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Item 2. Management’s Discussion and Analysis

2025-07-30 compared with 2025-04-30 · 250 added, 134 removed, 244 unchanged (61% of the section changed)

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

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

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

All of the Company’s assets are held by, and all of its operations are conducted through, Acadia Realty Limited Partnership (the “Operating Partnership”) and entities in which the Operating Partnership owns an interest.

As of March 31, 2025 and December 31, 2024, the Trust controlled approximately 96% of the Operating Partnership as the sole general partner and is entitled to share, in proportion to its percentage interest, in the cash distributions and profits and losses of the Operating Partnership.

We own and operate a high-quality core real estate portfolio (“Core” or “Core Portfolio”) in the nation’s most dynamic retail corridors, along with an investment management platform (“Investment Management”).

As part of the Investment Management platform, we have active investments through the following opportunity funds, including:

As of June 30, 2025 and December 31, 2024, the Trust controlled approximately 96% of the Operating Partnership as the sole general partner and is entitled to share, in proportion to its percentage interest, in the cash distributions and profits and losses of the Operating Partnership.

We own and operate a high-quality core real estate portfolio (“Core” or our “Core Portfolio”) located in the nation’s most dynamic retail corridors, complemented by an investment management platform (“Investment Management”).

Through the Investment Management platform, we have active investments through the following opportunity funds, including:

Acadia Strategic Opportunity Fund II, LLC (“Fund II”), Acadia Strategic Opportunity Fund III LLC (“Fund III”), Acadia Strategic Opportunity Fund IV LLC (“Fund IV”), and Acadia Strategic Opportunity Fund V LLC (“Fund V” and, collectively with Fund II, Fund III and Fund IV, “the Funds”).

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

• maximize internal growth of the Core Portfolio through constant optimization of tenant mix, time-sensitive and cost-effective re-tenanting, and active management of our properties;

• pursue accretive acquisition opportunities for the Core Portfolio with a focus on high-growth, residentially-dense and destination urban retail shopping corridors;

• capitalize on accretive development/redevelopment opportunities and re-tenanting activities in order to maximize the value of Core properties;

• within Investment Management, pursue a wide range of investments in various co-investment vehicles while matching individual investments and return profiles with strategic institutional partners;

• maintain a strong and flexible balance sheet to support our business activities through conservative financial practices while ensuring access to sufficient capital to fund future growth.

As of March 31, 2025, we own or have an ownership interest in 213 properties held through our Core Portfolio and Investment Management platform.

Our Core Portfolio consists of those properties either 100% owned, or partially owned through joint venture interests, by the Operating Partnership, or subsidiaries thereof, not including those properties owned through the Investment Management platform.

In addition, we hold equity method investments in three unconsolidated co-investment vehicles, through strategic partnerships with large institutional investors.

We hold significant equity ownership, typically ranging from 5% to 20%, in each venture.

We continue to execute on a focused strategy designed to drive long-term, profitable growth by leveraging the strength of our Core Portfolio and Investment Management platform.

Our strategic priorities include:

• Maximizing Internal Growth:

During the six months ended June 30, 2025, the Core Portfolio achieved 4.1% same-property NOI growth.

We remain focused on optimizing tenant mix, executing time-sensitive re-tenanting, and enhancing operational efficiency across our portfolio.

• Executing Accretive Acquisitions:

Year-to-date, we have completed approximately $423.7 million of acquisitions in Core and Investment Management, including high-quality street retail assets in key urban corridors.

These acquisitions are fully funded and aligned with our strategy of targeting high-growth, residentially dense, and destination retail locations.

• Advancing Development/Redevelopment and Re-Tenanting:

We continue to capitalize on value-enhancing development and redevelopment opportunities.

• Scaling Investment Management:

Through our institutional co-investment vehicles, we pursue opportunistic and value-add investments that complement our Core Portfolio.

We maintain meaningful ownership stakes in these ventures, aligning our interests with those of our partners.

• Maintaining Financial Flexibility:

We are committed to maintaining a strong and flexible balance sheet through conservative financial practices.

Our capital position supports continued investment while preserving liquidity and access to capital markets.

As of June 30, 2025, we own or have an ownership interest in 218 properties held through our Core Portfolio and Investment Management platform ( Note 1 ).

Our Core Portfolio consists of those properties either wholly owned, or partially owned through joint venture interests, by the Operating Partnership, or subsidiaries thereof, not including those properties owned through the Investment Management platform.

These properties primarily consist of street and urban retail, and suburban shopping centers.

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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.

A summary of our wholly-owned and partially-owned retail properties and their physical occupancies as of March 31, 2025 is as follows:

A summary of our wholly-owned and partially-owned retail properties and their physical occupancies as of June 30, 2025 is as follows:

Number of Properties

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San Francisco Metro

Washington DC Metro

Washington D.C.

Total Core Portfolio

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Acadia Share of Total Core and Investment Management

(1) Includes five pre-stabilized properties in the Core Portfolio.

SIGNIFICANT DEVELOPMENTS DURING THE THREE MONTHS ENDED MARCH 31, 2025 AND SUBSEQUENT EVENTS

On January 23, 2025, we acquired an additional 48% economic ownership interest, increasing our existing 20% interest to 68%, in the Renaissance Portfolio primarily located in Washington D.C.

The 48% interest was acquired for a purchase price of $117.9 million, based upon a gross portfolio fair value of $245.7 million, which included existing mortgage loan indebtedness of $156.1 million in aggregate ( Note 7 ).

(1) Includes eight pre-stabilized properties in the Core Portfolio.

SIGNIFICANT ACTIVITIES DURING 2025

The following properties were acquired during the six months ended June 30, 2025 ( Note 2 ) (dollars in thousands):

Property Name

Acquisition Date

Purchase Price

106 Spring Street

January 9, 2025

New York Metro

73 Wooster Street

January 9, 2025

New York Metro

Renaissance Portfolio

January 23, 2025

Washington DC Metro

Pinewood Square

March 19, 2025

95, 97, and 107 North 6th Street

April 9, 2025

New York Metro

85 5th Avenue

April 11, 2025

New York Metro

70 and 93 North 6th Street

New York Metro

On January 23, 2025, we acquired an additional 48% economic ownership interest, increasing our existing 20% interest to 68%, in the Renaissance Portfolio, which is primarily located in Washington D.C.

