Attached files
| file | filename |
|---|---|
| 8-K - 8-K - Armada Hoffler Properties, Inc. | ahhq133120188-k.htm |
| EX-99.1 - EXHIBIT 99.1 - Armada Hoffler Properties, Inc. | q12018ex991earningsrelease.htm |
1
1Q 2018 | SUPPLEMENTAL FINANCIAL PACKAGE
2Table of Contents
3 Forward Looking Statements
4 Corporate Profile
5 Highlights
6 2018 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 Redevelopment and Mezzanine Investments
20 Acquisitions & Dispositions
21 Construction Business Summary
22 Same Store NOI by Segment
23 Top 10 Tenants by Annualized Base Rent
24 Office Lease Summary
25 Office Lease Expirations
26 Retail Lease Summary
27 Retail Lease Expirations
28 Appendix – Definitions & Reconciliations
32 Same Store vs Non-Same Store Properties
33 Reconciliation to Property Portfolio NOI
35 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 May 1, 2018, which has been
furnished as Exhibit 99.1 to our Form 8-K filed on May 1, 2018. 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.
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 Operating 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
Bank of America Merrill Lynch
James Feldmen
(646) 855-5808
james.feldman@baml.com
D. A. Davidson & Co.
James O. Lykins
(503) 603-3041
jlykins@dadco.com
Janney, Montgomery, & Scott LLC
Robert Stevenson
(646) 840-3217
robertstevenson@janney.com
FBR Capital Markets
Craig Kucera
(703) 862-5249
craigkucera@fbr.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
Stifel, Nicolaus & Company Inc.
John Guinee
(443) 224-1307
jwguinee@stifel.com
5
Highlights
• Net income of $7.0 million, or $0.11 per diluted share, for the quarter ended March 31, 2018 compared to net
income of $8.8 million, or $0.16 per diluted share, for the quarter ended March 31, 2017.
• Normalized Funds From Operations (“FFO”) of $15.4 million, or $0.25 per diluted share, for the quarter ended
March 31, 2018 compared to Normalized FFO of $14.6 million, or $0.26 per diluted share, for the quarter ended
March 31, 2017.
• FFO of $16.3 million, or $0.26 per diluted share, for the quarter ended March 31, 2018 compared to FFO of
$14.8 million, or $0.27 per diluted share, for the quarter ended March 31, 2017.
• Core operating property portfolio occupancy at 95.6% as of March 31, 2018 compared to 94.2% as of December
31, 2017.
• During the first quarter of 2018, positive releasing spreads were 7.8% on a GAAP basis and 3% on a cash basis.
• The Board of Directors declared a cash dividend of $0.20 per common share for the first quarter of 2018. This
represents a 5.3% increase over the prior quarter's cash dividend and the fourth increase in four years, totaling
25% dividend growth during that period.
• Added approximately 132,000 square feet of retail space through the acquisitions of Indian Lakes Crossing, a
Harris Teeter-anchored center in Virginia Beach, Virginia and Parkway Centre, a Publix-anchored center in
Moultrie, Georgia.
• After the end of the quarter, the Company entered into an agreement to sell the Wawa parcel at Indian Lakes
Crossing for a 5.35% capitalization rate. Once complete, this will bring the Harris Teeter-anchored center to an
approximate 8% capitalization rate overall.
62018 Outlook & Assumptions
Guidance Assumptions
• Raising $42 million through the ATM program for a full year
weighted average share count of 63.6 million
• Interest expense is calculated based on the Forward LIBOR Curve,
which forecasts rates rising to 2.25% by year end
• Acquisition of a retail center in the second half of the year
• Disposition of the Wawa parcel at Indian Lakes Crossing at a
5.35% cap rate
• Disposition of a newly constructed distribution center in the fourth
quarter of 2018
$ in millions, except per share data
Outlook Low High
Total NOI $79.5M $80.2M
Construction Segment Gross Profit $4.4M $7.5M
G&A expenses $10.7M $11.0M
Interest income $9.3M $9.5M
Interest expense $19.8M $20.3M
Normalized FFO per diluted share $1.00 $1.05
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
3/31/2018 12/31/2017 9/30/2017 6/30/2017 3/31/2017
OPERATIONAL METRICS
Net income $6,983 $5,768 $10,461 $4,943 $8,753
Net income per diluted share $0.11 $0.09 $0.17 $0.08 $0.16
Rental properties Net Operating Income (NOI) 19,462 18,570 17,573 17,989 18,655
General contracting and real estate services gross profit 636 641 1,824 2,656 2,323
Adjusted EBITDA(1) 19,399 18,345 19,203 19,272 19,376
Funds From Operations (FFO) 16,261 15,071 15,500 14,247 14,833
FFO per diluted share $0.26 $0.24 $0.25 $0.24 $0.27
Normalized FFO 15,376 14,525 15,493 14,724 14,590
Normalized FFO per diluted share $0.25 $0.23 $0.25 $0.25 $0.26
