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1、Table of ContentsUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549 FORM10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31,2024 or TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE A
2、CT OF 1934For the transition period from to Commission file number 001-35908_ARMADA HOFFLER PROPERTIES,INC.(Exact Name of Registrant as Specified in Its Charter)_Maryland46-1214914(State or other jurisdiction of incorporation or organization)(I.R.S.Employer Identification No.)222 Central Park Avenue
3、,Suite 1000Virginia Beach,Virginia23462(Address of principal executive offices)(Zip Code)Registrants Telephone Number,Including Area Code:(757)366-4000Securities registered pursuant to Section 12(b)of the Act:Title of each classTrading Symbol(s)Name of each exchange on which registeredCommon Stock,$
4、0.01 par value per shareAHHNew York Stock Exchange6.75%Series A Cumulative Redeemable Perpetual PreferredStock,$0.01 par value per shareAHHPrANew York Stock ExchangeSecurities registered pursuant to Section 12(g)of the Act:None_Indicate by check mark if the registrant is a well-known seasoned issuer
5、,as defined in Rule 405 of the Securities Act.Yes 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 Indicate by check mark whether the registrant(1)has filed all reports required to be filed by Section 13 or 15(d)of the Secur
6、ities Exchange Act of 1934 during the preceding 12 months(or forsuch 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 No Indicate by check mark whether the registrant has submitted electronically every I
7、nteractive 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 No Indicate by check mark whether the registrant is a large accelerated fi
8、ler,an accelerated filer,a non-accelerated filer,a smaller reporting company,or an emerging growth company.See thedefinitions of large accelerated filer,accelerated filer,smaller reporting company,and emerging growth company in Rule 12b-2 of the Exchange Act.Large accelerated filerAccelerated filer
9、Non-accelerated filerSmaller reporting companyEmerging growth companyIf 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 accountingstandards provided pursuant to Section 13(a)of t
10、he Exchange Act.Indicate by check mark whether the registrant has filed a report on and attestation to its managements assessment of the effectiveness of its internal control over financial reporting under Section404(b)of the Sarbanes-Oxley Act(15 U.S.C.7262(b)by the registered public accounting fir
11、m that prepared or issued its audit report.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 topreviously issued financial statements.Indicate by check m
12、ark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrants executiveofficers during the relevant recovery period pursuant to 240.10D-1(b).Indicate by check mark whether the registrant is a shell com
13、pany(as defined in Rule 12b-2 of the Act).Yes No Table of ContentsAs of June 30,2024,the last business day of the registrants most recently completed second fiscal quarter,the aggregate market value of the registrants common stock held by non-affiliates ofthe registrant was approximately$66,068,098
14、million,based on the closing sales price of$11.09 per share as reported on the New York Stock Exchange.(For purposes of this calculation all ofthe registrants directors and executive officers are deemed affiliates of the registrant.)As of February 21,2025,the registrant had 79,918,740 shares of comm
15、on stock outstanding.In addition,as of February 21,2025,Armada Hoffler,L.P.,the registrants operating partnershipsubsidiary(the Operating Partnership),had 21,401,367 common units of limited partnership interest(OP Units)outstanding(other than OP Units held by the registrant).Based on the79,918,740 s
16、hares of common stock and 21,401,367 OP Units held by limited partners other than the registrant,the registrant had a total common equity market capitalization of$902,762,153 asof February 21,2025(based on the closing sales price of$8.91 on the New York Stock Exchange on such date).Documents Incorpo
17、rated by ReferencePortions of the registrants Definitive Proxy Statement relating to its 2025 Annual Meeting of Stockholders are incorporated by reference into Part III of this report.The registrant expects to fileits Definitive Proxy Statement with the Securities and Exchange Commission within 120
18、days after December 31,2024.Table of ContentsArmada Hoffler Properties,Inc.Form 10-KFor the Fiscal Year Ended December 31,2024 Table of Contents PART I Item 1.Business.1Item 1A.Risk Factors.15Item 1B.Unresolved Staff Comments.41Item 1C.Cybersecurity.42Item 2.Properties.43Item 3.Legal Proceedings.43I
19、tem 4.Mine Safety Disclosures.44PART II Item 5.Market For Registrants Common Equity,Related Stockholder Matters and Issuer Purchases of Equity Securities.45Item 6.Reserved.47Item 7.Managements Discussion and Analysis of Financial Condition and Results of Operations.47Item 7A.Quantitative and Qualita
20、tive Disclosures About Market Risk.66Item 8.Financial Statements and Supplementary Data.67Item 9.Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.67Item 9A.Controls and Procedures.67Item 9B.Other Information.67Item 9C.Disclosure Regarding Foreign Jurisdictions tha
21、t Prevent Inspections.68PART III Item 10.Directors,Executive Officers and Corporate Governance.69Item 11.Executive Compensation.69Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.69Item 13.Certain Relationships and Related Transactions,and Direct
