Earnings call transcript Q4 2022

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning, ladies and gentlemen, and welcome to the Armada Hoffler Fourth Quarter 2022 Earnings Conference Call. At this time, all lines are in listen only mode.

Following the presentation, we will conduct a question-and-answer session. [Operator Instructions] This call is being recorded today, Tuesday, February 14, 2023.

I would now like to turn the conference over to Chelsea Forrest, Director of Corporate Communications and Investor Relations. ahead. go Please

Chelsea Forrest

thank and and webcast. joining Hoffler's Armada Good year you XXXX quarter full and earnings fourth morning for conference call

On CFO in Haddad, the morning, myself call Lou is addition CEO; Shawn and to Barnes-Smith, Tibbetts, COO. Matthew this

numbers quarter will our guidance package after access the the conclusion be to this available release distributed with replay A call supplemental along XX, of fourth shortly press are our earnings through XXXX. replay The of provided were press morning. earnings announcing earnings and this The March the call the in release.

who the XX, initial are listen as For updated and this those herein that earnings call. February today, be to this XXXX, presentation, you we to remind of made will of remarks the not rebroadcast subsequent

forward disclosed SEC. release listeners our to and a and this to risks of that These results with we known difficult from as as mezzanine which beliefs, we many impact not statements, are disclosure management's cautioned cause generally expectations control. forward-looking currently are our beliefs, expectations possible business, our the and financing our call, related forward-looking we the to our that make our can result in performance Listeners press and which taking account the upon our development statements are position pipeline, portfolio any the based beyond information have this change dispositions, assumptions documents well predict statements program, may morning future and performance advise furnished all current filed materially including the guidance our may of events or and activities, of These into portfolio, our are distributed review construction liquidity is acquisitions statements factors, looking the differ of and that or actual and outlook. expectations our assumptions risk available. to uncertainties on comments and factors and During as to we in

normalized We on of are but financial non-GAAP to armadahoffler.com. which as non website and measures, quarterly included measures, Definitions our FFO. measures, will FFO comparable reconciliations the to available in discuss these package, including supplemental GAAP most as is also at GAAP the not limited well

start guidance. We this our on draw time, the today guidance our available by discussing made will call your like At to our to XXXX I'd attention presentation XXXX website.

turn to now Lou. over the call I'll

Lou Haddad

Thanks, morning, Chelsea. and Good us thank for today. you everyone, joining

there Chairman, of joint Directors on are In family a thank our addition Dan the for and and being Management, partners many Armada we investors, the our venture Founder Board Hoffler, to you behalf sincerely team. part On of call. analysts Hoffler Executive of and of the and

found a of gives designation transact thorough our record to track physical grade company read that rating additional about few work, grade in hard of gives encourage model, responsible and decade investment represents can business DBRS Class-A we management. BBB Armada It a access accomplishment I solid years sources be this us follow an Morningstar achievement the only only who investors MorningStar and that to rating credit which multi be I would companies. portfolio, more have an all Hoffler. and assessment the thought investment dedication The years our report, previously attained making. believe and to your This validation We expertise capital DBRS rating website. a in be to diversified the future. the assigned with Through on brought by unbiased many us

primary exceeds quarter's completes properties, This asset on this released all normalized previous seen, same and which probably have of robust office record fourth the earnings you of earnings guidance. this firing NOI were share As The interest from morning payoff a full already drivers The obviously increased per FFO us per is store quarter. of share cylinders. saw early equity The XXXX. XX% preferred outperformance a for by far company a we that over the year NOI payment. triggered $X.XX grow minimum

I this morning released our Later found give will our presentation, my comments on XXXX on details pipeline, on which the comments Relations focus call, guidance Today, current the in our wrap financial as be and and highlights. the further remarks our was well Matt and can will of will quarter Investor metrics. as with operations development prepared status the up ongoing portfolio Shawn on website.

