Ah Realty Trust, Inc. · NYSE:AHRT
Ah Realty Trust — Armada Hoffler Properties — Q1 2023 Earnings Presentation
36 slides from Ah Realty Trust's earnings presentation, May 9, 2023
Slide 1: 1Q23 Financial Supplemental Package
………………………………. 1Q23 FINANCIAL SUPPLEMENTAL PACKAGE 1 Harbor Point in Baltimore, MD
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 9, 2023, which has been furnished as Exhibit 99.1 to our Form 8-K furnished on May 9, 2023. The Company
Slide 3: Corporate Profile
CORPORATE PROFILE Armada Hoffler (NYSE: AHH) is a vertically-integrated, self-managed real estate investment trust with over four decades of experience developing, building, acquiring, and managing high-quality office, retail, and multifamily properties located primarily in the Mid-Atlantic and Sout
Slide 4: Highlights
HIGHLIGHTS • Net income attributable to common stockholders and OP Unit holders of $2.4 million, or $0.03 per diluted share, compared to $9.3 million, or $0.11 per diluted share, for the three months ended March 31, 2022. • Funds from operations attributable to common stockholders and OP Unit holder
Slide 5: 2023 Outlook & Assumptions
2023 OUTLOOK & ASSUMPTIONS OUTLOOK(1) LOW HIGH PORTFOLIO NOI $159.8M $160.8M CONSTRUCTION SEGMENT PROFIT $11.8M $12.8M G&A EXPENSES $17.3M $18.0M INTEREST INCOME $11.9M $12.5M INTEREST EXPENSE(2) $45.5M $46.1M NORMALIZED FFO PER DILUTED SHARE $1.23 $1.27 (1) See appendix for definitions. Ranges excl
Slide 6: Summary Information
SUMMARY INFORMATION $ IN THOUSANDS, EXCEPT PER SHARE Three Months Ended OPERATIONAL METRICS 3/31/2023 12/31/2022 9/30/2022 6/30/2022 Net Income Attributable to Common Stockholders and OP Unitholders $2,376 $11,517 $33,899 $27,752 Net Income per Diluted Share Attributable to Common Stockholders and O
Slide 7: Summary Income Statement
SUMMARY INCOME STATEMENT $ IN THOUSANDS, EXCEPT PER SHARE Three Months Ended 3/31/2023 3/31/2022 Revenues (Unaudited) Rental Revenues $56,218 $54,635 General Contracting and Real Estate Services Revenues 84,238 24,650 Interest Income 3,719 3,568 Total Revenues 144,175 82,853 Expenses Rental Expenses
Slide 8: Summary Balance Sheet
SUMMARY BALANCE SHEET $ IN THOUSANDS As Of 3/31/2023 12/31/2022 Assets (Unaudited) Real Estate Investments: Income Producing Property $1,894,941 $1,884,214 Held for Development 6,294 6,294 Construction in Progress 61,513 53,067 Accumulated Depreciation (344,081) (329,963) Net Real Estate Investments
Slide 9: FFO, Normalized FFO & AFFO
FFO, NORMALIZED FFO & AFFO(1) $ IN THOUSANDS, EXCEPT PER SHARE Three Months Ended (Unaudited) 3/31/2023 12/31/2022 9/30/2022 6/30/2022 Funds From Operations Net Income Attributable to AHH and OP Unitholders $2,376 $11,517 $33,899 $27,752 Net Income per Diluted Share $0.03 $0.13 $0.38 $0.31 Depreciat
Slide 10: Net Asset Value Component Data
NET ASSET VALUE COMPONENT DATA $ AND SHARES/UNITS IN THOUSANDS Stabilized Portfolio NOI (Cash) Liabilities(4) Three months ended 3/31/2023 As of 3/31/2023 Office(3) Retail Multifamily Total Mortgages and Notes Payable(5) $1,117,424 Stable Portfolio Accounts Payable and Accrued Liabilities 19,051 Por
Slide 11: Debt to Adjusted EBITDA
DEBT TO ADJUSTED EBITDA $ IN THOUSANDS SEE APPENDIX FOR DEFINITIONS, CALCULATIONS, AND RECONCILIATIONS Three Months Ended 3/31/2023 Stabilized Portfolio Adjusted EBITDA $36,784 Stabilized Portfolio Debt $801,388 Stabilized Portfolio Debt / 5.4x Stabilized Portfolio Adjusted EBITDA Total Adjusted EBI
Slide 12: Debt Management
DEBT MANAGEMENT $ IN THOUSANDS Total Debt Composition(1) Weighted Average % of Debt Interest Rate Maturity Variable vs. Fixed-Rate Debt Variable-Rate Debt (2)(3) 42.7% 4.3% 3.4 Yrs Fixed-Rate Debt (4)(5) 57.3% 3.7% 5.2 Yrs Secured vs. Unsecured Debt Unsecured Debt 45.2% 3.6% 2.7 Yrs Secured Debt 54.
