What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-07-29 compared with 2026-04-29 · 146 added, 86 removed, 286 unchanged (45% of the section changed)

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Investment Management (“IM”) :

Through its investment management platform, the Company manages opportunistic and value-add retail real estate investments alongside institutional partners through its strategic opportunity funds (Fund II, Fund III, Fund IV, and Fund V) and select co-investment ventures.

From time to time, assets previously held in the Company’s opportunity funds may be recapitalized or transitioned into new joint ventures with third-party partners as part of the portfolio lifecycle, while the Company retains an ownership interest and continues its role as operator and manager.

Through its Investment Management platform, the Company manages opportunistic and value-add retail real estate investments through its strategic opportunity funds (Fund II, Fund III, Fund IV, and Fund V) and select co-investment ventures.

While Fund III, Fund IV and Fund V currently include institutional partner capital, Fund II is presently wholly owned by the Company and is being managed within the IM platform, with the potential for future third-party capital participation.

From time to time, assets previously held in the Company’s strategic opportunity funds may be recapitalized or transitioned into new joint ventures with third-party partners as part of the portfolio lifecycle, while the Company retains an ownership interest and continues its role as operator and manager.

The Company earns management fees and, in certain cases, incentive-based performance fees.

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 its subsidiaries.

As of March 31, 2026, the Trust controlled approximately 96% of the Operating Partnership as its sole general partner.

As of March 31, 2026, the Company owned or had an ownership interest in 231 properties, including development or redevelopment projects ( Note 1 ).

As of June 30, 2026, the Trust controlled approximately 96% of the Operating Partnership as its sole general partner.

As of June 30, 2026, the Company owned or had an ownership interest in 231 properties, including development or redevelopment projects ( Note 1 ).

The Company’s operating income is primarily derived from rental revenues from operating properties, including tenant expense recoveries, net of property operating and corporate overhead expenses.

In addition, the Company maintains a Structured Financing (“SF”) program through which it selectively invests in first mortgage loans and other real estate-backed notes.

The following table summarizes the Company’s wholly owned and partially owned retail properties and related physical occupancy as of March 31, 2026:

The following table summarizes the Company’s wholly owned and partially owned retail properties and related physical occupancy as of June 30, 2026:

Number of Properties

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(1) Includes 12 pre-stabilized properties in the REIT Portfolio.

SIGNIFICANT ACTIVITIES DURING 2026 AND SUBSEQUENT EVENTS

SIGNIFICANT ACTIVITIES DURING 2026

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

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

During the first quarter of 2026, the Company completed a number of transactions across its REIT Portfolio and Investment Management segments reflecting continued portfolio growth and deepening of relationships with key institutional partners.

During the six months ended June 30, 2026, the Company completed a number of transactions across its REIT Portfolio and Investment Management segments reflecting continued portfolio growth and deepening of relationships with key institutional partners.

REIT Portfolio

Within the REIT Portfolio, the Company continued to selectively deploy capital into retail assets located in established, high-barrier markets.

During the quarter, the Company completed consolidated acquisitions totaling approximately $78.7 million, including:

During six months ended June 30, 2026, the Company completed consolidated acquisitions totaling approximately $198.4 million, including:

• $110.2 million acquisition of retail condominium units at 4-6 and 28 Newbury Street in Boston, MA;

• $43.5 million acquisition of retail units at 225 Worth Avenue in Palm Beach, Florida;

• $21.3 million acquisition of retail condominium units at 1045 and 1165 Madison Avenue in New York City;

• $9.6 million acquisition of a retail unit at 129 Fifth Avenue in New York City;

• $9.5 million strategic add-on acquisition of ground-lease interests at Rhode Island Place in Washington, D.C.;

• $4.4 million strategic add-on acquisition of a retail property and residential units at 846 West Armitage Avenue in Chicago.

These acquisitions were integrated into the Company’s existing REIT Portfolio and are consolidated.

In April 2026, the Company closed a $108.9 million acquisition of retail condominium units at 4-6 and 28 Newbury Street in Boston ( Note 16 ).

These acquisitions were integrated into the Company’s existing REIT Portfolio and are consolidated ( Note 2 ).

In July 2026, the Company acquired a single-tenant retail building at 8800-8804 Melrose Avenue in West Hollywood, California for $29.0 million, which was added to the REIT Portfolio.

