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): November 8, 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 November 8, 2022, Armada Hoffler Properties, Inc. (the “Company”) issued a press release announcing its financial position as of September 30, 2022, results of operations for the three months ended September 30, 2022, and other related information. Also on November 8, 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 months ended September 30, 2022. 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 the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.
Item 7.01. Regulation FD Disclosure.
The disclosure contained in Item 2.02 is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit No. | Description | |||||||
| 104 | Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document. | |||||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| ARMADA HOFFLER PROPERTIES, INC. | ||||||||
| Date: November 8, 2022 | By: | /s/ Matthew T. Barnes-Smith | ||||||
| Matthew T. Barnes-Smith | ||||||||
| Chief Financial Officer, Treasurer and Corporate Secretary | ||||||||
Exhibit 99.1
 | PRESS RELEASE | |||||||
ARMADA HOFFLER PROPERTIES REPORTS THIRD QUARTER 2022 RESULTS
Net Income of $0.38 Per Diluted Share
Normalized FFO of $0.29 Per Diluted Share
Raised 2022 Full-Year Normalized FFO Guidance Range to $1.18 to $1.20 Per Diluted Share
Executed 78,000 SF of New Office Leases at Harbor Point and Town Center
Retail Occupancy Reached an All-Time High of 98%
Rental Rates on New Apartment Leases Increased Nearly 9%
VIRGINIA BEACH, VA, November 8, 2022 – Armada Hoffler Properties, Inc. (NYSE: AHH) today announced its results for the quarter ended September 30, 2022 and provided an update on current events.
Third Quarter and Recent Highlights:
•Net income attributable to common stockholders and OP Unit holders of $33.9 million, or $0.38 per diluted share, compared to $4.9 million, or $0.06 per diluted share, for the three months ended September 30, 2021.
•Funds from operations attributable to common stockholders and OP Unit holders ("FFO") of $22.7 million, or $0.26 per diluted share, compared to $21.9 million, or $0.27 per diluted share, for the three months ended September 30, 2021. See "Non-GAAP Financial Measures."
•Normalized funds from operations attributable to common stockholders and OP Unit holders ("Normalized FFO") of $25.8 million, or $0.29 per diluted share, compared to $21.6 million, or $0.26 per diluted share, for the three months ended September 30, 2021.
•Raised 2022 full-year Normalized FFO guidance to $1.18 to $1.20 per diluted share from the Company's previous guidance range of $1.16 to $1.20 per diluted share. This represents a 11% increase over 2021 results.
•Portfolio wide occupancy exceeded 97% for the third consecutive quarter. Retail occupancy reached an all-time high of 98%.
•Executed a new 60,000 square foot lease with Franklin Templeton at Wills Wharf, bringing the building to 91% leased.
•Executed a new 18,000 square foot office lease with Old Dominion University at the Town Center of Virginia Beach for ODU’s Institute of Data Science and Coastal Virginia Center for Cyber Innovation.
•Subsequent to the end of the third quarter, executed a new 46,000 square foot lease with Morgan Stanley at Thames Street Wharf that expands the tenant’s space to over 240,000 square feet and extends their lease term to 2035.
•Same Store net operating income ("NOI") increased 3.0% on a GAAP basis and 2.7% on a cash basis compared to the quarter ended September 30, 2021.
◦Commercial same store NOI increased 2.0% on a GAAP basis and 1.4% on a cash basis.
◦Multifamily same store NOI increased 6.5% on a GAAP and 7.0% on a cash basis.
•Positive GAAP releasing spreads during the third quarter of 10.7% for retail lease renewals and 3.3% for office lease renewals.
•Multifamily lease rates increased 7.6% during the third quarter of 2022. Rental rates on new lease trade outs increased 8.8% and rental rates on lease renewals increased 6.3%.
•Amended and restated the existing $355 million unsecured credit facility, increased the borrowing capacity of the Company’s unsecured credit facility to $550 million, with an option to expand to $1.0 billion, and extended to the terms of the revolving line of credit and term loan components to 2027 and 2028, respectively.
•Closed on the $150 million sale of The Residences at Annapolis Junction at a 4.15% cap rate.
“After raising our guidance for a 3rd consecutive quarter, our new mid-point of $1.19 per share represents an 11% increase over full year 2021 earnings, which is complemented by the 18% increase in the dividend this year,” said Louis Haddad, President & CEO. “This is wholly consistent with the data included in our initial guidance presentation from earlier this year, where we projected that NOI would, over the next few years, increase by 45% over 2021 levels as our development projects stabilize. With two multifamily development deliveries this year, a large mixed-use development enter service next year, and the 2024 deliveries of the T. Rowe Price global headquarters and 300 more luxury apartment units, we are right on track with that forecast.”
Financial Results
Net income attributable to common stockholders and OP Unit holders for the third quarter increased to $33.9 million compared to $4.9 million for the third quarter of 2021. The period-over-period change was primarily due to gains recognized on dispositions, increased property operating income due to acquisitions, developments, and improved same-store performance, increased general contracting gross profit, and changes in the fair value of interest rate derivatives. The increase was partially offset by an increase in interest expense, an increase in loss on extinguishment of debt, and a decrease in unrealized credit loss release.
FFO attributable to common stockholders and OP Unit holders for the third quarter increased to $22.7 million compared to $21.9 million for the third quarter of 2021. Normalized FFO attributable to common stockholders and OP Unit holders for the third quarter increased to $25.8 million compared to $21.6 million for the third quarter of 2021. The period-over-period changes in FFO and Normalized FFO were due to higher property operating income resulting primarily from leasing activity and property acquisitions and an increase in general contracting gross profit. These increases were partially offset by an increase in interest expense.
Operating Performance
At the end of the third quarter, the Company’s office, retail and multifamily stabilized operating property portfolios were 96.8%, 98.0% and 96.4% occupied, respectively.
Total construction contract backlog was $525.9 million at the end of the third quarter.
Balance Sheet and Financing Activity
As of September 30, 2022, the Company had $1.0 billion of total debt outstanding, including $36.0 million outstanding under its revolving credit facility. Total debt outstanding excludes GAAP adjustments. Approximately 47% of the Company’s debt had fixed interest rates or was subject to interest rate swaps as of September 30, 2022. The Company’s debt was 100% fixed or hedged as of September 30, 2022 after considering interest rate caps with strike prices at or below 300 basis points.
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Outlook
The Company raised its 2022 full-year Normalized FFO guidance range to $1.18 to $1.20 per diluted share. The following table updates the Company's assumptions underpinning its full-year guidance. 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][2] | Expected Ranges | |||||||||||||
| Total NOI | $145.2M | $146.0M | ||||||||||||
| Construction Segment Gross Profit | $7.8M | $8.4M | ||||||||||||
| G&A Expenses | $16.0M | $16.5M | ||||||||||||
| Interest Income | $14.6M | $15.0M | ||||||||||||
Interest Expense[3] | $35.4M | $36.1M | ||||||||||||
| Normalized FFO per diluted share | $1.18 | $1.20 | ||||||||||||
[1] Includes the following assumptions:
•Anticipated sale of Interlock in 2023
•Acquisition of a $26.5 million grocery anchored retail asset
•New $125 million unsecured term loan projected to close late November 2022
•Interest expense based on Forward Yield Curve, which forecasts rates ending the year at 4.4%
[2] Ranges exclude certain items per Company's Normalized FFO definition: 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, certain costs for interest rate caps designated as cash flow hedges, 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.
[3] Includes interest expense on finance leases
Supplemental Financial Information
Further details regarding operating results, properties and leasing statistics can be found in the Company’s supplemental financial package available at www.ArmadaHoffler.com.
Webcast and Conference Call
The Company will host a webcast and conference call on Tuesday, November 8, 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, www.ArmadaHoffler.com. To participate in the call, please dial 844-826-3035 (domestic) or 412-317-5195 (international). A replay of the conference call will be available through Thursday, December 8, 2022 by dialing 844-512-2921 (domestic) or 412-317-6671 (international) and entering the passcode 10171505.
About Armada Hoffler Properties, Inc.
Armada Hoffler Properties (NYSE:AHH) is a vertically-integrated, self-managed real estate investment trust ("REIT") with four decades of experience developing, building, acquiring and managing high-quality office, retail and multifamily properties located primarily in the Mid-Atlantic and Southeastern United States. The Company also provides general construction and development services to third-party clients, in addition to developing and building
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properties to be placed in their stabilized portfolio. Founded in 1979 by Daniel A. Hoffler, Armada Hoffler has elected to be taxed as a REIT for U.S. federal income tax purposes. For more information visit ArmadaHoffler.com.
Forward-Looking Statements
Certain matters within this press release are discussed using forward-looking language as specified in the Private Securities Litigation Reform Act of 1995, and, as such, may involve known and unknown risks, uncertainties and other factors that may cause the actual results or performance to differ from those projected in the forward-looking statement. These forward-looking statements may include comments relating to the current and future performance of the Company’s operating property portfolio, the Company’s development pipeline, the Company's mezzanine program, the Company’s construction and development business, including backlog and timing of deliveries and estimated costs, 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, 2021, and the other documents filed by the Company with the Securities and Exchange Commission from time to time. 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.
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, certain costs for interest
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rate caps designated as cash flow hedges, 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.
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 further in this release.
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ARMADA HOFFLER PROPERTIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
| September 30, 2022 | December 31, 2021 | |||||||||||||
| (Unaudited) | ||||||||||||||
| ASSETS | ||||||||||||||
| Real estate investments: | ||||||||||||||
| Income producing property | $ | 1,797,547 | $ | 1,658,609 | ||||||||||
| Held for development | 6,294 | 6,294 | ||||||||||||
| Construction in progress | 92,357 | 72,535 | ||||||||||||
| 1,896,198 | 1,737,438 | |||||||||||||
| Accumulated depreciation | (316,189) | (285,814) | ||||||||||||
| Net real estate investments | 1,580,009 | 1,451,624 | ||||||||||||
| Real estate investments held for sale | — | 80,751 | ||||||||||||
| Cash and cash equivalents | 54,700 | 35,247 | ||||||||||||
| Restricted cash | 4,865 | 5,196 | ||||||||||||
| Accounts receivable, net | 35,400 | 29,576 | ||||||||||||
| Notes receivable, net | 141,816 | 126,429 | ||||||||||||
| Construction receivables, including retentions, net | 47,865 | 17,865 | ||||||||||||
| Construction contract costs and estimated earnings in excess of billings | 232 | 243 | ||||||||||||
| Equity method investments | 64,470 | 12,685 | ||||||||||||
| Operating lease right-of-use assets | 23,416 | 23,493 | ||||||||||||
| Finance lease right-of-use assets | 46,155 | 46,989 | ||||||||||||
| Acquired lease intangible assets | 103,297 | 62,038 | ||||||||||||
| Other assets | 85,346 | 45,927 | ||||||||||||
| Total Assets | $ | 2,187,571 | $ | 1,938,063 | ||||||||||
| LIABILITIES AND EQUITY | ||||||||||||||
| Indebtedness, net | $ | 1,041,576 | $ | 917,556 | ||||||||||
| Liabilities related to assets held for sale | — | 41,364 | ||||||||||||
| Accounts payable and accrued liabilities | 24,301 | 29,589 | ||||||||||||
| Construction payables, including retentions | 63,376 | 31,166 | ||||||||||||
| Billings in excess of construction contract costs and estimated earnings | 15,736 | 4,881 | ||||||||||||
| Operating lease liabilities | 31,708 | 31,648 | ||||||||||||
| Finance lease liabilities | 46,409 | 46,160 | ||||||||||||
| Other liabilities | 53,551 | 55,876 | ||||||||||||
| Total Liabilities | 1,276,657 | 1,158,240 | ||||||||||||
| Total Equity | 910,914 | 779,823 | ||||||||||||
| Total Liabilities and Equity | $ | 2,187,571 | $ | 1,938,063 | ||||||||||
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ARMADA HOFFLER PROPERTIES, INC.
