AKR - Earnings call transcript Q3 2024

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Operator

Hello, and welcome to Acadia Realty Trust Third Quarter 2024 Earnings Conference Call. [Operator Instructions] I would now like to hand the conference over to Alec Aaronson, Development Analyst. Sir, you may begin.

Alec Aaronson

Good morning, and thank you for joining us for the Third Quarter 2024 Acadia Realty Trust Earnings Conference Call. My name is Alec Aaronson, and I'm an analyst in our development department.

Before we begin, please be aware that statements made during the call that are not historical may be deemed forward-looking statements within the meaning of the Securities and Exchange Act of 1934, and actual results may differ materially from those indicated by such forward-looking statements. statements of most uncertainties, other call, recent with SEC, variety in those periodic October a of to the company's as update the the Form forward-looking no XX, to XXXX, risks of company including and disclosed filings the and Due date only undertakes this duty speak XX-K and them.

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

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

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

Kenneth Bernstein

you, lot everyone. and with Well quarter had let's third productive a very a active Thank Good discuss, in. We done. jump so to morning, Alec.

As we've critical of X there discussed calls, business. prior are our drivers on

from X^ growth internal averaged importantly, continued more delivering release, have past X had our is growth significantly see our Most front. can will from and on The first years. another NOI we quarter see over Street earnings But continuing. we Levine growth, this for details most portfolio. A.J. continued this success strong retail strong our coming provide same-store on the as you

on want grow these steps key then this to is the our kicking and the platform. sheet, respect balance driver investments both driver Gottfried provide so that we've let we which me our will investment This on-balance the them. And into through few our our discuss The management us important second driver through minutes external strong John to to a external accretive get and capacity as third with where our growth third thoughtfully spend is a our to portfolio. is well liquidity liquidity initiatives. taken metrics year progress sheet growth acquisitions, gear, as our maintaining provides discussing

sheet First, corridors. is here activity with differentiated add portfolio our goal our our portfolio, our on-balance are core assets to with for to in dominated properties Street high-growth consistent shopping critical respect that highly retail by

discussed, sheet on begun markets. Starting properties move to high-growth closed are acquisitions, portfolio. to retail core acquisitions under or acquisitions to contract conditions quarter our offense that after last amplify we've are to focused As to in enable value asset that portfolio. And existing challenging stabilization to long for backdrop Acadia finally several our peer-leading us Street us This continue the allowed are must-have facing on has to a and $XXX years on-balance of market our and of to REIT capital million for shift. accretive of earnings, and focus accretive total growth after deliver industry to-date, we of key in and net us have enabled have a full specifically, general for we

here's closed million trends leasing couple on over seeing the them have quarters. these We of we're transactions. closing with in let color the give approximately of of corridors, balance $XXX more quick A.J. the I'll but overview the next a

Bleecker the Manhattan. a Village the closed on announced, previously X retail West Street in retail we of corridor property As portfolio along

reflects contemporary Bleecker brands several our to and younger a Street high-growth years, the many advanced the same emerge landing Over our last fundamentals that as other curation, seen same for spot we've begun coveted in of has Streets.

over to significantly ability the time. rents and yield going-in attractive an have We grow

Avenue as last by that has Xth must-have assets acquisition several we is Williamsburg emerged in on have our demand seen Xth North Brooklyn. What Williamsburg, expanded our X the in tenant with Bedford Street and performance Williamsburg. North also continues grow. a buildings to in Williamsburg tenant for have over corridor retailers growth, We adding years and Street since leading

and of attractive and returns. that long-term provides with leases opportunities there combined redevelopment investment us with lease-up a below-market Our is combination growth

tenant clusters on We the building have by in This presence is & building building that further This with the also Street us substantially Olufsen. Bang Green, will acquired X corner market Street. of our now SoHo adjacent currently to corridor Green in in the SoHo. contiguous arguably a on X enhance leases demand we below occupied gives on own Green addition highest Princeton

D.C. early assets next of in in and we in we'll contract, year, in under in anticipate primarily approximately we Lastly, the close. more We discuss as and detail $XXX SoHo. Georgetown closing balance have million transactions these them

and In also north pricing, the pricing mid-Xs cash deals, growing years. going initial to mid-Xs yield of of we're have GAAP accretive these the north X% of in discuss X yield day terms a of growth annual in not with compounded few rates cash the X% to while next acquisitions an individual in a with yield

accretion, and In growth the given amounts our earnings here. case can that's relatively external terms certainly of small size, move past, really said in the as of we the needle,

on core discuss expansion his last few cost. comments, and this I'll an begin further these let previously in $XXX further is growth X% million upon the plans A.J. provide long-term our closing to stabilization. years yield expect portfolio to our then should that stabilize over we acquisitions north are with patiently have but earnings Dallas. watched or we a slated discussed, the and acquisitions, XXXX we have basis X% been recently of along in is significant These expansion, this we targeting for goal XXXX. Then As on for to through of accretion upon contribute on some in approximately to announced assets Henderson the corridor time close to with million $X.XX out demand that earnings Avenue penciling X% grow right $XXX every on-balance now which of stabilization this of and transactions of sheet over for growth and exceed meet growth leverage-neutral acquisitions upon

contemplated we could are we approximately X% While an this expansion excess stabilization. contribute cost upon stages, long-term in full this with as incremental the in million, of doing incremental of expansion assuming $XXX earnings do

