Attached files
| file | filename |
|---|---|
| EX-99.1 - EXHIBIT 99.1 - Armada Hoffler Properties, Inc. | q3-2016ex991earningsrelease.htm |
| 8-K - 8-K - Armada Hoffler Properties, Inc. | ahhq393020168-k.htm |
Town Center Phase VI
2
Table of Contents
Construction Business Summary
Same Store NOI by Segment
Top 10 Tenants by Annualized Base Rent
Office Lease Summary
Office Lease Expirations
Retail Lease Summary
Retail Lease Expirations
Net Asset Value Component Data
Appendix – Definitions & Reconciliations
Same Store vs Non-Same Store Properties
Reconciliation to Property Portfolio NOI
Reconciliation to GAAP Net Income
Forward Looking Statements
Corporate Profile
Highlights
2016 Outlook
Summary Information
Summary Balance Sheet
Summary Income Statement
FFO, Normalized FFO & Adjusted FFO
Outstanding Debt
Core Debt to Core EBITDA
Debt Information
Capitalization & Financial Ratios
Property Portfolio
Development Pipeline
Acquisitions & Dispositions
19
20
21
22
23
24
25
26
27
31
32
34
9
10
11
12
13
14
15
17
18
3
4
5
6
7
8
3
Forward Looking Statements
This Supplemental Information should be read in conjunction with the unaudited condensed consolidated financial statements
appearing in our press release dated November 1, 2016, which has been furnished as Exhibit 99.1 to our Form 8-K filed on
November 1, 2016. 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 our 2016 outlook and anticipated growth in our funds
from operations, normalized funds from operations, funds available for distribution and net operating income are forward-
looking statements. You can identify forward-looking statements by the use of forward-looking terminology such as “believes,”
“expects,” “may,” “will,” “should,” “seeks,” “intends,” “plans,” “estimates” or “anticipates” or the negative of these words and
phrases or similar words or phrases which are predictions of or indicate future events or trends and which do not relate solely
to historical matters. You can also identify forward-looking statements by discussions of strategy, plans or intentions.
Forward-looking statements involve numerous risks and uncertainties and you should not rely on them as predictions of future
events. Forward-looking statements depend on assumptions, estimates, data or methods, which may be incorrect or
imprecise, and actual results may vary materially from those anticipated, estimated or projected. The Company does not
guarantee that the transactions and events described will happen as described (or that they will happen at all). For further
discussion of risk factors and other events that could impact our future results, please refer to the section entitled “Risk
Factors” in our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”), and
the documents subsequently filed by us from time to time with the SEC.
The Company does not provide a reconciliation for its guidance range of Normalized FFO per diluted share to net income per
diluted share, the most directly comparable forward-looking GAAP financial measure, because it is unable to provide a
meaningful or accurate estimate of reconciling items and the information is not available without unreasonable effort as a result
of the inherent difficulty of forecasting the timing and/or amounts of various items that would impact net income per diluted
share. For the same reasons, the Company is unable to address the probable significance of the unavailable information and
believes that providing a reconciliation for its guidance range of Normalized FFO per diluted share would imply a degree of
precision for its forward-looking net income per diluted share that could be misleading to investors.
Analyst Coverage
4
Corporate Profile
Armada Hoffler Properties, Inc. (NYSE:AHH) is a full service real estate company that develops, constructs and owns
institutional grade office, retail and multifamily properties in the Mid-Atlantic United States. The Company also provides
general contracting and development services to third-party clients throughout the Mid-Atlantic and Southeastern regions.
Armada Hoffler Properties, Inc. was founded in 1979 and is headquartered in Virginia Beach, VA. The Company has elected
to be taxed as a real estate investment trust (“REIT”) for U.S. federal income tax purposes.
Board of Directors Corporate Officers
Investor Relations
Daniel A. Hoffler
A. Russell Kirk
Louis S. Haddad
John W. Snow
George F. Allen
James A. Carroll
James C. Cherry
Eva S. Hardy
Executive Chairman of Board
Vice Chairman of the Board
Director
Lead Independent Director
Independent Director
Independent Director
Independent Director
Independent Director
Louis S. Haddad
Michael P. O’?ara
Eric L. Smith
Anthony P. Nero
Eric E. Apperson
Shelly R. Hampton
President and Chief Executive Officer
Chief Financial Officer and Treasurer
Chief Investment Officer and Corporate Secretary
President of Development
President of Construction
President of Asset Management
Michael P. O’?ara Chief Financial Officer and Treasurer
(757) 366-6684 mohara@armadahoffler.com
Janney, Montgomery, & Scott LLC Robert Stevenson
(646) 840-3217 robertstevenson@janney.com
Raymond James & Associates Bill Crow
(727) 567-2594 bill.crow@raymondjames.com
D. A. Davidson & Co. James O. Lykins
(503) 603-3041 jlykins@dadco.com
Robert W. Baird & Co. David Rodgers
(216) 737-7341 drodgers@rwbaird.com
Stonegate Capital Partners Laura Engel
(214) 987-4121 laura@stonegateinc.com
Stifel, Nicolaus & Company, Inc. John Guinee
(443) 224-1307 jwguinee@stifel.com
Wunderlich Securities Craig Kucera
(540) 277-3366 ckucera@wundernet.com
5
Highlights
• Net income of $7.9 million, or $0.15 per diluted share, for the quarter ended September 30, 2016 compared to net
income of $4.3 million, or $0.10 per diluted share, for the quarter ended September 30, 2015.
• Normalized Funds From Operations (“FFO”) of $13.2 million, or $0.26 per diluted share, for the quarter ended
September 30, 2016 compared to Normalized FFO of $11.0 million, or $0.26 per diluted share, for the quarter ended
September 30, 2015.
• FFO of $13.1 million, or $0.25 per diluted share, for the quarter ended September 30, 2016 compared to FFO of
$10.7 million, or $0.25 per diluted share, for the quarter ended September 30, 2015.
• Same Store Net Operating Income (“NOI”) increased for the ninth consecutive quarter.
• Core operating property portfolio occupancy at 96.2% compared to 95.6% as of September 30, 2015.
• Delivered both Lightfoot Marketplace in Williamsburg, Virginia and Johns Hopkins Village in Baltimore.
• Broke ground on Harding Place, a new $45 million Class A multifamily property in Midtown Charlotte, North Carolina
with expected delivery in 2018.
• Broke ground on the next phase of development in the Town Center of Virginia Beach, a $41 million mixed-use
project expected to include 39,000 square feet of retail space, which is nearly 50% pre-leased, and more than 130
luxury apartments, as part of the Company's ongoing public-private partnership with the City of Virginia Beach.
• Sold the Oyster Point office building in Newport News, Virginia and agreed to acquire an 80,000 square foot grocery-
anchored retail center located in the greater Charlotte area of North Carolina. The Company expects to close on this
acquisition in the fourth quarter of 2016.
• Sold Kroger Junction, one of the non-core retail centers acquired as part of the 11-asset portfolio purchase
completed in January.
• The Company is raising its 2016 full-year Normalized FFO guidance range - now $0.99 to $1.01 per diluted share
from its previous guidance range of $0.96 to $1.00 per diluted share.
6
2016 Outlook
The Company is raising its 2016 full-year guidance and
now expects 2016 Normalized FFO in the range of $0.99
to $1.01 per diluted share. The following table outlines the
Company’s assumptions along with Normalized FFO per
share estimates for the full-year 2016.
[1] Excludes the impact of any future acquisitions other than the October retail
acquisition, dispositions or other capital markets activity, except for opportunistic sales
of additional shares under the ATM program, assuming favorable market conditions.
[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.” In addition, the calculation of Normalized FFO per diluted share assumes
50.2 million weighted average shares and units outstanding, including shares issued
under the ATM program and two million shares issued on October 13, 2016 for the
retail acquisition.
