Earnings call transcript: Acadia Realty Trust Q2 2025 misses EPS, beats revenue

Acadia Realty Trust reported its earnings for the second quarter of 2025, revealing a mixed financial performance. The company reported earnings per share (EPS) of $0.01, falling short of the forecasted $0.09 by 88.89%. However, revenue exceeded expectations, reaching $100.59 million compared to the forecasted $78.13 million, marking a 28.75% surprise. The company maintains strong fundamentals with a 13.53% revenue growth over the last twelve months and an impressive 27-year track record of consistent dividend payments, as highlighted by InvestingPro. Despite the mixed results, Acadia’s stock showed a slight decline, closing at $19.13, a 0.78% drop from the previous session.

Key Takeaways

• Acadia Realty Trust’s EPS significantly missed analyst expectations.
• Revenue surpassed forecasts, showing strong performance in street retail.
• Stock price decreased by 0.78% following the earnings release.
• The company reaffirmed its growth expectations for core same-store NOI.
• Executed new leases valued at $7.5 million, nearly doubling from 2024.

Company Performance

Acadia Realty Trust demonstrated robust revenue growth in Q2 2025, driven by its strategic focus on street retail. The company reported a NAREIT FFO of $0.27 per share, an 8% increase from the previous year. Total core occupancy rose to 92.2%, with expectations to reach 94-95% by year-end. Acadia’s proactive strategy in capturing under-market spaces and strong consumer demand in affluent markets contributed to its solid performance.

Financial Highlights

• Revenue: $100.59 million, up 28.75% from forecast
• Earnings per share: $0.01, down 88.89% from forecast
• NAREIT FFO: $0.27 per share, up 8% year-over-year
• Core occupancy: increased by 50 basis points to 92.2%

Earnings vs. Forecast

Acadia Realty Trust’s EPS of $0.01 fell significantly below the forecasted $0.09, marking an 88.89% miss. This shortfall contrasts with the company’s historical trend of meeting or exceeding EPS expectations. On the other hand, revenue of $100.59 million surpassed the forecast by 28.75%, indicating strong operational performance despite the EPS miss.

Market Reaction

Following the earnings announcement, Acadia’s stock price declined by 0.78%, closing at $19.13. The stock remains within its 52-week range, with a high of $26.29 and a low of $16.98. According to InvestingPro analysis, the stock appears slightly overvalued at current levels, with a P/E ratio of 114.77x and trading at a high EBIT multiple. The market reaction reflects investor concerns over the EPS miss, despite the positive revenue surprise and the company’s attractive 4.18% dividend yield. For deeper insights into Acadia’s valuation metrics and growth potential, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro.

Outlook & Guidance

Acadia Realty Trust reaffirmed its guidance for 2025, projecting a 5% to 6% core same-store NOI growth. The company anticipates a further increase in occupancy rates and aims to double its street retail portfolio. InvestingPro analysis reveals strong financial health indicators, with liquid assets exceeding short-term obligations and analysts projecting continued profitability. Looking ahead to 2026, Acadia expects NOI to grow by over 10%, with net profits from its investment management platform projected to exceed $30 million. The company’s market capitalization stands at $2.59 billion, positioning it well for future growth opportunities.

Executive Commentary

"We are seeing the benefits of scale emerge in our street retail platform in ways that have remained more elusive in other open air formats," said Ken Bernstein, CEO. This highlights the company’s strategic focus on street retail as a key growth driver. A.J. Levine noted, "The real challenge on M Street, like many of our streets, is how to accommodate three tenants that all want the same space," underscoring strong demand in key markets.

Risks and Challenges

• Economic uncertainty and potential tariff impacts could affect consumer spending.
• Competition for prime retail spaces may pressure rental rates.
• Macroeconomic pressures could impact overall retail market dynamics.
• Supply chain disruptions may affect new lease execution and tenant operations.

Q&A

During the earnings call, analysts questioned the impact of tariffs and economic uncertainty on Acadia’s performance. The company addressed occupancy targets for its street and urban portfolio and discussed potential asset sales and portfolio rebalancing. Strong tenant demand and leasing momentum were highlighted as key drivers of future growth.

Full transcript - Acadia Realty Trust (AKR) Q2 2025:

Conference Operator: Thank you for standing by and welcome to the Akade Realty Trust Second Quarter twenty twenty five Earnings Conference Call. At this time, all participants are in a listen only mode. After the speakers’ presentation, there will be a question and answer session. If your question has been answered and you’d like to remove yourself from the queue, simply press 11 again. We ask that you please limit yourself to one question and one follow-up.

You may get back in the queue as time allows. As a reminder, today’s program is being recorded. And now I’d like to introduce your host for today’s program, John Forster, Property Accountant. Please go ahead,

: sir.

John Forrester, Property Accountant, Acadia Realty Trust: Good afternoon, and thank you for joining us for the Second Quarter twenty twenty five Acadia Realty Trust Earnings Conference Call. My name is John Forrester, and I am a property accountant in our accounting 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. Due to a variety of risks and uncertainties, including those disclosed in the company’s most recent Form 10 ks and other periodic filings with the SEC, forward looking statements speak only as of the date of this call, 07/30/2025, and the company undertakes no duty to update them. During this call, management may refer to certain non GAAP financial measures, including funds from operations and net operating income.

Please see Acadia’s earnings press release posted on its website for reconciliations of these non GAAP financial measures with the most directly comparable GAAP financial measures. Once the call becomes open for questions, we ask that you limit your first round of two questions per caller to give everyone the opportunity to participate. You may ask further questions by reading your intro into the queue and we will answer as time permits. Now it is my pleasure to turn the call over to Ken Bernstein, President and Chief Executive Officer, will begin today’s management remarks.

Ken Bernstein, President and Chief Executive Officer, Acadia Realty Trust: Thank you, John. Great job. Welcome, everyone. Notwithstanding continued noise and uncertainty around the broader economy last quarter, we saw continued momentum across all of the three key drivers of our business. The first driver is delivering superior internal growth through our highly differentiated core portfolio dominated by street retail.

