TABLE OF CONTENTS 2 03 Forward Looking Statements 04 Corporate Profile 05 Highlights 06 Summary Information 07 Net Asset Value Component Data 08 Summary Balance Sheet 09 Summary Income Statement 10 FFO, Normalized FFO & Adjusted FFO 11 Outstanding Debt 12 Debt Information 13 Core Debt to Core EBITDA 14 Capitalization & Financial Ratios 15 Property Portfolio 17 Development & Redevelopment Pipeline 18 Mezzanine Investments 19 Acquisitions & Dispositions 20 Construction Business Summary 21 Same Store NOI by Segment 22 Top 10 Tenants by Annualized Base Rent 23 Lease Summary 24 Office Lease Expirations 25 Retail Lease Expirations 26 Appendix – Definitions & Reconciliations 30 Same Store vs Non-Same Store Properties 31 Reconciliation to Property Portfolio NOI 33 Reconciliation to GAAP Net Income 1405 Point Baltimore, MD
3 FORWARD - LOOKING STATEMENTS This Supplemental Financial Package should be read in conjunction with the unaudited condensed consolidated financial statements appearing in our press release dated April 30, 2020, which has been furnished as Exhibit 99.1 to our Form 8-K filed on April 30, 2020. 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”)). These forward-looking statements may include comments relating to the current and future performance of the Company’s operating property portfolio, the Company’s development pipeline, the Company’s construction and development business, including backlog and timing of deliveries and estimated costs, financing activities, and the Company’s financial outlook and expectations. For a description of factors that may cause the Company’s actual results or performance to differ from its forward- looking statements, please review the information under the heading “Risk Factors” included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 and the other documents filed by the Company with the Securities and Exchange Commission from time to time, including the Company’s Current Report on Form 8-K filed with the SEC on April 2, 2020. The Company’s actual future results and trends may differ materially from expectations depending on a variety of factors discussed in the Company’s filings with the Securities and Exchange Commission (the “SEC”). These factors include, without limitation: (a) the impact of the coronavirus (COVID-19) pandemic on macroeconomic conditions and economic conditions in the markets in which the Company operates, including, among others: (i) disruptions in, or a lack of access to, the capital markets or disruptions in the Company’s ability to borrow amounts subject to existing construction loan commitments; (ii) adverse impacts to the Company’s tenants’ and other third parties’ businesses and financial condition that adversely affect the ability and willingness of the Company’s tenants and other third parties to satisfy their rent and other obligations to the Company, including deferred rent; (iii) the ability and willingness of the Company’s tenants to renew their leases with the Company upon expiration of the leases or to re-lease the Company’s properties on the same or better terms in the event of nonrenewal or early termination of existing leases; and (iv) federal, state and local government initiatives to mitigate the impact of the COVID-19 pandemic, including additional restrictions on business activities, shelter-in place orders and other restrictions, and the timing and amount of economic stimulus or other initiatives; (b) the Company’s ability to continue construction on development and construction projects, in each case on the timeframes and on terms currently anticipated; (c) the Company’s ability to accurately assess and predict the impact of the COVID-19 pandemic on its results of operations, financial condition, dividend policy, acquisition and disposition activities and growth opportunities; and (d) the Company’s ability to maintain compliance with the covenants under its existing debt agreements or to obtain modifications to such covenants from the applicable lenders.
CORPORATE PROFILE 4 Armada Hoffler Properties, Inc. (NYSE: AHH) is a vertically-integrated, self-managed real estate investment trust ("REIT") with four decades of experience developing, building, acquiring, and managing high-quality, institutional-grade office, retail, and multifamily properties located primarily in the Mid-Atlantic and Southeastern United States. In addition to developing and building properties for its own account, the Company also provides development and general contracting construction services to third-party clients. Founded in 1979 by Daniel A. Hoffler, the Company has elected to be taxed as a REIT for U.S. federal income tax purposes. For more information, visit ArmadaHoffler.com. BOARD OF DIRECTORS CORPORATE OFFICERS Daniel A. Hoffler, Executive Chairman of the Board Louis S. Haddad, President and Chief Executive Officer Louis S. Haddad, Vice Chairman of the Board Michael P. O’Hara, Chief Financial Officer James C. Cherry, Lead Independent Director Shawn J. Tibbetts, Chief Operating Officer George F. Allen, Independent Director Eric E. Apperson, President of Construction James A. Carroll, Independent Director Shelly R. Hampton, President of Asset Management Eva S. Hardy, Independent Director A. Russell Kirk, Director Dorothy S. McAuliffe, Independent Director John W. Snow, Independent Director ANALYST COVERAGE Bank of America Merrill Lynch Janney, Montgomery, & Scott LLC Raymond James & Associates James Feldman Robert Stevenson Bill Crow (646) 855-5808 (646) 840-3217 (727) 567-2594 james.feldman@bofa.com robertstevenson@janney.com bill.crow@raymondjames.com Stifel, Nicolaus & Company Inc. D. A. Davidson & Co. Robert W. Baird & Co. John Guinee Barry Oxford David Rodgers (443) 224-1307 (212) 240-9871 (216) 737-7341 jwguinee@stifel.com boxford@dadco.com drodgers@rwbaird.com
HIGHLIGHTS 5 • Net income attributable to common stockholders and OP Unit holders of $8.2 million, or $0.11 per diluted share, compared to $6.5 million, or $0.10 per diluted share, for the three months ended March 31, 2019. • Funds from operations attributable to common stockholders and OP Unit holders ("FFO") of $22.3 million, or $0.29 per diluted share, compared to $16.6 million, or $0.25 per diluted share, for the three months ended March 31, 2019. See "Non-GAAP Financial Measures.“ • Normalized funds from operations attributable to common stockholders and OP Unit holders ("Normalized FFO") of $24.7 million, or $0.32 per diluted share, compared to $18.5 million, or $0.27 per diluted share, for the three months ended March 31, 2019. • Core operating property portfolio occupancy at 95.6% as of March 31, 2020 compared to 96.5% as of December 31, 2019. • Same Store Net Operating Income (“NOI”) increased 1.7% on a GAAP basis and 3.6% on a cash basis compared to the quarter ended March 31, 2019. • Third-party construction backlog as of March 31, 2020 was $235.6 million. • Reaffirmed its commitment to best-in-class corporate governance practices by waiving the option to classify its Board without stockholder approval under Maryland law, commonly referred to as MUTA. • Established a Sustainability Committee to support the Company's ongoing commitment to environmental, workplace health and safety, corporate social responsibility, corporate governance, and other sustainability matters. The Sustainability Committee's 2019 Report can be accessed through the Company's website, ArmadaHoffler.com/Sustainability. • Adopted several new corporate governance policies related to: environmental matters, human rights, vendor code of business conduct, clawback of incentive compensation, and anti-hedging. COVID - 19 UPDATE: • Board of Directors suspends quarterly cash dividend on common stock and OP Units. • Board of Directors declares cash dividend of $0.421875 per share on its Series A Cumulative Redeemable Perpetual Preferred Stock payable on July 15, 2020 to stockholders of record on July 1, 2020. • Board of Directors elects to reduce compensation by 25%. President and Chief Executive Officer Louis Haddad elects to reduce salary by 25%. • Provided a comprehensive update on the current impact of the COVID-19 pandemic on the Company's business as set forth in the separate presentation found on the Investors page of the Company's website, ArmadaHoffler.com. The Company's executive management team will discuss current events including COVID-19 during today's webcast and conference call. • As of April 24, collected 78% of total portfolio rents due for the month of April, including 100% of office tenant rents, 97% of multifamily tenant rents, and 57% of retail tenant rents. Please refer to the COVID-19 presentation for additional details regarding the composition and status of the Company's tenants and residents. • All third-party construction sites remain active and fully operational. • Deferred the commencement of three development projects, postponed all asset acquisition activity, and suspended non-essential capital expenditures. • Because of the uncertainty surrounding the future impact of the COVID-19 pandemic, the Company has withdrawn its 2020 full-year Normalized FFO guidance that was previously issued on February 6, 2020.
