아카디아 리얼티 트러스트(AKR) 2026년 3분기 실적 발표 콘퍼런스 콜: 스트리트 리테일이 10.2% NOI 성장 견인

핵심 요약

• 조정 FFO는 주당 0.31달러로 전년 동기의 0.29달러 대비 7% 증가했습니다. 2026년 첫 9개월 동안 조정 FFO는 거의 10% 증가한 주당 0.92달러를 기록했습니다.
• 2026년 3분기 동일자산 순영업소득(NOI)은 10.2% 성장했습니다. 안정화된 외곽 포트폴리오의 성장이 2.5%에 그친 반면, 스트리트 리테일 NOI는 15% 이상 증가했습니다.
• 아카디아는 연간 동일자산 NOI 성장률 전망치를 7.5%~8.5%로 상향 조정했으나, 조정 FFO 가이던스는 주당 1.24달러~1.26달러로 유지했습니다.
• 계약 체결 후 미개점(signed-not-open) 파이프라인은 아카디아 지분 기준 연간 기본 임대료(ABR) 2,200만 달러로 역대 최고치를 기록했으며, 이는 풀 런레이트(full run rate) 기준 주당 약 0.11달러의 추가 FFO에 해당합니다.
• 아카디아는 이번 분기 약 1억 5,000만 달러 규모의 스트리트 리테일 자산을 인수하여 2026년 누적 인수액은 3억 5,000만 달러, 2년간 총 인수액은 8억 5,000만 달러에 달했습니다.
• 경영진은 지난 3년간 스트리트 리테일 시장 임대료가 연평균 12% 이상 상승한 반면, 포트폴리오 임대료는 시장가 대비 약 25% 낮은 수준을 유지하고 있다고 밝혔습니다.

핵심 재무 데이터

사업 및 운영 실적

스트리트 리테일이 주요 성장 동력 역할을 계속했습니다. 시카고의 동일자산 NOI는 20% 이상 증가했고, 소호는 16%, 윌리엄스버그는 약 10% 성장했습니다. 스트리트 자산은 전년 동기 대비 300만 달러 이상의 추가 NOI를 창출했으며, 이는 주당 FFO 약 0.02달러에 해당합니다.

경영진은 이러한 실적의 배경으로 타이트한 공급, D2C 매장 확대, 공정시장가치에 맞춘 임대료 조정을 꼽았습니다. 어퍼 매디슨 애비뉴, 소호, 멜로즈 플레이스에 위치한 6개 매장이 평균 54%의 임대료 인상률로 시가 재조정되었으며, 임대료는 5.5년 전 이전 시장 재조정 시점 대비 약 90% 상승했습니다.

보고된 스트리트 임차인의 매출은 2022년 이후 연평균 20% 이상 증가했습니다. 스트리트 포트폴리오의 매출 대비 임대료 비율은 12%를 유지했으며, 이는 경영진이 건전한 스트리트 리테일 사업의 상한선으로 보는 20% 수준을 하회하는 수치입니다.

소호 지역의 시장 임대료는 최근 3년간 연평균 약 20% 상승했습니다. 아카디아는 동일점포군 내 19개 매장 중 15개 매장의 계약을 재조정하거나 회수하여 평균 30% 이상의 임대료 인상을 확보했습니다. 그럼에도 경영진은 소호 포트폴리오가 여전히 시장가 대비 약 30% 낮은 수준이라고 추정합니다.

달라스 헨더슨 애비뉴의 경우 리테일 공간의 90% 이상이 임대 계약 완료 단계에 있습니다. 경영진은 해당 프로젝트가 일정과 예산에 맞춰 진행되고 있으며, 임차인 입점은 2027년 전체 및 2028년까지 이어질 것으로 예상된다고 밝혔습니다.

이번 분기의 약 1억 5,000만 달러 인수건에는 소호, 웨스트 빌리지, 웨스트포트, 그리니치, 웨스트 홀리우드의 부동산이 포함되었습니다. 경영진은 최근 인수한 자산들이 3년 이내에 6% 이상의 현금 수익률을, 안정화 시점에는 7% 이상의 수익률을 지속적으로 달성하고 있다고 설명했습니다. 2분기에 공실 상태로 매입한 129 피프스 애비뉴의 경우 30일 이내에 임대차 계약이 체결되어 취득원가 대비 예상 수익률이 9%를 상회했습니다.

경영진 가이던스

아카디아는 4분기의 견조한 실적 전망을 반영해 연간 동일자산 NOI 성장률 가이던스를 7.5%~8.5%로 상향 조정했습니다. 조정 FFO 가이던스는 주당 1.24달러~1.26달러로 유지되었습니다.

현재 계약 체결 후 미개점 파이프라인은 2026년 4분기에 주당 약 0.01달러, 2027년에 추가로 0.06달러~0.08달러, 잔여분은 2028년에 추가 FFO를 기여할 것으로 예상됩니다. 이 금액에는 계약상 임대료 인상, 향후 재계약 및 시가 반영 이익, 자금 조달 활동, 외연적 성장은 포함되지 않았습니다.

파이프라인의 3분의 1 이상이 2026년 4분기에, 또 다른 3분의 1은 2027년 1분기에 개시될 예정입니다. 계약 체결 후 미개점 임대차 계약의 대부분은 2027년 말까지 개시될 것으로 예상됩니다. 아카디아는 공식적인 2027년 가이던스를 발표하지 않았으나, 경영진은 기존 파이프라인과 2026년 중 개점한 임대 계약의 연간 기여분이 강력한 동일자산 NOI 성장을 또 한 번 이끌 것으로 보았습니다.

