Quarterlytics / Real Estate / REIT - Diversified / Armada Hoffler Properties, Inc.

Armada Hoffler Properties, Inc.

ahh · NYSE Real Estate
Claim this profile
Ticker ahh
Exchange NYSE
Sector Real Estate
Industry REIT - Diversified
Employees 148
← All annual reports
FY2022 Annual Report · Armada Hoffler Properties, Inc.
Sign in to download
Loading PDF…
2
2
0
0
2
2
2
2

A
A
N
N
N
N
U
U
A
A
L
L

R
R
E
E
P
P
O
O
R
R
T
T

|
|

A
A
R
R
M
M
A
A
D
D
A
A
H
H
O
O
F
F
F
F
L
L
E
E
R
R

|
|

N
N
Y
Y
S
S
E
E
:
:

A
A
H
H
H
H

WWW.ARMADAHOFFLER.COM

WWW.ARMADAHOFFLER.COM

2022
2022
ANNUAL 
ANNUAL
REPORT
REPORT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
CORPORATE  

INFORMATION

BOARD OF 

DIRECTORS

Daniel A. Hoffler 

EXECUTIVE 

MANAGEMENT

SHAREHOLDER 

INFORMATION

Louis S. Haddad 

Corporate Office 

Executive Chairman of the 

President and Chief Executive 

Armada Hoffler 

Board

Officer 

Louis S. Haddad 

Matthew T. Barnes-Smith 

President and Chief Executive 

Chief Financial Officer and 

Officer 

Treasurer/Secretary 

Eva S. Hardy  

Shawn J. Tibbetts 

Lead Independent Director 

Chief Operating Officer 

James C. Cherry  

Eric E. Apperson 

The Edgeworth Building 

Independent Director 

President of Construction and 

2100 East Cary Street, Suite 201  

George F. Allen  

Development 

Independent Director

Shelly R. Hampton 

President of Asset Management

222 Central Park Avenue 

Suite 2100  

Virginia Beach, VA 23462 

757.366.4000

Independent Registered Public 

Accounting Firm 

Ernst & Young LLP 

Richmond, VA 23223 

804.344.6000

Transfer Agent 

Broadridge Corporate  

Issuer Solutions 

51 Mercedes Way 

Brentwood, NY 11717

Investor Services 

For questions regarding 

security ownership or to request 

printed information, please 

contact investorrelations@

armadahoffler.com or visit 

ir.armadahoffler.com.

James A. Carroll 

Independent Director 

Dennis H. Gartman  

Independent Director

A. Russell Kirk 

Director 

John W. Snow  

Independent Director

EQUIT Y 
CAPITALIZ ATION* 

$1.2B

2

 ARMADA HOFFLER   |  2022 ANNUAL REPORT      11

 
COMPANY OVERVIEW

Armada Hoffler is a vertically integrated, self-managed real estate 
investment trust with more than four decades of experience 
developing, building, acquiring, and managing high-quality office, 
retail, and multifamily properties located primarily in the Mid-Atlantic 
and Southeastern United States. The company also provides general 
construction and development services to third-party clients, in 
addition to developing and building properties to be placed in our 
stabilized portfolio. 

OUR TEAM
The Armada Hoffler team has 
strong institutional knowledge 
ensuring the company is 
operating efficiently, while 
developing sustainable projects 
and maintaining a continued 
focus on shareholder value 
creation through our healthy 
portfolio and tremendous 
growth. At Armada Hoffler, we 
think of ourselves as a unique 
type of REIT. 

CURRENT 
PORTFOLIO

OCCUPANCY

Stabilized Assets

97%

Portfolio also includes 
properties in Indiana (1).

2

6

8

35

1

4

DEVELOPMENT

PORTFOLIO

Current Development Pipeline 

Rental  Square Feet

Multifamily  Units

$669M

6M

2,254

*as of 12/31/22

 ARMADA HOFFLER   |  2022 ANNUAL REPORT      3    

A MESSAGE TO OUR  
SHAREHOLDERS

Armada Hoffler is pleased to report that we saw 
our best operational metrics in our company’s 
history in 2022. The primary drivers of this 
outperformance were increased NOI from office 
properties, robust same store NOI, and early 
payoff of a preferred equity asset, which triggered 
a minimum interest payment. With a continued  
eye on a strong balance sheet, we are excited 
that our success across all verticals provides 
an enhanced company stability, as well as 
opportunities for growth.

Armada Hoffler’s leasing 
activity in 2022 reached 
the highest velocity in 
company history across 
all sectors. Our occupancy 
within our stabilized assets 
stood at 97% at the end  
of 2022.

The development pipeline continues to strengthen 

with projects such as  Chronicle Mill and Southern 

Post well-underway. 

We also see many off-market acquisition 
opportunities within reach. This performance, as 
well as other opportunities developing in the near 
term, gives us confidence that Armada Hoffler’s 
metrics will expand beyond 2022’s  
many successes. 

Of course, we cannot continue to reach new 
heights without the tremendous depth of expertise 
within our organization.  Our employees are the 
foundation of this company, and we are proud to 
be 12.3% management owned. This past year, we 
invested in putting 62 of our managers through 
managerial training to support their leadership 
skills and growth. Our high-performance in 
leadership program continues to equip attendees 
with the skills they need to lead within their 
departments and across the company. We are 
proud to have announced our second cohort group 
at the end of 2022. Additionally, Armada Hoffler 
enhanced employee benefits through efforts 
such as expanding our parental leave policy and 

implementing a hybrid work environment. In 

recognition of our team and their successes, we 

were awarded two Best Places to Work awards 

across the state of Virginia. Several individual 

team members were also recognized with various 

prestigious awards. 

 Let’s take some time to reflect on the remarkable 

accomplishments of 2022. 

4

4

STRATEGY 
As Armada Hoffler’s largest equity holder, our 
management team remains committed to 
generating long-term value for all shareholders.  
To that end, our company strategies serve to 
support these values:

• 

Invest in and develop top quality real estate in 
high barrier-to-entry locations to maintain high 
occupancy and achieve premium rental rates 
through varying economic cycles.

•  Capitalize on public-private partnership, joint 

venture, mezzanine lending, equity investment, 
acquisition, and disposition opportunities.

•  Maintain full-service capabilities across 
the real estate spectrum – development, 
construction, and asset management – to 
execute on a range of opportunities throughout 
the investment cycle.

•  Remain committed to sustainable and 
efficient environmental, social, and 
governance practices.

•  Create value and maximize the wholesale-to-

retail spread in development projects with our 
development and construction expertise.

•  Maintain a strong balance sheet to provide 

access to low-cost capital and the flexibility to 
make opportunistic investments.

2022 COMPANY 
HIGHLIGHTS 
2022 PERFORMANCE  
13%
12% 

Increase from our 
2022 guidance 

Dividend increase 

Record net operating income from our multifamily 
properties combined with robust leasing in the 
office and retail sector, as well as off-market 
acquisitions, all played a role in this outstanding 
achievement.

LEASING  HISTORIC HIGH

97% 

leased of all three of the asset classes in our 
stabilized portfolio 

The multifamily segment performance has been nothing 
short of spectacular with every 2022 metric registering the 
highest increases in year-over-year results that we have 
experienced in our history.  

2022 FULL YEAR SAME STORE NE T 
OPERATING INCOME  

5.6% 

GAAP Basis

6.7% 

Cash  Basis

2022 FULL YEAR RELEASING SPREADS 
ON COMMERCIAL PORTFOLIO  

7.1% 

GAAP Basis

2.7% 

Cash  Basis

 ARMADA HOFFLER   |  2022 ANNUAL REPORT      5    

DEVELOPMENT AND CONSTRUCTION 
PROJECTS
Armada Hoffler’s goal remains to develop and invest in the 
highest quality real estate in high-barrier-to-entry locations to 
maintain a maximum occupancy and achieve premium rental 
rates through varying economic cycles. It was an impressive year 
for our adaptive reuse development, Chronicle Mill. This unique 
rehabilitation project has been a resounding success and was over 
93% leased at the end of 2022, with construction being materially 
complete on the site. 

 CHRONICLE MILL 

This project is a historic 
textile mill in Belmont, 
North Carolina with  
238 apartments and  
14,900 SF of 
commercial space

THIRD PART Y CONSTRUCTION 
PROJECTS

Our construction teams celebrated $7.7 million  
in third party gross profits. We have significant 
value creation underway and, most importantly, 
the projects are being executed in a manner  
that is consistent with the underwriting. 

OTHER PROPERTIES DELIVERED

 GAINESVILLE APARTMENTS 

$52M multifamily joint venture with Terwilliger  

Pappas in Gainesville, GA with 223 apartments. 

CONSTRUCTION UNDERWAY

 T. ROWE PRICE 

$264M global headquarters 
office project in Baltimore, MD 
with 553,000 SF of office space 
and 20,200 SF of retail space 

 SOUTHERN POST 

Mixed-use project in Roswell, GA  

with 95,000 SF of office space, 

42,000 SF of retail space,  

128 apartment units, and  

9 townhomes

 ALLIED | HARBOR POINT 

Mixed-use project in Baltimore, MD 

with 16,000 SF of retail space 
and 312 apartment units

6

STRATEGIC ACQUISITIONS  
& DISPOSITIONS

ACQUISITIONS

With the acquisition of the Class A+ mixed-use 
Constellation building, we added a large  
mixed-use property to our expanding portfolio in 
Baltimore’s Harbor Point. Pembroke Square,  
124k square feet of retail, adjacent to Town Center 
of Virginia  Beach.

DISPOSITIONS 

In 2021 we announced the closing of the $75 
million sale of student housing property Nine 
East 33rd in Baltimore, Maryland. Since then, we 
have completely vacated the student housing 
space with the sales of Hoffler Place and Summit 
Place, and have focused our investment efforts 
on more profitable and stable opportunities within 
the mixed-use, conventional multifamily, and 
grocery anchored shopping centers. As a result of 
this decision, we can provide a steady source of 
inexpensive capital to fund more development  
and acquisition opportunities. 

OTHER DISPOSITIONS

• 

$24M retail sale in Durham, NC at a 4.0% exit  
cap rate 

• 

$150M sale of The Residences at Annapolis 

Junction at a 4.2% exit cap rate

The Constellation Building 
complements our existing Harbor 
Point portfolio and development 
and features:

444,000 

Square feet of Class A office space 

103

Multifamily units

38,500

Square feet of retail space 

750

Parking spaces

 ARMADA HOFFLER   |  2022 ANNUAL REPORT      7    

SUSTAINABILITY 
Armada Hoffler always strives to conduct our business, the 
development, construction, and operation of new and existing 
buildings, in a manner that contributes to positive economic, social, 
and environmental outcomes for our customers, shareholders, 
employees, and communities we serve. We are guided by our 
sustainability roadmap, which includes our three priority pillars: 
People, Planet, and Communities. While there is always more to do,  
I am proud of the achievements we made in 2022. 

In 2022, we continued to improve our employee benefits such as 
expanding our paid parental leave policy. We also continued to invest 
in developing our people. We engaged Rice & Associates to put 62 of 
our managers through leadership training and announced our second 
High Performance Leadership program to help ensure we have a 
strong pipeline of future leaders. Additionally, we continued to make 
progress in our diversity, equity, and inclusion programs to spread 
a wider net for diverse talent. We remain more committed than ever 
to minimizing our impact on the environment by aligning with our 
Climate Change Strategic Plan to help us reduce our greenhouse gas 
(GHG) emissions and manage the impacts of climate change on our 
business. And lastly, supporting the communities we do business in. 
From our earliest days, Armada Hoffler has been grounded in local 
neighborhoods, cities, and towns. We remain committed to working 
with local nonprofits, academic institutions, and civic leaders to make 
our communities a better place to work, live, and play. We continued 
to support partners such as the Ronald McDonald House of Maryland 
and other organizations that provide a helping hand to families during 
these trying times.

Underlying all we do is our commitment to conducting our business 
ethically and with integrity. I believe this starts with strong governance 
practices and leadership from our board of directors, whom I want 

to thank for their ongoing support and guidance during a year that 

continued to present challenges for business, society, and the 

environment. Going forward, we remain committed to transparency  

and disclosure. I encourage you to read our Sustainability Report at 

www.armadahoffler.com/sustainability.

8

SUSTAINABILIT Y 
ACHIEVEMENTS 
& COMMUNIT Y 
OUTREACH

3,796

TOTAL TRAINING 
HOURS

539

TOTAL HOURS OF 
HEALTH & SAFE T Y 
TRAINING

INTRODUCED 
HYBRID WORK 
SCHEDULE

UPDATED PAID 
PARENTAL LEAVE 
POLICY 

$114,618

CORPORATE 
CH ARITABLE 
DONATIONS

ADDED JUNE TEENTH 
TO PAID HOLIDAY 
SCHEDULE

$9,731

EMPLOYEE 
GIVING

902

EMPLOYEE 
VOLUNTEER HOURS

 ARMADA HOFFLER   |  2022 ANNUAL REPORT      9    

LOOKING AHEAD

Our 2022 successes are represented by our strong underlying portfolio; high occupancy, sustained 
renewal spreads, weighted average lease terms, tenant diversification, and credit quality. This 
foundation will continue to produce healthy NOI growth in each of our asset classes and record  
bottom-line per share earnings. It is for these reasons, along with safe and reliable construction  
services, supported by seamless execution of high-quality development projects, we will continue to 

create shareholder value for years to come.

GRATITUDE
To all of our stakeholders – investors, tenants, partners, clients, board of directors, and our exceptional 

team – thank you for your continued support. I am proud to be associated with each one of you, with our 

talented workforce and depth of institutional knowledge, we look to 2023 as another prosperous year.

Sincerely,

LOUIS  S. HADDAD 

President and Chief  Executive Officer

10

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 FORM 10-K

☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2022 
or
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 
1934
For the transition period from                      to                     
Commission file number 001-35908 
_________________________________________________________________
ARMADA HOFFLER PROPERTIES, INC. 

(Exact Name of Registrant as Specified in Its Charter)
_________________________________________________________________

Maryland
(State or other jurisdiction of incorporation or organization)

46-1214914
(I.R.S. Employer Identification No.)

222 Central Park Avenue , Suite 2100

Virginia Beach , Virginia
(Address of principal executive offices)

23462
(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

Common Stock, $0.01 par value per share

6.75% Series A Cumulative Redeemable 
Perpetual Preferred Stock, $0.01 par value per 
share

Trading Symbol(s)
AHH

AHHPrA

Name of each exchange on which registered
New York Stock Exchange

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

Non-accelerated filer

x

☐

Accelerated filer

☐

Smaller reporting company ☐

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or 
revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control 
over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its 
audit report. x
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing 
reflect the correction of an error to previously issued financial statements. ¨
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by 
any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    Yes  ☐    No x

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

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

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

Documents Incorporated by Reference

Armada Hoffler Properties, Inc.

Form 10-K
For the Fiscal Year Ended December 31, 2022 

Table of Contents

PART I 

Item 1. 

Business.

Risk Factors.

Item 1A. 
Item 1B.  Unresolved Staff Comments.
Item 2. 

Properties.

Item 3. 

Item 4. 
PART II 
Item 5. 

Item 6. 

Legal Proceedings.

Mine Safety Disclosures.

Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity 
Securities.
[Reserved].

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Item 7. 
Item 7A.  Quantitative and Qualitative Disclosures About Market Risk.
Financial Statements and Supplementary Data.
Item 8. 

Item 9. 

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

Controls and Procedures.

Item 9A. 
Item 9B.  Other Information.
Item 9C.
PART III 

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

Item 10. 

Item 11. 

Item 12. 

Item 13. 

Item 14. 
PART IV 

Item 15. 

Directors, Executive Officers and Corporate Governance.

Executive Compensation.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

Certain Relationships and Related Transactions, and Director Independence.

Principal Accountant Fees and Services.

Exhibits and Financial Statement Schedules.

Item 16.
Index to Exhibits

Form 10-K Summary.

Signatures 

i

1

15

40

40

40

40

41

42

42

60

60

60

60

61

61

62

62

62

62

62

63

63
64

66

 
 
 
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

The following discussion should be read in conjunction with the financial statements and notes thereto appearing 

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

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

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

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

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

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

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

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

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

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

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

our failure to successfully operate developed and acquired properties;

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

fluctuations in interest rates;

the impact of inflation, including increases in operating costs

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

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

financial market fluctuations;

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

the competitive environment in which we operate;

ii

 
 
•

•

•

•

•

•

•

•

•

decreased rental rates or increased vacancy rates;

conflicts of interests with our officers and directors;

lack or insufficient amounts of insurance;

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

other factors affecting the real estate industry generally;

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

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

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

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

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

Summary Risk Factors

Our business is subject to a number of risks, including risks that may prevent us from achieving our business 

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

•

•

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

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

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

•

•

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

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

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

•

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

iii

 
•

•

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

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

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

•

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

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

• Most of our costs, such as operating and general and administrative expenses, interest expense, and real estate 

acquisition and construction costs, are subject to inflation.

•

•

•

•

•

•

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

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

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

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

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

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

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

iv

 
Item 1. 

Business. 

Our Company

PART I

References to "we," "our," "us," and "our company" refer to Armada Hoffler Properties, Inc., a Maryland corporation, 

together with our consolidated subsidiaries, including Armada Hoffler, L.P., a Virginia limited partnership (the "Operating 
Partnership"), of which we are the sole general partner.

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

We were formed on October 12, 2012 under the laws of the State of Maryland and are headquartered in Virginia 

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

2022 and Recent Highlights

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

•

•

•

•

•

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

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

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

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

Office NOI of $47.7 million compared to $28.8 million  
•
•
Retail NOI of $63.7 million compared to $57.6 million 
• Multifamily NOI of $35.1 million compared to $37.3 million 

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

Office same store NOI of $26.4 million compared to $26.5 million 
•
•
Retail same store NOI of $55.0 million compared to $51.6 million 
• Multifamily same store NOI of $27.2 million compared to $24.8 million 

1

 
 
 
 
 
 
 
•

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

Office occupancy at 96.7% compared to 96.8%
•
•
Retail occupancy at 97.9% compared to 96.0% 
• Multifamily occupancy at 96.1% compared to 97.4% 

•

•

•

•

•

•

•

•

•

•

•

•

•

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

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

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

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

Completed $177 million of sales of noncore assets 

•
•
•

The Residences at Annapolis Junction in Baltimore for $150 million
Two outparcels at North Pointe in Durham, North Carolina for $23.9 million
Two outparcels at Sandbridge Commons in Virginia Beach for $3.5 million

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

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

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

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

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

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

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

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

For definitions and discussion of FFO, Normalized FFO, NOI, and same store NOI, see the section below entitled 

"Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations."

2

 
Our Competitive Strengths

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

•

•

•

•

•

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

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

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

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

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

Our Business and Growth Strategies

Our primary business objectives are to: (i) continue to develop, build, and own class A office, retail, and multifamily 

properties in our target markets, (ii) finance and operate our portfolio in a manner that increases cash flow and property values, 
(iii) execute new third-party construction work with consistent operating margins, and (iv) pursue selective acquisition 
opportunities, particularly when the acquisition involves a significant redevelopment aspect. We seek to achieve our objectives 
through the following strategies: 

•

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

3

 
 
 
 
•

•

•

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

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

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

4

Our Properties

The table below sets forth certain information regarding our stabilized portfolio as of December 31, 2022. We 

generally consider a property to be stabilized upon the earlier of: (i) the quarter after the property reaches 80% occupancy or 
(ii) the thirteenth quarter after the property receives its certificate of occupancy. Additionally, any property that is fully or 
partially taken out of service for the purpose of redevelopment is no longer considered stabilized until the redevelopment 
activities are complete, the asset is placed back into service, and the stabilization criteria above are again met.

Property

Retail Properties

Location  

Year Built / 
Renovated / 
Redeveloped

Ownership 
Interest

Net Rentable 
Square Feet(1)

Occupancy(2)

ABR(3)

ABR per 
Leased SF(3)

 100 %  

 100 %  

 100 %  

 100 %  

 65 %  

 100 %  

 100 %  

 100 %  

 100 %  

 100 %  

 100 %  

 100 %  

 100 %  

 100 %  

 100 %  

 100 %  

 100 %  

 100 %  

 100 %  

 100 %  

 100 %  

 100 %  

 100 %  

 100 %  

 100 %  

 100 %  

 100 %  

 100 %  

 100 %  

 100 %  

 100 %  

 100 %  

 100 %  

 100 %  

 100 %  

 100 %  

 100 %  

 100 %  

92,456 

103,335 

121,504 

115,059 

18,349 

62,207 

92,061 

19,173 

87,207 

106,166 

35,961 

260,710 

15,719 

98,638 

49,000 

85,440 

80,319 

116,953 

133,608 

114,954 

226,083 

151,365 

61,200 

37,804 

160,942 

124,181 

74,256 

39,015 

103,118 

373,808 

69,417 

38,515 

109,590 

260,131 

40,307 

11,594 

48,859 

176,997 

3,916,001 

 100.0  % $  2,562,965  $ 

 100.0  %   1,545,919 

 95.7  %   2,210,002 

 98.2  %   1,354,680 

 78.3  %  

219,975 

 100.0  %   1,899,747 

 96.7  %  

978,078 

 100.0  %  

963,746 

 100.0  %   2,997,459 

 79.0  %   1,559,633 

 93.7  %   1,101,937 

 95.4  %   2,486,750 

 92.6  %  

325,081 

 100.0  %   2,007,780 

 100.0  %  

717,850 

 98.3  %   1,860,608 

 97.7  %   1,841,264 

 100.0  %   2,797,454 

 100.0  %   3,479,320 

 97.9  %   1,503,219 

 100.0  %   2,923,017 

 100.0  %   2,197,835 

 100.0  %  

850,761 

 100.0  %  

780,481 

 97.9  %   2,472,240 

 100.0  %   2,096,262 

 98.0  %   1,245,907 

 86.8  %   1,140,886 

 100.0  %   3,059,505 

 96.6  %   6,840,888 

 100.0  %  

943,064 

 100.0  %   1,003,080 

 100.0  %   1,984,616 

 100.0  %   3,755,046 

 97.5  %  

820,402 

 100.0  %  

407,396 

 100.0  %  

559,948 

 98.8  %   3,430,982 

 97.9 % $ 70,925,783  $ 

27.72 

14.96 

19.00 

11.99 

15.31 

30.54 

10.98 

50.27 

34.37 

18.59 

32.69 

10.00 

22.33 

20.36 

14.65 

22.15 

23.46 

23.92 

26.04 

13.36 

12.93 

14.52 

13.90 

20.65 

15.69 

16.88 

17.13 

33.70 

29.67 

18.94 

13.59 

26.04 

18.11 

14.44 

20.87 

35.14 

11.46 

19.63 

18.51 

249 Central Park Retail

Virginia Beach, VA

Apex Entertainment
Broad Creek Shopping Center(4) Norfolk, VA

Virginia Beach, VA

Broadmoor Plaza

South Bend, IN

Brooks Crossing Retail

Newport News, VA

2004

2002/2020

2001

1980

2016

Virginia Beach, VA

2013/2020

Columbus Village

Columbus Village II 

Commerce Street Retail
Delray Beach Plaza (4)

Virginia Beach, VA

Virginia Beach, VA

Delray Beach, FL

Dimmock Square

Colonial Heights, VA

Fountain Plaza Retail

Virginia Beach, VA

Greenbrier Square 

Chesapeake, VA

Greentree Shopping Center

Chesapeake, VA

Hanbury Village

Harrisonburg Regal

Lexington Square

Market at Mill Creek
Marketplace at Hilltop (4)

Nexton Square

North Hampton Market

North Pointe Center 

Overlook Village

Parkway Centre

Chesapeake, VA

Harrisonburg, VA

Lexington, SC

Mount Pleasant, SC

Virginia Beach, VA

Summerville, SC

Taylors, SC

Durham, NC

Asheville, NC

Moultrie, GA

Parkway Marketplace

Virginia Beach, VA

1996

2008

2021

1998

2004

2017

2014

2009

1999

2017

2018

2001

2020

2004

2009

1990

2017

1998

2004

Patterson Place

Pembroke Square

Durham, NC

Virginia Beach, VA

1966/2015

Perry Hall Marketplace

Perry Hall, MD

Premier Retail

Providence Plaza

Red Mill Commons 

Sandbridge Commons 

South Retail

South Square

Southgate Square

Southshore Shops

Studio 56 Retail
Tyre Neck Harris Teeter (4)

Wendover Village

Total / Weighted Average

Virginia Beach, VA

Charlotte, NC

Virginia Beach, VA

Virginia Beach, VA

Virginia Beach, VA

Durham, NC

Colonial Heights, VA

Chesterfield, VA

Virginia Beach, VA

Portsmouth, VA

Greensboro, NC

2001

2018

2008

2005

2015

2002

2005

2016

2006

2007

2011

2004

5

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Location  

Year Built / 
Renovated / 
Redeveloped

Ownership 
Interest

Net Rentable 
Square Feet (1) Occupancy (2)

ABR (3)

ABR per 
Leased SF(3)

Office Properties

4525 Main Street
Armada Hoffler Tower (5)

Brooks Crossing Office
Constellation Office (6)

One City Center

One Columbus
Thames Street Wharf (5)

Two Columbus
Wills Wharf (4)

Total / Weighted Average

Virginia Beach, VA

Virginia Beach, VA

Newport News, VA

Baltimore, MD

Durham, NC

Virginia Beach, VA

Baltimore, MD

Virginia Beach, VA

Baltimore, MD

Multifamily Properties

1305 Dock Street (6)

1405 Point (4)(8)

Edison Apartments (8)

Location

Baltimore, MD

Baltimore, MD

Richmond, VA

Encore Apartments

Virginia Beach, VA

Gainesville Apartments

Gainesville, GA

Greenside Apartments

Charlotte, NC

Liberty Apartments (8)

Premier Apartments

Smith’s Landing (4)
The Cosmopolitan (8)

Total / Weighted Average

Newport News, VA

Virginia Beach, VA

Blacksburg, VA
Virginia Beach, VA

2014

2002

2019

2016

2019

1984

2010

2009

2020

 100 %  

 100 %  

 100 %  

 79 %  

 100 %  

 100 %  

 100 %  

 100 %  

 91 %  

235,088 

315,916 

98,061 

482,317 

151,599 

129,066 

263,426 

108,459 

327,991 

 100.0  % $  7,144,928  $ 

 98.7  %  

9,551,515 

 100.0  %  

1,925,167 

 97.1  %   15,192,121 

 89.3  %  

4,455,053 

 98.3  %  

3,243,789 

 100.0  %  

7,655,559 

 98.1  %  

2,926,307 

 90.8  %  

9,046,394 

2,111,923 

 96.7 % $ 61,140,833  $ 

30.39 

30.62 

19.63 

32.44 

32.89 

25.56 

29.06 

27.51 

30.39 

29.92 

Year Built / 
Renovated / 
Redeveloped

Ownership 
Interest

Units

Occupancy(2)

AQR (7)

Monthly 
Rent per 
Occupied 
Unit

2016

2018

1919/2014

2014

2022

2018

2013

2018

2009
2006/2020

 79 %  

 100 %  

 100 %  

 100 %  

 100 %  

 100 %  

 100 %  

 100 %  

 100 %  
 100 %  

103 

289 

174 

286 

223 

225 

197 

131 

284 
342 

 92.9  % $  2,844,720  $ 

 94.1  %  

8,463,276 

 96.0  %  

3,028,380 

 95.6  %  

5,605,860 

 98.2  %  

4,838,964 

 97.5  %  

4,755,864 

 97.0  %  

3,645,264 

 98.0  %  

2,830,644 

 97.4  %  
 94.6  %  

5,546,400 
8,566,536 

2,254 

 96.1 % $ 50,125,908  $ 

2,477 

2,593 

1,511 

1,709 

1,841 

1,807 

1,590 

1,837 

1,671 
2,207 

1,928 

________________________________________
(1) The net rentable square footage for each of our office and retail properties is the sum of (a) the square footage of existing leases, plus (b) 
for available space, management’s estimate of net rentable square footage based, in part, on past leases. The net rentable square footage 
included in office leases is generally consistent with the Building Owners and Managers Association 1996 measurement guidelines. 
(2) Occupancy for each of our office and retail properties is calculated as (a) square footage under executed leases as of December 31, 2022, 
divided by (b) net rentable square feet, expressed as a percentage. Occupancy for our multifamily properties is calculated as (a) average 
of the number of occupied units on the 20th day of each of the trailing three months from the reporting period end date, divided by (b) 
total units available, as of such date expressed as a percentage.

(3) For the properties in our office and retail portfolios, annualized base rent ("ABR") is calculated by multiplying (a) monthly base rent 

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

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

(6) As of December 31, 2022, we owned a 90% economic interest in this property, including an 11% economic interest through a note 

receivable. In January 2023, we acquired the additional 11% membership interest in this property.

(7) For the properties in our multifamily portfolio, annualized quarterly rent ("AQR") is calculated by multiplying (a) revenue for the quarter 

ended December 31, 2022 by (b) 4.

(8) The AQR for Liberty, Cosmopolitan, Edison Apartments, and 1405 Point excludes approximately $0.2 million, $1.0 million, 

$0.3million, and $0.4 million, respectively, from ground floor retail leases.

6

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Lease Expirations

The following tables summarize the scheduled expirations of leases in our office and retail operating property 

portfolios as of December 31, 2022. The information in the following tables does not assume the exercise of any renewal 
options:  

Office Lease Expirations

Year of Lease Expiration(1)

Number of Leases 
Expiring

Square Footage of 
Leases Expiring

% Portfolio 
Net Rentable 
Square Feet

ABR

% of Office 
Portfolio ABR

Available

Month-to-Month

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

Thereafter

— 

2 

7 

13 

20 

11 

18 

14 

11 

10 

4 

3 

8 

Total / Weighted Average

121 

68,766 

1,623 

61,898 

142,077 

156,165 

54,355 

131,322 

113,036 

297,348 

149,487 

20,270 

6,214 

909,362 

2,111,923 

 3.3  % $ 

 0.1  %  

 2.9  %  

 6.7  %  

 7.4  %  

 2.6  %  

 6.2  %  

 5.4  %  

— 

63,329 

1,693,941 

3,862,140 

4,800,586 

1,442,176 

3,727,300 

3,301,082 

 14.1  %  

8,173,497 

 7.1  %  

 1.0  %  

 0.3  %  

4,358,881 

576,476 

182,795 

 42.9  %  

28,958,630 

 100.0 % $ 

61,140,833 

 —  %

 0.1  %

 2.8  %

 6.3  %

 7.9  %

 2.4  %

 6.1  %

 5.4  %

 13.4  %

 7.1  %

 0.9  %

 0.3  %

 47.3  %

 100.0 %

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

Retail Lease Expirations

Year of Lease Expiration

Available

Month-to-Month
2022 (1)

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

Thereafter

Number of Leases 
Expiring

Square Footage of 
Leases Expiring

% Portfolio 
Net Rentable 
Square Feet

ABR

% of Retail 
Portfolio ABR

— 

4 

1 

47 

85 

94 

82 

75 

46 

31 

46 

30 

24 

33 

83,600 

51,737 

1,200 

183,357 

420,397 

501,116 

450,350 

470,148 

246,109 

115,967 

260,461 

271,334 

289,109 

571,116 

 2.1  % $ 

 1.3  %  

 —  %  

 4.7  %  

 10.7  %  

 12.8  %  

 11.5  %  

 12.0  %  

 6.3  %  

 3.0  %  

 6.7  %  

 6.9  %  

 7.4  %  

— 

340,578 

37,818 

4,127,714 

7,990,879 

8,817,185 

9,049,900 

8,741,304 

4,953,704 

2,465,625 

5,818,903 

4,894,065 

4,670,093 

 14.6  %  

9,018,015 

 —  %

 0.5  %

 0.1  %

 5.8  %

 11.3  %

 12.4  %

 12.8  %

 12.3  %

 7.0  %

 3.5  %

 8.2  %

 6.9  %

 6.6  %

 12.6  %

 100.0 %

Total / Weighted Average

598 

3,916,001 

 100.0 % $ 

70,925,783 

(1) Lease expired on December 31, 2022.

7

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Tenant Diversification

The following table lists the 20 largest tenants in each of our office and retail operating property portfolios, based on 

ABR as of December 31, 2022 ($ in thousands):   

Tenant (1)

Constellation Energy Group

Morgan Stanley

Harris Teeter/Kroger

Canopy by Hilton

Clark Nexsen

WeWork

Lowes Foods

Franklin Templeton

Duke University

Huntington Ingalls Industries

Dick's Sporting Goods

PetSmart

TJ Maxx/Homegoods

Mythics

Johns Hopkins Medicine

Amazon/Whole Foods

Ross Dress for Less

Apex Entertainment

Bed Bath & Beyond

Regal Cinemas

Top 20 Total

Number of 
Leases

Lease 
Expiration

ABR

% of Total 
ABR/AQR

1

3

6

1

1

1

2

1

1

1

1

5

5

1

1

1

3

1

2

2

2036

$ 

14,575 

2028-2035

2026-2035

2045

2029

2034

2037;2039

2038

2029

2029

2032

2025-2027

2023-2027

2030

2023

2040

2025-2027

2035

2025 ; 2027

MTM ; 2024

7,178 

3,766 

2,846 

2,801 

2,180 

1,976 

1,861 

1,659 

1,606 

1,553 

1,527 

1,519 

1,260 

1,213 

1,144 

1,122 

1,092 

1,084 

1,058 

 8.0  %

 3.9  %

 2.1  %

 1.6  %

 1.5  %

 1.2  %

 1.1  %

 1.0  %

 0.9  %

 0.9  %

 0.9  %

 0.8  %

 0.8  %

 0.7  %

 0.7  %

 0.6  %

 0.6  %

 0.6  %

 0.6  %

 0.6  %

$ 

53,020 

 29.1 %

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

Development Pipeline

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

Development, Not Delivered

($ in '000s)

Schedule (1)

Property

Location 

Estimated
Size (1) 

Estimated 
Cost (1) 

Incurred
Cost

Initial

Start Occupancy

Stabilized
Operation (2)

AHH
Ownership %

Property 
Type

Southern Post

Roswell, GA 137 units/137,000 sf

$  119,000  $  47,000 

4Q21

4Q23

4Q24

100%

Mixed-use

Delivered Not Stabilized

($ in '000s)

Schedule

Property

Location

Size (1) 

Cost (1) 

Cost

Start  Occupancy Operation (1)(2) Ownership %

Estimated

Estimated 

Incurred

Initial

Stabilized

AHH

Property 
Type

Chronicle Mill Belmont, NC 238 units/14,900 sf

$  60,000  $  54,000 

1Q21

4Q22

1Q23

85%

Multifamily

________________________________________

Total

$  179,000  $ 101,000 

8

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Represents estimates that may change as the development/stabilization process proceeds.
(2) Estimated first full quarter of stabilized operations. Estimates are inherently uncertain, and we can provide no assurance that our 

assumptions regarding the timing of stabilization will prove accurate.

Our execution on all of the projects identified in the preceding tables are subject to, among other factors, regulatory 

approvals, financing availability, and suitable market conditions.

Southern Post is a $119 million mixed-use project that includes 137 multifamily units and 137,000 square feet of 

office and retail space being developed in Roswell, Georgia, with expected delivery in 2023.

Chronicle Mill is a $60 million 238-unit multifamily adaptive-reuse project that includes 14,900 square feet of office 

and retail space in Belmont, North Carolina. Portions of the Chronicle Mill project were completed and placed in service during 
2022. As of December 31, 2022, the overall project was 93.0% leased and 50% occupied.

Equity Method Investments - Development

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

Estimated

Property

Location

Size

T. Rowe Price 
Global HQ

Baltimore, 
MD

Parcel 4 Mixed-
Use

Baltimore, 
MD

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

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

($ in '000s)

Estimated 
Project 
Cost

Equity 
requirement

Funded 
to date

Schedule

Initial

Stabilized

Start Occupancy Operation

AHH
Ownership 
%

Property

Type

  264,000 

44,600 

  40,500 

2Q22

3Q24

3Q24

50% Office

  226,000 

102,600 

  32,400 

2Q22

3Q24

2Q26

90%

Mixed-
use

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

Total

$  490,000  $ 

147,200 

$  72,900 

redevelopment process proceeds.

Other Investments

Interlock Commercial

On December 21, 2018, we entered into a mezzanine loan agreement with the developer of the office and retail 

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

The balance on the Interlock Commercial note was $86.6 million as of December 31, 2022. During the year ended 

December 31, 2022, we recognized $9.9 million of interest income on the note. See Note 6 to our consolidated financial 
statements in Item 8 of this Annual Report on Form 10-K.

Nexton Multifamily

On April 1, 2021, we entered into a $22.3 million preferred equity investment for the development of a multifamily 

property located in Summerville, South Carolina, adjacent to our Nexton Square property. The investment had economic terms 
consistent with a note receivable, including a mandatory redemption or maturity on October 1, 2026, and it is accounted for as a 
note receivable in our consolidated balance sheets. This investment bore interest at a rate of 11%, compounded annually.

On December 30, 2022, the borrower paid off the Nexton Multifamily note receivable in full. We received a total of 

$28.9 million, which consisted of $22.3 million outstanding principal, $3.9 million of accrued interest, and a prepayment 
premium of $2.7 million that resulted from the early payoff of the loan. See Note 6 to our consolidated financial statements in 
Item 8 of this Annual Report on Form 10-K.

City Park 2

9

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

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

Solis Gainesville II

On October 3, 2022, we entered into a $19.6 million preferred equity investment for the development of a multifamily 

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

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

Equity Method Investments

Harbor Point Parcel 3

During December 2020, we formed a 50/50 joint venture that will develop and build T. Rowe Price's new global 

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

Harbor Point Parcel 4

In conjunction with the Harbor Point Parcel 3 project, we acquired a 78% interest in Harbor Point Parcel 4, a real 

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

Acquisitions

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

10

On January 14, 2022, we acquired the remaining 20% ownership interest in the entity that is developing the Ten Tryon 

project in Charlotte, North Carolina for a cash payment of $3.9 million.

On April 11, 2022, we exercised our option to acquire an additional 16% of the partnership that owns The Residences 

at Annapolis Junction, increasing our ownership to 95%. In exchange for this increased partnership interest, the terms of the 
partnership waterfall calculation in the event of a capital event were modified.

In October 2022, we acquired the remaining 5% ownership interest in the entity that developed Gainesville 

Apartments. During 2022, we made earn-out payments totaling $4.2 million to our development partner in addition to 
development cost savings of $0.8 million paid to our development partner.

On November 4, 2022, we acquired Pembroke Square a 124,000 square foot grocery-anchored shopping center in 

Virginia Beach, Virginia for a purchase price of $26.5 million in cash, reinvested from disposition proceeds.

On December 31, 2022, we acquired the remaining 30% of the partnership that owns the Market at Mill Creek 

shopping center in Mount Pleasant, South Carolina for total consideration of $1.5 million.

Subsequent to December 31, 2022

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

Dispositions

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

properties:

Date of Disposition

April 1, 2022

April 25, 2022

June 29, 2022

July 22, 2022

July 26, 2022

Property

Hoffler Place

Summit Place

North Pointe Outparcels

The Residences at Annapolis Junction

Sandbridge Commons Outparcels

September 23, 2022

Gainesville Apartments - Retail Portion

Sales Price (in millions)

$ 

$ 

$ 

Total

43.1 

37.8

23.9

150.0

3.5

1.5 

259.8 

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 

11

 
 
 
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. 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, 2022 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 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 

12

 
 
 
 
 
 
 
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 
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.

13

 
 
 
 
 
Competition

We compete with a number of developers, owners, and operators of office, retail, 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 
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, 2022, we had 161 employees. Armada Hoffler is 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. The Company invests heavily in its 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 the Company’s strategy. Armada Hoffler 

offers 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, Armada Hoffler invests 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 Armada Hoffler’s activities related to its people and sustainability, as well as its 
workforce diversity data, can be found in Armada Hoffler’s latest Sustainability Report, which is located on its 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, Armada Hoffler’s 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.

14

 
 
 
 
 
 
 
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 
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, including as a result of the COVID-19 pandemic and measures intended to 
mitigate its spread. Such conditions may materially and adversely affect us as a result of the following potential consequences, 
among others: 

•

•

•

•

decreased demand for office, retail 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 credit facility 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.

15

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

Our growth strategy depends significantly on our ability to leverage our extensive experience in completing large, 
complex, mixed-use public/private projects to establish new relationships with public partners and expand our relationships 
with existing public partners. Future increases in our revenues may depend significantly on our ability to expand the scope of 
the work we do with the state and local government agencies with which we currently have partnered and attract new state and 
local government agencies to undertake public/private development projects with us. Our ability to obtain new work with state 
and local governmental authorities on new public/private development and financing partnerships could be adversely affected 
by several factors, including decreases in state and local budgets, changes in administrations, the departure of government 
personnel with whom we have worked, and negative public perceptions about public/private partnerships. In addition, to the 
extent that we engage in public/private partnerships in states or local communities in which we have not previously worked, we 
could be subject to risks associated with entry into new markets, such as lack of market knowledge or understanding of the local 
economy, lack of business relationships in the area, competition with other companies that already have an established presence 
in the area, difficulties in hiring and retaining key personnel, difficulties in evaluating quality tenants in the area, and 
unfamiliarity with local governmental and permitting procedures. If we fail to establish new relationships with public partners 
and expand our relationships with existing public partners, it could have a material adverse effect on our results of operations, 
cash flow, and growth prospects.

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

Our business and growth strategy involves the development and selective acquisition of office, retail, 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 
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: 

16

 
 
 
 
 
 
•

•

•

•

•

•

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, 2022, our properties in 
the Virginia, Maryland and North Carolina markets represented approximately 46%, 28%, and 15%, 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 23% and 19%, respectively, of 
our total net operating income for the year ended December 31, 2022. 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 office, retail, 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 office, retail 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 
December 31, 2022 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.

17

 
 
As of December 31, 2022, we had total debt of approximately $1.1 billion, including amounts drawn under our 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 $1.1 billion as of December 31, 2022. 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.

DBRS Morningstar is expected to periodically evaluate our debt levels and other factors, which likely will include 

DBRS Morningstar’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 
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 

18

 
 
 
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, 2022, approximately 2.5% of the square footage of the stabilized properties in our office and retail 

portfolios was available. Additionally, 2.8% and 6.3% of the ABR in our office portfolio was scheduled to expire in 2023 and 
2024, respectively, and 5.8% and 11.3% of the ABR in our retail portfolio was scheduled to expire in 2023 and 2024, 
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 adversely affected by, among other things, job losses and 
unemployment levels, fears of a recession, personal debt levels, the housing market, stock market volatility, and uncertainty 
about the future. If rental rates for our properties decrease, our existing tenants do not renew their leases, or we do not re-lease a 
significant portion of our available space and space for which leases expire, 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.  

Tenant demand in our office portfolio may decline due to disruptions to the office sector, which could materially and 
adversely affect us.

Companies have been increasing their utilization of shared office spaces, co-working spaces, telecommuting, flexible 
work schedules, work-from-home alternatives and videoconferencing. To the extent these trends continue, tenant demand for 
our office space may be reduced, which could materially and adversely affect us.

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.

Substantially all of the leases in our multifamily portfolio are for terms of 12 months or less. As a result, even if we are 
able to renew or re-lease apartment and student housing units as leases expire, our rental revenues will be impacted by declines 
in market rents more quickly than if all of our leases had longer terms, which could adversely affect our results of operations, 
cash flow, and cash available for distribution.

Competition for property acquisitions and development opportunities may reduce the number of opportunities available to us 
and increase our costs, which could have a material adverse effect on our growth prospects.

The current market for property acquisitions and development opportunities continues to be extremely competitive. 
This competition may increase the demand for the types of properties in which we typically invest and, therefore, reduce the 
number of suitable investment opportunities available to us and increase the purchase prices for such properties in the event we 
are able to acquire or develop such properties. We face significant competition for attractive investment opportunities from an 

19

 
 
 
indeterminate number of investors, including publicly traded and privately held REITs, private equity investors, and 
institutional investment funds, some of which have greater financial resources than we do, a greater ability to borrow funds to 
make investments in properties than we do, and the ability to accept more risk than we can prudently manage, including risks 
with respect to the geographic proximity of investments and the payment of higher acquisition prices. This competition will 
increase if investments in real estate become more attractive relative to other forms of investment. If the level of competition for 
investment opportunities is significant in our target markets, it could have a material adverse effect on our growth prospects. 

Increased competition and increased affordability of residential homes could limit our ability to retain our residents, lease 
apartment units, or increase or maintain rents at our multifamily apartment communities.

Our multifamily apartment communities compete with numerous housing alternatives in attracting residents, including 

other multifamily apartment communities and single-family rental units, as well as owner-occupied single-family and 
multifamily units. Competitive housing in a particular area and an increase in affordability of owner-occupied single-family and 
multifamily units due to, among other things, declining housing prices, oversupply, mortgage interest rates, and tax incentives 
and government programs to promote home ownership, could adversely affect our ability to retain residents, lease apartment 
units, and increase or maintain rents at our multifamily properties, which could adversely impact our results of operations, cash 
flow, and cash available for distribution.

The failure of properties that we develop or acquire to meet our financial expectations could have a material adverse effect 
on us, including our financial condition, results of operations, cash flow, cash available for distribution, ability to service 
our debt obligations, the per share trading price of our common stock and Series A Preferred Stock, and growth prospects.

Our acquisitions and development projects and our ability to successfully operate these properties may be exposed to 

the following significant risks, among others:

•

•

•

•

we may acquire or develop properties that are not accretive to our results upon acquisition, and we may not 
successfully manage and lease those properties to meet our expectations;
our cash flow may be insufficient to enable us to pay the required principal and interest payments on the debt 
secured by the property;
we may spend more than budgeted amounts to make necessary improvements or renovations to acquired 
properties or to develop new properties;
we may be unable to quickly and efficiently integrate new acquisitions or developed properties into our existing 
operations;

• market conditions may result in higher-than-expected vacancy rates and lower than expected rental rates; and
•

we may acquire properties subject to liabilities without any recourse, or with only limited recourse, with respect 
to unknown liabilities such as liabilities for clean-up of undisclosed environmental contamination, claims by 
tenants, vendors, or other persons dealing with the former owners of the properties, liabilities incurred in the 
ordinary course of business, and claims for indemnification by general partners, directors, officers, and others 
indemnified by the former owners of the properties.

If we cannot operate acquired or developed properties to meet our financial expectations, our financial condition, 

results of operations, cash flow, cash available for distribution, ability to service our debt obligations, the per share trading price 
of our common stock and Series A Preferred Stock, and growth prospects could be materially and adversely affected.

Failure to succeed in new markets may limit our growth. 

We have acquired in the past, and we may acquire in the future if appropriate opportunities arise, properties that are 

outside of our primary markets. Entering into new markets exposes us to a variety of risks, including difficulty evaluating local 
market conditions and local economies, developing new business relationships in the area, competing with other companies that 
already have an established presence in the area, hiring and retaining key personnel, evaluating quality tenants in the area, and a 
lack of familiarity with local governmental and permitting procedures. Furthermore, expansion into new markets may divert 
management time and other resources away from our current primary markets. As a result, we may not be successful in 
expanding into new markets, which could adversely impact our financial condition, results of operations, cash flow, cash 
available for distribution, and ability to service our debt obligations.

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

We have originated, and in the future expect to originate or acquire, mezzanine or similar loans, which take the form of 

20

 
 
 
 
subordinated loans secured by second mortgages on the underlying property or loans secured by a pledge of the ownership 
interests of either the entity owning the property or a pledge of the ownership interests of the entity that owns the interest in the 
entity owning the property. As of December 31, 2022, we had approximately $112.3 million in outstanding mezzanine loans or 
similar investments. These types of loans involve a higher degree of risk than long-term senior mortgage loans secured by 
income-producing real property because the loan may become unsecured as a result of foreclosure by the senior lender. In 
addition, these loans may have higher loan-to-value ratios than conventional mortgage loans, with little or no equity invested by 
the borrower, increasing the risk of loss of principal. If a borrower defaults on our mezzanine loan or debt senior to our loan, or 
in the event of a borrower bankruptcy, our mezzanine loan will be satisfied only after the senior debt is paid in full. In the event 
of a bankruptcy of the entity providing the pledge of its ownership interests as security, we may not have full recourse to the 
assets of such entity, or the assets of the entity may not be sufficient to satisfy our mezzanine loan. As a result, we may not 
recover some or all of our initial investment. Additionally, in conjunction with certain mezzanine loans, we issue partial 
payment guarantees to the senior lender for the property, which may require us to make payments to the senior lender in the 
event of a default on the senior note. Finally, in connection with our loan investments, we may have options to purchase all or a 
portion of the underlying property upon maturity of the loan; however, if a developer’s costs for a project are higher than 
anticipated, exercising such options may not be attractive or economically feasible, or we may not have sufficient funds to 
exercise such options even if we desire to do so. Significant losses related to mezzanine or similar loan investments could have 
a material adverse effect on our financial condition and results of operations.

