UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 9, 2017
ARMADA HOFFLER PROPERTIES, INC.
(Exact name of registrant as specified in its charter)
Maryland | 001-35908 | 46-1214914 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||
222 Central Park Avenue, Suite 2100 | ||
Virginia Beach, Virginia | 23462 | |
(Address of principal executive offices) | (Zip Code) | |
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:
◻ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
◻ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
◻ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
◻ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02. Results of Operations and Financial Condition.
On February 9, 2017, Armada Hoffler Properties, Inc. (the “Company”) issued a press release announcing its financial position as of December 31, 2016, results of operations for the three and twelve months ended December 31, 2016 and other related information. Also on February 9, 2017, the Company made available on its website at www.ArmadaHoffler.com certain supplemental information concerning the Company’s financial results and operations for the three and twelve months ended December 31, 2016. 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.
Item 7.01. Regulation FD Disclosure.
The disclosure contained in Item 2.02 is incorporated herein by reference.
On February 9, 2017, the Company made available a presentation regarding its 2017 full-year guidance, which is furnished as Exhibit 99.3 to this Current Report on Form 8-K.
In accordance with General Instructions B.2 and B.6 of Form 8-K, the information included in this Current Report on Form 8-K, including Exhibits 99.1, 99.2 and 99.3 hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any filing made by the Company under the Exchange Act or Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. | Description | |
99.1 | Press Release, dated February 9, 2017, issued by Armada Hoffler Properties, Inc., providing its financial position as of December 31, 2016 and results of operations for the three and twelve months ended December 31, 2016. | |
99.2 | Armada Hoffler Properties, Inc. Fourth Quarter 2016 Supplemental Information. | |
99.3 | Armada Hoffler Properties, Inc. 2017 Guidance Presentation. | |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
ARMADA HOFFLER PROPERTIES, INC. | ||
Date: February 9, 2017 | /s/ MICHAEL P. O’HARA | |
Michael P. O’Hara | ||
Chief Financial Officer and Treasurer | ||
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EXHIBIT INDEX
Exhibit No. | Description | |
99.1 | Press Release, dated February 9, 2017, issued by Armada Hoffler Properties, Inc., providing its financial position as of December 31, 2016 and results of operations for the three and twelve months ended December 31, 2016. | |
99.2 | Armada Hoffler Properties, Inc. Fourth Quarter 2016 Supplemental Information. | |
99.3 | Armada Hoffler Properties, Inc. 2017 Guidance Presentation. | |
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Exhibit 99.1
 | PRESS RELEASE | |
ARMADA HOFFLER PROPERTIES REPORTS FOURTH QUARTER AND FULL YEAR 2016 RESULTS
Net Income of $0.09 per Diluted Share for the Fourth Quarter
and $0.85 per Diluted Share for the Full Year
Normalized FFO of $0.25 per Diluted Share for the Fourth Quarter
and $1.01 per Diluted Share for the Full Year
Company Introduces 2017 Full-Year Normalized FFO Guidance
Board of Directors Increases First Quarter 2017 Cash Dividend by 5.6% to $0.19 per Share
VIRGINIA BEACH, VA, February 9, 2017 – Armada Hoffler Properties, Inc. (NYSE: AHH) today announced its results for the quarter and year ended December 31, 2016 and provided an update on current events.
Highlights include:
• | Net income of $5.1 million, or $0.09 per diluted share, for the quarter ended December 31, 2016 compared to net income of $8.4 million, or $0.19 per diluted share, for the quarter ended December 31, 2015. Net income of $42.8 million, or $0.85 per diluted share, for the year ended December 31, 2016 compared to net income of $31.2 million, or $0.75 per diluted share, for the year ended December 31, 2015. |
• | Normalized Funds From Operations (“FFO”) of $13.7 million, or $0.25 per diluted share, for the quarter ended December 31, 2016 compared to Normalized FFO of $10.6 million, or $0.24 per diluted share, for the quarter ended December 31, 2015. Normalized FFO of $50.9 million, or $1.01 per diluted share, for the year ended December 31, 2016 compared to Normalized FFO of $38.7 million, or $0.93 per diluted share, for the year ended December 31, 2015. |
• | FFO of $14.7 million, or $0.27 per diluted share, for the quarter ended December 31, 2016 compared to FFO of $9.6 million, or $0.22 per diluted share, for the quarter ended December 31, 2015. FFO of $48.0 million, or $0.96 per diluted share, for the year ended December 31, 2016 compared to FFO of $35.9 million, or $0.87 per diluted share, for the year ended December 31, 2015. |
• | Introduced 2017 full-year Normalized FFO guidance in the range of $0.99 to $1.03 per diluted share, as illustrated in the enclosed presentation that can also be found on the Company's website at www.ArmadaHoffler.com. The Company's executive management will provide further details regarding its 2017 earnings guidance during today's webcast and conference call. |
• | Announced that its Board of Directors declared a cash dividend of $0.19 per common share for the first quarter of 2017, representing a 5.6% increase over the prior quarter’s cash dividend and the third increase in three years totaling approximately 19% dividend growth. |
• | Same Store Net Operating Income (“NOI”) increased for the tenth consecutive quarter. |
• | Core operating property portfolio occupancy at 94.3% compared to 95.3% as of December 31, 2015. The decrease in occupancy is primarily due to existing tenants within Town Center expanding and relocating to our 4525 Main Street tower, which is a non-core office property. |
• | Agreed to develop, build and own a 100,000 square foot office tower anchored by Newport News Shipbuilding, a division of Huntington Ingalls Industries (NYSE:HII), as part of an ongoing public-private partnership with the City of Newport News on the Brooks Crossing development project. |
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• | Closed on the acquisition of Columbus Village II, a 92,000 square foot retail and entertainment center adjacent to the Town Center of Virginia Beach, Virginia. Combined with Columbus Village I, which was acquired in 2015, the resulting contiguous 12 acres are a prime target for redevelopment and ultimate integration into the dynamic Town Center environment. |
• | Closed on the acquisition of Renaissance Square, an 80,000 square foot Harris Teeter-anchored retail center located in the greater Charlotte area of North Carolina. |
• | Added to the MSCI U.S REIT Index (RMZ) effective as of the close of the market on November 30, 2016. |
Commenting on the Company’s results, Louis Haddad, President and CEO, said, "While I am pleased to report another quarter and year of bottom-line per share growth, I’m more excited about the value that we’ve delivered to our shareholders this past year and our potential for future growth over the coming years. Our total shareholder return for 2016 was 47 percent, significantly outperforming both the RMS and Russell 2000 indices. And when I look at the quality of assets and locations in our development pipeline, there’s good reason to be optimistic about the future growth potential of our Company."
Operating Performance
The fourth quarter and full year changes in net income, Normalized FFO and FFO were positively impacted by property acquisitions, organic same store NOI growth and higher interest income, which were partially offset by lower construction segment gross profits and higher interest expense. The full year change in net income was also positively impacted by higher gains on real estate dispositions, which were partially offset by higher depreciation and amortization expense from acquired properties and new properties placed into service. For the fourth quarter, both net income and FFO were positively impacted by mark-to-market gains on interest rate derivatives. Net income for the fourth quarter was negatively impacted by the decrease in gains on real estate dispositions when compared to the fourth quarter of 2015.
At the end of the fourth quarter, the Company’s office, retail and multifamily core operating property portfolios were 89.9%, 95.8% and 94.3% occupied, respectively. The decrease in office occupancy is primarily due to existing tenants within Town Center expanding and relocating to our 4525 Main Street tower, which is a non-core office property.
Total construction contract backlog was $217.7 million at the end of the year.
Balance Sheet and Financing Activity
As of December 31, 2016, the Company had $527 million of total debt outstanding, including $107 million outstanding under its revolving credit facility. Total debt outstanding excludes unamortized GAAP fair value adjustments and deferred financing costs. Approximately 46% of the Company’s debt had fixed interest rates or were subject to interest rate swaps as of December 31, 2016. After considering LIBOR interest rate caps with strike prices at or below 150 basis points, as of December 31, 2016, approximately 97% of the Company’s debt was fixed or hedged.
During the fourth quarter, the Company raised an aggregate of $17.4 million of gross proceeds under its At-The-Market (“ATM”) continuous equity offering program at a weighted average price of $14.10 per share. For the year ended December 31, 2016, the Company raised an aggregate of $68.5 million of gross proceeds under the ATM at a weighted average price of $12.89 per share.
Outlook
The Company is introducing its 2017 full-year Normalized FFO guidance in the range of $0.99 to $1.03 per diluted share, as illustrated in the enclosed presentation that can also be found on the Company's website at www.ArmadaHoffler.com. The Company's executive management will provide further details regarding its 2017 earnings guidance during today's webcast and conference call.
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Supplemental Financial Information
Further details regarding operating results, properties and leasing statistics can be found in the Company’s supplemental financial package available at www.ArmadaHoffler.com under the Investor Relations section.
Webcast and Conference Call
The Company will host a webcast and conference call on Thursday, February 9, 2017 at 8:30 a.m. Eastern Time to review financial results and discuss recent events. The live webcast will be available through the Investor Relations page of the Company’s website, www.ArmadaHoffler.com, or through www.viavid.com. To participate in the call, please dial 877-407-3982 (domestic) or 201-493-6780 (international). A replay of the conference call will be available through Thursday, March 9, 2017 by dialing 877-870-5176 (domestic) or 858-384-5517 (international) and entering the pass code 13652128.
About Armada Hoffler Properties, Inc.
Armada Hoffler Properties, Inc. is a full service real estate company with extensive experience developing, building, owning and managing high-quality, institutional-grade office, retail and multifamily properties in attractive markets throughout the Mid-Atlantic and Southeastern United States. The Company has elected to be taxed as a real estate investment trust (“REIT”) for U.S. federal income tax purposes.
Forward-Looking Statements
Certain matters within this press release are discussed using forward-looking language as specified in the Private Securities Litigation Reform Act of 1995, and, as such, may involve known and unknown risks, uncertainties and other factors that may cause the actual results or performance to differ from those projected in the forward-looking statement. These forward-looking statements may include comments relating to the current and future performance of the Company’s operating property portfolio, the Company’s development pipeline, the Company’s construction and development business, including backlog and timing of deliveries, financing activities, as well as acquisitions, dispositions and the Company’s financial outlook, guidance and expectations. For a description of factors that may cause the Company’s actual results or performance to differ from its forward-looking statements, please review the information under the heading “Risk Factors” included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015, and the other documents filed by the Company with the Securities and Exchange Commission.
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 gains (or losses) from sales of depreciable operating property, real estate related depreciation and amortization (excluding amortization of deferred financing costs) and after adjustments for unconsolidated partnerships and joint ventures.
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
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accordance with the NAREIT definition as the Company does, and, accordingly, the Company’s FFO may not be comparable to such other REITs’ FFO. Accordingly, FFO should be considered only as a supplement to net income as a measure of the Company’s performance.
Management also believes that the computation of FFO in accordance with NAREIT’s definition includes certain items that are not indicative of the results provided by the Company’s operating property portfolio and affect the comparability of the Company’s period-over-period performance. Accordingly, management believes that Normalized FFO is a more useful performance measure that excludes certain items, including but not limited to, debt extinguishment losses and prepayment penalties, property acquisition, development and other pursuit costs, mark-to-market adjustments for interest rate derivatives and other non-comparable items.
For reference, as an aid in understanding the Company’s computation of FFO and Normalized FFO, a reconciliation of net income calculated in accordance with GAAP to FFO and Normalized FFO has been included in the final page of this release.
