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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, 2023 

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

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As of June 30, 2023, 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 $779.1 million, based on the closing sales price of $11.68 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 23, 2024, the registrant had 66,793,248 shares of common stock outstanding. In addition, as of February 23, 2024, Armada Hoffler, L.P., the registrant's operating partnership subsidiary (the "Operating Partnership"), had 21,583,470 common units of limited partnership interest ("OP Units") outstanding (other than OP Units held by the registrant). Based on the 66,793,248 shares of common stock and 21,583,470 OP Units held by limited partners other than the registrant, the registrant had a total common equity market capitalization of $939,444,512 as of February 23, 2024 (based on the closing sales price of $10.63 on the New York Stock Exchange on such date).

Documents Incorporated by Reference

Portions of the registrant’s Definitive Proxy Statement relating to its 2024 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, 2023.  

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Armada Hoffler Properties, Inc.

Form 10-K

For the Fiscal Year Ended December 31, 2023

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PART I
Item 1.	Business.	1
Item 1A.	Risk Factors.	15
Item 1B.	Unresolved Staff Comments.	40
Item 1C.	Cybersecurity.	41
Item 2.	Properties.	42
Item 3.	Legal Proceedings.	42
Item 4.	Mine Safety Disclosures.	43
PART II
Item 5.	Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.	44
Item 6.	[Reserved].	46
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	46
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk.	68
Item 8.	Financial Statements and Supplementary Data.	69
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.	69
Item 9A.	Controls and Procedures.	69
Item 9B.	Other Information.	69
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.	69
PART III
Item 10.	Directors, Executive Officers and Corporate Governance.	70
Item 11.	Executive Compensation.	70
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.	70
Item 13.	Certain Relationships and Related Transactions, and Director Independence.	70
Item 14.	Principal Accountant Fees and Services.	70
PART IV
Item 15.	Exhibits and Financial Statement Schedules.	71
Item 16.	Form 10-K Summary.	71
Index to Exhibits		72
Signatures		74

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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 or similar investments 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;

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•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, 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.

•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.

•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.

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•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 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”).

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PART I

Item 1.    Business. 

Our Company

References to "we," "our," "us," "our company," and "Armada Hoffler" 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 vertically-integrated, self-managed REIT with over four decades of experience developing, building, acquiring, and managing high-quality retail, office, and multifamily properties located primarily in 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 real estate financing arrangements. We also provide general construction and development services to third-party clients. 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, Adams Hill Apartments in Greenville, South Carolina, The Apartments at Innsbrook Square in Glen Allen, Virginia, Fox Crossing Apartments in Raleigh, North Carolina, 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, 2023, we owned, through a combination of direct and indirect interests, 75.6% of the common units of limited partnership interest in our Operating Partnership ("OP Units").  

2023 and Recent Highlights

The following highlights our results of operations and significant transactions for the year ended December 31, 2023: 

•Net loss attributable to common stockholders and OP Unitholders of $4.5 million for the year ended December 31, 2023, or $0.05 per diluted share.

•Funds from operations attributable to common stockholders and OP Unitholders ("FFO") of $90.7 million for the year ended December 31, 2023, or $1.02 per diluted share.

•Normalized funds from operations attributable to common stockholders and OP Unitholders ("Normalized FFO") of $110.5 million, or $1.24 per diluted share.

•Announced that the Board of Directors declared a cash dividend of $0.205 per common share, representing a 5% increase over the prior quarter's dividend.

•Dividends declared during the year ended December 31, 2023 of $0.775 per share, representing a 7.6% year-over-year increase.

•As part of the Company's leadership succession planning initiatives, appointed Shawn Tibbetts to President, in addition to his existing role as Chief Operating Officer. The Company's Board of Directors also endorsed founder and current Chairman Dan Hoffler's intent to relinquish his role as Chairman of the Board of Directors in June 2024. The Board of Directors expects to appoint Louis S. Haddad as Chairman of the Board of Directors, subject to his reelection to the Board of Directors at the 2024 Annual Meeting of Stockholders. If the stockholders vote to reelect Mr. Hoffler to the Board of Directors at the 2024 Annual Meeting of Stockholders, Mr. Hoffler will continue to serve as a member of the Board of Directors, and the Board of Directors expects to appoint him as "Chairman Emeritus".

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•Property segment net operating income ("NOI") of $160.1 million for the year ended December 31, 2023, which represents a 9.3% increase compared to $146.5 million for the year ended December 31, 2022.

•Same Store NOI for the year ended December 31, 2023 increased 0.9% compared to the year ended December 31, 2022.

•For the year ended December 31, 2023, the Company repurchased 1,204,838 shares of common stock for a total of $12.6 million.

•Completed the $215 million acquisition of The Interlock, a 311,000 square foot Class A commercial mixed-use asset in Atlanta's West Midtown anchored by Georgia Tech.

•Announced the authorization of the repurchase of up to $50 million of the Company's shares of common stock and Series A Preferred Stock under a newly established share repurchase program. During the year ended December 31, 2023, the Company repurchased 1,204,838 shares of common stock for a total of $12.6 million.

•Committed an aggregate of $75.5 million to new real estate financing investments across three ground-up multifamily development projects located in the Atlanta and Coastal Virginia markets.

•Third-party construction backlog as of December 31, 2023 was $472.2 million and general contracting and real estate services gross profit for the year ended December 31, 2023 was $13.4 million.

•Weighted average stabilized portfolio occupancy was 96.1% as of December 31, 2023. Retail occupancy was 97.4%, office occupancy was 95.3%, and multifamily occupancy was 95.5%.

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."

Our Competitive Strengths

Armada Hoffler believes that we distinguish ourselves from other REITs through the following competitive strengths:

•Armada Hoffler's diversified portfolio consists of high-quality retail, office, and multifamily assets, located primarily in the Mid-Atlantic and Southeastern regions. Our properties are generally in the top tier of commercial properties in their markets, many of which are in mixed-use communities that offer Class-A amenities and finishes.  

•Armada Hoffler has an experienced, dedicated, and resilient senior management team that serves as the catalyst for the organization's success, inspiring employees, driving innovation, and creating value for all stakeholders. Our senior management team brings substantial experience in strategic business operations, as well as ownership, management, and development of high-quality real estate properties. As of December 31, 2023, our executive officers and directors collectively held a stake of approximately 12.2% in our company on a fully diluted basis, which we believe aligns their interests with those of our stockholders. 

•Armada Hoffler strategically focuses on target markets in the Mid-Atlantic and Southeastern regions of the United States. These markets demonstrate attractive fundamentals driven by favorable supply and demand characteristics, high-barrier to entry, and limited competition. 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. 

•Armada Hoffler leverages mezzanine lending and preferred equity arrangements, which provides opportunities 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.

•Our platform consists of asset management, development, and construction expertise, which comprise an integrated delivery system for every project that we build for our portfolio or for third-party clients.

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Our Business and Growth Strategies

Armada Hoffler's primary business objectives are to: (i) continue to acquire, manage, develop, and build class A retail, office, and multifamily properties in our target markets, (ii) finance and operate our portfolio in a manner that increases cash flow and property values, (iii) pursue selective acquisition and disposition opportunities , and (iv)  execute new third-party construction and real estate financing arrangements with consistent operating margins. We seek to achieve our objectives through the following strategies: 

•Armada Hoffler intends to continue to grow our asset base and create value through the selective acquisition of high-quality properties that are well-located in their submarkets, and continued strategic development of retail, office, and multifamily properties.