Turning package. to page guidance our of three

store stabilization growth are that and organic the substantial recently we see acquisitions. and our anticipated lease delivered NOI, same portfolio, up from projects developed resulting in of You'll forecasting a property increase in development

We record $XXX continue million another the in couple through to in also over as of over contracts we years. work year third-party anticipate next construction

of combined This factors towards and All to year, our program. in impact earnings. a bottom unsecured the of good realize move done share X.X% balance healthy in finance sheet more work our these the term have could the mezzanine reduction per the we'll Matt increase further fixed and rate team planned result debt line longer

$XXX we in of $XXX further with stabilize. trajectory growth market of have possible continue the and of development of component All a million a as told, anticipation our few acquisitions, opportunities target to deliver million our accretive Unit OP we projects our to upward of pleased off identified are earnings Regarding equity. potential

you'll a illustration pandemic that the expect that four, to future. shows trajectory. that and this consistency foreseeable the see continue out of of chart page model to of steady growth This has we Turning company coming for the an been

$X of portfolio elevated NOI noncore $X of over or note to as assets after year the a million the ago. Construction established we in historical we the the of portfolio the of that $XX to the years $XXX return range eventually target at Please you few to income see level million a some As to time continuous stabilize as income fee climb, million expected income is continues program disposition over so. despite last mezzanine rise that eventually million decreases profits.

the The pie top to the increase in in Turning five. expected our dramatic and NOI portfolio. illustrate the at reiterates property charts sectors various the page table

portfolio. we to largest simply will total continue the year fastest, of on but apartment. expect rebalancing all of a stabilized be of grow While that and sector, less our absolute to continue an percentage will the developments We continue on virtue by sectors full will a basis. the the to project basis, retail Multifamily grow newly the in pipeline

the We well our expect to of new as existing the remain with addition Post in office portion Southern stable of relatively coming percentage tenants online as portfolio. the office

forecast Our the exiting completion. joint upon venture contemplates current Rowe T. Price

rate line chart spreads, trend we the grow record this quality sustained Whether that the stronger or the and it's dividend earnings. classes to that this financial after occupancy, period and the diversification is has of are each measures normalized to of weighted terms year. NOI, as our healthy share growth bottom expect over these summarizes we reason of deliver incrementally per six add and here. already to tenant average producing FFO, than measured will fundamentals inclusive has data. our asset continue consistent believe each year in EBITDA projected team have important, future achieved growth The of and growth and three underlying Perhaps lease Page renewal credit portfolio, the we important XXXX every our increased NOI to the ever,

We estate on is real if particularly understand sectors, your gateway especially news focus office, this runs against some the markets. drumbeat in of

demand have seeing rates and ability our submarkets. contrary, On record the are consequently to we the properties across rental and drive

demand accommodating history the are tenant has biggest The this Given a facing add this we in portfolio reason economic of for see no resilience portfolio capacity. in and challenge we demonstrated, change. to expansion

of office inaccurate REITs and the is office properties. In XX% issues at short, to other would quality overlook the profitability. to record income of and facing this importantly, of with performance And more major our together the characterization operating are portfolio group of sources, which strength, ignore all even fee us structural our levels

over to Matt. Now

Matthew Barnes-Smith

Lou. What Good I'm morning, proud of to to part continues thank that be year, all Hoffler extremely the and Armada expectations. outperform team a you,

reported quarter $X.XX for diluted and indicated, Lou of diluted $X.XX of share. of the XXXX, per we share per normalized FFO FFO As final

we quarter, our of robust a metrics committed exactly across produced set achieving what fourth the shareholders. operating For we to our consecutive portfolio

materially fiscal $X.XX and normalized our our year, and X% the outperforming we later on less FFO strategy achieved fee share $X.XX fee income. call of by on earnings the diluted XXXX diluted guidance reliance high on will original with pandemic outperforming Shawn operational per income and For equity performance discuss our preferred additional pre reporting insight. our share, providing FFO per full of and

fixed balance strategy. our made transformation spoke sheet term pleased long I'm unsecured over towards that months I our continuing we've to at to debt few rate the execute last report strong and length progress quarter, fiscal Last regarding

closed X.X% with look our basis will the mirroring our this mode immediately secured loan stabilization. of once off and to $XXX utilized on our facility. an from release to from the term have you primary our utilize pipeline the As $XXX unsecured press that SOFR The development we reached preferred has funds we of debt point remaining we have rate early one at the partnering term of secured facility seen pay debt. accordion to XXX plus all-in swapped million and lenders, applicable million This feature year convert loan December another conditions terms construction credit projects was in a

