Q3 2025 Acadia Realty Trust Earnings Call

Operator: Ladies and gentlemen, thank you for standing by. Welcome to the third quarter 2025 Acadia Realty Trust earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one one on your telephone. If your question has been answered and you would like to remove yourself from the queue, press star one one again. We ask you to limit to one question and one follow-up, and you may get back in the queue as time allows. Please be advised that today's conference is being recorded. I would now like to turn the conference over to Gabriella Vitello, Junior Lease Admin Analyst. Please go ahead.

Speaker #2: Ladies and gentlemen , thank you for standing by . Welcome to the third quarter , 2025 Acadia Realty Trust Earnings Conference Call . At this time , all participants are in a listen only mode .

Speaker #2: After the speakers presentation , there will be a question and answer session . To ask a question during this session , you would need to press star one one on your telephone .

Speaker #2: If your question has been answered and you would like to remove yourself from the queue, press star one one again. We ask you to limit yourself to one question and one follow-up.

Speaker #2: And you may get back in the queue as time allows . Please be advised that today's conference is being recorded . I would now like to turn the conference over to Gabriella Vitullo , junior Lease admin Analyst .

Speaker #2: Please go ahead .

Gabriella Vitello: Good afternoon, and thank you for joining us for the third quarter 2025 Acadia Realty Trust earnings conference call. My name is Gabriella Vitello, and I am a Junior Lease Administration Analyst in our Lease Administration Department. Before we begin, please be aware that the statements made during the call that are not historical may be deemed forward-looking statements within the meaning of the Securities and Exchange Acts 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-K and other periodic filings with the SEC. Forward-looking statements speak only as of the date of this call, October 29, 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.

Speaker #3: Good afternoon, and thank you for joining us for the third quarter 2025 Acadia Realty Trust Earnings Conference Call. My name is Gabriella Vitello, and I am a junior lease administration analyst.

Speaker #3: And Alisa Administration department . Before we begin , please be aware that the 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 .

Speaker #3: An 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 .

Speaker #3: Forward looking statements speak only as of the date of this call . October 29th , 2025 , and the company undertakes no duty to update them .

Speaker #3: 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.

Gabriella Vitello: 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'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.

Speaker #3: 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.

Speaker #3: You may ask further questions by reinserting yourself into the queue , and we will 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 .

Ken Bernstein: Thank you, Gabriella. Great job. Welcome, everyone. Last quarter, I commented that in the ongoing tug of war between economic uncertainty and resilience, resilience seemed to be winning. Looking at our third quarter results, this continues to be the case. Notwithstanding continued noise and uncertainty around the broader economy, tenant performance, and tenant demand at our properties, especially the street retail component, is continuing, and if anything, this positive momentum is accelerating. In fact, we are probably at an inflection point for our portfolio's operating performance. As John Gottfried will explain, as we look at our forecast for 2026, we see both total NOI growth and same-store growth accelerating, keeping us well above our long-term goal of 5% growth. We remain focused on making sure that this top-line growth hits the bottom line with respect to our earnings. As A.J.

Speaker #4: Thank you Gabriella . Great job . Welcome , everyone . Last quarter , I commented that in the ongoing tug of war between economic uncertainty and resilience , resilience seemed to be winning .

Speaker #4: Well , looking at our third quarter results , this continues to be the case . Notwithstanding continued noise and uncertainty around the broader economy .

Speaker #4: Tenant performance and tenant demand at our properties , especially the street retail component , is continuing . And if anything , this positive momentum is accelerating .

Speaker #4: In fact, we are probably at an inflection point for our portfolio's operating performance, as John Gottfried will explain, as we look at our forecasts for 2026.

Speaker #4: We see both total NOI growth and same store growth accelerating , keeping us well above our long term goal of 5% growth . And we remain focused on making sure that this top line growth hits the bottom line .

Speaker #4: With respect to our earnings, as A.J. Levine will discuss, we see enough internal growth opportunities beginning to take shape to enable us to maintain this 5% plus annual growth.

Ken Bernstein: Levine will discuss, we see enough internal growth opportunities beginning to take shape to enable us to maintain this 5% plus annual growth well into the foreseeable future. A.J. will walk through in detail our continued progress in the third quarter. In short, we were busy both harvesting current opportunities as well as planting seeds for longer-term internal growth. This includes realizing a 45% lease spread in Soho, a 70% mark-to-market on Bleecker Street, while successfully opening new stores representing nearly $7 million from our S&O pipeline and then positioning us for future growth. We also added nearly $4 million in new leases into our S&O pipeline. I discussed in detail on previous calls the tailwinds for open-air retail demand. They are still continuing and remain encouraging both for our suburban and our street retail portfolio.

Speaker #4: Well into the foreseeable future . Ajay will walk through in detail our continued progress in the third quarter , but in short , we were busy both harvesting current opportunities as well as planting seeds for longer term internal growth .

Speaker #4: This includes realizing a 45% lease spread in Soho , a 70% mark to market on Bleecker Street , while successfully opening new stores representing nearly $7 million from our snow pipeline .

Speaker #4: And then positioning us for future growth . We also added nearly $4 million in new leases into our snow pipeline . I discussed in detail on previous calls the tailwinds for open air retail demand .

Speaker #4: They are still continuing and remain encouraging, both for our suburban and our street retail portfolio. However, the tailwinds for our street retail portfolio seem to have even more momentum for a few reasons.

Ken Bernstein: The tailwinds for our street retail portfolio seem to have even more momentum for a few reasons. First is the longer-term secular trend of retailers recognizing the critical need to establish their own network of stores, what we refer to as DTC or direct-to-consumer stores. This trend is increasing the demand from mission-critical locations, especially in the key markets where we are most active. Second is the continued resilience and increasing importance of the affluent consumer, who are the majority of the shoppers at our street locations. Third, and perhaps most encouraging, is the noticeable resurgence of foot traffic and energy on these streets. This energy and excitement was on full display earlier this month at Kith's grand opening at our Walker Street property in the Gold Coast of Chicago. Hundreds of eager customers waited in line for hours to shop this exciting 10,000 square foot flagship store.

Speaker #4: First is , the longer term secular trend of retailers recognizing the critical need to establish their own network of stores . What we refer to as DTC or direct to consumer stores .

Speaker #4: This trend is increasing the demand for mission critical locations , especially in the key markets where we are most active . Second is the continued resilience and increasing importance of the affluent consumer .

Speaker #4: Who are the majority of the shoppers at our street locations . And then third , and perhaps most encouraging is the noticeable resurgence of foot traffic and energy on these streets .

Speaker #4: This energy and excitement was on full display earlier this month at Keith's grand opening at our Walton Street property in the Gulf Coast of Chicago.

Speaker #4: Hundreds of eager customers waited on line for hours to shop this exciting 10,000 square foot flagship store . If you've recently shopped the Gold Coast to Chicago and were impressed by what you saw , you're not alone .

Ken Bernstein: If you recently shopped the Gold Coast of Chicago and were impressed by what you saw, you're not alone. Our team consistently hears from investors after touring a given city how they did not appreciate the vibrancy that is occurring until they saw it firsthand. If you've not toured some of these markets and are simply relying on your newsfeed, especially depending on what cable channel you watch, you are missing out on the power of these retail markets. Thankfully, our retailers get this. This is why Melrose Place in LA or Green Street in Soho are experiencing the continued tailwinds well in excess of our expectations. It is expanding beyond a few major markets and in ways that might surprise you.

Speaker #4: Our team consistently hears from investors after touring a given city how they did not appreciate the vibrancy that is occurring until they saw it firsthand.

Speaker #4: And if you've not toured some of these markets and are simply relying on your newsfeed , especially depending on what cable channel you watch , you are missing out on the power of these retail markets .

Speaker #4: Thankfully , our retailers get this . This is why Melrose Place in LA or Greene Street in Soho are experiencing the continued tailwinds .

Speaker #4: Well in excess of our expectations. And it is expanding beyond a few major markets and in ways that might surprise you. For instance, in Georgetown in D.C.

Ken Bernstein: For instance, in Georgetown, in D.C., notwithstanding all of the attention and concern around Washington, D.C., and surrounding markets due to DOJ or government shutdowns, for the majority of our retailers on M Street, foot traffic and sales are up year over year, and tenant demand has not been this strong in a decade. New York experienced this rebound earlier than most markets, but now we are seeing this play out across all of our urban markets. San Francisco is the most recent example of this momentum, driven by the growth in artificial intelligence, accelerating a return to office, and a new mayor who is making important progress on quality of life issues that had burdened the city coming out of COVID. What we are seeing on the ground is that the live, work, play vibrancy that San Francisco has historically enjoyed is coming back, and so are our retailers.

Speaker #4: , notwithstanding , all of the attention and concern around Washington , D.C. and surrounding markets due to dosage or government shutdowns for the majority of our retailers on M Street , foot traffic and sales are up year over year , and tenant demand has not been this strong in a decade .

Speaker #4: New York experienced this rebound earlier than most markets , but now we are seeing this play out across all of our urban markets .

Speaker #4: San Francisco is the most recent example of this momentum , driven by the growth in artificial intelligence , accelerating a return to office and a new mayor who is making important progress on quality of life issues that had burdened the city coming out of Covid and what we are seeing on the ground is that the live work , play vibrancy that San Francisco has historically enjoyed is coming back .

Speaker #4: And so are our retailers that resurgence is coming at the right time for our two significant San Francisco redevelopment projects at City Center.

Ken Bernstein: That resurgence is coming at the right time for our two significant San Francisco redevelopment projects. At City Center, we have our new TNT Supermarket slated to open in late 2026. At our 555 Ninth Street redevelopment, we recently expanded our Trader Joe’s and have a new lease with LA Fitness's high-end Club Studio slated to open next year. On a combined basis, these two projects have close to 100,000 square feet of additional space for us to lease and are slated to add roughly 5% to our REIT NOI. If the positive momentum continues, we'll have even more growth. Along with continuing to drive our internal growth, a key additional driver of our business is adding accretive and complementary external growth, both on balance sheet and then through our investment management platform.

Speaker #4: We have our new TNT supermarket slated to open in late 2026, and at our 555 Ninth Street redevelopment, we recently expanded our Trader Joe's and have a new lease with LA Fitness's high-end club studio, slated to open next year on a combined basis.

Speaker #4: These two projects have close to 100,000ft² of additional space for us to lease , and are slated to add roughly 5% to our read NOI .

Speaker #4: And if the positive momentum continues , we'll have even more growth . Long with continuing to drive our internal growth . A key additional driver of our business is adding accretive and complementary external growth , both on balance sheet and then through our investment management platform .

