Good day, ladies and gentlemen. Thank you for standing by. Welcome to the First Quarter 2023 Acadia Realty Trust earnings conference call. At this time, all participants are on a listen only mode. After the speaker presentation, there'll be a question-and-answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automatic message advising your hand is raised. Please note that today's conference is being recorded. I will now hand the conference over to your speaker host, Jay Martin. Please go ahead. Good morning, and thank you for joining us for the first quarter 2023 Acadia Realty Trust earnings conference call. My name is Jay Martin, and I am an analyst in our asset management department. Before we begin, please be aware that statements made during the call that are not historical may be deemed forward-looking statements within the meaning of the Securities 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, May 3rd, 2023, and the company undertakes no duty to update them. During this call, management may refer to certain non-GAAP financial measures, including funds from operation 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 to two questions per caller to give everyone the opportunity to participate. You may ask further questions by reinserting yourself into the queue, and we will answer as time permits. Now, it's my pleasure to turn the call over to Ken Bernstein, President and Chief Executive Officer, who will begin today's management remarks. Thank you. Great job, Jay. Welcome everyone. I'm gonna give a few comments then I'll turn the call over to Stuart Seeley and then John Gottfried. As you can see in our earnings release, our first quarter results represented another strong quarter. Same property NOI growth was ahead of our expectations at 7%. Our earnings were ahead of forecast as well. It's worth noting that this is not just one good quarter in isolation. Following the painful drop during the pandemic, same property NOI growth has now been above 5% for six of the last eight quarters. During that eight-quarter period, the quarterly average growth rate has been over 7%. This multi-quarter trend reflects the strong recovery we're seeing at our properties and bodes well for our prospects, not just this year, but more importantly for our multi-year goal of 5%-10% annual internal growth. To be clear, this long-term growth should also show up in earnings growth. Notwithstanding this continued progress, we're certainly keeping an eye on the headwinds in the broader economy and the potential impact on our portfolio performance. Thankfully, when looking at our current leasing pipeline, activity remains on track with our prior forecast, and we haven't seen any fallout in tenant demand. Furthermore, we believe our reserves for our tenant watch list and our credit reserves currently in place are adequately conservative to address any potential short-term disruption. Most importantly, even after taking into account the implications of a potential recession this year, we expect our leasing progress to more than compensate for any economic slowdown. Thus, we anticipate eight steps forward, even if there might be two steps backwards. On our last earnings call, I walked through in detail the likely reasons why our operating results are holding up despite near-term economic pressures. Let me emphasize three factors. First, the secular headwinds over the last several years from the rise of e-commerce have passed. Fears by both retailers and investors that online shopping and the so-called retail Armageddon will devastate the physical store. Well, that fear has abated, and this multi-year headwind is now a tailwind as retailers recognize that stores are their most profitable channel in an omni-channel world. There's a scarcity of high-quality space, and vacancies are quickly being absorbed, especially in our key corridors. As Stuart will discuss, we still have high-quality space in our leasing pipeline to drive meaningful growth over the next few years. While there's solid growth throughout our portfolio, both urban and suburban, the rebound we are seeing is most significant in our key streets. Remember, our street portfolio comprises about half of our overall portfolio value. Given a tough couple of years during COVID, many folks questioned whether a sustainable recovery would ever occur. Given the significant distinction between the type of street retail that dominates our portfolio compared to street retail more dependent on return to office, it's clear to us the recovery in our street retail portfolio is still not fully understood. It's worth highlighting a couple points. First, the vast majority of our street retail portfolio is not an amenity to office workers. Residential statistics are proving much more relevant. Where you have seen a residential rebound, our retail has rebounded as well. For those corridors, retail fundamentals are now stronger today than before COVID. That means tenant demand, tenant performance, and market rents are now stronger today than in 2019. Second, this is not just a rebound. The growth appears to be longer in duration and stronger than just a reopening. In fact, over the past year, as vacancies have been spoken for, market rent growth is continuing to accelerate. For over 70% of our street portfolio, specifically SoHo, Williamsburg, M Street, Rush & Walton, Armitage, Melrose Place, Henderson Avenue, Greenwich, and Westport, these corridors are not only performing better than pre-COVID, but notwithstanding macro headwinds, rental growth is accelerating. We have seen net effective market rents over the past year grow by over 15% on average in these corridors. For Melrose Place, SoHo, and Williamsburg, market rents have grown over 20% over the past year. We're seeing this growth driven in our markets either where luxury is expanding or in other markets where foot traffic and tourism is returning. While the rebound doesn't mean every retailer will thrive, nor has every corridor recovered, the positives in our portfolio are far outweighing the negatives. Corridors like North Michigan Avenue are still in early stages of recovery. Even there we're seeing green shoots. While we should always be prepared for vacancies created by bankruptcies