R E I T w o r l d
N o v e m b e r 2 0 2 0
2
F O R W A R D L O O K I N G S T A T E M E N T S / O T H E R I N F O R M A T I O N
Armada Hoffler
Armada Hoffler Properties ("AHH"," the "Company," "we," or "us") has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (the "SEC") with respect to which this communication relates. Before you invest, you should read the prospectus in that registration statement and the prospectus supplement, when available, for any potential offering and the other documents we have filed or will file with the SEC for more complete information about us or such offering. You may get these documents for free by visiting EDGAR on the SEC website at http://www.sec.gov. Alternatively, by contacting us at InvestorRelations@ArmadaHoffler.com or any underwriter or any dealer participating in any such offering, we or such underwriter or dealer will arrange to send you the prospectus and related prospectus supplement (when available) if you request it. This presentation has been prepared solely for informational purposes and does not constitute an offer to sell or the solicitation of an offer to buy securities, nor shall there be any sale of securities in any state or jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
Certain matters within this presentation are discussed using forward-looking language as specified in the Private Securities Litigation Reform Act of 1995, and, as such, may involve known and unknown risks, uncertainties and other factors that may cause the actual results or performance to differ from those projected in the forward-looking statements. When used, the words "anticipate," "believe," "expect," "intend," "may," "might," "plan," "seeks," "estimate," "project," "should," "will," "result," and similar expressions, which do not relate solely to historical matters, are intended to identify forward-looking statements. The forwarding-looking statements include, but are not limited to, comments relating to the Company's development pipeline, the Company's construction and development businesses, including backlog, timing of deliveries and estimated costs, and expected financing activities. 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; (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; and (e) 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 in other filings the Company makes from time to time with the SEC, including the Company's Quarterly Reports on Form 10-Q for the quarters ended March 31, 2020, June 30, 2020, and September 30, 2020.
All information within this presentation is as of September 30, 2020 unless otherwise noted.
Use of Non-GAAP Financial Measures and other Definitions
This presentation contains certain financial measures not calculated and presented in accordance with generally accepted accounting principles in the U.S. ("GAAP") and other terms that have particular definitions when used by us. The definitions and calculations of these non-GAAP financial measures and other terms may differ from those used by other real estate investment trusts and, accordingly, may not be comparable. Please refer to the definitions and calculations of these terms and reconciliations to the most directly comparable GAAP measures included later in this presentation.
CORPORATE OVERVIEW | 3 |
As of 9/30/20 unless otherwise noted
Armada Hoffler is a vertically integrated, self-managed REIT based in Virginia Beach, VA with 40+ years
of experience developing, acquiring and managing high-quality,institutional-grade properties
~$1.0B
EQUITY MARKET CAP(1)
~3.7M
RETAIL RSF
~1.6M
OFFICE RSF
2,344
MULTIFAMILY UNITS(2)
1,183
STUDENT HOUSING BEDS
~95%
CORE OCCUPANCY
~14%
MANAGEMENT / BOARD
OWNERSHIP
-
Founded in 1979 by Daniel A. Hoffler, Armada Hoffler operates three complementary business segments - Asset Management, Property
Development & Construction - Owns 55 high-quality properties across the Mid-Atlantic & Southeast
- Development focuses on high-occupancy, superior tenant quality & consistent cash flow
- Provides general contracting & construction services across property types
- Significant experience with large-scale projects and public / private partnerships
Harbor Point | Town Center | |
Baltimore, MD | Virginia Beach, VA | |
- Based on AHH closing stock price of $10.88 as of November 10, 2020.
- Includes Residences at Annapolis Junction and Edison Apartments which were acquired subsequent to 9/30/20.