Full-year 2016 Guidance
[1]
Tot l NOI $67.3M $68.0M
Cons ruction company annual segment gross profit $5.1M $5.3M
General and administrative expenses $9.2M $9.4M
Interest income $3.1M $3.3M
Interest expense $16.2M $16.6M
Normalized FFO per diluted share
[2]
$0.99 $1.01
Expected Ranges
7
Summary Information
$ in thousands, except per share data
Three months ended
9/30/2016 6/30/2016 3/31/2016 12/31/2015 9/30/2015
OPERATIONAL METRICS
Net income $7,946 $3,131 $26,533 $8,443 $4,337
Net income per diluted share $0.15 $0.06 $0.57 $0.19 $0.10
Rental properties Net Operating Income (NOI) 17,115 16,798 15,605 14,713 14,382
General contracting and real estate services gross profit 1,278 1,175 1,766 1,106 2,106
Adjusted EBITDA (1) 16,720 16,077 14,406 12,903 14,341
Funds From Operations (FFO) 13,078 11,720 8,438 9,618 10,654
FFO per diluted share $0.25 $0.24 $0.18 $0.22 $0.25
Normalized FFO 13,156 12,530 11,566 10,614 10,996
Normalized FFO per diluted share $0.26 $0.26 $0.25 $0.24 $0.26
Annualized dividend yield 5.37% 5.24% 6.40% 6.49% 6.96%
CAPITALIZATION
Total common shares outstanding 34,256 32,825 31,095 30,076 26,261
Operating Partnership ("OP") units outstanding 17,793 17,597 16,027 16,027 16,043
Common shares and OP units outstanding 52,049 50,422 47,122 46,103 42,304
Market price per common share $13.40 $13.74 $11.25 $10.48 $9.77
Equity market capitalization(2) $697,457 $692,798 $530,123 $483,159 $413,310
Total debt(3) 519,209 512,702 471,876 382,013 421,442
Total market capitalization 1,216,666 1,205,500 1,001,999 865,172 834,752
Less: cash (27,361) (23,142) (22,505) (29,813) (19,434)
Total enterprise value $1,189,305 $1,182,358 $979,494 $835,359 $815,318
BALANCE SHEET METRICS
Core Debt/enterprise value 34.3% 35.4% 40.1% 37.0% 44.6%
Fixed charge coverage ratio 3.4x 3.3x 3.1x 3.1x 3.3x
Core Debt/Annualized Core EBITDA 6.4x 6.7x 6.9x 6.1x 6.6x
CORE PORTFOLIO OCCUPANCY
Office (4) 96.4% 94.6% 95.0% 95.8% 95.5%
Retail (4) 96.4% 96.0% 95.1% 95.5% 96.2%
Multifamily(5) 95.8% 94.3% 93.5% 94.2% 94.9%
Weighted Average (6) 96.2% 95.3% 94.7% 95.3% 95.6%
(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 occupied 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
8
Summary Balance Sheet
$ in thousands
9/30/2016 12/31/2015
Assets (Unaudited)
Real estate investments:
Income producing property $844,127 $579,000
Held for development 1,933 1,180
Construction in progress 13,895 53,411
Accumulated depreciation (133,288) (125,380)
Net real estate investments 726,667 508,211
Real estate investments held for sale - 40,232
Cash and cash equivalents 23,890 26,989
Restricted cash 3,471 2,824
Accounts receivable, net 15,100 21,982
Notes receivable 49,935 7,825
Construction receivables, including retentions 39,981 36,535
Costs and estimated earnings in excess of bil l ings 419 88
Equity method investments 10,360 1,411
Other assets 62,022 43,450
Total Assets $931,845 $689,547
Liabilities and Equity
Indebtedness, net $513,993 $377,593
Accounts payable and accrued liabilities 10,604 6,472
Construction payables, including retentions 51,203 52,067
Bil l ings in excess of costs and estimated earnings 6,560 2,224
Other l iabilities 39,517 25,471
Total Liabilities 621,877 463,827
Total Equity 309,968 225,720
Total Liabilities and Equity $931,845 $689,547
As of
9
Summary Income Statement
Amounts in thousands, except per share data
Three months ended Nine months Ended
9/30/2016 9/30/2015 9/30/2016 9/30/2015
Revenues (Unaudited)
Rental revenues $25,305 $21,303 $72,839 $59,401
General contracting and real estate services 38,552 53,822 108,555 129,959
Total Revenues 63,857 75,125 181,394 189,360
Expenses
Rental expenses 5,834 4,865 16,234 14,256
Real estate taxes 2,356 2,056 7,087 5,672
General contracting and real estate services 37,274 51,716 104,336 125,141
Depreciation and amortization 8,885 6,317 25,636 16,991
General and administrative 2,156 1,873 6,864 6,297
Acquisition, development & other pursuit costs 345 288 1,486 1,050
Impairment charges 149 - 184 23
Total Expenses 56,999 67,115 161,827 169,430
Operating Income 6,858 8,010 19,567 19,930
Interest income 1,024 - 1,928 -
Interest expense (4,124) (3,518) (11,893) (9,922)
Loss on extinguishment of debt (82) (3) (82) (410)
Gain on real estate dispositions 3,753 - 30,440 13,407
Change in fair value of interest rate derivatives 498 (51) (2,264) (238)
Other income 35 17 154 56
Income before taxes 7,962 4,455 37,850 22,823
I come tax benefit (provision) (16) (118) (240) (83)
Net Income $7,946 $4,337 $37,610 $22,740
Per Diluted Share $0.15 $0.10 $0.77 $0.56
Weighted Average Shares-Diluted 51,512 41,877 48,869 40,691
(1) See definitions on pages 28-30
(2) Excludes gain on non-operating real estate of $430K for the three months ended 3/31/2016
(3) Excludes first generation rental space
10
FFO, Normalized FFO & Adjusted FFO(1)
$ in thousands, except per share data
Three months ended
9/30/2016 6/30/2016 3/31/2016 12/31/2015 9/30/2015
Funds From Operations (Unaudited)
Net income $7,946 $3,131 $26,533 $8,443 $4,337
Earnings per diluted share $0.15 $0.06 $0.57 $0.19 $0.10
Depreciation and amortization 8,885 8,602 8,149 6,162 6,317
Gain on disposition of operating real estate(2) (3,753) (13) (26,244) (4,987) -
Real estate joint ventures - - - - -
FFO $13,078 $11,720 $8,438 $9,618 $10,654
FFO per diluted share $0.25 $0.24 $0.18 $0.22 $0.25
Normalized FFO
Acquisition, development & other pursuit costs 345 437 704 885 288
Loss on extinguishment of debt 82 - - 102 3
Impairment charges 149 - 35 18 -
Change in fair value of interest rate derivatives (498) 373 2,389 (9) 51
Normalized FFO $13,156 $12,530 $11,566 $10,614 $10,996
Normalized FFO per diluted share $0.26 $0.26 $0.25 $0.24 $0.26
Adjusted FFO
Non-cash stock compensation 212 215 437 176 173
Acquisition, development & other pursuit costs (345) (437) (704) (885) (288)
Tenant improvements, leasing commissions (3) (233) (1,365) (287) (509) (992)
Property related capital expenditures (514) (603) (390) (563) (640)
Non-cash interest expense 219 277 191 215 233
Net effect of straight-line rents (158) (194) (122) (134) (309)
Amortization of leasing incentives & above (below) market rents 116 (183) 6 174 170
Government development grants - - - - 300
AFFO $12,453 $10,240 $10,697 $9,088 $9,643
Weighted Average Common Shares Outstanding 33,792 31,736 30,191 27,411 25,958
Weighted Average Operating Partnership ("OP") Units Outstanding 17,720 17,113 16,027 16,027 15,919
Total Weighted Average Common Shares and OP Units Outstanding 51,512 48,849 46,218 43,438 41,877
11
Outstanding Debt
$ in thousands
30 Day LIBOR 0.524%
(1) Subject to an interest rate swap lock.
(2) Includes debt subject to interest rate swap locks.
(3) Excludes debt subject to interest rate swap locks.
