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 4, 2024
(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 4, 2024 , Armada Hoffler Properties, Inc. (the “Company”) issued a press release announcing its financial position as of September 30, 2024, results of operations for the three months ended September 30, 2024, and other related information. Also on November 4, 2024 , 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, 2024. 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 | |||||||
| 99.1 | ||||||||
| 99.2 | ||||||||
| 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 4, 2024 | By: | /s/ Matthew T. Barnes-Smith | ||||||
| Matthew T. Barnes-Smith | ||||||||
| Chief Financial Officer, Treasurer and Corporate Secretary | ||||||||
Exhibit 99.1
 | PRESS RELEASE | |||||||
ARMADA HOFFLER REPORTS THIRD QUARTER 2024 RESULTS
GAAP Net Loss of $10.4 million
Normalized FFO of $0.35 Per Diluted Share
Office Same Store NOI Growth of 6.1% (GAAP)
Positive Office Renewal Spreads of 18.5% (GAAP) and 0.8% (Cash)
Office Occupancy Increased to 94.7%
Positive Retail Renewal Spreads of 13.1% (GAAP) and 7.8% (Cash)
Retail Occupancy Increased to 96.2%
Positive Tradeouts on Multifamily Renewals of 1.8%
Narrowed 2024 Full-Year Normalized FFO Guidance Range of $1.25 to $1.27 Per Diluted Share
VIRGINIA BEACH, VA, November 4, 2024 – Armada Hoffler Properties, Inc. (NYSE: AHH) today announced its results for the quarter ended September 30, 2024 and provided an update on current events and earnings guidance.
Third Quarter and Recent Highlights:
•Net loss attributable to common stockholders and OP Unit holders of $10.4 million, or $0.11 per diluted share, compared to net income attributable to common stockholders and OP Unit holders of $5.3 million, or $0.06 per diluted share, for the three months ended September 30, 2023.
•Funds from operations attributable to common stockholders and OP Unit holders ("FFO") of $12.7 million, or $0.14 per diluted share, compared to $27.6 million, or $0.31 per diluted share, for the three months ended September 30, 2023. See "Non-GAAP Financial Measures."
•Normalized funds from operations attributable to common stockholders and OP Unit holders ("Normalized FFO") of $31.4 million, or $0.35 per diluted share, compared to $27.7 million, or $0.31 per diluted share, for the three months ended September 30, 2023. See "Non-GAAP Financial Measures."
•Narrowed the Company's previous guidance range for 2024 full-year Normalized FFO of $1.25 to $1.27 per diluted share.
•As of September 30, 2024, weighted average stabilized portfolio occupancy was 95.4%. Retail occupancy was 96.2%, office occupancy was 94.7%, and multifamily occupancy was 95.3%.
•Positive spreads on renewals across all segments:
◦Retail 13.1% (GAAP) and 7.8% (Cash)
◦Office 18.5% (GAAP) and 0.8% (Cash)
◦Multifamily 1.8% (GAAP and Cash)
""This quarter’s results, including our 95.4% stabilized portfolio wide occupancy, underscore our best-in-class portfolio, featuring minimal commercial lease maturities for the next few years, that continues to provide long term value," said Louis Haddad, Chief Executive Officer. "The Company is moving toward a stronger balance sheet, higher emphasis on property NOI and less reliance on fee income over time and I look forward to supporting Shawn and the rest of the management team as Executive Chair.”
•Executed 28 lease renewals and 9 new leases during the third quarter for an aggregate of 273,212 of net rentable square feet.
•Office Same Store Net Operating Income ("NOI") increased 6.1% on a GAAP basis compared to the quarter ended September 30, 2023.
•Third-party construction backlog as of September 30, 2024 was $193.1 million and construction gross profit for the third quarter was $3.4 million.
•During the third quarter of 2024, unrealized losses on non-designated interest rate derivatives that negatively affected FFO were $16.7 million. As of September 30, 2024, the value of the Company’s entire interest rate derivative portfolio, net of unrealized losses, was $11.1 million. These losses are excluded from Normalized FFO.
•In July, realized $25.8 million in cash upon full redemption of the Solis City Park II preferred equity investment.
•Raised $108.7 million of gross proceeds in an underwritten public offering of 10.35 million shares of the Company's common stock at a public offering price of $10.50 per share. Net proceeds, after deducting the underwriting discount and offering expenses, totaled $103.4 million.
Financial Results
Net loss attributable to common stockholders and OP Unit holders for the third quarter decreased to $10.4 million compared to net income attributable to common stockholders and OP Unit holders of $5.3 million for the third quarter of 2023. The period-over-period change was primarily due to a decrease in the fair value of undesignated interest rate swap derivatives as well as higher interest expense, partially offset by an increase in portfolio NOI and general contracting gross profit recognized during the quarter.
FFO attributable to common stockholders and OP Unit holders for the third quarter was $12.7 million compared to $27.6 million for the third quarter of 2023. The period-over-period decrease in FFO was primarily due to a decrease in the fair value of undesignated interest rate swap derivatives, as well as higher interest expense, partially offset by an increase in portfolio NOI, interest income, and general contracting gross profit recognized during the quarter. Normalized FFO attributable to common stockholders and OP Unit holders for the third quarter increased to $31.4 million compared to $27.7 million for the third quarter of 2023. The period-over-period increase in Normalized FFO was due to increases in portfolio NOI, interest income, and general contracting gross profit recognized during the quarter, partially offset by higher interest expense.
Operating Performance
At the end of the third quarter, the Company’s retail, office, and multifamily stabilized operating property portfolios were 96.2%, 94.7%, and 95.3% occupied, respectively.
Total construction contract backlog was $193.1 million as of September 30, 2024.
Interest income from real estate financing investments was $4.1 million for the three months ended September 30, 2024.
2
Balance Sheet and Financing Activity
As of September 30, 2024, the Company had $1,330.1 million of total debt outstanding, including $164.0 million outstanding under its revolving credit facility. Total debt outstanding excludes GAAP adjustments and deferred financing costs. Approximately 89% of the Company’s debt had fixed interest rates or was subject to interest rate swaps as of September 30, 2024. As of September 30, 2024, the Company’s debt was 89% fixed or economically hedged after considering interest rate swaps.
During the three months ended September 30, 2024, the Company issued 1,886,112 shares of common stock through its at-the-market equity offering program for total gross proceeds of approximately $22.1 million at an average gross price per share of $11.71.
On September 27, 2024, the Company raised $108.7 million of gross proceeds in an underwritten public offering of 10.35 million shares of its common stock at a public offering price of $10.50 per share. Net proceeds, after deducting the underwriting discount and offering expenses, totaled $103.4 million.
Outlook
The Company adjusted its 2024 full-year Normalized FFO guidance range to $1.25 to $1.27 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 2024 earnings guidance during tomorrow's webcast and conference call.
Full-year 2024 Guidance [1][2] | Expected Ranges | |||||||||||||
| Portfolio NOI | $171.0 | M | $172.2 | M | ||||||||||
| Construction Segment Gross Profit | $12.3 | M | $13.5 | M | ||||||||||
| G&A Expenses | ($18.7 | M) | ($18.5 | M) | ||||||||||
| Interest Income | $18.2 | M | $18.4 | M | ||||||||||
Adjusted Interest Expense[3] | ($55.6 | M) | ($54.8 | M) | ||||||||||
| Normalized FFO per diluted share | $1.25 | $1.27 | ||||||||||||
[1] Ranges exclude certain items per the Company ’s Normalized FFO definition: Normalized FFO excludes certain items, including debt extinguishment losses and prepayment penalties, impairment and accelerated amortization of intangible assets and liabilities, property acquisition, development, and other pursuit costs, mark-to-market adjustments for interest rate derivatives not designated as cash flow hedges, amortization of payments made to purchase interest rate caps and swaps 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. 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.
[2] Includes the following assumptions:
•Southern Post delivery schedule update
•Initial delivery of the T. Rowe Price Global HQ and Allied | Harbor Point in the first quarter of 2025
[3] Includes the interest expense on finance leases and interest receipts of non-designated derivatives.
3
Supplemental Financial Information
Further details regarding operating results, properties, and leasing statistics can be found in the Company’s supplemental financial package available on the Investors page at ArmadaHoffler.com.
Webcast and Conference Call
The Company will host a webcast and conference call on Tuesday, November 5, 2024 at 8:30 a.m. Eastern Time to review financial results and discuss recent events. The recorded webcast will be available through the Investors page of the Company’s website, ArmadaHoffler.com. To participate in the call, please dial (+1) 800 549 8228 (toll-free dial-in number) or (+1) 646 564 2877 (toll dial-in number). The conference ID is 79550. A replay of the conference call will be available through Wednesday, December 4, 2024 by dialing (+1) 888 660 6264 (toll-free dial-in number) or (+1) 646 517 3975 (toll dial-in number) and providing passcode 79550#.
About Armada Hoffler Properties, Inc.
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 retail, office, and multifamily properties located primarily in the Mid-Atlantic and Southeastern United States. The Company also provides general construction and development services to third-party clients, in addition to developing and building properties to be placed in their stabilized portfolio. Founded in 1979 by Daniel A. Hoffler, Armada Hoffler has elected to be taxed as a REIT for U.S. federal income tax purposes. For more information visit ArmadaHoffler.com.
Forward-Looking Statements
Certain matters within this press release are discussed using forward-looking language as specified in the Private Securities Litigation Reform Act of 1995, and, as such, may involve known and unknown risks, uncertainties and other factors that may cause the actual results or performance to differ from those projected in the forward-looking statement. These forward-looking statements may include comments relating to the current and future performance of the Company’s operating property portfolio, the Company’s development pipeline, the Company's real estate financing 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. Forward-looking statements depend on assumptions, data or methods which may be incorrect or imprecise, and the Company may not be able to realize any forward-looking statement. 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, 2023, 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.
4
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, debt extinguishment losses and prepayment penalties, impairment and accelerated amortization of intangible assets and liabilities, property acquisition, development, and other pursuit costs, mark-to-market adjustments for interest rate derivatives not designated as cash flow hedges, amortization of payments made to purchase interest rate caps and swaps 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. Other equity REITs may not calculate Normalized FFO in the same manner as we do, and, accordingly, our Normalized FFO may not be comparable to such other REITs' Normalized FFO.
NOI is the measure used by the Company’s chief operating decision-maker to assess segment performance. The Company calculates NOI as segment revenues less segment expenses. Segment revenues include rental revenues (base rent, expense reimbursements, termination fees, and other revenue) for our property segments, general contracting and real estate services revenues for our general contracting and real estate services segment, and interest income for our real estate financing segment. Segment expenses include rental expenses and real estate taxes for our property segments, general contracting and real estate services expenses for our general contracting and real estate services segment, and interest expense for our real estate financing segment. Segment NOI for the general contracting and real estate services and real estate financing segments is also referred to as segment gross profit. 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.
5
ARMADA HOFFLER PROPERTIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
| September 30, 2024 | December 31, 2023 | |||||||||||||
| (Unaudited) | ||||||||||||||
| ASSETS | ||||||||||||||
| Real estate investments: | ||||||||||||||
| Income producing property | $ | 2,211,991 | $ | 2,093,032 | ||||||||||
| Held for development | 10,483 | 11,978 | ||||||||||||
| Construction in progress | 33,714 | 102,277 | ||||||||||||
| 2,256,188 | 2,207,287 | |||||||||||||
| Accumulated depreciation | (443,515) | (393,169) | ||||||||||||
| Net real estate investments | 1,812,673 | 1,814,118 | ||||||||||||
| Cash and cash equivalents | 43,852 | 27,920 | ||||||||||||
| Restricted cash | 1,874 | 2,246 | ||||||||||||
| Accounts receivable, net | 51,408 | 45,529 | ||||||||||||
| Notes receivable, net | 117,797 | 94,172 | ||||||||||||
| Construction receivables, including retentions, net | 106,190 | 126,443 | ||||||||||||
| Construction contract costs and estimated earnings in excess of billings | 315 | 104 | ||||||||||||
| Equity method investments | 155,330 | 142,031 | ||||||||||||
| Operating lease right-of-use assets | 22,898 | 23,085 | ||||||||||||
| Finance lease right-of-use assets | 89,381 | 90,565 | ||||||||||||
| Acquired lease intangible assets | 97,698 | 109,137 | ||||||||||||
| Other assets | 61,723 | 87,548 | ||||||||||||
| Total Assets | 2,561,139 | 2,562,898 | ||||||||||||
| LIABILITIES AND EQUITY | ||||||||||||||
Indebtedness, net | 1,327,971 | 1,396,965 | ||||||||||||
| Accounts payable and accrued liabilities | 44,798 | 31,041 | ||||||||||||
| Construction payables, including retentions | 115,472 | 128,290 | ||||||||||||
| Billings in excess of construction contract costs and estimated earnings | 11,881 | 21,414 | ||||||||||||
| Operating lease liabilities | 31,404 | 31,528 | ||||||||||||
| Finance lease liabilities | 92,457 | 91,869 | ||||||||||||
| Other liabilities | 55,664 | 56,613 | ||||||||||||
| Total Liabilities | 1,679,647 | 1,757,720 | ||||||||||||
| Total Equity | 881,492 | 805,178 | ||||||||||||
| Total Liabilities and Equity | $ | 2,561,139 | $ | 2,562,898 | ||||||||||
6
ARMADA HOFFLER PROPERTIES, INC.
