Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - Armada Hoffler Properties, Inc. | d768437d8k.htm |
| EX-99.1 - EX-99.1 - Armada Hoffler Properties, Inc. | d768437dex991.htm |
 Armada
Hoffler Properties, Inc. Second Quarter 2014 Supplemental Information
Exhibit 99.2 |
 Table of
Contents 2
Forward Looking Statements
3
Corporate Profile
4
Second Quarter Results and Financial Summary
5
Highlights
6
2014 Outlook
7
Summary Information
8
Summary Balance Sheet
9
Summary Income Statement
10
Core FFO & AFFO
11
Summary of Outstanding Debt
12
Debt to Core EBITDA
13
Debt Information
14
Portfolio Summary & Business Segment Overview
15
Stabilized Portfolio Summary
16
Stabilized Portfolio Summary Footnotes
17
Development Pipeline
18
Construction Business Summary
19
Operating Results & Property-Type Segment Analysis
20
Same Store NOI by Segment
21
Top 10 Tenants by Annual Base Rent
22
Office Lease Summary
23
Retail Lease Summary
25
Historical Occupancy
27
Appendix - Understanding AHH
29
Corporate Overview
30
Differentiation Provides Value Creation
31
Business Segmentation Overview
32
Components of NAV
33
Stabilized Portfolio
34
Identified & Next Generation Pipeline
35
3rd Party Construction
36
Net Asset Value Component Data
37
Appendix - Definitions & Reconciliations
38
Definitions
39
Reconciliations
43 |
 Forward
Looking Statement 3
This Supplemental Information should be read in conjunction with
our Quarterly Report on Form 10-Q for the
quarter ended June 30, 2014, and the unaudited consolidated financial statements
appearing in our press release dated August 5, 2014, which has been furnished as
Exhibit 99.1 to our Form 8-K filed on August 5, 2014. The Company
makes statements in this Supplemental Information that are forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995 (set forth in
Section 27A of the Securities Act of 1933, as amended (the “Securities
Act”), and Section 21E of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”)). In particular, statements pertaining to our
capital resources, portfolio performance and results of operations contain
forward-looking statements. Likewise, all of our statements regarding anticipated
growth in our funds from operations, core 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,”
“approximately,”
“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. |
 4
Corporate Information
Management & Board
Board of Directors
Corporate Officers
Daniel A. Hoffler
Executive Chairman of the Board
Louis S. Haddad
President and Chief Executive Officer
A. Russell Kirk
Vice Chairman of the Board
Anthony P. Nero
President of Development
Louis S. Haddad
Director
Shelly R. Hampton
President of Asset Management
John W. Snow
Lead Independent Director
Eric E. Apperson
President of Construction
George F. Allen
Independent Director
Michael P. O’Hara
Chief Financial Officer and Treasurer
James A. Carroll
Independent Director
Eric L. Smith
Vice President of Operations and Secretary
James C. Cherry
Independent Director
Joseph W. Prueher
Independent Director
Analyst Coverage
Janney, Montgomery, & Scott LLC
Raymond James & Associates
Robert W. Baird & Co.
Stifel, Nicolaus & Company, Inc.
Wunderlich Securities
Michael Gorman
Richard Mulligan
David Rodgers
John Guinee
Craig Kucera
(215) 665-6224
(727) 567-2660
(216) 737-7341
(443) 224-1307
(540) 277-3366
Investor Relations Contact
Julie Loftus Trudell
(757) 366-6692
Armada Hoffler Properties, Inc. (NYSE: AHH)
grade
office,
retail
and
multifamily
properties
in
the
Mid-Atlantic
U.S.
The
Company
also
provides
general
construction
and
development
services
to
third-
party clients throughout the Mid-Atlantic and Southeastern regions of the U.S. Armada
Hoffler Properties was founded in 1979 and is headquartered in Virginia Beach,
VA. is
a
full
service
real
estate
investment
trust
company
that
develops,
builds,
owns
and
manages
institutional
mgorman@janney.com
rj.milligan@raymondjames.com
drodgers@rwbaird.com
jwguinee@stifel.com
ckucera@wundernet.com
Jtrudell@armadahoffler.com
Vice President of Investor Relations
Corporate Profile |
 Second
Quarter Results and Financial Summary |
 Highlights
6
Funds From Operations (“FFO”) of $6.3 million, or $0.19 per diluted share for
the quarter ended June 30, 2014. Core FFO of $6.8 million, or $0.21 per diluted
share for the quarter ended June 30, 2014. Occupancy increased
slightly to 94.6%, compared to 94.5% as of March 31, 2014. Initial occupancy at
the new 4525 Main Street office tower in the Town Center of Virginia Beach commenced in June
2014.
Construction contract backlog of $179.0 million as of June 30, 2014, which includes the
Harbor Point project in Baltimore, Maryland.
Cash dividend of $0.16 per share payable on October 9, 2014 to stockholders of record
on October 1, 2014. Today, the company announced that West Elm, Free People,
lululemon, francesca’s and Tupelo Honey Cafe have signed leases for retail
space at the Town Center of Virginia Beach. This completes the co-tenancy requirement for
the anchor tenant, Anthropologie, and rounds out the Company’s strategy to
position Town Center as a premium upscale destination.