The 48% interest was acquired for a purchase price of $117.9 million, based upon a gross portfolio fair value of $245.7 million, which included existing aggregate mortgage loan indebtedness of $156.1 million ( Note 7 ).

Prior to the acquisition, we accounted for our 20% interest under the equity method of accounting.

We gained a controlling financial interest as a result of this acquisition, and determined we should consolidate our investment within our Core Portfolio effective January 23, 2025.

We gained a controlling financial interest as a result

of this acquisition, and determined we should consolidate our investment within our Core Portfolio effective January 23, 2025.

As such, we measured and recognized 100% of the identifiable assets acquired, the liabilities assumed and any noncontrolling interests of the Renaissance Portfolio, at fair value and recognized a $9.6 million loss on change in control representing the difference between the carrying value and fair value of its existing equity method interest immediately before consolidation of the portfolio ( Note 2 ).

Additionally, during the three months ended March 31, 2025, we acquired two Core Portfolio retail properties, 106 Spring Street and 73 Wooster Street, and one Investment Management shopping center, Pinewood Square, for $55.1 million, $25.5 million and $68.2 million, inclusive of transaction costs, respectively ( Note 2 ).

In April 2025, we acquired two Core properties for approximately $107.5 million ( Note 16 ).

At March 31, 2025, we evaluated the expected hold period and intended use for 640 Broadway, a Fund III property, located in Manhattan, New York.

Based on the shortened hold period as we market this asset for sale, we reduced the carrying value of the property that we anticipate selling to a third-party at its estimated fair value of $48.1 million.

As a result, we recognized an impairment charge of $6.5 million, or $1.6 million at our proportionate share ( Note 8 ).

In June 2025, the joint venture that owned the Eden Square property, of which Fund IV has a 90% ownership interest, sold the property to a third-party for $28.0 million and repaid the related $23.3 million property mortgage loan.

In addition to the above disposition, a 4,547 square foot Investment Management retail property located in New York, NY, was classified as held for sale as of June 30, 2025.

We recognized the following impairment charges during the six months ended June 30, 2025 ( Note 8 ) (dollars in thousands):

Impairment Charge

Property Location

Triggering Event

Effective Date

Acadia's Share

Reduced holding period

June 30, 2025

Reduced holding period

June 30, 2025

Financing Activity

Core Portfolio

In the second quarter of 2025, the Operating Partnership and the Company entered into the Third Amendment to the Third Amended and Restated Credit Agreement (the “Amendment”) to the existing senior unsecured credit facility (the “Credit Facility”).

The Amendment established a new five-year $250.0 million incremental delayed draw term loan (the “$250.0 Million Term Loan”), of which $175.0 million was drawn at closing.

The Amendment also increased the accordion feature limit to $1.5 billion and reduced the borrowing rate on the entire $925.0 million Credit Facility by 10 basis points.

The $250.0 Million Term Loan bears interest at the Secured Overnight Financing Rate (“SOFR”) + 1.20% and matures on May 29, 2030.

On January 23, 2025, we acquired an additional 48% economic ownership interest in the Renaissance Portfolio ( Note 2 ).

At acquisition, the properties were subject to existing mortgage indebtedness with an aggregate outstanding principal balance of $156.1 million, bore interest at the Secured Overnight Financing Rate (“SOFR”) + 2.55% and was scheduled to mature on November 6, 2026.

At acquisition, the properties were subject to existing mortgage indebtedness with an aggregate outstanding principal balance of $156.1 million, bore interest at SOFR + 2.65% and was scheduled to mature on November 6, 2026.

The property mortgage loans were recorded at a fair value of approximately $156.1 million.

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The note bears interest at 9.11%, matures in November 2026 and has been eliminated in consolidation ( Note 7 ).

During the three months ended March 31, 2025, we made scheduled principal payments totaling $0.5 million ( Note 7 ).

Investment Management

During the three months ended March 31, 2025, we ( Note 7 ):

• extended two consolidated Investment Management property mortgage loans totaling $61.5 million;

• made scheduled principal payments totaling $1.2 million.

Structured Financing Investments

During the three months ended March 31, 2025, we extended the maturity date of one note receivable of $1.4 million from September 2024 to July 2025 ( Note 3 ).

In April 2025, the Company modified a redeemable preferred equity investment in a property that is accounted for as a note receivable, which had a principal balance of $54.0 million as of March 31, 2025, to extend the maturity date from February 25, 2025 to February 9, 2027, with an option for a one-year extension.

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Issuance of Common Shares

We have an active at-the-market equity issuance program (“ATM Program”) that provides us with an efficient vehicle for raising public equity capital to fund our needs.

In February 2025, we entered into our current $500.0 million ATM Program (the “2025 ATM Program”), which includes an optional “forward sale” component, and concurrently terminated our existing $400.0 million ATM Program.

During the three months ended March 31, 2025, we issued 2,445,106 forward shares under the 2025 ATM Program.

All forward sales during the first quarter of 2025 remain outstanding as of March 31, 2025.

All forward sales agreements require settlement within one-year of the various effective dates.

The net forward sales price per share of the forward shares under the 2025 ATM program was $22.81.

In March 2025, we settled 11,172,699 shares outstanding under the ATM forward and received proceeds of $277.9 million.

As of March 31, 2025, $443.7 million remains available for future share issuance under the 2025 ATM Program.

We did not issue any shares during the three months ended June 30, 2024.

During the six months ended June 30, 2025, we issued the following forward shares under the 2025 ATM Program (in thousands except share and per share data):

Number of Shares

Average Share Price

Aggregate Value

Average Net Share Price

Aggregate Net Value

ATM Forward Sale Agreements

In March 2025, we settled 11,172,699 outstanding forward shares under the 2025 ATM Program and received proceeds of $277.9 million.

As of June 30, 2025, $443.7 million remains available for future share issuance under the 2025 ATM Program.

Economic and Other Considerations

Heightened levels of inflation, higher interest rates, and recent tariff policies present risks for our business and our tenants.

During 2024, inflation levels began to decrease but remained elevated relative to the years preceding 2021.

While the Federal Reserve made several cuts to interest rates in the second half of 2024 in response to these decreases in inflation levels, it continues to indicate that it will remain data-dependent in determining whether to hold its benchmark rate at current levels or continue to slowly ease interest rates through 2025.

In recent years, the elevated level of inflation resulted in increased costs for certain goods and services and cost of borrowing.