This amount in that million swap this for of at all-in executed recast back derivatives $XXX million the favorable expired of August earlier $XXX another X.XX%. month. the on we in the December, loan swap term replacing was placed the funds market Taking early rate advantage we notional also the of that cap

XXX% endeavor transition is the sheet, to rate variable we we'll balance hedged. maintain As debt our

XXXX, stabilized at quarter consistent adjusted stabilize our remained of ratio For debt fourth portfolio times. the EBITDA to the of X.X portfolio

of leverage a the range capital plan in result most stabilized optimized ways. X.X to financing our of is between the overarching times continued X our times deploying implementation Our

the was approach of capital our and strategy Armada that noted to providing opportunity this business rating, part earlier, we broader to Hoffler to worked financing month positioned access Lou at our exceptionally this balance a a transformation. who ensure funds was involved. I'd overarching to cost to rating credit like The for further everybody were and well lower As rewarded sheet BBB take that last markets year as diversified opportunity hard at of thank the over with team this

volatility Baltimore, supporting strong enter we're historical is trophy across several high a of when will for favorable. Whilst strength monitor coverage conditions rating, of look placement investment in that in mitigates a been asset tenant commercial interest EBITDA that market identified we Atlantic flow degree and years. environment leading to cash has our Mid the markets, in hurry diversification private no to positions the and our to transact and classes assets the our our Morningstar grade market base number DBRS within exposure including

that maintaining quarter, debt remains low the our in fourth and the X.X% In cost economic uncertainty hedged rising our fixed the debt of of illustrating reducing rate average risk in weighted cycle. is XXX% this at interest success or

expectation the XXXX. Assuming yield reasonably consistent for weighted our debt that of XXXX forward cost with current curve our average that is will and be stays below X% projection,

As means XXXX will mentioned million note. debt construction XXXX be paid last quarter, the off of at below with significantly in maturity. have do a we we Apartments small secured maturities not loan debt any the $XX amount and Gainesville refinanced in priced a This that maturing

As the is execution well. sheet going of the can you transformation tell, exceptionally balance

Lou team's projected leverage years. position slides, investment and with no in strong means cost next business next our opportunistic maintaining in our intentionally strong into support months. a acquisitions, debt liquid peers, we competitive have We well our to two the are ready of metrics, for as the our with coupled guidance low growth structured our mentioned That maturities XX

for pass highlights. now operational over to will I Shawn some

Shawn Tibbetts

Matt. you, Thank

years execution excellence performance from targets its the in standpoint continues at teams execution indicated, the a quality seamless to remain of the operating That value that come. to high package we Lou development ensure positive highlights. to company's history. supplemental reliable our with and now KPI As said, XX operational Armada review focused was that board on will Please We value the execution shareholder on the refer that services, hyper throughout remains XXXX the create to to are projects Hoffler creation sustained across the top portfolio, XXXX focused believe year trend and construction combined mind. for continue strongest portfolio of and and best-in-class safe

on year XXXX I a basis, NOI would basis a same cash cash commercial XXXX basis, operational with multifamily call coming portfolio the on in XX.X% positive year noteworthy out at releasing like on of on a few X.X% Full store and on on the cash were was and portfolio X.X% a basis. X.X% basis. spreads GAAP the full to metrics. GAAP X.X% for a a

see can the performance, in is you execution our from our team extremely As diligent of asset operations. management

Cinemas. watch market. of on are indicator Bath is our watch Two focused of to team intimate as Regal inhabiting extension are a also the may tenants as these of is at management who tenant issues era One with level, example issues that performance process that overall the This various and at this list. not profile commercial to diligence act prevent our useful the factors forecast our Our property. focused higher would assets, only the teams as well management. of and property continued economic trends post refinement to of our risk be the asset potentially list approach at COVID Bed to in remains the the & due otherwise This or team an enables who NOI tenants affect react but the and Beyond