On August 4, 2014, the Company announced that it has entered into an agreement to
acquire Dimmock Square, a retail power center located in Colonial Heights,
Virginia. The Dimmock Square acquisition will add over 100,000 square feet
of 100% occupied retail space to the Company’s operating property
portfolio. The agreement provides that the Company will acquire a 100%
interest in Dimmock Square in exchange for approximately 990,000 OP units of limited
partnership interest in the Company’s operating partnership and approximately $10
million of cash. The acquisition is expected to be accretive to annual FFO
per diluted share and is expected to close in the third quarter of 2014. The
Company is continuing its long-standing strategy to sell single tenant assets from time-to-time. The Company has
recently entered into an agreement to sell the Virginia Natural Gas office building,
located near Town Center, for approximately $8.9 million, representing
approximately 6.25 percent cap rate. |
 2014
Outlook 7
Current Parameters
Previous Parameters
As of June 30, 2014
As of May 13, 2014
Core FFO
(excluding the impact from non-stabilized projects)
Approximately $27.5 million
In-line with full-year 2013 Core FFO
Non-stabilized projects - negative impact to FFO
(excluded from Core FFO)
Approximately $1.0 million
Approximately $1.5 million
General & administrative expense
Approximately $7.6 million
Approximately $7.8 million
Third party construction company annual segment
gross profit
Approximately $4.3 million
Approximately $4.0 million |
 Summary
Information 8
$ in thousands, except per share
Market Capitalization
Key Financials
6/30/2014
Financial Information:
6/30/2014
% of Total
Equity
Total Market
Capitalization
Rental revenues
$15,319
Market Data
20,495
Total Common Shares Outstanding
58%
19,265,919
10,071
42%
13,785,017
1,141
Common shares and OP units outstanding
100%
33,050,936
Net income
2,273
Market price per common share
$9.68
Funds From Operations (FFO)
6,330
Equity market capitalization
$319,933
FFO per diluted share
$0.19
Total debt
349,840
Core FFO
6,824
Total market capitalization
$669,773
Core FFO per diluted share
$0.21
Less: cash
(19,495)
Total enterprise value
$650,278
Weighted Average Shares/Units Outstanding
33,035,198
Stable Portfolio Metrics
Debt Metrics
6/30/2014
6/30/2014
Rentable square feet or number of units:
Key Metrics
Office
950,246
Core debt/enterprise value
42.4%
Retail
1,092,311
Multifamily
(1)
626
Fixed charge coverage ratio:
Core EBITDA
$9,793
Occupancy:
Interest
2,678
Office
(2)
95.3%
Principal
864
Retail
(2)
93.5%
Total Fixed Charges
3,542
Multifamily
(1)(3)
94.9%
Fixed charge coverage ratio
2.76x
Weighted Average
(4)
94.6%
Core Debt/Annualized Core EBITDA
7.0x
Three months ended
Three months ended
General contracting and real estate services revenues
Rental properties Net Operating Income (NOI)
General contracting and real estate services gross profit
(1) Excludes Liberty Apartments
(2) Office and retail occupancy based on leased square feet as a % of respective total
(3) Multifamily occupancy based on occupied units as a % of respective total
(4) Total occupancy weighted by annualized base rent
Operating Partnership ("OP") Units Outstanding |
 Summary
Balance Sheet 9
$ in thousands
6/30/2014
12/31/2013
Assets
(Unaudited)
Real estate investments:
Income producing property
$436,450
$406,239
Held for development
8,592
-
Construction in progress
105,253
56,737
Accumulated depreciation
(112,024)
(105,228)
Net real estate investments
438,271
357,748
Cash and cash equivalents
16,271
18,882
Restricted cash
3,224
2,160
Accounts receivable, net
19,517
18,272
Construction receivables, including retentions
12,730
12,633
Costs and estimated earnings in excess of billings
1,287
1,178
Other assets
24,815
24,409
Total Assets
$516,115
$435,282
Liabilities and Equity
Indebtedness
$349,840
$277,745
Accounts payable and accrued liabilities
6,743
6,463
Construction payables, including retentions
34,631
28,139
Billings in excess of costs and estimated earnings
1,227
1,541
Other liabilities
16,474
15,873
Total Liabilities
408,915
329,761
Total Equity
107,200
105,521
Total Liabilities and Equity
$516,115
$435,282
As of |
 Summary
Income Statement 10
$ in thousands
Three months ended
Six months ended
6/30/2014
6/30/2013
6/30/2014
6/30/2013
Revenues
(Unaudited)
(Unaudited)
Rental revenues
$15,319
$14,231
$30,512
$27,629
General contracting and real estate services
20,495
23,291
39,729
41,247
Total Revenues
35,814
37,522
70,241
68,876
Expenses
Rental expenses
3,840
3,399
7,816
6,628
Real estate taxes
1,408
1,248
2,751
2,460
General contracting and real estate services
19,354
22,503
37,339
39,961
Depreciation and amortization
4,057
4,020
8,026
7,179
General and administrative
1,981
2,857
4,027
3,574
Impairment charges
-
533
-
533
Total Expenses
30,640
34,560
59,959
60,335
Operating Income
5,174
2,962
10,282
8,541
Interest expense
(2,678)
(3,289)
(5,243)
(7,204)
Loss on extinguishment of debt
-
(1,125)
-
(1,125)
Gain on acquisitions
-
9,460
-
9,460
Other income
(194)
185
(82)
452
Income before taxes
2,302
8,193
4,957
10,124
Income tax (provision) benefit
(29)
211
(178)
211
Net Income
$2,273
$8,404
$4,779
$10,335 |
 Core
FFO & AFFO 11
Three months ended
Six months ended
6/30/2014
6/30/2014
(Unaudited)
Net income
$2,273
$4,779
Depreciation and amortization
4,057
8,026
FFO
6,330
12,805
FFO per weighted
average share $0.19
$0.39
Core FFO
Adjustments
Loss on extinguishment of debt
-
-
Non-cash stock compensation
193
522
Impairment charges
-
-
Loan modifications
-
-
Non-Stabilized development pipeline adjustments
301
562
Core FFO
6,824
13,889
Core FFO per
weighted average share $0.21
$0.42
AFFO
Adjustments
Non-Stabilized development pipeline adjustments
(301)
(562)
Tenant improvements, leasing commissions
(1)
(1,007)
(1,216)
Leasing
incentives (63)
(63)
Property related capital expenditures
(322)
(541)
Non cash interest expense
160
293
GAAP Adjustments
Net effect of straight-line rents
(301)
(690)
Amortization of lease incentives and above (below) market rents
157
317
Derivative (income) losses
262
169
AFFO
5,409
11,596
AFFO per weighted
average share $0.16
$0.35
$ in thousands, except per share
(1) Excludes tenant improvements and leasing commissions on first generation rental
space. |
 Summary
of Outstanding Debt 12
$ in thousands
(1) LIBOR rate is determined by individual lenders.
(2) Subject to an interest rate swap lock.
(3) Principal balance excluding any fair value adjustment recognized upon acquisition.
Weighted Average Fixed Interest Rate
5.3%
Weighted Average Variable Interest Rate
2.2%
Total Weighted Average Interest Rate
3.5%
Variable Interest Rate as a % of Total (excluding interest rate caps)
57.8%
Weighted Average Maturity (years)
8.9
2Q 2014
Year to Date
Capitalized Interest
$644
$1,260
Debt
Amount
Outstanding
Interest Rate
(1)
Effective Rate as of
