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 6, 2018
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 6, 2018, Armada Hoffler Properties, Inc. (the “Company”) issued a press release announcing its financial position as of December 31, 2017, results of operations for the three and twelve months ended December 31, 2017 and other related information. Also on February 6, 2018, 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, 2017. 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 6, 2018, the Company made available a presentation regarding its 2018 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 | ||
99.2 | ||
99.3 | ||
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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 6, 2018 | /s/ MICHAEL P. O’HARA | |
Michael P. O’Hara | ||
Chief Financial Officer and Treasurer | ||
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Exhibit 99.1
 | PRESS RELEASE | |
ARMADA HOFFLER PROPERTIES REPORTS FOURTH QUARTER AND FULL YEAR 2017 RESULTS
Net Income of $0.09 per Diluted Share for the Fourth Quarter
and $0.50 per Diluted Share for the Full Year
Normalized FFO of $0.23 per Diluted Share for the Fourth Quarter
and $0.99 per Diluted Share for the Full Year
Company Introduces 2018 Full-Year Normalized FFO Guidance of $1.00 to $1.05 per Diluted Share
VIRGINIA BEACH, VA, February 6, 2018 – Armada Hoffler Properties, Inc. (NYSE: AHH) today announced its results for the quarter and year ended December 31, 2017 and provided an update on current events.
Highlights include:
• | Net income of $5.8 million, or $0.09 per diluted share, for the quarter ended December 31, 2017 compared to net income of $5.1 million, or $0.09 per diluted share, for the quarter ended December 31, 2016. Net income of $29.9 million, or $0.50 per diluted share, for the year ended December 31, 2017 compared to net income of $42.8 million, or $0.85 per diluted share, for the year ended December 31, 2016. |
• | Normalized Funds From Operations (“FFO”) of $14.5 million, or $0.23 per diluted share, for the quarter ended December 31, 2017 compared to Normalized FFO of $13.7 million, or $0.25 per diluted share, for the quarter ended December 31, 2016. Normalized FFO of $59.3 million, or $0.99 per diluted share, for the year ended December 31, 2017 compared to Normalized FFO of $50.9 million, or $1.01 per diluted share, for the year ended December 31, 2016. |
• | FFO of $15.1 million, or $0.24 per diluted share, for the quarter ended December 31, 2017 compared to FFO of $14.7 million, or $0.27 per diluted share, for the quarter ended December 31, 2016. FFO of $59.7 million, or $0.99 per diluted share, for the year ended December 31, 2017 compared to FFO of $48.0 million, or $0.96 per diluted share, for the year ended December 31, 2016. |
• | Introduced 2018 full-year Normalized FFO guidance in the range of $1.00 to $1.05 per diluted share, as set forth in the presentation that can also be found on the Investors page of the Company's website at www.ArmadaHoffler.com. The Company's executive management will provide further details regarding its 2018 earnings guidance during today's webcast and conference call. |
• | Core operating property portfolio occupancy at 94.2% as of December 31, 2017 compared to 93.8% as of December 31, 2016. |
• | Completed a lease agreement with WeWork, a New York City based co-working space company that will occupy 62,000 square feet of space at One City Center in Durham, North Carolina, bringing total office pre-leasing to approximately 90% for this asset. |
• | Announced that Williams Sonoma and Pottery Barn will be the anchor tenants of Phase VI of the Town Center of Virginia Beach, further solidifying Town Center as the region's prime shopping destination. |
• | Entered into a joint venture agreement as a majority partner to develop, build and own an estimated $23 million Lowes Foods-anchored retail center in Mount Pleasant, South Carolina, increasing the Company's development pipeline to $484 million. |
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• | Added approximately 132,000 square feet of retail space through the acquisitions of a Harris Teeter-anchored center in Virginia Beach, Virginia and a Publix-anchored center in Moultrie, Georgia in January 2018. The Company has also agreed to terms regarding the acquisition of two Lowes Foods-anchored centers in the Greenville and Columbia areas of South Carolina. Both acquisitions are expected to close in the late first quarter or early second quarter, subject to customary closing conditions. |
• | Invested in the development of a second Whole Foods-anchored center in Delray Beach, Florida. |
• | Closed on a new, expanded and unsecured $300 million credit facility that includes a $150 million term loan with Bank of America, N.A. serving as the administrative agent and Regions Bank and PNC Bank, National Association serving as joint lead arrangers and syndication agents. |
Commenting on the Company’s results, Louis Haddad, President and CEO, said, "Now that we have closed out another year of significant outperformance versus the REIT index, I am pleased to report that the mid-point of our 2018 guidance range represents a measurable increase over last year’s results. We expect another strong year for our company in all aspects of our business. Portfolio leasing and accretive acquisitions combined with another stellar year from our construction company will continue to deliver value to our shareholders. We also expect significant NAV and earnings growth occurring with the delivery and stabilization of several development projects beginning in the latter half of 2018."
Financial Results
The fourth quarter changes in net income, Normalized FFO and FFO as compared to the fourth quarter of 2016 were positively impacted by higher interest income from mezzanine lending activities and lower interest expense and were negatively impacted by lower construction segment gross profits.
Full year changes in net income, Normalized FFO and FFO were positively impacted by higher construction segment gross profits and higher interest income from mezzanine lending activities and were negatively impacted by increased general & administrative expenses and increased interest expense. Full year net income and FFO were positively impacted by mark-to-market gains on interest rate derivatives. The full year change in net income was negatively impacted by lower gains on real estate dispositions.
Operating Performance
At the end of the fourth quarter, the Company’s office, retail and multifamily core operating property portfolios were 89.9%, 96.5% and 92.9% occupied, respectively.
Total construction contract backlog was $49.2 million at the end of the year.
Balance Sheet and Financing Activity
As of December 31, 2017, the Company had $523 million of total debt outstanding, including $66 million outstanding under its revolving credit facility. Total debt outstanding excludes unamortized GAAP fair value adjustments and deferred financing costs. Approximately 44% of the Company’s debt had fixed interest rates or were subject to interest rate swaps as of December 31, 2017. After considering LIBOR interest rate caps with strike prices at or below 150 basis points, as of December 31, 2017, 100% of the Company’s debt was fixed or hedged.
Outlook
The Company is introducing its 2018 full-year Normalized FFO guidance in the range of $1.00 to $1.05 per diluted share, as set forth in the presentation that can also be found on the Investors page of the Company's website at www.ArmadaHoffler.com. The following table outlines the Company's assumptions along with Normalized FFO per diluted share estimates for 2018. The Company's executive management will provide further details regarding its 2018 earnings guidance during today's webcast and conference call.
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Full-year 2018 Guidance [1] | Expected Ranges | |||||||
Total NOI | $80.7M | $81.4M | ||||||
Construction Segment Gross Profit | $4.4M | $7.5M | ||||||
G&A expenses | $10.7M | $11.0M | ||||||
Interest income | $9.0M | $9.5M | ||||||
Interest expense | $19.7M | $20.3M | ||||||
Normalized FFO per diluted share [2] | $1.00 | $1.05 | ||||||
[1] Includes the following assumptions:
• | Raising $55 million through the ATM program for a full year weighted average share count of 64.5 million |
• | Interest expense is calculated based on the Forward LIBOR Curve, which forecasts rates rising to 2.2% by year end |
• | Acquisition of four retail centers |
• | Disposition of a newly constructed distribution center in the fourth quarter of 2018 |
[2] Normalized FFO excludes certain items, including debt extinguishment losses, acquisition, development and other pursuit costs, mark-to-market adjustments for interest rate derivatives and other non-comparable items. See "Non-GAAP Financial Measures." The Company does not provide a reconciliation for its guidance range of Normalized FFO per diluted share to net income per diluted share, the most directly comparable forward-looking GAAP financial measure, because it is unable to provide a meaningful or accurate estimate of reconciling items and the information is not available without unreasonable effort as a result of the inherent difficulty of forecasting the timing and/or amounts of various items that would impact net income per diluted share. For the same reasons, the Company is unable to address the probable significance of the unavailable information and believes that providing a reconciliation for its guidance range of Normalized FFO per diluted share would imply a degree of precision for its forward-looking net income per diluted share that could be misleading to investors.
Supplemental Financial Information
Further details regarding operating results, properties and leasing statistics can be found in the Company’s supplemental financial package available on the Investors page at www.ArmadaHoffler.com.
Webcast and Conference Call
The Company will host a webcast and conference call on Tuesday, February 6, 2018 at 8:30 a.m. Eastern Time to review financial results and discuss recent events. The live webcast will be available through the Investors page of the Company’s website, www.ArmadaHoffler.com, 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 Tuesday, March 6, 2018 by dialing 844-512-2921 (domestic) or 412-317-6671 (international) and entering the pass code 13674867.
About Armada Hoffler Properties, Inc.
Armada Hoffler Properties, Inc. (NYSE: AHH) is a vertically-integrated, self-managed real estate investment trust ("REIT") with nearly four decades of experience developing, building, acquiring and managing high-quality, institutional-grade office, retail and multifamily properties located primarily in the Mid-Atlantic and Southeastern United States. 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. The Company has elected to be taxed as a REIT for U.S. federal income tax purposes.