During the same period, the Company disposed of the parking garage at 1035 Third Avenue in New York, New York, a consolidated Fund IV Investment Management property, for $8.3 million ( Note 16 ).

Investment Management

During the first quarter of 2026, the Company completed several transactions through its Investment Management segment, consisting of equity investments in unconsolidated joint ventures and recapitalizations of existing assets ( Note 2 , Note 4 ).

During the six months ended June 30, 2026, the Company completed several transactions through its Investment Management segment, consisting of equity investments in unconsolidated joint ventures and recapitalizations of existing assets ( Note 2 , Note 4 ).

In January 2026, the Company acquired a 20% equity interest in a joint venture that purchased the Shops at Skyview, a retail shopping center located in Queens, New York, for a total purchase price of $424.1 million.

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The transaction resulted in the deconsolidation of the property and the recognition of a gain on deconsolidation of $4.1 million.

During the first quarter of 2026, the Company completed consolidated property dispositions within its Investment Management platform totaling approximately $104.6 million, including the sale of Landstown Commons for $102.0 million and the sale of 1964 Union Street for $2.6 million ( Note 2 ).

During the six months ended June 30, 2026, the Company completed consolidated property dispositions within its Investment Management platform totaling approximately $128.1 million, including the sale of Landstown Commons for $102.0 million, the sale of 1964 Union Street for $2.6 million and the sale of New Towne Center for $23.5 million ( Note 2 ).

During the six months ended June 30, 2026, the Company completed unconsolidated property dispositions within its Investment Management platform totaling approximately $83.0 million, including the sale of 650 Bald Hill Road for $20.5 million, and the sale of Tri-City Plaza for $62.5 million ( Note 4 ).

These transactions reflect the Company’s continued execution of its strategic objectives, including portfolio growth, balance sheet optimization, and the expansion of its Investment Management platform.

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The Company also terminated related interest rate hedges in conjunction with these repayments.

On April 17, 2026, the Company entered into the Fourth Amended and Restated Credit Facility, which extended the maturity of our $525.0 million revolving credit facility (the size of which remained unchanged) from April 15, 2028 to April 17, 2030 (subject to two six-month extension options), increased our existing $400.0 million term loan to $512.5 million and extended its maturity from April 15, 2028 to April 17, 2031, and provided for a new $137.5 million term loan maturing April 17, 2031.

On April 17, 2026, we entered into the Fourth Amended and Restated Credit Facility, which extended the maturity of our $525.0 million revolving credit facility (the size of which remained unchanged) from April 15, 2028 to April 17, 2030 (subject to two six-month extension options), increased our existing $400.0 million term loan to $512.5 million and extended its maturity from April 15, 2028 to April 17, 2031, and provided for a new $137.5 million term loan maturing April 17, 2031.

The existing $250.0 million term loan maturing May 29, 2030 remained unchanged.

The Fourth Amended and Restated Credit Facility also includes an accordion feature permitting the Operating Partnership, at its option and subject to customary conditions, to increase total capacity to up to $2.0 billion.

We believe the refinancing extended our weighted average debt maturity and enhanced our liquidity position.

We believe the refinancing extended our weighted average debt maturity and enhanced our liquidity position ( Note 7 ).

Common Share Activity

In March 2026, we settled 2,445,106 outstanding forward shares under the Company’s $500.0 million “at-the-market” program (the “ATM Program”) and received proceeds of $55.9 million, which were used to reduce outstanding borrowings and fund investment activity.

On June 11, 2026, we completed a forward equity offering of 9,000,000 Common Shares at an initial forward sale price of $21.80 per share.

In July 2026, the underwriters partially exercised their over-allotment option for an additional 242,996 Common Shares.

We did not receive any proceeds at the time of the offering and related underwriters’ option exercise;

upon settlement of the forward sale agreements, which must occur within one-year of the effective date, we expect to receive net proceeds of approximately $201.1 million, which we intend to use to fund acquisition opportunities, repay outstanding indebtedness, and for general corporate purposes.

We believe the offering provides additional flexibility to manage the timing of our capital raising activities relative to our capital needs.

During the six months ended June 30, 2026, we settled 6,209,562 outstanding forward shares under the Company’s $500.0 million “at-the-market” program (the “ATM Program”) and received proceeds of $128.0 million.

This included settlements of $55.9 million in March and $72.1 million in June.

