Acadia Realty Trust(AKR) - 2022 Q4 - Annual Report

Investment Strategy - Acadia Realty Trust focuses on acquiring and managing high-quality retail properties in densely populated metropolitan areas, with a strong emphasis on capital appreciation and cash distributions to shareholders [24]. - The company has launched five funds for opportunistic and value-add retail real estate investments, with the current fund being Acadia Strategic Opportunity Fund V LLC [28]. - The company’s growth strategy includes the acquisition and development of additional properties, which may face challenges in finding new properties and securing financing [114]. Financial Performance - In 2022, Acadia issued 5,525,419 Common Shares under its ATM Program, raising gross proceeds of $123.9 million, compared to 2,889,371 shares for$ 64.9 million in 2021 [33]. - The company maintains a share repurchase program with authorization to repurchase up to $200 million of outstanding Common Shares, with approximately$ 122.5 million remaining as of December 31, 2022 [32]. - The company reported a cumulative total shareholder return of $62.81 for its Common Shares from December 31, 2017, to December 31, 2022 [215]. Portfolio Overview - As of December 31, 2022, Acadia had two Fund and two Core Portfolio development projects and five Core Portfolio redevelopment projects underway [41]. - As of December 31, 2022, the Core Portfolio consisted of 143 operating properties totaling approximately 5.6 million square feet of gross leasable area (GLA), with an occupancy rate of 92.1% and a lease rate of 94.4% [185]. - The Funds owned and operated 49 properties totaling approximately 8.0 million square feet of GLA, with an occupancy rate of 88.9% and a lease rate of 92.5% as of December 31, 2022 [186]. Tenant and Revenue Concentration - The company has a concentration of 20 key tenants that collectively account for approximately 19.3% of its consolidated revenue, indicating a significant reliance on these tenants for income [85]. - The largest retail tenant, Target, accounted for 7.3% of total Core Portfolio GLA and 5.1% of total base rent as of December 31, 2022 [200]. - No individual property or tenant contributed more than 10% of total revenues for the years ended December 31, 2022, 2021, or 2020 [189]. Employee and Diversity Initiatives - Employee turnover rate for 2022 was approximately 23%, with a total of 115 employees as of December 31, 2022 [48]. - Diversity, equity, and inclusion are fundamental values for Acadia, with women representing 50% of employees and racially and ethnically diverse individuals making up 25% of the workforce [50]. - The company emphasizes diversity, equity, and inclusion (DEI) as fundamental values, with initiatives aimed at enhancing employee engagement and community involvement [69]. Environmental and Sustainability Efforts - The company is committed to reducing GHG emissions with a goal established for scope 1 and 2 emissions, aiming to mitigate the negative impacts of climate change [63]. - The company has implemented a comprehensive water management program that includes smart irrigation systems and technology to monitor water consumption, promoting sustainability [66]. - The company has achieved gold status as a 2022 Green Lease Leader, reflecting its commitment to sustainability through the use of "green" leases [67]. Risk Management - The company has established a robust Enterprise Risk Management plan to address critical risks, including those related to climate change and environmental impact [59]. - The company may face adverse effects on financial condition and cash flows due to the bankruptcy or downturn of major tenants, impacting rental revenues [87]. - The company is exposed to potential liability related to environmental matters, which could result in significant costs exceeding the value of the properties [119]. Debt and Interest Rate Exposure - As of December 31, 2022, the company's outstanding indebtedness was$ 1,805.4 million, with $364.6 million classified as variable-rate indebtedness [110]. - Approximately 79.8% of the company's outstanding debt has fixed or effectively fixed interest rates, exposing it to risks from potential increases in interest rates [112]. - A 100-basis-point increase in interest rates would raise interest expense on variable-rate debt by approximately$ 3.6 million annually [112]. Legal and Regulatory Compliance - The company is engaged in various legal proceedings but does not expect any material adverse effects on its consolidated financial position [208]. - The SEC proposed extensive rules for climate-related disclosures, which could impose new compliance costs and operational strains on the company [178]. - Compliance with REIT requirements may hinder the company's performance by forcing it to forego attractive investment opportunities [150]. Market Conditions and Economic Factors - Current economic conditions have resulted in high unemployment, rising inflation, and decreased consumer spending, negatively impacting retail tenants [158]. - Political and economic uncertainty may cause consumers to postpone discretionary spending, adversely affecting tenant business [160]. - Economic downturns may lead to tenant losses and impair the company's ability to borrow for property purchases or refinancing [156].