UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 3, 2021
(Exact name of registrant as specified in its charter)
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Registrant’s telephone number, including area code: (757 ) 366-4000
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition.
On August 3, 2021, Armada Hoffler Properties, Inc. (the “Company”) issued a press release announcing its financial position as of June 30, 2021, results of operations for the three months ended June 30, 2021, and other related information. Also on August 3, 2021, the Company made available on its website at www.ArmadaHoffler.com certain supplemental information concerning the Company’s financial results and operations for the three months ended June 30, 2021. Copies of such press release and supplemental information are furnished as Exhibits 99.1 and 99.2, respectively, to this Current Report on Form 8-K and are incorporated herein by reference.
In accordance with General Instructions B.2 and B.6 of Form 8-K, the information included in this Current Report on Form 8-K, including Exhibits 99.1 and 99.2 hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any filing made by the Company under the Exchange Act or Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.
Item 7.01. Regulation FD Disclosure.
The disclosure contained in Item 2.02 is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit No. | Description | |||||||
| 104 | Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document. | |||||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| ARMADA HOFFLER PROPERTIES, INC. | ||||||||
| Date: August 3, 2021 | By: | /s/ Michael P. O’Hara | ||||||
| Michael P. O’Hara | ||||||||
| Chief Financial Officer, Treasurer and Secretary | ||||||||
Exhibit 99.1
 | PRESS RELEASE | |||||||
ARMADA HOFFLER PROPERTIES REPORTS SECOND QUARTER 2021 RESULTS
Net Income of $0.07 Per Diluted Share
Normalized FFO of $0.29 Per Diluted Share
Raised 2021 Full-Year Normalized FFO Guidance to $1.02 to $1.06 Per Diluted Share
VIRGINIA BEACH, VA, August 3, 2021 – Armada Hoffler Properties, Inc. (NYSE: AHH) today announced its results for the quarter ended June 30, 2021 and provided an update on current events.
Second Quarter and Recent Highlights:
•Net income attributable to common stockholders and OP Unit holders of $5.6 million, or $0.07 per diluted share, compared to $11.2 million, or $0.14 per diluted share, for the three months ended June 30, 2020.
•Funds from operations attributable to common stockholders and OP Unit holders ("FFO") of $22.9 million, or $0.28 per diluted share, compared to $22.0 million, or $0.28 per diluted share, for the three months ended June 30, 2020. See "Non-GAAP Financial Measures."
•Normalized funds from operations attributable to common stockholders and OP Unit holders ("Normalized FFO") of $23.3 million, or $0.29 per diluted share, compared to $22.6 million, or $0.29 per diluted share, for the three months ended June 30, 2020. Second quarter Normalized FFO included $0.03 per diluted share attributable to the early repayment of the Solis Apartments at Interlock mezzanine loan that would have been recognized during the second half of 2021, which was included in prior guidance.
•Raised 2021 full-year Normalized FFO guidance to $1.02 to $1.06 per diluted share from the Company's previous guidance range of $0.98 to $1.02 per diluted share due to higher forecast net operating income ("NOI") from the operating portfolio and acquisitions.
•Stabilized operating property portfolio occupancy increased to 94.1% as of June 30, 2021. Office occupancy was 96.5%, retail occupancy was 94.7%, and multifamily occupancy was 92.2%. Within the multifamily segment, conventional apartment occupancy was 96.6% and student housing occupancy was 83.5%.
•Positive releasing spreads on retail lease renewals during the second quarter of 8.0% on a GAAP basis and 6.9% on a cash basis. There were no office renewals during the second quarter.
•Same Store NOI increased 0.7% on a GAAP basis and 13.5% on a cash basis compared to the quarter ended June 30, 2020. Highlights include:
◦Multifamily Same Store NOI increased 6.6% on a GAAP basis and 1.7% on a cash basis compared to the quarter ended June 30, 2020; excluding student housing, multifamily Same Store NOI increased 14.9% on a GAAP basis and 12.3% on a cash basis.
◦Retail Same Store NOI increased 24.6% on a cash basis compared to the quarter ended June 30, 2020 due to tenants returning to their pre-COVID rent schedules.
•Leased 80,000 square feet of commercial office and retail space since the Company’s previous quarterly update, including leases with Transamerica and RBC at Wills Wharf in Harbor Point Baltimore.
•Increased second quarter cash dividend of $0.16 per common share, resulting in a 45.5% cumulative increase year-to-date.
•Announced the pending off-market acquisition of Greenbrier Square, a Kroger-anchored retail center in Chesapeake, Virginia. In July, completed the off-market acquisition of Overlook Village, a 150,000 square foot retail center in Asheville, North Carolina anchored by T.J. Maxx | Homegoods and Ross.
“Because of outstanding actual and forecasted growth in property NOI, we are pleased to raise earnings guidance for the year,” said Lou Haddad, President & CEO. “Leasing activity across all sectors of our core portfolio is at the highest velocity we’ve seen in years, the development pipeline is well-stocked and proceeding rapidly, an ample supply of off-market acquisition opportunities have been uncovered, third-party construction engagements are shaping up to become high volume contracts later this year, and most importantly, we are in a strong liquidity position with access to additional capital sources from the potential disposition of non-core assets. In short, the building blocks for superior, if not game-changing, performance are in place.”
Financial Results
Net income attributable to common stockholders and OP Unit holders for the second quarter decreased to $5.6 million compared to $11.2 million for the second quarter of 2020. The period-over-period change was primarily due to a decrease in gains on real estate dispositions, decrease in general contracting gross profit, and decreases in property net operating income resulting from sales of operating shopping centers. Additionally, we paid more in preferred dividends due to the issuance of additional preferred stock during 2020. These decreases were partially offset by net operating income resulting from property acquisitions and completed development projects, changes in the fair value of interest rate derivatives, and an increase in interest income on our mezzanine loan portfolio, including a $2.4 million prepayment premium recognized for the Solis Apartments at Interlock mezzanine loan.
FFO attributable to common stockholders and OP Unit holders for the second quarter increased to $22.9 million compared to $22.0 million for the second quarter of 2020. Normalized FFO attributable to common stockholders and OP Unit holders for the second quarter increased to $23.3 million compared to $22.6 million for the second quarter of 2020. The period-over-period changes in FFO and Normalized FFO were due to net operating income resulting from property acquisitions and completed development projects and an increase in interest income on our mezzanine loan portfolio, including a $2.4 million prepayment premium recognized for the Solis Apartments at Interlock mezzanine loan. These increases were partially offset by a decrease in general contracting gross profit and decreases in property net operating income resulting from sales of operating shopping centers. Additionally, we paid more in preferred dividends due to the issuance of additional preferred stock during 2020.
Operating Performance
At the end of the second quarter, the Company’s office, retail and multifamily stabilized operating property portfolios were 96.5%, 94.7% and 92.2% (conventional multifamily was 96.6% and student housing was 83.5%) occupied, respectively.
Total construction contract backlog was $70.2 million at the end of the second quarter.
Balance Sheet and Financing Activity
As of June 30, 2021, the Company had $963.9 million of total debt outstanding, including $205.0 million outstanding under its senior unsecured term loan facility. The Company had no balance outstanding under its revolving credit facility as of June 30, 2021. Total debt outstanding excludes GAAP adjustments. Approximately 59% of the Company’s debt had fixed interest rates or was subject to interest rate swaps as of June 30, 2021. After giving effect to LIBOR interest rate caps with strike prices at or below 50 basis points as of June 30, 2021, 99% of the Company’s debt was either fixed or hedged.
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The Company refinanced the loan secured by Southgate Square during the second quarter. The Company has no loans scheduled to mature during the remainder of 2021.
The Company is currently in compliance with all debt covenants.
Outlook
The Company issued updated 2021 full-year Normalized FFO guidance in the range to $1.02 to $1.06 per diluted share from $0.98 to $1.02. The following table updates the Company's assumptions underpinning this forecast. The Company's executive management will provide further details regarding its 2021 earnings guidance during today's webcast and conference call.
Full-year 2021 Guidance [1] | Expected Ranges | |||||||||||||
| Total NOI | $122.0M | $123.0M | ||||||||||||
| Construction Segment Gross Profit | $3.7M | $4.2M | ||||||||||||
| G&A Expenses | $14.5M | $14.8M | ||||||||||||
| Mezzanine Interest Income | $17.8M | $18.2M | ||||||||||||
Interest Expense[2] | $33.2M | $33.8M | ||||||||||||
Normalized FFO per diluted share [3] | $1.02 | $1.06 | ||||||||||||
[1] Includes the following assumptions:
•Acquisition of two retail centers, Overlook Village and Greenbrier Square, in the third quarter
•Interest Expense based on Forward LIBOR Curve, which forecasts rates ending the year at 0.19%
•Opportunistic sale of common stock through the ATM program, resulting in a full year weighted average share count of 82M
[2] Includes interest expense on finance leases
[3] Normalized FFO excludes certain items, including debt extinguishment losses, acquisition, development and other pursuit costs, mark-to-market adjustments for interest rate derivatives, provision for unrealized credit losses, amortization of right-of-use assets attributable to finance leases, severance related costs, and other non-comparable items. See "Non-GAAP Financial Measures." The Company does not provide a reconciliation for its guidance range of Normalized FFO per diluted share to net income per diluted share, the most directly comparable forward-looking GAAP financial measure, because it is unable to provide a meaningful or accurate estimate of reconciling items and the information is not available without unreasonable effort as a result of the inherent difficulty of forecasting the timing and/or amounts of various items that would impact net income per diluted share. For the same reasons, the Company is unable to address the probable significance of the unavailable information and believes that providing a reconciliation for its guidance range of Normalized FFO per diluted share would imply a degree of precision for its forward-looking net income per diluted share that could be misleading to investors.
Supplemental Financial Information
Further details regarding operating results, properties and leasing statistics can be found in the Company’s supplemental financial package available at www.ArmadaHoffler.com.
Webcast and Conference Call
The Company will host a webcast and conference call on Tuesday, August 3, 2021 at 8:30 a.m. Eastern Time to review financial results and discuss recent events. The live webcast will be available through the Investors page of the Company’s website, www.ArmadaHoffler.com. To participate in the call, please dial 877-407-3982 (domestic) or 201-493-6780 (international). A replay of the conference call will be available through Friday, September 3, 2021 by dialing 844-512-2921 (domestic) or 412-317-6671 (international) and entering the passcode 13720484.
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About Armada Hoffler Properties, Inc.
Armada Hoffler Properties (NYSE:AHH) is a vertically-integrated, self-managed real estate investment trust ("REIT") with four decades of experience developing, building, acquiring and managing high-quality office, retail and multifamily properties located primarily in the Mid-Atlantic and Southeastern United States. The Company also provides general construction and development services to third-party clients, in addition to developing and building properties to be placed in their stabilized portfolio. Founded in 1979 by Daniel A. Hoffler, Armada Hoffler has elected to be taxed as a REIT for U.S. federal income tax purposes. For more information visit ArmadaHoffler.com.
Forward-Looking Statements
Certain matters within this press release are discussed using forward-looking language as specified in the Private Securities Litigation Reform Act of 1995, and, as such, may involve known and unknown risks, uncertainties and other factors that may cause the actual results or performance to differ from those projected in the forward-looking statement. These forward-looking statements may include comments relating to the current and future performance of the Company’s operating property portfolio, the Company’s development pipeline, the Company’s construction and development business, including backlog and timing of deliveries and estimated costs, financing activities, and the Company’s financial outlook and expectations. For a description of factors that may cause the Company’s actual results or performance to differ from its forward-looking statements, please review the information under the heading “Risk Factors” included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, and the other documents filed by the Company with the Securities and Exchange Commission (the “SEC”) from time to time. The Company’s actual future results and trends may differ materially from expectations depending on a variety of factors discussed in the Company’s filings with the the SEC. These factors include, without limitation: (a) the impact of the coronavirus (COVID-19) pandemic on macroeconomic conditions and economic conditions in the markets in which the Company operates, including, among others: (i) disruptions in, or a lack of access to, the capital markets or disruptions in the Company’s ability to borrow amounts subject to existing construction loan commitments; (ii) adverse impacts to the Company’s tenants’ and other third parties’ businesses and financial condition that adversely affect the ability and willingness of the Company’s tenants and other third parties to satisfy their rent and other obligations to the Company, including deferred rent; (iii) the ability and willingness of the Company’s tenants to renew their leases with the Company upon expiration of the leases or to re-lease the Company’s properties on the same or better terms in the event of nonrenewal or early termination of existing leases; and (iv) federal, state and local government initiatives to mitigate the impact of the COVID-19 pandemic, including additional restrictions on business activities, shelter-in place orders and other restrictions, and the timing and amount of economic stimulus or other initiatives; (b) the Company’s ability to continue construction on development and construction projects, in each case on the timeframes and on terms currently anticipated; (c) the Company’s ability to accurately assess and predict the impact of the COVID-19 pandemic on its results of operations, financial condition, dividend policy, acquisition and disposition activities and growth opportunities; and (d) the Company’s ability to maintain compliance with the covenants under its existing debt agreements or to obtain modifications to such covenants from the applicable lenders. The Company expressly disclaims any responsibility to update forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
Non-GAAP Financial Measures
The Company calculates FFO in accordance with the standards established by the National Association of Real Estate Investment Trusts ("Nareit"). Nareit defines FFO as net income (loss) (calculated in accordance with GAAP), excluding depreciation and amortization related to real estate, gains or losses from the sale of certain real estate assets, gains and losses from change in control, and impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity.
