Attached files
| file | filename |
|---|---|
| EX-99.2 - EXHIBIT 99.2 - Armada Hoffler Properties, Inc. | ahh4q2017supplemental.htm |
| EX-99.1 - EXHIBIT 99.1 - Armada Hoffler Properties, Inc. | q4-2017ex991earningsrelease.htm |
| 8-K - 8-K - Armada Hoffler Properties, Inc. | ahhq4123120178-k.htm |
1
2018 | Guidance Presentation
2FORWARD LOOKING STATEMENTS
This presentation should be read in conjunction with the unaudited condensed consolidated financial statements appearing in our press
release dated February 6, 2018, which has been furnished as Exhibit 99.1 to our Form 8-K filed on February 6, 2018. The Company
makes statements that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (set
forth in Section 27A 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 2018 outlook and related
assumptions, anticipated growth in our funds from operations, normalized funds from operations, adjusted funds from operations,
funds available for distribution and net operating income are forward-looking statements. You can identify forward-looking statements
by the use of forward-looking terminology such as “believes,” “expects,” “may,” “will,” “should,” “seeks,” “intends,” “plans,” “estimates”
or “anticipates” or the negative of these words and phrases or similar words or phrases which are predictions of or indicate future
events or trends and which do not relate solely to historical matters. You can also identify forward-looking statements by discussions of
strategy, plans or intentions.
Forward-looking statements involve numerous risks and uncertainties and you should not rely on them as predictions of future events.
Forward-looking statements depend on assumptions, data or methods which may be incorrect or imprecise and the Company may not
be able to realize them. The Company does not guarantee that the transactions and events described will happen as described (or that
they will happen at all). For further discussion of risk factors and other events that could impact our future results, please refer to the
section entitled “Risk Factors” in our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission (the
“SEC), and the documents subsequently filed by us from time to time with the SEC.
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.
3
Guidance Assumptions
• Raising $55 million through the ATM program for a full year
weighted average share count of 64.5 million
• Interest expense is calculated based on the Forward LIBOR Curve,
which forecasts rates rising to 2.2% by year end
• Acquisition of four retail centers
• Disposition of a newly constructed distribution center in the fourth
quarter of 2018
2018 OUTLOOK & ASSUMPTIONSOutlook Low High
Total NOI $80.7M $81.4M
Construction Segment Gross Profit $4.4M $7.5M
G&A expenses $10.7M $11.0M
Interest income $9.0M $9.5M
Interest expense $19.7M $20.3M
Normalized FFO per diluted share $1.00 $1.05
In millions except per share
4NOI GROWTH SINCE IPO
$20
$30
$40
$50
$60
$70
$80
$90
2013 2014 2015 2016 2017 2018
Est.
M
ill
io
n
s
Operating Portfolio NOI Development NOI Acquisition NOI
Estimate 2018 NOI to Increase 10% Over Prior Year
5EVOLVING PORTFOLIO NOI COMPOSITION
45%
10%
15%
16%
15%
6%
16%
14%
15%
49%
Construction
4%
Multifamily
25%
Office
12%
Mixed Use
31%
Retail
29%
2017 2018 Estimated
Projected Operating Portfolio with
Stabilized Pipeline
Center Location Featured Tenants
Indian Lakes Virginia Beach, VA Harris Teeter/Wawa
Parkway Centre Moultrie, GA Publix
Two Potential
Acquisitions
South Carolina Lowes Foods
37%
12%
32%
5%
15%
2018 Closed and Potential Acquisitions
