SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
☒
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2025
or
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 001-12002
ACADIA REALTY TRUST
(Exact name of registrant as specified in its charter)
Maryland
(State or other jurisdiction of
incorporation or organization)
23-2715194
(I.R.S. Employer
Identification No.)
411 THEODORE FREMD AVENUE, SUITE 300, RYE, NY
(Address of principal executive offices)
10580
(Zip Code)
(914) 288-8100
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of class of registered securities
Trading symbol
Name of exchange on which registered
Common shares of beneficial interest, par value $0.001 per share
AKR
The New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes ☒
No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer
Accelerated Filer
Emerging Growth Company
Non-accelerated Filer
Smaller Reporting Company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act) Yes ☐ No ☒
As of October 24, 2025, there were 131,034,624 common shares of beneficial interest, par value $0.001 per share (“Common Shares”), outstanding.
ACADIA REALTY TRUST AND SUBSIDIARIES
INDEX
Item No.
Description
Page
PART I - FINANCIAL INFORMATION
1.
Financial Statements
4
Condensed Consolidated Balance Sheets (Unaudited) as of September 30, 2025 and December 31, 2024
Condensed Consolidated Statements of Operations (Unaudited) for the Three and Nine Months Ended September 30, 2025 and 2024
5
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) for the Three and Nine Months Ended September 30, 2025 and 2024
6
Condensed Consolidated Statements of Changes in Equity (Unaudited) for the Three and Nine Months Ended September 30, 2025 and 2024
7
Condensed Consolidated Statements of Cash Flows (Unaudited) for the Nine Months Ended September 30, 2025 and 2024
9
Notes to Condensed Consolidated Financial Statements (Unaudited)
11
2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
46
3.
Quantitative and Qualitative Disclosures about Market Risk
60
4.
Controls and Procedures
62
PART II - OTHER INFORMATION
Legal Proceedings
63
1A.
Risk Factors
Unregistered Sales of Equity Securities and Use of Proceeds
Defaults Upon Senior Securities
Mine Safety Disclosures
5.
Other Information
6.
Exhibits
64
Signatures
65
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements contained in this Quarterly Report on Form 10-Q (this “Report”) of Acadia Realty Trust, a Maryland real estate investment trust, (the “Company”), may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We intend these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and we are including this statement for the purposes of complying with those safe harbor provisions, in each case, to the extent applicable. Forward-looking statements, which are based on certain assumptions and describe our future plans, strategies and expectations are generally identifiable by the use of the words such as “may,” “will,” “should,” “expect,” “anticipate,” “estimate,” “believe,” “intend” or “project,” or the negative thereof, or other variations thereon or comparable terminology. Forward-looking statements involve known and unknown risks, uncertainties and other factors that could cause our actual results and financial performance to be materially different from future results and financial performance expressed or implied by such forward-looking statements, including, but not limited to: (i) macroeconomic conditions, including due to geopolitical conditions and instability and global trade disruptions, which may lead to a disruption of, or lack of access to, the capital markets and other sources of funding, disruptions and instability in the banking and financial services industries and rising inflation; (ii) our ability to successfully implement our business strategy and to identify, underwrite, finance, consummate and integrate diversifying acquisitions and investments; (iii) changes in general economic conditions or economic conditions in the markets in which we may, from time to time, compete, including the impact of recently announced tariffs on our tenants and their customers, and their effect on our and our tenants’ revenues, earnings and funding sources; (iv) increases in our borrowing costs as a result of elevated inflation, changes in interest rates and other factors; (v) our ability to pay down, refinance, restructure or extend our indebtedness as it becomes due; (vi) our investments in joint ventures and unconsolidated entities, including our lack of sole decision-making authority and our reliance on our joint venture partners’ financial condition; (vii) our ability to obtain the financial results expected from our development and redevelopment projects; (viii) our tenants’ ability and willingness to renew their leases with us upon expiration, our ability to re-lease our properties on the same or better terms in the event of nonrenewal or in the event we exercise our right to replace an existing tenant, and obligations we may incur in connection with the replacement of an existing tenant; (ix) our potential liability for environmental matters; (x) damage to our properties from catastrophic weather and other natural events, and the physical effects of climate change; (xi) the economic, political and social impact of, and uncertainty surrounding, any public health crisis, which adversely affected the Company and its tenants’ business, financial condition, results of operations and liquidity; (xii) uninsured losses; (xiii) our ability and willingness to maintain our qualification as a real estate investment trust in light of economic, market, legal, tax and other considerations; (xiv) information technology security breaches, including increased cybersecurity risks relating to the use of remote technology; (xv) the loss of key executives; and (xvi) the accuracy of our methodologies and estimates regarding corporate responsibility metrics, goals and targets, tenant willingness and ability to collaborate towards reporting such metrics and meeting such goals and targets, and the impact of governmental regulation on our corporate responsibility efforts.
The factors described above are not exhaustive and additional factors could adversely affect the Company’s future results and financial performance, including the risk factors discussed under the section captioned “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 and other periodic or current reports the Company files with the Securities and Exchange Commission (the “SEC”), including those set forth under the headings “Item 1A. Risk Factors” and “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Report. These risks and uncertainties should be considered in evaluating any forward-looking statements contained or incorporated by reference herein. Any forward-looking statements speak only as of the date hereof. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any changes in the Company’s expectations with regard thereto or changes in the events, conditions or circumstances on which such forward-looking statements are based.
SPECIAL NOTE REGARDING CERTAIN REFERENCES
All references to “Notes” throughout the document refer to the Notes to the Condensed Consolidated Financial Statements of the registrant referenced in Part I, Item 1. Financial Statements.
3
PART I – FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
CONDENSED CONSOLIDATED BALANCE SHEETS
September 30,
December 31,
(in thousands, except share and per share data)
2025
2024
ASSETS
(Unaudited)
Investments in real estate
Operating real estate, net
$
3,994,407
3,543,974
Real estate under development
142,468
129,619
Net investments in real estate
4,136,875
3,673,593
Notes receivable, net ($1,692 and $2,004 of allowance for credit losses as of September 30, 2025 and December 31, 2024, respectively)(a)
154,765
126,584
Investments in and advances to unconsolidated affiliates
164,403
209,232
Other assets, net
230,327
223,767
Right-of-use assets - operating leases, net
24,552
25,531
Cash and cash equivalents
49,388
16,806
Restricted cash
25,647
22,897
Marketable securities
4,502
14,771
Rents receivable, net
63,710
58,022
Assets of property held for sale
21,023
—
Total assets (b)
4,875,192
4,371,203
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY
Liabilities:
Mortgage and other notes payable, net
978,915
953,700
Unsecured notes payable, net
818,093
569,566
Unsecured line of credit
65,000
14,000
Accounts payable and other liabilities
276,233
232,726
Lease liabilities - operating leases
26,969
27,920
Dividends and distributions payable
27,749
24,505
Distributions in excess of income from, and investments in, unconsolidated affiliates
17,119
16,514
Total liabilities (b)
2,210,078
1,838,931
Commitments and contingencies (Note 9)
Redeemable noncontrolling interests (Note 10)
9,114
30,583
Equity:
Acadia Shareholders' Equity
Common shares, $0.001 par value per share, authorized 200,000,000 shares, issued and outstanding 131,031,455 and 119,657,594 shares as of September 30, 2025 and December 31, 2024, respectively
131
120
Additional paid-in capital
2,708,691
2,436,285
Accumulated other comprehensive income
17,001
38,650
Distributions in excess of accumulated earnings
(479,803
)
(409,383
Total Acadia shareholders’ equity
2,246,020
2,065,672
Noncontrolling interests
409,980
436,017
Total equity
2,656,000
2,501,689
Total liabilities, redeemable noncontrolling interests, and equity
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements (unaudited).
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
Three Months Ended September 30,
Nine Months Ended September 30,
(in thousands, except per share amounts)
Revenues
Rental
98,714
86,288
299,651
257,951
Other
2,292
1,457
6,341
8,404
Total revenues
101,006
87,745
305,992
266,355
Expenses
Depreciation and amortization
38,884
34,500
117,593
103,721
General and administrative
10,924
10,215
34,053
30,162
Real estate taxes
11,832
11,187
38,452
33,514
Property operating
16,627
14,351
52,431
49,228
Impairment charges
12,570
37,210
Total expenses
90,837
70,253
279,739
216,625
Gain (loss) on disposition of properties
2,515
(441
Operating income
12,684
17,492
28,768
49,289
Equity in (losses) earnings of unconsolidated affiliates
(3,694
11,784
(9,598
15,952
Interest income (a)
6,121
7,859
18,575
18,510
Realized and unrealized holding losses on investments and other
(1,760
(1,503
(193
(5,918
Interest expense
(24,304
(23,363
(71,155
(70,653
Loss on change in control
(9,622
(Loss) income from continuing operations before income taxes
(10,953
12,269
(43,225
7,180
Income tax provision
(2
(15
(329
(201
Net (loss) income
(10,955
12,254
(43,554
6,979
Net loss attributable to redeemable noncontrolling interests
1,567
1,672
4,960
6,518
Net loss (income) attributable to noncontrolling interests
15,006
(5,512
47,783
(371
Net income attributable to Acadia shareholders
5,618
8,414
9,189
13,126
Basic income per share
0.03
0.07
0.06
0.12
Diluted income per share
Weighted average shares for basic income per share
131,020
108,351
127,812
104,704
Weighted average shares for diluted income per share
131,022
127,819
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)
(in thousands)
Other comprehensive loss:
Unrealized gain (loss) on valuation of swap agreements
385
(31,715
(14,611
2,301
Reclassification of realized interest on swap agreements
(3,710
(7,327
(11,173
(25,011
Other comprehensive loss
(3,325
(39,042
(25,784
(22,710
Comprehensive loss
(14,280
(26,788
(69,338
(15,731
Comprehensive loss attributable to redeemable noncontrolling interests
Comprehensive loss attributable to noncontrolling interests
15,350
3,160
51,918
7,148
Comprehensive income (loss) attributable to Acadia shareholders
2,637
(21,956
(12,460
(2,065
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (UNAUDITED)
Three Months Ended September 30, 2025 and 2024
Acadia Shareholders
CommonShares
ShareAmount
AdditionalPaid-inCapital
AccumulatedOtherComprehensiveIncome (Loss)
Distributionsin Excess ofAccumulatedEarnings
TotalCommonShareholders’Equity
NoncontrollingInterests
TotalEquity
Redeemable NoncontrollingInterests
Balance as of July 1, 2025
131,011
2,707,218
19,982
(458,205
2,269,126
437,033
2,706,159
21,174
Conversion of OP Units to Common Shares by limited partners of the Operating Partnership
17
290
(290
Dividends/distributions declared ($0.20 per Common Share/OP Unit)
(26,202
(1,447
(27,649
Adjustment of redeemable non-controlling interest to estimated redemption value (Note 10)
(1,014
1,014
Acquisition of noncontrolling interest (Note 10)
(1,528
(105
(1,633
(8,232
City Point Loan accrued interest (Note 10)
(3,270
Employee and trustee stock compensation, net
58
2,961
3,019
Noncontrolling interest distributions
(16,215
(5
Noncontrolling interest contributions
6,046
Comprehensive (loss) income
(2,981
(15,350
(12,713
(1,567
Reallocation of noncontrolling interests
2,653
(2,653
Balance as of September 30, 2025
131,031
Balance as of July 1, 2024
105,267
105
2,115,689
47,621
(381,945
1,781,470
457,221
2,238,691
40,874
95
1,546
(1,546
Issuance of Common Shares, net
8,534
186,710
186,719
Dividends/distributions declared ($0.19 per Common Share/OP Unit)
(21,641
(1,273
(22,914
City Point Loan accrued interest
(4,165
235
2,494
2,729
(7,591
2,409
(30,370
(3,160
(25,116
(1,672
354
(354
Balance as of September 30, 2024
113,902
114
2,304,534
17,251
(395,172
1,926,727
448,200
2,374,927
35,037
Nine Months Ended September 30, 2025 and 2024
Redeemable Noncontrolling Interest
Balance at January 1, 2025
119,658
11,173
277,495
277,506
153
2,403
(2,403
Dividends/distributions declared ($0.60 per Common Share/OP Unit)
(78,595
(4,337
(82,932
Consolidation of previously unconsolidated investment
29,573
(9,296
47
257
8,407
8,664
(25,889
14,414
10
(21,649
(51,918
(64,378
(4,960
(6,221
6,221
Balance at September 30, 2025
Balance at January 1, 2024
95,362
1,953,521
32,442
(349,141
1,636,917
446,300
2,083,217
50,339
17,173
18
328,824
328,842
1,290
1
20,886
20,887
(20,888
(1
Dividends/distributions declared (0.55 per Common Share/OP Unit)
(59,157
(3,954
(63,111
(8,778
77
1,059
9,026
10,085
(21,010
(6
46,118
(15,191
(7,148
(9,213
(6,518
244
(244
Balance at September 30, 2024
8
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
CASH FLOWS FROM OPERATING ACTIVITIES
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
(Gain) loss on disposition of properties and other investments
(2,515
441
Net unrealized holding losses on investments
508
5,277
Stock compensation expense
Straight-line rents
(2,691
(372
Equity in losses (earnings) of unconsolidated affiliates
9,598
(15,952
Distributions of operating income from unconsolidated affiliates
2,054
19,821
Amortization of financing costs
6,600
5,896
Non-cash lease expense
3,063
2,787
9,622
Other, net
(7,673
(3,306
Changes in assets and liabilities:
Rents receivable
(5,874
(6,193
Other liabilities
(8,638
(3,507
Accounts payable and accrued expenses
(2,207
(2,468
Prepaid expenses and other assets
6,270
(17,743
(3,035
(2,890
Net cash provided by operating activities
124,995
102,576
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisitions of real estate
(406,907
(48,855
Proceeds from the disposition of properties and other investments, net
61,533
58,670
Investments in unconsolidated affiliates
(6,964
(9,780
Development, construction and property improvement costs
(86,638
(62,399
Refund (payment) for properties under purchase contract
11,500
(5,413
Increase in cash and restricted cash upon change of control
6,777
Return of capital from unconsolidated affiliates
9,734
14,910
Payment of deferred leasing costs
(9,828
(5,585
Proceeds from sale of marketable securities
9,761
10,503
Proceeds from repayment of note receivable
807
6,000
Issuance of note receivable
(20,211
(8,184
Net cash used in investing activities
(430,436
(50,133
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from unsecured debt
1,091,200
342,984
Principal payments on unsecured debt
(790,200
(655,871
Proceeds from issuances of Common Shares
277,519
Capital contributions from noncontrolling interests
14,424
Principal payments on mortgage and other notes
(192,309
(27,013
Proceeds received from mortgage and other notes
60,336
49,226
Distributions to noncontrolling interests
(30,402
(24,971
Dividends paid to Common Shareholders
(75,128
(54,681
Payment of deferred financing and other costs
(5,359
(11,004
Acquisition of noncontrolling interest
(9,865
Payments of finance lease obligations
557
(2,072
Net cash provided by (used in) financing activities
340,773
(8,442
Increase in cash and cash equivalents and restricted cash
35,332
44,001
Cash and cash equivalents of $16,806 and $17,481 and restricted cash of $22,897 and $7,813, respectively, beginning of period
39,703
25,294
Cash and cash equivalents of $49,388 and $46,207 and restricted cash of $25,647 and $23,088, respectively, end of period
75,035
69,295
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Continued)
Supplemental disclosure of cash flow information
Cash paid during the period for interest, net of capitalized interest of $8,234 and $5,152 respectively (a)
83,457
93,720
Cash paid for income taxes, net of refunds
330
202
Supplemental disclosure of non-cash investing and financing activities
Dividends/Distributions declared and payable
27,720
22,914
Conversion of Common and Preferred OP Units to Common Shares
20,888
Accrued interest on note receivable recorded to redeemable noncontrolling interest
9,296
8,927
Retained investment in an unconsolidated affiliate
2,432
Adjustment of redeemable non-controlling interest to estimated redemption value
Note receivable and accrued interest exchanged for redeemable noncontrolling interest
48,064
Increase (decrease) in assets and liabilities resulting from the consolidation of previously unconsolidated investment:
Operating real estate
201,700
Mortgage and other notes payable
156,117
(28,516
Rents receivable and other assets
654
4,548
29,572
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. Organization, Basis of Presentation and Summary of Significant Accounting Policies
Organization
Acadia Realty Trust, (the “Trust”, collectively with its consolidated subsidiaries, the “Company”), a Maryland real estate investment trust (“REIT”), is a fully-integrated equity real estate investment trust focused on the ownership, acquisition, development, and management of retail properties located primarily in high-barrier-to-entry, supply-constrained, densely populated metropolitan areas in the United States.
All of the Company’s assets are held by, and its operations are conducted through, Acadia Realty Limited Partnership (the “Operating Partnership”) and entities in which the Operating Partnership owns an interest. At September 30, 2025 and December 31, 2024, the Trust controlled approximately 96% of the Operating Partnership as the sole general partner and is entitled to share in the cash distributions and profits and losses of the Operating Partnership in proportion to its percentage interest.