Forward-Looking Statements
Certain matters within this press release are discussed using forward-looking language as specified in the Private Securities Litigation Reform Act of 1995, and, as such, may involve known and unknown risks, uncertainties and other factors that may cause the actual results or performance to differ from those projected in the forward-looking statement. These forward-looking statements may include comments relating to the current and future performance of the Company’s operating property portfolio, the Company’s development pipeline, the Company’s construction and development business, including backlog and timing of deliveries, financing activities, as well as acquisitions,
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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, 2016, 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 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, | ||||||||
2017 | 2016 | |||||||
(Unaudited) | ||||||||
ASSETS | ||||||||
Real estate investments: | ||||||||
Income producing property | $ | 910,686 | $ | 894,078 | ||||
Held for development | 680 | 680 | ||||||
Construction in progress | 83,071 | 13,529 | ||||||
Accumulated depreciation | (164,521 | ) | (139,553 | ) | ||||
Net real estate investments | 829,916 | 768,734 | ||||||
Cash and cash equivalents | 19,959 | 21,942 | ||||||
Restricted cash | 2,957 | 3,251 | ||||||
Accounts receivable, net | 15,691 | 15,052 | ||||||
Notes receivable | 83,058 | 59,546 | ||||||
Construction receivables, including retentions | 23,933 | 39,433 | ||||||
Construction contract costs and estimated earnings in excess of billings | 245 | 110 | ||||||
Equity method investments | 11,411 | 10,235 | ||||||
Other assets | 55,953 | 64,165 | ||||||
Total Assets | $ | 1,043,123 | $ | 982,468 | ||||
LIABILITIES AND EQUITY | ||||||||
Indebtedness, net | $ | 517,272 | $ | 522,180 | ||||
Accounts payable and accrued liabilities | 15,180 | 10,804 | ||||||
Construction payables, including retentions | 47,445 | 51,130 | ||||||
Billings in excess of construction contract costs and estimated earnings | 3,591 | 10,167 | ||||||
Other liabilities | 39,352 | 39,209 | ||||||
Total Liabilities | 622,840 | 633,490 | ||||||
Total Equity | 420,283 | 348,978 | ||||||
Total Liabilities and Equity | $ | 1,043,123 | $ | 982,468 | ||||
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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, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
(Unaudited) | ||||||||||||||||
Revenues | ||||||||||||||||
Rental revenues | $ | 27,654 | $ | 26,516 | $ | 108,737 | $ | 99,355 | ||||||||
General contracting and real estate services revenues | 32,643 | 50,475 | 194,034 | 159,030 | ||||||||||||
Total revenues | 60,297 | 76,991 | 302,771 | 258,385 | ||||||||||||
Expenses | ||||||||||||||||
Rental expenses | 6,353 | 5,670 | 25,422 | 21,904 | ||||||||||||
Real estate taxes | 2,731 | 2,542 | 10,528 | 9,629 | ||||||||||||
General contracting and real estate services expenses | 32,002 | 49,039 | 186,590 | 153,375 | ||||||||||||
Depreciation and amortization | 9,303 | 9,692 | 37,321 | 35,328 | ||||||||||||
General and administrative expenses | 2,673 | 2,688 | 10,435 | 9,552 | ||||||||||||
Acquisition, development and other pursuit costs | 171 | 77 | 648 | 1,563 | ||||||||||||
Impairment charges | 60 | 171 | 110 | 355 | ||||||||||||
Total expenses | 53,293 | 69,879 | 271,054 | 231,706 | ||||||||||||
Operating income | 7,004 | 7,112 | 31,717 | 26,679 | ||||||||||||
Interest income | 2,111 | 1,300 | 7,077 | 3,228 | ||||||||||||
Interest expense | (4,157 | ) | (4,573 | ) | (17,439 | ) | (16,466 | ) | ||||||||
Loss on extinguishment of debt | (50 | ) | — | (50 | ) | (82 | ) | |||||||||
Gain on real estate dispositions | — | 93 | 8,087 | 30,533 | ||||||||||||
Change in fair value of interest rate derivatives | 827 | 1,323 | 1,127 | (941 | ) | |||||||||||
Other income (loss) | (23 | ) | (7 | ) | 131 | 147 | ||||||||||
Income before taxes | 5,712 | 5,248 | 30,650 | 43,098 | ||||||||||||
Income tax benefit (provision) | 56 | (103 | ) | (725 | ) | (343 | ) | |||||||||
Net income | 5,768 | 5,145 | 29,925 | 42,755 | ||||||||||||
Net income attributable to noncontrolling interests | (1,616 | ) | (1,687 | ) | (8,878 | ) | (14,681 | ) | ||||||||
Net income attributable to stockholders | $ | 4,152 | $ | 3,458 | $ | 21,047 | $ | 28,074 | ||||||||
Net Income per basic and diluted share and unit | $ | 0.09 | $ | 0.09 | $ | 0.50 | $ | 0.85 | ||||||||
Weighted average shares and units outstanding | 62,427 | 54,258 | 60,181 | 50,224 | ||||||||||||
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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, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Net income | $ | 5,768 | $ | 5,145 | $ | 29,925 | $ | 42,755 | ||||||||
Depreciation and amortization | 9,303 | 9,692 | 37,321 | 35,328 | ||||||||||||
Gain on operating real estate dispositions (1) | — | (93 | ) | (7,595 | ) | (30,103 | ) | |||||||||
Funds From Operations (FFO) | $ | 15,071 | $ | 14,744 | $ | 59,651 | $ | 47,980 | ||||||||
Acquisition, development and other pursuit costs | 171 | 77 | 648 | 1,563 | ||||||||||||
Impairment charges | 60 | 171 | 110 | 355 | ||||||||||||
Loss on extinguishment of debt | 50 | — | 50 | 82 | ||||||||||||
Change in fair value of interest rate derivatives | (827 | ) | (1,323 | ) | (1,127 | ) | 941 | |||||||||
Normalized FFO | $ | 14,525 | $ | 13,669 | $ | 59,332 | $ | 50,921 | ||||||||
Net income per diluted share and unit | $ | 0.09 | $ | 0.09 | $ | 0.50 | $ | 0.85 | ||||||||
FFO per diluted share and unit | $ | 0.24 | $ | 0.27 | $ | 0.99 | $ | 0.96 | ||||||||
Normalized FFO per diluted share and unit | $ | 0.23 | $ | 0.25 | $ | 0.99 | $ | 1.01 | ||||||||
Weighted average shares and units outstanding-Diluted | 62,427 | 54,258 | 60,181 | 50,224 | ||||||||||||
(1) The adjustment for gain on operating real estate dispositions for the year ended December 31, 2017 excludes the gain on the land outparcel at Sandbridge Commons because this was a non-operating parcel. Additionally, the adjustment for gain on real estate dispositions for the year ended December 31, 2016 excludes the gain on the Newport News Economic Authority building because this building was sold before being placed in service.
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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4Q 2017 | SUPPLEMENTAL FINANCIAL PACKAGE
2Table of Contents
3 Forward Looking Statements
4 Corporate Profile
5 Highlights
6 Summary Information
7 Net Asset Value Component Data
8 Summary Balance Sheet
9 Summary Income Statement
10 FFO, Normalized FFO & Adjusted FFO
11 Outstanding Debt
12 Core Debt to Core EBITDA
13 Debt Information
14 Capitalization & Financial Ratios
15 Property Portfolio
17 Development Pipeline
18 Acquisitions & Dispositions
19 Construction Business Summary
20 Same Store NOI by Segment
21 Top 10 Tenants by Annualized Base Rent
22 Office Lease Summary
23 Office Lease Expirations
24 Retail Lease Summary
25 Retail Lease Expirations
26 Appendix – Definitions & Reconciliations
30 Same Store vs Non-Same Store Properties
31 Reconciliation to Property Portfolio NOI
33 Reconciliation to GAAP Net Income
3Forward Looking Statements
This Supplemental Financial Package should be read in conjunction with the unaudited condensed
consolidated financial statements appearing in our press release dated February 6, 2018, which has been
furnished as Exhibit 99.1 to our Form 8-K filed on February 6, 2018. 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”)). In particular, statements pertaining to our capital resources, portfolio performance, development
pipeline 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, 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.
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Analyst Coverage
Corporate Profile
Armada Hoffler Properties, Inc. (NYSE:AHH) is a full service real estate company that develops, constructs, acquires and manages
institutional-grade office, retail and multifamily properties in the Mid-Atlantic and Southeastern United States. The Company also
provides general contracting and development services to third-party clients, in addition to developing and building properties to be
placed in its stabilized portfolio. 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’Hara
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’Hara
(757) 366-6684
Chief Financial Officer and Treasurer
mohara@armadahoffler.com
D. A. Davidson & Co.
James O. Lykins
(503) 603-3041
jlykins@dadco.com
Raymond James & Associates
Bill Crow
(727) 567-2594
bill.crow@raymondjames.com
Robert W. Baird & Co.
David Rodgers
(216) 737-7341
drodgers@rwbaird.com
Stonegate Capital Partners
Laura Engel
(214) 987-4121
laura@stonegateinc.com
Janney, Montgomery,
& Scott LLC
Robert Stevenson
(646) 840-3217
robertstevenson@janney.com
FBR Capital Markets
Craig Kucera
(703) 862-5249
craigkucera@fbr.com
Stifel, Nicolaus & Company Inc.
John Guinee
(443) 224-1307
jwguinee@stifel.com
Bank of America Merrill Lynch
James Feldmen
(646) 855-5808
james.feldman@baml.com
5Highlights
• Net income of $5.8 million, or $0.09 per diluted share, for the quarter ended December 31, 2017 compared to net income of $5.1 million, or
$0.09 per diluted share, for the quarter ended December 31, 2016. Net income of $29.9 million, or $0.50 per diluted share, for the year ended
December 31, 2017 compared to net income of $42.8 million, or $0.85 per diluted share, for the year ended December 31, 2016.
• Normalized Funds From Operations (“FFO”) of $14.5 million, or $0.23 per diluted share, for the quarter ended December 31, 2017 compared to
Normalized FFO of $13.7 million, or $0.25 per diluted share, for the quarter ended December 31, 2016. Normalized FFO of $59.3 million, or
$0.99 per diluted share, for the year ended December 31, 2017 compared to Normalized FFO of $50.9 million, or $1.01 per diluted share, for the
year ended December 31, 2016.
• FFO of $15.1 million, or $0.24 per diluted share, for the quarter ended December 31, 2017 compared to FFO of $14.7 million, or $0.27 per
diluted share, for the quarter ended December 31, 2016. FFO of $59.7 million, or $0.99 per diluted share, for the year ended December 31, 2017
compared to FFO of $48.0 million, or $0.96 per diluted share, for the year ended December 31, 2016.
• Introduced 2018 full-year Normalized FFO guidance in the range of $1.00 to $1.05 per diluted share, as set forth in the presentation that can also
be found on the Investors page of the Company's website at www.ArmadaHoffler.com. The Company's executive management will provide further
details regarding its 2018 earnings guidance during today's webcast and conference call.
