Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2022 | May 03, 2022 | |
Entity Listings [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-35908 | |
Entity Registrant Name | ARMADA HOFFLER PROPERTIES, INC. | |
Entity Incorporation, State or Country Code | MD | |
Entity Tax Identification Number | 46-1214914 | |
Entity Address, Address Line One | 222 Central Park Avenue | |
Entity Address, Address Line Two | Suite 2100 | |
Entity Address, City or Town | Virginia Beach | |
Entity Address, State or Province | VA | |
Entity Address, Postal Zip Code | 23462 | |
City Area Code | 757 | |
Local Phone Number | 366-4000 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 67,707,299 | |
Amendment Flag | false | |
Entity Central Index Key | 0001569187 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --12-31 | |
Common stock | ||
Entity Listings [Line Items] | ||
Title of 12(b) Security | Common Stock, $0.01 par value per share | |
Trading Symbol | AHH | |
Security Exchange Name | NYSE | |
Redeemable convertible preferred stock | ||
Entity Listings [Line Items] | ||
Title of 12(b) Security | 6.75% Series A Cumulative Redeemable Perpetual Preferred Stock, $0.01 par value per share | |
Trading Symbol | AHHPrA | |
Security Exchange Name | NYSE |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 | |
Real estate investments: | |||
Income producing property | $ 1,901,331 | $ 1,658,609 | |
Held for development | 6,294 | 6,294 | |
Construction in progress | 66,216 | 72,535 | |
Gross real estate investments | 1,973,841 | 1,737,438 | |
Accumulated depreciation | (299,452) | (285,814) | |
Net real estate investments | 1,674,389 | 1,451,624 | |
Real estate investments held for sale | 80,754 | 80,751 | |
Cash and cash equivalents | 32,910 | 35,247 | |
Restricted cash | 6,576 | [1] | 5,196 |
Accounts receivable, net | 30,162 | 29,576 | |
Notes receivable, net | 133,557 | 126,429 | |
Construction receivables, including retentions, net | 19,780 | 17,865 | |
Construction contract costs and estimated earnings in excess of billings | 121 | 243 | |
Equity method investment | 20,777 | 12,685 | |
Operating lease right-of-use assets | 23,440 | 23,493 | |
Finance lease right-of-use assets | 46,711 | 46,989 | |
Acquired lease intangible assets | 111,530 | 62,038 | |
Other assets | 71,248 | 45,927 | |
Total Assets | 2,251,955 | 1,938,063 | |
LIABILITIES AND EQUITY | |||
Indebtedness, net | 1,137,467 | 917,556 | |
Liabilities related to assets held for sale | 41,364 | 41,364 | |
Accounts payable and accrued liabilities | 23,838 | 29,589 | |
Construction payables, including retentions | 33,177 | 31,166 | |
Billings in excess of construction contract costs and estimated earnings | 15,054 | 4,881 | |
Operating lease liabilities | 31,657 | 31,648 | |
Finance lease liabilities | 46,242 | 46,160 | |
Other liabilities | 54,952 | 55,876 | |
Total Liabilities | 1,383,751 | 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 March 31, 2022 and December 31, 2021 | 171,085 | 171,085 | |
Common stock, $0.01 par value, 500,000,000 shares authorized; 67,695,361 and 63,011,700 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively | 675 | 630 | |
Additional paid-in capital | 587,474 | 525,030 | |
Distributions in excess of earnings | (145,687) | (141,360) | |
Accumulated other comprehensive gain (loss) | 6,476 | (33) | |
Total stockholders’ equity | 620,023 | 555,352 | |
Noncontrolling interests in investment entities | 23,794 | 629 | |
Noncontrolling interests in Operating Partnership | 224,387 | 223,842 | |
Total Equity | 868,204 | 779,823 | |
Total Liabilities and Equity | $ 2,251,955 | $ 1,938,063 | |
[1] | Restricted cash represents amounts held by lenders for real estate taxes, insurance, and reserves for capital improvements. |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, shares issued (in shares) | 67,695,361 | 63,011,700 |
Common stock, shares outstanding (in shares) | 67,695,361 | 63,011,700 |
Redeemable convertible preferred stock | ||
Preferred stock, shares authorized (in shares) | 9,980,000 | 9,980,000 |
Preferred Stock dividend rate percentage | 6.75% | 6.75% |
Preferred stock, shares issued (in shares) | 6,843,418 | 6,843,418 |
Preferred stock, shares outstanding (in shares) | 6,843,418 | 6,843,418 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Comprehensive Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Revenues | ||
Rental revenues | $ 54,635 | $ 45,741 |
General contracting and real estate services revenues | 24,650 | 35,563 |
Total revenues | 79,285 | 81,304 |
Expenses | ||
Rental expenses | 12,669 | 10,832 |
Real estate taxes | 5,404 | 5,306 |
General contracting and real estate services expenses | 23,821 | 34,275 |
Depreciation and amortization | 18,557 | 18,066 |
Amortization of right-of-use assets - finance leases | 278 | 189 |
General and administrative expenses | 4,708 | 4,021 |
Acquisition, development and other pursuit costs | 11 | 71 |
Impairment charges | 47 | 3,039 |
Total expenses | 65,495 | 75,799 |
Gain on real estate dispositions, net | 0 | 3,717 |
Operating income | 13,790 | 9,222 |
Interest income | 3,568 | 4,116 |
Interest expense | (9,031) | (7,975) |
Loss on extinguishment of debt | (158) | 0 |
Change in fair value of derivatives and other | 4,182 | 393 |
Unrealized credit loss (provision) release | (605) | 55 |
Other income (expense), net | 229 | 179 |
Income before taxes | 11,975 | 5,990 |
Income tax benefit | 301 | 19 |
Net income | 12,276 | 6,009 |
Net income attributable to noncontrolling interests: | ||
Investment entities | (100) | 0 |
Operating Partnership | (2,183) | (811) |
Net income attributable to Armada Hoffler Properties, Inc. | 9,993 | 5,198 |
Preferred stock dividends | (2,887) | (2,887) |
Net income attributable to common stockholders | $ 7,106 | $ 2,311 |
Net income attributable to common stockholders per share (basic) (in dollars per share) | $ 0.11 | $ 0.04 |
Net income attributable to common stockholders per share (diluted) (in dollars per share) | $ 0.11 | $ 0.04 |
Weighted-average common shares outstanding (basic) (in shares) | 67,128 | 59,422 |
Weighted-average common shares outstanding (diluted) (in shares) | 67,128 | 59,422 |
Comprehensive income: | ||
Net income | $ 12,276 | $ 6,009 |
Unrealized cash flow hedge gains | 7,722 | 2,276 |
Realized cash flow hedge losses reclassified to net income | 787 | 1,078 |
Comprehensive income | 20,785 | 9,363 |
Comprehensive income attributable to Armada Hoffler Properties, Inc. | $ 16,502 | $ 7,681 |
Revenue, Product and Service [Extensible List] | Real Estate [Member] | Real Estate [Member] |
Noncontrolling interests in investment entities | ||
Expenses | ||
Net income | $ 100 | $ 0 |
Comprehensive income: | ||
Net income | 100 | 0 |
Comprehensive income loss attributable to noncontrolling interests: | (100) | 0 |
Noncontrolling interests in Operating Partnership | ||
Expenses | ||
Net income | 2,183 | 811 |
Comprehensive income: | ||
Net income | 2,183 | 811 |
Unrealized cash flow hedge gains | 1,815 | 591 |
Realized cash flow hedge losses reclassified to net income | 185 | 280 |
Comprehensive income loss attributable to noncontrolling interests: | $ (4,183) | $ (1,682) |
Condensed Consolidated Statem_2
Condensed Consolidated Statement of Equity - USD ($) $ in Thousands | Total | Total stockholders' equity | Preferred stock | Common stock | Additional paid-in capital | Distributions in excess of earnings | Accumulated other comprehensive loss | Noncontrolling interests in investment entities | Noncontrolling interests in Operating Partnership |
Beginning balance at Dec. 31, 2020 | $ 756,802 | $ 523,199 | $ 171,085 | $ 591 | $ 472,747 | $ (112,356) | $ (8,868) | $ 488 | $ 233,115 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income | 6,009 | 5,198 | 5,198 | 0 | 811 | ||||
Unrealized cash flow hedge gains | 2,276 | 1,685 | 1,685 | 591 | |||||
Realized cash flow hedge losses reclassified to net income | 1,078 | 798 | 798 | 280 | |||||
Net proceeds from issuance of common stock | 8,981 | 8,981 | 7 | 8,974 | |||||
Noncontrolling interest in acquired real estate entity | 0 | ||||||||
Restricted stock awards, net | 632 | 632 | 1 | 631 | |||||
Redemption of operating partnership units | (3) | 131 | 0 | 131 | (134) | ||||
Dividends declared on preferred stock | (2,887) | (2,887) | (2,887) | ||||||
Dividends and distributions declared | (12,136) | (9,008) | (9,008) | (3,128) | |||||
Ending balance at Mar. 31, 2021 | 760,752 | 528,729 | 171,085 | 599 | 482,483 | (119,053) | (6,385) | 488 | 231,535 |
Beginning balance at Dec. 31, 2021 | 779,823 | 555,352 | 171,085 | 630 | 525,030 | (141,360) | (33) | 629 | 223,842 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income | 12,276 | 9,993 | 9,993 | 100 | 2,183 | ||||
Unrealized cash flow hedge gains | 7,722 | 5,907 | 5,907 | 1,815 | |||||
Realized cash flow hedge losses reclassified to net income | 787 | 602 | 602 | 185 | |||||
Net proceeds from issuance of common stock | 65,194 | 65,194 | 45 | 65,149 | |||||
Noncontrolling interest in acquired real estate entity | 23,065 | 23,065 | |||||||
Restricted stock awards, net | 1,064 | 1,064 | 0 | 1,064 | |||||
Acquisitions of noncontrolling interests | (3,901) | (3,901) | (3,901) | ||||||
Redemption of operating partnership units | 0 | 132 | 132 | (132) | |||||
Dividends declared on preferred stock | (2,887) | (2,887) | (2,887) | ||||||
Dividends and distributions declared | (14,939) | (11,433) | (11,433) | (3,506) | |||||
Ending balance at Mar. 31, 2022 | $ 868,204 | $ 620,023 | $ 171,085 | $ 675 | $ 587,474 | $ (145,687) | $ 6,476 | $ 23,794 | $ 224,387 |
Condensed Consolidated Statem_3
Condensed Consolidated Statement of Equity (Parenthetical) - $ / shares | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Statement of Stockholders' Equity [Abstract] | ||
Dividend declared (in dollars per share) | $ 0.17 | $ 0.15 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | ||
OPERATING ACTIVITIES | |||
Net income | $ 12,276 | $ 6,009 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation of buildings and tenant improvements | 13,638 | 12,599 | |
Amortization of leasing costs, in-place lease intangibles and below market ground rents - operating leases | 4,919 | 5,467 | |
Accrued straight-line rental revenue | (1,492) | (1,891) | |
Amortization of leasing incentives and above or below-market rents | (264) | (252) | |
Amortization of right-of-use assets - finance leases | 278 | 189 | |
Accrued straight-line ground rent expense | 48 | 33 | |
Unrealized credit loss provision (release) | 605 | (55) | |
Adjustment for uncollectable lease accounts | 241 | 272 | |
Noncash stock compensation | 1,609 | 1,017 | |
Impairment charges | 47 | 3,039 | |
Noncash interest expense | 909 | 626 | |
Noncash loss on extinguishment of debt | 158 | 0 | |
Gain on real estate dispositions, net | 0 | (3,717) | |
Change in fair value of derivatives and other | (4,182) | (393) | |
Changes in operating assets and liabilities: | |||
Property assets | 69 | 3,664 | |
Property liabilities | (4,781) | (6,649) | |
Construction assets | (9,779) | 9,354 | |
Construction liabilities | 17,067 | (19,063) | |
Interest receivable | (784) | (2,114) | |
Net cash provided by operating activities | 30,582 | 8,135 | |
INVESTING ACTIVITIES | |||
Development of real estate investments | (28,675) | (9,354) | |
Tenant and building improvements | (727) | (3,054) | |
Acquisitions of real estate investments, net of cash received | (93,162) | (28,067) | |
Dispositions of real estate investments, net of selling costs | 0 | 9,156 | |
Notes receivable issuances | (17,651) | (7,532) | |
Notes receivable paydowns | 11,545 | 12,291 | |
Leasing costs | (862) | (670) | |
Contributions to equity method investments | (8,092) | (3,889) | |
Net cash used for investing activities | (137,624) | (31,119) | |
