UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 FORM 10-K

☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 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)

_________________________________________________________________

Maryland				46-1214914
(State or other jurisdiction of incorporation or organization)				(I.R.S. 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

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

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value per share	AHH	New York Stock Exchange
6.75% Series A Cumulative Redeemable Perpetual Preferred Stock, $0.01 par value per share	AHHPrA	New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

_________________________________________________________________

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  x No  ◻

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act.    Yes  ◻    No  x

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  x   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  x    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 the 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	x	Accelerated filer	☐
Non-accelerated filer	☐	Smaller 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 has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. x

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ¨

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    Yes  ☐    No x

As of June 30, 2022, the last business day of the registrant’s most recently completed second fiscal quarter, the aggregate market value of the registrant’s common stock held by non-affiliates of the registrant was approximately $855.1 million, based on the closing sales price of $12.84 per share as reported on the New York Stock Exchange. (For purposes of this calculation all of the registrant’s directors and executive officers are deemed affiliates of the registrant.)

As of February 17, 2023, the registrant had 67,713,787 shares of common stock outstanding. In addition, as of February 17, 2023, Armada Hoffler, L.P., the registrant's operating partnership subsidiary (the "Operating Partnership"), had 20,611,190 common units of limited partnership interest ("OP Units") outstanding (other than OP Units held by the registrant). Based on the 67,713,787 shares of common stock and 20,611,190 OP Units held by limited partners other than the registrant, the registrant had a total common equity market capitalization of $1,187,970,941 as of February 17, 2023 (based on the closing sales price of $13.45 on the New York Stock Exchange on such date).

Documents Incorporated by Reference

Portions of the registrant’s Definitive Proxy Statement relating to its 2023 Annual Meeting of Stockholders are incorporated by reference into Part III of this report. The registrant expects to file its Definitive Proxy Statement with the Securities and Exchange Commission within 120 days after December 31, 2022.  

Armada Hoffler Properties, Inc.

Form 10-K

For the Fiscal Year Ended December 31, 2022

Table of Contents

PART I
Item 1.	Business.	1
Item 1A.	Risk Factors.	15
Item 1B.	Unresolved Staff Comments.	40
Item 2.	Properties.	40
Item 3.	Legal Proceedings.	40
Item 4.	Mine Safety Disclosures.	40
PART II
Item 5.	Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.	41
Item 6.	[Reserved].	42
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	42
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk.	60
Item 8.	Financial Statements and Supplementary Data.	60
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.	60
Item 9A.	Controls and Procedures.	60
Item 9B.	Other Information.	61
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.	61
PART III
Item 10.	Directors, Executive Officers and Corporate Governance.	62
Item 11.	Executive Compensation.	62
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.	62
Item 13.	Certain Relationships and Related Transactions, and Director Independence.	62
Item 14.	Principal Accountant Fees and Services.	62
PART IV
Item 15.	Exhibits and Financial Statement Schedules.	63
Item 16.	Form 10-K Summary.	63
Index to Exhibits		64
Signatures		66

i

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

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

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

•adverse economic or real estate developments, either nationally or in the markets in which our properties are located;

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

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

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

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

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

•our ability to commence or continue construction and development projects on the timeframes and terms currently anticipated;

•our failure to successfully operate developed and acquired properties;

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

•fluctuations in interest rates;

•the impact of inflation, including increases in operating costs

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

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

•financial market fluctuations;

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

•the competitive environment in which we operate;

ii

•decreased rental rates or increased vacancy rates;

•conflicts of interests with our officers and directors;

•lack or insufficient amounts of insurance;

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

•other factors affecting the real estate industry generally;

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

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

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

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

While forward-looking statements reflect our good faith beliefs, they are not guarantees of future performance. We caution investors not to place undue reliance on these forward-looking statements. For a further discussion of these and other factors that could impact our future results, performance, or transactions, see the factors discussed in Item 1A. Risk Factors and Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations herein and in other documents that we file from time to time with the Securities and Exchange Commission (the "SEC").

Summary Risk Factors

Our business is subject to a number of risks, including risks that may prevent us from achieving our business objectives or may adversely affect our business, financial condition, results of operations, cash flows and prospects. These summary risks provide an overview of many of the risks we are exposed to in the normal course of our business and are discussed more fully in Item 1A. Risk Factors herein. These risks include, but are not limited to, the following:

•Adverse economic and geopolitical conditions and dislocations in the credit markets, including as a result of the novel coronavirus ("COVID-19"), could have a material adverse effect on our financial condition, results of operations, cash flow, cash available for distribution, and ability to service our debt obligations.

•Our failure to establish new development relationships with public partners and expand our development relationships with existing public partners could have a material adverse effect on our results of operations, cash flow, and growth prospects.

•We may be unable to identify and complete development opportunities and acquisitions of properties that meet our investment criteria, which may materially and adversely affect our results of operations, cash flow, and growth prospects.

•Our real estate development activities are subject to risks particular to development, such as unanticipated expenses, delays, and other contingencies, any of which could materially and adversely affect our financial condition, results of operations, and cash flow.

•The geographic concentration of our portfolio could cause us to be more susceptible to adverse economic or regulatory developments in the markets in which our properties are located than if we owned a more geographically diverse portfolio.

