

     As filed with the Securities and Exchange Commission on January 5, 1999

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549


                                    FORM 8-K

                                 CURRENT REPORT

     Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934


       Date of Report (Date of Earliest Event Reported) December 31, 1998


                               ACADIA REALTY TRUST
             (Exact name of registrant as specified in its charter)


Maryland                          1-12002                             23-2715194
--------------------------------------------------------------------------------
(State or other                   (Commission                (I.R.S. Employer
jurisdiction of                   File Number)               Identification No.)
incorporation)


20 Soundview Marketplace
Port Washington, New York                                               11050   
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(Address of principal executive offices)                              (Zip Code)


                                 (516) 767-8830
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              (Registrant's telephone number, including area code)


--------------------------------------------------------------------------------
          (Former name or former address, if changed since last report)









792154.3


<PAGE>



ITEM 5.           Other Events

         On December 31, 1998, the Registrant  entered into an agreement,  among
the Registrant,  Jack  Wertheimer,  Jr. and Marvin L. Slomowitz (the "Settlement
Agreement")  with respect to certain legal actions brought by Mr.  Wertheimer in
federal  district court and in state court stemming from the  termination of Mr.
Wertheimer's employment with the Registrant.

         The Settlement  Agreement  provides for, among other things, (i) mutual
releases of the parties thereto,  (ii)  indemnification by the Registrant of Mr.
Wertheimer for actions taken by him as an officer of the Registrant  (other than
fraudulent conduct), and (iii) a payment of settlement consideration as follows:
(w)  $1,000,000 by December 31, 1998, (x) $900,000 on or prior to April 1, 1999,
and (y) five (5) annual payments of $200,000 each for a period of five (5) years
commencing January 10, 2000 (the "Annual Payments"). The Annual Payments will be
secured by a standby  letter of credit and are  subject to  acceleration  by Mr.
Wertheimer upon a default of the Registrant.

         Mr.  Wertheimer,  the  former  President  of the  Registrant,  filed  a
complaint  against the  Registrant,  its  Trustees and the  Registrant's  former
in-house General Counsel and Chief Financial  Officer in state court in December
1994,  followed by a complaint in federal  district  court in November 1995. The
federal  complaint,  which, like the state court action, was filed in connection
with the  termination  of Mr.  Wertheimer's  employment,  included  a civil RICO
action in which Mr. Wertheimer alleged that the Board of Trustees conspired with
Mr.  Slomowitz  (the  "Principal  Shareholder")  to terminate  Mr.  Wertheimer's
employment.  Further,  Mr.  Wertheimer  alleged that the  defendants  engaged in
securities  fraud in connection with the  Registrant's  initial public offering,
and that the Principal  Shareholder  had defrauded or overcharged the Registrant
in various corporate  transactions.  The federal complaint sought treble damages
under RICO, as well as damages arising from Mr.  Wertheimer's  alleged  wrongful
termination  of  employment,  invasion of  privacy,  intentional  infliction  of
emotional distress, fraud and misrepresentation. The motions to dismiss the RICO
and tort claims filed by the Registrant and the other defendants were granted in
part and denied in part by the court in December 1996.  Specifically,  the court
dismissed Mr. Wertheimer's claims for wrongful discharge,  fraud, negligence and
misrepresentation,  but declined to dismiss the  remainder of the claims at that
time.  In their  answer to the  federal  complaint,  the  defendants  denied all
allegations of wrongdoing, and the Registrant and the Principal Shareholder also
filed  counterclaims  against Mr.  Wertheimer  alleging that Mr. Wertheimer made
material  misrepresentations  in  connection  with his hiring and  breached  his
employment contract and fiduciary duties to the Registrant.

         On December 31, 1998, the Registrant issued a press release,  a copy of
which is attached hereto as Exhibit 99.1, announcing the Settlement Agreement.



792154.3

<PAGE>



ITEM 7.      Financial Statements, Pro Forma Financial Information and Exhibits.

(c)      Exhibits.

10.1     Settlement  Agreement,  dated December 31, 1998,  among the Registrant,
         Jack Wertheimer, Jr. and Marvin L. Slomowitz.

99.1     Press Release, dated December 31, 1998.

792154.3
                                        2

<PAGE>



                                   SIGNATURES

         Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.


                                       ACADIA REALTY TRUST
                                            (Registrant)


Date: January 4, 1999                  By: /s/ Kenneth F. Bernstein            
                                          -------------------------------------
                                          Name:  Kenneth F. Bernstein
                                          Title: President

792154.3
                                        3
