8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 31, 2014

ARMADA HOFFLER PROPERTIES, INC.

(Exact name of registrant as specified in its charter)

Maryland	001-35908	46-1214914
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)
222 Central Park Avenue, Suite 2100 Virginia Beach, Virginia		23462
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (757) 366-4000

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition.

On October 31, 2014, Armada Hoffler Properties, Inc. (the “Company”) issued a press release announcing its financial position as of September 30, 2014, results of operations for the three and nine months ended September 30, 2014 and other related information. Also on October 31, 2014, the Company made available on its website at www.ArmadaHoffler.com certain supplemental information concerning the Company’s financial results and operations for the three and nine months ended September 30, 2014. Copies of such press release and supplemental information are furnished as Exhibits 99.1 and 99.2, respectively, to this Current Report on Form 8-K and are incorporated herein by reference.

In accordance with General Instructions B.2 and B.6 of Form 8-K, the information included in this Current Report on Form 8-K, including Exhibits 99.1 and 99.2 hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any filing made by the Company under the Exchange Act or Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.

Item 7.01. Regulation FD Disclosure.

The disclosure contained in Item 2.02 is incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.	Description
99.1	Press Release, dated October 31, 2014, issued by Armada Hoffler Properties, Inc., providing its financial position as of September 30, 2014 and results of operations for the three and nine months ended September 30, 2014.
99.2	Armada Hoffler Properties, Inc. Third Quarter 2014 Supplemental Information.

SIGNATURES

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

	ARMADA HOFFLER PROPERTIES, INC.
Date: October 31, 2014		/S/ MICHAEL P. O’HARA
		Michael P. O’Hara
		Chief Financial Officer and Treasurer

EXHIBIT INDEX

Exhibit No.	Description
99.1	Press Release, dated October 31, 2014, issued by Armada Hoffler Properties, Inc., providing its financial position as of September 30, 2014 and results of operations for the three and nine months ended September 30, 2014.
99.2	Armada Hoffler Properties, Inc. Third Quarter 2014 Supplemental Information.

EX-99.1

Exhibit 99.1

ARMADA HOFFLER PROPERTIES REPORTS THIRD QUARTER 2014 RESULTS

FFO of $0.21 Per Diluted Share and Core FFO of $0.22 Per Diluted Share

Operating Property Portfolio at 95% Occupancy

Company Raised Full-Year 2014 Outlook

VIRGINIA BEACH, VA, October 31, 2014 — Armada Hoffler Properties, Inc. (NYSE: AHH), a full service real estate company that develops and owns high-quality office, retail and multifamily properties in key Mid-Atlantic markets, today announced its results for the quarter ended September 30, 2014.

Highlights include:

• Funds From Operations (“FFO”) of $7.3 million, or $0.21 per diluted share, for the quarter ended September 30, 2014.

• Core FFO of $7.5 million, or $0.22 per diluted share, for the quarter ended September 30, 2014.

• Occupancy up to 95.1%, compared to 94.6% as of June 30, 2014.

• Increased GAAP and Cash Same Store Net Operating Income (“NOI”) 4% and 2%, respectively, compared to the third quarter of 2013.

• Delivered approximately 83,000 square feet of office space to Clark Nexsen – the anchor tenant in the new 4525 Main Street tower.

• Delivered the initial units at both Encore Apartments and Whetstone Apartments in September 2014.

• Leased substantially all of the remaining vacant retail space at the Town Center of Virginia Beach.

• Completed the previously announced acquisition of Dimmock Square, a 106,000 square foot retail power center located in Colonial Heights, Virginia.

• Completed an underwritten public offering of 5.75 million shares of common stock at $9.05 per share, generating net proceeds of $49.3 million.

• Entered into a preliminary agreement to sell the Sentara Williamsburg office building for approximately $15.4 million, representing an implied cap rate of 6.3%.

• Construction contract backlog of $153.5 million as of September 30, 2014.

October 31, 2014

Page 2 of 11

“This morning, we reported another solid quarter with FFO and Core FFO coming in better than expectations driven primarily by stronger than expected leasing,” commented Louis Haddad, Chief Executive Officer. “This quarter marked an inflection point in the execution of our development pipeline, as we delivered the remaining projects slated for 2014. In addition, we closed on the Dimmock Square acquisition, are in the process of selling two assets and raised our 2014 outlook. We are enthusiastic about a strong finish to the year as well as our ability to execute in the coming year.”

Financial Results

Net income for the third quarter increased 120% to $2.8 million, or $0.08 per diluted share, compared to $1.3 million, or $0.04 per diluted share, in the third quarter of 2013.

FFO for the third quarter increased 41% to $7.3 million, or $0.21 per diluted share, compared to $5.2 million, or $0.16 per diluted share, for the third quarter of 2013. Core FFO for the third quarter increased 15% to $7.5 million, or $0.22 per diluted share, compared to $6.6 million, or $0.20 per diluted share, for the third quarter of 2013.

The quarter-over-quarter increases in net income and Core FFO reflect the acquisition of Dimmock Square as well as increased occupancy and Same Store NOI in each of the Company’s operating property segments. The quarter-over-quarter increases in net income and FFO also reflect the positive initial leasing performance of 4525 Main Street and the negative impact of a $1.1 million loss on debt extinguishment in the prior year.

The Company believes that Core FFO is a useful supplemental performance measure as it excludes certain items including, but not limited to, losses on debt extinguishments, non-cash compensation expense and effects from non-stabilized development projects. A reconciliation of GAAP net income to FFO and Core FFO is presented on page eight of this release.

Operating Performance

The Company executed new and renewal office and retail leases totaling 72,000 square feet. At the end of the quarter, the Company’s office, retail and multifamily operating property portfolios were 94.8%, 94.7% and 96.6% occupied, respectively.

Balance Sheet and Financing Activity

At the end of the quarter, the Company had total outstanding debt of approximately $335.8 million, including $54.0 million outstanding on its revolving credit facility. Approximately 43% of the Company’s debt had fixed interest rates at September 30, 2014 and, after considering interest rate swaps and LIBOR interest rate caps with strike prices at or below 150 basis points, approximately 78% of the Company’s debt was fixed or hedged at September 30, 2014.

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October 31, 2014

Page 3 of 11

Outlook

The Company raised its full-year 2014 outlook.

	Current Parameters 3Q 2014		Previous Parameters 2Q 2014
Core FFO (excluding the impact from non-stabilized projects)		~$29.0 million		~$27.5 million
General & administrative expenses		~$7.6 million		~$7.6 million
Construction company annual segment gross profit		~$4.6 million		~$4.3 million
Non-stabilized projects—negative impact to FFO (excluded from Core FFO)		~$400,000		~$1.0 million

The Company raised its full-year 2014 Core FFO expectations, which excludes the impact from non-stabilized projects and non-cash compensation, to approximately $29.0 million from the previous expectation of approximately $27.5 million. The increase was driven by better than expected leasing activity across the portfolio most notably at the Cosmopolitan, better than expected construction activity and lower interest expense.

Full-year construction company segment gross profit is now expected to be approximately $4.6 million compared to the previous expectation of $4.3 million.

The Company expected to deliver five development projects in 2014, all of which have been delivered as of October 31, 2014, and the related leasing activity has been strong. The Company now expects the negative impact from non-stabilized projects in 2014 to be approximately $400,000, which is better than the previous expectation of $1.0 million. This is the amount that the Company will exclude from its calculation of Core FFO.

Supplemental Financial Information

Further details regarding operating results, properties and leasing statistics can be found in the Company’s supplemental financial package available at www.ArmadaHoffler.com under the Investor Relations section.

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October 31, 2014

Page 4 of 11

Webcast and Conference Call

The Company will host a webcast and conference call on Friday, October 31, 2014 at 8:30 a.m. Eastern Time to review quarterly results and discuss recent events. The live webcast will be available through the Investor Relations page of the Company’s website, www.ArmadaHoffler.com, or through www.viavid.com. To participate in the call, please dial 877-407-3982 (domestic) or 201-493-6780 (international). A replay of the conference call will be available through Friday, November 28, 2014, by dialing 877-870-5176 (domestic) or 858-384-5517 (international) and entering the pass code 13592458.

About Armada Hoffler Properties, Inc.

Armada Hoffler Properties, Inc. 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 throughout the Mid-Atlantic United States. The Company has elected to be taxed as a real estate investment trust (“REIT”) for U.S. federal income tax purposes.

Forward-Looking Statements

Certain matters within this press release are discussed using forward-looking language as specified in the Private Securities Litigation Reform Act of 1995, and, as such, may involve known and unknown risks, uncertainties and other factors that may cause the actual results or performance to differ from those projected in the forward-looking statement. These forward-looking statements may include comments relating to the current and future performance of the Company’s operating property portfolio, the Company’s development pipeline, the Company’s construction and development business, including backlog and timing of deliveries, and financing activities, as well as acquisitions, dispositions and the Company’s financial outlook and expectations. For a description of factors that may cause the Company’s actual results or performance to differ from its forward-looking statements, please review the information under the heading “Risk Factors” included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013, and other documents filed by the Company with the Securities and Exchange Commission.

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October 31, 2014

Page 5 of 11

Non-GAAP Financial Measures

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

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

However, because FFO excludes depreciation and amortization and captures neither the changes in the value of the Company’s properties that result from use or market conditions nor the level of capital expenditures and leasing commissions necessary to maintain the operating performance of the Company’s properties, all of which have real economic effects and could materially impact the Company’s results from operations, the utility of FFO as a measure of the Company’s performance is limited. In addition, other equity REITs may not calculate FFO in accordance with the NAREIT definition as the Company does, and, accordingly, the Company’s FFO may not be comparable to such other REITs’ FFO. Accordingly, FFO should be considered only as a supplement to net income as a measure of the Company’s performance.

