Attached files
| file | filename |
|---|---|
| EX-99.1 - EXHIBIT 99.1 - Armada Hoffler Properties, Inc. | q3-2017ex991earningsrelease.htm |
| 8-K - 8-K - Armada Hoffler Properties, Inc. | ahhq393020178-k.htm |
1
3Q 2017 | SUPPLEMENTAL FINANCIAL PACKAGE
2Table of Contents
3 Forward Looking Statements
4 Corporate Profile
5 Highlights
6 Outlook & Assumptions
7 Summary Information
8 Net Asset Value Component Data
9 Summary Balance Sheet
10 Summary Income Statement
11 FFO, Normalized FFO & Adjusted FFO
12 Outstanding Debt
13 Core Debt to Core EBITDA
14 Debt Information
15 Capitalization & Financial Ratios
16 Property Portfolio
18 Development Pipeline
19 Acquisitions & Dispositions
20 Construction Business Summary
21 Same Store NOI by Segment
22 Top 10 Tenants by Annualized Base Rent
23 Office Lease Summary
24 Office Lease Expirations
25 Retail Lease Summary
26 Retail Lease Expirations
27 Appendix – Definitions & Reconciliations
31 Same Store vs Non-Same Store Properties
32 Reconciliation to Property Portfolio NOI
34 Reconciliation to GAAP Net Income
3Forward Looking Statements
This Supplemental Financial Package should be read in conjunction with the unaudited condensed consolidated financial
statements appearing in our press release dated October 31, 2017, which has been furnished as Exhibit 99.1 to our Form 8-K
filed on October 31, 2017. The Company makes statements in this Supplemental financial package that are forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of 1995 (set forth in Section 27A of the
Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”)). In particular, statements pertaining to our capital resources, portfolio performance,
development pipeline and results of operations contain forward-looking statements. Likewise, all of our statements regarding
anticipated growth in our funds from operations, normalized funds from operations, adjusted funds from operations, and net
operating income are forward-looking statements. You can identify forward-looking statements by the use of forward-looking
terminology such as “believes,” “expects,” “may,” “will,” “should,” “seeks,” “intends,” “plans,” “estimates” or “anticipates” or
the negative of these words and phrases or similar words or phrases which are predictions of or indicate future events or
trends and which do not relate solely to historical matters. You can also identify forward-looking statements by discussions of
strategy, plans or intentions.
Forward-looking statements involve numerous risks and uncertainties and you should not rely on them as predictions of future
events. Forward-looking statements depend on assumptions, estimates, data or methods, which may be incorrect or
imprecise, and actual results may vary materially from those anticipated, estimated or projected. The Company does not
guarantee that the transactions and events described will happen as described (or that they will happen at all). For further
discussion of risk factors and other events that could impact our future results, please refer to the section entitled “Risk
Factors” in our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”), and
the documents subsequently filed by us from time to time with the SEC.
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.
4
Analyst Coverage
Corporate Profile
Armada Hoffler Properties, Inc. (NYSE:AHH) is a full service real estate company that develops, constructs, acquires and manages
institutional-grade office, retail and multifamily properties in the Mid-Atlantic and Southeastern United States. The Company also
provides general contracting and development services to third-party clients, in addition to developing and building properties to be
placed in its stabilized portfolio. Armada Hoffler Properties, Inc. was founded in 1979 and is headquartered in Virginia Beach, VA.
The Company has elected to be taxed as a real estate investment trust (“REIT”) for U.S. federal income tax purposes.
Board of Directors Corporate Officers
Investor Relations
Daniel A. Hoffler
A. Russell Kirk
Louis S. Haddad
John W. Snow
George F. Allen
James A. Carroll
James C. Cherry
Eva S. Hardy
Executive Chairman of Board
Vice Chairman of the Board
Director
Lead Independent Director
Independent Director
Independent Director
Independent Director
Independent Director
Louis S. Haddad
Michael P. O’Hara
Eric L. Smith
Eric E. Apperson
Shelly R. Hampton
President and Chief Executive Officer
Chief Financial Officer and Treasurer
Chief Investment Officer and
Corporate Secretary
President of Construction
President of Asset Management
Michael P. O’Hara
(757) 366-6684
Chief Financial Officer and Treasurer
mohara@armadahoffler.com
D. A. Davidson & Co.
James O. Lykins
(503) 603-3041
jlykins@dadco.com
Raymond James & Associates
Bill Crow
(727) 567-2594
bill.crow@raymondjames.com
Robert W. Baird & Co.
David Rodgers
(216) 737-7341
drodgers@rwbaird.com
Stonegate Capital Partners
Laura Engel
(214) 987-4121
laura@stonegateinc.com
Janney, Montgomery,
& Scott LLC
Robert Stevenson
(646) 840-3217
robertstevenson@janney.com
FBR Capital Markets
Craig Kucera
(703) 862-5249
craigkucera@fbr.com
Stifel, Nicolaus & Company Inc.
John Guinee
(443) 224-1307
jwguinee@stifel.com
Bank of America Merrill Lynch
Scott Freitag
(646) 855-3197
Scott.Freitag@baml.com
5Highlights
• Net income of $10.5 million, or $0.17 per diluted share, for the quarter ended September 30, 2017 compared to net income of $7.9
million, or $0.15 per diluted share, for the quarter ended September 30, 2016.
• Normalized Funds From Operations (“FFO”) of $15.5 million, or $0.25 per diluted share, for the quarter ended September 30, 2017
compared to Normalized FFO of $13.2 million, or $0.26 per diluted share, for the quarter ended September 30, 2016.
• FFO of $15.5 million, or $0.25 per diluted share, for the quarter ended September 30, 2017 compared to FFO of $13.1 million, or
$0.25 per diluted share, for the quarter ended September 30, 2016.
• Raised 2017 full-year Normalized FFO guidance range - now $0.98 to $1.00 per diluted share - from its previous guidance range of
$0.97 to $0.99 per diluted share.
• Core operating property portfolio occupancy at 94.7% as of September 30, 2017 compared to 94.2% as of June 30, 2017.
• Completed the sale of two properties leased by the Commonwealth of Virginia on July 13, 2017 for an aggregate sales price of $13.2
million representing a 38% profit over development cost.
• Acquired the outparcel phase of Wendover Village in Greensboro, North Carolina for $14.3 million. The Company previously acquired
the primary phase of Wendover Village in January 2016.
• Delivered the initial phase of the Annapolis Junction multifamily asset in Howard County, Maryland and leased over 80 units to date.
• After the end of the quarter, the Company:
– Announced that Williams Sonoma and Pottery Barn will be the anchor tenants of Phase VI of development in the Town Center
of Virginia Beach, further solidifying Town Center as a prime shopping destination in the region.
– Broke ground on two student housing properties in historic downtown Charleston, South Carolina representing $100 million of
new development.
– Closed on a new expanded and unsecured $300 million credit facility that includes $150 million term loan with a syndicate of
banks co-led by Bank of America, PNC and Regions Bank.
– Invested in the development of a $20 million Whole Foods anchored center located in Delray Beach, Florida.
– Updated company logo and branding including enhanced corporate website launched in October 2017.
62017 Outlook & Assumptions
Guidance Assumptions
No additional capital market activities.
●
Interest expense is calculated based on the Forward LIBOR Curve.
●
Full year weighted average share count of 60.2 million.
