up, from on and freestanding other to and on both yet true stores Street Alo pivot storefronts brands like of existing certainly markets. like-minded their Yoga, flags and shown retail into that Glossier inevitable toward our markets the Gulf yet hasn't streets thoughtful where the hasn't open-air luxury our markets. away for and and clustering but SKIMS from within SoHo The Coast, the

In Rodeo. these demand of many cities luxury the SoHo. diverse They and shopper increased like and even multiple and prompted have They a customer Avenue can Chicago, add and in demographic New capture in Los Williamsburg. market. can neighborhood X within They the the and can to [indiscernible], York, case retailers, of do they the Angeles, can greater including locations Fifth profile tourist has another. in do local Madison Melrose And

over markets for Street, supply natural years Stronger is to Coast, sustained will higher the few of are seen sales sharper and we've seen high-growth recovery our The suburbs. rents provide streets saw over pandemic relative rent the a fueling the into double-digit to SoHo, In growth demand that we existing Melrose, stronger now decline should our to entry, Gold growth. recipe years net the continue. continue barriers like and last on we've last in low rents. effective M layering that the growth the rent In few remarkable terms coming and our

even these with many moving experience in been remain forward, clear, seeing, be our for healthy double-digit growth. markets costs of growth our with occupancy the still to affordable that low And a will markets And rent tenants. moderation can we've

proactively past loose we accelerate continued positive price quarter, a done fourth the spread On time X-year a in and spread, this a mark-to-market same Acadia. we to XX% and a quarter, in did a like space period, the XX% at out-of-pocket just the over third in In streets mark-to-market. our note, related and on accelerated SoHo, quarters, cost this we X to with was

the but work early, value. will identifying getting we that that of to unlocking nature allow more resets. through and spaces on work, the for And can't to has Now opportunities us themselves capable that's very team FMD centric hard those that than shown of portfolio to then be street these growth capture our recapture

this Of portfolio. in million Space SoHo ago, $X.X growth not That's at is $X.X markets X unique only supply, with brands, course, that high our those foot year offered a in and recently leased of ecosystem that traffic right at the the to and ABR luxury, being was X million. happens in attract in just year. low That including will shoppers. combination cluster create to XX% right

newer and traditionally as San the like recover, scarcity Tampa. to slower like continue that of markets high-growth 'XXs, Avenue Michigan eventually that the Avenue Additionally, to rebound Madison accelerate as in and of Francisco markets been space well have should Nashville also North

is a growth Retail to both established zero-sum this game. in has and and mentioned, continue Ken and newer expansion not will growth occur As rent markets.

all portfolio, of Already Monaco, ABR the Overall, that new both have million BING, including of SKIMS suburban eclipsed we another retailers a year in new in and pipeline result strong. in added leases advanced of in street this XXXX. We excess we million yoga, leases, stages core core number remains year, key Madewell, ANINE we our signed million to negotiation. core $X and ZIMMERMANN, $X leasing. the Alo XXXX, net in Club of of the signed and of exceptional leases new in-place was this approximately $XX X% representing In of

Shifting minute complete. City for The a Point. is park to

and in neighbor, on tower Our from anchors, residents York including upper are of Nation no longer and outside more City down, New tallest and we terms move is opening Target, open floors starting occupancy, a Primark, to into the which of The our in. level residential Drafthouse best-in-class is Alamo for And in directly is Trader will retail recent are construction news, Manhattan leasing theater spoken across zone. concourse are scaffolding a In be Joe's. Live X,XXX-seat and Point. the with coming

anchored embedded mark-to-market at Point beginning. de leasing on And of City momentum with there us. is south. is Fogo to this remains But this at many our the to opportunities, ends level yet Point just most north with City and valuable past Prince space the of the we of street Chão successfully ahead Much Sephora year, And despite story substantial Street positive both in lease. value still respects,

year So streets a and for high-growth exceptional wrapping it volume for all our up, of an no on leasing year horizon. both our suburbs fundamentals and the an sign and exceptional in slowdown

that, off things with pass to I John. will So

John Gottfried

Thank you, and morning. good

we earnings in and coming outlined year with above finish strong in our our initial the As a release, same-store NOI expectations. to our had

momentum the the the continuing. is continued, our street been As portfolio XX% but that of a And not within growth had as year, only kick during accelerated recovery anticipating throughout retail we off we new fourth with year as quarter.

to Our a to and is accretive along sets expanding next intact, a position of multiyear with that core NOI on above-trend the which now several remains internal for same-store up in years. pipeline growth XX% FFO an growth balance sheet capitalize us of over opportunities, X%

growth per line of share of quarter. couple upper same-store NOI, to our reported out highlighted X.X% And provide I'll starting for range in related with We X.X% in In same-store our with the end to of on some more quarter. quarter. additionally, our release, fourth we Now in FFO things the for for a results. quarter, we guidance the quarter $X.XX on And color as terms the expectations, fourth reported year. point our at our came growth want outlook, multiyear of with with the of of the an along we I update