•We have a substantial amount of indebtedness outstanding, which may expose us to the risk of default under our debt obligations and may include covenants that restrict our ability to pay distributions to our stockholders.

•Failure to maintain our current credit rating could adversely affect our cost of funds, related margins, liquidity, and access to the debt capital markets.

iii

•Increases in interest rates, or failure to hedge effectively against interest rate changes, will increase our interest expense and may adversely affect our financial condition, results of operations, cash flow, cash available for distribution, and ability to service our debt obligations.

•Our growth depends on external sources of capital that are outside of our control and may not be available to us on commercially reasonable terms or at all, which could limit our ability to, among other things, meet our capital and operating needs or make the cash distributions to our stockholders necessary to maintain our qualification as a REIT.

•We may be unable to renew leases, lease vacant space, or re-lease space on favorable terms or at all as leases expire, which could materially and adversely affect our financial condition, results of operations, cash flow, cash available for distribution, and ability to service our debt obligations.

•The short-term leases in our multifamily portfolio expose us to the effects of declining market rents, which could adversely affect our results of operations, cash flow, and cash available for distribution.

•Mezzanine loans and similar loan investments are subject to significant risks, and losses related to these investments could have a material adverse effect on our financial condition and results of operations.

•Most of our costs, such as operating and general and administrative expenses, interest expense, and real estate acquisition and construction costs, are subject to inflation.

•Adverse economic and regulatory conditions, particularly in the Mid-Atlantic region, could adversely affect our construction and development business, which could have a material adverse effect on our financial condition, results of operations, cash flow, cash available for distribution, and ability to service our debt obligations.

•There can be no assurance that all of the projects for which our construction business is engaged as general contractor will be commenced or completed in their entirety in accordance with the anticipated cost or that we will achieve the financial results we expect from the construction of such properties.

•There can be no assurance that we will be able to realize the business objectives of our real estate investments through disposition or refinancing of such at attractive prices or within certain time periods, and any related illiquidity of our real estate investments could significantly impede our ability to respond to adverse changes in the performance of our properties and harm our financial condition.

•Daniel Hoffler and his affiliates own, directly or indirectly, a substantial beneficial interest in our company on a fully diluted basis and have the ability to exercise significant influence on our company and our Operating Partnership, including the approval of significant corporate transactions.

•Our charter contains certain provisions restricting the ownership and transfer of our stock that may delay, defer, or prevent a change of control transaction that might involve a premium price for our common stock or that our stockholders otherwise believe to be in their best interests.

•Failure to maintain our qualification as a REIT would cause us to be taxed as a regular corporation, which would substantially reduce funds available for distribution to our stockholders.

•We may be unable to make distributions at expected levels, which could result in a decrease in the market price of our common stock and our 6.75% Series A Cumulative Redeemable Perpetual Preferred Stock, $0.01 par value per share (“Series A Preferred Stock”).

iv

PART I

Item 1.    Business. 

Our Company

References to "we," "our," "us," and "our company" refer to Armada Hoffler Properties, Inc., a Maryland corporation, together with our consolidated subsidiaries, including Armada Hoffler, L.P., a Virginia limited partnership (the "Operating Partnership"), of which we are the sole general partner.

We are a full-service real estate company with extensive experience developing, building, owning, and managing high-quality, institutional-grade office, retail, and multifamily properties in attractive markets primarily throughout the Mid-Atlantic and Southeastern United States. In addition to the ownership of our operating property portfolio, we develop and build properties for our own account and through joint ventures between us and unaffiliated partners and also invest in development projects through mezzanine lending and preferred equity arrangements. We also provide general contracting services to third parties. Our construction and development experience includes mid- and high-rise office buildings, retail strip malls, retail power centers, multifamily apartment communities, hotels and conference centers, single- and multi-tenant industrial, distribution, and manufacturing facilities, educational, medical and special purpose facilities, government projects, parking garages, and mixed-use town centers. Our most recent third-party construction contracts have included the mixed-use project The Interlock in Atlanta, Georgia, Boulder Lake Apartments in Chesterfield, Virginia, and 27th Street Hotel in Virginia Beach. We also are proud to have completed numerous signature properties across the Mid-Atlantic region, such as the Constellation Energy Building in Baltimore, Maryland, the Inner Harbor East development in Baltimore, Maryland and the Mandarin Oriental Hotel in Washington, D.C.

We were formed on October 12, 2012 under the laws of the State of Maryland and are headquartered in Virginia Beach, Virginia. We elected to be taxed as a REIT for U.S. federal income tax purposes commencing with the taxable year ended December 31, 2013. Substantially all of our assets are held by, and all of our operations are conducted through, our Operating Partnership. As of December 31, 2022, we owned, through a combination of direct and indirect interests, 76.7% of the common units of limited partnership interest in our Operating Partnership ("OP Units").  

2022 and Recent Highlights

The following highlights our results of operations and significant transactions for the year ended December 31, 2022: 

•Net income attributable to common stockholders and OP Unitholders of $82.5 million, or $0.93 per diluted share, compared to $13.9 million, or $0.17 per diluted share, for the year ended December 31, 2021.