accretion up investments on-balance the can discussed estimated this upon we nicely relationships investments, capital of we're investments. for over the sheet to a sheet very our these opportunities us X% platform of sets accretion few I complementing management variety on-balance stabilization institutional So broader see investment the plus leverage next where continuing in our years. Then

formed Cohen in we & management previously center Recently, plus community the retained interest retained an in of Steers, partnership First, had announced as the Tampa, potential. in for we a an we with well Florida as where upside completed $XX open-air million. acquisition we a new July, as investment approximately

global and alternative into we'll the opportunistic bucket, on very color more asset that manager investment we and this, to million a close potential are it finalizing for approximately Beyond progresses. a give fall as would that $XXX

about As to investments, stable approximately for acquisition just to pencil grow recycling as we for vehicle, see for where on-balance prudent of more equal the is what $X.XX meaning stream have expect this the $XXX we sheet $X platform, stability. metrics capital investment per now, million and roughly a we accretion the probably to a it's management buy, think our and fix, this but But profitable volume. about maintain as same think the gross opportunities investments, maintaining now, in platform billion to our remain platform revenue goal today. We in AUM sell current may of

new strong So, looking a internal and investments. flexible our ability add and additional value growth, strategic by sheet, driving bullish maintaining ahead, by remain adding by we very on to to through continue growth balance

including; we that Henderson are such opportunistically and platform. have and consistent begun on redevelopment on-balance we Avenue, assets our today, then investments, acquisitions New what also with expansions high-growth our accretion sheet that own adding to as from investment existing assets management of portfolio

on I'd quarter, call So to for turn to for to With they the all internal external incredibly before over been you. stars so this strong we team the not solid call as growth, Acadia remarks, patiently metrics sheet I'll hitting that, cylinders. With work, have turn and did. A.J. for now their I align; hard thank the like Thank to A.J. growth the finally waiting his we impactful and over and are balance

Alexander Levine

Thanks, Ken. everyone. Good morning,

go a over this we to morning. lot So have

internal start finish we'll I'll off on update with our exciting update an growth and Henderson with things So, an in Dallas. on down portfolio

million. growth, already and So, increased SNO the more the of XXXX quarter, in signed signed record internal another leasing a $XX a to of into $X with the advanced exceeded million in we've pipeline leasing have ahead several right slowdown, with no third negotiation. And stages volume of and we jumping we leases core leases, leases total in signs of in of us. We've quarter

around making favorable and where past, to and continues informed, data above profitable our where healthy and the they In can where relied performance time tenants, any that which us And sales year sentiment more More available Streets in the tenants, tenant Georgetown, with which the tenants with Avenue, department Street merchandising reflected along the afford signed the with supply-demand direct-to rents over concern more open like control to short-term over stores that turn them since XXXX. drive very includes with team a that XXXX. to contemporary narrative and have on to higher quarter growth. A speak our continued have customers rents. clearly high-growth Rails, #X to pricing the contemporary they M dynamic the they than healthy allows tenants to volume allows they on play the know long leasing they today's in the out and store. A around when clearly control fashion telling interact very operate Levain both over any that's cluster like leases grow aspirational. productive SoHo, fundamentals, well control retailers. categories consumer we historically Bleecker and DTC and better create And continue on may for to Portfolio. DTC other priority retailers our relation Streets Street And rents allows have in decisions in remain third in last strategy sales. Bakery our XX% were can are they We've newly that Armitage, on to with Armitage to to spreads. with XXXX XX% they're the increase with terms ecosystem disciplined where continue a double-digit to and positive our will tenant, to brand brick-and-mortar on our tenant, watch better stores Streets, our outweigh our is or we better -term and remain increased is and how tenants, luxury, where choppiness, drive consumer. That focused to at new to It pay. their are improve sales dynamic, including wholesale and time, most advanced Williamsburg, on acquired at of In and dynamic, this

And Rails long-term the merchandising, on a experience of on it that from Street past away we a a been is market up our a in to terms the Streets Williamsburg new a encouraged our add of number few word, for for XXX Williamsburg negotiating we're of seeing strategy. approximately drive it's expect square of activity elsewhere. which in street. We've will in an rents, days. Elsewhere doubling insight in continued North with for Michigan have existing M Street a year-over-year with to have and X,XXX on wholesale for interest curation. On another as Street exciting of just entire new and lease, presence Georgetown, double Boston overall actively a the has who Michigan, coming floor firsthand Mango Bleecker north XX% tenant new leading the and already towards and by us has digits benefit SoHo, growth space. are and direct-to-consumer the in on successfully ours to fashion happen includes internal recent and markets in we and into new which lease depth Coast, Street. rents to at Street Avenue, XX% expanding retailer M traffic additions that lifestyle one on and And Walton on again we're in especially add SoHo the Newbury that increasingly a SoHo, this brand entire future are that Armitage continue completed growth. In provide in Williamsburg, are seeing feet to layer final quarter and In the we tells Gold shift who tenants sales signed we're many in by of like building, with can blocks at vacancy York-based fashion of And just and Street will the ground and X,XXX in F&B And will approximately New since and encouraged XXXX. down a to fuel like and M component up a the our building, portfolio, including another fashion entire the streets high-growth Levain, to signed for performance, drive brand. both lease example, and we grade the feet Street, we we and markets shown our our they markets Streets, like contemporary seen

of the influx market great today's contemporary luxury relevant year, to Over and Jacquemus like advanced and brands Staud a and Kate, and like Zimmermann, most see the last Totem. in we've steady Madewell, continues Valentino, brands alone, portfolio our added

