Acadia Realty Trust NYSE: AKR executives said the company delivered a “strong quarter” to start 2026, pointing to continued momentum in its street retail portfolio, accelerating leasing activity, and a busy slate of acquisitions and recapitalizations despite a more uncertain macro backdrop.
During the company’s first-quarter 2026 earnings call on April 29, President and CEO Ken Bernstein said Acadia posted 11% year-over-year earnings growth, driven in part by nearly 6% same-store growth. Bernstein also highlighted more than $2.5 billion of transactional activity, including $600 million of new investments, over $500 million of recapitalizations in the investment management platform, and a new $1.4 billion corporate borrowing facility.
Street retail tailwinds remain the core driver
Bernstein attributed the company’s performance to what he described as five key factors supporting street retail: shrinking supply, rising retailer demand for physical stores, resilient tenant performance—particularly among higher-income shoppers—lighter relative capital expenditures to re-tenant street locations, and stronger annual income growth due to contractual increases and more frequent mark-to-market opportunities.
He said those tailwinds are supporting internal growth “hitting the bottom line” in both earnings and net asset value. While acknowledging increased competition for open-air retail assets, Bernstein said street retail remains “a less crowded field than in other formats with fewer capable buyers,” in part because it requires localized market knowledge, tenant understanding, and familiarity with local laws.
Leasing activity builds, with notable rent spread potential
In prepared remarks focused on internal growth, management said leasing remained strong across the REIT and the investment management platform. The company reported $3.5 million (its share) of signed leases in the first quarter and said leases in “advanced negotiation” rose to $11.5 million, up nearly $2.5 million from the prior quarter.
Executives also pointed to rising market rents on key “high-growth streets,” where Acadia is negotiating new leases, fair-market renewals, and “pry loose” mark-to-markets in areas including SoHo, Upper Madison Avenue, M Street, Armitage Avenue, and Melrose Place. Management said that if certain deals are completed, they could result in a weighted average spread “just over 40%,” noting that street leases generally have 3% contractual growth and that spreads should be viewed in the context of multi-year rent compounding.
When asked about how leasing could affect guidance, CFO John Gottfried said leasing needed to reach the midpoint of guidance “has already happened,” and additional signed and opened deals could be additive. Management said it is typically conservative with fair market value assumptions and characterized those as “typically upside.”
San Francisco and North Michigan Avenue show recovery progress
Management said it is “building conviction” around markets that are earlier in their recovery cycle, specifically San Francisco and North Michigan Avenue in Chicago.
For San Francisco, the company said that since the start of 2025 it signed about 90,000 square feet of new leases at two assets, including LA Fitness’ Club Studio and T&T Supermarkets. Following the end of the first quarter, the company said it signed an additional 25,000 square feet with Sprouts Farmers Market at 555 Ninth Street, joining Trader Joe’s and Club Studio. Management emphasized that Sprouts, T&T, and Club Studio will each represent their “first store in San Francisco.” With about 70,000 square feet remaining to lease, the company said it is gaining confidence it can continue unlocking embedded value at the two centers.
On North Michigan Avenue, management said foot traffic has returned to pre-2019 levels and tenant demand has increased since the start of 2026. The company cited recent openings and signings from brands including Mango, Aritzia, Uniqlo, and American Eagle, as well as a 60,000-square-foot Candy Hall of Fame at 830 North Michigan Avenue. Even with improving activity, management said rents on the corridor remain about 50% below prior peak levels.
Responding to an analyst question about Chicago, management pushed back on the idea that the market is broadly weak, arguing the issue on North Michigan Avenue has been “difficult spaces” such as multi-level retail and the challenge of backfilling former flagship locations. Bernstein also referenced “three underperforming malls on the street” as a headwind, adding that as those are addressed, momentum could improve.
Acquisitions and recapitalizations expand corridors and recycle capital
Chief Investment Officer Reggie Livingston said the company has been “incredibly busy” year-to-date, closing over $1 billion in acquisitions and recapitalizations through the first quarter and into April. He said Acadia gained a foothold on two luxury retail corridors with REIT acquisitions not previously announced:
- 225 Worth (Worth Avenue, Palm Beach): Acquired for $43 million at quarter-end. Livingston said the asset includes Gucci, J.McLaughlin, and G4 and offers “meaningful mark-to-market opportunity.”