Proceeds were used to reduce outstanding borrowings and fund investment activity ( Note 10 ).

Economic and Other Considerations

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RESULTS OF OPERATIONS

Comparison of Results for the Three Months Ended March 31, 2026 to the Three Months Ended March 31, 2025

The results of operations by reportable segment for the three months ended March 31, 2026 compared to the three months ended March 31, 2025 are summarized in the table below (in millions, totals may not add due to rounding):

Comparison of Results for the Three Months Ended June 30, 2026 to the Three Months Ended June 30, 2025

The results of operations by reportable segment for the three months ended June 30, 2026 compared to the three months ended June 30, 2025 are summarized in the table below (in millions, totals may not add due to rounding):

Three Months Ended

March 31, 2026

March 31, 2025

June 30, 2026

June 30, 2025

Rental revenue

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Impairment charges

Gain (loss) on disposition of properties

Operating income

Interest income

Equity in (losses) earnings 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 (income) loss attributable to noncontrolling interests

Net income attributable to Acadia shareholders

REIT Portfolio

Net income attributable to Acadia shareholders for the REIT Portfolio increased $1.9 million compared to the prior year period.

Rental revenue increased $8.2 million, primarily reflecting $4.5 million from acquisitions completed during 2025 and 2026 and $3.0 million from tenant lease-up activity.

Depreciation and amortization increased $1.6 million, property operating expenses increased $1.4 million, and real estate taxes increased $1.2 million, primarily due to new property acquisitions in 2026 and 2025.

Interest expense increased $2.5 million, primarily due to higher average outstanding borrowings associated with acquisitions completed during 2025 and 2026.

Investment Management

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

Net income attributable to Acadia shareholders for Investment Management increased $7.5 million compared to the prior year period.

Rental revenue decreased $15.4 million primarily due to reduced rental income following property dispositions and recapitalization activity within Fund V completed in 2026.

Other revenue increased $1.5 million primarily due to higher fee income from acquisitions completed during 2025 and 2026.

Depreciation and amortization, property operating expenses and real estate taxes decreased $5.6 million, $1.8 million, and $1.8 million, respectively, primarily due to the Fund V recapitalization and the disposition of Landstown Commons in 2026.

Equity in earnings of unconsolidated affiliates increased $17.7 million primarily due to the gain on sale of Tri-City Plaza, and gain on disposition of properties increased $4.4 million primarily due to the sale of New Towne Center, both completed in 2026.

Results also benefited from the absence of an $18.2 million impairment charge recognized in the prior year period.

Interest expense decreased $5.9 million, primarily due to the Fund V recapitalization and disposition activity completed in 2026.

Net income attributable to noncontrolling interests increased $33.3 million reflecting 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 $1.7 million for the three months ended June 30, 2026, compared to $2.4 million for the prior year period.

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.”

Comparison of Results for the Six Months Ended June 30, 2026 to the Six Months Ended June 30, 2025

The results of operations by reportable segment for the six months ended June 30, 2026 compared to the six months ended June 30, 2025, are summarized in the table below (in millions, totals may not add due to rounding):

Six Months Ended

June 30, 2026

June 30, 2025

Rental revenue

Other revenue

Depreciation and amortization

Property operating expenses

Real estate taxes

General and administrative expenses

Impairment charges

Gain on disposition of properties

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REIT Portfolio

Segment net income attributable to Acadia shareholders for our REIT Portfolio decreased $0.5 million for the three months ended March 31, 2026 compared to the prior year period as a result of the changes further described below.

Rental revenues for our REIT Portfolio decreased $1.2 million for the three months ended March 31, 2026 compared to the prior year period, primarily reflecting $8.4 million of non-recurring rental and termination income recognized in 2025 from Whole Foods at City Center in San Francisco, CA, partially offset by (i) $4.8 million from REIT acquisitions completed in 2025 and 2026 and (ii) $1.7 million related to the acquisition of an additional interest in, and consolidation of, the Renaissance Portfolio in 2025.

Interest expense for our REIT Portfolio increased $2.9 million for the three months ended March 31, 2026 compared to the prior year period primarily due to higher average outstanding borrowings in 2026 to partially fund investment activity.

Loss on change in control of $9.6 million recognized in the prior year period resulted from the remeasurement to fair value of the Company’s previously held equity method investment upon acquiring an additional 48% controlling interest in the Renaissance Portfolio in 2025 ( Note 2 ).