Last quarter’s leasing activity puts us well on our way to a fourth year of delivering annual same store growth in excess of 5%. And as A. J. Levine will discuss, we are making important progress on our 2026 and our 2027 goals as well. Then the second driver is adding to our internal growth with accretive and complementary external growth, both on balance sheet and through our investment management platform.

Last quarter, we completed nearly 160,000,000 of acquisitions and over the last twelve months, a total of $860,000,000 in acquisitions, including nearly $05,000,000,000 of Street retail. Reggie Livingston will walk through our transactions closed last quarter and the opportunities we are seeing going forward. Then the third driver is maintaining a solid balance sheet with the liquidity and the flexibility to drive both internal and external growth. John Gottfried will walk through our balance sheet metrics and successful refinancings last quarter and how this positions us for growth going forward. So taking a step back, as we look at the current operating environment, we seem to be in an ongoing tug of war with fear of tariff induced stagflation on one side and then surprising resilience on part of the consumer and the overall economy on the other.

So far, thankfully, team resilience seems to be winning. That is certainly what we are seeing as we look at our quarterly results. Resilience is showing up both in continued strong tenant demand for space as well as retailers’ performance in our portfolio. And this momentum is not just conceptual, it is reflected in many of our metrics, including $15,000,000 of executed leases in our S and O pipeline that John Gottfried will elaborate on further. For a variety of important reasons, retailers are looking past short term uncertainty and continuing with their leasing initiatives.

In meeting with our retailers, I’ve been impressed with their ability to successfully navigate tariff uncertainty. Now this is not to make light of the headwinds that tariffs could play on retailers’ profit margins. But unlike most of us who only began seriously focusing on tariffs on Liberation Day, most of our retailers have been refining their distribution channels for years. And this preparation by our retailers and then a resilient consumer is just part of the reason we are seeing continued momentum in our leasing. Other reasons include a favorable supply demand balance due to lack of new development.

And then probably even more importantly as it relates to our portfolio and to street retail, there is the added tailwind of retailers continuing to place greater long term value on establishing their own network of stores, often migrating sales out of department stores and into mission critical street locations. Additionally, our portfolio is concentrated in corridors that primarily serve highly affluent consumers. And while the broad consumer spending might be moderating some, the affluent consumer is continuing to maintain and in many instances, increased spending. With a strong stock market, a stable job market, our retailers are still seeing their shoppers showing up and we’re seeing this play out in our portfolio. While certainly not a perfect analogy, in the airline industry’s recent earnings reports, several airlines noted that while the industry is seeing some softening in the main cabin, premium seating demand continues at record levels.

So in short, these strong tailwinds, favorable supply demand backdrop, long term shift by brands to their own direct to consumer stores, the continued strength and demand by the affluent consumer. All these reasons help explain why even though our street retail portfolio is discretionary retail, the continued momentum we are seeing is in fact stronger for our street retail than in our other more necessity and value based open air formats. These tailwinds also impact how we think about external growth as well. This strong retailer demand for street retail coupled with its favorable lease structure makes street retail screen attractively from an investment perspective. It provides further support for why we are focused on building Acadia into the premier owner operator of street retail in The U.

S. The combination of strong contractual growth of generally 3%, coupled with more frequent accretive mark to market and lease up opportunities means we can deliver superior growth. In our case, we’re shooting for above 5% compounded annual growth for the foreseeable future. Furthermore, what makes us most excited about this segment of retail is seeing the benefits of scale that we’re achieving through both having a nationwide platform and more concentrated ownership in giving corridors. Our focus is to not just own strong individual stores, but rather making sure we own multiple stores clustered together in the right corridors.

We are seeing the benefits of this operating leverage in a majority of our street portfolio in markets ranging from M Street in Georgetown to North Sixth Street in Brooklyn to Henderson Avenue in Dallas. The benefits of owning street retail at scale not only helps our leasing efforts in a given corridor, it helps our leasing efforts nationally. And just as important, it helps our acquisition efforts as well. We’re seeing this operating leverage emerge in our street retail platform in ways that have remained more elusive in other open air formats that we’re active in. As we screen for specific investment opportunities, both on balance sheet and through our investment management platform, our philosophy of external growth is simple.

For our on balance sheet acquisitions, we will continue to allocate capital in a disciplined manner that is accretive to earnings, accretive to net asset to long term growth with a differentiated focus on those street retail markets where we can derive benefits of scale. As John will highlight, we have the liquidity and the flexibility to continue our balance sheet investments. And then equally important, our investment management platform enables our team to create value in a broader range of opportunities within our core competencies. Finally, our third driver is the continued health of our balance sheet. John will discuss how we continued to expand our liquidity, reduce our borrowing costs, extend our maturities.

And while we did not raise any equity last quarter, prior to that we raised over $800,000,000 providing us with flexibility for growth going forward. My one observation here is while the real estate equity capital markets are evidencing certain levels of uncertainty and volatility, the debt markets are very strong, both secured and unsecured, both proceeds levels and spreads. And while a healthy debt market is only one leg of the stool, it’s a critical one. So in conclusion, as we look forward, our multi year strong internal growth looks like it has several years of tailwinds behind it. Coupled with continued external growth opportunities and a balance sheet with multiple avenues of access to capital, we are well positioned to continue to execute.

And with that, I’d like to thank the team for their continued hard work and I’ll hand the call over to A. J. Levine.

A.J. Levine, Acadia Realty Trust: Thanks, Ken. Good afternoon, everyone. So first, let me start by echoing Ken’s comments. Our shopper, especially the higher income street shopper, continues to show no signs of slowing down. For anybody wondering how street retail is holding up, I would encourage you to visit our tenant, Dohen on Bleecker Street in the West Village Of Manhattan.

Ken Bernstein, President and Chief Executive Officer, Acadia Realty Trust: What you’ll see is a

A.J. Levine, Acadia Realty Trust: line that stretches out the door and down the street, and a twenty minute wait to use a dressing room. So Owen on Bleecker is just one example, but a similar display can be seen at Brandy Melville on the Gold Coast Of Chicago, SKIMS on M Street in DC, Sephora in Williamsburg in Brooklyn, or at any of the advanced contemporary tenants at our Green Street collection in Soho. This is a phenomenon that you will only see along our high growth streets, and it’s why our tenants remain in the game, off the sidelines, and continue to compete for space. But this isn’t just anecdotal. We hear it directly from our tenants, and we continue to see it reflected in reported sales.