•Armada Hoffler intends to continue to use our real estate financing program which is integrated into our overall growth and acquisition strategy. We continue to evaluate whether properties within our real estate financing program provide high-quality acquisition opportunities.

•Armada Hoffler believes 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 leverage our construction business and other third-party services.

•Armada Hoffler plans to continue to leverage our extensive experience in completing large, complex, mixed-use projects to establish relationships with new partners, while expanding our relationships with existing partners.

•Armada Hoffler opportunistically divests properties when we believe returns have been maximized and we believe redeploying the capital into new development, acquisition, repositioning, or redevelopment projects will generate higher potential risk-adjusted returns.

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Our Properties

The table below sets forth certain information regarding our stabilized portfolio as of December 31, 2023. 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
Town Center of Virginia Beach
249 Central Park Retail*	Virginia Beach, VA	2004	100	%		92,264	95.8	%	$	2,514,064	$	28.43
Apex Entertainment*	Virginia Beach, VA	2002/2020	100	%		103,335	81.3	%	1,134,000		13.50
Columbus Village*	Virginia Beach, VA	2013/2020	100	%		62,207	100.0	%	1,933,084		31.08
Commerce Street Retail*	Virginia Beach, VA	2008	100	%		19,173	100.0	%	943,051		49.19
Fountain Plaza Retail*	Virginia Beach, VA	2004	100	%		35,961	94.4	%	1,115,851		32.88
Pembroke Square*	Virginia Beach, VA	1966/2015	100	%		124,181	100.0	%	2,096,262		16.88
Premier Retail*	Virginia Beach, VA	2018	100	%		39,015	86.8	%	1,155,936		34.15
South Retail*	Virginia Beach, VA	2002	100	%		38,515	100.0	%	1,046,422		27.17
Studio 56 Retail*	Virginia Beach, VA	2007	100	%		11,594	100.0	%	410,652		35.42
Grocery Anchored
Broad Creek Shopping Center (4)	Norfolk, VA	2001	100	%		121,504	95.7	%	2,239,980		19.26
Broadmoor Plaza	South Bend, IN	1980	100	%		115,059	98.2	%	1,356,929		12.01
Brooks Crossing Retail*	Newport News, VA	2016	65	%	(5)	18,349	84.8	%	202,194		13.00
Delray Beach Plaza* (4)	Delray Beach, FL	2021	100	%		87,207	98.0	%	2,948,735		34.49
Greenbrier Square	Chesapeake, VA	2017	100	%		260,625	100.0	%	2,624,984		10.07
Greentree Shopping Center	Chesapeake, VA	2014	100	%		15,719	92.6	%	329,004		22.60
Hanbury Village	Chesapeake, VA	2009	100	%		98,638	100.0	%	2,028,304		20.56
Lexington Square	Lexington, SC	2017	100	%		85,440	100.0	%	1,956,467		22.90
Market at Mill Creek	Mount Pleasant, SC	2018	100	%		80,319	100.0	%	1,916,094		23.86
North Pointe Center	Durham, NC	2009	100	%		226,083	100.0	%	2,970,860		13.14
Parkway Centre	Moultrie, GA	2017	100	%		61,200	100.0	%	855,879		13.98
Parkway Marketplace	Virginia Beach, VA	1998	100	%		37,804	100.0	%	800,895		21.19
Perry Hall Marketplace	Perry Hall, MD	2001	100	%		74,251	100.0	%	1,292,038		17.40
Sandbridge Commons	Virginia Beach, VA	2015	100	%		69,417	100.0	%	947,321		13.65
Tyre Neck Harris Teeter (4)	Portsmouth, VA	2011	100	%		48,859	100.0	%	559,948		11.46
Southeast Sunbelt
The Interlock Retail* (4)	Atlanta, GA	2021	100	%		107,379	97.2	%	4,931,164		47.25
Nexton Square*	Summerville, SC	2020	100	%		133,608	100.0	%	3,487,299		26.10
North Hampton Market	Taylors, SC	2004	100	%		114,954	100.0	%	1,597,966		13.90
Overlook Village	Asheville, NC	1990	100	%		151,365	100.0	%	2,237,615		14.78
Patterson Place	Durham, NC	2004	100	%		159,842	77.2	%	2,082,944		16.77
Providence Plaza*	Charlotte, NC	2008	100	%		103,118	100.0	%	3,123,551		30.29
South Square	Durham, NC	2005	100	%		109,590	97.1	%	1,918,540		18.02
Wendover Village	Greensboro, NC	2004	100	%		176,997	99.3	%	3,560,610		20.27
Mid-Atlantic
Dimmock Square	Colonial Heights, VA	1998	100	%		106,166	100.0	%	1,927,971		18.16
Harrisonburg Regal	Harrisonburg, VA	1999	100	%		49,000	100.0	%	717,850		14.65
Marketplace at Hilltop (4)	Virginia Beach, VA	2001	100	%		116,953	100.0	%	2,848,526		24.36
Red Mill Commons	Virginia Beach, VA	2005	100	%		373,808	95.7	%	6,960,834		19.45
Southgate Square	Colonial Heights, VA	2016	100	%		260,131	100.0	%	3,781,724		14.54
Southshore Shops	Chesterfield, VA	2006	100	%		40,307	97.5	%	841,626		21.42
Total / Weighted Average						3,929,937	97.4	%	$	75,397,174	$	19.70

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Property	Location	Year Built / Renovated / Redeveloped	Ownership Interest			Net Rentable Square Feet (1)	Occupancy (2)		ABR (3)		ABR per Leased SF(3)
Office
Town Center of Virginia Beach
4525 Main Street*	Virginia Beach, VA	2014	100	%		235,088	100.0	%	$	7,272,362	$	30.93
Armada Hoffler Tower* (6)	Virginia Beach, VA	2002	100	%		315,916	97.8	%	9,606,360		31.08
One Columbus*	Virginia Beach, VA	1984	100	%		129,066	96.0	%	3,229,531		26.07
Two Columbus*	Virginia Beach, VA	2009	100	%		108,460	82.3	%	2,540,344		28.46
Harbor Point - Baltimore Waterfront
Constellation Office*	Baltimore, MD	2016	90	%		482,209	98.1	%	15,866,391		33.53
Thames Street Wharf* (6)	Baltimore, MD	2010	100	%		263,426	99.5	%	7,990,745		30.50
Wills Wharf* (4)	Baltimore, MD	2020	100	%		327,991	93.8	%	9,875,417		32.10
Southeast Sunbelt
The Interlock Office* (4)	Atlanta, GA	2021	100	%		198,721	87.1	%	6,470,562		37.38
One City Center*	Durham, NC	2019	100	%		151,599	85.6	%	4,351,672		33.55
Mid-Atlantic
Brooks Crossing Office*	Newport News, VA	2019	100	%		98,061	100.0	%	1,963,671		20.02
Total / Weighted Average						2,310,537	95.3	%	$	69,167,055	$	31.42
Property	Location	Year Built / Renovated / Redeveloped	Ownership Interest			Units	Occupancy(2)		AQR (7)		Monthly Rent per Occupied Unit
Multifamily
Town Center of Virginia Beach
Encore Apartments*	Virginia Beach, VA	2014	100	%		286	94.5	%	$	5,729,220	$	1,810
Premier Apartments*	Virginia Beach, VA	2018	100	%		131	93.1	%	2,861,412		1,923
The Cosmopolitan* (8)	Virginia Beach, VA	2006/2020	100	%		342	94.2	%	8,663,664		2,315
Harbor Point - Baltimore Waterfront
1305 Dock Street*	Baltimore, MD	2016	90	%		103	95.5	%	2,839,848		2,519
1405 Point* (4)(8)	Baltimore, MD	2018	100	%		289	94.9	%	8,825,124		2,656
Southeast Sunbelt
Chronicle Mill* (8) (9)	Belmont, NC	2022	85	%	(5)	238	95.5	%	4,788,024		1,734
The Everly* (10)	Gainesville, GA	2022	100	%		223	95.2	%	4,941,168		1,898
Greenside Apartments	Charlotte, NC	2018	100	%		225	96.0	%	5,012,424		1,962
Mid-Atlantic
The Edison* (8)	Richmond, VA	2014	100	%		174	93.3	%	3,094,824		1,565
Liberty Apartments* (8)	Newport News, VA	2013	100	%		197	98.5	%	3,849,588		1,672
Smith’s Landing (4)	Blacksburg, VA	2009	100	%		284	100.0	%	5,930,964		1,777
Total / Weighted Average						2,492	95.5	%	$	56,536,260	$	1,979