• Core operating property portfolio occupancy at 94.2% as of December 31, 2017 compared to 93.8% as of December 31, 2016.
• Completed a lease agreement with WeWork, a New York City based co-working space company that will occupy 62,000 square feet of space at
One City Center in Durham, North Carolina, bringing total office pre-leasing to approximately 90% for this asset.
• Announced that Williams Sonoma and Pottery Barn will be the anchor tenants of Phase VI of the Town Center of Virginia Beach, further solidifying
Town Center as the region's prime shopping destination.
• Entered into a joint venture agreement as a majority partner to develop, build and own an estimated $23 million Lowes Foods-anchored retail
center in Mount Pleasant, South Carolina, increasing the Company's development pipeline to $484 million.
• Added approximately 132,000 square feet of retail space through the acquisitions of a Harris Teeter-anchored center in Virginia Beach, Virginia
and a Publix-anchored center in Moultrie, Georgia in January 2018. The Company has also agreed to terms regarding the acquisition of two Lowes
Foods-anchored centers in the Greenville and Columbia areas of South Carolina. Both acquisitions are expected to close in the late first quarter or
early second quarter, subject to customary closing conditions.
• Invested in the development of a second Whole Foods-anchored center in Delray Beach, Florida.
• Closed on a new, expanded and unsecured $300 million credit facility that includes a $150 million term loan with Bank of America, N.A. serving as
the administrative agent and Regions Bank and PNC Bank, National Association serving as joint lead arrangers and syndication agents.
6Summary Information
In thousands, except per share data
(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
Three months ended
12/31/2017 9/30/2017 6/30/2017 3/31/2017 12/31/2016
OPERATIONAL METRICS
Net income $5,768 $10,461 $4,943 $8,753 $5,145
Net income per diluted share $0.09 $0.17 $0.08 $0.16 $0.09
Rental properties Net Operating Income (NOI) 18,570 17,573 17,989 18,655 18,304
General contracting and real estate services gross profit 641 1,824 2,656 2,323 1,436
Adjusted EBITDA(1) 18,345 19,203 19,272 19,376 18,097
Funds From Operations (FFO) 15,071 15,500 14,247 14,833 14,744
FFO per diluted share $0.24 $0.25 $0.24 $0.27 $0.27
Normalized FFO 14,525 15,493 14,724 14,590 13,669
Normalized FFO per diluted share $0.23 $0.25 $0.25 $0.26 $0.25
Annualized dividend yield 4.89% 5.50% 5.87% 5.47% 4.94%
CAPITALIZATION
Total common shares outstanding 44,938 44,937 44,932 37,813 37,490
Operating Partnership units outstanding 17,486 17,845 17,846 17,859 17,794
Common shares and OP units outstanding 62,424 62,782 62,778 55,672 55,284
Market price per common share $15.53 $13.81 $12.95 $13.89 $14.57
Equity market capitalization(2) $969,445 $867,019 $812,975 $773,284 $805,488
Total debt(3) 523,412 493,493 470,314 527,504 527,082
Total market capitalization 1,492,857 1,360,512 1,283,289 1,300,788 1,332,570
Less: cash (22,916) (22,916) (21,726) (13,688) (25,193)
Total enterprise value $1,469,941 $1,337,596 $1,261,563 $1,287,100 $1,307,377
BALANCE SHEET METRICS
Core Debt/enterprise value 33.0% 34.2% 30.9% 32.9% 31.7%
Fixed charge coverage ratio 3.5x 3.7x 3.5x 3.6x 3.3x
Core Debt/Annualized Core EBITDA 6.6x 6.0x 5.3x 6.0x 6.3x
CORE PORTFOLIO OCCUPANCY
Office(4) 89.9% 89.2% 89.9% 87.7% 86.8%
Retail (4) 96.5% 96.9% 96.8% 96.7% 95.8%
Multifamily(5) 92.9% 94.3% 91.6% 92.7% 94.3%
Weighted Average(6) 94.2% 94.7% 94.2% 94.3% 93.8%
7Net 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
12/31/2017 12/31/2017 General contracting Gross Profit $7,444
Diversified Portfolio
Office $0 $0 Non-Property Assets
Retail 9,506 38,024 Non-Property Assets As of 12/31/2017
Multifamily 2,284 9,136 Cash and Cash Equivalents $19,959
Total Diversified Portfolio NOI $11,790 $47,160 Restricted Cash 2,957
Accounts Receivable 15,691
Virginia Beach Town Center Notes Receivable 83,058
Office(1) $3,117 $12,468 Construction receivables, including retentions 23,933
Retail (1) 2,048 8,192 Equity method investments (Durham City Center JV) 11,411
Multifamily 1,437 5,748 Other Assets 56,198
Total Virginia Beach Town Center NOI $6,602 $26,408 Land held for development 680
Total Non-Property Assets $213,887
Stabilized Portfolio NOI - Cash Basis $18,392 $73,568
Liabilities & Share Count
Signed leases stil l in free rent period $327 $1,308 As of 12/31/2017
Liabilities
Total $18,719 $74,876 Mortgages and notes payable $517,272
Accounts payable and accrued liabilities 15,180
Development Pipeline Construction payables, including retentions 47,445
12/31/2017 Other Liabilities 42,943
Income producing property $25,000 Total Liabilities $622,840
Construction in progress 77,000
Other assets 2,000 Share Count
Total cost to date $104,000 Total common shares outstanding 44,938
Total OP Units Outstanding 17,486
Total common shares & OP units outstanding 62,424
8Summary Balance Sheets
$ in thousands
12/31/2017 12/31/2016
Assets (Unaudited)
Real estate investments:
Income producing property $910,686 $894,078
Held for development 680 680
Construction in progress 83,071 13,529
Accumulated depreciation (164,521) (139,553)
Net real estate investments 829,916 768,734
Cash and cash equivalents 19,959 21,942
Restricted cash 2,957 3,251
Accounts receivable, net 15,691 15,052
Notes receivable 83,058 59,546
Construction receivables, including retentions 23,933 39,433
Costs and estimated earnings in excess of bil l ings 245 110
Equity method investments 11,411 10,235
Other assets 55,953 64,165
Total Assets $1,043,123 $982,468
Liabilities and Equity
Indebtedness, net $517,272 $522,180
Accounts payable and accrued liabilities 15,180 10,804
Construction payables, including retentions 47,445 51,130
Bil l ings in excess of costs and estimated earnings 3,591 10,167
Other l iabilities 39,352 39,209
Total Liabilities 622,840 633,490
Total Equity 420,283 348,978
Total Liabilities and Equity $1,043,123 $982,468
As of
9Summary Income Statement
In thousands, except per share data
Three months ended Year ended
12/31/2017 12/31/2016 12/31/2017 12/31/2016
Revenues (Unaudited) (Unaudited)
Rental revenues $27,654 $26,516 $108,737 $99,355
General contracting and real estate services 32,643 50,475 194,034 159,030
Total Revenues 60,297 76,991 302,771 258,385
Expenses
Rental expenses 6,353 5,670 25,422 21,904
Real estate taxes 2,731 2,542 10,528 9,629
General contracting and real estate services 32,002 49,039 186,590 153,375
Depreciation and amortization 9,303 9,692 37,321 35,328
General and administrative 2,673 2,688 10,435 9,552
Acquisition, development & other pursuit costs 171 77 648 1,563
Impairment charges 60 171 110 355
Total Expenses 53,293 69,879 271,054 231,706
Operating Income 7,004 7,112 31,717 26,679
Interest income 2,111 1,300 7,077 3,228
Interest expense (4,157) (4,573) (17,439) (16,466)
Loss on extinguishment of debt (50) - (50) (82)
Gain on real estate dispositions - 93 8,087 30,533
Change in fair value of interest rate derivatives 827 1,323 1,127 (941)
Other income (23) (7) 131 147
Income before taxes 5,712 5,248 30,650 43,098
Income tax benefit (provision) 56 (103) (725) (343)
Net Income $5,768 $5,145 $29,925 $42,755
Per Diluted Share & Unit $0.09 $0.09 $0.50 $0.85
Weighted Average Shares & Units - Diluted 62,427 54,258 60,181 50,224
10
(1) See definitions on pages 28-29
(2) Excludes gain on non-operating real estate of $0.5M for the three months ended 9/30/2017 and the year ended December 31, 2017, as well as $0.4M for the year
ended December 31,2016.