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ARMADA HOFFLER PROPERTIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
December 31, | ||||||||
2016 | 2015 | |||||||
(Unaudited) | ||||||||
ASSETS | ||||||||
Real estate investments: | ||||||||
Income producing property | $ | 894,078 | $ | 579,000 | ||||
Held for development | 680 | 1,180 | ||||||
Construction in progress | 13,529 | 53,411 | ||||||
Accumulated depreciation | (139,553 | ) | (125,380 | ) | ||||
Net real estate investments | 768,734 | 508,211 | ||||||
Real estate investments held for sale | — | 40,232 | ||||||
Cash and cash equivalents | 21,942 | 26,989 | ||||||
Restricted cash | 3,251 | 2,824 | ||||||
Accounts receivable, net | 15,052 | 21,982 | ||||||
Notes receivable | 59,546 | 7,825 | ||||||
Construction receivables, including retentions | 39,433 | 36,535 | ||||||
Construction contract costs and estimated earnings in excess of billings | 110 | 88 | ||||||
Equity method investments | 10,235 | 1,411 | ||||||
Other assets | 64,165 | 43,450 | ||||||
Total Assets | $ | 982,468 | $ | 689,547 | ||||
LIABILITIES AND EQUITY | ||||||||
Indebtedness, net | $ | 522,180 | $ | 377,593 | ||||
Accounts payable and accrued liabilities | 10,804 | 6,472 | ||||||
Construction payables, including retentions | 51,130 | 52,067 | ||||||
Billings in excess of construction contract costs and estimated earnings | 10,167 | 2,224 | ||||||
Other liabilities | 39,209 | 25,471 | ||||||
Total Liabilities | $ | 633,490 | $ | 463,827 | ||||
Total Equity | 348,978 | 225,720 | ||||||
Total Liabilities and Equity | $ | 982,468 | $ | 689,547 | ||||
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ARMADA HOFFLER PROPERTIES, INC.
CONDENSED CONSOLIDATED INCOME STATEMENTS
(in thousands, except per share amounts)
Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
(Unaudited) | ||||||||||||||||
Revenues | ||||||||||||||||
Rental revenues | $ | 26,516 | $ | 21,771 | $ | 99,355 | $ | 81,172 | ||||||||
General contracting and real estate services | 50,475 | 41,309 | 159,030 | 171,268 | ||||||||||||
Total revenues | 76,991 | 63,080 | 258,385 | 252,440 | ||||||||||||
Expenses | ||||||||||||||||
Rental expenses | 5,670 | 4,948 | 21,904 | 19,204 | ||||||||||||
Real estate taxes | 2,542 | 2,110 | 9,629 | 7,782 | ||||||||||||
General contracting and real estate services | 49,039 | 40,203 | 153,375 | 165,344 | ||||||||||||
Depreciation and amortization | 9,692 | 6,162 | 35,328 | 23,153 | ||||||||||||
General and administrative | 2,688 | 2,100 | 9,552 | 8,397 | ||||||||||||
Acquisition, development and other pursuit costs | 77 | 885 | 1,563 | 1,935 | ||||||||||||
Impairment charges | 171 | 18 | 355 | 41 | ||||||||||||
Total expenses | 69,879 | 56,426 | 231,706 | 225,856 | ||||||||||||
Operating income | 7,112 | 6,654 | 26,679 | 26,584 | ||||||||||||
Interest income | 1,300 | 126 | 3,228 | 126 | ||||||||||||
Interest expense | (4,573 | ) | (3,411 | ) | (16,466 | ) | (13,333 | ) | ||||||||
Loss on extinguishment of debt | — | (102 | ) | (82 | ) | (512 | ) | |||||||||
Gain on real estate dispositions | 93 | 4,987 | 30,533 | 18,394 | ||||||||||||
Change in fair value of interest rate derivatives | 1,323 | 9 | (941 | ) | (229 | ) | ||||||||||
Other income (loss) | (7 | ) | 63 | 147 | 119 | |||||||||||
Income before taxes | 5,248 | 8,326 | 43,098 | 31,149 | ||||||||||||
Income tax provision | (103 | ) | 117 | (343 | ) | 34 | ||||||||||
Net income | 5,145 | 8,443 | 42,755 | 31,183 | ||||||||||||
Per diluted share | $ | 0.09 | $ | 0.19 | $ | 0.85 | $ | 0.75 | ||||||||
Weighted average shares outstanding | 54,258 | 43,438 | 50,224 | 41,383 | ||||||||||||
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ARMADA HOFFLER PROPERTIES, INC.
RECONCILIATION OF NET INCOME TO FFO & NORMALIZED FFO
(in thousands, except per share amounts)
Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Net income | $ | 5,145 | $ | 8,443 | $ | 42,755 | $ | 31,183 | ||||||||
Depreciation and amortization | 9,692 | 6,162 | 35,328 | 23,153 | ||||||||||||
Gain on dispositions of operating real estate(1) | (93 | ) | (4,987 | ) | (30,103 | ) | (18,394 | ) | ||||||||
Funds From Operations (FFO) | $ | 14,744 | $ | 9,618 | $ | 47,980 | $ | 35,942 | ||||||||
Acquisition costs | 77 | 885 | 1,563 | 1,935 | ||||||||||||
Impairment charges | 171 | 18 | 355 | 41 | ||||||||||||
Loss on extinguishment of debt | — | 102 | 82 | 512 | ||||||||||||
Change in fair value of interest rate derivatives | (1,323 | ) | (9 | ) | 941 | 229 | ||||||||||
Normalized FFO | $ | 13,669 | $ | 10,614 | $ | 50,921 | $ | 38,659 | ||||||||
FFO per diluted share | $ | 0.27 | $ | 0.22 | $ | 0.96 | $ | 0.87 | ||||||||
Normalized FFO per diluted share | $ | 0.25 | $ | 0.24 | $ | 1.01 | $ | 0.93 | ||||||||
Weighted average shares outstanding | 54,258 | 43,438 | 50,224 | 41,383 | ||||||||||||
(1) Excludes gains on non-operating undepreciated real estate of $430 for the year ended December 31, 2016.
Contact:
Michael P. O’Hara
Armada Hoffler Properties, Inc.
Chief Financial Officer and Treasurer
Email: MOHara@ArmadaHoffler.com
Phone: (757) 366-6684
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Table of Contents
Same Store NOI by Segment
Top 10 Tenants by Annualized Base Rent
Office Lease Summary
Office Lease Expirations
Retail Lease Summary
Retail Lease Expirations
Net Asset Value Component Data
Appendix – Definitions & Reconciliations
Same Store vs Non-Same Store Properties
Reconciliation to Property Portfolio NOI
Reconciliation to GAAP Net Income
Forward Looking Statements
Corporate Profile
Highlights
Summary Information
Summary Balance Sheet
Summary Income Statement
FFO, Normalized FFO & Adjusted FFO
Outstanding Debt
Core Debt to Core EBITDA
Debt Information
Capitalization & Financial Ratios
Property Portfolio
Development Pipeline
Acquisitions & Dispositions
Construction Business Summary
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Forward Looking Statements
This Supplemental Information should be read in conjunction with the unaudited condensed consolidated
financial statements appearing in our press release dated February 9, 2017, which has been furnished as
Exhibit 99.1 to our Form 8-K filed on February 9, 2017. The Company makes statements in this
Supplemental Information that are forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995 (set forth in Section 27A of the Securities Act of 1933, as amended (the
“Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”)). In particular, statements pertaining to our capital resources, portfolio performance and results of
operations contain forward-looking statements. Likewise, all of our statements regarding anticipated growth
in our funds from operations, normalized funds from operations, adjusted funds from operations, funds
available for distribution and net operating income are forward-looking statements. You can identify forward-
looking statements by the use of forward-looking terminology such as “believes,” “expects,” “may,” “will,”
“should,” “seeks,” “intends,” “plans,” “estimates” or “anticipates” or the negative of these words and phrases
or similar words or phrases which are predictions of or indicate future events or trends and which do not
relate solely to historical matters. You can also identify forward-looking statements by discussions of
strategy, plans or intentions.
Forward-looking statements involve numerous risks and uncertainties and you should not rely on them as
predictions of future events. Forward-looking statements depend on assumptions, estimates, data or
methods, which may be incorrect or imprecise, and actual results may vary materially from those anticipated,
estimated or projected. The Company does not guarantee that the transactions and events described will
happen as described (or that they will happen at all). For further discussion of risk factors and other events
that could impact our future results, please refer to the section entitled “Risk Factors” in our most recent
Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”), and the
documents subsequently filed by us from time to time with the SEC.
Analyst Coverage
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Corporate Profile
Armada Hoffler Properties, Inc. (NYSE:AHH) is a full service real estate company that develops, constructs and owns
institutional grade office, retail and multifamily properties in the Mid-Atlantic United States. The Company also provides
general contracting and development services to third-party clients throughout the Mid-Atlantic and Southeastern regions.
Armada Hoffler Properties, Inc. was founded in 1979 and is headquartered in Virginia Beach, VA. The Company has elected
to be taxed as a real estate investment trust (“REIT”) for U.S. federal income tax purposes.
Board of Directors Corporate Officers
Investor Relations
Daniel A. Hoffler
A. Russell Kirk
Louis S. Haddad
John W. Snow
George F. Allen
James A. Carroll
James C. Cherry
Eva S. Hardy
Executive Chairman of Board
Vice Chairman of the Board
Director
Lead Independent Director
Independent Director
Independent Director
Independent Director
Independent Director
Louis S. Haddad
Michael P. O’?ara
Eric L. Smith
Eric E. Apperson
Shelly R. Hampton
President and Chief Executive Officer
Chief Financial Officer and Treasurer
Chief Investment Officer and Corporate Secretary
President of Construction
President of Asset Management
Michael P. O’?ara Chief Financial Officer and Treasurer
(757) 366-6684 mohara@armadahoffler.com
Janney, Montgomery, & Scott LLC Robert Stevenson
(646) 840-3217 robertstevenson@janney.com
Raymond James & Associates Bill Crow
(727) 567-2594 bill.crow@raymondjames.com
D. A. Davidson & Co. James O. Lykins
(503) 603-3041 jlykins@dadco.com
Robert W. Baird & Co. David Rodgers
(216) 737-7341 drodgers@rwbaird.com
Stonegate Capital Partners Laura Engel
(214) 987-4121 laura@stonegateinc.com
Stifel, Nicolaus & Company, Inc. John Guinee
(443) 224-1307 jwguinee@stifel.com
Wunderlich Securities Craig Kucera
(540) 277-3366 ckucera@wundernet.com
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Highlights
• Net income of $5.1 million, or $0.09 per diluted share, for the quarter ended December 31, 2016 compared to net income of $8.4 million, or
$0.19 per diluted share, for the quarter ended December 31, 2015. Net income of $42.8 million, or $0.85 per diluted share, for the year ended
December 31, 2016 compared to net income of $31.2 million, or $0.75 per diluted share, for the year ended December 31, 2015.
• Normalized Funds From Operations (“FFO”) of $13.7 million, or $0.25 per diluted share, for the quarter ended December 31, 2016 compared
to Normalized FFO of $10.6 million, or $0.24 per diluted share, for the quarter ended December 31, 2015. Normalized FFO of $50.9 million,
or $1.01 per diluted share, for the year ended December 31, 2016 compared to Normalized FFO of $38.7 million, or $0.93 per diluted share,
for the year ended December 31, 2015.
• FFO of $14.7 million, or $0.27 per diluted share, for the quarter ended December 31, 2016 compared to FFO of $9.6 million, or $0.22 per
diluted share, for the quarter ended December 31, 2015. FFO of $48.0 million, or $0.96 per diluted share, for the year ended December 31,
2016 compared to FFO of $35.9 million, or $0.87 per diluted share, for the year ended December 31, 2015.