Outlook Low High
Total NOI $72.6M $73.0M
Construction Segment Gross Profit $7.2M $7.5M
G&A expenses $10.4M $10.6M
Interest income $6.9M $7.1M
Interest expense $17.2M $17.5M
Normalized FFO per diluted share $0.98 $1.00
7Summary Information
$ in thousands, except per share data
(1) Excludes gains on dispositions of real estate and mark-to-market adjustments on interest rate derivatives
(2) Includes common shares and OP units
(3) Excludes unamortized GAAP adjustments
(4) Office and retail occupancy based on leased square feet as a % of respective total
(5) Multifamily occupancy based on occupied units as a % of respective total
(6) Total occupancy weighted by annualized base rent
Three months ended
9/30/2017 6/30/2017 3/31/2017 12/31/2016 9/30/2016
OPERATIONAL METRICS
Net income $10,461 $4,943 $8,753 $5,145 $7,946
Net income per diluted share $0.17 $0.08 $0.16 $0.09 $0.15
Rental properties Net Operating Income (NOI) 17,573 17,989 18,655 18,304 17,115
General contracting and real estate services gross profit 1,824 2,656 2,323 1,436 1,278
Adjusted EBITDA (1) 19,203 19,272 19,376 18,097 16,720
Funds From Operations (FFO) 15,500 14,247 14,833 14,744 13,078
FFO per diluted share $0.25 $0.24 $0.27 $0.27 $0.25
Normalized FFO 15,493 14,724 14,590 13,669 13,156
Normalized FFO per diluted share $0.25 $0.25 $0.26 $0.25 $0.26
Annualized dividend yield 5.50% 5.87% 5.47% 4.94% 5.37%
CAPITALIZATION
Total common shares outstanding 44,937 44,932 37,813 37,490 34,256
Operating Partnership units outstanding 17,845 17,846 17,859 17,794 17,793
Common shares and OP units outstanding 62,782 62,778 55,672 55,284 52,049
Market price per common share $13.81 $12.95 $13.89 $14.57 $13.40
Equity market capitalization(2) $867,019 $812,975 $773,284 $805,488 $697,457
Total debt(3) 493,493 470,314 527,504 527,082 519,209
Total market capitalization 1,360,512 1,283,289 1,300,788 1,332,570 1,216,666
Less: cash (22,916) (21,726) (13,688) (25,193) (27,361)
Total enterprise value $1,337,596 $1,261,563 $1,287,100 $1,307,377 $1,189,305
BALANCE SHEET METRICS
Core Debt/enterprise value 34.2% 30.9% 32.9% 31.7% 34.3%
Fixed charge coverage ratio 3.7x 3.5x 3.6x 3.3x 3.4x
Core Debt/Annualized Core EBITDA 6.0x 5.3x 6.0x 6.3x 6.4x
CORE PORTFOLIO OCCUPANCY
Office (4) 89.2% 89.9% 87.7% 86.8% 96.4%
Retail (4) 96.9% 96.8% 96.7% 95.8% 96.4%
Multifamily(5) 94.3% 91.6% 92.7% 94.3% 95.8%
Weighted Average (6) 94.7% 94.2% 94.3% 93.8% 96.2%
8Net 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
9/30/2017 9/30/2017 General contracting Gross Profit $8,239
Diversified Portfolio
Office $82 $328 Non-Property Assets
Retail 9,227 36,908 Non-Property Assets As of 9/30/2017
Multifamily 1,637 6,548 Cash and Cash Equivalents $19,721
Total Diversified Portfolio NOI $10,946 $43,784 Restricted Cash 3,195
Accounts Receivable 15,826
Virginia Beach Town Center Notes Receivable 75,522
Office(1) $2,989 $11,956 Construction receivables, including retentions 35,923
Retail (1) 1,973 7,892 Equity method investments (Durham City Center JV) 11,169
Multifamily 1,495 5,980 Other Assets 57,721
Total Virginia Beach Town Center NOI $6,457 $25,828 Land held for development 680
Total Non-Property Assets $219,757
Timing of mid-quarter transaction
Acquisition $76 $304 Liabilities & Share Count
Disposition (82) (328) As of 9/30/2017
Total timing Mid-Quarter transaction ($6) ($24) Liabilities
Mortgages and notes payable $488,609
Stabilized Portfolio NOI - Cash Basis $17,397 $69,588 Accounts payable and accrued liabilities 14,383
Construction payables, including retentions 48,160
Signed leases not occupied or stil l in
free rent period
$301 $1,204
Other Liabilities 46,413
Total Liabilities $597,565
Total $17,698 $70,792
Three months ended
Development Pipeline Share Count 9/30/2017
9/30/2017 Weighted average common shares outstanding 44,934
Income producing property $25,000 Weighted average OP Units Outstanding 17,845
Construction in progress 57,000 Total weighted average common shares & OP units outstanding 62,779
Other assets 2,000
Total cost to date $84,000
9Summary Balance Sheet
$ in thousands
9/30/2017 12/31/2016
Assets (Unaudited)
Real estate investments:
Income producing property $906,225 $894,078
Held for development 680 680
Construction in progress 62,948 13,529
Accumulated depreciation (157,932) (139,553)
Net real estate investments 811,921 768,734
Cash and cash equivalents 19,721 21,942
Restricted cash 3,195 3,251
Accounts receivable, net 15,826 15,052
Notes receivable 75,522 59,546
Construction receivables, including retentions 35,923 39,433
Costs and estimated earnings in excess of bil l ings 110 110
Equity method investments 11,169 10,235
Other assets 57,611 64,165
Total Assets $1,030,998 $982,468
Liabilities and Equity
Indebtedness, net $488,609 $522,180
Accounts payable and accrued liabilities 14,383 10,804
Construction payables, including retentions 48,160 51,130
Bil l ings in excess of costs and estimated earnings 5,232 10,167
Other l iabilities 41,181 39,209
Total Liabilities 597,565 633,490
Redeemable noncontrolling interest 2,000 -
Total Equity 431,433 348,978
Total Liabilities and Equity $1,030,998 $982,468
As of
10Summary Income Statement
Amounts in thousands, except per share data
Three months ended Nine months ended
9/30/2017 9/30/2016 9/30/2017 9/30/2016
Revenues (Unaudited)
Rental revenues $27,096 $25,305 $81,083 $72,839
General contracting and real estate services 41,201 38,552 161,391 108,555
Total Revenues 68,297 63,857 242,474 181,394
Expenses
Rental expenses 6,830 5,834 19,069 16,234
Real estate taxes 2,693 2,356 7,797 7,087
General contracting and real estate services 39,377 37,274 154,588 104,336
Depreciation and amortization 9,239 8,885 28,018 25,636
General and administrative 2,098 2,156 7,762 6,864
Acquisition, development & other pursuit costs 61 345 477 1,486
Impairment charges 19 149 50 184
Total Expenses 60,317 56,999 217,761 161,827
Operating Income 7,980 6,858 24,713 19,567
Interest income 1,910 1,024 4,966 1,928
Interest expense (4,253) (4,124) (13,282) (11,893)
Loss on extinguishment of debt - (82) - (82)
Gain on real estate dispositions 4,692 3,753 8,087 30,440
Change in fair value of interest rate derivatives 87 498 300 (2,264)
Other income 74 35 154 154
Income before taxes 10,490 7,962 24,938 37,850
Income tax provision (29) (16) (781) (240)
Net Income $10,461 $7,946 $24,157 $37,610