RECENT DEVELOPMENTS | 4 |
RESIDENCES AT
ANNAPOLIS JUNCTION
11/2/20
Off-market acquisition of 416 luxury apartments in Annapolis Junction, MD
REDEVELOPMENT OPPORTUNITY
10/26/20
Recaptured two prime redevelopment
sites, formerly Regal Cinemas
3 acres in Town Center of Virginia Beach
10 acres adjacent to James Madison University
EDISON APARTMENTS | SOLIS GAINESVILLE |
10/5/20 | 9/9/20 |
Off-market acquisition of 174 | Announced development of $52M |
contemporary apartments in Richmond, VA | multifamily development in Gainesville, GA |
PORTFOLIO OVERVIEW
As of 9/30/20
RETAIL | OFFICE | |
~3.7M RSF | ~1.3M RSF | |
~$34.9M ABR | ||
~$59.5M ABR | ||
96.7% OCCUPIED | ||
94.2% OCCUPIED | ||
DEVELOPMENT
MULTIFAMILY | MIXED-USE | ||||
Solis Gainesville | Southern Post | ||||
223 units | 138 units | ||||
40,000 sf retail | |||||
Chronicle Mill | 95,000 sf office | ||||
238 units | |||||
Ten Tryon | |||||
OFFICE | 180,000 sf office | ||||
Wills Wharf | 40,000 sf retail | ||||
325,000 sf |
MULTIFAMILY | STUDENT HOUSING | |
2,344 UNITS(1) | 1,183 BEDS | |
~$32.9M AQR | ~$14.9M AQR | |
98.6% OCCUPIED | 91.4% OCCUPANCY |
5
MID-ATLANTIC & SOUTHEAST FOCUS
(1) Unit count includes Residences at Annapolis Junction or Edison Apartments which were acquired subsequent to 9/30/20.
EVOLVING PORTFOLIO - GAAP NOI | 6 |
3 Q 2 0 ( 1 ) ( 2 )
23%
42%
29%
6%
F U T U R E P O R T O L I O W I T H
A N N O U N C E D D E V E L O P M E N T
S TA B I L I Z E D ( 1 )
35% 28%
7%
30%
Multifamily | Office | Retail | Entertainment and |
Mixed-Use Retail |
- Excludes all 3Q impact and future opportunity of 2 Regal properties which were terminated in October 2020.
- Excludes Residences at Annapolis Junction or Edison Apartments which were acquired subsequent to 9/30/20.
DEVELOPMENT AND REDEVELOPMENT PIPELINE | 7 |
Schedule(1) | |||||||||||||||
Property | Estimated | (1) | % Leased or | Construction | Initial | Stabilized | Estimated | Loan | Cost to | AHH Ownership % | Anchor Tenants | ||||
Projects | Type | LOI | Start | Occupancy | Operation(2) | Cost(1) | Commitment | Date | |||||||
Under Development | |||||||||||||||
Solis Gainesville | Multifamily | 223 units | - | 3Q20 | 2Q22 | 3Q23 | $52,000 | $31,000 | $8,000 | 95% | NA | ||||
Gainesville, GA | |||||||||||||||
Total Projects Under Development | $52,000 | $31,000 | $8,000 | ||||||||||||
Delivered Not Stabilized | |||||||||||||||
Premier Retail (Town Center Phase VI) | Retail | 39,000 sf | 76% | 4Q16 | 3Q18 | 4Q21 | $18,000 | $8,000 | $16,000 | 100% | Williams-Sonoma, Pottery Barn | ||||
Virginia Beach, VA | |||||||||||||||
Summit Place (Meeting Street) | Multifamily | 357 beds | 98% | 3Q17 | 3Q20 | 4Q20 | 56,000 | 35,000 | 56,000 | 90% | NA | ||||
Charleston, SC | |||||||||||||||
Wills Wharf | Office | 325,000 sf | 53% | 3Q18 | 2Q20 | 2Q22 | 120,000 | 76,000 | 106,000 | 100% | Canopy by Hilton, EY | ||||
Baltimore, MD | |||||||||||||||
Total Projects Delivered Not Stabilized | $194,000 | $119,000 | $178,000 | ||||||||||||
Predevelopment or On Hold | |||||||||||||||
Chronicle Mill | 238 units / | (3) | |||||||||||||
Multifamily | - | TBD | TBD | TBD | TBD | TBD | $5,000 | 85% | NA | ||||||
Belmont, NC | 10,000 sf | ||||||||||||||
Southern Post | 138 units / | (4) | |||||||||||||
Mixed-use | - | TBD | TBD | TBD | TBD | TBD | 10,000 | 100% | TBD | ||||||