CONDENSED CONSOLIDATED INCOME STATEMENTS
(in thousands, except per share amounts)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||
| Revenues | ||||||||||||||||||||||||||
| Rental revenues | $ | 53,743 | $ | 49,560 | $ | 163,602 | $ | 142,679 | ||||||||||||||||||
| General contracting and real estate services revenues | 69,024 | 17,502 | 138,947 | 71,473 | ||||||||||||||||||||||
| Total revenues | 122,767 | 67,062 | 302,549 | 214,152 | ||||||||||||||||||||||
| Expenses | ||||||||||||||||||||||||||
| Rental expenses | 12,747 | 12,717 | 38,101 | 34,841 | ||||||||||||||||||||||
| Real estate taxes | 5,454 | 5,543 | 16,695 | 16,314 | ||||||||||||||||||||||
| General contracting and real estate services expenses | 66,252 | 15,944 | 133,491 | 68,350 | ||||||||||||||||||||||
| Depreciation and amortization | 17,527 | 16,886 | 54,865 | 52,237 | ||||||||||||||||||||||
| Amortization of right-of-use assets - finance leases | 278 | 278 | 833 | 745 | ||||||||||||||||||||||
| General and administrative expenses | 3,854 | 3,449 | 12,179 | 10,957 | ||||||||||||||||||||||
| Acquisition, development and other pursuit costs | — | 8 | 37 | 111 | ||||||||||||||||||||||
| Impairment charges | — | — | 333 | 3,122 | ||||||||||||||||||||||
| Total expenses | 106,112 | 54,825 | 256,534 | 186,677 | ||||||||||||||||||||||
| Gain (loss) on real estate dispositions, net | 33,931 | (113) | 53,424 | 3,604 | ||||||||||||||||||||||
| Operating income | 50,586 | 12,124 | 99,439 | 31,079 | ||||||||||||||||||||||
| Interest income | 3,490 | 3,766 | 10,410 | 14,628 | ||||||||||||||||||||||
| Interest expense | (10,345) | (8,827) | (28,747) | (25,220) | ||||||||||||||||||||||
| Loss on extinguishment of debt | (2,123) | (120) | (2,899) | (120) | ||||||||||||||||||||||
| Change in fair value of derivatives and other | 782 | 131 | 7,512 | 838 | ||||||||||||||||||||||
| Unrealized credit loss release (provision) | 42 | 617 | (858) | 284 | ||||||||||||||||||||||
| Other income (expense), net | 118 | 15 | 415 | 201 | ||||||||||||||||||||||
| Income before taxes | 42,550 | 7,706 | 85,272 | 21,690 | ||||||||||||||||||||||
| Income tax (provision) benefit | (181) | 42 | 140 | 522 | ||||||||||||||||||||||
| Net income | 42,369 | 7,748 | 85,412 | 22,212 | ||||||||||||||||||||||
| Net income attributable to noncontrolling interests in investment entities | (5,583) | — | (5,811) | — | ||||||||||||||||||||||
| Preferred stock dividends | (2,887) | (2,887) | (8,661) | (8,661) | ||||||||||||||||||||||
| Net income attributable to common stockholders and OP Unitholders | $ | 33,899 | $ | 4,861 | $ | 70,940 | $ | 13,551 | ||||||||||||||||||
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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 September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||
| Net income attributable to common stockholders and OP Unitholders | $ | 33,899 | $ | 4,861 | $ | 70,940 | $ | 13,551 | ||||||||||||||||||
Depreciation and amortization (1) | 17,290 | 16,886 | 54,084 | 52,237 | ||||||||||||||||||||||
Loss (gain) on operating real estate dispositions, net (2) | (28,502) | 113 | (47,995) | (3,351) | ||||||||||||||||||||||
| Impairment of real estate assets | — | — | 201 | 3,039 | ||||||||||||||||||||||
| FFO attributable to common stockholders and OP Unitholders | $ | 22,687 | $ | 21,860 | $ | 77,230 | $ | 65,476 | ||||||||||||||||||
| Acquisition, development and other pursuit costs | — | 8 | 37 | 111 | ||||||||||||||||||||||
| Impairment of intangible assets and liabilities | — | — | 132 | 83 | ||||||||||||||||||||||
| Loss on extinguishment of debt | 2,123 | 120 | 2,899 | 120 | ||||||||||||||||||||||
| Unrealized credit loss provision (release) | (42) | (617) | 858 | (284) | ||||||||||||||||||||||
| Amortization of right-of-use assets - finance leases | 278 | 278 | 833 | 745 | ||||||||||||||||||||||
| Change in fair value of derivatives not designated as cash flow hedges and other | (782) | (131) | (7,512) | (838) | ||||||||||||||||||||||
| Amortization of interest rate cap premiums on designated cash flow hedges | 1,525 | 59 | 2,048 | 176 | ||||||||||||||||||||||
| Normalized FFO available to common stockholders and OP Unitholders | $ | 25,789 | $ | 21,577 | $ | 76,525 | $ | 65,589 | ||||||||||||||||||
| Net income attributable to common stockholders and OP Unitholders per diluted share and unit | $ | 0.38 | $ | 0.06 | $ | 0.80 | $ | 0.17 | ||||||||||||||||||
| FFO attributable to common stockholders and OP Unitholders per diluted share and unit | $ | 0.26 | $ | 0.27 | $ | 0.88 | $ | 0.81 | ||||||||||||||||||
| Normalized FFO attributable to common stockholders and OP Unitholders per diluted share and unit | $ | 0.29 | $ | 0.26 | $ | 0.87 | $ | 0.81 | ||||||||||||||||||
| Weighted average common shares and units - diluted | 88,341 | 81,936 | 88,143 | 81,164 | ||||||||||||||||||||||
________________________________________
| (1) The adjustment for depreciation and amortization for the three and nine months ended September 30, 2022 excludes $0.2 million and $0.8 million, respectively, of depreciation attributable to our joint venture partners. | ||
| (2) The adjustment for gain on operating real estate dispositions for the three and nine months ended September 30, 2022 excludes $5.4 million of the gain on The Residence at Annapolis Junction that was allocated to our joint venture partner. Additionally, the adjustment for gain on operating real estate dispositions for the nine months ended September 30, 2021 excludes the gain on sale of easement rights on a non-operating parcel. | ||
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ARMADA HOFFLER PROPERTIES, INC.
RECONCILIATION OF NET INCOME TO SAME STORE NOI, CASH BASIS
(in thousands) (unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||
Office Same Store(1) | ||||||||||||||||||||||||||
| Same Store NOI, Cash Basis | $ | 6,177 | $ | 6,357 | $ | 19,340 | $ | 19,201 | ||||||||||||||||||
GAAP Adjustments (2) | 178 | 70 | 302 | 714 | ||||||||||||||||||||||
| Same Store NOI | 6,355 | 6,427 | 19,642 | 19,915 | ||||||||||||||||||||||
Non-Same Store NOI (3) | 5,402 | 550 | 15,173 | 1,869 | ||||||||||||||||||||||
| Segment NOI | 11,757 | 6,977 | 34,815 | 21,784 | ||||||||||||||||||||||
Retail Same Store (4) | ||||||||||||||||||||||||||
| Same Store NOI, Cash Basis | 13,813 | 13,360 | 39,539 | 36,817 | ||||||||||||||||||||||
GAAP Adjustments (2) | 844 | 816 | 1,283 | 1,588 | ||||||||||||||||||||||
| Same Store NOI | 14,657 | 14,176 | 40,822 | 38,405 | ||||||||||||||||||||||
Non-Same Store NOI (3) | 940 | 677 | 6,406 | 3,851 | ||||||||||||||||||||||
| Segment NOI | 15,597 | 14,853 | 47,228 | 42,256 | ||||||||||||||||||||||
Multifamily Same Store (5) | ||||||||||||||||||||||||||
| Same Store NOI, Cash Basis | 6,492 | 6,065 | 19,638 | 17,528 | ||||||||||||||||||||||
GAAP Adjustments (2) | 214 | 232 | 639 | 597 | ||||||||||||||||||||||
| Same Store NOI | 6,706 | 6,297 | 20,277 | 18,125 | ||||||||||||||||||||||
Non-Same Store NOI (3) | 1,482 | 3,173 | 6,486 | 9,359 | ||||||||||||||||||||||
| Segment NOI | 8,188 | 9,470 | 26,763 | 27,484 | ||||||||||||||||||||||
| Total Property NOI | 35,542 | 31,300 | 108,806 | 91,524 | ||||||||||||||||||||||
| General contracting & real estate services gross profit | 2,772 | 1,558 | 5,456 | 3,123 | ||||||||||||||||||||||
| Depreciation and amortization | (17,527) | (16,886) | (54,865) | (52,237) | ||||||||||||||||||||||
| Amortization of right-of-use assets - finance leases | (278) | (278) | (833) | (745) | ||||||||||||||||||||||
| General and administrative expenses | (3,854) | (3,449) | (12,179) | (10,957) | ||||||||||||||||||||||
| Acquisition, development and other pursuit costs | — | (8) | (37) | (111) | ||||||||||||||||||||||
| Impairment charges | — | — | (333) | (3,122) | ||||||||||||||||||||||
| Gain (loss) on real estate dispositions, net | 33,931 | (113) | 53,424 | 3,604 | ||||||||||||||||||||||
| Interest income | 3,490 | 3,766 | 10,410 | 14,628 | ||||||||||||||||||||||
| Interest expense | (10,345) | (8,827) | (28,747) | (25,220) | ||||||||||||||||||||||
| Loss on extinguishment of debt | (2,123) | (120) | (2,899) | (120) | ||||||||||||||||||||||
| Change in fair value of derivatives and other | 782 | 131 | 7,512 | 838 | ||||||||||||||||||||||
| Unrealized credit loss release (provision) | 42 | 617 | (858) | 284 | ||||||||||||||||||||||
| Other income (expense), net | 118 | 15 | 415 | 201 | ||||||||||||||||||||||
| Income tax (provision) benefit | (181) | 42 | 140 | 522 | ||||||||||||||||||||||
| Net income | 42,369 | 7,748 | 85,412 | 22,212 | ||||||||||||||||||||||
| Net income attributable to noncontrolling interests in investment entities | (5,583) | — | (5,811) | — | ||||||||||||||||||||||
| Preferred stock dividends | (2,887) | (2,887) | (8,661) | (8,661) | ||||||||||||||||||||||
| Net income attributable to AHH and OP unitholders | $ | 33,899 | $ | 4,861 | $ | 70,940 | $ | 13,551 | ||||||||||||||||||
| (1) Office same-store portfolio excludes Constellation Office and Wills Wharf. | ||
9
| (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 excludes Delray Beach Plaza, Greenbrier Square, Overlook Village, and Premier Retail. | ||
| (5) Multifamily same-store portfolio excludes Gainesville Apartments, 1305 Dock Street. | ||
Contact:
Chelsea Forrest
Armada Hoffler Properties, Inc.
