UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

~~WASHINGTON,~~Washington, D.C. 20549



FORM			10-Q

x☑QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September~~June 30, ~~2017~~2022

¨☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period fromto

Commission ~~file number:~~File Number: 001-35908

ARMADA HOFFLER PROPERTIES, INC.

(Exact ~~Name~~name of ~~Registrant~~registrant as ~~Specified~~specified in its ~~Charter)~~

charter)

Maryland

46-1214914

(State or other jurisdiction of ~~Organization)~~incorporation or organization)

(~~IRS~~I.R.S. Employer

Identification No.)

222 Central Park Avenue

Suite 2100

~~Virginia Beach, Virginia~~

~~23462~~

Virginia Beach

Virginia

23462

(Address of ~~Principal Executive Offices)~~principal executive offices)

(Zip Code)

(757) 366-4000

(Registrant’s ~~Telephone Number, Including Area Code)~~telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $0.01 par value per share

AHH

New York Stock Exchange

6.75% Series A Cumulative Redeemable Perpetual Preferred Stock, $0.01 par value per share

AHHPrA

New York Stock Exchange

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x☒ Yes ◻☐ No

Indicate by check mark whether the Registrant has submitted electronically ~~and posted on its corporate Website, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit ~~and post~~ such files). x☒ Yes ◻☐ No

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of ~~“large~~"large accelerated filer,~~” “accelerated~~" "accelerated filer,~~” “smaller~~" "smaller reporting ~~company”~~company" and "emerging growth company" in Rule 12b-2 of the Exchange Act. ~~(Check one):~~



Large Accelerated Filer		◻ ☒		Accelerated Filer		x☐

Non-Accelerated Filer	~~◻ (Do not check if a smaller reporting company)~~☐		Smaller Reporting Company		◻ ☐
				Emerging Growth Company		x ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. x¨

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

◻☐ Yes x☒ No

As of ~~November 1, 2017,~~August 4, 2022, the ~~Registrant~~registrant had ~~44,936,652~~67,729,650 shares of common stock, $0.01 par value per share, outstanding. In addition, as of August 4, 2022, Armada Hoffler, L.P., the registrant's operating partnership subsidiary, had 20,611,190 units of limited partnership interest ("OP Units") outstanding (other than OP Units held by the registrant).

Table of Contents

ARMADA HOFFLER PROPERTIES, INC.

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTER ENDED ~~SEPTEMBER~~JUNE 30, ~~2017~~2022

Table of Contents

PART I. Financial Information

Item 1. Financial Statements

ARMADA HOFFLER PROPERTIES, INC.

Condensed Consolidated Balance Sheets

(In thousands, except par value and share data)


	June 30, 2022		December 31, 2021
	(Unaudited)
ASSETS
Real estate investments:
Income producing property	$	1,791,302	$	1,658,609
Held for development	6,294		6,294
Construction in progress	71,676		72,535
	1,869,272		1,737,438
Accumulated depreciation	(303,032)		(285,814)
Net real estate investments	1,566,240		1,451,624
Real estate investments held for sale	115,680		80,751
Cash and cash equivalents	69,731		35,247
Restricted cash	6,681		5,196
Accounts receivable, net	32,250		29,576
Notes receivable, net	139,383		126,429
Construction receivables, including retentions, net	29,107		17,865
Construction contract costs and estimated earnings in excess of billings	493		243
Equity method investments	53,260		12,685
Operating lease right-of-use assets	23,387		23,493
Finance lease right-of-use assets	46,433		46,989
Acquired lease intangible assets	107,147		62,038
Other assets	75,743		45,927
Total Assets	$	2,265,535	$	1,938,063
LIABILITIES AND EQUITY
Indebtedness, net	$	1,080,664	$	917,556
Liabilities related to assets held for sale	84,049		41,364
Accounts payable and accrued liabilities	22,886		29,589
Construction payables, including retentions	47,429		31,166
Billings in excess of construction contract costs and estimated earnings	15,075		4,881
Operating lease liabilities	31,645		31,648
Finance lease liabilities	46,325		46,160
Other liabilities	51,126		55,876
Total Liabilities	1,379,199		1,158,240



Stockholders’ equity:
Preferred stock, $0.01 par value, 100,000,000 shares authorized: 6.75% Series A Cumulative Redeemable Perpetual Preferred Stock, 9,980,000 shares authorized; 6,843,418 shares issued and outstanding as of June 30, 2022 and December 31, 2021	171,085		171,085
Common stock, $0.01 par value, 500,000,000 shares authorized; 67,729,650 and 63,011,700 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively	677		630
Additional paid-in capital	588,012		525,030
Distributions in excess of earnings	(135,942)		(141,360)
Accumulated other comprehensive gain (loss)	10,091		(33)
Total stockholders’ equity	633,923		555,352
Noncontrolling interests in investment entities	23,952		629
Noncontrolling interests in Operating Partnership	228,461		223,842
Total Equity	886,336		779,823
Total Liabilities and Equity	$	2,265,535	$	1,938,063

September 30,
2017 December 31,
2016
(Unaudited)
ASSETS
Real estate investments:
Income producing property $ 906,225
$ 894,078
Held for development 680
680
Construction in progress 62,948
13,529
969,853
908,287
Accumulated depreciation (157,932 ) (139,553 )
Net real estate investments 811,921
768,734
Cash and cash equivalents 19,721
21,942
Restricted cash 3,195
3,251
Accounts receivable, net 15,826
15,052
Notes receivable 75,522
59,546
Construction receivables, including retentions 35,923
39,433
Construction contract costs and estimated earnings in excess of billings 110
110
Equity method investments 11,169
10,235
Other assets 57,611
64,165
Total Assets $ 1,030,998
$ 982,468
LIABILITIES AND EQUITY
Indebtedness, net $ 488,609
$ 522,180
Accounts payable and accrued liabilities 14,383
10,804
Construction payables, including retentions 48,160
51,130
Billings in excess of construction contract costs and estimated earnings 5,232
10,167
Other liabilities 41,181
39,209
Total Liabilities $ 597,565
$ 633,490

Redeemable noncontrolling interest 2,000
—

Stockholders’ equity:
Preferred stock, $0.01 par value, 100,000,000 shares authorized, none issued and outstanding as of September 30, 2017 and December 31, 2016 —
—
Common stock, $0.01 par value, 500,000,000 shares authorized, 44,936,652 and 37,490,361 shares issued and outstanding as of September 30, 2017 and December 31, 2016, respectively 449
374
Additional paid-in capital 288,485
197,114
Distributions in excess of earnings (56,755 ) (49,345 )
Total stockholders’ equity 232,179
148,143
Noncontrolling interests 199,254
200,835
Total Equity 431,433
348,978
Total Liabilities and Equity $ 1,030,998
$ 982,468

See Notes to Condensed Consolidated Financial Statements.

Table of Contents

ARMADA HOFFLER PROPERTIES, INC.

Condensed Consolidated Statements of Comprehensive Income

(In thousands, except per share data)

(Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Revenues
Rental revenues	$	55,224	$	47,378	$	109,859	$	93,119
General contracting and real estate services revenues	45,273		18,408		69,923		53,971
Total revenues	100,497		65,786		179,782		147,090

Expenses
Rental expenses	12,685		11,292		25,354		22,124
Real estate taxes	5,837		5,465		11,241		10,771
General contracting and real estate services expenses	43,418		18,131		67,239		52,406
Depreciation and amortization	18,781		17,285		37,338		35,351
Amortization of right-of-use assets - finance leases	277		278		555		467
General and administrative expenses	3,617		3,487		8,325		7,508
Acquisition, development and other pursuit costs	26		32		37		103
Impairment charges	286		83		333		3,122
Total expenses	84,927		56,053		150,422		131,852
Gain on real estate dispositions, net	19,493		—		19,493		3,717
Operating income	35,063		9,733		48,853		18,955
Interest income	3,352		6,746		6,920		10,862
Interest expense	(9,371)		(8,418)		(18,402)		(16,393)

Loss on extinguishment of debt	(618)		—		(776)		—
Change in fair value of derivatives and other	2,548		314		6,730		707
Unrealized credit loss provision	(295)		(388)		(900)		(333)
Other income (expense), net	68		7		297		186
Income before taxes	30,747		7,994		42,722		13,984
Income tax benefit	20		461		321		480
Net income	30,767		8,455		43,043		14,464
Net income attributable to noncontrolling interests:
Investment entities	(128)		—		(228)		—
Operating Partnership	(6,479)		(1,429)		(8,662)		(2,240)
Net income attributable to Armada Hoffler Properties, Inc.	24,160		7,026		34,153		12,224
Preferred stock dividends	(2,887)		(2,887)		(5,774)		(5,774)
Net income attributable to common stockholders	$	21,273	$	4,139	$	28,379	$	6,450
Net income attributable to common stockholders per share (basic and diluted)	$	0.31	$	0.07	$	0.42	$	0.11
Weighted-average common shares outstanding (basic and diluted)	67,710		60,409		67,420		59,918




Comprehensive income:
Net income	$	30,767	$	8,455	$	43,043	$	14,464
Unrealized cash flow hedge gains (losses)	3,950		(469)		11,672		1,807
Realized cash flow hedge losses reclassified to net income	866		1,103		1,653		2,181
Comprehensive income	35,583		9,089		56,368		18,452
Comprehensive income attributable to noncontrolling interests:
Investment entities	(228)		—		(328)		—
Operating Partnership	(7,579)		(1,592)		(11,762)		(3,274)
Comprehensive income attributable to Armada Hoffler Properties, Inc.	$	27,776	$	7,497	$	44,278	$	15,178

Three Months Ended
September 30, Nine Months Ended
September 30,
2017 2016 2017 2016
Revenues
Rental revenues $ 27,096
$ 25,305
$ 81,083
$ 72,839
General contracting and real estate services revenues 41,201
38,552
161,391
108,555
Total revenues 68,297
63,857
242,474
181,394

Expenses
Rental expenses 6,830
5,834
19,069
16,234
Real estate taxes 2,693
2,356
7,797
7,087
General contracting and real estate services expenses 39,377
37,274
154,588
104,336
Depreciation and amortization 9,239
8,885
28,018
25,636
General and administrative expenses 2,098
2,156
7,762
6,864
Acquisition, development and other pursuit costs 61
345
477
1,486
Impairment charges 19
149
50
184
Total expenses 60,317
56,999
217,761
161,827
Operating income 7,980
6,858
24,713
19,567
Interest income 1,910
1,024
4,966
1,928
Interest expense (4,253 ) (4,124 ) (13,282 ) (11,893 )
Loss on extinguishment of debt —
(82 ) —
(82 )
Gain on real estate dispositions 4,692
3,753
8,087
30,440
Change in fair value of interest rate derivatives 87
498
300
(2,264 )
Other income 74
35
154
154
Income before taxes 10,490
7,962
24,938
37,850
Income tax provision (29 ) (16 ) (781 ) (240 )
Net income 10,461
7,946
24,157
37,610
Net income attributable to noncontrolling interests (2,973 ) (2,734 ) (7,262 ) (12,994 )
Net income attributable to stockholders $ 7,488
$ 5,212
$ 16,895
$ 24,616
Net income attributable to stockholders per share (basic and diluted) $ 0.17
$ 0.15
$ 0.41
$ 0.77
Weighted-average common shares outstanding (basic and diluted) 44,934
33,792
41,575
31,913
Dividends and distributions declared per common share and unit $ 0.19
$ 0.18
$ 0.57
$ 0.54

See Notes to Condensed Consolidated Financial Statements.

Table of Contents

ARMADA HOFFLER PROPERTIES, INC.

Condensed Consolidated ~~Statement~~Statements of Equity

(In thousands, except share data)

(Unaudited)



	Preferred stock		Common stock		Additional paid-in capital		Distributions in excess of earnings		Accumulated other comprehensive loss		Total stockholders' equity		Noncontrolling interests in investment entities		Noncontrolling interests in Operating Partnership		Total equity
Balance, December 31, 2021	$	171,085	$	630	$	525,030	$	(141,360)	$	(33)	$	555,352	$	629	$	223,842	$	779,823

Net income	—		—		—		9,993		—		9,993		100		2,183		12,276
Unrealized cash flow hedge gains	—		—		—		—		5,907		5,907		—		1,815		7,722
Realized cash flow hedge losses reclassified to net income	—		—		—		—		602		602		—		185		787
Net proceeds from issuance of common stock	—		45		65,149		—		—		65,194		—		—		65,194
Noncontrolling interest in acquired real estate entity	—		—		—		—		—		—		23,065		—		23,065
Restricted stock awards, net	—		—		1,064		—		—		1,064		—		—		1,064

Acquisitions of noncontrolling interests	—		—		(3,901)		—		—		(3,901)		—		—		(3,901)
Redemption of operating partnership units	—		—		132		—		—		132		—		(132)		—
Dividends declared on preferred stock	—		—		—		(2,887)		—		(2,887)		—		—		(2,887)
Dividends and distributions declared on common shares and units ($0.17 per share and unit)	—		—		—		(11,433)		—		(11,433)		—		(3,506)		(14,939)
Balance, March 31, 2022	171,085		675		587,474		(145,687)		6,476		620,023		23,794		224,387		868,204
Net income	—		—		—		24,160		—		24,160		128		6,479		30,767
Unrealized cash flow hedge losses	—		—		—		—		2,986		2,986		55		909		3,950
Realized cash flow hedge losses reclassified to net income	—		—		—		1		629		630		45		191		866

Net proceeds from issuance of common stock	—		—		(35)		—		—		(35)		—		—		(35)
Restricted stock awards, net	—		2		573		—		—		575		—		—		575



Distributions to noncontrolling interests	—		—		—		—		—		—		(84)		—		(84)
Contributions from noncontrolling interests	—		—		—		—		—		—		14		—		14
Dividends declared on preferred stock	—		—		—		(2,887)		—		(2,887)		—		—		(2,887)
Dividends and distributions declared on common shares and units ($0.17 per share and unit)	—		—		—		(11,529)		—		(11,529)		—		(3,505)		(15,034)
Balance, June 30, 2022	$	171,085	$	677	$	588,012	$	(135,942)	$	10,091	$	633,923	$	23,952	$	228,461	$	886,336

Table of Contents

Shares of common stock Common Stock Additional paid-in capital Distributions in excess of earnings Total stockholders' equity Noncontrolling interests Total Equity
Balance, January 1, 2017 37,490,361
$ 374
$ 197,114
$ (49,345 ) $ 148,143
$ 200,835
$ 348,978
Net income —
—
—
16,895
16,895
7,262
24,157
Net proceeds from sales of common stock 7,350,690
74
91,307
—
91,381
—
91,381
Restricted stock awards 116,704
1
1,381
—
1,382
—
1,382
Restricted stock award forfeitures (21,103 ) —
(289 ) —
(289 ) —
(289 )
Issuance of common units for acquisition of interest in real estate investment —
—
(987 ) —
(987 ) 982
(5 )
Redemption of operating partnership units —
—
(41 ) —
(41 ) (188 ) (229 )
Dividends and distributions declared —
—
—
(24,305 ) (24,305 ) (9,637 ) (33,942 )
Balance, September 30, 2017 44,936,652
$ 449
$ 288,485
$ (56,755 ) $ 232,179
$ 199,254
$ 431,433


	Preferred stock		Common stock		Additional paid-in capital		Distributions in excess of earnings		Accumulated other comprehensive loss		Total stockholders' equity		Noncontrolling interests in investment entities		Noncontrolling interests in Operating Partnership		Total equity
Balance, December 31, 2020	$	171,085	$	591	$	472,747	$	(112,356)	$	(8,868)	$	523,199	$	488	$	233,115	$	756,802

Net income	—		—		—		5,198		—		5,198		—		811		6,009
Unrealized cash flow hedge gains	—		—		—		—		1,685		1,685		—		591		2,276
Realized cash flow hedge losses reclassified to net income	—		—		—		—		798		798		—		280		1,078
Net proceeds from issuance of common stock	—		7		8,974		—		—		8,981		—		—		8,981
Restricted stock awards, net	—		1		631		—		—		632		—		—		632

Redemption of operating partnership units	—		—		131		—		—		131		—		(134)		(3)
Dividends declared on preferred stock	—		—		—		(2,887)		—		(2,887)		—		—		(2,887)
Dividends and distributions declared on common shares and units ($0.15 per share and unit)	—		—		—		(9,008)		—		(9,008)		—		(3,128)		(12,136)
Balance, March 31, 2021	171,085		599		482,483		(119,053)		(6,385)		528,729		488		231,535		760,752
Net income	—		—		—		7,026		—		7,026		—		1,429		8,455
Unrealized cash flow hedge losses	—		—		—		—		(349)		(349)		—		(120)		(469)
Realized cash flow hedge losses reclassified to net income	—		—		—		—		820		820		—		283		1,103

Net proceeds from issuance of common stock	—		11		14,105		—		—		14,116		—		—		14,116
Restricted stock awards, net	—		—		473		—		—		473		—		—		473
Acquisition of noncontrolling interest in real estate entity	—		—		(950)		—		—		(950)		146		—		(804)


Dividends declared on preferred stock	—		—		—		(2,887)		—		(2,887)		—		—		(2,887)
Dividends and distributions declared on common shares and units ($0.16 per share and unit)	—		—		—		(9,783)		—		(9,783)		—		(3,337)		(13,120)
Balance, June 30, 2021	$	171,085	$	610	$	496,111	$	(124,697)	$	(5,914)	$	537,195	$	634	$	229,790	$	767,619

See Notes to Condensed Consolidated Financial Statements.

Table of Contents

ARMADA HOFFLER PROPERTIES, INC.

Condensed Consolidated Statements of Cash Flows

(In thousands)(Unaudited)


	Six Months Ended June 30,
	2022		2021
OPERATING ACTIVITIES
Net income	$	43,043	$	14,464
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of buildings and tenant improvements	27,613		25,209
Amortization of leasing costs, in-place lease intangibles and below market ground rents - operating leases	9,725		10,142
Accrued straight-line rental revenue	(3,036)		(3,327)
Amortization of leasing incentives and above or below-market rents	(520)		(508)
Amortization of right-of-use assets - finance leases	555		467
Accrued straight-line ground rent expense	76		81
Unrealized credit loss provision	900		333
Adjustment for uncollectable lease accounts	405		562
Noncash stock compensation	2,115		1,440
Impairment charges	333		3,122
Noncash interest expense	2,143		1,329
Noncash loss on extinguishment of debt	776		—
Gain on real estate dispositions, net	(19,493)		(3,717)

Change in fair value of derivatives and other	(6,730)		(707)

Changes in operating assets and liabilities:
Property assets	(8,243)		(1,469)
Property liabilities	(2,429)		(2,968)
Construction assets	(18,005)		26,865
Construction liabilities	25,205		(34,645)
Interest receivable	(4,026)		3,967
Net cash provided by operating activities	50,407		40,640
INVESTING ACTIVITIES
Development of real estate investments	(35,478)		(19,476)
Tenant and building improvements	(8,467)		(4,817)
Acquisitions of real estate investments, net of cash received	(93,313)		(28,173)
Dispositions of real estate investments, net of selling costs	101,812		9,156
Notes receivable issuances	(20,829)		(19,796)
Notes receivable paydowns	11,545		38,490
Leasing costs	(1,836)		(1,068)
Leasing incentives	(51)		—
Contributions to equity method investments	(40,333)		(5,921)
Net cash used for investing activities	(86,950)		(31,605)
FINANCING ACTIVITIES

Proceeds from issuance of common stock, net	65,159		23,097
Common shares tendered for tax withholding	(774)		(553)
Debt issuances, credit facility and construction loan borrowings	324,096		19,119
Debt and credit facility repayments, including principal amortization	(273,698)		(18,379)
Debt issuance costs	(3,303)		(2,024)

Acquisition of NCI in consolidated RE investments	(3,901)		(804)

Distributions to noncontrolling interests	(84)		—
Contributions from noncontrolling interests	14		—
Dividends and distributions	(34,997)		(26,679)
Net cash provided by (used for) financing activities	72,512		(6,223)
Net increase in cash, cash equivalents, and restricted cash	35,969		2,812
Cash, cash equivalents, and restricted cash, beginning of period	40,443		50,430
Cash, cash equivalents, and restricted cash, end of period (1)	$	76,412	$	53,242

~~(Unaudited)~~

Nine Months Ended
September 30,
2017 2016
OPERATING ACTIVITIES
Net income $ 24,157
$ 37,610
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of buildings and tenant improvements 19,385
17,055
Amortization of leasing costs and in-place lease intangibles 8,633
8,581
Accrued straight-line rental revenue (927 ) (765 )
Amortization of leasing incentives and above or below-market rents (140 ) (61 )
Accrued straight-line ground rent expense 401
291
Bad debt expense 425
178
Noncash stock compensation 1,047
864
Impairment charges 50
184
Noncash interest expense 940
687
Noncash loss on extinguishment of debt —
82
Gain on real estate dispositions (8,087 ) (30,440 )
Change in the fair value of interest rate derivatives (300 ) 2,264
Changes in operating assets and liabilities:
Property assets (3,612 ) (4,938 )
Property liabilities 3,209
3,856
Construction assets 4,065
(5,863 )
Construction liabilities (12,648 ) 9,197
Net cash provided by operating activities 36,598
38,782
INVESTING ACTIVITIES
Development of real estate investments (28,731 ) (48,671 )
Tenant and building improvements (8,104 ) (4,399 )
Acquisitions of real estate investments, net of cash received (28,020 ) (177,865 )
Dispositions of real estate investments 12,557
96,312
Notes receivable issuances (15,754 ) (42,110 )
Decrease in capital improvement reserves (203 ) (210 )
Leasing costs (149 ) (1,601 )
Leasing incentives (147 ) (188 )
Contributions to equity method investments (934 ) (8,949 )
Net cash used for investing activities (69,485 ) (187,681 )
FINANCING ACTIVITIES
Proceeds from sales of common stock 96,044
51,088
Offering costs (4,663 ) (1,183 )
Debt issuances, credit facility and construction loan borrowings 124,206
290,105
Debt and credit facility repayments, including principal amortization (152,201 ) (167,659 )
Debt issuance costs (751 ) (1,791 )
Redemption of operating partnership units (229 ) (58 )
Dividends and distributions (31,740 ) (24,702 )
Net cash provided by financing activities 30,666
145,800
Net decrease in cash and cash equivalents (2,221 ) (3,099 )
Cash and cash equivalents, beginning of period 21,942
26,989
Cash and cash equivalents, end of period $ 19,721
$ 23,890
Supplemental Disclosures:
Noncash transactions:
Redeemable noncontrolling interest from development $ 2,000
$ —
Deferred payment for land acquisition $ 600
$ —

See Notes to Condensed Consolidated Financial Statements.

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ARMADA HOFFLER PROPERTIES, INC.

Condensed Consolidated Statements of Cash Flows (Continued)

(In thousands)(Unaudited)


	Six Months Ended June 30,
	2022		2021
Supplemental Disclosures (noncash transactions):
Increase in dividends and distributions payable	$	750	$	4,351
Increase (decrease) in accrued capital improvements and development costs	(2,626)		2,058


Operating Partnership units redeemed for common shares	132		131

Debt assumed at fair value in conjunction with real estate purchases	156,071		—



Noncontrolling interest in acquired real estate entity	23,065		—


Recognition of finance lease right-of-use assets	—		24,466
Recognition of finance lease liabilities	—		27,940

(1) The following table provides a reconciliation of cash, cash equivalents and restricted cash reported in the Condensed Consolidated Statements of Cash Flows (in thousands):


	June 30, 2022		June 30, 2021
Cash and cash equivalents	$	69,731	$	43,493
Restricted cash (a)	6,681		9,749
Cash, cash equivalents, and restricted cash	$	76,412	$	53,242

(a) Restricted cash represents amounts held by lenders for real estate taxes, insurance, and reserves for capital improvements.

See Notes to Condensed Consolidated Financial Statements.

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ARMADA HOFFLER PROPERTIES, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

1. Business of Organization

Armada Hoffler Properties, Inc. (the ~~“Company”~~"Company") is a ~~full service~~full-service real estate company with extensive experience developing, building, owning, and managing high-quality, institutional-grade office, retail, and multifamily properties in attractive markets primarily throughout the Mid-Atlantic and Southeastern United States.

The Company is a real estate investment trust ("REIT"), the sole general partner of Armada Hoffler, L.P. (the ~~“Operating Partnership”~~"Operating Partnership"). and, as of June 30, 2022, owned 76.7% of the economic interest in the Operating Partnership, of which 0.1% is held as general partnership units. The operations of the Company are carried on primarily through the Operating Partnership and the wholly owned subsidiaries of the Operating Partnership. Both the Company and the Operating Partnership were formed on October 12, 2012 and commenced operations upon completion of the underwritten initial public offering of shares of the Company’s common stock and certain related formation transactions on May 13, 2013.thereof.