Annualized dividend yield 5.84% 4.89% 5.50% 5.87% 5.47%
CAPITALIZATION
Total common shares outstanding 45,205 44,938 44,937 44,932 37,813
Operating Partnership units outstanding 17,441 17,486 17,845 17,846 17,859
Common shares and OP units outstanding 62,646 62,424 62,782 62,778 55,672
Market price per common share $13.69 $15.53 $13.81 $12.95 $13.89
Equity market capitalization(2) $857,624 $969,445 $867,019 $812,975 $773,284
Total debt(3) 595,637 523,412 493,493 470,314 527,504
Total market capitalization 1,453,261 1,492,857 1,360,512 1,283,289 1,300,788
Less: cash (19,306) (22,916) (22,916) (21,726) (13,688)
Total enterprise value $1,433,955 $1,469,941 $1,337,596 $1,261,563 $1,287,100
BALANCE SHEET METRICS
Core Debt/enterprise value 38.4% 33.0% 34.2% 30.9% 32.9%
Fixed charge coverage ratio 3.6x 3.5x 3.7x 3.5x 3.6x
Core Debt/Annualized Core EBITDA 7.0x 6.6x 6.0x 5.3x 6.0x
CORE PORTFOLIO OCCUPANCY
Office(4) 92.2% 89.9% 89.2% 89.9% 87.7%
Retail (4) 96.7% 96.5% 96.9% 96.8% 96.7%
Multifamily(5) 96.1% 92.9% 94.3% 91.6% 92.7%
Weighted Average(6) 95.6% 94.2% 94.7% 94.2% 94.3%
8
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
3/31/2018 3/31/2018 General contracting gross profit $5,757
Diversified Portfolio
Office $0 $0
Retail 9,831 39,322 Non-Property Assets
Multifamily 2,274 9,097 Non-Property Assets As of 3/31/2018
Total diversified portfolio NOI $12,105 $48,419 Cash and cash equivalents $15,804
Restricted cash 3,502
Virginia Beach Town Center Accounts receivable 16,125
Office(1) $3,065 $12,260 Notes receivable, including mezzanine investments 88,973
Retail (1) 2,171 8,684 Construction receivables, including retentions 21,336
Multifamily 1,584 6,336 Equity method investments (Durham City Center JV) 12,821
Total Virginia Beach Town Center NOI $6,820 $27,280 Other assets 55,531
Land held for development 1,473
Stabilized portfolio NOI - cash basis $18,925 $75,699 Total non-property assets $215,565
Timing of mid-quarter transaction
Acquisition $80 $320 Liabilities & Share Count
Disposition - - As of 3/31/2018
Total timing mid-quarter transaction $80 $320 Liabilities
Mortgages and notes payable $589,634
Signed leases stil l in free rent period $617 $2,468 Accounts payable and accrued liabilities 11,333
Construction payables, including retentions 41,516
Total $19,622 $78,487 Other liabilities 42,405
Total l iabilities $684,888
Development Pipeline
3/31/2018 Share Count
Income producing property $24,000 Total common shares outstanding 45,205
Construction in progress 111,000 Total OP units outstanding 17,441
Other assets 1,000 Total common shares & OP units outstanding 62,646
Total cost to date $136,000
9Summary Balance Sheet
$ in thousands
3/31/2018 12/31/2017
Assets (Unaudited)
Real estate investments:
Income producing property $936,579 $910,686
Held for development 1,473 680
Construction in progress 120,850 83,071
Accumulated depreciation (171,205) (164,521)
Net real estate investments 887,697 829,916
Cash and cash equivalents 15,804 19,959
Restricted cash 3,502 2,957
Accounts receivable, net 16,125 15,691
Notes receivable 88,973 83,058
Construction receivables, including retentions 21,336 23,933
Costs and estimated earnings in excess of bil l ings 315 245
Equity method investments 12,821 11,411
Other assets 55,216 55,953
Total Assets 1,101,789 $1,043,123
Liabilities and Equity
Indebtedness, net $589,634 $517,272
Accounts payable and accrued liabilities 11,333 15,180
Construction payables, including retentions 41,516 47,445
Bil l ings in excess of costs and estimated earnings 2,235 3,591
Other l iabilities 40,170 39,352
Total Liabilities 684,888 622,840
Total Equity 416,901 420,283
Total Liabilities and Equity $1,101,789 $1,043,123
As of
10Summary Income Statement
In thousands, except per share data
Three months ended
3/31/2018 3/31/2017
Revenues (Unaudited)
Rental revenues $28,699 $27,232
General contracting and real estate services 23,050 63,519
Total Revenues 51,749 90,751
Expenses
Rental expenses 6,424 6,068
Real estate taxes 2,813 2,509
General contracting and real estate services 22,414 61,196
Depreciation and amortization 9,278 9,475
General and administrative 2,961 2,986
Acquisition, development & other pursuit costs 84 47
Impairment charges - 4
Total Expenses 43,974 82,285
Operating Income 7,775 8,466
Interest income 2,232 1,398
Interest expense (4,373) (4,535)
Gain on real estate dispositions - 3,395
Change in fair value of interest rate derivatives 969 294
Other income 114 37
Income before taxes 6,717 9,055
Income tax benefit (provision) 266 (302)
Net Income $6,983 $8,753
Per Diluted Share & Unit $0.11 $0.16
Weighted Average Shares & Units - Diluted 62,538 55,475