Management also believes that the computation of FFO in accordance with NAREIT’s definition includes certain items that are not indicative of the results provided by the Company’s operating property portfolio and affect the comparability of the Company’s period-over-period performance. Accordingly, the Company further adjusts FFO to arrive at Core FFO, which eliminates certain of these items, including, but not limited to, gains and losses on the extinguishment of debt and non-cash stock compensation expense.

For reference, as an aid in understanding the Company’s computation of FFO and Core FFO, a reconciliation of net income calculated in accordance with GAAP to FFO and Core FFO has been included on page eight of this release.

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October 31, 2014

Page 6 of 11

ARMADA HOFFLER PROPERTIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(dollars in thousands)

	September 30,			December 31,
	2014			2013
	(Unaudited)
Assets
Real estate investments:
Income producing property	$	499,661		$	406,239
Construction in progress		93,946			56,737
Accumulated depreciation		(115,839	)		(105,228	)
Net real estate investments		477,768			357,748
Cash and cash equivalents		17,101			18,882
Restricted cash		4,425			2,160
Accounts receivable, net		20,307			18,272
Construction receivables, including retentions		15,285			12,633
Construction costs and estimated earnings in excess of billings		40			1,178
Other assets		32,409			24,409
Total Assets	$	567,335		$	435,282
Liabilities and Equity
Indebtedness	$	335,792		$	277,745
Accounts payable and accrued liabilities		7,569			6,463
Construction payables, including retentions		39,820			28,139
Billings in excess of construction costs and estimated earnings		3,420			1,541
Other liabilities		17,979			15,873
Total Liabilities		404,580			329,761
Total Equity		162,755			105,521
Total Liabilities and Equity	$	567,335		$	435,282

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October 31, 2014

Page 7 of 11

ARMADA HOFFLER PROPERTIES, INC. AND PREDECESSOR

CONDENSED CONSOLIDATED AND COMBINED INCOME STATEMENTS

(in thousands, except per share amounts)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
	(Unaudited)
Revenues
Rental revenues	$	16,713		$	14,899		$	47,225		$	42,528
General contracting and real estate services		31,532			21,896			71,261			63,143
Total revenues		48,245			36,795			118,486			105,671
Expenses
Rental expenses		4,414			3,840			12,230			10,468
Real estate taxes		1,480			1,317			4,231			3,777
General contracting and real estate services		30,468			20,907			67,807			60,868
Depreciation and amortization		4,567			3,933			12,593			11,112
General and administrative		1,741			1,638			5,768			5,212
Acquisition, development and other pursuit costs		174			—			174			—
Impairment charges		15			—			15			533
Total expenses		42,859			31,635			102,818			91,970
Operating income		5,386			5,160			15,668			13,701
Interest expense		(2,734	)		(2,598	)		(7,977	)		(9,802	)
Loss on extinguishment of debt		—			(1,127	)		—			(2,252	)
Gain on acquisitions		—			—			—			9,460
Other income (expense)		59			(109	)		(23	)		343
Income before taxes		2,711			1,326			7,668			11,450
Income tax benefit (provision)		43			(74	)		(135	)		137
Net income		2,754			1,252			7,533			11,587
Net income attributable to Predecessor		—			—			—			(2,020	)
Net income attributable to stockholders and unitholders	$	2,754		$	1,252		$	7,533		$	9,567
Per Share:
Basic and Diluted	$	0.08		$	0.04		$	0.23		$	0.30
Weighted Average Common Shares and Units:
Basic and Diluted		34,557			32,223			33,479			32,028

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October 31, 2014

Page 8 of 11

ARMADA HOFFLER PROPERTIES, INC.

RECONCILIATION OF NET INCOME TO CORE FUNDS FROM OPERATIONS

(in thousands, except per share amounts)

	Three Months Ended September 30,					Nine Months Ended September 30,
	2014			2013		2014
	(Unaudited)					(Unaudited)
Net income	$	2,754		$	1,252	$	7,533
Depreciation and amortization		4,567			3,933		12,593
Funds From Operations	$	7,321		$	5,185	$	20,126
Non-cash stock compensation		198			242		720
Non-stabilized development projects		(178	)		—		384
Loss on extinguishment of debt		—			1,127		—
Loan modification costs		—			—		—
Acquisition costs		174			—		174
Impairment charges		15			—		15
Core Funds From Operations	$	7,530		$	6,554	$	21,419
Funds From Operations per diluted share	$	0.21		$	0.16	$	0.60
Core Funds From Operations per diluted share	$	0.22		$	0.20	$	0.64
Common Shares and Units Outstanding		34,557			32,223		33,479

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October 31, 2014

Page 9 of 11

ARMADA HOFFLER PROPERTIES, INC.

SAME STORE RESULTS

(dollars in thousands)

	Three Months Ended September 30,						Change
	2014			2013			$			%
	(Unaudited)
Office Same Store(1)
Rental revenues	$	6,623		$	6,364		$	259			4	%
Property expenses		2,139			2,081			58			3	%
Net Operating Income		4,484			4,283			201			5	%
Retail Same Store(2)
Rental revenues		5,765			5,683			82			1	%
Property expenses		1,739			1,745			(6	)		0	%
Net Operating Income		4,026			3,938			88			2	%
Multifamily Same Store(3)
Rental revenues		2,979			2,852			127			4	%
Property expenses		1,386			1,331			55			4	%
Net Operating Income		1,593			1,521			72			5	%
Net Operating Income (GAAP)	$	10,103		$	9,742		$	361			4	%
Net effect of straight-line rents		(263	)		(125	)
Amortization of lease incentives and above or below market rents		148			155
Net Operating Income (Cash)	$	9,988		$	9,772		$	216			2	%

⁽¹⁾  Excludes 4525 Main Street

⁽²⁾  Excludes Dimmock Square and Greentree Shopping Center

⁽³⁾  Excludes Encore Apartments, Liberty Apartments and Whetstone Apartments

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October 31, 2014

Page 10 of 11

ARMADA HOFFLER PROPERTIES, INC.

RECONCILIATION OF SAME STORE RESULTS TO SEGMENT RESULTS

(dollars in thousands)

	Three Months Ended September 30,
	2014			2013
	(Unaudited)
Office Same Store(1)
Rental revenues	$	6,623		$	6,364
Property expenses		2,139			2,081
Net Operating Income		4,484			4,283
Non-Same Store Net Operating Income		460			—
Segment Net Operating Income	$	4,944		$	4,283
Retail Same Store(2)
Rental revenues		5,765			5,683
Property expenses		1,739			1,745
Net Operating Income		4,026			3,938
Non-Same Store Net Operating Income		265			—
Segment Net Operating Income	$	4,291		$	3,938
Multifamily Same Store(3)
Rental revenues		2,979			2,852
Property expenses		1,386			1,331
Net Operating Income		1,593			1,521
Non-Same Store Net Operating Income		(9	)		—
Segment Net Operating Income	$	1,584		$	1,521

⁽¹⁾  Excludes 4525 Main Street

⁽²⁾  Excludes Dimmock Square and Greentree Shopping Center

⁽³⁾  Excludes Encore Apartments, Liberty Apartments and Whetstone Apartments

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October 31, 2014

Page 11 of 11

ARMADA HOFFLER PROPERTIES, INC.

RECONCILIATION OF SEGMENT RESULTS TO NET INCOME

(dollars in thousands)

	Three months ended September 30, 2014
	(Unaudited)
	Office		Retail		Multifamily		Total Rental Properties		General Contracting & Real Estate Services		Total
Segment revenues	$	7,295	$	6,086	$	3,332	$	16,713	$	31,532	$	48,245
Segment expenses		2,351		1,795		1,748		5,894		30,468		36,362
Net Operating Income	$	4,944	$	4,291	$	1,584	$	10,819	$	1,064	$	11,883
Depreciation and amortization												(4,567	)
General and administrative expenses												(1,741	)
Acquisition, development and other pursuit costs												(174	)
Impairment charges												(15	)
Interest expense												(2,734	)
Other income												59
Income tax benefit												43
Net income											$	2,754

Contact:

Julie Loftus Trudell

Armada Hoffler Properties, Inc.

Vice President of Investor Relations

Email: JTrudell@ArmadaHoffler.com

Phone: (757) 366-6692

###

EX-99.2

Armada Hoffler Properties, Inc.

Third Quarter 2014 Supplemental Information

1

Exhibit 99.2

Table of Contents

2

Forward Looking Statements

3

Corporate Profile

4

Quarter Results and Financial Summary

5

Highlights

6

2014 Outlook

7

Summary Information

8

Summary Balance Sheet

9

Summary Income Statement

10

Core FFO & AFFO

11

Summary of Outstanding Debt

12

Core Debt to Core EBITDA

13

Debt Information

14

Portfolio Summary & Business Segment Overview

15

Stabilized Portfolio Summary

16

Stabilized Portfolio Summary Footnotes

17

Development Pipeline

18

Acquisitions & Dispositions

19

Construction Business Summary

20

Operating Results & Property-Type Segment Analysis

21

Same Store NOI by Segment

22

Top 10 Tenants by Annual Base Rent

23

Office Lease Summary

24

Retail Lease Summary

26

Historical Occupancy

28

Net Asset Value Component Data

31

Appendix - Definitions & Reconciliations

32

Definitions

33

Reconciliations

37

Forward Looking Statements

3

This Supplemental Information should be read in conjunction with

our Quarterly Report on Form 10-Q for

the quarter ended September 30, 2014, and the unaudited consolidated financial statements appearing in

our press release dated October 31, 2014, which has been furnished as Exhibit 99.1 to our Form 8-K filed

on October 31, 2014.  The Company makes statements in this Supplemental Information that are forward-

looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (set forth in

Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the

Securities Exchange Act of 1934, as amended (the “Exchange Act”)).  In particular, statements pertaining

to our capital resources, portfolio performance and results of operations contain forward-looking

statements.  Likewise, all of our statements regarding anticipated growth in our funds from operations,

core funds from operations, adjusted funds from operations, funds available for distribution and net

operating income are forward-looking statements.  You can identify forward-looking statements by the

use of forward-looking terminology such as “believes,”

“expects,”

“may,”

“will,”

“should,”

“seeks,”

“approximately,”

“intends,”

“plans,”

“estimates”

or “anticipates”

or the negative of these words and

phrases or similar words or phrases which are predictions of or indicate future events or trends and which

do not relate solely to historical matters. You can also identify forward-looking statements by discussions

of strategy, plans or intentions.

