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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 FORM
10-Q
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 
For the quarterly period ended September 30, 2022  
or 
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 
For the transition period from                      to                      
Commission File Number: 001-35908
ARMADA HOFFLER PROPERTIES, INC.
(Exact name of registrant as specified in its charter)
Maryland46-1214914
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
222 Central Park Avenue,Suite 2100
Virginia Beach,Virginia23462
(Address of principal executive offices)(Zip Code)
 
(757) 366-4000
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.01 par value per shareAHHNew York Stock Exchange
6.75% Series A Cumulative Redeemable Perpetual Preferred Stock, $0.01 par value per shareAHHPrANew York Stock Exchange
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.      Yes       No 
Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files).      Yes       No 
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act. 
Large Accelerated Filer
Accelerated Filer
Non-Accelerated FilerSmaller Reporting Company
Emerging Growth Company
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   ¨
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  
 Yes       No
As of November 4, 2022, the registrant had 67,729,839 shares of common stock, $0.01 par value per share, outstanding. In addition, as of November 4, 2022, Armada Hoffler, L.P., the registrant's operating partnership subsidiary, had 20,611,190 units of limited partnership interest ("OP Units") outstanding (other than OP Units held by the registrant).


ARMADA HOFFLER PROPERTIES, INC.
 
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED SEPTEMBER 30, 2022
 
Table of Contents
 
 Page
 
 
 
 
 
 
 
 
 
 
 
 
 





PART I. Financial Information
 
Item 1.    Financial Statements
 
ARMADA HOFFLER PROPERTIES, INC.
Condensed Consolidated Balance Sheets
(In thousands, except par value and share data)
 September 30,
2022
December 31,
2021
 (Unaudited) 
ASSETS  
Real estate investments:  
Income producing property$1,797,547 $1,658,609 
Held for development6,294 6,294 
Construction in progress92,357 72,535 
 1,896,198 1,737,438 
Accumulated depreciation(316,189)(285,814)
Net real estate investments1,580,009 1,451,624 
Real estate investments held for sale 80,751 
Cash and cash equivalents54,700 35,247 
Restricted cash4,865 5,196 
Accounts receivable, net35,400 29,576 
Notes receivable, net141,816 126,429 
Construction receivables, including retentions, net47,865 17,865 
Construction contract costs and estimated earnings in excess of billings232 243 
Equity method investments64,470 12,685 
Operating lease right-of-use assets23,416 23,493 
Finance lease right-of-use assets46,155 46,989 
Acquired lease intangible assets103,297 62,038 
Other assets85,346 45,927 
Total Assets$2,187,571 $1,938,063 
LIABILITIES AND EQUITY  
Indebtedness, net$1,041,576 $917,556 
Liabilities related to assets held for sale 41,364 
Accounts payable and accrued liabilities24,301 29,589 
Construction payables, including retentions63,376 31,166 
Billings in excess of construction contract costs and estimated earnings15,736 4,881 
Operating lease liabilities31,708 31,648 
Finance lease liabilities46,409 46,160 
Other liabilities53,551 55,876 
Total Liabilities1,276,657 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 September 30, 2022 and December 31, 2021
171,085 171,085 
Common stock, $0.01 par value, 500,000,000 shares authorized; 67,730,053 and 63,011,700 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively
677 630 
Additional paid-in capital588,707 525,030 
Distributions in excess of earnings(122,838)(141,360)
Accumulated other comprehensive gain (loss)15,202 (33)
Total stockholders’ equity652,833 555,352 
Noncontrolling interests in investment entities24,187 629 
Noncontrolling interests in Operating Partnership233,894 223,842 
Total Equity910,914 779,823 
Total Liabilities and Equity$2,187,571 $1,938,063 