The limited partners primarily consist of entities or individuals that contributed interests in certain properties or entities to the Operating Partnership in exchange for common or preferred units of limited partnership interest (“Common OP Units” or “Preferred OP Units”), as well as employees who have been granted restricted Common OP Units (“LTIP Units”) as long-term incentive compensation (Note 13). Limited partners holding Common OP and LTIP Units generally have the right to exchange their units on a one-for-one basis for common shares of beneficial interest, par value $0.001 per share, of the Company (“Common Shares”). This structure is referred to as an umbrella partnership REIT or “UPREIT.”
The Company owns and operates a high-quality core real estate portfolio, primarily comprised of open-air street retail assets in the nation’s most dynamic retail corridors (“REIT Portfolio”). This portfolio is complemented by an investment management platform that leverages institutional capital relationships to pursue opportunistic, high-yield, and/or value-add investments (“Investment Management”). As of September 30, 2025, the Company held ownership interests in 167 properties (including properties in various stages of development and redevelopment) within its REIT Portfolio, which includes properties either wholly owned or partially owned through joint ventures by the Operating Partnership or subsidiaries, excluding properties owned through the Investment Management platform.
The Company also held ownership interests in 51 properties through its Investment Management platform, which facilitates investments in primarily opportunistic and value-add retail real estate alongside institutional partners. Active investments are held through the following opportunity funds, including: Acadia Strategic Opportunity Fund II, LLC (“Fund II”), Acadia Strategic Opportunity Fund III LLC (“Fund III”), Acadia Strategic Opportunity Fund IV LLC (“Fund IV”), and Acadia Strategic Opportunity Fund V LLC (“Fund V” and, collectively with Fund II, Fund III and Fund IV, the “Funds”). The Company consolidates the Funds as variable interest entities (“VIE”) as it is the primary beneficiary, having (i) the power to direct the activities that most significantly impact the Funds’ economic performance, (ii) the obligation to absorb the Funds’ losses, and (iii) the right to receive benefits from the Funds that could potentially be significant.
The Operating Partnership serves as the sole general partner or managing member of the Funds and earns fees or priority distributions for asset management, property management, construction, development, leasing, and legal services. Cash flows from the Funds are distributed pro-rata to partners and members (including the Operating Partnership) until each receives a cumulative preferred return (“Preferred Return”) and full return of capital. Thereafter, remaining cash flows are distributed 20% to the Operating Partnership (“Promote”) and 80% to the partners or members (including the Operating Partnership). All intercompany transactions between the Funds and the Operating Partnership are eliminated in consolidation.
The following table summarizes the general terms and Operating Partnership’s equity interests in the Funds (dollars in millions):
Entity
FormationDate
OperatingPartnershipShare ofCapital
Capital Called as of September 30, 2025 (a)
UnfundedCommitment (a)
Equity InterestHeld ByOperatingPartnership (b)
PreferredReturn
Total Distributions as of September 30, 2025 (a)
Fund II (c)
6/2004
80.00
%
559.4
0.0
172.9
Fund III
5/2007
24.54
449.2
0.8
39.63
616.3
Fund IV
5/2012
23.12
506.0
24.0
221.4
Fund V
8/2016
20.10
485.8
34.2
169.8
Also within Investment Management, we hold equity method investments in three unconsolidated co-investment vehicles with large institutional investors. Our equity ownership interests range from 5% to 20% in each venture. These investments are individually negotiated and may result in varying economic terms. In addition to these unconsolidated co-investments, as of September 30, 2025, we also own two assets within the Investment Management platform, that we intend to recapitalize with an institutional investor as part of our Investment Management strategy. Any potential recapitalization remains subject to final agreement between the parties, customary closing conditions, and market uncertainty. Thus, no assurances can be given that the Company will successfully close on a recapitalization.
The 218 REIT Portfolio and Investment Management properties primarily consist of street and urban retail properties, and suburban shopping centers.
Basis of Presentation
The interim Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required for complete annual financial statements. Operating results for interim periods are not necessarily indicative of results for the full fiscal year. In the opinion of management, all adjustments necessary for a fair presentation of interim Condensed Consolidated Financial Statements have been included. These adjustments are of normal recurring nature.
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts in the interim Condensed Consolidated Financial Statements and accompanying notes. The most significant assumptions and estimates include those related to the valuation of real estate, depreciable lives, revenue recognition and the collectability of notes receivable and rents receivable. Actual results could differ from those estimates.
These interim Condensed Consolidated Financial Statements should be read in conjunction with the Company’s 2024 audited consolidated financial statements and notes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2024.
Segments
During the third quarter of 2025, the Company renamed its historical Core Portfolio segment as the REIT Portfolio segment. No prior period information was recast and the designation change did not impact the Company’s condensed consolidated financial statements. Refer to Note 12.
We define our reportable segments based on the manner in which our chief operating decision maker makes key operating decisions, evaluates financial performance, allocates resources and manages our business. This approach aligns with our internal reporting structure and reflects the economic characteristics and nature of our operations. Accordingly, we have identified three reportable operating segments: REIT Portfolio, Investment Management and Structured Financing. Refer to Note 12 for additional segment information.
Recent Accounting Pronouncements
12
In August 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) ASU 2023-05, “Business Combinations - Joint Venture Formations (Subtopic 805-60): Recognition and Initial Measurement” (“ASU 2023-05”). ASU 2023-05 addresses the accounting for contributions made to a joint venture, upon formation, in a joint venture’s separate financial statements. Prior to the amendment, the FASB did not provide specific authoritative guidance on the initial measurement of assets and liabilities assumed by a joint venture upon its formation. ASU 2023-05 requires a joint venture to recognize and initially measure its assets and liabilities at fair value (with exceptions to fair value measurement that are consistent with the business combinations guidance). ASU 2023-05 is effective for all joint venture formations with a formation date on or after January 1, 2025, with early adoption permitted. The adoption of this standard did not have a significant impact on the Company’s consolidated financial statements.
In December 2023, the FASB issued ASU 2023-09 “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”), to expand the disclosure requirements for income taxes, specifically related to the effective tax rate reconciliation and income taxes paid. ASU 2023-09 is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of this guidance; however, it does not expect the adoption of this standard to have a material impact on the consolidated financial statements.
On November 4, 2024, the FASB issued ASU 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses” (“ASU 2024-03”) which requires disaggregated disclosure of income statement expenses for public business entities (PBEs). Additionally, in January 2025, the FASB issued ASU 2025-01 to clarify the effective date of ASU 2024-03. The ASU does not change the expense captions an entity presents on the face of the income statement; rather, it requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements. This guidance applies to all PBEs and is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027, with early adoption permitted. The Company has elected not to early adopt and the requirements will be applied prospectively with the option for retrospective application. The Company is currently evaluating the expected impact of the adoption of this ASU on disclosures within the consolidated financial statements.
On May 12, 2025, the FASB issued ASU 2025-03, “Business Combinations (Topic 805) and Consolidation (Topic 810): Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity” (“ASU 2025-03”), which clarifies that when a business that is a variable interest entity (VIE) is acquired primarily with equity interests, the determination of the accounting acquirer should follow ASC 805 rather than defaulting to the primary beneficiary under ASC 810. The ASU is effective for fiscal years beginning after December 15, 2026, including interim periods within those fiscal years. The Company has elected not to early adopt and the requirements will be applied prospectively with the option for retrospective application. The Company is currently evaluating the expected impact of the adoption of this ASU on the consolidated financial statements.
Any other recently issued accounting standards or pronouncements not disclosed above have been excluded as they are not relevant to the Company, or they are not expected to have a material impact on the Condensed Consolidated Financial Statements.
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2. Real Estate
The Company’s consolidated real estate is comprised of the following for the periods presented (in thousands):
Buildings and improvements
3,411,249
3,174,250
Tenant improvements
332,990
304,645
Land
1,147,235
906,031
Construction in progress
30,944
23,704
Right-of-use assets - finance leases (Note 11)
61,366
Total
4,983,784
4,469,996
Less: Accumulated depreciation and amortization
(989,377
(926,022
Acquisitions
During the nine months ended September 30, 2025, the Company acquired the following retail properties and other retail investments (dollars in thousands):
Property and Location
PercentAcquired
Date ofAcquisition
PurchasePrice (a)
2025 Acquisitions
REIT Portfolio
106 Spring Street - New York, NY
100%
January 9, 2025
55,137
73 Wooster Street - New York, NY
25,459
Renaissance Portfolio - Washington, D.C. (b)
48%
January 23, 2025
245,700
95, 97, and 107 North 6th Street - Brooklyn, NY
April 9, 2025
59,668
85 5th Avenue - New York, NY
April 11, 2025
47,014
70 and 93 North 6th Street - Brooklyn, NY
June 4, 2025
50,323
2117 N. Henderson Avenue (Land Parcel) - Dallas, TX
July 31, 2025
904
Subtotal REIT Portfolio
484,205
Investment Management
Pinewood Square - Lake Worth, FL
March 19, 2025
68,207
The Avenue at West Cobb - Marietta, GA
September 30, 2025
62,701
Subtotal Investment Management
130,908
Total 2025 Acquisitions
615,113
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Purchase Price Allocations
The purchase prices for the acquisitions (excluding any properties that were acquired in development) were allocated to the acquired assets and assumed liabilities based on their estimated relative fair values at the dates of acquisition. The following table summarizes the allocation of the purchase price of properties acquired during the nine months ended September 30, 2025 (in thousands):
Intangible assets
Intangible liabilities
Debt fair value adjustment
106 Spring Street
51,495
5,043
10,165
(11,566
73 Wooster St
15,876
6,775
2,848
(40
Renaissance Portfolio
103,962
127,368
20,016
(4,100
Pinewood Square
17,208
46,208
12,668
(7,877
95, 97, and 107 North 6th Street
17,342
36,493
6,167
(334
85 5th Avenue
32,718
7,318
6,978
70 and 93 North 6th Street
17,058
30,834
5,833
(3,402
2117 N. Henderson Avenue
The Avenue at West Cobb
9,647
40,355
15,633
(2,934
2025 Total
266,210
300,394
80,308
(30,253
The Company determines the fair value of the individual components of real estate asset acquisitions primarily through calculating the “as-if vacant” value of a building, using an income approach, which relies significantly upon internally determined assumptions. Assumed debt is recorded at its fair value based on estimated market interest rates at the date of acquisition. The Company has determined that these estimates primarily rely on Level 3 inputs, which are unobservable inputs based on our own assumptions. The most significant assumptions used in calculating the “as-if vacant” value for acquisition activity during the nine months ended September 30, 2025 are as follows:
Low
High
Exit Capitalization Rate
5.00%
7.75%
Discount Rate
6.25%
10.50%
Annual net rental rate per square foot on acquired buildings
$15.00
$850.00
Interest rate on assumed debt
6.35%
The estimate of the portion of the “as-if vacant” value that is allocated to the land underlying the acquired real estate relies on Level 3 inputs and is primarily determined by reference to recent comparable transactions.
Disposition
During the nine months ended September 30, 2025, the Company disposed of the following retail properties (dollars in thousands):
Owner
Date Sold
Sale Price
Gainon Sale (a)
2025 Dispositions
Mad River - Dayton, OH (b)
REIT
August 19, 2025
15,020
2,756
640 Broadway - New York, NY (c)
IM (Fund III)
September 5, 2025
49,500
172
Total 2025 Dispositions
64,520
2,928
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Properties Held for Sale
As of September 30, 2025, the Company classified a portion of 1035 Third Avenue, a consolidated Fund IV Investment Management property, as held for sale. The property was subsequently sold on October 1, 2025 (Note 16). The assets and liabilities of the property held for sale are presented separately in the accompanying condensed consolidated balance sheets and are summarized as follows:
Assets
Building and improvements
23,341
1,769
(11,246
1,263
Liabilities
Real estate, intangible liabilities
The Company did not have any properties classified as held for sale as of December 31, 2024.
Real Estate Under Development
Real estate under development represents the Company’s consolidated properties that have not yet been placed into service and are undergoing substantial development or construction.
Development activity for these properties during the periods presented is summarized below (dollars in thousands):
January 1, 2025
Nine Months Ended September 30, 2025
Number ofProperties
CarryingValue
Transfers In
CapitalizedCosts
Transfers Out
REIT Portfolio (a)
98,255
3,072
42,219
1,078
IM (Fund III) (b)
31,364
2,621
33,985
44,840
35,063
The number of properties in the table above refers to full-property development projects; however, certain projects represent only a portion of a property, and the capitalized costs and carrying value of these projects are included in the table above. As of September 30, 2025, consolidated development projects included six properties in the Henderson Avenue Portfolio (REIT Portfolio).
Construction in progress refers to construction activity at operating properties that remain in service during the construction period.
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3. Notes Receivable, Net
Interest income from notes and mortgages receivable is reported within the Company’s Structured Financing segment (Note 12). Interest receivable is included in Other assets, net (Note 5). The Company’s notes receivable, net, are generally collateralized by either the underlying real estate or the borrowers’ equity interests in the entities that own the properties. The balances were as follows (dollars in thousands):
Number
Maturity Date
Interest Rate
Notes receivable
156,457
128,588
Apr 2020 - Dec 2027
6.00% - 13.75%
Allowance for credit losses
(1,692
(2,004
Notes receivable, net
In April 2025, the Company modified a redeemable preferred equity investment in a property that is accounted for as a note receivable, with a principal balance of $54.0 million as of March 31, 2025. The maturity date was extended from February 25, 2025 to February 9, 2027, with an option for a one-year extension. As part of this modification, the borrower repaid $25.3 million of accrued interest. The Company also provided a mezzanine loan and additional advances under the preferred equity related to the same asset which also matures on February 9, 2027 and bears interest at a fixed rate of 9.00%. As of September 30, 2025, the Company advanced $28.5 million in aggregate. The borrower entity was determined to be a VIE in which the Company holds a variable interest, but the Company is not the primary beneficiary. Accordingly, the VIE is not consolidated (Note 15).
The following table presents the activity in the allowance for credit losses for the nine months ended September 30, 2025 and year ended December 31, 2024 (in thousands):
Allowance for credit losses as of beginning of periods
2,004
1,279
Provision of loan losses
(312
725
Total credit allowance
1,692
As of September 30, 2025, the Company had six performing notes with a total amortized cost of $142.5 million, including accrued interest of $3.9 million. Each note was evaluated individually due to the lack of comparability across the Structured Financing portfolio.
One note receivable, totaling $21.6 million including accrued interest (exclusive of default interest and other amounts due on the loan that have not been recognized), was in default as of September 30, 2025 and December 31, 2024. The loan matured on April 1, 2020 and was not repaid. The Company expects to take appropriate actions to recover the amounts due under the loan and has issued a reservation of rights letter to the borrowers and guarantor, reserving all of its rights and remedies under the applicable note documents and otherwise. The Company applied the collateral-dependent practical expedient in accordance with ASC Topic 326: Financial Instruments - Credit Losses (“ASC 326”) as the note is expected to be settled through foreclosure or possession of the underlying collateral. Based on the estimated fair value of the collateral at the expected realization date, no allowance for credit losses was recorded.
4. Investments in and Advances to Unconsolidated Affiliates
The Company accounts for its investments in and advances to unconsolidated affiliates primarily under the equity method of accounting. The Company’s investments in and advances to unconsolidated affiliates consist of the following (dollars in thousands):
Ownership Interest
Portfolio
Property
REIT:
Renaissance Portfolio (a)
68%
28,250
Gotham Plaza
49%
30,393
30,561
Georgetown Portfolio (b)
50%
3,792
4,214
1238 Wisconsin Avenue (b, c)
80%
18,194
19,048
840 N. Michigan Avenue (d, e)
94.35%
31,188
28,111
83,567
110,184
Investment Management:
Fund IV: (i)
Fund IV Other Portfolio (j)
90%
432
5,291
650 Bald Hill Road (k)
5,823
9,220
6,255
14,511
Fund V: (i)
Family Center at Riverdale (d)
89.42%
650
1,832
Tri-City Plaza
6,070
6,914
Frederick County Acquisitions (f)
4,879
4,375
Wood Ridge Plaza
8,179
9,313
La Frontera Village
10,519
13,389
Shoppes at South Hills
9,203
10,139
Mohawk Commons
9,897
12,350
49,397
58,312
Other:
Shops at Grand
5%
2,360
2,452
Walk at Highwoods Preserve
20%
1,899
2,279
LINQ Promenade
15%
15,934
16,508
20,193
21,239
Various:
Due from Related Parties
1,480
446
Other (g)
3,511
4,540
Investments in and advances tounconsolidated affiliates
Crossroads (h)
Distributions in excess of income from,and investments in, unconsolidated affiliates
During the second quarter of 2025, the Company, through Fund IV, sold its investment in Eden Square for $28.0 million and repaid the related $23.3 million property mortgage loan. The venture recognized a loss of $1.0 million, of which Fund IV’s proportionate share was $2.1 million due to additional fund-level selling costs and an outstanding basis difference attributable to Fund IV’s investment structure. The Company’s proportionate share of the loss was $0.3 million.
Fees earned from and paid to Unconsolidated Affiliates
The Company earned fees for asset management, property management, construction, development, legal and leasing fees from its investments in unconsolidated affiliates totaling $1.1 million and $0.2 million for the three months ended September 30, 2025 and 2024, respectively, and $3.1 million and $0.6 million for the nine months ended September 30, 2025 and 2024, respectively, which are included in Other revenues in the Condensed Consolidated Statements of Operations.