Forward-looking statements involve numerous risks and uncertainties and you should not rely on them as

predictions of future events. Forward-looking statements depend on assumptions, data or methods which

may

be

incorrect

or

imprecise

and

the

Company

may

not

be

able

to

realize

them.

The

Company

does

not

guarantee

that

the

transactions

and

events

described

will

happen

as

described

(or

that

they

will

happen

at all).  For further discussion of risk factors and other events that could impact our future results, please

refer

to

the

section

entitled

“Risk

Factors”

in

our

most

recent

Annual

Report

on

Form

10-K

filed

with

the

Securities and Exchange Commission (the “SEC”), and the documents subsequently filed by us from time

to time with the SEC.

Corporate Profile

4

Corporate Information

Management & Board

Board of Directors

Corporate Officers

Daniel A. Hoffler

Executive Chairman of the Board

Louis S. Haddad

President and Chief Executive Officer

A. Russell Kirk

Vice Chairman of the Board

Anthony P. Nero

President of Development

Louis S. Haddad

Director

Shelly R. Hampton

President of Asset Management

John W. Snow

Lead Independent Director

Eric E. Apperson

President of Construction

George F. Allen

Independent Director

Michael P. O’Hara

Chief Financial Officer and Treasurer

James A. Carroll

Independent Director

Eric L. Smith

Vice President of Operations and Secretary

James C. Cherry

Independent Director

Joseph W. Prueher

Independent Director

Analyst Coverage

Janney, Montgomery, & Scott LLC

Raymond James & Associates

Robert W. Baird & Co.

Stifel, Nicolaus & Company, Inc.

Wunderlich Securities

Michael Gorman

Richard Mulligan

David Rodgers

John Guinee

Craig Kucera

(215) 665-6224

(727) 567-2660

(216) 737-7341

(443) 224-1307

(540) 277-3366

mgorman@janney.com

rj.milligan@raymondjames.com

drodgers@rwbaird.com

jwguinee@stifel.com

ckucera@wundernet.com

Investor Relations Contact

Julie Loftus Trudell

Vice President of Investor Relations

(757) 366-6692

jtrudell@armadahoffler.com

Armada Hoffler Properties, Inc. (NYSE: AHH)

is a full service real estate company that develops, constructs, and owns institutional grade office, retail, and

multifamily properties in the Mid-Atlantic United States.  The Company also provides general contracting and development services to third-party clients

throughout the Mid-Atlantic and Southeastern regions.  Armada Hoffler Properties, Inc. was founded in 1979 and is headquartered in Virginia Beach, VA.  The

Company has elected to be taxed as a real estate investment trust (REIT) for U.S. federal income tax purposes.

Third Quarter Results and

Financial Summary

Highlights

Funds From Operations (“FFO”) of $7.3 million, or $0.21 per diluted share, for the quarter ended

September 30, 2014.

Core FFO of $7.5 million, or $0.22 per diluted share, for the quarter ended September 30, 2014.

Occupancy up to 95.1%, compared to 94.6% as of June 30, 2014.

Increased GAAP and Cash Same Store Net Operating Income (“NOI”) 4% and 2%, respectively,

compared to the third quarter of 2013.

Delivered

approximately

83,000

square

feet

of

office

space

to

Clark

Nexsen

–

the

anchor

tenant

in

the

new

4525

Main

Street

tower.

Delivered the initial units at both Encore Apartments and Whetstone Apartments in September 2014. 

Leased

substantially

all

of

the

remaining

vacant

retail

space

at

the

Town

Center

of

Virginia

Beach.

Completed

the

previously

announced

acquisition

of

Dimmock

Square,

a

106,000

square

foot

retail

power

center

located

in

Colonial

Heights,

Virginia.

Completed

an

underwritten

public

offering

of

5.75

million

shares

of

common

stock

at

$9.05

per

share,

generating

net

proceeds

of

$49.3

million.

Entered into a preliminary agreement to sell the Sentara Williamsburg office building for

approximately $15.4 million, representing an implied cap rate of

6.3%.

Construction contract backlog of $153.5 million as of September 30, 2014.

6

2014 Outlook

7

Current Parameters

Previous Parameters

As of September 30, 2014

As of June 30, 2014

Core FFO

(excluding the impact from non-stabilized projects)

Approximately $29.0 million

Approximately $27.5 million

General & administrative expenses

Approximately $7.6 million

Approximately $7.6 million

Construction company annual segment gross profit

Approximately $4.6 million

Approximately $4.3 million

Non-stabilized projects - negative impact to FFO

(excluded from Core FFO)

Approximately $400,000

Approximately $1.0 million

Summary Information

8

$ in thousands, except per share

Market Capitalization

Key Financials

9/30/2014

Financial Information:

9/30/2014

% of Total

Equity

Total Market

Capitalization

Rental revenues

$16,713

Market Data

General contracting and real estate services revenues

31,532

Total Common Shares Outstanding

63%

25,018,733

Rental properties Net Operating Income (NOI)

10,819

Operating Partnership ("OP") Units Outstanding

37%

14,775,967

General contracting and real estate services gross profit

1,064

Common shares and OP units outstanding

100%

39,794,700

Net income

2,754

Market price per common share

$9.08

Funds From Operations (FFO)

7,321

Equity market capitalization

$361,336

FFO per diluted share

$0.21

Total debt

335,792

Core FFO

7,530

Total market capitalization

$697,128

Core FFO per diluted share

$0.22

Less: cash

(21,526)

Total enterprise value

$675,602

Weighted Average Shares/Units Outstanding

34,557,129

Stable Portfolio Metrics

Debt Metrics

9/30/2014

9/30/2014

Rentable square feet or number of units:

Key Metrics

Office

(1)

949,789

Core debt/enterprise value

35.7%

Retail

(2)

1,198,207

Multifamily

(3)

626

Fixed charge coverage ratio:

Core EBITDA

$9,986

Occupancy:

Interest

2,734

Office

(4)

94.8%

Principal

771

Retail

(4)

94.7%

Total Fixed Charges

3,505

Multifamily

(5)

96.6%

Fixed charge coverage ratio

2.85x

Weighted Average

(6)

95.1%

Core Debt/Annualized Core EBITDA

6.0x

Three months ended

Three months ended

(1) Excludes 4525 Main Street

(2) Excludes Greentree Shopping Center

(3) Excludes Liberty, Encore, and Whetstone Apartments

(4) Office and retail occupancy based on leased square feet as a % of respective tota

(5) Multifamily occupancy based on occupied units as a % of respective total

(6) Total occupancy weighted by annualized base rent

Summary Balance Sheet

9

$ in thousands

9/30/2014

12/31/2013

Assets

(Unaudited)

Real estate investments:

Income producing property

$499,661

$406,239

Construction in progress

93,946

56,737

Accumulated depreciation

(115,839)

(105,228)

Net real estate investments

477,768

357,748

Cash and cash equivalents

17,101

18,882

Restricted cash

4,425

2,160

Accounts receivable, net

20,307

18,272

Construction receivables, including retentions

15,285

12,633

Costs and estimated earnings in excess of billings

40

1,178

Other assets

32,409

24,409

Total Assets

$567,335

$435,282

Liabilities and Equity

Indebtedness

$335,792

$277,745

Accounts payable and accrued liabilities

7,569

6,463

Construction payables, including retentions

39,820

28,139

Billings in excess of costs and estimated earnings

3,420

1,541

Other liabilities

17,979

15,873

Total Liabilities

404,580

329,761

Total Equity

162,755

105,521

Total Liabilities and Equity

$567,335

$435,282

As of

Summary Income Statement 

10

$ in thousands

Three months ended

Nine months ended

9/30/2014

9/30/2013

9/30/2014

9/30/2013

Revenues

(Unaudited)

Rental revenues

$16,713

$14,899

$47,225

$42,528

General contracting and real estate services

31,532

21,896

71,261

63,143

Total Revenues

48,245

36,795

118,486

105,671

Expenses

Rental expenses

4,414

3,840

12,230

10,468

Real estate taxes

1,480

1,317

4,231

3,777

General contracting and real estate services

30,468

20,907

67,807

60,868

Depreciation and amortization

4,567

3,933

12,593

11,112

General and administrative

1,741

1,638

5,768

5,212

Acquisition, development & other pursuit costs

174

-

174

-

Impairment charges

15

-

15

533

Total Expenses

42,859

31,635

102,818

91,970

Operating Income

5,386

5,160

15,668

13,701

Interest expense

(2,734)

(2,598)

(7,977)

(9,802)

Loss on extinguishment of debt

-

(1,127)

-

(2,252)

Gain on acquisitions

-

-

-

9,460

Other income (loss)

59

(109)

(23)

343

Income before taxes

2,711

1,326

7,668

11,450

Income tax benefit (provision)

43

(74)

(135)

137

Net Income

$2,754

$1,252

$7,533

$11,587

Core FFO & AFFO

11

$ in thousands, except per share

(1) Excludes tenant improvements and leasing commissions on first generation rental space.

