Armada Hoffler Properties, Inc.

Good morning, ladies and gentlemen, and welcome to the Armada Huffler AHH third quarter 2025 earnings conference call. At this time, all lines are in 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 November 4, 2025. I would now like to turn the conference over to Chelsea Forrest. Please go ahead.

Good morning, and thank you for joining Armada Hoffler's third quarter 2025 earnings conference call and webcast. On the call this morning, in addition to myself, is Sean Tibbetts, President and CEO, and Matthew Barnes-Smith, BFO. The press release announcing our third quarter earnings, along with our supplemental package, were distributed yesterday afternoon. A replay of this call will be available shortly after the conclusion of the call through December 4th, 2025. 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 are made herein as of today, November 4th, and will not be subsequent to this initial earnings call. During this call, we may make forward-looking statements, including statements related to the future performance of our portfolio or development 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 outlook. Listeners are cautioned that any forward-looking statements are based upon management beliefs, assumptions, and expectations, taking into account information that is currently available. These beliefs, assumptions, and expectations may change as a result of 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 certainties 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 we have filed with or furnished to the SEC. We will also discuss certain non-GAAP financial measures, including, but not limited to, FFO and normalized FFO. Definitions of these non-GAAP measures, as well as recommendations to the most comparable GAAP measures, are included in the quarterly supplemental package, which is available on our website at armadahoffler.com. I will now turn the call over to Sean.

