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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024

or

☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 001-12002

ACADIA REALTY TRUST

(Exact name of registrant in its charter)

Maryland (State or other jurisdiction of incorporation or organization) |  | 23-2715194 (I.R.S. Employer Identification No.)
411 THEODORE FREMD AVENUE, SUITE 300, RYE, NY (Address of principal executive offices) | 10580 (Zip Code)

(914) 288-8100

(Registrant’s telephone number, including area code)

Title of class of registered securities | Trading symbol | Name of exchange on which registered
Common shares of beneficial interest, par value $0.001 per share | AKR | The New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ |  | No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ |  | No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer | ☒ | Accelerated Filer | ☐ | Emerging Growth Company | ☐
Non-accelerated Filer | ☐ | Smaller Reporting Company | ☐ |  |

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act) Yes ☐ No ☒

As of July 26, 2024 there were 105,331,061 commo n shares of beneficial interest, par value $0.001 per share (“Common Shares”), outstanding.

ACADIA REALTY TRUST AND SUBSIDIARIES

FORM 10-Q

INDEX

Item No. |  | Description |  | Page
|  | PART I - FINANCIAL INFORMATION |  |
1. |  | Financial Statements |  | 4
|  | Condensed Consolidated Balance Sheets (Unaudited) as of June 30, 2024 and December 31, 2023 |  | 4
|  | Condensed Consolidated Statements of Operations (Unaudited) for the Three and Six Months Ended June 30, 2024 and 2023 |  | 5
|  | Condensed Consolidated Statements of Comprehensive Income (Unaudited) for the Three and Six Months Ended June 30, 2024 and 2023 |  | 6
|  | Condensed Consolidated Statements of Changes in Equity (Unaudited) for the Three and Six Months Ended June 30, 2024 and 2023 |  | 7
|  | Condensed Consolidated Statements of Cash Flows (Unaudited) for the Six Months Ended June 30, 2024 and 2023 |  | 9
|  | Notes to Condensed Consolidated Financial Statements (Unaudited) |  | 11
2. |  | Management’s Discussion and Analysis of Financial Condition and Results of Operations |  | 40
3. |  | Quantitative and Qualitative Disclosures about Market Risk |  | 53
4. |  | Controls and Procedures |  | 55
|  | PART II - OTHER INFORMATION |  |
1. |  | Legal Proceedings |  | 56
1A. |  | Risk Factors |  | 56
2. |  | Unregistered Sales of Equity Securities and Use of Proceeds |  | 56
3. |  | Defaults Upon Senior Securities |  | 56
4. |  | Mine Safety Disclosures |  | 56
5. |  | Other Information |  | 56
6. |  | Exhibits |  | 56
|  | Signatures |  | 58

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements contained in this Quarterly Report on Form 10-Q (this “Report”) of Acadia Realty Trust, a Maryland real estate investment trust, (the “Company”) may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements, which are based on certain assumptions and describe our future plans, strategies and expectations are generally identifiable by the use of the words such as “may,” “will,” “should,” “expect,” “anticipate,” “estimate,” “believe,” “intend” or “project,” or the negative thereof, or other variations thereon or comparable terminology. Forward-looking statements involve known and unknown risks, uncertainties and other factors that could cause our actual results and financial performance to be materially different from future results and financial performance expressed or implied by such forward-looking statements, including, but not limited to: (i) macroeconomic conditions, including due to geopolitical conditions and instability, which may lead to a disruption of or lack of access to the capital markets, disruptions and instability in the banking and financial services industries and rising inflation; (ii) our success in implementing our business strategy and our ability to identify, underwrite, finance, consummate and integrate diversifying acquisitions and investments; (iii) changes in general economic conditions or economic conditions in the markets in which we may, from time to time, compete, and their effect on our revenues, earnings and funding sources; (iv) increases in our borrowing costs as a result of rising inflation, changes in interest rates and other factors; (v) our ability to pay down, refinance, restructure or extend our indebtedness as it becomes due; (vi) our investments in joint ventures and unconsolidated entities, including our lack of sole decision-making authority and our reliance on our joint venture partners’ financial condition; (vii) our ability to obtain the financial results expected from our development and redevelopment projects; (viii) our tenants’ ability and willingness to renew their leases with us upon expiration, our ability to re-lease our properties on the same or better terms in the event of nonrenewal or in the event we exercise our right to replace an existing tenant, and obligations we may incur in connection with the replacement of an existing tenant; (ix) our potential liability for environmental matters; (x) damage to our properties from catastrophic weather and other natural events, and the physical effects of climate change; (xi) the economic, political and social impact of, and uncertainty surrounding, any public health crisis, such as the COVID-19 Pandemic, which adversely affected the Company and its tenants’ business, financial condition, results of operations and liquidity; (xii) uninsured losses; (xiii) our ability and willingness to maintain our qualification as a real estate investment trust (“REIT”) in light of economic, market, legal, tax and other considerations; (xiv) information technology security breaches, including increased cybersecurity risks relating to the use of remote technology; (xv) the loss of key executives; and (xvi) the accuracy of our methodologies and estimates regarding environmental, social and governance (“ESG”) metrics, goals and targets, tenant willingness and ability to collaborate towards reporting ESG metrics and meeting ESG goals and targets, and the impact of governmental regulation on our ESG efforts.

The factors described above are not exhaustive and additional factors could adversely affect the Company’s future results and financial performance, including the risk factors discussed under the section captioned “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 and other periodic or current reports the Company files with the SEC, including those set forth under the headings “Item 1A. Risk Factors” and “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Report. These risks and uncertainties should be considered in evaluating any forward-looking statements contained or incorporated by reference herein. Any forward-looking statements speak only as of the date hereof. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any changes in the Company’s expectations with regard thereto or changes in the events, conditions or circumstances on which such forward-looking statements are based.

SPECIAL NOTE REGARDING CERTAIN REFERENCES

All references to “Notes” throughout the document refer to the Notes to the Condensed Consolidated Financial Statements of the registrant referenced in Part I, Item 1. Financial Statements.

3

PART I – FINANC IAL INFORMATION

ITEM 1. FINANCI AL STATEMENTS.

ACADIA REALTY TRUST AND SUBSIDIARIES

CONDENSED CONSOLIDATED B ALANCE SHEETS (UNAUDITED)

|  | June 30, |  |  | December 31, |
(in thousands, except share amounts) |  | 2024 |  |  | 2023 |
ASSETS |  |  |  |  |  |
Investments in real estate, at cost |  |  |  |  |  |
Operating real estate, net |  | $ | 3,446,912 |  |  | $ | 3,517,281 |
Real estate under development |  |  | 101,802 |  |  |  | 94,799 |
Net investments in real estate |  |  | 3,548,714 |  |  |  | 3,612,080 |
Notes receivable, net ($1,520 and $1,279 of allowance for credit losses as of June 30, 2024 and December 31, 2023, respectively) |  |  | 126,653 |  |  |  | 124,949 |
Investments in and advances to unconsolidated affiliates |  |  | 203,410 |  |  |  | 197,240 |
Other assets, net |  |  | 213,779 |  |  |  | 208,460 |
Right-of-use assets - operating leases, net |  |  | 27,748 |  |  |  | 29,286 |
Cash and cash equivalents |  |  | 31,915 |  |  |  | 17,481 |
Restricted cash |  |  | 23,139 |  |  |  | 7,813 |
Marketable securities |  |  | 21,668 |  |  |  | 33,284 |
Rents receivable, net |  |  | 54,012 |  |  |  | 49,504 |
Assets of properties held for sale |  |  | — |  |  |  | 11,057 |
Total assets (a) |  | $ | 4,251,038 |  |  | $ | 4,291,154 |
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY |  |  |  |  |  |
Liabilities: |  |  |  |  |  |
Mortgage and other notes payable, net |  | $ | 955,069 |  |  | $ | 930,127 |
Unsecured notes payable, net |  |  | 644,313 |  |  |  | 726,727 |
Unsecured line of credit |  |  | 96,446 |  |  |  | 213,287 |
Accounts payable and other liabilities |  |  | 218,095 |  |  |  | 229,375 |
Lease liability - operating leases |  |  | 29,964 |  |  |  | 31,580 |
Dividends and distributions payable |  |  | 20,285 |  |  |  | 18,520 |
Distributions in excess of income from, and investments in, unconsolidated affiliates |  |  | 7,301 |  |  |  | 7,982 |
Total liabilities (a) |  |  | 1,971,473 |  |  |  | 2,157,598 |
Commitments and contingencies (Note 9) |  |  |  |  |  |
Redeemable noncontrolling interests (Note 10) |  |  | 40,874 |  |  |  | 50,339 |
Equity: |  |  |  |  |  |
Acadia Shareholders' Equity |  |  |  |  |  |
Common shares, $0.001 par value per share, authorized 200,000,000 shares, issued and outstanding 105,266,580 and 95,361,676 shares, respectively |  |  | 105 |  |  |  | 95 |
Additional paid-in capital |  |  | 2,115,689 |  |  |  | 1,953,521 |
Accumulated other comprehensive income |  |  | 47,621 |  |  |  | 32,442 |
Distributions in excess of accumulated earnings |  |  | (381,945 | ) |  |  | (349,141 | )
Total Acadia shareholders’ equity |  |  | 1,781,470 |  |  |  | 1,636,917 |
Noncontrolling interests |  |  | 457,221 |  |  |  | 446,300 |
Total equity |  |  | 2,238,691 |  |  |  | 2,083,217 |
Total liabilities, redeemable noncontrolling interests, and equity |  | $ | 4,251,038 |  |  | $ | 4,291,154 |

(a)
Represents the consolidated assets and liabilities of Acadia Realty Limited Partnership (the "Operating Partnership"), which is a consolidated variable interest entity ("VIE") (Note 15). The Condensed Consolidated Balance Sheets include the following amounts related to our consolidated VIEs that are consolidated by the Operating Partnership: $1,654.5 million and $1,679.8 million of Operating real estate, net; $30.0 million and $28.9 million of Real estate under development; $91.1 million and $92.8 million of Investments in and advances to unconsolidated affiliates; $90.3 million and $101.7 million of Other assets, net; $2.2 million and $2.1 million of Right-of-use assets - operating leases, net; $20.7 million and $10.8 million of Cash and cash equivalents; $10.8 million and $7.0 million of Restricted cash; $23.9 million and $21.4 million of Rents receivable, net; $800.3 million and $764.6 million of Mortgage and other notes payable, net; $0.0 million and $80.5 million of Unsecured notes payable, net; $128.1 million and $127.2 million of Accounts payable and other liabilities; $2.3 million and $2.2 million of Lease liability- operating leases, net as of June 30, 2024 and December 31, 2023, respectively.

The accompanying notes are an integral part of these condensed consolidated financial statements (unaudited).

4

ACADIA REALTY TRUST AND SUBSIDIARIES

CONDENSED CONSOLIDATED STAT EMENTS OF OPERATIONS (UNAUDITED)

|  | Three Months Ended June 30, |  |  | Six Months Ended June 30, |
(in thousands, except per share amounts) |  | 2024 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
Revenues |  |  |  |  |  |  |  |  |  |  |  |
Rental |  | $ | 85,626 |  |  | $ | 88,141 |  |  | $ | 171,663 |  |  | $ | 168,878 |
Other |  |  | 1,628 |  |  |  | 1,807 |  |  |  | 6,947 |  |  |  | 2,909 |
Total revenues |  |  | 87,254 |  |  |  | 89,948 |  |  |  | 178,610 |  |  |  | 171,787 |
Expenses |  |  |  |  |  |  |  |  |  |  |  |
Depreciation and amortization |  |  | 34,281 |  |  |  | 34,056 |  |  |  | 69,221 |  |  |  | 67,229 |
General and administrative |  |  | 10,179 |  |  |  | 10,643 |  |  |  | 19,947 |  |  |  | 20,589 |
Real estate taxes |  |  | 9,981 |  |  |  | 11,381 |  |  |  | 22,327 |  |  |  | 22,860 |
Property operating |  |  | 15,781 |  |  |  | 14,210 |  |  |  | 34,877 |  |  |  | 29,343 |
Total expenses |  |  | 70,222 |  |  |  | 70,290 |  |  |  | 146,372 |  |  |  | 140,021 |
Gain (loss) on disposition of properties |  |  | 757 |  |  |  | — |  |  |  | (441 | ) |  |  | — |
Operating income |  |  | 17,789 |  |  |  | 19,658 |  |  |  | 31,797 |  |  |  | 31,766 |
Equity in earnings (losses) of unconsolidated affiliates |  |  | 4,480 |  |  |  | (1,437 | ) |  |  | 4,168 |  |  |  | (1,408 | )
Interest income |  |  | 5,413 |  |  |  | 4,970 |  |  |  | 10,651 |  |  |  | 9,788 |
Realized and unrealized holding (losses) gains on investments and other |  |  | (2,364 | ) |  |  | 1,815 |  |  |  | (4,415 | ) |  |  | 28,572 |
Interest expense |  |  | (23,581 | ) |  |  | (22,089 | ) |  |  | (47,290 | ) |  |  | (43,676 | )
Income (loss) from continuing operations before income taxes |  |  | 1,737 |  |  |  | 2,917 |  |  |  | (5,089 | ) |  |  | 25,042 |
Income tax provision |  |  | (155 | ) |  |  | (165 | ) |  |  | (186 | ) |  |  | (288 | )
Net income (loss) |  |  | 1,582 |  |  |  | 2,752 |  |  |  | (5,275 | ) |  |  | 24,754 |
Net loss attributable to redeemable noncontrolling interests |  |  | 2,292 |  |  |  | 1,091 |  |  |  | 4,846 |  |  |  | 3,166 |
Net (income) loss attributable to noncontrolling interests |  |  | (2,431 | ) |  |  | 5,433 |  |  |  | 5,141 |  |  |  | (5,284 | )
Net income attributable to Acadia shareholders |  | $ | 1,443 |  |  | $ | 9,276 |  |  | $ | 4,712 |  |  | $ | 22,636 |
Basic income per share |  | $ | 0.01 |  |  | $ | 0.09 |  |  | $ | 0.04 |  |  | $ | 0.23 |
Diluted income per share |  | $ | 0.01 |  |  | $ | 0.09 |  |  | $ | 0.04 |  |  | $ | 0.23 |
Weighted average shares for basic income per share |  |  | 103,592 |  |  |  | 95,260 |  |  |  | 102,860 |  |  |  | 95,225 |
Weighted average shares for diluted income per share |  |  | 103,592 |  |  |  | 95,260 |  |  |  | 102,860 |  |  |  | 95,225 |

The accompanying notes are an integral part of these condensed consolidated financial statements (unaudited).

5

ACADIA REALTY TRUST AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

|  | Three Months Ended June 30, |  |  | Six Months Ended June 30, |
(in thousands) |  | 2024 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
Net income (loss) |  | $ | 1,582 |  |  | $ | 2,752 |  |  | $ | (5,275 | ) |  | $ | 24,754 |
Other comprehensive (loss) income: |  |  |  |  |  |  |  |  |  |  |  |
Unrealized gain (loss) on valuation of derivatives |  |  | 8,210 |  |  |  | 33,513 |  |  |  | 34,029 |  |  |  | 18,271 |
Reclassification of realized interest on swap derivatives |  |  | (8,850 | ) |  |  | (8,262 | ) |  |  | (17,683 | ) |  |  | (14,815 | )
Other comprehensive (loss) income |  |  | (640 | ) |  |  | 25,251 |  |  |  | 16,346 |  |  |  | 3,456 |
Comprehensive income |  |  | 942 |  |  |  | 28,003 |  |  |  | 11,071 |  |  |  | 28,210 |
Comprehensive loss attributable to redeemable noncontrolling interests |  |  | 2,292 |  |  |  | 1,091 |  |  |  | 4,846 |  |  |  | 3,166 |
Comprehensive (income) loss attributable to noncontrolling interests |  |  | (1,112 | ) |  |  | 34 |  |  |  | 3,974 |  |  |  | (5,702 | )
Comprehensive income attributable to Acadia shareholders |  | $ | 2,122 |  |  | $ | 29,128 |  |  | $ | 19,891 |  |  | $ | 25,674 |

The accompanying notes are an integral part of these condensed consolidated financial statements (unaudited).

6

ACADIA REALTY TRUST AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (UNAUDITED)

Three Months Ended June 30, 2024 and 2023

|  | Acadia Shareholders |  |  |  |  |  |  |  |  |  |
(in thousands, except per share amounts) |  | Common Shares |  |  | Share Amount |  |  | Additional Paid-in Capital |  |  | Accumulated Other Comprehensive Income (Loss) |  |  | Distributions in Excess of Accumulated Earnings |  |  | Total Common Shareholders’ Equity |  |  | Noncontrolling Interests |  |  | Total Equity |  |  | Redeemable Noncontrolling Interests |
Balance as of April 1, 2024 |  |  | 103,156 |  |  | $ | 103 |  |  | $ | 2,078,295 |  |  | $ | 46,942 |  |  | $ | (364,440 | ) |  | $ | 1,760,900 |  |  | $ | 465,169 |  |  | $ | 2,226,069 |  |  | $ | 45,462 |
Conversion of OP Units to Common Shares by limited partners of the Operating Partnership |  |  | 400 |  |  |  | — |  |  |  | 6,427 |  |  |  | — |  |  |  | — |  |  |  | 6,427 |  |  |  | (6,427 | ) |  |  | — |  |  |  | — |
Issuance of Common Shares, net |  |  | 1,652 |  |  |  | 2 |  |  |  | 28,273 |  |  |  | — |  |  |  | — |  |  |  | 28,275 |  |  |  | — |  |  |  | 28,275 |  |  |  |
Dividends/distributions declared ($0.18 per Common Share/OP Unit) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (18,948 | ) |  |  | (18,948 | ) |  |  | (1,228 | ) |  |  | (20,176 | ) |  |  | — |
City Point Loan accrued interest |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (2,290 | )
Employee and trustee stock compensation, net |  |  | 59 |  |  |  | — |  |  |  | 623 |  |  |  | — |  |  |  | — |  |  |  | 623 |  |  |  | 2,473 |  |  |  | 3,096 |  |  |  | — |
Capital call receivable |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 6,153 |  |  |  | 6,153 |  |  |  | — |
Noncontrolling interest distributions |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (7,960 | ) |  |  | (7,960 | ) |  |  | (6 | )
Noncontrolling interest contributions |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Comprehensive income (loss) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 679 |  |  |  | 1,443 |  |  |  | 2,122 |  |  |  | 1,112 |  |  |  | 3,234 |  |  |  | (2,292 | )
Reallocation of noncontrolling interests |  |  | — |  |  |  | — |  |  |  | 2,071 |  |  |  | — |  |  |  | — |  |  |  | 2,071 |  |  |  | (2,071 | ) |  |  | — |  |  |  | — |
Balance as of June 30, 2024 |  |  | 105,267 |  |  | $ | 105 |  |  | $ | 2,115,689 |  |  | $ | 47,621 |  |  | $ | (381,945 | ) |  | $ | 1,781,470 |  |  | $ | 457,221 |  |  | $ | 2,238,691 |  |  | $ | 40,874 |
Balance as of April 1, 2023 |  |  | 95,208 |  |  | $ | 95 |  |  | $ | 1,945,157 |  |  | $ | 30,003 |  |  | $ | (304,173 | ) |  | $ | 1,671,082 |  |  | $ | 459,181 |  |  | $ | 2,130,263 |  |  | $ | 63,269 |
Conversion of OP Units to Common Shares by limited partners of the Operating Partnership |  |  | 54 |  |  |  | — |  |  |  | 901 |  |  |  | — |  |  |  | — |  |  |  | 901 |  |  |  | (901 | ) |  |  | — |  |  |  | — |
Dividends/distributions declared ($0.18 per Common Share/OP Unit) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (17,160 | ) |  |  | (17,160 | ) |  |  | (1,341 | ) |  |  | (18,501 | ) |  |  | — |
City Point Loan |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (796 | )
City Point Loan accrued interest |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (2,345 | )
Employee and trustee stock compensation, net |  |  | 35 |  |  |  | — |  |  |  | 277 |  |  |  | — |  |  |  | — |  |  |  | 277 |  |  |  | 2,468 |  |  |  | 2,745 |  |  |  | — |
Noncontrolling interest distributions |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (5,492 | ) |  |  | (5,492 | ) |  |  | — |
Noncontrolling interest contributions |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 796 |
Comprehensive income (loss) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 19,852 |  |  |  | 9,276 |  |  |  | 29,128 |  |  |  | (34 | ) |  |  | 29,094 |  |  |  | (1,091 | )
Reallocation of noncontrolling interests |  |  | — |  |  |  | — |  |  |  | 1,444 |  |  |  | — |  |  |  | — |  |  |  | 1,444 |  |  |  | (1,444 | ) |  |  | — |  |  |  | — |
Balance as of June 30, 2023 |  |  | 95,297 |  |  | $ | 95 |  |  | $ | 1,947,779 |  |  | $ | 49,855 |  |  | $ | (312,057 | ) |  | $ | 1,685,672 |  |  | $ | 452,437 |  |  | $ | 2,138,109 |  |  | $ | 59,833 |

The accompanying notes are an integral part of these condensed consolidated financial statements (unaudited).

7

ACADIA REALTY TRUST AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (UNAUDITED)

Six Months Ended June 30, 2024 and 2023

|  | Acadia Shareholders |  |  |  |  |  |  |  |  |  |
(in thousands, except per share amounts) |  | Common Shares |  |  | Share Amount |  |  | Additional Paid-in Capital |  |  | Accumulated Other Comprehensive Income (Loss) |  |  | Distributions in Excess of Accumulated Earnings |  |  | Total Common Shareholders’ Equity |  |  | Noncontrolling Interests |  |  | Total Equity |  |  | Redeemable Noncontrolling Interest |
Balance at January 1, 2024 |  |  | 95,362 |  |  | $ | 95 |  |  | $ | 1,953,521 |  |  | $ | 32,442 |  |  | $ | (349,141 | ) |  | $ | 1,636,917 |  |  | $ | 446,300 |  |  | $ | 2,083,217 |  |  | $ | 50,339 |
Issuance of Common Shares, net |  |  | 8,639 |  |  |  | 9 |  |  |  | 142,114 |  |  |  | — |  |  |  | — |  |  |  | 142,123 |  |  |  | — |  |  |  | 142,123 |  |  |  | — |
Conversion of OP Units to Common Shares by limited partners of the Operating Partnership |  |  | 1,195 |  |  |  | 1 |  |  |  | 19,340 |  |  |  | — |  |  |  | — |  |  |  | 19,341 |  |  |  | (19,341 | ) |  |  | — |  |  |  | — |
Dividends/distributions declared ($0.36 per Common Share/OP Unit) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (37,516 | ) |  |  | (37,516 | ) |  |  | (2,681 | ) |  |  | (40,197 | ) |  |  | — |
City Point Loan |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | - |
City Point Loan accrued interest |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (4,613 | )
Employee and trustee stock compensation, net |  |  | 71 |  |  |  | — |  |  |  | 824 |  |  |  | — |  |  |  | — |  |  |  | 824 |  |  |  | 6,523 |  |  |  | 7,347 |  |  |  | — |
Noncontrolling interest distributions |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (13,425 | ) |  |  | (13,425 | ) |  |  | (6 | )
Noncontrolling interest contributions |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 43,709 |  |  |  | 43,709 |  |  |  | — |
Comprehensive income (loss) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 15,179 |  |  |  | 4,712 |  |  |  | 19,891 |  |  |  | (3,974 | ) |  |  | 15,917 |  |  |  | (4,846 | )
Reallocation of noncontrolling interests |  |  | — |  |  |  | — |  |  |  | (110 | ) |  |  | — |  |  |  | — |  |  |  | (110 | ) |  |  | 110 |  |  |  | — |  |  |  | — |
Balance at June 30, 2024 |  |  | 105,267 |  |  | $ | 105 |  |  | $ | 2,115,689 |  |  | $ | 47,621 |  |  | $ | (381,945 | ) |  | $ | 1,781,470 |  |  | $ | 457,221 |  |  | $ | 2,238,691 |  |  | $ | 40,874 |
Balance at January 1, 2023 |  |  | 95,121 |  |  | $ | 95 |  |  | $ | 1,945,322 |  |  | $ | 46,817 |  |  | $ | (300,402 | ) |  | $ | 1,691,832 |  |  | $ | 489,364 |  |  | $ | 2,181,196 |  |  | $ | 67,664 |
Conversion of OP Units to Common Shares by limited partners of the Operating Partnership |  |  | 91 |  |  |  | — |  |  |  | 1,533 |  |  |  | — |  |  |  | — |  |  |  | 1,533 |  |  |  | (1,533 | ) |  |  | — |  |  |  | — |
Dividends/distributions declared ($0.36 per Common Share/OP Unit) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (34,291 | ) |  |  | (34,291 | ) |  |  | (2,684 | ) |  |  | (36,975 | ) |  |  | — |
Acquisition of noncontrolling interest |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
City Point Loan |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (796 | )
City Point Loan accrued interest |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (4,665 | )
Employee and trustee stock compensation, net |  |  | 85 |  |  |  | — |  |  |  | 1,264 |  |  |  | — |  |  |  | — |  |  |  | 1,264 |  |  |  | 6,366 |  |  |  | 7,630 |  |  |  | — |
Noncontrolling interest distributions |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (76,360 | ) |  |  | (76,360 | ) |  |  | — |
Noncontrolling interest contributions |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 31,242 |  |  |  | 31,242 |  |  |  | 796 |
Comprehensive income (loss) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 3,038 |  |  |  | 22,636 |  |  |  | 25,674 |  |  |  | 5,702 |  |  |  | 31,376 |  |  |  | (3,166 | )
Reallocation of noncontrolling interests |  |  | — |  |  |  | — |  |  |  | (340 | ) |  |  | — |  |  |  | — |  |  |  | (340 | ) |  |  | 340 |  |  |  | — |  |  |  | — |
Balance at June 30, 2023 |  |  | 95,297 |  |  | $ | 95 |  |  | $ | 1,947,779 |  |  | $ | 49,855 |  |  | $ | (312,057 | ) |  | $ | 1,685,672 |  |  | $ | 452,437 |  |  | $ | 2,138,109 |  |  | $ | 59,833 |

The accompanying notes are an integral part of these condensed consolidated financial statements (unaudited).