리스크 및 주요 관찰 사항

금리 상승은 자본 시장의 역풍과 거래 가격 조정의 불확실성을 유발하고 있습니다. 경영진은 완만한 가격 인하가 현재 거래 성사에 도움이 되고 있으나, 이러한 금리 변동이 지속적인 가격 재조정으로 이어질지는 아직 판단하기 이르다고 언급했습니다.

아카디아는 분기 말 기준 약 3억 5,000만 달러의 미헤지 변동금리 부채를 보유하고 있었습니다. 이 중 약 1억 달러는 단기 내 매각 예정인 투자 관리 자산과 관련이 있어, 리츠 포트폴리오에는 약 2억 5,000만 달러가 남게 됩니다. 또한 회사는 약 12억 달러 규모의 금리 스왑 및 캡 계약을 체결해 둔 상태입니다.

투자 관리 사업에서의 순매각은 매각 대금이 재투자되기 전까지 수수료와 NOI를 일시적으로 감소시킵니다. 경영진은 이러한 시차를 동일자산 NOI 전망치 상향 조정이 연간 FFO 가이던스 증가로 이어지지 않은 주요 원인으로 꼽았습니다.

노스 미시간 애비뉴는 세금 및 보유 비용으로 인해 주당 수 센트의 부정적 영향을 계속 미치고 있습니다. 그럼에도 경영진은 임차인 활동이 개선되고 있으며 해당 거리의 다른 자산에 대해 경쟁 입찰이 들어오고 있다고 보고했습니다.

경영진은 하드랜딩이나 스태그플레이션의 리스크도 인정했지만, 두 시나리오 모두 현재 포트폴리오 상황이나 리테일 업체들의 피드백을 반영하지는 않는다고 말했습니다.

애널리스트 Q&A 주요 내용

• 2027년 실적 여건: 경영진은 계약 체결 후 미개점 임대 계약의 기여를 실질적으로 상쇄할 만한 알려진 퇴거 건은 없다고 밝혔습니다. 단기적으로 가장 큰 상쇄 요인은 투자 관리 자산 매각과 자금 재투입 사이의 시차입니다.
• 추가 임대 파이프라인: 협상이 진행 중인 1,500만 달러 이상의 잠재적 ABR은 2027년과 2028년 모두에 기여할 수 있으며, 경영진은 2028년에 더 큰 영향이 나타날 것으로 예상합니다.
• 점유율 상승 여력: 과거 스트리트 리테일 점유율은 97% 가깝게 최고치를 기록한 바 있습니다. 경영진은 임대차 완료, 공정시장가치 조정, 재개발을 통해 유의미한 상승 여력이 있을 것으로 예상했으나 전체 실적 기여도를 수치화하지는 않았습니다.
• 헨더슨 애비뉴 자금 조달: 아카디아는 선도주식 정산금의 상당 부분을 약 2억 달러 규모의 프로젝트 지출 일정과 맞출 것으로 예상하고 있습니다. 경영진은 해당 투자에 대해 약 9%의 수익률을 목표로 하고 있습니다.
• 선셋 파크 자금 조달: 아카디아는 취득 원가를 낮추는 2,000만 달러의 지불금을 수령한 후 부채 자본 구조 전반에 걸쳐 입지를 강화했습니다. 경영진은 안정화 시 한 자릿수 후반의 수익률을 기대하고 있으며, 변동금리 자산 및 부채 구조를 자연 헤지로 보고 있습니다.

실적 발표 전화회의 전문

전체 실적 발표 컨퍼런스 콜 녹취록

경영진 발표

Operator

Good day, and thank you for standing by. Welcome to the Q3 2026 Acadia Realty Trust Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions] [Operator Instructions] I would now like to hand the conference over to your speaker today, Bonnie Salisbury, Head of Investor Relations.

Unknown Executive

Good morning, and thank you for joining us for the Third Quarter 2026 Acadia Realty Trust Earnings Conference Call. 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, November 2, 2026, 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.

Kenneth Bernstein

Thank you, Bonnie. Welcome, everyone.

As you can see in our press release, we had another strong quarter as the performance of our street retail portfolio continues to drive our results. The team will get into the details, but before they do, I want to take a step back and talk about the macroeconomic climate we are in and how we have positioned Acadia to continue our peer-leading growth. For most of this century, we operated in a low inflation, low interest rate and lower for longer environment. That was then coupled with the additional headwinds from the so-called retail Armageddon as the supply of retail outpaced demand. This caused the industry to be more focused on achieving stability rather than capturing embedded growth. Landlords and lenders often favored duration in exchange for limited contractual growth and granted far too many fixed renewal options, preventing leases from being mark-to-market in a reasonable time period.

The thought being, if there was no particular catalyst for growth in a disinflationary environment, the risk of agreeing to exceptionally long-term, lower growth leases seem benign. In other words, Weighted Average Lease Term or WALT was far more important than compounded annual growth rate or CAGR.

Over the last few years, our economy has pivoted to a higher for longer inflationary environment. And thankfully, for retail real estate, this is now coupled with very strong fundamentals. The challenge in this environment is this. Even when market rents grow, how do we as landlords actually capture that growth in a reasonable time period because recognizing a 30% lease spread after 30 years is hardly ground for celebration. This is where our street retail portfolio is best positioned to capture this growth.