SUMMARY INFORMATION 6 $ IN THOUSANDS, EXCEPT PER SHARE DATE Three months ended 3/31/2020 12/31/2019 9/30/2019 6/30/2019 3/31/2019 OPERATIONAL METRICS Net income attributable to common stockholders and OP unit holders $8,160 $7,215 $9,869 $5,992 $6,514 Net income attributable to common stockholders and OP unit holders per diluted share $0.11 $0.09 $0.13 $0.08 $0.10 Rental properties Net Operating Income (NOI) 28,581 27,811 28,167 25,012 21,056 General contracting and real estate services gross profit 1,718 1,058 1,192 1,321 750 Adjusted EBITDA(1) 33,103 30,843 31,150 28,800 24,727 Funds From Operations (FFO) attributable to common stockholders and OP unit holders 22,252 22,500 21,706 19,137 16,643 FFO per diluted share attributable to common stockholders and OP unit holders $0.29 $0.29 $0.29 $0.27 $0.25 Normalized FFO attributable to common stockholders and OP unit holders 24,697 22,896 22,474 21,212 18,506 Normalized FFO per diluted share attributable to common stockholders and OP unit holders $0.32 $0.30 $0.30 $0.30 $0.27 Annualized dividend yield 8.22% 4.58% 4.64% 5.08% 5.39% CAPITALIZATION Common shares outstanding 56,492 56,278 54,875 52,794 52,327 Operating Partnership units outstanding 21,273 21,273 21,167 21,178 16,992 Common shares and OP units outstanding 77,765 77,551 76,042 73,972 69,319 Market price per common share $10.70 $18.35 $18.09 $16.55 $15.59 Common equity capitalization(2) $832,085 $1,423,061 $1,375,600 $1,224,237 $1,080,683 Preferred equity capitalization 63,250 63,250 63,250 63,250 - Total equity capitalization $895,335 $1,486,311 $1,438,850 $1,287,487 $1,080,683 Total debt(3) 1,016,293 960,819 951,891 956,068 744,123 Total capitalization 1,911,628 2,447,130 2,390,741 2,243,555 1,824,806 Less: cash (52,788) (43,579) (47,606) (25,961) (18,959) Total enterprise value $1,858,840 $2,403,551 $2,343,135 $2,217,594 $1,805,847 BALANCE SHEET METRICS Core debt / enterprise value 45.0% 33.6% 33.4% 27.0% 30.0% Core debt + preferred equity / enterprise value 48.4% 36.2% 36.1% 29.8% - Fixed charge coverage ratio 2.8x 2.5x 2.7x 2.9x 3.4x Core debt / Annualized core EBITDA 6.5x 6.8x 6.6x 6.1x 6.1x Core debt + preferred equity / Annualized core EBITDA 7.0x 7.3x 7.2x 6.7x - CORE PORTFOLIO OCCUPANCY Office(4) 96.6% 96.6% 96.6% 94.6% 94.9% Retail(4) 96.1% 96.9% 96.8% 96.6% 96.1% Multifamily(5) 93.7% 95.6% 95.8% 94.7% (6) 97.2% Weighted Average(7) 95.6% 96.5% 96.5% 95.6% 96.0% (1) See definition on page 28. (2) Includes common shares and OP units. (3) Excludes 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) Includes impact of seasonality, attributed to the reduced summer occupancy at the JHU student housing property. (7) Total occupancy weighted by annualized base rent.
NET ASSET VALUE COMPONENT DATA 7 $ IN THOUSANDS Stabilized Portfolio NOI (Cash)(1) Third-Party General Contracting and Real Estate Services Three months ended Annualized Trailing 12 Months 3/31/2020 3/31/2020 General Contracting Gross Profit $5,289 Stabilized Virginia Beach (VB) Town Center(1) Office(2) $3,503 $14,012 Non-Property Assets(4) Retail(2) 1,944 7,776 As of 3/31/2020 Multifamily 1,812 7,248 Cash and Cash Equivalents $48,096 Total Stabilized VB Town Center NOI $7,259 $29,036 Restricted cash 4,692 Accounts Receivable 22,831 Stabilized Portfolio (Excludes VB Town Center)(1) Notes Receivable, Including Mezzanine Investments (5) 177,344 Office(2) $2,912 $11,648 Construction receivables, including retentions 35,051 Retail 12,635 50,540 Acquired lease intangible assets, net 65,014 Multifamily 4,994 19,976 Other Assets 34,862 Total Stabilized Portfolio (Excludes VB Town Center) $20,541 $82,164 Land Held for Development (Book Value) 13,607 Total Non-Property Assets $401,497 Combined Stabilized Portfolio NOI $27,800 $111,200 Liabilities(4) Run Rate Adjustments(1) As of 3/31/2020 Signed Leases Not Yet Occupied or In Free Rent Period $901 $3,604 Mortgages and Notes Payable(5) $1,016,293 Net Dispositions Completed Intra-Quarter - - Accounts Payable and Accrued Liabilities 15,768 Total Run Rate Adjustments $901 $3,604 Construction Payables, Including Retentions 50,161 Other Liabilities 75,715 Total $28,701 $114,804 Total Liabilities $1,157,937 Non-Stabilized Portfolio and Development Pipeline (Cost Basis)(3) Preferred Equity See page 17 for a list of properties Liquidation Value As of 3/31/2020 Series A Cumulative Redeemable Perpetual Preferred Stock $63,250 Income Producing Properties $14,000 Construction In Process 150,000 Other Assets 24,000 Common Equity Total Non-Stabilized Development Portfolio 188,000 As of 3/31/2020 Total common shares outstanding 56,492 Redevelopment in Process 17,000 Total OP units outstanding 21,273 Total Non-Stabilized Redevelopment and Development Portfolio $205,000 Total Common Shares & OP Units Outstanding 77,765 (1) NOI from non-stabilized portfolio and development pipeline excluded from stabilized portfolio. (2) Includes leases for spaces occupied by Armada Hoffler which are eliminated for GAAP purposes. (3) NOI not included in Stabilized Portfolio. (4) Excludes lease right of use assets and lease liabilities. (5) Excludes GAAP adjustments.
SUMMARY BALANCE SHEET 8 $ IN THOUSANDS As of 3/31/2020 12/31/2019 Assets (Unaudited) Real estate investments: Income producing property $1,465,882 $1,460,723 Held for development 13,607 5,000 Construction in progress 155,672 140,601 Accumulated depreciation (235,249) (224,738) Net real estate investments 1,399,912 1,381,586 Real estate investments held for sale - 1,460 Cash and cash equivalents 48,096 39,232 Restricted cash 4,692 4,347 Accounts receivable, net 22,831 23,470 Notes receivable, net 178,652 159,371 Construction receivables, including retentions, net 35,051 36,361 Construction contract costs and estimated earnings in excess of billings, net 458 249 Operating lease right-of-use assets, net 32,997 33,088 Finance lease right-of-use assets, net 23,983 24,130 Acquired lease intangible assets, net 65,014 68,702 Other assets 34,404 32,901 Total Assets $1,846,090 $1,804,897 Liabilities and Equity Indebtedness, net $1,006,617 $950,537 Accounts payable and accrued liabilities 15,768 17,803 Construction payables, including retentions 50,161 53,382 Billings in excess of costs and estimated earnings 6,311 5,306 Operating lease liabilities 41,512 41,474 Finance lease liabilities 17,916 17,903 Other liabilities 69,404 63,045 Total Liabilities 1,207,689 1,149,450 Total Equity 638,401 655,447 Total Liabilities and Equity $1,846,090 $1,804,897
