Acadia Realty Trust Provides Update on $658 Million of Transactions

Fri Dec 21, 2012 10:19am EST

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WHITE PLAINS, N.Y.--(Business Wire)--
Acadia Realty Trust (NYSE: AKR) today announced continued activity across its
dual - core and fund - platforms, completing $240 million of acquisitions since
mid-November 2012. Additionally, in December 2012, Acadia sold, or entered into
a firm contract to sell, $418 million of assets within its fund portfolios. 

ACQUISITION ACTIVITY

Fund platform:

In December 2012, Acadia, through Acadia Strategic Opportunity Fund IV LLC
("Fund IV"), completed three new investments for an aggregate purchase price of
$151 million. Most significantly, this included a $139 million portfolio
acquisition on Lincoln Road in Miami Beach, Florida. Acadia launched Fund IV in
May 2012 with $541 million of capital commitments for the purpose of making
opportunistic and value-add investments in retail real estate. With leverage,
Fund IV has approximately $1.5 billion of buying power. 

Lincoln Road, Miami Beach, FL. This week, Acadia, in partnership with Terranova
Corporation, acquired a 54,400 square foot, three-property portfolio located at
719, 801, and 826 Lincoln Road for $139 million. The portfolio, which is
situated at the "Main & Main" intersection of Lincoln Road and Meridian Avenue,
is leased to a combination of local tenants and national retailers including
Fossil, Aldo, Kiehl`s, and Dylan`s Candy Bar. Leases representing nearly half of
the portfolio`s annual base rent expire within the next 24 to 36 months. Given
that rents on Lincoln Road have increased significantly over the past few years,
the majority of the portfolio`s in-place rental rates are significantly below
market. In addition, there is the ability to redevelop some of the assets as
well as improve the portfolio`s merchandise mix. Acadia, through Fund III,
previously partnered with Terranova, in February 2011, on the successful
acquisition of another 60,700 square foot, three-property portfolio located at
600 and 741 Lincoln Road and 723 N. Lincoln Lane. 

"Over the past few years, Lincoln Road has established itself as a `must-have`
location for our retailers, with exceptional global branding opportunities
matched by high sales productivity," stated Kenneth F. Bernstein, President and
CEO of Acadia Realty Trust. "Tenants are attracted to this prime street-retail
market as an essential component to their various multi-channel retailing
initiatives. As such, we are pleased to continue building a presence along this
vibrant international shopping and dining corridor in partnership with the
extremely talented team at Terranova. Led by Stephen Bittel, Terranova has been
instrumental in executing the leasing and development strategy for our existing
South Beach assets. Most recently, this has included bringing Armani Jeans and
Khong River House, by restaurateur John Kunkel, to 741 Lincoln Road. We look
forward to participating in Lincoln Road`s next chapter with our valued
partner." 

Core platform:

Since mid-November 2012, Acadia has continued to add high-quality, stabilized
street-retail assets to its core portfolio with the acquisition of four
investments - in Washington, D.C.; Westport, Connecticut; and Chicago, Illinois
- for an aggregate purchase price of $89 million. 

Connecticut Avenue NW, Washington, D.C. In December 2012, Acadia acquired a
42,000 square foot, two-property portfolio located at 1739-1803 Connecticut
Avenue NW, which is within walking distance of Dupont Circle. The purchase price
was $23 million. Principal retail tenants include TD Bank and Ruth`s Chris Steak
House. 

Main Street, Westport, CT. In December 2012, Acadia completed the
previously-announced, $14 million acquisition of 181-185 Main Street in
Westport, one of Fairfield County`s affluent "Gold Coast" towns. The asset`s
principal retail tenant is TD Bank, which serves as the northernmost anchor of
this town`s quarter-mile, predominantly-fashion-focused Main Street shopping
district. 

W. Diversey Parkway, Chicago, IL. In December 2012, Acadia completed the
previously-announced, $11 million acquisition of 639 W. Diversey Parkway, which
is located at the corner of W. Diversey Parkway and N. Clark Street in Lincoln
Park, Chicago. The street level of this 22,000 square foot, two-level property
is leased to three retail tenants - Akira, T-Mobile, and Hanig`s Footwear.
Through this strategic acquisition, Acadia now owns two contiguous blocks on the
south side of W. Diversey Parkway spanning N. Clark Street, from Trader Joe`s to
Starbucks and Papyrus. As part of this transaction, Acadia assumed $4 million of
debt. 

Street Retail Portfolio, Chicago, IL. In November 2012, Acadia completed the
acquisition of the final eight properties in its previously-announced,
18-property portfolio acquisition within Chicago`s key street-retail markets.
This final group of assets was acquired for $41 million. The completion of this
transaction adds further critical mass to Acadia`s street-retail portfolio in
Chicago, which now includes the following locations: Rush Street,
Clark/Diversey, Halsted/Armitage, Clybourn Corridor, Bucktown, and the Loop. 

DISPOSITION ACTIVITY

During the fourth quarter, Acadia continued to opportunistically monetize $418
million of fund investments. Year to date, Acadia has monetized $478 million of
stabilized fund assets. 