Across our mission critical streets, our shoppers continue to show up in full force, and reported comp sales have increased double digits both quarter over quarter and year over year. Compared to what we’re seeing in our suburbs, the sales growth we’re seeing in our streets is staggering, with year over year growth on the majority of our streets well north of 20%. And with strong sales and healthy occupancy ratios, our tenants remain focused on long term growth. And as a result, we continue to see leasing momentum that’s ahead of the pace we’ve seen over the past several quarters and year to date sits at 2x the volume we achieved at this time last year. So to give you a sense of that activity, last quarter I mentioned our pipeline of $6,000,000 of leases in advanced stages of negotiation.

And since that time, in Q2 and so far in Q3, we’ve executed another 4,500,000 in new leases with substantially all of that volume coming from our high growth streets, where we see the highest annual contractual growth within our portfolio and relatively frequent opportunities to mark to market through F and V resets. So not only has the pace of our leasing accelerated, but we’ve already replenished and grown the active leasing pipeline, which now stands north of $7,000,000 of leases in advanced negotiation. Now looking at some of those markets more closely, SoHo continues to be a meaningful driver of our internal growth. In Q2 and early Q3, we signed new leases in SoHo with the luxury tenant Richemont and with Veronica Beard, which is a highly coveted advanced contemporary tenant. In addition, through our pry loose strategy, we recaptured another under market lease and simultaneously expanded and renewed Fairey, generating a double digit spread in the process.

Following quarter end, we also finalized two important renewals in our Green Street collection with Theory and Frame denim. So the Fairey, Theory, and Frame spreads blended to double digits and will all grow by 3% contractually. So while the SoHo portfolio is now 97% leased, we’re still finding opportunities to unlock embedded value, improve merchandising and enhance credit. On Armitage Avenue, we once again proactively recaptured an underperforming space and executed a double digit mark to market by bringing in Huckberry, a highly complementary brand that fits our curation on the street. Since the start of 2024, we have successfully mark to market over 40% of the tenants at Armitage Avenue at an average spread north of 50%, with the majority of those efforts resulting from our proactive Pry Lu strategy.

Even so, over half the leases within our Armitage portfolio remain 50% below market, which means there’s an embedded 25% mark to market opportunity remaining for us to unlock on Armitage. And for those remaining 60% of tenants that remain under market, we have already identified replacement tenants, and we are hard at work strategically prying those spaces loose. Again, we often use Armitage as a proxy for what we’re seeing across our streets, but similar mark to market opportunities exist elsewhere in our portfolio, including in markets like Bleecker Street in the West Village, Soho, Williamsburg, Melrose Place, and on Henderson Avenue in Dallas. A common thread across all of our high growth streets is that tenant demand continues to materially outpace supply, M Street being a perfect example. Despite limited availability, the team receives consistent interest from top tier brands asking when space will be available and if we can get it back any sooner.

We have a space right now on M Street that we’re in the process of recapturing and we already have three offers to backfill at a significant improvement to both rent and merchandising. Just a few months ago, the focus on M Street was around the potential impact of Doge, which never really materialized. In reality, the real challenge on M Street, like many of our streets, is how to accommodate three tenants that all want the same space. That’s where the benefits of scale and a concentrated portfolio come into play. By owning a sizable portfolio in the market, we can use that scale to be thoughtful about merchandising, while providing a home for each of those interested tenants and nobody goes home unhappy.

And we’re seeing a similar dynamic play out in SoHo, Melrose Place, Williamsburg and of course on Armitage. In each of those markets, we are actively negotiating deals well in advance of actual availability. And it’s not an easy task, but it’s one where our team continues to execute by recapturing and repositioning space in a highly accretive way. Shifting for a moment to San Francisco. For the last several years, the question was when will our tenants return?

Well, if the activity from this year is any indication, that time is now. In Q1, we announced a new lease with TNT for 50,000 square feet at our City Center asset and the dynamic co tenancy that TNT attracts. And so far under Mayor Lohrey and the new administration, our entitlements are significantly ahead of schedule. Now this quarter, I’m pleased to share that we’ve executed another key lease, this time with LA Fitness’s Club Studio concept, who will occupy around 35,000 square feet at 555 Ninth Street. It’s another clear signal that the momentum in San Francisco is building.

And given Club Studio’s pricing and targeted audience, it’s another indication of the strength of the higher income consumer. Now while I can’t share the specifics just yet, we are currently in discussions for another impactful lease at 05:55 Ninth, which we hope to announce in the coming months. Staying out west in Las Vegas. At the Link Promenade, which is an asset we own in our investment management platform, early signs have been very encouraging. After signing three new leases, we are already well ahead of pro form a.

And even with the ebbs and flow of tourism in Las Vegas, retailers are looking past short term choppiness and remain focused on strategic long term growth. And finally, quick update on City Point in Downtown Brooklyn, where both traffic and comp sales are up double digits year over year. Earlier this month, we celebrated the grand opening of Van Lewin ice cream, in addition to signing two new leases, including one with Swarovski along our Prince Street passage. The momentum that’s been building over the last several quarters with the opening of the park and the addition of Sephora is only accelerating and we currently have an additional 20,000 square feet of space under advanced negotiation, most of which is concentrated on our highest valued space along Prince Street and across from the park. While some of that space is currently occupied by temporary tenants, in contrast to that temporary income, these long term leases would allow us to achieve our pro form a rent expectations.

So with that, I’m happy to report another quarter of strong leasing. Thank you as always to the team. And with that, I’ll hand it off to Reggie.

Reggie Livingston, Acadia Realty Trust: Thanks, AJ. Good afternoon, everyone. I’d like to share specifics around our Q2 acquisition activity and provide insight on how we’re positioning the company for continued growth. As noted in our earnings release, we completed nearly $160,000,000 of acquisitions in the quarter. And these acquisitions continue our focus on the core pillars of our external growth business: FFO and NAV accretion, strong CAGR and increasing our concentration in key markets.