SUMMARY INCOME STATEMENT 9 IN THOUSANDS, EXCEPT PER SHARE DATA Three months ended 3/31/2020 3/31/2019 Revenues (Unaudited) Rental revenues $42,289 $30,909 General contracting and real estate services revenues 47,268 17,036 Total Revenues 89,557 47,945 Expenses Rental expenses 9,375 6,725 Real estate taxes 4,333 3,128 General contracting and real estate services expenses 45,550 16,286 Depreciation and amortization 14,279 9,904 Amortization of right-of-use assets - finance leases 147 - General and administrative expenses 3,793 3,401 Acquisition, development and other pursuit costs 27 400 Impairment charges 158 - Total Expenses 77,662 39,844 Operating Income 11,895 8,101 Interest income 7,226 5,319 Interest expense on indebtedness (7,959) (5,886) Interest expense on finance leases (229) - Change in fair value of interest rate derivatives (1,736) (1,463) Equity in income of unconsolidated real estate entities - 273 Provision for unrealized credit losses (377) - Other income (expense), net 58 60 Income before taxes 8,878 6,404 Income tax benefit (provision) 257 110 Net Income $9,135 $6,514 Net income attributable to noncontrolling interest in investment entities 92 - Preferred stock dividends (1,067) - Net income attributable to AHH and OP Unit holders $8,160 $6,514 Net income per diluted share and unit attributable to AHH and OP Unit holders $0.11 $0.10 Weighted Average Shares & Units - Diluted 77,671 67,919
(1) FFO, NORMALIZED FFO & AFFO 10 $ IN THOUSANDS, EXCEPT PER SHARE DATA Three months ended (Unaudited) 3/31/2020 12/31/2019 9/30/2019 6/30/2019 3/31/2019 Funds From Operations Net income attributable to AHH and OP unit holders $8,160 $7,215 $9,869 $5,992 $6,514 Earnings per diluted share $0.11 $0.09 $0.13 $0.08 $0.10 Depreciation and amortization(2) 14,092 15,285 15,057 13,145 10,129 Gains (losses) on dispositions of operating real estate(3) - - (3,220) - - FFO $22,252 $22,500 $21,706 $19,137 $16,643 FFO per diluted share $0.29 $0.29 $0.29 $0.27 $0.25 Normalized FFO Acquisition, development & other pursuit costs 27 294 93 57 400 Loss on extinguishment of debt - 30 - - - Impairment of intangible assets and liabilities 158 252 - - - Provision for unrealized credit losses 377 - - - - Amortization of right-of-use assets - finance leases 147 147 145 85 - Change in fair value of interest rate derivatives 1,736 (327) 530 1,933 1,463 Normalized FFO $24,697 $22,896 $22,474 $21,212 $18,506 Normalized FFO per diluted share $0.32 $0.30 $0.30 $0.30 $0.27 Adjusted FFO Non-cash stock compensation 1,030 274 323 327 689 Acquisition, development & other pursuit costs (27) (294) (93) (57) (400) Tenant improvements, leasing commissions, lease incentives(4) (1,318) (1,065) (2,057) (841) (809) Property related capital expenditures (1,014) (2,426) (1,565) (1,983) (1,494) Adjustment for loan modification and exit fees (2,074) (1,860) (1,371) (1,238) (1,118) Non-cash interest expense(5) 638 588 425 509 304 Cash ground rent payment - finance lease (216) (216) (207) (112) - GAAP Adjustments (984) (958) (1,686) (1,422) (850) AFFO $20,732 $16,939 $16,243 $16,395 $14,828 AFFO per diluted share $0.27 $0.22 $0.22 $0.23 $0.22 Weighted Average Common Shares Outstanding 56,398 55,581 53,463 52,451 50,926 Weighted Average Operating Partnership ("OP") Units Outstanding 21,273 21,181 21,080 18,781 16,993 Total Weighted Average Common Shares and OP Units Outstanding 77,671 76,762 74,543 71,232 67,919 (1) See definitions on pages 27-28. (2) Adjusted for the depreciation attributable to noncontrolling interests in consolidated investments and unconsolidated entities. (3) The adjustment for gain on operating real estate dispositions for the 3 months ended 9/30/2019 excludes the portion of the gain on Lightfoot Marketplace that was allocated to our joint venture partner and excludes the gain on sale of a non-operating land parcel. (4) Excludes development, redevelopment, and first generation space. (5) Includes non-cash interest expense relating to indebtedness and interest expense on finance leases.
OUTSTANDING DEBT 11 $ IN THOUSANDS Debt Maturities & Principal Payments Effective Rate as Outstanding as of Debt Stated Rate of 3/31/2020 Maturity Date 2020 2021 2022 2023 2024 Thereafter 3/31/2020 Secured Notes Payable - Core Debt Hoffler Place L+3.24% 4.23% Jan-2021 - $29,589 $29,589 Southgate Square L+1.60% 2.59% Apr-2021 660 19,682 20,342 Encore Apartments 3.25% 3.25% Sep-2021 379 24,338 24,717 4525 Main Street 3.25% 3.25% Sep-2021 487 31,230 31,717 Red Mill West 4.23% 4.23% Jun-2022 336 465 10,386 11,187 Thames Street Wharf L+1.30% 1.81% (1) Jun-2022 - - 70,000 70,000 Hanbury Village 3.78% 3.78% Aug-2022 79 532 17,774 18,385 Marketplace at Hilltop 4.42% 4.42% Oct-2022 299 414 9,706 10,419 1405 Point L+2.25% 3.24% Jan-2023 - 714 754 51,532 53,000 Socastee Commons 4.57% 4.57% Jan-2023 82 115 120 4,223 4,540 Sandbridge Commons L+1.75% 2.74% Jan-2023 186 257 268 7,248 7,959 249 Central Park Retail L+1.60% 3.85% (1) Aug-2023 175 245 260 16,092 16,772 Fountain Plaza Retail L+1.60% 3.85% (1) Aug-2023 105 147 156 9,685 10,093 South Retail L+1.60% 3.85% (1) Aug-2023 77 107 114 7,065 7,363 One City Center L+1.85% 2.84% Apr-2024 447 628 659 691 22,734 25,159 Red Mill Central 4.80% 4.80% Jun-2024 131 175 175 175 1,838 2,494 Premier Apartments L+1.55% 2.54% Oct-2024 34 208 221 234 16,053 16,750 Red Mill South 3.57% 3.57% May-2025 229 315 327 338 351 4,502 6,062 Brooks Crossing Office L+1.60% 2.59% Jul-2025 299 734 753 774 793 11,058 14,411 Market at Mill Creek L+1.55% 2.54% Jul-2025 486 647 647 647 647 10,960 14,034 Johns Hopkins Village L+1.25% 4.19% (1) Aug-2025 707 988 1,031 1,075 1,116 46,649 51,566 North Point Center Note 2 7.25% 7.25% Sep-2025 99 140 151 162 174 1,467 2,193 Lexington Square 4.50% 4.50% Sep-2028 193 268 280 293 306 13,293 14,633 Red Mill North 4.73% 4.73% Dec-2028 76 105 110 116 121 3,842 4,370 Greenside Apartments 3.17% 3.17% Dec-2029 505 697 720 743 765 30,398 33,828 Smith's Landing 4.05% 4.05% Jun-2035 635 880 917 956 994 13,584 17,966 Liberty Apartments 5.66% 5.66% Nov-2043 217 304 322 341 361 12,549 14,094 The Cosmopolitan 3.35% 3.35% Jul-2051 597 819 847 876 906 39,461 43,506 Total - Secured Core Debt $7,520 $114,743 $116,698 $103,266 $47,159 $187,763 $577,149 Secured Notes Payable - Development Pipeline Summit Place L+3.24% 4.23% Jan-2021 - 30,135 30,135 Wills Wharf L+2.25% 3.24% Jun-2023 - - - 45,759 45,759 Premier Retail L+1.55% 2.54% Oct-2024 17 102 109 115 7,907 8,250 Total - Development Pipeline 17 30,237 109 45,874 7,907 84,144 Total Secured Notes Payable $7,537 $144,980 $116,807 $149,140 $55,066 $187,763 $661,293 Unsecured Core Debt Senior Unsecured Line of Credit L+1.30%-1.85% 2.49% Jan-2024 - - - - $150,000 $150,000 Senior Unsecured Term Loan L+1.25%-1.80% 2.44% Jan-2025 - - - - - 19,500 (2) 19,500 Senior Unsecured Term Loan L+1.25%-1.80% 1.95% - 4.47% (1)(2) Jan-2025 - - - - - 185,500 (2) 185,500 Total - Unsecured Core Debt - - - - 150,000 205,000 355,000 Total Notes Payable excluding GAAP Adjustments $7,537 $144,980 $116,807 $149,140 $205,066 $392,763 $1,016,293 GAAP Adjustments (9,676) Total Notes Payable $1,006,617 (1) Includes debt subject to interest rate swap locks. (2) Reflects the impact of swap locks effective 4/1/2020.