(3) Excludes development, redevelopment, and first generation space
FFO, Normalized FFO & Adjusted FFO(1)
In thousands, except per share data
Three months ended (Unaudited) Year Ended (Unaudited)
12/31/2017 9/30/2017 6/30/2017 3/31/2017 2017 2016
Funds From Operations
Net income $5,768 $10,461 $4,943 $8,753 $29,925 $42,755
Earnings per diluted share $0.09 $0.17 $0.08 $0.16 $0.50 $0.85
Depreciation and amortization 9,303 9,239 9,304 9,475 37,321 35,328
Gains on dispositions of operating real estate(2) - (4,200) - (3,395) (7,595) (30,103)
FFO $15,071 $15,500 $14,247 $14,833 $59,651 $47,980
FFO per diluted share $0.24 $0.25 $0.24 $0.27 $0.99 $0.96
Normalized FFO
Acquisition, development & other pursuit costs 171 61 369 47 648 1,563
Loss on extinguishment of debt 50 - - - 50 82
Impairment charges 60 19 27 4 110 355
Change in fair value of interest rate derivatives (827) (87) 81 (294) (1,127) 941
Normalized FFO $14,525 $15,493 $14,724 $14,590 $59,332 $50,921
Normalized FFO per diluted share $0.23 $0.25 $0.25 $0.26 $0.99 $1.01
Adjusted FFO
Non-cash stock compensation 276 215 421 411 1,323 1,082
Acquisition, development & other pursuit costs (171) (61) (369) (47) (648) (1,563)
Tenant improvements, leasing commissions, lease incentives (3) (1,115) (707) (895) (943) (3,660) (2,392)
Property related capital expenditures (1,474) (1,167) (840) (442) (3,923) (1,941)
Non-cash interest expense 334 380 283 277 1,274 980
Net effect of straight-line rents (166) (159) (122) (245) (692) (720)
Amortization of leasing incentives & above (below) market rents (55) (50) (43) (47) (195) (85)
AFFO $12,154 $13,944 $13,159 $13,554 $52,811 $46,282
Weighted Average Common Shares Outstanding 44,937 44,934 42,091 37,622 42,423 33,057
Weighted Average Operating Partnership ("OP") Units Outstanding 17,490 17,845 17,845 17,853 17,758 17,167
Total Weighted Average Common Shares and OP Units Outstanding 62,427 62,779 59,936 55,475 60,181 50,224
11
Debt Maturities & Principal Payments
Debt Stated Rate
Effective Rate as of
12/31/2017 Maturity Date 2018 2019 2020 2021 2022 Thereafter
Outstanding as
of 12/31/2017
Secured Notes Payable - Core Debt
Sandbridge Commons L+1.75% 3.31% 1/17/2018 (1) $8,468 $8,468
Columbus Village Note 1 L+2.00% 3.56% (2) 4/5/2018 6,080 6,080
Columbus Village Note 2 L+2.00% 3.56% 4/5/2018 2,218 2,218
Johns Hopkins Village L+1.90% 3.46% 7/30/2018 46,698 46,698
North Point Center Note 1 6.45% 6.45% 2/5/2019 219 9,352 9,571
Southgate Square L+2.00% 3.56% 4/29/2021 488 561 584 19,075 20,708
249 Central Park Retail L+1.95% 3.51% 8/8/2021 233 243 258 16,117 16,851
South Retail L+1.95% 3.51% 8/8/2021 102 107 113 7,072 7,394
Fountain Plaza Retail L+1.95% 3.51% 8/8/2021 139 147 156 9,703 10,145
Encore Apartments 3.25% 3.25% 9/10/2021 124 504 24,338 24,966
4525 Main Street 3.25% 3.25% 9/10/2021 158 646 31,230 32,034
Hanbury Village 3.78% 3.78% 8/15/2022 495 504 522 544 17,438 19,503
Socastee Commons 4.57% 4.57% 1/6/2023 99 105 109 115 120 4,223 4,771
North Point Center Note 2 7.25% 7.25% 9/15/2025 113 121 130 140 151 1,804 2,459
Smith's Landing 4.05% 4.05% 6/1/2035 832 824 858 890 930 15,430 19,764
Liberty Apartments 5.66% 5.66% 11/1/2043 257 272 287 304 322 13,252 14,694
The Cosmopolitan 3.35% 3.35% 7/1/2051 742 766 792 819 847 41,243 45,209
Total - Secured Core Debt $67,183 $13,284 $4,959 $110,347 $19,808 $75,952 $291,533
Secured Notes Payable - Development Pipeline
Lightfoot Marketplace L+1.75% 3.31% 11/14/2018 10,500 10,500
Harding Place L+2.95% 4.51% 2/24/2020 3,874 3,874
Town Center Block 9 L+3.50% 5.06% 6/29/2020 1,505 1,505
Total - Development Pipeline 10,500 - 5,379 - - - 15,879
Total Secured Notes Payable $77,683 $13,284 $10,338 $110,347 $19,808 $75,952 $307,412
Unsecured Core Debt
Senior unsecured line of credit L+1.40% - 2.00% 3.11% 10/26/2021 66,000 66,000
Senior unsecured term loan L+1.35% - 1.95% 3.06% 10/26/2022 100,000 100,000
Senior unsecured term loan L+1.35% - 1.95% 3.50% (2) 10/26/2022 50,000 50,000
Total - Unsecured Core Debt - - - 66,000 150,000 - 216,000
Total Notes Payable excluding GAAP Adjustments $77,683 $13,284 $10,338 $176,347 $169,808 $75,952 $523,412
Weighted Average Interest Rate 3.5% 5.7% 4.3% 3.3% 3.3% 4.1% 3.5%
Balloon Payments 73,322 9,333 5,379 172,274 167,109 5,567 432,984
Principal amortization 4,361 3,951 4,959 4,073 2,699 70,385 90,428
Total Consolidated Debt $77,683 $13,284 $10,338 $176,347 $169,808 $75,952 $523,412
Fixed-rate Debt(3) 8,837 12,226 3,848 58,380 69,808 75,952 229,051
Variable-rate Debt(4) 68,846 1,058 6,490 117,967 100,000 - 294,361
Total Consolidated Debt $77,683 $13,284 $10,338 $176,347 $169,808 $75,952 $523,412
GAAP Adjustments (6,140)
Total Notes Payable $517,272
Outstanding Debt
$ in thousands
(1) Subsequent to quarter end, Note was modified with a maturity date of 01/17/2023
(2) Subject to an interest rate swap lock
(3) Includes debt subject to interest rate swap locks
(4) Excludes debt subject to interest rate swap locks
30 Day LIBOR as
of 12/31/2017
1.564%
12Core Debt to Core EBITDA(1)
$ in thousands
(1) See definitions on page 29
(2) Excludes GAAP Adjustments
Three months ended
12/31/2017 9/30/2017 6/30/2017 3/31/2017 12/31/2016
Net Income $5,768 $10,461 $4,943 $8,753 $5,145
Excluding:
Interest expense 4,157 4,253 4,494 4,535 4,573
Income tax (56) 29 450 302 103
Depreciation and amortization 9,303 9,239 9,304 9,475 9,692
Gain on real estate dispositions - (4,692) - (3,395) (93)
Change in fair value of interest rate derivatives (827) (87) 81 (294) (1,323)
Adjusted EBITDA $18,345 $19,203 $19,272 $19,376 $18,097
Other adjustments:
Loss on extinguishment of debt 50 - - - -
Non-cash stock compensation 276 215 418 411 218
Development Pipeline (339) (301) (1,244) (2,154) (1,917)
Total Other Adjustments (13) (86) (826) (1,743) (1,699)
Core EBITDA $18,332 $19,117 $18,446 $17,633 $16,398
Total Debt(2) $523,412 $493,493 $470,314 $527,504 $527,082
Adjustments to Debt:
(Less) Development Pipeline(2) (15,879) (12,894) (58,942) (90,021) (88,069)
(Less) Cash & restricted cash (22,916) (22,916) (21,726) (13,688) (25,193)
Core Debt $484,617 $457,683 $389,646 $423,795 $413,820
Core Debt/Annualized Core EBITDA 6.6x 6.0x 5.3x 6.0x 6.3x
13Debt 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
Debt Maturities & Principal Payments
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
$160,000
$180,000
$200,000
2018 2019 2020 2021 2022 2023 and
thereafter
($
In
Th
ou
sa
nd
s)
Total Debt Composition
Weighted Average
Percent of Debt Interest Rate Maturity
Secured vs. Unsecured Debt
Unsecured Debt 41.3% 3.2% 4.5 Yrs
Secured Debt 58.7% 3.7% 9.2 Yrs
Variable vs. Fixed-rate Debt
Variable-rate Debt(1) 56.2% 3.3% 3.3 Yrs
Fixed-rate Debt(2)(3) 43.8% 3.8% 12.4 Yrs
Fixed-rate and Hedged Debt(2)(3) 100.0%
Total 3.5% 7.3 Yrs
Interest Rate Cap Agreements
Effective Date Maturity Date Strike Rate Notional Amount
February 25, 2016 March 1, 2018 1.50% $75,000
June 17, 2016 June 17, 2018 1.00% 70,000
February 7, 2017 March 1, 2019 1.50% 50,000
June 23, 2017 July 1, 2019 1.50% 50,000
September 18, 2017 October 1, 2019 1.50% 50,000
November 28, 2017 December 1, 2019 1.50% 50,000
Total Interest Rate Caps 345,000
Fixed-rate Debt(2)(3) 229,051
Fixed-rate and Hedged Debt $574,051
% of Total (3) 100.0%
100%
14Capitalization & Financial Ratios
$ in thousands
Capitalization as of December 31, 2017 Capital Structure as of December 31, 2017
Debt % of Total Carrying Value
Unsecured Credit Facility 13% $66,000
Unsecured Term Loans 29% 150,000
Mortgages Payable 58% 307,412
Total Debt $523,412
Equity % of Total Shares/Units Stock Price Market Value
Common Stock (NYSE: AHH) 72% 44,938 $15.53 $697,887
Common Units 28% 17,486 $15.53 271,558
Equity Market Capitalization 62,424 $969,445
Total Market Capitalization $1,492,857
Debt/Market Capitalization 35.1%
Dividend Data Liquidity as of December 31, 2017
Trailing 12
Months
Common Dividends and Distributions $43,616 Cash on Hand $22,916
AFFO 52,811 Availability under Credit Facility 81,900
AFFO Payout Ratio 82.6% $104,816
Debt
35%
Equity
65%
15Property Portfolio
As of 12/31/17
Net Rentable Square Feet (RSF)(1)
Property Anchor Tenant(s) 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)
Retail Properties
249 Central Park Retail (4)
Cheesecake Factory, Brooks Brothers,
Gordon Biersch
Virginia Beach, VA ✓ - 2004 92,710 - 92,710 96.6% - $2,525,113 $28.19
Alexander Pointe Harris Teeter Salisbury, NC 100% 1997 57,710 - 57,710 97.6% - 653,513 11.61
Bermuda Crossroads (6) Food Lion, OfficeMax Chester, VA 100% 2001 122,566 - 122,566 92.4% - 1,656,942 14.63
Broad Creek Shopping Center(6)(10) Home Depot, Food Lion, PetSmart Norfolk, VA 100% 1997/2001 250,416 - 250,416 100.0% - 3,858,878 15.41
