Acadia Realty Trust (NYSE:AKR) reported first-quarter financial results on Wednesday. The transcript from the company’s first-quarter earnings call has been provided below.
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The full earnings call is available at https://edge.media-server.com/mmc/p/65qz828r/
Summary
Acadia Realty Trust reported a strong first quarter, with 11% year-over-year earnings growth driven by nearly 6% same-store growth and over $2.5 billion in transactional activity.
The company remains focused on its street retail portfolio, capitalizing on limited supply and increasing demand. It completed notable acquisitions in Palm Beach and Boston’s Newberry Street.
Future guidance has been raised, with full-year 2026 earnings projected at $1.22 to $1.26 per share, reflecting ongoing internal and external growth as well as a robust acquisition pipeline.
Full Transcript
OPERATOR
Good day and thank you for standing by. Welcome to the Acadia Realty Trust first quarter 2026 earnings conference call. At this time, all participants are in a listen only mode. After the speaker’s presentation, there will be a question and answer session. To ask a question during the session, you’ll need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised to withdraw your question. Please press star 1-1 again. Please be advised that today’s conference is being recorded. I’d now like to hand the conference over to Lynelle Ray, Lease Administration and Due Diligence Analyst. Please go ahead.
Lynelle Ray (Lease Administration and Due Diligence Analyst)
Good morning and thank you for joining us for the first quarter 2026 Acadia Realty Trust Earnings conference call. My name is Lynelle Ray and I’m a lease administration and due diligence analyst. 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-K and other periodic filings with the SEC. Forward looking statements speak only as of the date of this call, April 29, 2026, 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 to two questions per caller to give everyone the opportunity to participate. You may ask further questions by reinserting yourself 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, who will begin today’s management remarks. Thank you Lynelle.
Ken Bernstein (President and Chief Executive Officer)
Great job. Welcome everyone. As you can see in our press release, we had another strong quarter in what is shaping up to be a very solid year, both with respect to our internal as well as our external growth initiatives. And while geopolitical events have certainly added unwanted uncertainty to the global economy, thankfully due to the tailwinds for open air retail in general and then even more so for street retail, we are seeing continued strong results driven by strong tenant performance, demand, and attractive investment opportunities. As the team will discuss in more detail, we delivered 11% year over year earnings growth driven by nearly 6% same-store growth. Even with heightened uncertainty in the capital markets, we completed over $2.5 billion in transactional activity comprised of $600 million of new investments, over $500 million of recapitalizations within our investment management platform and a new $1.4 billion corporate borrowing facility. Now, since I have discussed in detail the key drivers of the tailwinds in open air retail on our previous calls, I will limit my explanation a bit. But in short, our continued strong performance is being driven most significantly by our street retail portfolio and more specifically by five key factors. First, limited supply that continues to shrink. Second, and probably more importantly, increasing demand due to the ongoing focus by retailers to having their own physical locations rather than being so heavily reliant on either wholesale or digital channels. Third, strong tenant performance due to a resilient consumer, especially the upper end shoppers at our street locations. Fourth, lighter relative capex in our retenanting of street locations and finally, stronger annual income growth in our street locations due to both higher contractual growth and then more frequent mark to market opportunities. These continued tailwinds are enabling us to deliver solid internal top line growth and having that growth hit the bottom line both in terms of earnings growth as well as net asset value growth. AJ Levine will discuss our progress last quarter and why we are poised to continue to deliver superior growth for the foreseeable future. And then supplementing this internal growth and ensuring that we can continue to deliver this steady growth well into the future is our external growth initiatives. Reggie Livingston will discuss our acquisition activity over the last quarter where we continue to deliver on our goals both with respect to our on balance sheet acquisitions of street retail and our execution through our investment management platform. But let me give a few observations as we have seen more investor interest in retail over the past year. Competition has increased for most formats of open air retail, but so has the volume of deals coming to market. So even with increased competition we expect to be able to meet our acquisition goals. And while we welcome the company, it has been a bit more difficult to simply buy existing yield to make our targeted returns. So as it relates to street retail investment opportunities, while competitive, it’s still a less crowded field than in other formats with fewer capable buyers. So we’re still seeing enough attractive investments that are accretive day one both to earnings and net asset value. And we are most focused on investments where there are near term value creation opportunities where we can use our skill set and relationships to unlock that value. We’re still finding deals that get us to a 6% plus yield in the near term, but require a few more moving pieces. And since our team has never been hesitant to use its value add skills and relationships, this shift is welcomed. Same is true for our investment management platform. The ability to achieve opportunistic returns by simply buying stable assets, as we successfully did during our Fund 5 investment period a few years ago, is becoming increasingly difficult. Thus, our recent investments over the past year have been much more value add focused and we expect that focus to continue. And as it relates to our investment management activity, we can actually team up with the increasing pool of institutional capital and harness that increased interest so we don’t have to just beat them. We can join them as well. And to be clear, with respect to both our REIT and Investment management acquisitions, our goal continues to be to make sure our investments are accretive to earnings and to net asset value day one and to achieve a penny of FFO. for every $200 million in assets acquired. Reggie will walk through how our most recent activity is meeting our goals both in terms of volume and accretion, and then equally importantly, how we are planting seeds for continued superior growth down the road. Then finally, John Gottfried will walk through our balance sheet metrics and how we are positioned to continue to drive both internal and external growth with plenty of dry powder and diverse sources of capital. So to conclude, our street retail investment thesis is working. The internal and external opportunities we see provide a clear line of sight into providing solid multi year top line growth and then having that growth drop to the bottom line. Then, with ample balance sheet capacity, we’re in a position to capitalize on the exciting opportunities that we have in front of us. I’d like to thank the team for their continued hard work and with that I will hand the call over to A.J.