DEBT INFORMATION 12 $ IN THOUSANDS Debt Maturities $350,000 5.0% $300,000 4.0% $250,000 3.6% 3.4% 3.4% 3.0% $200,000 2.7% 2.6% $150,000 2.0% $100,000 1.0% $50,000 $0 0.0% 2020 2021 2022 2023 2024 Thereafter Fixed-Rate Debt Variable-Rate Debt Weighted Average Interest Rate Total Debt Composition Interest Rate Cap Agreements Weighted Average Notional % of Debt Interest Rate Maturity Effective Date Maturity Date Strike Rate Amount Secured vs. Unsecured Debt July 2018 August 2020 2.50% $50,000 Unsecured Debt 34.9% 2.9% 4.4 Yrs December 2018 January 2021 2.75% 50,000 Secured Debt 65.1% 3.4% 6.0 Yrs May 2019 June 2022 2.50% 100,000 Variable vs. Fixed-rate Debt January 2020 February 2022 1.75% 100,000 March 2020 March 2022 1.50% 100,000 Variable-rate Debt(2) 42.8% 2.9% 3.3 Yrs Total Interest Rate Caps $400,000 Fixed-rate Debt(1)(3) 57.2% 3.4% 7.1 Yrs (1)(3) Fixed-rate and Hedged Debt 96.6% Fixed-rate Debt(1)(3) 581,405 Total 3.2% 5.5 Yrs Fixed-rate and Hedged Debt $981,405 (3) % of Total Debt 96.6% (1) Includes debt subject to interest rate swap locks. (2) Excludes debt subject to interest rate swap locks. (3) Excludes GAAP adjustments.
(1) CORE DEBT TO CORE EBITDA 13 $ IN THOUSANDS Three months ended 3/31/2020 12/31/2019 9/30/2019 6/30/2019 3/31/2019 Net income attributable to common stockholders and OP unit holders $8,160 $7,215 $9,869 $5,992 $6,514 Excluding: Depreciation and amortization(2) 14,092 15,285 15,057 13,145 10,129 Amortization of right-of-use assets - finance leases 147 147 145 85 - (Gain) Loss on operating real estate dispositions - - (3,220) (3) - - Income tax provision (benefit) (257) (152) (199) (30) (110) Interest expense(2) 7,805 8,359 8,624 7,348 6,042 Interest expense - finance leases 229 228 228 112 - Change in fair value of interest rate derivatives 1,736 (327) 530 1,933 1,463 Cash ground rent payment - finance leases (216) (216) (207) (112) - Loss on extinguishment of debt - 30 - - - Provision for unrealized credit losses 377 - - - - Non-cash stock compensation 1,030 274 323 327 689 Adjusted EBITDA $33,103 $30,843 $31,150 $28,800 $24,727 Other adjustments: Development/Redevelopment(2)(5) (1,133) (1,010) (1,499) (2,183) (2,452) (Less) Net Acquisitions/Dispositions completed intra-quarter - - (226) (1,978) - Core EBITDA $31,970 $29,833 $29,425 $24,639 $22,275 Total debt(4) $1,016,293 $960,819 $951,891 $956,068 $744,123 Adjustments to debt: (Less) Development/Redevelopment(2)(5) (127,650) (109,930) (122,597) (161,528) (182,780) (Less) Net Acquisitions/Dispositions completed intra-quarter - - - (170,476) - (Less) Cash & restricted cash (52,788) (43,579) (47,606) (25,961) (18,959) Core Debt $835,855 $807,310 $781,688 $598,103 $542,384 Core Debt/Annualized Core EBITDA 6.5x 6.8x 6.6x 6.1x 6.1x (1) See definitions on page 28. (2) Adjusted for the depreciation and interest expense attributable to noncontrolling interests in consolidated investments and unconsolidated entities. (3) The adjustment for gain on operating real estate dispositions excludes the portion of the gain on Lightfoot Marketplace in 3Q19 that was allocated to our joint venture partner. (4) Excludes GAAP Adjustments. (5) Includes the redevelopment of the Cosmopolitan apartments
CAPITALIZATION & FINANCIAL RATIOS 14 $ IN THOUSANDS AS OF MARCH 31, 2020 Debt % of Total Principal Balance Unsecured credit facility 15% $150,000 Unsecured term loans 20% 205,000 Mortgages payable 65% 661,293 Total debt $1,016,293 Liquidation Value Preferred Equity Shares Per Share Total Liquidation Value 6.75% Series A Cumulative Redeemable 2,530 $25.00 $63,250 Perpetual Preferred Stock (NYSE: AHHPrA) Preferred Equity Unsecured Credit Facility Unsecured Term Loans Common Equity % of Total Shares/Units Stock Price Market Value Common stock (NYSE: AHH) 73% 56,492 $10.70 $604,464 Common Units Mortgages Payable Common units 27% 21,273 $10.70 227,621 Equity market capitalization 77,765 $832,085 Total capitalization $1,911,628 Financial Ratios Debt Service Coverage Ratio(1) 3.0x Fixed Charge Coverage Ratio(2) 2.8x Net Debt to Adjusted EBITDA 7.7x Core Debt to Core EBITDA 6.5x Core Debt + Preferred Equity to Core EBITDA 7.0x Debt/Market capitalization 53% Liquidity Unencumbered Properties Cash on hand $52,788 % of Total Properties 59% Availability under credit facility - % of Annualized Base Rent 40% Availability under construction loans 40,381 $93,169 (1) Reflects quarterly Adjusted EBITDA divided by total quarterly interest expense and required principal repayment (2) Reflects quarterly Adjusted EBITDA divided by total quarterly interest expense, required principal repayment, and preferred equity dividends
PROPERTY PORTFOLIO 15 AS OF MARCH 31, 2020 Net Rentable Square Feet (RSF)(1) Development/ Development/ Town Unencumbered Redevelopment Core Redevelopment ABR per Property Anchor Tenant(s) Location Center ABR Year Built Core Properties Properties Total Occupancy(2) Leased(2) ABR(3) Leased SF(3) Retail Properties 249 Central Park Retail Cheesecake Factory, Brooks Brothers Virginia Beach, VA ✓ - 2004 92,400 - 92,400 97.9% - $2,561,001 $28.32 Alexander Pointe (6) Harris Teeter Salisbury, NC 100% 1997 64,724 - 64,724 95.7% - 649,308 10.49 Apex Entertainment Apex Entertainment, USI Virginia Beach, VA ✓ 100% 2002 - 103,335 103,335 - 100.0% 1,471,503 14.24 Bermuda Crossroads (6) Food Lion, OfficeMax Chester, VA 100% 2001 122,566 - 122,566 98.4% - 1,755,580 14.56 Broad Creek Shopping Center(6)(9) Food Lion, PetSmart Norfolk, VA 100% 1997/2001 121,504 - 121,504 95.5% - 2,072,367 17.86 Broadmoor Plaza Kroger South Bend, IN 100% 1980 115,059 - 115,059 97.5% - 1,383,006 12.32 Brooks Crossing Retail Various Small Shops Newport News, VA 100% 2016 18,349 - 18,349 66.3% - 169,740 13.95 Columbus Village(6) Barnes & Noble, Shake Shack Virginia Beach, VA ✓ 100% 1980/2013 - 62,362 62,362 - 90.8% 1,715,356 30.29 Columbus Village II Regal Cinemas, BB&B Virginia Beach, VA ✓ 100% 1995/1996 92,061 - 92,061 96.7% - 1,595,334 17.92 Commerce Street Retail (5) Yard House Virginia Beach, VA ✓ 100% 2008 19,173 - 19,173 100.0% - 886,965 46.26 Courthouse 7-Eleven 7-Eleven Virginia Beach, VA 100% 2011 3,177 - 3,177 100.0% - 139,311 43.85 Dimmock Square Best Buy, Old Navy Colonial Heights, VA 100% 1998 106,166 - 106,166 79.0% - 1,513,551 18.04 Fountain Plaza Retail Ruth's Chris, Ann Taylor Virginia Beach, VA ✓ - 2004 35,961 - 35,961 100.0% - 1,051,239 29.23 Gainsborough Square Food Lion Chesapeake, VA 100% 1999 88,862 - 88,862 95.6% - 1,329,455 15.65 Greentree Shopping Center Various Small Shops Chesapeake, VA 100% 2014 15,719 - 15,719 92.6% - 309,465 21.26 Hanbury Village(6) Harris Teeter, Walgreens Chesapeake, VA 32% 2006/2009 116,635 - 116,635 100.0% - 2,547,561 21.84 Harper Hill Commons (6) Harris Teeter Winston-Salem, NC 100% 2004 96,914 - 96,914 85.0% - 947,389 11.50 Harrisonburg Regal Regal Cinemas Harrisonburg, VA 100% 1999 49,000 - 49,000 100.0% - 717,850 14.65 Indian Lakes Crossing(6) Harris Teeter Virginia Beach, VA 100% 2008 64,973 - 64,973 97.5% - 877,324 13.85 Lexington Square Lowes Foods Lexington, SC - 2017 85,540 - 85,540 98.2% - 1,829,558 21.78 Market at Mill Creek (6) Lowes Foods Mt. Pleasant, SC - 2018 80,405 - 80,405 95.8% - 1,755,874 22.79 Marketplace at Hilltop(6)(9) Total Wine, Panera Virginia Beach, VA - 2000/2001 116,953 - 116,953 100.0% - 2,605,772 22.28 North Hampton Market PetSmart, Hobby Lobby Taylors, SC 100% 2004 114,935 - 114,935 95.8% - 1,394,118 12.66 North Point Center(6) Harris Teeter, Home Depot, Costco Durham, NC 88% 1998/2009 494,746 - 494,746 100.0% - 3,827,845 7.74 Oakland Marketplace(6) Kroger Oakland, TN 100% 2004 64,538 - 64,538 100.0% - 481,332 7.46 Parkway Centre Publix Moultrie, GA 100% 2017 