Most of our leases include contractual

rent escalations and require tenants to pay their share of operating expenses, including common area maintenance, real estate taxes, and insurance, thereby reducing our exposure to increases in costs and operating expenses resulting from inflation.

Macroeconomic conditions, including elevated levels of inflation, higher interest rates, and recent tariff policies, present risks for our business and the business of our tenants.

The elevated levels of inflation in recent years have led to increased costs for certain goods and services and cost of borrowing.

However, most of our leases include contractual rent escalations and require tenants to pay their share of operating expenses, including common area maintenance, real estate taxes, and insurance, which help mitigate inflationary impacts on costs and operating expenses.

We believe we manage our properties in a cost-conscious manner to minimize recurring operational expenses and utilize multi-year contracts to alleviate the impact of inflation on our business and our tenants.

We also continue to see rising consumer confidence and we expect to continue to add value to our portfolio by executing on our current leasing momentum, our active development and redevelopment projects, and leasing pipeline.

We also continue to see rising consumer confidence and expect to drive value to our portfolio through leasing momentum, active development and redevelopment projects, and our leasing pipeline.

We manage our exposure to fluctuations in interest rates primarily through the use of fixed-rate debt and interest rate swap and cap agreements, which qualify for, and are designated as, hedging instruments.

Except for increased interest costs, we have not experienced any material negative impacts at this time.

government's recently imposed tariffs, sanctions, and other restrictions on goods exported from or imported into the U.S.

or countermeasures imposed in response to such governmental actions could negatively impact our tenants, reduce our tenant’s ability to sell products, or negatively impact tourism to areas where we have a concentration of properties, such as New York, Chicago, and Washington D.C.

We do not yet know the impact of the recent government actions or the potential changes in global political conditions on our business due to uncertainties as the situation continues to evolve, and we continue to monitor its impact.

tariffs, sanctions, and related geopolitical developments could affect our tenants’ operations or tourism in key markets such as New York, Chicago, Washington, D.C., Los Angeles and San Francisco.

While the ultimate impact remains uncertain, we continue to monitor these developments closely.

RESULTS OF OPERATIONS

See Note 12 in the Notes to Condensed Consolidated Financial Statements for an overview of our three reportable segments:

Core Portfolio (“Core”), Investment Management (“IM”) and Structured Financing (“SF”).

Comparison of Results for the Three Months Ended March 31, 2025 to the Three Months Ended March 31, 2024

The results of operations by reportable segment for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 are summarized in the table below (in millions, totals may not add due to rounding):

Core Portfolio, Investment Management and Structured Financing.

For purposes of the tables included below, these segments are abbreviated as “Core”, “IM” and “SF”, respectively.

Comparison of Results for the Three Months Ended June 30, 2025 to the Three Months Ended June 30, 2024

The results of operations by reportable segment for the three months ended June 30, 2025 compared to the three months ended June 30, 2024 are summarized in the table below (in millions, totals may not add due to rounding):

Three Months Ended

March 31, 2025

March 31, 2024

June 30, 2025

June 30, 2024

Increase (Decrease)

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Impairment charges

(Loss) gain on disposition of property

Operating income

Interest income

Equity in earnings (losses) of unconsolidated affiliates

Interest expense

Realized and unrealized holding (losses) gains on investments and other

Income tax provision

Net income (loss)

Net loss (income) attributable to redeemable noncontrolling interests

Net loss (income) attributable to noncontrolling interests

Net income (loss) attributable to Acadia shareholders

Core Portfolio

Segment net income attributable to Acadia shareholders for our Core Portfolio increased $5.4 million for the three months ended June 30, 2025 compared to the prior year period as a result of the changes further described below.

Rental revenue for our Core Portfolio increased $9.9 million for the three months ended June 30, 2025 compared to the prior year period primarily due to (i) $4.6 million from new property acquisitions, (ii) $3.7 million from the acquisition of an additional interest and consolidation of the Renaissance Portfolio in 2025 and (iii) $1.0 million from new tenant lease up ( Note 2 ).

Depreciation and amortization for our Core Portfolio increased $4.4 million for the three months ended June 30, 2025 compared to the prior year period primarily due to (i) $2.8 million from new property acquisitions and (ii) $2.1 million from the acquisition of an additional interest and consolidation of the Renaissance Portfolio.

( Note 2 , Note 6 ).

Real estate taxes for our Core Portfolio increased $2.1 million for the three months ended June 30, 2025 compared to the prior year period primarily due to (i) $1.2 million from the acquisition of an additional interest and consolidation of the Renaissance Portfolio in 2025 and (ii) $0.6 million from new property acquisitions ( Note 2 ).

Equity in earnings of unconsolidated affiliates for our Core Portfolio decreased $1.1 million for the three months ended June 30, 2025 compared to the prior year period primarily due to tenants vacating subsequent to June 30, 2024.

Realized and unrealized holding losses on investments and other for our Core Portfolio decreased $1.8 million for the three months ended June 30, 2025 compared to the prior year period primarily due to a change in the mark-to-market adjustment on the investment in Albertsons ( Note 8 ).

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

Segment net income attributable to Acadia shareholders for Investment Management decreased $5.0 million for the three months ended June 30, 2025 compared to the prior year period as a result of the changes described below.

Rental revenue for Investment Management increased $2.8 million for the three months ended June 30, 2025 compared to the prior year period primarily due to a new property acquisition in 2025.

An impairment charge of $18.2 million for Investment Management is due to the shortened hold periods at one Fund III property and one Fund IV property ( Note 8 ).

Gain on disposition of properties of $3.0 million for Investment Management in 2024 was due to the sale of two Fund IV properties and a Fund V outparcel.

The Company did not dispose of any consolidated properties for the three months ended June 30, 2025.

Equity in earnings of unconsolidated affiliates for Investment Management decreased $7.5 million for the three months ended June 30, 2025 compared to the prior year period primarily due to the loss on sale on Eden Square in 2025 compared to the gain on sale of Paramus in 2024 ( Note 4 ).

Net income attributable to noncontrolling interests for Investment Management increased $23.2 million for the three months ended June 30, 2025 compared to the prior year period based on the noncontrolling interests’ share of the variances discussed above.

Net income attributable to noncontrolling interests in Investment Management includes asset management fees earned by the Company of $2.4 million for each of the three months ended June 30, 2025 and 2024.

The Company does not allocate general and administrative expenses and income taxes to its reportable segments.