Along with stronger contractual growth and lower relative CapEx, our street retail leases are structured with fair market value resets. This enables us to capture market rent growth much sooner than other open-air formats.

Now we are seeing strong market rent growth in almost every component of our portfolio. The lack of new development has created the strongest supply-demand dynamic we've seen in decades, but market rent growth, especially on a net effective basis, has been strongest in the street retail segment of our portfolio.

Over the last three years, market rent growth in our street retail portfolio has averaged north of 12% annually and there's no sign of this abating. Quite frankly, our team tells me it's accelerating. And just as important, occupancy costs are remaining healthy as tenant sales growth in our portfolio is keeping pace with that rent growth.

Now there are several reasons for this increased demand, but the most important has been the continued drive of direct-to-consumer real estate, meaning brands reducing their reliance on department stores and increasing the necessity for their own stores. And this trend is most pronounced on our key streets.

The store is also doing more work than it used to, driving online sales, lowering customer acquisition costs and reducing return costs across the trade area. And as we have built scale in a given corridor, our curation is further increasing sales productivity and thus further driving our performance. When we combine this market rent growth with our ability to more frequently mark-to-market rents through our F&B resets, we are well positioned to capture that growth.

In SoHo, for example, over the past three years, market rents have grown at a compounded annual rate of 20% a year. During that same time period, our team has marked to market via pry loose and FMV resets 15 of the 19 storefronts in our same-store pool, achieving average rent increases of over 30%. And even so, we estimate that our SoHo portfolio still remains about 30% below market and with a weighted average lease term of approximately five years and FMV resets embedded in our leases, we have a clear path to capturing that additional growth in the relative near term.

Then on the suburban side, we're also seeing market rent growth driven by a resilient consumer, strong tenant demand, lack of supply. The challenge in our suburban assets is our ability to get to market rent increases early enough due to the significant contractual options embedded in those leases.

So what this all boils down to is that our historic expectation of street retail income growing 200 to 300 basis points faster than suburban NOI now feels conservative. In a higher for longer environment, we think we will be well rewarded for positioning our portfolio with a major focus on our key streets where tenant demand and waiting list continue to be the norm.

Now keep in mind, while higher inflation and higher interest rates are certainly concerning, and are creating headwinds in the capital markets, I fear we're losing sight of the fact that inflation at the levels of the past few years has been a net tailwind for retail real estate performance. The consumer is understandably grumpy about inflation. For some, it means struggling to make ends meet. And for even affluent consumers, they are beginning to prematurely sound like their grandparents when they look at prices today compared to a few years ago. But given the strong job market, the strong stock market, the consumer is remaining resilient, especially at more elevated levels of this economy.

And this explains why retailer demand and retailer performance in our portfolio has been strong. And with tenant top line sales increasing, both due to inflation as well as strong consumer demand, the rental growth we are achieving is understandable.

Now there's always the risk that we end up with a hard landing or some form of modern-day stagflation. And while this is always worth watching for, that is not the current economic backdrop we're seeing. And it's not what our retailers are telling us. Compared to prior cycles, retailers have much better data as to who their shopper is, how and where they shop and are using this data to pick their locations on a disciplined and on a rational basis, and their performance is proving this out.

Then on the transaction side, Reggie will walk through the specifics, including the approximately $150 million of street retail we added earlier this quarter. As a result of these acquisitions, we are now beginning to achieve the benefits of scale we have discussed over the past few years, and this growth is also bringing us that much closer to being the premier owner operator of street retail in the U.S.

Our goals have been clear and remain unchanged. We are only adding assets that check all of our boxes that are accretive to net asset value, accretive to our earnings and that move us forward in achieving our outsized growth goals. And nothing about the increased interest rate environment makes us inclined to lower our levered return requirements. And thankfully, as it relates to potential street retail acquisitions, as the dominant institutional player in those markets where we're most active, we have a unique position, both as to deal flow and tenant demand.

So in conclusion, the demand backdrop, the structure of our leases and our focus and scale on key streets are driving our results today. Our strong top line growth is hitting the bottom line and setting us up for continued strong growth going forward. And while we do not need acquisitions to drive results, our liquidity and investment capacity positions us to accelerate that growth.

With that, I'd like to thank the team for their continued hard work, and I will hand the call over to A.J. Levine.

A.J. Levine

Thanks, Ken. Good morning, everyone. As Ken discussed, we had another very strong quarter of internal growth. We executed approximately $8.4 million in new leases with approximately 75% of that ABR coming from our street and urban markets.

Looking forward, even after several quarters of record activity, our leasing pipeline continues to grow and currently stands at over $15 million of additional ABR being actively negotiated. That includes new leases on North 6th Street in Williamsburg, Bleecker Street in the West Village, Armitage Avenue in Chicago, M Street in Georgetown, several new leases on Henderson Avenue in Dallas and now the momentum we've seen over the past year in San Francisco is showing up on our other large-format urban spaces like North Michigan Avenue in Chicago.

Regarding the performance of our streets, here's what I can tell you. As Ken mentioned, since the start of 2023, on average, rents on our streets have grown at an annual compounding rate north of 12%, ranging from 8% annual growth on the low end, up to 23% on the high end. If you signed a lease on one of our streets just three years ago at $200 a square foot, the market rent for that same space is now approaching $300 a square foot.