Ken Bernstein: While we saw a bit of a pause in investment activity around Liberation Day concerns, based on the current status of our pipeline, we are now confident that our 2025 investment activity will match the strength of 2024, which was also a great year for us in terms of external growth. Reggie will walk through our transactions closed last quarter and the opportunities we see going forward. To reiterate our goals and outlook, given our size, we see our acquisition activity continuing to enable us to move the needle. While our cost of capital increased some last quarter, we are confident that we can still invest accretively, and we will. For our on-balance sheet street retail investments, this confidence is due to a few factors. First, Acadia Realty Trust is in somewhat of a unique position of being a buyer of choice.

Speaker #4: While we saw a bit of a pause in investment activity around Liberation Day, concerns based on the current status of our pipeline, we are now confident that our 2025 investment activity will match the strength of 2024, which was also a great year for us in terms of external growth.

Speaker #4: Reggie will walk through our transactions closed last quarter and the opportunities we see going forward. But to reiterate our goals and outlook, given our size, we see our acquisition activity continuing to enable us to move the needle.

Speaker #4: And while our cost of capital increased , some last quarter , we are confident that we can still invest creatively and we will for our on balance street balance sheet .

Speaker #4: Street retail investments. This confidence is due to a few factors. First, Acadia is in somewhat of a unique position of being a buyer of choice.

Ken Bernstein: There are certainly private market participants that are active competitors, but we have carved out a niche and a reputation that gives us a competitive advantage in the street retail space, an advantage that does not exist in other segments of open-air retail where there are too many well-capitalized private participants for any one public or private player to have a unique advantage. Along with being a buyer of choice, many retailers view us as a landlord of choice, and they are steering acquisition opportunities our way as well. As we discussed on the last call, the scale that we continue to build, both in terms of ownership concentration in a given corridor as well as tenant relationships nationwide, is giving us increased visibility into the accretion potential we can achieve in any given investment and providing us a competitive advantage over other bidders.

Speaker #4: There are certainly private market participants that are active competitors , but we have carved out a niche and a reputation that gives us a competitive advantage in the street retail space and advantage that does not exist in other segments of open air retail , where there are too many well-capitalized private participants for any one public or private player to have a unique advantage .

Speaker #4: Second, along with being a buyer of choice, many retailers view us as a landlord of choice, and they are steering acquisition opportunities our way as well.

Speaker #4: And then finally , as we discussed on the last call , the scale that we continue to build , both in terms of ownership concentration in a given corridor as well as tenant relationships nationwide , is giving us increased visibility into the accretion potential we can achieve in any given investment .

Speaker #4: And providing us a competitive advantage over other bidders . All of this makes us uniquely well positioned to continue to attractively add street retail to our portfolio , and it provides further support for why we are focused on building Acadia into the premier owner operator of street retail in the US .

Ken Bernstein: All of this makes us uniquely well-positioned to continue to attractively add street retail to our portfolio, and it provides further support for why we are focused on building Acadia Realty Trust into the premier owner-operator of street retail in the U.S. For our investment management platform, the volatility in the REIT market is less of an issue. Perhaps it's even a tailwind since we rely on our institutional partners for the majority of the capital and are generally recycling our equity in this complementary and profitable buy-fix-sell arm of our business. In conclusion, as we look forward, our peer-leading internal growth looks like it has several years of tailwinds behind it. Coupled with continued strong external growth and a balance sheet with multiple avenues of access to capital, we are well-positioned to absorb any speed bumps and, more importantly, capitalize on the exciting opportunities in front of us.

Speaker #4: Then , for our investment management platform , the volatility in the REIT market is less of an issue . Perhaps it's even a tailwind since we rely on our institutional partners for the majority of the capital and are generally recycling our equity in this complementary and profitable by fix sell arm of our business .

Speaker #4: So in conclusion , as we look forward , our peer leading internal growth looks like it has several years of tailwinds behind it , coupled with continued strong external growth and a balance sheet with multiple avenues of access to capital .

Speaker #4: We are well positioned to absorb any speed bumps and more importantly , capitalize on the existing exciting opportunities in front of us . I'd like to thank the team for their continued hard work , and with that , I will hand the call over to A.J.

Ken Bernstein: I'd like to thank the team for their continued hard work, and with that, I will hand the call over to A.J. Levine.

Speaker #4: Levine .

A.J. Levine: Thanks, Ken. Hi, everybody. Good afternoon. Jumping right in, I'm happy to report another successful and productive quarter of leasing, with the team executing on another $3.7 million in AVR and bringing total signed leases year to date to $11.4 million, keeping us well ahead of last year's record-setting pace. To put that into some context, for every $1.4 million of new revenue we add, that equates to about a penny of FFO. Overall GAAP spreads for new and renewal leases on our streets were 32%. Looking forward, we've seen no signs of a slowdown in tenant demand. In addition to the leases we signed during the quarter, we've increased the size of our lease negotiation pipeline to $8 million, which is $1 million ahead of where we were at the end of Q2.

Speaker #5: Thanks , Ken . Hi , everybody . Good afternoon . So jumping right in . I'm happy to report another successful and productive quarter of leasing with the team executing on another $3.7 million in ABR and bringing total signed leases year to date to 11.4 million , keeping us well ahead of last year's record setting pace .

Speaker #5: To put that into some context , for every $1.4 million of new revenue , we add , that equates to about a penny of FFO , and overall GAAP spreads for new and renewal leases on our streets were 32% .

Speaker #5: Looking forward , we've seen no signs of a slowdown in tenant demand . And in addition to the leases we signed during the quarter , we've increased the size of our lease negotiation pipeline to $8 million , which is $1 million ahead of where we were at the end of Q2 .

A.J. Levine: In short, that translates to an increase in leasing velocity fueled by pending new leases on North 6th Street in Williamsburg, Newbury Street in Boston, and on Melrose Place in Los Angeles, all markets where we will see the highest level of contractual growth at 3% per annum. The pipeline also includes another impactful deal in San Francisco, where so far this year we've executed on over 90,000 square feet, including new leases with TNT Supermarket, LA Fitness Club Studio, and a long-term renewal and expansion of Trader Joe’s. John will get into the details of our S&O pipeline, but in Q3, we converted approximately $7 million of AVR from S&O to open and paying tenants.

Speaker #5: In short , that translates to an increase in leasing velocity fueled by pending new leases on North Sixth Street in Williamsburg , Newbury Street in Boston , and on Melrose Place in Los Angeles .

Speaker #5: All markets where we will see the highest level of contractual growth at 3% per annum . The pipeline also includes another impactful deal in San Francisco , where so far this year we've executed on over 90,000ft² , including new leases with TNT supermarkets , LA Fitness Club , Studio and a long term renewal and expansion of Trader Joe's .

Speaker #5: John will get into the details of our snow pipeline , but in Q3 we converted approximately $7 million of ABR from snow to open and paying tenants impactful openings from the quarter included the Richemont brand , Watchfinder , John Varvatos and Alex Moss , all in Soho .

A.J. Levine: Impactful openings from the quarter included the Richemont brand Watchfinder, John Varvatos, and Alex Moss all in Soho, Kith on the Gold Coast of Chicago, Moscott on Armitage Avenue, and J.Crew on M Street in Washington, D.C. This is not just leasing and delivering space. In addition to filling vacancies, we are prying loose and profitably backfilling space while improving the curation and merchandising along our high-growth streets. In the third quarter, we pried loose and replaced four tenants in high-growth markets, including M Street, Williamsburg, Bleecker Street, and Soho, at an average GAAP spread of 36%. Each of those leases is subject to 3% contractual increases and the opportunity to once again mark to market in the relative near term through FMV resets.

Speaker #5: Kith on the Gold Coast of Chicago , Moscow on Armitage Avenue and J crew on M Street in D.C. but this is not just leasing and delivering space .

Speaker #5: In addition to filling vacancies , we are prying loose and profitably backfilling space while improving the curation and merchandising along our high growth streets .

Speaker #5: In the third quarter , we pried loose and replaced four tenants in high growth markets , including M Street Williamsburg , Bleecker Street and Soho .

Speaker #5: At an average gap spread of 36% . Each of those leases is subject to 3% contractual increases , and the opportunity to once again mark to market in the relative near term through FMV resets during the quarter , we added expanded or renewed some highly coveted brands , including Veronica Beard , Faherty , Theory and Frame Denim .

A.J. Levine: During the quarter, we added, expanded, or renewed some highly coveted brands, including Veronica Beard, Fayardi, Theory, and Frame Denim, again all in Soho, Cézanne on M Street, Dowen on Bleecker Street, Tacovas on Henderson, and Practice Room in Williamsburg, just to name a few. I'm also happy to report that momentum on Henderson Avenue in Dallas continues to build, and the redevelopment is ahead of pro forma. Over 60% of the retail is spoken for with some of today's most recognizable and coveted brands, several of which you will find elsewhere in our portfolio on Armitage Avenue, the Gold Coast of Chicago, in Soho, and on Melrose Place. What's become clear over the last several quarters is that our strategy of building scale in must-have street markets means that our team is getting the first call, the early call, and the urgent calls.

Speaker #5: Again , all in Soho , Cezanne on M Street , Dolan on Bleecker Street , Tecovas on Henderson , and Practice Room in Williamsburg , just to name a few .

Speaker #5: I'm also happy to report that momentum on Henderson Avenue in Dallas continues to build, and the redevelopment is ahead of pro forma.

Speaker #5: Over 60% of the retail space is spoken for, with some of today's most recognizable and coveted brands, several of which you will find elsewhere in our portfolio.

Speaker #5: On Armitage Avenue , the Gold Coast of Chicago , in Soho and on Melrose Place . What's become clear over the last several quarters is that our strategy of building scale in must have street markets means that our team is getting the first call , the early call and the urgent calls .

A.J. Levine: Our recent lease with Cézanne on M Street is a perfect example of our first call advantage. Like many recent negotiations, this one started with the simple question, "Where can you put me?" As the largest owner of retail on M Street, Cézanne knew that we were the right landlord to help them find a long-term home in Georgetown. True to form, we were able to pry loose an undermarket tenant, increase the rent by double digits, and upgrade the overall curation of the street. Historically tight supply means that tenant calls are coming in early, sometimes 12 to 15 months before a space will become available. We are currently in active negotiations with tenants on Melrose, in Soho, and on North 6th Street for space with expirations that are all more than 12 months out.

Speaker #5: Our recent lease with Cezanne and M Street is a perfect example of our first-call advantage. Like many recent negotiations, this one started with the simple question: "Where can you put me as the largest owner of retail on M Street?"

Speaker #5: Cezanne knew that we were the right landlord to help them find a long-term home in Georgetown. And true to form, we were able to.

Speaker #5: Pry loose and under market tenant , increased the rent by double digits and upgrade the overall curation of the street . Historically , tight supply means that tenant calls are coming in early , sometimes 12 to 15 months before a space will become available .

Speaker #5: We are currently in active negotiations with tenants on Melrose in Soho and on North sixth Street for space with expirations that are all more than 12 months out .