Roswell, GA | 137,000 sf | ||||||||||||||
Ten Tryon | Mixed-use | 220,000 sf | 38% | TBD | TBD | TBD | TBD | TBD | 9,000 | (3) | Publix, Fortune 100 office tenant | ||||
Charlotte, NC | 80% | ||||||||||||||
$24,000 |
Property | % Leased or | Out of | Construction | Anticipated | Restabilized | Estimated | Cost to Date | Projected | |||||
Redevelopment | Type | LOI | Service | Start | Completion | Operation(2) | Cost(1) | ROI | |||||
The Cosmopolitan | Multifamily | 96% | 0 units | 1Q18 | 4Q20 | 4Q20 | $13,000 | $13,000 | 9% | ||||
Virginia Beach, VA | |||||||||||||
Apex Entertainment Building | |||||||||||||
(Former Dick's Sporting Goods) | Mixed-use | 100% | 84,000 sf | 1Q20 | 4Q20 | 1Q21 | $8,000 | $6,300 | 7% | ||||
Virginia Beach, VA | |||||||||||||
Columbus Village II Regal Site | Mixed-use | 3 acres of mixed-use opportunity | |||||||||||
Virginia Beach, VA | Anticipate 250 multifamily units and 30,000 square feet of mixed-use retail | ||||||||||||
Harrisonburg Regal Site | Mixed-use | 10 acres of mixed-use opportunity | |||||||||||
Harrisonburg, VA | Anticipate 200 multifamily units and 50,000 square feet of mixed-use retail | ||||||||||||
Total Projects Under Redevelopment | $21,000 | $19,300 | 8% | ||||||||||
- Represents estimates that may change as the development and redevelopment process proceeds.
- First fully-stabilized quarter. See same store definition on page 32.
- Majority interest in joint venture with preferred return.
- Acquired remaining 20% ownership subsequent to quarter end.
Solis Gainesville | 8 |
$52M 223
total development cost
multifamily units
Located an hour north of Atlanta, GA, Solis Gainesville will be a $52 million multifamily development joint-venture with our partners, Terwilliger Pappas. This 223-unit development is expected to commence construction during the third quarter of 2020 with delivery beginning by the end of 2021.
Chronicle Mill | 9 |
Chronicle Mill is a 117-year-old mill with a vision of revitalization into a mixed-use project. Located just outside of Charlotte, North Carolina, the project will include 238 apartment units and 10,000 square feet of retail space. A portion of the site is expected to be simultaneously developed into townhomes by another developer.
Belmont, NC | 239 | 10,000 | ||
location | apartment units | square feet of retail | ||
Ten Tryon
North Tryon
The North Tryon Vision Plan centers on creating a district that will attract, retain and strengthen creative industries, innovative arts and cultural and educational institutions. Together, these forces will advance the economy and jobs of the future. Strategically positioned in the heart of Charlotte, North Tryon will connect the thriving core of Uptown to the countless opportunities of the North End and Applied Innovation Corridor, as well as link together the unique and diverse First and Fourth Wards.
10
175,000
square feet of Class A office space
Fortune 100 Tenant
54,000 square feet of office under LOI
Publix
30,000 square feet street-level under LOI
Southern Post - Roswell | 11 |
Roswell Town Center is a mixed-use project expected to total 270,000 square feet. The center will include 41,000 square feet of retail, 95,000 square feet of office and 138 multifamily units.
