AH Realty Trust, Inc.

Hello and welcome to AH Realty Trust first quarter 2026 earnings call. Please note that this call is being recorded. After the speaker's prepared remarks, there will be a question and answer session. If you'd like to ask a question during that time, please press star and then one on your telephone keypad. Thank you. I would now like to turn the call over to Chelsea Forrest, EVP of Investor Relations. Please go ahead.

Good morning, and thank you for joining AH Railway Trust's first quarter of 2026 earnings conference call and webcast. On the call this morning, in addition to myself, is Sean Tibbetts, Chairman, President, and CEO, Matthew Barnes-Smith, CFO, and Craig Romero, EVP of Asset Management. The press release announcing our first 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 June 4th, 2026. 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 5th, 2026, and will not be updated 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 transactions involving our multifamily portfolio, our real estate financing program, and our construction business, and the use of proceeds from such transactions, our rebranding and the effects thereof, the consequences of our strategic transformation, our liquidity position, as well as comments on our 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 yesterday afternoon 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, normalized FFO, and FFO as adjusted. 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 ahrealitytrust.com. I will now turn the call over to Sean.

Good morning, and thank you for joining us today. Today, I will briefly reflect on the quarter results, our progress on the company's transformation to date, discuss portfolio highlights, and conclude with a review of our capital allocation activity. Since announcing our strategic restructuring on February 16th, we have executed more transformation milestones in a single quarter than in any comparable period in the company's history. We entered into a binding agreement to sell 11 multifamily assets for $562 million, completed the sale of the construction business, advanced the wind down of our real estate financing platform through multiple dispositions, repurchased 4.3 million shares of common stock, nominated two highly qualified independent directors to the board, secured term sheets or reached final stages on all three 2026 debt maturities, launched our new corporate identity as AH Realty Trust, and raised full-year FFO as adjusted guidance. The pace and magnitude of these actions reflect our unwavering commitment to unlocking shareholder value, and I will walk through each of these in more detail. In the first quarter of 2026, we delivered solid operating results, reflecting strong performance in our retail and mixed-use office portfolios. and the benefits of our disciplined operating approach. AH Realty Trust is a pure play, high-quality retail and mixed-use office REIT focused on identifying and realizing dominant market competitive advantages throughout the Sunbelt, Mid-Atlantic, and Southeast. Our company is primarily comprised of and focused on open-air shopping centers and mixed-use ecosystems within our markets. We are encouraged by a combination of the retail market strength and the leasing activity we are experiencing in both retail and office. We are also mindful of macroeconomic conditions and geopolitical uncertainty, including higher interest rates, elevated financing costs, and heightened global tensions as they continue to influence the broader real estate landscape. That said, our results exceed our internal expectations and reflect the actions we are taking to restructure A.H. Realty Trust into a simpler and more focused real estate platform positioned for long-term value creation. As a result of the performance of the retail and mixed-use office portfolio, our visibility into the coming quarters, and the transformational actions we've taken to date, we are raising our full year 2026 FFO as adjusted guidance range to 51 cents to 55 cents per diluted share. We are here first and foremost for shareholders and every single action we take is aimed at identifying and clearly demonstrating the underlying value in our portfolio. Another key initiative as part of this transformation is ensuring that we have the right board skills and governance profile to help guide us. I trust you saw our press release last week announcing plan changes to the board as part of our ongoing refreshment process, to add directors with skills and experience that align with the company's evolved strategy. This includes the board's nomination of Ted Bigman and Lori Whitman to stand for election at the 2026 Annual Meeting of Stockholders. Ted brings deep capital markets and real estate investment experience honed over decades at leading institutional platforms. capabilities that are directly aligned with our capital allocation priorities and balance sheet optimization objectives. Lori brings extensive public REIT operating and financial leadership experience that will be invaluable as we execute the next phase of our strategy as a focused retail and mixed-use office REIT. Together, their skill sets are purpose-built for the company AH Realty Trust is becoming. I would also like to recognize George Allen and Dennis Gartman, who will not stand for reelection to the board at the annual meeting. We are very grateful for their years of service and significant contributions during their tenure. The first quarter of 2026 was pivotal in AH Realty Trust's strategic transformation. We made meaningful progress implementing our new operating model and disciplined capital allocation framework. We are reshaping our business by exiting multifamily properties and focusing on high-quality retail and mixed-use office assets in markets where we have durable competitive advantages. As evidenced by our actions in the first quarter, we are taking decisive and deliberate steps to simplify the company, reduce leverage, and reallocate capital to advance a new operating strategy. During the quarter, we entered into an agreement with an affiliate of Harbor Group International to sell 11 of our 14 multifamily assets for $562 million. This transaction represents a major milestone in our strategy to exit the multifamily property sector and will meaningfully strengthen AH Realty Trust's balance sheet and materially reduce complexity across the organization. Importantly, this sale reflects a significant premium to the value the public market was implicitly assigning to these assets within our REIT structure, which we believe further validates our thesis that substantial embedded value exists across our portfolio. We expect to close the sale in the coming weeks, subject to customary closing conditions. We are marketing the remaining two multifamily assets in Gainesville. Following these sales, we intend to retain only Smith's Landing in the residential category because its ground lease structure is unique relative to the remainder of the portfolio and the property continues to generate stable cash flow. As a result, we concluded that given the stable cash flow generation combined