In addition, the Company’s unconsolidated joint ventures paid fees to the Company’s unaffiliated joint venture partners of $0.7 million and $1.1 million for the three months ended September 30, 2025 and 2024, respectively, and $2.2 million and $3.3 million for the nine months ended September 30, 2025 and 2024, respectively, for leasing commissions, development, management, construction and overhead fees.
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Summarized Financial Information of Unconsolidated Affiliates
The following Combined and Condensed Balance Sheets and Statements of Operations, in each period, summarized the financial information of the Company’s investments in unconsolidated affiliates that were held as of September 30, 2025 (in thousands):
Combined and Condensed Balance Sheets
Assets:
Rental property, net
905,140
1,016,229
Other assets
125,202
162,713
Total assets
1,030,342
1,178,942
Liabilities and partners’ equity:
Mortgage notes payable
631,956
815,045
130,437
140,743
Partners’ equity
267,949
223,154
Total liabilities and partners’ equity
Company's share of accumulated equity
128,152
131,793
Basis differential
8,958
50,851
Deferred fees, net of portion related to the Company's interest
5,232
5,400
Amounts receivable/payable by the Company
Investments in and advances to unconsolidated affiliates, net of Company's share of distributions in excess of income from and investments in unconsolidated affiliates
143,822
188,490
Investments carried at cost
3,462
4,228
Company's share of distributions in excess of income from and investments in unconsolidated affiliates
Combined and Condensed Statements of Operations
29,073
27,792
90,215
83,977
Operating and other expenses
(10,911
(9,488
(34,141
(29,624
(9,895
(31,944
(30,514
(11,946
(10,266
(38,420
(32,062
Gain on extinguishment of debt (a)
971
952
2,893
2,963
Impairment of real estate (c)
(3,480
Gain (loss) on disposition of properties (b)
12,849
(1,030
21,368
Net (loss) income attributable to unconsolidated affiliates
(6,073
11,944
(15,907
16,108
Company’s share of equity in net (losses) earnings of unconsolidated affiliates
(3,596
12,028
(9,304
16,684
Basis differential amortization
(98
(294
(732
Company’s equity in (losses) earnings of unconsolidated affiliates
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5. Other Assets, Net and Accounts Payable and Other Liabilities
Other assets, net and accounts payable and other liabilities are comprised of the following for the periods presented:
Other Assets, Net:
Lease intangibles, net (Note 6)
138,176
86,853
Derivative financial instruments (Note 8)
10,664
31,145
Deferred charges, net (A)
41,905
39,189
Accrued interest receivable (Note 3)
9,068
32,154
Prepaid expenses
19,682
15,448
Due from seller
1,768
2,343
Income taxes receivable
1,250
1,475
Deposits
742
12,074
Corporate assets, net
488
563
Other receivables
6,584
2,523
(A) Deferred Charges, Net:
Deferred leasing and other costs
90,770
82,770
Deferred financing costs related to line of credit
13,939
13,889
104,709
96,659
Accumulated amortization
(62,804
(57,470
Deferred charges, net
Accounts Payable and Other Liabilities:
99,099
77,534
87,124
68,354
Deferred income
32,317
39,351
Tenant security deposits, escrow and other
22,431
14,515
Lease liability - finance leases, net (Note 11)
31,931
31,374
3,331
1,598
6. Lease Intangibles
Upon acquisitions of real estate (Note 2), the Company assesses the relative fair value of acquired assets (including land, buildings and improvements, and identified intangibles such as above- and below-market leases, including below-market options and acquired in-place leases) and assumed liabilities. The lease intangibles are amortized over the remaining terms of the respective leases, including option periods where applicable.
21
Intangible assets and liabilities are included in Other assets, net and Accounts payable and other liabilities (Note 5) on the Condensed Consolidated Balance Sheets and summarized as follows (in thousands):
December 31, 2024
Gross CarryingAmount
AccumulatedAmortization
Net CarryingAmount
Amortizable Intangible Assets
In-place lease intangible assets
409,404
(281,927
127,477
336,660
(255,899
80,761
Above-market rent
32,936
(22,237
10,699
26,432
(20,340
6,092
442,340
(304,164
363,092
(276,239
Amortizable Intangible Liabilities
Below-market rent
(226,102
127,188
(98,914
(196,239
118,933
(77,306
Above-market ground lease
(671
486
(185
443
(228
(226,773
127,674
(99,099
(196,910
119,376
(77,534
During the nine months ended September 30, 2025, the Company:
Amortization of in-place lease intangible assets is recorded in depreciation and amortization expense in the Condensed Consolidated Statements of Operations. Amortization of above-market rent and below-market rent is recorded as a reduction to and increase to rental income, respectively, in the Condensed Consolidated Statements of Operations. Amortization of above-market ground leases is recorded as a reduction to rent expense on the Condensed Consolidated Statements of Operations.
The following table summarizes the scheduled amortization of acquired lease intangible assets and assumed liabilities as of September 30, 2025 (in thousands):
Years Ending December 31,
Net Increase inRental Revenues
Increase toAmortization Expense
Reduction ofProperty Operating Expense
2025 (Remainder)
2,017
(8,800
2026
7,800
(29,845
2027
7,271
(23,214
2028
7,363
(16,559
54
2029
7,567
(11,265
Thereafter
56,197
(37,794
88,215
(127,477
185
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7. Debt
A summary of the Company’s consolidated indebtedness is as follows (dollars in thousands):
Carrying Value as of
Interest Rate as of
Maturity Date as of
Mortgages Payable
3.99% - 6.05%
Nov 2026 - Apr 2035
$230,766
$180,212
Fund II (a)
SOFR+1.90%
Aug 2028
137,500
137,485
33,000
Fund IV (b)
SOFR+2.15% - SOFR+3.33%
Oct 2025 - Jun 2028
109,449
109,471
SOFR+1.75% - SOFR+3.10%
Nov 2025 - Jun 2028
505,364
498,779
Net unamortized debt issuance costs
(5,315)
(5,459)
Unamortized premium
1,151
212
Total Mortgages Payable
$978,915
$953,700
Unsecured Notes Payable
Term Loans (c)
SOFR+1.20% - SOFR+1.40%
Apr 2028 - Jul 2030
$725,000
$475,000
Senior Notes
5.86% - 5.94%
Aug 2027 - Aug 2029
100,000
(6,907)
(5,434)
Total Unsecured Notes Payable
$818,093
$569,566
Unsecured Line of Credit
Revolving Credit (c)
SOFR+1.25%
Apr 2028
$65,000
$14,000
Total Debt (d)(e)
$1,873,079
$1,547,947
(12,222)
(10,893)
Total Indebtedness
$1,862,008
$1,537,266
A portion of the Company’s variable-rate property mortgage debt has been effectively fixed through certain cash flow hedge transactions (Note 8).
At September 30, 2025 and December 31, 2024, the Company’s property mortgage loans were collateralized by 49 and 31 properties, respectively, as well as the related tenant leases. Certain loans are cross-collateralized and contain cross-default provisions. The loan agreements contain customary representations, covenants and events of default. Certain loan agreements require the Company to comply with affirmative and negative covenants, including the maintenance of debt service coverage and leverage ratios. The Company was in compliance with its debt covenants as of September 30, 2025.
On January 23, 2025, the Company acquired an additional 48% economic ownership interest in the Renaissance Portfolio (Note 2). The properties were subject to existing mortgage indebtedness. At acquisition the property mortgage loans had an aggregate outstanding principal balance of $156.1 million, bore interest at the Secured Overnight Financing Rate (“SOFR”) + 2.65% and was scheduled to mature on November 6, 2026. The property mortgage loans were recorded at a fair value of approximately $156.1 million. On January 24, 2025, the venture modified the property mortgage loan to reduce the interest rate to SOFR + 1.55%. This reduction was achieved through a $50.0 million principal paydown, which was funded by the Company as a note receivable from the venture. The note bears interest at 9.11%, matures in November 2026, and has been eliminated in consolidation.
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During the nine months ended September 30, 2025, the Company repaid a $50.0 million property mortgage loan and made scheduled principal payments totaling $1.4 million.
During the nine months ended September 30, 2025, the Company, through its Investment Management segment:
Unsecured Notes Payable and Unsecured Line of Credit
Credit Facility
In the second quarter of 2025, the Operating Partnership and the Company entered into the Third Amendment to the Third Amended and Restated Credit Agreement (the “Amendment”) to amend the existing senior unsecured credit facility (the “Credit Facility”), which includes a $525.0 million unsecured revolving credit facility (the “Revolver”) maturing on April 15, 2028, with two six-month extension options, and a $400.0 million unsecured term loan (the “Term Loan”) also maturing on April 15, 2028, with two six-month extension options. The Amendment established a new five-year $250.0 million incremental delayed draw term loan (the “$250.0 Million Term Loan”), of which $175.0 million was drawn at closing. The Amendment also increased the accordion feature limit to $1.5 billion and reduced the borrowing rate on the entire $925.0 million Credit Facility by 10 basis points. The $250.0 Million Term Loan bears interest at a floating rate based on SOFR with margins based on leverage or credit rating and matures on May 29, 2030. At September 30, 2025, the $250.0 Million Term Loan bears interest at SOFR + 1.20%.
At September 30, 2025, the Term Loan had an outstanding balance of $400.0 million and bore interest at SOFR + 1.40%. During the third quarter of 2025, the Company drew the remaining $75.0 million available under the $250.0 Million Term Loan. As a result, both the Term Loan and the $250.0 Million Term Loan were fully utilized, with no remaining borrowing capacity under either facility as of September 30, 2025.
Other Unsecured Term Loans
Excluding the Term Loan and the $250.0 Million Term Loan described above, which are part of the Credit Facility, the Operating Partnership also has a $75.0 million term loan (the “$75.0 Million Term Loan”), with TD Bank, N.A., as administrative agent. The $75.0 Million Term Loan is not part of the Credit Facility. During the third quarter of 2025, the $75.0 Million Term Loan was amended to extend the maturity date by one year to July 2030 and reduced the leverage and credit based floating SOFR rate. At September 30, 2025, the $75.0 Million Term Loan bore interest at SOFR + 1.20%. The $75.0 Million Term Loan is guaranteed by the Trust and certain subsidiaries of the Trust (Note 9).
On August 21, 2024, the Operating Partnership issued $100.0 million aggregate principal amount of senior unsecured notes in a private placement, of which (i) $20.0 million are designated as 5.86% Senior Notes, Series A, due August 21, 2027 (the “Series A Notes”) and (ii) $80.0 million are designated as 5.94% Senior Notes, Series B, due August 21, 2029 (together with the Series A Notes, the “Senior Notes”) pursuant to a note purchase agreement (the “Senior Note Purchase Agreement”), dated July 30, 2024, between the Company, Operating Partnership and the purchasers named therein.
The Senior Notes were issued at par in accordance with the Senior Note Purchase Agreement and pay interest semiannually on February 21st and August 21st until their respective maturities. The Company may prepay the Senior Notes at any time in full or in part subject to certain limitations set forth in the Senior Note Purchase Agreement. The Senior Notes are guaranteed by the Company and certain subsidiaries of the Company.
24
Revolver
At September 30, 2025, the Revolver, which is part of the Credit Facility discussed above, bore interest at SOFR + 1.25% and matures on April 15, 2028, subject to two six-month extension options. The outstanding balance and total available credit of the Revolver were $65.0 million and $460.0 million, respectively, as of September 30, 2025, reflecting no letters of credit outstanding. The outstanding balance and total available credit of the Revolver were $14.0 million and $511.0 million, respectively, as of December 31, 2024, reflecting no letters of credit outstanding.
The Company was in compliance with its unsecured notes payable and unsecured line of credit debt covenant requirements as of September 30, 2025.
Scheduled Debt Principal Payments
The following table summarizes the scheduled principal repayments, without regard to available extension options (described further below), of the Company’s consolidated indebtedness, as of September 30, 2025 (in thousands):
Year Ending December 31,
Principal Repayments
84,075
328,938
274,373
759,484
98,291
327,918
1,873,079
(12,222
Total indebtedness
1,862,008
The table above does not reflect available extension options (subject to customary conditions) on consolidated debt with balances as of September 30, 2025. The Company has the option to extend the following debt maturities by up to twelve months, and for some an additional twelve months thereafter, including $35.2 million contractually due in the remainder of 2025, $186.9 million in 2026, $250.7 million due in 2027 and $660.0 million in 2028. Execution of these extension options is subject to customary conditions, and there can be no assurance that the Company will meet such conditions or elect to exercise the options.
8. Financial Instruments and Fair Value Measurements
The Company measures certain financial assets and liabilities at fair value on a recurring and nonrecurring basis in accordance with ASC Topic: 820, Fair Value Measurement. The following disclosure summarizes the valuation methodologies and classification within the fair value hierarchy for these instruments.
Items Measured at Fair Value on a Recurring Basis
The Company’s recurring fair value measurements include marketable equity securities and derivative financial instruments. The valuation techniques and classifications are as follows:
Marketable Equity Securities — The Company holds an investment in Albertsons common stock, which is traded on an active exchange and is classified as a Level 1 asset. This investment is included in Marketable securities on the Condensed Consolidated Balance Sheets at September 30, 2025 and December 31, 2024, respectively.
Derivative Financial Instruments — The Company utilizes interest rate swaps and caps to manage interest rate risk on variable-rate debt. These derivatives are over-the-counter instruments valued using observable market inputs, such as interest rate curves, and are classified as Level 2. Derivative assets are included in Other assets, net, and derivative liabilities are included in Accounts payable and other liabilities on the Condensed Consolidated Balance Sheets. See “Derivative Financial Instruments,” below.
25
The following table presents the Company’s fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis (in thousands):
Level 1
Level 2
Level 3
Marketable equity securities
Derivative financial instruments
(3,331
(1,598
In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the fair value hierarchy classification is based on the lowest level input that is significant to the valuation. Assessing the significance of a particular input requires judgment and takes into account factors specific to the asset or liability being measured.
The Company did not have any transfers into or out of Level 1, Level 2, and Level 3 measurements during the nine months ended September 30, 2025, and 2024.
Marketable Equity Securities
During the three and nine months ended September 30, 2025, the Company sold 250,000 shares and 495,000 shares of Albertsons, generating net proceeds of $4.4 million and $9.8 million, respectively. During the three and nine months ended September 30, 2024, the Company sold 150,000 shares and 500,000 shares of Albertsons, generating net proceeds of $2.9 million and $10.5 million, respectively. As of September 30, 2025, the Company held 257,112 shares of Albertsons with a fair value of $4.5 million, which were subsequently sold in October 2025 for net proceeds of $4.7 million (Note 16).
Dividend income from marketable securities totaled $0.1 million and $0.1 million for the three months ended September 30, 2025 and 2024, respectively, and $0.3 million and $0.4 million for the nine months ended September 30, 2025 and 2024, respectively. These amounts are included in Realized and unrealized holding gains (losses) on investments and other on the Company’s Condensed Consolidated Statements of Operations.
The following table represents the realized and unrealized gains (losses) on marketable securities included in Realized and unrealized holding gains (losses) on investments and other on the Company’s Condensed Consolidated Statements of Operations (in thousands):
Realized gain on marketable securities, net
4,355
2,923
10,504
Less: previously recognized unrealized gains on marketable securities sold during the period
(4,355
(2,923
(9,761
(10,504
Unrealized (losses) gains on marketable securities still held as of the end of the period and through the disposition date on marketable securities sold during the period
(2,051
(1,242
(508
(5,277
Realized and unrealized (losses) gains on marketable securities, net
26
Items Measured at Fair Value on a Nonrecurring Basis
Refer to Note 2 for fair value adjustments related to the acquisition of an additional 48% economic ownership interest in the Renaissance Portfolio.
Impairment Charges
Impairment charges for the nine months ended September 30, 2025 are as follows (in thousands):
Impairment Charge
Property Location
Triggering Event
Effective Date
Acadia's Share
2025 Impairment Charges
New York, NY (a)
Reduced holding period
Jun 30, 2025
7,240
1,777
New York, NY (b)
IM (Fund IV)
17,400
3,991
East Farmingdale, NY (c)
Sep 30, 2025
3,085
Total 2025 Impairment Charges
8,853
During the nine months ended September 30, 2025, the Company recognized an additional $0.6 million impairment charge for the declining fair value of the Company’s cost-method investment in Fifth Wall (Note 4), which is included in Realized and unrealized holding gains (losses) on investments and other, in the Company’s Condensed Consolidated Statement of Operations.
Redeemable Noncontrolling Interests
The Company has redeemable noncontrolling interests related to certain properties. The Company periodically evaluates redeemable noncontrolling interests to determine whether the maximum redemption value exceeds the carrying value. As of September 30, 2025, the Company recorded an adjustment of redeemable non-controlling interest to its estimated redemption value. Refer to Note 10 for further discussion regarding these interests.