61,200 - 61,200 98.0% - 814,128 13.57 Parkway Marketplace Rite Aid Virginia Beach, VA 100% 1998 37,804 - 37,804 94.4% - 727,263 20.37 Patterson Place BB&B, PetSmart, DSW Durham, NC 100% 2004 160,942 - 160,942 94.3% - 2,476,367 16.31 Perry Hall Marketplace Safeway Perry Hall, MD 100% 2001 74,256 - 74,256 100.0% - 1,270,853 17.11 Premier Retail Williams Sonoma, Pottery Barn Virginia Beach, VA ✓ - 2018 - 39,162 39,162 - 75.6% 969,014 32.73 Providence Plaza Cranfill, Sumner & Hartzog, Chipotle Charlotte, NC 100% 2007/2008 103,118 - 103,118 97.5% - 2,764,968 27.50 Red Mill Commons(6) Homegoods, Walgreens Virginia Beach, VA 8% 2000-2005 373,808 - 373,808 94.4% - 6,177,238 17.51 Renaissance Square Harris Teeter Davidson, NC 100% 2008 80,467 - 80,467 90.4% - 1,269,993 17.47 Sandbridge Commons(6) Harris Teeter Virginia Beach, VA - 2015 76,650 - 76,650 98.5% - 1,056,840 14.00 Socastee Commons Bi-Lo Myrtle Beach, SC - 2000/2014 57,273 - 57,273 100.0% - 651,797 11.38 Southgate Square Burlington, PetSmart, Michaels, Conn's Colonial Heights, VA - 1991/2016 260,131 - 260,131 93.6% - 3,346,192 13.74 South Retail lululemon, free people, CPK Virginia Beach, VA ✓ - 2002 38,515 - 38,515 100.0% - 997,134 25.89 South Square Ross, Petco, Office Depot Durham, NC 100% 1977/2005 109,590 - 109,590 98.1% - 1,794,697 16.70 Southshore Shops Buffalo Wild Wings Chesterfield, VA 100% 2006 40,307 - 40,307 78.8% - 669,194 21.07 Stone House Square(6) Weis Markets Hagerstown, MD 100% 2008 112,274 - 112,274 93.1% - 1,791,272 17.14 Studio 56 Retail McCormick & Schmick's Virginia Beach, VA ✓ 100% 2007 11,594 - 11,594 100.0% - 473,695 40.86 Tyre Neck Harris Teeter(6)(9) Harris Teeter Portsmouth, VA 100% 2011 48,859 - 48,859 100.0% - 533,285 10.91 Wendover Village BB&B, T.J. Maxx, Petco Greensboro, NC 100% 2004 176,939 - 176,939 100.0% - 3,564,025 20.14 Total / Weighted Avg Retail Portfolio 63% 4,004,087 204,859 4,208,946 96.1% $66,935,759 $16.58
PROPERTY PORTFOLIO CONT. 16 AS OF MARCH 31, 2020 Net Rentable Square Feet (RSF)(1) Town Unencumbered Core Development Core Development Office Properties Anchor Tenant Location Center ABR Year Built Properties Properties Total Occupancy(2) Leased(2) ABR(3) ABR per Leased SF(3) 4525 Main Street Clark Nexsen, Anthropologie, Mythics Virginia Beach, VA ✓ - 2014 234,938 - 234,938 98.1% - $6,760,796 $29.33 Armada Hoffler Tower(4)(5) AHH, Troutman Sanders, Williams Mullen Virginia Beach, VA ✓ 100% 2002 320,680 - 320,680 94.9% - 8,822,528 28.98 Brooks Crossing Office Huntington Ingalls Industries Newport News, VA - 2019 98,061 - 98,061 100.0% - 1,814,129 18.50 One Columbus(5) BB&T, HBA Virginia Beach, VA ✓ 100% 1984 128,876 - 128,876 97.5% - 3,153,421 25.10 One City Center Duke University, WeWork Durham, NC - 2019 152,815 - 152,815 87.8% - 4,397,609 32.79 Thames Street Wharf(4) Morgan Stanley, JHU Medical Baltimore, MD - 2010 263,426 - 263,426 99.4% - 7,206,502 27.53 Two Columbus HBA Architects Virginia Beach, VA ✓ 100% 2009 108,459 - 108,459 100.0% - 2,781,346 25.64 Total / Weighted Average Office Portfolio 42% 1,307,255 - 1,307,255 96.6% $34,936,331 $27.66 Units/Beds Development/ Development/ Town Unencumbered Core Redevelopment Total Core Redevelopment Monthly Rent per Multifamily Location Center ABR Year Built Properties Properties Units/Beds Occupancy (2) Occupancy(2) ABR (7) Occupied Unit/Beds 1405 Point(8)(9) Baltimore, MD - 2018 289 - 289 91.0% - $6,773,664 $2,146.28 Encore Apartments Virginia Beach, VA ✓ - 2014 286 - 286 87.4% - 3,976,332 1,325.44 Greenside Apartments Charlotte, NC - 2018 225 - 225 94.2% - 4,040,370 1,588.20 Hoffler Place(10) Charleston, SC - 2019 258 - 258 86.0% - 3,507,356 1,316.58 Johns Hopkins Village(8)(9)(10) Baltimore, MD - 2016 568 - 568 97.7% - 7,624,416 1,144.81 Liberty Apartments(8) Newport News, VA - 2013 197 - 197 93.9% - 2,495,257 1,123.73 Premier Apartments Virginia Beach, VA ✓ - 2018 131 - 131 96.2% - 2,207,352 1,459.89 Smith's Landing(9) Blacksburg, VA - 2009 284 - 284 100.0% - 4,284,972 1,257.33 The Cosmopolitan(8) Virginia Beach, VA ✓ - 2006 - 342 342 - 84.8% (11) 4,879,512 1,701.36 Total / Weighted Avg Multifamily Portfolio - 2,238 342 2,580 93.7% $39,789,230 $1,419.40 Square Footage Properties with Tenants Subject to Number of Leased Pursuant to (1) The net rentable square footage for each of our retail & office properties is the sum of (a) the square footage of Ground Lease Ground Leases Ground Leases ABR existing leases, plus (b) for available space, management’s estimate of net rentable square footage based, in part, on Alexander Pointe 1 7,014 $10,000 past leases. The net rentable square footage included in office leases is generally consistent with the Building Owners Bermuda Crossroads 2 11,000 179,685 and Managers Association, or BOMA, 1996 measurement guidelines. Broad Creek Shopping Center 6 23,825 649,818 (2) Occupancy for each of our retail & office properties is calculated as (a) square footage under executed leases as of Columbus Village 1 3,403 200,000 March 31, 2020, divided by (b) net rentable square feet, expressed as a percentage. Occupancy for our multifamily Hanbury Village 2 55,586 1,082,118 Harper Hill Commons 1 41,520 373,680 properties is calculated as (a) total units occupied as of March 31, 2020, divided by (b) total units available, as of such Indian Lakes Crossing 1 50,311 592,385 date expressed as a percentage. Market at Mill Creek 1 7,014 63,000 (3) For the properties in our office and retail portfolios, annualized base rent, or ABR, is calculated by multiplying (a) Marketplace at Hilltop 1 4,211 99,843 monthly base rent (defined as cash base rent, before contractual tenant concessions and abatements, and excluding North Point Center 4 280,556 1,146,700 tenant reimbursements for expenses paid by us) as of March 31, 2020 for in-place leases as of such date by (b) 12, and Oakland Marketplace 1 45,000 186,347 does not give effect to periodic contractual rent increases or contingent rental revenue (e.g., percentage rent based on Red Mill Commons 8 33,961 773,639 tenant sales thresholds). ABR per leased square foot is calculated by dividing (a) ABR by (b) square footage under in- Sandbridge Commons 3 60,521 738,500 place leases as of March 31, 2020. In the case of triple net or modified gross leases, our calculation of ABR does not Stone House Square 1 3,650 181,500 include tenant reimbursements for real estate taxes, insurance, common area or other operating expenses. Tyre Neck Harris Teeter 1 48,859 533,285 Total / Weighted Avg 34 676,431 $6,810,500 (4) The Company occupied 55,390 square feet at these two properties at an ABR of $1.7M, or $31.30 per leased square foot, which amounts are reflected in this table. The rent paid by us is eliminated in accordance with GAAP in the (8) The ABR for Liberty, Cosmopolitan, Johns Hopkins Village, Hoffler Place and 1405 Point excludes approximately consolidated financial statements. $0.3M, $0.9M, $1.1M, $0.1M and $0.4M, respectively, from ground floor retail leases. (5) Includes ABR pursuant to a rooftop lease. (9) The Company leases all or a portion of the land underlying this property pursuant to a ground lease. (6) Net rentable square feet at certain of our retail properties includes pad sites leased pursuant to the ground leases (10) Monthly rent per occupied unit is calculated by dividing total base rental payments for the month ended March in the table to the right. 31, 2020 by the number of occupied beds. (7) For the properties in our multifamily portfolio, ABR is calculated by multiplying (a) base rental payments for the (11) Occupancy calculation excludes 60 units that are offline for redevelopment. month ended March 31, 2020 by (b) 12.
