ACADIA REALTY TRUST
EXHIBIT 10.21
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>10
<FILENAME>ex10-21.txt
<DESCRIPTION>EXHIBIT 10.21
<TEXT>
<PAGE>

                                 PROMISSORY NOTE


US $16,000,000.00                                                   May 30, 2003


         FOR VALUE RECEIVED, the undersigned, 239 GREENWICH ASSOCIATES LIMITED
PARTNERSHIP, a Connecticut limited partnership ("Borrower") having an address at
c/o Acadia Realty Trust, 1311 Mamaroneck Avenue, White Plains, New York 10605,
promises to pay GREENWICH CAPITAL FINANCIAL PRODUCTS, INC., a Delaware
corporation ("Lender"), or order, at 600 Steamboat Road, Greenwich, Connecticut
06830, or such other place as the holder hereof may designate in writing, the
principal sum of SIXTEEN MILLION AND NO/100 DOLLARS (US$16,000,000.00) (the
"Principal"), with interest on the unpaid principal balance from the date of
this Note, until paid, at the rate of five and nineteen one-hundredths percent
(5.19%) per annum (the "Interest Rate"). This Promissory Note may be referred to
herein as the "Note," and the loan evidenced hereby may be referred to herein as
the "Loan."

         PAYMENTS OF PRINCIPAL AND INTEREST. On July 1, 2003 and on each Payment
Date (as defined herein) thereafter through and including June 1, 2005, Borrower
shall pay to Lender interest on the unpaid Principal at the Interest Rate which
has accrued from the first day through the last day of the calendar month
immediately preceding such Payment Date. The Principal and the interest thereon
at the Interest Rate shall be due and payable by Borrower to Lender in
consecutive monthly installments, each in the amount of $87,758.93 (the "Monthly
Debt Service Payment Amount") beginning on July 1, 2005 (herein "amortization
commencement date") and on each Payment Date thereafter until the entire
indebtedness evidenced hereby is fully paid, except that any remaining
indebtedness, if not sooner paid, shall be due and payable on June 1, 2013 (the
"Maturity Date").

         Interest on the principal sum of this Note shall be calculated on the
basis of a 360 day year, and shall be charged based on the actual number of days
during each month or other applicable accrual period. Interest on this Note
shall be paid in arrears.

         The undersigned shall pay the holder hereof, in advance, on the date
hereof, interest only on the outstanding principal balance of this Note, at the
interest rate first mentioned above, from the date hereof through and including
the last day of the calendar month in which this Note is executed.

         The Monthly Debt Service Payment Amount due on any Payment Date shall
first be applied to the payment of interest accrued during the preceding accrual
period and the remainder of such Monthly Debt Service Payment Amount shall be
applied to the reduction of the unpaid Principal. All accrued and unpaid
interest shall be due and payable on the Maturity Date. If the Loan is repaid on
any date other than on a Payment Date (whether prior to or after the Maturity
Date), Borrower shall also pay interest that would have accrued on such repaid
Principal to but not including the next Payment Date.

<PAGE>


         Borrower shall repay the entire outstanding principal balance of this
Note in full on the Maturity Date, together with interest thereon to (but
excluding) the date of repayment and any other amounts due and owing under the
Loan Documents (as defined herein).

         As used herein, the term "Payment Date" shall mean the first (1st) day
of each calendar month or, upon Lender's exercise of its right to change the
Payment Date in accordance with this paragraph, the New Payment Date (in either
case, if such day is not a Business Day, the Payment Date shall be the first
Business Day thereafter). The first Payment Date hereunder shall be July 1,
2003. Notwithstanding the foregoing, Lender shall have the right, to be
exercised not more than once during the term of the Loan, to change the Payment
Date to a date other than the first day of each month (a "New Payment Date"), on
30 days' written notice to Borrower; provided, however, that any such change in
the Payment Date: (i) shall not modify the amount of regularly scheduled monthly
principal and interest payments, except that the first payment of principal and
interest payable on the New Payment Date shall be accompanied by interest at the
interest rate herein provided for the period from the Payment Date in the month
in which the New Payment Date first occurs to the New Payment Date, and (ii)
shall extend the Maturity Date to the New Payment Date occurring in the month
set forth in the definition of Maturity Date.