$XXX,XXX First, the which we of recoveries, comping have the cash results approximately which, were period quarter, our excluded, fourth if XXXX to off reported quarter would X.X%. prior had included increased X.X%

Street are with in continue projecting have will Not portfolio outlined double-digit a we this annual as Street, coming XX% this that only model confident in release, next feeling anticipating our growth of from increasingly to portfolio our NOI acceleration, we XX% been generate basis. growth about excess years, same-store million our our and Secondly, on grew pro with the is and XX% roughly this expected to the over Street NOI our from $XX XX% approximately of annual in incremental several of $XX our growth rata share. million but

And along $X that half million are built accounted than million on we $XX commenced X% $X $X the another from that sources. are well way not into the of $XX in included with million escalations to capturing are more but leases, executed of with this leases with of $X another street from to million us signed, already and we will yet Approximately for. retail Street $X our million reported December already at leaves Street that not XX, our come the million have additional coming yet from of million pipeline which open growth X

million projected our our $X million any or the just And same-store available of of to expiring or to years, growth XX% $XX clear, is half from over Michigan coming the rent annual Avenue. to our about this $XX few NOI leases is is next portfolio. to Meaning redevelopments from $X with balance inventory coming growth be on million the million of potential from the come upsides North First, from space. lease-up before anticipated current of spreads cash

are encouraging fund solid on multiyear seeing projection our also that our our Street, from projecting recovery. we a addition also and pointing see are worth trends Michigan North case we neither we core the while assumes across It's in out some So extraordinary or activity base to platforms. are starting guidance growth to the XXXX

X% same-store redevelopments. are XXXX, achieve XXXX to news projected the X% our in XXXX core growth, already we businesses, growth necessary the signed good to of fund to team NOI vast In look of total NOI our majority has is our into that goals. of the addition and of X.X% projecting fact, leases as And inclusive we from leasing

of leases, of of $XX December representing from pipeline signed, executed core And not our open our yet million is the X.X% yet $XX With pipeline but ABR in-place of and of comprised with pool, at these million share. million but XX. this our not fund $X portfolio at that share the open and operating we in represents being all our our from million $X assets in redevelopment assets our business million with which our core highlighted release, leases same-store $X another from in in amounts signed of signed,

Let's about now to our XXXX. on transition equates of Consistent FFO projecting NOI what from growth from earnings our the gain last Bed are X% for business. introduced the with over X.X% how call, midpoint. $X.XX and we growth this non-cash Bath I This before impacts XXXX earned $X.XX FFO at our lease our of adjusting the on the over promotes fund for when the

will that quarter's which included As commenced XX% you With open ABR of in those may recall the of $X earnings by yet our the our street being with of and growth million that in pipeline, we driven $X from that represent approximately fairly of our is singed strength along fourth underlying but highlighted late core in XXXX. our release, throughout another our leases commence business. million not call, XXXX is last quarter

upside our over in earnings point X% from about Last before the potential growth numbers for year-over-year few X.X% of areas. a strong with We promotes. earnings or see on

North Bath First, and of rollover painful on and Bed Avenue we long now the Beyond. bankruptcy are past & discussed the Michigan

a base these neither our XXXX headwinds have forward, as a historical fact, as source upside we of multiyear are In near-term recovery. our case projections assumed now or guidance look

million available long but executed significant Secondly, growing representing for With and $XX of we sign, progress. list our X.X% out and made of a not leases of pipeline, open coupled our core NOI, fund have in leasing with LOIs space.

beat with great year, the left in lot are not to in but hit XXXX them. leasing our a of only realistic to calendar a shape We opportunity very goals,

beating And not the on And finally, accretive starting in any our some Ken exciting team from assumed rental we is have rates But are in growth. leases, factored as rents the is we that to accretion our had opportunities. see not earnings model. routinely discussed, and to external new mention we achieving

completed discuss a about And raise now, let it as off start me will is January. the I about in can how at the pursue point as balance first sheet now where and talking our with equity sheet, to relates these. we balance early will we aggressively thought we And that

long able issue NAV. we to you instance position at being and raise it As go the balance basis, in non-dilutive unique this in and on least below our amount to to would goals of sheet decision a of a accelerate But a year, moderate hard our about our equity on if not expect, thought balance a more, by much enabled to us put equity offense. sheet better

to be clear, And the into our be get will core our to back goal Xs. EBITDA and is debt to

