Ah Realty Trust, Inc. · NYSE:AHRT
Ah Realty Trust — Armada Hoffler Properties — Q3 2019 Earnings Presentation
35 slides from Ah Realty Trust's earnings presentation, Oct 31, 2019
Slide 1: 2Q19 Supplemental Financial Package
2Q19 Supplemental Financial Package Thames Street Wharf
Slide 2: Table of Contents
Table of Contents 2 Forward Looking Statements 03 Corporate Profile 04 Highlights 05 2019 Outlook & Assumptions 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
Slide 3: Forward-Looking Statements
3 FORWARD-LOOKING STATEMENTS Armada Hoffler This Supplemental Financial Package should be read in conjunction with the unaudited condensed consolidated financial statements appearing in our press release dated October 31, 2019, which has been furnished as Exhibit 99.1 to our Form 8-K filed on Octobe
Slide 4: Corporate Profile
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 lo
Slide 5: Highlights
Highlights 5 • Net income attributable to common stockholders and OP Unit holders of $9.9 million, or $0.13 per diluted share, compared to $5.7 million, or $0.09 per diluted share, for the three months ended September 30, 2018. • Funds from operations attributable to common stockholders and OP Unit
Slide 6: 2019 Outlook & Assumptions
2019 Outlook & Assumptions 6 Outlook Low High Total NOI $102.8M $103.2M Construction Segment Gross Profit $4.5M $5.1M G&A expenses $12.3M $12.6M Mezzanine Interest Income (Net of Interest Expense)(1)(2) $16.3M $17.6M Interest Expense (Net of Mezzanine Interest Expense)(2) $25.1M $25.6M Normalized FF
Slide 7: Summary Information
Summary Information 7 $ in thousands, except per share data Three months ended 9/30/2019 6/30/2019 3/31/2019 12/31/2018 9/30/2018 OPERATIONAL METRICS Net income attributable to AHH and OP Unitholders $9,869 $5,992 $6,514 $4,895 $5,669 Net income attributable to AHH and OP Unitholders per diluted sha
Slide 8: Net Asset Value Component Data
Net Asset Value Component Data 8 In thousands Stabilized Portfolio NOI (Cash)(1) Third-Party General Contracting and Real Estate Services Three months ended Annualized Trailing 12 Months 9/30/2019 9/30/2019 General Contracting Gross Profit(4) $7,230 Stabilized Virginia Beach (VB) Town Center (1) Off
Slide 9: Summary Balance Sheet
Summary Balance Sheet 9 $ in thousands As of 9/30/2019 12/31/2018 Assets (Unaudited) Real estate investments: Income producing property $1,442,809 $1,037,917 Held for development 1,246 2,994 Construction in progress 129,830 135,675 Accumulated depreciation (214,146) (188,775) Net real estate investm
Slide 10: Summary Income Statement
Summary Income Statement 10 In thousands, except per share data Three months ended Nine months ended 9/30/2019 9/30/2018 9/30/2019 9/30/2018 Revenues (Unaudited) Rental revenues $42,220 $28,930 $109,507 $86,227 General contracting and real estate services revenues 27,638 19,950 66,118 63,654 Total R
Slide 11: FFO, Normalized FFO & AFFO
FFO, Normalized FFO & AFFO(1) 11 $ in thousands, except per share data Three months ended (Unaudited) 9/30/2019 6/30/2019 3/31/2019 12/31/2018 9/30/2018 Funds From Operations Net income attributable to AHH and OP Unitholders $9,869 $5,992 $6,514 $4,895 $5,669 Earnings per diluted share $0.13 $0.08 $
Slide 12: Outstanding Debt
