NEW YORK - Investment management firms Cohen & Steers (NYSE: CNS) and Acadia Realty Trust (NYSE: NYSE:AKR) have formed a joint venture to own The Walk at Highwoods, a shopping center in Tampa, Florida. This partnership brings together Cohen & Steers' private real estate expertise and Acadia's operational experience in retail properties.
The Walk at Highwoods is a 141,000 square-foot power center located in a suburban area approximately 20 miles northeast of downtown Tampa. Its strategic location near I-75 and other major retailers, such as Walmart (NYSE:WMT) Supercenter, Publix, and Home Depot (NYSE:HD), contributes to its appeal as a retail hub. The center is fully leased with a mix of national and local tenants, including HomeGoods, Michael's, and Dunkin'.
Tampa's economic growth, bolstered by a favorable tax environment and expansion in the technology and financial sectors, has made the city a magnet for corporate relocations. The region has seen a population and employment surge, with retail rent growth in northeast Tampa reaching 6.4% over the past year and a low vacancy rate of 2.3%.
James S. Corl, Head of the Private Real Estate Group at Cohen & Steers, expressed confidence in the joint venture, citing open-air shopping centers' high occupancy levels and limited new construction as factors positioning them favorably for the new economic cycle.
Nationally, open-air shopping centers boast the highest occupancy rate in 16 years at 95.7% and have outperformed other commercial property types, according to CoStar Group (NASDAQ:CSGP). The sector was also the top-performing private core real estate sector in 2023, as per NCREIF data.
Cohen & Steers, founded in 1986, is known for its focus on real assets and alternative income. Acadia Realty Trust, with a core portfolio of street and open-air retail properties, also provides investment management services targeting opportunistic and value-add investments.
The acquisition of The Walk at Highwoods is based on a press release statement and reflects the firms' belief in the continued growth of Tampa's market and their commitment to creating long-term value for investors.
In other recent news, Acadia Realty Trust reported a strong third quarter in 2024, with significant growth in same-store net operating income (NOI) and a successful leasing period. The company demonstrated over 6% growth in same-store NOI in the past three years, and a record $7 million in core leases were signed during the third quarter. Acadia closed or is under contract for $270 million in acquisitions, with expected yields in the mid-6% range.
The company's Funds from Operations (FFO) reached $0.32 per share, with a 5.9% growth in same-store NOI for the quarter. Acadia is planning a $100 million expansion on Henderson Avenue in Dallas, with an expected yield over 8%. Despite a dip in the street portfolio's occupancy to approximately 84.2%, it is expected to reach around 90% by the end of 2025.
Acadia is expanding into high-demand areas like Bleecker Street and advancing its Henderson portfolio in Dallas. The company's investment management platform has potential for growth, focusing on stability in capital recycling. These are among the recent developments for Acadia Realty Trust.
InvestingPro Insights
Acadia Realty Trust's (NYSE: AKR) recent joint venture with Cohen & Steers aligns well with its strong market performance and financial health. According to InvestingPro data, AKR has seen impressive growth, with a 90.67% price total return over the past year and a 42.38% return in the last six months. This robust performance is reflected in the stock trading near its 52-week high, with the price at 97.58% of its peak.
The company's focus on open-air retail properties appears to be paying off, as evidenced by its revenue growth of 16.91% in the last twelve months. This growth is particularly noteworthy given the challenging retail environment and supports the strategic decision to invest in The Walk at Highwoods.
InvestingPro Tips highlight that Acadia Realty Trust has maintained dividend payments for 26 consecutive years, demonstrating a commitment to shareholder returns. This consistency is further supported by a current dividend yield of 3.09%. The company's liquid assets exceeding short-term obligations suggest a strong financial position, which is crucial for pursuing growth opportunities like the Tampa joint venture.
For investors interested in a deeper analysis, InvestingPro offers 10 additional tips for AKR, providing a comprehensive view of the company's prospects and potential risks.
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