like Bed Bath & Beyond, since they're an inevitable part of our business, tenant demand seems to be outstripping supply coming from these tenants. John will discuss the economic details of Bed Bath & Beyond's bankruptcy, as it relates to our two locations in our core portfolio, I'll briefly touch on it here. First, at Brandywine Town Center in Wilmington, Delaware, we have leased the entirety of the Bed Bath & Beyond space there. It is being taken by the adjacent tenant, DICK's Sporting Goods, which plans to expand into the combined space as a flagship House of Sport, its newest comprehensive format. As part of this profitable expansion, DICK's Sporting Goods executed a new 15-year lease covering the combined space. Our second location is 555 Ninth in San Francisco. The property is a well-located, two-level urban shopping center that is undergoing an important transformation. The street level includes a thriving Trader Joe's and an oversized two-level Bed Bath & Beyond that has rents that are well below market. We are turning the second level of this property into its own self-contained center with dedicated parking. We have signed a lease with The Container Store to anchor the second floor space adjacent to the Bed Bath & Beyond. Upon the recapture of the Bed Bath space, we can now activate the balance of the second level. This repositioning has been planned for several years and has always hinged on getting at least one of the levels of the Bed Bath & space back. Finally, as it relates to City Point, the opening of Primark in December anchoring our presence on Fulton Street continues to meaningfully increase the energy for the whole project. Primark opened much stronger than anticipated, and the foot traffic continues to be strong. This strength, as well as the impact coming from significantly expanded residential footprint from all of the developments surrounding this project, is translating into increasing levels of tenant interest at rents that are above our expectations. During the past quarter and to date, we have executed leases in excess of $1 million of ABR, including a recent 8,000 sq ft restaurant lease for our Prince Street passage. We have an equivalent amount of leases in advanced stages of lease negotiation right now with several exciting retailers that will further energize this irreplaceable asset. As it relates to our internal growth, looking at our leasing activity and in our conversations with our retailers, they indicate that they're looking past the near-term cyclical headwinds and executing leases on their preferred locations based on their medium- and longer-term expectations. All of this simply reinforces our view that our internal growth forecast for this year and beyond remain on track. Turning now to external growth and the transaction markets. Given the volatility in the capital markets, transactional activity remained muted last quarter as most sellers are on the sidelines. Nevertheless, our team remains very active, underwriting and executing a variety of opportunities since it doesn't take much volume to move the needle for us. As it relates to on-balance-sheet acquisitions, our cost of capital kept us on the sideline last quarter, and given the public market dislocation, we're exploring areas where we can sell assets opportunistically or reduce our concentration in certain markets and do so on an earnings-neutral basis. In terms of Fund V acquisitions, while that market is relatively quiet as well, the team remains active with several deals under review. The pipeline is robust enough that we will be successful in deploying the remaining capital even in this quiet market. More importantly, to the extent that larger opportunities arise, we are confident that we'll be in a position to successfully leverage our institutional relationships. This quarter, we added one transaction to Fund V, Mohawk Commons, which we discussed in detail last quarter. To conclude, we recognize that macro news headlines continue to create uncertainty and concern for commercial real estate in general. Even in this challenging environment, our leasing fundamentals remain strong and internal growth is intact. Once we get past this period of Fed tightening and potential consumer slowdown, we're in a very good position to continue to drive internal growth and then capitalize on the external growth opportunities that should arise. With that, I'd like to thank the team for their hard work this last quarter, and I will turn the call over to Stuart. Thank you, Ken. I am really delighted to be part of the team here at Acadia. The group of new colleagues with whom I work every day are exceptional and highly professional, the vast majority of whom the investment community doesn't have any exposure to, and their expertise and dedication is not always transparent externally. They have also been very patient with me as I dig into a lot of details on how things work, and I ask a lot of questions. I suppose it's fair to say that when looking towards the inside from the outside, which is what I've been doing for the past two decades, it is hard to fully appreciate the variances and subtleties that companies say are important, particularly when you are looking at over 100 companies. When you are highly focused on one company, the important differences resonate quite a bit more. In that regard, I'll make a few observations and provide a few anecdotes and then turn the call over to John. Our diverse core portfolio is very well-balanced and includes our street assets, our urban shopping centers, and our suburban portfolio. The suburban properties can sometimes get overlooked but represent about 30% of the value in our core portfolio. The suburban portfolio is a very stable 94.5% occupied collection of retail assets with varied open air formats. The overall average rent in the suburban portfolio is about $17.50 a sq ft, including anchors, but the shop space has in-place rents of about $29 a sq ft. The top tenants in the suburban portfolio include TJX, Lowe's, and DICK's. The suburban portfolio provides balance, it is very complementary to our urban and street assets and has an overlapping tenant base with retailers having exposure to two and sometimes all three of these