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): February 10, 2022
(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 February 10, 2022, Armada Hoffler Properties, Inc. (the “Company”) issued a press release announcing its financial position as of December 31, 2021, results of operations for the three and twelve months ended December 31, 2021, and other related information. Also on February 10, 2022, 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 and twelve months ended December 31, 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 (the "Securities Act"), 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.
On February 10, 2022, the Company made available a presentation regarding its 2022 full-year guidance, which is furnished as Exhibit 99.3 to this Current Report on Form 8-K.
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, 99.2, and 99.3 hereto, shall not be deemed “filed” for purposes of Section 18 of 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, except as shall be expressly set forth by specific reference in such a filing.
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: February 10, 2022 | 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 FOURTH QUARTER AND FULL YEAR 2021 RESULTS
Net Income of less than $0.01 per Diluted Share for the Fourth Quarter
and $0.17 per Diluted Share for the Full Year
Normalized FFO of $0.27 per Diluted Share for the Fourth Quarter
and $1.07 per Diluted Share for the Full Year
Company Introduces 2022 Full-Year Normalized FFO Guidance of $1.11 to $1.15 per Diluted Share
VIRGINIA BEACH, VA, February 10, 2022 – Armada Hoffler Properties, Inc. (NYSE: AHH) today announced its results for the quarter and year ended December 31, 2021 and provided an update on current events.
Highlights include:
•Net income attributable to common stockholders and OP Unit holders of $0.4 million, or less than $0.01 per diluted share, for the quarter ended December 31, 2021 compared to $1.9 million, or $0.02 per diluted share, for the quarter ended December 31, 2020. Net income attributable to common stockholders and OP Unit holders of $13.9 million, or $0.17 per diluted share, for the year ended December 31, 2021 compared to $29.8 million, or $0.38 per diluted share, for the year ended December 31, 2020.
•Funds from operations attributable to common stockholders and OP Unit holders ("FFO") of $19.9 million, or $0.24 per diluted share, for the quarter ended December 31, 2021 compared to $19.5 million, or $0.25 per diluted share, for the quarter ended December 31, 2020. FFO of $85.4 million, or $1.05 per diluted share, for the year ended December 31, 2021 compared to $83.0 million, or $1.06 per diluted share, for the year ended December 31, 2020.
•Normalized funds from operations attributable to common stockholders and OP Unit holders ("Normalized FFO") of $21.9 million, or $0.27 per diluted share, for the quarter ended December 31, 2021 compared to $19.9 million, or $0.25 per diluted share, for the quarter ended December 31, 2020. Normalized FFO of $87.3 million, or $1.07 per diluted share, for the year ended December 31, 2021 compared to Normalized FFO of $86.2 million, or $1.10 per diluted share, for the year ended December 31, 2020.
•Introduced 2022 full-year Normalized FFO guidance in the range of $1.11 to $1.15 per diluted share, as set forth in the separate presentation that can be found on the Investors page of the Company's website, ArmadaHoffler.com. Executive management of the Company will provide further details regarding its 2022 earnings guidance during today's webcast and conference call.
•Stabilized operating property portfolio occupancy increased to 96.7% as of December 31, 2021. Office occupancy was 96.8%, retail occupancy was 96.0%, and multifamily occupancy was 97.4%.
•Positive releasing spreads on office and retail lease renewals of 8.9% on a GAAP basis and 3.6% on a cash basis during the fourth quarter and 9.0% on a GAAP basis and 4.9% on a cash basis during 2021.
•Same Store Net Operating Income ("NOI") increased 4.7% on a GAAP basis and 7.9% on a cash basis compared to the quarter ended December 31, 2020, and 2.5% on a GAAP basis and 6.3% on a cash basis compared to the year ended December 31, 2020.
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•Increased quarterly cash dividend from an annualized amount of $0.44 to $0.68 during 2021, representing an increase of 54.5%.
•Completed the disposition of student housing asset Johns Hopkins Village for $75M.
•Commenced construction of a mixed-use development project, Southern Post in Roswell, Georgia in the fourth quarter of 2021.
•Completed the acquisition of Class A+ mixed-use Exelon Building in Baltimore's Harbor Point during the first quarter of 2022. The features a 444,000 square feet of Class A office space, 103 multifamily units, 38,500 square feet of retail space, and 750 parking spaces, which will complement the Company's existing Harbor Point portfolio and development.
"Coming off of a year of outperforming our original guidance by 7%, 2022 is a year where our focus is to continue growing NAV through materially increasing the quality of portfolio NOI, accretive acquisitions, and multifamily development deliveries,” said Lou Haddad, President & CEO. “We anticipate that our activities over the course of 2022 will build a solid case for expansion of our multiple while we continue to ramp earnings and dividends over the next few years."
Financial Results
The fourth quarter changes in net income, FFO and Normalized FFO attributable to common stockholders and OP Unit holders as compared to the fourth quarter of 2020 were positively impacted by higher property operating income due to acquisitions and developments and improved same-store performance and were negatively impacted by lower gross profit on the construction segment due to less third party revenue and higher interest expense. Additionally, the fourth quarter changes in net income and FFO attributable to common stockholders and OP Unit holders as compared to the fourth quarter of 2020 were negatively impacted by the loss on extinguishment of debt and positively impacted by changes in fair value of interest rate derivatives. Furthermore the fourth quarter net income attributable to common stockholders and OP Unit holders as compared to the fourth quarter of 2020 was negatively impacted by impairment charges recognized on the two Charleston student housing properties and positively impacted by higher gain on real estate dispositions, which was primarily caused by the $14.4 million gain on sale of Johns Hopkins Village multifamily property in 2021.
Full year net income, FFO and Normalized FFO attributable to common stockholders and OP Unit holders as compared to 2020 were positively impacted by higher property operating income due to acquisitions and developments and improved same-store performance. Net income, FFO and Normalized FFO attributable to common stockholders and OP Unit holders as compared to 2020 were negatively impacted by lower gross profit on the construction segment due to less third party revenue, lower interest income from mezzanine lending activities, higher interest expense, and higher preferred stock dividends due to the issuance of additional preferred stock during 2020. Additionally, full year net income and FFO attributable to common stockholders and OP Unit holders as compared to 2020 were negatively impacted by loss on extinguishment of debt and positively impacted by mark-to market gains on interest rate derivatives due to higher forward London Inter-Bank Offered Rate ("LIBOR") projections. Furthermore the full year net income attributable to common stockholders and OP Unit holders as compared to 2020 was negatively impacted by impairment recognized on two Charleston student housing properties and was positively impacted by higher gain on real estate dispositions, which was primarily caused by the $14.4 million gain on sale of Johns Hopkins Village multifamily property in 2021.
Operating Performance
At the end of the year, the Company’s retail, office, and multifamily core operating property portfolios were 96.0%, 96.8%, and 97.4% occupied, respectively.
Total third-party construction contract backlog was $215.5 million at the end of the year.
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Balance Sheet and Financing Activity
As of December 31, 2021, the Company had $957.4 million of total debt outstanding, including $5.0 million outstanding under its revolving credit facility and $205.0 million outstanding under its senior unsecured term loan facility. Total debt outstanding excludes unamortized GAAP fair value adjustments and deferred financing costs. Approximately 56% of the Company’s debt had fixed interest rates or was subject to interest rate swaps as of December 31, 2021. After considering LIBOR and Secured Overnight Financing Rate interest rate caps with strike prices at or below 50 basis points, 96% of the Company’s debt is now fixed or hedged.
Outlook
The Company is introducing its 2022 full-year Normalized FFO guidance in the range of $1.11 to $1.15 per diluted share, as set forth in the separate presentation that can be found on the Investors page of the Company's website, ArmadaHoffler.com. The following table outlines the Company's assumptions along with Normalized FFO per diluted share estimates for 2022. The Company's executive management will provide further details regarding its 2022 earnings guidance during today's webcast and conference call.
Full-year 2022 Guidance [1] | Expected Ranges | |||||||||||||
Total NOI | $146.4M | $147.4M | ||||||||||||
Construction Segment Gross Profit | $7.2M | $8.3M | ||||||||||||
G&A Expenses | $15.8M | $16.3M | ||||||||||||
| Mezzanine Interest Income | $14.6M | $15.0M | ||||||||||||
Interest Expense[2] | $37.9M | $38.6M | ||||||||||||
Normalized FFO per diluted share [3] | $1.11 | $1.15 | ||||||||||||
[1] Includes the following assumptions:
•Acquisition of Exelon building, located in Baltimore’s Harbor Point, which closed on January 14, 2022
•Disposition of two student housing assets in Charleston for $80M during the second quarter of 2022
•Interest expense, net of interest rate caps, based on the Forward LIBOR Curve ending 2022 at 1%
•Acquisition targets up to $100M, closing during the second half of 2022
•Begin funding new $20M preferred equity loan for Solis City Park multifamily project during the first quarter of 2022
•Interlock Commercial mezzanine loan paid down by $14M during the first quarter, then fully paid off in early 2023
•Opportunistic sale of common stock through the ATM program
[2] Includes the 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 non-cash 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 on the Investors page at ArmadaHoffler.com.
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Webcast and Conference Call
The Company will host a webcast and conference call on Thursday, February 10, 2022 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, 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 Thursday, March 10, 2022 by dialing 844-512-2921 (domestic) or 412-317-6671 (international) and entering the pass code 13726027.
About Armada Hoffler Properties, Inc.
Armada Hoffler Properties, Inc. (NYSE: AHH) is a vertically-integrated, self-managed real estate investment trust ("REIT") with over four decades of experience developing, building, acquiring, and managing high-quality, institutional-grade office, retail, and multifamily properties located primarily in the Mid-Atlantic and Southeastern United States. In addition to developing and building properties for its own account, the Company also provides development and general contracting construction services to third-party clients. Founded in 1979 by Daniel A. Hoffler, the Company has elected to be taxed as a REIT for U.S. federal income tax purposes.
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 mezzanine program, the Company’s construction and development business, including backlog and timing of deliveries, financing activities, as well as acquisitions, dispositions and the Company’s financial outlook, guidance 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. The Company expressly disclaims any obligation or undertaking to update or revise any forward-looking statement contained herein, to reflect any change in the Company's expectations with regard thereto, or any other change in events, conditions or circumstances on which any such statement is based, except to the extent otherwise required by applicable law.
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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 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. FFO should not be used as a measure of our liquidity, nor is it indicative of funds available to fund our cash needs, including our ability to pay dividends or service indebtedness. Also, FFO should not be used as a supplement to or substitute for cash flow from operating activities computed in accordance with GAAP.
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 non-cash unrealized credit losses, amortization of right-of-use assets attributable to finance leases, severance related costs, and other non-comparable items.
NOI is the measure used by the Company’s chief operating decision-maker to assess segment performance. The Company calculates NOI as property revenues (base rent, expense reimbursements, termination fees and other revenue) less property expenses (rental expenses and real estate taxes). NOI is not a measure of operating income or cash flows from operating activities as measured in accordance with 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. Not all companies calculate NOI in the same manner. The Company considers NOI to be an appropriate supplemental measure to net income because it assists both investors and management in understanding the core operations of the Company’s real estate and construction businesses. 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.
For reference, as an aid in understanding the Company’s computation of NOI, NOI Cash Basis, FFO and Normalized FFO, a reconciliation of net income calculated in accordance with GAAP to NOI, NOI Cash Basis, FFO and Normalized FFO has been included at the end of this release.
