AH Realty Trust, Inc. · NYSE:AHRT
AH Realty Trust — Armada Hoffler Properties — Q1 2022 Earnings Presentation
34 slides from AH Realty Trust's earnings presentation, May 3, 2022
Slide 1: 1Q22 Supplemental Financial Package
1Q22 SUPPLEMENTAL FINANCIAL PACKAGE 1 Wills Wharf, Harbor Point Baltimore
Slide 2: Forward-Looking Statements
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 May 3, 2022, which has been furnished as Exhibit 99.1 to our Form 8-K filed on May 3, 2022. The Company mak
Slide 3: Corporate Profile
CORPORATE PROFILE Armada Hoffler Properties, Inc. (NYSE: AHH) is a vertically-integrated, self-managed real estate investment trust with four decades of experience developing, building, acquiring and managing high-quality office, retail and multifamily properties located primarily in the Mid-Atlanti
Slide 4: Highlights
HIGHLIGHTS • Net income attributable to common stockholders and OP Unit holders of $9.3 million, or $0.11 per diluted share, compared to $3.1 million, or $0.04 per diluted share, for the three months ended March 31, 2021. • Funds from operations attributable to common stockholders and OP Unit holder
Slide 5: 2022 Outlook & Assumptions
2022 OUTLOOK & ASSUMPTIONS $ IN MILLIONS OUTLOOK LOW HIGH TOTAL NOI $144.1 $145.1 CONSTRUCTION SEGMENT GROSS PROFIT $7.3 $8.3 G&A EXPENSES $15.8 $16.3 INTEREST INCOME $14.7 $15.1 INTEREST EXPENSE(1) $34.3 $35.0 NORMALIZED FFO PER DILUTED SHARE $1.15 $1.19 (1) Includes the interest expense on finance
Slide 6: Summary Information
SUMMARY INFORMATION $ IN THOUSANDS, EXCEPT PER SHARE Three months ended OPERATIONAL METRICS 3/31/2022 12/31/2021 9/30/2021 6/30/2021 Net income attributable to common stockholders and OP unitholders $9,289 $361 $4,861 $5,568 Net income per diluted share attributable to common stockholders and OP uni
Slide 7: Summary Income Statement
SUMMARY INCOME STATEMENT $ IN THOUSANDS, EXCEPT PER SHARE Three months ended 3/31/2022 3/31/2021 Revenues (Unaudited) Rental Revenues $54,635 $45,741 General Contracting Revenues 24,650 35,563 Total Revenues 79,285 81,304 Expenses Rental Expenses 12,669 10,832 Real Estate Taxes 5,404 5,306 General C
Slide 8: FFO, Normalized FFO & AFFO
FFO, NORMALIZED FFO & AFFO(1) $ IN THOUSANDS, EXCEPT PER SHARE Three months ended (Unaudited) 3/31/2022 12/31/2021 9/30/2021 6/30/2021 Funds From Operations Net income attributable to AHH and OP unitholders $9,289 $361 $4,861 $5,568 Net Income per diluted share $0.11 $0.00 $0.06 $0.07 Depreciation a
Slide 9: Net Asset Value Component Data
NET ASSET VALUE COMPONENT DATA $ IN THOUSANDS Stabilized Portfolio NOI (Cash) Third-Party General Contracting and Real Estate Services Three months ended 3/31/2022 Trailing 12 Months Office(3) Retail Multifamily Total General Contracting Gross Profit $3,377 Stable Portfolio Portfolio NOI(1)(2) $11,1
Slide 10: Portfolio Summary
PORTFOLIO SUMMARY AS OF MARCH 31, 2022 SEE APPENDIX FOR FULL LIST OF PROPERTIES COMMERCIAL PORTFOLIO # of Average ABR per Leased Retail Properties - Stabilized Properties SF(1) Age Occupancy(1) ABR(1) SF(1) Town Center of Virginia Beach 9 493,961 16 96.4% $11,356,916 $23.84 Grocery Anchored 15 1,676
Slide 11: Same Store NOI by Segment
SAME STORE NOI BY SEGMENT $ IN THOUSANDS (RECONCILIATION TO GAAP LOCATED IN APPENDIX) Three months ended 3/31/2022 3/31/2021 $ Change % Change Office Revenue $10,175 $10,210 ($35) -0.3% Rental Expenses (1) 2,248 2,190 58 2.6% Real Estate Taxes 1,314 1,294 20 1.5% Net Operating Income $6,613 $6,726 (
Slide 12: Debt to Adjusted EBITDA