portfolios. What does get a lot of attention, and deservedly so, is our focus on high growth, high barrier to entry markets, which has led to a very concentrated portfolio of street retail assets. These assets do have and will have higher growth for the next several years due to a few identifiable specific items. First is occupancy gains. All occupancy gains are not created equal. While the entire core portfolio is about 93% occupied, within that, our much higher dollar rent street portfolio is only about 85% occupied. We believe the street portfolio can get back to 95%. Furthermore, our street assets have an average in-place rent of over $80 per square foot, and the incoming rents from the portion of our signed not open pipeline that is from our street assets are at average rent of over $150. Second is lease structure. Street leases typically have higher annual contractual bumps than other retail formats. Our street leases have average bumps of 3%, which is about 100 to 200 basis points higher than what is typical for other open air lease formats. This structure results in internal growth over five years of about 13%, which is about double the 6% for a typical suburban lease. Third is we expect above average rent growth on the market rent growth on the streets, particularly if inflation runs hotter. We expect to be able to more frequently capture the growth as lease terms are typically shorter. Currently, the greatest market rent rebound is now occurring in our street and urban corridors. John will give some examples. I want to turn to our progress on two recent acquisitions. First, our Henderson portfolio acquired in early 2020-2022. This was a project that envisioned both minor short term and major medium term repositioning. The team is executing as planned. Escalating market rents have been a tailwind to our expectations. The team is signing rents about 20%-30% higher than underwriting. As planned, we recaptured a large space, physically reconfigured and redemised that space, and are signing leases over 50% higher than the prior rents. Note that these leases will be non-comp, so they won't be reported in our spread. These results are being achieved at Henderson even before the most significant planned asset upgrades have been commenced. Second, at Melrose Place, which was an asset acquired in 2019. No near-term repositioning was either planned or necessary. The investment thesis was to get the benefit of the growth from both below-market rents and market rent increases driven by our expectation that the luxury tenants would come into the market, and they did. A.J. and his team just renewed several tenants in April. John will walk through some of those details. It's worth noting that Melrose was a pre-pandemic acquisition with the full year impact of these recent rent resets. The 2024 NOI will represent a 6% CAGR over the 2019 pre-pandemic NOI level, or a 33% increase. One final observation is that street retail is not a widely held institutional asset class. Ownership is highly fragmented, and we are one of the few institutional owners with expertise that is recognized by both retailers and capital markets players. Basis matters and the importance of micro submarkets and concentrated ownership in the correct micro submarkets cannot be overstated. Now that I've had a chance to walk more of these assets and markets and meet with our leasing and asset management teams, I have a much better appreciation for our street portfolio and just how distinctive it is. These assets represent a unique growth driver for us, and our capabilities in this fragmented asset class positions us to pursue opportunities in the future. With that, I will turn the call over to John. Thanks, Stuart. Good morning. We had another strong quarter, surpassing our expectations across all of our key operating metrics, achieving FFO of $0.40 a share, along with a 7% increase in same-store NOI, both of which came in stronger than what we had anticipated. Additionally, consistent with our expectation of multi-year NOI growth, we are signing new leases at rent spreads in excess of what we had budgeted, including those that we publicly report, but likely even more impactful, those that we don't report due to their non-conforming nature, but have the equivalent impact on our earnings and same-store NOI growth. Even with the economic headwinds that are likely still in front of us, we remain confident in our multi-year internal NOI growth, and even more importantly, the translation of this growth into above-trend FFO and increased dividends for our shareholders. I'll provide some further color on each of these. Starting with our first quarter FFO. Driven by the strength of our core portfolio, we reported FFO per share of $0.40 for the quarter, inclusive of $0.11 from the previously announced special dividend from our shares in Albertsons. In light of these results, along with the positive trends that we are seeing across our portfolio, we conservatively increased our full year guidance to $1.19-$1.26, from $1.17-$1.20. I struggled with increasing our guidance after just a few months, particularly in light of the economic certainty that may still be in front of us. The strength and resiliency of what we are seeing from our business and from our tenants dictated otherwise. Contrary to what you might expect from the macro headlines, we are continuing to see record levels of tenant sales, along with continued demands for space, particularly in our street and urban markets, and at rents in excess of what we had budgeted. Furthermore, we have yet to see any meaningful signs of tenant distress beyond what we had anticipated. Our cash collections remain strong, with our credit loss for the quarter coming in better than what we had projected. As a reminder, we incorporated approximately 270 basis points of annual credit loss into our FFO guidance. When using this annual 270 basis points against our Q1 rents, we only needed about half of it for the quarter. In terms of Bed Bath's bankruptcy filing last week and the anticipated rejection of our two core leases, I want to provide an update. First, as we had outlined on our last call, we would not have any downward revisions to our guidance as a result of Bed Bath. In fact, we