As of ~~September~~June 30, ~~2017,~~2022, the Company's ~~operating~~ property portfolio consisted of ~~the following properties:~~



~~Property~~	~~Segment~~	~~Location~~	~~Ownership Interest~~
~~4525 Main Street~~	~~Office~~	Virginia Beach, Virginia*	~~100~~	%
~~Armada Hoffler Tower~~	~~Office~~	Virginia Beach, Virginia*	~~100~~	%
~~One Columbus~~	~~Office~~	Virginia Beach, Virginia*	~~100~~	%
~~Two Columbus~~	~~Office~~	Virginia Beach, Virginia*	~~100~~	%
~~249 Central Park Retail~~	~~Retail~~	Virginia Beach, Virginia*	~~100~~	%
~~Alexander Pointe~~	~~Retail~~	~~Salisbury, North Carolina~~	~~100~~	%
~~Bermuda Crossroads~~	~~Retail~~	~~Chester, Virginia~~	~~100~~	%
~~Broad Creek Shopping Center~~	~~Retail~~	~~Norfolk, Virginia~~	~~100~~	%
~~Broadmoor Plaza~~	~~Retail~~	~~South Bend, Indiana~~	~~100~~	%
~~Brooks Crossing~~⁽¹⁾	~~Retail~~	~~Newport News, Virginia~~	65	%
~~Columbus Village~~	~~Retail~~	Virginia Beach, Virginia*	~~100~~	%
~~Columbus Village II~~	~~Retail~~	Virginia Beach, Virginia*	~~100~~	%
~~Commerce Street Retail~~	~~Retail~~	Virginia Beach, Virginia*	~~100~~	%
~~Courthouse 7-Eleven~~	~~Retail~~	~~Virginia Beach, Virginia~~	~~100~~	%
~~Dick's at Town Center~~	~~Retail~~	Virginia Beach, Virginia*	~~100~~	%
~~Dimmock Square~~	~~Retail~~	~~Colonial Heights, Virginia~~	~~100~~	%
~~Fountain Plaza Retail~~	~~Retail~~	Virginia Beach, Virginia*	~~100~~	%
~~Gainsborough Square~~	~~Retail~~	~~Chesapeake, Virginia~~	~~100~~	%
~~Greentree Shopping Center~~	~~Retail~~	~~Chesapeake, Virginia~~	~~100~~	%
~~Hanbury Village~~	~~Retail~~	~~Chesapeake, Virginia~~	~~100~~	%
~~Harper Hill Commons~~	~~Retail~~	~~Winston-Salem, North Carolina~~	~~100~~	%
~~Harrisonburg Regal~~	~~Retail~~	~~Harrisonburg, Virginia~~	~~100~~	%
~~Lightfoot Marketplace~~⁽²⁾	~~Retail~~	~~Williamsburg, Virginia~~	70	%
~~North Hampton Market~~	~~Retail~~	~~Taylors, South Carolina~~	~~100~~	%
~~North Point Center~~	~~Retail~~	~~Durham, North Carolina~~	~~100~~	%
~~Oakland Marketplace~~	~~Retail~~	~~Oakland, Tennessee~~	~~100~~	%
~~Parkway Marketplace~~	~~Retail~~	~~Virginia Beach, Virginia~~	~~100~~	%
~~Patterson Place~~	~~Retail~~	~~Durham, North Carolina~~	~~100~~	%
~~Perry Hall Marketplace~~	~~Retail~~	~~Perry Hall, Maryland~~	~~100~~	%
~~Providence Plaza~~	~~Retail~~	~~Charlotte, North Carolina~~	~~100~~	%
~~Renaissance Square~~	~~Retail~~	~~Davidson, North Carolina~~	~~100~~	%
~~Sandbridge Commons~~	~~Retail~~	~~Virginia Beach, Virginia~~	~~100~~	%

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~~Property~~	~~Segment~~	~~Location~~	~~Ownership Interest~~
~~Socastee Commons~~	~~Retail~~	~~Myrtle Beach, South Carolina~~	~~100~~	%
~~Southgate Square~~	~~Retail~~	~~Colonial Heights, Virginia~~	~~100~~	%
~~Southshore Shops~~	~~Retail~~	~~Chesterfield, Virginia~~	~~100~~	%
~~South Retail~~	~~Retail~~	Virginia Beach, Virginia*	~~100~~	%
~~South Square~~	~~Retail~~	~~Durham, North Carolina~~	~~100~~	%
~~Stone House Square~~	~~Retail~~	~~Hagerstown, Maryland~~	~~100~~	%
~~Studio 56 Retail~~	~~Retail~~	Virginia Beach, Virginia*	~~100~~	%
~~Tyre Neck Harris Teeter~~	~~Retail~~	~~Portsmouth, Virginia~~	~~100~~	%
~~Waynesboro Commons~~	~~Retail~~	~~Waynesboro, Virginia~~	~~100~~	%
~~Wendover Village~~	~~Retail~~	~~Greensboro, North Carolina~~	~~100~~	%
~~Encore Apartments~~	~~Multifamily~~	Virginia Beach, Virginia*	~~100~~	%
~~Johns Hopkins Village~~⁽³⁾	~~Multifamily~~	~~Baltimore, Maryland~~	80	%
~~Liberty Apartments~~	~~Multifamily~~	~~Newport News, Virginia~~	~~100~~	%
~~Smith's Landing~~	~~Multifamily~~	~~Blacksburg, Virginia~~	~~100~~	%
~~The Cosmopolitan~~	~~Multifamily~~	Virginia Beach, Virginia*	~~100~~	%


~~(1)~~	~~The Company is entitled to a preferred return of 8% on its investment in Brooks Crossing.~~


~~(2)~~	~~The Company is entitled to a preferred return of 9% on its investment in Lightfoot Marketplace.~~


~~(3)~~	~~See discussion of redeemable noncontrolling interest in Note 9 for additional information. The Company is entitled to a preferred return of 9% on its investment in Johns Hopkins Village.~~

*Located in the Town Center of Virginia Beach

~~As of September 30, 2017, the following~~55 stabilized operating properties ~~that the Company consolidates for financial statement purposes were~~and 4 properties either under development or ~~construction:~~ not yet stabilized.



~~Property~~	~~Segment~~	~~Location~~	~~Ownership Interest~~
~~Town Center Phase VI~~	~~Mixed-use~~	Virginia Beach, Virginia*	~~100~~	%
~~Harding Place~~⁽¹⁾	~~Multifamily~~	~~Charlotte, North Carolina~~	80	%
~~595 King Street~~	~~Multifamily~~	~~Charleston, South Carolina~~	~~92.5~~	%
~~530 Meeting Street~~	~~Multifamily~~	~~Charleston, South Carolina~~	90	%

~~(1) The Company is entitled~~Refer to ~~a preferred return of 9% on a portion of its investment in Harding Place.~~

*Located in the Town Center of Virginia Beach

~~Please see~~ Note 5 for information related to the ~~Company’s investment in Durham City Center II, LLC, which is an unconsolidated subsidiary that the Company accounts for using the equity method~~Company's recent acquisitions and dispositions of ~~accounting.~~properties.

2. ~~Summary of~~ Significant Accounting Policies

Basis of Presentation

The accompanying condensed consolidated financial statements were prepared in accordance with U.S. generally accepted accounting principles ~~generally accepted in the United States (“GAAP”~~("GAAP").

The condensed consolidated financial statements include the financial position and results of operations of the Company and its consolidated ~~subsidiaries.~~subsidiaries, including the Operating Partnership, its wholly-owned subsidiaries, and any interests in variable interest entities ("VIEs") where the Company has been determined to be the primary beneficiary. All significant intercompany transactions and balances have been eliminated in consolidation.

In the opinion of management, the condensed consolidated financial statements reflect all adjustments, consisting of normal recurring accruals, which are necessary for the fair presentation of the financial condition, and results of operations for the interim periods presented.

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The accompanying condensed consolidated financial statements were prepared in accordance with the requirements for interim financial information. Accordingly, these interim financial statements have not been audited and exclude certain disclosures required for annual financial statements. Also, the operating results presented for interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the entire year. These interim financial statements should be read in conjunction with the audited consolidated financial statements of the Company included in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2021.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported and disclosed. Such estimates are based on management’s historical experience and best judgment after considering past, current, and expected events and economic conditions. Actual results could differ significantly from management’s estimates.

~~Significant~~Reclassifications

Certain items have been reclassified from their prior year classifications to conform to the current year presentation. These reclassifications had no effect on net income or stockholders' equity as previously reported.

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Recent Accounting Pronouncements

Accounting Standards Adopted in 2022

Reference Rate Reform

In March 2020, the Financial Accounting Standards Board ("FASB") issued ASU 2020-04 Reference Rate Reform - Facilitation of the Effects of Reference Rate Reform on Financial Reporting (Topic 848), which became effective on March 12, 2020 and generally can be applied through December 31, 2022. ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. This Accounting Standards Update ("ASU") also provides optional expedients to enable companies to continue to apply hedge accounting to certain hedging relationships impacted by reference rate reform. Application of the guidance is optional and only available in certain situations. In January 2021, FASB issued ASU No. 2021-01, Reference Rate Reform (Topic 848). The amendments in this standard are elective and principally apply to entities that have derivative instruments that use an interest rate for margining, discounting, or contract price alignment that is modified as a result of reference rate reform. Similar to ASU No. 2020-04, provisions of this ASU are effective upon issuance and generally can be applied through December 31, 2022. During the six months ended June 30, 2022, the Company elected to apply the practical expedients to modifications of qualifying contracts as continuations of the existing contracts rather than as new contracts. The adoption of the new guidance did not have a material impact on the consolidated financial statements. Management will continue to evaluate the impacts of reference rate reform.

Earnings Per Share

In August 2020, FASB issued ASU 2020-06 an update to ASC Topic 470 and ASC Topic 815, which became effective January 1, 2022. ASU 2020-06 simplifies the accounting for convertible instruments and removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception. This ASU also simplifies diluted earnings per share calculation in certain areas and provides updated disclosure requirements. The Company adopted ASU 2020-06 effective January 1, 2022 and the adoption did not have a material impact on the consolidated financial statements.

Other Accounting Policies

~~The accompanying condensed consolidated financial statements were prepared on~~See the ~~basis of the accounting principles described in the Company’s~~Company's Annual Report on Form 10-K for the year ended December 31, ~~2016.~~

~~Recent Accounting Pronouncements~~

~~On May 28, 2014,~~2021 for a description of other accounting principles upon which basis the Financial Accounting Standards Board ("FASB") issued a new standard that provides a single, comprehensive model for recognizing revenue from contracts with customers. The new standard requires additional disclosures about the Company's revenue recognition and could change the way the Company recognizes revenue from construction and development contracts with third party customers. Management is currently reviewing the Company's existing construction contracts to assess the potential impacts of the new standard. A substantial portion of the Company's revenue consists of rental revenues from leasing arrangements, such as base rent, which is specifically excluded from the revenue guidance. Non-lease components, such as tenant reimbursements for common area maintenance, will be subject to the revenue guidance. The Company does not expect the new standard to have a material impact on the measure and recognition of gains and losses on the sale of properties. The new standard will be effective for the Company on January 1, 2018. The Company plans to adopt the new standard using the full retrospective method.

On February 25, 2016, the FASB issued a new lease standard that requires lessees to recognize most leases in their balance sheets as lease liabilities with corresponding right-of-use assets. The new standard also makes targeted changes to lessor accounting. The new standard will be effective for the Company on January 1, 2019 and requires a modified retrospective transition approach for all leases existing at, or entered into after, the beginning of the earliest comparative period presented, with an option to use certain transition relief. Management is currently evaluating the potential impact of the new standard on the Company’saccompanying consolidated financial ~~statements.~~statements were prepared.

On March 30, 2016, the FASB issued new guidance that changed the accounting for certain aspects of share-based payments to employees. Entities are required to recognize the income tax effects of awards in the income statement when the awards vest or are settled, and the Company is allowed to account for forfeitures as they occur. The Company adopted the guidance on January 1, 2017 and it did not have a material impact on the Company’s consolidated financial statements.

On August 26, 2016, the FASB issued new guidance that addresses eight classification issues related to the statement of cash flows. Early adoption is permitted, including adoption in an interim period. This guidance should be applied retrospectively to each period presented. This new guidance will be effective for the Company on January 1, 2018. Management is currently evaluating the potential impact of the new guidance on the Company’s consolidated financial statements.

On February 22, 2017, the FASB issued new guidance that clarifies the scope and application of guidance on sales or transfers of nonfinancial assets and in substance nonfinancial assets to customers, including partial sales. The new guidance applies to all nonfinancial assets, including real estate, and defines an in substance nonfinancial asset. The new guidance will be effective for the Company on January 1, 2018, with early adoption permitted. Management is currently evaluating the potential impact of the new standard on the Company’s consolidated financial statements.

On August 28, 2017, the FASB issued new guidance that simplifies some of the requirements relating to accounting for derivatives and hedging. The new guidance eliminates the requirement to separately measure and report hedge ineffectiveness for a highly effective hedge and also simplifies certain documentation and assessment requirements relating

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to the determination of hedge effectiveness. The new guidance will be effective for the Company on January 1, 2019, with early adoption permitted. The Company does not currently have any derivatives designated as hedging instruments for accounting purposes. The application of this guidance to future hedging relationships could reduce or eliminate the gains and losses that would otherwise be recorded for these derivative instruments.

3. Segments

Net operating income (segment revenues minus segment expenses) is the measure used by the Company’s chief operating decision-maker to assess segment performance. Net operating income is not a measure of operating income or cash flows from operating activities as measured by GAAP and is not indicative of cash available to fund cash needs. As a result, net operating income should not be considered an alternative to cash flows as a measure of liquidity. Not all companies calculate net operating income in the same manner. The Company considers net operating income to be an appropriate supplemental measure to net income because it assists both investors and management in understanding the core operations of the Company’s real estate and construction businesses.

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Net operating income of the Company’s reportable segments for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2022 and ~~2016~~2021 was as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2017		2016		2017		2016			Three Months Ended June 30,				Six Months Ended June 30,
	(Unaudited)									2022		2021		2022		2021
Office real estate									Office real estate
Rental revenues	$	4,762	$	5,277	$	14,427	$	16,097	Rental revenues	$	18,314	$	11,756	$	35,337	$	23,391
Rental expenses	1,447		1,553		4,138		4,307		Rental expenses	4,600		2,938		8,740		5,813
Real estate taxes	481		485		1,381		1,550		Real estate taxes	2,035		1,413		3,539		2,771
Segment net operating income	2,834		3,239		8,908		10,240		Segment net operating income	11,679		7,405		23,058		14,807
Retail real estate									Retail real estate
Rental revenues	15,880		14,340		47,089		41,485		Rental revenues	21,544		19,204		42,974		37,459
Rental expenses	2,699		2,264		7,698		6,820		Rental expenses	3,333		3,013		6,834		5,849
Real estate taxes	1,588		1,339		4,557		3,953		Real estate taxes	2,271		2,180		4,509		4,207
Segment net operating income	11,593		10,737		34,834		30,712		Segment net operating income	15,940		14,011		31,631		27,403
Multifamily residential real estate									Multifamily residential real estate
Rental revenues	6,454		5,688		19,567		15,257		Rental revenues	15,366		16,418		31,548		32,269
Rental expenses	2,684		2,017		7,233		5,107		Rental expenses	4,752		5,341		9,780		10,462
Real estate taxes	624		532		1,859		1,584		Real estate taxes	1,531		1,872		3,193		3,793
Segment net operating income	3,146		3,139		10,475		8,566		Segment net operating income	9,083		9,205		18,575		18,014
General contracting and real estate services									General contracting and real estate services
Segment revenues	41,201		38,552		161,391		108,555		Segment revenues	45,273		18,408		69,923		53,971
Segment expenses	39,377		37,274		154,588		104,336		Segment expenses	43,418		18,131		67,239		52,406
Segment gross profit	1,824		1,278		6,803		4,219		Segment gross profit	1,855		277		2,684		1,565
Net operating income	$	19,397	$	18,393	$	61,020	$	53,737	Net operating income	$	38,557	$	30,898	$	75,948	$	61,789

Rental expenses represent costs directly associated with the operation and management of the Company’s real estate properties. Rental expenses include asset management expenses, property management fees, repairs and maintenance, insurance, and utilities.

General contracting and real estate services revenues for the three months ended ~~September~~June 30, ~~2017~~2022 and ~~2016~~2021 exclude revenue related to intercompany construction contracts of ~~$13.9~~$14.2 million and ~~$7.9~~$5.4 million, ~~respectively.~~respectively, as it is eliminated in consolidation. General contracting and real estate services revenues for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2022 and ~~2016~~2021 exclude revenue related to intercompany construction contracts of ~~$31.3~~$22.8 million and ~~$40.7~~$7.4 million, ~~respectively.~~respectively, as it is eliminated in consolidation.

General contracting and real estate services expenses for the three months ended ~~September~~June 30, ~~2017~~2022 and ~~2016~~2021 exclude expenses related to intercompany construction contracts of ~~$13.7~~$14.0 million and ~~$7.7~~$5.4 million, respectively. General contracting and real estate services expenses for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2022 and ~~2016~~2021 exclude expenses related to intercompany construction contracts of ~~$31.0~~$22.5 million and ~~$40.2~~$7.4 million, ~~respectively.~~respectively, as it is eliminated in consolidation.

General contracting and real estate services expenses for the three months ended September 30, 2017 and 2016 include noncash stock compensation expense of less than $0.1 million and $0.1 million, respectively. General contracting and real

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~~estate services expenses for the nine months ended September 30, 2017 and 2016 include noncash stock compensation expense of $0.2 million and $0.4 million, respectively.~~

The following table reconciles net operating income to net income, the most directly comparable GAAP measure, for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2022 and ~~2016~~2021 (in thousands):


	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016				Three Months Ended June 30,				Six Months Ended June 30,
	(Unaudited)													2022		2021		2022		2021
Net operating income	$	19,397		$	18,393		$	61,020		$	53,737		Net operating income	$	38,557	$	30,898	$	75,948	$	61,789
Depreciation and amortization	(9,239		)	(8,885		)	(28,018		)	(25,636		)	Depreciation and amortization	(18,781)		(17,285)		(37,338)		(35,351)
Amortization of right-of-use assets - finance leases													Amortization of right-of-use assets - finance leases	(277)		(278)		(555)		(467)
General and administrative expenses	(2,098		)	(2,156		)	(7,762		)	(6,864		)	General and administrative expenses	(3,617)		(3,487)		(8,325)		(7,508)
Acquisition, development and other pursuit costs	(61		)	(345		)	(477		)	(1,486		)	Acquisition, development and other pursuit costs	(26)		(32)		(37)		(103)
Impairment charges	(19		)	(149		)	(50		)	(184		)	Impairment charges	(286)		(83)		(333)		(3,122)
Gain on real estate dispositions, net													Gain on real estate dispositions, net	19,493		—		19,493		3,717
Interest income	1,910			1,024			4,966			1,928			Interest income	3,352		6,746		6,920		10,862
Interest expense	(4,253		)	(4,124		)	(13,282		)	(11,893		)	Interest expense	(9,371)		(8,418)		(18,402)		(16,393)

Loss on extinguishment of debt	—			(82		)	—			(82		)	Loss on extinguishment of debt	(618)		—		(776)		—
Gain on real estate dispositions	4,692			3,753			8,087			30,440
Change in fair value of interest rate derivatives	87			498			300			(2,264		)
Other income	74			35			154			154
Income tax provision	(29		)	(16		)	(781		)	(240		)
Change in fair value of derivatives and other													Change in fair value of derivatives and other	2,548		314		6,730		707
Unrealized credit loss provision													Unrealized credit loss provision	(295)		(388)		(900)		(333)
Other income (expense), net													Other income (expense), net	68		7		297		186
Income tax benefit													Income tax benefit	20		461		321		480
Net income	$	10,461		$	7,946		$	24,157		$	37,610		Net income	$	30,767	$	8,455	$	43,043	$	14,464

General and administrative expenses represent costs not directly associated with the operation and management of the Company’s real estate properties and general contracting and real estate services businesses. These costs include corporate office personnel compensation and benefits, bank fees, accounting fees, legal fees, and other corporate office expenses.

4. Leases

Lessee Disclosures

As a lessee, the Company has 8 ground leases on 7 properties. These ground leases have maximum lease terms (including renewal options) that expire between 2074 and 2117. The exercise of lease renewal options is at the Company's sole discretion. The depreciable life of assets and leasehold improvements are limited by the expected lease term. NaN of these leases have been classified as operating leases and 3 of these leases have been classified as finance leases. The Company's lease agreements do not contain any residual value guarantees or material restrictive covenants.

Lessor Disclosures

As a lessor, the Company leases its properties under operating leases and recognizes base rents on a straight-line basis over the lease term. The Company also recognizes revenue from tenant recoveries, through which tenants reimburse the Company on an accrual basis for certain expenses such as utilities, janitorial services, repairs and maintenance, security and alarms, parking lot and ground maintenance, administrative services, management fees, insurance, and real estate taxes. Rental revenues are reduced by the amount of any leasing incentives amortized on a straight-line basis over the term of the applicable lease. In addition, the Company recognizes contingent rental revenue (e.g., percentage rents based on tenant sales thresholds) when the sales thresholds are met. Many tenant leases include 1 or more options to renew, with renewal terms that can extend the lease term from one to 25 years, or more. The exercise of lease renewal options is at the tenant's sole discretion. The Company includes a renewal period in the lease term only if it appears at lease inception that the renewal is reasonably assured.

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Rental revenue for the three and six months ended ~~September~~June 30, ~~2017~~2022 and ~~2016 include noncash stock compensation expense of $0.2 million and $0.1 million, respectively. General and administrative expenses for~~2021 comprised the ~~nine months ended September 30, 2017 and 2016 include noncash stock compensation expense of $0.8 million and $0.6 million, respectively.~~following (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Base rent and tenant charges	$	53,424	$	45,686	$	106,303	$	89,284
Accrued straight-line rental adjustment	1,544		1,436		3,036		3,327
Lease incentive amortization	(173)		(159)		(346)		(318)
Above/below market lease amortization	429		415		866		826
Total rental revenue	$	55,224	$	47,378	$	109,859	$	93,119

5. Real Estate Investment

Property Acquisitions

Exelon

On January ~~4, 2017,~~14, 2022, the Company acquired ~~undeveloped land~~a 79% membership interest and an additional 11% economic interest in ~~Charleston, South Carolina~~the partnership that owns the Exelon Building for a ~~contract~~purchase price of ~~$7.1~~approximately $92.2 million ~~plus capitalized acquisition costs~~in cash and a loan to the seller of ~~$0.2~~$12.8 million. The Exelon Building is a mixed-use structure located in Baltimore's Harbor Point and is comprised of an office building, the Exelon Office, that serves as the headquarters for Constellation Energy Corp., which was spun-off from Exelon, a Fortune 100 energy company, in February 2022, as well as a multifamily component, 1305 Dock Street. The Exelon Office includes a parking garage and retail space. The Exelon Building was subject to a $156.1 million loan, which the Company ~~intends to use~~immediately refinanced following the ~~land for the future development~~acquisition with a new $175.0 million loan. The new loan bears interest at a rate of the ~~595 King Street property.~~Bloomberg Short-Term Bank Yield Index ("BSBY") plus a spread of 1.50% and will mature on November 1, 2026. This loan is hedged by an interest rate cap corridor of 1.00% and 3.00% as well as an interest rate cap of 4.00%. See Note 9 for further details.

On July 11, 2017, the Company acquired undeveloped land in Charleston, South Carolina for a contract price of $6.7 million plus capitalized acquisition costs of $0.1 million. The Company intends to use the land for the future development of the 530 Meeting Street property.

~~On July 25, 2017, the Company acquired the outparcel phase of Wendover Village in Greensboro, North Carolina for a contract price of $14.3 million plus capitalized acquisition costs of $0.1 million.~~ The following table summarizes the purchase price allocation ~~including~~(including acquisition ~~costs,~~costs) based on the relative fair value of the assets acquired for ~~this property~~the 2 operating properties purchased during the six months ended June 30, 2022 (in thousands):


	Exelon Building
Land	$	23,317
Site improvements	141
Building	194,916


In-place leases	53,705
Above-market leases	306




Net assets acquired	$	272,385

Land $ 5,550
Site improvements 232
Building and improvements 6,975
In-place leases 1,382
Above-market leases 327
Below-market leases (50 )
Net assets acquired $ 14,416

Ten Tryon

On January 14, 2022, the Company acquired the remaining 20% ownership interest in the entity that is developing the Ten Tryon project in Charlotte, North Carolina for a cash payment of $3.9 million. The Company recorded the amount as an adjustment to additional paid-in-capital.

The Residences at Annapolis Junction

On April 11, 2022, the Company exercised its option to acquire an additional 16% of the partnership that owns The Residences at Annapolis Junction, increasing its ownership to 95%. In exchange for this increased partnership interest, the terms of the partnership waterfall calculation in the event of a capital event have been modified.

Property Dispositions

On April 1, 2022, the Company completed the sale of Hoffler Place for a sale price of $43.1 million. The loss recognized upon sale was $0.8 million.

On April 25, 2022, the Company completed the sale of Summit Place for a sale price of $37.8 million. The loss recognized upon sale was $0.5 million.

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In addition to the losses recognized on the sales of the Hoffler Place and Summit Place student-housing properties during the three months ended June 30, 2022 described above, the Company recognized impairment of real estate of $18.3 million to record these properties at their fair values during the three months ended December 31, 2021.

On ~~January 20, 2017,~~June 29, 2022, the Company completed the sale of the ~~Wawa outparcel~~Home Depot and Costco outparcels at ~~Greentree Shopping Center. Net proceeds after transaction costs were $4.4~~North Pointe for a sale price of $23.9 million. The gain on ~~the~~ disposition was ~~$3.4~~$20.9 million.

~~On July 13, 2017,~~Real Estate Held for Sale

As of June 30, 2022, the Company completed the sale of two office properties leased by the Commonwealth of Virginia in Chesapeake, Virginia and Virginia Beach, Virginia. Aggregate net proceeds from the dispositions of the properties after transaction costs and repayment of the loan associated with the Chesapeake, Virginia property were $7.9 million,had classified The Residences at Annapolis Junction and the ~~aggregate gain on the dispositions was $4.2 million.~~

~~On August 10, 2017,~~AutoZone and Valvoline outparcels at Sandbridge Commons in real estate investments held for sale. Subsequent to June 30, 2022, the Company ~~completed the sale of a land outparcel at Sandbridge Commons. Net proceeds after transaction costs and a partial loan paydown were $0.3 million. The gain on the disposition was $0.5 million.~~sold these properties. See Note 15 for more information.

5. Equity Method ~~Investment~~Investments

~~City Center~~Harbor Point Parcel 3

~~On February 25, 2016, the~~The Company ~~acquired~~owns a ~~37%~~50% interest in ~~Durham City Center II, LLC (“City Center”)~~Harbor Point Parcel 3, a joint venture with Beatty Development Group, for purposes of developing T. Rowe Price's new global headquarters office building in Baltimore, Maryland. The Company is a ~~22-story mixed use tower~~noncontrolling partner in ~~Durham, North Carolina.~~the joint venture and will serve as the project's general contractor. During the six months ended June 30, 2022, the Company invested $21.1 million in Harbor Point Parcel 3. The Company has an estimated equity commitment of up to $39.0 million relating to this project. As of ~~September~~June 30, ~~2017~~2022 and December 31, 2016, the Company has invested $11.2 million and $10.3 million, respectively, in City Center. The Company has agreed to guarantee 37% of the construction loan for City Center; however, the loan is collateralized by 100% of the assets of City Center. As of September 30, 2017, $18.7 million has been drawn against the construction loan, of which $7.8 million is attributable to the Company's portion of the loan.

~~As of September 30, 2017 and December 31, 2016, the difference between~~2021, the carrying value of the ~~Company’s initial~~Company's investment in ~~City Center~~Harbor Point Parcel 3 was $33.8 million and ~~the amount of underlying equity was immaterial.~~$12.7 million, respectively. For the ~~three and nine~~six months ended ~~September~~June 30, ~~2017 and 2016, City Center did not have any~~2022, Harbor Point Parcel 3 had no operating activity, and therefore the Company ~~did not receive any dividends or~~received no allocated income.

Based on the terms of ~~City Center’s~~the operating agreement, the Company has concluded that ~~City Center~~Harbor Point Parcel 3 is a ~~variable interest entity ("VIE"),~~VIE and that the Company holds a variable interest. The Company has significant influence over the project due to its 50% ownership; however, the Company does not have the power to direct the activities of the project that most significantly impact its performance. This includes activity as the managing member of the entity, which is a power that is retained by the Company's joint venture partner. Accordingly, the Company is not the project's primary beneficiary and, therefore, does not consolidate Harbor Point Parcel 3 in its consolidated financial statements. The Company's investment in the project is recorded as an equity method investment in the consolidated balance sheets.

Harbor Point Parcel 4

On April 1, 2022, the Company acquired a 78% interest in Harbor Point Parcel 4, a real estate venture with Beatty Development Group, for purposes of developing a mixed-use project, which is planned to include multifamily units, retail space, and a parking garage. The Company holds an option to increase its ownership to 90%. The Company is a noncontrolling partner in the real estate venture and will serve as the project's general contractor. During the six months ended June 30, 2022, the Company invested $19.7 million in Harbor Point Parcel 4. The Company has an estimated equity commitment of up to $100.0 million relating to this project. As of June 30, 2022, the carrying value of the Company's investment in Harbor Point Parcel 4 was $19.7 million. For the six months ended June 30, 2022, Harbor Point Parcel 4 had no operating activity, and therefore the Company received no allocated income.

Based on the terms of the operating agreement, the Company has concluded that Harbor Point Parcel 4 is a VIE and that the Company holds a variable interest. The Company has significant influence over the project due to its 78% ownership; however, the Company does not have the power to direct the activities of the project that most significantly impact its performance. This includes activity as the managing member of the entity, which is a power that is retained by the Company's partner. Accordingly, the Company is not the project's primary beneficiary and, therefore, does not consolidate Harbor Point Parcel 4 in its consolidated financial statements. The Company's investment in the project is recorded as an equity method investment in the consolidated balance sheets.