FFO is a supplemental non-GAAP financial measure. The Company uses FFO as a supplemental performance measure because it believes that FFO is beneficial to investors as a starting point in measuring the Company’s operational performance. Specifically, in excluding real estate related depreciation and amortization and gains and losses from property dispositions, which do not relate to or are not indicative of operating performance, FFO provides a performance measure that, when compared period-over-period, captures trends in occupancy rates, rental
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rates and operating costs. We also believe that, as a widely recognized measure of the performance of REITs, FFO will be used by investors as a basis to compare the Company’s operating performance with that of other REITs.
However, because FFO excludes depreciation and amortization and captures neither the changes in the value of the Company’s properties that result from use or market conditions nor the level of capital expenditures and leasing commissions necessary to maintain the operating performance of the Company’s properties, all of which have real economic effects and could materially impact the Company’s results from operations, the utility of FFO as a measure of the Company’s performance is limited. In addition, other equity REITs may not calculate FFO in accordance with the Nareit definition as the Company does, and, accordingly, the Company’s FFO may not be comparable to such other REITs’ FFO. Accordingly, FFO should be considered only as a supplement to net income as a measure of the Company’s performance.
Management also believes that the computation of FFO in accordance with Nareit’s definition includes certain items that are not indicative of the results provided by the Company’s operating property portfolio and affect the comparability of the Company’s period-over-period performance. Accordingly, management believes that Normalized FFO is a more useful performance measure that excludes certain items, including but not limited to, acquisition, development and other pursuit costs, gains or losses from the early extinguishment of debt, impairment of intangible assets and liabilities, mark-to-market adjustments for interest rate derivatives, provision for unrealized credit losses, amortization of right-of-use assets attributable to finance leases, severance related costs, and other non-comparable items.
For reference, as an aid in understanding the Company’s computation of FFO and Normalized FFO, a reconciliation of net income calculated in accordance with GAAP to FFO and Normalized FFO has been included in the final page of this release.
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ARMADA HOFFLER PROPERTIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
| June 30, 2021 | December 31, 2020 | |||||||||||||
| (Unaudited) | ||||||||||||||
| ASSETS | ||||||||||||||
| Real estate investments: | ||||||||||||||
| Income producing property | $ | 1,756,836 | $ | 1,680,943 | ||||||||||
| Held for development | 11,294 | 13,607 | ||||||||||||
| Construction in progress | 37,167 | 63,367 | ||||||||||||
| 1,805,297 | 1,757,917 | |||||||||||||
| Accumulated depreciation | (278,010) | (253,965) | ||||||||||||
| Net real estate investments | 1,527,287 | 1,503,952 | ||||||||||||
| Real estate investments held for sale | — | 1,165 | ||||||||||||
| Cash and cash equivalents | 43,493 | 40,998 | ||||||||||||
| Restricted cash | 9,749 | 9,432 | ||||||||||||
| Accounts receivable, net | 30,227 | 28,259 | ||||||||||||
| Notes receivable, net | 112,446 | 135,432 | ||||||||||||
| Construction receivables, including retentions, net | 13,823 | 38,735 | ||||||||||||
| Construction contract costs and estimated earnings in excess of billings | 85 | 138 | ||||||||||||
| Equity method investment | 6,999 | 1,078 | ||||||||||||
| Operating lease right-of-use assets | 32,640 | 32,760 | ||||||||||||
| Finance lease right-of-use assets | 47,544 | 23,544 | ||||||||||||
| Acquired lease intangible assets | 55,807 | 58,154 | ||||||||||||
| Other assets | 40,358 | 43,324 | ||||||||||||
| Total Assets | $ | 1,920,458 | $ | 1,916,971 | ||||||||||
| LIABILITIES AND EQUITY | ||||||||||||||
| Indebtedness, net | $ | 964,396 | $ | 963,845 | ||||||||||
| Accounts payable and accrued liabilities | 20,395 | 23,900 | ||||||||||||
| Construction payables, including retentions | 18,470 | 49,821 | ||||||||||||
| Billings in excess of construction contract costs and estimated earnings | 4,137 | 6,088 | ||||||||||||
| Operating lease liabilities | 41,719 | 41,659 | ||||||||||||
| Finance lease liabilities | 45,997 | 17,954 | ||||||||||||
| Other liabilities | 57,725 | 56,902 | ||||||||||||
| Total Liabilities | 1,152,839 | 1,160,169 | ||||||||||||
| Total Equity | 767,619 | 756,802 | ||||||||||||
| Total Liabilities and Equity | $ | 1,920,458 | $ | 1,916,971 | ||||||||||
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ARMADA HOFFLER PROPERTIES, INC.
CONDENSED CONSOLIDATED INCOME STATEMENTS
(in thousands, except per share amounts)
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||
| Revenues | ||||||||||||||||||||||||||
| Rental revenues | $ | 47,378 | $ | 39,915 | $ | 93,119 | $ | 82,204 | ||||||||||||||||||
| General contracting and real estate services revenues | 18,408 | 57,398 | 53,971 | 104,666 | ||||||||||||||||||||||
| Total revenues | 65,786 | 97,313 | 147,090 | 186,870 | ||||||||||||||||||||||
| Expenses | ||||||||||||||||||||||||||
| Rental expenses | 11,292 | 8,309 | 22,124 | 17,684 | ||||||||||||||||||||||
| Real estate taxes | 5,465 | 4,233 | 10,771 | 8,566 | ||||||||||||||||||||||
| General contracting and real estate services expenses | 18,131 | 55,342 | 52,406 | 100,892 | ||||||||||||||||||||||
| Depreciation and amortization | 17,285 | 13,777 | 35,351 | 28,056 | ||||||||||||||||||||||
| Amortization of right-of-use assets - finance leases | 278 | 146 | 467 | 293 | ||||||||||||||||||||||
| General and administrative expenses | 3,487 | 2,988 | 7,508 | 6,781 | ||||||||||||||||||||||
| Acquisition, development and other pursuit costs | 32 | 502 | 103 | 529 | ||||||||||||||||||||||
| Impairment charges | 83 | — | 3,122 | 158 | ||||||||||||||||||||||
| Total expenses | 56,053 | 85,297 | 131,852 | 162,959 | ||||||||||||||||||||||
| Gain on real estate dispositions | — | 2,776 | 3,717 | 2,776 | ||||||||||||||||||||||
| Operating income | 9,733 | 14,792 | 18,955 | 26,687 | ||||||||||||||||||||||
| Interest income | 6,746 | 4,412 | 10,862 | 11,638 | ||||||||||||||||||||||
| Interest expense | (8,418) | (7,227) | (16,393) | (15,415) | ||||||||||||||||||||||
| Change in fair value of derivatives and other | 314 | (6) | 707 | (1,742) | ||||||||||||||||||||||
| Unrealized credit loss release (provision) | (388) | 117 | (333) | (260) | ||||||||||||||||||||||
| Other income (expense), net | 7 | 286 | 186 | 344 | ||||||||||||||||||||||
| Income before taxes | 7,994 | 12,374 | 13,984 | 21,252 | ||||||||||||||||||||||
| Income tax benefit (provision) | 461 | (65) | 480 | 192 | ||||||||||||||||||||||
| Net income | 8,455 | 12,309 | 14,464 | 21,444 | ||||||||||||||||||||||
| Net loss attributable to noncontrolling interests in investment entities | — | 44 | — | 136 | ||||||||||||||||||||||
| Preferred stock dividends | (2,887) | (1,175) | (5,774) | (2,242) | ||||||||||||||||||||||
| Net income attributable to common stockholders and OP Unitholders | $ | 5,568 | $ | 11,178 | $ | 8,690 | $ | 19,338 | ||||||||||||||||||
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ARMADA HOFFLER PROPERTIES, INC.
RECONCILIATION OF NET INCOME TO FFO & NORMALIZED FFO
(in thousands, except per share amounts)
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||
| Net income attributable to common stockholders and OP Unitholders | $ | 5,568 | $ | 11,178 | $ | 8,690 | $ | 19,338 | ||||||||||||||||||
Depreciation and amortization(1) | 17,285 | 13,644 | 35,351 | 27,736 | ||||||||||||||||||||||
Gain on operating real estate dispositions(2) | — | (2,776) | (3,464) | (2,776) | ||||||||||||||||||||||
| Impairment of real estate assets | — | — | 3,039 | — | ||||||||||||||||||||||
| FFO attributable to common stockholders and OP Unitholders | $ | 22,853 | $ | 22,046 | $ | 43,616 | $ | 44,298 | ||||||||||||||||||
| Acquisition, development and other pursuit costs | 32 | 502 | 103 | 529 | ||||||||||||||||||||||
| Impairment of intangible assets and liabilities | 83 | — | 83 | 158 | ||||||||||||||||||||||
| Unrealized credit loss provision (release) | 388 | (117) | 333 | 260 | ||||||||||||||||||||||
| Amortization of right-of-use assets - finance leases | 278 | 146 | 467 | 293 | ||||||||||||||||||||||
| Change in fair value of derivatives and other | (314) | 6 | (707) | 1,742 | ||||||||||||||||||||||
| Normalized FFO available to common stockholders and OP Unitholders | $ | 23,320 | $ | 22,583 | $ | 43,895 | $ | 47,280 | ||||||||||||||||||
| Net income attributable to common stockholders and OP Unitholders per diluted share and unit | $ | 0.07 | $ | 0.14 | $ | 0.11 | $ | 0.25 | ||||||||||||||||||
| FFO attributable to common stockholders and OP Unitholders per diluted share and unit | $ | 0.28 | $ | 0.28 | $ | 0.54 | $ | 0.57 | ||||||||||||||||||
| Normalized FFO attributable to common stockholders and OP Unitholders per diluted share and unit | $ | 0.29 | $ | 0.29 | $ | 0.54 | $ | 0.61 | ||||||||||||||||||
| Weighted average common shares and units - diluted | 81,262 | 77,941 | 80,771 | 77,806 | ||||||||||||||||||||||
________________________________________
| (1) The adjustment for depreciation and amortization for the three and six months ended June 30, 2020 excludes $0.1 million and $0.3 million, respectively, of depreciation attributable to the Company's joint venture partners. | ||
| (2) The adjustment for gain on operating real estate dispositions for the six months ended June 30, 2021 excludes the gain on sale of easement rights on a non-operating parcel. | ||
Contact:
Michael P. O’Hara
Armada Hoffler Properties, Inc.