A.J. Levine: Finally, the strong sales performance we continue to see on our streets is creating a sense of urgency amongst our tenants. There is a very real fear among tenants of missing out on the incredible sales growth that our highest earning consumers are continuing to drive on our streets. From reporting tenants on our streets, year-to-date comparable soft goods and apparel sales continue to outperform. In Soho, sales are up 15%. On Bleecker Street, north of 30%. On the Gold Coast of Chicago, driven largely by an accelerated recovery on North Michigan Avenue, sales are up over 40%. Even on State Street in downtown Chicago, which has certainly felt the effects of hybrid work over the last several years, we are seeing the early signs of a strong recovery, with sales in our portfolio up over 10% year to date, with one flagship tenant in particular up over 20%.

Speaker #5: And finally , the strong sales performance we continue to see on our streets is creating a sense of urgency amongst our tenants . There is a very real fear among tenants of missing out on the incredible sales growth that our highest earning consumers are continuing to drive on our streets for reporting tenants on our streets year to date , comparable soft goods and apparel sales continue to outperform in Soho .

Speaker #5: Sales are up 15% on Bleecker Street, north of 30% on the Gold Coast of Chicago, driven largely by an accelerated recovery on North Michigan Avenue.

Speaker #5: Sales are up over 40% . Even on State Street in downtown Chicago , which has certainly felt the effects of hybrid work over the last several years .

Speaker #5: We are seeing the early signs of a strong recovery with sales in our portfolio up over 10% year to date , with one flagship tenant in particular up over 20% , and on M Street .

A.J. Levine: On M Street, despite all of the headlines in Washington, D.C. this year, sales are up 16% year over year and show no signs of slowing. To be fair, we are seeing positive sales growth in our suburbs as well, but nothing resembling the double-digit growth on our streets. When we consider the overall landscape, accelerating sales growth on our streets, strong tenant demand, and the scale we've built to capture that demand, it's full steam ahead. With that, I'll echo Ken on thanking and congratulating the team for their hard work this quarter, and I will turn things over to Reggie.

Speaker #5: Despite all of the headlines in D.C. this year , sales are up 16% year over year and show no signs of slowing . To be fair , we are seeing positive sales growth in our suburbs as well , but nothing resembling the double digit growth on our streets .

Speaker #5: So, when we consider the overall landscape accelerating sales growth on our streets, strong tenant demand, and the scale we've built to capture that demand, it's full steam ahead.

Speaker #5: With that, I'll echo Ken in thanking and congratulating the team for their hard work this quarter, and I will turn things over to Reggie.

Reginald Livingston: Thanks, A.J. Good afternoon, everyone. As noted in our earnings release, our Q3 activity brings our year-to-date acquisition volumes to over $480 million. Based on our current pipeline, we're looking to double that amount by year-end. It's important to note for a company of our size, that's extraordinary growth unmatched within our sector. It's not simply growth for growth's sake. These deals are poised to deliver the earnings and NAV accretion consistent with our goals, not to mention strong CAGR to complement our internal growth. Our year-to-date activity and our pipeline are being driven by a few factors we're noticing. As Ken said, while street retail opportunities slowed down mid-year, caused in part by Liberation Day hangover, we're starting to see more of those sellers come off the sidelines.

Speaker #6: Thanks , Ajay . Good afternoon everyone . As noted in our earnings release , our Q3 activity brings our year to date acquisition volumes to over 480 million .

Speaker #6: And based on our current pipeline , we're looking to double that amount by year end . It's important to note for a company of our size that's extraordinary growth , unmatched within our sector .

Speaker #6: But it's not simply growth for growth's sake . These deals are poised to deliver their earnings and Nav accretion consistent with our goals , not to mention strong to complement our internal growth .

Speaker #6: A year to date activity and our pipeline are being driven by a few factors . We're noticing , as Ken said , while street retail opportunities slowed down mid-year , caused in part by Liberation Day hangover , we're starting to see more of those sellers come off the sidelines .

Reginald Livingston: Just as A.J.'s leasing team gets that first call from tenants, we're getting that first call from sellers of street retail as our reputation as a group that knows how to underwrite and close these transactions is well known throughout our target markets. Recall, the vast majority of our street retail transactions this year have been off-market, and we expect that competitive advantage to continue. It's also worth noting the improved debt environment is causing sellers to test the sales market more in open-air retail across the board. As that environment continues, we're confident we'll get more than our fair share. Turning to specific activity in Q3, within our investment management platform, we acquired Avenue at West Cobb for $63 million.

Speaker #6: And just as AJS leasing team gets that first call from tenants , we're getting that first call from sellers of street retail . As our reputation as a group that knows how to underwrite and close these transactions is well known throughout our target markets , recall the vast majority of our street retail transactions this year have been off market , and we expect that competitive advantage to continue .

Speaker #6: It's also worth noting that the improved debt environment is causing sellers to test the sales market more in open-air retail across the board.

Speaker #6: And as that environment continues, we're confident we'll get more than our fair share. Turning to specific activity in Q3 within our investment management platform, we acquired Avenue at West Cobb for $63 million.

Reginald Livingston: This asset is a 250,000 square foot lifestyle center in an affluent Atlanta suburb where we will deliver value-added returns through a combination of significant lease up, upgrading tenancy, and harvesting mark-to-market opportunities. As we've done previously for assets slated for the investment management platform, we've closed the asset on balance sheet and will recapitalize with an institutional investor. Speaking of that capability, we're close to selecting a top-tier investor to recapitalize Pinewood Square, the Florida Power Center we purchased back in Q2, and we expect that transaction to close in due course. To summarize, through three quarters, we've acquired approximately a half a billion of assets, and we're looking to double that amount in the fourth quarter. With respect to our metrics, that nearly $1 billion in deals will yield an attractive go-in and GAAP yield in the mid-sixes and five-year CAGR in excess of 5%.

Speaker #6: This asset is a 250,000 square foot lifestyle center and an affluent Atlanta suburb , where we will deliver value add returns through a combination of significant lease up upgrading tenancy and harvesting mark to market opportunities .

Speaker #6: As we've done previously for assets slated for investment management platform , we've closed the asset on balance sheet and we'll recapitalize with an institutional investor .

Speaker #6: And speaking of that capability , we're close to selecting a top tier investor to recapitalize Pinewood Square . The Florida Power Center . We purchased back in Q2 .

Speaker #6: And we expect that transaction to close in due course . So to summarize , through three quarters , we've acquired approximately a half a billion of assets .

Speaker #6: And we're looking to double that amount in the fourth quarter . And with respect to our metrics that nearly 1 billion in deals will yield an attractive going in GAAP yield in the mid 60s .

Speaker #6: And a five-year career in excess of 5%. Most importantly, these deals will deliver accretion consistent with our one penny per $200 million target.

Reginald Livingston: Most importantly, these deals will deliver accretion consistent with our one penny per $200 million target, a target we could achieve, frankly, with either our balance sheet transactions or our investment management deals. Bottom line, we're achieving our growth goals, and we're excited about a Q4 pipeline that will be keeping our team very busy across street acquisitions in our target corridors and value-add deals for our IMP. I want to thank the team for their hard work this quarter, and with that, I'll turn it over to John.

Speaker #6: A target we can achieve , frankly , with either our balance sheet transactions or our investment management deals . Bottom line , we're achieving our growth goals , and we're excited about a Q4 pipeline that we'll be keeping our team very busy across street acquisitions and our target corridors and value add deals for IMP .

Speaker #6: I want to thank the team for their hard work this quarter , and with that , I'll turn it over to John .

Paulina Rojas Schmidt: Thanks, Reggie, and good afternoon. I'm going to dive straight into the quarter, and my remarks today will focus on three key themes. First, our differentiated street retail business hit an inflection point this quarter, delivering same-store growth of 13%. We expect to have this above-trend growth continuing into 2026 and beyond. Secondly, as you just heard from our team, we are on offense, and we have the balance sheet flexibility and liquidity to fund it, with our debt to EBITDA at five times and over $800 million available under revolver and forward equity contracts. Lastly, simplification. We recognize that our guidance methodology of including investment management gains and other items is unduly complicated and results in a level of volatility that is not at all indicative of our underlying NOI growth.

Speaker #7: Thanks , Reggie , and good afternoon . I'm going to dive straight into the quarter and my remarks today will focus on three key themes .

Speaker #7: First , our differentiated street retail business , hit an inflection point this quarter , delivering same store growth of 13% . And we expect to have this above trend growth continuing into 2026 .

Speaker #7: And beyond. Secondly, as you just heard from our team, we are on offense, and we have the balance sheet, flexibility, and liquidity to fund it, with our debt to EBITDA at five times and over $800 million available under the Revolver and Forward equity contracts.

Speaker #7: And lastly, simplification: we recognized that our guidance methodology of including investment management gains and other items is unduly complicated and results in a level of volatility that is not at all indicative of our underlying NOI growth.

Paulina Rojas Schmidt: As discussed on our last call, we will be refining our 2026 FFO definition to provide investors with a single metric that directly links the growth of our real estate business to bottom-line earnings, driven by our highly differentiated street retail portfolio. Now diving into our results. The third quarter was an inflection point for us, and I want to discuss a few key data points that's driving our confidence of above-average NOI and earnings growth for the next several years. Starting with NOI. Same-store NOI came in ahead of our expectations at 8.2%, with our street retail portfolio delivering 13% growth during the quarter. With expected same-store growth of 6% to 7% in Q4, we are on track to come in at the upper end of our 5% to 6% projection for the year. For those modeling on the call, here come some numbers.

Speaker #7: And as discussed on our last call, we will be refining our 2026 FFO definition to provide investors with a single metric that directly links the growth of our real estate business to bottom-line earnings, driven by our highly differentiated street retail portfolio.

Speaker #7: Now , diving into our results , the third quarter was an inflection point for us , and I wanted to discuss a few key data points .

Speaker #7: That's driving our confidence of above average NOI and earnings growth for the next several years . Starting with NOI , same store , NOI came in ahead of our expectations at 88.2% with our street retail portfolio delivering 13% growth during the quarter and with expected same store growth of 6 to 7% in Q4 .

Speaker #7: We are on track to come in at the upper end of our 5 to 6 projection for the year . And now for those modeling on the call , here comes some numbers .

Paulina Rojas Schmidt: Our growth was driven by approximately 5% of our AVR, comprised of $6.7 million in pro-rata rents commencing during the third quarter, with virtually all of it representing leases in the same store pool. In terms of the earnings impact, approximately $1 million was recognized in Q3 earnings. The full 1.7% impact will show up in Q4, leaving us with an incremental $4 million in 2026. Additionally, the $6.7 million of commencing rents increased our occupancy by 140 basis points this quarter, keeping us on track to achieve 94% to 95% by year-end. It's also worth highlighting that our street and urban occupancy sequentially increased 280 basis points this quarter, with several hundred basis points of future growth in front of us, with just 89.5% of our street and urban portfolio occupied as of September 30th. Our leasing team continues to set us up for future growth.