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6. Notes Receivable and Current Expected Credit Losses

Notes Receivable

The Company had the following notes receivable outstanding as of June 30, 2022 and December 31, 2021 ($ in thousands):


	Outstanding loan amount (a)										Interest compounding
Development Project	June 30, 2022			December 31, 2021		Maximum loan commitment			Interest rate
City Park 2	$	8,014		$	—	$	20,594		13.0	%	Annually
Interlock Commercial	86,334			95,379		107,000		(b)	15.0	%	None
Nexton Multifamily	24,853			23,567		22,315			11.0	%	Annually
Total mezzanine & preferred equity	119,201			118,946		$	149,909
Exelon note receivable	12,834			—
Other notes receivable	7,455			7,234
Notes receivable guarantee premium	1,345			1,243
Allowance for credit losses	(1,452)		(c)	(994)

Total notes receivable	$	139,383		$	126,429

(a) Outstanding loan amounts include any accrued and unpaid interest, as applicable.

(b) This amount includes interest reserves.

(c) The amount excludes $0.5 million of Current Expected Credit Losses ("CECL") allowance that relates to the unfunded commitments, which was recorded as a liability under Other liabilities in the consolidated balance sheet.

Interest on the notes receivable is accrued and funded utilizing the interest reserves for each loan, which are components of the respective maximum loan commitments, and such accrued interest is generally added to the loan receivable balances. The Company recognized interest income for the three and six months ended June 30, 2022 and 2021 as follows (in thousands):


	Three Months Ended June 30,						Six Months Ended June 30,
Development Project	2022			2021			2022			2021




City Park 2	$	206	(a)	$	—		$	224	(a)	$	—
Interlock Commercial	2,361		(a)	3,310		(a)	5,187		(a)	6,384		(a)
Nexton Multifamily	672			261			1,286			261
Solis Apartments at Interlock	—			3,068		(b)	—			4,005		(b)
Total mezzanine	3,239			6,639			6,697			10,650
Other interest income	113			107			223			212
Total interest income	$	3,352		$	6,746		$	6,920		$	10,862

(a) Includes recognition of interest income related to fee amortization.

(b) Includes prepayment premium of $2.4 million from early payoff of the loan.

City Park 2

On March 23, 2022, the Company entered into a $20.6 million preferred equity investment for the development of a multifamily property located in Charlotte, North Carolina. The investment has economic terms consistent with a note receivable, including a mandatory redemption or maturity on April 28, 2026, and it is accounted for as a note receivable. The Company's investment bears interest at a rate of 13%, compounded annually.

Management has concluded that this entity is a VIE. Because the other investor in the project, TP City Park 2 LLC, is the developer of City Park 2 Multifamily, the Company does not have the power to direct the activities of the project that most significantly impact its performance. Accordingly, the Company is not the ~~project’s primary beneficiary and, therefore, does not consolidate City Center in its consolidated financial statements.~~

~~6. Notes Receivable~~

~~Point Street Apartments~~

On October 15, 2015, the Company agreed to invest up to $28.2 million in the Point Street Apartments project in the Harbor Point area of Baltimore, Maryland. Point Street Apartments is an estimated $92 million development project with plans for a 17-story building comprised of 289 residential units and 18,000 square feet of street-level retail space. Beatty Development Group (“BDG”) is the developer of the project and has engaged the Company to serve as construction general contractor. Point Street Apartments is scheduled to open in the first quarter of 2018; however, management can provide no assurances that Point Street Apartments will open on the anticipated timeline or be completed at the anticipated cost.

BDG secured a senior construction loan of up to $67.0 million to fund the development and construction of Point Street Apartments on November 10, 2016. The Company has agreed to guarantee $25.0 million of the senior construction loan in exchange for the option to purchase up to an 88% controlling interest in Point Street Apartments upon completion of the project as follows: (i) an option to purchase a 79% indirect interest in Point Street Apartments for $27.3 million, exercisable within one year from the project’s completion (the “First Option”) and (ii) provided that the Company has exercised the First Option, an option to purchase an additional 9% indirect interest in Point Street Apartments for $3.1 million, exercisable within 27 months from the project’s completion (the “Second Option”). The Company currently has a $2.1 million letter of credit for the guarantee of the senior construction loan.

The Company’s investment in the Point Street Apartments project is in the form of a loan pursuant to which BDG may borrow up to $28.2 million (the “BDG loan”). Interest on the BDG loan accrues at 8.0% per annum and matures on the earliest of: (i) November 1, 2018, which may be extended by BDG under two one-year extension options, (ii) the maturity date or earlier termination of the senior construction loan or (iii) the date the Company exercises the Second Option as described further below.

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In the event the Company exercises the First Option, BDG is required to pay down the outstanding BDG loan in full, with the difference between the BDG loan and $28.2 million applied to the senior construction loan. In the event the Company exercises the Second Option, BDG is required to simultaneously repay any remaining amounts outstanding under the BDG loan, with any excess proceeds received from the exercise of the Second Option applied against the senior construction loan. In the event the Company does not exercise either the First Option or the Second Option, the interest rate on the BDG loan will automatically be reduced to the interest rate on the senior construction loan for the remaining term of the BDG loan.

As of September 30, 2017 and December 31, 2016, the Company had funded $22.0 million and $20.7 million, respectively, under the BDG loan. During the three months ended September 30, 2017 and 2016, the Company recognized $0.4 million and $0.4 million, respectively, of interest income on the BDG loan. During the nine months ended September 30, 2017 and 2016, the Company recognized $1.3 million and $0.8 million, respectively, of interest income on the BDG loan. BDG is current on the BDG loan.

Management has concluded that this entity is a VIE. Because BDG is the developer of Point Street Apartments, the Company does not have the power to direct the activities of the project that most significantly impact its performance, nor is the Company the party most closely associated with the project. Therefore, the Company is not the project's primary beneficiary and does not consolidate the project in its consolidated financial statements.

~~Annapolis Junction~~

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~~On April 21, 2016,~~Interlock Commercial

During February 2022, the Company ~~entered into~~received $13.5 million as a ~~note~~partial repayment of the Interlock Commercial mezzanine loan, which consisted of $11.1 million of principal and $2.4 million of interest.

Allowance for Loan Losses

The Company is exposed to credit losses primarily through its mezzanine lending activities and preferred equity investments. As of June 30, 2022, the Company had 3 mezzanine loans (including the Nexton Multifamily and City Park 2 preferred equity investments that are accounted for as notes receivable), each of which are financing development projects in various stages of completion or lease-up. Each of these projects is subject to a loan that is senior to the Company’s mezzanine loan. Interest on these loans is paid in kind and is generally not expected to be paid until a sale of the project after completion of the development.

The Company's management performs a quarterly analysis of the loan portfolio to determine the risk of credit loss based on the progress of development activities, including leasing activities, projected development costs, and current and projected mezzanine and senior construction loan balances. The Company estimates future losses on its notes receivable ~~with~~using risk ratings that correspond to probabilities of default and loss given default. The Company's risk ratings are as follows:

•Pass: loans in this category are adequately collateralized by a ~~maximum balance of $48.1 million in connection with the Annapolis Junction Apartments project in Maryland ("Annapolis Junction"). Annapolis Junction Apartments is an estimated $102.0 million~~ development project with ~~plans for 416 residential units. It is part of a mixed-use development project~~conditions materially consistent with the Company's underwriting assumptions.

•Special Mention: loans in this category show signs that ~~is also planned to have 17,000 square feet of retail space and a 150-room hotel. Annapolis Junction Apartments Owner, LLC (“AJAO”) is~~ the ~~developer~~economic performance of the ~~residential component and has engaged~~project may suffer as a result of slower-than-expected leasing activity or an extended development or marketing timeline. Loans in this category warrant increased monitoring by management.

•Substandard: loans in this category may not be fully collected by the Company unless remediation actions are taken. Remediation actions may include obtaining additional collateral or assisting the borrower with asset management activities to ~~serve~~prepare the project for sale. The Company will also consider placing the loan on nonaccrual status if it does not believe that additional interest accruals will ultimately be collected.

On a quarterly basis, the Company compares the risk inherent in its loans to industry loan loss data experienced during past business cycles. The Company updated the risk ratings for each of its notes receivable as ~~construction general contractor~~of June 30, 2022 and obtained industry loan loss data relative to these risk ratings. Each of the outstanding loans as of June 30, 2022 was "Pass" rated.

At December 31, 2021, the Company reported $126.4 million of notes receivable, net of allowances of $1.0 million. At June 30, 2022, the Company reported $139.4 million of notes receivable, net of allowances of $1.5 million. Changes in the allowance for the ~~residential component. Portions~~three and six months ended June 30, 2022 and 2021 were as follows (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Beginning balance	$	1,599	$	1,741	$	994	$	2,584

Unrealized credit loss provision (release)	295		388		900		333
Extinguishment due to acquisition	—		—		—		(788)


Ending balance (a)	$	1,894	$	2,129	$	1,894	$	2,129

(a) The amount as of ~~Annapolis Junction opened during~~June 30, 2022 includes $0.5 million of allowance related to the third quarter of 2017, and the remaining portions are scheduled to open during the fourth quarter of 2017; however, management can provide no assurances that the remaining portions of Annapolis Junction will openunfunded commitments, which was recorded as Other liabilities on the ~~anticipated timeline or at the anticipated cost.~~consolidated balance sheet.

~~AJAO secured a senior construction loan of up to $60.0 million to fund the development and construction of Annapolis Junction's residential component on September 30, 2016.~~ The Company ~~has agreed to guarantee up to $25.0 million~~places loans on non-accrual status when the loan balance, together with the balance of any senior loan, approximately equals the estimated realizable value of the ~~senior construction loan~~underlying development project. As of June 30, 2022, the Company had the Exelon note, which bears interest at 3% per annum, on non-accrual status. The principal balance of the note receivable is adequately secured by the seller's partnership interest. As of June 30, 2022 and December 31, 2021, there were no other loans on non-accrual status.

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7. Construction Contracts

Construction contract costs and estimated earnings in ~~exchange for~~excess of billings represent reimbursable costs and amounts earned under contracts in progress as of the ~~option~~balance sheet date. Such amounts become billable according to ~~purchase up to an 88% controlling interest in Annapolis Junction upon~~contract terms, which usually consider the passage of time, achievement of certain milestones, or completion of the ~~project~~project. The Company expects to bill and collect substantially all construction contract costs and estimated earnings in excess of billings as ~~follows: (i) an option~~of June 30, 2022 during the next twelve months.

Billings in excess of construction contract costs and estimated earnings represent billings or collections on contracts made in advance of revenue recognized.

The following table summarizes the changes to ~~purchase an 80% indirect interest~~the balances in ~~Annapolis Junction's residential component~~the Company’s construction contract costs and estimated earnings in excess of billings account and the billings in excess of construction contract costs and estimated earnings account for the ~~lesser of the seller’s budgeted or actual cost, exercisable within one year from the project’s completion (the “First Option”)~~six months ended June 30, 2022 and (ii) provided that the Company has exercised the First Option, an option to purchase an additional 8% indirect interest in Annapolis Junction for the lesser of the seller’s actual or budgeted cost, exercisable within 27 months from the project’s completion (the “Second Option”).2021 (in thousands):


	Six Months Ended June 30, 2022				Six Months Ended June 30, 2021
	Construction contract costs and estimated earnings in excess of billings		Billings in excess of construction contract costs and estimated earnings		Construction contract costs and estimated earnings in excess of billings		Billings in excess of construction contract costs and estimated earnings
Beginning balance	$	243	$	4,881	$	138	$	6,088
Revenue recognized that was included in the balance at the beginning of the period	—		(4,881)		—		(6,088)
Increases due to new billings, excluding amounts recognized as revenue during the period	—		15,442		—		4,191
Transferred to receivables	(361)		—		(464)		—
Construction contract costs and estimated earnings not billed during the period	493		—		85		—
Changes due to cumulative catch-up adjustment arising from changes in the estimate of the stage of completion	118		(367)		326		(54)
Ending balance	$	493	$	15,075	$	85	$	4,137

The ~~Company’s investment in the Annapolis Junction project~~Company defers pre-contract costs when such costs are directly associated with specific anticipated contracts and their recovery is ~~in the form~~probable. Pre-contract costs of ~~a loan under which AJAO may borrow up to $48.1~~$1.0 million ~~including a $6.0~~and $2.2 million interest reserve (the “AJAO loan”). Interest on the AJAO loan accrues at 10.0% per annum and matures on the earliest of: (i) December 21, 2020, which may be extended by AJAO under two one-year extension options, (ii) the maturity date or earlier terminationwere deferred as of the senior construction loan or (iii) the date the Company exercises the Second Option as described further below. In the event that the Company exercises the First Option, AJAO is required to simultaneously pay down both the senior construction loan and the AJAO loan by 80%, at which time the interest rate on the AJAO loan will automatically be reduced to the interest rate on the senior construction loan. In the event the Company exercises the Second Option, AJAO is required to simultaneously repay any remaining amounts outstanding under the AJAO loan, with any excess proceeds received from the exercise of the Second Option applied against the remaining balance of the senior construction loan. In the event that the Company does not exercise either the First Option or the Second Option, the interest rate on the AJAO loan will automatically be reduced to the interest rate on the senior construction loan for the remaining term of the AJAO loan.

~~As of September~~June 30, ~~2017~~2022 and December 31, ~~2016,~~2021, respectively. Amortization of pre-contract costs for the ~~Company had funded $41.9~~six months ended June 30, 2022 and 2021 was $0.5 million and ~~$38.9~~$0.2 million, ~~respectively, on~~respectively.

Construction receivables and payables include retentions, which are amounts that are generally withheld until the ~~AJAO loan. During~~completion of the ~~three months ended September~~contract or the satisfaction of certain restrictive conditions such as fulfillment guarantees. As of June 30, ~~2017~~2022 and ~~2016, the Company recognized $1.1~~December 31, 2021, construction receivables included retentions of $9.4 million and ~~$0.7 million, respectively, of interest income on the AJAO loan. During the nine months ended September 30, 2017 and 2016, the Company recognized~~ $3.1 million, respectively. The Company expects to collect substantially all construction receivables outstanding as of June 30, 2022 during the next twelve months. As of June 30, 2022 and ~~$1.1~~December 31, 2021, construction payables included retentions of $10.3 million ~~respectively,~~and $4.2 million, respectively. The Company expects to pay substantially all construction payables outstanding as of ~~interest income on~~June 30, 2022 during the ~~AJAO loan. AJAO is current on the AJAO loan.~~next twelve months.

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The Company’s net position on uncompleted construction contracts comprised the following as of June 30, 2022 and December 31, 2021 (in thousands):

~~Management has concluded that this entity is~~


	June 30, 2022		December 31, 2021
Costs incurred on uncompleted construction contracts	$	411,547	$	379,993
Estimated earnings	16,423		15,115
Billings	(442,552)		(399,746)
Net position	$	(14,582)	$	(4,638)

Construction contract costs and estimated earnings in excess of billings	$	493	$	243
Billings in excess of construction contract costs and estimated earnings	(15,075)		(4,881)
Net position	$	(14,582)	$	(4,638)

The above table reflects the net effect of projects closed as of June 30, 2022 and December 31, 2021, respectively.

The Company’s balances and changes in construction contract price allocated to unsatisfied performance obligations (backlog) as of June 30, 2022 and 2021 were as follows (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Beginning backlog	$	419,439	$	38,838	$	215,518	$	71,258
New contracts/change orders	167,143		50,278		395,746		53,402
Work performed	(45,368)		(18,897)		(70,050)		(54,441)
Ending backlog	$	541,214	$	70,219	$	541,214	$	70,219

The Company expects to complete a ~~VIE. Because AJAO is the developer of Annapolis Junction, the Company does not have the power to direct the activities~~majority of the ~~project that most significantly impact its performance, nor is~~uncompleted contracts in place as of June 30, 2022 during the Company the party most closely associated with the project. Therefore, the Company is not the project's primary beneficiary and does not consolidate the project in its consolidated financial statements.next 12 to 24 months.

~~Decatur~~

On May 15, 2017, the Company invested in the development of a $34 million Whole Foods anchored center located in Decatur, Georgia. The Company's investment is in the form of a mezzanine loan of up to $21.8 million to the developer, North Decatur Square Holdings, LLC ("NDSH"). The mezzanine loan bears interest at an annual rate of 15%. The note matures on the earliest of (i) May 15, 2022, (ii) the maturity of the senior construction loan, (iii) the sale of NDSH or (iv) the sale of the center. NDSH is current on this loan.

As of September 30, 2017, the Company had funded $11.4 million on this loan. During the three and nine months ended September 30, 2017, the Company recognized $0.4 million and $0.6 million, respectively, of interest income on this loan.

~~Subsequent to September 30, 2017~~

~~Delray Plaza~~

On October 27, 2017, the Company invested in the development of a $20.0 million Whole Foods anchored center located in Delray Beach, Florida. The Company's investment is in the form of a mezzanine loan of up to $13.1 million to the developer, Delray Plaza Holdings, LLC ("DPH"). The mezzanine loan bears interest at an annual rate of 15%. The note matures on the earliest of (i) October 27, 2020, (ii) the date of any sale or refinance of the development project, or (iii) the disposition or change in control of the development project. The Company has funded $5.9 million of this loan.

7.8. Indebtedness

Credit Facility

~~On February 20, 2015, the Operating Partnership, as borrower, and the~~The Company ~~as parent guarantor, entered into~~has a ~~$200.0 million~~ senior ~~unsecured~~ credit facility ~~(the "credit facility")~~ that ~~included~~was amended and restated on October 3, 2019, which provides for a $355.0 million credit facility comprised of a $150.0 million senior unsecured revolving credit facility (the "revolving credit facility") and a ~~$50.0~~$205.0 million senior unsecured term loan ~~facility. During 2016, the Company increased the borrowing capacity under the term~~facility (the "term loan facility to $100.0 million. During the first quarter of 2017, the Company increased the borrowing capacity under the term loan facility to $125.0 million, increasing the total capacity of the credit facility to $275.0 million pursuant to the accordion feature.

~~Depending on the Operating Partnership’s total leverage,~~facility" and, together with the revolving credit facility, ~~bore~~the "credit facility"), with a syndicate of banks.

The credit facility includes an accordion feature that allows the total commitments to be further increased to $700.0 million, subject to certain conditions, including obtaining commitments from any one or more lenders. The revolving credit facility has a scheduled maturity date of January 24, 2024, with 2 six-month extension options, subject to certain conditions, including payment of a 0.075% extension fee at each extension. The term loan facility has a scheduled maturity date of January 24, 2025.

The revolving credit facility bears interest at ~~LIBOR (the~~the London Inter-Bank Offered ~~Rate)~~Rate ("LIBOR") plus a margin ranging from ~~1.40%~~1.30% to ~~2.00%~~1.85% and the term loan facility ~~bore~~bears interest at LIBOR plus a margin ranging from ~~1.35%~~1.25% to ~~1.95%~~1.80%, in each case depending on the Company's total ~~leverage as defined~~leverage. The Company is also obligated to pay an unused commitment fee of 0.15% or 0.25% on the unused portions of the commitments under the revolving credit facility, depending on the amount of borrowings under the credit ~~agreement.~~ facility.

As of ~~September~~June 30, ~~2017,~~2022 and December 31, 2021, the outstanding balance on the revolving credit facility was $82.0 million and $5.0 million, respectively. The outstanding balance on the term loan facility was $205.0 million as of both dates. As of June 30, 2022, the effective interest rates on the revolving credit facility and the term loan facility were ~~2.78%~~3.29% and ~~2.74%~~3.24%, respectively. As of September 30, 2017, the revolving credit facility had a scheduled maturity date of February 20, 2019, with a one-year extension option, subject to certain conditions, and the term loan facility had a scheduled maturity date of February 20, 2020. The ~~Operating Partnership~~Company may, at any time, voluntarily prepay any loan under the credit facility in whole or in part without premium or penalty.

AsThe Operating Partnership is the borrower, and its obligations under the credit facility are guaranteed by the Company and

Table of ~~September 30, 2017,~~Contents

certain of its subsidiaries that are not otherwise prohibited from providing such guaranty. The credit agreement contains customary representations and warranties and financial and other affirmative and negative covenants. The Company's ability to borrow under the ~~outstanding balances~~credit facility is subject to ongoing compliance with a number of financial covenants, affirmative covenants, and other restrictions. The credit agreement includes customary events of default, in certain cases subject to customary cure periods. The occurrence of an event of default, if not cured within the applicable cure period, would permit the lenders to, among other things, declare the unpaid principal, accrued and unpaid interest, and all other amounts payable under the credit facility to be immediately due and payable.

The Company is currently in compliance with all covenants governing the credit facility.

Other 2022 Financing Activity

On January 5, 2022, the Company contributed $2.6 million to the Harbor Point Parcel 3 joint venture in order to meet the lender's equity funding requirement since a $15.0 million standby letter of credit, which was available for draw down on the revolving credit facility ~~and~~in the ~~term loan facility were $58.0 million and $125.0 million, respectively.~~event the Company did not meet its equity requirement, expired on January 4, 2022.

~~Subsequent to September 30, 2017~~

On ~~October 26, 2017,~~January 14, 2022, the Company ~~amended~~acquired a 79% membership interest and ~~restated~~an additional 11% economic interest in the ~~credit facility (the "amended credit facility") to (i) extend~~partnership that owns the ~~maturity date of~~mixed-use property known as the ~~revolving credit facility to October 2021 (with options to extend up to October 2022,~~Exelon Building. The property was subject to ~~certain conditions) and (ii) extend the maturity date of the term~~a $156.1 million loan, facility to October 2022. The borrowing capacity under the term loan facility was increased to $150.0 million, increasing the total capacity of the amended credit facility to $300.0 million. The determination of interest rates charged under the amended credit facility remained unchanged.

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~~In October 2017,~~which the Company ~~increased its borrowings under~~immediately refinanced following the ~~revolving credit facility by $8.0~~acquisition with a new $175.0 million loan. The new loan bears interest at a rate of BSBY plus a spread of 1.50% and ~~in conjunction with the closing of the amended credit facility, increased its borrowings under the term loan facility by $25.0 million.~~will mature on November 1, 2026.

~~Other Financing Activity~~

On ~~February 1, 2017,~~January 19, 2022, the Company paid off the ~~North Point Center Note 5 in full for $0.6 million.~~$14.1 million balance of the loan secured by the Delray Beach Plaza shopping center.

On ~~February 24, 2017, the Company secured a $29.8 million construction loan for the Harding Place project in Charlotte, North Carolina.~~

~~On April 7, 2017,~~March 3, 2022, the Company paid off the ~~Harrisonburg Regal note in full for $3.2 million.~~$10.3 million balance of the loan secured by the Red Mill West Commons shopping center.

On April ~~19, 2017,~~25, 2022, Harbor Point Parcel 3, a joint venture to which the Company is party, entered into a ~~second amendment to the credit~~construction loan agreement for $161.5 million.

On April 25, 2022, Harbor Point Parcel 4, a real estate venture to which the ~~Lightfoot Marketplace~~Company is party, entered into a construction loan ~~which amended certain definitions and covenant requirements.~~agreement for $109.7 million.

On June 29, ~~2017, the Company secured a $27.9 million construction loan for the Town Center Phase VI project in Virginia Beach, Virginia.~~

~~On July 13, 2017,~~2022, the Company paid off the ~~remaining~~$1.9 million loan balance ~~of $4.9 million for the note secured by the Commonwealth of Virginia building in Chesapeake, Virginia~~associated with North Pointe Phase II in conjunction with the sale of ~~this property.~~the property leased and occupied by Costco.

On ~~August 9, 2017,~~June 30, 2022, the Company refinanced the ~~Hanbury Village note.~~$20.1 million loan secured by Nexton Square. The new ~~note matures in August 2022 and~~$22.5 million loan bears interest at a rate of Secured Overnight Financing Rate ("SOFR") plus a spread of 1.95% (SOFR has a ~~fixed annual interest rate of 3.78%.~~0.30% floor) and will mature on June 30, 2027.

~~On August 10, 2017, the Company paid off $0.7 million of the Sandbridge Commons note in conjunction with the sale of a land outparcel at this property.~~

~~On September 1, 2017, the Company entered into a modification of The Cosmopolitan note, which reduced the interest rate from 3.75% to 3.35%.~~

During the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2022, the Company borrowed ~~$3.6~~$26.9 million under its existing construction loans to fund new development and construction.

~~Subsequent to September 30, 2017~~

~~On October 13, 2017, the Company paid off $5.0 million of the Liberty Apartments note.~~

8.9. Derivative Financial Instruments

The Company ~~may enter~~enters into interest rate derivative contracts to manage exposure to interest rate risks. The Company does not use derivative financial instruments for trading or speculative purposes. Derivative financial instruments are recognized at fair value and presented within other assets and other liabilities in the condensed consolidated balance sheets. Gains and losses resulting from changes in the fair value of derivatives that are neither designated nor qualify as hedging instruments are recognized within the change in fair value of interest rate derivatives in the condensed consolidated statements of comprehensive income. For derivatives that qualify as cash flow hedges, ~~the effective portion of~~ the gain or loss is reported as a component of other comprehensive ~~loss~~income (loss) and reclassified into earnings in the periods during which the hedged forecasted transaction affects earnings.

~~On February~~

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As of June 30, 2022, the Company had the following LIBOR, SOFR, and BSBY interest rate caps ($ in thousands):

Effective Date

Maturity Date

Notional Amount

Strike Rate

Premium Paid

7/1/2020

7/1/2023

100,000

(a)

0.50% (LIBOR)

232

11/1/2020

11/1/2023

84,375

(a)

1.84% (SOFR)

2/2/2021

2/1/2023

100,000

0.50% (LIBOR)

3/4/2021

4/1/2023

14,479

2.50% (LIBOR)

5/5/2021

5/1/2023

50,000

0.50% (LIBOR)

5/5/2021

5/1/2023

35,100

0.50% (LIBOR)

6/16/2021

7/1/2023

100,000

0.50% (LIBOR)

120

1/11/2022

2/1/2024

175,000

4.00% (BSBY)

154

4/7/2022

2/1/2024

175,000

(a)

1.00%-3.00% (BSBY)

(b)

3,595

9/1/2022

9/1/2024

73,562

(a)

1.00%-3.00% (SOFR)

(b)(c)

1,370

Total

907,516

5,741

(a) Designated as a cash flow hedge.

(b) The Company purchased interest rate caps at 1.00% and sold interest rate caps at 3.00%, resulting in interest rate cap corridors of 1.00% and 3.00%. The intended goal of these corridors is to provide a level of protection from the effect of rising interest rates and reduce the all-in cost of the derivative instrument.

(c) The Company purchased this interest rate cap corridor during the three months ended June 30, 2022 with an effective date of September 1, ~~2017,~~2022. The notional amount represents the ~~North Point Center Note 5 was paid~~maximum notional amount that will eventually be in ~~full, which terminated~~effect. The notional amount is scheduled to increase over the term of the corridor in accordance with projected borrowings on the associated loan.

As of June 30, 2022, the Company held the following floating-to-fixed interest rate swaps ($ in thousands):


Related Debt	Notional Amount			Index	Swap Fixed Rate		Debt effective rate		Effective Date	Expiration Date
Senior unsecured term loan	$	50,000	(a)	1-month LIBOR	2.26	%	3.71	%	4/1/2019	10/26/2022
Senior unsecured term loan	50,000			1-month LIBOR	2.78	%	4.23	%	5/1/2018	5/1/2023
249 Central Park Retail, South Retail, and Fountain Plaza Retail	33,115		(a)	1-month LIBOR	2.25	%	3.85	%	4/1/2019	8/10/2023
Senior unsecured term loan	10,500		(a)	1-month LIBOR	3.02	%	4.47	%	10/12/2018	10/12/2023
Senior unsecured term loan	25,000		(a)	1-month LIBOR	0.50	%	1.95	%	4/1/2020	4/1/2024
Senior unsecured term loan	25,000		(a)	1-month LIBOR	0.50	%	1.95	%	4/1/2020	4/1/2024
Senior unsecured term loan	25,000		(a)	1-month LIBOR	0.55	%	2.00	%	4/1/2020	4/1/2024
Thames Street Wharf	70,044		(a)	1-month BSBY	1.05	%	2.35	%	9/30/2021	9/30/2026
Total	$	288,659

(a) Designated as a cash flow hedge.