CONDENSED CONSOLIDATED INCOME STATEMENTS
(in thousands, except per share amounts)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||
| Revenues | ||||||||||||||||||||||||||
| Rental revenues | $ | 68,598 | $ | 62,913 | $ | 193,744 | $ | 179,082 | ||||||||||||||||||
| General contracting and real estate services revenues | 114,353 | 99,408 | 358,167 | 286,220 | ||||||||||||||||||||||
| Interest income | 4,701 | 3,690 | 13,959 | 10,823 | ||||||||||||||||||||||
| Total revenues | 187,652 | 166,011 | 565,870 | 476,125 | ||||||||||||||||||||||
| Expenses | ||||||||||||||||||||||||||
| Rental expenses | 16,652 | 14,756 | 46,344 | 41,392 | ||||||||||||||||||||||
| Real estate taxes | 6,184 | 5,867 | 17,995 | 16,910 | ||||||||||||||||||||||
| General contracting and real estate services expenses | 110,987 | 96,095 | 346,385 | 276,336 | ||||||||||||||||||||||
| Depreciation and amortization | 23,289 | 22,462 | 64,513 | 60,808 | ||||||||||||||||||||||
| Amortization of right-of-use assets - finance leases | 395 | 425 | 1,184 | 1,049 | ||||||||||||||||||||||
| General and administrative expenses | 5,187 | 4,286 | 15,564 | 13,786 | ||||||||||||||||||||||
| Acquisition, development, and other pursuit costs | 2 | — | 5,530 | 18 | ||||||||||||||||||||||
| Impairment charges | — | 5 | 1,494 | 107 | ||||||||||||||||||||||
| Total expenses | 162,696 | 143,896 | 499,009 | 410,406 | ||||||||||||||||||||||
| Gain on real estate dispositions, net | — | 227 | — | 738 | ||||||||||||||||||||||
| Operating income | 24,956 | 22,342 | 66,861 | 66,457 | ||||||||||||||||||||||
| Interest expense | (21,387) | (15,444) | (60,589) | (41,375) | ||||||||||||||||||||||
| Loss on extinguishment of debt | (113) | — | (113) | — | ||||||||||||||||||||||
| Change in fair value of derivatives and other | (10,308) | 2,466 | 6,978 | 5,024 | ||||||||||||||||||||||
| Unrealized credit loss provision | (198) | (694) | (53) | (871) | ||||||||||||||||||||||
| Other income (expense), net | 96 | 63 | 254 | 324 | ||||||||||||||||||||||
| (Loss) income before taxes | (6,954) | 8,733 | 13,338 | 29,559 | ||||||||||||||||||||||
| Income tax (provision) benefit | (592) | (310) | 120 | (834) | ||||||||||||||||||||||
| Net (loss) income | (7,546) | 8,423 | 13,458 | 28,725 | ||||||||||||||||||||||
| Net loss (income) attributable to noncontrolling interests in investment entities | 17 | (193) | (34) | (616) | ||||||||||||||||||||||
| Preferred stock dividends | (2,887) | (2,887) | (8,661) | (8,661) | ||||||||||||||||||||||
| Net (loss) income attributable to common stockholders and OP Unitholders | $ | (10,416) | $ | 5,343 | $ | 4,763 | $ | 19,448 | ||||||||||||||||||
7
ARMADA HOFFLER PROPERTIES, INC.
RECONCILIATION OF NET (LOSS) INCOME TO FFO & NORMALIZED FFO
(in thousands, except per share amounts)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||
| Net (loss) income attributable to common stockholders and OP Unitholders | $ | (10,416) | $ | 5,343 | $ | 4,763 | $ | 19,448 | ||||||||||||||||||
Depreciation and amortization, net (1) | 23,070 | 22,239 | 63,855 | 60,139 | ||||||||||||||||||||||
Gain on operating real estate dispositions, net (2) | — | — | — | — | ||||||||||||||||||||||
| Impairment of real estate assets | — | — | 1,494 | — | ||||||||||||||||||||||
| FFO attributable to common stockholders and OP Unitholders | $ | 12,654 | $ | 27,582 | $ | 70,112 | $ | 79,587 | ||||||||||||||||||
| Acquisition, development, and other pursuit costs | 2 | — | 5,530 | 18 | ||||||||||||||||||||||
| Accelerated amortization of intangible assets and liabilities | (5) | 5 | (5) | (615) | ||||||||||||||||||||||
| Loss on extinguishment of debt | 113 | — | 113 | — | ||||||||||||||||||||||
| Unrealized credit loss provision | 198 | 694 | 53 | 871 | ||||||||||||||||||||||
| Amortization of right-of-use assets - finance leases | 395 | 425 | 1,184 | 1,049 | ||||||||||||||||||||||
| Decrease (increase) in fair value of derivatives not designated as cash flow hedges | 16,669 | (1,484) | 12,109 | (1,974) | ||||||||||||||||||||||
| Amortization of interest rate derivatives on designated cash flow hedges | 73 | 513 | 454 | 3,598 | ||||||||||||||||||||||
| Severance related costs | 1,339 | — | 1,506 | — | ||||||||||||||||||||||
| Normalized FFO available to common stockholders and OP Unitholders | $ | 31,438 | $ | 27,735 | $ | 91,056 | $ | 82,534 | ||||||||||||||||||
| Net (loss) income attributable to common stockholders and OP Unitholders per diluted share and unit | $ | (0.1) | $ | 0.06 | $ | 0.05 | $ | 0.22 | ||||||||||||||||||
| FFO attributable to common stockholders and OP Unitholders per diluted share and unit | $ | 0.14 | $ | 0.31 | $ | 0.79 | $ | 0.90 | ||||||||||||||||||
| Normalized FFO attributable to common stockholders and OP Unitholders per diluted share and unit | $ | 0.35 | $ | 0.31 | $ | 1.02 | $ | 0.93 | ||||||||||||||||||
| Weighted average common shares and units - diluted | 90,598 | 89,589 | 89,293 | 88,908 | ||||||||||||||||||||||
________________________________________
(1) The adjustment for depreciation and amortization for the three and nine months ended September 30, 2024 excludes $0.2 million and $0.7 million, respectively, of depreciation attributable to our partners. The adjustment for depreciation and amortization for the three and nine months ended September 30, 2023 excludes $0.2 million and $0.7 million, respectively, of depreciation attributable to our partners. | ||
(2) The adjustment for gain on operating real estate dispositions for each of the three and nine months ended September 30, 2023 excludes $0.2 million for the gain on the disposition of a non-operating parcel adjacent to Brooks Crossing Retail. The adjustment for gain on operating real estate dispositions for the nine months ended September 30, 2023 also excludes $0.5 million for the gain on the disposition of a non-operating parcel at Market at Mill Creek. | ||
8
ARMADA HOFFLER PROPERTIES, INC.
RECONCILIATION OF NET (LOSS) INCOME TO SAME STORE NOI, CASH BASIS
(in thousands) (unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||||||||||||
Retail Same Store (1) | ||||||||||||||||||||||||||
| Same Store NOI, Cash Basis | $ | 17,960 | $ | 18,771 | $ | 49,002 | $ | 49,272 | ||||||||||||||||||
GAAP Adjustments (2) | 1,128 | 1,305 | 2,750 | 3,408 | ||||||||||||||||||||||
| Same Store NOI | 19,088 | 20,076 | 51,752 | 52,680 | ||||||||||||||||||||||
Non-Same Store NOI (3) | (497) | (185) | 5,144 | 3,133 | ||||||||||||||||||||||
| Segment NOI | 18,591 | 19,891 | 56,896 | 55,813 | ||||||||||||||||||||||
Office Same Store (4) | ||||||||||||||||||||||||||
| Same Store NOI, Cash Basis | 12,744 | 12,805 | 35,294 | 34,253 | ||||||||||||||||||||||
GAAP Adjustments (2) | 2,296 | 1,364 | 4,322 | 3,279 | ||||||||||||||||||||||
| Same Store NOI | 15,040 | 14,169 | 39,616 | 37,532 | ||||||||||||||||||||||
Non-Same Store NOI (3) | 4,077 | (319) | 7,820 | 1,871 | ||||||||||||||||||||||
| Segment NOI | 19,117 | 13,850 | 47,436 | 39,403 | ||||||||||||||||||||||
Multifamily Same Store (5) | ||||||||||||||||||||||||||
| Same Store NOI, Cash Basis | 8,213 | 8,540 | 22,954 | 23,226 | ||||||||||||||||||||||
GAAP Adjustments (2) | 209 | 202 | 625 | 605 | ||||||||||||||||||||||
| Same Store NOI | 8,422 | 8,742 | 23,579 | 23,831 | ||||||||||||||||||||||
Non-Same Store NOI (3) | (368) | (193) | 1,494 | 1,733 | ||||||||||||||||||||||
| Segment NOI | 8,054 | 8,549 | 25,073 | 25,564 | ||||||||||||||||||||||
| Total Property NOI | 45,762 | 42,290 | 129,405 | 120,780 | ||||||||||||||||||||||
| General contracting & real estate services gross profit | 3,366 | 3,313 | 11,782 | 9,884 | ||||||||||||||||||||||
| Real estate financing gross profit | 2,348 | 2,768 | 7,215 | 7,623 | ||||||||||||||||||||||
Interest income (6) | 629 | 194 | 1,921 | 566 | ||||||||||||||||||||||
| Depreciation and amortization | (23,289) | (22,462) | (64,513) | (60,808) | ||||||||||||||||||||||
| Amortization of right-of-use assets - finance leases | (395) | (425) | (1,184) | (1,049) | ||||||||||||||||||||||
| General and administrative expenses | (5,187) | (4,286) | (15,564) | (13,786) | ||||||||||||||||||||||
| Acquisition, development, and other pursuit costs | (2) | — | (5,530) | (18) | ||||||||||||||||||||||
| Impairment charges | — | (5) | (1,494) | (107) | ||||||||||||||||||||||
| Gain on real estate dispositions, net | — | 227 | — | 738 | ||||||||||||||||||||||
Interest expense (7) | (19,663) | (14,716) | (55,766) | (38,741) | ||||||||||||||||||||||
| Loss on extinguishment of debt | (113) | — | (113) | — | ||||||||||||||||||||||
| Change in fair value of derivatives and other | (10,308) | 2,466 | 6,978 | 5,024 | ||||||||||||||||||||||
| Unrealized credit loss provision | (198) | (694) | (53) | (871) | ||||||||||||||||||||||
| Other income (expense), net | 96 | 63 | 254 | 324 | ||||||||||||||||||||||
| Income tax (provision) benefit | (592) | (310) | 120 | (834) | ||||||||||||||||||||||
Net (loss) income | (7,546) | 8,423 | 13,458 | 28,725 | ||||||||||||||||||||||
| Net loss (income) attributable to noncontrolling interests in investment entities | 17 | (193) | (34) | (616) | ||||||||||||||||||||||
| Preferred stock dividends | (2,887) | (2,887) | (8,661) | (8,661) | ||||||||||||||||||||||
Net (loss) income attributable to AHH and OP unitholders | $ | (10,416) | $ | 5,343 | $ | 4,763 | $ | 19,448 | ||||||||||||||||||
9
(1) Retail same-store portfolio for the three and nine months ended September 30, 2024 and 2023 excludes Southern Post Retail and Columbus Village II due to redevelopment. Retail same-store portfolio for the nine months ended September 30, 2024 and 2023 also excludes Chronicle Mill Retail and The Interlock Retail. | ||
(2) GAAP Adjustments include adjustments for the net effects of straight-line rental revenues, the amortization of lease incentives and above/below market rents, the net effects of straight-line rental expenses, and ground rent expenses for finance leases. | ||
| (3) Includes expenses associated with the Company's in-house asset management division. | ||
(4) Office same-store portfolio for the three and nine months ended September 30, 2024 and 2023 excludes Southern Post Office. Office same-store portfolio for the nine months ended September 30, 2024 and 2023 also excludes Chronicle Mill Office and The Interlock Office. | ||
(5) Multifamily same-store portfolio for the three and nine months ended September 30, 2024 and 2023 excludes Chandler Residences. Multifamily same-store portfolio for the nine months ended September 30, 2024 and 2023 also excludes Chronicle Mill Apartments. | ||
(6) Excludes real estate financing segment interest income. | ||
(7) Excludes real estate financing segment interest expense. | ||
Contact:
Chelsea Forrest
Armada Hoffler
Vice President of Corporate Communications and Investor Relations
Email: CForrest@ArmadaHoffler.com
Phone: (757) 612-4248
10
SUPPLEMENTAL FINANCIAL PACKAGE