Speaker #7: Our growth was driven by approximately 5% of our ABR , comprised of $6.7 million in pro rata rents commencing during the third quarter , with virtually all of it representing leases in the same store pool .

Speaker #7: In terms of the earnings impact, approximately $1 million was recognized in Q3 earnings. The full $1.7 million impact will show up in Q4, leaving us with an incremental $4 million in 2026.

Speaker #7: Additionally , the $6.7 million of commencing rents increased our occupancy by 140 basis points this quarter , keeping us on track to achieve 94 to 95% by year end .

Speaker #7: It's also worth highlighting that our street and urban occupancy sequentially increased 280 basis points this quarter , with several hundred basis points of future growth in front of us .

Speaker #7: With just 89.5% of our street and urban portfolio occupied as of September 30th, our leasing team continues to set us up for future growth.

Paulina Rojas Schmidt: We signed $3.7 million in new leases, or approximately 2% of AVR, during the third quarter, resulting in an $11.9 million signed not-yet-opened pipeline as of September 30. Over 80% of the $11.9 million pipeline resides in our street and urban portfolio and is comprised of $4.4 million in our REIT operating portfolio, which, as a reminder, means our same-store pool, $6.5 million from our REIT redevelopment projects, and $1 million from our share from the investment management platform. In terms of the estimated timing and earnings impact of the $11.9 million signed not-yet-opened pipeline, approximately $5.5 million of AVR is projected to commence in Q4, with the remaining $6.4 million in 2026.

Speaker #7: We signed $3.7 million of new leases , or approximately 2% of ABR , during the third quarter , resulting in an $11.9 million sign not yet open pipeline .

Speaker #7: As of September 30th . Over 80% of the $11.9 million pipeline resides in our street and urban portfolio , and is comprised of $4.4 million in our REIT operating portfolio , which , as a reminder , means our same store pool $6.5 million from our REIT redevelopment projects and $1 million from our share from investment management platform .

Speaker #7: And in terms of the estimated timing and earnings impact of the $11.9 million signed open pipeline, approximately $5.5 million of ABR is projected to commence in Q4, with the remaining $6.4 million in 2026.

Paulina Rojas Schmidt: When factoring in the expected rent commencement dates, this results in anticipated earnings of approximately $700,000 in Q4 2025, of which roughly $200,000 is same-store, $7.4 million in 2026, with about $3.5 million of it being in same-store, leaving us with $3.8 million in 2027. Additionally, consistent with our discussion last quarter, approximately $9 million of the $11 million will hit our bottom-line earnings after adjusting for interest and other carry costs that we are capitalizing, primarily for REIT assets and redevelopment, with the vast majority of these capital costs attributable to our City Center redevelopment project in San Francisco and our new grocer, TNT, which we are targeting a late 2026 rent commencement date. I recognize that I just dropped a lot of numbers on you.

Speaker #7: And when factoring in the expected rent commencement dates, this results in anticipated earnings of approximately $700,000 in Q4 2025, of which roughly $200,000 is same store. This totals $7.4 million in 2026, with about $3.5 million of it being in same store, leaving us with $3.8 million in 2027.

Speaker #7: Additionally , consistent with our discussion last quarter , approximately 9 million of the $11 million will hit our bottom line earnings after adjusting for interest and other carry costs that we are capitalizing primarily for Reid assets and redevelopment with the vast majority of these capital costs attributable to our city center , city center redevelopment project in San Francisco and our new grocer , TMT , which we are targeting a late 2026 rent commencement date .

Speaker #7: I recognize that I just dropped a lot of numbers on you , but when stepping back , it's these data points that are driving our confidence in Q3 being an inflection point and setting us up for outsized growth in 2026 and beyond , and more specifically , our increased conviction of achieving the 10% reported NOI growth target in 2026 that we discussed on the second quarter call .

Paulina Rojas Schmidt: When stepping back, it's these data points that are driving our confidence in Q3 being an inflection point and setting us up for outsized growth in 2026 and beyond. More specifically, our increased conviction of achieving the 10% REIT portfolio NOI growth target in 2026 that we discussed on the second quarter call. Based on our current model, we are projecting total same-store growth, inclusive of redevelopments, between 8% to 12%, and between 5% to 9% same-store growth, excluding redevelopments, with our street and urban portfolio projected to contribute growth in excess of 10%. In terms of dollars, the projected 8% to 12% NOI growth approximates $12 million to $14 million of incremental NOI over our 2025 projected results, or roughly $0.09 a share of FFO at our current share count.

Speaker #7: Based on our current model , we are projecting total same store growth inclusive of redevelopments between 8 to 12% and between 5 to 9% .

Speaker #7: Same store growth excluding redevelopments with our street and urban portfolio projected to contribute growth in excess of 10% . In terms of dollars , the projected 8 to 12% NOI growth approximates 12 to $14 million of incremental NOI over our 2025 projected results , or roughly $0.09 a share of FFO at our current share count .

Paulina Rojas Schmidt: While we're still finalizing our budgets and have some more leases to sign, we are well on our way of hitting our targets. Now moving on to earnings. The NOI growth from our street retail portfolio is dropping to the bottom line, and the simplified method of reporting FFO that we discussed on our last call will provide even greater visibility. Driven by the 8.2% same-store NOI growth, we sequentially increased our quarterly FFO by a penny to $0.29 as compared to the $0.28 we reported last quarter after adjusting for the gains from our investment management business. This growth was achieved despite the short-term dilution from the partial conversion of the City Point loan. In terms of City Point, as mentioned on the last call and disclosed in the second quarter Form 10-Q, about half of our partners converted their interest during the third quarter.

Speaker #7: And while we're still finalizing our budgets and have some more leases to sign, we are well on our way to hitting our targets.

Speaker #7: Now moving on to earnings . The NOI growth from our street retail portfolio is dropping to the bottom line . And the simplified method of reporting FFO that we discussed on our last call will provide even greater visibility , driven by the 8.2% same store NOI growth .

Speaker #7: We sequentially increased our quarterly FFO by a penny to $0.29 as compared to the $0.28 we reported last quarter, after adjusting for the gains from our investment management business.

Speaker #7: And this growth was achieved despite the short-term dilution from the partial conversion of the Citypoint loan. In terms of Citypoint, as mentioned on the last call and disclosed in the second quarter Form 10-Q.

Speaker #7: About half of our partners converted their interest during the third quarter. As a reminder, had all the loans converted at the beginning of the year, it would have been approximately $0.06 dilutive on an annualized basis against 2025 FFO.

Paulina Rojas Schmidt: As a reminder, had all the loans converted at the beginning of the year, it would have been approximately $0.06 dilutive on an annualized basis against 2025 FFO. As we've previously discussed, while the loss of interest income will be short-term dilutive for the balance of 2025 and into 2026, this sets us up for meaningful future NOI and earnings growth over the next several years as we continue to stabilize the asset. Moving on to guidance. As highlighted in our release, even with the dilution from City Point, we maintained our FFO prior to the realized gains we earned from our investment management business. Additionally, we have revised and tightened FFO, inclusive of gains of our investment management business, driven primarily by the decline in share price of Albertsons. In terms of 2026 guidance, as we discussed last call, we will be moving to a simplified reporting metric.

Speaker #7: So as we've previously discussed , while the loss of interest income will be short term dilutive for the balance of 2025 and into 2026 , this sets us up for a meaningful future .

Speaker #7: NOI and earnings growth over the next several years as we continue to stabilize the asset . Moving on to guidance , as highlighted in our release , even with the dilution from Citypoint , we maintained our FFO prior to the realized gains we earn from our investment management business .

Speaker #7: Additionally, we have revised and tightened FFO, inclusive of gains from the investment management business, driven primarily by the decline in the share price of Albertsons.

Speaker #7: In terms of 2026 , guidance , as we discussed , last call , we will be moving to a simplified reporting metric . Our new metric will be FFO .

Paulina Rojas Schmidt: Our new metric will be FFO as adjusted and will exclude the gains from our investment management business, along with material, non-comparable items that we believe are not reflective of our core operating results. Please take a look at our investor deck on our website, which further discusses the reporting change and what this revised metric would have looked like for our 2025 earnings. For those on the sell side that have not yet done so, please update your 2026 earnings estimates based upon our revised definition. Additionally, while an important and highly profitable part of what we do, we are no longer going to include investment management gains and promotes in any of our earnings guidance metrics going forward. We would ask that you please also exclude these from your metrics to avoid any inconsistencies amongst the analyst community.

Speaker #7: As adjusted and will exclude the gains from our investment management business , along with material non-comparable items that we believe are not reflective of our core operating results .

Speaker #7: Please take a look at our investor deck on our website , which further discusses the reporting change and what this revised metric would have looked like for a 2025 earnings .

Speaker #7: And for those on the sell side that have not yet done so, please update your 2026 earnings estimates based upon our revised definition.

Speaker #7: Additionally , while an important and highly profitable part of what we do , we are no longer going to include investment management gains and promotes in any of our earnings guidance metrics going forward .

Speaker #7: So we would ask that you please also exclude these from your metrics to avoid any inconsistency , inconsistencies amongst the analyst community . Thus , FFO and our new metric FFO , as adjusted should be identical .

Paulina Rojas Schmidt: Thus, NAREIT FFO and our new metric, FFO as adjusted, should be identical when we provide our 2026 guidance in February. When we earn a promote in any given quarter, it will be included in NAREIT FFO and excluded from FFO as adjusted. Please keep in mind, while we won't be including investment management gains and promotes as part of our guidance, this profitable part of our strategy will continue to be an important part of our business, with approximately $30 million of near-term gains anticipated. Finally, I'll close with an update on our balance sheet. With our pro-rata debt EBITDA at five times and meaningful liquidity, our balance sheet has dry powder to play offense. We raised approximately $212 million of equity at the quarter at just under $20 a share to accretively fund our acquisition pipeline and the Henderson redevelopment project in Dallas.

Speaker #7: When we provide our 2026 guidance in February, and when we earn a promote in any given quarter, it will be included in FFO and excluded from FFO as adjusted.

Speaker #7: And please keep in mind, while we won't be including investment management gains and promotes as part of our guidance, this profitable part of our strategy will continue to be an important part of our business, with approximately $30 million of near-term gains anticipated.

Speaker #7: And finally , I'll close with an update on our balance sheet . With our pro rata debt EBITDA at five times and meaningful , meaningful liquidity .

Speaker #7: Our balance sheet has the dry powder to play offense. We raised approximately $212 million of equity in the quarter at just under $20 a share to fully fund our acquisition pipeline.

Speaker #7: And the Henderson Redevelopment Project in Dallas, as J.J. mentioned, Henderson is on track, and we are in advanced stages of lease negotiations on a significant portion of the project, giving us increased confidence of achieving our targeted 8% to 10% development yield and $2.00 to $0.04 of projected incremental FFO growth commencing in 2027 and into 2028.