DEBT TO ADJUSTED EBITDA $ IN THE THOUSANDS SEE APPENDIX FOR CALCULATIONS AND RECONCILIATION Three months ended 3/31/2022(2) Stabilized Portfolio Adjusted EBITDA $36,493 Stabilized Portfolio Debt $812,703 Stabilized Portfolio Debt/ Stabilized Portfolio Adjusted EBITDA 5.6x Total Adjusted EBITDA $38,5
Slide 13: Debt Information
DEBT INFORMATION(1) $ IN THOUSANDS Debt Maturities $350,000 4.5% 3.8% 4.0% $300,000 3.6% 3.5% $250,000 2.9% 3.0% 3.0% 2.6% $200,000 2.5% 2.2% $150,000 2.0% 1.5% $100,000 1.0% $50,000 0.5% $0 0.0% 2022 2023 2024 2025 2026 Thereafter Debt Maturing Weighted Average Interest Rate Total Debt Composition
Slide 14: Outstanding Debt
OUTSTANDING DEBT $ IN THOUSANDS Debt Maturities & Principal Payments Effective Rate as of Outstanding as Debt Stated Rate 3/31/2022 Maturity Date 2022 2023 2024 2025 2026 Thereafter of 3/31/2022 Secured Notes Payable - Stabilized Debt Marketplace at Hilltop 4.42% 4.42% Oct-2022 $9,600 $9,600 1405 Po
Slide 15: Capitalization & Financial Ratios
CAPITALIZATION & FINANCIAL RATIOS $ IN THOUSANDS AS OF MARCH 31, 2022 Debt % of Total Principal Balance Unsecured credit facility 6% $65,000 Unsecured term loans 17% 205,000 Mortgages payable 77% 909,296 Total debt $1,179,296 Equity 49% Liquidation Preferred Equity Shares Value Per Share Total Liqui
Slide 16: Development Pipeline
DEVELOPMENT PIPELINE $ IN THOUSANDS Schedule (1) % Leased Construction Initial Stabilized Estimated Loan Cost to AHH Projects Property Type Estimated Size (1) Anchor Tenants or LOI Start Occupancy Operation(2) Cost(1) Commitment Date Ownership % Predevelopment Ten Tryon (3) Mixed-use TBD - TBD TBD T
Slide 17: Preferred Investments/Mezzanine
PREFERRED INVESTMENTS/MEZZANINE $ IN THOUSANDS AS OF MARCH 31, 2022 Schedule (1) Property Estimated % Leased Initial Loan QTD Interest Type Size (1) or LOI Occupancy Loan Maturity Interest Rate Balance Income (2) Outstanding Investments The Interlock Mixed-use 300,000 sf 90% 1Q21 4Q24 15% $78,561 $2
Slide 18: Third-Party Construction
THIRD-PARTY CONSTRUCTION $ IN THOUSANDS Trailing 4 Q1 2022 Q4 2021 Q3 2021 Q2 2021 Quarters Revenue $24,650 $20,463 $17,502 $18,408 $81,023 Expense (23,821) (19,750) (15,944) (18,131) (77,646) Gross Profit $829 $713 $1,558 $277 $3,377 Operating Margin 3.4% 3.5% 8.9% 1.5% 4.2% Backlog as of Q1 2022 B
Slide 19: Acquisitions & Dispositions
ACQUISITIONS & DISPOSITIONS $ IN THOUSANDS ACQUISITIONS Purchase Cash Cap Purchase Properties Location Square Feet/Units Anchor Tenants Price Rate Date 2022 482,000 / 103 units $273,000 6.1% Exelon Building Baltimore, MD 482,000 / 103 units 273,000 (1) 6.1% 1Q22 Exelon Generation / Constellation 202
Slide 20: Top 20 Tenants by ABR
TOP 20 TENANTS BY ABR(1) $ IN THOUSANDS AS OF MARCH 31, 2022 Commercial Portfolio(1) Number Lease Annualized % of Total Annualized Tenant of Leases Expiration Base Rent Base Rent Exelon 1 2036 $ 14,149 7.8% Morgan Stanley (2) 1 2027 5,817 3.2% Harris Teeter/Kroger 6 2023 - 2035 3,740 2.1% Clark Nexs
Slide 21: Lease Summary
LEASE SUMMARY OFFICE Renewals Number of Net Rentable GAAP Releasing Cash Releasing Wtd Average TI & LC Quarter Leases Signed SF Signed Spread Spread Lease Term (yrs) TI & LC per SF Q1 2022 5 22,985 11.3% 2.6% 4.9 $321,154 $13.97 Q4 2021 1 23,267 8.3% -3.8% 5.3 515,175 22.14 Q3 2021 1 1,400 -5.0% -13
Slide 22: Lease Expirations
LEASE EXPIRATIONS(1) AS OF MARCH 31, 2022 OFFICE % Portfolio Net % of Leases Square Footage Rentable Portfolio Year Expiring Expiring Square Feet ABR ABR Available - 49,225 2.7% $ - - M-T-M 4 2,743 0.2% 88,449 0.2% 2022 8 11,176 0.6% 361,047 0.7% 2023 12 92,847 5.2% 2,565,713 5.0% 2024 14 150,495 8.