Director of Corporate Communications and Investor Relations
Email: CForrest@ArmadaHoffler.com
Phone: (757) 612-4248
10
1 SUPPLEMENTAL FINANCIAL PACKAGE
2 This Supplemental Financial Package should be read in conjunction with the unaudited condensed consolidated financial statements appearing in our press release dated November 8, 2022, which has been furnished as Exhibit 99.1 to our Form 8-K filed on November 8, 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”)), and, as such, may involve known and unknown risks and 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 and estimated costs, 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, 2021 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 from time to time. 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. FORWARD-LOOKING STATEMENTS
3 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 Dennis H. Gartman, Independent Director Eva S. Hardy, Independent Director A. Russell Kirk, Director John W. Snow, Independent Director CORPORATE OFFICERS Louis S. Haddad, President and Chief Executive Officer Matthew T. Barnes-Smith, Chief Financial Officer Shawn J. Tibbetts, Chief Operating Officer Eric E. Apperson, President of Construction Shelly R. Hampton, President of Asset Management Jefferies Jonathan Petersen (212) 284-1705 jpetersen@jefferies.com Bank of America Merrill Lynch Camille Bonnel (416) 369-2140 camille.bonnel@bofa.com Janney, Montgomery, & Scott LLC Robert Stevenson (646) 840-3217 robertstevenson@janney.com Raymond James & Associates Bill Crow (727) 567-2594 bill.crow@raymondjames.com ANALYST COVERAGE Armada Hoffler (NYSE: AHH) is a vertically integrated, self-managed real estate investment trust with over 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 Robert W. Baird & Co. David Rodgers (216) 737-7341 drodgers@rwbaird.com Stifel Stephen Manaker (212) 271-3716 manakers@stifel.com
4 HIGHLIGHTS • Net income attributable to common stockholders and OP Unit holders of $33.9 million, or $0.38 per diluted share, compared to $4.9 million, or $0.06 per diluted share, for the three months ended September 30, 2021. • Funds from operations attributable to common stockholders and OP Unit holders ("FFO") of $22.7 million, or $0.26 per diluted share, compared to $21.9 million, or $0.27 per diluted share, for the three months ended September 30, 2021. See "Non-GAAP Financial Measures." • Normalized funds from operations attributable to common stockholders and OP Unit holders ("Normalized FFO") of $25.8 million, or $0.29 per diluted share, compared to $21.6 million, or $0.26 per diluted share, for the three months ended September 30, 2021. • Raised 2022 full-year Normalized FFO guidance to $1.18 to $1.20 per diluted share from the Company's previous guidance range of $1.16 to $1.20 per diluted share. This represents a 11% increase over 2021 results. • Portfolio wide occupancy exceeded 97% for the third consecutive quarter. Retail occupancy reached an all-time high of 98%. • Executed a new 60,000 square foot lease with Franklin Templeton at Wills Wharf, bringing the building to 91% leased. • Executed a new 18,000 square foot office lease with Old Dominion University at the Town Center of Virginia Beach for ODU’s Institute of Data Science and Coastal Virginia Center for Cyber Innovation. • Subsequent to the end of the third quarter, executed a new 46,000 square foot lease with Morgan Stanley at Thames Street Wharf that expands the tenant’s space to over 240,000 square feet and extends their lease term to 2035. • Same Store net operating income ("NOI") increased 3.0% on a GAAP basis and 2.7% on a cash basis compared to the quarter ended September 30, 2021. • Commercial same store NOI increased 2.0% on a GAAP basis and 1.4% on a cash basis. • Multifamily same store NOI increased 6.5% on a GAAP and 7.0% on a cash basis. • Positive GAAP releasing spreads during the third quarter of 10.7% for retail lease renewals and 3.3% for office lease renewals. • Multifamily lease rates increased 7.6% during the third quarter of 2022. Rental rates on new lease trade outs increased 8.8% and rental rates on lease renewals increased 6.3%. • Amended and restated the existing $355 million unsecured credit facility, increased the borrowing capacity of the Company’s unsecured credit facility to $550 million, with an option to expand to $1.0 billion, and extended to the terms of the revolving line of credit and term loan components to 2027 and 2028, respectively. • Closed on the $150 million sale of The Residences at Annapolis Junction at a 4.15% cap rate.
5 2022 OUTLOOK & ASSUMPTIONS OUTLOOK(1) LOW HIGH TOTAL NOI $145.2M $146.0M CONSTRUCTION SEGMENT GROSS PROFIT $7.8M $8.4M G&A EXPENSES $16.0M $16.5M INTEREST INCOME $14.6M $15.0M INTEREST EXPENSE(2) $35.4M $36.1M NORMALIZED FFO PER DILUTED SHARE $1.18 $1.20 GUIDANCE ASSUMPTIONS (1) See appendix for definitions. Ranges exclude certain items as per definition. (2) Includes the interest expense on finance leases. • Anticipated sale of Interlock in 2023 • Acquisition of a $26.5 million grocery-anchored retail asset • New $125 million unsecured term loan projected to close late November 2022 • Interest expense based on Forward Yield Curve, which forecasts rates ending the year at 4.4%
6 SUMMARY INFORMATION $ IN THOUSANDS, EXCEPT PER SHARE (1) As of market close on last day of period. (2) Excludes GAAP adjustments. (3) See appendix for definitions. (4) See appendix for 2022 multifamily occupancy calculation. (5) Total occupancy weighted by annualized base rent. Three Months Ended OPERATIONAL METRICS 9/30/2022 6/30/2022 3/31/2022 12/31/2021 Net Income Attributable to Common Stockholders and OP Unitholders $33,899 $27,752 $9,289 $361 Net Income per Diluted Share Attributable to Common Stockholders and OP Unitholders $0.38 $0.31 $0.11 $0.00 Normalized FFO Attributable to Common Stockholders and OP Unitholders 25,789 26,203 24,533 21,907 Normalized FFO per Diluted Share Attributable to Common Stockholders and OP Unitholders $0.29 $0.30 $0.28 $0.27 Stabilized Portfolio Debt / Stabilized Portfolio Adjusted EBITDA 4.9x 5.5x 5.6x 5.4x Fixed charge coverage ratio 2.4x 2.5x 2.6x 2.3x CAPITALIZATION Common Shares Outstanding 67,730 67,730 67,695 63,012 Operating Partnership Units Outstanding 20,611 20,621 20,622 20,633 Common Shares and Operating Partnership Units Outstanding 88,341 88,351 88,317 83,645 Market Price per Common Share(1) $10.38 $12.84 $14.60 $15.22 Common Equity Capitalization 916,979 1,134,427 1,289,428 1,273,077 Preferred Equity Capitalization 171,085 171,085 171,085 171,085 Total Equity Capitalization 1,088,064 1,305,512 1,460,513 1,444,162 Total Debt(2) 1,042,955 1,165,108 1,179,296 957,387 Total Capitalization $2,131,019 $2,470,620 $2,639,809 $2,401,549 STABILIZED PORTFOLIO OCCUPANCY(3) Retail 98.0% 97.1% 96.7% 96.0% Office 96.8% 97.9% 97.3% 96.8% Multifamily 96.4% (4) 97.2% (4) 97.3% (4) 97.4% Weighted Average(5) 97.1% 97.3% 97.1% 96.7% STABILIZED PORTFOLIO Commercial Retail Portfolio Net Operating Income $15,597 $15,940 $15,691 $15,389 Number of Properties 37 37 37 37 Net Rentable Square Feet 3,791,820 3,798,868 4,067,360 4,067,355 Office Portfolio Net Operating Income $11,757 $11,679 $11,379 $7,055 Number of Properties 9 8 8 7 Net Rentable Square Feet 2,120,341 1,792,350 1,792,054 1,301,319 Multifamily Multifamily Portfolio Net Operating Income $8,188 $9,083 $9,492 $9,826 Number of Properties 10 10 12 11 Units 2,254 2,447 2,447 2,344 Beds - - 615 615
7 SUMMARY INCOME STATEMENT $ IN THOUSANDS, EXCEPT PER SHARE Three Months Ended Nine Months Ended 9/30/2022 9/30/2021 9/30/2022 9/30/2021 Revenues (Unaudited) Rental Revenues $53,743 $49,560 $163,602 $142,679 General Contracting Revenues 69,024 17,502 138,947 71,473 Total Revenues 122,767 67,062 302,549 214,152 Expenses Rental Expenses 12,747 12,717 38,101 34,841 Real Estate Taxes 5,454 5,543 16,695 16,314 General Contracting Expenses 66,252 15,944 133,491 68,350 Depreciation and Amortization 17,527 16,886 54,865 52,237 Amortization of Right-of-Use Assets - Finance Leases 278 278 833 745 General & Administrative Expenses 3,854 3,449 12,179 10,957 Acquisition, Development & Pursuit Costs - 8 37 111 Impairment Charges - - 333 3,122 Total Expenses 106,112 54,825 256,534 186,677 Gain on Real Estate Dispositions 33,931 (113) 53,424 3,604 Operating Income 50,586 12,124 99,439 31,079 Interest Income 3,490 3,766 10,410 14,628 Interest Expense (10,345) (8,827) (28,747) (25,220) Loss on Extinguishment of Debt (2,123) (120) (2,899) (120) Change in Fair Value of Derivatives and Other 782 131 7,512 838 Unrealized Credit Loss Release (Provision) 42 617 (858) 284 Other Income (Expense), Net 118 15 415 201 Income Before Taxes 42,550 7,706 85,272 21,690 Income Tax Benefit (Provision) (181) 42 140 522 Net Income $42,369 $7,748 $85,412 $22,212 Net Loss Attributable to Noncontrolling Interest in Investment Entities (5,583) - (5,811) - Preferred Stock Dividends (2,887) (2,887) (8,661) (8,661) Net Income Attributable to AHH and OP Unitholders $33,899 $4,861 $70,940 $13,551 Net Income per Diluted Share and Unit Attributable to AHH and OP Unitholders $0.38 $0.06 $0.80 $0.17 Weighted Average Shares & OP Units - Diluted 88,341 81,936 88,143 81,164