11
(1) See definitions on pages 29-30
(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)
3/31/2018 12/31/2017 9/30/2017 6/30/2017 3/31/2017
Funds From Operations
Net income $6,983 $5,768 $10,461 $4,943 $8,753
Earnings per diluted share $0.11 $0.09 $0.17 $0.08 $0.16
Depreciation and amortization 9,278 9,303 9,239 9,304 9,475
Gains on dispositions of operating real estate(2) - - (4,200) - (3,395)
-
FFO $16,261 $15,071 $15,500 $14,247 $14,833
FFO per diluted share $0.26 $0.24 $0.25 $0.24 $0.27
Normalized FFO
Acquisition, development & other pursuit costs 84 171 61 369 47
Loss on extinguishment of debt - 50 - - -
Impairment charges - 60 19 27 4
Change in fair value of interest rate derivatives (969) (827) (87) 81 (294)
Normalized FFO $15,376 $14,525 $15,493 $14,724 $14,590
Normalized FFO per diluted share $0.25 $0.23 $0.25 $0.25 $0.26
Adjusted FFO
Non-cash stock compensation 555 276 215 421 411
Acquisition, development & other pursuit costs (84) (171) (61) (369) (47)
Tenant improvements, leasing commissions, lease incentives (3) (1,058) (1,115) (707) (895) (943)
Property related capital expenditures (1,321) (1,474) (1,167) (840) (442)
Non-cash interest expense 326 334 380 283 277
Net effect of straight-line rents (478) (166) (159) (122) (245)
Amortization of leasing incentives & above (below) market rents (56) (55) (50) (43) (47)
AFFO $13,260 $12,154 $13,944 $13,159 $13,554
Weighted Average Common Shares Outstanding 45,132 44,937 44,934 42,091 37,622
Weighted Average Operating Partnership ("OP") Units Outstanding 17,406 17,490 17,845 17,845 17,853
Total Weighted Average Common Shares and OP Units Outstanding 62,538 62,427 62,779 59,936 55,475
12
Debt Maturities & Principal Payments
Debt Stated Rate
Effective Rate as of
3/31/2018 Maturity Date 2018 2019 2020 2021 2022 Thereafter
Outstanding as
of 3/31/2018
Secured Notes Payable - Core Debt
Johns Hopkins Village L+1.90% 3.78% 7/30/2018 $46,698 $46,698
North Point Center Note 1 6.45% 6.45% 2/5/2019 165 9,352 9,517
Southgate Square L+2.00% 3.88% 4/29/2021 390 561 584 19,024 20,559
249 Central Park Retail L+1.95% 3.83% 8/10/2021 180 252 267 16,094 16,793
South Retail L+1.95% 3.83% 8/10/2021 78 111 117 7,062 7,368
Fountain Plaza Retail L+1.95% 3.83% 8/10/2021 108 152 161 9,689 10,110
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 373 504 522 544 17,438 19,381
Socastee Commons 4.57% 4.57% 1/6/2023 74 105 109 115 120 4,223 4,746
Sandbridge Commons L+1.75% 3.63% 1/17/2023 172 238 247 257 268 7,247 8,429
North Point Center Note 2 7.25% 7.25% 9/15/2025 86 121 130 140 151 1,804 2,432
Smith's Landing 4.05% 4.05% 6/1/2035 596 822 856 892 928 15,476 19,570
Liberty Apartments 5.66% 5.66% 11/1/2043 182 260 273 291 308 13,317 14,631
The Cosmopolitan 3.35% 3.35% 7/1/2051 559 766 792 819 847 41,243 45,026
Total - Secured Core Debt $49,661 $13,526 $5,208 $110,495 $20,060 $83,310 $282,260
Secured Notes Payable - Development Pipeline
Lightfoot Marketplace L+1.75% 3.63% 11/14/2018 10,500 10,500
Harding Place L+2.95% 4.83% 2/24/2020 8,251 8,251
Town Center Block 9 L+3.50% 5.38% 6/29/2020 6,626 6,626
Total - Development Pipeline 10,500 - 14,877 - - - 25,377
Total Secured Notes Payable $60,161 $13,526 $20,085 $110,495 $20,060 $83,310 $307,637
Unsecured Core Debt
Senior unsecured line of credit L+1.40% - 2.00% 3.43% 10/26/2021 108,000 108,000
Senior unsecured term loan L+1.35% - 1.95% 3.38% 10/26/2022 130,000 130,000
Senior unsecured term loan L+1.35% - 1.95% 3.50% (1) 10/26/2022 50,000 50,000
Total - Unsecured Core Debt - - - 108,000 180,000 - 288,000
Total Notes Payable excluding GAAP Adjustments $60,161 $13,526 $20,085 $218,495 $200,060 $83,310 $595,637
Weighted Average Interest Rate 3.8% 5.7% 4.8% 3.5% 3.5% 4.0% 3.7%
Balloon Payments 57,198 9,333 14,877 214,104 197,109 12,814 505,435
Principal amortization 2,963 4,193 5,208 4,391 2,951 70,496 90,202
Total Consolidated Debt $60,161 $13,526 $20,085 $218,495 $200,060 $83,310 $595,637
Fixed-rate Debt(2) 2,035 12,212 3,832 58,369 69,792 76,063 222,303
Variable-rate Debt(3) 58,126 1,314 16,253 160,126 130,268 7,247 373,334
Total Consolidated Debt $60,161 $13,526 $20,085 $218,495 $200,060 $83,310 $595,637
GAAP Adjustments (6,003)
Total Notes Payable $589,634
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 3/31/2018
1.883%
13Core Debt to Core EBITDA(1)
$ in thousands
(1) See definitions on page 31
(2) Excludes GAAP Adjustments
Three months ended
3/31/2018 12/31/2017 9/30/2017 6/30/2017 3/31/2017
Net Income $6,983 $5,768 $10,461 $4,943 $8,753
Excluding:
Interest expense 4,373 4,157 4,253 4,494 4,535
Income tax (266) (56) 29 450 302