For the interest rate swaps and caps designated as cash flow hedges, realized losses are reclassified out of accumulated other comprehensive loss to interest expense in the condensed consolidated statements of comprehensive income due to payments made to the swap ~~agreement associated with~~counterparty. During the ~~note. The loss on~~next 12 months, the Company anticipates recognizing approximately $7.3 million of net hedging gains as reductions to interest ~~rate swap agreement was not significant.~~expense. These amounts will be reclassified from accumulated other comprehensive gain into earnings to offset the variability of the hedged items during this period.

~~On February 7, 2017, the Operating Partnership entered into a LIBOR interest rate cap agreement on a notional amount of~~

~~$50.0 million at a strike rate of 1.50% for a premium of less than $0.2 million. The interest rate cap agreement expires on March 1, 2019.~~

On June 23, 2017, the Operating Partnership entered into a LIBOR interest rate cap agreement on a notional amount of $50.0 million at a strike rate of 1.50% for a premium of less than $0.2 million. The interest rate cap agreement expires on July 1, 2019.

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On September 18, 2017, the Operating Partnership entered into a LIBOR interest rate cap agreement on a notional amount of $50.0 million at a strike rate of 1.50% for a premium of less than $0.2 million. The interest rate cap agreement expires on October 1, 2019.

The Company’s derivatives were comprised of the following as of ~~September~~June 30, ~~2017~~2022 and December 31, ~~2016~~2021 (in thousands):


	June 30, 2022						December 31, 2021
	Notional Amount		Fair Value				Notional Amount		Fair Value
			Asset		Liability				Asset		Liability
Derivatives not designated as accounting hedges
Interest rate swaps	$	50,000	$	90	$	—	$	50,000	$	—	$	(1,454)
Interest rate caps	474,579		6,519		—		399,579		1,019		—
Total derivatives not designated as accounting hedges	524,579		6,609		—		449,579		1,019		(1,454)
Derivatives designated as accounting hedges
Interest rate swaps	238,659		8,453		—		239,633		1,317		(2,013)
Interest rate caps	360,472		9,208		—		384,375		590		—
Total derivatives	$	1,123,710	$	24,270	$	—	$	1,073,587	$	2,926	$	(3,467)

September 30, 2017 December 31, 2016
(Unaudited)

Notional
Amount
Fair Value
Notional
Amount
Fair Value
Asset Liability Asset Liability
Interest rate swaps $ 56,124
$ 10
$ (447 ) $ 56,901
$ —
$ (829 )
Interest rate caps 370,000
707
—
270,000
259
—
Total $ 426,124
$ 717
$ (447 ) $ 326,901
$ 259
$ (829 )

The changes in the fair value of the Company’s derivatives during the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2022 and ~~2016~~2021 were comprised of the following (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Interest rate swaps	$	2,807	$	(86)	$	9,564	$	2,375
Interest rate caps	3,817		(35)		8,999		207
Total change in fair value of interest rate derivatives	$	6,624	$	(121)	$	18,563	$	2,582
Comprehensive income statement presentation:
Change in fair value of derivatives and other	$	2,674	$	348	$	6,891	$	775
Unrealized cash flow hedge gains (losses)	3,950		(469)		11,672		1,807
Total change in fair value of interest rate derivatives	$	6,624	$	(121)	$	18,563	$	2,582

Three Months Ended
September 30, Nine Months Ended
September 30,
2017 2016 2017 2016
(Unaudited)
Interest rate swaps $ 124
$ 481
$ 392
$ (2,007 )
Interest rate caps (37 ) 17
(92 ) (257 )
Total change in fair value of interest rate derivatives $ 87
$ 498
$ 300
$ (2,264 )

9.10. Equity

Stockholders’ Equity

On ~~May 4, 2016,~~March 10, 2020, the Company commenced an at-the-market continuous equity offering program (the ~~“ATM Program”~~"ATM Program") through which the Company ~~could,~~may, from time to time, issue and sell shares of its common stock and shares of its 6.75% Series A Cumulative Redeemable Perpetual Preferred Stock (the "Series A Preferred Stock") having an aggregate offering price of up to ~~$75.0 million.~~ $300.0 million, to or through its sales agents and, with respect to shares of its common stock, may enter into separate forward sales agreements to or through the forward purchaser.

During the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2022, the Company issued and sold ~~an aggregate of 450,690~~475,074 shares of common stock at a weighted average price of ~~$14.08~~$15.21 per share under the ATM Program, receiving net proceeds, after offering costs and commissions, of ~~$6.2~~$7.1 million. During the six months ended June 30, 2022, the Company did not issue any shares of Series A Preferred Stock under the ATM Program. Shares having an aggregate offering price of $205.0 million remained unsold under the ATM Program as of August 4, 2022.

On ~~May 12, 2017,~~January 11, 2022, the Company completed an underwritten public offering of ~~6.9 million~~4,025,000 shares of common stock, which were pre-purchased from the Company by the underwriter at a ~~public offering~~purchase price of ~~$13.00~~$14.45 per share ~~which resulted~~of common stock including fees, resulting in net proceeds after offering costs ~~and commissions~~ of ~~$85.3~~$58.0 million.

As of September 30, 2017 and December 31, 2016, the Company’s authorized capital was 500 million shares of common stock and 100 million shares of preferred stock. The Company had 44,936,652 and 37,490,361 shares of common stock issued and outstanding as of September 30, 2017 and December 31, 2016, respectively. No shares of preferred stock were issued and outstanding as of September 30, 2017 or December 31, 2016.

~~Redeemable Noncontrolling Interests~~

~~The noncontrolling interest holder of Johns Hopkins Village has the option to redeem the 20% noncontrolling interest in that entity (the "Put Option"). Currently, the Put Option may be redeemed for~~ ~~$2.0 million~~ in cash or the equivalent amount in Class A units of limited partnership interest in the Operating Partnership ("Class A Units"), which is in the holder's control. Beginning in August 2018, the Put Option may be settled for the fair value of the 20% noncontrolling interest in Johns Hopkins Village, as determined by appraised value. Because the method of the Put Option's redemption is outside of the Company's control, it has been included in temporary equity. If the Put Option is exercised for redemption in the form of Class A Units, the noncontrolling interest will be reclassified into permanent equity.

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Noncontrolling Interests

As of ~~September~~June 30, ~~2017~~2022 and December 31, ~~2016,~~2021, the Company held a ~~71.6%~~76.7% and ~~68.1%~~75.3% common interest ~~respectively,~~ in the Operating ~~Partnership.~~Partnership, respectively. As of June 30, 2022, the Company also held a preferred interest in the Operating Partnership in the form of preferred units with a liquidation preference of $171.1 million. The Company is the primary beneficiary of the

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Operating Partnership as it has the power to direct the activities of the Operating Partnership and the rights to absorb ~~71.6%~~76.7% of the net income of the Operating Partnership. As the primary beneficiary, the Company consolidates the financial position and results of operations of the Operating Partnership. Noncontrolling interests in the ~~Company~~Operating Partnership represent units of limited partnership interest in the Operating Partnership not held by the Company. As of June 30, 2022, there were 20,621,336 Class A units of limited partnership interest in the Operating Partnership ("Class A Units") not held by the Company. The Company's financial position and results of operations are the same as those of the Operating Partnership.

Additionally, the Operating Partnership owns a majority interest in certain non-wholly-owned operating and development properties. The noncontrolling interest for investment entities of $24.0 million relates to the ~~consolidated~~minority partners' interest in certain joint venture entities ~~under development or construction (see Note 1) was zero~~ as of ~~September~~June 30, ~~2017 and~~2022, including $23.3 million for minority partners’ interest in the Exelon Building. The noncontrolling interest for consolidated real estate entities was $0.6 million as of December 31, ~~2016.~~2021.

~~As of September 30, 2017, there were 17,570,512 Class A Units not held by the Company.~~

As partial consideration for the acquisition of Columbus Village, the Operating Partnership issued 1,000,000 Class B Units on July 10, 2015 and issued 275,000 Class C Units on January 10, 2017. The Class B Units were automatically converted to Class A Units on July 10, 2017. Subject to the occurrence of certain events, the Class C Units will not earn or accrue distributions until January 10, 2018, at which time they automatically will convert into Class A Units.

On January ~~10, 2017, the Operating Partnership issued 68,691 Class A Units to acquire the remaining 20% interest in the Town Center Phase VI project.~~

~~Common Stock Dividends and Class A Unit Distributions~~

~~On January 5, 2017, the Company paid cash dividends of $6.7 million to common stockholders and the Operating Partnership paid cash distributions of $3.0 million~~1, 2022, due to holders of Class A ~~Units.~~

~~On April 6, 2017, the Company paid cash dividends of $7.2 million to common stockholders and the Operating Partnership paid cash distributions of $3.2 million to holders of Class A Units.~~

~~On July 6, 2017, the Company paid dividends of~~ ~~$8.6 million~~ ~~to common stockholders and the Operating Partnership paid cash distributions of~~ ~~$3.1 million~~ ~~to holders of Class A Units.~~

On August 4, 2017, the Board of Directors declared a cash dividend and distribution of $0.19 per share and unit payable on October 5, 2017 to stockholders and unitholders of record on September 27, 2017.

~~Subsequent to September 30, 2017~~

~~On October 2, 2017, due to the request of holders of Class A~~ Units ~~to tender~~tendering an aggregate of ~~358,879 units~~12,149 Class A Units for redemption by the Operating Partnership, the Company elected to satisfy the redemption requests ~~with~~through the issuance of an ~~aggregate cash payment~~equal number of ~~$4.9 million.~~shares of common stock.

~~On October 5, 2017,~~Dividends and Distributions

During the ~~Company paid dividends of $8.5 million to common stockholders and~~six months ended June 30, 2022, the ~~Operating Partnership paid cash~~ following dividends/distributions ~~of $3.3 million to holders of Class A Units.~~were declared or paid:

Equity type

Declaration Date

Record Date

Payment Date

Dividends per Share/Unit

Aggregate Dividends/Distributions on Stock and Units (in thousands)

Common Stock/Class A Units

10/25/2021

12/29/2021

01/06/2022

0.17

14,209

Common Stock/Class A Units

02/23/2022

03/30/2022

04/07/2022

0.17

15,014

Common Stock/Class A Units

05/12/2022

06/29/2022

07/07/2022

0.17

15,020

Series A Preferred Stock

10/25/2021

01/03/2022

01/14/2022

0.421875

2,887

Series A Preferred Stock

02/23/2022

04/01/2022

04/15/2022

0.421875

2,887

Series A Preferred Stock

05/12/2022

07/01/2022

07/15/2022

0.421875

2,887

~~10.~~

11. Stock-Based Compensation

~~On June 14, 2017, the Company's stockholders approved the Company's~~The Company’s Amended and Restated 2013 Equity Incentive Plan (the ~~"Amended~~"Equity Plan")~~, which, among~~ permits the grant of restricted stock awards, stock options, stock appreciation rights, performance units, and other ~~things, increased the number~~equity-based awards up to an aggregate of 1,700,000 shares of ~~the Company's~~ common ~~stock reserved for issuance under the Amended Plan by 1,000,000 shares, from 700,000 shares to 1,700,000 shares.~~stock. As of ~~September~~June 30, ~~2017,~~2022, there were ~~1,084,942~~398,307 shares available for issuance under the ~~Amended~~Equity Plan.

During the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2022, the Company granted an aggregate of ~~117,201~~286,086 shares of restricted stock to employees and non-employee directors with a weighted average grant date fair value of ~~$14.03~~$14.62 per share. Of those shares, 52,088 were surrendered by the employees for income tax withholdings. Employee restricted stock awards generally vest over a period of two years: one-third immediately on the grant date and the remaining two-thirds in equal amounts on the first two anniversaries following the grant date, subject to continued service to the Company. Beginning with grants made in 2021, executive officers' restricted shares generally vest over a period of three years: two-fifths immediately on the grant date and the remaining three-fifths in equal amounts on the first three anniversaries following the grant date, subject to continued service to the Company. Non-employee director restricted stock awards vest either immediately upon grant or over a period of one year, subject to continued service to the Company.

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~~During the nine months ended September 30, 2017, the Company issued performance-based awards in the form of~~ Unvested restricted stock ~~units~~awards are entitled to certain employees. The performance period for these awards is three years, with a required two-year service period immediately following the expiration of the performance period. The compensation expense and the effect on the Company’s weighted average diluted shares calculation were immaterial.receive dividends from their grant date.

During the three months ended ~~September~~June 30, ~~2017~~2022 and ~~2016,~~2021, the Company recognized ~~$0.3~~$0.6 million and ~~$0.3~~$0.5 million, respectively, of stock-based compensation ~~expense.~~cost. During the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2022 and ~~2016,~~2021, the Company recognized ~~$1.4~~$2.4 million and ~~$1.2~~$1.7 million, respectively, of stock-based compensation ~~expense.~~cost. As of ~~September~~June 30, ~~2017,~~2022, there were ~~112,838~~221,693 nonvested restricted shares outstanding; the total unrecognized compensation expense related to nonvested restricted shares was ~~$0.8~~$2.3 million, which the Company expects to recognize over the next 2333 months.

~~11.~~

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12. Fair Value of Financial Instruments

Fair value measurements are based on assumptions that market participants would use in pricing an asset or a liability. The hierarchy for inputs used in measuring fair value is as follows:

Level 1—1 — quoted prices in active markets for identical assets or liabilities

Level 2—2 — observable inputs other than quoted prices in active markets for identical assets and liabilities

Level 3—3 — unobservable inputs

Except as disclosed below, the carrying amounts of the Company’s financial instruments approximate their fair ~~value.~~values. Financial assets and liabilities whose fair values are measured on a recurring basis using Level 2 inputs consist of interest rate swaps and caps. The Company measures the fair values of these assets and liabilities based on prices provided by independent market participants that are based on observable inputs using market-based valuation techniques.

Financial assets and liabilities whose fair values are not measured at fair value but for which the fair value is disclosed include the Company's notes receivable and indebtedness. The fair value is estimated by discounting the future cash flows of each instrument at estimated market rates consistent with the maturity, credit characteristics, and other terms of the arrangements, which are Level 3 inputs under the fair value hierarchy.

In certain cases, the inputs used to ~~measure~~estimate the fair value may fall into different levels of the fair value hierarchy. For disclosure purposes, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement.

The fair value of the Company’s long term debt is sensitive to fluctuations in interest rates. Discounted cash flow analysis based on Level 2 inputs is generally used to estimate the fair value of the Company’s long term debt. Considerable judgment is used to estimate the fair value of financial instruments. The estimates of fair value presented herein are not necessarily indicative of the amounts that could be realized upon disposition of the financial instruments.

The carrying amounts and fair values of the Company’s financial instruments ~~all of which are based on Level 2 inputs,~~ as of ~~September~~June 30, ~~2017~~2022 and December 31, ~~2016,~~2021 were as follows (in thousands):


	June 30, 2022				December 31, 2021
	Carrying Value		Fair Value		Carrying Value		Fair Value
Indebtedness, net (a)	$	1,164,713	$	1,158,485	$	958,910	$	976,520
Notes receivable, net	139,383		139,383		126,429		126,429
Interest rate swap liabilities	—		—		3,467		3,467
Interest rate swap and cap assets	24,270		24,270		2,926		2,926

(a) The values as of June 30, 2022 and December 31, 2021 include loans reclassified to liabilities related to assets held for sale.

September 30, 2017 December 31, 2016

Carrying
Value

Fair
Value

Carrying
Value

Fair
Value
(Unaudited)

Indebtedness $ 488,609
$ 491,026
$ 522,180
$ 527,414
Interest rate swap liabilities 447
447
829
829
Interest rate swap assets 10
10
—
—
Interest rate cap assets 707
707
259
259

~~12.~~13. Related Party Transactions

The Company provides general contracting ~~and real estate~~ services to certain related party entities that are ~~not~~ included in these condensed consolidated financial statements. Revenue and gross profit from construction contracts with ~~related party~~these entities ~~of the Company~~ for the three months ended ~~September~~June 30, ~~2017 and 2016 was less than $0.1~~2021 were $6.3 million and ~~$6.8~~$0.2 million, ~~respectively,~~respectively. Revenue and gross profit from ~~such~~construction contracts with these entities for the ~~three~~six months ended ~~September~~June 30, ~~2017 and 2016 was less than $0.1~~2021 were $18.7 million and ~~$0.3~~$0.7 million, respectively. Revenue and gross profit from construction contracts with ~~related party~~these entities of the Company for the nine months ended September 30, 2017 and 2016 was $7.4 million and $21.7 million, respectively, and gross profit from such contracts for the nine months ended September 30, 2017 and 2016 was $0.4 million and $0.8 million, respectively.

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~~Real estate services fees from affiliated entities of the Company were not significant~~ for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017 or 2016. In addition, affiliated entities also reimburse~~2022 were immaterial. There were no outstanding construction receivables due from related parties as of June 30, 2022 compared to $4.1 million outstanding at December 31, 2021.

The general contracting services described above include contracts with an aggregate price of $81.6 million with the developer of a mixed-use project, including an apartment building, retail space, and a parking garage located in Virginia Beach, Virginia. The developer is owned in part by certain executives of the Company, ~~for monthly maintenance~~not including the Chief Executive Officer and ~~facilities management services provided~~Chief Financial Officer. These contracts were executed in 2019 and were substantially complete as of September 10, 2021. Aggregate gross profit was projected at $3.9 million to the ~~properties. Cost reimbursements earned by~~Company, representing a gross profit margin of 5.1% as of June 30, 2022. As part of these contracts and per the requirements of the lender for this project, the Company ~~from affiliated entities were not significant~~issued a letter of credit for $9.5 million to secure certain performances of the Company's subsidiary construction company under the contracts, of which $1.9 million remains outstanding as of June 30, 2022.

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The Company provides general contracting services to the Harbor Point Parcel 3 and Harbor Point Parcel 4 partnerships. See Note 5 for more information. During the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2022, the Company recognized gross profit of $0.1 million and ~~2016.~~ $0.2 million, respectively, relating to these construction contracts.

The Operating Partnership entered into tax protection agreements that indemnify certain directors and executive officers of the Company from their tax liabilities resulting from the potential future sale of certain of the Company’s properties ~~within seven (or, in a limited number of cases, ten) years of the completion of the Company’s initial public offering and formation transactions completed on~~prior to May 13, 2013. In addition, the tax protection agreements provide that the Operating Partnership will offer certain of the original contributors, including certain of the Company’s directors and executive officers, the opportunity to guarantee debt, or, alternatively, to enter into a deficit restoration obligation, for ten years from the closing of the Company’s initial public offering in a manner intended to provide an allocation of Operating Partnership liabilities to the partner for U.S. federal income tax purposes. Pursuant to these tax protection agreements, certain of the Company’s executive officers have guaranteed approximately $0.3 million of the Operating Partnership’s outstanding debt as of September 30, 2017.2023.

The loan for the City Center joint venture is underwritten by a syndicate which includes Park Sterling Bank. The Chief Executive Officer of Park Sterling Bank is the Chairman of the Company’s Audit Committee.

~~13.~~14. Commitments and Contingencies

Legal Proceedings

The Company is from time to time involved in various disputes, lawsuits, warranty claims, environmental and other matters arising in the ordinary course of business. Management makes assumptions and estimates concerning the likelihood and amount of any potential loss relating to these matters.

The Company currently is a party to various legal ~~proceedings.~~proceedings, none of which management expects will have a material adverse effect on the Company’s financial position, results of operations, or liquidity. Management accrues a liability for litigation if an unfavorable outcome is determined to be probable and the amount of loss can be reasonably estimated. If an unfavorable outcome is determined to be probable and a range of loss can be reasonably estimated, management accrues the best estimate within the range; however, if no amount within the range is a better estimate than any other, the minimum amount within the range is accrued. Legal fees related to litigation are expensed as incurred. Management does not believe that the ultimate outcome of these matters, either individually or in the aggregate, could have a material adverse effect on the Company’s financial position or results of operations; however, litigation is subject to inherent uncertainties.

Under the Company’s leases, tenants are typically obligated to indemnify the Company from and against all liabilities, costs, and expenses imposed upon or asserted against it as owner of the properties due to certain matters relating to the operation of the properties by the tenant.

Guarantees

In connection with certain of the Company's mezzanine lending activities and equity method investments, the Company has made guarantees to pay portions of certain senior loans of third parties associated with the development projects. The following table summarizes the outstanding guarantees made by the Company as of June 30, 2022 (in thousands):


Development project	Payment guarantee amount		Guarantee liability
Interlock Commercial	$	37,450	$	1,346
Harbor Point Parcel 4 (a)	32,910		242
Total	$	70,360	$	1,588

(a) As of June 30, 2022, no amounts have been funded on this senior loan.

Commitments

The Company has a bonding line of credit for its general contracting construction business and is contingently liable under performance and payment bonds, bonds for cancellation of mechanics liens and defect bonds. Such bonds collectively totaled ~~$44.9~~$2.7 million and ~~$40.5~~$2.1 million as of ~~September~~June 30, ~~2017~~2022 and December 31, ~~2016,~~2021, respectively. In addition, as of June 30, 2022, the Company has an outstanding letter of credit for $1.9 million to secure certain performances of the Company's subsidiary construction company under a related party project.

Unfunded Loan Commitments

The Company has certain commitments related to its notes receivable investments that it may be required to fund in the future. The Company is generally obligated to fund these commitments at the request of the borrower or upon the occurrence of events outside of the Company's direct control. As of June 30, 2022, the Company had three notes receivable

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with a total of $19.3 million of unfunded commitments. If commitments are funded in the future, interest will be charged at rates consistent with the existing investments. As of June 30, 2022, the Company has recorded a $0.5 million CECL allowance that relates to the unfunded commitments, which was recorded as a liability in Other liabilities in the consolidated balance sheet. See Note 6 for more information.

15. Subsequent Events

The ~~Operating Partnership~~Company has ~~entered into standby letters of credit using~~evaluated subsequent events through the ~~available capacity under~~date on which this Quarterly Report on Form 10-Q was filed, the ~~senior unsecured credit facility. Letters of credit generally are available~~date on which these financial statements were issued, and identified the items below for ~~draw down in the event~~discussion.

Real Estate

On July 22, 2022, the Company ~~does~~sold The Residences at Annapolis Junction for a sale price of $150.0 million. This property was classified as held for sale as of June 30, 2022.

On July 26, 2022, the Company sold the AutoZone and Valvoline outparcels at Sandbridge Commons for a sale price of $3.5 million. The property was classified as held for sale as of June 30, 2022.

Indebtedness

On July 22, 2022, the Company paid off the $84.4 million loan secured by The Residences at Annapolis Junction in conjunction with the disposition mentioned above.

In July 2022, the Company had net paydowns of $31.0 million on the revolving credit facility.

Derivative Financial Instruments

On July 1, 2022, the Company modified and extended 2 interest rate caps with total notional amounts of $200.0 million and LIBOR strike rates of 0.50%, which were scheduled to expire on July 1, 2023. The modified agreements establish a SOFR corridor bought at 1.00% and sold at 3.00% on a $200.0 million notional amount, with the expiration date extended to March 1, 2024. The Company did not ~~perform. As~~pay a premium for this modification.

On July 5, 2022, the Company modified and extended an interest rate cap with a notional amount of ~~September 30, 2017~~$50.0 million and ~~December 31, 2016,~~a LIBOR strike rate of 0.50%, which was scheduled to expire on May 1, 2023. The modified agreement establishes a SOFR corridor bought at 1.00% and sold at 3.00% on a $50.0 million notional amount, with the expiration date extended to January 1, 2024. The Company paid a de minimis premium for this modification.

On July 5, 2022, the Company modified and extended the interest rate cap associated with the Chronicle Mill project with a notional amount of $35.1 million and a LIBOR strike rate of 0.50%, which was scheduled to expire on May 1, 2023. The modified agreement establishes a SOFR corridor bought at 1.00% and sold at 3.00% on a $35.1 million notional amount, with the expiration date extended to January 1, 2024. The Company paid a de minimis premium for this modification.

Equity

On July 1, 2022, due to a holder of Class A Units tendering 10,146 Class A Units for redemption by the Operating Partnership, ~~had total outstanding letters~~the Company elected to satisfy the redemption request with a cash payment of ~~credit~~$0.1 million.

On July 28, 2022, the Company announced that its board of ~~$4.1 million and $4.1 million, respectively.~~directors declared a cash dividend of $0.19 per common share for the third quarter of 2022. The ~~amounts outstanding at~~third quarter dividend will be payable in cash on October 6, 2022 to stockholders of record on September ~~30, 2017 and December 31, 2016 include $2.0 million relating~~28, 2022.

On July 28, 2022, the Company announced that its board of directors declared a cash dividend of $0.421875 per share of Series A Preferred Stock for the third quarter of 2022. The dividend will be payable in cash on October 14, 2022 to ~~construction projects and a $2.1 million letter~~stockholders of ~~credit related to the guarantee~~record on ~~the Point Street Apartments senior construction loan.~~

October 3, 2022.

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~~Review Report of Independent Registered Public Accounting Firm~~

~~Board of Directors and Stockholders of~~

~~Armada Hoffler Properties, Inc.~~

We have reviewed the condensed consolidated balance sheet of Armada Hoffler Properties, Inc. as of September 30, 2017, and the related condensed consolidated statements of income for the three and nine-month periods ended September 30, 2017 and 2016, the condensed consolidated statements of cash flows for the nine-month periods ended September 30, 2017 and 2016 and the condensed consolidated statement of equity for the nine-month period ended September 30, 2017. These financial statements are the responsibility of the Company’s management.

We conducted our review in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States), the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should be made to the condensed consolidated financial statements referred to above for them to be in conformity with U.S. generally accepted accounting principles.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet of Armada Hoffler Properties, Inc. as of December 31, 2016, and the related consolidated statements of comprehensive income, equity, and cash flows for the year then ended (not presented herein) and we expressed an unqualified audit opinion on those consolidated financial statements in our report dated March 1, 2017. In our opinion, the accompanying condensed consolidated balance sheet as of December 31, 2016, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

~~/s/ Ernst & Young LLP~~

~~Tysons, Virginia~~

~~November 1, 2017~~

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~~Item 2.~~	~~Management’s Discussion and Analysis of Financial Condition and Results of Operations~~

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

References to ~~“we,” “our,” “us,”~~"we," "our," "us," and ~~“our company”~~"our company" refer to Armada Hoffler Properties, Inc., a Maryland corporation, together with our consolidated subsidiaries, including Armada Hoffler, L.P., a Virginia limited partnership (the ~~“Operating Partnership”~~"Operating Partnership"), of which we are the sole general partner. The following discussion should be read in conjunction with the financial statements and notes thereto appearing elsewhere in this report.

Forward-Looking Statements

This report contains forward-looking statements within the meaning of the federal securities laws. We caution investors that any forward-looking statements presented in this report, or which management may make orally or in writing from time to time, are based on beliefs and assumptions made by, and information currently available to, management. When used, the words ~~“anticipate,” “believe,” “expect,” “intend,” “may,” “might,” “plan,” “estimate,” “project,” “should,” “will,” “result”~~"anticipate," "believe," "expect," "intend," "may," "might," "plan," "estimate," "project," "should," "will," "result," and similar expressions, which do not relate solely to historical matters, are intended to identify forward-looking statements. Such statements are subject to risks, uncertainties, and assumptions and are not guarantees of future performance, which may be affected by known and unknown risks, trends, uncertainties, and factors that are beyond our control. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated, or projected. We caution you that while forward-looking statements reflect our good faith beliefs when we make them, they are not guarantees of future performance and are impacted by actual events when they occur after we make such statements. We expressly disclaim any responsibility to update forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law. Accordingly, investors should use caution in relying on past forward-looking statements, which are based on results and trends at the time they are made, to anticipate future results or trends.

