Operator: Good day, and thank you for standing by. Welcome to the Acadia Realty Trust First Quarter 2026 Earnings Conference Call. [Operator Instructions]. Please be advised that today's conference is being recorded. I'd now like to hand the conference over to [indiscernible] administration and due diligence analyst. Please go ahead.

Unknown Executive: Good morning, and thank you for joining us for the First Quarter 2026 Acadia Realty Trust Earnings Conference Call. My name is [ Lenel Ray ], and I'm a lease administration and due diligence analyst. 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, April 29, 2026, and the company undertakes no duty to update them. During this call, management may refer to certain [indiscernible] 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. Once the call becomes open for questions, we ask that you limit your first round 2 questions per caller to get everyone the opportunity [indiscernible] may ask further questions by reinserting yourself into the queue, and we will answer as time permits. 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, [indiscernible]. Great job. Welcome, everyone. As you can see in our press release, we had another strong quarter in what is shaping up to be a very solid year both with respect to our internal as well as our external growth initiatives. And while geopolitical events have certainly added unwanted uncertainty to the global economy, thankfully, due to the tailwinds for open-air retail in general, and then even more so for street retail. We are seeing continued strong results driven by strong tenant demand, strong tenant performance and attractive investment opportunities. As the team will discuss in more detail, we delivered 11% year-over-year earnings growth, driven by nearly 6% same-store growth. And even with heightened uncertainty in the capital markets, we completed over $2.5 billion of transactional activity comprised of $600 million of new investments, over $500 million of recapitalizations within our investment management platform and a new $1.4 billion corporate borrowing facility. Now since I have discussed in detail the key drivers of the tailwinds in open air retail in our previous calls. I will limit my explanation a bit. But in short, our continued strong performance is being driven most significantly by our street retail portfolio and more specifically, by 5 key factors: first, limited supply that continues to shrink. Second, and probably more importantly, increasing demand due to the ongoing focus by retailers to having their own physical locations rather than being so heavily reliant on either wholesale or digital channels. Third, strong tenant performance due to a resilient consumer, especially the upper end shoppers at our street locations. Fourth, lighter relative CapEx and in our re-tenanting of street locations. And finally, stronger annual income growth in our street locations due to both higher contractual growth and then more frequent mark-to-market opportunities. These continued tailwinds are enabling us to deliver solid internal top line growth and having that growth hit the bottom line, both in terms of earnings growth as well as net asset value growth. A.J. Levin will discuss our progress last quarter and why we are poised to continue to deliver superior growth for the foreseeable future. And then supplementing this internal growth and ensuring that we can continue to deliver this steady growth well into the future is our external growth initiatives. Reggie Livingston will discuss our acquisition activity over the last quarter, where we continued to deliver on our goals, both with respect to our on-balance sheet acquisitions of street retail and our execution through our investment management platform. But let me give a few observations. As we have seen more investor interest in retail over the past year, competition has increased for most formats of open-air retail. But so has the volume of deals coming to market. So even with increased competition, we expect to be able to meet our acquisition goals. And while we welcome the company, it has been a bit more difficult to simply buy existing yield to make our targeted returns. So as it relates to street retail investment opportunities, while competitive, it's still a less crowded field than in other formats with fewer capable buyers. So we're still seeing enough attractive investments that are accretive day 1, both to earnings and net asset value. And we are most focused on investments where there are near-term value creation opportunities where we can use our skill set and relationships to unlock that value. We're still finding deals that get us to a 6% plus yield in the near term, but require a few more moving pieces. And since our team has never been hesitant to use its value-add skills and relationships this shift is welcomed. Same is true for our investment management platform, the ability to achieve opportunistic returns by simply buying stable assets as we successfully did during our Fund V investment period a few years ago. is becoming increasingly difficult. Thus, our recent investments over the past year have been much more value-add focused, and we expect that focus to continue. And as it relates to our investment management activity, we can actually team up with the increasing pool of institutional capital and harness that increased interest. So we don't have to just beat them. We can join them as well. And to be clear, with respect to both our REIT and investment management acquisitions, our goal continues to be to make sure our investments are accretive to earnings and to net asset value day 1 and to achieve a $0.01 of FFO for every $200 million of assets acquired. Reggie will walk through how our most recent activity is meeting our goals, both in terms of volume and accretion and then equally importantly, how we are planting seeds for continued superior growth down the road. Then finally, [ John Gorey ] will walk through our balance sheet metrics and how we are positioned to continue to drive both internal and external growth with plenty of dry powder and diverse sources of capital. So to conclude, our street retail investment thesis is working [indiscernible].