22、or Independence.69Item 14.Principal Accountant Fees and Services.69PART IV Item 15.Exhibits and Financial Statement Schedules.70Item 16.Form 10-K Summary.70Index to Exhibits71Signatures 74iTable of ContentsSPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS The following discussion should be read in c
23、onjunction with the financial statements and notes thereto appearing elsewhere in this report.Thisreport contains forward-looking statements within the meaning of the federal securities laws.We caution investors that any forward-looking statementspresented in this report,or which management may make
24、 orally or in writing from time to time,are based on beliefs and assumptions made by,andinformation 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 historic
25、al matters,are intended to identify forward-lookingstatements.Such statements are subject to risks,uncertainties,and assumptions and are not guarantees of future performance,which may be affected byknown and unknown risks,trends,uncertainties,and factors that are beyond our control.Should one or mor
26、e of these risks or uncertainties materialize,orshould underlying assumptions prove incorrect,actual results may vary materially from those anticipated,estimated,or projected.We caution you thatwhile forward-looking statements reflect our good faith beliefs when we make them,they are not guarantees
27、of future performance and are impacted byactual events when they occur after we make such statements.We expressly disclaim any responsibility to update forward-looking statements,whether as aresult of new information,future events,or otherwise,except as required by law.Accordingly,investors should u
28、se 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-
29、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 notguarantee that the transactions and events described will happen as described(or that they will happen at all).The following factors,among others,couldcause ac
30、tual 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
31、 outstanding indebtedness;defaults on,early terminations of,or non-renewal of leases by tenants,including significant tenants;bankruptcy or insolvency of a significant tenant or a substantial number of smaller tenants;the inability of one or more mezzanine loan borrowers to repay mezzanine loans or
32、similar investments in accordance with their contractualterms;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 succ
33、essfully 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 ou
34、tside 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 ourexisting debt;financial market fluctuations;risks that affect the general retail environment or the market for offic
35、e properties or multifamily units;the competitive environment in which we operate;iiTable of Contentsdecreased 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 adv
36、erse 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 i
37、n 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 ratesand taxation of REITs;andpotential negative impacts from changes to th
38、e 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 placeundue reliance on these forward-looking statements.For a further discussion of these and other factors that could impact our future results,pe
39、rformance,ortransactions,see the factors discussed in Item 1A.Risk Factors and Item 7.Managements Discussion and Analysis of Financial Condition and Results ofOperations herein and in other documents that we file from time to time with the Securities and Exchange Commission(the SEC).Summary Risk Fac
40、torsOur business is subject to a number of risks,including risks that may prevent us from achieving our business objectives or may adversely affectour business,financial condition,results of operations,cash flows and prospects.These summary risks provide an overview of many of the risks we areexpose
41、d to in the normal course of our business and are discussed more fully in Item 1A.Risk Factors herein.These risks include,but are not limited to,the following:Adverse economic and geopolitical conditions and dislocations in the credit markets,could have a material adverse effect on our financialcond
42、ition,results of operations,cash flow,cash available for distribution,and ability to service our debt obligations.We may be unable to identify and complete acquisitions and development opportunities of properties that meet our investment criteria,which may materially and adversely affect our results
43、 of operations,cash flow,and growth prospects.The geographic concentration of our portfolio could cause us to be more susceptible to adverse economic or regulatory developments in themarkets in which our properties are located than if we owned a more geographically diverse portfolio.We have a substa
44、ntial amount of indebtedness outstanding,which may expose us to the risk of default under our debt obligations and mayinclude 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 ma
45、rgins,liquidity,and access to the debt capitalmarkets.Increases in interest rates,or failure to hedge effectively against interest rate changes,will increase our interest expense and may adverselyaffect our financial condition,results of operations,cash flow,cash available for distribution,and abili
46、ty 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 commerciallyreasonable terms or at all,which could limit our ability to,among other things,meet our capital and operating needs or make the cashdistr