27
Derivative Financial Instruments
The Company had the following interest rate swaps and caps for the periods presented (information is as of September 30, 2025, unless otherwise noted, and dollars in thousands):
Strike Rate
Fair Value
DerivativeInstrument
Aggregate Notional Amount
Balance SheetLocation
September 30,2025
December 31,2024
Interest Rate Swaps
531,000
May 2022—Apr 2025
Apr 2026—Jul 2030
1.98%
3.23%
Other Assets
10,480
28,173
377,000
Dec 2022—Aug 2025
Nov 2026—Apr 2030
3.35%
4.50%
(2,353
(1,316
908,000
8,127
26,857
Fund II
Interest Rate Swap
50,000
Jan 2023
Dec 2029
157
1,615
Interest Rate Cap
Sep 2023
Oct 2025
5.50%
54,500
Dec 2023
Dec 2025
6.00%
2
15,804
May 2023
May 2026
3.47%
1,352
243,586
Jan 2023—Aug 2025
Mar 2026—Feb 2028
3.36%
4.49%
(978
(282
32,200
Sep 2025
Sep 2026
291,590
(951
1,072
Total asset derivatives
Total liability derivatives
All of the Company’s derivative instruments are designated as cash flow hedges and hedge the future cash outflows on variable-rate debt (Note 7). As of September 30, 2025, it is estimated that approximately $8.5 million included in Accumulated other comprehensive income related to derivatives will be reclassified as a reduction to interest expense within the next twelve months. As of September 30, 2025 and December 31, 2024, no derivatives were designated as fair value hedges or hedges of net investments in foreign operations. The Company does not use derivatives for trading or speculative purposes and currently does not have any derivatives that are not designated hedges.
During the nine months ended September 30, 2025, the Company terminated three forward-starting interest rate swaps with an aggregate notional value of $100.0 million. The associated loss remains in Accumulated other comprehensive income and will be reclassified from Accumulated other comprehensive income into earnings as interest expense over the period during which the hedged forecasted transaction affects earnings.
Risk Management Objective of Using Derivatives
The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company manages economic risks, including interest rate, liquidity and credit risk, primarily by managing the amount, sources and duration of its debt funding and, from time to time, through the use of derivative financial instruments. The Company enters into derivative financial instruments to manage exposures that result in the receipt or payment of future known and uncertain cash amounts, the values of which are determined by interest rates. The Company’s derivative financial instruments are used to manage differences in the amount, timing and duration of the Company’s known or expected cash receipts and its known or expected cash payments principally related to the Company’s investments and borrowings.
The Company is exposed to credit risk in the event of non-performance by the counterparties to the swaps if the derivative position has a positive balance. The Company believes it mitigates its credit risk by entering into swaps with major financial institutions. The Company continually monitors and actively manages interest costs on its variable-rate debt portfolio and may enter into additional interest rate swap positions or other derivative interest rate instruments based on market conditions.
28
Credit Risk-Related Contingent Features
The Company’s agreements with its swap counterparties include provisions that could require immediate settlement of outstanding swap obligations in the event of a default. Specifically, if the Company defaults on certain unsecured debt obligations, such default may trigger a cross-default under the swap agreements, allowing the counterparties to declare an event of default and accelerate payment obligations under the swaps.
Other Financial Instruments
The carrying values and fair values of Company’s other financial assets and liabilities that are not measured at fair value on its Condensed Consolidated Balance Sheets are as follows as of the dates shown (dollars in thousands, inclusive of amounts attributable to noncontrolling interests where applicable):
Level
CarryingAmount
EstimatedFair Value
Notes Receivable (a)
157,315
127,485
City Point Loan (a)
34,821
35,368
66,741
68,204
Mortgage and Other Notes Payable (a, d)
983,079
978,302
958,947
954,276
Investment in non-traded equity securities (b)
3,307
4,073
Unsecured notes payable and Unsecured line of credit (c, e)
890,000
892,920
589,000
589,018
As of September 30, 2025 and December 31, 2024, the carrying amounts of the Company’s cash and cash equivalents, restricted cash, rents receivable, accounts payable, and certain financial instruments classified as Level 1 within other assets and other liabilities approximated their fair values. This approximation is due to the short-term nature and high liquidity of these instruments.
9. Commitments and Contingencies
The Company is involved in various matters of litigation arising out of, or incidental to, its business. While the Company is unable to predict with certainty the outcome of any particular matter, management does not expect, when such litigation is resolved, that the Company’s resulting exposure to loss contingencies, if any, will have a material adverse effect on its consolidated financial position or results of operations.
Commitments and Guaranties
From time to time, the Company (or ventures in which the Company has an ownership interest) has agreed, and may in the future agree, to guarantee portions of the principal, interest and other amounts in connection with their borrowings, provide customary environmental indemnifications and nonrecourse carve-outs (e.g., guarantees against fraud, misrepresentation and bankruptcy) in connection with their borrowings and provide guarantees to lenders, tenants and other third parties for the completion of development projects.
With respect to borrowings of our consolidated entities, the Company and certain subsidiaries of the Company have guaranteed $42.5 million of principal payment guarantees on various property mortgage loans and the Fund IV secured bridge facility (Note 7). As of September 30, 2025 and December 31, 2024, no amounts related to the guarantees were recorded as liabilities in the Company’s Condensed Consolidated Financial Statements. As of September 30, 2025 and December 31, 2024, the Company had no REIT Portfolio or Investment Management letters of credit outstanding.
29
Additionally, in connection with the refinancing of the La Frontera Village (Note 4) property mortgage loan of $57.0 million, which is collateralized by the investment property, Fund V guaranteed the joint venture’s obligation under the loan. Fund V acted as guarantor under the non-recourse carveout guaranty. At September 30, 2025 and December 31, 2024, $0.1 million and $0.2 million related to the guarantee was recorded as a liability in the Company’s Condensed Consolidated Balance Sheets, respectively.
Construction and Tenant Improvement Commitments
In conjunction with the development and expansion of various properties, the Company has entered into agreements with general contractors for the construction or development of properties aggregating approximately $73.3 million and $97.4 million, of which the Company’s share is $72.1 million and $95.2 million as of September 30, 2025 and December 31, 2024, respectively.
Additionally, the Company has committed to fund tenant improvements under executed leases totaling approximately $39.6 million and $41.4 million, as of September 30, 2025 and December 31, 2024, respectively. The Company’s share of these obligations is approximately $32.4 million and $32.3 million, respectively. The timing and amounts of these payments are uncertain and are subject to the satisfaction of certain performance conditions.
Forfeiture of Deposits
The Company entered into a purchase and sale agreement (together with subsequent amendments thereto) to sell its West Shore Expressway property in the REIT Portfolio segment. At the request of the former potential buyer, the Company extended the closing date numerous times in exchange for additional non-refundable deposits and contributions towards the carrying costs of the property. The agreement terminated and expired by its terms in August 2023, and the deposit was forfeited to an affiliate of the Company, when, among other things, the former potential buyer failed to close on the property pursuant to the terms of the agreement. During the third quarter of 2023, the former potential buyer filed for Chapter 11 bankruptcy, which bankruptcy was dismissed during the fourth quarter of 2023, and as of March 31, 2024 is no longer subject to appeal. The Company recorded income of $3.5 million in Other revenues on the Consolidated Statements of Operations for the nine months ended September 30, 2024, related to the forfeiture of the non-refundable payments.
Insurance Coverage
The Company maintains insurance coverage on its properties in different types and amounts, with deductibles, that management believes are consistent with coverage typically carried by owners of similar properties.
10. Shareholders’ Equity, Noncontrolling Interests and Other Comprehensive Loss
ATM Program
The Company has an at-the-market equity issuance program (“ATM Program”) that provides the Company with an efficient vehicle for raising public equity capital to fund its needs. In February 2025, the Company entered into its current $500.0 million ATM Program, which includes an optional “forward sale” component, and concurrently terminated its existing $400.0 million ATM program. As of September 30, 2025, $238.7 million remains available for future share issuance under the current program.
As of September 30, 2025, the Company had 12,759,835 forward shares outstanding under its ATM Program at a weighted-average net offering price of $20.27. All forward sales agreements require settlement within one-year of the various effective dates and are expected to result in net cash proceeds of approximately $258.6 million if the Company were to physically settle all outstanding forward shares.
In March 2025, the Company physically settled 11,172,699 shares outstanding under the ATM Program’s forward, and received net proceeds of $277.9 million.
30
The Company did not receive any proceeds from the sale of shares at the time it entered into each of the respective forward sale agreements. The Company determined that the ATM forward sales agreements meet the criteria for equity classification and, therefore, are exempt from derivative accounting. The Company recorded the ATM forward sales agreements at fair value at inception, which was determined to be zero, and no subsequent fair value adjustments are required under equity classification.
Common Shares and Units
During the nine months ended September 30, 2025, the Company withheld 5,635 shares of its restricted Common Shares (“Restricted Shares”) to pay the employees’ statutory minimum income tax withholding obligations upon vesting. For the nine months ended September 30, 2025, the Company recognized $8.3 million in connection with Restricted Shares and Common OP Units (Note 13).
Share Repurchase Program
In 2018, the Company’s board of trustees (the “Board”) approved a new share repurchase program, which authorizes management, at its discretion, to repurchase up to $200.0 million of its outstanding Common Shares. The program does not obligate the Company to repurchase any specific number of Common Shares and may be discontinued or extended at any time. No shares were repurchased during the nine months ended September 30, 2025 or 2024. As of September 30, 2025, $122.5 million remains available under the share repurchase program.
Dividends and Distributions
During the three months ended September 30, 2025 and 2024, the Company declared distributions of $0.20 and $0.19 per Common Share/OP Unit, respectively. During the nine months ended September 30, 2025 and 2024, the Company declared distributions of $0.60 and $0.55 per Common Share/Unit in the aggregate, respectively.
31
Noncontrolling Interests
The following tables summarize the change in the noncontrolling interests for the three and nine months ended September 30, 2025 and 2024 (dollars in thousands, except per unit data):
NoncontrollingInterests inOperatingPartnership (a)
NoncontrollingInterests inPartially-OwnedAffiliates (b)
Redeemable Noncontrolling Interests (c)
94,599
342,434
Distributions declared of $0.20 per Common OP Unit and distributions on Preferred OP Units
Net income (loss) for the three months ended September 30, 2025
314
(15,320
(15,006
Conversion of 17,266 Common OP Units to Common Shares by limited partners of the Operating Partnership
Other comprehensive income - unrealized loss on valuation of swap agreements
(115
377
262
Reclassification of realized interest expense on swap agreements
(4
(602
(606
Employee Long-term Incentive Plan Unit Awards
Reallocation of noncontrolling interests (d)
93,365
316,615
85,683
371,538
Distributions declared of $0.19 per Common OP Unit and distributions on Preferred OP Units
Net income (loss) for the three months ended September 30, 2024
474
5,038
5,512
Conversion of 31,847 Common OP Units and 18,266 Series C Preferred Units to Common Shares by limited partners of the Operating Partnership
Other comprehensive income - unrealized gain on valuation of swap agreements
(1,400
(4,831
(6,231
(32
(2,409
(2,441
84,046
364,154
32
85,730
350,287
Distributions declared of $0.60 per Common OP Unit and distributions on Preferred OP Units
Net income (loss) for the nine months ended September 30, 2025
649
(48,432
(47,783
Conversion of 153,436 Common OP Units to Common Shares by limited partners of the Operating Partnership
(874
(1,394
(2,268
(28
(1,839
(1,867
99,718
346,582
Distributions declared of $0.55 per Common OP Unit and distributions on Preferred OP Units
Net income (loss) for the nine months ended September 30, 2024
979
(608
371
Conversion of 1,082,296 Common OP Units and 59,865 Series C Preferred Units to Common Shares by limited partners of the Operating Partnership
(455
2,815
(136
(9,743
(9,879
33
Williamsburg Portfolio
In connection with the Williamsburg Portfolio acquisition in February 2022, the venture partner has a one-time right to put its 50.01% interest in the property to the Company for redemption at fair value after five years have passed (“Williamsburg NCI”). As it was unlikely as of the acquisition date that the venture partner would receive any consideration on redemption due to the Company’s preferential returns, the initial fair value of the Williamsburg NCI was determined to be zero. As of September 30, 2025, the fair value of the Williamsburg NCI was zero.
City Point Loan
In August 2022, the Company provided a loan, through a separate lending subsidiary, to other Fund II investors in City Point, through a separate borrower subsidiary, to fund the investors’ pro-rata contribution necessary to complete the refinancing of the City Point debt, of which $65.9 million was funded at closing (“City Point Loan”). The City Point Loan has a five-year term which matures on August 1, 2027 and is collateralized by the investors’ equity in City Point (“City Point NCI”).
Because the City Point Loan was granted in return for a capital contribution from the investors, and is collateralized by the City Point NCI, the City Point Loan and accrued interest, net of a $0.5 million allowance for credit loss as of September 30, 2025, are presented as a reduction of the City Point NCI balance. The borrower subsidiary of the City Point Loan was determined to be a VIE for which the Company is not the primary beneficiary. The maximum loss in the VIE is limited to the amount of the City Point Loan and any accrued interest.
In connection with the City Point Loan, each investor has a one-time right to put its City Point NCI to the Company for redemption in exchange for the settlement of its proportion of the City Point Loan amount plus either (i) a fixed cash amount or (ii) a cash amount equal to the value of fixed number of Common Shares of the Company on the trading day prior to the election, which began in August 2023 (“Redemption Value”). As a result of granting these redemption rights, the City Point NCI, net of the City Point Loan, has been reclassified and presented as Redeemable noncontrolling interests on the Company’s Consolidated Balance Sheets.
During the third quarter of 2025, two Fund II investors exercised their put rights related to their City Point NCI. Pursuant to the terms of the agreements, the Company redeemed the redeemable noncontrolling interests for total consideration of $56.0 million, which comprised the assumption of the redeeming partner’s portion of the City Point Loan and accrued interest balance of $48.0 million and a cash payment of $8.0 million. Following the redemption, the Company owns 80.0% of Fund II (Note 1). As the Company retained control of the subsidiary, the transaction was accounted for as an equity transaction with the difference between the carrying amount of the redeeming investor’s share of its redeemable noncontrolling interest of $56.3 million and the total consideration of the aforementioned $56.0 million recognized as a $0.3 million increase to Additional Paid-in Capital. No gain or loss was recognized in the Condensed Consolidated Statement of Operations.
The Company is required to periodically evaluate the maximum redemption amount of the City Point NCI interest and recognize an increase in the carrying value if the redemption value exceeds the carrying value at date of evaluation. The Company recognizes changes in the redemption price immediately as they occur. As of September 30, 2025, the Company recorded an adjustment of $0.9 million to adjust the carrying value of the City Point NCI to its redemption value. As the noncontrolling interests are redeemable at an amount other than fair value, the measurement adjustment affected net income attributable to Acadia shareholders earnings per share (Note 14).
8833 Beverly Boulevard
In July 2023, the Company entered into a limited partnership agreement to own and operate the 8833 Beverly Boulevard property. Following the formation of the partnership, the Company retained a 97.0% controlling interest. At a future point in time, either party may elect a buy-out right, where either the Company may purchase the venture partner’s interest, or the venture partner may sell its 3.0% interest in the partnership (the “8833 Beverly NCI”) to the Company for fair value. As a result of these redemption rights, the 8833 Beverly NCI was initially recorded at fair value. As of September 30, 2025, the Company recorded an adjustment of $0.2 million to adjust the carrying value of the NCI to its redemption value. As this interest is redeemable at fair value, the adjustment to redemption value was recognized as an adjustment to Additional Paid-in Capital and had no impact on consolidated Net (loss) income, or Net income attributable to Acadia shareholders in the Company’s Condensed Consolidated Statements of Operations.
34
Preferred OP Units
During 2016, the Operating Partnership issued 442,478 Common OP Units and 141,593 Series C Preferred OP Units to a third party to acquire Gotham Plaza (Note 4). The Series C Preferred OP Units have a value of $100.00 per unit and are entitled to a preferred quarterly distribution of $0.9375 per unit and are convertible into Common OP Units at a rate based on the share price at the time of conversion. If the share price is below $28.80 on the conversion date, each Series C Preferred OP Unit will be convertible into 3.4722 Common OP Units. If the share price is between $28.80 and $35.20 on the conversion date, each Series C Preferred OP Unit will be convertible into a number of Common OP Units equal to $100.00 divided by the closing share price. If the share price is above $35.20 on the conversion date, each Series C Preferred OP Unit will be convertible into 2.8409 Common OP Units. The Series C Preferred OP Units have a mandatory conversion date of December 31, 2025, at which time all units that have not been converted will automatically be converted into Common OP Units based on the same calculations. Through September 30, 2025, 75,074 Series C Preferred OP Units were converted into 260,475 Common OP Units and then into Common Shares.
In 1999, the Operating Partnership issued 1,580 Series A Preferred OP Units in connection with the acquisition of a property, which have a stated value of $1,000 per unit, and are entitled to a preferred quarterly distribution of the greater of (i) $22.50 (9% annually) per Series A Preferred OP Unit or (ii) the quarterly distribution attributable to a Series A Preferred OP Unit if such unit was converted into a Common OP Unit. Through September 30, 2025, 1,392 Series A Preferred OP Units were converted into 185,600 Common OP Units and then into Common Shares. The 188 remaining Series A Preferred OP Units are currently convertible into Common OP Units based on the stated value divided by $7.50. Either the Company or the holders can currently call for the conversion of the Series A Preferred OP Units at the lesser of $7.50 or the market price of the Common Shares as of the conversion date.
