Armada Hoffler Properties, Inc. (NYSE:AHH) Q2 2023 Results Conference Call August 3, 2023 8:30 AM ET Company Participants Chelsea Forrest - Director, Corporate Communications & IR Lou Haddad - CEO Matthew Barnes-Smith - CFO Shawn Tibbetts - COO Conference Call Participants Rob Stevenson - Janney Wes Golladay - Baird Peter Abramowitz - Jefferies Chris Sakai - Singular Research Operator Good morning, ladies and gentlemen, and welcome to the Armada Hoffler Second Quarter 2023 Earnings Conference Call. [Operato ...

Armada Hoffler Properties, Inc. (NYSE:AHH) Q1 2023 Earnings Conference Call May 9, 2023 8:30 AM ET Company Participants Chelsea Forrest - Director of Corporate Communications and Investor Relations Louis Haddad - President and Chief Executive Officer Shawn Tibbetts - Chief Operating Officer Matthew Barnes-Smith - Chief Financial Officer Conference Call Participants Robert Stevenson - Janney Montgomery Scott LLC Wesley Golladay - Robert W. Baird & Co. Peter Abramowitz - Jefferies LLC Chris Sakai - Singular R ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM10-Q ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-35908 ARMADA HOFFLER PROPERTIES, INC. (Exact name of registrant as specified in its charter) Maryland 46-1214914 (State or other jurisdicti ...

PART I [Business](index=7&type=section&id=Item%201.%20Business%2E) Armada Hoffler Properties, Inc. is a full-service REIT focused on developing and managing properties, reporting significant 2022 growth in net income and FFO - The company operates as a full-service real estate firm focusing on office, retail, and multifamily properties, also providing general contracting services[25](index=25&type=chunk) - The company elected REIT taxation status for U.S. federal income tax purposes starting December 31, 2013[26](index=26&type=chunk) FY 2022 Key Financial and Operational Highlights (vs. FY 2021) (in millions) | Metric | FY 2022 | FY 2021 | % Change | | :--- | :--- | :--- | :--- | | **Net Income Attributable to Common Stockholders** | $82.5M | $13.9M | +493.5% | | **Diluted EPS** | $0.93 | $0.17 | +447.1% | | **FFO** | $106.6M | $85.4M | +24.8% | | **Diluted FFO per Share** | $1.21 | $1.05 | +15.2% | | **Normalized FFO** | $107.2M | $87.6M | +22.4% | | **Diluted Normalized FFO per Share** | $1.22 | $1.08 | +13.0% | | **Property Segment NOI** | $146.5M | $123.8M | +18.3% | | **Same Store NOI** | $108.7M | $102.9M | +5.6% | | **Stabilized Portfolio Occupancy (Year-End)** | 97.0% | 96.7% | +0.3 bps | - Key 2022 strategic activities included acquiring the Constellation Energy Building, disposing of **$177 million** in noncore assets, and amending the credit facility to **$550 million**[29](index=29&type=chunk) [Our Properties](index=11&type=section&id=Our%20Properties) As of December 31, 2022, the stabilized portfolio maintained high occupancy across its retail, office, and multifamily segments Stabilized Portfolio Overview as of December 31, 2022 | Property Type | Net Rentable Square Feet / Units | Occupancy | Annualized Base Rent (ABR) / Annualized Quarterly Rent (AQR) | | :--- | :--- | :--- | :--- | | **Retail** | 3,916,001 sq ft | 97.9% | $70,925,783 | | **Office** | 2,111,923 sq ft | 96.7% | $61,140,833 | | **Multifamily** | 2,254 units | 96.1% | $50,125,908 | [Lease Expirations and Tenant Diversification](index=13&type=section&id=Lease%20Expirations%20and%20Tenant%20Diversification) The company maintains a manageable lease expiration profile with diversified tenants, where the top 20 account for 29.1% of ABR/AQR - The office portfolio has **2.9%** of net rentable square feet expiring in 2023 and **6.7%** in 2024[39](index=39&type=chunk) - The retail portfolio has **4.7%** of net rentable square feet expiring in 2023 and **10.7%** in 2024[40](index=40&type=chunk) - The top 20 tenants represent **29.1%** of total ABR/AQR, with Constellation Energy Group as the largest at **8.0%** with a 2036 lease expiration[42](index=42&type=chunk) [Development and Other Investments](index=14&type=section&id=Development%20and%20Other%20Investments) The company's development pipeline includes mixed-use and multifamily projects, alongside significant equity method investments and mezzanine loans - The development pipeline includes Southern Post, a **$119 million** mixed-use project, and Chronicle Mill, a **$60 million** multifamily project **93% leased** by year-end 2022[44](index=44&type=chunk)[46](index=46&type=chunk)[47](index=47&type=chunk) - Significant equity method investments in Baltimore's Harbor Point include **50%** ownership in T. Rowe Price Global HQ and **90%** in Parcel 4 Mixed-Use, with estimated costs of **$264 million** and **$226 million** respectively[48](index=48&type=chunk)[58](index=58&type=chunk)[59](index=59&type=chunk) - A mezzanine loan on The Interlock in Atlanta had an **$86.6 million** balance as of December 31, 2022, generating **$9.9 million** in interest income[49](index=49&type=chunk)[50](index=50&type=chunk) [Acquisitions and Dispositions](index=16&type=section&id=Acquisitions%20and%20Dispositions) In 2022, the company recycled capital through key acquisitions, including the Constellation Energy Building, and dispositions totaling **$259.8 million** - Acquired **79%** membership and **11%** economic interest in the Constellation Energy Building for approximately **$92.2 million** cash and a **$12.8 million** seller loan[60](index=60&type=chunk) - Acquired Pembroke Square, a **124,000 sq ft** grocery-anchored shopping center, for **$26.5 million** in cash[63](index=63&type=chunk) 2022 Property Dispositions | Property | Sales Price (in millions) | | :--- | :--- | | Hoffler Place | $43.1 | | Summit Place | $37.8 | | North Pointe Outparcels | $23.9 | | The Residences at Annapolis Junction | $150.0 | | Sandbridge Commons Outparcels | $3.5 | | Gainesville Apartments - Retail Portion | $1.5 | | **Total** | **$259.8** | [Risk Factors](index=21&type=section&id=Item%201A.%20Risk%20Factors%2E) The company faces business, operational, and industry risks, including economic downturns, geographic concentration, substantial debt, and REIT status maintenance - **Business Risks:** Exposure to adverse economic conditions, development/acquisition challenges, and substantial indebtedness of **$1.1 billion** as of December 31, 2022[90](index=90&type=chunk)[94](index=94&type=chunk)[101](index=101&type=chunk) - **Operational Risks:** Geographic concentration in Virginia (**46% of NOI**), Maryland (**28% of NOI**), and North Carolina (**15% of NOI**) creates susceptibility to regional economic downturns[99](index=99&type=chunk)[146](index=146&type=chunk) - **Real Estate Industry Risks:** Subject to illiquidity of investments, potential environmental liabilities, and ADA compliance costs[155](index=155&type=chunk)[158](index=158&type=chunk)[161](index=161&type=chunk) - **Organizational and REIT Risks:** Failure to maintain REIT qualification, potential conflicts of interest from executive ownership, and limitations on property sales due to tax protection agreements[172](index=172&type=chunk)[188](index=188&type=chunk)[160](index=160&type=chunk) [Unresolved Staff Comments](index=46&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments%2E) The company reports no unresolved staff comments from the SEC - None [Properties](index=46&type=section&id=Item%202.%20Properties%2E) Information regarding the company's properties is incorporated by reference from the detailed descriptions provided in Item 1 of this report - Information for this item is incorporated by reference from "Our Properties" and "Development Pipeline" in Item 1[217](index=217&type=chunk) [Legal Proceedings](index=46&type=section&id=Item%203.%20Legal%20Proceedings%2E) The company is not currently subject to any material litigation outside of routine matters arising in the ordinary course of business - The company is not subject to any material litigation beyond routine matters in the ordinary course of business[218](index=218&type=chunk) [Mine Safety Disclosures](index=46&type=section&id=Item%204.%20Mine%20Safety%20Disclosures%2E) This item is not applicable to the company's operations - Not Applicable[219](index=219&type=chunk) PART II [Market For Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=47&type=section&id=Item%205.