By a News Reporter-Staff News Editor at Real Estate & Investment Business -- Acadia Realty Trust (NYSE:AKR) reported operating results for the quarter and year ended December 31, 2013. All per share amounts are on a fully diluted basis. Acadia's core portfolio ("Core Portfolio") as discussed below is comprised of properties that are owned in whole or in part by Acadia other than those it owns through its opportunity fund platform (the "Funds"). Fourth Quarter and Full Year 2013 Highlights Earnings Funds from operations ("FFO") of $0.27 per share for the fourth quarter and $1.20 for the full year, net of $0.04 of non-cash executive retirement and $0.06 of acquisition related costs for the year
Full year 2013 FFO per share represents a 15% increase over 2012 FFO of $1.04
Earnings per share ("EPS") from continuing operations of $0.14 for the fourth quarter and $0.61 for the full year
The Company forecasts a 2014 range for FFO per share of $1.30 to $1.40 and EPS of $0.68 to $0.77 Dividend Increase The Company increased its quarterly dividend 9.5%, from $0.21 to $0.23 for the fourth quarter 2013. This follows a 17% increase which was effective for the quarter ended March 31, 2013 Core Portfolio - $221 Million of Acquisitions and Strong Portfolio Performance During and subsequent to the fourth quarter, Acadia closed on $100.0 million of acquisitions
Including the above activity, Acadia acquired $220.9 million of street retail properties located in Chicago, Manhattan and Washington D.C. for the full year 2013
Additional current pipeline under contract of $92.1 million
Same store net operating income ("NOI") for the fourth quarter up 4.3% compared to 2012 and up 7.2% on a year-to-date basis
December 31, 2013 portfolio occupancy of 95.2%; 97.1% including leased space not yet occupied
In connection with Core Portfolio recycling activities, sold an A&P supermarket-anchored shopping center for $18.4 million during the fourth quarter Fund Platform - Fund IV Completes Acquisitions, Fund II Monetization Continues During 2013, Fund IV closed on $123.2 million in new acquisitions, including $57.3 million during the fourth quarter
During the fourth quarter, Fund II completed the sale of Fordham Place and Pelham Manor Shopping Plaza for $192.4 million Balance Sheet - Achieving Growth While Maintaining Low Leverage Core Portfolio debt, net of cash on hand and restricted cash related to financings ("Net Debt"), to EBITDA ratio of 4.3x at December 31, 2013; 4.9x including pro-rata share of Opportunity Funds
Combined Net Debt to total equity and debt capitalization ("Total Market Capitalization") of 24% at December 31, 2013
Issued $114.3 million of new equity at an average net share price of $26.92 during 2013 to fund Core and Fund acquisition activities Fourth Quarter and Full Year 2013 Operating Results FFO for the quarter and year ended December 31, 2013 was $15.1 million and $67.2 million, respectively, up from $14.7 million and $48.8 million for the quarter and year ended December 31, 2012.
FFO for the quarter ended December 31, 2013 of $0.27 per share included $0.04 of non-cash retirement and $0.02 of acquisition related costs and compares to $0.29 for the quarter ended December 31, 2012. FFO of $1.20 for the year ended December 31, 2013 includes an additional $0.04 of acquisition related costs and represents a 15% increase over 2012 of $1.04.
Net Income from Continuing Operations for the quarter and year ended December 31, 2013 was $7.6 million and $34.0 million, respectively, as compared to $8.4 million and $23.6 million for the quarter and year ended December 31, 2012.
EPS from continuing operations for the quarter and year ended December 31, 2013 was $0.14 and $0.61, respectively, as compared to $0.17 and $0.51 for the same periods for 2012.
The primary driver behind 2013 earnings growth was income from new investments and Core Portfolio re-anchorings. This was partially offset by 2013 non-cash executive retirement costs and a non-recurring gain in 2012 relating to the receipt of property casualty insurance proceeds in excess of carrying costs.