June 30, 2014
Maturity Date
Balance at
Maturity
Virginia Beach Town Center
249 Central Park Retail
$15,701
5.99%
September 8, 2016
$15,084
South Retail
6,927
5.99%
September 8, 2016
6,655
Studio 56 Retail
2,654
3.75%
May 7, 2015
2,592
Commerce Street Retail
5,581
LIBOR +2.25%
2.40%
October 31, 2018
5,264
Fountain Plaza Retail
7,850
5.99%
September 8, 2016
7,542
Dick's at Town Center
8,267
LIBOR+2.75%
2.90%
October 31, 2017
7,889
The Cosmopolitan
47,430
3.75%
July 1, 2051
-
Diversified Portfolio
Oyster Point
6,371
5.41%
December 1, 2015
6,089
Broad Creek Shopping Center
Note 1
4,478
LIBOR +2.25%
2.40%
October 31, 2018
4,223
Note 2
8,220
LIBOR +2.25%
2.40%
October 31, 2018
7,752
Note 3
3,442
LIBOR +2.25%
2.40%
October 31, 2018
3,246
Hanbury Village
-
Note 1
21,333
6.67%
October 11, 2017
20,499
Note 2
4,125
LIBOR +2.25%
2.40%
October 31, 2018
3,777
Harrisonburg Regal
3,751
6.06%
June 8, 2017
3,165
North Point Center
-
Note 1
10,235
6.45%
February 5, 2019
9,333
Note 2
2,796
7.25%
September 15, 2025
1,344
Note 4
1,018
5.59%
December 1, 2014
1,007
Note 5
695
LIBOR+2.00%
3.57%
(2)
February 1, 2017
641
Tyre Neck Harris Teeter
2,460
LIBOR +2.25%
2.40%
October 31, 2018
2,235
Smith's Landing
24,633
LIBOR+2.15%
2.30%
January 31, 2017
23,793
187,967
132,130
Credit Facility
88,000
LIBOR + 1.60% -
2.20%
2.10%
May 13, 2016
88,000
Total including Credit Facility
$275,967
$220,130
Development Pipeline
4525 Main Street
25,251
LIBOR+1.95%
2.10%
January 30, 2017
25,251
Encore Apartments
14,342
LIBOR+1.95%
2.10%
January 30, 2017
14,342
Whetstone Apartments
7,219
LIBOR+1.90%
2.05%
October 8, 2016
7,219
Sandbridge Commons
4,409
LIBOR+1.85%
2.00%
January 17, 2018
4,409
Liberty Apartments
20,743
(3)
5.66%
November 1, 2043
-
Oceaneering
3,376
LIBOR+1.75%
1.90%
February 28, 2018
3,376
Total
Notes
Payable
-
Development
Pipeline
75,340
54,597
Unamortized fair value adjustments
(1,467)
Total Notes Payable
$349,840
$274,726 |
 Core
Debt to Core EBITDA 13
Three months
ended 6/30/2014
6/30/2014
(Unaudited)
(Unaudited)
Net Income
$2,273
Total Debt
$349,840
Excluding:
Excluding:
Interest Expense
2,678
Development Pipeline Unstabilized Debt
(73,873)
Income Tax
29
Depreciation
and amortization 4,057
Core Debt
$275,967
EBITDA
9,037
Additional Adjustments:
Non-recurring or extraordinary (gains) losses
-
Early extinguishment of
debt -
Core Debt/Annualized Core
EBITDA 7.0x
Derivative (income) losses
262
Non-cash stock
compensation 193
Development Pipeline
301
Total Other Adjustments
756
Core EBITDA
9,793
Annualized Core EBITDA
$39,171
$ in thousands |
 Debt
Information 14
$ in thousands
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
2014
2015
2016
2017
2018 and
thereafter
Debt Maturity as of 6/30/2014
Interest Rate Cap Agreements At or Below 1.50%
Effective Date
Maturity Date
Strike Rate
Notional Amount
May 31, 2012
May 29, 2015
1.09%
$9,008
September 1, 2013
March 1, 2016
1.50%
40,000
October 4, 2013
April 1, 2016
1.50%
18,500
March 14, 2014
March 1, 2017
1.25%
50,000
Total Interest Rate Caps at or Below 1.50%
$117,508
Fixed Debt Outstanding
147,505
Total Fixed Interest Rate Debt (including caps)
$265,013
Fixed Interest Rate Debt as a % of Total
75% |
 Portfolio Summary & Business
Segmentation Overview |
 Stabilized Portfolio Summary
16
As of 6/30/2014
Property
Location
Year Built
Net Rentable
Square Feet
(1)
% Leased
(2)
Annualized
Base Rent
(3)
Annualized
Base Rent per
Leased Sq. Ft.
(3)
Average Net
Effective
Annual Base
Rent per
Leased Sq. Ft.
(4)
Armada Hoffler Tower
(5)
Virginia Beach, VA
2002
324,348
97.1%
$8,123,253
$25.79
$26.55
One Columbus
Virginia Beach, VA
1984
129,424
100.0%
2,996,509
23.15
22.80
Two Columbus
Virginia Beach, VA
2009
109,091
90.7%
2,527,529
25.55
25.50
Virginia Natural Gas
(6)
Virginia Beach, VA
2010
31,000
100.0%
568,230
18.33
20.17
Richmond Tower
Richmond, VA
2010
206,969
98.0%
7,393,070
36.45
41.88
Oyster Point
Newport News, VA
1989
100,214
79.1%
1,730,856
21.83
21.45
Sentara Williamsburg
(6)
Williamsburg, VA
2008
49,200
100.0%
1,006,140
20.45
20.50
Subtotal / Weighted Average Office Portfolio
(7)
950,246
95.3%
$24,345,587
$26.88
$28.34
Retail Properties Not Subject to Ground Lease
Bermuda Crossroads
Chester, VA
2001
111,566
94.0%
1,394,953
13.30
13.82
Broad Creek Shopping Center
Norfolk, VA
1997-2001
227,691
96.8%
3,080,678
13.98
12.77
Courthouse 7-Eleven
Virginia Beach, VA
2011
3,177
100.0%
125,000
39.35
43.81
Gainsborough Square
Chesapeake, VA
1999
88,862
96.5%
1,353,202
15.77
15.39
Hanbury Village
Chesapeake, VA
2006-2009
61,049
86.4%
1,299,135
24.64
24.19
North Point Center
Durham, NC
1998-2009
215,690
92.1%
2,348,731
11.82
11.75
Parkway Marketplace
Virginia Beach, VA
1998
37,804
100.0%
729,644
19.30
20.61
Harrisonburg Regal
Harrisonburg, VA
1999
49,000
100.0%
683,550
13.95
13.95
Dick's at Town Center
Virginia Beach, VA
2002
100,804
83.3%
798,000
9.50
7.79
249 Central Park Retail
Virginia Beach, VA
(8)
2004
91,171
96.2%
2,458,145
28.04
26.50
Studio 56 Retail
Virginia Beach, VA
2007
11,600
84.8%
371,200
37.75
36.92
Commerce Street Retail
(9)
Virginia Beach, VA
2008
19,173
100.0%
781,588
40.77
41.63
Fountain Plaza Retail
Virginia Beach, VA
2004
35,961
100.0%
970,230
26.98
26.47
South Retail
(24)
Virginia Beach, VA
2002
38,763
83.6%
621,240
19.17
19.03
Subtotal / Weighted Avg Retail Portfolio not Subject to Ground Leases
(10)
1,092,311
93.5%
$17,015,294
$16.66
$16.16
Retail Properties Subject to Ground Lease
Bermuda Crossroads
(11)
Chester, VA
2001
(13)
100.0%
163,350
Broad Creek Shopping Center
(12)
Norfolk, VA
1997-2001
(14)
100.0%
579,188
Hanbury Village
(11)
Chesapeake, VA
2006-2009
(15)
100.0%
1,067,598
North Point Center
(11)
Durham, NC
1998-2009
(16)
100.0%
1,062,784
Tyre Neck Harris Teeter
(12)
Portsmouth, VA
2011
(17)
100.0%
508,134
Subtotal / Weighted Avg Retail Portfolio Subject to Ground Leases
100.0%
$3,381,055
Total / Weighted Avg Retail Portfolio
1,092,311
(18)
93.5%
$20,396,349
$16.66
$16.16
Total / Weighted Average Retail and Office Portfolio
2,042,557
94.4%
$44,741,936
$21.46
$21.88
Property
Location
Year Built
Units
(19)
% Leased
(2)
Annualized
Base Rent
(20)
Average
Monthly Base
Rent per
Leased Unit
(21)
Multifamily
Smith's Landing
(22)
Blacksburg, VA
2009
284
96.1%
$3,321,096
$1,013.77
The Cosmopolitan
Virginia Beach, VA
2006
342
93.9%
6,940,140
1,568.57
Total / Weighted Avg Multifamily Portfolio
626
94.9%
$10,261,236
$1,313.58
Office Properties |
 Stabilized Portfolio Summary Footnotes
17
1)
The net rentable square footage for each of our office properties is the sum of (a) the square
footages 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 determined consistently with the Building Owners and Managers Association, or BOMA, 1996
measurement guidelines. The net rentable square footage for each of our retail properties is
the sum of (a) the square footages of existing leases, plus (b) for available space, the field verified square footage.