%20Market%20For%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities%2E) The company's common and preferred stock trade on the NYSE, with **$0.72** per common share in dividends declared for 2022 - Common Stock trades on the NYSE under the symbol **"AHH"**[222](index=222&type=chunk) - Series A Preferred Stock trades on the NYSE under the symbol **"AHHPrA"**[222](index=222&type=chunk) - Declared cash dividends were **$0.72** per share for the year ended December 31, 2022[225](index=225&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=48&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations%2E) Management attributes significant 2022 revenue and operating income growth to acquisitions, increased occupancy, and general contracting, with strong FFO and liquidity improvements Consolidated Results of Operations (in thousands) | Metric | 2022 | 2021 | Change | | :--- | :--- | :--- | :--- | | **Total Revenues** | $454,153 | $284,076 | $170,077 | | **Operating Income** | $117,434 | $40,695 | $76,739 | | **Net Income** | $99,953 | $25,455 | $74,498 | | **Net Income Attributable to Common Stockholders** | $82,457 | $13,912 | $68,545 | - Total revenues increased due to a **$27.2 million** rise in rental revenues from the Constellation Office acquisition and a **$142.9 million** increase in general contracting revenues[273](index=273&type=chunk)[274](index=274&type=chunk) - Liquidity is supported by **$48.1 million** cash, **$233.5 million** credit facility availability, and **$205.0 million** ATM Program availability as of December 31, 2022[290](index=290&type=chunk)[293](index=293&type=chunk) FFO and Normalized FFO Reconciliation (in thousands) | Metric | 2022 | 2021 | | :--- | :--- | :--- | | **Net Income Attributable to Common Stockholders** | $82,457 | $13,912 | | **FFO Attributable to Common Stockholders** | $106,645 | $85,350 | | **Normalized FFO Attributable to Common Stockholders** | $107,158 | $87,555 | [Segment Results of Operations](index=51&type=section&id=Segment%20Results%20of%20Operations) In 2022, office and retail segments saw strong NOI growth, while multifamily NOI decreased due to dispositions, and general contracting gross profit doubled Segment Net Operating Income (NOI) / Gross Profit (in thousands) | Segment | 2022 | 2021 | % Change | | :--- | :--- | :--- | :--- | | **Office** | $47,701 | $28,839 | +65.4% | | **Retail** | $63,702 | $57,644 | +10.5% | | **Multifamily** | $35,092 | $37,311 | -5.9% | | **General Contracting (Gross Profit)** | $7,701 | $3,836 | +100.8% | - Office same-store NOI was relatively flat, decreasing slightly by **$73,000**, with overall segment growth driven by acquisitions[257](index=257&type=chunk) - Retail same-store NOI increased by **$3.4 million** (**6.6%**) due to increased occupancy in the same-store portfolio[262](index=262&type=chunk)[264](index=264&type=chunk) - Multifamily same-store NOI increased by **$2.5 million** (**9.9%**) primarily due to higher rental rates across multiple properties[267](index=267&type=chunk)[268](index=268&type=chunk) - Construction backlog significantly increased to **$665.6 million** at year-end 2022 from **$215.5 million** at year-end 2021, driven by new contracts[269](index=269&type=chunk)[270](index=270&type=chunk) [Liquidity and Capital Resources](index=57&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity with **$48.1 million** cash and **$233.5 million** credit facility availability, supported by amended credit facilities and equity raises - As of December 31, 2022, the company had **$48.1 million** in unrestricted cash and **$233.5 million** available under its credit facility[290](index=290&type=chunk) - In August 2022, the unsecured credit facility was amended, increasing total capacity to **$550 million** and extending maturities to 2027/2028[295](index=295&type=chunk) - In December 2022, the company entered a new **$100 million** unsecured term loan facility maturing in 2027[304](index=304&type=chunk) Consolidated Indebtedness as of December 31, 2022 (in thousands) | Debt Type | Principal Balance | | :--- | :--- | | Total Secured Debt | $612,132 | | Total Unsecured Debt | $461,000 | | **Total Principal Balances** | **$1,073,132** | [Quantitative and Qualitative Disclosures About Market Risk](index=66&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk%2E) The company's primary market risk is interest rate risk, with **100%** of outstanding debt economically hedged as of December 31, 2022 - The primary market risk exposure is interest rate risk from LIBOR, SOFR, and BSBY[338](index=338&type=chunk) - As of December 31, 2022, **100%** of outstanding debt is economically hedged, with **59.8%** fixed-rate or swapped and **40.2%** variable-rate[339](index=339&type=chunk) - A **100 basis point** interest rate