Broadmoor Plaza Kroger, Staples, Jo-Ann Fabrics South Bend, IN 100% 1980 115,059 - 115,059 92.2% - 1,251,946 11.81
Brooks Crossing Various Small Shops Newport News, VA 100% 2016 - 18,349 18,349 - 59.8% 151,380 13.80
Columbus Village Barnes & Noble Virginia Beach, VA ✓ - 1980/2013 66,594 - 66,594 88.5% - 1,145,259 19.42
Columbus Village II Regal Cinemas, BB&B Virginia Beach, VA ✓ 100% 1995/1996 92,061 - 92,061 100.0% - 1,652,246 17.95
Commerce Street Retail (5) Yard House Virginia Beach, VA ✓ 100% 2008 19,173 - 19,173 100.0% - 856,862 44.69
Courthouse 7-Eleven 7-Eleven Virginia Beach, VA 100% 2011 3,177 - 3,177 100.0% - 139,280 43.84
Dick's at Town Center Dick's Sporting Goods, USI Virginia Beach, VA ✓ 100% 2002 103,335 - 103,335 100.0% - 1,241,201 12.01
Dimmock Square Best Buy, Old Navy Colonial Heights, VA 100% 1998 106,166 - 106,166 97.2% - 1,749,019 16.95
Fountain Plaza Retail Ruth's Chris, Ann Taylor Virginia Beach, VA ✓ - 2004 35,961 - 35,961 100.0% - 1,022,080 28.42
Gainsborough Square Food Lion, Rite Aid Chesapeake, VA 100% 1999 88,862 - 88,862 92.5% - 1,242,046 15.12
Greentree Shopping Center Various Small Shops Chesapeake, VA 100% 2014 15,719 - 15,719 92.6% - 318,839 21.90
Hanbury Village(6) Harris Teeter, Walgreens Chesapeake, VA 32% 2006/2009 116,635 - 116,635 97.0% - 2,422,431 21.40
Harper Hill Commons (6) Harris Teeter Winston-Salem, NC 100% 2004 96,914 - 96,914 80.5% - 894,989 11.47
Harrisonburg Regal Regal Cinemas Harrisonburg, VA 100% 1999 49,000 - 49,000 100.0% - 683,550 13.95
Lightfoot Marketplace(6) Harris Teeter, CHKD Williamsburg, VA - 2016 - 107,643 107,643 - 77.4% 1,247,430 14.97
North Hampton Market PetSmart, Hobby Lobby Taylors, SC 100% 2004 114,935 - 114,935 99.0% - 1,436,099 12.63
North Point Center(6) Kroger, PetSmart, Home Depot, Costco Durham, NC 67% 1998/2009 496,246 - 496,246 99.3% - 3,706,247 7.52
Oakland Marketplace(6) Kroger Oakland, TN 100% 2004 64,600 - 64,600 97.8% - 455,044 7.20
Parkway Marketplace Rite Aid Virginia Beach, VA 100% 1998 37,804 - 37,804 100.0% - 759,992 20.10
Patterson Place BB&B, PetSmart, DSW, AC Moore Durham, NC 100% 2004 160,942 - 160,942 96.1% - 2,428,883 15.70
Perry Hall Marketplace Safeway Perry Hall, MD 100% 2001 74,256 - 74,256 100.0% - 1,252,232 16.86
Providence Plaza Cranfil l , Sumner & Hartzog, Chipotle Charlotte, NC 100% 2007/2008 103,118 - 103,118 96.3% - 2,647,044 26.66
Renaissance Square Harris Teeter Davidson, NC 100% 2008 80,467 - 80,467 88.0% - 1,219,477 17.22
Sandbridge Commons (6) Harris Teeter Virginia Beach, VA - 2015 71,417 - 71,417 100.0% - 1,005,441 14.08
Socastee Commons Bi-Lo Myrtle Beach, SC - 2000/2014 57,273 - 57,273 100.0% - 656,700 11.47
South Retail lululemon, free people, CPK Virginia Beach, VA ✓ - 2002 38,515 - 38,515 100.0% - 947,752 24.61
South Square(6) Ross, Petco, Office Depot Durham, NC 100% 1977/2005 109,590 - 109,590 100.0% - 1,898,676 17.33
Southgate Square Burlington, PetSmart, Michaels Colonial Heights, VA - 1991/2016 220,131 - 220,131 92.1% - 2,764,187 13.64
Southshore Shops Buffalo Wild Wings Midlothian, VA 100% 2006 40,333 - 40,333 93.2% - 761,254 20.24
Stone House Square(6) Weis Markets Hagerstown, MD 100% 2008 112,274 - 112,274 90.7% - 1,744,377 17.13
Studio 56 Retail McCormick & Schmick's Virginia Beach, VA ✓ 100% 2007 11,594 - 11,594 100.0% - 378,009 32.60
Tyre Neck Harris Teeter(6)(10) Harris Teeter Portsmouth, VA 100% 2011 48,859 - 48,859 100.0% - 533,052 10.91
Waynesboro Commons Kroger Waynesboro, VA 100% 1993 52,415 - 52,415 100.0% - 428,996 8.18
Wendover Village BB&T, T.J. Maxx, Petco Greensboro, NC 100% 2004 171,653 - 171,653 99.2% - 3,060,233 17.96
Total / Weighted Avg Retail Portfolio 73% 3,498,480 125,992 3,624,472 96.5% 74.8% $52,796,699 $15.21
16
(1) The net rentable square footage for each of our retail & office properties is the sum of (a) the square footage of
existing leases, plus (b) for available space, management’s estimate of net rentable square footage based, in part,
on past leases. The net rentable square footage included in office leases is generally consistent with the Building
Owners and Managers Association, or BOMA, 1996 measurement guidelines.
(2) Occupancy for each of our retail & office properties is calculated as (a) square footage under executed leases as of
December 31, 2017, 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, 2017, divided by (b) total units
available, expressed as a percentage.
(3) For the properties in our office and retail portfolios, annualized base rent, or ABR, is calculated by multiplying (a)
monthly base rent (defined as cash base rent, before contractual tenant concessions and abatements, and
excluding tenant reimbursements for expenses paid by us) as of December 31, 2017 for in-place leases as of such
date by (b) 12, and does not give effect to periodic contractual rent increases or contingent rental revenue (e.g.,
percentage rent based on tenant sales thresholds). ABR per leased square foot is calculated by dividing (a) ABR by
(b) square footage under in-place leases as of December 31, 2017. In the case of triple net or modified gross leases,
our calculation of ABR does not include tenant reimbursements for real estate taxes, insurance, common area or
other operating expenses.
(4) As of December 31, 2017, the Company occupied 41,103 square feet at these two properties at an ABR of $1.2M,
or $30.31 per leased square foot, which amounts are reflected in this table. The rent paid by us is eliminated in
accordance with GAAP.
(5) Includes ABR pursuant to a rooftop lease.
(6) Net rentable square feet at certain of our retail properties includes pad sites leased pursuant to the ground leases
in the table below:
(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, 2017 by (b) 12.
(8) The ABR for Liberty, Cosmopolitan, Johns Hopkins Village excludes $244K, $716K and $1.2M from ground floor
retail leases, respectively.
(9) The Company leases the land underlying this property pursuant to a ground lease.
(10) ABR per Occupied Unit is calculated by dividing total base rental payments for the month ended December 31,
2017 by the number of occupied beds.
Property Portfolio - Continued
As of 12/31/17
Properties Subject to Ground Lease
Number of
Ground Leases
Square Footage
Leased Pursuant to
Ground Leases ABR
Bermuda Crossroads 2 11,000 $170,610
Broad Creek Shopping Center 6 22,737 621,601
Hanbury Village 2 55,586 1,082,118
Harper Hill Commons 1 41,520 373,680
Lightfoot Marketplace 1 51,750 543,375
North Point Center 4 280,556 1,131,953
Oakland M rke pl ce 1 45,000 186,300
Sandbridge Commons 2 55,288 675,467
South Square 1 1,778 60,000
Stone House Square 1 3,650 165,000
Tyre Neck Harris Teeter 1 48,859 533,052
Total / Weighted Avg 22 617,724 $5,543,155
Net Rentable Square Feet (RSF)(1)
Property Anchor Tenant Location
Town
Center
Unencumbered
ABR Year Built
Core
Properties
Development
Properties Total
Core
Occupancy(2) ABR(3)
ABR per Leased
SF(3)
Office Properties
4525 Main Street Clark Nexsen, Anthropologie, Mythics Virginia Beach, VA ✓ - 2014 237,893 - 237,893 93.1% $6,246,029 $28.21
Armada Hoffler Tower(4)(5) AHH, Troutman Sanders, Will iams Mullen Virginia Beach, VA ✓ 100% 2002 324,242 - 324,242 91.9% 8,604,490 28.89
One Columbus (5) BB&T, HBA Virginia Beach, VA ✓ 100% 1984 129,272 - 129,272 85.7% 2,784,294 25.14
Two Columbus The Art Institute Virginia Beach, VA ✓ 100% 2009 108,448 - 108,448 82.5% 2,380,130 26.61
Total / Weighted Average Office Portfolio 69% 799,855 - 799,855 89.9% $20,014,944 $27.82
Units
Multifamily Location
Town
Center
Unencumbered
ABR Year Built
Core
Properties
Development
Properties Total
Core
Occupancy (2) ABR (7)
Monthly Rent per
Occupied Unit
Encore Apartments Virginia Beach, VA ✓ - 2014 286 - 286 91.6% $4,053,588 $1,289.31
Johns Hopkins Village(8)(9) Baltimore, MD - 2016 157 - 157 100.0% 6,750,624 990.41 (10)
Liberty Ap tments (9) Newport News, VA - 2013 197 - 197 86.0% 2,131,668 1,048.51
Smith's L nding(9) Blacksburg, VA - 2009 284 - 284 98.6% 3,821,856 1,137.46
The Cosmop litan(8) Virginia Beach, VA ✓ - 2006 342 - 342 90.1% 5,541,936 1,499.44
Total / Weight d Avg Multifamily Portfolio - 1,266 - 1,266 92.9% $22,299,672 $1,233.61
17Development Pipeline
$ in thousands
Town Center Phase VI Meeting Street 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
Q4 2017 Year to Date
Capitalized Interest $504 $1,295
Capitalized Overhead $669 $2,382
Schedule(1)
Development, Not Delivered
Property
Type Estimated(1) % Leased
Construction
Start
Initial
Occupancy
Stabilized
Operation(2)
Estimated
Cost(1)
Cost to
Date
AHH
Ownership % Anchor Tenants & Other Notes
Meeting Street
Charleston, SC
Multifamily 114 units NA 3Q17 3Q19 3Q19 $53,000 $13,000 90% NA