of Green and grow the By market can On a XX% Williamsburg seen to alone. for like Street the block already give This continues firsthand of taking as under SoHo, in growth the along lululemon, we Bang McCartney over Cartier. Kith market established rents. the those block, the since Spring, see storefronts in XX% for and excited market Louis of has Prince we because we again, that can is neighbors how growth. work storefronts meaningful market, SoHo, and rents seen outpace with years. Williamsburg and more year older between with Stella a history several Running, demand pry loose vintage itself with embedded get is which Vuitton, expirations, rent Now, Sephora, leases & on and the extracting purchasing location coveted in team XX% another to will with over to XXXX supply owned can Hermes. luxury our recent portion that including now the retailers, us essential incredible advantage acquisition short-term of And the has to XX% last most Olufsen an last control work, our and drive leases firmly to and to the X we Alo we've Dior, XX on and brands Yoga, get must-have is

Street. to Turning Bleecker

entitled high-growth same spot Place of we've only not expect Street. And where the Georgetown since seen addition extremely XX% been but it north early demand forward. And more like the several on M partnership in of to And Bleecker, in We to foot where As York's the tenants, Ken and resulting signed and XX%, Street Skims, with coveted over year-over-year over Street premier healthy The brands several Bleecker Vuori, our entering sales Simon at growth and like of market and off buildings in first and last many we're M have has mall new sales by are of and noticeable continue moving successfully Demand to as square excited Sezane, next Dallas. Alo been well Gold portfolio of never Tesla purchasing same entering the XX retailers. Coast. and in attributes our Dallas as the of had sales last as capture shifting from advanced the we're be corridor. has flagship. announce brands opportune we performance mentioned, stronger, on emerged the New Bleecker with Knox-Henderson in Market Sprouts the XXXX growth years away significant have continues Street, from contemporary their our it know a Avenue, at With and Ignite-Rebees, third emerged sales pivot recently destinations. Masinter, today of M was the as that a with shopping X we the story parcel. a highly Street our that for we tight like Mark tenants has rents on in kicked in one tenants curate luxury a towards rent while markets a phase dynamic, clear the landing portfolio see in gravity relatively Tecovas Avenue is innings, demand time Madison XXXX. including the several growth At we that as Warby and experienced already Melrose Henderson Parker, Henderson place certainly new center entered older younger Dallas clear team leases, Veronica least, fully in in retail Beard, great X,XXX accelerate years other to land the and we brands Yoga, to that we that the a supply, Street, shares time, Tristan towards as markets. High for to of higher-volume quarter improvement it's We in many

rough. between seen void par XX% in most open-air walkable Additionally, thrive. Henderson like as where Since a we've there on high. Avenue, was noticeable cluster in Sales diamond and markets was a are that with and for Avenue rents relevant Henderson Armitage on rents but clearly tenants contemporary the are a and could time, the firsthand shopping grow market district today XX%. half today's

negotiations will after incremental project consist SoHo, on vibrant curated retail the the expect Those country, on in be architecturally par of Street updated next awaiting a in appeal emerge of on brands. Upon high-growth walkable Henderson after planning, our Henderson. The is are we completion been weeks like will will same highly XXXX, phases M one on phase Armitage. we and This already completed eagerly ground, our of on the next over the of as patience Now, established the several the retail to to make street breaking phase distinct cost to with project find we other you'll dozen million. designed of in continue with will keep stretches X to Streets. years high-growth with adding retail levels in stabilization. XX street other most as stabilize we rents you $XXX just approximately and and streets retail tenants Henderson have buildings are and of and an more In tenants towards at the meantime, progress we

eventful all, turn to will over all quarter. So, another things And exciting now John. in I

John Gottfried

Thanks A.J., good morning. and

X increasingly productive We becoming key have mentioned, are to had another Ken as us. quarter. things and busy And clear

First, we want our right where balance it. is sheet

markets $X billion quickly, And As up, on of moved equity did and securing opened and us a basis. were this non-dilutive allow debt only targeted we we achieve over the do ratios liquidity, capital. it able to not capital our to

internal core growth multiyear remains our Secondly, intact.

team this multi-year we rents growth along of visibility X%-plus just leasing finally, achieving, And we excess confidence internal layer in terms growth just even not have growth the goal volume, to we our accretive in beat highlight, impact of As both and the discussed. And growth. exceeding is on our meeting to in increased the with X%. external only Ken before continues external that goals, deal of are our but

mentioned, team pipeline. accretive as over bid-ask quickly moved billion our spread narrowed, the were Ken our in As of to $X.X lock that investments up

in full of growth, time when from X.Xx. And total along short be inclusive business, debt So of together, of XX%, by share the spend that period of of a debt-to-EBITDA has starting powerful X.Xx debt-to-EBITDA a a of highlights, sheet. our X poised core debt business to on billion and debt achieve non-dilutive on debt-to-EBITDA combination balance clear, is equity to and basis, of excess stand-alone a lower. a these turn we ratio, In is is of next some the a reduction sheet investment and transactions, management basis, a now in that our GAV X.X strong highlighting minutes the completed fund key both external pieces with which going to our to to resulting about means our these our it. I'm reducing and we turn approximately $X.X to few our with ratio flexibility put is about balance the liquidity to fueled which our internal on

