Core Insights - Armada Hoffler has appointed Jennifer Boykin to its Board of Directors, bringing extensive leadership experience and strategic vision to the company [1][2] - Boykin's leadership at Newport News Shipbuilding included a significant digital transformation and the first 2-ship aircraft carrier contract in 30 years [1][2] - Boykin has a strong background in enhancing business performance through leadership development and continuous improvement [2] Company Overview - Armada Hoffler is a vertically integrated, self-managed real estate investment trust (REIT) with over 40 years of experience in developing, building, acquiring, and managing high-quality office, retail, and multifamily properties primarily in the Mid-Atlantic and Southeastern United States [5] - The company also provides general construction and development services to third-party clients [5] Leadership and Achievements - Boykin has held various leadership roles, including construction manager for the USS John C. Stennis and USS Harry S. Truman aircraft carriers, and has served as Vice President of Engineering and Quality Assurance [2] - She is a recognized advocate for STEM education and has served on several influential boards, contributing to workforce development [3] - Boykin holds a B.S. in marine engineering and an M.S. in engineering management, receiving multiple accolades for her contributions to the industry [4]

Core Insights - Armada Hoffler has appointed Jennifer Boykin to its Board of Directors, enhancing the board's strategic vision and leadership capabilities [1][2] Company Overview - Armada Hoffler is a vertically integrated, self-managed real estate investment trust (REIT) with over 40 years of experience in developing, building, acquiring, and managing high-quality office, retail, and multifamily properties primarily in the Mid-Atlantic and Southeastern United States [6] Leadership Experience - Jennifer Boykin has extensive leadership experience, having served as Executive Vice President of Huntington Ingalls Industries and President of Newport News Shipbuilding, where she led significant digital transformations and major contracts [2][3] - Boykin has a history of driving business performance through leadership development and continuous improvement, including her role as construction manager for aircraft carriers [3] Advocacy and Education - Boykin is a recognized advocate for STEM education and workforce development, serving on several influential boards, including the Virginia Business Council and the Commonwealth of Virginia's Growth and Opportunity Board [4] Educational Background and Accolades - Boykin holds a B.S. in marine engineering and an M.S. in engineering management, and has received multiple accolades, including the 2021 Kings Pointer of the Year [5]

Financial Performance - Net income attributable to common stockholders and OP Unitholders for the year ended December 31, 2024, was $30.9 million, or $0.33 per diluted share[26]. - Funds from operations (FFO) for the same period was $99.8 million, or $1.08 per diluted share, while normalized FFO was $118.9 million, or $1.29 per diluted share[26]. - Dividends declared during the year were $0.82 per share, reflecting a 5.8% year-over-year increase[26]. - Same Store net operating income (NOI) increased by 1.9% on a GAAP basis compared to the year ended December 31, 2023[26]. - Property segment NOI for the year ended December 31, 2024, was $171.0 million, representing a 6.8% increase from $160.1 million in 2023[26]. Occupancy and Leasing - Weighted average stabilized portfolio occupancy as of December 31, 2024, was 96.0%, with retail occupancy at 95.3%, office occupancy at 97.2%, and multifamily occupancy at 95.3%[26]. - Executed 93 lease renewals and 44 new leases during the year for a total of 952,019 net rentable square feet[26]. - The total net rentable square footage for retail and office properties is 3,824,446 square feet with an overall occupancy rate of 95.3%[33]. - The total net rentable square footage for office properties is 2,335,063 square feet with an occupancy rate of 97.2%[34]. - The multifamily segment has a total of 2,492 units with an occupancy rate of 95.3% and an average quarterly rent (AQR) of $2,015.30[34]. Property Dispositions and Acquisitions - The company completed the disposition of the Market at Mill Creek and Nexton Square retail properties for gross proceeds of $82.0 million, resulting in a net gain of $21.3 million[28]. - The company anticipates completing the sale of a property classified as held-for-sale for $4.8 million in 2025[76]. - The company has entered into tax protection agreements that may limit its ability to sell certain properties, potentially impacting strategic decisions[170]. Development and Construction - The company has a development pipeline including Southern Post Retail (42,000 sf) and Southern Post Office (95,000 sf), both expected to stabilize in 2026[49]. - The T. Rowe Price Global HQ project has an estimated project cost of $277.9 million, with a current equity commitment of $52.9 million[57]. - The company faces significant risks related to maintaining safe construction project sites, which could adversely affect financial condition and profitability[187]. Debt and Financial Risks - As of December 31, 2024, the total debt of the company was approximately $1.3 billion, which may expose the company to risks of default under its debt obligations[111]. - Rising interest rates could increase interest expenses and adversely affect cash flow and the ability to service debt obligations[116]. - The company may incur significant losses related to real estate financing investments, which could materially affect its financial condition and results of operations[132]. Market and Economic Conditions - Economic downturns could lead to increased tenant bankruptcies and defaults, resulting in higher vacancy rates and negatively impacting cash flow[104]. - The company may face challenges in renewing leases or leasing vacant space, which could adversely affect its financial condition and cash flow[122]. - The consumer price index rose by approximately 3% in 2024, following a similar increase in 2023, indicating inflationary pressures on operating expenses[136]. Environmental and Regulatory Risks - Environmental liabilities could significantly impact the company's financial condition, including potential costs for remediation of hazardous substances and compliance with environmental laws[83]. - The company is subject to ongoing assessments for compliance with the Americans With Disabilities Act (ADA), which may result in additional costs for necessary modifications[82]. - The presence of hazardous materials in properties could lead to significant remediation costs and liability for adverse health effects[172]. Corporate Governance and Ownership - As of December 31, 2024, Daniel Hoffler and affiliates owned approximately 9.6% of the outstanding shares, allowing them to influence corporate decisions[192]. - The company has provisions in its charter that restrict stock ownership to prevent hostile takeovers, limiting ownership to 9.8%[197]. - The board of directors has the authority to increase the number of authorized shares without stockholder approval, which could affect control dynamics[198]. Employee and Operational Considerations - The company has 148 employees as of December 31, 2024, and is committed to providing a safe and inclusive work environment[95]. - The company invests heavily in employee development through training programs and a comprehensive total rewards program, which includes market-competitive pay and healthcare benefits[96]. - The company may face challenges in integrating new acquisitions or developed properties into existing operations, which could affect its overall performance[132]. Cybersecurity and Technology Risks - Cybersecurity incidents could negatively impact the company's business operations and reputation, given its reliance on technology for sensitive information[146]. - The company has experienced cybersecurity incidents in the past but has not faced any material incidents, although future incidents are expected to continue[148]. Tax and REIT Compliance - The company must ensure that at least 75% of its assets consist of cash, government securities, and qualified real estate assets to maintain REIT status[215]. - Failure to maintain REIT qualification could lead to significant tax consequences, reducing funds available for distribution to stockholders[212]. - Changes to U.S. federal income tax laws could adversely impact the company's business and financial results[217].