increase would decrease annual cash flow by approximately **$0.6 million**, while a decrease would increase it by **$1.7 million**[339](index=339&type=chunk) [Financial Statements and Supplementary Data](index=66&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data%2E) This section incorporates by reference the company's consolidated financial statements and supplementary data, which begin on page F-1 of the report - Consolidated financial statements and supplementary data are included commencing on page F-1 of the Annual Report[340](index=340&type=chunk) [Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](index=66&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure%2E) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None [Controls and Procedures](index=66&type=section&id=Item%209A.%20Controls%20and%20Procedures%2E) Management concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2022, with no material changes - Management concluded that disclosure controls and procedures were effective as of December 31, 2022[343](index=343&type=chunk) - Management concluded that internal control over financial reporting was effective as of December 31, 2022, based on the COSO 2013 framework[345](index=345&type=chunk) - No material changes to internal control over financial reporting occurred during the quarter ended December 31, 2022[347](index=347&type=chunk) [Other Information](index=67&type=section&id=Item%209B.%20Other%20Information%2E) The company reports no other information for this item - None PART III [Directors, Executive Officers and Corporate Governance](index=68&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance%2E) The information required for this item will be incorporated by reference from the company's Definitive Proxy Statement for its 2023 Annual Meeting of Stockholders - Information is incorporated by reference from the Company's Proxy Statement for the 2023 Annual Meeting of Stockholders[351](index=351&type=chunk) [Executive Compensation](index=68&type=section&id=Item%2011.%20Executive%20Compensation%2E) The information required for this item will be incorporated by reference from the company's Definitive Proxy Statement for its 2023 Annual Meeting of Stockholders - Information is incorporated by reference from the Company's Proxy Statement for the 2023 Annual Meeting of Stockholders[352](index=352&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=68&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters%2E) The information required for this item will be incorporated by reference from the company's Definitive Proxy Statement for its 2023 Annual Meeting of Stockholders - Information is incorporated by reference from the Company's Proxy Statement for the 2023 Annual Meeting of Stockholders[353](index=353&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=68&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence%2E) The information required for this item will be incorporated by reference from the company's Definitive Proxy Statement for its 2023 Annual Meeting of Stockholders - Information is incorporated by reference from the Company's Proxy Statement for the 2023 Annual Meeting of Stockholders[354](index=354&type=chunk) [Principal Accountant Fees and Services](index=68&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services%2E) The information required for this item will be incorporated by reference from the company's Definitive Proxy Statement for its 2023 Annual Meeting of Stockholders - Information is incorporated by reference from the Company's Proxy Statement for the 2023 Annual Meeting of Stockholders[355](index=355&type=chunk) PART IV [Exhibits and Financial Statement Schedules](index=69&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules%2E) This section lists the financial statements, financial statement schedules, and exhibits filed as part of the Form 10-K report - This section lists the financial statements, Schedule III—Consolidated Real Estate Investments and Accumulated Depreciation, and other exhibits filed with the report[358](index=358&type=chunk)[359](index=359&type=chunk)[360](index=360&type=chunk) [Form 10-K Summary](index=69&type=section&id=Item%2016.%20Form%2010-K%20Summary%2E) No Form 10-K summary is provided - None