•Funds from operations attributable to common stockholders and OP Unitholders ("FFO") of $106.6 million, or $1.21 per diluted share, compared to $85.4 million, or $1.05 per diluted share, for the year ended December 31, 2021, representing a 15% year-over-year increase.

•Normalized funds from operations attributable to common stockholders and OP Unitholders ("Normalized FFO") of $107.2 million, or $1.22 per diluted share, compared to $87.6 million, or $1.08 per diluted share, for the year ended December 31, 2021, representing a 13% year-over-year increase.

•Property segment net operating income ("NOI") of $146.5 million, which represents an 18.3% increase compared to $123.8 million for the year ended December 31, 2021:  

•Office NOI of $47.7 million compared to $28.8 million  

•Retail NOI of $63.7 million compared to $57.6 million 

•Multifamily NOI of $35.1 million compared to $37.3 million

•Same store NOI of $108.7 million, which represents a 5.6% increase compared to $102.9 million for the year ended December 31, 2021:  

•Office same store NOI of $26.4 million compared to $26.5 million

•Retail same store NOI of $55.0 million compared to $51.6 million

•Multifamily same store NOI of $27.2 million compared to $24.8 million 

1

•Stabilized portfolio occupancy at 97.0% as of December 31, 2022 compared to 96.7% as of December 31, 2021:

•Office occupancy at 96.7% compared to 96.8%

•Retail occupancy at 97.9% compared to 96.0%

•Multifamily occupancy at 96.1% compared to 97.4%

•Completed the acquisition of the Class A+ mixed-use Constellation Energy Building in Baltimore's Harbor Point. The building features 444,000 square feet of Class A office space, 103 multifamily units, 38,500 square feet of retail space, and 750 parking spaces, which complements the Company's Harbor Point portfolio and development. In January 2022, the Company raised $58.0 million at $14.45 per share through an underwritten common stock offering in conjunction with this acquisition.

•Amended the Company’s Bylaws to relax the requirements necessary for stockholders to submit binding proposals.

•Appointed Matthew Barnes-Smith as Chief Financial Officer in accordance with the Company’s strategic succession plan. Former Chief Financial Officer, Michael O'Hara was a key contributor to the Company for over 25 years and continued with the Company through the end of 2022 to facilitate an orderly transition of his responsibilities to Mr. Barnes-Smith and oversee the Company’s major investments at Harbor Point.

•In April, completed the disposition of two student housing assets in Charleston for $81 million.

•Completed $177 million of sales of noncore assets

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

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

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

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

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

•Amended and restated our $355 million unsecured credit facility to increase the borrowing capacity to $550 million, with an option to expand to $1.0 billion (subject to certain conditions), and extend the maturity date of the revolving line of credit and term loan components to 2027 and 2028, respectively.

•Executed a new 46,000 square foot lease with Morgan Stanley at Thames Street Wharf that expands the tenant's space to over 240,000 square feet and extends their lease term to 2035.

•Delivered Chronicle Mill, a 238-unit market rate apartment project in the Charlotte suburb of Belmont, North Carolina. As of December 31, 2022, Chronicle Mill was already 93% leased.

•Reinvested $26.5 million of disposition proceeds to acquire Pembroke Square, a 100% leased grocery-anchored retail property located adjacent to the Town Center of Virginia Beach.

•Closed on a new $100 million unsecured term loan, with an option to expand to $200 million, subject to certain conditions, that matures in January 2027 and bears interest at term Secured Overnight Financing Rate ("SOFR") plus margin, with an effective fixed rate of 4.80% after considering the effect of interest rate swaps. The proceeds were used to repay mortgage debt secured by Wills Wharf and certain retail assets at the Town Center of Virginia Beach.

•Entered into an additional interest rate swap agreement covering $100 million of indebtedness on the senior unsecured term loan facility, resulting in an effective fixed interest rate of 4.73%.

For definitions and discussion of FFO, Normalized FFO, NOI, and same store NOI, see the section below entitled "Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations."

2

Our Competitive Strengths

We believe that we distinguish ourselves from other REITs through the following competitive strengths:

•High-Quality, Diversified Portfolio. Our portfolio consists of institutional-grade, premier office, retail, and multifamily properties located primarily in the Mid-Atlantic and Southeastern regions. Our properties are generally in the top tier of commercial properties in their markets, many in master planned communities, and offer Class-A amenities and finishes.  

•Seasoned, Committed, and Aligned Senior Management Team with a Proven Track Record. Our senior management team has extensive experience developing, constructing, owning, operating, renovating, and financing institutional-grade office, retail, and multifamily properties in the Mid-Atlantic and Southeastern regions. As of December 31, 2022, our executive officers and directors collectively owned approximately 12.1% of our company on a fully diluted basis, which we believe aligns their interests with those of our stockholders. 

•Strategic Focus on Attractive Mid-Atlantic and Southeastern Markets. We focus our activities on our target markets in the Mid-Atlantic and Southeastern regions of the United States that demonstrate attractive fundamentals driven by favorable supply and demand characteristics and limited competition from other large, well-capitalized operators. We believe that our longstanding presence in our target markets provides us with significant advantages in sourcing and executing development opportunities, identifying and mitigating potential risks, and negotiating attractive pricing. 