8

ACADIA REALTY TRUST AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEM ENTS OF CASH FLOWS (UNAUDITED)

|  | Six Months Ended June 30, |
(in thousands) |  | 2024 |  |  | 2023 |
CASH FLOWS FROM OPERATING ACTIVITIES |  |  |  |  |  |
Net (loss) income |  | $ | (5,275 | ) |  | $ | 24,754 |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: |  |  |  |  |  |
Depreciation and amortization |  |  | 69,221 |  |  |  | 67,229 |
Loss on disposition of properties |  |  | 441 |  |  |  | — |
Net unrealized holding losses on investments |  |  | 4,035 |  |  |  | 346 |
Stock compensation expense |  |  | 7,347 |  |  |  | 7,630 |
Straight-line rents |  |  | (98 | ) |  |  | (1,518 | )
Equity in (earnings) losses of unconsolidated affiliates |  |  | (4,168 | ) |  |  | 1,408 |
Distributions of operating income from unconsolidated affiliates |  |  | 3,024 |  |  |  | 1,789 |
Adjustments to straight-line rent reserves |  |  | (181 | ) |  |  | — |
Amortization of financing costs |  |  | 3,915 |  |  |  | 3,093 |
Non-cash lease expense |  |  | 1,859 |  |  |  | 1,800 |
Acceleration of below market lease |  |  | — |  |  |  | (8,057 | )
Other, net |  |  | (2,107 | ) |  |  | (2,881 | )
Changes in assets and liabilities: |  |  |  |  |  |
Rents receivable |  |  | (4,619 | ) |  |  | 3,548 |
Other liabilities |  |  | (4,419 | ) |  |  | 1,895 |
Accounts payable and accrued expenses |  |  | (2,210 | ) |  |  | (3,523 | )
Prepaid expenses and other assets |  |  | (6,808 | ) |  |  | (6,193 | )
Lease liability - operating leases |  |  | (1,938 | ) |  |  | (1,825 | )
Net cash provided by operating activities |  |  | 58,019 |  |  |  | 89,495 |
CASH FLOWS FROM INVESTING ACTIVITIES |  |  |  |  |  |
Proceeds from the disposition of properties |  |  | 58,670 |  |  |  | — |
Investments in and advances to unconsolidated affiliates |  |  | (6,355 | ) |  |  | (29,114 | )
Development, construction and property improvement costs |  |  | (37,412 | ) |  |  | (30,570 | )
Payment of deposits for properties under purchase contract |  |  | (1,250 | ) |  |  | (995 | )
Return of capital from unconsolidated affiliates |  |  | 4,689 |  |  |  | 38,097 |
Payment of deferred leasing costs |  |  | (4,001 | ) |  |  | (4,071 | )
Proceeds from sale of marketable securities |  |  | 7,580 |  |  |  | — |
Proceeds from repayment of note receivable |  |  | 6,000 |  |  |  | — |
Issuance of note receivable |  |  | (7,945 | ) |  |  | — |
Net cash provided by (used in) investing activities |  |  | 19,976 |  |  |  | (26,653 | )
CASH FLOWS FROM FINANCING ACTIVITIES |  |  |  |  |  |
Proceeds from unsecured debt |  |  | 96,384 |  |  |  | 95,699 |
Principal payments on unsecured debt |  |  | (293,825 | ) |  |  | (133,109 | )
Proceeds from the sale of Common Shares |  |  | 142,123 |  |  |  | — |
Capital contributions from noncontrolling interests |  |  | 43,709 |  |  |  | 31,242 |
Principal payments on mortgage and other notes |  |  | (25,213 | ) |  |  | (61,153 | )
Distributions to noncontrolling interests |  |  | (16,170 | ) |  |  | (29,834 | )
Dividends paid to Common Shareholders |  |  | (35,733 | ) |  |  | (34,252 | )
Proceeds received from mortgage and other notes |  |  | 49,226 |  |  |  | 67,702 |
Payment of deferred financing and other costs |  |  | (8,647 | ) |  |  | (1,840 | )
Payments of finance lease obligations |  |  | (89 | ) |  |  | — |
Net cash used in financing activities |  |  | (48,235 | ) |  |  | (65,545 | )
Increase (decrease) in cash and cash equivalents and restricted cash |  |  | 29,760 |  |  |  | (2,703 | )
Cash and cash equivalents of $17,481 and $17,158 and restricted cash of $7,813 and $15,063, respectively, beginning of period |  |  | 25,294 |  |  |  | 32,221 |
Cash and cash equivalents of $31,915 and $17,193 and restricted cash of $23,139 and $12,325, respectively, end of period |  | $ | 55,054 |  |  | $ | 29,518 |

The accompanying notes are an integral part of these condensed consolidated financial statements (unaudited).

9

ACADIA REALTY TRUST AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Continued)

|  | Six Months Ended June 30, |
(in thousands) |  | 2024 |  |  | 2023 |
Supplemental disclosure of cash flow information |  |  |  |  |  |
Cash paid during the period for interest, net of capitalized interest of $3,348 and $3,913 respectively (a) |  | $ | 62,126 |  |  | $ | 55,349 |
Cash paid for income taxes, net of refunds |  | $ | 187 |  |  | $ | 123 |
Supplemental disclosure of non-cash investing and financing activities |  |  |  |  |  |
Dividends/distributions declared and payable |  | $ | 20,092 |  |  | $ | 18,378 |
Issuance of note receivable used as capital contributions from redeemable noncontrolling interests |  | $ | — |  |  | $ | 796 |
Conversion of Common OP Units to Common Shares |  | $ | 19,341 |  |  | $ | 1,533 |
Accrued interest on note receivable recorded to redeemable noncontrolling interest |  | $ | 4,724 |  |  | $ | 4,653 |
Distributions to noncontrolling interests of marketable securities |  | $ | — |  |  | $ | 49,117 |
Retained investment in an unconsolidated affiliate |  | $ | 2,432 |  |  | $ | — |
Reclassification of investment in unconsolidated affiliate to marketable securities |  | $ | — |  |  | $ | 32,745 |

(a)
Interest paid for the six months ended June 30, 2024 and 2023 excludes the cash flows from net settlements on interest rate swap contracts, which was a net receivable of cash of $15.2 million and $12.6 million, respectively.

The accompanying notes are an integral part of these condensed consolidated financial statements (unaudited).

10

ACADIA REALTY TRUST AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1. Organization, Basis of Presentation and Summary of Significant Accounting Policies

Organization

Acadia Realty Trust (the “Trust”, collectively with its consolidated subsidiaries, the “Company”), a Maryland real estate investment trust (“REIT”), is a fully-integrated equity REIT focused on the ownership, acquisition, development, and management of retail properties located primarily in high-barrier-to-entry, supply-constrained, densely populated metropolitan areas in the United States.

All of the Company’s assets are held by, and all of its operations are conducted through, Acadia Realty Limited Partnership (the “Operating Partnership”) and entities in which the Operating Partnership owns an interest. As of June 30, 2024 and December 31, 2023, the Trust controlled approximately 96% and 95%, respectively, of the Operating Partnership as the sole general partner and is entitled to share, in proportion to its percentage interest, in the cash distributions and profits and losses of the Operating Partnership. The limited partners primarily represent entities or individuals that contributed their interests in certain properties or entities to the Operating Partnership in exchange for common or preferred units of limited partnership interest (“Common OP Units” or “Preferred OP Units”) and employees who have been awarded restricted Common OP Units (“LTIP Units”) as long-term incentive compensation (Note 13). Limited partners holding Common OP and LTIP Units are generally entitled to exchange their units on a one-for-one basis for common shares of beneficial interest, par value $0.001 per share, of the Company (“Common Shares”). This structure is referred to as an umbrella partnership REIT or “UPREIT.”

As of June 30, 2024, the Company has ownership interests in 149 properties within its core portfolio, which consist of those properties either 100% owned, or partially owned through joint venture interests, by the Operating Partnership, or subsidiaries thereof, not including those properties owned through Investment Management (“Core Portfolio”). The Company also has ownership interests in 50 properties within an Investment Management platform, through which our Operating Partnership and outside institutional investors invest in primarily opportunistic and value-add retail real estate (“Investment Management”). As part of the Investment Management platform, we have active investments through the following opportunity funds, including: Acadia Strategic Opportunity Fund II, LLC (“Fund II”), Acadia Strategic Opportunity Fund III LLC (“Fund III”), Acadia Strategic Opportunity Fund IV LLC (“Fund IV”), and Acadia Strategic Opportunity Fund V LLC (“Fund V” and, collectively with Fund II, Fund III and Fund IV, “the Funds”). The 199 Core Portfolio and Investment Management properties primarily consist of street and urban retail and suburban shopping centers.

The Operating Partnership is the sole general partner or managing member of the Funds and earns fees or priority distributions for asset management, property management, construction, development, leasing, and legal services. Cash flows from the Funds are distributed pro-rata to their respective partners and members (including the Operating Partnership) until each receives a certain cumulative return (“Preferred Return”) and the return of all capital contributions. Thereafter, remaining cash flow is distributed 20% to the Operating Partnership (“Promote”) and 80% to the partners or members (including the Operating Partnership). All transactions between the Funds and the Operating Partnership have been eliminated in consolidation.

The following table summarizes the general terms and Operating Partnership’s equity interests in the Funds (dollars in millions):

Entity |  | Formation Date |  | Operating Partnership Share of Capital |  |  | Capital Called as of June 30, 2024 (a) |  |  | Unfunded Commitment (a) |  |  | Equity Interest Held By Operating Partnership (b) |  |  | Preferred Return |  |  | Total Distributions as of June 30, 2024 (a) |
Fund II |  | 6/2004 |  |  | 61.67 | % |  | $ | 559.4 |  |  | $ | 0.0 |  |  |  | 61.67 | % |  |  | 8 | % |  | $ | 172.9 |
Fund III |  | 5/2007 |  |  | 24.54 | % |  |  | 448.1 |  |  |  | 1.9 |  |  |  | 24.54 | % |  |  | 6 | % |  |  | 603.5 |
Fund IV |  | 5/2012 |  |  | 23.12 | % |  |  | 506.0 |  |  |  | 24.0 |  |  |  | 23.12 | % |  |  | 6 | % |  |  | 221.4 |
Fund V |  | 8/2016 |  |  | 20.10 | % |  |  | 459.6 |  |  |  | 60.4 |  |  |  | 20.10 | % |  |  | 6 | % |  |  | 121.6 |

(a)
Represents the total for the Funds, including the Operating Partnership and noncontrolling interests’ share.
(b)
Amount represents the current economic ownership as of June 30, 2024, which could differ from the stated legal ownership based upon the cumulative preferred returns of the respective Fund.

11

ACADIA REALTY TRUST AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Basis of Presentation

The interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. Operating results for the interim periods presented are not necessarily indicative of the results that may be expected for the full fiscal year. The information furnished in the accompanying condensed consolidated financial statements reflects all adjustments that, in the opinion of management, are necessary for a fair presentation of the aforementioned condensed consolidated financial statements for the interim periods. Such adjustments consisted of normal recurring items.

GAAP requires the Company’s management to make estimates and assumptions that affect the amounts reported in the interim condensed consolidated financial statements and accompanying notes. The most significant assumptions and estimates relate to the valuation of real estate, depreciable lives, revenue recognition and the collectability of notes receivable and rents receivable. Application of these estimates and assumptions requires the exercise of judgment as to future uncertainties and, as a result, actual results could differ from these estimates.

These interim condensed consolidated financial statements should be read in conjunction with the Company’s 2023 consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

Segment Reporting

The Company renamed its historical Funds segment as the Investment Management segment. No prior period information was recast and the designation change did not impact the Company’s condensed consolidated financial statements. Refer to Note 12.

Recent Accounting Pronouncements

In August 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) ASU 2023-05, “Business Combinations - Joint Venture Formations (Subtopic 805-60): Recognition and Initial Measurement” (“ASU 2023-05”). ASU 2023-05 addresses the accounting for contributions made to a joint venture, upon formation, in a joint venture’s separate financial statements. Prior to the amendment, the FASB did not provide specific authoritative guidance on the initial measurement of assets and liabilities assumed by a joint venture upon its formation. ASU 2023-05 requires a joint venture to recognize and initially measure its assets and liabilities at fair value (with exceptions to fair value measurement that are consistent with the business combinations guidance). ASU 2023-05 is effective for all joint venture formations with a formation date on or after January 1, 2025, with early adoption permitted. The Company has elected not to early adopt ASU 2023-05 and does not expect the adoption will have a significant impact on our consolidated financial statements.

In November 2023, the FASB issued ASU 2023-07 “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures” (“ASU 2023-07”). ASU 2023-07 provides for additional disclosures as it relates to the Company’s segments. Additional requirements per the update include disclosures for significant segment expenses, measures of profit or loss used by the CODM and how these measures are used to allocate resources and assess segment performance. The amendments in ASU 2023-07 will also apply to entities with a single reportable segment. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023. The Company is evaluating the impact of this update on its disclosures and will adopt the amendments in its December 31, 2024 Annual Report on Form 10-K.

In March 2024, the SEC issued final climate-disclosure rules to enhance and standardize climate-related disclosures by public companies. With regards to financial statements, the rules requires disclosure of (i) capitalized costs, expenditures expensed, charges, and losses incurred as a result of severe weather events and other natural conditions, subject to applicable 1% and de minimis disclosure thresholds; (ii) capitalized costs, expenditures expensed, and losses related to carbon offsets and renewable energy credits or certificates (RECs) if used as a material component of a company’s plans to achieve its disclosed climate-related targets or goals; and (iii) if the estimates and assumptions the Company uses to produce the financial statements were materially impacted by risks and uncertainties associated with severe weather events and other natural conditions or any disclosed climate-related targets or transition plans, a qualitative description of how the development of such estimates and assumptions was impacted. The rules are effective for annual periods beginning January 1, 2025 and are to be applied prospectively. On April 4, 2024, the SEC voluntarily stayed the rules pending judicial review as a result of litigation. The Company is continuing to review the final rule and monitoring the litigation progress for possible impacts on the disclosure requirements and will adopt the required disclosures in their effective periods.

Any other recently issued accounting standards or pronouncements not disclosed above have been excluded as they are not relevant to the Company, or they are not expected to have a material impact on the condensed consolidated financial statements.

12

ACADIA REALTY TRUST AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

2. Rea l Estate

The Company’s consolidated real estate is comprised of the following for the periods presented (in thousands):

|  | June 30, |  |  | December 31, |
|  | 2024 |  |  | 2023 |
Land |  | $ | 849,524 |  |  | $ | 872,228 |
Buildings and improvements |  |  | 3,106,413 |  |  |  | 3,128,650 |
Tenant improvements |  |  | 283,309 |  |  |  | 257,955 |
Construction in progress |  |  | 21,023 |  |  |  | 23,250 |
Right-of-use assets - finance leases (Note 11) |  |  | 58,637 |  |  |  | 58,637 |
Total |  |  | 4,318,906 |  |  |  | 4,340,720 |
Less: Accumulated depreciation and amortization |  |  | (871,994 | ) |  |  | (823,439 | )
Operating real estate, net |  |  | 3,446,912 |  |  |  | 3,517,281 |
Real estate under development |  |  | 101,802 |  |  |  | 94,799 |
Net investments in real estate |  | $ | 3,548,714 |  |  | $ | 3,612,080 |

Acquisitions

During the six months ended June 30, 2024, the Company did not acquire any retail properties and other real estate investments.

Dispositions

During the six months ended June 30, 2024, The Company disposed of the following properties and other real estate investments:

Property and Location |  | Owner |  | Date Sold |  | Sale Price |  |  | Gain (Loss) on Sale |
2024 Dispositions |  |  |  |  |  |  |  |  |  |
2208-2216 Fillmore Street - San Francisco, CA |  | Fund IV |  | 4/3/2024 |  | $ | 9,777 |  |  | $ | 1,239 |
2207 Fillmore Street - San Francisco, CA |  | Fund IV |  | 4/3/2024 |  |  | 4,283 |  |  |  | 1,130 |
Shops at Grand - Queens, NY |  | Core |  | 5/16/2024 |  |  | 48,250 |  |  |  | (2,213 | )
Canton Marketplace (Outparcel) - Canton, GA |  | Fund V |  | 6/28/2024 |  |  | 2,200 |  |  |  | 601 |
Total 2024 Dispositions (a) |  |  |  |  |  | $ | 64,510 |  |  | $ | 757 |

(a)
During the six months ended June 30, 2024, the Company recorded a $1.2 million loss related to a Fund IV property that was sold in 2019 in connection with a post-closing dispute.

On May 16, 2024, the Company sold a 95% interest in the Shops at Grand property located in Queens, NY for $48.3 million and retained a 5% ownership interest through an investment in a newly formed joint venture which was fair valued at $2.4 million. As a result of the transaction, the Company deconsolidated the property and accounted for its interest under the equity method of accounting effective May 16, 2024 as it no longer controls the investment (Note 4). The Company recognized a loss on deconsolidation of $2.2 million related to transaction costs, which is included in the Gain on disposition of properties in the Condensed and Consolidated Statements of Operations.

Properties Held for Sale

The Company had one property classified as held for sale as of December 31, 2023. The property as of December 31, 2023 was moved to Investments in real estate, at cost during the first quarter of 2024, as the Company no longer believes it is probable the asset will be disposed within the next twelve months.

Real Estate Under Development

Real estate under development represents the Company’s consolidated properties that have not yet been placed into service while undergoing substantial development or construction.

13

ACADIA REALTY TRUST AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Development activity for the Company’s consolidated properties comprised the following during the periods presented (dollars in thousands):

|  | January 1, 2024 |  |  | Six Months Ended June 30, 2024 |  |  | June 30, 2024 |
|  | Number of Properties |  |  | Carrying Value |  |  | Transfers In |  |  | Capitalized Costs |  |  | Transfers Out |  |  | Number of Properties |  |  | Carrying Value |
Core |  |  | 2 |  |  | $ | 66,083 |  |  | $ | — |  |  | $ | 5,893 |  |  | $ | — |  |  |  | 2 |  |  |  | 71,976 |
Fund III |  |  | 1 |  |  |  | 28,716 |  |  |  | — |  |  |  | 1,110 |  |  |  | — |  |  |  | 1 |  |  |  | 29,826 |
Total |  |  | 3 |  |  | $ | 94,799 |  |  | $ | — |  |  | $ | 7,003 |  |  | $ | — |  |  |  | 3 |  |  | $ | 101,802 |

The number of properties in the table above refers to projects comprising the entire property under development; however, certain projects represent a portion of a property. As of June 30, 2024, consolidated development projects included: portions of the Henderson 1 & 2 Portfolio in the Core Portfolio, and Broad Hollow Commons in Fund III.

During the six months ended June 30, 2024, the Company did not place any assets into service.

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.

3. Notes Re ceivable, Net

Earnings from these notes and mortgages receivable are reported within the Company’s Structured Financing segment (Note 12). Interest receivable is included in Other assets, net (Note 5). The Company’s notes receivable, net are generally collateralized either by the underlying properties or the borrowers’ ownership interests in the entities that own the properties, and were as follows (dollars in thousands):

|  | June 30, |  |  | December 31, |  |  | June 30, 2024
Description |  | 2024 |  |  | 2023 |  |  | Number |  |  | Maturity Date |  | Interest Rate
Core Portfolio (a) |  | $ | 128,173 |  |  | $ | 126,228 |  |  |  | 6 |  |  | Apr 2020 - Dec 2027 |  | 4.65% - 12.00%
Allowance for credit losses |  |  | (1,520 | ) |  |  | (1,279 | ) |  |  |  |  |  |  |
Notes receivable, net |  | $ | 126,653 |  |  | $ | 124,949 |  |  |  | 6 |  |  |  |  |

(a)
Includes one note receivable from an OP Unit holder, with a balance of $6.0 million as of December 31, 2023. The note was paid off during the six months ended June 30, 2024.

Changes in the Company’s credit allowance were as follows (in thousands):

|  | Six Months Ended June 30, |
|  | 2024 |  |  | 2023 |
Allowance for credit losses as of beginning of periods |  | $ | 1,279 |  |  | $ | 834 |
Provision of loan losses |  |  | 241 |  |  |  | 65 |
Total - credit losses and reserves |  | $ | 1,520 |  |  | $ | 899 |

Due to the lack of comparability across the Structured Financing portfolio, each note was evaluated separately. As a result, the Company did not elect the collateral-dependent allowance for credit losses practical expedient for five of its notes with a total amortized cost of $132.8 million, inclusive of accrued interest of $22.4 million, for which an allowance for credit losses has been recorded aggregating $1.5 million as of June 30, 2024. For one not e in this portfolio, aggregating $21.6 million, inclusive of accrued interest of $3.8 million as of June 30, 2024, the Company has elected to apply the practical expedient in accordance with ASC Topic 326: Financial Instruments - Credit Losses (“ASC 326”) and did no t establish an allowance for credit losses because (i) this note is a collateral-dependent note, which due to their settlement term s is not expected to be settled in cash but rather by the Company’s possession of the real estate collateral; and (ii) as of June 30, 2024, the Company determined that the estimated fair value of the collateral at the expected realization date for this loans was sufficient to cover the carrying value of its investments in this note receivable.

14

ACADIA REALTY TRUST AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

One Core Portfolio note aggregating $21.6 million including accrued interest (exclusive of default interest and other amounts due on the loan that have not been recognized) was in default as of June 30, 2024 and December 31, 2023. On April 1, 2020, the loan matured and was not repaid. The Company expects to take appropriate actions to recover the amounts due under the loan and has issued a reservation of rights letter to the borrowers and guarantor, reserving all of its rights and remedies under the applicable loan documents and otherwise. The Company has determined that the collateral for this loan is sufficient to cover the loan’s carrying value as of June 30, 2024 and December 31, 2023.

During the six months ended June 30, 2024, the Company:

•
originated one Core note receivable of $7.6 million to a related party, which is secured by the borrower’s equity interest in the Renaissance Portfolio, 1238 Wisconsin Avenue, and another Georgetown property, bears interest at 12% and matures on December 31, 2025;
•
extended the maturity date of one Core note receivable of $54.0 million from January 9, 2024 to January 9, 2025; and
•
received full payment on a $6.0 million Core Portfolio note.

15

ACADIA REALTY TRUST AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

4. Investments in and Advance s to Unconsolidated Affiliates

The Company accounts for its investments in and advances to unconsolidated affiliates primarily under the equity method of accounting. The Company’s investments in and advances to unconsolidated affiliates consist of the following (dollars in thousands):

|  |  |  | Ownership Interest |  | June 30, |  |  | December 31, |
Portfolio |  | Property |  | June 30, 2024 |  | 2024 |  |  | 2023 |
Core: |  | Renaissance Portfolio |  | 20% |  | $ | 30,203 |  |  | $ | 30,745 |
|  | Gotham Plaza |  | 49% |  |  | 30,616 |  |  |  | 30,772 |
|  | Georgetown Portfolio (a) |  | 50% |  |  | 4,211 |  |  |  | 4,230 |
|  | 1238 Wisconsin Avenue (a, b) |  | 80% |  |  | 19,169 |  |  |  | 19,719 |
|  | 840 N. Michigan Avenue (c) |  | 91.85% |  |  | 22,384 |  |  |  | 15,761 |
|  |  |  |  |  |  | 106,583 |  |  |  | 101,227 |
Investment Management: |  |  |  |  |  |  |  |  |  |
Fund IV: |  | Fund IV Other Portfolio |  | 90% |  |  | 5,510 |  |  |  | 5,221 |
|  | 650 Bald Hill Road |  | 90% |  |  | 9,767 |  |  |  | 9,486 |
|  | Paramus Plaza (d) |  | 50% |  |  | 4,133 |  |  |  | 70 |
|  |  |  |  |  |  | 19,410 |  |  |  | 14,777 |
Fund V: |  | Family Center at Riverdale (c) |  | 89.42% |  |  | 1,847 |  |  |  | 2,552 |
|  | Tri-City Plaza |  | 90% |  |  | 5,363 |  |  |  | 6,452 |
|  | Frederick County Acquisitions |  | 90% |  |  | 12,365 |  |  |  | 11,345 |
|  | Wood Ridge Plaza |  | 90% |  |  | 10,014 |  |  |  | 10,313 |
|  | La Frontera Village |  | 90% |  |  | 15,638 |  |  |  | 17,483 |
|  | Shoppes at South Hills |  | 90% |  |  | 10,426 |  |  |  | 11,707 |
|  | Mohawk Commons |  | 90% |  |  | 14,728 |  |  |  | 16,434 |
|  |  |  |  |  |  | 70,381 |  |  |  | 76,286 |
Other: |  | Shops at Grand |  | 5% |  |  | 2,441 |  |  |  | — |
Various: |  | Due from (to) Related Parties |  |  |  |  | 299 |  |  |  | 396 |
|  | Other (e) |  |  |  |  | 4,296 |  |  |  | 4,554 |
|  | Investments in and advances to unconsolidated affiliates |  |  |  | $ | 203,410 |  |  | $ | 197,240 |
Core: |  | Crossroads (f) |  | 49% |  | $ | 7,301 |  |  | $ | 7,982 |
|  | Distributions in excess of income from, and investments in, unconsolidated affiliates |  |  |  | $ | 7,301 |  |  | $ | 7,982 |

(a)
Represents a variable interest entity (“VIE”) for which the Company is not the primary beneficia ry (Note 15).
(b)
Includes the amounts advanced against a $12.8 million construction commitment from the Company to the venture that holds its investm ent in 1238 Wisconsin. As of June 30, 2024 and December 31, 2023 the note receivable from a related party had a balance of $12.8 million, net of an allowance for credit losses of $0.2 million, as of each period. The loan is collateralized by the venture members' equity interest in the entity that holds the 1238 Wisconsin development property, bears interest at Prime + 1.0% subject to a 4.5% floor and matures on December 28, 2024.
(c)
Represents a tenancy-in-common interest.
(d)
As of June 30, 2024, the investment balance relates to undistributed proceeds from the disposition of the property. These proceeds were distributed to Fund IV in July 2024.
(e)
Includes cost-method investments in Fifth Wall.
(f)
Distributions have exceeded the Company’s investment; however, the Company recognizes a liability balance as it may elect to contribute capital to the entity.