Three months ended

Nine months ended

9/30/2014

9/30/2014

(Unaudited)

Net income

$2,754

$7,533

Depreciation and amortization

4,567

12,593

FFO

7,321

20,126

FFO per weighted average share

$0.21

$0.60

Core FFO

Adjustments

Non-cash stock compensation

198

720

Impairment charges

15

15

Acquisition costs

174

174

Non-stabilized development pipeline adjustments

(178)

384

Core FFO

7,530

21,419

Core FFO per weighted average share

$0.22

$0.64

AFFO

Adjustments

Non-Stabilized development pipeline adjustments

178

(384)

Acquisition costs

(174)

(174)

Tenant improvements, leasing commissions

(1)

(981)

(2,197)

Leasing incentives

(65)

(128)

Property related capital expenditures

(355)

(896)

Non cash interest expense

117

410

GAAP Adjustments

Net effect of straight-line rents

(803)

(1,493)

Amortization of lease incentives and above (below) market rents

144

461

Derivative (income) losses

(46)

123

Government development grants

300

300

AFFO

5,845

17,441

AFFO per weighted average share

$0.17

$0.52

Summary of Outstanding Debt

12

$ in thousands

(1) LIBOR rate is determined by individual lenders.

(2) Subject to an interest rate swap lock.

(3) Principal balance excluding any fair value

      adjustment recognized upon acquisition.

(4) Excludes fair value adjustment

Debt

Amount

Outstanding

Interest Rate

(1)

Effective Rate as of

September 30, 2014

Maturity Date

Balance at

Maturity

Virginia Beach Town Center

249 Central Park Retail

$15,635

5.99%

September 8, 2016

$15,084

South Retail

6,898

5.99%

September 8, 2016

6,655

Studio 56 Retail

2,636

3.75%

May 7, 2015

2,592

Commerce Street Retail

5,566

LIBOR +2.25%

2.41%

October 31, 2018

5,264

Fountain Plaza Retail

7,818

5.99%

September 8, 2016

7,542

Dick's at Town Center

8,242

LIBOR+2.75%

2.91%

October 31, 2017

7,889

The Cosmopolitan

47,282

3.75%

July 1, 2051

-

Diversified Portfolio

Oyster Point

6,323

5.41%

December 1, 2015

6,089

Broad Creek Shopping Center

   Note 1

4,465

LIBOR +2.25%

2.41%

October 31, 2018

4,223

   Note 2

8,197

LIBOR +2.25%

2.41%

October 31, 2018

7,752

   Note 3

3,432

LIBOR +2.25%

2.41%

October 31, 2018

3,246

Hanbury Village

   Note 1

21,278

6.67%

October 11, 2017

20,499

   Note 2

4,108

LIBOR +2.25%

2.41%

October 31, 2018

3,777

Harrisonburg Regal

3,706

6.06%

June 8, 2017

3,165

North Point Center

   Note 1

10,193

6.45%

February 5, 2019

9,333

   Note 2

2,775

7.25%

September 15, 2025

1,344

   Note 4

1,011

5.59%

December 1, 2014

1,007

   Note 5

690

LIBOR+2.00%

3.57%

(2)

February 1, 2017

641

Tyre Neck Harris Teeter

2,449

LIBOR +2.25%

2.41%

October 31, 2018

2,235

Smith's Landing

24,551

LIBOR+2.15%

2.31%

January 31, 2017

23,793

187,255

132,130

Credit Facility

54,000

LIBOR + 1.60% - 2.20%

2.11%

May 13, 2016

54,000

Total including Credit Facility

$241,255

$186,130

Development Pipeline

4525 Main Street

29,600

LIBOR+1.95%

2.11%

January 30, 2017

29,600

Encore Apartments

19,568

LIBOR+1.95%

2.11%

January 30, 2017

19,568

Whetstone Apartments

12,651

LIBOR+1.90%

2.06%

October 8, 2016

12,651

Sandbridge Commons

5,092

LIBOR+1.85%

2.01%

January 17, 2018

5,092

Liberty Apartments

20,673

(3)

5.66%

November 1, 2043

-

Oceaneering

7,699

LIBOR+1.75%

1.91%

February 28, 2018

7,699

Commonwealth of Virginia - Chesapeake

709

LIBOR+1.90%

2.06%

August 28, 2017

709

Total Notes Payable - Development Pipeline

95,992

75,319

Unamortized fair value adjustments

(1,455)

Total Notes Payable

$335,792

$261,449

3Q 2014

Year to Date

Capitalized Interest

$698

$1,958

Weighted Average Fixed Interest Rate

5.3%

Weighted Average Variable Interest Rate

2.2%

Total Weighted Average Interest Rate

(4)

3.5%

Variable Interest Rate as a % of Total (excluding interest rate caps)

(4)

56.0%

Weighted Average Maturity (years)

(4)

9.0

Core Debt to Core EBITDA

13

$ in thousands

Three months

ended 9/30/2014

9/30/2014

(Unaudited)

(Unaudited)

Net Income

$2,754

Total Debt

$335,792

Excluding:

Excluding:

Interest Expense

2,734

Development Pipeline Unstabilized Debt

(94,538)

Income Tax

(43)

Depreciation and amortization

4,567

Core Debt

$241,254

EBITDA

10,012

Additional Adjustments:

Non-recurring or extraordinary (gains) losses

-

Early extinguishment of debt

-

Core Debt/Annualized Core EBITDA

6.0x

Derivative (income) losses

(46)

Non-cash stock compensation

198

Development Pipeline

(178)

Total Other Adjustments

(26)

Core EBITDA

9,986

Annualized Core EBITDA

$39,944

Debt Information

14

$ in thousands

Interest Rate Cap Agreements At or Below 1.50%

Effective Date

Maturity Date

Strike Rate

Notional Amount

May 31, 2012

May 29, 2015

1.09%

$8,950

September 1, 2013

March 1, 2016

1.50%

40,000

October 4, 2013

April 1, 2016

1.50%

18,500

March 14, 2014

March 1, 2017

1.25%

50,000

Total Interest Rate Caps at or Below 1.50%

$117,450

Fixed Debt Outstanding (excludes fair value adjustment)

146,918

Total Fixed Interest Rate Debt (including caps)

$264,368

Fixed Interest Rate Debt as a % of Total

78%

Portfolio Summary & Business

Segment Overview

Stabilized Portfolio Summary

16

As of 9/30/2014

Property

Location

Year Built

Net Rentable

Square Feet

(1)

% Leased

(2)

Annualized

Base Rent

(3)

Annualized

Base Rent per

Leased Sq. Ft.

(3)

Average Net

Effective

Annual Base

Rent per

Leased Sq. Ft.

(4)

Office Properties

Armada Hoffler Tower

(5)

Virginia Beach, VA

2002

323,966

95.6%

$8,055,758

$26.02

$27.56

One Columbus

Virginia Beach, VA

1984

129,424

100.0%

3,004,179

23.21

23.15

Two Columbus

Virginia Beach, VA

2009

109,091

90.7%

2,527,929

25.55

25.75

Virginia Natural Gas

Virginia Beach, VA

2010

31,000

100.0%

568,230

18.33

20.17

Richmond Tower

Richmond, VA

2010

206,969

98.0%

7,569,747

37.32

42.07

Oyster Point

Newport News, VA

1989

100,139

79.2%

1,749,151

22.06

21.49

Sentara Williamsburg

(6)

Williamsburg, VA

2008

49,200

100.0%

1,006,140

20.45

20.50

Subtotal / Weighted Average Office Portfolio

(7)

949,789

94.8%

$24,481,134

$27.19

$28.82

Retail Properties Not Subject to Ground Lease

Bermuda Crossroads

Chester, VA

2001

111,566

98.6%

1,491,853

13.57

13.79

Broad Creek Shopping Center

Norfolk, VA

1997-2001

227,691

97.3%

3,102,578

14.00

12.61

Courthouse 7-Eleven

Virginia Beach, VA

2011

3,177

100.0%

125,000

39.35

43.81

Gainsborough Square

Chesapeake, VA

1999

88,862

96.5%

1,342,034

15.64

15.37

Hanbury Village

Chesapeake, VA

2006-2009

61,049

86.4%

1,300,035

24.66

24.42

North Point Center

Durham, NC

1998-2009

215,690

92.1%

2,349,473

11.82

11.83

Parkway Marketplace

Virginia Beach, VA

1998

37,804

100.0%

734,111

19.42

20.02

Harrisonburg Regal

Harrisonburg, VA

1999

49,000

100.0%

683,550

13.95

13.95

Dick's at Town Center

Virginia Beach, VA

2002

100,804

83.3%

798,000

9.50

9.58

249 Central Park Retail

Virginia Beach, VA

(8)

2004

91,171

94.8%

2,493,554

28.84

27.97

Studio 56 Retail

Virginia Beach, VA

2007

11,600

84.8%

371,200

37.75

40.21

Commerce Street Retail

(9)

Virginia Beach, VA

2008

19,173

100.0%

781,588

40.77

40.61

Fountain Plaza Retail

Virginia Beach, VA

2004

35,961

100.0%

970,230

26.98

26.21

South Retail

(24)