•Extensive Experience with Construction and Development. Our platform consists of development, construction, and asset management capabilities, which comprise an integrated delivery system for every project that we build for our own account or for third-party clients. This integrated approach provides a single source of accountability for design and construction, simplifies coordination and communication among the relevant stakeholders in each project, and provides us valuable insight from an operational perspective. We believe that being regularly engaged in construction and development projects provides us significant and distinct advantages, including enhanced market intelligence, greater insight into best practices, enhanced operating leverage, and "first look" access to development and ownership opportunities in our target markets. We also use mezzanine lending and preferred equity arrangements, which may enable us to acquire completed development projects at prices that are below market or at cost and may enable us to realize profit on projects we do not intend to own.

•Longstanding Public and Private Relationships. We have extensive experience with public/private real estate development projects dating back to 1984, having worked with the Commonwealth of Virginia, the State of Georgia, and the Kingdom of Sweden, as well as various municipalities. Through our experience and longstanding relationships with governmental entities such as these, we have learned to successfully navigate the often complex and time-consuming government approval process, which has given us the ability to capture opportunities that we believe many of our competitors are unable to pursue. 

Our Business and Growth Strategies

Our primary business objectives are to: (i) continue to develop, build, and own class A office, retail, and multifamily properties in our target markets, (ii) finance and operate our portfolio in a manner that increases cash flow and property values, (iii) execute new third-party construction work with consistent operating margins, and (iv) pursue selective acquisition opportunities, particularly when the acquisition involves a significant redevelopment aspect. We seek to achieve our objectives through the following strategies: 

•Pursue a Disciplined, Opportunistic Development and Acquisition Strategy Focused on Office, Retail, and Multifamily Properties. We intend to continue to grow our asset base through the selective acquisition of high-quality properties that are well-located in their submarkets, and continued strategic development of office, retail, and multifamily properties. Furthermore, we believe our construction and development expertise provides a high level of quality control while ensuring that the projects we construct and develop are completed more quickly and at a lower cost than if we engaged a third-party general contractor.

3

•Pursue New, and Expand Existing, Public/Private Relationships. We intend to continue to leverage our extensive experience in completing large, complex, mixed-use, public/private projects to establish relationships with new public partners while expanding our relationships with existing public partners.

•Leverage our Construction and Development Platform to Attract Additional Third-Party Clients. We believe that we have a unique advantage over many of our competitors due to our integrated construction and development business that provides expertise, oversight, and a broad array of client-focused services. We intend to continue to conduct and grow our construction business and other third-party services by pursuing new clients and expanding our relationships with existing clients. We also intend to continue to use our mezzanine lending program to leverage our development and construction expertise in serving clients.

•Engage in Disciplined Capital Recycling. We intend to opportunistically divest properties when we believe returns have been maximized and to redeploy the capital into new development, acquisition, repositioning, or redevelopment projects that are expected to generate higher potential risk-adjusted returns.

4

Our Properties

The table below sets forth certain information regarding our stabilized portfolio as of December 31, 2022. We generally consider a property to be stabilized upon the earlier of: (i) the quarter after the property reaches 80% occupancy or (ii) the thirteenth quarter after the property receives its certificate of occupancy. Additionally, any property that is fully or partially taken out of service for the purpose of redevelopment is no longer considered stabilized until the redevelopment activities are complete, the asset is placed back into service, and the stabilization criteria above are again met.

