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    2019 ANNUAL REPORT MELROSE COLLECTION, LOS ANGELES, CA


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    Dear Fellow Shareholders: Most importantly, I hope this letter finds you and your loved ones well. As I write this letter: — The World Health Organization has declared coronavirus a global pandemic. — The virus has now reached all 50 states. — New York State is on “PAUSE,” with schools closed, Broadway theaters dark, and all non-essential gatherings of individuals of any size banned. — All residents of the state of California have been ordered to “stay at home.” — The Federal Reserve has slashed interest rates to zero. — Above all, the outlook remains unclear. In fact, the situation is rapidly evolving from one breaking news alert to the next. What does this mean for our retailers? At this point, there are more questions than answers: — Will coronavirus accelerate the separation of the “haves” and “have nots” among retailers? Probably. — Will retailers pause their expansion plans? A few days in, retailers are still pushing new deals forward but will likely hold off on making binding commitments until the outlook is more certain. — What will the impact be on grocery sales? Up. — Will toilet paper be restocked? Yes! We have plenty to be concerned about, but not this. As scary as this shock has been to our economy and our wellbeing, we will get through it. And, it is not too early to begin thinking about what retailing will look like at that time. Prior to this crisis, there were legitimate questions about the role of physical real estate in the retailing industry. Thankfully, during 2019, we were pleased to see some of these questions answered in the affirmative by: 1. Traditional retailers executing a multichannel strategy. Target, for example, continues to invest in its existing fleet and add new stores, both full-size and smaller. Target’s new stores are closer to home and are providing shoppers with the convenience of multiple fulfillment options. That is, buy online, ship to home; buy online, pickup in-store (“BOPIS”); or, just shop. Importantly, when Target can shift an online order from home delivery to in-store pickup, the retailer can eliminate 90% of the incremental cost! Thus, for those retailers focused on profitability (it should be all!), the store is the future and a key strategic advantage. 2. Traditional in-store-only retailers. T.J.Maxx, Ross Dress for Less and Trader Joe’s continue to thrive with limited e-commerce initiatives – another win for physical real estate. 3. Young, digitally-native brands. Many digitally-native retailers have come to understand the high cost of acquiring, and retaining, an online customer. Accordingly, many of these brands are now incorporating physical real estate into their growth plans and successfully opening mission-critical stores. To be clear: — These brands will occupy a fraction of the square footage of our legacy retailers. — They will not solve the reality that the U.S. is overretailed. — But, they do know how to energize a shopping corridor. — And, they know that a store is their best pathway to profitability. What does all this mean for Acadia? Although we didn’t anticipate this global pandemic, we knew that we were in the tenth year of economic growth; as such, we started preparing for an inevitable slowdown. As early as a few years ago: — We made sure we remained financially sound. A healthy balance sheet is a way of life for us. — We continued to add high-quality real estate in key gateway markets to our core portfolio. From one economic cycle to the next, we need to keep our company relevant to our retailers over the next 1, 5, 10, 20 years.


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    — At a time when we could achieve historically-wide spreads between borrowing costs and acquisition cap rates, we pivoted away from new and riskier developments in favor of stable cash flow in our fund platform. At the end of the day, our goal is to protect and grow shareholder value and to deliver attractive risk- adjusted returns over any extended period. We are up to the task. 1. Balance sheet strength matters, again While many things have changed over the past several days, our balance sheet strength has not. — Our business model was never built on the use of significant leverage. With a debt to EBITDA ratio of 6.3x and a fixed-charge coverage ratio of 3.4x for the twelve months ended December 31, 2019, the portfolio (comprised of the core and pro rata share of our opportunity funds) is “refinanceable,” should the need arise. That said, — We don’t have any significant impending core debt maturities. — We have limited capital needs associated with development activities. Our core projects are nearing completion, and our limited fund pipeline is already pre-funded with the capital commitments on call. 2. Continuing to curate our core portfolio While it’s still too early to quantify the short-term impact of coronavirus on our core portfolio, we believe that the mission-critical locations that dominate our portfolio will remain valuable in the long term. Furthermore, considering other market forces at work, including: — the continued growth of e-commerce, — an oversupply of retail properties in the U.S., and — a further separation between the “haves” and “have nots” among retailers, we still believe our shift, over the past several years, to densely-populated, high barrier-to-entry markets will be the best way to create long-term shareholder value in our core portfolio. After nearly a decade of thoughtful growth, more than 70% of our core portfolio is now comprised of urban and street retail in New York, San Francisco, Chicago, Boston and Washington DC. The balance is comprised of suburban shopping centers with a necessity or discounter focus. Top tenants at our properties include several retailers providing essential goods to their communities, including Target (#1 in our tenant list), Walgreens (#2), Stop & Shop (#4), and Trader Joe’s (#10). Particularly during these turbulent times, we thank them for their service to our families and neighbors. Although coronavirus is top of mind, I want to highlight some important leasing progress that our team made last year in several of our key properties and corridors: First, at City Center, a 250k-sf Target-anchored property, in San Francisco, CA, you may recall that we recaptured a 55k-sf Best Buy in 2018 and executed a lease with Whole Foods for the entire space in January 2019. We still have to go through an important local approval process before the tenant will be cleared to proceed but, assuming we are successful, both the community and the property are sure to benefit from this addition. — Did you know — at times, there is a line to park your car and shop at the Trader Joe’s across the street? This neighborhood needs another good grocery store (especially now)! Next, what started with Warby Parker and Bonobos on Armitage Ave in Lincoln Park, Chicago, IL, has become a cluster of digitally-native brands, including Serena & Lily, allbirds, and Outdoor Voices. Including three buildings acquired during 2019, we now own 12 buildings on this three-block corridor. As a result of our concentrated ownership, we have been able to successfully curate the merchandise mix to create a vibrant shopping experience. In fact, during 2019, we executed leases with two more young


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    brands –Parachute and Lively. We even have a waiting list. When a submarket is supply constrained and retailers can successfully operate, rents can grow – as they have on Armitage Ave. This is just one example of Acadia’s clustering and curation strategy. Another is Rush St & Walton St in the Gold Coast, Chicago, IL. During 2019, we executed a lease with Reformation on Walton St. We also successfully recaptured the Marc Jacobs beneath the Waldorf-Astoria and have already pre-leased approximately half the space to a luxury womenswear designer. On the acquisitions front, last year, we added approximately $190 million of core assets consistent with our long-term vision. In addition to the Armitage Ave properties previously discussed, this includes: — A six-property Greene St portfolio and 565 Broadway, in Soho, New York, NY. Soho has certainly been a rollercoaster ride, but (prior to the coronavirus outbreak) we were beginning to see green shoots. — A portfolio of five contiguous buildings on Melrose Pl in Los Angeles, CA. Pedestrian-friendly Melrose Pl, which boasts strong retailer sales volumes, is a natural extension of our street-retail strategy. 3. A contrarian play in our fund platform Turning to our fund platform, our funds have been pursuing a barbell strategy, acquiring both: ⎯ High-yield or other opportunistic investments; and ⎯ High-quality, value-add properties. Although we didn’t think things would take such a dramatic turn, a few years ago, we pivoted away from taking on new, somewhat riskier development projects in favor of acquiring more stable (but out-of-favor) shopping centers. During 2019, we completed approximately $320 million of acquisitions. Over the past few years, we’ve successfully aggregated an approximately $650 million portfolio of open-air suburban shopping centers on behalf of Fund V. We’ve done so at an unleveraged yield of approximately 8% (and at a substantial discount to replacement cost). With two-thirds leverage, at a blended interest rate of 3.7%, we are currently clipping a mid-teens yield on our invested equity. This 14-property portfolio has strong geographic diversity. Based on invested equity, 39% is in the Northeast, 26% is in the South, and 12% is in the Midwest. These are primarily non supermarket- anchored properties and top tenants include the TJX companies, Ross Dress for Less, Best Buy and Walmart. As previously discussed, cash flow stability is key to our strategy. To that point, we are pleased to report that these carefully-selected assets continue to perform consistent with our underwritten expectations. While these shopping centers remain out of favor for now, we believe that institutional capital will return driven by a demand for yield. In the meantime, we are enjoying the coupon. To date, we have allocated approximately 60% of Fund V’s capital commitments. This leaves us with approximately $600 million of dry powder, on a leveraged basis, available to deploy through the summer of 2021. Turning to existing investments, strong leasing velocity continues at City Point, our urban retail property in downtown Brooklyn. During 2019, we executed leases for more than 60k sf of space and, looking ahead, we have a healthy pipeline. Our 2019 activity included: — An expansion of Alamo Drafthouse, which is already one of the most-productive movie theaters per screen in the country. Alamo leased another 25k sf at City Point, which will enable it to respond to strong demand from moviegoers by doubling its screen count and adding a second kitchen. — During 2019, we also executed an 18k-sf lease with NYU Dental on the fourth and fifth floors. — And, on the ground floor, we were pleased to welcome Camp, a family experience store, and Casper, both now open.


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    Since year end: — McNally Jackson, a long-standing, NYC-based independent bookstore, opened on City Point’s Prince St Passage, and — lululemon executed a lease for a 4k-sf shop. Overall, as it relates to this final lease-up, we have remained patient and selective, focused on merchandise mix and retailers’ ability to deliver strong sales volume at this successful project. After all, our concourse level is already delivering sales of approximately $100 million per year. 4. In conclusion… 2020 has brought with it a unique and unprecedented set of challenges for our economy and the real estate industry. And, we are still in the early innings of this crisis. I recognize that discussing last year’s trends and progress does little to explain the uncertainty and impact that our country and our industry is facing as a result of coronavirus. There is no doubt that several, if not all, of our retailers will face a severe shock. Hopefully, the longer-term impact will be much less severe. Nevertheless, we believe that we have built our company to withstand the unexpected. — We have a strong balance sheet. — We have a well-located and well-leased core portfolio. — And, we have an opportunistic fund platform that is disconnected from the public markets. Looking ahead, our healthy balance sheet and access to growth capital keeps us well-positioned to capitalize on new opportunities as they emerge. Most importantly, our team and our Board is cycle tested and prepared to handle volatility and recessions. This is going to take time, patience, capital, and persistence. It won’t be easy, and not everyone will be successful. Thankfully, given our strong portfolio, our access to capital, and our expertise, we are confident that we will weather this storm. Kenneth F. Bernstein President & CEO March 23, 2020


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    UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2019 ☐ 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 1-12002 ACADIA REALTY TRUST (Exact name of registrant in its charter) Maryland 23-2715194 (State or Other Jurisdiction of Incorporation or (I.R.S. Employer Identification No.) Organization) 411 Theodore Fremd Avenue, Suite 300 Rye, NY 10580 (Address of principal executive offices) (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 AKR The New York Stock Exchange value $0.001 per share Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES ☒ NO ☐ Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. YES ☐ NO ☒ 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 ☒ The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant as of the last business day of the registrant’s most recently completed second fiscal quarter was approximately $2,311.5 million, based on a price of $27.37 per share, the average sales price for the registrant’s common shares of beneficial interest on the New York Stock Exchange on that date. The number of shares of the registrant’s common shares of beneficial interest outstanding on February 12, 2020 was 82,127,330. DOCUMENTS INCORPORATED BY REFERENCE Part III – Portions of the registrant’s definitive proxy statement relating to its 2020 Annual Meeting of Shareholders presently scheduled to be held May 7, 2020 to be filed pursuant to Regulation 14A. ACADIA REALTY TRUST AND SUBSIDIARIES


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    FORM 10-K INDEX Item No. Description Page PART I 1. Business 4 1A. Risk Factors 7 1B. Unresolved Staff Comments 21 2. Properties 21 3. Legal Proceedings 32 4. Mine Safety Disclosures 33 PART II 5. Market for Registrant’s Common Equity, Related Stockholder Matters, Issuer Purchases of Equity Securities and Performance Graph 34 6. Selected Financial Data 36 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 37 7A. Quantitative and Qualitative Disclosures about Market Risk 49 8. Financial Statements and Supplementary Data 52 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 113 9A. Controls and Procedures 113 9B. Other Information 114 PART III 10. Directors, Executive Officers and Corporate Governance 115 11. Executive Compensation 115 12. Security Ownership of Certain Beneficial Owners and Management 115 13. Certain Relationships and Related Transactions and Director Independence 115 14. Principal Accounting Fees and Services 115 PART IV 15. Exhibits and Financial Statement Schedules 116 16. Form 10-K Summary 119 SIGNATURES 120 2


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    SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS Certain statements contained in this Annual Report on Form 10-K (the “Report”) may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), and as such may involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements, which are based on certain assumptions and describe our future plans, strategies and expectations are generally identifiable by use of the words “may,” “will,” “should,” “expect,” “anticipate,” “estimate,” “believe,” “intend” or “project” or the negative thereof or other variations thereon or comparable terminology. Factors which could have a material adverse effect on our operations and future prospects include, but are not limited to those set forth under the headings “Item 1A. Risk Factors” and “Item 7. 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. SPECIAL NOTE REGARDING CERTAIN REFERENCES All references to “Notes” throughout the document refer to the footnotes to the consolidated financial statements of the registrant referenced in Part II, Item 8. Financial Statements. 3


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    PART I ITEM.1. BUSINESS. GENERAL Acadia Realty Trust (the “Trust”) was formed on March 4, 1993 as a Maryland real estate investment trust (“REIT”). All references to “Acadia,” “we,” “us,” “our” and “Company” refer to the Trust and its consolidated subsidiaries. We are a fully integrated REIT focused on the ownership, acquisition, development and management of high-quality retail properties located primarily in high-barrier-to-entry, supply- constrained, densely-populated metropolitan areas in the United States. We currently own or have an ownership interest in these properties through our Core Portfolio (as defined below). We generate additional growth through our Funds (as defined below) in which we co-invest with high-quality institutional investors. All of our assets are held by, and all of our operations are conducted through, Acadia Realty Limited Partnership (the “Operating Partnership”) and entities in which the Operating Partnership owns an interest. As of December 31, 2019, the Trust controlled 95% of the Operating Partnership as the sole general partner. As the general partner, the Trust 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,” respectively, and collectively, “OP Units”) and employees who have been awarded restricted Common OP Units as long-term incentive compensation (“LTIP Units”). Limited partners holding Common OP and LTIP Units are generally entitled to exchange their units on a one-for-one basis for our common shares of beneficial interest of the Trust (“Common Shares”). This structure is referred to as an umbrella partnership REIT, or “UPREIT.” BUSINESS OBJECTIVES AND STRATEGIES Our primary business objective is to acquire and manage commercial retail properties that will provide cash for distributions to shareholders while also creating the potential for capital appreciation to enhance investor returns. We focus on the following fundamentals to achieve this objective: • Own and operate a portfolio of high-quality retail properties located primarily in high-barrier-to-entry, densely-populated metropolitan areas (“Core Portfolio”). Our goal is to create value through accretive development and re-tenanting activities within our existing portfolio and grow this platform through the acquisition of high-quality assets that have the long-term potential to outperform the asset class. • Generate additional growth through our Funds (as defined below) in which we co-invest with high-quality institutional investors. Our Fund strategy focuses on opportunistic yet disciplined acquisitions with high inherent opportunity for the creation of additional value, execution on this opportunity and the realization of value through the sale of these assets. In connection with this strategy, we focus on: o value-add investments in street retail properties, located in established and “next-generation” submarkets, with re-tenanting or repositioning opportunities, o opportunistic acquisitions of well-located real estate anchored by distressed retailers, and o other opportunistic acquisitions, which vary based on market conditions and may include high-yield acquisitions and purchases of distressed debt. Some of these investments historically have also included, and may in the future include, joint ventures with private equity investors for the purpose of making investments in operating retailers with significant embedded value in their real estate assets. • Maintain a strong and flexible balance sheet through conservative financial practices while ensuring access to sufficient capital to fund future growth. Investment Strategy — Generate External Growth through our Dual Platforms; Core Portfolio and Funds The requirements that acquisitions be accretive on a long-term basis based on our cost of capital, as well as increase the overall Core Portfolio quality and value, are key strategic considerations to the growth of our Core Portfolio. As such, we constantly evaluate the blended cost of equity and debt and adjust the amount of acquisition activity to align the level of investment activity with capital flows. Given the growing importance of technology and e-commerce, many of our retail tenants are appropriately focused on omni-channel sales and how to best utilize e-commerce initiatives to drive sales at their stores. In light of these initiatives, we have found retailers are becoming more selective as to the location, size and format of their next-generation stores and are focused on dense, high-traffic retail corridors, where they can 4


