Acquisition and Disposition of Properties, Discontinued Operations and Properties Held For Sale

A. Acquisition and Disposition of Properties

Acquisitions

During 2014, the Company acquired the following properties through its Core Portfolio and Funds as follows:

Core Portfolio



(dollars in millions)
Property	GLA	Percent Owned		Type	Month of Acquisition	Purchase Price		Debt Assumption		Location
11 E. Walton	6,738	100	%	Street Retail	January	$	44.0	$	—	Chicago, IL
61 Main Street	3,400	100	%	Street Retail	February	7.3		—		Westport, CT
865 W. North Avenue	16,000	100	%	Street Retail	March	14.8		—		Chicago, IL
252-256 Greenwich Avenue	9,172	100	%	Street Retail	March	24.5		—		Greenwich, CT
152-154 Spring Street	2,936	90	%	Street Retail	April	38.0		—		New York, NY
2520 Flatbush Avenue	29,114	100	%	Urban Retail	May	17.1		—		Brooklyn, NY
Bedford Green	90,472	100	%	Shopping Center	July	46.8		29.8		Bedford, NY
131-135 Prince Street (1)	3,200	100	%	Street Retail	August	51.4		—		New York, NY
Shops at Grand Ave	99,975	100	%	Shopping Center	October	56.0		—		Queens, NY
201 Needham Street	20,409	100	%	Suburban Retail	November	10.1		—		Newton, MA
840 N. Michigan (2)	87,135	88	%	Street Retail	December	163.2		55.0		Chicago, IL
Total	368,551					$	473.2	$	84.8

Notes:

(1) This acquisition was primarily funded with the issuance of 1.4 million Common OP Units.

(2) As the tenancy in common partner to this investment maintains operating control over this investment, it is accounted for under the equity method. This acquisition was partially funded with the issuance of 0.2 million Common OP Units.

The Company expensed $4.8 million of acquisition costs for the year ended December 31, 2014 related to the Core Portfolio.

Fund III

During December, Fund III, through an already existing unconsolidated joint venture, acquired a parcel adjacent to one of its existing investments $3.1 million.

The Company expensed $0.2 million of acquisition costs for the year ended December 31, 2014 related to Fund III.

ACADIA REALTY TRUST AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2. Acquisition and Disposition of Properties, Discontinued Operations and Properties Held For Sale, continued

Fund IV



(dollars in millions)
Property	GLA	Percent Owned		Type	Month of Acquisition	Purchase Price		Location
Broughton Street Portfolio (1)	218,076	50	%	Street Retail	Various	$	33.9	Savannah, GA
Eden Square (2)	235,508	90	%	Shopping Center	July	25.4		Bear, DE
17 E. 71st Street	9,330	100	%	Street Retail	October	28.0		New York, NY
27 E. 61st Street (3)	9,637	100	%	Street Retail	October	19.3		New York, NY
Total	472,551					$	106.6

Notes:

(1) The Broughton Street Portfolio consists of 24 properties. As the joint venture partner to these investments maintains operating control over the investments, these are accounted for under the equity method. Of the 24 properties, nine of them are accounted for as asset acquisitions as they were purchased vacant and require future development.

(2) As the joint venture partner to this investment maintains operating control over this investment, it is accounted for under the equity method.

(3) This property was purchased vacant and requires future development and as such, it is accounted for as an asset acquisition.

The Company expensed $2.7 million of acquisition costs for the year ended December 31, 2014 related to Fund IV.

Purchase Price Allocations

With the exception of the asset acquisitions, the above acquisitions have been accounted for as business combinations. The purchase prices were allocated to the acquired assets and assumed liabilities based on their estimated fair values at the dates of acquisition. The preliminary measurements of fair value reflected below are subject to change. The Company expects to finalize the valuations and complete the purchase price allocations within one year from the dates of acquisition.