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ARMADA HOFFLER PROPERTIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
| December 31, | |||||||||||
| 2021 | 2020 | ||||||||||
| (Unaudited) | |||||||||||
| ASSETS | |||||||||||
| Real estate investments: | |||||||||||
| Income producing property | $ | 1,658,609 | $ | 1,680,943 | |||||||
| Held for development | 6,294 | 13,607 | |||||||||
| Construction in progress | 72,535 | 63,367 | |||||||||
| 1,737,438 | 1,757,917 | ||||||||||
| Accumulated depreciation | (285,814) | (253,965) | |||||||||
| Net real estate investments | 1,451,624 | 1,503,952 | |||||||||
| Real estate investments held for sale | 80,751 | 1,165 | |||||||||
| Cash and cash equivalents | 35,247 | 40,998 | |||||||||
| Restricted cash | 5,196 | 9,432 | |||||||||
| Accounts receivable, net | 29,576 | 28,259 | |||||||||
| Notes receivable, net | 126,429 | 135,432 | |||||||||
| Construction receivables, including retentions, net | 17,865 | 38,735 | |||||||||
| Construction contract costs and estimated earnings in excess of billings | 243 | 138 | |||||||||
| Equity method investment | 12,685 | 1,078 | |||||||||
| Operating lease right-of-use assets | 23,493 | 32,760 | |||||||||
| Finance lease right-of-use assets | 46,989 | 23,544 | |||||||||
| Acquired lease intangible assets | 62,038 | 58,154 | |||||||||
| Other assets | 45,927 | 43,324 | |||||||||
| Total Assets | $ | 1,938,063 | $ | 1,916,971 | |||||||
| LIABILITIES AND EQUITY | |||||||||||
| Indebtedness, net | $ | 917,556 | $ | 963,845 | |||||||
| Liabilities related to assets held for sale | 41,364 | — | |||||||||
| Accounts payable and accrued liabilities | 29,589 | 23,900 | |||||||||
| Construction payables, including retentions | 31,166 | 49,821 | |||||||||
| Billings in excess of construction contract costs and estimated earnings | 4,881 | 6,088 | |||||||||
| Operating lease liabilities | 31,648 | 41,659 | |||||||||
| Finance lease liabilities | 46,160 | 17,954 | |||||||||
| Other liabilities | 55,876 | 56,902 | |||||||||
| Total Liabilities | 1,158,240 | 1,160,169 | |||||||||
| Total Equity | 779,823 | 756,802 | |||||||||
| Total Liabilities and Equity | $ | 1,938,063 | $ | 1,916,971 | |||||||
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ARMADA HOFFLER PROPERTIES, INC.
CONDENSED CONSOLIDATED INCOME STATEMENTS
(in thousands, except per share amounts)
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||
| Revenues | ||||||||||||||||||||||||||
| Rental revenues | $ | 49,461 | $ | 44,648 | $ | 192,140 | $ | 166,488 | ||||||||||||||||||
| General contracting and real estate services revenues | 20,463 | 53,863 | 91,936 | 217,146 | ||||||||||||||||||||||
| Total revenues | 69,924 | 98,511 | 284,076 | 383,634 | ||||||||||||||||||||||
| Expenses | ||||||||||||||||||||||||||
| Rental expenses | 11,653 | 11,053 | 46,494 | 38,960 | ||||||||||||||||||||||
| Real estate taxes | 5,538 | 4,810 | 21,852 | 18,136 | ||||||||||||||||||||||
| General contracting and real estate services expenses | 19,750 | 52,071 | 88,100 | 209,472 | ||||||||||||||||||||||
| Depreciation and amortization | 16,616 | 17,740 | 68,853 | 59,972 | ||||||||||||||||||||||
| Amortization of right-of-use assets - finance leases | 277 | 146 | 1,022 | 586 | ||||||||||||||||||||||
| General and administrative expenses | 3,653 | 3,523 | 14,610 | 12,905 | ||||||||||||||||||||||
| Acquisition, development and other pursuit costs | 1 | 29 | 112 | 584 | ||||||||||||||||||||||
| Impairment charges | 18,256 | 461 | 21,378 | 666 | ||||||||||||||||||||||
| Total expenses | 75,744 | 89,833 | 262,421 | 341,281 | ||||||||||||||||||||||
| Gain on real estate dispositions | 15,436 | — | 19,040 | 6,388 | ||||||||||||||||||||||
| Operating income | 9,616 | 8,678 | 40,695 | 48,741 | ||||||||||||||||||||||
| Interest income | 3,829 | 3,786 | 18,457 | 19,841 | ||||||||||||||||||||||
| Interest expense | (8,685) | (8,097) | (33,905) | (31,035) | ||||||||||||||||||||||
| Loss on extinguishment of debt | (3,690) | — | (3,810) | — | ||||||||||||||||||||||
| Change in fair value of derivatives and other | 1,344 | 294 | 2,182 | (1,130) | ||||||||||||||||||||||
| Unrealized credit loss release (provision) | 508 | (29) | 792 | (256) | ||||||||||||||||||||||
| Other income (expense), net | 101 | (6) | 302 | 515 | ||||||||||||||||||||||
| Income before taxes | 3,023 | 4,626 | 24,713 | 36,676 | ||||||||||||||||||||||
| Income tax benefit | 220 | 63 | 742 | 283 | ||||||||||||||||||||||
| Net income | 3,243 | 4,689 | 25,455 | 36,959 | ||||||||||||||||||||||
| Net loss attributable to noncontrolling interests in investment entities | 5 | 49 | 5 | 230 | ||||||||||||||||||||||
| Preferred stock dividends | (2,887) | (2,887) | (11,548) | (7,349) | ||||||||||||||||||||||
| Net income attributable to common stockholders and OP Unitholders | $ | 361 | $ | 1,851 | $ | 13,912 | $ | 29,840 | ||||||||||||||||||
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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 December 31, | Year Ended December 31, | |||||||||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||
| Net income attributable to common stockholders and OP Unitholders | $ | 361 | $ | 1,851 | $ | 13,912 | $ | 29,840 | ||||||||||||||||||
Depreciation and amortization (1) | 16,616 | 17,678 | 68,853 | 59,545 | ||||||||||||||||||||||
Gain on operating real estate dispositions (2) | (15,442) | — | (18,793) | (6,388) | ||||||||||||||||||||||
Impairment of real estate assets | 18,339 | — | 21,378 | — | ||||||||||||||||||||||
| FFO attributable to common stockholders and OP Unitholders | $ | 19,874 | $ | 19,529 | $ | 85,350 | $ | 82,997 | ||||||||||||||||||
| Acquisition, development and other pursuit costs | 1 | 29 | 112 | 584 | ||||||||||||||||||||||
| Impairment of intangible assets and liabilities | (83) | 461 | — | 666 | ||||||||||||||||||||||
| Loss on extinguishment of debt | 3,690 | — | 3,810 | — | ||||||||||||||||||||||
| Unrealized credit loss (release) provision | (508) | 29 | (792) | 256 | ||||||||||||||||||||||
| Amortization of right-of-use assets - finance leases | 277 | 146 | 1,022 | 586 | ||||||||||||||||||||||
| Change in fair value of derivatives and other | (1,344) | (294) | (2,182) | 1,130 | ||||||||||||||||||||||
| Normalized FFO available to common stockholders and OP Unitholders | $ | 21,907 | $ | 19,900 | $ | 87,320 | $ | 86,219 | ||||||||||||||||||
| Net income attributable to common stockholders and OP Unitholders per diluted share and unit | $ | — | $ | 0.02 | $ | 0.17 | $ | 0.38 | ||||||||||||||||||
| FFO attributable to common stockholders and OP Unitholders per diluted share and unit | $ | 0.24 | $ | 0.25 | $ | 1.05 | $ | 1.06 | ||||||||||||||||||
| Normalized FFO attributable to common stockholders and OP Unitholders per diluted share and unit | $ | 0.27 | $ | 0.25 | $ | 1.07 | $ | 1.10 | ||||||||||||||||||
| Weighted-average common shares and units - diluted | 82,280 | 79,171 | 81,445 | 78,309 | ||||||||||||||||||||||
________________________________________
| (1) The adjustment for depreciation and amortization for the year ended December 31, 2020 excludes $0.4 million of depreciation attributable to the Company's joint venture partners. | ||
| (2) The adjustment for gain on operating real estate dispositions for the year ended December 31, 2021 excludes the gain on sale of easement rights on a non-operating parcel and gain on sale of non-operating land parcel. | ||
8
ARMADA HOFFLER PROPERTIES, INC.
RECONCILIATION OF NET INCOME TO SAME STORE NOI, CASH BASIS
(in thousands) (unaudited)
| Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||
Office Same Store(1) | ||||||||||||||||||||||||||
| Same Store NOI, Cash Basis | $ | 6,412 | $ | 6,234 | $ | 25,614 | $ | 24,777 | ||||||||||||||||||
GAAP Adjustments (2) | 124 | 314 | 838 | 1,583 | ||||||||||||||||||||||
| Same Store NOI | 6,536 | 6,548 | 26,452 | 26,360 | ||||||||||||||||||||||
Non-Same Store NOI (3) | 519 | 524 | 2,387 | 1,224 | ||||||||||||||||||||||
| Segment NOI | 7,055 | 7,072 | 28,839 | 27,584 | ||||||||||||||||||||||
Retail Same Store (4) | ||||||||||||||||||||||||||
| Same Store NOI, Cash Basis | 13,091 | 12,248 | 47,264 | 44,352 | ||||||||||||||||||||||
GAAP Adjustments (2) | 382 | 933 | 844 | 3,326 | ||||||||||||||||||||||
| Same Store NOI | 13,473 | 13,181 | 48,108 | 47,678 | ||||||||||||||||||||||
Non-Same Store NOI (3) | 1,916 | 321 | 9,536 | 6,541 | ||||||||||||||||||||||
| Segment NOI | 15,389 | 13,502 | 57,644 | 54,219 | ||||||||||||||||||||||
Multifamily Same Store (5) | ||||||||||||||||||||||||||
| Same Store NOI, Cash Basis | 5,910 | 5,075 | 16,808 | 15,242 | ||||||||||||||||||||||
GAAP Adjustments (2) | 222 | 165 | 731 | 571 | ||||||||||||||||||||||
| Same Store NOI | 6,132 | 5,240 | 17,539 | 15,813 | ||||||||||||||||||||||
Non-Same Store NOI (3) | 3,694 | 2,971 | 19,772 | 11,776 | ||||||||||||||||||||||
| Segment NOI | 9,826 | 8,211 | 37,311 | 27,589 | ||||||||||||||||||||||
| Total Property NOI | 32,270 | 28,785 | 123,794 | 109,392 | ||||||||||||||||||||||
| General contracting & real estate services gross profit | 713 | 1,792 | 3,836 | 7,674 | ||||||||||||||||||||||
| Depreciation and amortization | (16,616) | (17,740) | (68,853) | (59,972) | ||||||||||||||||||||||
| General and administrative expenses | (3,653) | (3,523) | (14,610) | (12,905) | ||||||||||||||||||||||
| Acquisition, development and other pursuit costs | (1) | (29) | (112) | (584) | ||||||||||||||||||||||
| Impairment charges | (18,256) | (461) | (21,378) | (666) | ||||||||||||||||||||||
| Gain (loss) on real estate dispositions, net | 15,436 | — | 19,040 | 6,388 | ||||||||||||||||||||||
| Interest income | 3,829 | 3,786 | 18,457 | 19,841 | ||||||||||||||||||||||
| Interest expense | (8,685) | (8,097) | (33,905) | (31,035) | ||||||||||||||||||||||
| Loss on extinguishment of debt | (3,690) | — | (3,810) | — | ||||||||||||||||||||||
| Unrealized credit loss release (provision) | 508 | (29) | 792 | (256) | ||||||||||||||||||||||
| Amortization of right-of-use assets - finance leases | (277) | (146) | (1,022) | (586) | ||||||||||||||||||||||
| Change in fair value of derivatives and other | 1,344 | 294 | 2,182 | (1,130) | ||||||||||||||||||||||
| Other income (expense), net | 101 | (6) | 302 | 515 | ||||||||||||||||||||||
| Income tax benefit | 220 | 63 | 742 | 283 | ||||||||||||||||||||||
| Net income | 3,243 | 4,689 | 25,455 | 36,959 | ||||||||||||||||||||||
| Net loss attributable to noncontrolling interest in investment entities | 5 | 49 | 5 | 230 | ||||||||||||||||||||||
| Preferred stock dividends | (2,887) | (2,887) | (11,548) | (7,349) | ||||||||||||||||||||||
| Net income attributable to AHH and OP unitholders | $ | 361 | $ | 1,851 | $ | 13,912 | $ | 29,840 | ||||||||||||||||||
9
________________________________________
| (1) Office same-store portfolio for the three and twelve months ended December 31, 2021 and 2020 excludes Wills Wharf. | ||
| (2) GAAP Adjustments include adjustments for straight-line rent, termination fees, deferred rent, recoveries of deferred rent, and amortization of lease incentives. | ||
| (3) Includes expenses associated with the Company's in-house asset management division. | ||
| (4) Retail same-store portfolio for the three and twelve months ended December 31, 2021 and 2020 excludes Delray Beach Plaza, Greenbrier Square, Overlook Village, and Premier Retail. In addition, retail same store results exclude the seven-property retail portfolio that was disposed in May 2020 (Alexander Pointe, Bermuda Crossroads, Gainsborough Square, Harper Hill Commons, Indian Lakes Crossing, Renaissance Square, and Stone House Square), Oakland Marketplace, Socastee Commons, and Courthouse 7-11, each of which were disposed in 2021. Additionally, retail same-store portfolio for the twelve months ended December 31, 2021 and 2020 excludes Apex Entertainment and Nexton Square. | ||
| (5) Multifamily same-store portfolio for the three and twelve months ended December 31, 2021 and 2020 excludes The Residences at Annapolis Junction, Edison Apartments, Johns Hopkins Village, Hoffler Place, and Summit Place. Additionally, multifamily same-store portfolio for the twelve months ended December 31, 2021 and 2020 excludes The Cosmopolitan. | ||
Contact:
Michael P. O’Hara
Armada Hoffler Properties, Inc.