         SECURITY; LOAN DOCUMENTS. The indebtedness evidenced by this Note is
secured by, among other things, that certain Open-End Mortgage, Assignment of
Rents and Security Agreement of even date herewith (the "Instrument"), executed
by Borrower, encumbering real property more particularly described therein (the
"Property"), and reference is made thereto for rights as to acceleration of the
indebtedness evidenced by this Note. This Note, the Instrument, and all other
documents or instruments given by Borrower or any guarantor and accepted by
Lender for purposes of evidencing, securing, perfecting, or guaranteeing the
indebtedness evidenced by this Note may be referred to as the "Loan Documents."
Any capitalized term used but not otherwise defined herein shall have the
meaning ascribed thereto in the Instrument.

         DEFEASANCE.
         -----------

         A. Notwithstanding anything to the contrary contained in this Note, the
Instrument or the Loan Documents, at any time (x) after the earlier of the 42nd
month after the date hereof or the second (2nd) anniversary of the date that is
the "startup day," within the meaning of Section 860G of the Internal Revenue
Code of 1986, as amended from time to time or any successor statute (the "Code")
of a "real estate mortgage investment conduit," within the meaning of Section
860D of the Code, that holds this Note and (y) before the date which is ninety
(90) days prior to the Maturity Date (the "Permitted Prepayment Date"); and
provided (unless Lender shall otherwise consent, in its sole discretion) no
event of default has occurred and is continuing, Borrower shall have the right
to obtain the release of the Property from the lien of the Instrument and the
other Loan Documents (such release, the "Defeasance") upon the satisfaction of
the following conditions precedent (all of which conditions shall become
covenants upon occurrence of the Defeasance):

         (i) Borrower shall provide to Lender not less than 30 days' prior
written notice specifying a Payment Date on which the Defeasance Deposit
(hereinafter defined) is to be made (the date so specified may be referred to as
the "Defeasance Election Date").



                                       2
<PAGE>


         (ii) Borrower shall pay to Lender on the Defeasance Election Date all
interest accrued and unpaid on the outstanding principal amount of this Note to
the Defeasance Election Date and the scheduled principal amortization payment
due on such Defeasance Election Date, together with all other amounts then due
and payable under this Note, the Instrument and the other Loan Documents.

         (iii) Borrower shall irrevocably deposit with Lender an amount of U.S.
Government Securities (hereinafter defined) which through the scheduled payment
of principal and interest in respect thereof in accordance with their terms will
provide, not later than the due dates of the payments owing hereunder, cash in
an amount sufficient, without reinvestment, in the opinion of a nationally
recognized firm of independent certified public accountants expressed in a
written certification thereof delivered to Lender (the "CPA Certificate"), to
pay and discharge the Scheduled Defeasance Payments (hereinafter defined). The
securities so deposited, together with any interest or other increase from the
issuer of the securities earned thereon and any replacements thereof, shall be
referred to herein as the "Defeasance Deposit."

         (iv) Borrower shall cause the following to be delivered to Lender on or
prior to the Defeasance Election Date, all in form and substance satisfactory to
Lender in its reasonable discretion:

                  (a) a security agreement, in form and substance satisfactory
to Lender, creating a first priority lien on the Defeasance Deposit (the
"Defeasance Security Agreement");

                  (b) the CPA Certificate;

                  (c) a certificate of Borrower certifying that all requirements
for the Defeasance set forth herein have been satisfied;

                  (d) an opinion of counsel for Borrower in form and substance
satisfactory to Lender to the effect that (i) Lender has a perfected first
priority security interest in the Defeasance Deposit, and (ii) the holder of
this Note will not recognize income, gain or loss for United States federal
income tax purposes as a result of the defeasance and will be subject to United
States federal income tax on the same amounts, in the same manner and at the
same times as would have been the case if the Defeasance had not occurred, and
(iii) any holder, trustee or custodian of this Note which is a "real estate
mortgage investment conduit" within the meaning of Section 860D of the Code will
not fail to maintain its status as such as a result of the Defeasance;