A bankruptcy or insolvency of any of our significant tenants in our office or retail properties 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.

If a significant tenant in our office or retail properties becomes bankrupt or insolvent, federal law may prohibit us from 

evicting such tenant based solely upon such bankruptcy or insolvency. In addition, a bankrupt or insolvent tenant may be 
authorized to reject and terminate its lease with us. Any claim against such tenant for unpaid, future rent would be subject to a 
statutory cap that might be substantially less than the remaining rent owed under the lease. If any of these tenants were to 
experience a downturn in its business or a weakening of its financial condition resulting in its failure to make timely rental 
payments or causing it to default under its lease, we may experience delays in enforcing our rights as landlord and may incur 
substantial costs in protecting our investment. In many cases, we may have made substantial initial investments in the 
applicable leases through tenant improvement allowances and other concessions that we may not be able to recover. Any such 
event 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.

Many of our operating costs and expenses are fixed and will not decline if our revenues decline.

Our results of operations depend, in large part, on our level of revenues, operating costs, and expenses. The expense of 
owning and operating a property is not necessarily reduced when circumstances such as market factors and competition cause a 
reduction in revenue from the property. As a result, if revenues decline, we may not be able to reduce our expenses to keep pace 
with the corresponding reductions in revenues. Many of the costs associated with real estate investments, such as real estate 
taxes, insurance, loan payments, and maintenance generally will not be reduced if a property is not fully occupied or other 
circumstances cause our revenues to decrease, 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.

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.

In 2022, the consumer price index rose by approximately 7% over the previous year, which was the largest annual 
inflation surge in 40 years. The recent rise in inflation has been due to, among other things, the disruption in global supply 
chains, labor shortages, and resulting increasing consumer demand, many of which were exacerbated by the COVID-19 
pandemic. A significant portion of our operating expenses and construction-related costs are sensitive to inflation.
Operating expenses include those for property-related contracted services such as janitorial and engineering services, utilities, 
repairs and maintenance, and insurance. Property taxes are also impacted by inflationary changes as taxes are regularly 
reassessed based on changes in the fair value of our properties. We also have ground lease expenses in certain of our properties. 
Ground lease costs are contractual, but in some cases, lease payments reset every few years based on changes on consumer 
price indices.

Our operating expenses, with the exception of ground lease rental expenses and multifamily properties, are typically 

recoverable through our lease arrangements, which allow us to pass through substantially all expenses associated with property 

21

 
 
 
taxes, insurance, utilities, repairs and maintenance, and other operating expenses (including increases thereto) to our tenants. 
Our remaining leases are generally gross leases, which provide for recoveries of operating expenses above the operating 
expenses from the initial year within each lease. During inflationary periods, we expect to recover increases in operating 
expenses from our triple net leases and our gross leases. In addition, our multifamily leases generally have lease terms ranging 
from 7 to 15 months with a majority having 12-month lease terms allowing negotiation of rental rates at term end, which we 
believe reduces our exposure to the effects of inflation, although an extreme and sustained escalation in costs could have a 
negative impact on our residents and their ability to absorb rent increases. As a result, we do not believe that inflation would 
result in a significant adverse effect on our net operating income and operating cash flows at the property level. However, there 
is no guarantee that our tenants would be able to absorb these expense increases and be able to continue to pay us their portion 
of operating expenses, capital expenditures, and rent.

Our general and administrative expenses consist primarily of compensation costs, technology services, and 

professional service fees. Annually, our employee compensation is adjusted to reflect merit increases; however, to maintain our 
ability to successfully compete for the best talent, rising inflation rates may require us to provide compensation increases 
beyond historical annual merit increases, which may unexpectedly or significantly increase our compensation costs. Similarly, 
technology services and professional service fees are also subject to the impact of inflation and expected to increase 
proportionately with increasing market prices for such services. Consequently, inflation is expected to increase our general and 
administrative expenses over time and may adversely impact our results of operations and operating cash flows.

Adverse conditions in the general retail environment 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.

Approximately 41.3% of our net operating income for the year ended December 31, 2022 is from retail properties. As 

a result, we are subject to factors that affect the retail sector generally as well as the market for retail space. The retail 
environment and the market for retail space have been, and in the future could be, adversely affected by weakness in the 
national, regional, and local economies, the level of consumer spending and consumer confidence, the adverse financial 
condition of some large retail companies, the ongoing consolidation in the retail sector, the excess amount of retail space in a 
number of markets, increasing competition from discount retailers, outlet malls, internet retailers, and other online businesses, 
and epidemics, pandemics and other health crises and measures intended to mitigate their spread. Increases in consumer 
spending via the internet may significantly affect our retail tenants’ ability to generate sales in their stores. New and enhanced 
technologies, including new digital and web services technologies, may increase competition for certain of our retail tenants.

Any of the foregoing factors could adversely affect the financial condition of our retail tenants and the willingness of 

retailers to lease space in our retail properties, including the anchor stores or major tenants in our retail shopping center 
properties, the loss of which could result in a material impact on our retail tenants. In turn, these conditions could negatively 
affect market rents for retail space and 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 phase-out of LIBOR and the transition to alternative benchmark interest rates, such as SOFR and BSBY, could have 
adverse effects.

The interest rate on some of our variable rate debt is based on LIBOR (the London Inter-Bank Offered Rate). It is 

expected that no new contracts will reference LIBOR and will instead use alternative benchmark interest rates, such as SOFR 
and the Bloomberg Short-Term Bank Yield Index ("BSBY"). In 2018, the Alternative Reference Rate Committee identified 
SOFR as the alternative to LIBOR. SOFR is a broad measure of the cost of borrowing cash overnight collateralized by U.S. 
Treasury securities, published by the Federal Reserve Bank of New York. BSBY is a new series of reference rates made 
available by Bloomberg Index Services Limited that aims to measure the average yields at which investors are willing to invest 
U.S. dollar funds on a senior, unsecured basis in certain global, systemically important banks, and certain other systemically 
relevant banks, at various tenors. In connection with the phase-out of LIBOR, we have incurred floating-rate indebtedness that 
bears interest based on SOFR and BSBY. Due to the broad use of LIBOR as a reference rate, all financial market participants, 
including us, are impacted by the risks associated with this transition and, therefore, it could adversely affect our operations and 
cash flows.

Mortgage debt obligations expose us to the possibility of foreclosure, which could result in the loss of our investment in a 
property or group of properties subject to mortgage debt.

Mortgage and other secured debt obligations increase our risk of property losses because defaults on indebtedness 

secured by properties may result in foreclosure actions initiated by lenders and ultimately our loss of the property securing any 
loans for which we are in default. Any foreclosure on a mortgaged property or group of properties could adversely affect the 

22

 
 
 
 
overall value of our portfolio of properties. For tax purposes, a foreclosure on any of our properties that is subject to a 
nonrecourse mortgage loan would be treated as a sale of the property for a purchase price equal to the outstanding balance of 
the debt secured by the mortgage. If the outstanding balance of the debt secured by the mortgage exceeds our tax basis in the 
property, we would recognize taxable income on foreclosure, but would not receive any cash proceeds, which could hinder our 
ability to meet the REIT distribution requirements imposed by the Code. Foreclosures could also trigger our tax indemnification 
obligations under the terms of our tax protection agreements with respect to the sales of certain properties.

Our credit facility restricts our ability to engage in certain business activities, including our ability to incur additional 
indebtedness, make capital expenditures, and make certain investments.

Our credit facility contains customary negative covenants and other financial and operating covenants that, among 

other things:

•
•
•
•
•
•
•

restrict our ability to incur additional indebtedness;
restrict our ability to incur additional liens;
restrict our ability to make certain investments (including certain capital expenditures);
restrict our ability to merge with another company;
restrict our ability to sell or dispose of assets;
restrict our ability to make distributions to our stockholders; and
require us to satisfy minimum financial coverage ratios, minimum tangible net worth requirements, and 
maximum leverage ratios.

These limitations restrict our ability to engage in certain business activities, 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. In addition, our credit facility may contain specific cross-default provisions with respect to specified other 
indebtedness, giving the lenders the right, in certain circumstances, to declare a default if we are in default under other loans.

An epidemic, pandemic or other health crisis, including the ongoing COVID-19 pandemic, and measures intended to 
prevent the spread of such an event 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 face risks related to an epidemic, pandemic or other health crisis, including the ongoing COVID-19 pandemic, 

which has impacted, and in the future could impact, the markets in which we operate and 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. The impact of an epidemic, pandemic or other health crisis, including the COVID-19 pandemic, and measures 
intended to prevent the spread of such an event could materially and adversely affect our business in a number of ways. Our 
rental revenue and operating results depend significantly on the occupancy levels at our properties and the ability of our tenants 
to meet their rent obligations to us, which have been in certain cases, and could in the future be, adversely affected by, among 
other things, job losses, furloughs, store closures, lower incomes, uncertainty about the future as a result of an epidemic, 
pandemic or other health crisis and related governmental actions including eviction moratoriums, shelter-in-place orders, 
prohibitions on charging certain fees, and limitations on collection laws and rent increases, which have affected, and, if such 
restrictions are not lifted, or are reinstated, or new restrictions imposed, may continue to affect our ability to collect rent or 
enforce legal or contractual remedies for the failure to pay rent, which have negatively impacted, and may continue to 
negatively impact, our ability to remove tenants who are not paying rent and our ability to rent their space to new tenants. In 
addition, the federal government has in the past allocated, and may in the future allocate, funds to rent relief programs to be run 
by state and local authorities. In certain locations, the funds available may not be sufficient to pay all past due rent and 
reallocation of such funds may result in markets in which we operate not having access to the funds anticipated. Further, certain 
of our tenants with past due rent have not qualified, and may not in the future qualify, to participate in such programs. In 
addition, some of such programs have required, and programs in the future may require, the forgiveness of a portion of the past 
due rent or agreeing to other limitations that may adversely affect our business in order to participate or may only provide funds 
to pay a portion of the past due rent. In addition, while certain locations have adopted programs that may reimburse past due 
rent owed by tenants who have left a community, such programs have only been adopted in a minority of our markets. It is 
uncertain how the rent relief programs will impact our business. Our development and construction projects also have been and 
could in the future be adversely affected by factors related to an epidemic, pandemic or other health crisis, including the 
COVID-19 pandemic, although, to date, such impacts have not been material. An epidemic, pandemic or other health crisis, 
including the COVID-19 pandemic, or related impacts thereof also could adversely affect the businesses and financial 
conditions of our counterparties, including our joint venture partners and general contractors and their subcontractors, and their 
ability to satisfy their obligations to us and to complete transactions or projects with us as intended.

23

 
 
 
 
A cybersecurity incident or other technology disruptions could negatively impact our business, our relationships, and our 
reputation.

We use computers and computer networks in most aspects of our business operations. We also use mobile devices to 

communicate with our employees, suppliers, business partners, and tenants. These devices are used to transmit sensitive and 
confidential information including financial and strategic information about us, employees, business partners, tenants, and other 
individuals and organizations. Additionally, we utilize third-party service providers that host personally identifiable information 
and other confidential information of our employees, business partners, tenants, and others. We also maintain confidential 
financial and business information regarding us and persons and entities with which we do business on our information 
technology systems. Cybersecurity incidents, including physical or electronic break-ins, computer viruses, malware, attacks by 
hackers, ransomware attacks, phishing attacks, supply chain attacks, breaches due to employee error or misconduct and other 
similar breaches can create system disruptions, shutdowns or unauthorized access to information maintained in our information 
technology systems and in the information technology systems of our third-party service providers. We have in the past 
experienced cybersecurity incidents involving information technology systems, but we have not experienced any material 
cybersecurity incidents. We expect cybersecurity incidents to continue to occur in the future and we are constantly managing 
efforts to infiltrate and compromise our information technology systems and data. The theft, destruction, loss, or release of 
sensitive and confidential information or operational downtime of the systems used to store and transmit our or our tenants’ 
confidential business information could result in disruptions to our business, negative publicity, brand damage, violation of 
privacy laws, financial liability, difficulty attracting and retaining tenants, loss of business partners, and loss of business 
opportunities, any of which may materially and adversely affect our financial condition, results of operations, cash flow, cash 
available for distribution, and ability to service our debt obligations. Although we carry cybersecurity insurance that is designed 
to protect us against certain losses related to cybersecurity incidents, that insurance coverage may not be sufficient or available 
to cover all expenses or other losses or all types of claims that may arise in connection with cybersecurity incidents. 
Furthermore, in the future, such insurance may not be available on commercially reasonable terms, or at all.

Any material weakness in our internal control over financial reporting could have an adverse effect on the trading price of 
our common stock and Series A Preferred Stock.

Management is required to have an independent auditor assess the effectiveness of our internal control over financial 

reporting, pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, as amended (the “Sarbanes-Oxley Act”). We cannot give 
any assurances that material weaknesses will not be identified in the future in connection with our compliance with the 
provisions of Section 404 of the Sarbanes-Oxley Act. The existence of any material weakness described above would preclude 
a conclusion by management and our independent auditors that we maintained effective internal control over financial 
reporting. Our management may be required to devote significant time and expense to remediate any material weaknesses that 
may be discovered and may not be able to remediate such material weaknesses in a timely manner. The existence of any 
material weakness in our internal control over financial reporting could also result in errors in our financial statements that 
could require us to restate our financial statements, cause us to fail to meet our reporting obligations, and cause investors to lose 
confidence in our reported financial information, any of which could lead to a decline in the per share trading price of our 
common stock and Series A Preferred Stock.

We may be required to make rent or other concessions or significant capital expenditures to improve our properties in order 
to retain and attract tenants, which may materially and adversely affect our financial condition, results of operations, cash 
flow, cash available for distribution, and ability to service our debt obligations.

Upon expiration of our leases to our tenants, we may be required to make rent or other concessions, accommodate 

requests for renovations, build-to-suit remodeling, and other improvements, or provide additional services to our tenants, any of 
which would increase our costs. As a result, we may have to make significant capital or other expenditures in order to retain 
tenants whose leases expire and to attract new tenants in sufficient numbers. Additionally, we may need to raise capital to make 
such expenditures. If we are unable to do so or capital is otherwise unavailable, we may be unable to make the required 
expenditures. This could result in non-renewals by tenants upon expiration of their leases. If any of the foregoing were to occur, 
it 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 use of units in our Operating Partnership as consideration to acquire properties could result in stockholder dilution or 
limit our ability to sell such properties, which could have a material adverse effect on us.

We have acquired, and in the future may acquire, properties or portfolios of properties through tax deferred 

contribution transactions in exchange for OP Units. This acquisition structure may have the effect of, among other things, 
reducing the amount of tax depreciation we could deduct over the tax life of the acquired properties and requiring that we agree 

24

 
 
 
 
to protect the contributors’ ability to defer recognition of taxable gain through restrictions on our ability to dispose of the 
acquired properties or the allocation of partnership debt to the contributors to maintain their tax bases. These restrictions also 
could limit our ability to sell properties at a time, or on terms, that would be favorable absent such restrictions. In addition, 
future issuances of OP Units would reduce our ownership percentage in our Operating Partnership and affect the amount of 
distributions made to us by our Operating Partnership and, therefore, the amount of distributions we can make to our 
stockholders. To the extent that our stockholders do not directly own OP Units, our stockholders will not have any voting rights 
with respect to any such issuances or other partnership level activities of our Operating Partnership.

Our success depends on key personnel whose continued service is not guaranteed, and the loss of one or more of our key 
personnel could adversely affect our ability to manage our business and to implement our growth strategies or could create a 
negative perception of our company in the capital markets.

Our continued success and our ability to manage anticipated future growth depend, in large part, upon the efforts of 

key personnel who have extensive market knowledge and relationships and exercise substantial influence over our operational, 
financing, development, and construction activity. Individuals currently considered key personnel each has a national or 
regional industry reputation that attracts business and investment opportunities and assists us in negotiations with lenders, 
existing and potential tenants, and industry personnel, and we have not currently entered into employment agreements with any 
of these individuals. If we lose their services, our relationships with such industry personnel could diminish. 

Many of our other senior executives also have extensive experience and strong reputations in the real estate industry, 

which aid us in identifying opportunities, having opportunities brought to us, and negotiating with tenants and build-to-suit 
prospects. The loss of services of one or more members of our senior management team, or our inability to attract and retain 
highly qualified personnel, could adversely affect our business, diminish our investment opportunities, and weaken our 
relationships with lenders, business partners, existing and prospective tenants, and industry participants, which could materially 
and adversely affect our financial condition, results of operations, cash flow, and the per share trading price of our common 
stock and Series A Preferred Stock.

Joint venture investments could be materially and adversely affected by our lack of sole decision-making authority, our 
reliance on co-venturers’ financial condition, and disputes between us and our co-venturers.

In the past, we have, and in the future, we expect to, co-invest with third parties through partnerships, joint ventures or 
other entities, acquiring noncontrolling interests in or sharing responsibility for developing properties and managing the affairs 
of a property, partnership, joint venture, or other entity. In particular, in connection with the formation transactions related to 
our initial public offering, we provided certain of the prior investors with the right to co-develop certain projects with us in the 
future and the right to acquire a minority equity interest in certain properties that we may develop in the future, in each case 
under certain circumstances and subject to certain conditions set forth in the applicable agreement. Furthermore, we are often a 
joint venture partner in development projects. In the event that we co-develop a property together with a third party, we would 
be required to share a portion of the development fee. With respect to any such arrangement or any similar arrangement that we 
may enter into in the future, we may not be in a position to exercise sole decision-making authority regarding the development, 
property, partnership, joint venture, or other entity. 

Investments in partnerships, joint ventures or other entities may, under certain circumstances, involve risks not present 
where a third party is not involved, including the possibility that partners or co-venturers might become bankrupt or fail to fund 
their share of required capital contributions. Partners or co-venturers may have economic or other business interests or goals 
which are inconsistent with our business interests or goals and may be in a position to take actions contrary to our policies or 
objectives, and they may have competing interests in our markets that could create conflicts of interest. Such investments may 
also have the potential risk of impasses on decisions, such as a sale or financing, because neither we nor the partner(s) or co-
venturer(s) would have full control over the partnership or joint venture. In addition, a sale or transfer by us to a third party of 
our interests in the joint venture may be subject to consent rights or rights of first refusal, in favor of our joint venture partners, 
which would in each case restrict our ability to dispose of our interest in the joint venture. 

Where we are a limited partner or non-managing member in any partnership or limited liability company, if such entity 
takes or expects to take actions that could jeopardize our status as a REIT or require us to pay tax, we may be forced to dispose 
of our interest in such entity. Disputes between us and partners or co-venturers may result in litigation or arbitration that would 
increase our expenses and prevent our officers and directors from focusing their time and effort on our business. Consequently, 
actions by or disputes with partners or co-venturers might result in subjecting properties owned by the partnership or joint 
venture to additional risk. In addition, we may in certain circumstances be liable for the actions of our third-party partners or co-
venturers. Our joint ventures may be subject to debt and, during periods of volatile credit markets, the refinancing of such debt 
may require equity capital calls.  

25

 
 
Expectations of our company relating to environmental, social and governance factors may impose additional costs and 
expose us to new risks.

There is an increasing focus from certain investors, tenants, employees, and other stakeholders concerning corporate 
responsibility, specifically related to environmental, social and governance factors. In addition, there is an increased focus on 
such matters by various regulatory authorities, including the SEC, and the activities and expense required to comply with new 
regulations or standards may be significant. Some investors may use these factors to guide their investment strategies and, in 
some cases, may choose not to invest in us if they believe our policies relating to corporate responsibility are inadequate. Third-
party providers of corporate responsibility ratings and reports on companies have increased to meet growing investor demand 
for measurement of corporate responsibility performance. In addition, the criteria by which companies’ corporate responsibility 
practices are assessed may change, which could result in greater expectations of us and cause us to undertake costly initiatives 
to satisfy such new criteria.  Alternatively, if we elect not to or are unable to satisfy such new criteria, investors may conclude 
that our policies with respect to corporate responsibility are inadequate. We may face reputational damage in the event that our 
corporate responsibility procedures or standards do not meet the standards set by various constituencies. Furthermore, if our 
competitors’ corporate responsibility performance is perceived to be greater than ours, potential or current investors may elect 
to invest with our competitors instead. In addition, in the event that we communicate certain initiatives and goals regarding 
environmental, social and governance matters, we could fail, or be perceived to fail, in our achievement of such initiatives or 
goals, or we could be criticized for the scope of such initiatives or goals.  If we fail to satisfy the expectations of investors, 
tenants and other stakeholders or our initiatives are not executed as planned, our reputation and financial results could be 
materially and adversely affected.

We may be subject to ongoing or future litigation, including existing claims relating to the entities that owned the properties 
prior to our initial public offering and otherwise in the ordinary course of business, which could have a material adverse 
effect on our financial condition, results of operations, cash flow, the per share trading price of our common stock and 
Series A Preferred Stock, cash available for distribution, and ability to service our debt obligations.

We may be subject to ongoing or future litigation, including existing claims relating to the entities that owned the 

properties and operated the businesses prior to our initial public offering and otherwise in the ordinary course of business. Some 
of these claims may result in significant defense costs and potentially significant judgments against us, some of which are not, 
or cannot be, insured against. We generally intend to vigorously defend ourselves; however, we cannot be certain of the 
ultimate outcomes of currently asserted claims or of those that may arise in the future. In addition, we may become subject to 
litigation in connection with the formation transactions related to our initial public offering in the event that prior investors 
dispute the valuation of their respective interests, the adequacy of the consideration received by them in the formation 
transactions or the interpretation of the agreements implementing the formation transactions. Resolution of these types of 
matters against us may result in our having to pay significant fines, judgments, or settlements, which, if uninsured, or if the 
fines, judgments, and settlements exceed insured levels, could adversely impact our earnings and cash flow, thereby having an 
adverse effect on our financial condition, results of operations, cash flow, the per share trading price of our common stock and 
Series A Preferred Stock, cash available for distribution, and ability to service our debt obligations. Certain litigation or the 
resolution of certain litigation may affect the availability or cost of some of our insurance coverage, which could materially and 
adversely affect our results of operations and cash flow, expose us to increased risks that would be uninsured, and adversely 
impact our ability to attract officers and directors.

Risks Related to Our Third-Party Construction Business

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.

Our third-party construction activities have been, and are expected to continue to be, primarily focused in the Mid-

Atlantic region, although we have also historically undertaken construction projects in various states in the Southeast, 
Northeast, and Midwest regions of the U.S. As a result of our concentration of construction projects in the Mid-Atlantic region 
of the U.S., we are particularly susceptible to adverse economic or other conditions in markets in this region (such as periods of 
economic slowdown or recession, business layoffs or downsizing, industry slowdowns, relocations of businesses, labor 
disruptions, and the costs of complying with governmental regulations or increased regulation), as well as to natural disasters 
that occur in this region. We cannot assure you that our target markets will support construction and development projects of 
the type in which we typically engage. While we have the ability to provide a wide range of development and construction 
services, any adverse economic or real estate developments in the Mid-Atlantic region could materially and adversely affect our 
financial condition, results of operations, cash flow, cash available for distribution, and ability to service our debt obligations.

26

 
 
 
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, which could materially and adversely affect our results of 
operations, cash flow, and growth prospects.

For serving as general contractor, our construction business earns profit equal to the difference between the total 

construction fees that we charge and the costs that we incur to build a property. If the decision is made by a third-party client to 
abandon a construction project for any reason, our anticipated fee revenue from such project could be significantly lower than 
we expect. In addition, we defer pre-contract costs when such costs are directly associated with specific anticipated construction 
contracts and their recovery is deemed probable. In the event that we determine that the execution of a construction contract is 
no longer probable, we would be required to expense those pre-contract costs in the period in which such determination is 
made, which could materially and adversely affect our results of operations in such period. Our ability to complete the projects 
in our construction pipeline on time and on budget could be materially and adversely affected as a result of the following 
factors, among others: 

•
•
•
•
•
•
•
•

shortages of subcontractors, equipment, materials, or skilled labor;
unscheduled delays in the delivery of ordered materials and equipment;
unanticipated increases in the cost of equipment, labor, and raw materials;
unforeseen engineering, environmental, or geological problems;
weather interferences;
difficulties in obtaining necessary permits or in meeting permit conditions;
client acceptance delays; or
work stoppages and other labor disputes.

If we do not complete construction projects on time and on budget, it could have a material adverse effect on us, 

including our results of operations, cash flow, and growth prospects.

We recognize revenue for the majority of our construction projects based on estimates; therefore, variations of actual results 
from our assumptions may reduce our profitability.

In accordance with GAAP, we record revenue as work on the contract progresses. The cumulative amount of revenues 
recorded on a contract at a specified point in time is that percentage of total estimated revenues that costs incurred to date bear 
to estimated total costs. Accordingly, contract revenues and total cost estimates are reviewed and revised as the work 
progresses. Adjustments are reflected in contract revenues in the period when such estimates are revised. Estimates are based on 
management’s reasonable assumptions and experience, but are only estimates. Variations of actual results from assumptions on 
an unusually large project or on a number of average size projects could be material. We are also required to immediately 
recognize the full amount of the estimated loss on a contract when estimates indicate such a loss. Such adjustments and accrued 
losses could result in reduced profitability, which could negatively impact our cash flow from operations. 

Construction project sites are inherently dangerous workplaces, and, as a result, our failure to maintain safe construction 
project sites could result in deaths or injuries, reduced profitability, the loss of projects or clients, and possible exposure to 
litigation, any of which could materially and adversely affect our financial condition, results of operations, cash flow, and 
reputation.

Construction and maintenance sites often put our employees, employees of subcontractors, our tenants, and members 

of the public in close proximity with mechanized equipment, moving vehicles, chemical and manufacturing processes, and 
highly regulated materials. On many sites, we are responsible for safety and, accordingly, must implement appropriate safety 
procedures. If we fail to implement these procedures or if the procedures we implement are ineffective, we may suffer the loss 
of or injury to our employees, fines, or expose our tenants and members of the public to potential injury, thereby creating 
exposure to litigation. As a result, our failure to maintain adequate safety standards could result in reduced profitability or the 
loss of projects, clients, and tenants, which may materially and adversely affect our financial condition, results of operations, 
cash flow, and reputation.

Our failure to successfully and profitably bid on construction contracts could materially and adversely affect our results of 
operations and cash flow.

Many of the costs related to our construction business, such as personnel costs, are fixed and are incurred by us 

irrespective of the level of activity of our construction business. The success of our construction business depends, in part, on 
our ability to successfully and profitably bid on construction contracts for private and public sector clients. Contract proposals 

27

 
 
 
 
 
 
and negotiations are complex and frequently involve a lengthy bidding and selection process, which can be impacted by a 
number of factors, many of which are outside our control, including market conditions, financing arrangements, and required 
governmental approvals. If we are unable to maintain a consistent backlog of third-party construction contracts, our results of 
operations and cash flow could be materially and adversely affected.

If we fail to timely complete a construction project, miss a required performance standard, or otherwise fail to adequately 
perform on a construction project, we may incur losses or financial penalties, which could materially and adversely affect 
our financial condition, results of operations, cash flow, cash available for distribution, ability to service our debt 
obligations, and reputation.

We may contractually commit to a construction client that we will complete a construction project by a scheduled date 
at a fixed cost. We may also commit that a construction project, when completed, will achieve specified performance standards. 
If the construction project is not completed by the scheduled date or fails to meet required performance standards, we may 
either incur significant additional costs or be held responsible for the costs incurred by the client to rectify damages due to late 
completion or failure to achieve the required performance standards. In addition, completion of projects can be adversely 
affected by a number of factors beyond our control, including unavoidable delays from governmental inaction, public 
opposition, inability to obtain financing, weather conditions, unavailability of vendor materials, availabilities of subcontractors, 
changes in the project scope of services requested by our clients, industrial accidents, environmental hazards, labor disruptions, 
and other factors. In some cases, if we fail to meet required performance standards or milestone requirements, we may also be 
subject to agreed-upon financial damages in the form of liquidated damages, which are determined pursuant to the contract 
governing the construction project. To the extent that these events occur, the total costs of the project could exceed our 
estimates and our contracted cost and we could experience reduced profits or, in some cases, incur a loss on a project, which 
may materially and adversely affect our financial condition, results of operations, cash flow, cash available for distribution, and 
ability to service our debt obligations. Failure to meet performance standards or complete performance on a timely basis could 
also adversely affect our reputation.

Unionization or work stoppages could have a material adverse effect on us.

From time to time, our construction business and the subcontractors we engage may use unionized construction 

workers, which requires us to pay the prevailing wage in a jurisdiction to such workers. Due to the highly labor-intensive and 
price-competitive nature of the construction business, the cost of unionization or prevailing wage requirements for new 
developments could be substantial, which could adversely affect our profitability. In addition, the use of unionized construction 
workers could cause us to become subject to organized work stoppages, which would materially and adversely affect our ability 
to meet our construction timetables and could significantly increase the cost of completing a construction project.

Risks Related to the Real Estate Industry

Our business is subject to risks associated with real estate assets and the real estate industry, 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.

Our ability to pay expected dividends to our stockholders depends on our ability to generate revenues in excess of 

expenses, scheduled principal payments on debt, and capital expenditure requirements. Events and conditions generally 
applicable to owners and operators of real property that are beyond our control may decrease cash available for distribution and 
the value of our properties. These events include many of the risks set forth above under "—Risks Related to Our Business," as 
well as the following: 

•
•
•

•
•
•

•

oversupply or reduction in demand for office, retail, or multifamily space in our markets;
adverse changes in financial conditions of buyers, sellers, and tenants of properties;
vacancies or our inability to rent space on favorable terms, including possible market pressures to offer tenants 
rent abatements, tenant improvements, early termination rights, or below-market renewal options, and the need 
to periodically repair, renovate, and re-lease space;
increased operating costs, including insurance premiums, utilities, real estate taxes, and state and local taxes;
increased property taxes due to property tax changes or reassessments;
a favorable interest rate environment that may result in a significant number of potential residents of our 
multifamily apartment communities deciding to purchase homes instead of renting;
rent control or stabilization laws or other laws regulating rental housing, which could prevent us from raising 
rents to offset increases in operating costs;

28

 
 
 
 
 
 
•

•
•
•

civil unrest, acts of war, terrorist attacks, and natural disasters, including hurricanes, which may result in 
uninsured or underinsured losses;
decreases in the underlying value of our real estate;
changing submarket demographics; and
changing traffic patterns.

In addition, periods of economic downturn or recession, rising interest rates or declining demand for real estate, or the 

public perception that any of these events may occur, could result in a general decline in rents or an increased incidence of 
defaults under existing leases, 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.

Illiquidity of real estate investments could significantly impede our ability to respond to adverse changes in the performance 
of our properties and harm our financial condition.

The real estate investments made, and to be made, by us are difficult to sell quickly. As a result, our ability to promptly 

sell one or more properties in our portfolio in response to changing economic, financial, and investment conditions is limited. 
Return of capital and realization of gains, if any, from an investment generally will occur upon disposition or refinancing of the 
underlying property. We may be unable to realize our investment objectives by disposition or refinancing at attractive prices 
within any given period of time or may otherwise be unable to complete any exit strategy. In particular, our ability to dispose of 
one or more properties within a specific time period is subject to certain limitations imposed by our tax protection agreements, 
as well as weakness in or even the lack of an established market for a property, changes in the financial condition or prospects 
of prospective purchasers, changes in national or international economic conditions, and changes in laws, regulations or fiscal 
policies of jurisdictions in which the property is located.

In addition, the Code imposes restrictions on a REIT’s ability to dispose of properties that are not applicable to other 

types of real estate companies. In particular, the tax laws applicable to REITs effectively require that we hold our properties for 
investment, rather than primarily for sale in the ordinary course of business, which may cause us to forego or defer sales of 
properties that otherwise would be in our best interests. Therefore, we may not be able to vary our portfolio in response to 
economic or other conditions promptly or on favorable terms.

Our tax protection agreements could limit our ability to sell or otherwise dispose of certain properties.

In connection with the formation transactions related to our initial public offering, our Operating Partnership entered 

into tax protection agreements that provide that if we dispose of any interest in certain protected properties in a taxable 
transaction prior to the seventh (or, in a limited number of cases, the tenth) anniversary of the completion of the formation 
transactions, subject to certain exceptions, we will indemnify certain contributors, including Messrs. Hoffler, Haddad, Kirk, and 
Apperson and their respective affiliates and certain of our other officers, for their tax liabilities attributable to the built-in gain 
that existed with respect to such property interests as of the time of our initial public offering, and the tax liabilities incurred as 
a result of such tax protection payment. In addition, in connection with certain acquisitions completed since our initial public 
offering, we entered into tax protection agreements that require us to indemnify the contributors for their tax liabilities in the 
event that we dispose of the properties subject to the tax protection agreements, and may enter into similar agreements in 
connection with future property acquisitions. Therefore, although it may be in our stockholders’ best interests that we sell one 
of these properties, it may be economically prohibitive or unattractive for us to do so because of these obligations. Moreover, as 
a result of these potential tax liabilities, Messrs. Hoffler, Haddad, Kirk, and Apperson and certain of our other officers may 
have a conflict of interest with respect to our determination as to certain of our properties.

As an owner of real estate, we could incur significant costs and liabilities related to 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 and 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, 

29

 
 
 
 
 
 
environmental laws may impose restrictions on the manner in which the properties may be used or businesses may be operated, 
and these restrictions may require substantial expenditures. See "Part I—Business—Regulation."

Some of our properties have been or may be impacted by contamination arising from current or prior uses of the 

property, or adjacent properties, for commercial or industrial purposes. Such contamination may arise from spills of petroleum 
or hazardous substances or releases from tanks used to store such materials. For example, some of the tenants of properties in 
our retail portfolio operate gas stations or other businesses that utilize storage tanks to store petroleum products, propane, or 
wastes typically associated with automobile service or other operations conducted at the properties, and spills or leaks of 
hazardous materials from those storage tanks could expose us to liability. See "Part I—Business—Regulation—Environmental 
Matters." In addition to the foregoing, while we obtained Phase I Environmental Site Assessments for each of the properties in 
our portfolio, the assessments are limited in scope and may have failed to identify all environmental conditions or concerns. For 
example, they do not generally include soil sampling, subsurface investigations or hazardous materials surveys. Furthermore, 
we do not have current Phase I Environmental Site Assessment reports for all of the properties in our portfolio and, as such, 
may not be aware of all potential or existing environmental contamination liabilities at the properties in our portfolio. As a 
result, we could potentially incur material liability for these issues.

As the owner of the buildings on our properties, we could face liability for the presence of hazardous materials, such as 

asbestos or lead, or other adverse conditions, such as poor indoor air quality, in our buildings. Environmental laws govern the 
presence, maintenance, and removal of hazardous materials in buildings, and if we do not comply with such laws, we could face 
fines for such noncompliance. Also, we could be liable to third parties, such as occupants of the buildings, for damages related 
to exposure to hazardous materials or adverse conditions in our buildings, and we could incur material expenses with respect to 
abatement or remediation of hazardous materials or other adverse conditions in our buildings. In addition, some of our tenants 
may routinely 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, 
and changes in laws could increase the potential liability for noncompliance. This may result in significant unanticipated 
expenditures or may otherwise materially and adversely affect our operations, or those of our tenants, which could in turn have 
an adverse effect on us. If we incur material environmental liabilities in the future, we may face significant remediation costs, 
and we may find it difficult to sell any affected properties.

We are subject to risks from natural disasters, such as hurricanes and flooding, and the risks associated with the physical 
effects of climate change.

Natural disasters and severe weather such as flooding, earthquakes, tornadoes or hurricanes may result in significant 
damage to our properties. Many of our properties are located in Virginia Beach, Virginia, Baltimore, Maryland, and elsewhere 
in the Mid-Atlantic, which historically have experienced heightened risk for natural disasters like hurricanes and flooding. The 
extent of our casualty losses and loss in operating income in connection with such events is a function of the severity of the 
event and the total amount of exposure in the affected area. When we have geographic concentration of exposures, a single 
catastrophe (such as an earthquake) or destructive weather event (such as a tornado or hurricane) affecting a region may have a 
significant negative effect on our financial condition and results of operations. Our financial results may be adversely affected 
by our exposure to losses arising from natural disasters or severe weather.

We also are exposed to risks associated with inclement winter weather, particularly in the Mid-Atlantic, including 

increased costs for the removal of snow and ice. Inclement weather also could increase the need for maintenance and repair of 
our properties.

Lastly, to the extent that climate change does occur, its physical effects could have a material adverse effect on our 

properties, operations, and business. To the extent climate change causes changes in weather patterns, our markets could 
experience increases in storm intensity. These conditions could result in physical damage to our properties or declining demand 
for space in our buildings or the inability of us to operate the buildings at all in the areas affected by these conditions. Climate 
change also may have indirect effects on our business by increasing the cost of (or making unavailable) property insurance on 
terms we find acceptable, increasing the cost of energy, and increasing the cost of snow removal or related costs at our 
properties. Proposed legislation and regulatory actions to address climate change could increase utility and other costs of 
operating our properties which, if not offset by rising rental income, would reduce our net income. Should the impact of climate 
change be material in nature or occur for lengthy periods of time, our properties, operations, or business would be adversely 
affected.

30

 
 
We may be subject to unknown or contingent liabilities related to acquired properties and properties that we may acquire in 
the future, which could have a material adverse effect on us.

Properties that we have acquired and properties that we may acquire in the future may be subject to unknown or 

contingent liabilities for which we may have no recourse, or only limited recourse, against the sellers. In general, the 
representations and warranties provided under the transaction agreements related to the purchase of properties that we acquire 
may not survive the completion of the transactions. Furthermore, indemnification under such agreements may be limited and 
subject to various materiality thresholds, a significant deductible, or an aggregate cap on losses. As a result, there is no 
guarantee that we will recover any amounts with respect to losses due to breaches by the sellers of their representations and 
warranties. In addition, the total amount of costs and expenses that may be incurred with respect to liabilities associated with 
these properties may exceed our expectations, and we may experience other unanticipated adverse effects, all of which may 
materially and adversely affect us.

Our properties may contain or develop harmful mold or suffer from other air quality issues, which could lead to liability for 
adverse health effects and costs of remediation.

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 is alleged to 
have occurred.

We may incur significant costs complying with various federal, state, and local laws, regulations, and covenants that are 
applicable to our properties.

Properties are subject to various covenants and federal, state, and local laws and regulatory requirements, including 

permitting and licensing requirements. Local regulations, including municipal or local ordinances, zoning restrictions, and 
restrictive covenants imposed by community developers may restrict our use of our properties and may require us to obtain 
approval from local officials or community standards organizations at any time with respect to our properties, including prior to 
developing or acquiring a property or when undertaking renovations of any of our existing properties. Among other things, 
these restrictions may relate to fire and safety, seismic, or hazardous material abatement requirements. There can be no 
assurance that existing laws and regulatory policies will not adversely affect us or the timing or cost of any future development, 
acquisitions, or renovations, or that additional regulations will not be adopted that increase such delays or result in additional 
costs. Our growth strategy may be affected by our ability to obtain permits, licenses, and zoning relief.

In addition, federal and state laws and regulations, including laws such as the ADA and the Fair Housing Amendment 
Act of 1988 ("FHAA"), impose further restrictions on our properties and operations. Under the ADA and the FHAA, all public 
accommodations must meet federal requirements related to access and use by disabled persons. Some of our properties may 
currently be in non-compliance with the ADA or the FHAA. If one or more of the properties in our portfolio is not in 
compliance with the ADA, the FHAA, or any other regulatory requirements, we may incur additional costs to bring the property 
into compliance, incur governmental fines or the award of damages to private litigants, or be unable to refinance such 
properties. In addition, we do not know whether existing requirements will change or whether future requirements will require 
us to make significant unanticipated expenditures that will adversely impact our financial condition, results of operations, cash 
flow, cash available for distribution, and ability to service our debt obligations.

Risks Related to Our Organizational Structure

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.

As of December 31, 2022, Daniel Hoffler, our Executive Chairman, owned approximately 5.8% and, collectively, 

Messrs. Hoffler, Haddad, and Kirk owned approximately 10.1% of the combined outstanding shares of our common stock and 
OP Units of our Operating Partnership (which OP Units may be redeemable for shares of our common stock). Consequently, 

31

 
 
 
 
 
 
 
 
these individuals may be able to significantly influence the outcome of matters submitted for stockholder action, including the 
approval of significant corporate transactions, including business combinations, consolidations, and mergers. 

Conflicts of interest may exist or could arise in the future between the interests of our stockholders and the interests of 
holders of units in our Operating Partnership, which may impede business decisions that could benefit our stockholders.

Conflicts of interest may exist or could arise in the future as a result of the relationships between us and our affiliates, 

and our Operating Partnership or any partner thereof. Our directors and officers have duties to our company under Maryland 
law in connection with their management of our company. At the same time, we, as the general partner of our Operating 
Partnership, have fiduciary duties and obligations to our Operating Partnership and its limited partners under Virginia law and 
the partnership agreement of our Operating Partnership in connection with the management of our Operating Partnership. Our 
fiduciary duties and obligations as the general partner of our Operating Partnership may come into conflict with the duties of 
our directors and officers to our company. Messrs. Hoffler, Haddad, and Kirk own a significant interest in our Operating 
Partnership as limited partners and may have conflicts of interest in making decisions that affect both our stockholders and the 
limited partners of our Operating Partnership.

Under Virginia law, a general partner of a Virginia limited partnership has fiduciary duties of loyalty and care to the 

partnership and its partners and must discharge its duties and exercise its rights as general partner under the partnership 
agreement or Virginia law consistently with the obligation of good faith and fair dealing. The partnership agreement provides 
that, in the event of a conflict between the interests of our Operating Partnership or any partner, and the separate interests of our 
company or our stockholders, we, in our capacity as the general partner of our Operating Partnership, are under no obligation 
not to give priority to the separate interests of our company or our stockholders, and that any action or failure to act on our part 
or on the part of our directors that gives priority to the separate interests of our company or our stockholders that does not result 
in a violation of the contractual rights of the limited partners of the Operating Partnership under its partnership agreement does 
not violate the duty of loyalty that we, in our capacity as the general partner of our Operating Partnership, owe to the Operating 
Partnership and its partners.

Additionally, the partnership agreement provides that we will not be liable to the Operating Partnership or any partner 

for monetary damages for losses sustained, liabilities incurred, or benefits not derived by the Operating Partnership or any 
limited partner, except for liability for our intentional harm or gross negligence. Our Operating Partnership must indemnify us, 
our directors and officers, and our designees from and against any and all claims that relate to the operations of our Operating 
Partnership, unless: (i) an act or omission of the person was material to the matter giving rise to the action and either was 
committed in bad faith or was the result of active and deliberate dishonesty, (ii) the person actually received an improper 
personal benefit in violation or breach of the partnership agreement, or (iii) in the case of a criminal proceeding, the 
indemnified person had reasonable cause to believe that the act or omission was unlawful. Our Operating Partnership must also 
pay or reimburse the reasonable expenses of any such person upon its receipt of a written affirmation of the person’s good faith 
belief that the standard of conduct necessary for indemnification has been met and a written undertaking to repay any amounts 
paid or advanced if it is ultimately determined that the person did not meet the standard of conduct for indemnification. Our 
Operating Partnership will not indemnify or advance funds to any person with respect to any action initiated by the person 
seeking indemnification without our approval (except for any proceeding brought to enforce such person’s right to 
indemnification under the partnership agreement) or if the person is found to be liable to our Operating Partnership on any 
portion of any claim in the action.

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.

Our charter contains certain ownership limits with respect to our stock. Our charter, among other restrictions, prohibits 

the beneficial or constructive ownership by any person of more than 9.8% in value or number of shares, whichever is more 
restrictive, of the outstanding shares of any class or series of our stock, excluding any shares that are not treated as outstanding 
for federal income tax purposes. Our board of directors, in its sole and absolute discretion, may exempt a person, prospectively 
or retroactively, from this ownership limit if certain conditions are satisfied. This ownership limit as well as other restrictions on 
ownership and transfer of our stock in our charter may: 

•

•

discourage a tender offer or other transactions or a change in management or of control that might involve a 
premium price for our common stock or that our stockholders otherwise believe to be in their best interests; and
result in the transfer of shares acquired in excess of the restrictions to a trust for the benefit of a charitable 
beneficiary and, as a result, the forfeiture by the acquirer of certain of the benefits of owning the additional 
shares.

32

 
 
 
 
 
We could increase the number of authorized shares of stock, classify and reclassify unissued stock, and issue stock without 
stockholder approval.

Our board of directors, without stockholder approval, has the power under our charter to amend our charter to increase 

or decrease the aggregate number of shares of stock or the number of shares of stock of any class or series that we are 
authorized to issue. In addition, under our charter, our board of directors, without stockholder approval, has the power to 
authorize us to issue authorized but unissued shares of our common stock or preferred stock and to classify or reclassify any 
unissued shares of our common stock or preferred stock into one or more classes or series of stock and set the preference, 
conversion or other rights, voting powers, restrictions, limitations as to dividends and other distributions, qualifications, or 
terms or conditions of redemption for such newly classified or reclassified shares. As a result, we may issue series or classes of 
common stock or preferred stock with preferences, dividends, powers, and rights, voting or otherwise, that are senior to, or 
otherwise conflict with, the rights of holders of our common stock. Although our board of directors has no such intention at the 
present time, it could establish a class or series of preferred stock that could, depending on the terms of such series, delay, defer, 
or prevent a transaction or a change of control that might involve a premium price for our common stock or that our 
stockholders otherwise believe to be in their best interests.

Certain provisions of Maryland law could inhibit changes of control, which may discourage third parties from conducting a 
tender offer or seeking other change of control transactions that could involve a premium price for our common stock or 
that our stockholders otherwise believe to be in their best interests.

Certain provisions of the Maryland General Corporation Law (the "MGCL") may have the effect of inhibiting a third 

party from making a proposal to acquire us or of impeding a change of control under circumstances that otherwise could 
provide the holders of shares of our common stock with the opportunity to realize a premium over the then-prevailing market 
price of such shares, including: 

•

•

"business combination" provisions that, subject to limitations, prohibit certain business combinations between 
us and an "interested stockholder" (defined generally as any person who beneficially owns 10% or more of the 
voting power of our outstanding voting shares or an affiliate or associate of ours who was the beneficial owner, 
directly or indirectly, of 10% or more of the voting power of our then outstanding stock at any time within the 
two-year period immediately prior to the date in question) or an affiliate thereof for five years after the most 
recent date on which the stockholder becomes an interested stockholder, and thereafter impose certain fair price 
and supermajority stockholder voting requirements on these combinations; and
"control share" provisions that provide that holders of "control shares" of our company (defined as shares of 
stock that, when aggregated with other shares of stock controlled by the stockholder, entitle the stockholder to 
exercise one of three increasing ranges of voting power in electing directors) acquired in a "control share 
acquisition" (defined as the direct or indirect acquisition of ownership or control of issued and outstanding 
"control shares") have no voting rights with respect to their control shares, except to the extent approved by our 
stockholders by the affirmative vote of at least two-thirds of all the votes entitled to be cast on the matter, 
excluding all interested shares.

By resolution of our board of directors, we have opted out of the business combination provisions of the MGCL and 
provided that any business combination between us and any other person is exempt from the business combination provisions 
of the MGCL, provided that the business combination is first approved by our board of directors (including a majority of 
directors who are not affiliates or associates of such persons). In addition, pursuant to a provision in our bylaws, we have opted 
out of the control share provisions of the MGCL. However, our board of directors may by resolution elect to opt in to the 
business combination provisions of the MGCL and we may, by amendment to our bylaws, opt in to the control share provisions 
of the MGCL in the future.