has on accretive fund the the weeks continue sheet on pipeline. no that leverage-neutral lock means day drop support of sheet of balance a doubling debt along flexibility strong to the and XXXX, banking target external seeing. And only liquidity, capital the equity with we few until for the on retain maturities currently to hedged final close over that we do our accretion to million basis Thus, partners, external we our drawn sheet proactively core to amounts have point X%-plus secured evidenced internal each And capacity completed sheet, of not the increased but the revolver the as a several our on bottom quarter, balance that ago, our with growth opportunities will $XXX growth that to during our strength our achieve to no balance the balance we and line. And continue capital X need match that meaningful virtually a in earnings are we we on with ensure the fully liquidity that Additionally, growth which of the to NAV course have our cost it issuance transaction. next we our transact we year and again a facility. our we will years, that the we to by

a the internal reported along reflects on update share, $X.XX, $X.XX we gains Moving laid to rate share XX% excluding out our shares. realized with ago, quarterly our a of few an the growth. which FFO a of Consistent quarterly earnings of run with Albertsons or sequential with $X.XX results, growth we year-over-year that when on along calls growth

to into to taking pipeline. million equity, of past XX% the continue to our we $X.XX the also is in cap acquisition market range fourth months our that representing of for have issued We few fund $XXX the our of we and quarter. $X.XX over maintained guidance, over year pre even this our account Thus, after successfully reaffirm full projected

X% X.X% for for guidance. trending the X.X% growth X% us reported the upper year, annual We to store NOI. same-store which end of to the quarter same-store same of core our towards and has NOI Moving

Street points. Additionally, by approximately quarter, suburban assets during our our outperformed the portfolio XXX basis

signed leasing. open not on pipeline to September $XX approximately XX. yet million increased it our Moving XX%, over by at to bringing We

million signed our pipeline share rata core were core As leases our that as a well our redevelopment City at represents any in Point. $XX as is pro platform, investment reminder, only, it same-store including the meaning and within management excludes

Additionally, the not on entire space million of represents $XX have leases signed executed ABR excludes pipeline as open any not we yet that it incremental that is currently occupied.

team discussed release, capture in several in release, about and of below-market occupied as in $X nominal and quarter, under recapture as a a to we million able of loose of In A.J. the million these of of million $X across space, these new million that occupied. pry is outlined strong the our leases, currently As was regards $XXX,XXX. Further, result outlined $X spaces core upon were $X our our comprised of on million our signing we portfolio, leases. will our million incremental $X the successfully vacant to of leasing cost on had The space at commencement spaces ABR to new spaces able $X.X and space X% is representing of ABR.

of incremental approximately core So this growth not combine approximately X%. million our open million in ABR, $XX.X $X.X yet we $XX we million, representing have pipeline when core the of signed with

of the walk second throughout an XX% a quarter year, $XXX,XXX skewed We incremental expected to approximately million XXXX of $X on $XX.X remaining in contribute of commence million. through ABR fourth and incremental anticipate with to modeling, to those will commence million incremental the of $X the bit $XXX,XXX XX% be quarter, the XXXX, I given the it'd granularity helpful For during to of this the the contributing magnitude towards timing growth, will the half. an in thought

layer we incremental mind occupied Now the 'XX $X.X our years, in of see associated results. In next up in keep portfolio the of our exceed show the of retail And driven million downtime playing highly to out will highlighted we and core that this $XX.X the XXXX ABR of that full our release. expectations. with in Thus, are by continues to the recapture market acquisitions, differentiated and from growth, so are accretion we XXXX in summary, several well net over when growth. And profitable portfolio, for given that incremental a Street our of the with our will with impact we million amounts resets expiring I won't laid several along up our call questions. recent that double-digit ongoing value years out contractual on his line X% bottom has fair growth, that, we accretion, already open but expect remarks, spreads lease-up. Ken the we combination repeat internal powerful poised for strong this in our earnings leases of and earnings now continue

Operator

with [Operator comes Linda Tsai from Instructions] of the Our first question line Jefferies.

Linda Yu Tsai

opportunities you going this I pace the and just of quarter. didn't see acquisitions the Exciting indicative know forward near-term? announced you've happen accomplished year-to-date, is level overnight, but given what of you've

Kenneth Bernstein

yes. we find like year earnings, to the that can to right, accretive strong our feel the deals the to kind boxes value has may is been but provided growth last come asset year, that working align. growth Linda. it's Obviously, to of has but to net accretive that I've primarily the from all outlined, last and internal are tee up it extend few deals, these years. answer Short for over that have the It And check stars overnight, has team you're frankly,

we As highly the feel market. long establish we're good Acadia a retail in pretty owners in public that as the differentiated can Street as extend we position to that,

we this. of, can answer yes, longer the that's do So,

Linda Yu Tsai

how Street if is do back, effectively then you retail with deal And competition?

