Acadia sees the potential for retailers not already established in the Bronx such as Target, Kohl's, Office Max, Bed Bath & Beyond, Best Buy and Wal-Mart. "The Fordham Road redevelopment is the first of what we expect will be several New York urban/infill redevelopment projects that we plan to execute with P/A Associates," Bernstein added.

Acadia acquired the site here through Acadia Strategic Opportunity Fund II LLC. The fund II, which has $300 million of committed discretionary capital, was established to acquire up to $900 million of real estate assets on a leveraged basis as well as invest in Acadia's Retailer Controlled Property Venture with the Klaff Organization. Upon completion of the redevelopment, it is anticipated the project will earn an unleveraged yield in excess of 10%.

During the third quarter, Acadia completed its first investment through the RCP venture. Approximately $23.2 million was invested by Funds I and II into an affiliate of Lubert-Adler/Klaff, which is part of the investment consortium, along with Sun Capital Partners, Inc. and Cerberus Capital Management LP that acquired the 257 store Mervyn's department store chain from the Target Corp. for $1.2 billion.

On a year-over-year basis, Acadia increased its portfolio occupancy by 470 basis points. Year-end 2004 occupancy was 92.3% compared to 87.6% at year-end 2003 and 86.3% for 2002. Same store net operating income for the retail portfolio increased 3.9% for annual 2004 over 2003. During 2004, Acadia executed new and renewal leases totaling 640,000 sf, or 9% of the retail portfolio at an average increase of 9% over the previous base rents on a cash basis.