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Real Estate | 3 Months Ended
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Mar. 31, 2023
Acquisition And Disposition Of Properties And Discontinued Operations [Abstract] |
Real Estate | 2. Rea l Estate The Company’s consolidated real estate is comprised of the following for the periods presented (in thousands):
|  | March 31, |  |  | December 31, |
|  | 2023 |  |  | 2022 |
Land |  | $ | 881,717 |  |  | $ | 817,802 |
Buildings and improvements |  |  | 2,995,451 |  |  |  | 2,987,594 |
Tenant improvements |  |  | 235,442 |  |  |  | 216,899 |
Construction in progress |  |  | 13,299 |  |  |  | 21,027 |
Right-of-use assets - finance leases (Note 11) |  |  | 25,086 |  |  |  | 25,086 |
Total |  |  | 4,150,995 |  |  |  | 4,068,408 |
Less: Accumulated depreciation and amortization |  |  | (749,627 | ) |  |  | (725,143 | )
Operating real estate, net |  |  | 3,401,368 |  |  |  | 3,343,265 |
Real estate under development |  |  | 117,914 |  |  |  | 184,602 |
Net investments in real estate |  | $ | 3,519,282 |  |  | $ | 3,527,867 |
Acquisitions and Foreclosure During the three months ended March 31, 2023 and the year ended December 31, 2022, the Company acquired (through purchase, investment or foreclosure) the following consolidated retail properties and other real estate investments (dollars in thousands):
Property and Location |  | Percent Acquired |  | Date of Acquisition |  | Purchase Price |
2023 Acquisitions |  |  |  |  |  |  |
None |  |  |  |  |  |  |
2022 Acquisitions and Foreclosure |  |  |  |  |  |  |
Core |  |  |  |  |  |  |
121 Spring Street - New York, NY |  | 100% |  | Jan 12, 2022 |  | $ | 39,637 |
Williamsburg Collection - Brooklyn, NY (a) |  | (a) |  | Feb 18, 2022 |  |  | 97,750 |
8833 Beverly Boulevard - West Hollywood, CA |  | 100% |  | Mar 2, 2022 |  |  | 24,117 |
Henderson Avenue Portfolio - Dallas, TX (b) |  | 100% |  | Apr 18, 2022 |  |  | 85,192 |
Subtotal Core |  |  |  |  |  |  | 246,696 |
Fund III |  |  |  |  |  |  |
640 Broadway - New York, NY (Foreclosure) (c) |  | 100% |  | Jan 26, 2022 |  |  | 59,207 |
Subtotal Fund III |  |  |  |  |  |  | 59,207 |
Total 2022 Acquisitions and Foreclosure |  |  |  |  |  | $ | 305,903 |
a) The Williamsburg Collection entity is a variable interest entity and the Company consolidates the entity because it is the entity's primary beneficiary (Note 15). The Company invested $2.8 million in its 49.99% equity interest and, through a separate lending subsidiary, provided a $64.1 million first mortgage loan and a $30.9 million mezzanine loan to subsidiaries of the venture (such equity and loans have been eliminated in consolidation). Pursuant to the entity’s operating agreement, the venture partner has a one-time right to put its 50.01% interest in the entity (the "Williamsburg NCI", which is further described in Note 10) to the Company for fair value at a future date. Given the preferred rate of return of the Company embedded in its equity interests and the accruing debt senior to the equity, the Company did not attribute any initial redemption value to the Williamsburg NCI and recognized a bargain purchase gain of $1.2 million, which is included in Realized and unrealized holding gains on investments and other in the consolidated statements of income. b) The Henderson Avenue Portfolio comprises 14 operating retail assets, one residential building and two development and re development sites. One of the development sites was sold in October 2022. c) The entity was previously accounted for as an equity method investment until an affiliate of Fund III acquired the venture partner's interest in a foreclosure action. Fund III now indirectly owns 100% of the entity and consolidates it (Note 4). For the year ended December 31, 2022, the Company capitalized $1.2 million of acquisition costs in connection with the 2022 Acquisitions and Foreclosure. In addition, during the year ended December 31, 2022, the Company expensed $2.0 million o f acquisition costs related to the Williamsburg Portfolio (including a $1.5 million acquisition fee paid to an affiliate of a joint venture partner), consistent with the application of transaction costs in a business combination (Note 10). Acquisition costs that were expensed are included in General and administrative expenses in the consolidated statements of income. During the year ended December 31, 2022, the Company assumed a $36.0 million mortgage with the consolidation of 640 Broadway (Note 7). Purchase Price Allocations The purchase prices for the 2022 Acquisitions and Foreclosure were allocated to the acquired assets and assumed liabilities based on their estimated relative fair values at the dates of acquisition. The following table summarizes the allocation of the purchase price of properties acquired during the periods presented (in thousands):