• Introduced 2017 full-year Normalized FFO guidance in the range of $0.99 to $1.03 per diluted share, as illustrated in a presentation that was
distributed this morning and can be found on the Company's website at www.ArmadaHoffler.com. The Company's executive management
will provide further details regarding its 2017 earnings guidance during today's webcast and conference call.
• Announced that its Board of Directors declared a cash dividend of $0.19 per common share for the first quarter of 2017, representing a 5.6%
increase over the prior quarter’s cash dividend and the third increase in three years totaling approximately 19% dividend growth.
• Same Store Net Operating Income (“NOI”) increased for the tenth consecutive quarter.
• Core operating property portfolio occupancy at 94.3% compared to 95.3% as of December 31, 2015. The decrease in occupancy is primarily
due to existing tenants within Town Center expanding and relocating to our 4525 Main Street tower, which is a non-core office property.
• Agreed to develop, build and own a 100,000 square foot office tower anchored by Newport News Shipbuilding, a division of Huntington
Ingalls Industries (NYSE:HII), as part of an ongoing public-private partnership with the City of Newport News on the Brooks Crossing
development project.
• Closed on the acquisition of Columbus Village II, a 92,000 square foot retail and entertainment center adjacent to the Town Center of Virginia
Beach, Virginia. Combined with Columbus Village I, which was acquired in 2015, the resulting contiguous 12 acres are a prime target for
redevelopment and ultimate integration into the dynamic Town Center environment.
• Closed on the acquisition of Renaissance Square, an 80,000 square foot Harris Teeter-anchored retail center located in the greater Charlotte
area of North Carolina.
• Added to the MSCI U.S REIT Index (RMZ) effective as of the close of the market on November 30, 2016.
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Summary Information
$ in thousands, except per share data
Three months ended
12/31/2016 9/30/2016 6/30/2016 3/31/2016 12/31/2015
OPERATIONAL METRICS
Net income $5,145 $7,946 $3,131 $26,533 $8,443
Net income per diluted share $0.09 $0.15 $0.06 $0.57 $0.19
Rental properties Net Operating Income (NOI) 18,304 17,115 16,798 15,605 14,713
General contracting and real estate services gross profit 1,436 1,278 1,175 1,766 1,106
Adjusted EBITDA (1) 18,097 16,720 16,077 14,406 12,903
Funds From Operations (FFO) 14,744 13,078 11,720 8,438 9,618
FFO per diluted share $0.27 $0.25 $0.24 $0.18 $0.22
Normalized FFO 13,669 13,156 12,530 11,566 10,614
Normalized FFO per diluted share $0.25 $0.26 $0.26 $0.25 $0.24
Annualized dividend yield 4.94% 5.37% 5.24% 6.40% 6.49%
CAPITALIZATION
Total common shares outstanding 37,491 34,256 32,825 31,095 30,076
Operating Partnership ("OP") units outstanding 17,793 17,793 17,597 16,027 16,027
Common shares and OP units outstanding 55,284 52,049 50,422 47,122 46,103
Market price per common share $14.57 $13.40 $13.74 $11.25 $10.48
Equity market capitalization(2) $805,488 $697,457 $692,798 $530,123 $483,159
Total debt(3) 527,082 519,209 512,702 471,876 382,013
Total market capitalization 1,332,570 1,216,666 1,205,500 1,001,999 865,172
Less: cash (25,193) (27,361) (23,142) (22,505) (29,813)
Total enterprise value $1,307,377 $1,189,305 $1,182,358 $979,494 $835,359
BALANCE SHEET METRICS
Core Debt/enterprise value 31.7% 34.3% 35.4% 40.1% 37.0%
Fixed charge coverage ratio 3.3x 3.4x 3.3x 3.1x 3.1x
Core Debt/Annualized Core EBITDA 6.3x 6.4x 6.7x 6.9x 6.1x
CORE PORTFOLIO OCCUPANCY
Office (4) 89.9% 96.4% 94.6% 95.0% 95.8%
Retail (4) 95.8% 96.4% 96.0% 95.1% 95.5%
Multifamily(5) 94.3% 95.8% 94.3% 93.5% 94.2%
Weighted Average (6) 94.3% 96.2% 95.3% 94.7% 95.3%
(1) Excludes gains on dispositions of real estate and mark-to-market adjustments on interest rate derivatives
(2) Includes common shares and OP units
(3) Excludes unamortized GAAP adjustments
(4) Office and retail occupancy based on leased square feet as a % of respective total
(5) Multifamily occupancy based on occupied units as a % of respective total
(6) Total occupancy weighted by annualized base rent
7
Summary Balance Sheet
$ in thousands
12/31/2016 12/31/2015
Assets (Unaudited)
Real estate investments:
Income producing property $894,078 $579,000
Held for development 680 1,180
Construction in progress 13,529 53,411
Accumulated depreciation (139,553) (125,380)
Net real estate investments 768,734 508,211
Real estate investments held for sale - 40,232
Cash and cash equivalents 21,942 26,989
Restricted cash 3,251 2,824
Accounts receivable, net 15,052 21,982
Notes receivable 59,546 7,825
Construction receivables, including retentions 39,433 36,535
Costs and estimated earnings in excess of bil l ings 110 88
Equity method investments 10,235 1,411
Other assets 64,165 43,450
Total Assets $982,468 $689,547
Liabilities and Equity
Indebtedness, net $522,180 $377,593
Accounts payable and accrued liabilities 10,804 6,472
Construction payables, including retentions 51,130 52,067
Bil l ings in excess of costs and estimated earnings 10,167 2,224
Other l iabilities 39,209 25,471
Total Liabilities 633,490 463,827
Total Equity 348,978 225,720
Total Liabilities and Equity $982,468 $689,547
As of
8
Summary Income Statement
Amounts in thousands, except per share data
Three months ended Year Ended
12/31/2016 12/31/2015 12/31/2016 12/31/2015
Revenues (Unaudited) (Unaudited)
Rental revenues $26,516 $21,771 $99,355 $81,172
General contracting and real estate services 50,475 41,309 159,030 171,268
Total Revenues 76,991 63,080 258,385 252,440
Expenses
Rental expenses 5,670 4,948 21,904 19,204
Real estate taxes 2,542 2,110 9,629 7,782
General contracting and real estate services 49,039 40,203 153,375 165,344
Depreciation and amortization 9,692 6,162 35,328 23,153
General and administrative 2,688 2,100 9,552 8,397
Acquisition, development & other pursuit costs 77 885 1,563 1,935
Impairment charges 171 18 355 41
Total Expenses 69,879 56,426 231,706 225,856
Operating Income 7,112 6,654 26,679 26,584
Interest income 1,300 126 3,228 126
Interest expense (4,573) (3,411) (16,466) (13,333)
Loss on extinguishment of debt - (102) (82) (512)
Gain on real estate dispositions 93 4,987 30,533 18,394
Change in fair value of interest rate derivatives 1,323 9 (941) (229)
Other income (loss) (7) 63 147 119
Income before taxes 5,248 8,326 43,098 31,149
I come tax benefit (provision) (103) 117 (343) 34
Net Income $5,145 $8,443 $42,755 $31,183
Per Diluted Share $0.09 $0.19 $0.85 $0.75
Weighted Average Shares-Diluted 54,258 43,438 50,224 41,383
(1) See definitions on pages 27-28
(2) Excludes gain on non-operating real estate of $430K for the three months ended 3/31/2016 and year ended 12/31/16
(3) Excludes first generation rental space
9
FFO, Normalized FFO & Adjusted FFO(1)
$ in thousands, except per share data
Three months ended Year Ended December 31,
12/31/2016 9/30/2016 6/30/2016 3/31/2016 2016 2015
Funds From Operations (Unaudited) (Unaudited)
Net income $5,145 $7,946 $3,131 $26,533 $42,755 $31,183
Earnings per diluted share $0.09 $0.15 $0.06 $0.57 $0.85 $0.75
Depreciation and amortization 9,692 8,885 8,602 8,149 35,328 23,153
Gain on disposition of operating real estate(2) (93) (3,753) (13) (26,244) (30,103) (18,394)
FFO $14,744 $13,078 11,720 $8,438 $47,980 $35,942
FFO per diluted share $0.27 $0.25 $0.24 $0.18 $0.96 $0.87
Normalized FFO
Acquisition, development & other pursuit costs 77 345 437 704 1,563 1,935
Loss on extinguishment of debt - 82 - - 82 512
Impairment charges 171 149 - 35 355 41
Change in fair value of interest rate derivatives (1,323) (498) 373 2,389 941 229
Normalized FFO $13,669 $13,156 $12,530 $11,566 $50,921 $38,659
Normalized FFO per diluted share $0.25 $0.26 $0.26 $0.25 $1.01 $0.93
Adjusted FFO
Non-cash stock compensation 218 212 215 437 1,082 931
Acquisition, development & other pursuit costs (77) (345) (437) (704) (1,563) (1,935)
Tenant improvements, leasing commissions (3) (507) (233) (1,365) (287) (2,392) (2,741)
Property related capital expenditures (434) (514) (603) (390) (1,941) (1,718)
Non-cash interest expense 293 219 277 191 980 1,006
Net effect of straight-line rents (246) (158) (194) (122) (720) (1,634)
Amortization of leasing incentives & above (below) market rents (24) 116 (183) 6 (85) 738
Government development grants - - - - - 300
AFFO $12,892 $12,453 $10,240 $10,697 $46,282 $33,606
Weighted Average Common Shares Outstanding 36,465 33,792 31,736 30,191 33,057 26,006
Weighted Average Operating Partnership ("OP") Units Outstanding 17,793 17,720 17,113 16,027 17,167 15,377
Total Weighted Average Common Shares and OP Units Outstanding 54,258 51,512 48,849 46,218 50,224 41,383
10
Outstanding Debt
$ in thousands
30 Day LIBOR as
of 12/31/2016
0.772%(1) Subject to an interest rate swap lock.
(2) Includes debt subject to interest rate swap locks.
(3) Excludes debt subject to interest rate swap locks.
