ACADIA REALTY TRUST (AKR)·Q2 2025 Earnings Summary

Executive Summary

• Q2 2025 results were stable operationally: GAAP diluted EPS was $0.01, flat year over year; NAREIT FFO/share rose to $0.27 (+8% YoY), and FFO Before Special Items/share increased to $0.32 (+$0.01 YoY) .
• Same-Property NOI grew 4.2% in Q2 (reaffirmed FY growth of 5–6%), with Core occupancy up 50 bps to 92.2%; leased occupancy was 94.7% at quarter-end .
• Guidance: FFO ranges maintained; GAAP net earnings guidance reduced to $0.09–$0.13 (from $0.12–$0.16) on higher impairment charges, while FFO metrics were reaffirmed; dividend remained $0.20/share in Q2 .
• Capital and portfolio catalysts: $157M of Street Retail acquisitions (Williamsburg, Flatiron/Union Square), new 5‑year $250M delayed draw term loan (initial all‑in ~4.6%), and a $15M signed‑not‑open ABR pipeline (~7% of pro‑rata minimum rent) supporting 2H ramp .
• Versus S&P Global consensus: Revenue beat; FFO/share and EPS missed. Expectation resets likely focus on near‑term earnings cadence (Albertsons gains, redevelopment timing) and occupancy ramp as pipeline commences (see Estimates Context). Values retrieved from S&P Global.*

What Went Well and What Went Wrong

What Went Well

• Street Retail momentum drove core growth: “We delivered another strong quarter… our same‑property NOI is on track to grow 5–6% this year” and expanded NYC scale in Williamsburg and Flatiron/Union Square .
• Leasing/Occupancy improved: Core occupancy rose 50 bps to 92.2%; SNO pipeline held at ~$15M (~7% of pro‑rata minimum rent) with ~$4.5M ABR commencing late Q2, underpinning 2H acceleration .
• Balance sheet strengthened: New $250M delayed draw term loan (drawn $175M) at ~SOFR+120 bps (~4.6% all‑in) increased liquidity; revolver capacity $471.5M; Net Debt/EBITDA improved to 5.5x (from 6.3x YoY) .

Quotes:

• “We have a strong and liquid balance sheet, an irreplaceable Street Retail Portfolio and an Investment Management Business that is built to capitalize in all cycles.” – CEO Ken Bernstein .
• “We remain on track to deliver 5–6% same store NOI growth this year… projected YoY NAREIT FFO growth of about 10% at the midpoint.” – CFO John Gottfried .

What Went Wrong

• Impairment charges impacted GAAP EPS: $4.2M impairment (net of NCI) on two Investment Management properties ($0.03/share) weighed on GAAP net income; guidance for GAAP EPS reduced accordingly .
• Cash leasing spreads negative in Q2: Conforming cash leasing spreads were (5.6%) due to SoHo lease rollover from a prior‑peak 2015 vintage; management indicated subsequent double‑digit spreads post‑quarter .
• Leased occupancy dipped 80 bps QoQ to 94.7% due to anticipated suburban bankruptcies (Joann Fabrics, Party City) totaling ~30 bps of ABR impact at share .

Financial Results

Segment and KPI details:

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “Taking a step back… we seem to be in an ongoing tug of war with fear of tariff-induced stagflation… and surprising resilience on the part of the consumer… Resilience is showing up both in continued strong tenant demand for space as well as retailers’ performance in our portfolio.” – CEO Ken Bernstein .
• “Our shoppers continue to show up in full force and reported comp sales have increased double digits… with year over year growth on the majority of our streets well north of 20%.” – EVP Leasing AJ Levine .
• “We reported NAREIT FFO of $0.27… FFO as adjusted… $0.32 a share… we reaffirmed our expectation of 5% to 6% core same store NOI growth for the year.” – CFO John Gottfried .

Q&A Highlights

• Stock underperformance vs fundamentals: Management highlighted market’s underestimation of secular tailwinds in street retail (migration to DTC, affluent demand), and strong leasing as proof points .
• Benefits of scale (street vs suburban): Street corridor concentration enables ~10% more rent through curation and national relationships; economies of scale more elusive in suburban open‑air .
• Mark‑to‑market opportunity: Double‑digit (20–25%) embedded mark‑to‑market potential across corridors like Williamsburg, SoHo, West Village, Melrose, Henderson Avenue .
• Occupancy trajectory: Targeting ~90%+ street/urban by YE, 94–95% total core; SNO commencements drive uplift .
• Investment Management: Underwriting several large‑scale deals; platform offers non‑public capital pathways .
• City Point conversion: Partner conversions could be short‑term EPS dilutive (~$0.03 if all converted in Q3, not base case) but accretive as asset stabilizes .

Estimates Context

Values retrieved from S&P Global.*
Implications: Street-driven revenue strength outpaced consensus, but FFO/share and GAAP EPS missed on higher non-cash impairment and timing of realized gains/promotes and redevelopment commencements. Expect estimate revisions to reflect near-term GAAP EPS impact and the cadence of SNO commencements into 2H25–2026 (management preliminarily targets >10% NOI growth for 2026) .

Key Takeaways for Investors

• Street Retail thesis intact: Corridor scale and affluent demand are driving leasing velocity and double‑digit mark‑to‑market—expect sustained internal growth above 5% compounded .
• 2H 2025 setup: ~$11M of $15M SNO ABR slated to commence in 2H25, with incremental earnings layering through 2026; watch occupancy progression to ~94–95% core .
• Earnings quality mix: Near‑term GAAP EPS volatility from impairments and transactional items; FFO Before Special Items/guidance reaffirmed—focus on FFO and NOI trajectory .
• Capital flexibility: New $250M term loan (all‑in ~4.6%) and $471.5M revolver capacity reduce refinancing risk; Net Debt/EBITDA at 5.5x provides room for disciplined external growth .
• Portfolio curation: Recent $157M acquisitions in Williamsburg and Flatiron/Union Square deepen corridor control—expect enhanced merchandising and rent uplift potential .
• SF recovery optionality: LA Fitness Club Studio at 555 9th adds to T&T at City Center; leasing progress can catalyze sentiment toward redevelopment returns .
• Trading angle: Despite revenue beat, FFO/EPS misses suggest near-term estimate recalibration; upside tied to visible SNO commencements, leasing spreads normalizing post prior‑peak rollovers, and execution on IM pipeline .

Notes:
- “Bold beat/miss” indicates significant variance vs consensus.
- All operational and financial figures are cited from company documents as indicated.
- S&P Global consensus data used for estimates comparisons.

Citations: Earnings release and supplemental ; Press release ; Dividend ; Prior quarter context ; Q4 2024 context ; Earnings call .