Kenneth Bernstein

when there no sellers there's into Perfect tend wouldn't world, And a go be competition, Yes. world. any, but it's perfect to hiding. never frankly,

competition, Street for are time other cycles perhaps it's landlords. and professional but are competition So that what's than different this retail, we seeing good thoughtful highly

are And So faster, less can It's from problematic. that move the we capital, given more this do, that. like if that given fact we professional of confidence transactions. opening across the a cost of landlords high us, what is street that our can identify they're level the have we we the we

share fair past look So, forward even this future. quarter, with the certainly our competition, quarters to in got and we we

Linda Yu Tsai

NYC What do then, question is internal and for a percentage high how of view is And York individual have MSA byproduct just John. opportunities? any you other of NOI become or it or an could urban a New currently of all

John Gottfried

Yes.

day I So, not I right say is, the of from long-term And we and is accretion, it's now, in boxes, that -- of the the X NOI, we're markets, I our seeing on to X/X comes to core growth all think key Ken I'll in going it and would New Williamsburg. the But that where accretion, with our We're continue think NOI earnings to SoHo Georgetown, certainly trends in what do and see whether let checks Linda, the concentration extent growing. then, those it's I York that NAV Dallas. think expand and diversify. those about it across

basis. just it's to I but and knowing to So that Ken, a not we to do portfolio a diversified we I think do think strategy, what we is achieve -- we turn I'll set capital need it pretty on of we can our can but where our there's target long-term have, over that our cost -- think where amongst

Kenneth Bernstein

Yes.

best? well States, it lot the by the of we've what's benefit to say decisions with our we're of diversification, and do from diverse, where group would importantly that outperformance I also, Henderson of United agree bode our or is enables And be where perspective Georgetown us in totally retailers. as you of more perspective, a or what broad I of think, that doing highly referenced of retailers a for with the from assets, expansions amongst throughout John relevant today's conversations in because team's right being A.J. geographically a Dallas, growth you by remain said comes as shareholders. does we're So, and our from I But the capturing and all -- to adding D.C. retailers next? in want those Where seeing are making call, sure our and leasing

Linda Yu Tsai

in Sorry, sneaking one A.J. one last for

signed, domestic at international? is look you when more being pipeline the Just it of or brands deals

Alexander Levine

of just the always Yes. younger even for but nice has market brands. SoHo been brands, a spot lot Certainly, preferred mix. It's right? a Not like international a luxury, landing a

Lugano Sezane these a to like in right? notice and traditionally like me and spot and when of SoHo brand to Street, tenants I first see show Zadig international to brands decided markets. in to of is, Zimmermann markets That's & are on right, that example that perhaps more started Australia are start starting what's M think Diamonds, Tenants their was up Voltaire, those is next and great SoHo. Linda, you in go focus entry those some landing a encouraging that.

turning corner. that's So, you really when know you're the

Operator

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

Floris Gerbrand van Dijkum

great. across I is, have or I then Soho you that'd details, as markets upon compare those upside talked and all touch particular us Question Henderson does Encouraging. of as I'm and can be maybe maybe various for you Chicago. compare results. But look of versus other Ken, and Williamsburg on about as the does and how opine guess, well? OCR curious OCR at set some the Bleecker how A.J. And more versus If this markets potential might in give to well. Henderson you Good how you to in

Kenneth Bernstein

you're to assume, set me the referring tenant ratio table the rent-to-sales again, I, occupancy cost just to... let Floris, So, relative and

Floris Gerbrand van Dijkum

Yes.

Kenneth Bernstein

important of has or to very of prior cycles, is to far. over board and sales the relative The more opposed as Right. in last improved top rental XXXX growth areas A.J. has news it on years. in is, fact, touched well so the encouraging line growth excess several the across distinction. X improved One less the

are comfort certainly rent-to-sales confirmed by healthier comfortable ratios to to right that grow forward. at their it. at have peak. now means they us of fair amount So tenants a that and rents gives And to that's that than that room that room where means who run substantially run, very saying going they're retailers And ability are about are our we think as prior

piece or as other now absolutely are were online I'd tenants is kind in of omnichannel whether there guessing the The sales. equally halo encouraging that a is, an environment, past be not effect in would whereas we from say to

more simply overall an we're store the But don't it's the world, and and we're generated locations are of of kind that there versus a having store. A.J., talking that it also why technology, OCR distinctions the sales use different of individual in open the of science better, look benefit mission-critical, at site selection just from the of important. out are certainty for that that critically Hendersons is the in SoHos and the the sales. terms online for they in about sales the Williamsburg? is use look the know less they of beyond an on of much seeing can more that driving and that touch when guesswork, and sophisticated a you markets the store they still store omnichannel Now much AI in great They're

Alexander Levine

speaking, Madison the closer costs are of a rent markets, mid-teens that mentioned, I These to XX% market the you up you're that perhaps to earlier varies So pretty along markets gives like considerably it some we're like to established run. could Markets higher push with Look, in to costs into room at right? younger like SoHo, occupancy in generally what and the Coast, that towards gives pushing the XX%. occupancy higher, purchasing, run than as amount costs, the room Bleecker signed comfortably good think, growth, really more tenants Ken seeing in from right, which, markets Gold Yes. and terms Avenue, which us of we're seeing market market. occupancy just innings, are rents range, those seeing deals confidence of XX% low getting

Floris Gerbrand van Dijkum

like Bleecker mid-teens costs? or versus compare Is to Williamsburg the the that SoHo? SoHo, is terms in And in more is occupancy or in does of it Williamsburg between it how same

Alexander Levine

I'd say to it's pretty SoHo. comparable

Floris Gerbrand van Dijkum

Okay. And sub-XX%? then Dallas is like is even Dallas --

Alexander Levine

that sub-XX%. just leases -- because the improvement tenants are tenants the number Yes. seen, and those those several of yes, vintage Dallas, There a of it's of we've in are