Chief Financial Officer, Treasurer, and Secretary
Email: MOHara@ArmadaHoffler.com
Phone: (757) 366-6684
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1 2Q21 SUPPLEMENTAL FINANCIAL PACKAGE GREENSIDE APARTMENTS
2 T A B L E O F C O N T E N T S Forward-Looking Statements Corporate Profile Highlights 2021 Outlook & Assumptions Summary Information Net Asset Value Component Data Summary Balance Sheet Summary Income Statement FFO, Normalized FFO & Adjusted FFO Outstanding Debt Debt Information Core Debt to Core EBITDA Capitalization & Financial Ratios Property Portfolio Development Pipeline Mezzanine Investments Acquisitions & Dispositions Construction Business Summary Same Store NOI by Segment Top 10 Tenants by Annualized Base Rent Lease Summary Office Lease Expirations Retail Lease Expirations COVID-19 Deferrals Appendix – Definitions & Reconciliations Same Store vs Non-Same Store Reconciliation to Core EBITDA Reconciliation to Property Portfolio NOI Reconciliation to GAAP Net Income 03 04 05 06 07 08 09 10 11 12 13 14 15 16 18 20 21 22 23 24 25 26 27 28 29 33 34 35 36
3 This Supplemental Financial Package should be read in conjunction with the unaudited condensed consolidated financial statements appearing in our press release dated August 3, 2021, which has been furnished as Exhibit 99.1 to our Form 8-K filed on August 3, 2021. The Company makes statements in this Supplemental Financial Package that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (set forth in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). These forward-looking statements may include comments relating to the current and future performance of the Company’s operating property portfolio, the Company’s development pipeline, the Company’s construction and development business, including backlog and timing of deliveries and estimated costs, financing activities, and the Company’s financial outlook and expectations. For a description of factors that may cause the Company’s actual results or performance to differ from its forward-looking statements, please review the information under the heading “Risk Factors” included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 and the other documents filed by the Company with the Securities and Exchange Commission (the “SEC”) from time to time. The Company’s actual future results and trends may differ materially from expectations depending on a variety of factors discussed in the Company’s filings with the SEC. These factors include, without limitation: (a) the impact of the coronavirus (COVID-19) pandemic on macroeconomic conditions and economic conditions in the markets in which the Company operates, including, among others: (i) disruptions in, or a lack of access to, the capital markets or disruptions in the Company’s ability to borrow amounts subject to existing construction loan commitments; (ii) adverse impacts to the Company’s tenants’ and other third parties’ businesses and financial conditions that adversely affect the ability and willingness of the Company’s tenants and other third parties to satisfy their rent and other obligations to the Company, including deferred rent; (iii) the ability and willingness of the Company’s tenants to renew their leases with the Company upon expiration of the leases or to re-lease the Company’s properties on the same or better terms in the event of nonrenewal or early termination of existing leases; and (iv) federal, state and local government initiatives to mitigate the impact of the COVID-19 pandemic, including additional restrictions on business activities, shelter-in place orders and other restrictions, and the timing and amount of economic stimulus or other initiatives; (b) the Company’s ability to continue construction on development and construction projects, in each case on the timeframes and on terms currently anticipated; (c) the Company’s ability to accurately assess and predict the impact of the COVID-19 pandemic on its results of operations, financial condition, dividend policy, acquisition and disposition activities and growth opportunities; and (d) the Company’s ability to maintain compliance with the covenants under its existing debt agreements or to obtain modifications to such covenants from the applicable lenders. The Company expressly disclaims any responsibility to update forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. FORWARD-LOOKING STATEMENTS
4 BOARD OF DIRECTORS Daniel A. Hoffler, Executive Chairman of the Board Louis S. Haddad, Vice Chairman of the Board James C. Cherry, Lead Independent Director George F. Allen, Independent Director James A. Carroll, Independent Director Eva S. Hardy, Independent Director A. Russell Kirk, Director Dorothy S. McAuliffe, Independent Director John W. Snow, Independent Director CORPORATE OFFICERS Louis S. Haddad, President and Chief Executive Officer Michael P. O’Hara, Chief Financial Officer Shawn J. Tibbetts, Chief Operating Officer Eric E. Apperson, President of Construction Shelly R. Hampton, President of Asset Management Robert W. Baird & Co. David Rodgers (216) 737-7341 drodgers@rwbaird.com Janney, Montgomery, & Scott LLC Robert Stevenson (646) 840-3217 robertstevenson@janney.com Raymond James & Associates Bill Crow (727) 567-2594 bill.crow@raymondjames.com Bank of America Merrill Lynch James Feldman/Elvis Rodriguez (646) 855-5808/(646) 855-1589 james.feldman@bofa.com/rodrigueze@bofa.com ANALYST COVERAGE Armada Hoffler Properties, Inc. (NYSE: AHH) is a vertically-integrated, self-managed real estate investment trust with four decades of experience developing, building, acquiring and managing high-quality office, retail and multifamily properties located primarily in the Mid-Atlantic and Southeastern United States. The Company also provides general construction and development services to third-party clients, in addition to developing and building properties to be placed in their stabilized portfolio. Founded in 1979 by Daniel A. Hoffler, Armada Hoffler has elected to be taxed as a REIT for U.S. federal income tax purposes. For more information visit ArmadaHoffler.com. CORPORATE PROFILE Jefferies Peter Abramowitz (212) 336-7241 pabramowitz@jefferies.com
5 HIGHLIGHTS • Net income attributable to common stockholders and OP Unit holders of $5.6 million, or $0.07 per diluted share, compared to $11.2 million, or $0.14 per diluted share, for the three months ended June 30, 2020. • Funds from operations attributable to common stockholders and OP Unit holders ("FFO") of $22.9 million, or $0.28 per diluted share, compared to $22.0 million, or $0.28 per diluted share, for the three months ended June 30, 2020. See "Non-GAAP Financial Measures." • Normalized funds from operations attributable to common stockholders and OP Unit holders ("Normalized FFO") of $23.3 million, or $0.29 per diluted share, compared to $22.6 million, or $0.29 per diluted share, for the three months ended June 30, 2020. Second quarter Normalized FFO included $0.03 per diluted share attributable to the early repayment of the Solis Apartments at Interlock mezzanine loan that would have been recognized during the second half of 2021, which was included in prior guidance. • Raised 2021 full-year Normalized FFO guidance to $1.02 to $1.06 per diluted share from the Company's previous guidance range of $0.98 to $1.02 per diluted share because of higher forecast net operating income ("NOI") from the operating portfolio and acquisitions. • Stabilized operating property portfolio occupancy increased to 94.1% as of June 30, 2021. Office occupancy was 96.5%, retail occupancy was 94.7%, and multifamily occupancy was 92.2%. Within the multifamily segment, conventional apartment occupancy was 96.6% and student housing occupancy was 83.5%. • Positive releasing spreads on retail lease renewals during the second quarter of 8.0% on a GAAP basis and 6.9% on a cash basis. There were no office renewals during the second quarter. • Same Store NOI increased 0.7% on a GAAP basis and 13.5% on a cash basis compared to the quarter ended June 30, 2020. Highlights include: • Multifamily Same Store NOI increased 6.6% on a GAAP basis and 1.7% on a cash basis compared to the quarter ended June 30, 2020; excluding student housing, multifamily Same Store NOI increased 14.9% on a GAAP basis and 12.3% on a cash basis. • Retail Same Store NOI increased 24.6% on a cash basis compared to the quarter ended June 30, 2020 due to tenants returning to their pre-COVID rent schedules. • Leased 80,000 square feet of commercial office and retail space since the Company’s previous quarterly update, including leases with Transamerica and RBC at Wills Wharf in Harbor Point Baltimore. • Increased second quarter cash dividend of $0.16 per common share, resulting in a 45.5% cumulative increase year-to-date. • Announced the pending off-market acquisition of Greenbrier Square, a Kroger-anchored retail center in Chesapeake, Virginia. In July, completed the off-market acquisition of Overlook Village, a 150,000 square foot retail center in Asheville, North Carolina anchored by T.J. Maxx | Homegoods and Ross.
6 2021 OUTLOOK & ASSUMPTIONS OUTLOOK LOW HIGH TOTAL NOI $122.0M $123.0M CONSTRUCTION SEGMENT GROSS PROFIT $3.7M $4.2M G&A EXPENSES $14.5M $14.8M MEZZANINE INTEREST INCOME $17.8M $18.2M INTEREST EXPENSE(1) $33.2M $33.8M NORMALIZED FFO PER DILUTED SHARE $1.02 $1.06 • Acquisition of two retail centers, Overlook Village and Greenbrier Square, in the third quarter • Interest expense based on Forward LIBOR Curve, which forecasts rates ending the year at 0.19% • Opportunistic sale of common stock through the ATM program, resulting in a full year weighted average share count of 82M GUIDANCE ASSUMPTIONS (1) Includes the interest expense on finance leases.
