Thank you for being on the line, and welcome to Acadia Realty Trust's Fourth Quarter 2024 Earnings Conference Call. I will now turn the call over to Devin Russell, Manager of Accounts Receivable and Lease Administration. Please proceed.

Good morning and thank you for joining us for the fourth quarter 2024 Acadia Realty Trust earnings conference call. My name is Devin Russell and I'm an Accounts Receivable Manager in our Lease Administration Department. Before we begin, please be aware that statements made during the call that are not historical may be deemed forward-looking statements within the meaning of the Securities and Exchange Act of 1934 and 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-K and other periodic filings with the SEC, forward-looking statements speak only as of the date of this call, February 12, 2025, and 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 to give everyone the opportunity to participate. You may ask further questions by reinserting yourself into the queue, and we will answer as time permits. Now, it is my pleasure to turn the call over to Ken Bernstein, President and Chief Executive Officer, who will begin today's management remarks.

Thank you, Devin. Great job. Welcome, everyone. I'll give a few comments before handing the remarks over to A.J. And then since we have been highly active on the acquisition front and expect to continue to do so, I have asked our CIO, Reggie Livingston, to discuss our investment activity. And then finally, John will tie it all together in connection with our earnings guidance, our balance sheet metrics, and our outlook for the year. As you can see from our earnings release, we had a busy and productive quarter, both with respect to the performance of our existing portfolio as well as a ramp-up of our investment activity. In light of the progress we made throughout the year, we are setting up for a strong 2025. We are not ignoring the impact on valuations from a higher-yielding bond market nor the increasing likelihood of a higher-for-longer interest rate and inflationary environment. To the extent that these headwinds are due at least in part to a stronger-than-forecasted economy, this growth should result in stronger tenant top-line growth, which then translates into rental growth. Our goal has been to own the kind of retail portfolio that is best-positioned to capture this corresponding growth sooner rather than later. The street retail portion of our portfolio, which now represents the majority of our Core Portfolio, has proven to be the best segment to capture this growth. We have delivered over 5% same-store NOI growth for each of the last three years, most significantly driven by our street retail performance. Looking forward, we believe this segment will continue to produce the highest net effective growth and the highest risk-adjusted returns in the open-air sector. The drivers of this outperformance come from strong contractual growth, lower CapEx, fair market value resets, a shift in retailing away from wholesale and into individual stores, the halo benefits from these stores in an omnichannel world, and increasing retailer demand with limited supply. With these trends in mind, our focus has been to position Acadia to be the dominant owner-operator of street retail in the United States with both appropriate scale and concentration to continue driving the growth we have delivered over the past few years. You've seen us use this scale and synergies to drive outsized growth in existing markets such as Armitage Avenue in Chicago. Along with our recent acquisitions, we are building similar powerful scale and concentrations in Georgetown in Washington D.C., SoHo, Williamsburg and Bleecker Street in New York, and Henderson Avenue in Dallas. It is becoming clear that for all open-air retail, but especially for street retail, this continued retailer demand is not just a cyclical recovery. There are longer-term positive trends at play and we are capturing more than our fair share of these trends. That is not to say that retail is immune to gravity. Some segments of consumers are stretched thin, and we see the reemergence of some retailer weakness in bankruptcies concentrated with certain junior anchor retailers in the suburban shopping center portion of our portfolio. But tenant demand seems to exceed this new shadow supply. From our perspective, the tailwinds still far exceed the headwinds. In complementing our strong internal growth, our acquisitions last year are playing an increasingly important role in our long-term growth. Reggie will discuss the details of our acquisition activity, and John will discuss our successful match funding for this activity. In summary, as we think about 2025 and beyond, we remain very bullish in our ability to continue to add value by driving internal growth, maintaining a strong and flexible balance sheet, and adding additional growth through strategic new investments. I want to thank the team for their hard work last quarter and last year and their success. And now, I'll turn the call over to A.J.