Per Diluted Share & Unit $0.17 $0.15 $0.41 $0.77
Weighted Average Shares & Units - Diluted 62,779 51,512 59,423 48,869
11
(1) See definitions on pages 28-29
(2) Excludes gain on non-operating real estate of $0.5M for the three months ended 9/30/2017
(3) Excludes development, redevelopment, and first generation space
FFO, Normalized FFO & Adjusted FFO(1)
$ in thousands, except per share data
Three months ended (Unaudited)
9/30/2017 6/30/2017 3/31/2017 12/31/2016 9/30/2016
Funds From Operations
Net income $10,461 $4,943 $8,753 $5,145 $7,946
Earnings per diluted share $0.17 $0.08 $0.16 $0.09 $0.15
Depreciation and amortization(2) 9,239 9,304 9,475 9,692 8,885
Gains on dispositions of operating real estate (4,200) - (3,395) (93) (3,753)
FFO $15,500 $14,247 $14,833 $14,744 $13,078
FFO per diluted share $0.25 $0.24 $0.27 $0.27 $0.25
Normalized FFO
Acquisition, development & other pursuit costs 61 369 47 77 345
Loss on extinguishment of debt - - - - 82
Impairment charges 19 27 4 171 149
Change in fair value of interest rate derivatives (87) 81 (294) (1,323) (498)
Normalized FFO $15,493 $14,724 $14,590 $13,669 $13,156
Normalized FFO per diluted share $0.25 $0.25 $0.26 $0.25 $0.26
Adjusted FFO
Non-cash stock compensation 215 421 411 218 212
Acquisition, development & other pursuit costs (61) (369) (47) (77) (345)
Tenant improvements, leasing commissions (2) (707) (840) (943) (507) (233)
Property related capital expenditures (1,167) (895) (442) (434) (514)
Non-cash interest expense 380 283 277 293 219
Net effect of straight-line rents (159) (122) (245) (246) (158)
Amor ization of leasing incentives & above (below) market rents (50) (43) (47) (24) 116
AFFO $13,944 $13,159 $13,554 $12,892 $12,453
Weighted Average Common Shares Outstanding 44,934 42,091 37,622 36,465 33,792
Weighted Average Operating Partnership ("OP") Units Outstanding 17,845 17,845 17,853 17,793 17,720
Total Weighted Average Common Shares and OP Units Outstanding 62,779 59,936 55,475 54,258 51,512
12
Debt Maturities & Principal Payments
Debt Stated Rate
Effective Rate as of
9/30/2017 Maturity Date 2017 2018 2019 2020 2021 Thereafter
Amount Outstanding
as of 9/30/2017
Secured Notes Payable - Core Debt
Sandbridge Commons L+1.85% 3.08% 1/17/2018 $63 $8,467 $8,530
Columbus Village Note 1 L+2.00% 3.05% (1) 4/5/2018 44 6,080 6,124
Columbus Village Note 2 L+2.00% 3.23% 4/5/2018 14 2,218 2,232
Johns Hopkins Village L+1.90% 3.13% 7/30/2018 46,698 46,698
North Point Center Note 1 6.45% 6.45% 2/5/2019 52 219 9,352 9,623
Southgate Square L+2.00% 3.23% 4/29/2021 112 539 561 584 19,075 20,871
249 Central Park Retail L+1.95% 3.18% 8/8/2021 63 229 243 258 16,117 16,910
South Retail L+1.95% 3.18% 8/8/2021 27 101 107 113 7,072 7,420
Fountain Plaza Retail L+1.95% 3.18% 8/8/2021 36 138 147 156 9,703 10,180
Encore Apartments 3.25% 3.25% 9/10/2021 124 504 24,338 24,966
4525 Main Street 3.25% 3.25% 9/10/2021 158 646 31,230 32,034
Hanbury Village 3.78% 3.78% 8/15/2022 129 485 504 522 544 17,438 19,622
Socastee Commons 4.57% 4.57% 1/6/2023 24 100 105 109 115 4,343 4,796
North Point Center Note 2 7.25% 7.25% 9/15/2025 28 113 121 130 140 1,954 2,486
Smith's Landing 4.05% 4.05% 6/1/2035 197 791 824 858 890 16,394 19,954
Liberty Apartments 5.66% 5.66% 11/1/2043 84 344 364 385 415 18,171 19,763
The Cosmopolitan 3.35% 3.35% 7/1/2051 181 741 766 792 819 42,091 45,390
Total - Secured Core Debt $1,054 $67,263 $13,376 $5,057 $110,458 $100,391 $297,599
Secured Notes Payable - Development Pipeline
Lightfoot Marketplace L+1.90% 3.13% 11/14/2017 12,894 12,894
Total - Development Pipeline 12,894 - - - - - 12,894
Total Secured Notes Payable $13,948 $67,263 $13,376 $5,057 $110,458 $100,391 $310,493
Unsecured Core Debt
Senior unsecured line of credit L+1.40% - 2.00% 2.78% 2/20/2019 58,000 58,000
Senior unsecured term loan L+1.35% - 1.95% 2.73% 2/20/2020 75,000 75,000
Senior unsecured term loan L+1.35% - 1.95% 3.50% (1) 2/20/2020 50,000 50,000
Total - Unsecured Core Debt - - 58,000 125,000 - - 183,000
Total Notes Payable excluding GAAP Adjustments $13,948 $67,263 $71,376 $130,057 $110,458 $100,391 $493,493
Weighted Average Interest Rate 3.2% 3.2% 3.3% 3.1% 3.3% 4.1% 3.4%
Balloon Payments 12,894 62,884 67,333 125,000 106,274 22,676 397,061
Principal amortization 1,054 4,379 4,043 5,057 4,184 77,715 96,432
Total Consolidated Debt $13,948 $67,263 $71,376 $130,057 $110,458 $100,391 $493,493
Fixed-rate Debt(2) 739 8,873 12,318 53,946 58,491 100,391 234,758
Variable-rate Debt(3) 13,209 58,390 59,058 76,111 51,967 - 258,735
Total Consolidated Debt $13,948 $67,263 $71,376 $130,057 $110,458 100,391 $493,493
GAAP Adjustments (4,884)
Total Notes Payable $488,609
Outstanding Debt
$ in thousands
(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
30 Day LIBOR as
of 9/30/2017
1.232%
13Core Debt to Core EBITDA(1)
$ in thousands
(1) See definitions on page 30
(2) Excludes GAAP Adjustments
Three months ended
9/30/2017 6/30/2017 3/31/2017 12/31/2016 9/30/2016
Net Income $10,461 $4,943 $8,753 $5,145 $7,946
Excluding:
Interest expense 4,253 4,494 4,535 4,573 4,124
Income tax 29 450 302 103 16
Depreciation and amortization 9,239 9,304 9,475 9,692 8,885
Gain on real estate dispositions (4,692) - (3,395) (93) (3,753)
Change in fair value of interest rate derivatives (87) 81 (294) (1,323) (498)
Adjusted EBITDA $19,203 $19,272 $19,376 $18,097 $16,720
Other adjustments:
Loss on extinguishment of debt - - - - 82
Non-cash stock compensation 215 421 411 218 212
Development Pipeline (301) (1,244) (2,154) (1,917) (1,058)
Total Other Adjustments (86) (823) (1,743) (1,699) (764)
Core EBITDA $19,117 $18,449 $17,633 $16,398 $15,956
Total Debt(2) $493,493 $470,314 $527,504 $527,082 $519,209
Adjustments to Debt:
(Less) Development Pipeline(2) (12,894) (58,942) (90,021) (88,069) (84,321)
(Less) Cash & restricted cash (22,916) (21,726) (13,688) (25,193) (27,361)
Core Debt $457,683 $389,646 $423,795 $413,820 $407,527
Core Debt/Annualized Core EBITDA 6.0x 5.3x 6.0x 6.3x 6.4x
14Debt Information
$ in thousands
(1) Excludes debt subject to interest rate swap locks
(2) Includes debt subject to interest rate swap locks
(3) Excludes GAAP adjustments
Fixed-rate &
Hedged Debt
100%
Debt Maturities & Principal Payments
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
2017 2018 2019 2020 2021 2022 and
thereafter
($
In
Th
ou
sa
nd
s)