________________________________________

* Located in a mixed-use development

(1)The net rentable square footage for each of our retail and office 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 retail and office properties is calculated as (a) square footage under executed leases as of December 31, 2023, 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 retail and office 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, 2023 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, 2023. 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)We are entitled to a preferred return on our investment in this property.

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(6)As of December 31, 2023, we occupied 47,644 square feet at these two properties at an ABR of $1.6 million, or $33.8 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").

(7)For the properties in our multifamily portfolio, annualized quarterly rent ("AQR") is calculated by multiplying (a) revenue for the quarter ended December 31, 2023 by (b) 4.

(8)The AQR for The Cosmopolitan, 1405 Point, Chronicle Mill, The Edison, and Liberty Apartments excludes approximately $1.2 million, $0.3 million, $0.2 million, $0.1 million, and $0.2 million, respectively, from ground floor retail leases.

(9)Due to tenants vacating subsequent to December 31, 2023 as a result of flooding at the property, occupancy subsequent to December 31, 2023 at this property is approximately 78.5%.

(10)Formerly known as Gainesville Apartments.

Lease Expirations

The following tables summarize the scheduled expirations of leases in our retail and office operating property portfolios as of December 31, 2023. The information in the following tables does not assume the exercise of any renewal options.

Retail Lease Expirations

Year of Lease Expiration(1)	Number of Leases Expiring	Square Footage of Leases Expiring	% Portfolio Net Rentable Square Feet		ABR		% of Retail Portfolio ABR
Available	—	103,302	2.6	%	$	—	—	%
Month-to-Month	—	—	—	%	—		—	%
2024	58	238,576	6.1	%	4,908,914		6.5	%
2025	91	439,994	11.2	%	8,129,402		10.8	%
2026	91	480,801	12.2	%	9,929,103		13.2	%
2027	75	425,506	10.8	%	8,046,045		10.7	%
2028	71	334,062	8.5	%	7,283,607		9.7	%
2029	59	309,785	7.9	%	6,206,642		8.2	%
2030	51	312,392	7.9	%	6,932,267		9.2	%
2031	34	285,125	7.3	%	5,552,279		7.4	%
2032	30	304,583	7.8	%	5,575,019		7.4	%
2033	27	118,727	3.0	%	3,146,290		4.2	%
Thereafter	35	577,084	14.7	%	9,687,606		12.7	%
Total / Weighted Average	622	3,929,937	100.0	%	$	75,397,174	100.0	%

________________________________________

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

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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	—	109,462	4.7	%	$	—	—	%
Month-to-Month	3	5,906	0.3	%	193,731		0.3	%
2023 (2)	2	40,675	1.8	%	1,527,584		2.2	%
2024	9	49,654	2.1	%	1,395,752		2.0	%
2025	19	121,878	5.3	%	3,702,171		5.4	%
2026	10	49,398	2.1	%	1,299,258		1.9	%
2027	21	183,324	7.9	%	6,024,754		8.7	%
2028	15	122,107	5.3	%	3,773,334		5.5	%
2029	14	327,622	14.2	%	9,380,406		13.6	%
2030	12	171,379	7.4	%	5,224,589		7.6	%
2031	7	108,277	4.7	%	3,271,739		4.7	%
2032	3	14,757	0.6	%	586,323		0.8	%
2033	3	52,685	2.3	%	1,543,907		2.2	%
Thereafter	13	953,413	41.3	%	31,243,507		45.1	%
Total / Weighted Average	131	2,310,537	100.0	%	$	69,167,055	100.0	%

________________________________________

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

(2)Represents leases that expired on December 31, 2023. The spaces were available for lease as of January 1, 2024.

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Tenant Diversification

The following table lists the 20 largest tenants in our retail and office operating property portfolios, based on ABR as of December 31, 2023 ($ in thousands):   

Tenant (1)	Number of Leases	Lease Expiration	ABR		% of Total ABR/AQR
Constellation Energy Generation	1	2036	$	15,010	7.5	%
Morgan Stanley	3	2028 - 2035	8,733		4.3	%
Harris Teeter/Kroger	6	2026 - 2035	3,781		1.9	%
WeWork(2)	2	2023 ; 2034	3,732		1.9	%
Canopy by Hilton	1	2045	3,171		1.6	%
Clark Nexsen	1	2029	2,857		1.4	%
Lowes Foods	2	2037 ; 2039	1,976		1.0	%
Franklin Templeton	1	2038	1,861		0.9	%
Duke University	1	2029	1,700		0.8	%
Huntington Ingalls Industries	1	2029	1,638		0.8	%
Dick’s Sporting Goods	1	2032	1,553		0.8	%
TJ Maxx/Homegoods	5	2025 - 2029	1,531		0.8	%
PetSmart	5	2025 - 2027	1,527		0.8	%
Georgia Tech	1	2031	1,418		0.7	%
Mythics	1	2030	1,285		0.6	%
Puttshack	1	2036	1,203		0.6	%
Amazon/Whole Foods	1	2040	1,144		0.6	%
Pindrop	1	2027	1,137		0.6	%
Apex Entertainment	1	2035	1,134		0.6	%
Kimley-Horn	1	2027	1,123		0.6	%
Top 20 Total			$	57,514	28.8	%

________________________________________

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

(2) Tenant vacated The Interlock subsequent to December 31, 2023. After giving effect to the removal of this lease, the tenant's ABR would be approximately $2.2 million, which represents 1.1% of total annualized base rent as of December 31, 2023.