                  (e) evidence in writing from the applicable rating agencies
for any securitization transaction of which this Note is a part, to the effect
that the Defeasance will not result in a downgrading, withdrawal, or
qualification of the ratings in effect immediately prior to such Defeasance for
the then-outstanding securities issued in connection with such securitization;

                  (f) evidence satisfactory to Lender that suitable arrangements
have been made to maintain the existence of Borrower during the time thereafter
when the Note shall be outstanding; and




                                       3
<PAGE>

                  (g) such other certificates, documents or instruments as
Lender may reasonably request or as may be required by the rating agencies
referred to above.

         (v) Either (i) Borrower shall deliver to Lender a certificate stating
that at all times following the Defeasance, Borrower shall have no interest in
any assets other than the Defeasance Deposit, or (ii) Borrower shall satisfy all
of the requirements of Section C below.

         (vi) Borrower shall pay to Lender all reasonable out-of-pocket costs
and expenses (including, without limitation, attorneys' fees and disbursements)
incurred or anticipated to be incurred by Lender in connection with the
Defeasance.

         B. Upon compliance with the requirements of Section A above, Lender
shall cause the Property to be released from the lien of the Instrument, the
obligations hereunder and under the other Loan Documents with respect to the
Property shall no longer be applicable, the balance of each Subaccount shall be
disbursed to Borrower and the Defeasance Deposit shall be the sole source of
collateral securing this Note. Lender shall apply the Defeasance Deposit and the
payments received therefrom to the payment of all scheduled principal and
interest payments due on all successive payment dates under this Note after the
Defeasance Election Date and the payment due on the maturity date specified in
this Note (the "Scheduled Defeasance Payments"). Borrower, pursuant to the
Defeasance Security Agreement or other appropriate document, shall direct that
the payments received from the Defeasance Deposit shall be made directly to
Lender and applied to satisfy the obligations of Borrower under this Note.

         C. If, after the Defeasance, Borrower will own any assets other than
the Defeasance Deposit, Borrower shall establish or designate a single-purpose,
bankruptcy-remote successor entity acceptable to Lender (the "Successor
Borrower"), with respect to which a non-consolidation opinion satisfactory in
form and substance to Lender and any applicable rating agencies shall be
delivered to Lender and such rating agencies (if such a non-consolidation
opinion was required of Borrower in connection with the origination of the
indebtedness secured hereby) in which case Borrower shall transfer and assign to
the Successor Borrower all obligations, rights and duties under this Note and
the Defeasance Security Agreement, together with the pledged Defeasance Deposit.
The Successor Borrower shall assume the obligations of Borrower under this Note
and the Defeasance Security Agreement, and Borrower shall be relieved of its
obligations hereunder and thereunder. Borrower shall pay not less than $1,000 to
the Successor Borrower as consideration for assuming such Borrower obligations.

         D. As used herein, the term "U.S. Government Securities" shall mean
securities that are (i) direct obligations of the United States of America for
the full and timely payment of which its full faith and credit is pledged or (ii
) obligations of an entity controlled or supervised by and acting as an agency
or instrumentality and guaranteed as a full faith and credit obligation which
shall be fully and timely paid by the United States of America, which in either
case are not callable or redeemable at the option of the issuer thereof
(including a depository receipt issued by a bank (as defined in Section 3(a)(2)
of the United States Securities Act)) as custodian with respect to any such U.S.
Government Securities or a specific payment of principal of or interest on any
such U.S. Government Securities held by such custodian for the account of the
holder of such depository receipt, provided that (except as required by law)
such custodian is not authorized to make any deduction from the amount payable
to the holder of such depository receipt from any amount received by the
custodian in respect of the securities or the specific payment of principal of
or interest on the securities evidenced by such depository receipt.



                                       4
<PAGE>


         E. If, after payment in full of all obligations evidenced by this Note
or any other of the Loan Documents, any of the Defeasance Deposit remains, then
on request by Borrower such remaining balance of the Defeasance Deposit shall be
returned to Borrower (or to the Successor Borrower, as the case may be).

