EX-99.1 2 a50617399ex99-1.htm EXHIBIT 99.1 a50617399ex99-1.htm
Exhibit 99.1
 
Acadia Realty Trust Reports First Quarter 2013 Operating Results
 
WHITE PLAINS, N.Y.--(BUSINESS WIRE)--April 23, 2013--Acadia Realty Trust (NYSE: AKR) today reported operating results for the quarter ended March 31, 2013. All per share amounts are on a fully diluted basis.
 
First Quarter 2013 Highlights
 
Earnings
 
 
·
Funds from operations (“FFO”) of $0.31 per share for the first quarter 2013
 
 
·
Earnings per share (“EPS”) from continuing operations of $0.18 for the first quarter 2013
 
Dividend Increase
 
 
·
The Company increased its quarterly dividend 17%, from $0.18 to $0.21 for the first quarter 2013
 
Core Portfolio – Strong Same Store NOI; Significant progress towards 2013 Acquisitions Goal
 
 
·
Same store net operating income (“NOI”) for the first quarter up 10.9% compared to 2012
 
 
·
March 31, 2013 portfolio occupancy of 93.6%
 
 
·
During the first quarter 2013, closed on an $86.6 million “Magnificent Mile” retail property in Chicago
 
Balance Sheet – Positioned for Growth with Low Leverage and New $150 Million Unsecured Line
 
 
·
Core portfolio debt net of cash on hand (“Net Debt”) to EBITDA ratio of 4.1x at March 31, 2013; 5.0x including pro-rata share of Opportunity Funds
 
 
·
Combined Net Debt to total equity and debt capitalization (“Total Market Capitalization”) of 22% at March 31, 2013
 
 
·
Closed on a new $150 million unsecured line of credit during the quarter
 
 
·
Subsequent to quarter end, completed $125 million ATM program and initiated a new ATM program for $150 million
 
 
 
 
 
First Quarter 2013 Operating Results
 
FFO and Net Income from Continuing Operations for the quarter ended March 31, 2013 were $16.8 million and $9.6 million, respectively, compared to $9.3 million and $3.5 million, respectively, for the quarter ended March 31, 2012.
 
Earnings for the quarters ended March 31, 2013 and 2012, on a per share basis, were as follows:
 
   
Quarters ended March 31,
   
2013
    
2012
    
Variance
FFO per share
  
$
0.31
    
$
0.21
    
$
0.10
  
EPS from continuing operations
  
$
0.18
    
$
0.08
    
$
0.10
  
EPS from discontinued operations
  
$
--
    
$
0.01
     $
(0.01
)
EPS
  
$
0.18
    
$
0.09
    
$
0.09
  
 
The following significant items contributed to the above variances in EPS from continuing operations:
 
   
2013 v 2012
   
Variance
   
Quarter
Income from 2012/2013 acquisitions and redevelopment projects
  
$
0.06
  
Additional 2013 fee income
    
0.03
  
Additional 2013 interest income
    
0.03
  
Dilution from additional outstanding Common Shares
    
(0.02
)
Total variance
  
$
0.10
  
 
Strong Core Portfolio Performance; Closed on $87 Million in Chicago
 
Acadia’s core portfolio (“Core Portfolio”) is comprised of properties that are owned in whole or in part by Acadia outside of its opportunity funds (the “Funds”).
 
 
 
 
 
Same-Store NOI and Occupancy
 
Core Portfolio same-store NOI increased 10.9% for the first quarter 2013 compared to the first quarter 2012. Excluding the impact of re-anchoring activities at the Bloomfield Town Square and Branch Plaza that occurred during 2012, same-store NOI increased 5.6%.
 
At March 31, 2013, Acadia’s Core Portfolio occupancy was 93.6%, as compared to 94.2% as of December 31, 2012. Including space currently leased but not yet occupied, the Core Portfolio was 94.0% leased.
 
Rent Spreads on New and Renewal Leases
 
The Company realized an increase in average rents on a GAAP basis, which includes the effect of the straight-lining of rents, of 23.3% on 87,000 square feet of new and renewal leases executed during the first quarter of 2013 in its Core Portfolio. On a contractual rent basis, which excludes straight-line rent, the Company experienced an increase of 6.4% in average rents for these same leases.
 
Acquisition Activity – Continued Investment in Street Retail
 
During the first quarter 2013, Acadia closed on 664 North Michigan Avenue in Chicago, IL for a purchase price of $86.6 million. The property is located on Michigan Avenue between Erie and Huron Streets, in the middle of Chicago’s premier retail corridor. Also called the Magnificent Mile, this is the city’s most popular shopping destination with eight blocks of high-quality retail, world-class hotels, museums and noted art galleries and an international tourist draw for Chicago’s over 38 million annual tourists.
 