47、ibutions to our stockholders necessary to maintain our qualification as a REIT.iiiTable of ContentsWe may be unable to renew leases,lease vacant space,or re-lease space on favorable terms or at all as leases expire,which could materiallyand adversely affect our financial condition,results of operati
48、ons,cash flow,cash available for distribution,and ability to service our debtobligations.The short-term leases in our multifamily portfolio expose us to the effects of declining market rents,which could adversely affect ourresults of operations,cash flow,and cash available for distribution.Mezzanine
49、 loans and similar investments are subject to significant risks,and losses related to these investments could have a materialadverse effect on our financial condition and results of operations.Our real estate development activities are subject to risks particular to development,such as unanticipated
50、 expenses,delays,and othercontingencies,any of which could materially and adversely affect our financial condition,results of operations,and cash flow.Most of our costs,such as operating and general and administrative expenses,interest expense,and real estate acquisition and constructioncosts,are su
51、bject to inflation.Adverse economic and regulatory conditions,particularly in the Mid-Atlantic region,could adversely affect our construction anddevelopment business,which could have a material adverse effect on our financial condition,results of operations,cash flow,cash availablefor distribution,a
52、nd 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 commencedor completed in their entirety in accordance with the anticipated cost or that we will achieve the financial results we
53、expect from theconstruction 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 orrefinancing of such at attractive prices or within certain time periods,and any related illiquidity of our real estate
54、 investments couldsignificantly 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 havethe ab
55、ility to exercise significant influence on our company and our Operating Partnership,including the approval of significant corporatetransactions.Our charter contains certain provisions restricting the ownership and transfer of our stock that may delay,defer,or prevent a change ofcontrol transaction
56、that might involve a premium price for our common stock or that our stockholders otherwise believe to be in their bestinterests.Failure to maintain our qualification as a REIT would cause us to be taxed as a regular corporation,which would substantially reduce fundsavailable for distribution to our
57、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 andour 6.75%Series A Cumulative Redeemable Perpetual Preferred Stock,$0.01 par value per share(“Series A Preferred Stock”).ivTable of ContentsPART IItem 1.B
58、usiness.Our Company References to we,our,us,our company,and Armada Hoffler refer to Armada Hoffler Properties,Inc.,a Maryland corporation,togetherwith our consolidated subsidiaries,including Armada Hoffler,L.P.,a Virginia limited partnership(the Operating Partnership),of which we are the solegeneral
59、 partner.We are a vertically-integrated,self-managed REIT with over four decades of experience managing high-quality properties located primarily in theMid-Atlantic and Southeastern United States.Our focus is to deliver long-term,sustainable shareholder value by consistently investing in and operati
60、ng thehighest-quality assets,maintaining a robust and resilient balance sheet,and fostering a dynamic,highly skilled team.In addition to the ownership of ouroperating property portfolio,we historically have developed and built properties for our own account and through joint ventures between us andu
61、naffiliated partners and invested in development projects through real estate financing arrangements.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 betaxed as a REIT for U.S.federal income tax purposes commenci
62、ng with the taxable year ended December 31,2013.Substantially all of our assets are heldby,and all of our operations are conducted through,our Operating Partnership.As of December 31,2024,we owned,through a combination of direct andindirect interests,78.6%of the common units of limited partnership i
63、nterest in our Operating Partnership(OP Units).2024 and Recent Highlights The following highlights our results of operations and significant transactions for the year ended December 31,2024:Net income attributable to common stockholders and holders of OP Units(OP Unitholders)of$30.9 million,or$0.33
64、per diluted share,for the year ended December 31,2024.Funds from operations attributable to common stockholders and OP Unitholders(FFO)of$99.8 million,or$1.08 per diluted share,forthe year ended December 31,2024.See Non-GAAP Financial Measures.Normalized funds from operations attributable to common
65、stockholders and OP Unitholders(Normalized FFO)of$118.9 million,or$1.29 per diluted share,for the year ended December 31,2024.See Non-GAAP Financial Measures.As of December 31,2024,weighted average stabilized portfolio occupancy was 96.0%.Retail occupancy was 95.3%,office occupancy was97.2%,and mult
66、ifamily occupancy was 95.3%.Positive spreads on renewals across all segments:Retail 11.1%(GAAP)and 2.9%(Cash)Office 18.7%(GAAP)and 3.5%(Cash)Multifamily 4.7%(GAAP and Cash)Executed 93 lease renewals and 44 new leases during the year ended December 31,2024 for an aggregate of 952,019 of net rentable