Debt Maturities & Principal Payments
Debt Stated Rate
Effective Rate as of
12/31/2016 Maturity Date 2017 2018 2019 2020 2021 Thereafter
Amount Outstanding
as of 12/31/2016
Secured Notes Payable - Core Debt
North Point Note 5 L+2.00% 3.57% (1) 2/1/2017 $643 $643
Harrisonburg Regal 6.06% 6.06% 6/8/2017 3,256 3,256
Commonwealth of Virginia - Chesapeake L+1.90% 2.67% 8/28/2017 4,933 4,933
Hanbury Village 6.67% 6.67% 10/11/2017 20,709 20,709
Sandbridge Commons L+1.85% 2.62% 1/17/2018 247 9,129 9,376
Columbus Village Note 1 L+2.00% 3.05% (1) 4/5/2018 178 6,080 6,258
Columbus Village Note 2 L+2.00% 2.77% 4/5/2018 48 2,218 2,266
North Point Center Note 1 6.45% 6.45% 2/5/2019 205 219 9,352 9,776
Southgate Square L+2.00% 2.77% 4/29/2021 391 539 561 584 19,075 21,150
249 Central Park Retail L+1.95% 2.72% 8/8/2021 229 229 243 258 16,117 17,076
South Retail L+1.95% 2.72% 8/8/2021 100 101 107 113 7,072 7,493
Fountain Plaza Retail L+1.95% 2.72% 8/8/2021 137 138 147 156 9,703 10,281
Encore Apartments 3.25% 3.25% 9/10/2021 124 504 24,338 24,966
Socastee Commons 4.57% 4.57% 1/6/2023 94 100 105 109 115 4,343 4,866
North Point Center Note 2 7.25% 7.25% 9/15/2025 106 113 121 130 140 1,954 2,564
Smith's Landing 4.05% 4.05% 6/1/2035 754 791 824 858 890 16,394 20,511
Liberty Apartments 5.66% 5.66% 11/1/2043 326 344 364 385 415 18,171 20,005
The Cosmopolitan 3.75% 3.75% 7/1/2051 660 686 712 739 767 42,320 45,884
Total - Secured Core Debt $33,016 $20,687 $12,660 $3,836 $78,632 $83,182 $232,013
Secured Notes Payable - Development Pipeline
4525 Main Street 3.25% 3.25% 9/10/2021 158 646 31,230 32,034
Lightfoot Marketplace L+1.90% 2.67% 11/14/2017 12,194 12,194
Johns Hopkins Village L+1.90% 2.67% 7/30/2018 43,841 43,841
Total - Development Pipeline 12,194 43,841 158 646 31,230 - 88,069
Total Secured Notes Payable $45,210 $64,528 $12,818 $4,482 $109,862 $83,182 $320,082
Unsecured Core Debt
Senior unsecured line of credit L+1.40% - 2.00% 2.32% 2/20/2019 107,000 107,000
Senior unsecured term loan L+1.35% - 1.95% 2.27% 2/20/2020 50,000 50,000
Senior unsecured term loan L+1.35% - 1.95% 3.50% (1) 2/20/2020 50,000 50,000
Total - Unsecured Core Debt - - 107,000 100,000 - - 207,000
Total Notes Payable excluding GAAP Adjustments $45,210 $64,528 $119,818 $104,482 $109,862 $83,182 $527,082
Weighted Average Interest Rate 4.9% 2.8% 2.7% 2.9% 3.0% 4.4% 3.3%
Balloon Payments 41,432 60,873 116,333 100,000 106,274 5,567 430,479
Principal amortization 3,778 3,655 3,485 4,482 3,588 77,615 96,603
Total Consolidated Debt $45,210 $64,528 $119,818 $104,482 $109,862 $83,182 $527,082
Fixed-rate Debt(2) 26,931 8,333 11,760 53,371 57,895 83,182 241,472
Variable-rate Debt(3) 18,279 56,195 108,058 51,111 51,967 - 285,610
Total Consolidated Debt $45,210 $64,528 $119,818 $104,482 $109,862 83,182 $527,082
GAAP Adjustments (4,902)
Total Notes Payable $522,180
11
Core Debt to Core EBITDA(1)
$ in thousands
Three months ended
12/31/2016 9/30/2016 6/30/2016 3/31/2016 12/31/2015
Net Income $5,145 $7,946 $3,131 $26,533 $8,443
Excluding:
Interest expense 4,573 4,124 3,978 3,791 3,411
Income tax 103 16 6 218 (117)
Depreciation and amortization 9,692 8,885 8,602 8,149 6,162
Gain on real estate dispositions (93) (3,753) (13) (26,674) (4,987)
Change in fair value of interest rate derivatives (1,323) (498) 373 2,389 (9)
Adjusted EBITDA $18,097 $16,720 $16,077 $14,406 $12,903
Other adjustments:
Loss on extinguishment of debt - 82 - - 102
Non-cash stock compensation 218 212 215 437 176
Development Pipeline (1,917) (1,058) (719) (620) (606)
Total Other Adjustments (1,699) (764) (504) (183) (328)
Core EBITDA $16,398 $15,956 $15,573 $14,223 $12,575
Total Debt(2) $527,082 $519,209 $512,702 $471,876 $382,013
Adjustments to Debt:
(Less) Development Pipeline(2) (88,069) (84,321) (71,035) (56,592) (43,340)
(Less) Cash & restricted cash (25,193) (27,361) (23,142) (22,505) (29,813)
Core Debt $413,820 $407,527 $418,525 $392,779 $308,860
Core Debt/Annualized Core EBITDA 6.3x 6.4x 6.7x 6.9x 6.1x
(1) See definitions on page 29
(2) Excludes GAAP Adjustments
12
Debt Information
$ in thousands
(1) Excludes debt subject to interest rate swap locks.
(2) Includes debt subject to interest rate swap locks.
(3) Excludes GAAP adjustments.
Fixed-rate&
Hedged Debt
97%
Total Debt Composition
Weighted Average
Percent of Debt Interest Rate Maturity
Secured vs. Unsecured Debt
Unsecured Debt 39.3% 2.6% 2.6 Yrs
Secured Debt 60.7% 3.7% 10.0 Yrs
Variable vs. Fixed-rate Debt
Variable-rate Debt(1) 54.2% 2.5% 2.6 Yrs
Fixed-rate Debt(2)(3) 45.8% 4.2% 12.5 Yrs
Fixed-rate and Hedged Debt(2)(3) 97.0%
Total 3.3% 7.1 Yrs
Interest Rate Cap Agreements At or Below 1.50%
Effective Date Maturity Date Strike Rate Notional Amount
March 14, 2014 March 1, 2017 1.25% $50,000
October 26, 2015 October 15, 2017 1.25% 75,000
March 1, 2016 March 1, 2018 1.50% 75,000
June 17, 2016 June 17, 2018 1.00% 70,000
Total Interest Rate Caps at or Below 1.50% $270,000
Fixed-rate Debt (2)(3) 241,472
Fixed-rate and Hedged Debt $511,472
% of Total (3) 97.0%
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
2017 2018 2019 2020 2021 2022 and
thereafter
($
In
Th
ou
sa
nd
s)
Debt turities & Principal Payments
13
Capitalization & Financial Ratios
$ in thousands
Capitalization as of December 31, 2016 Capital Structure as of December 31, 2016
Debt % of Total Carrying Value
Unsecured Credit Facility 20% $107,000
Unsecured Term Loans 19% 100,000
Mortgages Payable 61% 320,082
Total Debt $527,082
Equity % of Total Shares/Units Stock Price Market Value
Common Stock (NYSE: AHH) 68% 37,491 $14.57 $546,244
Common Units 32% 17,793 $14.57 259,244
Equity Market Capitalization 55,284 $805,488
Total Market Capitalization $1,332,570
Debt/Market Capitalization 39.6%
Dividend Data Liquidity as of December 31, 2016
Trailing 12
Months
Common Dividends and Distributions $33,843 Cash on Hand $25,193
AFFO $46,282 Availability under Credit Facility(1) 68,000
AFFO Payout Ratio 73.1% $93,193
Debt
40%Equity
60%
(1) Credit Facility expanded to $275M following the close of the quarter
14
Property Portfolio
As of 12/31/16
(1) The net rentable square footage for each of our retail properties is the sum of (a) the square footage of existing leases, plus (b) for available space, the field verified square footage.
(2) Occupancy for each of our retail properties is calculated as (a) square footage under executed leases as of December 31, 2016, divided by (b) net rentable square feet, expressed as a percentage.
(3) For the properties in our retail portfolio, annualized base rent, or ABR, is calculated by multiplying (a) base rental payments for executed leases as of December 31, 2016 (defined as cash base rents
before abatements) excluding tenant reimbursements for expenses paid by the landlord), by (b) 12. ABR per leased square foot is calculated by dividing (a) ABR, by (b) square footage under executed
leases as of December 31, 2016 . In the case of triple net or modified gross leases, ABR does not include tenant reimbursements for real estate taxes, insurance, common area or other operating
expenses. Excludes the square footage of land subject to ground leases.
(4) As of December 31, 2016, the Company occupied 8,995 square feet at this property at an ABR of $304,841, or $33.89 per leased square foot, which amounts are reflected in this table. The rent paid by us
is eliminated in accordance with GAAP.
(5) Includes $32,760 of ABR pursuant to a rooftop lease.
Property Anchor Tenant Location
Town
Center
Unencumbered
ABR Year Built
Core
Properties
Development
Properties
Net Rentable
Square Feet(1)
Core
Occupancy (2)
Development
Leased(2) ABR (3)
ABR per
Leased SF(3)
Retail Properties - Excluding Properties Subject to Ground Lease
249 Central Park Retail (4) Cheesecake Factory, Brooks Brothers,
Gordon Biersch
Virginia Beach, VA - 2004 91,366 - 91,366 89.8% - $2,376,820 $28.98
Alexander Pointe Harris Teeter Salisbury, NC 100% 1997 57,710 - 57,710 97.6% - 649,530 11.53
Bermuda Crossroads Food Lion, OfficeMax Chester, VA 100% 2001 111,566 - 111,566 93.1% - 1,519,843 14.63
Broad Creek Shopping Center Home Depot, Food Lion, PetSmart Norfolk, VA 100% 1997/2001 227,659 - 227,659 99.3% - 3,188,069 14.10
Broadmoor Plaza Kroger, Staples, Jo-Ann Fabrics South Bend, IN 100% 1980 115,059 - 115,059 93.2% - 1,267,990 11.82
Brooks Crossing Various Small Shops Newport News, VA 100% 2016 - 18,343 18,343 - 59.8% 151,380 13.80
Columbus Village Barnes & Noble Virginia Beach, VA - 1980/2013 66,594 - 66,594 93.5% - 1,200,454 19.27
Columbus Village II Regal Cinemas, BB&B Virginia Beach, VA 100% 1995/1996 92,061 - 92,061 100.0% - 1,575,991 17.12
Commerce Street Retail (5) Yard House Virginia Beach, VA 100% 2008 19,173 - 19,173 100.0% - 848,540 44.26
Courthouse 7-Eleven 7-Eleven Virginia Beach, VA 100% 2011 3,177 - 3,177 100.0% - 125,015 39.35