Beyond a given focal has point financial Bed Bath recent been & challenges.

in the targeted are However, closure. for portfolio stores neither of our two

of result against a in time. strength stores our have the to portfolio, the at them not As elected this of we reserve

Beach on Following it the Bath would fill news in should In like space said, take Center. North vacated. Durham, from tenant to the long peers. be is units recent received apartment store our redevelopment amongst of Bed an inquiry strong credit Carolina order to That Town advantage unsolicited contemplated & popular location, who a Patterson adding at a our has location the available hope becomes performer Beyond, space the Virginia by its plans in we

strong Regal performer. Harrisonburg is two Cinema The We location within also a portfolio, the have locations

acres adjacent at approximately sits is community a and XX & that Bath is for However, the prime redevelopment Beyond Town In Beach, Regal to Virginia the represents redevelopment aforementioned Cinemas Bed into Center. opportunity. ideal multifamily on site

about concerned list not locations. are properties watch other on of We any given their strength the the

high office, of quality a of leased remain we tenants. XX.X% highly terms with In roster at

request recently to of As the lack in tenant office issues stable space. available stated, XX% high remain given continues facing range with rate the DBRS expansion is Morningstar and occupancy the company the

working take will high XXXX. in Center are another quality some we to result Beach. global one with located at point We in tenant firm Town credit expect Virginia who at space in yet high This

moderate Our seeing growth we forecasted to We're continues previously thrive. residential as now single to had rent portfolio and a pace underwritten. digit

in yields As of result growth well terms pipeline. multifamily units our the positioned approach, development a conservative rent for are and in of currently portfolio

can predictability to resilient in continues Our overall performance. and a characterized portfolio in makeup is its be diverse of the company's provide stability couple diversity The and ways.

property robust First, over we time. have diversity beneficial in type, which is certainly

multifamily and DBRS quality Morningstar tenant our as the a our of rating. and Secondly, states, support credit asset degree of quality diversification of high the commercial portfolio base

Additionally, to maintain set. mixed where flight increase These us assets time. and over advantages our more times competitive of competition, beneficiary during competitive the use ability earnings case the the growth conditions market outperformed remain the and quality give likely to the steady

development months. are spring and construction approach Our as to according we the projects progressing schedule

a the projects most underway and We with consistent are have manner importantly the being is underwriting. value creation that significant executed in

project our record asset in happier reported couldn't a of is in in least Terwilliger last partners at conjunction the be and now We As our up stabilized quarter, time with developed operating Pappas. state. the with Gainesville we performance

trophy being to on become highly the submarket Post asset anticipated materially complete with over will rehabilitation and XX% end Chronicle asset schedule. in The proceeding in unique Roswell, high rents four to North use Belmont, Mill the Georgia up and barriers XXXX of project asset success entry. leased This of a with Southern Carolina was mixed in Our form planned. quarter been in resounding both has construction as outperform site. continues project at expectations, A the is the the lease

Rowe and Constellation T. on is Price's schedule adjacent well proceeding asset planned. and and situated headquarters unique as global as it is our is project Wharf Wills underway, next This our Construction assets. to to

of Baltimore. a are the and We significant project and construct positioned familiarity constructing the deep portion Market develop our in with Point experience to and understanding Harbor waterfront best given this

of this occupancy in build fruition. XXXX. expected stabilization third project are to to This and initial coming We to is suit excited as simultaneous the quarter is achieve building

the Point also at apartments of construction door, Next underway. well Harbor allied is

apartment multifamily XXXX We are Point and bullish Rowe like this third ready adjacent to XXXX. knowledge the on our its and asset. schedule of to Street of submarket trophy initial project be This is Price project for T. given location also on is our occupancy the in expected quarter

