Acadia Realty Plans Major Retail Expansions in Key Cities: Earnings Call

Steady gains in key retail markets such as Manhattan, Brooklyn and Dallas have Acadia Realty Trust throwing money around in those markets.

With a modest net income of $8.1 million for the third quarter, Acadia’s executives are optimistic about the market, considering it saw a net loss of $1.7 million over the same period in 2023, and the company plans to deploy funds in high-performing markets, Acadia said in its latest earnings report.

Funds from operations — another term for cash flow — amounted to $33 million in the third quarter, compared to the $26.8 million it generated in the third quarter of 2023, while its portfolio hovered around 94.7 percent leased and 91.7 percent occupied, according to the company.

A.J. Levine, head of leasing and development, announced that the company is making what it sees as a safe bet on Henderson Avenue in Dallas, where it already leases space to brands such as Warby Parker, Sprouts Farmers Market and popular Western boot brand Tecovas at 3010 North Henderson Avenue.

Acadia is putting down $100 million to build 10 buildings in a vacant section of the Henderson Avenue retail corridor, which has seen between 40 and 50 percent in rent growth since Acadia entered the market in 2022.

The development land in question was purchased with the rest of Acadia’s Henderson Avenue portfolio in 2022 and will connect two disjointed sections, adding 160,000 square feet to its existing 121,385 square feet on the thoroughfare.

“It will have a mixed-use component, but it pencils out just fine even if we were [to omit] the office piece of this … but we recognize that new development has risks, so we want to do this in phases,” Acadia President and CEO Kenneth Bernstein said during the call. “We own a lot of Henderson [Avenue] right now. We’re in fact going to add a few more existing buildings to this and this expansion. … I’m pretty confident that it is going to lift the whole Henderson Avenue.”

The Dallas announcement follows the purchases of five retail properties in the West Village from Brookfield Properties for $20.25 million in September, three other retail buildings in Williamsburg, Brooklyn, for $35 million last week, and 92-94 Greene Street in SoHo for $43.4 million earlier in October.

Mark Hallum can be reached at mhallum@commercialobserver.com.