2 BOARD OF DIRECTORS Louis S. Haddad, Executive Chairman of the Board Daniel A. Hoffler, Chairman Emeritus of the Board Eva S. Hardy, Lead Independent Director George F. Allen, Independent Director James A. Carroll, Independent Director James C. Cherry, Independent Director Dennis H. Gartman, Independent Director A. Russell Kirk, Director F. Blair Wimbush, Independent Director CORPORATE OFFICERS Louis S. Haddad, Chief Executive Officer Shawn J. Tibbetts, President and Chief Operating Officer Matthew T. Barnes-Smith, Chief Financial Officer Eric E. Apperson, President of Construction Jefferies Peter Abramowitz (212) 336-7241 pabramowitz@jefferies.com Bank of America Merrill Lynch Jeff Spector (646) 855-1363 jeff.spector@bofa.com Janney, Montgomery, & Scott LLC Robert Stevenson (646) 840-3217 robertstevenson@janney.com ANALYST COVERAGE Armada Hoffler (NYSE: AHH) is a vertically integrated, self-managed real estate investment trust ("REIT") with over four decades of experience developing, building, acquiring, and managing high-quality retail, office, 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 its 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. Nick Thillman (414) 298-5053 nthillman@rwbaird.com CREDIT RATING Rating: BBB Agency: Morningstar DBRS Stifel Simon Yarmak (443) 224-1345 yarmaks@stifel.com
3 HIGHLIGHTS 1.8% Third Quarter Multifamily Tradeout for New and Renewed Leases $0.35 Third Quarter Normalized FFO Per Diluted Share 95.4% Wtd. Avg. Portfolio Occupancy as of September 30, 2024 6.1% Third Quarter Increase in Office Same Store NOI, GAAP 273K Square Feet of New and Renewed Commercial Space for the Third Quarter of 2024 $3.4M Third Quarter Construction Gross Profit 13.1% Third Quarter Retail Lease Renewal Spread Increase, GAAP 18.5% Third Quarter Office Lease Renewal Spread Increase, GAAP $4.1M Third Quarter Interest Income on Real Estate Financing Investments
4 (1) See appendix for definitions. Ranges include or exclude certain items as per definition. (2) See definition in appendix for further detail. Refer to the Hedging Activity slide for the breakdown of derivative interest income for the third quarter of 2024. 2024 OUTLOOK & ASSUMPTIONS OUTLOOK(1) LOW HIGH PORTFOLIO NOI $171.0M $172.2M CONSTRUCTION SEGMENT PROFIT $12.3M $13.5M G&A EXPENSES ($18.7M) ($18.5M) INTEREST INCOME $18.2M $18.4M ADJUSTED INTEREST EXPENSE(2) ($55.6M) ($54.8M) NORMALIZED FFO PER DILUTED SHARE $1.25 $1.27 GUIDANCE ASSUMPTIONS • Southern Post delivery schedule update • Harbor Point T. Rowe Price and Allied delivery schedule update
5 (1) See appendix for definitions. (2) Excludes GAAP adjustments. (3) During the first quarter of 2024, the Company reclassified certain mixed-use properties between segments in order to align the components of those properties with their tenant composition and has adjusted the fourth quarter of 2023 accordingly. (4) Total occupancy weighted by annualized rent. SUMMARY INFORMATION $ IN THOUSANDS, EXCEPT PER SHARE Three Months Ended (Unaudited) OPERATIONAL METRICS 9/30/2024 6/30/2024 3/31/2024 12/31/2023 Net (Loss) Income Attributable to Common Stockholders and OP Unitholders ($10,416) $375 $14,804 ($23,938) Net (Loss) Income per Diluted Share Attributable to Common Stockholders and OP Unitholders ($0.11) $0.00 $0.17 ($0.27) Normalized FFO Attributable to Common Stockholders and OP Unitholders 31,438 30,204 29,414 27,933 Normalized FFO per Diluted Share Attributable to Common Stockholders and OP Unitholders $0.35 $0.34 $0.33 $0.31 Stabilized Portfolio Debt / Stabilized Portfolio Adjusted EBITDAre 5.9x 6.4x 6.6x 6.7x Fixed Charge Coverage Ratio(1) 1.4x 1.4x 1.6x 2.7x CAPITALIZATION Common Shares Outstanding 79,696 67,388 66,987 66,793 Operating Partnership Units Outstanding 21,668 21,709 21,709 21,593 Common Shares and Operating Partnership Units Outstanding 101,364 89,097 88,696 88,386 Market Price per Common Share as of Last Trading Day of Quarter $10.83 $11.09 $10.40 $12.37 Common Equity Capitalization 1,097,772 988,086 922,440 1,093,334 Preferred Equity Capitalization 171,085 171,085 171,085 171,085 Total Equity Capitalization 1,268,857 1,159,171 1,093,525 1,264,419 Total Debt(2) 1,330,124 1,422,473 1,431,614 1,401,204 Total Capitalization $2,598,981 $2,581,644 $2,525,139 $2,665,623 STABILIZED PORTFOLIO OCCUPANCY(1)(3) Retail 96.2 % 95.4 % 95.4 % 96.1 % Office 94.7 % 94.3 % 93.6 % 95.2 % Multifamily 95.3 % 94.9 % 95.1 % 95.5 % Weighted Average(4) 95.4 % 94.9 % 94.7 % 95.6 % STABILIZED PORTFOLIO(3) Commercial Retail Portfolio Net Operating Income $18,622 $19,230 $18,909 $18,470 Number of Properties 48 48 48 48 Net Rentable Square Feet 4,037,298 4,037,662 4,034,206 4,033,642 Office Portfolio Net Operating Income $18,969 $14,734 $13,540 $12,058 Number of Properties 14 14 14 14 Net Rentable Square Feet 2,332,780 2,327,873 2,328,023 2,327,872 Multifamily Multifamily Portfolio Net Operating Income $7,982 $8,351 $8,786 $8,682 Number of Properties 11 11 11 11 Units 2,492 2,492 2,492 2,492
6 Three Months Ended Nine Months Ended 9/30/2024 9/30/2023 9/30/2024 9/30/2023 (Unaudited) Revenues Rental Revenues $68,598 $62,913 $193,744 $179,082 General Contracting and Real Estate Services Revenues 114,353 99,408 358,167 286,220 Interest Income 4,701 3,690 13,959 10,823 Total Revenues 187,652 166,011 565,870 476,125 Expenses Rental Expenses 16,652 14,756 46,344 41,392 Real Estate Taxes 6,184 5,867 17,995 16,910 General Contracting and Real Estate Services Expenses 110,987 96,095 346,385 276,336 Depreciation and Amortization 23,289 22,462 64,513 60,808 Amortization of Right-of-Use Assets - Finance Leases 395 425 1,184 1,049 General & Administrative Expenses 5,187 4,286 15,564 13,786 Acquisition, Development & Other Pursuit Costs 2 — 5,530 18 Impairment Charges — 5 1,494 107 Total Expenses 162,696 143,896 499,009 410,406 Gain on Real Estate Dispositions, Net — 227 — 738 Operating Income 24,956 22,342 66,861 66,457 Interest Expense (21,387) (15,444) (60,589) (41,375) Loss on Extinguishment of Debt (113) — (113) — Change in Fair Value of Derivatives and Other (10,308) 2,466 6,978 5,024 Unrealized Credit Loss Provision (198) (694) (53) (871) Other Income (Expense), Net 96 63 254 324 Income Before Taxes (6,954) 8,733 13,338 29,559 Income Tax (Provision) Benefit (592) (310) 120 (834) Net (Loss) Income ($7,546) $8,423 $13,458 $28,725 Net Loss (Income) Attributable to Noncontrolling Interests in Investment Entities 17 (193) (34) (616) Preferred Stock Dividends (2,887) (2,887) (8,661) (8,661) Net (Loss) Income Attributable to AHH and OP Unitholders ($10,416) $5,343 $4,763 $19,448 Net (Loss) Income per Diluted Share and Unit Attributable to AHH and OP Unitholders ($0.11) $0.06 $0.05 $0.22 Weighted Average Shares & OP Units - Diluted(1) 90,598 89,589 89,293 88,908 SUMMARY INCOME STATEMENT $ IN THOUSANDS, EXCEPT PER SHARE (1) Represents the weighted average number of common shares and OP Units outstanding during the respective periods presented.
7 SUMMARY BALANCE SHEET $ IN THOUSANDS As Of 9/30/2024 12/31/2023 (Unaudited) Assets Real Estate Investments: Income Producing Property $2,211,991 $2,093,032 Held for Development 10,483 11,978 Construction in Progress 33,714 102,277 Accumulated Depreciation (443,515) (393,169) Net Real Estate Investments 1,812,673 1,814,118 Cash and Cash Equivalents 43,852 27,920 Restricted Cash 1,874 2,246 Accounts Receivable, Net 51,408 45,529 Notes Receivable, Net 117,797 94,172 Construction Receivables, Including Retentions, Net 106,190 126,443 Construction Contract Costs and Estimated Earnings in Excess of Billings 315 104 Equity Method Investments 155,330 142,031 Operating Lease Right-of-Use Assets 22,898 23,085 Finance Lease Right-of-Use Assets 89,381 90,565 Acquired Lease Intangible Assets 97,698 109,137 Other Assets 61,723 87,548 Total Assets $2,561,139 $2,562,898 Liabilities and Equity Indebtedness, Net $1,327,971 $1,396,965 Accounts Payable and Accrued Liabilities 44,798 31,041 Construction Payables, Including Retentions 115,472 128,290 Billings in Excess of Construction Contract Costs and Estimated Earnings 11,881 21,414 Operating Lease Liabilities 31,404 31,528 Finance Lease Liabilities 92,457 91,869 Other Liabilities 55,664 56,613 Total Liabilities 1,679,647 1,757,720 Total Equity 881,492 805,178 Total Liabilities and Equity $2,561,139 $2,562,898
8 FFO, NORMALIZED FFO, & AFFO(1) $ IN THOUSANDS, EXCEPT PER SHARE Three Months Ended (Unaudited) Nine Months Ended (Unaudited) 9/30/2024 6/30/2024 3/31/2024 12/31/2023 9/30/2024 9/30/2023 Funds From Operations Net (Loss) Income Attributable to AHH and OP Unitholders ($10,416) $375 $14,804 ($23,938) $4,763 $19,448 Net (Loss) Income per Diluted Share ($0.11) $— $0.17 ($0.27) $0.05 $0.22 Depreciation and Amortization(2) 23,070 20,570 20,215 35,069 63,855 60,139 Impairment of Real Estate Assets — 1,494 — — 1,494 — FFO $12,654 $22,439 $35,019 $11,131 $70,112 $79,587 FFO per Diluted Share $0.14 $0.25 $0.40 $0.13 $0.79 $0.90 Normalized FFO Acquisition, Development, and Other Pursuit Costs 2 5,528 (3) — 66 5,530 18 Loss on Extinguishment of Debt 113 — — — 113 — Non-Cash GAAP Adjustments 588 166 478 (35) 1,232 1,305 Severance-Related Costs 1,339 — 167 — 1,506 — Decrease (Increase) in Fair Value of Derivatives 16,669 1,950 (6,510) 16,159 12,109 (1,974) Amortization of Interest Rate Derivatives on Designated Cash Flow Hedges 73 121 260 612 454 3,598 Normalized FFO $31,438 $30,204 $29,414 $27,933 $91,056 $82,534 Normalized FFO per Diluted Share $0.35 $0.34 $0.33 $0.31 $1.02 $0.93 Adjusted FFO Non-Cash Stock Compensation 710 744 2,192 729 3,646 2,951 Tenant Improvements, Leasing Commissions, Lease Incentives(4) (2,112) (6,239) (2,952) (4,796) (11,303) (8,434) Property-Related Capital Expenditures(4) (2,677) (5,313) (3,537) (3,728) (11,527) (8,102) Adjustment for Real Estate Financing Investment Modification and Exit Fees — — — — — (459) Non-Cash Interest Expense(5) 1,925 1,994 1,882 1,831 5,801 4,701 Cash Ground Rent Payment - Finance Lease (977) (980) (980) (993) (2,937) (2,483) GAAP Adjustments (2,666) (2,095) (1,738) 146 (6,499) (5,310) AFFO $25,641 $18,315 $24,281 $21,122 $68,237 $65,398 AFFO per Diluted Share $0.28 $0.21 $0.27 $0.24 $0.76 $0.74 Weighted Average Common Shares Outstanding 68,931 67,106 66,838 67,140 67,630 67,878 Weighted Average Operating Partnership Units Outstanding 21,667 21,709 21,613 21,593 21,663 21,030 Total Weighted Average Common Shares and OP Units Outstanding(6) 90,598 88,815 88,451 88,733 89,293 88,908 (1) See definitions in appendix. (2) Adjusted for the depreciation attributable to noncontrolling interests in consolidated investments. (3) Due to the write off of development costs related to an undeveloped land parcel in predevelopment. (4) Excludes development, redevelopment, and first-generation space. (5) Includes non-cash interest expense relating to indebtedness and interest expense on finance leases. (6) Represents the weighted average number of common shares and OP Units outstanding during the respective periods presented.