Realized and unrealized holding gains on investments and other of $1.8 million in the prior-year period resulted from a change in the mark-to-market adjustment on the investment in marketable securities, which was liquidated in 2025.

Net income attributable to noncontrolling interests for our REIT Portfolio increased $1.4 million for the three months ended March 31, 2026 compared to the prior year period based on the noncontrolling interests’ share of the variances discussed above.

Net income attributable to Acadia shareholders for the REIT Portfolio increased $1.4 million compared to the prior year period.

Rental revenue increased $7.1 million, primarily reflecting $7.6 million from acquisitions completed during 2025 and 2026, $6.0 million from tenant lease-up activity, and $2.1 million from the 2025 consolidation of the Renaissance Portfolio, partially offset by the absence of $8.4 million of non-recurring rental and termination income recognized in the prior year period from Whole Foods at City Center.

Depreciation and amortization, property operating expenses, and real estate taxes increased $2.2 million, $2.1 million, and $1.7 million, respectively, primarily due to acquired properties.

Interest expense increased $5.5 million due to higher average outstanding borrowings associated with acquisitions completed during 2025 and 2026.

Results also benefited from the absence of a $9.6 million loss on change in control recognized in the prior year period upon the consolidation of the Renaissance Portfolio.

Realized and unrealized holding gains (losses) decreased $2.0 million due to changes in mark-to-market adjustments on marketable securities that were liquidated in 2025.

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 increased $34.1 million for the three months ended March 31, 2026 compared to the prior year period as a result of the changes described below.

Rental revenues for Investment Management decreased $2.9 million for the three months ended March 31, 2026 compared to the prior year period due to Fund V property sales completed in 2026.

Other revenues for Investment Management increased $2.7 million for the three months ended March 31, 2026 compared to the prior year period primarily reflecting higher fee income from new Investment Management acquisitions in 2025 and 2026.

An impairment charge of $6.5 million was recognized in 2025 related to a shortened expected hold period at one Fund III property ( Note 8 ).

Gain on disposition of properties of $142.1 million recognized in 2026 was related to the Fund V recapitalization and the dispositions of Landstown Commons and Avenue at West Cobb.

Interest expense for Investment Management decreased $4.2 million for the three months ended March 31, 2026 compared to the prior year period primarily due to the Fund V recapitalization and disposition of Landstown Commons in 2026.

Net income attributable to noncontrolling interests for Investment Management increased $119.5 million for the three months ended March 31, 2026 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 $2.0 million for the three months ended March 31, 2026 compared to $2.3 million for the prior year period.

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 $3.7 million for the three months ended March 31, 2026 compared to the prior year period primarily due to higher compensation expenses, legal expenses, and other transaction costs in 2026.

The increase in expense for the three months ended March 31, 2026 includes accelerated compensation cost related to a modification of vesting provisions in connection with a change in expected service period.

Net income attributable to Acadia shareholders for Investment Management increased $41.7 million compared to the prior year period.

Rental revenue decreased $18.3 million primarily due to Fund V property dispositions completed in 2026.

Other revenue increased $4.2 million primarily due to higher fee income from acquisitions completed during 2025 and 2026.

Depreciation and amortization, property operating expenses and real estate taxes decreased $5.6 million, $2.6 million and $2.6 million, respectively, primarily due to Fund V property dispositions completed in 2026.

Gain on disposition of properties increased $146.5 million primarily due to the Fund V recapitalization and the dispositions of Landstown Commons, New Towne Center and Avenue at West Cobb.

Equity in earnings of unconsolidated affiliates increased $18.2 million primarily due to the gain on sale of Tri-City Plaza in 2026.

Results also benefited from the absence of $24.6 million of impairment charges recognized in the prior year period.

Interest expense decreased $10.1 million primarily due to the Fund V recapitalization and disposition activity completed in 2026.

Net income attributable to noncontrolling interests increased $152.8 million reflecting the noncontrolling interests' share of the variances discussed above.

Structured Financing

Interest income for our Structured Financing portfolio decreased $1.3 million for the three months ended March 31, 2026 compared to the prior year period primarily due to the partial redemption of the redeemable noncontrolling interest of the City Point Loan in 2025 ( Note 10 ).

Interest income from the Structured Financing portfolio decreased $1.2 million to $11.3 million primarily due to a lower average outstanding investment balance following repayments received during 2025, including the partial repayment of the City Point Loan in 2025.