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    utilize smaller and more productive formats closer to their shopping population. Accordingly, our focus for Core Portfolio and Fund acquisitions is on those properties which we believe will not only remain relevant to our tenants, but become even more so in the future. In addition to our Core Portfolio investments in real estate assets, we have also capitalized on our expertise in the acquisition, development, leasing and management of retail real estate by establishing discretionary opportunity funds. Our Fund platform is an investment vehicle where the Operating Partnership invests, along with outside institutional investors, including, but not limited to, endowments, foundations, pension funds and investment management companies, in primarily opportunistic and value-add retail real estate. To date, we have launched five funds (“Funds”); Acadia Strategic Opportunity Fund, LP (“Fund I,” which was liquidated in 2015), 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 our “current fund”). Due to our level of control, we consolidate these Funds for financial reporting purposes. Fund I and Fund II have also included investments in operating companies through Acadia Mervyn Investors I, LLC (“Mervyns I”, which was liquidated in 2018), Acadia Mervyn Investors II, LLC (“Mervyns II”) and, in certain instances, directly through Fund II, all on a non-recourse basis. These investments comprise, and are referred to as, the Company's Retailer Controlled Property Venture (“RCP Venture”). The Operating Partnership is the sole general partner or managing member of the Funds and Mervyns I and II and earns priority distributions or fees for asset management, property management, construction, development, leasing and legal services. Cash flows from the Funds and the RCP Venture 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 flows are distributed 20% to the Operating Partnership (“Promote”) and 80% to the partners or members (including the Operating Partnership). See Note 1 in the Notes to Consolidated Financial Statements, included in Item 8 of this Report (“Notes to Consolidated Financial Statements”), for a detailed discussion of the Funds. Capital Strategy — Balance Sheet Focus and Access to Capital Our primary capital objective is to maintain a strong and flexible balance sheet through conservative financial practices, including moderate use of leverage within our Core Portfolio, while ensuring access to sufficient capital to fund future growth. We intend to continue financing acquisitions and property development with sources of capital determined by management to be the most appropriate based on, among other factors, availability in the current capital markets, pricing and other commercial and financial terms. The sources of capital may include the issuance of public equity, unsecured debt, mortgage and construction loans, and other capital alternatives including the issuance of OP Units. We manage our interest rate risk through the use of fixed-rate debt and, where we use variable-rate debt, through the use of certain derivative instruments, including London Interbank Offered Rate (“LIBOR”) swap agreements and interest rate caps as discussed further in Item 7A of this Report. During 2018, the Company revised its share repurchase program. The new share repurchase program authorizes management, at its discretion, to repurchase up to $200.0 million of its outstanding Common Shares. The program may be discontinued or extended at any time. The Company repurchased 2,294,235 shares for $55.1 million, inclusive of $0.1 million of fees, during the year ended December 31, 2018. The Company did not repurchase any shares during the years ended December 31, 2019 or 2017. As of December 31, 2019, management may repurchase up to approximately $145.0 million of the Company’s outstanding Common Shares under this program. We launched an at-the-market (“ATM”) equity issuance program in 2012 which provides us an efficient and low-cost vehicle for raising public equity to fund our capital needs. Through this program, we have been able to effectively “match-fund” a portion of the required equity for our Core Portfolio and Fund acquisitions through the issuance of Common Shares over extended periods employing a price averaging strategy. In addition, from time to time, we have issued and intend to continue to 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 Fund acquisitions and for other general corporate purposes. During 2019, we issued 5,164,055 Common Shares through our ATM program with gross proceeds of $147.7 million. See Note 10 for further details. No such issuances were made during 2018 or 2017. Operating Strategy — Experienced Management Team with Proven Track Record Our senior management team has decades of experience in the real estate industry. We have capitalized on our expertise in the acquisition, development, leasing and management of retail real estate by creating value through property development, re-tenanting and establishing joint ventures, such as the Funds, in which we earn, in addition to a return on our equity interest, Promotes, priority distributions and fees. Operating functions such as leasing, property management, construction, finance and legal (collectively, the “Operating Departments”) are generally provided by our personnel, providing for a vertically integrated operating platform. By incorporating the Operating Departments in the acquisition process, the Company believes that its acquisitions are appropriately evaluated giving effect to each asset’s specific risks and returns. 5


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    INVESTING ACTIVITIES See Item 2. Properties for a description of the properties in our Core and Fund portfolios. See Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations for a detailed discussion of our consolidated and unconsolidated acquisitions. Core Portfolio Our Core Portfolio consists primarily of high-quality street retail and urban assets, as well as suburban properties located in high-barrier-to- entry, densely-populated trade areas. As we typically hold our Core Portfolio properties for long-term investment, we review the portfolio and implement programs to renovate and re-tenant targeted properties to enhance their market position. This in turn is expected to strengthen the competitive position of the leasing program to attract and retain quality tenants, increasing cash flow, and consequently, property values. From time to time, we also identify certain properties for disposition and redeploy the capital for acquisitions and for the repositioning of existing properties with greater potential for capital appreciation. We also make investments in first mortgages and other notes receivable collateralized by real estate, (“Structured Finance Program”) either directly or through entities having an ownership interest therein. Acquisitions During 2019, we invested in one unconsolidated leasehold interest and one unconsolidated property (Note 4), acquired nine consolidated properties (Note 2) and invested in one leasehold interest (Note 11) in our Core portfolio for a total of $185.9 million. Dispositions During 2019, we sold our Pacesetter Park shopping center for $22.6 million (Note 2). Structured Financing Investments During 2019, we provided seller financing on our sale of Pacesetter Park shopping center in the amount of $13.5 million within our Structured Financing segment and advanced $4.3 million on an existing loan. As of December 31, 2019, we had $76.5 million invested in this program. See Note 3, for a detailed discussion of our Structured Finance Program. Funds Acquisitions Fund IV – During 2019, Fund IV acquired a consolidated leasehold interest in New York City for $10.5 million (Note 11). Fund V – During 2019, Fund V invested in four unconsolidated properties (Note 4) and three consolidated properties (Note 2) for an aggregate purchase price of $318.0 million. Dispositions Fund III – During 2019, Fund III sold two consolidated properties for a total of $38.2 million. Fund IV – During 2019, Fund IV sold two consolidated properties and three residential condominium units for an aggregate of $48.6 million. Structured Financing Investments Fund IV – During 2019, Fund IV received repayment of a $15.3 million Structured Financing investment (Note 3). Development and Redevelopment Activities As part of our investing strategy, we invest in real estate assets that may require significant development. In addition, certain assets may require redevelopment to meet the demand of changing markets. As of December 31, 2019, there were five Fund development projects, and one Core development project and four Core redevelopment projects. During the year ended December 31, 2019, the Company placed one consolidated Core property into service, placed one consolidated Core property into development, placed one consolidated Core property into redevelopment and placed two consolidated Fund properties into development. See Item 2. Properties—Development Activities and Note 2. 6


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    INFLATION Our long-term leases contain provisions designed to mitigate the adverse impact of inflation on our net income. Such provisions include escalation clauses, which generally increase rental rates during the terms of the leases, and to a lesser extent, clauses enabling us to receive percentage rents based on tenants’ gross sales, which generally increase as prices rise. Such escalation clauses are often related to increases in the Consumer Price Index or similar inflation indexes. In addition, many of our leases are for terms of less than ten years, which permits us to seek to increase rents upon re-rental at market rates if current rents are below the then existing market rates. Most of our leases require the tenants to pay their share of operating expenses, including common area maintenance, real estate taxes, insurance and utilities, thereby reducing our exposure to increases in costs and operating expenses resulting from inflation. ENVIRONMENTAL LAWS For information relating to environmental laws that may have an impact on our business, please see “Item 1A. Risk Factors — We are exposed to possible liability relating to environmental matters.” COMPETITION There are numerous entities that compete with us in seeking properties for acquisition and tenants that will lease space in our properties. Our competitors include other REITs, financial institutions, insurance companies, pension funds, private companies and individuals. Our properties compete for tenants with similar properties primarily on the basis of location, total occupancy costs (including base rent and operating expenses) and the design and condition of the improvements. CORPORATE HEADQUARTERS AND EMPLOYEES Our executive office is located at 411 Theodore Fremd Avenue, Suite 300, Rye, New York 10580, and our telephone number is (914) 288- 8100. As of December 31, 2019, we had 118 employees, of which 92 were located at our executive office and 26 were located at regional property management offices. None of our employees are covered by collective bargaining agreements. Management believes that its relationship with employees is good. COMPANY WEBSITE All of our filings with the Securities and Exchange Commission, including our annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, are available at no cost at our website at www.acadiarealty.com, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission. These filings can also be accessed through the Securities and Exchange Commission’s website at www.sec.gov. Alternatively, we will provide paper copies of our filings at no cost upon request. If you wish to receive a copy of the Form 10-K, you may contact Jason Blacksberg, Corporate Secretary, at Acadia Realty Trust, 411 Theodore Fremd Avenue, Suite 300, Rye, NY 10580. You may also call (914) 288-8100 to request a copy of the Form 10-K. Information included or referred to on our website is not incorporated by reference in or otherwise a part of this Form 10-K. CODE OF ETHICS AND WHISTLEBLOWER POLICIES Our board of trustees (the “Board of Trustees”), adopted a Code of Business Conduct and Ethics applicable to all employees, as well as a “Whistleblower Policy.” Copies of these documents are available in the Investor Information section of our website. We will disclose future amendments to, or waivers from (with respect to our senior executive financial officers), our Code of Ethics in the Investor Information section of our website within four business days following the date of such amendment or waiver. ITEM 1A. RISK FACTORS. Set forth below are the risk factors that we believe are material to our investors. You should carefully consider these risk factors, together with all of the other information included in this Report, including our consolidated financial statements and the related notes thereto, before you decide whether to make an investment in our securities. The occurrence of any of the following risks could adversely affect our financial condition, cash flows, results of operations, and ability to satisfy our debt service obligations and to make distributions to our shareholders. In such case, the trading price of our Common Shares could decline, and you may lose all or a significant part of your investment. This section includes or refers to certain forward-looking statements. See “Special Note Regarding Forward-Looking Statements” in this Report. The following risk factors are not exhaustive. Other sections of this Report may include additional factors that could adversely affect our financial condition, cash flows, results of operations, and ability to satisfy our debt service obligations and to make distributions to our 7


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    shareholders. Moreover, we operate in a very competitive and rapidly changing environment. New risk factors emerge from time to time and it is not possible for us to predict all such risk factors, nor can we assess the impact of all such risk factors on our business or the extent to which any factor, or combination of factors, may affect our business. Investors should also refer to our quarterly reports on Form 10-Q and current reports on Form 8-K for future periods for material updates to these risk factors. RISKS RELATED TO OUR BUSINESS AND OUR PROPERTIES There are risks relating to investments in real estate that could adversely affect our financial condition, cash flows, results of operations, and ability to satisfy our debt service obligations and to make distributions to our shareholders. Real property investments are subject to multiple risks. Real estate values are affected by a number of factors, including: changes in the general economic climate, local conditions (such as an oversupply of space or a reduction in demand), the quality and philosophy of management, competition from other available space, and the ability to provide adequate maintenance and insurance and to control variable operating costs. Retail properties, in particular, may be affected by changing perceptions of retailers or shoppers regarding the convenience and attractiveness of the property and by the overall climate for the retail industry. Real estate values are also affected by such factors as government regulations, interest rate levels, the availability of financing and potential liability under, and changes in, environmental, zoning, tax and other laws. A significant portion of our income is derived from rental income from real property. Our income and cash flow would be adversely affected if we were unable to rent our vacant space to viable tenants on economically favorable terms or at all. In the event of default by a tenant, we may experience delays in enforcing, as well as incur substantial costs to enforce, our rights as a landlord. In addition, certain significant expenditures associated with each equity investment (such as mortgage payments, real estate taxes and maintenance costs) are generally not reduced even though there may be a reduction in income from the investment. We rely on revenues derived from tenants, in particular our key tenants, and a decrease in those revenues could adversely affect our ability to make distributions to our shareholders. Revenue from our properties depends primarily on the ability of our tenants to pay the full amount of rent and other charges due under their leases on a timely basis. We derive significant revenues from a concentration of 20 key tenants which occupy space at more than one property and collectively account for approximately 37.8% of our consolidated revenue. We could be adversely affected in the event of the bankruptcy or insolvency of, or a downturn in the business of, any of our key tenants, or in the event that any such tenant does not renew its leases as they expire or renews such leases at lower rental rates. See “Item 2. Properties—Major Tenants” in this Report for quantified information with respect to the percentage of our minimum rents received from major tenants. Anchor tenants and co-tenancy are crucial to the success of retail properties and vacated anchor space directly and indirectly affects our rental revenues. Certain of our properties are supported by “anchor” tenants. Anchor tenants pay a significant portion of the total rents at a property and contribute to the success of other tenants by drawing large numbers of customers to a property. Vacated anchor space not only directly reduces rental revenues, but, if not re-tenanted with a tenant with comparable consumer attraction, could adversely affect the rest of the property primarily through the loss of customer drawing power. This can also occur through the exercise of the right that most anchors have, to vacate and prevent re-tenanting by paying rent for the balance of the lease term (“going dark”), such as the case of the departure of a “shadow” anchor tenant that is owned by another landlord. In addition, in the event that certain anchor tenants cease to occupy a property, such an action results in a significant number of other tenants having the contractual right to terminate their leases, or pay a reduced rent based on a percentage of the tenant's sales, at the affected property, which could adversely affect the future income from such property, also known as “co-tenancy.” Although it may not directly reduce our rental revenues, and there are no contractual co-tenancy conditions, vacant retail space adjacent to, or even on the same block as our street and urban properties may similarly affect shopper traffic and re-tenanting activities at our properties. See “Item 2. Properties—Major Tenants” in this Report. The bankruptcy of, or a downturn in the business of, any of our major tenants or a significant number of our smaller tenants may adversely affect our financial condition, cash flows, results of operations and property values. The bankruptcy of, or a downturn in the business of, any of our major tenants causing them to reject their leases, or to not renew their leases as they expire, or renew at lower rental rates, may adversely affect our cash flows and property values. Furthermore, the impact of vacated anchor space and the potential reduction in customer traffic may adversely impact the balance of tenants at a shopping center. Historically and from time to time, certain of our tenants experienced financial difficulties and filed for bankruptcy protection, typically under Chapter 11 of the United States Bankruptcy Code (“Chapter 11 Bankruptcy”). Pursuant to bankruptcy law, tenants have the right to reject some or all of their leases. In the event a tenant exercises this right, the landlord generally has the right to file a claim for lost rent equal to the greater of either one year's rent (including tenant expense reimbursements) for remaining terms greater than one year, or 15% of the rent remaining under the balance of the lease term, but not to exceed three years rent. Actual amounts to be received in satisfaction of those claims will be 8


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    subject to the tenant's final bankruptcy plan and the availability of funds to pay its creditors. There can be no assurance that our major tenants will not declare bankruptcy, in which case we may be unable to recoup past and future rent in full, and to re-lease a terminated or rejected space on comparable terms or at all. We may not be able to renew current leases or the terms of re-letting (including the cost of concessions to tenants) may be less favorable to us than current lease terms. Upon the expiration of current leases for space located in our properties, we may not be able to re-let all or a portion of that space, or the terms of re-letting (including the cost of concessions to tenants) may be less favorable to us than current lease terms. If we are unable to re-let promptly all or a substantial portion of the space located in our properties or if the rental rates we receive upon re-letting are significantly lower than current rates, our net income and ability to make expected distributions to our shareholders will be adversely affected due to the resulting reduction in revenues. There can be no assurance that we will be able to retain tenants in any of our properties upon the expiration of their leases. See “Item 2. Properties—Lease Expirations” in this Report for additional information regarding the scheduled lease expirations in our portfolio. Our business is significantly influenced by demand for retail space generally, and a decrease in such demand may have a greater adverse effect on our business than if we owned a more diversified real estate portfolio. A decrease in the demand for retail space, may have a greater adverse effect on our business and financial condition than if we owned a more diversified real estate portfolio. The market for retail space has been, and could continue to be, adversely affected by weakness in the national, regional and local economies, the adverse financial condition of some large retailing companies and bankruptcy incidence, the ongoing consolidation in the retail sector, the excess amount of retail space in a number of markets, and increasing consumer purchases through the Internet. To the extent that any of these conditions occur, they are likely to negatively affect market rents for retail space and could adversely affect our financial condition, cash flows, results of operations, the trading price of our Common Shares and our ability to satisfy our debt service obligations and to pay distributions to our shareholders. E-commerce can have an impact on our business because it may cause a downturn in the business of our current tenants and affect future leases. The use of the Internet by retail consumers continues to gain in popularity and the migration toward e-commerce is expected to continue. The increase in Internet sales could result in a downturn in the business of our current tenants in their “brick and mortar” locations, adversely impacting their ability to satisfy their rent obligations, and could affect the way future tenants lease space. While we devote considerable effort and resources to analyze and respond to tenant trends, preferences and consumer spending patterns, we cannot predict with certainty what future tenants will want, what future retail spaces will look like and how much revenue will be generated at traditional “bricks and mortar” locations. If we are unable to anticipate and respond promptly to trends in the market because of the illiquid nature of real estate (See the Risk Factor entitled, “Our ability to change our portfolio is limited because real estate investments are illiquid” below), our occupancy levels and financial results could suffer. The economic environment may cause us to lose tenants and may impair our ability to borrow money to purchase properties, refinance existing debt or finance our current development projects. Our operations and performance depend on general economic conditions, including consumer health. The U.S. economy has historically experienced financial downturns from time to time, including a decline in consumer spending, credit tightening and high unemployment. 9