11. Leases
As Lessor
The Company’s primary source of revenue is derived from lease agreements related to its portfolio of shopping centers and other retail properties. As of September 30, 2025, the Company was party to approximately 1,400 leases, which include both properties owned directly and those operated under long-term ground leases. These lease agreements have contractual terms that extend through February 2, 2084, and many include tenant renewal options. Certain leases also provide tenants with early termination rights.
Lease terms generally range from one month to sixty years. In addition to fixed base rent, many leases include provisions for variable lease payments, such as reimbursements for operating expenses and rent based on a percentage of the tenant’s sales volume.
The following table presents the components of rental revenue, disaggregated into fixed and variable lease income (in thousands):
Fixed lease revenue
80,558
70,073
243,631
208,096
Variable lease revenue
18,156
16,215
56,020
49,855
Total rental revenue
The following table summarizes the Company’s scheduled future minimum rental revenues under non-cancelable tenant leases with remaining terms greater than one year, as of September 30, 2025. These amounts assume no new or renegotiated leases or exercise of renewal options not deemed reasonably certain (in thousands):
Minimum RentalRevenues
71,497
300,258
284,606
252,945
215,119
833,535
1,957,960
35
During the first quarter of 2025, the Company recognized $8.4 million as rental and termination income related to a lease termination at City Center, a REIT Portfolio property, which is included in Other revenue on the Company’s Condensed Consolidated statements of operations.
During the three and nine months ended September 30, 2025 and 2024, no single tenant or property collectively comprised more than 10% of the Company’s total revenues.
As Lessee
The Company leases certain properties that are owned by third parties, including ground leases for retail properties and leases for office space and equipment. These leases grant the Company the right to operate the underlying assets during the lease term. Lease terms generally range from five years to 98 years and may include renewal options that are evaluated for likelihood of exercise. The Company classifies these arrangements as either operating or finance leases in accordance with ASC Topic 842, Leases.
Minimum Rental Payments
Operating Leases (a)
Finance Leases (a)
1,305
333
5,637
1,350
4,850
4,646
1,396
4,121
1,415
13,066
155,320
33,625
161,164
Interest
(6,656
(129,233
The following table summarizes additional lease cost information for the Company’s lessee arrangements (dollars in thousands):
Lease Cost
Finance lease cost:
Amortization of right-of-use assets
374
361
1,121
964
Interest on lease liabilities
512
511
1,541
1,545
Subtotal
886
872
2,662
2,509
Operating lease cost
1,409
1,306
4,124
3,941
Variable lease cost
38
78
232
222
Total lease cost
2,333
2,256
7,018
6,672
Cash Paid
Payments of operating lease obligations - operating activities
1,365
1,329
4,097
4,044
Payments of interest on finance lease obligations - operating activities
516
505
1,539
Payments of finance lease obligations - financing activities
179
1,983
2,072
As of September 30,
Weighted-average remaining lease term - finance leases (years)
56.4
56.9
Weighted-average remaining lease term - operating leases (years)
8.2
9.2
Weighted-average discount rate - finance leases
6.5
Weighted-average discount rate - operating leases
5.1
36
During the first quarter of 2025, the Company entered into a new corporate office lease. The Company recognized a $2.1 million right-of-use asset and corresponding lease liability related to the operating lease. The lease term was determined based on the noncancelable period and renewal options that the Company is reasonably certain to exercise. The lease liability was measured using the Company’s incremental borrowing rate at lease commencement.
12. Segment Reporting
The Company renamed its historical Core Portfolio segment as the REIT Portfolio segment. No prior period information was recast and the designation change did not impact the Company’s condensed consolidated financial statements. Refer to Note 1.
The Company has identified three reportable segments: REIT Portfolio, Investment Management and Structured Financing. The Company’s Chief Operating Decision Maker (“CODM”), its Chief Executive Officer, evaluates the performance of these segments and allocates resources based on financial information presented at the segment level. The CODM primarily uses net income as the key measure of segment profitability, as it reflects a comprehensive view of the segments’ financial performance, including all revenues and expenses.
The Company’s REIT Portfolio segment consists primarily of high-quality core retail properties located primarily in high-barrier-to-entry, densely-populated metropolitan areas with a long-term investment horizon. The Company’s Investment Management segment holds primarily retail real estate in which the Company co-invests with high-quality institutional investors. The Company’s Structured Financing segment consists of earnings and expenses related to notes and mortgages receivable (Note 3).
Fees earned by the Company as the general partner or managing member through consolidated Investment Management entities are eliminated in the Company’s Condensed Consolidated Financial Statements and are not presented in the Company’s segments.
The following tables present selected financial information for each reportable segment (in thousands):
For the Three Months Ended September 30, 2025
REITPortfolio
StructuredFinancing
Unallocated
Rental revenue
57,162
41,552
Other revenue
876
1,416
Depreciation and amortization expenses
(22,663
(16,221
(38,884
Property operating expenses
(7,732
(8,895
(16,627
(7,469
(4,363
(11,832
General and administrative expenses
(10,924
(12,570
(241
22,930
678
Interest income
Equity in losses of unconsolidated affiliates
(135
(3,559
(10,753
(13,551
Realized and unrealized holding (losses) gains on investments and other
(2,205
445
Net income (loss)
9,837
(16,432
6,566
(10,926
Net (income) loss attributable to noncontrolling interests
(151
15,157
9,686
292
37
For the Three Months Ended September 30, 2024
45,064
41,224
946
(17,788
(16,712
(34,500
(6,405
(7,946
(14,351
(6,755
(4,432
(11,187
(10,215
14,627
13,080
Equity in earnings of unconsolidated affiliates
781
11,003
(9,536
(13,827
(1,110
(393
Net income
4,762
10,256
7,466
(10,230
Net income attributable to noncontrolling interests
(567
(4,945
4,195
6,983
As of or for the Nine Months Ended September 30, 2025
178,635
121,016
2,163
4,178
(68,792
(48,801
(117,593
(25,924
(26,507
(52,431
(25,207
(13,245
(38,452
(34,053
(37,210
63,631
(810
(344
(9,254
(29,687
(41,468
(831
638
23,147
(51,532
19,213
(34,382
Net loss attributable to noncontrolling interests
194
47,589
1,017
Real estate at cost (a)
3,298,167
1,828,085
5,126,252
Total assets (a)
3,157,469
1,562,958
Cash paid for acquisition of real estate
276,852
130,055
406,907
Cash paid for development and property improvement costs
72,019
14,619
86,638
As of or for the Nine Months Ended September 30, 2024
141,740
116,211
6,268
2,136
(54,020
(49,701
(103,721
(23,833
(25,395
(49,228
(21,625
(11,889
(33,514
(30,162
(Loss) gain on disposition of properties
(2,213
1,772
46,317
33,134
3,528
12,424
(29,513
(41,140
(5,128
(790
15,204
4,418
17,720
(30,363
(1,130
759
Net loss attributable to Acadia shareholders
14,074
11,695
2,648,558
1,810,863
4,459,421
2,547,118
1,602,629
126,576
4,276,323
19,300
29,555
48,855
36,217
26,182
62,399
13. Share Incentive and Other Compensation
Share Incentive Plan
The Amended and Restated 2020 Share Incentive Plan, as approved by the Board and the Company’s shareholders, increased the number of Common Shares authorized for issuance to 3,883,564 Common Shares. The plan allows for the issuance of options, Restricted Shares, LTIP Units, and other securities (collectively “Awards”) to, among others, the Company’s officers, trustees, and employees. As of September 30, 2025 a total of 2,299,593 shares remained available to be issued under the Amended and Restated 2020 Plan.
A summary of the status of the Company’s unvested Restricted Shares and LTIP Units is presented below:
Unvested Restricted Shares and LTIP Units
CommonRestrictedShares
WeightedGrant-DateFair Value
LTIP Units
Unvested as of December 31, 2023
113,909
14.41
1,798,659
16.03
Granted
49,756
17.06
766,508
16.19
Vested
(55,947
17.20
(448,598
18.77
Forfeited
(1,537
17.24
(62,502
26.47
Unvested as of December 31, 2024
106,181
2,054,067
15.17
41,332
22.38
644,258
22.10
(43,309
17.00
(632,816
15.68
(3,127
15.07
Unvested as of September 30, 2025
104,204
16.22
2,062,382
17.18
39
The weighted-average grant date fair value for Restricted Shares and LTIP Units granted for the nine months ended September 30, 2025 and the year ended December 31, 2024 were $22.11 and $16.24, respectively. As of September 30, 2025, there was $24.0 million of total unrecognized compensation cost related to unvested share-based compensation arrangements granted under the Amended and Restated 2020 Plan. That cost is expected to be recognized over a weighted-average period of 1.3 years. The total fair value of Restricted Shares that vested during the nine months ended September 30, 2025 and the year ended December 31, 2024, was $0.7 million and $1.0 million, respectively. The total fair value of LTIP Units that vested (LTIP units vest primarily during the first quarter) during the nine months ended September 30, 2025 and the year ended December 31, 2024, was $9.9 million and $8.4 million, respectively.
Restricted Shares and LTIP Units - Employees
During the nine months ended September 30, 2025, the Company issued 605,550 LTIP Units and 23,130 restricted share units (“Restricted Share Units”), to employees of the Company pursuant to the Amended and Restated 2020 Plan. Certain of these equity awards were granted in performance-based Restricted Share Units or LTIP Units with market conditions as described below (“Performance Shares”). These awards were measured at their fair value on the grant date, incorporating the following factors:
For valuation of the 2025 and 2024 Performance Shares, a Monte Carlo simulation was used to estimate the fair values of the relative TSR portion based on probability of satisfying the market conditions and the projected share prices at the time of payments, discounted to the valuation dates over the three-year performance periods. The assumptions include volatility (29.0% and 43.0%) and risk-free interest rates of (4.4% and 4.8%) for 2025 and 2024, respectively. The total fair value of the 2025 and 2024 Performance Shares will be expensed on a graded vesting basis over the vesting period of the award.
The total fair value of the above Restricted Share Units and LTIP Units as of the grant date was $14.7 million for the nine months ended September 30, 2025 and $12.2 million for the year ended December 31, 2024. Total long-term incentive compensation expense, including the expense related to the Amended and Restated 2020 Plan, was $2.9 million and $2.4 million for the three months ended September 30, 2025, and 2024, respectively, and $8.3 million and $7.0 million for the nine months ended September 30, 2025 and 2024, respectively, and is recorded in General and administrative in the Condensed Consolidated Statements of Operations.
40
Restricted Shares and LTIP Units - Board of Trustees
In addition, members of the Board have been issued shares and units under the Amended and Restated 2020 Plan. During the nine months ended September 30, 2025, the Company issued 38,708 LTIP Units and 18,202 Restricted Share Units issued to Trustees of the Company. The Restricted Share Units do not carry voting rights or other rights of Common Shares until vesting and may not be transferred, assigned or pledged until the recipients have a vested non-forfeitable right to such shares. Dividends are not paid currently on unvested Restricted Shares but are paid cumulatively from the issuance date through the applicable vesting date of such Restricted Shares. Total trustee fee expense, including the expense related to the Amended and Restated 2020 Plan, was $0.4 million for the three months ended September 30, 2025 and 2024, and $1.1 million and $1.2 million for the nine months ended September 30, 2025 and 2024, respectively, and is recorded in General and administrative in the Condensed Consolidated Statements of Operations.
Long-Term Investment Alignment Program
In 2009, the Company adopted the Long-Term Investment Alignment Program (the “Program”) pursuant to which the Company may grant awards to employees, entitling them to receive up to 25% of any potential future payments of Promote to the Operating Partnership from Funds III, IV and V. The Company has granted such awards to employees representing 25% of the potential Promote payments from Fund III to the Operating Partnership, 23.1% of the potential Promote payments from Fund IV to the Operating Partnership and 24.4% of the potential Promote payments from Fund V to the Operating Partnership. Payments to senior executives under the Program require further approval by the Compensation Committee at the time any potential payments are due pursuant to these grants. Compensation relating to these awards will be recognized in each reporting period in which approval is granted by the Compensation Committee.
As payments to other employees are not subject to further approval by the Compensation Committee, compensation relating to these awards will be recorded based on the estimated fair value as of each reporting period in accordance with ASC Topic 718, Compensation– Stock Compensation. The awards in connection with Fund IV were determined to have no intrinsic value as of September 30, 2025 or December 31, 2024.
For the nine months ended September 30, 2025, the Company recognized $0.1 million of compensation expense under the Program related to Fund III. The Company did not recognize any compensation expense under the Program related to Funds III and V during 2024.
Other Plans
On a combined basis, the Company incurred a total of $0.4 million of compensation expense related to the following employee benefit plans for each of the nine months ended September 30, 2025 and 2024.
Employee Share Purchase Plan
The Acadia Realty Trust Employee Share Purchase Plan (the “Purchase Plan”) allows eligible employees of the Company to purchase Common Shares through payroll deductions for a maximum aggregate issuance of 200,000 Common Shares. The Purchase Plan provides for employees to purchase Common Shares on a quarterly basis at a 15% discount to the closing price of the Company’s Common Shares on either the first day or the last day of the quarter, whichever is lower. A participant may not purchase more than $25,000 in Common Shares per year. Compensation expense will be recognized by the Company to the extent of the above discount to the closing price of the Common Shares with respect to the applicable quarter. A total of 10,052 and 11,034 Common Shares were purchased by employees under the Purchase Plan for the nine months ended September 30, 2025 and 2024, respectively, and 151,689 shares remained available to be issued under the Purchase Plan.
Deferred Share Plan
The Company maintains a Trustee Deferral and Distribution Election program, under which the participating Trustees earn deferred compensation.
Employee 401(k) Plan
The Company maintains a 401(k) plan for employees under which the Company currently matches 50% of a plan participant’s contribution up to 6% of the employee’s annual salary. A plan participant may contribute up to a maximum of 15% of their compensation, up to $23,500, for the year ending December 31, 2025.
41
14. Earnings Per Common Share
Basic earnings per Common Share is computed by dividing net income attributable to Common Shareholders by the weighted-average Common Shares outstanding during the period (Note 10).
During the periods presented, the Company had unvested LTIP Units that entitle holders to non-forfeitable dividend equivalent rights. As such, these unvested LTIP Units are considered participating securities and are included in the computation of basic earnings per Common Share using the two-class method.
Diluted earnings per Common Share reflects the potential dilution from the assumed conversion or exercise of securities including the effects of Restricted Share Units issued under the Company’s Amended and Restated 2020 Plan (Note 13), and the shares issuable upon settlement of any outstanding forward sale agreements (Note 10). The shares related to forward sale agreements are included in the diluted earnings per share calculation using the treasury stock method for the period they are outstanding prior to settlement. Under this method, the number of incremental shares included in the diluted share count is equal to the excess, if any, of: (i) the number of Common Shares that would be issued upon full physical settlement of the forward sale agreements, over (ii) the number of Common Shares that could be repurchased using the proceeds receivable upon settlement, based on the average market price during the period and the adjusted forward sales price immediately prior to settlement. The impact of these shares is excluded from the diluted earnings per share calculation when the effect would be anti-dilutive.
The effect of the conversion of Common OP Units is excluded from the computation of both basic and diluted earnings per share. These units are exchangeable for Common Shares on a one-for-one basis, and the income attributable to such units is allocated on this same basis. This income is reflected as noncontrolling interests in the Company’s Condensed Consolidated Financial Statements. As a result, the assumed conversion of Common OP Units would have no net impact on the determination of diluted earnings per share and is therefore excluded.
42
(dollars in thousands, except per share data)
Numerator:
Less: adjustment of redeemable non-controlling interest to estimated redemption value (Note 10)
(888
Less: net income attributable to participating securities
(340
(306
(1,017
(883
Income from continuing operations net of income attributable to participating securities for basic earnings per share
4,390
8,108
7,284
12,243
Denominator:
Weighted average shares for basic earnings per share
131,019,918
108,351,254
127,812,182
104,703,763
Effect of dilutive securities:
Series A Preferred OP Units
Employee unvested restricted shares
2,312
6,531
Assumed settlement of forward sales agreements (Note 10)
Denominator for diluted earnings per share
131,022,230
127,818,713
Basic earnings per Common Share from continuing operations attributable to Acadia shareholders
Diluted earnings per Common Share from continuing operations attributable to Acadia shareholders
Anti-Dilutive Shares Excluded from Denominator:
188
Series A Preferred OP Units - Common share equivalent
25,067
Series C Preferred OP Units
66,519
Series C Preferred OP Units - Common share equivalent
230,967
Restricted shares
77,046
81,175
72,827
43
15. Variable Interest Entities
The Company consolidates certain VIEs in which it has determined it is the primary beneficiary. As of September 30, 2025, the Company had identified nine consolidated VIEs, including the Operating Partnership and the Funds.
Excluding the Operating Partnership and the Funds, the Company’s consolidated VIEs include four in-service REIT Portfolio properties: the Williamsburg Portfolio, 239 Greenwich Avenue, 8833 Beverly Boulevard, and the Renaissance Portfolio.
