Good day, and thank you for standing by. Welcome to the Q3 2023 Acadia Realty Trust Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there'll be a question-and-answer session. To ask a question during the session, you need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that this conference is being recorded. I would now like to hand the conference over to your speaker today, John DeMoulas. Please go ahead. Good morning, and thank you for joining us for the third quarter 2023 Acadia Realty Trust Earnings Conference Call. My name is John Demoulas, and I am an analyst in our finance 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 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, October 31, 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 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 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 is my pleasure to turn the call over to Ken Bernstein, President and Chief Executive Officer, who will begin today's management remarks. Thanks, John. Great job. Welcome, everyone. Happy Halloween. I'll give a few comments, then I'll turn the call over to A.J. Levine, who heads up our leasing and development division, then to John. After that, John, Stuart, A.J., and I will take questions. As you can see in our earnings release, we had another solid quarter driven by strong same-store growth of nearly 6%, and this growth is hitting our bottom line earnings as well. I'll let A.J. discuss the leasing environment and our achievements last quarter, but our goal of creating superior top-line growth and having that growth translate into bottom-line earnings growth remains on track. On previous calls, I've walked through in detail the drivers of improving tenant demand, so I'll try not to repeat myself today, other than to say that even with current macroeconomic concerns, the consumer remains fairly resilient, and more importantly, while retailers' quarterly results may vary, tenants are looking past this short-term uncertainty and are continuing to execute on their multi-year growth goals. And now that we are a couple of years past the lockdowns of 2020, it's worth taking a moment to look at how the retail real estate recovery is playing out. Some of what we're seeing in our results is well understood and broadly discussed, but other components are only recently beginning to be appreciated. The suburban segment of our portfolio was the first to bounce back from the early days of COVID. The resilience in this segment is pretty well understood. Going forward, we expect market rent growth to continue at a similar rate to economic growth, and the key issue here will be increasing capital expenditures and operating expenses, which is reducing net effective rent growth. Then, in terms of street retail, first, we saw our rebound in that portion focused on the local neighborhoods, ranging from Greenwich Avenue in Connecticut to Armitage Avenue in Chicago. For this segment, and for a variety of reasons, market rents recovered to pre-COVID levels pretty quickly and have grown in excess of 20%, and in some cases, as high as 30% since then. Also, since CapEx as a percentage of rent is significantly smaller, net effect of rent growth has been strong as well. The supply-demand balance is again favorable to landlords. Tenant rent-to-sales ratios are healthy, and we should be able to see net effective growth here also at or above the contractual growth rate of 3%. The issue here is that tourism is generally not a driver of sales in the neighborhood segment, and increased return to office might be a bit of a headwind. Then what is probably most surprising and generally not yet appreciated is the recovery of major market street retail, whether SoHo in New York or Melrose Place in L.A. or many of the other corridors in our portfolio. Given that over half of our street retail falls into this segment, it's a recovery we are watching carefully. A couple of years ago, it was unclear how key streets were going to respond to hybrid work, to subdued international tourism, and to a shift by many families to the suburbs or Sun Belt cities. We have more clarity now. Hybrid work is not a headwind for these corridors. The recovery of international tourism is only beginning to show up. The pace of urban out-migration has slowed, and in some cases, reversed. And most importantly, retailers are more focused today than ever on controlling their customer experience in an omni-channel world by having their own physical stores. Retail rents for key corridors first recovered to 2019 levels between one and two years ago, and we thought they might level off from there. We were wrong. As evidenced by some of our recent leasing accomplishments in key streets, market rents are now 20%-40% above 2019 rents. This means that on a net effective basis, market rents since 2019 have grown in these streets more than in any other component of our portfolio. Our recent Broadway Prince Street lease in SoHo is an example, where the recent spread of 45%, after only two years, is a good approximation of market recovery there since 2019. But we're also seeing meaningful growth in Melrose Place, the Gold Coast of Chicago, M Street in Georgetown. And as opposed to other segments of our portfolio, these markets are in earlier stages of recovery, and based both on tenant demand and tenant health, market rents for this segment seem to have more room to run beyond this current rebound. And along with strong contractual growth, we should be able to recognize this NOI growth sooner as well, since we have more mark-to-market opportunities in this segment. Now, to be clear, not all markets in our portfolio have yet recovered. Markets that have lagged some are downtown San Francisco, North Michigan Avenue in Chicago, and Madison Avenue here in New York. But in recent months, Madison Avenue is quickly recovering, and I'd expect other markets to follow as well. Now, I appreciate that it is still hard for some to reconcile this tenant demand and performance, with the perceptions around return to office or urban flight. Additionally, we recognize that this growth may not be fully appreciated until we are past some of the macro concerns around a looming recession and elevated interest rates. But as we continue to post these gains, they become harder to ignore. Thus, as it relates to internal growth, we are on track for our multi-year growth goals, and while we expect a slowdown in the economy will eventually create a reduction in tenant demand, we're not seeing it yet. Turning now to the capital markets. Well, the good news as it relates to the consumer, the job market, and our leasing performance is the bad news or headwinds in the Fed's focus on reducing inflation. Furthermore, the inverted yield curve and elevated interest rates are not just impacting borrowing