Core Insights - The initial analysis of Armada Hoffler Properties, Inc. (AHH) highlighted its attractive valuation and strong underlying business performance, with a dividend yield of approximately 7% at that time [1] Group 1: Company Overview - Armada Hoffler Properties, Inc. is recognized for its low valuation multiples and solid operational performance, making it an appealing investment opportunity [1] Group 2: Analyst Background - Roberts Berzins, with over a decade of experience in financial management, has contributed to shaping financial strategies for top-tier corporates and has worked on institutionalizing the REIT framework in Latvia [1] - His efforts include developing national SOE financing guidelines and frameworks to channel private capital into affordable housing [1]

Financial Data and Key Metrics Changes - The company reported a normalized FFO of $0.27 per diluted share and an FFO of $0.29 per diluted share for Q4 2024, with a full-year FFO of $1.02 and normalized FFO of $1.29 per diluted share [10][37] - The overall portfolio occupancy at the end of Q4 stood at 96%, slightly increasing compared to the prior quarter [42] - The company provided a normalized FFO guidance range of $1 to $1.10 per diluted share for 2025, reflecting challenges such as construction delivery delays and increased interest expenses [46] Business Line Data and Key Metrics Changes - The retail segment achieved an 11.1% GAAP spread, while the office segment achieved an 18.7% GAAP spread, with all three segments posting positive releasing spreads [39] - The multi-family portfolio reported a combined trade-out spread of negative 0.8% for Q4, but year-to-date stabilized trade-outs have shown improvements with a combined trade-out of positive 0.6% [40] - The construction management segment posted $2.1 million of gross profit, with expectations for this segment's performance to return closer to historical levels in the short term [42] Market Data and Key Metrics Changes - The office assets in mixed-use environments are commanding around a 15% premium above competing central business districts in the region [22] - The retail portfolio had a strong performance with 95% occupancy, executing new leases covering approximately 195,000 square feet [27] - The multi-family portfolio continues to operate well at 95.3% occupancy, with rent growth in markets such as Baltimore and Virginia Beach [33] Company Strategy and Development Direction - The company remains committed to improving income streams and balance sheet quality, focusing on sustainable growth while maintaining financial strength [9] - The strategy includes recycling stabilized assets where value has been maximized and capitalizing on better long-term opportunities [14] - The company is focused on strengthening its balance sheet by reducing leverage and enhancing financial flexibility [18] Management's Comments on Operating Environment and Future Outlook - Management expects 2025 to be the trough year for earnings, with anticipated growth in 2026 and beyond as developments stabilize [90] - The company is committed to refining its business model and pursuing redevelopment opportunities that add significant value [35] - Management acknowledges challenges in the current cost of capital but remains confident in the long-term value of the portfolio [44] Other Important Information - The company disposed of two non-core retail assets at a blended cap rate in the low 6% range, achieving an aggregate sales price of $82 million, representing more than a 20% profit spread over cost [15] - The T. Rowe Price global headquarters is nearing completion, expected to bring 2,500 employees to the community [16] Q&A Session Summary Question: What does the market look like going forward on the Mez side? - Management is receiving inquiries about financing deals and is monitoring the lending market closely, but is not prepared to execute new investments at this time [52][54] Question: Can you comment on the dilution from recent equity raises and asset sales? - The equity raise in September resulted in roughly 5 cents worth of dilution per share after debt repayment [62][65] Question: How is the releasing process going for Southgate First with declining occupancy? - Management is actively negotiating with potential backfill tenants for closed stores and anticipates positive releasing activity [73][75] Question: Are there any active properties being marketed for capital recycling? - Management has received unsolicited interest in retail properties and is evaluating potential disposals based on quality and strategic alignment [80][84] Question: Can you provide details on the trajectory of FFO throughout 2025? - Management expects 2025 to be the trough year, with growth anticipated in 2026 as developments stabilize and operational efficiencies improve [90][92]