And as Ken discussed, because street leases contain fair market resets as opposed to pre-negotiated contractual options, the mechanism will be in place for you to harvest that growth in the relative near term. Fair market resets inert to our favor, allowing us to mark-to-market every five years with a minimum increase of 3%, whereas decades of pre-negotiated contractual options favor only the tenant. Those benefits played out in the third quarter, allowing us to mark-to-market six spaces on Upper Madison Avenue in SoHo and on Melrose Place at an average leasing spread of 54% and approximately 90% higher than the last time those spaces rolled to market just 5.5 years ago.

In other words, market rents on those spaces have nearly doubled in a little over five years. And instead of being locked into an under market rent, we used fair market resets to capture that growth. As Ken touched on, the primary driver of that growth is the continued shift of retailers from wholesale to DTC, which has given us a broad, high-quality pool of tenants that would have historically been focused on department stores and other wholesale channels as well as major European brands entering the U.S. And those brands catering to the higher earning consumer continue to perform.

Running parallel to market rent growth, tenant sales have grown as well. Same-store sales CAGR since 2022 in our reporting street tenants sits just north of 20%, and our street rent-to-sales ratio remains a healthy 12%, well below the 20% threshold generally associated with street retail.

With our streets approximately 25 -- I'm sorry, our street portfolio approximately 25% below market, the math is compelling. Even if tenant sales were to slow, market rents could continue to grow at 5% annually for another 4.5 years, and our in-place rents could grow at that same rate, 5% for approximately 10.5 years before reaching that 20% rent-to-sales ratio, which is towards the upper end of where street retailers can operate a healthy business. And importantly, that's assuming no further growth in tenant sales.

In the meantime, demand is at an all-time high. Our tenants are getting healthier by the day and the toughest question our leasing team has to answer is how to manage three qualified tenants competing for the same space.

Now turning to Henderson Avenue in Dallas. The buildings are up, the excitement from the surrounding market and from our tenants is palpable and over 90% of our retail is spoken for. Our pre-leasing and merchandising efforts have exceeded even our highest expectations and real credit goes to our team and our partners down in Dallas for putting together an incredible lineup. That lineup now includes established retailers like Lululemon, Vuori, Rag & Bone, Jenni Kayne, Moscot and Zadig & Voltaire. Contemporary brands that have proven success on our other streets like Frankie's Bikinis, Catbird, Guizio, Margaux and Jean Dousset and a fun eclectic mix of food and beverage, including PopUp Bagels, Salt & Straw Ice Cream and Prince Street Pizza. The project remains on time, on budget and on brand.

So in conclusion, another strong quarter of leasing and internal growth. Supply remains tight, demand remains deep, and our lease structure gives us several ways to capture that market rent growth moving forward.

Thank you, as always, to the team for all their hard work. And with that, I will turn the call over to Reggie.

Reginald Livingston

Thanks, A.J., and good morning, everyone.

As Kim mentioned, we've had another active quarter of street retail acquisitions. Approximately $150 million of deals this quarter brings our total to $350 million for the year and $850 million over the last two years. That activity moves the needle for a company of our size, but those headline numbers are just part of the story. On a portfolio basis, these deals uphold the key components of our external growth strategy for our REIT portfolio, including adding NAV accretive assets that achieve our FFO target of being $0.01 accretive for $200 million of acquisitions, building scale in key corridors where we can leverage our knowledge and relationships and selecting assets with executable value-add attributes, allowing us to drive outsized NOI growth over time, often significantly more than our going-in yield. So let's discuss how our third quarter transactions fit within this framework.

In SoHo, we acquired two storefronts at 69 to 73 Greene Street for $66 million, bringing our total storefronts on Green Street to 11 and 21 in all of SoHo. The asset includes a storefront lease to Amiri and an adjacent vacancy that we'll be able to drive near-term yield by executing on that lease-up opportunity.

In the West Village, we acquired 385 and 371 to 373 Bleecker Street for an aggregate $20 million, adding three storefronts, one of which is 15% below market, enabling us to drive yield upon that tenant expiration. This brings our total storefronts on Bleecker Street to 10, where we are the dominant retail landlord.

In Westport, Connecticut, we acquired 44 Main Street for $23 million, adding four storefronts on Westport's premier retail corridor and bringing our total storefront there to nine. With the current 80% occupancy rate, we'll be able to drive yield through lease-up on this asset as well.

In Greenwich, Connecticut, we acquired 171 Greenwich Avenue for $10 million, bringing our total storefronts on Greenwich Avenue to five, where we continue to see strong rent growth on the supply-constrained high barrier corridor. And finally, in West Hollywood, we acquired 8800 Melrose Avenue for $30 million, directly complementing and expanding our scale in that corridor with a parking lot on site that can more than double the building square footage over time.

Each of these transactions is a continuation of our playbook, including focusing on deals where there's a near-term opportunity to create significant value. That value focus is driving strong yields in our recent acquisitions as rents continue to outpace our underwriting in these corridors. And while going-in yields can vary, we are routinely achieving cash yields north of 6% within three years of acquisition and north of 7% upon business plan stabilization.

The latest example of that can be seen on an asset we purchased in Q2, 129 Fifth Avenue in the Flatiron District of New York. We bought that asset vacant, a negative cap rate, if you will, with carry costs with the goal to lease it to a 7% yield within two years, a healthy spread to a stabilized market cap rate. In fact, within 30 days of acquisition, we leased it up and now we're tracking to a yield on cost in excess of 9%, and while a 9% yield is not the norm, what is normal is our ability to spot and execute on opportunities where the rent growth environment fuels our ability to deliver strong core plus to value-add IRRs on these corridors.