Paulina Rojas Schmidt: As A.J. Levine mentioned, Henderson is on track, and we are in advanced stages of the lease negotiations on a significant portion of the project, giving us increased confidence of achieving our targeted 8% to 10% development yield and 2% to 4% of projected incremental FFO growth commencing in 2027 and into 2028. I also want to point out that over the past few quarters, we have acquired five additional properties on Henderson Avenue, which we've set aside for future development. Combined with our existing holdings, this brings our ownership to well over 50% of this premier retail corridor. In summary, with strong embedded internal growth and meaningful dry powder on hand to accretively fuel our large and growing pipeline of external opportunities, we are incredibly excited as we look forward over the next several years. With that, I will turn the call over to the operator for questions.

Speaker #7: I also want to point out that, over the past few quarters, we have acquired five additional properties on Henderson Avenue, which we've set aside for future development.

Speaker #7: And combined with our existing holdings , this brings our ownership to well over 50% of this premier retail quarter . So in summary , with strong embedded internal growth and meaningful dry powder on hand to fuel our large and growing pipeline of external opportunities , we are incredibly excited as we look forward over the next several years .

Speaker #7: And with that, I will turn the call over to the operator for questions.

Operator: Thank you. As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Again, we ask you to limit to one question, one follow-up. You may get back in the queue as time allows. Our first question will come from Floris van Dijkum with Ladenberg. Your line is open.

Speaker #2: Thank you. As a reminder, to ask a question, please press star one on your telephone and wait for your name to be announced.

Speaker #2: To withdraw your question, please press star one one again. Again, we ask you to limit it to one question and one follow-up.

Speaker #2: You may get back in the queue as time allows . And our first question will come from Floris van Dyck with Ladenburg . Your line is open .

Floris van Dijkum: Hey, guys. Morning. Thanks for taking the question. Obviously, underlying results appear to be really, really solid here. You did raise some equity. Maybe my first question is, can you lift the veil a little bit on your pipeline of acquisitions you're looking at? You did talk, I think, Reggie, you indicated that about a chunk of the doubling of investments or ballpark figure $500 million of investments is Henderson, which I believe is the total cost is around $190, $200 million. Maybe talk about some of the other potential investments you're looking at and maybe talk about the difference between cash yields versus GAAP yields.

Speaker #8: Hey guys . Good morning . Thanks for taking the question . I'm obviously underlying results appear to be really , really solid here .

Speaker #8: And you did raise some equity. Maybe my first question is, can you lift the veil a little bit on your pipeline of acquisitions?

Speaker #8: You're looking at . You did talk I think , Reggie , you indicated that about , you know , a chunk of the , the doubling of investments or ballpark figure 500 million of investments is is Henderson , which I believe is , the total cost is around 190 , 200 million .

Speaker #8: Maybe talk about some of the the other potential investments . You're looking at . And and maybe talk about the difference between cash yields versus GAAP yields .

Paulina Rojas Schmidt: Of course. Before I turn it over to Reggie, just to clarify, the acquisitions Reggie is mentioning are separate and beyond what we're talking about for Henderson. Those are incremental to Henderson. Reggie, why don't you want to take that?

Speaker #7: Of course before I turn it over to to Reggie , just to clarify , the acquisitions , Reggie is mentioning are separate and beyond what we're talking about for for Henderson .

Speaker #7: So those are incremental to Henderson. So you want to take.

Reginald Livingston: Yeah. Let me start with the bottom of GAAP yield and cash yield. As I said before, we feel really confident that we're finding the right opportunities in street retail that may take a 5% cash yield into the mid-sixes, which are our target for GAAP yield. Trying to find those deals with the right attributes of lease duration and mark-to-market, we found those. We're continuing to find those in the pipeline as well. We feel good about not only getting deals done, but getting deals done out of our metrics. What was the first part, Floris?

Speaker #6: That out . Yeah . Let me start with the bottom of GAAP yield . And cash yield . As I said before , we feel really confident that we're finding the right opportunities in street retail .

Speaker #6: That may take a five cash yield into the mid-60s, which is our target for gap yield. So, we are trying to find those deals with the right attributes of lease duration and mark-to-market. We found those, and we're continuing to find those in the pipeline as well.

Speaker #6: So we feel good about not only getting deals done but getting deals done at our metrics. What was the first part?

Speaker #6: Flores .

Speaker #8: The sorry , the are they in existing markets in particular ? I'm curious what percentage would you say is New York versus other other areas .

Floris van Dijkum: Are they in existing markets in particular? I'm curious, what % would you say is New York versus other areas?

Reginald Livingston: They are in existing markets. We still like New York, and it's still doing a lot of activity there. They go kind of up and down the East Coast. I would say most of it is focused on New York, just looking at our pipeline today.

Speaker #6: They are in existing markets . We still like New York and still still doing a lot of activity there . But they go kind of up and down the East Coast .

Speaker #6: But I would say most of it is focused on New York . Just looking at our pipeline today .

Floris van Dijkum: Great.

Speaker #8: And .

Reginald Livingston: We can expect our geographies, though, to expand. It's a fluid situation, so we'll be in other spots as well.

Speaker #4: Expect our geographies , though , to expand . And it's a fluid situation . So we'll be in other spots as well .

Floris van Dijkum: Great. Maybe the momentum in the street appears to be really strong. You guys are seeing no signs of slowing down in terms of tenant demand. Are retailers focused on their occupancy costs, i.e., are they able to generate the sales to be able to pay the rents to be in your street locations?

Speaker #8: Great . And then maybe . The momentum in the street appears to be really strong . You guys are no seeing , no signs of slowing down in terms of , you know , tenant demand and and our retailers focus on their occupancy costs .

Speaker #8: Are they able to generate the sales to be able to pay the rents, to be in your street locations?

Ken Bernstein: Yeah. I think a few things are at work in terms of that. Some of the economic recovery that we're going through that some refer to as a K recovery, certainly the affluent consumer is driving more of this recovery, more of the spending than was historically the case, and that seems to be continuing. Couple that with the fact that the affluent consumer is who drives street retail. From our retailers' perspective, the shift from wholesale to stores, the shift to DTC, as I touched in my remarks, means that these retailers, in order to capture that customer, have to be on these key streets, means that they need these stores. To your point, the sales are showing up, the profitability is showing up. The other thing, as I reflected on the last six months, we as investors perhaps were fighting the last war.

Speaker #4: Yeah, I think a few things are at work in terms of that. Some of the economic recovery that we're going through, that some refer to as a K recovery.

Speaker #4: Certainly, the affluent consumer is driving more of this recovery and more of the spending than was historically the case. And that seems to be continuing.

Speaker #4: Couple that with the fact that the affluent consumer drives street retail, and from our retailers' perspective, the shift from wholesale to stores and the shift to DTC.

Speaker #4: As I touched in my remarks , means that these retailers , in order to capture that customer , have to be on these key streets , means that they need these stores .

Speaker #4: And to your point , the sales are showing up . The profitability is showing up . The other thing , as I've reflected on the last six months , we as investors perhaps were fighting the last war .

Ken Bernstein: Immediately when Liberation Day hit, we were all focused on, "Oh, my gosh, the consumer is going to focus only on necessity items." For some segments of the consumer, that may have been the case, those living paycheck to paycheck. In general, the affluent consumer has continued full speed ahead, and thus our retailers have followed. My takeaway was we thought with Liberation Day, it was what you are selling, i.e., necessities versus discretionary. It's really more about who are you selling to and how are you selling. Who, meaning to the customers who are shopping on our streets. The how, our retailers recognize that the physical channel in an omnichannel world is by far the most profitable. All of that's leading to this much longer-term trend, what I refer to as a secular trend of these street locations being must-haves for a wider and wider variety of important retailers.

Speaker #4: And so immediately when Liberation Day hit , we were all focused on , oh my gosh , the consumer is going to focus only on necessity items .

Speaker #4: Well , for some segments of the consumer that may have been the case , those living paycheck to paycheck . But in general , the affluent consumer has continued full speed ahead .

Speaker #4: And thus our retailers have followed. And I guess my takeaway was, we thought with Liberation Day, it was about what you are selling, i.e., necessities versus discretionary.

Speaker #4: And it's really more about who you are selling to and how you are selling. "Who" meaning to the customers who are shopping on our streets.

Speaker #4: And then how our retailers recognize that the physical channel, in an omnichannel world, is by far the most profitable. All of that's leading to this much longer-term trend.

Speaker #4: What I refer to as a secular trend of V Street locations being a must-have for a wider and wider variety of important retailers.

Ken Bernstein: That's why you're seeing the kind of results that A.J. Levine discussed.

Speaker #4: And that's why you're seeing the kind of results that A.J. discussed.

Reginald Livingston: Thanks, Ken. That's helpful.

Speaker #8: Thanks, Ken. That's helpful.

Ken Bernstein: Sure.

Speaker #4: Sure .

Operator: Our next question will come from Linda Tsai with Jefferies. Your line is now open.

Speaker #2: And our next question will come from Linda Siewert, Jefferies. Your line is now open.

Linda Tsai: Hi. Thank you. A question for John. The 5% to 9% same-store growth ex redevs in 2026 is impressive considering the tough comp in 2025. Could you go into some of the considerations of what would make you hit the 5% versus the 9% since it's a wide range?

Speaker #9: Hi . Thank you . A question for John . The 5 to 9% same store growth X-ray in 26 is impressive considering the tough comp in 25 .

Speaker #9: But could you go into some of the considerations of what would make you hit the 5% versus the 9%? Since it's a wide range?

Reginald Livingston: Yeah. I mean, why don't we first start with, and I know I throw a lot of numbers out there. When you look at the transcript, you could digest them. A couple of data points that give us confidence in doing that: if you look at the commencements this quarter alone, right, with the 6.7% that commenced, our incremental pickup from that is $4 million, plus what we have in our S&O that will commence. This is all same-store, another $3.5 million. When you apply both of those numbers together, you're above 5% already in that number. You then have contractual growth that's going to go on top of that. Not to say there's going to be moveouts as there's always in that portfolio. In terms of our level of conviction, we feel really good about the 5%.

Speaker #7: Yeah . Why don't we first start with and I know I throw a lot of numbers out there . When you look at the transcript , you could you could digest them .

Speaker #7: But a couple of data points that gives us confidence in doing that . If you look at the commencements this quarter alone , right , with the 6.7 that commenced , our incremental pickup from that is $4 million plus of what we have in our snow that will commence .

Speaker #7: This is all the same store, another $3.5 million. So when you apply both of those numbers together, you're above 5% already in that number.

Speaker #7: You then have contractual growth that's going to go on top of that and not to accept there's going to be move-outs as there's always in the portfolio.

Speaker #7: But in terms of our level of conviction , we feel really good about the 5% . And to get us to the 9% , it's as I mentioned , we have some leasing in the normal course to do so .