costs, but also creating uncertainty as to real estate values. Thankfully, as it relates to Acadia, and as John will discuss, we have nicely hedged our interest rate exposure for our core portfolio, and our maturity schedule for the next couple of years is also in good shape. The real question is the impact on the value of high-quality, cash flowing real estate, and the markets are fairly divided on this issue. While no one believes we are quickly returning to the era of free money, sellers want buyers to assume that the ten-year Treasury recovers to its recent 3.5% rate or lower, and that the economy has a very soft landing. And buyers want to transact on the assumption that the ten-year Treasury is at 5% forever and that the landing is hard. And thus, we have a wide bid-ask spread and limited transaction activity. And while this debate continues, the inverted yield curve is also causing too many investors to remain focused on short-term investments and debt-like instruments, rather than taking duration and equity risk. This pricing impasse will likely end over the next few quarters. We're beginning to see some distress and turnaround opportunities emerge, and we'll make sure we position ourselves to participate in them. We'll be respectful, not to add unnecessary complexity, not to leverage our balance sheet and not to grow for growth's sake. But given our institutional capital relationships and our ability to identify opportunities even when our stock price is not advantageous, such was the case in Lincoln Road in Miami after the GFC, or our participation in the privatization of Albertsons supermarkets, or the dozen other transactions that we participated in. We will come up with ways to see that our shareholders benefit as external growth opportunities arise. And since it doesn't take much volume to move the needle for us, even a few acquisitions, whether on balance sheet in conjunction with capital recycling or utilizing our institutional capital relationships, they can meaningfully add to our external growth. As it relates to Fund V investments, we have an asset under agreement which fits our target profile and investment returns, and we will round out the balance of Fund V with that. For future investments of this style, we're going to continue to rely on our institutional relationships to add to that platform. Given our 20-year track record of raising and managing third-party capital for the benefit of both the institutional clients as well as the public shareholders, the key is first and foremost, finding the right opportunities. And as time marches on, we suspect those opportunities will show up. So to conclude, it was another quarter of validation of our thesis. Solid top line growth, hitting our bottom line. As you will hear from A.J., our leasing activity is robust, and as you will hear from John, our multi-year above-trend NOI growth plan is intact. With that, I'd like to thank the team for their hard work over this last quarter, and I'll turn the call over to A.J. Levine. Great. Thanks, Ken. Good morning, everyone. So just to introduce myself, I oversee Acadia's leasing and development team, which is ultimately responsible for driving organic NOI growth for our $5 billion open-air portfolio, ranging from best-in-class street assets to open-air shopping centers, both wholly owned and in our funds. And because of our diverse portfolio, we have a unique perspective on what's happening across asset classes and within retail. And I and my team have direct access to a wide range of retailers, from top-line luxury to grocery, F&B, specialty retailers, all the way to our discounters. From Cartier to Whole Foods, from Lululemon to TJX. So today, what I'll discuss is what we're seeing at the asset level, on our streets, in our shopping centers, and what we're hearing from our retailers. What we're seeing today is incredibly strong demand from retailers across the board. As Ken mentioned, our retailers continue to tell us that because of their performance over the past 18-24 months, and because of their focus on the importance of the physical store towards achieving and sustaining profitability, they are seeing past any short-term choppiness and remain focused on long-term growth. We're also seeing a continuation of the landlord-friendly supply-demand dynamic that started in 2022, and that's again, driven by strong retailer performance, a flight to quality, healthy tenants in terms of both balance sheets and rent-to-sales ratios, and record low levels of supply. That's all translating into consistent rent growth in most of our core markets and helping us make significant progress towards our goal of increasing core NOI by $30-$40 million over the next several years. So what does this progress look like? We'll start out with leasing volumes. Just to clarify, my team is completely agnostic to core and fund leasing. Our focus will always be on best execution across platforms, but the numbers I'm about to mention are for our core only at our pro rata share. Last year, meaning full year 2022, we had one of the most productive leasing years we've ever had on record, certainly over the five years that I've been with Acadia. My team signed nearly $9 million of new core leases, representing about 6.5% of our in-place ABR. Now fast-forward to 2023, and this year is stacking up to be even stronger. My team has already signed over $8 million of new leases during the first nine months of 2023, and we're expecting to sign another $2 million-$3 million of deals during the fourth quarter, resulting in a total of $10 million-$11 million of ABR of new deals in 2023, or a 20% increase over an exceptional 2022. So in the aggregate, that's about $20 million of ABR or about $25 million of NOI from new leases. So I say this not just to give the team some well-deserved recognition, they certainly deserve it, but really to highlight the meaningful progress that we've already made towards achieving our internal growth goals. In addition to beating our volume goals, we are consistently exceeding our budgeted rents. This is true for our suburban portfolio as well as on our streets. For instance, what we accomplished in New York City in the third quarter is a great example of what we're seeing across our high-growth streets. During the quarter, we signed three new leases in New York City, with two new leases signed in SoHo at cash spreads of 45% and 95%. We also signed a lease in Williamsburg, in Brooklyn, at a 55% spread. Our payback period for the capital that we had to put into those deals was about a year of rent on average. That's one of the benefits of street versus suburban leasing, those significantly shorter payback periods. Another benefit of street leasing is fair market value resets, which gives us another bite at the apple to mark-to-market rents. Over the past 