Location | Square Feet |
Roswell, GA | 270,000 |
Type
Mixed-use
REDEVELOPMENT OPPORTUNITY | 12 |
C o l u m b u s V i l l a g e I I |
F o r m e r R e g a l S i t e
L o c a t e d i n t h e T o w n C e n t e r o f
FORMER | V i r g i n i a B e a c h |
3 a c r e s o f m i x e d - u s e o p p o r t u n i t y | |
2 5 0 m u l t i f a m i l y u n i t s | |
3 0 , 0 0 0 s f o f m i x e d - u s e r e t a i l |
H a r r i s o n b u r g R e g a l
L o c a t e d i n H a r r i s o n b u r g , V A
A d j a c e n t t o J a m e s M a d i s o n
U n i v e r s i t y
1 0 a c r e s o f m i x e d - u s e o p p o r t u n i t y
FORMER
2 0 0 m u l t i f a m i l y u n i t s
5 0 , 0 0 0 s f o f m i x e d - u s e r e t a i l
2020 DISPOSITION/ACQUISITION | 13 | |||||
D I S P O S I T I O N S | ||||||
Property | Anchor(s) | Sold | Under Contract | Prospective | ||
7 Retail Properties | Harris Teeter/Food Lion | 90.0M | ||||
Hanbury Walgreens | Walgreens | 7.3M | ||||
Oakland Marketplace-2020 | Kroger | 5.8M | ||||
Hanbury 7-Eleven-2020 | 7-Eleven | 2.9M | ||||
Other Retail Prospects-2021 | Various | ~$30.0M | ||||
Total | $97.3M | $8.7M | ~$30.0M | |||
A C Q U I S I T I O N S | ||||||
Property | Type | |||||
Residences at Annapolis Junction | Multifamily | |||||
Edison Apartments | Multifamily | |||||
Nexton Square | Mixed-Use Retail |
Acquisitions 14
THE EDISON
The Edison Apartments, located in downtown Richmond, VA. Built in 1919 as the headquarters for Dominion power, this elegant and historic high rise has been exquisitely transformed into 174 contemporary and unique apartment homes by Armada Hoffler in 2015. It has been named The Edison to reflect its history and charm. Located in the center of Richmond business/financial district.
NEXTON SQUARE
Nexton Square is an open-air lifestyle center under construction in Summerville, SC, in the greater Charleston MSA. Located at the entrance to a new 4,500-acremaster-planned community, Nexton Square serves as the retail gateway to over 10,000 new single-family and multifamily residential units with over 100,000 square feet of existing space and a 35,000 square foot expansion opportunity for local retailers, restaurants, and service providers.
ANNAPOLIS JUNCTION
The Residences at Annapolis Junction Town Center, located approximately two miles from Fort Meade in the Baltimore- Washington corridor next to the commuter rail station, is the multifamily component of a planned 18-acremixed-use, multi- asset development that will feature 17,000 square feet of retail space, a 150-room hotel and 100,000 square feet of office space upon completion of all phases.