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    While we currently believe we have adequate sources of liquidity, there can be no assurance that, in the event of a financial downturn, we will be able to obtain secured or unsecured loan facilities to meet our needs, including to purchase additional properties, to complete current development projects, or to successfully refinance our properties as loans become due. To the extent that the availability of credit is limited, it would also adversely impact our notes receivable as counterparties may not be able to obtain the financing required to repay the loans upon maturity. Certain sectors of the U. S. economy are still experiencing weakness. Over the past several years, this structural weakness has resulted in periods of high unemployment, the bankruptcy or weakened financial condition of a number of retailers, decreased consumer spending, increased home foreclosures, low consumer confidence, and reduced demand and rental rates for certain retail space. There can be no assurance that the recovery will continue. General economic factors that are beyond our control, including, but not limited to, economic recessions, decreases in consumer confidence, reductions in consumer credit availability, increasing consumer debt levels, rising energy costs, higher tax rates, continued business layoffs, downsizing and industry slowdowns, and/or rising inflation, could have a negative impact on the business of our retail tenants. In turn, this could have a material adverse effect on our business because current or prospective tenants may, among other things, (i) have difficulty paying their rent obligations as they struggle to sell goods and services to consumers, (ii) be unwilling to enter into or renew leases with us on favorable terms or at all, (iii) seek to terminate their existing leases with us or request rental concessions on such leases, or (iv) be forced to curtail operations or declare bankruptcy. Political and economic uncertainty could have an adverse effect on our business. We cannot predict how current political and economic uncertainty will affect our critical tenants, joint venture partners, lenders, financial institutions and general economic conditions, including the health and confidence of the consumer and the volatility of the stock market. Political and economic uncertainty poses a risk to us in that it may cause consumers to postpone discretionary spending in response to tighter credit, reduced consumer confidence and other macroeconomic factors affecting consumer spending behavior, resulting in a downturn in the business of our tenants. In the event current political and economic uncertainty results in financial turmoil affecting the banking system and financial markets generally or significant financial service institution failures, there could be a new or incremental tightening in the credit markets, low liquidity, and extreme volatility in fixed income, credit, currency and equity markets. Each of these factors could adversely affect our financial condition, cash flows and results of operations. Inflation may adversely affect our financial condition, cash flows and results of operations. Increased inflation could have a more pronounced negative impact on our mortgage and debt interest and general and administrative expenses, as these costs could increase at a rate higher than our rents. Also, inflation may adversely affect tenant leases with stated rent increases or limits on such tenant’s obligation to pay its share of operating expenses, which could be lower than the increase in inflation at any given time. It may also limit our ability to recover all of our operating expenses. Inflation could also have an adverse effect on consumer spending, which could impact our tenants’ sales and, in turn, our average rents, and in some cases, our percentage rents, where applicable. In addition, renewals of leases or future leases may not be negotiated on current terms, in which event we may recover a smaller percentage of our operating expenses. Many of our real estate costs are fixed, even if income from our properties decreases, which would cause a decrease in net income. Our financial results depend primarily on leasing space at our properties to tenants on terms favorable to us. Costs associated with real estate investment, such as real estate taxes, insurance and maintenance costs, generally are not reduced even when a property is not fully occupied, rental rates decrease, or other circumstances cause a reduction in income from the property. As a result, cash flow from the operations of our properties may be reduced if a tenant does not pay its rent or we are unable to fully lease our properties on favorable terms. Additionally, properties that we develop or redevelop may not produce any significant revenue immediately, and the cash flow from existing operations may be insufficient to pay the operating expenses and debt service associated with such projects until they are fully occupied. Our ability to change our portfolio is limited because real estate investments are illiquid. Equity investments in real estate are relatively illiquid and, therefore, our ability to change our portfolio promptly in response to changed conditions is limited, which could adversely affect our financial condition, cash flows, and ability to satisfy our debt service obligations and to make distributions to our shareholders. In addition, the Code contains restrictions on a REITs ability to dispose of properties that are not applicable to other types of real estate companies. Our Board of Trustees may establish investment criteria or limitations as it deems appropriate, but it currently does not limit the number of properties in which we may seek to invest or on the concentration of investments in any one geographic region. As discussed under the heading “Our Board of Trustees may change our investment policy without shareholder approval” below, we could change our investment, disposition and financing policies and objectives without a vote of our shareholders, but such change may be delayed or more difficult to implement due to the illiquidity of real estate. 10


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    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. Although we have historically used moderate levels of leverage, we have incurred, and expect to continue to incur, indebtedness to support our activities. As of December 31, 2019, our outstanding indebtedness was $1,717.9 million, of which $314.6 million was variable rate indebtedness. None of our Declaration of Trust, our bylaws or any policy statement formally adopted by our Board of Trustees limits either the total amount of indebtedness or the specified percentage of indebtedness that we may incur. Accordingly, we could become more highly leveraged, resulting in increased debt service requirements and a higher risk of default on our debt obligations. This in turn, could adversely affect our financial condition, cash flows and ability to make distributions to our shareholders. Although approximately 81.7% of our outstanding debt has fixed or effectively fixed interest rates, we also borrow funds at variable interest rates. Variable rate debt exposes us to changes in interest rates, which could cause our borrowing costs to rise and may limit our ability to refinance debt. Interest expense on our variable rate debt as of December 31, 2019 would increase by $7.5 million annually for a 100-basis- point increase in interest rates. This exposure would increase if we seek additional variable rate financing based on pricing and other commercial and financial terms. We enter into interest rate hedging transactions, including interest rate swap and cap agreements, with counterparties, generally, the same lenders who made the loan in question. There can be no guarantee that the future financial condition of these counterparties will enable them to fulfill their obligations under these agreements. In July 2017, the Financial Conduct Authority (“FCA”) that regulates LIBOR announced it intends to stop compelling banks to submit rates for the calculation of LIBOR after 2021. As a result, the Federal Reserve Board and the Federal Reserve Bank of New York organized the Alternative Reference Rates Committee ("ARRC"), which identified the Secured Overnight Financing Rate ("SOFR") as its preferred alternative to USD-LIBOR in derivatives and other financial contracts. The Company is not able to predict when LIBOR will cease to be available or when there will be sufficient liquidity in the SOFR markets. While we expect LIBOR to be available in substantially its current form until the end of 2021, it is possible that LIBOR will become unavailable prior to that point. In that case, the risks associated with the transition to an alternative reference rate will be accelerated and magnified. The Company has contracts indexed to LIBOR and is monitoring and evaluating the risks related to potential discontinuation of LIBOR, including transitioning contracts to a new alternative rate and any resulting value transfer that may occur. If LIBOR is discontinued or if the methods of calculating LIBOR change from their current form, interest rates on our current or future indebtedness may be adversely affected. In addition, uncertainty about the extent and manner of future changes may result in interest rates and/or payments that are higher or lower than if LIBOR were to remain available in its current form. Competition may adversely affect our ability to purchase properties and to attract and retain tenants. There are numerous commercial developers, real estate companies, financial institutions and other investors with greater financial resources than we have that compete with us in seeking properties for acquisition and tenants who will lease space in our properties. Our competitors include other REITs, financial institutions, private funds, insurance companies, pension funds, private companies, family offices, sovereign wealth funds and individuals. This competition may result in a higher cost for properties than we wish to pay. In addition, retailers at our properties (both in our Core Portfolio and in the portfolios of the Funds) face increasing competition from outlet malls, discount shopping clubs, e-commerce, direct mail and telemarketing, which could (i) reduce rents payable to us and (ii) reduce our ability to attract and retain tenants at our properties leading to increased vacancy rates at our properties. We could be adversely affected by conditions in the markets where our properties are geographically concentrated. Our performance depends on the economic conditions in markets where our properties are geographically concentrated. We have significant exposure to the greater New York and Chicago metropolitan regions, from which we derive 36.2% and 27.6% of the annual base rents within our Core Portfolio, respectively, and 21.0% and 3.5% of annual base rents within our Funds, respectively. Our operating results could be adversely affected if market conditions, such as an oversupply of space or a reduction in demand for real estate, occur in these areas. We have pursued, and may in the future continue to pursue extensive growth opportunities, including investing in new markets, which may result in significant demands on our operational, administrative and financial resources. We are pursuing extensive growth opportunities, some of which have been, and in the future may be, in locations in which we have not historically invested. This expansion places significant demands on our operational, administrative and financial resources. The continued 11


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    growth of our real estate portfolio can be expected to continue to place a significant strain on our resources. Our future performance will depend in part on our ability to successfully attract and retain qualified management personnel to manage the growth and operations of our business. In addition, the acquired properties may fail to operate at expected levels due to the numerous factors that may affect the value of real estate. There can be no assurance that we will have sufficient resources to identify and manage the newly acquired properties. Our inability to raise capital for new Funds or to carry out our growth strategy could adversely affect our financial condition, cash flows and results of operations. Our earnings growth strategy is based on the acquisition and development of additional properties, including acquisitions of core properties through our Operating Partnership and our high return investment programs through our Fund platform. The consummation of any future acquisitions will be subject to satisfactory completion of our extensive valuation analysis and due diligence review and to the negotiation of definitive documentation. We cannot be sure that we will be able to implement our strategy because we may have difficulty finding new properties, obtaining necessary entitlements, negotiating with new or existing tenants or securing acceptable financing. Acquisitions of additional properties entail the risk that investments will fail to perform in accordance with expectations, including operating and leasing expectations. In the context of our business plan, “development” generally means an expansion or renovation of an existing property. Development is subject to numerous risks, including risks of construction delays, cost overruns or uncontrollable events that may increase project costs, new project commencement risks such as the receipt of zoning, occupancy and other required governmental approvals and permits, and incurring development costs in connection with projects that are not pursued to completion. Historically, a component of our growth strategy has been through private-equity type investments made through our RCP Venture, which have included investments in operating retailers. The inability of such retailers to operate profitably would have an adverse impact on income realized from these investments. Through our investments in joint ventures we have also invested in operating businesses that have operational risk in addition to the risks associated with real estate investments, including human capital issues, adequate supply of product and material, and merchandising issues. Furthermore, if we were unable to obtain sufficient investor capital commitments in order to initiate future Funds, this would adversely impact our current growth strategy would be adversely impacted. Because the Operating Partnership is the sole general partner or managing member of our Funds and earns promote distributions or fees for asset management, property management, construction, development, leasing and legal services, such a situation would also adversely impact the amount or ability to earn such promotes or fees. Our development and construction activities could affect our operating results. We intend to continue the selective development and construction of retail properties (see “Item 1. Business —Investing Activities–Funds– Development Activities”). As opportunities arise, we may delay construction until sufficient pre-leasing is reached and financing is in place. Our development and construction activities include the risk that: • we may abandon development opportunities after expending resources to determine feasibility; • construction costs of a project may exceed our original estimates; • occupancy rates and rents at a newly completed property may not be sufficient to make the property profitable; • financing for development of a property may not be available to us on favorable terms; • we may not complete construction and lease-up on schedule, resulting in increased debt service expense and construction costs, including labor and material costs; and • we may not be able to obtain, or may experience delays in obtaining necessary zoning and land use approvals as well as building, occupancy and other required governmental permits and authorizations. In addition, the entitlement and development of real estate entails extensive approval processes, sometimes involving multiple regulatory jurisdictions. It is common for a project to require multiple approvals, permits and consents from U.S. federal, state and local governing and regulatory bodies. Compliance with these and other regulations and standards is time intensive and costly and may require additional long range infrastructure review and approvals which can add to project cost. In addition, development of properties containing delineated wetlands may require one or more permits from the U.S. federal government and/or state and local governmental agencies. Any of these issues can materially affect the cost, timing and economic viability of our development and redevelopment projects. At times, we may also be required to use unionized construction workers or to pay the prevailing wage in a jurisdiction to unionized workers, which could increase projects costs and the risk of a strike, thereby affecting construction timelines. 12


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    Additionally, the time frame required for development, construction and lease-up of these properties means that we may not realize a significant cash return for several years. If any of the above events occur, the development of properties may hinder our growth and could have an adverse effect on our financial condition, cash flows and results of operations. In addition, new development activities, regardless of whether or not they are ultimately successful, typically require substantial time and attention from management. Developments and acquisitions may fail to perform as expected which could adversely affect our results of operations. Our investment strategy includes the development and acquisition of retail properties in supply constrained markets in densely populated areas with high average household incomes and significant barriers to entry. The acquisition of such properties is highly competitive. Additionally, the development and acquisition of such properties entails risks that include the following, any of which could adversely affect our financial condition, cash flows, results of operations, and our ability to meet our debt obligations and make distributions to shareholders: • The property may fail to achieve the returns we have projected, either temporarily or for extended periods; • We may not be able to identify suitable properties to acquire or may be unable to complete the acquisition of the properties we identify; • We may not be able to integrate an acquisition into our existing operations successfully; • Properties we redevelop or acquire may fail to achieve the occupancy or rental rates we project or within the time frames we project which may result in the properties' failure to achieve the returns we projected; • Our pre-acquisition evaluation of the physical condition of each new investment may not detect certain defects or identify necessary repairs until after the property is acquired, which could significantly increase our total acquisition costs or decrease cash flow from the property; and • Our investigation of a property or building prior to our acquisition, and any representations we may receive from the seller of such building or property, may fail to reveal various liabilities, which could reduce the cash flow from the property or increase our acquisition cost. We operate through a partnership structure, which could have an adverse effect on our ability to manage our assets. Our primary property-owning vehicle is the Operating Partnership, of which we are the general partner. Our acquisition of properties through the Operating Partnership in exchange for interests in the Operating Partnership may permit certain tax deferral advantages to limited partners who contribute properties to the Operating Partnership. Since properties contributed to the Operating Partnership may have unrealized gains attributable to the differences between the fair market value and adjusted tax basis in such properties prior to contribution, the sale of such properties could cause adverse tax consequences to the limited partners who contributed such properties. Although we, as the general partner of the Operating Partnership, generally have no obligation to consider the tax consequences of our actions to any limited partner, we own several properties subject to material contractual restrictions for varying periods of time designed to minimize the adverse tax consequences to the limited partners who contributed such properties. Such restrictions may result in significantly reduced flexibility to manage some of our assets. We currently have an exclusive obligation to seek investments for our Funds, which may prevent us from making acquisitions directly. Under the terms of the organizational documents of our Funds, our primary goal is to seek investments for the Funds, subject to certain exceptions. We may only pursue opportunities to acquire retail properties directly through the Operating Partnership if (i) the ownership of the acquisition opportunity by the Funds would create a material conflict of interest for us; (ii) we require the acquisition opportunity for a “like- kind” exchange; (iii) the consideration payable for the acquisition opportunity is our Common Shares, OP Units or other securities or (iv) the investment is outside the parameters of our investment goals for the Funds (which, in general, seek more opportunistic level returns). As a result, we may not be able to make attractive acquisitions directly and instead may only receive a minority interest in such acquisitions through the Funds. Our joint venture investments carry additional risks not present in our direct investments. Partnership or joint venture investments may involve risks not otherwise present for investments made solely by us, including the possibility that our partner or co-venturer might become bankrupt, and that our partner or co-venturer may take action contrary to our instructions, requests, policies or objectives, including with respect to maintaining our qualification as a REIT. Actions by, or disputes with, joint venture partners might result in subjecting properties owned by the joint venture to additional risks. Other risks of joint venture investments include impasse on decisions, such as a sale, because neither we nor a joint venture partner may have full control over the joint venture. Also, there is no limitation under our organizational documents as to the amount of our funds that may be invested in joint ventures. Additionally, our partners or co-venturers may engage in malfeasance in spite of our efforts to perform a high level of due diligence on them, which may jeopardize an investment and/or subject us to reputational risk. Such acts may or may not be covered by insurance. 13


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    Any disputes that may arise between joint venture partners and us may result in potentially costly litigation or arbitration that would prevent our officers and/or trustees from focusing their time and effort on our business. In addition, we may in certain circumstances be liable for the actions of our third-party joint venture partners. Historically, Fund I, Mervyns I and Fund III have provided Promote income. There can be no assurance that our joint ventures will continue to operate profitably and thus provide additional Promote income in the future. These factors could limit the return that we receive from such investments or cause our cash flows to be lower than our estimates. In addition, a partner or co-venturer may not have access to sufficient capital to satisfy its funding obligations to the joint venture. Our structured financing portfolio is subject to specific risks relating to the structure and terms of the instruments and the underlying collateral. We invest in notes receivables and preferred equity investments that are collateralized by the underlying real estate, a direct interest or the borrower’s ownership interest in the entities that own the properties and/or by the borrower’s personal guarantee. The underlying assets are sometimes subordinate in payment and collateral to more senior loans. The ability of a borrower or entity to make payments on these investments may be subject to the senior lender and/or the performance of the underlying real estate. In the event of a default by the borrower or entity on its senior loan, our investment will only be satisfied after the senior loan and we may not be able to recover the full value of the investment. In the event of a bankruptcy of an entity in which we have a preferred equity interest, or in which the borrower has pledged its interest, the assets of the entity may not be sufficient to satisfy our investment. Our real estate assets may be subject to impairment charges. We periodically assess whether there are any indicators that the value of our real estate assets and other investments may be impaired. A property’s value is considered to be impaired only if the estimated aggregate future undiscounted property cash flows are less than the carrying value of the property. In our estimate of cash flows, we consider factors such as trends and prospects and the effects of demand and competition on expected future operating income. If we are evaluating the potential sale of an asset or redevelopment alternatives, the undiscounted future cash flows consider the most likely course of action as of the balance sheet date based on current plans, intended holding periods and available market information. We are required to make subjective assessments as to whether there are impairments in the value of our real estate assets and other investments. Impairment charges have an immediate direct impact on our earnings. There can be no assurance that we will not take additional charges in the future related to the impairment of our assets. Any future impairment could have a material adverse effect on our operating results in the period in which the charge is taken. Market factors could have an adverse effect on our share price and our ability to access the public equity markets. The market price of our Common Shares may fluctuate significantly in response to many factors, including: • actual or anticipated variations in our operating results, funds from operations, cash flows or liquidity; • changes in our earnings estimates or those of analysts; • changes in our dividend policy; • impairment charges affecting the carrying value of one or more of our Properties or other assets; • publication of research reports about us, the retail industry or the real estate industry generally; • increases in market interest rates that lead purchasers of our securities to seek higher dividend or interest rate yields; • changes in market valuations of similar companies; • adverse market reaction to the amount of our outstanding debt at any time, the amount of our maturing debt in the near and medium term and our ability to refinance such debt and the terms thereof or our plans to incur additional debt in the future; • additions or departures of key management personnel; • actions by institutional security holders; • proposed or adopted regulatory or legislative changes or developments; • speculation in the press or investment community; • the occurrence of any of the other risk factors included in, or incorporated by reference in, this report; and • general market and economic conditions. Many of the factors listed above are beyond our control. Those factors may cause the market price of our Common Shares to decline significantly, regardless of our financial performance, condition and prospects. We may not provide any assurance that the market price of our Common Shares will not fall in the future, and it may be difficult for holders to sell such securities at prices they find attractive, or at all. A decline in our share price, as a result of this or other market factors, could unfavorably impact our ability to raise additional equity in the public markets. 14