Total Debt Composition
Weighted Average
Percent of Debt Interest Rate Maturity
Secured vs. Unsecured Debt
Unsecured Debt 37.1% 3.0% 2.1 Yrs
Secured Debt 62.9% 3.6% 9.8 Yrs
Variable vs. Fixed-rate Debt
Variable-rate Debt(1) 52.4% 3.0% 2.0 Yrs
Fixed-rate Debt(2)(3) 47.6% 3.8% 12.4 Yrs
Fixed-rate and Hedged Debt(2)(3) 100.0%
Total 3.4% 6.9 Yrs
Interest Rate Cap Agreements
Effective Date Maturity Date Strike Rate Notional Amount
October 26, 2015 October 15, 2017 1.25% $75,000
February 25, 2016 March 1, 2018 1.50% 75,000
June 17, 2016 June 17, 2018 1.00% 70,000
February 7, 2017 March 1, 2019 1.50% 50,000
June 23, 2017 July 1, 2019 1.50% 50,000
September 18, 2017 October 1, 2019 1.50% 50,000
Total Interest Rate Caps 370,000
Fixed-rate Debt (2)(3) 234,758
Fixed-rate and Hedged Debt $604,758
% of Total (3) 100.0%
15Capitalization & Financial Ratios
$ in thousands
Capitalization as of September 30, 2017 Capital Structure as of September 30, 2017
Debt % of Total Carrying Value
Unsecured Credit Facility 12% $58,000
Unsecured Term Loans 25% 125,000
Mortgages Payable 63% 310,493
Total Debt $493,493
Equity % of Total Shares/Units Stock Price Market Value
Common Stock (NYSE: AHH) 72% 44,937 $13.81 $620,580
Common Units 28% 17,845 $13.81 246,439
Equity Market Capitalization 62,782 $867,019
Total Market Capitalization $1,360,512
Debt/Market Capitalization 36.3%
Dividend Data Liquidity as of September 30, 2017
Trailing 12
Months
Common Dividends and Distributions $40,881 Cash on Hand $22,916
AFFO 53,549 Availability under Credit Facility 87,900
AFFO Payout Ratio 76.3% $110,816
Debt
36%
Equity
64%
16Property Portfolio
As of 9/30/17
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)
Retail Properties
249 Central Park Retail (4)
Cheesecake Factory, Brooks Brothers,
Gordon Biersch
Virginia Beach, VA ✓ - 2004 92,710 - 92,710 96.6% - $2,524,250 $28.18
Alexander Pointe Harris Teeter Salisbury, NC 100% 1997 57,710 - 57,710 97.6% - 651,177 11.56
Bermuda Crossroads (6) Food Lion, OfficeMax Chester, VA 100% 2001 122,566 - 122,566 93.7% - 1,692,599 14.73
Broad Creek Shopping Center(6)(10) Home Depot, Food Lion, PetSmart Norfolk, VA 100% 1997/2001 250,416 - 250,416 100.0% - 3,853,161 15.39
Broadmoor Plaza Kroger, Staples, Jo-Ann Fabrics South Bend, IN 100% 1980 115,059 - 115,059 92.2% - 1,251,347 11.80
Brooks Crossing Various Small Shops Newport News, VA 100% 2016 - 18,349 18,349 - 59.8% 151,380 13.80
Columbus Village Barnes & Noble Virginia Beach, VA ✓ - 1980/2013 66,594 - 66,594 88.5% - 1,145,259 19.42
Columbus Village II Regal Cinemas, BB&B Virginia Beach, VA ✓ 100% 1995/1996 92,061 - 92,061 100.0% - 1,580,083 17.16
Commerce Street Retail (5) Yard House Virginia Beach, VA ✓ 100% 2008 19,173 - 19,173 100.0% - 856,862 44.69
Courthouse 7-Eleven 7-Eleven Virginia Beach, VA 100% 2011 3,177 - 3,177 100.0% - 139,280 43.84
Dick's at Town Center Dick's Sporting Goods, USI Virginia Beach, VA ✓ 100% 2002 103,335 - 103,335 100.0% - 1,241,201 12.01
Dimmock Square Best Buy, Old Navy Colonial Heights, VA 100% 1998 106,166 - 106,166 97.2% - 1,746,579 16.93
Fountain Plaza Retail Ruth's Chris, Ann Taylor Virginia Beach, VA ✓ - 2004 35,961 - 35,961 100.0% - 1,016,048 28.25
Gainsborough Square Food Lion, Rite Aid Chesapeake, VA 100% 1999 88,862 - 88,862 92.5% - 1,243,647 15.14
Greentree Shopping Center Various Small Shops Chesapeake, VA 100% 2014 15,719 - 15,719 92.6% - 308,670 21.21
Hanbury Village(6) Harris Teeter, Walgreens Chesapeake, VA 32% 2006/2009 116,635 - 116,635 97.0% - 2,422,431 21.40
Harper Hill Commons (6) Harris Teeter Winston-Salem, NC 100% 2004 96,914 - 96,914 80.5% - 895,528 11.47
Harrisonburg Regal Regal Cinemas Harrisonburg, VA 100% 1999 49,000 - 49,000 100.0% - 683,550 13.95
Lightfoot Marketplace(6) Harris Teeter, CHKD Williamsburg, VA - 2016 - 107,643 107,643 - 72.6% 1,113,223 14.24
North Hampton Market PetSmart, Hobby Lobby Taylors, SC 100% 2004 114,935 - 114,935 99.0% - 1,435,735 12.62
North Point Center(6) Kroger, PetSmart, Home Depot, Costco Durham, NC 67% 1998/2009 496,246 - 496,246 99.7% - 3,685,430 7.45
Oakland Marketplace(6) Kroger Oakland, TN 100% 2004 64,600 - 64,600 97.8% - 455,030 7.20
Parkway Marketplace Rite Aid Virginia Beach, VA 100% 1998 37,804 - 37,804 100.0% - 757,100 20.03
Patterson Place BB&B, PetSmart, DSW, AC Moore Durham, NC 100% 2004 160,942 - 160,942 96.1% - 2,441,875 15.78
Perry Hall Marketplace Safeway Perry Hall, MD 100% 2001 74,256 - 74,256 100.0% - 1,252,232 16.86
Providence Plaza Cranfil l , Sumner & Hartzog, Chipotle Charlotte, NC 100% 2007/2008 103,118 - 103,118 97.5% - 2,633,953 26.21
Renaissance Square Harris Teeter Davidson, NC 100% 2008 80,467 - 80,467 92.2% - 1,290,781 17.39
Sandbridge Commons (6) Harris Teeter Virginia Beach, VA - 2015 69,417 - 69,417 100.0% - 911,934 13.14
Socastee Commons Bi-Lo Myrtle Beach, SC - 2000/2014 57,273 - 57,273 100.0% - 656,700 11.47
South Retail lululemon, free people, CPK Virginia Beach, VA ✓ - 2002 38,515 - 38,515 84.9% - 889,762 27.20
South Square(6) Ross, Petco, Office Depot Durham, NC 100% 1977/2005 109,590 - 109,590 100.0% - 1,898,676 17.33
Southgate Square Burlington, PetSmart, Michaels Colonial Heights, VA - 1991/2016 220,131 - 220,131 96.3% - 2,891,335 13.65
Southshore Shops Buffalo Wild Wings Midlothian, VA 100% 2006 40,333 - 40,333 97.5% - 787,682 20.02
Stone House Square(6) Weis Markets Hagerstown, MD 100% 2008 112,274 - 112,274 90.7% - 1,741,160 17.10
Studio 56 Retail McCormick & Schmick's Virginia Beach, VA ✓ 100% 2007 11,594 - 11,594 100.0% - 378,009 32.60
Tyre Neck Harris Teeter(6)(10) Harris Teeter Portsmouth, VA 100% 2011 48,808 - 48,808 100.0% - 532,495 10.91
Waynesboro Commons Kroger Waynesboro, VA 100% 1993 52,415 - 52,415 100.0% - 428,996 8.18
Wendover Village BB&B, T.J. Maxx, Petco Greensboro, NC 100% 2004 171,653 - 171,653 100.0% - 3,099,534 18.06
Total / Weighted Avg Retail Portfolio 73% 3,496,429 125,992 3,622,421 96.9% 70.7% $52,684,694 $15.14
17
(1) The net rentable square footage for each of our retail & office properties is the sum of (a) the square footage of
existing leases, plus (b) for available space, management’s estimate of net rentable square footage based, in part,
on past leases. The net rentable square footage included in office leases is generally consistent with the Building
Owners and Managers Association, or BOMA, 1996 measurement guidelines.