8 SUMMARY BALANCE SHEET $ IN THOUSANDS 9/30/2022 12/31/2021 Assets (Unaudited) Real Estate Investments: Income Producing Property $1,797,547 $1,658,609 Held for Development 6,294 6,294 Construction in Progress 92,357 72,535 Accumulated Depreciation (316,189) (285,814) Net Real Estate Investments 1,580,009 1,451,624 Real Estate Investments Held for Sale - 80,751 Cash and Cash Equivalents 54,700 35,247 Restricted Cash 4,865 5,196 Accounts Receivable, Net 35,400 29,576 Notes Receivable 141,816 126,429 Construction Receivables, Including Retentions 47,865 17,865 Costs in Excess of Earnings 232 243 Equity Method Investments 64,470 12,685 Operating Lease Right-of-Use Assets 23,416 23,493 Finance Lease Right-of-Use Assets 46,155 46,989 Acquired Intangibles 103,297 62,038 Other Assets 85,346 45,927 Total Assets $2,187,571 $1,938,063 Liabilities and Equity Indebtedness, Net $1,041,576 $917,556 Liabilities Related to Assets Held for Sale - 41,364 Accounts Payable and Accrued Liabilities 24,301 29,589 Construction Payables 63,376 31,166 Billings in Excess of Construction Contract Costs and Est. Earnings 15,736 4,881 Operating Lease Liabilities 31,708 31,648 Finance Lease Liabilities 46,409 46,160 Other Liabilities 53,551 55,876 Total Liabilities 1,276,657 1,158,240 Total Equity 910,914 779,823 Total Liabilities and Equity $2,187,571 $1,938,063 As Of
9 FFO, NORMALIZED FFO & AFFO(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 attributable to noncontrolling interests in consolidated investments and the disposition of non-operating parcels. (4) Related to Hoffler Place and Summit Place. (5) Excludes development, redevelopment, and first-generation space. (6) Includes non-cash interest expense relating to indebtedness and interest expense on finance leases. (7) Related to Socastee Commons. Three Months Ended (Unaudited) 9/30/2022 6/30/2022 3/31/2022 12/31/2021 9/30/2022 9/30/2021 Funds From Operations Net Income Attributable to AHH and OP Unitholders $33,899 $27,752 $9,289 $361 $70,940 $13,551 Net Income per Diluted Share $0.38 $0.31 $0.11 $0.00 $0.80 $0.17 Depreciation and Amortization(2) 17,290 18,509 18,285 16,616 54,084 52,237 Gain on Dispositions of Operating Real Estate(3) (28,502) (19,493) - (15,442) (47,995) (3,351) Impairment of Real Estate Assets - 201 - 18,339 (4) 201 3,039 (7) FFO $22,687 $26,969 $27,574 $19,874 $77,230 $65,476 FFO per Diluted Share $0.26 $0.31 $0.31 $0.24 $0.88 $0.81 Normalized FFO Acquisition, Development & Other Pursuit Costs - 26 11 1 37 111 Loss on Extinguishment of Debt 2,123 618 158 3,690 2,899 120 Non-Cash GAAP Adjustments 236 657 930 (314) 1,823 544 Change in Fair Value of Derivatives and Other (782) (2,548) (4,182) (1,344) (7,512) (838) Amortization of Interest Rate Cap Premium on Designated Cash Flow Hedges 1,525 481 42 59 2,048 176 Normalized FFO $25,789 $26,203 $24,533 $21,966 $76,525 $65,589 Normalized FFO per Diluted Share $0.29 $0.30 $0.28 $0.27 $0.87 $0.81 Adjusted FFO Non-Cash Stock Compensation 614 506 1,609 400 2,729 1,830 Acquisition, Development & Other Pursuit Costs - (26) (11) (1) (37) (111) Tenant Improvements, Leasing Commissions, Lease Incentives (5) (639) (1,242) (2,873) (1,212) (4,754) (4,638) Property-Related Capital Expenditures (2,417) (2,296) (3,735) (3,145) (8,448) (6,735) Adjustment for Mezz Loan Modification and Exit Fees (209) (209) (493) (493) (911) (1,479) Non-Cash Interest Expense(6) 1,336 1,395 1,509 1,272 4,240 3,622 Cash Ground Rent Payment - Finance Lease (635) (635) (635) (624) (1,905) (1,663) GAAP Adjustments (1,762) (1,622) (1,490) (666) (4,874) (3,638) AFFO $22,077 $22,074 $18,414 $17,497 $62,565 $52,777 AFFO per Diluted Share $0.25 $0.25 $0.21 $0.21 $0.71 $0.65 Weighted Average Common Shares Outstanding 67,730 67,710 67,128 61,646 67,525 60,310 Weighted Average Operating Partnership Units Outstanding 20,611 20,621 20,621 20,634 20,618 20,854 Total Weighted Average Common Shares and OP Units Outstanding 88,341 88,331 87,749 82,280 88,143 81,164 Nine Months Ended (Unaudited)
10 NET ASSET VALUE COMPONENT DATA $ AND SHARES/UNITS IN THOUSANDS (1) Excludes expenses associated with the Company’s in-house asset management division of $0.7M for the 3 months ended 9/30/2022. (2) Includes 100% of joint ventures. (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. Stabilized Portfolio NOI (Cash) Liabilities(4) Three months ended 9/30/2022 As of 9/30/2022 Office(3) Retail Multifamily Total Mortgages and Notes Payable(5) $1,042,955 Stable Portfolio Accounts Payable and Accrued Liabilities 24,301 Portfolio NOI(1)(2) $11,238 $14,983 $8,153 $34,374 Construction Payables, Including Retentions 63,376 Non-Stabilized Properties NOI - - - - Other Liabilities(5) 67,687 Signed Leases Not Yet Occupied or in Free Rent Period 1,219 492 6 1,717 Total Liabilities $1,198,319 Stable Portfolio NOI $12,457 $15,475 $8,159 $36,091 Intra-Quarter Transactions Preferred Equity Net Acquisitons - - - - Liquidation Value Net Dispositions - (11) (357) (368) Series A Cumulative Redeemable Perpetual Preferred Stock $171,085 Annualized $49,828 $61,856 $31,208 $142,892 Non-Stabilized Portfolio Common Equity As of 9/30/2022 As of 9/30/2022 Projects Under Development $85,000 Total Common Shares Outstanding 67,730 Properties in Lease Up - Total OP Units Outstanding 20,611 Development Opportunities 17,000 Total Common Shares & OP Units Outstanding 88,341 Unconsolidated JV Development 65,000 Total Non-Stabilized Portfolio $167,000 Third-Party General Contracting and Real Estate Services Trailing 12 Months General Contracting Gross Profit $6,169 Non-Property Assets(4) As of 9/30/2022 Cash and Retricted Cash $59,565 Accounts Receivable 35,400 Notes Receivable and Other Notes Receivable(5) 26,048 Preferred Equity / Mezzanine Investments(5) 116,252 Construction Receivables, Including Retentions (5) 48,048 Acquired Lease Intangible Assets, Net 103,297 Other Assets / Costs in Excess of Earnings 85,578 Total Non-Property Assets $474,188
11 STABILIZED PORTFOLIO SUMMARY AS OF SEPTEMBER 30, 2022 SEE APPENDIX FOR FULL LIST OF PROPERTIES (1) See appendix for definitions and portfolio detail. COMMERCIAL PORTFOLIO Retail Properties # of Properties Net Rentable SF Average Age Occupied SF Occupancy(1) ABR(1) ABR per Occupied SF Town Center of Virginia Beach 9 494,317 16 483,884 97.9% $11,874,085 $24.54 Grocery Anchored 15 1,400,564 12 1,370,101 97.8% 22,540,288 16.45 Regional Centers 13 1,896,939 17 1,861,945 98.2% 34,589,043 18.58 Total Retail Portfolio 37 3,791,820 15 3,715,930 98.0% $69,003,416 $18.57 Office Properties # of Properties Net Rentable SF Average Age Occupied SF Occupancy(1) ABR(1) ABR per Occupied SF Town Center of Virginia Beach 4 788,529 20 780,174 98.9% $22,682,009 $29.07 Harbor Point - Baltimore Waterfront 3 1,082,152 7 1,038,302 95.9% 31,488,495 30.33 Other 2 249,660 3 233,501 93.5% 6,320,386 27.07 Stabilized Office Total 9 2,120,341 12 2,051,977 96.8% $60,490,890 $29.48 MULTIFAMILY PORTFOLIO Multifamily Properties # of Properties Units Average Age Occupied Units Occupancy(1) AQR (1) Monthly AQR per Occupied Unit Town Center of Virginia Beach 3 759 9 727 95.8% $17,215,080 $1,974 Harbor Point - Baltimore Waterfront 2 392 5 380 96.9% 11,558,616 2,535 Other 5 1,103 7 1,065 96.6% 21,435,876 1,677 Stabilized Multifamily Total 10 2,254 7 2,172 96.4% $50,209,572 $1,926
