Acadia Realty Trust said it will sell 9 million common shares through forward sale agreements, a move that coincided with a 2.9% decline in its shares in after-hours trading on Tuesday.
Under the announced arrangement, Acadia will enter into forward sale agreements with Bank of America, N.A., Jefferies, Truist Bank and Wells Fargo Bank, National Association or their respective affiliates. The forward purchasers, or their affiliates, are expected to borrow and sell the 9 million common shares to underwriters for delivery in the offering.
BofA Securities, Jefferies, Truist Securities and Wells Fargo Securities are named as joint book-running managers for the transaction. The underwriters will have a 30-day option to buy up to an additional 1.35 million common shares.
Acadia stated that it will not initially receive any cash proceeds from the sale of the shares by the forward purchasers or their affiliates. The company expects to deliver the common shares to the forward purchasers when the forward sale agreements are physically settled, on settlement dates occurring no later than June 9, 2027. At that time, Acadia expects to receive cash proceeds per share equal to the applicable forward sale price.
The company said it intends to use net proceeds from the future settlement of the forward sale agreements to pursue acquisition opportunities within its existing street portfolio markets and for other general corporate purposes. Those purposes may include repayment of outstanding debt and working capital needs.
Acadia Realty Trust is an equity real estate investment trust focused on owning and operating street and open-air retail properties located in the nation’s retail corridors.
Context and implications
The financing is structured so that Acadia will defer receipt of cash until physical settlement under the forward sale agreements, consistent with the mechanics described by the company. The use of well-known banks and securities firms as forward purchasers and joint book-runners is part of the announced execution plan. The company has framed the planned use of proceeds around acquisitions in its existing street portfolio markets and broader corporate needs, including potential debt repayment and working capital.
Market reaction
Following the announcement, Acadia shares moved lower in after-hours trading, reflecting investor reaction to the offering plan.