Dick's at Town Center Dick's Sporting Goods, USI Virginia Beach, VA 100% 2002 103,335 - 103,335 100.0% - 1,231,340 11.92
Dimmock Square Best Buy, Old Navy Colonial Heights, VA 100% 1998 106,166 - 106,166 97.2% - 1,736,216 16.83
Fountain Plaza Retail Ruth's Chris, Ann Taylor Virginia Beach, VA - 2004 35,961 - 35,961 100.0% - 1,022,629 28.44
Gainsborough Square Food Lion, Rite Aid Chesapeake, VA 100% 1999 88,862 - 88,862 90.7% - 1,220,121 15.14
Greentree Shopping Center Wawa Chesapeake, VA 100% 2014 15,751 - 15,751 85.7% - 285,941 21.17
Hanbury Village Walgreens, Starbucks Chesapeake, VA 32% 2006/2009 61,049 - 61,049 92.8% - 1,355,478 23.92
Harper Hill Commons Harris Teeter Winston-Salem, NC 100% 2004 55,394 - 55,394 65.9% - 518,400 14.19
Harrisonburg Regal Regal Cinemas Harrisonburg, VA - 1999 49,000 - 49,000 100.0% - 683,550 13.95
Lightfoot Marketplace Harris Teeter Williamsburg, VA - 2016 - 56,043 56,043 - 49.2% 601,665 21.80
North Hampton Market PetSmart, Hobby Lobby, Dollar Tree Taylors, SC 100% 2004 114,935 - 114,935 97.2% - 1,397,423 12.51
North Point Center Kroger, PetSmart, BB&B, Costco Durham, NC 52% 1998/2009 215,690 - 215,690 99.3% - 2,583,835 12.06
Oakland Marketplace Kroger Oakland, TN 100% 2004 19,600 - 19,600 85.7% - 252,280 15.02
Parkway Marketplace Rite Aid Virginia Beach, VA 100% 1998 37,804 - 37,804 95.2% - 716,852 19.91
Patterson Place BB&B, PetSmart Durham, NC 100% 2004 160,942 - 160,942 96.8% - 2,443,501 15.69
Perry Hall Marketplace Safeway Perry Hall, MD 100% 2001 74,256 - 74,256 100.0% - 1,243,444 16.75
Providence Plaza Edward Jones, Chipotle, Choate Const. Charlotte, NC 100% 2007/2008 103,118 - 103,118 97.4% - 2,564,010 25.52
Renaissance Square Harris Teeter Davidson, NC 2008 80,467 - 80,467 92.2% - 1,281,142 17.26
Sandbridge Commons Heartland Dental Virginia Beach, VA - 2015 16,129 - 16,129 100.0% - 327,710 20.32
Socastee Commons Bi-Lo Myrtle Beach, SC - 2000/2014 57,273 - 57,273 97.4% - 633,672 11.36
South Retail lululemon, free people Virginia Beach, VA - 2002 38,515 - 38,515 84.9% - 879,870 26.89
South Square Ross, Petco, Office Depot Durham, NC 100% 1977/2005 107,812 - 107,812 100.0% - 1,829,556 16.97
Southgate Square Burlington, PetSmart, Michaels Colonial Heights, VA - 1991/2016 220,131 - 220,131 96.3% - 2,812,549 13.27
Southshore Shops Buffalo Wild Wings Midlothian, VA 100% 2006 40,333 - 40,333 93.1% - 737,009 19.63
Stone House Square Weis Markets Hagerstown, MD 100% 2008 108,624 - 108,624 90.4% - 1,567,631 15.96
Studio 56 Retail McCormick & Schmick's Virginia Beach, VA 100% 2007 11,594 - 11,594 100.0% - 375,632 32.40
Waynesboro Commons Kroger Waynesboro, VA 100% 1993 52,415 - 52,415 100.0% - 438,464 8.37
Wendover Village BB&B, T.J. Maxx, Petco Greensboro, NC 100% 2004 135,758 - 135,758 100.0% - 1,955,629 14.41
Total / Weighted Avg Retail Portfolio 69% 2,895,279 74,386 2,969,665 95.8% 51.9% $45,599,181 $16.21
Net Rentable Square Feet (RSF)(1)
Property Anchor Tenant Location
Town
Center
Unencumbered
ABR Year Built
Core
Properties
Development
Properties Total
Core
Occupancy (2)
Development
Leased(2) ABR (3)
ABR per Leased
SF(3)
Office Properties
4525 Main Street Clark Nexsen, Anthropologie, West Elm Virginia Beach, VA - 2014 - 237,893 237,893 - 76.7% $5,096,663 $27.93
Armada Hoffler Tower(4) AHH, Troutman Sanders, Will iams Mullen Virginia Beach, VA 100% 2002 324,242 - 324,242 96.9% - 8,947,379 28.49
Commonwealth of VA - Chesapeake Commonwealth of VA Chesapeake, VA - 2015 36,227 - 36,227 100.0% - 645,927 17.83
Commonwealth of VA - Virginia Beach Commonwealth of VA Virginia Beach, VA 100% 2015 11,139 - 11,139 100.0% - 245,058 22.00
One Columbus BB&T, HBA Virginia Beach, VA 100% 1984 129,272 - 129,272 80.2% - 2,582,506 24.90
Two Columbus The Art Institute, Kimley-Horn Virginia Beach, VA 100% 2009 108,467 - 108,467 76.5% - 2,176,255 26.24
Total / Weighted Average Office Portfolio 71% 609,347 237,893 847,240 89.9% 76.7% $19,693,788 $26.96
Properties Subject to Ground Lease
Bermuda Crossroads (5) IHOP, O'Charley's Chester, VA - 2001 11,000 - 11,000 100.0% - $163,350 $14.85
Broad Creek Shopping Center (6) 7-Eleven, Ruby Tuesdays, Home Depot Norfolk, VA - 1997/2001 24,818 - 24,818 100.0% - 607,081 24.46
Greentree Shopping Center Wawa Chesapeake, VA - 2014 5,088 - 5,088 100.0% - 230,004 45.21
Hanbury Village(5) Harris Teeter, Walgreens Chesapeake, VA - 2006/2009 55,586 - 55,586 100.0% - 1,067,598 19.21
Harper Hill Commons (5) Harris Teeter Winston-Salem, NC 100% 2004 41,520 - 41,520 100.0% - 373,680 9.00
Lightfoot Marketplace(5) Harris Teeter Williamsburg, VA - 2016 - 51,750 51,750 - 100.0% 660,771 12.77
North Point Center(5) Home Depot, Costco Durham, NC 15% 1998/2009 280,556 - 280,556 100.0% - 1,083,666 3.86
Oakland Marketplace(5) Kroger Oakland, TN 100% 2004 45,000 - 45,000 100.0% - 186,300 4.14
Sandbridge Commons (5) Harris Teeter Virginia Beach, VA - 2015 53,288 - 53,288 100.0% - 583,000 10.94
South Square(5) Chick-fil-A Durham, NC 100% 1977/2005 1,778 - 1,778 100.0% - 60,000 33.75
Stone House Square(5) Capitol One Bank Hagerstown, MD 100% 2008 3,650 - 3,650 100.0% - 165,000 45.21
Tyre Neck Harris Teeter(6) Harris Teeter Portsmouth, VA 100% 2011 48,859 - 48,859 100.0% - 508,134 10.40
Total / Weighted Avg Retail Portfolio Subject to Ground Leases 26% 571,143 51,750 622,893 100.0% 100.0% $5,688,584 $9.13
Units
Multifamily Location
Town
Center
Unencumbered
ABR Year Built
Core
Properties
Development
Properties Total
Core
Occupancy (2)
Development
Occupancy(2) ABR (7)
ABR per
Occupied RSF(8)
Encore Apartments Virginia Beach, VA - 2014 286 - 286 94.4% - $4,130,448 $1.76
Johns Hopkins Village(9)(10) Baltimore, MD - 2016 - 157 157 - 76.4% 5,916,960 2.78
Liberty Apartments (9) Newport News, VA - 2013 197 - 197 91.2% - 2,263,236 1.42
Smith's Landing(10) Blacksburg, VA - 2009 284 - 284 98.9% - 3,653,952 1.14
The Cosmopolitan (9) Virginia Beach, VA - 2006 342 - 342 92.1% - 6,013,536 1.65
Total / Weighted Avg Multifamily Portfolio - 1,109 157 1,266 94.3% 76.4% $21,978,132 $1.70
15
Property Portfolio - Continued
As of 12/31/16
(1) The net rentable square footage for each of our office properties is the sum of (a) the square footage of existing leases, plus (b) for available space, management’s estimate of net rentable square footage based, in part,
on past leases. The net rentable square footage included in office leases is generally consistent with the Building Owners and Managers Association, or BOMA, 1996 measurement guidelines.
(2) Occupancy for each of our office properties is calculated as (a) square footage under executed leases as of December 31, 2016, divided by (b) net rentable square feet, expressed as a percentage. Occupancy for our
multifamily properties is calculated as (a) total units occupied as of December 31, 2016, divided by (b) total units available, expressed as a percentage.
(3) For the properties in our office portfolio, annualized base rent, or ABR, is calculated by multiplying (a) base rental payments for executed leases as of December 31, 2016 (defined as cash base rents (before
abatements) excluding tenant reimbursements for expenses paid by the landlord), by (b) 12. ABR per leased square foot is calculated by dividing (a) ABR, by (b) square footage under executed leases as of December
31, 2016. In the case of triple net or modified gross leases, ABR does not include tenant reimbursements for real estate taxes, insurance, common area or other operating expenses.
(4) As of December 31, 2016, the Company occupied 21,942 square feet at this property at an ABR of $688,788 or $30.48 per leased square foot, which amounts are reflected in this table. The rent paid by us is eliminated
in accordance with GAAP.
(5) Pursuant to this ground lease, the Company owns the land and the tenant owns the improvements thereon. The Company will succeed to the ownership of the improvements to the land upon the termination of the
ground lease.
(6) The Company leases the land underlying this property and re-leases it to our tenant under a ground lease pursuant to which our tenant owns the improvements on the land.
(7) For the properties in our multifamily portfolio, annualized base rent, or ABR, is calculated by multiplying (a) base rental payments for the month ended December 31, 2016 by (b) 12.
(8) ABR per occupied rentable square foot is calculated by dividing (a) ABR, by (b) net rentable square footage of occupied units as of December 31, 2016.
(9) The ABR for Liberty, Cosmopolitan, Johns Hopkins Village excludes $212,000, $970,000, $1,159,000 from ground floor retail leases, respectively.
(10) The Company leases the land underlying this property pursuant to a ground lease.
16
Development Pipeline
$ in thousands
Johns Hopkins Village
Lightfoot Marketplace
One City Center
Point Street Apts.