FINANCING ACTIVITIES | |||
Proceeds from issuance of common stock, net | 65,194 | 8,981 | |
Common shares tendered for tax withholding | (773) | (539) | |
Debt issuances, credit facility and construction loan borrowings | 284,113 | 17,590 | |
Debt and credit facility repayments, including principal amortization | (218,354) | (5,501) | |
Debt issuance costs | (3,100) | (1,710) | |
Acquisition of NCI in consolidated RE investments | (3,901) | 0 | |
Dividends and distributions | (17,094) | (11,679) | |
Net cash provided by financing activities | 106,085 | 7,142 | |
Net decrease in cash, cash equivalents, and restricted cash | (957) | (15,842) | |
Cash, cash equivalents, and restricted cash, beginning of period | 40,443 | 50,430 | |
Cash, cash equivalents, and restricted cash, end of period | [1] | 39,486 | 34,588 |
Supplemental Disclosures (noncash transactions): | |||
Increase in dividends and distributions payable | 732 | 3,344 | |
Decrease in accrued capital improvements and development costs | (4,664) | (1,689) | |
Operating Partnership units redeemed for common shares | 132 | 131 | |
Debt assumed at fair value in conjunction with real estate purchases | 156,071 | 0 | |
Noncontrolling interest in acquired real estate entity | 23,065 | 0 | |
Recognition of finance lease right-of-use assets | 0 | 24,466 | |
Recognition of finance lease liabilities | $ 0 | $ 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): March 31, 2022 March 31, 2021 Cash and cash equivalents $ 32,910 $ 24,762 Restricted cash (a) 6,576 9,826 Cash, cash equivalents, and restricted cash $ 39,486 $ 34,588 (a) Restricted cash represents amounts held by lenders for real estate taxes, insurance, and reserves for capital improvements. |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows - Footnotes (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | ||
Statement of Cash Flows [Abstract] | ||||||
Cash and cash equivalents | $ 32,910 | $ 35,247 | $ 24,762 | |||
Restricted cash | 6,576 | [1] | 5,196 | 9,826 | [1] | |
Cash, cash equivalents, and restricted cash | $ 39,486 | [2] | $ 40,443 | $ 34,588 | [2] | $ 50,430 |
[1] | Restricted cash represents amounts held by lenders for real estate taxes, insurance, and reserves for capital improvements. | |||||
[2] | The following table provides a reconciliation of cash, cash equivalents and restricted cash reported in the Condensed Consolidated Statements of Cash Flows (in thousands): March 31, 2022 March 31, 2021 Cash and cash equivalents $ 32,910 $ 24,762 Restricted cash (a) 6,576 9,826 Cash, cash equivalents, and restricted cash $ 39,486 $ 34,588 (a) Restricted cash represents amounts held by lenders for real estate taxes, insurance, and reserves for capital improvements. |
Business of Organization
Business of Organization | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business of Organization | Business of Organization Armada Hoffler Properties, Inc. (the "Company") is a 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") and, as of March 31, 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 thereof. As of March 31, 2022, the Company's property portfolio consisted of 57 stabilized operating properties and four properties either under development or not yet stabilized. Refer to Note 5 for information related to the Company's recent acquisitions and dispositions of properties. |
Significant Accounting Policies
Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies Basis of Presentation The accompanying condensed consolidated financial statements were prepared in accordance with U.S. generally accepted accounting principles ("GAAP"). The condensed consolidated financial statements include the financial position and results of operations of the Company and its consolidated 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. 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, 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. Reclassifications Certain items have been reclassified from their prior year classifications to conform to the current year presentation. The amounts previously classified as Interest expense on indebtedness and Interest expense on finance leases for the three months ended March 31, 2021 in the Condensed Consolidated Statement of Comprehensive Income are now included in a single line item as Interest expense. These reclassifications had no effect on net income or stockholders' equity as previously reported. Recent Accounting Pronouncements 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. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur. The Company is currently evaluating the effect that adopting this standard may have on its Consolidated Financial Statements. 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 See the Company's Annual Report on Form 10-K for the year ended December 31, 2021 for a description of other accounting principles upon which basis the accompanying consolidated financial statements were prepared. |
Segments
Segments | 3 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
Segments | 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. Net operating income of the Company’s reportable segments for the three months ended March 31, 2022 and 2021 was as follows (in thousands): Three Months Ended March 31, 2022 2021 Office real estate Rental revenues $ 17,023 $ 11,635 Rental expenses 4,140 2,875 Real estate taxes 1,504 1,358 Segment net operating income 11,379 7,402 Retail real estate Rental revenues 21,430 18,255 Rental expenses 3,501 2,836 Real estate taxes 2,238 2,027 Segment net operating income 15,691 13,392 Multifamily residential real estate Rental revenues 16,182 15,851 Rental expenses 5,028 5,121 Real estate taxes 1,662 1,921 Segment net operating income 9,492 8,809 General contracting and real estate services Segment revenues 24,650 35,563 Segment expenses 23,821 34,275 Segment gross profit 829 1,288 Net operating income $ 37,391 $ 30,891 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 March 31, 2022 and 2021 exclude revenue related to intercompany construction contracts of $8.6 million and $2.0 million, respectively, as it is eliminated in consolidation. General contracting and real estate services expenses for the three months ended March 31, 2022 and 2021 exclude expenses related to intercompany construction contracts of $8.5 million and $2.0 million, respectively. The following table reconciles net operating income to net income, the most directly comparable GAAP measure, for the three months ended March 31, 2022 and 2021 (in thousands): Three Months Ended March 31, 2022 2021 Net operating income $ 37,391 $ 30,891 Depreciation and amortization (18,557) (18,066) Amortization of right-of-use assets - finance leases (278) (189) General and administrative expenses (4,708) (4,021) Acquisition, development and other pursuit costs (11) (71) Impairment charges (47) (3,039) Gain on real estate dispositions, net — 3,717 Interest income 3,568 4,116 Interest expense (9,031) (7,975) Loss on extinguishment of debt (158) — Change in fair value of derivatives and other 4,182 393 Unrealized credit loss (provision) release (605) 55 Other income (expense), net 229 179 Income tax benefit 301 19 Net income $ 12,276 $ 6,009 |
Leases
Leases | 3 Months Ended |
Mar. 31, 2022 | |
Leases [Abstract] | |
Leases | Leases Lessee Disclosures As a lessee, the Company has eight ground leases on seven 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. Five of these leases have been classified as operating leases and three 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 one or more options to renew, with renewal terms that can extend the lease term from one Rental revenue for the three months ended March 31, 2022 and 2021 comprised the following (in thousands): Three Months Ended March 31, 2022 2021 Base rent and tenant charges $ 52,879 $ 43,598 Accrued straight-line rental adjustment 1,492 1,891 Lease incentive amortization (173) (159) Above/below market lease amortization 437 411 Total rental revenue $ 54,635 $ 45,741 |
Leases | Leases Lessee Disclosures As a lessee, the Company has eight ground leases on seven 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. Five of these leases have been classified as operating leases and three 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 one or more options to renew, with renewal terms that can extend the lease term from one Rental revenue for the three months ended March 31, 2022 and 2021 comprised the following (in thousands): Three Months Ended March 31, 2022 2021 Base rent and tenant charges $ 52,879 $ 43,598 Accrued straight-line rental adjustment 1,492 1,891 Lease incentive amortization (173) (159) Above/below market lease amortization 437 411 Total rental revenue $ 54,635 $ 45,741 |
Real Estate Investment
Real Estate Investment | 3 Months Ended |
Mar. 31, 2022 | |
Real Estate [Abstract] | |
Real Estate Investment | Real Estate Investment Property Acquisitions Exelon On January 14, 2022, the Company acquired a 79% membership interest and an additional 11% economic interest in 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 Constellation 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 small multifamily component, 1305 Dock Street. The Constellation Office includes a parking garage and retail space. The Exelon Building was subject to a $156.1 million loan, which the Company 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. The following table summarizes the purchase price allocation (including acquisition costs) based on relative fair value of the assets acquired for the two operating properties purchased during the three months ended March 31, 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 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. Equity Method Investment Harbor Point Parcel 3 The Company owns a 50% interest in 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 noncontrolling partner in the joint venture and will serve as the project's general contractor. During the three months ended March 31, 2022, the Company invested $8.2 million in Harbor Point Parcel 3. The Company has an estimated equity commitment of up to $42.0 million relating to this project. As of March 31, 2022 and December 31, 2021, the carrying value of the Company's investment in Harbor Point Parcel 3 was $20.9 million and $12.7 million, respectively. For the three months ended March 31, 2022, Harbor Point Parcel 3 had no operating activity, and therefore the Company received no allocated income. |
Notes Receivable and Current Ex
Notes Receivable and Current Expected Credit Losses | 3 Months Ended |
Mar. 31, 2022 | |
Receivables [Abstract] | |