Good morning, and thank you for joining us as we review Armada Hoffler's third quarter results. Before getting into the results, I want to thank our board of directors for appointing me chairman of the board effective the beginning of the year. I appreciate their confidence in me and our leadership team. We've made meaningful progress this year and have completed much of the hard work required to position the company for a strong performance over the next several years. We are simplifying the business and simultaneously driving operational excellence across the platform. Our teams are laser-focused on strengthening systems, streamlining processes, and leveraging technology for data-driven insights to enhance decision-making and portfolio performance. My priority is to ensure the market properly recognizes the unique value of our portfolio as we enter 2026 as a more focused, simpler, stronger REIT with a balance sheet position for growth. Our progress includes aligning the dividend with property level cash flows, refreshing the leadership team, replacing a director, and sharpening our focus on core operations. We also aligned our 2025 guidance with the planned reduction in fee income to better highlight the strength and stability of our recurring property earnings. We are confident in the strategic actions completed this year and remain focused on repositioning Armada Hoplar for sustained growth and long-term shareholder value creation. Our near-term objective is to demonstrate and unlock the value embedded in our real estate through continued consistent execution and transparent communication with investors. The Armada Hoplar portfolio continues to deliver consistent NOI growth, underscoring the quality of our assets and the consistency of our execution. At the same time, we are making progress enhancing the balance sheet quality and proactively managing our capital base, including leveraging capital recycling opportunities that strengthen long-term growth and financial flexibility. Our strategic foundation remains centered on quality, a core value that guides how we operate and allocate capital. We remain focused on maintaining a high-performing portfolio, optimizing property-level performance, and delivering reliable results quarter after quarter. The third quarter results were solid across our portfolio. As outlined in our earnings release, we delivered normalized FFO of $0.29 per diluted share, supported by consistent outperformance across our commercial asset classes, with overall portfolio occupancy averaging 96%, including 96.5% in office, 96% in retail, and 94.2% and multifamily. These results underscore steady demand and durable performance across all segments. Property level income continues to outperform our 2025 guidance, which contributed to beating consensus for the quarter. As we outlined in previous quarters, we adjusted our outlook for construction activity this year and remain on track with those revised projections. Higher NOI offsetting the construction adjustments has allowed us to maintain a 2025 normalized FFO guidance target range consistent with the original 2025 guidance target range, which we are narrowing to $1.03 to $1.07 per diluted share. This reflects our continued execution of the strategic shift away from reliance on fee income into an earning stream predominantly reliant on higher quality recurring property-level earnings. Now let me take a few minutes and walk through our key sectors. From a broader market perspective, fundamentals remain supportive for retail. Vacancy remains close to record lows. New supply is constrained, and retailers continue to show strong preference for high-traffic, open-air centers and grocery-anchored formats. According to Green Street, retail pricing per square foot posted double-digit annual growth in the second quarter, reinforcing our bullish view of this asset class. Our retail portfolio continues to demonstrate strength and resilience, supported by a focused strategy of owning properties located within submarkets where we can leverage or create a competitive advantage. Across these locations, we actively extract value through leasing, tenant reconfiguration and redevelopment initiatives, positioning our centers to benefit from broader national trends in retail. For the third quarter, our retail portfolio continued to exhibit these strong fundamentals. Renewal spreads averaged 6.5% on a cash basis, reflecting continued demand. Flip traffic across our centers, particularly at mixed-use destinations like Harbor Point and Southern Post, rose 13% compared to the prior quarter. demonstrating the success of our leasing and placemaking initiatives, rooted in driving consistent consumer engagement, and ultimately supporting rent growth. As we mentioned last quarter, we have filled all of our big box vacancies resulting from recent bankruptcies, including Conn's, Party City, and Joanne's, with higher credit tenants. This includes downsizing Burlington at Southgate and Colonial Heights to make room for a national sporting goods retailer, as well as Backfilling Party City with Boot Barn and Joanne with Burlington at Overlook Village in Asheville, strengthening the merchandising mix alongside anchors such as TJ Maxx, HomeGoods, and Ross. These transactions reflect broader retail market dynamics. Nationally, big box development has been limited, with few new entrants targeting infill markets. This constraint has elevated demand for existing well-located retail space High credit tenants are seeking locations with strong demographics, nearby residential density, and complimentary tenants that drive traffic. Our centers are meeting these criteria, allowing us to capture top of market rent on repositioned or re-tenanted space. at columbus village in virginia beach we are nearing completion on reformatting the former bed bath and beyond box to enhance the center with trader joe's and golf galaxy both expected to open before the end of the year this reconfiguration will increase rent by over 50 percent while enhancing the overall tenant mix and further strengthening the appeal of town center of virginia beach district overall our retail strategy leverages market trends tenant credit strength and experiential demand to position our portfolio for sustained outperformance. This knowledge-driven approach enables Armada Hoffler to proactively identify opportunities to optimize tenant mix, capture rent growth, and maintain our centers as destination locations that attract customers and drive long-term value. On the office side, while the broader sector can navigate structural headwinds, The recovery is clearly bifurcating in favor of high-quality, amenitized assets in desirable, well-located markets. Our holdings sit on the right side of that divide. We continue to see occupancy, stability, leasing wins, and renewal spreads that capture value for premium space. As supply constraints and tenant preferences tilt toward quality rather than square footage growth, we believe our positioning provides a distinct advantage. Our office portfolio is 96.5% occupied and few near-term expirations. Demand continues to favor office properties in walkable, amenity-rich, mixed-use environments where tenants benefit from retail, residential, and dining access. We continue to see interest from firms relocating from older suburban parks to dynamic, centralized locations, supporting the long-term value of our office assets. The former WeWork floor in One City Center is the largest continuous vacant space in our portfolio, and we are seeing active interest. We recently announced a 12,000 square foot lease with Atlantic Union Bank at One Columbus in Town Center, bringing overall occupancy in Town Center to 99%. This stands in sharp contrast to the narrative seen in most major U.S. cities, as office assets continue to demonstrate strong demand and sustained high occupancy driven by their location within the region's premier mixed-use environment. Asking rents across town center assets now average nearly 30% above the broader Virginia Beach market across office, retail, and multifamily, underscoring the effectiveness of our mixed-use strategy and the enduring strength of this district is a true live, work, play destination. Our multifamily portfolio continues to demonstrate resilience, supported by healthy leasing fundamentals and proactive management. During the third quarter, portfolio occupancy held at 94.2%, in line with the second quarter. Effective lease tradeouts averaged 2.3% for the quarter, with renewals averaging 4.3% trade-out and new leases flat. These figures do not include the 22 units at Greenside that were offline during the quarter, up modestly from an average 19.7 units in the first and second quarters. Last quarter's reported occupancy included those units, so the current figures reflect a more accurate representation of stabilized performance. Multi-family project starts remain a critical factor in supporting fundamentals. With construction lending down significantly compared to the 2020 to 2022 cycles, the market is moving toward improved balance. Elevated residential borrowing rates are also keeping renters in existing units, limiting turnover, and maintaining occupancy stability across our portfolio. Year over year, from September 2024 to September 2025, national average rents increased only 0.6%. Our stabilized multifamily properties outperformed this trend by approximately 50%, achieving 0.9% year-over-year rent growth, demonstrating the strength of our assets and the effectiveness of our proactive management approach. At Allied Harbor Point, leasing continues to progress well, and we are on track to stabilize mid-2026, earlier than projected. Prospects and residents are drawn to the building's premier waterfront location, best-in-market views, and modern finishes. As the newest residential property within the Harbor Point District, Allied offers an unmatched living experience that complements the surrounding retail, office, and entertainment uses, reinforcing its appeal as one of Baltimore's most desirable addresses. At Greenside in Charlotte, remediation and enhancement work to address water intrusion in several units is progressing in phases as we have previously disclosed. The affected units I mentioned a few minutes ago are obviously an upside opportunity once we conclude this project. These improvements will further strengthen the property's quality and long-term value, supported by its prime location near major medical and innovation districts in Charlotte. Looking ahead, we see multiple avenues to drive FFO growth across our portfolio, guided by a disciplined capital allocation framework. Strong leasing momentum and a high return redevelopment pipeline allow us to capture rent growth and enhance property value through proactive renewals, backfills, and targeted reconfigurations. At the same time, we pursue discipline acquisitions through intentional capital recycling activity, focusing on projects that combine stabilized income with redevelopment potential where possible. By targeting markets where we can create a competitive advantage, including submarkets that exhibit veiled positive fundamentals beyond the typical Sunbelt trade areas where pricing is being bid up, we leverage our leasing and operating expertise to unlock value, ensuring that each investment is accreted in the near term and drives long-term portfolio growth. On the capital front, we remain focused on enhancing flexibility and mitigating balance sheet risk. Our July debt private placement, raising $115 million, reflects continued confidence in the quality of our portfolio, our management team, our strategic approach, and the overall strength of the company. The proceeds bolstered our liquidity position, extended our weighted average debt maturity, and were used in part to fully repay the construction revolver at Southern Post, further positioning us to navigate evolving market conditions with confidence. We continue to focus on generating an increasingly conservative balance sheet, starting to reduce leverage, ensuring ample liquidity to fund ongoing redevelopment and growth initiatives. This disciplined capital structure provides flexibility to act on attractive opportunities while preserving balance sheet strength and stability. We plan to continue expanding relationships with institutional credit investors, supporting long-term growth and maintaining financial optionality. We remain focused on value creation through discipline execution and intentional capital allocation. From retail leasing to office occupancy stability, and multifamily lease-off, we are building a stronger, simpler, and more resilient Armada Hoffler capable of generating consistent, predictable earnings growth. I am proud of the momentum we have generated and confident in the team's ability to deliver sustained, reliable earnings growth while enhancing shareholder value. With that, I'll now turn the call over to Matt to provide additional detail on our financial results.