Development Pipeline

In addition to the properties in our operating property portfolio as of December 31, 2023, 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		Funded			Initial	Stabilized	AHH	Property  Type
Property	Location	Size (1)	Cost (1)		to Date		Start	Occupancy	Operation (2)	Ownership %
Southern Post	Roswell, GA	137 units/137,000 sf	$	126,300	$	82,900	4Q21	1Q24	4Q24	100%	Mixed-use

Redevelopment
		AHH	Property  Type
Property	Location	Ownership %
Columbus Village II	Virginia Beach, VA	100%	Retail

________________________________________

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(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.

Equity Method Investments - Development

Equity Method Investments as of December 31, 2023 (1)

($ in '000s)

Schedule

Estimated

Estimated Project Cost

Equity Requirement

Funded to Date

Initial Occupancy

Stabilized Operation(2)

AHH

Property Type

Property

Location

Size

Start

Ownership %

T. Rowe Price Global HQ (Harbor Point Parcel 3)

Baltimore, MD

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

$

267,400

$

47,000

$

42,900

2Q22

3Q24

4Q24

50%

Office

Allied | Harbor Point (Harbor Point Parcel 4)

Baltimore, MD

312 units / 15,800 sf retail / 1,252 parking spaces

236,800

113,300

102,100

2Q22

3Q24

2Q26

90%

(3)

Mixed-use

Total

$

504,200

$

160,300

$

145,000

________________________________________

(1)All items in the table (other than location, funded to date as of December 31, 2023, development start, our ownership percentage and property type) are estimates that may change as the development and redevelopment 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.

(3)We currently have a 78% ownership interest and hold an option to increase our ownership interest to 90%.

Equity Method Investments

Harbor Point Parcel 3

During December 2020, we formed a 50/50 joint venture to develop and build T. Rowe Price's new global headquarters in Baltimore's Harbor Point. T. Rowe Price agreed to a 15-year lease, with three 5-year extension options, 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 $267.4 million. We have a current projected equity commitment of $47.0 million relating to this project, of which we had funded $42.9 million as of December 31, 2023. 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, 15,800 square feet of retail space, and 1,252 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 $113.3 million relating to this project, of which we had funded $102.1 million as of December 31, 2023. Plans for this project may also evolve as the development process proceeds. Current estimated project costs are $236.8 million. We have provided 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. As of December 31, 2023, no amounts have been funded on this senior loan.

Real Estate Financing Investments

Solis City Park II

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. Our investment bears interest at a rate of 13%, compounded annually, with a minimum preferred return of $5.7 million, which represents approximately 24 months of interest.

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The balance on the Solis City Park II note was $24.3 million as of December 31, 2023, which includes $3.8 million of cumulative accrued interest and a discount of $0.1 million due to unamortized equity fees. During the year ended December 31, 2023, we recognized $2.9 million of interest income on the note. As of December 31, 2023, this note was fully funded and the development property was approximately 41% leased. 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 Everly. 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%, compounded annually, with a minimum preferred return of $5.9 million, which represents approximately 24 months of interest.

On March 29, 2023, the Solis Gainesville II preferred equity investment was modified to adjust the interest rate. The interest rate of 14% remains effective through the first 24 months of the investment. Beginning on October 3, 2024, the investment will bear interest at a rate of 10% for 12 months. On October 3, 2025, the investment will again bear interest at a rate of 14% through maturity. Additionally, the amendment introduced an unused commitment fee of 10% on the unfunded portion of the investment's maximum loan commitment, which is effective January 1, 2023. Both the interest and unused commitment fee compound annually.

The balance on the Solis Gainesville II note was $22.3 million as of December 31, 2023, which includes $2.9 million of cumulative accrued interest and unused commitment fees as well as a discount of $0.2 million due to unamortized equity fees. During the year ended December 31, 2023, we recognized $2.8 million of interest income on the note. As of December 31, 2023, this note was fully funded. See Note 6 to our consolidated financial statements in Item 8 of this Annual Report on Form 10-K.

The Interlock

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 had a maximum principal amount of $70.1 million and a total maximum commitment, including accrued interest reserves, of $107.0 million. The mezzanine loan bore interest at a rate of 15.0% per annum, with $3.0 million of overrun advances which bore interest at a rate of 18.0%.

On May 19, 2023, we acquired The Interlock. The consideration for such acquisition included the repayment of the Company's outstanding $90.2 million mezzanine loan on the project. See Note 5 to our consolidated financial statements in Item 8 of this Annual Report on Form 10-K for further information regarding the acquisition. During the year ended December 31, 2023, we recognized $3.6 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 Kennesaw

On May 25, 2023, we entered into a $37.9 million preferred equity investment for the development of a multifamily property located in Marietta, Georgia. The investment has economic terms consistent with a note receivable, including a mandatory redemption or maturity on May 25, 2027, and it is accounted for as a note receivable. Our investment bears interest at a rate of 14.0% for the first 24 months. Beginning on May 25, 2025, the investment will bear interest at a rate of 9.0% for 12 months. On May 25, 2026, the investment will again bear interest at a rate of 14.0% through maturity. The interest compounds annually. We also earn an unused commitment fee of 11.0% on the unfunded portion of the investment's maximum commitment, which does not compound, and an equity fee on our commitment of $0.6 million to be amortized through redemption. The preferred equity investment is subject to a minimum interest guarantee of $13.1 million over the life of the investment, which represents approximately 27 months of interest.

The balance on the Solis Kennesaw note was $15.9 million as of December 31, 2023, which includes $2.7 million of cumulative accrued interest and unused commitment fees as well as a discount of $0.5 million due to unamortized equity fees. During the year ended December 31, 2023, we recognized $2.8 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.

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Solis Peachtree Corners

On July 26, 2023, we entered into a $28.4 million preferred equity investment for the development of a multifamily property located in Peachtree Corners, Georgia ("Solis Peachtree Corners"). The preferred equity investment has economic and other terms consistent with a note receivable, including a mandatory redemption feature effective on October 27, 2027. Our investment bears interest at a rate of 15.0% for the first 27 months. Beginning on November 1, 2025, the investment will bear interest at a rate of 9.0% for 12 months. On November 1, 2026, the investment will again bear interest at a rate of 15.0% through maturity. The interest compounds annually. We also earn an unused commitment fee of 10.0% on the unfunded portion of the investment's maximum loan commitment, which also compounds annually, and an equity fee on our commitment of $0.4 million to be amortized through redemption. The preferred equity investment is subject to a minimum interest guarantee of $12.0 million over the life of the investment, which represents approximately 30 months of interest.

The balance on the Solis Peachtree Corners note was $11.1 million as of December 31, 2023, which includes $1.4 million of cumulative accrued interest and unused commitment fees as well as a discount of $0.4 million due to unamortized equity fees. During the year ended December 31, 2023, we recognized $1.5 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.

The Allure at Edinburgh

On July 26, 2023, we entered into a $9.2 million preferred equity investment for the development of a multifamily property located in Chesapeake, Virginia ("The Allure at Edinburgh"). The preferred equity investment has economic and other terms consistent with a note receivable, including a mandatory redemption feature effective on January 16, 2028. Our investment bears interest at a rate of 15.0%, which does not compound. Upon The Allure at Edinburgh obtaining a certificate of occupancy, the investment will bear interest at a rate of 10.0%. The common equity partner in the development property holds an option to sell the property to us at a predetermined amount if certain conditions are met. We also hold an option to purchase the property at any time prior to maturity of the preferred equity investment, and at the same predetermined amount as the common equity partner's option to sell.