And Q2 was another quarter of delivering on that mix. So let’s discuss those deals in more detail. We closed over $100,000,000 of deals along the key retail corridor in Williamsburg, Brooklyn, North Sixth Street. The buildings, including 70939597 And 107 North Sixth Street, are on the most prime blocks along the corridor. And the tenants include great contemporary brands such as Lululemon, Abercrombie, Missouri, On Running, Birkenstock, and Patagonia.

And while this concentration of names in three blocks is great for our consumers, it also benefits our shareholders. In an eight month time period, we have purchased 10 storefronts along North 6, laying the foundation for the benefits of that scale to drop to the bottom line in the form of higher rents, as Ken and A. J. Have discussed. Also, in the vibrant Flatiron Union Square submarket in Manhattan, we acquired 85 Fifth Avenue for $47,000,000 asset is on a key corner in the market and leased to a Fortune 100 company.

It marks our fourth storefront in this market where we see a favorable supplydemand dynamic that should continue to drive rent growth. So where does this leave us through the first half of the year? We’ve acquired $420,000,000 of assets, delivering accretion consistent with our 1p per $200,000,000 target, with an attractive going in gap yield in the mid-6s and five year CAGR in excess of 5%. Bottom line is we continue to deliver on our external growth mandate despite some of the first half headwinds of capital market volatility, political noise, and economic uncertainty. So now let’s turn to the second half of the year.

What are we seeing and what are we focused on? There’s no sign that asset pricing has receded. Private capital has stepped into any void from volatility in the REIT sector, ensuring prices remain firm. Despite this competitive environment, we’re pretty confident we can remain active for the balance of the year. And I’d point to two reasons underlying that confidence.

One, while institutional investor interest in retail remains strong, street retail in particular is a less crowded trade. And we maintain an actionable street retail pipeline so we can pounce when the cost of capital stars align through capital recycling or otherwise. And remember, the majority of our balance sheet acquisitions consist of off market transactions, so we’re already missing opportunities in any period of inactivity. In fact, all three fifty million dollars of balance sheet acquisitions this year were either off market or buying out existing partners. So this pipeline development is a key ingredient in our ability to act quickly when we see our accretion objectives can be met.

And the second reason is our investment management platform, where we are not dependent on accessing the public markets, is busy underwriting north of a billion dollars of assets that fit squarely into our core competencies. The increased number of retail investors has brought many sellers off the sidelines, hoping to monetize in this high demand environment. And as always, we’ll be disciplined for the right deals and are confident we’ll get our fair share of these opportunities. So to summarize, our 2Q activity continued to connect the dots in key corridors with strong long term growth potential, and our focus on that remains unabated. And we’re seeing exciting opportunities for our investment management platform where we can leverage our talent and our institutional capital relationships.

I want to thank the team for their hard work this quarter. And with that, I’ll turn it over to John.

John Gottfried, Acadia Realty Trust: Thanks, Reggie, and good afternoon. We had another strong quarter and are continuing to see stability along with positive momentum building across our Street retail portfolio. And the aspects of our business that continue to excite us include the continuation of NOI growth in excess of 5% for the next several years, the strength and liquidity of our balance sheet, and lastly, our ability to add external growth, whether that be on balance sheet or through our investment management platform. In terms of growth, we remain on track to deliver 5% to 6% same store NOI growth this year. And this growth is dropping to our bottom line, with projected year over year NAREIT FFO growth of about 10% at the midpoint of our guidance.

Secondly, our balance sheet is rock solid. We have over half a billion dollars of liquidity, along with the financial flexibility to accretively fund and grow our business. And lastly, external growth. As Reggie highlighted, our pipeline of actionable opportunities is full, and we have various avenues to fund it, whether it be with on balance sheet dollars or with institutional capital through our investment management platform. And before diving into the quarter, I want to spend a moment to reiterate and put some data behind the continued leasing momentum that we are seeing, particularly within our street and urban markets.

At our proportionate share, we executed approximately $7,500,000 of new leases in the 2025. And just to put that in context, equates to approximately 3.5% of annualized minimum rents and is up nearly 100% over the $3,800,000 of leases that we executed during the comparable period in 2024. And it’s also worth highlighting that this momentum is coming from our street and urban portfolio. With approximately 85% of the executed leases in 2025 coming from this portfolio, compared to 30% in 2024. Now let me walk through some of the details of the second quarter and starting with earnings.

We reported NAREIT FFO of zero two seven dollars a share, representing an 8% increase over the $0.25 that we reported in 2024. And at the midpoint of our 2025 guidance, our NAREIT FFO is on track to be up approximately 10% year over year. Additionally, FFO as adjusted for realized gains from the sales of Albertsons stock was in line with our expectations at $0.32 a share. And now moving on to same store NOI and occupancy. As outlined in our release, we reaffirmed our expectation of 5% to 6% core same store NOI growth for the year.

As we had discussed on prior calls and embedded in our initial guidance, the 2025 reflected our Pry Luce strategy of proactively taking back below market space and accelerating mark to market opportunities within our Street retail portfolio. And we remain on track to see a 200 to 300 basis point acceleration of same store growth in the 2025 as these locations come online. And while as a matter of practice, we don’t formally update our annual same store NOI guidance, but we are trending towards the midpoint, if not slightly ahead, of the 5% to 6% annual same store growth. Additionally, driven by occupancy gains in our Street and Urban portfolio, we increased our total core occupancy by 50 basis points to 92.2%, and anticipate that we further increase occupancy to 94% to 95% by year end. I now want to focus on our leasing pipeline, which is probably one of the most important data points that we want to highlight this quarter.

And it’s this strong and growing pipeline that reinforces our conviction and confidence that we are laying the foundation to continue delivering NOI growth in excess of 5% for the next several years. And as always, I will warn those modeling to get ready. I’m now going to spend a few moments walking through how anticipate that this $15,000,000 pipeline of signed not yet open leases will impact our future earnings, same store NOI, and occupancy. As outlined in our release, the $15,000,000 represents nearly 7% of pro rata ABR, with approximately 85% of it coming from our street and urban portfolio. And it is entirely comprised of incremental ABR, meaning it represents executed leases on space that is currently unoccupied.