During the six months ended June 30, 2024, the Company:

•
retained a 5% interest through an investment in a newly formed joint venture, Shops at Grand, which was fair valued at $2.4 million upon deconsolidation (Note 2);
•
through Fund IV, sold its investment in Paramus Plaza for $36.8 million and repaid the related $27.9 million mortgage loan. Fund IV recognized a gain of $4.1 million of which the Company’s proportionate share was $1.0 million; and

16

ACADIA REALTY TRUST AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

•
extended the maturity date on a property mortgage loan at Gotham Plaza to September 2, 2024, which had an outstanding balance of $17.1 million.

Fees earned from and paid to Unconsolidated Affiliates

The Company earned property management, construction, development, legal and leasing fees from its investments in unconsolidated affiliates totaling $0.3 million and $0.1 million for the three months ended June 30, 2024 and 2023, respectively, and $0.4 million and $0.2 for the six months ended June 30, 2024 and 2023, respectively, which are included in Other revenues in the Condensed Consolidated Statements of Operations.

In addition, the Company’s unconsolidated joint ventures paid fees to affiliates of $1.1 million and $0.8 million for the three months ended June 30, 2024 and 2023, respectively, and $2.2 million and $1.6 million for the six months ended June 30, 2024 and 2023, respectively, for leasing commissions, development, management, construction and overhead fees.

Summarized Financial Information of Unconsolidated Affiliates

The following Combined and Condensed Balance Sheets and Statements of Operations, in each period, summarize the financial information of the Company’s investments in unconsolidated affiliates that were held as of June 30, 2024 (in thousands):

|  | June 30, |  |  | December 31, |
|  | 2024 |  |  | 2023 |
Combined and Condensed Balance Sheets |  |  |  |  |  |
Assets: |  |  |  |  |  |
Rental property, net |  | $ | 734,373 |  |  | $ | 723,411 |
Real estate under development |  |  | - |  |  |  | — |
Other assets |  |  | 128,786 |  |  |  | 125,699 |
Total assets |  | $ | 863,159 |  |  | $ | 849,110 |
Liabilities and partners’ equity: |  |  |  |  |  |
Mortgage notes payable |  | $ | 630,882 |  |  | $ | 662,552 |
Other liabilities |  |  | 89,409 |  |  |  | 100,270 |
Partners’ equity |  |  | 142,868 |  |  |  | 86,288 |
Total liabilities and partners’ equity |  | $ | 863,159 |  |  | $ | 849,110 |
Company's share of accumulated equity |  | $ | 136,176 |  |  | $ | 128,690 |
Basis differential |  |  | 51,336 |  |  |  | 51,824 |
Deferred fees, net of portion related to the Company's interest |  |  | 4,002 |  |  |  | 3,794 |
Amounts receivable/payable by the Company |  |  | 299 |  |  |  | 396 |
Investments in and advances to unconsolidated affiliates, net of Company's share of distributions in excess of income from and investments in unconsolidated affiliates |  |  | 191,813 |  |  |  | 184,704 |
Investments carried at fair value or cost |  |  | 4,296 |  |  |  | 4,554 |
Company's share of distributions in excess of income from and investments in unconsolidated affiliates |  |  | 7,301 |  |  |  | 7,982 |
Investments in and advances to unconsolidated affiliates |  | $ | 203,410 |  |  | $ | 197,240 |

17

ACADIA REALTY TRUST AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

|  | Three Months Ended June 30, |  |  | Six Months Ended June 30, |
|  | 2024 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
Combined and Condensed Statements of Operations |  |  |  |  |  |  |  |  |  |  |  |
Total revenues |  | $ | 28,180 |  |  | $ | 28,667 |  |  | $ | 56,184 |  |  | $ | 56,885 |
Operating and other expenses |  |  | (10,149 | ) |  |  | (8,708 | ) |  |  | (20,135 | ) |  |  | (17,349 | )
Interest expense |  |  | (10,205 | ) |  |  | (9,901 | ) |  |  | (20,619 | ) |  |  | (19,134 | )
Depreciation and amortization |  |  | (10,129 | ) |  |  | (11,233 | ) |  |  | (21,795 | ) |  |  | (20,134 | )
Gain on extinguishment of debt |  |  | 853 |  |  |  | — |  |  |  | 2,011 |  |  |  | — |
Impairment of Investment |  |  | (288 | ) |  |  | — |  |  |  | (288 | ) |  |  | — |
Gain on disposition of property |  |  | 8,519 |  |  |  | — |  |  |  | 8,519 |  |  |  | — |
Net income (loss) attributable to unconsolidated affiliates |  | $ | 6,781 |  |  | $ | (1,175 | ) |  | $ | 3,877 |  |  | $ | 268 |
Company’s share of equity in net earnings (losses) of unconsolidated affiliates |  | $ | 4,724 |  |  | $ | (1,190 | ) |  | $ | 4,656 |  |  | $ | (914 | )
Basis differential amortization |  |  | (244 | ) |  |  | (247 | ) |  |  | (488 | ) |  |  | (494 | )
Company’s equity in earnings (losses) of unconsolidated affiliates |  | $ | 4,480 |  |  | $ | (1,437 | ) |  | $ | 4,168 |  |  | $ | (1,408 | )

5. Other Assets, Net and Accou nts Payable and Other Liabilities

Other assets, net and accounts payable and other liabilities are comprised of the following for the periods presented:

|  | June 30, |  |  | December 31, |
(in thousands) |  | 2024 |  |  | 2023 |
Other Assets, Net: |  |  |  |  |  |
Lease intangibles, net (Note 6) |  | $ | 86,429 |  |  | $ | 100,594 |
Derivative financial instruments (Note 8) |  |  | 40,338 |  |  |  | 28,989 |
Deferred charges, net (A) |  |  | 36,071 |  |  |  | 31,074 |
Accrued interest receivable (Note 3) |  |  | 28,768 |  |  |  | 25,553 |
Prepaid expenses |  |  | 13,242 |  |  |  | 15,204 |
Due from seller |  |  | 2,343 |  |  |  | 2,631 |
Income taxes receivable |  |  | 1,472 |  |  |  | 1,141 |
Deposits |  |  | 1,816 |  |  |  | 575 |
Corporate assets, net |  |  | 740 |  |  |  | 924 |
Other receivables |  |  | 2,560 |  |  |  | 1,775 |
|  | $ | 213,779 |  |  | $ | 208,460 |
(A) Deferred Charges, Net: |  |  |  |  |  |
Deferred leasing and other costs |  | $ | 77,445 |  |  | $ | 73,908 |
Deferred financing costs related to line of credit |  |  | 12,111 |  |  |  | 9,829 |
|  |  | 89,556 |  |  |  | 83,737 |
Accumulated amortization |  |  | (53,485 | ) |  |  | (52,663 | )
Deferred charges, net |  | $ | 36,071 |  |  | $ | 31,074 |
Accounts Payable and Other Liabilities: |  |  |  |  |  |
Lease intangibles, net (Note 6) |  | $ | 69,414 |  |  | $ | 73,994 |
Accounts payable and accrued expenses |  |  | 62,198 |  |  |  | 61,425 |
Deferred income |  |  | 36,086 |  |  |  | 34,386 |
Tenant security deposits, escrow and other |  |  | 13,988 |  |  |  | 17,939 |
Lease liability - finance leases, net (Note 11) |  |  | 32,649 |  |  |  | 32,739 |
Derivative financial instruments (Note 8) |  |  | 3,760 |  |  |  | 8,892 |
|  | $ | 218,095 |  |  | $ | 229,375 |

18

ACADIA REALTY TRUST AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

6. Lease Intangibles

Upon acquisitions of real estate (Note 2), the Company assesses the relative fair value of acquired assets (including land, buildings and improvements, and identified intangibles such as above- and below-market leases, including below-market options and acquired in-place leases) and assumed liabilities. The lease intangibles are amortized over the remaining terms of the respective leases, including option periods where applicable.

Intangible assets and liabilities are included in Other assets, net and Accounts payable and other liabilities (Note 5) on the Condensed Consolidated Balance Sheets and summarized as follows (in thousands):

|  | June 30, 2024 |  |  | December 31, 2023 |
|  | Gross Carrying Amount |  |  | Accumulated Amortization |  |  | Net Carrying Amount |  |  | Gross Carrying Amount |  |  | Accumulated Amortization |  |  | Net Carrying Amount |
Amortizable Intangible Assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
In-place lease intangible assets |  | $ | 323,051 |  |  | $ | (243,503 | ) |  | $ | 79,548 |  |  | $ | 327,484 |  |  | $ | (234,808 | ) |  | $ | 92,676 |
Above-market rent |  |  | 26,290 |  |  |  | (19,409 | ) |  |  | 6,881 |  |  |  | 27,294 |  |  |  | (19,376 | ) |  |  | 7,918 |
|  | $ | 349,341 |  |  | $ | (262,912 | ) |  | $ | 86,429 |  |  | $ | 354,778 |  |  | $ | (254,184 | ) |  | $ | 100,594 |
Amortizable Intangible Liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Below-market rent |  | $ | (184,029 | ) |  | $ | 114,873 |  |  | $ | (69,156 | ) |  | $ | (188,098 | ) |  | $ | 114,393 |  |  | $ | (73,705 | )
Above-market ground lease |  |  | (671 | ) |  |  | 413 |  |  |  | (258 | ) |  |  | (671 | ) |  |  | 382 |  |  |  | (289 | )
|  | $ | (184,700 | ) |  | $ | 115,286 |  |  | $ | (69,414 | ) |  | $ | (188,769 | ) |  | $ | 114,775 |  |  | $ | (73,994 | )

The Company did not have any acquisitions of real estate or acquired lease intangibles. During the six months ended June 30, 2024, the Company:

•
recorded accelerated amortization related to below-market rent of $0.2 million and in-place lease intangible assets of $0.5 million, of which the Company's share was $0.2 million and $0.4 million, respectively, related to early tenant lease terminations; and
•
derecognized below-market rent of $0.7 million, of which the Company's share was $0.6 million, related to disposed properties (Note 2).

Amortization of in-place lease intangible assets is recorded in depreciation and amortization expense and amortization of above-market rent and below-market rent is recorded as a reduction to and increase to rental income, respectively, in the Condensed Consolidated Statements of Operations. Amortization of above-market ground leases are recorded as a reduction to rent expense in the Condensed Consolidated Statements of Operations.

The scheduled amortization of acquired lease intangible assets and assumed liabilities as of June 30, 2024 is as follows (in thousands):

Years Ending December 31, |  | Net Increase in Rental Revenues |  |  | Increase to Amortization Expense |  |  | Reduction of Property Operating Expense |
2024 (Remainder) |  | $ | 2,408 |  |  | $ | (11,088 | ) |  | $ | 29 |
2025 |  |  | 4,496 |  |  |  | (17,774 | ) |  |  | 58 |
2026 |  |  | 4,446 |  |  |  | (14,335 | ) |  |  | 58 |
2027 |  |  | 4,388 |  |  |  | (11,066 | ) |  |  | 58 |
2028 |  |  | 4,472 |  |  |  | (7,206 | ) |  |  | 55 |

19

ACADIA REALTY TRUST AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

7. Debt

A summary of the Company’s consolidated indebtedness is as follows (dollars in thousands):

|  |  |  |  | Carrying Value as of
|  | Interest Rate as of | Maturity Date as of |  | June 30, |  | December 31,
|  | June 30, 2024 |  | June 30, 2024 |  | 2024 |  | 2023
Mortgages Payable |  |  |  |  |  |  |  |
Core |  | 3.99% - 5.89% |  | Jul 2027 - Apr 2035 |  | $181,099 |  | $191,830
Fund II (a) |  | SOFR+2.61% |  | Aug 2025 |  | 137,485 |  | 137,485
Fund III |  | SOFR+3.75% |  | Oct 2025 |  | 33,000 |  | 33,000
Fund IV (b) |  | SOFR+2.25% - SOFR+3.33% |  | March 2025 - Jun 2028 |  | 109,484 |  | 115,925
Fund V |  | SOFR+1.80% - SOFR+2.85% |  | Jul 2024 - Jun 2028 |  | 500,144 |  | 458,960
Net unamortized debt issuance costs |  |  |  |  |  | (6,366) |  | (7,313)
Unamortized premium |  |  |  |  |  | 223 |  | 240
Total Mortgages Payable |  |  |  |  |  | $955,069 |  | $930,127
Unsecured Notes Payable |  |  |  |  |  |  |  |
Core Term Loans (c) |  | SOFR+1.50% - SOFR+1.95% |  | Apr 2027 - Jul 2029 |  | $650,000 |  | $650,000
Fund V Subscription Line (d) |  |  |  |  |  | — |  | 80,600
Net unamortized debt issuance costs |  |  |  |  |  | (5,687) |  | (3,873)
Total Unsecured Notes Payable |  |  |  |  |  | $644,313 |  | $726,727
Unsecured Line of Credit |  |  |  |  |  |  |  |
Revolving Credit Facility (c) |  | SOFR+1.35% |  | Apr 2028 |  | $96,446 |  | $213,287
Total Debt (e)(f) |  |  |  |  |  | $1,707,658 |  | $1,881,087
Net unamortized debt issuance costs |  |  |  |  |  | (12,053) |  | (11,186)
Unamortized premium |  |  |  |  |  | 223 |  | 240
Total Indebtedness |  |  |  |  |  | $1,695,828 |  | $1,870,141

(a)
The Company has a total borrowing capacity of $198.0 million on th e Fund II mortgage as of both June 30, 2024 and December 31, 2023.
(b)
Includes the outstanding balance on the Fund IV secured bridge facility of $36.2 million as of both June 30, 2024 and December 31, 2023.
(c)
The Company has entered into various swap agreements to effectively fix its interest costs on a portion of its Revolver and term loans as of June 30, 2024 and December 31, 2023.
(d)
Fund V paid off the subscription line and terminated the outstanding letters of credit during the six months ended June 30, 2024.
(e)
Includes $1,188.3 million and $1,249.8 million, respectively, of variable-rate debt that has been fixed with interest rate swap agreements as of the periods presented. The effective fixed rates ranged from 1.14% to 4.69%.
(f)
Includes $151.2 mi llion and $151.4 million, respectively, of variable-rate debt that is subject to interest cap agreements as of the periods presented. The effective fixed rates ranged fro m 4.50% to 6.00%.

Unsecured Debt

Credit Facility

In April 2024, the Operating Partnership entered into a Third Amended and Restated Credit Agreement, with Bank of America, N.A., as administrative agent, to amend its existing senior unsecured credit facility (the “Amended Credit Facility”). The Amended Credit Facility provides for an increase in the existing unsecured revolving credit facility (the “Revolver”) from $300.0 million to $350.0 million, which includes the capacity to issue letters of credit in an amount up to $60.0 million, and the extension of the term from June 29, 2025 to April 15, 2028, with two additional six-month extension options. The Amended Credit Facility also provides for the extension of the term on the existing $400.0 million unsecured term loan (“Term Loan”) from June 29, 2026 to April 15, 2028, with two additional six-month extension options. The Amended Credit Facility has an accordion feature to increase its capacity up to $900 million at the option of the Operating Partnership, subject to customary conditions. Borrowings under the Revolver and the Term Loan will accrue interest at a floating rate based on SOFR with margins based on leverage or credit rating. The Credit Facility is guaranteed by the Trust and certain subsidiaries of the Trust (Note 9).

Revolving Credit Facility

As of June 30, 2024, the Revolver bears interest at SOFR + 1.35% and matures on April 15, 2028, subject to two six-month extension options. The outstanding balance and total available credit of the Revolver was $96.4 million and $253.6 million, respectively, as of June 30, 2024, reflecting no letters of credit outstanding. The outstanding balance and total available credit of the Revolver was $213.3 million and $86.7 million, respectively, as of December 31, 2023, reflecting no letters of credit outstanding.

20

ACADIA REALTY TRUST AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Core Term Loans

As of June 30, 2024, the Term Loan bears in terest at SOFR + 1.50% and matures on April 15, 2028.

The Operating Partnership has a $175.0 million term loan facility (the “$175.0 Million Term Loan”), with Bank of America, N.A. as administrative agent, which bears interest at a floating rate based on SOFR with margins based on leverage or credit rating, matures on April 6, 2027, and is guaranteed by the Trust and certain subsidiaries of the Trust (Note 9). As of June 30, 2024, the $175.0 Million Term Loan bears interest at SOFR + 1.60%.

The Operating Partnership has a $75.0 million term loan (the “$75.0 Million Term Loan”), with TD Bank, N.A., as administrative agent, which bears interest at a floating rate based on SOFR with margins based on leverage or credit rating, matures on July 29, 2029, and is guaranteed by the Trust and certain subsidiaries of the Trust (Note 9). As of June 30, 2024, the $75.0 Million Term Loan bears interest at SOFR + 1.95%.

Mortgages and Other Notes Payable

During the six months ended June 30, 2024, the Company (amounts represent balances at the time of transactions):

•
r epaid a Core mortgage loan totaling $7.3 million at maturity;
•
extended a Core mortgage loan of $60.0 million (excluding principal reductions of $2.5 million);
•
repaid the Fund V subscription line totaling $80.6 million;
•
entered into a new Fund mortgage loan of $43.4 million;
•
repaid two consolidated Fund mortgage loans of $6.4 million upon disposition of the properties (Note 2);
•
repaid a portion of one consolidated Fund mortgage loan of $1.5 million in connection with an outparcel disposition (Note 2);
•
extended two Fund mortgage loans totaling $67.7 million; and
•
made scheduled principal payments totaling $6.1 million.

A portion of the Company’s variable-rate mortgage debt has been effectively fixed through certain cash flow hedge transactions (Note 8).

As of both June 30, 2024 and December 31, 2023, the Company’s mortgages were collateralized by 31 properties and the related tenant leases. Certain loans are cross-collateralized and contain cross-default provisions. The loan agreements contain customary representations, covenants and events of default. Certain loan agreements require the Company to comply with affirmative and negative covenants, including the maintenance of debt service coverage and leverage ratios. The Company was in compliance with its debt covenants as of June 30, 2024.

Fund IV also has an outstanding balance and total available credit on its secured bridge facility of $36.2 million and $0.0 million, respectively, as of both June 30, 2024 and December 31, 2023. The Operating Partnership has guaranteed up to $22.5 million of the Fund IV secured bridge facility (Note 9).

Scheduled Debt Principal Payments

The scheduled principal repayments, without regard to available extension options (described further below), of the Company’s consolidated indebtedness, as of June 30, 2024 are as follows (in thousands):

Year Ending December 31, |  | Principal Repayments |
2024 (Remainder) |  | $ | 214,585 |
2025 |  |  | 412,878 |
2026 |  |  | 56,911 |
2027 |  |  | 248,828 |
2028 |  |  | 678,250 |
Thereafter |  |  | 96,206 |
|  |  | 1,707,658 |
Unamortized premium |  |  | 223 |
Net unamortized debt issuance costs |  |  | (12,053 | )
Total indebtedness |  | $ | 1,695,828 |

21

ACADIA REALTY TRUST AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The table above does not reflect available extension options (subject to customary conditions) on consolidated debt with balances as of June 30, 2024. The Company has debt balances contractually due of $40.0 million in 2024, $327.3 million due in 2025, $27.4 million due in 2026 and $69.4 million in 2027, all of which the Company has available options to extend by up to 12 months, and for some an additional 12 months thereafter. However, there can be no assurance that the Company will be able to successfully execute any or all of its available extension options.

8. Financial Instruments and Fair Value Measurements

Items Measured at Fair Value on a Recurring Basis

The methods and assumptions described below were used to estimate the fair value of each class of financial instrument.

Marketable Equity Securities — The Company has an investment in marketable equity securities of Albertsons, which has a readily determinable market value (traded on an exchange) and is being accounted for as a Level 1 investment. This investment was included in Marketable securities on the Condensed Consolidated Balance Sheets as of June 30, 2024 and December 31, 2023.

Derivative Financial Instruments — The Company has derivative assets, which are included in Other assets, net on the Condensed Consolidated Balance Sheets, and are comprised of interest rate swaps and caps. The Company has derivative liabilities, which are included in Accounts payable and other liabilities on the Condensed Consolidated Balance Sheets and are comprised of interest rate swaps. The derivative instruments were measured at fair value using readily observable market inputs, such as quotations on interest rates, and were classified as Level 2 as these instruments are custom, over-the-counter contracts with various bank counterparties that are not traded in an active market. See “Derivative Financial Instruments,” below.

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):

|  | June 30, 2024 |  |  | December 31, 2023 |
|  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Level 1 |  |  | Level 2 |  |  | Level 3 |
Assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Marketable equity securities |  | $ | 21,668 |  |  | $ | — |  |  | $ | — |  |  | $ | 33,284 |  |  | $ | — |  |  | $ | — |
Derivative financial instruments |  |  | — |  |  |  | 40,338 |  |  |  | — |  |  |  | — |  |  |  | 28,989 |  |  |  | — |
Liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Derivative financial instruments |  |  | — |  |  |  | (3,760 | ) |  |  | — |  |  |  | — |  |  |  | (8,892 | ) |  |  | — |

In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability.

The Company did not have any transfers into or out of Level 1, Level 2, and Level 3 measurements during the six months ended June 30, 2024, and 2023.

Marketable Equity Securities

During the three months ended June 30, 2024, the Company sold 175,000 shares of Albertsons, generating net proceeds of $3.6 million. During the six months ended June 30, 2024, the Company sold 350,000 shares of Albertsons, generating net proceeds of $7.6 million. As of June 30, 2024, the Company held 1.1 million shares of Albertsons which had a fair value of $21.7 million.

During the three months ended June 30, 2024 and 2023, the Company recognized dividend income from marketable securities of $0.2 million and $0.2 million, of which the Company's share was $0.2 million and $0.2 million, respectively. During the six months ended June 30, 2024 and 2023, the Company recognized dividend income from marketable securities of $0.3 million and $28.7 million, of which the Company's share was $0.3 million and $11.6 million, respectively. These amounts are included i n Realized and unrealized holding (losses) gains on investments and other on the Company's Condensed Consolidated Statements of Operations.

22

ACADIA REALTY TRUST AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The following table represents the realized and unrealized gain (loss) on marketable securities included in Realized and unrealized holding (losses) gains on investments and other on the Company's Condensed Consolidated Statements of Operations (in thousands):

| Three Months Ended June 30, |  |  | Six Months Ended June 30, |
| 2024 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
Realized gain on marketable securities, net | $ | 3,586 |  |  | $ | — |  |  | $ | 7,580 |  |  | $ | — |
Less: previously recognized unrealized gains on marketable securities sold during the period |  | (3,586 | ) |  |  | — |  |  |  | (7,580 | ) |  |  | — |
Unrealized (losses) gains on marketable securities still held as of the end of the period and through the disposition date on marketable securities sold during the period |  | (2,020 | ) |  |  | 1,713 |  |  |  | (4,035 | ) |  |  | (346 | )
(Loss) gain on marketable securities, net | $ | (2,020 | ) |  | $ | 1,713 |  |  | $ | (4,035 | ) |  | $ | (346 | )

Items Measured at Fair Value on a Nonrecurring Basis

Impairment Charges

The Company did not recognize any impairments of consolidated assets during the six months ended June 30, 2024, and 2023.

Redeemable Noncontrolling Interests

The Company has redeemable noncontrolling interests related to certain properties. The Company is required to periodically review these redeemable noncontrolling interests in order to compare the redemption value to the carrying value. See Note 10 for further discussion regarding these interests.

