Good day, ladies and gentlemen. Thank you for standing by. Welcome to the Acadia Realty Trust Fourth Quarter 2025 Earnings Conference Call. At this time, participants are in a listen-only mode. After the speakers' presentation, there will be a question and answer session. To ask a question during the session, you will then hear an automated message advising your hand is raised. Please note that today's conference is being recorded. I will now hand the conference over to your speaker host for today, Will Delts. Please go ahead.

Good afternoon. Thank you for joining us for the fourth quarter 2025 Acadia Realty Trust earnings conference call. My name is Will Delts, and I'm an analyst in our asset management. Before we begin, please be aware that statements made during the call are not historical and may be deemed forward-looking statements within the meaning of the Securities and Exchange Act of 1934. Actual results may differ materially from those indicated by such forward-looking statements due to a variety of risks and uncertainties, including those disclosed in the company's most recent Form 10-Ks and other periodic filings with the SEC. Forward-looking statements speak only as of the date of this call, February 11, 2026. The company undertakes no duty to update them. During this call, management may refer to certain non-GAAP financial measures, including funds from operations and net operating income. Please see Acadia's earnings press release posted on its website for reconciliations of these non-GAAP financial measures with the most directly comparable GAAP financial measures. Once the call becomes open for questions, we ask that you limit your first round to two questions per caller and give everyone the opportunity to participate. You may ask further questions by reinserting yourself into the queue. We'll answer as time permits. Now it's my pleasure to turn the call over to Ken Bernstein, President and Chief Executive Officer, who will begin today's management remarks.

Thank you, Will. Great job. Welcome, everyone. Our strong fourth quarter results added to an overall strong year with both solid internal and external growth. And this momentum is continuing as we head into 2026. AJ, Reggie, and John will discuss our performance last quarter and our outlook going forward. But before diving into the details, I'd like to take a step back and discuss the key initiatives we put in place over the past few years, and how they have positioned us for not only strong current performance but also for strong long-term growth. A few years ago, after the very painful multiyear headwinds, first from the retail Armageddon, then from COVID and related issues, it became clear that the strong rebound in our portfolio performance was likely more than just a COVID rebound and was setting up for a longer-term positive fundamental shift for retail real estate. As we've discussed on prior calls, these tailwinds benefited most open-air retail, but they have been especially beneficial for the street retail component of our portfolio. And for several reasons. First, the lack of new development of retail real estate for almost a decade has caused the rebalancing of supply and demand and has been a powerful tailwind for all open-air retail. But more importantly, the additional shift by retailers away from a heavy reliance on selling through wholesale and department stores and their recognizing the need for their own physical stores has been an additional important driver of demand. And this increased demand has applied much more to discretionary retail, especially in key must-have corridors. Then second, while the consumer has generally been more resilient than anticipated, the so-called K-shaped economy has meant that tenant demand and tenant performance by discretionary retailers who serve the upper segment of the economy…

Great. Thanks, Ken. Good morning, everyone. Before I dive into the quarter, I'd like to take a minute to highlight another record year of leasing for us in 2025. Driven largely by the trends that Ken mentioned, most notably retailers' increased focus on DTC and the remarkable strength of the high-end consumer, our tenants invested in both new and existing stores with confidence and at an accelerated pace. That momentum remained consistent throughout the year and shows no signs of slowing as we look ahead to the balance of 2026 and beyond. Over the course of 2025, with a focus on Pralose opportunities and thoughtful curation, we leaned into our growing scale to add several new and exciting brands while also expanding relationships with some of our most dynamic highest-performing tenants. Notable additions would include TNT Grocery and LA Fitness Club Studio in San Francisco, Google and Swarovski on M Street in DC, Richemont's Watchfinder and Veronica Beard in Soho, Rag and Bone on Henderson Avenue in Dallas, UGG on North 6th Street in Williamsburg, and most recently, an expansion and extension of The Row on Melrose Place in Los Angeles. In addition to curation, 2025 was also a year of unlocking the outsized rent growth we've seen across our streets over the last several years. Through a combination of lease-up, Pralose, and fair market resets, the team consistently delivered spreads in excess of 50% on our streets. 2025 is also a banner year for tenant performance and sales growth across our dance contemporary, aspirational, and specialty street tenants. Year-over-year sales on our streets ranged from 10% to as high as 30% to 40% in some markets. As we've said, tenant performance remains the most important indicator of future rent growth. And where sales go, rents inevitably follow. And we…