|  | Three Months Ended March 31, |  |  | Year Ended December 31, |
|  | 2023 |  |  | 2022 |
Net Assets Acquired |  |  |  |  |  |
Land |  | $ | — |  |  | $ | 119,898 |
Buildings and improvements |  |  | — |  |  |  | 168,862 |
Acquisition-related intangible assets (Note 6) |  |  | — |  |  |  | 29,016 |
Accounts receivable, prepaids and other assets |  |  | — |  |  |  | 4,077 |
Accounts payable and other liabilities |  |  | — |  |  |  | (661 | )
Acquisition-related intangible liabilities (Note 6) |  |  | — |  |  |  | (14,126 | )
Net assets acquired |  | $ | — |  |  | $ | 307,066 |
Consideration |  |  |  |  |  |
Cash |  | $ | — |  |  | $ | 242,633 |
Carrying value of note receivable exchanged in foreclosure (Note 3) |  |  | — |  |  |  | 5,416 |
Existing interest in previously unconsolidated investment (Note 4) |  |  | — |  |  |  | 17,822 |
Debt assumed |  |  | — |  |  |  | 35,970 |
Liabilities assumed |  |  | — |  |  |  | 4,062 |
Total consideration |  |  | — |  |  |  | 305,903 |
Gain on bargain purchase |  |  | — |  |  |  | 1,163 |
|  | $ | — |  |  | $ | 307,066 |
The Company determines the fair value of the individual components of income producing real estate asset acquisitions primarily through calculating the "as-if vacant" value of a building, using an income approach, which relies significantly upon internally determined assumptions. The Company has determined that these estimates primarily rely on Level 3 inputs, which are unobservable inputs based on our own assumptions. The most significant assumptions used in calculating the "as-if vacant" value for acquisition activity during 2022 is as follows:
|  | 2023 |  |  | 2022 |
|  | Low |  | High |  |  | Low |  | High |
Exit Capitalization Rate |  |  | — |  |  | — |  |  |  | 4.25 | % |  | 7.25 | %
Annual net rental rate per square foot on acquired buildings |  | $ | — |  | $ | — |  |  | $ | 20.00 |  | $ | 825.00 |
Annual net rental rate per square foot on acquired ground lease |  | $ | — |  | $ | — |  |  | $ | — |  | $ | — |
The estimate of the portion of the "as-if vacant" value that is allocated to the land underlying the acquired real estate relies on Level 3 inputs and is primarily determined by reference to recent comparable transactions. Dispositions During the three months ended March 31, 2023 and the year ended December 31, 2022, the Company disposed of the following consolidated properties and other real estate investments (in thousands):
Property and Location |  | Owner |  | Date Sold |  | Sale Price |  |  | Gain (Loss) on Sale |
2023 Dispositions |  |  |  |  |  |  |  |  |  |
None |  |  |  |  |  |  |  |  |  |
2022 Dispositions |  |  |  |  |  |  |  |  |  |
NE Grocer Portfolio (Selected Assets) - Pennsylvania |  | Fund IV |  | Jan 26, 2022 Mar 4, 2022 |  | $ | 45,350 |  |  | $ | 13,784 |
New Towne (Parcel) - Canton, MI |  | Fund V |  | Feb 1, 2022 |  |  | 2,231 |  |  |  | 1,776 |
Cortlandt Crossing - Westchester County, NY |  | Fund III |  | Feb 9, 2022 |  |  | 65,533 |  |  |  | 13,255 |
Lincoln Place - Fairview Heights, IL |  | Fund IV |  | May 25, 2022 |  |  | 40,670 |  |  |  | 12,216 |
Wake Forest Crossing - Wake Forest, NC |  | Fund IV |  | Aug 24, 2022 |  |  | 38,919 |  |  |  | 8,885 |
Henderson Avenue (Parcel) - Dallas, TX |  | Core |  | Oct 7, 2022 |  |  | 3,050 |  |  |  | (194 | )
330-340 River Street - Cambridge, MA |  | Core |  | Dec 13, 2022 |  |  | 26,400 |  |  |  | 7,439 |
Total 2022 Dispositions |  |  |  |  |  | $ | 222,153 |  |  | $ | 57,161 |
The aggregate rental revenue, expenses and pre-tax income reported within continuing operations for the aforementioned consolidated properties that were sold as well as the lease that was terminated (Note 11) during the three months ended March 31, 2023 and 2022 were as follows (in thousands):
|  | Three Months Ended March 31, |  |
|  | 2023 |  |  | 2022 |  |
Revenues |  | $ | — |  |  | $ | 3,240 |  |
Expenses |  |  | — |  |  |  | (2,209 | ) |
Gain on disposition of properties |  |  | — |  |  |  | 28,815 |  |
Net income attributable to noncontrolling interests |  |  | — |  |  |  | (22,724 | ) |
Net income attributable to Acadia |  | $ | — |  |  | $ | 7,122 |  |
Properties Held for Sale At March 31, 2023, the Company had one property under contract for sale with assets totaling $11.1 million, which was probable of disposition. The property was classified as "held for sale" on the Company's consolidated balance sheets at March 31, 2023 and December 31, 2022. The Company has received $2.6 million of non-refundable deposits under the sales contract, which is recorded in Other liabilities on the Company's consolidated balance sheets. Real Estate Under Development and Construction in Progress Real estate under development represents the Company’s consolidated properties that have not yet been placed into service while undergoing substantial development or construction. Development activity for the Company’s consolidated properties comprised the following during the periods presented (dollars in thousands):