Certain provisions of the MGCL permit our board of directors, without stockholder approval and regardless of what is 

currently provided in our charter or bylaws, to implement certain corporate governance provisions, some of which are not 
currently applicable to us. If implemented, these provisions may have the effect of limiting or precluding a third party from 
making an unsolicited acquisition proposal for us or of delaying, deferring, or preventing a change in control of us under 
circumstances that otherwise could provide the holders of shares of our common stock with the opportunity to realize a 
premium over the then current market price. Our charter contains a provision whereby we elect, at such time as we become 
eligible to do so, to be subject to the provisions of Title 3, Subtitle 8 of the MGCL relating to the filling of vacancies on our 
board of directors.

33

 
 
 
 
 
 
Certain provisions in the partnership agreement of our Operating Partnership may delay, make more difficult, or prevent 
unsolicited acquisitions of us.

Provisions in the partnership agreement of our Operating Partnership may delay, make more difficult, or prevent 

unsolicited acquisitions of us or changes of our control. These provisions could discourage third parties from making proposals 
involving an unsolicited acquisition of us or change of our control, although some of our stockholders might consider such 
proposals, if made, desirable. These provisions include, among others: 

•
•

•
•

•

redemption rights;
a requirement that we may not be removed as the general partner of our Operating Partnership without our 
consent;
transfer restrictions on OP Units;
our ability, as general partner, in some cases, to amend the partnership agreement and to cause the Operating 
Partnership to issue units with terms that could delay, defer, or prevent a merger or other change of control of us 
or our Operating Partnership without the consent of the limited partners; and
the right of the limited partners to consent to direct or indirect transfers of the general partnership interest, 
including as a result of a merger or a sale of all or substantially all of our assets, in the event that such transfer 
requires approval by our common stockholders.

The limited partners in our Operating Partnership (other than us) owned approximately 23.3% of the outstanding OP 

Units of our Operating Partnership as of December 31, 2022.  

Our rights and the rights of our stockholders to take action against our directors and officers are limited.

Under Maryland law, generally, a director will not be liable if he or she performs his or her duties in good faith, in a 

manner he or she reasonably believes to be in our best interests and with the care that an ordinarily prudent person in a like 
position would use under similar circumstances. In addition, our charter limits the liability of our directors and officers to us 
and our stockholders for money damages, except for liability resulting from:

•
•

actual receipt of an improper benefit or profit in money, property or services; or
active and deliberate dishonesty by the director or officer that was established by a final judgment as being 
material to the cause of action adjudicated.

Our charter authorizes us to indemnify our directors and officers for actions taken by them in those capacities to the 
maximum extent permitted by Maryland law. Our bylaws require us to indemnify each director and officer, to the maximum 
extent permitted by Maryland law, in the defense of any proceeding to which he or she is made, or threatened to be made, a 
party by reason of his or her service to us. In addition, we may be obligated to advance the defense costs incurred by our 
directors and officers. We have entered into indemnification agreements with each of our executive officers and directors 
whereby we agreed to indemnify our directors and executive officers to the fullest extent permitted by Maryland law against all 
expenses and liabilities incurred in their capacity as an officer or director, subject to limited exceptions. As a result, we and our 
stockholders may have more limited rights against our directors and officers than might otherwise exist absent the current 
provisions in our charter and bylaws and the indemnification agreements or that might exist with other companies.

We are a holding company with no direct operations and, as such, we will rely on funds received from our Operating 
Partnership to pay liabilities, and the interests of our stockholders will be structurally subordinated to all liabilities and 
obligations of our Operating Partnership and its subsidiaries.

We are a holding company and conduct substantially all of our operations through our Operating Partnership. We do 

not have, apart from an interest in our Operating Partnership, any independent operations. As a result, we rely on cash 
distributions from our Operating Partnership to pay any dividends we might declare on shares of our common stock and 
preferred stock. We also rely on distributions from our Operating Partnership to meet any of our obligations, including any tax 
liability on taxable income allocated to us from our Operating Partnership. In addition, because we are a holding company, your 
claims as a stockholder will be structurally subordinated to all existing and future liabilities and obligations (whether or not for 
borrowed money) of our Operating Partnership and its subsidiaries. Therefore, in the event of our bankruptcy, liquidation, or 
reorganization, our assets and those of our Operating Partnership and its subsidiaries will be available to satisfy the claims of 
our stockholders only after all of our and our Operating Partnership’s and its subsidiaries’ liabilities and obligations have been 
paid in full.

34

 
 
 
 
 
 
 
Our Operating Partnership may issue additional OP Units to third parties without the consent of our stockholders, which 
would reduce our ownership percentage in our Operating Partnership and could have a dilutive effect on the amount of 
distributions made to us by our Operating Partnership and, therefore, the amount of distributions we can make to our 
stockholders.

As of December 31, 2022, we owned 76.7% of the outstanding OP Units in our Operating Partnership. We regularly 
have issued OP Units to third parties as consideration for acquisitions, and we may continue to do so in the future. Any such 
future issuances would reduce our ownership percentage in our Operating Partnership and could affect the amount of 
distributions made to us by our Operating Partnership and, therefore, the amount of distributions we can make to our 
stockholders. Because stockholders do not directly own OP Units, you do not have any voting rights with respect to any such 
issuances or other partnership level activities of our Operating Partnership.  

Risks Related to Our Status as a REIT

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 have elected to be taxed and to operate in a manner that will allow us to qualify as a REIT for federal income tax 

purposes commencing with our taxable year ended December 31, 2013. We have not requested and do not plan to request a 
ruling from the Internal Revenue Service (the "IRS") that we qualify as a REIT. Therefore, we cannot be assured that we will 
qualify as a REIT, or that we will remain qualified as such in the future. If we fail to qualify as a REIT or otherwise lose our 
REIT status in any taxable year, we will face serious tax consequences that would substantially reduce the funds available for 
distribution to our stockholders for each of the years involved because: 

•

•
•

we would not be allowed a deduction for dividends paid to stockholders in computing our taxable income and 
would be subject to U.S. federal income tax at regular corporate rates;
we could be subject to increased state and local taxes; and
unless we are entitled to relief under certain U.S. federal income tax laws, we could not re-elect REIT status 
until the fifth calendar year after the year in which we failed to qualify as a REIT.

In addition, if we fail to qualify as a REIT, we will no longer be required to make distributions. As a result of all these 
factors, our failure to qualify as a REIT could impair our ability to expand our business and raise capital, and it would adversely 
affect the value of our common stock and Series A Preferred Stock.

Even if we qualify as a REIT, we may face other tax liabilities that reduce our cash flows.

Even if we qualify for taxation as a REIT, we may be subject to certain federal, state, and local taxes on our income 

and assets, including taxes on any undistributed income, tax on income from some activities conducted as a result of a 
foreclosure, and state or local income, property, and transfer taxes. In addition, our TRS will be subject to regular corporate 
federal, state, and local taxes. Any of these taxes would decrease cash available for distribution to our stockholders.

Complying with REIT requirements may cause us to forego otherwise attractive opportunities or liquidate otherwise 
attractive investments.

To qualify as a REIT for federal income tax purposes, we must continually satisfy tests concerning, among other 

things, the sources of our income, the nature and diversification of our assets, the amounts we distribute to our stockholders, 
and the ownership of our capital stock. In order to meet these tests, we may be required to forego investments we might 
otherwise make. Thus, compliance with the REIT requirements may hinder our performance.

In particular, we must ensure that at the end of each calendar quarter, at least 75% of the value of our assets consists of 

cash, cash items, government securities, and qualified real estate assets. The remainder of our investment in securities (other 
than government securities, securities of TRSs, and qualified real estate assets) generally cannot include more than 10% of the 
outstanding voting securities of any one issuer or more than 10% of the total value of the outstanding securities of any one 
issuer. In addition, in general, no more than 5% of the value of our assets (other than government securities, securities of TRSs, 
and qualified real estate assets) can consist of the securities of any one issuer, and no more than 20% of the value of our total 
assets can be represented by the securities of one or more TRSs. If we fail to comply with these requirements at the end of any 
calendar quarter, we must correct the failure within 30 days after the end of the calendar quarter or qualify for certain statutory 
relief provisions to avoid losing our REIT qualification and suffering adverse tax consequences. As a result, we may be 

35

 
 
 
 
 
 
required to liquidate otherwise attractive investments. These actions could have the effect of reducing our income and amounts 
available for distribution to our stockholders. 

The prohibited transactions tax may limit our ability to dispose of our properties.

A REIT’s net income from prohibited transactions is subject to a 100% tax. In general, prohibited transactions are 

sales or other dispositions of property other than foreclosure property, held primarily for sale to customers in the ordinary 
course of business. We may be subject to the prohibited transaction tax equal to 100% of the net gain upon a disposition of real 
property. Although a safe harbor to the characterization of the sale of real property by a REIT as a prohibited transaction is 
available, we cannot assure you that we can comply with the safe harbor or that we will avoid owning property that may be 
characterized as held primarily for sale to customers in the ordinary course of business. Consequently, we may choose not to 
engage in certain sales of our properties or may conduct such sales through our TRS, which would be subject to federal and 
state income taxation.

Changes to the U.S. federal income tax laws, including the enactment of certain tax reform measures, could have an adverse 
impact on our business and financial results.

In recent years, numerous legislative, judicial and administrative changes have been made to the U.S. federal income 
tax laws applicable to investments in real estate and REITs, and it is possible that additional legislation may be enacted in the 
future. There can be no assurance that future changes to the U.S. federal income tax laws or regulatory changes will not be 
proposed or enacted that could impact our business and financial results. The REIT rules are regularly under review by persons 
involved in the legislative process and by the IRS and the U.S. Treasury Department, which may result in revisions to 
regulations and interpretations in addition to statutory changes. If enacted, certain of such changes could have an adverse 
impact on our business and financial results. 

We cannot predict whether, when, or to what extent any new U.S. federal tax laws, regulations, interpretations, or 

rulings will impact the real estate investment industry or REITs. Prospective investors are urged to consult their tax advisors 
regarding the effect of potential future changes to the federal tax laws on an investment in our shares.

The ability of our board of directors to revoke our REIT qualification without stockholder approval may cause adverse 
consequences to our stockholders.

Our charter provides that our board of directors may revoke or otherwise terminate our REIT election, without the 
approval of our stockholders, if it determines that it is no longer in our best interests to continue to qualify as a REIT. If we 
cease to qualify as a REIT, we would become subject to U.S. federal income tax on our taxable income and would no longer be 
required to distribute most of our taxable income to our stockholders, which may have adverse consequences on the total return 
to our stockholders.

Our ownership of our TRS will be subject to limitations and our transactions with our TRS will cause us to be subject to a 
100% penalty tax on certain income or deductions if those transactions are not conducted on arm’s-length terms.

Overall, no more than 20% of the value of a REIT’s assets may consist of stock or securities of one or more TRS. In 

addition, the Code limits the deductibility of interest paid or accrued by a TRS to its parent REIT to assure that the TRS is 
subject to an appropriate level of corporate taxation. The Code also imposes a 100% excise tax on certain transactions between 
a TRS and its parent REIT that are not conducted on an arm’s-length basis. We will monitor the value of our respective 
investments in our TRS for the purpose of ensuring compliance with TRS ownership limitations and will structure our 
transactions with our TRS on terms that we believe are arm’s length to avoid incurring the 100% excise tax described above. 
There can be no assurance, however, that we will be able to comply with the 20% REIT subsidiaries limitation or to avoid 
application of the 100% excise tax. 

Shareholders may be restricted from acquiring or transferring certain amounts of our capital stock.

The restrictions on ownership and transfer in our charter may inhibit market activity in our capital stock and restrict 

our business combination opportunities.

In order to qualify as a REIT for each taxable year after 2013, five or fewer individuals, as defined in the Code, may 
not own, beneficially or constructively, more than 50% in value of our issued and outstanding stock at any time during the last 
half of a taxable year. Attribution rules in the Code determine if any individual or entity beneficially or constructively owns our 
capital stock under this requirement. Additionally, at least 100 persons must beneficially own our capital stock during at least 

36

 
 
 
 
 
 
 
 
335 days of a taxable year for each taxable year after 2013. To help ensure that we meet these tests, our charter restricts the 
acquisition and ownership of shares of our capital stock.

Our charter, with certain exceptions, authorizes our directors to take such actions as are necessary to preserve our 

qualification as a REIT. Unless exempted by our board of directors, our charter prohibits any person from beneficially or 
constructively owning more than 9.8% in value or number of shares, whichever is more restrictive, of the outstanding shares of 
any class or series of our capital or preferred stock. Our board of directors may not grant an exemption from this restriction to 
any proposed transferee whose ownership in excess of 9.8% of the value of our outstanding shares would result in our failing to 
qualify as a REIT. This restriction, as well as other restrictions on transferability and ownership will not apply, however, if our 
board of directors determines that it is no longer in our best interests to continue to qualify as a REIT.

Dividends payable by REITs do not qualify for the reduced tax rates available for some dividends.

The maximum tax rate applicable to "qualified dividend income" payable to U.S. stockholders that are taxed at 

individual rates is 20%. Dividends payable by REITs, however, generally are not eligible for the reduced rates on qualified 
dividend income. Instead, our ordinary dividends generally are taxed at the higher tax rates applicable to ordinary income, the 
current maximum rate of which is 37%. However, for taxable years prior to 2026, individual stockholders are generally allowed 
to deduct 20% of the aggregate amount of ordinary dividends distributed by us, subject to certain limitations, which would 
reduce the maximum marginal effective tax rate for individuals on the receipt of such ordinary dividends to 29.6%.

If our Operating Partnership failed to qualify as a partnership for federal income tax purposes, we would cease to qualify as 
a REIT and suffer other adverse consequences.

We believe that our Operating Partnership will be treated as a partnership for federal income tax purposes. As a 

partnership, our Operating Partnership will not be subject to federal income tax on its income. Instead, each of its partners, 
including us, will be allocated, and may be required to pay tax with respect to, its share of our Operating Partnership’s income. 
We cannot assure you, however, that the IRS will not challenge the status of our Operating Partnership or any other subsidiary 
partnership in which we own an interest as a partnership for federal income tax purposes, or that a court would not sustain such 
a challenge. If the IRS were successful in treating our Operating Partnership or any such other subsidiary partnership as an 
entity taxable as a corporation for federal income tax purposes, we would fail to meet the gross income tests and certain of the 
asset tests applicable to REITs and, accordingly, we would likely cease to qualify as a REIT. Also, the failure of our Operating 
Partnership or any subsidiary partnerships to qualify as a partnership could cause it to become subject to federal and state 
corporate income tax, which would reduce significantly the amount of cash available for debt service and for distribution to its 
partners, including us.

To maintain our REIT status, we may be forced to borrow funds during unfavorable market conditions, and the 
unavailability of such capital on favorable terms at the desired times, or at all, may cause us to curtail our investment 
activities or dispose of assets at inopportune times or on unfavorable terms, 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.

To qualify as a REIT, we generally must distribute to our stockholders at least 90% of our REIT taxable income each 
year, excluding net capital gains, and we will be subject to regular corporate income taxes to the extent that we distribute less 
than 100% of our REIT taxable income each year. In addition, we will be subject to a 4% nondeductible excise tax on the 
amount, if any, by which distributions paid by us in any calendar year are less than the sum of (1) 85% of our ordinary income, 
(2) 95% of our capital gain net income and (3) 100% of our undistributed income from prior years. In order to maintain our 
REIT status and avoid the payment of income and excise taxes, we may need to borrow funds to meet the REIT distribution 
requirements even if the then prevailing market conditions are not favorable for these borrowings. These borrowing needs could 
result from, among other things, differences in timing between the actual receipt of cash and inclusion of income for federal 
income tax purposes, or the effect of non-deductible capital expenditures, the creation of reserves or required principal or 
amortization payments. These sources, however, may not be available on favorable terms or at all. Our access to third-party 
sources of capital depends on a number of factors, including the market’s perception of our growth potential, our current debt 
levels, the market price of our common stock and Series A Preferred Stock, and our current and potential future earnings. We 
cannot assure you that we will have access to such capital on favorable terms at the desired times, or at all, which may cause us 
to curtail our investment activities or dispose of assets at inopportune times or on unfavorable terms, 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.

37

 
 
 
 
 
 
 
Risks Related to Our Capital Stock 

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 Series A Preferred Stock.

We intend to continue to pay regular quarterly distributions to our stockholders. All distributions will be made at the 

discretion of our board of directors and will be based upon, among other factors, our historical and projected results of 
operations, financial condition, cash flows and liquidity, maintenance of our REIT qualification and other tax considerations, 
capital expenditure and other expense obligations, debt covenants, contractual prohibitions or other limitations, applicable law, 
and such other matters as our board of directors may deem relevant from time to time. If sufficient cash is not available for 
distribution from our operations, we may have to fund distributions from working capital, borrow to provide funds for such 
distributions, or reduce the amount of such distributions. To the extent we borrow to fund distributions, our future interest costs 
would increase, thereby reducing our earnings and cash available for distribution from what they otherwise would have been. If 
cash available for distribution generated by our assets is less than our current estimate, or if such cash available for distribution 
decreases in future periods from expected levels, our inability to make the expected distributions could result in a decrease in 
the market price of our common stock and Series A Preferred Stock.

Our ability to make distributions may also be limited by our amended credit facility (as defined below). Under the 

terms of the amended credit facility, we may not pay cash dividends if a default has occurred and is continuing or would result 
therefrom. However, if certain defaults or events of default exist, we may pay cash dividends to the extent necessary to (i) 
maintain our status as a REIT and (ii) avoid federal or state income excise taxes. 

As a result of the foregoing, we may not be able to make distributions in the future, and our inability to make 
distributions, or to make distributions at expected levels, could result in a decrease in the per share price of our common stock 
and Series A Preferred Stock.

The market price and trading volume of our common stock and Series A Preferred Stock may be volatile and could decline 
substantially in the future.

The market price of our common stock and Series A Preferred Stock may be volatile in the future. In addition, the 

trading volume in our common stock and Series A Preferred Stock may fluctuate and cause significant price variations to occur. 
We cannot assure stockholders that the market price of our common stock and Series A Preferred Stock will not fluctuate or 
decline significantly in the future, including as a result of factors unrelated to our operating performance or prospects in 2023 
compared to 2022. In particular, the market price of our common stock and Series A Preferred Stock could be subject to wide 
fluctuations in response to a number of factors, including, among others, the following: 

•
•
•
•
•
•
•
•
•
•
•
•

•
•
•
•
•
•
•
•
•
•

actual or anticipated variations in our quarterly operating results or dividends;
changes in our FFO, Normalized FFO, or earnings estimates;
publication of research reports about us or the real estate industry;
increases in market interest rates that lead purchasers of our shares to demand a higher yield;
changes in market valuations of similar companies;
adverse market reaction to any additional debt we incur in the future;
additions or departures of key management personnel;
actions by institutional stockholders;
speculation in the press or investment community;
the realization of any of the other risk factors presented in this Annual Report on Form 10-K;
the extent of investor interest in our securities;
the general reputation of REITs and the attractiveness of our equity securities in comparison to other equity 
securities, including securities issued by other real estate-based companies;
changes in the federal government;
our underlying asset value;
investor confidence in the stock and bond markets generally;
further changes in tax laws;
future equity issuances;
failure to meet earnings estimates;
failure to meet and maintain REIT qualifications;
changes in our credit ratings;
general market and economic conditions;
our issuance of debt securities or additional preferred equity securities; and

38

 
 
 
 
 
•

our financial condition, results of operations, and prospects.

In the past, securities class action litigation has often been instituted against companies following periods of volatility 

in the price of their common stock. This type of litigation could result in substantial costs and divert our management’s 
attention and resources, which could have a material and adverse effect on our financial condition, results of operations, cash 
flow, cash available for distribution, ability to service our debt obligations, and the per share trading price of our common stock 
and Series A Preferred Stock.

Increases in market interest rates may have an adverse effect on the trading prices of our common stock and Series A 
Preferred Stock as prospective purchasers of our common stock and Series A Preferred Stock may expect a higher dividend 
yield and as an increased cost of borrowing may decrease our funds available for distribution.

One of the factors that will influence the trading prices of our common stock and Series A Preferred Stock will be the 

dividend yield on the stock (as a percentage of the price of our common stock or Series A Preferred Stock, as applicable) 
relative to market interest rates. An increase in market interest rates may lead prospective purchasers of our common stock or 
Series A Preferred Stock to expect a higher dividend yield (with a resulting decline in the trading prices of our common stock or 
Series A Preferred Stock, as applicable) and higher interest rates would likely increase our borrowing costs and potentially 
decrease funds available for distribution. Thus, higher market interest rates could cause the market price of our common stock 
or Series A Preferred Stock to decrease.

Our Series A Preferred Stock is subordinate to our existing and future debt, and the interests of holders of our Series A 
Preferred Stock could be diluted by the issuance of additional shares of preferred stock and by other transactions. 

Our Series A Preferred Stock ranks junior to all of our existing and future indebtedness, any classes and series of our 

capital stock expressly designated as ranking senior to our Series A Preferred Stock as to distribution rights and rights upon our 
liquidation, dissolution or winding up, and other non-equity claims on us and our assets available to satisfy claims against us, 
including claims in bankruptcy, liquidation, or similar proceedings. Subject to limitations prescribed by Maryland law and our 
charter, our board of directors is authorized to issue, from our authorized but unissued shares of capital stock, preferred stock in 
such classes or series as our board of directors may determine and to establish from time to time the number of shares of 
preferred stock to be included in any such class or series. The issuance of additional shares of Series A Preferred Stock or 
additional shares of capital stock ranking on parity with our Series A Preferred Stock would dilute the interests of the holders of 
our Series A Preferred Stock, and the issuance of shares of any class or series of our capital stock expressly designated as 
ranking senior to our Series A Preferred Stock as to distribution rights and rights upon our liquidation, dissolution or winding 
up, or the incurrence of additional indebtedness could adversely affect our ability to pay dividends on, redeem, or pay the 
liquidation preference on our Series A Preferred Stock. Other than the conversion right afforded to holders of our Series A 
Preferred Stock that may become exercisable in connection with a change of control (as defined in the articles supplementary 
designating the terms of our Series A Preferred Stock), none of the provisions relating to our Series A Preferred Stock contain 
any terms relating to or limiting our indebtedness or affording the holders of our Series A Preferred Stock protection in the 
event of a highly leveraged or other transaction, including a merger or the sale, lease, or conveyance of all or substantially all 
our assets, that might adversely affect the holders of our Series A Preferred Stock, so long as the rights of the holders of our 
Series A Preferred Stock are not materially and adversely affected. 

Holders of our Series A Preferred Stock have extremely limited voting rights. 

Our common stock is the only class of our securities that carry full voting rights. Voting rights for holders of our 

Series A Preferred Stock exist primarily with respect to the ability to elect, together with holders of our capital stock ranking on 
parity with our Series A Preferred Stock and having similar voting rights, two additional directors to our board of directors in 
the event that six quarterly dividends (whether or not consecutive) payable on our Series A Preferred Stock are in arrears, and 
with respect to voting on amendments to our charter or articles supplementary relating to our Series A Preferred Stock that 
materially and adversely affect the rights of the holders of our Series A Preferred Stock or create additional classes or series of 
our capital stock expressly designated as ranking senior to our Series A Preferred Stock as to distribution rights and rights upon 
our liquidation, dissolution, or winding up. Other than as described above and as set forth in more detail in the articles 
supplementary designating the terms of our Series A Preferred Stock, holders of our Series A Preferred Stock will not have any 
voting rights. 

Holders of our Series A Preferred Stock may not be permitted to exercise conversion rights upon a change of control. If 
exercisable, the change of control conversion feature of our Series A Preferred Stock may not adequately compensate 
preferred stockholders, and the change of control conversion and redemption features of our Series A Preferred Stock may 
make it more difficult for a party to take over our company or discourage a party from taking over our company 

39

 
Upon the occurrence of a change of control (as defined in the articles supplementary designating the terms of our 

Series A Preferred Stock), holders of our Series A Preferred Stock will have the right to convert some or all of their Series A 
Preferred Stock into shares of our common stock (or equivalent value of alternative consideration). Notwithstanding that we 
generally may not redeem our Series A Preferred Stock prior to June 18, 2024, we have a special optional redemption right to 
redeem our Series A Preferred Stock in the event of a change of control, and holders of our Series A Preferred Stock will not 
have the right to convert any shares of our Series A Preferred Stock that we have elected to redeem prior to the change of 
control conversion date. Upon such a conversion, the holders will be limited to a maximum number of shares of our common 
stock equal to the 2.97796 (i.e. the "Share Cap"), subject to certain adjustments, multiplied by the number of our Series A 
Preferred Stock converted. If the Common Stock Price (as defined in the articles supplementary designating the terms of our 
Series A Preferred Stock) is less than $8.395 (which is approximately 50% of the per-share closing sale price of our common 
stock on June 10, 2019), subject to adjustment, each holder will receive a maximum of 2.97796 shares of our common stock per 
share of our Series A Preferred Stock, which may result in a holder receiving value that is less than the liquidation preference of 
our Series A Preferred Stock. In addition, those features of our Series A Preferred Stock may have the effect of inhibiting a 
third party from making an acquisition proposal for our company or of delaying, deferring or preventing a change of control of 
our company under circumstances that otherwise could provide the holders of our common stock and Series A Preferred Stock 
with the opportunity to realize a premium over the then-current market price or that stockholders may otherwise believe is in 
their best interests.

Item 1B. 

Unresolved Staff Comments.  

None.

Item 2. 

Properties.  

The information set forth under the captions "Our Properties" and "Development Pipeline" in Item 1 of this Annual 

Report on Form 10-K is incorporated by reference herein.

Item 3.  

Legal Proceedings.  

The nature of our business exposes our properties, us and the Operating Partnership to the risk of claims and litigation 

in the normal course of business. Other than routine litigation arising out of the ordinary course of business, we are not 
presently subject to any material litigation nor, to our knowledge, is any material litigation threatened against us.

Item 4.  

Mine Safety Disclosures.  

Not Applicable.

40

 
 
 
 
 
PART II  

Item 5. 

Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of 
Equity Securities.

Market Information

Our common stock trades on the New York Stock Exchange under the symbol "AHH" and our Series A Preferred 

Stock trades on the New York Stock Exchange under the symbol "AHHPrA." 

Stock Performance Graph

The following graph sets forth the cumulative total stockholder return (assuming reinvestment of dividends) to our 
stockholders during the period December 31, 2017 through December 31, 2022, as well as the corresponding returns on an 
overall stock market index (Russell 2000) and a peer group index (MSCI US REIT Index). The stock performance graph 
assumes that $100 was invested on December 31, 2017. Historical total stockholder return is not necessarily indicative of future 
results. The information in this paragraph and the following graph shall not be deemed to be "soliciting material" or to be 
"filed" with the SEC or subject to Regulation 14A or 14C, other than as provided in Item 201 of Regulation S-K, or to the 
liabilities of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), except to the extent we 
specifically request that such information be treated as soliciting material or specifically incorporate it by reference into a filing 
under the Securities Act of 1933, as amended, or the Exchange Act. 

41

Period EndingIndex ValueTotal Return PerformanceArmada Hoffler Properties, Inc.MSCI US REITRussell 200012/31/201712/31/201812/31/201912/31/202012/31/202112/31/202280100120140160180 
 
 
 
 
Index

12/31/2017

12/31/2018

12/31/2019

12/31/2020

12/31/2021

12/31/2022

Armada Hoffler Properties, Inc.

MSCI US REIT

Russell 2000

100.00

100.00

100.00

95.78

95.43

88.99

131.32

120.09

111.70

84.16

110.99

134.00

119.61

158.79

153.85

95.89

119.87

122.41

Period Ending

Distribution Information

Since our initial quarter as a publicly-traded REIT, we have made regular quarterly distributions to our stockholders, 

other than in the second and third quarters of 2020 in order to preserve liquidity due to the uncertainty caused by the COVID-19 
pandemic. Declared cash dividends were $0.72 per share for the year ended December 31, 2022. We intend to continue to 
declare quarterly distributions. However, we cannot provide any assurance as to the amount or timing of future distributions. 

Any future distributions will be at the sole discretion of our board of directors, and their form, timing, and amount, if 

any, will depend upon a number of factors, including our actual and projected financial condition, liquidity, operating cash 
flows, results of operations, the revenue we actually receive from our properties, our operating expenses, our debt service 
requirements, our capital expenditures, prohibitions and other limitations under our financing arrangements, as described above, 
our REIT taxable income, the annual REIT distribution requirements, applicable law, and such other factors as our board of 
directors deems relevant. To the extent that our cash available for distribution is less than 90% of our REIT taxable income, we 
may consider various means to cover any such shortfall, including borrowing under our credit facility or other loans, selling 
certain of our assets, or using a portion of the net proceeds we receive from offerings of equity, equity-related, or debt 
securities, or declaring taxable share dividends.

To the extent that we make distributions in excess of our earnings and profits, as computed for federal income tax 

purposes, these distributions will represent a return of capital, rather than a dividend, for federal income tax purposes. 
Distributions that are treated as a return of capital for federal income tax purposes will reduce the stockholder’s basis in its 
shares (but not below zero) and therefore can result in the stockholder having a higher gain upon a subsequent sale of such 
shares. Return of capital distributions in excess of a stockholder’s basis generally will be treated as gain from the sale of such 
shares for federal income tax purposes.

Stockholder Information

As of February 17, 2023, there were approximately 99 holders of record of our common stock. However, because 
many shares of our common stock are held by brokers and other institutions on behalf of stockholders, we believe there are 
substantially more beneficial holders of our common stock than record holders. As of February 17, 2023, there were 98 holders 
(other than our company) of our OP units. Our OP units are redeemable for cash or, at our election, for shares of our common 
stock.  

Unregistered Sales of Equity Securities

None.

Issuer Purchases of Equity Securities

None.

Item 6. 

[Reserved].  

Not applicable.

Item 7. 

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Business Description

We are a full-service real estate company with extensive experience developing, building, owning, and managing high-

quality, institutional-grade office, retail, and multifamily properties in attractive markets throughout the Mid-Atlantic and 
Southeastern United States. As of December 31, 2022, our stabilized operating property portfolio was comprised of 38 retail 

42

 
 
 
 
 
 
 
 
 
properties, 9 office properties, and 10 multifamily properties. In addition to our operating property portfolio, we had one mixed-
use property and one multifamily property in various stages of predevelopment, development, redevelopment, or stabilization as 
of December 31, 2022. We also provide general contracting services to third parties and invest in development projects through 
mezzanine lending arrangements and equity investments. 

Substantially all of our assets are held by, and all of our operations are conducted through, our Operating Partnership. 
We are the sole general partner of our Operating Partnership and, as of December 31, 2022, we owned, through a combination 
of direct and indirect interests, 76.7% of the outstanding OP units in our Operating Partnership.

We elected to be taxed as a REIT for U.S. federal income tax purposes commencing with the taxable year ended 

December 31, 2013.

Our principal executive office is located at 222 Central Park Avenue, Suite 2100, Virginia Beach, Virginia 23462 in 

the Armada Hoffler Tower at the Virginia Beach Town Center. 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 at ArmadaHoffler.com. The information on, or accessible 
through, our website is not incorporated into and does not constitute a part of this report.

Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operations are based upon our consolidated 

financial statements that have been prepared in accordance with GAAP. The Company's accounting policies are more fully 
described in Note 2 of our consolidated financial statements in Item 8 of this Annual Report on Form 10-K. As disclosed in 
Note 2, the preparation of these financial statements requires us to exercise our best judgment in making estimates that affect 
the reported amounts of assets, liabilities, revenues, and expenses. We base our estimates on historical experience and other 
assumptions that we believe to be reasonable under the circumstances. We evaluate our estimates on an ongoing basis, based 
upon current available information. Actual results could differ from these estimates.

We believe the following accounting policies and estimates are the most critical to understanding our reported 

financial results as their effect on our financial condition and results of operations is material.

Rental Revenues

We lease our properties under operating leases and recognize base rents on a straight-line basis over the lease term. We 

also recognize revenue from tenant recoveries, through which tenants reimburse us for expenses paid by us such as utilities, 
janitorial, repairs and maintenance, security and alarm, parking lot and grounds, general and administrative, management fees, 
insurance, and real estate taxes on an accrual basis. Our rental revenues are reduced by the amount of any leasing incentives on 
a straight-line basis over the term of the applicable lease. We include a renewal period in the lease term only if it appears at 
lease inception that the renewal is reasonably certain. We begin recognizing rental revenue when the tenant has the right to take 
possession of or controls the physical use of the property under lease. 

Rental revenue is recognized subject to management’s evaluation of tenant credit risk. The extended collection period 
for accrued straight-line rental revenue along with our evaluation of tenant credit risk may result in the nonrecognition of all or 
a portion of straight-line rental revenue until the collection of substantially all such revenue for a tenant is probable. 

General Contracting and Real Estate Services Revenues

We recognize general contracting revenues as a customer obtains control of promised goods or services in an amount 
that reflects the consideration we expect to receive in exchange for those goods or services. For each construction contract, we 
identify the performance obligations, which typically include the delivery of a single building constructed according to the 
specifications of the contract. We estimate the total transaction price, which generally includes a fixed contract price and may 
also include variable components such as early completion bonuses, liquidated damages, or cost savings to be shared with the 
customer. Variable components of the contract price are included in the transaction price to the extent that it is probable that a 
significant reversal of revenue will not occur. We recognize the estimated transaction price as revenue as we satisfy our 
performance obligations; we estimate our progress in satisfying performance obligations for each contract using the input 
method, based on the proportion of incurred costs relative to total estimated construction costs at completion. Construction 
contract costs include all direct material, direct labor, subcontract costs, and overhead costs directly related to contract 
performance. Changes in job performance, job conditions, and estimated profitability, including those arising from contract 
penalty provisions and final contract settlements, are all significant judgments that may result in revisions to costs and income 

43

 
 
 
 
 
 
and are recognized in the period in which they are determined. Additionally, the estimated costs at completion are affected by 
management’s forecasts of anticipated costs to be incurred and contingency reserves for exposures related to unknown costs, 
such as design deficiencies and subcontractor defaults. The estimated variable consideration is also affected by claims and 
unapproved change orders, which may result from changes in the scope of the contract. Provisions for estimated losses on 
uncompleted contracts are recognized immediately in the period in which such losses are determined. 

We recognize real estate services revenues from property development and management as we satisfy our performance 

obligations under these service arrangements. 

We assess whether multiple contracts with a single counterparty may be combined into a single contract for the 
revenue recognition purposes based on factors such as the timing of the negotiation and execution of the contracts and whether 
the economic substance of the contracts was contemplated separately or in tandem.

Operating Property Acquisitions

Acquisitions of operating properties have been and will generally be accounted for as acquisitions of a group of assets, 

with costs incurred to effect an acquisition, including title, legal, accounting, brokerage commissions, and other related costs 
being capitalized as part of the cost of the assets acquired. In connection with operating property acquisitions, we identify and 
recognize all assets acquired and liabilities assumed at their relative fair values as of the acquisition date. The purchase price 
allocations to tangible assets, such as land, site improvements, and buildings and improvements, are presented within income 
producing property in the consolidated balance sheets and depreciated over their estimated useful lives. Acquired lease 
intangible assets are presented as a separate component of assets on the consolidated balance sheets. Acquired lease intangible 
liabilities are presented within other liabilities in the consolidated balance sheets. We amortize in-place lease assets as 
depreciation and amortization expense on a straight-line basis over the remaining term of the related leases. We amortize above-
market lease assets as reductions to rental revenues on a straight-line basis over the remaining term of the related leases. We 
amortize below-market lease liabilities as increases to rental revenues on a straight-line basis over the remaining term of the 
related leases. We amortize above and below-market ground lease assets as amortization of right-of-use assets – finance leases 
on a straight-line basis over the remaining term of the related leases. We capitalize the costs related to operating property 
acquisitions that do not meet the definition of a business.

We value land based on a market approach, looking to recent sales of similar properties, adjusting for differences due 
to location, the state of entitlement, and the shape and size of the parcel. Improvements to land are valued using a replacement 
cost approach. The approach applies industry standard replacement costs adjusted for geographic specific considerations and 
reduced by estimated depreciation. The value of buildings acquired is estimated using the replacement cost approach, assuming 
the buildings were vacant at acquisition. The replacement cost approach considers the composition of the structures acquired, 
adjusted for an estimate of depreciation. The estimate of depreciation is made considering industry standard information and the 
expected useful lives of the assets. The value of acquired lease intangible assets and liabilities considers the estimated cost of 
leasing the properties as if the acquired buildings were vacant, as well as the value of the current leases relative to market-rate 
leases. The in-place lease value is determined using an estimated total lease-up time and lost rental revenues during such time. 
The value of current leases relative to market-rate leases is based on market rents obtained for comparable leases. Given the 
significance of unobservable inputs used in the valuation of acquired real estate assets, we classify them as Level 3 inputs in the 
fair value hierarchy.

We value debt assumed in connection with operating property acquisitions based on a discounted cash flow analysis of 
the expected cash flows of the debt. Such analysis considers the contractual terms of the debt, including the period to maturity, 
credit characteristics, and other terms of the arrangements, which are Level 3 inputs in the fair value hierarchy (as described in 
Note 12 to our consolidated financial statements in Item 8 of this Annual Report on Form 10-K).

Real Estate Impairment

We evaluate our real estate assets for impairment whenever events or changes in circumstances indicate that their 

carrying amounts may not be recoverable. If such an evaluation is necessary, we compare the carrying amount of any such real 
estate asset with the undiscounted expected future cash flows that are directly associated with, and that are expected to arise as a 
direct result of, its use and eventual disposition. Our estimate of the expected future cash flows attributable to a real estate asset 
is based upon, among other things, our estimates regarding future market conditions, rental rates, occupancy levels, tenant 
improvements, leasing commissions, tenant concessions, and assumptions regarding the residual value of our properties. If the 
carrying amount of a real estate asset exceeds its associated undiscounted expected future cash flows, we recognize an 
impairment loss to reduce the carrying amount of the real estate asset to its fair value based on marketplace participant 
assumptions.

44

 
 
 
 
  
 
Interest Income

Interest income on notes receivable is accrued based on the contractual terms of the loans and when, in the opinion of 
management, it is deemed collectible. Many loans provide for accrual of interest that will not be paid until maturity of the loan. 
Interest is recognized on these loans at the accrual rate subject to management's determination that accrued interest is ultimately 
collectible, based on the underlying collateral and the status of development activities, as applicable. If management cannot 
make this determination, recognition of interest income may be fully or partially deferred until it is ultimately paid.

Expected Credit Losses

We evaluate the collectability of both the interest on and principal of each of our notes receivable based primarily upon 

the value of the underlying development project. We consider factors such as the progress of development activities, including 
leasing activities, projected development costs, current and projected loan balances. We also consider historical industry data, 
such as loan defaults and losses experienced on loans secured by other development projects, and current economic conditions 
that may affect the collectability of the remaining cash flows. We measure expected credit losses to be incurred over the 
remaining contractual term based on the risk rating of each loan. See Note 2 to our consolidated financial statements in Item 8 
of this Annual Report on Form 10-K for details on risk rating determination. If a loan is rated as substandard, we then estimate 
expected credit losses as the difference between the amortized cost basis of the outstanding loan and the estimated projected 
sales proceeds of the underlying collateral.     

Recent Accounting Pronouncements

For a summary of recent accounting pronouncements and the anticipated effects on our consolidated financial 

statements see Note 2 to our consolidated financial statements included in Item 8 of this Form 10-K.

Segment Results of Operations

As of December 31, 2022, we operated our business in four segments: (i) office real estate, (ii) retail real estate, 
(iii) multifamily residential real estate, and (iv) general contracting and real estate services that are conducted through our 
TRSs. NOI (segment revenues minus segment expenses) is the measure used by management to assess segment performance 
and allocate our resources among our segments. NOI is not a measure of operating income or cash flows from operating 
activities as measured by GAAP and is not indicative of cash available to fund cash needs. As a result, NOI should not be 
considered an alternative to cash flows as a measure of liquidity. Not all companies calculate NOI in the same manner. We 
consider NOI to be an appropriate supplemental measure to net income because it assists both investors and management in 
understanding the core operations of our real estate and construction businesses. See Note 3 to our consolidated financial 
statements in Item 8 of this Annual Report on Form 10-K for a reconciliation of NOI to net income, the most directly 
comparable GAAP measure.

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

periods compared. 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 substantially 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. A 
property may also be fully or partially taken out of service as a result of a partial disposition, depending on the significance of 
the portion of the property disposed. Finally, any property classified as held for sale is taken out of service for the purpose of 
computing same store operating results.

This section of this Form 10-K generally discusses 2022 and 2021 items and year-to-year comparisons between 2022 
and 2021. Discussions of 2020 items and year-to-year comparisons between 2021 and 2020 that are not included in this Form 
10-K can be found in "Management’s Discussion and Analysis of Financial Condition and Results of Operations" in Part II, 
Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021.

45

 
 
 
Office Segment Data

Office rental revenues, property expenses, and NOI for the years ended December 31, 2022, 2021, and 2020 were as 

follows ($ in thousands): 

Rental revenues

Property expenses

NOI
Square feet(1)
Occupancy(1)
________________________________________

(1) Stabilized properties as of the end of the periods presented.

Years Ended December 31, 

2022

2021

2020

$ 

74,036 

$ 

47,363 

$ 

43,494 

26,335 

18,524 

15,910 

$ 

47,701 

$ 

28,839 

$ 

27,584 

  2,111,923 

  1,301,319 

  1,305,933 

 96.7 %

 96.8 %

 97.0 %

Rental revenues for the year ended December 31, 2022 increased $26.7 million, or 56.3%, compared to the year ended 
December 31, 2021. NOI for the year ended December 31, 2022 increased $18.9 million, or 65.4%, compared to the year ended 
December 31, 2021. The increases in rental revenues and NOI resulted primarily due to the acquisition of the Constellation 
Office in January 2022. 

Office Same Store Results

Office same store rental revenues, property expenses, and NOI for the comparative years ended December 31, 2022 

and 2021 and December 31, 2021, and 2020 were as follows (in thousands):

Rental revenues

Property expenses

Same Store NOI

Non-Same Store NOI

Segment NOI

Years Ended

December 31, 

Years Ended

December 31, 

2022 (1)

2021(1)

Change

2021 (2)

2020 (2)

Change

$  41,705  $  40,965  $ 

740  $  40,965  $  40,420  $ 

15,326 

14,513 

813 

14,513 

14,060 

$  26,379  $  26,452  $ 

(73)  $  26,452  $  26,360  $ 

21,322 

2,387 

18,935 

2,387 

1,224 

$  47,701  $  28,839  $  18,862  $  28,839  $  27,584  $ 

545 

453 

92 

1,163 

1,255 

________________________________________
(1) Same store excludes Wills Wharf and the Constellation Office.
(2) Same store excludes Wills Wharf.

Same store rental revenues for the year ended December 31, 2022 increased compared to the year ended December 31, 

2021 due to increased occupancy at Thames Street Wharf and Armada Hoffler Tower. Same store NOI for the year ended 
December 31, 2022 was materially consistent with the year ended December 31, 2021.

Retail Segment Data

Retail rental revenues, property expenses, and NOI for the years ended December 31, 2022, 2021 and 2020 were as 

follows ($ in thousands): 

Rental revenues

Property expenses
NOI
Square feet(1)
Occupancy(1)
________________________________________

46

Years Ended December 31, 

2022

2021

2020

$ 

86,344 

$ 

78,572 

$ 

73,032 

22,642 
63,702 
$ 
  3,916,001 

20,928 
57,644 
$ 
  4,067,355 

18,813 
54,219 
$ 
  3,651,213 

 97.9 %

 96.0 %

 94.7 %

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
(1) Stabilized properties as of the end of the periods presented.

Rental revenues for the year ended December 31, 2022 increased $7.8 million, or 9.9%, compared to the year ended 

December 31, 2021. NOI for the year ended December 31, 2022 increased $6.1 million, or 10.5%, compared to the year ended 
December 31, 2021. The increases in rental revenues and NOI resulted primarily due to the acquisitions of Delray Beach Plaza, 
Greenbrier Square, Overlook Village in 2021 and Pembroke Square in 2022 as well as increased occupancy in the same store 
portfolio. The increases were partially offset by the 2022 dispositions of the Home Depot and Costco outparcels at North 
Pointe, as well as the 2021 dispositions of Socastee Commons and Courthouse 7-Eleven for which revenue was earned prior to 
disposition in the year ended December 31, 2021.

Retail Same Store Results

Retail same store rental revenues, property expenses, and NOI for the comparative years ended December 31, 2022 

and 2021 and December 31, 2021 and 2020 were as follows (in thousands): 

Years Ended

December 31, 

Years Ended

December 31, 

2022 (1)

2021 (1)

Change

2021 (2)

2020 (2)

Change

Rental revenues

Property expenses

Same Store NOI

Non-Same Store NOI
Segment NOI

$  73,436  $  69,256  $ 

4,180  $  64,006  $  63,147  $ 

18,400 

17,636 

764 

15,898 

15,469 

$  55,036  $  51,620  $ 

3,416  $  48,108  $  47,678  $ 

8,666 

6,024 

$  63,702  $  57,644  $ 

2,642 
6,058  $  57,644  $  54,219  $ 

9,536 

6,541 

859 

429 

430 

2,995 
3,425 

________________________________________

(1) Same store excludes Greenbrier Square, Overlook Village, Delray Beach Plaza, Premier Retail, and Pembroke Square.

(2) Same store excludes Apex Entertainment, Delray Beach Plaza, Greenbrier Square, Nexton Square, Overlook Village, and Premier Retail. 

In addition, same store excludes the seven-property retail portfolio that was disposed in May 2020 (Alexander Pointe, Bermuda 
Crossroads, Gainsborough Square, Harper Hill Commons, Indian Lakes Crossing, Renaissance Square, and Stone House Square) as well 
as Oakland Marketplace, Socastee Commons, and Courthouse 7-Eleven, each of which were disposed in 2021.

Same store rental revenues and NOI for the year ended December 31, 2022 increased compared to the year ended 

December 31, 2021 primarily as a result of increased occupancy in the same store portfolio.

Multifamily Segment Data

Multifamily rental revenues, property expenses, and NOI for the years ended December 31, 2022, 2021, and 2020 

were as follows ($ in thousands): 

Rental revenues

Property expenses

NOI

Apartment units/beds

Occupancy

Years Ended December 31, 

$ 

$ 

2022

58,914 

23,822 

35,092 

2,254 

$ 

$ 

2021

66,205 

28,894 

37,311 

2,959 

$ 

$ 

2020

49,962 

22,373 

27,589 

3,527 

 96.1 %

 97.4 %

 92.5 %

Rental revenues for the year ended December 31, 2022 decreased $7.3 million, or 11.0%, compared to the year ended 

December 31, 2021. NOI decreased $2.2 million, or 5.9%, compared to the year ended December 31, 2021. The decreases in 
rental revenues and NOI resulted primarily from the dispositions of The Residences at Annapolis Junction, John Hopkins 
Village, Hoffler Place, and Summit Place. The decreases were partially offset by the acquisition of 1305 Dock Street and 
commencement of operations at Gainesville Apartments and Chronicle Mill.

Multifamily Same Store Results

Multifamily same store rental revenues, property expenses, and NOI for the comparative years ended December 31, 

2022 and 2021 and December 31, 2021 and 2020 were as follows (in thousands):

47

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Rental revenues

Property expenses
Same Store NOI

Non-Same Store NOI

Segment NOI

Years Ended

December 31, 

Years Ended

December 31, 

2022 (1)

2021 (1)

Change

2021 (2)

2020 (2)

Change

$  44,098  $  41,008  $ 

3,090  $  28,727  $  26,834  $ 

16,858 

16,226 

632 

11,188 

11,021 

$  27,240  $  24,782  $ 

2,458  $  17,539  $  15,813  $ 

7,852 

12,529 

(4,677)   

19,772 

11,776 

$  35,092  $  37,311  $ 

(2,219)  $  37,311  $  27,589  $ 

1,893 

167 
1,726 

7,996 

9,722 

________________________________________

(1) Same store excludes 1305 Dock Street, Chronicle Mill, and Gainesville Apartments as well as properties that were disposed in 2022.

(2) Same store excludes The Residences at Annapolis Junction, Edison Apartments, Hoffler Place, Summit Place, Johns Hopkins Village, 

and The Cosmopolitan.

Same store rental revenues and NOI for the year ended December 31, 2022 increased compared to the year ended 

December 31, 2021 primarily as a result of increased rental rates across multiple properties.