12 SAME STORE NOI BY SEGMENT $ IN THOUSANDS (RECONCILIATION TO GAAP LOCATED IN APPENDIX) (1) Excludes expenses associated with the Company’s in-house asset management division of $0.7M for each of the 3 months ended 9/30/2022 & 9/30/2021. Three Months Ended Nine Months Ended 9/30/2022 9/30/2021 $ Change % Change 9/30/2022 9/30/2021 $ Change % Change Office Revenue $10,315 $10,252 $63 0.6% $30,861 $30,752 $109 0.4% Rental Expenses(1) 2,563 2,510 53 2.1% 7,193 6,934 259 3.7% Real Estate Taxes 1,397 1,315 82 6.2% 4,026 3,903 123 3.2% Net Operating Income $6,355 $6,427 ($72) -1.1% $19,642 $19,915 ($273) -1.4% GAAP Adjustments (178) (70) (108) (302) (714) 412 Net Operating Income, Cash $6,177 $6,357 ($180) -2.8% $19,340 $19,201 $139 0.7% Retail Revenue $19,718 $19,062 $656 3.4% $54,650 $51,628 $3,022 5.9% Rental Expenses(1) 3,006 2,878 128 4.4% 8,053 7,439 614 8.3% Real Estate Taxes 2,055 2,008 47 2.3% 5,775 5,784 (9) -0.2% Net Operating Income $14,657 $14,176 $481 3.4% $40,822 $38,405 $2,417 6.3% GAAP Adjustments (844) (816) (28) (1,283) (1,588) 305 Net Operating Income, Cash $13,813 $13,360 $453 3.4% $39,539 $36,817 $2,722 7.4% Multifamily Revenue $11,222 $10,624 $598 5.6% $32,901 $30,399 $2,502 8.2% Rental Expenses(1) 3,456 3,393 63 1.9% 9,583 9,409 174 1.8% Real Estate Taxes 1,060 934 126 13.5% 3,041 2,865 176 6.1% Net Operating Income $6,706 $6,297 $409 6.5% $20,277 $18,125 $2,152 11.9% GAAP Adjustments (214) (232) 18 (639) (597) (42) Net Operating Income, Cash $6,492 $6,065 $427 7.0% $19,638 $17,528 $2,110 12.0% Same Store NOI $27,718 $26,900 $818 3.0% $80,741 $76,445 $4,296 5.6% GAAP Adjustments (1,236) (1,118) (118) (2,224) (2,899) 675 $26,482 $25,782 $700 2.7% $78,517 $73,546 $4,971 6.8%Same Store Portfolio NOI, Cash Basis
13 DEBT TO ADJUSTED EBITDA $ IN THOUSANDS SEE APPENDIX FOR DEFINITIONS, CALCULATIONS, AND RECONCILIATIONS (1) Includes income and debt related to development, mezzanine, construction, and other ancillary activities outside of our stabilized portfolio. (2) Total notes payable less GAAP adjustments, cash, restricted cash, and other notes payable. 7.6 x 6.5 x 4.9 x 0.0 x 1.0 x 2.0 x 3.0 x 4.0 x 5.0 x 6.0 x 7.0 x 8.0 x Net Debt + Preferred/ Total Adjusted EBITDA Plus Ancillary Debt/ Total Adjusted EBITDA⁽¹⁾ Stabilized Portfolio Debt/ Stabilized Portfolio Adjusted EBITDA Three months ended 9/30/2022 Stabilized Portfolio Adjusted EBITDA $34,866 Stabilized Portfolio Debt $684,704 Stabilized Portfolio Debt / Stabilized Portfolio Adjusted EBITDA 4.9x Total Adjusted EBITDA(1) $38,036 Net Debt(2) $983,390 Net Debt Plus Ancillary Debt/Total Adjusted EBITDA 6.5x Net Debt + Preferred $1,154,475 Net Debt + Preferred /Total Adjusted EBITDA 7.6x
14 DEBT MANAGEMENT $ IN THOUSANDS (1) Includes impact of non-designated interest rate caps. (2) Excludes debt subject to interest rate swap locks. (3) Includes debt subject to interest rate swap locks. (4) Excludes GAAP adjustments. (5) Represents the weighted average interest rate of the portfolio, inclusive of caps and swaps. (6) Represents a hedging corridor. Total Debt Composition(1) Weighted Average % of Debt Interest Rate Maturity Variable vs. Fixed-rate Debt Variable-Rate Debt(2) 52.7% 2.7% 3.7 Yrs Fixed-Rate Debt(3)(4) 47.3% 3.2% 7.4 Yrs Secured vs. Unsecured Debt Unsecured Debt 32.2% 2.5% 5.2 Yrs Secured Debt 67.8% 5.3% 5.6 Yrs Portfolio Weighted Average 2.9% (5) 5.5 Yrs Interest Rate Cap Agreements At or Below 4.00% Effective Date Maturity Date Strike Rate Notional Amount February 2021 February 2023 LIBOR 0.50% $100,000 March 2021 April 2023 LIBOR 2.50% 14,479 November 2020 November 2023 SOFR 1.84% 84,375 July 2022 January 2024 SOFR 1.00%-3.00%(6) 85,100 January 2022 February 2024 BSBY + 4.00% 175,000 April 2022 February 2024 BSBY 1.00%-3.00%(6) 175,000 July 2022 March 2024 SOFR 1.00%-3.00%(6) 200,000 May 2022 September 2024 SOFR 1.00%-3.00%(6) 1,097 Total Interest Rate Caps $835,051 Fixed-Rate Debt(3)(4) $493,570 Fixed-Rate and Hedged Debt $1,328,621 Total Debt(4) $1,042,955 % Fixed or Hedged 100%
15 OUTSTANDING DEBT $ IN THOUSANDS (1) Excludes non-designated interest rate caps. (2) Includes debt subject to interest rate swap locks. (3) Subject to a rate floor. (4) Includes debt subject to designated interest rate caps. Debt Stated Rate Effective Rate of as 9/30/2022(1) Maturity Date 2022 2023 2024 2025 2026 Thereafter Outstanding as of 9/30/2022 Secured Notes Payable - Stabilized Debt Wills Wharf L+2.25% 5.39% Jun-2023 - $64,288 $64,288 249 Central Park Retail L+1.60% 3.85% (2) Aug-2023 67 16,093 16,160 Fountain Plaza Retail L+1.60% 3.85% (2) Aug-2023 40 9,684 9,724 South Retail L+1.60% 3.85% (2) Aug-2023 29 7,065 7,094 Red Mill Central 4.80% 4.80% Jun-2024 44 175 1,838 2,057 Gainesville Apartments L+3.00% 6.14% (3) Aug-2024 - - 30,328 30,328 Premier Apartments L+1.55% 4.69% Oct-2024 57 234 16,035 16,326 Premier Retail L+1.55% 4.69% Oct-2024 28 115 7,898 8,041 Red Mill South 3.57% 3.57% May-2025 83 338 351 4,502 5,274 Market at Mill Creek L+1.55% 4.69% Jul-2025 162 647 647 11,200 12,656 Encore Apartments 2.93% 2.93% Feb-2026 136 556 573 590 22,262 24,117 4525 Main Street 2.93% 2.93% Feb-2026 175 714 735 757 28,578 30,959 Thames Street Wharf BSBY+1.30% 2.35% (2) Sep-2026 358 1,433 1,972 3,050 62,872 69,685 Constellation Energy Building BSBY+1.50% 2.59% (3)(4) Nov-2026 - - - - 175,000 175,000 Southgate Square L+1.90% 5.04% (3) Dec-2026 10 39 37 43 26,470 26,599 Nexton Square SOFR+1.95% 4.99% (3) Jun-2027 57 231 240 255 269 21,343 22,395 Greenbrier Square 3.74% 3.74% Oct-2027 60 371 385 399 415 18,370 20,000 Liberty Apartments SOFR+1.50% 4.54% Oct-2027 86 350 364 384 402 19,415 21,001 Lexington Square 4.50% 4.50% Sep-2028 71 293 306 320 335 12,638 13,963 Red Mill North 4.73% 4.73% Dec-2028 28 116 121 127 133 3,582 4,107 Greenside Apartments 3.17% 3.17% Dec-2029 187 759 780 808 834 28,681 32,049 Smith's Landing 4.05% 4.05% Jun-2035 233 956 994 1,037 1,081 11,467 15,768 Edison Apartments 5.30% 5.30% Dec-2044 93 384 405 427 450 13,897 15,656 The Cosmopolitan 3.35% 3.35% Jul-2051 214 876 906 937 968 37,556 41,457 Total - Secured Stabilized Debt 2,218 105,717 64,915 24,836 320,069 166,949 684,704 Secured Notes Payable - Development Pipeline Chronicle Mill L+3.00% 4.04% (3) May-2024 - - 22,251 - - - 22,251 Southern Post SOFR+2.25% 3.29% (3)(4) Aug-2026 - - - - - - Total - Development Pipeline - - 22,251 - - - 22,251 Total Secured Notes Payable 2,218 105,717 87,166 24,836 320,069 166,949 706,955 Unsecured Stabilized Debt Senior Unsecured Line of Credit SOFR+1.30%-1.85% 4.54% Jan-2027 - - - - - 36,000 36,000 Senior Unsecured Term Loan SOFR+1.25%-1.80% 4.49% Jan-2028 - - - - - 114,500 114,500 Senior Unsecured Term Loan L+1.25%-1.80% 1.85%-4.37% (2) Jan-2028 - - - - - 185,500 185,500 Total - Unsecured Stabilized Debt - - - - - 336,000 336,000 Total Notes Payable Excluding GAAP Adjustments $2,218 $105,717 $87,166 $24,836 $320,069 $502,949 $1,042,955 Other Notes Payable 9,231 GAAP Adjustments (10,610) Total Notes Payable $1,041,576 Debt Maturities & Principal Payments
16 CAPITALIZATION & FINANCIAL RATIOS $ IN THOUSANDS, EXCEPT PER SHARE AS OF SEPTEMBER 30, 2022 (1) As of close of market 9/30/22. (2) Reflects quarterly Total Adjusted EBITDA divided by total quarterly interest expense and required principal repayment. (3) Reflects quarterly Total Adjusted EBITDA divided by total quarterly interest expense, required principal repayment, and preferred equity dividends. (4) Excludes availability under construction loans. (5) Inclusive of intended 1031 proceeds for pending 4Q22 acquisition. Debt % of Total Principal Balance Unsecured Credit Facility 3% $36,000 Unsecured Term Loans 29% 300,000 Mortgages Payable 68% 706,955 Total Debt $1,042,955 Preferred Equity Shares Liquidation Value per Share Total Liquidation Value 6,843 $25.00 $171,085 Common Equity % of Total Shares/Units Stock Price(1) Market Value Common Stock (NYSE: AHH) 77% 67,730 $10.38 $703,037 Operating Partnership Units 23% 20,611 $10.38 213,942 Equity Market Capitalization 88,341 $916,979 Total Capitalization $2,131,019 Enterprise Value $2,071,454 Financial Ratios Debt Service Coverage Ratio(2) 2.9x Fixed Charge Coverage Ratio(3) 2.4x Stabilized Portfolio Debt / Stabilized Portfolio Adjusted EBITDA 4.9x Net Debt Plus Ancillary Debt / Total Adjusted EBITDA 6.5x Net Debt Plus Preferred / Total Adjusted EBITDA 7.6x Debt/Total Capitalization 49% Liquidity(4) Unencumbered Properties Cash on hand(5) $54,700 % of Total Properties 60% Availability Under Credit Facility 214,000 % of Annualized Base Rent 40% Total Liquidity $268,700 6.75% Series A Cumulative Redeemable Perpetual Preferred Stock (NYSE: AHHPrA) Debt 49% Common Equity 43% Preferred Equity 8%