See Notes to Condensed Consolidated Financial Statements.
1


ARMADA HOFFLER PROPERTIES, INC.
Condensed Consolidated Statements of Comprehensive Income 
(In thousands, except per share data)
(Unaudited)
 Three Months Ended 
September 30,
Nine Months Ended 
September 30,
 2022202120222021
Revenues    
Rental revenues$53,743 $49,560 $163,602 $142,679 
General contracting and real estate services revenues69,024 17,502 138,947 71,473 
Total revenues122,767 67,062 302,549 214,152 
Expenses    
Rental expenses12,747 12,717 38,101 34,841 
Real estate taxes5,454 5,543 16,695 16,314 
General contracting and real estate services expenses66,252 15,944 133,491 68,350 
Depreciation and amortization17,527 16,886 54,865 52,237 
Amortization of right-of-use assets - finance leases278 278 833 745 
General and administrative expenses3,854 3,449 12,179 10,957 
Acquisition, development and other pursuit costs 8 37 111 
Impairment charges  333 3,122 
Total expenses106,112 54,825 256,534 186,677 
Gain (loss) on real estate dispositions, net33,931 (113)53,424 3,604 
Operating income50,586 12,124 99,439 31,079 
Interest income3,490 3,766 10,410 14,628 
Interest expense (10,345)(8,827)(28,747)(25,220)
Loss on extinguishment of debt(2,123)(120)(2,899)(120)
Change in fair value of derivatives and other782 131 7,512 838 
Unrealized credit loss release (provision)42 617 (858)284 
Other income (expense), net118 15 415 201 
Income before taxes42,550 7,706 85,272 21,690 
Income tax (provision) benefit(181)42 140 522 
Net income42,369 7,748 85,412 22,212 
Net income attributable to noncontrolling interests:
Investment entities(5,583) (5,811) 
Operating Partnership(7,909)(1,237)(16,571)(3,477)
Net income attributable to Armada Hoffler Properties, Inc.28,877 6,511 63,030 18,735 
Preferred stock dividends(2,887)(2,887)(8,661)(8,661)
Net income attributable to common stockholders$25,990 $3,624 $54,369 $10,074 
Net income attributable to common stockholders per share (basic and diluted)$0.38 $0.06 $0.81 $0.17 
Weighted-average common shares outstanding (basic and diluted)67,729 61,083 67,525 60,310 
Comprehensive income:    
Net income$42,369 $7,748 $85,412 $22,212 
Unrealized cash flow hedge gains (losses)7,108 (460)18,780 1,347 
Realized cash flow hedge (gains) losses reclassified to net income(366)1,123 1,287 3,304 
Comprehensive income49,111 8,411 105,479 26,863 
Comprehensive income attributable to noncontrolling interests:
Investment entities(5,659) (5,987) 
Operating Partnership(9,465)(1,406)(21,227)(4,680)
Comprehensive income attributable to Armada Hoffler Properties, Inc.$33,987 $7,005 $78,265 $22,183 

See Notes to Condensed Consolidated Financial Statements.
2


ARMADA HOFFLER PROPERTIES, INC.
Condensed Consolidated Statements of Equity
(In thousands, except share data)
(Unaudited)
 Preferred stockCommon stockAdditional paid-in capitalDistributions in excess of earnings Accumulated other comprehensive gain (loss)Total stockholders' equityNoncontrolling interests in investment entitiesNoncontrolling interests in Operating PartnershipTotal equity
Balance, December 31, 2021$171,085 $630 $525,030 $(141,360)$(33)$555,352 $629 $223,842 $779,823 
Net income— — — 9,993 — 9,993 100 2,183 12,276 
Unrealized cash flow hedge gains— — — — 5,907 5,907 — 1,815 7,722 
Realized cash flow hedge losses reclassified to net income— — — — 602 602 — 185 787 
Net proceeds from issuance of common stock— 45 65,149 — — 65,194 — — 65,194 
Noncontrolling interest in acquired real estate entity— — — — — — 23,065 — 23,065 
Restricted stock awards, net— — 1,064 — — 1,064 — — 1,064 
Acquisitions of noncontrolling interests— — (3,901)— — (3,901)— — (3,901)
Redemption of operating partnership units— — 132 — — 132 — (132) 
Dividends declared on preferred stock— — — (2,887)— (2,887)— — (2,887)
Dividends and distributions declared on common shares and units ($0.17 per share and unit)
— — — (11,433)— (11,433)— (3,506)(14,939)
Balance, March 31, 2022171,085 675 587,474 (145,687)6,476 620,023 23,794 224,387 868,204 
Net income — — — 24,160 — 24,160 128 6,479 30,767 
Unrealized cash flow hedge gains— — — — 2,986 2,986 55 909 3,950 
Realized cash flow hedge losses reclassified to net income— — — 1 629 630 45 191 866 
Net proceeds from issuance of common stock— — (35)— — (35)— — (35)
Restricted stock awards, net— 2 573 — — 575 — — 575 
Distributions to noncontrolling interests— — — — — — (84)— (84)
Contributions from noncontrolling interests— — — — — — 14 — 14 
Dividends declared on preferred stock— — — (2,887)— (2,887)— — (2,887)
Dividends and distributions declared on common shares and units ($0.17 per share and unit)
— — — (11,529)— (11,529)— (3,505)(15,034)
Balance, June 30, 2022171,085 677 588,012 (135,942)10,091 633,923 23,952 228,461 886,336 
Net income— — — 28,877 — 28,877 5,583 7,909 42,369 
Unrealized cash flow hedge gains— — — — 5,393 5,393 74 1,641 7,108 
Realized cash flow hedge gains reclassified to net income— — — — (282)(282)1 (85)(366)
Restricted stock awards, net— — 713 — — 713 — — 713 
Redemption of operating partnership units— — (18)— — (18)— (112)(130)
Distributions to noncontrolling interests— — — — — — (5,423)— (5,423)
Dividends declared on preferred stock— — — (2,887)— (2,887)— — (2,887)
Dividends and distributions declared on common shares and units ($0.19 per share and unit)
— — — (12,886)— (12,886)— (3,920)(16,806)
Balance, September 30, 2022$171,085 $677 $588,707 $(122,838)$15,202 $652,833 $24,187 $233,894 $910,914 
3