Forward-looking statements involve numerous risks and uncertainties and you should not rely on them as predictions of future events. Forward-looking statements depend on assumptions, data, or methods which may be incorrect or imprecise, and we may not be able to realize them. We do not guarantee that the transactions and events described will happen as described (or that they will happen at all). The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements:

•adverse economic or real estate developments, either nationally or in the markets in which our properties are ~~located;~~ located, including as a result of the COVID-19 pandemic;

▪our ~~failure~~ability to ~~develop the properties in our~~commence or continue construction and development ~~pipeline successfully,~~projects on the ~~anticipated timeline, or at the anticipated costs;~~ timeframes and terms currently anticipated;

•our failure to generate sufficient cash flows to service our outstanding indebtedness;

•defaults on, early terminations of, or non-renewal of leases by tenants, including significant tenants;

•bankruptcy or insolvency of a significant tenant or a substantial number of smaller tenants;

•the inability of one or more mezzanine loan borrowers to repay mezzanine loans in accordance with their contractual terms;

•difficulties in identifying or completing development, acquisition, or disposition opportunities;

•our failure to successfully operate developed and acquired properties;

•our failure to generate income in our general contracting and real estate services segment in amounts that we anticipate;

•fluctuations in interest rates and increased operating costs;

•our failure to obtain necessary outside financing on favorable terms or at all;

•our inability to extend the maturity of or refinance existing debt or comply with the financial covenants in the agreements that govern our existing debt;

•financial market fluctuations;

•risks that affect the general retail environment or the market for office properties or multifamily units;

•the competitive environment in which we operate;

•decreased rental rates or increased vacancy rates;

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•conflicts of interests with our officers and directors;

•lack or insufficient amounts of insurance;

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•environmental uncertainties and risks related to adverse weather conditions and natural disasters;

•other factors affecting the real estate industry generally;

•our failure to maintain our qualification as a real estate investment trust ~~(“REIT”~~("REIT") for U.S. federal income tax purposes;

•limitations imposed on our business and our ability to satisfy complex rules in order for us to maintain our qualification as a REIT for U.S. federal income tax purposes; ~~and~~

•changes in governmental regulations or interpretations thereof, such as real estate and zoning laws and increases in real property tax rates and taxation of ~~REITs.~~REITs; and

•potential negative impacts from changes to U.S. tax laws.

While forward-looking statements reflect our good faith beliefs, they are not guarantees of future performance. We disclaim any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, of new information, data or methods, future events, or other changes after the date of this Quarterly Report on Form 10-Q, except as required by applicable law. We caution investors not to place undue reliance on these forward-looking statements and urge investors to carefully review the disclosures we make concerning risks and uncertainties in the sections entitled ~~“Risk Factors”~~"Risk Factors" and ~~“Management’s~~"Management’s Discussion and Analysis of Financial Condition and Results of ~~Operations”~~Operations" in our most recent Annual Report on Form 10-K, as well as risks, uncertainties and other factors discussed in this Quarterly Report on Form 10-Q, and ~~identified in~~ other documents that we file from time to time with the ~~U.S.~~ Securities and Exchange Commission (the ~~“SEC”~~"SEC").

Business Description

We are a ~~full-service real estate company~~vertically-integrated, self-managed REIT with ~~extensive~~four decades of experience developing, building, ~~owning~~acquiring and managing high-quality ~~institutional-grade~~ office, retail and multifamily properties ~~in attractive markets~~located primarily ~~throughout~~in the Mid-Atlantic and Southeastern United States. We also provide general construction and development services to third-party clients, in addition to developing and building properties to be placed in our stabilized portfolio. As of ~~September~~June 30, ~~2017,~~2022, our operating property portfolio consisted of the following properties:



~~Property~~	~~Segment~~	~~Location~~	~~Ownership Interest~~
~~4525 Main Street~~	~~Office~~	Virginia Beach, Virginia*	~~100~~	%
~~Armada Hoffler Tower~~	~~Office~~	Virginia Beach, Virginia*	~~100~~	%
~~One Columbus~~	~~Office~~	Virginia Beach, Virginia*	~~100~~	%
~~Two Columbus~~	~~Office~~	Virginia Beach, Virginia*	~~100~~	%
~~249 Central Park Retail~~	~~Retail~~	Virginia Beach, Virginia*	~~100~~	%
~~Alexander Pointe~~	~~Retail~~	~~Salisbury, North Carolina~~	~~100~~	%
~~Bermuda Crossroads~~	~~Retail~~	~~Chester, Virginia~~	~~100~~	%
~~Broad Creek Shopping Center~~	~~Retail~~	~~Norfolk, Virginia~~	~~100~~	%
~~Broadmoor Plaza~~	~~Retail~~	~~South Bend, Indiana~~	~~100~~	%
~~Brooks Crossing~~⁽¹⁾	~~Retail~~	~~Newport News, Virginia~~	65	%
~~Columbus Village~~	~~Retail~~	Virginia Beach, Virginia*	~~100~~	%
~~Columbus Village II~~	~~Retail~~	Virginia Beach, Virginia*	~~100~~	%
~~Commerce Street Retail~~	~~Retail~~	Virginia Beach, Virginia*	~~100~~	%
~~Courthouse 7-Eleven~~	~~Retail~~	~~Virginia Beach, Virginia~~	~~100~~	%
~~Dick's at Town Center~~	~~Retail~~	Virginia Beach, Virginia*	~~100~~	%
~~Dimmock Square~~	~~Retail~~	~~Colonial Heights, Virginia~~	~~100~~	%
~~Fountain Plaza Retail~~	~~Retail~~	Virginia Beach, Virginia*	~~100~~	%
~~Gainsborough Square~~	~~Retail~~	~~Chesapeake, Virginia~~	~~100~~	%
~~Greentree Shopping Center~~	~~Retail~~	~~Chesapeake, Virginia~~	~~100~~	%
~~Hanbury Village~~	~~Retail~~	~~Chesapeake, Virginia~~	~~100~~	%
~~Harper Hill Commons~~	~~Retail~~	~~Winston-Salem, North Carolina~~	~~100~~	%
~~Harrisonburg Regal~~	~~Retail~~	~~Harrisonburg, Virginia~~	~~100~~	%
~~Lightfoot Marketplace~~⁽²⁾	~~Retail~~	~~Williamsburg, Virginia~~	70	%

Property

Segment

Location

Ownership Interest

4525 Main Street

Office

Virginia Beach, Virginia*

100

Armada Hoffler Tower

Office

Virginia Beach, Virginia*

100

Brooks Crossing Office

Office

Newport News, Virginia

100

Exelon Office

Office

Baltimore, Maryland**

(1)

One City Center

Office

Durham, North Carolina

100

One Columbus

Office

Virginia Beach, Virginia*

100

Thames Street Wharf

Office

Baltimore, Maryland**

100

Two Columbus

Office

Virginia Beach, Virginia*

100

249 Central Park Retail

Retail

Virginia Beach, Virginia*

100

Apex Entertainment

Retail

Virginia Beach, Virginia*

100

Broad Creek Shopping Center

Retail

Norfolk, Virginia

100

Broadmoor Plaza

Retail

South Bend, Indiana

100

Brooks Crossing Retail

Retail

Newport News, Virginia

(2)

Columbus Village

Retail

Virginia Beach, Virginia*

100

Columbus Village II

Retail

Virginia Beach, Virginia*

100

Commerce Street Retail

Retail

Virginia Beach, Virginia*

100

Delray Beach Plaza

Retail

Delray Beach, Florida

100

Dimmock Square

Retail

Colonial Heights, Virginia

100

Fountain Plaza Retail

Retail

Virginia Beach, Virginia*

100

Greenbrier Square

Retail

Chesapeake, Virginia

100

Greentree Shopping Center

Retail

Chesapeake, Virginia

100

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Property	Segment	Location	Ownership Interest
Hanbury Village	Retail	Chesapeake, Virginia	100	%
Harrisonburg Regal	Retail	Harrisonburg, Virginia	100	%
Lexington Square	Retail	Lexington, South Carolina	100	%
Market at Mill Creek	Retail	Mount Pleasant, South Carolina	70	%	(2)
Marketplace at Hilltop	Retail	Virginia Beach, Virginia	100	%
Nexton Square	Retail	Summerville, South Carolina	100	%
North Hampton Market	Retail	Taylors, South Carolina	100	%
North Pointe Center	Retail	Durham, North Carolina	100	%
Overlook Village	Retail	Asheville, North Carolina	100	%
Parkway Centre	Retail	Moultrie, Georgia	100	%
Parkway Marketplace	Retail	Virginia Beach, Virginia	100	%
Patterson Place	Retail	Durham, North Carolina	100	%
Perry Hall Marketplace	Retail	Perry Hall, Maryland	100	%
Premier Retail	Retail	Virginia Beach, Virginia*	100	%
Providence Plaza	Retail	Charlotte, North Carolina	100	%
Red Mill Commons	Retail	Virginia Beach, Virginia	100	%
Sandbridge Commons	Retail	Virginia Beach, Virginia	100	%	(3)
South Retail	Retail	Virginia Beach, Virginia*	100	%
South Square	Retail	Durham, North Carolina	100	%
Southgate Square	Retail	Colonial Heights, Virginia	100	%
Southshore Shops	Retail	Chesterfield, Virginia	100	%
Studio 56 Retail	Retail	Virginia Beach, Virginia*	100	%
Tyre Neck Harris Teeter	Retail	Portsmouth, Virginia	100	%
Wendover Village	Retail	Greensboro, North Carolina	100	%
1305 Dock Street	Multifamily	Baltimore, Maryland**	79	%	(1)
1405 Point	Multifamily	Baltimore, Maryland**	100	%
Edison Apartments	Multifamily	Richmond, Virginia	100	%
Encore Apartments	Multifamily	Virginia Beach, Virginia*	100	%
Greenside Apartments	Multifamily	Charlotte, North Carolina	100	%
Liberty Apartments	Multifamily	Newport News, Virginia	100	%
Premier Apartments	Multifamily	Virginia Beach, Virginia*	100	%
Smith's Landing	Multifamily	Blacksburg, Virginia	100	%
The Cosmopolitan	Multifamily	Virginia Beach, Virginia*	100	%
The Residences at Annapolis Junction	Multifamily	Annapolis Junction, Maryland	95	%	(2)(4)



~~Property~~	~~Segment~~	~~Location~~	~~Ownership Interest~~
~~North Hampton Market~~	~~Retail~~	~~Taylors, South Carolina~~	~~100~~	%
~~North Point Center~~	~~Retail~~	~~Durham, North Carolina~~	~~100~~	%
~~Oakland Marketplace~~	~~Retail~~	~~Oakland, Tennessee~~	~~100~~	%
~~Parkway Marketplace~~	~~Retail~~	~~Virginia Beach, Virginia~~	~~100~~	%
~~Patterson Place~~	~~Retail~~	~~Durham, North Carolina~~	~~100~~	%
~~Perry Hall Marketplace~~	~~Retail~~	~~Perry Hall, Maryland~~	~~100~~	%
~~Providence Plaza~~	~~Retail~~	~~Charlotte, North Carolina~~	~~100~~	%
~~Renaissance Square~~	~~Retail~~	~~Davidson, North Carolina~~	~~100~~	%
~~Sandbridge Commons~~	~~Retail~~	~~Virginia Beach, Virginia~~	~~100~~	%
~~Socastee Commons~~	~~Retail~~	~~Myrtle Beach, South Carolina~~	~~100~~	%
~~Southgate Square~~	~~Retail~~	~~Colonial Heights, Virginia~~	~~100~~	%
~~Southshore Shops~~	~~Retail~~	~~Chesterfield, Virginia~~	~~100~~	%
~~South Retail~~	~~Retail~~	Virginia Beach, Virginia*	~~100~~	%
~~South Square~~	~~Retail~~	~~Durham, North Carolina~~	~~100~~	%
~~Stone House Square~~	~~Retail~~	~~Hagerstown, Maryland~~	~~100~~	%
~~Studio 56 Retail~~	~~Retail~~	Virginia Beach, Virginia*	~~100~~	%
~~Tyre Neck Harris Teeter~~	~~Retail~~	~~Portsmouth, Virginia~~	~~100~~	%
~~Waynesboro Commons~~	~~Retail~~	~~Waynesboro, Virginia~~	~~100~~	%
~~Wendover Village~~	~~Retail~~	~~Greensboro, North Carolina~~	~~100~~	%
~~Encore Apartments~~	~~Multifamily~~	Virginia Beach, Virginia*	~~100~~	%
~~Johns Hopkins Village~~⁽³⁾	~~Multifamily~~	~~Baltimore, Maryland~~	80	%
~~Liberty Apartments~~	~~Multifamily~~	~~Newport News, Virginia~~	~~100~~	%
~~Smith's Landing~~	~~Multifamily~~	~~Blacksburg, Virginia~~	~~100~~	%
~~The Cosmopolitan~~	~~Multifamily~~	Virginia Beach, Virginia*	~~100~~	%


~~(1)~~	~~We are entitled to a preferred return of 8% on our investment in Brooks Crossing.~~


~~(2)~~	~~We are entitled to a preferred return of 9% on our investment in Lightfoot Marketplace.~~


~~(3)~~	~~See discussion of redeemable noncontrolling interest in Note 9 for additional information. We are entitled to a preferred return of 9% on our investment in Johns Hopkins Village.~~

*Located in the Town Center of Virginia Beach

**Located at Harbor Point in Baltimore

(1) We own a 90% economic interest in this property, including an 11% economic interest through a note receivable.

(2) We are entitled to a preferred return on our investment in this property.

(3) Held for sale as of June 30, 2022. On July 26, 2022, we sold the AutoZone and Valvoline outparcels of this property.

(4) Held for sale as of June 30, 2022. On July 22, 2022, we sold this property.

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As of ~~September~~June 30, ~~2017,~~2022, the following properties that we consolidate for financial reporting purposes were either under development or ~~construction:~~not yet stabilized:

Property

Segment

Location

Ownership Interest

Wills Wharf

Office

Baltimore, Maryland**

100

Chronicle Mill

Multifamily

Belmont, North Carolina

(1)

Gainesville Apartments

Multifamily

Gainesville, Georgia

(2)

Southern Post

Mixed-use

Roswell, Georgia

100



~~Property~~	~~Segment~~	~~Location~~	~~Ownership Interest~~
~~Town Center Phase VI~~	~~Mixed-use~~	Virginia Beach, Virginia*	~~100~~	%
~~Harding Place~~⁽¹⁾	~~Multifamily~~	~~Charlotte, North Carolina~~	80	%
~~595 King Street~~	~~Multifamily~~	~~Charleston, South Carolina~~	~~92.5~~	%
~~530 Meeting Street~~	~~Multifamily~~	~~Charleston, South Carolina~~	90	%

**Located at Harbor Point in Baltimore

(1) We are entitled to a preferred return ~~of 9%~~ on ~~a portion of~~ our investment in ~~Harding Place.~~this property.

*Located in(2) We were required to purchase our partner's ownership interest after completion of the ~~Town Center~~project, contingent upon obtaining a certificate of ~~Virginia Beach~~

~~Please see Note 5~~occupancy and achieving certain thresholds of net operating income. On April 11, 2022, we paid a $1.1 million earn-out to ~~our condensed consolidated financial statements in Item 1~~the partner due to the receipt of the certificate of occupancy. The remaining earn-out is estimated at $3.1 million and is expected to be paid out by the end of this ~~Quarterly Report on Form 10-Q for information~~year. Additionally, we anticipate there will be cost savings related to the development of the asset to be shared with our ~~investment in Durham City Center II, LLC, which is an unconsolidated subsidiary that we account for under the equity method of accounting.~~partner.

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Acquisitions ~~and Dispositions~~

On January ~~4, 2017,~~14, 2022, we acquired ~~undeveloped land~~a 79% membership interest and an additional 11% economic interest in ~~Charleston, South~~the partnership that owns the Exelon Building for a purchase price of approximately $92.2 million in cash and a loan to the seller of $12.8 million. The Exelon Building is a mixed-use structure located in Baltimore's Harbor Point and is comprised of an office building, the Exelon Office, that serves as the headquarters for Constellation Energy Corp., which was spun-off from Exelon, a Fortune 100 energy company, in February 2022, as well as a multifamily component, 1305 Dock Street. The Exelon Office also includes a parking garage and retail space. The Exelon Building was subject to a $156.1 million loan, which we immediately refinanced following the acquisition with a new $175.0 million loan. The new loan bears interest at a rate of the Bloomberg Short-Term Bank Yield Index ("BSBY") plus a spread of 1.50% and will mature on November 1, 2026. This loan is hedged by an interest rate cap corridor of 1.00% and 3.00% as well as an interest rate cap of 4.00%.

On January 14, 2022, we acquired the remaining 20% ownership interest in the partnership that is developing the Ten Tryon project in Charlotte, North Carolina for a ~~contract price~~cash payment of ~~$7.1 million plus capitalized acquisition costs of $0.2~~$3.9 million. ~~We intend~~

On April 11, 2022, we exercised our option to ~~use the land for the future development~~acquire an additional 16% of the ~~595 King Street property.~~partnership that owns The Residences at Annapolis Junction, increasing our ownership to 95%.

Equity Method Investments

On ~~January 20, 2017,~~April 1, 2022, we acquired a 78% interest in Harbor Point Parcel 4, a real estate venture with Beatty Development Group, for purposes of developing a mixed-use project, which is planned to include multifamily units, retail space, and a parking garage. We hold an option to increase our ownership to 90%. We have a projected equity commitment of $100.0 million relating to this project, of which we had funded $19.7 million as of June 30, 2022.

Dispositions

On April 1, 2022, we completed the sale of the ~~Wawa outparcel at Greentree Shopping Center. Net proceeds after transaction costs were $4.4~~Hoffler Place for a sale price of $43.1 million. The ~~gain on the disposition~~loss recognized upon sale was ~~$3.4~~$0.8 million.

On July 11, 2017, we acquired undeveloped land in Charleston, South Carolina for a contract price of $6.7 million plus capitalized acquisition costs of $0.1 million. We intend to use the land for the future development of the 530 Meeting Street property.

~~On July 13, 2017,~~April 25, 2022, we completed the sale of ~~two office properties leased by~~ the ~~Commonwealth~~Summit Place for a sale price of ~~Virginia in Chesapeake, Virginia and Virginia Beach, Virginia. Aggregate net proceeds from~~$37.8 million. The loss recognized upon sale was $0.5 million.

In addition to the ~~dispositions~~losses recognized on the sales of the Hoffler Place and Summit Place student-housing properties ~~after transaction costs and repayment~~during the three months ended June 30, 2022, we recognized impairment of real estate of $18.3 million to record these properties at their fair values during the ~~loan associated with the Chesapeake, Virginia property were $7.9 million, and the aggregate gain on the dispositions was $4.2 million.~~three months ended December 31, 2021.

On ~~July 25, 2017, we acquired the outparcel phase of Wendover Village in Greensboro, North Carolina for a contract price of $14.3 million plus capitalized acquisition costs of $0.1 million.~~

~~On August 10, 2017,~~June 29, 2022, we completed the sale of the Home Depot and Costco outparcels at North Pointe for a ~~land outparcel at Sandbridge Commons. Net proceeds after transaction costs and a partial loan paydown were $0.3~~sale price of $23.9 million. The gain on ~~the~~ disposition was ~~$0.5~~$20.9 million.

~~Third~~

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On July 22, 2022, we sold The Residences at Annapolis Junction for a sale price of $150.0 million. This property was classified as held for sale as of June 30, 2022.

On July 26, 2022, the Company sold the AutoZone and Valvoline outparcels at Sandbridge Commons for a sale price of $3.5 million. This property was classified as held for sale as of June 30, 2022.

Second Quarter ~~2017~~2022 and Recent Highlights

The following highlights our results of operations and significant transactions for the three months ended ~~September~~June 30, ~~2017:~~2022 and other recent developments:

•Net income attributable to common stockholders and holders of ~~$10.5~~units of limited partnership interest in the Operating Partnership ("OP Unitholders") of $27.8 million, or ~~$0.17~~$0.31 per diluted share, compared to ~~$7.9~~$5.6 million, or ~~$0.15~~$0.07 per diluted share, for the three months ended ~~September~~June 30, ~~2016.~~ 2021.

•Funds from operations attributable to common stockholders and OP Unitholders ("FFO") of ~~$15.5~~$27.0 million, or ~~$0.25~~$0.31 per diluted share, compared to ~~$13.1~~$22.9 million, or ~~$0.25~~$0.28 per diluted share, for the three months ended ~~September~~June 30, ~~2016.~~2021. See ~~“Non-GAAP~~"Non-GAAP Financial Measures.” "

•Normalized funds from operations (“available to common stockholders and OP Unitholders ("Normalized ~~FFO”~~FFO") of ~~$15.5~~$26.2 million, or ~~$0.25~~$0.30 per diluted share, compared to ~~$13.2~~$23.4 million, or ~~$0.26~~$0.29 per diluted share, for the three months ended ~~September~~June 30, ~~2016.~~2021. See ~~“Non-GAAP~~"Non-GAAP Financial Measures.”"

•~~Core~~Announced a third quarter cash dividend of $0.19 per common share, a 12% increase over the prior quarter's dividend.

•Stabilized operating property portfolio occupancy ~~at 94.7% as of September 30, 2017 compared~~increased to ~~94.2%~~97.3% as of June 30, ~~2017.~~2022. Office occupancy was 97.9%, retail occupancy was 97.1%, and multifamily occupancy was 97.2%.

•~~Property segment~~Same Store net operating income ~~(“NOI”~~("NOI") ~~of $17.6 million~~increased 6.0% on a GAAP (as defined below) basis compared to ~~$17.1 million for~~ the ~~three months~~quarter ended ~~September~~June 30, ~~2016:~~ 2021.

~~Office NOI of $2.8 million compared to $3.2 million~~

~~Retail NOI of $11.6 million compared to $10.7 million~~

~~Multifamily NOI of $3.1 million compared to $3.1 million~~

•~~Same store NOI of $13.8 million compared to $14.5 million for the three months ended September 30, 2016:~~

~~Office same store NOI of $1.9 million compared to $2.2 million~~

~~Retail same store NOI of $9.4 million compared to $9.6 million~~

◦Multifamily same store NOI ~~of $2.4 million compared to $2.7 million~~ increased 12.5% on a GAAP basis.

•~~General contracting and real estate services segment gross profit of $1.8 million compared to $1.3 million for the three months ended September 30, 2016.~~ ◦Commercial same store NOI increased 4.1% on a GAAP basis.

•~~Third party~~Third-party construction backlog totaling $541 million, highest in the Company's history

•Positive releasing spreads during the second quarter of ~~$76.7~~9.9% on a GAAP basis for retail and 13.1% on a GAAP basis for office.

•Achieved an 8.1% increase in rental rates on apartment trade outs across the multifamily segment.

•Completed $177 million of sales of noncore assets

◦The Residences at Annapolis Junction in Baltimore for $150 million

◦Two outparcels at North Pointe in Durham, North Carolina for $23.9 million

◦Two outparcels at Sandbridge Commons in Virginia Beach for $3.5 million

•Appointed Dennis H. Gartman, renowned investor, economist, and longtime publisher of “The Gartman Letter,” as a member of ~~September 30, 2017.~~ our board of directors. He is the sixth independent member.

•~~Declared cash dividends~~Executed a new office lease with Franklin Templeton for 60,000 square feet at the Company’s Wills Wharf office building in Baltimore’s Harbor Point neighborhood. The investment management firm has agreed to lease the entire fifth floor and a portion of ~~$0.19 per share~~the fourth floor of Wills Wharf and ~~Class A unit.~~will bring the building to 91% occupancy.

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Segment Results of Operations

As of ~~September~~June 30, ~~2017,~~2022, we operated our business in four segments: (i) office real estate, (ii) retail real estate, (iii) multifamily residential real estate, and (iv) general contracting and real estate services, which are conducted through our taxable REIT subsidiaries ~~(“TRS”~~("TRS"). Net operating income (segment revenues minus segment expenses)~~, or “NOI”,~~ ("NOI") is the measure used by management to assess segment performance and allocate our resources among our segments. NOI is not a measure of operating income or cash flows from operating activities as measured by accounting principles generally accepted in the United

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States ~~(“GAAP”~~("GAAP") and is not indicative of cash available to fund cash needs. As a result, NOI should not be considered an alternative to cash flows as a measure of liquidity. Not all companies calculate NOI in the same manner. We consider NOI to be an appropriate supplemental measure to net income because it assists both investors and management in understanding the core operations of our real estate and construction businesses. See Note 3 to our condensed consolidated financial statements in Item 1 of this Quarterly Report on Form 10-Q for a reconciliation of NOI to net ~~income.~~income, the most directly comparable GAAP measure.

We define same store properties as those properties that we owned and operated and that were stabilized for the entirety of both periods presented. ~~Same store properties exclude those that were in lease-up during either of the periods presented.~~ We generally consider a property to be ~~in lease-up until~~stabilized upon the earlier of: (i) the quarter after the property reaches 80% occupancy or (ii) the thirteenth quarter after the property receives its certificate of occupancy. Additionally, any property that is fully or partially taken out of service for the purpose of redevelopment is no longer considered stabilized until the redevelopment activities are complete, the asset is placed back into service, and the occupancy criterion above is again met. A property may also be fully or partially taken out of service as a result of a partial disposition, depending on the significance of the portion of the property disposed. Finally, any property classified as held for sale is taken out of service for the purpose of computing same store operating results.

~~Beginning with~~Office Segment Data

Office rental revenues, property expenses, and NOI for the three and six months ended ~~March 31, 2017, our calculation of core occupancy included,~~June 30, 2022 and ~~in future periods will include, the square footage from ground leases where we are the lessor. We did not retrospectively apply this new calculation methodology to prior periods. If we~~2021 were ~~to exclude these ground leases in the calculation of core occupancy, our core occupancy~~ as ~~of September 30, 2017 would have been 94.3%.~~follows (in thousands):

~~Office Segment Data~~


	Three Months Ended September 30,							Nine Months Ended September 30,
	2017		2016		Change			2017		2016		Change				Three Months Ended June 30,						Six Months Ended June 30,
	(unaudited, $ in thousands)															2022		2021		Change		2022		2021		Change
Rental revenues	$	4,762	$	5,277	$	(515	)	$	14,427	$	16,097	$	(1,670	)	Rental revenues	$	18,314	$	11,756	$	6,558	$	35,337	$	23,391	$	11,946
Property expenses	1,928		2,038		(110		)	5,519		5,857		(338		)	Property expenses	6,635		4,351		2,284		12,279		8,584		3,695
Segment NOI	$	2,834	$	3,239	$	(405	)	$	8,908	$	10,240	$	(1,332	)	Segment NOI	$	11,679	$	7,405	$	4,274	$	23,058	$	14,807	$	8,251

Office segment NOI for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017 decreased $0.4 million~~2022 increased 57.7% and ~~$1.3 million,~~55.7%, respectively, compared to the ~~corresponding periods in 2016. The decreases are~~three and six months ended June 30, 2021 primarily due to ~~decreased occupancy at Armada Hoffler Tower and property dispositions. The Richmond Tower office building, which was sold~~the acquisition of the Exelon Office in the first quarter of 2016, and the Oyster Point office building, which was sold in the third quarter of 2016, contributed $0.2 million and $0.9 million, respectively, in office segment NOI for the three and nine months ended September 30, 2016. The Commonwealth of Virginia-Chesapeake and Commonwealth of Virginia-Virginia Beach office buildings, which contributed an aggregate of $0.2 million and $0.8 million in office segment NOI for the three and nine months ended September 30, 2016, respectively, were sold in the third quarter of 2017.January 2022.