67、squarefeet.Same Store net operating income(NOI)for the year ended December 31,2024 increased 1.9%on a GAAP basis compared to the yearended December 31,2023.Property segment NOI of$171.0 million for the year ended December 31,2024,which represents a 6.8%increase compared to$160.1million for the year
68、ended December 31,2023.Third-party construction backlog as of December 31,2024 was$123.8 million and general contracting and real estate services gross profitfor the year ended December 31,2024 was$13.9 million.Dividends declared during the year ended December 31,2024 of$0.82 per share,representing
69、a 5.8%year-over-year increase.1Table of ContentsDuring the fourth quarter of 2024,unrealized gains on non-designated interest rate derivatives that positively affected FFO were$2.5million.As of December 31,2024,the asset value of our entire interest rate derivative portfolio,net of unrealized gains,
70、was$15.9 million.These unrealized gains are excluded from normalized FFO.In July,we realized$25.8 million in cash upon full redemption of the Solis City Park II preferred equity investment.In September,we raised$108.7 million of gross proceeds in an underwritten public offering of 10.35 million shar
71、es of our common stock ata public offering price of$10.50 per share.Net proceeds,after deducting the underwriting discount and offering expenses,totaled$103.5 million.On September 27,2024,we paid off the$35.0 million,$23.7 million,and$10.9 million balances of the loans secured by the Chronicle Millm
72、ixed-use multifamily,retail,and office property,the Premier mixed-use multifamily and retail property,and the Market at Mill Creekretail property,respectively.We delivered Southern Post Retail,Southern Post Office,and Chandler Residences,a mixed-use development comprised of 42,000 squarefeet of reta
73、il space,95,000 square feet of office space,and 137 multifamily units.Consistent with our previously announced succession plan,on November 14,2024,Louis S.Haddad informed our board of directors of hisdecision to retire from his position as Chief Executive Officer of the Company(“Chief Executive Offi
74、cer”),effective December 31,2024.Mr.Haddad remains a director and the Executive Chairman of our board through the Companys 2025 annual meeting of stockholders,atwhich Mr.Haddad is expected to be nominated for reelection to the board.Pursuant to the previously announced succession plan,the board appo
75、inted Shawn J.Tibbetts,the Companys President and ChiefOperating Officer,to the position of Chief Executive Officer and President effective January 1,2025.The board appointed Mr.Tibbetts tothe board in connection with his promotion to Chief Executive Officer.On November 27,2024,we closed on a loan s
76、ecured by the Premier Retail and Premier Apartments properties,using the$29.4 million inproceeds to pay off the$24.5 million balance of the loan secured by the Southgate Square retail property and pay down$4.9 million on ourrevolving credit facility.On December 18,2024,we completed the disposition o
77、f the Market at Mill Creek and Nexton Square retail properties for gross proceeds of$82.0 million,resulting in a combined net gain on real estate dispositions of$21.3 million.The proceeds were used to pay off the$21.1 million loan secured by the Nexton Square property and pay down our revolving cred
78、it facility.For definitions and discussion of FFO,Normalized FFO,NOI,and Same Store NOI,see the section below entitled Item 7.ManagementsDiscussion and Analysis of Financial Condition and Results of Operations.Our Competitive Strengths We believe that we distinguish ourselves from other REITs throug
79、h the following competitive strengths:Armada Hofflers diversified portfolio consists of high-quality retail,office,and multifamily assets,located primarily in the Mid-Atlanticand Southeastern regions.Our portfolio is distinguished by its high quality,featuring exceptional amenities,and is strategica
80、lly located inhigh barrier-to-entry markets that we believe will provide long-term value.Armada Hoffler has an experienced,dedicated,and resilient senior management team that serves as the catalyst for the organizationssuccess,inspiring employees,driving innovation,and creating value for all stakeho
81、lders.Our senior management team brings substantialexperience in strategic business operations,as well as ownership,management,and development of high-quality real estate properties.Asof December 31,2024,our executive officers and directors collectively held a stake of approximately 10.8%in our comp
82、any on a fullydiluted basis,which we believe aligns their interests with those of our stockholders.Armada Hoffler strategically focuses on target markets in the Mid-Atlantic and Southeastern regions of the United States.These marketsdemonstrate attractive fundamentals driven by favorable supply and
83、demand characteristics,high barriers,and limited competition.Webelieve that our longstanding presence in our target2Table of Contentsmarkets provides us with significant advantages in sourcing and executing development opportunities,identifying and mitigatingpotential risks,and negotiating attractiv
84、e pricing.Armada Hoffler leverages mezzanine lending and preferred equity arrangements,which provide opportunities to acquire completeddevelopment projects at prices that are below market or at cost and may enable us to realize profit on projects we do not intend to own.Our platform consists of asse