(2) Occupancy for each of our retail & office properties is calculated as (a) square footage under executed leases as of
September 30, 2017, divided by (b) net rentable square feet, expressed as a percentage. Occupancy for our
multifamily properties is calculated as (a) total units occupied as of September 30, 2017, divided by (b) total units
available, expressed as a percentage.
(3) For the properties in our office and retail portfolios, annualized base rent, or ABR, is calculated by multiplying (a)
monthly base rent (defined as cash base rent, before contractual tenant concessions and abatements, and
excluding tenant reimbursements for expenses paid by us) as of September 30, 2017 for in-place leases as of such
date by (b) 12, and does not give effect to periodic contractual rent increases or contingent rental revenue (e.g.,
percentage rent based on tenant sales thresholds). ABR per leased square foot is calculated by dividing (a) ABR by
(b) square footage under in-place leases as of September 30, 2017. In the case of triple net or modified gross
leases, our calculation of ABR does not include tenant reimbursements for real estate taxes, insurance, common
area or other operating expenses.
(4) As of September 30, 2017, the Company occupied 41,103 square feet at these two properties at an ABR of $1.2M,
or $30.06 per leased square foot, which amounts are reflected in this table. The rent paid by us is eliminated in
accordance with GAAP.
(5) Includes ABR pursuant to a rooftop lease.
(6) Net rentable square feet at certain of our retail properties includes pad sites leased pursuant to the ground leases
in the table below:
(7) For the properties in our multifamily portfolio, annualized base rent, or ABR, is calculated by multiplying (a) base
rental payments for the month ended September 30, 2017 by (b) 12.
(8) The ABR for Liberty, Cosmopolitan, Johns Hopkins Village excludes $242K, $770K, $1.2M from ground floor retail
leases, respectively.
(9) The Company leases the land underlying this property pursuant to a ground lease.
(10) ABR per Occupied Unit is calculated using occupied beds for the month ended September 30, 2017 by total beds.
Property Portfolio - Continued
As of 9/30/17
Properties Subject to Ground Lease
Number of
Ground Leases
Square Footage
Leased Pursuant to
Ground Leases ABR
Bermuda Crossroads 2 11,000 $163,350
Broad Creek Shopping Center 6 22,737 607,081
Hanbury Village 2 55,586 1,082,118
Harper Hill Commons 1 41,520 373,680
Lightfoot Marketplace 1 51,750 542,858
North Point Center 4 280,556 1,083,597
Oakland M rke pl ce 1 45,000 186,300
Sandbridge Commons 1 53,288 583,000
South Square 1 1,778 60,000
Stone House Square 1 3,650 165,000
Tyre Neck Harris Teeter 1 48,808 532,495
Total / Weighted Avg 21 615,673 $5,379,479
Net Rentable Square Feet (RSF)(1)
Property Anchor Tenant Location
Town
Center
Unencumbered
ABR Year Built
Core
Properties
Development
Properties Total
Core
Occupancy (2) ABR
(3)
ABR per Leased
SF(3)
Office Properties
4525 Main Street Clark Nexsen, Anthropologie, Mythics Virginia Beach, VA ✓ - 2014 237,893 - 237,893 93.1% $6,220,970 $28.10
Armada Hoffler Tower(4)(5) AHH, Troutman Sanders, Will iams Mullen Virginia Beach, VA ✓ 100% 2002 324,242 - 324,242 91.9% 8,527,722 28.61
One Columbus (5) BB&T, HBA Virginia Beach, VA ✓ 100% 1984 129,272 - 129,272 85.7% 2,764,511 24.96
Two Columbus The Art Institute Virginia Beach, VA ✓ 100% 2009 108,448 - 108,448 76.9% 2,225,954 26.69
Total / Weighted Average Office Portfolio 68% 799,855 - 799,855 89.2% $19,739,156 $27.66
Units
Multifamily Location
Town
Center
Unencumbered
ABR Year Built
Core
Properties
Development
Properties Total
Core
Occupancy (2) ABR
(7)
ABR per
Occupied Unit
Encore Apartments Virginia Beach, VA ✓ - 2014 286 - 286 93.4% $4,134,000 $1,290.26
Johns Hopkins Village(8)(9) Baltimore, MD - 2016 157 - 157 100.0% 6,743,574 989.37 (10)
Liberty Ap tments (9) Newport News, VA - 2013 197 - 197 90.0% 2,242,988 1,054.23
Smith's L nding(9) Blacksburg, VA - 2009 284 - 284 100.0% 3,864,864 1,134.06
The Cosmop litan (8) Virginia Beach, VA ✓ - 2006 342 - 342 90.4% 5,857,657 1,579.73
Total / Weighted Avg Multifamily Portfolio 0% 1,266 - 1,266 94.3% $22,843,083 $1,253.42
18Development Pipeline
$ in thousands
Town Center Phase VI Meeting Street One City Center Point Street Apts.