12 months, we've benefited from 5 fair market value resets across our high-growth streets at approximately 25% mark-to-market. That was done at no cost to Acadia, and the spreads alone equate to just under $0.01 of FFO. For a company of our size, operating in a street and urban leasing environment, with the growth that we are seeing today, we can meaningfully impact FFO with a relatively small number of lease transactions. That leads me to another important point. My team is constantly looking for opportunities to mine the portfolio and proactively take back space when conditions are right. We are in a moment in time, right now, where an engaged, hands-on team can make a material, incremental impact by unlocking these spaces and bringing them to market. This is not just about leasing up vacancy. For two of the leases we signed this past quarter, we proactively recaptured those spaces before the previous tenant's lease expired. From constantly speaking with our retailers, we knew about several tenants that wanted those spaces at market rents, which were substantially higher than what we were getting at the time, approximately 45% and 55%. That's the double-digit growth that Ken mentioned and that we're seeing across our streets. Again, this is all driven by sales that remain well above 2019 levels and the incredibly low supply we're seeing in our streets. In SoHo, for instance, most of the prime space has already been spoken for. Melrose Place and Armitage Avenue are both 100% occupied with a waiting list, and Greenwich Avenue is not far behind. On M Street, for those smaller to medium-sized spaces, they are at a premium, leading to spillover onto Wisconsin Avenue, where we also own, as our specialty apparel and aspirational brands continue to push to secure market or secure space in the market. Again, that's driven by healthy competition, or that's driven healthy competition for space, both vacant and occupied, and multiple offers for us to choose from. And it's giving us meaningful pricing power and allowing us to hand-curate our streets with tenants that will improve the overall market. That's where we really excel. So think Armitage Avenue is a perfect example of that. But to be clear, this is not unique to SoHo and Williamsburg. This is not unique to Armitage. This is consistent with what we're seeing on most of our streets. Last quarter, the story was Melrose Place at 30% spreads. This quarter, the story is SoHo. Now, shifting to our suburban centers. Our suburban portfolio continues to see quality top line growth and stability. We're seeing very healthy competition for our junior boxes, although those deals do tend to come with more relative costs and a longer payback period. Some exciting news from the quarter, we delivered our House of Sport to Dick's Sporting Goods down in Brandywine in Wilmington. They're expecting to open in late 2024, and that was one of our two former Bed Bath & Beyond boxes in our core portfolio. Finally, City Point in downtown Brooklyn. The momentum that we continue to see in downtown Brooklyn is just incredible. Keep in mind, this is a market that's already added 27,000 new residential units, including 1,200 directly above our project. NYU has a tech campus in downtown Brooklyn with 7,500 students. It's home to the Barclays Center. It's home to Brooklyn Borough Hall, the MetroTech Center, with over 25,000 employees directly across from City Point. And in response to this incredible growth and the accelerated maturation in the market, the curation at City Point remains very unique. Not only do we have anchor tenants like Target and Trader Joe's, but we also have an Alamo Drafthouse that's one of the top theaters in the country in terms of volume per screen. We have a 60,000 sq ft Primark that opened last year and continues to drive tremendous traffic to the center. We're averaging over 600,000 visitors a month, and traffic has increased 16% year-over-year. We're also home to the largest food hall in Brooklyn, with 40 unique vendors, that is exceeding its pre-pandemic sales volume on a personal basis and is now 95% leased. Fogo de Chão, who we signed earlier in the year, is on schedule to open in December, so they're going to anchor the north side of our Prince Street Passage. Court 16 opened this past quarter. That's 20,000 sq ft of indoor tennis up on the fourth floor. And speaking of openings, the one plus acre park directly across from our Gold Street retail is on track to open in the first quarter of 2024. So that park will be downtown Brooklyn's backyard and really a connection point for everything that's happening in the neighborhood. With the park's opening, we're finally able to activate some of our most valuable space on the street that we've been strategically holding back from the market. Perhaps the most exciting news for City Point this past quarter is that just last week, we signed a new lease with Sephora to anchor our south entrance. They'll join a lineup that already includes Lululemon and McNally Jackson and Joybird, and that's an absolute game changer for City Point and a major validation of our team's efforts. Now we have both entrances anchored with Fogo de Chão on the north end and Sephora and Primark on the south, and we can continue to curate and fill in the remaining spaces with young, relevant, exciting tenants. We're doing this all while exceeding our budget, both top line and on a net effective basis, and we remain on track to meet and exceed our projections. Stay tuned for more on City Point. We should have more exciting news to announce soon, and hopefully, that gives you a flavor of what we're seeing within our portfolio and on our streets. With that, I will hand things over to John. Thanks, A.J., and good morning. We had another strong quarter. As A.J. walked us through, the volume of deals and the rates we are achieving are continuing to exceed our expectations. Notwithstanding the rapid rise in interest rates, we have substantially mitigated our earnings exposure for the next several years through our use of interest rate swaps and managed debt maturities. This gives us increased confidence to reaffirm our multi-year same-store NOI growth projections, and more importantly, that this top line growth will continue dropping to our bottom line earnings. Now I'll provide some further color on each of these, and starting with our third quarter results. We reported FFO of $0.27 per share. It's worth reminding everyone that, as we had anticipated, embedded in our third quarter results is the NOI impact from the tenant rollover on North Michigan Avenue and Bed Bath & Beyond, that we have been discussing for the last several calls. With this known rollover, our third quarter core NOI is at its trough, with meaningful growth in front of us as our signed, but not yet open pipeline starts to