Depreciation and amortization 9,278 9,303 9,239 9,304 9,475
(Gain) Loss on real estate dispositions - - (4,692) - (3,395)
Change in fair value of interest rate derivatives (969) (827) (87) 81 (294)
Adjusted EBITDA $19,399 $18,345 $19,203 $19,272 $19,376
Other adjustments:
Loss on extinguishment of debt - 50 - - -
Non-cash stock compensation 555 276 215 421 411
Development Pipeline (219) (339) (301) (1,244) (2,154)
Total Other Adjustments 336 (13) (86) (823) (1,743)
Core EBITDA $19,735 $18,332 $19,117 $18,449 $17,633
Total Debt(2) $595,637 $523,412 $493,493 $470,314 $527,504
Adjustments to Debt:
(Less) Development Pipeline(2) (25,377) (15,879) (12,894) (58,942) (90,021)
(Less) Cash & restricted cash (19,306) (22,916) (22,916) (21,726) (13,688)
Core Debt $550,954 $484,617 $457,683 $389,646 $423,795
Core Debt/Annualized Core EBITDA 7.0x 6.6x 6.0x 5.3x 6.0x
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
Debt Maturities & Principal Payments
$0
$50,000
$100,000
$150,000
$200,000
$250,000
2018 2019 2020 2021 2022 2023 and
thereafter
Total Debt Composition
Weighted Average
Percent of Debt Interest Rate Maturity
Secured vs. Unsecured Debt
Unsecured Debt 48.4% 3.4% 4.2 Yrs
Secured Debt 51.6% 3.9% 9.1 Yrs
Variable vs. Fixed-rate Debt
Variable-rate Debt(1) 62.7% 3.6% 3.4 Yrs
Fixed-rate Debt(2)(3) 37.3% 3.8% 12.5 Yrs
Fixed-rate and Hedged Debt(2)(3) 91.0%
Total 3.7% 6.8 Yrs
Interest Rate Cap Agreements
Effective Date Maturity Date Strike Rate Notional Amount
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
November 28, 2017 December 1, 2019 1.50% 50,000
March 7, 2018 April 1, 2020 2.25% 50,000
Total Interest Rate Caps 320,000
Fixed-rate Debt(2)(3) 222,303
Fixed-rate and Hedged Debt $542,303
% of Total (3) 91.0%
Unencumbered Summary
3/31/2018
% of Total Properties 72.1%
% of Annualized Base Rent 57.0%
15Capitalization & Financial Ratios
$ in thousands
Capitalization as of March 31, 2018 Capital Structure as of March 31, 2018
Debt % of Total Carrying Value
Unsecured credit facil ity 18% $108,000
Unsecured term Llans 30% 180,000
Mortgages payable 52% 307,637
Total debt $595,637
Equity % of Total Shares/Units Stock Price Market Value
Common stock (NYSE: AHH) 72% 45,205 $13.69 $618,856
Common units 28% 17,441 $13.69 238,767
Equity market capitalization 62,646 $857,624
Total market capitalization $1,453,261
Debt/Market capitalization 41.0%
Dividend Data Liquidity as of March 31, 2018
Trailing 12
Months
Common dividends and distributions $46,521 Cash on hand $19,306
AFFO 52,517 Availability under credit facil ity 39,900
AFFO payout ratio 88.6% Availability under construction loan 112,609
$171,815
Debt
41%Equity
59%
16Property Portfolio
Net Rentable Square Feet (RSF)(1)
Property Anchor Tenant(s) 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% - $2,536,599 $28.32
Alexander Pointe Harris Teeter Salisbury, NC 100% 1997 57,710 - 57,710 97.6% - 653,006 11.60
Bermuda Crossroads (6) Food Lion, OfficeMax Chester, VA 100% 2001 122,566 - 122,566 100.0% - 1,733,802 14.15
Broad Creek Shopping Center(6)(10) Home Depot, Food Lion, PetSmart Norfolk, VA 100% 1997/2001 251,504 - 251,504 100.0% - 3,878,305 15.42
Broadmoor Plaza Kroger, Staples, Jo-Ann Fabrics South Bend, IN 100% 1980 115,059 - 115,059 92.2% - 1,251,946 11.81
Brooks Crossing Various Small Shops Newport News, VA 100% 2016 - 18,349 18,349 - 66.3% 169,380 13.92
Columbus Village Barnes & Noble Virginia Beach, VA ✓ 100% 1980/2013 66,594 - 66,594 88.5% - 1,173,679 19.91
Columbus Village II Regal Cinemas, BB&B Virginia Beach, VA ✓ 100% 1995/1996 92,061 - 92,061 100.0% - 1,652,246 17.95
Commerce Street Retail (5) Yard House Virginia Beach, VA ✓ 100% 2008 19,173 - 19,173 100.0% - 862,176 44.97
Courthouse 7-Eleven 7-Eleven Virginia Beach, VA 100% 2011 3,177 - 3,177 100.0% - 139,311 43.85
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% - 1,751,738 16.98
Fountain Plaza Retail Ruth's Chris, Ann Taylor Virginia Beach, VA ✓ - 2004 35,961 - 35,961 100.0% - 1,014,132 28.20
Gainsborough Square Food Lion, Rite Aid Chesapeake, VA 100% 1999 88,862 - 88,862 92.5% - 1,243,905 15.14
Greentree Shopping Center Various Small Shops Chesapeake, VA 100% 2014 15,719 - 15,719 83.7% - 264,750 20.12
Hanbury Village(6) Harris Teeter, Walgreens Chesapeake, VA 32% 2006/2009 116,635 - 116,635 98.6% - 2,474,547 21.51
Harper Hill Commons (6) Harris Teeter Winston-Salem, NC 100% 2004 96,914 - 96,914 80.5% - 897,209 11.50
Harrisonburg Regal Regal Cinemas Harrisonburg, VA 100% 1999 49,000 - 49,000 100.0% - 683,550 13.95
Indian Lakes Harris Teeter, Wawa Virginia Beach, VA 100% 2008 71,020 - 71,020 95.4% - 1,072,561 15.83