Property	Location	Year Built / Renovated / Redeveloped	Ownership Interest		Net Rentable Square Feet(1)	Occupancy(2)		ABR(3)		ABR per Leased SF(3)
Retail Properties
249 Central Park Retail	Virginia Beach, VA	2004	100	%	92,456	100.0	%	$	2,562,965	$	27.72
Apex Entertainment	Virginia Beach, VA	2002/2020	100	%	103,335	100.0	%	1,545,919		14.96
Broad Creek Shopping Center(4)	Norfolk, VA	2001	100	%	121,504	95.7	%	2,210,002		19.00
Broadmoor Plaza	South Bend, IN	1980	100	%	115,059	98.2	%	1,354,680		11.99
Brooks Crossing Retail	Newport News, VA	2016	65	%	18,349	78.3	%	219,975		15.31
Columbus Village	Virginia Beach, VA	2013/2020	100	%	62,207	100.0	%	1,899,747		30.54
Columbus Village II	Virginia Beach, VA	1996	100	%	92,061	96.7	%	978,078		10.98
Commerce Street Retail	Virginia Beach, VA	2008	100	%	19,173	100.0	%	963,746		50.27
Delray Beach Plaza (4)	Delray Beach, FL	2021	100	%	87,207	100.0	%	2,997,459		34.37
Dimmock Square	Colonial Heights, VA	1998	100	%	106,166	79.0	%	1,559,633		18.59
Fountain Plaza Retail	Virginia Beach, VA	2004	100	%	35,961	93.7	%	1,101,937		32.69
Greenbrier Square	Chesapeake, VA	2017	100	%	260,710	95.4	%	2,486,750		10.00
Greentree Shopping Center	Chesapeake, VA	2014	100	%	15,719	92.6	%	325,081		22.33
Hanbury Village	Chesapeake, VA	2009	100	%	98,638	100.0	%	2,007,780		20.36
Harrisonburg Regal	Harrisonburg, VA	1999	100	%	49,000	100.0	%	717,850		14.65
Lexington Square	Lexington, SC	2017	100	%	85,440	98.3	%	1,860,608		22.15
Market at Mill Creek	Mount Pleasant, SC	2018	100	%	80,319	97.7	%	1,841,264		23.46
Marketplace at Hilltop (4)	Virginia Beach, VA	2001	100	%	116,953	100.0	%	2,797,454		23.92
Nexton Square	Summerville, SC	2020	100	%	133,608	100.0	%	3,479,320		26.04
North Hampton Market	Taylors, SC	2004	100	%	114,954	97.9	%	1,503,219		13.36
North Pointe Center	Durham, NC	2009	100	%	226,083	100.0	%	2,923,017		12.93
Overlook Village	Asheville, NC	1990	100	%	151,365	100.0	%	2,197,835		14.52
Parkway Centre	Moultrie, GA	2017	100	%	61,200	100.0	%	850,761		13.90
Parkway Marketplace	Virginia Beach, VA	1998	100	%	37,804	100.0	%	780,481		20.65
Patterson Place	Durham, NC	2004	100	%	160,942	97.9	%	2,472,240		15.69
Pembroke Square	Virginia Beach, VA	1966/2015	100	%	124,181	100.0	%	2,096,262		16.88
Perry Hall Marketplace	Perry Hall, MD	2001	100	%	74,256	98.0	%	1,245,907		17.13
Premier Retail	Virginia Beach, VA	2018	100	%	39,015	86.8	%	1,140,886		33.70
Providence Plaza	Charlotte, NC	2008	100	%	103,118	100.0	%	3,059,505		29.67
Red Mill Commons	Virginia Beach, VA	2005	100	%	373,808	96.6	%	6,840,888		18.94
Sandbridge Commons	Virginia Beach, VA	2015	100	%	69,417	100.0	%	943,064		13.59
South Retail	Virginia Beach, VA	2002	100	%	38,515	100.0	%	1,003,080		26.04
South Square	Durham, NC	2005	100	%	109,590	100.0	%	1,984,616		18.11
Southgate Square	Colonial Heights, VA	2016	100	%	260,131	100.0	%	3,755,046		14.44
Southshore Shops	Chesterfield, VA	2006	100	%	40,307	97.5	%	820,402		20.87
Studio 56 Retail	Virginia Beach, VA	2007	100	%	11,594	100.0	%	407,396		35.14
Tyre Neck Harris Teeter (4)	Portsmouth, VA	2011	100	%	48,859	100.0	%	559,948		11.46
Wendover Village	Greensboro, NC	2004	100	%	176,997	98.8	%	3,430,982		19.63
Total / Weighted Average					3,916,001	97.9	%	$	70,925,783	$	18.51

5

	Location	Year Built / Renovated / Redeveloped	Ownership Interest		Net Rentable Square Feet (1)	Occupancy (2)		ABR (3)		ABR per Leased SF(3)
Office Properties
4525 Main Street	Virginia Beach, VA	2014	100	%	235,088	100.0	%	$	7,144,928	$	30.39
Armada Hoffler Tower (5)	Virginia Beach, VA	2002	100	%	315,916	98.7	%	9,551,515		30.62
Brooks Crossing Office	Newport News, VA	2019	100	%	98,061	100.0	%	1,925,167		19.63
Constellation Office (6)	Baltimore, MD	2016	79	%	482,317	97.1	%	15,192,121		32.44
One City Center	Durham, NC	2019	100	%	151,599	89.3	%	4,455,053		32.89
One Columbus	Virginia Beach, VA	1984	100	%	129,066	98.3	%	3,243,789		25.56
Thames Street Wharf (5)	Baltimore, MD	2010	100	%	263,426	100.0	%	7,655,559		29.06
Two Columbus	Virginia Beach, VA	2009	100	%	108,459	98.1	%	2,926,307		27.51
Wills Wharf (4)	Baltimore, MD	2020	91	%	327,991	90.8	%	9,046,394		30.39
Total / Weighted Average					2,111,923	96.7	%	$	61,140,833	$	29.92
	Location	Year Built / Renovated / Redeveloped	Ownership Interest		Units	Occupancy(2)		AQR (7)		Monthly Rent per Occupied Unit
Multifamily Properties
1305 Dock Street (6)	Baltimore, MD	2016	79	%	103	92.9	%	$	2,844,720	$	2,477
1405 Point (4)(8)	Baltimore, MD	2018	100	%	289	94.1	%	8,463,276		2,593
Edison Apartments (8)	Richmond, VA	1919/2014	100	%	174	96.0	%	3,028,380		1,511
Encore Apartments	Virginia Beach, VA	2014	100	%	286	95.6	%	5,605,860		1,709
Gainesville Apartments	Gainesville, GA	2022	100	%	223	98.2	%	4,838,964		1,841
Greenside Apartments	Charlotte, NC	2018	100	%	225	97.5	%	4,755,864		1,807
Liberty Apartments (8)	Newport News, VA	2013	100	%	197	97.0	%	3,645,264		1,590
Premier Apartments	Virginia Beach, VA	2018	100	%	131	98.0	%	2,830,644		1,837
Smith’s Landing (4)	Blacksburg, VA	2009	100	%	284	97.4	%	5,546,400		1,671
The Cosmopolitan (8)	Virginia Beach, VA	2006/2020	100	%	342	94.6	%	8,566,536		2,207
Total / Weighted Average					2,254	96.1	%	$	50,125,908	$	1,928

________________________________________

(1)The net rentable square footage for each of our office and retail properties is the sum of (a) the square footage 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 consistent with the Building Owners and Managers Association 1996 measurement guidelines.