2)
Percentage leased for each of our office and retail properties is calculated as (a) square
footage under executed leases as of June 30, 2014, divided by (b) net rentable square feet, expressed as a percentage.
Percentage leased for our multifamily properties is calculated as (a) total units occupied as
of June 30, 2014, divided by (b) total units available, expressed as a percentage.
3)
For the properties in our office and retail portfolios, annualized base rent is calculated by
multiplying (a) base rental payments for executed leases as of June 30, 2014 (defined as cash base rents (before
abatements) excluding tenant reimbursements for expenses paid by the landlord), by (b) 12.
Annualized base rent per leased square foot is calculated by dividing (a) annualized base rent, by (b) square
footage under commenced leases as of June 30, 2014. In the case of triple net or modified
gross leases, annualized base rent does not include tenant reimbursements for real estate taxes, insurance,
common area or other operating expenses. 4)
Average net effective annual base rent per leased square foot represents (a) the
contractual base rent for leases in place as of June 30, 2014, calculated on a straight-line basis to amortize free rent periods
and abatements, but without regard to tenant improvement allowances and leasing commissions,
divided by (b) square footage under commenced leases as of June 30, 2014.
5)
As of June 30, 2014, the Company occupied 16,151 square feet at this property at an annualized
base rent of $446,172, or $29.40 per leased square foot, which amounts are reflected in the % leased,
annualized base rent and annualized base rent per square foot columns in the table above. The
rent paid by us is eliminated from our revenues in consolidation. In addition, effective March 1, 2013, the
Company sublease approximately 5,000 square feet of space from a tenant at this property. 6)
This property is subject to a triple net lease pursuant to which the tenant pays
operating expenses, insurance and real estate taxes.
7)
Includes square footage and annualized base rent pursuant to leases for space occupied by us. 8)
As of June 30, 2014, the Company occupied 8,995 square feet at this property at
an annualized base rent of $287,658, or $31.01 per leased square foot, which amounts are reflected in the % leased,
annualized base rent and annualized base rent per square foot columns in the table above. The
rent paid by us is eliminated from our revenues in consolidation.
9)
Includes $31,200 of annualized base rent pursuant to a rooftop lease. 10)
Reflects square footage and annualized base rent pursuant to leases for space
occupied by AHH.
11)
For this ground lease, the Company own the land and the tenant owns the improvements
thereto. The Company will succeed to the ownership of the improvements to the land upon the termination of the
ground lease.
12)
The Company lease the land underlying this property from the owner of the land pursuant to a
ground lease. The Company re-lease the land to our tenant under a separate ground lease pursuant to which
our tenant owns the improvements on the land. 13)
Tenants collectively lease approximately 139,356 square feet of land from us
pursuant to ground leases.
14)
Tenants collectively lease approximately 299,170 square feet of land from us pursuant to
ground leases. 15) Tenants collectively lease approximately 105,988 square feet of
land from us pursuant to ground leases.
16)
Tenants collectively lease approximately 1,443,985 square feet of land from us pursuant to
ground leases. 17) Tenant leases approximately 200,073 square feet of land from us
pursuant to a ground lease.
18)
The total square footage of our retail portfolio excludes the square footage of land subject
to ground leases.
19)
Units represent the total number of apartment units available for rent at June 30, 2014. 20)
For the properties in our multifamily portfolio, annualized base rent is
calculated by multiplying (a) base rental payments for the month ended June 30, 2014 by (b) 12.
21)
Average monthly base rent per leased unit represents the average monthly rent for all leased
units for the month ended June 30, 2014.
22)
The Company lease the land underlying this property from the owner of the land pursuant to a
ground lease. 23) The annualized base rent for The Cosmopolitan includes $936,143 of
annualized rent from 15 retail leases at the property.
24)
As of June 30, 2014, The Company occupied 2,908 square feet at this property at an annualized
base rent of $12,000, or $4.13 per leased square foot, which amounts are reflected in the % leased,
annualized base rent and annualized base rent per square foot columns in the table above. The
rent paid by us and is eliminated from our revenues in consolidation. |
 Development Pipeline
18
$ in thousands
Identified Development Pipeline
Schedule
Office/Retail
Location
Estimated
Square
Footage
(1)
Estimated
Cost
(1)
Cost Incurred
through
6/30/2014
Start
Anchor Tenant
Occupancy
Stabilized
Operation
AHH
Ownership %
(1)
Property Type
%leased
Anchor Tenants
4525 Main Street
(2)
Virginia Beach, VA
239,000
(3)
$50,000
$38,000
1Q13
3Q14
1Q16
100%
Office
56%
Clark Nexsen, Development Authority
of Virginia Beach
(3)
, Anthropologie
(8)
Sandbridge Commons
Virginia Beach, VA
70,000
13,000
8,000
4Q13
1Q15
2Q16
100%
Retail
66%
Harris Teeter
Brooks Crossing
Newport News, VA
36,000
8,000
1,200
4Q14
3Q15
3Q15
65%
Office
0%
Huntington Ingalls
(4)
Greentree Shopping Center
(5)
Chesapeake, VA
18,000
6,000
4,000
4Q13
4Q14
3Q16
100%
Retail
40%
Wawa
363,000
77,000
51,200
Schedule
Multifamily
Location
Estimated
Apartment
Units
(1)
Estimated
Cost
(1)
Cost Incurred
through
6/30/2014
Start
Initial
Occupancy
Complete
(1)
Stabilized
Operation
AHH
Ownership %
Encore Apartments
(2)
Virginia Beach, VA
286
$34,000
$22,000
1Q13
3Q14
4Q15
1Q16
100%
Whetstone Apartments
Durham, NC
203
28,000
20,000
2Q13
3Q14
3Q15
1Q16
100%