Debt Maturities & Principal Payments
Debt Stated Rate
Effective Rate as of
9/30/2016 Maturity Date 2016 2017 2018 2019 2020 Thereafter
Amount Outstanding
as of 9/30/2016
Secured Notes Payable - Core Debt
North Point Note 5 L+2.00% 3.57% (1) 2/1/2017 $6 $643 $649
Harrisonburg Regal 6.06% 6.06% 6/8/2017 53 3,256 3,309
Commonwealth of Virginia - Chesapeake L+1.90% 2.42% 8/28/2017 4,933 4,933
Hanbury Village 6.67% 6.67% 10/11/2017 68 20,709 20,777
Sandbridge Commons L+1.85% 2.37% 1/17/2018 59 247 9,129 9,435
Columbus Village Note 1 L+2.00% 3.05% (1) 4/5/2018 45 178 6,080 6,303
Columbus Village Note 2 L+2.00% 2.52% 4/5/2018 11 47 2,218 2,276
North Point Center Note 1 6.45% 6.45% 2/5/2019 49 205 219 9,352 9,825
Southgate Square L+2.00% 2.52% 4/29/2021 391 539 561 584 19,075 21,150
249 Central Park Retail L+1.95% 2.47% 9/10/2021 69 216 229 243 258 16,117 17,132
South Retail L+1.95% 2.47% 9/10/2021 29 95 101 107 113 7,072 7,517
Fountain Plaza Retail L+1.95% 2.47% 9/10/2021 40 130 138 147 156 9,703 10,314
Encore Apartments 3.25% 3.25% 9/10/2021 124 504 24,351 24,966
Socastee Commons 4.57% 4.57% 1/6/2023 23 95 100 105 109 4,458 4,890
North Point Center Note 2 7.25% 7.25% 9/15/2025 24 105 113 121 130 2,095 2,589
Smith's Landing 4.05% 4.05% 6/1/2035 204 760 791 824 858 17,257 20,694
Liberty Apartments 5.66% 5.66% 11/1/2043 80 325 344 364 385 18,586 20,084
The Cosmopolitan 3.75% 3.75% 7/1/2051 161 660 686 712 739 43,087 46,045
Total - Secured Core Debt $922 $32,995 $20,687 $12,660 $3,836 $161,801 $232,888
Secured Notes Payable - Development Pipeline
4525 Main Street 3.25% 3.25% 9/10/2021 158 646 31,217 32,034
Lightfoot Marketplace L+1.90% 2.42% 11/14/2017 11,469 11,469
Johns Hopkins Village L+1.90% 2.42% 7/30/2018 40,818 40,818
Total - Development Pipeline - 11,469 40,818 158 646 31,217 84,321
Total Secured Notes Payable $922 $44,464 $61,505 $12,818 $4,482 $193,018 $317,209
Unsecured Core Debt
Senior unsecured line of credit L+1.40% - 2.00% 2.07% 2/20/2019 102,000 102,000
Senior unsecured term loan L+1.35% - 1.95% 2.02% 2/20/2020 50,000 50,000
Senior unsecured term loan L+1.35% - 1.95% 3.50% (1) 2/20/2020 50,000 50,000
Total - Unsecured Core Debt - - - 102,000 100,000 - 202,000
Total Notes Payable excluding GAAP Adjustments $922 $44,464 $61,505 $114,818 $104,482 $193,018 $519,209
Weighted Average Interest Rate 4.3% 4.8% 2.6% 2.5% 2.8% 3.5% 3.1%
Balloon Payments - 40,707 57,909 111,333 100,000 111,841 421,790
Principal amortization 922 3,757 3,596 3,485 4,482 81,177 97,419
Total Consolidated Debt $922 $44,464 $61,505 $114,818 $104,482 $193,018 $519,209
Fixed-rate Debt(2) 714 26,936 8,333 11,760 53,371 141,051 242,165
Variable-rate Debt(3) 208 17,528 53,172 103,058 51,111 51,967 277,044
Total Consolidated Debt $922 $44,464 $61,505 $114,818 $104,482 $193,018 $519,209
GAAP Adjustments (5,216)
Total Notes Payable $513,993
12
Core Debt to Core EBITDA(1)
$ in thousands
Three months ended
9/30/2016 6/30/2016 3/31/2016 12/31/2015 9/30/2015
Net Income $7,946 $3,131 $26,533 $8,443 $4,337
Excluding:
Interest expense 4,124 3,978 3,791 3,411 3,518
Income tax 16 6 218 (117) 118
Depreciation and amortization 8,885 8,602 8,149 6,162 6,317
Gain on real estate dispositions (3,753) (13) (26,674) (4,987) -
Change in fair value of interest rate derivatives (498) 373 2,389 (9) 51
Adjusted EBITDA $16,720 $16,077 $14,406 $12,903 $14,341
Other adjustments:
Loss on extinguishment of debt 82 - - 102 3
Non-cash stock compensation 212 215 437 176 173
Development Pipeline (1,058) (719) (620) (606) (738)
Total Other Adjustments (764) (504) (183) (328) (562)
Core EBITDA $15,956 $15,573 $14,223 $12,575 $13,779
Total Debt(2) $519,209 $512,702 $471,876 $382,013 $421,442
Adjustments to Debt:
(Less) Development Pipeline(2) (84,321) (71,035) (56,592) (43,340) (37,987)
(Less) Cash & restricted cash (27,361) (23,142) (22,505) (29,813) (19,434)
Core Debt $407,527 $418,525 $392,779 $308,860 $364,021
Core Debt/Annualized Core EBITDA 6.4x 6.7x 6.9x 6.1x 6.6x
(1) See definitions on page 30
(2) Excludes GAAP Adjustments
13
Debt Information
$ in thousands
(1) Excludes debt subject to interest rate swap locks.
(2) Includes debt subject to interest rate swap locks.
(3) Excludes GAAP adjustments.
(4) Includes interest rate caps less than or equal to 1.50%
Fixed-rate&
Hedged Debt (4)
99%
Total Debt Composition
Weighted Average
Percent of Debt Interest Rate Maturity
Secured vs. Unsecured Debt
Unsecured Debt 39.3% 2.4% 2.9 Yrs
Secured Debt 60.7% 3.6% 10.4 Yrs
Variable vs. Fixed-rate Debt
Variable-rate Debt(1) 53.4% 2.2% 2.9 Yrs
Fixed-rate Debt(2)(3) 46.6% 4.2% 12.8 Yrs
Fixed-rate and Hedged Debt(2)(3)(4) 98.6%
Total 3.1% 7.5 Yrs
Interest Rate Cap Agreements At or Below 1.50%
Effective Date Maturity Date Strike Rate Notional Amount
March 14, 2014 March 1, 2017 1.25% $50,000
October 26, 2015 October 15, 2017 1.25% 75,000
March 1, 2016 March 1, 2018 1.50% 75,000
June 17, 2016 June 17, 2018 1.00% 70,000
Total Interest Rate Caps at or Below 1.50% $270,000
Fixed-rate Debt (2)(3) 242,165
Fixed-rate and Hedged Debt $512,165
% of Total (3) 98.6%
$0
$50,000
$100,000
$150,000
$200,000
$250,000
2016 2017 2018 2019 2020 2021 and
thereafter
($
In
Th
ou
sa
nd
s)
Debt turities & Principal Payments
14
Capitalization & Financial Ratios
$ in thousands
Capitalization as of September 30, 2016 Capital Structure as of September 30, 2016
Debt % of Total Carrying Value
Unsecured Credit Facility 20% $102,000
Unsecured Term Loans 19% 100,000
Mortgages Payable 61% 317,209
Total Debt $519,209
Equity % of Total Shares/Units Stock Price Market Value
Common Stock (NYSE: AHH) 66% 34,256 $13.40 $459,030
Common Units 34% 17,793 $13.40 238,426
Equity Market Capitalization 52,049 $697,457
Total Market Capitalization $1,216,666
Debt/Market Capitalization 42.7%
Dividend Data Liquidity as of September 30, 2016
Q3 2016 Q3 2015
Common Dividend Paid $8,837 $6,906 Cash on Hand $27,361
AFFO $12,453 $9,643 Availability under Credit Facility 48,000
AFFO Payout Ratio 71.0% 71.6% $75,361
Debt
43%Common
57%
15
Property Portfolio
As of 9/30/16
(1) The net rentable square footage for each of our retail properties is the sum of (a) the square footage of existing leases, plus (b) for available space, the field verified square footage.
(2) Occupancy for each of our retail properties is calculated as (a) square footage under executed leases as of September 30, 2016, divided by (b) net rentable square feet, expressed as a percentage.
(3) For the properties in our retail portfolio, annualized base rent, or ABR, is calculated by multiplying (a) base rental payments for executed leases as of Sept 30, 2016 (defined as cash base rents before
abatements) excluding tenant reimbursements for expenses paid by the landlord), by (b) 12. ABR per leased square foot is calculated by dividing (a) ABR, by (b) square footage under executed leases as
of September 30, 2016 . In the case of triple net or modified gross leases, ABR does not include tenant reimbursements for real estate taxes, insurance, common area or other operating expenses.