85、t management,development,and construction expertise,which comprise an integrated delivery system forevery project that we build for our portfolio or for third-party clients.Our Business and Growth Strategies Armada Hofflers primary business objectives are to:(i)continue to acquire and manage high qu
86、ality multifamily,office,and retail properties inour target markets,(ii)finance and operate our portfolio in a manner that increases cash flow and property values,(iii)pursue selective acquisition anddisposition opportunities,and(iv)deliver long-term sustainable shareholder value.We seek to achieve
87、our objectives through the following strategies:Armada Hoffler intends to continue to grow our asset base and create value through the selective acquisition of high-quality properties that arewell-located in submarkets,with strong demand,which we believe will provide solid returns.Armada Hoffler int
88、ends to optimize operational efficiency and maximize cash flow by implementing strategies such as reducing operating costs,optimizing property performance,and focusing on value-add enhancements such as strategic redevelopment opportunities and tenant retentionstrategies to enhance the long-term valu
89、e of each property.Armada Hoffler seeks to provide financial stability,liquidity,and the ability to invest in growth opportunities by managing assets,liabilities,andequity efficiently.Armada Hoffler opportunistically divests properties when we believe returns have been maximized and we believe redep
90、loying the capital intonew acquisition,repositioning,or redevelopment projects will generate higher potential risk-adjusted returns.Armada Hoffler will selectively deploy capital with our real estate financing platform in order to create opportunities to acquire select properties.Our Properties The
91、table below sets forth certain information regarding our stabilized portfolio as of December 31,2024.We generally consider a property to bestabilized upon the earlier of:(i)the quarter after the property reaches 80%occupancy or(ii)the thirteenth quarter after the property receives its certificateof
92、occupancy.Additionally,any property that is fully or partially taken out of service for the purpose of redevelopment is no longer considered stabilizeduntil the redevelopment activities are complete,the asset is placed back into service,and the stabilization criteria above are again met.3Table of Co
93、ntentsPropertyLocation Year Built/Renovated/RedevelopedOwnershipInterestNet RentableSquare FeetOccupancy ABR ABR perLeased SFRetailTown Center of Virginia Beach249 Central Park Retail*Virginia Beach,VA2004100%35,161 100.0%$1,177,891$33.50 4525 Main Street Retail*Virginia Beach,VA2014100%26,328 100.0
94、%485,188 18.43 4621 Columbus Retail*Virginia Beach,VA2020100%84,000 100.0%1,176,000 14.00 Columbus Village*Virginia Beach,VA2020100%62,207 100.0%2,022,540 32.51 Commerce Street Retail*Virginia Beach,VA2008100%19,173 100.0%890,078 46.42 Fountain Plaza Retail*Virginia Beach,VA2004100%35,961 94.4%1,119
95、,318 32.98 Pembroke Square*Virginia Beach,VA2015100%124,181 100.0%2,096,262 16.88 Premier Retail*Virginia Beach,VA2018100%39,015 94.9%1,254,924 33.88 South Retail*Virginia Beach,VA2002100%38,515 100.0%1,065,261 27.66 Studio 56 Retail*Virginia Beach,VA2007100%11,594 100.0%413,118 35.63 The Cosmopolit
96、an Retail*Virginia Beach,VA2020100%41,872 88.6%1,220,239 32.90 Two Columbus Retail*Virginia Beach,VA2009100%13,752 100.0%526,978 38.32 West Retail*Virginia Beach,VA2002100%17,558 83.4%494,102 33.74 Harbor Point-Baltimore WaterfrontConstellation Retail*Baltimore,MD201690%38,464 76.7%783,891 26.58 Poi
97、nt Street Retail*Baltimore,MD2018100%18,632 60.8%439,665 38.82 Grocery AnchoredBroad Creek Shopping Center Norfolk,VA2001100%121,504 97.2%2,330,199 19.74 Broadmoor PlazaSouth Bend,IN1980100%115,059 98.2%1,359,075 12.03 Brooks Crossing Retail*Newport News,VA201665%18,349 84.8%229,537 14.75 Delray Bea
98、ch Plaza*Delray Beach,FL2021100%87,207 98.0%2,959,879 34.62 Greenbrier SquareChesapeake,VA2017100%260,625 100.0%2,624,984 10.07 Greentree Shopping CenterChesapeake,VA2014100%15,719 91.1%335,615 23.44 Hanbury VillageChesapeake,VA2009100%98,638 100.0%2,045,579 20.74 Lexington SquareLexington,SC2017100
99、%85,440 97.2%1,892,535 22.79 North Pointe CenterDurham,NC2009100%226,083 100.0%2,996,368 13.25 Parkway CentreMoultrie,GA2017100%61,200 100.0%861,149 14.07 Parkway MarketplaceVirginia Beach,VA1998100%37,804 94.2%712,610 20.01 Perry Hall MarketplacePerry Hall,MD2001100%74,251 100.0%1,299,008 17.49 San
100、dbridge CommonsVirginia Beach,VA2015100%69,417 100.0%951,730 13.71 Tyre Neck Harris Teeter Portsmouth,VA2011100%48,859 100.0%559,948 11.46 Southeast SunbeltChronicle Mill Retail*Belmont,NC202285%11,530 22.4%112,500 43.50 North Hampton MarketTaylors,SC2004100%114,954 98.8%1,605,665 14.14 One City Cen
101、ter Retail*Durham,NC2019100%22,679 55.7%421,442 33.38 Overlook VillageAsheville,NC1990100%151,365 100.0%2,289,281 15.12 Patterson PlaceDurham,NC2004100%159,842 99.1%2,682,119 16.93 Providence Plaza Retail*Charlotte,NC2008100%49,447 100.0%1,565,800 31.67 South SquareDurham,NC2005100%109,590 97.1%1,93
102、5,908 18.19 The Interlock Retail*Atlanta,GA2021100%108,379 85.0%5,071,860 55.08 Wendover VillageGreensboro,NC2004100%176,997 99.3%3,635,403 20.69 Mid-AtlanticDimmock SquareColonial Heights,VA1998100%106,166 100.0%1,932,887 18.21 Harrisonburg RegalHarrisonburg,VA1999100%49,000 100.0%753,620 15.38 Lib