Derivative Financial Instruments

The Company had the following interest rate swaps and caps for the periods presented (information is as of June 30, 2024, unless otherwise noted, and dollars in thousands):

|  |  |  |  |  |  |  |  | Strike Rate |  |  |  | Fair Value |
Derivative Instrument |  | Aggregate Notional Amount |  |  | Effective Date |  | Maturity Date |  | Low |  |  | High |  | Balance Sheet Location |  | June 30, 2024 |  |  | December 31, 2023 |
Core |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest Rate Swaps |  | $ | 175,000 |  |  | Oct 2023 |  | Jul 2027 - Jul 2029 |  | 4.59% |  | — |  | 4.69% |  | Accounts payable and other liabilities |  | $ | (3,760 | ) |  | $ | (8,807 | )
Interest Rate Swaps |  |  | 681,000 |  |  | May 2022 - May 2023 |  | Mar 2025 - Jul 2030 |  | 1.98% |  | — |  | 3.61% |  | Other Assets |  |  | 34,303 |  |  |  | 22,675 |
|  | $ | 856,000 |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 30,543 |  |  | $ | 13,868 |
Fund II |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest Rate Swap |  | $ | 50,000 |  |  | Jan 2023 |  | Dec 2029 |  | 3.23% |  | — |  | 3.23% |  | Other Assets |  | $ | 1,814 |  |  | $ | 634 |
Fund III |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest Rate Cap |  | $ | 33,000 |  |  | Sep 2023 |  | Oct 2025 |  | 5.50% |  | — |  | 5.50% |  | Other Assets |  | $ | 14 |  |  | $ | 26 |
Fund IV |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest Rate Cap |  | $ | 54,500 |  |  | Dec 2023 |  | Dec 2025 |  | 6.00% |  | — |  | 6.00% |  | Other Assets |  | $ | 14 |  |  | $ | 29 |
Fund V |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest Rate Swaps |  | $ | 341,944 |  |  | Apr 2022 - Mar 2024 |  | Sep 2024- Dec 2027 |  | 1.14% |  | — |  | 4.49% |  | Other Assets |  | $ | 3,981 |  |  | $ | 5,523 |
Interest Rate Caps |  |  | 72,164 |  |  | Aug 2023 - Feb 2024 |  | Jan 2025 - Sep 2025 |  | 4.50% |  | — |  | 5.00% |  | Other Assets |  |  | 212 |  |  |  | 102 |
Interest Rate Swaps |  |  | — |  |  |  |  |  |  |  |  |  |  |  | Accounts payable and other liabilities |  |  | — |  |  |  | (85 | )
|  | $ | 414,108 |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 4,193 |  |  | $ | 5,540 |
Total asset derivatives |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 40,338 |  |  | $ | 28,989 |
Total liability derivatives |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | (3,760 | ) |  | $ | (8,892 | )

23

ACADIA REALTY TRUST AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

All of the Company’s derivative instruments have been designated as cash flow hedges and hedge the future cash outflows on variable-rate debt (Note 7). It is estimated that approximately $22.9 million included in Accumulated other comprehensive income related to derivatives will be reclassified as a reduction to interest expense within the next twelve months. As of June 30, 2024 and December 31, 2023, no derivatives were designated as fair value hedges or hedges of net investments in foreign operations. Additionally, the Company does not use derivatives for trading or speculative purposes and currently does not have any derivatives that are not designated hedges.

Risk Management Objective of Using Derivatives

The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company manages economic risks, including interest rate, liquidity and credit risk, primarily by managing the amount, sources and duration of its debt funding and, from time to time, through the use of derivative financial instruments. The Company enters into derivative financial instruments to manage exposures that result in the receipt or payment of future known and uncertain cash amounts, the values of which are determined by interest rates. The Company’s derivative financial instruments are used to manage differences in the amount, timing and duration of the Company’s known or expected cash receipts and its known or expected cash payments principally related to the Company’s investments and borrowings.

The Company is exposed to credit risk in the event of non-performance by the counterparties to the swaps if the derivative position has a positive balance. The Company believes it mitigates its credit risk by entering into swaps with major financial institutions. The Company continually monitors and actively manages interest costs on its variable-rate debt portfolio and may enter into additional interest rate swap positions or other derivative interest rate instruments based on market conditions.

Credit Risk-Related Contingent Features

The Company has agreements with each of its swap counterparties that contain a provision whereby if the Company defaults on certain of its unsecured indebtedness, the Company could also be declared in default on its swaps, resulting in an acceleration of payment under the swaps.

Other Financial Instruments

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):

|  |  |  |  | June 30, 2024 |  |  | December 31, 2023 |
|  | Level |  |  | Carrying Amount |  |  | Estimated Fair Value |  |  | Carrying Amount |  |  | Estimated Fair Value |
Notes Receivable (a) |  |  | 3 |  |  | $ | 126,653 |  |  | $ | 126,647 |  |  | $ | 124,949 |  |  | $ | 124,789 |
City Point Loan (a) |  |  | 3 |  |  |  | 66,741 |  |  |  | 66,674 |  |  |  | 66,741 |  |  |  | 66,017 |
Mortgage and Other Notes Payable (a) |  |  | 3 |  |  |  | 961,212 |  |  |  | 947,938 |  |  |  | 937,200 |  |  |  | 921,563 |
Investment in non-traded equity securities (b) |  |  | 3 |  |  |  | 4,141 |  |  |  | 4,141 |  |  |  | 4,398 |  |  |  | 4,702 |
Unsecured notes payable and Unsecured line of credit (c) |  |  | 2 |  |  |  | 746,446 |  |  |  | 746,873 |  |  |  | 943,887 |  |  |  | 937,153 |

(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 5.00% to 14.00% for the Company's notes receivable and City Point Loan, and 5.52% to 8.37% for the Company's mortgage and other notes payable, depending on the attributes of the specific loans.
(b)
Includes 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.

The Company’s cash and cash equivalents, restricted cash, rents receivable, accounts payable and certain financial instruments (classified as Level 1) included in other assets and other liabilities had fair values that approximated their carrying values due to their short maturity profiles as of June 30, 2024 and December 31, 2023.

24

ACADIA REALTY TRUST AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

9. Commitments and Contingencies

The Company is involved in various matters of litigation arising out of, or incidental to, its business. While the Company is unable to predict with certainty the outcome of any particular matter, management does not expect, when such litigation is resolved, that the Company’s resulting exposure to loss contingencies, if any, will have a material adverse effect on its consolidated financial position or results of operations.

Commitments and Guaranties

From time to time, the Company (or ventures in which the Company has an ownership interest) has agreed, and may in the future agree, to guarantee portions of the principal, interest and other amounts in connection with their borrowings, provide customary environmental indemnifications and nonrecourse carve-outs (e.g., guarantees against fraud, misrepresentation and bankruptcy) in connection with their borrowings and provide guarantees to lenders, tenants and other third parties for the completion of development projects.

With respect to borrowings of our consolidated entities, the Company and certain subsidiaries of the Company have guaranteed $72.5 million of principal payment guarantees on various property mortgage loans and the Fund IV secured bridge facility (Note 7). As of June 30, 2024 and December 31, 2023, no amounts related to the guarantees were recorded as liabilities in the Company’s condensed consolidated financial statements. As of June 30, 2024, the Company had no Core or Fund letters of credit outstanding, and as of December 31, 2023, the Company had no Core letters of credit outstanding and had Fund letters of credit of $2.0 million outstanding. The Company has not recorded any obligation associated with these letters of credit. The majority of the letters of credit are collateral for existing indebtedness and other obligations of the Company.

Additionally, in connection with the refinancing of the La Frontera Village mortgage loan of $57.0 million, which is collateralized by the investment property, Fund V guaranteed the joint venture’s obligation under the loan. Fund V earned a fee from the joint venture for providing the guarantee. As of June 30, 2024, $0.2 million relate d to the guarantee was recorded as a liability in the Company’s condensed consolidated financial statements (Note 4).

In conjunction with the development and expansion of various properties, the Company has entered into agreements with general contractors for the construction or development of properties aggregating approximately $11.5 million and $15.8 million, of which the Company’s share is $9.5 million and $12.5 million as of June 30, 2024 and December 31, 2023, respectively. The Company has committed client-related obligations for tenant improvements based on executed leases aggregating approximately $22.8 million and $25.7 million, of which the Company’s share is $13.6 million and $14.6 million, as of June 30, 2024 and December 31, 2023, respectively. The timing and amounts of payments for tenant-related obligations are uncertain and may only be due upon satisfactory performance of certain conditions.

Forfeiture of Deposits

The Company entered into a purchase and sale agreement (together with subsequent amendments thereto) to sell its West Shore Expressway property in the Core Portfolio. At the request of the former potential buyer, the Company extended the closing date numerous times in exchange for additional non-refundable deposits and contributions towards the carrying costs of the property. The agreement terminated and expired by its terms in August 2023, and the deposit was forfeited to an affiliate of the Company, when, among other things, the former potential buyer failed to close on the property pursuant to the terms of the agreement. During the third quarter of 2023, the former potential buyer filed for Chapter 11 bankruptcy, which bankruptcy was dismissed during the fourth quarter of 2023, and as of March 31, 2024 is no longer subject to appeal. The Company recorded income of $3.5 million in Other revenues on the Condensed Consolidated Statements of Operations during the three months ended March 31 2024, related to the forfeiture of the non-refundable payments.

Insurance Coverage

We carry insurance coverage on our properties of different types and in amounts with deductibles that we believe are in line with coverage customarily obtained by owners of similar properties.

25

ACADIA REALTY TRUST AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

10. Shareholders’ Equity, Noncontrolling Interests and Other Comprehensive Loss

Common Shares and Units

In January 2024, the Company completed an underwritten offering of 6,900,000 Common Shares (inclusive of the underwriters’ option to purchase 900,000 additional shares) for net proceeds of $113.0 million.

In addition to the ATM Program activity discussed below, the Company completed the following transactions in its Common Shares during the six months ended June 30, 2024:

•
The C ompany withheld 3,410 shares of its restricted Common Shares (“Restricted Shares”) to pay the employees’ statutory minimum income taxes due on the value of the portion of their Restricted Shares that vested.
•
The Company recognized Common Share and Common OP Unit-based compensation expense totaling $4.5 million in connection with Restricted Shares and Common OP Units (“Restricted Units”) (Note 13).

ATM Program

The Company has an at-the-market equity issuance program (“ATM Program”) that provides the Company with an efficient vehicle for raising public equity capital to fund its needs. The Company entered into its current $250.0 million ATM Program, which includes an optional “forward sale” component, in the first quarter of 2022. The Company had approximatel y $192.1 million o f availability under the ATM program as of June 30, 2024. The Company did no t sell or issue any Common Shares on a forward basis for the six months ended June 30, 2024 or 2023. The Company sold 1,739,288 Common Shares under its ATM Program during the six months ended June 30, 2024 genera ting $29.9 million of net proceeds after related issuance costs. No such sales were made during the six months ended June 30, 2023.

Share Repurchase Program

During 2018, the Company’s board of trustees (the “Board”) approved a new share repurchase program, which authorizes management, at its discretion, to repurchase up to $200.0 million of its outstanding Common Shares. The program does not obligate the Company to repurchase any specific number of Common Shares and may be discontinued or extended at any time. The Company did no t repurchase any shares during the six months ended June 30, 2024 or 2023. Under the share repurchase program $122.5 million remains available as of June 30, 2024.

Dividends and Distributions

During the three months ended June 30, 2024 and 2023, the Company declared distributions on Common Shares/OP Units of $0.18 per Common Share/Unit. During the six months ended June 30, 2024 and 2023, the Company declared distributions on Common Shares/OP Units of $0.36 per Common Share/Unit in the aggregate.

26

ACADIA REALTY TRUST AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Noncontrolling Interests

The following tables summarize the change in the noncontrolling interests for the three and six months ended June 30, 2024 and 2023 (dollars in thousands, except per unit data):

|  | Noncontrolling Interests in Operating Partnership (a) |  |  | Noncontrolling Interests in Partially-Owned Affiliates (b) |  |  | Total |  |  | Redeemable Noncontrolling Interests (c) |
Balance as of April 1, 2024 |  | $ | 92,707 |  |  | $ | 372,462 |  |  | $ | 465,169 |  |  | $ | 45,462 |
Distributions declared of $0.18 per Common OP Unit and distributions on Preferred OP Units |  |  | (1,228 | ) |  |  | — |  |  |  | (1,228 | ) |  |  |
Net income (loss) for the three months ended June 30, 2024 |  |  | 193 |  |  |  | 2,238 |  |  |  | 2,431 |  |  |  | (2,292 | )
Conversion of 255,304 Common OP Units and 41,599 Series C Preferred Units to Common Shares by limited partners of the Operating Partnership |  |  | (6,427 | ) |  |  | — |  |  |  | (6,427 | ) |  |  | — |
Other comprehensive income - unrealized gain on valuation of swap agreements |  |  | 86 |  |  |  | 2,282 |  |  |  | 2,368 |  |  |  | — |
Reclassification of realized interest expense on swap agreements |  |  | (50 | ) |  |  | (3,637 | ) |  |  | (3,687 | ) |  |  | — |
City Point Loan accrued interest |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (2,290 | )
Capital call receivable |  |  | — |  |  |  | 6,153 |  |  |  | 6,153 |  |  |  | — |
Noncontrolling interest distributions |  |  | — |  |  |  | (7,960 | ) |  |  | (7,960 | ) |  |  | (6 | )
Employee Long-term Incentive Plan Unit Awards |  |  | 2,473 |  |  |  | — |  |  |  | 2,473 |  |  |  | — |
Reallocation of noncontrolling interests (d) |  |  | (2,071 | ) |  |  | — |  |  |  | (2,071 | ) |  |  | — |
Balance as of June 30, 2024 |  | $ | 85,683 |  |  | $ | 371,538 |  |  | $ | 457,221 |  |  | $ | 40,874 |
Balance as of April 1, 2023 |  | $ | 103,219 |  |  | $ | 355,962 |  |  | $ | 459,181 |  |  | $ | 63,269 |
Distributions declared of $0.18 per Common OP Unit and distributions on Preferred OP Units |  |  | (1,341 | ) |  |  | — |  |  |  | (1,341 | ) |  |  | — |
Net income (loss) for the three months ended June 30, 2023 |  |  | 697 |  |  |  | (6,130 | ) |  |  | (5,433 | ) |  |  | (1,091 | )
Conversion of 54,040 Common OP Units to Common Shares by limited partners of the Operating Partnership |  |  | (901 | ) |  |  | — |  |  |  | (901 | ) |  |  | — |
Other comprehensive income - unrealized gain on valuation of swap agreements |  |  | 1,169 |  |  |  | 7,867 |  |  |  | 9,036 |  |  |  | — |
Reclassification of realized interest expense on swap agreements |  |  | (54 | ) |  |  | (3,583 | ) |  |  | (3,637 | ) |  |  | — |
City Point Loan |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (796 | )
City Point Loan accrued interest |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (2,345 | )
Noncontrolling interest contributions |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 796 |
Noncontrolling interest distributions |  |  | — |  |  |  | (5,492 | ) |  |  | (5,492 | ) |  |  | — |
Employee Long-term Incentive Plan Unit Awards |  |  | 2,468 |  |  |  | — |  |  |  | 2,468 |  |  |  | — |
Reallocation of noncontrolling interests (d) |  |  | (1,444 | ) |  |  | — |  |  |  | (1,444 | ) |  |  | — |
Balance as of June 30, 2023 |  | $ | 103,813 |  |  | $ | 348,624 |  |  | $ | 452,437 |  |  | $ | 59,833 |

27

ACADIA REALTY TRUST AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

|  | Noncontrolling Interests in Operating Partnership (a) |  |  | Noncontrolling Interests in Partially-Owned Affiliates (b) |  |  | Total |  |  | Redeemable Noncontrolling Interests (c) |
Balance at January 1, 2024 |  | $ | 99,718 |  |  | $ | 346,582 |  |  | $ | 446,300 |  |  | $ | 50,339 |
Distributions declared of $0.36 per Common OP Unit and distributions on Preferred OP Units |  |  | (2,681 | ) |  |  | — |  |  |  | (2,681 | ) |  |  | — |
Net income (loss) for the six months ended June 30, 2024 |  |  | 513 |  |  |  | (5,654 | ) |  |  | (5,141 | ) |  |  | (4,846 | )
Conversion of 1,050,449 Common OP Units and 41,599 Series C Preferred Units to Common Shares by limited partners of the Operating Partnership |  |  | (19,341 | ) |  |  | — |  |  |  | (19,341 | ) |  |  | — |
Other comprehensive income - unrealized gain on valuation of swap agreements |  |  | 945 |  |  |  | 7,660 |  |  |  | 8,605 |  |  |  | — |
Reclassification of realized interest expense on swap agreements |  |  | (104 | ) |  |  | (7,334 | ) |  |  | (7,438 | ) |  |  | — |
City Point Loan accrued interest |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (4,613 | )
Capital call receivable |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Noncontrolling interest contributions |  |  | — |  |  |  | 43,709 |  |  |  | 43,709 |  |  |  | — |
Noncontrolling interest distributions |  |  | — |  |  |  | (13,425 | ) |  |  | (13,425 | ) |  |  | (6 | )
Employee Long-term Incentive Plan Unit Awards |  |  | 6,523 |  |  |  | — |  |  |  | 6,523 |  |  |  | — |
Reallocation of noncontrolling interests (d) |  |  | 110 |  |  |  | — |  |  |  | 110 |  |  |  | — |
Balance at June 30, 2024 |  | $ | 85,683 |  |  | $ | 371,538 |  |  | $ | 457,221 |  |  | $ | 40,874 |
Balance at January 1, 2023 |  | $ | 99,554 |  |  | $ | 389,810 |  |  | $ | 489,364 |  |  | $ | 67,664 |
Distributions declared of $0.36 per Common OP Unit and distributions on Preferred OP Units |  |  | (2,684 | ) |  |  | — |  |  |  | (2,684 | ) |  |  | — |
Net income (loss) for the six months ended June 30, 2023 |  |  | 1,614 |  |  |  | 3,670 |  |  |  | 5,284 |  |  |  | (3,166 | )
Conversion of 91,433 Common OP Units to Common Shares by limited partners of the Operating Partnership |  |  | (1,533 | ) |  |  | — |  |  |  | (1,533 | ) |  |  | — |
Other comprehensive income - unrealized gain on valuation of swap agreements |  |  | 255 |  |  |  | 6,520 |  |  |  | 6,775 |  |  |  | — |
Reclassification of realized interest expense on swap agreements |  |  | (99 | ) |  |  | (6,258 | ) |  |  | (6,357 | ) |  |  | — |
City Point Loan |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (796 | )
City Point Loan accrued interest |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (4,665 | )
Noncontrolling interest contributions |  |  | — |  |  |  | 31,242 |  |  |  | 31,242 |  |  |  | 796 |
Noncontrolling interest distributions |  |  | — |  |  |  | (76,360 | ) |  |  | (76,360 | ) |  |  | — |
Employee Long-term Incentive Plan Unit Awards |  |  | 6,366 |  |  |  | — |  |  |  | 6,366 |  |  |  | — |
Reallocation of noncontrolling interests (d) |  |  | 340 |  |  |  | — |  |  |  | 340 |  |  |  | — |
Balance at June 30, 2023 |  | $ | 103,813 |  |  | $ | 348,624 |  |  | $ | 452,437 |  |  | $ | 59,833 |

(a)
Noncontrolling interests in the Operating Partnership are comprised of (i) the limited partners’ 2,065,537 and 2,864,074 Common OP Units as of June 30, 2024 and 2023, respectively; (ii) 188 Series A Preferred OP Units as of both June 30, 2024 and 2023; (iii) 84,785 and 126,384 Series C Preferred OP Units as of June 30, 2024 and 2023, respectively; and (iv) 4,690,993 and 4,298,378 LTIP units as of June 30, 2024 and 2023, respectively, as discussed in the Amended and Restated 2020 Plan (Note 13). Distributions decl ared for Preferred OP Units are reflected in net income (loss) in the table above.
(b)
Noncontrolling interests in partially-owned affiliates comprise third-party interests in Funds II, III, IV and V, an d seven ot her subsidiaries.
(c)
Redeemable noncontrolling interests comprise third-party interests that have been granted put rights, as further described below.
(d)
Adjustment reflects the difference between the fair value of the consideration received or paid and the book value of the Common Shares, Common OP Units, Preferred OP Units, and LTIP Units involving changes in ownership.

28

ACADIA REALTY TRUST AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Redeemable Noncontrolling Interests

Williamsburg Portfolio

In connection with the Williamsburg Portfolio acquisition in February 2022, the venture partner has a one-time right to put its 50.01% interest in the property to the Company for redemption at fair value at a future date (“Williamsburg NCI”). As it was unlikely as of the acquisition date that the venture partner would receive any consideration on redemption due to the Company’s preferential returns, the initial fair value of the Williamsburg NCI was determined to be zero. As of June 30, 2024, the Company determined there was no change in the fair value of the Williamsburg NCI.

City Point Loan

In August 2022, the Company provided a loan to other Fund II investors in City Point to fund the investors' pro rata contribution necessary to complete the refinancing of the City Point debt, of which $65.9 million was funded at closing ("City Point Loan"). The City Point Loan is collateralized by the investors' equity in City Point ("City Point NCI"). The City Point Loan, net of a $0.7 million allowance for credit loss as of June 30, 2024, is presented as a reduction of the City Point NCI balance. In connection with the City Point Loan, each partner has a one-time right to put its City Point NCI to the Company for redemption in exchange for the settlement of its proportion of the City Point Loan amount. As of June 30, 2024, the Company determined that the carrying value of the City Point NCI exceeded the maximum redemption value and no adjustment was required.

8833 Beverly Boulevard

In July 2023, the Company entered into a limited partnership agreement to own and operate the 8833 Beverly Boulevard property. Following the formation of the partnership, the Company retained a 97.0% controlling interest. At a future point in time, either party may elect a buy-out right, where either the Company may purchase the venture partner’s interest, or the venture partner may sell its 3.0% interest in the partnership (the "8833 Beverly NCI") to the Company for fair value. As a result of these redemption rights, the 8833 Beverly NCI was initially recorded at fair value. As of June 30, 2024, the redemption value of the 8833 Beverly NCI was $0.1 million. As of June 30, 2024, the Company determined that the carrying value exceeded the maximum redemption value and no adjustment was required.

Preferred OP Units

During 2016, the Operating Partnership issued 442,478 Common OP Units and 141,593 Series C Preferred OP Units to a third party to acquire Gotham Plaza (Note 4). The Series C Preferred OP Units have a value of $100.00 per unit and are entitled to a preferred quarterly distribution of $0.9375 per unit and are convertible into Common OP Units at a rate based on the share price at the time of conversion. If the share price is below $28.80 on the conversion date, each Series C Preferred OP Unit will be convertible into 3.4722 Common OP Units. If the share price is between $28.80 and $35.20 on the conversion date, each Series C Preferred OP Unit will be convertible into a number of Common OP Units equal to $100.00 divided by the closing share price. If the share price is above $35.20 on the conversion date, each Series C Preferred OP Unit will be convertible into 2.8409 Common OP Units. The Series C Preferred OP Units have a mandatory conversion date of December 31, 2025, at which time all units that have not been converted will automatically be converted into Common OP Units based on the same calculations. Through June 30, 2024, 56,808 Series C Preferred OP Units were converted into 197,053 Common OP Units and then into Common Shares.

In 1999, the Operating Partnership issued 1,580 Series A Preferred OP Units in connection with the acquisition of a property, which have a stated value of $1,000 per unit, and are entitled to a preferred quarterly distribution of the greater of (i) $22.50 (9% annually) per Series A Preferred OP Unit or (ii) the quarterly distribution attributable to a Series A Preferred OP Unit if such unit was converted into a Common OP Unit. Through June 30, 2024, 1,392 Series A Preferred OP Units were converted into 185,600 Common OP Units and then into Common Shares. The 188 remaining Series A Preferred OP Units are currently convertible into Common OP Units based on the stated value divided by $7.50. Either the Company or the holders can currently call for the conversion of the Series A Prefe rred OP Units at the lesser of $7.50 or the market price of the Common Shares as of the conversion date.

29

ACADIA REALTY TRUST AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

11. Leases

As Lessor

The Company has approxima tely 1,200 leases in the leasing of shopping centers and other retail properties that are either owned or, with respect to certain shopping centers, leased under long-term ground leases (see below) that expire at various dates through December 31, 2121, with renewal options. Certain leases may allow for the tenants to terminate the leases before the expiration of the lease term. Space in the properties is leased to tenants pursuant to agreements that generally provide for terms ranging from one month to sixty years and for additional rents based on certain operating expenses as well as tenants’ sales volumes.

The components of rental revenue are as follows (in thousands):

| Three Months Ended June 30, |  |  | Six Months Ended June 30, |
| 2024 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
Fixed lease revenue | $ | 69,366 |  |  | $ | 73,102 |  |  | $ | 138,023 |  |  | $ | 137,984 |
Variable lease revenue |  | 16,260 |  |  |  | 15,039 |  |  |  | 33,640 |  |  |  | 30,894 |
Total rental revenue | $ | 85,626 |  |  | $ | 88,141 |  |  | $ | 171,663 |  |  | $ | 168,878 |

The scheduled future minimum rental revenues from rental properties under the terms of non-cancelable tenant leases greater than one year (assuming no new or renegotiated leases or option extensions for such premises) as of June 30, 2024, are summarized as follows (in thousands):

Year Ending December 31, |  | Minimum Rental Revenues (a) |
2024 (Remainder) |  | $ | 122,128 |
2025 |  |  | 247,728 |
2026 |  |  | 225,695 |
2027 |  |  | 201,243 |
2028 |  |  | 171,544 |
Thereafter |  |  | 670,820 |
Total |  | $ | 1,639,158 |

(a)
Amount represents contractual lease maturities as of June 30, 2024 including any extension options that management determined were reasonably certain of exercise.

During the three and six months ended June 30, 2024 and 2023, no single tenant or pro perty collectively comprised more than 10% of the Company’s consolidated total revenues.