17 ACTIVE DEVELOPMENT PROJECTS $ 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. (4) Overfunded due to timing of loan modification. Reimbursed subsequent to quarter end. T. Rowe Price/ Parcel 4 Baltimore, MD Chronicle Mill Belmont, NC Projects Property Type Estimated Size(1) % Leased or LOI Construction Start Initial Occupancy Stabilized Operation(2) Estimated Cost(1) Loan Commitment Cost to Date AHH Ownership % Anchor Tenants Chronicle Mill Belmont, NC Multifamily 244 units / 14,700 sf 49% 1Q21 4Q22 4Q23 $57,500 $35,100 $52,000 85% (3) Southern Post Roswell, GA Mixed-use 137 units / 137,000 sf - 4Q21 4Q23 4Q24 118,000 73,600 33,000 100% Unconsolidated JV Developments Total Projects Under Development $175,500 $108,700 $85,000 Projects Property Type Estimated Size(1) % Leased or LOI Construction Start Initial Occupancy Stabilized Operation(2) Estimated Cost(1) Equity Requirement Funded to Date AHH Ownership % Anchor Tenants T. Rowe Price Global HQ Baltimore, MD Office 535,900 sf office / 40,500 sf retail / 250 parking spaces 93% 2Q22 3Q24 3Q24 $258,000 $39,000 $42,000 (4) 50% T. Rowe Price Parcel 4 Mixed-Use Baltimore, MD Mixed-Use/Garage 312 units / 13,000 sf retail / 1,250 parking spaces - 2Q22 3Q24 2Q26 223,000 100,000 23,000 90% Total Unconsolidated JV Development $481,000 $139,000 $65,000 Q3 2022 Year to Date Capitalized Interest $1,209 $2,303 Capitalized Overhead $900 $2,227 Schedule(1)
18 PREFERRED INVESTMENTS/MEZZANINE $ IN THOUSANDS AS OF SEPTEMBER 30, 2022 (1) Represents estimates that may change as the development process proceeds. (2) Includes amortization of fees. (3) Preferred equity with economic terms and accounting consistent with a loan receivable. Solis City Park Charlotte, NC Solis Nexton Summerville, SC Property Type Estimated Size(1) % Leased or LOI Initial Occupancy Loan Maturity Interest Rate Loan Balance QTD Interest Income(2) Outstanding Investments The Interlock Atlanta, GA Mixed-use 300,000 sf 90% 1Q21 4Q24 15% $78,784 $2,363 Solis Nexton(3) Summerville, SC Multifamily 320 units 34% 4Q22 4Q26 11% 25,532 680 Solis City Park(3) Charlotte, NC Multifamily 250 units NA 3Q23(1) 1Q28 13% 11,936 329 Total $116,252 $3,372
19 THIRD-PARTY CONSTRUCTION $ IN THOUSANDS Adams Hill Greenville, SC Q3 2022 Q2 2022 Q1 2022 Q4 2021 Trailing 4 Quarters Revenue $69,024 $45,273 $24,650 $20,463 $159,410 Expense (66,252) (43,418) (23,821) (19,750) (153,241) Gross Profit $2,772 $1,855 $829 $713 $6,169 Operating Margin 4.0% 4.1% 3.4% 3.5% 3.9% Third-Party Backlog as of Q3 2022 Beginning Backlog $541,215 New Contracts 53,966 QTD Work Performed (69,252) Ending Backlog $525,929
20 ACQUISITIONS & DISPOSITIONS $ IN THOUSANDS (1) Represents 100% of property value of which the Company owns a 90% economic interest. (2) Anchor tenant vacant at time of sale. ACQUISITIONS Properties Location Square Feet/Units Purchase Price Cash Cap Rate Purchase Date Anchor Tenants 2022 482,000 / 103 units $273,000 6.1% Constellation Energy Building Baltimore, MD 482,000 / 103 units 273,000 (1) 6.1% 1Q22 Constellation Energy Group 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 Total/Weighted Average 894,075 / 277 units $363,550 6.3% DISPOSITIONS Properties Location Square Feet/Units/Beds Sale Price Cash Cap Rate Disposition Date Anchor Tenants 2022 275,896 / 1,031 units/beds $258,261 4.3% Sandbridge Outparcels Virginia Beach, VA 7,233 3,455 4.5% 3Q22 Autozone, Valvoline Annapolis Junction Annapolis Junction, MD 416 units 150,000 4.2% 3Q22 North Pointe Outparcels Durham, NC 268,663 23,931 4.0% 2Q22 Costco, Home Depot Summit Place Charleston, SC 357 beds 37,800 4.8% 2Q22 Hoffler Place Charleston, SC 258 beds 43,075 4.1% 2Q22 2021 128,105 / 568 beds $90,265 5.2% Johns Hopkins Village Baltimore, MD 568 beds 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 Total/Weighted Average 1,049,601 / 1,599 units/beds $445,826 5.2%
21 TOP 20 TENANTS BY ABR(1) $ IN THOUSANDS AS OF SEPTEMBER 30, 2022 (1) Excludes leases from the development and redevelopment properties that have been delivered, but not yet stabilized. Commercial Portfolio Tenant Number of Leases Lease Expiration Annualized Base Rent % of Total Annualized Base Rent Constellation Energy Group 1 2036 $14,149 7.9% Morgan Stanley 3 2027 - 2032 7,178 4.0% Harris Teeter/Kroger 6 2023 - 2035 3,766 2.1% Canopy by Hilton 1 2045 2,846 1.6% ABR Clark Nexsen 1 2029 2,801 1.6% WeWork 1 2034 2,122 1.2% Lowes Foods 2 2037 ; 2039 1,976 1.1% Franklin Templeton 1 2038 1,861 1.0% Duke University 1 2029 1,659 0.9% Huntington Ingalls Industries 1 2029 1,606 0.9% Dick's Sporting Goods 1 2032 1,553 0.9% PetSmart 5 2025 - 2027 1,527 0.8% TJ Maxx/Homegoods 5 2023 - 2027 1,519 0.8% Regal Cinemas 2 2024 ; 2024 1,339 0.7% Mythics 1 2030 1,260 0.7% Johns Hopkins Medicine 1 2023 1,213 0.7% Amazon/Whole Foods 1 2040 1,144 0.6% Ross Dress for Less 3 2025 - 2027 1,122 0.6% Apex Entertainment 1 MTM ; 2024 1,092 0.6% Bed Bath & Beyond 2 2025 ; 2027 1,084 0.6% Top 20 Total $52,817 29.3%
22 LEASE SUMMARY (1) Excludes leases from properties in development. OFFICE Renewals For GAAP and Cash Releasing Spread Calc: Quarter Number of Leases Signed Net Rentable SF Signed GAAP Releasing Spread Cash Releasing Spread Wtd Average Lease Term Remaining (yrs) TI & LC TI & LC per SF Q3 2022 3 22,374 3.3% -3.1% 3.9 $117,290 $5.24 Q2 2022 3 7,654 13.1% 3.0% 4.6 14,127 1.85 Q1 2022 5 22,985 11.3% 2.6% 4.9 321,154 13.97 Q4 2021 1 23,267 8.3% -3.8% 5.3 515,175 22.14 Trailing 4 Quarters 12 76,280 8.0% -1.2% 4.7 $967,746 $12.69 New Leases(1) Quarter Number of Leases Signed Net Rentable SF Signed Cash Rent per SF Wtd Average Lease Term Remaining (yrs) TI & LC TI & LC per SF Q3 2022 1 17,617 $26.25 10.0 $1,088,088 $61.76 Q2 2022 4 18,884 24.20 6.2 595,169 31.52 Q1 2022 2 5,407 29.11 7.7 358,633 66.33 Q4 2021 1 1,428 26.00 10.0 45,198 31.65 Trailing 4 Quarters 8 43,336 $25.71 8.1 $2,087,088 $48.16 RETAIL Renewals For GAAP and Cash Releasing Spread Calc: Quarter Number of Leases Signed Net Rentable SF Signed GAAP Releasing Spread Cash Releasing Spread Wtd Average Lease Term Remaining (yrs) TI & LC TI & LC per SF Q3 2022 18 62,880 10.7% 5.8% 5.3 $176,982 $2.81 Q2 2022 20 217,381 9.9% 3.5% 7.5 416,696 1.92 Q1 2022 22 199,653 11.8% 3.5% 6.1 251,045 1.26 Q4 2021 16 126,328 9.0% 6.0% 4.8 166,153 1.32 Trailing 4 Quarters 76 606,242 10.3% 4.6% 6.3 $1,010,876 $1.67 New Leases(1) Quarter Number of Leases Signed Net Rentable SF Signed Cash Rent per SF Wtd Average Lease Term Remaining (yrs) TI & LC TI & LC per SF Q3 2022 10 22,354 $25.09 9.0 $1,316,282 $58.88 Q2 2022 11 40,190 18.62 8.2 1,248,190 31.06 Q1 2022 5 19,680 28.15 11.6 1,753,363 89.09 Q4 2021 17 61,922 18.27 6.8 1,267,703 20.47 Trailing 4 Quarters 43 144,146 $20.77 8.2 $5,585,538 $38.75
23 LEASE EXPIRATIONS(1) AS OF SEPTEMBER 30, 2022 (1) Excludes leases from properties in development and delivered, but not yet stabilized. OFFICE Year Leases Expiring Square Footage Expiring % Portfolio Net Rentable Square Feet ABR % of Portfolio ABR Available - 68,364 3.2% -$ - M-T-M 2 1,623 0.1% 63,329 0.1% 2022 2 2,489 0.1% 59,062 0.1% 2023 9 68,800 3.2% 1,857,844 3.1% 2024 14 150,495 7.1% 3,837,218 6.3% 2025 19 153,103 7.2% 4,719,175 7.8% 2026 11 54,355 2.6% 1,418,061 2.3% 2027 18 326,264 15.4% 9,506,745 15.7% 2028 14 113,036 5.3% 3,294,738 5.4% 2029 13 297,814 14.0% 8,114,702 13.4% 2030 9 145,335 6.9% 4,238,997 7.0% 2031 3 18,870 0.9% 541,476 0.9% 2032 4 40,816 1.9% 1,238,157 2.0% Thereafter 6 678,977 32.1% 21,601,386 35.9% Total / Weighted Average 124 2,120,341 100.0% $60,490,890 100.0% RETAIL Year Leases Expiring Square Footage Expiring % Portfolio Net Rentable Square Feet ABR % of Portfolio ABR Available - 75,890 2.0% -$ - M-T-M 3 51,737 1.4% 626,221 0.9% 2022 8 33,791 0.9% 677,710 1.0% 2023 51 250,956 6.6% 5,092,633 7.4% 2024 84 426,848 11.3% 8,075,786 11.7% 2025 93 499,516 13.2% 8,773,067 12.7% 2026 79 390,930 10.3% 7,758,080 11.2% 2027 72 451,459 11.9% 8,292,193 12.0% 2028 42 172,545 4.6% 3,908,242 5.7% 2029 33 127,882 3.4% 2,664,209 3.9% 2030 45 255,810 6.7% 5,679,625 8.2% 2031 29 218,696 5.8% 4,279,779 6.2% 2032 25 293,002 7.7% 4,786,320 6.9% Thereafter 30 542,758 14.2% 8,389,551 12.2% Total / Weighted Average 594 3,791,820 100.0% $69,003,416 100.0%
24Town Center Virginia Beach, VA APPENDIX DEFINITIONS & RECONCILIATIONS
25 ANNUALIZED BASE RENT: For the properties in our retail & office portfolios, we calculate annualized base rent (“ABR”) 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 September 30, 2022, for in-place leases as of such date by (b) 12, and do 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 September 30, 2022. 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. DEFINITIONS 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, straight-line rents, cash ground rent payments for finance leases, the amortization of leasing incentives and above (below) market rents, and proceeds from government development grants, and payments made to purchase interest rate caps designated as cash flow hedges. 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. ANNUALIZED QUARTERLY RENT: For the properties in our multifamily portfolio, we calculate annualized quarterly rent (“AQR”) by multiplying (a) revenue for the quarter ended by (b) 4.