Reginald Livingston: To get us to the 9%, as I mentioned, we have some leasing in the normal course to do. It's how quickly do we get some of those spaces leased and opened gets us to the 9%. That factors in, as we sit here today, rollover, credit, etc. We'll update that as we get closer. I feel pretty confident of that range for sure.

Speaker #7: It's how quickly do we get some of those spaces leased and open gets us to to the 9% . But that factors in as we sit here today , roll over credit , etc.

Speaker #7: But we'll update that as we get closer. But I feel pretty confident of that range for sure.

Linda Tsai: Thank you. I have a follow-up for Ken. If you could snap your fingers and vastly increase your street retail concentration in one or two specific markets, which would they be?

Speaker #9: Thank you . And I have a follow up for Ken . If you could snap your fingers and vastly increase your street retail concentration in 1 or 2 specific markets , which would they be ?

Reginald Livingston: Thank goodness I don't get to snap my fingers. Of our existing markets, there are some that are up and coming and intriguing. San Francisco certainly would fall into that category. Their new mayor is doing a fantastic job, and we're enjoying the tailwinds on our two redevelopments. I'd be happy to see more there. Dallas, certainly, of one of our existing markets, strong demographic trends, and we're capturing the right retailers at the right time. Those would be two that would add good balance, good diversity overall, but open order from, frankly, most of our markets. M Street, there's no reason we shouldn't continue to add there. New York selectively, no reason we shouldn't add there as well.

Speaker #4: Oh , now , thank goodness I don't get to snap my fingers . So of our existing markets , there are some that are up and coming and intriguing .

Speaker #4: San Francisco certainly would fall into that category. Their new mayor is doing a fantastic job, and we're enjoying the tailwinds in our two redevelopments.

Speaker #4: I'd be happy to see more there. Dallas is certainly one of our existing markets, with strong demographic trends, and we're capturing the right retailers at the right time.

Speaker #4: So those would be two that would add good balance and good diversity overall. But open order from, frankly, most of our markets, M Street.

Speaker #4: There's no reason we shouldn't continue to add. Their New York selectively. No reason we shouldn't add there as well.

Linda Tsai: Thank you.

Speaker #9: Thank you .

Operator: Our next question will come from Craig Mailman with Citi. Your line is open.

Speaker #2: And our next question will come from Craig Mailman with Citi. Your line is open.

Floris van Dijkum: Hey, guys. Just to go back to the acquisitions, just to clarify. Reggie, should we take away from it that there could be up to $500 million of potential deals in Q4? Is that like a gross number, and maybe your net would be lower as you partner with people? Can you just kind of put some goalposts around it?

Speaker #10: Hey guys . Just to go back to the acquisition , just to clarify . So Reggie , should we take away from it that there could be up to $500 million of potential deals in in for Q and is that like a gross number and maybe your net would be lower as you partner with people ?

Speaker #10: Can you just kind of put some goalposts around it?

Reginald Livingston: Yeah. That's a gross number. Just to be clear, when I talk about this pipeline, this is the product of exclusive negotiations, right? It's not just, "Oh, there's an OM on the street, and I'm just included in the pipeline." These are specific conversations we're having. That is a gross number that we could achieve in the fourth quarter.

Speaker #11: Yeah , that that's .

Speaker #6: A gross number . And just to be clear , when I talk about this pipeline , this is the product of exclusive negotiations , right ?

Speaker #6: So it's not just , oh , there's an Om on the street . And I'm just included in the pipeline . These are specific conversations we're having .

Speaker #6: But that is a gross number that we could achieve in the fourth quarter.

Ken Bernstein: Keep in mind, Craig, somewhat coincidentally but conveniently, the earnings accretion, whether it's on the investment management platform side or on the street retail, from an earnings perspective only, they're both about equally accretive on a gross-to-gross basis and are effective inputs. From an earnings perspective, the same. That being said, we certainly appreciate the importance of us adding the street retail piece, the long-term permanent owners.

Speaker #4: And keep in mind .

Speaker #12: Craig .

Speaker #4: Somewhat coincidentally , but conveniently , the earnings accretion , whether it's on the investment management platform side or on the street retail from an earnings perspective , only , they're both about equally accretive on a gross to gross basis .

Speaker #4: And are effective input . So from an earnings perspective , the same . That being said , we certainly appreciate the importance of us adding the street retail piece .

Speaker #4: The long term permanent .

Floris van Dijkum: Right. It could be 2.5% accretive on an annual basis, is what you're saying, given the magnitude and your historic $200 million or a penny for every $200 million.

Speaker #12: Right .

Speaker #10: , right . And so it could be two and a half cents accretive on an annual basis is what you're saying , given the the magnitude in your historic 200 million or a penny for every 200 .

Speaker #10: Million .

Ken Bernstein: Exactly. That's still.

Speaker #13: Exactly .

Speaker #4: And that's .

Speaker #13: Still okay .

Floris van Dijkum: Okay. Then.

Ken Bernstein: Go ahead.

Speaker #11: Go ahead .

Floris van Dijkum: Okay. I was just going to say, and from the financing perspective, right, you guys have, you did the forward equity. You potentially have. Some

Speaker #12: Okay .

Speaker #10: I was just going to say , and from the financing perspective . Right . You guys have you did the forward equity . You potentially have some some capital coming back in from the recap of the two ?

Operator: Capital coming back in from the recap of the Q2 acquisition. You guys have, clearly, the debt market is wide open here. As we think about sources to fund this and maybe timing with taking down some of that forward ATM and some dispo proceeds, how should we think about that whole mix given what you guys have in the fourth quarter plus Henderson Ave. financing to continue, right? That's a higher return. Maybe you earmark more equity for that versus more debt for acquisition. Could you just talk about the puts and takes on how you guys are thinking about that to maximize accretion?

Speaker #10: Q acquisition . Then you guys have clearly the debt market is wide open here . So from a as we think about kind of sources to fund this and maybe timing with taking down some of that forward ATM and some Dispo proceeds , how should we think about that whole mix given , you know , maybe what you guys have in the fourth quarter plus Henderson Ave financing to continue , right .

Speaker #10: And that's a higher a higher return . So maybe you earmark more equity for that versus more debt for acquisition . Then could you just talk about the puts and takes on how you guys are thinking about that to maximize accretion .

John Gottfried: Yeah. Why don't I start? Ken, if you want to jump in. I think, Craig, the way we want to, the way that we're going to manage the balance sheet is that we are going to stay on a pro-rata basis, debt to EBITDA inclusive of whatever share we do in investment management, sub-six, and sub-five where we just look at rebalance sheet debt to EBITDA. That's just sort of our goalpost as to where we're looking for. You mentioned the liquidity in the debt market, and it is outstanding in terms of both primarily on the secured side. We're seeing incredible tightening of spreads and availability of capital. On the unsecured side, we are borrowing at 120 over. We look at on a five-year swap that we borrow on an unsecured basis. We'll be able to do in the mid-four.

Speaker #7: Yeah . Why don't I start and then Ken , if you want to jump in . But I think , Craig , the way we want to , the way that we're going to manage the balance sheet is that we are going to stay on a pro rata basis .

Speaker #7: Debt to EBITDA , inclusive , whatever share we do in investment management , sub six and sub five , where we just look at REIT balance sheet debt to EBITDA .

Speaker #7: So that's just sort of our goalpost as to where we're looking for. And we look at, you mentioned the liquidity in the debt market.

Speaker #7: And it is outstanding in terms of both, primarily on the secured side. We're seeing incredible tightening of spreads and availability of capital.

Speaker #7: But on the unsecured side , we are borrowing at 120 over . So we look at on a five year swap that we we borrow on an unsecured basis .

Speaker #7: We're , we're , we're able to do in the , mid in the mid fours . So you know when we look at the mix of what we do .

John Gottfried: When we look at the mix of what we do, think of those goalposts as to where we're going to keep our debt to EBITDA targets. We have plenty of liquidity available. Our revolver is virtually completely untapped. You mentioned we have the proceeds coming back from the recap of the asset we did during the second quarter. Plenty of liquidity that are going to be able to manage the acquisition pipeline that's coming on. We're going to do that in the most efficient way possible.

Speaker #7: So think of those goalposts as to where we're going to keep our debt to EBITDA targets. We have plenty of liquidity available.

Speaker #7: Our revolver is virtually completely untapped. And you mentioned we have the proceeds coming back from the recap of the asset we did during the second quarter.

Speaker #7: So plenty of plenty of liquidity that are going to be able to manage the acquisition pipeline . That's that's coming on . And we're going to do that in the most efficient way possible .

Operator: Just to clarify so that there's no doubt, we are in a position now to fully fund all of those opportunities as well as play offense going forward. What John's articulating is the wide variety of choices we have in terms of how we fund this, both in the secured debt market for our investment management platform and then the unsecured market.

Speaker #4: Yeah, just to clarify, or just so that there's no doubt, we are in a position now to fully fund all of those opportunities as well as play offense going forward.

Speaker #4: What John's articulating is the wide variety of choices we have in terms of how we fund this, both in the secured debt market for our investment management platform and then the unsecured market.

Operator: Great. Thank you.

Speaker #10: Great . Thank you .

Gabriella Vitello: Our next question comes from Andrew Reale with Bank of America. Your line is open.

Speaker #2: And our next question comes from Andrew Riley with Bank of America. Your line is open.

Ken Bernstein: Hi. Good afternoon, everyone. Thanks for taking my questions. I guess first on the investment management platform. On Westcott, Reggie, I think you said you're close to closing with an institutional partner there. I'd just be curious to hear how the level of demand from potential partners was after you closed on that asset. Maybe just more broadly, are you seeing increased partnership interest from institutional capital and how might that be shaping your investment management strategy overall?

Speaker #14: Hi . Good afternoon everyone . Thanks for taking my questions . I guess first on the investment management platform , first on on Westcott .

Speaker #14: Reggie , I think you said you're close to closing with an institutional partner there . So I just be curious to kind of hear how the the level of demand from potential partners was after you closed on that asset and , and maybe just more broadly , are you seeing increased partnership interest from institutional capital and how might that be shaping your investment management strategy overall ?

John Gottfried: Yeah. We're seeing broad demand. There's a lot of institutional investor demand. All of the fundamentals that A.J. and Ken discussed are not a secret anymore. I feel like they were a secret for some time with institutional investors. Now the note is out. Everyone gets it and everyone is looking to do retail. What they're finding at the same time is retail can be very idiosyncratic. You have to have best-in-class operators in order to do it. We're certainly on inbounds of a lot of groups saying, "Hey, we want retail, but we need a best-in-class operator to do it." Whether it be Pinewood or Cobb, we have no shortage of opportunities to recap those two.

Speaker #11: Yeah .

Speaker #6: We're seeing broad demand. There's a lot of institutional investor demand. All of the fundamentals that A.J. and Ken have discussed are not a secret anymore.

Speaker #6: I feel like they were a secret for some time when institutional investors, but now the note is out. Everyone gets it, and everyone is looking to do retail.