These unallocated amounts are depicted in the table above under the headings labeled “Total.” General and administrative expenses increased $1.3 million for the three months ended June 30, 2025 compared to the prior year period primarily due to higher compensation expenses in 2025.

Comparison of Results for the Six Months Ended June 30, 2025 to the Six Months Ended June 30, 2024

The results of operations by reportable segment for the six months ended June 30, 2025 compared to the six months ended June 30, 2024 are summarized in the table below (in millions, totals may not add due to rounding):

Six Months Ended

June 30, 2025

June 30, 2024

Increase (Decrease)

Rental revenue

Other revenue

Depreciation and amortization

Property operating expenses

Real estate taxes

General and administrative expenses

Impairment charges

Loss on disposition of property

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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 shareholders for our Core Portfolio decreased $1.6 million for the three months ended March 31, 2025 compared to the prior year period as a result of the changes further described below.

Rental revenue for our Core Portfolio increased $15.0 million for the three months ended March 31, 2025 compared to the prior year period primarily due to (i) $8.4 million received from Whole Foods that we recognized as rental and termination income at City Center in San Francisco, CA in 2025, (ii) $4.0 million from new property acquisitions, and (iii) $2.8 million from the acquisition of an additional interest and consolidation of the Renaissance Portfolio in 2025 ( Note 2 ).

Other revenue for our Core Portfolio decreased $4.1 million for the three months ended March 31, 2025 compared to the prior year period primarily due to the recognition of a forfeited deposit in 2024.

Depreciation and amortization for our Core Portfolio increased $5.4 million for the three months ended March 31, 2025 compared to the prior year period primarily due to (i) $2.1 million from the acquisition of an additional interest and consolidation of the Renaissance Portfolio, (ii) $1.5 million from the acceleration of in-place lease intangible assets for bankrupt tenants in 2025 and (iii) $0.8 million from new property acquisitions ( Note 2 , Note 6 ).

Equity in earnings (losses) of unconsolidated affiliates for our Core Portfolio decreased $1.8 million for the three months ended March 31, 2025 due to tenants vacating subsequent to March 31, 2024.

Loss on change in control is due to the Company gaining a controlling financial interest as a result of the acquisition of the incremental 48% interest in the Renaissance Portfolio in 2025 ( Note 2 ).

Realized and unrealized holding gains (losses) on investments and other increased $3.7 million for the three months ended March 31, 2025 compared to the prior year period primarily due to a change in the mark-to-market adjustment on the investment in Albertsons ( Note 8 ).

Segment net income attributable to Acadia shareholders for our Core Portfolio increased $3.8 million for the six months ended June 30, 2025 compared to the prior year period as a result of the changes further described below.

Rental revenue for our Core Portfolio increased $24.9 million for the six months ended June 30, 2025 compared to the prior year period primarily due to (i) $8.6 million from new property acquisitions, (ii) $8.4 million received from Whole Foods that we recognized as rental and termination income at City Center in San Francisco, CA in 2025, (iii) $6.5 million from the acquisition of an additional interest and consolidation of the Renaissance Portfolio in 2025 and (iv) $1.0 million from new tenant lease up ( Note 2 ).

Other revenue for our Core Portfolio decreased $4.6 million for the six months ended June 30, 2025 compared to the prior year period primarily due to the recognition of a forfeited deposit in 2024.

Depreciation and amortization for our Core Portfolio increased $9.9 million for the six months ended June 30, 2025 compared to the prior year period primarily due to (i) $4.2 million from the acquisition of an additional interest and consolidation of the Renaissance Portfolio, (ii) $3.6 million from new property acquisitions and (iii) $1.5 million from the acceleration of in-place lease intangible assets for bankrupt tenants in 2025 ( Note 2 , Note 6 ).

Real estate taxes for our Core Portfolio increased $2.8 million for the six months ended June 30, 2025 compared to the prior year period primarily due to (i) $2.0 million from the acquisition of an additional interest and consolidation of the Renaissance Portfolio in 2025, and (ii) $1.1 million from new property acquisitions ( Note 2 ).

Loss on disposition of property of $2.2 million for our Core Portfolio relates to the deconsolidation of the Shops at Grand property in 2024.

Equity in earnings of unconsolidated affiliates for our Core Portfolio decreased $2.9 million for the six months ended June 30, 2025 due to tenants vacating subsequent to June 30, 2024.

Interest expense for our Core Portfolio decreased $1.1 million for the six months ended June 30, 2025 compared to the prior year period primarily due to higher loan balances in 2025 compared to 2024.

Loss on change in control of $9.6 million for our Core Portfolio for the six months ended June 30, 2025 is due to the Company gaining a controlling financial interest as a result of the acquisition of the incremental 48% interest in the Renaissance Portfolio in 2025 ( Note 2 ).

Realized and unrealized holding gains on investments and other for our Core Portfolio increased $5.4 million for the six months ended June 30, 2025 compared to the prior year period primarily due to a change in the mark-to-market adjustment on the investment in Albertsons ( Note 8 ).

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

The results of operations for our Investment Management segment are depicted in the table above under the headings labeled “IM.” Segment net income attributable to Acadia shareholders for Investment Management increased $1.0 million for the three months ended March 31, 2025 compared to the prior year period as a result of the changes described below.

Rental revenue for Investment Management increased $1.6 million for the three months ended March 31, 2025 compared to the prior year period primarily due to tenant lease up subsequent to March 31, 2024.

Impairment charge of $6.5 million is due to the shortened hold period at 640 Broadway, a Fund III property ( Note 8 ).

Loss on disposition of property in 2024 is due to a loss related to a previously disposed property.

The Company did not dispose of any properties for the three months ended March 31, 2025.

Net loss (income) attributable to noncontrolling interests for Investment Management increased $3.5 million for the three months ended March 31, 2025 compared to the prior year period based on the noncontrolling interests’ share of the variances discussed above.

Net income attributable to noncontrolling interests in Investment Management includes asset management fees earned by the Company of $2.3 million and $2.4 million for the three months ended March 31, 2025 and 2024, respectively.

Segment net income attributable to Acadia shareholders for Investment Management decreased $4.0 million for the six months ended June 30, 2025 compared to the prior year period as a result of the changes described below.

Rental revenue for Investment Management increased $4.4 million for the six months ended June 30, 2025 compared to the prior year period primarily due to new property acquisitions in 2025 and tenant lease up subsequent to June 30, 2024.