Outstanding Debt 12 $ in thousands Debt Maturities & Principal Payments Effective Rate as Outstanding as of Debt Stated Rate of 9/30/2019 Maturity Date 2019 2020 2021 2022 2023 Thereafter 9/30/2019 Secured Notes Payable - Core Debt Greenside Apartments L+2.95% 4.97% Feb-2020 - $28,875 $28,875 1405 P
Slide 13: Debt Information
Debt Information 13 $ in thousands Debt Maturities $500,000 5.0% 4.7% $450,000 4.5% 4.1% 4.0% $400,000 4.0% 4.0% 3.6% $350,000 3.5% $300,000 3.0% $250,000 2.5% $200,000 2.0% $150,000 1.5% $100,000 1.0% $50,000 0.5% $0 0.0% 2019 2020 2021 2022 2023 Thereafter⁽¹⁾ Fixed-Rate Debt Variable-Rate Debt Wei
Slide 14: Core Debt to Core EBITDA
Core Debt to Core EBITDA(1) 14 $ in thousands Three months ended 9/30/2019 6/30/2019 3/31/2019 12/31/2018 9/30/2018 Net income available to be allocated to AHH and OP Unitholders $9,869 $5,992 $6,514 $4,895 $5,669 Excluding: Change in fair value of interest rate derivatives 530 1,933 1,463 2,207 (29
Slide 15: Capitalization & Financial Ratios
Capitalization & Financial Ratios 15 $ in thousands As of September 30, 2019 Debt % of Total Principal Balance Unsecured credit facility 12% $110,000 Unsecured term loans 22% 205,000 Mortgages payable 66% 636,891 Total debt $951,891 5% 16% 8% Debt Liquidation Value 40% Preferred Equity Shares Per Sh
Slide 16: Property Portfolio
Property Portfolio 16 As of September 30, 2019 Net Rentable Square Feet (RSF)(1) Development/ Development/ Town Unencumbered Core Redevelopment Core Redevelopment ABR per (2) Property Anchor Tenant(s) Location Center ABR Year Built Properties Properties Total Occupancy Leased(2) ABR(3) Leased SF(3)
Slide 17: Property Portfolio Cont.
Property Portfolio Cont. 17 As of September 30, 2019 Net Rentable Square Feet (RSF)(1) Town Unencumbered Core Development Core Development ABR per Leased Office Properties Anchor Tenant Location Center ABR Year Built Properties Properties Total Occupancy(2) Leased(2) ABR(3) SF(3) 4525 Main Street Cl
Slide 18: Development and Redevelopment Pipeline
18 Development and Redevelopment Pipeline $ in thousands Schedule (1) Property % Leased or Construction Initial Stabilized Estimated Loan Cost to AHH Estimated(1) Anchor Tenants Projects Type LOI Start Occupancy Operation(2) Cost (1) Commitment Date Ownership % Under Development Southern Post 138 un
Slide 19: Mezzanine Investments
Mezzanine Investments 19 $ in thousands Schedule (1) Principal Property % Leased Initial Mezzanine Mezzanine Mezzanine Option to Type Estimated(1) or LOI Occupancy Loan Maturity Interest Rate Financing Interest QTD Interest YTD Purchase Investments with Discounted Purchase Options Nexton Square-Phas
Slide 20: Acquisitions & Dispositions
Acquisitions & Dispositions 20 $ in thousands ACQUISITIONS Reinvested $ Value of Cash Cap Properties Location Square Feet Purchase Price (1) 1031 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 Medi
Slide 21: Construction Business Summary
Construction Business Summary 21 $ in thousands Total Contract Work in Place as Estimated Date Highlighted Projects Location Value of 9/30/2019 Backlog of Completion Interlock Commercial Atlanta, GA $87,921 $33,370 $54,551 3Q 2020 Solis Apartments at Interlock Atlanta, GA 63,208 8,025 55,183 1Q 2021
Slide 22: Same Store NOI by Segment
Same Store NOI by Segment 22 $ in thousands (Reconciliation to GAAP located in appendix on pg. 35) Three months ended Nine months ended 9/30/2019 9/30/2018 $ Change % Change 9/30/2019 9/30/2018 $ Change % Change (1) Office (Unaudited) (Unaudited) Revenue $5,394 $5,149 $245 4.8% $16,148 $15,537 $611