         PREPAYMENT; PREPAYMENT CONSIDERATION. If any prepayment of all or any
portion of the principal balance hereunder occurs, whether in connection with
Lender's acceleration of the unpaid principal balance of this Note or in any
other circumstances whatsoever, or if the Instrument is satisfied or released by
foreclosure (whether by power of sale or judicial proceeding), deed in lieu of
foreclosure or by any other means, then Borrower shall therewith pay the
Prepayment Consideration. The foregoing shall not create any right of
prepayment. Borrower shall have no right whatsoever to prepay all or any portion
of the principal balance of this Note, except only as follows:

         (i) Borrower shall have the right to prepay and shall not be required
to pay any Prepayment Consideration with respect to prepayment required by
Lender pursuant to the Instrument as a result of the application of insurance
proceeds or condemnation awards under the Instrument or as a result of
prepayment of the entire principal balance of this Note remaining due after the
application of insurance proceeds or condemnation awards under the Instrument,
provided that such prepayment of the entire principal balance of this Note
remaining due is made within one hundred eighty (180) days following the date of
such application; and

(ii) Further, provided Borrower is not in default hereunder or under any of the
Loan Documents and provides not less than 30 days' prior written notice,
Borrower shall have the right to pay all (but not less than all) obligations
then outstanding under the Loan Documents, including the prepayment of all
principal, from and after the Permitted Prepayment Date. In such case, there
shall be no Prepayment Consideration due, except that if any such prepayment
occurs on any day other than a Payment Date, then in addition to the prepayment
amount Borrower also shall pay to Lender the amount of interest that would have
accrued under the Note on the amount being prepaid from and including the
prepayment date to the next Payment Date.

         The "Prepayment Consideration" shall be the amount equal to the greater
of (i) two percent of the Loan balance at the time of prepayment, or (ii) the
sum of one percent of the Loan balance at the time of prepayment, plus the
excess, if any, of (A) the amount of the monthly interest which would otherwise
be payable on the principal balance being prepaid from the date of the first day
of the calendar month immediately following the date of prepayment (unless
prepayment is tendered on the first day of any calendar month during the term of
this Note, in which case from the date of prepayment) to and including the
Maturity Date; over (B) the amount of the monthly interest the Lender would earn
if the principal balance being prepaid were reinvested for the period from the
first day of the calendar month immediately following the date of prepayment
(unless prepayment is tendered on the first day of any calendar month during the
term of this Note, in which case from the date of prepayment) to and including
the Maturity Date at the Treasury Rate (as hereinafter defined), such difference
to be discounted to present value at the Treasury Rate.



                                       5
<PAGE>


         The "Treasury Rate" shall be the annualized yield on securities issued
by the United States Treasury having a maturity corresponding to the remaining
term to the originally scheduled Maturity Date of this Note, as quoted in
Federal Reserve Statistical Release [H. 15(519)] under the heading "U.S.
Government Securities - Treasury Constant Maturities" for the Treasury Rate
Determination Date (as defined below), converted to a monthly equivalent yield.
If yields for such securities of such maturity are not shown in such
publication, then the Treasury Rate shall be determined by Lender by linear
interpolation between the yields of securities of the next longer and next
shorter maturities. If said Federal Reserve Statistical Release or any other
information necessary for determination of the Treasury Rate in accordance with
the foregoing is no longer published or is otherwise unavailable, then the
Treasury Rate shall be reasonably determined by Lender based on comparable data.

         The term "Treasury Rate Determination Date" shall mean the date which
is five banking days prior to the scheduled prepayment date. Lender shall notify
Borrower of the amount and the basis of determination of the required Prepayment
Consideration.