The balance on The Allure at Edinburgh note was $9.8 million as of December 31, 2023, which includes $0.6 million of cumulative accrued interest. During the year ended December 31, 2023, we recognized $0.6 million of interest income on the note. As of December 31, 2023, this note was fully funded. See Note 6 to our consolidated financial statements in Item 8 of this Annual Report on Form 10-K.

Acquisitions

On January 14, 2023, we acquired an additional 11% membership interest in the Constellation Energy Building, increasing our ownership interest to 90%, 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.

On May 19, 2023, we acquired The Interlock, a 311,000 square foot Class A commercial mixed-use asset in West Midtown Atlanta anchored by Georgia Tech. The Interlock consists of office and retail space as well as structured parking. For segment reporting purposes, we separated the office and retail components of The Interlock into two operating properties respectively presented in the office and retail real estate segments. We acquired the asset for total consideration of $214.1 million plus capitalized acquisition costs of $1.2 million. As part of this acquisition, we paid $6.1 million in cash, redeemed our outstanding $90.2 million mezzanine loan, issued $12.2 million of OP Units to the seller, and assumed the asset's senior construction loan of $105.6 million, that was paid off on the acquisition date using the proceeds of the TD term loan facility and an increase in borrowings under the revolving credit facility (each as defined below). We also assumed the leasehold interest in the underlying land owned by Georgia Tech. The ground lease has an expiration in 2117 after considering renewal options.

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Dispositions

During the year ended December 31, 2023, we realized $0.7 million of net gain on the sales of $1.2 million of properties:

Date of Disposition	Property	Sales Price (in millions)
April 11, 2023	Market at Mill Creek Outparcel(1)	$	0.8
September 20, 2023	Brooks Crossing Retail Outparcel	0.4
	Total	$	1.2

(1) The outparcel at Market at Mill Creek was disposed to satisfy the outstanding consideration payable for the acquisition of the noncontrolling interest in the property completed on December 31, 2022.

Tax Status

We have elected and qualified to be taxed as a REIT for U.S. federal income tax purposes commencing with our taxable year ended December 31, 2013. Our continued qualification as a REIT will depend upon our ability to meet, on a continuing basis, through actual investment and operating results, various complex requirements under the Internal Revenue Code of 1986, as amended (the "Code"), relating to, among other things, the sources of our gross income, the composition and values of our assets, our distribution levels, and the diversity of ownership of our capital stock. We believe that we are organized in conformity with the requirements for qualification as a REIT under the Code and that our manner of operation will enable us to maintain the requirements for qualification and taxation as a REIT for U.S. federal income tax purposes. In addition, we have elected to treat AHP Holding, Inc., which, through its wholly-owned subsidiaries, operates our construction, development, and third-party asset management businesses, as a taxable REIT subsidiary ("TRS").

As a REIT, we generally will not be subject to U.S. federal income tax on our net taxable income that we distribute currently to our stockholders. Under the Code, REITs are subject to numerous organizational and operational requirements, including a requirement that they distribute at least 90% of their REIT taxable income each year, determined without regard to the deduction for dividends paid and excluding any net capital gains. If we fail to qualify for taxation as a REIT in any taxable year and do not qualify for certain statutory relief provisions, our income for that year will be taxed at regular corporate rates, and we would be disqualified from taxation as a REIT for the four taxable years following the year during which we ceased to qualify as a REIT. Even if we qualify as a REIT for U.S. federal income tax purposes, we may still be subject to state and local taxes on our income and assets and to federal income and excise taxes on our undistributed income. Additionally, any income earned by our services company, and any other TRS we form in the future, will be fully subject to federal, state, and local corporate income tax.

Insurance

We carry comprehensive liability, fire, extended coverage, business interruption, and rental loss insurance covering all of the properties in our portfolio under a blanket insurance policy in addition to other coverage that may be appropriate for certain of our properties. For example, in December 2023, we experienced $1.9 million in damages as a result of flooding at our Chronicle Mill property and, subsequent to December 31, 2023, will receive insurance proceeds to cover these damages, as well as reimbursement for revenues lost from any vacated tenants. We believe the policy specifications and insured limits are appropriate and adequate for our properties given the relative risk of loss, the cost of the coverage, and industry practice; however, our insurance coverage may not be sufficient to fully cover our losses. We do not carry insurance for certain losses, including, but not limited to, losses caused by riots or war. Some of our policies, such as those covering losses due to terrorism and earthquakes, are insured subject to limitations involving large deductibles or co-payments and policy limits that may not be sufficient to cover losses for such events. In addition, all but one of the properties in our portfolio as of December 31, 2023 were located in Maryland, Virginia, North Carolina, South Carolina, Florida and Georgia, which are areas subject to an increased risk of hurricanes. While we will carry hurricane insurance on certain of our properties, the amount of our hurricane insurance coverage may not be sufficient to fully cover losses from hurricanes. We may reduce or discontinue hurricane, terrorism, or other insurance on some or all of our properties in the future if the cost of premiums for any of these policies exceeds, in our judgment, the value of the coverage discounted for the risk of loss. Also, if destroyed, we may not be able to rebuild certain of our properties due to current zoning and land use regulations. As a result, we may incur significant costs in the event of adverse weather conditions and natural disasters. In addition, our title insurance policies may not insure for the current aggregate market value of our portfolio, and we do not intend to increase our title insurance coverage as the market value of our portfolio increases. If we or one or more of our tenants experiences a loss that is uninsured or that exceeds policy

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limits, we could lose the capital invested in the damaged properties as well as the anticipated future cash flows from those properties. In addition, if the damaged properties are subject to recourse indebtedness, we would continue to be liable for the indebtedness, even if these properties were irreparably damaged. Furthermore, we may not be able to obtain adequate insurance coverage at reasonable costs in the future as the costs associated with property and casualty renewals may be higher than anticipated.  

Regulation

General

Our properties are subject to various covenants, laws, ordinances, and regulations, including regulations relating to common areas and fire and safety requirements. We believe that each of the properties in our portfolio has the necessary permits and approvals to operate its business.

Americans With Disabilities Act

Our properties must comply with Title III of the Americans with Disabilities Act of 1990 (the "ADA"), to the extent that such properties are "public accommodations" as defined by the ADA. Under the ADA, all public accommodations must meet federal requirements related to access and use by disabled persons. The ADA may require removal of structural barriers to access by persons with disabilities in certain public areas of our properties where such removal is readily achievable. Although we believe that the properties in our portfolio in the aggregate substantially comply with present requirements of the ADA, we have not conducted a comprehensive audit or investigation of all of our properties to determine our compliance, and we are aware that some particular properties may currently be in non-compliance with the ADA. Noncompliance with the ADA could result in the incurrence of additional costs to attain compliance, the imposition of fines, an award of damages to private litigants, and a limitation on our ability to refinance outstanding indebtedness. The obligation to make readily achievable accommodations is an ongoing one, and we will continue to assess our properties and to make alterations as appropriate in this respect.