Notes Receivable and Current Expected Credit Losses | Notes Receivable and Current Expected Credit Losses Notes Receivable The Company had the following notes receivable outstanding as of March 31, 2022 and December 31, 2021 ($ in thousands): Outstanding loan amount (a) Interest compounding Development Project March 31, December 31, Maximum loan commitment Interest rate City Park 2 $ 4,739 $ — $ 20,594 13.0 % Annually Interlock Commercial 83,974 95,379 107,000 (b) 15.0 % None Nexton Multifamily 24,180 23,567 22,315 11.0 % Annually Total mezzanine & preferred equity 112,893 118,946 $ 149,909 Exelon note receivable 12,834 — Other notes receivable 7,343 7,234 Notes receivable guarantee premium 1,665 1,243 Allowance for credit losses (1,178) (c) (994) Total notes receivable $ 133,557 $ 126,429 ________________________________________ (a) Outstanding loan amounts include any accrued and unpaid interest, as applicable. (b) This amount includes interest reserves. (c) The amount excludes $0.4 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 months ended March 31, 2022 and 2021 as follows (in thousands): Three Months Ended March 31, Development Project 2022 2021 City Park 2 $ 19 (a) $ — Interlock Commercial 2,826 (a) 3,075 (a) Nexton Multifamily 614 — Solis Apartments at Interlock — 938 Total mezzanine 3,459 4,013 Other interest income 109 103 Total interest income $ 3,568 $ 4,116 ________________________________________ (a) Includes recognition of interest income related to fee amortization. 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 does not consolidate the project in its consolidated financial statements. Interlock Commercial During February 2022, the Company received $13.5 million as a partial repayment of the Interlock Commercial mezzanine loan, which consisted of $11.1 million of principal and $2.4 million of interest, reducing the outstanding loan amount to $84.0 million. Allowance for Loan Losses The Company is exposed to credit losses primarily through its mezzanine lending activities and preferred equity investments. As of March 31, 2022, the Company had three 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 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 development project with conditions materially consistent with the Company's underwriting assumptions. • Special Mention: loans in this category show signs that the economic performance of the 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 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 of March 31, 2022 and obtained industry loan loss data relative to these risk ratings. Each of the outstanding loans as of March 31, 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 March 31, 2022, the Company reported $133.6 million of notes receivable, net of allowances of $1.2 million. Changes in the allowance for the three months ended March 31, 2022 and 2021 were as follows (in thousands): Three Months Ended March 31, 2022 2021 Beginning balance $ 994 $ 2,584 Unrealized credit loss provision (release) 605 (55) Extinguishment due to acquisition — (788) Ending balance (a) $ 1,599 $ 1,741 ________________________________________ (a) The amount as of March 31, 2022 includes $0.4 million of allowance related to the unfunded commitments, which was recorded as Other liabilities on the Consolidated Balance Sheet. The Company 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 underlying development project. As of March 31, 2022, the Company had the Exelon note, which bears interest at 3% per annum, on non-accrual status. The principal balance of the |
Construction Contracts
Construction Contracts | 3 Months Ended |
Mar. 31, 2022 | |
Contractors [Abstract] | |
Construction Contracts | Construction Contracts Construction contract costs and estimated earnings in excess of billings represent reimbursable costs and amounts earned under contracts in progress as of the balance sheet date. Such amounts become billable according to contract terms, which usually consider the passage of time, achievement of certain milestones, or completion of the project. The Company expects to bill and collect substantially all construction contract costs and estimated earnings in excess of billings as of March 31, 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 the balances in 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 three months ended March 31, 2022 and 2021 (in thousands): Three Months Ended Three Months Ended 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 — 15,055 — 3,143 Transferred to receivables (266) — (138) — Construction contract costs and estimated earnings not billed during the period 121 — 54 — Changes due to cumulative catch-up adjustment arising from changes in the estimate of the stage of completion 23 (1) — (81) Ending balance $ 121 $ 15,054 $ 54 $ 3,062 The Company defers pre-contract costs when such costs are directly associated with specific anticipated contracts and their recovery is probable. Pre-contract costs of $1.7 million and $2.2 million were deferred as of March 31, 2022 and December 31, 2021, respectively. Amortization of pre-contract costs for both the three months ended March 31, 2022 and 2021 was $0.1 million. Construction receivables and payables include retentions, which are amounts that are generally withheld until the completion of the contract or the satisfaction of certain restrictive conditions such as fulfillment guarantees. As of March 31, 2022 and December 31, 2021, construction receivables included retentions of $5.8 million and $3.1 million, respectively. The Company expects to collect substantially all construction receivables outstanding as of March 31, 2022 during the next twelve months. As of March 31, 2022 and December 31, 2021, construction payables included retentions of $6.9 million and $4.2 million, respectively. The Company expects to pay substantially all construction payables outstanding as of March 31, 2022 during the next twelve months. The Company’s net position on uncompleted construction contracts comprised the following as of March 31, 2022 and December 31, 2021 (in thousands): March 31, 2022 December 31, 2021 Costs incurred on uncompleted construction contracts $ 368,128 $ 379,993 Estimated earnings 14,473 15,115 Billings (397,534) (399,746) Net position $ (14,933) $ (4,638) Construction contract costs and estimated earnings in excess of billings $ 121 $ 243 Billings in excess of construction contract costs and estimated earnings (15,054) (4,881) Net position $ (14,933) $ (4,638) The above table reflects the net effect of projects closed as of March 31, 2022 and December 31, 2021, respectively. The Company’s balances and changes in construction contract price allocated to unsatisfied performance obligations (backlog) as of March 31, 2022 and 2021 were as follows (in thousands): Three Months Ended March 31, 2022 2021 Beginning backlog $ 215,518 $ 71,258 New contracts/change orders 228,603 3,124 Work performed (24,682) (35,544) Ending backlog $ 419,439 $ 38,838 The Company expects to complete a majority of the uncompleted contracts in place as of March 31, 2022 during the next 12 to 24 months. |
Indebtedness
Indebtedness | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Indebtedness | Indebtedness Credit Facility The Company has a senior credit facility that 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 $205.0 million senior unsecured term loan facility (the "term loan facility" and, together with the revolving credit facility, 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 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 January 24, 2025. The revolving credit facility bears interest at the London Inter-Bank Offered Rate ("LIBOR") plus a margin ranging from 1.30% to 1.85% and the term loan facility bears interest at LIBOR plus a margin ranging from 1.25% to 1.80%, in each case depending on the Company's total leverage. The Company is also obligated to pay an unused commitment fee of 15 or 25 basis points on the unused portions of the commitments under the revolving credit facility, depending on the amount of borrowings under the credit facility. As of March 31, 2022 and December 31, 2021, the outstanding balance on the revolving credit facility was $65.0 million and $5.0 million, respectively. The outstanding balance on the term loan facility was $205.0 million as of both dates. As of March 31, 2022, the effective interest rates on the revolving credit facility and the term loan facility were 1.95% and 1.90%, respectively. The Company may, at any time, voluntarily prepay any loan under the credit facility in whole or in part without premium or penalty. The Operating Partnership is the borrower, and its obligations under the credit facility are guaranteed by the Company and 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 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 in the event the Company did not meet its equity requirement, expired on January 4, 2022. On January 14, 2022, the Company acquired a 79% membership interest and an additional 11% economic interest in the partnership that owns the mixed-use property known as the Exelon Building. The property was subject to a $156.1 million loan, which the Company immediately refinanced following the 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 will mature on November 1, 2026. On January 19, 2022, the Company paid off the $14.1 million balance of the loan secured by the Delray Beach Plaza shopping center. On March 3, 2022, the Company paid off the $10.3 million balance of the loan secured by the Red Mill West Commons shopping center. During the three months ended March 31, 2022, the Company borrowed $14.2 million under its existing construction loans to fund new development and construction. |
Derivative Financial Instrument
Derivative Financial Instruments | 3 Months Ended |
Mar. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | Derivative Financial Instruments The Company enters into interest rate derivative contracts to manage exposure to interest rate risks. The Company does not use derivative financial instruments for trading or speculative purposes. Derivative financial instruments are recognized at fair value and presented within other assets and other liabilities in the condensed consolidated balance sheets. Gains and losses resulting from changes in the fair value of derivatives that are neither designated nor qualify as hedging instruments are recognized within the change in fair value of interest rate derivatives in the condensed consolidated statements of comprehensive income. For derivatives that qualify as cash flow hedges, the gain or loss is reported as a component of other comprehensive income (loss) and reclassified into earnings in the periods during which the hedged forecasted transaction affects earnings. As of March 31, 2022, the Company had the following LIBOR, Secured Overnight Financing Rate ("SOFR"), and BSBY interest rate caps ($ in thousands): Effective Date Maturity Date Notional Amount Strike Rate Premium Paid 5/15/2019 6/1/2022 $ 100,000 2.50% (LIBOR) $ 288 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) (b) 91 2/2/2021 2/1/2023 100,000 0.50% (LIBOR) 45 3/4/2021 4/1/2023 14,479 2.50% (LIBOR) 4 5/5/2021 5/1/2023 50,000 0.50% (LIBOR) 75 5/5/2021 5/1/2023 35,100 0.50% (LIBOR) 55 6/16/2021 7/1/2023 100,000 0.50% (LIBOR) 120 1/11/2022 2/1/2024 175,000 4.00% (BSBY) (b) 154 Total $ 758,954 $ 1,064 ________________________________________ (a) Designated as a cash flow hedge. (b) These interest rate caps are subject to SOFR and BSBY, which have been identified as alternatives to LIBOR. As of March 31, 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 33,244 (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 70,403 (a) 1-month BSBY (b) 1.05 % 2.35 % 9/30/2021 9/30/2026 Total $ 289,147 ________________________________________ (a) Designated as a cash flow hedge. (b) This interest rate swap is subject to BSBY, which has been identified as an alternative to LIBOR. 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 counterparty. During the next 12 months, the Company anticipates recognizing approximately $2.2 million of net hedging gains as reductions to interest expense. These amounts will be reclassified from accumulated other comprehensive gain into earnings to offset the variability of the hedged items during this period. The Company’s derivatives were comprised of the following as of March 31, 2022 and December 31, 2021 (in thousands): March 31, 2022 December 31, 2021 Notional Fair Value Notional Fair Value Asset Liability Asset Liability Derivatives not designated as accounting hedges Interest rate swaps $ 50,000 $ — $ (533) $ 50,000 $ — $ (1,454) Interest rate caps 574,579 4,468 — 399,579 1,019 — Total derivatives not designated as accounting hedges 624,579 4,468 (533) 449,579 1,019 (1,454) Derivatives designated as accounting hedges Interest rate swaps 239,146 6,414 (530) 239,633 1,317 (2,013) Interest rate caps 184,375 2,477 — 384,375 590 — Total derivatives $ 1,048,100 $ 13,359 $ (1,063) $ 1,073,587 $ 2,926 $ (3,467) The changes in the fair value of the Company’s derivatives during the three months ended March 31, 2022 and 2021 were comprised of the following (in thousands): Three Months Ended March 31, 2022 2021 Interest rate swaps $ 6,757 $ 2,462 Interest rate caps 5,182 241 Total change in fair value of interest rate derivatives $ 11,939 $ 2,703 Comprehensive income statement presentation: Change in fair value of derivatives and other $ 4,217 $ 427 Unrealized cash flow hedge gains (losses) 7,722 2,276 Total change in fair value of interest rate derivatives $ 11,939 $ 2,703 |