And finally, all amounts that I have and will be discussing are at our proportionate share. The $15,000,000 pipeline is comprised of 7,800,000 in core operating, which as a reminder, means our same store pool. Dollars 6,500,000.0 comes from our core redevelopment projects, and $700,000 comes from our share of the investment management business. So let’s first start with the overall earnings impact. 12 of the $15,000,000 will hit our bottom line earnings after adjusting for interest and other carrying costs that we are currently capitalizing, primarily for core assets and redevelopment.

And in terms of estimated timing and impact on annual earnings, approximately $11,000,000 of the $15,000,000 of ABR is projected to commence in the 2025, with the remaining $4,000,000 expected to commence in 2026. And when layering in the expected rent commencement dates, we are expecting incremental earnings of approximately $3,000,000 in the 2025, of which $2,500,000

A.J. Levine, Acadia Realty Trust: of this is expected to

John Gottfried, Acadia Realty Trust: be reported within our same store pool, followed by incremental earnings of $8,500,000 in 2026, with approximately $5,300,000 of this being same store, leaving us with $3,500,000 of incremental earnings in 2027. Please note of the amounts that I just discussed, this reflects just the ABR impact of the $15,000,000 meaning the actual NOI will differ slightly, as it doesn’t factor in the additional tenant recoveries that we will receive or the impact of the cost capitalization I mentioned earlier associated with assets and redevelopment. So while it’s a bit early, our initial 2026 model has our NOI increasing in excess of 10%. And while our team still has some leasing to do to achieve this target, we are well on our way with the $15,000,000 of executed leases in our S and O pipeline. So stay tuned as we refined our 2026 budgets and expectations, but given the strong and continued momentum of NOI growth as we head into 2026, along with a fully hedged balance sheet with no meaningful maturities, we remain confident that this NOI growth will drop to our bottom line earnings.

Additionally, as we prepare for our 2026 earnings guidance, while we aren’t revising any of our earnings metrics for 2025, we are exploring ways to simplify our reporting to clearly highlight the anticipated NOI growth from our real estate business. And while we have increased conviction on our NOI heading into 2026, there’s inherently more variability of other items that could factor into our bottom line earnings, whether it’s the transactional profits for our investment management business or the interest income from the CityPoint loan. But keep in mind, while these profitable parts of our business can certainly cause some variability and or timing implications in our quarterly earnings, they have minimal, if any, impact on NAV and thus how we think about the value of our company. As it relates to the Investment Management business, our transactional gains over the last few years have come from the sale of Albertsons stock. As of June 30, we have approximately 500,000 shares remaining.

And as a reminder, our current intent is to monetize the balance of our holdings in 2025. And as we think about the $2,000,000,000 plus of assets under management in our investment management platform, we are continuing to actively execute our business plans. And while it’s too early to pinpoint specific timing, we are currently projecting net profits in excess of $30,000,000 And as always, we will provide additional details as to the timing and structure as we get closer to execution. And now turning to the CityPoint loan. As a reminder, our partners have the ability to convert their interest at any point, which, again, as we discussed, would be dilutive to our short term earnings, but ultimately accretive upon the asset stabilization.

And while our partners remain pleased with the progress we have made, we expect that some of our partners will convert this year. And just for context, and for those modeling our 2025 earnings, if all of our partners were to convert point during the third quarter, which is not our current base case, it would be about $3 dilutive in the short term. But as I said, the short term dilution would be recaptured through incremental NOI as the asset stabilizes. So stay tuned. And as we’ve said for a while, we look forward to continue expanding our ownership interest in CityPoint, particularly at this pricing into this irreplaceable asset in Downtown Brooklyn.

And finally, I will close with an update on our balance sheet, which remains rock solid. So while we continue to remain disciplined, we have the liquidity and dry powder on call to fund the accretive core and investment management opportunities that Reggie and his team are actively pursuing. At June 30, we had approximately $600,000,000 of available liquidity, with net debt to EBITDA at 5.5 times. Additionally, we continue to see strong support from our lending partners. During the quarter, we executed a new five year $250,000,000 term loan, enabling us to reduce our borrowing costs and extend duration.

The facility was priced at 120 basis points over SOFR, which when factoring in the impact of the interest rate swaps, equated to an all in cost of about 4.6%. So in summary, given the continued leasing momentum and strong pipeline of external growth opportunities, supported by a fully hedged and liquid balance sheet, we are excited at our growth prospects over the next several years. And with that, I will now turn the call over to the operator for questions.

John Forrester, Property Accountant, Acadia Realty Trust: Certainly.

Conference Operator: Our first question comes from the line of Linda Tsai from Jefferies. Your question please.

Linda Tsai, Analyst, Jefferies: Yes, hi. Could you speak disconnect between the performance in your stock price and the underlying health of your portfolio? It seems like a reason Acadia stock has underperformed is due to tariff concerns and your tenants being more exposed to discretionary spending. What do you think the market is missing and what’s the catalyst that could spur better stock performance?

Ken Bernstein, President and Chief Executive Officer, Acadia Realty Trust: Yeah. Well, Linda, certainly when Liberation Day was announced and there were concerns of the impact of tariffs on the economy and the consumer. I’d say conventional wisdom was that we were more likely than not heading to a recession, more likely than not facing a period of stagflation. What we have seen now based on our, leasing activities, based on conversations that we’ve had with our retailers, based frankly on the shifting views of the economist is that we look more likely than not we’re going to avoid those serious headwinds. So point number one is that our leasing is holding up just fine.

Point number two is I think the market is underestimating the secular tailwinds that I discussed in the prepared remarks. But just to repeat them, the secular tailwind is that we are experiencing in street retail specifically. And that is the migration from wholesale, the migration out of department stores and into DTC, meaning our retailers are recognizing it is mission critical that they have these locations. It helps that the consumers continuing to show up. It helps that these stores are very profitable, but they are also looking over the next three, five, ten years and realizing they need to be on the corridors that AJ was talking about, that Reggie was discussing.