Thanks, AJ. Good morning, everyone. As noted in our earnings release, our Q4 and to-date acquisition volumes stand at nearly $500 million. And to give our recent growth further context, over the last twenty-four months, we've closed in excess of $1.3 billion of acquisitions, including over $500 million in street retail for our REIT portfolio, and over $800 million in value-add deals for our investment management platform. That volume is certainly a needle mover for a company of our size, but it isn't volume for volume's sake. As Ken mentioned, in our street retail acquisitions, we doubled down in dynamic growth markets and expanded into new markets with those same growth characteristics. And for our investment management platform, we did more volume than any comparable period during our commingle fund business. As we continue to find great assets with strong upside and capitalize them with top-tier institutional partners. By design, our dual platform approach has continued to find ways to profitably grow as our REIT portfolio and our IMP deliver the accretion consistent with our goals of a penny per $200 million. We're excited by how much we've grown, and we see nothing on the horizon that should slow us down. Now diving into specifics of our most recent activity and some 2026 visibility. Last month, we purchased five retail storefronts at 1045 and 1165 Madison Avenue in Manhattan, with tenants such as La Lavo and Todd Snyder. These assets sit within the Upper Madison retail district, which is attracting a new generation of contemporary brands. This influx is driving a rent growth surge, that places the current rents in these assets below market. And further, if we can find accretive opportunities, we plan to add more assets in this corridor to generate the benefits of scale that we've enjoyed…

Thanks, Reggie, and good morning. My remarks today will focus on our quarterly results, our 2026 outlook, and then closing with an update on our balance sheet. Our message is clear. We are continuing to see strength across our dual platforms. And with multiple avenues of growth, our team is laser-focused on driving earnings and NAV growth. Starting with our fourth quarter results. We reported same property NOI growth of 6.3% for the quarter and 5.7% for the year. Coming in at the upper end of our guidance, with our street and urban portfolio once again driving our growth. And this top-line growth is hitting our bottom-line earnings. We reported $0.34 a share for the fourth quarter, which included $0.03 of gains from our final sale of Albertsons shares. Just to lay out a clean run rate, once we back out the 3¢ of Albertsons gains and the one-time penny of net real estate tax savings highlighted in our release, we're at 30¢ for the quarter, which is sequentially up an incremental penny from the 29¢ also net of the gains and promotes that we reported in Q3. Additionally, and in line with our goals, we increased the REIT's economic occupancy another 30 basis points to 93.9%. It's also worth highlighting that our street and urban economic occupancies sequentially increased an additional 80 basis points during the fourth quarter and 370 basis points over the course of 2025. But as we've said before, not all occupancy is created equal. With street and urban occupancy at approximately 90%, versus prior peak levels that were in excess of 95%, we continue to see meaningful embedded NOI and earnings growth. I'd now like to highlight a few items from our signed, not open pipeline. First, our pipeline of $8.9 million at December 31…

Thank you. Ladies and gentlemen, to ask to be announced. To withdraw your question, simply press 11 again. As a reminder, please limit yourself to two questions per person. If you have any additional questions, you may reenter the queue if time permits. Please stand by while we compile the candidate roster. Our first question coming from the line of Samir Khanal with Bank of America Securities. Your line is now open.

Good afternoon, everybody. I guess, Ken or John, I mean, you gave a lot of good details on kind of the acquisition environment, you know, the advanced stages of negotiations you're in. Maybe expand a little bit on kind of the markets and kind of what you're seeing from a pricing perspective.

Sure. I'll start it off, and then, Reggie, perhaps you'll add some more color to it. In general, the markets that we are currently active in and that you've seen the acquisitions over the last couple of years, ranging from New York, SoHo, Williamsburg down to DC, continue to be very exciting for us. There are probably a half a dozen other markets that we either have been active in and will continue at and some new markets. In terms of pricing, it's very tricky to talk about going in cap rates because rents have moved. AJ mentioned the mark to market in SoHo of 50%. So if a cap rate would be substantially lower on a lease that you know you have near-term 50% increase than one that is at market. So I'm hesitant to give going in yields other than to say we are still shooting for our overall goal of acquiring assets, that through contractual growth, and periodic fair market value resets mark to market can throw off a 5% CAGR over the next five years. And we're seeing that in the markets we're currently active in. And our retailers are showing us other markets, that makes sense in that same profile as well. Reggie, I don't know if there's anything additional you wanna add.

