Shareholders' Equity, Noncontrolling Interests and Other Comprehensive Loss

12 Months Ended

Dec. 31, 2022

Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest [Abstract]

Shareholders' Equity, Noncontrolling Interests and Other Comprehensive Loss

10. Shareholders’ Equity, Noncontrolling Interests and Other Comprehensive Loss

Common Shares and Units

In addition to the ATM Program activity discussed below, the Company completed the following transactions in its Common Shares during the year ended December 31, 2022:

•The Company withheld 3,235 restricted shares of its Common Shares ("Restricted Shares") to pay the employees’ statutory minimum income taxes due on the value of the portion of their Restricted Shares that vested.

•The Company recognized Common Share and Common OP Unit-based compensation expense totaling $7.4 million in connection with Restricted Shares and Units (Note 13).

In addition to the ATM Program and share repurchase activity discussed below, the Company completed the following transactions in its Common Shares during the year ended December 31, 2021:

•The Company withheld 3,050 Restricted Shares to pay the employees’ statutory minimum income taxes due on the value of the portion of their Restricted Shares that vested.

•The Company recognized Common Share and Common OP Unit-based compensation expense totaling $9.4 million in connection with Restricted Shares and Units (Note 13).

ATM Program

The Company has an at-the-market equity issuance program (“ATM Program”) that provides the Company an efficient vehicle for raising public equity capital to fund its needs. The Company entered into its current $250.0 million ATM Program, which includes an optional “forward purchase” component, in the first quarter of 2022. The Company has not issued any shares on a forward basis during the year ended December 31, 2022 or 2021 and had approximately $222.3 million of availability under the ATM program. During the year ended December 31, 2022 the Company sold 5,525,419 Common Shares under its ATM Program for gross proceeds of $123.9 million, or $119.5 million net of issuance costs, at a weighted-average gross price per share of $22.43. During the year ended December 31, 2021, the Company sold 2,889,371 Common Shares under its ATM Program for gross proceeds of $64.9 million, or $63.9 million net of issuance costs, at a weighted-average gross price per share of $22.46. During the year ended December 31, 2020, the Company did not sell any Common Shares under its ATM Program.

Share Repurchase Program

During 2018, the Company’s board of trustees (the “Board”) approved a new share repurchase program, which authorizes management, at its discretion, to repurchase up to $200.0 million of its outstanding Common Shares. The program does not obligate the Company to repurchase any specific number of Common Shares and may be discontinued or extended at any time. The Company did not repurchase any shares during the year ended December 31, 2022 or 2021. Under the share repurchase program $122.5 million remains available at December 31, 2022.

Dividends and Distributions

The following table sets forth the distributions declared and/or paid during the periods presented:

Date Declared	Amount Per Share		Record Date	Payment Date
March 15, 2021	$	0.15	March 31, 2021	April 15, 2021
May 5, 2021	$	0.15	June 30, 2021	July 15, 2021
August 5, 2021	$	0.15	September 30, 2021	October 15, 2021
November 3, 2021	$	0.15	December 31, 2021	January 14, 2022
February 15, 2022	$	0.18	March 31, 2022	April 14, 2022
May 4, 2022	$	0.18	June 30, 2022	July 15, 2022
August 10, 2022	$	0.18	September 30, 2022	October 14, 2022
November 9, 2022	$	0.18	December 30, 2022	January 13, 2023

Accumulated Other Comprehensive Income (Loss)

The following tables set forth the activity in accumulated other comprehensive income (loss) for the years ended December 31, 2022, 2021 and 2020 (in thousands):

	Acadia's Share
Balance at January 1, 2022	$	(36,214	)
Other comprehensive income before reclassifications - swap agreements		96,858
Reclassification of realized interest on swap agreements		8,232
Net current period other comprehensive income		105,090
Net current period other comprehensive loss attributable to redeemable noncontrolling    interests		—
Net current period other comprehensive income attributable to noncontrolling    interests		(22,059	)
Balance at December 31, 2022	$	46,817
Balance at January 1, 2021	$	(74,891	)
Other comprehensive income before reclassifications - swap agreements		30,500
Reclassification of realized interest on swap agreements		21,407
Net current period other comprehensive income		51,907
Net current period other comprehensive income attributable to noncontrolling    interests		(13,230	)
Balance at December 31, 2021	$	(36,214	)
Balance at January 1, 2020	$	(31,474	)
Other comprehensive loss before reclassifications		(73,686	)
Reclassification of realized interest on swap agreements		15,059
Net current period other comprehensive loss		(58,627	)
Net current period other comprehensive income attributable to noncontrolling    interests		15,210
Balance at December 31, 2020	$	(74,891	)

Noncontrolling Interests

The following tables summarize the change in the noncontrolling interests for the years ended December 31, 2022, 2021 and 2020 (dollars in thousands):