Floris Gerbrand van Dijkum

Great. may. follow-up question, of $XXX you've of sort got I acquisitions My million Obviously, earmarked. if

that, very core, million of you of do for behind you cost I giving $XXX the geez, stems expand the can to I be how But work total from if because of be I'd market to expand and mean, have love big, the upon I last wasn't but the you hear here capital can segment? And the how got suspect of million this much well, -- -- again, the on maybe to the final I Street in questioned, -- put size to if how pretty several pipeline have much closed, you maybe the How billion and is deep market, the invested years, because this also Ken, on that? thoughts fact, you've guess big market partly could over $XXX potential it I little well, stages. part You've think, understand the dollars that. be done capital. But retail a your comfortably. in people some can

Kenneth Bernstein

Yes.

both about different what remain So, course on a could you're the think live for bullish the we that acquisitions a billion or the look that the $X.X we reasons, is right, terms core in capacity needs rate our internal of because is normal team think with. we And what able way like. And investment proving I very platform management of whether can pipeline it this referred bunch business that, we to of and of to, in be amount. a it's digest the is certain portfolio, John to to are digest

check and and opportunity as can growth beginning capital metrics we on, in only in currently extent will are of years of a just the you're established, a rate question we and you There long align. To say several spot our there our capital because I we've one now, can the most for align. in that the are where extent markets, as them do those additional to of that the either of The sellers So that's see continue we we is are are majority us retailers But that cost have you markets the I'd involved active the enough is they or are boxes. growth. to to competitive emerge, cost the and deals must-have importantly these set, been are at we have the markets of have also then those for beginning this to get think past see in both also markets active saying with. because are think stars that now the handful stars

potential of of us. are ability for to them. So don't billions several proven I now there don't dollars assets the digest that scalable doubt doubt I team's

And good. has news a so our here's then it the be for one the because a couple Floris. negotiations, matter quiet was all for of the final hand, it's reasons, obvious pricing. was attractive years darn to just On It growth good but pretty the of

for of very in growth many strong years internal We have front us.

top accretive, on deals have don't bottom line sense, based they're just we So if we what if line make not additive, right powerful if really have not are and the they will growth now.

Operator

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

Jeffrey Spector

on continue would first I quarter. strength in and move luxury if on strong are Is sales wholesale? these fashion combination? years? Is Ken, -- it of the leasing of or I it's know Congratulations don't the for space, Maybe, a retail the away question it's have, retailers demand A.J., result are you you from your say the the for What last thoughts? to couple it

Kenneth Bernstein

free Yes, well. feel combination. as chime And to it in A.J., is a

that of several we experienced headwinds the for acknowledge years. First all, let's

certainly concerns they Then ever so-called Would of Armageddon. all fears the and those would store. around the forward, settle? and the the answered around follows: where like was I First of as SoHo? Now, Retail nature COVID confusion issues and One, there back are tailwinds. around places people mean to was around come recognize lockdown headwinds critical asked going retailers Tailwinds, and

pretty and the to continues line continue for control, to you a anything the our so-called ability as well want to and economy, the still of there lot a fact, out, of but been has have omnichannel, benefit you become the Second all is which top I pointed in the from strong, was stores strong, to market Then fact has bode net it's still economy long as about sales, the where as job you out said to is a and then, a especially not e-commerce as notwithstanding drive can lot, concern that to darn out they connect halo, around drive that? customers what benefit. is it's inflation, noise add these to rents. A.J., portfolio saying a and that. And wholesale into that the stores, store, retailers we critical their key refer to directly direct-to-consumer DTC, shift a need with notable shift pretty of

Alexander Levine

I only don't thing right. data, is, discount The say would the Yes. again,

]. they want [ be land where be open kind to You late to where and their know consumers choosing want of just off that's they're to and exactly air,

Jeffrey Spector

you And a or then for missed my Did if I And discuss I'm and combination? one follow-up deal spread quarter? was John, this. renewal by from this rental the sorry skewed the

John Gottfried

team just It Yes. our restaurant that suburban space renewed. that small quick really leasing a was service

down really So to just a space. single small

Operator

Our question with Bergey comes Citi. next of Seth from line the

Craig Mailman

Mailman Craig here. It's

it's near-term, maybe do a $XXX It for a acquisitions stars the in like maybe year million think to assuming replicable $XXX Ken. million, of question you, align. Just you sounds

to how we accretive of X, think leverage maybe about or to NAV keep to in quarter, kind equity on of the able want on guys basis? You be right check, the you to sales debt green if continue earnings issue and as level fund market capital move kind the should the were this about the of year light. But what the equity giving this deploy mix a maybe of of lot forward, you you for seems and next and growth kind or to asset to annually, think

Kenneth Bernstein

John, want that? on to touch do you

John Gottfried

Absolutely.

to So I at as we're that start we Craig, going keep So think remarks I our balance starting that point. there, and let's our right? in sheet I is want put think, just it where right it,

think is to of growth whatever what we anything where accretive But be leverage going know the neutral. importantly, is. FFO of do, we we going have to more it we is to be cost So know what needs be And we're X. I capital aware day do well very we our

when why we meetings, at that's and that critical boxes. check look all I look think we at those acquisition So -- it's our we

accretive NAV we earnings X growth that growth, day have and today. the that we do as we have So have

and approach is buying going Leverage to So I that it. we what we're the think neutral own. to already those what are accretive ways we're

Kenneth Bernstein

that we redeployed And investment Craig, management capital deals of assets in agnostic. in otherwise, of management we keep whether amount our back is then, monetize from get add to mind, a that, just well, or as into is investment platform, terms in coming fair that cash do as to relatively sales, asset future

and quiver hours to lever having our should several you So in expect up, that's see. to we what do have without

Craig Mailman

on they're a attractive. move is from there you it mitigation a deals pretty risk then at like But there the standpoint, are guys or least level maybe pre-leasing And forward, targeted sounds Henderson, in as Okay. yields confidence LOI of risk there to a to those you an of that with extent stage to the without aren't signed not just additional build-out level give forward go but yet, hit higher to the returns pre-leased?