The property is an 18,141 square foot retail property which is a vertically subdivided commercial parcel that forms the base of the 40-story Ritz-Carlton Residences Chicago, luxury residential condominiums. Tenants at the property include Tommy Bahama and Ann Taylor Loft which are expected to open during the second quarter of 2013. The property is surrounded by both mainstream and high-end retailers including Apple, Burberry, Niketown, Crate & Barrel, Rolex, Cartier, Zara, Saks Fifth Avenue, Cole Haan and Salvatore Ferragamo.
 
Fund Platform – Continued Progress Following $569 Million of Transactions during December 2012
 
During the first quarter 2013, redevelopment activities continued to progress at various projects within the Company’s Fund platform, including City Point (Brooklyn), Cortlandt Crossing (Westchester County, NY) and Broad Hollow Commons (Long Island). These projects are anticipated to aggregate approximately $350 million to $450 million in total costs when complete. This follows significant transactional activity during December 2012 including acquisitions in Acadia’s recently formed Fund IV aggregating $151.2 million and monetization of Fund II and Fund III assets totaling $417.9 million.
 
 
 
 
 
Balance Sheet – New Unsecured Line; Maintaining Low Leverage
 
During the first quarter, Acadia closed on a new unsecured line of credit, replacing its existing $64.5 million secured line. The current availability of up to $150 million under the facility can be increased to $300 million based on achieving certain thresholds. Interest is based on levels of leverage starting with a rate of LIBOR plus 155 basis points.
 
During the first quarter, the Company issued 2.0 million Common Shares under its ATM program for net proceeds of $52.9 million. Subsequent to March 31, 2013, the Company completed its existing $125 million ATM program and renewed it for $150 million.
 
Acadia continues to maintain a solid balance sheet with available liquidity and low leverage as evidenced by the following as of March 31, 2013:
 
 
·
The Company had total liquidity of $182.0 million, including $44.5 million of cash on hand and $137.5 million available under its unsecured line of credit, excluding the Funds’ cash and credit facilities.
 
 
·
Core Portfolio Net Debt to EBITDA ratio of 4.1x
 
 
·
Including the Company’s Core Portfolio debt and pro-rata share of the Company’s Fund debt (“Combined”), a Net Debt to EBITDA ratio of 5.0x
 
 
·
Combined Net Debt to Total Market Capitalization of 22%
 
 
·
Core Portfolio fixed-charge coverage ratio of 3.5 to 1 and a Combined fixed-charge coverage ratio of 3.4 to 1
 
Outlook - Earnings Guidance for 2013
 
The Company reaffirms its previously announced 2013 FFO and EPS forecast. On a fully diluted basis, the Company forecasts that its 2013 annual FFO will range from $1.17 to $1.25 per share and 2013 EPS from $0.66 to $0.71 per share.
 
Management Comments
 
“We are very pleased with the progress our team made during the first quarter across our dual platforms” stated Kenneth F. Bernstein, President and CEO of Acadia Realty Trust. “Our core portfolio’s operating performance exceeded our expectations. Additionally, our acquisition of 664 North Michigan Avenue on Chicago’s “Magnificent Mile” adds another high-street property to our core portfolio in one of our key markets. With respect to our fund platform, in the first quarter we continued to execute on the initiatives we put into place over the past year as we made progress with both new fund investments as well as stabilizing and monetizing existing investments.”
 
 
 
 
 
Investor Conference Call
 
Management will conduct a conference call on Wednesday, April 24, 2013 at 10:00 AM ET to review the Company’s earnings and operating results. The live conference call can be accessed by dialing 888-771-4371. The pass code is “34572463” or “Acadia Realty”. The call will also be webcast and can be accessed in a listen-only mode at Acadia’s web site at www.acadiarealty.com. If you are unable to participate during the live webcast, the call will be archived and available on Acadia’s website. Alternatively, to access the replay by phone, dial 888-843-7419, and the passcode will be “34572463#”. The phone replay will be available through Wednesday, May 1, 2013.
 
About Acadia Realty Trust
 
Acadia Realty Trust, a fully-integrated equity real estate investment trust, is focused on the acquisition, ownership, management and redevelopment of high-quality retail properties and urban/infill mixed-use properties with a strong retail component located primarily in high-barrier-to-entry, densely-populated metropolitan areas along the East Coast and in Chicago. Acadia owns, or has an ownership interest in, these properties through its core portfolio and its opportunistic/value-add investment funds. Additional information may be found on the Company’s website at www.acadiarealty.com.
 