Liberty Apartments
(6)
Newport News, VA
197
30,700
30,700
-
-
1Q14
3Q15
100%
686
92,700
72,700
Next Generation Pipeline
Schedule
Office/Retail
Location
Estimated
Square
Footage
(1)
Estimated
Cost
(1)
Cost Incurred
through
6/30/2014
Start
Anchor Tenant
Occupancy
Stabilized
Operation
AHH
Ownership %
(1)
Property Type
%leased
Anchor Tenants
Oceaneering
Chesapeake, VA
155,000
$26,000
$10,000
4Q13
1Q15
1Q15
100%
Office
100%
Oceaneering
Commonwealth of Virginia - Chesapeake
Chesapeake, VA
36,000
7,000
2,000
2Q14
1Q15
1Q15
100%
Office
100%
Commonwealth of Virginia
Commonwealth of Virginia - Virginia Beach
Virginia Beach, VA
11,000
3,000
1,000
2Q14
1Q15
1Q15
100%
Office
100%
Commonwealth of Virginia
Lightfoot Marketplace
Williamsburg, VA
88,000
24,000
9,000
3Q14
1Q16
2Q17
70%
(7)
Retail
60%
Harris Teeter
290,000
60,000
22,000
Total
$229,700
$145,900
(1) Represents estimates that may change as the development process proceeds
(2) This property is located within the Virginia Beach Town Center
(4) The principal tenant lease has not been signed as of the date of this supplemental
information (5) AHH has completed the sale of a pad ready site to Wal-Mart adjacent
to Greentree Shopping Center (6) Reflects purchase price of the acquisition, which
occurred in 1Q14 (7) AHH earns a preferred return on equity prior to any distributions
to JV partners (8) Executed lease with retail anchor
(3) Approximately 83,000 square feet is leased to Clark Nexsen, an architectural firm
and approximately 23,000 square feet
is leased to the Development Authority of Virginia Beach |
 Construction Business Summary
19
$ in thousands
(1) Related party contracts
Location
Total Contract
Value
Work in Place as
of 6/30/2014
Backlog
Estimated Date
of Completion
Projects Greater than $5.0M
Exelon
Baltimore, MD
$164,709
$6,307
$158,402
1Q 2016
Hyatt Place Baltimore / Inner Harbor Hotel
Baltimore, MD
25,366
16,351
9,015
4Q 2014
City of Suffolk Municipal Center
Suffolk, VA
24,933
21,314
3,618
2Q 2015
Main Street Parking Garage
(1)
Virginia Beach, VA
18,035
16,887
1,148
3Q 2014
Sub Total
233,043
60,859
172,184
Projects Less than $5.0M
86,494
79,691
6,803
Total
$319,537
$140,550
$178,987
Gross Profit Summary
Q2 2014
YTD 2014
(Unaudited)
Revenue
$20,495
$39,729
Expense
(19,354)
(37,339)
Gross Profit
$1,141
$2,390 |
 Operating Results & Property-
Type Segment Analysis |
 Same
Store NOI by Segment 21
(1) Excludes Main Street Office
(2) Bermuda Crossroads and Greentree excluded
(3) Smith's Landing and Liberty Apartments excluded
(Reconciliation to GAAP located in appendix pg. 43)
$ in thousands
Three months ended 6/30
Six months ended 6/30
2014
2013
$ Change
% Change
2014
2013
$ Change
% Change
Office
(1)
(Unaudited)
(Unaudited)
Revenue
$6,473
$6,420
$53
1%
$13,022
$12,906
$116
1%
Expenses
1,971
1,940
31
2%
4,102
3,886
216
6%
Net Operating Income
4,502
4,480
22
0%
8,920
9,020
(100)
-1%
Retail
(2)
Revenue
5,163
5,131
32
1%
10,391
10,137
254
3%
Expenses
1,588
1,574
14
1%
3,275
3,255
20
1%
Net Operating Income
3,575
3,557
18
1%
7,116
6,882
234
3%
Multi Family
(3)
Revenue
1,920
1,903
17
1%
3,736
3,810
(74)
-2%
Expenses
870
875
(5)
-1%
1,701
1,690
11
1%
Net Operating Income
1,050
1,028
22
2%
2,035
2,120
(85)
-4%
Same Store Net Operating Income (NOI), GAAP basis
$9,127
$9,065
$62
1%
$18,071
$18,022
$49
0%
Net effect of straight-line rents
(251)
(143)
(108)
76%
(638)
(358)
(280)
78%
Amortization of lease incentives and above (below) market rents
183
180
3
2%
369
376
(7)
-2%
Same store portfolio NOI, cash basis
$9,059
$9,102
($43)
0%
$17,802
$18,040
($238)
-1%
Cash Basis:
Office
4,143
4,237
(94)
-2%
8,068
8,446
(378)
-4%
Retail
3,863
3,831
32
1%
7,693
7,462
231
3%
Multifamily
1,053
1,034
19
2%
2,041
2,132
(91)
-4%
$9,059
$9,102
($43)
0%
$17,802
$18,040
($238)
-1%
GAAP Basis:
Office
4,502
4,480
22
0%
8,920
9,020
(100)
-1%
Retail
3,575
3,557
18
1%
7,116
6,882
234
3%
Multifamily
1,050
1,028
22
2%
2,035
2,120
(85)
-4%
$9,127
$9,065
$62
1%
$18,071
$18,022
$49
0% |
 Top 10
Tenants by Annual Base Rent 22
As of June 30, 2014
(1) Virginia Beach Development Authority would be included in the Office Portfolio top
ten tenants based on ABR once 4525 Main Street Office Stabalizes
Office Portfolio
Tenant
Number
of Leases
Number
of
Properties
Property(ies)
Lease
Expiration
Annualized
Base Rent
% of Office
Portfolio
Annualized
Base Rent
% of Total
Portfolio
Annualized
Base Rent
Williams Mullen
3
2
Armada Hoffler Tower, Richmond Tower
3/8/2026
$7,808,034
32.1%
14.2%
Sentara Medical Group
1
1
Sentara Williamsburg
3/31/2023
1,006,140
4.1%
1.8%
Cherry Bekaert & Holland
3
3
Armada Hoffler Tower, Richmond Tower, Oyster Point
1/31/2025
949,713
3.9%
1.7%
GSA
1
1
Oyster Point
9/21/2022
870,047
3.6%
1.6%
Troutman Sanders LLP
1
1
Armada Hoffler Tower
4/26/2017
865,370
3.6%
1.6%
The Art Institute
1
1
Two Columbus
12/31/2019
787,226
3.2%
1.4%
Pender & Coward
2
1
Armada Hoffler Tower
12/31/2019
781,536
3.2%
1.4%
Kimley-
Horn
1
1
Two Columbus
12/31/2018
682,162
2.8%
1.2%
Hampton University
2
1
Armada Hoffler Tower
5/7/2023
681,304
2.8%
1.2%
Hankins & Anderson
1
1
Armada Hoffler Tower
4/30/2022
572,601
2.4%
1.0%
Top 10 Total
$15,004,132
61.6%
27.3%
Retail Portfolio
Tenant
Number
of Leases
Number
of
Properties
Property(ies)
Lease
Expiration
Annualized
Base Rent
% of Retail
Portfolio
Annualized
Base Rent
% of Total
Portfolio
Annualized
Base Rent
Home Depot
2
2
Broad Creek Shopping Center, North Point Center
12/3/2019
$2,189,900
10.7%
4.0%
Harris Teeter
2
2
Tyre Neck Harris Teeter, Hanbury Village
10/16/2028
1,430,532
7.0%
2.6%
Food Lion
3
3
Broad Creek Shopping Center, Bermuda Crossroads,
Gainsborough Square
3/19/2020
1,282,568
6.3%
2.3%
Dick's Sporting Goods
1
1
Dick's at Town Center
1/31/2020
798,000
3.9%
1.5%
Regal Cinemas
1
1
Harrisonburg Regal
4/23/2019
683,550
3.4%
1.2%
PetsMart
2
2
Broad Creek Shopping Center, North Point Center
7/21/2018
618,704
3.0%
1.1%
Kroger
1
1
North Point Center
8/31/2018
552,864
2.7%