kick in. In a few moments, I'm going to walk through a preliminary 2024 earnings bridge that highlights our current expectation of, once again, delivering strong same-store NOI growth, as well as year-over-year earnings growth in 2024 and beyond. In terms of our 2023 full year earnings expectations, for the third time this year, we have increased our FFO to $1.26 at the midpoint, after adjusting for the $0.05 gain that we discussed last quarter. And at $1.26, this results in year-over-year earnings growth of about 6%. Now moving to same-store NOI. Driven by the profitable lease up within our street portfolio, we reported same-store NOI growth of 5.8% for the quarter, which once again exceeded our internal model.... And with growth of 5.9% for the 9 months, we remain on track to come in at the upper end of our initial 5%-6% full year 2023 guidance. It's worth highlighting the correlation between our top line growth, meaning same-store NOI, to our bottom line earnings growth, both of which we anticipate being about 6% in 2023. We expect that this trend should continue in 2024 and in the years following. Although a bit premature to release our 2024 guidance, I want to spend a few moments highlighting a few preliminary observations on our core portfolio, which comprise the vast majority of our NAV and earnings. First, we are on track to deliver 5%+ same-store NOI growth in 2024. Secondly, in addition to projected same-store growth, we are also on track to achieve total NOI growth in 2024, inclusive of our redevelopment projects. This is even in factoring in the meaningful well over that we have been discussing for several years on North Michigan Avenue, in addition to the bankruptcy of Bed Bath & Beyond. With that in mind, I'm now going to walk through the key drivers that bridge the $0.27 of FFO that we reported this quarter to our projected 2024 quarterly run rate, that we expect to land in the $0.30-$0.34 range, which, if you are so inclined to annualize a midpoint, mathematically gets you to $1.28 for the year. Now let me walk through the pieces. Starting with our first and most impactful driver, our core portfolio. We anticipate that the growth in our core portfolio will add an incremental 1-3 cents to our quarterly run rate, with this growth being driven by the $8.3 million of ABR, or nearly $10 million of NOI coming from our signed but not yet open pipeline, as adjusted for our current expectations of potential tenant rollover and reserves. With a potential upside in the 1-3 cent quarterly range coming from our team, continuing to beat our leasing goals. Secondly, notwithstanding the significant rise in interest rates, we anticipate reducing our 2024 quarterly interest expense by about 1 cent or 2 cents, which we expect to achieve without earnings dilution, primarily through reducing leverage with retained cash flow, monetizing non- and low-EBITDA contributing assets, along with other balance sheet initiatives. Third, through a combination of fully deploying Fund V, the continued realization of fund profits and promotes, NOI growth at City Point, along with G&A initiatives, we anticipate that this increases our quarterly run rate by another $0.01-$0.02. Thus, when putting together these pieces, we are on track to achieve strong year-over-year earnings growth in 2024, particularly after adjusting for the $0.08 of the non-cash gain that we recognized in the second quarter of 2023. And keep in mind, this run rate is before layering in any accretion from 2024 external growth assumptions. I also want to quickly share how we are thinking about City Point from a 2024 earnings perspective. A.J. has already talked about all the exciting progress we have made over the past few months at the asset level, so I won't repeat any of those updates. As a reminder, last quarter, we estimated and are reaffirming net incremental earnings accretion of $0.04-$0.06. This accretion factors in both the additional NOI growth that we are projecting upon stabilization, along with the potential to further increase our ownership. And as we mentioned last call, if we were to increase our ownership in City Point prior to stabilization, this would likely create short-term earnings dilution. However, based on recent discussions with our partners, our expectation is that our ownership will remain unchanged, and thus, we are projecting that our partners' loans will remain outstanding throughout 2024. And should any of these assumptions change, we will certainly provide you with an update. Now transitioning to core leasing and occupancy. As A.J. mentioned, we signed several new leases in New York City during the quarter at average spreads exceeding 50%. These leases represented over $4 million in annual base rents at our share. Just to put this in context, a 50% spread on these handful of leases created incremental and unbudgeted NOI of about $1.5 million, resulting in over 1% annual FFO growth as compared to our prior in-place rents. Now moving to occupancy. During the quarter, we increased our core lease occupancy to 95.3% at September thirtieth, resulting in a 20% sequential increase in our signed but not yet open pipeline to $8.3 million of ABR at our share, or about 6% of our in-place ABR. In terms of timing, we anticipate that approximately 15% of the $8.3 million will commence during the fourth quarter of this year, with an expectation of about 50% commencing in the first half of 2024, and the remaining 35% in the second half. As a reminder, this $8.3 million relates solely to our core operating portfolio, meaning it excludes any signed but not yet open leases from core assets that are in redevelopment, or those residing on our fund business, including City Point, which, if we were to include our share of these leases, it would nearly double our pipeline with an additional $7 million of ABR of executed leases that have not yet commenced, or over $15 million at our share when aggregated with the $8.3 million. Lastly, I want to touch on a few items on our balance sheet. With nearly $900 million of interest rate hedges, coupled with minimal upcoming core maturities, our balance sheet is well insulated from the turbulent interest rate and capital market environment. Thus, irrespective as to where base rates may go for the next several years, we anticipate nominal impact, if any, on our core earnings through 2026 due to financing costs. Furthermore, our balance sheet goals are on track. ... With the actions that we have set out to accomplish of moderately reducing our core leverage and getting metrics back to our target levels well underway. Our goal within the next 6-9 months is to get our core debt-to-EBITDA in the mid- to low-sixes, and then firmly into the fives within the next 18 months. And just to level set the magnitude, given our relatively small size, coupled with the