They need to have these mission critical locations. And so, yeah, it has been a volatile six months due to all of that noise, but I think the proof is in our leasing fundamentals.

Linda Tsai, Analyst, Jefferies: And then maybe related to that, my second question is, could you compare and contrast what landlord scale looks like in a suburban shopping center portfolio versus street retail? Like what’s the tenant negotiating power for consumer draw of dominating a suburban market within a gateway MSA versus, say, owning 10 storefronts in Williamsburg, Brooklyn?

Ken Bernstein, President and Chief Executive Officer, Acadia Realty Trust: Yeah, and this has been one of the fascinating eye opening experience that I’ve seen over the last year or two after having been in the open air industry for decades. Traditional open air suburban shopping centers, finding the benefits of scale beyond simply just reducing G and A as a percentage of revenue as we got larger, finding those benefits vis a vis our retailers, ability to drive more rents, drive more NOI, that has always been elusive. When I compare notes with my peers, public or private, we just have not been able to see significant economies of sale, positive leverage, things like that. Conversely, what we’re beginning to see in street retail is significant benefits within any given corridor. What AJ estimates is where we own enough stores in a given corridor, given our relationships with the retailers, given our ability to curate, we’re able to get approximately 10% more rent than if we owned just one building or if we were not national scale.

Then you add to that benefit the national scale that we have with these retailers. And we are regularly in front of virtually all of our retailers and the C suites of these retailers. And it’s much more of a partnership than what we have experienced in the more traditional OpenAir side. Now it used to be that way in Open Air if you were a preferred developer, but now that new development is really not a driving factor for our retailers, we’re just not seeing that benefit. Conversely, for street retail, we’re seeing it within the given quarters, we’re seeing it nationally on the leasing side, and then we’re also seeing it on the acquisition side.

And by that, I mean we are the first call or a buyer of choice, bidder of choice for street retail because we have the proven track record, because we have the capital, because we have the know how. You add that up and it’s a pretty exciting time to be focused on building out this platform, which is already well on its way, but we think we will see continued economies of scale, continued benefits of scale as that plays out.

Conference Operator: Thank you. And our next question comes from the line of Craig Mailman from Citi. Your question please.

Sydney McInty, Analyst, Citi: Hi, this is Sydney McInty on for Craig. So there were a couple acquisitions on North Sixth Street in Williamsburg during the quarter and Acadia now controls about $110,000,000 in that submarket. Could you just talk a little bit more about the mark to market opportunities for those acquisitions and the market as a whole? Thanks.

Ken Bernstein, President and Chief Executive Officer, Acadia Realty Trust: Reg, you want to start and then A. J. Chime in? Sure.

Reggie Livingston, Acadia Realty Trust: Sure. So one of the things that we focus on when we’re thinking from a GAPIO perspective is, are there mark to market opportunities? And so when we talk to our tenants, and we do this in conjunction with A. J. From an acquisition standpoint, and find out when the actual leases were signed, how the tenants are performed, we think there’s running room ahead of us from a mark to market standpoint.

Specifics I won’t get into, but AJ, you can add to some of that generally speaking.

A.J. Levine, Acadia Realty Trust: Yeah, look, Reggie, your team has done a great job identifying undermarket leases. The challenge for my team, of course, is now we got to get to work prying them loose. But I can tell you, in a market like Williamsburg, similar to what we’ve seen on Armitage, we’re seeing 20 plus percent mark to market opportunities in the majority of our streets. But that’s not unique to Williamsburg. That’s true for Bleecker and West Village, Armitage, like I said, Soho, Melrose Place, Henderson Avenue.

Each of those, because of the performance over the last year, because of the strength of tenant demand, easily has double digit upwards of 20%, 25% mark to market. And then I’ll just to finish on that, where we can control a meaningful portion of a given street, and

Ken Bernstein, President and Chief Executive Officer, Acadia Realty Trust: it doesn’t mean a majority. It generally means about 30%, which we are now on North 6. Where we can have that meaningful impact, we then find we can benefit and drive rents and performance for our retailers even higher. Because of curation, putting in the right retailers, we can increase sales. Because of being able to move faster if a tenant wants to be larger or smaller.

If they have a new concept, we’re in front of them, so we know what we can do. And I think what you’ll see play out on North 6, as you’ve seen in Armitage, as you’ve seen on M Street, is that kind of benefits of scale.

Sydney McInty, Analyst, Citi: Thanks. And then one more, maybe along that vein. Have you seen any meaningful changes in the transaction market in terms of either the competitive landscape for these street retail assets or in terms of sellers coming to the market?

Reggie Livingston, Acadia Realty Trust: Yeah, I think for April 2, Liberation Day, there was a bit of a pullback. I think Ken alluded to that, a bit of a pullback on the street retail side from sellers. But the fundamentals that Ken and AJ have talked about aren’t a secret. So we’re starting to see more and more sellers saying, Okay, the ward is fine, let me tip my toe back out there. And we’re having these conversations every day.

As I said, the vast majority of our street retail acquisitions are off market, so we have to be constantly in dialogue with a lot of these sellers. So I do think they’re coming to the market more and more, and we’ll continue to see that over the balance of the year. From a competition standpoint, a lot of the institutional investors are a little more focused on the other segments of open air, so we really like the opportunity in street retail because we do think it’s a less crowded trade, as I mentioned before.

Conference Operator: Thank you. And our next question comes from the line of Andrew Riali from Bank of America. Your question please.

Ki Bin Kim, Analyst, Truist: Hey, good afternoon. Thanks for taking my questions. How would you characterize the pipeline for investment management deals similar to the Link Promenade? Could we see a similar large scale investment management deal in the near term?

Reggie Livingston, Acadia Realty Trust: Bret, you want to? Sure. I think you do. I think the large deals are out there, a lot of them are on the market. Obviously, we’re going to be disciplined.

We’re only going to do the deals that make sense. But I think what you’re seeing is a bunch of sellers and even of larger deals two, three years ago when the retail market wasn’t as mature or retail wasn’t in favor. Now that that retail market and the retail generally is in favor, you’re starting to see a lot of those large deals, either through direct conversations or marketing, where people are saying, Hey, maybe we can get the opportunity to execute on large deals. So we’re underwriting several of those large deals as we speak.