Slide 23: Appendix: Definitions & Reconciliations
APPENDIX DEFINITIONS & RECONCILIATIONS Town Center 23 Virginia Beach, VA
Slide 24: Definitions
DEFINITIONS 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 expend
Slide 25: Definitions
DEFINITIONS ANNUALIZED QUARTERLY RENT: For the properties in our multifamily portfolio, we calculate annualized quarterly rent (“AQR”) by multiplying (a) revenue for the quarter ended by (b) 4. FUNDS FROM OPERATIONS: We calculate Funds From Operations (“FFO”) in accordance with the standards establi
Slide 26: Definitions
DEFINITIONS NET RENTABLE SQUARE FOOTAGE: We define net rentable square footage for each of our retail & office properties as the sum of (a) the square footage of existing leases, plus (b) for available space, management’s estimate of net rentable square footage based, in part, on past leases. The ne
Slide 27: Definitions
DEFINITIONS 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
Slide 28: Property Portfolio
PROPERTY PORTFOLIO AS OF MARCH 31, 2022 Year Built / ABR per Retail Properties - Stabilized Location Redeveloped SF(1) Occupancy(1) ABR(1) Leased SF(1) Anchor Tenant(s) Town Center of Virginia Beach 249 Central Park Retail Virginia Beach, VA 2004 92,400 94.2% $2,392,768 $27.49 Cheesecake Factory, Br
Slide 29: Property Portfolio Cont.
PROPERTY PORTFOLIO CONT. AS OF MARCH 31, 2022 Office Properties- Stabilized Location SF(1) Year Built Occupancy(1) ABR(1) ABR per Leased SF(1) Anchor Tenants Town Center of Virginia Beach 4525 Main Street Virginia Beach, VA 235,088 2014 100.0% $7,075,702 $30.10 Clark Nexsen, Anthropologie, Mythics A
Slide 30: Reconciliation of Debt & EBITDA
RECONCILIATION OF DEBT & EBITDA $ IN THOUSANDS Three months ended 3/31/2022 12/31/2021 9/30/2021 6/30/2021 Property Net Operating Income $36,562 $32,270 $31,301 $30,618 Property Other Income (expense), net 104 (74) (185) (180) Amortization of Right of Use Assets (278) (278) (278) (278) Impairment of
Slide 31: Capital Expenditures
CAPITAL EXPENDITURES $ IN THOUSANDS AS OF MARCH 31, 2022 QUARTER TO DATE(1) Furniture Leasing Lease Tenant Land Building Fixtures & Total Second Commissions Incentive Improvements Improvements Improvements Equipment Generation Capex Retail $534 - $1,587 $234 $1,981 - $4,336 Office 111 - 427 - 602 -
Slide 32: Reconciliation to Property Portfolio NOI
RECONCILIATION TO PROPERTY PORTFOLIO NOI $ IN THOUSANDS Three months ended 3/31 2022 2021 Office Same Store Rental revenues $10,175 $10,210 Property expenses 3,562 3,484 NOI 6,613 6,726 Non-Same Store NOI(1) 4,766 676 Segment NOI $11,379 $7,402 Retail Same Store Rental revenues $18,447 $17,112 Prope
Slide 33: Reconciliation to GAAP Net Income
RECONCILIATION TO GAAP NET INCOME $ IN THOUSANDS Three months ended 3/31/2022 General Contracting Total Rental & Real Estate Office Retail Multifamily Properties Services Total Segment revenues $ 17,023 $ 21,430 $ 16,182 $ 54,635 $ 24,650 $ 79,285 Segment expenses 5,644 5,739 6,690 18,073 23,821 41,
Slide 34: Reconciliation of Net Income to Adjusted EBITDA
RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA $ IN THOUSANDS Three months ended 3/31/2022 12/31/2021 9/30/2021 6/30/2021 Net income attributable to common stockholders and OP unitholders $9,289 $361 $4,861 $5,568 Excluding: Depreciation and amortization 18,557 16,616 16,886 17,285 Loss (gain) on r
Armada Hoffler Properties — Q1 2022 Earnings Presentation on 6ix