The Operating Partnership is considered a VIE because the limited partners lack substantive kick-out or participating rights. The Company is deemed the primary beneficiary of each consolidated VIE because it: (i) has the power to direct the activities that most significantly impact the VIE’s economic performance, and (ii) has the obligation to absorb the losses or right to receive benefits that could potentially be significant to the VIE. The interest of third parties in these consolidated VIEs are presented as noncontrolling interests or redeemable noncontrolling interests in the accompanying Condensed Consolidated Financial Statements and in Note 10.
The operations of these VIEs are primarily funded through fees earned from investment activities or cash flows generated from the underlying properties. The Company has not provided financial support to any of these VIEs beyond its existing contractual obligations, which primarily include funding capital commitments, capital expenditures necessary to maintain operations, and covering any operating cash shortfalls.
Since the Company conducts its business through the Operating Partnership and substantially all of its assets and liabilities are held by the Operating Partnership, the Condensed Consolidated Balance Sheets as of September 30, 2025 and December 31, 2024, primarily reflect the assets and liabilities of the Operating Partnership, including those of its consolidated VIEs. The following table presents the assets and liabilities of the consolidated VIEs included in the Condensed Consolidated Balance sheets (in thousands):
VIE ASSETS
1,776,126
1,640,071
31,514
56,244
74,361
84,183
79,381
1,636
1,978
36,828
12,872
11,013
27,196
27,317
Assets of properties held for sale
Total VIE assets (a)
2,016,108
1,881,569
VIE LIABILITIES
876,259
799,734
130,070
120,088
Lease liability - operating leases, net
1,725
2,077
Total VIE liabilities (a)
1,008,054
921,899
44
Unconsolidated VIEs
The Company holds variable interests in certain entities that are considered VIEs but are not consolidated because the Company is not the primary beneficiary. Although the Company may be responsible for managing the day-to-day operations of these entities, it does not have unilateral power over the activities that, when taken together, most significantly impact the respective VIE’s economic performance. As such, the Company does not meet the criteria for consolidation.
As of September 30, 2025, the Company had interests in two unconsolidated VIEs: 1238 Wisconsin Avenue and the Georgetown Portfolio. The Company’s involvement in these entities consists of direct and indirect equity interests and contractual fee arrangements. These investments are accounted for under the equity method of accounting (Note 4). The Company’s maximum exposure to loss in these unconsolidated VIEs is limited to: (i) the carrying amount of its equity investment, and (ii) any debt guarantees provided (Note 9). As of September 30, 2025 and December 31, 2024, the Company’s investment in the assets of these unconsolidated VIEs was $42.9 million and $44.2 million, respectively. The Company’s share of the liabilities of these unconsolidated VIEs was $39.0 million and $39.1 million as of September 30, 2025 and December 31, 2024, respectively.
The Company also holds a preferred equity investment in a VIE that is structured with characteristics that are substantially similar to a debt instrument and is accounted for as a note receivable. The Company is not the primary beneficiary as it does not have the power to direct the activities that most significantly impact the VIE’s economic performance, and therefore does not consolidate the VIE. As of September 30, 2025, the carrying value of the investment was $82.9 million, which represents the Company’s maximum exposure to loss related to this VIE.
16. Subsequent Events
In October 2025, the Company disposed of a portion of 1035 Third Avenue, a consolidated Fund IV Investment Management property, in New York, NY for a sales price of $22.0 million. The Company repaid a portion of the outstanding balance on the Fund IV secured bridge facility (Note 7) with proceeds from the sale.
In October 2025, the Company sold its remaining 257,112 shares of Albertsons (Note 8) for net proceeds of $4.7 million.
45
ITEM 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
OVERVIEW
Acadia Realty Trust (the “Trust”, collectively with its consolidated subsidiaries, the “Company”, “Acadia”, “we”, “us” or “our”), a Maryland real estate investment trust (“REIT”), is a fully-integrated equity REIT focused on the ownership, acquisition, development, and management of retail properties located primarily in high-barrier-to-entry, supply-constrained, densely populated metropolitan areas in the United States.
All of the Company’s assets are held by, and all of its operations are conducted through, Acadia Realty Limited Partnership (the “Operating Partnership”) and entities in which the Operating Partnership owns an interest. As of September 30, 2025 and December 31, 2024, the Trust controlled approximately 96% of the Operating Partnership as the sole general partner and is entitled to share, in proportion to its percentage interest, in the cash distributions and profits and losses of the Operating Partnership.
We own and operate a high-quality core real estate portfolio, primarily comprised of open-air street retail assets located in the nation’s most dynamic retail corridors (“REIT Portfolio”). This portfolio is complemented by an investment management platform that leverages institutional capital relationships to pursue opportunistic, high yield, and/or value-add investments (“Investment Management” or “IM”). Through the Investment Management platform, we have active investments through the following opportunity funds: Acadia Strategic Opportunity Fund II, LLC (“Fund II”), Acadia Strategic Opportunity Fund III LLC (“Fund III”), Acadia Strategic Opportunity Fund IV LLC (“Fund IV”), and Acadia Strategic Opportunity Fund V LLC (“Fund V” and, collectively with Fund II, Fund III and Fund IV, “the Funds”).
As of September 30, 2025, we own or have an ownership interest in 218 properties held through our REIT Portfolio and Investment Management platform (Note 1). The majority of our operating income is derived from rental revenues from operating properties, including expense recoveries from tenants, offset by operating and overhead expenses.
We continue to execute on a focused strategy designed to drive long-term, profitable growth by leveraging the strength of our REIT Portfolio and Investment Management platform. Our strategic priorities include:
A summary of our wholly owned and partially owned retail properties and their physical occupancies as of September 30, 2025 is as follows:
Number of Properties
Operating Properties
Development orRedevelopment (1)
Operating
GLA
Occupancy
REIT Portfolio:
Chicago Metro
577,005
86.6
New York Metro
384,700
94.8
Los Angeles Metro
23,757
100.0
San Francisco Metro
Dallas Metro
84,652
89.8
Washington D.C. Metro
359,825
88.1
Boston Metro
1,050
Suburban
3,738,267
95.0
Total REIT Portfolio
149
5,169,256
93.5
Acadia Share of Total REIT Portfolio
4,908,671
93.6
536,624
78.7
297,199
82.9
7,467,940
94.0
878,882
89.7
Total Investment Management
50
9,180,645
92.3
Acadia Share of Total Investment Management
2,440,150
Total REIT and Investment Management
199
14,349,901
92.7
Acadia Share of Total REIT and Investment Management
7,348,821
92.4
SIGNIFICANT ACTIVITIES DURING 2025
See Note 12 in the Notes to Condensed Consolidated Financial Statements for an overview of our three reportable segments: REIT Portfolio, Investment Management and Structured Financing. For purposes of the tables included below, these segments are abbreviated as “REIT”, “IM” and “SF”, respectively.
Investments
During the nine months ended September 30, 2025, the following properties were acquired (Note 2) (dollars in thousands):
Property Name
Ownership
Acquisition Date
Location
Purchase Price
5,936
73 Wooster Street
8,896
Washington DC Metro
225,865
IM
Southeast
204,002
21,100
13,092
21,713
The Avenue West Cobb
254,446
On January 23, 2025, we acquired an additional 48% economic ownership interest, increasing our existing 20% interest to 68%, in the Renaissance Portfolio, which is primarily located in Washington D.C. The 48% interest was acquired for a purchase price of $117.9 million, based upon a gross portfolio fair value of $245.7 million, which included existing aggregate mortgage loan indebtedness of $156.1 million (Note 7). Prior to the acquisition, we accounted for our 20% interest under the equity method of accounting. We gained a controlling financial interest as a result of this acquisition, and determined we should consolidate our investment within our REIT Portfolio effective January 23, 2025. As such, we measured and recognized 100% of the identifiable assets acquired, the liabilities assumed and any noncontrolling interests of the Renaissance
Portfolio, at fair value and recognized a $9.6 million loss on change in control representing the difference between the carrying value and fair value of its existing equity method interest immediately before consolidation of the portfolio (Note 2).
Additionally, during the third quarter of 2025, we increased our ownership of Fund II from 61.67% to 80.0%. Additional details are provided in Note 10.
Dispositions
The following properties were disposed of (Note 2) (dollars in thousands):
Ownership (a)
Disposition Date
Sales Price
Mad River Station
Ohio
156,000
15,000
640 Broadway
1035 Third Avenue (b)
October 1, 2025
23,924
22,000
In addition, in June 2025, the joint venture that owned the Eden Square property, of which Fund IV has a 90% ownership interest, sold the property to a third-party for $28.0 million and repaid the related $23.3 million property mortgage loan (Note 4).
Impairment
During the September 30, 2025, we recognized the following impairment charges during the nine months ended September 30, 2025 (Note 8) (dollars in thousands):
New York, NY
June 30, 2025
In addition, the 650 Bald Hill Road joint venture recognized an impairment charge of $3.5 million on the property due to a shortened hold period, of which our proportionate share was $0.7 million (Note 4).
Financing Activity
On January 23, 2025, we acquired an additional 48% economic ownership interest in the Renaissance Portfolio (Note 2). At acquisition, the properties were subject to existing mortgage indebtedness with an aggregate outstanding principal balance of $156.1 million, bore interest at the Secured Overnight Financing Rate (“SOFR”) + 2.65% and was scheduled to mature on November 6, 2026. The property mortgage loans were recorded at a fair value of approximately $156.1 million. On January 24, 2025, the venture modified the property mortgage loans to reduce the interest rate to SOFR + 1.55%. This reduction was achieved through a $50.0 million principal paydown, which was funded by the Company as a note receivable from the venture. The note bears interest at 9.11%, matures in November 2026 and has been eliminated in consolidation (Note 7).
In the second quarter of 2025, the Operating Partnership and the Company entered into the Third Amendment to the Third Amended and Restated Credit Agreement (the “Amendment”) to the existing senior unsecured credit facility (the “Credit Facility”). The Amendment established a new five-year $250.0 million incremental delayed draw term loan (the “$250.0 Million Term Loan”). The Amendment also increased the accordion feature limit to $1.5 billion and reduced the borrowing rate on the entire $925.0 million Credit Facility by 10 basis points. The $250.0 Million Term Loan bears interest at the SOFR + 1.20% and matures on May 29, 2030. As of September 30, 2025, the $250.0 Million Term Loan was fully drawn (Note 7).
Structured Financing Investments
In April 2025, the Company modified a redeemable preferred equity investment in a property that is accounted for as a note receivable, which had a principal balance of $54.0 million as of March 31, 2025, to extend the maturity date from February 25, 2025 to February 9, 2027, with an option for a one-year extension. As part of this modification, the borrower repaid the accrued interest balance of $25.3 million. Additionally, the Company provided a mezzanine loan and additional advances under the preferred equity related to the same asset which also matures on February 9, 2027 and bears interest at a fixed rate of 9.00% (Note 3). As of September 30, 2025, the Company advanced $28.5 million in aggregate.
48
Issuance of Common Shares
In February 2025, we entered into our current $500.0 million ATM Program (the “2025 ATM Program”), which includes an optional “forward sale” component, and concurrently terminated our prior $400.0 million ATM program.
During the nine months ended September 30, 2025, we issued the following forward shares under the 2025 ATM Program, all of which remain outstanding as of September 30, 2025 (in thousands except share and per share data):
Number of Shares
Average Share Price
Aggregate Value
Average Net Share Price
Aggregate Net Value
ATM Forward Sale Agreements
12,759,835
20.47
261,194
20.27
258,642
In March 2025, we settled 11,172,699 outstanding forward shares under the 2025 ATM Program and received proceeds of $277.9 million, related to forward sales issued during year ended December 31, 2024.
As of September 30, 2025, $238.7 million remains available for future share issuance under the 2025 ATM Program.
Economic and Other Considerations
Macroeconomic conditions, including elevated levels of inflation, higher interest rates, and recent tariff policies, present risks for our business and the businesses of our tenants. The elevated levels of inflation in recent years have led to increased costs for certain goods and services and cost of borrowing. However, most of our leases include contractual rent escalations and require tenants to pay their share of operating expenses, including common area maintenance, real estate taxes, and insurance, which help mitigate inflationary impacts on costs and operating expenses. We believe we manage our properties in a cost-conscious manner to minimize recurring operational expenses and utilize multi-year contracts to alleviate the impact of inflation on our business and our tenants.
We also continue to see rising consumer confidence and expect to drive value to our portfolio through leasing momentum, active development and redevelopment projects, and our leasing pipeline. We manage our exposure to fluctuations in interest rates primarily through the use of fixed-rate debt and interest rate swap and cap agreements, which qualify for, and are designated as, hedging instruments (Note 8). Except for increased interest costs, we have not experienced any material negative impacts at this time.
Recent U.S. tariffs, sanctions, and related geopolitical developments could affect our tenants’ operations or tourism in key markets such as New York, Chicago, Washington, D.C., Los Angeles and San Francisco. While the ultimate impact remains uncertain, we continue to monitor these developments closely.
49
RESULTS OF OPERATIONS
Comparison of Results for the Three Months Ended September 30, 2025 to the Three Months Ended September 30, 2024
The results of operations by reportable segment for the three months ended September 30, 2025 compared to the three months ended September 30, 2024 are summarized in the table below (in millions, totals may not add due to rounding):
Three Months Ended
September 30, 2024
Increase (Decrease)
SF
57.2
41.6
98.7
45.1
41.2
86.3
12.1
0.4
12.4
0.9
1.4
2.3
0.5
1.5
(22.7
(16.2
(38.9
(17.8
(16.7
(34.5
4.9
(0.5
4.4
(7.7
(8.9
(16.6
(6.4
(7.9
(14.4
1.3
1.0
2.2
(7.5
(4.4
(11.8
(6.8
(11.2
0.7
0.6
(10.9
(10.2
(12.6
12.6
2.8
(0.2
2.5
22.9
12.7
14.6
13.1
17.5
8.3
(12.4
(4.8
6.1
7.9
(1.8
(0.1
(3.6
(3.7
11.0
11.8
(0.9
(14.6
(15.5
(10.8
(13.6
(24.3
(9.5
(13.8
(23.4
(2.2
(1.1
(0.4
(1.5
1.1
0.3
9.8
(16.4
6.6
(11.0
4.8
10.3
7.5
12.3
5.0
(26.7
(23.3
Net loss (income) attributable to redeemable noncontrolling interests
1.6
1.7
15.2
15.0
(0.6
(4.9
(5.5
20.1
20.5
9.7
5.6
4.2
7.0
8.4
5.5
(6.7
(2.8
Segment net income attributable to Acadia shareholders for our REIT Portfolio increased $5.5 million for the three months ended September 30, 2025 compared to the prior year period as a result of the changes further described below.
Rental revenue for our REIT Portfolio increased $12.1 million for the three months ended September 30, 2025 compared to the prior year period primarily due to (i) $5.1 million from new property acquisitions, (ii) $3.7 million from the acquisition of an additional interest and consolidation of the Renaissance Portfolio in 2025 and (iii) $3.0 million from new tenant lease up (Note 2).
Depreciation and amortization for our REIT Portfolio increased $4.9 million for the three months ended September 30, 2025 compared to the prior year period primarily due to (i) $2.8 million from new property acquisitions and (ii) $2.1 million from the acquisition of an additional interest and consolidation of the Renaissance Portfolio. (Note 2, Note 6).
Property operating expenses for our REIT Portfolio increased $1.3 million for the three months ended September 30, 2025 compared to the prior year period primarily due to new property acquisitions.
Gain on disposition of property of $2.8 million for our REIT Portfolio relates to the sale of the Mad River property in 2025.
Interest expense for our REIT Portfolio increased $1.3 million for the three months ended September 30, 2025 compared to the prior year period primarily due to higher average outstanding borrowings in 2025.
Realized and unrealized holding gains (losses) on investments and other for our REIT Portfolio increased $1.1 million for the three months ended September 30, 2025 compared to the prior year period primarily due to a change in the mark-to-market adjustment on the investment in Albertsons (Note 8).
Investment Management (all amounts below are consolidated amounts and are not representative of our proportionate share)
Segment net income attributable to Acadia shareholders for Investment Management decreased $6.7 million for the three months ended September 30, 2025 compared to the prior year period as a result of the changes described below.
Property operating expenses for Investment Management increased $1.0 million for the three months ended September 30, 2025 compared to the prior year period primarily due to a new property acquisition in 2025.
An impairment charge of $12.6 million for Investment Management is due to the shortened hold period at one Fund III property (Note 8).
Equity in (losses) earnings of unconsolidated affiliates for Investment Management decreased $14.6 million for the three months ended September 30, 2025 compared to the prior year period primarily due to the impairment charge on the Bald Hill Road property in 2025 compared to the gain on sale of the Frederick Crossing property in 2024 (Note 4).
Net (income) loss attributable to noncontrolling interests for Investment Management increased $20.1 million for the three months ended September 30, 2025 compared to the prior year period based on the noncontrolling interests’ share of the variances discussed above. Net income attributable to noncontrolling interests in Investment Management includes asset management fees earned by the Company of $2.3 million for the three months ended September 30, 2025 compared to $3.6 million for the prior year period.