Xs if We diluted raise high and year-end, in by low be basis to now projected in post-equity a Xs sooner. on are not the the nonearnings

the acquisitions us, it's of our both repayments the non-dilutive we liquidity dispositions, for to whether leverage-neutral now sheet we using the balance sources accretive retained team needs a of it that common or capital external opportunities or available of pursue book, are this to And basis, the earnings growth our are from from private and business and recycled capital fund diverse capital. equity external efficient loan issuance will has on seeing. our all aggressively that Thus,

in interest the mark-to-market spread with begin terms have downward vast floating exposure majority being to fully overall the few earnings predicting. interest we upside and to rates related opportunity both in that to exposure in And of have rates, that in is the our of on and when base and a trend rates. meaningful maturities the stability already the the next funds and sheet, no highlight Lastly, market cost. With is to rate well are balance our some hedged I core want the potentially balance the years, interest the earnings positioned our our over we related sheet if

generate with So balance several are portfolio, it we in and path year with with growth the about continued And along the to poised summary, next best-in-class. a back to the be expectations, the we non-dilutive internal our that to starting the excited in near-term sheet, a years, strong the are get we acceleration and in are street accretion and/or from potential our it's external for along in XXXX whether growth. to

now And with questions. we call that, will the up open for

Operator

[Operator Instructions]

comes Linda Our the Tsai Jefferies. of first question line of from

please, Your question Linda.

Linda Yu Tsai

of sustainable portfolio the terms In outside this rate why? XX% same-store quarter, growth Street and in the run this how is

Kenneth Bernstein

I to numbers why portfolio. don't John, touch you macro the these then perspective. a And talk more from let specific about as I'll our tailwinds on maybe

John Gottfried

mark-to-market. about you before his actively spoke just leasing the of Linda, that have you and remarks, our and space up model, chunk team in are at prepared I to our it's we when a we're under A.J. of in look good And half back factor And X% my little contractual then that great portfolio. escalations the Absolutely. what we getting, a

look So I X.X, X $XX half XX%. a little annually to as of And think million out, that, that's, you to portion when next model that the $XX is think capture we our we years. million business, at that projected over under we that I grow outlined,

Kenneth Bernstein

market that retail I our think follows. others' X continue in ability we XX% our is at I the XX% street XX% I market then for while to capture even hope retail it A.J. high nor from So that remarks let it referred to growth what rents markets and in year-over-year. a street And secular rent do transition grow why that see and ability in mentioned shift. to prepared neither and is to to as poised me expect thus our capture single-digit to of

have As tailwind resets, John I it. than on, really need now think about now Fair is space. A.J. years. X% X more several contractual common. having is supply tenants about need a good that's demand, market and right value you as and different One, talked And industry But components standard. to touched you growth after fairly also what tough

then if the pay deal Second, have need have only mentioned you tenant well. more there, right to to sales. their Tenants are And to strong rent can as A.J. and have you sales that structures. continue finally,

You capture need sale, supply rent have the have ability do. to strong right to rent have that in and you we a strong contracts growth demand, to to the

ability Final oversimplified the XX ago, we think an sales point you last so-called about years, migrate use didn't. The was online. the years profitably migration be retailers our by a XXXX, going to is, And to around to but profit it what occurred, entered variety clear sales notion why that becoming the retail was be were to armageddon. of was of retailers their online elusive. now? the profitability driver XX that was able And Well, the into that if to online as main too almost going

That XXXX, today. growth. everyone recognizing they store, the of and and a then means whether variety alive. the driving What luxury department tailwind importance in But on executing And certainly are they're discount retailers COVID and aspirational it now of thank goodness off-price, for this stores, what's because saw kept between. is retailers online it's long-term sales that in

Linda Yu Tsai

most you then types but are referred to external of sort of opportunities what for earlier, that as for And this growth? compelling relates it color. to Thanks you

Kenneth Bernstein

really point entry can later. But good we into as be a what see get point So and rates, an so -- which there's that company partially areas street because because competition, That's also excited growth, not probably interest see to that refer forward tailwinds open-air strong add internal a a on increased looking think to see seller think combination we're We're on cap We willingness. for or ability on of penny adds I a less other see that about to here, what is because to up. capitalize there partially and we will opportunity of XXXX the are size penny artificial I now we diminish in in an the seeing to But I really floor now there, that. our significantly we at retail. nice most and of I and retail. growth outsized that terms some

Linda Yu Tsai

baked Just whole and at end last for kind are the portfolio? low and of for of the high high are one. low end? the your assumptions same-store And growth bad debt what What X into assumptions

John Gottfried

Great.