         [NO FURTHER TEXT ON THIS PAGE; DOCUMENT CONTINUES ON NEXT PAGE]





                                      6
<PAGE>


         BORROWER HEREBY EXPRESSLY WAIVES THE RIGHT TO PREPAY THE INDEBTEDNESS
EVIDENCED HEREBY IN WHOLE OR PART WITHOUT PENALTY, AND EXPRESSLY AGREES TO PAY
THE AMOUNTS REQUIRED HEREIN IN THE EVENT OF AN ACCELERATION. BORROWER AGREES
THAT THE PREPAYMENT CONSIDERATION REQUIRED HEREIN IS REASONABLE. BORROWER HAS
GIVEN INDIVIDUAL WEIGHT TO THE CONSIDERATION IN THIS TRANSACTION FOR THIS WAIVER
AND AGREEMENT. BORROWER HEREBY EXPRESSLY WAIVES THE BENEFIT OF ANY APPLICABLE
LAW TO THE CONTRARY.

                                  239 GREENWICH ASSOCIATES LIMITED
                                  PARTNERSHIP, a Connecticut limited
                                  partnership

                                  By: Acadia 239 Greenwich Avenue, LLC, a
                                      Delaware limited liability company, its
                                      general partner

                                      By: Acadia Realty Limited Partnership, a
                                          Delaware limited partnership, its sole
                                          member

                                          By: Acadia Realty Trust, a
                                              Maryland real estate
                                              investment trust, its
                                              general partner


                                              By:
                                                  ---------------------
                                                  Name:
                                                  Title:


                  [DOCUMENT CONTINUES FOLLOWING SIGNATURE]

         EVENTS OF DEFAULT; ACCELERATION. The following shall constitute an
"Event of Default" hereunder: (i) if any installment under this Note is not paid
when due, or (ii) if any condition or event occurs as a consequence of which the
holder hereof then has the right to accelerate the indebtedness hereunder
pursuant to any of the other Loan Documents.

         Upon and at any time following the occurrence of any Event of Default,
then at the option of the holder hereof and without notice, the entire principal
amount and all interest accrued and outstanding hereunder and all other amounts
outstanding under any of the Loan Documents shall at once become due and
payable, and the holder hereof may exercise any and all of its rights and
remedies under any of the Loan Documents or pursuant to applicable law. The
holder hereof may so accelerate such obligations and exercise such remedies at
any time after the occurrence of any Event of Default, regardless of any prior
forbearance.


                                       7

<PAGE>


         LATE CHARGES; ADDITIONAL INTEREST ON DEFAULT. If any installment under
this Note or any other amount owing hereunder or under any of the other Loan
Documents is not received by the holder hereof within five days after the same
is due, then the undersigned shall pay to the holder hereof a late charge of the
lesser of (a) five percent of such installment and (b) the maximum amount
permitted by applicable law, such late charge to be immediately due and payable
without demand by the holder hereof.

         In addition, after the occurrence and during the continuance of an
Event of Default, the outstanding principal balance of this Note shall bear
interest at the rate of five percent per annum in excess of the rate provided in
the first paragraph of this Note, or, if such increased rate of interest may not
be collected from the undersigned under applicable law, then at the maximum
increased rate of interest which may be collected from the undersigned under
applicable law (the "Default Rate").

         Borrower agrees that such late charge and increased interest are
reasonable and do not constitute a penalty.

         LAWFUL INTEREST. The parties hereto intend to conform strictly to the
applicable usury laws. In no event, whether by reason of demand for payment,
prepayment, acceleration of the maturity hereof or otherwise, shall the interest
contracted for, charged or received by the holder hereof hereunder or otherwise
exceed the maximum amount permissible under applicable law. If from any
circumstance whatsoever interest would otherwise be payable to the holder hereof
in excess of the maximum lawful amount, the interest payable to the holder
hereof shall be reduced automatically to the maximum amount permitted by
applicable law. If the holder hereof shall ever receive anything of value deemed
interest under applicable law which would apart from this provision be in excess
of the maximum lawful amount, an amount equal to any amount which would have
been excessive interest shall be applied to the reduction of the principal
amount owing hereunder in the inverse order of its maturity and not to the
payment of interest, or if such amount which would have been excessive interest
exceeds the unpaid balance of principal hereof, such excess shall be refunded to
the undersigned. All interest paid or agreed to be paid to the holder hereof
shall, to the extent permitted by applicable law, be amortized, prorated,
allocated, and spread throughout the full stated term (including any renewal or
extension) of such indebtedness so that the amount of interest on account of
such indebtedness does not exceed the maximum permitted by applicable law. The
provisions of this paragraph shall control all existing and future agreements
between the undersigned and the holder hereof.