DEVELOPMENT & REDEVELOPMENT PIPELINE 17 $ IN THOUSANDS Schedule(1) Property (1) % Leased or Construction Initial Stabilized Estimated Loan Cost to Estimated (2) (1) AHH Ownership % Anchor Tenants Projects Type LOI Start Occupancy Operation Cost Commitment Date Under Development Summit Place (Meeting Street) Multifamily 357 beds 47% 3Q17 3Q20 4Q20 $56,000 $35,000 $53,000 90% NA Charleston, SC Wills Wharf Office 325,000 sf 68% 3Q18 2Q20 2Q21 120,000 76,000 98,000 100% Canopy by Hilton, EY, WeWork Baltimore, MD On Hold Chronicle Mill 239 units / (3) Multifamily - TBD TBD TBD TBD TBD 4,000 85% NA Belmont, NC 10,000 sf Southern Post 138 units / (3) Mixed-use - TBD TBD TBD TBD TBD 9,000 80% TBD Roswell, GA 137,000 sf Ten Tryon (3) Mixed-use 220,000 sf 38% TBD TBD TBD TBD TBD 8,000 80% Publix, Fortune 100 office tenant Charlotte, NC Total Projects Under Development or On Hold $176,000 $111,000 $172,000 Delivered Not Stabilized Premier Retail (Town Center Phase VI) Retail 39,000 sf 76% 4Q16 3Q18 3Q21 18,000 8,000 16,000 100% Williams-Sonoma, Pottery Barn Virginia Beach, VA Total $194,000 $119,000 $188,000 Property % Leased or Out of Construction Anticipated Restabilized Estimated Projected Cost to Date Scope Redevelopment Type LOI Service Start Completion Operation(2) Cost(1) ROI Renovate all 342 units including upgraded finishes, new The Cosmopolitan cabinetry and flooring, energy efficient appliances, and LED Multifamily 83%(4) 60 units 1Q18 TBD TBD $14,000 $9,000 9% Virginia Beach, VA lighting; modernize resident clubhouse, business center, and leasing office. Reposition 62,000 SF center to better incorporate within Town Columbus Village I Center and add Virginia Beach Boulevard small shop frontage Mixed-use 95% 9,609 sf 2Q19 3Q20 4Q20 9,000 7,000 8% Virginia Beach, VA along with Shake Shack, Cava, Hand & Stone, European Wax Center , and new Barnes & Noble prototype. Apex Entertainment Building Revitalize 84,000 SF of big box retail space within Town Center (Former Dick's Sporting Goods) Mixed-use 100% 84,000 sf 1Q20 4Q20 1Q21 8,000 1,000 7% into a destination entertainment concept for a new to market Virginia Beach, VA tenant, Apex Entertainment. Total Projects Under Redevelopment $31,000 $17,000 8% Q1 2020 Capitalized Interest $1,548 Capitalized Overhead $964 (1) Represents estimates that may change as the development and redevelopment process proceeds. (2) First fully-stabilized quarter. See same store definition on page 29. (3) Majority interest in joint venture with preferred return. (4) Occupancy calculation excludes 60 units that are offline for redevelopment.
MEZZANINE INVESTMENTS 18 $ IN THOUSANDS Schedule(1) Principal Property % Leased Initial Mezzanine Mezzanine Type Estimated(1) or LOI Occupancy Loan Maturity Interest Rate Financing Interest QTD Investments with Discounted Purchase Options Nexton Square-Phase I Mixed-use 118,000 sf 99% 3Q19 4Q20 10% $14,000 $392 Summerville, SC Short Term Investments Delray Plaza (Whole Foods)(2) Retail 83,000 sf 100% 3Q19 4Q20 15% 12,000 489 Delray Beach, FL The Residences at Annapolis Junction(2) Multifamily 416 units 80% 3Q17 2Q20 10% 36,000 1,009 Annapolis Junction, MD Solis Apartments at Interlock Multifamily 349 units NA 4Q20 3Q22 13% 23,000 838 Atlanta, GA The Interlock Mixed-use 300,000 sf 74% 4Q20 3Q22 15% 67,000 2,403 Atlanta, GA Total $152,000 $5,131 Mezzanine Interest Expense (1,122) Net Mezzanine Interest Income $4,009 The Interlock Solis Apartments Atlanta, GA Atlanta, GA (1) Represents estimates that may change as the development process proceeds (2) Stopped GAAP recognition of mezzanine income as of 4/1/20
ACQUISITIONS & DISPOSITIONS 19 $ IN THOUSANDS ACQUISITIONS Reinvested 1031 $ Value of Cash Cap Properties Location Square Feet Purchase Price(1) Proceeds OP Units/Stock(2) Rate Purchase Date Anchor Tenants Thames Street Wharf Baltimore, MD 263,426 $101,000 $ - $ - 7.1% 2Q19 Morgan Stanley, JHU Medical Red Mill Commons & Marketplace T.J. Maxx, Homegoods, Total Wine, Virginia Beach, VA 488,865 105,000 - 63,755 7.7% 2Q19 at Hilltop Walgreens Wendover Village III Greensboro, NC 5,286 2,783 2,424 - 9.2% 1Q19 Verizon Lexington Square Lexington, SC 85,531 26,758 - 2,769 6.7% 3Q18 Lowes Foods 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 Maryland 182,949 39,555 15,200 4,155 7.4% 2Q15 Safeway & Weis Markets House Square Dimmock Square Colonial Heights, VA 106,166 19,662 - 9,662 7.3% 3Q14 Old Navy, Best Buy Total/Weighted Average 3,042,449 $652,313 $130,124 $142,150 7.2% DISPOSITIONS Square Cash Cap Properties Location Feet/Units Sale Price Cash Proceeds Gain on Sale Rate Disposition Date Anchor Tenants Lightfoot Marketplace Williamsburg, VA 124,715 $30,275 $11,800 $4,477 (4) 5.8% 3Q19 Harris Teeter Indian Lakes Wawa Virginia Beach, VA 6,047 4,400 4,400 - 5.4% 2Q18 Wawa 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(3) Newport News, VA 100,139 6,500 - 3,793 16.4% 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 899,282 sf/ $239,750 $168,400 $63,112 7.0% 203 units (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. (4) Includes JV interest in the property.