King Street
Charleston, SC
Multifamily 74 units NA 3Q17 3Q19 3Q19 48,000 13,000 93% NA
Harding Place
Charlotte, NC
Multifamily 225 Units NA 3Q16 3Q18 1Q20 47,000 29,000 80%(3) NA
Town Center Phase VI
Virginia Beach, VA
Mixed-use 39,000 SF
131 Units
47% 4Q16 3Q18 3Q19 43,000 22,000 100% Williams Sonoma, Pottery Barn
Market at Mill Creek
Mt. Pleasant, SC
Retail 73,000 SF 80% 1Q18 1Q19 1Q19 23,000 - 70%(3) Lowes Foods
Brooks Crossing
Newport News, VA
Office 100,000 sf 100% 1Q18 1Q19 2Q19 22,000 1,000 65%(3) Huntington Ingalls Industries
Total Development, Not Delivered $236,000 $78,000
Development, Delivered Not Stabilized
Brooks Crossing
Newport News, VA
Retail 18,000 sf 60% 3Q15 3Q16 4Q18 3,000 3,000 65%(3) Misc. small shops
Lightfoot Marketplace
Will iamsburg, VA
Retail 109,000 sf 77% 3Q14 3Q16 2Q18 25,000 23,000 70%(3) Harris Teeter, CHKD
Total Development, Delivered Not Stabilized $28,000 $26,000
Total $264,000 $104,000
Joint Ventures - Minority Partner Project Cost
Equity
Investment
One City Center - 37% JV
Durham, NC
Mixed-use 153,000 sf 79% 1Q16 3Q18 4Q18 $44,000 $11,000 100% Duke University , WeWork
AHH Equity requirement $19M
Mezzanine Investments
Purchase
Option Price
Loan
Balance
Point Street Apartments
Baltimore, MD
Multifamily 289 units 15% 1Q16 1Q18 2Q19 $98,000 $22,000 Option to purchase
88% upon completion
$27M Mezzanine financing by AHH,
earning 8% interest income
Annapolis Junction
Annapolis Junction, MD
Multifamily 416 units 32% 2Q16 3Q17 1Q19 106,000 43,000 Option to purchase
88% upon completion
$46M Mezzanine financing by AHH,
earning 10% interest income
Total Mezzanine Investment $204,000 $65,000
18Acquisitions & Dispositions
$ in thousands
(1) Contractual purchase price
(2) Value of OP Units/Stock at issuance
(3) Anchor tenant vacated 12/31/16, 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 Anchor Tenants
Parkway Centre Moultrie, GA 61,200 $11,200 - $1,624 6.4% 1Q18 Publix
Indian Lakes Virginia Beach, VA 71,020 14,700 - - 7.1% 1Q18 Harris Teeter, Wawa
Wendover Village Outparcel Greensboro, NC 35,895 14,300 $7,900 - 7.7% 3Q17 Panera, Rooms to Go Kids
Renaissance Square Davidson, NC 80,468 17,085 - - 7.1% 4Q16 Harris Teeter
Columbus Village II Virginia Beach, VA 92,061 26,200 - 26,200 5.6% 4Q16 Regal, Bed Bath & Beyond
Southshore Shops Midlothian, VA 40,333 9,160 - 2,475 7.8% 3Q16 Buffalo Wild Wings
Southgate Square Colonial Heights, VA 220,131 38,585 - 17,485 7.3% 2Q16 PetSmart, Michael's, Burlington
Retail Portfolio (11 properties) Mid-Atlantic 1,082,681 170,500 87,000 - 7.2% 1Q16 Harris Teeter, Bed Bath & Beyond
Providence Plaza Charlotte, NC 103,118 26,200 14,000 - 7.3% 3Q15 Chipotle
Socastee Commons Myrtle Beach, SC 57,573 8,600 3,600 - 7.3% 3Q15 BiLo
Columbus Village Virginia Beach, VA 65,746 21,025 - 14,025 6.4% 3Q15 Barnes & Noble
Perry Hall Marketplace &
Stone House Square
Maryland 182,949 39,555 15,200 4,155 7.4% 2Q15 Safeway & Weis Markets
Dimmock Square Colonial Heights, VA 106,166 19,662 - 9,662 7.3% 3Q14 Old Navy, Best Buy, Pier 1
Total/Weighted Average 2,199,341 $416,772 $127,700 $75,626 7.1%
DISPOSITIONS
Properties Location
Square
Feet/Units Sale Price Cash Proceeds Gain on Sale
Cash Cap
Rate Disposition Date Anchor Tenants
Commonwealth of VA Buildings Virginia Beach & Chesapeake, VA 47,366 $13,150 $8,000 $4,194 6.8% 3Q17 Commonwealth of VA
Greentree Wawa Chesapeake, VA 5,088 4,600 4,400 3,396 5.0% 1Q17 Wawa
Oyster Point Newport News, VA 100,139 6,500 - 3,793 16.4% (3) 3Q16 GSA
Non-Core Retail Portfolio Various 174,758 12,850 12,600 (27) 7.1% 2Q16 - 3Q16 Kroger, Family Dollar
Richmond Tower Richmond, VA 206,969 78,000 77,000 26,674 7.9% 1Q16 Williams Mullen
Oceaneering Chesapeake, VA 154,000 30,000 10,000 4,987 6.7% 4Q15 Oceaneering International
Whetstone Apartments Durham, NC 203 units 35,625 17,600 7,210 5.7% 2Q15 NA
Sentara Williamsburg Williamsburg, VA 49,200 15,450 15,200 6,197 6.3% 1Q15 Sentara
Virginia Natural Gas Virginia Beach, VA 31,000 8,900 7,400 2,211 6.3% 4Q14 Virginia Natural Gas
Total/Weighted Average 768,520 sf/
203 units
$205,075 $152,200 $58,635 7.2%
19Construction Business Summary
$ in thousands
Gross Profit Summary
Q4 2017
Trailing 12
Months
Revenue $32,643 $194,034
Expense (32,002) (186,590)
Gross Profit $641 $7,444
(Unaudited)
Location
Total Contract
Value
Work in Place as
of 12/31/2017 Backlog
Estimated Date
of Completion
Highlighted Projects
Point Street Apartments Baltimore, MD $73,738 $65,057 $8,681 1Q 2018
Durham City Center Durham, NC 64,763 47,191 17,572 3Q 2018
Dinwiddie Municipal Complex Dinwiddie, VA 23,636 9,307 14,329 2Q 2019
Sub Total $162,137 $121,555 $40,582
All Other Projects $450,383 $441,798 $8,585
Total $612,520 $563,353 $49,167
20
(1) See page 30 for Same Store vs. Non – Same Store Properties
Same Store NOI by Segment
$ in thousands
(Reconciliation to GAAP located in appendix pg. 31)
Three months ended Year ended
12/31/2017 12/31/2016 $ Change % Change 12/31/2017 12/31/2016 $ Change % Change
Office(1) (Unaudited) (Unaudited)
Revenue $3,357 $3,513 ($156) -4.4% $13,615 $14,323 ($708) -4.9%
Expenses 1,350 1,288 62 4.8% 5,435 5,273 162 3.1%
Net Operating Income 2,007 2,225 (218) -9.8% 8,180 9,050 (870) -9.6%
Retail(1)
Revenue 14,411 14,085 326 2.3% 37,707 37,154 553 1.5%
Expenses 3,767 3,506 261 7.4% 10,757 10,241 516 5.0%
Net Operating Income 10,644 10,579 65 0.6% 26,950 26,913 37 0.1%
Multifamily(1)
Revenue 4,662 4,840 (178) -3.7% 18,892 19,194 (302) -1.6%
Expenses 2,282 2,069 213 10.3% 8,876 8,410 466 5.5%
Net Operating Income 2,380 2,771 (391) -14.1% 10,016 10,784 (768) -7.1%
Same Store Net Operating Income (NOI) $15,031 $15,575 ($544) -3.5% $45,146 $46,747 ($1,601) -3.4%
Net effect of straight-line rents 132 38 94 742 216 526
Amortization of lease incentives and above (below) market rents (82) (85) 3 456 482 (26)
Same store portfolio NOI, cash basis $15,081 $15,528 ($447) -2.9% $46,344 $47,445 ($1,101) -2.3%
NOI, Cash Basis:
Office $2,146 $2,379 ($233) -9.8% $8,863 $9,218 ($355) -3.9%
Retail 10,551 10,371 180 1.7% 27,433 27,403 30 0.1%
Multifamily 2,384 2,778 (394) -14.2% 10,048 10,824 (776) -7.2%
$15,081 $15,528 ($447) -2.9% $46,344 $47,445 ($1,101) -2.3%
NOI:
Office $2,007 $2,225 ($218) -9.8% $8,180 $9,050 ($870) -9.6%
Retail 10,644 10,579 65 0.6% 26,950 26,913 37 0.1%
Multifamily 2,380 2,771 (391) -14.1% 10,016 10,784 (768) -7.1%
$15,031 $15,575 ($544) -3.5% $45,146 $46,747 ($1,601) -3.4%
21Top 10 Tenants by Annualized Base Rent
$ in thousands
As of December 31, 2017
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 $ 2,537 12.7% 2.7%
Hampton University 2 2023 - 2024 1,054 5.3% 1.1%
Mythics 1 2030 1,052 5.3% 1.1%
Pender & Coward 1 2030 860 4.3% 0.9%
Kimley-Horn 1 2027 859 4.3% 0.9%
Troutman Sanders 2 2025 838 4.2% 0.9%
The Art Institute 3 2019 835 4.2% 0.9%
City of Va Beach Development Authority 1 2024 722 3.6% 0.8%
Cherry Bekaert 1 2022 708 3.5% 0.7%
Williams Mullen 1 2028 643 3.2% 0.7%
Top 10 Total $ 10,108 50.6% 10.7%
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 2018 - 2036 $ 5,831 11.0% 6.1%
Home Depot 2 2019 - 2023 2,237 4.2% 2.4%
Regal Cinemas 2 2019 - 2022 1,679 3.2% 1.8%
Bed, Bath, & Beyond 4 2020 - 2024 1,677 3.2% 1.8%
PetSmart 5 2020 - 2022 1,438 2.7% 1.5%
Food Lion 3 2019 - 2022 1,291 2.4% 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 1.5% 0.8%
Ross Dress for Less 2 2020 - 2022 762 1.4% 0.8%
Top 10 Total $ 17,378 32.8% 18.4%
22Office 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 2017 6 38,387 2 2,582 24.87 23.93 3.9% 24.38 25.88 -5.8% 4.90 617,475 $16.09
Q3 2017 2 10,454 - - 25.06 24.82 1.0% 25.21 25.46 -1.0% 4.24 48,791 4.67
Q2 2017 2 13,420 - - 27.94 27.22 2.7% 27.38 28.42 -3.7% 7.21 153,873 11.47
Q1 2017 2 7,782 2 4,752 31.61 25.72 22.9% 32.30 29.25 10.4% 1.00 23,314 3.00
New Lease Summary(1)
Quarter
Number of
Leases
Signed
Net rentable
SF Signed
Cash
Contractual
Rent per SF
Weighted
Average Lease
Term (yrs) TI & LC
TI & LC
per SF
Q4 2017 2 7,676 24.86$ 4.60 $278,339 $36.26
Q3 2017 1 2,690 24.50 5.00 95,630 35.55
Q2 2017 2 7,541 24.39 4.36 259,901 34.47
Q1 2017 3 13,491 23.92 4.53 390,548 28.95
23Office Lease Expirations
(1) Includes new leases from properties in development
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
-
50,000
100,000
150,000
200,000
Leased Square Feet % ABR of Office Portfolio
Year of Lease Expiration
Number of
Leases
Expiring
Square Footage
of Leases
Expiring(1)
% Portfolio
Net Rentable
Square Feet
Annualized Base
Rent
% of Portfolio
Annualized
Base Rent
Annualized Base
Rent per Leased
Square Foot
Available - 80,388 10.1% -$ - -$
M-T-M 3 633 0.1% 20,400 0.1% 32.23
2018 11 39,734 5.0% 1,276,658 6.4% 32.13
2019 14 84,418 10.6% 2,104,581 10.5% 24.93