103、erty Retail*Newport News,VA2013100%26,534 75.8%371,241 18.45 Marketplace at Hilltop Virginia Beach,VA2001100%116,953 97.3%2,810,566 24.71 Red Mill CommonsVirginia Beach,VA2005100%373,808 96.1%7,118,113 19.81 Southgate SquareColonial Heights,VA2016100%260,131 81.2%3,256,484 15.42 Southshore ShopsMidl
104、othian,VA2006100%40,307 100.0%885,326 21.96 The Edison Retail*Richmond,VA2014100%20,196%58,276 Total/Weighted Average3,824,446 95.3%$72,830,162$19.98(1)(2)(3)(3)(4)(5)(6)(5)(5)(6)(5)(5)4Table of ContentsPropertyLocationYear Built/Renovated/RedevelopedOwnershipInterestNet RentableSquare FeetOccupancy
105、 ABR ABR perLeased SFOfficeTown Center of Virginia Beach249 Central Park Office*Virginia Beach,VA2004100%57,103 100.0%$1,448,997$25.38 4525 Main Street Office*Virginia Beach,VA2014100%208,760 100.0%6,932,898 33.21 4605 Columbus Office*Virginia Beach,VA2002100%19,335 100.0%522,045 27.00 Armada Hoffle
106、r Tower*Virginia Beach,VA2002100%296,200 98.6%9,196,624 31.49 One Columbus*Virginia Beach,VA1984100%129,066 98.3%3,416,942 26.93 Two Columbus Office*Virginia Beach,VA2009100%94,708 91.6%2,402,802 27.68 Harbor Point-Baltimore WaterfrontConstellation Office*Baltimore,MD201690%453,018 100.0%15,484,541
107、34.18 Thames Street Wharf*Baltimore,MD2010100%263,426 98.8%8,071,078 31.01 Wills Wharf*Baltimore,MD2020100%327,991 93.8%9,471,823 30.79 Southeast SunbeltChronicle Mill Office*Belmont,NC202285%5,932 100.0%177,960 30.00 One City Center Office*Durham,NC2019100%128,920 95.3%3,270,013 26.63 Providence Pl
108、aza Office*Charlotte,NC2008100%53,671 100.0%1,636,062 30.48 The Interlock Office*Atlanta,GA2021100%198,872 88.6%6,845,907 38.84 Mid-AtlanticBrooks Crossing Office*Newport News,VA2019100%98,061 100.0%2,002,945 20.43 Total/Weighted Average2,335,063 97.2%$70,880,637$31.24 PropertyLocationYear Built/Ren
109、ovated/RedevelopedOwnershipInterestUnitsOccupancyAQR Monthly Rent perOccupied UnitMultifamilyTown Center of Virginia BeachEncore Apartments*Virginia Beach,VA2014100%286 93.7%$5,862,228$1,823 Premier Apartments*Virginia Beach,VA2018100%131 96.2%3,046,848 2,015 The Cosmopolitan*Virginia Beach,VA202010
110、0%342 93.9%8,972,952 2,329 Harbor Point-Baltimore Waterfront1305 Dock Street*Baltimore,MD201690%103 96.1%3,115,440 2,622 1405 Point*Baltimore,MD2018100%289 94.5%8,844,300 2,700 Southeast SunbeltChronicle Mill Apartments*Belmont,NC202285%238 96.6%5,055,672 1,832 Greenside ApartmentsCharlotte,NC201810
111、0%225 90.7%4,598,520 1,878 The Everly*Gainesville,GA2022100%223 95.5%4,596,096 1,798 Mid-AtlanticLiberty Apartments*Newport News,VA2013100%197 98.5%4,070,124 1,748 Smiths Landing Blacksburg,VA2009100%284 100.0%6,121,680 1,796 The Edison*Richmond,VA2014100%174 94.3%3,176,436 1,614 Total/Weighted Aver
112、age2,492 95.3%$57,460,296$2,015.30 _*Mixed-use asset or located in a mixed-use development.(1)The net rentable square footage for each of our retail and office properties is the sum of(a)the square footage of existing leases,plus(b)for available space,managements estimate of net rentable square foot
113、age based,in part,on past leases.The net rentable square footage included in office leases is generally consistent withthe Building Owners and Managers Association 1996 measurement guidelines.(2)Occupancy for each of our retail and office properties is calculated as(a)square footage under executed l
114、eases as of December 31,2024,divided by(b)net rentablesquare 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 ofthe trailing three months from the reporting period end date,divided by(b)total un
115、its available,as of such date expressed as a percentage.(3)For the properties in our retail and office portfolios,annualized base rent(ABR)is calculated by multiplying(a)monthly base rent(defined as cash base rent,beforecontractual tenant concessions and abatements,and excluding tenant reimbursement
116、s for expenses paid by us)as of December 31,2024 for in-place leases as of suchdate 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).ABRper leased square foot is calculated by dividing(a)ABR by
117、(b)square footage under in-place leases as of December 31,2024.In the case of triple net or modified gross(1)(2)(3)(3)(7)(7)(5)(6)(5)(2)(8)(5)(6)(5)5Table of Contentsleases,our calculation of ABR does not include tenant reimbursements for real estate taxes,insurance,common area,or other operating ex
118、penses.(4)Formerly known as Apex Entertainment.(5)We lease all or a portion of the land underlying this property pursuant to a ground lease.(6)We are entitled to a preferred return on our investment in this property.(7)As of December 31,2024,we occupied 54,621 square feet at these two properties at
119、an ABR of$1.7 million,or$30.37 per leased square foot,which amounts arereflected in this table.The rent paid by us is eliminated in the consolidated financial statements in accordance with U.S.generally accepted accounting principles(GAAP).(8)For the properties in our multifamily portfolio,annualize
120、d quarterly rent(AQR)is calculated by multiplying(a)revenue for the quarter ended December 31,2024 by(b)four.Lease ExpirationsThe following tables summarize the scheduled expirations of leases in our retail and office operating property portfolios as of December 31,2024.The information in the follow
121、ing tables does not assume the exercise of any renewal options.Retail Lease ExpirationsYear of Lease ExpirationNumber of LeasesExpiringSquare Footage ofLeases Expiring%Portfolio Net RentableSquare FeetABR%of Retail Portfolio ABRAvailable 179,770 4.7%$%Month-to-Month2 1,602%59,262 0.1%20243 10,872 0.