Great. Thank you, Ken. Good morning, everyone. First, I want to echo Ken by congratulating the team for another strong quarter of leasing, signing another $3 million of ABR and capping off a record year where we signed over 50 new leases totaling over $13.5 million of annual rent, or the equivalent of nearly 10% of our total ABR. Overall spreads for the year totaled approximately 35%, with our high-growth streets leading the charge. We successfully executed our strategy of adding and extending category-leading tenants like Mango, Swarovski, Brandy Melville, Tesla, lululemon, and J.Crew. We continued to strategically replace under-market and underperforming tenants to accelerate rent growth, improve merchandising and credit, and help us better navigate any future volatility. The majority of our growth will come from our streets, but we're also seeing solid demand and stability from our suburban portfolio. Our high-growth streets continue to outperform the overall market. For example, in SoHo, our advanced contemporary tenants reported year-over-year sales growth in excess of 15%, and we saw consistent double-digit sales growth on M Street, Williamsburg, Madison Avenue, Armitage Avenue, and the Gold Coast of Chicago. Those are just a few examples. Overall, we continue to see strong retail fundamentals, and our tenants show no signs of slowing down. What’s driving this growth and performance? First and foremost, our luxury advanced contemporary and higher-priced specialty shoppers overwhelmingly prefer open-air and direct-to-consumer experiences. As a result, our tenants are pivoting away from wholesale and department stores and toward our high-growth, high-traffic streets. Retailers like ZIMMERMANN, STAUD, Alo Yoga, Vuori, and Madewell recognize the clear benefits of direct-to-consumer (DTC) where they can best control customer interaction, brand messaging, pricing and co-tenancy. It's also clear that the halo effect is a very real force for growth. The store remains the most profitable channel for our retailers, and the opening or renovation of stores significantly and quantifiably impacts overall brand performance. When layering the halo effect with our healthy rent-to-sales ratios, which are still below historic norms, we see tenants that can pay higher rents and withstand market fluctuations. Our ability to use our scale and geographic reach to drive rents and improve merchandising on our streets is crucial. Occupancy costs for apparel tenants on M Street hover just above 12%, and with sales growth outpacing inflation, there's significant room for an experienced owner with meaningful scale to capture outsized rent growth. Our strategy is to become the largest institutional owner in key demanded markets as we have market penetration in SoHo, Williamsburg, the Gold Coast of Chicago, Melrose Place in LA, and Knox-Henderson in Dallas. We are confident our focused approach will keep driving growth on our streets, as our tenants remain active and focused on long-term growth. Even in our slower-to-recover markets like Michigan Avenue, we're seeing seeds planted from the past bearing fruit. We capture shares by signing brands like Alo Yoga and Mango and are welcoming tenants like Aritzia and UNIQLO to some of our neighboring assets. In summary, we remain encouraged by the growth and activity we see and see no signs of a slowdown on the horizon. I now pass things off to Reggie.

Thanks, A.J. Good morning, everyone. I'm excited to share specifics about our 2024 and year-to-date acquisition activity and provide insight into how we're positioning the company for continued growth across our platforms. In the second half of the year, we had one of the busiest periods on record with more than $600 million of transactions split evenly between our Core and Investment Management businesses. More importantly, we hit on all cylinders by adding Core Portfolio assets that delivered accretion at our $0.01 per $200 million target with an attractive going-in GAAP yield in the mid-6s and a five-year CAGR exceeding 7%. We added assets that upgraded the quality of our portfolio through transactions accretive to NAV and increased our concentration in key supply-constrained markets that are must-have locations for our retailers. For example, in Georgetown, we acquired an additional 48% interest in a portfolio of 18 properties, increasing our ownership stake to 68%. With this investment, we are now the landlord of choice in the top street retail market in D.C. While D.C. may still be in early recovery stages, M Street tenant sales have exceeded prior peaks with space for rent growth. In SoHo, we strategically purchased over $120 million of assets, half from off-market transactions, reinforcing our efforts in this desirable submarket. Our total holdings in SoHo have risen to 20 storefronts, making us one of the largest institutional landlords there. We're also seeing great potential in our acquisitions across key markets like Bleecker Street in the West Village and Williamsburg in Brooklyn. In this market, for instance, we invested over $50 million, including a small parcel where we intend to build an additional storefront. This mix of below-market leases, credit tenants, and leasable vacancy provides optimal yield and growth. On our Investment Management Platform, we executed two joint ventures in the fourth quarter, one with TPG Real Estate to acquire the LINQ Promenade in Las Vegas. This open-air destination offers retail, dining, and entertainment options with re-leasing potential. Overall, 2024 and year-to-date have been periods of strategic growth and disciplined execution. I want to thank the team for their hard work and dedication to our external growth execution last year. I now turn it over to John.