in partners preferred resulting in the than balance great Our example look entire XX% Pappas of at day investment of last return the for. of Terwilliger years. on the repaid is equity types loan This XXXX, Solis Nexton two investments on less we a a

the size assures in equity basis, significant investment Multifamily our stack of apartment spread in lower higher which priority in all growing risk opportunity. markets a return the had manageable creates and return southeast projects true a with over virtually

in with respectively. in projects and Park XXXX the expected occupancy are also with City third preferred second Terwilliger in Georgia Solis the Gainesville and quarter Both are quarter Gainesville of Charlotte arrangements X XXXX, equity well of initial Pappas. underway

with would preferred opportunity love assets the our the one to if rest arises. portfolio, these As of equity we of own

Interlock West profit. partners at at use expected The healthy and located by Collins S.J. a to The trade mixed continues is well XX% for asset our to developed Atlanta occupancy. perform Midtown in Main Main at

certainly acquire call, mentioned a candidate. intend the strategically to earlier potential The in Lou we XXXX. accretive in Interlock As assets is

temporarily Armada construct as T. business, We equity. are base experience perspective, shareholder focus income mutual results held are by increased of their in interest every team. team, the of Hoffler. at element on given business the The significant These with is management embedded managing a preferred alignment with our incredible therefore headquarters. decisions. management to driving our our the income combined Rowe portion construction result construction and both of the in and closely partnership creation with stake in are our success in This From a opportunity appropriately fee global of guided Price, our has ultimately a our one [indiscernible] the ownership value key shareholder objectives

guidance at past exceed The team the incredible forward levels. to organization an our in to for highest team Armada performing the quarter members year. continues throughout you thank outperforming to full We each of year Hoffler this look Lou would as expectations, mentioned, especially to success during like increasingly I the XXXX. say

I will over questions. the turn the to now call for back operator

Operator

the and ahead. Rogers begin comes Ladies gentlemen, first question-and-answer go Baird. Please of from [Operator Your will now sir. you, question Thank we Instructions] Dave session.

Dave Rogers

morning, Good on the you've you'd that Yes. start Lou Shawn with and rating. questions. for want and to acquisition Congratulations working pipeline on with Couple everybody, of debt Maybe there the know I the a units been and to use. thoughts while. OP respect or

equity bit you you of First, had, more that the Interlock? this detail what us a capital, us? on more or number seeing? maybe in the distressed that private more as gave question the you're side, Is think some relationships assumed there can would fill blank that give that that other debt And either out kind be, traditional just include for would another is little third of kind source you about point of on there, you of maybe deploying would the

Lou Haddad

Thanks, Dave, morning. and good

call, basically opportunity a the I and at number from to So increase right with very we've the mentioned that -- again, are off-market NOI. previously that come own few relationships we'd be properties interested opportunities in long-term as folks from in acquiring, that the identified

premium over sure Unit that the you've that actually criteria. would properties thing in and several want names at if As to because we an that a of too is quarters, particular Shawn using going that wide a put into who's There is as our don't be it's said there But would few for Interlock We seen do to far the sort us levels transact one. are mentioned, to again there opportunity that go prices time not I've at for accretive. there. years on Obviously, immediately discount others. OP range the time we're meet possibility, be a

or well there market an right. Units. As construction as time near far deploy looking Dave? Matt as also when high some We're as obviously, could we're placement OP methods be on the And liquidity. of at Anything is financing, there, all-time private as debt, to else mentioned, Hello? the

Operator

My apologies.

Our the queue. last removed caller has from been

Jefferies. Peter from Your will next question ahead. of Abramovitz go Please come

Peter Abramowitz

growth, of more XXXX, you office it's imagine, Yes. you wanted on terms implied assumed kind in little that's detail or give of positive Thank ask, probably same-store terms you. what's would trajectory in I on that? Could color in the out, around given but growth for flat just of But give just negative the guidance. elsewhere. the more to I a move any could bit

Lou Haddad

sure I'm morning, you're where up Good not And the picking Yes. Peter. negative.

