Armada Hoffler Properties(US:AHH)2023-02-14 16:32Financial 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]