Virginia Beach, VA

2002

38,493

88.2%

791,578

23.30

26.53

Dimmock Square

Colonial Heights, VA

1998

106,166

100.0%

1,767,178

16.65

17.05

Subtotal / Weighted Avg Retail Portfolio not Subject to Ground Leases

(10)

1,198,207

94.7%

$19,101,961

$16.84

$16.66

Retail Properties Subject to Ground Lease

Bermuda Crossroads

(11)

Chester, VA

2001

(13)

100.0%

163,350

Broad Creek Shopping Center

(12)

Norfolk, VA

1997-2001

(14)

100.0%

579,188

Hanbury Village

(11)

Chesapeake, VA

2006-2009

(15)

100.0%

1,067,598

North Point Center

(11)

Durham, NC

1998-2009

(16)

100.0%

1,062,784

Tyre Neck Harris Teeter

(12)

Portsmouth, VA

2011

(17)

100.0%

508,134

Subtotal / Weighted Avg Retail Portfolio Subject to Ground Leases

100.0%

$3,381,055

Total / Weighted Avg Retail Portfolio

1,198,207

(18)

94.7%

$22,483,016

$16.84

$16.66

Total / Weighted Average Retail and Office Portfolio

2,147,996

94.7%

$46,964,150

$21.42

$22.04

Property

Location

Year Built

Units

(19)

% Leased

(2)

Annualized

Base Rent

(20)

Average

Monthly Base

Rent per

Leased Unit

(21)

Multifamily

Smith's Landing

(22)

Blacksburg, VA

2009

284

96.5%

$3,379,428

$1,027.81

The Cosmopolitan

Virginia Beach, VA

2006

342

96.8%

7,116,900

1,565.68

Total / Weighted Avg Multifamily Portfolio

626

96.6%

$10,496,328

$1,322.08

Stabilized Portfolio Summary Footnotes

17

1)

The net rentable square footage for each of our office properties is the sum of (a) the square footages of existing leases, plus (b) for available space, management’s estimate of net rentable square footage based, in part, on past

leases. The net rentable square footage included in office leases is generally determined consistently with the Building Owners and Managers Association, or BOMA, 1996 measurement guidelines. The net rentable square

footage for each of our retail properties is the sum of (a) the square footages of existing leases, plus (b) for available space, the field verified square footage.

2)

Percentage leased for each of our office and retail properties is calculated as (a) square footage under executed leases as of September 30, 2014, divided by (b) net rentable square feet, expressed as a percentage. Percentage

leased for our multifamily properties is calculated as (a) total units occupied as of September 30, 2014, divided by (b) total units available, expressed as a percentage.

3)

For the properties in our office and retail portfolios, annualized base rent is calculated by multiplying (a) base rental payments for executed leases as of September 30, 2014 (defined as cash base rents (before abatements)

excluding tenant reimbursements for expenses paid by the landlord), by (b) 12. Annualized base rent per leased square foot is calculated by dividing (a) annualized base rent, by (b) square footage under commenced leases as of

September 30, 2014. In the case of triple net or modified gross leases, annualized base rent does not include tenant reimbursements for real estate taxes, insurance, common area or other operating expenses.

4)

Average net effective annual base rent per leased square foot represents (a) the contractual base rent for leases in place as of September 30, 2014, calculated on a straight-line basis to amortize free rent periods and

abatements, but without regard to tenant improvement allowances and leasing commissions, divided by (b) square footage under commenced leases as of September 30, 2014.

5)

As of September 30, 2014, the Company occupied 16,151 square feet at this property at an annualized base rent of $446,172 or $29.40per leased square foot, which amounts are reflected in the % leased, annualized base rent

and annualized base rent per square foot columns in the table above. The rent paid by us is eliminated from our revenues in consolidation. In addition, effective March 1, 2013, the Company sublease approximately 5,000

square feet of space from a tenant at this property.

6)

This property is subject to a triple net lease pursuant to which the tenant pays operating expenses, insurance and real estate taxes.

7)

Includes square footage and annualized base rent pursuant to leases for space occupied by us.

8)

As of September 30, 2014, the Company occupied 8,995 square feet at this property at an annualized base rent of $287,300, or $31.94 per leased square foot, which amounts are reflected in the % leased, annualized base rent

and annualized base rent per square foot columns in the table above. The rent paid by us is eliminated from our revenues in consolidation.

9)

Includes $31,200 of annualized base rent pursuant to a rooftop lease.

10)

Reflects square footage and annualized base rent pursuant to leases for space occupied by AHH.

11)

For this ground lease, the Company own the land and the tenant owns the improvements thereto.  The Company will succeed to the ownership of the improvements to the land upon the termination of the ground lease.

12)

The Company lease the land underlying this property from the owner of the land pursuant to a ground lease. The Company re-lease the land to our tenant under a separate ground lease pursuant to which our tenant owns the

improvements on the land.

13)

Tenants collectively lease approximately 139,356 square feet of land from us pursuant to ground leases.

14)

Tenants collectively lease approximately 299,170 square feet of land from us pursuant to ground leases.

15)

Tenants collectively lease approximately 105,988 square feet of land from us pursuant to ground leases.

16)

Tenants collectively lease approximately 1,443,985 square feet of land from us pursuant to ground leases.

17)

Tenant leases approximately 200,073 square feet of land from us pursuant to a ground lease.

18)

The total square footage of our retail portfolio excludes the square footage of land subject to ground leases.

19)

Units represent the total number of apartment units available for rent at September 30, 2014.

20)

For the properties in our multifamily portfolio, annualized base rent is calculated by multiplying (a) base rental payments for the month ended September 30, 2014 by (b) 12.

21)

Average monthly base rent per leased unit represents the average monthly rent for all leased units for the month ended September 30, 2014.

22)

The Company lease the land underlying this property from the owner of the land pursuant to a ground lease.

23)

The annualized base rent for The Cosmopolitan includes $898,000 of annualized rent from 15 retail leases at the property.

24)

As of September 30, 2014, The Company occupied 2,908 square feet at this property at an annualized base rent of $12,000, or $4.13 per leased square foot, which amounts are reflected in the % leased, annualized base rent

and annualized base rent per square foot columns in the table above. The rent paid by us and is eliminated from our revenues in consolidation.  

Development Pipeline

18

$ in thousands

(1)  Represents estimates that may change as the development process proceeds

(2) Originally a development pipeline project; now anticipate selling the first building to a third party upon completion

(3) AHH earns a preferred return on equity prior to any distributions to JV partners

(4)  This property is located within the Virginia Beach Town Center

(5)  Approximately 83,000 square feet is leased to Clark Nexsen, an architectural firm and  

       approximately 23,000 square feet is leased to the Development Authority of Virginia Beach

Schedule

Development, Not Delivered

Location

Estimated

(1)

Estimated

Cost

(1)

Cost Incurred

through

9/30/2014

Start

Initial

Occupancy

Stabilized

Operation

AHH

Ownership %

Property Type

%leased

Anchor Tenants

Oceaneering

Chesapeake, VA

155,000 sf

$26,000

$16,000

4Q13

1Q15

1Q15

100%

Office

100%

Oceaneering

Sandbridge Commons

Virginia Beach, VA

70,000 sf

13,000

8,000

4Q13

1Q15

4Q15

100%

Retail

66%

Harris Teeter

Brooks Crossing

(2)

Newport News, VA

Commonwealth of VA -

Chesapeake

Chesapeake, VA

36,000 sf

7,000

4,000

2Q14

1Q15

1Q15

100%

Office

100%

Commonwealth of Virginia

Commonwealth of VA. -

Virginia Beach

Virginia Beach, VA

11,000 sf

3,000

2,000

2Q14

1Q15

100%

Office

100%

Commonwealth of Virginia

Lightfoot Marketplace

Williamsburg, VA

88,000 sf

24,000

9,000

3Q14

1Q16

2Q17

60%

(3)

Retail

60%

Harris Teeter

73,000

39,000

Schedule

Development, Delivered Not Stabilized

Location

Estimated

(1)

Estimated

Cost

(1)

Cost Incurred

through

9/30/2014

Start

Initial

Occupancy

Stabilized

Operation

AHH

Ownership %

(1)

Property Type

%leased

Anchor Tenants

4525 Main Street

(4)

Virginia Beach, VA

239,000 sf

(3)

$50,000

$40,000

1Q13

3Q14

1Q16

100%

Office

56%

(5)

Clark Nexsen, Development Authority

of Virginia Beach,

Anthropologie

Greentree Shopping Center

Chesapeake, VA

18,000 sf

6,000

5,000

4Q13

3Q14

3Q15

100%

Retail

40%

Wawa

Encore Apartments

(4)

Virginia Beach, VA

286 units

34,000

28,000

1Q13

3Q14

4Q15

100%

Multifamily

NA

NA

Whetstone Apartments

Durham, NC

203 units

28,000

25,000

2Q13

3Q14

4Q15

100%

Multifamily

NA

NA

118,000

98,000

Schedule

Re-Development

Location

Estimated

(1)

Estimated

Cost

(1)

Cost Incurred

through

9/30/2014

Start

Complete

(1)

Property Type

%leased

Anchor Tenants

Dick's at Town Center

Virginia Beach, VA

20,000 sf

$2,000

$1,000

1Q14

4Q14

Retail

100%

USI

Total

$193,000

$138,000

1Q15

Acquisitions & Dispositions

19

$ in thousands

(1) Dimmock Square purchase price includes the issuance of operating partnership

      (OP) units, based upon a negotiated value of $9.75 per OP unit

Acquisitions

Location

Approximately

Negotiated

Purchase Price

Purchased

Date

AHH

Ownership %

Property Type

%leased

Anchor Tenants

Liberty Apartments

Newport News, VA

197 units

$30,700

1Q14

100%

Multifamily

67%

NA

Dimmock Square

(1)