Chief Financial Officer and Treasurer
Email: MOHara@ArmadaHoffler.com
Phone: (757) 366-6684
10
1 Exelon Building, Harbor Point Baltimore
2 T A B L E O F C O N T E N T S Forward-Looking Statements Corporate Profile Highlights 2022 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 and Preferred Equity 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 Appendix – Definitions & Reconciliations Same Store vs. Non-Same Store Reconciliation to Core EBITDA Capital Expenditures 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 32 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 February 10, 2022, which has been furnished as Exhibit 99.1 to our Form 8-K filed on February 10, 2022. 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 Bank of America Merrill Lynch James Feldman (646) 855-5808 james.feldman@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 Stifel Stephen Manaker (212) 271-3716 manakers@stifel.com Jefferies Peter Abramowitz (212) 336-7241 pabramowitz@jefferies.com Raymond James & Associates Bill Crow (727) 567-2594 bill.crow@raymondjames.com
5 HIGHLIGHTS • Net income attributable to common stockholders and OP Unit holders of $0.4 million, or less than $0.01 per diluted share, for the quarter ended December 31, 2021 compared to $1.9 million, or $0.02 per diluted share, for the quarter ended December 31, 2020. Net income attributable to common stockholders and OP Unit holders of $13.9 million, or $0.17 per diluted share, for the year ended December 31, 2021 compared to $29.8 million, or $0.38 per diluted share, for the year ended December 31, 2020. • Funds from operations attributable to common stockholders and OP Unit holders ("FFO") of $19.9 million, or $0.24 per diluted share, for the quarter ended December 31, 2021 compared to $19.5 million, or $0.25 per diluted share, for the quarter ended December 31, 2020. FFO of $85.4 million, or $1.05 per diluted share, for the year ended December 31, 2021 compared to $83.0 million, or $1.06 per diluted share, for the year ended December 31, 2020. • Normalized funds from operations attributable to common stockholders and OP Unit holders ("Normalized FFO") of $21.9 million,or $0.27 per diluted share, for the quarter ended December 31, 2021 compared to $19.9 million, or $0.25 per diluted share, for the quarter ended December 31, 2020. Normalized FFO of $87.3 million, or $1.07 per diluted share, for the year ended December 31, 2021 compared to Normalized FFO of $86.2 million, or $1.10 per diluted share, for the year ended December 31, 2020. • Introduced 2022 full-year Normalized FFO guidance in the range of $1.11 to $1.15 per diluted share, as set forth in the separate presentation that can be found on the Investors page of the Company's website, ArmadaHoffler.com. Executive management of the Company willprovide further details regarding its 2022 earnings guidance during today's webcast and conference call. • Stabilized operating property portfolio occupancy increased to 96.7% as of December 31, 2021. Office occupancy was 96.8%, retail occupancy was 96.0%, and multifamily occupancy was 97.4%. • Positive releasing spreads on office and retail lease renewals of 8.9% on a GAAP basis and 3.6% on a cash basis during the fourth quarter and 9.0% on a GAAP basis and 4.9% on a cash basis during 2021. • Same Store Net Operating Income ("NOI") increased 4.7% on a GAAP basis and 7.9% on a cash basis compared to the quarter ended December 31, 2020, and 2.5% on a GAAP basis and 6.3% on a cash basis compared to the year ended December 31, 2020. • Increased quarterly cash dividend from an annualized amount of $0.44 to $0.68 during 2021, representing an increase of 54.5%.Completed the disposition of student housing asset Johns Hopkins Village for $75M. • Commenced construction of a mixed-use development project, Southern Post in Roswell, Georgia in the fourth quarter of 2021. • Completed the acquisition of Class A+ mixed-use Exelon Building in Baltimore's Harbor Point during the first quarter of 2022. The features a 444,000 square feet of Class A office space, 103 multifamily units, 38,500 square feet of retail space, and 750 parking spaces, which will complement the Company's existing Harbor Point portfolio and development.
6 2022 OUTLOOK & ASSUMPTIONS LOW HIGH TOTAL NOI $146.4 $147.4 CONSTRUCTION SEGMENT GROSS PROFIT $7.2 $8.3 G&A EXPENSES $15.8 $16.3 INTEREST INCOME $14.6 $15.0 INTEREST EXPENSE(1) $37.9 $38.6 NORMALIZED FFO PER DILUTED SHARE $1.11 $1.15 GUIDANCE ASSUMPTIONS (1) Includes the interest expense on finance leases. $ IN MILLIONS • Acquisition of Exelon building, located in Baltimore’s Harbor Point, which closed on January 14, 2022 • Disposition of two student housing assets in Charleston for $80M during the second quarter of 2022 • Interest expense, net of interest rate caps, based on the Forward LIBOR Curve ending 2022 at 1% • Acquisition targets up to $100M, closing during the second half of 2022 • Begin funding new $20M preferred equity loan for Solis City Park multifamily project during the first quarter of 2022 • Interlock Commercial mezzanine loan paid down by $14M during the first quarter, then fully paid off in early 2023 • Opportunistic sale of common stock through the ATM program
7 SUMMARY INFORMATION $ IN THOUSANDS, EXCEPT PER SHARE (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) (5) Total occupancy weighted by annualized base rent. Conventional: Student Housing: 3Q21 97.4% 97.5% 2Q21 96.6% 83.5% 4Q21 97.6% 96.7% 1Q21 95.8% 85.0% Three months ended OPERATIONAL METRICS 12/31/2021 9/30/2021 6/30/2021 3/31/2021 Net income attributable to common stockholders and OP unitholders $361 $4,861 $5,568 $3,122 Net income per diluted share attributable to common stockholders and OP unitholders $0.00 $0.06 $0.07 $0.04 Normalized FFO attributable to common stockholders and OP unitholders 21,907 21,518 23,320 20,575 Normalized FFO per diluted share attributable to common stockholders and OP unitholders $0.27 $0.26 $0.29 $0.26 Annualized dividend yield 4.47% 5.09% 4.82% 4.78% Core debt / Annualized core EBITDA 6.5x 6.9x 6.7x 7.0x Fixed charge coverage ratio 2.3x 2.3x 2.4x 2.4x CAPITALIZATION Common shares outstanding 63,012 61,324 60,992 59,894 Operating Partnership units outstanding 20,633 20,853 20,853 20,853 Common shares and Operating Partnership units outstanding 83,645 82,177 81,845 80,747 Market price per common share $15.22 $13.37 $13.29 $12.54 Common equity capitalization 1,273,077 1,098,707 1,087,720 1,012,568 Preferred equity capitalization 171,085 171,085 171,085 171,085 Total equity capitalization $1,444,162 $1,269,792 $1,258,805 $1,183,653 Total debt(1) 957,387 1,017,410 963,885 975,099 Total capitalization 2,401,549 2,287,202 2,222,690 2,158,752 Less: cash (40,443) (33,453) (53,242) (34,588) Total enterprise value $2,361,106 $2,253,749 $2,169,448 $2,124,164 STABILIZED PORTFOLIO OCCUPANCY Retail (2) 96.0% 95.2% 94.7% 93.9% Office(2) 96.8% 96.9% 96.5% 97.2% Multifamily(3)(4) 97.4% 97.4% 92.2% 92.2% Weighted Average(5) 96.7% 96.4% 94.1% 94.0% PORTFOLIO METRICS (INCLUDING NON-STABILIZED) Net Operating Income (NOI) $32,270 $31,300 $30,621 $29,603 Total Number of Properties 56 58 57 57 Total Rentable Square Feet (RSF) 5,696,665 5,693,551 5,337,669 5,337,657 Retail Portfolio Net Operating Income $15,389 $14,853 $14,011 $13,392 Number of Properties 37 38 37 37 Net Rentable Square Feet 4,067,355 4,064,391 3,709,490 3,709,478 Office Portfolio Net Operating Income $7,055 $6,977 $7,405 $7,402 Number of Properties 8 8 8 8 Net Rentable Square Feet 1,629,310 1,629,160 1,628,179 1,628,179 Multifamily Portfolio Net Operating Income $9,826 $9,470 $9,205 $8,809 Number of Properties 11 12 12 12 Units 2,344 2,344 2,344 2,344 Beds 615 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 12/31/2021. (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 12/31/2021 Trailing 12 Months Office(3) Retail Multifamily Total General Contracting Gross Profit $3,836 Stable Portfolio Portfolio NOI (2) $7,511 $14,785 $9,811 $32,107 Non-Property Assets(4) Unstabilized Properties NOI (645) - - (645) As of 12/31/2021 Signed Leases Not Yet Occupied or In Free Rent Period 58 703 114 875 Cash and Retricted Cash $40,443 Net Deferrals and Recoveries (31) (219) (36) (286) Accounts Receivable 29,576 Stable Portfolio NOI $6,893 $15,269 $9,889 $32,051 Notes Receivable, Including Mezzanine Investments (5) 126,180 Intra-Quarter Transactions Construction receivables, including retentions (5) 18,048 Net Acquisitons - - - - Acquired lease intangible assets, net 62,038 Net Dispositions - (10) (751) (761) Other Assets 46,170 Total Non-Property Assets $322,455 Annualized $27,572 $61,036 $36,552 $125,160 Liabilities(4) As of 12/31/2021 Non-Stabilized Portfolio Mortgages and Notes Payable(5) $957,387 As of 12/31/2021 Accounts Payable and Accrued Liabilities 29,589 Projects Under Development at Cost $83,000 Construction Payables, Including Retentions 31,166 Projects Delivered Not Stabilized at Cost 114,000 Other Liabilities 59,504 Projects Under Predevelopment or On Hold 10,000 Total Liabilities $1,077,646 Unconsolidated Joint Ventures 14,000 Total Non-Stabilized Portfolio $221,000 Preferred Equity Liquidation Value Management's Estimate of Land Value Series A Cumulative Redeemable Perpetual Preferred Stock $171,085 Size Estimated Value(6) Harrisonburg MF Development Opportunity 266 units $20,000-30,000/unit Common Equity As of 12/31/2021 Total common shares outstanding 63,012 Total OP units outstanding 20,633 Total Common Shares & OP Units Outstanding 83,645