30

ACADIA REALTY TRUST AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

As Lessee

The Company has properties in its portfolio that are currently owned by third parties. We also lease real estate for equipment and office space. We lease these properties pursuant to ground leases that provide us the right to operate each such property, and generally provide terms ranging from five months to 98 years.

|  | Minimum Rental Payments |
Year Ending December 31, |  | Operating Leases (a) |  |  | Finance Leases (a) |
2024 (Remainder) |  | $ | 2,723 |  |  | $ | 2,046 |
2025 |  |  | 5,402 |  |  |  | 2,536 |
2026 |  |  | 5,247 |  |  |  | 1,264 |
2027 |  |  | 4,450 |  |  |  | 1,264 |
2028 |  |  | 4,236 |  |  |  | 1,310 |
Thereafter |  |  | 15,967 |  |  |  | 154,017 |
|  |  | 38,025 |  |  |  | 162,437 |
Interest |  |  | (8,061 | ) |  |  | (129,788 | )
Total |  | $ | 29,964 |  |  | $ | 32,649 |

(a)
Minimum rental payments include $8.1 million of interest related to operating leases and $129.8 million r elated to finance leases and exclude options or renewals not reasonably certain of exercise.

Additional disclosures regarding the Company’s leases as lessee are as follows (dollars in thousands):

| Three Months Ended June 30, |  |  | Six Months Ended June 30, |
| 2024 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
Lease Cost |  |  |  |  |  |  |  |  |  |  |
Finance lease cost: |  |  |  |  |  |  |  |  |  |  |
Amortization of right-of-use assets | $ | 354 |  |  |  | 225 |  |  | $ | 603 |  |  | $ | 451 |
Interest on lease liabilities |  | 512 |  |  |  | 108 |  |  |  | 1,034 |  |  |  | 214 |
Subtotal |  | 866 |  |  |  | 333 |  |  |  | 1,637 |  |  |  | 665 |
Operating lease cost |  | 1,303 |  |  |  | 1,328 |  |  |  | 2,635 |  |  |  | 2,664 |
Variable lease cost |  | 69 |  |  |  | 73 |  |  |  | 144 |  |  |  | 144 |
Total lease cost | $ | 2,238 |  |  | $ | 1,734 |  |  | $ | 4,416 |  |  | $ | 3,473 |
Other Information |  |  |  |  |  |  |  |  |  |  |
Weighted-average remaining lease term - finance leases (years) |  |  |  |  |  |  |  | 58.1 |  |  |  | 31.6 |
Weighted-average remaining lease term - operating leases (years) |  |  |  |  |  |  |  | 9.4 |  |  |  | 13.3 |
Weighted-average discount rate - finance leases |  |  |  |  |  |  |  | 6.5 | % |  |  | 6.3 | %
Weighted-average discount rate - operating leases |  |  |  |  |  |  |  | 5.1 | % |  |  | 5.1 | %

12. Segmen t Reporting

The Company has three reportable segments: Core Portfolio, Investment Management, and Structured Financing. The Company’s Core Portfolio segment consists primarily of high-quality retail properties located primarily in high-barrier-to-entry, densely-populated metropolitan areas with a long-term investment horizon. The Company’s Investment Management segment holds primarily retail real estate in which the Company co-invests with high-quality institutional investors. The Company’s Structured Financing segment consists of earnings and expenses related to notes and mortgages receivable which are held within the Core Portfolio or Investment Management (Note 3). Fees earned by the Company as the general partner or managing member of the Funds are eliminated in the Company’s condensed consolidated financial statements and are not presented in the Company’s segments.

The Company renamed its historical Funds segment as the Investment Management segment. No prior period information was recast and the designation change did not impact the Company’s condensed consolidated financial statements. Refer to Note 1.

31

ACADIA REALTY TRUST AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The following tables set forth certain segment information for the Company (in thousands):

|  | For the Three Months Ended June 30, 2024 |
|  | Core Portfolio |  |  | Investment Management |  |  | Structured Financing |  |  | Unallocated |  |  | Total |
Total Revenues |  | $ | 48,895 |  |  | $ | 38,359 |  |  | $ | — |  |  | $ | — |  |  | $ | 87,254 |
Depreciation and amortization expenses |  |  | (17,966 | ) |  |  | (16,315 | ) |  |  | — |  |  |  | — |  |  |  | (34,281 | )
General and administrative expenses |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (10,179 | ) |  |  | (10,179 | )
Property operating expenses, other operating and real estate taxes |  |  | (14,379 | ) |  |  | (11,383 | ) |  |  | — |  |  |  | — |  |  |  | (25,762 | )
Loss (gain) on disposition of properties |  |  | (2,213 | ) |  |  | 2,970 |  |  |  | — |  |  |  | — |  |  |  | 757 |
Operating income |  |  | 14,337 |  |  |  | 13,631 |  |  |  | — |  |  |  | (10,179 | ) |  |  | 17,789 |
Equity in earnings of unconsolidated affiliates |  |  | 640 |  |  |  | 3,840 |  |  |  | — |  |  |  | — |  |  |  | 4,480 |
Interest income |  |  | — |  |  |  | — |  |  |  | 5,413 |  |  |  | — |  |  |  | 5,413 |
Realized and unrealized holding (losses) gains on investments and other |  |  | (2,155 | ) |  |  | — |  |  |  | (209 | ) |  |  | — |  |  |  | (2,364 | )
Interest expense |  |  | (9,940 | ) |  |  | (13,641 | ) |  |  | — |  |  |  | — |  |  |  | (23,581 | )
Income (loss) from continuing operations before income taxes |  |  | 2,882 |  |  |  | 3,830 |  |  |  | 5,204 |  |  |  | (10,179 | ) |  |  | 1,737 |
Income tax provision |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (155 | ) |  |  | (155 | )
Net income |  |  | 2,882 |  |  |  | 3,830 |  |  |  | 5,204 |  |  |  | (10,334 | ) |  |  | 1,582 |
Net loss attributable to redeemable noncontrolling interests |  |  | — |  |  |  | 2,292 |  |  |  | — |  |  |  | — |  |  |  | 2,292 |
Net income attributable to noncontrolling interests |  |  | (194 | ) |  |  | (2,237 | ) |  |  | — |  |  |  | — |  |  |  | (2,431 | )
Net income attributable to Acadia shareholders |  | $ | 2,688 |  |  | $ | 3,885 |  |  | $ | 5,204 |  |  | $ | (10,334 | ) |  | $ | 1,443 |

|  | For the Three Months Ended June 30, 2023 |
|  | Core Portfolio |  |  | Investment Management |  |  | Structured Financing |  |  | Unallocated |  |  | Total |
Total Revenues |  | $ | 56,376 |  |  | $ | 33,572 |  |  | $ | — |  |  | $ | — |  |  | $ | 89,948 |
Depreciation and amortization expenses |  |  | (20,035 | ) |  |  | (14,021 | ) |  |  | — |  |  |  | — |  |  |  | (34,056 | )
General and administrative expenses |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (10,643 | ) |  |  | (10,643 | )
Property operating expenses, other operating and real estate taxes |  |  | (15,055 | ) |  |  | (10,536 | ) |  |  | — |  |  |  | — |  |  |  | (25,591 | )
Operating income |  |  | 21,286 |  |  |  | 9,015 |  |  |  | — |  |  |  | (10,643 | ) |  |  | 19,658 |
Equity in earnings (losses) of unconsolidated affiliates |  |  | 924 |  |  |  | (2,361 | ) |  |  | — |  |  |  | — |  |  |  | (1,437 | )
Interest income |  |  | — |  |  |  | — |  |  |  | 4,970 |  |  |  | — |  |  |  | 4,970 |
Realized and unrealized holding gains (losses) on investments and other |  |  | 1,815 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 1,815 |
Interest expense |  |  | (10,990 | ) |  |  | (11,099 | ) |  |  | — |  |  |  | — |  |  |  | (22,089 | )
Income (loss) from continuing operations before income taxes |  |  | 13,035 |  |  |  | (4,445 | ) |  |  | 4,970 |  |  |  | (10,643 | ) |  |  | 2,917 |
Income tax provision |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (165 | ) |  |  | (165 | )
Net income (loss) |  |  | 13,035 |  |  |  | (4,445 | ) |  |  | 4,970 |  |  |  | (10,808 | ) |  |  | 2,752 |
Net loss attributable to redeemable noncontrolling interests |  |  | — |  |  |  | 1,091 |  |  |  | — |  |  |  | — |  |  |  | 1,091 |
Net (income) loss attributable to noncontrolling interests |  |  | (735 | ) |  |  | 6,168 |  |  |  | — |  |  |  | — |  |  |  | 5,433 |
Net income attributable to Acadia shareholders |  | $ | 12,300 |  |  | $ | 2,814 |  |  | $ | 4,970 |  |  | $ | (10,808 | ) |  | $ | 9,276 |

32

ACADIA REALTY TRUST AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

|  | As of or for the Six Months Ended June 30, 2024 |
|  | Core Portfolio |  |  | Investment Management |  |  | Structured Financing |  |  | Unallocated |  |  | Total |
Total Revenues |  | $ | 102,433 |  |  | $ | 76,177 |  |  | $ | — |  |  | $ | — |  |  | $ | 178,610 |
Depreciation and amortization expenses |  |  | (36,232 | ) |  |  | (32,989 | ) |  |  | — |  |  |  | — |  |  |  | (69,221 | )
General and administrative expenses |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (19,947 | ) |  |  | (19,947 | )
Property operating expenses, other operating and real estate taxes |  |  | (32,298 | ) |  |  | (24,906 | ) |  |  | — |  |  |  | — |  |  |  | (57,204 | )
Loss (gain) on disposition of properties |  |  | (2,213 | ) |  |  | 1,772 |  |  |  | — |  |  |  | — |  |  |  | (441 | )
Operating income |  |  | 31,690 |  |  |  | 20,054 |  |  |  | — |  |  |  | (19,947 | ) |  |  | 31,797 |
Equity in earnings of unconsolidated affiliates |  |  | 2,747 |  |  |  | 1,421 |  |  |  | — |  |  |  | — |  |  |  | 4,168 |
Interest income |  |  | — |  |  |  | — |  |  |  | 10,651 |  |  |  | — |  |  |  | 10,651 |
Realized and unrealized holding (losses) gains on investments and other |  |  | (4,018 | ) |  |  | — |  |  |  | (397 | ) |  |  | — |  |  |  | (4,415 | )
Interest expense |  |  | (19,977 | ) |  |  | (27,313 | ) |  |  | — |  |  |  | — |  |  |  | (47,290 | )
Income (loss) from continuing operations before income taxes |  |  | 10,442 |  |  |  | (5,838 | ) |  |  | 10,254 |  |  |  | (19,947 | ) |  |  | (5,089 | )
Income tax provision |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (186 | ) |  |  | (186 | )
Net income (loss) |  |  | 10,442 |  |  |  | (5,838 | ) |  |  | 10,254 |  |  |  | (20,133 | ) |  |  | (5,275 | )
Net loss attributable to redeemable noncontrolling interests |  |  | — |  |  |  | 4,846 |  |  |  | — |  |  |  | — |  |  |  | 4,846 |
Net (income) loss attributable to noncontrolling interests |  |  | (563 | ) |  |  | 5,704 |  |  |  | — |  |  |  | — |  |  |  | 5,141 |
Net income attributable to Acadia shareholders |  | $ | 9,879 |  |  | $ | 4,712 |  |  | $ | 10,254 |  |  | $ | (20,133 | ) |  | $ | 4,712 |
Real estate at cost (a) |  | $ | 2,616,224 |  |  | $ | 1,804,484 |  |  | $ | — |  |  | $ | — |  |  | $ | 4,420,708 |
Total assets (a) |  | $ | 2,543,067 |  |  | $ | 1,581,318 |  |  | $ | 126,653 |  |  | $ | — |  |  | $ | 4,251,038 |
Cash paid for development and property improvement costs |  | $ | 29,023 |  |  | $ | 8,389 |  |  | $ | — |  |  | $ | — |  |  | $ | 37,412 |

|  | As of or for the Six Months Ended June 30, 2023 |
|  | Core Portfolio |  |  | Investment Management |  |  | Structured Financing |  |  | Unallocated |  |  | Total |
Total Revenues |  | $ | 106,172 |  |  | $ | 65,615 |  |  | $ | — |  |  | $ | — |  |  | $ | 171,787 |
Depreciation and amortization expenses |  |  | (38,694 | ) |  |  | (28,535 | ) |  |  | — |  |  |  | — |  |  |  | (67,229 | )
General and administrative expenses |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (20,589 | ) |  |  | (20,589 | )
Property operating expenses, other operating and real estate taxes |  |  | (31,164 | ) |  |  | (21,039 | ) |  |  | — |  |  |  | — |  |  |  | (52,203 | )
Operating income |  |  | 36,314 |  |  |  | 16,041 |  |  |  | — |  |  |  | (20,589 | ) |  |  | 31,766 |
Equity in earnings (losses) of unconsolidated affiliates |  |  | 2,723 |  |  |  | (4,131 | ) |  |  | — |  |  |  | — |  |  |  | (1,408 | )
Interest income |  |  | — |  |  |  | — |  |  |  | 9,788 |  |  |  | — |  |  |  | 9,788 |
Realized and unrealized holding gains on investments and other |  |  | 3,393 |  |  |  | 24,995 |  |  |  | 184 |  |  |  | — |  |  |  | 28,572 |
Interest expense |  |  | (21,660 | ) |  |  | (22,016 | ) |  |  | — |  |  |  | — |  |  |  | (43,676 | )
Income (loss) from continuing operations before income taxes |  |  | 20,770 |  |  |  | 14,889 |  |  |  | 9,972 |  |  |  | (20,589 | ) |  |  | 25,042 |
Income tax provision |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (288 | ) |  |  | (288 | )
Net income |  |  | 20,770 |  |  |  | 14,889 |  |  |  | 9,972 |  |  |  | (20,877 | ) |  |  | 24,754 |
Net loss attributable to redeemable noncontrolling interests |  |  | — |  |  |  | 3,166 |  |  |  | — |  |  |  | — |  |  |  | 3,166 |
Net income attributable to noncontrolling interests |  |  | (1,637 | ) |  |  | (3,647 | ) |  |  | — |  |  |  | — |  |  |  | (5,284 | )
Net income attributable to Acadia shareholders |  | $ | 19,133 |  |  | $ | 14,408 |  |  | $ | 9,972 |  |  | $ | (20,877 | ) |  | $ | 22,636 |
Real estate at cost (a) |  | $ | 2,613,206 |  |  | $ | 1,669,773 |  |  | $ | — |  |  | $ | — |  |  | $ | 4,282,979 |
Total assets (a) |  | $ | 2,580,565 |  |  | $ | 1,499,692 |  |  | $ | 123,902 |  |  | $ | — |  |  | $ | 4,204,159 |
Cash paid for development and property improvement costs |  | $ | 15,560 |  |  | $ | 15,010 |  |  | $ | — |  |  | $ | — |  |  | $ | 30,570 |

(a)
Total assets for the Investment Management segment includ e $549.3 million and $672.7 million related to Fund II’s City Point property as of June 30, 2024 and 2023, respectively.

13. Share Incentive a nd Other Compensation

33

ACADIA REALTY TRUST AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Share Incentive Plan

In March and May of 2020, respectively, the Board and the Company’s shareholders, approved the 2020 Share Incentive Plan (the “2020 Plan”), which increased the number of Common Shares authorized for issuance by 2,650,000 shares to an aggregate of 2,829,953 shares. On March 22, 2023 an d May 4, 2023, respectively, the Board and the Company’s shareholders approved the Amended and Restated 2020 Share Incentive Plan (the "Amended and Restated 2020 Plan") which further increased the number of Common Shares authorized for issuance by 3,100,000 to an aggregate of 3,883,564 shares. In this report, references to issuances, compensation arrangements and expenses under the Amended and Restated 2020 Plan include issuances, compensation arrangements and expenses under the originally adopted 2020 Plan, as applicable. The 2020 Plan and the Amended and Restated 2020 Plan authorize the Company to issue options, Restricted Shares, LTIP Units and other securities (collectively “Awards”) to, among others, the Company’s officers, trustees, and employees. As of June 30, 2024 a total of 3,048,027 shares remained available to be issued under the Amended and Restated 2020 Plan.

A summary of the status of the Company’s unvested Restricted Shares and LTIP Units is presented below:

Unvested Restricted Shares and LTIP Units |  | Common Restricted Shares |  |  | Weighted Grant-Date Fair Value |  |  | LTIP Units |  |  | Weighted Grant-Date Fair Value |
Unvested as of December 31, 2022 |  |  | 92,735 |  |  | $ | 17.31 |  |  |  | 1,465,398 |  |  | $ | 18.59 |
Granted |  |  | 70,629 |  |  |  | 14.11 |  |  |  | 780,193 |  |  |  | 15.00 |
Vested |  |  | (41,268 | ) |  |  | 19.09 |  |  |  | (354,343 | ) |  |  | 20.35 |
Forfeited |  |  | (8,187 | ) |  |  | 21.07 |  |  |  | (92,589 | ) |  |  | 30.78 |
Unvested as of December 31, 2023 |  |  | 113,909 |  |  |  | 14.41 |  |  |  | 1,798,659 |  |  |  | 16.03 |
Granted |  |  | 49,756 |  |  |  | 17.06 |  |  |  | 766,508 |  |  |  | 16.19 |
Vested |  |  | (55,947 | ) |  |  | 17.20 |  |  |  | (373,844 | ) |  |  | 19.36 |
Forfeited |  |  | (302 | ) |  |  | 22.53 |  |  |  | (62,502 | ) |  |  | 26.47 |
Unvested as of June 30, 2024 |  |  | 107,416 |  |  | $ | 14.16 |  |  |  | 2,128,821 |  |  | $ | 15.19 |

The weighted-average grant date fair value for Restricted Shares and LTIP Units granted for the six months ended June 30, 2024 and the year ended December 31, 2023 were $16.24 and $14.93, r espectively. As of June 30, 2024, there was $22.7 million of total unrecognized compensation cost related to unvested share-based compensation arrangements granted under the Amended and Restated 2020 Plan. That cost is expected to be recognized over a weighted-average period of 1.6 years. The total fair value of Restricted Shares that vested during the six months ended June 30, 2024 and the year ended December 31, 2023, was $1.0 million and $0.8 million, respectively. The total fair value of LTIP Units that vested (LTIP units vest primarily during the first quarter) during the six months ended June 30, 2024 and the year ended December 31, 2023, was $7.2 million and $7.2 million, respectively.

Restricted Shares and LTIP Units - Employees

During the six months ended June 30, 2024, the Company issued 727,429 LTIP Units and 26,308 restricted share units (“Restricted Share Units”), to employees of the Company pursuant to the Amended and Restated 2020 Plan. These awards were measured at their fai r value on the grant date, incorporating the following factors:

•
A portion of these annual equity awards is granted in performance-based Restricted Share Units or LTIP Units that may be earned based on the Company’s attainment of specified relative total shareholder returns (“Relative TSR”) hurdles or specified same-property net operating income growth ("Absolute SSNOI Growth").
•
In the event the Relative TSR percentile falls between the 25th percentile and the 50th percentile, the Relative TSR vesting percentage is determined using a straight-line linear interpolation between 50% and 100% and in the event that the Relative TSR percentile falls between the 50th percentile and 75th percentile, the Relative TSR vesting percentage is determined using a straight-line linear interpolation between 100% and 200%.
•
Fifty percent (50%) of the performance-based LTIP Units will vest based on the Company’s total shareholder return (“TSR”) for the three-year forward-lo oking performance period relative to the constituents of the National Association of Real Estate Investment Trusts (“NAREIT”) Shopping Center Property Subsector and twenty five percent (25%) on the Company’s TSR for the three-year forward-looking performance period as compared to the constituents of the NAREIT Retail Property Sector (both on a non-weighted basis).
•
Twenty-five percent (25%) of the performance-based LTIP Units will vest based on the Company's same-property net operating income ("SSNOI") growth for the three-year forward-looking performance period. If the Company achieves annualized SSNOI growth between 2% and 3%, the Absolute SSNOI Growth vesting percentage is determined using a straight-line linear interpolation between 50% and

34

ACADIA REALTY TRUST AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

100% and in the event that the Company achieves annualized SSNOI growth between 3% and 4%, the Absolute SSNOI Growth vesting percentage is determined using a straight-line linear interpolation between 100% and 200%.
•
If the Company’s performance fails to achieve the aforementioned hurdles at the culmination of the three-year performance period, all performance-based shares will be forfeited. Any earned performance-based shares vest in accordance with the applicable award agreements.

For valuation of the 2024 and 2023 Performance Shares, a Monte Carlo simulation was used to estimate the fair values of the Relative TSR portio n based on probability of satisfying the market conditions and the projected share prices at the time of payments, discounted to the valuation dates over the three-year performance periods. The assumptions include volatility (43.0% and 48.0%) and risk-free interest rates of (4.8% and 4.3%) for 2024 and 2023, respectively. The total fair value of the 2024 and 2023 Performance Shares will be expensed over the vesting period.

The total fair value of the above Restricted Share Units and LTIP Units as of the grant date was $12.1 million for the six months ended June 30, 2024 and $11.5 million for the year ended December 31, 2023. Total long-term incentive compensation expense, including the expense related to the Amended and Restated 2020 Plan, was $2.4 million and $2.8 million for the three months ended June 30, 2024, and 2023, respectively, and $4.5 million and $5.7 million for the six months ended June 30, 2024 and 2023, respectively, and is recorded in General and administrative in the Condensed Consolidated Statements of Operations.

Restricted Shares and LTIP Units - Board of Trustees

In addition, members of the Board have been issued shares and units under the Amended and Restated 2020 Plan. During the six months ended June 30, 2024, the Company issued 39,079 LTIP Units and 23,448 Restricted Share Units to Trustees of the Company. The Restricted Share Units do not carry voting rights or other rights of Common Shares until vesting and may not be transferred, assigned or pledged until the recipients have a vested non-forfeitable right to such shares. Dividends are not paid currently on unvested Restricted Shares but are paid cumulatively from the issuance date through the applicable vesting date of such Restricted Shares. Total trustee fee expense, including the expense related to the Amended and Restated 2020 Plan, was $0.5 million and $0.5 million for the three months ended June 30, 2024 and 2023, respectively, and $0.8 million and $1.1 million for the six months ended June 30, 2024 and 2023, respectively, and is recorded in General and administrative in the Condensed Consolidated Statements of Operations.

Long-Term Investment Alignment Program

In 2009, the Company adopted the Long-Term Investment Ali gnment Program (the “Program”) pursuant to which the Company may grant awards to employees, entitling them to receive up to 25% of any potential future payments of Promote to the Operating Partnership from Funds III, IV and V. The Company has granted such awards to employees representing 25% of the potential Promote payments from Fund III to the Operating Partnership, 23.1% of the potential Promote payments from Fund IV to the Operating Partnership and 21.3% of the potential Promote payments from Fund V to the Operating Partnership. Payments to senior executives under the Program require further Board approval at the time any potential payments are due pursuant to these grants. Compensation relating to these awards will be recognized in each reporting period in which Board approval is granted.

As payments to other employees are not subject to further Board approval, compensation relating to these awards will be recorded based on the estimated fair value as of each reporting period in accordance with ASC Topic 718, Compensation– Stock Compensation. The awards in connection with Fund IV were determined to have no intrinsic value as of June 30, 2024 or December 31, 2023.

For the six months ended June 30, 2024, the Company did no t recognize any compensation expense under the Program related to Funds III and V. For the six months ended June 30, 2023, the Comp any recognized $0.2 million of compensation expense under the Program related to Funds III and V.

35

ACADIA REALTY TRUST AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Other Plans

On a combined basis, the Company incurred a total of $0.3 million of compensation expense related to the following employee benefit plans for each of the six months ended June 30, 2024 and 2023, respectively.

Employee Share Purchase Plan

The Acadia Realty Trust Employee Share Purchase Plan (the “Purchase Plan”) allows eligible employees of the Company to purchase Common Shares through payroll deductions for a maximum aggregate issuance of 200,000 Common Shares. The Purchase Plan provides for employees to purchase Common Shares on a quarterly basis at a 15% discount to the closing price of the Company’s Common Shares on either the first day or the last day of the quarter, whichever is lower. A participant may not purchase more than $25,000 in Common Shares per year. Compensation expense will be recognized by the Company to th e extent of the above discount to the closing price of the Common Shares with respect to the applicable quarter. A total of 7,811 and 8,114 Common Shares were purchased by employees under the Purchase Plan for the six months ended June 30, 2024 and 2023, respectively, and 167,655 shares remained available to be issued under the Purchase Plan.

Deferred Share Plan

The Company maintains a Trustee Deferral and Distribution Election program, under which the participating Trustees earn deferred compensation.

Employee 401(k) Plan

The Company maintains a 401(k) plan for employees under which the Company currently matches 50% of a plan participant’s contribution up to 6% of the employee’s annual salary. A plan participant may contribute up to a maximum of 15% of their compensation, up to $23,000, for the year ending December 31, 2024.

36

ACADIA REALTY TRUST AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

14. Earnings P er Common Share

Basic earnings per Common Share is computed by dividing net income attributable to Common Shareholders by the weighted-average Common Shares outstanding (Note 10). During the periods presented, the Company had unvested LTIP Units which provide for non-forfeitable rights to dividend equivalent payments. Accordingly, these unvested LTIP Units are considered participating securities and are included in the computation of basic earnings per Common Share pursuant to the two-class method.

Diluted earnings per Common Share reflects the potential dilution of the conversion of obligations and the assumed exercises of securities including the effects of Restricted Share Units issued under the Company’s Amended and Restated 2020 Plan (Note 13). The effect of such shares is excluded from the calculation of earnings per share when anti-dilutive as indicated in the table below.