raised our guidance. Secondly, as we have been discussing for a while, the 555 Ninth Street lease in San Francisco is significantly below market. Assuming it gets rejected, we preliminarily estimate a one-time incremental non-cash gain of about $0.05. Please note that this potential gain was not factored into our initial or was it included in our updated guidance for the quarter. While we need to wait for the court system to work out in order to finalize our analysis, our preliminary goal would be to exclude this incremental gain from our guidance, such there be no need to revise any of your models. Presumably, it would be included in our Headline NAREIT FFO. Stay tuned, and I will provide updates as they become available. As it relates to our second Bed Bath location, as Ken discussed, we have already profitably re-tenanted the space, and I will provide further economics on that deal shortly. Turning now to same-store NOI. We exceeded our expectations for the quarter with growth of 7%, and we are currently trending above the 5%-6% full-year same-store NOI range that was outlined in our initial guidance. It's also worth highlighting that we achieved the 7% quarterly same-store NOI growth despite over 200 basis points of headwinds from prior period cash collections. If we were to exclude these headwinds, our same-store growth for the quarter would have been in excess of 9%. As you may recall from our prior call, we anticipated that our street assets, which comprise about half the value of our portfolio, were projected to increase 6%-7% in 2023. We outperformed this expectation with same-store growth in excess of 8% coming from our streets during the quarter. While the entirety of our street portfolio achieved 8% growth this past quarter, I want to drill down a bit further into our high growth markets, which as a reminder, comprise about 70% of our street assets. We are projecting about 10% annual NOI growth from these key street corridors between 2023 to 2025, which equates to aggregate incremental NOI over the next couple of years in excess of $7 million or $0.07 a share, with SoHo alone contributing nearly half of this growth. What about the other 30% of our portfolio that we are not categorizing as high growth? To be clear, we are continuing to hold very conservative assumptions in our current models and guidance, but we are starting to see evidence of similar trends in these streets, including State Street in Chicago, which as we've said on prior calls, has been slower to recover coming out of the pandemic. For example, one of our significant apparel tenants on State Street reported monthly sales that were 25% higher than any previous month on record. Moreover, this momentum continued throughout the quarter with reported sales figures that were 30% higher than those reported in the corresponding period in 2022. Turning to our total core NOI. In addition to the 7% growth from our same-store pool, we also achieved total NOI growth of about 6.5%, inclusive of our assets and redevelopment and recent acquisitions, growing to approximately $36.2 million in Q1 2023, as compared to the $34 million that we reported in Q1 2022. In terms of redevelopment, as we've discussed over the past year, we placed our core North Michigan Avenue assets into redevelopment during the quarter as our team embarks on plans to reposition these iconic assets. As Ken mentioned, we are starting to see some encouraging signs of tenant activity on North Michigan Avenue, and we are in the early stages of some really exciting concepts, so stay tuned. Moving on to spreads. As highlighted in our release, we reported solid leasing spreads of about 10% cash and 22% GAAP on new and renewed leases. Consistent with Stuart's remarks and our expectations of 10% annual NOI growth from our high-growth streets, we have increasing visibility that we should be able to achieve sustainable and meaningful mark-to-market increases over the next several years. In fact, I want to spend a moment to highlight a few interesting trends that we are seeing in our portfolio. During the quarter, we were able to increase our cash rents by about 20% from a significant lease in Williamsburg, Brooklyn, an investment that we acquired a little over a year ago. It's worth highlighting that this 20% mark-to-market was not included in our reported rent spreads this quarter, as was neither a new lease or renewal, as the length of the lease was unchanged following a fair value reset in rents. The 20% in rent arose from a contractual fair value adjustment to rent that was calculated based upon the tenant's sales performance. The increase in rent exceeded our underwriting as we viewed this lease to be at market when we initially acquired the asset. In addition, during the second quarter, we will be reporting a cash renewal spread of nearly 50% for one of our tenants at Melrose Place, L.A., that arose from a fair market value reset upon renewal. To further highlight that not all spreads are created equal, this lease generated the 50% spread even after being subject to 4% annual bumps over its initial term, which is above the 3% growth that we typically receive from our street assets. Lastly, I want to touch on some of the details involving the profitable re-tenanting of Bed Bath & Beyond at Wilmington, Delaware, that we signed during the quarter. As Ken mentioned, the former Bed Bath space was leased to DICK's, which when combined with the adjacent space, will be converted to a new 15-year lease for a 100,000 sq ft House of Sport. As this was an expansion, it wasn't reflected in our reported spreads, but when looking at the deal across both spaces, it resulted in a 15% cash spread on the combined 100,000 sq ft when comparing the new rents on the House of Sport to the prior rents we received from Bed Bath and DICK's at a cost of about $100 a foot. We anticipate rent commencement in the first half of 2025. Moving on to occupancy. In terms of occupancy, we retained our physical and leased occupancy at 92.8 and 94.6% respectively, with ABR of approximately $1.3 million commencing during the quarter. As we have discussed in the past, given the range of rents between our street and suburban assets, movements in occupancy percentage are not