Ki Bin Kim, Analyst, Truist: Okay, thanks. And then a lot of talk on the Street portfolio today, but it would be helpful if you could just discuss how your suburban assets are performing and if there have been any changes to that watch list or near term vacate risks in that portfolio. Thanks.

Ken Bernstein, President and Chief Executive Officer, Acadia Realty Trust: Yeah, and I think you’re seeing this amongst our peer reports and AJ, I’ll let you chime in as well. Due to the lack of new development, high quality suburban retails holding up just fine. There were some tenants on the watch list, but what I think what we’ve seen both in terms of our leasing and then just in terms of overall tenant demand seems to be very strong filling in any of those watch list items. AJ, what would

A.J. Levine, Acadia Realty Trust: Yeah, I would definitely, there was a flurry of, you know, watch list kind of, you know, filing bankruptcy. We saw from Party City, you know, the majority again of which were in our suburban portfolio. Luckily, we didn’t have a tremendous amount of exposure there. I’d say the growth is there, it’s not the same growth that we’re seeing on our streets. And just I think it’s an important distinction to make and just to touch on the conversation of curation earlier.

One of the differences between suburbs and the streets is obviously the length of term, right? And our ability to continuously identify those under market and underperforming tenants and pry them loose. The other big distinction is, of course, CapEx, When we take back space, proactively or otherwise, on our streets, the amount of money we have to spend backfilling that space in relation to the rent is relatively small in relation to the CapEx we have to spend in the suburbs. So it’s a much more impactful event to take back space in suburbs in relation to what we’re seeing on our streets, where typically the payback is less than a year as opposed to upwards of five years or so to replace a box in the suburbs.

Conference Operator: Thank you. And our next question comes from the line of Ki Bin Kim from Truist. Your question please.

Ki Bin Kim, Analyst, Truist: Thank you. Good morning. So a lot of positive commentary on your street and urban assets. Just for Kim, maybe for Ken, where do you think occupancy ends up at the ’5 versus at 90.8% today and in 2026?

John Gottfried, Acadia Realty Trust: Ki Bin, you’re referring specifically to the street?

Ki Bin Kim, Analyst, Truist: Yes, street and urban retail occupancy.

John Gottfried, Acadia Realty Trust: Yeah, so I think, again, I care more about what spaces we lease than the actual percentage, just given just a wide variation of spaces. But I think in terms of absolute occupancy, think we’re trending in the 92% by the end of the year for street and urban.

Ki Bin Kim, Analyst, Truist: Okay. And John, you provide a lot of color on the financials. I think you mentioned you think NOI can increase 10% next year. I’m not sure if I heard that correct. But if I did, what portion of that 10% increase is same store?

Thank you.

John Gottfried, Acadia Realty Trust: Yes. So that you did hear that correctly. And the portion that is same store give me one second here. So in ’26, we are expecting total incremental, this is just from our pipeline, but from the S and O pipeline, we’re expecting total NOI of $8,500,000 showing up in ’26, of which 5,300,000.0 of that will be in the same store pool. Keep it also keep in mind that 3% contractual we get with our streak goes on top of that, plus AJ talked about his pipeline of stuff.

So again, not giving 2026 guidance, but just given where we are in the year and that 10% that we’re targeting, we feel pretty good about.

Ki Bin Kim, Analyst, Truist: Okay, thank you.

Conference Operator: Thank you. Our next question comes from the line of Michael Mueller from JPMorgan. Your question please.

0: Yes, hi. I guess, first, John, maybe a couple things on CityPoint. First, just want to confirm the CityPoint loan you’re talking about, that’s not in the supplemental Page 16 structured investment schedule. That’s separate from that, right? And then was the $03 dilutive that you referred to if everybody converts, was that a $20.25 number, annualized number?

Can you just give us a little more specifics there?

John Gottfried, Acadia Realty Trust: Yeah. So, Mike, I think in terms of the, dilution, that would be if every single one of them converted in the third quarter. So that is certainly not our expectation, and that would be on ’25.

0: So that’s a ’25.

John Gottfried, Acadia Realty Trust: Okay. That’s a ’25. All of them were to convert, which is certainly not our base case. So that was just the the ultimate magnitude of it. And then that the CityPoint loan is included in that supplemental on in the, in the loan balance.

0: Got it. Okay. I forget if you can have a follow-up here or not, but, I’ll throw it out anyway. Following up on the prior question, in terms of the occupancy level, just drilling down to the street where you’re at 85% at June 30 or so. I remember in prior calls, you pointed toward closer to 90% by year end, high 80s.

Does that still seem on track at this point during the year It does. For the Street

John Gottfried, Acadia Realty Trust: Yes.

Conference Operator: Thank you. And our next question comes from the line of Todd Thomas from KeyBanc Capital Markets. Your question please.

1: Hi, thanks. First question, hey John, so I just wanted to clarify on that year end occupancy target that you mentioned, ninety two percent for the Street portfolio. Is that comparable to specifically that 85.2% in place occupancy for Street or is that more comparable to the leased occupancy, which is at 90.8%, as of June 30?

Ken Bernstein, President and Chief Executive Officer, Acadia Realty Trust: So Tal, just maybe take a step back.

John Gottfried, Acadia Realty Trust: So I think what total core operating occupancy, we think that’s our at our pro rata shares in the 94% to 95%. The street and urban, I think we are and again, we look at what’s ABR and what’s basis, so the percentage, I’m not quite as focused on, but I think we get to street alone, following on Mike’s question, we get to about 90, and when you factor in urban, it could be a little bit higher, given the nature of those are bigger spaces. So, overall 94 to 95, and we think that we get to around 90, you know, the low 90s for the street and urban piece.

1: Okay. And then, I just wanted to follow-up a little bit further on leasing and some of the conversations around, the mark to markets. We talked about Armitage and then Williamsburg. If we step back and look at the entire core portfolio where you have about 17% or 18% of ABR scheduled to expire through the ’6. Any early thoughts on the outlook for tenant retention through that time period?