Office Same Store Results

Office same store results for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2022 and 2021 exclude ~~new real estate development – 4525 Main Street – as well as the Richmond Tower and Oyster Point office buildings, which we sold in the first quarter of 2016~~Wills Wharf and the ~~third quarter of 2016, respectively, and the Commonwealth of Virginia-Chesapeake and Commonwealth of Virginia-Virginia Beach office buildings, which were sold in the third quarter of 2017.~~Exelon Office.

~~Table of Contents~~

Office same store rental revenues, property expenses, and NOI for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2022 and ~~2016~~2021 were as ~~follows:~~follows (in thousands):


	Three Months Ended September 30,							Nine Months Ended September 30,
	2017		2016		Change			2017		2016		Change				Three Months Ended June 30,						Six Months Ended June 30,
	(unaudited, $ in thousands)															2022		2021		Change		2022		2021		Change
Rental revenues	$	3,378	$	3,595	$	(217	)	$	10,258	$	10,805	$	(547	)	Rental revenues	$	10,371	$	10,290	$	81	$	20,546	$	20,500	$	46
Property expenses	1,451		1,407		44			4,085		3,986		99			Property expenses	3,697		3,527		170		7,259		7,011		248
Same Store NOI	$	1,927	$	2,188	$	(261	)	$	6,173	$	6,819	$	(646	)	Same Store NOI	$	6,674	$	6,763	$	(89)	$	13,287	$	13,489	$	(202)
Non-Same Store NOI	907		1,051		(144		)	2,735		3,421		(686		)	Non-Same Store NOI	5,005		642		4,363		9,771		1,318		8,453
Segment NOI	$	2,834	$	3,239	$	(405	)	$	8,908	$	10,240	$	(1,332	)	Segment NOI	$	11,679	$	7,405	$	4,274	$	23,058	$	14,807	$	8,251

Office same store NOI for the three and ~~nine~~six months ended ~~September~~June 30, 2017 decreased 11.9% and 9.5%, respectively, compared to the corresponding periods in 2016 due to the expansion and relocation of a tenant from One Columbus to 4525 Main Street during the three months ended December 31, 2016 and the expansion and relocation of another tenant from Two Columbus to 4525 Main Street during the three months ended September 30, 2017. For2022 was materially consistent with the three and ~~nine~~six months ended ~~September~~June 30, 2017, the NOI from these tenants that relocated to 4525 Main Street are included in Non-Same Store NOI. In addition, decreased occupancy at the Armada Hoffler Tower contributed to the period-over-period decreases in office same store NOI.2021.

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Retail Segment Data

Retail rental revenues, property expenses, and NOI for the three and six months ended June 30, 2022 and 2021 were as follows (in thousands):


	Three Months Ended September 30,						Nine Months Ended September 30,
	2017		2016		Change		2017		2016		Change			Three Months Ended June 30,						Six Months Ended June 30,
	(unaudited, $ in thousands)													2022		2021		Change		2022		2021		Change
Rental revenues	$	15,880	$	14,340	$	1,540	$	47,089	$	41,485	$	5,604	Rental revenues	$	21,544	$	19,204	$	2,340	$	42,974	$	37,459	$	5,515
Property expenses	4,287		3,603		684		12,255		10,773		1,482		Property expenses	5,604		5,193		411		11,343		10,056		1,287
Segment NOI	$	11,593	$	10,737	$	856	$	34,834	$	30,712	$	4,122	Segment NOI	$	15,940	$	14,011	$	1,929	$	31,631	$	27,403	$	4,228

Retail segment NOI for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2022 increased ~~$0.9 million~~13.8% and ~~$4.1 million,~~15.4%, respectively, compared to the ~~corresponding periods in 2016. The increases are a result of~~three and six months ended June 30, 2021 primarily due to the acquisitions of ~~Southgate~~Delray Beach Plaza, Greenbrier Square, ~~Southshore Shops, Columbus~~and Overlook Village, ~~II, Renaissance Square,~~as well as increased occupancy in the ~~outparcel phase of Wendover Village, and the 11-property retail portfolio, together with the completion of the Lightfoot Marketplace and Brooks Crossing developments.~~same store portfolio.

Retail Same Store Results

Retail same store results for the three and six months ended ~~September~~June 30, ~~2017~~2022 and 2021 exclude Greenbrier Square, Overlook Village, the ~~remaining nine~~outparcels that were classified as held for sale at Sandbridge Commons as of June 30, 2022, and properties ofthat were disposed in 2021 and 2022. Retail same store results for the ~~11-property retail portfolio, as well as Southgate Square, Lightfoot Marketplace, Southshore Shops, Brooks Crossing, Columbus Village II, Renaissance Square,~~six months ended June 30, 2022 and ~~the outparcel phase of Wendover Village.~~June 30, 2021 also exclude Delray Beach Plaza and Premier Retail.

Retail same store rental revenues, property expenses, and NOI for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2022 and ~~2016~~2021 were as ~~follows:~~follows (in thousands):


	Three Months Ended September 30,							Nine Months Ended September 30,
	2017		2016		Change			2017		2016		Change			Three Months Ended June 30,						Six Months Ended June 30,
	(unaudited, $ in thousands)														2022		2021		Change		2022		2021		Change
Rental revenues	$	13,166	$	12,989	$	177		$	28,297	$	27,846	$	451	Rental revenues	$	19,736	$	18,686	$	1,050	$	36,422	$	34,063	$	2,359
Property expenses	3,721		3,359		362			8,107		7,717		390		Property expenses	4,983		4,857		126		9,241		8,737		504
Same Store NOI	$	9,445	$	9,630	$	(185	)	$	20,190	$	20,129	$	61	Same Store NOI	$	14,753	$	13,829	$	924	$	27,181	$	25,326	$	1,855
Non-Same Store NOI	2,148		1,107		1,041			14,644		10,583		4,061		Non-Same Store NOI	1,187		182		1,005		4,450		2,077		2,373
Segment NOI	$	11,593	$	10,737	$	856		$	34,834	$	30,712	$	4,122	Segment NOI	$	15,940	$	14,011	$	1,929	$	31,631	$	27,403	$	4,228

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Retail same store NOI ~~decreased 1.9% and increased 0.3%, respectively,~~ for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2022 increased 6.7% and 7.3%, respectively, compared to the ~~corresponding periods in 2016. The decrease for the~~ three and six months ended ~~September~~June 30, ~~2017 was~~2021, primarily due to increased occupancy throughout the result of higher administrative expense, maintenance and repair expense, and bad debt expense. The increase for the nine months ended September 30, 2017 was the result of higher occupancy across the same store portfolio.

Multifamily Segment Data

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 Change 2017 2016 Change
(unaudited, $ in thousands)
Rental revenues $ 6,454
$ 5,688
$ 766
$ 19,567
$ 15,257
$ 4,310
Property expenses 3,308
2,549
759
9,092
6,691
2,401
Segment NOI $ 3,146
$ 3,139
$ 7
$ 10,475
$ 8,566
$ 1,909
Multifamily rental revenues, property expenses, and NOI for the three and six months ended June 30, 2022 and 2021 were as follows (in thousands):


	Three Months Ended June 30,						Six Months Ended June 30,
	2022		2021		Change		2022		2021		Change
Rental revenues	$	15,366	$	16,418	$	(1,052)	$	31,548	$	32,269	$	(721)
Property expenses	6,283		7,213		(930)		12,973		14,255		(1,282)
Segment NOI	$	9,083	$	9,205	$	(122)	$	18,575	$	18,014	$	561

Multifamily segment NOI ~~did not change materially~~ for the three months ended ~~September~~June 30, ~~2017 and increased $1.9 million for the nine months ended September 30, 2017~~2022 decreased 1.3% compared to the ~~corresponding periods in 2016. The increase for the nine~~three months ended ~~September~~June 30, ~~2017 was~~2021 primarily ~~a result~~due to the dispositions of ~~activity for~~ Johns Hopkins Village, ~~which~~Hoffler Place, and Summit Place. The decrease was ~~placed into service~~partially offset by the acquisition of 1305 Dock Street, Gainesville Apartments beginning operations, and increased rental rates across multiple properties. Multifamily segment NOI for the six months ended June 30, 2022 increased 3.1% compared to the six months ended June 30, 2021 primarily due to the acquisition of 1305 Dock Street and the beginning of operations at Gainesville Apartments as well as higher occupancy, increased rental rates across multiple properties, and a decrease in ~~the third quarter~~expense per unit.

Table of ~~2016.~~Contents

Multifamily Same Store Results

Multifamily same store results for the three and six months ended June 30, 2022 and 2021 exclude ~~new real estate development – specifically Johns Hopkins Village,~~1305 Dock Street, Gainesville Apartments, and The Residences at Annapolis Junction, which was ~~placed into service~~classified as held for sale as of June 30, 2022, as well as properties that were disposed in ~~the third quarter of 2016.~~2021 and 2022.

Multifamily same store rental revenues, property expenses and NOI for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2022 and ~~2016~~2021 were as ~~follows:~~ follows (in thousands):


	Three Months Ended September 30,							Nine Months Ended September 30,
	2017		2016		Change			2017		2016		Change				Three Months Ended June 30,						Six Months Ended June 30,
	(unaudited, $ in thousands)															2022		2021		Change		2022		2021		Change
Rental revenues	$	4,793	$	4,872	$	(79	)	$	14,230	$	14,354	$	(124	)	Rental revenues	$	10,958	$	10,131	$	827	$	21,679	$	19,775	$	1,904
Property expenses	2,356		2,206		150			6,595		6,342		253			Property expenses	4,085		4,022		63		8,107		7,946		161
Same Store NOI	$	2,437	$	2,666	$	(229	)	$	7,635	$	8,012	$	(377	)	Same Store NOI	$	6,873	$	6,109	$	764	$	13,572	$	11,829	$	1,743
Non-Same Store NOI	709		473		236			2,840		554		2,286			Non-Same Store NOI	2,210		3,096		(886)		5,003		6,185		(1,182)
Segment NOI	$	3,146	$	3,139	$	7		$	10,475	$	8,566	$	1,909		Segment NOI	$	9,083	$	9,205	$	(122)	$	18,575	$	18,014	$	561

Multifamily same store NOI for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017 decreased 8.6%~~2022 increased 12.5% and ~~4.7%~~14.7%, respectively, compared to the ~~corresponding periods in 2016. The decreases are~~three and six months ended June 30, 2021 primarily due to ~~decreased~~increased rental rates and higher occupancy ~~at The Cosmopolitan attributed to construction activities at an adjacent property and~~rates in the ~~loss of retail tenants at that property.~~same store portfolio.

General Contracting and Real Estate Services Segment Data

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 Change 2017 2016 Change
(unaudited, $ in thousands)
Segment revenues $ 41,201
$ 38,552
$ 2,649
$ 161,391
$ 108,555
$ 52,836
Segment expenses 39,377
37,274
2,103
154,588
104,336
50,252
Segment gross profit $ 1,824
$ 1,278
$ 546
$ 6,803
$ 4,219
$ 2,584
Operating margin 4.4 % 3.3 % 1.2 % 4.2 % 3.9 % 0.3 %

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~~Segment~~General contracting and real estate services revenues, expenses, and gross profit for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2022 and 2021 were as follows (in thousands):


	Three Months Ended June 30,									Six Months Ended June 30,
	2022			2021			Change			2022			2021			Change
Segment revenues	$	45,273		$	18,408		$	26,865		$	69,923		$	53,971		$	15,952
Segment expenses	43,418			18,131			25,287			67,239			52,406			14,833
Segment gross profit	$	1,855		$	277		$	1,578		$	2,684		$	1,565		$	1,119
Operating margin	4.1		%	1.5		%	2.6		%	3.8		%	2.9		%	0.9		%

General contracting and real estate services segment gross profit for the three and six months ended June 30, 2022 increased ~~$0.5~~by $1.6 million and ~~$2.6~~$1.1 million, respectively, compared to the ~~corresponding periods~~three and six months ended June 30, 2021 primarily due to a greater number of third party contracts undertaken in ~~2016 because of several new large projects started subsequent to the first quarter of 2016 as well as higher margins in this segment.~~2022.

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The changes in third party construction backlog for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2022 and ~~2016~~2021 were as ~~follows:~~follows (in thousands):


	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016				Three Months Ended June 30,				Six Months Ended June 30,
	(unaudited, $ in thousands)													2022		2021		2022		2021
Beginning backlog	$	116,657		$	252,318		$	217,718		$	83,433		Beginning backlog	$	419,439	$	38,838	$	215,518	$	71,258
New contracts/change orders	1,251			32,498			20,211			271,288			New contracts/change orders	167,143		50,278		395,746		53,402
Work performed	(41,165		)	(38,384		)	(161,186		)	(108,289		)	Work performed	(45,368)		(18,897)		(70,050)		(54,441)
Ending backlog	$	76,743		$	246,432		$	76,743		$	246,432		Ending backlog	$	541,214	$	70,219	$	541,214	$	70,219

As of ~~September~~June 30, ~~2017,~~2022, we had ~~$26.2~~$111.0 million in the backlog relating to the Harbor Point Parcel 4 project, $155.1 million in the backlog on the ~~City Center~~Harbor Point Parcel 3 project, ~~$19.0~~and $51.8 million in the backlog on the Slater Road Apartments project. The amounts relating to our Harbor Point ~~Street Apartments project,~~Parcel 3 and ~~$17.9 million~~Harbor Point Parcel 4 projects pertain to our equity method investments, for which a portion of our profit margin will be eliminated in ~~backlog on the Dinwiddie Municipal Complex project.~~our operating results.

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Consolidated Results of Operations

The following table summarizes the results of operations for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2022 and ~~2016:~~2021 (in thousands):


	Three Months Ended September 30,									Nine Months Ended September 30,										Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			Change			2017			2016			Change				2022		2021		Change		2022		2021		Change
	(unaudited, $ in thousands)																			(unaudited)
Revenues																			Revenues
Rental revenues	$	27,096		$	25,305		$	1,791		$	81,083		$	72,839		$	8,244		Rental revenues	$	55,224	$	47,378	$	7,846	$	109,859	$	93,119	$	16,740
General contracting and real estate services revenues	41,201			38,552			2,649			161,391			108,555			52,836			General contracting and real estate services revenues	45,273		18,408		26,865		69,923		53,971		15,952
Total revenues	68,297			63,857			4,440			242,474			181,394			61,080			Total revenues	100,497		65,786		34,711		179,782		147,090		32,692

Expenses																			Expenses
Rental expenses	6,830			5,834			996			19,069			16,234			2,835			Rental expenses	12,685		11,292		1,393		25,354		22,124		3,230
Real estate taxes	2,693			2,356			337			7,797			7,087			710			Real estate taxes	5,837		5,465		372		11,241		10,771		470
General contracting and real estate services expenses	39,377			37,274			2,103			154,588			104,336			50,252			General contracting and real estate services expenses	43,418		18,131		25,287		67,239		52,406		14,833
Depreciation and amortization	9,239			8,885			354			28,018			25,636			2,382			Depreciation and amortization	18,781		17,285		1,496		37,338		35,351		1,987
Amortization of right-of-use assets - finance leases																			Amortization of right-of-use assets - finance leases	277		278		(1)		555		467		88
General and administrative expenses	2,098			2,156			(58		)	7,762			6,864			898			General and administrative expenses	3,617		3,487		130		8,325		7,508		817
Acquisition, development and other pursuit costs	61			345			(284		)	477			1,486			(1,009		)	Acquisition, development and other pursuit costs	26		32		(6)		37		103		(66)
Impairment charges	19			149			(130		)	50			184			(134		)	Impairment charges	286		83		203		333		3,122		(2,789)
Total expenses	60,317			56,999			3,318			217,761			161,827			55,934			Total expenses	84,927		56,053		28,874		150,422		131,852		18,570
Gain on real estate dispositions, net																			Gain on real estate dispositions, net	19,493		—		19,493		19,493		3,717		15,776
Operating income	7,980			6,858			1,122			24,713			19,567			5,146			Operating income	35,063		9,733		25,330		48,853		18,955		29,898
Interest income	1,910			1,024			886			4,966			1,928			3,038			Interest income	3,352		6,746		(3,394)		6,920		10,862		(3,942)
Interest expense	(4,253		)	(4,124		)	(129		)	(13,282		)	(11,893		)	(1,389		)	Interest expense	(9,371)		(8,418)		(953)		(18,402)		(16,393)		(2,009)

Loss on extinguishment of debt	—			(82		)	82			—			(82		)	82			Loss on extinguishment of debt	(618)		—		(618)		(776)		—		(776)
Gain on real estate dispositions	4,692			3,753			939			8,087			30,440			(22,353		)
Change in fair value of interest rate derivatives	87			498			(411		)	300			(2,264		)	2,564
Other income	74			35			39			154			154			—
Change in fair value of derivatives and other																			Change in fair value of derivatives and other	2,548		314		2,234		6,730		707		6,023
Unrealized credit loss provision																			Unrealized credit loss provision	(295)		(388)		93		(900)		(333)		(567)
Other income (expense), net																			Other income (expense), net	68		7		61		297		186		111
Income before taxes	10,490			7,962			2,528			24,938			37,850			(12,912		)	Income before taxes	30,747		7,994		22,753		42,722		13,984		28,738
Income tax provision	(29		)	(16		)	(13		)	(781		)	(240		)	(541		)
Income tax benefit																			Income tax benefit	20		461		(441)		321		480		(159)
Net income	$	10,461		$	7,946		$	2,515		$	24,157		$	37,610		$	(13,453	)	Net income	30,767		8,455		22,312		43,043		14,464		28,579
Net income attributable to noncontrolling interests in investment entities																			Net income attributable to noncontrolling interests in investment entities	(128)		—		(128)		(228)		—		(228)
Preferred stock dividends																			Preferred stock dividends	(2,887)		(2,887)		—		(5,774)		(5,774)		—
Net income attributable to common stockholders and OP Unitholders																			Net income attributable to common stockholders and OP Unitholders	$	27,752	$	5,568	$	22,184	$	37,041	$	8,690	$	28,351

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Rental revenues for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2022 increased ~~$1.8 million~~16.6% and ~~$8.2 million,~~18.0%, respectively, compared to the ~~corresponding periods in 2016,~~three and six months ended June 30, 2021 as ~~follows:~~follows (in thousands):


	Three Months Ended June 30,						Six Months Ended June 30,
	2022		2021		Change		2022		2021		Change
Office	$	18,314	$	11,756	$	6,558	$	35,337	$	23,391	$	11,946
Retail	21,544		19,204		2,340		42,974		37,459		5,515
Multifamily	15,366		16,418		(1,052)		31,548		32,269		(721)
	$	55,224	$	47,378	$	7,846	$	109,859	$	93,119	$	16,740

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 Change 2017 2016 Change
(unaudited, $ in thousands)
Office $ 4,762
$ 5,277
$ (515 ) $ 14,427
$ 16,097
$ (1,670 )
Retail 15,880
14,340
1,540
47,089
41,485
5,604
Multifamily 6,454
5,688
766
19,567
15,257
4,310
$ 27,096
$ 25,305
$ 1,791
$ 81,083
$ 72,839
$ 8,244

Table of Contents

Office rental revenues for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017 decreased 9.8%~~2022 increased 55.8% and ~~10.4%~~51.1%, respectively, compared to the ~~corresponding periods in 2016~~three and six months ended June 30, 2021 primarily as a result of ~~decreased occupancy at Armada Hoffler Tower and as a result~~the acquisition of the ~~sales of the Richmond Tower, Oyster Point, Commonwealth of Virginia-Chesapeake~~Exelon Office and ~~Commonwealth of Virginia-Virginia Beach office buildings, which contributed~~ an ~~aggregate of $0.4 million and $1.4 million~~increase in ~~office~~ rental ~~revenues for the three and nine months ended September 30, 2016, respectively.~~ expense recoveries at Wills Wharf due to higher occupancy.

Retail rental revenues for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2022 increased ~~10.7%~~12.2% and ~~13.5%~~14.7%, respectively, compared to the ~~corresponding periods in 2016~~three and six months ended June 30, 2021 primarily as a result of ~~property acquisitions. The~~the acquisitions of ~~the remaining nine properties of the 11-property retail portfolio, Southgate Square, Southshore Shops, Columbus Village II, Renaissance~~Greenbrier Square and Overlook Village, as well as higher occupancy at multiple properties. The increase was partially offset by the ~~outparcel phase~~dispositions of ~~Wendover Village, together with the completion of Brooks Crossing~~Oakland Marketplace and ~~Lightfoot Marketplace developments, contributed an aggregate of $1.5 million and $4.7 million~~Socastee Commons. The increase in ~~increased~~ retail rental revenues for the ~~three and nine~~six months ended ~~September~~June 30, ~~2017, respectively, which~~2022 compared to the six months ended June 30, 2021 was ~~partially offset by dispositions.~~further due to the acquisition of Delray Beach Plaza in February 2021.

Multifamily rental revenues for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017 increased 13.5%~~2022 decreased 6.4% and ~~28.2%~~2.2%, respectively, compared to the ~~corresponding periods in 2016~~three and six months ended June 30, 2021 primarily as a result of the ~~completion~~dispositions of ~~the~~ Johns Hopkins Village, ~~development, which~~Hoffler Place, and Summit Place. The decrease was ~~placed into service in~~partially offset by the ~~third quarter~~acquisition of ~~2016,~~1305 Dock Street, the beginning of operations at Gainesville Apartments, and higher occupancy and rental rates at ~~Encore Apartments and Smith's Landing.~~multiple properties.

General contracting and real estate services revenues for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2022 increased ~~6.9%~~145.9% and ~~48.7%~~29.6%, respectively, compared to the ~~corresponding periods in 2016 because of several new large projects started subsequent~~three and six months ended June 30, 2021 due to the ~~first quarter~~timing of ~~2016.~~commencement of new third party construction projects in 2022 and the completion of other projects.

Rental expenses for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2022 increased ~~$1.0 million~~12.3% and ~~$2.8 million,~~14.6%, respectively, compared to the ~~corresponding periods in 2016,~~three and six months ended June 30, 2021 as ~~follows:~~follows (in thousands):


	Three Months Ended September 30,							Nine Months Ended September 30,
	2017		2016		Change			2017		2016		Change				Three Months Ended June 30,						Six Months Ended June 30,
	(unaudited, $ in thousands)															2022		2021		Change		2022		2021		Change
Office	$	1,447	$	1,553	$	(106	)	$	4,138	$	4,307	$	(169	)	Office	$	4,600	$	2,938	$	1,662	$	8,740	$	5,813	$	2,927
Retail	2,699		2,264		435			7,698		6,820		878			Retail	3,333		3,013		320		6,834		5,849		985
Multifamily	2,684		2,017		667			7,233		5,107		2,126			Multifamily	4,752		5,341		(589)		9,780		10,462		(682)
	$	6,830	$	5,834	$	996		$	19,069	$	16,234	$	2,835			$	12,685	$	11,292	$	1,393	$	25,354	$	22,124	$	3,230

Office rental expenses for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017 decreased 6.8%~~2022 increased 56.6% and ~~3.9%~~50.4%, respectively, compared to the ~~corresponding periods in 2016~~three and six months ended June 30, 2021 primarily due to the ~~sales~~acquisition of the ~~Richmond Tower, Oyster Point, Commonwealth~~Exelon Office and the addition of ~~Virginia-Chesapeake and Commonwealth of Virginia-Virginia Beach office buildings.~~ new tenants at Wills Wharf.

Retail rental expenses for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2022 increased ~~19.2%~~10.6% and ~~12.9%~~16.8%, respectively, compared to the ~~respective periods in 2016 as a result of property acquisitions~~three and ~~the completion of development projects that were placed into service subsequent~~six months ended June 30, 2021 primarily due to the ~~first quarter~~acquisitions of ~~2016 as well as increased bad debt expenses.~~ Greenbrier Square and Overlook Village. The increase in retail rental expenses for the six months ended June 30, 2022 compared to the six months ended June 30, 2021 was further due to the acquisition of Delray Beach Plaza in February 2021, which was partially offset by the dispositions of Oakland Marketplace and Socastee Commons.

Multifamily rental expenses for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017 increased 33.1%~~2022 decreased 11.0% and ~~41.6%~~6.5%, respectively, compared to the ~~respective periods in 2016~~three and six months ended June 30, 2021 primarily due to ~~placing~~the dispositions of Johns Hopkins Village, ~~into service.~~Hoffler Place, and Summit Place. The decrease was partially offset by the acquisition of 1305 Dock Street and the beginning of operations of Gainesville Apartments.

~~Table of Contents~~

Real estate taxes for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2022 and 2021 increased ~~$0.3 million~~6.8% and ~~$0.7 million,~~4.4%, respectively, compared to the ~~corresponding periods in 2016,~~three and six months ended June 30, 2021 as ~~follows:~~follows (in thousands):


	Three Months Ended September 30,							Nine Months Ended September 30,
	2017		2016		Change			2017		2016		Change				Three Months Ended June 30,						Six Months Ended June 30,
	(unaudited, $ in thousands)															2022		2021		Change		2022		2021		Change
Office	$	481	$	485	$	(4	)	$	1,381	$	1,550	$	(169	)	Office	$	2,035	$	1,413	$	622	$	3,539	$	2,771	$	768
Retail	1,588		1,339		249			4,557		3,953		604			Retail	2,271		2,180		91		4,509		4,207		302
Multifamily	624		532		92			1,859		1,584		275			Multifamily	1,531		1,872		(341)		3,193		3,793		(600)
	$	2,693	$	2,356	$	337		$	7,797	$	7,087	$	710			$	5,837	$	5,465	$	372	$	11,241	$	10,771	$	470

Office real estate taxes for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017 decreased 0.8%~~2022 increased 44.0% and ~~10.9%~~27.7%, respectively, compared to the ~~respective periods in 2016~~three and six months ended June 30, 2021 primarily due to the ~~sales~~acquisition of the ~~Richmond Tower, Oyster Point, Commonwealth~~Exelon Office and Wills Wharf being fully placed into service in June 2021.

Table of ~~Virginia-Chesapeake, and Commonwealth of Virginia-Virginia Beach office buildings.~~ Contents

Retail ~~and multifamily~~ real estate taxes for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2022 increased 4.2% and 7.2%, respectively, compared to the ~~corresponding periods in 2016~~three and six months ended June 30, 2021 primarily as a result of the acquisitions ~~completion~~ of ~~development projects that~~Greenbrier Square and Overlook Village, which were ~~placed into service subsequent~~partially offset by the dispositions of Oakland Marketplace and Socastee Commons. The increase in retail real estate taxes for the six months ended June 30, 2022 compared to the ~~first quarter~~six months ended June 30, 2021 was further due to the acquisition of ~~2016~~Delray Beach Plaza in February 2021.

Multifamily real estate taxes for the three and ~~increases from new tax assessments.~~six months ended June 30, 2022 decreased 18.2% and 15.8%, respectively, compared to the three and six months ended June 30, 2021 primarily due to the dispositions of Johns Hopkins Village, Hoffler Place, and Summit Place. The decrease was partially offset by the acquisition of 1305 Dock Street and the beginning of operations of Gainesville Apartments.

General contracting and real estate services expenses for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2022 increased ~~5.6%~~139.5% and ~~48.2%~~28.3%, respectively, compared to the ~~corresponding periods~~three and six months ended June 30, 2021 due to new third party contracts undertaken in ~~2016 as a result of several new large projects started subsequent to the first quarter of 2016.~~2022.

Depreciation and amortization for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2022 increased ~~4.0%~~8.7% and ~~9.3%~~5.6%, respectively, compared to the ~~corresponding periods in 2016 as a result of~~three and six months ended June 30, 2021 due to property acquisitions and ~~completion~~development deliveries. The increases were partially offset by dispositions in 2021 and certain assets that became fully depreciated.