A.J. Levine: [indiscernible] namely San Francisco and North Michigan Avenue, and I'll finish with an update on Henderson Avenue in Dallas. Overall, another strong quarter of leasing across the board. Street, suburban, both within the REIT portfolio as well as our investment management platform. Our total volume of signed leases in Q1 was an additional $3.5 million at our share. We've grown our pipeline of new leases in advanced negotiation to $11.5 million, which is a net increase of nearly $2.5 million above the previous quarter. As we sign leases, we are quickly reloading the pipeline and then some. As Ken articulated, because of the historically strong supply-demand dynamic and the resilient high-income consumer that shops our streets, all signs indicate that we'll be able to deliver similar results through the remainder of this year and beyond. In addition to an accelerating leasing velocity, we are also seeing a steady rise in market rents on our high-growth streets. We are currently negotiating new leases, fair market renewals and [ pry loose mark-to-markets ] along several of our streets, including Soho, Upper Madison Avenue, M Street, Armitage Avenue and Melrose Place. These are all markets that have experienced several years of double-digit rent growth and if we're successful in signing these new deals, it will result in a weighted average spread of just over 40%. Now remember, street leases have 3% contractual growth. So a 40% spread after 5 years of 3% growth means that rents have grown closer to 60% over that time period. This is what we mean when we say that not all spreads are created equal. Now incremental to the sector-leading growth that we're seeing on our streets, we're also continuing to build conviction around historically strong markets that are in the earlier stages of recovery, like San Francisco and North Michigan Avenue in Chicago. At our last update, we reported that since the start of 2025, we had signed about 90,000 square feet of new leases across our 2 assets with LA Fitness Club Studio and TNT supermarkets. Since our last update and following the end of the first quarter, we've added another 25,000 square feet by signing Sprouts Farmers Market, who will be joining Trader Joe's and Club Studio at 555 Night Street. And like TNT and Club Studio, this will be their first store in San Francisco. What's become clear is that tenants are strengthening their conviction around the recovery of San Francisco, and with another 70,000 square feet of space remaining to lease, in addition to some accretive Prius opportunities, we are gaining increased confidence that we can continue to unlock the meaningful remaining embedded value within our 2 San Francisco centers. Now right behind San Francisco is North Michigan Avenue, which continues to see steady improvement and has certainly moved beyond the green shoots phase of recovery. We still have a ways to go, but foot traffic has returned to pre-2019 levels. And since the start of this year, there has been a noticeable increase in tenant demand. Over the last year, we've seen new store openings and new lease signings from top brands like Mango, Aritzia, Uniqlo and American Eagle and most recently, the 60,000 square foot Candy Hall of Fame at 830 North Michigan Avenue. Even so, rents are still 50% below where they were at prior peak. North Michigan Avenue is an iconic, irreplaceable street and we are confident that the recovery will continue to accelerate. And when it does, we will be well positioned to capture that upside. And finally, I'll end with an update on Henderson Avenue in Dallas. As a reminder, the vision on Henderson is to create a vibrant, walkable street curated with the mix of today's most sought after retailers and supplemented with dynamic and recognizable F&B, mixing the best of what's worked on streets like Armitage Avenue in Chicago, Blake Street in New York, Melrose Place in L.A. and M Street in D.C. In short, Dallas is first and only true street retail shopping experience. The Street is already off to a great start with tenants like Tecovas and Warby Parker producing sales that could already justify rents doubling. And with 80% of our retail on the street now spoken for, our new leases are doing just that. I can't reveal the names of all of the brands that have committed, but to give you a flavor, the project will consist of a healthy mix of nationally recognized tenants like Rag and Bone, who is relocating from Highland Park Village, along with the collection of younger brands, that have had success on some of our other high-growth streets like Ezio, Cami and Margo. And we're saving around 10% of our space for brands that are more local and authentic to Texas. Adding some fun high-volume F&B like Prince Pizza, Papa Bagels and Sultans ice cream, and you have the makings of a well-curated walkable street. So in summation, the key takeaway is that despite consistently high levels of leasing activity over the past several quarters, we continue to see meaningful runway ahead, both in terms of mark-to-market opportunity and ongoing lease-up of our high-growth streets, as well as tapping into markets that have more recently begun to show the signs of a strong recovery. As always, I'd like to thank the team for their hard work. And with that, I will turn things over to Reggie.