Excludes the square footage of land subject to ground leases.
(4) As of September 30, 2016, the Company occupied 8,995 square feet at this property at an ABR of $304,841, or $33.89 per leased square foot, which amounts are reflected in this table. The rent paid by us
is eliminated in accordance with GAAP.
(5) Includes $32,760 of ABR pursuant to a rooftop lease.
Property Anchor Tenant Location
Town
Center
Unencumbered
ABR Year Built
Core
Properties
Development
Properties
Net Rentable
Square Feet(1)
Core
Occupancy (2)
Development
Leased(2) ABR (3)
ABR per
Leased SF(3)
Retail Properties - Excluding Properties Subject to Ground Lease
249 Central Park Retail (4) Cheesecake Factory, Brooks Brothers,
Gordon Biersch
Virginia Beach, VA - 2004 91,366 - 91,366 89.8% - $2,358,091 $28.75
Alexander Pointe Harris Teeter Salisbury, NC 100% 1997 57,710 - 57,710 97.6% - 647,322 11.50
Bermuda Crossroads Food Lion, OfficeMax Chester, VA 100% 2001 111,566 - 111,566 100.0% - 1,583,406 14.19
Broad Creek Shopping Center Home Depot, Food Lion, PetSmart Norfolk, VA 100% 1997/2001 227,659 - 227,659 99.3% - 3,188,069 14.10
Broadmoor Plaza Kroger, Staples, Jo-Ann Fabrics South Bend, IN 100% 1980 115,059 - 115,059 93.2% - 1,267,990 11.82
Columbus Village Barnes & Noble Virginia Beach, VA - 1980/2013 66,594 - 66,594 98.7% - 1,346,501 20.48
Commerce Street Retail (5) Yard House Virginia Beach, VA 100% 2008 19,173 - 19,173 100.0% - 794,740 41.45
Courthouse 7-Eleven 7-Eleven Virginia Beach, VA 100% 2011 3,177 - 3,177 100.0% - 125,015 39.35
Dick's at Town Center Dick's Sporting Goods, USI Virginia Beach, VA 100% 2002 103,335 - 103,335 100.0% - 1,231,340 11.92
Dimmock Square Best Buy, Old Navy Colonial Heights, VA 100% 1998 106,166 - 106,166 97.2% - 1,733,856 16.81
Fountain Plaza Retail Ruth's Chris, Ann Taylor Virginia Beach, VA - 2004 35,961 - 35,961 100.0% - 1,022,787 28.44
Gainsborough Square Food Lion, Rite Aid Chesapeake, VA 100% 1999 88,862 - 88,862 90.7% - 1,216,489 15.10
Greentree Shopping Center Wawa Chesapeake, VA 100% 2014 15,751 - 15,751 85.7% - 285,941 21.17
Hanbury Village Walgreens, Starbucks Chesapeake, VA 32% 2006/2009 61,049 - 61,049 92.8% - 1,355,478 23.92
Harper Hill Commons Harris Teeter Winston-Salem, NC 100% 2004 55,394 - 55,394 63.8% - 507,774 14.36
Harrisonburg Regal Regal Cinemas Harrisonburg, VA - 1999 49,000 - 49,000 100.0% - 683,550 13.95
Lightfoot Marketplace Harris Teeter Williamsburg, VA - 2016 - 55,893 55,893 - 49.4% 601,665 21.80
North Hampton Market PetSmart, Hobby Lobby, Dollar Tree Taylors, SC 100% 2004 114,935 - 114,935 97.2% - 1,397,087 12.50
North Point Center Kroger, PetSmart, BB&B, Costco Durham, NC 52% 1998/2009 215,690 - 215,690 95.9% - 2,528,866 12.22
Oakland Marketplace Kroger Oakland, TN 100% 2004 19,600 - 19,600 85.7% - 252,280 15.02
Parkway Marketplace Rite Aid Virginia Beach, VA 100% 1998 37,804 - 37,804 95.2% - 712,397 19.79
Patterson Place Bed Bath & Beyond, PetSmart Durham, NC 100% 2004 160,942 - 160,942 98.3% - 2,497,643 15.79
Perry Hall Marketplace Safeway Perry Hall, MD 100% 2001 74,256 - 74,256 100.0% - 1,243,444 16.75
Providence Plaza Edward Jones, Chipotle, Choate Const. Charlotte, NC 100% 2007/2008 103,118 - 103,118 94.1% - 2,446,619 25.21
Sandbridge Commons Heartland Dental Virginia Beach, VA - 2015 16,129 - 16,129 100.0% - 327,710 20.32
Socastee Commons Bi-Lo Myrtle Beach, SC - 2000/2014 57,573 - 57,573 97.4% - 638,616 11.39
South Retail lululemon, free people Virginia Beach, VA - 2002 38,515 - 38,515 100.0% - 948,670 24.63
South Square Ross, Petco, Office Depot Durham, NC 100% 1977/2005 107,812 - 107,812 100.0% - 1,829,556 16.97
Southgate Square Burlington, PetSmart, Michaels Colonial Heights, VA - 1991/2016 223,131 - 223,131 100.0% - 2,941,776 13.18
Southshore Shops Buffalo Wild Wings Midlothian, VA 100% 2006 40,333 - 40,333 93.1% - 729,763 19.43
Stone House Square Weis Markets Hagerstown, MD 100% 2008 108,624 - 108,624 90.4% - 1,566,916 15.95
Studio 56 Retail McCormick & Schmick's Virginia Beach, VA 100% 2007 11,594 - 11,594 100.0% - 375,628 32.40
Waynesboro Commons Kroger Waynesboro, VA 100% 1993 52,415 - 52,415 100.0% - 438,464 8.37
Wendover Village Bed Bath & Beyond, T.J. Maxx, Petco Greensboro, NC 100% 2004 135,758 - 135,758 100.0% - 1,954,542 14.40
Total / Weighted Avg Retail Portfolio 70% 2,726,051 55,893 2,781,944 96.4% 49.4% $42,779,991 $16.12
16
Property Portfolio - Continued
As of 9/30/16
(1) The net rentable square footage for each of our office properties is the sum of (a) the square footage of existing leases, plus (b) for available space, management’s estimate of net rentable square footage based, in part,
on past leases. The net rentable square footage included in office leases is generally consistent with the Building Owners and Managers Association, or BOMA, 1996 measurement guidelines.
(2) Occupancy for each of our office properties is calculated as (a) square footage under executed leases as of September 30, 2016, divided by (b) net rentable square feet, expressed as a percentage. Occupancy for our
multifamily properties is calculated as (a) total units occupied as of September 30, 2016, divided by (b) total units available, expressed as a percentage.
(3) For the properties in our office portfolio, annualized base rent, or ABR, is calculated by multiplying (a) base rental payments for executed leases as of September 30, 2016 (defined as cash base rents (before
abatements) excluding tenant reimbursements for expenses paid by the landlord), by (b) 12. ABR per leased square foot is calculated by dividing (a) ABR, by (b) square footage under executed leases as of September
30, 2016. In the case of triple net or modified gross leases, ABR does not include tenant reimbursements for real estate taxes, insurance, common area or other operating expenses.
(4) As of September 30, 2016, the Company occupied 18,984 square feet at this property at an ABR of $573,596 or $30.21 per leased square foot, which amounts are reflected in this table. The rent paid by us is eliminated
in accordance with GAAP. In addition, effective March 1, 2013, the Company subleases approximately 5,000 square feet of space from a tenant at this property.
(5) Pursuant to this ground lease, the Company owns the land and the tenant owns the improvements thereon. The Company will succeed to the ownership of the improvements to the land upon the termination of the
ground lease.
(6) The Company leases the land underlying this property and re-leases it to our tenant under a ground lease pursuant to which our tenant owns the improvements on the land.
(7) For the properties in our multifamily portfolio, annualized base rent, or ABR, is calculated by multiplying (a) base rental payments for the month ended September 30, 2016 by (b) 12.
(8) ABR per occupied rentable square foot is calculated by dividing (a) ABR, by (b) net rentable square footage of occupied units as of September 30, 2016.
(9) The ABR for Liberty, Cosmopolitan, Johns Hopkins Village excludes $206,000, $916,000, $907,875 from ground floor retail leases, respectively.
(10) The Company leases the land underlying this property pursuant to a ground lease.