Other revenue for Investment Management increased $1.7 million for the six months ended June 30, 2025 compared to the prior year period primarily due to higher fees earn from related to the newly acquired Investment Management properties.

Real estate taxes for Investment Management increased $1.4 million for the six months ended June 30, 2025 compared to the prior year period primarily due to refunds received in the prior year.

Impairment charges for Investment Management of $24.6 million for the six months ended June 30, 2025 are due to the shortened hold periods at one Fund III property and one Fund IV property ( Note 8 ).

Loss on disposition of property for Investment Management decreased $1.8 million for the six months ended June 30, 2025 compared to the prior year period due to (i) $3.0 million gain on disposition of two Fund IV properties and a Fund V outparcel, (ii) offset by a $1.2 million loss related to a previously disposed property ( Note 2 ).

Equity in earnings of unconsolidated affiliates for Investment Management decreased $7.1 million for the six months ended June 30, 2025 compared to the prior year period primarily due to the loss on sale on Eden Square in 2025 compared to the gain on sale of Paramus in 2024 ( Note 4 ).

Net income attributable to noncontrolling interests for Investment Management increased $26.7 million for the six months ended June 30, 2025 compared to the prior year period based on the noncontrolling interests’ share of the variances discussed above.

Net income attributable to noncontrolling interests in Investment Management includes asset management fees earned by the Company of $4.6 million and $4.7 million for the six months ended June 30, 2025 and 2024, 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 Structured Finance increased $1.8 million for the six months ended June 30, 2025 compared to the prior year period due to the effect of compounding interest on notes.

The Company does not allocate general and administrative expenses and income taxes to its reportable segments.

These unallocated amounts are depicted in the table above under the headings labeled “Total.” General and administrative expenses increased $1.8 million for the three months ended March 31, 2025 compared to the prior year period primarily due to higher compensation expenses in 2025.

These unallocated amounts are depicted in the table above under the headings labeled “Total.” General and administrative expenses increased $3.2 million for the six months ended June 30, 2025 compared to the prior year period primarily due to higher compensation expenses in 2025.

NON-GAAP FINANCIAL MEASURES

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

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Consolidated operating income

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Impairment charges

Loss related to a previously disposed property

(Gain) Loss related to a previously disposed property

Above/below-market rent, straight-line rent and other accounts (a)

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The following table summarizes Same-Property NOI for our Core Portfolio (dollars in thousands):

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Core Portfolio NOI

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The table below includes embedded option renewals for which the renewed rent was equal to or approximated existing base rent.

Three Months Ended March 31, 2025

Three Months Ended June 30, 2025

Six Months Ended June 30, 2025

Core Portfolio New and Renewal Leases

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A reconciliation of net income (loss) attributable to Acadia shareholders to FFO follows (dollars in thousands, except per share data):

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Net income attributable to Acadia shareholders

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Impairment charges (net of noncontrolling interests' share)

Net gain on disposition of properties (net of noncontrolling interests' share)

Net loss on disposition of properties (net of noncontrolling interests' share)

Loss on change in control

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In order to qualify as a REIT for federal income tax purposes, we must distribute at least 90% of our taxable income to our shareholders.

During the three months ended March 31, 2025, we paid dividends and distributions on our Common Shares and preferred units of limited partnership interest (“Preferred OP Units”) totaling $24.5 million.

On January 23, 2025, we acquired an additional 48% economic ownership interest, and increased our existing 20% interest to 68%, in the Renaissance Portfolio primarily located in Washington D.C.

During the six months ended June 30, 2025, we paid dividends and distributions on our Common Shares and preferred units of limited partnership interest (“Preferred OP Units”) totaling $52.1 million.

Prior to the acquisition, we accounted for our 20% interest under the equity method of accounting.

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In addition, during the six months ended June 30, 2025, we acquired nine properties totaling $305.8 million ( Note 2 ).

Structured Financing Investments

During the three months ended March 31, 2025, we extended the maturity date of one note receivable of $1.4 million from September 2024 to July 2025 ( Note 3 ).

During the six months ended June 30, 2025, we provided a mezzanine loan and additional advances under a preferred equity investment in the aggregate amount of $28.5 million ( Note 3 ).

Capital Commitments

During the three months ended March 31, 2025, we made capital contributions aggregating $2.0 million to our Funds.

As of March 31, 2025, our share of the remaining capital commitments to our Funds aggregated $14.3 million as follows:

During the six months ended June 30, 2025, we made capital contributions aggregating $2.1 million to the Funds.

As of June 30, 2025, our share of the remaining capital commitments to the Funds aggregated $14.1 million as follows:

• $0.3 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.

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• $8.3 million to Fund V – Fund V was launched in August 2016 with total committed capital of $520.0 million, of which our original share was $104.5 million.

We do not have any additional capital commitments to our Investment Management portfolio.

We do not have any additional capital commitments to Investment Management.

Additionally, the Company has committed to fund tenant improvements under executed leases totaling approximately $45.7 million and $41.4 million, as of June 30, 2025 and December 31, 2024, respectively.

The Company’s share of these obligations is approximately $38.9 million and $32.3 million, respectively ( Note 9 ).

Development Activities

During the three months ended March 31, 2025, capitalized costs associated with development activities totaled $11.4 million ( Note 2 ).

As of March 31, 2025, we had a total of 18 consolidated projects under development or redevelopment, for which the estimated total cost to complete these projects through 2028 was $35.0 million to $147.0 million.

Substantially all remaining development and redevelopment costs are discretionary, and could be affected by various risks and uncertainties, including, but not limited to, the effects of the current inflationary environment, rising interest rates, the imposition of tariffs and other risks detailed in Part I, Item 1A.

During the six months ended June 30, 2025, capitalized costs associated with development activities totaled $22.5 million ( Note 2 ).

As of June 30, 2025, we had a total of 20 consolidated projects under development or redevelopment, for which the estimated total cost to complete these projects through 2028 was $25.6 million to $137.6 million.

interest rates, the imposition of tariffs and other risks detailed in Part I, Item 1A.

Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2024.

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Total Indebtedness

As of March 31, 2025, our consolidated indebtedness aggregated $1,634.3 million, excluding unamortized premium of $1.9 million and net unamortized loan costs of $10.4 million, and was collateralized by 51 properties and related tenant leases.