7 SUMMARY INFORMATION $ IN THOUSANDS, EXCEPT PER SHARE DATA (1) Excludes GAAP adjustments. (2) Office and retail occupancy based on leased square feet as a % of respective total. (3) Multifamily and student housing occupancy based on occupied units/beds as a % of total. (4) In 2Q21 conventional multifamily and student housing occupancy was 96.6% and 83.5%, respectively. In the prior quarter multifamily occupancy was 95.8% and student housing 85.0%. (5) Regal leases which were terminated in October 2020 have been re-signed and included in occupancy for both quarters. Regal at Columbus Village II was re-signed after December 31, 2020. (6) Total occupancy weighted by annualized base rent. Three months ended OPERATIONAL METRICS 6/30/2021 3/31/2021 12/31/2020 9/30/2020 Net income attributable to common stockholders and OP unitholders $5,568 $3,122 $1,851 $8,651 Net income per diluted share attributable to common stockholders and OP unitholders $0.07 $0.04 $0.02 $0.11 Normalized FFO attributable to common stockholders and OP unitholders 23,320 20,575 19,900 19,039 Normalized FFO per diluted share attributable to common stockholders and OP unitholders $0.29 $0.26 $0.25 $0.24 Annualized dividend yield 4.82% 4.78% 3.92% 4.75% Core debt / Annualized core EBITDA 6.7x 7.0x 6.6x 5.8x Fixed charge coverage ratio 2.4x 2.4x 2.3x 2.4x CAPITALIZATION Common shares outstanding 60,992 59,894 59,073 57,934 Operating Partnership units outstanding 20,853 20,853 20,865 20,523 Common shares and Operating Partnership units outstanding 81,845 80,747 79,938 78,457 Market price per common share $13.29 $12.54 $11.22 $9.26 Common equity capitalization 1,087,720 1,012,568 896,904 726,512 Preferred equity capitalization 171,085 171,085 171,085 171,075 Total equity capitalization $1,258,805 $1,183,653 $1,067,989 $897,587 Total debt(1) 963,885 975,099 962,812 885,359 Total capitalization 2,222,690 2,158,752 2,030,801 1,782,946 Less: cash (53,242) (34,588) (50,430) (79,224) Total enterprise value $2,169,448 $2,124,164 $1,980,371 $1,703,722 STABILIZED PORTFOLIO OCCUPANCY Retail (2) 94.7% 93.9% 94.7% (5) 94.2% (5) Office (2) 96.5% 97.2% 97.0% 96.7% Multifamily (3) 92.2% (4) 92.2% (4) 92.5% 95.9% Weighted Average (6) 94.1% 94.0% 94.4% 95.4% PORTFOLIO METRICS (INCLUDING NON-STABILIZED) Net Operating Income (NOI) $30,621 $29,603 $28,785 $24,653 Total Number of Properties 57 57 57 55 Total Rentable Square Feet (RSF) 5,337,669 5,337,657 5,323,441 5,323,442 Retail Portfolio Net Operating Income $14,011 $13,392 $13,500 $11,243 Number of Properties 37 37 37 37 Net Rentable Square Feet 3,709,490 3,709,478 3,690,375 3,690,376 Office Portfolio Net Operating Income $7,405 $7,402 $7,073 $7,039 Number of Properties 8 8 8 8 Net Rentable Square Feet 1,628,179 1,628,179 1,633,066 1,633,066 Multifamily Portfolio Net Operating Income $9,205 $8,809 $8,212 $6,371 Number of Properties 12 12 12 10 Units 2,344 2,344 2,344 1,754 Beds 1,183 1,183 1,183 1,183
8 NET ASSET VALUE COMPONENT DATA $ IN THOUSANDS (1) NOI from non-stabilized portfolio and development pipeline excluded from stabilized portfolio. (2) Excludes expenses associated with the Company’s in-house asset management division of $0.7M for the 3 months ended 6/30/2021. (3) Includes leases for spaces occupied by Armada Hoffler which are eliminated for GAAP purposes. (4) Excludes lease right of use assets and lease liabilities. (5) Excludes GAAP adjustments. (6) Management’s assessment of comparable multifamily assets in the applicable market. Stabilized Portfolio NOI (Cash)(1) Third-Party General Contracting and Real Estate Services Three months ended 6/30/2021 Trailing 12 Months Office(3) Retail Multifamily Total General Contracting Gross Profit $5,465 Stable Portfolio Portfolio NOI (2) $7,240 $13,403 $9,177 $29,820 Non-Property Assets(4) Unstabilized Properties NOI (399) - - (399) As of 6/30/2021 Signed Leases Not Yet Occupied or In Free Rent Period 85 990 56 1,131 Cash and Retricted Cash $53,242 Net Deferrals and Recoveries 69 (415) (13) (359) Accounts Receivable 30,227 Stable Portfolio NOI $6,995 $13,978 $9,220 $30,193 Notes Receivable, Including Mezzanine Investments (5) 112,724 Intra-Quarter Transactions Construction receivables, including retentions (5) 14,006 Net Acquisitons - - - - Acquired lease intangible assets, net 55,807 Net Dispositions - - - - Other Assets 40,443 Total - - - - Total Non-Property Assets $306,449 Annualized $27,980 $55,912 $36,880 $120,772 Liabilities(4) As of 6/30/2021 Non-Stabilized Portfolio Mortgages and Notes Payable(5) $963,885 As of 6/30/2021 Accounts Payable and Accrued Liabilities 20,395 Projects Under Development at Cost $45,000 Construction Payables, Including Retentions 18,470 Projects Delivered Not Stabilized at Cost 110,000 Other Liabilities 60,012 Projects Under Predevelopment or On Hold 10,000 Total Liabilities $1,062,762 Unconsolidated Joint Ventures 7,000 Total Non-Stabilized Portfolio $172,000 Preferred Equity Liquidation Value Management's Estimate of Land Value and Vacancy Opportunities Series A Cumulative Redeemable Perpetual Preferred Stock $171,085 Size Estimated Value(6) Harrisonburg MF Development Opportunity 228 units $20,000-30,000/unit Common Equity As of 6/30/2021 Size Net Rent PSF Total common shares outstanding 60,992 Vacant Space at Lease 55,000 $18.50/sf Total OP units outstanding 20,853 Total Common Shares & OP Units Outstanding 81,845
9 SUMMARY BALANCE SHEET $ IN THOUSANDS 6/30/2021 12/31/2020 Assets (Unaudited) Real estate investments: Income producing property $1,756,836 $1,680,943 Held for development 11,294 13,607 Construction in progress 37,167 63,367 Accumulated depreciation (278,010) (253,965) Net real estate investments 1,527,287 1,503,952 Real estate investments held for sale - 1,165 Cash and cash equivalents 43,493 40,998 Restricted cash 9,749 9,432 Accounts receivable, net 30,227 28,259 Notes receivable, net 112,446 135,432 Construction receivables, including retentions, net 13,823 38,735 Construction contract costs and estimated earnings in excess of bil l ings 85 138 Equity method investments 6,999 1,078 Operating lease right-of-use assets 32,640 32,760 Finance lease right-of-use assets 47,544 23,544 Acquired lease intangible assets 55,807 58,154 Other assets 40,358 43,324 Total Assets $1,920,458 $1,916,971 Liabilities and Equity Indebtedness, net $964,396 $963,845 Accounts payable and accrued liabilities 20,395 23,900 Construction payables, including retentions 18,470 49,821 Bil l ings in excess of costs and estimated earnings 4,137 6,088 Operating lease liabilities 41,719 41,659 Finance lease liabilities 45,997 17,954 Other l iabilities 57,725 56,902 Total Liabilities 1,152,839 1,160,169 Total Equity 767,619 756,802 Total Liabilities and Equity $1,920,458 $1,916,971 As of
10 SUMMARY INCOME STATEMENT IN THOUSANDS, EXCEPT PER SHARE DATA Three months ended Six months ended 6/30/2021 6/30/2020 6/30/2021 6/30/2020 Revenues (Unaudited) Rental revenues $47,378 $39,915 $93,119 $82,204 General contracting and real estate services revenues 18,408 57,398 53,971 104,666 Total Revenues 65,786 97,313 147,090 186,870 Expenses Rental expenses 11,292 8,309 22,124 17,684 Real estate taxes 5,465 4,233 10,771 8,566 General contracting and real estate services expenses 18,131 55,342 52,406 100,892 Depreciation and amortization 17,285 13,777 35,351 28,056 Amortization of right-of-use assets - finance leases 278 146 467 293 General and administrative expenses 3,487 2,988 7,508 6,781 Acquisition, development and other pursuit costs 32 502 103 529 Impairment charges 83 - 3,122 158 Total Expenses 56,053 85,297 131,852 162,959 Gain on real estate dispositions - 2,776 3,717 2,776 Operating Income 9,733 14,792 18,955 26,687 Interest income 6,746 4,412 10,862 11,638 Interest expense (8,418) (7,227) (16,393) (15,415) Change in fair value of derivatives and other 314 (6) 707 (1,742) Unrealized credit loss release (provision) (388) 117 (333) (260) Other income (expense), net 7 286 186 344 Income before taxes 7,994 12,374 13,984 21,252 Income tax benefit 461 (65) 480 192 Net Income $8,455 $12,309 $14,464 $21,444 Net income attributable to noncontrolling interest in investment entities - 44 - 136 Preferred stock dividends (2,887) (1,175) (5,774) (2,242) Net income attributable to AHH and OP unitholders $5,568 $11,178 $8,690 $19,338 Net income per diluted share and unit attributable to AHH and OP unitholders $0.07 $0.14 $0.11 $0.25 Weighted Average Shares & OP Units - Diluted 81,262 77,941 80,771 77,806
11 FFO, NORMALIZED FFO & AFFO(1) IN THOUSANDS, EXCEPT PER SHARE DATA (1) See definitions in appendix. (2) Adjusted for the depreciation attributable to noncontrolling interests in consolidated investments. (3) Excludes gain on the sale of easement rights at a non-operating parcel of $0.3M. (4) Related to Socastee Commons. (5) Excludes development, redevelopment, and first-generation space. (6) Includes non-cash interest expense relating to indebtedness and interest expense on finance leases. Three months ended (Unaudited) 6/30/2021 3/31/2021 12/31/2020 9/30/2020 6/30/2021 6/30/2020 Funds From Operations Net income attributable to AHH and OP unitholders $5,568 $3,122 $1,851 $8,651 $8,690 $19,338 Net Income per diluted share $0.07 $0.04 $0.02 $0.11 $0.11 $0.25 Depreciation and amortization 17,285 18,066 17,678 (2) 14,131 (2) 35,351 27,736 (2) Gains on dispositions of operating real estate - (3,464) (3) - (3,612) (3,464) (3) (2,776) Impairment of real estate assets - 3,039 (4) - - 3,039 (4) - FFO $22,853 $20,763 $19,529 $19,170 $43,616 $44,298 FFO per diluted share $0.28 $0.26 $0.25 $0.24 $0.54 $0.57 Normalized FFO Acquisition, development & other pursuit costs 32 71 29 26 103 529 Non cash GAAP Adjustments 749 134 636 161 883 711 Change in fair value of derivatives and other (314) (393) (294) (318) (707) 1,742 Normalized FFO $23,320 $20,575 $19,900 $19,039 $43,895 $47,280 Normalized FFO per diluted share $0.29 $0.26 $0.25 $0.24 $0.54 $0.61 Adjusted FFO Non-cash stock compensation 423 1,017 471 456 1,440 1,451 Acquisition, development & other pursuit costs (32) (71) (29) (26) (103) (529) Tenant improvements, leasing commissions, lease incentives (5) (1,537) (1,264) (1,924) (2,770) (2,801) (2,046) Property related capital expenditures (2,054) (1,224) (2,500) (1,373) (3,278) (3,330) Adjustment for mezz loan modification and exit fees (493) (493) (493) (614) (986) (2,688) Non-cash interest expense(6) 1,332 988 934 874 2,320 1,311 Cash ground rent payment - finance lease (624) (415) (291) (291) (1,039) (457) GAAP Adjustments (1,286) (1,707) (1,940) (684) (2,993) (7,279) AFFO $19,049 $17,406 $14,128 $14,611 $36,455 $33,713 AFFO per diluted share $0.23 $0.22 $0.18 $0.19 $0.45 $0.43 Weighted Average Common Shares Outstanding 60,409 59,422 58,304 57,923 59,918 56,533 Weighted Average Operating Partnership Units Outstanding 20,853 20,854 20,867 20,520 20,853 21,273 Total Weighted Average Common Shares and OP Units Outstanding 81,262 80,276 79,171 78,443 80,771 77,806 Six months ended (Unaudited)