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 $4.0 million to $27.1 million primarily due to higher compensation, legal and transaction-related costs.

The increase also included accelerated compensation expense resulting from a modification of vesting provisions associated with a change in expected service period

NON-GAAP FINANCIAL MEASURES

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A reconciliation of consolidated operating income to net operating income - REIT 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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The following table summarizes Same-Property NOI for our REIT Portfolio (dollars in thousands):

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

REIT 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, 2026

Three Months Ended June 30, 2026

Six Months Ended June 30, 2026

REIT Portfolio New and Renewal Leases

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

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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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, 2026, we paid dividends and distributions on our Common Shares and preferred units of limited partnership interest (“Preferred OP Units”) totaling $28.4 million.

As previously discussed, during the three months ended March 31, 2026, we deployed approximately $181.3 million in cash outlays related to acquisitions within our REIT Portfolio and equity investments and recapitalizations completed through our Investment Management platform.

During the six months ended June 30, 2026, we paid dividends and distributions on our Common Shares and preferred units of limited partnership interest (“Preferred OP Units”) totaling $56.8 million.

As previously discussed, during the six months ended June 30, 2026, we deployed approximately $252.9 million in cash outlays related to acquisitions within our REIT Portfolio and equity investments and recapitalizations completed through our Investment Management platform.

Structured Financing Investments

During the three months ended March 31, 2026, we provided advances under preferred equity investments aggregating to $69.2 million ( Note 4 ).

During the six months ended June 30, 2026, we provided advances under preferred equity investments aggregating to $69.3 million ( Note 4 ).

Capital Commitments

As of March 31, 2026, our share of the remaining capital commitments to the Funds aggregated $11.5 million as follows:

As of June 30, 2026, our share of the remaining capital commitments to the Funds aggregated $11.0 million as follows:

• $0.2 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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We do not have any additional capital commitments to the Funds other than the remaining amounts described above.

Additionally, the Company has committed to fund tenant improvements under executed leases totaling approximately $49.8 million and $44.1 million, as of March 31, 2026 and December 31, 2025, respectively.

Additionally, the Company has committed to fund tenant improvements under executed leases totaling approximately $63.3 million and $44.1 million, as of June 30, 2026 and December 31, 2025, respectively.

The Company’s share of these obligations is approximately $46.6 million and $37.1 million, respectively ( Note 9 ).

Development Activities

During the three months ended March 31, 2026, capitalized costs associated with development activities totaled $11.0 million ( Note 2 ).

As of March 31, 2026, 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 $91.3 million to $122.2 million, respectively.

During the six months ended June 30, 2026, capitalized costs associated with development activities totaled $27.2 million ( Note 2 ).

As of June 30, 2026, we estimated total cost to complete development and redevelopment projects through 2028 was approximately $90.7 million to $128.4 million, respectively.

These estimates exclude assets for which redevelopment or development plans are still being evaluated and for which costs are not yet determinable.

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Total Indebtedness

As of March 31, 2026, our consolidated indebtedness aggregated $1,604.3 million, excluding $0.7 million of unamortized premium and $8.7 million of net unamortized loan costs, and was secured by 37 properties and related tenant leases.

Maturities on our outstanding indebtedness ranged from May 1, 2026 to April 15, 2035, excluding available extension options.

Taking into consideration $1,054.4 million of notional principal under variable-to-fixed interest rate swap agreements currently in effect, $1,305.5 million, or 81.4%, of the Company’s consolidated debt was fixed at a weighted-average interest rate of 4.67%, and $298.8 million, or 18.6%, was floating at a weighted-average interest rate of 5.73% as of March 31, 2026.

As of June 30, 2026, our consolidated indebtedness aggregated $1,652.3 million, excluding $0.5 million of unamortized premium and $15.8 million of net unamortized loan costs, and was secured by 35 properties and related tenant leases.

Maturities on our outstanding indebtedness ranged from November 6, 2026 to April 15, 2035, excluding available extension options.

Taking into consideration $1,034.2 million of notional principal under variable-to-fixed interest rate swap agreements currently in effect, $1,284.6 million, or 77.7%, of the Company’s consolidated debt was fixed at a weighted-average interest rate of 4.52%, and $367.7 million, or 22.3%, was floating at a weighted-average interest rate of 5.13% as of June 30, 2026.