9 SUMMARY BALANCE SHEET $ IN THOUSANDS 12/31/2021 12/31/2020 Assets (Unaudited) Real estate investments: Income producing property $1,658,609 $1,680,943 Held for development 6,294 13,607 Construction in progress 72,535 63,367 Accumulated depreciation (285,814) (253,965) Net real estate investments 1,451,624 1,503,952 Real estate investments held for sale 80,751 1,165 Cash and cash equivalents 35,247 40,998 Restricted cash 5,196 9,432 Accounts receivable, net 29,576 28,259 Notes receivable, net 126,429 135,432 Construction receivables, including retentions, net 17,865 38,735 Construction contract costs and estimated earnings in excess of bil l ings 243 138 Equity method investments 12,685 1,078 Operating lease right-of-use assets 23,493 32,760 Finance lease right-of-use assets 46,989 23,544 Acquired lease intangible assets 62,038 58,154 Other assets 45,927 43,324 Total Assets $1,938,063 $1,916,971 Liabilities and Equity Indebtedness, net $917,556 $963,845 Liabilities related to assets held for sale 41,364 - Accounts payable and accrued liabilities 29,589 23,900 Construction payables, including retentions 31,166 49,821 Bil l ings in excess of costs and estimated earnings 4,881 6,088 Operating lease liabilities 31,648 41,659 Finance lease liabilities 46,160 17,954 Other l iabilities 55,876 56,902 Total Liabilities 1,158,240 1,160,169 Total Equity 779,823 756,802 Total Liabilities and Equity $1,938,063 $1,916,971 As of
10 SUMMARY INCOME STATEMENT $ IN THOUSANDS, EXCEPT PER SHARE Three months ended Year ended 12/31/2021 12/31/2020 12/31/2021 12/31/2020 Revenues (Unaudited) Rental revenues $49,461 $44,648 $192,140 $166,488 General contracting and real estate services revenues 20,463 53,863 91,936 217,146 Total Revenues 69,924 98,511 284,076 383,634 Expenses Rental expenses 11,653 11,053 46,494 38,960 Real estate taxes 5,538 4,810 21,852 18,136 General contracting and real estate services expenses 19,750 52,071 88,100 209,472 Depreciation and amortization 16,616 17,740 68,853 59,972 Amortization of right-of-use assets - finance leases 277 146 1,022 586 General and administrative expenses 3,653 3,523 14,610 12,905 Acquisition, development and other pursuit costs 1 29 112 584 Impairment charges 18,256 461 21,378 666 Total Expenses 75,744 89,833 262,421 341,281 Gain (loss) on real estate dispositions 15,436 - 19,040 6,388 Operating Income 9,616 8,678 40,695 48,741 Interest income 3,829 3,786 18,457 19,841 Interest expense (8,685) (8,097) (33,905) (31,035) Loss on extinguishment of debt (3,690) - (3,810) - Change in fair value of derivatives and other 1,344 294 2,182 (1,130) Unrealized credit loss release (provision) 508 (29) 792 (256) Other income (expense), net 101 (6) 302 515 Income before taxes 3,023 4,626 24,713 36,676 Income tax benefit 220 63 742 283 Net Income $3,243 $4,689 $25,455 $36,959 Net loss attributable to noncontrolling interest in investment entities 5 49 5 230 Preferred stock dividends (2,887) (2,887) (11,548) (7,349) Net income attributable to AHH and OP unitholders $361 $1,851 $13,912 $29,840 Net income per diluted share and unit attributable to AHH and OP unitholders $0.00 $0.02 $0.17 $0.38 Weighted Average Shares & OP Units - Diluted 82,280 79,171 81,445 78,309
11 FFO, NORMALIZED FFO & ADJUSTED FFO(1) $ IN THOUSANDS, EXCEPT PER SHARE (1) See definitions in appendix. (2) Adjusted for the depreciation attributable to noncontrolling interests in consolidated investments. (3) Excludes gain/loss on non-operating parcels. (4) Related to Hoffler Place and Summit Place. (5) Related to Socastee Commons. (6) Excludes development, redevelopment, and first-generation space. (7) Includes non-cash interest expense relating to indebtedness and interest expense on finance leases. Three months ended (Unaudited) 12/31/2021 9/30/2021 6/30/2021 3/31/2021 12/31/2021 12/31/2020 Funds From Operations Net income attributable to AHH and OP unitholders $361 $4,861 $5,568 $3,122 $13,912 $29,840 Net Income per diluted share $0.00 $0.06 $0.07 $0.04 $0.17 $0.38 Depreciation and amortization 16,616 16,886 17,285 18,066 68,853 59,545 (2) Gain (loss) on dispositions of operating real estate(3) (15,442) 113 - (3,464) (18,793) (6,388) Impairment of real estate assets 18,339 (4) - - 3,039 (5) 21,378 (4)(5) - FFO $19,874 $21,860 $22,853 $20,763 $85,350 $82,997 FFO per diluted share $0.24 $0.27 $0.28 $0.26 $1.05 $1.06 Normalized FFO Acquisition, development & other pursuit costs 1 8 32 71 112 584 Loss on extinguishment of debt 3,690 120 - - 3,810 - Non cash GAAP Adjustments (314) (339) 749 134 230 1,508 Change in fair value of derivatives and other (1,344) (131) (314) (393) (2,182) 1,130 Normalized FFO $21,907 $21,518 $23,320 $20,575 $87,320 $86,219 Normalized FFO per diluted share $0.27 $0.26 $0.29 $0.26 $1.07 $1.10 Adjusted FFO Non-cash stock compensation 400 390 423 1,017 2,230 2,378 Acquisition, development & other pursuit costs (1) (8) (32) (71) (112) (584) Tenant improvements, leasing commissions, lease incentives (6) (1,212) (1,837) (1,537) (1,264) (5,850) (6,740) Property related capital expenditures (3,145) (3,457) (2,054) (1,224) (9,880) (7,203) Adjustment for mezz loan modification and exit fees (493) (493) (493) (493) (1,972) (3,795) Non-cash interest expense(7) 1,331 1,478 1,332 988 5,129 3,119 Cash ground rent payment - finance lease (624) (624) (624) (415) (2,287) (1,039) GAAP Adjustments (666) (645) (1,286) (1,707) (4,304) (9,903) AFFO $17,497 $16,322 $19,049 $17,406 $70,274 $62,452 AFFO per diluted share $0.21 $0.20 $0.23 $0.22 $0.86 $0.80 Weighted Average Common Shares Outstanding 61,646 61,083 60,409 59,422 60,647 57,328 Weighted Average Operating Partnership Units Outstanding 20,634 20,853 20,853 20,854 20,798 20,981 Total Weighted Average Common Shares and OP Units Outstanding 82,280 81,936 81,262 80,276 81,445 78,309 Year ended (Unaudited)
12 OUTSTANDING DEBT $ IN THOUSANDS (1) Includes debt subject to interest rate swap locks. (2) Subject to a LIBOR rate floor. (3) Held for sale as of 12/31/21. Debt Stated Rate Effective Rate as of 12/31/2021 Maturity Date 2022 2023 2024 2025 2026 Thereafter Outstanding as of 12/31/2021 Secured Notes Payable - Core Debt Red Mill West 4.23% 4.23% Jun-2022 $10,386 $10,386 Marketplace at Hilltop 4.42% 4.42% Oct-2022 9,706 9,706 1405 Point L+2.25% 2.35% Jan-2023 754 51,532 52,286 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 260 16,092 16,352 Fountain Plaza Retail L+1.60% 3.85% (1) Aug-2023 156 9,685 9,841 South Retail L+1.60% 3.85% (1) Aug-2023 114 7,065 7,179 Hoffler Place(3) L+2.60% 3.00% (2) Jan-2024 - 257 18,143 18,400 Summit Place(3) L+2.60% 3.00% (2) Jan-2024 - 311 22,789 23,100 One City Center L+1.85% 1.95% Apr-2024 659 691 22,734 24,084 Red Mill Central 4.80% 4.80% Jun-2024 175 175 1,838 2,188 Premier Apartments L+1.55% 1.65% Oct-2024 221 234 16,053 16,508 Premier Retail L+1.55% 1.65% Oct-2024 109 115 7,907 8,131 Red Mill South 3.57% 3.57% May-2025 327 338 351 4,502 5,518 Brooks Crossing Office L+1.60% 1.70% Jul-2025 514 523 532 13,313 14,882 Market at Mill Creek L+1.55% 1.65% Jul-2025 647 647 647 11,201 13,142 North Point Center Note 2 7.25% 7.25% Sep-2025 152 163 175 1,452 1,942 Encore Apartments 2.93% 2.93% Feb-2026 540 556 573 590 22,264 24,523 4525 Main Street 2.93% 2.93% Feb-2026 693 714 735 757 28,577 31,476 Delray Beach Plaza L+3.00% 3.10% Mar-2026 579 579 579 579 11,723 14,039 Thames Street Wharf BSBY+1.30% 2.35% (1) Sep-2026 1,433 1,433 1,972 3,050 62,873 70,761 Southgate Square L+1.90% 2.10% (2) Dec-2026 829 847 864 884 23,636 27,060 Greenbrier Square 3.74% 3.74% Oct-2027 60 371 385 399 415 18,370 20,000 Lexington Square 4.50% 4.50% Sep-2028 280 293 306 320 335 12,638 14,172 Red Mill North 4.73% 4.73% Dec-2028 110 116 121 127 133 3,582 4,189 Greenside Apartments 3.17% 3.17% Dec-2029 735 759 780 808 834 28,682 32,598 The Residences at Annapolis Junction SOFR+2.66% 2.71% Nov-2030 - 147 1,753 1,809 1,860 78,806 84,375 Smith's Landing 4.05% 4.05% Jun-2035 917 956 994 1,037 1,081 11,467 16,452 Liberty Apartments 5.66% 5.66% Nov-2043 322 341 361 382 404 11,762 13,572 Edison Apartments 5.30% 5.30% Dec-2044 364 384 405 427 450 13,896 15,926 The Cosmopolitan 3.35% 3.35% Jul-2051 847 876 906 937 968 37,556 42,090 Total - Secured Core Debt 31,889 116,307 101,903 42,574 155,553 216,759 664,985 Secured Notes Payable - Development Pipeline Wills Wharf L+2.25% 2.35% Jun-2023 - 64,288 64,288 Chronicle Mill L+3.00% 3.25% (2) May-2024 Gainesvil le Apartments L+3.00% 3.75% (2) Aug-2024 - - 18,114 18,114 Total - Development Pipeline - 64,288 18,114 - - - 82,402 Total Secured Notes Payable 31,889 180,595 120,017 42,574 155,553 216,759 747,387 Unsecured Core Debt Senior Unsecured Line of Credit L+1.30%-1.85% 1.70% Jan-2024 - - 5,000 5,000 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 - - 5,000 205,000 - - 210,000 Total Notes Payable excluding GAAP Adjustments $31,889 $180,595 $125,017 $247,574 $155,553 $216,759 $957,387 GAAP Adjustments 1,669 Total Notes Payable $959,056 Debt Maturities & Principal Payments
13 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 DEBT INFORMATION(1) Interest Rates (1) Includes debt on held for sale properties. (2) Includes debt subject to interest rate swap locks. (3) Excludes GAAP adjustments. (4) Excludes debt subject to interest rate swap locks. $ IN THOUSANDS Debt Maturities Total Debt Composition Weighted Average % of Debt Interest Rate Maturity Variable vs. Fixed-rate Debt Variable-rate Debt(4) 44.2% 2.4% 3.6 Yrs Fixed-rate Debt(2)(3) 55.8% 3.4% 7.2 Yrs Fixed-rate and Hedged Debt(2)(3) 96.0% Secured vs. Unsecured Debt Unsecured Debt 21.9% 3.1% 3.0 Yrs Secured Debt 78.1% 2.9% 6.4 Yrs Total 3.0% 5.6 Yrs 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) $534,371 Fixed-rate and Hedged Debt $919,471 Total Debt(3) $957,387 % of Total Debt(3) 96.0% 3.8% 2.7% 2.6% 3.0% 2.6% 3.5% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% $0 $50,000 $100,000 $150,000 $200,000 $250,000 2022 2023 2024 2025 2026 Thereafter Debt Maturing Weighted Average Interest Rate
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 THOUSANDS SEE APPENDIX FOR CALCULATIONS AND RECONCILIATION Three months ended 12/31/2021 9/30/2021 6/30/2021 3/31/2021 12/31/2020 Net income attributable to common stockholders and OP unitholders $361 $4,861 $5,568 $3,122 $1,851 Adjusted EBITDA(1)(2)(4)(5) $33,470 $33,294 $31,918 $31,922 $30,603 Other adjustments: Development (681) (725) (819) (1,060) (880) (Less) Acquisitions/Dispositions completed intra-quarter (730) (238) - (447) (961) Core EBITDA(4) $32,059 $32,331 $31,099 $30,415 $28,762 Annualized Core EBITDA $128,236 $129,324 $126,756 (6) $121,915 (7) $115,046 Total Debt(3) $957,387 $1,017,410 $963,885 $975,099 $962,812 Adjustments to debt: (Less) Development (82,402) (72,374) (62,493) (69,039) (67,285) (Less) Net Acquisitions completed intra-quarter - (20,000) - (14,473) (84,375) (Less) Cash & restricted cash (40,443) (33,453) (53,242) (34,588) (50,430) Core Debt(4) $834,542 $891,583 $848,150 $856,999 $760,722 Core Debt/Annualized Core EBITDA 6.5x 6.9x 6.7x 7.0x 6.6x