(1) Represents estimates that may change as the development
process proceeds
(2) First full stabilized quarter
(3) AHH earns a preferred return on equity prior to any distributions
to JV Partners
(4) Signed letter of intent
Q3 2017 Year to Date
Capitalized Interest $379 $791
Capitalized Overhead $571 $1,713
Schedule(1)
Development, Not Delivered
Property
Type Estimated(1) % Leased
Construction
Start
Initial
Occupancy
Stabilized
Operation (2)
Estimated
Cost(1)
Cost to
Date
AHH
Ownership % Anchor Tenants & Other Notes
Meeting Street
Charleston, SC
Multifamily 114 units NA 3Q17 3Q19 3Q19 $53,000 $9,000 90% NA
King Street
Charleston, SC
Multifamily 74 units NA 3Q17 3Q19 3Q19 48,000 10,000 93% NA
Harding Place
Charlotte, NC
Multifamily 225 Units NA 3Q16 3Q18 1Q20 47,000 22,000 80%(3) NA
Town Center Phase VI
Virginia Beach, VA
Mixed-use 39,000 SF
131 Units
46% 4Q16 3Q18 3Q19 43,000 16,000 100% Williams Sonoma, Pottery Barn
Brooks Crossing
Newport News, VA
Office 100,000 sf 100% 1Q18 1Q19 2Q19 22,000 1,000 65%(3) Huntington Ingalls Industries (4)
Total Development, Not Delivered $213,000 $58,000
Development, Delivered Not Stabilized
Brooks Crossing
Newport News, VA
Retail 18,000 sf 60% 3Q15 3Q16 2Q18 3,000 3,000 65%(3) Misc. small shops
Lightfoot Marketplace
Will iamsburg, VA
Retail 109,000 sf 73% 3Q14 3Q16 2Q18 25,000 23,000 70%(3) Harris Teeter, CHKD
Total Development, Delivered Not Stabilized $28,000 $26,000
Total $241,000 $84,000
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 $11,000 100% Duke University
AHH Equity requirement $11.0M
Mezzanine Investments
Purchase
Option Price
Loan
Balance
Point Street Apartments
Baltimore, MD
Multifamily 289 units NA 1Q16 1Q18 2Q19 $92,000 $22,000 Option to purchase
88% upon completion
$23M Mezzanine financing by AHH,
earning 8% interest income
Annapolis Junction
Annapolis Junction, MD
Multifamily 416 units 5% 2Q16 3Q17 1Q19 102,000 42,000 Option to purchase
88% upon completion
$43M Mezzanine financing by AHH,
earning 10% interest income
Total Mezzanine Investment $194,000 $64,000
19Acquisitions & 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 Anchor Tenants
Wendover Village Outparcel Greensboro, NC 35,895 $14,300 $7,900 $0 7.7% 3Q17 Panera, Rooms to Go Kids
Renaissance Square Davidson, NC 80,468 17,085 - - 7.1% 4Q16 Harris Teeter
Columbus Village II Virginia Beach, VA 92,061 26,200 - 26,200 5.6% 4Q16 Regal, Bed Bath & Beyond
Southshore Shops Midlothian, VA 40,333 9,160 - 2,475 7.8% 3Q16 Buffalo Wild Wings
Southgate Square Colonial Heights, VA 220,131 38,585 - 17,485 7.3% 2Q16 PetSmart, Michael's, Burlington
Retail Portfolio (11 properties) Mid-Atlantic 1,082,681 170,500 87,000 - 7.2% 1Q16 Harris Teeter, Bed Bath & Beyond
Providence Plaza Charlotte, NC 103,118 26,200 14,000 - 7.3% 3Q15 Chipotle
Socastee Commons Myrtle Beach, SC 57,573 8,600 3,600 - 7.3% 3Q15 BiLo
Columbus Village Virginia Beach, VA 65,746 21,025 - 14,025 6.4% 3Q15 Barnes & Noble
Perry Hall Marketplace &
Stone House Square
Maryland 182,949 39,555 15,200 4,155 7.4% 2Q15 Safeway & Weis Markets
Dimmock Square Colonial Heights, VA 106,166 19,662 - 9,662 7.3% 3Q14 Old Navy, Best Buy, Pier 1
Total/Weighted Average 2,067,121 $390,872 $127,700 $74,002 7.1%
DISPOSITIONS
Properties Location
Square
Feet/Units Sale Price Cash Proceeds Gain on Sale
Cash Cap
Rate Disposition Date Anchor Tenants
Commonwealth of VA Buildings Virginia Beach & Chesapeake, VA 47,366 $13,150 $8,000 $4,194 6.8% 3Q17 Commonwealth of VA
Greentree Wawa Chesapeake, VA 5,088 4,600 4,400 3,396 5.0% 1Q17 Wawa
Oyster Point Newport News, VA 100,139 6,500 - 3,793 16.4% (3) 3Q16 GSA
Non-Core Retail Portfolio Various 174,758 12,850 12,600 (27) 7.1% 2Q16 - 3Q16 Kroger, Family Dollar
Richmond Tower Richmond, VA 206,969 78,000 77,000 26,674 7.9% 1Q16 Williams Mullen
Oceaneering Chesapeake, VA 154,000 30,000 10,000 4,987 6.7% 4Q15 Oceaneering International
Whetstone Apartments Durham, NC 203 units 35,625 17,600 7,210 5.7% 2Q15 NA
Sentara Williamsburg Williamsburg, VA 49,200 15,450 15,200 6,197 6.3% 1Q15 Sentara
Virginia Natural Gas Virginia Beach, VA 31,000 8,900 7,400 2,211 6.3% 4Q14 Virginia Natural Gas
Total/Weighted Average 768,520 sf/
203 units
$205,075 $152,200 $58,635 7.2%
20Construction Business Summary
$ in thousands
Gross Profit Summary
Q3 2017
Trailing 12
Months
Revenue $41,201 $211,866
Expense (39,377) (203,627)
Gross Profit $1,824 $8,239
(Unaudited)
Location
Total Contract
Value
Work in Place as
of 9/30/2017 Backlog
Estimated Date
of Completion
Highlighted Projects
Point Street Apartments Baltimore, MD $73,230 $54,254 $18,976 1Q 2018
Annapolis Junction Apartments Annapolis Junction, MD 69,325 64,676 4,649 1Q 2018
Durham City Center Durham, NC 63,787 37,586 26,201 2Q 2018
Dinwiddie Municipal Complex Dinwiddie, VA 23,125 5,192 17,933 2Q 2019
Sub Total $229,467 $161,708 $67,759
All Other Projects $378,041 $369,057 $8,984
Total $607,508 $530,765 $76,743
21
(1) See page 31 for Same Store vs. Non – Same Store Properties
(2) The decrease in Same Store NOI is the impact of a decrease in multifamily occupancy due to the ongoing construction in the Town Center of Virginia Beach and the relocation
and expansion of two office tenants to 4525 Main Street, which is not currently included in the Same Store NOI calculation.