|  | January 1, 2023 |  |  | Three Months Ended March 31, 2023 |  |  | March 31, 2023 |
|  | Number of Properties |  |  | Carrying Value |  |  | Transfers In |  |  | Capitalized Costs |  |  | Transfers Out |  |  | Number of Properties |  |  | Carrying Value |
Core |  |  | 2 |  |  | $ | 54,817 |  |  | $ | — |  |  | $ | 1,393 |  |  | $ | — |  |  |  | 2 |  |  | $ | 56,210 |
Fund II |  |  | — |  |  |  | 34,072 |  |  |  | — |  |  |  | 1,107 |  |  |  | — |  |  |  | — |  |  |  | 35,179 |
Fund III |  |  | 1 |  |  |  | 25,798 |  |  |  | — |  |  |  | 727 |  |  |  | — |  |  |  | 1 |  |  |  | 26,525 |
Fund IV (a) |  |  | 1 |  |  |  | 69,915 |  |  |  | — |  |  |  | — |  |  |  | 69,915 |  |  |  | — |  |  |  | — |
Total |  |  | 4 |  |  | $ | 184,602 |  |  | $ | — |  |  | $ | 3,227 |  |  | $ | 69,915 |  |  |  | 3 |  |  | $ | 117,914 |
a) Transfers out include $69.9 million related to one Fund IV property that was transferred out of development.
|  | January 1, 2022 |  |  | Year Ended December 31, 2022 |  |  | December 31, 2022 |
|  | Number of Properties |  |  | Carrying Value |  |  | Transfers In |  |  | Capitalized Costs |  |  | Transfers Out |  |  | Number of Properties |  |  | Carrying Value |
Core |  |  | — |  |  | $ | 42,517 |  |  | $ | 9,610 |  |  | $ | 2,690 |  |  | $ | — |  |  |  | 2 |  |  | $ | 54,817 |
Fund II (a) |  |  | — |  |  |  | 35,125 |  |  |  | — |  |  |  | 503 |  |  |  | 1,556 |  |  |  | — |  |  |  | 34,072 |
Fund III |  |  | 1 |  |  |  | 24,296 |  |  |  | — |  |  |  | 1,502 |  |  |  | — |  |  |  | 1 |  |  |  | 25,798 |
Fund IV (b) |  |  | 1 |  |  |  | 101,835 |  |  |  | — |  |  |  | 215 |  |  |  | 32,135 |  |  |  | 1 |  |  |  | 69,915 |
Total |  |  | 2 |  |  | $ | 203,773 |  |  | $ | 9,610 |  |  | $ | 4,910 |  |  | $ | 33,691 |  |  |  | 4 |  |  | $ | 184,602 |
a) Transfers out include $1.6 million related to a portion of one Fund II property that was transferred out of development. b) Transfers out include $13.4 million related to a portion of one Fund IV property that was transferred out of development and an impairment charge totaling $18.7 million on one Fund IV development property (Note 8). The number of properties in the tables above refers to projects comprising the entire property under development; however, certain projects represent a portion of a property. At March 31, 2023, consolidated development projects included: portions of the Henderson Portfolio for the Core Portfolio and Broad Hollow Commons at Fund III. In addition, at March 31, 2023, the Company had one Core unconsolidated development project, 1238 Wisconsin Avenue. During the three months ended March 31, 2023, the Company placed the remainder of one Fund IV property, 717 N. Michigan Avenue, into service. At December 31, 2022, consolidated development projects included: portions of the Henderson Portfolio for the Core Portfolio, Broad Hollow Commons at Fund III, and a portion of 717 N. Michigan Avenue at Fund IV. In addition, at December 31, 2022, the Company had one Core unconsolidated development project, 1238 Wisconsin Avenue. During the year ended December 31, 2022, the Company: • placed a portion of one Fund IV property, 717 N. Michigan Avenue, into service in the first quarter; • placed a portion of one Fund II property, City Point, into service in the fourth quarter; and • placed two Core properties in the Henderson Portfolio into development in the second quarter. Construction in progress pertains to construction activity at the Company’s operating properties that are in service and continue to operate during the construction period.

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- Definition Acquisition and disposition of properties and discontinued operations. + References No definition available. + Details
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- Definition The entire disclosure for certain real estate investment financial statements, real estate investment trust operating support agreements, real estate owned, retail land sales, time share transactions, as well as other real estate related disclosures. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 970 -URI https://asc.fasb.org/topic&trid=2156125 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 978 -URI https://asc.fasb.org/topic&trid=2134977 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 976 -URI https://asc.fasb.org/topic&trid=2134846 Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 974 -URI https://asc.fasb.org/topic&trid=2156429 Reference 5: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 972 -URI https://asc.fasb.org/topic&trid=2134617 + Details
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