Reginald Livingston: Thanks, A.J., and good morning, everyone. I'll cover 2 things: our transaction activity for Q1 and through April and then I'll share some perspective on what we're seeing in the market. On the transaction front, we've been incredibly busy year-to-date. We've closed over $1 billion in acquisitions and recapitalizations, gained footholds on 2 of the country's premier luxury retail corridors. -- all while achieving our accretion and growth thresholds and building a pipeline that should maintain a high level of activity for the balance of the year. So let's walk through some details starting with the acquisitions not previously announced. At the end of the quarter, within our REIT portfolio, we made our Innova investment on Worth Avenue in Palm Beach with the acquisition of 225 Worth for $43 million. The Street is 1 of the most irreplaceable luxury retail corridors in the country and it has all the ingredients for continued rent growth, including strong performance tenancy, a high-end customer base and limited supply. This asset contains Gucci, a Machine and possesses a meaningful mark-to-market opportunity that we'll harvest in the near future. Our convictional work goes beyond this single asset. We have an active pipeline in our corridor and our strategy there, mirrors where what we've executed in other markets. acquire our foundational position, build scale and activate the benefits of concentration to drive returns over time. Subsequent to quarter end, also in our REIT portfolio, we closed on 4 and 28 Newberry, $409 million. These assets are anchored by Chanel and Cartier, 2 of the most sought-after luxury tenants in the world. These buildings are between Arlington and Berkley Streets or Newberry, one of the best concentrations of luxury retail on the East Coast. And most importantly, this asset has a meaningful value creation opportunity that we expect to harvest soon. The same scale thesis applies here. We understand the new very Street market and have relationships to create a path to build integrated presence on the corridor. For both Palm Beach and Boston, it's important to note they adhere to our metrics being accretive to NAV, hitting our FFO accretion target of $0.01 per $200 million with CAGR in excess of 5%. On the investment management side, Q1 was defined by executing on recapitalizations. We formed a joint venture with TPG Real Estate that encompass the recap of Avenue West [indiscernible] Fund V assets. a $440 million transaction. The scale of this recap is a meaningful validation of our platform, our assets and our relationships. We also completed the recap of Pinewood Square and Palm Beach County with private funds managed by Cohen & Steers and a $68 million transaction. This is our second recap for Coonteers, a highly regarded investor and their involvement reflects both the quality of the asset and the credibility of our business plan. These transactions in part demonstrate our incubated recap model at work and in total, free of capital that we can accretively redeploy. Now turning to what we're seeing in the market. The retail investment landscape remains active. Even if the macro backdrop has grown more complex. Supply remains constrained, new development at spars and institutional capital flows and the quality of retail continue to grow. And none of the current macro lows has changed those underlying dynamics. With that environment rewards though, is exactly what we've built. Recall, in the Street retail world, the majority of our acquisitions are off market, and that sourcing advantage doesn't diminish in periods of volatility. If anything it improves, as motivated sellers gravitate towards certainty of execution. And this rewards us disproportionately as they're just less players in the Street retail segment, and our pipeline reflects that reality. We have a number of opportunities in advanced stages of negotiation, and we'll continue to underwrite to the same discipline thresholds that have defined our recent activity. And on the investor management side, while the institutional appetite remains elevated, so are the number of owners looking to monetize. Owners without the capital, patients or relationships to unlock value in their assets are looking for an exit, and that's creating a compelling opportunity for a platform like ours that has all 3. Our pipeline on this side is as active as it's been. So to close, as I said, we've been busy buying the right assets on the right corridors with the right growth profile while continuing to accretively build the investment management business. We expect this activity to continue as we're on track to deliver transaction volume for the balance of the year consistent with our past activity. 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. Our first quarter results are clear. Our internal growth is accelerating, and we are achieving our external growth goals on both accretion and volume. And these accomplishments are driving our bottom line earnings. Our year-over-year earnings are up 11% and with the acquisitions completed to date, we raised our full year 2026 earnings guidance. I will start my remarks by laying out the building blocks for the remainder of the year followed by an update on 2027 and then closing with the balance sheet. For those of you that know our approach towards earnings expectations, we set robust targets for ourselves, and thus makes it unlikely of raising our guidance, particularly so early in the year. However, given the strength in our operations and the accretive acquisitions we've completed to date, we raised both the high and low of our guidance to $1.22 to $1.26, representing 9% growth at the midpoint