I on the think rent first think, Linda, I just side.

when So to end team a I get the where think forward as chance of our leasing if some to I in some hit pull of hit is space upper have remarks, alluded assigned. -- expectations able we to my we

signed key beat our but So do think the is case the not only -- on I get that's that base leases we expectations open.

to deep the try I professionals So think that we of a commencement. have accelerate team very

between to lease our Those time property is signed, it. So that areas sorry, where leasing, -- execution the a incredible management beat commencement. X and the accelerating to strides on getting signing from are we team making

I've again, in on we terms collections, seeing I of downward we're over up last then it within in wake a X.X%. we're seeing any some to expectation It's disputes. not year thinking of and credit, we say sort guidance, each trends. put saw going month, our particularly of have in credit. But just what deterioration would And conservative, is have where We're not

of than is which needed points of that reserve year. we rent basis credit last more XXX So in, I built

Operator

Craig of line the from comes Mailman question of next Citi. Our

Craig Mailman

like to capital, Ken. Can you bringing on what of own Just potential the maybe acquisition would partners funds? balance of put and look out following through historical where go here, its the on relative maybe those versus Acadia you see back theme partners use kind just fully sheet

Kenneth Bernstein

Yes.

different what every historic our on utilizing in sheet versus while And point. deal dependent of debt good platform, on our look balance a capital, and our investment management very equity are be will it sources. economics outside cost obviously, both So starting probably could

the issue the where up. when will pricing will show be So and right

balance earnings terms in balance on sheet XX% of assets our and clear I that from Craig, sheet consistent portfolio with benefit shareholders is on will me accretive think are excites what acquisitions that to Here's retail. of of our street be

on of who, floor The explain time I to or them, up competition by are it a for either me to times in going-in be often and what think -- of a less as sellers recognizing being it's an yields have couple buyers. exit that as as or probably artificial transact terms that of not There kind is let there might that. good years, these of assets. able I as mean after not is now them

general then in general, a lower talking by is and yields investors. There other I'm borrowing private about and institutional in market in to retail, costs, hesitancy similar retail for at is hesitancy costs. investors than there a enter For borrowing

true trades. that the is Now for most of anchored, and probably crowded the supermarket that's

true not out. that it's our we're pencil an as a should means in acquisitions for variety that components the align. which to so there twice opportunity. stars seeing rate on-balance what about it's And sheet for yet, street for that retail, portfolio. feeling close have creates what And as well. interesting The of other supermarket growth They're have And real but

to tell of Then utilizing would in as I ago, thrilled you a year X meetings institutions about institutions. after take variety position that to last seen to recognition What refer they were not years. I If we've having the and that want it in and terms other They invested were at in shift, of a funds. in were is partners, what a talking different X a we're with we partner to months retail a now best best-in-class retail curious. in many hearing

I acquire accretively then unable sheet, utilize continue of of are pools retail, balance to balance with have to grow So to sources become street their to those distressed what be power if what or the complicated reason did with being restructurings we relationships. variety to if them then not we viable, successful. partner center capital of for do on sheet be we've will Street look Fund a situations, we kind to you V And acquisitions, are been other retail absolutely that some in we our every retail workouts and solution irrespective on And we highly asked might by us or of expect of extent debt, to transactions. that. special whether debt

a moving bunch even all external I I'm you cautious XXXX, hits am in I of pieces, thinking because but you So about tell was whereas it put predict that it's and to dependent growth. together, about on which going willing not so to

am and from I what investors in pipeline, excited both deal we and see Now more the activity the sellers. much on based outreach our

Craig Mailman

you're maybe markets, get in don't any get you of And what's in terms months, next you'd base over kind new be previously? the And seeing you true if than don't to are the skis But were to given you disappointed over pipeline? I what guys XX that of in Street to there your XX today the to especially helpful. on be level are closer from potential That's that a on would acquisitions. guiding pipeline, want what

Kenneth Bernstein

Yes.

very skis. not over for get too very, our be to your us request far want of respectful I to So

about. But there So A.J. would John, I just And case. our if Levine X is with growth was that I that. forget talking said disappointed in the think very associated be earnings is don't what

We growth. good have really internal

do don't prematurely feel need it. something a I to do just So to

We disciplined. opportunistic, remain will but

mind, management $XXX million, $X.XXX think sheet they're going $X.XX forward. keep be acquisitions, platform And the of every And million can $XXX historically. where add or case our I on to in per investment million $XXX balance done that through could

if sense. So it could really move deals the make the needle

reasons It kind new markets, was I wins. their zero-sum that we a to to saw a out need variety own Nashville turns here's say, There are what It out what case. into store not format. of and SoHo terms for referred to they retailers that our recognizing of let's turns of control In heading key out. more are the loses and of and, just there markets be now feared game COVID

variety in of for geographies. this of variety and a seeing You're a reasons

component be location. desire there retailers, they're And more -- for is wholesale own their them, doors. One or otherwise luxury can recognizing channel is have store of lot an whether the important to generally the are there a and an important shrinking, reasons is fewer are still just of department while