(2)Occupancy for each of our office and retail properties is calculated as (a) square footage under executed leases as of December 31, 2022, divided by (b) net rentable square feet, expressed as a percentage. Occupancy for our multifamily properties is calculated as (a) average of the number of occupied units on the 20th day of each of the trailing three months from the reporting period end date, divided by (b) total units available, as of such date expressed as a percentage.

(3)For the properties in our office and retail portfolios, annualized base rent ("ABR") is calculated by multiplying (a) monthly base rent (defined as cash base rent, before contractual tenant concessions and abatements, and excluding tenant reimbursements for expenses paid by us) as of December 31, 2022 for in-place leases as of such date by (b) 12, and does not give effect to periodic contractual rent increases or contingent rental revenue (e.g., percentage rent based on tenant sales thresholds). ABR per leased square foot is calculated by dividing (a) ABR by (b) square footage under in-place leases as of December 31, 2022. In the case of triple net or modified gross leases, our calculation of ABR does not include tenant reimbursements for real estate taxes, insurance, common area or other operating expenses.

(4)We lease all or a portion of the land underlying this property pursuant to a ground lease.

(5)As of December 31, 2022, we occupied 55,390 square feet at these two properties at an ABR of $1.8 million, or $33.32 per leased square foot, which amounts are reflected in this table. The rent paid by us is eliminated in the consolidated financial statements in accordance with U.S. generally accepted accounting principles ("GAAP").

(6)As of December 31, 2022, we owned a 90% economic interest in this property, including an 11% economic interest through a note receivable. In January 2023, we acquired the additional 11% membership interest in this property.

(7)For the properties in our multifamily portfolio, annualized quarterly rent ("AQR") is calculated by multiplying (a) revenue for the quarter ended December 31, 2022 by (b) 4.

(8)The AQR for Liberty, Cosmopolitan, Edison Apartments, and 1405 Point excludes approximately $0.2 million, $1.0 million, $0.3million, and $0.4 million, respectively, from ground floor retail leases.

6

Lease Expirations

The following tables summarize the scheduled expirations of leases in our office and retail operating property portfolios as of December 31, 2022. The information in the following tables does not assume the exercise of any renewal options:  

Office Lease Expirations

Year of Lease Expiration(1)	Number of Leases Expiring	Square Footage of Leases Expiring	% Portfolio Net Rentable Square Feet		ABR		% of Office Portfolio ABR
Available	—	68,766	3.3	%	$	—	—	%
Month-to-Month	2	1,623	0.1	%	63,329		0.1	%
2023	7	61,898	2.9	%	1,693,941		2.8	%
2024	13	142,077	6.7	%	3,862,140		6.3	%
2025	20	156,165	7.4	%	4,800,586		7.9	%
2026	11	54,355	2.6	%	1,442,176		2.4	%
2027	18	131,322	6.2	%	3,727,300		6.1	%
2028	14	113,036	5.4	%	3,301,082		5.4	%
2029	11	297,348	14.1	%	8,173,497		13.4	%
2030	10	149,487	7.1	%	4,358,881		7.1	%
2031	4	20,270	1.0	%	576,476		0.9	%
2032	3	6,214	0.3	%	182,795		0.3	%
Thereafter	8	909,362	42.9	%	28,958,630		47.3	%
Total / Weighted Average	121	2,111,923	100.0	%	$	61,140,833	100.0	%

(1) Excludes leases from development and redevelopment properties that have been delivered but are not yet stabilized.

Retail Lease Expirations

Year of Lease Expiration	Number of Leases Expiring	Square Footage of Leases Expiring	% Portfolio Net Rentable Square Feet		ABR		% of Retail Portfolio ABR
Available	—	83,600	2.1	%	$	—	—	%
Month-to-Month	4	51,737	1.3	%	340,578		0.5	%
2022 (1)	1	1,200	—	%	37,818		0.1	%
2023	47	183,357	4.7	%	4,127,714		5.8	%
2024	85	420,397	10.7	%	7,990,879		11.3	%
2025	94	501,116	12.8	%	8,817,185		12.4	%
2026	82	450,350	11.5	%	9,049,900		12.8	%
2027	75	470,148	12.0	%	8,741,304		12.3	%
2028	46	246,109	6.3	%	4,953,704		7.0	%
2029	31	115,967	3.0	%	2,465,625		3.5	%
2030	46	260,461	6.7	%	5,818,903		8.2	%
2031	30	271,334	6.9	%	4,894,065		6.9	%
2032	24	289,109	7.4	%	4,670,093		6.6	%
Thereafter	33	571,116	14.6	%	9,018,015		12.6	%
Total / Weighted Average	598	3,916,001	100.0	%	$	70,925,783	100.0	%

(1) Lease expired on December 31, 2022.

