Acadia Realty Trust (AKR) Reports Solid Growth in 2023 with Strong Outlook for 2024
Net Earnings: Reported GAAP net earnings of $0.20 per share for 2023 with a projected increase to $0.09-$0.15 for 2024.
Same-Property NOI Growth: Achieved a full-year growth of 5.8%, at the high end of guidance.
Core Cash Rent Spreads: Impressive full-year core cash rent spreads on new leases of 44%.
2024 Projections: Projected same-property NOI growth of 5-6% and FFO growth of 5%.
Balance Sheet Strength: Strong balance sheet with no significant Core debt maturities until 2026.
Equity Raise: Completed a post-quarter equity issuance yielding approximately $113 million in net proceeds.
On February 13, 2024, Acadia Realty Trust (NYSE:AKR) released its 8-K filing, detailing the company's financial performance for the fourth quarter and full year of 2023. Acadia Realty Trust, a real estate investment trust specializing in the operation and management of shopping centers and mixed-use properties, has reported a year of solid growth and strong financial achievements.
Company Overview
Acadia Realty Trust operates through three segments: its core portfolio, funds, and structured financing. The core portfolio, which generates the majority of the company's revenue, consists of high-quality retail properties in metropolitan areas with significant barriers to entry. The funds segment includes the trusts' launched funds, while structured financing consists of notes receivable and related interest income.
Performance and Financial Highlights
For the year ended December 31, 2023, Acadia Realty Trust reported a net earnings per share of $0.20, with a net loss per share of $0.02 for the fourth quarter. The full-year same-property net operating income (NOI) growth was a robust 5.8%, which is at the high end of the company's guidance. Core cash rent spreads on new leases were particularly strong at 44% for the full year, indicating the company's ability to negotiate favorable lease terms.
Acadia's president and CEO, Kenneth F. Bernstein, expressed optimism about the company's trajectory, citing consistent strength in the portfolio and strong tenant demand. The equity raise completed in January 2024 has positioned the company for external growth and investment opportunities.
This is an exciting time for Acadia. Our portfolio has demonstrated consistent strength with same-property NOI growth averaging 6.5% for the past eleven quarters driven by the rebound and outperformance in our Street assets. We continue to see strong tenant demand for our spaces with plenty of upside remaining within our Street Portfolio.
Financial Results and Balance Sheet
The fourth quarter NAREIT funds from operations (FFO) per share was $0.26, and FFO before special items per share was $0.28. The same-property NOI growth for the fourth quarter was 4.2%, with the Street Portfolio experiencing growth in excess of 10% during the quarter. The Core Signed Not Open ("SNO") Pipeline was $7.0 million of annual base rents as of December 31, 2023, representing about 5% of in-place rents.
Acadia's balance sheet remains strong, with no significant Core debt maturities until 2026. Approximately 94% of Core debt was fixed at a blended rate of 4.46%, mitigating interest rate risk. The company also reported a post-quarter equity issuance of approximately $113 million of net proceeds.
2024 Outlook and Guidance
Looking ahead to 2024, Acadia Realty Trust has set initial guidance with a projected net earnings per diluted share of $0.09 to $0.15 and FFO before special items per diluted share of $1.24-$1.32. The projected same-property NOI growth is expected to be between 5-6%.
Acadia Realty Trust's 2023 performance and its strategic positioning for 2024 demonstrate the company's resilience and potential for growth. With a strong balance sheet and a clear focus on high-quality retail properties, Acadia is well-equipped to navigate the dynamic real estate market and deliver value to its shareholders.
For more detailed information on Acadia Realty Trust's financial results, please refer to the full 8-K filing.
Explore the complete 8-K earnings release (here) from Acadia Realty Trust for further details.
This article first appeared on GuruFocus.