So with variety are few the locations mentioned now of it, " location for there's build Tampa, strong "if few We those plus that are like our around. them. seen saying, need them. on the demand. A.J. other years, demographic go a were over last of want we've just to be X reasons, retailers a variety you there. Nashville, retailers migration because could a These of we I We Our will with come. a that picked experimental, distinction, added that a I like years ago, some markets

because add you the at and there is those the the same than SoHo double strong is to back. time, happy in A.J. tenant So as coming more I'm demand Williamsburg, mentioned sales Brooklyn and down Madison Avenue

be retail. friends, but old So Street ones, to for expand new us keep make to a way seems to continue logical the

Operator

of Markets. Capital the Our Thomas of from line KeyBanc comes next question Todd

Todd Thomas

around back just to First comments go wanted question, recycling. capital I the to

think both I that and that activity from core some commented you of from be might the funds. the

portfolio whether assets over really capital in about drive you over marketing curious that sell think be You will non-core? thought property time. much to consider process you core just sale? sold the needs haven't also the much is Or and the you're how core investments how decision time? And I'm the to for and And

Kenneth Bernstein

Yes.

So components to multiple that.

X there would markets. than are overweighted general, time Let's we XX% portfolio over that And stick that XX% we the less core to due those look some. those are core X call growth to street, And other the overexposure. to first, as or Todd. with urban. But recycle likely markets. in there majority vast were that that and mentioned The have probably is of we The are trim see

an as out Then have want kind our to in are general have those would execution to be different for that participate solid and agnostic investors open-air suburban, best as when inbound we components XX% for of I've to partner, are best within the we we we is of or because the core operating who is assets what said, there retail. found inquiries been traditional in portfolio, that want think us we've and reached

also making team just terms more of top the on game. And on our of side be so bringing advantageous sure may stay that in can in capital both economically, but

a So If right it be is sell recap are but could assets, there of consistent reason the they long-term growth, lower no with at sale well. to less could our and be some strategy, as time. growth not

shed I sell want of in out, pointed " be saw a you to "Hey, the we a of been seller time tough XXXX, said, few you yourself. years. I friend So would to say an lack called I'd brace and it's Thus, asset. of a haven't assets. say In volume last the

increased is feel and Now maybe it there. we have the to investor like XXXX interest, spread bid-ask can transactions starting declines

are we there traditional and might the have More translate. fund the of of the through have to It recapitalize It of great and saying, assets also with just IV. increased that. portion that interest, fix we platform, also importantly, that portion be would dollars some more wrong how is we investor see Fund buy, couple in way promote Fund come way in. some might though, of income our billion there and translate to investors of But some sell, nothing about old V,

those conversations terms there. of transactions we're potential so And having certainly in

have the for That's We a or what don't driver We're a capital. necessarily Todd, fair amount of not information, to. key not shrink be may looking company. to may of our

sense, we just We to will shareholder create numbers here can that those are ways value. different extent make are saying, do we the And it.

Todd Thomas

results whether there's and can vacates the Okay. of any an in was quarterly there's vacate painful the assets update H&M guidance. recovery if just Michigan earnings on there's really run anticipated, Understood. you And I assumed as on XQ some Ave, I past rate mentioned the movement and expirations the then, think that John, other that at activity in and you're of no the those and about you But North the near there status throughout that NOI in term, cadence we any impact guess that could year? think provide

John Gottfried

Yes, absolutely.

it I the I'll some early then -- early I on and what A.J. signs over to numbers, talk about don't street, why So have mentioned through him. exciting turn I'll of I'll the walk things

think us. I is pain the within guidance our highlighted behind So that XXXX

So short-term lease. very H&M is a on

that's effectively into year. So they're baked this year, be numbers. is they they early are later month-to-month out moving space. on this but -- new Todd, Verizon found They our a will very lease, a

into quarter, a but they have they'll I our that's out, bit think fully So the in left and be numbers. little baked then

A.J. Levine

I Yes. I a Yes. mean little has add to Michigan that what Avenue North is go. to would still ways

that up tours aware has last in significantly behind had that. demand, yoga the spillover incredibly to success the course, over, we're the on that's opening level the X occur months. inevitable avenue low X going seeing on to result up, XX,XXX that increased Alo the the very what of LOIs the we on encouraged a back assets, which of Gold Aritzia that saw of opening as of are Coast, of street the high are of feet, the supply we the And there's far and number we've is We a the level not our just onto then, over street, block happening at by

in. form then, I'm a a view as retailer Chicago course, to some of in Chicago, meet doesn't yet that they be market need and fashion to -- or that So

yet, So we're a and we're not but recovery very quite we're of certainly sole level seeing. by way at encouraged on our what

John Gottfried

said all in reclarify not I'm is Todd, just model. optimism, our what of in rooting A.J. remarks, multiyear to that for I our while

whenever upside. Michigan North we talk on, going to So be from about this point it's