	Noncontrolling Interests in Operating Partnership (a)			Noncontrolling Interests in Partially-Owned Affiliates (b)			Total			Redeemable Noncontrolling Interests (c)
Balance at January 1, 2022	$	94,120		$	534,202		$	628,322		$	—
Distributions declared of $0.72 per Common OP Unit and distributions on Preferred OP Units		(5,094	)		—			(5,094	)		—
Net loss for the year ended December 31, 2022		(1,308	)		(22,962	)		(24,270	)		(5,536	)
Conversion of 234,473 Common OP Units to Common Shares by limited partners of the Operating Partnership		(3,945	)		—			(3,945	)		—
Other comprehensive income - unrealized gain on valuation of swap agreements		4,641			15,567			20,208			—
Reclassification of realized interest expense on swap agreements		58			1,793			1,851			—
Acquisition of noncontrolling interest (d)		—			(91,811	)		(91,811	)		—
City Point Loan		—			—			—			(65,391	)
City Point Loan accrued interest		—			—			—			(3,923	)
Noncontrolling interest contributions		—			109,428			109,428			65,945
Noncontrolling interest distributions		—			(79,838	)		(79,838	)		—
Employee Long-term Incentive Plan Unit Awards		10,000			—			10,000			—
Reclassification of redeemable noncontrolling interests(e)		—			(76,569	)		(76,569	)		76,569
Reallocation of noncontrolling interests (f)		1,082			—			1,082			—
Balance at December 31, 2022	$	99,554		$	389,810		$	489,364		$	67,664
Balance at January 1, 2021	$	89,431		$	519,734		$	609,165		$	—
Distributions declared of $0.60 per Common OP Unit		(4,185	)		—			(4,185	)		—
Net income for the year ended December 31, 2021		2,075			407			2,482			—
Conversion of 89,765 Common OP Units to Common Shares by limited partners of the Operating Partnership		(1,431	)		—			(1,431	)		—
Cancellation of OP units(g)		(568	)		—			(568	)		—
Other comprehensive income - unrealized gain on valuation of swap agreements		2,072			3,918			5,990			—
Reclassification of realized interest expense on swap agreements		210			7,030			7,240			—
Noncontrolling interest contributions		—			30,164			30,164			—
Noncontrolling interest distributions		—			(27,051	)		(27,051	)		—
Employee Long-term Incentive Plan Unit Awards		11,284			—			11,284			—
Reallocation of noncontrolling interests (f)		(4,768	)		—			(4,768	)		—
Balance at December 31, 2021	$	94,120		$	534,202		$	628,322		$	—

Balance at January 1, 2020	$	97,670		$	548,769		$	646,439		$	—
Distributions declared of $0.29 per Common OP Unit		(2,218	)		—			(2,218	)		—
Net income (loss) for the year ended December 31, 2020		125			(56,867	)		(56,742	)		—
Conversion of 407,594 Common OP Units to Common Shares by limited partners of the Operating Partnership		(6,544	)		—			(6,544	)		—
Other comprehensive loss - unrealized loss on valuation of swap agreements		(2,709	)		(17,995	)		(20,704	)		—
Reclassification of realized interest expense on swap agreements		174			5,320			5,494			—
Noncontrolling interest contributions		—			52,174			52,174			—
Noncontrolling interest distributions		—			(27,574	)		(27,574	)		—
Employee Long-term Incentive Plan Unit Awards		10,130			—			10,130			—
Rebalancing adjustment (c)		(7,197	)		—			(7,197	)		—
Acquisition of noncontrolling interest		—			15,918			15,918			—
Cumulative effect of change in accounting principle		—			(11	)		(11	)		—
Balance at December 31, 2020	$	89,431		$	519,734		$	609,165		$	—

a)Noncontrolling interests in the Operating Partnership are comprised of (i) the limited partners’ 3,062,108, 3,076,849, and 3,101,958 Common OP Units at December 31, 2022, 2021 and 2020, respectively; (ii) 188 Series A Preferred OP Units at December 31, 2022, 2021 and 2020; (iii) 126,384 Series C Preferred OP Units at December 31, 2022 and 126,593 at December 31, 2021 and 2020; and (iv) 3,512,414, 3,371,296, and 2,886,207 LTIP units at December 31, 2022, 2021 and 2020, respectively, as discussed in Share Incentive Plan (Note 13). Distributions declared for Preferred OP Units are reflected in net income (loss) in the table above.

b)Noncontrolling interests in partially-owned affiliates comprise third-party interests in Funds II, III, IV and V, and Mervyns II, and seven other subsidiaries.

c)Redeemable noncontrolling interests comprise third-party interest in Fund II as limited partners in this Fund have been granted put rights.

d)Represents the acquisition of the 11.67% noncontrolling interest in Fund II and Mervyns II acquired on June 27, 2022 for $18.5 million and 21.67% in Fund II on August 1, 2022 for $5.8 million (Note 1).

e)Represents the reclassification of redeemable noncontrolling interests related to the City Point Loan in the third quarter of 2022.

f)Adjustment reflects the difference between the fair value of the consideration received or paid and the book value of the Common Shares, Common OP Units, Preferred OP Units, and LTIP Units involving changes in ownership.

g)The Company exchanged 21,109 OP Units in settlement of a note receivable in the amount of $0.5 million on July 12, 2021 (Note 3).