7

Tenant Diversification

The following table lists the 20 largest tenants in each of our office and retail operating property portfolios, based on ABR as of December 31, 2022 ($ in thousands):   

Tenant (1)	Number of Leases	Lease Expiration	ABR		% of Total ABR/AQR
Constellation Energy Group	1	2036	$	14,575	8.0	%
Morgan Stanley	3	2028-2035	7,178		3.9	%
Harris Teeter/Kroger	6	2026-2035	3,766		2.1	%
Canopy by Hilton	1	2045	2,846		1.6	%
Clark Nexsen	1	2029	2,801		1.5	%
WeWork	1	2034	2,180		1.2	%
Lowes Foods	2	2037;2039	1,976		1.1	%
Franklin Templeton	1	2038	1,861		1.0	%
Duke University	1	2029	1,659		0.9	%
Huntington Ingalls Industries	1	2029	1,606		0.9	%
Dick's Sporting Goods	1	2032	1,553		0.9	%
PetSmart	5	2025-2027	1,527		0.8	%
TJ Maxx/Homegoods	5	2023-2027	1,519		0.8	%
Mythics	1	2030	1,260		0.7	%
Johns Hopkins Medicine	1	2023	1,213		0.7	%
Amazon/Whole Foods	1	2040	1,144		0.6	%
Ross Dress for Less	3	2025-2027	1,122		0.6	%
Apex Entertainment	1	2035	1,092		0.6	%
Bed Bath & Beyond	2	2025 ; 2027	1,084		0.6	%
Regal Cinemas	2	MTM ; 2024	1,058		0.6	%
Top 20 Total			$	53,020	29.1	%

(1) Excludes leases from development and redevelopment properties that have been delivered but are not yet stabilized.

Development Pipeline

In addition to the properties in our operating property portfolio as of December 31, 2022, we had the following properties in various stages of development and stabilization. We generally consider a property to be stabilized upon the earlier of: (i) the quarter after the property reaches 80% occupancy or (ii) the thirteenth quarter after the property receives its certificate of occupancy.  

Development, Not Delivered			($ in '000s)				Schedule (1)
		Estimated	Estimated		Incurred			Initial	Stabilized	AHH	Property  Type
Property	Location	Size (1)	Cost (1)		Cost		Start	Occupancy	Operation (2)	Ownership %
Southern Post	Roswell, GA	137 units/137,000 sf	$	119,000	$	47,000	4Q21	4Q23	4Q24	100%	Mixed-use

Delivered Not Stabilized			($ in '000s)				Schedule
		Estimated	Estimated		Incurred			Initial	Stabilized	AHH	Property  Type
Property	Location	Size (1)	Cost (1)		Cost		Start	Occupancy	Operation (1)(2)	Ownership %
Chronicle Mill	Belmont, NC	238 units/14,900 sf	$	60,000	$	54,000	1Q21	4Q22	1Q23	85%	Multifamily
		Total	$	179,000	$	101,000

________________________________________

8

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

(2)Estimated first full quarter of stabilized operations. Estimates are inherently uncertain, and we can provide no assurance that our assumptions regarding the timing of stabilization will prove accurate.

Our execution on all of the projects identified in the preceding tables are subject to, among other factors, regulatory approvals, financing availability, and suitable market conditions.

Southern Post is a $119 million mixed-use project that includes 137 multifamily units and 137,000 square feet of office and retail space being developed in Roswell, Georgia, with expected delivery in 2023.

Chronicle Mill is a $60 million 238-unit multifamily adaptive-reuse project that includes 14,900 square feet of office and retail space in Belmont, North Carolina. Portions of the Chronicle Mill project were completed and placed in service during 2022. As of December 31, 2022, the overall project was 93.0% leased and 50% occupied.

Equity Method Investments - Development

Equity Method Investments (1) as of December 31, 2022

($ in '000s)

Schedule

Estimated

Estimated Project Cost

Equity requirement

Funded to date

Initial

Stabilized

AHH

Property

Property

Location

Size

Start

Occupancy

Operation

Ownership %

Type

T. Rowe Price Global HQ

Baltimore, MD

553,000 sf office / 20,200 sf retail / 250 parking spaces

264,000

44,600

40,500

2Q22

3Q24

3Q24

50%

Office

Parcel 4 Mixed-Use

Baltimore, MD

312 units / 12,100 sf retail / 1,250 parking spaces

226,000

102,600

32,400

2Q22

3Q24

2Q26

90%

Mixed-use

Total

$

490,000

$

147,200

$

72,900

________________________________________

(1)All items in the table (other than funded to date as of December 31, 2022) are estimates that may change as the development and redevelopment process proceeds.

Other Investments

Interlock Commercial

On December 21, 2018, we entered into a mezzanine loan agreement with the developer of the office and retail components of The Interlock, a new mixed-use public-private partnership with Georgia Tech in West Midtown Atlanta. The loan has a maximum principal amount of $70.1 million and a total maximum commitment, including accrued interest reserves, of $107.0 million. The mezzanine loan bears interest at a rate of 15.0% per annum, with $3.0 million of overrun advances bearing interest at a rate of 18.0%. The loan matures on the earlier of (i) 24 months after the original maturity date or earlier termination date of the senior construction loan or (ii) any sale, transfer, or refinancing of the project. In the event that the maturity date is established as being 24 months after the original maturity date or earlier termination date of the senior construction loan, the developer will have the right to extend the maturity date for five years.