Todd Thomas

really those just still Understood. I still quantify, guess, Yes. the Okay. course and might any of year? NOI come -- ABR assets being or during there much to But are how way the is offline is how much John, generating

John Gottfried

it's I the throughout tell number, right? but minimis. don't not their H&M's is X have And I'll taxes, exact the So you, of that's covering de amount the on top Yes, insignificant this head, of year. my rent

Todd Thomas

Okay.

drag a the already run already that's it's on So rate -- you're today. earnings, in

John Gottfried

right. That's

Operator

Floris comes Dijkum of of LLC. Van Our Point next line from question the Compass

Floris Gerbrand van Dijkum

different occupancy. you what a time could physical of kind an give of also for upside us Can remind leased. is of you the remind was think your leased where obviously street at? everything. currently potential on we paying can actual is in I portfolio peak XX.X% Thanks percentage look or only, us, and And indication color What XX.X% us the think, occupancy I or

Kenneth Bernstein

why fall is in numbers. criticize space. for But get probably quality There space now let why different a the mid-XXs on call, don't When than those get different markets time, there's takes to demand So the looks think won't right we we're time I is into I translates at close space, John, to you while it for at aren't but open. we Floris, peak But say time, live me Floris. the John more because can, pretty earnings A.J., different quality you there XXX%? to give that getting numbers? start, And the always Obviously, a we spaces key spaces. through occupancy that

John Gottfried

Yes.

Floris, right were what XX% are in -- spot I occupied we're recall. on. about to up now, physically and we're mid-XXs from we the where can We historically So XX.X%

we run my -- -- after to have there's And does in were that we a to go. $XX not ways So still prepared to room million million remarks $XX that.

So those are pretty base well case assumptions.

Floris Gerbrand van Dijkum

street located. Maybe mean X is you and upside, significant $XX I is average on math, that mean I urban well. things Yes. your it I if do vacancy rent and some mean, curious bit depends where the a it as I appears. there's little on was

did holdings that, remarks in your but the that? I luxury could about his quarter? expect you would for signs yet, of maybe there's What see do M as your have particular in happen. in and think -- impact mentioned Street, And in that on kind well terms there no that of you what You that Ken, A.J. view, about potentially something

Kenneth Bernstein

So confusion. there is no

There there was when is A.J.'s still We let's and up And did corridors. predicting if say, But than thriving didn't, Williamsburg be can shows up you if would without point luxury. seeing, we point simply Place, broader great. are Chicago. M if pure in luxury not limit luxury just shows it luxury Think universe Street. on our currently Armitage is. though, I Williamsburg, But Think think are then M our great. to it even luxury a lift. be let's of on is up luxury, have shows would Street, not just of as Avenue Certainly thoughts now in as where Melrose that additional

Floris Gerbrand van Dijkum

square Clearly, in prior are think above peaks, head. growth. tell little Great. particular -- was bottomed, foot. foot foot today? square where signed of massive A.J., top so more to maybe, you And or what $XXX out even are do bit close around the question little my think rents color last market? being the give it or was, $XXX seen off per actually somewhere where then a I SoHo And in levels market rents us you some square $XXX we've that think, a I Could a my could you rents Obviously,

Kenneth Bernstein

Yes.

I'll really than it's space So by it answer A.J. to emphasize let space. other

$XXX, do are question. A.J. spaces has $XXX, frontage. can it movement the it why less trend that idiosyncratic. a so with across are That's answer in Some the But more some is or is board, Floris' be happening to general

A.J. Levine

are. of the do best can. a mean very markets street nuanced it's as I Yes. lot a we market We'll these

amount is a certainly of bit the that $XXX are There There to question. to quickly run. whether it's further So south room certainly of a or or corridors are west $X,XXX have perhaps number, are prior a a significant approaching little corridors, further still $XXX loaded peak. that or pinpoint

still pinpoint hard of answer been an but there's growth the to of ahead growth value has there's enough think that us where capture. So a tremendous, and there, we lot there to

Kenneth Bernstein

at And let me take X more stab it, Floris.

with are spaces dark done is if days during it of halfway $XXX and see starting equal, COVID, peak space but the $XXX some prior all dropped prior room run, not certainly at was we're to to than leases getting and back at again, peaks. So the to more

board, I to halfway would well. if you the if that would So we if acceleration. say write there want fine, halfway we're to it disagree. back we're But across as a saying been are there, you peaks I than disagree you're has And significant prior less

Floris Gerbrand van Dijkum

rent correctly, SoHo Ken, in square So I make understand sure foot. think summarize, place in is just I to your that $XXX a that around average

to if market your a -- that assume So in foot peak it fair somewhere to $XXX that halfway would rents range be back you're prior are now?