The Company does not allocate general and administrative expenses and income taxes to its reportable segments. These unallocated amounts are depicted in the table above under the headings labeled “Total.”
Structured Financing
Interest income for our Structured Financing portfolio decreased $1.8 million for the three months ended September 30, 2025 compared to the prior year period primarily due to compounding interest on certain of our notes in the prior year.
Comparison of Results for the Nine Months Ended September 30, 2025 to the Nine Months Ended September 30, 2024
The results of operations by reportable segment for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 are summarized in the table below (in millions, totals may not add due to rounding):
Nine Months Ended
178.6
121.0
299.7
141.7
116.2
258.0
36.9
41.7
6.3
2.1
(4.1
(2.1
(68.8
(48.8
(117.6
(54.0
(49.7
(103.7
14.8
13.9
(25.9
(26.5
(52.4
(23.8
(25.4
(49.2
3.2
(25.2
(13.2
(38.5
(21.6
(11.9
(33.5
3.6
(34.1
(30.2
3.9
(37.2
37.2
1.8
(2.0
2.9
Operating income (loss)
63.6
(0.8
28.8
46.3
33.1
49.3
17.3
(33.9
(20.5
18.6
18.5
0.1
(0.3
(9.3
(9.6
3.5
16.0
(3.8
(21.7
(25.6
(29.7
(41.5
(71.2
(29.5
(41.1
(70.7
0.2
9.6
(5.1
(5.9
4.3
5.7
23.1
(51.5
19.2
(43.6
17.7
(55.9
(50.6
47.6
47.8
46.8
48.2
Net income (loss) attributable to Acadia shareholders
23.3
14.1
11.7
(10.7
(3.9
51
Segment net income attributable to Acadia shareholders for our REIT Portfolio increased $9.2 million for the nine months ended September 30, 2025 compared to the prior year period as a result of the changes further described below.
Rental revenue for our REIT Portfolio increased $36.9 million for the nine months ended September 30, 2025 compared to the prior year period primarily due to (i) $13.7 million from new property acquisitions, (ii) $8.4 million received from Whole Foods that we recognized as rental and termination income at City Center in San Francisco, CA in 2025, (iii) $11.1 million from the acquisition of an additional interest and consolidation of the Renaissance Portfolio in 2025 and (iv) $4.0 million from new tenant lease up (Note 2).
Other revenue for our REIT Portfolio decreased $4.1 million for the nine months ended September 30, 2025 compared to the prior year period primarily due to the recognition of a forfeited deposit in 2024.
Depreciation and amortization for our REIT Portfolio increased $14.8 million for the nine months ended September 30, 2025 compared to the prior year period primarily due to (i) $6.3 million from the acquisition of an additional interest and consolidation of the Renaissance Portfolio, (ii) $6.4 million from new property acquisitions and (iii) $1.5 million from the acceleration of in-place lease intangible assets for bankrupt tenants in 2025 (Note 2, Note 6).
Property operating expenses for our REIT Portfolio increased $2.1 million for the nine months ended September 30, 2025 compared to the prior year period primarily due to new property acquisitions.
Real estate taxes for our REIT Portfolio increased $3.6 million for the nine months ended September 30, 2025 compared to the prior year period primarily due to (i) $2.0 million from the acquisition of an additional interest and consolidation of the Renaissance Portfolio in 2025, and (ii) $1.7 million from new property acquisitions (Note 2).
Gain on disposition of properties of $2.8 million for our REIT Portfolio in 2025 relates to the gain on sale of the Mad River property, and the loss on disposition of property of $2.2 million for our REIT Portfolio in 2024 relates to the deconsolidation of the Shops at Grand property.
Equity in (losses) earnings of unconsolidated affiliates for our REIT Portfolio decreased $3.8 million for the nine months ended September 30, 2025 compared to the prior year period primarily due to tenants vacating subsequent to September 30, 2024.
Loss on change in control of $9.6 million for our REIT Portfolio for the nine months ended September 30, 2025 is due to the Company gaining a controlling financial interest as a result of the acquisition of the incremental 48% interest in the Renaissance Portfolio in 2025 (Note 2).
Realized and unrealized holding gains (losses) on investments and other for our REIT Portfolio increased $4.3 million for the nine months ended September 30, 2025 compared to the prior year period primarily due to a change in the mark-to-market adjustment on the investment in Albertsons (Note 8).
Net loss (income) attributable to noncontrolling interests for our REIT Portfolio increased $1.3 million for the nine months ended September 30, 2025 compared to the prior year period based on the noncontrolling interests’ share of the variances discussed above.
Segment net income attributable to Acadia shareholders for Investment Management decreased $10.7 million for the nine months ended September 30, 2025 compared to the prior year period as a result of the changes described below.
Rental revenue for Investment Management increased $4.8 million for the nine months ended September 30, 2025 compared to the prior year period primarily due to new property acquisitions in 2025 and tenant lease-up subsequent to September 30, 2024.
Other revenue for Investment Management increased $2.1 million for the nine months ended September 30, 2025 compared to the prior year period primarily due to higher fees earned from the newly acquired Investment Management properties.
Property operating expenses for Investment Management increased $1.1 million for the nine months ended September 30, 2025 compared to the prior year period primarily due to new property acquisitions.
Real estate taxes for Investment Management increased $1.3 million for the nine months ended September 30, 2025 compared to the prior year period primarily due to refunds received in the prior year.
52
Impairment charges for Investment Management of $37.2 million for the nine months ended September 30, 2025 are due to the shortened hold periods at one Fund III property and two Fund IV properties (Note 8).
Gain on disposition of properties for Investment Management decreased $2.0 million for the nine months ended September 30, 2025 compared to the prior year period due to $3.0 million gain on disposition of two Fund IV properties and a Fund V outparcel, offset by a $1.2 million loss related to a previously disposed property (Note 2).
Equity in earnings of unconsolidated affiliates for Investment Management decreased $21.7 million for the nine months ended September 30, 2025 compared to the prior year period primarily due to the loss on sale on Eden Square in 2025 and the impairment charge on the Bald Hill Road property in 2025 compared to the gain on sale of the Paramus Plaza and Frederick Crossing properties in 2024 (Note 4).
Net (income) loss attributable to noncontrolling interests for Investment Management increased $46.8 million for the nine months ended September 30, 2025 compared to the prior year period based on the noncontrolling interests’ share of the variances discussed above. Net income attributable to noncontrolling interests in Investment Management includes asset management fees earned by the Company of $6.9 million and $8.3 million for the nine months ended September 30, 2025 and 2024, respectively.
Realized and unrealized holding gains on investments and other for our Structured Finance Portfolio increased $1.4 million for the nine months ended September 30, 2025 compared to the prior year period primarily due to the decrease in allowance for some of our notes.
The Company does not allocate general and administrative expenses and income taxes to its reportable segments. These unallocated amounts are depicted in the table above under the headings labeled “Total.” General and administrative expenses increased $3.9 million for the nine months ended September 30, 2025 compared to the prior year period primarily due to higher compensation expenses in 2025.
NON-GAAP FINANCIAL MEASURES
Net Property Operating Income
The following discussion of NOI) and rent spreads on new and renewal leases includes the activity from both our consolidated and our pro-rata share of unconsolidated properties within our REIT Portfolio. We believe NOI and rent spreads are not meaningful measures for our Investment Management investments as Investment Management invests primarily in properties that typically require significant leasing and development, and is primarily comprised of finite-life investment vehicles.
NOI represents property revenues less property expenses. We consider NOI and rent spreads on new and renewal leases for our REIT Portfolio to be appropriate supplemental disclosures of portfolio operating performance due to their widespread acceptance and use within the REIT investor and analyst communities. NOI and rent spreads on new and renewal leases are presented to assist investors in analyzing our property performance; however, our method of calculating these may be different from methods used by other REITs and, accordingly, may not be comparable to such other REITs.
53
A reconciliation of consolidated operating income to net operating income – REIT Portfolio follows (in thousands):
Consolidated operating income
Add back:
(Gain) Loss on disposition of properties
Less:
Above/below-market rent, straight-line rent and other accounts (a)
(5,011
(5,498
(10,917
(12,975
Termination income (b)
(8,366
Consolidated NOI
67,536
56,709
195,826
170,638
Redeemable noncontrolling interest in consolidated NOI
(1,734
(1,711
(4,998
(4,133
Noncontrolling interest in consolidated NOI
(19,604
(17,060
(56,748
(52,314
Less: Operating Partnership's interest in Investment Management NOI included above
(8,027
(6,940
(18,413
Add: Operating Partnership's share of unconsolidated joint ventures NOI (c)
1,045
2,291
3,205
8,504
REIT Portfolio NOI
39,216
33,289
114,575
104,282
Same-Property NOI includes REIT Portfolio properties that we owned for both the current and prior periods presented, but excludes those properties which we acquired, sold or expected to sell, redeveloped and developed during these periods. The following table summarizes Same-Property NOI for our REIT Portfolio (dollars in thousands):
Less properties excluded from Same-Property NOI
(4,336
(1,042
(11,431
(6,434
Same-Property NOI
34,880
32,247
103,144
97,848
Percent change from prior year period
5.4
Components of Same-Property NOI:
Same-Property Revenues
47,271
45,732
143,016
138,803
Same-Property Operating Expenses
(12,391
(13,485
(39,872
(40,955
Rent Spreads on REIT Portfolio New and Renewal Leases
The following table summarizes rent spreads on both a cash basis and straight-line basis for new and renewal leases based on leases executed within our REIT Portfolio for the periods presented. Cash basis represents a comparison of rent most recently paid on the previous lease as compared to the initial rent paid on the new lease. Straight-line basis represents a comparison of rents as adjusted for contractual escalations, abated rent, and lease incentives for the same comparable leases. The table below includes embedded option renewals for which the renewed rent was equal to or approximated existing base rent.
Three Months Ended September 30, 2025
REIT Portfolio New and Renewal Leases
Cash Basis
Straight-Line Basis
Number of new and renewal leases executed
69
GLA commencing
238,629
521,895
New base rent
$48.69
$52.40
$51.27
$54.17
Expiring base rent
$43.43
$40.67
$48.74
$45.89
Percent growth in base rent
12.1%
28.8%
5.2%
18.1%
Average cost per square foot (a)
$39.88
$27.10
Weighted average lease term (years)
8.6
(a) The average cost per square foot includes tenant improvement costs, leasing commissions, and tenant allowances.
Funds from Operations
We consider funds from operations (“FFO”) as defined by the National Association of Real Estate Investment Trusts (“NAREIT”) to be an appropriate supplemental disclosure of operating performance due to its widespread acceptance and use within the REIT investor and analyst communities. FFO is presented to assist investors in analyzing our performance. It is helpful as it excludes various items included in net income that are not indicative of the operating performance, such as gains (losses) from sales of depreciated property, depreciation and amortization, and impairment of real estate. Our method of calculating FFO may be different from methods used by other REITs and, accordingly, may not be comparable to such other REITs. FFO does not represent cash generated from operations as defined by accounting principles generally accepted in the United States (“GAAP”) and is not indicative of cash available to fund all cash needs, including distributions. It should not be considered as an alternative to net income for the purpose of evaluating our performance or to cash flows as a measure of liquidity. Consistent with the NAREIT definition, we define FFO as net income (computed in accordance with GAAP), excluding gains (losses) from sales of depreciated property and impairment of depreciable real estate assets related to the Company’s main business and land held for the development of property for its operating portfolio, plus depreciation and amortization, after adjustments for unconsolidated partnerships and joint ventures. Also consistent with NAREIT’s definition of FFO, the Company has elected to include gains and losses incidental to its main business (including those related to its investments in Albertsons) in FFO. A reconciliation of net income (loss) attributable to Acadia shareholders to FFO follows (dollars in thousands, except per share data):
Depreciation of real estate and amortization of leasing costs (net of noncontrolling interests' share)
31,542
26,407
94,814
79,785
Impairment charges (net of noncontrolling interests' share)
3,804
9,572
Net loss on disposition of properties (net of noncontrolling interests' share)
(2,700
(2,324
(2,614
(1,481
Income attributable to Common OP Unit holders
248
398
452
704
Distributions - Preferred OP Units
67
201
274
Funds from operations attributable to Common Shareholders and Common OP Unit holders - Basic and Diluted
38,579
32,962
121,236
92,408
55
LIQUIDITY AND CAPITAL RESOURCES
Uses of Liquidity and Cash Requirements
Generally, our principal uses of liquidity are (i) distributions to our shareholders and holders of our units of limited partnership interest (“OP units”), (ii) investments, which include the funding of capital committed to our Investment Management platform and property acquisitions and development/re-tenanting activities within our REIT Portfolio, (iii) distributions to our Investment Management investors, (iv) debt service and loan repayments and (v) share repurchases.
Distributions
In order to qualify as a REIT for federal income tax purposes, we must distribute at least 90% of our taxable income to our shareholders. During the nine months ended September 30, 2025, we paid dividends and distributions on our Common Shares and preferred units of limited partnership interest (“Preferred OP Units”) totaling $79.7 million.
During the nine months ended September 30, 2025, we deployed approximately $487.3 million in cash outlays related to investment activities. This amount included the acquisition of an additional 48% economic ownership interest in the Renaissance Portfolio for $117.9 million, which resulted in a controlling financial interest and the consolidation of the portfolio within our REIT Portfolio (Note 2, Note 7). We also acquired 11 additional properties for an aggregate purchase price of $369.4 million (Note 2).
In addition, we redeemed a portion of the noncontrolling interest in Fund II, which required a $8.0 million cash payment (Note 10).
During the nine months ended September 30, 2025, we provided a mezzanine loan and additional advances under a preferred equity investment in the aggregate amount of $28.5 million (Note 3).
Capital Commitments
During the nine months ended September 30, 2025, we made capital contributions aggregating $3.7 million to the Funds.
As of September 30, 2025, our share of the remaining capital commitments to the Funds aggregated $12.6 million as follows:
We do not have any additional capital commitments to the Funds.
Additionally, the Company has committed to fund tenant improvements under executed leases totaling approximately $39.6 million and $41.4 million, as of September 30, 2025 and December 31, 2024, respectively. The Company’s share of these obligations is approximately $32.4 million and $32.3 million, respectively (Note 9).
Development Activities
During the nine months ended September 30, 2025, capitalized costs associated with development activities totaled $44.8 million (Note 2). As of September 30, 2025, we had a total of 19 consolidated projects under development or redevelopment, for which the estimated total cost to complete these projects through 2028 was $126.1 million to $157.0 million, respectively. Substantially all remaining development and redevelopment costs are discretionary, and could be affected by various risks and uncertainties, including, but not limited to, the effects of the current inflationary environment, elevated interest rates, the imposition of tariffs and other risks detailed in Part I, Item 1A. Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2024.
56
Debt
A summary of our consolidated debt, which includes the full amount of Investment Management related obligations and excludes our pro rata share of debt at our unconsolidated subsidiaries, is as follows (in thousands):
Total Debt - Fixed and Effectively Fixed Rate
1,490,553
1,142,592
Total Debt - Variable Rate
382,526
405,355
1,547,947
(10,893
1,537,266
As of September 30, 2025, our consolidated indebtedness aggregated $1,873.1 million, excluding unamortized premium of $1.2 million and net unamortized loan costs of $12.2 million, and was collateralized by 49 properties and related tenant leases. As of September 30, 2025, stated interest rates on our outstanding indebtedness ranged from 3.99% to SOFR + 3.33% with maturities that ranged from October 1, 2025 to April 15, 2035, excluding available extension options. With respect to the debt maturing in 2025, we are actively pursuing refinancing the remaining obligations, though there can be no assurance that we can refinance such obligations on favorable terms or at all. Taking into consideration $1,201.4 million of notional principal under variable to fixed-rate swap agreements currently in effect, $1,490.6 million of the portfolio debt, or 79.6%, was fixed at a 4.85% weighted average interest rate and $382.5 million, or 20.4%, was floating at a 6.69% weighted average interest rate as of September 30, 2025. Our variable-rate debt includes $78.2 million of debt subject to interest rate caps.
Without regard to available extension options, as of September 30, 2025, we had (i) $82.4 million of debt maturing in 2025 at a weighted-average interest rate of 7.19%, (ii) $1.7 million of scheduled principal amortization due in the remainder of 2025 and (iii) $8.0 million of remaining scheduled 2025 principal payments and maturities, representing our pro rata share of our unconsolidated debt. In addition, $252.3 million of our total consolidated debt and $13.8 million of our pro-rata share of unconsolidated debt will come due by September 30, 2026. With respect to the debt maturing in 2025 and 2026, we have options to extend consolidated debt aggregating $35.2 million and $186.9 million as of September 30, 2025; however, there can be no assurance that the Company will be able to successfully execute any or all of its available extension options. For the remaining indebtedness, we may not have sufficient cash on hand to repay such indebtedness, and, therefore, we expect to refinance at least a portion of this indebtedness or select other alternatives based on market conditions as these loans mature; however, there can be no assurance that we will be able to obtain financing on acceptable terms or at all. Our ability to obtain financing could be affected by various risks and uncertainties, including, but not limited to, the effects of the current inflationary environment, elevated interest rates, the imposition of tariffs and other risks, including, but not limited to those detailed in Part I, Item 1A. Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2024.