Lightfoot Marketplace(6) Harris Teeter, CHKD Williamsburg, VA - 2016 - 116,043 116,043 - 79.0% 1,555,132 16.96
North Hampton Market PetSmart, Hobby Lobby Taylors, SC 100% 2004 114,935 - 114,935 99.0% - 1,445,899 12.71
North Point Center(6) Kroger, PetSmart, Home Depot, Costco Durham, NC 67% 1998/2009 496,246 - 496,246 99.7% - 3,747,254 7.57
Oakland Marketplace(6) Kroger Oakland, TN 100% 2004 64,600 - 64,600 97.8% - 456,780 7.23
Parkway Centre Publix Moultrie, GA 100% 2017 61,200 - 61,200 92.2% - 743,616 13.18
Parkway Marketplace Rite Aid Virginia Beach, VA 100% 1998 37,804 - 37,804 100.0% - 763,628 20.20
Patterson Place BB&B, PetSmart, DSW, AC Moore Durham, NC 100% 2004 160,942 - 160,942 96.1% - 2,434,084 15.73
Perry Hall Marketplace Safeway Perry Hall, MD 100% 2001 74,256 - 74,256 100.0% - 1,252,304 16.86
Providence Plaza Cranfil l , Sumner & Hartzog, Chipotle Charlotte, NC 100% 2007/2008 103,118 - 103,118 97.5% - 2,645,055 26.32
Renaissance Square Harris Teeter Davidson, NC 100% 2008 80,467 - 80,467 84.3% - 1,154,097 17.02
Sandbridge Commons (6) Harris Teeter Virginia Beach, VA - 2015 69,417 - 69,417 100.0% - 913,443 13.16
Socastee Commons Bi-Lo Myrtle Beach, SC - 2000/2014 57,273 - 57,273 100.0% - 657,312 11.48
South Retail lululemon, free people, CPK Virginia Beach, VA ✓ - 2002 38,515 - 38,515 100.0% - 954,156 24.77
South Square(6) Ross, Petco, Office Depot Durham, NC 100% 1977/2005 109,590 - 109,590 100.0% - 1,897,370 17.31
Southgate Square Burlington, PetSmart, Michaels Colonial Heights, VA - 1991/2016 220,131 - 220,131 92.1% - 2,773,889 13.69
Southshore Shops Buffalo Wild Wings Midlothian, VA 100% 2006 40,333 - 40,333 93.2% - 765,980 20.37
Stone House Square(6) Weis Markets Hagerstown, MD 100% 2008 112,274 - 112,274 90.7% - 1,752,315 17.21
Studi 56 Retail McCormick & Schmick's Virginia Beach, VA ✓ 100% 2007 11,594 - 11,594 100.0% - 418,009 36.05
Tyre Neck Harris Teeter(6)(10) Harris Teeter Portsmouth, VA 100% 2011 48,859 - 48,859 100.0% - 533,052 10.91
Waynesboro Commons Kroger Waynesboro, VA 100% 1993 52,415 - 52,415 100.0% - 433,546 8.27
Wendover Village BB&B, T.J. Maxx, Petco Greensboro, NC 100% 2004 171,653 - 171,653 100.0% - 3,101,318 18.07
Total / Weighted Avg Retail Portfolio 76% 3,629,788 134,392 3,764,180 96.7% 77.3% $55,092,282 $15.24
As of March 31, 2018
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)
Office Properties
4525 Main Street Clark Nexsen, Anthropologie, Mythics Virginia Beach, VA ✓ - 2014 237,893 - 237,893 93.1% - $6,229,535 $28.13
Armada Hoffler Tower(4)(5) AHH, Troutman Sanders, Will iams Mullen Virginia Beach, VA ✓ 100% 2002 324,242 - 324,242 93.6% - 8,824,034 29.07
One Columbus (5) BB&T, HBA Virginia Beach, VA ✓ 100% 1984 129,272 - 129,272 95.0% - 2,999,277 24.43
Two Columbus The Art Institute Virginia Beach, VA ✓ 100% 2009 108,448 - 108,448 82.5% - 2,372,732 26.53
Total / Weighted Average Office Portfolio 70% 799,855 - 799,855 92.2% - $20,425,577 $27.71
Units
Multifamily Location
Town
Center
Unencumbered
ABR Year Built
Core
Properties
Redevelopment
Properties Total
Core
Occupancy (2)
Redevelopment
Occupancy(2) ABR (7)
Monthly Rent per
Occupied Unit
Encore Apartments Virginia Beach, VA ✓ - 2014 286 - 286 95.1% - $4,214,196 $1,291.11
Johns Hopkins Village(8)(9) Baltimore, MD - 2016 157 - 157 98.8% - 6,651,169 987.99 (10)
Liberty Apartments (9) Newport News, VA - 2013 197 - 197 89.9% - 2,262,936 1,065.03
Smith's Landing(9) Blacksburg, VA - 2009 284 - 284 100.0% - 3,875,748 1,137.25
The Cosmopolitan(8)(11) Virginia Beach, VA ✓ - 2006 - 307 307 - 99.3% 5,652,177 1,544.31
Total / Weighted Avg Multifamily Portfolio - 924 307 1,231 96.1% 99.3% $22,656,226 $1,246.26
(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
March 31, 2018, 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 March 31, 2018, 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 March 31, 2018 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 March 31, 2018. 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 March 31, 2018, the Company occupied 41,103 square feet at these two properties at an ABR of $1.3M, or
$30.59 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 to the right:
(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 March 31, 2018 by (b) 12.
(8) The ABR for Liberty, Cosmopolitan, Johns Hopkins Village excludes $245K, $675K and $1.2M from ground floor
retail leases, respectively.
(9) The Company leases the land underlying this property pursuant to a ground lease.
(10) Monthly rent per occupied unit is calculated by dividing total base rental payments for the month ended March 31,
2018 by the number of occupied beds.
(11) Excludes 35 units offline for redevelopment.