12 OUTSTANDING DEBT $ IN THOUSANDS (1) Includes debt subject to interest rate swap locks. (2) Subject to a LIBOR rate floor. Debt Stated Rate Effective Rate as of 6/30/2021 Maturity Date 2021 2022 2023 2024 2025 Thereafter Outstanding as of 6/30/2021 Secured Notes Payable - Core Debt Red Mill West 4.23% 4.23% Jun-2022 $235 $10,386 $10,621 Thames Street Wharf L+1.30% 1.81% (1) Jun-2022 - 70,000 70,000 Marketplace at Hilltop 4.42% 4.42% Oct-2022 209 9,707 9,916 1405 Point L+2.25% 2.35% Jan-2023 362 754 51,532 52,648 Socastee Commons 4.57% 4.57% Jan-2023 58 120 4,223 4,401 Nexton Square L+2.25% 2.50% (2) Feb-2023 - - 20,107 20,107 249 Central Park Retail L+1.60% 3.85% (1) Aug-2023 126 260 16,092 16,478 Fountain Plaza Retail L+1.60% 3.85% (1) Aug-2023 76 156 9,684 9,916 South Retail L+1.60% 3.85% (1) Aug-2023 55 114 7,066 7,235 Hoffler Place L+2.60% 3.00% (2) Jan-2024 - - 257 18,143 18,400 Summit Place L+2.60% 3.00% (2) Jan-2024 - - 311 22,789 23,100 One City Center L+1.85% 1.95% Apr-2024 319 659 691 22,734 24,403 Southgate Square L+2.25% 3.00% (2) Apr-2024 355 728 750 17,550 19,383 Red Mill Central 4.80% 4.80% Jun-2024 87 175 175 1,838 2,275 Premier Apartments L+1.55% 1.65% Oct-2024 105 221 234 16,053 16,613 Premier Retail L+1.55% 1.65% Oct-2024 52 109 115 7,906 8,182 Red Mill South 3.57% 3.57% May-2025 159 327 338 351 4,502 5,677 Brooks Crossing Office L+1.60% 1.70% Jul-2025 253 514 523 531 13,321 15,142 Market at Mill Creek L+1.55% 1.65% Jul-2025 324 647 647 647 11,201 13,466 Johns Hopkins Village L+1.25% 4.19% (1) Aug-2025 496 1,031 1,075 1,116 46,649 50,367 North Point Center Note 2 7.25% 7.25% Sep-2025 71 151 162 174 1,468 2,026 Encore Apartments 2.93% 2.93% Feb-2026 264 540 556 573 590 22,265 24,788 4525 Main Street 2.93% 2.93% Feb-2026 338 693 714 735 757 28,577 31,814 Delray Beach Plaza L+3.00% 3.10% Mar-2026 289 579 579 579 577 11,726 14,329 Lexington Square 4.50% 4.50% Sep-2028 135 280 293 306 320 12,973 14,307 Red Mill North 4.73% 4.73% Dec-2028 53 110 116 121 127 3,715 4,242 Greenside Apartments 3.17% 3.17% Dec-2029 357 735 759 780 808 29,516 32,955 The Residences at Annapolis Junction SOFR+2.66% 2.71% Nov-2030 - - 147 1,753 1,809 80,666 84,375 Smith's Landing 4.05% 4.05% Jun-2035 444 917 956 994 1,037 12,547 16,895 Liberty Apartments 5.66% 5.66% Nov-2043 154 322 341 361 382 12,167 13,727 Edison Apartments 5.30% 5.30% Dec-2044 175 364 384 405 427 14,346 16,101 The Cosmopolitan 3.35% 3.35% Jul-2051 413 847 876 906 937 38,524 42,503 Total - Secured Core Debt 5,964 101,446 119,703 117,345 84,912 267,022 696,392 Secured Notes Payable - Development Pipeline Wills Wharf L+2.25% 2.35% Jun-2023 - - 61,235 61,235 Chronicle Mill L+3.00% 3.25% (2) May-2024 Gainesvil le Apartments L+3.00% 3.75% (2) Aug-2024 - - - 1,258 1,258 Total - Development Pipeline - - 61,235 1,258 - - 62,493 Total Secured Notes Payable 5,964 101,446 180,938 118,603 84,912 267,022 758,885 Unsecured Core Debt Senior Unsecured Line of Credit L+1.30%-1.85% 1.70% Jan-2024 - Senior Unsecured Term Loan L+1.25%-1.80% 1.65% Jan-2025 - - - - 19,500 19,500 Senior Unsecured Term Loan L+1.25%-1.80% 2.05% - 4.57% (1) Jan-2025 - - - - 185,500 185,500 Total - Unsecured Core Debt - - - - 205,000 - 205,000 Total Notes Payable excluding GAAP Adjustments $5,964 $101,446 $180,938 $118,603 $289,912 $267,022 $963,885 GAAP Adjustments 511 Total Notes Payable $964,396 Debt Maturities & Principal Payments
13 DEBT INFORMATION Interest Rates(4) (1) Excludes debt subject to interest rate swap locks. (2) Includes debt subject to interest rate swap locks. (3) Excludes GAAP adjustments. (4) Subject to LIBOR rate as of 6/30/21. $ IN THOUSANDS Debt Maturities 2.5% 2.7% 2.6% 3.2% 3.4% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% $0 $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 2021 2022 2023 2024 2025 Thereafter⁽¹⁾ Debt Maturing Weighted Average Interest Rate Interest Rate Cap Agreements At or Below 0.50% Effective Date Maturity Date Strike Rate Notional Amount July 2020 July 2023 0.50% $100,000 February 2021 February 2023 0.50% 100,000 May 2021 May 2023 0.50% 35,100 May 2021 May 2023 0.50% 50,000 June 2021 July 2023 0.50% 100,000 Total Interest Rate Caps 385,100 Fixed-rate Debt(2)(3) $571,744 Fixed-rate and Hedged Debt $956,844 Total Debt(3) $963,885 % of Total Debt(3) 99.3% Total Debt Composition Weighted Average(4) % of Debt Interest Rate Maturity Variable vs. Fixed-rate Debt Variable-rate Debt(1) 40.7% 2.4% 4.0 Yrs Fixed-rate Debt(2)(3) 59.3% 3.4% 6.9 Yrs Fixed-rate and Hedged Debt(2)(3) 99.3% Secured vs. Unsecured Debt Unsecured Debt 21.3% 3.1% 3.6 Yrs Secured Debt 78.7% 3.0% 6.3 Yrs Total 3.0% 5.7 Yrs 2.4% 3.4% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% Variable-rate Debt Fixed-rate Debt 3.0% Weighted Average
14 (1) See reconciliation in appendix. (2) Excludes non-recurring items. (3) Excludes GAAP adjustments. (4) See definition in appendix. (5) Interest expense has been adjusted for the current period and for prior periods to include interest expense relating to finance leases. (6) Includes the unannualized mezzanine loan prepayment premium of $2.4M. (7) Includes the unannualized gain of sale on the non-operating parcel of $0.3M. CORE DEBT TO CORE EBITDA $ IN THE THOUSANDS SEE APPENDIX FOR CALCULATIONS AND RECONCILIATION Three months ended 6/30/2021 3/31/2021 12/31/2020 9/30/2020 6/30/2020 Net income attributable to common stockholders and OP unitholders $5,568 $3,122 $1,851 $8,651 $11,178 Adjusted EBITDA(1)(2)(4)(5) $31,918 $31,922 $30,603 $30,045 $31,178 Other adjustments: Development/Redevelopment (819) (1,060) (880) (2,225) (1,085) (Less) Acquisitions/Dispositions completed intra-quarter - (447) (961) (155) (1,351) Core EBITDA(4) $31,099 $30,415 $28,762 $27,665 $28,742 Annualized Core EBITDA $126,756 (6) $121,915 (7) $115,046 $110,658 $114,968 Total debt(3) $963,885 $975,099 $962,812 $885,359 $956,726 Adjustments to debt: (Less) Development/Redevelopment (62,493) (69,039) (67,285) (143,560) (137,508) (Less) Net Acquisitions completed intra-quarter - (14,473) (84,375) (22,909) - (Less) Cash & restricted cash (53,242) (34,588) (50,430) (79,224) (75,111) Core Debt(4) $848,150 $856,999 $760,722 $639,666 $744,107 Core Debt/Annualized Core EBITDA 6.7x 7.0x 6.6x 5.8x 6.5x
15 CAPITALIZATION & FINANCIAL RATIOS $ IN THOUSANDS AS OF JUNE 30, 2021 (1) Reflects quarterly Adjusted EBITDA divided by total quarterly interest expense and required principal repayment. (2) Reflects quarterly Adjusted EBITDA divided by total quarterly interest expense, required principal repayment, and preferred equity dividends. Unsecured Term Loans Mortgages Payable Preferred Equity Common Stock Common Units Equity Debt Debt 43% Equity 57% 9% 34% 8% 36% 13% Debt % of Total Principal Balance Unsecured credit facil ity 0% $0 Unsecured term loans 21% 205,000 Mortgages payable 79% 758,885 Total debt $963,885 Preferred Equity Shares Liquidation Value Per Share Total Liquidation Value 6,843 $25.00 $171,085 Common Equity % of Total Shares/Units Stock Price Market Value Common stock (NYSE: AHH) 74.52% 60,992 $13.29 $810,584 Operating Partnership Units 25.48% 20,853 $13.29 277,136 Equity market capitalization 81,845 $1,087,720 Total capitalization $2,222,690 Financial Ratios Debt Service Coverage Ratio(1) 3.0x Fixed Charge Coverage Ratio(2) 2.4x Net Debt to Adjusted EBITDA 7.0x Core Debt to Core EBITDA 6.7x Core Debt + Preferred Equity to Core EBITDA 8.0x Debt/Total Capitalization 43% Liquidity Unencumbered Properties Cash on hand $53,242 % of Total Properties 53% Availability under credit facil ity 115,000 % of Annualized Base Rent 31% Availability under construction loans 81,806 $250,048 6.75% Series A Cumulative Redeemable Perpetual Preferred Stock (NYSE: AHHPrA)
16 PROPERTY PORTFOLIO AS OF JUNE 30, 2021 Retail Properties- Stabilized Anchor Tenant(s) Location Town Center Unencumbered ABR Year Built SF(1) Occupancy(2) ABR(3) ABR per Leased SF(3) 249 Central Park Retail Cheesecake Factory, Brooks Brothers Virginia Beach, VA ✓ - 2004 92,400 97.9% $2,432,473 $26.90 Apex Entertainment Apex Entertainment, USI Virginia Beach, VA ✓ 100% 2002 103,335 100.0% 1,492,772 14.45 Broad Creek Shopping Center (6)(9) Food Lion, PetSmart Norfolk, VA 100% 1997/2001 121,504 96.9% 2,156,852 18.32 Broadmoor Plaza Kroger South Bend, IN 100% 1980 115,059 98.2% 1,348,249 11.94 Brooks Crossing Retail Various Small Shops Newport News, VA 100% 2016 18,349 66.3% 170,112 13.98 Columbus Village(6) Barnes & Noble, CAVA, Shake Shack Virginia Beach, VA ✓ 100% 1980/2013 62,362 94.8% 1,798,894 30.44 Columbus Village II BB&B, Regal Virginia Beach, VA ✓ 100% 1995/1996 92,061 96.7% 720,000 8.09 Commerce Street Retail Yard House Virginia Beach, VA ✓ 100% 2008 19,173 100.0% 894,764 46.67 Courthouse 7-Eleven 7-Eleven Virginia Beach, VA 100% 2011 3,177 100.0% 139,311 43.85 Delray Beach Plaza (6)(9) Whole Foods Delray Beach, FL - 2021 87,207 100.0% 2,975,592 34.12 Dimmock Square Best Buy, Old Navy Colonial Heights, VA 100% 1998 106,166 75.3% 1,471,687 18.42 Fountain Plaza Retail Ruth's Chris, Ann Taylor Virginia Beach, VA ✓ - 2004 35,961 100.0% 1,008,015 28.03 Greentree Shopping Center Various Small Shops Chesapeake, VA 100% 2014 15,719 92.6% 339,200 23.30 Hanbury Village(6) Harris Teeter Chesapeake, VA 100% 2006/2009 98,638 100.0% 1,982,025 20.09 Harrisonburg Regal Regal Cinemas Harrisonburg, VA 100% 1999 49,000 100.0% 717,850 14.65 Lexington Square Lowes Foods Lexington, SC - 2017 85,440 98.3% 1,830,239 21.79 Market at Mill Creek (6) Lowes Foods Mt. Pleasant, SC - 2018 80,319 97.7% 1,815,278 23.13 Marketplace at Hilltop(6)(9) Total Wine, Panera, Chick-Fil-A Virginia Beach, VA - 2000/2001 116,953 96.4% 2,483,156 22.02 Nexton Square Various Small Shops Summerville, SC - 2020 127,208 94.8% 3,140,898 26.04 North Hampton Market PetSmart, Hobby Lobby Taylors, SC 100% 2004 114,954 97.7% 1,486,338 13.23 North Point Center(6) Harris Teeter, Home Depot, Costco Durham, NC 88% 1998/2009 494,746 100.0% 3,902,667 7.89 Parkway Centre Publix Moultrie, GA 100% 2017 61,200 100.0% 836,604 13.67 Parkway Marketplace Rite Aid Virginia Beach, VA 100% 1998 37,804 87.3% 673,164 20.40 Patterson Place BB&B, PetSmart, DSW Durham, NC 100% 2004 160,942 80.7% 2,140,213 16.49 Perry Hall Marketplace Safeway Perry Hall, MD 100% 2001 74,256 98.0% 1,247,061 17.14 Premier Retail Will iams Sonoma, Pottery Barn Virginia Beach, VA ✓ - 2018 38,715 82.0% $1,022,764 32.21 Providence Plaza Cranfil l , Sumner & Hartzog, Chipotle Charlotte, NC 100% 2007/2008 103,118 89.7% 2,654,530 28.71 Red Mill Commons (6) Homegoods, Walgreens Virginia Beach, VA 8% 2000-2005 373,808 90.3% 6,258,816 18.55 Sandbridge Commons (6) Harris Teeter Virginia Beach, VA 100% 2015 76,650 100.0% 1,102,652 14.39 Socastee Commons Various Small Shops Myrtle Beach, SC - 2000/2014 57,273 100.0% 655,145 11.44 Southgate Square Burlington, PetSmart, Michaels, Conn's Colonial Heights, VA - 1991/2016 260,131 95.1% 3,463,258 14.00 South Retail lululemon, free people, CPK Virginia Beach, VA ✓ - 2002 38,515 77.9% 867,559 28.90 South Square Ross, Petco, Office Depot Durham, NC 100% 1977/2005 109,590 100.0% 1,953,988 17.83 Southshore Shops Buffalo Wild Wings Chesterfield, VA 100% 2006 40,307 74.1% 630,811 21.12 Studio 56 Retail Rocket Title Virginia Beach, VA ✓ 100% 2007 11,594 31.0% 92,654 25.78 Tyre Neck Harris Teeter(6)(9) Harris Teeter Portsmouth, VA 100% 2011 48,859 100.0% 533,285 10.91 Wendover Village T.J. Maxx, Petco, Beauty World Greensboro, NC 100% 2004 176,997 99.3% 3,397,128 19.32 Stabilized Retail Total 37 Properties 55% 3,709,490 94.7% $61,836,004 $17.60