Equity
Equity | 3 Months Ended |
Mar. 31, 2022 | |
Equity [Abstract] | |
Equity | Equity Stockholders’ Equity On March 10, 2020, the Company commenced an at-the-market continuous equity offering program (the "ATM Program") through which the Company 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 $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 three months ended March 31, 2022, the Company 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 three months ended March 31, 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 May 3, 2022. On January 11, 2022, the Company completed an underwritten public offering of 4,025,000 shares of common stock, which were pre-purchased from the Company by the underwriter at a purchase price of $14.45 per share of common stock including fees, resulting in net proceeds after offering costs of $58.0 million. Noncontrolling Interests As of March 31, 2022 and December 31, 2021, the Company held a 76.7% and 75.3% common interest in the Operating Partnership, respectively. As of March 31, 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 Operating Partnership as it has the power to direct the activities of the Operating Partnership and the rights to absorb 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 Operating Partnership represent units of limited partnership interest in the Operating Partnership not held by the Company. As of March 31, 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 $23.8 million relates to the minority partners' interest in certain joint venture entities as of March 31, 2022, including $23.2 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, 2021. On January 1, 2022, due to the holders of Class A Units tendering an aggregate of 12,149 Class A Units for redemption by the Operating Partnership, the Company elected to satisfy the redemption requests through the issuance of an equal number of shares of common stock. Dividends and Distributions During the three months ended March 31, 2022, the following dividends/distributions 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 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 |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation The Company’s Amended and Restated 2013 Equity Incentive Plan (the "Equity Plan") permits the grant of restricted stock awards, stock options, stock appreciation rights, performance units, and other equity-based awards up to an aggregate of 1,700,000 shares of common stock. As of March 31, 2022, there were 432,603 shares available for issuance under the Equity Plan. During the three months ended March 31, 2022, the Company granted an aggregate of 224,027 shares of restricted stock to employees and non-employee directors with a weighted average grant date fair value of $14.84 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. Unvested restricted stock awards are entitled to receive dividends from their grant date. During the three months ended March 31, 2022 and 2021, the Company recognized $1.8 million and $1.2 million, respectively, of stock-based compensation cost. As of March 31, 2022, there were 214,210 nonvested restricted shares outstanding; the total unrecognized compensation expense related to nonvested restricted shares was $2.6 million, which the Company expects to recognize over the next 36 months. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | 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 — quoted prices in active markets for identical assets or liabilities Level 2 — observable inputs other than quoted prices in active markets for identical assets and liabilities Level 3 — unobservable inputs Except as disclosed below, the carrying amounts of the Company’s financial instruments approximate their fair 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 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. 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 as of March 31, 2022 and December 31, 2021 were as follows (in thousands): March 31, 2022 December 31, 2021 Carrying Fair Carrying Fair Indebtedness, net (a) $ 1,178,831 $ 1,184,117 $ 958,910 $ 976,520 Notes receivable, net 133,557 133,557 126,429 126,429 Interest rate swap liabilities 1,063 1,063 3,467 3,467 Interest rate swap and cap assets 13,359 13,359 2,926 2,926 _______________________________________ (a) The values as of March 31, 2022 and December 31, 2021 include the loan reclassified to liabilities related to assets held for sale. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions The Company provides general contracting services to certain related party entities that are included in these condensed consolidated financial statements. Revenue and gross profit from construction contracts with these entities for the three months ended March 31, 2022 were immaterial. Revenue and gross profit from construction contracts with these entities for the three months ended March 31, 2021 were $12.4 million and $0.5 million, respectively. As of March 31, 2022 and December 31, 2021, there was $2.1 million and $4.1 million, respectively, outstanding from related parties of the Company included in net construction receivables. 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, not including the Chief Executive Officer and Chief Financial Officer. These contracts were executed in 2019 and were substantially complete as of March 31, 2022. Aggregate gross profit was projected at $3.9 million to the Company, representing a gross profit margin of 5.1% as of March 31, 2022. As part of these contracts and per the requirements of the lender for this project, the Company issued a letter of credit for $9.5 million to secure certain performances of the Company's subsidiary construction company under the contracts, which remains outstanding as of March 31, 2022. 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 prior to May 13, 2023. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 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, 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 the Company's mezzanine lending activities, the Company has made guarantees to pay portions of certain senior loans of third parties associated with the development projects. As of March 31, 2022, the Company had an outstanding payment guarantee for Interlock Commercial for $37.5 million. The Company has recorded a $1.7 million liability and corresponding addition to notes receivable relating to this guarantee. 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 $2.1 million as of both March 31, 2022 and December 31, 2021. In addition, as of March 31, 2022, the Company has outstanding a letter of credit for $9.5 million to secure certain performances of the Company's subsidiary construction company under a related party project. On January 7, 2021, the Operating Partnership entered into a $15.0 million standby letter of credit using the available capacity under the credit facility to guarantee the funding of its investment in the Harbor Point Parcel 3 joint venture, which is the developer of T. Rowe Price's new global headquarters. This letter of credit was available for draw down on the revolving credit facility in the event the Company did not meet its equity requirement. The letter of credit expired on January 4, 2022 and was not required to be renewed. 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 March 31, 2022, the Company had three notes receivable with a total of $15.7 million of unfunded commitments. If commitments are funded in the future, interest will be charged at rates consistent with the existing investments. As of March 31, 2022, the Company has recorded a $0.4 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. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events The Company has evaluated subsequent events through the date on which this Quarterly Report on Form 10-Q was filed, the date on which these financial statements were issued, and identified the items below for discussion. Real Estate On April 1, 2022, the Company completed the sale of the Hoffler Place for a sale price of $43.1 million. On April 1, 2022, the Company acquired a 90% interest in Harbor Point Parcel 4, a joint venture with Beatty Development Group, for the purpose of developing a mixed-use project, which is planned to include multifamily units, retail space, and a parking garage. The Company has a projected equity commitment of $74.0 million relating to this project. On April 11, 2022, the Company exercised its option to acquire an additional 16% of the partnership that owns Annapolis Junction Apartments, increasing its ownership to 95%. On April 11, 2022, the Company paid a $1.1 million earn-out to its joint venture partner for Gainesville Apartments due to the receipt of the certificate of occupancy on April 8, 2022 and per the terms specified in the joint venture's operating agreement. On April 25, 2022, the Company completed the sale of the Summit Place for a sale price of $37.8 million. Indebtedness On April 25, 2022, Harbor Point Parcel 3 Development, LLC, a joint venture to which we are party, entered into a construction loan agreement for $161.5 million. On April 25, 2022, Harbor Point Parcel 4 Development, LLC, a joint venture to which we are party, entered into a construction loan agreement for $109.7 million. In April 2022, the Company borrowed $15.0 million under the revolving credit facility. In April 2022, the Company borrowed $1.3 million on its construction loans to fund development activities. The Company is currently not compliant with a lease-up requirement stipulated by the syndicated loan secured by Wills Wharf. The covenant requires the property to be 75% leased, and the property is currently 70% leased. As a result, the loan administrator ordered an appraisal for the property, and in April 2022 the Company agreed to restrict $4.3 million of cash as additional collateral for the loan. The Company is currently in compliance with all covenants on its other outstanding indebtedness. Derivative Financial Instruments On April 7, 2022, the Company entered into a BSBY interest rate cap corridor agreement on a notional amount of $175.0 million. The Company purchased an interest rate cap at 1.0% and sold an interest rate cap at 3.0% for a net premium of $3.6 million to provide a level of protection from the effect of rising interest rates. The interest rate cap corridor will expire on February 1, 2024. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying condensed consolidated financial statements were prepared in accordance with U.S. generally accepted accounting principles ("GAAP"). The condensed consolidated financial statements include the financial position and results of operations of the Company and its consolidated 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. 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, 2021. |
Use of Estimates | 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. |
