Acadia Realty Trust (NYSE:AKR) Q2 2020 Earnings Conference Call - Final Transcript

Aug 06, 2020 • 11:00 am ET

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Acadia Realty Trust (NYSE:AKR) Q2 2020 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Q2 2020 Acadia Realty Trust Earnings Conference Call. [Operator Instructions]

I would now like to hand the conference over to your speaker today, Joy Lu [Phonetic] Thank you. Please go ahead, madam.

Executive
Joy Lu

Good morning, and thank you for joining us for the second quarter 2020 Acadia Realty Trust Earnings Conference Call. My name is Joy Lu, and I am an intern in our Finance and Capital markets Department. Before we begin, please be aware that statements made during the call that are not historical may be deemed forward-looking statements. Within the meaning of the Securities and Exchange Act of 1934, and actual results may differ materially from those indicated by such forward-looking statements.

Due to a variety of risks and uncertainties, including those disclosed in the company's most recent Form 10-K and other periodic filings with the SEC, forward-looking statements speak only as of the date of this call, August 6, 2020, and the company undertakes no duty to update them. During this call, management may refer to certain non-GAAP financial measures. Including funds from operations and net operating income. Please see Acadia's earnings press release posted on its website for reconciliations of these non-GAAP financial measures with the most directly comparable GAAP financial measures. [Operator Instructions]

Now it is my pleasure to turn the call over to Ken Bernstein, President and Chief Executive Officer, who will begin today's management remarks.

Executive
Kenneth Bernstein

Thank you, Joy. Well done, and thank you to all of our summer interns this summer. Welcome, everybody. While we have plenty of details that we're going to drill into today, I think it's worth beginning with an overview of the progress that we have made since our last earnings call. As you may recall, back in April, we announced we were at a 50% collection rate. And of the 50% of tenants not paying, about half of them were national credit tenants seeking rent to maintenance. By June, we saw many of the nonpaying credit tenants back off their initial positions of force majeure, and recommenced paying such that by the end of the second quarter, we were collecting in excess of 70% cash. And then inclusive of short-term strategic deferrals with national credit tenants we are at above 80%. Also, we're seeing continued improvement in collections such that June was better than May, July better than June, and August is showing positive trends as well.

So the first question is how solid is that 80%? Well, we have longer-term leases with average lease roll of less than 10% a year over the next three years. We have a nice blend of credit, essential retailers, high-quality locations and strong demand. But we need to take into account the fact that there still is credit loss, rollover and supply demand pricing pressures. And additionally, we're still in the very early days of understanding which segments of the consumer will be most impacted and most sidelined as government support