1.0%
Yard House
1
1
Commerce Street Retail
11/30/2023
538,000
2.6%
1.0%
Rite Aid
2
2
Gainsborough Square, Parkway Marketplace
5/29/2019
484,193
2.4%
0.9%
Walgreens
1
1
Hanbury Village
12/31/2083
447,564
2.2%
0.8%
Top 10 Total
$8,868,044
44.3%
16.4%
(1) |
 Office
Lease Summary 23
Renewal Lease Summary
(1)
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
Annual
Change in
Rent per SF
Contractual
Rent per SF
Prior Rent
per SF
Annual Change
in Rent per SF
Weighted
Average Lease
Term
TI, LC, &
Incentives
TI, LC, &
Incentives
per SF
2nd Quarter 2014
2
18,824
1
8,452
$25.12
$24.33
$0.79
$25.37
$27.55
($2.18)
7.75
$204,718
$10.88
1st Quarter 2014
1
25,506
2
5,430
32.28
26.66
5.63
29.95
29.25
0.70
10.00
1,315,127
51.56
4th Quarter 2013
5
45,677
4
5,112
26.74
25.27
1.47
23.58
27.97
(4.39)
11.34
1,927,309
42.19
3rd Quarter 2013
5
16,289
4
30,038
29.18
26.76
2.42
28.26
27.92
0.33
6.79
60,809
3.73
New Lease Summary
(1)
Quarter
Number of
Leases
Signed
Net rentable
SF Signed
Contractual
Rent per SF
Weighted
Average
Lease Term
TI, LC, &
Incentives
TI, LC, &
Incentives
per SF
2nd Quarter 2014
4
6,948
$20.18
4.28
$190,255
$27.38
1st Quarter 2014
2
5,430
24.12
1.00
5,239
0.96
4th Quarter 2013
4
18,381
23.56
10.34
577,382
31.41
3rd Quarter 2013
1
1,142
29.50
5.00
3,577
3.13
(1) Excludes leases for space occupied by AHH. |
 Office
Lease Expirations 24
Year of Lease Expiration
Number of
Leases
Expiring
Square
Footage of
Leases
Expiring
% Portfolio
Net Rentable
Square Feet
Annualized
Base Rent
% of Portfolio
Annualized
Base Rent
Annualized Base Rent
per Leased Square
Foot
Available
-
44,593
4.7%
$0
-
$0.00
2014
8
18,631
2.0%
282,451
1.2%
15.16
2015
11
35,957
3.8%
793,596
3.3%
22.07
2016
10
33,481
3.5%
802,954
3.3%
23.98
2017
5
64,492
6.8%
1,564,421
6.4%
24.26
2018
17
157,665
16.6%
4,274,352
17.6%
27.11
2019
9
92,048
9.7%
2,160,096
8.9%
23.47
2020
3
25,283
2.7%
783,034
3.2%
30.97
2021
4
41,363
4.4%
973,852
4.0%
23.54
2022
3
48,117
5.1%
1,280,663
5.3%
26.62
2023
4
115,889
12.2%
2,368,413
9.7%
20.44
Thereafter
9
272,727
28.7%
9,061,755
37.2%
33.23
Total / Weighted Average
83
950,246
100.0%
24,345,587
$
100.0%
$26.88
1.2%
3.3%
3.3%
6.4%
17.6%
8.9%
3.2%
4.0%
5.3%
9.7%
37.2%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0% |
 Retail
Lease Summary 25
(1) Excludes leases from space occupied by AHH
Renewal Lease Summary
(1)
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
Annual Change
in Rent per SF
Contractual
Rent per SF
Prior Rent
per SF
Annual Change
in Rent per SF
Weighted
Average Lease
Term
TI, LC, &
Incentives
TI, LC, &
Incentives
per SF
2nd Quarter 2014
6
12,916
2
3,842
$20.47
$19.66
$0.81
$20.20
$20.65
($0.46)
1.87
$5,730
$0.44
1st Quarter 2014
5
23,857
3
6,540
20.84
20.41
0.43
21.18
21.82
(0.64)
4.55
63,339
2.65
4th Quarter 2013
7
37,733
6
7,928
13.82
13.49
0.33
13.79
14.12
(0.33)
4.70
40,540
1.07
3rd Quarter 2013
6
24,506
3
3,648
24.26
25.11
(0.85)
23.55
28.34
(4.79)
5.67
227,766
9.29
New Lease Summary
(1)
Quarter
Number of
Leases
Signed
Net rentable
SF Signed
Contractual
Rent per SF
Weighted
Average
Lease Term
TI, LC, &
Incentives
TI, LC, &
Incentives
per SF
2nd Quarter 2014
4
10,574
$25.73
$7.78
$1,071,485
$101.33
1st Quarter 2014
1
3,160
16.25
10.50
126,558
40.05
4th Quarter 2013
2
3,270
18.67
5.06
75,884
23.21
3rd Quarter 2013
-
-
-
-
-
-
|
 Retail
Lease Expiration 26
Year of Lease Expiration
Number of
Leases
Expiring
Square
Footage of
Leases
Expiring
% Portfolio
Net Rentable
Square Feet
Annualized
Base Rent
% of Portfolio
Annualized
Base Rent
Annualized Base Rent
per Leased Square
Foot
Available
-
64,471
5.9%
$0
-
$0.00
Signed Leases not Commenced
2
6,332
0.6%
0
-
0.00
2014
10
17,869
1.6%
291,572
1.7%
16.32
2015
18
60,233
5.5%
1,293,171
7.6%
21.47
2016
20
59,949
5.5%
1,413,379
8.3%
23.58
2017
23
146,050
13.4%
2,045,639
12.0%
14.01
2018
20
122,737
11.2%
1,772,513
10.4%
14.44
2019
18
301,341
27.6%
4,331,948
25.5%
14.38
2020
7
133,586
12.2%
1,677,169
9.9%
12.55
2021
5
25,204
2.3%
740,832
4.4%
29.39
2022
5
79,588
7.3%
1,151,218
6.8%
14.46
2023
5
27,625
2.5%
869,930
5.1%
31.49
Thereafter
8
47,326
4.3%
1,427,923
8.4%
30.17
Total / Weighted Average
141
1,092,311
100.0%
17,015,294
$
100.0%
$16.55
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
1.7%
7.6%
8.3%
12.0%
10.4%
25.5%
9.9%
4.4%
6.8%
5.1%
8.4% |
  Historical
Occupancy 27
(1) Office and retail occupancy based on occupied square feet as a % of respective
total (2) Multifamily occupancy based on occupied units as a % of respective total
(3) Total occupancy weighted by annualized base rent
Occupancy -
All Properties
as of
Sector
6/30/2014
3/31/2014
12/31/2013
9/30/2013
6/30/2013
Office
(1)
95.3%
95.4%
95.2%
93.4%
93.4%
Retail
(1)
93.5%
93.4%
93.4%
93.6%
94.6%
Multifamily
(2)
94.9%
94.2%
94.2%
92.7%
91.2%
Weighted Average
(3)
94.6%
94.5%
94.4%
93.3%
93.5% |
 Multifamily Occupancy
28
Occupancy Summary - Smiths Landing (284 available units)
Quarter Ended
Number of Units
Occupied
Percentage
Occupied
(1)
Annualized Base
Rent
(2)
Average Monthly Rent
per Occupied Unit
6/30/2014
273
96.1%
$3,321,096
$1,014
3/31/2014
283
99.6%
3,430,260
1,010
12/31/2013
282
99.3%
3,382,380
1,000
9/30/2013
284
100.0%
3,427,980
1,006
6/30/2013
264
93.0%
3,163,164
998
Occupancy Summary - The Cosmopolitan (342 available units)
Quarter Ended
Number of Units
Occupied
Percentage
Occupied
(1)
Annualized Base
Rent
(2)(4)
Average Monthly Rent
per Occupied Unit
(3)
6/30/2014
321
93.9%
$6,042,132
$1,569
3/31/2014
307
89.8%
5,799,564
1,574
12/31/2013
308
90.1%
5,721,144
1,548
9/30/2013
296
86.5%
5,506,764
1,550
6/30/2013
307
89.9%
5,818,908
1,580
(1) Total
units occupied as of each respective date (2) Annualized base rent is calculated
by multiplying (a) contractual rent due from our tenants for the last month of the respective quarter by (b) 12
(3)
Average
Monthly
Rent
per
Occupied
Unit
is
calculated
as
(a)
annualized
base
rent
divided
by
(b)
the
number
of
occupied
units
as
of
the
end
of
the
respective
date.