Yeah. I would just say that, you know, we go through a rigorous process, Samir, of looking at potential new markets. Just making sure they have those same growth characteristics of our existing markets, the tight supply, the tenant performance, and work extensively with AJ and his team, as Ken said, to understand what do tenants wanna be? And how can we find the right entry point in those markets? And then is there an opportunity to scale in those markets as we've often talked about the benefits of that scale? So go through a rigorous process with that, and we think there are new markets on the horizon.

Thank you for that. And then, John, on the assumption for same store NOI growth, I know that 5% to 9%, you talked about sort of the swing factors there. I just want to make sure, is rent commencement and sort of credit loss assumptions sort of the main factors to kind of get you the high end and the low end there, or are you kind of missing on something else?

Yeah. I mean, I think it's a combination of three, Samir, but I would say it's really the piece that I wanted to highlight that I think, you know, as we've been posting and talking about there's a lot of below-market leases on our portfolio. And to the extent we could get those leases out, that's gonna create short-term downtime. Which we haven't filled in, into that, but one, we are actively hoping to do it. So I'd say the other ones could move, you know, 100 basis points here or there. But I think if we do our job and we could accelerate mark-to-markets on this, short-term quarterly downtime that we could get from that, we're gonna take that to get the long-term growth. So I would say that's probably the most impactful of where we land within that range. And we'll update throughout the quarters as to our progress on that.

And then under any circumstance, we're still looking at a robust 5% to 9%. Barring significant credit loss or other things, which feels pretty darn good.

Our next question's coming from the line of Craig Mailman with Citi. Your line is now open.

Hey. Good morning, guys. You know, I don't wanna put words in your mouth, but John, maybe it feels like reading between the lines there's plenty of variables that could, you know, make guidance here a little bit conservative. I'm just trying to figure out, you know, some of the things that AJ talked about on the kind of blend and extends and the pry loose, like, how do you guys go about figuring out what to include in guidance versus what's lower probability? Or maybe another way of asking that is, like, how much of low probability kind of upside could there be that you didn't include in guidance, but maybe relative to the past couple of years, you guys have been able to capture above and beyond that initial projection.

Yeah. Craig, so I think, you know, I think if you've known the way that we put out our guidance, we tend to set realistic goals and we achieve those versus putting in super soft assumptions that we would miraculously be the next quarter. So I'll just start with that, that philosophy is unchanged. What I'll say has changed is the environment that we're in. So in terms of, you know, we are not going to, as much as I trust AJ, if he tells me he's gonna get a 50% spread and open that lease in two weeks, I am absolutely not going to put that in our guidance. So I think if there's things that are not within our control, we're not gonna layer that assumption in there. I do think our credit is conservative as I put in my remarks. It's double what we needed in the prior two years. And we've also pulled out known specific or so I think to the extent we had a tenant struggling, so think, you know, we have one a single container store. You should assume that is not included in our guidance. So think there is a bit of conservatism there. But I think where we, I will say we have a lot of conservatism is on the active on the investment side. Several $100 million of forward equity. Reggie talked about the pipeline. And we're gonna be busy there. So I think that's where the upside is. The other thing is can add a penny or 2 here or there. But I think it's really our upside is gonna be from the external growth in '26. Some of the drivers for '27 and beyond, there's a lot of upside in those, which I tried to articulate, you know, with that setup going beyond this the current year.

And that just to reinforce that, whether it's pry loose, fair market value resets, or other drivers, it will probably have less of a needle-moving impact this year in '26 and more set us up stronger '27 and '28, which is how we're really thinking about this. We like how our numbers are stacking up for the foreseeable future, we wanna make sure we're continuing to extend that.

That makes sense. That's helpful. And I apologize. My line was breaking in and out. Reggie, did I hear you say $500 million of kind of a near-term deal pipeline and is that correct?

I'm saying that the $150 million under agreement. But we feel confident we can always do the run rate that we've done the past two years with half of it IMP and half of it street.