122、3%499,064 0.7%202555 165,063 4.3%3,432,707 4.7%202684 436,858 11.4%8,988,445 12.3%202786 442,832 11.6%8,627,079 11.8%202874 332,105 8.7%7,399,089 10.2%202976 413,435 10.8%7,725,405 10.6%203072 528,541 13.8%10,806,498 14.8%203137 254,741 6.7%5,108,641 7.0%203230 302,420 7.9%5,476,435 7.5%203326 92,27
123、6 2.4%2,223,337 3.1%203418 86,110 2.3%1,855,067 2.5%Thereafter41 577,821 15.1%10,629,133 14.7%Total/Weighted Average604 3,824,446 100.0%$72,830,162 100.0%_(1)Excludes leases from development and redevelopment properties that have been delivered but are not yet stabilized.(2)Represents leases that ex
124、pired on December 31,2024.The spaces were available for lease as of January 1,2025.(1)(2)6Table of ContentsOffice Lease ExpirationsYear of Lease ExpirationNumber of LeasesExpiringSquare Footage ofLeases Expiring%Portfolio Net RentableSquare FeetABR%of Office Portfolio ABRAvailable 66,385 2.8%$%Month
125、-to-Month7 15,137 0.6%180,545 0.3%20241 2,174 0.1%64,263 0.1%202510 62,742 2.7%2,604,074 3.6%202610 46,312 2.0%1,429,004 2.0%202720 180,570 7.7%6,205,737 8.7%202814 111,841 4.8%3,441,772 4.8%202916 356,996 15.3%10,183,388 14.3%203014 169,665 7.3%5,433,353 7.6%20318 142,915 6.1%4,171,960 5.8%20324 43
126、,522 1.9%1,228,475 1.7%20336 70,374 3.0%2,153,946 3.0%20346 119,019 5.1%2,986,668 4.2%Thereafter13 947,411 40.6%31,320,571 43.9%Total/Weighted Average129 2,335,063 100.0%$71,403,756 100.0%_(1)Excludes leases from development and redevelopment properties that have been delivered but are not yet stabi
127、lized.(2)Represents leases that expired on December 31,2024.The spaces were available for lease as of January 1,2025.(1)(2)7Table of ContentsTenant Diversification The following table lists the 20 largest tenants in our retail and office operating property portfolios,based on ABR as of December 31,2
128、024($inthousands):TenantNumber of LeasesLease ExpirationABR%of Total ABR/AQRConstellation Energy Generation12036$15,463 7.7%Morgan Stanley32028-20358,883 4.4%Harris Teeter/Kroger62026-20353,781 1.9%Clark Nexsen120292,914 1.4%Canopy by Hilton120452,698 1.3%Dicks Sporting Goods/Golf Galaxy22028-20321,
129、977 1.0%Franklin Templeton120381,898 0.9%Huntington Ingalls Industries22025-20291,774 0.9%Duke University120291,742 0.9%TJ Maxx/Homegoods52026-20301,554 0.8%PetSmart52027-20301,527 0.8%Georgia Tech120311,446 0.7%WeWork120341,348 0.7%Mythics120301,311 0.7%Puttshack120361,203 0.6%Apex Entertainment120
130、351,176 0.6%Pindrop120271,172 0.6%Kimley-Horn120271,145 0.6%Amazon/Whole Foods120401,144 0.6%Ross Dress for Less32027-20301,122 0.6%Top 20 Total$55,278 27.7%_(1)Excludes leases from development and redevelopment properties that have been delivered but are not yet stabilized.Development Pipeline In a
131、ddition to the properties in our operating property portfolio as of December 31,2024,we had the following properties in various stages ofdevelopment and stabilization.We generally consider a property to be stabilized upon the earlier of:(i)the quarter after the property reaches 80%occupancy or(ii)th
132、e thirteenth quarter after the property receives its certificate of occupancy.Development,Not Delivered Schedule Estimated InitialStabilizedAHHProperty TypePropertyLocation SizeStartOccupancyOperation Ownership%Southern Post RetailRoswell,GA42,000 sf retail4Q213Q241Q26100%Retail*Southern Post Office
133、Roswell,GA95,000 sf office4Q212Q241Q26100%Office*Chandler ResidencesRoswell,GA137 multifamily units4Q212Q242Q25100%Multifamily*Redevelopment AHHProperty TypePropertyLocationOwnership%Columbus Village IIVirginia Beach,VA100%Retail*_(1)(1)(1)(2)8Table of Contents*Mixed-use asset or located in a mixed-
134、use development.(1)Represents estimates that may change as the development/stabilization process proceeds.(2)Estimated first full quarter of stabilized operations.Estimates are inherently uncertain,and we can provide no assurance that our assumptions regarding the timing ofstabilization will prove a
135、ccurate.Our execution on all of the projects identified in the preceding tables are subject to,among other factors,regulatory approvals,financingavailability,and suitable market conditions.Equity Method Investments-DevelopmentEquity Method Investmentsas of December 31,2024 ($in 000s)Schedule Estimat
136、edEstimatedProject CostEquityRequirementFunded toDate InitialOccupancyStabilizedOperationAHHProperty TypePropertyLocationSizeStartOwnership%T.Rowe PriceGlobal HQ|(Harbor PointParcel 3)Baltimore,MD553,000 sf office/20,200 sf retail/250 parking spaces$277,900$52,900$46,400 2Q221Q251Q2550%Office*Allied