General Contracting and Real Estate Services Segment Data

General contracting and real estate services revenues, expenses, and gross profit for the years ended December 31, 

2022, 2021, and 2020 were as follows ($ in thousands):

Segment revenues

Gross profit

Operating margin

Construction backlog

Years Ended December 31, 

2022

$ 

$ 

234,859 

7,701 

$ 

$ 

2021

91,936 

3,836 

 3.3 %

 4.2 %

$ 

665,565 

$ 

215,519 

2020

217,146 

7,674 

 3.5 %

71,258 

$ 

$ 

$ 

Segment revenues for the year ended December 31, 2022 increased $142.9 million compared to the year ended 

December 31, 2021. Gross profit for the year ended December 31, 2022 increased $3.9 million compared to the year ended 
December 31, 2021. The increase in segment revenues and gross profit resulted primarily from the execution and 
commencement of new projects in 2022 including the Harbor Point development with Beatty Development Group, as well as 
four new projects with Dominion Realty Partners, a southeast multifamily developer.

The changes in construction backlog for each of the years ended December 31, 2022, 2021, and 2020 were as follows 

(in thousands):  

Beginning backlog

New contracts/change orders

Work performed
Ending backlog

Years Ended December 31, 

2022

2021

2020

$ 

215,519  $ 

71,258  $ 

242,622 

685,753 

236,077 

(235,707)   
665,565  $ 

(91,816)   
215,519  $ 

$ 

45,882 

(217,246) 
71,258 

During the year ended December 31, 2022, we executed new contracts with Beatty Development Group related to the 
Harbor Point development in Baltimore totaling $423.8 million in addition to $246.9 million of new contracts with Dominion 
Realty Partners. Ending backlog as of December 31, 2022 included $353.7 million in contracts with Beatty Development Group 
and $292.9 million in contracts with Dominion Realty Partners.

During the year ended December 31, 2021, we executed $181.6 million of new contracts with Dominion Realty 

Partners and $16.1 million in contracts with Beatty Development Group. Ending backlog as of December 31, 2021 included 
$15.2 million in contracts with Beatty Development Group and $173.3 million in contracts with Dominion Realty Partners.

48

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consolidated Results of Operations

The following table summarizes our results of operations for the years ended December 31, 2022, 2021, and 2020 (in 

thousands): 

Revenues

Rental revenues

General contracting and real estate services revenues

Total revenues

Expenses

Rental expenses

Real estate taxes

General contracting and real estate services expenses

Depreciation and amortization

Amortization of right-of-use assets - finance leases

General and administrative expenses

Acquisition, development and other pursuit costs

Impairment charges

Total expenses

Gain on real estate dispositions

Operating income

Interest income

Interest expense

Loss on extinguishment of debt

Change in fair value of derivatives and other

Unrealized credit loss release (provision)

Other income (expense), net

Income before taxes

Income tax benefit

Net income

Net (income) loss attributable to noncontrolling interests in 
investment entities

Preferred stock dividends

Net income attributable to common stockholders and OP 
Unitholders

Years Ended December 31, 

2022

2021

2020

2022

Change

2021

Change

$  219,294  $  192,140  $  166,488  $ 

27,154  $ 

25,652 

234,859 

454,153 

91,936 

284,076 

217,146 

383,634 

142,923 

(125,210) 

170,077 

(99,558) 

50,742 

22,057 

227,158 

72,974 

1,110 

15,691 

37 

416 

46,494 

21,852 

88,100 

68,853 

1,022 

14,610 

112 

21,378 

38,960 

18,136 

4,248 

205 

7,534 

3,716 

209,472 

139,058 

(121,372) 

59,972 

586 

12,905 

584 

666 

4,121 

88 

1,081 

8,881 

436 

1,705 

(75) 

(472) 

(20,962) 

20,712 

390,185 

262,421 

341,281 

127,764 

(78,860) 

53,466 

117,434 

16,978 

19,040 

40,695 

18,457 

6,388 

48,741 

19,841 

(39,680) 

(33,905) 

(31,035) 

(3,374) 

8,698 

(626) 

378 

(3,810) 

2,182 

792 

302 

— 

(1,130) 

(256) 

515 

34,426 

76,739 

(1,479) 

(5,775) 

436 

6,516 

(1,418) 

76 

12,652 

(8,046) 

(1,384) 

(2,870) 

(3,810) 

3,312 

1,048 

(213) 

99,808 

24,713 

36,676 

75,095 

(11,963) 

145 

742 

283 

(597) 

459 

99,953 

25,455 

36,959 

74,498 

(11,504) 

(5,948) 

5 

230 

(5,953) 

(11,548) 

(11,548) 

(7,349) 

— 

(225) 

(4,199) 

$ 

82,457  $ 

13,912  $ 

29,840  $ 

68,545  $ 

(15,928) 

Rental revenues. Rental revenues by segment for the years ended December 31, 2022, 2021, and 2020 were as follows 

(in thousands): 

Office
Retail
Multifamily

Years Ended December 31, 

2022

2021

2020

2022

Change

2021

Change

$  74,036  $  47,363  $  43,494  $  26,673  $ 

3,869 
5,540 
16,243 
$  219,294  $  192,140  $  166,488  $  27,154  $  25,652 

7,772 
(7,291)   

78,572 
66,205 

73,032 
49,962 

86,344 
58,914 

49

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Rental revenues increased $27.2 million during the year ended December 31, 2022 compared to the year ended 

December 31, 2021. The increase in office rental revenues resulted primarily from the acquisition of the Constellation Energy 
Building and increased occupancy at Wills Wharf, Thames Street Wharf, and Armada Hoffler Tower. The increase in retail 
rental revenues resulted primarily from the acquisitions of Greenbrier Square, Overlook Village, Delray Beach Plaza and 
Pembroke Square, as well as increased occupancy across the retail portfolio. The decrease in multifamily rental revenues 
resulted primarily from the dispositions of John Hopkins Village, The Residences at Annapolis Junction, Summit Place and 
Hoffler Place. The decrease was partially offset by the acquisition of 1305 Dock Street and the commencement of operations at 
Gainesville Apartments and Chronicle Mill, as well as increased rental rates across the portfolio.

General contracting and real estate services revenues. General contracting and real estate services revenues increased 

$142.9 million during the year ended December 31, 2022 compared to the year ended December 31, 2021. The increase 
resulted primarily from the commencement of new projects in 2022, including Harbor Point Parcels 3 and 4 with Beatty 
Development Group as well as four new projects with Dominion Realty Partners.

Rental expenses. Rental expenses by segment for each of the three years ended December 31, 2022 were as follows (in 

thousands):

Office

Retail

Multifamily

Years Ended December 31, 

2022

2021

2020

2022

Change

2021

Change

$  18,710  $  12,412  $  10,799  $ 

6,298  $ 

13,769 

18,263 

12,512 

21,570 

11,029 

17,132 

1,257 

(3,307)   

$  50,742  $  46,494  $  38,960  $ 

4,248  $ 

1,613 

1,483 

4,438 

7,534 

Rental expenses increased $4.2 million during the year ended December 31, 2022 compared to the year ended 

December 31, 2021. Office rental expenses increased primarily as a result of the acquisition of the Constellation Office and 
increased occupancy at Wills Wharf. Retail rental expenses increased primarily as a result of the acquisitions of Greenbrier 
Square, Overlook Village, and Delray Beach Plaza. Multifamily rental expenses decreased primarily as a result of the 
dispositions of John Hopkins Village, Summit Place, Hoffler Place, and The Residences at Annapolis Junction, partially offset 
by the acquisition of 1305 Dock Street and the commencement of operations at Gainesville Apartments and Chronicle Mill.

Real estate taxes. Real estate taxes by segment for the years ended December 31, 2022, 2021, and 2020 were as 

follows (in thousands):

Office

Retail

Multifamily

Years Ended December 31, 

2022

2021

2020

2022

Change

2021

Change

$ 

7,625  $ 

6,112  $ 

5,111  $ 

1,513  $ 

1,001 

8,873 

5,559 

8,416 

7,324 

7,784 

5,241 

457 

(1,765)   

$  22,057  $  21,852  $  18,136  $ 

205  $ 

632 

2,083 

3,716 

Real estate taxes increased $0.2 million during the year ended December 31, 2022 compared to the year ended 
December 31, 2021. Office real estate taxes increased primarily as a result of the acquisition of the Constellation Office. Retail 
real estate taxes increased primarily as a result of the acquisitions of Greenbrier Square and Delray Beach Plaza, in addition to 
an increased assessment at Wendover Village. Multifamily real estate taxes decreased primarily as a result of the dispositions of 
John Hopkins Village, The Residences at Annapolis Junction, Summit Place and Hoffler Place, partially offset by the 
acquisition of 1305 Dock Street and the commencement of operations at Gainesville Apartments.

General contracting and real estate services expenses for the year ended December 31, 2022 increased $139.1 million 

compared to the year ended December 31, 2021. The increase resulted primarily from the commencement of new projects in 
2022 including Harbor Point Parcels 3 and 4 with Beatty Development Group as well as four new projects with Dominion 
Realty Partners.

Depreciation and amortization for the year ended December 31, 2022 increased $4.1 million compared to the year 

ended December 31, 2021. The increase was attributable to property acquisitions and development deliveries. The increase was 
partially offset by dispositions in 2022.

50

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
Amortization of right-of-use assets - finance leases for the years ended December 31, 2022 and 2021 were materially 

consistent.

General and administrative expenses for the year ended December 31, 2022 increased $1.1 million compared to the 

year ended December 31, 2021. The increase resulted primarily from higher compensation costs due to increased investment in  
human capital and legal fees associated with 2022 transactions.

Acquisition, development and other pursuit costs for the years ended December 31, 2022 and 2021 was materially 

consistent.

Impairment charges during the year ended December 31, 2022 totaled $0.4 million and primarily related to impairment 

charges recognized on acquired lease intangibles of certain properties.

Gain on real estate dispositions for the year ended December 31, 2022 totaled $53.5 million and related primarily to 

the disposition of The Residences at Annapolis Junction, the AutoZone and Valvoline outparcels at Sandbridge Commons, and 
the Home Depot and Costco parcels at North Pointe. During the year ended December 31, 2021, we recognized gains on real 
estate dispositions of $19.0 million, related to the dispositions of Hanbury 7-Eleven, Oakland Marketplace, Courthouse 7-
Eleven, and Johns Hopkins Village.

Interest income for the year ended December 31, 2022 decreased $1.5 million compared to the year ended 
December 31, 2021, as a result of lower loan balances from principal repayments on the Interlock Commercial loan, partially 
offset by the prepayment premium received from the repayment of the Nexton Multifamily loan and funding of the City Park 2 
and Solis Gainesville II loans. As of December 31, 2022 and 2021, our outstanding mezzanine loan balances were $112.3 
million and $118.9 million, respectively.

Interest expense for the year ended December 31, 2022 increased $5.8 million compared to the year ended 

December 31, 2021 primarily due to loans obtained and assumed in connection with acquisitions and increased amortization of 
interest rate cap premiums.

Loss on extinguishment of debt decreased $0.4 million compared to the year ended December 31, 2021 primarily due 
to less loss recognized on the loan payoffs and refinances in 2022, compared to the loss recognized in 2021 in conjunction with 
the disposition of John Hopkins Village and the termination of the related interest rate swap.

Change in fair value of derivatives and other for the year ended December 31, 2022 was a gain of $8.7 million, which 
arose from increases in forward LIBOR, SOFR and BSBY. During the year ended December 31, 2021, we recognized gain on 
changes in fair value of interest rate derivatives of $2.2 million due to significant increases in forward LIBOR during 2021. 

Unrealized credit loss provision for the year ended December 31, 2022 relates to the reserves recorded for the City 
Park 2 and Solis Gainesville II investments, offset by a release in the allowance for the Nexton Multifamily preferred equity 
investment.   

Other income (expense), net for the years ended December 31, 2022 and 2021 was materially consistent.

The income tax benefit recognized during the years ended December 31, 2022 and 2021 is attributable to the taxable 

profits and losses of our development and construction businesses that we operate through our TRS.

Liquidity and Capital Resources

Overview  

We believe our primary short-term liquidity requirements consist of general contractor expenses, operating expenses, 

and other expenditures associated with our properties, including tenant improvements, leasing commissions and leasing 
incentives, dividend payments to our stockholders required to maintain our REIT qualification, debt service, capital 
expenditures, new real estate development projects, mezzanine loan funding requirements, and strategic acquisitions. We expect 
to meet our short-term liquidity requirements through net cash provided by operations, reserves established from existing cash, 
borrowings under construction loans to fund new real estate development and construction, borrowings available under our 
credit facility, and net proceeds from the sale of common stock through our at-the-market continuous equity offering program 
(the "ATM Program"), which is discussed below.

51

 
 
 
 
 
 
 
 
 
 
 
Our long-term liquidity needs consist primarily of funds necessary for the repayment of debt at or prior to maturity, 

general contracting expenses, property development and acquisitions, tenant improvements, and capital improvements. We 
expect to meet our long-term liquidity requirements with net cash from operations, long-term secured and unsecured 
indebtedness, and the issuance of equity and debt securities. We also may fund property development and acquisitions and 
capital improvements using our credit facility pending long-term financing.

As of December 31, 2022, we had unrestricted cash and cash equivalents of $48.1 million available for both current 

liquidity needs as well as development activities. As of December 31, 2022, we also had restricted cash in escrow of $3.7 
million, some of which is available for capital expenditures at our operating properties. As of December 31, 2022, we had 
$233.5 million available under our credit facility to meet our short-term liquidity requirements and $81.1 million available 
under construction loans to fund development activities.

ATM Program

On March 10, 2020, we commenced the ATM Program through which we may, from time to time, issue and sell 
shares of our common stock and shares of our Series A Preferred Stock having an aggregate offering price of up to $300.0 
million, to or through our sales agents and, with respect to shares of our common stock, may enter into separate forward sales 
agreements to or through the forward purchaser. 

During the year ended December 31, 2022, we issued and sold 475,074 shares of common stock at a weighted average 

price of $15.21 per share under the ATM Program, receiving net proceeds, after offering costs and commissions, of 
$7.1 million. During the year ended December 31, 2022, we did not issue any shares of Series A Preferred Stock under the 
ATM Program.

As of December 31, 2022, we had $205.0 million in availability under the ATM Program.

Common Stock Issuance

On January 11, 2022, we completed an underwritten public offering of 4,025,000 shares of common stock, which were 
purchased from us at a purchase price of $14.45 per share of common stock, which resulted in net proceeds after offering costs 
of $58.0 million.

Amended Credit Facility

On August 23, 2022, we entered into an amended and restated credit agreement (the "Credit Agreement"), which 

provides for a $550.0 million credit facility comprised of a $250.0 million senior unsecured revolving credit facility (the 
"revolving credit facility") and a $300.0 million senior unsecured term loan facility (the "term loan facility" and, together with 
the revolving credit facility, the "amended credit facility"), with a syndicate of banks. The amended credit facility replaces the 
prior $150.0 million revolving credit facility, which was scheduled to mature on January 24, 2024, and the prior $205.0 million 
term loan facility, which was scheduled to mature on January 24, 2025. The additional borrowings under the term loan facility 
were used to pay off the loans secured by 1405 Point, Brooks Crossing Office, and One City Center. Subject to available 
borrowing capacity, we intend to use future borrowings under the amended credit facility for general corporate purposes, 
including funding acquisitions, mezzanine lending, and development and redevelopment of properties in our portfolio, and for 
working capital.

The  amended  credit  facility  includes  an  accordion  feature  that  allows  the  total  commitments  to  be  increased  to 
$1.0 billion, subject to certain conditions, including obtaining commitments from any one or more lenders. The revolving credit 
facility has a scheduled maturity date of January 22, 2027, with two six-month extension options, subject to certain conditions, 
including payment of a 0.075% extension fee at each extension. The term loan facility has a scheduled maturity date of January 
21, 2028.

The revolving credit facility bears interest at SOFR plus a margin ranging from 1.30% to 1.85%, and the term loan 

facility bears interest at SOFR plus a margin ranging from 1.25% to 1.80%, in each case depending on our total leverage. These 
interest rates approximate the terms of the previous credit facility despite market pressures at the time the Credit Agreement 
was executed. We also are obligated to pay an unused commitment fee of 15 or 25 basis points on the unused portions of the 
commitments under the revolving credit facility, depending on the amount of borrowings under the revolving credit facility. If 
the Company or the Operating Partnership attains investment grade credit ratings from both S&P Global Ratings and Moody’s 
Investors Service, Inc., we may elect to have borrowings become subject to interest rates based on such credit ratings. We may, 
at any time, voluntarily prepay any loan under the amended credit facility in whole or in part without premium or penalty. Our 
unencumbered borrowing pool will support revolving borrowings of up to $250.0 million as of December 31, 2022.

52

 
The Operating Partnership is the borrower under the amended credit facility, and its obligations under the amended 

credit facility are guaranteed by us and certain of our subsidiaries that are not otherwise prohibited from providing such 
guaranty.

The Credit Agreement contains customary representations and warranties and financial and other affirmative and 

negative covenants. Our ability to borrow under the amended credit facility is subject to our ongoing compliance with a number 
of financial covenants, affirmative covenants and other restrictions, including the following:

•

•
•

•

•

•

Total leverage ratio of not more than 60% (or 65% for the two consecutive quarters following any acquisition with a 
purchase price of at least $100.0 million, but only up to two times during the term of the amended credit facility);
Ratio of adjusted EBITDA (as defined in the Credit Agreement) to fixed charges of not less than 1.50 to 1.0;
Tangible net worth of not less than the sum of (i) $825.2 million and (ii) an amount equal to 75% of the net equity 
proceeds received by us after June 30, 2022;
Ratio of secured indebtedness (excluding the amended credit facility if it becomes secured indebtedness) to total asset 
value of not more than 40%;
Ratio of secured recourse debt (excluding the amended credit facility if it becomes secured indebtedness) to total asset 
value of not more than 20%;
Total unsecured leverage ratio of not more than 60% (or 65% for the two consecutive quarters following any 
acquisition with a purchase price of at least $100.0 million, but only up to two times during the term of the credit 
facility);
Unencumbered interest coverage ratio (as defined in the Credit Agreement) of not less than 1.75 to 1.0;

•
• Maintenance of a minimum of at least 15 unencumbered properties (as defined in the Credit Agreement) with an 

unencumbered asset value (as defined in the Credit Agreement) of not less than $500.0 million at any time; and

• Minimum occupancy rate (as defined in the Credit Agreement) for all unencumbered properties of not less than 80% at 

any time.

The Credit Agreement limits our ability to pay cash dividends if a default has occurred and is continuing or would 

result therefrom. However, if certain defaults or events of default exist, we may pay cash dividends to the extent necessary to (i) 
maintain our status as a REIT and (ii) avoid federal or state income excise taxes. The Credit Agreement also restricts the 
amount of capital that we can invest in specific categories of assets, such as unimproved land holdings, development properties, 
notes receivable, mortgages, mezzanine loans and unconsolidated affiliates, and restricts our ability to repurchase stock and 
units of limited partnership interest in the Operating Partnership during the term of the amended credit facility.

We may, at any time, voluntarily prepay any loan under the amended credit facility in whole or in part without 

significant premium or penalty, except for those portions subject to an interest rate swap agreement. 

The Credit Agreement includes customary events of default, in certain cases subject to customary periods to cure. The 
occurrence of an event of default, following the applicable cure period, would permit the lenders to, among other things, declare 
the unpaid principal, accrued and unpaid interest and all other amounts payable under the amended credit facility to be 
immediately due and payable.

We are currently in compliance with all covenants under the Credit Agreement. 

M&T Term Loan Facility

On December 6, 2022, we entered into a term loan agreement (the "M&T term loan agreement") with Manufacturers 

and Traders Trust Company, which provides a $100.0 million senior unsecured term loan facility (the "M&T term loan 
facility"), with the option to increase the total capacity to $200.0 million, subject to our satisfaction of certain conditions. The 
proceeds from the M&T term loan facility were used to repay the loans secured by the Wills Wharf, 249 Central Park Retail, 
Fountain Plaza Retail, and South Retail properties. The M&T term loan facility has a scheduled maturity date of March 8, 2027, 
with a one-year extension option, subject to our satisfaction of certain conditions, including payment of a 0.075% extension fee.

The M&T term loan facility bears interest at a rate elected by us based on term SOFR, Daily Simple SOFR, or the 

Base Rate (as defined below), and in each case plus a margin. The margin under each interest rate election depends on our total 
leverage. The "Base Rate" is equal to the highest of: (a) the rate of interest in effect for such day as publicly announced from 
time to time by M&T Bank as its “prime rate” for such day, (b) the Federal Funds Rate for such day, plus 0.50%, (c) one month 
term SOFR for such day plus 100 basis points and (d) 1.00%. For the year ended December 31, 2022, we have elected for the 
loan to bear interest at term SOFR plus margin. If we attain investment grade credit ratings from both S&P Global Ratings and 

53

 
Moody's Investor Service, Inc., we may elect to have borrowings become subject to interest rates based on such credit ratings. 

The Operating Partnership is the borrower under the M&T term loan facility, and its obligations under the M&T term 
loan facility are guaranteed by us and certain of its subsidiaries that are not otherwise prohibited from providing such guaranty. 

The M&T term loan agreement contains customary representations and warranties and financial and other affirmative 

and negative covenants.  Our ability to borrow under the M&T term loan facility is subject to ongoing compliance with a 
number of financial covenants, affirmative covenants, and other restrictions, including the following: 

•

•
•

•

•

•

Total leverage ratio of not more than 60% (or 65% for the two consecutive quarters following any acquisition with a 
purchase price of at least $100.0 million, but only up to two times during the term of the M&T term loan facility);
Ratio of adjusted EBITDA (as defined in the M&T term loan agreement) to fixed charges of not less than 1.50 to 1.0;
Tangible net worth of not less than the sum of (i) $825.2 million and (ii) an amount equal to 75% of the net equity 
proceeds received by us after June 30, 2022;
Ratio of secured indebtedness (excluding the M&T term loan facility if it becomes secured indebtedness) to total asset 
value of not more than 40%;
Ratio of secured recourse debt (excluding the M&T term loan facility if it becomes secured indebtedness) to total asset 
value of not more than 20%;
Total unsecured leverage ratio of not more than 60% (or 65% for the two consecutive quarters following any 
acquisition with a purchase price of at least $100.0 million, but only up to two times during the term of the M&T term 
loan facility);

• Unencumbered interest coverage ratio (as defined in the M&T term loan agreement) of not less than 1.75 to 1.0;
• Maintenance of a minimum of at least 15 unencumbered properties (as defined in the M&T term loan agreement) with 
an unencumbered asset value (as defined in the M&T term loan agreement) of not less than $500.0 million at any time; 
and

• Minimum occupancy rate (as defined in the M&T term loan agreement) for all unencumbered properties of not less 

than 80% at any time.

The M&T term loan agreement limits our ability to pay cash dividends if a default has occurred and is continuing or 

would result therefrom. However, if certain defaults or events of default exist, we may pay cash dividends to the extent 
necessary to (i) maintain our status as a REIT and (ii) avoid federal or state income excise taxes. The M&T term loan agreement 
also restricts the amount of capital that we can invest in specific categories of assets, such as unimproved land holdings, 
development properties, notes receivable, mortgages, mezzanine loans and unconsolidated affiliates, and restricts our ability to 
repurchase stock and units of limited partnership interest in the Operating Partnership during the term of the M&T term loan 
facility.

We may, at any time, voluntarily prepay the M&T term loan facility in whole or in part without premium or penalty, 

provided certain conditions are met.

The term loan agreement includes customary events of default, in certain cases subject to customary cure periods. The 

occurrence of an event of default, if not cured within the applicable cure period, would permit the lenders to, among other 
things, declare the unpaid principal, accrued and unpaid interest, and all other amounts payable under the M&T term loan 
facility to be immediately due and payable.

We are currently in compliance with all covenants under the M&T term loan agreement.

54

Consolidated Indebtedness

The following table sets forth our consolidated indebtedness as of December 31, 2022 ($ in thousands):

Secured Debt
Chronicle Mill
Red Mill Central
Premier Apartments(b)
Premier Retail(b)
Red Mill South
Market at Mill Creek
Gainesville Apartments
Encore Apartments(c)
4525 Main Street(c)
Southern Post(d)
Thames Street Wharf
Constellation Energy Building
Southgate Square
Nexton Square
Liberty Apartments
Greenbrier Square
Lexington Square
Red Mill North
Greenside Apartments
Smith's Landing
Edison Apartments
The Cosmopolitan
Total secured debt
Unsecured Debt
Senior unsecured revolving credit 
facility
M&T unsecured term loan
Senior unsecured term loan
Senior unsecured term loan
Total unsecured debt
Total principal balances
Other note payable(f)
Unamortized GAAP adjustments
Indebtedness, net

_______________________________________

Amount 
Outstanding
27,630 
$ 
2,013 
16,269 
8,013 
5,191 
12,494 
30,000 
23,980 
30,785 
— 
69,327 
175,000 
26,195 
22,195 
20,926 
19,940 
13,892 
4,079 
31,862 
15,535 
15,563 
41,243 
612,132 

$ 

$ 

61,000 
100,000 
31,658 
268,342 
461,000 
1,073,132 
6,131 
(11,002) 
$  1,068,261 

Interest Rate (a)

Effective Rate 
for Variable-
Rate Debt

 5.39 %

 5.94 %
 5.94 %

 5.94 %
 5.86 %

 4.61 %
 2.35 % (e)
 3.86 %
 6.29 %
 6.31 %
 5.86 %

LIBOR+ 3.00%
4.80%
LIBOR+ 1.55%
LIBOR+ 1.55%
3.57%
LIBOR+ 1.55%
SOFR+ 1.50%
2.93%
2.93%
SOFR+ 2.25%
BSBY+ 1.30%
BSBY+ 1.50%
LIBOR+ 1.90%
SOFR+ 1.95%
SOFR+ 1.50%
3.74%
4.50%
4.73%
3.17%
4.05%
5.30%
3.35%

Maturity Date
May 5, 2024
June 17, 2024
October 31, 2024
October 31, 2024
May 1, 2025
July 12, 2025
December 20, 2025
February 10, 2026
February 10, 2026
August 25, 2026
September 30, 2026
November 1, 2026
December 21, 2026
June 30, 2027
September 27, 2027
October 10, 2027
September 1, 2028
December 31, 2028
December 15, 2029
June 1, 2035
December 1, 2044
July 1, 2051

SOFR+ 1.30%-1.85%
1.25%-1.80%
SOFR+
1.25%-1.80%
SOFR+
1.25%-1.80%
SOFR+

 5.76 %
 4.80 % (e)
 5.66 %

1.80%-4.73% (e)

January 22, 2027
March 8, 2027
January 21, 2028
January 21, 2028

Balance at 
Maturity

$ 

$ 

$ 

$ 

27,630 
1,765 
15,830 
7,797 
4,383 
10,876 
30,000 
22,211 
28,515 
— 
60,839 
175,000 
22,811 
19,487 
19,243 
18,049 
12,044 
3,295 
26,095 
384 
100 
187 
506,541 

61,000 
100,000 
31,658 
268,342 
461,000 
967,541 

(a)  LIBOR, SOFR, and BSBY rates are determined by individual lenders. 
(b) Cross collateralized.
(c) Cross collateralized.
(d) No funding on the construction loan as of December 31, 2022.
(e) Includes debt subject to interest rate swap agreements.
(f) Represents the fair value of additional ground lease payments at 1405 Point over the approximately 40-year remaining lease term.

Certain loans require us to comply with various financial and other covenants, including the maintenance of minimum 

debt coverage ratios. As of December 31, 2022, we were in compliance with all loan covenants. 

55

 
    
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of December 31, 2022, our scheduled principal repayments and maturities during each of the next five years and 

thereafter were as follows ($ in thousands):

Year (1)

2023

2024

2025

2026

2027

Thereafter

Total

Amount Due

Percentage of 
Total 

$ 

9,770 

63,398 

55,995 

317,526 

222,575 

403,868 

 1  %

 6  %

 5  %

 30  %

 20  %

 38  %

$ 

1,073,132 

 100 %

________________________________________
(1) Does not reflect the exercise of any maturity extension options.

Interest Rate Derivatives

As of December 31, 2022, we were party to the following LIBOR, SOFR, and BSBY interest rate cap agreements ($ in 

thousands):  

Effective Date

2/2/2021
3/4/2021
11/1/2020
7/1/2022
7/5/2022
1/11/2022
4/7/2022
7/6/2022
9/1/2022
Total

Maturity Date
2/1/2023
4/1/2023
11/1/2023
1/1/2024
1/1/2024
2/1/2024
2/1/2024
3/1/2024
9/1/2024

Strike Rate

Notional Amount

0.50% (LIBOR)
2.50% (LIBOR)
1.84% (SOFR)

1.00%-3.00% (SOFR) (a)
1.00%-3.00% (SOFR) (a)

4.00% (BSBY)

1.00%-3.00% (BSBY) (a)
1.00%-3.00% (SOFR) (a)
1.00%-3.00% (SOFR) (a)

$ 

$ 

100,000 
14,479 
84,375 
50,000 
35,100 
175,000 
175,000 
200,000 
73,562  (b)
907,516 

________________________________________
(a) We purchased interest rate caps at 1.00% and sold interest rate caps at 3.00%, resulting in interest rate cap corridors of 
1.00% and 3.00%. The intended goal of these corridors is to provide a level of protection from the effect of rising interest rates 
and reduce the all-in cost of the derivative instrument.
(b) The notional amount represents the maximum notional amount that will eventually be in effect. The notional amount is 
scheduled to increase over the term of the corridor in accordance with projected borrowings on the associated loan.

As of December 31, 2022, the Company held the following floating-to-fixed interest rate swaps ($ in thousands):

Notional Amount
$ 

Index

Swap Fixed 
Rate

Related Debt

Senior unsecured term loan
Senior unsecured term loan
Senior unsecured term loan
Senior unsecured term loan
Senior unsecured term loan
Senior unsecured term loan
Thames Street Wharf
M&T unsecured term loan
Senior unsecured term loan
Total

50,000  1-month LIBOR
32,842  1-month LIBOR
10,500  1-month LIBOR
25,000  1-month LIBOR
25,000  1-month LIBOR
25,000  1-month LIBOR
69,328  1-month BSBY
100,000  1-month SOFR
100,000  1-month SOFR
437,670 

$ 

Debt effective 
rate

Effective 
Date
5/1/2018
 4.08 %
 3.55 %
4/1/2019
 4.32 % 10/12/2018
4/1/2020
 1.80 %
4/1/2020
 1.80 %
4/1/2020
 1.85 %
9/30/2021
 2.35 %
 4.80 %
12/6/2022
 4.73 % 12/13/2022

Expiration 
Date
5/1/2023
8/10/2023
10/12/2023
4/1/2024
4/1/2024
4/1/2024
9/30/2026
12/6/2027
1/21/2028

 2.78 %
 2.25 %
 3.02 %
 0.50 %
 0.50 %
 0.55 %
 1.05 %
 3.50 %
 3.43 %

56

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Contractual Obligations

The following table summarizes the future payments for known contractual obligations as of December 31, 2022 (in 

thousands):

Contractual Obligations

Payments due by period

Total

Less than

1 year

1 – 3

years

3 – 5

years

More than

5 years

Principal payments and maturities of long-term indebtedness

$  1,073,132  $ 

9,770  $  119,393  $  540,101  $  403,868 

Ground and other operating leases

Interest payments on long-term debt—fixed interest
Interest payments on long-term debt—variable interest(1)(2)

Tenant-related and other commitments
Total (3) (4) 

________________________________________

211,942 

109,100 

85,199 

21,533 

4,156 

19,778 

28,384 

17,115 

8,467 

36,588 

39,138 

4,418 

8,531 

24,868 

17,480 

— 

190,788 

27,866 

197 

— 

$  1,500,906  $ 

79,203  $  208,004  $  590,980  $  622,719 

(1) For long-term debt that bears interest at variable rates, we estimated future interest payments using forward curves of the respective 
indexed rates as of December 31, 2022. As of December 31, 2022, LIBOR, SOFR, and BSBY  were 439, 436, and 436 basis points, 
respectively.

(2) Assumes the $61.0 million revolving credit facility balance outstanding as of December 31, 2022 remains constant through maturity of 
the facility. Amounts also include unused credit facility fees assuming the balance outstanding as of December 31, 2022 remains 
constant through maturity of our revolving credit facility.

(3) Contractual obligations above do not include funding obligations to non-wholly owned development projects as well as unfunded 
mezzanine loan and preferred equity investment commitments due to the uncertainty of the timing and amounts of certain of these 
obligations. Refer to "Item 1. Business" for information about our development projects, mezzanine loans and preferred equity 
investments.

(4) Contractual Obligations above exclude increased ground lease payments at 1405 Point which is classified as a note payable in the 

consolidated balance sheets.

Off-Balance Sheet Arrangements

In connection with our mezzanine lending activities, we have guaranteed payment of portions of certain senior loans of 

third parties associated with the development projects. The following table summarizes the guarantees made by us as of 
December 31, 2022 (in thousands):

Development project

Interlock Commercial
Harbor Point Parcel 4 (a)
Total

_______________________________________
 (a) As of December 31, 2022, no amounts have been funded on this senior loan.

Payment guarantee 
amount

Guarantee liability

$ 

$ 

37,450  $ 

32,910 

70,360  $ 

701 

198 

899 

In connection with our Harbor Point Parcel 3 unconsolidated joint venture, we will be responsible for providing a 

completion guarantee to the lender for this project when a construction loan is obtained.

Unfunded Loan Commitments

We may be a party to financial instruments with off-balance sheet risk in the normal course of business to meet the 
financial needs of our borrowers. These commitments are not reflected on the consolidated balance sheet. As of December 31, 
2022, our off-balance sheet arrangements consisted of $18.2 million of unfunded commitments of our notes receivable. We have 
recorded a $0.3 million credit loss reserve in conjunction with the total unfunded commitments. Such commitments are subject 
to our borrowers’ satisfaction of certain financial and nonfinancial covenants and involve, to varying degrees, elements of credit 
risk in excess of the amount recognized in the consolidated balance sheets. The commitments may or may not be funded 
depending on a variety of circumstances including timing, credit metric hurdles, and other nonfinancial events occurring.

57

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash Flows

Operating Activities

Investing Activities

Financing Activities

Net Increase/(decrease)

Cash, Cash Equivalents, and Restricted Cash, Beginning of Period

Cash, Cash Equivalents, and Restricted Cash, End of Period

Operating Activities

Investing Activities

Financing Activities

Net Increase

Cash, Cash Equivalents, and Restricted Cash, Beginning of Period

Cash, Cash Equivalents, and Restricted Cash, End of Period

Years Ended

December 31, 

2022

2021

Change

($ in thousands)

$ 

116,858  $ 

91,184  $ 

(33,242)   

(72,194)   

(57,629)   

(43,542)   

25,674 

24,387 

(28,652) 

$ 

$ 

$ 

11,422  $ 

(9,987)  $ 

21,409 

40,443  $ 

51,865  $ 

50,430 

40,443 

Years Ended

December 31, 

2021

2020

Change

($ in thousands)

$ 

91,184  $ 

91,179  $ 

5 

(57,629)   

(43,542)   

(9,987)  $ 

50,430  $ 

40,443  $ 

$ 

$ 

$ 

(26,227)   

(58,101)   

(31,402) 

14,559 

6,851  $ 

(16,838) 

43,579 

50,430 

Net cash provided by operating activities for the year ended December 31, 2022 increased by $25.7 million compared 
to the year ended December 31, 2021 primarily as a result of increased net operating income from the property portfolio and an 
increase in gross profit from general contracting and real estate services, slightly offset by timing differences in operating assets 
and liabilities.

Net cash used for investing activities for the year ended December 31, 2022 decreased by $24.4 million compared to 

the year ended December 31, 2021 primarily due to the sale of The Residences at Annapolis Junction, which was partially 
offset by acquisition activity.

Net cash used for financing activities during the year ended December 31, 2022 increased by $28.7 million compared 

to the year ended December 31, 2021 primarily as a result of the increased debt repayments and increased dividend and 
distribution payments during the year.

Non-GAAP Financial Measures

FFO and Normalized FFO

We calculate FFO in accordance with the standards established by the National Association of Real Estate Investment 

Trusts ("Nareit"). Nareit defines FFO as net income (loss) (calculated in accordance with GAAP), excluding depreciation and 
amortization related to real estate, gains or losses from the sales of certain real estate assets, gains or losses from change in 
control, and impairment write-downs of certain real estate assets and investments in entities when the impairment is directly 
attributable to decreases in the value of depreciable real estate held by the entity.

FFO is a supplemental non-GAAP financial measure. Management uses FFO as a supplemental performance measure 
because it believes that FFO is beneficial to investors as a starting point in measuring our operational performance. Specifically, 
in excluding real estate related depreciation and amortization and gains and losses from property dispositions, which do not 
relate to or are not indicative of operating performance, FFO provides a performance measure that, when compared period-
over-period, captures trends in occupancy rates, rental rates, and operating costs. Other equity REITs may not calculate FFO in 
accordance with the Nareit definition as we do, and, accordingly, our FFO may not be comparable to such other REITs' FFO.

58

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
However, because FFO excludes depreciation and amortization and captures neither the changes in the value of our 

properties that result from use or market conditions nor the level of capital expenditures and leasing commissions necessary to 
maintain the operating performance of our properties, all of which have real economic effects and could materially impact our 
results from operations, the utility of FFO as a measure of our performance is limited. In addition, other equity REITs may not 
calculate FFO in accordance with the Nareit definition as we do, and, accordingly, our calculation of FFO may not be 
comparable to such other REITs’ calculation of FFO. Accordingly, FFO should be considered only as a supplement to net 
income as a measure of our performance. FFO should not be used as a measure of our liquidity, nor is it indicative of funds 
available to fund our cash needs, including our ability to pay dividends or service indebtedness. Also, FFO should not be used 
as a supplement to or substitute for cash flow from operating activities computed in accordance with GAAP.

We also believe that the computation of FFO in accordance with Nareit’s definition includes certain items that are not 

indicative of the results provided by our operating property portfolio and affect the comparability of our year-over-year 
performance. Accordingly, management believes that Normalized FFO is a more useful performance measure that excludes 
certain items, including but not limited to, debt extinguishment losses and prepayment penalties, impairment of intangible assets 
and liabilities, property acquisition, development and other pursuit costs, mark-to-market adjustments for interest rate 
derivatives not designated as cash flow hedges, certain costs for interest rate caps designated as cash flow hedges, provision for 
unrealized non-cash credit losses, amortization of right-of-use assets attributable to finance leases, severance related costs, and 
other non-comparable items. Other equity REITs may not calculate Normalized FFO in the same manner as we do, and, 
accordingly, our Normalized FFO may not be comparable to such other REITs' Normalized FFO.

The following table sets forth a reconciliation of FFO and Normalized FFO for each of the years ended December 31, 

2022, 2021 and 2020 to net income, the most directly comparable GAAP measure:  

Net income attributable to common stockholders and OP Unitholders
Depreciation and amortization (1)
Gain on operating real estate dispositions (2)
Impairment of real estate assets
FFO attributable to common stockholders and OP Unitholders
Acquisition, development and other pursuit costs
Impairment of intangible assets and liabilities
Loss on extinguishment of debt
Unrealized credit loss (release) provision
Amortization of right-of-use assets - finance leases
Change in fair value of derivatives not designated as cash flow hedges and 
other
Amortization of interest rate cap premiums on designated cash flow hedges
Normalized FFO available to common stockholders and OP Unitholders
Net income attributable to common stockholders and OP Unitholders per 
diluted share and unit
FFO attributable to common stockholders and OP Unitholders per diluted 
share and unit
Normalized FFO attributable to common stockholders and OP Unitholders 
per diluted share and unit
Weighted-average common shares and units - diluted

$ 

$ 

$ 

$ 

$ 

________________________________________

2022

Years Ended December 31, 
2020
2021
(in thousands, except per share and unit amounts)

82,457  $ 
71,971 
(47,984) 
201 
106,645 
37 
215 
3,374 
626 
1,110 

(8,698) 
3,849 
107,158  $ 

13,912  $ 
68,853 
(18,793) 
21,378 
85,350 
112 
— 
3,810 
(792) 
1,022 

(2,182) 
235 
87,555  $ 

0.93  $ 

0.17  $ 

1.21  $ 

1.05  $ 

1.22  $ 

1.08  $ 

88,192 

81,445 

29,840 
59,545 
(6,388) 
— 
82,997 
584 
666 
— 
256 
586 

1,130 
— 
86,219 

0.38 

1.06 

1.10 
78,309 

(1) The adjustment for depreciation and amortization for the year ended December 31, 2020 excludes $0.4 million of depreciation 
attributable to the Company's joint venture partners.
(2) The adjustment for gain on real estate dispositions for the year ended December 31, 2022 excludes $5.4 million of the gain on the sale of 
The Residences at Annapolis Junction that was allocated to our joint venture partner. Additionally, the adjustment for gain on real estate 
dispositions for the year ended December 31, 2021 excludes the gain on sale of easement rights on a non-operating parcel and the loss on 
sale of a non-operating parcel.

Inflation

59

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Substantially all of our office and retail leases provide for the recovery of increases in real estate taxes and operating 

expenses. In addition, substantially all of the leases provide for annual rent increases. We believe that inflationary increases 
may be offset in part by the contractual rent increases and expense escalations previously described. In addition, our 
multifamily leases generally have lease terms ranging from 7 to 15 months with a majority having 12-month lease terms 
allowing negotiation of rental rates at term end, which we believe reduces our exposure to the effects of inflation, although 
an extreme and sustained escalation in costs could have a negative impact on our residents and their ability to absorb rent 
increases.

Item 7A. 

Quantitative and Qualitative Disclosures About Market Risk.

The primary market risk to which we are exposed is interest rate risk. Our primary interest rate exposure is LIBOR, 
SOFR and BSBY. We primarily use fixed interest rate financing to manage our exposure to fluctuations in interest rates. We 
also use derivative financial instruments to manage interest rate risk. We do not use these derivatives for trading or other 
speculative purposes.

As of December 31, 2022 and excluding unamortized GAAP adjustments, approximately $641.8 million, or 59.8%, of 
our debt had fixed interest rates or was subject to interest rate swaps and approximately $431.3 million, or 40.2%, had variable 
interest rates. Considering interest rate swaps and caps, 100.0% of our outstanding debt is either fixed rate or economically 
hedged. As of December 31, 2022, LIBOR was approximately 439 basis points, SOFR was approximately 436 basis points, and 
BSBY was approximately 436 basis points. Assuming no change in the level of our variable-rate debt or derivative instruments, 
if interest rates were to increase by 100 basis points, our cash flow would decrease by approximately $0.6 million per year. 
Assuming no change in the level of our variable-rate debt or derivative instruments, if interest rates were reduced by 100 basis 
points, our cash flow would increase by approximately $1.7 million per year.

Item 8. 

Financial Statements and Supplementary Data.

Our consolidated financial statements and supplementary data are included as a separate section of this Annual Report 

on Form 10-K commencing on page F-1 and are incorporated herein by reference.

Item 9. 

Changes and Disagreements with Accountants on Accounting and Financial Disclosure.

None.

Item 9A. 

Controls and Procedures.  

Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as such term is defined in Rule 13a-15(e) and 15d-15(e) under the 
Exchange Act) that are designed to ensure that information required to be disclosed in our reports under the Exchange Act is 
processed, recorded, summarized, and reported within the time periods specified in the rules and regulations of the SEC and 
that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief 
Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating the 
disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and 
operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to 
apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. 

We have carried out an evaluation, under the supervision and with the participation of management, including our 

Chief Executive Officer and Chief Financial Officer, regarding the effectiveness of our disclosure controls and procedures as of 
December 31, 2022, the end of the period covered by this report. Based on the foregoing, our Chief Executive Officer and Chief 
Financial Officer have concluded, as of December 31, 2022, that our disclosure controls and procedures were effective in 
ensuring that information required to be disclosed by us in reports filed or submitted under the Exchange Act (i) is processed, 
recorded, summarized, and reported within the time periods specified in the SEC's rules and forms and (ii) is accumulated and 
communicated to our management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate to 
allow for timely decisions regarding required disclosure.

Management’s Annual Report on Internal Control over Financial Reporting

The Company’s management is responsible for establishing and maintaining adequate internal control over financial 

reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Under the supervision and with the 

60

 
 
 
 
 
 
 
 
 
participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an 
evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2022 based on the Internal 
Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 
framework). Based on that evaluation, the Company’s management concluded that our internal control over financial reporting 
was effective as of December 31, 2022.  

Our internal control over financial reporting as of December 31, 2022 has been audited by Ernst & Young LLP, an 

independent registered public accounting firm, as stated in their report, which is included elsewhere herein.

Changes in Internal Control over Financial Reporting

There have been no changes in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) 

and 15d-15(f) under the Exchange Act) during the quarter ended December 31, 2022 that have materially affected, or are 
reasonably likely to materially affect, the Company’s internal control over financial reporting.

Item 9B. 

Other Information.   

None

Item 9C. 

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. 

Not applicable.

61

 
 
Item 10. 

Directors, Executive Officers and Corporate Governance.

PART III  

This information is incorporated by reference from the Company’s Proxy Statement with respect to the 2023 Annual 

Meeting of Stockholders to be filed with the SEC no later than April 30, 2023.  

Item 11. 

Executive Compensation.  

This information is incorporated by reference from the Company’s Proxy Statement with respect to the 2023 Annual 

Meeting of Stockholders to be filed with the SEC no later than April 30, 2023. 

Item 12. 

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. 

This information is incorporated by reference from the Company’s Proxy Statement with respect to the 2023 Annual 

Meeting of Stockholders to be filed with the SEC no later than April 30, 2023. 

Item 13. 

Certain Relationships and Related Transactions, and Director Independence.

This information is incorporated by reference from the Company’s Proxy Statement with respect to the 2023 Annual 

Meeting of Stockholders to be filed with the SEC no later than April 30, 2023. 

Item 14. 

Principal Accountant Fees and Services.

This information is incorporated by reference from the Company’s Proxy Statement with respect to the 2023 Annual 

Meeting of Stockholders to be filed with the SEC no later than April 30, 2023. 

62

 
 
 
 
 
 
Item 15. 

Exhibits and Financial Statement Schedules.  

The following is a list of documents filed as a part of this report:

PART IV  

(1)

Financial Statements

Included herein at pages F-1 through F-50.  

(2)

Financial Statement Schedules

The following financial statement schedule is included herein at pages F-51 through F-53:  

Schedule III—Consolidated Real Estate Investments and Accumulated Depreciation

All other schedules for which provision is made in Regulation S-X are either not required to be included herein under 

the related instructions, are inapplicable, or the related information is included in the footnotes to the applicable financial 
statements and, therefore, have been omitted.

(3)

Exhibits

The exhibits required to be filed by Item 601 of Regulation S-K are listed in the Index to Exhibits of this report and 

incorporated by reference herein.

Item 16. 

Form 10-K Summary.  

None. 