Stated interest rates on our outstanding indebtedness ranged from 3.99% to SOFR + 3.75% with maturities that ranged from April 28, 2025 to April 15, 2035, without regard to available extension options.

As of June 30, 2025, our consolidated indebtedness aggregated $1,814.5 million, excluding unamortized premium of $1.4 million and net unamortized loan costs of $11.7 million, and was collateralized by 50 properties and related tenant leases.

As of June 30, 2025, stated interest rates on our outstanding indebtedness ranged from 3.99% to SOFR + 3.75% with maturities that ranged from August 1, 2025 to April 15, 2035, excluding available extension options.

With respect to the debt maturing in 2025, we are actively pursuing refinancing the remaining obligations, though there can be no assurance that we can refinance such obligations on favorable terms or at all.

Taking into consideration $939.3 million of notional principal under variable to fixed-rate swap agreements currently in effect, $1,229.4 million of the portfolio debt, or 75.2%, was fixed at a 5.10% weighted average interest rate and $404.8 million, or 24.8%, was floating at a 7.04% weighted average interest rate as of March 31, 2025.

Taking into consideration $1,072.8 million of notional principal under variable to fixed-rate swap agreements currently in effect, $1,362.5 million of the portfolio debt, or 75.1%, was fixed at a 4.92% weighted average interest rate and $451.9 million, or 24.9%, was floating at a 6.99% weighted average interest rate as of June 30, 2025.

Our variable-rate debt includes $111.2 million of debt subject to interest rate caps.

Without regard to available extension options, as of March 31, 2025, we had $471.8 million of debt maturing in 2025 at a weighted-average interest rate of 6.71%;

$4.1 million of scheduled principal amortization due in the remainder of 2025;

and our share of scheduled remaining 2025 principal payments and maturities on our unconsolidated debt was $15.9 million.

In addition, $499.4 million of our total consolidated debt and $15.8 million of our pro-rata share of unconsolidated debt will come due by March 31, 2026.

With respect to the debt maturing in 2025 and 2026, we have options to extend consolidated debt aggregating $363.8 million and $155.4 million as of March 31, 2025 and there can be no assurance that the Company will be able to successfully execute any or all of its available extension options.

Without regard to available extension options, as of June 30, 2025, we had (i) $285.1 million of debt maturing in 2025 at a weighted-average interest rate of 6.99%, (ii) $3.4 million of scheduled principal amortization due in the remainder of 2025 and (iii) $9.6 million of remaining scheduled 2025 principal payments and maturities, representing our pro rata share of our unconsolidated debt.

In addition, $473.6 million of our total consolidated debt and $13.9 million of our pro-rata share of unconsolidated debt will come due by June 30, 2026.

With respect to the debt maturing in 2025 and 2026, we have options to extend consolidated debt aggregating $238.0 million and $205.3 million as of June 30, 2025;

however, there can be no assurance that the Company will be able to successfully execute any or all of its available extension options.

For the remaining indebtedness, we may not have sufficient cash on hand to repay such indebtedness, and, therefore, we expect to refinance at least a portion of this indebtedness or select other alternatives based on market conditions as these loans mature;

however, there can be no assurance that we will be able to obtain financing on acceptable terms or at all.

Our ability to obtain financing could be affected by various risks and uncertainties, including, but not limited to, the effects of the current inflationary environment, rising interest rates, the imposition of tariffs and other risks detailed in Part I, Item 1A.

Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2024.

Share Repurchase Program

We maintain a share repurchase program under which $122.5 million remains available as of March 31, 2025 ( Note 10 ).

We did not repurchase any shares under this program during the three months ended March 31, 2025.

We maintain a share repurchase program under which $122.5 million remains available as of June 30, 2025 ( Note 10 ).

We did not repurchase any shares under this program during the six months ended June 30, 2025.

Sources of Liquidity

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

Our cash on hand in our consolidated subsidiaries as of March 31, 2025 totaled $32.0 million.

Our cash on hand in our consolidated subsidiaries as of June 30, 2025 totaled $42.8 million.

Our remaining sources of liquidity are described further below.

Depending upon the availability and cost of external capital, we believe our sources of capital are sufficient to meet our liquidity needs.

Our historical cash flows uses are reflected in our Condensed Consolidated Statements of Cash Flows and are discussed in further detail below.

Issuances of Common Shares

We have an active ATM Program ( Note 10 ) that provides us with an efficient and low-cost vehicle for raising capital through public equity issuances on an “as-we-go” basis to fund our capital needs.

The 2025 ATM Program ( Note 10 ) provides us with an efficient and low-cost vehicle for raising capital through public equity issuances on an “as-we-go” basis to fund our capital needs.

Through this program, we have been able to effectively “match-fund” the required capital for our Core Portfolio and Investment Management 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 Investment Management acquisitions, and for general corporate purposes.

As of March 31, 2025, we had 2,445,106 forward shares outstanding under the 2025 ATM Program.

The net forward sales price per share of the forward shares under the 2025 ATM program was $22.81 and would result in us receiving $55.8 million in net cash proceeds if we were to physically settle the shares.

In addition, from time to time, we have issued and intend to continue to issue, equity in follow-on offerings separate from the 2025 ATM Program.

Net proceeds raised through the 2025 ATM Program and follow-on offerings are primarily used for acquisitions, both for our Core Portfolio and our pro-rata share of Investment Management acquisitions, and for general corporate purposes.

As of June 30, 2025, we had 2,445,106 forward shares outstanding under the 2025 ATM Program.

The net forward sales price per share of the forward shares under the 2025 ATM program was $22.71 and would result in $55.5 million in net cash proceeds if we were to physically settle the shares.

In March 2025, we settled 11,172,699 shares outstanding under the 2025 ATM forward and received proceeds of $277.9 million.

Investment Management Capital

During the three months ended March 31, 2025, Fund V called for capital contributions of $10.0 million, of which our aggregate share was $2.0 million.

As of March 31, 2025, unfunded capital commitments from noncontrolling interests within Funds II, III, IV and V were $0, $1.4 million, $18.5 million and $32.9 million, respectively.

During the six months ended June 30, 2025, Funds III and V called for capital contributions of $10.5 million, of which our aggregate share was $2.1 million.

As of June 30, 2025, unfunded capital commitments from noncontrolling interests within Funds II, III, IV and V were $0, $1.1 million, $18.5 million and $32.9 million, respectively.