office move across that, move well is a to the positive sure already continue a out, projection as not beyond I'm Our significant will a that there's there's on be basis. but growth sector. same-store in as

same-store forecasted low So into bottom be the We Shawn think in single all going to line multifamily that, is, moderate as is sectors are positive mentioned, growth. to digits.

newly So of it's then the historical properties growth part range. to full lastly, of that biggest Wills outperform, have continue which of Retail time around. again as the online a good a Wharf, year. two is brought And will office. year apartment well is that we stabilization And the last to full year stabilized going NOI

Peter Abramowitz

(ph) it. place medicine Okay, you timing that the move [JHU] the to of backfill have the what's got in up? leases And

Shawn Tibbetts

Morgan Stanley?

Lou Haddad

Stanley. We get the online that answer the that until backfilled Morgan for Do I year. And by That's doesn't you being Yes. first think come Shawn? you. it have can of

Shawn Tibbetts

little Yes. on detail at dates rent But we'll the a Rent the X/X/XX. commencement you And beginning more XX. so yes, get XX, January that. of commencement

the well coincides with that So JHU expiration.

Peter Abramowitz

Got it.

Lou Haddad

the rest that office washed Pete, in where there, if tenants by over there's increase totally the a as of you're headed, gap from as portfolio. in NOI the moving it's the think well but other I Yes,

Peter Abramowitz

And activity convergence things expectations thawing kind you financing any out seller general, and more can and private markets in estate side? sense. talk buyer of just real and well the there about of Makes as then between Okay. as signs

Lou Haddad

Yes.

settle cap going think still until terms rates in acquisitions, hopefully. and later of true really like, dispositions are what that's think out don't the are. year to think people for I searching in the We I

an discovery privately price the out So is looking on hoping transact why, market, we already close that's anything relationships are interested at have. frankly, That's we're with issue. to not in that but

terms a are cautious is financing, the capital of I about bit types. of In all Banks think across deploying same property more everybody mind.

side angling are and Our XX%, are towards that whereas years were now seeing short loans multifamily only talking everybody construction a longtime XX%. partners in knows we few the XX% ago,

obviously can the and equity for So getting ever. transact opportunities possibly need than we're more we more is on. And many

basically a ownership, And position assets that ground equity so potential we're in in cherry or pick the mezzanine, basis. with on up preferred right either

Peter Abramowitz

Got Thank it. from me. That's all you.

Operator

comes of Stevenson question Please next Janney. Your ahead. Rob from go

Rob Stevenson

JV morning, completion. guys. exit you think you Good a I Lou, for XXXX expected that T. Price your comments, transaction that to the Rowe you Is in indicated upon guys?

Lou Haddad

in be of property the they'll third the -- quarter Well, XXXX. occupying

to reasonable just clear. venture. well. have love Rob, effort can that settle going significant level. a one you've at that's as early redeploy Obviously, it. course, around back marketing rates current the We disposition we'd the to a assuming we So be of XXXX. out capital market it's a transact love we whether And to that or a look it. about sure little And That's concentration everything just we're well own to building get Again, trophy to We're going building. I and where conditions, as day as want cap at got love until our And make hold thinking. concerned

Rob Stevenson

guys? the and in Bath of what you redevelopment. then are, the about about near-term you sort talk time and/or those especially don't if completion in bit And of Regal think Can a you there little Shawn start in stuff the is especially talked the I opportunities back redevelopment when portfolio, you both are or the is for Bed get Okay. -- the plans the have you of when today? that Where near type portfolio for term? And opportunities frame else the

Lou Haddad

time, We're Shawn, let at redevelopment, we're, I'll specifically. multifamily selecting long have that development, looking a rent locations. those seat. of uses. of frankly, But those see and Dave. more anxious the you're And that the be cater ground-up do an it regard far With want change now. take lot in in down love to of But are kind we'd you Shawn Thanks, we as sitting answer same to only ton of right looking we'd awful to properties both at stuff. the to to -- term, as