63

 
 
 
 
 
 
 
 
Exhibit
Number
3.1

3.2

3.3

3.4

3.5

3.6

3.7

4.1

4.2

10.1

10.2†

10.3†

10.4†

10.5†

10.6†

10.7

10.8

10.9

10.10

INDEX TO EXHIBITS

Description

Articles of Amendment and Restatement of Armada Hoffler Properties, Inc. (Incorporated by reference to 
Exhibit 4.1 to the Company’s Registration Statement on Form S-3, filed on June 2, 2014)

Amended and Restated Bylaws of Armada Hoffler Properties, Inc. (Incorporated by reference to Exhibit 3.2 to 
the Company's Annual Report on Form 10-K, filed on February 24, 2022)

Articles Supplementary Designating the Rights and Preferences of the 6.75% Series A Cumulative 
Redeemable Perpetual Preferred Stock (Incorporated by reference to Exhibit 3.1 to the Company’s Current 
Report on Form 8-K, filed on June 17, 2019)

Articles Supplementary relating to Section 3-802(c) of the Maryland General Corporation Law (Incorporated 
by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed on February 24, 2020)

Articles Supplementary Designating Additional 6.75% Series A Cumulative Redeemable Perpetual Preferred 
Stock, dated March 6, 2020 (Incorporated by reference to Exhibit 4.10 to the Company’s Form S-3, filed on 
March 9, 2020)

Articles Supplementary Designating Additional 6.75% Series A Cumulative Redeemable Perpetual Preferred 
Stock, dated July 2, 2020 (Incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 
8-K, filed on July 6, 2020)

Articles Supplementary Designating Additional 6.75% Series A Cumulative Redeemable Perpetual Preferred 
Stock, dated August 17, 2020 (Incorporated by reference to Exhibit 3.1 to the Company’s Current Report on 
Form 8-K, filed on August 20, 2020)

Form of Certificate of Common Stock of Armada Hoffler Properties, Inc. (Incorporated by reference to Exhibit 
4.1 to the Company’s Registration Statement on Form S-11/A, filed on May 2, 2013)

Description of Securities of Armada Hoffler Properties, Inc. (Incorporated by reference to Exhibit 4.2 to the 
Company's Annual Report on Form 10-K, filed on February 25, 2020)

Amended and Restated Agreement of Limited Partnership of Armada Hoffler, L.P. (Incorporated by reference 
to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q, filed on November 12, 2013)

Armada Hoffler Properties, Inc. Amended and Restated 2013 Equity Incentive Plan (Incorporated by reference 
to Exhibit 10.1 to the Company’s Registration Statement on Form S-8, filed on June 15, 2017)

Form of Restricted Stock Award Agreement for Executive officers (Incorporated by reference to Exhibit 10.3 
to the Company’s Annual Report on Form 10-K, filed on February 24, 2020)

Indemnification Agreement between Armada Hoffler Properties, Inc. and each of the Directors and Officers 
listed on Schedule A thereto (Incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on 
Form 10-Q, filed on August 5, 2022)

Tax Protection Agreement by and among Armada Hoffler Properties, Inc. and the person listed on the 
signature page thereto (Incorporated by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 
10-Q, filed on November 12, 2013)

Armada Hoffler, L.P. Amended and Restated Executive Severance Benefit Plan with the participants listed on 
Schedule A thereto (Incorporated by reference to Exhibit 10.6 to the Company's Annual Report on Form 10-K, 
filed on February 25, 2020)

Form of Restricted Stock Award Agreement for Directors (Incorporated by reference to Exhibit 10.7 to the 
Company’s Annual Report on Form 10-K, filed on February 24, 2020)

Amendment No. 1, dated as of March 19, 2014, to the First Amended and Restated Agreement of Limited 
Partnership of Armada Hoffler, L.P., dated as of May 13, 2013 (Incorporated by reference to Exhibit 10.1 to 
the Company’s Quarterly Report on Form 10-Q, filed on May 15, 2014)

Amendment No. 2, dated as of July 10, 2015, to the First Amended and Restated Agreement of Limited 
Partnership of Armada Hoffler, L.P., dated as of May 13, 2013 (Incorporated by reference to Exhibit 10.1 to 
the Company’s Current Report on Form 8-K, filed on July 16, 2015)

Amendment No. 3 to the First Amended and Restated Agreement of Limited Partnership of Armada Hoffler, 
L.P., dated as of May 13, 2013 (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on 
Form 8-K, filed on June 17, 2019)

64

 
Exhibit
Number
10.11

10.12

10.13

10.14†

10.15

10.16

10.17

21.1*

23.1*

31.1*

31.2*

32.1**

32.2**

101*

Description

Amendment No. 4, dated as of March 6, 2020, to the First Amended and Restated Agreement of Limited 
Partnership of Armada Hoffler, L.P., dated as of May 13, 2013 (Incorporated by reference to Exhibit 10.1 to 
the Company’s Quarterly Report on Form 10-Q, filed on November 6, 2020)

Amendment No. 5, dated as of July 2, 2020, to the First Amended and Restated Agreement of Limited 
Partnership of Armada Hoffler, L.P., dated as of May 13, 2013 (Incorporated by reference to Exhibit 10.2 to 
the Company’s Quarterly Report on Form 10-Q, filed on November 6, 2020)

Amendment No. 6, dated as of August 17, 2020, to the First Amended and Restated Agreement of Limited 
Partnership of Armada Hoffler, L.P., dated as of May 13, 2013 (Incorporated by reference to Exhibit 10.3 to 
the Company’s Quarterly Report on Form 10-Q, filed on November 6, 2020)

Armada Hoffler Properties, Inc. Amended and Restated Short-Term Incentive Program (Incorporated by 
reference to Exhibit 10.9 to the Company’s Annual Report on Form 10-K, filed on February 28, 2019)

Third Amended and Restated Credit Agreement, dated August 23, 2022, among Armada Hoffler, L.P., as 
Borrower, Armada Hoffler Properties, Inc., as Parent, Bank of America, N.A., as Administrative Agent, and 
the other agents and Lenders party thereto (Incorporated by reference to Exhibit 10.1 to the Company's Current 
Report on Form 8-K, filed on October 6, 2022)

Second Amended and Restated Guaranty Agreement, dated October 3, 2019, among certain subsidiaries of 
Armada Hoffler, L.P. named therein for the benefit of the Administrative Agent and the Lenders named in the 
Second Amended and Restated Credit Agreement (Incorporated by reference to Exhibit 10.2 to the Company's 
Current Report on Form 8-K, filed on October 9, 2019)

Membership Interest Purchase Agreement, dated December 3, 2021, by and between AHP Acquisitions, LLC, 
as Purchaser, and Harbor Point Parcel 2 Acquisition LLC, as Seller. (Incorporated by reference to Exhibit 
10.17 to the Company's Annual Report on Form 10-K, filed on February 24, 2022)

List of Subsidiaries of Armada Hoffler Properties, Inc.

Consent of Ernst & Young LLP, Independent Public Accounting Firm

Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to 
Section 906 of the Sarbanes-Oxley Act of 2002

Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 
906 of the Sarbanes-Oxley Act of 2002

The following materials from the Company’s Annual Report on Form 10-K for the year ended December 31, 
2022, were formatted in Inline XBRL (Extensible Business Reporting Language): (i) Consolidated Balance 
Sheet, (ii) Consolidated Statements of Comprehensive Income, (iii) Consolidated Statements of Equity, (iv) 
Consolidated Statements of Cash Flows, and (v) Notes to Consolidated Financial Statements. The instance 
document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline 
XBRL document.

104*

Cover page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL.

*

**

†

Filed herewith

Furnished herewith

Management contract or compensatory plan or arrangement

65

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this 
report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: February 23, 2023 

ARMADA HOFFLER PROPERTIES, INC.

By:

/s/ Louis S. Haddad
Louis S. Haddad

President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following 
persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature

/s/ Daniel A. Hoffler
Daniel A. Hoffler

/s/ Louis S. Haddad
Louis S. Haddad

Title

Executive Chairman and Director

Date

February 23, 2023

Vice Chairman, President, Chief Executive Officer and Director
(principal executive officer)

February 23, 2023

/s/ Matthew T. Barnes-Smith

Matthew T. Barnes-Smith

Chief Financial Officer, Treasurer, and Corporate Secretary
(principal financial officer and principal accounting officer)

February 23, 2023

/s/ George F. Allen
George F. Allen

/s/ James A. Carroll
James A. Carroll

/s/ James C. Cherry
James C. Cherry

/s/ Eva S. Hardy
Eva S. Hardy

/s/ Dennis H. Gartman
Dennis H. Gartman

/s/ A. Russell Kirk
A. Russell Kirk

/s/ John W. Snow
John W. Snow

February 23, 2023

February 23, 2023

February 23, 2023

February 23, 2023

February 23, 2023

February 23, 2023

February 23, 2023

Director

Director

Director

Director

Director

Director

Director

66

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Armada Hoffler Properties, Inc.

Form 10-K
For the Fiscal Year Ended December 31, 2022 

Item 8, Item 15(a)(1) and (2)

Index to Financial Statements and Schedule

Report of Independent Registered Public Accounting Firm (PCAOB ID: 42)

Report of Independent Registered Public Accounting Firm 

Consolidated Balance Sheets as of December 31, 2022 and 2021

Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2022, 2021, and 2020

Consolidated Statements of Equity for the Years Ended December 31, 2022, 2021, and 2020

Consolidated Statements of Cash Flows for the Years Ended December 31, 2022, 2021, and 2020

Notes to Consolidated Financial Statements 

Schedule III—Consolidated Real Estate Investments and Accumulated Depreciation 

F-2

F-3

F-6

F-7

F-8

F-10

F-12

F-51

F-1

 
 
 
 
Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of Armada Hoffler Properties, Inc.

Opinion on Internal Control over Financial Reporting

We have audited Armada Hoffler Properties, Inc.’s internal control over financial reporting as of December 31, 2022, based on 
criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the 
Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Armada Hoffler Properties, Inc. (the Company) 
maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on the 
COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) 
(PCAOB), the 2022 consolidated financial statements of the Company and our report dated February 23, 2023 expressed an 
unqualified opinion thereon.  

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its 
assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Annual 
Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company's internal 
control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are 
required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable 
rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the 
audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all 
material respects. 

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material 
weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and 
performing such other procedures as we considered necessary in the circumstances.  We believe that our audit provides a 
reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the 
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally 
accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures 
that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and 
dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit 
preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and 
expenditures of the company are being made only in accordance with authorizations of management and directors of the 
company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or 
disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, 
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate 
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Ernst & Young LLP

Richmond, Virginia

February 23, 2023

F-2

Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of Armada Hoffler Properties, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Armada Hoffler Properties, Inc. (the Company) as of 
December 31, 2022 and 2021, the related consolidated statements of comprehensive income, equity and cash flows for each of 
the three years in the period ended December 31, 2022, and the related notes and Financial Statement Schedule listed in the 
Index at Item 15(2) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated 
financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2022 and 
2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022, in 
conformity with U.S. generally accepted accounting principles.   

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) 
(PCAOB), the Company’s internal control over financial reporting as of December 31, 2022, based on criteria established in 
Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission 
(2013 framework), and our report dated February 23, 2023 expressed an unqualified opinion thereon.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on 
the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are 
required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable 
rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the 
audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to 
error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial 
statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included 
examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included 
evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall 
presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that 
were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that 
are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The 
communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as 
a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit 
matters or on the accounts or disclosures to which they relate.

F-3

 
Description of 
the Matter

Allowance for Loan Losses - Notes Receivable

At December 31, 2022, the Company’s notes receivable portfolio totaled $136 million, net of allowances 
of $1.3 million. As discussed in Notes 2 and 6 to the consolidated financial statements, management 
estimates the allowance for loan losses on outstanding notes receivable based primarily upon relevant 
historical loan loss data sets, the forecast for macroeconomic conditions, loan-to-value of the underlying 
project, remaining contractual loan term, and other relevant loan-specific factors. For loans experiencing 
financial difficulty as of the measurement date, the Company recognizes expected credit losses calculated 
as the difference between the amortized cost basis of the financial asset and the estimated fair value of the 
collateral, net of selling costs, which includes an estimation of the projected sales proceeds from the sale of 
the underlying property.

Auditing management’s estimate of the allowance for loan losses was complex and highly judgmental due 
to the significant estimation required to determine the estimated fair value of the collateral. In particular, 
the estimated fair value of the collateral was highly sensitive to significant assumptions based on 
management’s expectations about future real estate market or economic conditions and the projected 
operating results of the property.

How We 
Addressed the 
Matter in Our 
Audit

We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over 
the allowance for loan losses process. For example, we tested controls over management’s review of the 
estimated allowance, the significant assumptions, and the data used to calculate the estimated fair value of 
the collateral.

To test the allowance for loan losses, we performed audit procedures that included, among others, 
assessing methodologies used and testing the significant assumptions and underlying data used by the 
Company in calculating the estimated fair value of the collateral. We compared the significant assumptions 
used by management to external evidence, including comparable market capitalization rates and recent 
market activity of similar property transactions. We tested the projected operating results of properties by 
comparing inputs and assumptions to executed lease agreements or recent market activity and operating 
expenses incurred at similar operating properties owned by the Company. We performed sensitivity 
analyses of significant assumptions to evaluate the changes to the estimated fair value of the collateral that 
would result from changes in the assumptions. We also assessed the historical accuracy of management’s 
estimates.

General contracting revenue recognition

Description of 
the Matter

For the year ended December 31, 2022, the Company’s general contracting revenues totaled approximately 
$234.9 million. As described in Notes 2 and 7 to the consolidated financial statements, for each 
construction contract, the Company estimates its progress in satisfying performance obligations based on 
the proportion of incurred costs to total estimated costs at completion. The Company also estimates the 
total transaction price, including variable components, for each construction contract.  

Auditing the Company’s measurement of general contracting revenue was challenging due to the 
significant estimation required to determine the estimated total costs at completion and variable 
consideration. Estimated costs at completion are affected by management’s forecasts of anticipated costs to 
be incurred and contingency reserves for exposures related to unknown costs, such as design deficiencies 
and subcontractor defaults. Estimated variable consideration is affected by claims and unapproved change 
orders, which may result from changes in the scope of the contract.

F-4

How We 
Addressed the 
Matter in Our 
Audit

We obtained an understanding, evaluated the design and tested the operating effectiveness of the 
Company’s controls over the measurement of general contracting revenue. For example, we tested controls 
over management’s review and monitoring of the variable consideration calculation and the underlying 
assumptions related to estimates of costs at completion.

To test general contracting revenue recognition, our audit procedures included, among others, evaluating 
the estimates discussed above and testing the completeness and accuracy of the underlying data used by the 
Company to calculate variable consideration and total estimated costs at completion. For example, we 
tested variable consideration by inspecting subsequently executed change orders, reviewing legally 
enforceable terms of the contracts or confirming the value of executed change orders directly with the 
customers.  We also confirmed directly with customers specific contract details, including the current and 
original contract value as well as the estimated percentage of completion. We tested the estimated costs at 
completion by comparing management’s cost estimates of materials, labor, and subcontractors to third-
party evidence, such as subcontractor bids. In addition, we visited property sites, conducted interviews with 
the Company’s project management personnel, and involved our engineering specialists to assist in testing 
the Company’s estimated costs at completion.  We also assessed the historical accuracy of management’s 
estimates of variable consideration and estimated costs at completion through retrospective review of 
actual gross-margins of completed projects compared to the anticipated gross margins during the projects.

Harbor Point Parcel 4 Consolidation Analysis

Description of 
the Matter

The Company accounted for their interest in Harbor Point Parcel 4 under the equity method of accounting. 
At December 31, 2022, the Company’s investment in the venture was $32.4 million. As discussed in Note 
5 to the consolidated financial statements, the Company evaluated the rights provided to each party in the 
venture to assess the consolidation of the venture.

Auditing management’s consolidation analysis was complex and judgmental due to the subjectivity in 
assessing which activities most significantly impact the venture’s economic performance based on the 
purpose and design of the entity over the duration of its expected life and assessing which party has rights 
to direct those activities. 

How We 
Addressed the 
Matter in Our 
Audit

We obtained an understanding, evaluated the design and tested the operating effectiveness of the 
Company’s controls over the evaluation of rights provided to each party in the venture. For example, we 
tested controls over management’s assessment of the activities that most significantly impact the venture’s 
performance and which party has the power to direct those activities.

To test the Company’s consolidation assessment for the venture, our procedures included, among others, 
reviewing the venture agreement and discussing with management the nature of the rights conveyed to the 
Company through the agreement as well as the business purpose of the venture transactions. We reviewed 
management’s assessment of the activities that would most significantly impact the venture’s economic 
performance and evaluated whether the venture agreement provided participating or protective rights to the 
Company. 

/s/ Ernst & Young LLP

We have served as the Company’s auditor since 2012.

Richmond, Virginia

February 23, 2023

F-5

ARMADA HOFFLER PROPERTIES, INC.
Consolidated Balance Sheets
(In thousands, except par value and share data)

ASSETS
Real estate investments:

Income producing property
Held for development
Construction in progress

Accumulated depreciation
Net real estate investments

Real estate investments held for sale
Cash and cash equivalents
Restricted cash
Accounts receivable, net
Notes receivable, net
Construction receivables, including retentions, net
Construction contract costs and estimated earnings in excess of billings
Equity method investment
Operating lease right-of-use assets
Finance lease right-of-use assets
Acquired lease intangible assets
Other assets

Total Assets

LIABILITIES AND EQUITY

Indebtedness, net
Liabilities related to assets held for sale
Accounts payable and accrued liabilities
Construction payables, including retentions
Billings in excess of construction contract costs and estimated earnings
Operating lease liabilities
Finance lease liabilities
Other liabilities

Total Liabilities

Stockholders’ equity:
Preferred stock, $0.01 par value, 100,000,000 shares authorized: 
  6.75% Series A Cumulative Redeemable Perpetual Preferred Stock, 9,980,000 shares  
  authorized, 6,843,418 shares issued and outstanding as of December 31, 2022 and 2021
Common stock, $0.01 par value, 500,000,000 shares authorized; 67,729,854 and 63,011,700 
shares issued and outstanding as of December 31, 2022 and 2021, respectively
Additional paid-in capital
Distributions in excess of earnings
Accumulated other comprehensive income (loss)
Total stockholders’ equity
Noncontrolling interests in investment entities
Noncontrolling interests in Operating Partnership

Total Equity
Total Liabilities and Equity

See Notes to Consolidated Financial Statements.

F-6

DECEMBER 31,

2022

2021

$ 

$ 

1,884,214  $ 
6,294 
53,067 
1,943,575 
(329,963)   
1,613,612 
— 
48,139 
3,726 
39,186 
136,039 
70,822 
342 
71,983 
23,350 
45,878 
103,870 
85,363 
2,242,310  $ 

$ 

1,068,261  $ 

— 
26,839 
93,472 
17,515 
31,677 
46,477 
54,055 
1,338,296 

1,658,609 
6,294 
72,535 
1,737,438 
(285,814) 
1,451,624 
80,751 
35,247 
5,196 
29,576 
126,429 
17,865 
243 
12,685 
23,493 
46,989 
62,038 
45,927 
1,938,063 

917,556 
41,364 
29,589 
31,166 
4,881 
31,648 
46,160 
55,876 
1,158,240 

171,085 

171,085 

677 
587,884 
(126,875)   
14,679 
647,450 
24,055 
232,509 
904,014 
2,242,310  $ 

630 
525,030 
(141,360) 
(33) 
555,352 
629 
223,842 
779,823 
1,938,063 

$ 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ARMADA HOFFLER PROPERTIES, INC. 
Consolidated Statements of Comprehensive Income  
(In thousands, except per share and unit data)

Revenues

Rental revenues
General contracting and real estate services revenues
Total revenues

$ 

219,294  $ 
234,859 
454,153 

192,140  $ 

91,936 
284,076 

166,488 
217,146 
383,634 

Expenses

YEARS ENDED DECEMBER 31,

2022

2021

2020

Rental expenses
Real estate taxes
General contracting and real estate services expenses
Depreciation and amortization
Amortization of right-of-use assets - finance leases
General and administrative expenses
Acquisition, development and other pursuit costs
Impairment charges
Total expenses
Gain on real estate dispositions
Operating income
Interest income
Interest expense
Loss on extinguishment of debt
Change in fair value of derivatives and other
Unrealized credit loss release (provision)
Other income (expense), net

Income before taxes
Income tax benefit
Net income
Net (income) loss attributable to noncontrolling interests:

Investment entities
Operating Partnership

Net income attributable to Armada Hoffler Properties, Inc.
Preferred stock dividends
Net income attributable to common stockholders
Net income attributable to common stockholders per share (basic and 
diluted)
Weighted-average common shares outstanding (basic and diluted)

Comprehensive income:
Net income
Unrealized cash flow hedge gains (losses)
Realized cash flow hedge losses reclassified to net income
Comprehensive income
Comprehensive (income) loss attributable to noncontrolling interests:

Investment entities
Operating Partnership

$ 

$ 

$ 

Comprehensive income attributable to Armada Hoffler Properties, Inc. $ 

50,742 
22,057 
227,158 
72,974 
1,110 
15,691 
37 
416 
390,185 
53,466 
117,434 
16,978 
(39,680) 
(3,374) 
8,698 
(626)
378 
99,808 
145 
99,953 

46,494 
21,852 
88,100 
68,853 
1,022 
14,610 
112 
21,378 
262,421 
19,040 
40,695 
18,457 
(33,905) 
(3,810) 
2,182 
792
302 
24,713 
742 
25,455 

(5,948) 
(19,258) 
74,747 
(11,548) 
63,199  $ 

5 
(3,568) 
21,892 
(11,548) 
10,344  $ 

0.94  $ 

0.17  $ 

67,576 

60,647 

99,953  $ 
20,165 
(800)
119,318 

(6,103) 
(23,755) 
89,460  $ 

25,455  $ 

3,678 
8,163
37,296 

5 
(6,573) 
30,728  $ 

38,960 
18,136 
209,472 
59,972 
586 
12,905 
584 
666 
341,281 
6,388 
48,741 
19,841 
(31,035) 
— 
(1,130) 
(256) 
515 
36,676 
283 
36,959 

230 
(8,037) 
29,152 
(7,349) 
21,803 

0.38 
57,328 

36,959 
(9,751) 
3,345 
30,553 

230 
(6,259) 
24,524 

See Notes to Consolidated Financial Statements.

F-7

y
t
i
u
q
e

l
a
t
o
T

g
n
i
l
l
o
r
t
n
o
c
n
o
N

n
i

s
t
s
e
r
e
t
n
i

g
n
i
t
a
r
e
p
O

p
i
h
s
r
e
n
t
r
a
P

g
n
i
l
l
o
r
t
n
o
c
n
o
N

n
i

s
t
s
e
r
e
t
n
i

t
n
e
m

t
s
e
v
n
i

s
e
i
t
i
t
n
e

l
a
t
o
T

'
s
r
e
d
l
o
h
k
c
o
t
s

y
t
i
u
q
e

d
e
t
a
l
u
m
u
c
c
A

r
e
h
t
o

e
v
i
s
n
e
h
e
r
p
m
o
c

s
s
o
l

s
n
o
i
t
u
b

i
r
t
s
i
D

f
o

s
s
e
c
x
e
n

i

i

s
g
n
n
r
a
e

l
a
n
o
i
t
i
d
d
A

n

i
-
d
i
a
p

l
a
t
i
p
a
c

n
o
m
m
o
C

k
c
o
t
s

d
e
r
r
e
f
e
r
P

k
c
o
t
s

7
4
4
,
5
5
6

$

8
0
4
,
2
4
2

$

2
6
4
,
4

$

7
7
5
,
8
0
4

$

)
0
4
2
4
(

,

$

)
6
7
6
6
0
1
(

,

$

0
8
6
5
5
4

,

$

3
6
5

$

0
5
2
,
3
6

$

0
2
0
2

,

1
y
r
a
u
n
a
J

,
e
c
n
a
l
a
B

.

C
N
I

,

S
E
I
T
R
E
P
O
R
P
R
E
L
F
F
O
H
A
D
A
M
R
A

y
t
i
u
q
E

f
o

s
t
n
e
m
e
t
a
t
S
d
e
t
a
d
i
l
o
s
n
o
C

)
a
t
a
d
e
r
a
h
s

t
p
e
c
x
e

,
s
d
n
a
s
u
o
h
t
n
I
(

)
9
0
0
,
3
(

9
5
9
,
6
3

)
1
5
7
,
9
(

)
4
2
8
(

7
3
0
,
8

)
9
6
6
,
2
(

5
4
3
,
3

1
9
8

2
4
3
,
2

0
5
6
,
9
1

0
6
4
,
1
0
1

—

—

)
3
3
0
,
5
(

)
9
2
7
,
2
(

—

)
9
4
3
,
7
(

)
0
3
5
,
4
3
(

2
0
8
,
6
5
7

5
5
4
,
5
2

8
7
6
,
3

3
6
1
,
8

—

6
0
0
,
2

7
7
6
,
1
5

—

—

)
4
0
8
(

)
9
4
9
,
2
(

)
8
4
5
,
1
1
(

)
7
5
6
,
2
5
(

3
2
8
,
9
7
7

3
5
9
,
9
9

5
6
1
,
0
2

—

—

—

—

—

—

—

9
9
0
,
6

)
5
9
5
,
1
1
(

)
2
3
2
,
9
(

5
1
1
,
3
3
2

9
3
9

8
6
5
,
3

7
6
0
,
2

—

—

—

—

—

—

—

)
8
3
5
,
2
(

)
9
0
3
,
3
1
(

2
4
8
,
3
2
2

4
8
6
,
4

8
5
2
,
9
1

—

)
0
3
2
(

—

—

—

—

—

—

)
4
4
7
,
3
(

—

—

—

—

—

8
8
4

)
5
(

—

—

—

—

—

—

—

—

—

6
4
1

—

9
2
6

8
4
1

8
4
9
,
5

3
3
3

,

5
1

—

)
5
8
1
,
2
(

2
5
1
,
9
2

)
2
8
0
,
7
(

—

—

)
2
8
0

,

7
(

4
5
4
,
2

4
5
4

,

2

2
4
3
,
2

0
5
6
,
9
1

0
6
4
,
1
0
1

—

)
8
8
3
,
7
(

—

—

6
6
8
,
8

)
9
4
3
,
7
(

)
8
9
2
,
5
2
(

9
9
1
,
3
2
5

2
9
8
,
1
2

9
3
7
,
2

6
9
0
,
6

—

6
0
0
,
2

7
7
6
,
1
5

—

)
0
5
9
(

)
1
1
4
(

—

)
8
4
5
,
1
1
(

)
8
4
3
,
9
3
(

2
5
3
,
5
5
5

7
4
7
,
4
7

3
3
3
,
5
1

—

—

—

—

—

—

—

—

—

—

)
8
6
8

,

8
(

—

9
3
7

,

2

6
9
0

,

6

—

—

—

—

—

—

—

—

—

)
3
3
(

—

—

—

—

—

—

—

—

—

—

—

)
5
8
1

,

2
(

2
5
1

,

9
2

)
9
4
3

,

7
(

)
8
9
2

,

5
2
(

)
6
5
3
2
1
1
(

,

2
9
8

,

1
2

—

—

—

—

—

—

—

—

—

)
8
4
5

,

1
1
(

)
8
4
3

,

9
3
(

)
0
6
3
1
4
1
(

,

7
4
7

,

4
7

—

—

—

—

)
5
7
3
6
(

,

0
4
3
2

,

1
3
6
9
1

,

—

)
8
8
3
7
(

,

—

9
5
8
8

,

—

—

—

7
4
7
2
7
4

,

—

—

—

—

5
0
0
2

,

9
3
6
1
5

,

—

)
0
5
9
(

)
1
1
4
(

—

—

—

—

—

0
3
0
5
2
5

,

—

—

—

—

—

9
1

2

—

—

—

7

—

—

—

1
9
5

—

—

—

—

8
3

1

—

—

—

—

—

—

0
3
6

—

—

—

—

—

—

5
3
8
,
7
0
1

—

—

—

—

—

—

—

—

—

5
8
0
,
1
7
1

—

—

—

—

—

—

—

—

—

—

—

—

t
e
n

o
t

d
e
i
f
i
s
s
a
l
c
e
r

s
e
s
s
o
l

e
g
d
e
h
w
o
l
f

h
s
a
c

d
e
z
i
l
a
e
R

e
m
o
c
n
i

)
1
(

e
g
n
a
h
c

g
n
i
t
n
u
o
c
c
a

f
o
t
c
e
f
f
e

e
v
i
t
a
l
u
m
u
C

s
e
s
s
o
l

e
g
d
e
h
w
o
l
f

h
s
a
c

d
e
z
i
l
a
e
r
n
U

)
s
s
o
l
(

e
m
o
c
n
i

t
e
N

k
c
o
t
s

n
o
m
m
o
c

f
o

e
c
n
a
u
s
s
i

m
o
r
f

s
d
e
e
c
o
r
p

t
e
N

e
v
i
t
a
l
u
m
u
c

f
o

e
c
n
a
u
s
s
i

m
o
r
f

s
d
e
e
c
o
r
p

t
e
N

k
c
o
t
s

d
e
r
r
e
f
e
r
p

l
a
u
t
e
p
r
e
p

e
l
b
a
m
e
e
d
e
r

t
e
n

,
s
d
r
a
w
a

k
c
o
t
s
d
e
t
c
i
r
t
s
e
R

e
t
a
t
s
e

l
a
e
r

d
e
r
i
u
q
c
a

n
i

t
s
e
r
e
t
n
i
g
n
i
l
l
o
r
t
n
o
c
n
o
N

y
t
i
t
n
e

s
t
i
n
u

p
i
h
s
r
e
n
t
r
a
p

g
n
i
t
a
r
e
p
o
f
o
n
o
i
t
p
m
e
d
e
R

s
r
e
n
t
r
a
P
e
r
u
t
n
e
V

t
n
i
o
J

o
t

s
n
o
i
t
u
b
i
r
t
s
i
D

k
c
o
t
s

d
e
r
r
e
f
e
r
p

n
o
d
e
r
a
l
c
e
d

s
d
n
e
d
i
v
i
D

s
t
s
e
r
e
t
n
i

g
n
i
l
l
o
r
t
n
o
c
n
o
n

f
o

s
n
o
i
t
i
s
i
u
q
c
A

h
s
a
c

r
o
f

s
n
o
i
t
i
s
i
u
q
c
A

F-8

n
o
m
m
o
c

n
o

d
e
r
a
l
c
e
d

s
n
o
i
t
u
b
i
r
t
s
i
d
d
n
a

s
d
n
e
d
i
v
i
D

s
t
i
n
u
d
n
a

s
e
r
a
h
s

t
e
n

o
t

d
e
i
f
i
s
s
a
l
c
e
r

s
e
s
s
o
l

e
g
d
e
h
w
o
l
f

h
s
a
c

d
e
z
i
l
a
e
R

e
m
o
c
n
i

s
n
i
a
g

e
g
d
e
h
w
o
l
f

h
s
a
c

d
e
z
i
l
a
e
r
n
U

0
2
0
2

,

1
3
r
e
b
m
e
c
e
D

,
e
c
n
a
l
a
B

)
s
s
o
l
(

e
m
o
c
n
i

t
e
N

k
c
o
t
s

n
o
m
m
o
c

f
o

e
c
n
a
u
s
s
i

m
o
r
f

s
d
e
e
c
o
r
p

t
e
N

t
e
n

,
s
d
r
a
w
a

k
c
o
t
s
d
e
t
c
i
r
t
s
e
R

e
t
a
t
s
e

l
a
e
r

d
e
r
i
u
q
c
a

n
i

t
s
e
r
e
t
n
i
g
n
i
l
l
o
r
t
n
o
c
n
o
N

y
t
i
t
n
e

l
a
e
r

n
i

t
s
e
r
e
t
n
i

g
n
i
l
l
o
r
t
n
o
c
n
o
n

f
o

s
n
o
i
t
i
s
i
u
q
c
A

s
e
i
t
i
t
n
e

e
t
a
t
s
e

s
t
i
n
u

p
i
h
s
r
e
n
t
r
a
p

g
n
i
t
a
r
e
p
o
f
o
n
o
i
t
p
m
e
d
e
R

s
r
e
n
t
r
a
P
e
r
u
t
n
e
V

t
n
i
o
J

o
t

s
n
o
i
t
u
b
i
r
t
s
i
D

k
c
o
t
s

d
e
r
r
e
f
e
r
p

n
o
d
e
r
a
l
c
e
d

s
d
n
e
d
i
v
i
D

n
o
m
m
o
c

n
o

d
e
r
a
l
c
e
d

s
n
o
i
t
u
b
i
r
t
s
i
d
d
n
a

s
d
n
e
d
i
v
i
D

s
t
i
n
u
d
n
a

s
e
r
a
h
s

e
v
i
t
a
l
u
m
u
c

f
o

e
c
n
a
u
s
s
i

m
o
r
f

s
d
e
e
c
o
r
p

t
e
N

k
c
o
t
s

d
e
r
r
e
f
e
r
p

l
a
u
t
e
p
r
e
p

e
l
b
a
m
e
e
d
e
r

—

—

5
8
0
,
1
7
1

s
n
i
a
g

e
g
d
e
h
w
o
l
f

h
s
a
c

d
e
z
i
l
a
e
r
n
U

1
2
0
2

,

1
3
r
e
b
m
e
c
e
D

,
e
c
n
a
l
a
B

)
s
s
o
l
(

e
m
o
c
n
i

t
e
N

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
)
0
0
8
(

9
2
0
,
3

9
5
1
,
5
6

5
6
0
,
3
2

)
0
3
1
(

)
1
0
4
,
5
(

)
2
4
7
,
5
(

)
8
4
5
,
1
1
(

—

—

—

—

)
7
8
1
(

—

—

)
4
4
2
(

—

—

)
2
4
7
,
5
(

7

—

—

)
0
2
6
(

9
2
0
,
3

9
5
1
,
5
6

5
6
0
,
3
2

—

—

4
1
1

)
1
0
4
,
5
(

)
8
4
5
,
1
1
(

)
5
1
7
,
8
4
(

—

—

—

—

—

—

—

—

)
1
2
6
(

1

—

—

—

—

—

—

)
8
4
5

,

1
1
(

)
5
1
7

,

8
4
(

—

7
2
0
3

,

4
1
1
5
6

,

—

4
1
1

)
1
0
4
5
(

,

—

—

—

—

5
4

2

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

t
e
n

o
t

d
e
i
f
i
s
s
a
l
c
e
r

s
e
s
s
o
l

e
g
d
e
h
w
o
l
f

h
s
a
c

d
e
z
i
l
a
e
R

e
m
o
c
n
i

k
c
o
t
s

n
o
m
m
o
c

f
o

e
c
n
a
u
s
s
i

m
o
r
f

s
d
e
e
c
o
r
p

t
e
N

t
e
n

,
s
d
r
a
w
a

k
c
o
t
s
d
e
t
c
i
r
t
s
e
R

e
t
a
t
s
e

l
a
e
r

d
e
r
i
u
q
c
a

n
i

t
s
e
r
e
t
n
i
g
n
i
l
l
o
r
t
n
o
c
n
o
N

y
t
i
t
n
e

l
a
e
r

n
i

t
s
e
r
e
t
n
i

g
n
i
l
l
o
r
t
n
o
c
n
o
n

f
o

s
n
o
i
t
i
s
i
u
q
c
A

s
e
i
t
i
t
n
e

e
t
a
t
s
e

s
t
i
n
u

p
i
h
s
r
e
n
t
r
a
p

g
n
i
t
a
r
e
p
o
f
o
n
o
i
t
p
m
e
d
e
R

s
r
e
n
t
r
a
P
e
r
u
t
n
e
V

t
n
i
o
J

o
t

s
n
o
i
t
u
b
i
r
t
s
i
D

k
c
o
t
s

d
e
r
r
e
f
e
r
p

n
o
d
e
r
a
l
c
e
d

s
d
n
e
d
i
v
i
D

n
o
m
m
o
c

n
o

d
e
r
a
l
c
e
d

s
n
o
i
t
u
b
i
r
t
s
i
d
d
n
a

s
d
n
e
d
i
v
i
D

s
t
i
n
u
d
n
a

s
e
r
a
h
s

)
9
5
5
,
3
6
(

)
4
4
8
,
4
1
(

—

4
1
0
,
4
0
9

$

9
0
5
,
2
3
2

$

5
5
0
,
4
2

$

0
5
4
,
7
4
6

$

9
7
6

,

4
1

$

)
5
7
8
6
2
1
(

,

$

4
8
8
7
8
5

,

$

7
7
6

$

5
8
0
,
1
7
1

$

2
2
0
2

,

1
3
r
e
b
m
e
c
e
D

,
e
c
n
a
l
a
B

t
n
a
c
i
f
i
n
g
i
S
—

2

e
t
o
N
—

s
t
n
e
m
e
t
a
t
S
l
a
i
c
n
a
n
i
F
"

e
e
S

.
0
2
0
2

f
o
r
e
t
r
a
u
q

t
s
r
i
f

e
h
t
n
i
d
r
a
d
n
a
t
s

)
"
L
C
E
C
"
(

s
e
s
s
o
L

t
i
d
e
r
C
d
e
t
c
e
p
x
E

t
n
e
r
r
u
C
w
e
n
e
h
t
o
t

d
e
t
a
l
e
r

s
t
n
e
m
t
s
u
j
d
a

t
c
e
f
f
e

e
v
i
t
a
l
u
m
u
c

d
e
d
r
o
c
e
r

y
n
a
p
m
o
C
e
h
T
)
1
(

.

n
o
i
t
a
m
r
o
f
n
i

l
a
n
o
i
t
i
d
d
a

r
o
f

"
s
t
n
e
m
e
c
n
u
o
n
o
r
P
g
n
i
t
n
u
o
c
c
A

t
n
e
c
e
R
—

s
e
i
c
i
l
o
P
g
n
i
t
n
u
o
c
c
A

.
s
t
n
e
m
e
t
a
t
S

l
a
i
c
n
a
n
i
F
d
e
t
a
d
i
l
o
s
n
o
C
o
t

s
e
t
o
N
e
e
S

F-9

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ARMADA HOFFLER PROPERTIES, INC. 
Consolidated Statements of Cash Flows  
(In thousands)

OPERATING ACTIVITIES
Net income

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation of buildings and tenant improvements

Amortization of leasing costs, in-place lease intangibles and below market ground 
rents - operating leases
Accrued straight-line rental revenue

Amortization of leasing incentives and above or below-market rents
Amortization of right-of-use assets - finance leases

Accrued straight-line ground rent expense
Unrealized credit loss provision (release)

Adjustment for uncollectable lease accounts
Noncash stock compensation

Impairment charges
Noncash interest expense
Noncash loss on extinguishment of debt
Gain on real estate dispositions, net
Change in the fair value of derivatives and other

Changes in operating assets and liabilities:

Property assets
Property liabilities
Construction assets
Construction liabilities
Interest receivable

Net cash provided by operating activities

INVESTING ACTIVITIES
Development of real estate investments
Tenant and building improvements
Acquisitions of real estate investments, net of cash received
Dispositions of real estate investments, net of selling costs
Notes receivable issuances
Notes receivable paydowns
Leasing costs
Leasing incentives
Contributions to equity method investments
Net cash used for investing activities

FINANCING ACTIVITIES
Proceeds from issuance of cumulative redeemable perpetual preferred stock, net
Proceeds from issuance of common stock, net
Common shares tendered for tax withholding
Debt issuances, credit facility and construction loan borrowings
Debt and credit facility repayments, including principal amortization
Debt issuance costs
Cash paid on extinguishment of debt
Acquisition of NCI in consolidated RE investments
Redemption of operating partnership units

Distributions to noncontrolling interests

Contributions from noncontrolling interests

Dividends and distributions

Net cash used for financing activities

Net increase (decrease) in cash, cash equivalents, and restricted cash
Cash, cash equivalents, and restricted cash, beginning of period (1)
Cash, cash equivalents, and restricted cash, end of period (1)

F-10

YEARS ENDED DECEMBER 31, 

2022

2021

2020

$ 

99,953  $ 

25,455  $ 

36,959 

54,548 

18,426 
(6,178) 

(1,070) 
1,110 

119 
626 

515 
3,273 

416 
6,828 
3,374 
(53,466) 
(8,698) 

(12,029) 
2,960 
(60,756) 
71,642 
(4,735) 
116,858 

(76,182) 
(17,085) 
(119,739) 
252,270 
(37,791) 
35,848 
(7,640) 
(51)
(62,872) 
(33,242) 

— 
65,159 
(774)
678,574 
(723,739) 
(8,316) 
— 
(4,651) 
(130)

(5,756) 

14 

(72,575) 

(72,194) 

11,422 

40,443 

51,549 

17,304 
(4,938) 

(1,065) 
1,022 

236 
(792)

945 
2,230 

21,378 
2,878 
3,810 
(19,040) 
(2,182) 

(3,721) 
7,175 
19,284 
(27,904) 
(2,440) 
91,184 

(48,625) 
(15,496) 
(73,595) 
85,322 
(30,656) 
42,301 
(4,585) 
(688)
(11,607) 
(57,629) 

— 
51,677 
(553)
161,806 
(187,758) 
(2,831) 
(3,417) 
(804)
(2,949)

— 

— 

(58,713) 

(43,542) 

(9,987) 

50,430 

$ 

51,865  $ 

40,443  $ 

43,671 

16,301 
(5,927) 

(814) 
586 

100 
256 

3,842 
2,378 

666 
2,204 
— 
(6,388) 
1,130 

(5,960) 
6,677 
(2,302) 
13,708 
(15,908) 
91,179 

(63,485) 
(10,077) 
(35,151) 
96,459 
(24,484) 
16,340 
(3,425) 
(1,326) 
(1,078) 
(26,227) 

101,460 
19,650 
(569) 
176,619 
(299,318) 
(609) 
— 
(5,002)
(2,729) 

— 

— 

(47,603) 

(58,101) 

6,851 

43,579 

50,430 

ARMADA HOFFLER PROPERTIES, INC. 
Consolidated Statements of Cash Flows (Continued) 
(In thousands)

Supplemental cash flow information:

Cash paid for interest

Cash refunded (paid) for income taxes

Increase (decrease) in dividends and distributions payable

Other liability issued in acquisition of noncontrolling interest in real estate investment

Common shares and OP units issued for acquisitions

Increase (decrease) in accrued capital improvements and development costs

Operating Partnership units redeemed for common shares

Note payable recorded for mandatorily redeemable partnership interest

Debt assumed at fair value in conjunction with real estate purchases

Note receivable extinguished in conjunction with real estate purchase

Equity method investment redeemed for a note receivable

Noncontrolling interest in acquired real estate entity

Note payable issued in acquisition of noncontrolling interest in real estate investment

Recognition of operating lease right-of-use assets

Recognition of operating lease liabilities

Recognition of finance lease right-of-use assets

Recognition of finance lease liabilities

De-recognition of operating lease ROU assets - lease termination

De-recognition of operating lease liabilities - lease termination

YEARS ENDED DECEMBER 31, 

2022

2021

2020

$ 

29,878  $ 

29,237  $ 

(1)

2,532 

750 

— 

110 

132 

— 

156,071 

— 

3,772 

23,065 

— 

110 

110 

— 

— 

— 

— 

4 

5,492 

— 

— 

15,111 

411 

— 

19,989 

— 

— 

— 

— 

— 

— 

24,466 

27,940 

9,037 

10,143 

28,554 

167 

(5,724) 

— 

6,099 

(14,324) 

8,866 

3,829 

122,300 

42,270 

— 

— 

6,130 

— 

— 

— 

— 

— 

— 

(1) The following table sets forth the items from the Company's consolidated balance sheets that are included in cash, cash equivalents, and restricted cash in 
the consolidated statements of cash flows:

Cash and cash equivalents

Restricted cash (a)

Cash, cash equivalents, and restricted cash

As of December 31,

2022

2021

$ 

$ 

48,139  $ 

3,726 

51,865  $ 

35,247 

5,196 

40,443 

(a) Restricted cash represents amounts held by lenders for real estate taxes, insurance, and reserves for capital improvements.

See Notes to Consolidated Financial Statements.

F-11

ARMADA HOFFLER PROPERTIES, INC. 
Notes to Consolidated Financial Statements  

1.

Business and Organization

Armada Hoffler Properties, Inc. (the "Company") is a full-service real estate company with extensive experience
developing, building, owning, and managing high-quality, institutional-grade office, retail, and multifamily properties
in attractive markets primarily throughout the Mid-Atlantic and Southeastern United States.

The Company is a real estate investment trust ("REIT"), the sole general partner of Armada Hoffler, L.P. (the
"Operating Partnership"), and as of December 31, 2022, owned 76.7% of the economic interest in the Operating
Partnership, of which 0.1% is held as general partnership units. The operations of the Company are carried on
primarily through the Operating Partnership and the wholly-owned subsidiaries of the Operating Partnership. Both the
Company and the Operating Partnership were formed on October 12, 2012 and commenced operations upon
completion of the underwritten initial public offering of shares of the Company’s common stock (the "IPO") and
certain related formation transactions on May 13, 2013.

As of December 31, 2022, the Company's operating portfolio consisted of the following properties:

Property

4525 Main Street

Armada Hoffler Tower

Brooks Crossing Office

Constellation Office
One City Center

One Columbus

Thames Street Wharf

Two Columbus
Wills Wharf

249 Central Park Retail

Apex Entertainment

Broad Creek Shopping Center

Broadmoor Plaza

Brooks Crossing Retail
Columbus Village

Columbus Village II

Commerce Street Retail

Delray Beach Plaza

Dimmock Square

Fountain Plaza Retail

Greenbrier Square

Greentree Shopping Center

Hanbury Village

Harrisonburg Regal

Lexington Square

Market at Mill Creek
Marketplace at Hilltop
Nexton Square
North Hampton Market
North Pointe Center

Location
Virginia Beach, Virginia*

Virginia Beach, Virginia*

Newport News, Virginia

Baltimore, Maryland**
Durham, North Carolina

Virginia Beach, Virginia*

Baltimore, Maryland**

Virginia Beach, Virginia*
Baltimore, Maryland**

Virginia Beach, Virginia*

Virginia Beach, Virginia*

Norfolk, Virginia

South Bend, Indiana

Newport News, Virginia
Virginia Beach, Virginia*

Virginia Beach, Virginia*

Virginia Beach, Virginia*

Delray Beach, Florida

Colonial Heights, Virginia

Virginia Beach, Virginia*

Chesapeake, Virginia

Chesapeake, Virginia

Chesapeake, Virginia

Harrisonburg, Virginia

Lexington, South Carolina

Mount Pleasant, South Carolina
Virginia Beach, Virginia
Summerville, South Carolina
Taylors, South Carolina
Durham, North Carolina

Segment
Office

Office

Office

Office
Office

Office

Office

Office
Office

Retail

Retail

Retail

Retail

Retail
Retail

Retail

Retail

Retail

Retail

Retail

Retail

Retail

Retail

Retail

Retail

Retail
Retail
Retail
Retail
Retail

F-12

(1)

(2)

Ownership 
Interest
100%

100%

100%

79%
100%

100%

100%

100%
100%

100%

100%

100%

100%

65%
100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%
100%
100%
100%
100%

Property

Overlook Village
Parkway Centre
Parkway Marketplace
Patterson Place
Pembroke Square
Perry Hall Marketplace
Premier Retail
Providence Plaza
Red Mill Commons
Sandbridge Commons
South Retail
South Square
Southgate Square
Southshore Shops
Studio 56 Retail
Tyre Neck Harris Teeter
Wendover Village
1305 Dock Street
1405 Point
Edison Apartments
Encore Apartments
Gainesville Apartments
Greenside Apartments
Liberty Apartments

Premier Apartments

Smith’s Landing

The Cosmopolitan

Segment

Retail
Retail
Retail
Retail
Retail
Retail
Retail
Retail
Retail
Retail
Retail
Retail
Retail
Retail
Retail
Retail
Retail
Multifamily
Multifamily
Multifamily
Multifamily
Multifamily
Multifamily
Multifamily

Multifamily

Multifamily

Multifamily

Location

Asheville, North Carolina
Moultrie, Georgia
Virginia Beach, Virginia
Durham, North Carolina
Virginia Beach, Virginia*
Perry Hall, Maryland
Virginia Beach, Virginia*
Charlotte, North Carolina
Virginia Beach, Virginia
Virginia Beach, Virginia
Virginia Beach, Virginia*
Durham, North Carolina
Colonial Heights, Virginia
Chesterfield, Virginia
Virginia Beach, Virginia*
Portsmouth, Virginia
Greensboro, North Carolina
Baltimore, Maryland**
Baltimore, Maryland**
Richmond, Virginia
Virginia Beach, Virginia*
Gainesville, Georgia
Charlotte, North Carolina
Newport News, Virginia

Virginia Beach, Virginia*

Blacksburg, Virginia

Virginia Beach, Virginia*

Ownership 
Interest

100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
79%
100%
100%
100%
100%
100%
100%

100%

100%

100%

(1)

________________________________________

* Located in the Town Center of Virginia Beach

** Located at Harbor Point in Baltimore
(1) The Company owned a 90% economic interest in this property, including an 11% economic interest through a note receivable as of 
December 31, 2022. In January 2023 the Company acquired the additional 11% membership interest in the property in exchange for full 
satisfaction of $12.8 million note. 
(2) The Company is entitled to a preferred return on its investment in this property.

As of December 31, 2022, the following properties were under development, redevelopment or not yet stabilized:

Property

Chronicle Mill

Southern Post

Segment

Multifamily

Mixed-use

Location

Belmont, North Carolina

Roswell, Georgia

________________________________________
(1) We are entitled to a preferred return on our joint investment in this property.