Environmental Matters

Under various federal, state, and local laws and regulations relating to the environment, as a current or former owner or operator of real property, we may be liable for costs and damages resulting from the presence or discharge of hazardous or toxic substances, waste, or petroleum products at, on, in, under, or migrating from such property, including costs to investigate and clean up such contamination and liability for harm to natural resources. Such laws often impose liability without regard to whether the owner or operator knew of, or was responsible for, the presence of such contamination, and the liability may be joint and several. These liabilities could be substantial, and the cost of any required remediation, removal, fines, or other costs could exceed the value of the property and our aggregate assets. In addition, the presence of contamination or the failure to remediate contamination at our properties may expose us to third-party liability for costs of remediation and personal or property damage or materially adversely affect our ability to sell, lease, or develop our properties or to borrow using the properties as collateral. In addition, environmental laws may create liens on contaminated sites in favor of the government for damages and costs it incurs to address such contamination. Moreover, if contamination is discovered on our properties, environmental laws may impose restrictions on the manner in which property may be used or businesses may be operated, and these restrictions may require substantial expenditures.

Some of our properties contain, have contained, or are adjacent to or near other properties that have contained or currently contain storage tanks for the storage of petroleum products, propane, or other hazardous or toxic substances. Similarly, some of our properties were used in the past for commercial or industrial purposes, or are currently used for commercial purposes, that involve or involved the use of petroleum products or other hazardous or toxic substances, or are adjacent to or near properties that have been or are used for similar commercial or industrial purposes. As a result, some of our properties have been or may be impacted by contamination arising from the releases of such hazardous substances or petroleum products. Where we have deemed appropriate, we have taken steps to address identified contamination or mitigate risks associated with such contamination; however, we are unable to ensure that further actions will not be necessary. As a result of the foregoing, we could potentially incur material liability.

Environmental laws also govern the presence, maintenance, and removal of asbestos-containing building materials ("ACBM"), and may impose fines and penalties for failure to comply with these requirements or expose us to third-party liability. Such laws require that owners or operators of buildings containing ACBM (and employers in such buildings) properly manage and maintain the asbestos, adequately notify or train those who may come into contact with asbestos, and undertake special precautions, including removal or other abatement, if asbestos would be disturbed during renovation or demolition of a

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building. In addition, the presence of ACBM in our properties may expose us to third-party liability (e.g. liability for personal injury associated with exposure to asbestos). We are not presently aware of any material adverse issues at our properties including ACBM.

Similarly, environmental laws govern the presence, maintenance, and removal of lead-based paint in residential buildings, and may impose fines and penalties for failure to comply with these requirements. Such laws require, among other things, that owners or operators of residential facilities that contain or potentially contain lead-based paint notify residents of the presence or potential presence of lead-based paint prior to occupancy and prior to renovations and manage lead-based paint waste appropriately. In addition, the presence of lead-based paint in our buildings may expose us to third-party liability (e.g., liability for personal injury associated with exposure to lead-based paint). We are not presently aware of any material adverse issues at our properties involving lead-based paint.

In addition, the properties in our portfolio also are subject to various federal, state, and local environmental and health and safety requirements, such as state and local fire requirements. Moreover, some of our tenants may handle and use hazardous or regulated substances and wastes as part of their operations at our properties, which are subject to regulation. Such environmental and health and safety laws and regulations could subject us or our tenants to liability resulting from these activities. Environmental liabilities could affect a tenant’s ability to make rental payments to us. In addition, changes in laws could increase the potential liability for noncompliance. Our leases sometimes require our tenants to comply with environmental and health and safety laws and regulations and to indemnify us for any related liabilities. However, in the event of the bankruptcy or inability of any of our tenants to satisfy such obligations, we may be required to satisfy such obligations. In addition, we may be held directly liable for any such damages or claims regardless of whether we knew of, or were responsible for, the presence or disposal of hazardous or toxic substances or waste and irrespective of tenant lease provisions. The costs associated with such liability could be substantial and could have a material adverse effect on us.

When excessive moisture accumulates in buildings or on building materials, mold growth may occur, particularly if the moisture problem remains undiscovered or is not addressed over a period of time. Some molds may produce airborne toxins or irritants. Indoor air quality issues can also stem from inadequate ventilation, chemical contamination from indoor or outdoor sources, and other biological contaminants such as pollen, viruses, and bacteria. Indoor exposure to airborne toxins or irritants above certain levels can be alleged to cause a variety of adverse health effects and symptoms, including allergic or other reactions. As a result, the presence of significant mold or other airborne contaminants at any of our properties could require us to undertake a costly remediation program to contain or remove the mold or other airborne contaminants from the affected property or increase indoor ventilation. In addition, the presence of significant mold or other airborne contaminants could expose us to liability from our tenants, employees of our tenants, or others if property damage or personal injury occurs. We are not presently aware of any material adverse indoor air quality issues at our properties.

Competition

We compete with a number of developers, owners, and operators of retail, office, and multifamily real estate, many of which own properties similar to ours in the same markets in which our properties are located and some of which have greater financial resources than we do. In operating and managing our portfolio, we compete for tenants based on a number of factors, including location, rental rates, security, flexibility, and expertise to design space to meet prospective tenants’ needs and the manner in which the property is operated, maintained, and marketed. As leases at our properties expire, we may encounter significant competition to renew or re-lease space in light of the large number of competing properties within the markets in which we operate. As a result, we may be required to provide rent concessions or abatements, incur charges for tenant improvements and other inducements, including early termination rights or below-market renewal options, or we may not be able to timely lease vacant space.

We also face competition when pursuing development, acquisition, and lending opportunities. Our competitors may be able to pay higher property acquisition prices, may have private access to opportunities not available to us, may have more financial resources than we do, and may otherwise be in a better position to acquire or develop a property. Competition may also have the effect of reducing the number of suitable development and acquisition opportunities available to us or increasing the price required to consummate a development or acquisition opportunity.

In addition, we face competition in our construction business from other construction companies in the markets in which we operate, including small local companies and large regional and national companies. In our construction business, we compete for construction projects based on several factors, including cost, reputation for quality and timeliness, access to machinery and equipment, access to and relationships with high-quality subcontractors, financial strength, knowledge of local markets, and project management abilities. We believe that we compete favorably on the basis of the foregoing factors and that our construction business is well-positioned to compete effectively in the markets in which we operate. However, some of the

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construction companies with which we compete have different cost structures and greater financial and other resources than we do, which may put them at an advantage when competing with us for construction projects. Competition from other construction companies may reduce the number of construction projects that we are hired to complete and increase pricing pressure, either of which could reduce the profitability of our construction business.

Human Capital

As of December 31, 2023, we had 164 employees. We are committed to providing each employee with a safe, welcoming, and inclusive work environment and culture that enables them to contribute fully and develop to their highest potential. We invest heavily in our employees by providing quality training and learning opportunities; promoting inclusion and diversity; and upholding a high standard of ethics and respect for human rights.

Attracting, developing, and retaining team members is crucial to executing our strategy. We offer a comprehensive total rewards program aimed at the varying health, home-life, and financial services. This program includes market-competitive pay, broad-based stock grants and bonuses, healthcare benefits with company paid premiums, retirement savings plans, paid time off, paid parental leave, flexible work schedules, free flu vaccinations, an Employee Assistance Program and other mental health services. Additionally, we invest in developing employees through programs such as the High-Performance Leadership program, to help ensure they have a strong pipeline of future leaders.