- 428 Newbury (Newbury Street, Boston): Acquired after quarter-end for $109 million. Livingston said the assets are anchored by Chanel and Cartier and have “meaningful value creation opportunity.”
Livingston said the company’s intent in new markets is not limited to single assets, but to build “scale” over time—targeting the ability to amass “100, 200 plus” in a market where feasible—so Acadia can become a preferred counterparty for sellers and tenants. Gottfried added that from a modeling perspective, the company assumes acquired leases may be below market and said Acadia aims to reach “sixes cash” yields in roughly two years, while tolerating up to three or four years for the right deal.
On the investment management side, Livingston said the quarter was defined by recapitalizations, including a joint venture with TPG Real Estate covering Avenue at West Cobb and six Fund V assets in a $440 million transaction. He also cited a $68 million recapitalization of Pinewood Square in Palm Beach County with private funds managed by Cohen & Steers, noting it was the second recapitalization with that investor. Livingston said these transactions validate the platform and “free up capital” to redeploy.
Guidance raised; occupancy and pipeline point to embedded growth
Gottfried said first-quarter results showed internal growth accelerating and external growth goals being achieved on both accretion and volume. He said the company raised full-year 2026 earnings guidance to $1.22 to $1.26 of FFO, representing 9% growth at the midpoint over the $1.14 of FFO reported in 2025. He described a breakdown of the projected year-over-year increase as follows:
- Internal NOI growth (including redevelopments): $0.07 to $0.09 of FFO
- External growth: $0.04 to $0.05 of FFO
- Investment management growth: $0.01 to $0.02 of FFO
- Offset: approximately $0.04 of dilution embedded from an anticipated City Point loan conversion in the second quarter, which Gottfried said should become accretive as the asset stabilizes
The company said its REIT economic occupancy increased to 94% at quarter-end. Gottfried emphasized that the street and urban portfolio—the company’s “most valuable space”—rose 140 basis points sequentially and 570 basis points year over year, with that portfolio 91.7% occupied as of March 31.
Acadia ended the quarter with $10.5 million, or about 5% of annual base rent, in its “signed not open” (SNO) pipeline, which management said increased about 18% during the quarter even after nearly 25% of the pipeline commenced in the first quarter. Gottfried said the company expects approximately 80% of SNO to commence during 2026, with the remainder in the first half of 2027, and noted that more than $4 million of anticipated commencements are projected for the fourth quarter, tied primarily to the expected openings of T&T Supermarket and LA Fitness’ Club Studio at San Francisco redevelopment projects.
For same-store performance, management said it remains on track for the midpoint of its guidance at 7% and provided a quarterly outlook, while cautioning that small changes can swing results. Gottfried said the current model shows same-store growth of 6% to 8% in the second quarter, 7% to 9% in the third quarter, and 5% to 7% in the fourth quarter, with the street and urban portfolio expected to outperform suburban by 400 to 500 basis points.
On financing, Gottfried said Acadia completed a refinancing of its unsecured corporate credit facility, entering into a $1.4 billion agreement that tightened pricing, extended maturities, and increased borrowing capacity by $250 million. He said the facility was “significantly oversubscribed,” and the company added two new banks to its group of lenders. Gottfried also said the company completed more than $600 million of REIT and investment management deals so far in 2026 without issuing equity and cited revolver capacity, unsettled forward equity, and anticipated proceeds from structured finance and investment management as sources of capital to fund the acquisition pipeline.
Looking ahead, Bernstein said the company’s street retail thesis “is working” and that Acadia believes it has a clear line of sight to multi-year growth supported by internal leasing and external investment opportunities.
About Acadia Realty Trust NYSE: AKR
Acadia Realty Trust NYSE: AKR is a Maryland real estate investment trust (REIT) that focuses on the acquisition, development, ownership and operation of grocery-anchored and necessity-based shopping centers. The company targets retail properties that serve densely populated urban and suburban markets and typically feature essential tenants such as supermarkets, drugstores, fitness centers and other service-oriented retailers. As a self-managed REIT, Acadia oversees leasing, property management, financing and construction activities through its in-house platform.
Acadia's portfolio is diversified across property types and lease structures, with an emphasis on sites that benefit from long-term consumer traffic and resilient tenancy.
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