Amortization of ~~development projects that were placed into service subsequent~~right-of-use assets - finance leases for the three months ended June 30, 2022 decreased immaterially compared to the ~~first quarter~~three months ended June 30, 2021. Amortization of ~~2016.~~right-of-use assets - finance leases for the six months ended June 30, 2022 increased 18.8% compared to the six months ended June 30, 2021 primarily due to the acquisition of Delray Beach Plaza, which was partially amortized in the six months ended June 30, 2021 compared to a full period of amortization recognized in the six months ended June 30, 2022.

General and administrative expenses for the three and six months ended ~~September~~June 30, ~~2017 decreased 2.7%~~2022 increased 3.7% and 10.9%, respectively, compared to the three and six months ended ~~September~~June 30, ~~2016~~2021 primarily due to a reduction in franchise fees. General and administrative expenses for the nine months ended September 30, 2017 increased 13.1% compared to the nine months ended September 30, 2016 as a result of higher regulatory and compliance costs and higher compensation, benefits, and ~~benefit costs~~training and development resulting from increased ~~employee headcount.~~investment in human capital and sustainability initiatives.

Acquisition, development and other pursuit costs for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2022 decreased 18.8% and 64.1%, respectively, compared to the ~~corresponding periods in 2016. The costs incurred in the nine~~three and six months ended ~~September~~June 30, ~~2016 were primarily related~~2021 as a result of a lower write off of costs for the three and six months ended June 30, 2021 relating to certain development projects and acquisitions that are no longer probable.

Impairment charges for the six months ended June 30, 2021 relate to the ~~acquisition of the 11-property retail portfolio in January 2016.~~

impairment recognized on Socastee Commons. Impairment charges for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2022 and ~~2016~~the three months ended June 30, 2021 were ~~primarily due~~not material.

Gain on real estate dispositions, net for the three and six months ended June 30, 2021 relates to ~~lease terminations.~~the sale of the 7-Eleven at Hanbury Village, Oakland Marketplace, and easement rights at a non-operating land parcel. The gain on real estate dispositions, net for the three and six months ended June 30, 2022 relates to the dispositions of the Home Depot and Costco parcels at North Pointe.

Interest income for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017 increased~~2022 decreased 50.3% and 36.3%, respectively, compared to the ~~corresponding periods~~three and six months ended June 30, 2021, primarily as a result of the lower notes receivable balance in ~~2016~~the current period due to ~~higher notes receivable balances, including~~ the ~~Decatur~~repayment of portions of our mezzanine ~~loan originated in May 2017.~~loans during 2021 and 2022. This was partially offset by increased borrowings for the Nexton Multifamily and City Park 2 preferred equity investments.

Interest expense for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2022 increased ~~3.1%~~11.3% and ~~11.7%~~12.3%, respectively, compared to the ~~corresponding periods~~three and six months ended June 30, 2021, primarily due to the loans obtained and assumed in ~~2016~~connection with acquisitions, partially offset by those paid off in connection with dispositions.

Loss on extinguishment of debt of $0.6 million and $0.8 million for the three and six months ended June 30, 2022 primarily ~~as a result~~relates to the loan payoffs of ~~higher interest rates.~~

~~The~~Red Mill West and Delray Beach Plaza, the refinance of Nexton Square, and the loan payoffs associated with the dispositions of Hoffler Place, Summit Place, and the Costco outparcel at North Pointe. There was no loss on extinguishment of debt recognized for the three and ~~nine~~six months ended ~~September~~June 30, ~~2016 was due to unamortized debt issuance costs associated with repaid mortgages as well as costs associated with modifying our credit facility.~~2021.

~~During the nine months ended September 30, 2017, we recognized a gain~~

Table of $3.4 million on our sale of the Greentree Wawa outparcel, a gain of $4.2 million on our sale of the Commonwealth of Virginia-Chesapeake and Commonwealth of Virginia-Virginia Beach office buildings and a gain of $0.5 million on our sale of the land outparcel at Sandbridge Commons. During the nine months ended September 30, 2016, we recognized gains of $30.4 million on our sales of the Richmond Tower office building and the Newport News Economic Authority building.Contents

The change in fair value of ~~interest rate~~ derivatives and other for the three and six months ended ~~September~~June 30, ~~2017 was an increase of $0.1 million compared to an increase of $0.5 million~~2022 includes fair value increases for ~~the corresponding period in 2016~~our derivative instruments due to ~~less dramatic changes~~increases in forward LIBOR (the London Inter-Bank Offered Rate)~~. The change in fair value of interest rate derivatives~~ and BSBY.

Unrealized credit loss provision for the ~~nine~~three months

~~Table of Contents~~

ended ~~September~~June 30, ~~2017 was an increase of $0.3~~2022 decreased immaterially compared to the three months ended June 30, 2021. Unrealized credit loss provision for the six months ended June 30, 2022 increased $0.6 million compared to ~~a decrease~~the six months ended June 30, 2021 primarily due to the addition of ~~$2.3 million~~the City Park 2 preferred equity investment and increased funding on the Harbor Point Parcel 3 loan.

Other income (expense), net for the ~~corresponding period in 2016. The expense for the nine~~three and six months ended ~~September~~June 30, ~~2016~~2022 was ~~due to dedesignation of our hedge accounting.~~ materially consistent with the three and six months ended June 30, 2021.

~~Income~~The income tax ~~provisions~~provision and benefits that we recognized during the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2022 and ~~2016~~2021 were attributable to the taxable profits and losses of our development and construction businesses that we operate through our TRS.

~~Table of Contents~~

Liquidity and Capital Resources

Overview

We believe our primary short-term liquidity requirements consist of general contractor expenses, operating expenses, and other expenditures associated with our properties, including tenant improvements, leasing commissions and leasing incentives, dividend payments to our stockholders required to maintain our REIT qualification, debt service, capital expenditures, new real estate development projects, mezzanine loan funding requirements, and strategic acquisitions. We expect to meet our short-term liquidity requirements through net cash provided by operations, reserves established from existing cash, borrowings under construction loans to fund new real estate development and construction, borrowings available under our ~~senior unsecured~~ credit facility, and net proceeds from the opportunistic sale of common ~~stock.~~stock through our ATM Program, which is discussed below.

Our long-term liquidity needs consist primarily of funds necessary for the repayment of debt at or prior to maturity, general contracting expenses, property development and acquisitions, tenant improvements, and capital improvements. We expect to meet our long-term liquidity requirements with net cash from operations, long-term secured and unsecured indebtedness, ~~and~~ the issuance of equity and debt ~~securities.~~securities, and the opportunistic disposition of non-core properties. We also may fund property development and acquisitions and capital improvements using our ~~senior unsecured~~ credit facility pending long-term financing.

As of ~~September~~June 30, ~~2017,~~2022, we had unrestricted cash and cash equivalents of ~~$19.7~~$69.7 million available for both current liquidity needs as well as development and redevelopment activities. We also had restricted cash in escrow of ~~$3.2~~$6.7 million, some of which is available for ~~property improvements~~capital expenditures and ~~required maintenance.~~certain operating expenses at our operating properties. As of ~~September~~June 30, ~~2017,~~2022, we had ~~$92.0~~$68.0 million of available borrowings under our revolving credit facility to meet our short-term liquidity ~~requirements.~~requirements and $33.3 million of available borrowings under our construction loans to fund development activities.

The Marketplace at Hilltop loan has an outstanding principal balance of $9.5 million and is scheduled to mature in October 2022. We have no other loans scheduled to mature during the remainder of 2022.

ATM Program

On March 10, 2020, we commenced an at-the-market continuous equity offering program (the "ATM Program") through which we may, from time to time, issue and sell shares of our common stock and shares of our 6.75% Series A Cumulative Redeemable Perpetual Preferred Stock (the "Series A Preferred Stock") having an aggregate offering price of up to $300.0 million, to or through our sales agents and, with respect to shares of our common stock, may enter into separate forward sales agreements to or through the forward purchaser.

During the six months ended June 30, 2022, we issued and sold 475,074 shares of common stock at a weighted average price of $15.21 per share under the ATM Program, receiving net proceeds, after offering costs and commissions, of $7.1 million. During the six months ended June 30, 2022, we did not issue any shares of Series A Preferred Stock under the ATM Program. Shares having an aggregate offering price of $205.0 million remained unsold under the ATM Program as of August 4, 2022.

Table of Contents

Common Stock Issuance

On January 11, 2022, we completed an underwritten public offering of 4,025,000 shares of common stock, which were pre-purchased from us by the underwriter at a purchase price of $14.45 per share including fees, resulting in net proceeds after offering costs of $58.0 million.

Credit Facility

~~On October 26, 2017, we entered into an~~We have a senior credit facility that was amended and restated ~~credit agreement (the “amended credit agreement”), which provides for a $300.0~~on October 3, 2019. The total commitments are $355.0 million, ~~credit facility~~ comprised of a $150.0 million senior unsecured revolving credit facility (the ~~“revolving~~"revolving credit ~~facility”~~facility") and a ~~$150.0~~$205.0 million senior unsecured term loan facility (the ~~“term~~"term loan ~~facility”~~facility" and, together with the revolving credit facility, the ~~“credit facility”~~"credit facility"), with ~~Bank~~a syndicate of America, N.A., as administrative agent, swing line lender and L/C issuer, Regions Bank and PNC Bank, National Association, as syndication agents, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Regions Capital Markets and PNC Capital Markets LLC, as joint lead arrangers, Merrill Lynch, Pierce, Fenner & Smith Incorporated as sole bookrunner and the other lenders party thereto. The amended credit facility replaces our prior $150.0 million revolving credit facility, which was scheduledbanks. Subject to ~~mature on February 20, 2019, and our prior $125.0 million term loan facility, which was scheduled to mature on February 20, 2021. We~~available borrowing capacity, we intend to use future borrowings under the credit facility for general corporate purposes, including funding acquisitions, mezzanine lending, and development and redevelopment of properties in our portfolio, and for working capital. Our unencumbered borrowing pool will support revolving borrowings of up to $150 million as of June 30, 2022. In July 2022, we repaid $31.0 million, net of borrowings, under the revolving credit facility.

The credit facility includes an accordion feature that allows the total commitments to be increased to ~~$450.0~~$700.0 million, subject to certain conditions, including obtaining commitments from any one or more lenders. The revolving credit facility has a scheduled maturity date of ~~October 26, 2021,~~January 24, 2024, with two six-month extension options, subject to certain conditions, including payment of a 0.075% extension fee at each extension. The term loan facility has a scheduled maturity date of ~~October 26, 2022.~~January 24, 2025.

The revolving credit facility bears interest at LIBOR plus a margin ranging from ~~1.40%~~1.30% to ~~2.00%~~1.85% and the term loan facility bears interest at LIBOR plus a margin ranging from ~~1.35%~~1.25% to ~~1.95%~~1.80%, in each case depending on our total leverage. We are also obligated to pay an unused commitment fee of 150.15% or ~~25 basis points~~0.25% on the unused portions of the commitments under the revolving credit facility, depending on the amount of borrowings under the revolving credit facility. If we attain investment grade credit ratings from ~~S&P~~Standard and ~~Moody’s,~~Poor's or Moody's Investor Service, we may elect to have borrowings become subject to interest rates based on our credit ratings. As of December 31, 2021, LIBOR is phasing out and we are transitioning to alternative reference rates, such as the Secured Overnight Financing Rate ("SOFR") and BSBY.

The Operating Partnership is the borrower under the credit facility, and its obligations under the credit facility are guaranteed by us and certain of ~~its~~our subsidiaries that are not otherwise prohibited from providing such guaranty.

The credit agreement contains customary representations and warranties and financial and other affirmative and negative covenants. Our ability to borrow under the credit facility is subject to our ongoing compliance with a number of financial covenants, affirmative covenants and other restrictions, including the following:

•Total leverage ratio of not more than 60% (or 65% for the two consecutive quarters following any acquisition ~~that is equal~~with a purchase price of at least up to ~~or greater than 10% of our total asset value (as defined in the credit agreement),~~$100.0 million, but only up to two times during the term of the credit facility);

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•Ratio of adjusted EBITDA (as defined in the credit agreement) to fixed charges of not less than 1.50 to 1.0;

•Tangible net worth of not less than the sum of ~~75% of tangible net worth (as defined in the credit agreement) as of September 30, 2017~~$567,106,000 and amount equal to 75% of the net equity proceeds received after June 30, ~~2017;~~2019;

•Ratio of secured indebtedness to total asset value of not more than 40%;

•Ratio of secured recourse debt to total asset value of not more than 20%;

•Total unsecured leverage ratio of not more than 60% (or 65% for the two consecutive quarters following any acquisition ~~that is equal~~with a purchase price of at least up to ~~or greater than 10% of our total asset value,~~$100.0 million, but only up to two times during the term of the credit facility);

•Unencumbered interest coverage ratio (as defined in the credit agreement) of not less than 1.75 to 1.0;

~~Ratio of unencumbered NOI (as defined in the credit agreement) to all unsecured debt of not less than 12%;~~

•Maintenance of a minimum of at least 15 unencumbered properties (as defined in the credit agreement) with an unencumbered asset value (as defined in the credit agreement) of not less than $300.0 million at any time; ~~and~~

•Minimum occupancy rate (as defined in the credit agreement) for all unencumbered properties of not less than 80% at any ~~time.~~time; and

•Maximum aggregate rental revenue from any single tenant of not more than 30% of rental revenues with respect to all leases of unencumbered properties (as defined in the credit agreement).

The credit ~~facility~~agreement limits our ability to pay cash dividends. However, so long as no default or event of default exists, the credit agreement allows us to pay cash dividends with respect to any 12-month period in an amount not to exceed the greater of: (i) 95% of adjusted funds from operations (as defined in the credit agreement) or (ii) the amount required for us (a) to maintain our status as a REIT, and (b) to avoid income or excise tax under the Internal Revenue Code of 1986, as amended.

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If certain defaults or events of default exist, we may pay cash dividends with respect to any 12-month period to the extent necessary to maintain our status as a REIT. The credit ~~facility~~agreement also restricts the amount of capital that we can invest in specific categories of assets, such as unimproved land holdings, development properties, notes receivable, mortgages, mezzanine loans and unconsolidated affiliates, and restricts the amount of stock and OPOperating Partnership units that we may repurchase during the term of the credit facility.

We may, at any time, voluntarily prepay any loan under the credit facility in whole or in part without significant premium or ~~penalty.~~penalty, except for those portions subject to an interest rate swap agreement.

The credit agreement includes customary events of default, in certain cases subject to customary periods to cure. The occurrence of an event of default, following the applicable cure period, would permit the lenders to, among other things, declare the unpaid principal, accrued and unpaid interest and all other amounts payable under the credit facility to be immediately due and payable.

We are currently in compliance with all covenants ~~under~~governing the credit ~~facility.~~

agreement.

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Consolidated Indebtedness

The following table sets forth our consolidated indebtedness as of ~~September~~June 30, ~~2017~~2022 ($ in thousands):

Amount Outstanding      Interest Rate(a) Effective Rate for Variable
Debt      Maturity Date Balance at Maturity
Secured Debt
Lightfoot Marketplace $ 12,894
LIBOR+1.90%
3.13 % November 14, 2017 $ 12,894
Sandbridge Commons 8,530
LIBOR+1.85%
3.08 % January 17, 2018 8,045
Columbus Village Note 1 6,124
LIBOR+2.00%
3.05 % (b)   April 5, 2018 6,033
Columbus Village Note 2 2,232
LIBOR+2.00%
3.23 % April 5, 2018 2,108
Johns Hopkins Village 46,698
LIBOR+1.90%
3.13 % July 30, 2018 46,698
North Point Note 1 9,623
6.45 %
February 5, 2019 9,333
Southgate Square 20,871
LIBOR+2.00%
3.23 % April 29, 2021 18,925
249 Central Park Retail 16,910
(c) LIBOR+1.95%
3.18 % August 8, 2021 15,959
South Retail 7,420
(c) LIBOR+1.95%
3.18 % August 8, 2021 7,002
Fountain Plaza Retail 10,180
(c) LIBOR+1.95%
3.18 % August 8, 2021 9,608
4525 Main Street 32,034
(d) 3.25 % September 10, 2021 30,774
Encore Apartments 24,966
(d) 3.25 % September 10, 2021 24,006
Hanbury Village 19,622
3.78 % August 15, 2022 17,109
Socastee Commons 4,796
(e)   4.57 %
January 6, 2023 4,223
North Point Note 2 2,486
7.25 %
September 15, 2025 1,344
Smith's Landing 19,954
4.05 %
June 1, 2035 —
Liberty Apartments 19,763
(e)   5.66 %
November 1, 2043 —
The Cosmopolitan 45,390
3.35 %
July 1, 2051 —
Harding Place —
LIBOR+2.95%
February 24, 2020 —
Town Center Phase VI —
LIBOR+3.50%
June 29, 2020 —
Total secured debt $ 310,493

$ 214,061
Unsecured Debt

Senior unsecured revolving credit facility 58,000
LIBOR+1.40% to 2.00%
2.78 % February 20, 2019 (f) 58,000
Senior unsecured term loan 75,000
LIBOR+1.35% to 1.95%
2.73 % February 20, 2020 (f) 75,000
Senior unsecured term loan 50,000
LIBOR+1.35% to 1.95%
3.50 % (b)   February 20, 2020 (f) 50,000
Total unsecured debt $ 183,000

$ 183,000
Total principal balances 493,493
397,061
Unamortized GAAP adjustments (4,884 )

—
Indebtedness, net $ 488,609

$ 397,061


	Amount Outstanding		Interest Rate (a)			Effective Rate for Variable Debt			Maturity Date	Balance at Maturity
Secured Debt
Marketplace at Hilltop	$	9,492		4.42	%				October 1, 2022	$	9,383
1405 Point	51,914		LIBOR+	2.25	%	4.04	%		January 1, 2023	51,532
Wills Wharf	64,288		LIBOR+	2.25	%	4.04	%		June 26, 2023	64,288
249 Central Park Retail(b)	16,226		LIBOR+	1.60	%	3.85	%	(c)	August 10, 2023	15,935
Fountain Plaza Retail(b)	9,765		LIBOR+	1.60	%	3.85	%	(c)	August 10, 2023	9,589
South Retail(b)	7,124		LIBOR+	1.60	%	3.85	%	(c)	August 10, 2023	6,996
One City Center	23,760		LIBOR+	1.85	%	3.64	%		April 1, 2024	22,559
Chronicle Mill	14,640		LIBOR+	3.00	%	4.79	%		May 5, 2024	14,640
Red Mill Central	2,100			4.80	%				June 17, 2024	1,765
Gainesville Apartments	30,328		LIBOR+	3.00	%	4.79	%		August 31, 2024	30,327
Premier Apartments(d)	16,399		LIBOR+	1.55	%	3.34	%		October 31, 2024	15,848
Premier Retail(d)	8,077		LIBOR+	1.55	%	3.34	%		October 31, 2024	7,806
Red Mill South	5,356			3.57	%				May 1, 2025	4,383
Brooks Crossing Office	14,631		LIBOR+	1.60%		3.39	%		July 1, 2025	13,798
Market at Mill Creek	12,818		LIBOR+	1.55%		3.34	%		July 12, 2025	10,876
Encore Apartments(e)	24,253			2.93	%				February 10, 2026	22,213
4525 Main Street(e)	31,133			2.93	%				February 10, 2026	28,514
Thames Street Wharf	70,044		BSBY+	1.30	%	2.35	%	(c)	September 30, 2026	60,839
Exelon Building	175,000		BSBY+	1.50	%	1.00	%	(f)	November 1, 2026	175,000
Southgate Square	26,656		LIBOR+	1.90	%	3.69	%		December 21, 2026	24,741
Nexton Square	22,500		SOFR+	1.95	%	3.45	%		June 30, 2027	19,453
Greenbrier Square	20,000			3.74%					October 10, 2027	18,049
Lexington Square	14,034			4.50	%				September 1, 2028	12,044
Red Mill North	4,135			4.73	%				December 31, 2028	3,295
Greenside Apartments	32,232			3.17	%				December 15, 2029	26,095
The Residences at Annapolis Junction(g)	84,375		SOFR+	2.66	%	4.16	%	(f)	November 1, 2030	71,183
Smith's Landing	15,997			4.05	%				June 1, 2035	384
Liberty Apartments	13,414			5.66	%				November 1, 2043	90
Edison Apartments	15,747			5.30	%				December 1, 2044	100
The Cosmopolitan	41,670			3.35	%				July 1, 2051	187
Total secured debt	$	878,108								$	741,912
Unsecured debt
Senior unsecured revolving credit facility	$	82,000	LIBOR+	1.30%-1.85%		3.29	%		January 24, 2024	$	82,000
Senior unsecured term loan	19,500		LIBOR+	1.25%-1.80%		3.24	%		January 24, 2025	19,500
Senior unsecured term loan	185,500		LIBOR+	1.25%-1.80%		1.95%-4.47%		(c)	January 24, 2025	185,500
Total unsecured debt	287,000									287,000
Total principal balances	$	1,165,108								$	1,028,912
Other notes payable(h)	9,204
Unamortized GAAP adjustments	(9,599)
Loans reclassified to liabilities related to assets held for sale, net	(84,049)
Indebtedness, net	$	1,080,664

_______________________________________

(a) LIBOR, ~~rate is~~SOFR, and BSBY are determined by individual lenders.

(b) ~~Subject~~Cross collateralized.

~~(c) Cross collateralized.~~locks.

(d) Cross collateralized.

(e) ~~Principal balance excluding~~Cross collateralized.

(f) Includes debt subject to designated interest rate caps.

(g) Secured by real estate held for sale as of June 30, 2022. On July 22, 2022, we sold the property securing this loan and repaid the loan in full.

(h) Represents the fair value ~~adjustments.~~

~~(f)~~

~~As described above, following~~of additional ground lease payments at 1405 Point over the approximately 42-year remaining lease term and an amendment and restatement of the credit agreement on October 26, 2017, the revolving credit facility has a scheduled maturity date of October 26, 2021, with a one-year extension option, subject to certain conditions, and the term loan facility has a scheduled maturity date of October 26, 2022.

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earn-out liability for the Gainesville development project.

As of June 30, 2022, we are ~~currently~~ in compliance with all loan covenants on our outstanding indebtedness. The lease-up requirement previously stipulated by the syndicated loan secured by Wills Wharf was satisfied as a result of a new lease executed during the three months ended June 30, 2022. As a result, the $4.3 million of cash previously restricted on this property has been unrestricted.

As of ~~September~~June 30, ~~2017,~~2022, our principal payments during the following years are as follows ($ in thousands):


Year(1)	Amount Due		Percentage of Total
2022 (excluding six months ended June 30, 2022)	$	15,043	1	%
2023	159,084		14	%
2024	187,106		16	%
2025	246,368		21	%
2026	321,012		28	%
Thereafter	236,495		20	%
Total	$	1,165,108	100	%

Year⁽¹⁾

Amount Due

Percentage of Total
2017 $ 13,948
3 %
2018 67,263
14 %
2019 71,376
15 %
2020 130,057
26 %
2021 110,458
22 %
Thereafter 100,391
20 %
$ 493,493
100 %

(1) Does not reflect the effect of any maturity extension options.

~~On February 1, 2017, we paid off the North Point Center Note 5 in full for $0.6 million.~~

~~On April 7, 2017, we paid off the Harrisonburg Regal note in full for $3.2 million.~~

~~On April 19, 2017, we entered into a second amendment to the credit agreement for the Lightfoot Marketplace loan, which amended certain definitions and covenant requirements.~~

~~On July 13, 2017, we paid off the remaining balance of $4.9 million for the note secured by the Commonwealth of Virginia building in Chesapeake, Virginia in conjunction with the sale of this property.~~

~~On August 9, 2017, we refinanced the Hanbury Village note. The new note matures in August 2022 and has a fixed annual interest rate of 3.78%.~~

~~On August 10, 2017, we paid off $0.7 million of the Sandbridge Commons note in conjunction with the sale of a land outparcel at this property.~~

~~On September 1, 2017, we entered into a modification of The Cosmopolitan note, which reduced the annual interest rate from 3.75% to 3.35%.~~

~~On October 13, 2017, we paid off $5.0 million of the Liberty Apartments note.~~

Interest Rate Derivatives

On February 20, 2015, we entered into a $50.0 million floating-to-fixed interest rate swap attributable to one-month LIBOR indexed interest payments. The $50.0 million interest rate swap has a fixed rate of 2.00%, an effective date of March 1, 2016 and a maturity date of February 20, 2020. We entered into this interest rate swap agreement in connection with the $50.0 million senior unsecured term loan facility that bears interest at LIBOR plus 1.35% to 1.95%, depending on our total leverage.

On July 13, 2015, we entered into a $6.5 million floating-to-fixed interest rate swap attributable to one-month LIBOR indexed interest payments. The $6.5 million interest rate swap has a fixed rate of 3.05%, an effective date of July 13, 2015 and a maturity date of April 5, 2018.

On February 7, 2017, we entered into a LIBOR interest rate cap agreement on a notional amount of $50.0 million at a strike rate of 1.50% for a premium of less than $0.2 million. The interest rate cap agreement expires on March 1, 2019.

On June 23, 2017, we entered into a LIBOR interest rate cap agreement on a notional amount of $50.0 million at a strike rate of 1.50% for a premium of less than $0.2 million. The interest rate cap agreement expires on July 1, 2019.

On September 18, 2017, we entered into a LIBOR interest rate cap agreement on a notional amount of $50.0 million at a strike rate of 1.50% for a premium of less than $0.2 million. The interest rate cap agreement expires on October 1, 2019.

As of ~~September~~June 30, ~~2017,~~2022, we were party to the following LIBOR (to be transitioned to SOFR and BSBY), SOFR, and BSBY interest rate cap agreements ($ in thousands):

Effective Date

Maturity Date

Strike Rate

Notional Amount

7/1/2020

7/1/2023

0.50% (LIBOR)

(a)

100,000

11/1/2020

11/1/2023

1.84% (SOFR)

84,375

2/2/2021

2/1/2023

0.50% (LIBOR)

100,000

3/4/2021

4/1/2023

2.50% (LIBOR)

14,479

5/5/2021

5/1/2023

0.50% (LIBOR)

(a)

50,000

5/5/2021

5/1/2023

0.50% (LIBOR)

(a)

35,100

6/16/2021

7/1/2023

0.50% (LIBOR)

(a)

100,000

1/11/2022

2/1/2024

4.00% (BSBY)

175,000

4/7/2022

2/1/2024

1.00%-3.00% (BSBY)

(b)

175,000

9/1/2022

9/1/2024

1.00%-3.00% (SOFR)

(b)(c)

73,562

Total

907,516

(a) Subsequent to June 30, 2022, we modified and extended these interest rate caps. See Note 15 to our condensed consolidated financial statements in Item 1 of this Quarterly Report on Form 10-Q for additional information regarding these transactions.

(b) We purchased interest rate caps at 1.00% and sold interest rate caps at 3.00%, resulting in interest rate cap corridors of 1.00% and 3.00%. The intended goal of these corridors is to provide a level of protection from the effect of rising interest rates and reduce the all-in cost of the derivative instrument.

(c) We purchased this interest rate cap corridor during the three months ended June 30, 2022 with an effective date of September 1, 2022. The notional amount represents the maximum notional amount that will eventually be in effect. The

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notional amount is scheduled to increase over the term of the corridor in accordance with projected borrowings on the associated loan.