Other Transactions

During the three months ended March 31, 2025 we recognized payments of $8.4 million as rental and termination income related to a lease at City Center in San Francisco ( Note 11 ).

As of March 31, 2025, we held 0.8 million shares of Albertsons which had a fair value of $16.5 million ( Note 8 ).

In addition, during the three months ended March 31, 2025, we recognized dividend income of $0.1 million ( Note 8 ).

During the first quarter of 2025, we recognized payments of $8.4 million as rental and termination income related to a lease at City Center in San Francisco ( Note 11 ).

As of June 30, 2025, we held 0.5 million shares of Albertsons which had a fair value of $10.9 million ( Note 8 ).

In addition, during the six months ended June 30, 2025, we sold 0.2 million shares generating $5.4 million in net proceeds and recognized dividend income of $0.2 million ( Note 8 ).

Financing and Debt

As of March 31, 2025, we had $525.0 million of capacity under existing Core Portfolio debt facilities.

In addition, as of that date within our Core Portfolio and Investment Management portfolio, we had 117 unleveraged consolidated properties with an aggregate carrying value of approximately $1.9 billion, although there can be no assurance that we would be able to obtain financing for these properties at favorable terms, if at all.

During the second quarter of 2025, we drew $175.0 million on our new $250.0 Million Term Loan, and have $75.0 million available.

As of June 30, 2025, we had $471.5 million of capacity under existing Core Portfolio debt facilities.

In addition, as of that date within our Core Portfolio and Investment Management portfolio, we had 136 unleveraged consolidated properties with an aggregate carrying value of approximately $2.2 billion, although there can be no assurance that we would be able to obtain financing for these properties at favorable terms, if at all ( Note 7 ).

HISTORICAL CASH FLOW

The following table compares the historical cash flow for the three months ended March 31, 2025 with the cash flow for the three months ended March 31, 2024 (in millions, totals may not add due to rounding):

Three Months Ended March 31,

The following table compares the historical cash flow for the six months ended June 30, 2025 with the cash flow for the six months ended June 30, 2024 (in millions, totals may not add due to rounding):

Six Months Ended June 30,

Net cash provided by operating activities

Net cash used in investing activities

Net cash (used in) provided by investing activities

Net cash provided by (used in) financing activities

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

Our operating activities provided $0.1 million less cash for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024.

Our operating activities provided $32.7 million more cash for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024 primarily due to the repayment of accrued interest on a note receivable.

Investing Activities

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

Our investing activities used $192.2 million more cash during the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, primarily due to (i) $180.5 million more cash used for the acquisition of real estate, (ii) $6.8 million more cash used for development, construction and property improvement costs, (iii) $5.2 million less cash received from the repayment of note receivable and (iv) 4.0 million less cash received from the sale of marketable securities.

Our investing activities used $414.7 million more cash during the six months ended June 30, 2025 as compared to the six months ended June 30, 2024, primarily due to (i) $333.5 million more cash used for the acquisition of real estate, (ii) $58.7 million less cash received from the disposition of properties, (iii) $12.2 million more cash used for the issuance of notes receivable, (iv) $10.1 million more cash used for development, construction and property improvement costs, and (v) $5.2 million less cash received from the repayment of notes receivable.

Financing Activities

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

Our financing activities provided $207.2 million more cash during the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, primarily from (i) $163.7 million more cash provided by the sale of Common Shares and (ii) $76.9 million more cash from proceeds on mortgages.

Our financing activities provided $380.3 million more cash during the six months ended June 30, 2025 as compared to the six months ended June 30, 2024, primarily from (i) $283.8 million more cash from proceeds on debt, (ii) $135.4 million more cash provided by the sale of Common Shares, (iii) $5.8 million more cash used for financing costs and (iv) $3.4 million less capital distributed to noncontrolling interests.

These increases were offset by (i) $35.3 million less cash provided by contributions from noncontrolling interests and (ii) $13.2 million more used to pay dividends.

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Operating Partnership

March 31, 2025

June 30, 2025

Pro-rata Share of

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Maturity Date

Eden Square (d)

Tri-City Plaza

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Crossroads Shopping Center (c)

(a) Effective interest rates incorporate the effect of interest rate swaps and caps that were in effect as of March 31, 2025, where applicable.

(a) Effective interest rates incorporate the effect of interest rate swaps and caps that were in effect as of June 30, 2025, where applicable.

(b) The debt has one available 12-month extension option.

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CRITICAL ACCOUNTING POLICIES

Management’s discussion and analysis of financial condition and results of operations is based upon our condensed consolidated financial statements, which have been prepared in accordance with GAAP.

Management’s Discussion and Analysis of Financial Condition and Results of Operations in this Report is based upon the Condensed Consolidated Financial Statements, which have been prepared in accordance with GAAP.

The preparation of Condensed Consolidated Financial Statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses.

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

SUPPLEMENTAL U.S.

FEDERAL INCOME TAX CONSIDERATIONS

The following supplements the discussion contained under the heading “Certain U.S.

Federal Income Tax Considerations” in our prospectus dated November 6, 2023.

The One Big Beautiful Bill Act

On July 4, 2025, President Trump signed into law the One Big Beautiful Bill Act, or the OBBBA.

The OBBBA made significant changes to the U.S.

federal income tax laws in various areas.

Among the relevant changes:

• The OBBBA permanently extended certain provisions that were enacted in the Tax Cuts and Jobs Act of 2017, most of which were set to expire after December 31, 2025.

In particular, such extensions included the permanent extension of (i) the 37% tax rate as the highest marginal individual income tax rate on ordinary income and (ii) the 20% deduction for “qualified REIT dividends” for individuals and other non-corporate taxpayers.

• The OBBBA increased the percentage limit under the REIT asset test applicable to taxable REIT subsidiaries, or TRSs, from 20% to 25% for taxable years beginning after December 31, 2025.

As a result, for taxable years beginning after December 31, 2025, the aggregate value of all securities of TRSs held by a REIT may be equal to up to 25% of the value of its gross assets without causing the REIT to fail to qualify as a real estate investment trust.

• Finally, the OBBBA modified the calculation of the business interest deduction limitation under section 163(j) of the Code.

Such limitation is equal to 30% of the taxpayer’s “adjusted taxable income.” Prior to the passage of the OBBBA, for tax years beginning after December 31, 2021, a taxpayer’s “adjusted taxable income” was reduced by depreciation, amortization and depletion.