Colonial Heights, VA

106,166 sf

19,650

3Q14

100%

Retail

100%

Old Navy, Best Buy, Pier 1

Estimated

Pending Dispositions

Location

Approximately

Sale Price

Disposition

Date

AHH

Ownership %

Property Type

%leased

Anchor Tenants

Virginia Natural Gas

Virginia Beach, VA

31,000 sf

$8,900

4Q14

100%

Office

100%

Virginia Natural Gas

Sentara Williamsburg

Williamsburg, VA

49,200 sf

15,450

4Q14

100%

Office

100%

Sentara

Construction Business Summary

20

$ in thousands

Gross Profit Summary

Q3 2014

YTD 2014

(Unaudited)

Revenue

$31,532

$71,261

Expense

(30,468)

(67,807)

Gross Profit

$1,064

$3,454

Location

Total Contract

Value

Work in Place as

of 9/30/2014

Backlog

Estimated Date

of Completion

Projects Greater than $5.0M

Exelon

Baltimore, MD

$166,538

$22,729

$143,809

1Q 2016

Hyatt Place Baltimore / Inner Harbor Hotel

Baltimore, MD

25,592

23,564

2,028

4Q 2014

City of Suffolk Municipal Center

Suffolk, VA

25,240

22,904

2,336

2Q 2015

Sub Total

217,370

69,197

148,173

Projects Less than $5.0M

108,081

102,754

5,327

Total

$325,451

$171,951

$153,500

Operating Results & Property-

Type Segment Analysis

Same Store NOI by Segment

22

(Reconciliation to GAAP located in appendix pg. 37)

$ in thousands

Three months ended 9/30

Nine months ended 9/30

2014

2013

$ Change

% Change

2014

2013

$ Change

% Change

Office

(1)

(Unaudited)

(Unaudited)

Revenue

$6,623

$6,364

$259

4%

$19,645

$19,270

$375

2%

Expenses

2,139

2,081

58

3%

6,242

5,967

275

5%

Net Operating Income

4,484

4,283

201

5%

13,403

13,303

100

1%

Retail

(1)

Revenue

5,765

5,683

82

1%

15,625

15,299

326

2%

Expenses

1,739

1,745

(6)

0%

4,901

4,899

2

0%

Net Operating Income

4,026

3,938

88

2%

10,724

10,400

324

3%

Multifamily

(1)

Revenue

2,979

2,852

127

4%

5,752

5,684

68

1%

Expenses

1,386

1,331

55

4%

2,661

2,558

103

4%

Net Operating Income

1,593

1,521

72

5%

3,091

3,126

(35)

-1%

Same Store Net Operating Income (NOI), GAAP basis

$10,103

$9,742

$361

4%

$27,218

$26,829

$389

1%

Net effect of straight-line rents

(263)

(125)

(138)

110%

(886)

(429)

(457)

107%

Amortization of lease incentives and above (below) market rents

148

155

(7)

-5%

543

582

(39)

-7%

Same store portfolio NOI, cash basis

$9,988

$9,772

$216

2%

$26,875

$26,982

($107)

0%

Cash Basis:

Office

4,178

4,101

77

2%

12,245

12,548

(303)

-2%

Retail

4,188

4,120

68

2%

11,527

11,291

236

2%

Multifamily

1,622

1,551

71

5%

3,103

3,143

(40)

-1%

$9,988

$9,772

$216

2%

$26,875

$26,982

($107)

0%

GAAP Basis:

Office

4,484

4,283

201

5%

13,403

13,303

100

1%

Retail

4,026

3,938

88

2%

10,724

10,400

324

3%

Multifamily

1,593

1,521

72

5%

3,091

3,126

(35)

-1%

$10,103

$9,742

$361

4%

$27,218

$26,829

$389

1%

(1)  See page 36 for Same Store vs. Non - Same Store Properties

Top 10 Tenants by Annual Base Rent

23

Office Portfolio

(1)

Tenant

Number

of Leases

Number

of

Properties

Property(ies)

Lease

Expiration

Annualized

Base Rent

% of Office

Portfolio

Annualized

Base Rent

% of Total

Portfolio

Annualized

Base Rent

Williams Mullen

3

2

Armada Hoffler Tower, Richmond Tower

3/22/2026

$7,978,920

32.6%

13.9%

Sentara Medical Group

1

1

Sentara Williamsburg

3/31/2023

1,006,140

4.1%

1.8%

Cherry Bekaert

3

3

Armada Hoffler Tower, Richmond Tower, Oyster Point

1/31/2025

949,713

3.9%

1.7%

GSA

1

1

Oyster Point

4/26/2017

856,448

3.5%

1.5%

Troutman Sanders

1

1

Armada Hoffler Tower

1/31/2025

805,605

3.3%

1.4%

The Art Institute

1

1

Two Columbus

12/31/2019

787,226

3.2%

1.4%

Pender & Coward

2

1

Armada Hoffler Tower

1/31/2030

781,536

3.2%

1.4%

Hampton University

2

1

Two Columbus

2/28/2023

745,650

3.0%

1.3%

Kimley Horn

1

1

Armada Hoffler Tower

12/31/2018

682,162

2.8%

1.2%

Hankins & Anderson

1

1

Armada Hoffler Tower

4/30/2022

572,601

2.3%

1.0%

Top 10 Total

$15,166,001

61.9%

26.4%

Retail Portfolio

Tenant

Number

of Leases

Number

of

Properties

Property(ies)

Lease

Expiration

Annualized

Base Rent

% of Retail

Portfolio

Annualized

Base Rent

% of Total

Portfolio

Annualized

Base Rent

Home Depot

2

2

Broad Creek Shopping Center, North Point Center

12/3/2019

$2,189,900

9.7%

3.8%

Harris Teeter

2

2

Tyre Neck Harris Teeter, Hanbury Village

10/16/2028

1,430,532

6.4%

2.5%

Food Lion

3

3

Broad Creek Shopping Center, Bermuda Crossroads,

Gainsborough Square

3/19/2020

1,282,568

5.7%

2.2%

Dick's Sporting Goods

1

1

Dick's at Town Center

1/31/2020

798,000

3.5%

1.4%

Regal Cinemas

1

1

Harrisonburg Regal

4/23/2019

683,550

3.0%

1.2%

PetsMart

2

2

Broad Creek Shopping Center, North Point Center

7/21/2018

618,704

2.8%

1.1%

Kroger

1

1

North Point Center

8/31/2018

552,864

2.5%

1.0%

Yard House

1

1

Commerce Street Retail

11/30/2023

538,000

2.4%

0.9%

Rite Aid

2

2

Gainsborough Square, Parkway Marketplace

5/29/2019

484,193

2.2%

0.8%

Walgreens

1

1

Hanbury Village

12/31/2083

447,564

2.0%

0.8%

Top 10 Total

$8,868,044

40.1%

15.7%

As of September 30, 2014

(1)  Virginia Beach Development Authority (~$0.65M ABR) and Clark Nexen (~$2.3M ABR) would be included in the Office Portfolio top

ten tenants based on ABR if 4525 Main Street were stabilized

Office Lease Summary

24

Renewal Lease Summary

(1)

GAAP

Cash

Quarter

Number of

Leases

Signed

Net rentable

SF Signed

Leases

Expiring

Net rentable

SF Expiring

Contractual

Rent per SF

Prior Rent

per SF

Annual

Change in

Rent per SF

Contractual

Rent per SF

Prior Rent

per SF

Annual Change

in Rent per SF

Weighted

Average Lease

Term

TI, LC, &

Incentives

TI, LC, &

Incentives

per SF

3rd Quarter 2014

3

6,859

2

6,082

$18.50

$19.63

($1.13)

$18.48

$19.85

($1.36)

2.62

$68,913

$10.05

2nd Quarter 2014

2

18,824

1

8,452

25.12

24.33

0.79

25.37

27.55

(2.18)

7.75

204,718

10.88

1st Quarter 2014

1

25,506

2

5,430

32.28

26.66

5.63

29.95

29.25

0.70

10.00

1,315,127

51.56

4th Quarter 2013

5

45,677

4

5,112

26.74

25.27

1.47

23.58

27.97

(4.39)

11.34

1,927,309

42.19

New Lease Summary

(1)

Quarter

Number of

Leases

Signed

Net rentable

SF Signed

Contractual

Rent per SF

Weighted

Average

Lease Term

TI, LC, &

Incentives

TI, LC, &

Incentives

per SF

3rd Quarter 2014

2

2,853

$22.65

2.56

$55,892

$19.59

2nd Quarter 2014

4

6,948

20.18

4.28

190,255

27.38

1st Quarter 2014

2

5,430

24.12

1.00

5,239

0.96

4th Quarter 2013

4

18,381

23.56

10.34

577,382

31.41

(1) Excludes leases for space occupied by AHH.