FINANCIAL PACKAGE SUPPLEMENTAL CORPORATE PROFILE Armada Hoffler (NYSE: AHH) is a vertically integrated, self-managed real estate investment trust ("REIT") with over four decades of experience developing, building, acquiring, and managing high-quality retail, office, and multifamily properties located primarily in the Mid-Atlantic and Southeastern United States. The Company also provides general construction and development services to third-party clients, in addition to developing and building properties to ...

Financial Performance - Armada Hoffler Properties reported quarterly funds from operations (FFO) of $0.27 per share, matching the Zacks Consensus Estimate, but down from $0.31 per share a year ago [1] - The company posted revenues of $62.95 million for the quarter ended December 2024, missing the Zacks Consensus Estimate by 2.67%, compared to $59.84 million in the same quarter last year [2] - Over the last four quarters, Armada Hoffler Properties has surpassed consensus FFO estimates three times and topped consensus revenue estimates three times [2][1] Stock Performance and Outlook - Armada Hoffler Properties shares have declined approximately 8.4% since the beginning of the year, while the S&P 500 has gained 4.2% [3] - The company's FFO outlook is crucial for assessing future stock performance, with current consensus FFO estimates at $0.24 for the coming quarter and $1.09 for the current fiscal year [4][7] - The estimate revisions trend for Armada Hoffler Properties is currently unfavorable, resulting in a Zacks Rank 4 (Sell), indicating expected underperformance in the near future [6] Industry Context - The REIT and Equity Trust - Residential industry, to which Armada Hoffler Properties belongs, is currently in the bottom 32% of over 250 Zacks industries, suggesting potential challenges ahead [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in estimate revisions, which could impact investor sentiment [5]

Core Insights - Armada Hoffler Properties, Inc. reported a GAAP net income of $26.1 million, or $0.26 per diluted share, for the fourth quarter of 2024, a significant recovery from a net loss of $23.9 million, or $0.27 per diluted share, in the same quarter of 2023 [3][4][30] - The company achieved a normalized FFO of $27.8 million, or $0.27 per diluted share, for the fourth quarter, slightly down from $27.9 million, or $0.31 per diluted share, in the prior year [5][30] - For the full year 2024, net income attributable to common stockholders was $30.9 million compared to a net loss of $4.5 million in 2023, while FFO increased to $99.8 million from $90.7 million [6][30] Financial Performance - The company reported a total revenue of $142.6 million for the fourth quarter, compared to $191.0 million in the same period of 2023, with rental revenues increasing to $62.9 million from $59.8 million [28] - The office same-store NOI grew by 12.3% on a GAAP basis compared to the fourth quarter of 2023, indicating strong performance in the office segment [3][7] - Positive renewal spreads were noted across all segments, with retail at 11.1% (GAAP), office at 18.7% (GAAP), and multifamily at 4.7% (GAAP) [3][7] Leasing and Occupancy - The company executed 21 lease renewals and 23 new leases during the fourth quarter, totaling approximately 315,000 net rentable square feet [3][7] - As of December 31, 2024, the weighted average stabilized portfolio occupancy was 96.0%, with retail occupancy at 95.3%, office at 97.2%, and multifamily at 95.3% [3][7] Guidance and Outlook - Armada Hoffler introduced its 2025 full-year normalized FFO guidance range of $1.00 to $1.10 per diluted share [10][11] - The company anticipates portfolio NOI for 2025 to be between $171.2 million and $175.8 million, with construction segment gross profit expected to range from $6.8 million to $8.6 million [11][10] Management and Strategic Direction - The company is focused on improving income streams and balance sheet quality, with a strategy aimed at sustainable growth while maintaining financial strength [3][4] - A succession plan was executed with Shawn Tibbetts appointed as CEO effective January 1, 2025, following Louis S. Haddad's resignation [8]

Financial Performance - GAAP net income for Q4 2024 was $26.1 million, or $0.26 per diluted share, compared to a net loss of $23.9 million, or $0.27 per diluted share in Q4 2023[4]. - Net income attributable to common stockholders for the three months ended December 31, 2024, was $26,140,000, compared to a loss of $23,938,000 in the same period of 2023[30]. - Net income for Q4 2024 was $29,036, compared to a net loss of $21,062 in Q4 2023, marking a significant turnaround[34]. - Normalized FFO for Q4 2024 was $27.8 million, or $0.27 per diluted share, slightly down from $27.9 million, or $0.31 per diluted share in Q4 2023[6]. - Normalized FFO for the year ended December 31, 2024, was $118,893,000, an increase from $110,467,000 in 2023, reflecting a growth of about 7.3%[32]. - Operating income for the year ended December 31, 2024, was $106,543,000, compared to $73,587,000 in 2023, indicating an increase of about 44.8%[30]. - Cash and cash equivalents increased significantly to $70,642,000 as of December 31, 2024, compared to $27,920,000 in 2023, marking a growth of approximately 153%[27]. - Total revenues for the year ended December 31, 2024, increased to $708,470,000, up from $667,158,000 in 2023, representing a growth of approximately 6.2%[29]. Debt and Assets - Total debt outstanding as of December 31, 2024, was $1,297.5 million, with 94% fixed or economically hedged[11]. - Indebtedness, net, decreased to $1,295,559,000 in 2024 from $1,396,965,000 in 2023, representing a reduction of approximately 7.2%[27]. - Total assets decreased to $2,512,863,000 as of December 31, 2024, from $2,562,898,000 in 2023, indicating a decline of about 2%[28]. Revenue and NOI Growth - Rental revenues for the year ended December 31, 2024, were $256,697,000, up from $238,924,000 in 2023, reflecting an increase of about 7.4%[29]. - General contracting and real estate services revenues for the year ended December 31, 2024, rose to $433,177,000, compared to $413,131,000 in 2023, a growth of approximately 4.9%[29]. - Office same store NOI growth was 12.3% on a GAAP basis compared to Q4 2023[7]. - Total Property NOI for the year ended December 31, 2024, was $170,979, an increase of 6.0% compared to $160,063 in 2023[34]. - Retail Same Store NOI on a cash basis for Q4 2024 was $16,344, up 1.8% from $16,050 in Q4 2023[34]. - Office Same Store NOI for Q4 2024 was $13,896, reflecting a 12.3% increase from $12,369 in Q4 2023[34]. - Multifamily Same Store NOI for the year ended December 31, 2024, was $31,355, a decrease of 1.6% from $31,864 in 2023[34]. Leasing and Dispositions - The company executed 21 lease renewals and 23 new leases, totaling approximately 315,000 net rentable square feet in Q4 2024[4]. - The company completed the disposition of retail properties for gross proceeds of $82.0 million, resulting in a net gain of $21.3 million[7]. - The company reported a gain on real estate dispositions of $21,305,000 for the year ended December 31, 2024, compared to a gain of $738,000 in 2023[30]. - Positive retail renewal spreads were 11.1% (GAAP) and 2.9% (Cash), while office renewal spreads were 18.7% (GAAP) and 3.5% (Cash)[4]. Guidance and Future Outlook - The company introduced 2025 full-year Normalized FFO guidance in the range of $1.00 to $1.10 per diluted share[12]. - The company reported a construction backlog of $123.8 million as of December 31, 2024[9]. Interest Income and Expense - Interest income from real estate financing investments was $4.0 million for Q4 2024[10]. - Interest income for the year increased to $2,519, compared to $927 in 2023[34]. - Interest expense for the year was $72,377, an increase from $54,144 in 2023[34]. - General contracting and real estate services gross profit for the year was $13,875, up from $13,418 in 2023[34].

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