Preferred OP Units

There were no issuances of Preferred OP Units during the year ended December 31, 2022 or 2021.

In 1999 the Operating Partnership issued 1,580 Series A Preferred OP Units in connection with the acquisition of a property, which have a stated value of $1,000 per unit, and are entitled to a preferred quarterly distribution of the greater of (i) $22.50 (9.00% annually) per Series A Preferred OP Unit or (ii) the quarterly distribution attributable to a Series A Preferred OP Unit if such unit was converted into a Common OP Unit. Through December 31, 2022, 1,392 Series A Preferred OP Units were converted into 185,600 Common OP Units and then into Common Shares. The 188 remaining Series A Preferred OP Units are currently convertible into Common OP Units based on the stated value divided by $7.50. Either the Company or the holders can currently call for the conversion of the Series A Preferred OP Units at the lesser of $7.50 or the market price of the Common Shares as of the conversion date.

During 2016, the Operating Partnership issued 442,478 Common OP Units and 141,593 Series C Preferred OP Units to a third party to acquire Gotham Plaza (Note 4). The Series C Preferred OP Units have a value of $100.00 per unit and are entitled to a preferred quarterly distribution of $0.9375 per unit and are convertible into Common OP Units at a rate based on the share price at the time of conversion. If the share price is below $28.80 on the conversion date, each Series C Preferred OP Unit will be convertible into 3.4722 Common OP Units. If the share price is between $28.80 and $35.20 on the conversion date, each Series C Preferred OP Unit will be convertible into a number of Common OP Units equal to $100.00 divided by the closing share price. If the share price is above $35.20 on the conversion date, each Series C Preferred OP Unit will be convertible into 2.8409 Common OP Units. The Series C Preferred OP Units have a mandatory conversion date of December 31, 2025, at which time all units that have not been converted will automatically be converted into Common OP Units based on the same calculations. Through December 31, 2022, 15,209 Series C Preferred OP Units were converted into 52,613 Common OP Units and then into Common Shares.

Redeemable Noncontrolling Interests

Williamsburg Portfolio

In connection with the Williamsburg Portfolio acquisition in February 2022 (Note 2), the Company evaluated the Williamsburg Noncontrolling Interest ("NCI"), which represents the venture partner's one-time right to put its 50.01% interest in the property to the Company for redemption at fair value at a future date. As it was unlikely as of the acquisition date that the venture partner would receive any consideration on redemption due to the Company’s preferential returns, the initial fair value of the Williamsburg NCI was determined to be zero. The Company is required to periodically evaluate the NCI and adjust it to redemption value. At December 31, 2022, the Company determined that the fair value of the Williamsburg NCI was zero.

City Point Loan

In August 2022, the Company provided a loan, through a separate lending subsidiary, to other Fund II investors in City Point, through a separate borrower subsidiary, to fund the investors' pro rata contribution necessary to complete the refinancing of the City Point debt (Note 7), of which $65.9 million was funded at closing ("City Point Loan"). The City Point Loan has a five-year term which matures on August 1, 2027 and is collateralized by the investors' equity in City Point ("City Point NCI"). Because the City Point Loan was granted in return for a capital contribution from the investors, and is collateralized by the City Point NCI, the City Point Loan, net of a $0.5 million allowance for credit loss, and accrued interest are presented as a reduction of the City Point NCI balance. The borrower subsidiary of the City Point Loan was determined to be a variable interest entity ("VIE") for which the Company is not the primary beneficiary. The maximum loss in the VIE is limited to the amount of the City Point Loan and any accrued interest.

In connection with the City Point Loan, each partner has a one-time right to put its City Point NCI to the Company for redemption in exchange for the settlement of its proportion of the City Point Loan amount plus either (i) a fixed cash amount or (ii) a cash amount equal to the value of fixed number of Common Shares of the Company on the trading day prior to the election, at a future point in time beginning in August 2023 ("redemption value"). As a result of granting these redemption rights, the City Point NCI, net of the City Point Loan, has been reclassified and presented as redeemable noncontrolling interests on the Company's consolidated balance sheets. Given the carrying value of the City Point NCI at the time of the transaction exceeded the maximum redemption value, the Company did not recognize any initial adjustment to accrete the City Point NCI to the redemption value. The Company is required to periodically evaluate the maximum redemption amount of the NCI interest and recognize an increase in the carrying value of the City Point NCI if the redemption value exceeds the then current carrying value. At December 31, 2022, the Company determined that the carrying value exceeded the maximum redemption value and no adjustment was required.