Thanks, Reggie, and good morning. Before diving in, I want to highlight our team's accomplishments over the past year and how those efforts are driving our results in 2025 and beyond. Driven by the strength of our street retail portfolio, our same-store NOI grew by 5.7% for both the quarter and the full year. We see these trends continuing with 5% to 6% same-store growth projected in 2025 and in the years following, particularly considering the 7+% NOI growth Reggie highlighted from the new street retail additions completed this past quarter. This growth is driving our bottom line earnings, with year-over-year FFO growth at 5% in 2024 and anticipated growth of 5.5% in 2025. It is essential to note that this 5.5% expected growth in 2025 is before including any further external acquisitions. We achieved our balance sheet goals, raising approximately $740 million in common equity and completing over $1 billion in secured and unsecured debt transactions. We accomplished this without diluting our earnings while investing over $600 million in gross asset value. Our fourth-quarter earnings came in at $0.32 a share, representing year-over-year growth of approximately 15%. This result was impacted by the timing of our equity raise and the closing of acquisitions in our pipeline. However, January's deals align us with our 2025 earnings goals. Our same-store NOI grew by 5.7% for the quarter, primarily driven by over 12% growth from our street retail portfolio, aided by 3% contractual growth built into our leases, occupancy gains, and significant mark-to-market spreads achieved on new leases. Our Core physical occupancy increased by 140 basis points, driven by $5 million of ABR coming online during the quarter, which included $1.5 million of mark-to-market spreads from new leases. Looking at our signed not-yet-open pipeline, which was $7.7 million at December 31, this represents over 5% of our Core ABR. We expect all of this to commence at some point in 2025, contributing about $4 million in incremental ABR in that year. Our initial guidance for 2025 stands at $1.35 at the midpoint, with projected growth of 5.5% over 2024. We should expect occupancy gains, and our mix favors higher dollar street tenants with much room for further growth. In terms of capital allocation, our focus is on sourcing compelling acquisitions with strong growth potential. As we begin 2025 with robust internal growth alongside available capital, we feel well-positioned to exceed expectations in the coming years. Now, I'll turn it back to the operator for questions.

Our first question comes from Linda Tsai of Jefferies. Please go ahead with your question, Linda.

Thank you. How do you think about the concept of scale in your street portfolio? How do you build it, and how do you know when you're achieving it? Are there certain metrics or indicators?

Yes. So let me add a little color to it because I'm the one who brought it up, and then A.J., maybe you could add some numbers in context. Scale works when we own the right assets in the right corridors. If you own just a generic portfolio of assets, I'm not sure scale does that much benefit. Where we own in these key corridors, we see our ability to drive rents and better curate the corridors. The acquisitions we have made have to stand on their own individually, must be accretive, and check all the boxes, irrespective of long-term scale. A.J., why don't you add some thoughts to that?

Sure. In terms of quantifying it, and of course, it's going to depend on the market, right? Generally, I'd attribute about 10% to the upside in terms of rent growth when you have significant scale. We've obviously seen what happened in Armitage Avenue, where we exceeded that 10%. This isn't about convincing tenants to overpay; it's about curation, improving co-tenancy, promoting sales growth, and increasing traffic. Rent is a byproduct of all of that, and combination of scale, experience, access to capital, and access to data all play into the equation.

Thanks. And in terms of acquisition volume in 2025, what is the percentage split of Core and Investment Management, and how are you thinking about the opportunity set?

Hi, Linda. So big picture, from a Core standpoint, we believe there's no reason we can't duplicate what we did last year. For the Investment Management Platform, it's more opportunistic, making it harder to give guidance because we only pursue deals that make sense and can deliver outsized returns.

Hi, thanks. Good morning, guys.

Good morning.

Good morning. I'm curious about your low occupancy in your street and urban portfolio of 90.6%. Can you discuss the average rents, which seem to be around $81? What would be the effect of a 1% increase in your occupancy? Also, what was the peak occupancy for your street and urban properties in previous cycles?

Hi, good morning, Floris. Our peak occupancy was in the 97% range. We are peaking in that guide at around 94% to 95%. But it really depends on the lease and the space rented. While our overall occupancy is 95.8%, our higher dollar urban portfolio is around 90% leased, indicating a lot of growth potential.

In terms of acquisitions, while there's increased competition for open-air retail, the growth profile still stands at an attractive basis and growth potential.

As sellers are coming to market and competition increases, we're seeing more sellers show up. While there's competition, it emphasizes our reputation and relationships, which ensures we can operate effectively and efficiently in this dynamic environment.

Your guidance range is somewhat wide. Could you discuss in more detail the other factors that could drive 2025 to the top or bottom of that range? John, you mentioned credit.

We anticipate strong trends in our Core NOI with narrow ranges. External growth promotes variability, especially around opportunities in various funds.

We feel confident that at the high end of our guidance range could include external growth. Our external growth opportunities are shaping up positively.

Could you just talk about the going-in yields for your acquisitions in 4Q and what those might stabilize to in the next couple of years?

We expect a GAAP yield going-in of mid-6s, stabilizing in the 7s from a cash yield perspective and with a CAGR of 7%.

Given your comments around street retail pricing, the math of $200 million of Core investments equates to about $0.01 per share of FFO. Is that math today any different?

Pricing adjusts frequently and we anticipate interesting buying opportunities due to market volatility, but overall it remains competitive.

I know you guys aren't talking about potential pipeline here of deals you're underwriting, but with $275 million of forward capital available, how quickly could you potentially deploy that?

Looking ahead, we have the capital on call and we're seeing deal flow. We will proceed with caution and ensure these acquisitions check all the right boxes before closing.

Thank you. I would now like to turn the conference back to Ken Bernstein for closing remarks.

Thank you all for joining us. We look forward to speaking with you next quarter.

This concludes today's conference call. Thank you for participating. You may now disconnect.