Armada Hoffler Properties, Inc. Q2 FY2025 earnings call

• Portfolio continues to deliver consistent NOI growth. - Successfully completed first debt private placement in July, raising $115 million, increasing financial flexibility and reducing interest rate risk. - Retail portfolio well-performing with backfilling of big box vacancies with higher credit retailers at higher rents. - Office portfolio essentially full at 96% occupancy with healthy interest in remaining space. - Multifamily portfolio maintained solid fundamentals with positive trends in renewals and new leases, and certain buildings leasing ahead of schedule. - Actively evaluating opportunities in real estate financing platform, including potential to bring two multifamily assets onto balance sheet.

Office: Occupancy remained high at 96.3% with positive re-leasing spreads of 11.7%. Retail: Occupancy was 94.2% with renewal spreads of 10.8%. Multifamily: Occupancy dipped to 94%, but 95% leased at Smith's Landing, renewal leases grew 4.8%, new leases 2.8%, and spreads were 4.3% in July. Property level income outperformed 2025 guidance.

• Reaffirmed full year normalized FFO guidance of $1 to $1.10 per diluted share. - Successfully executed first private placement bond issuance, raising $115 million across 3-, 5- and 7-year tranches. - Maintained alignment with updated construction activity projections.

• Forward-looking statements based on management's beliefs, assumptions, and expectations which may change due to unforeseen events or factors beyond control. - Capital markets being selective may impact balance sheet structuring. - Variability in construction activity timing affecting earnings recognition.

Q: Viktor Fediv asked about maintaining guidance and potential scenarios for lower or upper end of range, and about the potential downtime of the new office floor vacated by WeWork.

A: Shawn Tibbetts said the range is appropriate with upside from Allied in Harbor Point leasing up ahead of schedule, and that the team is early in the process of dealing with the WeWork vacated space with some interest but early to call demising details.

Q: Jana Galan asked about cap rates for multifamily asset acquisitions and disposition expectations.

A: Shawn Tibbetts said multifamily cap rates should be around 6-ish with synergy in Gainesville, and disposition cap rates are mid-6s for a 50-50 office-retail asset owned 10 years.

Q: Rob Stevenson asked about upcoming maturities of The Everly Encore and TD term loan, leverage metric expectations, and strategic dispositions.

A: Matthew Barnes-Smith said the TD term loan has a 12-month extension, The Everly has a 12-month extension option, leverage expected to come down to 7.4x-7.5x by year end depending on asset stabilization, and there's no specific target for strategic dispositions but reviewing assets for dislocation and potential redeployment of capital