MEZZANINE LOAN UPDATE | 15 | |||||||||||||||||
All Mezzanine projects are fully funded, no future cash requirements | ||||||||||||||||||
$ IN THOUSANDS | Schedule | (1) | ||||||||||||||||
Principal | ||||||||||||||||||
Property | % Leased | Initial | Mezzanine | Mezzanine | ||||||||||||||
Outstanding Investments | Type | Estimated(1) | or LOI | Occupancy | Loan Maturity | Interest Rate | Financing | Interest QTD | ||||||||||
Solis Apartments at Interlock | Multifamily | 349 units | NA | 4Q20 | 3Q22 | 13% | $23,000 | $847 | ||||||||||
Atlanta, GA | ||||||||||||||||||
The Interlock | Mixed-use | 300,000 sf | 77% | 4Q20 | 3Q22 | 15% | 67,000 | 2,575 | ||||||||||
Atlanta, GA | ||||||||||||||||||
Nexton Square-loan paid off during quarter | 380 | |||||||||||||||||
Total | $90,000 | $3,802 | ||||||||||||||||
Mezzanine Interest Expense | (659) | |||||||||||||||||
Net Mezzanine Interest Income | $3,143 | |||||||||||||||||
9/30/20 | ||||||||||||||||||
Principal | ||||||||||||||||||
Property | % Leased | Financing | ||||||||||||||||
AHH Investment to Acquisitions | Type | Estimated(1) | or LOI | Outstanding | Acquisition Status | |||||||||||||
Nexton Square-Phase I | Mixed-use | 118,000 sf | 94% | $ | - | Exercised Discounted Purchase Option 9/22/20 | ||||||||||||
Summerville, SC | ||||||||||||||||||
The Interlock | ||||||||||||||||||
Delray Plaza (Whole Foods)(2) | Retail | 83,000 sf | 100% | 12,000 | Signed LOI to acquire property | |||||||||||||
Delray Beach, FL | Atlanta, GA | |||||||||||||||||
The Residences at Annapolis Junction(2) | Multifamily | 416 units | 96% | 36,000 | Acquired 10/30/20 |
Annapolis Junction, MD
- Represents estimates that may change as the development process proceeds
- Stopped GAAP recognition of mezzanine income as of 4/1/20
GENERAL CONTRACTING AND REAL ESTATE SERVICES | 16 |
2020 Guidance Midpoint
Construction Gross Profit | $7.6M |
Third-Party Construction Backlog | |
As of 09/30/20 | $123M |
3rd Party Gross Profit⁽¹⁾
Millions | $9 |
$8 | |
$7 | |
$6 |
$5 $4 $3 $2 $1 $0
2013 | 2014 | 2015 | 2016 | 2017 | 2018⁽²⁾ | 2019 | 2020E |
Volume
Millions | $300 | |||||||||||
$250 | ||||||||||||
$200 | ||||||||||||
$150 | InternalVolume⁽¹⁾ | |||||||||||
$100 | 3rd Party Volume | |||||||||||
$50 | ||||||||||||
$0 | ||||||||||||
2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020E |
- No profit recognized on internal volume
- Includes $3.4M sale of distribution center
BALANCE SHEET PHILOSOPHY | 17 |
LIQUIDITY | WEIGHTED AVERAGE INTEREST RATE | ||||||||||||||||||||||||||||||||||||||||||||
3Q20 | 4.5% | ||||||||||||||||||||||||||||||||||||||||||||
2Q20 | 4.0% | ||||||||||||||||||||||||||||||||||||||||||||
1Q20 | 3.5% | ||||||||||||||||||||||||||||||||||||||||||||
3.0% | |||||||||||||||||||||||||||||||||||||||||||||
- | 50,000 | 100,000 | 150,000 | 200,000 | 250,000 | 300,000 | |||||||||||||||||||||||||||||||||||||||
Cash | LOC Availability | Construction Loans | 2.5% | ||||||||||||||||||||||||||||||||||||||||||
2.0% | |||||||||||||||||||||||||||||||||||||||||||||
CORE DEBT/CORE EBITDA | |||||||||||||||||||||||||||||||||||||||||||||
4Q18 | 1Q19 | 2Q19 | 3Q19 | 4Q19 | 1Q20 | 2Q20 | 3Q20 | ||||||||||||||||||||||||||||||||||||||
