Acadia Realty Trust(AKR) - 2022 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The first quarter results showed a same-property NOI growth of 7%, exceeding expectations, and earnings were also above forecast [6][26] - FFO per share was reported at $0.40, with a full-year guidance increase to$1.19 to $1.26 from$1.17 to $1.20 [26][27] - Total NOI growth was approximately 6.5$36.2 million in Q1 2023 compared to $34 million in Q1 2022 [32] Business Line Data and Key Metrics Changes - The Street portfolio, which comprises about half of the overall portfolio value, achieved an 8$1,750 per square foot [20] Market Data and Key Metrics Changes - The recovery in key urban corridors is significant, with net effective market rents growing over 15% on average in specific areas like Soho, Williamsburg, and Melrose Place [10] - The company noted that tenant demand is outstripping supply, particularly in high-quality spaces, leading to a strong leasing pipeline [7][15] Company Strategy and Development Direction - The company aims for a multiyear internal growth goal of 5% to 10% annually, with a focus on high-quality, high-barrier-to-entry markets [6][21] - The strategy includes opportunistic asset sales and acquisitions, particularly in light of current market volatility [15][16] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism despite macroeconomic uncertainties, indicating that leasing fundamentals remain strong [17][27] - The company anticipates that leasing progress will compensate for any potential economic slowdown, projecting a net positive growth trajectory [7][17] Other Important Information - The company has successfully re-leased spaces previously occupied by Bed Bath & Beyond, with new tenants like Dick's Sporting Goods taking over [12][35] - The company has no significant core maturities over the next several years and can fund internal growth through cash flow generated from operations [38] Q&A Session Summary Question: Impact of Street portfolio occupancy on earnings - Management indicated that achieving 95% occupancy in the Street portfolio could contribute significantly to earnings growth, estimating over $30 million in total for the entire portfolio [41][42] Question: Opportunities in the market - Management discussed potential opportunities arising from regional bank issues and the fragmented ownership of street retail, suggesting a focus on both core and fund investments [45][46] Question: North Michigan Avenue mortgage maturity - Management confirmed that they have time to address the mortgage maturity and maintain a good relationship with the lender [50][51] Question: Chicago urban street retail forecast - Management expressed a balanced approach to Chicago exposure, acknowledging its challenges but also its potential [52][53] Question: Leasing activity in lagging submarkets - Management noted that some submarkets are beginning to show improvement, with new leases being signed and increased retailer interest [56][58]