26 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. DEFINITIONS 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 RENTABLE SQUARE FOOTAGE: We define net rentable square footage for each of our retail & office properties as 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.
27 DEFINITIONS OCCUPANCY: The occupancy for each of our retail & office properties is calculated as (a) square footage under executed leases as of the last day of the quarter, divided by (b) net rentable square feet, expressed as a percentage. As of January 1, 2022, occupancy for our multifamily properties is calculated as (a) average of the number of occupied units/beds on the 20th day of each of the trailing three months from the reporting period end date, divided by (b) total units/beds available, as of such date expressed as a percentage. Management believes that this methodology best captures the average monthly occupancy. For periods prior to January 1, 2022, multifamily and student housing occupancy was calculated based on occupied units and beds as a percentage of total units and beds. 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 certain items, including but not limited to, acquisition, development and other pursuit costs, debt extinguishment losses, prepayment penalties, impairment of intangible assets and liabilities, mark-to-market adjustments on interest rate derivatives not designated as cash flow hedges, certain costs for interest rate caps designated as cash flow hedges, 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 with Nareit’s definition includes certain items that are not indicative of the results provided by our operating property portfolio and affect the comparability of our year-over-year performance. Accordingly, management believes that Normalized FFO is a more useful performance measure. 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. PROPERTY/STABILIZED PROPERTY ADJUSTED EBITDA: We calculate Property Adjusted EBITDA as EBITDA coming solely from our operating properties. When referring to Stabilized Property Adjusted EBITDA, we exclude 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 stabilized upon 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. 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. Management believes that Stabilized Property Adjusted EBITDA provides useful supplemental information to investors regarding our properties’ recurring 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 Stabilized Property Adjusted EBITDA or similarly titled measures.
28 DEFINITIONS STABILIZED PROPERTY DEBT: We calculate Stabilized Property Debt as our total debt secured by our stabilized properties, excluding loans associated with our development pipeline and our unsecured line of credit. TOTAL ADJUSTED EBITDA: We calculate Total Adjusted EBITDA as net income (loss) (calculated in accordance with GAAP), excluding interest expense, income taxes, depreciation and amortization, gains (or losses) from sales of depreciable operating property, impairment of real estate assets, debt extinguishment losses, non-cash stock compensation and mark-to-market adjustments on interest rate derivates, other one-time adjustments including non-recurring bad debt and termination fees. Management believes Total 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. 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 not considered stabilized.
29 PROPERTY PORTFOLIO AS OF SEPTEMBER 30, 2022 (1) See appendix for definitions. (2) The Company leases all or a portion of the land underlying this property pursuant to a ground lease. Retail Properties - Stabilized Location Year Built / Redeveloped Net Rentable SF Occupancy(1) ABR(1) ABR per Occupied SF(1) Anchor Tenant(s) Town Center of Virginia Beach 249 Central Park Retail Virginia Beach, VA 2004 92,456 100.0% $2,558,007 $27.67 Cheesecake Factory, Brooks Brothers Apex Entertainment Virginia Beach, VA 2002/2020 103,335 100.0% 1,545,919 14.96 Apex Entertainment, USI Columbus Village Virginia Beach, VA 2013/2020 62,207 100.0% 1,898,409 30.52 Barnes & Noble, CAVA, Shake Shack Columbus Village II Virginia Beach, VA 1996 92,061 96.7% 1,258,921 14.14 BB&B, Regal Commerce Street Retail Virginia Beach, VA 2008 19,173 100.0% 963,495 50.25 Yard House Fountain Plaza Retail Virginia Beach, VA 2004 35,961 93.7% 1,101,938 32.69 Ruth's Chris, Nando's Premier Retail Virginia Beach, VA 2018 39,015 86.8% 1,140,886 33.70 Williams Sonoma, Pottery Barn South Retail Virginia Beach, VA 2002 38,515 100.0% 1,000,503 25.98 lululemon, free people, CPK Studio 56 Retail Virginia Beach, VA 2007 11,594 100.0% 406,008 35.02 Rocket Title, Legal Sea Foods Grocery Anchored Broad Creek Shopping Center(2) Norfolk, VA 2001 121,504 95.7% $2,193,320 $18.86 Food Lion, PetSmart Broadmoor Plaza South Bend, IN 1980 115,059 98.2% 1,354,200 11.99 Kroger Brooks Crossing Retail Newport News, VA 2016 18,349 78.3% 218,623 15.21 Various Small Shops (grocery shadow) Delray Beach Plaza(2) Delray Beach, FL 2021 87,207 100.0% 2,997,459 34.37 Whole Foods Greenbrier Square Chesapeake, VA 2017 260,710 95.4% 2,486,750 10.00 Kroger, Homegoods, Dick's Sporting Goods Greentree Shopping Center Chesapeake, VA 2014 15,719 92.6% 325,080 22.33 Various Small Shops (grocery shadow) Hanbury Village Chesapeake, VA 2009 98,638 98.7% 1,976,529 20.30 Harris Teeter Lexington Square Lexington, SC 2017 85,440 98.3% 1,849,156 22.01 Lowes Foods Market at Mill Creek Mt. Pleasant, SC 2018 80,319 97.7% 1,840,444 23.45 Lowes Foods North Pointe Center Durham, NC 2009 226,083 100.0% 2,921,047 12.92 Harris Teeter Parkway Centre Moultrie, GA 2017 61,200 100.0% 850,761 13.90 Publix Parkway Marketplace Virginia Beach, VA 1998 37,804 100.0% 779,117 20.61 Rite Aid (grocery shadow) Perry Hall Marketplace Perry Hall, MD 2001 74,256 98.0% 1,245,907 17.13 Safeway Sandbridge Commons Virginia Beach, VA 2015 69,417 100.0% 941,946 13.57 Harris Teeter Tyre Neck Harris Teeter(2) Portsmouth, VA 2011 48,859 100.0% 559,948 11.46 Harris Teeter Regional Centers Dimmock Square Colonial Heights, VA 1998 106,166 88.5% $1,739,632 $18.51 Best Buy, Old Navy Harrisonburg Regal Harrisonburg, VA 1999 49,000 100.0% 717,850 14.65 Regal Cinemas Marketplace at Hilltop(2) Virginia Beach, VA 2001 116,953 100.0% 2,749,869 23.51 Total Wine, Panera, Chick-Fil-A Nexton Square Summerville, SC 2020 133,608 100.0% 3,472,955 25.99 Various Small Shops North Hampton Market Taylors, SC 2004 114,954 97.9% 1,500,110 13.33 PetSmart, Hobby Lobby Overlook Village Asheville, NC 1990 151,365 100.0% 2,196,685 14.51 T.J. Maxx|Homegoods, Ross Patterson Place Durham, NC 2004 160,942 97.9% 2,463,676 15.64 BB&B, PetSmart, DSW Providence Plaza Charlotte, NC 2008 103,118 100.0% 2,967,037 28.77 Cranfill, Sumner & Hartzog, Chipotle Red Mill Commons Virginia Beach, VA 2005 373,808 96.3% 6,809,480 18.91 Homegoods, Walgreens Southgate Square Colonial Heights, VA 2016 260,131 100.0% 3,750,725 14.42 Burlington, PetSmart, Michaels, Conn's South Square Durham, NC 2005 109,590 100.0% 1,984,615 18.11 Ross, Petco, Office Depot Southshore Shops Chesterfield, VA 2006 40,307 97.5% 812,198 20.66 Buffalo Wild Wings Wendover Village Greensboro, NC 2004 176,997 98.8% 3,424,210 19.59 T.J. Maxx, Petco, Beauty World Total Retail Portfolio 3,791,820 98.0% $69,003,416 $18.57
