Acadia Realty Trust Braces for Retail Distress From Tariffs, Remains Opportunistic

The threat of President Donald Trump’s tariff war and its impact on the retail market consumed a good chunk of Acadia Realty Trust’s first-quarter earnings call Wednesday.

The real estate investment trust saw occupancy and leasing slip in its retail portfolio by 30 and 140 basis points, respectively, in the first quarter of 2025, and left investors asking how it plans to navigate the uncertainty caused by tariffs.

The short answer is that the company is not making any sudden movements. Plus, it might be a blessing in disguise, as Acadia has a strong balance sheet, cash on hand and willingness to jump on discounted investments that could arise in the future.

“We don’t wish for this current volatility, but it is very likely to create some additional buying opportunities for our street retail investment and our investment management platform,” Acadia CEO Kenneth Bernstein said during its Wednesday earnings call. “What the data is telling us — and, just as importantly, what our tenants are telling us — is that our core consumer continues to spend, and there has been no meaningful change in plans around long-term growth.”

Nevertheless, Bernstein said Acadia is scrutinizing every new lease to assess the tenant’s exposure to tariffs, namely from China.

While the market volatility, including a dive in consumer confidence — currently at a five-year low — played out through the first quarter and has continued into the second, Acadia bought about $373 million in assets including 95, 97 and 107 North Sixth Street in Williamsburg, Brooklyn, for $61 million and 85 Fifth Avenue in the Flatiron District for $47 million.

Funds from operations amounted to $43.4 million in the first quarter, an increase from the $37 million it recorded in the fourth quarter of 2024. 

Tourism declines resulting from global political tensions around tariffs also haven’t impacted retail sales, apart from Canadians making fewer trips below the 48th parallel, partly because tourism revenue in Acadia’s portfolio still has not fully recovered from the pandemic, a “future tailwind” the REIT isn’t holding its breath for.

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