CONSTRUCTION BUSINESS SUMMARY 20 $ IN THOUSANDS Total Contract Work in Place as Estimated Date Highlighted Projects Location Value of 3/31/2020 Backlog of Completion The Interlock Atlanta, GA $93,671 $60,692 $32,979 3Q 2020 Solis Apartments at Interlock Atlanta, GA 64,097 23,840 40,257 1Q 2021 Boulders Lakeside Apartments Chesterfield, VA 35,707 15,852 19,855 1Q 2021 27th Street Garage and Apartments Virginia Beach, VA 79,550 14,298 65,252 3Q 2021 Holly Springs Apartments Holly Springs, NC 34,729 193 34,536 4Q 2021 Sub Total 307,754 114,875 192,879 All Other Projects 293,730 250,967 42,763 Total $601,484 $365,842 $235,642 Gross Profit Summary Trailing 12 Q1 2020 Months (Unaudited) Revenue $47,268 $136,091 Expense (45,550) (130,802) Gross Profit $1,718 $5,289 The Interlock Atlanta, GA
SAME STORE NOI BY SEGMENT 21 $ IN THOUSANDS (RECONCILIATION TO GAAP LOCATED IN APPENDIX ON PG. 33) Three months ended 3/31/2020 3/31/2019 $ Change % Change Office(1) (Unaudited) Revenue $5,303 $5,326 ($23) -0.4% Rental Expenses (2) 1,402 1,346 56 4.2% Real Estate Taxes 554 513 41 8.0% Net Operating Income $3,347 $3,467 ($120) -3.5% Retail(1) Revenue $15,909 $15,587 $322 2.1% Rental Expenses (2) 2,088 2,129 (41) -1.9% Real Estate Taxes 1,765 1,667 98 5.9% Net Operating Income $12,056 $11,791 $265 2.2% Multifamily(1) Revenue $5,620 $5,449 $171 3.1% Rental Expenses (2) 1,671 1,690 (19) -1.1% Real Estate Taxes 422 396 26 6.6% Net Operating Income $3,527 $3,363 $164 4.9% Same Store Net Operating Income (NOI) $18,930 $18,621 $309 1.7% GAAP Adjustments (235) (570) 335 Same store portfolio NOI, cash basis $18,695 $18,051 $644 3.6% NOI, Cash Basis: Office $3,306 $3,136 $170 5.4% Retail 11,905 11,653 252 2.2% Multifamily 3,484 3,262 222 6.8% $18,695 $18,051 $644 3.6% NOI: Office $3,347 $3,467 ($120) -3.5% Retail 12,056 11,791 265 2.2% Multifamily 3,527 3,363 164 4.9% $18,930 $18,621 $309 1.7% (1) See page 30 for Same Store vs. Non – Same Store Properties. (2) Excludes expenses associated with the Company’s in house asset management division of $419K and $402K for the 3 months ended 3/31/2020 & 3/31/2019, respectively.
(1) TOP 10 TENANTS BY ABR 22 $ IN THOUSANDS AS OF MARCH 31, 2020 Office Portfolio Number Lease Annualized Base % of Office Portfolio % of Total Portfolio Tenant of Leases Expiration Rent Annualized Base Rent Annualized Base Rent Morgan Stanley 2 2023 ; 2027 $ 5,879 16.8% 4.2% Clark Nexsen 1 2029 2,639 7.6% 1.9% WeWork 1 2034 2,259 6.5% 1.6% Duke University 1 2029 1,579 4.5% 1.1% Huntington Ingalls 1 2029 1,513 4.3% 1.1% Mythics 1 2030 1,211 3.5% 0.9% Johns Hopkins Medicine 1 2023 1,118 3.2% 0.8% Pender & Coward 1 2030 926 2.7% 0.7% Kimley-Horn 1 2027 894 2.6% 0.6% Troutman Sanders 1 2025 889 2.5% 0.6% Top 10 Total $ 18,907 54.2% 13.5% Retail Portfolio Number Lease Annualized Base % of Retail Portfolio % of Total Portfolio Tenant of Leases Expiration Rent Annualized Base Rent Annualized Base Rent Harris Teeter/Kroger 10 2020 - 2035 $ 5,645 8.4% 4.0% Lowes Foods 2 2037 ; 2039 1,976 3.0% 1.4% Bed, Bath, & Beyond 4 2022 ; 2025 1,751 2.6% 1.2% Regal Cinemas 2 2022 - 2024 1,713 2.6% 1.2% PetSmart 5 2022 - 2025 1,461 2.2% 1.0% Food Lion 3 2022 - 2024 1,315 2.0% 0.9% Petco 4 2022 - 2030 892 1.3% 0.6% Weis Markets 1 2028 802 1.2% 0.6% Total Wine & More 2 2024 ; 2027 765 1.1% 0.5% Ross Dress for Less 2 2022 ; 2025 762 1.1% 0.5% Top 10 Total $ 17,082 25.5% 11.9% (1) Includes leases from the development and redevelopment properties that have been delivered, but not stabilized.
LEASE SUMMARY 23 OFFICE Renewal Lease Summary GAAP Cash Number of Weighted Leases Net Rentable SF Leases Net Rentable Contractual Prior Rent Releasing Contractual Prior Rent Releasing Average Lease TI & LC Quarter Signed Signed Expiring SF Expiring Rent per SF per SF Spread Rent per SF per SF Spread Term (yrs) TI & LC per SF Q1 2020 1 17,194 4 7,373 $ 32.77 $30.32 8.1% $ 29.75 31.40 -5.3% 8.00 $ 1,004,346 $58.41 Q4 2019 2 8,147 1 3,929 25.43 24.23 4.9% 24.74 25.69 -3.7% 4.06 64,668 7.94 Q3 2019 1 1,120 4 26,201 38.50 37.00 4.1% 38.50 37.00 4.1% 2.00 1,725 1.54 Q2 2019 1 30,009 1 5,253 20.37 21.71 -6.1% 19.00 23.77 -20.1% 5.00 114,589 3.82 New Lease Summary(1) Number of Cash Weighted Leases Net Rentable SF Contractual Average TI & LC Quarter Signed Signed Rent per SF Lease Term TI & LC per SF Q1 2020 1 3,186 $26.50 5.00 $112,578 $35.34 Q4 2019 1 2,363 23.75 6.00 138,300 58.53 Q3 2019 7 21,345 24.73 5.30 716,641 33.57 Q2 2019 4 22,712 27.11 8.60 1,122,865 49.44 RETAIL Renewal Lease Summary GAAP Cash Number of Net Weighted Leases Rentable SF Net Rentable SF Contractual Prior Rent per Releasing Contractual Prior Rent Releasing Average Lease TI & LC Quarter Signed Signed Leases Expiring Expiring Rent per SF SF Spread Rent per SF per SF Spread Term (yrs) TI & LC per SF Q1 2020 3 35,767 16 158,218 $13.11 $12.98 1.0% $ 13.15 13.00 1.1% 4.81 $74,321 $2.08 Q4 2019 23 110,368 14 34,291 17.94 16.79 6.9% 17.87 17.15 4.2% 5.25 202,576 1.84 Q3 2019 28 201,931 8 14,338 16.44 15.47 6.3% 16.32 15.72 3.9% 5.14 568,379 2.81 Q2 2019 19 193,546 12 36,364 13.37 12.64 5.7% 13.37 12.84 4.1% 4.87 137,547 0.71 New Lease Summary(1) Number of Net Cash Weighted Leases Rentable SF Contractual Average Lease TI & LC Quarter Signed Signed Rent per SF Term (yrs) TI & LC per SF Q1 2020 7 13,073 $18.33 5.24 $184,426 $14.11 Q4 2019 12 72,921 17.50 10.02 3,207,564 43.99 Q3 2019 5 14,720 20.60 9.60 733,422 49.82 Q2 2019 7 31,696 27.36 9.41 1,857,154 58.59
OFFICE LEASE EXPIRATIONS 24 AS OF MARCH 31, 2020 % Portfolio Net % of Portfolio Annualized Base Number of Leases Square Footage of Rentable Square Annualized Base Annualized Base Rent per Leased Year Expiring Leases Expiring Feet Rent Rent Square Foot Available - 44,302 3.4% $ - - $ - M-T-M 2 0 - 2,400 - - 2020 8 21,641 1.7% 669,935 1.9% 30.96 2021 12 48,532 3.7% 1,337,860 3.8% 27.57 2022 10 54,082 4.1% 1,487,997 4.3% 27.51 2023 12 103,647 7.9% 2,723,325 7.8% 26.28 2024 10 134,075 10.3% 3,248,397 9.3% 24.23 2025 16 137,605 10.5% 4,044,721 11.6% 29.39 2026 8 36,863 2.8% 926,963 2.7% 25.15 2027 4 244,864 18.7% 7,036,462 20.1% 28.74 2028 7 69,036 5.3% 1,979,242 5.7% 28.67 2029 7 242,709 18.6% 6,176,768 17.7% 25.45 2030 6 107,801 8.2% 3,043,135 8.7% 28.23 Thereafter 1 62,098 4.8% 2,259,126 6.4% 36.38 Total / Weighted Average 103 1,307,255 100.0% $ 34,936,331 100.0% $ 27.66 Square Feet % of Portfolio 300,000 25.0% Under Lease ABR 250,000 20.0% 2,500 or less 3% 200,000 2,501-10,000 14% 15.0% 150,000 10,001-20,000 16% 10.0% 20,001-40,000 21% 100,000 40,001-100,000 30% 5.0% 50,000 Greater than 100,000 16% - 0.0% Office Portfolio Total 100% Leased Square Feet % ABR of Office Portfolio
RETAIL LEASE EXPIRATIONS 25 AS OF MARCH 31, 2020 % Portfolio Net % of Portfolio Annualized Base Number of Leases Square Footage of Rentable Square Annualized Base Annualized Base Rent per Leased Year Expiring Leases Expiring(1) Feet Rent(1) Rent Square Foot Available - 172,605 4.1% $ - - $ - M-T-M 5 10,500 0.2% 251,932 0.4% 23.99 2020 45 185,983 4.4% 2,766,441 4.1% 14.87 2021 91 351,636 8.4% 6,796,036 10.2% 19.33 2022 87 502,490 11.9% 8,254,616 12.3% 16.43 2023 90 518,121 12.3% 8,487,650 12.7% 16.38 2024 85 524,109 12.5% 8,623,779 12.9% 16.45 2025 69 592,430 14.1% 8,217,231 12.3% 13.87 2026 28 166,357 4.0% 3,285,448 4.9% 19.75 2027 21 134,265 3.2% 2,920,596 4.4% 21.75 2028 24 252,999 6.0% 3,523,589 5.3% 13.93 2029 23 108,253 2.6% 2,158,462 3.2% 19.94 2030 17 98,880 2.3% 1,984,845 3.0% 20.07 Thereafter 26 590,318 14.0% 9,665,130 14.4% 16.37 Total / Weighted Average 611 4,208,946 100.0% $ 66,935,755 100.0% $ 16.58 700,000 16.0% Square Feet 600,000 14.0% Under Lease % of Portfolio ABR 12.0% 500,000 2,500 or less 15% 10.0% 2,501-10,000 33% 400,000 8.0% 10,001-20,000 14% 300,000 6.0% 20,001-40,000 15% 200,000 4.0% 40,001-100,000 22% 100,000 2.0% Greater than 100,000 1% - 0.0% Retail Portfolio Total 100% Leased Square Feet % ABR of Retail Portfolio (1) Includes leases from properties in development, redevelopment, and delivered, not yet stabilized.