Net Rentable Square Feet (RSF)(1)
Property Anchor Tenant Location
Town
Center
Unencumbered
ABR Year Built
Core
Properties
Development
Properties Total
Core
Occupancy (2)
Development
Leased(2) ABR (3)
ABR per Leased
SF(3)
Office Properties
4525 Main Street Clark Nexsen, Anthropologie, West Elm Virginia Beach, VA - 2014 - 237,893 237,893 - 57.8% $3,840,876 $27.96
Armada Hoffler Tower(4) AHH, Troutman Sanders, Will iams Mullen Virginia Beach, VA 100% 2002 323,970 - 323,970 98.3% - 8,951,468 28.12
Commonwealth of VA - Chesapeake Commonwealth of VA Chesapeake, VA - 2015 36,227 - 36,227 100.0% - 645,927 17.83
Commonwealth of VA - Virginia Beach Commonwealth of VA Virginia Beach, VA 100% 2015 11,139 - 11,139 100.0% - 245,058 22.00
One Columbus BB&T, HBA Virginia Beach, VA 100% 1984 129,272 - 129,272 92.5% - 2,937,288 24.55
Two Columbus The Art Institute, Kimley-Horn Virginia Beach, VA 100% 2009 108,467 - 108,467 93.8% - 2,757,279 27.09
Total / Weighted Average Office Portfolio 77% 609,075 237,893 846,968 96.4% 57.8% $19,377,897 $26.75
Properties Subject to Ground Lease
Bermuda Crossroads (5) IHOP, O'Charley's Chester, VA - 2001 11,000 - 11,000 100.0% - $163,350 $14.85
Broad Creek Shopping Center (6) 7-Eleven, Ruby Tuesdays, Home Depot Norfolk, VA - 1997/2001 24,818 - 24,818 100.0% - 577,081 23.25
Greentree Shopping Center Wawa Chesapeake, VA - 2014 5,088 - 5,088 100.0% - 230,004 45.21
Hanbury Village(5) Harris Teeter, Walgreens Chesapeake, VA - 2006/2009 55,586 - 55,586 100.0% - 1,067,598 19.21
Harper Hill Commons Harris Teeter Winston-Salem, NC 100% 2004 41,520 - 41,520 100.0% - 373,680 9.00
Lightfoot Marketplace Harris Teeter Williamsburg, VA - 2016 - 51,750 51,750 - 100.0% 641,700 12.40
Oakland Marketplace Kroger Oakland, TN 100% 2004 45,000 - 45,000 100.0% - 186,300 4.14
North Point Center(5) Home Depot, Costco Durham, NC 15% 1998/2009 280,556 - 280,556 100.0% - 1,083,666 3.86
Sandbridge Commons Harris Teeter Virginia Beach, VA - 2015 53,288 - 53,288 100.0% - 583,000 10.94
South Square Chick-fil-A Durham, NC 100% 1977/2005 1,778 - 1,778 100.0% - 60,000 33.75
Stone House Square Capitol One Bank Hagerstown, MD 100% 2008 3,650 - 3,650 100.0% - 165,000 45.21
Tyre Neck Harris Teeter(6) Harris Teeter Portsmouth, VA 100% 2011 48,808 - 48,808 100.0% - 508,134 10.41
Total / Weighted Avg Retail Portfolio Subject to Ground Leases 26% 571,092 51,750 622,842 100.0% 100.0% $5,639,513 $9.05
Units
Multifamily Location
Town
Center
Unencumbered
ABR Year Built
Core
Properties
Development
Properties Total
Core
Occupancy (2)
Development
Occupancy(2) ABR (7)
ABR per
Occupied RSF(8)
Encore Apartments Virginia Beach, VA - 2014 286 - 286 95.5% - $4,157,232 $1.76
Johns Hopkins Village(9) Baltimore, MD - 2016 - 157 157 - 77.7% 6,044,640 2.79
Liberty Apartments (9) Newport News, VA - 2014 197 - 197 95.2% - 2,509,428 1.56
Smith's Landing(10) Blacksburg, VA - 2009 284 - 284 100.0% - 3,686,868 1.14
The Cosmopolitan (9) Virginia Beach, VA - 2006 342 - 342 93.0% - 6,021,456 1.65
Total / Weighted Avg Multifamily Portfolio - 1,109 157 1,266 95.8% 77.7% $22,419,624 $1.72
17
Development Pipeline
$ in thousands
Johns Hopkins Village
Lightfoot Marketplace
One City Center
Point Street Apts.
(1) Represents estimates that may change as the development process proceeds
(2) First full stabilized quarter
(3) AHH earns a preferred return on equity prior to any distributions to JV Partners
Q3 2016 Year to Date
Capitalized Interest $290 $927
Capitalized Overhead $449 $1,145
Schedule(1)
Development, Not Delivered
Property
Type Estimated(1) % Leased Start
Initial
Occupancy
Stabilized
Operation (2)
Estimated
Cost(1)
Cost to
Date
AHH
Ownership % Anchor Tenants & Other Notes
Harding Place
Charlotte, NC
Multifamily 225 Units NA 3Q16 3Q18 1Q20 $45,000 $6,000 80%(3) NA
Town Center Phase VI
Virginia Beach, VA
Mixed-use 39,000 SF
130 Units
46% 4Q16 3Q18 3Q19 41,000 2,000 80% Anchor tenants not yet announced
Total Development, Not Delivered 86,000 8,000
Development, Delivered Not Stabilized
Brooks Crossing
Newport News, VA
Retail 18,000 sf 60% 3Q15 3Q16 4Q16 3,000 3,000 65%(3) Misc. small shops
4525 Main Street
Virginia Beach, VA
Office 239,000 sf 64% 1Q13 3Q14 2Q17 51,000 46,000 100% Clark Nexsen, Development Authority
of Virginia Beach, Anthropologie
Johns Hopkins Village
Baltimore, MD
Multifamily 157 units 72% 1Q15 3Q16 3Q17 68,000 65,000 80%(3) CVS
Lightfoot Marketplace
Will iamsburg, VA
Retail 109,000 sf 71% 3Q14 3Q16 2Q17 24,000 22,000 70%(3) Harris Teeter, CHKD
Total Development, Delivered Not Stabilized 146,000 136,000
Total $232,000 $144,000
Joint Ventures - Minority Partner Project Cost
Equity
Investment
One City Center - 37% JV
Durham, NC
Mixed-use 152,000 sf 36% 1Q16 2Q18 2Q19 $36,000 $10,000 100% Duke University.
AHH Equity requirement $10M.