2020 7 26,537 3.3% 742,047 3.7% 27.96
2021 8 46,798 5.9% 1,310,134 6.5% 28.00
2022 9 73,800 9.2% 2,059,496 10.3% 27.91
2023 7 67,132 8.4% 1,737,304 8.7% 25.88
2024 4 70,617 8.8% 2,063,738 10.3% 29.22
2025 6 66,487 8.3% 1,883,863 9.4% 28.33
2026 3 15,140 1.9% 329,509 1.6% 21.76
2027 3 49,081 6.1% 1,395,538 7.0% 28.43
2028 1 22,950 2.9% 642,600 3.2% 28.00
Thereafter 3 156,140 19.4% 4,449,076 22.2% 28.49
Total / Weighted Average 79 799,855 100.0% $20,014,944 100.0% $27.82
24Retail 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 2017 16 109,639 13 35,575 13.88 13.31 4.3% 13.70 13.63 0.5% 3.81 64,673 $0.59
Q3 2017 10 39,610 5 9,695 17.59 16.19 8.6% 17.41 16.37 6.4% 3.98 126,239 3.19
Q2 2017 14 73,961 7 14,087 19.46 18.75 3.8% 19.60 18.85 3.9% 3.78 93,362 1.26
Q1 2017 13 121,282 2 3,174 16.46 15.37 7.1% 16.42 15.51 5.9% 5.95 461,039 3.80
New Lease Summary(1)
Quarter
Number of
Leases
Signed
Net rentable
SF Signed
Cash
Contractual
Rent per SF
Weighted
Average Lease
Term (yrs) TI & LC
TI & LC
per SF
Q4 2017 4 12,533 17.02$ 8.33 $181,649 $14.49
Q3 2017 4 7,024 15.72 4.85 68,422 9.74
Q2 2017 9 14,315 20.66 7.65 376,170 26.28
Q1 2017 6 13,698 22.91 5.70 204,418 14.92
25Retail Lease Expirations
(1) Includes new leases from properties in development
Year of Lease Expiration
Number of
Leases
Expiring
Square Footage
of Leases
Expiring(1)
% Portfolio
Net Rentable
Square Feet
Annualized Base
Rent
% of Portfolio
Annualized
Base Rent
Annualized Base
Rent per Leased
Square Foot
Available - 153,263 4.2% -$ - -$
M-T-M 4 4,728 0.1% 68,990 0.1% 14.59
2018 60 183,508 5.1% 3,425,837 6.5% 18.67
2019 87 588,052 16.2% 9,211,040 17.4% 15.66
2020 73 575,303 15.9% 8,012,634 15.2% 13.93
2021 56 283,832 7.8% 5,116,496 9.7% 18.03
2022 51 409,682 11.3% 6,591,039 12.5% 16.09
2023 27 346,372 9.6% 4,626,776 8.8% 13.36
2024 18 168,018 4.6% 2,667,454 5.1% 15.88
2025 17 226,427 6.2% 2,404,463 4.6% 10.62
2026 19 166,665 4.6% 2,882,771 5.5% 17.30
2027 14 105,286 2.9% 2,283,629 4.3% 21.69
2028 8 171,136 4.7% 2,038,095 3.9% 11.91
Thereafter 11 242,200 6.7% 3,467,475 6.6% 14.32
Total / Weighted Average 445 3,624,472 100.0% 52,796,699$ 100.0% $15.21
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
20.0%
-
100,000
200,000
300,000
400,000
500,000
600,000
700,000
Leased Square Feet % ABR of Retail Portfolio
26
Appendix
Definitions & Reconciliations
27Definitions
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.
28Definitions
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.
29Definitions
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.
30Same 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 Sandbridge Commons X X
Alexander Pointe X X Socastee Commons X X
Bermuda Crossroads X X South Retail X X
Broad Creek Shopping Center X X South Square X X
Brooks Crossing (Retail) X X Southgate Square X X
Broadmoor Plaza X X Southshore Shops X X
Columbus Village X X Stone House Square X X
Columbus Village II X X Studio 56 Retail X X
Commerce Street Retail X X Tyre Neck Harris Teeter X X
Courthouse 7-Eleven X X Waynesboro Commons X X
Dick’s at Town Center X X Wendover Village X X
Dimmock Square X X Wendover Village Outparcel X X
Greentree Shopping Center X X Office Properties
Fountain Plaza Retail X X 4525 Main Street X X
Gainsborough Square X X Armada Hoffler Tower X X
Hanbury Village X X Commonwealth of VA - Chesapeake X X
Harper Hill Commons X X Commonwealth of VA - Virginia Beach X X
Harrisonburg Regal X X One Columbus X X
Lightfoot Marketplace X X Two Columbus X X
North Hampton Market X X Multifamily Properties
North Point Center X X Encore Apartments X X
Oakland Marketplace X X Liberty Apartments X X
Parkway Marketplace X X Smith’s Landing X X
Patterson Place X X The Cosmopolitan X X
Perry Hall Marketplace X X Johns Hopkins Village X X
Providence Plaza X X
Renaissance Square X X
Year Ended
12/31/2017 to 2016
Three Months Ended
12/31/2017 to 2016
Three Months Ended
12/31/2017 to 2016
Year Ended
12/31/2017 to 2016
31Reconciliation to Property Portfolio NOI
$ in thousands
(1) See page 30 for the Same Store vs. Non-Same Store properties
Three months ended 12/31 Year ended 12/31
2017 2016 2017 2016
Office Same Store(1)
Rental revenues $3,357 $3,513 $13,615 $14,323
Property expenses 1,350 1,288 5,435 5,273
NOI 2,007 2,225 8,180 9,050
Non-Same Store NOI 949 904 3,685 4,319
Segment NOI $2,956 $3,129 $11,865 $13,369
Retail Same Store(1)
Rental revenues $14,411 $14,085 $37,707 $37,154
Property expenses 3,767 3,506 10,757 10,241
NOI 10,644 10,579 26,950 26,913
Non-Same Store NOI 1,222 708 19,750 15,087
Segment NOI $11,866 $11,287 $46,700 $42,000
Multifamily Same Store(1)
Rental revenues $4,662 $4,840 $18,892 $19,194
Property expenses 2,282 2,069 8,876 8,410
NOI 2,380 2,771 10,016 10,784
Non-Same Store NOI 1,368 1,117 4,206 1,669
Segment NOI $3,748 $3,888 $14,222 $12,453
Total Property Portfolio NOI $18,570 $18,304 $72,787 $67,822
32Reconciliation to Property Portfolio NOI
$ in thousands
Three months ended 12/31/2017
Diversified Portfolio Office Retail Multifamily Total
NOI - Cash Basis $0 $9,506 $2,284 $11,790
Net effect of straight-line rents - 22 33 55
Amortization of lease incentives and (above) below market rents - 176 (13) 163
NOI $0 $9,704 $2,304 $12,008
Town Center of Virginia Beach Office Retail Multifamily Total
NOI - Cash Basis $3,117 $2,048 $1,437 $6,602
Net effect of straight-line rents 129 (32) 7 104
Amortization of lease incentives and (above) below market rents (73) (50) - (123)
Elimination f AHH rent (217) (96) - (313)
NOI $2,956 $1,870 $1,444 $6,270
NOI Office Retail Multifamily Total
Diversified Portfolio $0 $9,704 $2,304 $12,008
Town Center of Virginia Beach 2,956 1,870 1,444 6,270
Unstabilized Properties - 292 - 292
Total Property Portfolio NOI $2,956 $11,866 $3,748 $18,570
33Reconciliation to GAAP Net Income
$ in thousands
Office Retail Multifamily
Total Rental
Properties
General Contracting &
Real Estate Services Total
Segment revenues 4,779$ 16,021$ 6,854$ 27,654$ 32,643$ 60,297$
Segment expenses 1,823 4,155 3,106 9,084 32,002 41,086
Net operating income 2,956$ 11,866$ 3,748$ 18,570$ 641$ 19,211$
Depreciation and amortization (9,303)
General and administrative expenses (2,673)
Acquisition, development and other pursuit costs (171)
Impairment charges (60)
Interest income 2,111
Interest expense (4,157)
Loss on extinguishment of debt (50)
Change in fair value of interest rate derivatives 827
Other income (loss) benefit (23)
Income tax benefit (provision) 56
Net income 5,768$
Office Retail Multifamily
Total Rental
Properties
General Contracting &
Real Estate Services Total
Segment revenues 19,207$ 63,109$ 26,421$ 108,737$ 194,034$ 302,771$
Segment expenses 7,342 16,409 12,199 35,950 186,590 222,540
Net operating income 11,865$ 46,700$ 14,222$ 72,787$ 7,444$ 80,231$
Depreciation and amortization (37,321)
General and administrative expenses (10,435)
Acquisition, development and other pursuit costs (648)
Impairment charges (110)
Interest income 7,077
Interest expense (17,439)
Loss on extinguishment of debt (50)
Gain on real estate dispositions 8,087
Change in fair value of interest rate derivatives 1,127
Other income 131
Income tax benefit (provision) (725)
Net income 29,925$
Three months ended 12/31/2017
Year ended 12/31/2017
1
2018 | Guidance Presentation
2FORWARD LOOKING STATEMENTS
This presentation should be read in conjunction with the unaudited condensed consolidated financial statements appearing in our press
release dated February 6, 2018, which has been furnished as Exhibit 99.1 to our Form 8-K filed on February 6, 2018. The Company
makes statements that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (set
forth in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of
1934, as amended (the “Exchange Act”)). In particular, statements pertaining to our capital resources, portfolio performance and
results of operations contain forward-looking statements. Likewise, all of our statements regarding our 2018 outlook and related
assumptions, anticipated growth in our funds from operations, normalized funds from operations, adjusted funds from operations,
funds available for distribution and net operating income are forward-looking statements. You can identify forward-looking statements
by the use of forward-looking terminology such as “believes,” “expects,” “may,” “will,” “should,” “seeks,” “intends,” “plans,” “estimates”
or “anticipates” or the negative of these words and phrases or similar words or phrases which are predictions of or indicate future
events or trends and which do not relate solely to historical matters. You can also identify forward-looking statements by discussions of
strategy, plans or intentions.