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    RISKS RELATED TO STRUCTURE AND MANAGEMENT The loss of key management members could have an adverse effect on our business, financial condition and results of operations. Our success depends on the contribution of key management members. The loss of the services of Kenneth F. Bernstein, President and Chief Executive Officer, or other key executive-level employees could have a material adverse effect on our business, financial condition and results of operations. Management continues to strengthen our team and we have CEO succession planning in place, but there can be no assurance that such planning will be capable of implementation or that our efforts will be successful. We have obtained key-man life insurance for Mr. Bernstein. In addition, we have entered into an employment agreement with Mr. Bernstein and into severance agreements with other senior executives; however, Mr. Bernstein and such executives may terminate their employment with us at will. Our Board of Trustees may change our investment policy or objectives without shareholder approval. Our Board of Trustees may determine to change our investment and financing policies or objectives, our growth strategy and our debt, capitalization, distribution, acquisition, disposition and operating policies. Our Board of Trustees may establish investment criteria or limitations as it deems appropriate, but currently does not limit the number of properties in which we may seek to invest or on the concentration of investments in any one geographic region. Although our Board of Trustees has no present intention to revise or amend our strategies and policies, it may do so at any time without a vote by our shareholders. Accordingly, the results of decisions made by our Board of Trustees as implemented by management may or may not serve the interests of all of our shareholders and could adversely affect our financial condition, cash flows, results of operations, and ability to satisfy our debt service obligations and to make distributions to our shareholders. Distribution requirements imposed by law limit our operating flexibility. To maintain our status as a REIT for Federal income tax purposes, we are generally required to distribute to our shareholders at least 90% of our taxable income for each calendar year. Our taxable income is determined without regard to any deduction for dividends paid and by excluding net capital gains. To the extent that we satisfy the distribution requirement, but distribute less than 100% of our taxable income, we will be subject to Federal corporate income tax on our undistributed income. In addition, we will incur a 4% nondeductible excise tax on the amount, if any, by which our distributions in any year are less than the sum of (i) 85% of our ordinary income for that year; (ii) 95% of our capital gain net income for that year; and (iii) 100% of our undistributed taxable income from prior years. We intend to continue to make distributions to our shareholders to comply with the distribution requirements of the Internal Revenue Code and to minimize exposure to Federal income and excise taxes. Differences in timing between the receipt of income and the payment of expenses in determining our income as well as required debt amortization payments and the capitalization of certain expenses could require us to borrow funds on a short-term basis to meet the distribution requirements that are necessary to achieve the tax benefits associated with qualifying as a REIT. The distribution requirements also severely limit our ability to retain earnings to acquire and improve properties or retire outstanding debt. Concentration of ownership by certain investors. As of December 31, 2019, five institutional shareholders own 5% or more individually, and 54.5% in the aggregate, of our Common Shares. While this ownership concentration does not jeopardize our qualification as a REIT (due to certain “look-through provisions”), a significant concentration of ownership may allow an investor or a group of investors to exert a greater influence over our management and affairs and may have the effect of delaying, deferring or preventing a change in control of us. Restrictions on a potential change of control could prevent changes that would be beneficial to our shareholders. Our Board of Trustees is authorized by our Declaration of Trust to establish and issue one or more series of preferred shares of beneficial interest without shareholder approval. We have not established any series of preferred shares other than the Series A and Series C Preferred OP Units in the Operating Partnership. However, the establishment and issuance of a class or series of preferred shares could make a change of control of us that could be in the best interests of the shareholders more difficult. In addition, we have entered into an employment agreement with our Chief Executive Officer and severance agreements with certain of our executives, which provide that, upon the occurrence of a change in control of us and either the termination of their employment without cause (as defined) or their resignation for good reason (as defined), such executive officers would be entitled to certain termination or severance payments made by us (which may include a lump sum payment equal to defined percentages of annual salary and prior years' average bonuses, paid in accordance with the terms and conditions of the respective agreement), which could deter a change of control of us that could be in the best interests of our shareholders generally. 15


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    Certain provisions of Maryland law may limit the ability of a third party to acquire control of our Company. Under the provisions of the Maryland General Corporation Law (the “MGCL”) applicable to REITs, certain business combinations, including certain mergers, consolidations, share exchanges and asset transfers and certain issuances and reclassifications of equity securities, between a Maryland REIT and any person who beneficially owns 10% or more of the voting power of the REIT's outstanding voting shares or an affiliate or an associate, as defined in the MGCL, of the REIT who, at any time within the two-year period immediately prior to the date in question, was the beneficial owner of 10% or more of the voting power of the then-outstanding shares of beneficial interest of the REIT (an “interested shareholder”) or an affiliate of the interested shareholder, are prohibited for five years after the most recent date on which the interested shareholder becomes an interested shareholder. After that five-year period, any such business combination must be recommended by the board of trustees of the REIT and approved by the affirmative vote of at least (i) 80% of the votes entitled to be cast by holders of outstanding voting shares of beneficial interest of the REIT and (ii) two-thirds of the votes entitled to be cast by holders of voting shares of the REIT other than shares held by the interested shareholder with whom, or with whose affiliate, the business combination is to be effected or held by an affiliate or associate of the interested shareholder, unless, among other conditions, the REIT's common shareholders receive a minimum price, as defined in the MGCL, for their shares and the consideration is received in cash or in the same form as previously paid by the interested shareholder for its common shares. These provisions of the MGCL do not apply, however, to business combinations that are approved or exempted by the board of trustees of the REIT before the interested shareholder becomes an interested shareholder, and a person is not an interested shareholder if the board of trustees approved in advance the transaction by which the person otherwise would have become an interested shareholder. In approving a transaction, our Board of Trustees may provide that its approval is subject to compliance, at or after the time of approval, with any terms and conditions determined by the Board. We have not elected to opt out of the business combination statute. The MGCL also provides that holders of “control shares” of a Maryland REIT (defined as voting shares that, when aggregated with all other shares owned by the acquirer or in respect of which the acquirer is entitled to exercise or direct the exercise of voting power (except solely by virtue of a revocable proxy), would entitle the acquirer to exercise one of three increasing ranges of voting power in electing trustees) acquired in a “control share acquisition” (defined as the direct or indirect acquisition of ownership or control of “control shares”) have no voting rights except to the extent approved by the affirmative vote of holders of at least two-thirds of all the votes entitled to be cast on the matter, excluding shares owned by the acquirer, by officers or by employees who are also trustees of the REIT. Our Bylaws contain a provision exempting from the control share acquisition statute any and all acquisitions by any person of our shares of beneficial interest. Our Bylaws can be amended by our Board of Trustees by majority vote, and there can be no assurance that this provision will not be amended or eliminated at any time in the future. Additionally, Title 3, Subtitle 8 of the MGCL permits our Board of Trustees, without shareholder approval and regardless of what is currently provided in our Declaration of Trust or Bylaws, to elect to be subject to certain provisions relating to corporate governance that may have the effect of delaying, deferring or preventing a transaction or a change of control of our Company that might involve a premium to the market price of our Common Shares or otherwise be in the best interests of our shareholders. We are subject to some of these provisions (for example, a two-thirds vote requirement for removing a trustee) by provisions of our Declaration of Trust and Bylaws unrelated to Subtitle 8. However, pursuant to the Articles Supplementary filed with the State Department of Assessments and Taxation of Maryland on November 9, 2017, which are referenced in Part IV Item 15 hereto, the Board of Trustees approved a resolution to opt out of Section 3-803 of Subtitle 8 of Title 3 of the MGCL that allows the Board, without shareholder approval, to elect to classify into three classes with staggered three-year terms. The Articles Supplementary prohibit the Company, without the affirmative vote of a majority of the votes cast on the matter by shareholders entitled to vote generally in the election of trustees, from classifying the Board under Subtitle 8. Becoming subject to, or the potential to become subject to, these provisions of the MGCL could inhibit, delay or prevent a transaction or a change of control of our Company that might involve a premium price for our shareholders or otherwise be in our or their best interests. In addition, the provisions of our Declaration of Trust on removal of trustees and the provisions of our Bylaws regarding advance notice of shareholder nominations of trustees and other business proposals and restricting shareholder action outside of a shareholders meeting unless such action is taken by unanimous written consent could have a similar effect. Our rights and shareholders' rights to take action against trustees and officers are limited, which could limit recourse in the event of actions not in the best interests of shareholders. As permitted by Maryland law, our Declaration of Trust eliminates the liability of our trustees and officers to the Company and its shareholders for money damages, except for liability resulting from: • actual receipt of an improper benefit or profit in money, property or services; or • a final judgment based upon a finding of active and deliberate dishonesty by the trustee or officer that was material to the cause of action adjudicated. 16


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    In addition, our Declaration of Trust authorizes, and our Bylaws obligate, us to indemnify each present or former trustee or officer, to the maximum extent permitted by Maryland law, who is made a party to any proceeding because of his or her service to our Company in those or certain other capacities. As part of these indemnification obligations, we may be obligated to fund the defense costs incurred by our trustees and officers. Outages, computer viruses and similar events could disrupt our operations. We rely on information technology networks and systems, some of which are owned and operated by third parties, to process, transmit and store electronic information. Any of these systems may be susceptible to outages due to fire, floods, power loss, telecommunications failures, terrorist or cyber-attacks and similar events. Despite the implementation of network security measures, our systems and those of third parties on which we rely may also be vulnerable to computer viruses and similar disruptions. If we or the third parties on whom we rely are unable to prevent such outages and breaches, our operations could be disrupted. Increased Information Technology (“IT”) security threats and more sophisticated computer crime could pose a risk to our systems, networks and services. Cyber incidents can result from deliberate attacks or unintentional events. There have been an increased number of significant cyber-attacks targeted at the retail, insurance, financial and banking industries that include, but are not limited to, gaining unauthorized access to digital systems for purposes of misappropriating assets or sensitive information, corrupting data or causing operational disruption. Cyber-attacks may also be carried out in a manner that does not require gaining unauthorized access, such as by causing denial-of-service attacks on websites. Cyber-attacks by third parties or insiders utilize techniques that range from highly sophisticated efforts to electronically circumvent network security or overwhelm a website to more traditional intelligence gathering and social engineering aimed at obtaining information necessary to gain access. Increased global IT security threats are more sophisticated and targeted computer crimes pose a risk to the security of our systems and networks and the confidentiality, availability and integrity of our data. The open nature of interconnected technologies may allow for a network or Web outage or a privacy breach that reveals sensitive data or transmission of harmful/malicious code to business partners and clients. Because the techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently and may be difficult to detect for long periods of time, we may be unable to anticipate these techniques or implement adequate preventive measures. Cyber-attacks may result in substantial financial and reputational cost, including but are not limited to: • Compromising of confidential information; • Manipulation and destruction of data; • Loss of trade secrets; • System downtimes and operational disruptions; • Remediation costs that may include liability for stolen assets or information and repairing system damage, as well as incentives offered to customers, tenants or other business partners in an effort to maintain the business relationships; • Loss of revenues resulting from unauthorized use of proprietary information; • Cost to deploy additional protection strategies, training employees and engaging third party experts and consultants; • Reputational damage adversely affecting investor and tenant confidence; and • Costly litigation. While we attempt to mitigate these risks by employing a number of measures, including a dedicated IT team, employee training and background checks, maintenance of backup systems, utilization of third-party service providers to provide redundancy over multiple locations, and comprehensive monitoring of our networks and systems along with purchasing cyber security insurance coverage, our systems, networks and services remain potentially vulnerable to advanced threats. If a third-party vendor fails to provide agreed upon services, we may suffer losses. We are dependent and rely on third party vendors, including Cloud providers, for redundancy of our network, system data, security and data integrity. If a vendor fails to provide services as agreed, suffers outages, business interruptions, financial difficulties or bankruptcy, we may experience service interruption, delays or loss of information. Cloud computing is dependent upon having access to an Internet connection in order to retrieve data. If a natural disaster, blackout or other unforeseen event were to occur that disrupted the ability to obtain an Internet connection, we may experience a slowdown or delay in our operations. We conduct appropriate due diligence on all services providers and restrict access, use and disclosure of personal information. We engage vendors with formal written agreements clearly defining the roles of the parties specifying privacy and data security responsibilities. 17


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    Use of social media may adversely impact our reputation and business. There has been a significant increase in the use of social media platforms, including weblogs, social media websites and other forms of Internet-based communications, which allow individuals access to a broad audience, including our significant business constituents. The availability of information through these platforms is virtually immediate as is its impact and may be posted at any time without affording us an opportunity to redress or correct it timely. This information may be adverse to our interests, may be inaccurate and may harm our reputation, brand image, goodwill, performance, prospects or business. Furthermore, these platforms increase the risk of unauthorized disclosure of material non-public Company information. Climate change, natural disasters or health crises could adversely affect our properties and business. Some of our current or future properties could be subject to natural disasters and may be impacted by climate change. To the extent climate change causes adverse changes in weather patterns, rising sea levels or extreme temperatures, our properties in certain markets may be adversely affected. Specifically, properties located in coastal regions could be affected by any future increases in sea levels or in the frequency or severity of hurricanes and storms, whether caused by climate change or other factors. Additionally, we own properties in Southern California, which in recent years has experienced intense draught and wildfires and has had earthquake activity. Climate change could have a variety of direct or indirect adverse effects on our properties and business, including: • Property damage to our retail properties; • Indirect financial and operational impacts from disruptions to the operations of major tenants located in our retail properties from severe weather, such as hurricanes, floods, wildfires or other natural disasters; • Increased insurance premiums and deductibles, or a decrease in or unavailability of coverage, for properties in areas subject to severe weather, such as hurricanes, floods, wildfires or other natural disasters; • Increased insurance claims and liabilities; • Increases in energy costs impacting operational returns; • Changes in the availability or quality of water or other natural resources on which the tenant's business depends; • Decreased consumer demand for products or services resulting from physical changes associated with climate change (e.g., warmer temperatures or decreasing shoreline could reduce demand for residential and commercial properties previously viewed as desirable); • Incorrect long-term valuation of an equity investment due to changing conditions not previously anticipated at the time of the investment; and • Economic disruptions arising from the above. Moreover, compliance with new laws or regulations related to climate change, including compliance with “green” building codes, may require us to make improvements to our existing properties or pay additional taxes and fees assessed on us or our properties. Although we strive to identify, analyze, and respond to the risk and opportunities that climate change presents, at this time there can be no assurance that climate change will have an adverse effect on us. Public health crises, pandemics and epidemics, such as those caused by new strains of viruses such as H5N1 (avian flu), severe acute respiratory syndrome (SARS) and, most recently, the novel coronavirus (COVID-19), are expected to increase as international travel continues to rise and could adversely impact our business by interrupting our tenants’ business, supply chains and transactional activities, disrupting travel, and negatively impacting local, national or global economies. We are exposed to possible liability relating to environmental matters. Under various Federal, state and local environmental laws, statutes, ordinances, rules and regulations, as an owner of real property, we may be liable for the costs of removal or remediation of certain hazardous or toxic substances at, on, in or under our property, as well as certain other potential costs relating to hazardous or toxic substances (including government fines and penalties and damages for injuries to persons and adjacent property). These laws may impose liability without regard to whether we knew of, or were responsible for, the presence or disposal of those substances. This liability may be imposed on us in connection with the activities of an operator of, or tenant at, the property. The cost of any required remediation, removal, fines or personal or property damages and our liability therefore could exceed the value of the property and/or our aggregate assets. In addition, the presence of those substances, or the failure to properly dispose of or remove those substances, may adversely affect our ability to sell or rent that property or to borrow using that property as collateral, which, in turn, could reduce our revenues and affect our ability to make distributions. 18


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    A property can also be adversely affected either through physical contamination or by virtue of an adverse effect upon value attributable to the migration of hazardous or toxic substances, or other contaminants that have or may have emanated from other properties. Although our tenants are primarily responsible for any environmental damages and claims related to the leased premises, in the event of the bankruptcy or inability of any of our tenants to satisfy any obligations with respect to the property leased to that tenant, we may be required to satisfy such obligations. In addition, we may be held directly liable for any such damages or claims irrespective of the provisions of any lease. From time to time, in connection with the conduct of our business, and prior to the acquisition of any property from a third party or as required by our financing sources, we authorize the preparation of Phase I environmental reports and, when necessary, Phase II environmental reports, with respect to our properties. Based upon these environmental reports and our ongoing review of our properties, we are currently not aware of any environmental condition with respect to any of our properties that we believe would be reasonably likely to have a material adverse effect on us. There can be no assurance, however, that the environmental reports will reveal all environmental conditions at our properties or that the following will not expose us to material liability in the future: • The discovery of previously unknown environmental conditions; • Changes in law; • Activities of tenants; and • Activities relating to properties in the vicinity of our properties. Changes in laws increasing the potential liability for environmental conditions existing on properties or increasing the restrictions on discharges or other conditions may result in significant unanticipated expenditures or may otherwise adversely affect the operations of our tenants, which could adversely affect our financial condition, cash flows and results of operations. Uninsured losses or a loss in excess of insured limits could adversely affect our financial condition, cash flows and results of operations. We carry comprehensive general liability, all-risk property, extended coverage, loss of rent insurance, and environmental liability on our properties, with policy specifications and insured limits customarily carried for similar properties. However, with respect to those properties where the leases do not provide for abatement of rent under any circumstances, we maintain a minimum of twelve months loss of rent insurance. In addition, there are certain types of losses, such as losses resulting from wars, terrorism or acts of God that generally are not insured because they are either uninsurable or not economically insurable. Should an uninsured loss or a loss in excess of insured limits occur, we could lose capital invested in a property, as well as the anticipated future revenues from a property, while remaining obligated for any mortgage indebtedness or other financial obligations related to the property. Any loss of these types could adversely affect our financial condition, cash flows and results of operations. Future terrorist attacks or civil unrest could harm the demand for, and the value of, our properties. Over the past several years, a number of highly publicized terrorist acts and shootings have occurred at domestic and international retail properties. Future terrorist attacks, civil unrest and other acts of terrorism or war could harm the demand for, and the value of, our properties. Terrorist attacks could directly impact the value of our properties through damage, destruction, loss or increased security costs, and the availability of insurance for such acts may be limited or may be subject to substantial cost increases. To the extent that our tenants are impacted by future attacks, their ability to continue to honor obligations under their existing leases could be adversely affected. A decrease in retail demand could make it difficult for us to renew or re-lease our properties at lease rates equal to or above historical rates. These acts might erode business and consumer confidence and spending, and might result in increased volatility in national and international financial markets and economies. Any one of these events might decrease demand for real estate, decrease or delay the occupancy of our properties, and limit our access to capital or increase our cost of raising capital. We may from time to time be subject to litigation that could negatively impact our financial condition, cash flows, results of operations and the trading price of our Common Shares. We may from time to time be a defendant in lawsuits and regulatory proceedings relating to our business. Such litigation and proceedings may result in defense costs, settlements, fines or judgments against us, some of which may not be covered by insurance. Due to the inherent uncertainties of litigation and regulatory proceedings, we cannot accurately predict the ultimate outcome of any such litigation or proceedings. An unfavorable outcome may result in our having to pay significant fines, judgments or settlements, which, if uninsured, or if exceeding insurance coverage, could adversely impact our financial condition, cash flows, results of operations and the trading price of our Common Shares. Additionally, certain proceedings or the resolution of certain proceedings may affect the availability or cost of some of our insurance coverage and expose us to increased risks that would be uninsured. See Item 3 included in this Report and notes to the financial statements of our quarterly reports, for pending litigation, if any. Compliance with the Americans with Disabilities Act and fire, safety and other regulations may require us to make unplanned expenditures that could adversely affect our financial condition, cash flows and results of operations. All of our properties are required to comply with the Americans with Disabilities Act (the “ADA”). The ADA has separate compliance requirements for “public accommodations” and “commercial facilities,” but generally requires that buildings be made accessible to people with 19