30 PROPERTY PORTFOLIO CONT. AS OF SEPTEMBER 30, 2022 (1) See appendix for definitions. (2) The Company leases all or a portion of the land underlying this property pursuant to a ground lease. (3) The Company occupies 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. (4) The ABR for Liberty, Cosmopolitan, Edison, and 1405 Point excludes approximately $0.2M, $1.0M, $0.3M and $0.4M, respectively, from ground floor retail leases. Office Properties- Stabilized Location Net Rentable SF Year Built Occupancy(1) ABR(1) ABR per Occupied SF(1) Anchor Tenant(s) Town Center of Virginia Beach 4525 Main Street Virginia Beach, VA 235,088 2014 100.0% $7,134,452 $30.35 Clark Nexsen, Anthropologie, Mythics Armada Hoffler Tower(3) Virginia Beach, VA 315,916 2002 98.7% 9,415,000 30.19 AHH, Troutman Pepper, Williams Mullen One Columbus Virginia Beach, VA 129,066 1984 98.3% 3,232,698 25.48 Truist, HBA Two Columbus Virginia Beach, VA 108,459 2009 98.0% 2,899,859 27.28 Hazen & Sawyer, Fidelity Harbor Point - Baltimore Waterfront Constellation Energy Building Baltimore, MD 490,735 2016 97.2% $14,800,069 $31.01 Constellation Energy Group Thames Street Wharf(3) Baltimore, MD 263,426 2010 100.0% 7,642,032 29.01 Morgan Stanley, JHU Medical Wills Wharf(2) Baltimore, MD 327,991 2020 90.8% 9,046,393 30.39 Canopy by Hilton, Transamerica, RBC, Franklin Templeton Other Brooks Crossing Office Newport News, VA 98,061 2019 100.0% $1,925,168 $19.63 Huntington Ingalls Industries One City Center Durham, NC 151,599 2019 89.3% 4,395,219 32.45 Duke University, WeWork Stabilized Office Total 2,120,341 96.8% $60,490,890 $29.48 Multifamily Properties- Stabilized Location Units Year Built / Redeveloped Occupancy(1) AQR (1) Monthly AQR per Occupied Unit Town Center of Virginia Beach Encore Apartments Virginia Beach, VA 286 2014 97.3% $5,703,288 $1,708 Premier Apartments Virginia Beach, VA 131 2018 95.2% 2,843,412 1,900 The Cosmopolitan(4) Virginia Beach, VA 342 2006/2020 94.7% 8,668,380 2,230 Harbor Point - Baltimore Waterfront 1405 Point(2)(4) Baltimore, MD 289 2018 97.1% $8,599,284 $2,554 1305 Dock Street Baltimore, MD 103 2016 96.4% 2,959,332 2,484 Other Edison Apartments(4) Richmond, VA 174 2014 97.5% $3,070,116 $1,508 Greenside Apartments Charlotte, NC 225 2018 98.4% 4,660,200 1,754 Liberty Apartments(4) Newport News, VA 197 2013 96.3% 3,554,640 1,561 Smith's Landing(2) Blacksburg, VA 284 2009 94.7% 5,382,168 1,668 Gainesville Apartments Gainesville, GA 223 2022 96.7% 4,768,752 1,843 Multifamily Total 2,254 96.4% $50,209,572 $1,926
31 $ IN THOUSANDS RECONCILIATION OF DEBT & EBITDA (1) Excludes GAAP adjustments. Three Months Ended 9/30/2022 6/30/2022 3/31/2022 12/31/2021 Property Net Operating Income $35,542 $36,702 $36,562 $32,270 Property Other Income (Expense), Net (30) (190) 104 (74) Amortization of Right of Use Assets (278) (277) (278) (278) Impairment of Intangible Assets and Liabilities - (85) (47) 83 Property Adjusted EBITDA $35,234 $36,150 $36,341 $32,001 Acquisition - - 826 - Disposition (368) (496) - (730) Development - (771) (674) (681) Stabilized Portfolio Adjusted EBITDA $34,866 $34,883 $36,493 $30,590 Construction Gross Profit 2,772 1,855 829 713 Corporate G&A (3,708) (3,446) (4,552) (3,482) Non-Cash Stock Comp 614 506 1,609 400 Acquisition, Development & Other Pursuit Costs - (26) (11) (1) Interest Income 3,487 3,350 3,568 3,829 Other Income (Expense), Net 5 89 (31) 5 Add Back: Unstabilized Development - 771 674 681 Total Adjusted EBITDA $38,036 $37,982 $38,579 $32,735 Stabilized Portfolio Debt $684,704 $768,852 $812,703 $664,985 Stabilized Portfolio Debt / Stabilized Portfolio Adjusted EBITDA 4.9x 5.5x 5.6x 5.4x Total Debt(1) 1,042,955 1,165,108 1,179,296 957,387 Cash (59,565) (76,412) (39,486) (40,443) Net Debt $983,390 $1,088,696 $1,139,810 $916,944 Net Debt Plus Ancillary Debt/Total Adjusted EBITDA 6.5x 7.2x 7.4x 7.0x Preferred 171,085 171,085 171,085 171,085 Net Debt + Preferred $1,154,475 $1,259,781 $1,310,895 $1,088,029 Net Debt + Preferred /Total Adjusted EBITDA 7.6x 8.3x 8.5x 8.3x
32 QUARTER TO DATE(1) $ IN THOUSANDS AS OF SEPTEMBER 30, 2022 CAPITAL EXPENDITURES (1) Excludes activity related to held for sale, acquired and/or disposed properties. YEAR TO DATE(1) Leasing Commissions Lease Incentive Tenant Improvements Land Improvements Building Improvements Furniture Fixtures & Equipment Total Second Generation Capex Retail $371 - $212 $135 $741 - $1,459 Office 41 - - - 438 - 479 Multifamily 15 - - 8 1,040 54 1,117 Total Portfolio $427 - $212 $143 $2,219 $54 $3,055 Leasing Commissions Lease Incentive Tenant Improvements Land Improvements Building Improvements Furniture Fixtures & Equipment Total Second Generation Capex Retail $1,328 - $2,057 $563 $3,297 - $7,246 Office 353 - 787 - 1,238 - 2,378 Multifamily 17 - 211 126 2,442 781 3,578 Total Portfolio $1,698 - $3,055 $689 $6,977 $781 $13,202
33 RECONCILIATION TO PROPERTY PORTFOLIO NOI $ IN THOUSANDS (1) Includes expenses associated with the Company’s in-house asset management division. Three months ended 9/30 Nine Months Ended 9/30 2022 2021 2022 2021 Office Same Store Rental revenues $10,315 $10,252 $30,861 $30,752 Property expenses 3,960 3,825 11,219 10,837 NOI 6,355 6,427 19,642 19,915 Non-Same Store NOI(1) 5,402 550 15,173 1,869 Segment NOI $11,757 $6,977 $34,815 $21,784 Retail Same Store Rental revenues $19,718 $19,062 $54,650 $51,628 Property expenses 5,061 4,886 13,828 13,223 NOI 14,657 14,176 40,822 38,405 Non-Same Store NOI(1) 940 677 6,406 3,851 Segment NOI $15,597 $14,853 $47,228 $42,256 Multifamily Same Store Rental revenues $11,222 $10,624 $32,901 $30,399 Property expenses 4,516 4,327 12,624 12,274 NOI 6,706 6,297 20,277 18,125 Non-Same Store NOI(1) 1,482 3,173 6,486 9,359 Segment NOI $8,188 $9,470 $26,763 $27,484 Total Property Portfolio NOI $35,542 $31,300 $108,806 $91,524
34 RECONCILIATION TO GAAP NET INCOME $ IN THOUSANDS Office Retail Multifamily Total Rental Properties General Contracting & Real Estate Services Total Segment revenues 18,687$ 21,223$ 13,833$ 53,743$ 69,024$ 122,767$ Segment expenses 6,930 5,626 5,645 18,201 66,252 84,453 Net operating income 11,757$ 15,597$ 8,188$ 35,542$ 2,772$ 38,314$ Depreciation and amortization (17,527) General and administrative expenses (3,854) Acquisition, development and other pursuit costs - Impairment charges - Gain (loss) on real estate dispositions 33,931 Interest income 3,490 Interest expense (10,345) Loss on extinguishment of debt (2,123) Unrealized credit loss release (provision) 42 Amortization of right-of-use assets - finance leases (278) Change in fair value of derivatives and other 782 Other income (expense) 118 Income tax benefit (provision) (181) Net income 42,369$ Net loss (income) attributable to noncontrolling interest in investment entities (5,583) Preferred stock dividends (2,887) Net income attributable to AHH and OP unitholders 33,899$ Nine Months Ended 9/30/2022 Office Retail Multifamily Total Rental Properties General Contracting & Real Estate Services Total Segment revenues 54,024$ 64,197$ 45,381$ 163,602$ 138,947$ 302,549$ Segment expenses 19,209 16,969 18,618 54,796 133,491 188,287 Net operating income 34,815$ 47,228$ 26,763$ 108,806$ 5,456$ 114,262$ Depreciation and amortization (54,865) General and administrative expenses (12,179) Acquisition, development and other pursuit costs (37) Impairment charges (333) Gain (loss) on real estate dispositions 53,424 Interest income 10,410 Interest expense (28,747) Unrealized credit loss release (provision) (858) Amortization of right-of-use assets - finance leases (833) Loss on extinguishment of debt (2,899) Change in fair value of derivatives and other 7,512 Other income (expense) 415 Income tax benefit (provision) 140 Net income 85,412$ Net loss attributable to noncontrolling interest in investment entities (5,811) Preferred stock dividends (8,661) Net income attributable to AHH and OP unitholders 70,940$ Three Months Ended 9/30/2022
35 RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA $ IN THOUSANDS Three Months Ended 9/30/2022 6/30/2022 3/31/2022 12/31/2021 Net income attributable to common stockholders and OP unitholders $33,899 $27,752 $9,289 $361 Excluding: Depreciation and amortization 17,527 18,781 18,557 16,616 Loss (gain) on real estate dispositions (33,931) (19,493) - (15,436) Impairment of real estate assets - 201 - 18,339 Income tax provision (benefit) 181 (20) (301) (220) Interest expense 10,345 9,371 9,031 8,685 Change in fair value of derivatives and other (782) (2,548) (4,182) (1,344) Preferred dividends 2,887 2,887 2,887 2,887 Loss on extinguishment of debt 2,123 618 158 3,690 Unrealized credit loss provision (release) (42) 295 605 (508) Investment Entities 5,583 128 100 (5) Non-cash stock compensation 614 506 1,609 400 Adjusted EBITDA $38,404 $38,478 $37,753 $33,465 Dispositions (368) (496) - (730) Acquisitions (full quarter) - - 826 - Total Adjusted EBITDA $38,036 $37,982 $38,579 $32,735 Construction Gross Profit (2,772) (1,855) (829) (713) Corporate G&A 3,708 3,446 4,552 3,482 Non-Cash Stock Comp (614) (506) (1,609) (400) Acquisition, Development & Other Pursuit Costs - 26 11 1 Interest income (3,487) (3,350) (3,568) (3,829) Other income (expense), net (5) (89) 31 (5) Add Back: Unstabilized Development - (771) (674) (681) Stabilized Portfolio Adjusted EBITDA $34,866 $34,883 $36,493 $30,590 Acquisition - - (826) - Disposition 368 496 - 730 Development - 771 674 681 Property Adjusted EBITDA $35,234 $36,150 $36,341 $32,001