9 NET ASSET VALUE COMPONENT DATA (1) Excludes expenses associated with the Company’s in-house asset management division of $0.8M for the 3 months ended 9/30/2024. (2) Includes 100% of joint ventures. (3) Includes leases for spaces occupied by the Company, which are eliminated for GAAP purposes. (4) Representative of costs incurred to date. (5) Excludes lease right-of-use assets and lease liabilities. (6) Excludes GAAP adjustments. $ AND SHARES/UNITS IN THOUSANDS Stabilized Portfolio NOI (Cash) Three Months Ended 9/30/2024 Retail Office(3) Multifamily Total Stable Portfolio Portfolio NOI(1)(2) $17,958 $17,321 $8,141 $43,420 Non-Stabilized Properties NOI (31) 148 72 189 Signed Leases Not Yet Occupied or in Free Rent Period 295 868 — 1,163 Stable Portfolio NOI $18,222 $18,337 $8,213 $44,772 Intra-Quarter Transactions Net Acquisitions — — — — Net Dispositions — — — — Annualized $72,888 $73,348 $32,852 $179,088 Non-Stabilized Portfolio(4) As of 9/30/2024 Projects Under Development $— Properties in Lease Up 105,030 Development Opportunities 6,600 Unconsolidated JV Development 159,300 Total Non-Stabilized Portfolio $270,930 Third-Party General Contracting and Real Estate Services Trailing 12 Months General Contracting Gross Profit $15,316 Non-Property Assets(5) As of 9/30/2024 Cash and Restricted Cash $45,726 Accounts Receivable, Net 51,408 Other Notes Receivable 12,787 Real Estate Financing Investments(6) 107,541 Construction Receivables, Including Retentions(6) 106,190 Acquired Lease Intangible Assets 97,698 Other Assets / Costs in Excess of Earnings 62,038 Total Non-Property Assets $483,388 Liabilities(5) As of 9/30/2024 Mortgages and Notes Payable(6) $1,330,124 Accounts Payable and Accrued Liabilities 44,798 Construction Payables, Including Retentions 115,472 Other Liabilities(6) 66,926 Total Liabilities $1,557,320 Preferred Equity Liquidation Value Series A Cumulative Redeemable Perpetual Preferred Stock $171,085 Common Equity As of 9/30/2024 Total Common Shares Outstanding 79,696 Total OP Units Outstanding 21,668 Total Common Shares & OP Units Outstanding 101,364
10 CREDIT PROFILE $ IN THOUSANDS Debt to Adjusted EBITDAre 5.4x 5.6x 5.5x 4.9x 5.3x 5.4x 5.5x 6.2x 6.5x 6.6x 6.4x 5.9x 7.0x 7.4x 7.2x 6.5x 5.9x 6.6x 7.1x 7.1x 7.5x 7.4x 7.5x 7.2x Stabilized Portfolio Debt / Stabilized Portfolio Adjusted EBITDAre Net Debt / Total Adjusted EBITDAre Q4 2021 Q1 2 022 Q2 2022 Q3 2022 Q4 2022 Q1 2 023 Q2 2023 Q3 2023 Q4 2023 Q1 2 024 Q2 2024 Q3 2024 3.0x 3.5x 4.0x 4.5x 5.0x 5.5x 6.0x 6.5x 7.0x 7.5x 8.0x Total Debt Secured Debt Unsecured Debt % Fixed/Hedged Q4 2 02 1 Q1 2 02 2 Q2 2 02 2 Q3 2 02 2 Q4 2 02 2 Q1 2 02 3 Q2 2 02 3 Q3 2 02 3 Q4 2 02 3 Q1 2 02 4 Q2 2 02 4 Q3 2 02 4 $0 $200,000 $400,000 $600,000 $800,000 $1,000,000 $1,200,000 $1,400,000 $1,600,000 —% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 100.0% AFFO Payout Ratio 80% 81% 68% 76% 68% 83% 77% 77% 82% 75% 99% 72% Total Dividend AFFO AFFO Payout Ratio Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 0 5,000 10,000 15,000 20,000 25,000 30,000 —% 20% 40% 60% 80% 100% 120% Weighted Average Years to Maturity - Debt 5.6 5.1 5 5.5 4.7 4.4 4.6 4.2 3.9 3.7 3.6 3.5 Weighted Average Years to Maturity Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 0 1 2 3 4 5 6
11 LEVERAGE METRICS $ IN THOUSANDS SEE APPENDIX FOR DEFINITIONS, CALCULATIONS, AND RECONCILIATIONS (1) Includes income and debt related to development, real estate financing, construction, and other ancillary activities outside of our stabilized portfolio. (2) Reflects total debt less GAAP adjustments, cash, restricted cash, and other notes payable. Three Months Ended 9/30/2024 Stabilized Portfolio Adjusted EBITDAre $41,157 Stabilized Portfolio Debt $971,204 Stabilized Portfolio Debt / Stabilized Portfolio Adjusted EBITDAre 5.9 x Total Adjusted EBITDAre $44,878 Net Debt(2) $1,284,398 Net Debt/Total Adjusted EBITDAre(1) 7.2 x Net Debt + Preferred $1,455,483 Net Debt + Preferred /Total Adjusted EBITDAre 8.1 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 9.0 x 10.0 x 5.9x 7.2x 8.1x Stabilized Portfolio Debt / Stabilized Portfolio Adjusted EBITDAre Net Debt/Total Adjusted EBITDAre (1) Net Debt + Preferred / Total Adjusted EBITDAre
12 DEBT MANAGEMENT $ IN THOUSANDS AS OF SEPTEMBER 30, 2024 Total Debt Composition Weighted Average % of Debt Interest Rate Maturity Variable vs. Fixed-Rate Debt Variable-Rate Debt(1)(2) 10.6 % 6.4 % 2.6 Yrs Fixed-Rate Debt(3)(4) 89.4 % 4.3 % 3.6 Yrs Secured vs. Unsecured Debt Unsecured Debt(2) 55.9 % 4.8 % 2.6 Yrs Secured Debt(2) 44.1 % 4.1 % 4.6 Yrs Portfolio Weighted Average(2) 4.5 % 3.5 Yrs (1) Excludes debt subject to interest rate swap locks. (2) Represents the weighted average interest rate of the portfolio, inclusive of interest rate derivatives. (3) Includes debt subject to interest rate swap locks. (4) Excludes GAAP adjustments. Portfolio Weighted Average Interest Rate 3.0% 2.8% 3.0% 2.9% 3.6% 3.9% 4.0% 4.2% 4.0% 4.4% 4.6% 4.5% Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 —% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0%
13 (1) Includes debt subject to interest rate swap locks. (2) Excludes GAAP adjustments. (3) These swaps economically hedge the Company’s exposure to the senior construction loans on T. Rowe Price Global HQ and Allied | Harbor Point. HEDGING ACTIVITY GAINS (LOSSES) ON INTEREST RATE DERIVATIVES Three Months Ended Nine Months Ended Accounting Treatment(4) Statement of Comprehensive Income Location 9/30/2024 9/30/2023 9/30/2024 9/30/2023 Designated Hedges Interest Expense $ 1,462 $ 6,177 $ 6,729 $ 16,577 Non-Designated Hedges Change in Fair Value of Derivatives and Other 6,361 982 19,087 3,050 Total Realized Gains on Interest Rate Derivatives $ 7,823 $ 7,159 $ 25,816 $ 19,627 Designated Hedges Unrealized Cash Flow Hedge Gains (Losses)(5) $ (3,350) $ 3,488 $ 1,188 $ 9,868 Non-Designated Hedges Change in Fair Value of Derivatives and Other (16,669) 1,484 (12,109) $ 1,974 Total Unrealized (Losses) Gains on Interest Rate Derivatives $ (20,019) $ 4,972 $ (10,921) $ 11,842 Total Realized and Unrealized (Losses) Gains on Interest Rate Derivatives $ (12,196) $ 12,131 $ 14,895 $ 31,469 Interest Rate Swaps Not Allocated to Specific Asset Debt Effective Date Maturity Date SOFR Strike / Swap Fixed Rate Notional Amount October 2023 October 2025 2.75% $330,000 December 2023 December 2025 2.75% 300,000 Total Interest Rate Swaps $630,000 Fixed-Rate Debt(1)(2) $558,710 Fixed-Rate and Hedge Debt $1,188,710 Total Debt(2) $1,330,124 % Fixed or Hedged 89.4 % Interest Rate Swaps Allocated to Off Balance Sheet Joint Ventures(3) October 2023 October 2025 2.75% $90,000 November 2023 November 2025 2.75% 100,000 Total Interest Rate Swaps $190,000 $ IN THOUSANDS AS OF SEPTEMBER 30, 2024 (4) The Company only enters into interest rate derivatives to hedge its exposure to interest rate risk from floating rate debt. The Company may elect to designate an interest rate derivative as a cash flow hedge under US GAAP if certain criteria are met, which allows for reporting of realized gains (losses) net of the hedge item (interest expense). All income statement activity for derivatives that are not designated as cash flow hedges is reported within Change in fair value of derivatives and other in the Company’s Statement of Comprehensive Income. (5) Unrealized cash flow hedge gains (losses) is a component of comprehensive income (loss) and is excluded from net income (loss).
