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ACADIA REALTY TRUST (AKR)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 delivered accelerating fundamentals: same-property NOI up 8.2% YoY (street retail +13%), occupancy up 140 bps sequentially to 93.6%, and FFO Before Special Items rose to $0.33/share; GAAP EPS of $0.03 reflected a non-cash impairment in the investment management platform .
  • Results beat S&P Global consensus on GAAP EPS and revenue: $0.094 vs $0.075 EPS and $97.4m vs $88.9m revenue; strength reflected lease commencements ($6.7m pro-rata ABR) and robust street leasing spreads (+28.8% GAAP/+12.1% cash total new+renewals) .
  • 2025 guidance: raised GAAP EPS midpoint; NAREIT FFO trimmed on Albertsons mark-to-market; FFO Before Special Items + Realized Gains maintained; realized gains/promotes trimmed to $14–$15m from $16–$19m .
  • Management framed Q3 as an “inflection point” with line of sight to double‑digit REIT NOI growth in 2026, aided by occupancy ramp and $11.9m SNO pipeline (80%+ street/urban) .

What Went Well and What Went Wrong

  • What Went Well

    • Street retail outperformance: same-store street NOI +13% YoY; CEO: “positive momentum is accelerating” on streets (DTC demand, affluent consumer, resurging foot traffic) .
    • Leasing velocity and spreads: Q3 total new+renewal rent spreads +28.8% GAAP/+12.1% cash; openings included Kith (Chicago Gold Coast) and Watchfinder in SoHo; SNO pipeline at $11.9m .
    • Balance sheet progress: pro‑rata Net Debt/EBITDA down to 5.0x; ~$212m forward equity raised near $19.88/share; no significant REIT debt maturities until 2028 .

  • What Went Wrong

    • GAAP EPS down YoY to $0.03, impacted by ~$3.8m net non-cash impairments within investment management; NAREIT FFO guided down modestly due to Albertsons mark-to-market .
    • Investment management dilution from City Point loan conversion (transition from interest income to NOI); management noted near‑term FFO drag in 2H25/2026 before multi‑year benefits .
    • Q2 leasing spreads were temporarily weak (2.9% GAAP/‑5.6% cash) due to a 2015‑vintage SoHo lease rollover, highlighting vintage sensitivity in spread optics .

Financial Results

MetricQ1 2025Q2 2025Q3 2025
Revenue ($USD Millions)$104.4 $100.6 $101.0
GAAP Diluted EPS ($)$0.01 $0.01 $0.03
NAREIT FFO/share ($)$0.34 $0.27 $0.28
FFO Before Special Items/share ($)$0.34 $0.32 $0.33
Same-Property NOI Growth (%)4.1% 4.2% 8.2%
REIT/Core Portfolio Occupancy (%)91.6% (physical) 92.2% (core occupancy) 93.6% (REIT portfolio)

Estimates vs Actual (S&P Global)

  • EPS: Estimate $0.075 vs Actual $0.094 → Beat*
  • Revenue: Estimate $88.86m vs Actual $97.41m → Beat*
    Values retrieved from S&P Global.
    Notes: EPS and revenue actuals correspond to GAAP; FFO measures are not directly comparable to GAAP EPS.
ItemConsensusActualSurprise
GAAP EPS ($)$0.075*$0.0939*+$0.0189*
Revenue ($USD Millions)$88.86*$97.41*+$8.55*

Segment/Operating Detail

Operating NOI MetricsQ1 2025Q2 2025Q3 2025
REIT/Core Portfolio NOI ($USD Millions)$36.73 $38.63 $39.22
Same-Property NOI ($USD Millions)$33.84 $34.48 $34.88

KPIs

KPIQ1 2025Q2 2025Q3 2025
Total New+Renewal Rent Spreads (GAAP/Cash)37.4% / 20.1% 2.9% / (5.6%) 28.8% / 12.1%
Signed-Not-Open (SNO) Pipeline ($ ABR)$8.9m ~$15.0m $11.9m (~5% of ABR)
ABR Commencements in Quarter (Pro-rata)—~$4.5m (late Q2) ~$6.7m
Net Debt/EBITDA (pro‑rata)5.7x 5.5x 5.0x