The effect of the conversion of Common OP Units is not reflected in the computation of basic and diluted earnings per share, as they are exchangeable for Common Shares on a one-for-one basis. The income allocable to such units is allocated on this same basis and reflected as noncontrolling interests in the accompanying condensed consolidated financial statements. As such, the assumed conversion of these units would have no net impact on the determination of diluted earnings per share.

|  | Three Months Ended June 30, |  |  | Six Months Ended June 30, |
(dollars in thousands, except per share data) |  | 2024 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
Numerator: |  |  |  |  |  |  |  |  |  |  |  |
Net income attributable to Acadia shareholders |  | $ | 1,443 |  |  | $ | 9,276 |  |  | $ | 4,712 |  |  | $ | 22,636 |
Less: earnings attributable to unvested participating securities |  |  | (290 | ) |  |  | (247 | ) |  |  | (577 | ) |  |  | (490 | )
Income from continuing operations net of income attributable to participating securities for basic earnings per share |  | $ | 1,153 |  |  | $ | 9,029 |  |  | $ | 4,135 |  |  | $ | 22,146 |
Denominator: |  |  |  |  |  |  |  |  |  |  |  |
Weighted average shares for basic earnings per share |  |  | 103,592,238 |  |  |  | 95,259,924 |  |  |  | 102,859,977 |  |  |  | 95,224,901 |
Effect of dilutive securities: |  |  |  |  |  |  |  |  |  |  |  |
Series A Preferred OP Units |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Employee unvested restricted shares |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Weighted average shares for diluted earnings per share |  |  | 103,592,238 |  |  |  | 95,259,924 |  |  |  | 102,859,977 |  |  |  | 95,224,901 |
Basic earnings per Common Share from continuing operations attributable to Acadia |  | $ | 0.01 |  |  | $ | 0.09 |  |  | $ | 0.04 |  |  | $ | 0.23 |
Diluted earnings per Common Share from continuing operations attributable to Acadia |  | $ | 0.01 |  |  | $ | 0.09 |  |  | $ | 0.04 |  |  | $ | 0.23 |
Anti-Dilutive Shares Excluded from Denominator: |  |  |  |  |  |  |  |  |  |  |  |
Series A Preferred OP Units |  |  | 188 |  |  |  | 188 |  |  |  | 188 |  |  |  | 188 |
Series A Preferred OP Units - Common share equivalent |  |  | 25,067 |  |  |  | 25,067 |  |  |  | 25,067 |  |  |  | 25,067 |
Series C Preferred OP Units |  |  | 84,785 |  |  |  | 126,384 |  |  |  | 84,785 |  |  |  | 126,384 |
Series C Preferred OP Units - Common share equivalent |  |  | 294,390 |  |  |  | 438,831 |  |  |  | 294,390 |  |  |  | 438,831 |
Restricted shares |  |  | 82,410 |  |  |  | 96,143 |  |  |  | 82,410 |  |  |  | 96,143 |

37

ACADIA REALTY TRUST AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

15. Variable Interest Entities

Pursuant to GAAP consolidation guidance, the Company consolidates certain VIEs for which the Company is the primary beneficiary. As of June 30, 2024 and December 31, 2023, the Company has identified seven consolidated VIEs, including the Operating Partnership and the Funds. Excluding the Operating Partnership and the Funds, the VIEs consisted of three in-service core properties: the Williamsburg Portfolio, 239 Greenwich Avenue, and 8833 Beverly Boulevard. The Operating Partnership is considered a VIE in which the Company is the primary beneficiary because the limited partners do not have substantive kick-out or participating rights. The Company consolidates these VIEs because it is the primary beneficiary in which the Company has (i) the power to direct the activities of the entity that most significantly impact the entity's economic performance, and (ii) the obligation to absorb the entity's losses or receive benefits from the entity that could potentially be significant to the entity. The third parties’ interests in these consolidated entities are reflected as noncontrolling interests and redeemable noncontrolling interests in the accompanying condensed consolidated financial statements and in Note 10.

The majority of the operations of these VIEs are funded with fees earned from investment opportunities or cash flows generated from the properties. The Company has not provided financial support to any of these VIEs that it was not previously contractually required to provide, which consists primarily of funding any capital commitments and capital expenditures, which are deemed necessary to continue to operate the entity and any operating cash shortfalls the entity may experience.

Since the Company conducts its business through and substantially all of its interests are held by the Operating Partnership, substantially all of the assets and liabilities on the Condensed Consolidated Balance Sheets represent the assets and liabilities of the Operating Partnership. As of June 30, 2024 and December 31, 2023, the Condensed Consolidated Balance Sheets include the following assets and liabilities of the consolidated VIEs of the Operating Partnership:

(in thousands) |  | June 30, 2024 |  |  | December 31, 2023 |
VIE ASSETS |  |  |  |  |  |
Operating real estate, net |  | $ | 1,654,533 |  |  | $ | 1,679,779 |
Real estate under development |  |  | 29,964 |  |  |  | 28,851 |
Investments in and advances to unconsolidated affiliates |  |  | 91,070 |  |  |  | 92,802 |
Other assets, net |  |  | 90,280 |  |  |  | 101,679 |
Right-of-use assets - operating leases, net |  |  | 2,214 |  |  |  | 2,112 |
Cash and cash equivalents |  |  | 20,719 |  |  |  | 10,787 |
Restricted cash |  |  | 10,768 |  |  |  | 7,048 |
Rents receivable, net |  |  | 23,922 |  |  |  | 21,427 |
Total VIE assets (a) |  | $ | 1,923,470 |  |  | $ | 1,944,485 |
VIE LIABILITIES |  |  |  |  |  |
Mortgage and other notes payable, net |  | $ | 800,269 |  |  | $ | 764,614 |
Unsecured notes payable, net |  |  | — |  |  |  | 80,473 |
Accounts payable and other liabilities |  |  | 128,053 |  |  |  | 127,162 |
Lease liability - operating leases, net |  |  | 2,304 |  |  |  | 2,213 |
Total VIE liabilities (a) |  | $ | 930,626 |  |  | $ | 974,462 |

(a)
As of June 30, 2024 and December 31, 2023, includes total VIE assets of $712.5 million and $721.2 million, respectively, and total VIE liabilities of $236.9 million and $234.7 million, respectively, related to third-party mortgages that are collateralized by the real estate assets of City Point, a Fund II property, and 27 East 61st Street, 801 Madison Avenue, and 1035 Third Avenue, all Fund IV properties, of which $72.5 million is guaranteed by the Operating Partnership (Note 9). The remaining VIE assets are generally encumbered by third-party non-recourse mortgage debt and are collateral under the respective mortgages and are therefore restricted and can only be used to settle the corresponding liabilities of the VIE. Th e remaining VIE assets may only be used to settle obligations of these consolidated VIEs and the remaining VIE liabilities are only the obligations of these consolidated VIEs and they do not have recourse to the Operating Partnership or the Company.

Unconsolidated VIEs

The Company holds variable interests in certain VIEs which are not consolidated. While the Company may be responsible for managing the day-to-day operations of these investees, it is not the primary beneficiary of these VIEs, as the Company does not hold unilateral power over activities that, when taken together, most significantly impact the respective VIE's economic performance. The Company accounts for investments in these entities under the equity method (Note 4). As of June 30, 2024, the Company has determined that the following entities are unconsolidated VIEs: 1238 Wisconsin Avenue and the Georgetown Portfolio. The Company's involvement with these entities is in the form of direct and indirect equity interests and fee arrangements. The maximum exposure to loss in these entities is limited to: (i) the amount of the Company's equity investment and (ii) debt guarantees (Note 9). The Company's aggregate investment in the unconsolidated VIEs assets was $44.6 million and $45.8 million

38

ACADIA REALTY TRUST AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

as of June 30, 2024 and December 31, 2023, respectively. The Company's aggregate investment in unconsolidated VIEs liabilities was $39.3 million and $40.1 million as of June 30, 2024 and December 31, 2023, respectively.

16. Subsequent Events

On July 3, 2024, the Company acquired a shopping center, the Walk at Highwoods Preserve, located in Tampa, Florida for approximately $30.7 million, inclusive of transaction costs.

On July 30, 2024, the Company declared a cash dividend of $0.19 per Common Share, which is payable on October 15, 2024 to stockholders of record as of September 30, 2024.

On July 30, 2024, the Company entered an agreement to sell $100 million in aggregate principal amount of senior unsecured notes in a private placement.

39

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

OVERVIEW

Acadia Realty Trust (the “Trust”, collectively with its consolidated subsidiaries, the “Company”), a Maryland real estate investment trust (“REIT”), is a fully-integrated equity REIT focused on the ownership, acquisition, development, and management of retail properties located primarily in high-barrier-to-entry, supply-constrained, densely populated metropolitan areas in the United States. All of the Company’s assets are held by, and all of its operations are conducted through, Acadia Realty Limited Partnership (the “Operating Partnership”) and entities in which the Operating Partnership owns an interest. As of June 30, 2024 and December 31, 2023, the Trust controlled approximately 96% and 95%, respectively, of the Operating Partnership as the sole general partner and is entitled to share, in proportion to its percentage interest, in the cash distributions and profits and losses of the Operating Partnership.

We own and operate a high-quality core real estate portfolio ("Core" or "Core Portfolio") in the nation's most dynamic retail corridors, along with an investment management platform (“Investment Management”). As part of the Investment Management platform, we have active investments through the following opportunity funds, including: Acadia Strategic Opportunity Fund II, LLC (“Fund II”), Acadia Strategic Opportunity Fund III LLC (“Fund III”), Acadia Strategic Opportunity Fund IV LLC (“Fund IV”), and Acadia Strategic Opportunity Fund V LLC (“Fund V” and, collectively with Fund II, Fund III and Fund IV, “the Funds”).

Generally, we focus on the following strategies to enhance the value of our Company and provide long-term, profitable growth:

•
maximize internal growth of the Core Portfolio through constant optimization of tenant mix, time-sensitive and cost-effective re-tenanting, and active management of our properties;
•
pursue accretive acquisition opportunities for the Core Portfolio with a focus on high-growth, residentially-dense and destination urban retail shopping corridors;
•
capitalize on accretive development/redevelopment opportunities and re-tenanting activities in order to maximize the value of Core properties;
•
within Investment Management, pursue a wide range of investments in various co-investment vehicles while matching individual investments and return profiles with strategic institutional partners;
•
maintain a strong and flexible balance sheet to support our business activities through conservative financial practices while ensuring access to sufficient capital to fund future growth.

As of June 30, 2024, we own or have an ownership interest in 199 properties held through our Core Portfolio and Investment Management platform. Our Core Portfolio consists of those properties either 100% owned, or partially owned through joint venture interests, by the Operating Partnership, or subsidiaries thereof, not including those properties owned through the Investment Management platform. These properties primarily consist of street and urban retail, and suburban shopping centers. The Investment Management platform consists of investment vehicles through which our Operating Partnership and outside institutional investors invest in primarily opportunistic and value-add retail real estate. The majority of our operating income is derived from rental revenues from operating properties, including expense recoveries from tenants, offset by operating and overhead expenses.

40

A summary of our wholly-owned and partially-owned retail properties and their physical occupancies as of June 30, 2024 is as follows:

|  | Number of Properties |  |  | Operating Properties |
|  | Development or Redevelopment |  |  | Operating |  |  | GLA |  |  | Occupancy |
Core Portfolio: |  |  |  |  |  |  |  |  |  |  |  |
Chicago Metro |  |  | 3 |  |  |  | 36 |  |  |  | 576,799 |  |  |  | 84.3 | %
New York Metro |  |  | 1 |  |  |  | 28 |  |  |  | 294,729 |  |  |  | 90.9 | %
Los Angeles Metro |  |  | — |  |  |  | 2 |  |  |  | 23,757 |  |  |  | 100.0 | %
San Francisco Metro |  |  | 2 |  |  |  | — |  |  |  | — |  |  |  | 0.0 | %
Dallas Metro |  |  | 2 |  |  |  | 14 |  |  |  | 121,386 |  |  |  | 89.3 | %
Washington DC Metro |  |  | — |  |  |  | 32 |  |  |  | 357,842 |  |  |  | 83.8 | %
Boston Metro |  |  | — |  |  |  | 1 |  |  |  | 1,050 |  |  |  | 100.0 | %
Suburban |  |  | 3 |  |  |  | 25 |  |  |  | 3,906,516 |  |  |  | 93.2 | %
Total Core Portfolio |  |  | 11 |  |  |  | 138 |  |  |  | 5,282,079 |  |  |  | 91.4 | %
Acadia Share of Total Core Portfolio |  |  | 11 |  |  |  | 138 |  |  |  | 4,916,634 |  |  |  | 91.8 | %
Investment Management: |  |  |  |  |  |  |  |  |  |  |  |
Fund II |  |  | — |  |  |  | 1 |  |  |  | 536,055 |  |  |  | 76.8 | %
Fund III |  |  | 1 |  |  |  | 1 |  |  |  | 4,637 |  |  |  | 77.6 | %
Fund IV |  |  | 1 |  |  |  | 22 |  |  |  | 526,390 |  |  |  | 85.8 | %
Fund V |  |  | — |  |  |  | 23 |  |  |  | 7,763,428 |  |  |  | 92.8 | %
Other |  |  | — |  |  |  | 1 |  |  |  | 99,837 |  |  |  | 100.0 | %
Total Investment Management |  |  | 2 |  |  |  | 48 |  |  |  | 8,930,347 |  |  |  | 91.5 | %
Acadia Share of Total Investment Management |  |  | 2 |  |  |  | 48 |  |  |  | 1,932,495 |  |  |  | 89.9 | %
Total Core and Investment Management |  |  | 13 |  |  |  | 186 |  |  |  | 14,212,426 |  |  |  | 91.5 | %
Acadia Share of Total Core and Investment Management |  |  | 13 |  |  |  | 186 |  |  |  | 6,849,129 |  |  |  | 91.3 | %

SIGNIFICANT DEVELOPMENTS DURING THE SIX MONTHS ENDED JUNE 30, 2024 AND SUBSEQUENT EVENTS

Segment Reporting

We renamed our historical Funds segment as the Investment Management segment. No prior period information was recast and the designation change did not impact our condensed consolidated financial statements. Refer to Note 12.

Investments

During the six months ended June 30, 2024, we deconsolidated one Core property, two consolidated Investment Management properties and one outparcel, and one unconsolidated investment, as follows:

•
On April 3, 2024, Fund IV sold its consolidated 2207 and 2208-2216 Fillmore Street properties for a total sales price of $14.1 million and repaid the related $6.4 million of debt at closing. Fund IV recognized a gain of $2.4 million, of which the Company’s proportionate share was $0.5 million (Note 2).
•
On May 16, 2024, we sold a 95% interest in the Shops at Grand property for a total of $48.3 million and retained a 5% ownership interest through an investment in a newly formed joint venture which was fair valued at $2.4 million. As we now have a noncontrolling interest, we recognized a loss on deconsolidation of $2.2 million related to transaction costs (Note 2).
•
On June 28, 2024, Fund V sold an outparcel at Canton Marketplace for $2.2 million and recognized a gain of $0.6 million, of which the Company’s proportionate share was $0.1 million (Note 2).
•
On June 28, 2024, Fund IV sold its unconsolidated Paramus Plaza property for a total of $36.8 million and repaid the related debt of $27.9 million. Fund IV recognized a gain of $4.1 million, of which the Company’s proportionate share was $1.0 million (Note 4).

41

In July 2024, the Company acquired a shopping center, the Walk at Highwoods Preserve, located in Tampa, Florida for $30.7 million, inclusive of transaction costs (Note 16).

Financing Activity

In April 2024, the Operating Partnership entered into a Third Amended and Restated Credit Agreement, with Bank of America, N.A., as administrative agent, to amend its existing senior unsecured credit facility (the “Amended Credit Facility”). The Amended Credit Facility provides for an increase in the existing unsecured revolving credit facility from $300.0 million to $350.0 million, which includes the capacity to issue letters of credit in an amount up to $60.0 million, and the extension of the term from June 29, 2025 to April 15, 2028, with two additional six-month extension options. The Amended Credit Facility also provides for the extension of the term on the existing $400.0 million unsecured term loan from June 29, 2026 to April 15, 2028, with two additional six-month extension options. The Amended Credit Facility has an accordion feature to increase its capacity up to $900 million at the option of the Operating Partnership, subject to customary conditions. Borrowings under the revolving credit facility and the term loan will accrue interest at a floating rate based on SOFR with margins based on leverage or credit rating.

During the six months ended June 30, 2024, we (Note 7):

•
repaid a Core mortgage loan totaling $7.3 million at maturity;
•
extended a Core mortgage loan of $60.0 million (excluding principal reductions of $2.5 million);
•
repaid the Fund V subscription line totaling $80.6 million;
•
entered into a new Investment Management mortgage loan of $43.4 million;
•
repaid two consolidated Investment Management mortgage loans of $6.4 million upon disposition of the properties (Note 2);
•
repaid a portion of one consolidated Investment Management mortgage loan of $1.5 million in connect with an outparcel disposition (Note 2);
•
extended two Investment Management mortgage loans totaling $67.7 million;
•
repaid one unconsolidated Investment Management mortgage loan of $27.9 million upon disposition of the property (Note 4); and
•
made scheduled principal payments totaling $6.1 million.

Structured Financing Investments

During the six months ended June 30, 2024, we originated one Core note receivable of $7.6 million to a related party, which is collateralized by the borrower’s equity interest in various partnerships, bears interest at 12% and matures on December 31, 2025.

Common Shares

During the six months ended June 30, 2024, we sold 1,739,288 Common Shares under our ATM Program generating $29.9 million of net proceeds after related issuance costs (Note 10).

Economic and Other Considerations

In recent years, inflation levels were elevated resulting in increased costs for certain goods and services and cost of borrowing. Inflation began to decrease in the second quarter of 2023 but still remains at elevated levels compared to the years preceding 2021. Most of our leases include contractual rent escalations and require tenants to pay their share of operating expenses, including common area maintenance, real estate taxes and insurance, thereby reducing our exposure to increases in costs and operating expenses resulting from inflation. We believe we manage our properties in a cost-conscious manner to minimize recurring operational expenses and utilize multi-year contracts to alleviate the impact of inflation on our business and our tenants. We also continue to see rising consumer confidence and we expect to continue to add value to our portfolio by executing on our current leasing momentum, our active development and redevelopment projects, and leasing pipeline.

In response to the rising rate of inflation, the Federal Reserve raised benchmark interest rates, resulting in an increase in the cost of borrowing, which could remain at elevated levels in the near-term and long-term. The rate hikes enacted by the Federal Reserve have had a significant impact on interest rate indexes such as SOFR and the Prime Rate and cost of borrowing. We manage our exposure to fluctuations in interest rates primarily through the use of fixed-rate debt and interest rate swap and cap agreements, which qualify for, and are designated as, hedging instruments. Except for increased interest costs, we have not experienced any material negative impacts at this time, and we intend to actively manage our business to respond to the ongoing economic and social impact from such events.

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RESULTS OF OPERATIONS

See Note 12 in the Notes to Condensed Consolidated Financial Statements for an overview of our three reportable segments: Core Portfolio (“Core”), Investment Management (“IM”) and Structured Financing (“SF”).

Comparison of Results for the Three Months Ended June 30, 2024 to the Three Months Ended June 30, 2023

The results of operations by reportable segment for the three months ended June 30, 2024 compared to the three months ended June 30, 2023 are summarized in the table below (in millions, totals may not add due to rounding):

|  | Three Months Ended |  |  | Three Months Ended |  |  |  |
|  | June 30, 2024 |  |  | June 30, 2023 |  |  | Increase (Decrease) |
|  | Core |  |  | IM |  |  | SF |  |  | Total |  |  | Core |  |  | IM |  |  | SF |  |  | Total |  |  | Core |  |  | IM |  |  | SF |  |  | Total |
Revenues |  | $ | 48.9 |  |  | $ | 38.4 |  |  | $ | — |  |  | $ | 87.3 |  |  | $ | 56.4 |  |  | $ | 33.6 |  |  | $ | — |  |  | $ | 89.9 |  |  | $ | (7.5 | ) |  | $ | 4.8 |  |  | $ | — |  |  | $ | (2.6 | )
Depreciation and amortization |  |  | (18.0 | ) |  |  | (16.3 | ) |  |  | — |  |  |  | (34.3 | ) |  |  | (20.0 | ) |  |  | (14.0 | ) |  |  | — |  |  |  | (34.1 | ) |  |  | (2.0 | ) |  |  | 2.3 |  |  |  | — |  |  |  | 0.2 |
Property operating expenses and real estate taxes |  |  | (14.4 | ) |  |  | (11.4 | ) |  |  | — |  |  |  | (25.8 | ) |  |  | (15.1 | ) |  |  | (10.5 | ) |  |  | — |  |  |  | (25.6 | ) |  |  | (0.7 | ) |  |  | 0.9 |  |  |  | — |  |  |  | 0.2 |
General and administrative expenses |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (10.2 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (10.6 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (0.4 | )
(Loss) gain on disposition of properties |  |  | (2.2 | ) |  |  | 3.0 |  |  |  | — |  |  |  | 0.8 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (2.2 | ) |  |  | 3.0 |  |  |  | — |  |  |  | 0.8 |
Operating income |  |  | 14.3 |  |  |  | 13.6 |  |  |  | — |  |  |  | 17.8 |  |  |  | 21.3 |  |  |  | 9.0 |  |  |  | — |  |  |  | 19.7 |  |  |  | (7.0 | ) |  |  | 4.6 |  |  |  | — |  |  |  | (1.9 | )
Equity in earnings (losses) of unconsolidated affiliates |  |  | 0.6 |  |  |  | 3.8 |  |  |  | — |  |  |  | 4.5 |  |  |  | 0.9 |  |  |  | (2.4 | ) |  |  | — |  |  |  | (1.4 | ) |  |  | (0.3 | ) |  |  | 6.2 |  |  |  | — |  |  |  | 5.9 |
Interest income |  |  | — |  |  |  | — |  |  |  | 5.4 |  |  |  | 5.4 |  |  |  | — |  |  |  | — |  |  |  | 5.0 |  |  |  | 5.0 |  |  |  | — |  |  |  | — |  |  |  | 0.4 |  |  |  | 0.4 |
Realized and unrealized holding (losses) gains on investments and other |  |  | (2.2 | ) |  |  | — |  |  |  | (0.2 | ) |  |  | (2.4 | ) |  |  | 1.8 |  |  |  | — |  |  |  | — |  |  |  | 1.8 |  |  |  | (4.0 | ) |  |  | — |  |  |  | (0.2 | ) |  |  | (4.2 | )
Interest expense |  |  | (9.9 | ) |  |  | (13.6 | ) |  |  | — |  |  |  | (23.6 | ) |  |  | (11.0 | ) |  |  | (11.1 | ) |  |  | — |  |  |  | (22.1 | ) |  |  | (1.1 | ) |  |  | 2.5 |  |  |  | — |  |  |  | 1.5 |
Income (loss) from continuing operations before income taxes |  |  | 2.9 |  |  |  | 3.8 |  |  |  | 5.2 |  |  |  | 1.7 |  |  |  | 13.0 |  |  |  | (4.4 | ) |  |  | 5.0 |  |  |  | 2.9 |  |  |  | 10.1 |  |  |  | (8.2 | ) |  |  | (0.2 | ) |  |  | 1.2 |
Income tax provision |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (0.2 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (0.2 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Net income (loss) |  |  | 2.9 |  |  |  | 3.8 |  |  |  | 5.2 |  |  |  | 1.6 |  |  |  | 13.0 |  |  |  | (4.4 | ) |  |  | 5.0 |  |  |  | 2.8 |  |  |  | (10.1 | ) |  |  | 8.2 |  |  |  | 0.2 |  |  |  | (1.2 | )
Net loss attributable to redeemable noncontrolling interests |  |  | — |  |  |  | 2.3 |  |  |  | — |  |  |  | 2.3 |  |  |  | — |  |  |  | 1.1 |  |  |  | — |  |  |  | 1.1 |  |  |  | — |  |  |  | 1.2 |  |  |  | — |  |  |  | 1.2 |
Net (income) loss attributable to noncontrolling interests |  |  | (0.2 | ) |  |  | (2.2 | ) |  |  | — |  |  |  | (2.4 | ) |  |  | (0.7 | ) |  |  | 6.2 |  |  |  | — |  |  |  | 5.4 |  |  |  | 0.5 |  |  |  | (8.4 | ) |  |  | — |  |  |  | (7.8 | )
Net income attributable to Acadia |  | $ | 2.7 |  |  | $ | 3.9 |  |  | $ | 5.2 |  |  | $ | 1.4 |  |  | $ | 12.3 |  |  | $ | 2.8 |  |  | $ | 5.0 |  |  | $ | 9.3 |  |  | $ | (9.6 | ) |  | $ | 1.1 |  |  | $ | 0.2 |  |  | $ | (7.9 | )

Core Portfolio

The results of operations for our Core Portfolio segment are depicted in the table above under the headings labeled “Core.” Segment net income attributable to Acadia for our Core Portfolio decreased $9.6 million for the three months ended June 30, 2024 compared to the prior year period as a result of the changes further described below.

Revenues for our Core Portfolio decreased $7.5 million for the three months ended June 30, 2024 compared to the prior year period primarily due to the accelerated amortization of a below market lease for a bankrupt tenant in 2023.

Depreciation and amortization for our Core Portfolio decreased $2.0 million for the three months ended June 30, 2024 compared to the prior year period primarily due to the acceleration of in-place lease intangible assets for a bankrupt tenant in 2023.