(1) Represents estimates that may change as the development process proceeds
(2) First full stabilized quarter
(3) AHH earns a preferred return on equity prior to any distributions to JV Partners
(4) Signed letter of intent
Q4 2016 Year to Date
Capitalized Interest $119 $1,046
Capitalized Overhead $559 $1,704
Schedule(1)
Development, Not Delivered
Property
Type Estimated(1) % Leased Start
Initial
Occupancy
Stabilized
Operation (2)
Estimated
Cost(1)
Cost to
Date
AHH
Ownership % Anchor Tenants & Other Notes
Harding Place
Charlotte, NC
Multifamily 225 Units NA 3Q16 3Q18 1Q20 $45,000 $8,000 80%(3) NA
Town Center Phase VI
Virginia Beach, VA
Mixed-use 39,000 SF
130 Units
46% 4Q16 3Q18 3Q19 42,000 3,000 100% Anchor tenants not yet announced
Brooks Crossing
Newport News, VA
Office 100,000 sf NA 3Q16 4Q18 4Q18 20,000 - 65%(3) Huntington Ingalls Industries (4)
Total Development, Not Delivered 107,000 11,000
Development, Delivered Not Stabilized
Brooks Crossing
Newport News, VA
Retail 18,000 sf 60% 3Q15 3Q16 4Q16 3,000 3,000 65%(3) Misc. small shops
4525 Main Street
Virginia Beach, VA
Office 239,000 sf 77% 1Q13 3Q14 2Q17 51,000 46,000 100% Clark Nexsen, Development Authority
of Virginia Beach, Anthropologie
Johns Hopkins Village
Baltimore, MD
Multifamily 157 units 76% 1Q15 3Q16 3Q17 68,000 67,000 80%(3) CVS
Lightfoot Marketplace
Will iamsburg, VA
Retail 109,000 sf 71% 3Q14 3Q16 2Q17 24,000 23,000 70%(3) Harris Teeter, CHKD
Total Development, Delivered Not Stabilized 146,000 139,000
Total $253,000 $150,000
Joint Ventures - Minority Partner Project Cost
Equity
Investment
One City Center - 37% JV
Durham, NC
Mixed-use 152,000 sf 36% 1Q16 2Q18 2Q19 $36,000 $10,000 100% Duke University
AHH Equity requirement $10M
Mezzanine Investments
Purchase
Option Price
Loan
Balance
Point Street Apartments
Baltimore, MD
Multifamily 289 units NA 1Q16 4Q17 1Q19 $92,000 $20,600 Option to purchase
88% upon completion
$23M Mezzanine financing by AHH,
earning 8% interest income
Annapolis Junction
Annapolis Junction, MD
Multifamily 416 units NA 2Q16 3Q17 2Q19 102,000 39,000 Option to purchase
88% upon completion
$42M Mezzanine financing by AHH,
earning 10% interest income
Total Mezzanine Investment $194,000 $59,600
17
Acquisitions & Dispositions
$ in thousands
(1) Contractual purchase price
(2) Value of OP Units/Stock at issuance
(3) Anchor tenant vacated 9/30/16, which would represent a 2.5% Cash Cap Rate
ACQUISITIONS
Properties Location Square Feet Purchase Price (1)
Reinvested
1031 Proceeds
$ Value of
OP Units/Stock (2)
Cash Cap
Rate Purchase Date
% Leased as of
12/31/16 Anchor Tenants
Renaissance Square Davidson, NC 80,468 $17,085 - - 7.1% 4Q16 92% Harris Teeter
Columbus Vill iage II Virginia Beach, VA 92,061 $26,200 - $26,200 5.6% 4Q16 100% Regal, Bed Bath & Beyond
Southshore Shops Midlothian, VA 40,333 $9,160 - $2,475 7.8% 3Q16 93% Buffalo Wild Wings
Southgate Square Colonial Heights, VA 220,131 $38,585 - $17,485 7.3% 2Q16 96% PetSmart, Michael's, Burlington
Retail Portfolio (11 properties) Mid-Atlantic 1,082,681 $170,500 $87,000 - 7.2% 1Q16 95% Harris Teeter, Bed Bath & Beyond
Providence Plaza Charlotte, NC 103,118 $26,200 $14,000 - 7.3% 3Q15 97% Chipotle
Socastee Commons Myrtle Beach, SC 57,573 $8,600 $3,600 - 7.3% 3Q15 97% BiLo
Columbus Village Virginia Beach, VA 65,746 $21,025 - $14,025 6.4% 3Q15 94% Barnes & Noble
Perry Hall Marketplace & Stone
House Square
Maryland 182,949 $39,555 $15,200 $4,155 7.4% 2Q15 98% Safeway & Weis Markets
Dimmock Square Colonial Heights, VA 106,166 $19,662 - $9,662 7.3% 3Q14 97% Old Navy, Best Buy, Pier 1
Total/Weighted Average 2,031,226 $376,572 $119,800 $74,002 7.1%
DISPOSITIONS
Properties Location
Square
Feet/Units Sale Price Cash Proceeds Gain on Sale
Cash Cap
Rate Disposition Date
% Leased at
closing Anchor Tenants
Greentree Wawa Chesapeake, VA 5,088 $4,600 $4,400 $3,396 5.0% 1Q17 100% Wawa
Oyster Point Newport News, VA 100,139 $6,500 - $3,793 16.4% (3) 3Q16 82% GSA
Non-Core Retail Portfolio Various 174,758 $12,850 $12,600 ($27) 7.1% 2Q16 - 3Q16 ~85% Kroger, Family Dollar
Richmond Tower Richmond, VA 206,969 $78,000 $77,000 $26,674 7.9% 1Q16 99% Williams Mullen
Oceaneering Chesapeake, VA 154,000 $30,000 $10,000 $4,987 6.7% 4Q15 100% Oceaneering International
Whetstone Apartments Durham, NC 203 units $35,625 $17,600 $7,210 5.7% 2Q15 26% NA
Sentara Williamsburg Williamsburg, VA 49,200 $15,450 $15,200 $6,197 6.3% 1Q15 100% Sentara
Virginia Natural Gas Virginia Beach, VA 31,000 $8,900 $7,400 $2,211 6.3% 4Q14 100% Virginia Natural Gas
Total/Weighted Average 721,154sf/
203 units
$191,925 $144,200 $54,441 7.3%
18
Construction Business Summary
$ in thousands
Gross Profit Summary
Q4 2016
Trailing 12
Months
Revenue $50,475 $159,030
Expense (49,039) (153,375)
Gross Profit $1,436 $5,655
(Unaudited)
Location
Total Contract
Value
Work in Place as
of 12/31/2016 Backlog
Estimated Date
of Completion
Highlighted Projects
Four Seasons Condominium Expansion Baltimore, MD 72,385 50,146 22,239 2Q 2017
Point Street Apartments Baltimore, MD 72,100 23,392 48,708 1Q 2018
Annapolis Junction Annapolis Junction, MD 68,300 18,083 50,217 1Q 2018
Durham City Center Durham, NC 62,463 15,861 46,602 2Q 2018
27th Street Hotel Virginia Beach, VA 44,367 36,568 7,799 2Q 2017
Dinwiddie Dinwiddie, VA 24,042 1,000 23,042 2Q 2019
Sub Total $343,657 $145,050 $198,607
All Other Projects 322,623 303,512 19,111
Total $666,280 $448,562 $217,718
(1) See page 30 for Same Store vs. Non – Same Store Properties
19
Same Store NOI by Segment
$ in thousands
(Reconciliation to GAAP located in appendix pg. 31)
Three months ended Year ended
12/31/2016 12/31/2015 $ Change % Change 12/31/2016 12/31/2015 $ Change % Change
Office(1) (Unaudited) (Unaudited)
Revenue $3,805 $3,896 ($91) -2.3% $15,476 $15,565 ($89) -0.6%
Expenses 1,328 1,417 (89) -6.3% 5,430 5,709 (279) -4.9%
Net Operating Income 2,477 2,479 (2) -0.1% 10,046 9,856 190 1.9%
Retail(1)
Revenue 9,380 9,348 32 0.3% 26,316 25,984 332 1.3%
Expenses 2,526 2,540 (14) -0.6% 7,579 7,485 94 1.3%
Net Operating Income 6,854 6,808 46 0.7% 18,737 18,499 238 1.3%
Multifamily(1)
Revenue 4,840 4,735 105 2.2% 12,221 12,158 63 0.5%
Expenses 2,069 2,073 (4) -0.2% 5,325 5,249 76 1.4%
Net Operating Income 2,771 2,662 109 4.1% 6,896 6,909 (13) -0.2%
Same Store Net Operating Income (NOI) $12,102 $11,949 $153 1.3% $35,679 $35,264 $415 1.2%
Net effect of straight-line rents 125 63 62 539 338 201
Amortization of lease incentives and above (below) market rents 117 118 (1) 516 514 2
Same store portfolio NOI, cash basis $12,344 $12,130 $214 1.8% $36,734 $36,116 $618 1.7%
NOI, Cash Basis:
Office $2,611 $2,500 $111 4.4% $10,130 $9,846 $284 2.9%
Retail 6,955 6,957 (2) 0.0% 19,659 19,257 402 2.1%
Multifamily 2,778 2,673 105 3.9% 6,945 7,013 (68) -1.0%
$12,344 $12,130 $214 1.8% $36,734 $36,116 $618 1.7%
NOI:
Office $2,477 $2,479 ($2) -0.1% $10,046 $9,856 $190 1.9%
Retail 6,854 6,808 46 0.7% 18,737 18,499 238 1.3%
Multifamily 2,771 2,662 109 4.1% 6,896 6,909 (13) -0.2%
$12,102 $11,949 $153 1.3% $35,679 $35,264 $415 1.2%
20
Top 10 Tenants - Annualized Base Rent
$ in thousands
As of December 31, 2016
Office Portfolio
Tenant
Number
of Leases
Lease
Expiration
Annualized
Base Rent
% of Office Portfolio
Annualized Base Rent
% of Total Portfolio
Annualized Base Rent
Clark Nexsen 1 2029 $ 2,487 12.6% 2.7%
Williams Mullen 1 2018 1,524 7.7% 1.6%
Hampton University 2 2024 1,023 5.2% 1.1%
Commonwealth of Virginia 2 2030 891 4.5% 1.0%
Kimley-Horn 1 2027 859 4.4% 0.9%
Pender & Coward 1 2030 839 4.3% 0.9%
Troutman Sanders 2 2025 822 4.2% 0.9%
The Art Institute 3 2019 819 4.2% 0.9%
City of Va Beach Development Authority 1 2024 701 3.6% 0.8%
Cherry Bekaert 1 2022 698 3.5% 0.8%
Top 10 Total $ 10,663 54.2% 11.6%
Retail Portfolio
Tenant
Number
of Leases
Lease
Expiration
Annualized
Base Rent
% of Retail Portfolio
Annualized Base Rent
% of Total Portfolio
Annualized Base Rent
Kroger/Harris Teeter 11 2027 $ 5,923 11.5% 6.4%
Home Depot 2 2019 2,190 4.3% 2.4%
Bed, Bath, & Beyond 4 2022 1,669 3.3% 1.8%
Regal Cinemas 2 2018 1,607 3.1% 1.7%
PetSmart 5 2020 1,398 2.7% 1.5%
Food Lion 3 2020 1,283 2.5% 1.4%
Dick's Sporting Goods 1 2020 840 1.6% 0.9%
Safeway 2 2021 821 1.6% 0.9%
Weis Markets 1 2028 802 1.6% 0.9%
Ross Dress for Less 2 2020 755 1.5% 0.8%
Top 10 Total $ 17,288 33.7% 18.7%
21
Office Lease Summary
21
Renewal Lease Summary GAAP Cash
Quarter
Number of
Leases
Signed
Net rentable
SF Signed
Leases
Expiring
Net rentable
SF Expiring
Contractual
Rent per SF
Prior Rent
per SF
Releasing
Spread
Contractual
Rent per SF
Prior Rent
per SF
Releasing
Spread
Weighted
Average Lease
Term (yrs) TI & LC
TI & LC
per SF
Q4 2016 1 22,950 1 777 $30.66 $26.58 15.3% $28.00 $29.75 -5.9% 10.00 $569,907 $24.83
Q3 2016 - - - - - - 0.0% - - 0.0% - - -
Q2 2016 1 2,318 2 3,870 33.27 26.53 25.4% 30.00 28.41 5.6% 10.00 - -
Q1 2016 2 6,445 - - 21.34 19.60 8.9% 21.10 20.38 3.5% 1.65 3,773 0.59
New Lease Summary (1)
Quarter
Number of
Leases
Signed
Net rentable
SF Signed
Cash
Contractual
Rent per SF
Weighted
Average Lease
Term (yrs) TI & LC
TI & LC
per SF
Q4 2016 - - - - - -
Q3 2016 1 2,153 25.00 3.08 11,810 5.49
Q2 2016 1 1,806 25.00 5.00 63,579 35.20
Q1 2016 2 3,773 27.49 6.91 139,067 36.86
(1) Excludes new leases from properties in development
22
Office Lease Expirations
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
-
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
Leased Square Feet % ABR of Office Portfolio
Year of Lease Expiration
Number of
Leases
Expiring
Square Footage
of Leases
Expiring (1)
% Portfolio
Net Rentable
Square Feet
Annualized
Base Rent
% of Portfolio
Annualized
Base Rent
Annualized Base
Rent per Leased
Square Foot
Available - 116,693 13.8% -$ -$ -$
2017 8 14,159 1.7% 437,004 2.2% 30.86
2018 16 137,023 16.2% 3,920,009 19.9% 28.61
2019 14 90,120 10.6% 2,259,108 11.5% 25.07
2020 3 17,840 2.1% 524,457 2.7% 29.40
2021 6 44,933 5.3% 1,186,952 6.0% 26.42
2022 3 48,117 5.7% 1,347,805 6.8% 28.01
2023 4 43,078 5.1% 1,087,325 5.5% 25.24
2024 3 60,751 7.2% 1,706,129 8.7% 28.08
2025 4 43,292 5.1% 1,218,282 6.2% 28.14
2026 3 15,168 1.8% 328,333 1.7% 21.65
2027 3 49,072 5.8% 1,395,219 7.1% 28.43
Thereafter 8 166,994 19.6% 4,283,165 21.7% 25.65
Total / Weighted Average 75 847,240 100.0% 19,693,788$ 100.0% $26.96
(1) Includes new leases from properties in development
23
Retail Lease Summary
(1) Excludes new leases from properties in development