often the most relevant metric for us. We are on track to increase our physical occupancy by another 100 basis points or so by year-end. In terms of our core signed, but not yet open pipeline, we sequentially increased it to $6.8 million of ABR at March 31st at our pro rata share, as compared to the $5.6 million that we reported last quarter. Of the $6.8 million pipeline, we expect that approximately 25% of it will commence in the second quarter, followed by another 30% in the second half of this year, and the remaining 45% in the first half of 2024. Please note that given the timing of commencements, we won't get the full benefit in our reported results until the subsequent full annual or quarterly period. I also want to highlight that the $6.8 million of signed, but not yet open pipeline, is entirely incremental, meaning it excludes leases signed in advance of an expiration, such as the executed DICK's lease at our Bed Bath & Beyond location in Wilmington, Delaware. It also excludes any leases executed on our assets and redevelopment. Lastly, I want to touch on a few items on our balance sheet. The good news, particularly in light of the current capital market environment, is that our update this quarter is pretty boring. We have no meaningful core maturities over the next several years, nor do we need to rely upon the capital markets to fund our internal growth, as we are able to fund this growth using the cash flow generated from our business. In terms of core interest rate exposure, over 97% of our debt is fixed at an all-in rate of about 4.25%. Through the use of interest rate swaps, we have limited exposure to base rates until 2027. On the fund side, given the strength of our lending relationships, even with the challenging capital markets environment, we are continuing to source new debt, whether it be for a refinancing of an existing asset or securing financing for new opportunities. In fact, over the last several weeks, we have successfully secured two five-year non-recourse loans at spreads of about 200 basis points over the base rate. In summary, we started the year incredibly strong. Even in light of the economic uncertainty, we have cautious optimism as we look forward to the balance of the year. Our multi-year internal growth strategy remains on track. We have increasing visibility that this growth is poised to drive bottom-line FFO and cash flow growth. We will now open up the call for questions. Thank you. Ladies and gentlemen, to ask a question, you will need to press star one one on your telephone and wait for your name to be announced. As a reminder, please limit yourself to one question and one follow-up. If you have additional question, you may reenter the queue if time permits. Please stand by while we compile the Q&A roster. Our first question coming from the line of Floris van Dijkum with Compass Point. Your line is open. Thanks. Morning, guys. Morning. It looks pretty good, pretty encouraging. Maybe if you could touch upon... I mean, one of the things that's particularly appealing here is the occupancy upside the leased or the occupied occupancy upside in your street portfolio. I think Stuart might have mentioned it was 85% occupied at the end of the quarter, and you think that's gonna get back to, hopefully 95%. What will be the impact of that on your earnings? Obviously, some of that is in your SNO pipeline, but how much more incremental rent would you be able to get from that piece of your portfolio? Yeah, Floris, this is John. I think what I would point to is if we look over the next several years, we have about 5%-10% growth, that's street lease up. Both the lease up of that, you know, call it the incremental, 10%, as well as the fair market value that we get to mark-to-market, is gonna be a big chunk of that 5%-10%, which, you know, we think is north of $30 million in total for our entire portfolio. You know, a good chunk of that growth is coming from that portion of our portfolio. Probably half. Great. Yeah. Yeah, it's over half, right? If I think about it's like, you know, close to, you know, almost more than 2/3. Is that the right way to think about it? No, I think that makes sense. You'll have to get a little bit more granular in order to do that, Floris, but I think it's a good chunk of it for sure. Great. And, maybe, you know, Ken, you mentioned something about larger opportunities, and that sort of, you know, got me thinking what potentially could be out there. You talking about, is that for the core or is that for the funds? Presumably you would use some of your LPs for co-investments. Maybe if you could expand on that and, you know, what you see in the, you know, as potential things that could be interesting to you, including obviously there's presumably a lot of New York street retail that's got some hair on it right now, outside of your markets, clearly. Let's separate capital structure, which is highly dependent on a variety of factors ranging from availability of debt, cost of capital for us within the REIT, separate capital structure from where we see opportunities. What we have always done over the years is not be overly beholden to the public markets if the public markets were not available. Also recognize that there are gonna be a variety of opportunities for assets, right structure, right time that belong in our core portfolio. I see opportunities falling into three categories. One is, it is likely, given what's going on with the regional banks, it is likely for a variety of other reasons that we're reading in the headlines, that there could be complicated but highly profitable debt restructuring, debt purchases, things that are more consistent with what you've seen Acadia do in its fund or joint ventures over time, whether it was our purchase of Mervyn's and Albertsons or some of the more complicated restructurings that we get involved with. That's certainly a possibility, and I would expect us to utilize our institutional relationships for something like that. While some assets might be at the property level consistent with our core portfolio, we need to be open-minded and opportunistic on that side. For the street retail, as you mentioned, Floris, I do think there's gonna be opportunities. The number of previously