7.0x | GAAP FIXED CHARGE COVERAGE | ||||||||||||||||||||||||||||||||||||||||||||
6.8x | |||||||||||||||||||||||||||||||||||||||||||||
6.6x | |||||||||||||||||||||||||||||||||||||||||||||
6.5X AVG | |||||||||||||||||||||||||||||||||||||||||||||
6.4x | 2.8X | 2.9X | 2.3X | ||||||||||||||||||||||||||||||||||||||||||
6.2x | |||||||||||||||||||||||||||||||||||||||||||||
1Q20 | 2Q20 | 3Q20 | |||||||||||||||||||||||||||||||||||||||||||
6.0x | |||||||||||||||||||||||||||||||||||||||||||||
5.8x | |||||||||||||||||||||||||||||||||||||||||||||
5.6x | |||||||||||||||||||||||||||||||||||||||||||||
4Q18 | 1Q19 | 2Q19 | 3Q19 | 4Q19 | 1Q20 | 2Q20 | 3Q20 |
COVID-19 OVERALL COLLECTIONS(2) | 18 |
AS OF OCTOBER 27, 2020 | |
$ in Thousands |
COLLECTIONS BY SECTOR | ||||||||
OFFICE | MULTIFAMILY | RETAIL | TOTAL | |||||
$ | % | $ | % | $ | % | $ | % | |
$ 9,811 | 100% | $ 10,527 | 99% | $ 12,030 | 72% | $ | 62,368 | 87% |
$ 9,895 | 100% | $ 12,187 | 98% | $ 15,259 | 93% | $ | 37,341 | 96% |
$ 3,349 | 100% | $ 4,215 | 97% | $ 5,190 | 94% | $ | 12,754 | 96% |
3 Q 2 0
C O L L E C T I O N S ( 4 )
96%2%
2%
Collected
Outstanding
3 Q 2 0 T O P 2 0
C O L L E C T I O N S ( 1 ) ( 4 )
99%
1%
- Excludes 2 Regal leases which were terminated subsequent to 9/30/20.
- Data reported relates to rent charges and collections through 10/27/20 and does not correspond to the reporting segment classification of the properties as a whole.
- Data from second quarter supplemental package.
- As a percentage of 3Q20 rent and recovery charges due.
COVID-19 EFFECT | 19 | |||||||||||||
AS OF OCTOBER 27, 2020 | ||||||||||||||
$ in Thousands | ||||||||||||||
S I G N I F I C A N T K N O W N T E R M I N A T I O N S | ||||||||||||||
Effective | ABR per | D E F E R R E D R E N T | ||||||||||||
Tenant | Property | Date | SF Impact | ABR Impact | Leased SF | |||||||||
Bed, Bath, & Beyond | North Point Center | 1/31/2021 | 30,000 | $300,000 | $10.00 | Deferred Rent | Repayment Period | |||||||
Bed, Bath, & Beyond | Wendover Village | 1/31/2021 | 33,696 | 404,352 | 12.00 | |||||||||
Outstanding(1) | ||||||||||||||
Regal Cinemas(A) | Columbus Village II | 10/20/2020 | 51,545 | 995,334 | 19.31 | YTG 2020 | 2021 | 2022 | ||||||
Regal Cinemas(A) | Harrisonburg Regal | 10/25/2020 | 49,000 | 717,850 | 14.65 | |||||||||
$2,500 | $700 | $1,700 | $100 | |||||||||||
Bi-Lo(A) | Socastee Commons | 1/31/2021 | 46,673 | 492,400 | 10.55 | |||||||||
Total / Weighted Avg | 210,914 | $2,909,936 | $13.80 | |||||||||||
Proforma Retail 3Q20 Occupancy Assuming Vacancy of Known Terminations | 88.3% | |||||||||||||
Proforma Total 3Q20 Occupancy Assuming Vacancy of Known Terminations | 92.9% |
(A) Vacancy of tenant allows the Company to consider redevelopment of this property
Q u a r t e r - O v e r - Q u a r t e r R e n t D e f e r r a l
(1) Includes $0.1M of unsigned deferrals that are under negotiation or with the tenant for execution.
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Armada Hoffler Properties Inc. published this content on 12 November 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 16 November 2020 14:28:06 UTC