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    disabilities. Compliance with the ADA requirements could require removal of access barriers, and non-compliance could result in imposition of fines by the U.S. government or an award of damages to private litigants, or both. While the tenants to whom we lease properties are obligated by law to comply with applicable ADA provisions, and are typically obligated to cover costs of compliance, if required changes involve greater expenditures than anticipated, or if the changes must be made on a more accelerated basis than anticipated, the ability of these tenants to cover costs could be adversely affected. As a result of the foregoing or if a tenant is not obligated to cover the cost of compliance, we could be required to expend funds to comply with the provisions of the ADA, which could adversely affect our financial condition, cash flows and results of operations. In addition, we are required to operate our properties in compliance with fire and safety regulations, building codes and other land use regulations, as they may be adopted by governmental agencies and bodies and become applicable to the properties. We may be required to make substantial capital expenditures to comply with those requirements, and these expenditures could also adversely affect our financial condition, cash flows and results of operations. RISKS RELATED TO OUR REIT STATUS There can be no assurance we have qualified or will remain qualified as a REIT for Federal income tax purposes. We believe that we have consistently met the requirements for qualification as a REIT for Federal income tax purposes beginning with our taxable year ended December 31, 1993, and we intend to continue to meet these requirements in the future. However, qualification as a REIT involves the application of highly technical and complex provisions of the Internal Revenue Code, for which there may be only limited judicial or administrative interpretations. No assurance can be given that we have qualified or will remain qualified as a REIT. The Internal Revenue Code provisions and income tax regulations applicable to REITs differ significantly from those applicable to other entities. The determination of various factual matters and circumstances not entirely within our control can potentially affect our ability to continue to qualify as a REIT. In addition, no assurance can be given that future legislation, regulations, administrative interpretations or court decisions will not significantly change the requirements for qualification as a REIT or adversely affect the Federal income tax consequences of such qualification. Under current law, if we fail to qualify as a REIT, we would not be allowed a deduction for dividends paid to shareholders in computing our net taxable income. In addition, our income would be subject to tax at the regular corporate rates. Also, we could be disqualified from treatment as a REIT for the four taxable years following the year during which qualification was lost. Cash available for distribution to our shareholders would be significantly reduced for each year in which we do not qualify as a REIT. In that event, we would not be required to continue to make distributions. Although we currently intend to continue to qualify as a REIT, it is possible that future economic, market, legal, tax or other considerations may cause us, without the consent of our shareholders, to revoke the REIT election or to otherwise take action that would result in disqualification. Legislative or regulatory tax changes could have an adverse effect on us. There are a number of issues associated with an investment in a REIT that are related to the Federal income tax laws, including, but not limited to, the consequences of our failing to continue to qualify as a REIT. At any time, the Federal income tax laws governing REITs or the administrative interpretations of those laws may be amended or modified. Any new laws or interpretations may take effect retroactively and could adversely affect us or our shareholders. On December 22, 2017, Pub. L. No. 115-97 (informally known as the Tax Cuts and Jobs Act (the “Act”)) was enacted into law. The Act made major changes to the Code, including a number of provisions of the Code that affect the taxation of REITs and their shareholders. The long- term effect of the significant changes made by the Act remains uncertain, and additional administrative guidance will be required in order to fully evaluate the effect of many provisions. The effect of any technical corrections with respect to the Act could have an adverse effect on use or our shareholders or holders of our debt securities. We may be required to borrow funds or sell assets to satisfy our REIT distribution requirements. Our cash flows may be insufficient to fund distributions required to maintain our qualification as a REIT as a result of differences in timing between the actual receipt of income and the recognition of income for U.S. Federal income tax purposes, or as a result of our inability to currently deduct certain expenditures that we must currently pay, such as capital expenditures, payments of compensation for which Section 162(m) of the Code denies a deduction, any business interest expense that is disallowed under Section 163 (j) of the Code (unless we elect to be an “electing real property trade or business”), the creation of reserves or required amortization payments. If we do not have other funds available in these situations, we may need to borrow funds on a short-term basis or sell assets, even if the then- prevailing market conditions are not favorable for these borrowings or sales, in order to satisfy our REIT distribution requirements. Such actions could adversely affect our cash flow and results of operations. Dividends payable by REITs generally do not qualify for reduced tax rates. Certain qualified dividends paid by corporations to individuals, trusts and estates that are U.S. shareholders are taxed at capital gain rates, which are lower than ordinary income rates. Dividends of current and accumulated earnings and profits payable by REITs, however, are taxed at ordinary income rates as opposed to the capital gain rates. Pursuant to the Act, from 2018 through 2025, certain REIT shareholders will be permitted to deduct 20% of ordinary REIT dividends received. Dividends payable by REITs in excess of these earnings and profits generally are treated as a non-taxable reduction of the shareholders’ basis in the shares to the extent thereof and thereafter as taxable gain. The more favorable rates applicable to regular corporate dividends could cause investors who are individuals, trusts and estates to perceive investments in 20


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    REITs, including us, to be relatively less attractive than investments in the stock of non-REIT corporations that pay dividends, which may negatively impact the trading prices of our securities. Complying with REIT requirements may cause us to forego otherwise attractive opportunities or liquidate otherwise attractive investments. To qualify as a REIT, we must continually satisfy tests concerning, among other things, the sources of our income, the nature and diversification of our assets, the amounts we distribute to our shareholders and the ownership of our Common Shares. In order to meet these tests, we may be required to forego investments we might otherwise make and refrain from engaging in certain activities. Thus, compliance with the REIT requirements may hinder our performance. In addition, if we fail to comply with certain asset ownership tests at the end of any calendar quarter, we must correct the failure within 30 days after the end of the calendar quarter or qualify for certain statutory relief provisions to avoid losing our REIT qualification. As a result, we may be required to liquidate otherwise attractive investments. We have limits on ownership of our shares of beneficial interest. For us to qualify as a REIT for Federal income tax purposes, among other requirements, not more than 50% of the value of our shares of beneficial interest may be owned, directly or indirectly, by five or fewer individuals (as defined in the Internal Revenue Code to include certain entities) at any time during the last half of each taxable year, and such shares of beneficial interest must be beneficially owned by 100 or more persons during at least 335 days of a taxable year of 12 months or during a proportionate part of a shorter taxable year (in each case, other than the first such year). Our Declaration of Trust includes certain restrictions regarding transfers of our shares of beneficial interest and ownership limits that are intended to assist us in satisfying these limitations, among other purposes. These restrictions and limits may not be adequate in all cases, however, to prevent the transfer of our shares of beneficial interest in violation of the ownership limitations. The ownership limits contained in our Declaration of Trust may have the effect of delaying, deferring or preventing a change of control of us. Actual or constructive ownership of our shares of beneficial interest in excess of the share ownership limits contained in our Declaration of Trust would cause the violative transfer or ownership to be null and void from the beginning and subject to purchase by us at a price equal to the fair market value of such shares (determined in accordance with the rules set forth in our Declaration of Trust). As a result, if a violative transfer were made, the recipient of the shares would not acquire any economic or voting rights attributable to the transferred shares. Additionally, the constructive ownership rules for these limits are complex and groups of related individuals or entities may be deemed a single owner and consequently in violation of the share ownership limits. ITEM 1B. UNRESOLVED STAFF COMMENTS. None. ITEM 2. PROPERTIES. Retail Properties The discussion and tables in this Item 2. include wholly-owned and partially-owned properties held through our Core Portfolio and our Funds. We define our Core Portfolio as those properties either 100% owned by, or partially owned through joint venture interests by the Operating Partnership or subsidiaries thereof, not including those properties owned through our Funds. As of December 31, 2019, there are 123 operating properties in our Core Portfolio totaling approximately 5.6 million square feet of gross leasable area (“GLA”) excluding four properties under redevelopment, one property in development and one pre-stabilized property. The Core Portfolio properties are located in 12 states and the District of Columbia and primarily consist of street retail and dense suburban shopping centers. These properties are diverse in size, ranging from approximately 1,000 to 800,000 square feet and as of December 31, 2019, were in total, excluding the properties that were pre-stabilized or under redevelopment, 93.4% occupied. As of December 31, 2019, we owned and operated 53 properties totaling approximately 7.5 million square feet of GLA in our Funds, excluding four properties under development. In addition to shopping centers, the Funds have invested in mixed-use properties, which generally include retail activities. The Fund properties are located in 17 states and the District of Columbia and, as of December 31, 2019, were in total, excluding the properties under development, 88.6% occupied. Within our Core Portfolio and Funds, we had approximately 1,100 retail leases as of December 31, 2019. A significant portion of our rental revenues were from national retailers and consist of rents received under long-term leases. These leases generally provide for the monthly payment of fixed minimum rent and the tenants' pro-rata share of the real estate taxes, insurance, utilities and common area maintenance of the shopping centers. An insignificant portion of our leases also provide for the payment of rent based on a percentage of a tenant's gross sales in 21


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    excess of a stipulated annual amount, either in addition to, or in place of, minimum rents. Minimum rents and expense reimbursements accounted for substantially all of our total revenues for the year ended December 31, 2019. Six of our Core Portfolio properties and three of our Fund properties are subject to long-term ground leases in which a third party owns and has leased the underlying land to us. We pay rent for the use of the land and are responsible for all costs and expenses associated with the building and improvements at all of these locations. No individual property contributed in excess of 10% of our total revenues for the years ended December 31, 2019, 2018 or 2017. See Note 7 in the Notes to Consolidated Financial Statements, for information on the mortgage debt pertaining to our properties. 22


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    The following table sets forth more specific information with respect to each of our Core properties at December 31, 2019: Gross Leasable Annualized ABR/ Per Year Acadia's Area In Place Leased Base Square Property (a) Key Tenants Acquired Interest (GLA) Occupancy Occupancy Rent (ABR) Foot STREET AND URBAN RETAIL Chicago Metro 664 N. Michigan Avenue Tommy Bahama, 2013 Ann Taylor Loft 100.0% 18,141 100.0% 100.0% $ 4,845,848 $ 267.12 840 N. Michigan Avenue H & M, Verizon 2014 Wireless 88.4% 87,135 100.0% 100.0% 8,313,164 95.41 Rush and Walton Streets Lululemon, BHLDN, 2011 Collection (6 properties) Reformation, 2012 Sprinkles 100.0% 40,210 81.4% 81.4% 5,209,839 159.23 651-671 West Diversey Trader Joe's, 2011 Urban Outfitters 100.0% 46,259 100.0% 100.0% 2,037,056 44.04 Clark Street and W. Diversey Ann Taylor, 2011 Collection (3 properties) Starbucks 2012 100.0% 23,531 50.1% 50.1% 697,459 59.10 Halsted and Armitage Serena and Lily, 2011 Collection (12 properties) Bonobos, Allbirds 2012 Warby Parker, 2019 Marine Layer, Kiehl's 100.0% 51,104 100.0% 100.0% 2,373,945 46.45 North Lincoln Park Chicago Champion, 2011 Collection (6 properties) Carhartt 2014 100.0% 49,921 46.8% 46.8% 822,286 35.18 State and Washington Nordstrom Rack, 2016 Uniqlo 100.0% 78,771 100.0% 100.0% 3,309,875 42.02 151 N. State Street Walgreens 2016 100.0% 27,385 100.0% 100.0% 1,430,000 52.22 North and Kingsbury Old Navy, 2016 Pier 1 Imports 100.0% 41,700 100.0% 100.0% 1,759,227 42.19 Concord and Milwaukee — 2016 100.0% 13,105 100.0% 100.0% 425,203 32.45 California and Armitage — 2016 100.0% 18,275 70.6% 70.6% 621,266 48.19 Roosevelt Galleria Petco, Vitamin 2015 Shoppe 100.0% 37,995 47.7% 47.7% 604,179 33.33 Sullivan Center Target, DSW 2016 100.0% 176,181 98.6% 98.6% 6,854,811 39.45 709,713 89.7% 90.8% $ 39,304,158 $ 61.77 New York Metro Soho Collection Paper Source, 2011 (10 properties) Faherty, ALC 2014 Stone Island, Taft, 2019 Frame, Theory 100.0% 33,553 78.6% 89.9% 8,992,661 341.03 5-7 East 17th Street Union Park Events 2008 100.0% 11,467 100.0% 100.0% 1,300,014 113.37 200 West 54th Street Stage Coach Tavern 2007 100.0% 5,777 77.8% 77.8% 1,921,520 427.29 61 Main Street — 2014 100.0% 3,470 —% 100.0% — — 181 Main Street TD Bank 2012 100.0% 11,350 100.0% 100.0% 968,387 85.32 4401 White Plains Road Walgreens 2011 100.0% 12,964 100.0% 100.0% 625,000 48.21 Bartow Avenue — 2005 100.0% 14,590 66.6% 66.6% 324,007 33.33 239 Greenwich Avenue Betteridge Jewelers 1998 75.0% 16,553 100.0% 100.0% 1,641,124 99.14 252-256 Greenwich Avenue Madewell, 2014 Jack Wills, Blue Mercury 100.0% 7,986 100.0% 100.0% 1,350,370 169.09 2914 Third Avenue Planet Fitness 2006 100.0% 40,320 100.0% 100.0% 985,972 24.45 868 Broadway Dr. Martens 2013 100.0% 2,031 100.0% 100.0% 790,705 389.32 313-315 Bowery (b) John Varvatos, 2013 Patagonia 100.0% 6,600 100.0% 100.0% 479,160 72.60 120 West Broadway HSBC Bank 2013 100.0% 13,838 79.8% 100.0% 1,971,384 178.59 23


  • Page 29

    Gross Leasable Annualized ABR/ Per Year Acadia's Area In Place Leased Base Square Property (a) Key Tenants Acquired Interest (GLA) Occupancy Occupancy Rent (ABR) Foot 2520 Flatbush Avenue Bob's Disc. Furniture, 2014 Capital One 100.0% 29,114 100.0% 100.0% 1,163,976 39.98 991 Madison Avenue Vera Wang, 2016 Gabriella Hearst 100.0% 7,513 100.0% 100.0% 3,046,736 405.53 Shops at Grand Stop & Shop (Ahold) 2014 100.0% 99,685 100.0% 100.0% 3,332,491 33.43 Gotham Plaza Bank of America, 2016 Footlocker 49.0% 25,927 58.6% 58.6% 1,067,395 70.25 342,738 91.1% 94.1% 29,960,902 95.90 San Francisco Metro 555 9th Street Bed, Bath & 2016 Beyond, Nordstrom Rack 100.0% 148,832 100.0% 100.0% 6,219,355 41.79 148,832 100.0% 100.0% 6,219,355 41.79 Los Angeles Metro Melrose Place Collection The Row, Chloe, 2019 Oscar de la Renta 100.0% 14,000 100.0% 100.0% 2,365,606 168.97 14,000 100.0% 100.0% 2,365,606 168.97 District of Columbia Metro 1739-53 & 1801-03 Ruth Chris Steak- 2012 Connecticut Avenue house, TD Bank 100.0% 20,669 100.0% 100.0% 1,359,986 65.80 Rhode Island Place Ross Dress for Less 2012 Shopping Center 100.0% 57,667 89.1% 93.4% 1,605,057 31.24 M Street and Wisconsin Lululemon, 2011 Corridor Sephora, The 2016 (26 Properties) (c) Reformation 2019 24.9% 244,709 90.8% 94.2% 16,463,715 74.08 323,045 91.1% 94.4% 19,428,758 66.01 Boston Metro 330-340 River Street Whole Foods 2012 100.0% 54,226 100.0% 100.0% 1,243,517 22.93 165 Newbury Street Starbucks 2016 100.0% 1,050 100.0% 100.0% 277,719 264.49 55,276 100.0% 100.0% 1,521,236 27.52 Total Street and Urban Retail 1,593,604 91.7% 93.5% $ 98,800,015 $ 67.62 Acadia Share Total Street and Urban Retail 1,382,320 92.1% 93.7% $ 84,810,177 $ 66.64 SUBURBAN PROPERTIES New Jersey Marketplace of Absecon Rite Aid, Dollar Tree 1998 100.0% 104,556 84.1% 84.1% $ 1,372,830 $ 15.61 60 Orange Street Home Depot 2012 98.0% 101,715 100.0% 100.0% 730,000 7.18 New York Village Commons — 1998 Shopping Center 100.0% 87,128 98.1% 98.1% 2,795,940 32.72 Branch Plaza LA Fitness, 1998 The Fresh Market 100.0% 123,345 94.2% 94.2% 3,176,630 27.34 Amboy Center Stop & Shop (Ahold) 2005 100.0% 63,290 80.9% 89.9% 1,683,453 32.89 LA Fitness LA Fitness 2007 100.0% 55,000 100.0% 100.0% 1,485,287 27.01 24