over the $1.14 of FFO we reported in 2025. And with the simplified reporting that we rolled out last year, you can clearly see what's driving that growth. Based on our latest model, here's how that $0.10 of projected year-over-year growth breaks down. We expect that our internal NOI growth, inclusive of redevelopments should contribute about $0.07 to $0.09 of FFO. External growth is projected to add $0.04 to $0.05, driven by the full year impact of 2025 deals and those closed year-to-date in 2020. We and a continued expansion and scaling of our investment management program should add another $0.01 to $0.02. And as we've previously discussed, partially offsetting our projected growth is approximately $0.04 that is embedded in our guidance from the anticipated conversion of the City Point loan in the second quarter. Again, while dilutive in the near term, it will ultimately be accretive as the asset stabilizes. And the earnings growth that we expect to deliver in 2026 provides us with a road map for what we aim to achieve in 2027 and beyond. Before moving to same-store NOI, I want to give a few updates on our earnings model and anticipated quarterly FFO cadence for the balance of 2020. We anticipate our quarterly run rate will be in the $0.30 to $0.32 range for the balance of the year, which consistent with our past practice, does not factor in additional acquisition accretion and notwithstanding the active pipeline or acquisition team is underwriting. Secondly, and as I'll discuss shortly, rent commencements from our signed not yet open pipeline is weighted to the back half of the year. positioning us for strong embedded growth heading into 2027. I now want to give an update on occupancy, internal growth and same-property NOI. At quarter end, our REIT economic occupancy increased to 94%, but as we have said repeatedly, not all occupancy is created equal. Our street and urban portfolio, our most valuable space, sequentially increased 140 basis points and 570 basis points from Q1 of last year, and we still have several hundred basis points of embedded upside with the portfolio of 91.7% occupied as of March 31. As outlined in our release, we ended the quarter with $10.5 million or approximately 5% of [ RABR ] in our signed not open pipeline. We grew our pipeline by approximately 18% during the quarter and that's even after nearly 25% of our pipeline commenced in Q1. And as A.J. discussed, our leasing pipeline remains robust and we anticipate that our SNO should continue to build over the next couple of quarters. I'll now spend a moment to highlight a few key items on our $10.5 million pipeline for those updating models. We anticipate that approximately 80% of our SNO representing $7 million to $9 million of ABR will commence during 2026, with the remaining balance targeted for the first half of 2017. I want to highlight that over $4 million of this $7 million to $9 million is projected to commence in the fourth quarter of this year, primarily from the anticipated openings of TNT supermarket and Lisa Club Studios at our San Francisco redevelopment projects. And when incorporating the timing of commencement, we expect approximately $2 million to $3 million of incremental ABR to be recognized in 2026 and with the vast majority being part with the vast majority of that being in our same-store pool, which leaves us with $7 million to $8 million of embedded incremental ABR growth heading into 2020. And lastly, on earnings flow-through with nearly half of our SNO coming from our redevelopment portfolio, we're capitalizing certain costs, primarily interest and real estates. So not all of that incremental ABR flows to the bottom line. Of the $5.3 million of ABR in our SNO redevelopment pool, we expect to capitalize between $3 million to $4 million of cost on a full year run rate basis. Moving on to an update on our 2026 same-store expectations. We remain on track to land at the midpoint of our guidance or 7%. I will likely regret providing this level of quarterly granularity, giving it only takes a few hundred thousand dollars to move us 100 basis points in either direction. But based on our current model, we see same-store growth trending 6% to 8% in Q2, 7% to 9% in Q3 and 5% to 7% in Q4. With our street and urban portfolio anticipated to outperform suburban by 400 to 500 basis points. And now moving on to our balance sheet. So far in 2026, and it's still early, we have acquired over $600 million of REIT and investment management deals, and we did so without issuing any equity. And with the available capacity on our revolver, unsettled forward equity, and anticipated proceeds from our structured finance and investment management businesses, we have all the accretive capital we need to fund our acquisition pipeline. As highlighted in our release, we completed the refinancing of our unsecured corporate credit facility, entering into a $1.4 billion agreement. As part of this refinancing, we tightened pricing, extended maturities and increased our total borrowing capacity by $250 million to support our growth. The new facility was significantly oversubscribed and we strategically added 2 new banks to our incredible and long-standing lineup of capital partners. Following the completion of this facility, we have very manageable maturities and swap expirations over the next couple of years, which means our top line earnings will largely drop to the bottom line. So in summary, we had an incredibly busy and productive start to the year. Our multiyear expectations of strong internal growth is intact, and we have a balance sheet that has ample capacity to support our expansion goals. And with that, I will turn the call over to questions.