 Preferred stockCommon stockAdditional paid-in capitalDistributions in excess of earnings Accumulated other comprehensive lossTotal stockholders' equityNoncontrolling interests in investment entitiesNoncontrolling interests in Operating PartnershipTotal equity
Balance, December 31, 2020$171,085 $591 $472,747 $(112,356)$(8,868)$523,199 $488 $233,115 $756,802 
Net income— — — 5,198 — 5,198  811 6,009 
Unrealized cash flow hedge gains— — — — 1,685 1,685 — 591 2,276 
Realized cash flow hedge losses reclassified to net income— — — — 798 798 — 280 1,078 
Net proceeds from issuance of common stock— 7 8,974 — — 8,981 — — 8,981 
Restricted stock awards, net— 1 631 — — 632 — — 632 
Redemption of operating partnership units— — 131 — — 131 — (134)(3)
Dividends declared on preferred stock— — — (2,887)— (2,887)— — (2,887)
Dividends and distributions declared on common shares and units ($0.15 per share and unit)
— — — (9,008)— (9,008)— (3,128)(12,136)
Balance, March 31, 2021171,085 599 482,483 (119,053)(6,385)528,729 488 231,535 760,752 
Net income— — — 7,026 — 7,026  1,429 8,455 
Unrealized cash flow hedge losses— — — — (349)(349)— (120)(469)
Realized cash flow hedge losses reclassified to net income— — — — 820 820 — 283 1,103 
Net proceeds from issuance of common stock— 11 14,105 — — 14,116 — — 14,116 
Restricted stock awards, net— — 473 — — 473 — — 473 
Acquisition of noncontrolling interest in real estate entity— — (950)— — (950)146 — (804)
Dividends declared on preferred stock— — — (2,887)— (2,887)— — (2,887)
Dividends and distributions declared on common shares and units ($0.16 per share and unit)
— — — (9,783)— (9,783)— (3,337)(13,120)
Balance, June 30, 2021171,085 610 496,111 (124,697)(5,914)537,195 634 229,790 767,619 
Net income— — — 6,511 — 6,511  1,237 7,748 
Unrealized cash flow hedge losses— — — — (343)(343)— (117)(460)
Realized cash flow hedge losses reclassified to net income— — — — 837 837 — 286 1,123 
Net proceeds from issuance of common stock— 3 4,328 — — 4,331 — — 4,331 
Restricted stock awards, net— — 450 — — 450 — — 450 
Dividends declared on preferred stock— — — (2,887)— (2,887)— — (2,887)
Dividends and distributions declared on common shares and units ($0.16 per share and unit)
— — — (9,831)— (9,831)— (3,337)(13,168)
Balance, September 30, 2021$171,085 $613 $500,889 $(130,904)$(5,420)$536,263 $634 $227,859 $764,756 
See Notes to Condensed Consolidated Financial Statements.
4


ARMADA HOFFLER PROPERTIES, INC.
Condensed Consolidated Statements of Cash Flows
(In thousands)(Unaudited)
 Nine Months Ended 
September 30,
 20222021
OPERATING ACTIVITIES  
Net income$85,412 $22,212 
Adjustments to reconcile net income to net cash provided by operating activities:  
Depreciation of buildings and tenant improvements40,770 38,521 
Amortization of leasing costs, in-place lease intangibles and below market ground rents - operating leases14,094 13,716 
Accrued straight-line rental revenue(4,542)(4,209)
Amortization of leasing incentives and above or below-market rents(779)(794)
Amortization of right-of-use assets - finance leases833 745 
Accrued straight-line ground rent expense97 157 
Unrealized credit loss provision (release)