Slide 13: Outstanding Debt
OUTSTANDING DEBT $ IN THOUSANDS Debt Maturities & Principal Payments Effective Rate of as Outstanding as Debt Stated Rate 3/31/2023(1) Maturity Date 2023 2024 2025 2026 2027 Thereafter of 3/31/2023 Secured Debt - Stabilized Red Mill Central 4.80% 4.80% Jun-2024 $131 $1,838 $1,969 Premier Apartments
Slide 14: Capitalization & Financial Ratios
CAPITALIZATION & FINANCIAL RATIOS $ IN THOUSANDS, EXCEPT PER SHARE AS OF MARCH 31, 2023 Debt % of Total Principal Balance Unsecured Credit Facility 9% $105,000 Unsecured Term Loans 36% 400,000 Mortgages Payable 55% 612,424 $1,117,424 Total Debt Common Liquidation Equity Preferred Equity Shares Value
Slide 15: Stabilized Portfolio Summary
STABILIZED PORTFOLIO SUMMARY AS OF MARCH 31, 2023 SEE APPENDIX FOR FULL LIST OF PROPERTIES COMMERCIAL PORTFOLIO # of Average ABR per Occupied Retail Properties Properties Net Rentable SF Age Occupancy(1) ABR(1) SF Town Center of Virginia Beach 10 618,306 15 98.3% $13,792,046 $22.69 Grocery Anchored
Slide 16: Same Store NOI by Segment
SAME STORE NOI BY SEGMENT $ IN THOUSANDS (RECONCILIATION TO GAAP LOCATED IN APPENDIX) Three Months Ended 3/31/2023 3/31/2022 $ Change % Change Office Revenue $10,750 $10,175 $575 5.7% Rental Expenses (1) 2,599 2,248 351 15.6% Real Estate Taxes 1,398 1,314 84 6.4% Net Operating Income $6,753 $6,613 $
Slide 17: Active Development Projects
ACTIVE DEVELOPMENT PROJECTS $ IN THOUSANDS Schedule (1) % Leased Initial Stabilized Estimated Loan Cost to AHH Projects Property Type Estimated Size (1) Construction Anchor Tenants or LOI Occupancy Operation(2) Cost(1) Commitment Date Ownership % Start (3) Chronicle Mill 238 units / Multifamily 98%
Slide 18: Real Estate Financing
REAL ESTATE FINANCING $ IN THOUSANDS AS OF MARCH 31, 2023 Property Estimated % Leased Initial Loan QTD Interest Type Size (1) or LOI Occupancy Loan Maturity Interest Rate Balance (2) Income/Exit Fee (3) Outstanding Investments The Interlock (4) Mixed-use 300,000 sf 91% 1Q21 4Q24 15% $82,608 $2,273 A
Slide 19: General Contracting & Real Estate Services
GENERAL CONTRACTING & REAL ESTATE SERVICES $ IN THOUSANDS Trailing 4 Q1 2023 Q4 2022 Q3 2022 Q2 2022 Quarters Revenue $84,238 $95,912 $69,024 $45,273 $294,447 Expense (81,170) (93,667) (66,252) (43,418) (284,507) Gross Profit $3,068 $2,245 $2,772 $1,855 $9,940 Operating Margin 3.6% 2.3% 4.0% 4.1% 3.