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

Craig Mailman: So John, that was helpful going through the kind of the guidance detail there. Just kind of curious between A.J. and Reggie, I know there's not a lot incrementally for acquisitions. Maybe just to start there, Reggie, I think you said that activity for the balance of the year could be similar to what we've seen recently. I mean in terms of magnitude on gross and then maybe pro rata share, like goalpost, what you guys are looking at, what could conceivably close this year and maybe what the earnings impact of that could be?

Reginald Livingston: Sure. I'll focus on what I think it closed this year. I guess taking a step back, run rate on the REIT portfolio side, we've done about $400 million or so the last year plus. We've done about $200 million of that so far this year. So I think we could pencil in doing basically the same volume that we've done last year from our REIT portfolio side. On the investment management side, where we've averaged about 250 plus or so over the last 2.5, 3 years. per year. I think we can do that as well. That's by definition a little lumpier because we're focused more on value-add opportunities, but I think that's kind of how we think about it from a goalpost standpoint for volume.

John Gottfried: And then on the earnings side, so Craig, I think the one thing we pointed out is that our target, which is unchanged, is $0.01 of accretion, and that is both REIT. So on a $200 million worth of REIT acquisitions. Our team is day 1 earnings accretion of a penny per 200. And that same math, even though our pro rata share is much less of the equity, but when you factor in the fees, $200 million of investment management is also a penny. So in terms of earnings impact, you would just prorate that throughout the year, but those targets are unchanged.

Michael Bilerman: Okay. That's helpful. And John, you're breaking up a little bit. I don't know if it's my line or yours, but just a heads up. And then just Similarly, on the leasing side, A.J., you said you guys are working on a fair bit of fair market value adjustments and some other deals. I mean, how much of those are already embedded in guidance versus could be incremental upside as we head into the back half of '26 in to early '27?

John Gottfried: Craig, are you referring to what's in the pipeline of what could be in the pipeline and converted to show up in rents? Is that the question?

Craig Mailman: Yes. Like what's actually considered in some of the metrics you guys talked about versus could be additive to that. You guys don't want to put it in there yet because the predictability of it is not great. Just kind of...

John Gottfried: Got it. So I think what any leasing that we need to happen has already happened to hit the midpoint of our guidance, both on same-store and earnings. So whatever A.J., if he gets something signed that's in his pipeline, and we get them open and operating, that would be additive to that, which the Street is possible.

A.J. Levine: Yes, we're typically fairly conservative with F&B assumptions, and it's typically upside for us.

Operator: Our next question comes from Andrew Real with Bank of America.

Andrew Reale: Maybe if you could talk about your new corridors, Palm Beach and Prime Newberry. I guess, first, what's the time line for realizing the mark-to-market opportunities there that Reggie mentioned? And then are there any additional assets in the pipeline in either of those markets today? And how scalable do you think those markets could ultimately be?

