Acadia Realty Trust (NYSE:AKR) has entered into an agreement with several financial institutions for an underwritten public offering of up to 5,000,000 common shares, with an additional option for underwriters to purchase up to 750,000 extra shares. The real estate investment trust (REIT) disclosed this move in a recent SEC filing, detailing the transaction set to take place on the New York Stock Exchange.
The Maryland-based company, which operates as a REIT specializing in the ownership, acquisition, development, and management of retail properties, has made this offering through underwriters Wells Fargo Securities, LLC, Goldman Sachs & Co. LLC, and Jefferies LLC. These firms will also act as forward sellers and purchasers in connection with the forward sale agreements.
Acadia Realty Trust will not receive immediate proceeds from the sale of shares by the forward sellers. Instead, the REIT has entered into separate forward sale agreements with Wells Fargo Bank, National Association, Goldman Sachs & Co. LLC, and Jefferies LLC, which will involve the borrowing and sale of shares to the underwriters. These agreements anticipate settlement by September 30, 2025, with the option for the REIT to settle in cash or shares.
The initial forward sale price is set at $22.89 per share, which could bring net proceeds of approximately $114.0 million, or up to $131.2 million if the underwriters' option is fully exercised. These figures are after deducting underwriting discounts, fees, and estimated expenses.
The final proceeds will be used for general corporate purposes, including potential investment transactions, working capital, and repaying indebtedness. In the interim, the proceeds are expected to be invested in short-term instruments.
In other recent news, Acadia Realty Trust has experienced significant financial developments. The real estate investment trust has announced an upsized underwritten offering of 5 million common shares, initially set at 4.5 million shares, priced at $23.25 each. The offering is expected to close with customary conditions, and underwriters have an option to buy up to an additional 750,000 shares. Acadia has also entered forward sale agreements with Wells Fargo Bank, Goldman Sachs & Co. LLC, and Jefferies concerning these shares.
Furthermore, Acadia Realty Trust has expanded its revolving credit facility from $350 million to $525 million, providing additional capital for future investments and operational needs. This move was accompanied by the full repayment of a $175 million term loan. The company reported a robust second quarter, leading to an increase in their full-year earnings guidance and quarterly dividend. The growth was primarily driven by its street retail portfolio and the success of properties like City Point.
InvestingPro Insights
Acadia Realty Trust's recent public offering comes at a time when the company is experiencing significant market momentum. According to InvestingPro data, AKR has seen a remarkable 72.18% price total return over the past year, with a strong 44.83% return in just the last six months. This positive trend is further supported by the stock trading near its 52-week high, at 96.82% of that peak.
The company's decision to raise capital through this offering aligns with its strong financial position. InvestingPro Tips highlight that AKR has maintained dividend payments for 26 consecutive years, demonstrating a commitment to shareholder returns. Additionally, the company's liquid assets exceed short-term obligations, suggesting a solid financial foundation for future investments.
While the offering may dilute existing shareholders, it's worth noting that analysts predict the company will be profitable this year, and AKR has been profitable over the last twelve months. This positive outlook, combined with the company's 16.91% revenue growth in the last twelve months, indicates potential for continued expansion and value creation.
For investors seeking more comprehensive analysis, InvestingPro offers 10 additional tips for AKR, providing deeper insights into the company's financial health and market position.
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