Turning to dispositions. Our profit taking continues unabated, dominated by our Fund V assets where we continue to achieve strong returns, driven by retail hungry investors who for now appear to be underwriting through the current market.

Now turning to that broader market. Ken touched on the rate backdrop, so let me add some color on how that's showing up in transactions. There's no doubt the recent rate increase has introduced uncertainty. That said, there continue to be more dollars chasing retail than there are available deals to buy. And it's just too early to say definitively whether this rate move translates into a lasting repricing. But today, we're seeing modest price reductions to get deals closed.

And whether sellers ultimately pull back to the sidelines or come around to pricing that reflects the new environment is something we'll be able to better assess as the quarter plays out. And while institutional capital is still increasing for retail product, within street retail specifically, we continue to see meaningfully less competition versus other formats.

And our position as a dominant buyer continues to give us advantages. We have ample dry powder, and we're well positioned to act when the timing and pricing makes sense. And considering how strong our internal growth is, my acquisition team has a very high bar to meet. So we will not add assets that compromise on our accretion, growth or IRR thresholds.

And on the investment management side, the run-up in rates has certainly made it harder for deals to pencil, especially when that opportunity set is concentrated in suburban markets that don't have the rent growth opportunity we see across our street portfolio. That headwind to unlocking NOI growth and the increased competition in the suburbs has indeed dampened our activity this year. However, any repricing or additional market stress is actually a net benefit to that platform as it's built to take advantage of dislocation and has a profitable history of doing so.

So I want to thank the team for their hard work this quarter. And with that, I'll turn it over to John.

John Gottfried

Thanks, Reggie, and good morning. I'll start off with our third quarter results and our outlook for 2027 and beyond, then close with the balance sheet.

Starting with same-property NOI. As Ken discussed, strong tenant demand and fair market value resets on our key streets drove same-property NOI growth of 10.2% in the third quarter. Our streets led the way again, up more than 15% and ahead of plan, while our stabilized suburban portfolio grew 2.5%, in line with our expectations.

And the strength on our streets was broad-based. Chicago was up over 20%, SoHo 16% and Williamsburg about 10%. Compared to last year, our streets alone added more than $3 million of NOI or roughly $0.02 of FFO. And none of this includes the NOI growth from our developments and redevelopments, which are excluded from our reported same-property NOI metric.

Turning to 2026 full year same-property guidance. Historically, we haven't updated same-property guidance during the year. I held out as absolutely long as I could, but after none months of growth above 8%, my team finally wore me down, so we're raising it. We now expect full year same-property NOI growth of 7.5% to 8.5%, which is a full point above the midpoint of our original 5% to 9% range, and it reflects our expectation of continued strength into the fourth quarter.

And importantly, that 8% growth is translating to our bottom line. Through the first nine months of 2026, FFO as adjusted was $0.92 per share, up nearly 10% from the $0.84 we reported during the same period last year.

Now let me turn to our Signed Not Open or SNO pipeline. Driven by another strong quarter of leasing, our SNO pipeline grew over 30% during the third quarter. It now stands at approximately $22 million of ABR at our share. That's a record high, both in dollars and as a percentage of ABR and nearly 90% of our REIT SNO is concentrated in our street and urban portfolio. As a reminder, our SNO only includes leases on currently vacant space. It doesn't include renewals or replacements of occupied space. So it's truly incremental.

In terms of timing, over 1/3 of our SNO pipeline is projected to commence in the fourth quarter, including T&T Supermarket and LA Fitness's Club Studios at our redevelopment projects in San Francisco. Both are scheduled to open in November of this year. Another 1/3 is expected to commence in the first quarter of 2027, putting us at roughly 70% by the end of March, and nearly all of it is expected to commence by the end of 2027. But as those leases come online, as A.J. discussed, we're already refilling the pipeline with more than $15 million of potential ABR in active lease negotiations.

Let me now translate that into earnings. At its full run rate, our current SNO pipeline represents approximately $0.11 of incremental FFO, which is net of about $0.04 that we are currently capitalizing within our development and redevelopment projects, and that's up from $0.08 last quarter. Based on estimated commencement dates, we expect about $0.01 of incremental FFO per share in the fourth quarter, another $0.06 to $0.08 in 2027 and the balance in 2028 as the pipeline reaches its full run rate.

Turning to 2027. While we're not providing guidance today, but between our SNO pipeline and the full year impact of leases that commenced during 2026, we are looking at another strong year of same-property NOI growth from our REIT portfolio, inclusive of redevelopments. And that's before factoring in our Henderson Avenue development project, where we -- where tenant openings are expected throughout 2027 and into 2028.

Earlier this year, I indicated that we expected our SNO pipeline to decline meaningfully by year-end as signed leases commenced. But even with another $8 million or so of expected ABR to commence by year-end, if a meaningful portion of the leases in active negotiations converts, our SNO could hold steady or even grow through year-end, and that gives us additional confidence in our earnings growth for 2027 and beyond.

Moving to FFO. Third quarter FFO as adjusted was $0.31 per share, up 7% from $0.29 a year ago. For the full year, we're maintaining our FFO as adjusted of $1.24 to $1.26 per share. That reflects two raises from our initial midpoint of $1.23 and puts us on track for approximately 10% growth over 2025. Our core portfolio continues to run ahead of plan. That outperformance, along with our accretive street retail acquisitions has more than offset the timing of our net investment management dispositions, which are crystallizing value for us and our partners and a less favorable interest rate environment. With the momentum in our portfolio and an SNO pipeline at just under 10% of ABR, we -- we head into 2027 with real conviction.