Pursuant to the OBBBA, “adjusted taxable income” is calculated without regard to such items.

The OBBBA contain complex revisions to the U.S.

federal income tax laws.

Holders of our Common Shares are urged to consult with their tax advisors with respect to the OBBBA and its potential effect on the acquisition, ownership and disposition of our Common Shares.

QUANTITATIVE AND QUALITAT IVE DISCLOSURES ABOUT MARKET RISK.

Information as of March 31, 2025

Information as of June 30, 2025

Our primary market risk exposure is to changes in interest rates related to our property mortgage loans and other debt.

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Currently, we manage our exposure to fluctuations in interest rates primarily through the use of fixed-rate debt and interest rate swap and cap agreements.

As of March 31, 2025, we had total property mortgage loans and other notes payable of $1,634.3 million, excluding the unamortized premium of $1.9 million and net unamortized debt issuance costs of $10.4 million, of which $1,229.4 million, or 75.2% was fixed-rate, inclusive of debt with rates fixed through the use of derivative financial instruments, and $404.8 million, or 24.8%, was variable-rate based upon SOFR or Prime rates plus certain spreads.

As of March 31, 2025, we were party to 28 interest rate swaps and three interest rate cap agreements to hedge our exposure to changes in interest rates with respect to $939.3 million and $111.2 million of variable-rate debt, respectively.

As of June 30, 2025, we had total property mortgage loans and other notes payable of $1,814.5 million, excluding the unamortized premium of $1.4 million and net unamortized debt issuance costs of $11.7 million, of which $1,362.5 million, or 75.1% was fixed-rate, inclusive of debt with rates fixed through the use of derivative financial instruments, and $451.9 million, or 24.9%, was variable-rate based upon SOFR or Prime rates plus certain spreads.

As of June 30, 2025, we were party to 31 interest rate swaps and three interest rate cap agreements to hedge our exposure to changes in interest rates with respect to $1,072.8 million and $111.2 million of variable-rate debt, respectively.

If we decided to employ higher leverage levels, we would be subject to increased debt service requirements and a higher risk of default on our debt obligations, which could adversely affect our financial conditions, cash flows and ability to make distributions to our shareholders.

In addition, increases or changes in interest rates could cause our borrowing costs to rise and may limit our ability to refinance debt.

The following table sets forth information as of March 31, 2025 concerning our long-term debt obligations, including principal cash flows by scheduled maturity (without regard to available extension options) and weighted average effective interest rates of maturing amounts (dollars in millions):

The following table sets forth information as of June 30, 2025 concerning our long-term debt obligations, including principal cash flows by scheduled maturity (without regard to available extension options) and weighted average effective interest rates of maturing amounts (dollars in millions):

Core Consolidated Mortgage and Other Debt

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In addition, $346.9 million of our total consolidated debt and $42.0 million of our pro-rata share of unconsolidated debt will become due in 2026.

As it relates to the aforementioned maturing debt in 2025 and 2026, we have options to extend consolidated debt aggregating $363.8 million and $155.4 million at March 31, 2025, respectively;

As it relates to the aforementioned maturing debt in 2025 and 2026, we have options to extend consolidated debt aggregating $238.0 million and $205.3 million at June 30, 2025, respectively;

however, there can be no assurance that the Company will be able successfully execute any or all of its available extension options.

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After giving effect to noncontrolling interests, our share of this increase would be $2.8 million.

Interest expense on our variable-rate debt of $404.8 million, net of variable to fixed-rate swap agreements currently in effect, as of March 31, 2025, would increase $4.0 million if corresponding rate indices increased by 100 basis points.

Interest expense on our variable-rate debt of $451.9 million, net of variable to fixed-rate swap agreements currently in effect, as of June 30, 2025, would increase $4.5 million if corresponding rate indices increased by 100 basis points.

After giving effect to noncontrolling interests, our share of this increase would be $1.3 million.

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As such, we would consider hedging against the interest rate risk related to such additional variable-rate debt through interest rate swaps and protection agreements, or other means.

Based on our outstanding debt balances as of March 31, 2025, the fair value of our total consolidated outstanding debt would decrease by approximately $12.5 million if interest rates increased by 1%.

Based on our outstanding debt balances as of June 30, 2025, the fair value of our total consolidated outstanding debt would decrease by approximately $11.5 million if interest rates increased by 1%.

Conversely, if interest rates decreased by 1%, the fair value of our total outstanding debt would increase by approximately $6.4 million.

As of March 31, 2025, and December 31, 2024, we had consolidated notes receivable of $125.7 million and $126.6 million, respectively.

As of June 30, 2025, and December 31, 2024, we had consolidated notes receivable of $154.7 million and $126.6 million, respectively.

We determined the estimated fair value of our notes receivable by discounting future cash receipts utilizing a discount rate equivalent to the rate at which similar notes receivable would be originated under conditions then existing.

Based on our outstanding notes receivable balances as of March 31, 2025, the fair value of our total outstanding notes receivable would decrease by approximately $0.6 million if interest rates increased by 1%.

Based on our outstanding notes receivable balances as of June 30, 2025, the fair value of our total outstanding notes receivable would decrease by approximately $1.5 million if interest rates increased by 1%.

Conversely, if interest rates decreased by 1%, the fair value of our total outstanding notes receivable would increase by approximately $1.5 million.

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Conversely, if interest rates decreased by 1%, the fair value of our total outstanding debt would have increased by approximately $9.8 million.

Changes in Market Risk Exposures from December 31, 2024 to March 31, 2025

Our interest rate risk exposure from December 31, 2024, to March 31, 2025, has decreased on an absolute basis, as the $405.4 million of variable-rate debt as of December 31, 2024 has decreased to $404.8 million as of March 31, 2025.

Our interest rate exposure as a percentage of total debt has increased, as our variable-rate debt accounted for 26.2% of our consolidated debt as of December 31, 2024 compared to 24.8% as of March 31, 2025.

Changes in Market Risk Exposures from December 31, 2024 to June 30, 2025

Our interest rate risk exposure from December 31, 2024, to June 30, 2025, has increased on an absolute basis, as the $405.4 million of variable-rate debt as of December 31, 2024 has increased to $451.9 million as of June 30, 2025.

Our interest rate exposure as a percentage of total debt has decreased, as our variable-rate debt accounted for 26.2% of our consolidated debt as of December 31, 2024 compared to 24.9% as of June 30, 2025.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis