Armada Hoffler Properties, Inc.

Ladies and gentlemen, this is the operator. Please stand by. Your conference will begin momentarily. Thank you for your patience. . . . . . Thank you. © transcript Emily Beynon Thank you. . . . . . © transcript Emily Beynon Thank you. Thank you. Good morning, ladies and gentlemen, and welcome to the Armada Huffler First Quarter 2024 Earnings Conference Call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Thursday, May 9, 2024. I would now like to turn the conference over to Chelsea Forrest, Director of Corporate Communications and Investor Relations. Please go ahead.

Good morning, and thank you for joining Armada Hostler's first quarter 2024 earnings conference call and webcast. On the call this morning, in addition to myself, is Lou Haddad, CEO, Matthew Barnes-Smith, CFO, and Sean Tibbetts, President and COO. The press release announcing our first quarter earnings along with our supplemental package were distributed this morning. A replay of this call will be available shortly after the conclusion of the call through June 8, 2024. The numbers to access the replay are provided in the earnings press release. For those who listened to the rebroadcast of this presentation, we remind you that the remarks made herein are as of today, May 9th, 2024, and will not be updated subsequent to the initial earnings call. During this call, we may make forward-looking statements, including our statements related to the future performance of our portfolio, our development pipeline, the impact of acquisitions and dispositions, our mezzanine program, our construction business, our liquidity position, our portfolio performance and financing activities, as well as comments on our guidance and outlook. Listeners are cautioned that any forward-looking statements are based upon management's beliefs, assumptions, and expectations, taking into account information that is currently available. These beliefs, assumptions, and expectations may change as a result of possible events or factors, not all of which are known and many of which are difficult to predict and generally beyond our control. These risks and uncertainties can cause actual results to differ materially from our current expectations, and we advise listeners to review the forward-looking statement disclosure in our press release that we distributed this morning and the risk factors disclosed in documents that we have filed with or furnished to the SEC. We will also discuss certain non-GAAP financial metrics, including but not limited to FFO and normalized FFO. Definitions of these non-GAAP measures, as well as reconciliations to the most comparable GAAP measures, are included in the quarterly supplemental package, which is available on our website at armadahoffler.com. I'll now turn the call over to Lou.

Thanks, Chelsea. Good morning, and thank you for joining us today. As you can see from our earnings release, it was another strong quarter here at Armada Hoffler. We continue to see our portfolio produce robust operating metrics. combined with new properties coming online gives us confidence in our earnings guidance as our operational success offsets the headwinds from higher interest rates. Before Sean and Matt give you the details on the quarter and projections for the rest of the year, I'll take a minute to reiterate our longstanding strategy with regard to capital allocation. As most of you know, management is the company's largest active equity holder with a 12% stake. This alignment with external investors gives us a different perspective than that of most REIT management teams and creates a strong aversion to dilution. While portfolio growth is an important goal over the long term and capital market activity is an important component of that growth, you have seen us recycle numerous assets at prices well above the stock market's implied valuations. This is the most efficient way to raise capital when Armada Hoffler common equity trades at an unacceptable discount. The current environment is just such a circumstance. With as many as five new properties coming online over the next 12 months, any necessary equity capital will be primarily raised by selling a couple of assets with significant embedded profits. We expect these transactions to produce a substantial amount of cash and to be relatively neutral to earnings. We recognize that leverage will remain elevated through the stabilization of the new properties. But with growing portfolio NOI and trophy quality assets, we are comfortable at these levels. We are confident about the quality of the developments, our initial underwriting, and the extensive expertise we have in market selection. I'll now turn the call over to Matt to highlight a couple of the quarterly metrics before Sean for the business update.