Kenneth Bernstein

With already all the said. caveats, I

the executed would on, with you team at that and that recent his of some If A.J. have look be consistent your thinking. spreads

Operator

comes of of Ki Bin Our question line the Kim Truist. from next

Ki Bin Kim

on little kind just provide? Any I bit the thought. question, it's lower than you G&A First commentary can a guidance, of

John Gottfried

G&A say You mean to guidance? the

Ki Bin Kim

not to typically it unusual. is which grow, Yes. projecting Basically, you're

around provide any just So that? commentary curious if you can

John Gottfried

give year. it down basically to or we're No, last Yes. $X.XX flat $X.XX

So efficiently. nothing dramatic, looking ways but to constantly at more operate

Ki Bin Kim

are currently capital the And institutional Okay. front, the period. your funds not promote in on X

getting thinking secondly, to Are venture And pitfalls. some partners which or it about promotes? when closer funds. tie might fund a realizing some any and properties we of a Are versus you So new maybe you're possible questions. format, to how individual about joint talking actually you restructuring have couple earn promote

Kenneth Bernstein

yes. and Yes

more add that. to color to little a Now

where Fund the assets III, promote significant could ripen are of close very be flow very in likely would -- in be next the We getting Remember, disposition. We money returns. we both for to process the liquidating assets, cash been of those we've for clipping cash that mid-teens V are as Fund because there. flow. close X the

or sale structuring very structures very, a come multiyear accretion. up enable traditional of so lumpiness consistent with going that promotes funds. our provide recap could the likely going in that then would we that forward, more And forward, also than And would to

both. you're spot on So

Ki Bin Kim

unknown an I of And reserve? your could for in Great. general a if third Okay. how of move-outs kind guidance versus much points, accounts squeeze that is bad XXX here. debt The X of basis known

John Gottfried

vast, majority the is say vast unknown would I vast, channel.

Operator

question of next Our line of Street. Paulina comes the from Rojas Green

Paulina Rojas Schmidt

Where retail, Street for You felt assets? the attractive going help comment? providing growth do us rents? have going Street on this assets the about you in those some above for yields you market in talked given and around expect below see yields we you retail material numbers or Can

Kenneth Bernstein

entering Yes. that whole goes debt, your on executing what borrowing does costs. probably means to at below marketplace you're private back in hesitant X%. about issue seem at And that you're mean? That Well, good really the this general to mortgage investors if

in that if And align floor cap environment, I'm interest rates but to of everything and and it historically, different what What's growth rate grossly about that there. so that's but when rates, and if kind going of kind X% from crazy yield. with the does oversimplifying, is but at add artificial that's seeing, historically, starts grows everything you again, tended we're

avail at X%, and buyers are for And patient seller, may public in real, markets but a examples people to the so There can upside we to like motivated us be a and that, seller, closer maybe and a going private who Xs is market. that the where break selling highly X%. asymmetrical both will of be through think themselves that's create more floor

Paulina Rojas Schmidt

mentioned have And see rent -- open-air retail retail more other than you that growth in formats. you Street

have structures segments. really different I of -- X in you're first, fact referring to class? that to you're And in that with and this to sure your think not wanted street the you be retail, to truly growth comment, this can And would market on rents referring historical were values. if more there the market lease you rent really the So make you aside rents elaborate of capturing you more upside why asset

Kenneth Bernstein

Yes.

let's separate it is nature. combination So contractual growth both a the market of because rent and

and So value part that whereas there rate of growth our growth fair no resets street bullishness we X% fair suburban in our resets. value less, are market growth -- the get in retail, contractual is contractual our the is market and

decade what is of some are over So structure it sales the to rent really we how not and this good your But structural. is there. the supply if experienced doesn't matter demand is and last

realities have you the matter during didn't deal that had COVID, very time that structure, certainly, difficult it you with so period. of And to a

to it that are otherwise, on what A.J. these now, retailers markets, Going touched variety a they for supply-demand for want of saying is forward our reasons be there.

because afford can they there be of to sales. their Secondly,

sales to lift some And the deflation then these it migration past the old-fashioned was sure towards got than second of get to for sales. the inflationary rent period, but our Now better is stores. good we've inflation, is type of which

next over of recognize we are pay they're in more but like to than profitably component able And that air saying rent other in X, contractual supply/demand will than locations. growth strong would be that the strong always growth more means XX mentioned. X, portfolio strong the in what sales, to, retailers X, So we think that to years, to open and is combination, we less these our rent, they open happy our

Paulina Rojas Schmidt

is rent the a into or changed? how you sales historical Can around it context, to put where has and comment it

Kenneth Bernstein

Yes.

