Acadia targets 7.5%-8.5% 2026 same-property NOI growth while maintaining $1.24-$1.26 FFO guidance

• "As you can see in our press release, we had another strong quarter as the performance of our street retail portfolio continues to drive our results." (President, CEO & Trustee Kenneth Bernstein)

• "Over the last three years, market rent growth in our street retail portfolio has averaged north of 12% annually and there's no sign of this abating." (President, CEO & Trustee Bernstein)

• "We executed approximately $8.4 million in new leases with approximately 75% of that ABR coming from our street and urban markets." (A.J. Levine)

• "Those benefits played out in the third quarter, allowing us to mark-to-market six spaces on Upper Madison Avenue in SoHo and on Melrose Place at an average leasing spread of 54% and approximately 90% higher than the last time those spaces rolled to market just 5.5 years ago." (Levine)

• "Approximately $150 million of deals this quarter brings our total to $350 million for the year and $850 million over the last two years." (Executive VP & Chief Investment Officer Reginald Livingston)

• "We are routinely achieving cash yields north of 6% within three years of acquisition and north of 7% upon business plan stabilization." (Executive VP & Chief Investment Officer Livingston)

• "Same-property NOI growth of 10.2% in the third quarter." (Executive VP & CFO John Gottfried)

Outlook

• "We now expect full year same-property NOI growth of 7.5% to 8.5%." (Executive VP & CFO Gottfried)

• "For the full year, we're maintaining our FFO as adjusted of $1.24 to $1.26 per share." (Executive VP & CFO Gottfried)

• "While we're not providing guidance today" for 2027, "between our SNO pipeline and the full year impact of leases that commenced during 2026, we are looking at another strong year of same-property NOI growth from our REIT portfolio, inclusive of redevelopments." (Executive VP & CFO Gottfried)

• Analysts’ estimates were provided, but the JSON structure does not present a valid quarter format (Q1–Q4), so no guidance comparison is included.

Financial Results

• "Third quarter FFO as adjusted was $0.31 per share, up 7% from $0.29 a year ago." (Executive VP & CFO Gottfried)

• "Through the first nine months of 2026, FFO as adjusted was $0.92 per share, up nearly 10% from the $0.84 we reported during the same period last year." (Executive VP & CFO Gottfried)

• "Our streets led the way again, up more than 15%... while our stabilized suburban portfolio grew 2.5%." (Executive VP & CFO Gottfried)

• "Our SNO pipeline grew over 30% during the third quarter. It now stands at approximately $22 million of ABR at our share." (Executive VP & CFO Gottfried)

• "At its full run rate, our current SNO pipeline represents approximately $0.11 of incremental FFO... and that's up from $0.08 last quarter." (Executive VP & CFO Gottfried)

Q&A

• Craig Mailman, Citigroup Inc., Research Division: "how should we think about... offsets" to the $0.06–$0.08 SNO-driven 2027 FFO lift? Executive VP & CFO Gottfried: "in terms of known move-outs... nothing there" and "2027 feels like a strong setup."

• Samir Khanal, BofA Securities, Research Division: "provide a bit more update on North Michigan" and investment needs/earnings impact. Executive VP & CFO Gottfried: "there's a couple of penny drag in our earnings related to the taxes and carry on North Michigan." A.J. Levine: "We've seen Nike, Lululemon, Levi's all claim large chunks of space over the last 30 to 60 days" and "we're feeling really good about North Michigan Avenue as another lever of growth for us as we move into '27 and '28."

• Samir Khanal, BofA Securities, Research Division: why raise NOI outlook but keep FFO guide? Executive VP & CFO Gottfried: "we are a net seller in our investment management" and the impact is "timing."

• Floris Van Dijkum, Ladenburg Thalmann & Co. Inc., Research Division: upside to higher street occupancy and peak levels. Executive VP & CFO Gottfried: "we were in the 97% range at peak" and "meaningful growth" exists, citing Henderson Avenue, D.C., and "about 17,000 square feet of vacancy" from acquisitions. President, CEO & Trustee Bernstein: "we will get to 97%" and "These fair market value resets... is going to be significant."

• Todd Thomas, KeyBanc Capital Markets Inc., Research Division: confirm SNO contribution excludes other growth drivers. Executive VP & CFO Gottfried: "100%, that... does not include any of the items that you just mentioned…" Todd Thomas also asked about the Sunset Park loan. Executive VP & CFO Gottfried: "we were previously in a mezzanine loan position" and now "we are now -- we are the entire debt capital stack," adding "we received a $20 million payment" and expect "upon stabilization... the high single digits." On hedging, Gottfried said, "it's a floating rate loan that we will use floating rate liabilities" as a "natural match."

Sentiment Analysis

• Analysts: slightly positive, focused on durability and offsets to 2027 growth, with pointed bridge questions like "what's offsetting the greater NOI outlook here" (Samir Khanal, BofA Securities, Research Division) and downside framing around North Michigan as "currently a drag" (Samir Khanal, BofA Securities, Research Division).

• Management: positive in prepared remarks and generally confident in Q&A, using high-conviction language such as "we... head into 2027 with real conviction" (Executive VP & CFO Gottfried) and "we will get to 97%" (President, CEO & Trustee Bernstein), while characterizing rate-related impacts as "timing" (Executive VP & CFO Gottfried).

• Versus last quarter: management’s emphasis shifted from Q2’s exceptional leasing spreads and mark-to-market quantification to Q3’s raised same-property NOI outlook, larger SNO pipeline, and transaction cadence, while analysts again concentrated on occupancy/lease-up and capital markets sensitivities.

Quarter-over-Quarter Comparison

• Guidance language: Q3 explicitly raised same-property NOI guidance to "7.5% to 8.5%" (Executive VP & CFO Gottfried), while maintaining full-year FFO guidance at "$1.24 to $1.26" (Executive VP & CFO Gottfried); Q2 indicated the company "do[es] not revise" same-property guidance intra-year but said the model was "trending above the midpoint" (Executive VP & CFO Gottfried).

• Pipeline and embedded growth: Q3 SNO increased to "approximately $22 million" and "approximately $0.11" incremental FFO run rate (Executive VP & CFO Gottfried), compared with Q2 "$16.5 million" SNO and "about $0.08" incremental FFO run rate (Executive VP & CFO Gottfried).

• External growth pace: Q3 cited "$350 million for the year" of acquisitions and "$850 million over the last two years" (Executive VP & Chief Investment Officer Livingston), versus Q2 reporting "over $228 million" year-to-date REIT acquisitions (Executive VP & Chief Investment Officer Livingston).

Risks and Concerns

• "There's no doubt the recent rate increase has introduced uncertainty" and the company is watching whether it leads to "a lasting repricing." (Executive VP & Chief Investment Officer Livingston)

• Management flagged macro downside: "there's always the risk that we end up with a hard landing or some form of modern-day stagflation." (President, CEO & Trustee Bernstein)

• Interest-rate exposure was framed as limited but present: "That leaves us with about $350 million of unhedged variable rate debt." (Executive VP & CFO Gottfried)

Final Takeaway

Management described Q3 as another street-led quarter, highlighted by a raised 2026 same-property NOI growth outlook of 7.5% to 8.5% while holding full-year FFO as adjusted guidance at $1.24 to $1.26 per share. Executives tied near-term earnings momentum to a record-high SNO pipeline of approximately $22 million of ABR (about $0.11 of incremental FFO at full run rate) alongside continued corridor-scale acquisitions, while acknowledging rate volatility, investment-management disposition timing, and specific lease-up drags such as North Michigan taxes and carry.

Read the full Earnings Call Transcript

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