AJ Levine
thanks Ken. Good morning everyone. So I’d like to start out with an update on internal growth with a focus on trends and performance on our high growth streets. Then I’ll touch on some of our slower to recover markets with significant upside, namely San Francisco and North Michigan Avenue. And I’ll finish with an update on Henderson Avenue in Dallas. Overall, another strong quarter of leasing across the board street Suburban, both within the REIT portfolio as well as our investment management platform. Our total volume of signed leases in Q1 was an additional $3.5 million at our share. We’ve grown our pipeline of new leases in advanced negotiation to $11.5 million, which is a net increase of nearly $2.5 million above the previous quarter. As we sign leases, we are quickly reloading the pipeline and then some. As Ken articulated, because of the historically strong supply demand dynamic and the resilient high income consumer that shops our streets, all signs indicate that we’ll be able to deliver similar results through the remainder of this year and beyond. In addition to an accelerating leasing velocity, we are also seeing a steady rise in market rents on our high growth streets. We are currently negotiating new leases, fair market renewals and pry loose mark to markets along several of our streets including soho, Upper Madison Avenue, M Street, Armitage Avenue and Melrose Place. These are all markets that have experienced several years of double digit rent growth and if we’re successful in signing these new deals, it will result in a weighted average spread of just over 40%. Now remember, street leases have 3% contractual growth, so a 40% spread after five years of 3% growth means that rents have grown closer to 60% over that time period. This is what we mean when we say that not all spreads are created equal now incremental to the sector leading growth that we’re seeing on our streets. We’re also continuing to build conviction around historically strong markets that are in the earlier stages of recovery like San Francisco and North Michigan Avenue in Chicago. At our last update we reported that since the start of 2025 we had signed about 90,000 square feet of new leases across our two assets with LA Fitness Club Studio and TNT Supermarkets. Since our last update and following the end of the first quarter, we’ve added another 25,000 square feet by signing Sprouts Farmers Market who will be joining Trader Joe’s and club studio at 555 Ninth street and like TNT and Club Studio, this will be their first store in San Francisco. What’s become clear is that tenants are strengthening their conviction around the recovery of San Francisco and with another 70,000 square feet of space remaining to lease, in addition to some accretive pri loose opportunities, we are gaining increased confidence that we can continue to unlock the meaningful remaining embedded value within our two San Francisco centers. Now right behind San Francisco is North Michigan Avenue, which continues to see steady improvement and has certainly moved beyond the green shoots phase of recovery. We still have a ways to go, but foot traffic has returned to pre2019 levels and since the start of this year there has been a noticeable increase in tenant demand. Over the last year we’ve seen new store openings and new lease signings from top brands like Mango, Aritzia, Uniqlo and American Eagle. And Most recently the 60,000 square foot Candy hall of Fame at 830 N. Michigan Ave. Even so, rents are still 50% below where they were at prior peak.. North Michigan Avenue is an iconic, irreplaceable street and we are confident that the recovery will continue to accelerate. And when it does, we’ll be well-positioned to capture that upside. And finally, I’ll end with an update on Henderson Avenue in Dallas. As a reminder, the vision on Henderson is to create a vibrant, walkable street curated with a mix of today’s most sought after retailers and supplemented with dynamic and recognizable F and B. Mixing the best of what’s worked on streets like Armitage Avenue in Chicago, Bleecker street in New York, Melrose Place in LA and M Street in D.C. in short, Dallas. First and only true street retail shopping experience. The street is already off to a great start with tenants like Jacovas and Warby Parker producing sales that could already justify rents doubling. And with 80% of our retail on the street now spoken for, our new leases are doing just that. I can’t reveal the names of all of the brands that have committed, but to give you a flavor, the project will consist of a healthy mix of nationally recognized tenants like Rag and Bone who is relocating from Highland Park Village, along with a collection of younger brands that have had success on some of our other high growth streets like Gezio, Cami and Margaux. And we’re saving around 10% of our space for brands that are more local and authentic to Texas. Add in some fun high volume F and B like Prince Street Pizza, pop up bagels and salt and straw ice cream and you have the makings of a well curated walkable street. So in summation, the key takeaway is that despite consistently high levels of leasing activity over the past several quarters, we continue to see meaningful Runway ahead both in terms of mark to market opportunity and ongoing lease up of our high growth streets as well as tapping into markets that have more recently begun to show the signs of a strong recovery. As always, I’d like to thank the team for their hard work and with that I will turn things over to Reggie.
Reggie Livingston
Thanks AJ and good morning everyone. I’ll cover two things, our transaction activity for Q1 and through April and then I’ll share some perspective on what we’re seeing in the market. On the transaction front, we’ve been incredibly busy year to date. We’ve closed over 1 billion in acquisitions and recapitalizations, gained footholds on two of the country’s premier luxury retail corridors, all while achieving our accretion and growth thresholds and building a pipeline that should maintain a high level of activity for the balance of the year. So let’s walk …
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