RYE, N.Y. - Acadia Realty Trust (NYSE: NYSE:AKR), a real estate investment trust, announced the pricing of an upsized underwritten offering of 5 million common shares at $23.25 each. The offering, initially set at 4.5 million shares, is expected to close on October 2, 2024, with customary closing conditions. The underwriters have a 30-day option to buy up to an additional 750,000 shares.
The company has also entered into forward sale agreements with Wells Fargo Bank, Goldman Sachs & Co. LLC, and Jefferies or their affiliates concerning the 5 million shares. These entities will likely borrow and sell the shares to underwriters. Acadia may settle these agreements with cash or shares by September 30, 2025, based on the forward sale price, subject to adjustments.
Acadia will not receive immediate proceeds from the sale of shares by the forward purchasers. Future proceeds from settling the forward sale agreements are intended for general corporate purposes, such as funding investments, working capital, and repaying debt. Until such use, the net proceeds are expected to be invested in short-term instruments.
The offering is part of a shelf registration statement filed with the SEC and is available through prospectus supplements and the accompanying base prospectus. Wells Fargo Securities, Goldman Sachs & Co. LLC, and Jefferies are acting as joint book-running managers for the offering.
This announcement is not an offer to sell or a solicitation for an offer to buy any securities of Acadia Realty Trust. The sale of these securities will not be legal in any state or jurisdiction where such an offer, solicitation, or sale would be unlawful before registration or qualification under the securities laws of any such state or jurisdiction.
Acadia Realty Trust specializes in owning and operating a core real estate portfolio of street and open-air retail properties in prime retail corridors, along with an investment management platform. The company uses its website and LinkedIn profile for investor communications and complies with Regulation FD through online postings.
The press release includes forward-looking statements subject to risks, uncertainties, and other factors that could cause actual results to differ materially from those anticipated. This information is based on a press release statement.
In other recent news, Acadia Realty Trust has experienced significant financial developments. 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. The company's leasing strategy has resulted in consistent sales growth and positive mark-to-market spreads.
Furthermore, Acadia Realty Trust has expanded its revolving credit facility from $350 million to $525 million. This move provides additional capital for future investments and operational needs and was accompanied by the full repayment of a $175 million term loan.
The company also announced the commencement of an underwritten public offering of 4.5 million common shares, part of a forward sale agreement involving Wells Fargo Bank, National Association, Goldman Sachs & Co. LLC, and Jefferies. Acadia aims to use any future proceeds from the forward sale agreements for general corporate purposes, including investment transactions, working capital, and repayment of debt. These recent developments reflect Acadia's commitment to maintaining a strong balance sheet and ensuring access to necessary capital resources.
InvestingPro Insights
Acadia Realty Trust's recent upsized offering of 5 million common shares at $23.25 each aligns with several key metrics and trends highlighted by InvestingPro data. The company's stock has shown remarkable strength, with a 70.32% price total return over the past year and a 41.86% return in the last six months. This performance is reflected in an InvestingPro Tip noting that AKR is "Trading near 52-week high," with the current price at 99.66% of its 52-week high.
The offering price of $23.25 is close to the fair value of $23 USD based on analyst targets, as reported by InvestingPro. However, investors should note that the stock is trading at a high earnings multiple, with a P/E Ratio (Adjusted) of 1686.61 for the last twelve months as of Q2 2024. This valuation metric suggests that the market has high growth expectations for Acadia Realty Trust.
One positive aspect for income-focused investors is that Acadia has maintained dividend payments for 26 consecutive years, according to an InvestingPro Tip. The current dividend yield stands at 3.24%, with a dividend growth of 5.56% over the last twelve months. This consistent dividend history may provide some reassurance to investors considering the new share offering.
For those interested in a more comprehensive analysis, InvestingPro offers 11 additional tips for Acadia Realty Trust, providing a deeper understanding of the company's financial position and market performance.
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