Reclassification | Reclassifications Certain items have been reclassified from their prior year classifications to conform to the current year presentation. The amounts previously classified as Interest expense on indebtedness and Interest expense on finance leases for the three months ended March 31, 2021 in the Condensed Consolidated Statement of Comprehensive Income are now included in a single line item as Interest expense. These reclassifications had no effect on net income or stockholders' equity as previously reported. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements 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. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur. The Company is currently evaluating the effect that adopting this standard may have on its Consolidated Financial Statements. 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. |
Segments | 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. |
Construction Contracts | Construction Contracts Construction contract costs and estimated earnings in excess of billings represent reimbursable costs and amounts earned under contracts in progress as of the balance sheet date. Such amounts become billable according to contract terms, which usually consider the passage of time, achievement of certain milestones, or completion of the project. The Company expects to bill and collect substantially all construction contract costs and estimated earnings in excess of billings as of March 31, 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. |
Derivative Financial Instruments | Derivative Financial Instruments The Company 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 gain or loss is reported as a component of other comprehensive income (loss) and reclassified into earnings in the periods during which the hedged forecasted transaction affects earnings. |
Fair Value of Financial Instruments | 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 — quoted prices in active markets for identical assets or liabilities Level 2 — observable inputs other than quoted prices in active markets for identical assets and liabilities Level 3 — unobservable inputs Except as disclosed below, the carrying amounts of the Company’s financial instruments approximate their fair 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 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. |
Legal Proceedings | 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, 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. |
Segments (Tables)
Segments (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
Net operating income of reportable segments | Net operating income of the Company’s reportable segments for the three months ended March 31, 2022 and 2021 was as follows (in thousands): Three Months Ended March 31, 2022 2021 Office real estate Rental revenues $ 17,023 $ 11,635 Rental expenses 4,140 2,875 Real estate taxes 1,504 1,358 Segment net operating income 11,379 7,402 Retail real estate Rental revenues 21,430 18,255 Rental expenses 3,501 2,836 Real estate taxes 2,238 2,027 Segment net operating income 15,691 13,392 Multifamily residential real estate Rental revenues 16,182 15,851 Rental expenses 5,028 5,121 Real estate taxes 1,662 1,921 Segment net operating income 9,492 8,809 General contracting and real estate services Segment revenues 24,650 35,563 Segment expenses 23,821 34,275 Segment gross profit 829 1,288 Net operating income $ 37,391 $ 30,891 |
Reconciliation of net operating income to net income | The following table reconciles net operating income to net income, the most directly comparable GAAP measure, for the three months ended March 31, 2022 and 2021 (in thousands): Three Months Ended March 31, 2022 2021 Net operating income $ 37,391 $ 30,891 Depreciation and amortization (18,557) (18,066) Amortization of right-of-use assets - finance leases (278) (189) General and administrative expenses (4,708) (4,021) Acquisition, development and other pursuit costs (11) (71) Impairment charges (47) (3,039) Gain on real estate dispositions, net — 3,717 Interest income 3,568 4,116 Interest expense (9,031) (7,975) Loss on extinguishment of debt (158) — Change in fair value of derivatives and other 4,182 393 Unrealized credit loss (provision) release (605) 55 Other income (expense), net 229 179 Income tax benefit 301 19 Net income $ 12,276 $ 6,009 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Leases [Abstract] | |
Schedule of rental revenue | Rental revenue for the three months ended March 31, 2022 and 2021 comprised the following (in thousands): Three Months Ended March 31, 2022 2021 Base rent and tenant charges $ 52,879 $ 43,598 Accrued straight-line rental adjustment 1,492 1,891 Lease incentive amortization (173) (159) Above/below market lease amortization 437 411 Total rental revenue $ 54,635 $ 45,741 |
Real Estate Investment (Tables)
Real Estate Investment (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Real Estate [Abstract] | |
Summary of the purchase price allocation | The following table summarizes the purchase price allocation (including acquisition costs) based on relative fair value of the assets acquired for the two operating properties purchased during the three months ended March 31, 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 |
Notes Receivable and Current _2
Notes Receivable and Current Expected Credit Losses (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Receivables [Abstract] | |
Summary of mezzanine loans | The Company had the following notes receivable outstanding as of March 31, 2022 and December 31, 2021 ($ in thousands): Outstanding loan amount (a) Interest compounding Development Project March 31, December 31, Maximum loan commitment Interest rate City Park 2 $ 4,739 $ — $ 20,594 13.0 % Annually Interlock Commercial 83,974 95,379 107,000 (b) 15.0 % None Nexton Multifamily 24,180 23,567 22,315 11.0 % Annually Total mezzanine & preferred equity 112,893 118,946 $ 149,909 Exelon note receivable 12,834 — Other notes receivable 7,343 7,234 Notes receivable guarantee premium 1,665 1,243 Allowance for credit losses (1,178) (c) (994) Total notes receivable $ 133,557 $ 126,429 ________________________________________ (a) Outstanding loan amounts include any accrued and unpaid interest, as applicable. (b) This amount includes interest reserves. (c) The amount excludes $0.4 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. |
Summary of interest income | The Company recognized interest income for the three months ended March 31, 2022 and 2021 as follows (in thousands): Three Months Ended March 31, Development Project 2022 2021 City Park 2 $ 19 (a) $ — Interlock Commercial 2,826 (a) 3,075 (a) Nexton Multifamily 614 — Solis Apartments at Interlock — 938 Total mezzanine 3,459 4,013 Other interest income 109 103 Total interest income $ 3,568 $ 4,116 ________________________________________ (a) Includes recognition of interest income related to fee amortization. |
Allowance for credit losses on financing receivables | Changes in the allowance for the three months ended March 31, 2022 and 2021 were as follows (in thousands): Three Months Ended March 31, 2022 2021 Beginning balance $ 994 $ 2,584 Unrealized credit loss provision (release) 605 (55) Extinguishment due to acquisition — (788) Ending balance (a) $ 1,599 $ 1,741 ________________________________________ (a) The amount as of March 31, 2022 includes $0.4 million of allowance related to the unfunded commitments, which was recorded as Other liabilities on the Consolidated Balance Sheet. |
Construction Contracts (Tables)
Construction Contracts (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Contractors [Abstract] | |
Summary of balances and changes of construction contracts | The following table summarizes the changes to the balances in 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 three months ended March 31, 2022 and 2021 (in thousands): Three Months Ended Three Months Ended 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 — 15,055 — 3,143 Transferred to receivables (266) — (138) — Construction contract costs and estimated earnings not billed during the period 121 — 54 — Changes due to cumulative catch-up adjustment arising from changes in the estimate of the stage of completion 23 (1) — (81) Ending balance $ 121 $ 15,054 $ 54 $ 3,062 The Company’s balances and changes in construction contract price allocated to unsatisfied performance obligations (backlog) as of March 31, 2022 and 2021 were as follows (in thousands): Three Months Ended March 31, 2022 2021 Beginning backlog $ 215,518 $ 71,258 New contracts/change orders 228,603 3,124 Work performed (24,682) (35,544) Ending backlog $ 419,439 $ 38,838 |
Net position of uncompleted construction contracts | The Company’s net position on uncompleted construction contracts comprised the following as of March 31, 2022 and December 31, 2021 (in thousands): March 31, 2022 December 31, 2021 Costs incurred on uncompleted construction contracts $ 368,128 $ 379,993 Estimated earnings 14,473 15,115 Billings (397,534) (399,746) Net position $ (14,933) $ (4,638) Construction contract costs and estimated earnings in excess of billings $ 121 $ 243 Billings in excess of construction contract costs and estimated earnings (15,054) (4,881) Net position $ (14,933) $ (4,638) The above table reflects the net effect of projects closed as of March 31, 2022 and December 31, 2021, respectively. |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of LIBOR interest rate caps and floating to fixed interest rate swaps | As of March 31, 2022, the Company had the following LIBOR, Secured Overnight Financing Rate ("SOFR"), and BSBY interest rate caps ($ in thousands): Effective Date Maturity Date Notional Amount Strike Rate Premium Paid 5/15/2019 6/1/2022 $ 100,000 2.50% (LIBOR) $ 288 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) (b) 91 2/2/2021 2/1/2023 100,000 0.50% (LIBOR) 45 3/4/2021 4/1/2023 14,479 2.50% (LIBOR) 4 5/5/2021 5/1/2023 50,000 0.50% (LIBOR) 75 5/5/2021 5/1/2023 35,100 0.50% (LIBOR) 55 6/16/2021 7/1/2023 100,000 0.50% (LIBOR) 120 1/11/2022 2/1/2024 175,000 4.00% (BSBY) (b) 154 Total $ 758,954 $ 1,064 ________________________________________ (a) Designated as a cash flow hedge. (b) These interest rate caps are subject to SOFR and BSBY, which have been identified as alternatives to LIBOR. As of March 31, 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 33,244 (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 70,403 (a) 1-month BSBY (b) 1.05 % 2.35 % 9/30/2021 9/30/2026 Total $ 289,147 ________________________________________ (a) Designated as a cash flow hedge. |
Schedule of derivatives | The Company’s derivatives were comprised of the following as of March 31, 2022 and December 31, 2021 (in thousands): March 31, 2022 December 31, 2021 Notional Fair Value Notional Fair Value Asset Liability Asset Liability Derivatives not designated as accounting hedges Interest rate swaps $ 50,000 $ — $ (533) $ 50,000 $ — $ (1,454) Interest rate caps 574,579 4,468 — 399,579 1,019 — Total derivatives not designated as accounting hedges 624,579 4,468 (533) 449,579 1,019 (1,454) Derivatives designated as accounting hedges Interest rate swaps 239,146 6,414 (530) 239,633 1,317 (2,013) Interest rate caps 184,375 2,477 — 384,375 590 — Total derivatives $ 1,048,100 $ 13,359 $ (1,063) $ 1,073,587 $ 2,926 $ (3,467) |
Schedule of changes in fair value of derivatives | The changes in the fair value of the Company’s derivatives during the three months ended March 31, 2022 and 2021 were comprised of the following (in thousands): Three Months Ended March 31, 2022 2021 Interest rate swaps $ 6,757 $ 2,462 Interest rate caps 5,182 241 Total change in fair value of interest rate derivatives $ 11,939 $ 2,703 Comprehensive income statement presentation: Change in fair value of derivatives and other $ 4,217 $ 427 Unrealized cash flow hedge gains (losses) 7,722 2,276 Total change in fair value of interest rate derivatives $ 11,939 $ 2,703 |
Equity (Tables)