Office Lease Expirations

25

Year of Lease Expiration

Number of

Leases

Expiring

Square

Footage of

Leases

Expiring

% Portfolio

Net Rentable

Square Feet

Annualized

Base Rent

% of Portfolio

Annualized

Base Rent

Annualized Base

Rent per Leased

Square Foot

Available

-

47,329

5.0%

$0

-    

$0.00

Signed Leases not Commenced

1

2,220

0.2%

0

-

0.00

2014

3

5,726

0.6%

133,021

0.5%

23.23

2015

14

38,743

4.1%

862,230

3.5%

22.26

2016

11

34,258

3.6%

819,850

3.3%

23.93

2017

5

64,492

6.8%

1,564,421

6.4%

24.26

2018

17

157,665

16.6%

4,276,094

17.5%

27.12

2019

10

95,977

10.1%

2,266,218

9.3%

23.61

2020

3

25,283

2.7%

793,496

3.2%

31.38

2021

4

41,363

4.4%

973,852

4.0%

23.54

2022

3

48,117

5.1%

1,275,784

5.2%

26.51

2023

4

115,889

12.2%

2,432,759

9.9%

20.99

Thereafter

9

272,727

28.7%

9,083,408

37.1%

33.31

Total / Weighted Average

84

949,789

100.0%

24,481,134

$

100.0%

$27.19

Retail Lease Summary

26

Renewal Lease Summary

(1)

GAAP

Cash

Quarter

Number of

Leases

Signed

Net rentable

SF Signed

Leases

Expiring

Net

rentable SF

Expiring

Contractual

Rent per SF

Prior Rent

per SF

Annual Change

in Rent per SF

Contractual

Rent per SF

Prior Rent

per SF

Annual Change

in Rent per SF

Weighted

Average Lease

Term

TI, LC, &

Incentives

TI, LC, &

Incentives

per SF

3rd Quarter 2014

6

26,900

3

6,012

$17.64

$16.19

$1.45

$17.76

$16.98

$0.78

5.11

$44,109

$1.64

2nd Quarter 2014

6

12,916

2

3,842

20.47

19.66

0.81

20.20

20.65

(0.46)

1.87

5,730

0.44

1st Quarter 2014

5

23,857

3

6,540

20.84

20.41

0.43

21.18

21.82

(0.64)

4.55

63,339

2.65

4th Quarter 2013

7

37,733

6

7,928

13.82

13.49

0.33

13.79

14.12

(0.33)

4.70

40,540

1.07

New Lease Summary

(1)

Quarter

Number of

Leases

Signed

Net rentable

SF Signed

Contractual

Rent per SF

Weighted

Average

Lease Term

TI, LC, &

Incentives

TI, LC, &

Incentives

per SF

3rd Quarter 2014

7

35,574

$20.30

6.83

$522,738

$14.69

2nd Quarter 2014

4

10,574

25.73

7.78

1,071,485

101.33

1st Quarter 2014

1

3,160

16.25

10.50

126,558

40.05

4th Quarter 2013

2

3,270

18.67

5.06

75,884

23.21

(1)

(2)Tenant improvements and leasing commission expenses do not include the redevelopment activities at Dick’s at Town Center

Excludes leases from space occupied by AHH

Retail Lease Expiration

27

Year of Lease Expiration

Number of

Leases

Expiring

Square

Footage of

Leases

Expiring

% Portfolio

Net Rentable

Square Feet

Annualized

Base Rent

% of Portfolio

Annualized

Base Rent

Annualized Base

Rent per Leased

Square Foot

Available

-

42,535

3.5%

$0

-    

$0.00

Signed Leases not Commenced

3

21,330

1.8%

-

-

-

2014

6

8,519

0.7%

176,716

0.9%

20.74

2015

18

63,739

5.3%

1,374,619

7.2%

21.57

2016

23

73,259

6.1%

1,651,561

8.6%

22.54

2017

24

148,963

12.4%

2,127,465

11.1%

14.28

2018

23

136,687

11.4%

2,040,950

10.7%

14.93

2019

24

326,041

27.2%

4,759,462

24.9%

14.60

2020

12

184,586

15.4%

2,408,800

12.6%

13.05

2021

5

25,204

2.1%

740,832

3.9%

29.39

2022

6

83,588

7.0%

1,215,718

6.4%

14.54

2023

5

30,125

2.5%

922,055

4.8%

30.61

Thereafter

10

53,631

4.5%

1,683,782

8.8%

31.40

Total / Weighted Average

159

1,198,207

100.0%

19,101,961

$

100.0%

$16.84

Historical Occupancy

28

(1) Office and retail occupancy based on occupied square feet as a % of respective total

(2) Multifamily occupancy based on occupied units as a % of respective total

(3) Total occupancy weighted by annualized base rent

Occupancy -

All Properties

as of

Sector

9/30/2014

6/30/2014

3/31/2014

12/31/2013

9/30/2013

Office

(1)

94.8%

95.3%

95.4%

95.2%

93.4%

Retail

(1)

94.7%

93.5%

93.4%

93.4%

93.6%

Multifamily

(2)

96.6%

94.9%

94.2%

94.2%

92.7%

Weighted Average

(3)

95.1%

94.6%

94.5%

94.4%

93.3%

(1) Total units occupied  as of each respective dat

(2) Annualized base rent is calculated by multiplying (a) contractual rent due from our tenants for the last month of the respective quarter by (b) 12

(3) Average Monthly Rent per Occupied Unit is calculated as (a) annualized base rent divided by (b) the number of occupied units as of the  end of the respective date. 

(4) Excludes annualized base rent from retail leases

Multifamily Occupancy

29

Occupancy Summary - Smiths Landing (284 available units)

Quarter Ended

Number of Units

Occupied

Percentage

Occupied

(1)

Annualized Base

Rent

(2)

Average Monthly Rent

per Occupied Unit

9/30/2014

274

96.5%

$3,379,428

$1,028

6/30/2014

273

96.1%

3,321,096

1,014

3/31/2014

283

99.6%

3,430,260

1,010

12/31/2013

282

99.3%

3,382,380

1,000

9/30/2013

284

100.0%

3,427,980

1,006

Occupancy Summary - The Cosmopolitan (342 available units)

Quarter Ended

Number of Units

Occupied

Percentage

Occupied

(1)

Annualized Base

Rent

(2)(4)

Average Monthly Rent

per Occupied Unit

(3)

9/30/2014

331

96.8%

$6,218,892

$1,566

6/30/2014

321

93.9%

6,042,132

1,569

3/31/2014

307

89.8%

5,799,564

1,574

12/31/2013

308

90.1%

5,721,144

1,548

9/30/2013

296

86.5%

5,506,764

1,550

30

Components of NAV

Stabilized Portfolio

NOI x Market Cap Rate = Stabilized Portfolio Value

Investment in Unstabilized Development Pipeline

Stabilized Development Pipeline

NOI x Market Cap Rate = Stabilized Development Portfolio Value

Annualized General Contracting and Real Estate Services x Appropriate Multiple = TRS Value

Other Assets

Liabilities

NAV

Net Asset Value Component Data

31

$ in thousands

(1) Includes leases for space occupied by Armada Hoffler which are eliminated for GAAP purposes

(2) Completed Not Stabilized properties are presented in our Consolidated Balance Sheet as Income Producing Property

Stabilized Portfolio NOI (Cash)

Other Assets

Three months

ended

Annualized

As of 9/30/2014

9/30/2014

9/30/2014

Other Assets

Diversified Portfolio

Cash and Cash Equivalents

$17,101

Office

$2,101

$8,404

Restricted Cash

4,425

Retail

3,232

12,928

Accounts Receivable

20,307

Multifamily

562

2,248

Construction receivables, including retentions

15,285

Total Diversified Portfolio NOI

$5,895

$23,580

Other Assets

32,449

Total Other Assets

$89,567

Virginia Beach Town Center

Office

(1)

$2,220

$8,880

Liabilities & Share Count

Retail

(1)

1,230

4,920

As of 9/30/2014

Multifamily

1,060

4,240

Liabilities

Total Virginia Beach Town Center NOI

$4,510

$18,040

Mortgages and notes payable

$335,792

Accounts payable and accrued liabilities

7,569

Stabilized Portfolio NOI (Cash)

$10,405

$41,620

Construction payables, including retentions

39,820

Other Liabilities

21,399

Development Pipeline

Total Liabilities

$404,580

9/30/2014

Construction in Progress:  (pg. 9  balance sheet)

$93,946

Three months

ended

Development Pipeline Completed Not Stabilized at Cost

(2)

73,101

Share Count

9/30/2014

Weighted Average Common Shares Outstanding

20,266

Taxable REIT Subsidiary (TRS)

Weighted Average Operating Partnership ("OP") Units Outstanding

14,291

Outlook

Total Weighted Average Common shares and OP units outstanding

34,557

9/30/2014

$4,600

Annualized General Contracting and Real Estate Services per

Company September 30, 2014 parameters (pg. 7)

Appendix –

Definitions & Reconciliations

Definitions

Net Operating Income:

We calculate Net Operating Income (“NOI”) as property revenues (base rent, expense reimbursements and other

revenue)

less

property

expenses

(rental

expenses

and

real

estate

taxes).

For

our

office,

retail

and

multifamily

segments, NOI excludes general contracting and real estate services expenses, depreciation and amortization, general

and

administrative

expenses,

and

impairment

charges.

Other

REITs

may

use

different

methodologies

for

calculating

NOI,

and

accordingly,

our

NOI

may

not

be

comparable

to

such

other

REITs’

NOI.

NOI

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.  We consider NOI to be an appropriate supplemental measure to net income because it assists both investors

and management in understanding the core operations of our real estate business. (Reconciliation to GAAP located in

appendix pg. 37)

Funds From Operations:

We calculate Funds From Operations (“FFO”) in accordance with the standards established by the National Association

of Real Estate Investment Trusts (“NAREIT”). NAREIT defines FFO as net income (loss) (calculated in accordance with

accounting principles generally accepted in the United States (“GAAP”)), excluding gains (or losses) from sales of

depreciable

operating

property,

real

estate

related

depreciation

and

amortization

(excluding

amortization

of

deferred

financing costs) and after adjustments for unconsolidated partnerships and joint ventures.