Additional information regarding our activities related to our people and sustainability, as well as our workforce diversity data, can be found in our latest Sustainability Report, which is located on our website at https://armadahoffler.com/sustainability/. The Sustainability Report is updated periodically. This website address is intended to be an inactive textual reference only. None of the information on, or accessible through, our website is part of this Form 10-K or is incorporated by reference herein.

Corporate Information

Our principal executive office is located at 222 Central Park Avenue, Suite 2100, Virginia Beach, Virginia 23462 in the Armada Hoffler Tower at the Town Center of Virginia Beach. In addition, we have a construction office located at 1300 Thames Street, Suite 30, Baltimore, Maryland 21231 in Thames Street Wharf at Harbor Point. The telephone number for our principal executive office is (757) 366-4000. We maintain a website located at ArmadaHoffler.com. The information on, or accessible through, our website is not incorporated into and does not constitute a part of this Annual Report on Form 10-K or any other report or document we file with or furnish to the SEC.

Available Information

We file our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and all amendments to those reports with the SEC. You may obtain copies of these documents by accessing the SEC’s website at www.sec.gov. In addition, as soon as reasonably practicable after such materials are furnished to the SEC, we make copies of these documents available to the public free of charge through our website or by contacting our Corporate Secretary at the address set forth above under "—Corporate Information."

Our Corporate Governance Guidelines, Code of Business Conduct and Ethics, and the charters of our audit committee, compensation committee and nominating and corporate governance committee are all available in the Corporate Governance section of the Investor Relations section of our website. Any amendment to or waiver of our Code of Business Conduct and Ethics will be disclosed in the Corporate Governance section of the Investor Relations section of our website within four business days of the amendment or waiver. In addition, we maintain a variety of other governance documents, including, among others, a Human Rights Policy, an Environmental Policy, a Vendor Conduct Policy, and the charter of our Sustainability Committee, all of which are available in the Corporate Governance section of the Investor Relations section of our website.

Financial Information

For required financial information related to our operations, please refer to our consolidated financial statements, including the notes thereto, included with this Annual Report on Form 10-K.

Item 1A.    Risk Factors  

Set forth below are the risks that we believe are material to our stockholders. You should carefully consider the following risks in evaluating our Company and our business. The occurrence of any of the following risks could materially and

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adversely impact our financial condition, results of operations, cash flow, the market price of shares of our common stock, and our ability to, among other things, satisfy our debt service obligations and to make distributions to our stockholders, which in turn could cause our stockholders to lose all or a part of their investment. Some statements in this Annual Report on Form 10-K, including statements in the following risk factors constitute forward-looking statements. Please refer to the section entitled "Special Note Regarding Forward-Looking Statements" at the beginning of this Annual Report on Form 10-K.

Risks Related to Our Business

Adverse economic and geopolitical conditions and dislocations in the credit markets 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 business has been, and may in the future be, affected by market and economic challenges experienced by the U.S. economy or the real estate industry as a whole. Such conditions may materially and adversely affect us as a result of the following potential consequences, among others: 

•decreased demand for retail, office, and multifamily space, which would cause market rental rates and property values to be negatively impacted;

•reduced values of our properties may limit our ability to dispose of assets at attractive prices or obtain debt financing secured by our properties and may reduce the availability of unsecured loans;

•our ability to obtain financing on terms and conditions that we find acceptable, or at all, may be limited, which could reduce our ability to pursue acquisition and development opportunities and refinance existing debt, reduce our returns from our acquisition and development activities, and increase our future debt service expense; and

•one or more lenders under our amended credit facility (as defined below) could refuse to fund their financing commitment to us or could otherwise fail to do so, and we may not be able to replace the financing commitment of any such lenders on favorable terms or at all.

If the U.S. economy experiences an economic downturn, we may see increases in bankruptcies and defaults by our tenants, and we may experience higher vacancy rates and delays in re-leasing vacant space, which could negatively impact our financial condition, results of operations, cash flow, cash available for distribution, and ability to service our debt obligations.

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 business and growth strategy involves the development and selective acquisition of retail, office, and multifamily properties. We may expend significant management time and other resources, including out-of-pocket costs, in pursuing these investment opportunities. Our ability to complete development projects or acquire properties on favorable terms, or at all, may be exposed to the following significant risks: 

•we may incur significant costs and divert management attention in connection with evaluating and negotiating potential development opportunities and acquisitions, including those that we are subsequently unable to complete;

•we have agreements for the development or acquisition of properties that are subject to conditions, which we may be unable to satisfy; and

•we may be unable to obtain financing on favorable terms or at all.

If we are unable to identify attractive investment opportunities and successfully develop new properties, our results of operations, cash flow, and growth prospects could be materially and adversely affected.

The success of our activities to design, construct, and develop properties in which we will retain an ownership interest is dependent, in part, on the availability of suitable undeveloped land at acceptable prices as well as our having sufficient liquidity to fund investments in such undeveloped land and subsequent development.

Our success in designing, constructing, and developing projects for our own account depends, in part, upon the continued availability of suitable undeveloped land at acceptable prices. The availability of undeveloped land for purchase at favorable prices depends on a number of factors outside of our control, including the risk of competitive over-bidding on land and governmental regulations that restrict the potential uses of land. If the availability of suitable land opportunities decreases, the number of development projects we may be able to undertake could be reduced. In addition, our ability to make land

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purchases will depend upon our having sufficient liquidity or access to external sources of capital to fund such purchases. Thus, the lack of availability of suitable land opportunities and insufficient liquidity to fund the purchases of any such available land opportunities could have a material adverse effect on our results of operations 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.

We engage in development and redevelopment activities and will be subject to the following risks associated with such activities: 

•unsuccessful development or redevelopment opportunities could result in direct expenses to us and cause us to incur losses;

•construction or redevelopment costs of a project may exceed original estimates, possibly making the project less profitable than originally estimated, or unprofitable;

•the inability to obtain or delays in obtaining necessary governmental or quasi-governmental permits and authorizations could result in increased costs or abandonment of the project if necessary permits or authorizations are not obtained;

•delayed construction may give tenants the right to terminate pre-development leases, which may adversely impact the financial viability of the project;

•occupancy rates, rents and concessions of a completed project may fluctuate depending on a number of factors and may not be sufficient to make the project profitable; and

•the availability and pricing of financing to fund our development activities on favorable terms or at all may result in delays or even abandonment of certain development activities.

These risks could result in substantial unanticipated delays or expenses and, under certain circumstances, could prevent completion of development or redevelopment activities once undertaken, any of which could have a material adverse effect on 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.

