8-K

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 8-K

                                 CURRENT REPORT

     Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

         Date of Report (Date of Earliest Event Reported): May 16, 2007

                               ACADIA REALTY TRUST
             (Exact name of registrant as specified in its charter)

        Maryland                     1-12002                 23-2715194
    (State or other                (Commission             (I.R.S. Employer
 jurisdiction of incorporation)    File Number)           Identification No.)


                             1311 Mamaroneck Avenue
                                    Suite 260
                          White Plains, New York 10605
               (Address of principal executive offices) (Zip Code)

                                 (914) 288-8100
              (Registrant's telephone number, including area code)

          (Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR
    230.425 )

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
    240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
    Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
    Act (17 CFR 240.13e-4(c))



Item 8.01.        Other Events.


         On May 16, 2007, Acadia Realty Trust (the "Company") issued a press
release announcing that it has formed its third discretionary opportunity fund,
Acadia Strategic Opportunity Fund III LLC ("Fund III"). The Company anticipates
that in addition to the Company's investment, 13 investors will invest in Fund
III, including all of the investors from its most recent opportunity fund,
Acadia Strategic Opportunity Fund II LLC ("Fund II").

         Fund III expects to receive total aggregate capital commitments of $400
million from the existing investors in Fund II and seven new investors. The
Company has agreed to commit up to an additional $100 million of its own
capital, representing 20% of the total committed capital. Approximately 90% of
Fund III's offering has closed; with the remaining balance expected to close
during the second quarter of 2007. With $500 million of discretionary capital,
Fund III intends to acquire up to approximately $1.5 billion of assets on a
leveraged basis.

         The terms and structure of Fund III are substantially the same as Fund
II except that the preferred return threshold is equal to 6%. A subsidiary of
the Company will be the managing member of Fund III with a 20% interest.

         In addition to a pro-rata return on its invested equity, the Company is
entitled to a profit participation based upon certain investment return
thresholds. Cash flow is distributed pro-rata to the members (including the
Company) until they have received a 6% cumulative return on, and a return of,
all capital contributions. Thereafter, remaining cash flow is distributed 80% to
the members (including the Company) and 20% to the Company as a carried
interest. The Company also earns fees and/or priority distributions for asset
management services equal to 1.5% of the allocated invested equity, as well as
for property management, leasing, development/re-development and construction
services.

         A copy of the press release is attached hereto as Exhibit 99.1 and
incorporated herein by reference.

..

Item 9.01.   Financial Statements, Pro Forma Financial Information and Exhibits.

(d) Exhibits.


Exhibit Number            Description
- --------------            -----------

99.1                      Press Release dated May 16, 2007



                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.


                                                ACADIA REALTY TRUST
                                                    (Registrant)

Date:  May 16, 2007                    By: /s/ Michael Nelsen
                                          --------------------------------------
                                          Name:  Michael Nelsen
                                          Title: Sr. Vice President and
                                                 Chief Financial Officer

EX-99.1

                                                                    Exhibit 99.1

 Acadia Realty Trust Announces Formation of $500 Million Equity Fund:
                  Acadia's Third Discretionary Fund

    NEW YORK--(BUSINESS WIRE)--May 16, 2007--Acadia Realty Trust
(NYSE:AKR - "Acadia") today announced the formation of its third
discretionary investment fund, Acadia Strategic Opportunity Fund III
LLC ("Fund III"). Fund III will be capitalized with $500 million of
discretionary institutional capital, which will enable Acadia to
acquire or develop approximately $1.5 billion of assets on a leveraged
basis.

    It is anticipated that Fund III will consist of 13 institutional
investors, including all of the investors from prior funds. The
existing investors and seven new members will invest a total of $400
million of equity and Acadia will invest $100 million. Approximately
90% of Fund III's offering has closed; the remaining balance is
anticipated to close during the current quarter.

    To date, Fund I and Fund II are fully funded or committed. The
terms and structure of Fund III are substantially the same as Funds I
and II. Acadia will earn a pro-rata return on its invested equity in
Fund III, as well as fees for asset management,
development/redevelopment services, leasing, construction management
and property management. Acadia also has the opportunity to earn
additional amounts based on certain investment return thresholds.

    Fund III will continue to pursue the investment initiatives of
Acadia's first two discretionary investment funds. In line with this
strategy, Fund III will continue to expand the Urban-Infill
Redevelopment platform. This includes Acadia's joint-venture with P/A
Associates in New York City, which currently has eight Urban-Infill
projects representing approximately $1 billion in value. Fund III will
also continue to make investments in retailer-controlled properties,
such as prior fund investments including Mervyns and Albertson's. The
flexible and discretionary structure of Fund III also positions it
well to move quickly and definitively to take advantage of market
dislocations and corrections through investments in existing assets.
Such opportunistic investments resulting from market turmoil, similar
to Fund I's purchase of approximately 1.0 million square feet in
Wilmington, Delaware, are expected to be a key component of Fund III's
strategy.

    Kenneth F. Bernstein, Acadia's President and CEO, stated "We are
quite pleased with the high level of institutional interest we have
received for participation in the Fund. Acadia will continue to focus
on the investment strategies that have proven successful for us to
date, and we are excited about the diverse and robust deals in our
pipeline. We believe the size of Fund III will enable us to remain
both disciplined and opportunistic. It remains our belief that the
discretionary investment fund structure is an ideal vehicle for Acadia
to continue to both maximize our capital structure and shareholder
value."

    Acadia Realty Trust, headquartered in White Plains, NY, is a fully
integrated, self-managed and self-administered equity REIT focused
primarily on the ownership, acquisition, redevelopment and management
of retail properties, including neighborhood/community shopping
centers and mixed-use properties with retail components.

    Certain matters in this press release may constitute
forward-looking statements within the meaning of federal securities
law and as such may involve known and unknown risk, uncertainties and
other factors which may cause the actual results, performances or
achievements of Acadia to be materially different from any future
results, performances or achievements expressed or implied by such
forward-looking statements. These forward-looking statements include
statements regarding our future earnings, estimates regarding the
timing of completion of, and costs relating to, our real estate
redevelopment projects. Factors that could cause our forward-looking
statements to differ from our future results include, but are not
limited to, those discussed under the headings "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" and "Risk Factors" in the Company's most recent annual
report on Form 10-K filed with the SEC on March 1, 2007 ("Form 10-K")
and other periodic reports filed with the SEC, including risks related
to: (i) the Company's reliance on revenues derived from major tenants;
(ii) the Company's limited control over joint venture investments;
(iii) the Company's partnership structure; (iv) real estate and the
geographic concentration of our properties; (v) market interest rates;
(vi) leverage; (vii) liability for environmental matters;(viii) the
Company's growth strategy; (ix) the Company's status as a REIT (x)
uninsured losses and (xi) the loss of key executives. Copies of the
Form 10-K and the other periodic reports Acadia files with the SEC are
available on the Company's website at www.acadiarealty.com. Any
forward-looking statements in this press release speak only as of the
date hereof. Acadia expressly disclaims any obligation or undertaking
to release publicly any updates or revisions to any forward-looking
statements contained herein to reflect any change in Acadia's
expectations with regard thereto or change in events, conditions or
circumstances on which any such statement is based.

    CONTACT: Acadia Realty Trust
             Jon Grisham, 914-288-8142
             Investor Relations