Renewal Lease Summary GAAP Cash
Quarter
Number of
Leases
Signed
Net rentable
SF Signed
Leases
Expiring
Net rentable SF
Expiring
Contractual
Rent per SF
Prior Rent
per SF
Releasing
Spread
Contractual
Rent per SF
Prior Rent
per SF
Releasing
Spread
Weighted
Average Lease
Term (yrs) TI & LC
TI & LC
per SF
Q4 2016 8 57,227 8 23,035 $16.81 $17.07 -1.5% $16.25 $17.13 -5.1% 6.50 $443,344 7.75$
Q3 2016 14 80,526 10 22,340 16.84 15.69 7.3% 16.36 15.80 3.5% 7.00 503,893 6.26
Q2 2016 25 98,300 14 33,111 18.28 17.32 5.5% 17.99 17.55 2.5% 6.36 234,929 2.39
Q1 2016 10 26,870 1 1,800 22.70 21.29 6.6% 22.21 21.78 1.9% 3.37 61,290 2.28
New Lease Summary(1)
Quarter
Number of
Leases
Signed
Net rentable
SF Signed
Cash
Contractual
Rent per SF
Weighted
Average Lease
Term (yrs) TI & LC
TI & LC
per SF
Q4 2016 6 21,078 $13.25 8.39 $365,657 $17.35
Q3 2016 3 14,341 14.03 6.52 262,134 18.28
Q2 2016 4 5,560 21.24 7.31 162,432 29.21
Q1 2016 4 11,913 19.68 5.10 431,103 36.19
24
Retail Lease Expirations
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
-
100,000
200,000
300,000
400,000
500,000
600,000
Leased Square Feet % ABR of Retail Portfolio
Year of Lease Expiration
Number of
Leases
Expiring
Square Footage
of Leases
Expiring (1)
% Portfolio
Net Rentable
Square Feet
Annualized
Base Rent
% of Portfolio
Annualized
Base Rent
Annualized Base
Rent per Leased
Square Foot
Available - 156,929 4.4% -$ -$ -$
M-T-M 5 7,342 0.2% 118,656 0.2% 16.16
2017 45 224,974 6.3% 3,645,108 7.1% 16.20
2018 73 331,094 9.2% 5,371,571 10.5% 16.22
2019 80 559,851 15.6% 8,515,948 16.6% 15.21
2020 60 507,658 14.1% 7,073,303 13.8% 13.93
2021 52 268,455 7.5% 4,965,436 9.7% 18.50
2022 27 262,149 7.3% 3,798,078 7.4% 14.49
2023 14 246,153 6.9% 3,077,764 6.0% 12.50
2024 16 165,318 4.6% 2,596,382 5.1% 15.71
2025 15 223,613 6.2% 2,259,666 4.4% 10.11
2026 19 154,386 4.3% 2,649,185 5.2% 17.16
2027 9 75,346 2.1% 1,732,069 3.4% 22.99
Thereafter 16 409,290 11.3% 5,484,599 10.6% 13.40
Total / Weighted Average 431 3,592,558 100.0% 51,287,765$ 100.0% $14.93
(1) Includes new leases from properties in development
25
Net Asset Value Component Data
In thousands
(1) Includes leases for space occupied by Armada Hoffler which are eliminated for GAAP purposes
Stabilized Portfolio NOI (Cash) Taxable REIT Subsidiary (TRS)
Three months
ended Annualized Trailing 12 Months
12/31/2016 12/31/2016 12/31/2016
Diversified Portfolio General contracting and real estate services $5,655
Office $232 $928
Retail 8,963 35,852 Other Assets
Multifamily 993 3,972 Other Assets As of 12/31/2016
Total Diversified Portfolio NOI $10,188 $40,752 Cash and Cash Equivalents $21,942
Restricted Cash 3,251
Virginia Beach Town Center Accounts Receivable 15,052
Office(1) $2,566 $10,264 Notes Receivable 59,546
Retail (1) 2,026 8,104 Construction receivables, including retentions 39,433
Multifamily 1,786 7,144 Equity method investments (Durham City Center JV) 10,235
Total Virginia Beach Town Center NOI $6,378 $25,512 Other Assets 64,275
Total Other Assets $213,734
Timing of mid-quarter transaction
Acquisition $208 $832 Liabilities & Share Count
Disposition - - As of 12/31/2016
Total timing Mid-Quarter transaction $208 $832 Liabilities
Mortgages and notes payable $522,180
Stabilized Portfolio NOI - Cash Basis $16,774 $66,264 Accounts payable and accrued liabilities 10,804
Construction payables, including retentions 51,130
Development Pipeline Other Liabilities 49,376
12/31/2016 Total Liabilities $633,490
Income producing property $132,000
Construction in progress 12,000 Three months ended
Other assets 6,000 Share Count 12/31/2016
Total cost to date (p. 16) $150,000 Weighted average common shares outstanding 36,465
Weighted average operating partnership ("OP") Units Outstanding 17,793
Land held for development 680 Total weighted average common shares and OP units outstanding 54,258
Appendix – Definitions
& Reconciliations
27
Definitions
Net Operating Income:
We calculate Net Operating Income (“NOI”) as property revenues (base rent, expense reimbursements and other revenue)
less property expenses (rental expenses and real estate taxes). Other REITs may use different methodologies for
calculating NOI, and accordingly, our NOI may not be comparable to such other REITs’ NOI. NOI is not a measure of
operating income or cash flows from operating activities as measured by GAAP and is not indicative of cash available to
fund cash needs. As a result, NOI should not be considered an alternative to cash flows as a measure of liquidity. We
consider NOI to be an appropriate supplemental measure to net income because it assists both investors and
management in understanding the core operations of our real estate business.
To calculate NOI on a cash basis, we adjust NOI to exclude the net effects of straight-line rent and the amortization of
lease incentives and above/below market rents.
Funds From Operations:
We calculate Funds From Operations (“FFO”) in accordance with the standards established by the National Association of
Real Estate Investment Trusts (“NAREIT”). NAREIT defines FFO as net income (loss) (calculated in accordance with
accounting principles generally accepted in the United States (“GAAP”)), excluding gains (or losses) from sales of
depreciable operating property, real estate related depreciation and amortization (excluding amortization of deferred
financing costs) and after adjustments for unconsolidated partnerships and joint ventures.
FFO is a supplemental non-GAAP financial measure. Management uses FFO as a supplemental performance measure
because it believes that FFO is beneficial to investors as a starting point in measuring our operational performance.
Specifically, in excluding real estate related depreciation and amortization and gains and losses from property dispositions,
which do not relate to or are not indicative of operating performance, FFO provides a performance measure that, when
compared period-over-period, captures trends in occupancy rates, rental rates and operating costs. Other equity REITs
may not calculate FFO in accordance with the NAREIT definition as we do, and, accordingly, our FFO may not be
comparable to such other REITs’ FFO.
28
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 acquisition, development and other pursuit costs, gains or losses from the early
extinguishment of debt, impairment charges, mark-to-market adjustments on interest rate derivatives and other non-
comparable items.
Management believes that the computation of FFO in accordance to NAREIT’s definition includes certain items that are not
indicative of the results provided by the Company’s operating portfolio and affect the comparability of the Company’s
period-over-period performance. Our calculation of Normalized FFO differs from NAREIT's definition of FFO. Other equity
REITs may not calculate Normalized FFO in the same manner as us, and, accordingly, our Normalized FFO may not be
comparable to other REITs' Normalized FFO.
Adjusted Funds From Operations:
We calculate Adjusted Funds From Operations (“AFFO”) as Normalized FFO adjusted for the impact of non-cash stock
compensation, tenant improvement, leasing commission and leasing incentive costs associated with second generation
rental space, capital expenditures, non-cash interest expense, straight-line rents, the amortization of leasing incentives and
above (below) market rents and proceeds from government development grants.
Management believes that AFFO provides useful supplemental information to investors regarding our operating
performance as it provides a consistent comparison of our operating performance across time periods and allows investors
to more easily compare our operating results with other REITs. However, other REITs may use different methodologies for
calculating AFFO or similarly entitled FFO measures and, accordingly, our AFFO may not always be comparable to AFFO
or other similarly entitled FFO measures of other REITs.
Definitions
Adjusted EBITDA:
We calculate Adjusted EBITDA as net income (loss) (calculated in accordance with GAAP), excluding interest expense,
income taxes, depreciation and amortization, gains (or losses) from sales of depreciable operating property and mark-to-
market adjustments on interest rate derivates. Management believes Adjusted EBITDA is useful to investors in evaluating
and facilitating comparisons of our operating performance between periods and between REITs by removing the impact of
our capital structure (primarily interest expense) and asset base (primarily depreciation and amortization) from our
operating results along with other non-comparable items.
Core EBITDA:
We calculate Core EBITDA as EBITDA, excluding certain items, including, but not limited to, debt extinguishment losses,
mark-to-market adjustments on interest rate derivatives, non-cash stock compensation and the impact of development
pipeline projects that are still in lease-up. We generally consider a property to be in lease-up until the earlier of (i) the
quarter after which the property reaches 80% occupancy or (ii) the thirteenth quarter after the property receives its
certificate of occupancy. Management believes that Core EBITDA provides useful supplemental information to investors
regarding our ongoing operating performance as it provides a consistent comparison of our operating performance across
time periods and allows investors to more easily compare our operating results with other REITs. However, other REITs
may use different methodologies for calculating Core EBITDA or similarly entitled measures and, accordingly, our Core
EBITDA may not always be comparable to Core EBITDA or other similarly entitled measures of other REITs.
Core Debt:
We calculate Core Debt as our total debt, excluding loans associated with our development pipeline, cash & cash
equivalents, and restricted cash.
Same Store Portfolio:
We define same store properties as those that we owned and operated for the entirety of the comparative periods
presented. We generally consider a property to be in lease-up until the earlier of (i) the quarter after which the property
reaches 80% occupancy or (ii) the thirteenth quarter after the property receives its certificate of occupancy. The following
table shows the properties included in the same store and non-same store portfolio for the comparative periods presented.
