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Financial Instruments and Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2023

Fair Value Disclosures [Abstract]

Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis

The following table presents the Company’s fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis (in thousands):

		September 30, 2023												December 31, 2022
		Level 1				Level 2				Level 3				Level 1				Level 2				Level 3
Assets
Money market funds		$	—			$	—			$	—			$	—			$	—			$	—
Derivative financial instruments			—				74,479				—				—				54,902				—
Marketable equity securities			35,197				—				—				85,403				—				—
Liabilities
Derivative financial instruments			—				—				—				—				(46	)			—

Schedule realized and unrealized gain (loss) on marketable securities

The following table represents the realized and unrealized gain (loss) on marketable securities included in Realized and unrealized holding gains on investments and other on the Company's condensed consolidated statements of operations (in thousands):

	Three Months Ended September 30,								Nine Months Ended September 30,
	2023				2022				2023				2022
Realized gain on marketable securities, net	$	2,371			$	—			$	2,371			$	—
Less: previously recognized unrealized gains on marketable securities sold during the period		(2,371	)			—				(2,371	)			—
Unrealized gains on marketable securities still held at the end of the period and through the disposition date on marketable securities sold during the period		1,627				(7,671	)			1,282				(21,947	)
Gain on Marketable securities, net	$	1,627			$	(7,671	)		$	1,282			$	(21,947	)

Schedule of Items Measured at Fair Value on Nonrecurring Basis

During 2022, the Company reduced its holding period and intended use, and projected operating income at certain properties. As a result, several impairments were recorded. Impairment charges for the periods presented are as follows (in thousands):

Impairment Charge (a)

Property and Location

Owner

Triggering Event

Effective Date

Total

Acadia's Share

2023 Impairment Charges

146 Geary Street, San Francisco, CA

Fund IV

Reduced holding period (Note 7)

Sept 30, 2023

$

3,686

$

852

2022 Impairment Charges

146 Geary Street, San Francisco, CA

Fund IV

Reduced projected operating income

Sept 30, 2022

$

12,435

$

2,875

717 N. Michigan Avenue, Chicago, IL

Fund IV

Reduced holding period and intended use

Sept 30, 2022

20,876

4,827

Total 2022 Impairment Charges

$

33,311

$

7,702

(a)The fair value of 717 N. Michigan Avenue was based on an observable contract to sell the asset, less estimated costs to sell. The Company estimated the fair value of 146 Geary Street based on a discounted cash flow analysis using a range of discount rates from 5.00% to 7.75% and a range of capitalization rates from 4.25% to 5.75%. As significant inputs to the models are unobservable, the Company determined that the value determined for these properties falls within Level 3 of the fair value reporting hierarchy.

Schedule of Derivative Financial Instruments

The Company had the following interest rate swaps and caps for the periods presented (dollars in thousands):

										Strike Rate								Fair Value
Derivative Instrument		Aggregate Notional Amount				Effective Date		Maturity Date		Low				High		Balance Sheet Location		September 30, 2023				December 31, 2022
Core
Interest Rate Swaps		$	—													Other Liabilities		$	—			$	(46	)
Interest Rate Swaps			856,000			May 2022 - May 2023		Mar 2025 - Jul 2030		1.98%		—		3.61%		Other Assets			60,367				40,884
		$	856,000															$	60,367			$	40,838
Fund II
Interest Rate Swap		$	50,000			Jan 2023		Dec 2029		3.23%		—		3.23%		Other Assets		$	2,678			$	1,108
Fund III
Interest Rate Cap		$	33,000			Sep 2023		Oct 2025		5.50%		—		5.50%		Other Assets		$	149			$	232
Fund IV
Interest Rate Cap		$	57,000			Dec 2022		Dec 2023		3.00%		—		3.00%		Other Assets		$	255			$	1,093
Fund V
Interest Rate Swaps		$	344,890			Apr 2022 - Jul 2023		Mar 2024- Dec 2027		1.14%		—		4.54%		Other Assets		$	10,555			$	11,585
Interest Rate Caps			72,588			Jan 2023 - Aug 2023		Jan 2024 - Sep 2025		3.64%		—		5.00%		Other Assets			475				—
		$	417,478															$	11,030			$	11,585
Total asset derivatives																		$	74,479			$	54,902
Total liability derivatives																		$	—			$	(46	)

Schedule of Other Financial Instruments Carrying Values and Fair values

The Company’s other financial instruments had the following carrying values and fair values as of the dates shown (dollars in thousands, inclusive of amounts attributable to noncontrolling interests where applicable):

						September 30, 2023								December 31, 2022
		Level				Carrying Amount				Estimated Fair Value				Carrying Amount				Estimated Fair Value
Notes Receivable (a)			3			$	123,813			$	121,976			$	123,903			$	122,716
City Point Loan (a)			3				66,741				65,209				65,945				65,856
Mortgage and Other Notes Payable (a)			3				969,716				949,550				935,917				906,348
Investment in non-traded equity securities (b)			3				4,242				4,784				4,160				5,593
Unsecured notes payable and Unsecured line of credit (c)			2				862,553				860,069				869,497				868,399

(a)The Company determined the estimated fair value of these financial instruments using a discounted cash flow model with rates that take into account the credit of the borrower or tenant, where applicable, and changes in interest rates. The Company also considered the value of the underlying collateral, taking into account the quality of the collateral, the credit quality of the borrower, the time until maturity and the current market interest rate environment. Amounts exclude discounts and loan costs. The estimated market rates are between 6.06% to 14.74% for the Company's notes receivable and City Point Loan, and 6.07% to 10.72% for the Company's mortgage and other notes payable, depending on the attributes of the specific loans.

(b)Represents the Operating Partnership’s cost-method investment in Fifth Wall (Note 4).

(c)The Company determined the estimated fair value of the unsecured notes payable and unsecured line of credit using quoted market prices in an open market with limited trading volume where available. In cases where there was no trading volume, the Company determined the estimated fair value using a discounted cash flow model using a rate that reflects the average yield of similar market participants.

X

- Definition

Tabular disclosure of financial instruments measured at fair value, including those classified in shareholders' equity measured on a recurring or nonrecurring basis. Disclosures include, but are not limited to, fair value measurements recorded and the reasons for the measurements, level within the fair value hierarchy in which the fair value measurements are categorized and transfers between levels 1 and 2. Nonrecurring fair value measurements are those that are required or permitted in the statement of financial position in particular circumstances.

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