with the ownership structure, retaining Smith's Landing is appropriate at this time and remains consistent with our value preservation objectives. Exiting the multifamily sector unlocks significant embedded value that has not been reflected in our share price, and there was a robust private market demand for our well-located and young assets. We also concluded that we prefer to compete in the commercial market, and that future growth for our company in multifamily would be difficult given the low cap rates. Also, given the highly volatile nature of Southeast U.S. multifamily, where supply cycles are long and absorption predictions are often inaccurate, we are far more excited to return that value to shareholders through deleveraging our stable go-forward portfolio of well-leased, well-located retail and mixed-use office assets. Outside of multifamily, we made considerable progress exiting other non-core businesses. Last week, we completed the sale of the construction business, fully exiting. We also advanced the wind-down of our real estate financing platform. We closed the previously announced sale of two multifamily financing investments. Additionally, I'm happy to announce that our partner closed on the sale of Allure last week. Collectively, we expect the asset sales already underway, and those that have been completed will provide us with approximately $750 million in proceeds. which we intend to use to delever the balance sheet and achieve our target leverage ratio of 5.5 times to 6.5 times net debt to total adjusted EBITDA, while also repurchasing shares in the market. We will do this while ensuring the dividend remains fully covered by core property operating cash flow. We will also have removed dependency on uneven construction fees and mezzanine investment revenues. I am proud of the significant progress we have made on our transformation in 2026. We have already achieved a number of key milestones in our journey, and we are well-positioned to complete the transformation this year. A focused and agile A.H. Realty Trust will operate as a pure play model retail and mixed-use office real estate investment platform. Our retail portfolio consists primarily of open-air shopping centers and mixed-use retail environments located in strong, fundamentally supported markets. Importantly, 95% of our office investments are concentrated in vibrant, mixed-use settings rather than standalone suburban office assets. These properties benefit from integrated retail, residential, and experiential components, which continue to support consistently high demand from high credit tenants. At quarter end, our stabilized retail and mixed-use office portfolios were 94.8% and 96% leased, respectively. In contrast, while our office product delivers superior occupancy and performance metrics that exceed those of our peers' office product nationally, we would like to see a better appreciation of its values. This disconnect reflects broader sector sentiment rather than asset-level fundamentals. 95% of our office portfolio is situated in mixed-use ecosystems and therefore is highly differentiated and not suburban office product. As a result, our assets benefit from integrated retail, residential, and experiential components. These characteristics support durable demand, consistently strong occupancy, and a high-quality tenant base. resulting in operating performance that stands apart from prevailing conditions affecting the broader publicly traded office sector. The strength of our retail and mixed-use office portfolios was evident in their performance this quarter. For the first quarter, FFO, as adjusted, was 15 cents per diluted share, exceeding our internal expectations and demonstrating the earnings power of our go-forward retail and mixed-use office platform. Craig will discuss portfolio performance in detail in his remarks. Turning to capital allocation, we remain disciplined and shareholder focused. Since the beginning of the year, we have repurchased approximately 4.2 million shares for a total of $24.1 million at a weighted average price of approximately $5.70 per share. representing more than 4% of the common equity and reflecting our confidence in the underlying value of the business. Our commitment remains allocating available capital where we believe it is most beneficial to shareholders. Our NAV demonstrates the intrinsic value of our real estate and simultaneously informs our capital allocation decisions. When combined with our transformation, we believe the implied yield relative to other capital allocation alternatives is compelling. To put it simply, we believe that investing in our own assets above a 9% cap rate is very attractive and creates more shareholder value than other available capital allocation options. We expect that our transformation will create additional financial flexibility to allow us to invest in future growth opportunities while building on the performance of the portfolio and the momentum of this transition. As you know, as part of the transition planning, we initially modeled up to $50 million of retail acquisitions to offset potential gains associated with the multifamily sale. As we move closer to closing the residential transactions, we now have improved visibility into the timing and magnitude of the related tax considerations, and we expect, in this case, that the transactions do not result in material tax consequences to the REIT. With that clarity, given our current cost of capital and leverage objectives, we have reallocated approximately half of that previously modeled acquisition capital towards share repurchases to date. And as stated, we believe this is the most compelling use of capital. We continue to evaluate our remaining allocation options while being mindful of leverage. Factors such as market conditions and potential dispositions will also figure prominently into our analysis. Finally, I want to acknowledge the key role our people play in our company's ongoing transformation. Over the past several quarters, we have made meaningful changes across the organization to ensure that we have the right people, focus, and operating discipline to deliver on our full potential in this next chapter. We are investing intentionally in our people and building a culture centered on accountability, execution, and disciplined decision-making. We believe these efforts are critical to sustaining performance and successfully executing the next phase of our strategy. In closing, our transformation continues to gain momentum. The multifamily sale is a defining step forward, and we remain committed to executing our strategy with discipline, transparency, and strong governance. With a simpler platform, a strengthened balance sheet, and continued governance enhancements, we are confident that we are positioning AH Realty Trust with the resiliency and flexibility to capitalize on opportunities while generating consistent cash flows, disciplined growth, and superior risk-adjusted returns. We appreciate the continued support of our shareholders and look forward to the opportunities ahead. With that, I'll turn it over to Craig Romero to go through our portfolio highlights.