(4) Excludes annualized base rent from retail leases |
 Appendix -
Understanding AHH |
 Current Portfolio & Development Pipeline
Previous Construction or Development Projects
Armada Hoffler Properties, Inc. is a full-service real estate investment trust
(REIT) and property company that
develops, builds, owns and manages institutional grade office, retail and multifamily
properties in the Mid- Atlantic U.S. The Company also provides general
construction and development services to third-party clients
throughout the Mid-Atlantic and Southeastern regions of the U.S. Armada Hoffler
Properties was founded in 1979 and is headquartered in Virginia Beach, VA.
30
Diversified portfolio consisting of Office, Retail
and Multifamily properties
Institutional grade portfolio focused on the Mid-
Atlantic region
35 year corporate track record with senior
leadership team averaging more than 20 years
with the company
Market Cap of ~$320 million as of 6/30/14
Management and previous partners own in
excess of 40% of the company through limited
partnership units in the operating partnership
Understanding AHH –
Corporate Overview |
 1.
Advantages of Core Stabilized Portfolio:
Consistent cash flow
High occupancy
Stable same store metrics
2.
Advantages of Wholesale Development Pipeline Engine:
Equity creation
Asset base growth
3.
Advantages of Construction Company:
Stable earnings and value creation
Reduces risk in selecting/executing development opportunities
Brand recognition in new markets
31
Sum of the Parts Leads to Valuation
Understanding AHH –
Differentiation Provides Value Creation
Development Engine
Construction
Business
Stable
Portfolio |
 32
Definition
Characteristics
Valuation
Stabilized
Portfolio
•
Consistent cash flow
•
High occupancy
•
Stable same store
metrics
•
Traditional real estate
valuation, NAV/Cap
Rates
Development
Pipeline
•
Real estate assets in
development or ramping
towards stabilization
•
Value creation
•
Asset base growth
•
Equity Creation
Construction
Business
•
3 party construction
business
•
Stable earnings and
value creation
•
Reduces risk in
selecting/executing
development
opportunities
•
Brand
recognition
in
new markets
•
Multiples analysis
Business Segmentation Overview
rd
th
•
Includes stabilized
office, retail, and
multifamily real estate
(defined as the earlier of
80% occupancy or the
13
full
quarter
after
CO) |
 33
See Pages 34-37 for Further Information Regarding the Components of NAV
Components of NAV |
 1)
Understanding AHH –Stabilized Portfolio 34
(Reconciliation to GAAP located in appendix pg. 44)
$ in thousands
(1) Excludes Greentree Shopping Center
(2) Excludes Liberty Apartments
(3) Includes leases for space occupied by Armada Hoffler which are eliminated for GAAP
purposes totaling ~$211K per quarter (4) Excludes Main Street Office
Cash NOI
Three months
ended 6/30/2014
Annualized
(Unaudited)
Office
$2,141
$8,564
Retail
(1)
3,047
12,188
Multifamily
(2)
589
2,356
Total Diversified Portfolio NOI
$5,777
$23,108
Virginia Beach Town Center
Office
(3)(4)
$2,142
$8,568
Retail
(3)
1,240
4,960
Multifamily
1,053
4,212
Total Virginia Beach Town Center NOI
$4,435
$17,740
Total Stabilized Portfolio NOI
$10,212
$40,848
Diversified
Portfolio |
 Note:
The data below reflects the Company’s current estimates and projections, which may change as a result of various
factors. The Company can make no assurances that the estimates and projections
below will actually be realized. 35
$ in thousands, unaudited
Estimated Cost
Estimated
Stabilized NOI
Estimated
Return on
Cost
Projected
Value Spread
The Company's
Estimated Equity
Creation
The Company's Est.
Equity Creation
Excluding JV
Ownership
Identified Pipeline
$139,000
$11,400
8.20%
125bp
$24,995
$23,903
Next Generation Pipeline
150,000
12,400
8.27%
150bp
33,251
33,251
Liberty Apartments
30,700
(1)
2,000
6.51%
-
Estimated Stabilized Value/Weighted
Average $319,700
$25,800
8.24%
$58,246
$57,154
(1) Purchase price
2) Understanding AHH –Identified &
Next Generation Pipeline
Greater
than
$57M
in
Equity
Creation
-
3
to
4
Years |
 Gross Profit
Summary Q2 2014
YTD 2014
(Unaudited)
Revenue
$20,495
$39,729
Expense
(19,354)
(37,339)
Gross Profit
$1,141
$2,390
3) Understanding AHH –
3
rd
Party Construction
Gross Profit -
metric to use when evaluating the profitability and valuation of the general
contracting & real estate services segment
36
$ in thousands
Construction Company -
Ongoing Profitable Business with Intrinsic Value |
 4) NAV
Component Data 37
$ in thousands
(1) Includes leases for space occupied by Armada Hoffler which are eliminated for GAAP
purposes totaling ~$211K per quarter Stabilized Portfolio NOI (Cash)
Development Pipeline
Annualized three
months ended
6/30/2014
Development Investment as of 6/30/2014
$113,845
58,246
Office
$8,564
$172,091
Retail
12,188
Multifamily
2,356
Total Diversified Portfolio NOI (pg. 34)
$23,108
Operating Companies
Outlook
Office
(1)
$8,568
6/30/2014
Retail
(1)
4,960
Multifamily
4,212
$4,300
Total Virginia Beach Town Center NOI (pg. 34)
$17,740
Stabilized Portfolio NOI (Cash)
$40,848
Other Assets
Liabilities & Share Count
As of 6/30/2014
As of 6/30/2014
Other Assets
Liabilities
Cash and Cash Equivalents
$16,271
Mortgages and notes payable
$349,840
Restricted Cash
3,224
Accounts payable and accrued liabilities
6,743
Accounts Receivable
19,517
Construction payables, including retentions
34,631
Construction receivables, including retentions
12,730
Other Liabilities
17,701
Other Assets
26,102
Total Liabilities
$408,915
Total Other Assets
$77,844
Share Count
Weighted Average Common Shares Outstanding
19,250
13,785
33,035
General Contracting and Real Estate Services per
Company June 30, 2014 parameters (pg. 7)
Virginia Beach Town Center
Weighted Average Operating Partnership ("OP") Units Outstanding Total Weighted Average
Common shares and OP units outstanding
Diversified Portfolio
The Company's Estimated Equity Creation - 3-4 years (pg. 35) |
 Appendix –
Definitions & Reconciliations |
 Definitions
Net Operating Income:
We calculate Net Operating Income (“NOI”) as property revenues (base rent,
expense reimbursements and other revenue)
less
property
expenses
(rental
expenses
and
real
estate
taxes).