15 Debt % of Total Principal Balance Unsecured credit facil ity 1% $5,000 Unsecured term loans 21% 205,000 Mortgages payable 78% 747,387 Total debt $957,387 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) 75% 63,012 $15.22 $959,043 Operating Partnership Units 25% 20,633 $15.22 314,034 Equity market capitalization 83,645 $1,273,077 Total capitalization $2,401,549 Financial Ratios Debt Service Coverage Ratio(1) 2.8x Fixed Charge Coverage Ratio(2) 2.3x Net Debt to Adjusted EBITDA 7.0x Core Debt to Core EBITDA 6.5x Core Debt + Preferred Equity to Core EBITDA 7.8x Debt/Total Capitalization 40% Liquidity Unencumbered Properties Cash on hand $40,443 % of Total Properties 54% Availability under credit facil ity 110,000 % of Annualized Base Rent 32% Availability under construction loans 61,896 $212,339 6.75% Series A Cumulative Redeemable Perpetual Preferred Stock (NYSE: AHHPrA) CAPITALIZATION & FINANCIAL RATIOS $ IN THOUSANDS AS OF DECEMBER 31, 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 40% Equity 60% 9% 31% 7% 40% 13%
16 PROPERTY PORTFOLIO AS OF DECEMBER 31, 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 94.0% $2,304,127 $26.53 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% $2,154,911 18.30 Broadmoor Plaza Kroger South Bend, IN 100% 1980 115,059 98.2% $1,349,460 11.95 Brooks Crossing Retail Various Small Shops Newport News, VA 100% 2016 18,349 78.3% $212,025 14.76 Columbus Village(6) Barnes & Noble, CAVA, Shake Shack Virginia Beach, VA ✓ 100% 1980/2013 62,207 95.0% $1,800,205 30.47 Columbus Village II BB&B, Regal Virginia Beach, VA ✓ 100% 1995/1996 92,061 96.7% $867,428 9.74 Commerce Street Retail Yard House Virginia Beach, VA ✓ 100% 2008 19,173 100.0% $955,820 49.85 Delray Beach Plaza (6)(9) Whole Foods Delray Beach, FL - 2021 87,207 100.0% $2,979,446 34.17 Dimmock Square Best Buy, Old Navy Colonial Heights, VA 100% 1998 106,166 75.3% $1,472,634 18.43 Fountain Plaza Retail Ruth's Chris, Nando's Virginia Beach, VA ✓ - 2004 35,961 100.0% $1,008,015 28.03 Greenbrier Square(6) Kroger, Homegoods, Dick's Sporting Goods Chesapeake, VA - 2017 260,710 95.4% $2,428,432 9.76 Greentree Shopping Center Various Small Shops Chesapeake, VA 100% 2014 15,719 92.6% $321,936 22.12 Hanbury Village(6) Harris Teeter Chesapeake, VA 100% 2006/2009 98,638 100.0% $1,991,635 20.19 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% $1,832,577 21.81 Market at Mill Creek(6) Lowes Foods Mt. Pleasant, SC - 2018 80,319 97.7% $1,825,208 23.25 Marketplace at Hilltop(6)(9) Total Wine, Panera, Chick-Fil-A Virginia Beach, VA - 2000/2001 116,953 100.0% $2,654,334 22.70 Nexton Square Various Small Shops Summerville, SC - 2020 133,608 100.0% $3,469,863 25.97 North Hampton Market PetSmart, Hobby Lobby Taylors, SC 100% 2004 114,954 100.0% $1,556,964 13.54 North Point Center(6) Harris Teeter, Home Depot, Costco Durham, NC 88% 1998/2009 494,746 100.0% $3,905,492 7.89 Overlook Village T.J. Maxx|Homegoods, Ross Asheville, NC 100% 1990 151,365 100.0% $2,194,338 14.50 Parkway Centre Publix Moultrie, GA 100% 2017 61,200 100.0% $836,604 13.67 Parkway Marketplace Rite Aid Virginia Beach, VA 100% 1998 37,804 100.0% $765,085 20.24 Patterson Place BB&B, PetSmart, DSW Durham, NC 100% 2004 160,942 95.2% $2,370,224 15.47 Perry Hall Marketplace Safeway Perry Hall, MD 100% 2001 74,251 98.0% $1,242,066 17.07 Premier Retail Will iams Sonoma, Pottery Barn Virginia Beach, VA ✓ - 2018 38,715 82.0% $1,012,014 31.87 Providence Plaza Cranfil l , Sumner & Hartzog, Chipotle Charlotte, NC 100% 2007/2008 103,118 90.5% $2,708,361 29.01 Red Mill Commons (6) Homegoods, Walgreens Virginia Beach, VA 8% 2000-2005 373,808 90.7% $6,353,714 18.74 Sandbridge Commons (6) Harris Teeter Virginia Beach, VA 100% 2015 76,650 100.0% $1,094,883 14.28 Southgate Square Burlington, PetSmart, Michaels, Conn's Colonial Heights, VA - 1991/2016 260,131 93.2% $3,375,194 13.92 South Retail lululemon, free people, CPK Virginia Beach, VA ✓ - 2002 38,515 100.0% $993,449 25.79 South Square Ross, Petco, Office Depot Durham, NC 100% 1977/2005 109,590 100.0% $1,957,049 17.86 Southshore Shops Buffalo Wild Wings Chesterfield, VA 100% 2006 40,307 78.6% $653,369 20.63 Studio 56 Retail Rocket Title, Legal Sea Foods Virginia Beach, VA ✓ 100% 2007 11,594 31.0% $94,010 26.16 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 98.8% $3,411,446 19.52 Stabilized Retail Total 37 Properties 55% 4,067,355 96.0% $66,896,225 $17.13
17 PROPERTY PORTFOLIO CONT. AS OF DECEMBER 31, 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 December 31, 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 December 31, 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 December 31, 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 December 31, 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 December 31, 2021 by (b) 4. (8) The ABR for Liberty, Cosmopolitan, Hoffler Place, Edison, and 1405 Point excludes approximately $0.2M, $0.9M, $0.3M, $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 December 31, 2021 by the number of occupied beds. 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 235,088 100.0% $7,043,627 $29.96 Armada Hoffler Tower(4)(5) AHH, Troutman Pepper, Will iams Mullen Virginia Beach, VA ✓ 100% 2002 315,916 99.3% $9,319,944 29.72 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% $2,908,605 25.57 One City Center Duke University, WeWork Durham, NC - 2019 151,599 87.6% $4,258,812 32.06 Thames Street Wharf(4) Morgan Stanley, JHU Medical Baltimore, MD - 2010 263,426 100.0% $7,493,734 28.45 Two Columbus Hazen & Sawyer, Fidelity Virginia Beach, VA ✓ 100% 2009 108,459 95.4% $2,644,244 25.55 Stabilized Office Total 7 Properties 42% 1,301,319 96.8% $35,556,640 $28.21 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 327,991 70.4% $6,624,582 $28.71 Non-Stabilized Office Total 1 Property 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 95.8% $7,953,108 $2,393 $3.17 Encore Apartments Virginia Beach, VA ✓ - 2014 286 98.3% 5,205,250 1,544 2.14 Edison Apartments (8) Richmond, VA - 2014 174 99.4% 2,902,883 1,398 2.26 Greenside Apartments Charlotte, NC - 2018 225 98.2% 4,371,398 1,648 2.23 Liberty Apartments (8) Newport News, VA - 2013 197 96.9% 3,266,997 1,426 1.94 Premier Apartments Virginia Beach, VA ✓ - 2018 131 97.7% 2,650,720 1,726 2.78 Smith's Landing(9) Blacksburg, VA - 2009 284 99.6% 5,457,429 1,607 1.69 The Cosmopolitan(8) Virginia Beach, VA ✓ - 2006 342 96.5% 8,253,518 2,084 3.14 The Residences at Annapolis Junction Annapolis Junction, MD - 2018 416 97.1% 10,227,750 2,110 2.35 Multifamily Total 9 Properties - 2,344 97.6% 50,289,053 1,832 2.39 Hoffler Place(8)(10) Charleston, SC - 2019 258 96.9% 3,818,880 1,273 4.07 Summit Place(10) Charleston, SC - 2020 357 96.6% 4,005,316 967 2.70 Student Housing Total 2 Properties - 615 96.7% 7,824,196 1,096 3.23 Total / Weighted Average Multifamily Portfolio 2,959 97.4% $58,113,249 $1,680 $2.48
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 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 244 units / 14,700 sf - 1Q21 3Q22 4Q23 $55,000 $35,100 $29,000 85% (3) Harrisonburg Apartments Harrisonburg, VA Multifamily 266 units - 2Q22 3Q24 3Q25 70,000 TBD - 100% Gainesville Apartments Gainesville, GA Multifamily 223 units 32% 3Q20 1Q22 2Q23 52,000 31,000 42,000 95% (3) Southern Post Roswell, GA Mixed-use 137 units / 137,000 sf - 4Q21 4Q23 4Q24 110,000 TBD 12,000 100% Total Projects Under Development $287,000 $66,100 $83,000 Delivered Not Stabilized Wills Wharf Baltimore, MD Office 328,000 72% 3Q18 2Q20 1Q23 $120,000 $76,000 $114,000 100% Canopy by Hilton, Transamerica, RBC, Morgan Stanley Predevelopment Ten Tryon Charlotte, NC Mixed-use TBD - TBD TBD TBD TBD TBD $10,000 80% Unconsolidated JV's T. Rowe Price Global HQ Baltimore, MD $250,000 - $13,000 50% T. Rowe Price Parcel 4 Mixed-Use Baltimore, MD 192,000 - 1,000 50% Total Unconsolidated JV's $442,000 - $14,000 see page 19 for details see page 19 for details Schedule(1) Q4 2021 YTD Capitalized Interest $403 $1,485 Capitalized Overhead $609 $2,135
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 (2) Owned by AHH JV development with Beatty Development Group 2 1 3 4 5 DEVELOPMENT PIPELINE CONT.(1) UNCONSOLIDATED JOINT-VENTURES - PREDEVELOPMENT: SUBJECT TO CHANGE $ IN THOUSANDS (1) All items are estimated based on predevelopment assumptions. (2) Acquired 90% economic interest in Exelon Building January 2022. 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 $13,000 $4-5M Parcel 4 Mixed-Use-Baltimore, MD Mixed-Use/Garage 312 units / 10,000 sf retail / 1,250 parking spaces 1Q22 1Q24 TBD 192,000 50% 30,000 1,000 4M Total Joint-Ventures $442,000 $60,000 $14,000 $8-9M 6
20 MEZZANINE/PREFERRED EQUITY INVESTMENTS (1) Represents estimates that may change as the development process proceeds. (2) Preferred equity with economic terms and accounting consistent with a loan receivable. The Interlock Atlanta, GA $ IN THOUSANDS AS OF DECEMBER 31, 2021 The Interlock Atlanta, GA Property Type Estimated Size(1) % Leased or LOI Initial Occupancy Loan Maturity Interest Rate Loan Balance QTD Interest Income Outstanding Investments The Interlock (Expected $14M paydown 1Q22) Atlanta, GA Mixed-use 300,000 sf 90% 1Q21 4Q24 15% $95,379 $3,125 Solis Nexton(2) Summerville, SC Multifamily 320 units NA 4Q22 4Q26 11% 23,567 594 Solis City Park(2) Charlotte, NC Multifamily 250 units NA 3Q23 1Q28 13% - - Total $118,946 $3,719 Schedule(1)