And that's where the 500? Would come in? Yep.

So is it another I sorry to belabor. But you guys already did the $4.25 through Skyview. Like, do you view that as your 20% So the $1.50 that Reggie's referring to is on balance sheet, 100% owned street retail assets.

New and not discussed.

Yes. Until right now.

Okay. And what do you think timing on that could be?

Q1. Let's stay tuned.

Okay. Great. Thank you.

Our next question coming from the line of Linda Tsai with Jefferies. Your line is now open.

Hi. Good morning. Any thoughts on where the 90% street occupancy could end by year-end?

Yeah. So I think, Linda, again, what I would say is that I look more in terms of NOI than on occupancy. So, you know, we have a single location in Soho. That's gonna have a far greater impact than, you know, a location that we have elsewhere in our portfolio. So the percentage I will say, is less relevant. But, you know, what I would say, you know, our goal continues to be is that we wanna get to that 95%. Know, call that within eighteen months.

Thanks. And just one question for Ken. Any high-level color on how tariffs might have shown up in retailer results in 2025? Either from a sales or margin perspective, and how this might change in '26?

So I've had a variety of those conversations with as many of the retailers that we have in our portfolio that we meet with regularly. And the first answer is it's somewhat varied retailer by retailer. The general takeaway would be most of our retailers believe that they have navigated through the toughest parts of that storm. Now, obviously, things seem to change every day. And we would all welcome more predictability. But it feels first and foremost that the most difficult parts of that are in the rearview mirror. Secondly, and probably the most important to us, on the street retail side, this is a little different on our mass merchant side, but for our street retailers, they've been able to adequately navigate around tariffs and hold on to margins defined from our perspective. Such that the traditional rent-to-sales ratios that we have always talked about, whether it's 8% for a restaurant or 12% for certain advanced contemporary and 18% for others. Those ratios are holding. And thus, and this is important, as sales increase, whether it's due to slightly stronger inflation or strong consumer, consistent consumer demand, as you see top-line sales grow, you should expect retailers' ability to pay that increased rent has remained very similar today to where it was five, ten years ago. There's not been that shift of margin pressure resulting in any kind of pushback in terms of our rent requests. Our retailers are opening these stores. They're profitable. And while they always want to pay less rent, they are not looking to or blaming the noise around tariffs as the gating issue.

Thank you. Our next question coming from the line of Todd Thomas with KeyBanc Capital Markets. Your line is now open.

Hi. Thanks. Good morning. I wanted to just go back to the acquisitions. And the pipeline, you know, the, I guess, really the $150 million that the company's been awarded and maybe perhaps a little bit more broadly, you think about investments during the year. You've been active in New York more recently. And Ken, you mentioned there could be some new markets. But is the opportunity set that you're seeing in New York on a risk-adjusted basis just most favorable today? How should we think about future investment activity in the markets that you're sort of focusing on or, you know, readying to deploy capital on more near term here?

Yeah. So let me start and Reg then chime in. New York is probably a more competitive market. So where we can find deals, often they are more often than not off-market and New York will continue to do those, but you should expect to see us go into other established markets, established meaning obvious that our retailers are there and want to be there as long as we can have a view that there can be follow-on deals such that we can build scale. And we have built a nice portfolio in New York, continue to plan on adding to it. But my expectation is other markets will kick in as well. Reg, anything you wanna add to that?

Yeah. I would just say with the competition you alluded to, there's certainly more competition. But I would say not too long ago, the issue was bringing sellers for street retail, bringing them off the sidelines to decide whether they wanted to sell or not. A lot of them, because of the retail fundamentals, they've decided to sell, and so now we're just in competition with others, and I'd like that back pattern for us because it usually goes to those who have the reputation, have the capitalization, have the experience. And we feel we do well in that environment.

Okay. And then, you know, Ken, you didn't mention Chicago. When you were discussing markets that remain exciting. And you just listed a couple. But how are you thinking about Chicago today in terms of both capital deployment for newer deals and also as a potential opportunity to maybe recycle capital out of?