institutional owners who now are focused elsewhere, could create opportunities. In both instances, I think we're talking many months before this all plays through. But in a couple quarters, we could see opportunities there. Whether we do these on-balance sheet or in some form of structure, time will tell. The good news is retail and retail expertise and retail platforms are finally once again getting the attention from institutional investors. The inbound inquiries of ways to partner with us, are very encouraging. Thanks, Ken. Thank you. Our next question coming from the line of Ki Bin Kim with Truist. Your line is open. Thanks. Good morning. Our first question, the North Michigan Avenue mortgage is maturing in 2025. Any early thoughts you can share in terms of if you plan to cover the debt service, when the occupancy falls off, or how you want to handle that maturity? Yes, we have a lot of time left on the mortgage. It's at a solid rate. We have a very good relationship with the borrower or with the lender keeping. You know, stay tuned. One we're seeing some interesting things happening on North Michigan, but stay tuned. Okay. A couple of things happened since the last earnings call. In Chicago, they elected another mayor that appears to be soft on crime. What do you think? What's your forecast for, I guess, your Chicago urban street retail portfolio? You're earning about 1/3 of your street and urban income comes from Chicago. Just kind of any high-level thoughts on how that might impact your business or tenant demand. Sure. Without delving too much into politics, big picture, we have more than enough exposure to Chicago. Almost irrespective of how bullish I might be, what I would guide you to expect is that we will decrease our percentage of revenue in Chicago relative to other areas, just in terms of prudent balancing. That being said, Chicago has a lot going for it. It has challenges. The elected officials, I think, across the board understand this. Let's see over the next several years how this all plays out. It wouldn't be productive for us to say that a new incoming administration is not going to be effective before they have even started. In short, we're going to manage our Chicago exposure prudent relative to the overall size of our company. Chicago is one of the great cities, and I would not rule it out. Okay, thank you. Thank you. Our next question coming from the line of Todd Thomas with KeyBanc. Your line is open. Hi. Thanks. Good morning. Ken, you know, first, just wanted to follow up there, I guess, on the street and urban portfolio, the Chicago Metro specifically, which does look like, you know, there's a fair bit of upside there. You know, Stuart outlined some of that, and some of the progress, John too. You signed a lease at Rush & Walton in the quarter. Can you talk a little bit more about some of the momentum and sort of discuss leasing activity in the Metro around assets like Sullivan Center and Roosevelt Collection and Clark and Diversey, which are, you know, some of the assets that have lagged in the recovery, whether you're seeing an improvement in those sub-markets, and can you talk about the timeline to sign additional leases? Sure. Let me give some overview, John, you may wanna touch on, and you did touch somewhat on State Street. Each market's recovering at different points. Some of the markets, Todd, are performing as well as any of our other street retail markets. Armitage Avenue, Rush Walton are two of those examples, which don't seem to be in any way hampered by any of the other concerns, that have slowed down the recovery of North Michigan Avenue or have slowed down the recovery of State Street. State Street, we're already seeing a nice uptick in retailer sales, that's encouraging 'cause I still consider that also early stage. Similarly, Clark and Diversey finally signing leases and getting traction there. The one that I think we're all gonna watch most carefully is the return of North Michigan Avenue. As I said, based on some of the conversations we're having with a variety of retailers who are intending to open, I think we will be pleasantly surprised over the next year or two, as to the return of North Michigan Avenue. John, anything you wanna add to that? Todd, guess what I'll say is on, you know, you highlighted that we, you know, we did sign a new lease in Rush & Walton. What I'd like to point out just as the recovery, that was a lease, it was a former bank space that we got back several years ago. That for, you know, a variety of reasons, it was a slightly off the corner. We've had a challenging time leasing it. That finally leased at a really strong rent to an exciting retailer. That's one where, you know, we're seeing new tenants entering the market that they're starting to see the uplift and opportunity there. When we look at our leasing pipeline, you know, those that we refer to as at lease, meaning we're in the final stage of lease negotiation or LOIs. We're seeing both in terms of Clark and Diversey, which you've mentioned. We have a couple of leases in Clark and Diversey that are at lease, that we hope to get executed, as well as even stay tuned, very early stages, but you know, potential large opportunity on State Street. We are starting to see that show up in our, in our leasing pipeline. You know, as I mentioned in my comments, we're seeing some encouraging signs of, you know, we talked about the 70%, but that other 30%, which, you know, we'll put some of those streets of Chicago clearly into that. We're starting to see some early signs. One final point on that, Todd. I don't want anyone on this call to think that our thesis is contingent on a rebound to the upside in that 30%. We are being very conservative in our view. We will navigate through. We will dispose of some of those assets as soon as we fix them. This is not us counting on the recovery there as much as it is us appreciating the significant outperformance and growth we are seeing in the 70% and the stability we're seeing elsewhere in the portfolio. Okay. Then, you know, also in Chicago, the addition of 840 and 664 North Michigan Avenue to the redevelopment pipeline there, you know, that's over, you know, $250 million of value, you know, I guess at your