CUSTODY AGREEMENT



                            RE: SALE OF COMMON SHARES

                                       OF

                               ACADIA REALTY TRUST





         THIS CUSTODY AGREEMENT (this "Agreement"), made as of the 19th day of

March 2004, between Acadia Realty Trust, as Custodian (the "Custodian"), and

Yale University (the "Selling Shareholder"), provides:



         1. The Selling Shareholder is the owner of common shares of beneficial

interest. $.001 par value (the "Common Shares") of Acadia Realty Trust, a self

administered Maryland real estate investment trust (the "Company"), and proposes

to sell 3,435,212 shares of Common Shares and, at the election of the

Underwriters, up to an aggregate of 564,316 additional shares solely to cover

over-allotments (collectively, the "Shares"), pursuant to an underwriting

agreement in substantially the form attached to the Power of Attorney (defined

below) to be entered into among the Company, Acadia Realty Limited Partnership,

certain underwriters named therein (the "Underwriters"), the Selling Shareholder

and the persons listed on Schedule A of the underwriting agreement (the

"Underwriting Agreement"). The Selling Shareholder acknowledges and consents to

changes to the form of Underwriting Agreement attached to the Power of Attorney,

provided that such changes shall not materially and adversely affect the Selling

Shareholder. Concurrently with the execution and delivery of this Agreement, the

Selling Shareholder has executed a Power of Attorney to Kenneth F. Bernstein and

Robert Masters, and each of them individually (the "Attorney-in-Fact"),

authorizing the Attorney-in-Fact to sell the Shares pursuant to the Underwriting

Agreement.



         2. The Selling Shareholder herewith delivers (i) to the Custodian for

safekeeping the certificates listed on SCHEDULE I hereto and/or (ii) a copy of

an executed DWAC Letter (as defined below), which collectively represent not

less than the number of the Shares to be sold by the Selling Shareholder

pursuant to the Underwriting Agreement. Each such certificate has been duly

endorsed in blank or is accompanied by a separate form of assignment duly

executed in blank, in either case with the signature of the holder of record

guaranteed by a bank or trust company, or by a firm having membership on the New

York Stock Exchange, in proper form to permit the transfer on the books of the

Company of the Shares represented by such certificates. The foregoing are to be

held by the Custodian pursuant to the provisions of this Agreement. With regard

to any Shares held in book-entry form or "street-name" that will be used by the

Selling Shareholder to fulfill the its obligations under the Underwriting

Agreement, the Selling Shareholder shall execute and deliver a

Deposit/Withdrawal at Custodian Letter ("DWAC Letter") in the form attached as

EXHIBIT 1 hereto to the transfer agent. Upon execution of the DWAC Letter by the

transfer agent, the Shares subject to the DWAC Letter shall be deemed to be

deposited with the Custodian and are to be held by the transfer agent as a

subcustodian on behalf of the Custodian pursuant to the provisions of this

Agreement and the Subcustodian Agreement between the Company and the transfer

agent and all references herein to the Custodian shall be deemed to include the

transfer agent, as subcustodian.

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