Mezzanine Investments
Purchase
Option Price
Loan
Balance
Point Street Apartments
Inner Harbor Baltimore,
MD
Multifamily 289 units NA 1Q16 4Q17 4Q18 $92,000 $19,000 Option to purchase
88% upon completion
$23M Mezzanine financing by AHH,
earning 8% interest income
Annapolis Junction
Annapolis Junction, MD
Multifamily 416 units NA 2Q16 1Q18 2Q19 102,000 31,000 Option to purchase
88% upon completion
$42M Mezzanine financing by AHH,
earning 10% interest income
Total Mezzanine Investment $194,000 $50,000
18
Acquisitions & Dispositions
$ in thousands
(1) Contractual purchase price
(2) Value of OP Units/Stock at issuance
(3) Anchor tenant vacated 9/30/16, which would represent a 2.5% Cash Cap Rate
ACQUISITIONS
Properties Location Square Feet Purchase Price (1)
Reinvested
1031 Proceeds
$ Value of
OP Units/Stock (2)
Cash Cap
Rate Purchase Date
% Leased as of
9/30/16 Anchor Tenants
Southshore Shops Midlothian, VA 40,333 $9,160 - $2,475 7.8% 3Q16 93% Buffalo Wild Wings
Southgate Square Colonial Heights, VA 220,131 $38,585 - $17,485 7.3% 2Q16 100% PetSmart, Michael's, Burlington
Retail Portfolio (11 properties) Mid-Atlantic 1,082,681 $170,500 $87,000 - 7.2% 1Q16 94% Harris Teeter, Bed Bath & Beyond
Providence Plaza Charlotte, NC 103,118 $26,200 $14,000 - 7.3% 3Q15 97% Chipotle
Socastee Commons Myrtle Beach, SC 57,573 $8,600 $3,600 - 7.3% 3Q15 100% BiLo
Columbus Village Virginia Beach, VA 65,746 $21,025 - $14,025 6.4% 3Q15 100% Barnes & Noble
Perry Hall Marketplace & Stone
House Square
Maryland 182,949 $39,555 $15,200 $4,155 7.4% 2Q15 93% Safeway & Weis Markets
Dimmock Square Colonial Heights, VA 106,166 $19,662 - $9,662 7.3% 3Q14 100% Old Navy, Best Buy, Pier 1
Total/Weighted Average 1,858,697 $333,287 119,800.00 $47,801 7.8%
DISPOSITIONS
Properties Location
Square
Feet/Units Sale Price Cash Proceeds Gain on Sale
Cash Cap
Rate Disposition Date
% Leased at
closing Anchor Tenants
Oyster Point Newport News, VA 100,139 $6,500 - $3,793 16.4% (3) 3Q16 82% GSA
Non-Core Retail Portfolio Various 174,758 $12,850 $12,600 ($27) 7.1% 2Q16 - 3Q16 ~85% Kroger, Family Dollar
Richm nd Tower Richmond, VA 206,969 $78,000 $77,000 $26,674 7.9% 1Q16 99% Williams Mullen
Oceaneering Chesapeake, VA 154,000 $30,000 $10,000 $4,987 6.7% 4Q15 100% Oceaneering International
Whetstone Apartments Durham, NC 203 units $35,625 $17,600 $7,210 5.7% 2Q15 26% NA
Sentara Williamsburg Williamsburg, VA 49,200 $15,450 $15,200 $6,197 6.3% 1Q15 100% Sentara
Virginia Natural Gas Virginia Beach, VA 31,000 $8,900 $7,400 $2,211 6.3% 4Q14 100% Virginia Natural Gas
Total/Weighted Average 716,066sf/
203 units
$187,325 $139,800 $51,045 7.3%
19
Construction Business Summary
$ in thousands
Gross Profit Summary
Q3 2016
Trailing 12
Months
Revenue $38,552 $149,864
Expense (37,274) (144,539)
Gross Profit $1,278 $5,325
(Unaudited)
Location
Total Contract
Value
Work in Place as
of 9/30/2016 Backlog
Estimated Date
of Completion
Highlighted Projects
Exelon Baltimore, MD $182,932 $179,930 $3,002 3Q 2016
Four Seasons Condominium Expansion Baltimore, MD 72,182 42,063 30,119 2Q 2017
Point Street Apartments Baltimore, MD 71,382 15,592 55,790 1Q 2018
Annapolis Junction Annapolis Junction, MD 68,781 9,055 59,726 1Q 2018
Durham City Center Durham, NC 61,962 9,591 52,371 2Q 2018
27th Street Hotel Virginia Beach, VA 51,079 31,563 19,516 2Q 2017
Sub Total $508,318 $287,794 $220,524
All Other Projects 136,134 110,226 25,908
Total $644,452 $398,020 $246,432
(1) See page 31 for Same Store vs. Non – Same Store Properties
20
Same Store NOI by Segment
$ in thousands
(Reconciliation to GAAP located in appendix pg. 32)
Three months ended Nine months ended
9/30/2016 9/30/2015 $ Change % Change 9/30/2016 9/30/2015 $ Change % Change
Office(1) (Unaudited) (Unaudited)
Revenue $3,883 $3,838 $45 1.2% $11,671 $11,669 $2 0.0%
Expenses 1,443 1,413 30 2.1% 4,103 4,292 (189) -4.4%
Net Operating Income 2,440 2,425 15 0.6% 7,568 7,377 191 2.6%
Retail(1)
Revenue 8,211 7,907 304 3.8% 19,688 19,352 336 1.7%
Expenses 2,295 2,194 101 4.6% 5,684 5,581 103 1.8%
Net Operating Income 5,916 5,713 203 3.6% 14,004 13,771 233 1.7%
Multifamily(1)
Revenue 3,075 3,105 (30) -1.0% 9,145 9,069 76 0.8%
Expenses 1,396 1,342 54 4.0% 4,016 3,913 103 2.6%
Net Operating Income 1,679 1,763 (84) -4.8% 5,129 5,156 (27) -0.5%
Same Store Net Operating Income (NOI) $10,035 $9,901 $134 1.4% $26,701 $26,304 $397 1.5%
Net effect of straight-line rents 48 (58) 106 280 179 101
Amortization of lease incentives and above (below) market rents 164 173 (9) 391 369 22
Same store portfolio NOI, cash basis $10,247 $10,016 $231 2.3% $27,372 $26,852 $520 1.9%
NOI, Cash Basis:
Office $2,447 $2,338 $109 4.7% $7,519 $7,336 $183 2.5%
Retail 6,111 5,893 218 3.7% 14,684 14,270 414 2.9%
Multifamily 1,689 1,785 (96) -5.4% 5,169 5,246 (77) -1.5%
$10,247 $10,016 $231 2.3% $27,372 $26,852 $520 1.9%
NOI:
Office $2,440 $2,425 $15 0.6% $7,568 $7,377 $191 2.6%
Retail 5,916 5,713 203 3.6% 14,004 13,771 233 1.7%
Multifamily 1,679 1,763 (84) -4.8% 5,129 5,156 (27) -0.5%
$10,035 $9,901 $134 1.4% $26,701 $26,304 $397 1.5%
21
Top 10 Tenants - Annualized Base Rent
$ in thousands
As of September 30, 2016
Office Portfolio
Tenant
Number
of Leases
Lease
Expiration
Annualized
Base Rent
% of Office Portfolio
Annualized Base Rent
% of Total Portfolio
Annualized Base Rent
Clark Nexsen 1 2029 $ 2,487 12.8% 2.8%
Williams Mullen 1 2018 1,524 7.9% 1.7%
Hampton University 2 2024 1,003 5.2% 1.1%
Commonwealth of Virginia 2 2030 891 4.6% 1.0%
Pender & Coward 1 2030 839 4.3% 0.9%
Troutman Sanders 2 2025 822 4.2% 0.9%
The Art Institute 3 2019 819 4.2% 0.9%
Kimley-Horn 2 2018 724 3.7% 0.8%
City of Va Beach Development Authority 1 2024 701 3.6% 0.8%
Cherry Bekaert 1 2022 688 3.6% 0.8%
Top 10 Total $ 10,499 54.2% 11.6%
Retail Portfolio
Tenant
Number
of Leases
Lease
Expiration
Annualized
Base Rent
% of Retail Portfolio
Annualized Base Rent
% of Total Portfolio
Annualized Base Rent
Kroger/Harris Teeter 10 2027 $ 5,183 10.7% 5.7%
Home Depot 2 2019 2,190 4.5% 2.4%
Food Lion 3 2020 1,283 2.6% 1.4%
PetSmart 4 2020 1,117 2.3% 1.2%
Bed Bath & Beyond 3 2022 1,077 2.2% 1.2%
Dick's Sporting Goods 1 2020 840 1.7% 0.9%
Safeway 2 2021 821 1.7% 0.9%
Weis Markets 1 2028 802 1.7% 0.9%
Ross Dress for Less 2 2020 755 1.6% 0.8%
Petco 3 2024 739 1.5% 0.8%
Top 10 Total $ 14,806 30.6% 16.4%
22
Office Lease Summary
22
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
Q3 2016 - - - - - - 0.0% - - 0.0% - -
Q2 2016 1 2,318 2 3,870 33.27 26.53 25.4% 30.00 28.41 5.6% 10.00 -
Q1 2016 2 6,445 - - 21.34 19.60 8.9% 21.10 20.38 3.5% 1.65 3,773
Q4 2015 2 5,708 2 3,947 24.50 23.50 4.3% 24.39 23.68 3.0% 1.31 3,682
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
Q3 2016 1 2,153 $25.00 3.08 $11,810 $5.49
Q2 2016 1 1,806 25.00 5.00 63,579 35.20
Q1 2016 2 3,773 27.49 6.91 139,067 36.86
Q4 2015 2 9,920 30.13 7.17 421,094 42.45
(1) Excludes new leases from properties in development
23
Office Lease Expirations
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
-
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
200,000
Leased Square Feet % ABR of Office Portfolio
Year of Lease Expiration
Number of
Leases
Expiring
Square Footage
of Leases
Expiring (1)
% Portfolio
Net Rentable
Square Feet
Annualized
Base Rent
% of Portfolio
Annualized
Base Rent
Annualized Base
Rent per Leased
Square Foot
Available - 122,464 14.5% -$ -$ -$
2016 1 777 0.1% 13,986 0.1% 18.00