Slide 23: Top 10 Tenants by ABR
Top 10 Tenants by ABR(1) 23 $ in thousands As of September 30, 2019 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 $ 5,761 16.5% 4.1% Clark Nexsen 1 2029
Slide 24: Office Lease Summary
Office Lease Summary 24 Renewal Lease Summary GAAP Cash Number of Weighted Leases Net Rentable Leases Net Rentable Contractual Prior Rent Releasing Contractual Prior Rent Releasing Average Lease TI & LC Quarter Signed SF Signed Expiring SF Expiring Rent per SF per SF Spread Rent per SF per SF Spread
Slide 25: Office Lease Expirations
Office Lease Expirations 25 As of September 30, 2019 Square Footage % Portfolio % of Portfolio Annualized Base Number of Leases of Leases Net Rentable Annualized Base Annualized Rent per Leased Year Expiring Expiring(1) Square Feet Rent (1) Base Rent Square Foot Available - 44,859 3.4% $ - - $ - M-T
Slide 26: Retail Lease Summary
Retail Lease Summary 26 Renewal Lease Summary GAAP Cash Number of Weighted Leases Net Rentable Net Rentable SF Contractual Prior Rent per Releasing Contractual Prior Rent Releasing Average Lease TI & LC Quarter Signed SF Signed Leases Expiring Expiring Rent per SF SF Spread Rent per SF per SF Spread
Slide 27: Retail Lease Expirations
Retail Lease Expirations 27 As of September 30, 2019 Square Footage % Portfolio % of Portfolio Annualized Base Number of Leases of Leases Net Rentable Annualized Base Annualized Rent per Leased Year Expiring Expiring(1) Square Feet Rent (1) Base Rent Square Foot Available - 156,883 3.7% $ - - $ - M-
Slide 28: Appendix – Definitions & Reconciliations
28 Appendix Definitions & Reconciliations
Slide 29: Definitions
Definitions 29 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,
Slide 30: Definitions
Definitions 30 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 exp
Slide 31: Definitions
Definitions 31 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
Slide 32: Same Store vs. Non-Same Store Properties
32 Same Store vs. Non-Same Store Properties Three Months Ended Nine Months Ended Three Months Ended Nine Months Ended 9/30/2019 to 2018 9/30/2019 to 2018 9/30/2019 to 2018 9/30/2019 to 2018 Same Non-Same Same Non-Same Same Non-Same Same Non-Same Store Store Store Store Store Store Store Store Retail
Slide 33: Reconciliation to Property Portfolio NOI
33 Reconciliation to Property Portfolio NOI $ in thousands Three months ended 9/30 Nine months ended 9/30 2019 2018 2019 2018 Office Same Store(1) Rental revenues $5,394 $5,149 $16,148 $15,537 Property expenses 2,077 1,972 5,798 5,670 NOI 3,317 3,177 10,350 9,867 Non-Same Store NOI (2) 3,072 (94) 4,
Slide 34: Reconciliation to Property Portfolio NOI
34 Reconciliation to Property Portfolio NOI $ in thousands Three months ended 9/30/2019 Diversified Portfolio Office Retail Multifamily Total NOI - Cash Basis $2,783 $12,897 $3,921 $19,601 GAAP Adjustments 488 578 145 1,211 Elimination of intercompany rent (116) - - (116) NOI $3,155 $13,475 $4,066 $
Slide 35: Reconciliation to GAAP Net Income
Reconciliation to GAAP Net Income 35 $ in thousands Three months ended 9/30/2019 Total Rental General Contracting & Office Retail Multifamily Properties Real Estate Services Total Segment revenues $10,283 $20,780 $11,157 $42,220 $27,638 $69,858 Segment expenses 3,894 5,335 4,875 14,104 26,446 40,550
Armada Hoffler Properties — Q3 2019 Earnings Presentation on 6ix