Same Store NOI by Segment
$ in thousands
(Reconciliation to GAAP located in appendix pg. 32)
Three months ended Nine months ended
9/30/2017 9/30/2016 $ Change % Change 9/30/2017 9/30/2016 $ Change % Change
Office(1)(2) (Unaudited) (Unaudited)
Revenue $3,378 $3,595 ($217) -6.0% $10,258 $10,805 ($547) -5.1%
Expenses 1,451 1,407 44 3.1% 4,085 3,986 99 2.5%
Net Operating Income 1,927 2,188 (261) -11.9% 6,173 6,819 (646) -9.5%
Retail(1)
Revenue 13,166 12,989 177 1.4% 28,297 27,846 451 1.6%
Expenses 3,721 3,359 362 10.8% 8,107 7,717 390 5.1%
Net Operating Income 9,445 9,630 (185) -1.9% 20,190 20,129 61 0.3%
Multifamily(1)(2)
Revenue 4,793 4,872 (79) -1.6% 14,230 14,354 (124) -0.9%
Expenses 2,356 2,206 150 6.8% 6,595 6,342 253 4.0%
Net Operating Income 2,437 2,666 (229) -8.6% 7,635 8,012 (377) -4.7%
Same Store Net Operating Income (NOI) $13,809 $14,484 ($675) -4.7% $33,998 $34,960 ($962) -2.8%
Net effect of straight-line rents 81 (30) 111 534 71 463
Amortization of lease incentives and above (below) market rents (23) (17) (6) 346 365 (19)
Same store portfolio NOI, cash basis $13,867 $14,437 ($570) -3.9% $34,877 $35,396 ($519) -1.5%
NOI, Cash Basis:
Office $2,066 $2,216 ($150) -6.8% $6,718 $6,833 ($115) -1.7%
Retail 9,365 9,547 (182) -1.9% 20,498 20,518 (20) -0.1%
Multifamily 2,436 2,674 (238) -8.9% 7,661 8,044 (383) -4.8%
$13,867 $14,437 ($570) -3.9% $34,877 $35,396 ($519) -1.5%
NOI:
Office $1,927 $2,188 ($261) -11.9% $6,173 $6,819 ($646) -9.5%
Retail 9,445 9,630 (185) -1.9% 20,190 20,129 61 0.3%
Multifamily 2,437 2,666 (229) -8.6% 7,635 8,012 (377) -4.7%
$13,809 $14,484 ($675) -4.7% $33,998 $34,960 ($962) -2.8%
22Top 10 Tenants by Annualized Base Rent
$ in thousands
As of September 30, 2017
Office Portfolio
Tenant
Number
of Leases
Lease
Expiration
Annualized
Base Rent
% of Office Portfolio
Annualized Base Rent
% of Total Portfolio
Annualized Base Rent
Clark Nexsen 1 2029 $ 2,536 12.8% 2.7%
Mythics 1 2030 1,052 5.3% 1.1%
Hampton University 2 2023 - 2024 1,033 5.2% 1.1%
Pender & Coward 1 2030 860 4.4% 0.9%
Kimley-Horn 1 2027 859 4.4% 0.9%
Troutman Sanders 2 2025 838 4.2% 0.9%
The Art Institute 3 2019 835 4.2% 0.9%
City of Va Beach Development Authority 1 2024 722 3.7% 0.8%
Cherry Bekaert 1 2022 698 3.5% 0.7%
Williams Mullen 1 2028 643 3.3% 0.7%
Top 10 Total $ 10,077 51.0% 10.6%
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 11 2018 - 2036 $ 5,829 11.1% 6.1%
Home Depot 2 2019 - 2023 2,190 4.2% 2.3%
Bed, Bath, & Beyond 4 2020 - 2024 1,677 3.2% 1.8%
Regal Cinemas 2 2019 - 2022 1,607 3.0% 1.7%
PetSmart 5 2020 - 2022 1,438 2.7% 1.5%
Food Lion 3 2019 - 2022 1,290 2.4% 1.4%
Dick's Sporting Goods 1 2020 840 1.6% 0.9%
Safeway 2 2021 821 1.6% 0.9%
Weis Markets 1 2028 802 1.5% 0.8%
Ross Dress for Less 2 2020 - 2022 762 1.4% 0.8%
Top 10 Total $ 17,256 32.8% 18.1%
23Office Lease Summary
(1) Excludes new leases from properties in development
Renewal Lease Summary GAAP Cash
Quarter
Number of
Leases
Signed
Net rentable
SF Signed
Leases
Expiring
Net rentable
SF Expiring
Contractual
Rent per SF
Prior Rent
per SF
Releasing
Spread
Contractual
Rent per SF
Prior Rent
per SF
Releasing
Spread
Weighted
Average Lease
Term (yrs) TI & LC
TI & LC
per SF
Q3 2017 2 10,454 - - $25.06 $24.82 1.0% $25.21 $25.46 -1.0% 4.24 $48,791 $4.67
Q2 2017 2 13,420 - - 27.94 27.22 2.7% 27.38 28.42 -3.7% 7.21 153,873 11.47
Q1 2017 2 7,782 2 4,752 31.61 25.72 22.9% 32.30 29.25 10.4% 1.00 23,314 3.00
Q4 2016 1 22,950 1 777 30.66 26.58 15.3% 28.00 29.75 -5.9% 10.00 569,907 24.83
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 2017 1 2,690 $24.50 5.00 $95,630 $35.55
Q2 2017 2 7,541 24.39 4.36 259,901 34.47
Q1 2017 3 13,491 23.92 4.53 390,548 28.95
Q4 2016 - - - - - -
24Office Lease Expirations
(1) Includes new leases from properties in development
Year of Lease Expiration
Number of
Leases
Expiring
Square Footage
of Leases
Expiring (1)
% Portfolio
Net Rentable
Square Feet
Annualized Base
Rent
% of Portfolio
Annualized
Base Rent
Annualized Base
Rent per Leased
Square Foot
Available - 86,182 10.8% $0.00 - $0.00
2017 3 6,426 0.8% 158,973 0.8% 24.74
2018 13 56,147 7.0% 1,680,218 8.5% 29.93
2019 15 92,870 11.6% 2,360,103 12.0% 25.41
2020 5 20,864 2.6% 611,115 3.1% 29.29
2021 7 45,175 5.6% 1,260,445 6.4% 27.90
2022 9 71,629 9.0% 1,971,470 10.0% 27.52
2023 5 49,380 6.2% 1,277,315 6.5% 25.87
2024 3 60,751 7.6% 1,733,377 8.8% 28.53
2025 6 66,487 8.3% 1,851,949 9.4% 27.85
2026 3 15,140 1.9% 327,423 1.7% 21.63
2027 3 49,081 6.1% 1,395,538 7.1% 28.43
Thereafter 7 179,723 22.5% 5,111,229 25.9% 28.44
Total / Weighted Average 79 799,855 100.0% $19,739,156.27 100.0% $27.66
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
-
50,000
100,000
150,000
200,000
Leased Square Feet % ABR of Office Portfolio
25Retail Lease Summary
(1) Excludes new leases from properties in development
Renewal Lease Summary GAAP Cash
Quarter
Number of
Leases
Signed
Net rentable
SF Signed
Leases
Expiring
Net rentable SF
Expiring
Contractual
Rent per SF
Prior Rent
per SF
Releasing
Spread
Contractual
Rent per SF
Prior Rent
per SF
Releasing
Spread
Weighted
Average Lease
Term (yrs) TI & LC
TI & LC
per SF
Q3 2017 10 39,610 5 9,695 $17.59 $16.19 8.6% $17.41 $16.37 6.4% 3.98 $126,239 $3.19
Q2 2017 14 73,961 7 14,087 19.46 18.75 3.8% 19.60 18.85 3.9% 3.78 93,362 1.26
Q1 2017 13 121,282 2 3,174 16.46 15.37 7.1% 16.42 15.51 5.9% 5.95 461,039 3.80
Q4 2016 8 57,227 8 23,035 16.81 17.07 -1.5% 16.25 17.13 -5.1% 6.50 443,344 7.75
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 2017 4 7,024 $15.72 4.85 $68,422 $9.74
Q2 2017 9 14,315 20.66 7.65 376,170 26.28
Q1 2017 6 13,698 22.91 5.70 204,418 14.92
Q4 2016 6 21,078 13.25 8.39 365,657 17.35
26Retail Lease Expirations
(1) Includes new leases from properties in development
Year of Lease Expiration
Number of
Leases
Expiring
Square Footage
of Leases
Expiring (1)
% Portfolio
Net Rentable
Square Feet
Annualized Base
Rent
% of Portfolio
Annualized
Base Rent
Annualized Base
Rent per Leased
Square Foot
Available - 143,613 4.0% -$ - -$
M-T-M 4 4,728 0.1% 68,990 0.1% 14.59
2017 13 35,575 1.0% 647,252 1.2% 18.19
2018 69 277,458 7.7% 4,586,350 8.7% 16.53
2019 86 586,282 16.2% 9,162,423 17.4% 15.63
2020 71 560,530 15.5% 7,736,284 14.7% 13.80
2021 53 268,089 7.4% 4,927,208 9.4% 18.38
2022 48 395,285 10.9% 6,276,821 11.9% 15.88
2023 23 281,414 7.8% 3,913,011 7.4% 13.90
2024 17 166,518 4.6% 2,632,422 5.0% 15.81
2025 17 224,827 6.2% 2,378,977 4.5% 10.58
2026 19 166,665 4.6% 2,878,811 5.5% 17.27
2027 14 105,286 2.9% 2,274,209 4.3% 21.60
Thereafter 16 406,151 11.2% 5,201,936 9.9% 12.81
Total / Weighted Average 450 3,622,421 100.0% 52,684,694$ 100.0% $15.14
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
20.0%
-
100,000
200,000
300,000
400,000
500,000
600,000
700,000
Leased Square Feet % ABR of Retail Portfolio
27
Appendix
Definitions & Reconciliations
28Definitions
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.