Loss on disposition of property for our Core Portfolio relates to the deconsolidation of the Shops at Grand property in 2024 (Note 2).

Realized and unrealized holding (losses) gains on investments and other for our Core Portfolio decreased $4.0 million for the three months ended June 30, 2024 compared to the prior year period primarily due to a change in the mark-to-market adjustment on the Investment in Albertsons (Note 8).

Interest expense for our Core Portfolio decreased $1.1 million for the three months ended June 30, 2024 compared to the prior year period primarily due to lower average outstanding borrowings in 2024.

Investment Management (all amounts below are consolidated amounts and are not representative of our proportionate share)

The results of operations for our Investment Management segment are depicted in the table above under the headings labeled “IM.” Segment net income attributable to Acadia for Investment Management increased $1.1 million for the three months ended June 30, 2024 compared to the prior year period as a result of the changes described below.

Revenues for Investment Management increased $4.8 million for the three months ended June 30, 2024 compared to the prior year period primarily due to property acquisitions in the second half of 2023.

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Depreciation and amortization for Investment Management increased $2.3 million for the three months ended June 30, 2024 compared to the prior year period primarily due to property acquisitions in the second half of 2023.

Gain on disposition of properties for Investment Management increased $3.0 million for the three months ended June 30, 2024 compared to the prior year period due to the sale of two properties at Fund IV and an outparcel at Fund V (Note 2).

Equity in earnings (losses) of unconsolidated affiliates for Investment Management increased $6.2 million for the three months ended June 30, 2024 compared to the prior year period primarily due to the gain on sale of Paramus Plaza in 2024 (Note 4).

Interest expense for Investment Management increased $2.5 million for the three months ended June 30, 2024 compared to the prior year period primarily due to higher average interest rates in 2024.

Net (income) loss attributable to noncontrolling interests for Investment Management decreased $8.4 million for the three months ended June 30, 2024 compared to the prior year period based on the noncontrolling interests’ share of the variances discussed above. Net income attributable to noncontrolling interests in Investment Management includes asset management fees earned by the Company of $2.4 million and $2.3 million for the three months ended June 30, 2024 and 2023, respectively.

Unallocated

The Company does not allocate general and administrative expenses and income taxes to its reportable segments. These unallocated amounts are depicted in the table above under the headings labeled “Total.”

Comparison of Results for the Six Months Ended June 30, 2024 to the Six Months Ended June 30, 2023

The results of operations by reportable segment for the six months ended June 30, 2024 compared to the six months ended June 30, 2023 are summarized in the table below (in millions, totals may not add due to rounding):

|  | Six Months Ended |  |  | Six Months Ended |  |  |  |
|  | June 30, 2024 |  |  | June 30, 2023 |  |  | Increase (Decrease) |
|  | Core |  |  | IM |  |  | SF |  |  | Total |  |  | Core |  |  | IM |  |  | SF |  |  | Total |  |  | Core |  |  | IM |  |  | SF |  |  | Total |
Revenues |  | $ | 102.4 |  |  | $ | 76.2 |  |  | $ | — |  |  | $ | 178.6 |  |  | $ | 106.2 |  |  | $ | 65.6 |  |  | $ | — |  |  | $ | 171.8 |  |  | $ | (3.8 | ) |  | $ | 10.6 |  |  | $ | — |  |  | $ | 6.8 |
Depreciation and amortization |  |  | (36.2 | ) |  |  | (33.0 | ) |  |  | — |  |  |  | (69.2 | ) |  |  | (38.7 | ) |  |  | (28.5 | ) |  |  | — |  |  |  | (67.2 | ) |  |  | (2.5 | ) |  |  | 4.5 |  |  |  | — |  |  |  | 2.0 |
Property operating expenses and real estate taxes |  |  | (32.3 | ) |  |  | (24.9 | ) |  |  | — |  |  |  | (57.2 | ) |  |  | (31.2 | ) |  |  | (21.0 | ) |  |  | — |  |  |  | (52.2 | ) |  |  | 1.1 |  |  |  | 3.9 |  |  |  | — |  |  |  | 5.0 |
General and administrative expenses |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (19.9 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (20.6 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (0.7 | )
(Loss) gain on disposition of properties |  |  | (2.2 | ) |  |  | 1.8 |  |  |  | — |  |  |  | (0.4 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (2.2 | ) |  |  | 1.8 |  |  |  | — |  |  |  | (0.4 | )
Operating income (loss) |  |  | 31.7 |  |  |  | 20.1 |  |  |  | — |  |  |  | 31.8 |  |  |  | 36.3 |  |  |  | 16.0 |  |  |  | — |  |  |  | 31.8 |  |  |  | (4.6 | ) |  |  | 4.1 |  |  |  | — |  |  |  | — |
Equity in earnings (losses) of unconsolidated affiliates |  |  | 2.7 |  |  |  | 1.4 |  |  |  | — |  |  |  | 4.2 |  |  |  | 2.7 |  |  |  | (4.1 | ) |  |  | — |  |  |  | (1.4 | ) |  |  | — |  |  |  | 5.5 |  |  |  | — |  |  |  | 5.6 |
Interest income |  |  | — |  |  |  | — |  |  |  | 10.7 |  |  |  | 10.7 |  |  |  | — |  |  |  | — |  |  |  | 9.8 |  |  |  | 9.8 |  |  |  | — |  |  |  | — |  |  |  | 0.9 |  |  |  | 0.9 |
Realized and unrealized holding (losses) gains on investments and other |  |  | (4.0 | ) |  |  | — |  |  |  | (0.4 | ) |  |  | (4.4 | ) |  |  | 3.4 |  |  |  | 25.0 |  |  |  | 0.2 |  |  |  | 28.6 |  |  |  | (7.4 | ) |  |  | (25.0 | ) |  |  | (0.6 | ) |  |  | (33.0 | )
Interest expense |  |  | (20.0 | ) |  |  | (27.3 | ) |  |  | — |  |  |  | (47.3 | ) |  |  | (21.7 | ) |  |  | (22.0 | ) |  |  | — |  |  |  | (43.7 | ) |  |  | (1.7 | ) |  |  | 5.3 |  |  |  | — |  |  |  | 3.6 |
Income (loss) from continuing operations before income taxes |  |  | 10.4 |  |  |  | (5.8 | ) |  |  | 10.3 |  |  |  | (5.1 | ) |  |  | 20.8 |  |  |  | 14.9 |  |  |  | 10.0 |  |  |  | 25.0 |  |  |  | 10.4 |  |  |  | 20.7 |  |  |  | (0.3 | ) |  |  | 30.1 |
Income tax provision |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (0.2 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (0.3 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 0.1 |
Net income (loss) |  |  | 10.4 |  |  |  | (5.8 | ) |  |  | 10.3 |  |  |  | (5.3 | ) |  |  | 20.8 |  |  |  | 14.9 |  |  |  | 10.0 |  |  |  | 24.8 |  |  |  | (10.4 | ) |  |  | (20.7 | ) |  |  | 0.3 |  |  |  | (30.1 | )
Net loss attributable to redeemable noncontrolling interests |  |  | — |  |  |  | 4.8 |  |  |  | — |  |  |  | 4.8 |  |  |  | — |  |  |  | 3.2 |  |  |  | — |  |  |  | 3.2 |  |  |  | — |  |  |  | 1.6 |  |  |  | — |  |  |  | 1.6 |
Net income attributable to noncontrolling interests |  |  | (0.6 | ) |  |  | 5.7 |  |  |  | — |  |  |  | 5.1 |  |  |  | (1.6 | ) |  |  | (3.6 | ) |  |  | — |  |  |  | (5.3 | ) |  |  | 1.0 |  |  |  | 9.3 |  |  |  | — |  |  |  | 10.4 |
Net income (loss) attributable to Acadia |  | $ | 9.9 |  |  | $ | 4.7 |  |  | $ | 10.3 |  |  | $ | 4.7 |  |  | $ | 19.1 |  |  | $ | 14.4 |  |  | $ | 10.0 |  |  | $ | 22.6 |  |  | $ | (9.2 | ) |  | $ | (9.7 | ) |  | $ | 0.3 |  |  | $ | (17.9 | )

Core Portfolio

The results of operations for our Core Portfolio segment are depicted in the table above under the headings labeled “Core.” Segment net income attributable to Acadia for our Core Portfolio decreased $9.2 million for the six months ended June 30, 2024 compared to the prior year period as a result of the changes further described below.

Revenues for our Core Portfolio decreased $3.8 million for the six months ended June 30, 2024 compared to the prior year period primarily due to $7.8 million accelerated amortization of a below market lease for a bankrupt tenant in 2023, offset by $3.5 million for the recognition of a forfeited deposit within Other revenues in the Condensed Consolidated Statements of Operations for a property previously under contract for sale in 2024.

44

Depreciation and amortization for our Core Portfolio decreased $2.5 million for the six months ended June 30, 2024 compared to the prior year period primarily due to the write-off of in-place lease intangible assets for a bankrupt tenant in 2023.

Property operating expenses and real estate taxes for our Core Portfolio increased $1.1 million for the six months ended June 30, 2024 compared to the prior year period primarily due to increased legal expense reserves in the current year.

Loss on disposition of property for our Core Portfolio relates to the deconsolidation of the Shops at Grand property in 2024 (Note 2).

Realized and unrealized holding (losses) gains on investments and other for our Core Portfolio decreased $7.4 million for the six months ended June 30, 2024 compared to the prior year period primarily due to a change in the mark-to-market adjustment on the Investment in Albertsons (Note 8).

Interest expense for our Core Portfolio decreased $1.7 million for the six months ended June 30, 2024 compared to the prior year period due to lower average outstanding borrowings in 2024.

Net income attributable to noncontrolling interests for our Core Portfolio increased $1.0 million for the six months ended June 30, 2024 compared to the prior year period based on the noncontrolling interests’ share of the variances discussed above.

Investment Management (all amounts below are consolidated amounts and are not representative of our proportionate share)

The results of operations for our Investment Management segment are depicted in the table above under the headings labeled “IM.” Segment net income attributable to Acadia for Investment Management decreased $9.7 million for the six months ended June 30, 2024 compared to the prior year period as a result of the changes described below.

Revenues for Investment Management increased $10.6 million for the six months ended June 30, 2024 compared to the prior year period primarily due to (i) $9.6 million from acquisitions in 2023, and (ii) $1.7 million from new tenant lease-up within Investment Management in 2023 and 2024.

Depreciation and amortization for Investment Management increased $4.5 million for the six months ended June 30, 2024 compared to the prior year period primarily due to property acquisitions in 2023.

Property operating expenses and real estate taxes for Investment Management increased $3.9 million for the six months ended June 30, 2024 compared to the prior year period primarily due to property acquisitions in 2023 and non-recurring property operating expenses within Investment Management.

(Loss) gain on disposition of property for Investment Management increased $1.8 million for the six months ended June 30, 2024 compared to the prior year period due to the $3.0 million gain on disposition of two properties at Fund IV and an outparcel at Fund V, offset by a $1.2 million loss related to a previously disposed property (Note 2).

Equity in earnings (losses) of unconsolidated affiliates for Investment Management increased $5.5 million for the six months ended June 30, 2024 compared to the prior year period primarily due to the gain on disposition of Paramus Plaza in 2024 (Note 4).

Realized and unrealized holding (losses) gains on investments and other for the Investment Management decreased $25.0 million for the six months ended June 30, 2024 compared to the prior year period primarily due to a $28.2 million increase in dividend income from Albertsons in 2023 offset by a $2.0 million mark-to-market loss in 2023 (Note 8).

Interest expense for Investment Management increased $5.3 million for the six months ended June 30, 2024 compared to the prior year period primarily due to higher average interest rates in 2024.

Net loss attributable to redeemable noncontrolling interests for Investment Management increased $1.6 million for the six months ended June 30, 2024 compared to the prior year period due to the receipt of past due rents for a tenant in 2023.

Segment net income attributable to Acadia for Investment Management decreased $9.7 million for the six months ended June 30, 2024 compared to the prior year period as a result of the changes described below. Net loss attributable to noncontrolling interests in Investment Management includes asset management fees earned by the Company of $4.7 million and $4.8 million for the six months ended June 30, 2024 and 2023, respectively.

Unallocated

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The Company does not allocate general and administrative expenses and income taxes to its reportable segments. These unallocated amounts are depicted in the table above under the headings labeled “Total.”

NON-GAAP FINANCIAL MEASURES

Net Property Operating Income

The following discussion of net property operating income (“NOI”) and rent spreads on new and renewal leases includes the activity from both our consolidated and our pro-rata share of unconsolidated properties within our Core Portfolio. Investment Management invests primarily in properties that typically require significant leasing and development. Given that Investment Management is primarily comprised of finite-life investment vehicles, these properties are sold following stabilization. For these reasons, we believe NOI and rent spreads are not meaningful measures for our Investment Management investments.

NOI represents property revenues less property expenses. We consider NOI and rent spreads on new and renewal leases for our Core Portfolio to be appropriate supplemental disclosures of portfolio operating performance due to their widespread acceptance and use within the REIT investor and analyst communities. NOI and rent spreads on new and renewal leases are presented to assist investors in analyzing our property performance, however, our method of calculating these may be different from methods used by other REITs and, accordingly, may not be comparable to such other REITs.

A reconciliation of consolidated operating income to net operating income - Core Portfolio follows (in thousands):

|  | Three Months Ended June 30, |  |  | Six Months Ended June 30, |
|  | 2024 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
Consolidated operating income |  | $ | 17,789 |  |  | $ | 19,658 |  |  | $ | 31,797 |  |  | $ | 31,766 |
Add back: |  |  |  |  |  |  |  |  |  |  |  |
General and administrative |  |  | 10,179 |  |  |  | 10,643 |  |  |  | 19,947 |  |  |  | 20,589 |
Depreciation and amortization |  |  | 34,281 |  |  |  | 34,056 |  |  |  | 69,221 |  |  |  | 67,229 |
Gain (loss) on disposition of properties |  |  | (757 | ) |  |  | — |  |  |  | 441 |  |  |  | — |
Less: |  |  |  |  |  |  |  |  |  |  |  |
Above/below-market rent, straight-line rent and other adjustments (a) |  |  | (2,869 | ) |  |  | (13,088 | ) |  |  | (7,477 | ) |  |  | (15,330 | )
Consolidated NOI |  |  | 58,623 |  |  |  | 51,269 |  |  |  | 113,929 |  |  |  | 104,254 |
Redeemable noncontrolling interest in consolidated NOI |  |  | (1,381 | ) |  |  | (1,182 | ) |  |  | (2,422 | ) |  |  | (2,399 | )
Noncontrolling interest in consolidated NOI |  |  | (18,322 | ) |  |  | (13,730 | ) |  |  | (35,253 | ) |  |  | (28,205 | )
Less: Operating Partnership's interest in Investment Management NOI included above |  |  | (6,132 | ) |  |  | (4,765 | ) |  |  | (11,473 | ) |  |  | (9,802 | )
Add: Operating Partnership's share of unconsolidated joint ventures NOI (b) |  |  | 2,251 |  |  |  | 4,141 |  |  |  | 6,212 |  |  |  | 8,100 |
Core Portfolio NOI |  | $ | 35,039 |  |  | $ | 35,733 |  |  | $ | 70,993 |  |  | $ | 71,948 |

a)
Includes straight-line rent reserves. See Note 11 for additional information about straight-line rent reserves and adjustments for the periods presented.
b)
Does not include the Operating Partnership’s share of NOI from unconsolidated joint ventures within Investment Management.

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Same-Property NOI includes Core Portfolio properties that we owned for both the current and prior periods presented, but excludes those properties that we acquired, sold or expected to sell, redeveloped and developed during these periods. The following table summarizes Same-Property NOI for our Core Portfolio (dollars in thousands):

|  | Three Months Ended June 30, |  |  | Six Months Ended June 30, |
|  | 2024 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
Core Portfolio NOI |  | $ | 35,039 |  |  | $ | 35,733 |  |  | $ | 70,993 |  |  | $ | 71,948 |
Less properties excluded from Same-Property NOI |  |  | (2,961 | ) |  |  | (5,335 | ) |  |  | (6,887 | ) |  |  | (11,235 | )
Same-Property NOI |  | $ | 32,078 |  |  | $ | 30,398 |  |  | $ | 64,106 |  |  | $ | 60,713 |
Percent change from prior year period |  |  | 5.5 | % |  |  |  |  |  | 5.6 | % |  |  |
Components of Same-Property NOI: |  |  |  |  |  |  |  |  |  |  |  |
Same-Property Revenues |  | $ | 45,613 |  |  | $ | 43,275 |  |  | $ | 91,756 |  |  | $ | 87,057 |
Same-Property Operating Expenses |  |  | (13,535 | ) |  |  | (12,877 | ) |  |  | (27,650 | ) |  |  | (26,344 | )
Same-Property NOI |  | $ | 32,078 |  |  | $ | 30,398 |  |  | $ | 64,106 |  |  | $ | 60,713 |

Rent Spreads on Core Portfolio New and Renewal Leases

The following table summarizes rent spreads on both a cash basis and straight-line basis for new and renewal leases based on leases executed within our Core Portfolio for the periods presented. Cash basis represents a comparison of rent most recently paid on the previous lease as compared to the initial rent paid on the new lease. Straight-line basis represents a comparison of rents as adjusted for contractual escalations, abated rent, and lease incentives for the same comparable leases. The table below includes embedded option renewals for which the renewed rent was equal to or approximated existing base rent.

|  | Three Months Ended June 30, 2024 |  |  | Six Months Ended June 30, 2024 |
Core Portfolio New and Renewal Leases |  | Cash Basis |  |  | Straight- Line Basis |  |  | Cash Basis |  |  | Straight- Line Basis |
Number of new and renewal leases executed |  |  | 18 |  |  |  | 18 |  |  |  | 40 |  |  |  | 40 |
GLA commencing |  |  | 78,816 |  |  |  | 78,816 |  |  |  | 266,667 |  |  |  | 266,667 |
New base rent |  | $ | 73.06 |  |  | $ | 77.31 |  |  | $ | 37.44 |  |  | $ | 38.94 |
Expiring base rent |  | $ | 66.67 |  |  | $ | 62.84 |  |  | $ | 34.76 |  |  | $ | 33.11 |
Percent growth in base rent |  |  | 9.6 | % |  |  | 23.0 | % |  |  | 7.7 | % |  |  | 17.6 | %
Average cost per square foot (a) |  | $ | 12.23 |  |  | $ | 12.23 |  |  | $ | 4.57 |  |  | $ | 4.57 |
Weighted average lease term (years) |  |  | 6.1 |  |  |  | 6.1 |  |  |  | 5.1 |  |  |  | 5.1 |

(a) The average cost per square foot includes tenant improvement costs, leasing commissions and tenant allowances.

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Funds from Operations

We consider funds from operations (“FFO”) as defined by the National Association of Real Estate Investment Trusts (“NAREIT”) to be an appropriate supplemental disclosure of operating performance due to its widespread acceptance and use within the REIT investor and analyst communities. FFO is presented to assist investors in analyzing our performance. It is helpful as it excludes various items included in net income that are not indicative of the operating performance, such as gains (losses) from sales of depreciated property, depreciation and amortization, and impairment of real estate. Our method of calculating FFO may be different from methods used by other REITs and, accordingly, may not be comparable to such other REITs. FFO does not represent cash generated from operations as defined by GAAP and is not indicative of cash available to fund all cash needs, including distributions. It should not be considered as an alternative to net income for the purpose of evaluating our performance or to cash flows as a measure of liquidity. Consistent with the NAREIT definition, we define FFO as net income (computed in accordance with GAAP), excluding gains (losses) from sales of depreciated property and impairment of depreciable real estate, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Also consistent with NAREIT’s definition of FFO, the Company has elected to include gains and losses incidental to its main business (including those related to its RCP investments, such as Albertsons) in FFO. A reconciliation of net income (loss) attributable to Acadia to FFO follows (dollars in thousands, except per share data):

|  | Three Months Ended June 30, |  |  | Six Months Ended June 30, |
|  | 2024 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
Net income attributable to Acadia |  | $ | 1,443 |  |  | $ | 9,276 |  |  | $ | 4,712 |  |  | $ | 22,636 |
Depreciation of real estate and amortization of leasing costs (net of noncontrolling interests' share) |  |  | 26,291 |  |  |  | 28,248 |  |  |  | 53,378 |  |  |  | 54,692 |
Loss on disposition of property (net of noncontrolling interests' share) |  |  | 568 |  |  |  | — |  |  |  | 843 |  |  |  | — |
Income attributable to Common OP Unit holders |  |  | 103 |  |  |  | 574 |  |  |  | 306 |  |  |  | 1,368 |
Distributions - Preferred OP Units |  |  | 84 |  |  |  | 123 |  |  |  | 207 |  |  |  | 246 |
Funds from operations attributable to Common Shareholders and Common OP Unit holders - Basic and Diluted |  | $ | 28,489 |  |  | $ | 38,221 |  |  | $ | 59,446 |  |  | $ | 78,942 |
Funds From Operations per Share - Diluted |  |  |  |  |  |  |  |  |  |  |  |
Basic weighted-average shares outstanding, GAAP earnings |  |  | 103,592,238 |  |  |  | 95,259,924 |  |  |  | 102,859,977 |  |  |  | 95,224,901 |
Weighted-average OP Units outstanding |  |  | 7,226,475 |  |  |  | 6,918,443 |  |  |  | 7,525,197 |  |  |  | 6,835,840 |
Basic weighted-average shares and OP Units outstanding, FFO |  |  | 110,818,713 |  |  |  | 102,178,367 |  |  |  | 110,385,174 |  |  |  | 102,060,741 |
Assumed conversion of Preferred OP Units to Common Shares |  |  | 319,457 |  |  |  | 463,898 |  |  |  | 25,067 |  |  |  | 463,898 |
Assumed conversion of LTIP units and Restricted Share Units to Common Shares |  |  | 698,490 |  |  |  | — |  |  |  | 686,088 |  |  |  | — |
Diluted weighted-average number of Common Shares and Common OP Units outstanding, FFO |  |  | 111,836,660 |  |  |  | 102,642,265 |  |  |  | 111,096,329 |  |  |  | 102,524,639 |
Diluted Funds from operations, per Common Share and Common OP Unit |  | $ | 0.25 |  |  | $ | 0.37 |  |  | $ | 0.54 |  |  | $ | 0.77 |

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LIQUIDITY AND CAPITAL RESOURCES

Uses of Liquidity and Cash Requirements

Generally, our principal uses of liquidity are (i) distributions to our shareholders and OP unit holders, (ii) investments, which include the funding of our capital committed to the Funds in our Investment Management platform and property acquisitions and development/re-tenanting activities within our Core Portfolio, (iii) distributions to our Fund investors, (iv) debt service and loan repayments and (v) share repurchases.

Distributions

In order to qualify as a REIT for federal income tax purposes, we must distribute at least 90% of our taxable income to our shareholders. During the six months ended June 30, 2024, we paid dividends and distributions on our Common Shares and Preferred OP Units totaling $37.5 million.

Investments

In July 2024, through Investment Management, we acquired a shopping center, the Walk at Highwoods Preserve, located in Tampa, Florida for $30.7 million, inclusive of transaction costs (Note 16).

Structured Financing Investments

During the six months ended June 30, 2024, we originated one Core note receivable of $7.6 million to a related party, which is secured by the borrower’s equity interest in the Renaissance Portfolio, 1238 Wisconsin Avenue, and another Georgetown property, bears interest at 12% and matures on December 31, 2025 (Note 3).

Capital Commitments

During the six months ended June 30, 2024, we made capital contributions aggregating $11.1 million to our Funds.

As of June 30, 2024, our share of the remaining capital commitments to our Funds aggregated $18.1 million as follows:

•
$0.5 million to Fund III – Fund III was launched in May 2007 with total committed capital of $450.0 million, of which our original share was $89.6 million. During 2015, we acquired an additional interest, which had an original capital commitment of $20.9 million.
•
$5.5 million to Fund IV – Fund IV was launched in May 2012 with total committed capital of $530.0 million, of which our original share was $122.5 million.
•
$12.1 million to Fund V – Fund V was launched in August 2016 with total committed capital of $520.0 million, of which our original share was $104.5 million.

Development Activities

During the six months ended June 30, 2024, capitalized costs associated with development activities totaled $7 million (Note 2). As of June 30, 2024, we had a total of 13 consolidated projects under development or redevelopment, for which the estimated total cost to complete these projects through 2025 was $35.0 million to $61.2 million, and our estimated share was approximately $18.9 million to $33.7 million. Substantially all remaining development and redevelopment costs are discretionary, and could be affected by various risks and uncertainties, including, but not limited to, the effects of the current inflationary environment, rising interest rates, and other risks detailed in Part I, Item 1A. Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2023.