FFO is a supplemental non-GAAP financial measure. Management uses FFO as a supplemental performance measure

because it believes that FFO is beneficial to investors as a starting point in measuring our operational performance.

Specifically, in excluding real estate related depreciation and amortization and gains and losses from property

dispositions, which do not relate to or are not indicative of operating performance, FFO provides a performance

measure that, when compared year over year, captures trends in occupancy rates, rental rates and operating costs. 

Other equity REITs may not calculate FFO in accordance with the NAREIT definition as we do, and, accordingly, our FFO

may not be comparable to such other REITs’

FFO.

33

Definitions

34

Core Funds From Operations:

Adjusted Funds From Operations:

We calculate Core Funds From Operations ("Core FFO") as FFO calculated in accordance with the standards

established by NAREIT, adjusted for losses on debt extinguishments, non-cash stock compensation and

impairment charges.  Such items are non-recurring or non-cash in nature.  Our calculation of Core FFO also

excludes acquisition costs and the impact of development pipeline projects that are still in lease-up. We

generally consider a property to be in lease-up until the earlier of (i) the quarter after which the property

reaches 80% occupancy or (ii) the thirteenth quarter after the property receives its certificate of occupancy.

Management

believes

that

the

computation

of

FFO

in

accordance

to

NAREIT’s

definition

includes

certain

items

that are not indicative of the results provided by the Company’s operating portfolio and affect the comparability

of the Company’s period-over-period performance.  Our calculation of Core FFO differs from NAREIT's definition

of FFO.  Other equity REITs may not calculate Core FFO in the same manner as us, and, accordingly, our Core

FFO may not be comparable to other REITs' Core FFO.

We calculate Adjusted Funds From Operations (“AFFO”) as Core FFO, (i) excluding the impact of tenant

improvement and leasing commission costs, capital expenditures, the amortization of deferred financing fees,

derivative (income) loss, the net effect of straight-line rents and the amortization of lease incentives and net

above (below) market rents and (ii) adding back the impact of development pipeline projects that are still in

lease-up and government development grants that are not included in FFO.

Management believes that AFFO provides useful supplemental information to investors regarding our operating

performance as it provides a consistent comparison of our operating performance across time periods and allows

investors to more easily compare our operating results with other REITs. However, other REITs may use different

methodologies for calculating AFFO or similarly entitled FFO measures and, accordingly, our AFFO may not

always be comparable to AFFO or other similarly entitled FFO measures of other REITs.

Definitions

EBITDA:

We calculate EBITDA as net income (loss) (calculated in accordance with GAAP), excluding interest expense, income

taxes and depreciation and amortization. Management believes EBITDA is useful to investors in evaluating and

facilitating comparisons of our operating performance between periods and between REITs by removing the impact of

our capital structure (primarily interest expense) and asset base (primarily depreciation and amortization) from our

operating results.

Core EBITDA:

We calculate Core EBITDA as EBITDA, excluding certain items, including, but not limited to, non-recurring or

extraordinary gains (losses), early extinguishment of debt, derivative (income) losses, acquisition costs and the impact

of development pipeline projects that are still in lease-up. We generally consider a property to be in lease-up until the

earlier of (i) the quarter after which the property reaches 80% occupancy or (ii) the thirteenth quarter after the

property receives its certificate of occupancy. Management believes that Core EBITDA provides useful supplemental

information to investors regarding our ongoing operating performance as it provides a consistent comparison of our

operating performance across time periods and allows investors to more easily compare our operating results with other

REITs. However, other REITs may use different methodologies for calculating Core EBITDA or similarly entitled measures

and, accordingly, our Core EBITDA may not always be comparable to Core EBITDA or other similarly entitled measures

of other REITs.

Core Debt:

We calculate Core Debt as our total debt, excluding any construction loans associated with our development pipeline.

Same Store Portfolio:

We define same store properties as including those properties that were owned and operated for the entirety of the

period being presented and excluding properties that were in lease-up during the period present.  We generally

consider

a

property

to

be

in

lease-up

until

the

earlier

of

(i)

the

quarter

after

which

the

property

reaches

80%

occupancy

or (ii) the thirteenth quarter after the property receives its certificate of occupancy.  The following table shows the

properties included in the same store and non-same store portfolio for the comparative periods presented.

35

Same Store vs. Non-Same Store Properties

36

Same Store

Non-Same Store

Same Store

Non-Same Store

Office Properties

Armada Hoffler Tower

X

X

One Columbus

X

X

Two Columbus

X

X

Virginia Natural Gas

X

X

Richmond Tower

X

X

Oyster Point

X

X

Sentara Williamsburg

X

X

4525 Main Street

X

X

Retail Properties

Bermuda Crossroads

X

X

Broad Creek Shopping Center

X

X

Courthouse 7-Eleven

X

X

Dimmock Square

X

X

Gainsborough Square

X

X

Hanbury Village

X

X

North Point Center

X

X

Parkway Marketplace

X

X

Harrisonburg Regal

X

X

Dick’s at Town Center

X

X

249 Central Park Retail

X

X

Studio 56 Retail

X

X

Commerce Street Retail

X

X

Fountain Plaza Retail

X

X

South Retail

X

X

Tyre Neck Harris Teeter

X

X

Greentree Shopping Center

X

X

Multifamily Properties

Encore Apartments

X

X

Smith’s Landing

X

X

The Cosmopolitan

X

X

Liberty Apartments

X

X

Whetstone Apartments

X

X

Comparison of Nine Months Ended   

September 30, 2014 to 2013

Comparison of Three Months Ended  

September 30, 2014 to 2013

Reconciliation to GAAP -

Segment Portfolio NOI

37

$ in thousands

Three months ended 9/30

Nine months ended 9/30

2014

2013

2014

2013

Office Same Store

(1)

Rental revenues

$6,623

$6,364

$19,645

$19,270

Property expenses

2,139

2,081

6,242

5,967

NOI

4,484

4,283

13,403

13,303

Non-Same Store NOI

460

-

507

-

Segment NOI

$4,944

$4,283

$13,910

$13,303

Retail Same Store

(1)

Rental revenues

$5,765

$5,683

$15,625

$15,299

Property expenses

1,739

1,745

4,901

4,899

NOI

4,026

3,938

10,724

10,400

Non-Same Store NOI

265

-

1,525

617

Segment NOI

$4,291

$3,938

$12,249

$11,017

Multifamily Same Store

(1)

Rental revenues

$2,979

$2,852

$5,752

$5,684

Property expenses

1,386

1,331

2,661

2,558

NOI

1,593

1,521

3,091

3,126

Non-Same Store NOI

(9)

-

1,514

837

Segment NOI

1,584

1,521

$4,605

$3,963

Total Segment Portfolio NOI

$10,819

$9,742

$30,764

$28,283

(1)  See page 36 for Same Store vs. Non-Same Store Properties

Reconciliation to GAAP -

Segment Portfolio NOI

38

$ in thousands

Three months ended 9/30/2014

Diversified Portfolio

Office

Retail

Multifamily

Total

Cash NOI

$2,101

$3,232

$562

$5,895

Net effect of straight-line rents

190

(96)

(11)

83

Amortization of lease incentives and (above) below market rents

(16)

44

(13)

15

GAAP NOI

$2,275

$3,180

$538

$5,993

Town Center of Virginia Beach

Office

Retail

Multifamily

Total

Cash NOI

$2,220

$1,230

$1,060

$4,510

Net effect of straight-line rents

157

28

(4)

181

Amortization of lease incentives and (above) below market rents

(26)

(132)

-

(158)

Elimination of AHH rent

(142)

(76)

-

(218)

GAAP NOI

$2,209

$1,050

$1,056

$4,315

GAAP NOI

Office

Retail

Multifamily

Total

Diversified Portfolio

$2,275

$3,180

$538

$5,993

Town Center of Virginia Beach

2,209

1,050

1,056

4,315

Unstabilized Properties

460

61

(10)

511

Total Segment Portfolio GAAP NOI

$4,944

$4,291

$1,584

$10,819

Reconciliation to GAAP -

Segment Portfolio NOI

$ in thousands

39

Office

Retail

Multifamily

Total Rental

Properties

General Contracting &

Real Estate Services

Total

Segment revenues

7,295

$                  

6,086

$                  

3,332

$                  

16,713

$               

31,532

$                           

48,245

$               

Segment expenses

2,351

1,795

1,748

5,894

30,468

36,362

Net operating income

4,944

$                  

4,291

$                  

1,584

$                  

10,819

$               

1,064

$                             

11,883

$               

Depreciation and amortization

(4,567)

General and administrative expenses

(1,741)

Acquisition, development and other pursuit costs

(174)

Impairment charges

(15)

Interest expense

(2,734)

Other income

59

Income tax benefit

43

Net income

2,754

$                  

Office

Retail

Multifamily

Total Rental

Properties

General Contracting &

Real Estate Services

Total

Segment revenues

20,363

$               

17,559

$               

9,303

$                  

47,225

$               

71,261

$                           

118,486

$             

Segment expenses

6,453

5,310

4,698

16,461

67,807

84,268

Net operating income

13,910

$               

12,249

$               

4,605

$                  

30,764

$               

3,454

$                             

34,218

$               

Depreciation and amortization

(12,593)

General and administrative expenses

(5,768)

Acquisition, development and other pursuit costs

(174)

Impairment charges

(15)

Interest expense

(7,977)

Other loss

(23)

Income tax provision

(135)

Net income

7,533

$                  

Three months ended 9/30/2014

Nine months ended 9/30/2014