17 PROPERTY PORTFOLIO CONT. AS OF JUNE 30, 2021 (1) The net rentable square footage for each of our retail & office properties is the sum of (a) the square footage of existing leases, plus (b) for available space, management’s estimate of net rentable square footage based, in part, on past leases. The net rentable square footage included in office leases is generally consistent with the Building Owners and Managers Association, or BOMA, 1996 measurement guidelines. (2) Occupancy for each of our retail & office properties is calculated as (a) square footage under executed leases as of June 30, 2021, divided by (b) net rentable square feet, expressed as a percentage. Occupancy for our multifamily properties is calculated as (a) total units/beds occupied as of June 30, 2021, divided by (b) total units/beds available, as of such date expressed as a percentage. (3) For the properties in our retail & office portfolios, annualized base rent, or ABR, is calculated by multiplying (a) monthly base rent (defined as cash base rent, before contractual tenant concessions and abatements, and excluding tenant reimbursements for expenses paid by us) as of June 30, 2021 for in-place leases as of such date by (b) 12, and does not give effect to periodic contractual rent increases or contingent rental revenue (e.g., percentage rent based on tenant sales thresholds). ABR per leased square foot is calculated by dividing (a) ABR by (b) square footage under in-place leases as of June 30, 2021. In the case of triple net or modified gross leases, our calculation of ABR does not include tenant reimbursements for real estate taxes, insurance, common area or other operating expenses. (4) The Company occupied 55,390 square feet at these two properties at an ABR of $1.8M, or $32.23 per leased square foot, which are reflected in this table. The rent paid by us is eliminated in accordance with GAAP in the consolidated financial statements. (5) Includes ABR pursuant to a rooftop lease. (6) Net rentable square feet at certain of our retail properties includes pad sites leased pursuant to the ground leases. (7) For the properties in our multifamily portfolio, AQR is calculated by multiplying (a) revenue for the quarter ended June 30, 2021 by (b) 4. (8) The ABR for Liberty, Cosmopolitan, Johns Hopkins Village, Hoffler Place, Edison, and 1405 Point excludes approximately $0.3M, $0.8M, $1.2M, $0.1M, $0.3M and $0.4M, respectively, from ground floor retail leases. (9) The Company leases all or a portion of the land underlying this property pursuant to a ground lease. (10) Student Housing property that is leased by bed. Monthly effective rent per occupied unit is calculated by dividing total base rental payments for the month ended June 30, 2021 by the number of occupied beds. Multifamily Properties- Stabilized Location Town Center Unencumbered AQR Year Built Units/Beds Occupancy (2) AQR (7) Monthly AQR per Occupied Unit/Bed Monthly AQR per Occupied SF 1405 Point(8)(9) Baltimore, MD - 2018 289 93.8% $7,904,705 $2,431 $3.24 Encore Apartments Virginia Beach, VA ✓ - 2014 286 98.3% 4,925,601 1,461 2.02 Edison Apartments (8) Richmond, VA - 2014 174 97.1% 2,672,536 1,318 2.13 Greenside Apartments Charlotte, NC - 2018 225 94.7% 4,211,333 1,648 2.23 Liberty Apartments (8) Newport News, VA - 2013 197 95.1% 2,962,016 1,318 1.79 Premier Apartments Virginia Beach, VA ✓ - 2018 131 98.5% 2,597,253 1,678 2.72 Smith's Landing(9) Blacksburg, VA - 2009 284 96.8% 5,228,148 1,584 1.67 The Cosmopolitan(8) Virginia Beach, VA ✓ - 2006 342 97.4% 8,029,484 2,009 2.07 The Residences at Annapolis Junction Annapolis Junction, MD - 2018 416 97.4% 9,814,520 2,019 2.24 Multifamily Total 9 Properties - 2,344 96.6% 48,345,596 1,780 2.20 Hoffler Place(8)(10) Charleston, SC - 2019 258 84.5% 3,179,202 1,215 3.89 Johns Hopkins Village(8)(9)(10) Baltimore, MD - 2016 568 77.1% 6,222,796 1,184 4.03 Summit Place(10) Charleston, SC - 2020 357 93.0% 3,657,529 918 2.57 Student Housing Total 3 Properties - 1,183 83.5% 13,059,527 1,102 3.45 Total / Weighted Average Multifamily Portfolio 3,527 92.2% $61,405,123 $1,574 $2.38 Office Properties- Stabilized Anchor Tenant(s) Location Town Center Unencumbered ABR Year Built SF(1) Occupancy(2) ABR(3) ABR per Leased SF(3) 4525 Main Street Clark Nexsen, Anthropologie, Mythics Virginia Beach, VA ✓ - 2014 234,938 99.4% $6,972,878 $29.86 Armada Hoffler Tower(4)(5) AHH, Troutman Pepper, Will iams Mullen Virginia Beach, VA ✓ 100% 2002 315,929 97.3% 9,050,986 29.44 Brooks Crossing Office Huntington Ingalls Industries Newport News, VA - 2019 98,061 100.0% 1,887,674 19.25 One Columbus (5) BB&T, HBA Virginia Beach, VA ✓ 100% 1984 128,770 88.3% 2,917,031 25.64 One City Center Duke University, WeWork Durham, NC - 2019 151,599 89.3% 4,286,367 31.65 Thames Street Wharf(4) Morgan Stanley, JHU Medical Baltimore, MD - 2010 263,426 100.0% 7,443,476 28.26 Two Columbus Hazen & Sawyer, Fidelity Virginia Beach, VA ✓ 100% 2009 108,459 95.4% 2,603,176 25.15 Stabilized Office Total 7 Properties 41% 1,301,182 96.5% $35,161,588 $28.02 Office Properties- Non-Stabilized Anchor Tenant(s) Location Town Center Unencumbered ABR Year Built SF(1) Occupancy(2) ABR(3) ABR per Leased SF(3) Wills Wharf(9) Canopy by Hilton, Transamerica, RBC Baltimore, MD - 2020 326,997 59.6% $5,520,157 $28.32 Non-Stabilized Office Total 1 Property
18 DEVELOPMENT PIPELINE $ IN THOUSANDS (1) Represents estimates that may change as the development and redevelopment process proceeds. (2) First fully-stabilized quarter. See same store definition in appendix. (3) Majority interest in joint venture with preferred return. Gainesville Apts Gainesville, GA Q2 2021 YTD Capitalized Interest $395 $810 Capitalized Overhead $596 $1,026 Projects Property Type Estimated (1) % Leased or LOI Construction Start Initial Occupancy Stabilized Operation(2) Estimated Cost(1) Loan Commitment Cost to Date AHH Ownership % Anchor Tenants Under Development Chronicle Mill Belmont, NC Multifamily 238 units / 14,700 sf - 1Q21 3Q22 2Q24 $55,000 $35,100 $11,000 85% (3) Harrisonburg Apartments Harrisonburg, VA Multifamily 228 units - 2Q22 3Q23 4Q24 49,000 TBD - 100% Gainesville Apartments Gainesville, GA Multifamily 223 units - 3Q20 1Q22 3Q23 52,000 31,000 23,000 95% (3) Southern Post Roswell, GA Mixed-use 137 units / 137,000 sf - 1Q22 4Q23 4Q24 104,000 TBD 11,000 100% Total Projects Under Development $260,000 $66,100 $45,000 Delivered Not Stabilized Wills Wharf Baltimore, MD Office 327,000 sf 70% 3Q18 2Q20 3Q22 $120,000 $76,000 $110,000 100% Canopy by Hilton, Transamerica, RBC Predevelopment Ten Tryon Charlotte, NC Mixed-use 220,000 sf - TBD TBD TBD TBD TBD $10,000 80% (3) Unconsolidated JV's T. Rowe Price Global HQ Baltimore, MD $250,000 - $7,000 50% T. Rowe Price Parcel 4 Mixed-Use Baltimore, MD 192,000 - - 50% Total Unconsolidated JV's $442,000 - $7,000 see page 19 for details see page 19 for details Schedule(1)
19 T Rowe Price Global HQ Baltimore, MD 1 - Thames Street Wharf 2 - 1405 Point 3 - Wills Wharf 4 - T. Rowe Price Global HQ 5 - Parcel 4 Mixed Use 6 - Exelon Building Owned 100% by AHH JV with Beatty Development Group Built by AHH (not owned) 6 2 1 3 4 5 DEVELOPMENT PIPELINE(1) UNCONSOLIDATED JOINT-VENTURES- PREDEVELOPMENT: SUBJECT TO CHANGE $ IN THOUSANDS (1) All items are estimated based on predevelopment assumptions. Estimated Property Type Size Construction Start Initial Occupancy Stabilized Operation Project Cost AHH Ownership % AHH Equity Requirement AHH Investment To Date Total Construction Fees T. Rowe Price Global HQ-Baltimore, MD Office 450,000 sf 1Q22 1Q24 2Q24 $250,000 50% $30,000 $7,000 $4-5M Parcel 4 Mixed-Use-Baltimore, MD Mixed-Use/Garage 310 units / 1,300 parking spaces 4Q21 4Q23 TBD 192,000 50% 30,000 - 4M Total Joint-Ventures $442,000 $60,000 $7,000 $8-9M
20 MEZZANINE INVESTMENTS (1) Represents estimates that may change as the development process proceeds. (2) 100% preferred equity, with economic terms and accounting consistent with a mezzanine loan. The Interlock Atlanta, GA AS OF JUNE 30, 2021 $ IN THOUSANDS The Interlock Atlanta, GA Property Type Estimated Size(1) % Leased or LOI Initial Occupancy Loan Maturity Interest Rate Loan Balance Mezzanine Interest QTD Outstanding Investments The Interlock Atlanta, GA Mixed-use 300,000 sf 78% 1Q21 4Q24 15% $90,057 $3,310 Solis Nexton(2) Summerville, SC Multifamily 320 units NA 4Q22 4Q26 11% 11,716 261 Solis Apartments at Interlock-loan paid off during quarter (includes loan prepayment premium of $2.4M) 3,068 Total $101,773 $6,639 Mezzanine Interest Expense (424) Net Mezzanine Interest Income $6,215 Schedule(1)
21 ACQUISITIONS & DISPOSITIONS $ IN THOUSANDS (1) Contractual purchase price. (2) Includes JV interest in the property. ACQUISITIONS Properties Location Square Feet/Units Purchase Price(1) Cash Cap Rate Purchase Date Anchor Tenants 2021 Overlook Village Asheville, NC 151,365 $28,350 7.7% 3Q21 T.J. Maxx|Homegoods, Ross 2020 Edison Apartments Richmond, VA 174 units 25,700 6.8% 4Q20 NA 2019 757,577 208,783 7.5% Thames Street Wharf Baltimore, MD 263,426 101,000 7.1% 2Q19 Morgan Stanley, JHU Medical Red Mill Commons & Marketplace at Hilltop Virginia Beach, VA 488,865 105,000 7.7% 2Q19 T.J. Maxx, Homegoods, Total Wine, Walgreens Wendover Village III Greensboro, NC 5,286 2,783 9.2% 1Q19 Verizon 2018 217,751 52,658 6.7% 2017 35,895 14,300 7.7% 2016 1,515,674 261,530 7.0% 2015 409,386 95,380 7.1% 2014 106,166 19,662 7.3% Total/Weighted Average 3,193,814 / 174 units $706,363 7.2% DISPOSITIONS Properties Location Square Feet/Units Sale Price Cash Cap Rate Disposition Date Anchor Tenants 2021 67,655 $8,400 7.7% Oakland Marketplace Oakland, TN 64,538 5,500 7.8% 1Q21 Kroger Hanbury 7-Eleven Chesapeake, VA 3,117 2,900 5.5% 1Q21 7-Eleven 2020 645,600 97,300 7.8% Hanbury Walgreens Chesapeake, VA 14,820 7,300 6.1% 3Q20 Walgreens Retail Portfolio (7 properties) Mid-Atlantic 630,780 90,000 7.8% 2Q20 Harris Teeter, Food Lion, Weis Markets, Office Max 2019 Lightfoot Marketplace Will iamsburg, VA 124,715 30,275 (2) 5.8% 3Q19 Harris Teeter 2018 6,047 4,400 5.4% 2017 52,454 17,750 5.9% 2016 481,866 97,350 10.5% 2015 203,200 / 203 units 81,075 6.2% 2014 31,000 8,900 6.3% Total/Weighted Average 1,612,537 / 203 units $345,450 7.2%
22 CONSTRUCTION BUSINESS SUMMARY $ IN THOUSANDS Holly Springs Apartments Holly Springs, NC Gross Profit Summary 2Q21 Trailing 12 Months (Unaudited) Revenue $18,408 $166,451 Expense (18,131) (160,986) Gross Profit $277 $5,465 Highlighted Projects Location Total Contract Value Work in Place as of 6/30/2021 Backlog Estimated Date of Completion 27th Street Garage and Apartments Virginia Beach, VA $82,183 $76,645 $5,538 3Q 2021 Boulders Lakeview Apartments Richmond, VA 37,228 9 37,219 1Q 2023 Holly Springs Apartments Holly Springs, NC 34,739 30,032 4,707 4Q 2021 Subtotal $154,150 $106,686 $47,464 All Other Projects 273,798 251,043 22,755 Total $427,948 $357,729 $70,219
23 SAME STORE NOI BY SEGMENT $ IN THOUSANDS (RECONCILIATION TO GAAP LOCATED IN APPENDIX) (1) See appendix for Same Store vs. Non – Same Store Properties. (2) Excludes expenses associated with the Company’s in-house asset management division of $0.7M and $0.5M for the 3 months ended 6/30/2021 & 6/30/2020, respectively. (3) Excludes deferred rent collected of ($0.3M) and deferred rent of $2.7M for the three months ended 6/30/2021 & 6/30/2020, respectively. Three months ended Six months ended 6/30/2021 6/30/2020 $ Change % Change 6/30/2021 6/30/2020 $ Change % Change Summary NOI: Office $6,763 $6,556 $207 3.2% $13,489 $13,228 $261 2.0% Retail 12,150 12,552 (402) -3.2% 24,049 25,361 (1,312) -5.2% Multifamily 5,781 5,423 358 6.6% 11,322 11,545 (223) -1.9% $24,694 $24,531 $163 0.7% $48,860 $50,134 ($1,274) -2.5% NOI, Cash Basis: Office $6,395 $6,009 $386 6.4% $12,844 $12,245 $599 4.9% Retail 12,040 9,664 2,376 24.6% 23,579 22,152 1,427 6.4% Multifamily 5,531 5,438 93 1.7% 10,805 11,534 (729) -6.3% $23,966 $21,111 $2,855 13.5% $47,228 $45,931 $1,297 2.8% Detail by Segment Office(1) Revenue $10,290 $9,829 $461 4.7% $20,500 $20,021 $479 2.4% Rental Expenses (2) 2,233 2,139 94 4.4% 4,423 4,526 (103) -2.3% Real Estate Taxes 1,294 1,134 160 14.1% 2,588 2,267 321 14.2% Net Operating Income $6,763 $6,556 $207 3.2% $13,489 $13,228 $261 2.0% Retail(1) Revenue $16,203 $16,232 ($29) -0.2% $32,063 $33,042 ($979) -3.0% Rental Expenses (2) 2,235 1,915 320 16.7% 4,409 4,139 270 6.5% Real Estate Taxes 1,818 1,765 53 3.0% 3,605 3,542 63 1.8% Net Operating Income $12,150 $12,552 ($402) -3.2% $24,049 $25,361 ($1,312) -5.2% Multifamily(1) Revenue $10,087 $9,114 $973 10.7% $19,777 $19,131 $646 3.4% Rental Expenses (2) 3,186 2,920 266 9.1% 6,215 6,008 207 3.4% Real Estate Taxes 1,120 771 349 45.3% 2,240 1,578 662 42.0% Net Operating Income $5,781 $5,423 $358 6.6% $11,322 $11,545 ($223) -1.9% Same Store Net Operating Income (NOI) $24,694 $24,531 $163 0.7% $48,860 $50,134 ($1,274) -2.5% GAAP Adjustments (728) (3,420) 2,692 (1,632) (4,203) 2,571 $23,966 $21,111 $2,855 13.5% $47,228 $45,931 $1,297 2.8%Same Store Portfolio NOI, Cash Basis(3)