The following table summarizes both the Company's preliminary allocations of the purchase prices of assets acquired and liabilities assumed during 2014:



(dollars in thousands)	Preliminary Purchase Price Allocation
Land	$	145,833
Buildings and Improvements	411,896
Acquisition-related intangible liabilities (in Acquired lease intangibles, net)	(6,434		)
Above-below market debt assumed (included in Mortgages and other notes payable)	(2,100		)
Total Consideration	$	549,195

ACADIA REALTY TRUST AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2. Acquisition and Disposition of Properties, Discontinued Operations and Properties Held For Sale, continued

During 2013, the Company acquired properties and recorded the preliminary allocation of the purchase price to the assets acquired based on provisional measurements of fair value. During 2014, the Company finalized the allocation of the purchase price and made certain measurement period adjustments. The following table summarizes the preliminary allocation of the purchase price of properties as recorded as of December 31, 2013, and the finalized allocation of the purchase price as adjusted as of December 31, 2014:



(dollars in thousands)	Preliminary Purchase Price Allocation		Adjustments			Finalized Purchase Price Allocation
Land	$	65,804	$	14,720		$	80,524
Buildings and Improvements	245,925		(65,320		)	180,605
Acquisition-related intangible assets (in Acquired lease intangibles, net)	—		56,871			56,871
Acquisition-related intangible liabilities (in Acquired lease intangibles, net)	—		(6,271		)	(6,271		)
Total Consideration	$	311,729	$	—		$	311,729

Dispositions

During 2014, the Company disposed of the following properties:



(dollars in thousands)
Dispositions	GLA	Sale Price		Gain/(Loss) on Sale			Month Sold	Owner
Walnut Hill Plaza (1)	297,905	$	—	$	12,402		March	Core
Sheepshead Bay	96,418	20,200		1,399			April	Fund III
City Point (2)	—	26,300		561			June	Fund II
Other post-sale adjustments	—	—		(176		)	-	Fund II
Land sale	—	340		190			July	Core
Lincoln Road Portfolio (3)	61,443	141,800		86,600			August	Fund III
Lincoln Road Portfolio (3)	54,453	200,200		54,642			August	Fund IV
Total	510,219	$	388,840	$	155,618

Notes:

(1) This property was subject to $22.9 million of non-recourse debt and was foreclosed upon by the lender during March 2014, resulting in a $12.4 million gain.

(2) Represents the sale of a portion of the residential air rights known as "Tower 2" associated with the Company's City Point development project.

(3) Both the Fund III and Fund IV Lincoln Road Portfolios were unconsolidated and as such, the Company's share of gains related to these sales, which aggregated $102.9 million, are included in gain on disposition of properties of unconsolidated affiliates in the 2014 Consolidated Statement of Income.

ACADIA REALTY TRUST AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2. Acquisition and Disposition of Properties, Discontinued Operations and Properties Held For Sale, continued

B. Discontinued Operations

The Company previously reported properties sold as discontinued operations. The assets and liabilities and results of operations of discontinued operations are reflected as a separate component within the accompanying consolidated financial statements for all periods presented. As a result of the adoption of ASU 2014-08, there were no assets or liabilities classified as discontinued operations as of December 31, 2014.

The combined assets and liabilities as of December 31, 2013 and the results of operations of the properties classified as discontinued operations for the years ended December 31, 2014, 2013 and 2012, are summarized as follows:



(dollars in thousands)
BALANCE SHEETS	December 31, 2013
ASSETS
Net real estate	$	17,991
Rents receivable, net	565
Deferred charges, net	38
Prepaid expenses and other assets	1,840
Total assets of discontinued operations	$	20,434
LIABILITIES
Accounts payable and accrued expenses	$	1,473
Other liabilities	1,034
Total liabilities of discontinued operations	$	2,507



(dollars in thousands)	Years ended December 31,
STATEMENTS OF INCOME	2014			2013			2012
Total revenues	$	—		$	20,920		$	56,902
Total expenses	—			14,102			44,895
Operating income	—			6,818			12,007
Impairment of assets	—			(6,683		)	—
Loss on debt extinguishment	—			(800		)	(2,541		)
Gain on disposition of properties	1,222			18,802			71,203
Income from discontinued operations	1,222			18,137			80,669
Income from discontinued operations attributable to noncontrolling interests	(1,023		)	(12,048		)	(64,582		)
Income from discontinued operations attributable to Common Shareholders	$	199		$	6,089		$	16,087

ACADIA REALTY TRUST AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2. Acquisition and Disposition of Properties, Discontinued Operations and Properties Held For Sale, continued

C. Properties Held For Sale

At December 31, 2014, The Company had two properties classified as held-for-sale. The assets and liabilities relating to those properties are summarized as follows:



(dollars in thousands)
BALANCE SHEETS	December 31, 2014
Assets of properties held for sale	$	56,073
Liabilities of properties held for sale	$	25,500