Fund platform:

Storage Post, New York/New Jersey. In December 2012, Acadia entered into a firm
contract to sell its entire portfolio of 14 self-storage assets located in the
New York City area for $294 million. The purchaser is a joint venture between an
institutional investor and the current Storage Post management team led by Bruce
Roch, Jr. The portfolio contains 1.1 million rentable square feet of
self-storage space that was 92.8% occupied as of September 30, 2012. The
portfolio also includes 26,125 square feet of retail space that adjoins the
self-storage facility located in Ozone Park, Queens. This retail space is
anchored by CVS and IHOP and is 100% occupied. 

Three of the assets in the portfolio were developed by Acadia Strategic
Opportunity Fund II, LLC ("Fund II"). The balance of the assets were acquired,
and in one location developed, by Acadia Strategic Opportunity Fund III LLC
("Fund III"). The aggregate investment of both Funds II and III in these assets
amounted to approximately $252 million. 

The sale of 12 properties, including all 11 properties owned by Fund III, was
completed yesterday. The sale of the remaining 2 properties is expected to close
during the first quarter of 2013. Following the final closing, Acadia will have
completed the disposition of its entire self-storage portfolio. The closing of
these 2 properties is subject to customary closing conditions and, as such, no
assurance can be given that Acadia will successfully complete this transaction. 

Acadia, through Fund III, will retain its ownership interest in the Storage Post
operating company, which will continue to manage the properties on behalf of the
buyer. Additionally, Acadia, through Fund III, received a minority interest in
the 14-property portfolio 

"This profitable sale transaction not only enabled us to achieve best execution
on our investment but also positions Storage Post to become the premier, private
self-storage operating company in the United States," stated Mr. Bernstein.
"Marc Slayton, the founder of Storage Post, had the foresight to develop a
portfolio of high-quality self-storage assets in the densely-populated,
supply-constrained New York City area. And the current Storage Post management
team, led by the exceedingly-capable self-storage entrepreneur Bruce Roch, Jr.,
has done an excellent job maximizing occupancy, growing NOI, and positioning the
portfolio for strong internal growth going forward." 

Canarsie Plaza, Brooklyn, NY. In December 2012, Acadia, through Fund II,
completed the previously-announced sale of Canarsie Plaza, a 274,000 square foot
shopping center located in the densely-populated borough of Brooklyn. The
property was sold for $124 million, approximately $32 million in excess of its
cost basis. Acadia, in partnership with P/A Associates, acquired this 15-acre
development site in 2007 and successfully navigated the development project
through an anchor re-tenanting, design change, and global recession. At
disposition, the property was 96% leased, with principal tenants including BJ`s
Wholesale Club, Planet Fitness, and PetSmart. 

Acadia will incur short-term earnings dilution from the profitable sale of these
Fund assets until the net proceeds are redeployed into new Fund investments. 

ABOUT ACADIA REALTY TRUST

Acadia Realty Trust, a fully-integrated equity real estate investment trust, is
focused on the acquisition, ownership, management and redevelopment of
high-quality retail properties and urban/infill mixed-use properties with a
strong retail component located primarily in high-barrier-to-entry,
densely-populated metropolitan areas along the East Coast and in Chicago. Acadia
owns, or has an ownership interest in, these properties through its core
portfolio and its opportunistic/value-add investment funds. Additional
information may be found on the Company`s website at www.acadiarealty.com. 

FORWARD-LOOKING STATEMENTS

Certain matters in this press release may constitute forward-looking statements
within the meaning of federal securities law and as such may involve known and
unknown risks, uncertainties and other factors that may cause the actual
results, performances or achievements of Acadia to be materially different from
any future results, performances or achievements expressed or implied by such
forward-looking statements. These forward-looking statements include statements
regarding Acadia`s future financial results and its ability to capitalize on
potential opportunities arising from continued economic uncertainty. Factors
that could cause the Company`s forward-looking statements to differ from its
future results include, but are not limited to, those discussed under the
headings "Risk Factors" and "Management`s Discussion and Analysis of Financial
Condition and Results of Operations" in the Company`s most recent annual report
on Form 10-K filed with the SEC on February 28, 2012 ("Form 10-K") and other
periodic reports filed with the SEC, including risks related to: (i) the current
global financial environment and its effect on retail tenants; (ii) the
Company`s reliance on revenues derived from major tenants; (iii) the Company`s
limited control over joint venture investments; (iv) the Company`s partnership
structure; (v) real estate and the geographic concentration of our properties;
(vi) market interest rates; (vii) leverage; (viii) liability for environmental
matters; (ix) the Company`s growth strategy; (x) the Company`s status as a REIT;
(xi) uninsured losses and (xii) the loss of key executives. Copies of the Form
10-K and the other periodic reports Acadia files with the SEC are available on
the Company`s website at www.acadiarealty.com. Any forward-looking statements in
this press release speak only as of the date hereof. Acadia expressly disclaims
any obligation or undertaking to release publicly any updates or revisions to
any forward-looking statements contained herein to reflect any change in
Acadia's expectations with regard thereto or change in events, conditions or
circumstances on which any such statement is based.

Acadia Realty Trust
Jon Grisham, 914-288-8100 

Copyright Business Wire 2012