Effective Date Maturity Date Strike Rate Notional Amount
October 26, 2015 October 15, 2017 1.25 % 75,000
February 25, 2016 March 1, 2018 1.50 % 75,000
June 17, 2016 June 17, 2018 1.00 % 70,000
February 7, 2017 March 1, 2019 1.50 % 50,000
June 23, 2017 July 1, 2019 1.50 % 50,000
September 18, 2017 October 1, 2019 1.50 % 50,000
Total $ 370,000
As of June 30, 2022, we held the following interest rate swap agreements ($ in thousands):


Related Debt	Notional Amount		Index	Swap Fixed Rate		Debt effective rate		Effective Date	Expiration Date
Senior unsecured term loan	$	50,000	1-month LIBOR	2.26	%	3.71	%	4/1/2019	10/26/2022
Senior unsecured term loan	50,000		1-month LIBOR	2.78	%	4.23	%	5/1/2018	5/1/2023
249 Central Park Retail, South Retail, and Fountain Plaza Retail	33,115		1-month LIBOR	2.25	%	3.85	%	4/1/2019	8/10/2023
Senior unsecured term loan	10,500		1-month LIBOR	3.02	%	4.47	%	10/12/2018	10/12/2023
Senior unsecured term loan	25,000		1-month LIBOR	0.50	%	1.95	%	4/1/2020	4/1/2024
Senior unsecured term loan	25,000		1-month LIBOR	0.50	%	1.95	%	4/1/2020	4/1/2024
Senior unsecured term loan	25,000		1-month LIBOR	0.55	%	2.00	%	4/1/2020	4/1/2024
Thames Street Wharf	70,044		1-month BSBY	1.05	%	2.35	%	9/30/2021	9/30/2026
Total	$	288,659

Off-Balance Sheet Arrangements

In connection with certain of our mezzanine lending activities and equity method investments, we have made guarantees to pay portions of certain senior loans of third parties associated with the development projects. The following table summarizes the guarantees made by us as of June 30, 2022 (in thousands):


Development project	Payment guarantee amount		Guarantee liability
Interlock Commercial	$	37,450	$	1,346
Harbor Point Parcel 4 (a)	32,910		242
Total	$	70,360	$	1,588

(a) As of June 30, 2022, no amounts have been funded on this senior loan.

Unfunded Loan Commitments

We may be a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financial needs of our borrowers. These commitments are not reflected on the consolidated balance sheet. As of June 30, 2022, our off-balance sheet arrangements consisted of $19.3 million of unfunded commitments of our notes receivable. We have ~~entered into standby letters~~recorded a $0.5 million credit loss reserve in conjunction with the total unfunded commitments. Such commitments are subject to our borrowers’ satisfaction of certain financial and nonfinancial covenants and involve, to varying degrees, elements of credit ~~using~~risk in excess of the ~~available capacity under the credit facility. Letters of credit generally are available for draw down~~amount recognized in the ~~event we do~~consolidated balance sheets. The commitments may or may not ~~perform. As~~be funded depending on a variety of ~~September 30, 2017, we had aggregate outstanding standby letters~~circumstances including timing, credit metric hurdles, and other nonfinancial events occurring.

Table of credit totaling $4.1 million that expire during 2017. However, any of our standby letters of credit may be renewed for additional periods until completion of the related construction contracts. The amounts outstanding at September 30, 2017 include $2.0 million relating to construction projects and a $2.1 million letter of credit related to the guarantee on the Point Street Apartments senior construction loan.Contents

Cash Flows


	Nine Months Ended September 30,										Six Months Ended June 30,
	2017			2016			Change				2022		2021		Change
	($ in thousands)										(in thousands)
Operating Activities	$	36,598		$	38,782		$	(2,184	)	Operating Activities	$	50,407	$	40,640	$	9,767
Investing Activities	(69,485		)	(187,681		)	118,196			Investing Activities	(86,950)		(31,605)		(55,345)
Financing Activities	30,666			145,800			(115,134		)	Financing Activities	72,512		(6,223)		78,735
Net Increase (Decrease)	$	(2,221	)	$	(3,099	)	$	878
Cash and Cash Equivalents, Beginning of Period	$	21,942		$	26,989
Cash and Cash Equivalents, End of Period	$	19,721		$	23,890
Net Increase (decrease)										Net Increase (decrease)	$	35,969	$	2,812	$	33,157
Cash, Cash Equivalents, and Restricted Cash, Beginning of Period										Cash, Cash Equivalents, and Restricted Cash, Beginning of Period	$	40,443	$	50,430
Cash, Cash Equivalents, and Restricted Cash, End of Period										Cash, Cash Equivalents, and Restricted Cash, End of Period	$	76,412	$	53,242

Net cash provided by operating activities during the ~~nine~~six months ended ~~September~~June 30, ~~2017 decreased 5.6%~~2022 increased $9.8 million compared to the ~~nine~~six months ended ~~September~~June 30, ~~2016,~~2021 primarily as a result of timing differences in operating assets and ~~liabilities.~~liabilities, as well as increased net operating income from the property portfolio.

During the ~~nine~~six months ended ~~September~~June 30, ~~2017, we invested 63.0% less~~2022, net cash used in investing activities increased $55.3 million compared to the ~~nine~~six months ended ~~September~~June 30, ~~2016. The primary component of~~2021 primarily due to the ~~2016 investments was our~~ acquisition of the ~~11-property retail portfolio.~~Exelon Building, increased development activity, decreased paydowns of mezzanine loans, and increased contributions to equity method investments. The increase was partially offset by increased disposition activity.

~~Net~~During the six months ended June 30, 2022, net cash provided by financing activities ~~during the nine months ended September 30, 2017 decreased 79.0%~~increased $78.7 million compared to the ~~nine~~six months ended ~~September~~June 30, ~~2016,~~2021 primarily ~~as a result~~due to an increase in net proceeds from equity issuances and higher net issuances of debt, ~~and credit facility repayments during the 2017 period,~~which was partially offset by increased ~~net proceeds from equity issuances.~~dividends and distributions paid.

Non-GAAP Financial Measures

We calculate FFO in accordance with the standards established by the National Association of Real Estate Investment Trusts ~~(“NAREIT”~~("Nareit"). ~~NAREIT~~Nareit defines FFO as net income (loss) (calculated in accordance with GAAP), excluding gains (or losses) from sales of depreciable operating property, real estate related depreciation and amortization (excluding amortization of deferred financing costs), impairment of real estate assets, and after adjustments for unconsolidated partnerships and joint ventures.

FFO is a supplemental non-GAAP financial measure. Management uses FFO as a supplemental performance measure because we believe that FFO is beneficial to investors as a starting point in measuring our operational performance. Specifically, in excluding real estate related depreciation and amortization and gains and losses from property dispositions which do not relate to or are not indicative of operating performance, FFO provides a performance measure that, when compared year-over-year, captures trends in occupancy rates, rental rates, and operating costs. We also believe that, as a widely recognized measure of the performance of REITs, FFO will be used by investors as a basis to compare our operating performance with that of other REITs.

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However, because FFO excludes depreciation and amortization and captures neither the changes in the value of our properties that result from use or market conditions nor the level of capital expenditures and leasing commissions necessary to maintain the operating performance of our properties, all of which have real economic effects and could materially impact our results from operations, the utility of FFO as a measure of our performance is limited. In addition, other equity REITs may not calculate FFO in accordance with the ~~NAREIT~~Nareit definition as we do, and, accordingly, our calculation of FFO may not be comparable to such other REITs’ ~~calculation~~calculations of FFO. Accordingly, FFO should be considered only as a supplement to net income as a measure of our performance. FFO should not be used as a measure of our liquidity, nor is it indicative of funds available to fund our cash needs, including our ability to pay dividends or service indebtedness. Also, FFO should not be used as a supplement to or substitute for cash flow from operating activities computed in accordance with GAAP.

We also believe that the computation of FFO in accordance with ~~NAREIT’s~~Nareit’s definition includes certain items that are not indicative of the results provided by our operating property portfolio and affect the comparability of our year-over-year performance. Accordingly, management believes that Normalized FFO is a more useful performance measure that excludes certain items, including but not limited to, debt extinguishment losses and prepayment penalties, impairment of intangible assets and liabilities, property acquisition, development and other pursuit costs, mark-to-market adjustments for interest rate derivatives not designated as cash flow hedges, certain costs for interest rate caps designated as cash flow hedges, provision for

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unrealized non-cash credit losses, amortization of right-of-use assets attributable to finance leases, severance related costs, and other non-comparable items.

The following table sets forth a reconciliation of FFO and Normalized FFO for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2022 and ~~2016~~2021 to net income, the most directly comparable GAAP measure:


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(in thousands, except per share and unit amounts)
Net income attributable to common stockholders and OP Unitholders	$	27,752	$	5,568	$	37,041	$	8,690
Depreciation and amortization (1)	18,509		17,285		36,794		35,351
Gain on operating real estate dispositions, net (2)	(19,493)		—		(19,493)		(3,464)
Impairment of real estate assets	201		—		201		3,039
FFO attributable to common stockholders and OP Unitholders	26,969		22,853		54,543		43,616
Acquisition, development and other pursuit costs	26		32		37		103
Impairment of intangible assets and liabilities	85		83		132		83
Loss on extinguishment of debt	618		—		776		—
Unrealized credit loss provision	295		388		900		333
Amortization of right-of-use assets - finance leases	277		278		555		467
Change in fair value of derivatives not designated as cash flow hedges and other	(2,548)		(314)		(6,730)		(707)
Amortization of interest rate cap premiums on designated cash flow hedges	481		59		523		117

Normalized FFO available to common stockholders and OP Unitholders	$	26,203	$	23,379	$	50,736	$	44,012
Net income attributable to common stockholders and OP Unitholders per diluted share and unit	$	0.31	$	0.07	$	0.42	$	0.11
FFO attributable to common stockholders and OP Unitholders per diluted share and unit	$	0.31	$	0.28	$	0.62	$	0.54
Normalized FFO attributable to common stockholders and OP Unitholders per diluted share and unit	$	0.30	$	0.29	$	0.58	$	0.54
Weighted average common shares and units - diluted	88,331		81,262		88,042		80,771


(1) The adjustment for depreciation and amortization for the three and six months ended June 30, 2022 excludes $0.3 million and $0.5 million, respectively, of depreciation attributable to our joint venture partners.
(2) The adjustment for gain on operating real estate dispositions for the six months ended June 30, 2021 excludes the gain on sale of easement rights on a non-operating parcel.

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
(unaudited, $ in thousands)
Net income $ 10,461
$ 7,946
$ 24,157
$ 37,610
Depreciation and amortization 9,239
8,885
28,018
25,636
Gain on operating real estate dispositions (4,200 ) (3,753 ) (7,595 ) (30,010 )
Funds from operations $ 15,500
$ 13,078
$ 44,580
$ 33,236
Acquisition, development and other pursuit costs 61
345
477
1,486
Impairment charges 19
149
50
184
Loss on extinguishment of debt —
82
—
82
Change in fair value of interest rate derivatives (87 ) (498 ) (300 ) 2,264
Normalized funds from operations $ 15,493
$ 13,156
$ 44,807
$ 37,252
Net income per diluted share and unit $ 0.17
$ 0.15
$ 0.41
$ 0.77
FFO per diluted share and unit $ 0.25
$ 0.25
$ 0.75
$ 0.68
Normalized FFO per diluted share and unit $ 0.25
$ 0.26
$ 0.75
$ 0.76
Weighted average common shares and units - diluted 62,779
51,512
59,423
48,869

The adjustment for gain on operating real estate dispositions excludes the gain recognized in the three months ended March 31, 2016 on the Newport News Economic Authority building because this building was sold before being placed in service. Additionally, the adjustment for gain on operating real estate dispositions excludes the gain recognized in the three months ended September 30, 2017 on the land outparcel at Sandbridge Commons because this was a non-operating parcel.

Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements that have been prepared in accordance with GAAP. The preparation of these financial statements requires us to exercise our best judgment in making estimates that affect the reported amounts of assets, liabilities, revenues, and expenses. We base our estimates on historical experience and other assumptions that we believe to be reasonable under the circumstances. We evaluate our estimates on an ongoing basis, based upon then-currently available information. Actual results could differ from these estimates. We discuss the accounting policies and estimates that are most critical to understanding our reported financial results in our Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2021.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

~~The primary~~There have been no material changes to the Company's market risk ~~to which we are exposed is interest rate risk. Our primary interest rate exposure is LIBOR. We primarily use fixed interest rate financing to manage our~~since December 31, 2021. For a discussion of the Company's exposure to ~~fluctuations~~market risk, refer to the Company's market risk disclosure set forth in ~~interest rates. On a limited basis, we~~Part II, Item 7A, "Quantitative and Qualitative Disclosures About Market Risk" of our Annual Report on Form 10-K for the year ended December 31, 2021.

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~~also use derivative financial instruments to manage interest rate risk. We do not use these derivatives for trading or other speculative purposes.~~

At September 30, 2017, approximately $234.8 million, or 47.6%, of our debt had fixed interest rates and approximately $258.7 million, or 52.4%, had variable interest rates. At September 30, 2017, LIBOR was approximately 123 basis points. Assuming no increase in the level of our variable rate debt, if LIBOR increased by 100 basis points, our cash flow would increase by approximately $0.5 million per year as a result of the interest rate caps. Assuming no increase in the level of our variable rate debt, if LIBOR decreased by 100 basis points, our cash flow would increase by approximately $2.4 million per year.

Item 4. Controls and Procedures

We maintain disclosure controls and procedures (as such term is defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) that are designed to ensure that information required to be disclosed in our reports under the Exchange Act is processed, recorded, summarized and reported within the time periods specified in the rules and regulations of the SEC and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

We have carried out an evaluation, under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, regarding the effectiveness of our disclosure controls and procedures as of ~~September~~June 30, ~~2017,~~2022, the end of the period covered by this report. Based on the foregoing, our Chief Executive Officer and Chief Financial Officer have concluded, as of ~~September~~June 30, ~~2017,~~2022, that our disclosure controls and procedures were effective in ensuring that information required to be disclosed by us in reports filed or submitted under the Exchange Act: (i) is processed, recorded, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) is accumulated and communicated to our management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate to allow for timely decisions regarding required disclosure.

There have been no changes to our internal control over financial reporting during the ~~period covered by this report~~quarter ended June 30, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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Part II. Other Information

Item 1. Legal Proceedings

We are not currently a party, as plaintiff or defendant, to any legal proceedings that we believe to be material or which, individually or in the aggregate, would be expected to have a material effect on our business, financial condition, or results of operations if determined adversely to us. We may be subject to ongoing litigation relating to our portfolio and the properties comprising our portfolio, and we expect to otherwise be party from time to time to various lawsuits, claims, and other legal proceedings that arise in the ordinary course of our business.

Item 1A. Risk Factors

There have been no material changes from the risk factors disclosed in Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, ~~2016.~~ 2021.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Unregistered Sales of Equity Securities

None.

Issuer Purchases of Equity Securities

None.

~~Table of Contents~~

Item 3. Defaults on Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

~~The description~~Compensation of Chief Financial Officer, Treasurer and Corporate Secretary

On August 5, 2022, the Compensation Committee of our Board of Directors (the “Compensation Committee”) approved new compensatory arrangements for Matthew T. Barnes-Smith, our Chief Financial Officer, Treasurer and Corporate Secretary. As a result of the ~~credit facility~~new compensatory arrangements, Mr. Barnes-Smith’s base salary is now $300,000 per year. The Compensation Committee also approved compensation arrangements for Mr. Barnes-Smith pursuant to our short-term incentive program (the “STIP”). As previously disclosed, payouts under ~~"Management's Discussion~~the STIP are based on us achieving certain threshold, target and ~~Analysis~~maximum levels of ~~Financial Condition~~corporate and ~~Results~~individual performance metrics. Under the STIP, Mr. Barnes-Smith will be entitled to receive the following cash bonus payout at threshold, target and maximum performance: (1) $65,000 (Threshold), (2) $100,000 (Target) and (3) $135,000 (Maximum). Under the STIP, Mr. Barnes-Smith will be entitled to receive the following restricted stock awards under our Amended and Restated 2013 Equity Incentive Plan at threshold, target and maximum performance: (1) $65,000 (Threshold), (2) $100,000 (Target) and (3) $135,000 (Maximum). The Compensation Committee also approved a monthly automobile allowance (including automobile insurance and gas) for Mr. Barnes-Smith in the amount of ~~Operations-Liquidity~~$1,950.

Executive Severance Benefit Plan

On August 5, 2022, the Compensation Committee also approved changes to our previously disclosed Executive Severance Benefit Plan (the “Severance Plan”), in which our named executive officers participate. The Severance Plan provides three levels of benefits; Tier I, Tier II and ~~Capital Resources-Credit Facility" is incorporated by reference~~Tier III. The Compensation Committee approved the designation of Mr. Barnes-Smith as a Tier III participant under the Severance Plan and approved the designation of Shawn J. Tibbetts, our Chief Operating Officer, as a Tier II participant under the Severance Plan. Mr. Tibbetts previously was designated as Tier III participant under the Severance Plan. See “Potential Payments Upon Termination or Change in ~~this Item 5.~~Control” in our definitive Proxy Statement, dated April 22, 2022, for further information regarding the Severance Plan.

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Item 6. Exhibits

The exhibits listed in the accompanying Exhibit Index are filed, furnished or incorporated by reference (as applicable) as part of this Quarterly Report on Form 10-Q.

~~Exhibit Index~~


Exhibit No.		Description
3.1		Articles of Amendment and Restatement of Armada Hoffler Properties, Inc. (Incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-3, filed on June 2, 2014).

3.2		Amended and Restated Bylaws of Armada Hoffler Properties, Inc. (Incorporated by reference to Exhibit 3.2 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2021, filed on February 24, 2022).


~~Exhibit No.~~		~~Description~~
~~10.1~~3.3		~~Amended~~Articles Supplementary Designating the Rights and ~~Restated Credit~~Preferences of the 6.75% Series A Cumulative Redeemable Perpetual Preferred Stock (Incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed on June 17, 2019).

3.4		Articles Supplementary relating to Section 3-802(c) of the Maryland General Corporation Law (Incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed on February 24, 2020).

3.5		Articles Supplementary Designating Additional 6.75% Series A Cumulative Redeemable Perpetual Preferred Stock, dated March 6, 2020 (Incorporated by reference to Exhibit 4.10 to the Company’s Form S-3, filed on March 9, 2020).

3.6		Articles Supplementary Designating Additional 6.75% Series A Cumulative Redeemable Perpetual Preferred Stock, dated July 2, 2020 (Incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed on July 6, 2020).

3.7		Articles Supplementary Designating Additional 6.75% Series A Cumulative Redeemable Perpetual Preferred Stock, dated August 17, 2020 (Incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed on August 20, 2020).

10.1*		Indemnification Agreement ~~dated as of October 26, 2017, among Armada Hoffler, L.P., as Borrower,~~between Armada Hoffler Properties, Inc.~~, as Parent, Bank~~ and each of ~~America, N.A., as Administrative Agent,~~the Directors and ~~the other agents and Lenders party~~Officers listed on Schedule A thereto.

~~10.2~~31.1*		Amended and Restated Guaranty Agreement, dated as of October 26, 2017, among certain subsidiaries of Armada Hoffler, L.P. named therein for the benefit of the Administrative Agent and the Lenders named in the Amended and Restated Credit Agreement.

~~15.1~~	~~Acknowledgment of Ernst & Young LLP, Independent Registered Public Accounting Firm~~

~~31.1~~	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

~~31.2~~31.2*		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

~~32.1~~32.1**		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

~~32.2~~32.2**		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

~~101.INS~~101*		The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2022, were formatted in Inline XBRL ~~Instance Document~~(Extensible Business Reporting Language): (i) Condensed Consolidated Balance Sheet, (ii) Condensed Consolidated Statements of Comprehensive Income, (iii) Condensed Consolidated Statements of Equity, (iv) Condensed Consolidated Statements of Cash Flows, and (v) Notes to Condensed Consolidated Financial Statements. The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

~~101.SCH~~104*		Cover page Interactive Data File - the cover page XBRL ~~Taxonomy Extension Schema Document~~tags are embedded within the Inline XBRL.

~~101.CAL~~		~~XBRL Taxonomy Extension Calculation Linkbase Document~~

~~101.LAB~~		~~XBRL Taxonomy Extension Label Linkbase Document~~

~~101.PRE~~		~~XBRL Taxonomy Extension Presentation Linkbase Document~~

~~101.DEF~~		~~XBRL Definition Linkbase~~

*		Filed herewith

**		Furnished herewith

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Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.




		ARMADA HOFFLER PROPERTIES, INC.

Date: ~~November 1, 2017~~August 5, 2022		/s/ ~~LOUIS S. HADDAD~~
	Louis S. Haddad
		Louis S. Haddad
		President and Chief Executive Officer
		(Principal Executive Officer)

Date: ~~November 1, 2017~~August 5, 2022		/s/ ~~MICHAEL P. O’HARA~~Matthew T. Barnes-Smith
		~~Michael P. O’Hara~~Matthew T. Barnes-Smith
		Chief Financial Officer, Treasurer and ~~Treasurer~~Corporate Secretary
		(Principal Accounting and Financial Officer)



		Page

Part I. Financial Information		1

Item 1.	Financial Statements	1

	Condensed Consolidated Balance Sheets	1

	Condensed Consolidated Statements of Comprehensive Income	2

	Condensed Consolidated Statements of Equity	3

	Condensed Consolidated Statements of Cash Flows	5

	Notes to Condensed Consolidated Financial Statements	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1924

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	3642

Item 4.	Controls and Procedures	3743

Part II. Other Information		3744

Item 1.	Legal Proceedings	3744

Item 1A.	Risk Factors	3744

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3744

Item 3.	Defaults Upon Senior Securities	3944

Item 4.	Mine Safety Disclosures	3944

Item 5.	Other Information	3944

Item 6.	Exhibits	3945



Signatures		4046



	September 30, 2017			December 31, 2016
	(Unaudited)
ASSETS
Real estate investments:
Income producing property	$	906,225		$	894,078
Held for development	680			680
Construction in progress	62,948			13,529
	969,853			908,287
Accumulated depreciation	(157,932		)	(139,553		)
Net real estate investments	811,921			768,734
Cash and cash equivalents	19,721			21,942
Restricted cash	3,195			3,251
Accounts receivable, net	15,826			15,052
Notes receivable	75,522			59,546
Construction receivables, including retentions	35,923			39,433
Construction contract costs and estimated earnings in excess of billings	110			110
Equity method investments	11,169			10,235
Other assets	57,611			64,165
Total Assets	$	1,030,998		$	982,468
LIABILITIES AND EQUITY
Indebtedness, net	$	488,609		$	522,180
Accounts payable and accrued liabilities	14,383			10,804
Construction payables, including retentions	48,160			51,130
Billings in excess of construction contract costs and estimated earnings	5,232			10,167
Other liabilities	41,181			39,209
Total Liabilities	$	597,565		$	633,490

Redeemable noncontrolling interest	2,000			—

Stockholders’ equity:
Preferred stock, $0.01 par value, 100,000,000 shares authorized, none issued and outstanding as of September 30, 2017 and December 31, 2016	—			—
Common stock, $0.01 par value, 500,000,000 shares authorized, 44,936,652 and 37,490,361 shares issued and outstanding as of September 30, 2017 and December 31, 2016, respectively	449			374
Additional paid-in capital	288,485			197,114
Distributions in excess of earnings	(56,755		)	(49,345		)
Total stockholders’ equity	232,179			148,143
Noncontrolling interests	199,254			200,835
Total Equity	431,433			348,978
Total Liabilities and Equity	$	1,030,998		$	982,468



	Shares of common stock		Common Stock		Additional paid-in capital			Distributions in excess of earnings			Total stockholders' equity			Noncontrolling interests			Total Equity
Balance, January 1, 2017	37,490,361		$	374	$	197,114		$	(49,345	)	$	148,143		$	200,835		$	348,978
Net income	—		—		—			16,895			16,895			7,262			24,157
Net proceeds from sales of common stock	7,350,690		74		91,307			—			91,381			—			91,381
Restricted stock awards	116,704		1		1,381			—			1,382			—			1,382
Restricted stock award forfeitures	(21,103	)	—		(289		)	—			(289		)	—			(289		)
Issuance of common units for acquisition of interest in real estate investment	—		—		(987		)	—			(987		)	982			(5		)
Redemption of operating partnership units	—		—		(41		)	—			(41		)	(188		)	(229		)
Dividends and distributions declared	—		—		—			(24,305		)	(24,305		)	(9,637		)	(33,942		)
Balance, September 30, 2017	44,936,652		$	449	$	288,485		$	(56,755	)	$	232,179		$	199,254		$	431,433



Land	$	5,550
Site improvements	232
Building and improvements	6,975
In-place leases	1,382
Above-market leases	327
Below-market leases	(50		)
Net assets acquired	$	14,416



	September 30, 2017							December 31, 2016
	(Unaudited)
	Notional Amount		Fair Value					Notional Amount		Fair Value
			Asset		Liability					Asset		Liability
Interest rate swaps	$	56,124	$	10	$	(447	)	$	56,901	$	—	$	(829	)
Interest rate caps	370,000		707		—			270,000		259		—
Total	$	426,124	$	717	$	(447	)	$	326,901	$	259	$	(829	)



	Amount Outstanding				Interest Rate(a)		Effective Rate for Variable Debt			Maturity Date		Balance at Maturity
Secured Debt
Lightfoot Marketplace	$	12,894			LIBOR+1.90%		3.13	%		November 14, 2017		$	12,894
Sandbridge Commons	8,530				LIBOR+1.85%		3.08	%		January 17, 2018		8,045
Columbus Village Note 1	6,124				LIBOR+2.00%		3.05	%	(b)	April 5, 2018		6,033
Columbus Village Note 2	2,232				LIBOR+2.00%		3.23	%		April 5, 2018		2,108
Johns Hopkins Village	46,698				LIBOR+1.90%		3.13	%		July 30, 2018		46,698
North Point Note 1	9,623				6.45	%				February 5, 2019		9,333
Southgate Square	20,871				LIBOR+2.00%		3.23	%		April 29, 2021		18,925
249 Central Park Retail	16,910			(c)	LIBOR+1.95%		3.18	%		August 8, 2021		15,959
South Retail	7,420			(c)	LIBOR+1.95%		3.18	%		August 8, 2021		7,002
Fountain Plaza Retail	10,180			(c)	LIBOR+1.95%		3.18	%		August 8, 2021		9,608
4525 Main Street	32,034			(d)	3.25	%				September 10, 2021		30,774
Encore Apartments	24,966			(d)	3.25	%				September 10, 2021		24,006
Hanbury Village	19,622				3.78	%				August 15, 2022		17,109
Socastee Commons	4,796			(e)	4.57	%				January 6, 2023		4,223
North Point Note 2	2,486				7.25	%				September 15, 2025		1,344
Smith's Landing	19,954				4.05	%				June 1, 2035		—
Liberty Apartments	19,763			(e)	5.66	%				November 1, 2043		—
The Cosmopolitan	45,390				3.35	%				July 1, 2051		—
Harding Place	—				LIBOR+2.95%					February 24, 2020		—
Town Center Phase VI	—				LIBOR+3.50%					June 29, 2020		—
Total secured debt	$	310,493										$	214,061
Unsecured Debt
Senior unsecured revolving credit facility	58,000				LIBOR+1.40% to 2.00%		2.78	%		February 20, 2019	(f)	58,000
Senior unsecured term loan	75,000				LIBOR+1.35% to 1.95%		2.73	%		February 20, 2020	(f)	75,000
Senior unsecured term loan	50,000				LIBOR+1.35% to 1.95%		3.50	%	(b)	February 20, 2020	(f)	50,000
Total unsecured debt	$	183,000										$	183,000
Total principal balances	493,493											397,061
Unamortized GAAP adjustments	(4,884		)									—
Indebtedness, net	$	488,609										$	397,061



Year⁽¹⁾	Amount Due		Percentage of Total
2017	$	13,948	3	%
2018	67,263		14	%
2019	71,376		15	%
2020	130,057		26	%
2021	110,458		22	%
Thereafter	100,391		20	%
	$	493,493	100	%