Niche Plays to Acadia Realty Trust’s Advantage, According to CEO
07/09/2014 | by Allen Kenney

Ken Bernstein, president and CEO of Acadia Realty Trust (NYSE: AKR), joined REIT.com for a CEO Spotlight video interview during REITWeek 2014: NAREIT’s Investor Forum, held in New York.

Acadia Realty has closed on five acquisitions in 2014 and has more in its pipeline. Bernstein acknowledged that the marketplace is “competitive.” The company’s niche focus on “dense, high street retail” in the East Coast and Chicago has played to its advantage, according to Bernstein.

Currently, Acadia Realty is looking for assets valued between $20 million and $100 million in markets where the firm is already active.

“While there’s plenty of competition and we need to be disciplined, we can add 10, 20, 30 percent to our portfolio in the normal course of business, and we can do it accretively,” Bernstein said.

Bernstein was asked about the steps being taken to fund Acadia Realty’s acquisitions and keep its leverage in check. Bernstein noted that the company has long maintained an emphasis on a solid balance sheet, and it is dedicated to using match funding and acquiring assets on a leverage-neutral basis. The firm is tapping the equity markets to raise the capital to buy new properties, Bernstein said.

“We think that’s a responsible way to fuel growth, rather than taking on additional leverage,” he added.

Finally, Bernstein addressed the company’s fund platform. Acadia Realty acts as the general partner in a series of funds that invest opportunistically in a broad spectrum of assets. Those include “next-generation retail,” emerging retail markets that hold some appeal to the firm’s current tenants, according to Bernstein. As an example, he cited an acquisition in Savannah, Ga.

Under the structure of the funds, Acadia Realty can not only co-invest its own capital, but also collect incentive payments, Bernstein noted.

“We spend a fair amount of time looking opportunistically,” Bernstein said.