John Gottfried: Sure. I'll start with the second one, Andrew. So for us to identify a market, it's never just about 1 deal. We think how can we as mass 100, 200 plus over time so that we can enjoy the benefits of that scale that we've talked about being in the first call for sellers to first call for tenants and et cetera. So we have an active pipeline that we feel pretty good about. We're always going to stay disciplined in our underwriting, as I've said before. But we think those markets we do we think we can scale. Before we even talk about scaling though, is do those markets have the same rent growth drivers and demand that we have in [ SoHo ] and Georgetown and our other markets. And I think these guys -- I think these corridors do, there's tight supply, the tenant demand is very high. The sales volume is there, not only justified the rent run up from previous years, but continued rent growth in the future years. So we think both Worth Avand Palm Beach and that block of Newberry and some of Newberry generally have those. So we feel good about the opportunities that makes sense there and that we'll be able to scale. To your first question, I don't want to get into too many specifics. But I think big picture, the opportunities for us to harvest, mark-to-market opportunities and harvest 6-plus yield really is fact-dependent. But I think the framework and the way to think about all of this is there's a lot of things happening in these markets from that rent growth from resets, a bunch of retailers are actually reaching out to us even before their leases expire and say, Hey, I want to invest in my space. So let's do an early renewal now. all those things in order to the benefit of us being able to achieve the yields in the near term instead of long term.

A.J. Levine: And Andre, just to add on to that, the way that from a modeling perspective, 2 thoughts is when we look at -- and again, you should assume that in these instances, the lease would be for low market. So when we think of that in the bookkeeping we do, we are conservative as to where we think the market is on day 1. And just a rough rule of thumb that we think about is, ideally, we want to get to the 6s cash that Reggie referred to Target is 2 years. but we'll tolerate up to 3 or 4 years for the right deal and where we have the level of conviction. But that's in terms of time line and what we do initially to establish the -- really the GAAP yield, which would be that below market impact.

Andrew Reale: Okay. That's helpful. And then, John, I think it was last quarter, you said PRILUSE could potentially be the most impactful variable within the 5% to 9% same-store range. with the real benefit from that maybe accruing in 27 or 28. I mean if you were to maximize the [indiscernible] opportunity in the second half of this year, how should we think about quantifying the NOI impact from that downtime?

John Gottfried: Yes. So I'll go back to my remarks is that we're going to target the 7%, Andrew. So I think that was 1 we gave a wide range, and I'll start with our historical practice and maybe not need to not be so stubborn. We could change our historical practice, but we have not updated same-store guidance once we've given that, which is why we're doing it this quarter. But I would say, assume we are targeting the 7% and the [indiscernible], I think, is very real, very actionable, but not going to deviate from the 7% target.

Andrew Reale: Good luck getting John to count his chickens before they have.

Operator: Our next question comes from Floris Van decom with Ladenburg almond.

Floris Gerbrand Van Dijkum: Question, it doesn't seem to get a lot of attention these days, but your Henderson Avenue development, it's about $200 million, should investors expect something like a 9% or 10% return on that. And that's what you've indicated here the remaining ATM -- the forward ATM is going to be used to fund that. maybe also talk a little bit about maybe the timing of that development and what kind of rents you're getting and how much of that is pre-leased.

John Gottfried: So let me just start with the yields and timing, and then I'll turn it over to to A.J., on the leasing specifics. But we've put out there and we are on, if not ahead of target that we think the development is going to stabilize to an 8% to 10%. So very consistent with what what you shared other point of that, Floris, that's the 8% to 10% on the dollars we're spending incrementally. What that is not factoring in is that we have a whole other portfolio of assets that what A.J. is about to share with you is that, that whole entire portfolio of assets is proving out to be very below market that we are not factoring in the lift from the balance of the portfolio that the development is going to add to that. In terms of time line, we'll be through our part of construction. Back half of this year, begin delivering space, stabilizing in '27 and up and running in '28. But I'll let Jay talk about where we are in leasing and status there. But in terms of what we laid out as expectations, we are on track, if not ahead.

A.J. Levine: Yes. I mean I would say the interesting excitement on Henderson has been far beyond, I think initially imagined. And I think what you have to remember, and we've said it before, is that existing sales on the street are already in excess of some of the sales we're seeing even in markets like Armitage Avenue and rents on Henderson are half of what we have currently on Armitage Avenue. So I mentioned in my prepared remarks, there's already justification for rents doubling on the street. And some of the more recent leases that we're signing are actually doing just that. So Reg and Bone obviously having a lot of success over at Highland Park Village, deciding to shift to merchandising that's a little bit more in line with what they prefer from a co-tenancy standpoint, some of the younger brands like Margo and Geezeo, I'm anxious to give you more names. I've shared what I can at this point, but we're off to a great start.