29
30
Same Store vs. Non-Same Store
Same
Store
Non-Same
Store
Same
Store
Non-Same
Store
Same
Store
Non-Same
Store
Same
Store
Non-Same
Store
Retail Properties Retail Properties (Continued)
249 Central Park Retail X X Socastee Commons X X
Alexander Pointe X X South Retail X X
Bermuda Crossroads X X South Square X X
Broad Creek Shopping Center X X Southgate Square X X
Brooks Crossing (Retail) X X Southshore Shops X X
Broadmoor Plaza X X Stone House Square X X
Columbus Village X X Studio 56 Retail X X
Columbus Village II X X Tyre Neck Harris Teeter X X
Commerce Street Retail X X Waynesboro Commons X X
Courthouse 7-Eleven X X Wendover Village X X
Dick’s at Town Center X X Willowbrook Commons X X
Dimmock Square X X Office Properties
Greentree Shopping Center X X 4525 Main Street X X
Fountain Plaza Retail X X Armada Hoffler Tower X X
Gainsborough Square X X Commonwealth of VA - Chesapeake X X
Hanbury Village X X Commonwealth of VA - Virginia Beach X X
Harper Hill Commons X X Oceaneering X X
Harrisonburg Regal X X One Columbus X X
Kroger Junction X X Oyster Point X X
North Hampton Market X X Richmond Tower X X
North Point Center X X Sentara Williamsburg X X
Oakland Marketplace X X Two Columbus X X
Parkway Marketplace X X Multifamily Properties
Patterson Place X X Encore Apartments X X
Perry Hall Marketplace X X Liberty Apartments X X
Providence Plaza X X Smith’s Landing X X
Renaissance Square X X The Cosmopolitan X X
Sandbridge Commons X X Johns Hopkins Village X X
Year Ended
12/31/2016 to 2015
Three Months Ended
12/31/2016 to 2015
Three Months Ended
12/31/2016 to 2015
Year Ended
12/31/2016 to 2015
31
Reconciliation to Property Portfolio NOI
$ in thousands
Three months ended 12/31 Year ended 12/31
2016 2015 2016 2015
Office Same Store(1)
Rental revenues $3,805 $3,896 $15,476 $15,565
Property expenses 1,328 1,417 $5,430 5,709
NOI 2,477 2,479 $10,046 9,856
Non-Same Store NOI 652 2,764 $3,323 11,790
Segment NOI 3,129 $5,243 $13,369 $21,646
Retail Same Store(1)
Rental revenues $9,380 $9,348 $26,316 $25,984
Property expenses 2,526 2,540 $7,579 7,485
NOI 6,854 6,808 $18,737 18,499
Non-Same Store NOI 4,434 - $23,263 4,722
Segment NOI $11,288 $6,808 $42,000 $23,221
Multifamily Same Store(1)
Rental revenues $4,840 $4,735 $12,221 $12,158
Property expenses 2,069 2,073 $5,325 5,249
NOI 2,771 2,662 $6,896 6,909
Non-Same Store NOI 1,116 - $5,557 2,410
Segment NOI 3,887 2,662 $12,453 $9,319
Total Property Portfolio NOI $18,304 $14,713 $67,822 $54,186
(1) See page 30 for the Same Store vs. Non-Same Store properties
32
Reconciliation to Property NOI
$ in thousands
Three months ended 12/31/2016
Diversified Portfolio Office Retail Multifamily Total
NOI - Cash Basis $232 $8,963 $993 $10,188
Net effect of straight-line rents 21 102 2 125
Amortization of lease incentives and (above) below market rents - 195 (13) 182
NOI $253 $9,260 $982 $10,495
Town Center of Virginia Beach Office Retail Multifamily Total
NOI - Cash Basis $2,566 $2,026 $1,786 $6,378
Net effect of straight-line rents (128) (4) 4 (128)
Amortization of lease incentives and (above) below market rents (26) (51) - (77)
Elimination of AHH rent (187) (81) - (268)
NOI $2,225 $1,890 $1,790 $5,905
NOI Office Retail Multifamily Total
Diversified Portfolio $253 $9,260 $982 $10,495
Town Center of Virginia Beach 2,225 1,890 1,790 5,905
Unstabilized Properties 651 138 1,115 1,904
Total Property Portfolio NOI $3,129 $11,288 $3,887 $18,304
33
Reconciliation to GAAP Net Income
$ in thousands
Office Retail Multifamily
Total Property
Portfolio
General Contracting &
Real Estate Services Total
Segment revenues 4,832$ 15,026$ 6,658$ 26,516$ 50,475$ 76,991$
Segment expenses 1,703 3,738 2,771 8,212 49,039 57,251
Net operating income 3,129$ 11,288$ 3,887$ 18,304$ 1,436$ 19,740$
Depreciation and amortization (9,692)
General and administrative expenses (2,688)
Acquisition, development and other pursuit costs (77)
Impairment charges (171)
Interest income 1,300
Interest expense (4,573)
Loss on extinguishment of debt -
Gain on real estate dispositions 93
Change in fair value of interest rate derivatives 1,323
Other income (7)
Income tax provision (103)
Net income 5,145$
Office Retail Multifamily
Total Rental
Properties
General Contracting &
Real Estate Services Total
Segment revenues 20,929$ 56,511$ 21,915$ 99,355$ 159,030$ 258,385$
Segment expenses 7,560 14,511 9,462 31,533 153,375 184,908
Net operating income 13,369$ 42,000$ 12,453$ 67,822$ 5,655$ 73,477$
Depreciation and amortization (35,328)
General and administrative expenses (9,552)
Acquisition, development and other pursuit costs (1,563)
Impairment charges (355)
Interest income 3,228
Interest expense (16,466)
Loss on extinguishment of debt (82)
Gain on real estate dispositions 30,533
Change in fair value of interest rate derivatives (941)
Other income 147
Income tax provision (343)
Net income 42,755$
Three months ended 12/31/2016
Year ended 12/31/2016
{ }2017GUIDANCE
JOHNS HOPKINS VILLAGE • NINE EAST 33RD • BALTIMORE, MD
PAGE 2
NYSE : AHH
FORWARD LOOKING STATEMENTS
This Supplemental Information should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31,
2016, and the unaudited condensed consolidated financial statements appearing in our press release dated February 9, 2017, which
has been furnished as Exhibit 99.1 to our Form 8-K filed on February 9, 2017. The Company makes statements in this Supplemental
Information that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (set forth
in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of
1934, as amended (the “Exchange Act”)). In particular, statements pertaining to our capital resources, portfolio performance and
results of operations contain forward-looking statements. Likewise, all of our statements regarding anticipated growth in our funds
from operations, normalized funds from operations, adjusted funds from operations, funds available for distribution and net operating
income are forward-looking statements. You can identify forward-looking statements by the use of forward-looking terminology such
as “believes,” “expects,” “may,” “will,” “should,” “seeks,” “intends,” “plans,” “estimates” or “anticipates” or the negative of these
words and phrases or similar words or phrases which are predictions of or indicate future events or trends and which do not relate solely
to historical matters. You can also identify forward-looking statements by discussions of strategy, plans or intentions.
Forward-looking statements involve numerous risks and uncertainties and you should not rely on them as predictions of future events.
Forward-looking statements depend on assumptions, estimates, data or methods, which may be incorrect or imprecise, and actual
results may vary materially from those anticipated, estimated or projected. The Company does not guarantee that the transactions
and events described will happen as described (or that they will happen at all). For further discussion of risk factors and other events
that could impact our future results, please refer to the section entitled “Risk Factors” in our most recent Annual Report on Form 10-K
filed with the Securities and Exchange Commission (the “SEC”), and the documents subsequently filed by us from time to time with the
SEC.
The Company 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.
PROJECTS DELIVERED SINCE IPO
PAGE 3
NYSE : AHH
TOTAL
INVESTMENT
$261M
TOTAL
ESTIMATED
VALUE
~ $313M
IPO-2016 DELIVERED
PROJECT NAME
4525 MAIN STREET
VIRGINIA BEACH, VA
ENCORE APARTMENTS
VIRGINIA BEACH, VA
WHETSTONE APARTMENTS (1)
DURHAM, NC
GREENTREE
CHESAPEAKE, VA
OCEANEERING (1)
CHESAPEAKE, VA
COMMONWEALTH OF VIRGINIA
CHESAPEAKE, VA
COMMONWEALTH OF VIRGINIA
VIRGINIA BEACH, VA
SANDBRIDGE COMMONS
VIRGINIA BEACH, VA
LIGHTFOOT MARKETPLACE
WILLIAMSBURG, VA
BROOKS CROSSING
NEWPORT NEWS, VA
JOHNS HOPKINS VILLAGE
BALTIMORE, MD
TOTAL INVESTMENT
TOTAL ESTIMATED VALUE
PRODUCT TYPE
OFFICE
MULTIFAMILY
MULTIFAMILY
RETAIL
OFFICE
OFFICE
OFFICE
RETAIL
RETAIL
RETAIL
MULTIFAMILY
SF OR UNITS
239,000 SF
286 UNITS
203 UNITS
18,000 SF
155,000 SF
36,000 SF
11,000 SF
70,000 SF
109,000 SF
18,000 SF
157 UNITS
656,000 SF/
646 UNITS
DELIVERY
3Q14
3Q14
3Q14
4Q14
1Q15
1Q15
1Q15
1Q15
3Q16
3Q16
3Q16
INVESTMENT
$51M
$32M
$29M
$6M
$25M
$7M
$3M
$13M
$24M
$3M
$68M
$261M
~ $52M
~ $313M
MANAGEMENT ESTIMATED VALUE CREATION AT 20%
(1) Realized value of disposed properties created from the wholesale to retail spread.
ESTIMATED VALUE CREATION
OF ~ $52M
PROJECTS UNDER DEVELOPMENT
PAGE 4
NYSE : AHH
TOTAL
ESTIMATED
INVESTMENT
~ $435M
TOTAL
ESTIMATED
VALUE
~ $522M
2017-2019
PIPELINE
ESTIMATED VALUE CREATION
OF ~ $87M
MANAGEMENT ESTIMATED VALUE CREATION AT 20%
PRODUCT TYPE
MULTIFAMILY
MULTIFAMILY
MIXED-USE
MIXED-USE
MULTIFAMILY
OFFICE
DELIVERY(1)
3Q17
4Q17
2Q18
3Q18
3Q18
4Q18
ESTIMATED
INVESTMENT(1)
$102M
$92M
$36M
$42M
$45M
$20M
$98M
~ $435M
~ $87M
~ $522M
(1) Timing and investment amounts are estimates and are subject to change as the development process demands.
PROJECT NAME
ANNAPOLIS JUNCTION
ANNAPOLIS JUNCTION, MD
POINT STREET APARTMENTS
BALTIMORE, MD
ONE CITY CENTER
DURHAM, NC
TOWN CENTER PHASE VI
VIRGINIA BEACH, VA
HARDING PLACE
CHARLOTTE, NC
BROOKS CROSSING
NEWPORT NEWS, VA
PRE-DEVELOPMENT PROJECTS
TOTAL ESTIMATED INVESTMENT
TOTAL ESTIMATED VALUE
TOTAL ESTIMATED VALUE CREATION
PAGE 5
NYSE : AHH
2014
2015
2016
2018-2019(1)
TOTAL INVESTMENT
MANAGEMENT ESTIMATED
VALUE CREATION AT 20%
TOTAL ESTIMATED VALUE
$118M
$48M
$95M
$435M(1)
$696M
YEAR DELIVERED INVESTMENT
~ $139M
~ $835M
(1) Timing and investment amounts are estimates and are subject to change as the development process demands.
TOTAL
INVESTMENT
$696M
ESTIMATED VALUE CREATION
~ $139M
TOTAL
ESTIMATED
VALUE
~ $835M
PORTFOLIO GROWTH SINCE IPO
PAGE 6
NYSE : AHH
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
$80,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
$800,000
$900,000
$1,000,000
IPO 3Q2013 4Q2013 1Q2014 2Q2014 3Q2014 4Q2014 1Q2015 2Q2015 3Q2015 4Q2015 1Q2016 2Q2016 3Q2016 4Q2016
Re
nt
a
l P
ro
p
e
rt
y
N
O
I (
A
nn
ua
liz
e
d
)
Re
a
l E
st
a
te
In
v
e
st
m
e
nt
a
t
C
o
st
Real Estate Investment Delivered Development Rental Property NOI (Annualized)
Following IPO no development
projects were delivered until 3Q14
Projected NOI increase partially corresponds
to the delivery of development properties
NOI projected to increase as the development
projects are delivered between 2017 - 2019
$ in thousands
2017 OUTLOOK & ASSUMPTIONS
PAGE 7
NYSE : AHH
2017 OUTLOOK
TOTAL NOI
CONSTRUCTION SEGMENT GROSS PROFIT
G&A EXPENSES
INTEREST INCOME
INTEREST EXPENSE
NORMALIZED FFO PER DILUTED SHARE
LOW
$73.8 M
$5.0 M
$10.2 M
$5.7 M
$17.9 M
$0.99
GUIDANCE ASSUMPTIONS
HIGH
$74.5 M
$5.5 M
$10.5 M
$5.9 M
$18.5 M
$1.03
Disposition of a single tenant asset during the first quarter with the proceeds being used for balance sheet purposes.
•
Raising 40 million dollars through the ATM program, or 10 million dollars per quarter, for a full year weighted average share count of 56.8 million.
•
Interest expense is calculated based on the Forward LIBOR Curve, which forecasts rates rising to 1.25% by year end.
•
Maintaining core debt to core EBITDA in the mid 6x range.
•
No acquisitions in 2017.
AHH
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