  • Page 30

    Gross Leasable Annualized ABR/ Per Year Acadia's Area In Place Leased Base Square Property (a) Key Tenants Acquired Interest (GLA) Occupancy Occupancy Rent (ABR) Foot Crossroads Shopping Center HomeGoods,Pet- 1998 Smart, Kmart 49.0% 311,904 91.8% 91.8% 7,089,909 24.77 New Loudon Center Price Chopper, 1993 Marshalls 100.0% 255,673 100.0% 100.0% 2,188,447 8.56 28 Jericho Turnpike Kohl's 2012 100.0% 96,363 100.0% 100.0% 1,815,000 18.84 Bedford Green Shop Rite, CVS 2014 100.0% 90,589 83.0% 83.0% 2,476,876 32.95 Connecticut Town Line Plaza (d) Wal-Mart, Stop 1998 & Shop (Ahold) 100.0% 206,346 98.7% 98.7% 1,827,704 16.99 Massachusetts Methuen Shopping Center Wal-Mart, 1998 Market Basket 100.0% 130,021 100.0% 100.0% 1,360,858 10.47 Crescent Plaza Home Depot, Shaw's 1993 (Supervalu) 100.0% 218,148 90.9% 90.9% 1,905,550 9.60 201 Needham Street Michael's 2014 100.0% 20,409 100.0% 100.0% 646,965 31.70 163 Highland Avenue Staples, Petco 2015 100.0% 40,505 100.0% 100.0% 1,311,747 32.38 Vermont The Gateway Shopping Center Shaw's (Supervalu) 1999 100.0% 101,474 98.4% 100.0% 2,147,052 21.50 Illinois Hobson West Plaza Garden Fresh 1998 Markets 100.0% 98,950 83.3% 96.4% 830,409 10.07 Indiana Merrillville Plaza Jo-Ann Fabrics, 1998 TJ Maxx 100.0% 236,087 90.0% 90.5% 3,168,339 14.91 Michigan Bloomfield Town Square Best Buy, 1998 HomeGoods, TJ Maxx 100.0% 235,022 96.4% 96.4% 3,745,862 16.53 Delaware Town Center and Other Lowes, Bed Bath & 2003 (2 properties) Beyond, Target 65.1% 800,018 91.3% 91.3% 12,642,074 17.32 Market Square Shopping Center Trader Joe's, 2003 TJ Maxx 100.0% 102,047 97.4% 97.4% 3,022,011 30.41 Naamans Road — 2006 100.0% 19,850 30.1% 30.1% 433,785 72.60 Pennsylvania Mark Plaza Kmart 1993 100.0% 106,856 100.0% 100.0% 244,279 2.29 Plaza 422 Home Depot 1993 100.0% 156,279 100.0% 100.0% 894,880 5.73 Chestnut Hill — 2006 100.0% 37,646 100.0% 100.0% 988,897 26.27 Abington Towne Center (e) Target, TJ Maxx 1998 100.0% 216,871 100.0% 100.0% 1,225,915 20.69 25


  • Page 31

    Gross Leasable Annualized ABR/ Per Year Acadia's Area In Place Leased Base Square Property (a) Key Tenants Acquired Interest (GLA) Occupancy Occupancy Rent (ABR) Foot Total Suburban Properties 4,016,092 94.1% 94.6% $ 61,210,699 $ 17.30 Acadia Share Total Suburban Properties 3,606,052 94.7% 95.3% $ 53,931,537 $ 17.00 Total Core Properties 5,609,696 93.4% 94.3% $ 160,010,714 $ 31.99 Acadia Share Total Core Properties 4,988,372 94.0% 94.8% $ 138,741,714 $ 31.20 (a) Excludes properties under development, redevelopment or pre-stabilized, see “Development and Redevelopment Activities” section below. The above occupancy and rent amounts do not include space which is currently leased, other than “leased occupancy,” but for which rent payment has not yet commenced. Residential and office GLA are excluded. (b) Represents the annual base rent paid to Acadia pursuant to a master lessee and does not reflect the rent paid by the retail tenants at the property. (c) Excludes 94,000 square feet of office GLA. (d) Anchor GLA includes a 97,300 square foot Wal-Mart store which is not owned by the Company. This square footage has been excluded for calculating annualized base rent per square foot. (e) Anchor GLA includes a 157,616 square foot Target store which is not owned by the Company. This square footage has been excluded for calculating annualized base rent per square foot. 26


  • Page 32

    The following table sets forth more specific information with respect to each of our Fund properties at December 31, 2019: Gross Leasable Annualized ABR/Per Year Acadia's Area In Place Leased Base Square Property (a) Key Tenants Acquired Interest (GLA) Occupancy Occupancy Rent (ABR) Foot Fund II Portfolio Detail New York City Point - Phase I and II Century 21, Target, Alamo 2007 Drafthouse 26.7% 469,518 65.2% 86.2% $ 8,856,930 $ 28.91 Total - Fund II 469,518 65.2% 86.2% $ 8,856,930 $ 28.91 Fund III Portfolio Detail New York 654 Broadway ─ 2011 24.5% 2,896 100.0% 100.0% $ 455,000 $ 157.11 640 Broadway Swatch 2012 15.5% 4,637 73.1% 73.1% 942,161 277.91 Cortlandt Crossing ShopRite, HomeSense 2012 24.5% 127,849 76.5% 81.1% 2,632,143 26.92 Total - Fund III 135,382 76.9% 81.3% $ 4,029,304 $ 38.72 Fund IV Portfolio Detail New York 801 Madison Avenue ─ 2015 23.1% 2,522 —% —% $ — $ — 210 Bowery ─ 2012 23.1% 2,538 —% —% — — 27 East 61st Street ─ 2014 23.1% 4,177 —% —% — — 17 East 71st Street The Row 2014 23.1% 8,432 100.0% 100.0% 2,113,110 250.61 1035 Third Avenue (b) ─ 2015 23.1% 7,617 58.7% 58.7% 1,029,564 230.38 Colonie Plaza Price Chopper, Big Lots 2016 23.1% 153,483 94.9% 95.8% 1,662,817 11.41 New Jersey Paramus Plaza Ashley Furniture, Marshalls 2013 11.6% 153,060 72.9% 100.0% 2,103,780 18.86 Massachusetts Restaurants at Fort Point ─ 2016 23.1% 15,711 100.0% 100.0% 990,230 63.03 Maine Airport Mall Hannaford, Marshalls 2016 23.1% 221,830 68.6% 87.2% 1,027,139 6.75 Wells Plaza Reny's, Dollar Tree 2016 23.1% 90,434 98.3% 98.3% 737,326 8.29 Shaw's Plaza (Waterville) Shaw's 2016 23.1% 119,015 100.0% 100.0% 1,400,053 11.76 Shaw's Plaza (Windham) Shaw's 2017 23.1% 124,330 88.4% 88.4% 1,035,744 9.42 Pennsylvania Dauphin Plaza Price Rite, Ashley Furniture 2016 23.1% 206,206 91.1% 91.1% 1,732,892 9.23 Mayfair Shopping Center Planet Fitness, Dollar Tree 2016 23.1% 115,411 86.8% 97.4% 1,690,741 16.88 Rhode Island 650 Bald Hill Road Dick's Sporting Goods, 2015 Burlington Coat Factory 20.8% 160,448 85.3% 85.3% 1,978,902 14.45 Virginia Promenade at Manassas Home Depot 2013 22.8% 280,760 83.2% 98.6% 3,122,520 13.36 Delaware Eden Square Giant Food, LA Fitness 2014 22.8% 231,074 85.9% 85.9% 3,045,812 15.34 Illinois Lincoln Place Kohl's, Marshall's, Ross 2017 23.1% 272,060 99.6% 99.6% 3,315,314 12.23 Georgia Broughton Street Portfolio H&M, Lululemon, (13 properties) Michael Kors, Starbucks 2014 19.1% 100,676 83.7% 83.7% 3,152,794 37.40 North Carolina Wake Forest Crossing Lowe's, TJ Maxx 2016 23.1% 202,880 98.7% 99.3% 2,951,295 14.74 California Union and Fillmore Eileen Fisher, L'Occitane, Collection (3 properties) Bonobos 2015 20.8% 7,148 100.0% 100.0% 716,262 100.20 Total - Fund IV 2,479,812 87.7% 93.6% $ 33,806,295 $ 15.54 Fund V Portfolio Detail New Mexico Plaza Santa Fe TJ Maxx, Best Buy, Ross Dress for Less 2017 20.1% 224,223 99.4% 99.4% $ 3,952,239 $ 17.73 Michigan New Towne Plaza Kohl's, Jo-Ann's, DSW 2017 20.1% 193,446 94.0% 98.3% 2,125,496 11.69 Fairlane Green TJ Maxx, Michaels, 2017 Bed Bath & Beyond 20.1% 252,904 95.7% 95.7% 5,021,289 20.74 Maryland 27


  • Page 33

    Gross Leasable Annualized ABR/Per Year Acadia's Area In Place Leased Base Square Property (a) Key Tenants Acquired Interest (GLA) Occupancy Occupancy Rent (ABR) Foot Frederick County Acquisitions Kmart, Kohl's, Best Buy, 2019 Ross Dress for Less 18.1% 524,156 91.1% 97.9% 6,206,501 13.00 Connecticut Tri-City Plaza TJ Maxx, HomeGoods 2019 18.1% 300,067 56.7% 90.5% 2,726,231 16.04 Virginia Landstown Commons Best Buy, Bed Bath & Beyond, 2019 Ross Dress for Less 20.1% 404,808 96.3% 97.3% 7,917,849 20.31 Florida Palm Coast Landing TJ Maxx, PetSmart, 2019 Ross Dress for Less 20.1% 171,324 94.0% 94.0% 3,233,194 20.08 North Carolina Hickory Ridge Kohl's, Best Buy, Dick's 2017 20.1% 380,565 98.3% 98.3% 4,295,679 11.49 Rhode Island Lincoln Commons Stop and Shop, Marshalls, 2019 HomeGoods 20.1% 455,441 84.8% 84.8% 5,104,039 13.21 Alabama Trussville Promenade Wal-Mart, Regal Cinemas 2018 20.1% 463,725 95.9% 95.9% 4,471,270 10.06 Georgia Hiram Pavilion Kohl's, HomeGoods 2018 20.1% 362,675 98.6% 98.6% 4,228,143 11.82 California Elk Grove Commons Kohl's, HomeGoods 2018 20.1% 220,726 96.0% 96.0% 4,677,104 22.08 Utah Family Center at Riverdale Target, Gordman's, 2019 Sportman's Warehouse 18.0% 427,828 96.7% 96.7% 4,027,458 9.74 Total - Fund V 4,381,888 92.0% 95.5% $ 57,986,492 $ 14.38 TOTAL FUND PROPERTIES 7,466,600 88.6% 94.0% $104,679,021 $ 15.82 Acadia Share of Total Fund Properties 1,559,270 88.3% 93.7% $ 22,040,271 $ 16.00 (a) Excludes properties under development, see “Development and Redevelopment Activities” section below. The above occupancy and rent amounts do not include space which is currently leased, other than “leased occupancy,” but for which rent payment has not yet commenced. Residential and office GLA are excluded. (b) Property also includes 12,371 square feet of 2nd floor office space and a 29,760 square foot parking garage (131 spaces). 28


  • Page 34

    Major Tenants No individual retail tenant accounted for more than 5.1% of base rents for the year ended December 31, 2019, or occupied more than 6.9% of total leased GLA as of December 31, 2019. The following table sets forth certain information for the 20 largest retail tenants by base rent for leases in place as of December 31, 2019. The amounts below include our pro-rata share of GLA and annualized base rent for the Operating Partnership’s partial ownership interest in properties including the Funds (GLA and Annualized Base Rent in thousands): Percentage of Total Represented by Retail Tenant Number of Annualized Total Annualized Stores in Base Portfolio Base Retail Tenant Portfolio (a) Total GLA Rent (a) GLA Rent Target 5 454 $ 8,248 6.9% 5.1% H&M 2 56 5,039 0.9% 3.1% Walgreens (b) 7 98 4,204 1.5% 2.6% TJX Companies (c) 26 330 3,784 5.0% 2.4% Royal Ahold (d) 5 182 3,711 2.8% 2.3% Nordstrom, Inc. 2 89 3,515 1.4% 2.2% Bed, Bath, and Beyond (e) 6 137 3,371 2.1% 2.1% Ascena Retail Group (f) 12 28 2,735 0.4% 1.7% LA Fitness International LLC 3 108 2,680 1.6% 1.7% Trader Joe's 5 49 2,642 0.7% 1.6% Kohls 7 203 2,600 3.1% 1.6% Verizon 8 29 2,566 0.4% 1.6% Lululemon 3 8 2,431 0.1% 1.5% Gap (h) 8 61 2,327 0.9% 1.4% Albertsons Companies (g) 4 154 2,266 2.4% 1.4% Home Depot 4 337 2,193 5.1% 1.4% Ulta Salon Cosmetic & Fragrance 10 48 1,801 0.7% 1.1% Bob's Discount Furniture 2 58 1,629 0.9% 1.0% Tapestry (i) 2 4 1,552 0.1% 1.0% DSW 3 40 1,464 0.6% 0.9% Total 124 2,473 $ 60,758 37.8% 37.8% (a) Does not include tenants that operate at only one Acadia location (b) Walgreens (5 locations), Rite Aid (2 locations) (c) TJ Maxx (11 locations), Marshalls (8 locations), HomeGoods (6 locations), HomeSense (1 location) (d) Stop and Shop (4 locations), Giant (1 location) (e) Bed Bath and Beyond (4 locations), Christmas Tree Shops (1 location), Cost Plus (1 location) (f) Catherine’s (3 locations), Lane Bryant (4 locations), Ann Taylor Loft (1 location), Ann Taylor (1 location), Justice (2 locations), Maurices (1 location) (g) Shaw’s (4 locations) (h) Old Navy (6 locations), Banana Republic (1 location), Gap (1 location) (i) Kate Spade (2 locations) 29


  • Page 35

    Lease Expirations The following tables show scheduled lease expirations on a pro rata basis for retail tenants in place as of December 31, 2019, assuming that none of the tenants exercise renewal options (GLA and Annualized Base Rent in thousands): Core Portfolio Annualized Base Rent (a, b) GLA Current Number of Annual Percentage Square Percentage Leases Maturing in Leases Rent of Total Feet of Total Month to Month 6 $ 470 0.3% 13,994 0.3% 2020 33 5,546 4.0% 92,281 2.1% 2021 74 16,470 11.9% 758,396 17.1% 2022 53 13,288 9.6% 345,694 7.8% 2023 61 21,621 15.6% 666,307 15.0% 2024 56 15,043 10.8% 656,819 14.8% 2025 51 16,112 11.6% 486,153 11.0% 2026 33 7,134 5.1% 161,679 3.6% 2027 23 5,673 4.1% 127,084 2.9% 2028 41 18,502 13.3% 674,430 15.2% 2029 23 6,667 4.8% 157,652 3.6% Thereafter 27 12,216 8.9% 291,551 6.6% Total 481 $ 138,742 100.0% 4,432,040 100.0% Funds Annualized Base Rent (a, b) GLA Current Number of Annual Percentage Square Percentage Leases Maturing in Leases Rent of Total Feet of Total Month to Month 16 $ 164 0.7% 13 0.9% 2020 68 1,522 6.9% 88 6.4% 2021 94 2,325 10.5% 147 10.7% 2022 84 2,321 10.5% 152 11.1% 2023 79 2,133 9.7% 155 11.2% 2024 71 2,182 9.9% 144 10.5% 2025 54 2,503 11.4% 185 13.4% 2026 43 1,238 5.6% 61 4.4% 2027 19 546 2.5% 51 3.7% 2028 28 1,248 5.7% 57 4.1% 2029 32 1,894 8.6% 116 8.4% Thereafter 33 3,965 18.0% 208 15.2% Total 621 $ 22,041 100.0% 1,377 100.0% (a) Base rents do not include percentage rents, additional rents for property expense reimbursements, nor contractual rent escalations. (b) No single market, except as discussed below under Geographic Concentrations, represents a material amount of exposure to the Company as it relates to the rents from these leases. Given the diversity of these markets, properties and characteristics of the individual spaces, the Company cannot make any general representations as it relates to the expiring rents and the rates for which these spaces may be re-leased. 30


  • Page 36

    Geographic Concentrations The following table summarizes our operating retail properties by region, excluding redevelopment and pre-stabilization properties, as of December 31, 2019. The amounts below include our pro-rata share of GLA and annualized base rent for the Operating Partnership’s partial ownership interest in properties, including the Funds (GLA and Annualized Base Rent in thousands): Percentage of Total Represented by Region Annualized Base Rent per Annualized Occupied % Occupied Base Square Foot Annualized Region GLA (a,c) (b) Rent (b, c) (c) GLA Base Rent Core Portfolio: New York Metro 1,454 93.8% $ 50,190 $ 36.81 29.1% 36.2% Mid-Atlantic 1,191 95.5% 15,803 16.02 23.9% 11.4% New England 772 96.9% 10,721 16.40 15.5% 7.7% Chicago Metro 700 89.5% 38,340 61.23 14.0% 27.6% Midwest 570 91.5% 7,745 14.85 11.4% 5.6% San Francisco Metro 149 100.0% 6,219 41.79 3.0% 4.5% Washington D.C. Metro 139 91.8% 7,358 57.55 2.8% 5.3% Los Angeles Metro 14 100.0% 2,366 168.97 0.3% 1.7% Total Core Operating Properties 4,989 94.0% $ 138,742 $ 31.20 100.0% 100.0% Fund Portfolio: Southeast 425 96.3% $ 6,158 $ 15.06 27.3% 27.9% Northeast 480 83.7% 5,044 12.55 30.7% 22.9% New York Metro 217 72.1% 4,621 29.52 13.9% 21.0% West 121 96.4% 1,665 14.23 7.8% 7.6% Mid-Atlantic 117 84.4% 1,406 14.27 7.5% 6.4% Midwest 90 95.0% 1,437 16.86 5.8% 6.5% Chicago Metro 63 99.6% 766 12.23 4.0% 3.5% Southwest 45 99.4% 794 17.73 2.9% 3.6% San Francisco Metro 1 100.0% 149 100.20 0.1% 0.6% Total Fund Operating Properties 1,559 88.3% $ 22,040 $ 16.00 100.0% 100.0% (a) Property GLA includes a total of 255,000 square feet, which is not owned by us. This square footage has been excluded for calculating annualized base rent per square foot. (b) The above occupancy and rent amounts do not include space that is currently leased, but for which payment of rent had not commenced as of December 31, 2019. (c) The amounts presented reflect the Operating Partnership's pro-rata shares of properties included within each region. 31