Variable-rate debt included $32.2 million subject to interest rate cap agreements.

Without regard to available extension options, as of March 31, 2026, we had (i) $233.4 million of consolidated debt maturing in 2026 at a weighted-average interest rate of 6.11%, (ii) $2.5 million of scheduled principal amortization due during the remainder of 2026, and (iii) $46.7 million representing the Company’s pro-rata share of scheduled principal payments and maturities on unconsolidated debt during 2026.

Without regard to available extension options, as of June 30, 2026, we had (i) $159.9 million of consolidated debt maturing in 2026 at a weighted-average interest rate of 5.88%, (ii) $1.9 million of scheduled principal amortization due during the remainder of 2026, and (iii) $31.5 million representing the Company’s pro-rata share of scheduled principal payments and maturities on unconsolidated debt during 2026.

In addition, $160.3 million of consolidated debt and $44.8 million representing the Company’s pro-rata share of unconsolidated debt will mature by March 31, 2027.

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Share Repurchase Program

We maintain a share repurchase program under which $122.5 million remains available as of March 31, 2026 ( Note 10 ).

We did not repurchase any shares under this program during the three months ended March 31, 2026.

We maintain a share repurchase program under which $122.5 million remains available to repurchase as of June 30, 2026 ( Note 10 ).

We did not repurchase any Common Shares under this program during the six months ended June 30, 2026.

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, and (vi) cash on hand and future cash flow from operating activities.

Our cash on hand in our consolidated subsidiaries as of March 31, 2026 totaled $31.4 million.

Our cash on hand in our consolidated subsidiaries as of June 30, 2026 totaled $33.0 million.

Our remaining sources of liquidity are described further below.

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Our 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.

As of March 31, 2026, we physically settled 2,445,106 forward shares under the ATM Program in exchange for aggregate net proceeds of $55.9 million, which were used to reduce outstanding borrowings and fund investment activity.

As of March 31, 2026, we had unsettled forward equity contracts to sell 12,293,731 shares for estimated aggregate net cash proceeds of $239.2 million.

We also had $199.1 million of remaining availability for future share issuance under the ATM program.

During the six months ended June 30, 2026, we physically settled 6,209,562 forward shares under the ATM Program in exchange for aggregate net proceeds of $128.0 million, which were used to reduce outstanding borrowings and fund investment activity.

As of June 30, 2026, we had unsettled forward equity contracts to sell 17,771,271 shares (including 9,242,996 Common Shares sold in an underwritten public offering in June 2026 and related underwriters’ option exercise) for estimated aggregate net cash proceeds of $368.8 million.

We also had $199.1 million of remaining availability for future share issuance under the ATM Program ( Note 10 ).

Investment Management Capital

As of March 31, 2026, unfunded capital commitments from noncontrolling interests within Funds II, III, IV and V were zero, $0.6 million, $18.5 million and $22.9 million, respectively.

As of June 30, 2026, unfunded capital commitments from noncontrolling interests within Funds III, IV and V were $0.6 million, $16.7 million and $22.9 million, respectively.

We have no remaining commitments from Fund II ( Note 1 ).

Financing and Debt

As of March 31, 2026, we had $433.5 million of capacity under existing REIT Portfolio debt facilities.

As of June 30, 2026, we had $490.7 million of capacity under existing REIT Portfolio debt facilities.

In addition, our REIT Portfolio and Investment Management platform included 146 unleveraged consolidated properties with an aggregate carrying value of approximately $2.5 billion;

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HISTORICAL CASH FLOW

The following table compares the historical cash flow for the three months ended March 31, 2026 with the cash flow for the three months ended March 31, 2025 (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, 2026 with the cash flow for the six months ended June 30, 2025 (in millions, totals may not add due to rounding):

Six Months Ended June 30,

Net cash provided by operating activities

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Net cash provided by operating activities primarily reflects the Company’s operating results, adjusted for non-cash items and changes in working capital.

Net cash provided by operating activities increased by $5.5 million for the three months ended March 31, 2026 compared to the prior year period, primarily reflecting improved operating performance driven by acquisition activity and additional lease‑up activity across the portfolio.

Net cash provided by operating activities was relatively flat, decreasing by $1.1 million for the six months ended June 30, 2026 compared to the prior year period, despite a $194.5 million increase in net income.