14 OUTSTANDING DEBT $ IN THOUSANDS (1) Excludes extension options. (2) Subject to a rate floor. (3) Does not reflect two 12-month extension options. (4) Includes debt subject to interest rate swap locks. Debt Maturities & Principal Payments Debt Stated Rate Effective Rate as of 9/30/2024 Maturity Date (1) 2024 2025 2026 2027 2028 Thereafter Outstanding as of 9/30/2024 Secured Debt - Stabilized Red Mill South 3.57 % 3.57 % May-2025 $ 89 $ 4,502 $ — $ — $ — $ — $ 4,591 The Everly SOFR+ 1.50 % 6.32 % (2) Dec-2025 (3) — 30,000 — — — — 30,000 Encore Apartments & 4525 Main Street 2.93 % 2.93 % Feb-2026 331 1,347 50,840 — — — 52,518 Thames Street Wharf SOFR+ 1.30 % 2.33 % (4) Sep-2026 762 3,050 63,007 — — — 66,819 Constellation Energy Building SOFR+ 1.50 % 6.43 % (2)(4) Nov-2026 — — 175,000 — — — 175,000 Southgate Square SOFR+ 1.90 % 6.82 % (2) Dec-2026 216 864 23,602 — — — 24,682 Nexton Square SOFR+ 1.95 % 6.77 % (2) Jun-2027 153 613 613 19,742 — — 21,121 Liberty SOFR+ 1.50 % 4.93 % (4) Sep-2027 89 364 382 19,496 — — 20,331 Greenbrier Square 3.74 % 3.74 % Oct-2027 98 399 415 18,370 — — 19,282 Lexington Square 4.50 % 4.50 % Sep-2028 78 320 335 351 12,287 — 13,371 Red Mill North 4.73 % 4.73 % Dec-2028 31 127 133 140 3,441 — 3,872 Greenside Apartments 3.17 % 3.17 % Dec-2029 199 808 834 861 886 26,933 30,521 Smith's Landing 4.05 % 4.05 % Jun-2035 253 1,037 1,081 1,126 1,172 9,168 13,837 The Edison 5.30 % 5.30 % Dec-2044 103 427 450 474 500 12,923 14,877 The Cosmopolitan 3.35 % 3.35 % Jul-2051 229 937 968 1,001 1,035 35,521 39,691 Total - Secured Stabilized Debt 2,631 44,795 317,660 61,561 19,321 84,545 530,513 Secured Debt - Development Pipeline Southern Post SOFR+ 2.25 % 7.07 % (2) Aug-2026 (3) — — 55,611 — — — 55,611 Total - Development Pipeline — — 55,611 — — — 55,611 Total Secured Debt 2,631 44,795 373,271 61,561 19,321 84,545 586,124 Unsecured Debt TD Unsecured Term Loan SOFR+ 1.35%-1.90% 4.85 % (4) May-2025 (5) — 95,000 — — — — 95,000 Senior Unsecured Revolving Credit Facility SOFR+ 1.30%-1.85% 6.42 % Jan-2027 (6) — — — 159,000 — — 159,000 Senior Unsecured Revolving Credit Facility (Fixed) SOFR+ 1.30%-1.85% 4.80 % Jan-2027 (6) — — — 5,000 — — 5,000 M&T Unsecured Term Loan SOFR+ 1.25%-1.80% 6.37 % Mar-2027 (5) — — — 35,000 — — 35,000 M&T Unsecured Term Loan (Fixed) SOFR+ 1.25%-1.80% c ) 5.05 % Mar-2027 (5) — — — 100,000 — — 100,000 Senior Unsecured Term Loan SOFR+ 1.25%-1.80% 6.37 % Jan-2028 — — — — 271,000 — 271,000 Senior Unsecured Term Loan (Fixed) SOFR+ 1.25%-1.80% 4.98 % Jan-2028 — — — — 79,000 — 79,000 Total Unsecured Debt — 95,000 — 299,000 350,000 — 744,000 Total Principal Balances $ 2,631 $ 139,795 $ 373,271 $ 360,561 $ 369,321 $ 84,545 $ 1,330,124 Other Notes Payable 6,122 Unamortized GAAP Adjustments (8,275) Indebtedness, Net $ 1,327,971 (5) Does not reflect one 12-month extension option. (6) Does not reflect two six-month extension options.
15 CAPITALIZATION & FINANCIAL RATIOS $ IN THOUSANDS, EXCEPT PER SHARE AS OF SEPTEMBER 30, 2024 (1) Represents the weighted average number of common shares and OP Units outstanding during the respective periods presented. (2) As of close of market on 09/30/24. (3) See appendix for definitions. (4) Excludes availability under construction loans. (5) Total Asset Value is calculated based on the terms of our credit facility agreement and therefore does not tie directly to the balance sheet. Debt % of Total Principal Balance Unsecured Revolving Credit Facility 12 % $164,000 Unsecured Term Loans 44 % 580,000 Mortgages Payable 44 % 586,124 Total Debt $1,330,124 Preferred Equity Shares Liquidation Value per Share Total Liquidation Value 6.75% Series A Cumulative Redeemable Perpetual Preferred Stock (NYSE: AHHPrA) 6,843 $25.00 $171,085 Common Equity % of Total Shares/ Units(1) Stock Price(2) Market Value Common Stock (NYSE: AHH) 79 % 79,696 $10.83 $863,108 Operating Partnership Units 21 % 21,668 $10.83 234,664 Equity Market Capitalization 101,364 $1,097,772 Total Capitalization $2,598,981 Enterprise Value $2,553,255 Total Debt to Enterprise Value 52 % Financial Ratios Debt Service Coverage Ratio(3) 1.5x Fixed Charge Coverage Ratio(3) 1.4x Stabilized Portfolio Debt / Stabilized Portfolio Adjusted EBITDAre 5.9x Net Debt / Total Adjusted EBITDAre 7.2x Net Debt Plus Preferred / Total Adjusted EBITDAre 8.1x Debt/Total Capitalization 51 % Liquidity(4) Cash on Hand $43,852 Availability Under Revolving Credit Facility 94,940 Total Liquidity $138,792 Unencumbered Properties % of Total Properties 55 % % of Annualized Base Rent 72 % Total Asset Value(5) $1,398,233 Preferred Equity 7% Debt 51% Common Equity 42%
16 PORTFOLIO PROFILE Multifamily Tradeout % of Portfolio ABR Expiring for Top 20 Tenants Retail Office Weighted Average Lease Term Remaining (Years) Commercial Expirations 4.0% —% 1.0% 5.0% 8.0% 10.0% 7.0% 12.0% 10.0% 7.0% 5.0% 3.0% 3.0% 24.0% Retail Office Ava ila ble M-T-M 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Thereafte r
17 STABILIZED PORTFOLIO SUMMARY AS OF SEPTEMBER 30, 2024 SEE APPENDIX FOR FULL LIST OF PROPERTIES (1) See appendix for definitions and portfolio detail. COMMERCIAL PORTFOLIO Retail Properties # of Properties Net Rentable SF(1) Average Age Occupancy(1) ABR(1) ABR per Occupied SF Town Center of Virginia Beach 13 549,317 13 97.9 % $13,856,480 $25.77 Harbor Point - Baltimore Waterfront 2 57,021 7 71.5 % 1,230,869 30.21 Grocery Anchored 15 1,400,474 14 98.2 % 22,933,867 16.68 Southeast Sunbelt 11 1,077,698 15 95.7 % 22,631,805 21.94 Mid-Atlantic 7 952,788 17 94.4 % 16,741,828 18.61 Stabilized Retail Total 48 4,037,298 14 96.2 % $77,394,849 $19.93 Office Properties # of Properties Net Rentable SF(1) Average Age Occupancy(1) ABR(1) ABR per Occupied SF Town Center of Virginia Beach 6 811,457 22 94.7 % $23,282,795 $30.30 Harbor Point - Baltimore Waterfront 3 1,036,017 9 97.7 % 32,487,973 32.09 Southeast Sunbelt 4 387,245 7 85.1 % 10,834,054 32.89 Mid-Atlantic 1 98,061 5 100.0 % 2,002,945 20.43 Stabilized Office Total 14 2,332,780 13 94.7 % $68,607,767 $31.07 MULTIFAMILY PORTFOLIO Multifamily Properties # of Properties Units Average Age Occupancy(1) AQR(1) Monthly AQR per Occupied Unit Town Center of Virginia Beach 3 759 11 97.0 % $18,137,748 $2,054 Harbor Point - Baltimore Waterfront 2 392 7 95.2 % 12,149,388 2,714 Southeast Sunbelt 3 686 3 92.1 % 14,088,636 1,858 Mid-Atlantic 3 655 12 96.6 % 12,915,252 1,700 Stabilized Multifamily Total 11 2,492 9 95.3 % $57,291,024 $2,011
18 (1) Excludes expenses associated with the Company’s in-house asset management division of $0.8M for each of the three months ended 9/30/2024 & 9/30/2023, and $2.4M and $2.5M for the nine months ended 9/30/2024 & 9/30/2023, respectively. (2) Excludes $4.0M termination fee received from one of the Company’s tenants at Wills Wharf and $300k of accelerated straight-line rent effect from the termination of such tenant’s lease for the three and nine months ended 9/30/2024. SAME STORE NOI BY SEGMENT $ IN THOUSANDS (RECONCILIATION TO GAAP LOCATED IN APPENDIX) Three Months Ended Nine Months Ended 9/30/2024 9/30/2023 $ Change % Change 9/30/2024 9/30/2023 $ Change % Change Retail Rental Revenues $25,834 $26,224 $(390) (1.5) % $69,324 $69,223 $101 0.1 % Rental Expenses(1) 4,346 3,815 531 13.9 % 10,465 9,715 750 7.7 % Real Estate Taxes 2,400 2,333 67 2.9 % 7,107 6,828 279 4.1 % Same Store NOI $19,088 $20,076 $(988) (4.9) % $51,752 $52,680 $(928) (1.8) % GAAP Adjustments (1,128) (1,305) 177 (2,750) (3,408) 658 Net Operating Income, Cash $17,960 $18,771 ($811) (4.3) % $49,002 $49,272 $(270) (0.5) % Office Rental Revenues $23,474 $22,052 $1,422 6.4 % $61,584 $58,536 $3,048 5.2 % Rental Expenses(1) 6,153 5,653 500 8.8 % 15,522 14,614 908 6.2 % Real Estate Taxes 2,281 2,230 51 2.3 % 6,446 6,390 56 0.9 % Same Store NOI(2) $15,040 $14,169 $871 6.1 % $39,616 $37,532 $2,084 5.6 % GAAP Adjustments (2,296) (1,364) (932) (4,322) (3,279) (1,043) Net Operating Income, Cash $12,744 $12,805 ($61) (0.5) % $35,294 $34,253 $1,041 3.0 % Multifamily Rental Revenues $14,366 $14,359 $7 — % $39,394 $38,635 $759 2.0 % Rental Expenses(1) 4,642 4,386 256 5.8 % 12,016 11,431 585 5.1 % Real Estate Taxes 1,302 1,231 71 5.8 % 3,799 3,373 426 12.6 % Same Store NOI $8,422 $8,742 $(320) (3.7) % $23,579 $23,831 $(252) (1.1) % GAAP Adjustments (209) (202) (7) (625) (605) (20) Net Operating Income, Cash $8,213 $8,540 $(327) (3.8) % $22,954 $23,226 $(272) (1.2) % Same Store NOI $42,550 $42,987 ($437) (1.0) % $114,947 $114,043 $904 0.8 % GAAP Adjustments (3,633) (2,871) 0 (762) (7,697) (7,292) 0 (405) 0 Same Store Portfolio NOI, Cash Basis $38,917 $40,116 $(1,199) (3.0) % $107,250 $106,751 $499 0.5 %
19 TOP 20 TENANTS BY ABR(1) $ IN THOUSANDS AS OF SEPTEMBER 30, 2024 Commercial Portfolio Tenant Investment Grade Rating(2) Number of Leases Annualized Base Rent % of Total Annualized Base Rent Constellation Energy Generation ü 1 $15,010 7.4% Morgan Stanley ü 3 8,883 4.4% Harris Teeter/Kroger ü 6 3,781 1.9% Clark Nexsen 1 2,914 1.4% Canopy by Hilton 1 2,698 1.3% Dick's Sporting Goods/Golf Galaxy ü 2 1,977 1.0% Lowes Foods 2 1,976 1.0% Franklin Templeton ü 1 1,898 0.9% Duke University ü 1 1,742 0.9% Huntington Ingalls Industries ü 1 1,671 0.8% TJ Maxx/Homegoods ü 5 1,554 0.8% PetSmart 5 1,527 0.8% Georgia Tech ü 1 1,446 0.7% WeWork 1 1,348 0.7% Mythics 1 1,311 0.6% Puttshack 1 1,203 0.6% Apex Entertainment 1 1,176 0.6% Pindrop 1 1,172 0.6% Kimley-Horn 1 1,145 0.6% Amazon/Whole Foods ü 1 1,144 0.6% Top 20 Total $55,576 27.6% (1) Excludes leases from the development and redevelopment properties that have been delivered, but not yet stabilized. (2) Per public sources.