24 TOP 10 TENANTS BY ABR(1) $ IN THOUSANDS AS OF JUNE 30, 2021 (1) Excludes leases from the development and redevelopment properties that have been delivered, but not yet stabilized. (2) Excludes 9.3K SF Morgan Stanley lease at Armada Hoffler Tower expiring in 2023. Inclusive of both leases, Morgan Stanley contributes $6.0M of ABR. Office Portfolio(1) Tenant Number of Leases Lease Expiration Annualized Base Rent % of Office Portfolio Annualized Base Rent % of Total Portfolio Annualized Base Rent Morgan Stanley(2) 1 2027 $ 5,703 16.2% 3.6% Clark Nexsen 1 2029 2,692 7.7% 1.7% WeWork 1 2034 2,065 5.9% 1.3% Duke University 1 2029 1,618 4.6% 1.0% Huntington Ingalls 1 2029 1,575 4.5% 1.0% Mythics 1 2030 1,235 3.5% 0.8% Johns Hopkins Medicine 1 2023 1,180 3.4% 0.7% Pender & Coward 1 2030 950 2.7% 0.6% Kimley-Horn 1 2027 912 2.6% 0.6% Troutman Pepper Hamilton Sanders 1 2025 907 2.6% 0.6% Top 10 Total $ 18,837 53.7% 11.9% Retail Portfolio(1) Tenant Number of Leases Lease Expiration Annualized Base Rent % of Retail Portfolio Annualized Base Rent % of Total Portfolio Annualized Base Rent Harris Teeter/Kroger 5 2023 - 2035 $ 3,289 5.3% 2.1% Lowes Foods 2 2037 ; 2039 1,976 3.2% 1.2% PetSmart 5 2022 - 2025 1,461 2.4% 0.9% Amazon/Whole Foods 1 2040 1,144 1.9% 0.7% Apex Entertainment 1 2035 1,050 1.7% 0.7% Bed Bath & Beyond 2 2025 - 2027 1,047 1.7% 0.7% Burlington 2 2032 - 2033 946 1.5% 0.6% Petco 4 2022 - 2030 913 1.5% 0.6% Regal Cinemas 2 2021 - 2024 838 1.4% 0.5% Total Wine & More 2 2024 - 2027 765 1.2% 0.5% Top 10 Total $ 13,429 21.8% 8.5%
25 LEASE SUMMARY OFFICE RETAIL (1) Excludes leases from properties in development. Renewal Lease Summary GAAP Cash Quarter Number of Leases Signed Net Rentable SF Signed Leases Expiring Net Rentable SF Expiring Contractual Rent per SF Prior Rent per SF Releasing Spread Contractual Rent per SF Prior Rent per SF Releasing Spread Wtd Average Lease Term (yrs) TI & LC TI & LC per SF Q2 2021 - - - - -$ -$ - -$ -$ - - -$ -$ Q1 2021 1 4,152 1 4,152 23.95 23.56 1.6% 24.00 25.46 -5.7% 2 27,960 6.73 Q4 2020 2 14,745 1 3,024 24.81 22.66 9.5% 24.00 25.35 -5.3% 4 206,383 14.00 Q3 2020 - - 1 13,316 - - - - - - - - - Office Renewal Total 3 18,897 3 20,492 $24.62 $22.86 7.7% $24.00 $25.38 -5.4% 3.90 $234,343 $12.40 New Lease Summary(1) Quarter Number of Leases Signed Net Rentable SF Signed Cash Contractual Rent per SF Wtd Average Lease Term (yrs) TI & LC TI & LC per SF Q2 2021 1 1,700 29.50$ 3 12,583$ $7.40 ` Q1 2021 1 1,455 23.50 2 4,871 3.35 Q4 2020 2 4,032 25.47 7 238,691 59.20 Q3 2020 2 8,984 24.98 7 525,540 58.50 New Office Total 6 16,171 $25.44 5.89 $781,685 $48.34 Renewal Lease Summary GAAP Cash Quarter Number of Leases Signed Net Rentable SF Signed Leases Expiring Net Rentable SF Expiring Contractual Rent per SF Prior Rent per SF Releasing Spread Contractual Rent per SF Prior Rent per SF Releasing Spread Weighted Average Lease Term (yrs) TI & LC TI & LC per SF Q2 2021 15 89,973 13 87,253 $18.12 $16.78 8.0% $18.13 $16.95 6.9% 5 $208,544 $2.32 Q1 2021 8 21,317 9 22,717 23.78 22.22 7.0% 23.62 23.16 2.0% 4 117,685 5.52 Q4 2020 20 119,351 14 109,544 15.16 15.87 -4.5% 15.00 16.07 -6.7% 7 832,241 6.97 Q3 2020 16 138,355 7 32,336 16.92 16.33 3.6% 17.40 16.55 5.1% 5 98,170 0.71 Retail Renewal Total 59 368,996 43 251,850 $17.04 $16.63 2.4% $17.16 $16.88 1.7% 5.71 $1,256,640 $3.41 New Lease Summary(1) Quarter Number of Leases Signed Net Rentable SF Signed Cash Contractual Rent per SF Weighted Average Lease Term (yrs) TI & LC TI & LC per SF Q2 2021 11 55,683 $16.05 9 $3,029,735 $54.41 Q1 2021 7 27,260 19.10 8 612,116 22.45 Q4 2020 10 71,888 16.13 9 1,505,862 20.95 Q3 2020 4 8,425 18.73 5 87,499 10.39 New Retail Total 32 163,256 $16.73 8.70 $5,235,212 $32.07
26 OFFICE LEASE EXPIRATIONS AS OF JUNE 30, 2021 (1) Excludes leases from properties in development and delivered, but not yet stabilized. Upcoming Expirations Over 20,000 Square Feet Through Dec. 2023 Tenant Property Expiration Month Square Footage Expiring (1) Status Day & Zimmerman Armada Hoffler Tower Apr-2022 23,267 In Negotiation Johns Hopkins Medicine Thames Street Wharf Apr-2023 46,233 Upcoming Expirations Over 20,000 Square Feet Through Dec. 2023 Year Number of Leases Expiring Square Footage of Leases Expiring (1) % Portfolio Net Rentable Square Feet Annualized Base Rent (1) % of Portfolio Annualized Base Rent Annualized Base Rent per Leased Square Foot Available - 46,138 3.5% -$ - -$ M-T-M 4 1,623 0.1% 45,279 0.1% 27.90 2021 8 19,745 1.5% 533,452 1.5% 27.02 2022 11 48,532 3.7% 1,337,398 3.8% 27.56 2023 14 104,247 8.0% 2,844,686 8.1% 27.29 2024 12 142,077 10.9% 3,560,052 10.1% 25.06 2025 18 142,117 10.9% 4,288,920 12.2% 30.18 2026 9 46,540 3.6% 1,193,574 3.4% 25.65 2027 6 256,477 19.7% 7,524,531 21.4% 29.34 2028 9 79,761 6.1% 2,287,913 6.5% 28.68 2029 7 242,709 18.7% 6,343,321 18.0% 26.14 2030 6 107,801 8.3% 3,099,548 8.8% 28.75 2031 1 1,317 0.1% 37,535 0.1% 28.50 Thereafter 1 62,098 4.9% 2,065,379 6.0% 33.26 Total / Weighted Average 106 1,301,182 100.0% $35,161,588 100.0% 28.02$
27 RETAIL LEASE EXPIRATIONS AS OF JUNE 30, 2021 (1) Excludes leases from properties in development and delivered, but not yet stabilized. Upcoming Expirations Over 20,000 Square Feet Through 2023 Tenant Property Expiration Square Footage Expiring (1) Status BI-LO Socastee Commons Jun-2021 46,673 Terminated0 0 1/0/1900Regal Cinemas Columbus Village II Dec-2021 51,545 In Negotiation0 0 1/0/1900 - PetSmart Broad Creek Shopping Center Jan-2022 20,114 In Negotiation0 0 Jun-2021 46,673 PetSmart Southgate Square Jan-2022 25,950 In Negotiation0 0 Jun-2021 46,673 TJ Maxx Red Mill Commons Mar-2022 30,000 0 0 Michaels Red Mill Commons Jul-2022 23,753 0 0 Food Lion Broad Creek Shopping Center Aug-2022 33,000 0 0 Home Depot North Point Center Jan-2023 120,000 0 0 Golf Galaxy Wendover Village Jun-2023 24,946 0 0 Harris Teeter North Point Center Aug-2023 57,590 0 0 TJ Maxx Wendover Village Oct-2023 24,903 Year Number of Leases Expiring Square Footage of Leases Expiring (1) % Portfolio Net Rentable Square Feet Annualized Base Rent (1) % of Portfolio Annualized Base Rent Annualized Base Rent per Leased Square Foot Available - 196,693 5.3% - - -$ M-T-M 1 2,400 0.1% 54,816 0.1% 22.84 2021 25 147,847 4.0% 1,743,438 2.8% 11.79 2022 67 281,025 7.6% 4,702,587 7.6% 16.73 2023 65 425,630 11.5% 6,868,805 11.1% 16.14 2024 82 396,123 10.7% 7,689,993 12.4% 19.41 2025 85 604,754 16.3% 8,519,110 13.8% 14.09 2026 66 345,204 9.3% 6,784,524 11.0% 19.65 2027 28 198,627 5.4% 3,917,988 6.3% 19.73 2028 22 57,860 1.6% 1,517,049 2.5% 26.22 2029 24 104,871 2.8% 2,209,015 3.6% 21.06 2030 37 227,981 6.1% 5,050,952 8.2% 22.16 2031 27 197,967 5.3% 3,889,719 6.3% 19.65 Thereafter 25 522,508 14.0% 8,888,008 14.3% 17.01 Total / Weighted Average 554 3,709,490 100.0% $61,836,004 100.0% 17.60$
28 $5,565 $1,183 $2,341 $340 $1,701 Total Deferral Agreements Collected Written Off Abated Outstanding Balance⁽¹⁾⁽²⁾ COVID-19 DEFERRALS(1) AS OF JUNE 30, 2021 $ IN THOUSANDS (1) Excludes 2 Regal Cinemas leases. (2) Deferrals expected to be collected in 2021 & 2022 are $762 and $421, respectively.
29 APPENDIX DEFINITIONS & RECONCILIATIONS Town Center Virginia Beach, VA
30 D E F I N I T I O N S FUNDS FROM OPERATIONS: We calculate Funds From Operations (“FFO”) in accordance with the standards established by the National Association of Real Estate Investment Trusts (“Nareit”). Nareit defines FFO as net income (loss) (calculated in accordance with accounting principles generally accepted in the United States (“GAAP”)), excluding depreciation and amortization related to real estate, gains or losses from the sale of certain real estate assets, gains and losses from change in control, and impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity. FFO is a supplemental non-GAAP financial measure. Management uses FFO as a supplemental performance measure because it believes that FFO is beneficial to investors as a starting point in measuring our operational performance. Specifically, in excluding real estate related depreciation and amortization and gains and losses from property dispositions, which do not relate to or are not indicative of operating performance, FFO provides a performance measure that, when compared period-over-period, captures trends in occupancy rates, rental rates and operating costs. Other equity REITs may not calculate FFO in accordance with the Nareit definition as we do, and, accordingly, our FFO may not be comparable to such other REITs’ FFO. NET OPERATING INCOME: We calculate Net Operating Income (“NOI”) as property revenues (base rent, expense reimbursements, termination fees and other revenue) less property expenses (rental expenses and real estate taxes). Other REITs may use different methodologies for calculating NOI, and accordingly, our NOI may not be comparable to such other REITs’ NOI. NOI is not a measure of operating income or cash flows from operating activities as measured by GAAP and is not indicative of cash available to fund cash needs. As a result, NOI should not be considered an alternative to cash flows as a measure of liquidity. We consider NOI to be an appropriate supplemental measure to net income because it assists both investors and management in understanding the core operations of our real estate business. To calculate NOI on a cash basis, we adjust NOI to exclude the net effects of straight-line rent and the amortization of lease incentives and above/below market rents. NORMALIZED FUNDS FROM OPERATIONS: We calculate Normalized Funds From Operations (“Normalized FFO") as FFO calculated in accordance with the standards established by Nareit, adjusted for acquisition, development and other pursuit costs, gains or losses from the early extinguishment of debt, impairment of intangible assets and liabilities, mark- to-market adjustments on interest rate derivatives, provision for unrealized credit losses, amortization of right-of-use assets attributable to finance leases, severance related costs, and other non-comparable items. Management believes that the computation of FFO in accordance to Nareit’s definition includes certain items that are not indicative of the results provided by the Company’s operating portfolio and affect the comparability of the Company’s period-over-period performance. Our calculation of Normalized FFO differs from Nareit's definition of FFO. Other equity REITs may not calculate Normalized FFO in the same manner as us, and, accordingly, our Normalized FFO may not be comparable to other REITs' Normalized FFO.