Floris Gerbrand Van Dijkum: Great. And maybe as a follow-up question, if I can ask, wanted to touch base on Chicago. I know you talked a little bit about the momentum. And I think TPG has bought into your JV, if I'm not mistaken at 71 what is the appetite of those kinds of capital partners to perhaps take advantage of some of the opportunistic investment opportunity set that could be achievable in that market? And maybe talk about some of that -- where is the upside? Or is there only -- because all we hear about is typically when we talk to people so Chicago is terrible. What has changed? And why is it not a bad place to be?

John Gottfried: So let me start with for the recap with TPG was Fund V, nothing to do with Fund IV, so that we still everything -- 17 is in Fund IV and still held 4. So just to clarify there, there has been no transactions.

A.J. Levine: Yes. I just want to correct one thing. I mean, Chicago is not terrible. It's been a bad place to be. Certainly, in our neighborhoods, we've had many years of success there. The issue with North Michigan Avenue has never been an issue fundamentals, right? Street footfalls are back in excess of 2019 volumes. The sales are seeing very real growth over the last few years. It's really always just been a challenge of difficult spaces, multilevel retail historically been those flagship locations that have been sort of more difficult to backfill. But those spaces are filling in. I mentioned some names in Unico H&M coming back to the Street, American Eagle, Aritzia, large format spaces, as those fill in, we're going to continue to see increase in activity. And then, of course, the challenge of having 3 underperforming malls on the street hasn't done us any favors. So as those pieces start to get figured out, we're just going to see more and more momentum on the street.

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

Todd Thomas: First, I just wanted to ask about the some -- if there's any more markets or partners that you're evaluating today? Just curious how if we should expect some additional inaugural investments in the quarters ahead as we contemplate some additional investment activity? And then, Ken, maybe a bigger picture question just for you or Reggie. You talked about the increased competition for open air centers I think you referenced that in context of speaking about Fund V assets, for example. But you indicated that you're still finding opportunities on the street and urban segment. a little less crowded. Why do you think it's less crowded why is the competition lower and the acquisition environment seems more favorable where there are strong IRR and risk-adjusted return opportunities, good rent growth. You talked about the escalators, just curious to get your thoughts there.

Kenneth Bernstein: Sure. Let me make sure I understand the first part of the question, are you referring to our investment management platform and bringing in additional institutional partners for additional in...

Todd Thomas: No. No. Just you made additional investments in Newberry, but sort of characterized it as like a newer market and your [indiscernible] investment in Palm Beach. Just curious as we think about additional investments whether there's more markets being contemplated to the more corridors that we should expect to see the company enter.

Kenneth Bernstein: Yes. So I'll tackle both and Reggie chime in. In terms of additional markets, we spend a fair amount of time, A.J. and I especially talking to our retailers, of which markets are perhaps ones you might want to be in and which ones are going from nice to have to need to have. In the Capa Palm Beach is transitioning from a seasonal market and for a variety of reasons that we all read about, it's now becoming a must-have market. In those instances, where we see fragmented ownership where our retailers are saying, boy, we would welcome institutional high-quality ownership like Acadia or others. That is where we spend the majority of our time and attention. some markets, Dallas, there was no place to buy so that we are building and creating that street retail environment. But for Palm Beach worth Avenue check that box, clearly as the new Berry in Boston. There are probably half a dozen perhaps a dozen additional markets that would fit into that spectrum that we're constantly spending time on. And then what we're saying is, and Reggie touched on this, is there enough assets for us to acquire over a realistic period of time that we can build adequate scale. Is there a spine? Are there barriers to entry on a given corridor, so that it just doesn't keep on wandering up and down left and right East or West. And when it does, in the case of Worth Avenue and Newberry [indiscernible], as I said, about a half a dozen others, you should expect over time that will focus on those. We don't have to add new markets in order for us to achieve our goals of being a premier owner operator of street retail in the United States, but it would be nice to have a few more. And from our retailer's perspective, they would welcome that. Now in terms of competition. Street Retail has a longer learning curve. There it is pretty easy to underwrite some formats open-air retail, and that's why you saw capital move first and foremost, back to supermarket anchored. You still need to underwrite thoughtfully and carefully your supermarket, but all of the things we talked about in terms of our tenants you don't really hear in terms of the satellites. That dry cleaner, that coffee shop and otherwise, we don't get into that same level of underwriting. So there's just lower barriers to entry. For street retail, you have to understand the market. You have to understand the tenants. You have to understand the local law. And it has taken us well over a decade to get to the point where we are right now. And for a lot of institutional owners is that gearing up is just too difficult. They'd rather partner with us or otherwise. And so we are certainly we like our positioning in the street retail format. That being said, as Reggie is pointed out, team has been very active in other formats of open-air retail. Thankfully, volume is coming back. So we'll achieve our volume goals notwithstanding it being more competitive. We just have to work a little harder on it and so far, so good.