And do you have any general idea on mark to market or what kind of leasing spreads you might anticipate based on current demand and where market rents are today?

A.J. Levine, Acadia Realty Trust: Yes, look demand is very strong. The only sort of role that I anticipate frankly is space that we are proactively taking back, and we have a track record of doing that. So we’ll take back underperformers, you’re going to have a period of time where you’re going to see occupancy dip, and then it returns at a higher total ABR. We’re not really seeing and I’m not really forecasting any significant move outs other than ones where I’m going to take it back proactively and replace them accretively.

Ken Bernstein, President and Chief Executive Officer, Acadia Realty Trust: Mark to markets on Berry Street?

A.J. Levine, Acadia Realty Trust: Yeah. Mark to market is like I said, blending across our Street portfolio is double digits and we don’t drill into individual markets, but the majority of them are seeing upwards of 20% mark to market opportunity embedded in those leases.

Ken Bernstein, President and Chief Executive Officer, Acadia Realty Trust: Just let me chime in from a pleasantly surprising position compared to, let’s say, November, December, if we were talking and where we are relative today. In terms of tenant interest, in terms of tenant performance, in terms of tenant renewals, in terms of rents, everything is holding up, notwithstanding a lot of noise and nonsense that we’ve gone through in the last six months. And so far we haven’t seen, especially for street retail, any meaningful deterioration whatsoever. One retailer early on after Liberation Day put a couple of leases on hold and then they quickly signed thereafter. And I can’t think of another instance where a retailer has said, we are slowing down, we can’t afford the rent, we no longer need to be here.

So whatever we were guiding to in November, December, AJ,

John Gottfried, Acadia Realty Trust: you sure as heck better deliver it. Yeah.

A.J. Levine, Acadia Realty Trust: Just to clarify, that one retailer, the deals they were putting on hold were what they called non mission critical markets, suburban markets, frankly. They were still moving forward with mission critical street leases, frankly. We signed one with that retailer. Right. So it’s an important distinction.

John Gottfried, Acadia Realty Trust: Thank

Conference Operator: you. And our next question comes from the line of Floris van Dijkum from Ladenburg. Your question please.

: Hey guys. So are you worried about the movement Think Reggie, you indicated that there’s still very strong investor demand. And Ken, you were talking about spreads being pretty tight right now. What does that mean for cap rates in the markets that you want to expand in presumably, Soho, Williamsburg, maybe on Rush and other key quarters.

Can you buy as attractively as what you’ve been able to achieve so far? And I guess the follow-up on that is you do have a little bit of liquidity. Would you consider selling some more suburban where cap rates are also pretty tight to be able to fund some of the growth in your street portfolios?

Ken Bernstein, President and Chief Executive Officer, Acadia Realty Trust: Reggie, let me first talk about some of the different ways that we can continue to drive growth and then why don’t you chime in on what you’re seeing. And yes, Floris, you’re absolutely correct. We do think we can sell assets in the suburban side or migrate them as we have done, into our investment management platform without any material impact to earnings and use that capital along with additional dry powder that we have, along with other avenues of capital. So we can continue to be active as we see opportunities. Reggie touched on before sellers are starting to show up again.

What I would caution is cap rates are much trickier in street retail going in yields because of all of the moving pieces. And we, our team is able to underwrite through that and understand what the long term IRRs, the long term yield. And I am confident that we’ll be able to find deals, find the right way to capitalize on them and proceed. Sure, there’s some competition. Blackstone has showed up periodically.

There’s other legitimate bidders out there, but for the most part there is so much less competition that I’ll leave it to Reggie and his team to make sure that we’re continuing to see our fair share of attractive investments. Reg?

Reggie Livingston, Acadia Realty Trust: Yeah, and I think we’re seeing those attractive investments. And I think big picture from a cap rate standpoint, obviously, as Ken said, particularly on the street, is dependent on one building to the next, Two buildings next to each other with different mark to market opportunities, different lease expirations are going to trade differently. But big picture, in the markets that we’re really focused on, it could easily be low fives in a SoHo and mid fives plus elsewhere, but also six plus elsewhere, right, in other markets around the country. So that’s why we were really focused on portfolio construction. We think we can find the right level of assets in 5% to 6% cash yields, GAAP yields in the mid sixes with that outperforming CAGR because of the mark to market that really, to Ken’s earlier point, really screens very well from an IRR standpoint.

So I think we’re finding those attractive opportunities and aren’t deterred.

: And guess maybe the follow-up question, which is somewhat related is today, if you think about it, your ABR is about 100,000,000 from street 60,000,000 from suburban. What is that going to look like in three years time if you had a crystal ball, can and what ideally, what would you like it to look like?

Ken Bernstein, President and Chief Executive Officer, Acadia Realty Trust: Yeah, if I had ever had a crystal ball, I threw it out during COVID. I believe that our shareholders will benefit from our dual platform, meaning having in our core portfolio, the vast, vast majority of our assets being street and urban retail, where we will be the premier owner operator of street retail in The United States. Whether that means migrating assets off balance sheet on the suburban side or otherwise. It really needs to be growth at appropriate prices, appropriate time of street retail. I see no reason why based on the deal flow we’re seeing, if the stars align, there’s no reason we couldn’t double the size of our street retail portfolio accretively, accretive to net asset value, accretive to earnings, and that will be the main focus on balance sheet.

At the same time, our investment management platform activities is where you will see any and all of our suburban activity, our opportunistic activity, deals like the link that we touched on earlier today. And so If I had a crystal ball, Florist, that’s what I would predict.

Ki Bin Kim, Analyst, Truist: Thanks, Ken. Sure.

Conference Operator: Thank you. This does conclude the question and answer session of today’s program. I’d like to hand the program back to Ken Vernstein for any further remarks. All right.

Ken Bernstein, President and Chief Executive Officer, Acadia Realty Trust: Well, thank you all. Hope you all enjoy the summer. We look forward to speaking with you again next quarter.

Conference Operator: Thank you, ladies and gentlemen, for your participation in today’s conference. This does conclude the program. You may now disconnect. Good day.

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