For
our
office,
retail
and
multifamily
segments, NOI excludes general contracting and real estate services expenses,
depreciation and amortization, general and
administrative
expenses,
and
impairment
charges.
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, net operating
income 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. (Reconciliation to GAAP located in
appendix pg. 45)
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 year over year, 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.
39 |
 Definitions
Core Funds From Operations:
Adjusted Funds From Operations:
40
We calculate Core Funds From Operations ("Core FFO") as FFO calculated in
accordance with the standards established by NAREIT, adjusted for losses on debt
extinguishments, non-cash stock compensation and impairment charges. Such
items are non-recurring or non-cash in nature. Our calculation of Core
FFO also excludes acquisition costs 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 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. 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 Core
FFO differs from NAREIT's definition of FFO. Other equity REITs may not
calculate Core FFO in the same manner as us, and, accordingly, our Core FFO may
not be comparable to other REITs' Core FFO. We calculate Adjusted Funds
From Operations (“AFFO”) as Core FFO, (i) excluding the impact of tenant improvement
and leasing commission costs, capital expenditures, the amortization of deferred
financing fees, derivative (income) loss, the net effect of straight-line
rents and the amortization of lease incentives and net above (below) market rents
and (ii) adding back the impact of development pipeline projects that are still in
lease-up and government development grants that are not included in FFO. |
 Definitions
EBITDA:
We calculate EBITDA as net income (loss) (calculated in accordance with GAAP),
excluding interest expense, income taxes and depreciation and amortization.
Management believes 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.
Core EBITDA:
We calculate Core EBITDA as EBITDA, excluding certain items, including, but not limited
to, non-recurring or extraordinary gains (losses), early extinguishment of
debt, derivative (income) losses, acquisition costs 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 any construction loans associated
with our development pipeline. Same Store Portfolio:
We define same store properties as including those properties that were owned and
operated for the entirety of the period being presented and excluding properties
that were in lease-up during the period present. 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.
41 |
 Same
Store vs. Non-Same Store Properties 42
Same Store
Non-Same Store
Same Store
Non-Same Store
Office Properties
Armada Hoffler Tower
X
X
One Columbus
X
X
Two Columbus
X
X
Virginia Natural Gas
X
X
Richmond Tower
X
X
Oyster Point
X
X
Sentara Williamsburg
X
X
4525 Main Street
X
X
Retail Properties
Bermuda Crossroads
X
X
Broad Creek Shopping Center
X
X
Courthouse 7-Eleven
X
X
Gainsborough Square
X
X
Hanbury Village
X
X
North Point Center
X
X
Parkway Marketplace
X
X
Harrisonburg Regal
X
X
Dick’s at Town Center
X
X
249 Central Park Retail
X
X
Studio 56 Retail
X
X
Commerce Street Retail
X
X
Fountain Plaza Retail
X
X
South Retail
X
X
Tyre Neck Harris Teeter
X
X
Greentree Shopping Center
X
X
Multifamily
Smith’s Landing
X
X
The Cosmopolitan
X
X
Liberty Apartments
X
X
Comparison of Six Months Ended
June 30, 2014 to 2013
Comparison of Three Months Ended
June 30, 2014 to 2013 |
 Reconciliation to GAAP -
Segment Portfolio NOI
43
$ in thousands
(1) Main Street Office excluded
(2) Bermuda Crossroads and Greentree Shopping Center excluded
(3) Smith's Landing and Liberty Apartments excluded
Three months ended 6/30
Six months ended 6/30
2014
2013
2014
2013
Office Same Store
Rental revenues
(1)
$6,473
$6,420
$13,022
$12,906
Property expenses
1,971
1,940
4,102
3,886
NOI
4,502
4,480
8,920
9,020
Non-Same Store NOI
46
-
46
-
Segment NOI
$4,548
$4,480
$8,966
$9,020
Retail Same Store
(2)
Rental revenues
$5,163
$5,131
$10,391
$10,137
Property expenses
1,588
1,574
3,275
3,255
NOI
3,575
3,557
7,116
6,882
Non-Same Store NOI
438
197
842
197
Segment NOI
$4,013
$3,754
$7,958
$7,079
Multifamily Same Store
(3)
Rental revenues
$1,920
$1,903
$3,736
$3,810
Property expenses
870
875
1,701
1,690
NOI
1,050
1,028
2,035
2,120
Non-Same Store NOI
460
322
986
322
Segment NOI
1,510
1,350
$3,021
$2,442
Total Segment Portfolio NOI
$10,071
$9,584
$19,945
$18,541 |
 Reconciliation to GAAP -
Segment Portfolio NOI
44
$ in thousands
Three months ended 6/30/2014
Office
Retail
Multifamily
Total
Cash NOI
$2,141
$3,047
$589
$5,777
Net effect of straight-line rents
237
(115)
(12)
110
Amortization of lease incentives and (above) below market rents
(16)
39
(13)
10
GAAP NOI
$2,362
$2,971
$564
$5,897
Office
Retail
Multifamily
Total
Cash NOI
$2,142
$1,240
$1,053
$4,435
Net effect of straight-line rents
164
(18)
(3)
143
Amortization of lease incentives and (above) below market rents
(26)
(141)
-
(167)
Elimination of AHH rent
(140)
(70)
-
(210)
GAAP NOI
$2,140
$1,011
$1,050
$4,201
GAAP NOI
Office
Retail
Multifamily
Total
Diversified Portfolio
$2,362
$2,971
$564
$5,897
Town Center of Virginia Beach
2,140
1,011
1,050
4,201
Unstabilized Properties
46
31
(104)
(27)
Total Segment Portfolio GAAP NOI
$4,548
$4,013
$1,510
$10,071
Diversified Portfolio
Town Center of Virginia Beach |
 Reconciliation to GAAP -
Segment Portfolio NOI
$ in thousands
45
Office
Retail
Multifamily
Total Rental
Properties
General Contracting &
Real Estate Services
Total
Segment revenues
6,519
$
5,703
$
3,097
$
15,319
$
20,495
$
35,814
$
Segment expenses
1,971
1,690
1,587
5,248
19,354
24,602
Net operating income
4,548
$
4,013
$
1,510
$
10,071
$
1,141
$
11,212
$
Depreciation and amortization
(4,057)
General and administrative expenses
(1,981)
Interest expense
(2,678)
Other income (expense)
(194)
Income tax provision
(29)
Net income
2,273
$
Office
Retail
Multifamily
Total Rental
Properties
General Contracting &
Real Estate Services
Total
Segment revenues
13,068
$
11,473
$
5,971
$
30,512
$
39,729
$
70,241
$
Segment expenses
4,102
3,515
2,950
10,567
37,339
47,906
Net operating income
8,966
$
7,958
$
3,021
$
19,945
$
2,390
$
22,335
$
Depreciation and amortization
(8,026)
General and administrative expenses
(4,027)
Interest expense
(5,243)
Other income (expense)
(82)
Income tax provision
(178)
Net income
4,779
$
Three months ended 6/30/2014
Six months ended 6/30/2014 |