  • Page 37

    Development and Redevelopment Activities As part of our strategy, we invest in retail real estate assets that may require significant development. As of December 31, 2019, we had six development or redevelopment projects in various stages of the development process. Square Feet Ownership Estimated Upon Leased Key Outstanding Incurred Estimated Future Estimated Total Property (a) Location Stabilization Completion Rate Tenants Debt (b) Range Range Development: CORE 1238 Wisconsin 100.0 % Washington DC 2022 29,000 —% TBD $ — $ 1.3 $31.3 to $32.7 $ 32.6 to $ 34.0 FUND II City Point Phase III 94.2 % Brooklyn, NY 2021 63,000 —% TBD 24.2 10.0 52.0 to 55.0 62.0 to 65.0 FUND III Broad Hollow Commons 100.0 % Farmingdale, NY 2021 180,000 - 200,000 —% TBD — 17.9 32.1 to 42.1 50.0 to 60.0 FUND IV 110 University Place 100.0 % New York, NY 2022 46,000 —% TBD — 14.2 6.4 to 10.8 20.6 to 25.0 146 Geary 100.0 % San Francisco, CA 2022 13,000 —% TBD 22.9 42.6 17.4 to 22.4 60.0 to 65.0 717 N. Michigan Avenue 100.0 % Chicago, IL 2020 62,000 30.0 % Disney Store 56.7 110.0 10.0 to 17.5 120.0 to 127.5 Major Redevelopment: CORE City Center 100.0 % San Francisco, CA 2021 241,000 90.0 % Target — 190.2 4.8 to 10.8 195.0 to 201.0 Elmwood Park 100.0 % Elmwood Park, NJ 2021 144,000 100.0 % Walgreens — — TBD to TBD TBD to TBD Route 6 Mall 100.0 % Honesdale, PA TBD TBD 100.0 % TBD — — TBD to TBD TBD to TBD Mad River 100.0 % Dayton, OH TBD TBD 50.0 % TBD — — TBD to TBD TBD to TBD Pre-Stabilized: CORE 613-623 West TJ Maxx, Blue Diversey 100.0 % Chicago, IL 2020 29,778 76.1 % Mercury — FUND II City Point, Phase I and Century 21, Target, II 94.2 % New York, NY 2020 475,000 86.2 % Alamo Drafthouse 259.1 FUND III Cortlandt Crossing 100.0 % Mohegan Lake, NY 2020 125,906 81.1 % ShopRite, HomeSense 35.1 640 Broadway 63.1 % New York, NY 2020 4,637 73.1 % Swatch 39.5 FUND IV Ashley Furniture, Paramus Plaza 50.0 % Paramus, NJ 2020 150,660 100.0 % Marshalls 18.9 210 Bowery 100.0 % New York, NY 2020 2,538 —% ─ — 801 Madison 100.0 % New York, NY 2020 2,625 —% ─ — 27 E 61st Street 100.0 % New York, NY 2020 4,177 —% ─ — 1035 Third Avenue 100.0 % New York, NY 2020 7,617 58.7 % ─ — $ 352.6 (a) Ownership percentage represents the Core or Fund level ownership and not Acadia’s pro rata share. (b) Incurred amounts include costs associated with the initial carrying value. ITEM 3. LEGAL PROCEEDINGS. As previously disclosed in our periodic findings, Acadia Brandywine Holdings, LLC (“Brandywine Holdings”), a consolidated entity in which we have a 22.22% interest, is a party to litigation in connection with a mortgage loan collateralized by a Core Portfolio property held by it (the “Brandywine Loan”), which has been in default since July 1, 2016. The Brandywine Loan was originated in June 2006 and had an original principal amount of $26.3 million and a scheduled maturity of July 1, 2016. The Brandywine Loan bears interest at a stated rate of approximately 6% and is subject to additional default interest of 5%. In April 2017, the successor to the original lender, Wilmington – 5190 Brandywine Parkway, LLC (the “Successor Lender”), initiated lawsuits against Brandywine Holdings in Delaware Superior Court and Delaware Chancery Court for, among other things, judgment on the note (the “Note Complaint”) and foreclosure on the property. In a contemporaneously filed action in Delaware Superior Court (the “Guaranty Complaint”), the Successor Lender initiated a lawsuit against the 32


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    Operating Partnership as guarantor of certain guaranteed obligations of Brandywine Holdings set forth in a non-recourse carve-out guaranty executed by the Operating Partnership. The Guaranty Complaint alleges that the Operating Partnership is liable for the full balance of the principal, accrued interest, default interest, as well as fees and costs, under the Brandywine Loan, which the Successor Lender alleges totaled approximately $33.0 million as of November 9, 2017 (exclusive of accruing interest, default interest, and fees and costs). In August 2019, the Delaware Superior Court heard arguments on the parties’ cross-motions for summary judgement regarding both the Guaranty Complaint and the Note Complaint. On February 7, 2020, the Delaware Superior Court granted in part the Successor Lender’s motion and denied Brandywine Holdings’ and the Operating Partnership’s cross-motion, for summary judgment, finding that each of Brandywine Holdings and the Operating Partnership have recourse liability for the outstanding balance of the Brandywine Loan. The Delaware Superior Court’s decision will be appealable when a judgement is formally entered. Brandywine Holdings and the Operating Partnership intend to appeal the ruling as soon as it becomes appealable and to vigorously contest it. In addition, 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 4. MINE SAFETY DISCLOSURES. Not applicable. 33


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    PART II ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES AND PERFORMANCE GRAPH. Market Information, Dividends and Holders of Record of our Common Shares At February 12, 2020, there were 255 holders of record of our Common Shares, which are traded on the New York Stock Exchange under the symbol “AKR.” Our quarterly dividends declared are discussed in Note 10 and the characterization of such dividends for Federal Income Tax purposes is discussed in Note 14. Securities Authorized for Issuance Under Equity Compensation Plans At the 2016 annual shareholders’ meeting, the shareholders' approved the Second Amended and Restated 2006 Incentive Plan (the “Second Amended 2006 Plan”). This plan replaced all previous share incentive plans and increased the authorization to issue options, Restricted Shares and LTIP Units (collectively “Awards”) available to officers and employees by 1.6 million shares, for a total of 3.7 million shares available to be issued. See Note 13 in the Notes to Consolidated Financial Statements, for a summary of our Share Incentive Plans. The following table provides information related to the Second Amended 2006 Plan as of December 31, 2019: Equity Compensation Plan Information (a) (b) (c) Number of securities remaining Number of available for securities to future issuance be issued upon under equity exercise of Weighted-average compensation outstanding exercise price plans (excluding options, of outstanding securities warrants and options, warrants reflected in rights and rights column (a)) Equity compensation plans approved by security holders — $ — 708,632 Equity compensation plans not approved by security holders — — — Total — $ — 708,632 Remaining Common Shares available under the Amended 2006 Plan are as follows: Outstanding Common Shares as of December 31, 2019 87,050,465 Outstanding OP Units as of December 31, 2019 5,013,507 Total Outstanding Common Shares and OP Units 92,063,972 Common Shares and OP Units pursuant to the Second Amended 2006 Plan 8,893,681 Total Common Shares available under equity compensation plans 8,893,681 Less: Issuance of Restricted Shares and LTIP Units Granted (5,413,276) Issuance of Options Granted (2,771,773) Number of Common Shares remaining available 708,632 34


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    Share Price Performance The following graph compares the cumulative total shareholder return for our Common Shares for the period commencing December 31, 2014, through December 31, 2019, with the cumulative total return on the Russell 2000 Index (“Russell 2000”), the NAREIT All Equity REIT Index (the “NAREIT”) and the SNL Shopping Center REITs (the “SNL”) over the same period. Total return values for the Russell 2000, the NAREIT, the SNL and the Common Shares were calculated based upon cumulative total return assuming the investment of $100.00 in each of the Russell 2000, the NAREIT, the SNL and our Common Shares on December 31, 2014, and assuming reinvestment of dividends. The shareholder return as set forth in the table below is not necessarily indicative of future performance. The information in this section is not “soliciting material,” is not deemed “filed” with the SEC, and is not to be incorporated by reference into any of our filings under the Securities Act or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language contained in such filing. At December 31, Index 2014 2015 2016 2017 2018 2019 Acadia Realty Trust $ 100.00 $ 107.51 $ 109.70 $ 95.30 $ 86.34 $ 98.24 Russell 2000 100.00 95.59 115.95 132.94 118.30 148.49 NAREIT All Equity REIT Index 100.00 102.83 111.70 121.39 116.48 149.86 SNL REIT Retail Shopping Ctr Index 100.00 105.35 109.02 96.94 81.36 103.18 Recent Sales of Unregistered Securities; Use of Proceeds from Registered Securities None. Issuer Purchases of Equity Securities During 2018, the Company revised its share repurchase program. The new share repurchase program authorizes management, at its discretion, to repurchase up to $200.0 million of its outstanding Common Shares. The program may be discontinued or extended at any time. The Company repurchased 2,294,235 shares for $55.1 million, inclusive of $0.1 million of fees, during the year ended December 31, 2018. The Company did not repurchase any shares during the years ended December 31, 2019 or 2017. As of December 31, 2019, management may repurchase up to approximately $145.0 million of the Company’s outstanding Common Shares under this program. 35


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    ITEM 6. SELECTED FINANCIAL DATA The following table sets forth, on a historical basis, our selected financial data. This information should be read in conjunction with our audited Consolidated Financial Statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations appearing elsewhere in this Report. Year Ended December 31, (dollars in thousands, except per share amounts) 2019 2018 2017 2016 2015 OPERATING DATA: Revenues (a) $ 295,327 $ 259,681 $ 248,552 $ 189,804 $ 196,783 Operating expenses, excluding depreciation and impairment charges (125,884) (114,591) (111,844) (97,904) (86,570) Depreciation and amortization (125,443) (117,549) (104,934) (70,011) (60,751) Impairment charges (1,721) — (14,455) — (5,000) Gain on disposition of properties 30,324 5,140 48,886 81,965 89,063 Equity in earnings of unconsolidated affiliates inclusive of gains on disposition of properties 8,922 9,302 23,371 39,449 37,330 Interest income 7,988 13,231 29,143 25,829 16,603 Other income 6,947 — 5,571 — 1,596 Interest expense (73,788) (69,978) (58,978) (34,645) (37,297) Income (loss) from continuing operations before income taxes 22,672 (14,764) 65,312 134,487 151,757 Income tax (provision) benefit (1,468) (934) (1,004) 105 (1,787) Net income (loss) 21,204 (15,698) 64,308 134,592 149,970 Loss (income) attributable to noncontrolling interests 31,841 47,137 (2,838) (61,816) (84,262) Net income attributable to Acadia $ 53,045 $ 31,439 $ 61,470 $ 72,776 $ 65,708 Basic and diluted earnings per share $ 0.62 $ 0.38 $ 0.73 $ 0.94 $ 0.94 Weighted-average number of Common Shares outstanding, basic 84,436 82,080 83,683 76,231 68,851 Weighted-average number of Common Shares outstanding, diluted 84,436 82,080 83,685 76,244 68,870 Cash dividends declared per Common Share $ 1.13 $ 1.09 $ 1.05 $ 1.16 $ 1.22 BALANCE SHEET DATA: Real estate before accumulated depreciation $ 4,099,542 $ 3,697,805 $ 3,466,482 $ 3,382,000 $ 2,736,283 Total assets 4,309,114 3,958,780 3,960,247 3,995,960 3,032,319 Total indebtedness, net 1,708,196 1,550,545 1,424,409 1,488,718 1,358,606 Total common shareholders’ equity 1,542,308 1,459,505 1,567,199 1,588,577 1,100,488 Noncontrolling interests 644,657 622,442 648,440 589,548 420,866 Total equity 2,186,965 2,081,947 2,215,639 2,178,125 1,521,354 OTHER: Funds from operations attributable to Common Shareholders and Common OP Unit holders (b) 126,862 118,870 134,667 117,070 111,560 Cash flows provided by (used in): (c) Operating activities 127,177 96,076 114,655 109,848 113,598 Investing activities (397,057) (136,619) 4,063 (613,564) (354,503) Financing activities 265,042 (10,278) (127,758) 488,365 96,101 (a) Amounts for credit losses have been reclassified from operating expenses to revenues for the years ended December 31, 2018, 2017, 2016 and 2015. (b) Funds from operations is a non-GAAP measure. For an explanation of the measure and a reconciliation to the nearest GAAP measure, see “Item 7. Management’s Discussion and Analysis — Supplemental Financial Measures.” (c) Cash flow activities for the year ended December 31, 2015 have not been adjusted for the impact of ASUs 2016-15 and 2016-18 (Note 1). 36


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    ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. OVERVIEW As of December 31, 2019, there were 186 properties, which we own or have an ownership interest in, within our Core Portfolio and Funds. 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 our Funds. These properties primarily consist of street and urban retail, and suburban shopping centers. See Item 2. Properties for a summary of our wholly-owned and partially-owned retail properties and their physical occupancies at December 31, 2019. 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. Our primary business objective is to acquire and manage commercial retail properties that will provide cash for distributions to shareholders while also creating the potential for capital appreciation to enhance investor returns. We focus on the following fundamentals to achieve this objective: • Own and operate a Core Portfolio of high-quality retail properties located primarily in high-barrier-to-entry, densely-populated metropolitan areas and create value through accretive development and re-tenanting activities coupled with the acquisition of high- quality assets that have the long-term potential to outperform the asset class as part of our Core asset recycling and acquisition initiative. • Generate additional external growth through an opportunistic yet disciplined acquisition program within our Funds. We target transactions with high inherent opportunity for the creation of additional value through: ◦ value-add investments in street retail properties, located in established and “next generation” submarkets, with re-tenanting or repositioning opportunities, ◦ opportunistic acquisitions of well-located real-estate anchored by distressed retailers, and ◦ other opportunistic acquisitions which may include high-yield acquisitions and purchases of distressed debt. Some of these investments historically have also included, and may in the future include, joint ventures with private equity investors for the purpose of making investments in operating retailers with significant embedded value in their real estate assets. • Maintain a strong and flexible balance sheet through conservative financial practices while ensuring access to sufficient capital to fund future growth. 37


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    SIGNIFICANT DEVELOPMENTS DURING THE YEAR ENDED DECEMBER 31, 2019 Investments During the year ended December 31, 2019, within our Core portfolio we invested in twelve properties aggregating $185.9 million, inclusive of transaction costs, as follows: • On January 24, 2019, our unconsolidated Renaissance Portfolio venture acquired Fund III’s 3104 M Street property located in Washington, D.C. for $10.7 million (Note 4) for which our share was $2.1 million as discussed further below. • On March 15, March 27, May 29, July 30 and November 8, 2019, we acquired five retail condominiums located in the Soho section of New York City for a total of $87.0 million referred to as the “Soho Acquisitions” with an aggregate purchase price of approximately $122.0 million (Note 2). • On May 2, 2019, we entered into a ground lease (Note 11) on a development property in Washington, D.C. referred to as “1238 Wisconsin Avenue.” • On September 11, 2019, we acquired two buildings in Chicago, Illinois, referred to as “849 and 912 W. Armitage” for a total of $7.8 million (Note 2). • On October 25, 2019, we acquired a retail building in Los Angeles, California, referred to as “8436-8452 Melrose Place” for $48.7 million (Note 2). • On December 9, 2019, we acquired a master lease position on a building in the Soho section of New York City, referred to as “565 Broadway” for $28.8 million (Note 11). • On December 11, 2019, we acquired a building in Chicago, Illinois, referred to as “907 W. Armitage” for $2.9 million (Note 2). During the year ended December 31, 2019, within our Fund portfolio we invested in eight properties aggregating $328.5 million as follows: • On March 19, 2019, Fund V’s unconsolidated venture (Note 4) acquired a suburban shopping center in Riverdale, Utah for $48.5 million, referred to as “Family Center at Riverdale,” of which Fund V’s share was $43.7 million. • On April 30, 2019, Fund V’s unconsolidated venture (Note 4) acquired a suburban shopping center in Vernon, Connecticut for $36.7 million, referred to as “Tri-City Plaza,” of which Fund V’s share was $33.0 million • On May 1, 2019, Fund IV acquired a leasehold interest (Note 11) in a retail and parking condominium in a building in New York, New York for $10.5 million, referred to as “110 University Place.” • On May 6, 2019, Fund V acquired a suburban shopping center (Note 2) in Palm Coast, Florida for $36.6 million, referred to as “Palm Coast Landing.” • On June 21, 2019, Fund V acquired a suburban shopping center (Note 2) in Lincoln, Rhode Island for $54.3 million, referred to as “Lincoln Commons.” • On August 2, Fund V acquired a suburban shopping center (Note 2) in Virginia Beach, Virginia for $87.0 million, referred to as “Landstown Commons.” • On August 21, Fund V’s unconsolidated venture (Note 4) acquired two suburban shopping centers in Frederick County, Maryland for a total of $54.9 million, referred to as the “Frederick County Acquisitions,” for which Fund V’s share was $49.4 million. Dispositions On October 28, 2019, we sold our Pacesetter Park shopping center for $22.6 million (Note 2) and recognized a gain on the sale of this property of $16.8 million. During the year ended December 31, 2019, we made four consolidated property dispositions and sold three condominium units (Note 2) from our Fund Portfolio for gross proceeds totaling $86.8 million as follows: • On January 24, 2019, a venture in which Fund III holds an 80% interest sold its 3104 M Street property to an unconsolidated venture (Note 4), in which the Core Portfolio holds a 20% interest, for $10.5 million. The acquiring venture assumed the property’s mortgage in the amount of $4.7 million. • On July 24, 2019, Fund IV sold its consolidated JFK Plaza property for $7.8 million (Note 2). • On August 22, 2019, Fund III sold its consolidated Nostrand Avenue property for $27.7 million (Note 2). • On May 17, September 23, and November 7, 2019, Fund IV sold three consolidated residential condominium units for a total of $8.8 million (Note 2). 38