The increase in net income was largely driven by non-cash and non-operating items, primarily a $146.1 million gain on property dispositions, that do not impact operating cash flow.

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.

Net cash provided by investing activities increased by $563.6 million for the three months ended March 31, 2026 compared to the prior year period, primarily due to (i) $543.7 million of higher cash inflows from real estate dispositions and (ii) $102.7 million of lower cash outflows for acquisitions.

These increases were partially offset by (i) $62.8 million of higher cash used for investments in unconsolidated affiliates and (ii) $12.6 million of increased spending on development, construction, and property improvements.

Net cash provided by investing activities increased by $662.9 million for the six months ended June 30, 2026 compared to the prior year period, primarily due to (i) $572.0 million of higher cash inflows from real estate dispositions, (ii) $148.3 million of lower cash outflows for acquisitions, (iii) $20.0 million less cash used for the issuance of a note receivable, and (iv) $15.1 million of higher return of capital from unconsolidated affiliates.

These increases were partially offset by (i) $63.1 million of higher cash used for investments in unconsolidated affiliates, (ii) $9.8 million of increased spending on development, construction, and property improvements, (iii) $7.1 million of lower refunds of deposits for properties under contract, (iv) $6.8 million of cash received in the prior year upon the consolidation of a previously unconsolidated investment that did not recur, and (v) $5.4 million of proceeds from the sale of marketable securities in the prior year that did not recur.

Financing Activities

Net cash provided by 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.

Net cash used in financing activities increased by $593.8 million for the three months ended March 31, 2026 compared to the prior year period, primarily due to (i) $221.7 million of lower proceeds from the issuance of Common Shares, (ii) $199.3 million of increased repayments of debt, (iii) $158.6 million of higher capital distributions to noncontrolling interests, (iv) $8.0 million of lower contributions from noncontrolling interests, and (v) $3.5 million of higher dividend payments.

Net cash used in financing activities increased by $697.5 million for the six months ended June 30, 2026 compared to the prior year period, primarily due to (i) $150.2 million of lower proceeds from the issuance of Common Shares, (ii) $331.5 million of increased net repayments of debt, (iii) $187.0 million of higher capital distributions to noncontrolling interests, (iv) $8.6 million more cash used to acquire noncontrolling interests, (v) $2.5 million of lower contributions from noncontrolling interests, and (vi) $4.0 million of higher dividend payments.

Unconsolidated Indebtedness

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Operating Partnership

March 31, 2026

June 30, 2026

Pro-rata Share of

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Maturity Date

Tri-City Plaza

Frederick County Square

650 Bald Hill Rd

Wood Ridge Plaza

Frederick County Square

Georgetown Portfolio

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Pinewood Square (b)

(a) Effective interest rates incorporate the effect of interest rate swaps and caps that were in effect as of March 31, 2026, where applicable.

(a) Effective interest rates incorporate the effect of interest rate swaps and caps that were in effect as of June 30, 2026, where applicable.

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

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(d) The debt has one available 24-month extension option.

CRITICAL ACCOUNTING POLICIES

CRITICAL ACCOUNTING ESTIMATES

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.

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

We base our estimates on historical experience and assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about carrying value of assets and liabilities that are not readily apparent from other sources.

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QUANTITATIVE AND QUALITAT IVE DISCLOSURES ABOUT MARKET RISK.

Information as of March 31, 2026

Information as of June 30, 2026

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, 2026, total property mortgage loans and other notes payable aggregated $1,604.3 million, excluding $0.7 million of unamortized premium and $8.7 million of net unamortized debt issuance costs.

As of June 30, 2026, total property mortgage loans and other notes payable aggregated $1,652.3 million, excluding $0.5 million of unamortized premium and $15.8 million of net unamortized debt issuance costs.

Of this amount, $1,284.6 million, or 77.7%, was fixed-rate, including debt with rates effectively fixed through the use of derivative financial instruments, and $367.7 million, or 22.3%, was variable-rate based upon the Secured Overnight Financing Rate (“SOFR”) or Prime rates plus applicable spreads.

As of March 31, 2026, we were party to 30 interest rate swap agreements and one interest rate cap agreement, which together hedged interest rate exposure on $1,054.4 million and $32.2 million of variable-rate debt, respectively.

As of June 30, 2026, we were party to 28 interest rate swap agreements and one interest rate cap agreement, which together hedged interest rate exposure on $1,034.2 million and $32.2 million of variable-rate debt, respectively.