The majority of the properties in our portfolio are located in Virginia, Maryland, and North Carolina, which expose us to greater economic risks than if we owned a more geographically diverse portfolio. As of December 31, 2023, our properties in the Virginia, Maryland. and North Carolina markets represented approximately 45%, 25%, and 14%, respectively, of the total net operating income of the properties in our portfolio. Furthermore, many of our properties are located in the Town Center of Virginia Beach and Harbor Point at Baltimore, and net operating income from each represented 20% and 18%, respectively, of our total net operating income for the year ended December 31, 2023. As a result of this geographic concentration, we are particularly susceptible to adverse economic, regulatory or other conditions in the Virginia, Maryland, and North Carolina markets (such as periods of economic slowdown or recession, business layoffs or downsizing, industry slowdowns, relocations of businesses, increases in real estate and other taxes, and the cost of complying with governmental regulations or increased regulation), as well as to natural disasters that occur in these markets (such as hurricanes and other events). For example, the markets in Virginia, Maryland, and North Carolina in which many of the properties in our portfolio are located contain high concentrations of military personnel and operations, and a reduction of the military presence or cuts in defense spending in these markets could have a material adverse effect on us. If there is a downturn in the economy in Virginia, Maryland, or North Carolina, our operations, revenue, and cash available for distribution, including cash available to pay distributions to our stockholders, could be materially and adversely affected. We cannot assure you that these markets will grow or that underlying real estate fundamentals will be favorable to owners and operators of retail, office, or multifamily properties. Our operations may also be adversely affected if competing properties are built in these markets. Moreover, submarkets within any of our target markets may be dependent upon a limited number of industries. Any adverse economic or real estate developments in our markets, or any decrease in demand for retail, office, or multifamily space resulting from the regulatory environment, business climate or energy or fiscal problems, could materially and adversely affect our financial condition, results of operations, cash flow, cash available for distribution, and ability to satisfy our debt service obligations.  

We may not be able to rebuild our existing properties to their existing specifications if we experience a substantial or comprehensive loss of such properties, including as a result of hurricanes or other disasters.

In the event that we experience a substantial or comprehensive loss of one of our properties, we may not be able to rebuild such property to its existing specifications. For example, all but one of the properties in our portfolio as of

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December 31, 2023 are located in Maryland, Virginia, North Carolina, South Carolina, Georgia, and Florida, which are areas particularly susceptible to hurricanes. While we carry insurance on certain of our properties, the amount of our insurance coverage may not be sufficient to fully cover losses from hurricanes and will be subject to limitations involving large deductibles or co-payments. Further, reconstruction or improvement of properties would likely require significant upgrades to meet zoning and building code requirements. Environmental and legal restrictions could also restrict the rebuilding of our properties.

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.

As of December 31, 2023, we had total debt of approximately $1.4 billion, including amounts drawn under our amended credit facility, a substantial portion of which is guaranteed by our Operating Partnership, and we may incur significant additional debt to finance future acquisition and development activities. Excluding unamortized fair value adjustments and debt issuance costs, the aggregate outstanding principal balance of our debt was $1.4 billion as of December 31, 2023. Payments of principal and interest on borrowings may leave us with insufficient cash resources to operate our properties or to pay the dividends currently contemplated or necessary to maintain our REIT qualification. Our level of debt and the limitations imposed on us by our debt agreements could have significant adverse consequences, including the following:  

•our cash flow may be insufficient to meet our required principal and interest payments;

•we may be unable to borrow additional funds as needed or on favorable terms, which could, among other things, adversely affect our ability to meet operational needs;

•we may be unable to refinance our indebtedness at maturity or the refinancing terms may be less favorable than the terms of our original indebtedness, particularly if interest rates remain elevated;

•we may be forced to dispose of one or more of our properties, possibly on unfavorable terms or in violation of certain covenants to which we may be subject;

•we may default on our obligations, in which case the lenders or mortgagees may have the right to foreclose on any properties that secure the loans or collect rents and other income from our properties;

•we may violate restrictive covenants in our loan documents, which would entitle the lenders to accelerate our debt obligations or reduce our ability to pay, or prohibit us from paying, distributions to our stockholders; and

•our default under any loan with cross-default provisions could result in a default on other indebtedness.

If any one of these events were to occur, our financial condition, results of operations, cash flow, cash available for distribution, and ability to service our debt obligations could be materially and adversely affected. Furthermore, foreclosures could create taxable income without accompanying cash proceeds, which could hinder our ability to meet the REIT distribution requirements imposed by the Code. See "Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources."

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

Morningstar DBRS is expected to periodically evaluate our debt levels and other factors, which likely will include Morningstar DBRS’s assessment of our financial strength, liquidity, capital structure, asset quality, and sustainability of cash flow and earnings. Due to changes in these factors and market conditions, we may not be able to maintain our current credit rating, which could adversely affect our cost of funds and related margins, liquidity, and access to the debt capital markets.

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.

We have incurred, and may in the future incur, additional indebtedness that bears interest at a variable rate. An increase in interest rates would increase our interest expense and increase the cost of refinancing existing debt and issuing new debt, which would adversely affect our cash flow and ability to make distributions to our stockholders. In addition, if we need to repay existing debt during periods of rising interest rates, we could be required to liquidate one or more of our investments at times that may not permit realization of the maximum return on such investments. The effect of prolonged interest rate increases could adversely impact our ability to make acquisitions and develop properties.

Subject to maintaining our qualification as a REIT, we expect to continue to enter into hedging transactions to protect us from the effects of interest rate fluctuations on floating rate debt. Our existing hedging transactions have included, and future hedging transactions may include, entering into interest rate cap agreements or interest rate swap agreements, which involve

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risk. Our failure to hedge effectively against interest rate changes may adversely affect our financial condition, results of operations, cash flow, cash available for distribution, and ability to service our debt obligations. Additionally, as a result of rising interest rates, the cost of hedging transactions has increased significantly and may continue to increase.

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.

In order to maintain our qualification as a REIT, we are required under the Code to, among other things, distribute annually at least 90% of our REIT taxable income, determined without regard to the dividends paid deduction and excluding any net capital gain. In addition, we will be subject to income tax at regular corporate rates to the extent that we distribute less than 100% of our REIT taxable income, including any net capital gains. Because of these distribution requirements, we may not be able to fund future capital needs, including any necessary capital expenditures, from operating cash flow. Consequently, we intend to rely on third-party sources to fund our capital needs. We may not be able to obtain such financing on favorable terms or at all and any additional debt we incur will increase our leverage and likelihood of default. Our access to third-party sources of capital depends, in part, on: 

•general market conditions;

•the market’s perception of our growth potential;

•our current debt levels;

•our current and expected future earnings;

•our cash flow and cash distributions; and

•the market price per share of our common stock and Series A Preferred Stock.

If we cannot obtain capital from third-party sources, we may not be able to acquire or develop properties when strategic opportunities exist, meet the capital and operating needs of our existing properties, satisfy our debt service obligations 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.

As of December 31, 2023, approximately 3.4% of the square footage of the stabilized properties in our office and retail portfolios was available. Additionally, 2.0% and 5.4% of the ABR in our office portfolio was scheduled to expire in 2024 and 2025, respectively, and 6.5% and 10.8% of the ABR in our retail portfolio was scheduled to expire in 2024 and 2025, respectively. We cannot assure you that new leases will be entered into, that leases will be renewed, or that our properties will be re-leased at net effective rental rates equal to or above the current average net effective rental rates or that substantial rent abatements, tenant improvements, early termination rights or below-market renewal options will not be offered to attract new tenants or retain existing tenants. In addition, our ability to lease our multifamily properties at favorable rates, or at all, may be adversely affected by the increase in supply of multifamily properties in our target markets. Our ability to lease our properties depends upon the overall level of spending in the economy, which is ad