core EBITDA growth in front of us, the dollar amount of deleveraging that we need to achieve in order to hit our metrics is very manageable at about $100 million. And as I shared earlier, we remain confident that we should be able to accomplish our balance sheet goals in an earnings-neutral manner. So while we remain cognizant of the macro uncertainties, our progress this quarter has strengthened our conviction on achieving our multi-year internal NOI growth goals, along with the actions we are taking to ensure that this NOI growth will show up in our bottom line earnings. With that, we will now open up the call for questions. Thank you. Ladies and gentlemen, if you have a question or a comment at this time, please press star one one on your telephone. If your question has been answered, or you wish to move yourself from the queue, please press star one one again. We'll pause for a moment while we compile our Q&A roster. Our first question comes from Floris van Dijkum with Compass Point. Your line is open. Hey, good morning, guys. Thank you for taking my question. So again, another quarter of solid NOI growth. And it sounds like, you know, most of that NOI growth should translate into earnings growth, which is gonna set you apart from some of your peers over the next, you know, 12 months, I suspect. Maybe touch upon some of the balance sheet initiatives. And also, you talk about some potential asset recycling on a neutral basis. Would you also be looking to potentially reduce exposure to a market like Chicago in that instance? All right. So let's do that actually in reverse order, John. Let me start off in terms of exposure. Markets like Chicago would be logical for us on a disciplined basis, Floris, to reduce our exposure. We don't have anything against Chicago, and some of our markets, Rush Walton, Armitage Avenue, as A.J. mentioned, are leasing very well. But we do need to recognize that in the public market, having too much exposure to any one city and some of the headwinds that Chicago faces would make sense to reduce that. So that would be a market that you should expect us, on a disciplined basis, at the right time, to reduce our exposure. As it relates to the balance sheet and other initiatives, John, why don't you cover those? Yeah. Hi, Floris. I think as I mentioned in my remarks, I think it's our target's gonna be to do this in an earnings-neutral fashion. So think of things such as like in Albertsons, where there's no EBITDA coming from that. As we monetize that, that will be used to deliver as well as retain cash flow. And with the earnings growth in front of us, that will be also another source to deleverage, along with a couple other things that we have in the works that's getting us there. And then if I can have a follow-up on San Francisco, maybe a little bit. Obviously, you've still got these two really, you know, neighborhood centers, if you will, at, you know, one with a Whole Foods that's still not got its certificate of occupancy. Maybe if you can give an update on that and also maybe give an update on what the status is on the former Bed Bath space at 555 Ninth. Sure. So let me set the table and then AJ, in terms of leasing progress, leasing demand. City Center, as we've talked about in the past, Whole Foods is working through their local approvals. Thankfully, with some of the changes that have been occurring, we have seen an increase in community support for their opening and an increase in support with the city. So Whole Foods is pleased with how that is progressing, and it remains on schedule for an approval process next year. The leasing around that is relatively small shop space, but that will be a nice incremental boost as well. 555 Ninth, AJ, I'll let you give some color there, but to remind everyone, we had an oversized Bed Bath & Beyond that we recaptured. The low market lease created some earnings noise this year that I apologize about, but we are gonna split that into, since it was two-level space, two junior anchors, one on each level, and then shop space. Why don't you talk about that a little further, A.J.? Yeah, sure. So, you know, as Ken said, 555 Ninth, it's a redevelopment. It always has been. You know, Bed Bath was in 75,000 sq ft on two levels, and the plan has always been to split that up into three spaces, right? Two anchors Ken mentioned, and then the small shop space where you can really drive rents. So, you know, even in the best of times, I think it takes a while for that to come together. We are off to a great start at the center in that we leased you know, the box on the second open-air portion of the center to The Container Store, and we are getting good preliminary interest on filling, you know, portions of that Bed Bath box. ... Maybe yeah, sorry. It's yeah, thank you. Maybe last question. Thoughts on City Point? Looks like it's gonna be a massive driver that's not gonna be captured in your same-store pool. At what point, what are the steps required for you to have that be part of your same-store pool? Is it increased ownership? Is it more stabilization? Because, I mean, 7 million of SNO pipeline at City Point alone sounds pretty substantial. Yeah, sure. So here's how we're thinking about it. It's really, you know, consistent with the way we do our same-store. We will put. So the key driver will be once that hits stabilization, it'll be the year after stabilization to not create what I think would be an inappropriate same-store growth in that situation. So I think that would be, one, is getting the asset to a level of stabilization. And secondly, as you pointed out, this is still residing within a fund, and ultimate ownership is still being played out. So I think that'll be a secondary factor, but I think it's really getting to the point of stabilization. And really, what we want to use our same-store metric for is that's gonna be the level of growth that's gonna hit our bottom line, and those are the types of assets that are gonna drive that. Thanks, yeah. One moment for our next question. Our next question comes from Ki Bin Kim with Truist. Your line is open. Thank you. Good morning. On the $0.30-$0.34 of a recurring quarterly FFO run rate, how much of that $0.32 is transactional income or promote income? Yeah, so Ki Bin, what I'll—what I will just start with is preliminary. So we're not giving full detailed guidance, but what I would say is you should expect to see stability from that portion of our business for the next couple of years. So if I, again, not giving guidance, I would say it'd be a similar level to what we have this year. Okay. Going back to your comments about possibly monetizing some of your non-contributing assets, you know, how does that manifest itself ultimately? Are the book values reflective of what you think those assets might be worth? Or as we get closer to that time