Retail Entertainment &
Mixed Use Retail
Multifamily Office Construction
6CONSTRUCTION BUSINESS SUMMARY
$0
$1
$2
$3
$4
$5
$6
$7
$8
2013 2014 2015 2016 2017 2018
Est. ⁽¹⁾
Mil
lion
s
Operating Gross Profit Potential Profit on Sale of Fortune 50 Distribution Center - Net of Taxes
(1) 2018 Operating Gross Profit includes market fee for distribution center construction & development
7PROJECTS DELIVERED SINCE IPO
PROJECT NAME PRODUCT TYPE SF OR UNITS DELIVERY INVESTMENT
4525 Main Street
Virginia Beach, VA
Office 239,000 SF 3Q14 $53M
Encore Apartments
Virginia Beach, VA
Multifamily 286 Units 3Q14 $32M
Whetstone Apartments(1)
Durham, NC
Multifamily 203 Units 3Q14 $29M
Greentree
Chesapeake, VA
Retail 18,000 SF 4Q14 $6M
Oceaneering(1)
Chesapeake, VA
Office 155,000 SF 1Q15 $25M
Commonwealth of Virginia (1)
Chesapeake, VA
Office 36,000 SF 1Q15 $7M
Commonwealth of Virginia (1)
Virginia Beach, VA
Office 11,000 SF 1Q15 $3M
Sandbridge Commons
Virginia Beach, VA
Retail 70,000 SF 1Q16 $13M
Lightfoot Marketplace(2)(3)
Williamsburg, VA
Retail 109,000 SF 3Q16 $24M
Brooks Crossing(2)(3)
Newport News, VA
Retail 18,000 SF 3Q16 $3M
Johns Hopkins Village
Baltimore, MD
Multifamily 157 Units 3Q16 $69M
TOTAL INVESTMENT
656,000 SF/
646 Units
$264M
MANAGEMENT ESTIMATED VALUE CREATION OF APPROXIMATELY 20%
AHH TYPICALLY DEVELOPS
$150-200 million
EVERY 18-24 MONTHS
(1) Realized value of disposed properties created from the wholesale to retail spread
(2) Majority Interest in Joint Venture
(3) AHH earns a preferred return on equity prior to any distributions to JV Partners
8
Current Development Pipeline
Development Projects(1) PRODUCT TYPE DELIVERY(1) INVESTMENT(2)
Annapolis Junction(3)
Annapolis Junction, MD
Multifamily 3Q17 $106M
Point Street Apartments(3)
Baltimore, MD
Multifamily 1Q18 $98M
One City Center(5)
Durham, NC
Mixed-Use 3Q18 $44M
Town Center Phase VI
Virginia Beach, VA
Mixed-Use 3Q18 $43M
Harding Place(4)(6)
Charlotte, NC
Multifamily 3Q18 $47M
Market at Mill Creek(4)(6)
Mt. Pleasant, SC
Retail 1Q19 $23M
Brooks Crossing(4)(6)
Newport News, VA
Office 1Q19 $22M
King Street(4)
Charleston, SC
Multifamily 3Q19 $48M
Meeting Street(4)
Charleston, SC
Multifamily 3Q19 $53M
TOTAL INVESTMENT ~ $484M
MANAGEMENT ESTIMATED EQUITY CREATION OF APPROXIMATELY 20%
(1) Timing and investment amounts are estimates and subject to change as
the development process demands.
YEAR DELIVERED INVESTMENT
2014 $120M
2015 $48M
2016 $96M
2018-2019(1) $484M(1)
TOTAL INVESTMENT ~ $748M
MANAGEMENT ESTIMATED EQUITY CREATION OF APPROXIMATELY 20%
Total Estimated Value Creation
(1) For ownership structure, see page 17 of the 4Q17 Supplemental package
(2) Timing and investment amounts are estimates and subject to change as the development
process demands.
(3) Mezzanine Investments with 88% purchase option
(4) Majority Interest in Joint Venture
(5) Minority Interest in Joint Venture
(6) AHH earns a preferred return on equity prior to any distributions to JV Partners
PROJECTS UNDER DEVELOPMENT
92018 OUTLOOK & ASSUMPTIONS
Guidance Assumptions
Raising $55 million through the ATM program for a full year weighted average share count of 64.5 million
•
Interest expense is calculated based on the Forward LIBOR Curve, which forecasts rates rising to 2.2% by year end
•
Acquisition of four retail centers
•
Disposition of a newly constructed distribution center in the fourth quarter of 2018
Outlook Low High
Total NOI $80.7M $81.4M
Construction Segment Gross Profit $4.4M $7.5M
G&A expenses $10.7M $11.0M
Interest income $9.0M $9.5M
Interest expense $19.7M $20.3M
Normalized FFO per diluted share $1.00 $1.05