Turning to our balance sheet. It is exactly where we want it. We have significant liquidity and the capacity to deploy it, minimal debt maturities over the next several years and manageable interest rate exposure.

Let me now spend a moment on each. Starting with liquidity. We have over $600 million available today. And with the near-term EBITDA growth embedded in our portfolio, we have the capacity to acquire several hundred million dollars of assets at our pro rata share while maintaining our target of 6x debt to EBITDA, inclusive of our share of investment management debt.

Moving to debt maturities. As outlined in our supplemental, we have no significant debt maturities until 2031. And lastly, turning to interest rates. We have approximately $1.2 billion of interest rate swaps and caps in place as of the end of the third quarter. That leaves us with about $350 million of unhedged variable rate debt. And of that $350 million, about $100 million relates to investment management assets we expect to sell in the near term, resulting in roughly $250 million of floating rate debt in our REIT portfolio.

And with $45 million of cash on hand and $350 million of unsettled forward equity, we have ample liquidity to pay down that exposure should rates move meaningfully higher while still preserving dry powder for future accretive investments as they present themselves. So while we're not immune to rate volatility, our exposure is manageable.

In summary, it was a strong quarter. We delivered another exceptional quarter of leasing, grew our SNO pipeline to a new high and exceeded our expectations on same-property NOI. And our balance sheet is well positioned with the liquidity and dry powder to execute on our external growth strategy as the right opportunities arise.

With that, I will turn the call back to the operator for questions.

Operator

[Operator Instructions] Our first question comes from Craig Mailman with Citi.

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Craig Mailman

John, I know you don't want to give 2027 guidance here, so I appreciate that. But I'm just -- as you laid out that incremental $0.06 to $0.08 of FFO from the SNO pipeline kind of coming online next year, how should we think about, though, any offsets to that from -- you know you talked about interest rates and we can make our own assumptions on that. But anything kind of known from a move-out perspective or something funky in the numbers that you know about that we should think about as an offset to that kind of number? Or is that a good way to think about incremental year-over-year?

John Gottfried

Yes, Craig. So I'd say in terms of known move-outs or expectations --nothing there. I think that again, we look at a couple of things. One, A.J. mentioned $15 million of leases in pipeline. So goal is to add to that. So headwinds, nothing that we haven't already discussed. We've talked about the investment management dispositions that we view as timing. So as we sell, there will be a slight timing lag, but those we anticipate redeploying. So I think 2027 feels like a strong setup.

Craig Mailman

Okay. That's helpful. And then just on the pipeline, the additional $15 million that A.J. was discussing, like what would be the timing if you guys do start to close on some of those by year-end? Would any of that commence in 2027? Or is that the 2028 kind of cushion to you to keep this growth going?

John Gottfried

A little bit of both, Craig, to be honest. I think it's a pretty wide range of opportunities. Some of it is on -- I mean, this is vacant space and on the street, it get moved quickly, but it's going to set us up for '27 and probably a bigger impact into '28.

Operator

Our next question comes from Samir Khanal with Bank of America Securities.

Samir Khanal

I guess, John, just maybe provide a bit more update on North Michigan. I would assume that's currently a drag. I guess, how should we think about I guess, the remaining investment required there and potential earnings contribution as we start to focus on next year?

Kenneth Bernstein

So John, why don't you touch on it from an earnings perspective and A.J. give color on the kind of new energy we're seeing on the street.

John Gottfried

Sure. Absolutely. So Samir, that is one we are not capitalizing any costs. So as we sit here today, there's a couple of penny drag in our earnings related to the taxes and carry on North Michigan. So currently a drag. Last thing before I turn it over to A.J. is that I think if you parse through our Ken's quote, you will notice that he referred to some recovery there into and particularly inferred North Michigan. So A.J., why don't just give an update on what we're seeing on North Michigan?

A.J. Levine

Yes. Timing is interesting. Late last week, I was actually with leadership from Mango, who's our tenant on the street and majority of our conversation was about the growth that they're seeing in the market. And I think that's reflected in deal activity as well. We've seen Nike, Lululemon, Levi's all claim large chunks of space over the last 30 to 60 days. And as the space fills in, we're starting to see the activity move north on the avenue towards 840. In fact, we have competing offers for one of our Fund IV assets on the street at 717. So I think we're feeling really good about North Michigan Avenue as another lever of growth for us as we move into '27 and '28.

Samir Khanal

Great. Great. And I guess just my second question is on -- I know you guys are generating FFO growth of -- you said around 10% this year. But then when I looked at your guide this morning, you did raise the NOI growth outlook but you maintained the FFO. So I just want to make sure kind of what's -- maybe bridge kind of what's offsetting the greater NOI outlook here and whether any of that could reverse into next year?

John Gottfried

Yes. No, absolutely. So I think what -- let's just start with the punchline first is that the drag on it, as Reggie mentioned, we are a net seller in our investment management. So as we're selling those assets, short-term delay in the fees and NOI until Reggie deploys that. So I think that's the -- I'd say the biggest offset to where that 1% incremental growth at the midpoint of our same property got absorbed, but it is timing, Samir, as our team redeploy that capital, we'll catch -- pick that back up.

Operator

Our next question comes from Floris Van Dijkum with Ladenburg Thalmann.