26 APPENDIX DEFINITIONS & RECONCILIATIONS Town Center Virginia Beach, VA
DEFINITIONS 27 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 depreciation and amortization related to real estate, gains or losses from the sale of certain real estate assets, gains and losses from change in control, and impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity. 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. 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 of intangible assets and liabilities, mark-to-market adjustments on interest rate derivatives, provision for unrealized credit losses, amortization of right-of-use assets attributable to finance leases, severance related costs, 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.
DEFINITIONS 28 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, proceeds from the sale of a purchase option (in excess of amounts recognized in net income), straight-line rents, cash ground rent payments for finance leases, 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. 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, impairment of real estate assets, debt extinguishment losses, non-cash stock compensation and mark-to-market adjustments on interest rate derivates, and including cash ground rent payments for finance leases. 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 Adjusted EBITDA, excluding certain items, including, but not limited to, 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.
DEFINITIONS 29 SAME STORE PORTFOLIO: We define same store properties as those that we owned and operated and that were stabilized for the entirety of both periods compared. We generally consider a property to be stabilized upon the earlier of: (i) the quarter after 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, the asset is placed back into service, and the stabilization criteria above are again met. A property may also be fully or partially taken out of service as a result of a disposition, depending on the significance of the portion of the property disposed. Finally, any property classified as Held for Sale is taken out of service for the purpose computing same store operating results. The following table shows the properties included in the same store and non-same store portfolio for the comparative periods presented.
SAME STORE VS. NON - SAME STORE PROPERTIES 30 Three Months Ended Three Months Ended 3/31/2020 to 2019 3/31/2020 to 2019 Same Non-Same Same Non-Same Store Store Store Store Retail Properties Retail Properties (Continued) 249 Central Park Retail X Red Mill Commons X Alexander Pointe X Renaissance Square X Bermuda Crossroads X Sandbridge Commons X Broad Creek Shopping Center X Socastee Commons X Broadmoor Plaza X South Retail X Brooks Crossing (Retail) 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 Apex Entertainment X Tyre Neck Harris Teeter X Dimmock Square X Wendover Village X Fountain Plaza Retail X Wendover Village II X Greentree Shopping Center X Wendover Village III X Gainsborough Square X Office Properties Hanbury Village X 4525 Main Street X Harper Hill Commons X Armada Hoffler Tower X Harrisonburg Regal X Brooks Crossing (Office) X Indian Lakes Crossing X One City Center X Lexington Square X One Columbus X Market at Mill Creek X Thames Street Wharf X Marketplace at Hilltop X Two Columbus X North Hampton Market X Multifamily Properties North Point Center X 1405 Point X Oakland Marketplace X Encore Apartments X Parkway Centre X Greenside Apartments X Parkway Marketplace X Hoffler Place X Patterson Place X Johns Hopkins Village X Perry Hall Marketplace X Liberty Apartments X Premier Retail X Premier Apartments X Providence Plaza X Smith’s Landing X The Cosmopolitan X
RECONCILIATION TO PROPERTY PORTFOLIO NOI 31 $ IN THOUSANDS Three months ended 3/31 2020 2019 Office Same Store(1) Rental revenues $5,303 $5,326 Property expenses 1,956 1,859 NOI 3,347 3,467 Non-Same Store NOI(2) 3,153 77 Segment NOI $6,500 $3,544 Retail Same Store(1) Rental revenues $15,909 $15,587 Property expenses 3,853 3,796 NOI 12,056 11,791 Non-Same Store NOI(2) 3,169 1,055 Segment NOI $15,225 $12,846 Multifamily Same Store(1) Rental revenues $5,620 $5,449 Property expenses 2,093 2,086 NOI 3,527 3,363 Non-Same Store NOI(2) 3,329 1,303 Segment NOI $6,856 $4,666 Total Property Portfolio NOI $28,581 $21,056 (1) See page 30 for the Same Store vs. Non-Same Store properties (2) Includes expenses associated with the Company’s in house asset management division.
RECONCILIATION TO PROPERTY PORTFOLIO NOI 32 $ IN THOUSANDS Three months ended 3/31/2020 Diversified Portfolio Office Retail Multifamily Total NOI - Cash Basis $2,912 $12,635 $4,994 $20,541 GAAP Adjustments 396 660 29 1,085 Elimination of intercompany rent (72) - - (72) NOI $3,236 $13,295 $5,023 $21,554 Town Center of Virginia Beach NOI - Cash Basis $3,503 $1,944 $1,812 $7,259 GAAP Adjustments 40 (155) 21 (94) Elimination of intercompany rent (279) (65) - (344) NOI $3,264 $1,724 $1,833 $6,821 NOI Diversified Portfolio $3,236 $13,295 $5,023 $21,554 Town Center of Virginia Beach 3,264 1,724 1,833 6,821 Unstabilized Properties - 206 - 206 Total Property Portfolio NOI $6,500 $15,225 $6,856 $28,581
RECONCILIATION TO GAAP NET INCOME 33 $ IN THOUSANDS Three months ended 3/31/2020 Total Rental General Contracting & Office Retail Multifamily Properties Real Estate Services Total Segment revenues $ 10,192 $ 20,411 $ 11,686 $ 42,289 $ 47,268 $ 89,557 Segment expenses 3,692 5,186 4,830 13,708 45,550 59,258 Net operating income $ 6,500 $ 15,225 $ 6,856 $ 28,581 $ 1,718 $ 30,299 Depreciation and amortization (14,279) Amortization of right-of-use assets - finance leases (147) General and administrative expenses (3,793) Acquisition, development and other pursuit costs (27) Impairment charges (158) Interest income 7,226 Interest expense (7,959) Interest expense - finance leases (229) Change in fair value of interest rate derivatives (1,736) Other income (loss) benefit 58 Provision for unrealized credit losses (377) Income tax benefit 257 Net income $ 9,135 Net loss attributable to noncontrolling interest in investment entities 92 Preferred stock dividends (1,067) Net income attributable to AHH and OP unit holders $ 8,160