         CERTAIN RIGHTS AND WAIVERS. From time to time, without affecting the
obligation of the undersigned or the successors or assigns of the undersigned to
pay the outstanding principal balance of this Note and observe the covenants of
the undersigned contained herein, in the Instrument or in any other Loan
Document without affecting the guaranty of any person or entity for payment of
the outstanding principal balance of this Note, without giving notice to or
obtaining the consent of the undersigned, the successors or assigns of the
undersigned or guarantors, and without liability on the part of the holder
hereof, the holder hereof may, at the option of the holder hereof, extend the
time for payment of said outstanding principal balance or any part thereof,
reduce the payments thereon, release anyone liable on any of said outstanding
principal balance, accept a renewal of this Note, modify the terms and time of
payment of said outstanding principal balance, join in any extension or
subordination agreement, release any security given herefor, take or release
other or additional security, and agree in writing with the undersigned to
modify the rate of interest or period of amortization of this Note or change the
amount of the monthly installments payable hereunder.



                                       8
<PAGE>



         Presentment, notice of dishonor, and protest are hereby waived by all
makers, sureties, guarantors and endorsers hereof. This Note shall be the joint
and several obligation of all makers, sureties, guarantors, and endorsers, and
shall be binding upon them and their successors and assigns.

         THE UNDERSIGNED HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES
ANY RIGHT THE UNDERSIGNED MAY HAVE TO A TRIAL BY JURY IN RESPECT TO ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONJUNCTION WITH THIS
NOTE, THE INSTRUMENT, ANY OTHER LOAN DOCUMENT, ANY OTHER AGREEMENT CONTEMPLATED
TO BE EXECUTED IN CONNECTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF EITHER PARTY.

         The holder hereof shall have the right to assign or transfer, in whole
or in part (including the right to grant participation interests in) any or all
of its obligations under this Note, the Instrument and any or all of the other
Loan Documents. Lender shall be released of any obligations to the extent that
the same are so assigned or transferred, and the rights and obligations of
"Lender" hereunder shall become the rights and obligations of the transferee
holder.

         LIMITATION ON RECOURSE. Lender's rights of recourse for the obligations
of Borrower hereunder are limited in accordance with the Instrument. This
provision shall not limit any rights of Lender under any guaranty.

         ATTORNEYS' FEES, COSTS OF COLLECTION. Borrower shall pay to Lender on
demand all costs and expenses, including reasonable attorneys' fees and
expenses, incurred by Lender in collecting the indebtedness arising hereunder or
under any other Loan Documents or secured thereby, or in determining the rights
and obligations of any parties hereto or thereto, or as a consequence of any
breach or default by Borrower or any guarantor hereunder or thereunder, or
otherwise as a consequence of any right evidenced or secured by this Note or the
Loan Documents. Without limitation, such costs and expenses to be reimbursed by
Borrower shall include attorneys' fees and expenses incurred in any Bankruptcy
case or proceeding and in any appeal.

         APPLICABLE LAW. THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS OF LAWS) AND THE APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.

                         [NO FURTHER TEXT ON THIS PAGE]




                                       9
<PAGE>


                  IN WITNESS WHEREOF, the undersigned has executed this
Promissory Note as of the date first written above.

                                    BORROWER:

                                 239 GREENWICH ASSOCIATES LIMITED
                                 PARTNERSHIP, a Connecticut limited
                                 partnership

                                 By: Acadia 239 Greenwich Avenue, LLC, a
                                     Delaware limited liability company, its
                                     general partner

                                     By: Acadia Realty Limited Partnership, a
                                         Delaware limited partnership, its sole
                                         member

                                         By: Acadia Realty Trust, a
                                             Maryland real estate
                                             investment trust, its
                                             general partner


                                             By:
                                                 ----------------------
                                                 Name:
                                                 Title:



</TEXT>
</DOCUMENT>