21 ACQUISITIONS & DISPOSITIONS $ IN THOUSANDS (1) Includes JV interest in the property. (2) Anchor tenant vacant at time of sale. (3) Represents 100% of property value of which company owns 90% economic interest. ACQUISITIONS Properties Location Square Feet/Units Purchase Price Cash Cap Rate Purchase Date Anchor Tenants 2022 482,000 / 103 units $273,000 6.1% Exelon Building Baltimore, MD 482,000 / 103 units $273,000 (3) 6.1% 1Q22 Exelon Generation / Constellation 2021 412,075 $64,850 6.9% Greenbrier Square Chesapeake, VA 260,710 $36,500 6.3% 3Q21 Kroger, Homegoods, Dick's Sporting Goods Overlook Village Asheville, NC 151,365 $28,350 7.7% 3Q21 T.J. Maxx|Homegoods, Ross 2020 174 units 25,700 6.8% Edison Apartments Richmond, VA 174 units 25,700 6.8% 4Q20 NA 2019 757,577 208,783 7.4% 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 3,936,524 / 277 units $1,015,863 6.9% DISPOSITIONS Properties Location Square Feet/Units Sale Price Cash Cap Rate Disposition Date Anchor Tenants 2021 128,105 / 568 units $90,265 5.2% Johns Hopkins Village Baltimore, MD 568 units 75,000 5.6% 4Q21 Courthouse 7-Eleven Virginia Beach, VA 3,177 3,065 4.5% 4Q21 7-Eleven Socastee Commons Myrtle Beach, SC 57,273 3,800 NA (2) 3Q21 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 7.7% 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 124,715 30,275 5.8% Lightfoot Marketplace Will iamsburg, VA 124,715 30,275 (1) 5.8% 3Q19 Harris Teeter 2018 6,047 4,400 5.4% 2017 52,454 17,750 6.3% 2016 481,866 97,350 8.4% 2015 203,200 / 203 units 81,075 6.2% 2014 31,000 8,900 6.3% Total/Weighted Average 1,672,987 / 771 units $427,315 6.8%
22 CONSTRUCTION BUSINESS SUMMARY $ IN THOUSANDS AS OF DECEMBER 31, 2021 Holly Springs Apartments Holly Springs, NC Gross Profit Summary Q4 2021 Trailing 12 Months (Unaudited) Revenue $20,463 $91,936 Expense (19,750) (88,100) Gross Profit $713 $3,836 Highlighted Projects Location Total Contract Value Work in Place Backlog Estimated Date of Completion Adams Hill Apartments Greenville, SC $52,363 $2,301 $50,062 3Q 2023 Boulders Lakeview Apartments Richmond, VA 37,228 5,986 31,242 1Q 2023 Innsbrook Apartments & Townhomes Glen Allen, VA 53,984 114 53,870 1Q 2024 Fox Crossing Apartments Raleigh, NC 38,061 21 38,040 3Q 2023 Subtotal $181,636 $8,422 $173,214 All Other Projects 428,987 386,682 42,305 Total $610,623 $395,104 $215,519
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. Excludes student housing properties held for sale. (2) Excludes expenses associated with the Company’s in-house asset management division of $0.7M and $0.6M for the 3 months ended 12/31/2021 & 12/31/2020, respectively. (3) Excludes deferred rent collected of ($0.3M) and ($0.8M) for the three months ended 12/31/2021 & 12/31/2020, respectively. Three months ended Year ended 12/31/2021 12/31/2020 $ Change % Change 12/31/2021 12/31/2020 $ Change % Change Summary NOI: Office $6,536 $6,548 ($12) -0.2% $26,452 $26,360 $92 0.3% Retail 13,473 13,181 292 2.2% 48,108 47,678 430 0.9% Multifamily 6,132 5,240 892 17.0% 17,539 15,813 1,726 10.9% $26,141 $24,969 $1,172 4.7% $92,099 $89,851 $2,248 2.5% NOI, Cash Basis: Office $6,412 $6,234 $178 2.9% $25,614 $24,777 $837 3.4% Retail 13,091 12,248 843 6.9% 47,264 44,352 2,912 6.6% Multifamily 5,910 5,075 835 16.5% 16,808 15,242 1,566 10.3% $25,413 $23,557 $1,856 7.9% $89,686 $84,371 $5,315 6.3% Detail by Segment Office(1) Revenue $10,213 $10,167 $46 0.5% $40,965 $40,420 $545 1.3% Rental Expenses (2) 2,362 2,317 45 1.9% 9,295 9,204 91 1.0% Real Estate Taxes 1,315 1,302 13 1.0% 5,218 4,856 362 7.5% Net Operating Income $6,536 $6,548 ($12) -0.2% $26,452 $26,360 $92 0.3% Retail(1) Revenue $17,903 $17,463 $440 2.5% $64,006 $63,147 $859 1.4% Rental Expenses (2) 2,612 2,540 72 2.8% 9,039 8,619 420 4.9% Real Estate Taxes 1,818 1,742 76 4.4% 6,859 6,850 9 0.1% Net Operating Income $13,473 $13,181 $292 2.2% $48,108 $47,678 $430 0.9% Multifamily(1) Revenue $9,809 $8,970 $839 9.4% $28,727 $26,834 $1,893 7.1% Rental Expenses (2) 2,780 2,782 (2) -0.1% 8,632 8,296 336 4.1% Real Estate Taxes 897 948 (51) -5.4% 2,556 2,725 (169) -6.2% Net Operating Income $6,132 $5,240 $892 17.0% $17,539 $15,813 $1,726 10.9% Same Store Net Operating Income (NOI) $26,141 $24,969 $1,172 4.7% $92,099 $89,851 $2,248 2.5% GAAP Adjustments (728) (1,412) 684 (2,413) (5,480) 3,067 $25,413 $23,557 $1,856 7.9% $89,686 $84,371 $5,315 6.3%Same Store Portfolio NOI, Cash Basis(3)
24 TOP 10 TENANTS BY ABR(1) $ IN THOUSANDS AS OF DECEMBER 31, 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 16.0% 3.6% Clark Nexsen 1 2029 2,746 7.7% 1.7% WeWork 1 2034 2,122 6.0% 1.3% Duke University 1 2029 1,618 4.6% 1.0% Huntington Ingalls 1 2029 1,575 4.4% 1.0% Mythics 1 2030 1,235 3.5% 0.8% Johns Hopkins Medicine 1 2023 1,180 3.3% 0.7% Pender & Coward 1 2030 950 2.7% 0.6% Kimley-Horn 1 2027 930 2.6% 0.6% Troutman Pepper Hamilton Sanders 1 2025 907 2.6% 0.6% Top 10 Total $ 18,966 53.4% 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 6 2023 - 2035 $ 3,739 5.6% 2.3% Lowes Foods 2 2037 ; 2039 1,976 3.0% 1.2% Dick's Sporting Goods 1 2032 1,508 2.3% 0.9% TJ Maxx/Homegoods 5 2023 - 2027 1,504 2.2% 0.9% PetSmart 5 2025 - 2027 1,461 2.2% 0.9% Amazon/Whole Foods 1 2040 1,144 1.7% 0.7% Ross Dress For Less 3 2025 - 2027 1,122 1.7% 0.7% Apex Entertainment 1 2035 1,050 1.6% 0.7% Bed, Bath, & Beyond 2 2025 - 2027 1,047 1.6% 0.7% Regal Cinemas 2 2021 - 2024 985 1.5% 0.6% Top 10 Total $ 15,536 23.4% 9.6%
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 Q4 2021 1 23,267 2 1,410 $27.04 $24.97 8.3% $27.50 $28.60 -3.8% 5.3 $515,175 $22.14 Q3 2021 1 1,400 4 16,017 25.86 27.22 -5.0% 25.00 28.90 -13.5% 3.0 2,153 1.54 Q2 2021 - - - - - - 0.0% - - 0.0% - - - Q1 2021 1 4,152 1 4,152 23.95 23.56 1.6% 24.00 25.46 -5.7% 2.0 27,960 6.73 Office Renewal Total 3 28,819 7 21,579 $26.54 $24.88 6.7% $26.87 $28.16 -4.6% 4.7 $545,288 $18.92 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 Q4 2021 1 1,428 $26.00 10.0 $45,198 $31.65 ` Q3 2021 3 10,895 26.71 5.9 466,981 42.86 Q2 2021 1 1,700 29.50 3.3 12,583 7.40 Q1 2021 1 1,455 23.50 2.1 4,871 3.35 New Office Total 6 15,478 $26.65 5.6 $529,633 $34.22 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 Q4 2021 16 126,328 9 74,902 $17.22 $15.79 9.0% $17.44 $16.45 6.0% 4.8 $166,153 $1.32 Q3 2021 10 43,479 7 21,163 24.96 22.04 13.3% 24.86 22.94 8.4% 5.0 86,764 2.00 Q2 2021 15 89,973 13 87,253 18.12 16.78 8.0% 18.13 16.95 6.9% 5.0 208,544 2.32 Q1 2021 8 21,317 9 22,717 23.78 22.22 7.0% 23.62 23.16 2.0% 4.5 117,685 5.52 Retail Renewal Total 49 281,097 38 206,035 $19.20 $17.56 9.4% $19.28 $18.12 6.4% 4.9 $579,146 $2.06 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 Q4 2021 17 61,922 $18.27 6.8 $1,267,703 $20.47 Q3 2021 10 34,384 19.09 8.5 898,397 26.13 Q2 2021 11 55,683 16.05 9.4 3,029,735 54.41 Q1 2021 7 27,260 19.10 8.4 612,116 22.45 New Retail Total 45 179,249 $17.86 8.2 $5,807,951 $32.40
26 OFFICE LEASE EXPIRATIONS AS OF DECEMBER 31, 2021 (1) Excludes leases from properties in development and delivered, but not yet stabilized. Upcoming Expirations Over 20,000 Square Feet Through Dec. 2023 Year Number of Leases Expiring Square Footage of Leases Expiring (1) % Portfolio Net Rentable Square Feet Annualized Base Rent (1) % of Portfolio Annualized Base Rent Annualized Base Rent per Leased Square Foot Available - 41,090 3.2% -$ - -$ M-T-M 5 2,743 0.2% 88,399 0.2% 32.23 2021 - - - - - - 2022 9 20,125 1.5% 538,718 1.5% 26.77 2023 15 108,764 8.4% 2,994,826 8.4% 27.54 2024 12 142,077 10.9% 3,593,408 10.1% 25.29 2025 19 143,517 11.0% 4,335,349 12.2% 30.21 2026 11 54,089 4.2% 1,392,328 3.9% 25.74 2027 9 287,267 22.1% 8,426,765 23.7% 29.33 2028 10 83,637 6.4% 2,398,245 6.7% 28.67 2029 8 245,366 18.9% 6,471,877 18.2% 26.38 2030 6 107,801 8.3% 3,120,172 8.8% 28.94 2031 1 1,317 0.1% 37,535 0.1% 28.50 Thereafter 2 63,526 4.8% 2,159,018 6.2% 33.99 Total / Weighted Average 107 1,301,319 100.0% $35,556,640 100.0% $28.21 Renewals During the Quarter Over 20,000 Square Feet Tenant Property Square Footage Prior Expiration New Expiration Day & Zimmerman Armada Hoffler Tower 23,267 Apr-2022 Jul-2027 Upcoming Expirations Over 20,000 Square Feet Through Dec. 2023 Renewals During the Quarter Over 20,000 Square Feet Tenant Property Expiration Month Square Footage Expiring (1) Status Johns Hopkins Medicine Thames Street Wharf Apr-2023 46,233 Expected to Vacate
27 RETAIL LEASE EXPIRATIONS AS OF DECEMBER 31, 2021 (1) Excludes leases from properties in development and delivered, but not yet stabilized. (2) Regal lease expires 12/31/21, lease is now month to month. (3) Renewed subsequent to quarter end. Year Number of Leases Expiring Square Footage of Leases Expiring (1) % Portfolio Net Rentable Square Feet Annualized Base Rent (1) % of Portfolio Annualized Base Rent Annualized Base Rent per Leased Square Foot Available - 161,502 4.0% -$ - -$ M-T-M 2 5,900 0.1% 138,081 0.2% 23.40 2021⁽²⁾ 1 51,545 1.3% 267,428 0.4% 5.19 2022 50 142,407 3.5% 2,804,504 4.2% 19.69 2023 67 442,307 10.9% 6,619,706 9.9% 14.97 2024 87 459,871 11.3% 8,638,283 12.9% 18.78 2025 84 635,648 15.6% 8,933,617 13.4% 14.05 2026 77 385,367 9.5% 7,544,643 11.3% 19.58 2027 47 366,768 9.0% 6,219,838 9.3% 16.96 2028 30 88,907 2.2% 2,641,323 3.9% 29.71 2029 29 113,829 2.8% 2,419,430 3.6% 21.25 2030 40 239,821 5.9% 5,304,423 7.9% 22.12 2031 29 206,988 5.1% 3,935,595 5.9% 19.01 Thereafter 33 766,495 18.8% 11,429,354 17.1% 14.91 Total / Weighted Average 576 4,067,355 100.0% $66,896,225 100.0% $17.13 Upcoming Expirations Over 20,000 Square Feet Through 2023 Renewals During the Quarter Over 20,000 Square Feet Tenant Property Expiration Square Footage Expiring (1) Status Regal Cinemas Columbus Village II Dec-2021 51,545 Month to Month Michaels Red Mill Commons Jul-2022 23,753 Renewed(3) - 5 yearsJo-Ann Fabric Jan-2023 Home Depot North Point Center Jan-2023 120,000 Renewed(3) - 10 yearsJun-2023 Jo-Ann Fabric Overlook Village Jan-2023 22,835 North Point Center Harris Teeter Golf Galaxy Wendover Village Jun-2023 24,946 TJ Maxx Oct-2023 Harris Teeter North Point Center Aug-2023 57,590 0 Grand Total Feb-2023 TJ Maxx Wendover Village Oct-2023 24,903 Renewals During the Quarter Over 20,000 Squ re Feet Tenant Property Square Footage Prior Expiration New Expiration TJ Maxx Red Mill Commons 30,000 Mar-2022 Mar-2027 Food Lion Broad Creek 33,000 Aug-2022 Aug-2027 PetSmart Southgate Square 25,950 Jan-2022 Jan-2027
28 APPENDIX DEFINITIONS & RECONCILIATIONS Town Center Virginia Beach, VA
29 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 non-cash 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.