Property Portfolio - Continued
Properties Subject to Ground Lease
Number of
Ground Leases
Square Footage
Leased Pursuant to
Ground Leases ABR
Bermuda Crossroads 2 11,000 $170,610
Broad Creek Shopping Center 6 23,825 632,401
Hanbury Village 2 55,586 1,082,118
Harper Hill Commons 1 41,520 373,680
Indian Lakes 2 56,358 828,335
Lightfoot Marketplace 1 51,750 543,375
North Point Center 4 280,556 1,130,718
Oakland Marketplace 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 48,859 533,052
Total / Weighted Avg 23 673,170 $6,288,590
As of March 31, 2018
18Development Pipeline
$ in thousands
Premier Summit Place One City Center
(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
Schedule(1)
Development, Not Delivered
Property
Type Estimated(1) % Leased
Construction
Start
Initial
Occupancy
Stabilized
Operation(2)
Estimated
Cost(1)
Construction Loan
Commitment
Cost to
Date
AHH
Ownership %
Summit Place (Meeting Street)
Charleston, SC
Multifamily 114 units NA 3Q17 3Q19 3Q19 $53,000 $34,750 $18,000 90%
Hoffler Place (King Street)
Charleston, SC
Multifamily 74 units NA 3Q17 3Q19 3Q19 48,000 31,750 17,000 93%
Greenside (Harding Place)
Charlotte, NC
Multifamily 225 Units NA 3Q16 3Q18 1Q20 47,000 29,750 36,000 80%(3)
Premier (Town Center Phase VI)
Virginia Beach, VA
Mixed-use 39,000 SF
131 Units
47% 4Q16 3Q18 3Q19 43,000 27,933 31,000 100%
Market at Mill Creek
Mt. Pleasant, SC
Retail 73,000 SF 80% 1Q18 1Q19 1Q19 23,000 - 5,000 70%(3)
Brooks Crossing
Newport News, VA
Office 100,000 sf 100% 1Q18 1Q19 2Q19 22,000 - 3,000 65%(3)
Lightfoot Outparcel
Will iamsburg, VA
Retail NA 90% 1Q18 1Q19 1Q19 4,000 - 1,000 70%(3)
Total Development, Not Delivered $240,000 $124,183 $111,000
Development, Delivered Not Stabilized
Brooks Crossing
Newport News, VA
Retail 18,000 sf 66% 3Q15 3Q16 4Q18 3,000 - 3,000 65%(3)
Lightfoot Marketplace
Will iamsburg, VA
Retail 109,000 sf 79% 3Q14 3Q16 3Q18 25,000 10,500 22,000 70%(3)
Total Development, Delivered Not Stabilized 28,000 10,500 25,000
Total $268,000 $134,683 $136,000
Joint Ventures - Minority Partner Project Cost
Construction Loan
Commitment
Equity
Investment
One City Center - 37% JV
Durham, NC
Office 153,000 sf 81% 1Q16 3Q18 4Q18 $44,000 $25,250 $13,000 100%
Q1 2018
Capitalized Interest $791
Capitalized Overhead $726
19Redevelopment and Mezzanine Investments
$ in thousands
1405 Point The Residences at
Annapolis Junction
North Decatur Square
(1) Represents estimates that may change as the development process proceeds
(2) Transactions may occur resulting in the satisfaction of Note prior to maturity
Schedule(1)
Redevelopment
Property
Type
Units Out of
Service % Leased
Construction
Start
Anticipated
Completion
Same-Store
Sales
Estimated
Cost(1)
Cost to
Date
The Cosmopolitan
Virginia Beach, VA
Multifamily 35 units 99% 1Q18 4Q19 1Q21 $7,500 $0
Mezzanine Investments
Property
Type Estimated(1) % Leased
Initial
Occupancy Loan Maturity (2) Interest Rate
Option to
Purchase
Loan
Balance
Mezzanine
Interest QTD
1405 Point (Point Street Apartments)
Baltimore, MD
Multifamily 289 units 39% 1Q18 3Q21 8% $98,000 $23,000 $486
The Residences at Annapolis Junction
Annapolis Junction, MD
Multifamily 416 units 44% 3Q17 2Q20 10% 106,000 44,000 1,100
North Decatur Square (Whole Foods)
Decatur, GA
Retail 86,000 sf 93% 1Q19 2Q22 15% - 15,000 460
Delray Plaza (Whole Foods)
Delray Beach, FL
Retail 83,000 sf 79% 3Q19 4Q20 15% - 6,000 222
Total Mezzanine Investment $204,000 $88,000 $2,268
20Acquisitions & Dispositions
$ in thousands
(1) Contractual purchase price
(2) Value of OP Units/Stock at issuance
(3) Anchor tenant vacated 12/31/16, 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
Parkway Centre Moultrie, GA 61,200 $11,200 - $1,624 6.4% 1Q18 Publix
Indian Lakes Virginia Beach, VA 71,020 14,700 - - 7.1% 1Q18 Harris Teeter, Wawa
Wendover Village Outparcel Greensboro, NC 35,895 14,300 $7,900 - 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 2,199,341 $416,772 $127,700 $75,626 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%
21Construction Business Summary
$ in thousands
Gross Profit Summary
Q1 2018
Trailing 12
Months
Revenue $23,050 $153,565
Expense (22,414) (147,808)
Gross Profit $636 $5,757
(Unaudited)
Location
Total Contract
Value
Work in Place as
of 3/31/2018 Backlog
Estimated Date
of Completion
Highlighted Projects
One City Center Durham, NC $65,422 $53,912 $11,510 3Q 2018
Dinwiddie Municipal Complex Dinwiddie, VA 23,904 14,002 9,902 2Q 2019
Sub Total $89,326 $67,914 $21,412
All Other Projects $527,764 $518,443 $9,321
Total $617,090 $586,357 $30,733
22
(1) See page 32 for Same Store vs. Non – Same Store Properties
(2) Excludes expenses associated with the Company’s in house asset management division of $820K
for the 3 months ended 3/31/18 and $770K for the 3 months ended 3/31/17.