Forward-looking statements involve numerous risks and uncertainties and you should not rely on them as predictions of future events.
Forward-looking statements depend on assumptions, data or methods which may be incorrect or imprecise and the Company may not
be able to realize them. The Company does not guarantee that the transactions and events described will happen as described (or that
they will happen at all). For further discussion of risk factors and other events that could impact our future results, please refer to the
section entitled “Risk Factors” in our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission (the
“SEC), and the documents subsequently filed by us from time to time with the SEC.
The Company does not provide a reconciliation for its guidance range of Normalized FFO per diluted share to net income per diluted
share, the most directly comparable forward-looking GAAP financial measure, because it is unable to provide a meaningful or accurate
estimate of reconciling items and the information is not available without unreasonable effort as a result of the inherent difficulty of
forecasting the timing and/or amounts of various items that would impact net income per diluted share. For the same reasons, the
Company is unable to address the probable significance of the unavailable information and believes that providing a reconciliation for
its guidance range of Normalized FFO per diluted share would imply a degree of precision for its forward-looking net income per diluted
share that could be misleading to investors.
3
Guidance Assumptions
• Raising $55 million through the ATM program for a full year
weighted average share count of 64.5 million
• Interest expense is calculated based on the Forward LIBOR Curve,
which forecasts rates rising to 2.2% by year end
• Acquisition of four retail centers
• Disposition of a newly constructed distribution center in the fourth
quarter of 2018
2018 OUTLOOK & ASSUMPTIONSOutlook Low High
Total NOI $80.7M $81.4M
Construction Segment Gross Profit $4.4M $7.5M
G&A expenses $10.7M $11.0M
Interest income $9.0M $9.5M
Interest expense $19.7M $20.3M
Normalized FFO per diluted share $1.00 $1.05
In millions except per share
4NOI GROWTH SINCE IPO
$20
$30
$40
$50
$60
$70
$80
$90
2013 2014 2015 2016 2017 2018
Est.
M
ill
io
n
s
Operating Portfolio NOI Development NOI Acquisition NOI
Estimate 2018 NOI to Increase 10% Over Prior Year
5EVOLVING PORTFOLIO NOI COMPOSITION
45%
10%
15%
16%
15%
6%
16%
14%
15%
49%
Construction
4%
Multifamily
25%
Office
12%
Mixed Use
31%
Retail
29%
2017 2018 Estimated
Projected Operating Portfolio with
Stabilized Pipeline
Center Location Featured Tenants
Indian Lakes Virginia Beach, VA Harris Teeter/Wawa
Parkway Centre Moultrie, GA Publix
Two Potential
Acquisitions
South Carolina Lowes Foods
37%
12%
32%
5%
15%
2018 Closed and Potential Acquisitions
Retail Entertainment &
Mixed Use Retail
Multifamily Office Construction
6CONSTRUCTION BUSINESS SUMMARY
$0
$1
$2
$3
$4
$5
$6
$7
$8
2013 2014 2015 2016 2017 2018
Est. ⁽¹⁾
Mil
lion
s
Operating Gross Profit Potential Profit on Sale of Fortune 50 Distribution Center - Net of Taxes
(1) 2018 Operating Gross Profit includes market fee for distribution center construction & development
7PROJECTS DELIVERED SINCE IPO
PROJECT NAME PRODUCT TYPE SF OR UNITS DELIVERY INVESTMENT
4525 Main Street
Virginia Beach, VA
Office 239,000 SF 3Q14 $53M
Encore Apartments
Virginia Beach, VA
Multifamily 286 Units 3Q14 $32M
Whetstone Apartments(1)
Durham, NC
Multifamily 203 Units 3Q14 $29M
Greentree
Chesapeake, VA
Retail 18,000 SF 4Q14 $6M
Oceaneering(1)
Chesapeake, VA
Office 155,000 SF 1Q15 $25M
Commonwealth of Virginia (1)
Chesapeake, VA
Office 36,000 SF 1Q15 $7M
Commonwealth of Virginia (1)
Virginia Beach, VA
Office 11,000 SF 1Q15 $3M
Sandbridge Commons
Virginia Beach, VA
Retail 70,000 SF 1Q16 $13M
Lightfoot Marketplace(2)(3)
Williamsburg, VA
Retail 109,000 SF 3Q16 $24M
Brooks Crossing(2)(3)
Newport News, VA
Retail 18,000 SF 3Q16 $3M
Johns Hopkins Village
Baltimore, MD
Multifamily 157 Units 3Q16 $69M
TOTAL INVESTMENT
656,000 SF/
646 Units
$264M
MANAGEMENT ESTIMATED VALUE CREATION OF APPROXIMATELY 20%
AHH TYPICALLY DEVELOPS
$150-200 million
EVERY 18-24 MONTHS
(1) Realized value of disposed properties created from the wholesale to retail spread
(2) Majority Interest in Joint Venture
(3) AHH earns a preferred return on equity prior to any distributions to JV Partners
8
Current Development Pipeline
Development Projects(1) PRODUCT TYPE DELIVERY(1) INVESTMENT(2)
Annapolis Junction(3)
Annapolis Junction, MD
Multifamily 3Q17 $106M
Point Street Apartments(3)
Baltimore, MD
Multifamily 1Q18 $98M
One City Center(5)
Durham, NC
Mixed-Use 3Q18 $44M
Town Center Phase VI
Virginia Beach, VA
Mixed-Use 3Q18 $43M
Harding Place(4)(6)
Charlotte, NC
Multifamily 3Q18 $47M
Market at Mill Creek(4)(6)
Mt. Pleasant, SC
Retail 1Q19 $23M
Brooks Crossing(4)(6)
Newport News, VA
Office 1Q19 $22M
King Street(4)
Charleston, SC
Multifamily 3Q19 $48M
Meeting Street(4)
Charleston, SC
Multifamily 3Q19 $53M
TOTAL INVESTMENT ~ $484M
MANAGEMENT ESTIMATED EQUITY CREATION OF APPROXIMATELY 20%
(1) Timing and investment amounts are estimates and subject to change as
the development process demands.
YEAR DELIVERED INVESTMENT
2014 $120M
2015 $48M
2016 $96M
2018-2019(1) $484M(1)
TOTAL INVESTMENT ~ $748M
MANAGEMENT ESTIMATED EQUITY CREATION OF APPROXIMATELY 20%
Total Estimated Value Creation
(1) For ownership structure, see page 17 of the 4Q17 Supplemental package
(2) Timing and investment amounts are estimates and subject to change as the development
process demands.
(3) Mezzanine Investments with 88% purchase option
(4) Majority Interest in Joint Venture
(5) Minority Interest in Joint Venture
(6) AHH earns a preferred return on equity prior to any distributions to JV Partners
PROJECTS UNDER DEVELOPMENT
92018 OUTLOOK & ASSUMPTIONS
Guidance Assumptions
Raising $55 million through the ATM program for a full year weighted average share count of 64.5 million
•
Interest expense is calculated based on the Forward LIBOR Curve, which forecasts rates rising to 2.2% by year end
•
Acquisition of four retail centers
•
Disposition of a newly constructed distribution center in the fourth quarter of 2018
Outlook Low High
Total NOI $80.7M $81.4M
Construction Segment Gross Profit $4.4M $7.5M
G&A expenses $10.7M $11.0M
Interest income $9.0M $9.5M
Interest expense $19.7M $20.3M
Normalized FFO per diluted share $1.00 $1.05