Slide 20: Net Income by Segment
NET INCOME BY SEGMENT $ IN THOUSANDS Three Months Ended 3/31/2023 General Contracting and Multifamily Real Real Estate Real Estate Office Real Estate Retail Real Estate Estate Services Financing Unallocated Total Revenues Rental Revenues $19,574 $22,438 $14,206 - - - $56,218 General Contracting and
Slide 21: Acquisitions & Dispositions
ACQUISITIONS & DISPOSITIONS $ IN THOUSANDS ACQUISITIONS Purchase Cash Cap Purchase Properties Location Square Feet/Units Anchor Tenants Price Rate Date 2022 606,181 / 103 units $299,450 6.2% Pembroke Square Virginia Beach, VA 124,181 26,450 7.7% 4Q22 Fresh Market, Nordstrom Rack, DSW Constellation E
Slide 22: Top 20 Tenants by ABR
TOP 20 TENANTS BY ABR(1) $ IN THOUSANDS AS OF MARCH 31, 2023 Commercial Portfolio Investment Grade Number Lease Annualized % of Total Annualized Tenant Rating(2) of Leases Expiration Base Rent Base Rent Constellation Energy Generation ✓ 1 2036 $14,575 8.0% Morgan Stanley ✓ 3 2028 - 2035 7,303 4.0% H
Slide 23: Lease Summary
LEASE SUMMARY OFFICE Renewals Wtd Average Number of Net Rentable SF GAAP Releasing Cash Releasing Lease Term TI & LC Quarter Leases Signed Signed Spread Spread Remaining (yrs) TI & LC per SF Q1 2023 2 3,429 10.9% 1.7% 3.5 $8,385 $2.45 Q4 2022 3 200,712 6.1% 1.9% 7.2 3,435,248 17.12 Q3 2022 3 22,374
Slide 24: Lease Expirations
LEASE EXPIRATIONS(1) AS OF MARCH 31, 2023 OFFICE Square % Portfolio Net Leases % of Portfolio Footage Rentable ABR Expiring ABR Year Expiring Square Feet Available - 66,681 3.2% $ - - M-T-M 1 0 - 20,400 - 2023 9 70,430 3.3% 1,949,197 3.2% 2024 13 141,894 6.7% 3,729,764 6.1% 2025 19 152,590 7.2% 4,77
Slide 25: Appendix: Definitions & Reconciliations
APPENDIX DEFINITIONS & RECONCILIATIONS 25Beach Town Center of Virginia Virginia Beach, VA
Slide 26: 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 expen
Slide 27: Definitions
DEFINITIONS 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 a
Slide 28: Definitions
DEFINITIONS 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 certain items, including but not limited to, acquisition, development and other pursuit costs, debt ex
Slide 29: 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 30: Property Portfolio
PROPERTY PORTFOLIO AS OF MARCH 31, 2023 Year Built / Net ABR per Retail Properties - Stabilized Location Redeveloped Rentable SF Occupancy(1) ABR(1) Occupied SF(1) Anchor Tenant(s) Town Center of Virginia Beach 249 Central Park Retail Virginia Beach, VA 2004 92,264 100.0% $2,591,278 $28.09 Cheesecak
Slide 31: Property Portfolio Cont.
PROPERTY PORTFOLIO CONT. AS OF MARCH 31, 2023 Net Rentable Office Properties- Stabilized Location SF Year Built Occupancy(1) ABR(1) ABR per Occupied SF(1) Anchor Tenant(s) Town Center of Virginia Beach 4525 Main Street Virginia Beach, VA 235,088 2014 100.0% $7,167,416 $30.49 Clark Nexsen, Anthropolo
Slide 32: Reconciliation of Debt & EBITDA
RECONCILIATION OF DEBT & EBITDA $ IN THOUSANDS Three Months Ended 3/31/2023 12/31/2022 9/30/2022 6/30/2022 Property Net Operating Income $37,846 $37,689 $35,542 $36,702 Property Other Income (Expense), Net (47) (120) (30) (190) Amortization of Right-of-Use Assets (277) (277) (278) (277) Impairment o
Slide 33: Capital Expenditures
CAPITAL EXPENDITURES $ IN THOUSANDS AS OF MARCH 31, 2023 QUARTER TO DATE(1) Leasing Lease Tenant Land Building Fixtures & Total Second Commissions Incentive Improvements Improvements(2) Improvements(2) Equipment(2) Generation Capex Retail $330 $20 $2,239 $224 $2,225 - $5,038 Office 313 - 552 - 620 -
Slide 34: Reconciliation to Property Portfolio NOI
RECONCILIATION TO PROPERTY PORTFOLIO NOI $ IN THOUSANDS Three months ended 3/31 2023 2022 Office Same Store Rental revenues $10,750 $10,175 Property expenses 3,997 3,562 NOI 6,753 6,613 Non-Same Store NOI(1) 5,623 4,766 Segment NOI $12,376 $11,379 Retail Same Store Rental revenues $21,760 $21,131 Pr
Slide 35: Reconciliation to GAAP Net Income
RECONCILIATION TO GAAP NET INCOME $ IN THOUSANDS Three Months Ended 3/31/2023 General Contracting Total Rental & Real Estate Real Estate Office (1) Retail (1) Multifamily(1) Properties Services(2) Financing(3) Total Segment revenues $ 19,574 $ 22,438 $ 14,206 $ 56,218 $ 84,238 $ 3,536 $ 143,992 Segm
Slide 36: Reconciliation of Net Income to Adjusted EBITDA
RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA $ IN THOUSANDS Three Months Ended 3/31/2023 12/31/2022 9/30/2022 6/30/2022 Net income attributable to common stockholders and OP unitholders $2,376 $11,517 $33,899 $27,752 Excluding: Depreciation and amortization 18,468 18,109 17,527 18,781 Loss (gain)
Armada Hoffler Properties — Q1 2023 Earnings Presentation on 6ix