Same Store NOI by Segment
$ in thousands
(Reconciliation to GAAP located in appendix pg. 35)
Three months ended
3/31/2018 3/31/2017 $ Change % Change
Office(1) (Unaudited)
Revenue $3,454 $3,514 ($60) -1.7%
Expenses (2) 1,345 1,232 113 9.2%
Net Operating Income 2,109 2,282 (173) -7.6%
Retail(1)
Revenue 15,424 15,222 202 1.3%
Expenses (2) 3,807 3,579 228 6.4%
Net Operating Income 11,617 11,643 (26) -0.2%
Multifamily(1)
Revenue 2,854 2,837 17 0.6%
Expenses (2) 1,157 1,151 6 0.5%
Net Operating Income 1,697 1,686 11 0.7%
Same Store Net Operating Income (NOI) $15,423 $15,611 ($188) -1.2%
Net effect of straight-line rents 114 27 87
Amortization of lease incentives and above (below) market rents (105) (107) 2
Same store portfolio NOI, cash basis $15,432 $15,531 ($99) -0.6%
NOI, Cash Basis:
Office $2,175 $2,506 ($331) -13.2%
Retail 11,548 11,327 221 2.0%
Multifamily 1,708 1,697 11 0.6%
$15,431 $15,530 ($99) -0.6%
NOI:
Office $2,109 $2,282 ($173) -7.6%
Retail 11,617 11,643 (26) -0.2%
Multifamily 1,697 1,686 11 0.7%
$15,423 $15,611 ($188) -1.2%
23Top 10 Tenants by Annualized Base Rent
$ in thousands
As of March 31, 2018
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 12.4% 2.6%
Hampton University 2 2023 - 2024 1,054 5.2% 1.1%
Mythics 1 2030 1,052 5.2% 1.1%
Pender & Coward 1 2030 882 4.3% 0.9%
Kimley-Horn 1 2027 859 4.2% 0.9%
Troutman Sanders 2 2025 855 4.2% 0.9%
The Art Institute 3 2019 852 4.2% 0.9%
City of Va Beach Development Authority 1 2024 722 3.5% 0.7%
Cherry Bekaert 1 2022 708 3.5% 0.7%
Williams Mullen 1 2028 655 3.2% 0.7%
Top 10 Total $ 10,175 49.9% 10.5%
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 12 2018 - 2036 $ 6,423 11.7% 6.5%
Home Depot 2 2019 - 2023 2,236 4.1% 2.3%
Regal Cinemas 2 2019 - 2022 1,679 3.0% 1.7%
Bed, Bath, & Beyond 4 2020 - 2024 1,677 3.0% 1.7%
PetSmart 5 2020 - 2022 1,438 2.6% 1.5%
Food Lion 3 2019 - 2022 1,291 2.3% 1.3%
Dick's Sporting Goods 1 2020 840 1.5% 0.9%
Safeway 2 2021 821 1.5% 0.8%
Weis Markets 1 2028 802 1.5% 0.8%
Ross Dress for Less 2 2020 - 2022 762 1.4% 0.8%
Top 10 Total $ 17,969 32.6% 18.3%
24Office 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
Q1 2018 1 1,400 - - 27.22$ 23.99$ 13.5% 27.24$ 26.45$ 3.0% 3.00 2,428$ 1.73$
Q4 2017 6 38,387 2 2,582 24.87 23.93 3.9% 24.38 25.88 -5.8% 4.90 617,475 16.09
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
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
Q1 2018 3 17,668 23.59$ 8.28 930,376$ 52.66$
Q4 2017 2 7,676 24.86 4.60 278,339 36.26
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
25Office Lease Expirations
(1) Includes new leases from properties in development
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
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 - 62,720 7.8% -$ - -$
M-T-M 3 633 0.1% 20,400 0.1% 32.23
2018 10 39,734 5.0% 1,256,716 6.2% 31.63
2019 14 83,018 10.4% 2,107,955 10.3% 25.39
2020 7 26,537 3.3% 743,109 3.6% 28.00
2021 8 46,798 5.9% 1,301,888 6.4% 27.82
2022 10 75,200 9.4% 2,096,512 10.3% 27.88
2023 9 72,805 9.1% 1,874,882 9.2% 25.75
2024 4 70,617 8.8% 2,070,299 10.1% 29.32
2025 6 66,487 8.3% 1,836,317 9.0% 27.62
2026 3 15,140 1.9% 329,509 1.6% 21.76
2027 3 49,081 6.1% 1,398,926 6.8% 28.50
2028 2 34,945 4.4% 919,342 4.5% 26.31
Thereafter 3 156,140 19.5% 4,469,722 21.9% 28.63
Total / Weighted Average 82 799,855 100.0% 20,425,577$ 100.0% 27.71$
As of March 31, 2018
Square Feet Under Lease % of Portfolio ABR
2,500 or less 3.0%
2,501-10,000 20.7%
10,001-20,000 30.4%
20,001-40,000 33.4%
40,001-100,000 12.5%
Office Portfolio Total 100.0%
26Retail 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
Q1 2018 19 61,029 3 9,700 21.14$ 19.65$ 7.6% 20.47$ 19.88$ 3.0% 6.33 433,976$ 7.11$
Q4 2017 16 109,639 13 35,575 13.88 13.31 4.3% 13.70 13.63 0.5% 3.81 64,673 0.59
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
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
Q1 2018 5 14,196 15.57$ 5.10 223,542$ 15.75$
Q4 2017 4 12,533 17.02 8.33 181,649 14.49
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
27Retail 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 - 148,735 4.0% -$ - -$
M-T-M 3 2,728 0.1% 49,190 0.1% 18.03
2018 44 141,597 3.8% 2,463,125 4.5% 17.40
2019 86 576,504 15.3% 9,091,761 16.5% 15.77
2020 76 581,371 15.4% 8,135,904 14.8% 13.99
2021 62 293,348 7.8% 5,306,908 9.6% 18.09
2022 55 415,682 11.0% 6,781,045 12.3% 16.31
2023 40 380,812 10.1% 5,282,494 9.6% 13.87
2024 20 181,126 4.8% 2,877,184 5.2% 15.88
2025 18 229,957 6.1% 2,462,076 4.5% 10.71
2026 19 166,665 4.4% 2,887,074 5.2% 17.32
2027 17 117,733 3.1% 2,656,495 4.8% 22.56
2028 13 233,722 6.2% 2,967,989 5.4% 12.70
Thereafter 13 294,200 7.9% 4,131,037 7.5% 14.04
Total / Weighted Average 466 3,764,180 100.0% 55,092,282$ 100.0% 15.24$
Square Feet Under Lease % of Portfolio ABR
2,500 or less 13.0%
2,501-10,000 28.3%
10,001-20,000 15.1%
20,001-40,000 15.4%
40,001-100,000 23.3%
Greater than 100,000 4.9%
Retail Portfolio Total 100.0%
As of March 31, 2018
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
-
100,000
200,000
300,000
400,000
500,000
600,000
700,000
Leased Square Feet % ABR of Retail Portfolio
28
Appendix
Definitions & Reconciliations
29Definitions
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.