point, could there be kind of further impairment charges? Yeah. So I would say that our book value should be the best proxy, as accounting rules would drive us to impair otherwise. So I would think book value would be an appropriate metric. Okay, thank you. One moment for our next question. Our next question comes from Linda Tsai with Jefferies. Your line is open. Hi. What percentage of your 8.3 signed but not occupied are high-value street rents, and how does that compare to 2Q's S&O? Yeah, so Linda, I think just given the leases that AJ walked us through, I would say disproportionately amount, both in the compared to prior quarters as well as the 8.3. I'd have to do the math, but in my head, it's in the 75% plus range, I would estimate, which is a higher percentage. Then in terms of monetizing the lower growth assets, next year, just wondering if those sales, you expect them to be chunky in terms of first half versus second half? You know, stay tuned, Linda. I think we'll get more, more color on that, but I think what I would, I would say from a run rate, just picking the midpoint, the $0.32, I think between those range of those three drivers is the way to, it's a way to think about it. Thanks. And just one last one for A.J. A.J., I think you've spoken in the past about the high demand of luxury retailers as they move outside of department stores to better control their brands. What do discussions with those retailers look like today as, you know, sales? There are some reports that they're slowing down a bit. Yeah. So those discussions continue. We continue to see, you know, those luxury brands and some of the aspirational brands pivot away from wholesale and department stores and really, you know, establish their own brick-and-mortar presence, where they can control the narrative, where they can interface with the customer directly. You know, as I had said, because of their performance over the last two years, frankly, and because, you know, they've acknowledged the critical nature of that physical store, you know, most of them continue to see past that short-term choppiness, Linda, and are still focusing on long-term growth. So no slowdown in that sense. Thank you. One moment for our next question. Our next question comes from Craig Mailman with Citi. Your line is open. Hey, good morning. Ken, maybe I want to go back to your earlier comment on where kind of the mark-to-market is on some of your street assets, given the, you know, rise in rents, particularly in New York, and as we think about that versus, you know, where interest rates are going and what that could do to kind of stabilize cap rates here. I'm just kind of curious your thoughts as you kind of look at your blended, you know, implied cap rate here in the sevens, and, you know, half your portfolio is these street street assets. Kind of how you connect the dots on that valuation versus what you're seeing from a mark-to-market and CapEx needs perspective, you know, versus, you know, other portfolios in the market or kind of private market comps? ... Yeah, and there are certainly, as you just pointed out, a host of factors to try to digest at this moment in time. Let me do my best. First of all, the growth, which was what I was discussing, and that piece of it, in a period where interest rates are high, where the market is confused, where macro events seem to take control versus micro events like growth, it is hard to say here, what is the value of an asset that's growing at 5% a year, versus assets that might be more stable, growing at one or two? And I think there is that confusion right now. So I'm not gonna tell you, "Well, this is the cap rate you should ascribe to that." But over any extended period of time, if you see more growth, we all know that the markets will reward that. Second point, CapEx. We've been talking about this for a while, and there is a meaningful distinction, or at least there was a meaningful distinction between the CapEx expenditure relative to rent in our suburban portfolio, versus in our streets. It's as a ratio of rent, higher rent to CapEx, it's much healthier in the streets. That used to be the case. Now, that's the case times two or three, because not only have CapEx gone up due to inflation, but the interest cost to carry that CapEx has gone up as well. And thus, that distinction is also one that we are, as an industry, only beginning to digest. Third and final point, your guesstimate of what inflation looks like over the next five, 10 years is as good as mine, probably better. We're gonna operate under the assumption that it's going to be more important going forward to capture NOI growth sooner rather than later. The distinction I make between our suburban centers and our street retail, and A.J. certainly touched on this as well, in the streets, we have higher contractual growth. I think that's going to become more important. In the streets, we have fair market value resets. I think that's going to become more important. In the streets, we have less CapEx. That's a long-winded way of saying, who the heck knows where values are? The markets are certainly debating it. But we think that over the next year or two, the markets will settle down, and they will recognize the importance of growth and less CapEx, especially if we go through an era of higher growth, which should be good for our rents, good for our tenants, and we should be able to deliver on that piece for that segment of our portfolio. So that's a long-winded way, Craig, of trying to touch on all those pieces in a very confusing time period. I very much appreciate the thoughts. And I guess, you know, this leads to the question, 'cause you guys were able to tick off some of these street assets coming out of the financial crisis, as you noted, right? But maybe even in distress with some of the mark-to-market pricing on a going in, may not look as good as people would think. But, you know, I guess, how do you guys prepare the street or potentially, you know, communicate that from a long-term kind of growth, either earnings or NAV accretion, if maybe you're using some proceeds from potentially some higher cap rate asset sales? Just to kind of circle the square on the long-term attributes versus maybe the short-term dilution and kind of how you view the importance of that in your decision making. Yeah. So let me be clear. I don't want to spook anyone to think that what I'm about to say in any way means brace yourself for short-term dilution, 'cause I think we can avoid that. But when rents are moving as quickly as we've seen in some of these corridors, especially at a time where institutional capital seems to be ignoring that, the opportunity... Just think about the 45% spread we saw over 24 months on Prince and Broadway. The opportunity to acquire assets at 2021 rents, when A.J. has conviction about