REGISTRATION RIGHTS AND LOCK-UP AGREEMENT

Exhibit 4.1

REGISTRATION RIGHTS AND LOCK-UP AGREEMENT

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THIS REGISTRATION RIGHTS AND LOCK-UP AGREEMENT (this

"Agreement"), is made and entered into as of January 27, 2004, by and among

Acadia Realty Trust, a Maryland real estate investment trust (the "REIT"),

Acadia Realty Limited Partnership, a Delaware limited partnership (the

"Partnership"), and the undersigned Klaff Realty, LP, a Delaware limited

Partnership ("Klaff"), which, at the Closing (the "Closing Date") of the

transactions contemplated by the Agreement of Contribution by and among Klaff

and Klaff Realty, Limited, the REIT, and the Partnership (the "Contribution

Agreement"), are receiving preferred units of limited partnership interests in

the Partnership ("Preferred Units") which are convertible into common units of

limited partnership interest in the Partnership ("OP Units"), which in turn, are

exchangeable for Conversion Shares (as defined below).

NOW, THEREFORE, in consideration of the premises and the

mutual covenants contained herein, and intending to be legally bound hereby, the

REIT, the Partnership and Klaff hereby agree as follows:

1. Certain Definitions. As used in this Agreement, the

following terms shall have the following respective meanings:

(a) "Commission" means the Securities and Exchange

Commission, or any other federal agency at the time administering the Securities

Act.

(b) "Conversion Shares" means the Shares issuable

upon exchange of the OP Units from time to time.

(c) "Exchange Act" means the Securities Exchange Act

of 1934, as amended, or any successor federal statute, and the rules and

regulations of the Commission issued under such Exchange Act, as they each may,

from time to time, be in effect.

(d) "Holder(s)" means a holder of Registrable Shares

entitled to the rights arising hereunder.

(e) "Participating Holder" means a Holder whose

Registrable Shares are included in a Registration Statement.

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(f) "Registration Expenses" means the expenses

described in Section 4 hereof.

(g) "Registration Statement" means a registration

statement filed by the REIT with the Commission for a public offering and sale

of equity securities of the REIT (other than a registration statement on Form

S-8 or Form S-4, or their successors, or any registration statement covering

only securities proposed to be issued in exchange for securities or assets of

another corporation).

(h) "Registrable Shares" means (i) the Conversion

Shares, (ii) any other Shares issued in respect of Conversion Shares, and (iii)

any other Shares issued with respect to the Shares issued in clauses (i) and

(ii) (because of share splits, share dividends, reclassifications,

recapitalizations, or similar events); provided, however, that Shares which are

Registrable Shares shall cease to be Registrable Shares (x) upon any sale

pursuant to a Registration Statement, or any other sale or transfer of the

Registrable Shares in any manner to any person or entity other than a Permitted

Transferee (as defined) or as otherwise expressly provided herein, or (y) in the

event that Registrable Shares may be freely sold and/or transferred pursuant to

Rule 144(k) under the Securities Act.

(i) "Securities Act" means the Securities Act of

1933, as amended, or any successor federal statute, and the rules and

regulations of the Commission issued under such Securities Act, as they each

may, from time to time, be in effect.

(j) "Shares" means Common Shares of Beneficial

Interest of the REIT, par value $.001 per share.

2. Certain Shelf Registration. Within ninety (90) days from

the date of this Agreement, the REIT shall, at its expense, file a shelf

Registration Statement pursuant to Rule 415 under the Securities Act to register

the Registrable Shares for resale, including for issuance upon conversion or

exchange of OP Units. The REIT shall, at its expense, use commercially

reasonable efforts to maintain the effectiveness of such shelf Registration

Statement until the earlier of (i) such time as when all of the Registrable

Shares have been disposed of or (ii) three years after the conversion or

exchange into Shares of all of the OP Units issued upon conversion of the

Preferred Units issued under the Contribution Agreement.