Yeah. So let's first start with fundamentals because I think Chicago has until recently been getting a bum rap. And if you look at our metrics, if you look at our rental growth, especially on our major markets, whether it's the Gold Coast or Armitage Avenue, one of our tenants is paying percentage rent on State Street. That's fantastic. And it puts that store in one of the top of their chain. So in general, the fundamentals have recovered pretty darn strong. And that's good and encouraging to us. That being said, we still have too much ownership in Chicago relative to the rest of our portfolio. And it would make sense over the next year or two as we lease up assets. If they are not part of our scale strategy on a given corridor, it would make sense for us to prune. A goal of ours, we'll see if we can get there, is over the next two to three years, to get Chicago to that right balance which would mean even though we do periodically see some good acquisition opportunities, and even though we have seen some really strong rental growth, we don't intend to add, and we probably will, subtract in Chicago in due course. But thank goodness we did not fire sales stuff because the rent spreads and new tenant demand, the deals we've done, whether it would be Mango or KIF, thank goodness we didn't exit before those. But we recognize the rebalancing.

Thank you. Our next question coming from the line of Michael Mueller with JPMorgan. Your line is now open.

Yeah. Hi. I guess, first of all, I think you made a comment you'd like to be at 95% street occupancy in the next eighteen months. Is a lease number or an occupied number? And how should we think about, you know, ballpark blended rent per square foot for that 500 basis points? At least a range.

Yeah. So, Mike, I would say that it would be when we say least, to give us some room. Upside to have it occupied and paying. Then in terms and Mike, you know, we've had this conversation a bunch of times. It's going to absolutely matter what within that 95% we get leased up. So, for example, we could look through our portfolio. We have a single location in Soho. That is going to be in the, you know, that's going to be a very large lease, which will have a big economic impact and a relatively small impact on the occupancy. So it's really, and I know it makes it challenging in your seat, but to put a blanket number on every 100 basis points equals x, it is really it really is case by case. But what I would say is that stepping back, is several 100 basis points of NOI growth. And several cents of bottom-line FFO growth.

Got it. Okay. And then for the second question, I guess, just looking across the portfolio, and I was thinking about the Madison Avenue investments, but just generally speaking, is there, like, a cap to a level of single store investment that you would make? You know, like, is it $5 million, $50 million, $100 million? Like, what should we be thinking up there? What sort of guidelines for that?

Yeah. Generally, for the streets that we're active in or most active in, it's more how small an add-on deal are we willing to do. And you see periodically, we'll do some small bolt-ons on Armitage Avenue. On the too large, you're really talking about 5th Avenue boxes, and we have been hesitant to jump into that because the outcome or the volatility of a very large single tenant acquisition and we lived out on North Michigan Avenue, the volatility is at least for a company of our size at this time, something we've always been cautious about. Worry more about us doing too many small deals than us biting one big chunky single asset deal if you're talking about a single building. If you're talking about buying a corridor and putting several 100 millions of dollars to work quickly that we would do all day long.

Thank you. Our next question coming from the line of Floris van Dijkum with Ladenburg Thalmann. Line is now open.

Hey. Thanks, guys, for taking my question. Wanted to touch on the acquisition pipeline a little bit more. I think, Reggie, you indicated it was $150 million of transactions under agreement right now. Can you give us a percentage of what is New York versus other markets?

Well, without getting too far ahead, I would say that those are the other markets. That fall into the other markets category.

Got it. Okay. So the $150 under agreement would typically be outside of New York then? Is that the right way to interpret that?

Correct.

And then, you know, one of the other things that we've seen happen in SOHO in particular, I think with Ralph Lauren and with IKEA. Buying, you know, retailers buying their own store. Are you seeing competition for transactions from retailers themselves and or have retailers indicated, you know, a desire maybe to purchase a store from your portfolio?

Hold on. I'll take that one. So, so far, and, AJ, correct me if I'm wrong. It's very rare that retailers, well, one or two have come to us. But usually, if retailers as competition, they're fairly too very selective. We tend not to, when we're working on deals, have a retailer be our competition. But I think, again, it speaks to the commitment that retailers are willing to make to these corridors. And in general, I find it encouraging. That being said, if I find we're bidding against one and we lose, then I'll be pissed. So, stay tuned.

Thank you. And I'm showing no further questions in the queue at this time. I will now turn the call back over to Mr. Bernstein for any closing remarks.

Great. Well, thank you all for the time, and we look forward to speaking to you next quarter.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation, and you may now disconnect.