Yahoo Finance Acadia Realty Trust (AKR) (Q1 2024) Earnings Call Transcript Highlights: Strategic Growth and ...
FFO Per Share: $0.33, slightly ahead of expectations.
Same-Store NOI Growth: Reported at 5.7% for the quarter.
Total NOI: $43.4 million for Q1, a sequential increase of approximately 4%.
Debt-to-EBITDA Improvement: Improved by over 0.5 a turn during the quarter.
Balance Sheet: Extended maturity of $750 million unsecured facility by 4 years, upsized borrowing capacity.
Interest Rate Exposure: Virtually none until mid-2027 due to use of interest rate swaps.
Lease-up Goals: Street retail portfolio 84% occupied, aiming for 95% by late-2025 to early-2026.
Incremental NOI Projection: $20 million from street retail over next several years, equating to about 10% annual growth.
Release Date: April 30, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: It's Lizzy Doykan on for Jeffrey. Congrats on the quarter. I was hoping to, I guess, get an update on what's new in terms of what you're seeing on transactional activity especially now that you have some clarity on activity, you're helping to close on with a couple of institutional partners. So I guess, starting with, one, what are the most key opportunities for capital cycling today? And then, two, are you -- what are you coming closer to in terms of the acquisition side? A: Kenneth F. Bernstein - Acadia Realty Trust - President, CEO & Trustee: Sure. So let me take a crack at both of them. As I mentioned in our prepared remarks, Lizzy, the -- what I said is the bid-ask spread is narrowing, meaning there are buyers and sellers showing up for a variety of open-air retail. And while the volatility of the bond market is elongating that process, we are seeing interest from both buyers and sellers for a variety of products.
Q: That's helpful. And just as a separate follow-up question. Going back to A.J.'s comments on one luxury tenant that relocated from Gold Coast to North Michigan Avenue. Is this a sign of -- or maybe are you seeing other signs of luxury showing up and other strength retail markets besides Melrose and the others that A.J. commented on? A: Kenneth F. Bernstein - Acadia Realty Trust - President, CEO & Trustee: A.J., why don't you cover that? A: Alexander J. Levine - Acadia Realty Trust - SVP of Leasing & Development: Yes. I mean, certainly within our portfolio, we've seen luxury show up in markets like Williamsburg where historically, you might not have expected that. And even as we look to some of our growth markets, you've seen luxury show up in Ashville, you've seen luxury show up in Austin. So luxury expansion is very real. It's not isolated to New York, L.A., Chicago. It's something that's happening everywhere.
Q: First question, just curious with some of these new relationships that you're sort of entering into. I guess, first, are they new relationships? Or are some of these or any of these legacy fund investors? And then is this -- should we think about strategic sort of investments like this in lieu of a Fund VI vehicle? Or should we assume that Fund VI, fundraising is also either ongoing or will begin at some point in addition to these new relationships? A: Kenneth F. Bernstein - Acadia Realty Trust - President, CEO & Trustee: So we think that this format will serve our shareholders better than a one-size-fits-all Fund VI. Again, that could change, Todd. And the investors are similar. There's some overlap, but it's also new institutions.
Q: Will additional investments with the investor that you're selling a 95% stake in a suburban asset too, will they be similar going forward with Acadia having a 5% stake? And then are there any additional core suburban assets that might be sold to -- in a similar manner? A: Kenneth F. Bernstein - Acadia Realty Trust - President, CEO & Trustee: Yes. So let me start with the second part of that, which is throughout our portfolio, we are constantly looking at which assets does it make sense to recycle out of, either because they are lower growth or not mission-critical or just not consistent with our growth strategy. And so yes, there are. We certainly do not need to rush to the exits. So you're not going to see us firesaling anything. And if we don't do any more of those recycles, we can still grow this company just fine. But there are certainly that opportunity.
Q: Okay. Will additional investments with the investor that you're selling a 95% stake in a suburban asset too, will they be similar going forward with Acadia having a 5% stake? And then are there any additional core suburban assets that might be sold to -- in a similar manner? A: Kenneth F. Bernstein - Acadia Realty Trust - President, CEO & Trustee: Yes. So let me start with the second part of that, which is throughout our portfolio, we are constantly looking at which assets does it make sense to recycle out of, either because they are lower growth or not mission-critical or just not consistent with our growth strategy. And so yes, there are. We certainly do not need to rush to the exits. So you're not going to see us firesaling anything. And if we don't do any more of those recycles, we can still grow this company just fine. But there are certainly that opportunity.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