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3. Registration Procedures. If and whenever the REIT is

required by the provisions of this Agreement to effect the registration of any

of the Registrable Shares under the Securities Act, the REIT shall, at its

expense:

(a) prepare and file with the Commission a

Registration Statement with respect to such Registrable Shares and use best

efforts to cause that Registration Statement to become effective;

(b) use commercially reasonable efforts to cause the

Registration Statement to remain effective;

(c) subject to the provision of Section 2, promptly

prepare and file with the Commission any amendments and supplements to the

Registration Statement and the prospectus included in the Registration Statement

as may be necessary to keep the Registration Statement effective for the period

of time required by the Commission;

(d) promptly furnish to each Participating Holder

such reasonable numbers of copies of the prospectus, including a preliminary

prospectus, in conformity with the requirements of the Securities Act, and such

other documents as the Participating Holders may reasonably request in order to

facilitate the public sale or other disposition of the Registrable Shares owned

by such Participating Holders and included in the Registration Statement; and

(e) promptly use commercially reasonable efforts to

register or qualify the Registrable Shares covered by the Registration Statement

under the securities or Blue Sky laws of states within the United States as the

Participating Holders shall reasonably request; provided, however, that the REIT

shall not be required in connection with this subsection 3(e) to: (i) qualify as

a foreign corporation in any jurisdiction where, but for the requirements of

this subsection 3(e), it would not be obligated to be so qualified; (ii) execute

a general consent to service of process in any jurisdiction; (iii) subject

itself to taxation in any such jurisdiction; or (iv) register in any state

requiring, as a condition to registration, escrow or surrender of any REIT

securities held by any security holder other than the Participating Holders.

If the REIT has delivered a preliminary or final prospectus to

a Participating Holder and, after having done so,

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the prospectus is amended to comply with the requirements of the Securities Act,

the REIT shall promptly notify such Participating Holder and, if requested, such

Participating Holder shall immediately cease making offers of Registrable Shares

and return all prospectuses to the REIT. The REIT shall promptly provide

Participating Holders with revised prospectuses and, following receipt of the

revised prospectuses, Participating Holders shall be free to resume making

offers of the Registrable Shares.

Notwithstanding any other provisions of this Agreement to the

contrary, upon receipt by a Participating Holder of a written notice signed by

the Chief Executive Officer, General Counsel or Chief Financial Officer of the

REIT, to the effect set forth below, the REIT shall not be obligated during a

reasonable period of time thereafter to effect any registrations pursuant to

this Agreement, and each such Participating Holder agrees that it will

immediately suspend sales of Shares under any effective Registration Statement

for a reasonable period of time, in either case not to exceed 90 days, at any

time during which, in the REIT's reasonable judgment, (i) there is a development

involving the REIT or any of its affiliates which is material but which has not

yet been publicly disclosed or (ii) sales pursuant to the Registration Statement

would materially and adversely affect an underwritten public offering for the

account of the REIT or any other material financing project or where a proposed

or pending material merger or other material acquisition or material business

combination or material disposition of the REIT's assets, to which the REIT or

any of its affiliates is, or is expected to be, a party. In the event a

registration is postponed or sales by a Participating Holder pursuant to an

effective Registration Statement are suspended in accordance with this

paragraph, there shall be added to the period during which the REIT is obligated

to keep a Registration Statement effective the number of days for which the

Registration Statement was postponed or sales were suspended.

4. Expenses of Registration. The REIT will pay all

Registration Expenses of all registrations under this Agreement. For purposes of

this Agreement, the term "Registration Expenses" shall mean all expenses

incurred by the REIT in complying with this Agreement, including without

limitation, all registration and filing fees, exchange listing fees, printing

expenses, the fees and disbursements of counsel for the REIT and the reasonable

fees and disbursements of one counsel selected by the Participating Holders, the

fees and disbursements of the REIT's accountants, state Blue Sky fees and

expenses, and the expense

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of any special audits incident to or required by any such registration, but

excluding underwriting discounts and selling commissions.

5. Indemnification.

(a) Indemnification of Participating Holders. In the

event of any registration of any of the Registrable Shares under the Securities

Act pursuant to this Agreement, the REIT will indemnify and hold harmless each

Participating Holder, each of its directors and officers and each other person,

if any, who controls such Participating Holder within the meaning of the

Securities Act or the Exchange Act, against any losses, claims, damages or

liabilities to which such Participating Holder or controlling person may become

subject under the Securities Act, the Exchange Act, Blue Sky laws or otherwise,

insofar as such losses, claims, damages or liabilities (or actions in respect

thereof) arise out of or are based upon any untrue statement or alleged untrue

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