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 risks, uncertainties and other factors that 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 Acadia’s future financial results and its ability to capitalize on potential opportunities arising from continued economic uncertainty. Factors that could cause the Company’s forward-looking statements to differ from its future results include, but are not limited to, those discussed under the headings “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s most recent annual report on Form 10-K filed with the SEC on February 27, 2013 (“Form 10-K”) and other periodic reports filed with the SEC, including risks related to: (i) the current global financial environment and its effect on retail tenants; (ii) the Company’s reliance on revenues derived from major tenants; (iii) the Company’s limited control over joint venture investments; (iv) the Company’s partnership structure; (v) real estate and the geographic concentration of the Company’s properties; (vi) market interest rates; (vii) leverage; (viii) liability for environmental matters; (ix) the Company’s growth strategy; (x) the Company’s status as a REIT; (xi) uninsured losses and (xii) 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.
 
(Financial Highlights Follow)
 
 
 
 
 
ACADIA REALTY TRUST AND SUBSIDIARIES
Financial Highlights 1
For the Quarters ended March 31, 2013 and 2012
(dollars and Common Shares in thousands, except per share data)
     
   
For the Quarters ended
   
March 31,
Revenues
    
2013
      
2012
  
         
Minimum rents
  
$
28,762
    
$
21,708
  
Percentage rents
    
95
      
243
  
Mortgage interest income
    
2,869
      
2,055
  
Expense reimbursements
    
7,156
      
5,402
  
Other property income
    
399
      
72
  
Management fee income
    
146
      
433
  
Other income
    
2,962
      
--
  
Total revenues
    
42,389
      
29,913
  
Operating expenses
        
Property operating
    
6,427
      
5,457
  
Real estate taxes
    
4,858
      
4,139
  
General and administrative
    
5,623
      
5,925
  
Depreciation and amortization
    
9,756
      
7,146
  
Total operating expenses
    
26,664
      
22,667
  
         
Operating income
    
15,725
      
7,246
  
         
Equity in earnings (losses) of unconsolidated affiliates
    
2,377
      
(56
)
Other interest income
    
29
      
54
  
Interest expense and other finance costs
    
(7,805
)
    
(6,560
)
Income from continuing operations before income taxes
    
10,326
      
684
  
Income tax benefit (provision)
    
140
      
(188
)
Income from continuing operations
    
10,466
      
496
  
 
 
 
 
 
ACADIA REALTY TRUST AND SUBSIDIARIES
Financial Highlights 1
For the Quarters ended March 31, 2013 and 2012
(dollars and Common Shares in thousands, except per share data)
     
   
For the Quarters ended
   
March 31,
     
2013
      
2012
  
         
Operating income from discontinued operations
    
397
      
2,327
  
Net income
    
10,863
      
2,823
  
         
(Income) loss attributable to noncontrolling interests:
        
Continuing operations
    
(892
)
    
2,992
  
Discontinued operations
    
(348
)
    
(1,805
)
Net (income) loss attributable to noncontrolling
        
interests
    
(1,240
)
    
1,187
  
         
Net income attributable to Common Shareholders
  
$
9,623
    
$
4,010
  
         
Supplemental Information
        
Income from continuing operations attributable to
        
Common Shareholders
  
$
9,574
    
$
3,488
  
Income from discontinued operations attributable to
        
Common Shareholders
    
49
      
522
  
                 
Net income attributable to Common Shareholders
  
$
9,623
    
$
4,010
  
         
Net income attributable to Common Shareholders per Common Share –
        
Basic
        
Net income per Common Share – Continuing
        
operations
  
$
0.18
    
$
0.08
  
Net income per Common Share – Discontinued
        
operations
    
--
      
0.01
  
Net income per Common Share
  
$
0.18
    
$
0.09
  
Weighted average Common Shares
    
53,414
      
42,736
  
         
Net income attributable to Common Shareholders per Common Share –
        
Diluted 2
        
Net income per Common Share – Continuing
        
Operations
  
$
0.18
    
$
0.08
  
Net income per Common Share – Discontinued
        
Operations
    
--
      
0.01
  
Net income per Common Share
  
$
0.18
    
$
0.09
  
Weighted average Common Shares
    
53,851
      
43,146
  
 
 
 
 
 
ACADIA REALTY TRUST AND SUBSIDIARIES
Financial Highlights 1
For the Quarters ended March 31, 2013 and 2012
(dollars and Common Shares in thousands, except per share data)
RECONCILIATION OF NET INCOME TO FUNDS FROM OPERATIONS 3
     
   
For the Quarters ended
   
March 31,
   
2013
  
2012
         
         
Net income attributable to Common Shareholders
  
$
9,623
  
$
4,010
         
Depreciation of real estate and amortization of leasing costs
        
(net of noncontrolling interests' share):
        
Consolidated affiliates
    
6,697
    
4,828
Unconsolidated affiliates
    
397
    
392
Income attributable to noncontrolling interests’ in
        
Operating Partnership
    
124
    
63
Distributions – Preferred OP Units
    
5
    
5
             
Funds from operations
  
$
16,846
  
$
9,298
Funds from operations per share – Diluted
        
Weighted average Common Shares and OP Units 4
    
54,531
    
43,792
Funds from operations, per share
  
$
0.31
  
$
0.21
 
 
 