29Definitions
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.
30Definitions
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.
31Same Store vs. Non-Same Store
Same
Store
Non-Same
Store
Same
Store
Non-Same
Store
Same
Store
Non-Same
Store
Same
Store
Non-Same
Store
Retail Properties Retail Properties (Continued)
249 Central Park Retail X X Sandbridge Commons X X
Alexander Pointe X X Socastee Commons X X
Bermuda Crossroads X X South Retail X X
Broad Creek Shopping Center X X South Square X X
Brooks Crossing (Retail) X X Southgate Square X X
Broadmoor Plaza X X Southshore Shops X X
Columbus Village X X Stone House Square X X
Columbus Village II X X Studio 56 Retail X X
Commerce Street Retail X X Tyre Neck Harris Teeter X X
Courthouse 7-Eleven X X Waynesboro Commons X X
Dick’s at Town Center X X Wendover Village X X
Dimmock Square X X Wendover Village Outparcel
Greentree Shopping Center X X Office Properties
Fountain Plaza Retail X X 4525 Main Street X X
Gainsborough Square X X Armada Hoffler Tower X X
Hanbury Village X X Commonwealth of VA - Chesapeake X X
Harper Hill Commons X X Commonwealth of VA - Virginia Beach X X
Harrisonburg Regal X X One Columbus X X
Lightfoot Marketplace X X Two Columbus X X
North Hampton Market X X Multifamily Properties
North Point Center X X Encore Apartments X X
Oakland Marketplace X X Liberty Apartments X X
Parkway Marketplace X X Smith’s Landing X X
Patterson Place X X The Cosmopolitan X X
Perry Hall Marketplace X X Johns Hopkins Village X X
Providence Plaza X X
Renaissance Square X X
Nine Months Ended
9/30/2017 to 2016
Three Months Ended
9/30/2017 to 2016
Three Months Ended
9/30/2017 to 2016
Nine Months Ended
9/30/2017 to 2016
32Reconciliation to Property Portfolio NOI
$ in thousands
(1) See page 31 for the Same Store vs. Non-Same Store properties
Three months ended 9/30 Nine months ended 9/30
2017 2016 2017 2016
Office Same Store(1)
Rental revenues $3,378 $3,595 $10,258 $10,805
Property expenses 1,451 1,407 4,085 3,986
NOI 1,927 2,188 6,173 6,819
Non-Same Store NOI 907 1,051 2,735 3,421
Segment NOI $2,834 $3,239 $8,908 $10,240
Retail Same Store(1)
Rental revenues $13,166 $12,989 $28,297 $27,846
Property expenses 3,721 3,359 8,107 7,717
NOI 9,445 9,630 20,190 20,129
Non-Same Store NOI 2,148 1,107 14,644 10,583
Segment NOI $11,593 $10,737 $34,834 $30,712
Multifamily Same Store(1)
Rental revenues $4,793 $4,872 $14,230 $14,354
Property expenses 2,356 2,206 6,595 6,342
NOI 2,437 2,666 7,635 8,012
Non-Same Store NOI 709 473 2,840 554
Segment NOI $3,146 $3,139 $10,475 $8,566
Total Property Portfolio NOI $17,573 $17,115 $54,217 $49,519
33Reconciliation to Property Portfolio NOI
$ in thousands
Three months ended 9/30/2017
Diversified Portfolio Office Retail Multifamily Total
NOI - Cash Basis $82 $9,227 $1,637 $10,946
Net effect of straight-line rents - 95 17 112
Amortization of lease incentives and (above) below market rents - 176 (15) 161
NOI $82 $9,498 $1,639 $11,219
Town Center of Virginia Beach Office Retail Multifamily Total
NOI - Cash Basis $2,989 $1,973 $1,495 $6,457
Net effect of straight-line rents 51 (26) 12 37
Amortization of lease incentives and (above) below market rents (74) (50) - (124)
Elimination of AHH rent (214) (96) - (310)
NOI 2,752 1,801 1,507 $6,060
NOI Office Retail Multifamily Total
Diversified Portfolio $82 $9,498 $1,639 $11,219
Town Center of Virginia Beach 2,752 1,801 1,507 6,060
Unstabilized Properties - 294 - 294
Total Property Portfolio NOI $2,834 $11,593 $3,146 $17,573
34Reconciliation to GAAP Net Income
$ in thousands
Office Retail Multifamily
Total Rental
Properties
General Contracting &
Real Estate Services Total
Segment revenues 4,762$ 15,880$ 6,454$ 27,096$ 41,201$ 68,297$
Segment expenses 1,928 4,287 3,308 9,523 39,377 48,900
Net operating income 2,834$ 11,593$ 3,146$ 17,573$ 1,824$ 19,397$
Depreciation and amortization (9,239)
General and administrative expenses (2,098)
Acquisition, development and other pursuit costs (61)
Impairment charges (19)
Interest income 1,910
Interest expense (4,253)
Gain on real estate dispositions 4,692
Change in fair value of interest rate derivatives 87
Other income 74
Income tax provision (29)
Net income 10,461$
Office Retail Multifamily
Total Rental
Properties
General Contracting &
Real Estate Services Total
Segment revenues 14,427$ 47,089$ 19,567$ 81,083$ 161,391$ 242,474$
Segment expenses 5,519 12,255 9,092 26,866 154,588 181,454
Net operating income 8,908$ 34,834$ 10,475$ 54,217$ 6,803$ 61,020$
Depreciation and amortization (28,018)
General and administrative expenses (7,762)
Acquisition, development and other pursuit costs (477)
Impairment charges (50)
Interest income 4,966
Interest expense (13,282)
Loss on extinguishment of debt -
Gain on real estate dispositions 8,087
Change in fair value of interest rate derivatives 300
Other income 154
Income tax provision (781)
Net income 24,157$
Three months ended 9/30/2017
Nine months ended 9/30/2017