The balance on the Interlock Commercial note was $86.6 million as of December 31, 2022. During the year ended December 31, 2022, we recognized $9.9 million of interest income on the note. See Note 6 to our consolidated financial statements in Item 8 of this Annual Report on Form 10-K.

Nexton Multifamily

On April 1, 2021, we entered into a $22.3 million preferred equity investment for the development of a multifamily property located in Summerville, South Carolina, adjacent to our Nexton Square property. The investment had economic terms consistent with a note receivable, including a mandatory redemption or maturity on October 1, 2026, and it is accounted for as a note receivable in our consolidated balance sheets. This investment bore interest at a rate of 11%, compounded annually.

On December 30, 2022, the borrower paid off the Nexton Multifamily note receivable in full. We received a total of $28.9 million, which consisted of $22.3 million outstanding principal, $3.9 million of accrued interest, and a prepayment premium of $2.7 million that resulted from the early payoff of the loan. See Note 6 to our consolidated financial statements in Item 8 of this Annual Report on Form 10-K.

City Park 2

9

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

The balance on the City Park 2 note was $19.1 million as of December 31, 2022. During the year ended December 31, 2022, we recognized $1.0 million of interest income on the note. See Note 6 to our consolidated financial statements in Item 8 of this Annual Report on Form 10-K.

Solis Gainesville II

On October 3, 2022, we entered into a $19.6 million preferred equity investment for the development of a multifamily property located in Gainesville, Georgia (Solis Gainesville II). This project is located nearby our recently completed multifamily development project in Gainesville. The preferred equity investment has economic and other terms consistent with a note receivable, including a mandatory redemption or maturity on October 3, 2026, and it is accounted for as a note receivable. Our investment bears interest at a rate of 14.0%, compounded annually, with a minimum preferred return of $5.9 million.

The balance on the Solis Gainesville II note was $6.6 million as of December 31, 2022. During the year ended December 31, 2022, we recognized $0.2 million of interest income on the note. See Note 6 to our consolidated financial statements in Item 8 of this Annual Report on Form 10-K.

Equity Method Investments

Harbor Point Parcel 3

During December 2020, we formed a 50/50 joint venture that will develop and build T. Rowe Price's new global headquarters in Baltimore's Harbor Point. T. Rowe Price agreed to a 15-year lease and plans to relocate its operations in the second half of 2024 to Harbor Point Parcel 3.  They will occupy at least 553,000 square feet of office space. Plans for this development may evolve as the development process proceeds. Project costs at this time are subject to change and currently estimated at $264 million. We have a current projected equity commitment of $44.6 million relating to this project, of which we had funded $40.5 million as of December 31, 2022. We provided a completion guarantee to the lender for this project. The construction loan is cross-collateralized with Harbor Point Parcel 4.

Harbor Point Parcel 4

In conjunction with the Harbor Point Parcel 3 project, we acquired a 78% interest in Harbor Point Parcel 4, a real estate venture with Beatty Development Group, for purposes of developing a mixed-use project, which is planned to include 312 apartments units, 13,000 square feet of retail space, and 1,250 spaces of structured parking on a neighboring site to accommodate T. Rowe Price's parking requirements and other parking requirements for the surrounding area. We hold an option to increase our ownership to 90%. We have a current projected equity commitment of $102.6 million relating to this project, of which we had funded $32.4 million as of December 31, 2022. Plans for this project may also evolve as the development process proceeds. Current estimated project costs are $226 million. We will be expected to provide a completion guarantee and a partial payment guarantee to the lender for this project. The construction loan is cross-collateralized with Harbor Point Parcel 3.

Acquisitions

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

10

On January 14, 2022, we acquired the remaining 20% ownership interest in the entity that is developing the Ten Tryon project in Charlotte, North Carolina for a cash payment of $3.9 million.

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

In October 2022, we acquired the remaining 5% ownership interest in the entity that developed Gainesville Apartments. During 2022, we made earn-out payments totaling $4.2 million to our development partner in addition to development cost savings of $0.8 million paid to our development partner.

On November 4, 2022, we acquired Pembroke Square a 124,000 square foot grocery-anchored shopping center in Virginia Beach, Virginia for a purchase price of $26.5 million in cash, reinvested from disposition proceeds.

On December 31, 2022, we acquired the remaining 30% of the partnership that owns the Market at Mill Creek shopping center in Mount Pleasant, South Carolina for total consideration of $1.5 million.

Subsequent to December 31, 2022

On January 14, 2023, we acquired the additional 11% membership interest in the Constellation Energy Building in exchange for full satisfaction of the $12.8 million loan that was extended to the seller upon the acquisition of the property in January 2022.

Dispositions

During the year ended December 31, 2022, we realized $53.5 million of net gain on the sales of $259.8 million of properties:

Date of Disposition	Property	Sales Price (in millions)
April 1, 2022	Hoffler Place	$	43.1
April 25, 2022	Summit Place	37.8
June 29, 2022	North Pointe Outparcels	23.9
July 22, 2022	The Residences at Annapolis Junction	150.0
July 26, 2022