Kenneth Bernstein

we Yes. phases. And it be just proceed and the there, situation thankfully, in can happens to

expect do tenant this, pretty we demands have will level But to So a which again, high phase of mitigation. each some thankfully, of we as strong. the provide of level leasing feels

that So right I'd now. have to lose see enthusiasm a major us have the we to shift for

Craig Mailman

think re-lease about a to as is of can an part know leasing developer one. It selling the getting that potentially it bit. Mich just maybe Any you I to guys water is North side? building up like piece on next the you update have monetizing a sounds point Or next Then retail? a Okay. you picking talked option to would of last one to door? existing where maybe

Kenneth Bernstein

route. expect remain think we to earnings should So, were there. that leasing We around positive. all, and anyone that's demand first of have conversations improving monetization any opportunities significant if and is I of open-minded don't go variety dilution

North is on think Mich, John, rebounding we So what be and accretive. should anything? we have thankfully,

John Gottfried

sums that to there. Nothing it think I add No, up.

Operator

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

Todd Thomas

while platform. the partners, raise go capital there. Ken, Fund you you a first, the you sell management in I asset back you and to have mentioned did wanted quarter, with assets are acquiring V And potential to to investment

be the or activity picks annualized being the Fund the And off over investment model capital from we to in about a should balance we we $XXX of it management have investment V in the growth platform? up? sheet within million what's as You transaction alone. dispositions accelerate then fund the platform assume of that that platform? size thinking should about of activity impact management in Should more recycling rent exercise think generated acquisition Is

Kenneth Bernstein

start, it up me you now could to think to Todd, stability. chime but but assume is want ramp to is we prudent Yes, we and let grow, continue So in. What monetize. John, want for I to also

ramp out, of Fund of there's Xx north we sold we Fund As achieve a assume It north lot for stability, multiple, buy-fix-sell benefits If to platform deal this our of equity for can IRR. and you last up. modeling XX% pointed was a for V John? in But V, those investors, now, a what and could purposes, the economic shareholders to that's does. our

John Gottfried

separate to would going let's cross-promotes. And just model vehicles Todd, like do that putting not to a stability, was to I that this now we in deals for that what is recycling. assume have about just are really capital what -- That's Yes. that we and expand say I

So enable those. to I visibility us more earlier get will think into to this promotes and

I that's pace. stable. it ability -- and I remains stability would model, think So a it a is I a the we where to But what the like in about would say for assume get faster to promote

Kenneth Bernstein

$XXX John, the And on million question on a then, Okay. every math X% just around accretion of the acquisitions.

some from I'll about conservative. think John to rate with you also, the conservative -- some higher are is accretion you about Todd, curious at? X% let just the it of up one there, you've think time, the I'm being every is the yes, the And just meaningfully in $XXX the here to that a accretion just formula for teed the to you're growth allowed our invest other has way been of going box he's not we think that theoretically to year. But improved why that for But we relative about. thought check. able The of pieces? spread what of company's here last improved has Or discussing of being beat external second. perhaps growth we're million. the accretion capital cost but over as about level I moving than

-- your points, So acknowledge I all allowed it. it's to but think beat yes, we're Todd.

John Gottfried

feels X% growth, darn Todd, good. pretty

Operator

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

Ki Bin Kim

you prior healthy being or markets Can maybe was, occupancy cost do that ratio? your do ratio? for the different where costs mid-teens that to can to remind you occupancy about Just through renewals And want a cost XXs. to higher in go and think in you established a the slate occupancy the peak to us to get ultimately, back retailers there the more low-to-mid go of you need can get topic

Kenneth Bernstein

A.J., why that? you don't take

Alexander Levine

the XX% were costs one we to quivers resets, the occupancy range. of one arrows say probably market I'd Yes. Again, right. the fair that closer of go that last that have we or around value is

So, that's really value. a we're how that of pry going to loose lot

at will; a that that market and pry pretty those mark-to-market can't, So afford the stay at spread. positive loose can tenants space we will to that

Ki Bin Kim

And how retail portfolio? value in your Street are resets the prevalent fair market

Alexander Levine

Streets More of a some of the think not, our market years recent reset. a a doesn't have we've often in of years, we deal value reset. done however fair than example several form I a many can't have over last, that

Ki Bin Kim

or think of it up to particular we've in what reason past from of down terms And look Great. as we Okay. forward, couple seen the of watchlist, any years? in

Kenneth Bernstein

that? Anyone want to Yes. take

as we've and fortunate in So, Ki of an I watchlist Bin, industry, really think been, terms retailers.