2017 7 13,382 1.6% 421,754 2.2% 31.52
2018 18 156,646 18.5% 4,516,371 23.3% 28.83
2019 15 100,492 11.9% 2,490,286 12.9% 24.78
2020 3 17,840 2.1% 522,209 2.7% 29.27
2021 5 44,933 5.3% 1,166,237 6.0% 25.96
2022 4 49,923 5.9% 1,383,217 7.1% 27.71
2023 4 43,078 5.1% 1,087,325 5.6% 25.24
2024 3 60,751 7.2% 1,686,383 8.7% 27.76
2025 4 43,292 5.1% 1,218,282 6.3% 28.14
2026 3 20,722 2.4% 482,437 2.5% 23.28
Thereafter 8 172,668 20.3% 4,389,409 22.7% 25.42
Total / Weighted Average 75 846,968 100.0% 19,377,897$ 100.0% $26.75
(1) Includes new leases from properties in development
24
Retail Lease Summary
(1) Excludes new leases from properties in development
Renewal Lease Summary GAAP Cash
Quarter
Number of
Leases
Signed
Net rentable
SF Signed
Leases
Expiring
Net rentable SF
Expiring
Contractual
Rent per SF
Prior Rent
per SF
Releasing
Spread
Contractual
Rent per SF
Prior Rent
per SF
Releasing
Spread
Weighted
Average Lease
Term (yrs)
Q3 2016 14 80,526 10 22,340 $16.84 $15.69 7.3% $16.36 $15.80 3.5% 7.00
Q2 2016 25 98,300 14 33,111 18.28 17.32 5.5% 17.99 17.55 2.5% 6.36
Q1 2016 10 26,870 1 1,800 22.70 21.29 6.6% 22.21 21.78 1.9% 3.37
Q4 2015 6 33,274 4 27,146 20.63 18.73 10.1% 20.55 19.45 5.6% 4.54
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
Q3 2016 3 14,341 $14.03 6.52 $262,134 $18.28
Q2 2016 4 5,560 21.24 7.31 162,432 29.21
Q1 2016 4 11,913 19.68 5.10 431,103 36.19
Q4 2015 4 24,825 21.83 6.64 421,094 16.96
25
Retail Lease Expirations
Year of Lease Expiration
Number of
Leases
Expiring
Square Footage
of Leases
Expiring (1)
% Portfolio
Net Rentable
Square Feet
Annualized
Base Rent
% of Portfolio
Annualized
Base Rent
Annualized Base
Rent per Leased
Square Foot
Available - 127,376 3.7% -$ -$ -$
M-T-M 5 7,342 0.2% 118,656 0.2% 16.16
2016 15 44,425 1.3% 790,527 1.6% 17.79
2017 42 172,310 5.1% 2,676,013 5.5% 15.53
2018 69 325,814 9.6% 5,239,666 10.8% 16.08
2019 76 551,941 16.2% 8,312,918 17.2% 15.06
2020 61 508,328 14.9% 7,082,103 14.6% 13.93
2021 45 249,213 7.3% 4,553,570 9.4% 18.27
2022 22 218,491 6.4% 3,113,990 6.4% 14.25
2023 14 246,153 7.2% 3,019,432 6.2% 12.27
2024 14 156,518 4.6% 2,502,096 5.2% 15.99
2025 15 223,613 6.6% 2,259,666 4.7% 10.11
2026 17 149,286 4.4% 2,501,465 5.2% 16.76
Thereafter 22 423,976 12.5% 6,249,402 12.9% 14.74
Total / Weighted Average 417 3,404,786 100.0% 48,419,504$ 100.0% $14.77
(1) Includes new leases from properties in development
26
Net Asset Value Component Data
In thousands
(1) Includes leases for space occupied by Armada Hoffler which are eliminated for GAAP purposes
Stabilized Portfolio NOI (Cash) Taxable REIT Subsidiary (TRS)
Three months
ended Annualized Trailing 12 Months
9/30/2016 9/30/2016 9/30/2016
Diversified Portfolio General contracting and real estate services $5,325
Office $462 $1,848
Retail 8,790 35,160 Other Assets
Multifamily 910 3,640 Other Assets As of 9/30/2016
Total Diversified Portfolio NOI $10,162 $40,648 Cash and Cash Equivalents $23,890
Restricted Cash 3,471
Virginia Beach Town Center Accounts Receivable 15,100
Office(1) $2,394 $9,576 Notes Receivable 49,935
Retail (1) 1,725 6,900 Construction receivables, including retentions 39,981
Multifamily 1,764 7,056 Equity method investments 10,360
Total Virginia Beach Town Center NOI $5,883 $23,532 Other Assets 62,441
Total Other Assets $205,178
Timing of mid-quarter transaction
Acquisition $346 $1,384 Liabilities & Share Count
Disposition (242) (968) As of 9/30/2016
Total timing Mid-Quarter transaction $104 $416 Liabilities
Mortgages and notes payable $513,993
Stabilized Portfolio NOI - Cash Basis $16,149 $64,180 Accounts payable and accrued liabilities 10,604
Construction payables, including retentions 51,203
Development Pipeline Other Liabilities 46,077
9/30/2016 Total Liabilities $621,877
Income producing property $123,600
Construction in progress 13,800 Three months ended
Other assets 6,600 Share Count 9/30/2016
Total cost to date (p. 17) $144,000 Weighted average common shares outstanding 33,792
Weighted average operating partnership ("OP") Units Outstanding 17,720
Land held for development 1,933 Total weighted average common shares and OP units outstanding 51,512
Appendix – Definitions
& Reconciliations
28
Definitions
Net Operating Income:
We calculate Net Operating Income (“NOI”) as property revenues (base rent, expense reimbursements and other revenue)
less property expenses (rental expenses and real estate taxes). Other REITs may use different methodologies for
calculating NOI, and accordingly, our NOI may not be comparable to such other REITs’ NOI. NOI is not a measure of
operating income or cash flows from operating activities as measured by GAAP and is not indicative of cash available to
fund cash needs. As a result, NOI should not be considered an alternative to cash flows as a measure of liquidity. We
consider NOI to be an appropriate supplemental measure to net income because it assists both investors and
management in understanding the core operations of our real estate business.
To calculate NOI on a cash basis, we adjust NOI to exclude the net effects of straight-line rent and the amortization of
lease incentives and above/below market rents.
Funds From Operations:
We calculate Funds From Operations (“FFO”) in accordance with the standards established by the National Association of
Real Estate Investment Trusts (“NAREIT”). NAREIT defines FFO as net income (loss) (calculated in accordance with
accounting principles generally accepted in the United States (“GAAP”)), excluding gains (or losses) from sales of
depreciable operating property, real estate related depreciation and amortization (excluding amortization of deferred
financing costs) and after adjustments for unconsolidated partnerships and joint ventures.
FFO is a supplemental non-GAAP financial measure. Management uses FFO as a supplemental performance measure
because it believes that FFO is beneficial to investors as a starting point in measuring our operational performance.
Specifically, in excluding real estate related depreciation and amortization and gains and losses from property dispositions,
which do not relate to or are not indicative of operating performance, FFO provides a performance measure that, when
compared period-over-period, captures trends in occupancy rates, rental rates and operating costs. Other equity REITs
may not calculate FFO in accordance with the NAREIT definition as we do, and, accordingly, our FFO may not be
comparable to such other REITs’ FFO.
29
Definitions
Normalized Funds From Operations:
We calculate Normalized Funds From Operations (“Normalized FFO") as FFO calculated in accordance with the standards
established by NAREIT, adjusted for acquisition, development and other pursuit costs, gains or losses from the early
extinguishment of debt, impairment charges, mark-to-market adjustments on interest rate derivatives and other non-
comparable items.
Management believes that the computation of FFO in accordance to NAREIT’s definition includes certain items that are not
indicative of the results provided by the Company’s operating portfolio and affect the comparability of the Company’s
period-over-period performance. Our calculation of Normalized FFO differs from NAREIT's definition of FFO. Other equity
REITs may not calculate Normalized FFO in the same manner as us, and, accordingly, our Normalized FFO may not be
comparable to other REITs' Normalized FFO.