 
 
ACADIA REALTY TRUST AND SUBSIDIARIES
Financial Highlights 1
For the Quarters ended March 31, 2013 and 2012
(dollars in thousands)
RECONCILIATION OF OPERATING INCOME TO NET PROPERTY
OPERATING INCOME (“NOI”) 3
     
   
For the Quarters ended
   
March 31,
     
2013
      
2012
  
         
Operating income
  
$
15,725
    
$
7,174
  
         
Add back:
        
General and administrative
    
5,623
      
5,925
  
Depreciation and amortization
    
9,756
      
7,150
  
Less:
        
Management fee income
    
(146
)
    
(433
)
Mortgage interest income
    
(2,869
)
    
(1,987
)
Straight line rent and other adjustments
    
(697
)
    
456
  
         
Consolidated NOI
    
27,392
      
18,285
  
         
Noncontrolling interest in NOI
    
(10,006
)
    
(6,468
)
Pro-rata share of NOI
    
17,386
      
11,817
  
Operating Partnerships’ interest in Opportunity Funds
    
(2,391
)
    
(1,511
)
Operating Partnerships’ share of unconsolidated joint ventures 1
    
1,568
      
1,689
  
NOI – Core Portfolio
  
$
16,563
    
$
11,995
  
         
Note:
        
1 Does not include share of unconsolidated joint ventures within
Opportunity Funds
        

   
   
SELECTED BALANCE SHEET INFORMATION
   
As of
   
March 31,
2013
  
December 31,
2012
   
(dollars in thousands)
         
Cash and cash equivalents
  
$
79,516
  
$
91,813
Rental property, at cost
    
1,358,268
    
1,249,140
Total assets
    
2,169,337
    
1,908,440
Notes payable
    
936,121
    
727,978
Total liabilities
    
1,048,312
    
838,184
             
 
 
 
 
 
ACADIA REALTY TRUST AND SUBSIDIARIES
Financial Highlights
For the Quarters ended March 31, 2013 and 2012
(dollars and Common Shares in thousands, except per share data)
 
Notes:
 
1 For additional information and analysis concerning the Company’s results of operations, reference is made to the Company’s Quarterly Supplemental Disclosure furnished on Form 8-K to the SEC and included on the Company’s website at www.acadiarealty.com.
 
2 Reflects the potential dilution that could occur if securities or other contracts to issue Common Shares were exercised or converted into Common Shares. The effect of the conversion of Common OP Units is not reflected in the above table as they are exchangeable for Common Shares on a one-for-one basis. The income allocable to such units is allocated on the same basis and reflected as noncontrolling interests in the consolidated financial statements. As such, the assumed conversion of these units would have no net impact on the determination of diluted earnings per share.
 
3 The Company considers funds from operations (“FFO”) as defined by the National Association of Real Estate Investment Trusts (“NAREIT”) and net property operating income (“NOI”) to be appropriate supplemental disclosures of operating performance for an equity REIT due to their widespread acceptance and use within the REIT and analyst communities. FFO and NOI are presented to assist investors in analyzing the performance of the Company. They are helpful as they exclude various items included in net income that are not indicative of the operating performance, such as gains (losses) from sales of depreciated property, depreciation and amortization, and impairment of depreciable real estate. In addition, NOI excludes interest expense. The Company’s method of calculating FFO and NOI may be different from methods used by other REITs and, accordingly, may not be comparable to such other REITs. FFO does not represent cash generated from operations as defined by generally accepted accounting principles (“GAAP”) and is not indicative of cash available to fund all cash needs, including distributions. It should not be considered as an alternative to net income for the purpose of evaluating the Company’s performance or to cash flows as a measure of liquidity. Consistent with the NAREIT definition, the Company defines FFO as net income (computed in accordance with GAAP), excluding gains (losses) from sales of depreciated property, plus depreciation and amortization, impairment of depreciable real estate, and after adjustments for unconsolidated partnerships and joint ventures.
 
4 In addition to the weighted average Common Shares outstanding, basic and diluted FFO also assume full conversion of a weighted average 655 and 621 OP Units into Common Shares for the quarters ended March 31, 2013 and 2012, respectively. Diluted FFO also includes the assumed conversion of Preferred OP Units into 25 Common Shares for each of the quarters ended March 31, 2013 and 2012. In addition, diluted FFO also includes the effect of 437 and 410 employee share options, restricted share units and LTIP units for the quarters ended March 31, 2013 and 2012, respectively.
 
 
CONTACT:
Acadia Realty Trust
Jon Grisham, 914-288-8100