Acquisition and Disposition of Properties and Discontinued Operations

A. Acquisition and Disposition of Properties

Acquisitions

During 2013, the Company acquired the following properties through its Core Portfolio and Funds as follows:

Core Portfolio



(dollars in millions)
Property	GLA	Percent Owned	Type	Month of Acquisition	Purchase Price		Location
664 N Michigan Avenue	18,141	100%	Street Retail	March	$	86.6	Chicago, IL
8-12 East Walton	8,244	100%	Street Retail	June	22.5		Chicago, IL
3200-3204 M Street	7,000	100%	Street Retail	July	11.8		Washington, D.C.
868 Broadway	2,031	100%	Street Retail	December	13.5		New York, NY
313-315 Bowery	6,600	100%	Street Retail	December	5.5		New York, NY
120 West Broadway (1)	13,988	100%	Street Retail	December	37.0		New York, NY
Total	56,004				$	176.9

Note:

(1) This acquisition was primarily funded with the issuance of 1.2 million OP Units.

The Company expensed $2.7 million of acquisition costs for the year ended December 31, 2013 related to the Core Portfolio.

Fund III

Fund III had previously acquired a $23.0 million note receivable at a discounted price of $18.5 million during April 2012. The note receivable, which was scheduled to mature in May 2012, was collateralized by a 79,526 square foot shopping center located in Brooklyn, New York ("Nostrand Place"). The Company commenced foreclosure proceedings, but ultimately agreed to a settlement with the unaffiliated borrower. Pursuant to the settlement, in February 2013, Fund III and the borrower formed a joint venture whereby Fund III contributed its interest in the note for a 99% controlling interest in the joint venture, and the borrower contributed the deed to Nostrand Place in exchange for a 1% interest in the joint venture. As a result, Fund III consolidates its investment in Nostrand Place.

The Company expensed $0.8 million of acquisition costs for the year ended December 31, 2013 related to Fund III.

ACADIA REALTY TRUST AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2. Acquisition and Disposition of Properties and Discontinued Operations, continued

Fund IV



(dollars in millions)
Property	GLA	Percent Owned		Type	Month of Acquisition	Purchase Price		Location
2819 Kennedy Boulevard (1)	53,680	90	%	Shopping Center	June	$	9.0	North Bergen, NJ
Promenade at Manassas (1)	265,442	90	%	Shopping Center	July	38.0		Manassas, VA
Paramus Plaza	152,118	50	%	Shopping Center	September	18.9		Paramus, NJ
1151 Third Avenue	12,288	100	%	Street Retail	October	18.0		New York, NY
Lake Montclair	105,850	100	%	Shopping Center	October	19.3		Dumfries, VA
938 W North Avenue	35,000	80	%	Street Retail	November	20.0		Chicago, IL
Total	624,378					$	123.2

Note:

(1) As the joint venture partners to these investments maintain operating control over the investments, these are accounted for under the equity method.

The Company expensed $2.0 million of acquisition costs for the year ended December 31, 2013 related to Fund IV.

The above acquisitions have been accounted for as business combinations. The purchase prices were allocated to the acquired assets and assumed liabilities based on the Company's current best estimate of fair value of these acquired assets and assumed liabilities at the dates of acquisition. The preliminary measurements of fair value reflected below are subject to change. The Company expects to finalize the valuations and complete the purchase price allocations within one year from the dates of acquisition.

The following table summarizes both the Company's preliminary allocations of the purchase prices of assets acquired and liabilities assumed during 2013:



(dollars in thousands)	Preliminary Purchase Price Allocation
Land	$	65,829
Buildings and Improvements	253,724
Total Consideration	$	319,553

During 2012, the Company acquired properties and recorded the preliminary allocation of the purchase price to the assets acquired based on provisional measurements of fair value. During 2013, the Company finalized the allocation of the purchase price and made certain measurement period adjustments. The following table summarizes the preliminary allocation of the purchase price of properties as recorded as of December 31, 2012, and the finalized allocation of the purchase price as adjusted as of December 31, 2013:

ACADIA REALTY TRUST AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2. Acquisition and Disposition of Properties and Discontinued Operations, continued



(dollars in thousands)	Preliminary Purchase Price Allocation		Adjustments			Finalized Purchase Price Allocation
Land	$	86,826	$	30,312		$	117,138
Buildings and Improvements	226,650		(32,440		)	194,210
Acquisition-related intangible assets (in Acquired lease intangibles, net)	—		31,965			31,965
Acquisition-related intangible liabilities (in Acquired lease intangibles, net)	—		(27,592		)	(27,592		)
Above-below market debt assumed (included in Mortgages and other notes payable)	—		(2,245		)	(2,245		)
Total Consideration	$	313,476	$	—		$	313,476

Dispositions

During 2013, the Company disposed of the following properties:

Core Portfolio

During 2013, the Company sold the A&P Shopping Center, a 62,741 square foot center, anchored by an A&P supermarket, located in Boonton, New Jersey, for $18.4 million, which resulted in a gain of $6.5 million.

Fund II



(dollars in thousands) Property	Month Sold	Sales Price		Gain/(Loss)			GLA
Pelham Storage	May	$	11,900	$	4,226		490,900
Fordham Place	November	133,900		(806		)	262,407
Pelham Plaza	November	58,500		8,894			228,493
Total		$	204,300	$	12,314		981,800

B. Discontinued Operations

The Company reports properties sold and held-for-sale during the periods as discontinued operations. The assets and liabilities and results of operations of discontinued operations are reflected as a separate component within the accompanying consolidated financial statements for all periods presented.

The combined assets and liabilities as of December 31, 2013 and 2012, and the results of operations of the properties classified as discontinued operations for the years ended December 31, 2013, 2012 and 2011, are summarized as follows:

ACADIA REALTY TRUST AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2. Acquisition and Disposition of Properties and Discontinued Operations, continued



(dollars in thousands)
BALANCE SHEETS	December 31, 2013		December 31, 2012
ASSETS
Net real estate	$	17,991	$	210,633
Rents receivable, net	565		10,484
Deferred charges, net	38		8,531
Prepaid expenses and other assets	1,840		8,629
Total assets of discontinued operations	$	20,434	$	238,277
LIABILITIES
Mortgages payable	$	—	$	124,005
Accounts payable and accrued expenses	1,473		4,735
Other liabilities	1,034		7,416
Total liabilities of discontinued operations	$	2,507	$	136,156



	Years ended December 31,
(dollars in thousands)	2013			2012			2011
STATEMENTS OF INCOME
Total revenues	$	20,920		$	56,902		$	57,613
Total expenses	14,102			44,895			48,680
Operating income	6,818			12,007			8,933
Impairment of assets	(6,683		)	—			(6,925		)
Loss on debt extinguishment	(800		)	(2,541		)	—
Gain on sale of properties	18,802			71,203			46,830
Income from discontinued operations	18,137			80,669			48,838
Income from discontinued operations attributable to noncontrolling interests	(12,048		)	(64,582		)	(15,894		)
Income from discontinued operations attributable to Common Shareholders	$	6,089		$	16,087		$	32,944