Shawn Tibbetts

shortage as you Yes, out think there's Sure. there, would I no opportunities imagine. of

deal And are we're yield flow. down. Lou's kind That prices happy point or business and we back the stabilize on seeing redevelopment, lot our collect obviously, a so and To come of to of construction helps the helps, case. rent watch

of are as the have, being today. an opportunity to block. that that there for We've have Allied terms site Center, we as the to built are to you here Rob, we to Baltimore -- Town we build In development, ground-up a today opportunity our if in well, subsequent want mixed-use In elect to more show calling units units multifamily develop know, building. a arises opportunity parcel here the been

Our we the the partners week in deals deals. across mean multifamily bring spectrum last looked space. I to at continue three

just and the pull We opportunities So very diligent on. been we're seeing trigger we've about to setting strong deal -- flow -- discerning which there. we're

probably for development ground-up shorter from in. opportunities So the redevelopment make the there perspective, that are actual in but us, to are I there yes, rent come our opportunities, continues think assuming more term, sense that

Rob Stevenson

to Matt, Okay. then, anything the earnings. And cadence of XXXX of note

over Are quarters that the up down disrupt a in specific that's guidance the quarterly little out or to point? push either this there quarter. progression averages meaningfully to at a and think $X.XX going anything I

Matthew Barnes-Smith

on Park equity XXXX, and you our Solis potentially is Solis Rob. our we could it throughout of spread where that that, it but we'll would that morning, have that quarters, City guidance talked the feel there roughly But they of in about, guidance, even, we've in as will kind year. timing standards one early XXXX, see like of Nexton we the placed case base see Lou guidance, deals and spread evenly come Today Today put as came potential fairly work a the in – through yes, Good early be we the what materializing in for Shawn were preferred not acquisitions potential that will be yes, in the kind sold we opportunity potentially the be upside. of and

Rob Stevenson

$XX million mezz two an in the investments? guidance, preferred that or just the of that the additional year? is throughout And Or contemplate Okay. three does investment the existing

Lou Haddad

That's active right just are three that now. the

Rob Stevenson

Okay.

addition at a guidance that that in basis up to anything point? push So would net on

Matthew Barnes-Smith

preferred the the this mix in mezzanine that Yes. Rob, model. close with that [indiscernible] early. there first is to in of one transacted partners the TP, our service quarter preferred Hopefully, additional the and Solis deal is equity replace will year

Rob Stevenson

That's very much. Okay. helpful. you Thank

Operator

comes Your next Rogers ahead. from Dave Please at Baird. question go

Dave Rogers

question. still Hey, for about answer quite backlog, side what just increases the it's to for that to the of Hoffler, the regard you're that of cost maybe that some bit kind thanks Curious in first me, but maybe whether you're trying well? are seeing you you're with But landscape sense unique seeing. development including in business, of of a facing for just Armada get competitive as to an I acceleration guess fourth construction overall, just added the really construction quarter. seeing Lou, on the Follow-up backlog the earlier, the about sorry a to

Lou Haddad

relationships beneficiary to We've question term last the right next very I the to unique continue for we're and Dave, of now got I active first, answer long that your that couple us. are think to fairly and it's so think years. we'll of be these

high the subcontractors. moderated. that extent largely but not year We're that pricing, expecting in prices spring. we a shortage the and going were labor well really don't to time escalations The last and not We're offset that's as at by of through significant decrease. this of contracts, as there's be think nearly I anybody have have seeing things still costs, down to commodity quality putting come significantly, any is but been terms In

Dave Rogers

Thanks great. Okay, follow-up. for the

Operator

question Camille Please of next Your of go comes Bonnel from Bank America. ahead.