20 LEASE SUMMARY (1) During the first quarter of 2024, the Company reclassified certain mixed-use properties between segments in order to align the components of those properties with their tenant composition and has adjusted the fourth quarter of 2023 accordingly. (2) Excludes leases from properties in development and redevelopment. RETAIL Renewals 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 2024 24 179,701 13.1 % 7.8 % 5.1 $410,509 $2.28 Q2 2024 20 140,325 5.8 % 2.9 % 5.1 592,997 4.23 Q1 2024 19 87,841 10.7 % 4.4 % 4.5 262,669 2.99 Q4 2023 (1) 15 122,652 8.6 % 2.9 % 4.8 233,305 1.90 Trailing 4 Quarters 78 530,519 9.8 % 4.8 % 4.9 $1,499,480 $2.83 New Leases(2) 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 2024 6 13,559 $28.34 9.2 $684,169 $50.46 Q2 2024 7 32,517 18.10 8.6 1,575,222 48.44 Q1 2024 3 9,807 16.17 8.2 549,959 56.08 Q4 2023 (1) 6 14,937 23.13 9.5 391,628 26.22 Trailing 4 Quarters 22 70,820 $20.85 8.8 $3,200,978 $45.20 OFFICE Renewals 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 2024 4 64,459 18.5 % 0.8 % 4.4 $2,122,420 $32.93 Q2 2024 3 31,583 24.3 % 4.4 % 7.7 636,802 20.16 Q1 2024 2 17,901 14.2 % 1.2 % 9.1 564,597 31.54 Q4 2023 (1) 2 46,734 18.0 % 0.4 % 5.5 618,268 13.23 Trailing 4 Quarters 11 160,677 18.8 % 1.3 % 5.9 $3,942,087 $24.53 New Leases(2) 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 2024 3 15,493 $29.42 3.9 $576,306 $37.20 Q2 2024 2 44,289 33.57 10.7 5,554,413 125.41 Q1 2024 0 — — 0.0 — — Q4 2023 (1) 3 23,802 29.07 6.8 1,526,948 64.15 Trailing 4 Quarters 8 83,584 $31.52 8.3 $7,657,667 $91.62
21 LEASE EXPIRATIONS(1) AS OF SEPTEMBER 30, 2024 (1) Excludes leases from properties in development, redevelopment, and delivered, but not yet stabilized. OFFICE Year Leases Expiring Square Footage Expiring % Portfolio Net Rentable Square Feet ABR % of Portfolio ABR Available – 124,379 5.3 % $— – % M-T-M 3 1,623 0.1 % 65,900 0.1 % 2024 2 5,253 0.2 % 149,705 0.2 % 2025 15 94,754 4.1 % 3,178,667 4.6 % 2026 10 46,312 2.0 % 1,410,697 2.1 % 2027 20 180,570 7.7 % 6,191,026 9.0 % 2028 13 108,655 4.7 % 3,337,560 4.9 % 2029 15 348,578 14.9 % 10,148,157 14.8 % 2030 12 158,410 6.8 % 4,832,328 7.0 % 2031 8 142,915 6.1 % 4,133,274 6.0 % 2032 3 24,187 1.0 % 706,430 1.0 % 2033 3 52,219 2.2 % 1,559,439 2.3 % 2034 6 119,019 5.1 % 2,986,668 4.4 % Thereafter 12 925,906 39.8 % 29,907,916 43.6 % Total / Weighted Average 122 2,332,780 100.0 % $68,607,767 100.0 % RETAIL Year Leases Expiring Square Footage Expiring % Portfolio Net Rentable Square Feet ABR % of Portfolio ABR Available – 153,131 3.8 % $— – % M-T-M 3 2,508 0.1 % 83,724 0.1 % 2024 7 60,044 1.5 % 885,249 1.1 % 2025 80 278,667 6.9 % 5,615,622 7.3 % 2026 91 451,452 11.2 % 9,417,151 12.2 % 2027 87 448,213 11.1 % 8,757,097 11.3 % 2028 76 335,861 8.3 % 7,518,043 9.7 % 2029 91 447,529 11.1 % 8,687,623 11.2 % 2030 70 484,796 12.0 % 10,209,701 13.2 % 2031 42 304,371 7.5 % 5,831,695 7.5 % 2032 33 311,932 7.7 % 5,697,635 7.4 % 2033 29 112,185 2.8 % 3,055,380 3.9 % 2034 19 92,510 2.3 % 2,006,482 2.6 % Thereafter 36 554,099 13.7 % 9,629,447 12.5 % Total / Weighted Average 664 4,037,298 100.0 % $77,394,849 100.0 %
22 T. Rowe Price Global HQ Baltimore, MD PORTFOLIO EXPANSION $ IN THOUSANDS Allied | Harbor Point Baltimore, MD Schedule(1) Consolidated Development Projects Property Type Estimated Size(1) % Leased or LOI Construction Start Initial Occupancy Stabilized Operation(2) Estimated Cost(1) Loan Commitment Funded to Date AHH Ownership Anchor Tenants Southern Post Roswell, GA Mixed-Use 137 multifamily units / 95,000 sf office / 42,000 sf retail 64% Commercial(3) 61% Multifamily 4Q21 2Q24 2Q25 $132,200 $73,600 (4) $110,030 100 % Vestis Equity Method Investments 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 553,000 sf office / 20,200 sf retail / 250 parking spaces 93% 2Q22 1Q25 1Q25 $277,800 $52,700 $45,600 50 % T. Rowe Price Allied | Harbor Point Baltimore, MD Multifamily 312 units / 15,800 sf retail / 1,252 parking spaces 5% 2Q22 1Q25 3Q26 237,700 114,300 113,700 90 % (5) Total Unconsolidated JV Development $515,500 $167,000 $159,300 Projects Property Type Scope Columbus Village II Virginia Beach, VA Retail Redevelopment Q3 2024 Year to Date Capitalized Interest $3,248 $10,832 (1) Represents estimates that may change as the development process proceeds. (2) First fully-stabilized quarter. See stabilized property definition in appendix. (3) Represents combined percentage leased or under LOI for retail and office. (4) Includes $5.7M earnout under certain conditions. (5) The Company currently owns 78% and holds an option to increase its ownership interest to 90%.
23 REAL ESTATE FINANCING $ IN THOUSANDS AS OF SEPTEMBER 30, 2024 The Interlock Atlanta, GA Solis Gainesville II Gainesville, GA (1) Each investment is in the form of preferred equity with economic terms and accounting consistent with a loan receivable. (2) Represents estimates that may change as the development process proceeds. (3) Excludes amortization of equity placement fees, if applicable. Outstanding Investments(1) Property Type Estimated Size(2) % Leased or LOI Initial Occupancy Estimated Stabilization(2) Loan Maturity Interest Rate Principal Balance Maximum Principal Commitment Cumulative Accrued Interest(3) QTD Interest Income(3) Solis Gainesville II Gainesville, GA Multifamily 184 units 53% 2Q24 Q2 2025 4Q26 14% (4) $ 19,595 $ 19,595 $ 5,184 $ 776 The Allure at Edinburgh Chesapeake, VA Multifamily 280 units N/A 4Q24(2) Q4 2025 1Q28 15% (5) 9,228 9,228 1,639 348 Solis Kennesaw Kennesaw, GA Multifamily 239 units N/A 2Q25(2) Q1 2026 2Q27 14% (4) 37,870 37,870 6,606 1,401 Solis Peachtree Corners Peachtree Corners, GA Multifamily 249 units N/A 3Q25(2) Q3 2026 4Q27 15% (4) 20,533 28,440 4,223 1,042 Solis North Creek Charlotte, NC Multifamily 303 units N/A 3Q26(2) Q4 2027 3Q30 12% (4) 2,364 26,767 299 299 Total Outstanding Investments $89,590 $121,900 $17,951 $3,866 Solis Peachtree Corners Peachtree Corners, GA (4) The interest rate varies over the life of the loan and the loan earns an unused commitment fee. (5) The interest rate varies over the life of the loan.
24 GENERAL CONTRACTING & REAL ESTATE SERVICES $ IN THOUSANDS Slater Road Apartments Morrisville, NC Third-Party Backlog as of Q3 2024 Beginning Backlog $302,850 New Contracts 4,886 Work Performed (114,614) Ending Backlog $193,122 Q3 2024 Q2 2024 Q1 2024 Q4 2023 Trailing 4 Quarters Revenue $114,353 $116,839 $126,975 $126,911 $485,078 Expense (110,987) (112,500) (122,898) (123,377) (469,762) Gross Profit $3,366 $4,339 $4,077 $3,534 $15,316 Operating Margin(1) 2.9 % 3.7 % 3.2 % 2.8 % 3.2 % (1) 50% and 90% of gross profit attributable to contracts for our T. Rowe Price Global HQ and Allied | Harbor Point development projects, respectively, is not reflected within general contracting & real estate services revenues due to elimination. The Company is still entitled to receive cash proceeds in relation to the eliminated amounts. Prior to any gross profit eliminations attributable to these projects, operating margin for Q3 2024, Q2 2024, Q1 2024, Q4 2023, and the Trailing 4 Quarters was 3.2%, 4.0%, 3.5%, 3.2%, and 3.5%, respectively.
25 NET INCOME BY SEGMENT $ IN THOUSANDS Three Months Ended September 30, 2024 Retail Real Estate Office Real Estate Multifamily Real Estate General Contracting and Real Estate Services Real Estate Financing Unallocated Total Revenues Rental revenues $26,161 $27,784 $14,653 $— $— $— $68,598 General contracting and real estate services revenues — — — 114,353 — — 114,353 Interest income 23 — 41 — 4,072 565 4,701 Total revenues 26,184 27,784 14,694 114,353 4,072 565 187,652 Expenses Rental expenses 5,104 6,307 5,241 — — — 16,652 Real estate taxes 2,466 2,360 1,358 — — — 6,184 General contracting and real estate services expenses — — — 110,987 — — 110,987 Depreciation and amortization 8,381 10,610 4,146 — — 152 23,289 Amortization of right-of-use assets - finance leases 246 82 67 — — — 395 General and administrative expenses — — — — — 5,187 5,187 Acquisition, development and other pursuit costs — — — — — 2 2 Impairment charges — — — — — — — Total expenses 16,197 19,359 10,812 110,987 — 5,341 162,696 Operating income 9,987 8,425 3,882 3,366 4,072 (4,776) 24,956 Interest expense(1) (7,575) (7,397) (4,691) — (1,724) — (21,387) Loss on extinguishment of debt (58) — (55) — — — (113) Change in fair value of derivatives and other (3,650) (2,729) (991) — (1,270) (1,668) (10,308) Unrealized credit loss provision — — — — (198) — (198) Other income (expense), net 31 50 (2) — — 17 96 Income (loss) before taxes (1,265) (1,651) (1,857) 3,366 880 (6,427) (6,954) Income tax provision — — — (592) — — (592) Net (loss) income ($1,265) ($1,651) ($1,857) $2,774 $880 ($6,427) ($7,546) (1) Interest expense within the real estate financing segment is allocated based on the average outstanding principal of notes receivable in the real estate financing portfolio and the effective interest rates on the Company’s credit facility, the M&T term loan facility, and the TD term loan facility.
26 ACQUISITIONS & DISPOSITIONS $ IN THOUSANDS ACQUISITIONS Properties Location Square Feet/Units Purchase Price Cash Cap Rate Purchase Date Anchor Tenants 2023 311,000 $215,000 6.5 % The Interlock Atlanta, GA 311,100 (1) 215,000 6.5 % 2Q23 Georgia Tech, Puttshack 2022 606,181 / 103 units $299,450 6.2 % Pembroke Square Virginia Beach, VA 124,181 26,450 7.7 % 4Q22 Fresh Market, Nordstrom Rack, DSW Constellation Energy Building Baltimore, MD 482,000 / 103 units 273,000 (2) 6.1 % 1Q22 Constellation Energy Group Total/Weighted Average 917,181 / 103 units $514,450 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 Total/Weighted Average 275,896 / 1,031 units/beds $258,261 4.3 % (1) Square footage includes 4.9k square feet of retail storage space. (2) Represents 100% of property value of which the Company owns a 90% economic interest.
27Town Center of Virginia Beach Virginia Beach, VA APPENDIX DEFINITIONS & RECONCILIATIONS
28 ANNUALIZED BASE RENT: For the properties in our retail & office portfolios, we calculate annualized base rent (“ABR”) by multiplying (a) monthly base rent as of September 30, 2024 (defined as cash base rent, before contractual tenant concessions and abatements, and excluding tenant reimbursements for expenses paid by us) for executed leases as of such date by (b) 12, and we 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 executed leases as of September 30, 2024. 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 improvements, leasing commissions, 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, 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) rental revenues for the quarter by (b) 4. ADJUSTED INTEREST EXPENSE: Adjusted Interest Expense includes interest expense on our debt obligations, amortization of deferred financing costs, interest expense on finance leases, and payments (receipts) of interest rate derivatives that are designated as hedges for accounting purposes, all of which are recorded within “Interest expense” on our consolidated statements of comprehensive income. Adjusted Interest Expense also includes payments (receipts) of interest rate derivatives that are not designated as hedges for accounting purposes. Payments (receipts) of interest rate derivatives not designated as hedges are recorded within “Change in fair value of derivatives and other” on our consolidated statements of comprehensive income.