Equity (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Equity [Abstract] | |
Dividends and distributions | During the three months ended March 31, 2022, the following dividends/distributions 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 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 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Carrying amounts and fair values of financial instruments measured based on level two inputs | The carrying amounts and fair values of the Company’s financial instruments as of March 31, 2022 and December 31, 2021 were as follows (in thousands): March 31, 2022 December 31, 2021 Carrying Fair Carrying Fair Indebtedness, net (a) $ 1,178,831 $ 1,184,117 $ 958,910 $ 976,520 Notes receivable, net 133,557 133,557 126,429 126,429 Interest rate swap liabilities 1,063 1,063 3,467 3,467 Interest rate swap and cap assets 13,359 13,359 2,926 2,926 _______________________________________ (a) The values as of March 31, 2022 and December 31, 2021 include the loan reclassified to liabilities related to assets held for sale. |
Business of Organization - Addi
Business of Organization - Additional Information (Details) - property | Mar. 31, 2022 | Dec. 31, 2021 |
Business And Organization [Line Items] | ||
Percentage of operating partnership held | 76.70% | 75.30% |
Operating Property | ||
Business And Organization [Line Items] | ||
Number of real estate properties | 57 | |
Development Property | ||
Business And Organization [Line Items] | ||
Number of real estate properties | 4 | |
General Partner | ||
Business And Organization [Line Items] | ||
Percentage of operating partnership held | 0.10% |
Segments - Net Income of Report
Segments - Net Income of Reportable Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Segment Reporting Information | ||
Rental revenues | $ 54,635 | $ 45,741 |
Rental expenses | 12,669 | 10,832 |
Real estate taxes | 5,404 | 5,306 |
Segment revenues | 24,650 | 35,563 |
Gross profit | 37,391 | 30,891 |
General contracting and real estate services | ||
Segment Reporting Information | ||
Segment revenues | 24,650 | 35,563 |
Segment expenses | 23,821 | 34,275 |
Gross profit | 829 | 1,288 |
Office real estate | ||
Segment Reporting Information | ||
Rental revenues | 17,023 | 11,635 |
Rental expenses | 4,140 | 2,875 |
Real estate taxes | 1,504 | 1,358 |
Gross profit | 11,379 | 7,402 |
Retail real estate | ||
Segment Reporting Information | ||
Rental revenues | 21,430 | 18,255 |
Rental expenses | 3,501 | 2,836 |
Real estate taxes | 2,238 | 2,027 |
Gross profit | 15,691 | 13,392 |
Multifamily residential real estate | ||
Segment Reporting Information | ||
Rental revenues | 16,182 | 15,851 |
Rental expenses | 5,028 | 5,121 |
Real estate taxes | 1,662 | 1,921 |
Gross profit | $ 9,492 | $ 8,809 |
Segments - Additional Informati
Segments - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Segment Reporting Information | ||
General contracting and real estate services revenues | $ 24,650 | $ 35,563 |
General contracting and real estate services | ||
Segment Reporting Information | ||
General contracting and real estate services revenues | 24,650 | 35,563 |
General contracting and real estate services expenses | 23,821 | 34,275 |
General contracting and real estate services | Intercompany Eliminations | ||
Segment Reporting Information | ||
General contracting and real estate services revenues | 8,600 | 2,000 |
General contracting and real estate services expenses | $ 8,500 | $ 2,000 |
Segments - Reconciliation of Ne
Segments - Reconciliation of Net Operating Income to Net Income (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Segment Reporting [Abstract] | ||
Net operating income | $ 37,391 | $ 30,891 |
Depreciation and amortization | (18,557) | (18,066) |
Amortization of right-of-use assets - finance leases | (278) | (189) |
General and administrative expenses | (4,708) | (4,021) |
Acquisition, development and other pursuit costs | (11) | (71) |
Impairment charges | (47) | (3,039) |
Gain on real estate dispositions, net | 0 | 3,717 |
Interest income | 3,568 | 4,116 |
Interest expense | (9,031) | (7,975) |
Loss on extinguishment of debt | (158) | 0 |
Change in fair value of derivatives and other | 4,182 | 393 |
Unrealized credit loss (provision) release | (605) | 55 |
Other income (expense), net | 229 | 179 |
Income tax benefit | 301 | 19 |
Net income | $ 12,276 | $ 6,009 |
Leases - Additional Information
Leases - Additional Information (Details) | 3 Months Ended |
Mar. 31, 2022leasepropertyextension | |
Lessee, Lease, Description [Line Items] | |
Number of ground leases | 8 |
Number of properties subject to ground leases | property | 7 |
Number of operating leases | 5 |
Number of finance leases | 3 |
Number of options to extend, more than | extension | 1 |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Renewal term | 1 year |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Renewal term | 25 years |
Leases - Lessor, Rental Income
Leases - Lessor, Rental Income (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Leases [Abstract] | ||
Base rent and tenant charges | $ 52,879 | $ 43,598 |
Accrued straight-line rental adjustment | 1,492 | 1,891 |
Lease incentive amortization | (173) | (159) |
Above/below market lease amortization | 437 | 411 |
Total rental revenue | $ 54,635 | $ 45,741 |
Real Estate Investment - Proper
Real Estate Investment - Property Acquisition (Details) $ in Thousands | Jan. 14, 2022USD ($) | Mar. 31, 2022USD ($)property | Mar. 31, 2021USD ($) |
Real Estate Properties [Line Items] | |||
Acquisitions of real estate investments, net of cash received | $ 93,162 | $ 28,067 | |
Number of operating properties acquired | property | 2 | ||
Ten Tryon Project | |||
Real Estate Properties [Line Items] | |||
Percentage of voting interests acquired | 20.00% | ||
Cash payment | $ 3,900 | ||
Exelon Building | |||
Real Estate Properties [Line Items] | |||
Percentage of membership interest acquired | 79.00% | ||
Percentage of economic interest acquired | 11.00% | ||
Acquisitions of real estate investments, net of cash received | $ 92,200 | ||
Loan issued to seller | 12,800 | ||
Liabilities incurred | 156,100 | ||
Debt instrument, face amount | $ 175,000 | ||
Exelon Building | BSBY | |||
Real Estate Properties [Line Items] | |||
Stated interest rate, basis spread on variable rate | 1.50% |
Real Estate Investment - Summar
Real Estate Investment - Summary of the Purchase Price Allocation (Details) - Exelon Building $ in Thousands | Mar. 31, 2022USD ($) |
Business Acquisition [Line Items] | |
Land | $ 23,317 |
Above-market leases | 306 |
Net assets acquired | 272,385 |
In-place leases | |
Business Acquisition [Line Items] | |
Finite-lived intangibles | 53,705 |
Site improvements | |
Business Acquisition [Line Items] | |
Property, plant, and equipment | 141 |
Building | |
Business Acquisition [Line Items] | |
Property, plant, and equipment | $ 194,916 |
Real Estate Investment - Equity
Real Estate Investment - Equity Method Investments (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Real Estate [Line Items] | |||
Investment in equity method investment during period | $ 8,092 | $ 3,889 | |
Equity method investment | $ 20,777 | $ 12,685 | |
Harbor Point Parcel 3 | Beatty Development Group | |||
Real Estate [Line Items] | |||
Interests in equity method investments | 50.00% | ||
Investment in equity method investment during period | $ 8,200 | ||
Maximum commitment | 42,000 | ||
Equity method investment | $ 20,900 | $ 12,700 |
Notes Receivable and Current _3
Notes Receivable and Current Expected Credit Losses (Summary of Mezzanine Loans) (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Mar. 23, 2022 | Dec. 31, 2021 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Notes receivable guarantee premium | $ 1,665 | $ 1,243 | |
Allowance for credit losses | (1,178) | (994) | |
Total notes receivable | 133,557 | 126,429 | |
Mezzanine Loan | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Notes receivable | 112,893 | 118,946 | |
Maximum loan commitment | 149,909 | ||
Mezzanine Loan | City Park 2 | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Notes receivable | 4,739 | 0 | |
Maximum loan commitment | $ 20,594 | $ 20,600 | |
Interest rate | 13.00% | 13.00% | |
Mezzanine Loan | Interlock Commercial | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Notes receivable | $ 83,974 | 95,379 | |
Maximum loan commitment | $ 107,000 | ||
Interest rate | 15.00% | ||
Mezzanine Loan | Nexton Multifamily | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Notes receivable | $ 24,180 | 23,567 | |
Maximum loan commitment | $ 22,315 | ||
Interest rate | 11.00% | ||
Mezzanine Loan | Exelon Building | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Interest rate | 3.00% | ||
Exelon Note Receivable | Exelon Building | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Notes receivable | $ 12,834 | 0 | |
Other Notes Receivable | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Notes receivable | 7,343 | $ 7,234 | |
Unfunded Loan Commitment | Other Liabilities | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Allowance for credit losses | $ (400) |
Notes Receivable and Current _4
Notes Receivable and Current Expected Credit Losses (Schedule of Interest on the Mezzanine Loans) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Interest income | $ 3,568 | $ 4,116 |
Mezzanine Loan | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Interest income | 3,459 | 4,013 |
Other Notes Receivable | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Interest income | 109 | 103 |
City Park 2 | Mezzanine Loan | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Interest income | 19 | 0 |
Interlock Commercial | Mezzanine Loan | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Interest income | 2,826 | 3,075 |
Nexton Multifamily | Mezzanine Loan | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Interest income | 614 | 0 |
Solis Apartments at Interlock | Mezzanine Loan | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Interest income | $ 0 | $ 938 |
Notes Receivable and Current _5
Notes Receivable and Current Expected Credit Losses (Additional Information) (Details) | 1 Months Ended | 3 Months Ended | |||
Feb. 28, 2022USD ($) | Mar. 31, 2022USD ($)loan | Mar. 31, 2021USD ($) | Mar. 23, 2022USD ($) | Dec. 31, 2021USD ($) | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Notes receivable paydowns | $ 11,545,000 | $ 12,291,000 | |||
Notes receivable, net | 133,557,000 | $ 126,429,000 | |||
Allowance for credit losses | 1,178,000 | 994,000 | |||
Notes receivable, nonaccrual status | 0 | $ 0 | |||
Mezzanine Loan | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Maximum loan commitment | $ 149,909,000 | ||||
Number of financial instruments | loan | 3 | ||||
Mezzanine Loan | City Park 2 | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Maximum loan commitment | $ 20,594,000 | $ 20,600,000 | |||
Interest rate | 13.00% | 13.00% | |||
Mezzanine Loan | Interlock Commercial | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Maximum loan commitment | $ 107,000,000 | ||||
Interest rate | 15.00% | ||||
Repayment received | $ 13,500,000 | ||||
Notes receivable paydowns | 11,100,000 | ||||
Interest payments received | $ 2,400,000 | ||||
Mezzanine Loan | Exelon Building | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Interest rate | 3.00% |
Notes Receivable and Current _6
Notes Receivable and Current Expected Credit Losses (Changes in Allowance for Credit Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning balance | $ 994 | $ 2,584 |
Unrealized credit loss provision (release) | 605 | (55) |
Extinguishment due to acquisition | 0 | (788) |
Ending balance | $ 1,599 | $ 1,741 |
Construction Contracts - Summar