basis. Can you talk a little bit about the potential timeline for those projects and, you know, how we should think about the value creation opportunity, you know, relative to your basis in those assets? Maybe John, can you also provide a little bit of insight around the NOI impact that we might anticipate, you know, the drag associated with repositioning those assets, whether that's going to, you know, materialize in 2023 or 2024, what we should be anticipating. Assume, this is Ken first, and then John, feel free to add in. Assume the downtime associated 2023 a little bit, 2024, is in our numbers, and we're not expecting a quick rebound, a quick retenanting because it takes time even in the highest demand of spaces to get tenants open, occupied, paying rent. Assume that that is in our numbers when I say eight steps forward, two steps back. Assume that's part of our two steps back and is still part of our 5%-10% growth notwithstanding. John, I don't know if you want to add more specific color, but the bottom line is, it is in our numbers, and we continue to have a conservative outlook while still starting to see some new tenant interest, which is very encouraging. Yeah. Todd, I don't wanna go lease by lease and exact RCD dates for a variety of reasons because there's, as you expect, with 1,500 leases in our portfolio, there's lots of puts and takes. In terms of NOI impact, given when the leases mature, some of them third quarter this year, some first half of next year, the rollover impact year to year is going to be split between, you know, split between the years. Just reiterating what Ken said, in our growth expectations, this has been very conservatively factored in. If we look back to last quarter supplement, you know, it's almost $12 million of ABR between the two properties. It sounds like between, you know, later this year and, you know, through 2024, that's gonna go away, and then there will be downtime, you know, before you retenant, reposition those assets. I mean, is that the way we should think about it in the model? Yeah, that's how we thought about it in ours as well in terms of when those leases come out. You know, again, don't wanna get too granular, but think of real estate taxes as part of that. Once we get that spaces back, you should assume that we'll be aggressively challenging real estate taxes, which are a good portion of where that NOI is. Just stay tuned, Todd. I think like I said, it's been in our numbers and has always been in our numbers. This is not a surprise for us. Okay. Got it. All right. Thank you. Thank you. Our next question coming from the line of Linda Tsai with Jefferies. Your line is open. Hi. Can I speak in to street retail. When you consider the street retail portfolio and some of the sub-markets that have been slower to recover, like North Michigan, San Francisco, Mercer Street and SoHo, taking into account your basis, how would you rank them in terms of the most potential upside over the next several years? Three somewhat different categories. Keep in mind, for our core portfolio in San Francisco, we own two shopping centers. Shopping centers with parking. They're in the markets, but those are more necessity-focused, and a little different than the high street retail that you would experience in SoHo. Then North Michigan Avenue, somewhat larger format, more tourist driven. Apples, oranges, and tangerines. San Francisco shopping centers, we have a fair amount of NOI growth. It's pretty straightforward. It is in no way dependent on return to tourism or any of those things. San Francisco street retail, which we have in our fund, that may take a little while longer to see tourism fully embraced back there, see folks come back to living in San Francisco, and that may take a little longer. It's case by case as to when do we get Whole Foods open, when do we and how do we deal with the thriving Trader Joe's, and then assuming we get the space back adjacent to our The Container Store in 555 Ninth. Very different, more traditional shopping center leasing there. SoHo, by far the most upside in terms of percentage of rent growth, rent per foot. John, you could give by order of magnitude where we see SoHo growth versus some of these others. Mercer Street, specifically, Linda, you know, is one store. That in and of itself is not gonna be the same as the growth that we see as we complete the redevelopment in San Francisco. SoHo overall is gonna have probably be the largest contributor to growth within our street portfolio, because of a combination of contractual growth. Remember, we tend to get 3% contractual growth in all of those stores. Fair market value resets, something we only see in our street retail portfolio, and we have some nice ones teeing up in SoHo. As you pointed out, we have a vacancy on Mercer Street, and thankfully, we're getting good activity there. The way lease-ups work in these markets, we've seen this through several cycles in markets like SoHo. Retailers like to cluster. You first see the movement based on whoever's making the most significant push. This cycle, it's been luxury. Luxury has doubled down in our street corridors. It's those streets. In the case of SoHo, that means Green Street, first and foremost, Prince and Spring, all where we own and are active, that have seen the first lift, and the other corridors follow. feels to me like Mercer's next up at bat for that. Thanks for that context. John, the unchanged 270 BPS of annual credit loss, you said you only needed half of it for the quarter. Maybe to just further clarify, how much bad debt did you realize in 1Q as a percentage of 1Q base rent? You'll think of like $135, you know, about a little less than half of the $270. Against Q1 rents, about 130, 140 basis points against Q1, pro rata per quarter. Got it. Thank you. Just take whatever our quarterly rents were year. Sorry, we just had this debate. Just take whatever our quarterly rents that we build x 1.35%. We used about half of what we thought the annualized $270 was, right? Does that make sense, Linda? Yes. Thank you. Thank you. Our next question coming from the line of Lizzie Doykan with Bank of America. Your line is open. Hi. Thanks. Good morning. I just wanted to clarify out-of-period collections