Financial Data and Key Metrics Changes - The company reported record earnings for Q4 2022, with normalized FFO per share at $0.35, exceeding previous guidance [9] - For the full fiscal year 2022, FFO was $1.21 per diluted share, outperforming original guidance by 8% [16] - The company achieved a 13% growth in earnings per share compared to 2021 [9] Business Line Data and Key Metrics Changes - Same store NOI for the portfolio increased by 5.6% on a GAAP basis and 6.7% on a cash basis for 2022, with multifamily showing a significant increase of 10.2% on a cash basis [23] - The company anticipates substantial increases in property NOI driven by organic growth, lease-up of recently developed projects, and anticipated acquisitions [10] Market Data and Key Metrics Changes - The company expects all sectors to show positive same-store growth, with multifamily moderating to low single digits and retail outperforming [42] - Office occupancy remains stable at 96.7%, with strong demand allowing for rental rate increases [26] Company Strategy and Development Direction - The company aims for $100 million to $200 million in acquisitions, focusing on off-market opportunities [11] - A significant increase in construction is expected, with over $600 million in third-party contracts planned over the next couple of years [10] - The company is transitioning towards more unsecured long-term fixed-rate debt, reducing reliance on mezzanine financing [17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the portfolio's resilience and ability to drive rental rates despite challenges in some real estate sectors [15] - The company is well-positioned for growth, with a focus on operational excellence and execution of high-quality development projects [22] Other Important Information - The company received an investment-grade credit rating from DBRS Morningstar, enhancing access to capital markets [8] - The weighted average cost of debt remains low at 3.6%, with expectations to stay below 4% for 2023 and 2024 [20] Q&A Session Summary Question: Can you provide details on the acquisition pipeline and OP units? - Management identified several off-market opportunities from long-term relationships, including the Interlock as a potential acquisition [38] Question: What is the growth trajectory for 2023? - Management expects positive same-store growth across all sectors, with multifamily moderating to low single digits [42] Question: Can you elaborate on the sources and uses of capital? - The company has multiple sources of equity and plans to utilize OP Units, construction debt, and private placements for acquisitions [68] Question: What are the near-term redevelopment plans? - Management is focused on redevelopment opportunities, particularly for Bed Bath & Beyond and Regal Cinemas locations, while also considering ground-up development [55][56] Question: How will rental expenses trend in 2023? - Rental expenses are expected to increase, but margins on NOI will remain consistent with 2022 levels [75]

CLICK TO EDIT MASTER TITLE STYLE 1 GUIDANCE PRESENTATION 2023 2 FORWARD-LOOKING STATEMENTS This presentation should be read in conjunction with the unaudited condensed consolidated financial statements appearing in our press release dated February 14, 2023, which has been furnished as Exhibit 99.1 to our Form 8-K furnished on February 14, 2023. 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 ...

Armada Hoffler Properties, Inc. (NYSE:AHH) Q3 2022 Earnings Conference Call November 8, 2022 8:30 AM ET Company Participants Chelsea Forrest - Director, Corporate Communications & IR Lou Haddad - CEO Matthew Barnes-Smith - CFO Shawn Tibbetts - COO Conference Call Participants Dave Rogers - Baird Rob Stevenson - Janney Operator Good morning and welcome to Armada Hoffler Properties, Inc. Third Quarter 2022 Conference Call. All participants will be in a listen-only mode. [Operator Instructions]. Please note th ...

Armada Hoffler Properties, Inc. (NYSE:AHH) Q2 2022 Earnings Conference Call August 4, 2022 8:30 AM ET Company Participants Chelsea Forrest - Director, Corporate Communications & IR Lou Haddad - CEO Matthew Barnes-Smith - CFO Shawn Tibbetts - COO Conference Call Participants Dave Rogers - Baird Rob Stevenson - Janney James Feldman - Bank of America Peter Abramowitz - Jefferies Operator Greetings and welcome to the Armada Hoffler Properties, Inc. Second Quarter 2022 Earnings Conference Call. At this time, all ...