Floris Gerbrand Van Dijkum

John, maybe if you could try to quantify for people. I know that your street portfolio today is, I think, around 93% leased and economic a little bit lower. What is the upside if you get to 96%, 97% economic occupancy in terms of gross number and net number? And how does your street today compare to peak occupancy, which I believe was in the 96% or 97%, if I'm not mistaken, prior to the retail Armageddon?

John Gottfried

Thanks, Floris. And yes, no, you're right. So I think we were in the 97% range at peak. What I also want to point out is in those occupancy percents that you just quoted, the North Michigan Avenue is not even in there, right? So I think that's incremental occupancy growth above and beyond that.

In terms of -- I don't want to throw out an exact number as to what if we lease up every single vacant space, what would that potentially be at Floris. But I would say that if we look across the pockets where we have the greatest amount of opportunity to lease up, one of them is strategic is on Henderson Avenue. So if you look in our supplemental, you will see that A.J. and our team are strategically holding back space where we bring those assets back on online and be able to capture the growth that is going to happen when the project updates.

So Henderson Avenue is one of those areas where we have opportunities. D.C., we also have some opportunities, which A.J. and his team are actively working through. And what I'd also point out is a couple of the acquisitions that we acquired this quarter where we saw that opportunity that Reggie was able to buy at an attractive basis. And we bought about 17,000 square feet of vacancy that we think we have very near-term opportunities to lease up one of those in SoHo, another one in Westport, Connecticut.

So meaningful growth, I think, between things that aren't even in the occupancy percentage, 840 as well as to get from the, call it, 91%, 92% today up to stabilized 95%, 97% is significant.

Kenneth Bernstein

Let me -- Floris, let me add on to that. because the lease-up alone will be compelling and probably in an -- by the next call, we'll put a number on it. But what I think is critical that our shareholders understand is the fair market value resets that we are currently experiencing and are likely to continue, could be as significant a driver of incremental growth above and beyond contractual growth, could be as significant as that lease-up.

So we're not reliant just on lease-up, although we'll take it, and we will get to 97%, Floris. And we're not reliant on redevelopments, although you hear what's going on in Henderson Avenue, and that's going to be a great addition. These fair market value resets, given where our basis is in these assets is going to be significant. And I think that's the piece that we need to hammer home and continue to deliver in our results.

Floris Gerbrand Van Dijkum

Maybe my follow-up, maybe if you can touch on Henderson Avenue because it sounds like the way that you are planning on drawing down the remaining equity is to coincide with the rent recognition of those leases commencing in '27. How should we think about the, call it, the $200 million of cost there and how that -- how the timing of that is going to come online in next year?

John Gottfried

Yes. So I think, Floris, we have forward equity contracts that as they expire, we will bring down that equity. But I think you're right, a good chunk of that is going to be timed with the Henderson project. So -- it's not going to be perfect quarter-to-quarter as how we -- how that unwinds. But of that roughly $200 million of spend, we have earmarked again, where we look at if that $200 million-ish is going to get us to a 9% yield. We're going to look at our debt to EBITDA that, that generates and rebalance our balance sheet accordingly and use the equity for that, if that makes sense.

Operator

Our next question comes from Todd Thomas with KeyBanc Capital Markets.

Todd Thomas

First, I just wanted to follow up on the commentary around the $0.01 contribution in the fourth quarter and the $0.06 to $0.08 in '27. John, your comments were centered on the contribution from the SNO pipeline specifically. So just related to leasing and rent contribution on vacant space so that does not include contractual rent growth or future renewals and mark-to-market and then financing and external growth, all of that should be considered separate to that number. Is that the right way to think about sort of '27 and some of the building blocks there?

John Gottfried

100%, that 11% I was just rolling forward here's how that $0.11 in isolation rolls out, but does not include any of the items that you just mentioned…

Todd Thomas

Okay. Got it. That's helpful. And then sort of shifting gears a little bit on the Sunset Park loan amendment, Acadia is now in a senior position with the new $200 million financing, $120 million incremental investment there. Can you just walk through the underwriting a bit that gave you confidence to increase your exposure? And are there any parameters you can provide around either the properties' current NOI, debt yield or LTV or coverage or anything that might help sort of assess the downside protection there?

John Gottfried

Yes. No, absolutely. Let me start and Ken jump in if you want to add anything. But just -- just to reiterate or to repeat what we laid out in our release is that we were previously in a mezzanine loan position on an asset in Sunset Park Brooklyn, which is a mixed-use retail asset with several national tenants at it. As part of this, we disclosed that last quarter, the borrowers had reached a position where they hadn't funded the reserves, and they have been -- and we've been in discussions with them over the past couple of months.

So where we came to, which I think is a very favorable outcome is that we received a $20 million payment, which reduced our basis, our investment in that. We consolidated our position. So we are now -- we are the entire debt capital stack. There is not another lender that could get in front of us. So when we look at a couple of different things. One, in your question on basis, very comfortable, particularly given the borrower put in an incremental $20 million. They feel certainly comfortable with that there's sufficient equity behind them, and we share that. So very comfortable on the basis.

There is, as we outlined in the release, there is some lease-up opportunities at the asset, very comfortable with the ownership group and their ability to execute that. But in terms of specific yields, I would say that upon stabilization, we think we get to the high single digits as part of that. And with this, we think that it sets the borrower for an opportunity to potentially take us out early.

Todd Thomas

Okay. Do you expect to leave that exposure floating? Or are you considering any interest rate swaps or caps or some other structure perhaps that might lock in the yield on that loan?