29 DEBT SERVICE COVERAGE RATIO: We calculate Debt Service Coverage Ratio as the quarterly Total Adjusted EBITDAre divided by total quarterly interest expense, interest receipts of non-designated derivatives, and required principal repayment. DEFINITIONS FUNDS FROM OPERATIONS: We calculate Funds From Operations (“FFO”) in accordance with the standards established by 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. Management uses FFO as a supplemental performance measure because we believe 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. EBITDAre: We calculate EBITDA for real estate (EBITDAre) consistent with the definition established by the National Association of Real Estate Investment Trusts ("Nareit"). EBITDAre is a financial measure not calculated in accordance with the accounting principles generally accepted in the United States ("GAAP") that Nareit defines 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, and adjustments to reflect the entity’s share of EBITDAre of unconsolidated affiliates. Management believes EBITDAre 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. FIXED CHARGE COVERAGE RATIO: We calculate Fixed Charge Coverage Ratio as quarterly Total Adjusted EBITDAre divided by total quarterly interest expense, interest receipts of non-designated derivatives, required principal repayment, and preferred equity dividends.
30 NET OPERATING INCOME: We calculate Net Operating Income (“NOI”) as segment revenues less segment expenses. Segment revenues include rental revenues (base rent, expense reimbursements, termination fees, and other revenue) for our property segments, general contracting and real estate services revenues for our general contracting and real estate services segment, and interest income for our real estate financing segment. Segment expenses include rental expenses and real estate taxes for our property segments, general contracting and real estate services expenses for our general contracting and real estate services segment, and interest expense for our real estate financing segment. Segment NOI for the general contracting and real estate services and real estate financing segments is also referred to as segment gross profit. 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 for the same store portfolio, we exclude one-time items, such as termination fees. To calculate NOI on a cash basis, we adjust NOI to exclude the net effects of straight-line rental revenues, the amortization of lease incentives and above/below market rents, the net effects of straight-line rental expenses, and ground rent expenses for finance leases. 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 executed 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 1996 measurement guidelines. DEFINITIONS 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, amortization of payments made to purchase interest rate caps and swaps 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.
31 PROPERTY ADJUSTED EBITDAre: We calculate Property Adjusted EBITDAre as EBITDAre coming solely from our operating properties. When referring to Property Adjusted EBITDAre, we also exclude certain items, including, but not limited to, non-recurring bad debt, non-recurring termination fees, amortization of right-of-use assets, and impairment of intangible assets and liabilities. Management believes that Property Adjusted EBITDAre 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 Property Adjusted EBITDAre or similarly titled measures. STABILIZED PORTFOLIO ADJUSTED EBITDAre: We calculate Stabilized Portfolio Adjusted EBITDAre as Property Adjusted EBITDAre coming solely from our stabilized properties, which excludes certain items, including, but not limited to, the impact of redevelopment and development pipeline projects that are still in lease-up, as well as acquisitions and dispositions in the period. Refer to definition of Stabilized Property and Property Adjusted EBITDAre for further information. Management believes that Stabilized Portfolio Adjusted EBITDAre 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 Portfolio Adjusted EBITDAre or similarly titled measures. 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 footage, expressed as a percentage. Refer to definition of Net Rentable Square Footage for further information. Occupancy for our multifamily properties is calculated as (a) average of the number of occupied units on the 20th day of each of the trailing three months from the reporting period end date, divided by (b) total units available as of such date, expressed as a percentage. Management believes that this methodology best captures the average monthly occupancy. 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. Refer to definition of Stabilized Property for further information.
32 DEFINITIONS TOTAL ADJUSTED EBITDAre: Total Adjusted EBITDAre is calculated as EBITDAre further adjusted for debt extinguishment losses, non-cash stock compensation, mark-to-market adjustments on interest rate derivatives, and other one-time adjustments including non-recurring bad debt and termination fees. Management believes Total Adjusted EBITDAre is useful to investors in evaluating and facilitating comparisons of our operating performance between periods and with other 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. Management believes Total Adjusted EBITDAre is useful to investors in evaluating and facilitating comparisons of our operating performance between periods and with other 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. STABILIZED PROPERTY: We generally consider a property to be stabilized upon the earlier of (a) the quarter after the property reaches 80% occupancy, or (b) 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. A property classified as Held for Sale is not considered stabilized. 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 debt. Refer to definition of Stabilized Property for further information.
33 PROPERTY PORTFOLIO AS OF SEPTEMBER 30, 2024 Retail Properties - Stabilized Location Ownership % Year Built/ Redeveloped Net Rentable SF(1) Occupancy(1) ABR(1) ABR per Occupied SF(1) Anchor Tenant(s) Town Center of Virginia Beach 249 Central Park Retail Virginia Beach, VA 100% 2004 35,161 100.0 % $1,177,891 $33.50 Cheesecake Factory, Brooks Brothers 4525 Main Street Retail Virginia Beach, VA 100% 2014 26,328 100.0 % 462,201 17.56 Anthropologie, West Elm 4621 Columbus Retail Virginia Beach, VA 100% 2020 84,000 100.0 % 1,176,000 14.00 Apex Entertainment Columbus Village Virginia Beach, VA 100% 2020 62,207 100.0 % 1,978,673 31.81 Barnes & Noble, CAVA, Shake Shack, Five Below, Ulta Commerce Street Retail Virginia Beach, VA 100% 2008 19,173 100.0 % 890,078 46.42 Yard House Fountain Plaza Retail Virginia Beach, VA 100% 2004 35,961 94.4 % 1,119,318 32.98 Ruth's Chris, Nando's Pembroke Square Virginia Beach, VA 100% 2015 124,181 100.0 % 2,096,262 16.88 Fresh Market, Nordstrom Rack, DSW Premier Retail Virginia Beach, VA 100% 2018 39,015 94.9 % 1,275,714 34.44 Williams Sonoma, Pottery Barn South Retail Virginia Beach, VA 100% 2002 38,515 100.0 % 1,061,720 27.57 lululemon, free people, CPK Studio 56 Retail Virginia Beach, VA 100% 2007 11,594 100.0 % 410,652 35.42 Rocket Title, Legal Sea Foods The Cosmopolitan Retail Virginia Beach, VA 100% 2020 41,872 88.6 % 1,192,265 32.15 Lego, Nike Two Columbus Retail Virginia Beach, VA 100% 2009 13,752 100.0 % 522,675 38.01 Fidelity Investments, Luxxotica West Retail Virginia Beach, VA 100% 2002 17,558 83.4 % 493,031 33.67 PF Changs, The Men's Wearhouse Harbor Point - Baltimore Waterfront Constellation Retail Baltimore, MD 90% 2016 38,389 76.6 % $791,204 $26.89 West Elm Point Street Retail Baltimore, MD 100% 2018 18,632 60.8 % 439,665 38.82 solidcore Grocery Anchored Broad Creek Shopping Center(2) Norfolk, VA 100% 2001 121,504 97.2 % $2,318,629 $19.64 Food Lion, PetSmart Broadmoor Plaza South Bend, IN 100% 1980 115,059 98.2 % 1,358,576 12.03 Kroger Brooks Crossing Retail Newport News, VA 65%(3) 2016 18,349 84.8 % 228,007 14.65 Various Small Shops (grocery shadow) Delray Beach Plaza(2) Delray Beach, FL 100% 2021 87,207 98.0 % 2,959,879 34.62 Whole Foods Greenbrier Square Chesapeake, VA 100% 2017 260,625 100.0 % 2,624,984 10.07 Kroger, Homegoods, Dick's Sporting Goods Greentree Shopping Center Chesapeake, VA 100% 2014 15,719 100.0 % 359,921 22.90 Various Small Shops (grocery shadow) Hanbury Village Chesapeake, VA 100% 2009 98,638 100.0 % 2,044,524 20.73 Harris Teeter Lexington Square Lexington, SC 100% 2017 85,440 97.2 % 1,892,536 22.79 Lowes Foods Market at Mill Creek Mount Pleasant, SC 100% 2018 80,319 100.0 % 1,935,238 24.09 Lowes Foods North Pointe Center Durham, NC 100% 2009 226,083 100.0 % 2,994,289 13.24 Harris Teeter Parkway Centre Moultrie, GA 100% 2017 61,200 100.0 % 861,149 14.07 Publix Parkway Marketplace Virginia Beach, VA 100% 1998 37,804 64.5 % 546,619 22.40 Various Small Shops (grocery shadow) Perry Hall Marketplace Perry Hall, MD 100% 2001 74,251 100.0 % 1,299,008 17.49 Safeway Sandbridge Commons Virginia Beach, VA 100% 2015 69,417 100.0 % 950,560 13.69 Harris Teeter Tyre Neck Harris Teeter(2) Portsmouth, VA 100% 2011 48,859 100.0 % 559,948 11.46 Harris Teeter Southeast Sunbelt Chronicle Mill Retail Belmont, NC 85%(3) 2022 11,530 22.4 % $112,500 $43.50 Nexton Square Summerville, SC 100% 2020 133,608 97.6 % 3,473,450 26.64 Various Small Shops North Hampton Market Taylors, SC 100% 2004 114,954 98.8 % 1,574,270 13.86 PetSmart, Hobby Lobby One City Center Retail Durham, NC 100% 2019 22,679 55.7 % 419,887 33.26 Various Small Shops Overlook Village Asheville, NC 100% 1990 151,365 100.0 % 2,270,060 15.00 T.J. Maxx|Homegoods, Ross Patterson Place Durham, NC 100% 2004 159,842 99.1 % 2,250,496 14.20 PetSmart, DSW Providence Plaza Retail Charlotte, NC 100% 2008 49,447 100.0 % 1,547,249 31.29 Orange Theory, Edward Jones, Chipotle South Square Durham, NC 100% 2005 109,590 97.1 % 1,935,908 18.19 Ross, Petco, Office Depot The Interlock Retail(2) Atlanta, GA 100% 2021 107,379 85.5 % 4,594,319 50.06 Puttshack Wendover Village Greensboro, NC 100% 2004 176,997 98.5 % 3,577,263 20.51 T.J. Maxx, Petco, Beauty World (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 is entitled to a preferred return on its investment in this property.