Ownership 
Interest

(1)

85%

100%

2. 

Significant Accounting Policies

Basis of Presentation

The accompanying consolidated financial statements were prepared in accordance with accounting principles generally 
accepted in the United States ("GAAP").

F-13

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The consolidated financial statements include the financial position and results of operations of the Company, the 
Operating Partnership, its wholly owned subsidiaries, and any interests in variable interest entities ("VIEs") where the 
Company has been determined to be the primary beneficiary. All significant intercompany transactions and balances 
have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and 
assumptions that affect the amounts reported and disclosed. Such estimates are based on management’s historical 
experience and best judgment after considering past, current, and expected events and economic conditions. Actual 
results could differ from management’s estimates.

Segments

Segment information is prepared on the same basis that management reviews information for operational decision-
making purposes. Management evaluates the performance of each of the Company’s properties individually and 
aggregates such properties into segments based on their economic characteristics and classes of tenants. The Company 
operates in four business segments: (i) office real estate, (ii) retail real estate, (iii) multifamily residential real estate, 
and (iv) general contracting and real estate services. The Company’s general contracting and real estate services 
business develops and builds properties for its own account and also provides construction and development services 
to both related and third parties.

Reclassifications 

Certain amounts previously reported in the consolidated financial statements have been reclassified in the 
accompanying consolidated financial statements to conform to the current period's presentation. These reclassifications 
had no effect on net income or stockholders' equity as previously reported.

Revenue Recognition

Rental Revenues

The Company leases its properties under operating leases and recognizes base rents when earned on a straight-line 
basis over the lease term. Rental revenues include $6.2 million, $4.9 million and $5.9 million of straight-line rent 
adjustments for the years ended December 31, 2022, 2021, and 2020, respectively. The Company begins recognizing 
rental revenue when the tenant has the right to take possession of or controls the physical use of the property under 
lease. The extended collection period for accrued straight-line rental revenue along with the Company’s evaluation of 
tenant credit risk may result in the nonrecognition of all or a portion of straight-line rental revenue until the collection 
of substantially all such revenue for a tenant is probable. The Company recognizes contingent rental revenue (e.g., 
percentage rents based on tenant sales thresholds) when the sales thresholds are met. The Company recognizes leasing 
incentives as reductions to rental revenue on a straight-line basis over the lease term. Leasing incentive amortization 
was $0.7 million for each of the years ended December 31, 2022, 2021 and 2020. The Company recognizes fair value 
adjustments recorded at the time of lease assumption in rental income on a straight-line basis as a reduction to revenue 
over the remaining life of the lease or any renewal periods for which the Company determines have value at the time 
of acquisition. The Company recognizes cost reimbursement revenue for real estate taxes, operating expenses, and 
common area maintenance costs on an accrual basis during the periods in which the expenses are incurred. The 
Company recognizes lease termination fees either upon termination or amortizes them over any remaining lease term. 

General Contracting and Real Estate Services Revenues

The Company recognizes general contracting revenues as a customer obtains control of promised goods or services in 
an amount that reflects the consideration the Company expects to receive in exchange for those goods or services. For 
each construction contract, the Company identifies the performance obligations, which typically include the delivery 
of a single building constructed according to the specifications of the contract. The Company estimates the total 
transaction price, which generally includes a fixed contract price and may also include variable components such as 
early completion bonuses, liquidated damages, or cost savings to be shared with the customer. Variable components of 
the contract price are included in the transaction price to the extent that it is probable that a significant reversal of 
revenue will not occur. The Company recognizes the estimated transaction price as revenue as it satisfies its 
performance obligations; the Company estimates its progress in satisfying performance obligations for each contract 

F-14

using the input method, based on the proportion of incurred costs relative to total estimated construction costs at 
completion. Construction contract costs include all direct material, direct labor, subcontract costs, and overhead costs 
directly related to contract performance. Changes in job performance, job conditions, and estimated profitability, 
including those arising from contract penalty provisions and final contract settlements, are all significant judgments 
that may result in revisions to costs and income and are recognized in the period in which they are determined. 
Additionally, the estimated costs at completion are affected by management’s forecasts of anticipated costs to be 
incurred and contingency reserves for exposures related to unknown costs, such as design deficiencies and 
subcontractor defaults. The estimated variable consideration is also affected by claims and unapproved change orders, 
which may result from changes in the scope of the contract. Provisions for estimated losses on uncompleted contracts 
are recognized immediately in the period in which such losses are determined. The Company defers pre-contract costs 
when such costs are directly associated with specific anticipated contracts and their recovery is probable.

The Company recognizes real estate services revenues from property development and management as it satisfies its 
performance obligations under these service arrangements. 

The Company assesses whether multiple contracts with a single counterparty may be combined into a single contract 
for the revenue recognition purposes based on factors such as the timing of the negotiation and execution of the 
contracts and whether the economic substance of the contracts was contemplated separately or in tandem.

Real Estate Investments

Income producing property primarily includes land, buildings, and tenant improvements and is stated at cost. Real 
estate investments held for development include land. The Company reclassifies real estate investments held for 
development to construction in progress upon commencement of construction. Construction in progress is stated at 
cost. Direct and certain indirect costs clearly associated with the development, redevelopment, construction, leasing, or 
expansion of real estate assets are capitalized as a cost of the property. Repairs and maintenance costs are expensed as 
incurred.

The Company capitalizes direct and indirect project costs associated with the initial development of a property until 
the property is substantially complete and ready for its intended use. Capitalized project costs include pre-acquisition, 
development, and preconstruction costs including overhead, salaries, and related costs of personnel directly involved, 
real estate taxes, insurance, utilities, ground rent, and interest. Interest capitalized during the years ended December 31, 
2022, 2021, and 2020 was $4.0 million, $1.5 million and $3.6 million, respectively. 

The Company capitalizes predevelopment costs directly identifiable with specific properties when the development of 
such properties is probable. Capitalized predevelopment costs are presented within other assets in the consolidated 
balance sheets. Land for which development activities have not yet commenced are presented separately as land held 
for development in the consolidated balance sheets. Capitalized predevelopment costs as of December 31, 2022 and 
2021 were $8.0 million and $8.3 million, respectively. Costs attributable to unsuccessful projects are expensed.

Income producing property is depreciated on a straight-line basis over the following estimated useful lives:

Buildings
Capital improvements
Equipment
Tenant improvements

Operating Property Acquisitions

39 years
5—20 years
3—7 years
Term of the related lease (or estimated useful life, if shorter)

Acquisitions of operating properties have been and will generally be accounted for as acquisitions of a group of assets, 
with costs incurred to effect an acquisition, including title, legal, accounting, brokerage commissions, and other related 
costs, being capitalized as part of the cost of the assets acquired. In connection with such acquisitions, the Company 
identifies and recognizes all assets acquired and liabilities assumed at their relative fair values as of the acquisition 
date. The purchase price allocations to tangible assets, such as land, site improvements, and buildings and 
improvements are presented within income producing property in the consolidated balance sheets and depreciated over 
their estimated useful lives. Acquired lease intangible assets are presented as a separate component of assets on the 
consolidated balance sheets. Acquired lease intangible liabilities are presented within other liabilities in the 
consolidated balance sheets. The Company amortizes in-place lease assets as depreciation and amortization expense on 

F-15

 
 
 
 
 
 
 
a straight-line basis over the remaining term of the related leases. The Company amortizes above-market lease assets 
as reductions to rental revenues on a straight-line basis over the remaining term of the related leases. The Company 
amortizes below-market lease liabilities as increases to rental revenues on a straight-line basis over the remaining term 
of the related leases. The Company amortizes below-market ground lease assets as increases to amortization of right-
of-use assets - finance leases expense on a straight-line basis over the remaining term of the related leases. Conversely, 
the Company amortizes above-market ground lease assets as decreases to amortization of right-of-use assets - finance 
leases expense on a straight-line basis over the remaining term of the related leases.

The Company values land based on a market approach, looking to recent sales of similar properties, adjusting for 
differences due to location, the state of entitlement, as well as the shape and size of the parcel. Improvements to land 
are valued using a replacement cost approach. The approach applies industry standard replacement costs adjusted for 
geographic specific considerations and reduced by estimated depreciation. The value of buildings acquired is estimated 
using the replacement cost approach, assuming the buildings were vacant at acquisition. The replacement cost 
approach considers the composition of the structures acquired, adjusted for an estimate of depreciation. The estimate 
of depreciation is made considering industry standard information and depreciation curves for the identified asset 
classes. The value of acquired lease intangibles considers the estimated cost of leasing the properties as if the acquired 
buildings were vacant, as well as the value of the current leases relative to market-rate leases. The in-place lease value 
is determined using an estimated total lease-up time and lost rental revenues during such time. The value of current 
leases relative to market-rate leases is based on market rents obtained for comparable leases. Given the significance of 
unobservable inputs used in the valuation of acquired real estate assets, the Company classifies them as Level 3 inputs 
in the fair value hierarchy.

The Company values debt assumed in connection with operating property acquisitions based on a discounted cash flow 
analysis of the expected cash flows of the debt. Such analysis considers the contractual terms of the debt, including the 
period to maturity, credit characteristics, and other terms of the arrangements, which are Level 3 inputs in the fair 
value hierarchy. 

Real Estate Sales

The Company accounts for the sale of real estate assets and any related gain in accordance with the accounting 
guidance applicable to sales of real estate, which establishes standards for recognition of profit on all real estate sales 
transactions other than retail land sales. The Company recognizes the sale and associated gain or loss once it transfers 
control of the real estate asset and the Company does not have significant continuing involvement.

Real Estate Investments Held for Sale

Real estate assets classified as held for sale are reported at the lower of their carrying value or their fair value, less 
estimated costs to sell. Once a property is classified as held for sale, it is no longer depreciated. A property is classified 
as held for sale when: (i) senior management commits to a plan to sell the property, (ii) the property is available for 
immediate sale in its present condition, subject only to conditions usual and customary for such sales, (iii) an active 
program to locate a buyer and other actions required to complete the plan to sell have been initiated, (iv) the sale is 
expected to be completed within one year, (v) the property is being actively marketed for sale at a price that is 
reasonable in relation to its current fair value, and (vi) actions required to complete the plan indicate that it is unlikely 
that significant changes to the plan will be made or that the plan will be withdrawn.

As of December 31, 2022, no properties were classified as held for sale. As of December 31, 2021, Hoffler Place and 
Summit Place were classified as held for sale.

Impairment of Long-Lived Assets

The Company evaluates its real estate assets for impairment on a property-by-property basis whenever events or 
changes in circumstances indicate that their carrying amounts may not be recoverable. If such an evaluation is 
necessary, the Company compares the carrying amount of any such real estate asset with the undiscounted expected 
future cash flows that are directly associated with, and that are expected to arise as a direct result of, its use and 
eventual disposition. If the carrying amount of a real estate asset exceeds the associated estimate of undiscounted 
expected future cash flows, an impairment loss is recognized to reduce the real estate asset’s carrying value to its fair 
value. The impairment charges recognized during the years ended December 31, 2022 and December 31, 2020 
represent unamortized leasing or acquired intangible assets related to vacated tenants. The impairment charges 
recognized during the year ended December 31, 2021 primarily relate to the $3.0 million impairment of Socastee 

F-16

Commons, which was sold during the year ended December 31, 2021, and the $18.3 million impairment of Hoffler 
Place and Summit Place, which were classified as held for sale as of December 31, 2021. 

Interest Income

Interest income on notes receivable is accrued based on the contractual terms of the loans and when it is deemed 
collectible. Many loans provide for accrual of interest and fees that will not be paid until maturity of the loan. Interest 
is recognized on these loans at the accrual rate subject to the determination that accrued interest and fees are ultimately 
collectible, based on the underlying collateral and the status of development activities, as applicable. If this 
determination cannot be made, recognition of interest income may be fully or partially deferred until it is ultimately 
paid.

Cash and Cash Equivalents

Cash and cash equivalents include demand deposits, investments in money market funds, and investments with an 
original maturity of three months or less.

Restricted Cash

Restricted cash represents amounts held by lenders for real estate taxes, insurance, and reserves for capital 
improvements. 

Accounts Receivable, net

Accounts receivable include amounts from tenants for base rents, contingent rents, and cost reimbursements as well as 
accrued straight-line rental revenue. As of December 31, 2022 and 2021, accrued straight-line rental revenue presented 
within accounts receivable in the consolidated balance sheets was $30.2 million and $24.7 million, respectively.

The Company’s evaluation of the collectability of accounts receivable and the adequacy of the allowance for doubtful 
accounts is based primarily upon evaluations of individual accounts receivable, current economic conditions, historical 
experience, and other relevant factors. The Company establishes a reserve for any receivable associated with a tenant 
when collection of substantially all operating lease payments for a tenant is not probable. As of December 31, 2022 
and 2021, the allowance for doubtful accounts was $1.5 million and $0.4 million, respectively. The Company reflects 
these amounts as a component of rental income on the consolidated statements of comprehensive income. 

Notes Receivable and Allowance for Loan Losses

Notes receivable primarily represent financing to third parties in the form of mezzanine loans or preferred equity 
investments for the development of new real estate. The Company's mezzanine loans are typically made to borrowers 
who have little or no equity in the underlying development projects. Mezzanine loans are secured, in part, by pledges 
of ownership interests of the entities that own the underlying real estate. The loans generally have junior liens on the 
respective real estate projects. 

The Company’s allowance for loan losses on notes receivable is evaluated using risk ratings that correspond to 
probabilities of default and loss given default. Risk ratings are determined for each loan after consideration of progress 
of development activities, including leasing activities, projected development costs, and current and projected 
mezzanine and senior loan balances. The Company's risk ratings are as follows: 

•

•

•

Pass: loans in this category are adequately collateralized by a development project with conditions materially 
consistent with the Company's underwriting assumptions.
Special Mention: loans in this category show signs that the economic performance of the project may suffer as a 
result of slower-than-expected leasing activity or an extended development or marketing timeline. Loans in this 
category warrant increased monitoring by management.
Substandard: loans in this category may not be fully collected by the Company unless remediation actions are 
taken. Remediation actions may include obtaining additional collateral or assisting the borrower with asset 
management activities to prepare the project for sale. The Company will also consider placing the loan on 
nonaccrual status if it does not believe that additional interest accruals will ultimately be collected.

F-17

 
 
 
 
 
 
 
 
At the end of each reporting period, the Company measures expected credit losses to be incurred over the remaining 
contractual term based on the risk rating of each loan. If a loan is rated as substandard, the Company then estimates 
expected credit losses as the difference between the amortized cost basis of the outstanding loan and the estimated 
projected sales proceeds of the underlying collateral. Changes to the allowance for loan losses resulting from quarterly 
evaluations are recorded through provision for unrealized credit losses on the consolidated statements of 
comprehensive income. 

The Company's loans typically include commitments to fund incremental proceeds to the borrowers over the life of the 
loan, which future funding commitments are also subject to the CECL model. The CECL provision related to future 
loan fundings is recorded as a component of Other Liabilities on the Company's consolidated balance sheet. This 
provision is estimated using the same process outlined above for the Company's outstanding loan balances, and 
changes in this component of the provision will similarly impact the Company's consolidated net income. For both the 
funded and unfunded portions of the Company's loans, the Company consider the risk rating of each loan as the 
primary credit quality indicator underlying its assessment.

The Company places loans on nonaccrual status when the loan balance, together with the balance of any senior loans, 
approximately equals the estimated realizable value of the underlying development project.

Guarantees

The Company measures and records a liability for the fair value of its guarantees on a nonrecurring basis upon 
issuance using Level 3 internally-developed inputs. These guarantees typically relate to payments that could be 
required of the Company to senior lenders on its mezzanine loan investments. The Company bases its estimated fair 
value on the market approach, which compares the guarantee terms and credit characteristics of the underlying 
development project to other projects for which guarantee pricing terms are available. The offsetting entry for the 
guarantee liability is a premium on the related loan receivable. The liability is amortized on a straight-line basis over 
the remaining term of the loan. On a quarterly basis, the Company assesses the likelihood of a contingent liability in 
connection with these guarantees and will record an additional guarantee liability if the unamortized guarantee liability 
is insufficient. 

Leasing Costs

Commissions paid by the Company to third parties to originate a lease are deferred and amortized as depreciation and 
amortization expense on a straight-line basis over the term of the related lease. Leasing costs are presented within other 
assets in the consolidated balance sheets.

Leasing Incentives

Incentives paid by the Company to tenants are deferred and amortized as reductions to rental revenues on a straight-
line basis over the term of the related lease. Leasing incentives are presented within other assets in the consolidated 
balance sheets.

Debt Issuance Costs

Financing costs are deferred and amortized as interest expense using the effective interest method over the term of the 
related debt. Debt issuance costs are presented as a direct deduction from the carrying value of the associated debt 
liability in the consolidated balance sheets.

Derivative Financial Instruments

The Company may enter into interest rate derivatives to manage exposure to interest rate risks. The Company does not 
use derivative financial instruments for trading or speculative purposes. The Company recognizes derivative financial 
instruments at fair value and presents them within other assets and liabilities in the consolidated balance sheets. Gains 
and losses resulting from changes in the fair value of derivatives that are neither designated nor qualify as hedging 
instruments are recognized within the change in fair value of derivatives and other caption in the consolidated 
statements of comprehensive income. For derivatives that qualify as cash flow hedges, the gain or loss is reported as a 
component of other comprehensive income (loss) and reclassified into earnings in the periods during which the hedged 
forecasted transaction affects earnings.

F-18

For interest rate caps that qualify as cash flow hedges, the premium paid by the Company at inception represents the 
time value of the instrument and is excluded from the hedge effectiveness assessment. The excluded component is 
amortized over the life of the derivative instrument and presented within interest expense in the consolidated 
statements of comprehensive income. The Company recognized amortization of interest rate cap premiums of 
$3.8 million, $0.2 million and $0.2 million for the years ended December 31, 2022, 2021, and 2020, respectively.

Stock-Based Compensation

The Company measures the compensation cost of restricted stock awards based on the grant date fair value. The 
Company recognizes compensation cost for the vesting of restricted stock awards using the accelerated attribution 
method. Compensation cost associated with the vesting of restricted stock awards is presented within either general 
and administrative expenses or general contracting and real estate services expenses in the consolidated statements of 
comprehensive income. Stock-based compensation for personnel directly involved in the construction and 
development of a property is capitalized. The effect of forfeitures of awards is recorded as they occur. 

Income Taxes

The Company has elected to be taxed as a REIT for U.S. federal income tax purposes. For continued qualification as a 
REIT for federal income tax purposes, the Company must meet certain organizational and operational requirements, 
including a requirement to pay distributions to stockholders of at least 90% of annual taxable income, excluding net 
capital gains. As a REIT, the Company generally is not subject to income tax on net income distributed as dividends to 
stockholders. The Company is subject to state and local income taxes in some jurisdictions and, in certain 
circumstances, may also be subject to federal excise taxes on undistributed income. In addition, certain of the 
Company’s activities must be conducted by subsidiaries that have elected to be treated as a taxable REIT subsidiary 
("TRS") subject to both federal and state income taxes. The Operating Partnership conducts its development and 
construction businesses through the TRS. The related income tax provision or benefit attributable to the profits or 
losses of the TRS and any taxable income of the Company is reflected in the consolidated financial statements.

The Company uses the liability method of accounting for deferred income tax in accordance with GAAP. Under this 
method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary 
differences between the carrying value of existing assets and liabilities and their respective tax bases. Deferred tax 
assets and liabilities are measured using the statutory rates expected to be applied in the periods in which those 
temporary differences are settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized 
in the period of the change. A valuation allowance is recorded on the Company’s deferred tax assets when it is more 
likely than not that such assets will not be realized. When evaluating the realizability of the Company’s deferred tax 
assets, all evidence, both positive and negative, is evaluated. Items considered in this analysis include the ability to 
carry back losses, the reversal of temporary differences, tax planning strategies, and expectations of future earnings.  

Under GAAP, the amount of tax benefit to be recognized is the amount of benefit that is more likely than not to be 
sustained upon examination. Management analyzes its tax filing positions in the U.S. federal, state and local 
jurisdictions where it is required to file income tax returns for all open tax years. If, based on this analysis, 
management determines that uncertainties in tax positions exist, a liability is established. The Company recognizes 
accrued interest and penalties related to unrecognized tax positions in the provision for income taxes. If recognized, the 
entire amount of unrecognized tax positions would be recorded as a reduction to the provision for income taxes.

Discontinued Operations

Disposals representing a strategic shift that has or will have a major effect on the Company’s operations and financial 
results are reported as discontinued operations.

Net Income Per Share

The Company calculates net income per share based upon the weighted average shares outstanding. Diluted net 
income per share is calculated after giving effect to all significant potential dilutive shares outstanding during the 
period. Potential dilutive shares outstanding during the period include unvested restricted stock awards. However, 
there were no significant potential dilutive shares outstanding for each of the three years ended December 31, 2022, 
2021, and 2020. As a result, basic and diluted outstanding shares were the same for each period presented. 

F-19

 
 
 
 
 
 
 
 
 
 
Recent Accounting Pronouncements

Recently Adopted Accounting Standards:

Reference Rate Reform

In March 2020, the Financial Accounting Standards Board ("FASB") issued ASU 2020-04 Reference Rate Reform - 
Facilitation of the Effects of Reference Rate Reform on Financial Reporting (Topic 848), which became effective on 
March 12, 2020. ASU 2020-04 contained practical expedients for reference rate reform related activities that impact 
debt, leases, derivatives and other contracts. This Accounting Standards Update ("ASU") also provided optional 
expedients to enable companies to continue to apply hedge accounting to certain hedging relationships impacted by 
reference rate reform. Application of the guidance was optional and only available in certain situations. In January 
2021, FASB issued ASU No. 2021-01, Reference Rate Reform (Topic 848). The amendments in this standard were 
elective and principally applied to entities that have derivative instruments that use an interest rate for margining, 
discounting, or contract price alignment that is modified as a result of reference rate reform. Similar to ASU No. 
2020-04, provisions of this ASU were effective upon issuance. In December 2022, the FASB issued ASU 2022-06 
Deferral of the Sunset Date of Topic 848 which became effective immediately upon issuance. ASU 2022-06 deferred 
the sunset date of Topic 848 to December 31, 2024. During the year ended December 31, 2022, the Company elected 
to apply the practical expedients to modifications of qualifying contracts as continuations of the existing contracts 
rather than as new contracts. The adoption of the new guidance did not have a material impact on the consolidated 
financial statements.

Earnings Per Share

In August 2020, FASB issued ASU 2020-06 as an update to ASC Topic 470 and ASC Topic 815, which became 
effective January 1, 2022. ASU 2020-06 simplified the accounting for convertible instruments and removed certain 
settlement conditions that were required for equity contracts to qualify for the derivative scope exception. This ASU 
also simplified diluted earnings per share calculation in certain areas and provided updated disclosure requirements. 
The Company adopted ASU 2020-06 effective January 1, 2022 and the adoption did not have a material impact on the 
consolidated financial statements.

3.

Segments

Net operating income (segment revenues minus segment expenses) is the measure used by the Company’s chief
operating decision-maker to assess segment performance. Net operating income is not a measure of operating income
or cash flows from operating activities as measured by GAAP and is not indicative of cash available to fund cash
needs. As a result, net operating income should not be considered as an alternative to cash flows as a measure of
liquidity. Not all companies calculate net operating income in the same manner. The Company considers net operating
income to be an appropriate supplemental measure to net income because it assists both investors and management in
understanding the core operations of the Company’s real estate and construction businesses.

F-20

Net operating income of the Company’s reportable segments for the years ended December 31, 2022, 2021, and 2020 
was as follows (in thousands):

Office real estate

Rental revenues

Rental expenses

Real estate taxes

Segment net operating income

Retail real estate

Rental revenues

Rental expenses

Real estate taxes

Segment net operating income

Multifamily residential real estate

Rental revenues

Rental expenses

Real estate taxes

Segment net operating income

General contracting and real estate services

Segment revenues

Segment expenses

Segment gross profit

Net operating income

Years Ended December 31, 

2022

2021

2020

$ 

74,036  $ 

47,363  $ 

18,710 

7,625 

47,701 

86,344 

13,769 

8,873 

63,702 

58,914 

18,263 

5,559 

35,092 

234,859 

227,158 

7,701 

12,412 

6,112 

28,839 

78,572 

12,512 

8,416 

57,644 

66,205 

21,570 

7,324 

37,311 

91,936 

88,100 

3,836 

43,494 

10,799 

5,111 

27,584 

73,032 

11,029 

7,784 

54,219 

49,962 

17,132 

5,241 

27,589 

217,146 

209,472 

7,674 

$ 

154,196  $ 

127,630  $ 

117,066 

Rental expenses represent costs directly associated with the operation and management of the Company’s real estate 
properties. Rental expenses include asset management fees, property management fees, repairs and maintenance, 
insurance, and utilities.

General contracting and real estate services revenues for the years ended December 31, 2022, 2021, and 2020 exclude 
revenue related to intercompany construction contracts of $58.1 million, $27.8 million, and $26.6 million, respectively, 
as it is eliminated in consolidation. General contracting and real estate services expenses for the years ended 
December 31, 2022, 2021, and 2020 exclude expenses related to intercompany construction contracts of $57.5 million, 
$27.6 million, and $26.3 million, respectively, as it is eliminated in consolidation.

F-21

 
 
 
    
    
    
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The following table reconciles net operating income to net income for the years ended December 31, 2022, 2021, and 
2020 (in thousands):

Net operating income

Depreciation and amortization

Amortization of right-of-use assets - finance leases

General and administrative expenses

Acquisition, development and other pursuit costs

Impairment charges

Gain on real estate dispositions

Interest income

Interest expense

Loss on extinguishment of debt

Change in fair value of derivatives and other

Unrealized credit loss release (provision)

Other income (expense), net

Income tax benefit

Net income

Years Ended December 31, 

2022

2021

2020

$ 

154,196  $ 

127,630  $ 

117,066 

(72,974) 

(1,110) 

(15,691) 

(37)

(416)

53,466 

16,978 

(39,680) 

(3,374) 

8,698 

(626)

378 

145 

(68,853) 

(1,022) 

(14,610) 

(112)

(21,378)

19,040 

18,457 

(33,905) 

(3,810) 

2,182 

792

302 

742 

(59,972) 

(586) 

(12,905) 

(584) 

(666) 

6,388 

19,841 

(31,035) 

— 

(1,130) 

(256) 

515 

283 

$ 

99,953  $ 

25,455  $ 

36,959 

General and administrative expenses represent costs not directly associated with the operation and management of the 
Company’s real estate properties and general contracting and real estate services businesses. General and 
administrative expenses include corporate office personnel salaries and benefits, bank fees, accounting fees, legal fees, 
and other corporate office expenses. 

4.

Leases

Lessee Disclosures

As a lessee, the Company has eight ground leases on seven properties. These ground leases have maximum lease terms
(including renewal options) that expire between 2074 and 2117. The exercise of lease renewal options is at the
Company's sole discretion. The depreciable life of assets and leasehold improvements are limited by the expected lease
term. Five of these leases have been classified as operating leases and three of these leases have been classified as
finance leases. The Company's lease agreements do not contain any residual value guarantees or material restrictive
covenants.

The components of lease cost for the years ended December 31, 2022, 2021, and 2020 were as follows (in thousands):

Operating lease cost (a)
Finance lease cost:

Amortization of right-of-use assets (a)
Interest on lease liabilities

________________________________________
(a) Includes amortization of above & below-market ground lease intangible assets.

Years Ended December 31, 

2022

2021

2020

$ 

1,969  $ 

2,448  $ 

2,626 

1,110 

2,573 

1,022 

2,251 

586 

915 

F-22

The table below presents supplemental cash flow information related to leases during the years ended December 31, 
2022, 2021, and 2020 (in thousands):

Cash paid for amounts included in the measurement of lease liabilities

Operating cash flows from operating leases

Operating cash flows from finance leases

$ 

1,797  $ 

2,085  $ 

2,256 

1,986 

2,113 

864 

Years Ended December 31, 

2022

2021

2020

Additional information related to leases as of December 31, 2022 and 2021 were as follows:

Weighted Average Remaining Lease Term (years)

Operating leases

Finance leases

Weighted Average Discount Rate

Operating leases

Finance leases

December 31, 

2022

2021

35.8

42.7

 5.5 %

 5.7 %

36.7

43.7

 5.5 %

 5.7 %

The undiscounted cash flows to be paid on an annual basis for the next five years and thereafter are presented below. 
The total amount of lease payments, on an undiscounted basis, are reconciled to the lease liability, on the consolidated 
balance sheet by considering the present value discount.

Year Ending December 31,

2023
2024
2025
2026
2027
Thereafter
Total undiscounted cash flows

Present value discount

Discounted cash flows

Lessor Disclosures

Operating Leases

Finance Leases

(in thousands)

$ 

$ 

1,845  $ 
1,881 
1,897 
1,882 
1,890 
66,495 
75,890 
(44,213)   
31,677  $ 

2,311 
2,326 
2,363 
2,368 
2,391 
124,293 
136,052 
(89,575) 
46,477 

As a lessor, the Company leases its properties under operating leases and recognizes base rents on a straight-line basis 
over the lease term. The Company also recognizes revenue from tenant recoveries, through which tenants reimburse 
the Company on an accrual basis for certain expenses such as utilities, janitorial services, repairs and maintenance, 
security and alarms, parking lot and ground maintenance, administrative services, management fees, insurance, and 
real estate taxes. Rental revenues are reduced by the amount of any leasing incentives amortized on a straight-line 
basis over the term of the applicable lease. In addition, the Company recognizes contingent rental revenue (e.g., 
percentage rents based on tenant sales thresholds) when the sales thresholds are met. Many tenant leases include one or 
more options to renew, with renewal terms that can extend the lease term from one to 15 years or more. The exercise 
of lease renewal options is at the tenant's sole discretion. The Company includes a renewal period in the lease term 
only if it appears at lease inception that the renewal is reasonably certain.

Rental revenue for the years ended December 31, 2022, 2021, and 2020 comprised the following (in thousands):

F-23

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Base rent and tenant charges
Accrued straight-line rental adjustment
Lease incentive amortization
Below/(above) market lease amortization
Total rental revenue

Years Ended December 31, 

2022

2021

2020

$ 

$ 

212,046  $ 
6,178 
(684)
1,754 
219,294  $ 

186,137  $ 
4,938 
(660)
1,725 
192,140  $ 

159,747 
5,927 
(693) 
1,507 
166,488 

The Company's commercial tenant leases provide for minimum rental payments during each of the next five years and 
thereafter as follows (in thousands):

Year Ending December 31,
2023
2024
2025
2026
2027
Thereafter
Total

Operating Leases

$ 

$ 

124,838 
120,659 
110,981 
102,996 
91,857 
541,166 
1,092,497 

5.

Real Estate Investments and Equity Method Investments

The Company’s real estate investments comprised the following as of December 31, 2022 and 2021 (in thousands):

December 31, 2022

Income producing 
property

Held for 
development

Construction in 
progress

$ 

285,030  $ 

6,294  $ 

5,000  $ 

71,308 

1,527,876 

— 

— 

— 

— 

— 

— 

48,067 

Total

296,324 

71,308 

1,527,876 

48,067 

$ 

1,884,214  $ 

6,294  $ 

53,067  $ 

1,943,575 

December 31, 2021

Income producing 
property

Held for 
development

Construction in 
progress

$ 

256,728  $ 

6,294  $ 

12,513  $ 

65,565 

1,336,316 

— 

— 

— 

— 

— 

— 

60,022 

Total

275,535 

65,565 

1,336,316 

60,022 

$ 

1,658,609  $ 

6,294  $ 

72,535  $ 

1,737,438 

Land

Land improvements

Buildings and improvements

Development and construction costs

Real estate investments

Land

Land improvements

Buildings and improvements

Development and construction costs

Real estate investments

2022 Operating Property Acquisitions

Constellation Energy Building

On January 14, 2022, the Company acquired a 79% membership interest and an additional 11% economic interest in 
the partnership that owns the Constellation Energy Building (previously referred to as the "Exelon Building") for a 
purchase price of approximately $92.2 million in cash and a loan to the seller of $12.8 million. The Constellation 
Energy Building is a mixed-use structure located in Baltimore's Harbor Point and is comprised of an office building, 
the Constellation Office, that serves as the headquarters for Constellation Energy Corp., which was spun-off from 

F-24

Exelon, a Fortune 100 energy company, in February 2022, as well as a multifamily component, 1305 Dock Street. The 
Constellation Office includes a parking garage and retail space. The Constellation Energy Building was subject to a 
$156.1 million loan, which the Company immediately refinanced following the acquisition with a new $175.0 million 
loan. The new loan bears interest at a rate of the Bloomberg Short-Term Bank Yield Index ("BSBY") plus a spread of 
1.50% and will mature on November 1, 2026. This loan is hedged by an interest rate derivative of 1.00% and 3.00% as 
well as an interest rate cap of 4.00%. See Note 9 for further details. 

Pembroke Square

On November 4, 2022, the Company acquired a 124,000 square foot grocery-anchored shopping center in Virginia 
Beach, Virginia for a purchase price of $26.5 million plus capitalized acquisition costs of $0.2 million.

The following table summarizes the purchase price allocation (including acquisition costs) based on the relative fair 
value of the assets acquired for the three operating properties purchased during the year ended December 31, 2022 (in 
thousands):

Land
Site improvements
Building
In-place leases
Above-market leases
Below-market leases
Net assets acquired

Constellation 
Energy Building(1)

Pembroke Square

$ 

$ 

23,317  $ 
141 
194,916 
53,705 
306 
— 
272,385  $ 

14,513 
465 
8,825 
4,445 
— 
(1,557) 
26,691 

________________________________________
(1) The Constellation Energy Building is comprised of two properties which include the Constellation Office and 1305 Dock Street.

2021 Operating Property Acquisitions

On February 26, 2021, the Company acquired Delray Beach Plaza, a Whole Foods-anchored retail property located in 
Delray Beach, Florida, for a contract price of $27.6 million plus capitalized transaction costs of $0.2 million. The 
developer of this property repaid the Company's mezzanine note receivable of $14.3 million at the time of the 
acquisition.

On June 28, 2021, the Company purchased the remaining 7.5% ownership interest in Hoffler Place for a cash payment 
of $0.3 million.

On June 28, 2021, the Company purchased the remaining 10% ownership interest in Summit Place for a cash payment 
of $0.5 million.

On July 28, 2021, the Company acquired Overlook Village, a retail center in Asheville, North Carolina, for a contract 
price of $28.3 million plus capitalized acquisition costs of $0.1 million.

On August 24, 2021, the Company acquired Greenbrier Square, a Kroger-anchored retail center in Chesapeake, 
Virginia, for total consideration of $36.5 million plus capitalized acquisition costs of $0.3 million. As a part of this 
acquisition, the Company assumed a note payable of $20.0 million.

The following table summarizes the purchase price allocation (including acquisition costs) based on relative fair value 
of the assets acquired and intangible liabilities assumed for the three operating properties purchased during the year 
ended December 31, 2021 (in thousands):

F-25

 
 
 
 
 
 
 
 
 
 
Land
Site improvements
Building and improvements
In-place leases
Above-market leases
Below-market leases
Finance lease liabilities
Finance lease right-of-use assets
Fair value adjustment on acquired debt
Net assets acquired

2020 Operating Property Acquisitions

Delray Beach Plaza

Overlook Village

Greenbrier Square

$ 

$ 

—  $ 

4,607 
22,544 
7,209 
— 
(3,121)   
(27,940)   
24,466 
— 
27,765  $ 

6,328  $ 
1,727 
18,375 
3,997 
81 
(2,146)   
— 
— 
— 
28,362  $ 

8,549 
1,974 
19,196 
6,659 
1,753 
(1,365) 
— 
— 
11 
36,777 

In June 2020, the Company exercised its option to purchase the remaining 21.0% ownership interest in 1405 Point in 
exchange for increased ground lease payments to be made over the approximately 42-year remaining lease term. The 
Company recorded a note payable of $6.1 million, which represents the present value of these payments. The ground 
lessor is an affiliate of our former joint venture partner.

On September 22, 2020, the Company exercised its option to purchase Nexton Square for $17.9 million cash and the 
assumption of a note payable of $22.9 million. The Company also incurred capitalized acquisition costs of 
$0.2 million. The developer of this property repaid the Company's mezzanine note receivable of $16.4 million at the 
time of the acquisition.

On October 1, 2020, the Company acquired Edison Apartments, a multifamily property located in downtown 
Richmond, Virginia, for consideration comprised of 633,734 Class A Units (as defined below), the assumption of a 
$16.4 million loan payable, and the assumption of $1.1 million in other assets and liabilities. The seller of the property 
was a partnership that includes several members from the Company's management team and board of directors. 

On October 30, 2020, the Company acquired 79.0% of the partnership that owns The Residences at Annapolis 
Junction. As part of this purchase, the Company extinguished its note receivable for this project and made a cash 
payment of $0.2 million. The Company assumed an $83.4 million senior loan as part of this acquisition, which was 
immediately refinanced with a new $84.4 million loan. This refinanced loan bore interest at a rate of the Secured 
Overnight Financing Rate ("SOFR") plus a margin of 2.66% and was scheduled to mature on November 1, 2030. As 
part of this financing transaction, the partnership also purchased an interest rate cap for $0.1 million with a SOFR 
strike rate of 1.84%, which was scheduled to expire on November 1, 2023. Due to a preferred return that we received 
on this investment, no value was assigned to our partner's investment in this property at the time of the acquisition. 

The following table summarizes the purchase price allocation (including acquisition costs) based on the relative fair 
value of the assets acquired and intangible liabilities assumed for the three operating properties acquired during the 
year ended December 31, 2020 (in thousands):

Nexton Square

Edison Apartments

The Residences at 
Annapolis Junction

Land
Site improvements
Building and improvements
Furniture and fixtures
In-place leases
Below-market leases
Fair value adjustment on acquired debt
Net assets acquired

9,885  $ 
3,690 
24,070 
— 
5,239 
(1,877)   
364 
41,371  $ 

3,428  $ 
— 
18,227 
355 
1,882 
(140)   
(6)   

23,746  $ 

14,774 
1,786 
101,219 
1,796 
4,079 
— 
— 
123,654 

$ 

$ 

F-26

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other 2022 Real Estate Transactions

On January 14, 2022, the Company acquired the remaining 20% ownership interest in the entity that is developing the 
Ten Tryon project in Charlotte, North Carolina for a cash payment of $3.9 million. The Company recorded the amount 
as an adjustment to additional paid-in-capital.

On April 1, 2022, the Company completed the sale of Hoffler Place for a sale price of $43.1 million. The loss 
recognized upon sale was $0.8 million.

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

On April 25, 2022, the Company completed the sale of Summit Place for a sale price of $37.8 million. The loss 
recognized upon sale was $0.5 million.

In addition to the losses recognized on the sales of the Hoffler Place and Summit Place student-housing properties 
during the year ended December 31, 2022 described above, the Company recognized impairment of real estate of 
$18.3 million to record these properties at their fair values during the three months ended December 31, 2021.

On June 29, 2022, the Company completed the sale of the Home Depot and Costco outparcels at North Pointe for a 
sale price of $23.9 million. The gain on disposition was $20.9 million.

On July 22, 2022, the Company completed the sale of The Residences at Annapolis Junction for a sale price of 
$150.0 million. The gain recognized on disposition was $31.5 million, $5.4 million of which was allocated to the 
Company's noncontrolling interest partner.

On July 26, 2022, the Company completed the sale of the AutoZone and Valvoline outparcels at Sandbridge Commons 
for a sale price of $3.5 million. The gain recognized on disposition was $2.4 million.

On September 23, 2022, the Company completed the sale of the retail portion of the Gainesville Apartments for a sale 
price of $1.5 million. There was no gain or loss on the disposition. In conjunction with the sale, the Company paid 
down the Gainesville Apartments loan by $0.8 million.

In October 2022, the Company acquired the remaining 5% ownership interest in the Gainesville Partnership (as 
defined below), which developed Gainesville Apartments. During 2022, the Company made earn-out payments 
totaling $4.2 million to its development partner in addition to development cost savings of $0.8 million paid to the 
partner.

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

Other 2021 Real Estate Transactions

On January 4, 2021, the Company completed the sale of the 7-Eleven outparcel at Hanbury Village for a sales price of 
$2.9 million. The gain on disposition was $2.4 million.

On January 14, 2021, the Company completed the sale of a land outparcel at Nexton Square for a sale price of 
$0.9 million. There was no gain or loss on the disposition. In conjunction with the sale, the Company paid down the 
Nexton Square loan by $0.8 million.

On March 16, 2021, the Company completed the sale of Oakland Marketplace for a sale price of $5.5 million. The 
gain on disposition was $1.1 million.

On March 18, 2021, the Company completed the sale of easement rights at Courthouse 7-Eleven for a sale price of 
$0.3 million. The gain on disposition was $0.2 million.

During the three months ended March 31, 2021, the Company recognized impairment of real estate of $3.0 million 
related to the Socastee Commons shopping center in Myrtle Beach, South Carolina. The Company anticipated a 

F-27

decline in cash flows due to the expiration of the anchor tenant lease. The Company had not re-leased the anchor 
tenant space and had determined that it was not probable that this space would be leased at rates sufficient to recover 
the Company’s investment in the property. The Company recorded an impairment loss equal to the excess of the book 
value of the property’s assets over the estimated fair value of the property during the first quarter of 2021. On     
August 25, 2021, the Company completed the sale of Socastee Commons for a price of $3.8 million. The loss on 
disposition was $0.1 million.

On October 28, 2021 the Company completed the sale of Courthouse 7-Eleven for a sale price of $3.1 million. The 
gain on disposition was $1.1 million.

On November 16, 2021 the Company completed the sale of Johns Hopkins Village for a sale price of $75.0 million. 
The gain on disposition was $14.4 million.

On December 15, 2021, the Company completed the sale of a land parcel at Brooks Crossing for a sale price of 
$0.5 million. The loss recognized upon disposition was immaterial.

Other 2020 Real Estate Transactions

On January 10, 2020, the Company entered into an operating agreement with a partner to develop a mixed-use 
property in Charlotte, North Carolina. The Company had an 80% interest in 10th and Tryon Partners, LLC (the "Tryon 
Partnership"). On January 10, 2020, the Tryon Partnership purchased land for a purchase price of $6.3 million for this 
project. The Company was responsible for funding the equity requirements of this development, including the 
$6.3 million purchase of the land. Management has concluded that this entity was a VIE as it lacked sufficient equity 
to fund its operations without additional financial support. The Company was the developer of the project and had the 
power to direct the activities of the project that most significantly impacted its financial performance. Therefore, the 
Company was the project's primary beneficiary and consolidated the Tryon Partnership in its consolidated financial 
statements. On January 14, 2022, the Company acquired the remaining 20% ownership interest in the partnership.

On September 12, 2019, the Company entered into an operating agreement with a partner to develop a mixed-use 
property in Belmont, North Carolina. The Company has an 85% interest in Chronicle Holdings, LLC (the "Chronicle 
Partnership"). On March 20, 2020, the Chronicle Partnership purchased land for a purchase price of $2.3 million for 
this project. The Company is responsible for funding the equity requirements of this development, including the 
$2.3 million purchase of the land. Management has concluded that this entity is a VIE as it lacks sufficient equity to 
fund its operations without additional financial support. The Company is the developer of the project and has the 
power to direct the activities of the project that most significantly impact its financial performance. Therefore, the 
Company is the project's primary beneficiary and consolidates the Chronicle Partnership in its consolidated financial 
statements.

On May 29, 2020, the Company sold a portfolio of seven retail properties for $90.0 million. The portfolio consisted of 
Alexander Pointe, Bermuda Crossroads, Gainsborough Square, Harper Hill Commons, Indian Lakes Crossing, 
Renaissance Square, and Stone House Square. The gain on sale was $2.8 million. In connection with the sale of this 
portfolio, the Company repaid $61.9 million on its revolving credit facility, resulting in net proceeds of $25.9 million. 

On August 31, 2020, the Company entered into an operating agreement with a partner to develop a mixed-use project 
in Gainesville, Georgia. The Company initially had a 95% ownership interest in Gainesville Development, LLC (the 
"Gainesville Partnership"). The Gainesville Partnership acquired undeveloped land on August 31, 2020 for a purchase 
price of $5.0 million and immediately began development of the site. The Company was responsible for funding the 
equity requirements of this development. Management has concluded that this entity is a VIE as it lacks sufficient 
equity to fund its operations without additional financial support. By August 31, 2023, the Company was required to 
acquire its partner's 5% ownership interest for up to $4.2 million, subject to the initial operating performance of the 
property. As the Company was required to obtain this ownership interest, the Company consolidates the project in its 
consolidated financial statements. The Company has recorded a note payable liability of $3.8 million in its 
consolidated financial statements for the years ended December 31, 2021 and 2020, which was the fair value of the 
anticipated payments to be made to its partner. As disclosed above, the Company acquired its partner's 5% ownership 
interest in October 2022.

On September 1, 2020, the Company completed the sale of the Walgreens outparcel at Hanbury Village. Net proceeds 
after the transaction costs were $7.0 million. The gain on disposition was $3.6 million.

F-28

On October 2, 2020, the Company purchased the remaining 20% noncontrolling interest in the Southern Post, a mixed-
use development project in Roswell, Georgia in exchange for a cash payment of $3.5 million and future consideration 
of $1.5 million to be paid in cash upon satisfaction of certain conditions. 

Equity Method Investments

Harbor Point Parcel 3

The Company owns a 50% interest in Harbor Point Parcel 3, a joint venture with Beatty Development Group, for 
purposes of developing T. Rowe Price's new global headquarters office building in Baltimore, Maryland. The 
Company is a noncontrolling partner in the joint venture and will serve as the project's general contractor. During the 
year ended December 31, 2022, the Company invested $27.9 million in Harbor Point Parcel 3. The Company has an 
current estimated total equity commitment of $44.6 million relating to this project. In October 2022, Harbor Point 
Parcel 3 modified its construction loan, which was increased from $161.7 million to $180.4 million as a result of an 
increase in the scope of the project. In accordance with a preexisting promissory note secured by the development 
partner's ownership interest in Harbor Point Parcel 4, the Company advanced $3.8 million to the Harbor Point Parcel 3 
development partner to satisfy its additional equity contribution required under the Harbor Point Parcel 3 operating 
agreement. As of December 31, 2022 and December 31, 2021, the carrying value of the Company's investment in 
Harbor Point Parcel 3 was $39.8 million and $12.7 million, respectively. As of December 31, 2022, the carrying value 
of this investment excludes $0.9 million of intra-entity profits. For the years ended December 31, 2022 and 2021, 
Harbor Point Parcel 3 had no operating activity, and therefore the Company received no allocated income.

Based on the terms of the operating agreement, the Company has concluded that Harbor Point Parcel 3 is a VIE and 
that the Company holds a variable interest. The Company has significant influence over the project due to its 50% 
ownership interest; however, the Company does not have the power to direct the activities of the project that most 
significantly impact its performance. This includes activity as the managing member of the entity, which is a power 
that is retained by the Company's joint venture partner. Accordingly, the Company is not the project's primary 
beneficiary and, therefore, does not consolidate Harbor Point Parcel 3 in its consolidated financial statements. The 
Company's investment in the project is recorded as an equity method investment in the consolidated balance sheets.

Harbor Point Parcel 4

On April 1, 2022, the Company 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 multifamily units, 
retail space, and a parking garage. The Company holds an option to increase its ownership to 90%. The Company is a 
noncontrolling partner in the real estate venture and will serve as the project's general contractor. During the year 
ended December 31, 2022, the Company invested $32.4 million in Harbor Point Parcel 4. The Company has a current 
estimated total equity commitment of $102.6 million relating to this project. As of December 31, 2022, the carrying 
value of the Company's investment in Harbor Point Parcel 4 was $32.2 million. As of December 31, 2022, the carrying 
value of this investment excludes $0.2 million of intra-entity profits. For the year ended December 31, 2022, Harbor 
Point Parcel 4 had no operating activity, and therefore the Company received no allocated income.