Construction Contracts - Summary of Costs in Excess of Billings and Billings in Excess of Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Construction contract costs and estimated earnings in excess of billings | ||
Beginning balance | $ 243 | $ 138 |
Transferred to receivables | (266) | (138) |
Construction contract costs and estimated earnings not billed during the period | 121 | 54 |
Changes due to cumulative catch-up adjustment arising from changes in the estimate of the stage of completion | 23 | 0 |
Ending balance | 121 | 54 |
Billings in excess of construction contract costs and estimated earnings | ||
Beginning balance | 4,881 | 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 | 15,055 | 3,143 |
Changes due to cumulative catch-up adjustment arising from changes in the estimate of the stage of completion | (1) | (81) |
Ending balance | $ 15,054 | $ 3,062 |
Construction Contracts - Additi
Construction Contracts - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||
Capitalized contract cost, amortization | $ 0.1 | $ 0.1 | |
Construction receivables retentions | 5.8 | $ 3.1 | |
Construction | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||
Retentions | 6.9 | 4.2 | |
Portion Attributable To Pending Contracts | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||
Deferred pre-contract costs | $ 1.7 | $ 2.2 |
Construction Contracts - Summ_2
Construction Contracts - Summary of Net Position (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 | Mar. 31, 2021 | Dec. 31, 2020 |
Contractors [Abstract] | ||||
Costs incurred on uncompleted construction contracts | $ 368,128 | $ 379,993 | ||
Estimated earnings | 14,473 | 15,115 | ||
Billings | (397,534) | (399,746) | ||
Net position | (14,933) | (4,638) | ||
Construction contract costs and estimated earnings in excess of billings | 121 | 243 | $ 54 | $ 138 |
Billings in excess of construction contract costs and estimated earnings | $ (15,054) | $ (4,881) | $ (3,062) | $ (6,088) |
Construction Contracts - Summ_3
Construction Contracts - Summary of Backlog (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Revenue, Remaining Performance Obligation [Roll Forward] | ||
Beginning backlog | $ 215,518 | $ 71,258 |
New contracts/change orders | 228,603 | 3,124 |
Work performed | (24,682) | (35,544) |
Ending backlog | $ 419,439 | $ 38,838 |
Minimum | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-04-01 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Expected completion of contracts | 12 months | |
Maximum | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-04-01 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Expected completion of contracts | 24 months |
Indebtedness - Additional Infor
Indebtedness - Additional Information (Details) | Mar. 03, 2022USD ($) | Jan. 19, 2022USD ($) | Jan. 14, 2022USD ($) | Jan. 05, 2022USD ($) | Oct. 03, 2019USD ($)extension | Mar. 31, 2022USD ($) | Mar. 31, 2021USD ($) | Jan. 04, 2022USD ($) | Dec. 31, 2021USD ($) |
Indebtedness | |||||||||
Investment in equity method investment during period | $ 8,092,000 | $ 3,889,000 | |||||||
Exelon Building | |||||||||
Indebtedness | |||||||||
Percentage of membership interest acquired | 79.00% | ||||||||
Percentage of economic interest acquired | 11.00% | ||||||||
Liabilities incurred | $ 156,100,000 | ||||||||
Debt instrument, face amount | $ 175,000,000 | ||||||||
Harbor Point Parcel 3 Partnership | |||||||||
Indebtedness | |||||||||
Investment in equity method investment during period | $ 2,600,000 | ||||||||
Credit facility, amount outstanding | $ 15,000,000 | ||||||||
BSBY | Exelon Building | |||||||||
Indebtedness | |||||||||
Stated interest rate, basis spread on variable rate | 1.50% | ||||||||
Minimum | Revolving Credit Facility | |||||||||
Indebtedness | |||||||||
Basis points on unused commitment fee | 0.15% | ||||||||
Maximum | Revolving Credit Facility | |||||||||
Indebtedness | |||||||||
Basis points on unused commitment fee | 0.25% | ||||||||
New Credit Facility | |||||||||
Indebtedness | |||||||||
Aggregate capacity under the credit facility | $ 355,000,000 | ||||||||
New Credit Facility | Revolving Credit Facility | |||||||||
Indebtedness | |||||||||
Aggregate capacity under the credit facility | 150,000,000 | ||||||||
Accordion feature maximum borrowing capacity | $ 700,000,000 | ||||||||
Number of extension options | extension | 2 | ||||||||
Duration of extension option | 6 months | ||||||||
Extension fee percentage | 0.075% | ||||||||
Line of credit, amount outstanding | $ 65,000,000 | $ 5,000,000 | |||||||
Interest rate on credit facility as of end of period | 1.95% | ||||||||
New Credit Facility | Term Loan Facility | |||||||||
Indebtedness | |||||||||
Aggregate capacity under the credit facility | $ 205,000,000 | ||||||||
Line of credit, amount outstanding | $ 205,000,000 | $ 205,000,000 | |||||||
Interest rate on credit facility as of end of period | 1.90% | ||||||||
New Credit Facility | Minimum | Revolving Credit Facility | LIBOR | |||||||||
Indebtedness | |||||||||
Stated interest rate, basis spread on variable rate | 1.30% | ||||||||
New Credit Facility | Minimum | Term Loan Facility | LIBOR | |||||||||
Indebtedness | |||||||||
Stated interest rate, basis spread on variable rate | 1.25% | ||||||||
New Credit Facility | Maximum | Revolving Credit Facility | LIBOR | |||||||||
Indebtedness | |||||||||
Stated interest rate, basis spread on variable rate | 1.85% | ||||||||
New Credit Facility | Maximum | Term Loan Facility | LIBOR | |||||||||
Indebtedness | |||||||||
Stated interest rate, basis spread on variable rate | 1.80% | ||||||||
Secured Debt | Delray Beach Plaza | |||||||||
Indebtedness | |||||||||
Extinguishment of debt, amount | $ 14,100,000 | ||||||||
Secured Debt | Red Mill West Commons | |||||||||
Indebtedness | |||||||||
Extinguishment of debt, amount | $ 10,300,000 | ||||||||
Construction loans | |||||||||
Indebtedness | |||||||||
Borrowings under construction loans | $ 14,200,000 |
Derivative Financial Instrume_3
Derivative Financial Instruments Derivative Financial Instruments - Schedule of LIBOR interest rate caps (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Jan. 11, 2022 | Dec. 31, 2021 | Jun. 16, 2021 | May 05, 2021 | Mar. 04, 2021 | Feb. 02, 2021 | Nov. 01, 2020 | Jul. 01, 2020 | May 15, 2019 |
Derivative [Line Items] | ||||||||||
Notional Amount | $ 1,048,100 | $ 1,073,587 | ||||||||
Interest rate caps | LIBOR | ||||||||||
Derivative [Line Items] | ||||||||||
Notional Amount | 758,954 | |||||||||
Premium Paid | 1,064 | |||||||||
Not designated as accounting hedges | ||||||||||
Derivative [Line Items] | ||||||||||
Notional Amount | 624,579 | 449,579 | ||||||||
Not designated as accounting hedges | Interest rate caps | ||||||||||
Derivative [Line Items] | ||||||||||
Notional Amount | 574,579 | 399,579 | ||||||||
Not designated as accounting hedges | Interest rate caps | LIBOR | ||||||||||
Derivative [Line Items] | ||||||||||
Notional Amount | $ 100,000 | $ 14,479 | $ 100,000 | $ 100,000 | ||||||
Strike Rate | 0.50% | 2.50% | 0.50% | 2.50% | ||||||
Premium Paid | $ 120 | $ 4 | $ 45 | $ 288 | ||||||
Not designated as accounting hedges | Interest rate caps | BSBY | ||||||||||
Derivative [Line Items] | ||||||||||
Notional Amount | $ 175,000 | |||||||||
Strike Rate | 4.00% | |||||||||
Premium Paid | $ 154 | |||||||||
Not designated as accounting hedges | Interest rate cap 0.50% LIBOR one | LIBOR | ||||||||||
Derivative [Line Items] | ||||||||||
Notional Amount | $ 50,000 | |||||||||
Strike Rate | 0.50% | |||||||||
Premium Paid | $ 75 | |||||||||
Not designated as accounting hedges | Interest rate cap 0.50% LIBOR two | LIBOR | ||||||||||
Derivative [Line Items] | ||||||||||
Notional Amount | $ 35,100 | |||||||||
Strike Rate | 0.50% | |||||||||
Premium Paid | $ 55 | |||||||||
Designated as accounting hedge | Interest rate caps | ||||||||||
Derivative [Line Items] | ||||||||||
Notional Amount | $ 184,375 | $ 384,375 | ||||||||
Designated as accounting hedge | Interest rate caps | LIBOR | ||||||||||
Derivative [Line Items] | ||||||||||
Notional Amount | $ 100,000 | |||||||||
Strike Rate | 0.50% | |||||||||
Premium Paid | $ 232 | |||||||||
Designated as accounting hedge | Interest rate caps | SOFR | ||||||||||
Derivative [Line Items] | ||||||||||
Notional Amount | $ 84,375 | |||||||||
Strike Rate | 1.84% | |||||||||
Premium Paid | $ 91 |
Derivative Financial Instrume_4
Derivative Financial Instruments - Floating-to-Fixed Interest Rate Swaps (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Derivative [Line Items] | ||
Notional amount | $ 1,048,100 | $ 1,073,587 |
Interest rate swaps | ||
Derivative [Line Items] | ||
Notional amount | 289,147 | |
Not designated as accounting hedges | ||
Derivative [Line Items] | ||
Notional amount | 624,579 | 449,579 |
Not designated as accounting hedges | Interest rate swaps | ||
Derivative [Line Items] | ||
Notional amount | 50,000 | 50,000 |
Not designated as accounting hedges | Senior Unsecured Term Loan 2.78% | Interest rate swaps | ||
Derivative [Line Items] | ||
Notional amount | $ 50,000 | |
Fixed interest rate | 2.78% | |
Effective interest rate | 4.23% | |
Designated as accounting hedge | Interest rate swaps | ||
Derivative [Line Items] | ||
Notional amount | $ 239,146 | $ 239,633 |
Designated as accounting hedge | Senior Unsecured Term Loan 2.26% | Interest rate swaps | ||
Derivative [Line Items] | ||
Notional amount | $ 50,000 | |
Fixed interest rate | 2.26% | |
Effective interest rate | 3.71% | |
Designated as accounting hedge | 249 Central Park Retail, South Retail, and Fountain Plaza Retail | Interest rate swaps | ||
Derivative [Line Items] | ||
Notional amount | $ 33,244 | |
Fixed interest rate | 2.25% | |
Effective interest rate | 3.85% | |
Designated as accounting hedge | Senior Unsecured Term Loan 3.02% | Interest rate swaps | ||
Derivative [Line Items] | ||
Notional amount | $ 10,500 | |
Fixed interest rate | 3.02% | |
Effective interest rate | 4.47% | |
Designated as accounting hedge | Senior Unsecured Term Loan 0.50%, Term Loan One | Interest rate swaps | ||
Derivative [Line Items] | ||
Notional amount | $ 25,000 | |
Fixed interest rate | 0.50% | |
Effective interest rate | 1.95% | |
Designated as accounting hedge | Senior Unsecured Term Loan 0.50%, Term Loan Two | Interest rate swaps | ||
Derivative [Line Items] | ||
Notional amount | $ 25,000 | |
Fixed interest rate | 0.50% | |
Effective interest rate | 1.95% | |
Designated as accounting hedge | Senior Unsecured Term Loan 0.55% | Interest rate swaps | ||
Derivative [Line Items] | ||
Notional amount | $ 25,000 | |
Fixed interest rate | 0.55% | |
Effective interest rate | 2.00% | |
Designated as accounting hedge | Thames Street Wharf | Interest rate swaps | ||
Derivative [Line Items] | ||
Notional amount | $ 70,403 | |
Fixed interest rate | 1.05% | |
Effective interest rate | 2.35% |
Derivative Financial Instrume_5
Derivative Financial Instruments - Additional Information (Details) $ in Millions | Mar. 31, 2022USD ($) |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Gain (loss) reclassified during next 12 months | $ 2.2 |
Derivative Financial Instrume_6
Derivative Financial Instruments - Schedule of Derivatives (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Derivative [Line Items] | ||
Notional amount | $ 1,048,100 | $ 1,073,587 |
Asset, Fair Value | 13,359 | 2,926 |
Liability, Fair Value | (1,063) | (3,467) |
Interest rate swaps | ||
Derivative [Line Items] | ||
Notional amount | 289,147 | |
Not designated as accounting hedges | ||
Derivative [Line Items] | ||
Notional amount | 624,579 | 449,579 |
Asset, Fair Value | 4,468 | 1,019 |
Liability, Fair Value | (533) | (1,454) |
Not designated as accounting hedges | Interest rate swaps | ||
Derivative [Line Items] | ||
Notional amount | 50,000 | 50,000 |
Asset, Fair Value | 0 | 0 |
Liability, Fair Value | (533) | (1,454) |