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
GAAP Net Earnings/shareFY2025$0.09–$0.13 $0.12–$0.14 Raised (midpoint)
NAREIT FFO/shareFY2025$1.22–$1.26 $1.20–$1.22 Lowered
FFO Before Special Items + Realized Gains/shareFY2025$1.21–$1.25 $1.22–$1.24 Maintained/Tightened
Realized Gains on Marketable Securities (per share)FY2025$0.11–$0.14 $0.10 Lowered
FFO Before Special Items/shareFY2025$1.32–$1.39 $1.32–$1.34 Tightened lower top end
Debt Maturities (REIT portfolio)FY2025–270.1%, 2.9%, 2.7% of debt UnchangedMaintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2)Current Period (Q3 2025)Trend
Street retail demand & DTCQ1: Street NOI +6.8%; early strength in SoHo/Georgetown . Q2: reaffirmed 5–6% core SP NOI; continued street asset buys .Street SP NOI +13%; CEO: momentum “accelerating”; strong brand demand and premiums in key corridors .Improving
Occupancy & SNO pipelineQ1: Occupancy 91.7%, SNO $8.9m . Q2: Occupancy 92.2%, SNO ~ $15m .Occupancy +140 bps to 93.6%; SNO $11.9m (80%+ street/urban); $6.7m ABR commenced .Improving
2026 growth outlookQ1/Q2: 5–6% 2025 SP NOI; set up for continued growth .CFO: inflection point; targeting ~10% REIT NOI growth in 2026; 8–12% total SP growth with streets >10% .More bullish
Guidance methodologyQ1/Q2: Traditional FFO guidance with gains included .Moving to “FFO as adjusted” in 2026 (exclude IM gains/promotes) for cleaner linkage to core NOI .Simplifying
Capital & balance sheetQ2: New $250m term loan; net debt/EBITDA 5.5x; no major maturities until 2028 .Net debt/EBITDA at 5.0x; ~$212m forward equity raised; ample liquidity; ability to fund pipeline .Stronger
San Francisco recoveryQ1: T&T lease at City Center; Whole Foods termination monetized .CEO cites AI-led recovery; 555 9th & City Center projects slated to add ~5% to REIT NOI over time .Improving

Management Commentary

  • CEO Ken Bernstein on street momentum: “tenant performance, and tenant demand at our properties, especially the street retail component, is continuing, and if anything, this positive momentum is accelerating” .
  • On secular DTC and affluent consumer: “retailers…have to be on these key streets… the physical channel in an omnichannel world is by far the most profitable” .
  • CFO John Gottfried on inflection and 2026: “projecting…8% to 12% NOI growth… roughly $0.09 a share of FFO at our current share count” with streets >10% .
  • Leasing head AJ Levine on velocity: “executing on another $3.7 million in [AVR]… increased the lease negotiation pipeline to $8 million” and “pry loose” strategy unlocking double‑digit spreads .
  • Press release: “REIT Portfolio same-property NOI increased 8.2% driven by street retail portfolio growth of 13%” .

Q&A Highlights

  • Pipeline and funding: Gross ~$500m potential Q4 acquisitions under exclusive talks; accretion target “one penny per $200m” across street and IM platforms; funding mix leverages forward equity, revolver capacity, and tightening secured/unsecured debt markets (mid‑4% unsecured) while keeping leverage sub‑6x pro‑rata .
  • Yield framework: Street deals moving 5% cash yields to mid‑6% GAAP yields via mark‑to‑market and duration .
  • Street rent levels: Ground floor Walton St. (Chicago) leasing at ~$350–$400/sf; Wisconsin Ave. (DC) ~$150/sf; Armitage ~$120–$130/sf (illustrative, asset‑specific) .
  • City Point conversions: Expect remaining conversions in 2026; near‑term FFO dilution offset by future NOI uplift as asset stabilizes .
  • Stock underperformance: Management emphasized execution and clarity of earnings flow‑through; believes fundamentals will be recognized as results and street evidence accumulate .

Estimates Context

  • S&P Global consensus (GAAP basis): Q3 EPS $0.075 vs actual $0.0939 (beat); revenue $88.86m vs actual $97.41m (beat)*.
  • FFO metrics are not directly comparable to GAAP EPS; no FFO consensus cited in company disclosures. Given the magnitude of commencements and street spreads, street-heavy REIT peers may revise 2026 FFO higher as occupancy and SNO convert to cash rents.
    Values retrieved from S&P Global.

Key Takeaways for Investors

  • Street-led acceleration is the core narrative: Q3 street same-store NOI +13% and total SP NOI +8.2% signal pricing power and demand in premier corridors (SoHo, Williamsburg, M Street, Melrose, Gold Coast) .
  • 2026 setup is robust: management targets ~10% REIT NOI growth, underpinned by occupancy ramp, $11.9m SNO (80%+ street), and San Francisco redevelopments; expect above‑trend SP NOI into 2026 .
  • Balance sheet optionality: 5.0x net debt/EBITDA, $800m+ liquidity implied across revolver/forward equity, and limited near‑term maturities enable accretive capital deployment .
  • External growth as a catalyst: Exclusive pipeline suggests up to ~$500m gross Q4 closings with mid‑6% GAAP yields, supporting “$0.01 per $200m” accretion; watch deal flow and funding mix .
  • S&P beats on revenue and EPS* reinforce leasing momentum; further beats may hinge on conversion of SNO ($5.5m projected to commence in Q4) and 2026 step-up .
  • Methodology change (FFO as adjusted in 2026) should improve transparency and multiple alignment with core REIT earnings (ex‑promotes), potentially reducing volatility premium .
  • Tactical watch items: Pace of street lease‑ups, San Francisco execution (T&T late 2026; Club Studio), investment management realizations, and any further City Point conversion cadence .

Footnotes:

  • Values retrieved from S&P Global.

Citations: Press release and 8-K (Q3): ; 8-K with supplemental (Q3): ; Q2 press: ; Q1 8-K/press: ; Earnings call transcript (Q3): .