30 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, recognition of mezzanine loan exit fees 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, mark-to-market adjustments on interest rate derivates, mezzanine loan prepayment premiums, and 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.
31 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.
32 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 Sandbridge Commons X X Apex Entertainment X X South Retail X X Broad Creek Shopping Center X X South Square X X Broadmoor Plaza X X Southgate Square X X Brooks Crossing (Retail) X X Southshore Shops X X Columbus Village X X Studio 56 Retail X X Columbus Village II X X Tyre Neck Harris Teeter X X Commerce Street Retail X X Wendover Village X X Delray Beach Plaza X X Office Properties Dimmock Square X X 4525 Main Street X X Fountain Plaza Retail X X Armada Hoffler Tower X X Greenbrier Square X X Brooks Crossing (Office) X X Greentree Shopping Center X X One City Center X X Hanbury Village X X One Columbus X X Harrisonburg Regal X X Thames Street Wharf X X Lexington Square X X Two Columbus X X Market at Mill Creek X X Wills Wharf X X Marketplace at Hilltop X X Multifamily Properties Nexton Square X X 1405 Point X X North Hampton Market X X Edison Apartments X X North Point Center X X Encore Apartments X X Overlook Village X X Greenside Apartments X X Parkway Centre X X Hoffler Place X X Parkway Marketplace X X Liberty Apartments X X Patterson Place X X Premier Apartments X X Perry Hall Marketplace X X Smith’s Landing X X Premier Retail X X Summit Place X X Providence Plaza X X The Cosmopolitan X X Red Mill Commons X X The Residences at Annapolis Junction X X Year Ended 12/31/2021 to 2020 Three Months Ended 12/31/2021 to 2020 Three Months Ended 12/31/2021 to 2020 Year Ended 12/31/2021 to 2020
33 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) Interest expense has been adjusted for the current period and for prior periods to include interest expense relating to finance leases. (5) Excludes GAAP Adjustments. (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. Three months ended 12/31/2021 9/30/2021 6/30/2021 3/31/2021 12/31/2020 Net income attributable to common stockholders and OP unitholders $361 $4,861 $5,568 $3,122 $1,851 Excluding: Depreciation and amortization 16,616 16,886 17,285 18,066 17,678 (2) Loss (gain) on real estate dispositions (15,436) 113 - (3,717) - Impairment of real estate assets 18,339 - 83 3,039 - Income tax provision (benefit) (220) (42) (461) (19) (63) Interest expense(4) 8,685 8,827 8,418 7,975 8,044 Change in fair value of derivatives and other (1,344) (131) (314) (393) (294) Preferred dividends 2,887 2,887 2,887 2,887 2,887 Loss on extinguishment of debt 3,690 120 - - - Mezzanine loan prepayment premium - - (2,359) - - Unrealized credit loss provision (release) (508) (617) 388 (55) 29 Non-cash stock compensation 400 390 423 1,017 471 Adjusted EBITDA(3) $33,470 $33,294 $31,918 $31,922 $30,603 Development: Premier Retail - - - (221) (202) Wills Wharf (681) (725) (819) (839) (678) Total Development (681) (725) (819) (1,060) (880) Dispositions completed intra-quarter (730) - - (111) - Acquisitions completed intra-quarter - (238) - (336) (961) Core EBITDA $32,059 $32,331 $31,099 $30,415 $28,762 Annualized Core EBITDA $128,236 $129,324 $126,756 (6) $121,915 (7) $115,046 Total debt(5) $957,387 $1,017,410 $963,885 $975,099 $962,812 (Less) Development Premier Retail - - - (8,208) (8,241) Wills Wharf (64,288) (62,601) (61,235) (60,831) (59,044) Solis Gainesville (18,114) (9,773) (1,258) - - Total Development (82,402) (72,374) (62,493) (69,039) (67,285) (Less) Net Acquisitions completed intra-quarter - (20,000) - (14,473) (84,375) (Less) Cash & restricted cash (40,443) (33,453) (53,242) (34,588) (50,430) Core Debt $834,542 $891,583 $848,150 $856,999 $760,722 Core Debt/Annualized Core EBITDA 6.5x 6.9x 6.7x 7.0x 6.6x
34 CAPITAL EXPENDITURES QUARTER TO DATE(1) YEAR TO DATE(1) $ IN THOUSANDS AS OF DECEMBER 31, 2021 (1) Excludes activity related to held for sale, acquired and/or disposed properties. Leasing Commissions Lease Incentive Tenant Improvements Land Improvements Building Improvements Furniture Fixtures & Equipment Total Second Generation Capex Retail $513 $47 $474 $257 $878 $ - $2,169 Office 40 - 134 3 707 - 884 Multifamily 4 - - 5 1,076 219 1,304 Total Portfolio $557 $47 $608 $265 $2,661 $219 $4,357 Leasing Commissions Lease Incentive Tenant Improvements Land Improvements Building Improvements Furniture Fixtures & Equipment Total Second Generation Capex Retail $2,006 $47 $2,318 $1,050 $2,320 $ - $7,741 Office 214 - 992 22 1,893 - 3,121 Multifamily 274 - - 116 3,411 1,068 4,869 Total Portfolio $2,494 $47 $3,310 $1,188 $7,624 $1,068 $15,731
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 12/31 Year ended 12/31 2021 2020 2021 2020 Office Same Store(1) Rental revenues $10,213 $10,167 $40,965 $40,420 Property expenses 3,677 3,619 14,513 14,060 NOI 6,536 6,548 26,452 26,360 Non-Same Store NOI (2) 519 524 2,387 1,224 Segment NOI $7,055 $7,072 $28,839 $27,584 Retail Same Store(1) Rental revenues $17,903 $17,463 $64,006 $63,147 Property expenses 4,430 4,282 15,898 15,469 NOI 13,473 13,181 48,108 47,678 Non-Same Store NOI (2) 1,916 321 9,536 6,541 Segment NOI $15,389 $13,502 $57,644 $54,219 Multifamily Same Store(1) Rental revenues $9,809 $8,970 $28,727 $26,834 Property expenses 3,677 3,730 11,188 11,021 NOI 6,132 5,240 17,539 15,813 Non-Same Store NOI (2) 3,694 2,971 19,772 11,776 Segment NOI $9,826 $8,211 $37,311 $27,589 Total Property Portfolio NOI $32,270 $28,785 $123,794 $109,392
36 RECONCILIATION TO GAAP NET INCOME $ IN THOUSANDS Office Retail Multifamily Total Rental Properties General Contracting & Real Estate Services Total Segment revenues 12,039$ 20,890$ 16,532$ 49,461$ 20,463$ 69,924$ Segment expenses 4,984 5,501 6,706 17,191 19,750 36,941 Net operating income 7,055$ 15,389$ 9,826$ 32,270$ 713$ 32,983$ Depreciation and amortization (16,616) General and administrative expenses (3,653) Acquisition, development and other pursuit costs (1) Impairment charges (18,256) Gain (loss) on real estate dispositions 15,436 Interest income 3,829 Interest expense (8,685) Loss on extinguishment of debt (3,690) Unrealized credit loss release (provision) 508 Amortization of right-of-use assets - finance leases (277) Change in fair value of derivatives and other 1,344 Other income (expense) 101 Income tax benefit 220 Net income 3,243$ Net loss attributable to noncontrolling interest in investment entities 5 Preferred stock dividends (2,887) Net income attributable to AHH and OP unitholders 361$ Year ended 12/31/2021 Office Retail Multifamily Total Rental Properties General Contracting & Real Estate Services Total Segment revenues 47,363$ 78,572$ 66,205$ 192,140$ 91,936$ 284,076$ Segment expenses 18,524 20,928 28,894 68,346 88,100 156,446 Net operating income 28,839$ 57,644$ 37,311$ 123,794$ 3,836$ 127,630$ Depreciation and amortization (68,853) General and administrative expenses (14,610) Acquisition, development and other pursuit costs (112) Impairment charges (21,378) Gain (loss) on real estate dispositions 19,040 Interest income 18,457 Interest expense (33,905) Unrealized credit loss release (provision) 792 Amortization of right-of-use assets - finance leases (1,022) Loss on extinguishment of debt (3,810) Change in fair value of derivatives and other 2,182 Other income (expense) 302 Income tax benefit 742 Net income 25,455$ Net loss attributable to noncontrolling interest in investment entities 5 Preferred stock dividends (11,548) Net income attributable to AHH and OP unitholders 13,912$ Three months ended 12/31/2021
1CLICK TO EDIT MASTER TITLE STYLE GUIDANCE PRESENTATION 2022
2 PAGE 03 FORWARD-LOOKING STATEMENTS 04 2022 OUTLOOK & ASSUMPTIONS 05 EVOLVING PORTFOLIO GAAP NOI COMPOSITION 06 ESTIMATED NOI & FEE INCOME 07 MULTIFAMILY SEGMENT 08 OFFICE SEGMENT 09 RETAIL SEGMENT 10 DEVELOPMENT VALUE CREATION 11 ACQUISITION NOI 12 CORE LOCATIONS 13 EXELON HQ ACQUISITION 14 DEVELOPMENT DETAILS TABLE OF CONTENTS SECTION
3FORWARD-LOOKING STATEMENTS This presentation should be read in conjunction with the unaudited condensed consolidated financial statements appearing in our press release dated February 11, 2021, which has been furnished as Exhibit 99.1 to our Form 8-K filed on February 10, 2022. The Company makes statements 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”)). In particular, statements pertaining to our capital resources, portfolio performance and results of operations contain forward-looking statements. Likewise, all of our statements regarding our 2022 outlook and related assumptions, projections, anticipated growth in our funds from operations, normalized funds from operations, adjusted funds from operations, funds available for distribution and net operating income are forward-looking statements. You can identify forward-looking statements by the use of forward-looking terminology such as “believes,” “expects,” “may,” “will,” “should,” “seeks,” “intends,” “plans,” “estimates” or “anticipates” or the negative of these words and phrases or similar words or phrases which are predictions of or indicate future events or trends and which do not relate solely to historical matters. You can also identify forward-looking statements by discussions of strategy, plans or intentions. Forward-looking statements involve numerous risks and uncertainties and you should not rely on them as predictions of future events. Forward-looking statements depend on assumptions, data or methods which may be incorrect or imprecise and the Company may not be able to realize them. The Company does not guarantee that the transactions and events described will happen as described (or that they will happen at all). For further discussion of risk factors and other events that could impact our future results, please refer to the section entitled “Risk Factors” in our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”), and the documents subsequently filed by us from time to time with the SEC. 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 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) uncertainty regarding the timing of distribution and effectiveness of COVID-19 vaccines; (d) 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 (e) 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 obligation or undertaking to update or revise any forward-looking statement contained herein, to reflect any change in the Company's expectations with regard thereto, or any other change in events, conditions or circumstances on which any such statement is based, except to the extent otherwise required by applicable law. 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.