Todd Thomas: Okay. That's helpful. And then, John, just real quick. I appreciate the update on City Point, as it pertains to the guidance, what's the ABR upside opportunity there today? You're at a little over $21 million of ABR. Where does that stabilize? And what's the current thinking around the stabilization time frame?

John Gottfried: Yes. So in terms of stabilization, Todd, it's 1 we've always thought of in 2 distinct phases. So I think the first phase and call that in the next 18 to 24 months where we should be able to add 10% to 20% of current ABR, we should add our goal, our strategy and our leasing plan adds that over the next year or Secondly, after we'd be able to -- again, the neighborhood is still filling in, proof of concept. We have some leases that we've signed that will be rolling. Second stabilization. We think that A.J. chime in, but we think that we add another 30% to 40% off of that once we get to that second level of stabilization after we get through this, this first one.

A.J. Levine: Yes. for sure. I mean the last 18 months have been pivotal at CityPoint -- between Sephora and Swarovski, most recently, WargParker, and Lean. It really is starting to get that Armitage street feel -- so really, at this point, it's just about finding the right retailers completing that right mix of merchandising. But yes, there's a lot of runway ahead there as well.

John Gottfried: And Tom, what we look at to give us conviction there is the sales that are being generated and from -- we don't want to give individual tenant sales, but you could take a gap as to who they are. they are doing the increasing volumes that is attracting the attention to retailers that is what's giving us the conviction that it's a matter of when, not if.

Operator: Our next question comes from Michael Mueller with JPMorgan.

Michael Mueller: I guess first, you mentioned 8% to 10% returns for the Henderson expansion. What are some of the moving parts that pull you at an 8% versus 10? I mean, is there that much variability in the rents being discussed?

Kenneth Bernstein: Yes, Mike, some would be costs, some would be timing of open of when we declare we are at stabilization. And if you really looked at the math, when you're doing a full lease-up like this 200 basis points of variability feels normal. Maybe it's a little wide so that we're being a little conservative, but it's not appropriate to say we're getting to 9% right now. I think give us a little latitude and hopefully, is the tenant sales performance that we have seen so far, the tenant enthusiasm that we're seeing. And then a lot of it is just logistics. How long does it take to get the various different tenants open, a few month delay could change those numbers 10, 20 bps, one direction or another.

Michael Mueller: And I guess second question, you now have 3 buildings on Newberry, the 1 in Palm Beach. And I know the goal is to scale that. But could you operate those buildings efficiently over the longer term if you couldn't find additional acquisitions? Or do you really need to be -- have 5 or 10 assets in the market to kind of have it work over the long term.

Kenneth Bernstein: Yes, we could absolutely operate them. When I refer to and when we have referred to benefits of scale, it's very different than G&A as a percentage of assets in a given corridor. And while there are benefits to scale like that, and that's how we traditionally in our industry think about it, what we're seeing is very different. What we're seeing is when we can control enough buildings on a given corridor as we have in Armitage Avenue as we have on mStreet, as you will see us continue to do on Green Street in New York and elsewhere. We can then pull other levers that enable us to, in fact, get higher rents, more efficiently, less downtime. So A.J. and team are constantly shuffling tenants. We just had a meeting this morning on this, where some tenants want to be larger, Others are ready to leave. And by having enough choices on a given corridor, and being a trusted landlord for these retailers, the benefits of scale that we're referring to are not cost related. It's really the ability to drive rents and NOI over time, and that requires more than just a couple of buildings on any corridor. So in order for those benefits of scale up, I'm referring to it. I look forward to Reggie and team adding to both of these corridors over time.

Operator: That concludes today's question-and-answer session. I'd like to turn the call back to Ken Bernstein for closing remarks.

Kenneth Bernstein: Great. Thank you, everyone. We look forward to speaking with you next quarter.

Operator: This concludes today's conference call. Thank you for participating. You may now disconnect.