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Debt

A summary of our consolidated debt, which includes the full amount of Fund related obligations and excludes our pro rata share of debt at our unconsolidated subsidiaries, is as follows (in thousands):

|  | June 30, |  |  | December 31, |
|  | 2024 |  |  | 2023 |
Total Debt - Fixed and Effectively Fixed Rate |  | $ | 1,379,807 |  |  | $ | 1,454,707 |
Total Debt - Variable Rate |  |  | 327,851 |  |  |  | 426,380 |
|  |  | 1,707,658 |  |  |  | 1,881,087 |
Net unamortized debt issuance costs |  |  | (12,053 | ) |  |  | (11,186 | )
Unamortized premium |  |  | 223 |  |  |  | 240 |
Total Indebtedness |  | $ | 1,695,828 |  |  | $ | 1,870,141 |

As of June 30, 2024, our consolidated indebtedness aggregated $1,707.7 million, excluding unamortized premium of $0.2 million and net unamortized loan costs of $12.1 million, and was collateralized by 31 properties and related tenant leases. Stated interest rates on our outstanding indebtedness ranged from 3.99% to SOFR + 3.75% with maturities that ranged from July 8, 2024 to April 15, 2035, without regard to available extension options. With respect to the debt maturing in 2024, we are actively pursuing refinancing the remaining obligations, though there can be no assurance that we can refinance such obligations on favorable terms or at all. Taking into consideration $1,188.3 million of notional principal under variable to fixed-rate swap agreements currently in effect, $1,379.8 million of the portfolio debt, or 80.8%, was fixed at a 4.74% weighted average interest rate and $327.9 million, or 19.2%%, was floating at a 8.10% weighted average interest rate as of June 30, 2024. Our variable-rate debt includes $151.2 million of debt subject to interest rate caps.

Without regard to available extension options, as of June 30, 2024, we had $211.8 million of debt maturing in 2024 at a weighted-average interest rate of 4.18%; $2.8 million of scheduled principal amortization due in the remainder of 2024; and our share of scheduled remaining 2024 principal payments and maturities on our unconsolidated debt was $59.6 million. In addition, $373.6 million of our total consolidated debt and $57.7 million of our pro-rata share of unconsolidated debt will come due by June 30, 2025. With respect to the debt maturing in 2024 and 2025, we have options to extend consolidated debt aggregating $40.0 million and $327.3 million as of June 30, 2024 and; however, there can be no assurance that the Company will be able to successfully execute any or all of its available extension options. For the remaining indebtedness, we may not have sufficient cash on hand to repay such indebtedness, and, therefore, we expect to refinance at least a portion of this indebtedness or select other alternatives based on market conditions as these loans mature; however, there can be no assurance that we will be able to obtain financing on acceptable terms or at all. Our ability to obtain financing could be affected by various risks and uncertainties, including, but not limited to, the effects of the current inflationary environment, rising interest rates, and other risks detailed in Part I, Item 1A. Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2023.

Share Repurchase Program

We maintain a share repurchase program under which $122.5 million remains available as of June 30, 2024 (Note 10). We did not repurchase any shares under this program during the six months ended June 30, 2024.

Sources of Liquidity

Our primary sources of capital for funding our short-term (less than 12 months) and long-term (12 months and longer) liquidity needs include (i) the issuance of both public equity and OP Units, (ii) the issuance of both secured and unsecured debt, (iii) unfunded capital commitments from noncontrolling interests within Investment Management, (iv) future sales of existing properties, (v) repayments of structured financing investments, (vi) liquidation of marketable securities, and (vii) cash on hand and future cash flow from operating activities. Our cash on hand in our consolidated subsidiaries as of June 30, 2024 totaled $31.9 million. Our remaining sources of liquidity are described further below.

Issuance of Common Shares

In January 2024, the Company completed an underwritten offering of 6,900,000 Common Shares (inclusive of the underwriters’ option to purchase 900,000 additional shares) for net proceeds of $113.0 million.

ATM Program

We have an ATM Program (Note 10) that provides us with an efficient and low-cost vehicle for raising capital through public equity issuances on an as-we-go basis to fund our capital needs. Through this program, we have been able to effectively “match-fund” the required capital for our Core Portfolio and our share of Investment Management acquisitions through the issuance of Common Shares over extended periods employing

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a price averaging strategy. In addition, from time to time, we have issued and may issue, equity in follow-on offerings separate from our ATM Program. Net proceeds raised through our ATM Program and follow-on offerings are primarily used for acquisitions, both for our Core Portfolio and our pro-rata share of Investment Management acquisitions, and for general corporate purposes. The Company sold 1,739,288 Common Shares under its ATM Program during the six months ended June 30, 2024 generating $29.9 million of net proceeds after related issuance costs.

Investment Management Capital

During the six months ended June 30, 2024, Fund V called for capital contributions of $52.2 million, of which our aggregate share was $11.1 million. As of June 30, 2024, unfunded capital commitments from noncontrolling interests within Funds II, III, IV and V were $0, $1.4 million, $18.5 million and $48.3 million, respectively.

Asset Sales and Other Transactions

During the six months ended June 30, 2024, we deconsolidated one Core property, two consolidated Investment Management properties and one outparcel, and one unconsolidated investment, as follows:

•
On April 3, 2024, Fund IV sold its consolidated 2207 and 2208-2216 Fillmore Street properties for a total sales price of $14.1 million and repaid the related $6.4 million of debt at closing. Fund IV recognized a gain of $2.4 million, of which the Company’s proportionate share was $0.5 million (Note 2).
•
On May 16, 2024, we sold a 95% interest in the Shops at Grand for a total of $48.3 million and retained a 5% ownership interest through an investment in a newly formed joint venture which was fair valued at $2.4 million. As we now have a noncontrolling interest, we recognized a loss on deconsolidation of $2.2 million related to transaction costs (Note 2).
•
On June 28, 2024, Fund V sold an outparcel at Canton Marketplace for $2.2 million and recognized a gain of $0.6 million, of which the Company’s proportionate share was $0.1 million (Note 2).
•
On June 28, 2024, Fund IV sold its unconsolidated Paramus Plaza property for a total of $36.8 million and repaid the related debt of $27.9 million. Fund IV recognized a gain of $4.1 million, of which the Company’s proportionate share was $1.0 million (Note 4).

During the six months ended June 30, 2024, we sold 350,000 shares of Albertsons, generating net proceeds of $7.6 million. As of June 30, 2024, we held 1.1 million shares with a fair value of $21.7 million (Note 8). In addition, during the six months ended June 30, 2024, we recognized dividend income of $0.3 million (Note 8).

Structured Financing Repayments

During the six months ended June 30, 2024, the Company received full payment on a $6.0 million Core Portfolio note.

Financing and Debt

As of June 30, 2024, we had $253.6 million of capacity under existing Core Portfolio debt facilities. In addition, as of that date within our Core Portfolio and Investment Management, we had 91 unleveraged consolidated properties with an aggregate carrying value of approximately $1.8 billion, although there can be no assurance that we would be able to obtain financing for these properties at favorable terms, if at all.

HISTORICAL CASH FLOW

The following table compares the historical cash flow for the six months ended June 30, 2024 with the cash flow for the six months ended June 30, 2023 (in millions, totals may not add due to rounding):

|  | Six Months Ended June 30, |
|  | 2024 |  |  | 2023 |  |  | Variance |
Net cash provided by operating activities |  | $ | 58.0 |  |  | $ | 89.5 |  |  | $ | (31.5 | )
Net cash provided by (used in) investing activities |  |  | 20.0 |  |  |  | (26.7 | ) |  |  | 46.7 |
Net cash used in financing activities |  |  | (48.2 | ) |  |  | (65.5 | ) |  |  | 17.3 |
Increase (decrease) in cash and cash equivalents and restricted cash |  | $ | 29.8 |  |  | $ | (2.7 | ) |  | $ | 32.5 |

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Operating Activities

Net cash provided by operating activities primarily consists of cash inflows from rental revenue, and cash outflows for property operating expenses, general and administrative expenses and interest and debt expense.

Our operating activities provided $31.5 million less cash for the six months ended June 30, 2024 as compared to the three months ended June 30, 2023, primarily due to the $28.2 million dividend received from our investment in Albertsons in 2023.

Investing Activities

Net cash used in investing activities is impacted by our investments in and advances to unconsolidated affiliates, the timing and extent of our real estate development, capital improvements, and acquisition and disposition activities during the period.

Our investing activities provided $46.7 million more cash for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023, primarily due to (i) $58.7 million more cash received form the disposition of properties in 2024, (ii) $22.8 million less cash used in our investments in and advances to unconsolidated affiliates, (iii) $7.6 million more cash received from the sale of marketable securities, and (iv) $6.0 million more received from the payment of a note receivable. These sources of cash were offset by (i) $33.4 million less cash received from return of capital of unconsolidated affiliates, (ii) $7.9 million more cash used to originate a note receivable, and (iii) $6.8 million more cash used for development, construction and property improvement costs.

Financing Activities

Net cash used in financing activities is impacted by the timing and extent of issuances of debt and equity securities, distributions paid to common shareholders and unitholders of the Operating Partnership, as well as principal and other payments associated with our outstanding indebtedness.

Our financing activities used $17.3 million less cash during the six months ended June 30, 2024 as compared to the six months ended June 30, 2023, primarily from (i) $142.1 million more cash provided by the sale of Common Shares, (ii) $13.7 million less cash distributed to noncontrolling interests, and (iii) $12.5 million more cash provided by contributions from noncontrolling interests. These increases were offset by (i) $142.6 million more cash used to repay debt, (ii) $6.8 million more used for payment of deferred financing fees, and (iii) $1.5 million more used to pay dividends.

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OFF-BALANCE SHEET ARRANGEMENTS

We have the following investments made through joint ventures (that may include, among others, tenancy-in common and other similar investments) for the purpose of investing in operating properties. We account for these investments using the equity method of accounting. As such, our financial statements reflect our investment and our share of income and loss from, but not the individual assets and liabilities, of these joint ventures.

See Note 4 in the Notes to Condensed Consolidated Financial Statements, for a discussion of our unconsolidated investments. The Operating Partnership’s pro-rata share of unconsolidated non-recourse debt related to those investments is as follows (dollars in millions):

|  | Operating Partnership |  |  | June 30, 2024
Investment |  | Ownership Percentage |  |  | Pro-rata Share of Mortgage Debt |  |  | Effective Interest Rate (a) |  |  | Maturity Date
Eden Square |  |  | 20.8 | % |  | $ | 4.9 |  |  |  | 7.60 | % |  | Sep 2024
Gotham Plaza |  |  | 49.0 | % |  |  | 8.4 |  |  |  | 9.33 | % |  | Sep 2024
Crossroads Shopping Center |  |  | 49.0 | % |  |  | 28.7 |  |  |  | 3.94 | % |  | Oct 2024
Tri-City Plaza(b) |  |  | 18.1 | % |  |  | 6.9 |  |  |  | 3.04 | % |  | Oct 2024
Frederick Crossing(b) |  |  | 18.1 | % |  |  | 4.2 |  |  |  | 3.27 | % |  | Dec 2024
Frederick County Square(b) |  |  | 18.1 | % |  |  | 4.5 |  |  |  | 5.67 | % |  | Jan 2025
650 Bald Hill Rd |  |  | 20.8 | % |  |  | 3.2 |  |  |  | 3.75 | % |  | Jun 2026
Renaissance Portfolio(c) |  |  | 20.0 | % |  |  | 30.4 |  |  |  | 7.15 | % |  | Nov 2026
840 N. Michigan |  |  | 91.9 | % |  |  | 44.7 |  |  |  | 6.50 | % |  | Dec 2026
3104 M Street(c) |  |  | 20.0 | % |  |  | 0.8 |  |  |  | 8.50 | % |  | Jan 2027
Wood Ridge Plaza |  |  | 18.1 | % |  |  | 6.5 |  |  |  | 7.27 | % |  | Mar 2027
La Frontera |  |  | 18.1 | % |  |  | 10.0 |  |  |  | 6.11 | % |  | Jun 2027
Riverdale FC |  |  | 18.0 | % |  |  | 6.9 |  |  |  | 7.27 | % |  | Nov 2027
Georgetown Portfolio |  |  | 50.0 | % |  |  | 7.1 |  |  |  | 4.72 | % |  | Dec 2027
Shoppes at South Hills(b) |  |  | 18.1 | % |  |  | 5.8 |  |  |  | 5.95 | % |  | Mar 2028
Mohawk Commons |  |  | 18.1 | % |  |  | 7.2 |  |  |  | 5.80 | % |  | Mar 2028
Total |  |  |  |  | $ | 180.2 |  |  |  |  |  |

(a)
Effective interest rates incorporate the effect of interest rate swaps and caps that were in effect as of June 30, 2024, where applicable.
(b)
The debt has one available 12-month extension option.
(c)
The debt has two available 12-month extension options.

CRITICAL ACCOUNTING POLICIES

Management’s discussion and analysis of financial condition and results of operations is based upon our condensed consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of condensed consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. We base our estimates on historical experience and assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We believe there have been no material changes to the items that we disclosed as our critical accounting policies under Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in our 2023 Annual Report on Form 10-K.

Recently Issued and Adopted Accounting Pronouncements

Reference is made to Note 1 in the Notes to Condensed Consolidated Financial Statements for information about recently issued accounting pronouncements.

ITEM 3. QUANTITATIVE AND QUALITAT IVE DISCLOSURES ABOUT MARKET RISK.

Information as of June 30, 2024

Our primary market risk exposure is to changes in interest rates related to our mortgage and other debt. See Note 7 in the Notes to Condensed Consolidated Financial Statements, for certain quantitative details related to our mortgage and other debt.

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Currently, we manage our exposure to fluctuations in interest rates primarily through the use of fixed-rate debt and interest rate swap and cap agreements. As of June 30, 2024, we had total mortgage and other notes payable of $1,707.7 million, excluding the unamortized premium of $0.2 million and net unamortized debt issuance costs of $12.1 million, of which $1,379.8 million, or 80.8% was fixed-rate, inclusive of debt with rates fixed through the use of derivative financial instruments, and $327.9 million, or 19.2%, was variable-rate based upon LIBOR, SOFR or Prime rates plus certain spreads. As of June 30, 2024, we were party to 36 interest rate swaps and four interest rate cap agreements to hedge our exposure to changes in interest rates with respect to $1,188.3 million and $151.2 million of variable-rate debt, respectively. For a discussion of the risks associated with the discontinuation of LIBOR, see Item 1A. “Risk Factors—Risks Related to Our Liquidity and Indebtedness on our Annual Report on Form 10-K for the year ended December 31, 2023 — If we decided to employ higher leverage levels, we would be subject to increased debt service requirements and a higher risk of default on our debt obligations, which could adversely affect our financial conditions, cash flows and ability to make distributions to our shareholders. In addition, increases or changes in interest rates could cause our borrowing costs to rise and may limit our ability to refinance debt.”

The following table sets forth information as of June 30, 2024 concerning our long-term debt obligations, including principal cash flows by scheduled maturity (without regard to available extension options) and weighted average effective interest rates of maturing amounts (dollars in millions):

Core Consolidated Mortgage and Other Debt

Year |  | Scheduled Amortization |  |  | Maturities |  |  | Total |  |  | Weighted Average Interest Rate |
2024 (Remainder) |  | $ | 0.9 |  |  | $ | — |  |  | $ | 0.9 |  |  |  | — | %
2025 |  |  | 2.0 |  |  |  | — |  |  |  | 2.0 |  |  |  | — | %
2026 |  |  | 4.9 |  |  |  | — |  |  |  | 4.9 |  |  |  | — | %
2027 |  |  | 4.8 |  |  |  | 200.1 |  |  |  | 204.9 |  |  |  | 4.6 | %
2028 |  |  | 1.8 |  |  |  | 616.8 |  |  |  | 618.6 |  |  |  | 4.4 | %
Thereafter |  |  | 2.5 |  |  |  | 93.7 |  |  |  | 96.2 |  |  |  | 5.5 | %
|  | $ | 16.9 |  |  | $ | 910.6 |  |  | $ | 927.5 |  |  |  |

Fund Consolidated Mortgage and Other Debt

Year |  | Scheduled Amortization |  |  | Maturities |  |  | Total |  |  | Weighted Average Interest Rate |
2024 (Remainder) |  | $ | 1.9 |  |  | $ | 211.8 |  |  | $ | 213.7 |  |  |  | 4.2 | %
2025 |  |  | 1.2 |  |  |  | 409.7 |  |  |  | 410.9 |  |  |  | 7.3 | %
2026 |  |  | 0.4 |  |  |  | 51.7 |  |  |  | 52.1 |  |  |  | 6.5 | %
2027 |  |  | 0.5 |  |  |  | 43.4 |  |  |  | 43.9 |  |  |  | 8.2 | %
2028 |  |  | 0.2 |  |  |  | 59.4 |  |  |  | 59.6 |  |  |  | 6.0 | %
Thereafter |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — | %
|  | $ | 4.2 |  |  | $ | 776.0 |  |  | $ | 780.2 |  |  |  |

Mortgage Debt in Unconsolidated Partnerships (at our Pro-Rata Share)

Year |  | Scheduled Amortization |  |  | Maturities |  |  | Total |  |  | Weighted Average Interest Rate |
2024 (Remainder) |  | $ | 6.7 |  |  | $ | 52.9 |  |  | $ | 59.6 |  |  |  | 5.0 | %
2025 |  |  | 6.0 |  |  |  | 4.5 |  |  |  | 10.5 |  |  |  | 5.7 | %
2026 |  |  | 6.1 |  |  |  | 60.9 |  |  |  | 67.0 |  |  |  | 6.7 | %
2027 |  |  | 0.7 |  |  |  | 30.0 |  |  |  | 30.7 |  |  |  | 6.4 | %
2028 |  |  | — |  |  |  | 12.4 |  |  |  | 12.4 |  |  |  | 5.9 | %
Thereafter |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — | %
|  | $ | 19.5 |  |  | $ | 160.7 |  |  | $ | 180.2 |  |  |  |

Without regard to available extension options, in the remainder of 2024, $214.6 million of our total consolidated debt and $59.6 million of our pro-rata share of unconsolidated outstanding debt will become due. In addition, $412.9 million of our total consolidated debt and $10.5 million of our pro-rata share of unconsolidated debt will become due in 2025. As it relates to the aforementioned maturing debt in 2024 and 2025, we

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have options to extend consolidated debt aggregating $40.0 million and $327.3 million, respectively; however, there can be no assurance that the Company will be able successfully execute any or all of its available extension options. As we intend on refinancing some or all of such debt at the then-existing market interest rates, which may be greater than the current interest rates, our interest expense would increase by approximately $6.9 million annually if the interest rate on the refinanced debt increased by 100 basis points. After giving effect to noncontrolling interests, our share of this increase would be $2.4 million. Interest expense on our variable-rate debt of $327.9 million, net of variable to fixed-rate swap agreements currently in effect, as of June 30, 2024, would increase $3.3 million if corresponding rate indices increased by 100 basis points. After giving effect to noncontrolling interests, our share of this increase would be $1.0 million. We may seek additional variable-rate financing if and when pricing and other commercial and financial terms warrant. As such, we would consider hedging against the interest rate risk related to such additional variable-rate debt through interest rate swaps and protection agreements, or other means.

Based on our outstanding debt balances as of June 30, 2024, the fair value of our total consolidated outstanding debt would decrease by approximately $7.1 million if interest rates increased by 1%. Conversely, if interest rates decreased by 1%, the fair value of our total outstanding debt would increase by approximately $6.6 million.

As of June 30, 2024, and December 31, 2023, we had consolidated notes receivable of $126.7 million and $124.9 million, respectively. We determined the estimated fair value of our notes receivable by discounting future cash receipts utilizing a discount rate equivalent to the rate at which similar notes receivable would be originated under conditions then existing.

Based on our outstanding notes receivable balances as of June 30, 2024, the fair value of our total outstanding notes receivable would decrease by approximately $0.7 million if interest rates increased by 1%. Conversely, if interest rates decreased by 1%, the fair value of our total outstanding notes receivable would increase by approximately $0.7 million.

Summarized Information as of December 31, 2023

As of December 31, 2023, we had total mortgage and other notes payable of $1,881.1 million, excluding the unamortized premium of $0.2 million and unamortized debt issuance costs of $11.2 million, of which $1,454.7 million, or 77.3%, was fixed-rate, inclusive of debt with rates fixed through the use of derivative financial instruments, and $426.4 million, or 22.7%, was variable-rate based upon LIBOR rates plus certain spreads. As of December 31, 2023, we were party to 36 interest rate swap and three interest rate cap agreements to hedge our exposure to changes in interest rates with respect to $1,249.8 million and $151.4 million of LIBOR or SOFR-based variable-rate debt, respectively.

Interest expense on our variable-rate debt of $426.4 million as of December 31, 2023, would have increased $4.3 million if corresponding rate indices increased by 100 basis points. Based on our outstanding debt balances as of December 31, 2023, the fair value of our total outstanding debt would have decreased by approximately $6.9 million if interest rates increased by 1%. Conversely, if interest rates decreased by 1%, the fair value of our total outstanding debt would have increased by approximately $6.6 million.

Changes in Market Risk Exposures from December 31, 2023 to June 30, 2024

Our interest rate risk exposure from December 31, 2023, to June 30, 2024, has decreased on an absolute basis, as the $426.4 million of variable-rate debt as of December 31, 2023 has decreased to $327.9 million as of June 30, 2024. As a percentage of our overall debt, our interest rate exposure has decreased as our variable-rate debt accounted for 22.7% of our consolidated debt as of December 31, 2023 compared to 19.2% as of June 30, 2024.

ITEM 4. CONTROLS AND PROCEDURES.

Disclosure Controls and Procedures

Our disclosure controls and procedures include internal controls and other procedures designed to provide reasonable assurance that information required to be disclosed in this and other reports filed under the Exchange Act, is recorded, processed, summarized, and reported within the required time periods specified in the SEC’s rules and forms; and that such information is accumulated and communicated to management, including our chief executive officer and chief financial officer, to allow timely decisions regarding required disclosures. It should be noted that no system of controls can provide complete assurance of achieving a company’s objectives and that future events may impact the effectiveness of a system of controls. Our chief executive officer and chief financial officer, after conducting an evaluation, together with members of our management, of the effectiveness of the design and operation of our disclosure controls and procedures as of June 30, 2024, have concluded that our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) were effective as of June 30, 2024, at a reasonable level of assurance.

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

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PART II – OTH ER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

From time to time, we are a party to various legal proceedings, claims or regulatory inquiries and investigations arising out of, or incident to, our ordinary course of business. While we are unable to predict with certainty the outcome of any particular matter, management does not expect, when such matters are resolved, that our resulting exposure to loss contingencies, if any, will have a material adverse effect on our consolidated financial position.

ITEM 1A. RIS K FACTORS.

Except to the extent additional factual information disclosed elsewhere in this Report relates to such risk factors (including, without limitation, the matters discussed in Part I, “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations”), there were no material changes to the risk factors disclosed in Part I, “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2023.

ITEM 2. UNREGISTERED SALES OF EQUI TY SECURITIES AND USE OF PROCEEDS.

Not applicable.

ITEM 3. DEFAULTS UPO N SENIOR SECURITIES.

Not applicable.

ITEM 4. MINE SAFE TY DISCLOSURES.

Not appl icable.

ITEM 5. OTHER INFORMATION.

Trading Arrangements

During the three months ended June 30, 2024, none of our officers or trustees (as defined in Rule 16a-1(f) of the Exchange Act) adopted, terminated, or modified any contract, instruction or written plan for the purchase or sale of our securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any non-Rule 10b5-1 trading arrangement (as defined in Item 408 of Regulation S-K).

ITEM 6. E XHIBITS.

The following is an index to all exhibits including (i) those filed with this Quarterly Report on Form 10-Q and (ii) those incorporated by reference herein:

Exhibit No. |  | Description |  | Method of Filing
10.1 |  | Third Amended and Restated Credit Agreement, dated April 15, 2024, by and among Acadia Realty Limited Partnership, Acadia Realty Trust, Bank of America, N.A., as administrative agent, Wells Fargo Bank, National Association, Truist Bank, and PNC Bank, National Association, as syndication agents, BofA Securities, Inc. and Wells Fargo Securities, LLC, as joint bookrunners, and BofA Securities, Inc., Wells Fargo Securities, LLC, Truist Securities, Inc. and PNC Capital Markets LLC, as joint lead arrangers, and the lenders and letter of credit issuers party thereto. |  | Incorporated by reference to the Company’s Current Report on Form 8-K filed on April 16, 2024
10.2*† |  | Form of Long-Term Incentive Plan Award Agreement (Time- and Performance- Based) (SVP/EVP) |  | Filed herewith

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31.1 |  | Certification of Chief Executive Officer pursuant to rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |  | Filed herewith
31.2 |  | Certification of Chief Financial Officer pursuant to rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |  | Filed herewith
32.1 |  | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |  | Furnished herewith
32.2 |  | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |  | Furnished herewith
101.INS |  | XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |  | Filed herewith
101.SCH |  | Inline XBRL Taxonomy Extension Schema Document |  | Filed herewith
101.CAL |  | Inline XBRL Taxonomy Extension Calculation Document |  | Filed herewith
101.DEF |  | Inline XBRL Taxonomy Extension Definitions Document |  | Filed herewith
101.LAB |  | Inline XBRL Taxonomy Extension Labels Document |  | Filed herewith
101.PRE |  | Inline XBRL Taxonomy Extension Presentation Document |  | Filed herewith
104 |  | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) |  | Filed herewith

* Management contract or compensation plan or arrangement.

† This document was previously filed as Exhibit 10.2 to our Quarterly Report on Form 10-Q for the quarter ended March 30, 2024, filed with the SEC on April 30, 2024, and has been amended to correct a scrivener’s error.

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SIGNA TURES

Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereto duly authorized.

|  | ACADIA REALTY TRUST
|  | (Registrant)
By: |  | /s/ Kenneth F. Bernstein
|  | Kenneth F. Bernstein
|  | Chief Executive Officer,
|  | President and Trustee
By: |  | /s/ John Gottfried
|  | John Gottfried
|  | Executive Vice President and
|  | Chief Financial Officer
By: |  | /s/ Richard Hartmann
|  | Richard Hartmann
|  | Senior Vice President and
|  | Chief Accounting Officer

Dated: July 31, 2024

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