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    • On September 27, 2019 Fund IV sold its consolidated 938 W. North Avenue property for $32.0 million (Note 2). The Funds recognized a net aggregate gain on the sales of these consolidated properties of $13.6 million and our share was $2.9 million, net of noncontrolling interests. Financings During the year ended December 31, 2019, we obtained aggregate new consolidated financings of $358.9 million (Note 7) and unconsolidated financings of $122.5 million, including: • An additional $100.0 million of borrowing capacity on our senior unsecured revolving credit facility was obtained by amending the facility on October 8, 2019, bringing the total revolving credit capacity to $250.0 million. • An aggregate of $258.9 million in new consolidated mortgage financing was obtained through one Fund II loan, three Fund IV loans and five Fund V loans. • Fund V also obtained a total of $122.5 million in new mortgage financing for its three unconsolidated joint ventures (Note 4). In addition, during the year ended December 31, 2019, the Funds repaid mortgage debt aggregating $71.1 million (Note 7) at five consolidated Fund properties, four of which were sold, and Fund IV repaid a $9.4 million mortgage at one of its unconsolidated joint venture properties (Note 4). Structured Financing During the year ended December 31, 2019, we entered into the following structured financing transactions (Note 3): • We redeemed a $15.3 million Fund IV Structured Financing investment; • We provided seller financing in the amount of $13.5 million in connection with the sale of our Pacesetter Park property (Note 2); and • We funded an additional $4.3 million on an existing loan. Equity Issuance During the year ended December 31, 2019, the Company sold 5,164,055 shares under its ATM program (Note 10) for gross proceeds of $147.7 million, or $145.5 million net of issuance costs, at a weighted-average gross price per share of $28.61. 39


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    RESULTS OF OPERATIONS See Note 12 in the Notes to Consolidated Financial Statements for an overview of our three reportable segments. Comparison of Results for the Year Ended December 31, 2019 to the Year Ended December 31, 2018 The results of operations by reportable segment for the year ended December 31, 2019 compared to the year ended December 31, 2018 are summarized in the table below (in millions, totals may not add due to rounding): Year Ended Year Ended December 31, 2019 December 31, 2018 Increase (Decrease) Core Funds SF Total Core Funds SF Total Core Funds SF Total Revenues $ 173.2 $ 122.2 $ — $ 295.3 $ 166.8 $ 92.9 $ — $ 259.7 $ 6.4 $ 29.3 $ — $ 35.6 Depreciation and amortization (61.8) (63.6) — (125.4) (60.9) (56.6) — (117.5) 0.9 7.0 — 7.9 Property operating expenses, other operating and real estate taxes (47.0) (43.4) — (90.5) (44.1) (36.2) — (80.2) 2.9 7.2 — 10.3 General and administrative expenses — — — (35.4) — — — (34.3) — — — 1.1 Impairment charge — (1.7) — (1.7) — — — — — 1.7 — 1.7 Gain on disposition of properties 16.8 13.6 — 30.3 — 5.1 — 5.1 16.8 8.5 — 25.2 Operating income 81.1 26.9 — 72.6 61.9 5.2 — 32.7 19.2 21.7 — 39.9 Interest income — — 8.0 8.0 — — 13.2 13.2 — — (5.2) (5.2) Equity in earnings (losses) of unconsolidated affiliates 9.0 (0.1) — 8.9 7.4 1.9 — 9.3 1.6 (2.0) — (0.4) Interest expense (28.3) (45.5) — (73.8) (27.6) (42.4) — (70.0) 0.7 3.1 — 3.8 Other income 0.3 6.6 — 6.9 — — — — 0.3 6.6 — 6.9 Income tax provision — — — (1.5) — — — (0.9) — — — (0.6) Net income (loss) 62.1 (12.0) 8.0 21.2 41.7 (35.3) 13.2 (15.7) 20.4 23.3 (5.2) 36.9 Net loss attributable to noncontrolling interests 0.3 31.5 — 31.8 0.8 46.4 — 47.1 0.5 14.9 — 15.3 Net income attributable to Acadia $ 62.5 $ 19.5 $ 8.0 $ 53.0 $ 42.4 $ 11.0 $ 13.2 $ 31.4 $ 20.1 $ 8.5 $ (5.2) $ 21.6 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 increased $20.1 million for the year ended December 31, 2019 compared to the prior year as a result of the changes further described below. Revenues for our Core Portfolio increased $6.4 million for the year ended December 31, 2019 compared to the prior year due primarily to $5.8 million from the acceleration of amortization on a below-market lease related to a tenant that vacated in 2019 and $3.4 million related to Core Portfolio property acquisitions. These increases were offset by a $2.4 million decrease in 2019 due to the acceleration of amortization on below- market leases due to two tenants that vacated in 2018. Property operating expenses, other operating and real estate taxes for our Core Portfolio increased $2.9 million for the year ended December 31, 2019 compared to the prior year primarily due to $1.3 million from increased real estate tax expense at City Center and $1.1 million from increased legal expenses in the portfolio in 2019. Gain on disposition of properties for $16.8 million relates to the sale of Pacesetter Park in 2019 (Note 2). Equity in earnings of unconsolidated affiliates for our Core Portfolio increased $1.6 million for the year ended December 31, 2019 compared to the prior year primarily due to $1.0 million from the conversion of a note receivable into an increased ownership in real estate during 2018 along with $0.7 million from lease up at various joint venture properties in 2019. Interest expense for our Core Portfolio increased $0.7 million for the year ended December 31, 2019 compared to the prior year due to a $1.3 million increase related to higher average outstanding borrowings, a $1.2 million increase related to higher average interest rates and $0.3 million from higher loan cost amortization in 2019. These increases were partially offset by $2.1 million more interest capitalized in 2019. Funds The results of operations for our Funds segment are depicted in the table above under the headings labeled “Funds.” Segment net income attributable to Acadia for the Funds increased $8.5 million for the year ended December 31, 2019 compared to the prior year as a result of the changes described below. 40


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    Revenues for the Funds increased $29.3 million for the year ended December 31, 2019 compared to the prior year primarily due to (i) $19.8 million increase from Fund property acquisitions in 2018 and 2019, (ii) $5.1 million from the acceleration of amortization on a below-market lease, (iii) $3.6 million from lease up at Fund II’s City Point property, (iv) $3.0 million related to Fund III’s Cortlandt Crossing property being placed into service and (v) $2.1 million from the consolidation of Fund IV’s Broughton Street Portfolio. These increases were partially offset by $2.8 million due to property sales in 2019 (described further below) and $1.4 million from the acceleration of amortization of a below- market lease related to a bankruptcy in 2018. Depreciation and amortization for the Funds increased $7.0 million for the year ended December 31, 2019 compared to the prior year primarily due to Fund property acquisitions in 2018 and 2019. Property operating expenses, other operating and real estate taxes for the Funds increased $7.2 million for the year ended December 31, 2019 compared to the prior year due Fund property acquisitions in 2018 and 2019. The $1.7 million impairment charge in 2019 (Note 8) relates to residential condominium units at Fund IV’s 210 Bowery that were sold during 2019. Gain on disposition of properties for the Funds increased $8.5 million for the year ended December 31, 2019 compared to the prior year due to the sales of 938 West North Avenue and JFK Plaza in Fund IV and Nostrand Avenue and 3104 M Street in Fund III during 2019 compared to the sales of Lake Montclair and 1861 Union in Fund IV in 2018 (Note 2, Note 4). Equity in earnings of unconsolidated affiliates for the Funds decreased $2.0 million for the year ended December 31, 2019 compared to the prior year primarily due to a $3.2 million distribution from Fund III’s Storage Post venture in 2018, a cost method investment, (Note 4) offset by $1.1 million from the recognition of 100% of the net loss from the Broughton Street Portfolio in 2018 as our partner is no longer absorbing their share of the losses. Interest expense for the Funds increased $3.1 million for the year ended December 31, 2019 compared to the prior year due to a $6.2 million increase related to higher average outstanding borrowings and $1.5 million from higher loan cost amortization in 2019 associated with Fund acquisitions. These increases were partially offset by $4.8 million more interest capitalized in 2019. Other income for the Funds increased $6.6 million for the year ended December 31, 2019 compared to the prior year due to $5.0 million from the New Market Tax Credit transaction at Fund II’s City Point investment (Note 7) and $1.6 million from an incentive fee earned from Fund III’s Storage Post Venture. Net loss (income) attributable to noncontrolling interests for the Funds increased $14.9 million for the year ended December 31, 2019 compared to the prior year based on the noncontrolling interests’ share of the variances discussed above. (Income) loss attributable to noncontrolling interests in the Funds includes asset management fees earned by the Company of $17.5 million and $18.0 million for the years ended December 31, 2019 and 2018, respectively. Structured Financing The results of operations for our Structured Financing segment are depicted in the table above under the headings labeled “SF.” Interest income for the Structured Financing portfolio decreased $5.2 million for the year ended December 31, 2019 compared to the prior year primarily due to the conversion of a portion of two notes receivable into increased ownership in the underlying real estate (Note 4) during 2018 along with the payoff of a note made to Fund IV during 2019. Unallocated The Company does not allocate general and administrative expense and income taxes to its reportable segments. These unallocated amounts are depicted in the table above under the headings labeled “Total.” Unallocated general and administrative expense increased $1.1 million for the year ended December 31, 2019 compared to the prior year period primarily due to internal leasing salaries no longer being capitalized in 2019. Prior Year Periods Discussions of 2017 items and comparisons between the year ended December 31, 2018 and 2017, respectively, that are not included in this Report can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018. 41


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    SUPPLEMENTAL 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. Our Funds invest primarily in properties that typically require significant leasing and development. Given that the Funds are 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 Fund 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 Core 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): Year Ended December 31, 2019 2018 2017 Consolidated operating income (a) $ 72,603 $ 32,681 $ 66,205 Add back: General and administrative 35,416 34,343 33,756 Depreciation and amortization 125,443 117,549 104,934 Impairment charge 1,721 — 14,455 Less: Above/below market rent and straight-line rent (24,447) (23,521) (21,110) Gain on disposition of properties (30,324) (5,140) (48,886) Consolidated NOI 180,412 155,912 149,354 Noncontrolling interest in consolidated NOI (52,248) (37,496) (28,379) Less: Operating Partnership's interest in Fund NOI included above (13,870) (9,790) (7,927) Add: Operating Partnership's share of unconsolidated joint ventures NOI (a) 25,948 24,919 19,539 NOI - Core Portfolio $ 140,242 $ 133,545 $ 132,587 (a) Prior year amounts have been adjusted to include gains on disposition of properties, which have been reclassified to operating income effective January 1, 2019. (b) Does not include the Operating Partnership’s share of NOI from unconsolidated joint ventures within the Funds. Same-Property NOI includes Core Portfolio properties that we owned for both the current and prior periods presented, but excludes those properties which we acquired, sold or expected to sell, and developed during these periods. The following table summarizes Same-Property NOI for our Core Portfolio (in thousands): Year Ended December 31, 2019 2018 Core Portfolio NOI $ 140,242 $ 133,545 Less properties excluded from Same-Property NOI (16,312) (14,235) Same-Property NOI $ 123,930 $ 119,310 Percent change from prior year period 3.9% Components of Same-Property NOI: Same-Property Revenues $ 167,806 $ 163,469 Same-Property Operating Expenses (43,876) (44,159) Same-Property NOI $ 123,930 $ 119,310 42


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    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 comparable leases executed within our Core Portfolio for the year ended December 31, 2019. 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. Year Ended December 31, 2019 Straight- Core Portfolio New and Renewal Leases Cash Basis Line Basis Number of new and renewal leases executed 42 42 GLA commencing 507,431 507,431 New base rent $ 17.48 $ 18.22 Expiring base rent $ 16.65 $ 15.77 Percent growth in base rent 5.0% 15.5% Average cost per square foot (a) $ 5.52 $ 5.52 Weighted average lease term (years) 6.9 6.9 (a) The average cost per square foot includes tenant improvement costs, leasing commissions and tenant allowances. 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 for an equity REIT due to its widespread acceptance and use within the REIT 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 depreciable 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 generally accepted accounting principles (“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. A reconciliation of net income attributable to Acadia to FFO follows (dollars in thousands, except per share amounts): Year Ended December 31, 2019 2018 2017 Net income attributable to Acadia $ 53,045 $ 31,439 $ 61,470 Depreciation of real estate and amortization of leasing costs (net of noncontrolling interests' share) 89,373 85,852 83,515 Impairment charge (net of noncontrolling interests' share) 395 — 1,088 Gain on disposition of properties (net of noncontrolling interests' share) (19,786) (994) (15,565) Income attributable to Common OP Unit holders 3,295 2,033 3,609 Distributions - Preferred OP Units 540 540 550 Funds from operations attributable to Common Shareholders and Common OP Unit holders $ 126,862 $ 118,870 $ 134,667 Funds From Operations per Share - Diluted Basic weighted-average shares outstanding, GAAP earnings 84,435,826 82,080,159 83,682,789 Weighted-average OP Units outstanding 5,111,262 4,941,661 4,741,058 Basic weighted-average shares outstanding, FFO 89,547,088 87,021,820 88,423,847 Assumed conversion of Preferred OP Units to common shares 499,345 499,345 505,045 Assumed conversion of LTIP units and restricted share units to common shares — 206,646 69,488 Diluted weighted-average number of Common Shares and Common OP Units outstanding, FFO 90,046,433 87,727,811 88,998,380 Diluted Funds from operations, per Common Share and Common OP Unit $ 1.41 $ 1.35 $ 1.51 43


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    LIQUIDITY AND CAPITAL RESOURCES Uses of Liquidity and Cash Requirements 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 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 currently distribute at least 90% of our taxable income to our shareholders. During the year ended December 31, 2019, we paid dividends and distributions on our Common Shares, Common OP Units and Preferred OP Units totaling $101.0 million. Investments in Real Estate As previously discussed, during the year ended December 31, 2019, within our Core and Fund portfolios we invested in 20 new properties aggregating $514.4 million (Note 2, Note 4, Note 11). For activity subsequent to December 31, 2019, see Note 17. Structured Financing Investment During the year ended December 31, 2019, we advanced an additional $4.3 million on a note receivable and provided seller financing for $13.5 million (Note 3). Capital Commitments During the year ended December 31, 2019, we made capital contributions aggregating $32.8 million to our Funds. At December 31, 2019, our share of the remaining capital commitments to our Funds aggregated $86.1 million as follows: • $3.3 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. • $21.2 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. • $61.6 million to Fund V. Fund V was launched in August 2016 with total committed capital of $520.0 million of which our initial share is $104.5 million. In addition, during April 2018, a distribution was made to the Fund II investors, including $4.3 million to the Operating Partnership. This amount remains subject to re-contribution to Fund II until April 2021. Development Activities During the year ended December 31, 2019, capitalized costs associated with development activities totaled $25.6 million (Note 2). At December 31, 2019, there were five Core portfolio properties under development and redevelopment and five Fund properties under development for which the estimated total cost to complete these projects through 2022 was $154.0 million to $191.3 million and our share was approximately $93.0 million to $111.1 million. 44


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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): December 31, December 31, 2019 2018 Total Debt - Fixed and Effectively Fixed Rate $ 1,403,324 $ 1,001,658 Total Debt - Variable Rate 314,604 558,675 1,717,928 1,560,333 Net unamortized debt issuance costs (10,383) (10,541) Unamortized premium 651 753 Total Indebtedness $ 1,708,196 $ 1,550,545 As of December 31, 2019, our consolidated outstanding mortgage and notes payable aggregated $1,717.9 million, excluding unamortized premium of $0.7 million and unamortized loan costs of $10.4 million, and were collateralized by 44 properties and related tenant leases. Interest rates on our outstanding indebtedness ranged from 2.95% to 6.00% with maturities that ranged from February 2020 to April 2035. Taking into consideration $948.8 million of notional principal under variable to fixed-rate swap agreements currently in effect, $1,403.3 million of the portfolio debt, or 81.7%, was fixed at a 3.56% weighted-average interest rate and $314.6 million, or 18.3% was floating at a 3.71% weighted average interest rate as of December 31, 2019. Our variable-rate debt includes $143.3 million of debt subject to interest rate caps. There is $431.5 million of Fund debt maturing in 2020 at a weighted-average interest rate of 4.46%, including $121.5 million of debt with available one-year extension options and $240.0 million at Fund II for which the Company is actively seeking refinancing; there is $5.8 million of scheduled principal amortization due in 2020; and our share of scheduled remaining 2020 principal payments and maturities on our unconsolidated debt was $10.1 million at December 31, 2019. In addition, $287.7 million of our total consolidated debt and $7.9 million of our pro-rata share of unconsolidated debt will come due in 2021. As it relates to the maturing debt in 2020 and 2021, we may not have sufficient liquidity 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 at acceptable terms. A mortgage loan in the Company’s Core Portfolio for $26.3 million was in default and subject to litigation at December 31, 2019 and 2018 (Note 7). Share Repurchase Program The Company did not repurchase any of its Common Shares pursuant to its new share repurchase program (Note 10) during the year ended December 31, 2019. Sources of Liquidity Our primary sources of capital for funding our 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 our Funds, (iv) future sales of existing properties, (v) repayments of structured financing investments, and (vi) cash on hand and future cash flow from operating activities. Our cash on hand in our consolidated subsidiaries at December 31, 2019 totaled $15.8 million. Our remaining sources of liquidity are described further below. ATM Program We have an ATM Program (Note 10) which provides us an efficient and low-cost vehicle for raising public equity to fund our capital needs. Through this program, we have been able to effectively “match-fund” the required equity for our Core Portfolio and Fund acquisitions through the issuance of Common Shares over extended periods employing a price averaging strategy. In addition, from time to time, we have issued and intend to continue to 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 Fund acquisitions, and for general corporate purposes. During the year ended December 31, 2019, the Company sold 5,164,055 shares under its ATM Program for gross proceeds of $147.7 million, or $145.5 million net of issuance costs, at a weighted-average gross price per share of $28.61. 45

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