business multiple the retail So because fact, to went would sales retailers so armageddon, were were getting in higher on with online omnichannel the to much shift often driving And they beginning attention of in online. sales who the their that. a

a getting and all can they level. retailers sales What will that where the to rent teens they're that, to that achieving of is open what comfortable of otherwise. And then me, more and these luxury well they now passed. here's into XX%, And some help can we're to quickly at that than again, I is need has a recognizing high off and A.J. and it get be than probably era sales. restaurants can retailers more and aspirational think right it, are XXXX. stores, be comping level lower they're to sales differ we're to rent achieving And seeing that it

our we of is, their growth see moderate are the money where these locations. sales the So by of up. of even mouth recent year, is over acquisition putting showing The some when retailers best retailers their last evidence retailers

get. So looks what if want when like buys location, you close that to an you retailer know infinite lease a that's as as

Operator

JPMorgan. Our comes Michael of question Instructions] Mueller line the of next [Operator from

Michael Mueller

I about be of erratic. XX% Street different portfolio about Street overall the can is you've know But portfolio. and spreads think occupied, the parts I talked rent

signing beyond So about can about so you've to for you that additional lease talk bit lease-up? think that a little how rents signed new far? levels And

Kenneth Bernstein

So interest this that tenant A.J., of up [ well why for talk the about we're don't even level spaces the pricing leasing as as ].

A.J. Levine

definitely Yes. space the tenants definitely supply. Like lease. demand have outpaces in I I space to than said, the more have I interested

see product Yes. remains we in streets. expect great high lot a forward. on There's So still our significant from leasing of really to moving out shouldn't volume a perspective, that slowdown Demand there.

John Gottfried

to just tried because in that have that next get well we market out are to can't -- the where of we over -- I lay remarks years. And couple Mike, Yes. in next the leases we below our

them, we think us guess can't really but to it if we help on I could those get doesn't them. So

think rents I out tried through what where I said, think we capture do a basis. I to on here's dollar and a and So that. on is put lay can and we A.J. lease-by-lease walked amount we

that market. get mark X $X expiring million back, $X the over able years, we're think to to to dollars incremental as million that's next the we So leases

could quarter-to-quarter, revenue. seeing but change period, period to we're strong percentage the And

Michael Mueller

million $X take to that XX% to up $X million, will occupancy from So that what? your

John Gottfried

it -- XX% to XX% Call the to gets sort the of probably in range.

Michael Mueller

to go XX% about from to that's time And to period XX% XX%? Okay. what

John Gottfried

Yes, call it, X years.

Operator

Bank Our next question Securities. comes from of the line Jeffrey of America of Spector

Elizabeth Yang Doykan

to It's wanted in clarity what if $X.XX have Lizzy more for expect all on that on of for out cadence the throughout quarter, to Jeff. on I the each you're the to we willing to confirm just put now? kind FFO $X.XX of is year? range Or

John Gottfried

in, I going Yes. since of Thanks, it's in say going to cadence those start our I Lizzy. kick portfolio that's drive be as the because rents rental core to my as it. What remarks, is would mentioned

and would say of the half, be lower how $X.XX. I I in back XXs of then we'll So half suggest the XXs we upper the that make would year if the midpoint -- the to sense. first get

So again, not cadence little at ]. we're we back-end a be back giving guidance, online, just talking loaded, when full it's end a [ quarterly rents to but bit get of going coming but the the benefit of

Elizabeth Yang Doykan

the there's accretion just of when around A.J.'s checking leasing to same-store consistently potential for that sound City maybe too into Okay. Point, remaining maybe Or at talked doesn't beginning gets the any you've seeing the discussions it expectations the activity just pool? you're on if or comments new about? that timing changes space to much back today like Great. gather, And going but the the

John Gottfried

balance maximizing I value. we're a strike quickly, about between long-term I trying talk I'll always Yes, And to mean leases take time. this that. Ken and signing the all

gains. remain and coming of the things but held Of course, creation that's coming lot scaffolding all that that I back we strategically online, it's part residential focused down, a on critical the space, why we've the long-term Live mentioned, occupancy that value Nation, that

Fogo accelerate perimeter developments a like of some respects, So like we finally signings able those with to lot lot again, we're of of did right, we'll we around the of de recent in a that space with did Sephora, of like these with the with project. Chão. all And do

of ahead So us definitely days City good at Point.

Kenneth Bernstein

make if have And sure right skew comes growth this a XX% be would our then Street what even a which Good. get of do And unless we into would to now, and break the even not and that in same-store to because comes our it online, assets. terms sense the you seeing pool, it it year. in will when City we're with comes the it to it comes in online slated and better it out X% if we same-store come of numbers, other without extraordinary in so Point growth, whether is when

Operator

would now Sir? Bernstein turn Ken I like conference to back for to the remarks. closing

Kenneth Bernstein

I close you Happy started. and to everybody, look with again we how speaking Valentine's soon. I'll forward with

Operator

for today's participating. conference call. This Thank concludes you

You may now disconnect.

Acadia Realty Trust (AKR) 14 Feb 242023 Q4 Earnings call transcript