Based on the terms of the operating agreement, the Company has concluded that Harbor Point Parcel 4 is a VIE and 
that the Company holds a variable interest. The Company has significant influence over the project due to its 78% 
ownership interest; however, the Company does not have the power to direct the activities of the project that most 
significantly impact its performance. This includes activity as the managing member of the entity, which is a power 
that is retained by the Company's partner. Accordingly, the Company is not the project's primary beneficiary and, 
therefore, does not consolidate Harbor Point Parcel 4 in its consolidated financial statements. The Company's 
investment in the project is recorded as an equity method investment in the consolidated balance sheets.

F-29

6.

Notes Receivable and Current Expected Credit Losses

Notes Receivable

The Company had the following loans receivable outstanding as of December 31, 2022 and 2021 ($ in thousands):

Development Project

City Park 2

Solis Gainesville II

Interlock Commercial

Nexton Multifamily

Total mezzanine
Constellation Energy Building note 
receivable

Other notes receivable

Notes receivable guarantee premium
Allowance for credit losses(c)
Total notes receivable

Outstanding loan amount (a)

December 31, 
2022

December 31, 
2021

Maximum loan 
commitment

Interest rate

Interest 
compounding

$ 

19,062 

$ 

—  $ 

20,594 

6,638 

86,584 

— 

— 

95,379 

23,567 

19,595 
107,000  (b)
22,315 

112,284 

118,946  $ 

169,504 

 13.0 %

 14.0 %

 15.0 %

 11.0 %

Annually

Annually

None

Annually

12,834 

11,512 

701 

(1,292) 

— 

7,234 

1,243 

(994) 

$ 

136,039 

$ 

126,429 

_______________________________________
(a) Outstanding loan amounts include any accrued and unpaid interest, as applicable.
(b) This amount includes interest reserves.
(c) The amounts as of December 31, 2022 and 2021 exclude $0.3 million and less than $0.1 million, respectively, of CECL allowance that
relates to the unfunded commitments, which were recorded as a liability under Other liabilities in the consolidated balance sheets.

Interest on the mezzanine loans and preferred equity is accrued and funded utilizing the interest reserves for each loan, 
which are components of the respective maximum loan commitments, and such accrued interest is added to the loan 
receivable balances. The Company recognized interest income for the years ended December 31, 2022, 2021, and 2020 
as follows (in thousands):

Development Project

The Residences at Annapolis Junction
City Park 2

$ 

Delray Beach Plaza
Solis Gainesville II
Nexton Square
Interlock Commercial(c)
Nexton Multifamily

Solis Apartments at Interlock

Total mezzanine

Other interest income

Total interest income

Years Ended December 31, 

2022

2021

2020

— 
1,038 

— 
205 
— 
9,870  (c)
5,348  (e)
— 

16,461 

517 

$ 

$ 

— 
— 

— 
— 
— 
12,769  (c)
1,252 
4,005  (d)
18,026 

431 

2,468  (a)(b)
— 
489  (a)
— 
1,177 
12,267  (c)
— 

3,382 

19,783 

58 

19,841 

$ 

16,978 

$ 

18,457 

$ 

________________________________________
(a) Loan was placed on nonaccrual status effective April 1, 2020.
(b) Includes amortization of the $5.0 million loan modification fee paid by the borrower in November 2018. Additionally, the amount
includes $1.5 million of interest income recognition relating to an exit fee that was due upon repayment of the loan.
(c) The amounts of 2022, 2021 and 2020 include $1.1 million, $2.0 million and $2.3 million, respectively, of interest income recognition
relating to an exit fee that is due upon repayment of the loan.
(d) Includes prepayment premium of $2.4 million received from the early payoff of the loan.
(e) Includes prepayment premium of $2.7 million received from the early payoff of the loan.

F-30

Interlock Commercial

In October 2018, the Company financed a bridge loan with a maximum commitment of $4.0 million to The Interlock, 
LLC ("Interlock"), 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. This loan was subsequently modified as described below.

On December 21, 2018, the Company entered into a mezzanine loan agreement with Interlock for a maximum 
principal amount of $67.0 million and a total maximum commitment, including accrued interest reserves, of $95.0 
million. The previous loan was repaid from proceeds of the mezzanine loan. The mezzanine loan bears interest at a rate 
of 15.0% per annum and matures at the earlier of (i) 24 months after the original maturity date or earlier termination 
date of the senior construction loan or (ii) any sale, transfer, or refinancing of the project. In the event that the maturity 
date is established as being 24 months after the original maturity date or earlier termination date of the senior 
construction loan, Interlock will have the right to extend the maturity date for 5 years. 

On April 19, 2019, the borrower executed its senior construction loan, and the Company's payment guarantee of up to 
$30.7 million became effective. See Note 15 for additional information. See Note 18 for additional discussion.

In May 2020, the Company modified the Interlock Commercial loan to allow for an additional $8.0 million of loan 
funding; this additional loan funding may be available for cost overruns as well as the building of townhome units as 
an additional phase of this development project. The borrower subsequently decided to forego development of these 
townhome units. The borrower also modified the senior construction loan on the project. 

On October 2, 2020, the Interlock Commercial loan was modified to decrease the exit fee, subject to the satisfaction of 
certain conditions. As a result, the exit fee for this loan may range from $6.5 million to $7.5 million. The Company has 
reduced its estimate of exit fees to be collected to $6.5 million and prospectively adjusted the recognition of the exit 
fee in interest income. The Company has recognized $4.9 million of this fee as of December 31, 2021.

In March 2021, the Company loaned an additional $7.5 million as part of the Interlock Commercial loan to fund 
project costs due to an additional equity requirement to reduce the senior loan. In September 2021, the loan was 
modified to increase the maximum loan commitment to $107.0 million, including $70.1 million of principal, and to 
modify and clarify certain rights and responsibilities under the loan.

During February 2022, the Company received $13.5 million as a partial repayment of the Interlock Commercial 
mezzanine loan, which consisted of $11.1 million of principal and $2.4 million of interest. During March 2022, the 
company received $0.7 million as an additional repayment, which consisted of $0.2 million of principal and 
$0.5 million of interest. During September 2022, the Company received $2.7 million as an additional repayment, 
which consisted of $1.0 million of principal and $1.7 million of interest. During December 2022, the Company 
received $0.4 million as an additional repayment, which fully consisted of interest.

Management has concluded that this entity is a VIE. Because Interlock is the developer and managing member of The 
Interlock, the Company does not have the power to direct the activities of the project that most significantly impact its 
performance. Therefore, the Company is not the project's primary beneficiary and does not consolidate the project in 
its consolidated financial statements.

Nexton Multifamily

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

Management had concluded that this entity was a VIE. Because the other investor in the project, TP Nexton LLC, was 
the developer of Nexton Multifamily, the Company did not have the power to direct the activities of the project that 
most significantly impacted its performance. Accordingly, the Company was not the project's primary beneficiary and 
did not consolidate the project in its consolidated financial statements.

F-31

On December 30, 2022 the Company’s preferred equity investment was redeemed in full for total consideration of 
$28.9 million, including $6.6 million of minimum return consisting of $3.9 million of interest and a $2.7 million 
prepayment premium.

City Park 2

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

Management has concluded that this entity is a VIE. Because the other investor in the project, TP City Park 2 LLC, is 
the developer of City Park 2 Multifamily, the Company does not have the power to direct the activities of the project 
that most significantly impact its performance. Accordingly, the Company is not the project's primary beneficiary and 
does not consolidate the project in its consolidated financial statements.

Solis Gainesville II

On October 3, 2022, the Company entered into a $19.6 million preferred equity investment for the development of a 
multifamily property located in Gainesville, Georgia (Solis Gainesville II). The investment has economic 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. The Company's investment bears interest at a rate of 14%, compounded annually, 
with minimum interest of $5.9 million over the life of the investment.

Management has concluded that this entity is a VIE. Because the other investor in the project, TP Gainesville II LLC, 
is the developer and managing member of Solis Gainesville II, the Company does not have the power to direct the 
activities of the project that most significantly impact its performance. Accordingly, the Company is not the project's 
primary beneficiary and does not consolidate the project in its consolidated financial statements.

Guarantee liabilities

As of December 31, 2022, the Company had outstanding payment guarantees for the senior loans on Interlock 
Commercial and Harbor Point Parcel 4 as described above. As of December 31, 2022 and 2021, the Company has 
recorded a guarantee liability of $0.9 million and $1.2 million, respectively, representing the unamortized fair value. 
These guarantees are classified as other liabilities on the Company's consolidated balance sheets, with a corresponding 
adjustment to the notes receivable balance on the consolidated balance sheets. See Note 18 for additional information 
on the Company's outstanding guarantees.

Allowance for Loan Losses

The Company is exposed to credit losses primarily through its mezzanine lending activities and preferred equity 
investments. As of December 31, 2022, the Company had three mezzanine loans, including the City Park 2 and Solis 
Gainesville II preferred equity investments that are accounted for as notes receivable, each of which are financing 
development projects in various stages of completion or lease-up. Each of these projects is subject to a loan that is 
senior to the Company’s mezzanine loan. Interest on these loans is paid in kind and is generally not expected to be 
paid until a sale of the project after completion of the development. 

The Company updated the risk ratings for each of its notes receivable as of December 31, 2022 and obtained industry 
loan loss data relative to these risk ratings. Each of the outstanding loans as of December 31, 2022 was "Pass" rated. 
The Company’s analysis resulted in an allowance for loan losses of approximately $1.6 million as of the year ended 
December 31, 2022. An allowance related to unfunded commitments of approximately $0.3 million as of 
December 31, 2022 was recorded as Other liabilities on the consolidated balance sheet.

At December 31, 2022, the Company reported $136.0 million of notes receivable, net of allowances of $1.3 million. At 
December 31, 2021, the Company reported $126.4 million of notes receivable, net of allowances of $1.0 million. 

F-32

Changes in the allowance for funded and unfunded commitments for the years ended December 31, 2022 and 2021 
were as follows (in thousands):

Year ended December 31, 2022
Unfunded

Total

Funded

Year ended December 31, 2021
Unfunded

Total

Funded

Beginning balance

$ 

994  $ 

10  $ 

1,004  $ 

2,584  $ 

—  $ 

2,584 

Unrealized credit loss provision (release)

Extinguishment due to acquisition

298   

—   

328   

—   

626 

— 

(802)  

(788)  

10   

—   

(792) 

(788) 

Ending balance

$ 

1,292  $ 

338  $ 

1,630  $ 

994  $ 

10  $ 

1,004 

During the year ended December 31, 2020, the Company placed the loans for Delray Beach Plaza and The Residences 
at Annapolis Junction on non-accrual status with total amortized cost basis of $13.6 million. As a result, there was 
$5.1 million of interest income not recognized during the twelve months ended December 31, 2020. As of 
December 31, 2021, there were no loans on non-accrual status. During the year ended December 31, 2022, the 
Company had the Constellation Energy Building note, which bears interest at 3% per annum, on non-accrual status. 
The principal balance of the note receivable is adequately secured by the seller's partnership interest. As of 
December 31, 2022, there were no other loans on non-accrual status.

7. 

Construction Contracts

Construction contract costs and estimated earnings in excess of billings represent reimbursable costs and amounts 
earned under contracts in progress as of the balance sheet date. Such amounts become billable according to contract 
terms, which usually consider the passage of time, achievement of certain milestones, or completion of the project. The 
Company expects to bill and collect substantially all construction contract costs and estimated earnings in excess of 
billings as of December 31, 2022 during the year ending December 31, 2023.  

Billings in excess of construction contract costs and estimated earnings represent billings or collections on contracts 
made in advance of revenue recognized.

The following table summarizes the changes to the balances in the Company’s construction contract costs and 
estimated earnings in excess of billings account and the billings in excess of construction contract costs and estimated 
earnings account for the years ended December 31, 2022 and 2021 (in thousands):

Beginning balance
Revenue recognized that was included in the 
balance at the beginning of the period
Increases due to new billings, excluding amounts 
recognized as revenue during the period

Transferred to receivables
Construction contract costs and estimated earnings 
not billed during the period

Changes due to cumulative catch-up adjustment 
arising from changes in the estimate of the stage of 
completion

Year ended December 31, 2022

Year ended December 31, 2021

Construction 
contract costs and 
estimated earnings 
in excess of 
billings

Billings in excess 
of construction 
contract costs and 
estimated earnings

Construction 
contract costs and 
estimated earnings 
in excess of 
billings

Billings in excess 
of construction 
contract costs and 
estimated earnings

$ 

243  $ 

4,881  $ 

138  $ 

6,088 

— 

— 

(965)   

342 

722 

(4,881)   

18,238 

— 

— 

(723)   

— 

— 

(714)   

243 

(6,088) 

6,237 

— 

— 

576 

243  $ 

(1,356) 

4,881 

Ending balance

$ 

342  $ 

17,515  $ 

The Company defers pre-contract costs when such costs are directly associated with specific anticipated contracts and 
their recovery is probable. Pre-contract costs of $1.3 million and $2.2 million were deferred as of December 31, 2022 
and 2021, respectively. Amortization of pre-contract costs for the years ended December 31, 2022 and 2021 was $1.1 
million and $0.3 million, respectively. 

Construction receivables and payables include retentions, which are amounts that are generally withheld until the 
completion of the contract or the satisfaction of certain restrictive conditions such as fulfillment guarantees. As of 

F-33

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2022 and 2021, construction receivables included retentions of $8.3 million and $3.1 million, 
respectively. The Company expects to collect substantially all construction receivables as of December 31, 2022 
during the year ending December 31, 2023. As of December 31, 2022 and 2021, construction payables included 
retentions of $24.7 million and $4.2 million, respectively. The Company expects to pay substantially all construction 
payables as of December 31, 2022 during the year ending December 31, 2023.

The Company’s net position on uncompleted construction contracts comprised the following as of December 31, 2022 
and 2021 (in thousands):

Costs incurred on uncompleted construction contracts

Estimated earnings

Billings

Net position

Construction contract costs and estimated earnings in excess of billings

Billings in excess of construction contract costs and estimated earnings

Net position

December 31, 

2022

2021

$ 

$ 

$ 

$ 

571,465  $ 

22,162 

(610,800) 

(17,173)  $ 

342  $ 

(17,515) 

(17,173)  $ 

379,993 

15,115 

(399,746) 

(4,638) 

243 

(4,881) 

(4,638) 

The Company's balances and changes in construction contract price allocated to unsatisfied performance obligations 
(backlog) for each of the three years ended December 31, 2022, 2021 and 2020 were as follows (in thousands):

Beginning backlog

New contracts/change orders

Work performed

Ending backlog

Years Ended December 31, 

2022

2021

2020

$ 

$ 

215,519  $ 

71,258  $ 

685,753 

(235,707) 

236,077 

(91,816) 

665,565  $ 

215,519  $ 

242,622 

45,882 

(217,246) 

71,258 

The Company expects to complete a majority of the uncompleted contracts as of December 31, 2022 during the next 
12 to 18 months.  

F-34

8. 

Indebtedness

The Company’s indebtedness comprised the following as of December 31, 2022 and 2021 (dollars in thousands):  

Principal Balance

December 31, 

2022

2021

Interest Rate (a)

Maturity Date

December 31, 

2022

Secured Debt
Delray Beach Plaza(b)
Red Mill West(c)
Hoffler Place(d)(e)
Summit Place(d)(e)
North Pointe Center Note 2(f)
The Residences at Annapolis Junction(g)
Marketplace at Hilltop(h)
1405 Point(i)
Brooks Crossing Office(i)
One City Center(i)
Wills Wharf(j)
249 Central Park Retail(j)(k)
Fountain Plaza Retail(j)(k)
South Retail(j)(k)
Chronicle Mill
Red Mill Central
Premier Apartments(l)
Premier Retail(l)
Red Mill South
Market at Mill Creek
Gainesville Apartments
Encore Apartments(m)
4525 Main Street(m)
Southern Post(n)
Thames Street Wharf
Constellation Energy Building
Southgate Square
Nexton Square
Liberty Apartments
Greenbrier Square
Lexington Square
Red Mill North
Greenside Apartments
Smith's Landing
Edison Apartments
The Cosmopolitan
Total secured debt
Unsecured Debt
Senior unsecured revolving credit facility
M&T unsecured term loan
Senior unsecured term loan
Senior unsecured term loan
Total unsecured debt
Total principal balances
Other note payable(p)
Unamortized GAAP adjustments
Loans reclassified to liabilities related to assets 
held for sale, net
Indebtedness, net

$ 

$ 

$ 

—  $ 
— 
— 
— 
— 
— 
— 
— 
— 
— 
— 
— 
— 
— 
27,630 
2,013 
16,269 
8,013 
5,191 
12,494 
30,000 
23,980 
30,785 
— 
69,327 
175,000 
26,195 
22,195 
20,926 
19,940 
13,892 
4,079 
31,862 
15,535 
15,563 
41,243 

612,132  $ 

61,000  $ 

100,000 
31,658 
268,342 
461,000 
1,073,132 
6,131 
(11,002) 

— 

$ 

1,068,261  $ 

14,039 
10,386 
18,400 
23,100 
1,942 
84,375 
9,706 
52,286 
14,882 
24,084 
64,288 
16,352 
9,841 
7,179 
— 
2,188 
16,508 
8,131 
5,518 
13,142 
18,114 
24,523 
31,476 
— 
70,761 
— 
27,060 
20,107 
13,572 
20,000 
14,172 
4,189 
32,598 
16,452 
15,926 
42,090 
747,387 

5,000 
— 
19,500 
185,500 
210,000 
957,387 
10,144  (q)
(8,621) 

(41,354) 
917,556 

N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
LIBOR+ 3.00%
4.80%
LIBOR+ 1.55%
LIBOR+ 1.55%
3.57%
LIBOR+ 1.55%
SOFR+ 1.50%
2.93%
2.93%
SOFR+ 2.25%
BSBY+ 1.30% (o)
BSBY+ 1.50%
LIBOR+ 1.90%
SOFR+ 1.95%
SOFR+ 1.50%
3.74%
4.50%
4.73%
3.17%
4.05%
5.30%
3.35%

N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
May 5, 2024
June 17, 2024
October 31, 2024
October 31, 2024
May 1, 2025
July 12, 2025
December 20, 2025
February 10, 2026
February 10, 2026
August 25, 2026
September 30, 2026
November 1, 2026
December 21, 2026
June 30, 2027
September 27, 2027
October 10, 2027
September 1, 2028
December 31, 2028
December 15, 2029
June 1, 2035
December 1, 2044
July 1, 2051

SOFR+ 1.30%-1.85%
SOFR+ 1.25%-1.80%
SOFR+ 1.25%-1.80%
SOFR+ 1.25%-1.80%

(o)

(o)

January 22, 2027
March 8, 2027
January 21, 2028
January 21, 2028

________________________________________
(a)  London Inter-Bank Offered Rate ("LIBOR"), SOFR, and BSBY rates are determined by individual lenders. 

F-35

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(b) On January 19, 2022 the Delray Beach Plaza note was paid off.
(c) On March 3, 2022 the Red Mill West note was paid off.
(d) Cross collateralized.
(e) The loans secured by Hoffler Place and Summit Place were paid off on April 1, 2022 and April 25, 2022, respectively, in conjunction with the 

sales of the properties. Both properties were held for sale as of December 31, 2021.

(f) On June 29, 2022 the note associated with North Pointe Phase II was paid off in conjunction with the sale of the property.
(g) On July 22, 2022 the note associated with The Residences at Annapolis Junction was paid off in conjunction with the sale of the property.
(h) On August 15, 2022 the Marketplace at Hilltop note was paid off.
(i) On August 25, 2022 the notes secured by the 1405 Point, Brooks Crossing Office, and One City Center properties were paid off. 
(j) On December 6, 2022 these notes were paid off with the proceeds of the M&T unsecured term loan.
(k) Cross collateralized.
(l) Cross collateralized.
(m) Cross collateralized.
(n) No funding on the construction loan as of December 31, 2022.
(o) Includes debt subject to interest rate swap agreements.
(p)  Represents the fair value of additional ground lease payments at 1405 Point over the approximately 40-year remaining lease term.
(q) Includes an earn-out liability for the Gainesville Apartments development project as of December 31, 2021, which was paid in October 2022. 

The Company’s indebtedness was comprised of the following fixed and variable-rate debt as of December 31, 2022 
and 2021 (in thousands):

Fixed-rate debt

Variable-rate debt

Total principal balance

December 31, 

2022

2021

$ 

$ 

641,752  $ 

431,380 

1,073,132  $ 

534,371 

423,016 

957,387 

Certain loans require the Company to comply with various financial and other covenants, including the maintenance of 
minimum debt coverage ratios. As of December 31, 2022, the Company was in compliance with all loan covenants. 

Scheduled principal repayments and maturities during each of the next five years and thereafter are as follows (in 
thousands):

Year (1)

2023

2024

2025

2026

2027

Thereafter
Total (1)

Scheduled Principal 
Payments

Maturities

Total Payments

$ 

9,770  $ 

—  $ 

10,376 

10,736 

8,150 

4,796 

61,763 

53,022 

45,259 

309,376 

217,779 

342,105 

9,770 

63,398 

55,995 

317,526 

222,575 

403,868 

$ 

105,591  $ 

967,541  $ 

1,073,132 

________________________________________

(1) Debt principal payments and maturities exclude increased ground lease payments at 1405 Point which are classified as a note payable in 

the Company's consolidated balance sheets.

Amended Credit Facility

On August 23, 2022, the Company, as parent guarantor, and the Operating Partnership, as borrower, entered into an 
amended and restated credit agreement (the "Credit Agreement"), which provides for a $550.0 million credit facility 
comprised of a $250.0 million senior unsecured revolving credit facility (the "revolving credit facility") and a 
$300.0 million senior unsecured term loan facility (the "term loan facility" and, together with the revolving credit 
facility, the "amended credit facility"), with a syndicate of banks. The amended credit facility replaces the prior 
$150.0 million revolving credit facility, which was scheduled to mature on January 24, 2024, and the prior 
$205.0 million term loan facility, which was scheduled to mature on January 24, 2025. 

The amended credit facility includes an accordion feature that allows the total commitments to be increased to 
$1.0 billion, subject to certain conditions, including obtaining commitments from any one or more lenders. The 
revolving credit facility has a scheduled maturity date of January 22, 2027, with two six-month extension options, 

F-36

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
subject to the Company's satisfaction of certain conditions, including payment of a 0.075% extension fee at each 
extension. The term loan facility has a scheduled maturity date of January 21, 2028.

The revolving credit facility bears interest at SOFR plus a margin ranging from 1.30% to 1.85%, and the term loan 
facility bears interest at SOFR plus a margin ranging from 1.25% to 1.80%, in each case depending on the Company's 
total leverage. The Company is also obligated to pay an unused commitment fee of 15 or 25 basis points on the unused 
portions of the commitments under the revolving credit facility, depending on the amount of borrowings under the 
revolving credit facility. If the Company or the Operating Partnership attains investment grade credit ratings from both 
S&P Global Ratings and Moody’s Investors Service, Inc., the Operating Partnership may elect to have borrowings 
become subject to interest rates based on such credit ratings. The Company may, at any time, voluntarily prepay any 
loan under the amended credit facility in whole or in part without premium or penalty.

The Operating Partnership is the borrower under the amended credit facility, and its obligations under the amended 
credit facility are guaranteed by the Company and certain of its subsidiaries that are not otherwise prohibited from 
providing such guaranty. The Credit Agreement contains customary representations and warranties and financial and 
other affirmative and negative covenants. The Company's ability to borrow under the amended credit facility is subject 
to ongoing compliance with a number of financial covenants, affirmative covenants, and other restrictions. The Credit 
Agreement includes customary events of default, in certain cases subject to customary cure periods. The occurrence of 
an event of default, if not cured within the applicable cure period, would permit the lenders to, among other things, 
declare the unpaid principal, accrued and unpaid interest, and all other amounts payable under the amended credit 
facility to be immediately due and payable.

On January 7, 2021, the Operating Partnership entered into a $15.0 million standby letter of credit using the available 
capacity under the prior credit facility to guarantee the funding of its investment in the Harbor Point Parcel 3 joint 
venture, which is the developer of T. Rowe Price's new global headquarters. This letter of credit was available for draw 
down on the prior revolving credit facility in the event the Company did not meet its equity requirement. The letter of 
credit expired on January 4, 2022 and was not required to be renewed.

The Company is currently in compliance with all covenants under the Credit Agreement.

M&T Term Loan Facility

On December 6, 2022, the Company, as parent guarantor, and the Operating Partnership, as borrower, entered into a 
term loan agreement (the "M&T term loan agreement") with Manufacturers and Traders Trust Company, as lender and 
administrative agent, which provides a $100.0 million senior unsecured term loan facility (the "M&T term loan 
facility"), with the option to increase the total capacity to $200.0 million, subject to the Company's satisfaction of 
certain conditions. The proceeds from the M&T term loan facility were used to repay the loans secured by the Wills 
Wharf, 249 Central Park Retail, Fountain Plaza Retail, and South Retail properties. The M&T term loan facility has a 
scheduled maturity date of March 8, 2027, with a one-year extension option, subject to the Company's satisfaction of 
certain conditions, including payment of a 0.075% extension fee.

The M&T term loan facility bears interest at a rate elected by the Operating Partnership based on term SOFR, Daily 
Simple SOFR, or the Base Rate (as defined below), and in each case plus a margin. The margin under each interest 
rate election depends on the Company's total leverage. The "Base Rate" is equal to the highest of: (a) the rate of 
interest in effect for such day as publicly announced from time to time by M&T Bank as its “prime rate” for such day, 
(b) the Federal Funds Rate for such day, plus 0.50%, (c) one month term SOFR for such day plus 100 basis points and 
(d) 1.00%. For the year ended December 31, 2022, the Operating Partnership has elected for the loan to bear interest at 
term SOFR plus margin. If the Company or the Operating Partnership attains investment grade credit ratings from both 
S&P Global Ratings and Moody's Investor Service, Inc., the Operating Partnership may elect to have borrowings 
become subject to interest rates based on such credit ratings. The Company may, at any time, voluntarily prepay the 
M&T term loan facility in whole or in part without premium or penalty, provided certain conditions are met.

The Operating Partnership is the borrower under the M&T term loan facility, and its obligations under the M&T term 
loan facility are guaranteed by the Company and certain of its subsidiaries that are not otherwise prohibited from 
providing such guaranty. The M&T term loan agreement contains customary representations and warranties and 
financial and other affirmative and negative covenants.  The Company's ability to borrow under the M&T term loan 
facility is subject to ongoing compliance with a number of financial covenants, affirmative covenants, and other 
restrictions. The term loan agreement includes customary events of default, in certain cases subject to customary cure 
periods. The occurrence of an event of default, if not cured within the applicable cure period, would permit the lenders 

F-37

to, among other things, declare the unpaid principal, accrued and unpaid interest, and all other amounts payable under 
the M&T term loan facility to be immediately due and payable.

The Company is currently in compliance with all covenants under the M&T term loan agreement.

Other 2022 Financing Activity

On January 5, 2022, the Company contributed $2.6 million to the Harbor Point Parcel 3 joint venture in order to meet 
the lender's equity funding requirement since the $15.0 million standby letter of credit discussed above expired on 
January 4, 2022.

On January 14, 2022, the Company acquired a 79% membership interest and an additional 11% economic interest in 
the partnership that owns the mixed-use property known as the Constellation Energy Building. The property was 
subject to a $156.1 million loan, which the Company immediately refinanced following the acquisition with a new 
$175.0 million loan. The new loan bears interest at a rate of BSBY plus a spread of 1.50% and will mature on 
November 1, 2026. 

On January 19, 2022, the Company paid off the $14.1 million balance of the loan secured by the Delray Beach Plaza 
shopping center.

On March 3, 2022, the Company paid off the $10.3 million balance of the loan secured by the Red Mill West 
Commons shopping center.

On April 25, 2022, Harbor Point Parcel 3, a joint venture to which the Company is party, entered into a construction 
loan agreement for $161.5 million.

On April 1, 2022, the Company paid off the $18.4 million loan secured by Hoffler Place in conjunction with the sale of 
the property.

On April 25, 2022, the Company paid off the $23.1 million loan secured by Summit Place in conjunction with the sale 
of the property.

On April 25, 2022, Harbor Point Parcel 4, a real estate venture to which the Company is party, entered into a 
construction loan agreement for $109.7 million.

On June 29, 2022, the Company paid off the $1.9 million loan balance associated with North Pointe Phase II in 
conjunction with the sale of the property leased and occupied by Costco.

On June 30, 2022, the Company refinanced the $20.1 million loan secured by Nexton Square. The new $22.5 million 
loan bears interest at a rate of SOFR plus a spread of 1.95% (SOFR has a 0.30% floor) and will mature on June 30, 
2027.

On July 22, 2022, the Company paid off the $84.4 million loan secured by The Residences at Annapolis Junction in 
conjunction with the sale of the property.

On August 15, 2022, the Company paid off the $9.4 million balance of the loan secured by the Marketplace at Hilltop 
shopping center. 

On August 25, 2022, the Company paid off the $51.8 million, $14.6 million, and $23.6 million balances of the loans 
secured by the 1405 Point, Brooks Crossing Office, and One City Center properties, respectively.

On August 25, 2022, the Company entered into a $73.6 million construction loan agreement for the Southern Post 
development project. The loan bears interest at a rate of SOFR plus a spread of 2.25%. The loan matures on August 
25, 2026 and has two 12-month extension options. There was no balance outstanding on the loan as of December 31, 
2022.

On September 27, 2022, the Company refinanced the $13.4 million loan secured by Liberty Apartments. The new 
$21.0 million loan bears interest at a rate of SOFR plus a spread of 1.50% and will mature on September 27, 2027.

F-38

On December 6, 2022, the Company paid off the $64.3 million, $16.1 million, $9.7 million, and $7.1 million balances 
of the loans secured by the Wills Wharf, 249 Central Park Retail, Fountain Plaza Retail, and South Retail properties, 
respectively.

On December 20, 2022, the Company refinanced the $29.6 million loan secured by Gainesville Apartments. The new 
$30.0 million loan bears interest at a rate of SOFR plus a spread of 1.50%. The loan matures on December 20, 2025 
and has two 12-month extension options, subject to certain conditions.

During the year ended December 31, 2022, the Company borrowed $39.8 million under its existing construction loans 
to fund new development and construction.

2021 Financing Activity

On January 15, 2021, the Company refinanced the loan secured by 4525 Main Street and Encore Apartments. The 
Company increased the balance by $1.5 million, bringing the total balance of the loan to $57.0 million. The new loan 
bears interest at a rate of 2.93% and will mature on February 10, 2026.

On January 28, 2021, the Company refinanced the Nexton Square loan and paid the balance down by $2.0 million, 
bringing the balance to $20.1 million. The loan bore interest at a rate of LIBOR plus a spread of 2.25% (LIBOR has a 
0.25% floor) and was scheduled to mature on February 1, 2023. This loan was subsequently refinanced prior to its 
original maturity date. See “Other 2022 Financing Activity” above.

On March 8, 2021, the Company obtained a loan secured by Delray Beach Plaza in the amount of $14.5 million. The 
loan bore interest at a rate of LIBOR plus a spread of 3.00% and was scheduled to mature on March 8, 2026. This loan 
was subsequently paid off prior to its original maturity date. See “Other 2022 Financing Activity” above.

On May 5, 2021, the Company entered into a $35.1 million construction loan agreement for the Chronicle Mill 
development project. The loan bears interest at a rate of LIBOR plus a spread of 3.00% (LIBOR has a 0.25% floor). 
The loan matures on May 5, 2024 and has two 12-month extension options.

On August 24, 2021, as a part of the Greenbrier Square acquisition, the Company assumed a note payable of 
$20.0 million. The loan bears interest at a fixed rate of 3.74% and will mature on October 10, 2027.

On September 30, 2021, the Company refinanced the loan secured by Thames Street Wharf. The new $71.0 million 
loan bears interest at a rate of BSBY plus a spread of 1.30% and will mature on September 30, 2026. The Company 
simultaneously entered into an interest rate swap agreement that effectively fixes the interest rate at 2.35% for the term 
of the loan.

On April 15, 2021, the Company refinanced the $19.5 million Southgate Square loan. On December 21, 2021, the 
Company refinanced the loan with a new $27.1 million loan. The new loan bears interest at a rate of LIBOR plus a 
spread of 1.90% (LIBOR has a 0.20% floor) and will mature on December 21, 2026. 

During the year ended December 31, 2021, the Company borrowed $23.4 million under its existing construction loans 
to fund new development and construction.

F-39

9.

Derivative Financial Instruments

As of December 31, 2022, the Company had the following interest rate caps ($ in thousands):

Effective Date
2/2/2021
3/4/2021
11/1/2020
7/1/2022
7/5/2022
1/11/2022
4/7/2022
7/6/2022
9/1/2022

Maturity Date
2/1/2023
4/1/2023
11/1/2023
1/1/2024
1/1/2024
2/1/2024
2/1/2024
3/1/2024
9/1/2024

$ 

$ 

Notional Amount

Strike Rate

Premium Paid

100,000 
14,479 
84,375  (a)
50,000  (a)
35,100  (a)
175,000 
175,000  (a)
200,000  (a)
73,562  (a)(d)
907,516 

0.50% (LIBOR)

$ 

2.50% (LIBOR)

1.84% (SOFR)

1.00%-3.00% (SOFR) (b)
1.00%-3.00% (SOFR) (b)

4.00% (BSBY)

1.00%-3.00% (BSBY) (b)
1.00%-3.00% (SOFR) (b)
1.00%-3.00% (SOFR) (b)

$ 

45 
4 
91 
143  (c)
120  (c)
154 
3,595 

352  (c)

1,370 
5,874 

________________________________________
(a) Designated as a cash flow hedge.
(b) The Company purchased interest rate caps at 1.00% and sold interest rate caps at 3.00%, resulting in interest rate cap corridors of 1.00%
and 3.00%. The intended goal of these corridors is to provide a level of protection from the effect of rising interest rates and reduce the all-in
cost of the derivative instrument.
(c) This amount represents the sum of the premiums paid on the original instruments. The caps were blended and extended during the year
ended December 31, 2022.
(d) The notional amount represents the maximum notional amount that will eventually be in effect. The notional amount is scheduled to
increase over the term of the corridor in accordance with projected borrowings on the associated loan.

As of December 31, 2022, the Company held the following floating-to-fixed interest rate swaps ($ in thousands):

Related Debt

Senior unsecured term loan
Senior unsecured term loan

Senior unsecured term loan

Senior unsecured term loan

Senior unsecured term loan

Senior unsecured term loan

Thames Street Wharf

M&T unsecured term loan
Senior unsecured term loan

$ 

Notional 
Amount

50,000 
32,842  (a)
10,500  (a)
25,000  (a)
25,000  (a)
25,000  (a)
69,328  (a)
100,000 
100,000 

Index

1-month LIBOR
1-month LIBOR

1-month LIBOR

1-month LIBOR

1-month LIBOR

1-month LIBOR

1-month BSBY

1-month SOFR
1-month SOFR

Swap Fixed 
Rate

Debt 
effective rate

Effective 
Date

Expiration 
Date

 2.78 %
 2.25 %

 3.02 %

 0.50 %

 0.50 %

 0.55 %

 1.05 %

 3.50 %
 3.43 %

 4.08 %
 3.55 %

5/1/2018
4/1/2019

5/1/2023
8/10/2023

 4.32 % 10/12/2018

10/12/2023

 1.80 %

 1.80 %

 1.85 %

 2.35 %

4/1/2020

4/1/2020

4/1/2020

4/1/2024

4/1/2024

4/1/2024

9/30/2021

9/30/2026

 4.80 %
12/6/2022
 4.73 % 12/13/2022

12/6/2027
1/21/2028

Total

$ 

437,670 

________________________________________

(a) Designated as a cash flow hedge.

For the interest rate swaps and caps designated as cash flow hedges, realized gains and losses are reclassified out of 
accumulated other comprehensive gain (loss) to interest expense in the consolidated statements of comprehensive 
income due to payments received from and paid to the counterparty. During the next 12 months, the Company 
anticipates reclassifying approximately $11.7 million of net hedging gains as reductions to interest expense. These 
amounts will be reclassified from accumulated other comprehensive gain into earnings to offset the variability of the 
hedged items during this period.

F-40

The Company’s derivatives comprised the following as of December 31, 2022 and 2021 (in thousands):

December 31, 2022

December 31, 2021

Fair Value

Fair Value

Notional 
Amount

Asset

Liability

Notional 
Amount

Asset

Liability

Derivatives not designated as accounting 
hedges

Interest rate swaps

$  250,000  $ 

2,201  $ 

—  $  50,000  $ 

—  $ 

(1,454) 

Interest rate caps
Total derivatives not designated as 
accounting hedges
Derivatives designated as accounting 
hedges

Interest rate swaps

Interest rate caps

Total derivatives

289,479 

2,102 

539,479 

4,303 

187,670 

561,200 

11,247 

13,565 

— 

— 

— 

— 

399,579 

1,019 

— 

449,579 

1,019 

(1,454) 

239,633 

384,375 

1,317 

590 

(2,013) 

— 

$ 1,288,349  $  29,115  $ 

—  $ 1,073,587  $ 

2,926  $ 

(3,467) 

The changes in the fair value of the Company’s derivatives during the years ended December 31, 2022, 2021, and 
2020 was as follows (in thousands):

Interest rate swaps

Interest rate caps

Total change in fair value of interest rate derivatives

Comprehensive income statement presentation:

Change in fair value of derivatives and other

Unrealized cash flow hedge gains (losses)

Total change in fair value of interest rate derivatives

10.

Equity

Stockholders’ Equity

Years Ended December 31, 

2022

2021

2020

$ 

$ 

$ 

$ 

16,210  $ 

12,841 

29,051  $ 

8,886  $ 

20,165 

29,051  $ 

4,775  $ 

1,222 

5,997  $ 

2,319  $ 

3,678 

5,997  $ 

(10,318) 

(518) 

(10,836) 

(1,085) 

(9,751) 

(10,836) 

As of December 31, 2022 and 2021, the Company’s authorized capital was 500 million shares of common stock and
100 million shares of preferred stock. The Company had 67.7 million and 63.0 million shares of common stock issued
and outstanding as of December 31, 2022 and 2021, respectively. The Company had 6.8 million shares of its Series A
Preferred Stock (as defined below) issued and outstanding as of December 31, 2022 and 2021.

Common Stock

On February 26, 2018, the Company commenced an at-the-market continuous equity offering program (the "2018
ATM Program") through which the Company may, from time to time, issue and sell shares of its common stock. Upon
commencing the 2018 ATM Program, the Company simultaneously terminated the 2016 ATM Program. On August 6,
2019, the Company entered into amendments to the separate sales agreements related to the 2018 ATM Program,
which, among other things, increased the aggregate offering price of shares of the Company’s common stock under the
ATM Program from $125.0 million to $180.7 million. During the year ended December 31, 2020, the Company issued
and sold 92,577 shares of common stock at a weighted average price of $18.23 per share under the 2018 ATM
Program, receiving net proceeds after offering costs and commissions of $1.7 million.

On March 10, 2020, the Company commenced a new at-the-market continuous equity offering program (the "ATM
Program") through which the Company may, from time to time, issue and sell shares of its common stock and shares
of its 6.75% Series A Cumulative Redeemable Perpetual Preferred Stock (the "Series A Preferred Stock") having an
aggregate offering price of up to $300.0 million, to or through its sales agents and, with respect to shares of its

F-41

common stock, may enter into separate forward sales agreements to or through the forward purchaser. Upon 
commencing the ATM Program, the Company simultaneously terminated the 2018 ATM Program. During the years 
ended December 31, 2022 and 2021, the Company issued and sold 475,074 and 3,801,731 shares of common stock at a 
weighted average price of $15.21 and $13.87 per share under the ATM Program, receiving net proceeds, after offering 
costs and commissions, of $7.1 million and $51.7 million, respectively. During the years ended December 31, 2022 
and 2021, the Company did not issue any shares of the Series A Preferred Stock under the ATM Program. During the 
year ended December 31, 2020, the Company issued and sold 713,418 shares of the Series A Preferred Stock at a 
weighted average price of $22.88 per share (inclusive of accrued dividends) under the ATM Program, receiving net 
proceeds, after offering costs and commissions, of $16.1 million. 

On January 11, 2022, the Company completed an underwritten public offering of 4,025,000 shares of common stock, 
which were pre-purchased from the Company by the underwriter at a purchase price of $14.45 per share of common 
stock including fees, resulting in net proceeds after offering costs of $58.0 million.

Preferred Stock

On June 18, 2019, the Company issued 2,530,000 shares of its Series A Preferred Stock, with a liquidation preference 
of $25.00 per share, which included 330,000 shares issued upon the underwriters’ full exercise of their option to 
purchase additional shares. Net proceeds from the offering, after the underwriting discount but before offering 
expenses payable by the Company, were approximately $61.3 million. The Company used the net proceeds to fund a 
portion of the purchase price of Thames Street Wharf, a 263,426 square foot office building located in the Harbor 
Point neighborhood of Baltimore, Maryland. The balance of the net proceeds was used to repay a portion of the 
outstanding borrowings under the Company’s unsecured revolving credit facility and for general corporate purposes.

In connection with the issuance of the Series A Preferred Stock, on June 18, 2019, the Operating Partnership issued to 
the Company 2,530,000 6.75% Series A Cumulative Redeemable Perpetual Preferred Units (the "Series A Preferred 
Units"), which have economic terms that are identical to the Company’s Series A Preferred Stock. The Series A 
Preferred Units were issued in exchange for the Company’s contribution of the net proceeds from the offering of the 
Series A Preferred Stock to the Operating Partnership.

On August 20, 2020, the Company sold 3,600,000 shares of its Series A Preferred Stock at a public offering price of 
$24.75 per share (inclusive of accrued dividends), for net proceeds, after the underwriting discount and offering 
expenses payable by the Company, of approximately $86.1 million, pursuant to a prospectus supplement, dated August 
13, 2020, and a base prospectus dated March 9, 2020. The offering was a re-opening of the Company’s previous 
issuances of Series A Preferred Stock. The additional shares of Series A Preferred Stock sold in the offering form a 
single series, and are fully fungible, with the other outstanding shares of Series A Preferred Stock. The Company used 
the net proceeds to repay a portion of the outstanding borrowings under the Company’s unsecured revolving credit 
facility and for general corporate purposes.

In connection with the issuance of the Series A Preferred Stock, on August 20, 2020, the Operating Partnership issued 
to the Company 3,600,000 Series A Preferred Units, which have economic terms that are identical to the Series A 
Preferred Stock. The Series A Preferred Units were issued in exchange for the Company’s contribution of the net 
proceeds from the offering of the Series A Preferred Stock to the Operating Partnership.

Dividends on the Series A Preferred Stock are payable quarterly in arrears on or about the 15th day of each January, 
April, July and October. The first dividend on the Series A Preferred Stock was paid on October 15, 2019. The Series 
A Preferred Stock does not have a stated maturity date and is not subject to any sinking fund or mandatory redemption 
provisions. Upon liquidation, dissolution or winding up, the Series A Preferred Stock will rank senior to the 
Company's common stock with respect to the payment of distributions and other amounts. Except in instances relating 
to preservation of the Company's qualification as a REIT or pursuant to the Company’s special optional redemption 
right, the Series A Preferred Stock is not redeemable prior to June 18, 2024. On and after June 18, 2024, the Company 
may, at its option, redeem the Series A Preferred Stock, in whole, at any time, or in part, from time to time, for cash at 
a redemption price of $25.00 per share, plus any accrued and unpaid dividends (whether or not declared) to, but 
excluding, the redemption date.

Upon the occurrence of a change of control (as defined in the articles supplementary designating the terms of the 
Series A Preferred Stock), the Company has a special optional redemption right that enables it to redeem the Series A 
Preferred Stock, in whole or in part and within 120 days after the first date on which a change of control has occurred 
resulting in neither the Company nor the surviving entity having a class of common stock listed on the New York 

F-42

Stock Exchange, NYSE American, or NASDAQ or the acquisition of beneficial ownership of its stock entitling a 
person to exercise more than 50% of the total voting power of all our stock entitled to vote generally in election of 
directors. The special optional redemption price is $25.00 per share, plus any accrued and unpaid dividends (whether 
or not declared) to, but excluding, the date of redemption.

Upon the occurrence of a change of control, holders will have the right (unless the Company has elected to exercise its
special optional redemption right to redeem their Series A Preferred Stock) to convert some or all of such holder’s 
Series A Preferred Stock into a number of shares of the Company's common stock equal to the lesser of:

•

the quotient obtained by dividing (i) the sum of the $25.00 liquidation preference plus the amount of any accrued 
and unpaid distributions to, but not including, the change of control conversion date (unless the change of control 
conversion date is after a record date for a Series A Preferred Stock distribution payment and prior to the 
corresponding Series A Preferred Stock distribution payment date, in which case no additional amount for such 
accrued and unpaid distribution will be included in this sum) by (ii) the Common Stock Price (as defined in the 
articles supplementary designating the terms of the Series A Preferred Stock); and

•

2.97796 (i.e., the Share Cap), subject to certain adjustments;

subject, in each case, to certain adjustments and provisions for the receipt of alternative consideration of equivalent 
value as described in the articles supplementary designating the terms of the Series A Preferred Stock.

Noncontrolling Interests

As of December 31, 2022 and 2021, the Company held a 76.7% and 75.3% common interest in the Operating 
Partnership, respectively. As of December 31, 2022, the Company also held a preferred interest in the Operating 
Partnership in the form of preferred units with a liquidation preference of $171.1 million. The Company is the primary 
beneficiary of the Operating Partnership as it has the power to direct the activities of the Operating Partnership and the 
rights to absorb 76.7% of the net income of the Operating Partnership. As the primary beneficiary, the Company 
consolidates the financial position and results of operations of the Operating Partnership. Noncontrolling interests in 
the Company represent units of limited partnership interest in the Operating Partnership not held by the Company. As 
of December 31, 2022, there were 20,611,190 Class A Units of limited partnership interest in the Operating 
partnership not held by the Company. The Company's financial position and results of operations are the same as those 
of the Operating Partnership. 

Additionally, the Operating Partnership owns a majority interest in certain non-wholly-owned operating and 
development properties. The noncontrolling interest for investment entities of $24.1 million relates to the minority 
partners' interest in certain joint venture entities as of December 31, 2022. The noncontrolling interest for consolidated 
real estate entities was $0.6 million as of December 31, 2021.

On January 1, 2022, in connection with the tender by holders of Class A Units of 12,149 Class A Units for redemption 
by the Operating Partnership, the Company elected to satisfy the redemption requests through the issuance of an equal 
number of shares of common stock.

On July 1, 2022, in connection with the tender by a limited partner in the Operating Partnership of 10,146 Class A 
Units for redemption by the Operating Partnership, the Company elected to satisfy the redemption request with a cash 
payment of $0.1 million. 

Holders of OP Units may not transfer their units without the Company’s prior consent as general partner of the 
Operating Partnership. Subject to the satisfaction of certain conditions, holders of Class A Units may tender their units 
for redemption by the Operating Partnership in exchange for cash equal to the market price of shares of the Company’s 
common stock at the time of redemption or, at the Company’s option and sole discretion, for unregistered or registered 
shares of common stock on a one-for-one basis. Accordingly, the Company presents OP Units of the Operating 
Partnership not held by the Company as noncontrolling interests within equity in the consolidated balance sheets. 

Dividends and Class A Unit Distributions

During the years ended December 31, 2022, 2021, and 2020, the Company declared dividends per common share and 
distributions per unit of $0.72, $0.64, and $0.44, respectively. During the years ended December 31, 2022, 2021, and 

F-43

 
 
 
2020, these common stock dividends totaled $48.7 million, $39.3 million, and $25.3 million, respectively, and these 
Operating Partnership distributions totaled $14.8 million, $13.3 million, and $9.2 million, respectively.

The tax treatment of dividends paid to common stockholders during the years ended December 31, 2022, 2021, and 
2020 was as follows (unaudited):

Capital gains

Ordinary income

Return of capital

Total

Years ended December 31,

2022

2021

2020

 — %

 65.64 %

 34.36 %

 100.00 %

 8.98 %

 66.71 %

 24.31 %

 100.00 %

 — %

 59.09 %

 40.91 %

 100.00 %

During the years ended December 31, 2022, 2021, and 2020 the Company declared dividends of $1.687500 per share 
to holders of Series A Preferred Stock. During the years ended December 31, 2022, 2021, and 2020, these preferred 
stock dividends totaled $11.5 million, $11.5 million, and $7.3 million, respectively. 