once more. I apologize if I missed it, but I think you said the headline same-store NOI number would have been close to 9% had it not been for the impact from this. Can you confirm that once more? The impact expected for the full year, if that's meaningful. Thanks. Yeah. Liz, I think the 200 basis points, if you look at last year, the comparable period, we had in our press release, you'll see there was about $600,000 of prior period cash collections, which is the 200 basis points that this year we had virtually none of it. You know, you could look at last year's, like, throughout each of the quarters that we disclosed each of the out-of-period cash collections in each quarter. This year, as you'll see in our guidance, we have, you know, that's largely behind us. Okay, thanks. I know you said you're seeing no signs of further tenant distress. Just wondering how your most recent discussions have been with particularly the small shop retailers in your portfolios, any signs of credit concerns or maybe changes around lease negotiations? Still early. Remember, our small shop tenants show up primarily in the suburban portion of our portfolio. They tend to hang on until they can't. It's what we refer to in the industry as midnight moves, in that they'll do their best to hang in there. So far they are. So far, we're not seeing any problems. Certainly when we think about where we might have vulnerability in the event of a hard landing, it's usually in that segment, that we see a quick movement. Haven't seen it yet. Hopefully, we don't see it. It's a very small portion of our portfolio. Great. Thank you. Sure. Thank you. Our next question coming from the line of Michael Mueller with JP Morgan. Your line is open. Oh, hey. A few hopefully quick ones here for you. First of all, I guess in the comment about, I think it was 85% occupancy on the street portfolio, where could that go to, say, by the end of 2024 on that trajectory up to 95%? I'm thinking through space by space, Mike. I think it's fair to assume we think we get back to call it 93%-95% in the next 18 months, 18-24 months, right? 'Cause some of that's in Dallas, which, you know, we outlined in, you know, both Stuart and myself in our talking points where we're doing some pretty exciting things there that'll be a big boost to it. I think 18-24 months, we get back to, you know, low mid 90s. Got it. Low to mid-nineties. More than halfway there. Okay. By that time period, Mike. Got it. Okay. Can you comment about Chicago exposure and kind of maybe balancing that or reducing it relative to the overall pie? Do you see that being more of a function of deploying capital elsewhere and shrinking it while, you know, not really swapping out the assets or maybe accelerating some asset sales, to sell down your exposure in the market? Either, I'm not waiting for us to deploy more capital to do it, just in light of the last couple of years. I think you should expect us periodically fix and sell assets, because they still trade pretty well there. Got it. Okay. That was it. Thank you. Sure. Thank you. As a reminder to ask a question, please press star one one. Our next question coming from the line of Craig Mailman with Citi. Your line is open. Hey, guys. just John, quickly, I know you said there was about a 50 basis point difference between core NOI growth and same store. I mean, is that what the drag would have been just for putting the North Michigan assets into redevelopment? You know, maybe how much of a drag would have been also 555 Ninth was in the same store pool. I think it's everything, Craig, that's in there, right? I think No, I think I would not just say it's all, it's all North Michigan or all of that. It's just that's our aggregate portfolio, right? You know, like for instance, Henderson, the growth in Henderson, you know. There's puts and takes throughout it, but point is that our total core grew 6.5%. Right. Okay. It's strong growth. It's strong growth either way, whether it's same store or total. Yep. Okay. Just separately, Ken, maybe just with the news about, you know, Whole Foods pulling out of San Francisco, Nordstrom now pulling out of San Francisco. Just kind of curious if the conversations at all have changed for the backfill of 555 Ninth or just in general, with tenants being a little bit more hesitant to take more exposure in the city at this point. What I'll point out is our two shopping centers are not at the downtown and in conversations specifically, with our retailers, including Whole Foods, full speed ahead from their perspective. This is a downtown phenomenon that doesn't apply us, thus to our shopping centers, but is one that the city's gonna have to focus on. They will, and San Francisco will come back. It may take a while. Thankfully, we're not part of that. It is certainly a challenge that business leaders, political leaders are focused on. I know, you know, the question about San Fran. I just gonna ask, people ask about Chicago on the call. Just as you guys look about deploying capital assuming, you know, normalization of the transaction market, where would you put incremental capital on the street retail? Would it be in existing markets only, or are there a couple, you know, new markets you guys would look to enter? Yeah. There are certainly new markets. I think the way we do this, the way we have done it historically, is we sit with our retailers and understand what markets are they focused on. 5, 10 years ago, it was clear to us that SoHo was one of those markets. There were a handful of key markets. As we've discussed with Melrose Place, SoHo, we're seeing that kind of validation where we'd be happy to own more. When you see our stepping into Henderson Avenue in Dallas, there are a bunch of other markets we won't spend today's call on it, where our retailers are saying, yes, these are now likely to be forever markets. If it can meet our criteria, right barriers to entry, right supply constraints, right value, we are more than happy to add additional markets. I think I've been abundantly clear, there are a handful of markets that we currently own that we are gonna subtract, not add. Great. Thank you. Thank you. Again, if you'd like to ask a question, please press star one one on your touchtone phone.