31 D E F I N I T I O N S ADJUSTED FUNDS FROM OPERATIONS: We calculate Adjusted Funds From Operations (“AFFO”) as Normalized FFO adjusted for the impact of non-cash stock compensation, tenant improvement, leasing commission and leasing incentive costs associated with second generation rental space, capital expenditures, non-cash interest expense, proceeds from the sale of a purchase option (in excess of amounts recognized in net income), straight-line rents, cash ground rent payments for finance leases, the amortization of leasing incentives and above (below) market rents and proceeds from government development grants. Management believes that AFFO provides useful supplemental information to investors regarding our operating performance as it provides a consistent comparison of our operating performance across time periods and allows investors to more easily compare our operating results with other REITs. However, other REITs may use different methodologies for calculating AFFO or similarly entitled FFO measures and, accordingly, our AFFO may not always be comparable to AFFO or other similarly entitled FFO measures of other REITs. ADJUSTED EBITDA: We calculate Adjusted EBITDA as net income (loss) (calculated in accordance with GAAP), excluding interest expense, income taxes, depreciation and amortization, gains (or losses) from sales of depreciable operating property, impairment of real estate assets, debt extinguishment losses, non-cash stock compensation and mark-to-market adjustments on interest rate derivates, other one time adjustments including non-recurring bad debt and termination fees. Management believes Adjusted EBITDA is useful to investors in evaluating and facilitating comparisons of our operating performance between periods and between REITs by removing the impact of our capital structure (primarily interest expense) and asset base (primarily depreciation and amortization) from our operating results along with other non-comparable items. CORE EBITDA: We calculate Core EBITDA as Adjusted EBITDA, excluding certain items, including, but not limited to, the impact of redevelopment and development pipeline projects that are still in lease-up. We generally consider a property to be in lease-up until the earlier of (i) the quarter after which the property reaches 80% occupancy or (ii) the thirteenth quarter after the property receives its certificate of occupancy. Management believes that Core EBITDA provides useful supplemental information to investors regarding our reoccurring operating performance as it provides a consistent comparison of our operating performance across time periods and allows investors to more easily compare our operating results with other REITs. However, other REITs may use different methodologies for calculating Core EBITDA or similarly entitled measures and, accordingly, our Core EBITDA may not always be comparable to Core EBITDA or other similarly entitled measures of other REITs. CORE DEBT: We calculate Core Debt as our total debt, excluding loans associated with our development pipeline, cash & cash equivalents, and restricted cash.
32 D E F I N I T I O N S SAME STORE PORTFOLIO: We define same store properties as those that we owned and operated and that were stabilized for the entirety of both periods compared. We generally consider a property to be stabilized upon the earlier of: (i) the quarter after the property reaches 80% occupancy or (ii) the thirteenth quarter after the property receives its certificate of occupancy. Additionally, any property that is fully or partially taken out of service for the purpose of redevelopment is no longer considered stabilized until the redevelopment activities are complete, the asset is placed back into service, and the stabilization criteria above are again met. A property may also be fully or partially taken out of service as a result of a disposition, depending on the significance of the portion of the property disposed. Finally, any property classified as Held for Sale is taken out of service for the purpose computing same store operating results. The following table shows the properties included in the same store and non-same store portfolio for the comparative periods presented.
33 S A M E S T O R E V S . N O N - S A M E S T O R E Same Store Non-Same Store Same Store Non-Same Store Same Store Non-Same Store Same Store Non-Same Store Retail Properties Retail Properties (Continued) 249 Central Park Retail X X South Retail X X Apex Entertainment X X South Square X X Broad Creek Shopping Center X X Southgate Square X X Broadmoor Plaza X X Southshore Shops X X Brooks Crossing (Retail) X X Studio 56 Retail X X Columbus Village X X Tyre Neck Harris Teeter X X Columbus Village II X X Wendover Village X X Commerce Street Retail X X Office Properties Courthouse 7-Eleven X X 4525 Main Street X X Delray Beach Plaza X X Armada Hoffler Tower X X Dimmock Square X X Brooks Crossing (Office) X X Fountain Plaza Retail X X One City Center X X Greentree Shopping Center X X One Columbus X X Hanbury Village X X Thames Street Wharf X X Harrisonburg Regal X X Two Columbus X X Lexington Square X X Wills Wharf X X Market at Mill Creek X X Multifamily Properties Marketplace at Hilltop X X 1405 Point X X Nexton Square X X Edison Apartments X X North Hampton Market X X Encore Apartments X X North Point Center X X Greenside Apartments X X Parkway Centre X X Hoffler Place X X Parkway Marketplace X X Johns Hopkins Village X X Patterson Place X X Liberty Apartments X X Perry Hall Marketplace X X Premier Apartments X X Premier Retail X X Smith’s Landing X X Providence Plaza X X Summit Place X X Red Mill Commons X X The Cosmopolitan X X Sandbridge Commons X X The Residences at Annapolis Junction X X Socastee Commons X X Six Months Ended 6/30/2021 to 2020 Three Months Ended 6/30/2021 to 2020 Three Months Ended 6/30/2021 to 2020 Six Months Ended 6/30/2021 to 2020
34 R E C O N C I L I A T I O N O F A D J U S T E D E B I T D A , C O R E E B I T D A , A N D C O R E D E B T ( 1 ) $ IN THOUSANDS (1) See definitions in appendix. (2) Adjusted for the depreciation and interest expense attributable to noncontrolling interests in consolidated investments. (3) Excludes non-recurring items. (4) Bad debt resulting from Company’s decision to terminate two defaulted Regal Cinemas leases. (5) Adjusts bad debt to an annualized $3 million – Management’s Estimates. (6) Excludes GAAP Adjustments. (7) Interest expense has been adjusted for the current period and for prior periods to include interest expense relating to finance leases. (8) Includes the unannualized mezzanine loan prepayment premium of $2.4M. (9) Includes the unannualized gain of sale on the non-operating parcel of $0.3M. Three months ended 6/30/2021 3/31/2021 12/31/2020 9/30/2020 6/30/2020 Net income attributable to common stockholders and OP unitholders $5,568 $3,122 $1,851 $8,651 $11,178 Excluding: Depreciation and amortization 17,285 18,066 17,678 (2) 14,131 (2) 13,644 Gain on real estate dispositions - (3,717) - (3,612) (2,776) Impairment of real estate assets 83 3,039 - - - Income tax provision (benefit) (461) (19) (63) (28) 65 Interest expense (7) 8,418 7,975 8,044 7,478 7,132 Change in fair value of derivatives and other (314) (393) (294) (318) 6 Preferred dividends 2,887 2,887 2,887 2,220 1,175 Non-recurring bad debt - - - 1,100 (4) 450 Mezzanine loan prepayment premium (2,359) Unrealized credit loss provision (release) 388 (55) 29 (33) (117) Non-cash stock compensation 423 1,017 471 456 421 Adjusted EBITDA(3) $31,918 $31,922 $30,603 $30,045 $31,178 Development/Redevelopment: Premier Retail - (221) (202) (223) (207) Wills Wharf (819) (839) (678) (633) - The Cosmopolitan Apartments - - - (981) (878) Summit Place - - - (388) - Total Development (819) (1,060) (880) (2,225) (1,085) Dispositions completed intra-quarter - (111) - (80) (1,351) Acquisitions completed intra-quarter - (336) (961) (75) - Core EBITDA $31,099 $30,415 $28,762 $27,665 $28,742 Annualized Core EBITDA $126,756 (8) $121,915 (9) $115,046 $110,658 $114,968 Total debt(6) $963,885 $975,099 $962,812 $885,359 $956,726 (Less) Development/Redevelopment Premier Retail - (8,208) (8,241) (8,250) (8,250) Wills Wharf (61,235) (60,831) (59,044) (57,585) (53,660) Solis Gainesville (1,258) - - - - The Cosmopolitan Apartments - - - (43,110) (43,309) Summit Place - - - (34,615) (32,289) Total Development (62,493) (69,039) (67,285) (143,560) (137,508) (Less) Net Acquisitions completed intra-quarter - (14,473) (84,375) (22,909) - (Less) Cash & restricted cash (53,242) (34,588) (50,430) (79,224) (75,111) Core Debt $848,150 $856,999 $760,722 $639,666 $744,107
35 RECONCILIATION TO PROPERTY PORTFOLIO NOI $ IN THOUSANDS (1) See appendix for the Same Store vs. Non-Same Store properties. (2) Includes expenses associated with the Company’s in-house asset management division. Three months ended 6/30 Six months ended 6/30 2021 2020 2021 2020 Office Same Store(1) Rental revenues $10,290 $9,829 $20,500 $20,021 Property expenses 3,527 3,273 7,011 6,793 NOI 6,763 6,556 13,489 13,228 Non-Same Store NOI (2) 642 419 1,318 247 Segment NOI $7,405 $6,975 $14,807 $13,475 Retail Same Store(1) Rental revenues $16,203 $16,232 $32,063 $33,042 Property expenses 4,053 3,680 8,014 7,681 NOI 12,150 12,552 24,049 25,361 Non-Same Store NOI (2) 1,861 1,697 3,354 4,113 Segment NOI $14,011 $14,249 $27,403 $29,474 Multifamily Same Store(1) Rental revenues $10,087 $9,114 $19,777 $19,131 Property expenses 4,306 3,691 8,455 7,586 NOI 5,781 5,423 11,322 11,545 Non-Same Store NOI (2) 3,424 726 6,692 1,460 Segment NOI $9,205 $6,149 $18,014 $13,005 Total Property Portfolio NOI $30,621 $27,373 $60,224 $55,954
36 RECONCILIATION TO GAAP NET INCOME $ IN THOUSANDS Office Retail Multifamily Total Rental Properties General Contracting & Real Estate Services Total Segment revenues 11,756$ 19,204$ 16,418$ 47,378$ 18,408$ 65,786$ Segment expenses 4,351 5,193 7,213 16,757 18,131 34,888 Net operating income 7,405$ 14,011$ 9,205$ 30,621$ 277$ 30,898$ Depreciation and amortization (17,285) General and administrative expenses (3,487) Acquisition, development and other pursuit costs (32) Impairment charges (83) Interest income 6,746 Interest expense (8,418) Unrealized credit loss provision (388) Amortization of right-of-use assets - finance leases (278) Change in fair value of derivatives and other 314 Other income 7 Income tax benefit 461 Net income 8,455$ Preferred stock dividends (2,887) Net income attributable to AHH and OP unitholders 5,568$ Six months ended 6/30/2021 Office Retail Multifamily Total Rental Properties General Contracting & Real Estate Services Total Segment revenues 23,391$ 37,459$ 32,269$ 93,119$ 53,971$ 147,090$ Segment expenses 8,584 10,056 14,255 32,895 52,406 85,301 Net operating income 14,807$ 27,403$ 18,014$ 60,224$ 1,565$ 61,789$ Depreciation and amortization (35,351) General and administrative expenses (7,508) Acquisition, development and other pursuit costs (103) Impairment charges (3,122) Gain on real estate dispositions 3,717 Interest income 10,862 Interest Expense (16,393) Unrealized credit loss provision (333) Amortization of right-of-use assets - finance leases (467) Change in fair value of derivatives and other 707 Other income 186 Income tax benefit 480 Net income 14,464$ Preferred stock dividends (5,774) Net income attributable to AHH and OP unitholders 8,690$ Three months ended 6/30/2021