Speaker #6: What they're finding at the same time is retail can be very idiosyncratic. And so you have to have best-in-class operators in order to do it.

Speaker #6: So we're certainly on inbounds of a lot of groups saying , hey , we want retail . But we we need a best in class operator to do it .

Speaker #6: So whether it be Pinewood or cob , we have no shortage of opportunities . To recap those two . And as far as on a go forward basis , we feel really good that we'll be able to do all the deals that we want to do for the investment management platform and find the capital as needed .

John Gottfried: As far as on a go-forward basis, we feel really good that we'll be able to do all the deals that we want to do from the investment management platform and find the capital as needed.

Ken Bernstein: Okay. Thanks. Maybe one for A.J., specifically at the core properties you've acquired this year, I'd just be curious, what proportion of that mark-to-market and probably lease opportunity has already been addressed or is going to be addressed by year-end versus how much is still left to be realized in 2026 and beyond?

Speaker #14: Okay , thanks . And maybe one for for AJ specifically at the core properties you've acquired this year , I'd just be curious what proportion of that mark to market .

Speaker #14: And probably loose opportunity kind of has already been addressed, or is going to be addressed by year-end versus how much is still left to be realized in 2026 and beyond.

A.J. Levine: Yeah. We're not going to get into specific numbers, but I'll tell you a few things, right? I mean, we look to, number one, the incredible growth we've seen in these markets, right? 15% sales growth in Soho, 30% Bleecker Street, 40% in Chicago. We look at 10 in health, right, which is stable and only improving as those sales outpace contractual growth. Demand at the highest level it's been in a decade. Of course, the scale that we've built in these markets to capture that. Couple that with what we've already accomplished this year through our probably loose strategy, right? Taking back nine spaces, releasing them at an average spread of about 32%. That should give you an indication of where our markets stand and the opportunity that we think is ahead of us in each one of those markets.

Speaker #7: Yeah .

Speaker #5: Well , we're not going to get into specific numbers , but I'll tell you a few things , right ? I mean , we look to number one , the incredible growth we've seen in these markets , right ?

Speaker #5: 15% sales growth in Soho , 30% . Bleecker , 40% in Chicago . We look at tenant health , right . Which is stable and only improving as those sales outpace contractual growth .

Speaker #5: Demand is at the highest level it's been in a decade. And then, of course, the scale that we've built in these markets to capture that, couple that with what we've already accomplished this year through our pry loose, right? Taking back nine spaces and releasing them at an average spread of about 32%.

Speaker #5: That should give you an indication of where our market stands and the opportunity that we think is ahead of us in each one of those markets.

Gabriella Vitello: Our next question will come from Todd Thomas with KeyBanc Capital Markets. Your line is open.

Speaker #2: And our next question will come from Todd Thomas with KeyBanc. Your line is open.

Reginald Livingston: Hi. Thanks. First, I wanted to follow up on the funding questions and around investments. Do you know what any sense what the split might look like on that $500 million pipeline between core and investment management deals? I'm trying to just get a sense of what the net number might sort of look like as you're looking at that today. John, it doesn't sound like the accretion math changes right now for the current pipeline with the capital that's been raised. Does the current stock price and your current cost of equity capital change how you would think about funding future investments or the returns that you might require going forward?

Speaker #15: Hi . Thanks . First , I wanted to follow up on the funding questions around investments . You know , any any sense what the split might look like on that $500 million pipeline between core and investment management deals ?

Speaker #15: You know, trying to just get a sense of what the net number might sort of look like as you're looking at that today.

Speaker #15: And then , John , it doesn't sound like the accretion math changes right now for , for , you know , the current pipeline with the , with the capital that been raised .

Speaker #15: But does the current stock price and your current cost of equity capital change how you would think about funding future investments or the returns that you might require going forward?

John Gottfried: Yeah. Let me start with that, and then Reggie could take the second piece. Todd, at the current, we highlighted where we raised the equity just under $20 a share, which is lower than we had done previously in the past year or so. What has counterbalanced that, or where we look at our funding cost of capital, is the debt market. If we do, and what we're going to do is on a leverage neutral basis, it's a mix between the debt portion and the equity portion. We're in the mid-fives when we look at the FFO yield on the equity we're raising at the price that we did it at, plus the mid-fours on the debt piece. That's where our all-in funding cost is. I'll let Reggie and Ken talk about where we can deploy that and grow accretively at that penny per 200.

Speaker #7: Yeah . Let me start with that . And then kind of you can take the second piece . So , so Todd , at the current and you know , we highlighted where , you know , we raised the equity just under $20 a share , which is , which is lower than we had done previously in the , in the past year or so .

Speaker #7: But what has counterbalanced that are where we look at our funding cost of capital is that the debt market . So , you know , if we do and what we're going to do is on a leverage neutral basis .

Speaker #7: So at the mix of between the debt portion and the equity portion , we're in the mid fives when we look at the when we put in using the FFO yield on the equity raising at the price that we did it at , plus the mid fours on the , on the , on the debt piece .

Speaker #7: So that's where our all in funding costs . And I'll let . Reggie and Ken talk about where we can deploy that . And grow it creatively at that penny per per per 200 .

John Gottfried: That's how we're looking to fund it, and we can do it accretively, and it's stuff we want to buy with the current capital markets.

Speaker #7: But that's how we're that's how we're looking to to fund it . And we can do it creatively . And the stuff we want to buy with the current capital markets .

Operator: Let me take a stab at the first part of the question where Todd asked, how much is the breakout between the investment management platform or on balance sheet? Let me take a stab at not answering that, Todd. I apologize, but I've always struggled with providing too much information about deals that are in our pipeline because I don't think it creates shareholder value. I think it actually hurts to provide too much information and sellers hear about it and this or that. We have a robust pipeline, otherwise we wouldn't mention it. It is earnings equivalent either way. As John just said, we are in a current position where we can fund all of it if it were all street retail or all investment management platform. No one should have any funding concerns.

Speaker #4: Let me take a stab then at the first part of the question where Todd asked, how much is the breakup between the investment management platform or on balance sheet?

Speaker #4: Let me take a stab at not answering that. Todd and I apologize, but I've always struggled with providing too much information about deals that are in our pipeline because I don't think it creates shareholder value.

Speaker #4: I think it actually hurts to provide too much information, and sellers hear about it and this or that. We have a robust pipeline; otherwise, we wouldn't mention it.

Speaker #4: It is earnings equivalent either way, and as John just said, we are in a current position where we can fund all of it.

Speaker #4: If it were all street retail or all investment management platform, so no one should have any funding concerns. And then I will be that, and we're going to be that vague until we see which ones get done by year end.

Operator: We're going to be that vague until we see which ones get done by year-end, how much of those then fall into the next quarter. I'm confident that there are investment management platform deals that are going to be very accretive, very exciting, very profitable. I'm even more confident over the next quarter, but more importantly, over the next year or two that we're going to continue to grow that street retail accretively, notwithstanding a volatile REIT market, accretively and profitably as we continue to drive Acadia Realty Trust to be the premier owner-operator of street retail in the U.S. Quarter to quarter, I just don't want Reggie to answer that question, even though he knows the answer.

Speaker #4: How much of those then fall into the next quarter . But I'm confident that there are investment management platform deals that are going to be very accretive , very exciting , very profitable , and I'm even more confident over the next quarter .

Speaker #4: But more importantly , over the next year or two that we're going to continue to grow that street retail accretive notwithstanding a volatile market accretive and profitably as we continue to drive Acadia to be the premier owner operator of street retail in the US , quarter to quarter , I just don't want Reggie to answer that question .

Speaker #4: Even though he knows the answer.

Reginald Livingston: Okay. Understood. My other question, you know, A.J., you mentioned that the suburban portfolio's performing well, but noted the growing delta in growth rates between the street and suburban portfolios, which we've seen now for quite some time. You know, the company sold one asset in Dayton from that suburban portfolio. Can you just comment on pricing for that disposition and whether or not you'd consider selling more suburban strips to improve portfolio growth and sort of further reshape the complexion of the portfolio overall or accelerate that?

Speaker #15: Okay , understood . My my other question . You know , AJ , you you mentioned that the suburban portfolios performing well . But noted the growing delta and growth rates between the street and suburban portfolios , which we've seen now for for quite some time , you know , the company sold one asset in Dayton from that suburban portfolio .

Speaker #15: Can you comment on pricing for that disposition and whether or not you'd consider selling more suburban strips to improve portfolio growth and further reshape the complexion of the portfolio overall, or accelerate that?

John Gottfried: I'm happy to take a guess, but I'll pass it off to Reggie. I think he's probably better equipped to answer that one.

Speaker #5: I'm happy to take a guess, but I'll pass it off to Reggie. I think he's probably better equipped to answer.

Reginald Livingston: Yeah. Look, if we can accretively dispose of assets that are no longer core, you know, that's Dayton, that's a legacy Acadia asset. If they're no longer core and the business plan is finished and we can sell those assets and accretively redeploy, we'll always look at those opportunities to do so.

Speaker #11: That one. Yeah. Look.

Speaker #6: If we can dispose of assets that are no longer core , you know , dating , that's a legacy . Acadia asset . If they're no longer core and a business plan is finished and we can sell those assets and redeploy , we're always looking at those opportunities to do so .

Operator: The devil's in the details of transaction costs, friction costs, tax issues, and all of that. It's not as easy as snapping my fingers as someone said earlier. You should expect the majority, vast majority of our growth to be street and urban. Over time, whether we cycle assets into our investment management platform, which you have seen us do, or just outright sell them, that's how we will be dealing with the suburban side. That being said, it's important to note, suburban retail has real tailwinds as well. There's nothing about us focusing our long-term REIT ownership on street retail that in any way negates us being opportunistic on acquiring shopping centers in our investment management platform. That's where they belong, utilizing more leverage and leveraging off of our institutional equity partners as well.

Speaker #4: The devil's in the details of transaction costs, friction costs, tax issues, and all of that. So it's not as easy as snapping my fingers.

Speaker #4: As someone said earlier . But you should expect the majority , vast majority of our growth to be street and urban . And over time , whether we cycle assets into our investment management platform , which you have seen us do , or just outright sell them , that's how we will be dealing with the suburban side .

Speaker #4: That being said , and and it's important to note suburban retail has real tailwinds as well . There's nothing about us focusing our long term REIT ownership on street retail that in any way negates us being opportunistic on acquiring shopping centers in our investment management platform .

Speaker #4: That's where they belong. Utilizing more leverage and leveraging off of our institutional equity partners as well.

Reginald Livingston: All right. Thank you.

Speaker #15: All right. Thank you.

Gabriella Vitello: The next question will come from Michael Mueller with JPMorgan. Your line is open.

Speaker #2: And the next question will come from Michael Mueller with J.P. Morgan. Your line is open.