30Definitions
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.
31Definitions
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.
Additionally, any property that is fully or partially taken out of service for the purpose of redevelopment is no longer
considered stabilized until the redevelopment activities are complete and the assets are placed back into service. The
following table shows the properties included in the same store and non-same store portfolio for the comparative
periods presented.
32Same Store vs. Non-Same Store Properties
Same
Store
Non-Same
Store
Same
Store
Non-Same
Store
Retail Properties Retail Properties (Continued)
249 Central Park Retail X Providence Plaza X
Alexander Pointe X Renaissance Square X
Bermuda Crossroads X Sandbridge Commons X
Broad Creek Shopping Center X Socastee Commons X
Brooks Crossing (Retail) X South Retail X
Broadmoor Plaza X South Square X
Columbus Village X Southgate Square X
Columbus Village II X Southshore Shops X
Commerce Street Retail X Stone House Square X
Courthouse 7-Eleven X Studio 56 Retail X
Dick’s at Town Center X Tyre Neck Harris Teeter X
Dimmock Square X Waynesboro Commons X
Greentree Shopping Center X Wendover Village X
Fountain Plaza Retail X Wendover Village Outparcel X
Gainsborough Square X Office Properties
Hanbury Village X 4525 Main Street X
Harper Hill Commons X Armada Hoffler Tower X
Harrisonburg Regal X Commonwealth of VA - Chesapeake X
Indian Lakes X Commonwealth of VA - Virginia Beach X
Lightfoot Marketplace X One Columbus X
North Hampton Market X Two Columbus X
North Point Center X Multifamily Properties
Oakland Marketplace X Encore Apartments X
Parkway Centre X Liberty Apartments X
Parkway Marketplace X Smith’s Landing X
Patterson Place X The Cosmopolitan X
Perry Hall Marketplace X Johns Hopkins Village X
Three Months Ended
3/31/2018 to 2017
Three Months Ended
3/31/2018 to 2017
33Reconciliation to Property Portfolio NOI
$ in thousands
(1) See page 32 for the Same Store vs. Non-Same Store properties
(2) Includes expenses associated with the companies in house asset management division.
Three months ended 3/31
2018 2017
Office Same Store(1)
Rental revenues $3,454 $3,514
Property expenses 1,345 1,232
NOI 2,109 2,282
Non-Same Store NOI (2) 1,043 849
Segment NOI $3,152 $3,131
Retail Same Store(1)
Rental revenues $15,424 $15,222
Property expenses 3,807 3,579
NOI 11,617 11,643
Non-Same Store NOI (2) 754 18
Segment NOI $12,371 $11,661
Multifamily Same Store(1)
Rental revenues $2,854 $2,837
Property expenses 1,157 1,151
NOI 1,697 1,686
Non-Same Store NOI (2) 2,242 2,177
Segment NOI $3,939 $3,863
Total Property Portfolio NOI $19,462 $18,655
34Reconciliation to Property Portfolio NOI
$ in thousands
Three months ended 3/31/2018
Diversified Portfolio Office Retail Multifamily Total
NOI - Cash Basis $0 $9,831 $2,274 $12,105
Net effect of straight-line rents - 3 78 81
Amortization of lease incentives and (above) below market rents - 177 - 177
NOI $0 $10,011 $2,352 $12,363
Town Center of Virginia Beach Office Retail Multifamily Total
NOI - Cash Basis $3,065 $2,171 $1,584 $6,820
Net effect of straight-line rents 381 (59) 3 325
Amortization of lease incentives and (above) below market rents (70) (50) - (120)
El minati n of AHH rent (224) (98) - (322)
NOI $3,152 $1,964 $1,587 $6,703
NOI Office Retail Multifamily Total
Diversified Portfolio $0 $10,011 $2,352 $12,363
Town Center of Virginia Beach 3,152 1,964 1,587 6,703
Unstabilized Properties - 396 - 396
Total Property Portfolio NOI $3,152 $12,371 $3,939 $19,462
35Reconciliation to GAAP Net Income
$ in thousands
Office Retail Multifamily
Total Rental
Properties
General Contracting &
Real Estate Services Total
Segment revenues 5,100$ 16,711$ 6,888$ 28,699$ 23,050$ 51,749$
Segment expenses 1,948 4,340 2,949 9,237 22,414 31,651
Net operating income 3,152$ 12,371$ 3,939$ 19,462$ 636$ 20,098$
Depreciation and amortization (9,278)
General and administrative expenses (2,961)
Acquisition, development and other pursuit costs (84)
Interest income 2,232
Interest expense (4,373)
Change in fair value of interest rate derivatives 969
Other income (loss) benefit 114
Income tax benefit (provision) 266
Net income 6,983$
Three months ended 3/31/2018