what he can deliver for 2024 rents, that arbitrage is pretty compelling, especially given that as opposed to a decade ago, there's just less competition there. Considering, again, our expertise, our access to a variety of capital sources, I am hopeful that this quiet period in terms of acquisitions ends, and that we can find value add opportunities where we can turn that tenancy around. But again, to be clear, we are not viewing this as the right time to add dilutive transactions, and we would look forward to that accretion, even if we have to wait 24-36 months to go from 2021 leases to 2024. And then just one last one. As we look to 2024 and maybe 2025, how many fair market value adjustment opportunities do you guys have? ... John? Yeah. So Craig, I would say the vast, vast majority of our streets have that provision. So I think we do have, you know, several of those coming up. So I think that's an opportunity for those. But, you know, I would say over the next couple of years, constantly having roll, and we're going to see that opportunity. And A.J. sort of mentioned, you know, we're working through some of that as we speak, so stay tuned. Let me point out, but I don't want to continue this conversation too much, just so everyone understands how Fair Market Value resets work. The tenant has the option to renew at the greater of a contractual bump, which looks like most of our standard leases, the greater of that and Fair Market Value. So the good news is, it's not as though this appraises rents downward. However, we weren't talking about Fair Market Value resets from 2017 till 2022, for all of the obvious reasons, is that tenants weren't exercising. We were using that opportunity to cleanse streets like M Street in Georgetown. But now we are at that period where tenants are exercising those options. The good news is, in conversations with our retailers, their sales are strong enough that they're more than happy to exercise those options and continuing to see their business growth. Let's move on to the next question. One moment. Our next question comes from Todd Thomas with KeyBanc Capital Markets. Your line is open. Hi, thanks. Good morning. Hey, hey, John, I appreciate the detail around 2024. You know, question, though, as we think about that $0.30-$0.34, the quarterly run rate that you mentioned and the cadence of that throughout the year relative to $0.27 this quarter, should we expect the early part of the year to be below that $0.30-$0.34 range, and then the latter part of 2024 at or above the higher end of the range as more S&O rent commences? Or, are your comments, you know, meant to suggest that you think you should be in that range throughout the entire year? Yeah. So, Todd, I guess a couple of thoughts. One, I'll start with, you know, we are not formally giving guidance, so we're certainly not formally giving quarterly guidance. But you know, what I would say, and I think right now, all else being equal, the $1.28 for the year is the one that, you know, measuring a bunch of different variables, we think we land at. And I would say that it is probably a fair assumption as the signed, but not open pool, does not all start on January first, and then our core is the biggest driver. There will be growth throughout the year on those leases that are already executed. But I think, again, without wanting to formally do it, I think picking the midpoint for an annualized number is as good of an estimate as we have right now. Okay. Then, you know, I'm not, I'm not sure if I missed this in, in those comments as well, but the 4Q implied guidance for this year, it's about $0.29, I believe, at the midpoint. Are there additional AKR stock sales embedded in the revised guidance for 4Q? And then can you just, you know, clarify your comments around the net promote income in 2024, whether, you know, that $0.01-$0.02 is what you're anticipating each quarter, or if that's incremental to what you achieved in 2024? Yeah. So I'll start with that one first. The $0.01-$0.02 is incremental off the $0.27. And again, I would just look to, you know, we're in the $30 million range from our fund business, Todd, and we think that stays stable, whether it's a combination of fees, promotes, et cetera. We think that remains very, very stable. In terms of promote, again, that's tied to, you know, a number of factors, including our taxable income, but we will be within our initial guidance range that we put out for promote at the beginning of the year. Okay. All right. That's helpful. Thank you. One moment before our next question. Our next question comes from Jeffrey Spector with BofA Securities. Your line is open. Hi, good morning. This is Lizzie Doykan on for Jeff. Just within the expectation for at least 5% same-store NOI growth in 2024, should we assume a consistent level of contractual rent bumps of, you know, 3% on street, possibly lower on suburban? And if you can't speak to, you know, exact numbers, maybe if you could just speak to expectations around, how that should change based on the, demand environment. Yeah. So Lizzie, I would say that there, the assumption that 3% on the street is absolutely still the norm. We do have some leases that A.J. is able to get 4%, but I think it's fair to use the 3% in suburban. The typical is 10% every five years, so it averages to slightly below the 2% range. But I would, you know, I would say that our contractual growth is consistent with what we've done in the past. Okay, great. Thanks. And I just wanted to go back to Ken's beginning comment around CapEx and leasing costs and keeping that under control for, you know, maintaining net effective rent growth. Just wondering if you could expand on that further and maybe give us a better idea of what the associated costs are for the $8 million in ABR from SNO. And give us maybe a better idea of a real-time update on how those costs should be recognized when the rents come online, too. Yeah. So why don't I'll take the, the piece, and then I'll have Ken talk through the trends, Lizzie. So I'd say again, given the good chunk of that $8.3 million signed, not open, is from the street, and as A.J. mentioned, our payback is a year or less. That's probably the way to, to think about that in terms of... I think your question was, when do we recognize those? We will pay them once, you know, certain costs, different periods of time, but generally when, around the tenant, when they take, take occupancy is when, whether it's the leasing commissions, we'll pay those, and then some of the upfront, whether there's any build-out costs that we, we do, we pay those in advance of them. But I would, I would say for the most part, a good portion of those, of that $8.3 is street, and we, the upfront costs are less than a year of rent. So that's the way you could, you could do the math. And on suburbia, A.J., do