Operator: Yeah. Hi, first, I guess what was the ballpark range of rents that you achieved on the 300 to 400 bps of street openings that occurred during the quarter?

Speaker #16: Yeah. Hi. First, I guess, what was the ballpark range of rents that you achieved on the 300 to 400 basis points of street openings that occurred during the quarter?

John Gottfried: Yeah. A.J., maybe give some color on the biggest markets where the openings were in Chicago and Washington, D.C. Maybe just talk about those two markets, on Walton and M Street. Maybe just talk through the range on that.

Speaker #17: Yeah. So, A.J., maybe give some color on the...

Speaker #7: Biggest markets where of the openings were in Chicago and DC . So maybe just talk about those those two markets that on on Walton and M Street .

Speaker #7: So maybe to see what just talk through the range on that. Yeah.

A.J. Levine: Yeah. It's specific to the properties that we rolled online. I mean, those are especially in those markets, those are multi-level space. There's a lot of nuance within those markets. It's really hard to peg a per-foot number. I can talk to you about growth in each of those markets.

Speaker #5: Specific to the properties that we rolled online, I mean those are especially in those markets. Those are multi-level spaces. There's a lot of nuance within those markets.

Speaker #5: So it's really hard to peg a per-foot number. I can talk to you about growth in each of those markets.

John Gottfried: What would you say the ground would be on?

Speaker #7: You're on the ground. What would you say the ground would be on?

A.J. Levine: Armitage. Yeah. Ground on Armitage is, let's call it between $120 to $130 a square foot.

Speaker #11: Armitage ?

Speaker #5: Yeah, ground on Armitage is, let’s call it, between $120 and $130 a square foot.

John Gottfried: And Wisconsin?

Speaker #4: And Wisconsin .

A.J. Levine: Wisconsin Avenue, seeing real increase in rents there. I mean, rents are up to the $150 a foot range.

Speaker #5: Wisconsin Avenue is seeing a real increase in rents there. I mean, rents are up to the $150 a foot range.

John Gottfried: On Walton Street?

Speaker #7: And then on Walton Street.

A.J. Levine: On Walton Street, ground floor space at this point is leasing for, call it, $350 to $400 a square foot, which again is pretty remarkable when we look at where we were even just a few years ago.

Speaker #5: On Walton Street, ground floor space at this point is leasing for a remarkable $350 to $400 a square foot, which again is pretty remarkable when we look at where we were even just a few years ago.

Operator: Got it. Okay. If we think of those numbers and try to do some blending, that's probably representative of the blended rent for the 360 bps that came on?

Speaker #16: Got it . Okay . So if we think of those numbers and try to do some blending , that's probably representative of of the blended rent for the 360 basis points that came on .

John Gottfried: Probably is, Mike. Here's the challenge that I know you and I have had multiple conversations on. A, just a wide range that A.J. gave, give one challenge. Second, if you just look at square feet. If you look at the one building that came on in Chicago, it's two floors, right? It's two floors, so the second floor is going to get a different attribute. As we've talked about in the past, would love to just say you could just use a single dollar mark, $137.5 per square foot, but it really, really depends on the building that's going in because it really can move the needle dramatically.

Speaker #7: Probably is Mike. And then here's the challenge that I know you and I have had multiple conversations on just a wide range that A.J. gave—give one challenge.

Speaker #7: Secondly , if you just look at square feet and if you look at the one building that came on and in Chicago , it's two floors , right ?

Speaker #7: So it's two floors . So the second floor is going to get a different attribute . So I would as we've talked about in the past , would love to just say you could just use a single dollar mark .

Speaker #7: $130, 7.50 per square foot. But it really, really depends on the building that's going in because it can really move the needle dramatically.

Operator: Got it. Okay. The second question, for the City Point conversions, are there any more expected over the near term?

Speaker #16: Got it. Okay. And then the second question for the city point conversions. Are there any more expected in the near term?

John Gottfried: I would say at this point, we don't have new information as to we now own 80%. There's another 20%. I would say that, and we're not putting out guidance, but if I was forced to put out guidance at this point, I would assume that comes out in 2026, Mike. We don't have new information. I think for modeling, you should assume that does come out in 2026.

Speaker #7: You know, I would say at this point we don't have new information as to we now own 80%. So there's another 20%.

Speaker #7: Look , I would say that and we're not putting out guidance , but I was putting out if I was forced put out got into this point , I would I would assume that that that comes out in 26 .

Speaker #7: Mike, but we don't have new information. However, I think for modeling, you should assume that it does come out in 2026.

Operator: Okay, thank you.

Speaker #16: Okay . Thank you .

Gabriella Vitello: Our next question will come from Paulina Rojas Schmidt with Green Street. Your line is open.

Speaker #2: And our next question will come from Paulina Rojas with Green Street. Your line is open.

Paulina Rojas Schmidt: Thank you. I only have one question. The strong on the ground fundamentals you have described extensively in this call, I don't think they have been reflected in the year-to-date performance of the stock. What do you see as the main drivers behind that share pullback? What would be your counterarguments to the market's reaction?

Speaker #18: Thank you . I only have one question . And the strong on the ground fundamentals you have described extensively in this call . I don't think they have been reflected in the year to date performance of the stock .

Speaker #18: So, what do you see as the main drivers behind that share pullback? And what would be your counterarguments to the market's reaction?

Speaker #4: I wish I could control our stock performance. Can't we say we are doing as good a job as we can in providing additional clarity?

Operator: I wish I could control our stock performance. Can't. We are doing as good a job as we can. It's providing additional clarity, and I think this will be important, of top-line growth hitting the bottom line. What we have seen, and I've been through more than a few cycles, is if we take care of our day-to-day business, meaning leasing and acquisitions, sooner or later, the market follows. I always prefer if it's sooner. I'd say over the last six months, it's been a little frustrating that it's taking longer for us than I think is deserved. You know, Liberation Day was very disconcerting for a lot of different folks. The immediate conclusion that discretionary retail was going to somehow be significantly impacted and high rent street retail even more so turned out to be dead wrong.

Speaker #4: And I think this will be important of top line growth . Hitting the bottom line . But what we have seen , and I've been through more than a few cycles , is if we take care of our day to day business , meaning leasing and acquisitions sooner or later , the market follows .

Speaker #4: I always prefer if it's sooner, and I'd say over the last six months it's been a little frustrating that it's taking longer for us than I think is deserved. But, you know, Liberation Day was very disconcerting for a lot of different folks.

Speaker #4: And the immediate conclusion that discretionary retail was going to somehow be significantly impacted, and high-rent street retail even more so, turned out to be dead wrong.

Operator: Our retailers have done a fantastic job of navigating around supply chain, and the consumer has hung in there. Now, whether it takes us three months, six months, or nine months, sooner or later, what we have found is shareholders get it. When we're posting the kind of results that we are at the real estate level, I'm going to rely on you, Paulina, to get the story out of what you saw in Chicago, what is going on in San Francisco, what is happening certainly in M Street and things like that. When people see it with their own eyes, then sooner or later, it shows up. If we continue to deliver at the property levels, both in terms of internal growth, external growth, we've seen time and again, the stock recovers. Not fast enough for my impatience, but overall, it tends to work. I believe it will.

Speaker #4: Our retailers have done a fantastic job of navigating around supply chain and the consumer has hung in there . Now , whether it takes us three months , six months or nine months , sooner or later , what we have found is shareholders get it .

Speaker #4: And when we're posting the kind of results that we are at the real estate level , well , I'm going to rely on you , Paulina , to get the story out of what you saw in Chicago .

Speaker #4: What is going on in San Francisco? What is happening, certainly on M Street and things like that? Because when people see it with their own eyes, then sooner or later it shows up.

Speaker #4: And if we continue to deliver at the property levels , both in terms of internal growth , external growth , we've seen time and again the stock recovers , not fast enough for my impatience , but overall it tends to work .

Speaker #4: And so I believe it will. That being said, I'd rather it be sooner than later.

Operator: That being said, I'd rather it be sooner than later.

Gabriella Vitello: Okay. Thank you. Hopefully, you're right and things go your way.

Speaker #18: Okay, well, thank you. Hopefully, you’re right, and things go your way.

Operator: We're counting on Green Street to help us.

Speaker #4: We're counting on Green Street to help.

Speaker #11: Us .

Operator: Nice point.

Speaker #19: Show .

Operator: Actually, one thing.

John Gottfried: Did you have a follow-up? Go.

Speaker #4: Oh, did you have a follow-up? Go!

Operator: Oh, my apologies.

Speaker #2: Oh , my apologies .

Operator: All right. I'm going to add one other thing to help Green Street and everyone else. John may be chiming in. One area that continues to frustrate me is leasing spreads. We have said in the past, not all spreads are created equal. John, why don't you chime in just quickly because we have a minute or two?

Speaker #11: No .

Speaker #4: So, I am going to add one other thing to help Green Street and everyone else. And John, maybe chime in. One area that continues to frustrate me is leasing spreads.

Speaker #4: We have said in the past that not all spreads are created equal. John, why don't you chime in quickly? Because we have a minute or two.

John Gottfried: Yeah. I think where, you know, we look at that calculation, there's lots of metrics out there. I think the one that Ken mentioned, not created equal, and we have anyone interested, we have a page in our deck, but the simplest form that if we look at, and we have both of them, a suburban lease and a street retail lease, that we would need to accomplish the same growth rate that from the time the lease started to the time we get to mark that to market, we would need probably more than double the spread that we get from suburban than we would on the street because of the 3% contractual growth that's part of the street piece. That's one metric that I think that we want to keep reminding folks that we have the 3% contractual growth.

Speaker #7: Yeah . And I think we're , you know , we look at that , that calculation , there's lots of metrics out there .

Speaker #7: I think the one that Ken mentioned is 'Not Created Equal.' And we have anyone interested. We have a page in our deck.

Speaker #7: But at the simplest form that if we look at and we have both of them , a suburban lease and a street retail lease that we would need to accomplish the same growth rate , that from the time the lease started to the time we get to to mark that , to market , we would need probably more than double the spread that we get from suburban than we would on the street because of the 3% contractual growth .

Speaker #7: That's part of the the street piece . So that's the one one metric that I think that we want to keep reminding folks that we have the 3% contractual growth .

John Gottfried: When you look at a spread, that sort of ignores what you have done historically.

Speaker #7: And when you look at a spread that sort of ignores what you have done historically.

Operator: Paulina, you can add that to your thoughtful pieces. Operator, I think that concludes all of the questions. I'd like to thank everybody for taking the time to meet with us. Thank you to the team for producing some extraordinary results.

Speaker #11: So .

Speaker #4: , Paulina , you can add that to your thoughtful pieces . And , operator , I think that concludes all of the questions .

Speaker #4: So I’d like to thank everybody for taking the time to meet with us. Thank you to the team for producing some extraordinary results.

Gabriella Vitello: This concludes today's conference call. Thank you for participating, and you may now disconnect.