So, prepared there will struggle. that be will I that retailers say we're that would

as lot today. a confidence of we're Fortunately, we sit have at we where

in think saying, I that watching. we So that long-winded we're there will are way aware are out well-known there the be of that certainly all names

that's demand of not high-quality supply the I -- just is think our quickly that to spaces that having are multiple the retailer space. tenants on ability behind and it the interested difference there's now that

think and a very back. very and we're we team space his retailers be comfortable, we A.J. So that ]. I aware should and get pulling [ are And of list we are proactively

Operator

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

Paulina Rojas Schmidt

over next having market to grocery-anchored subtypes retail you for how are differential that the fundamental in rent those are say centers? drivers think you perspective? today, in do growth find And And the comment Do neighborhood on you you X can these a what yields fair growth you think like X behind for years? looks from think it's inside for then that can Street IRRs going mind,

Kenneth Bernstein

I yields of comparing Yes. is going most it And investment to high the activity was is going-in because in But anchored comparing high best-in-class similar. yield. in the for areas cap centers going-in initial thus tell, of going and oranges still anchored some probably the of shopping the demand, best-in-class where versus yields is, rates, best in degree, supermarket Street supermarket retail, say apples the most pretty demand, and in terms are obviously, crowded can I'd

as about rate because retail it Now, is for lower But the going-in it as are like historically, twice And both anchored then and our we same Street yields going-in had both. up sets yields component about the growth. Street our of the like today, supermarket retail feels is growth portfolio. and for of we it own

contractual Now how there or the my than possibility one is certainly with the growth for in that that's higher I it's I higher notes lower other general, mentioned peers, when versus area growth up. That just said. side. But is compare because stacking A.J. two, supermarket we the in fair is, value not on resets that being Street growth; of tend that one, the market to the see stronger

for Street than our the assets. that defined assumptions the years, think So supermarket-anchored higher next growth, we materially the be out portfolio, long-term as X-plus of assuming what get we those should

X% returns. either, assume is retail you're anchored, high supermarket they're it, single-digit growth and retail supermarket to X%, in to and call therefore, of, maybe X% then deserves. more higher Xs good and Street seems feels going for where defensive That and well, the Xs unlevered overall. settling if for for for yields and But getting you to rates that's argue, would X% like Some pretty it in

Paulina Rojas Schmidt

still then the case related were entirely Is total to for think cost the then really some space the is seems range or I And office details. this if think I to me. And remember behind Henderson, What's about? that, regarding I wide space, didn't well. to the understood it, you include you was It there? that thinking wide development but mentioned plan original I Okay. the retail

Kenneth Bernstein

Yes.

but office mixed-use is that piece this very this. range, it out have to build of pencils in demand. do and fine is wide it because component, will reason the were on even It So the depending if lease there we a can not add, a and we phases just

good it. we So But has development we're that pretty feeling recognize about risks. new

of lift we whole Henderson more this. Henderson mind, this right we is want this I'm if And phases. Final Avenue. lot to it buildings in a in in going in expansion, fact, We're, to keep will, to to the confident add so, pretty a to going it point now. existing full happens own do phase few and And

mentioned the where as years portfolio it. the in that of the prepared a X% the separate really And well. yield market even strong we've had the gets then in unlevered that remarks, Street lift thus growth then, owned there's So to overall we've I the same-store few last lift rent existing and

sooner be think time later. than can phases. we give do So, bottom that in have the at my accretion some have to give us be you this ] [ that over we But of quarters, line upper goal that end reasonable upcoming the to updates so and to hits A.J. rather the but would at least

Operator

line Michael Mueller question next from of Our with JPMorgan. the comes

Michael Mueller

locations or extension where Henderson, going the an already have they own? it you new what of scattered already? relative with sticking first, the buildings throughout guess, are you is I to Are

Kenneth Bernstein

extension. mean Difficulty] all buildings. It's [Technical distinct clustered it's line the we They're area. I relatively same right in of what There's mix. XX the in Yes. architecturally an the own. That's XX-yard

middle. it, So, and And the land end, the I'm going middle connect is has that's we street. about the vacant to and we Warby have what walked the Parker in on not the that is you've Grocer but sure talking A.J. have entire if parcel Tecovas Sprouts one

our bringing from connecting and of -- rents that those other some this there. exactly what It's locations that's of So think we is. all of pushing curate,

Michael Mueller

it. Got

portfolio Street guess, at I maybe, then little dipped the a second, looking bit. a And Okay. for occupancy

quarter. XX.X% around you XX%, 'XX, NOI as settling, year-end ramp through think by in hold? see that where I the about 'XX walk talked Can say, it's year-end you that the takes you

Kenneth Bernstein

Yes.

just it's for just of a floor new first leaving, the reminder we're et the is space Mike, given the actual and percentage space, cetera. to space, anyone call, somewhat -- not So, whether irrelevant is somewhat, rents, as second variation on the floor very

at both probably better design we get lease 'XX as into just year-end about XX%, gets by I'll think the will I But and to terms open, full occupancy, should think both -- say XX%, think economic terms talk And when by, the percentage. would at occupancy, on we and the get X us to look way in to economic the with of would I we throughout can it. we year. that us that, is land I around percentage, you end there XX%. I would then call what is And yet occupancy, 'XX, of look of XXXX full things. One, not we dollars by what's in which where where percentage is think that get say I So it, in occupancy signed actual we of see our rate

Operator

Ladies and I I'm like for remarks. to gentlemen, the now Bernstein queue. Ken would no showing in to questions over further closing the turn call back

Kenneth Bernstein

and for speaking next with quarter. you the time, to look again forward all taking Thank we you

Operator

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

You may now disconnect.

Acadia Realty Trust (AKR) 28 Oct 242024 Q3 Earnings call transcript