you want to talk through that in terms of the costs you're seeing on, on suburbia? It's going to depend on whether it's in-line space versus anchor, but just want to give a quick update on any trends on, on the cost that you're seeing on the suburban side. Yeah. So I mean, the costs to put in a junior box have been elevated, you know, really for the last 24 months. So I'd say, I'd say a typical junior box at this point is costing anywhere between $65-$80 a foot to put in, and depending on where the rent is, that can be five to six years of payback. So it certainly is, you know, very pronounced, sort of the shorter payback periods that we're seeing on the streets, just given where the rents are. Let me end with some positive news in terms of all this. We are beginning to see some disinflation in terms of the actual costs to put in tenants in suburbia. And while the cost to finance those build-outs has gone up with interest rates, when you look at the value per square foot, the price per foot or replacement cost, our retailers are recognizing staying or opening in these locations is critically important. So we're able to drive rents, and I think that the suburban component, while expensive, will still be a profitable part of our business. Great, thank you. One moment for our next question. Our next question comes from Paulina Rojas with Green Street. Your line is open. Good morning. My apologies if I missed it, but from a big picture perspective, when you are thinking about tenant failure next year, what's your base case scenario? I want to have a very big picture idea, because some of your peers have been sharing that they are thinking about approaching it as an average year from a tenant failure perspective. I wonder if, given the scenario of uncertainty that we're facing, if you think that's reasonable or not? Paulina, is your question on the credit side or the retaining, whether they on renewals? The mix, I would say. So it could be non-renewal or any type of thought that... So both. Yeah. So, so I think that was, you know, within my $0.01-$0.03 for our core. Mm-hmm. You know, we have, we have the luxury, given our size, that we could go space by space, and A.J. and I talk. We sit down right next to each other, and we have a from a point of view as to which, you know, whether a tenant's gonna stick around. So we have that luxury, given our, our portfolio and being able to go space by space, and he's talking to all of our tenants along with his team every day. So we, we have that. And what I would say is, we have not seen any meaningful change of tenants that are maybe potentially not going to stay. If anything, I would say it's more biased towards tenants wanting to stay in their space, if I had to look at that. In terms of on the credit side, another thing I watch very closely is on reserves. Do we see slowdown in payments? Do we see, you know, the leasing or lease admin teams getting questions or calls around wanting to work through payment plans? We have not seen that tick up. Not to say it's not coming, because we're not oblivious to what's happening, but we have not yet seen a pickup, as you know, some of the capital markets would suggest we potentially should have, but we have not seen that. So, you know, our reserves are appropriate in that $0.30-$0.34 number, and we're conservative in those, but have not seen a fall. Let me add a little color above and beyond our portfolio. Given the rise in interest rates, the likelihood is that tenant retention and/or tenant failure rate could be as likely to come from tenants' balance sheet as opposed to their business. Since we see tenants' business models, meaning their sales, more often than we get to examine, especially the private companies, their balance sheets, that is something we will watch. Mm-hmm. If I were to guess where this stress could occur, it would be for our local retailers who got- ...a lot of help during COVID, so we did not see the failure rate then. The local segment, especially in our suburban portfolio, adjacent to supermarket anchors, et cetera, those rents have grown nicely. So that's a segment we'll watch. So far, as John said, we haven't seen any slowdown, but common sense tells us that they may be more interest rate sensitive in terms of their business, so that's something we'll watch. And then in general, as John said, it feels like next year may be more boring than volatile on that side, but we'll see. Thank you. And then the second question, regarding new openings in your portfolio, are you seeing any trends from a category perspective? A.J., why don't you take that in terms of what trends are we seeing in terms of new tenants or where demand's coming from? Yeah, look, obviously, you know, the earlier days of COVID, the recovery was first led by, you know, the essential retailers, but then quickly behind that, we saw this huge influx of luxury into most of our, you know, high growth markets. And then, of course, you know, the aspirational and what we call our advanced contemporary brands, sort of clustering around them. And I think for most of our high growth streets, that's what we continue to see. We're seeing, you know, continued entry of luxury tenants. We're continuing to see continuation of the clustering of, those tenants that want to be near luxury. On the, suburban side, you know, a lot of the, the new store openings or the growth that we're seeing is being led by our discounters, right? So the TJX's, the Ross, Burlington's of the world, you know, they have been leading the way in terms of, you know, net new store growth, as well as, of course, the dollar stores and, you know, those sort of high volume openers. Let me just remind everyone, especially generalists who haven't thought about this, some of the trends, some of the reason you're seeing this pent-up demand. A few years ago, there was this notion that online sales were going to be the best channel for growth, and now we understand in an Omni-Channel world, the stores are the most profitable. You're still seeing that pivot, whether it's luxury, whether it's advanced contemporary, or whether it's discount. Then secondly, you are seeing retailers recognizing that now is still a good time to sign leases, even with all of this uncertainty. So it wouldn't surprise me that we'll continue to see an economic slowdown, economic uncertainty, consumer spending will be choppy, some tenant results will be choppy, and I still think you're going to see good leasing results. Thank you. Sure. I'm not showing any further questions at this time. I'd like to turn the call back to Ken for any closing remarks. Great. Thank you all for your time. We look forward to speaking with you next quarter. Happy Halloween. Ladies and gentlemen, this concludes today's presentation. You may now disconnect and have a wonderful day.