Camille Bonnel

Hi, of good potential from job morning, Can year. number and uses medium about bit call investment this more credit and elaborate sources in grade the plan, It context a leverage capital just term a you just target? nice the rating. of sounds your investment little on this you opportunities have the of like

Lou Haddad

at before, staring of on at premium a got a like opportunities an lot off stock sources good of the Camille, equity mentioned number And we're up right price. of market company's to Sure. we've pick basis. I properties using and a really some now,

market, excited line got course, the now we're added done. quiver private have expand accordion to of placement Matt's in as liquidity feature well So of lot on balance we the arrows to plus that we we've as a our ability an credit have and, sheet. get the through

than that. And we for He's Matt we stay has Price -- I that everybody table that $XXX want use the we're sold understands, in will we to over T. million Plus range lastly, also We of sure if we say can kick that the assets acquisitions exit potentiality. anything Rowe mentioned. to make in under noncore But assets so me I if with last other ready going XX that a capital. of months. necessary or I mentioned the have noncore still XX source is a feeling

we're Matt that is of go, can that number out So our ways mentioned. expectation of but there's different to not get going had range that a we

to $XX note end buys that year irrespective Interlock important is outstanding who be our that, some the of that million forecast. will in it, it is is transact the the will our guidance of Also not

Camille Bonnel

many color there. And answered of you. been my the already. Thank questions have Appreciate

earlier store increase I next outlook. caught So on make you're to NOI year. expecting just one as And to sure wanted the follow-up I your comments same

expectations saying your any portfolio? for move you remain will are even retail unknown factoring in office So or positive improve outs for your in occupancy XXXX or

Lou Haddad

base relative. is from improvement We're XX% understand starting a of I Well, Sure. occupied.

there's extra lot a space to So of not lease.

As here space, in a one essentially Center global well. our trying Shawn tenant shoehorn as office organization into Town to more we're mentioned,

or Our office above level expectation XX% that and or at is slightly in going stay retail. to near we're that,

historical are all again multifamily that years. last the norms seen being mid-XXs with back will projecting of increases to digit We moderate of what we've the couple as to opposed single in in

Camille Bonnel

Thank you. Okay.

Operator

Chris Your of next Sakai Please ahead. go question Singular Research. comes from

Chris Sakai

Hi, about from operations good morning. talk funds the main growth Can guidance? the you normalized drivers and for

Lou Haddad

Yes.

is across at guidance the main three guidance are basically boost. $XXX same-store stabilized on again, significant construction which a Portfolio increase being sales the look that one the year as guidance, obviously, being our -- a We're you package, well drivers on based newly and of is stabilized that, as a we forecasting the two deck. I in up of the board page On really think if full NOI gives factors: biggest of twofold. pretty a million each year-over-year properties backlog increase mentioned. basis, income substantial in sectors that also the pretty

guys phenomenal a I'll take are -- Our a second say doing to our job. guys

projects, doing large us. great full our basically complex imagine, You for job out at historical and can they're running and a doubled lot backlog a of we

you moderating those to projecting levels. XXXX go of income on of is negative, And the from lastly, that the effect down if interest side will, we're both

to all net As part of a capital our And our reliance I together, use put our mentioned, of pre-program pretty it for fee own it's increase. more as healthy our income decrease and portfolio. on

Chris Sakai

right. All suppose I that. is Matt. for Thanks for question Okay. this

rental increasing how Should levels? from XXXX, or roughly same For it the at be current should expenses? are be we looking

Matthew Barnes-Smith

fairly NOI Yes, good with Chris. consistent believe will XXXX. that We seen margins morning, in the our be we've on what

NOI in will by as rental uptick rental growing, increase contra will is So be we expenses. in But that see of kind the revenue. an

Chris Sakai

Okay. those answers. Thanks for

Matthew Barnes-Smith

so it's also pass by in those for are commercial our Chris, expenses side tenants. business, the the worth through portion a Yes. paid or noting of of reimbursable that

Chris Sakai

Thanks. Okay.

Operator

there time, this are further at no gentlemen, questions. and Ladies

will So any to the I conference for turn remarks. Haddad closing back Lou

Lou Haddad

soon. announcements attention you're Thanks look coming for of all and further the forward morning. in this results interested appreciate our your to And we're you. and proud and I time Thank company

Operator

you morning. participating. Ladies thank and your this for your all And does please lines. conference gentlemen, ask call disconnect would you conclude like for We to to this

Armada Hoffler Properties (AHH) 14 Feb 232022 Q4 Earnings call transcript