42022 OUTLOOK & ASSUMPTIONS LOW HIGH Total NOI $146.4 $147.4 Construction Segment Gross Profit $7.2 $8.3 G&A Expenses $15.8 $16.3 Interest Income $14.6 $15.0 Interest Expense(1) $37.9 $38.6 Normalized FFO Per Diluted Share $1.11 $1.15 GUIDANCE ASSUMPTIONS • Acquisition of Exelon building, located in Baltimore’s Harbor Point, which closed on January 14, 2022 • Disposition of two student housing assets in Charleston for $80M during the second quarter of 2022 • Interest expense, net of interest rate caps, based on the Forward LIBOR Curve ending 2022 at 1% • Acquisition targets up to $100M, closing during the second half of 2022 • Begin funding new $20M preferred equity loan for Solis City Park multifamily project during the first quarter of 2022 • Interlock Commercial mezzanine loan paid down by $14M during the first quarter, then fully paid off in early 2023 • Opportunistic sale of common stock through the ATM program (1) Includes the interest expense on finance leases. $ in millions
5EVOLVING PORTFOLIO GAAP NOI COMPOSITION 2021 2022 Guidance Midpoint Retail Entertainment & Mixed-Use Retail Multifamily Office Projected Property Segment NOI Fully Stabilized (4)(5) (1) Includes AHH rent and excludes expenses associated with the Company’s in house asset management division (2) Includes $100M acquisition target per 2022 guidance (3) Excludes student housing assets (4) Fully Stabilized Portfolio assumes announced pipeline is delivered and stabilized per schedule on page 10 (5) Assumes company acquired 100% interest in Parcel 4 Mixed-Use development and disposes of T. Rowe Price world headquarters 42% 6% 26% 26% 38% 6% 33% 23% 35% 6% 31% 28% $ in millions PORTFOLIO COMPOSITION(1) 2021 2022 MIDPOINT FULLY STABILIZED RETAIL(2) $51 $57 $68 ENTERTAINMENT & MIXED USE RETAIL $8 $9 $11 OFFICE $31 $50 $60 MULTIFAMILY(3) $31 $35 $54 TOTAL $121 $151 $193
6ESTIMATED NOI & FEE INCOME(1)(2) (1) Includes AHH rent elimination, $100M acquisition target per 2022 guidance, 100% NOI from Parcel 4 Mixed-Use project, excludes T. Rowe Price Global HQ (2) Excludes expenses associated with the Company’s in house asset management division (3) Based on management’s goals (4) Fully Stabilized Portfolio assumes announced pipeline is delivered and stabilized per schedule on page 10 $ in millions Excludes all student housing properties 2020 2021 2022 2023⁽³⁾ 2024⁽³⁾ Fully Stabilized Portfolio NOI $106 $121 $151 $168 $183 $193 Construction Gross Profit (net of taxes) 8 5 7 7 7 7 Mezz Income 20 18 15 8 9 9 Fee Income $28 $23 $22 $15 $16 $16 Total $134 $144 $173 $183 $199 $209 $106 $121 $151 $168 $183 $193 $20 $18 $15 $8 $9 $9 $8 $5 $7 $7 $7 $7 $0 $50 $100 $150 $200 2020 2021 2022 2023⁽³⁾ 2024⁽³⁾ Fully Stabilized Portfolio⁽⁴⁾ 92% 8% 79% 21%
7MULTIFAMILY SEGMENT 2,344 UNITS 3,629 UNITS 4Q21 STABILIZED 55% UNIT GROWTH ESTIMATED SEGMENT NOI GROWTH(1)(2) $ in millions as of 12/31/21, unless otherwise noted Excludes all student housing properties 97% occupied 10% positive 2021 YoY same store cash NOI (1) Assumes company acquires 100% of Parcel 4 mixed use building (2) Excludes expenses associated with the Company’s in house asset management division (3) Based on management’s goals (4) Fully Stabilized Portfolio assumes announced pipeline is delivered and stabilized per schedule on page 10 $31 $35 $40 $49 $54 $0 $10 $20 $30 $40 $50 $60 FY2021 FY2022 FY2023⁽³⁾ FY2024⁽³⁾ Stabilized⁽⁴⁾
8OFFICE SEGMENT ESTIMATED SEGMENT NOI GROWTH(1) 1 upcoming large office expiration(1) (April 2023) 97% occupied 3% positive Cash same store NOI in 2021 (1) Defined as any tenant over 20,000 square feet (2) Assumes T. Rowe Price global headquarters is sold upon completion (3) Based on management’s goals (4) Fully Stabilized Portfolio assumes announced pipeline is delivered and stabilized per schedule on page 10 $ in millions As of 12/31/21, unless otherwise noted 7% positive GAAP releasing spreads in 2021 NATIONALLY RECOGNIZED TOP TENANTS $31 $50 $54 $58 $60 $0 $10 $20 $30 $40 $50 $60 $70 FY2021 FY2022 FY2023⁽³⁾ FY2024⁽³⁾ Stabilized⁽⁴⁾
9RETAIL SEGMENT ESTIMATED SEGMENT NOI GROWTH(1) $ in millions As of 12/31/21, unless otherwise noted NATIONALLY RECOGNIZED TOP TENANTS (1) Includes $100M acquisition target per 2022 guidance (2) Based on management’s goals (3) Fully Stabilized Portfolio assumes announced pipeline is delivered and stabilized per schedule on page 10 $59 $66 $74 $76 $79 $0 $10 $20 $30 $40 $50 $60 $70 $80 $90 FY2021 FY2022 FY2023⁽²⁾ FY2024⁽²⁾ Stabilized⁽³⁾ 96% occupied 7% positive Cash same store NOI in 2021 (1% GAAP) 9% positive GAAP releasing spreads in 2021
10DEVELOPMENT VALUE CREATION (1) For our ownership structure, see page 18 & 19 of the 4Q21 Supplemental Financial Package (2) Timing and investment amounts are estimates and subject to change as the development process demands (3) AHH receives preferred return on investment (4) Reflects AHH portion of joint venture cost Joint Ventures Development Value PROJECT (1) PROPERTY TYPE INITIAL OCCUPANCY (2) AHH OWNERSHIP TOTAL COST (2) DEVELOPMENT Chronicle Mill Belmont, NC Multifamily 3Q22 85% (3) $55M Harrisonburg Apartments Harrisonburg, VA Multifamily 3Q24 100% $70M Gainesville Apartments Gainesville, GA Multifamily 1Q22 95% (3) $52M Southern Post Roswell, GA Multifamily / Office / Retail 4Q23 100% $110M DELIVERED NOT STABILIZED Wills Wharf Baltimore, MD Office 2Q20 100% $120M UNCONSOLIDATED JOINT VENTURE (Estimated, Subject to Change) T. Rowe Price Global HQ Baltimore, MD Office 1Q24 50% $125M (4) Parcel 4 Mixed-Use Baltimore, MD Multifamily / Garage 1Q24 50% $96M (4) Total $628M $407M $524M $221M $265M AHH Cost of Current Projects Anticipated Value of Development Projects $628M $789M
11ACQUISITION ACTIVITY 4Q20 – 1Q22 (1) Represents 100% of building value, AHH holds 90% economic interest 538,000 sf retail 444,000 sf office 693 MF units $ in millions Property Size Acquisition Date Price 2022 Est. GAAP NOI Est. Return Annapolis Junction 416 MF units 4Q20 $125 $6 5.1% Edison Apartments 174 MF units 4Q20 $26 $2 7.8% Delray Plaza Whole Foods 87K sf retail 1Q21 $42 $3 7.3% Overlook Village 151K sf retail 3Q21 $28 $2 8.6% Greenbrier Square 261K sf retail 3Q21 $37 $2 6.4% Exelon Building 444K sf office 103 MF units 39K sf retail 750 parking spaces 1Q22 $273 (1) $20 7.4% TOTAL $531 $36 6.9%
12CORE LOCATIONS Maryland Virginia North Carolina South Carolina Georgia
13EXELON HQ ACQUISITION Investment Thesis ✓ Acquisition of Exelon Building is immediately accretive to FFO ✓ Multifamily component is complimentary to adjacent Baltimore multifamily property ✓ Consistent with long-term plan of building scale in Harbor Point submarket ✓ Highly familiar with Exelon Building ‒ AHH constructed in 2016 alongside Beatty Development Group (25 year working relationship) Acquisition Details ✓ Acquisition value of $246M(1) ‒ Acquired 90% economic interest for $105M plus debt assumption(2) ‒ 10% retained by Beatty Development Group ($12mm) ‒ Refinanced $175M of note debt at BSBY 1.5% ✓ Estimated Year 1 cap rate: 7.4% GAAP, 6.1% cash Financial Features ✓ Strong credit tenant base ‒ Lead tenant - Exelon Constellation ✓ Exelon lease has 15 remaining years ‒ Contractual rent escalation of 3% annually ✓ Upside of cost synergies due to adjacent multifamily property ✓ Desirable retail location and square footage ‒ Upside from ~13,500 sf of vacant retail space (1) Excludes $12M of equity and its 10% share of related debt retained by the Beatty Development Group for a total value of $273M (2) Represents a 79% interest and an additional 11% economic interest Acquired the Exelon Building at Harbor Point, Baltimore’s premiere downtown waterfront property
14HARBOR POINT DEVELOPMENT 1 2 3 5 6 4 (1) Represents 100% of the property of which the company owns 90% economic interest AHH Owned JV Development with Beatty Development Group 1- Thames Street Wharf 263,000 office 5 - T. Rowe Price Global HQ 450,000 office 2 - 1405 Point 289 MF units 250 parking spaces 3 - Wills Wharf 328,000 office 6 - Parcel 4 Mixed-Use 312 MF units 4 - Exelon Building (1) 444,000 office 10,000 retail 103 MF units 1,250 parking spaces 38,500 retail 1,073,500 sf & 392 MF units 460,000 sf, 312 MF units, 1,500 parking
15HARBOR POINT: CONTINUED Estimated AHH Cash Equity ~$60M Ownership in JVs with Beatty Development Group 50% T. Rowe Price Global HQ Site Unconsolidated Joint Ventures Off Balance Sheet Parcel 4 Mixed-Use Expected Annual Cash Return(1) ~10% UNCONSOLIDATED JOINT VENTURE - PREDEVELOPMENT: SUBJECT TO CHANGE 450,000 sf office 250 parking spaces $250M Estimated Cost ~$4-5M Estimated Construction Fees 312 multifamily units 10,000 sf retail 1,250 parking spaces $192M Estimated Cost ~$4M Estimated Construction Fees (1) Does not include exit profit
16TOWN CENTER OF VIRGINIA BEACH ~500,000 RETAIL SF ~800,000 OFFICE SF ~760 MULTIFAMILY 4,000+ PARKING SPOTS 1999 2021
17TOWN CENTER OF VIRGINIA BEACH Block 2 is a 1.3-acre future site for development, currently used as a surface parking lot a 5-acre retail center currently featuring Bed, Bath & Beyond with future redevelopment opportunities 1 2 Additional Development Opportunities 3 an 8-acre retail center currently featuring Regal Cinemas with future redevelopment opportunities
18GAINESVILLE APARTMENTS $52M total development cost 223 multifamily units Located an hour north of Atlanta, GA, Solis Gainesville will be a $52 million multifamily development joint-venture with our partners, Terwilliger Pappas. This 223-unit development commenced construction during the third quarter of 2020 and began delivering units during the first quarter of 2022.95% Ownership with a preferred return
19CHRONICLE MILL Chronicle Mill is an historic textile mill that will be revitalized into a mixed-use project just steps from historic downtown Belmont, NC (Charlotte MSA). The project will encompass 244 apartment units and 14,700 square feet of commercial space and is expected to begin delivery during the third quarter of 2022. $55M total development costs 244 apartment units 14,700 square feet of commercial space 85% Ownership with a preferred return
20WILLS WHARF $120M total estimated development cost ~70% leased 328,000 square feet of mixed-use hotel and class A office space THAMES STREET WHARF WILLS WHARF FUTURE T ROWE PRICE GLOBAL HQ 1405 POINT Harbor Point Baltimore, MD 100% AHH ownership Delivered in 2020 Notable Tenants Transamerica, RBC, Morgan Stanley, and Canopy by Hilton
21SOUTHERN POST - ROSWELL Roswell, GA Location 137,000 Square Feet 100% AHH Ownership Roswell Town Center is a mixed-use project expected to total 137,000 square feet that began construction in late 2021. The center will include 42,000 square feet of retail, 95,000 square feet of office, 137 multifamily units.$110M Estimated Cost
22HARRISONBURG APARTMENTS Harrisonburg Apartments is a multifamily project located within the central business district of Harrisonburg, VA and adjacent to James Madison University. The Company negotiated redevelopment rights to the property in 2021 and construction is expected to start in the second quarter of 2022. 100% AHH ownership 266 apartment units $70M total development cost estimated