Adjusted Funds From Operations:
We calculate Adjusted Funds From Operations (“AFFO”) as Normalized FFO adjusted for the impact of non-cash stock
compensation, tenant improvement, leasing commission and leasing incentive costs associated with second generation
rental space, capital expenditures, non-cash interest expense, straight-line rents, the amortization of leasing incentives and
above (below) market rents and proceeds from government development grants.
Management believes that AFFO provides useful supplemental information to investors regarding our operating
performance as it provides a consistent comparison of our operating performance across time periods and allows investors
to more easily compare our operating results with other REITs. However, other REITs may use different methodologies for
calculating AFFO or similarly entitled FFO measures and, accordingly, our AFFO may not always be comparable to AFFO
or other similarly entitled FFO measures of other REITs.
Definitions
Adjusted EBITDA:
We calculate Adjusted EBITDA as net income (loss) (calculated in accordance with GAAP), excluding interest expense,
income taxes, depreciation and amortization, gains (or losses) from sales of depreciable operating property and mark-to-
market adjustments on interest rate derivates. Management believes Adjusted EBITDA is useful to investors in evaluating
and facilitating comparisons of our operating performance between periods and between REITs by removing the impact of
our capital structure (primarily interest expense) and asset base (primarily depreciation and amortization) from our
operating results along with other non-comparable items.
Core EBITDA:
We calculate Core EBITDA as EBITDA, excluding certain items, including, but not limited to, debt extinguishment losses,
mark-to-market adjustments on interest rate derivatives, non-cash stock compensation and the impact of development
pipeline projects that are still in lease-up. We generally consider a property to be in lease-up until the earlier of (i) the
quarter after which the property reaches 80% occupancy or (ii) the thirteenth quarter after the property receives its
certificate of occupancy. Management believes that Core EBITDA provides useful supplemental information to investors
regarding our ongoing operating performance as it provides a consistent comparison of our operating performance across
time periods and allows investors to more easily compare our operating results with other REITs. However, other REITs
may use different methodologies for calculating Core EBITDA or similarly entitled measures and, accordingly, our Core
EBITDA may not always be comparable to Core EBITDA or other similarly entitled measures of other REITs.
Core Debt:
We calculate Core Debt as our total debt, excluding loans associated with our development pipeline, cash & cash
equivalents, and restricted cash.
Same Store Portfolio:
We define same store properties as those that we owned and operated for the entirety of the comparative periods
presented. We generally consider a property to be in lease-up until the earlier of (i) the quarter after which the property
reaches 80% occupancy or (ii) the thirteenth quarter after the property receives its certificate of occupancy. The following
table shows the properties included in the same store and non-same store portfolio for the comparative periods presented.
30
31
Same Store vs. Non-Same Store
Same
Store
Non-Same
Store
Same
Store
Non-Same
Store
Same
Store
Non-Same
Store
Same
Store
Non-Same
Store
Retail Properties Office Properties
249 Central Park Retail X X 4525 Main Street X X
Alexander Pointe X X Armada Hoffler Tower X X
Bermuda Crossroads X X Commonwealth of VA - Chesapeake X X
Broad Creek Shopping Center X X Commonwealth of VA - Virginia Beach X X
Broadmoor Plaza X X Oceaneering X X
Columbus Village X X One Columbus X X
Commerce Street Retail X X Oyster Point X X
Courthouse 7-Eleven X X Richmond Tower X X
Dick’s at Town Center X X Sentara Williamsburg X X
Dimmock Square X X Two Columbus X X
Greentree Shopping Center X X Multifamily Properties
Fountain Plaza Retail X X Encore Apartments X X
Gainsborough Square X X Liberty Apartments X X
Hanbury Village X X Smith’s Landing X X
Harper Hill Commons X X The Cosmopolitan X X
Harrisonburg Regal X X Whetstone Apartments X X
Kroger Junction X X
North Hampton Market X X
North Point Center X X
Oakland Marketplace X X
Parkway Marketplace X X
Patterson Place X X
Perry Hall Marketplace X X
Providence Plaza X X
Sandbridge Commons X X
Socastee Commons X X
South Retail X X
South Square X X
Southgate Square X X
Southshore Shops X X
Stone House Square X X
Studio 56 Retail X X
Tyre Neck Harris Teeter X X
Waynesboro Commons X X
Wendover Village X X
Willowbrook Commons X X
Nine Months Ended
9/30/2016 to 2015
Three Months Ended
9/30/2016 to 2015
Three Months Ended
9/30/2016 to 2015
Nine Months Ended
9/30/2016 to 2015
32
Reconciliation to Property Portfolio NOI
$ in thousands
Three months ended 9/30 Nine months ended 9/30
2016 2015 2016 2015
Office Same Store(1)
Rental revenues $3,883 $3,838 $11,671 $11,669
Property expenses 1,443 1,413 4,103 4,292
NOI 2,440 2,425 7,568 7,377
Non-Same Store NOI 799 3,175 2,672 9,026
Segment NOI 3,239 $5,600 $10,240 $16,403
Retail Same Store(1)
Rental revenues $8,211 $7,907 $19,688 $19,352
Property expenses 2,295 2,194 5,684 5,581
NOI 5,916 5,713 14,004 13,771
Non-Same Store NOI 4,821 522 16,708 2,641
Segment NOI $10,737 $6,235 $30,712 $16,412
Multifamily Same Store(1)
Rental revenues $3,075 $3,105 $9,145 $9,069
Property expenses 1,396 1,342 4,016 3,913
NOI 1,679 1,763 5,129 5,156
Non-Same Store NOI 1,460 784 3,437 1,502
Segment NOI 3,139 2,547 $8,566 $6,658
Total Property Portfolio NOI $17,115 $14,382 $49,518 $39,473
(1) See page 34 for the Same Store vs. Non-Same Store properties
33
Reconciliation to Property NOI
$ in thousands
Three months ended 9/30/2016
Diversified Portfolio Office Retail Multifamily Total
NOI - Cash Basis $462 $8,790 $910 $10,162
Net effect of straight-line rents 23 58 2 83
Amortization of lease incentives and (above) below market rents - 204 (13) 191
NOI $485 $9,052 $899 $10,436
Town Center of Virginia Beach Office Retail Multifamily Total
NOI - Cash Basis $2,394 $1,725 $1,764 $5,883
Net effect of straight-line rents (2) 6 3 7
Amortization of lease incentives and (above) below market rents (26) (74) - (100)
Elimination of AHH rent (176) (81) - (257)
NOI $2,190 $1,576 $1,767 $5,533
NOI Office Retail Multifamily Total
Diversified Portfolio $485 $9,052 $899 $10,436
Town Center of Virginia Beach 2,190 1,576 1,767 5,533
Unstabilized Properties 564 109 473 1,146
Total Property Portfolio NOI $3,239 $10,737 $3,139 $17,115
34
Reconciliation to GAAP Net Income
$ in thousands
Office Retail Multifamily
Total Property
Portfolio
General Contracting &
Real Estate Services Total
Segment revenues 5,277$ 14,340$ 5,688$ 25,305$ 38,552$ 63,857$
Segment expenses 2,038 3,603 2,549 8,190 37,274 45,464
Net operating income 3,239$ 10,737$ 3,139$ 17,115$ 1,278$ 18,393$
Depreciation and amortization (8,885)
General and administrative expenses (2,156)
Acquisition, development and other pursuit costs (345)
Interest income 1,024
Interest expense (4,124)
Gain on real estate dispositions 3,753
Change in fair value of interest rate derivatives 498
Other income 35
Income tax provision (16)
Net income 7,946$
Office Retail Multifamily
Total Rental
Properties
General Contracting &
Real Estate Services Total
Segment revenues 16,097$ 41,485$ 15,257$ 72,839$ 108,555$ 181,394$
Segment expenses 5,857 10,773 6,691 23,321 104,336 127,657
Net operating income 10,240$ 30,712$ 8,566$ 49,518$ 4,219$ 53,737$
Depreciation and amortization (25,636)
General and administrative expenses (6,864)
Acquisition, development and other pursuit costs (1,486)
Impairment charges (184)
Interest income 1,928
Interest expense (11,893)
Loss on extinguishment of debt (82)
Gain on real estate dispositions 30,440
Change in fair value of interest rate derivatives (2,264)
Other income 154
Income tax provision (240)
Net income 37,610$
Three months ended 9/30/2016
Nine months ended 9/30/2016