We maintain a share repurchase program under which $122.5 million remains available as of September 30, 2025 (Note 10). We did not repurchase any shares under this program during the nine months ended September 30, 2025.
Sources of Liquidity
Our primary sources of capital for funding our short-term (less than 12 months) and long-term (12 months and longer) liquidity needs include (i) the issuance of both public equity and OP Units, (ii) the issuance of both secured and unsecured debt, (iii) unfunded capital commitments from noncontrolling interests within Investment Management, (iv) future sales of existing properties, (v) repayments of Structured Financing investments, (vi) liquidation of marketable securities, and (vii) cash on hand and future cash flow from operating activities. Our cash on hand in our consolidated subsidiaries as of September 30, 2025 totaled $49.4 million. Our remaining sources of liquidity are described further below. Depending upon the availability and cost of external capital, we believe our sources of capital are sufficient to meet our liquidity needs. Our historical cash flows uses are reflected in our Condensed Consolidated Statements of Cash Flows and are discussed in further detail below.
57
Issuances of Common Shares
The 2025 ATM Program (Note 10) provides us with an efficient and low-cost vehicle for raising capital through public equity issuances on an “as-we-go” basis to fund our capital needs. Through this program, we have been able to effectively “match-fund” the required capital for our REIT Portfolio and Investment Management acquisitions through the issuance of Common Shares over extended periods, employing a price averaging strategy. In addition, from time to time, we have issued and intend to continue to issue, equity in follow-on offerings separate from the 2025 ATM Program. Net proceeds raised through the 2025 ATM Program and follow-on offerings are primarily used for acquisitions, both for our REIT Portfolio and our pro-rata share of Investment Management acquisitions, and for general corporate purposes.
As of September 30, 2025, we had 12,759,835 forward shares outstanding under the 2025 ATM Program. The weighted-average net forward sales price per share of the forward shares under the 2025 ATM program was $20.27 and would result in $258.6 million in net cash proceeds if we were to physically settle the shares. In March 2025, we settled 11,172,699 shares outstanding under the 2025 ATM forward and received proceeds of $277.9 million.
Investment Management Capital
During the nine months ended September 30, 2025, Funds III and V called for capital contributions of $18.1 million, of which our aggregate share was $3.7 million. As of September 30, 2025, unfunded capital commitments from noncontrolling interests within Funds II, III, IV and V were $0, $0.6 million, $18.5 million and $27.3 million, respectively.
Other Transactions
During the first quarter of 2025, we recognized payments of $8.4 million related to the termination of a lease at City Center in San Francisco (Note 11).
As of September 30, 2025, we held 257,112 million shares of Albertsons which had a fair value of $4.5 million (Note 8). In addition, during the nine months ended September 30, 2025, we sold 495,000 shares of Albertsons generating $9.8 million in net proceeds and recognized dividend income of $0.3 million (Note 8).
Financing and Debt
During the third quarter of 2025, we drew the remaining $75.0 million available under the $250.0 Million Term Loan, and have no remaining availability. As of September 30, 2025, we had $460.0 million of capacity under existing REIT Portfolio debt facilities. In addition, as of that date within our REIT Portfolio and Investment Management platform, we had 137 unleveraged consolidated properties with an aggregate carrying value of approximately $2.2 billion, although there can be no assurance that we would be able to obtain financing for these properties at favorable terms, if at all (Note 7).
HISTORICAL CASH FLOW
The following table compares the historical cash flow for the nine months ended September 30, 2025 with the cash flow for the nine months ended September 30, 2024 (in millions, totals may not add due to rounding):
Variance
125.0
102.6
22.4
(430.4
(50.1
(380.3
340.8
(8.4
349.2
35.3
44.0
(8.7
Operating Activities
Net cash provided by operating activities primarily consists of cash inflows from rental revenue, and cash outflows for property operating expenses, general and administrative expenses and interest and debt expense.
Net cash provided by operating activities increased by $22.4 million for the nine months ended September 30, 2025 as compared to the prior year period primarily due to the repayment of accrued interest on a note receivable.
Investing Activities
Net cash used in investing activities is impacted by our investments in and advances to unconsolidated affiliates, the timing and extent of our real estate development, capital improvements, and acquisition and disposition activities during the period.
Net cash used in investing activities increased by $380.3 million during the nine months ended September 30, 2025 as compared to the prior year period, primarily due to (i) $341.1 million more cash used for the acquisition of real estate, (ii) $12.0 million more cash used for the issuance of notes receivable, (iii) $24.2 million more cash used for development, construction and property improvement costs, and (iv) $5.2 million less cash received from the repayment of notes receivable.
Financing Activities
Net cash provided by (used in) financing activities is impacted by the timing and extent of issuances of debt and equity securities, distributions paid to common shareholders and unitholders of the Operating Partnership, as well as principal and other payments associated with our outstanding indebtedness.
Net cash provided by financing activities increased by $349.2 million during the nine months ended September 30, 2025 as compared to the prior year period, primarily from (i) $459.7 million more cash from proceeds on debt and (ii) $5.6 million less cash used for financing costs. These increases were offset by (i) $51.3 million less cash provided by the sale of Common Shares, (ii) $31.7 million less cash provided by contributions from noncontrolling interests, (iii) $20.4 million more used to pay dividends, (iv) $9.9 million more cash used in the acquisition of noncontrolling interests and (v) $5.4 million more capital distributed to noncontrolling interests.
See Note 4 for a discussion of our unconsolidated investments. The Operating Partnership’s pro-rata share of unconsolidated non-recourse debt related to those investments is as follows (dollars in millions):
Operating Partnership
Investment
OwnershipPercentage
Pro-rata Share ofMortgage Debt
Effective Interest Rate (a)
18.1
6.4
6.16
Frederick County Square
6.79
Jan 2026
650 Bald Hill Rd
20.8
3.1
3.75
Jun 2026
840 N. Michigan
94.4
35.5
6.50
Dec 2026
7.18
Mar 2027
La Frontera
10.0
6.11
Jun 2027
Riverdale FC
18.0
6.8
6.85
Nov 2027
Georgetown Portfolio
50.0
4.72
Dec 2027
LINQ Promenade(d)
26.3
5.89
Shoppes at South Hills(b)
5.9
5.95
Mar 2028
7.1
5.80
The Walk at Highwoods Preserve(b)
20.0
4.1
6.25
Oct 2028
Crossroads Shopping Center(c)
49.0
36.8
5.78
Nov 2029
13.7
5.90
Oct 2034
173.4
59
CRITICAL ACCOUNTING POLICIES
Management’s Discussion and Analysis of Financial Condition and Results of Operations in this Report is based upon the Condensed Consolidated Financial Statements, which have been prepared in accordance with GAAP. The preparation of Condensed Consolidated Financial Statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. We base our estimates on historical experience and assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We believe there have been no material changes to the items that we disclosed as our critical accounting policies under Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in our 2024 Annual Report on Form 10-K.
Recently Issued and Adopted Accounting Pronouncements
Reference is made to Note 1 in the Notes to Condensed Consolidated Financial Statements for information about recently issued accounting pronouncements.
SUPPLEMENTAL U.S. FEDERAL INCOME TAX CONSIDERATIONS
The following supplements the discussion contained under the heading “Certain U.S. Federal Income Tax Considerations” in our prospectus dated November 6, 2023.
The One Big Beautiful Bill Act
On July 4, 2025, President Trump signed into law the One Big Beautiful Bill Act, or the OBBBA. The OBBBA made significant changes to the U.S. federal income tax laws in various areas. Among the relevant changes:
The OBBBA contains complex revisions to the U.S. federal income tax laws. Holders of our Common Shares are urged to consult with their tax advisors with respect to the OBBBA and its potential effect on the acquisition, ownership and disposition of our Common Shares.
ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Information as of September 30, 2025
Our primary market risk exposure is to changes in interest rates related to our property mortgage loans and other debt. See Note 7 in the Notes to Condensed Consolidated Financial Statements, for certain quantitative details related to our property mortgage loans and other debt.
Currently, we manage our exposure to fluctuations in interest rates primarily through the use of fixed-rate debt and interest rate swap and cap agreements. As of September 30, 2025, we had total property mortgage loans and other notes payable of $1,873.1 million, excluding the unamortized premium of $1.2 million and net unamortized debt issuance costs of $12.2 million, of which $1,490.6 million, or 79.6% was fixed-rate, inclusive of debt with rates fixed through the use of derivative financial instruments, and $382.5 million, or 20.4%, was variable-rate based upon SOFR or Prime rates plus certain spreads. As of September 30, 2025, we were party to 35 interest rate swaps and three interest rate cap agreements to hedge our exposure to changes in interest rates with respect to $1,201.4 million and $78.2 million of variable-rate debt, respectively. If we decided to employ higher leverage levels, we would be subject to increased debt service requirements and a higher risk of default on our
debt obligations, which could adversely affect our financial conditions, cash flows and ability to make distributions to our shareholders. In addition, increases or changes in interest rates could cause our borrowing costs to rise and may limit our ability to refinance debt.
The following table sets forth information as of September 30, 2025 concerning our long-term debt obligations, including principal cash flows by scheduled maturity (without regard to available extension options) and weighted average effective interest rates of maturing amounts (dollars in millions):
REIT Portfolio Consolidated Mortgage and Other Debt
Year
ScheduledAmortization
Maturities
Weighted AverageInterest Rate
102.0
106.9
49.9
535.4
537.2
1.2
97.1
98.3
326.6
327.9
1,106.2
1,120.8
Investment Management Consolidated Mortgage and Other Debt
82.4
83.5
7.2
219.1
222.0
222.8
224.5
222.3
5.8
6.0
746.3
752.3
Mortgage Debt in Unconsolidated Partnerships (at our Pro-Rata Share)
8.0
6.2
35.8
42.0
55.2
56.3
16.6
16.7
36.4
36.7
9.3
164.1
Without regard to available extension options, in the remainder of 2025, $84.1 million of our total consolidated debt and $8.0 million of our pro-rata share of unconsolidated outstanding debt will become due. In addition, $328.9 million of our total consolidated debt and $42.0 million of our pro-rata share of unconsolidated debt will become due in 2026. As it relates to the aforementioned maturing debt in 2025 and 2026, we have options to extend consolidated debt aggregating $35.2 million and $186.9 million at September 30, 2025, respectively; however, there can be no assurance that the Company will be able successfully execute any or all of its available extension options. As we intend on refinancing some or all of such debt at the then-existing market interest rates, which may be greater than the current interest rates, our interest expense would increase by approximately $4.6 million annually if the interest rate on the refinanced debt increased by 100 basis points. After giving effect to noncontrolling interests, our share of this increase would be $1.9 million. Interest expense on our variable-rate debt of $382.5 million, net of variable to fixed-rate swap agreements currently in effect, as of September 30, 2025, would increase $3.8 million if corresponding rate indices increased by 100 basis points. After giving effect to noncontrolling interests, our share of this increase would be $1.3 million. We may seek additional variable-rate financing if and when pricing and other commercial and financial terms warrant. As such, we would consider hedging against the interest rate risk related to such additional variable-rate debt through interest rate swaps and protection agreements, or other means.
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Based on our outstanding debt balances as of September 30, 2025, the fair value of our total consolidated outstanding debt would decrease by approximately $10.3 million if interest rates increased by 1%. Conversely, if interest rates decreased by 1%, the fair value of our total outstanding debt would increase by approximately $6.2 million.
As of September 30, 2025, and December 31, 2024, we had consolidated notes receivable of $154.8 million and $126.6 million, respectively. We determined the estimated fair value of our notes receivable by discounting future cash receipts utilizing a discount rate equivalent to the rate at which similar notes receivable would be originated under conditions then existing.
Based on our outstanding notes receivable balances as of September 30, 2025, the fair value of our total outstanding notes receivable would decrease by approximately $1.5 million if interest rates increased by 1%. Conversely, if interest rates decreased by 1%, the fair value of our total outstanding notes receivable would increase by approximately $1.5 million.
Summarized Information as of December 31, 2024
As of December 31, 2024, we had total property mortgage loans and other notes payable of $1.5 billion, excluding the unamortized premium of $0.2 million and unamortized debt issuance costs of $10.9 million, of which $1.1 billion, or 73.8%, was fixed-rate, inclusive of debt with rates fixed through the use of derivative financial instruments, and $405.4 million, or 26.2%, was variable-rate based upon SOFR rates plus certain spreads. As of December 31, 2024, we were party to 30 interest rate swap and four interest rate cap agreements to hedge our exposure to changes in interest rates with respect to $852.0 million and $111.2 million of SOFR-based variable-rate debt, respectively.
Interest expense on our variable-rate debt of $405.4 million, net of variable to fixed-rate swap agreements currently in effect, as of December 31, 2024, would have increased $4.1 million if corresponding rate indices increased by 100 basis points. Based on our outstanding debt balances as of December 31, 2024, the fair value of our total outstanding debt would have decreased by approximately $9.8 million if interest rates increased by 1%. Conversely, if interest rates decreased by 1%, the fair value of our total outstanding debt would have increased by approximately $9.8 million.
Changes in Market Risk Exposures from December 31, 2024 to September 30, 2025
Our interest rate risk exposure from December 31, 2024, to September 30, 2025, has decreased on an absolute basis, as the $405.4 million of variable-rate debt as of December 31, 2024 has decreased to $382.5 million as of September 30, 2025. Our interest rate exposure as a percentage of total debt has decreased, as our variable-rate debt accounted for 26.2% of our consolidated debt as of December 31, 2024 compared to 20.4% as of September 30, 2025.
ITEM 4.CONTROLS AND PROCEDURES.
Disclosure Controls and Procedures
Our disclosure controls and procedures include internal controls and other procedures designed to provide reasonable assurance that information required to be disclosed in this and other reports filed under the Exchange Act, is recorded, processed, summarized, and reported within the required time periods specified in the SEC’s rules and forms; and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures. It should be noted that no system of controls can provide complete assurance of achieving a company’s objectives and that future events may impact the effectiveness of a system of controls. Our Chief Executive Officer and Chief Financial Officer, after conducting an evaluation, together with members of our management, of the effectiveness of the design and operation of our disclosure controls and procedures as of September 30, 2025, have concluded that our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) were effective as of September 30, 2025, at a reasonable level of assurance.
Changes in Internal Control Over Financial Reporting
There have been no changes in our internal control over financial reporting during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.
PART II – OTHER INFORMATION
ITEM 1.LEGAL PROCEEDINGS.
From time to time, we are a party to various legal proceedings, claims or regulatory inquiries and investigations arising out of, or incident to, our ordinary course of business. While we are unable to predict with certainty the outcome of any particular matter, management does not expect, when such matters are resolved, that our resulting exposure to loss contingencies, if any, will have a material adverse effect on our consolidated financial position.
ITEM 1A.RISK FACTORS.
Except to the extent additional factual information disclosed elsewhere in this Report relates to such risk factors (including, without limitation, the matters discussed in Part I, “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations”), there were no material changes to the risk factors disclosed in Part I, “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2024.
ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
None.
ITEM 3.DEFAULTS UPON SENIOR SECURITIES.
ITEM 4.MINE SAFETY DISCLOSURES.
Not applicable.
ITEM 5.OTHER INFORMATION.
Trading Arrangements
During the three months ended September 30, 2025, none of our officers or trustees (as defined in Rule 16a-1(f) of the Exchange Act) adopted, terminated, or modified any contract, instruction or written plan for the purchase or sale of our securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any non-Rule 10b5-1 trading arrangement (as defined in Item 408 of Regulation S-K).
ITEM 6.EXHIBITS.
The following is an index to all exhibits including (i) those filed with this Quarterly Report on Form 10-Q and (ii) those incorporated by reference herein:
Exhibit No.
Method of Filing
10.1
Third Amendment to Third Amended and Restated Credit Agreement, dated as of May 29, 2025, by and among Acadia Realty Limited Partnership, Acadia Realty Trust, Bank of America, N.A., as administrative agent, Wells Fargo Bank, National Association, Truist Bank, and PNC Bank, National Association, as syndication agents, BofA Securities, Inc. and Wells Fargo Securities, LLC, as joint bookrunners, and BofA Securities, Inc., Wells Fargo Securities, LLC, Truist Securities, Inc. and PNC Capital Markets LLC, as joint lead arrangers, and the lenders and letter of credit issuers party thereto
Incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2025.
31.1
Certification of Chief Executive Officer pursuant to rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Filed herewith
31.2
Certification of Chief Financial Officer pursuant to rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Furnished herewith
32.2
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS
Inline XBRL Instance Document–the instance document does not appear in the Interactive Data File as its XBRL tags are embedded within the Inline XBRL document
101.SCH
Inline XBRL Taxonomy Extension Schema with Embedded Linkbase Documents
104
Cover page formatted as Inline XBRL and contained in Exhibit 101
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant)
By:
/s/ Kenneth F. Bernstein
Kenneth F. Bernstein
Chief Executive Officer,
President and Trustee
/s/ John Gottfried
John Gottfried
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer)
/s/ Richard Hartmann
Richard Hartmann
Senior Vice President and
Chief Accounting Officer
(Principal Accounting Officer)
Dated: October 29, 2025