Refer to the Financial Highlights below for further detail on operating results and additional disclosures related to FFO. Core Portfolio - Closes on $221 Million of Street Retail in Chicago, Manhattan and Washington D.C.; Strong Operating Results Fourth Quarter Acquisitions in Manhattan and Chicago; Sells A&P Anchored Shopping Center During and subsequent to the fourth quarter, Acadia closed on four previously announced Core Portfolio acquisitions for an aggregate purchase price of $100.0 million. These acquisitions, combined with those previously announced earlier during 2013, account for $220.9 million of Core Portfolio acquisitions for the year.
In addition, the Company has an additional $92.1 million of Core Portfolio acquisitions currently under contract. Although the Company anticipates completing these closings during the first quarter of 2014, these transactions are subject to customary closing conditions, including lender approval for the assumption of existing mortgage debt, and, as such, no assurance can be given that the Company will successfully complete these acquisitions.
Details of the fourth quarter acquisitions are as follows: New York 120 West Broadway - During December, Acadia purchased the master lease for the retail portion of this cooperative located in the Manhattan neighborhood of Tribeca for $37.0 million. The building has 14,000 square feet of retail space with frontage on West Broadway, Hudson, Duane and Reade Streets. The property is anchored by high quality tenants including HSBC and Citibank. The Company acquired the asset off-market as part of a private negotiation and funded its investment primarily with Operating Partnership Units. 868 Broadway - The Company acquired this retail condominium unit for $13.5 million during December. The 2,000 square foot retail asset is located just north of Union Square in Manhattan's prime Midtown-South submarket, and is 100% leased to Dr. Martens, a 50 year old British footwear and apparel brand. 313-315 Bowery - Additionally, during December, Acadia purchased a long-term leasehold interest in this 7,900 square foot street retail property for $5.5 million. The property is currently occupied by John Varvatos and Patagonia and is located in the heart of the Bowery corridor. Chicago11 East Walton Street - During the fourth quarter, Acadia entered into a contract to acquire approximately 6,700 square feet of luxury retail space at the base of the Waldorf Astoria Chicago, formerly the Elysian Hotel, for $44.0 million. The property is located at the corner of Rush and Walton Streets, proximate to several prior Acadia acquisitions, and is 100% occupied by Marc Jacobs, Saint Laurent and Perchance Boutique. The Company closed on this acquisition during January 2014. Same-Store NOI and Occupancy Core Portfolio same-store NOI increased 7.2% year-to-date and 4.3% for the fourth quarter of 2013 as compared to the same periods in 2012.
At December 31, 2013, Acadia's Core Portfolio was 95.2% occupied and 97.1% leased when including space leased but not yet occupied. This was up from 94.0% occupied and 95.7% leased as of September 30, 2013. Rent Spreads on New and Renewal Leases The Company realized an increase in average rents on a GAAP basis, which includes the effect of the straight-lining of rents, of 18.3% on 340,000 square feet of new and renewal leases executed during the year ended December 31, 2013. On a contractual rent basis, which excludes straight-line rent, the Company experienced an increase of 6.8% in average rents for these same leases. For the fourth quarter of 2013, the Company realized an increase in average rents of 9.9% on a GAAP basis and 4.4% on a cash basis. Core Portfolio Asset Recycling During the fourth quarter, the Company completed the sale of the A&P Shopping Center located in Boonton, New Jersey for $18.4 million. Acadia purchased a 60% interest in this property during 2006 for $8.4 million, consisting of $3.2 million of cash and its $5.2 million share of the existing mortgage debt. Structured Financing Portfolio As of December 31, 2013, the Company's structured financing portfolio totaled $126.7 million. During the year ended December 31, 2013, the portfolio, excluding those investments in the Funds, increased a net $27.7 million. This was a result of the origination of $45.0 million in new notes and preferred equity investments, offset by $17.3 million of repayments.
Keywords for this news article include: Mortgage, Real Estate, Acadia Realty Trust.
Our reports deliver fact-based news of research and discoveries from around the world. Copyright 2014, NewsRx LLC