Not designated as accounting hedges | Interest rate caps | ||
Derivative [Line Items] | ||
Notional amount | 574,579 | 399,579 |
Asset, Fair Value | 4,468 | 1,019 |
Liability, Fair Value | 0 | 0 |
Designated as accounting hedge | Interest rate swaps | ||
Derivative [Line Items] | ||
Notional amount | 239,146 | 239,633 |
Asset, Fair Value | 6,414 | 1,317 |
Liability, Fair Value | (530) | (2,013) |
Designated as accounting hedge | Interest rate caps | ||
Derivative [Line Items] | ||
Notional amount | 184,375 | 384,375 |
Asset, Fair Value | 2,477 | 590 |
Liability, Fair Value | $ 0 | $ 0 |
Derivative Financial Instrume_7
Derivative Financial Instruments - Change in Fair Value of Derivatives (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Derivative [Line Items] | ||
Change in fair value of derivatives and other | $ 4,217 | $ 427 |
Unrealized cash flow hedge gains | 7,722 | 2,276 |
Total change in fair value of interest rate derivatives | 11,939 | 2,703 |
Interest rate swaps | ||
Derivative [Line Items] | ||
Total change in fair value of interest rate derivatives | 6,757 | 2,462 |
Interest rate caps | ||
Derivative [Line Items] | ||
Total change in fair value of interest rate derivatives | $ 5,182 | $ 241 |
Equity - Additional Information
Equity - Additional Information (Details) - USD ($) | May 03, 2022 | Jan. 11, 2022 | Jan. 01, 2022 | Mar. 10, 2020 | Mar. 31, 2022 | Dec. 31, 2021 |
Class of Stock [Line Items] | ||||||
Percentage of operating partnership held | 76.70% | 75.30% | ||||
Preferred stock issued | $ 171,085,000 | $ 171,085,000 | ||||
Class A units | ||||||
Class of Stock [Line Items] | ||||||
Class A Units not held by Company (in shares) | 20,621,336 | |||||
Public Offering | ||||||
Class of Stock [Line Items] | ||||||
Sale of stock, number of shares issued in transaction | 4,025,000 | |||||
Weighted average price (in dollars per share) | $ 14.45 | |||||
Consideration received on transaction | $ 58,000,000 | |||||
The Amendments | Common stock | ||||||
Class of Stock [Line Items] | ||||||
Shares issued (in shares) | 475,074 | |||||
Sale of stock, weighted average price per share | $ 15.21 | |||||
Consideration received on transaction | $ 7,100,000 | |||||
Noncontrolling interests in investment entities | Operating Partnership | ||||||
Class of Stock [Line Items] | ||||||
Ownership interest percentage in properties | 23,800,000 | $ 600,000 | ||||
Noncontrolling interests in investment entities | Operating Partnership | Exelon Building | ||||||
Class of Stock [Line Items] | ||||||
Ownership interest percentage in properties | $ 23,200,000 | |||||
Redeemable convertible preferred stock | ||||||
Class of Stock [Line Items] | ||||||
Preferred Stock dividend rate percentage | 6.75% | 6.75% | ||||
Redeemable convertible preferred stock | At The Market Program | ||||||
Class of Stock [Line Items] | ||||||
Preferred Stock dividend rate percentage | 6.75% | |||||
Maximum aggregate offering price of shares to be sold (up to) | $ 300,000,000 | |||||
Series A Preferred Stock | The Amendments | Subsequent Event | ||||||
Class of Stock [Line Items] | ||||||
Maximum aggregate offering price of shares to be sold (up to) | $ 205,000,000 | |||||
Common Class A | Stock Issuance - Shares From Existing Shareholder | ||||||
Class of Stock [Line Items] | ||||||
Sale of stock, number of shares issued in transaction | 12,149 |
Equity - Dividends and Distribu
Equity - Dividends and Distributions (Details) - USD ($) $ / shares in Units, $ in Thousands | Feb. 23, 2022 | Oct. 25, 2021 | Mar. 31, 2022 | Mar. 31, 2021 |
Class of Stock [Line Items] | ||||
Common stock dividend declared (in dollars per share) | $ 0.17 | $ 0.15 | ||
Aggregate preferred stock dividends | $ 2,887 | $ 2,887 | ||
Common Class A | ||||
Class of Stock [Line Items] | ||||
Common stock dividend declared (in dollars per share) | $ 0.17 | $ 0.17 | ||
Aggregate common stock dividends | $ 15,014 | $ 14,209 | ||
Series A Preferred Stock | ||||
Class of Stock [Line Items] | ||||
Preferred stock dividends declared (in dollars per share) | $ 0.421875 | $ 0.421875 | ||
Aggregate preferred stock dividends | $ 2,887 | $ 2,887 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award | ||
Stock-based compensation expense | $ 1.8 | $ 1.2 |
Restricted Stock | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Restricted stock granted (in shares) | 224,027 | |
Restricted stock granted, grant date fair value (in dollars per share) | $ 14.84 | |
Restricted stock surrendered, forfeited in period (in shares) | 52,088 | |
Employee restricted stock award, vesting period | 2 years | |
Nonvested restricted shares outstanding (in shares) | 214,210 | |
Unrecognized compensation cost | $ 2.6 | |
Unrecognized compensation cost, recognition period | 36 months | |
Restricted Stock | Executive Officer | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Employee restricted stock award, vesting period | 3 years | |
Restricted Stock | Non-Employee Director | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Non-employee restricted stock award vest grant over period | 1 year | |
Restricted Stock | Grant Date | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Restricted stock award, vesting percentage | 33.33% | |
Restricted Stock | Grant Date | Executive Officer | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Restricted stock award, vesting percentage | 40.00% | |
Restricted Stock | First Anniversary | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Restricted stock award, vesting percentage | 33.33% | |
Restricted Stock | First Anniversary | Executive Officer | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Restricted stock award, vesting percentage | 20.00% | |
Restricted Stock | Second Anniversary | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Restricted stock award, vesting percentage | 33.33% | |
Restricted Stock | Second Anniversary | Executive Officer | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Restricted stock award, vesting percentage | 20.00% | |
Restricted Stock | Third Anniversary | Executive Officer | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Restricted stock award, vesting percentage | 20.00% | |
Amended and Restated 2013 Equity Incentive Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Number of shares reserved for issuance (in shares) | 1,700,000 | |
Shares available for issuance (in shares) | 432,603 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Carrying Amounts and Fair Values of Financial Instruments Measured based on Level Two Inputs (Detail) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Carrying Value | ||
Fair Value of Financial Instruments | ||
Indebtedness, net | $ 1,178,831 | $ 958,910 |
Notes receivable, net | 133,557 | 126,429 |
Interest rate swap liabilities | 1,063 | 3,467 |
Interest rate swap and cap assets | 13,359 | 2,926 |
Fair Value | ||
Fair Value of Financial Instruments | ||
Indebtedness, net | 1,184,117 | 976,520 |
Notes receivable, net | 133,557 | 126,429 |
Interest rate swap liabilities | 1,063 | 3,467 |
Interest rate swap and cap assets | $ 13,359 | $ 2,926 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - Construction Contracts - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Related Party Transactions | |||
Revenue from contracts with affiliated entities | $ 12.4 | ||
Gross profit from related parties | $ 0.5 | ||
Due from related parties | $ 2.1 | $ 4.1 | |
Executive Officer | |||
Related Party Transactions | |||
Gross profit from related parties | 3.9 | ||
Related party amount of transaction | $ 81.6 | ||
Gross profit margin, related parties | 5.10% | ||
Credit facility, amount outstanding | $ 9.5 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2022 | Jan. 04, 2022 | Dec. 31, 2021 | Jan. 07, 2021 | |
Commitments and Contingencies | ||||
Line of credit, performance and payment bonds | $ 2,100 | $ 2,100 | ||
Allowance for credit losses | 1,178 | $ 994 | ||
Harbor Point Parcel 3 Partnership | ||||
Commitments and Contingencies | ||||
Credit facility, amount outstanding | $ 15,000 | |||
Unfunded Loan Commitment | ||||
Commitments and Contingencies | ||||
Loans and leases receivable, commitments, variable rates | 15,700 | |||
Unfunded Loan Commitment | Other Liabilities | ||||
Commitments and Contingencies | ||||
Allowance for credit losses | 400 | |||
Financial Standby Letter of Credit | Harbor Point Parcel 3 Partnership | ||||
Commitments and Contingencies | ||||
Guarantor obligations, maximum exposure (up to) | $ 15,000 | |||
Interlock Commercial | Financial Guarantee | ||||
Commitments and Contingencies | ||||
Guarantor obligations, maximum exposure (up to) | 37,500 | |||
Guarantor obligations, carrying value | 1,700 | |||
Operating Partnership | ||||
Commitments and Contingencies | ||||
Credit facility, amount outstanding | $ 9,500 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ in Thousands | Apr. 25, 2022 | Apr. 11, 2022 | Apr. 07, 2022 | Apr. 01, 2022 | Apr. 30, 2022 | Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 |
Subsequent Event [Line Items] | |||||||||
Dispositions of real estate investments, net of selling costs | $ 0 | $ 9,156 | |||||||
Notional amount | 1,048,100 | $ 1,073,587 | |||||||
Harbor Point Parcel 4 | Forecast | |||||||||
Subsequent Event [Line Items] | |||||||||
Maximum commitment | $ 74,000 | ||||||||
Construction loans | |||||||||
Subsequent Event [Line Items] | |||||||||
Borrowings under construction loans | $ 14,200 | ||||||||
Subsequent Event | Interest rate caps | |||||||||
Subsequent Event [Line Items] | |||||||||
Notional amount | $ 175,000 | ||||||||
Cap rate purchased, interest rate | 1.00% | ||||||||
Derivative premium paid | $ 3,600 | ||||||||
Subsequent Event | Interest Rate Cap Two | |||||||||
Subsequent Event [Line Items] | |||||||||
Cap rate sold, interest rate | 3.00% | ||||||||
Subsequent Event | Annapolis Junction Apartments | |||||||||
Subsequent Event [Line Items] | |||||||||
Percentage of voting interests acquired | 16.00% | ||||||||
Subsequent Event | Harbor Point Parcel 4 | |||||||||
Subsequent Event [Line Items] | |||||||||
Interests in equity method investments | 90.00% | ||||||||
Subsequent Event | Annapolis Junction Apartments | |||||||||
Subsequent Event [Line Items] | |||||||||
Interests in equity method investments | 95.00% | ||||||||
Subsequent Event | Hoffler Place | Disposed of by Sale | |||||||||
Subsequent Event [Line Items] | |||||||||
Dispositions of real estate investments, net of selling costs | $ 43,100 | ||||||||
Subsequent Event | Summit Place | |||||||||
Subsequent Event [Line Items] | |||||||||
Dispositions of real estate investments, net of selling costs | $ 37,800 | ||||||||
Subsequent Event | Gainesville Apartments | Co-venturer | |||||||||
Subsequent Event [Line Items] | |||||||||
Earn out payment | $ 1,100 | ||||||||
Subsequent Event | Revolving Credit Facility | |||||||||
Subsequent Event [Line Items] | |||||||||
Borrowings under credit facility | $ 15,000 | ||||||||
Subsequent Event | Construction loans | |||||||||
Subsequent Event [Line Items] | |||||||||
Borrowings under construction loans | $ 1,300 | ||||||||
Subsequent Event | Construction loans | Harbor Point Parcel 3 | |||||||||
Subsequent Event [Line Items] | |||||||||
Debt instrument, face amount | 161,500 | ||||||||
Subsequent Event | Construction loans | Harbor Point Parcel 4 | |||||||||
Subsequent Event [Line Items] | |||||||||
Debt instrument, face amount | $ 109,700 | ||||||||
Subsequent Event | Secured Debt | Wills Wharf, Baltimore, Maryland | |||||||||
Subsequent Event [Line Items] | |||||||||
Actual leased property percentage | 70.00% | ||||||||
Restricted cash | $ 4,300 | ||||||||
Subsequent Event | Secured Debt | Wills Wharf, Baltimore, Maryland | Minimum | |||||||||
Subsequent Event [Line Items] | |||||||||
Required lease property percentage | 75.00% |