The tax treatment of dividends paid to preferred stockholders during the years ended December 31, 2022, 2021, and 
2020 was as follows (unaudited):

Capital gains

Ordinary income

Total

11.

Stock-Based Compensation

Years ended December 31,

2022

2021

2020

 — %

 100.00 %

 100.00 %

 11.96 %

 88.04 %

 100.00 %

 — %

 100.00 %

 100.00 %

The Company’s Amended and Restated 2013 Equity Incentive Plan (the "Equity Plan") permits the grant of restricted
stock awards, stock options, stock appreciation rights, performance units, and other equity-based awards up to an
aggregate of 1,700,000 shares of common stock. As of December 31, 2022, the Company had 398,110 shares of
common stock available for issuance under the Equity Plan.

During the years ended December 31, 2022, 2021, and 2020, the Company granted an aggregate of 288,677, 166,768
and 176,382 shares of restricted stock to employees and nonemployee directors, respectively. The grant date fair value
of the restricted stock awards granted during the years ended December 31, 2022, 2021, and 2020 was $4.2 million,
$2.1 million and $2.8 million, respectively. Employee restricted stock awards generally vest over a period of two
years: one-third immediately on the grant date and the remaining two-thirds in equal amounts on the first two
anniversaries following the grant date, subject to continued service to the Company. Beginning with grants made in
2021, executive officers' restricted shares generally vest over a period of three years: two-fifths immediately on the
grant date and the remaining three-fifths in equal amounts on the first three anniversaries following the grant date,
subject to continued service to the Company. Non-employee director restricted stock awards vest either immediately
upon grant or over a period of one year, subject to continued service to the Company. Unvested restricted stock awards
are entitled to receive dividends from their grant date.

During the years ended December 31, 2022, 2021, and 2020, the Company issued performance-based awards in the
form of restricted stock units to certain employees. The performance period for these awards is three years, with a
required two-year service period immediately following the expiration of the performance period in order to fully vest.
There were no performance-based awards issued or vested in 2022. During the three months ended December 31,
2021, 5,760 shares were issued with a grant date fair value of $15.19 per share due to the partial vesting of
performance units awarded to certain employees in 2017. Of those shares, 1,926 were surrendered by the employees
for income tax withholdings. During the three months ended December 31, 2020, 10,842 shares were issued with a
grant date fair value of $11.11 per share due to the partial vesting of performance units awarded to certain employees
in 2016 and 2017. Of those shares, 3,165 were surrendered by the employees for income tax withholdings. During the
three months ended March 31, 2020, 10,600 shares were issued with a grant date fair value of $18.08 per share due to
the partial vesting of performance units awarded to certain employees in 2017. Of those shares, 3,677 were
surrendered by the employees for income tax withholdings.

F-44

During the years ended December 31, 2022, 2021, and 2020, the Company recognized $3.8 million, $2.6 million and 
$2.9 million of stock-based compensation, respectively. As of December 31, 2022, the total unrecognized 
compensation cost related to unvested restricted shares was $1.1 million, substantially all of which the Company 
expects to recognize over the next 27 months.

Compensation cost relating to stock-based compensation for the years ended December 31, 2022, 2021, and 2020 was 
recorded as follows (in thousands):

General and administrative expense

General contracting and real estate services expenses

Capitalized in conjunction with development projects

Total stock-based compensation cost

$ 

$ 

Years Ended December 31, 

2022

2021

2020

1,905  $ 

1,505  $ 

1,342 

530 

738 

329 

3,777  $ 

2,572  $ 

1,615 

763 

483 

2,861 

The following table summarizes the changes in the Company’s unvested restricted stock awards during the year ended 
December 31, 2022:

Unvested as of January 1, 2022

Granted

Vested

Forfeited

Unvested as of December 31, 2022

Restricted Stock
Awards

Weighted Average 
Grant Date Fair 
Value Per Share

151,812  $ 

288,677 

(190,525)   

(30,658)   

219,306  $ 

14.24 

14.60 

14.90 

14.23 

14.15 

Restricted stock awards granted and vested during the year ended December 31, 2022 include 52,088 shares tendered 
by employees to satisfy minimum statutory tax withholding obligations.

12. 

Fair Value of Financial Instruments

Fair value measurements are based on assumptions that market participants would use in pricing an asset or a liability. 
The hierarchy for inputs used in measuring fair value is as follows:

Level 1 Inputs — quoted prices in active markets for identical assets or liabilities
Level 2 Inputs — observable inputs other than quoted prices in active markets for identical assets and 
liabilities 
Level 3 Inputs — unobservable inputs

Except as disclosed below, the carrying amounts of the Company’s financial instruments approximate their fair values. 
Financial assets and liabilities whose fair values are measured on a recurring basis using Level 2 inputs consist of 
interest rate swaps and caps. The Company measures the fair values of these assets and liabilities based on prices 
provided by independent market participants that are based on observable inputs using market-based valuation 
techniques.

Financial assets and liabilities whose fair values are not measured at fair value but for which the fair value is disclosed 
include the Company's notes receivable and indebtedness. The fair value is estimated by discounting the future cash 
flows of each instrument at estimated market rates consistent with the maturity, credit characteristics, and other terms 
of the arrangements, which are Level 3 inputs under the fair value hierarchy.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. For 
disclosure purposes, the level within which the fair value measurement is categorized is based on the lowest level input 
that is significant to the fair value measurement.

F-45

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Considerable judgment is used to estimate the fair value of financial instruments. The estimates of fair value presented 
herein are not necessarily indicative of the amounts that could be realized upon disposition of the financial 
instruments.

The carrying amounts and fair values of the Company’s financial instruments as of December 31, 2022 and 2021 were 
as follows (in thousands):

Indebtedness, net (a)(b)
Notes receivable

Interest rate swap liabilities

Interest rate swap and cap assets

December 31, 

2022

2021

Carrying 
Value

Fair 
Value

Carrying 
Value

Fair 
Value

$ 

1,079,233  $ 

1,058,530  $ 

966,253  $ 

136,039 

— 

29,115 

136,039 

— 

29,115 

126,429 

3,467 

2,926 

983,863 

126,429 

3,467 

2,926 

_______________________________________
(a) The values as of December 31, 2021 include loans reclassified to liabilities related to assets held for sale. 
(b) Excludes $11.0 million and $7.3 million of deferred financing costs as of December 31, 2022 and 2021, respectively.

13. 

Income Taxes

The income tax benefit (provision) for the years ended December 31, 2022, 2021, and 2020 comprised the following 
(in thousands):

Federal income taxes:

Current

Deferred

State income taxes:

Current

Deferred

Income tax benefit

Years Ended December 31, 

2022

2021

2020

$ 

$ 

—  $ 

122 

— 

23 

145  $ 

722  $ 

(100)   

139 

(19)   

742  $ 

290 

(18) 

14 

(3) 

283 

As of December 31, 2022 and 2021, the Company had $1.4 million and $1.3 million, respectively, of net deferred tax 
assets representing net operating losses of the TRS that are being carried forward and basis differences in the assets of 
the TRS. The deferred tax assets are presented within other assets in the consolidated balance sheets. 

Management has evaluated the Company’s income tax positions and concluded that the Company has no uncertain 
income tax positions as of December 31, 2022 and 2021. The Company is generally subject to examination by the 
applicable taxing authorities for the tax years 2019 through 2022. The Company does not currently have any ongoing 
tax examinations by taxing authorities.

F-46

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
    
    
 
 
 
 
 
 
 
 
 
 
 
14. 

Other Assets

Other assets were comprised of the following as of December 31, 2022 and 2021 (in thousands):

Leasing costs, net

Leasing incentives, net

Interest rate swaps and caps

Prepaid expenses and other

Pre-acquisition and pre-development costs

Other assets

15. 

Other Liabilities

December 31, 

2022

2021

$ 

15,005  $ 

2,697 

29,115 

30,516 

8,030 

$ 

85,363  $ 

13,043 

3,330 

2,926 

18,345 

8,283 

45,927 

Other liabilities were comprised of the following as of December 31, 2022 and 2021 (in thousands):

Dividends and distributions payable

Acquired lease intangibles, net

Prepaid rent and other

Security deposits

Interest rate swaps

Guarantee liability

Other liabilities

16. 

Acquired Lease Intangibles

December 31, 

2022

2021

$ 

19,777  $ 

18,418 

10,935 

4,026 

— 

899 

$ 

54,055  $ 

17,245 

19,256 

11,294 

3,371 

3,467 

1,243 

55,876 

The following table summarizes the Company’s acquired lease intangibles as of December 31, 2022 (in thousands):

In-place lease assets

Above-market lease assets

Above/Below-market ground lease assets

Below-market lease liabilities

Gross Carrying

Amount

December 31, 2022

Accumulated

Amortization 

Net Carrying

Amount

$ 

180,598  $ 

79,320  $ 

101,278 

7,748 

5,075 

32,355 

5,156 

948 

13,937 

2,592 

4,127 

18,418 

The following table summarizes the Company’s acquired lease intangibles as of December 31, 2021 (in thousands):

In-place lease assets
Above-market lease assets
Above/Below-market ground lease assets
Below-market lease liabilities

Gross Carrying

Amount

December 31, 2021

Accumulated

Amortization

Net Carrying

Amount

$ 

126,528  $ 
7,442 
5,075 
30,798 

67,486  $ 

4,446 
810 
11,542 

59,042 
2,996 
4,265 
19,256 

F-47

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
During the years ended December 31, 2022, 2021, and 2020, the Company recognized the following amortization of 
intangible lease assets and liabilities (in thousands):

Intangible lease assets
In-place lease assets
Above-market lease assets
Above/Below-market ground lease assets
Intangible lease liabilities
Below-market lease liabilities

2022

Years Ended December 31, 
2021

2020

$ 

15,767  $ 
641 
138 

13,210  $ 
595 
144 

2,395 

2,148 

6,935 
300 
213 

1,119 

As of December 31, 2022, the weighted-average remaining lives of in-place lease assets, above-market lease assets, 
above/below-market ground lease assets, and below-market lease liabilities were 9.8 years, 5.0 years, 42.2 years and 
11.3 years, respectively. As of December 31, 2022, the weighted-average remaining life of below-market lease 
renewal options was 9.6 years.

Estimated amortization of acquired lease intangibles for each of the five succeeding years is as follows (in thousands):

Year ending December 31, 

2023

2024

2025

2026

2027

17.

Related Party Transactions

Rental Revenues

Depreciation and 
Amortization

$ 

1,709  $ 

1,712 

1,639 

1,646 

1,426 

13,495 

11,592 

10,582 

9,898 

9,263 

The Company provides general contracting and real estate services to certain related party entities that are included in
these consolidated financial statements. Revenue and Gross Profits from construction contracts with related party
entities of the Company were not material for the year ended December 31, 2022. Revenue from construction contracts
with related party entities of the Company were $23.6 million and $52.2 million for the years ended December 31,
2021, and 2020, respectively. Gross profits from such contracts were $1.7 million and $2.0 million for the years ended
December 31, 2021, and 2020, respectively. As of December 31, 2022 there were no outstanding balance from related
parties of the Company. As of December 31, 2021 there was  $4.1 million outstanding from related parties of the
Company included in net construction receivables. Real estate services fees from affiliated entities of the Company
were not material for any of the years ended December 31, 2022, 2021, and 2020. In addition, affiliated entities also
reimburse the Company for monthly maintenance and facilities management services provided to the properties. Cost
reimbursements earned by the Company from affiliated entities were not material for any of the years ended
December 31, 2022, 2021, and 2020.

The general contracting services described above include contracts with an aggregate price of $81.6 million with the
developer of a mixed-use project, including an apartment building, retail space, and a parking garage located in
Virginia Beach, Virginia. The developer is owned in part by executives and nonindependent directors of the Company,
not including the Chief Executive Officer and Chief Financial Officer. These contracts were executed in October and
December 2019 and as of December 31, 2022 were completed and resulted in aggregate gross profit of $3.9 million to
the Company, representing a gross profit margin of 5.1%. As part of these contracts and per the requirements of the
lender for this project, the Company issued a letter of credit for $9.5 million to secure certain performances of the
Company's subsidiary construction company under the contracts, of which $1.9 million remains outstanding as of
December 31, 2022 and is projected to expire in May 2023.

The Company provides general contracting services to the Harbor Point Parcel 3 and Harbor Point Parcel 4 ventures.
See Note 5 for more information. During the year ended December 31, 2022, the Company recognized gross profit of
$0.9 million relating to these construction contracts.

F-48

On October 1, 2020, the Company acquired Edison Apartments, a multifamily property located in downtown 
Richmond, Virginia, for consideration comprised of 633,734 Class A Units, the assumption of a $16.4 million loan 
payable, and the assumption of $1.1 million in other assets and liabilities. The seller of the project is comprised in part 
by members of the Company's management and board of directors. Additionally, a development fee of $1.8 million, 
which was included in the assumed assets and liabilities, was paid to the development group partially owned by 
members of the Company's management and board of directors.

18.

Commitments and Contingencies

Legal Proceedings

The Company is from time to time involved in various disputes, lawsuits, warranty claims, environmental and other
matters arising in the ordinary course of its business. Management makes assumptions and estimates concerning the
likelihood and amount of any potential loss relating to these matters.

The Company currently is a party to various legal proceedings, none of which management expects will have a
material adverse effect on the Company’s financial position, results of operations, or liquidity. Management accrues a
liability for litigation if an unfavorable outcome is determined to be probable and the amount of loss can be reasonably
estimated. If an unfavorable outcome is determined by management to be probable and a range of loss can be
reasonably estimated, management accrues the best estimate within the range; however, if no amount within the range
is a better estimate than any other, the minimum amount within the range is accrued. Legal fees related to litigation are
expensed as incurred. Management does not believe that the ultimate outcome of these matters, either individually or
in the aggregate, could have a material adverse effect on the Company’s financial position or results of operations;
however, litigation is subject to inherent uncertainties.

Under the Company’s leases, tenants are typically obligated to indemnify the Company from and against all liabilities,
costs, and expenses imposed upon or asserted against it as owner of the properties due to certain matters relating to the
operation of the properties by the tenant.

Guarantees

In connection with the Company's mezzanine lending activities and equity method investments, the Company has
made guarantees to pay portions of certain senior loans of third parties associated with the development projects. The
following table summarizes the outstanding guarantees made by the Company as of December 31, 2022 (in
thousands):

Development project

Interlock Commercial
Harbor Point Parcel 4 (a)
Total

_______________________________________
(a) As of December 31, 2022, no amounts have been funded on this senior loan.

Commitments

Payment 

guarantee amount Guarantee liability

$ 

$ 

37,450  $ 

32,910 
70,360  $ 

701 

198 
899 

The Company has a bonding line of credit for its general contracting construction business and is contingently liable 
under performance and payment bonds, bonds for cancellation of mechanics liens, and defect bonds. Such bonds 
collectively totaled $8.5 million and $2.1 million as of December 31, 2022 and 2021, respectively. In addition, during 
the year ended December 31, 2019, the Company issued a letter of credit for $9.5 million to secure certain 
performances of the Company's subsidiary construction company under a related party project, which was still in 
effect at December 31, 2022.

On January 7, 2021, the Operating Partnership entered into a $15.0 million standby letter of credit using the available 
capacity under the credit facility to guarantee the funding of its investment in the Harbor Point Parcel 3 joint venture, 
which is the developer of T. Rowe Price's new global headquarters. This letter of credit was available for draw down 

F-49

on the revolving credit facility in the event the Company did not meet its equity requirement. The letter of credit 
expired on January 4, 2022 and was not required to be renewed.

Unfunded Loan Commitments

The Company has certain commitments related to its notes receivable investments that it may be required to fund in 
the future. The Company is generally obligated to fund these commitments at the request of the borrower or upon the 
occurrence of events outside of the Company's direct control. As of December 31, 2022, the Company had three notes 
receivable with a total of $18.2 million of unfunded commitments. If commitments are funded in the future, interest 
will be charged at rates consistent with the existing investments. As of December 31, 2022, the Company has recorded 
a $0.3 million CECL allowance that relates to the unfunded commitments, which was recorded as a liability in Other 
liabilities in the consolidated balance sheet. See Note 6 for more information.

The Operating Partnership has entered into standby letters of credit related to the guarantee of future performance on 
certain of the Company’s construction contracts. Letters of credit generally are available for draw down in the event 
the Company does not perform. As of both December 31, 2022 and 2021, the Operating Partnership had outstanding 
letters of credit totaling $9.5 million, as noted above.  

Concentrations of Credit Risk

The majority of the Company’s properties are located in Hampton Roads, Virginia. For the years ended December 31, 
2022, 2021, and 2020, rental revenues from Hampton Roads properties represented 38%, 40% and 44%, respectively, 
of the Company’s rental revenues. Many of the Company’s Hampton Roads properties are located in the Town Center 
of Virginia Beach. For the years ended December 31, 2022, 2021, and 2020, rental revenues from Town Center 
properties represented 25%, 26% and 27%, respectively, of the Company’s rental revenues.

The Company also has a concentration of properties at Harbor Point in Baltimore, Maryland. For the years ended 
December 31, 2022, 2021, and 2020, rental revenues from Harbor Point properties represented  26%, 14% and 14%, 
respectively, of the Company's rental revenues.

A group of three construction customers comprised 89%, 58%, and 65% of the Company’s general contracting and 
real estate services revenues for the years ended December 31, 2022, 2021, and 2020, respectively. 

19.

Subsequent Events

The Company has evaluated subsequent events through the date on which this Form 10-K was filed, the date on which
these financial statements were issued, and identified the items below for discussion.

Real Estate

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

Indebtedness

Borrowings under the revolving credit facility were $94.0 million on February 17, 2023.

Equity

On January 5, 2023, the Company paid cash dividends of $12.8 million to common stockholders and the Operating
Partnership paid cash distributions of $3.9 million to holders of Class A Units. These dividends and distributions were
declared and accrued as of December 31, 2022.

On January 13, 2023, the Company paid cash dividends of $2.9 million to the holders of the Series A Preferred Stock.
These dividends were declared and accrued as of December 31, 2022.

F-50

/
n
o
i
t
c
u
r
t
s
n
o
C

g
n
i
y
r
r
a
C

t
e
N

d
e
t
a
l
u
m
u
c
c
A

d
n
a
g
n
d

i

l
i

u
B

o
t

t
n
e
u
q
e
s
b
u
S

d
n
a
g
n
d

i

l
i

u
B

f
o

r
a
e
Y

t
n
u
o
m
A
g
n
i
y
r
r
a
C
s
s
o
r
G

d
e
z
i
l
a
t
i
p
a
C

t
s
o
C

t
s
o
C

l
a
i
t
i
n
I

n
o
i
t
i
s
i
u
q
c
A

)
1
(

t
n
u
o
m
A

n
o
i
t
a
i
c
e
r
p
e
D

l
a
t
o
T

s
t
n
e
m
e
v
o
r
p
m

I

d
n
a
L

n
o
i
t
i
s
i
u
q
c
A

s
t
n
e
m
e
v
o
r
p
m

I

d
n
a
L

s
e
c
n
a
r
b
m
u
c
n
E

9
1
0
2

4
8
9
1

4
1
0
2

2
0
0
2

9
1
0
2
/
6
1
0
2

2
2
0
2
/
6
1
0
2

9
1
0
2
/
0
1
0
2

9
0
0
2

0
2
0
2

4
0
0
2

2
0
0
2

1
0
0
2
-
7
9
9
1

6
1
0
2
/
0
8
9
1

6
1
0
2

5
1
0
2
/
0
8
9
1

6
1
0
2
/
5
9
9
1

8
0
0
2

1
2
0
2

4
0
0
2

4
1
0
2
/
8
9
9
1

1
2
0
2
/
7
1
0
2

4
1
0
2

6
0
0
2

9
9
9
1

8
1
0
2

8
1
0
2
/
7
1
0
2

9
1
0
2
/
0
0
0
2

0
2
0
2
/
0
2
0
2

6
1
0
2
/
4
0
0
2

8
9
9
1

1
2
0
2
/
0
9
9
1

8
1
0
2
/
7
1
0
2

8
9
9
1

6
1
0
2
/
4
0
0
2

0
1
1
,
4
3

5
4
7
,
8
2

8
4
3
,
7
1

4
0
2
,
5
9
1

7
3
4
,
3
3

7
0
2
,
1
1

0
7
1
,
5
7

1
4
8
,
0
1

2
7
3
,
4
0
1

4
3
4
,
0
1
5

2
6
7
,
7

5
4
5
,
0
1

6
0
5
,
4

2
4
6
,
9

3
8
0
,
2

4
8
1
,
1
2

0
1
9
,
2
2

5
5
3
,
1

8
3
7
,
5
2

3
8
6
,
5
1

9
0
2
,
4

0
0
8
,
3

6
6
7
,
8
2

0
3
0
,
1
1

0
8
1
,
3

6
6
7
,
0
2

6
0
6
,
0
2

0
1
2
,
0
2

9
8
4
,
9
3

2
4
4
,
5
1

1
5
7
,
2
1

6
5
6
,
5
2

7
5
1
,
8

9
9
8
,
2

9
2
8
,
1
3

$

1
3
8
,
3
1

$

1
4
9
,
7
4

$

9
5
9

,

6
4

$

2
8
9

$

9
5
9

,

6
4

$

6
5
4
,
2

3
8
5
,
4

8
7
9
,
3

5
6
2
,
3
4

9
2
9
,
4
1

7
5
9
,
5

1
5
9
,
0
1

0
1
8
,
7

$

$

0
6
7
,
7
0
1

3
4
0
,
0
1

$

$

0
1
0
,
2
7

4
0
8
,
9
1

4
3
0

,

0
7

9
0
5

,

9
1

7
8
7
,
9
9
1

,

5
3
6
8
7
1

5
1
4
,
7
3

6
3
1
,
6
2

7
2
1
,
1
8

2
9
7
,
1
2

4
0
5
4
3

,

6
7
1

,

5
2

6
6
2

,

5
6

9
3
7

,

1
2

2
8
1
,
2
1
1

2
8
1
2
1
1

,

4
9
1
,
8
1
6

$

4
0
0

,

4
7
5

5
0
8
,
7
1

$

2
9
0

,

7
1

$

$

5
2
4
,
7

2
5
1
,
5

3
1
3
,
3

5
5
4

5
1
1
,
5

8
4
6
,
2

6
8
0
,
2

4
6
7
,
1

5
0
3
,
3

5
6
2
,
4

2
8
9

7
7
4
,
1

8
4
0
,
8

2
2
5
,
2

8
8
1
,
3

5
9
6
,
2

2
3
1
,
2

7
0
6
,
2

3
9
9
,
2

4
4
0
,
1

7
1
2
,
1

8
8
3
,
2

9
9
4
,
4

9
0
6
,
1
1

0
7
9
,
7
1

8
5
6
,
9

5
5
9
,
2
1

8
3
5
,
2

9
9
2
,
6
2

8
5
5
,
5
2

1
4
4
,
3

2
0
5
,
7
2

8
8
9
,
8
1

4
7
4
,
8

7
7
2
,
5

8
4
7
,
9
2

8
7
0
,
9
1

2
0
7
,
5

4
5
9
,
3
2

1
0
3
,
3
2

2
4
3
,
2
2

6
9
0
,
2
4

5
3
4
,
8
1

0
6
3
,
4
2

0
0
7
,
6
2

4
7
3
,
9

7
8
2
,
5

8
2
3
,
6
3

3
0
9

,

7
1

8
5
6
9

,

5
4
5

,

0
1

1
2
4
2

,

8
6
6
8
1

,

2
2
0

,

1
1

3
2
3

,

3

2
0
5
7
2

,

8
8
8

,

3
1

9
4
0

,

8

9
9
1
1
2

,

4
7
1
4

,

2
1
5

,

6
1

8
4
1

,

4

9
1
9

,

0
2

0
4
0

,

1
2

9
1
3

,

0
2

0
1
0
3
3

,

5
8
1

,

1
1

4
8
0

,

3
2

2
7
3

,

0
2

2
0
0
8

,

7
3
1
4

,

8
6
2

,

1
2

5
9
2

6
7
9

,

1

2
5
1
1
2

,

0
6
9

1
1
9
2

,

4
3
0

,

0
7

9
0
5

,

9
1

2
9
6
1

,

2
0
3
6

,

7
0
9

,

4
1

1
6
8

,

5
1

7
7
5

3
5

—

9
3
7

,

1
2

2
8
1
2
1
1

,

0
9
1

,

4
4

$

1
0
9
3
9
2

,

3
1
7

7
6

—

7
1
1

0
1
4

,

2

1
3
6
7

,

6
3
5

,

4
1

8
1
1

—

5
2
4

0
0
1

,

5

9
4
5
8

,

3
0
1
1

,

6
6
5

,

2

4
5
5

,

1

5
3
0

,

3

1
6
2

,

2

3
2
0

,

2

6
8
0
9

,

0
5
2

,

7

6
7
2

,

1

8
2
3

,

6

2
7
3
1

,

0
5
1
1

,

0
6
0

,

5
1

$

2
9
0

,

7
1

3
0
9

,

7
1

8
5
6
9

,

5
3
5

,

1

1
2
4
2

,

3
3
5
8

,

0
0
1

3
2
3

,

3

1
5
3

2
6
7

9
2

9
4
0

,

8

4
7
1
4

,

2
1
5

,

6
1

8
3
3

8
4
1

,

4

0
4
0

,

1
2

3
3
4

0
5
2
5

,

5
7
9

4
8
0

,

3
2

1
7
2

8
3
1

7
3
1
4

,

8
8
0

,

1

$

$

—

—

—

—

—

2
0
2

,

8
2

9
6
2

,

0
1

9
8
6

,

4
6

3
4
9
6
7
1

,

3
0
1

,

0
8
2

—

—

—

—

0
1
0

,

9

5
3
1

,

0
1

2
2
9

,

0
1

—

1
5
1

,

7
2

6
2
1

,

3
1

—

0
7
1

,

1
2

—

—

—

—

1
8
5

,

0
2

6
8
8

,

9
1

0
6
7
7
2

,

0
1
2

,

0
1

—

4
6
8
7

,

1
0
1

,

0
2

—

0
8
1

,

0
2

$

2
8
9

$

5
8
7
,
0
3

$

$

$

5
9
2

6
7
9
,
1

2
5
1
,
1
2

0
6
9

1
1
9
,
2

1
6
8
,
5
1

3
5

—

)
2
(

)
2
(

)
2
(

)
2
(

)
2
(

)
2
(

—

—

—

—

—

—

7
2
3
,
9
6

0
0
0
,
5
7
1

0
9
1
,
4
4

$

2
1
1
,
5
7
2

3
1
7

7
6

—

7
1
1

0
1
4
,
2

1
3
6
,
7

6
3
5
,
4
1

$

8
1
1

—

5
2
4

0
0
1
,
5

9
4
5
,
8

3
0
1
,
1

6
6
5
,
2

4
5
5
,
1

5
3
0
,
3

1
6
2
,
2

3
2
0
,
2

6
8
0
,
9

0
5
2
,
7

6
7
2
,
1

8
2
3
,
6

2
7
3
,
1

0
5
1
,
1

0
6
0
,
5
1

)
2
(

)
2
(

)
2
(

)
2
(

)
2
(

)
2
(

)
2
(

)
2
(

)
2
(

)
2
(

)
2
(

)
2
(

—

—

—

—

—

—

—

—

—

—

—

—

—

—

0
4
9
,
9
1

)
2
(

—

5
9
1
,
2
2

2
9
8
,
3
1

4
9
4
,
2
1

)
2
(

)
3
(

)
2
(

)
2
(

)
2
(

)
2
(

—

—

—

—

—

—

$

$

r
e
w
o
T
r
e
l
f
f
o
H
a
d
a
m
A

r

e
c
i
f
f

O
g
n
i
s
s
o
r
C
s
k
o
o
r
B

e
c
i
f
f

O
n
o
i
t
a
l
l
e
t
s
n
o
C

t
e
e
r
t
S
n
i
a

M
5
2
5
4

f
r
a
h
W

t
e
e
r
t
S
s
e
m
a
h
T

s
u
b
m
u
l
o
C
o
w
T

r
e
t
n
e
C
y
t
i

C
e
n
O

s
u
b
m
u
l
o
C
e
n
O

e
c
i
f
f

O

f
r
a
h
W

s
l
l
i

W

e
c
i
f
f
o
l
a
t
o
T

l
i
a
t
e
R

r
e
t
n
e
C
g
n
i
p
p
o
h
S
k
e
e
r
C
d
a
o
r
B

l
i
a
t
e
R
k
r
a
P
l
a
r
t
n
e
C
9
4
2

t
n
e
m
n
i
a
t
r
e
t
n
E
x
e
p
A

l
i
a
t
e
R
g
n
i
s
s
o
r
C
s
k
o
o
r
B

a
z
a
l
P
r
o
o
m
d
a
o
r
B

I
I

e
g
a
l
l
i

V
s
u
b
m
u
l
o
C

e
g
a
l
l
i

V
s
u
b
m
u
l
o
C

l
i
a
t
e
R

t
e
e
r
t
S
e
c
r
e
m
m
o
C

a
z
a
l
P
h
c
a
e
B
y
a
r
l
e
D

e
r
a
u
q
S
k
c
o
m
m
D

i

l
i
a
t
e
R
a
z
a
l
P
n
i
a
t
n
u
o
F

e
r
a
u
q
S
r
e
i
r
b
n
e
e
r
G

r
e
t
n
e
C
g
n
i
p
p
o
h
S
e
e
r
t
n
e
e
r
G

p
o
t
l
l
i

H

t
a

e
c
a
l
p
t
e
k
r
a

M

k
e
e
r
C

l
l
i

M

t
a

t
e
k
r
a

M

e
r
a
u
q
S
n
o
t
x
e
N

t
e
k
r
a

M
n
o
t
p
m
a
H
h
t
r
o
N

r
e
t
n
e
C
e
t
n
i
o
P
h
t
r
o
N

e
c
a
l
p
t
e
k
r
a

M
y
a
w
k
r
a
P

e
c
a
l
P
n
o
s
r
e
t
t
a
P

e
g
a
l
l
i

V
k
o
o
l
r
e
v
O

e
r
t
n
e
C
y
a
w
k
r
a
P

l
a
g
e
R
g
r
u
b
n
o
s
i
r
r
a
H

e
r
a
u
q
S
n
o
t
g
n
i
x
e
L

e
g
a
l
l
i

V
y
r
u
b
n
a
H

F-51

n
o
i
t
a
i
c
e
r
p
e
D
d
e
t
a
l
u
m
u
c
c
A
d
n
a
s
t
n
e
m

t
s
e
v
n
I

e
t
a
t
s
E

l
a
e
R
d
e
t
a
d
i
l
o
s
n
o
C
—

I
I
I
E
L
U
D
E
H
C
S

2
2
0
2

,
1
3
r
e
b
m
e
c
e
D

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
/
n
o
i
t
c
u
r
t
s
n
o
C

g
n
i
y
r
r
a
C

t
e
N

d
e
t
a
l
u
m
u
c
c
A

d
n
a
g
n
d

i

l
i

u
B

o
t

t
n
e
u
q
e
s
b
u
S

d
n
a
g
n
d

i

l
i

u
B

f
o

r
a
e
Y

t
n
u
o
m
A
g
n
i
y
r
r
a
C
s
s
o
r
G

d
e
z
i
l
a
t
i
p
a
C

t
s
o
C

t
s
o
C

l
a
i
t
i
n
I

n
o
i
t
a
i
c
e
r
p
e
D

l
a
t
o
T

s
t
n
e
m
e
v
o
r
p
m

I

d
n
a
L

n
o
i
t
i
s
i
u
q
c
A

s
t
n
e
m
e
v
o
r
p
m

I

d
n
a
L

s
e
c
n
a
r
b
m
u
c
n
E

5
1
0
2

2
0
0
2

5
1
0
2
/
1
0
0
2

8
1
0
2

5
1
0
2
/
7
0
0
2

9
1
0
2
/
0
0
0
2

6
1
0
2
/
7
7
9
1

6
1
0
2
/
1
9
9
1

6
1
0
2
/
6
0
0
2

7
0
0
2

1
1
0
2

3
3
5
,
9

0
1
5
,
3
1

3
5
7
,
0
2

7
0
8
,
2
7

4
1
1
,
9

8
0
1
,
3

3
3
6
,
4
2

5
3
1
,
5
3

3
9
2
,
7

7
0
4
,
1

2
5
5
,
1

2
2
0
2
/
5
1
0
2
/
6
6
9
1

3
9
6
,
3
2

n
o
i
t
i
s
i
u
q
c
A

)
1
(

t
n
u
o
m
A

)
4
(

1
2
0
2

6
0
0
2

4
1
0
2

0
2
0
2

8
1
0
2

8
1
0
2

4
1
0
2
/
3
1
0
2

3
1
0
2
/
9
0
0
2

1
2
0
2

2
2
0
2
/
6
1
0
2

9
1
0
2
/
8
1
0
2

0
2
0
2
/
4
1
0
2
/
9
1
9
1

7
7
9
,
9
1

6
1
5
,
7
8

1
3
0
,
6
5

8
8
5
,
1
2

1
7
8
,
4
2

9
0
1
,
9
4

2
2
9
,
4
4

3
6
9
,
1
2

9
1
1
,
6
2

7
7
9
,
7
2

6
9
4
,
2
4

0
0
6
,
2
4

9
1
0
2
-
6
1
0
2
/
4
0
0
2

9
7
9
,
8
3

5
1
7
,
1
3
6

$

$

4
9
2
,
6

9
6
1
,
5
6
4

2
1
6
,
3
1
6
,
1

$

$

$

1
1
1

6
1
6
,
2

7
4
1
,
2

3
2
6
,
3

3
4
3
,
6

2
1
5
,
2

2
8
3
,
5

6
9
2
,
3

0
6
6
,
6

9
2
4
,
1

0
7
2
,
1

4
5
7
,
1

3
1
5
,
4

8
2
6
,
4
3
1

2
7
4

2
6
7
,
1
1

1
6
3

2
1
9
,
1

4
8
9
,
7

9
3
0
,
1

1
1
4
,
6

7
2
6
,
7

6
7
8
,
3

—

5
0
6
,
1
1

6
2
5
,
4
3

5
7
5
,
7
8

—

3
6
9
,
9
2
3

4
0
8
,
3
2

9
4
1
,
2
1

7
5
6
,
5
1

6
7
3
,
4
2

0
5
1
,
9
7

6
2
6
,
1
1

0
9
4
,
8

9
2
9
,
7
2

5
9
7
,
1
4

2
2
7
,
8

7
7
6
,
2

6
0
3
,
3

1
9
2
9

,

9
0
9

,

8

9
3
3

,

5
1

6
2
4
4
1

,

8
9
8

,

4
3

8
0
5

,

7

0
0
3
8

,

9
9
7

,

3
1

7
5
5
1
3

,

2
5
9

,

6

1
0
6

,

2

6
0
3
3

,

3
1
5

,

4
1

8
1
3

0
4
2

,

3

0
5
9
9

,

2
5
2

,

4
4

0
9
1

8
1
1

,

4

0
3
1

,

4
1

8
3
2
0
1

,

0
7
7

,

1

6
7

—

2
9
4
,
3
4

9
9
5

,

3
2

3
9
8

,

9
1

1

3
9
5

9
3
3

,

5
1

7
5
0
2

,

0
5
5

,

4

8
0
5

,

7

0
0
3
8

,

9
2
1

,

1

7
0
6
5

,

3
4
4

1
0
6

,

2

6
0
3
3

,

1
6
9

$

$

3
4
3
,
6
6
7

$

5
2
9
9
4
5

,

9
4
4
,
0
2

$

5
8
2

,

8
1

$

$

4
6
1

,

2

$

2
7
1

8
1
4

,

6
1
2

$

9
3
7

,

3
0
2

$

$

8
7
2
,
9
9

2
9
3
,
6
5

0
0
5
,
3
2

5
5
8
,
2
3

8
4
1
,
0
5

3
3
3
,
1
5

0
9
5
,
9
2

5
9
9
,
9
2

2
8
5
,
9
3

6
9
4
,
2
4

6
2
1
,
7
7

8
7
2

,

9
9

2
1
6
4
5

,

2
7
0
0
2

,

2
6
5

,

1
3

4
1
3

,

5
4

2
2
6

,

5
4

0
1
0
6
2

,

8
4
3

,

9
2

2
8
5
9
3

,

6
9
4

,

7
3

1
4
1

,

6
7

$

$

$

4
9
2
,
6

4
4
7
,
2
5
5

$

$

—

2
2
3

,

3
2
5

5
7
5
,
3
4
9
 1
$

,

1
5
2

,

7
4
6

,

1

$

$

$

—

0
8
7
1

,

8
2
4
3

,

3
9
2

,

1

4
3
8

,

4

1
1
7

,

5

0
8
5
3

,

7
4
6

—

5
8
9

0
0
0

,

5

4
9
2
6

,

2
2
4

,

9
2

4
2
3
6
9
2

,

$

$

$

2
1
8

,

3

9
7
0
4
5

,

0
9
4
1

,

2
6
5

,

1
3

4
1
3

,

5
4

2
2
6

,

5
4

6
1
5
2

,

8
4
3

,

9
2

7
7
4
4

,

6
9
4

,

7
3

1
4
1

,

6
7

9
2
0
2
3
3

,

—

9
6
6

,

9
2
8

—

0
9
2
9

,

6
1
3

,

8

9
6
3

,

2
1

8
4
3

,

0
3

—

—

0
7
6

,

2
1

0
5
9
5
2

,

9
0
5

,

6

—

—

8
3
6

,

2
2

6
8
1
6
4
3

,

3
1
1
8
1

,

6
6
4
5
9

,

3
3
5

2
8
5

,

8
1

—

—

—

—

—

—

4
9
4

,

3
2

5
0
1

,

5
3

$

$

$

—

3
9
2

,

1
9
1

2
8
5

,

7
1
8

8
1
3

0
4
2
,
3

3
1
5
,
4
1

0
5
9
,
9

2
5
2
,
4
4

0
9
1

8
1
1
,
4

0
3
1
,
4
1

8
3
2
,
0
1

0
7
7
,
1

6
7

—

3
9
8
,
9
1

)
2
(

)
2
(

)
2
(

)
3
(

)
2
(

)
2
(

)
2
(

)
2
(

)
2
(

)
2
(

)
2
(

—

—

—

3
1
0
,
8

3
8
2
,
1
1

—

—

—

5
9
1
,
6
2

—

—

—

—

$

$

$

$

$

8
1
4
,
6
1
2

$

2
1
0
,
4
1
1

—

0
8
7
,
1

8
2
4
,
3

3
9
2
,
1

4
3
8
,
4

1
1
7
,
5

0
8
5
,
3

7
4
6

—

4
6
1
,
2

$

5
8
9

0
0
0
,
5

2
2
4
,
9
2

4
9
2
,
6

4
2
3
,
6
9
2

$

$

$

)
2
(

—

—

0
3
6
,
7
2

3
6
5
,
5
1

0
8
9
,
3
2

0
0
0
,
0
3

2
6
8
,
1
3

6
2
9
,
0
2

9
6
2
,
6
1

5
3
5
,
5
1

—

3
4
2
,
1
4

8
0
0
,
3
2
2

—

2
3
1
,
2
1
6

$

$

$

$

$

e
c
a
l
p
t
e
k
r
a

M

l
l
a
H
y
r
r
e
P

e
r
a
u
q
S
e
k
o
r
b
m
e
P

s
n
o
m
m
o
C
e
g
d
i
r
b
d
n
a
S

s
n
o
m
m
o
C

l
l
i

M
d
e
R

a
z
a
l
P
e
c
n
e
d
i
v
o
r
P

l
i
a
t
e
R

r
e
i
m
e
r
P

e
r
a
u
q
S
e
t
a
g
h
t
u
o
S

s
p
o
h
S
e
r
o
h
s
h
t
u
o
S

l
i
a
t
e
R
6
5
o
i
d
u
t
S

l
i
a
t
e
R
h
t
u
o
S

e
r
a
u
q
S
h
t
u
o
S

r
e
t
e
e
T
s
i
r
r
a
H
k
c
e
N
e
r
y
T

e
g
a
l
l
i

V

r
e
v
o
d
n
e
W

t
e
e
r
t
S
k
c
o
D
5
0
3
1

l
l
i

M

e
l
c
i
n
o
r
h
C

t
n
i
o
P
5
0
4
1

s
t
n
e
m

t
r
a
p
A
n
o
s
i
d
E

s
t
n
e
m

t
r
a
p
A
e
r
o
c
n
E

l
i
a
t
e
r

l
a
t
o
T

y
l
i

m
a
f
i
t
l
u
M

s
t
n
e
m

t
r
a
p
A
e
l
l
i
v
s
e
n
i
a
G

s
t
n
e
m

t
r
a
p
A
e
d
i
s
n
e
e
r
G

s
t
n
e
m

t
r
a
p
A
y
t
r
e
b
i
L

s
t
n
e
m

t
r
a
p
A

r
e
i
m
e
r
P

g
n
i
d
n
a
L
s
’
h
t
i

m
S

t
s
o
P
n
r
e
h
t
u
o
S

n
a
t
i
l
o
p
o
m
s
o
C
e
h
T

y
l
i

m
a
f
i
t
l
u
m

l
a
t
o
T

s
t
n
e
m

t
s
e
v
n
i

e
t
a
t
s
e

l
a
e
R

t
n
e
m
p
o
l
e
v
e
d
r
o
f
d
l
e
H

F-52

.
2
2
0
2

,
1
3

r
e
b
m
e
c
e
D

f
o
s
a
n
o
i
l
l
i

m
5
.
4
6
4
,
1
$
s
a
w
s
e
s
o
p
r
u
p
x
a
t

e
m
o
c
n
i

l
a
r
e
d
e
f

r
o
f

e
t
a
t
s
e

l
a
e
r

f
o

t
n
u
o
m
a

g
n
i
y
r
r
a
c

t
e
n

e
h
T

.
2
2
0
2

,
1
3

r
e
b
m
e
c
e
D

f
o

s
a
y
t
i
l
i
c
a
f

t
i
d
e
r
c

e
h
t

r
o
f

l
a
r
e
t
a
l
l
o
c

e
s
a
b

g
n
i
w
o
r
r
o
b

s
i
y
t
r
e
p
o
r
p

s
i
h
t

f
o

n
o
i
t
r
o
p
A

.
2
2
0
2

,
1
3

r
e
b
m
e
c
e
D

f
o

s
a
y
t
i
l
i
c
a
f

t
i
d
e
r
c

e
h
t

r
o
f

l
a
r
e
t
a
l
l
o
c

e
s
a
b
g
n
i
w
o
r
r
o
B

.
2
2
0
2

,
1
3

r
e
b
m
e
c
e
D

f
o

s
a

s
s
e
r
g
o
r
p

n
i

n
o
i
t
c
u
r
t
s
n
o
C

)
1
(

)
2
(

)
3
(

)
4
(

_
_
_
_
_
_
_
_
_
_
_
_
_
_
_
_
_
_
_
_
_
_
_
_
_
_
_
_
_
_
_
_
_
_
_
_
_
_
_
_

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
s
r
a
e
y

9
3

s
r
a
e
y

0
2

—

5

s
r
a
e
y

7

—

3

)
r
e
t
r
o
h
s

f
i

,
e
f
i
l

l
u
f
e
s
u

d
e
t
a
m

i
t
s
e

r
o
(

e
s
a
e
l

d
e
t
a
l
e
r

e
h
t

f
o
m
r
e
T

d
e
t
a
l
u
m
u
c
c
A

n
o
i
t
a
i
c
e
r
p
e
D

e
t
a
t
s
E

l
a
e
R

s
t
n
e
m

t
s
e
v
n
I

,
1
3

r
e
b
m
e
c
e
D

1
2
0
2

2
2
0
2

1
2
0
2

2
2
0
2

5
6
9
,
3
5
2

$

4
1
8
,
5
8
2

$

7
1
9
,
7
5
7
,
1

$

8
3
4
,
7
3
7
,
1

$

—

—

)
9
0
8
,
4
1
(

)
0
1
0
,
5
(

8
6
6
,
1
5

4
1
8
,
5
8
2

—

—

)
6
9
3
,
0
1
(

—

5
4
5
,
4
5

5
2
3
,
6
8

3
2
7
,
3
8

—

)
8
4
8
,
3
8
(

)
9
7
6
,
6
0
1
(

)
1
1
4
(

—

7
6
4
,
3
9

3
2
4
,
2
4
2

)
2
4
3
,
9
2
1
(

$

3
6
9
,
9
2
3

$

8
3
4
,
7
3
7
,
1

$

5
7
5
,
3
4
9
,
1

$

s
t
n
e
m
e
v
o
r
p
m

i

l
a
t
i
p
a
C

s
t
n
e
m
e
v
o
r
p
m

i

t
n
a
n
e
T

t
n
e
m
p
i
u
q
E

s
g
n
i
d
l
i
u
B

s
t
n
e
m
e
v
o
r
p
m

i
d
n
a

s
t
s
o
c

n
o
i
t
c
u
r
t
s
n
o
C

r
a
e
y

e
h
t

f
o

g
n
i
n
n
i
g
e
b
t
a

e
c
n
a
l
a
B

s
n
o
i
t
a
c
i
f
i
s
s
a
l
c
e
R

n
o
i
t
a
i
c
e
r
p
e
D

s
n
o
i
t
i
s
i
u
q
c
A

s
n
o
i
t
i
s
o
p
s
i
D

r
a
e
y
e
h
t

f
o

d
n
e

t
a

e
c
n
a
l
a
B

F-53

:
s
e
v
i
l

l
u
f
e
s
u

d
e
t
a
m

i
t
s
e
g
n
i
w
o
l
l
o
f

e
h
t

r
e
v
o
s
i
s
a
b
e
n
i
l
-
t
h
g
i
a
r
t
s

a
n
o
d
e
t
a
i
c
e
r
p
e
d

s
i
y
t
r
e
p
o
r
p

g
n
i
c
u
d
o
r
p
e
m
o
c
n
I

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
CORPORATE  
INFORMATION

BOARD OF 
DIRECTORS
Daniel A. Hoffler 
Executive Chairman of the 
Board

EXECUTIVE 
MANAGEMENT
Louis S. Haddad 
President and Chief Executive 
Officer 

Louis S. Haddad 
President and Chief Executive 
Officer 

Matthew T. Barnes-Smith 
Chief Financial Officer and 
Treasurer/Secretary 

Eva S. Hardy  
Lead Independent Director 

Shawn J. Tibbetts 
Chief Operating Officer 

Eric E. Apperson 
President of Construction and 
Development 

Shelly R. Hampton 

President of Asset Management

James C. Cherry  
Independent Director 

George F. Allen  
Independent Director

James A. Carroll 
Independent Director 

Dennis H. Gartman  
Independent Director

A. Russell Kirk
Director

John W. Snow  

Independent Director

SHAREHOLDER 
INFORMATION
Corporate Office 
Armada Hoffler 
222 Central Park Avenue 
Suite 2100  
Virginia Beach, VA 23462 
757.366.4000

Independent Registered Public 
Accounting Firm 
Ernst & Young LLP 
The Edgeworth Building 
2100 East Cary Street, Suite 201  
Richmond, VA 23223 
804.344.6000

Transfer Agent 
Broadridge Corporate  
Issuer Solutions 

51 Mercedes Way 
Brentwood, NY 11717

Investor Services 
For questions regarding 

security ownership or to request 

printed information, please 

contact investorrelations@

armadahoffler.com or visit 

ir.armadahoffler.com.

EQUIT Y

CAPITALIZ ATION*

$1.2B

2

 ARMADA HOFFLER   |  2022 ANNUAL REPORT    

 
2
2
2
0
0
0
2
2
2
2
2
2

A
A
A
N
N
N
N
N
N
U
U
U
A
A
A
L
L
L

R
R
R
E
E
E
P
P
P
O
O
O
R
R
R
T
T
T

|
|
|

A
A
A
R
R
R
M
M
M
A
A
A
D
D
D
A
A
A
H
H
H
O
O
O
F
F
F
F
F
F
L
L
L
E
E
E
R
R
R

|
|
|

N
N
N
Y
Y
Y
S
S
S
E
E
E
:
:
:

A
A
A
H
H
H
H
H
H

WWW.ARMADAHOFFLER.COM
WWW.ARMADAHOFFLER.COM
WWW.ARMADAHOFFLER.COM

2022

2022

2022

ANNUAL

ANNUAL

ANNUAL

REPORT

REPORT

REPORT