John Gottfried

Yes. So I think it's one that naturally match floats, right, because it's a floating rate loan that we will use floating rate liabilities. So there is that natural match there, Todd. So I think we look at it. Again, we look at our floating rate exposure on a portfolio level and levels that we want to hit as opposed to a specific asset. But just starting with, it provides a natural hedge for us given that it's a floating rate asset that we would fund with a floating rate liability.

Operator

Our next question comes from Sydney McEntee with JPMorgan.

Unknown Analyst

So on the transaction market, given the increased competition you've been seeing, could you give some more color on where you're sourcing additional deals and how you guys are able to take advantage of market dislocation like at 129 Fifth Ave where you acquire something totally vacant through like a friendly bankruptcy?

Kenneth Bernstein

Sure. Let me set the table a little bit and then please chime in with specifics. So big picture, we're seeing a lot of institutional capital rotating into open-air retail and understandably so, given the strong performance. And that does create some lag as to get to perfect understanding of where interest rate impacts might impact pricing. But what's important to keep in mind is where you're acquiring assets that could have outsized growth, that greatly mitigates some of the concerns of interest rate volatility.

So what does this all boil down to? For buying long-term leases with fixed options, limited growth, yes, something's got to give and where it doesn't pencil out, you're seeing us not particularly active. For street retail, where the growth has been significant and Reg get into it, we're in a unique position where we think we'll continue to be able to see interesting opportunities like 129 Fifth because when you can get to an unlevered nine, your interest rate costs really are secondary to the success of that lease up.

Reg, I don't know what you'd add in terms of deal flow and what you're seeing.

Reginald Livingston

Yes. I would say, I would say the biggest issue that we're seeing right now, the biggest -- the biggest opportunity for us is really leaning into the corridors where we already own. Everything that we're seeing being the first call for a lot of these sellers, every time we get in front of them, there's always transaction talk and always activity potential there. So we don't need to go into new markets necessarily to execute on our vision.

Everything that we're doing really does coincide with what we're seeing in the corridors that we're doing -- that we're already investing in because that gives us the opportunity to probably lose to curate. We don't have to go to others for the knowledge of what the rents are. We're seeing all of it inside our own portfolio. So that gives us an opportunity to really push yields and be smart about the acquisitions and the underwriting.

Kenneth Bernstein

And I'll just add one other thing. I don't want to make it sound like street retail doesn't have competition. We absolutely do. Probably the most notable is Blackstone showing up periodically, but they're showing up on deals that single asset trade north of $100 million given their size, and that's understandable.

And there's periodic other legitimate competition. What we have going for us on those corridors that we are most active is A.J. and team know who our waiting list of tenants are. They know who wants to be larger or smaller or further north or further south, and we can use that and have used that to our advantage. So it's not that there's no competition, but it is definitely a deeper moat, and we're taking advantage of that.

Unknown Analyst

Right. That's really helpful. And then for my second question, cash rent spreads in the quarter were 25%, and you mentioned that the street portfolio is still about 25% below market. As you look at the expirations coming due over the next 12 to 18 months for the portfolio as a whole, like how are you thinking about the mark-to-market upside opportunity remaining in '27 and '28?

Reginald Livingston

Yes. So Sydney, what I would say is that I would look at that 25% as one thing. One, there was a point in time, right? So that was as of last quarter that we put that out there. And if we think as the -- as market rents continue to rise, that 25% should continue to grow as we get those spaces back in '27 and '28. So that will continue to grow.

In terms of forecasting specific spreads for '27 and '28, I'll just put that out as -- that the target is the 25%. It's going to vary quarter-to-quarter depending upon what lease our team gets back. But I would say that is the baseline of what we're looking at.

Operator

Our next question comes from Anthony Hau with Truist Securities.

Unknown Analyst

Ken, you mentioned -- I think in the press release, you mentioned that demand is flowing into larger format urban markets that have been slower to recover. Which markets are you seeing that in? And does that extend to assets like Sullivan Center and State Street in Chicago?

Kenneth Bernstein

Yes, absolutely. So we touched on North Michigan Avenue and A.J. chime in. San Francisco, you're about to get on an airplane, I think, right, for a grand opening of T&T. The way this recovery and now we're well beyond recovery. This demand increase, the way it has played out was, first and foremost, was the smaller format, luxury, advanced contemporary, think SoHo in Chicago, think the Gold Coast. And now we're seeing some of the larger format players recognizing how essential this is.

So I can't think of an area that has not in the last 90 days, had significant increases, including State Street, as you mentioned, virtually every market that we think about. But A.J., why don't you touch on what you're seeing in San Francisco and elsewhere?

A.J. Levine

Right. I mean, San Francisco, we started to see that momentum a year ago when we signed T&T, when we signed Club Studio, more recently, we added a lease with Sprouts as well. We actually did things a little bit in the reverse in San Francisco. We got our larger boxes taken care of. And now that those are coming online, and Ken mentioned I'm getting on a plane tomorrow to go to T&T's grand opening, we are going to focus on a lot of that smaller space within those shopping centers where we're looking at high double-digit, triple-digit rents. But certainly, we've seen it in San Francisco. There's a lot more work to be done there and real momentum on North Michigan Avenue, again, as activity starts to move north towards 840.

Operator

Thank you. I would now like to turn the call back over to Ken Bernstein for any closing remarks.

Kenneth Bernstein

Thank you all. We look forward to speaking to you again next quarter.

Operator

Thank you. This concludes the conference. Thank you for your participation. You may now…