34 PROPERTY PORTFOLIO CONT. AS OF SEPTEMBER 30, 2024 Retail Properties - Stabilized Location Ownership % Year Built/ Redeveloped Net Rentable SF(1) Occupancy(1) ABR(1) ABR per Occupied SF(1) Anchor Tenant(s) Mid-Atlantic Dimmock Square Colonial Heights, VA 100% 1998 106,166 100.0 % $1,941,841 $18.29 Best Buy, Old Navy Harrisonburg Regal Harrisonburg, VA 100% 1999 49,000 100.0 % 753,620 15.38 Regal Cinemas Liberty Retail Newport News, VA 100% 2013 26,534 49.0 % 230,308 17.73 Marketplace at Hilltop(2) Virginia Beach, VA 100% 2001 116,953 97.3 % 2,809,478 24.70 Total Wine, Panera, Chick-Fil-A Red Mill Commons Virginia Beach, VA 100% 2005 373,808 95.7 % 7,064,195 19.75 Homegoods, Walgreens Southgate Square Colonial Heights, VA 100% 2016 260,131 100.0 % 3,884,338 14.93 Burlington, PetSmart, Michaels, T.J. Maxx Southshore Shops Midlothian, VA 100% 2006 40,307 100.0 % 876,403 21.74 Buffalo Wild Wings The Edison Retail Richmond, VA 100% 2014 20,196 — % 58,048 0.00 Total Stabilized Retail Portfolio 4,037,298 96.2 % $77,394,849 $19.93 (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 47,644 square feet at these two properties at an ABR of $1.6M, or $34.70 per leased square foot, which is reflected in this table. The rent paid by the Company is eliminated in accordance with GAAP in the consolidated financial statements. (4) The Company is entitled to a preferred return on its investment in this property. Office Properties- Stabilized Location Ownership % Year Built / Redeveloped Net Rentable SF(1) Occupancy(1) ABR(1) ABR per Occupied SF(1) Anchor Tenant(s) Town Center of Virginia Beach 249 Central Park Office Virginia Beach, VA 100% 2004 57,103 93.3 % $1,374,379 $25.81 Gather, HDR 4525 Main Street Virginia Beach, VA 100% 2014 208,760 100.0 % 6,930,464 33.20 Clark Nexsen, Mythics 4605 Columbus Office Virginia Beach, VA 100% 2002 19,335 — % — 0.00 Armada Hoffler Tower(3) Virginia Beach, VA 100% 2002 298,353 98.6 % 9,248,842 31.43 AHH, Troutman Pepper, Williams Mullen, Morgan Stanley, KPMG One Columbus Virginia Beach, VA 100% 1984 129,066 98.3 % 3,408,223 26.86 Truist, HBA, Northwestern Mutual Two Columbus Office Virginia Beach, VA 100% 2009 98,840 86.3 % 2,320,887 27.21 Hazen & Sawyer, Fidelity Harbor Point - Baltimore Waterfront Constellation Office Baltimore, MD 90% 2016 444,600 100.0 % $15,031,832 $33.81 Constellation Energy Group Thames Street Wharf(3) Baltimore, MD 100% 2010 263,426 98.8 % 8,059,712 30.96 Morgan Stanley Wills Wharf(2) Baltimore, MD 100% 2020 327,991 93.8 % 9,396,429 30.54 Canopy by Hilton, Transamerica, RBC, Franklin Templeton, Stifel Southeast Sunbelt Chronicle Mill Office Belmont, NC 85%(4) 2022 5,932 100.0 % $183,892 $31.00 Piedmont Lithium One City Center Office Durham, NC 100% 2019 128,920 95.3 % 3,270,013 26.63 Duke University Providence Plaza Office Charlotte, NC 100% 2008 53,671 100.0 % 1,633,697 30.44 Choate Construction, Cranfill, Sumner, & Hartzog The Interlock Office(2) Atlanta, GA 100% 2021 198,722 73.9 % 5,746,452 39.11 Georgia Tech, Pindrop Mid-Atlantic Brooks Crossing Office Newport News, VA 100% 2019 98,061 100.0 % $2,002,945 $20.43 Huntington Ingalls Industries Stabilized Office Total 2,332,780 94.7 % $68,607,767 $31.07
35 PROPERTY PORTFOLIO CONT. AS OF SEPTEMBER 30, 2024 Multifamily Properties - Stabilized Location Ownership % Year Built / Redeveloped Units Occupancy(1) AQR (1) Monthly AQR per Occupied Unit Town Center of Virginia Beach Encore Apartments Virginia Beach, VA 100% 2014 286 97.2 % $5,955,672 $1,785 Premier Apartments Virginia Beach, VA 100% 2018 131 96.9 % 2,998,416 1,967 The Cosmopolitan Virginia Beach, VA 100% 2020 342 96.8 % 9,183,660 2,312 Harbor Point - Baltimore Waterfront 1305 Dock Street Baltimore, MD 90% 2016 103 97.1 % $3,128,280 $2,607 1405 Point(2) Baltimore, MD 100% 2018 289 94.5 % 9,021,108 2,754 Southeast Sunbelt Chronicle Mill(3) Belmont, NC 85%(4) 2022 238 89.1 % $4,658,124 $1,831 Greenside Apartments Charlotte, NC 100% 2018 225 94.7 % 4,845,468 1,896 The Everly Gainesville, GA 100% 2022 223 92.8 % 4,585,044 1,846 Mid-Atlantic Liberty Apartments Newport News, VA 100% 2013 197 95.4 % $3,835,968 $1,700 Smith's Landing(2) Blacksburg, VA 100% 2009 284 97.9 % 5,962,044 1,787 The Edison Richmond, VA 100% 2014 174 96.0 % 3,117,240 1,556 Stabilized Multifamily Total 2,492 95.3 % $57,291,024 $2,011 (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) Occupancy is down due to units out of service as of 9/30/2024. AQR and Monthly AQR per Occupied Unit exclude business interruption insurance income. (4) The Company is entitled to a preferred return on its investment in this property.
36 $ IN THOUSANDS RECONCILIATION OF DEBT & EBITDAre (1) Excludes GAAP adjustments. Three Months Ended 9/30/2024 6/30/2024 3/31/2024 12/31/2023 Property Net Operating Income $45,762 $42,292 $41,351 $39,283 Property Miscellaneous Expense, Net (35) (64) (43) (399) Non-Recurring Bad Debt Adjustment 296 (478) 758 2,730 Non-Recurring Termination Fee Adjustment (4,277) (103) (115) (85) Amortization of Right-of-Use Assets (395) (394) (395) (300) Accelerated Amortization of Intangible Assets and Liabilities (5) — — 5 Property Adjusted EBITDAre $41,346 $41,253 $41,556 $41,234 Acquisition — — — — Disposition — — — — Development/Redevelopment (189) (51) (116) (73) Stabilized Portfolio Adjusted EBITDAre $41,157 $41,202 $41,440 $41,161 Construction Gross Profit 3,366 4,339 4,077 3,534 Corporate G&A (5,008) (4,328) (5,744) (4,154) Non-Cash Stock Compensation 710 744 2,192 729 Interest Income 4,636 4,580 4,596 4,265 Other Income (Expense), Net 17 20 22 (61) Add Back: Unstabilized EBITDAre — — — — Total Adjusted EBITDAre $44,878 $46,557 $46,583 $45,474 Stabilized Property Debt 530,513 602,587 606,444 608,658 Add: Unsecured Property Debt 440,691 459,973 490,654 491,505 Acquisitions — — — — Stabilized Portfolio Debt $971,204 $1,062,560 $1,097,098 $1,100,163 Stabilized Portfolio Debt / Stabilized Portfolio Adjusted EBITDAre 5.9x 6.4x 6.6x 6.7x Total Debt(1) 1,330,124 1,422,473 1,431,614 1,401,204 Cash (45,726) (21,697) (43,861) (30,166) Net Debt $1,284,398 $1,400,776 $1,387,753 $1,371,038 Net Debt/Total Adjusted EBITDAre 7.2x 7.5x 7.4x 7.5x Preferred 171,085 171,085 171,085 171,085 Net Debt + Preferred $1,455,483 $1,571,861 $1,558,838 $1,542,123 Net Debt + Preferred /Total Adjusted EBITDAre 8.1x 8.4x 8.4x 8.5x
37 $ IN THOUSANDS CAPITAL EXPENDITURES (1) Excludes activity related to held for sale, acquired, and/or disposed properties. (2) Represents recurring capital expenditures. Leasing Commissions Lease Incentive Tenant Improvements Land Improvements(2) Building Improvements(2) Fixtures & Equipment(2) Total Second Generation Capex Retail $369 $10 $684 $143 $529 $— $1,735 Office 608 — 441 8 539 — 1,596 Multifamily — — — 35 869 555 1,459 Total Portfolio $977 $10 $1,125 $186 $1,937 $555 $4,790 Three Months Ended September 30, 2024(1) Nine Months Ended September 30, 2024(1) Leasing Commissions Lease Incentive Tenant Improvements Land Improvements(2) Building Improvements(2) Fixtures & Equipment(2) Total Second Generation Capex Retail $1,510 $10 $3,490 $1,550 $2,542 $— $9,102 Office 4,661 — 1,633 17 3,962 — 10,273 Multifamily — — — 80 2,186 1,191 3,457 Total Portfolio $6,171 $10 $5,123 $1,647 $8,690 $1,191 $22,832
38 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 2024 2023 2024 2023 Retail Same Store Rental Revenues $25,834 $26,224 $69,324 $69,223 Property Expenses 6,746 6,148 17,572 16,543 NOI 19,088 20,076 51,752 52,680 Non-Same Store NOI(1) (497) (185) 5,144 3,133 Segment NOI $18,591 $19,891 $56,896 $55,813 Office Same Store Rental Revenues $23,474 $22,052 $61,584 $58,536 Property Expenses 8,434 7,883 21,968 21,004 NOI 15,040 14,169 39,616 37,532 Non-Same Store NOI(1) 4,077 (319) 7,820 1,871 Segment NOI $19,117 $13,850 $47,436 $39,403 Multifamily Same Store Rental Revenues $14,366 $14,359 $39,394 $38,635 Property Expenses 5,944 5,617 15,815 14,804 NOI 8,422 8,742 23,579 23,831 Non-Same Store NOI(1) (368) (193) 1,494 1,733 Segment NOI $8,054 $8,549 $25,073 $25,564 Total Property Portfolio NOI $45,762 $42,290 $129,405 $120,780
39 RECONCILIATION TO GAAP NET INCOME $ IN THOUSANDS (1) Segment net operating income for the retail, office, and multifamily segments is calculated as rental revenues less rental expenses and rental taxes. (2) Segment gross profit for the general contracting & real estate services segment is calculated as general contracting and real estate services revenues less general contracting and real estate services expenses. (3) Segment gross profit for the real estate financing segment is calculated as interest income less interest expense. Three Months Ended September 30, 2024 Retail(1) Office(1) Multifamily(1) Total Rental Properties General Contracting & Real Estate Services(2) Real Estate Financing(3) Total Segment Revenues $26,161 $27,784 $14,653 $68,598 $114,353 $4,072 $187,023 Segment Expenses 7,570 8,667 6,599 22,836 110,987 1,724 135,547 Net Operating Income $18,591 $19,117 $8,054 $45,762 $3,366 $2,348 $51,476 Interest Income 629 Depreciation and Amortization (23,289) Amortization of Right-of-Use Assets - Finance Leases (395) General and Administrative Expenses (5,187) Acquisition, Development, and Other Pursuit Costs (2) Interest Expense (19,663) Loss on Extinguishment of Debt (113) Change in Fair Value of Derivatives and Other (10,308) Unrealized Credit Loss Provision (198) Other Income, Net 96 Income Tax Provision (592) Net Loss (7,546) Net Loss Attributable to Noncontrolling Interests in Investment Entities 17 Preferred Stock Dividends (2,887) Net Loss Attributable to AHH and OP Unitholders ($10,416) Nine Months Ended September 30, 2024 Retail(1) Office(1) Multifamily(1) Total Rental Properties General Contracting & Real Estate Services(2) Real Estate Financing(3) Total Segment Revenues $77,905 $72,532 $43,307 $193,744 $358,167 $12,038 $563,949 Segment Expenses 21,399 24,503 18,437 64,339 346,385 4,823 415,547 Net Operating Income $56,506 $48,029 $24,870 $129,405 $11,782 $7,215 $148,402 Interest Income 1,921 Depreciation and Amortization (64,513) Amortization of Right-of-Use Assets - Finance (1,184) General and Administrative Expenses (15,564) Acquisition, Development, and Other Pursuit (5,530) Impairment Charges (1,494) Interest Expense (55,766) Loss on Extinguishment of Debt (113) Change in Fair Value of Derivatives and Other 6,978 Unrealized Credit Loss Provision (53) Other Income, Net 254 Income Tax Benefit 120 Net Income $13,458 Net Income Attributable to Noncontrolling Interests in Investment Entities (34) Preferred Stock Dividends (8,661) Net Income Attributable to AHH and OP Unitholders $4,763
40 Three Months Ended 9/30/2024 6/30/2024 3/31/2024 12/31/2023 Net (Loss) Income Attributable to Common Stockholders and OP Unitholders ($10,416) $375 $14,804 ($23,938) Excluding: Depreciation and Amortization 23,289 20,789 20,435 35,270 Impairment of Real Estate Assets — 1,494 — — Income Tax Provision (Benefit) 592 (1,246) 534 495 Interest Expense 21,387 21,227 17,975 16,435 EBITDAre $34,852 $42,639 $53,748 $28,262 Change in Fair Value of Derivatives and Other 10,308 (4,398) (12,888) 11,266 Preferred Dividends 2,887 2,887 2,887 2,887 Loss on Extinguishment of Debt 113 — — — Non-Recurring Bad Debt Adjustment 296 (478) 758 2,730 Non-Recurring Termination Fee Adjustment (4,277) (103) (115) (85) Accelerated Amortization of Intangible Assets and Liabilities (5) — — 5 Acquisition, Development, & Other Pursuit Costs 2 5,528 — 66 Unrealized Credit Loss Provision (Release) 198 (228) 83 (297) Investment Entities (17) 17 34 (11) Non-Cash Stock Compensation 710 744 2,192 729 Development/Redevelopment (189) (51) (116) (73) Total Adjusted EBITDAre $44,878 $46,557 $46,583 $45,479 Construction Gross Profit (3,366) (4,339) (4,077) (3,534) Corporate G&A 5,008 4,328 5,744 4,154 Non-Cash Stock Compensation (710) (744) (2,192) (729) Interest Income (4,636) (4,580) (4,596) (4,265) Other (Expense) Income, Net (17) (20) (22) 61 Add Back: Unstabilized EBITDAre — — — — Stabilized Portfolio Adjusted EBITDAre $41,157 $41,202 $41,440 $41,166 Development/Redevelopment 189 51 116 73 Property Adjusted EBITDAre $41,346 $41,253 $41,556 $41,239 RECONCILIATION OF NET INCOME TO PROPERTY ADJUSTED EBITDAre $ IN THOUSANDS
41 This Supplemental Financial Package should be read in conjunction with the unaudited condensed consolidated financial statements appearing in the Company’s press release dated November 4, 2024, which has been furnished as Exhibit 99.1 to the Company’s Form 8-K furnished with the Securities and Exchange Commission (“SEC”) on November 4, 2024. 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 real estate financing 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, 2023, and the other documents filed by the Company with 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