If the Company decided to employ higher leverage levels, it would be subject to higher debt service requirements and an increased risk of default, which could adversely affect financial condition, cash flows and ability to make distributions to shareholders.

In addition, increases or changes in interest rates could increase borrowing costs and may limit the Company’s ability to refinance its indebtedness.

The following table sets forth information as of March 31, 2026 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, 2026 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):

REIT Portfolio Consolidated Mortgage and Other Debt

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In addition, $106 million of consolidated debt and $60.5 million representing our pro-rata share of unconsolidated debt will mature in 2027.

With respect to this maturing debt, we have extension options on consolidated debt aggregating $134.2 million maturing in 2026 and $96.3 million maturing in 2027 as of March 31, 2026;

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

With respect to this maturing debt, we have extension options on consolidated debt aggregating $160.3 million maturing in 2026 and $48.5 million maturing in 2027 as of June 30, 2026;

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

The Company expects to refinance some or all of such debt at the then-prevailing market interest rates, which may be greater than the current interest rates.

Based on outstanding balances, a 100 basis point increase in interest rates on refinanced debt would increase annual interest expense by approximately $3.6 million, of which the Company’s pro-rata share would be $2.3 million.

As of March 31, 2026, the Company had variable-rate debt of $298.8 million, net of variable-to-fixed interest rate swap agreements currently in effect.

As of June 30, 2026, the Company had variable-rate debt of $367.7 million, net of variable-to-fixed interest rate swap agreements currently in effect.

A 100 basis point increase in applicable interest rate indices would increase annual interest expense on such debt by approximately $3.7 million, of which the Company’s pro-rata share would be $2.1 million.

We may seek additional variable-rate financing if pricing and other commercial and financial terms are favorable and would consider hedging associated interest rate risk through interest rate swaps and protection agreements, or other means.

Based on our outstanding debt balances as of March 31, 2026, the estimated fair value of our total consolidated outstanding debt would decrease by approximately $7.6 million assuming a 100 basis point increase in interest rates.

Based on our outstanding debt balances as of June 30, 2026, the estimated fair value of our total consolidated outstanding debt would decrease by approximately $7.0 million assuming a 100 basis point increase in interest rates.

Conversely, a 100 basis point decrease in interest rates would increase the estimated fair value of our total outstanding debt by approximately $4.8 million.

As of March 31, 2026, and December 31, 2025, we had consolidated notes receivable of $154.4 million and $154.9 million, respectively.

As of June 30, 2026, and December 31, 2025, we had consolidated notes receivable of $154.5 million and $154.9 million, respectively.

The estimated fair value of our notes receivable was determined 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, 2026, a 100 basis point increase in interest rates would decrease the estimated fair value of our total outstanding notes receivable by approximately $1.1 million, while a 100 basis point decrease would increase the estimated fair value by approximately $1.1 million.

Based on our outstanding notes receivable balances as of June 30, 2026, a 100 basis point increase in interest rates would decrease the estimated fair value of our total outstanding notes receivable by approximately $0.8 million, while a 100 basis point decrease would increase the estimated fair value by approximately $0.8 million.

Summarized Information as of December 31, 2025

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Conversely, if interest rates decreased by 1%, the fair value of our total outstanding debt would have increased by approximately $6.1 million.

Changes in Market Risk Exposures from December 31, 2025 to March 31, 2026

Our interest rate risk exposure from December 31, 2025, to March 31, 2026, has decreased on an absolute basis, as the $370.6 million of variable-rate debt as of December 31, 2025 has decreased to $298.8 million as of March 31, 2026.

Our interest rate exposure as a percentage of total debt has decreased, as our variable-rate debt accounted for 19.8% of our consolidated debt as of December 31, 2025 compared to 18.6% as of March 31, 2026.

Changes in Market Risk Exposures from December 31, 2025 to June 30, 2026

Our interest rate risk exposure from December 31, 2025, to June 30, 2026 has decreased on an absolute basis, as the $370.6 million of variable-rate debt as of December 31, 2025 has decreased to $367.7 million as of June 30, 2026.

Our interest rate exposure as a percentage of total debt has increased, as our variable-rate debt accounted for 19.8% of our consolidated debt as of December 31, 2025 compared to 22.3% as of June 30, 2026.

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