137、|(HarborPoint Parcel 4)Baltimore,MD312 units/15,800sf retail/1,252 parkingspaces239,300 115,900 115,900 2Q221Q253Q2690%Multifamily*Total$517,200$168,800$162,300 _*Mixed-use asset or located in a mixed-use development.(1)All items in the table(other than location,funded to date as of December 31,2024
138、,development start,our ownership percentage,and property type)are estimates thatmay change as the development and redevelopment process proceeds.(2)Estimated first full quarter of stabilized operations.Estimates are inherently uncertain,and we can provide no assurance that our assumptions regarding
139、the timing ofstabilization will prove accurate.(3)We currently have a 78%ownership interest and hold an option to increase our ownership interest to 90%.Equity Method InvestmentsHarbor Point Parcel 3During December 2020,we formed a 50/50 joint venture to develop and build T.Rowe Prices new global he
140、adquarters in Baltimores HarborPoint.T.Rowe Price agreed to a 15-year lease,with three 5-year extension options.They will occupy at least 553,000 square feet of office space.Plans forthis development may evolve as the development process proceeds.Project costs at this time are subject to change and
141、currently estimated at$277.9million.We have a current projected equity commitment of$52.9 million relating to this project,of which we had funded$46.4 million as of December 31,2024.We provided a completion guarantee to the lender for this project.The construction loan is cross-collateralized with H
142、arbor Point Parcel 4.Harbor Point Parcel 4In conjunction with the Harbor Point Parcel 3 project,we acquired a 78%interest in Harbor Point Parcel 4,a real estate venture with BeattyDevelopment Group,for purposes of developing a mixed-use project,which is planned to include 312 apartments units,15,800
143、 square feet of retail space,and 1,252 spaces of structured parking on a neighboring site to accommodate T.Rowe Prices parking requirements and other parking requirements for thesurrounding area.We hold an option to increase our ownership to 90%.We have a current projected equity commitment of$115.9
144、 million relating to thisproject,which was fully funded as of December 31,2024.Plans for this project may also evolve as the development process proceeds.Current estimatedproject costs are$239.3 million.We have provided a completion guarantee and a partial payment guarantee to the lender for this pr
145、oject.The constructionloan is cross-collateralized with Harbor Point Parcel 3.As of December 31,2024,$77.2 million has been funded on this senior loan.(1)(2)(3)9Table of ContentsReal Estate Financing InvestmentsSolis City Park IIOn March 23,2022,we entered into a$20.6 million preferred equity invest
146、ment for the development of a multifamily property located inCharlotte,North Carolina.The investment has economic terms consistent with a note receivable,including a mandatory redemption or maturity on April28,2026,and it is accounted for as a note receivable.Our investment bears interest at a rate
147、of 13%,compounded annually,with a minimum preferredreturn of$5.2 million,which represents approximately 24 months of interest.Our investment also earns an equity fee on our commitment of$0.2 million,which is amortized through the date of redemption.On July 10,2024,the borrower paid off the Solis Cit
148、y Park II note receivable in full.We received a total of$25.8 million,which consisted of$20.6 million outstanding principal and$5.2 million of accrued interest.During the year ended December 31,2024,we recognized$1.5 million of interest income on the note.See Note 7 to our consolidated financialstat
149、ements in Item 8 of this Annual Report on Form 10-K.Solis Gainesville IIOn October 3,2022,we entered into a$19.6 million preferred equity investment for the development of a multifamily property located inGainesville,Georgia(Solis Gainesville II).This project is located nearby our recently completed
150、 multifamily development project in Gainesville,TheEverly.The preferred equity investment has economic and other terms consistent with a note receivable,including a mandatory redemption or maturity onOctober 3,2026,and it is accounted for as a note receivable.Our investment bears interest at a rate
151、of 14.0%through the first 24 months of the investment.Beginning on October 3,2024,the investment will bear interest at a rate of 10.0%for 12 months.On October 3,2025,the investment will again bearinterest at a rate of 14.0%through maturity.Additionally,effective January 1,2023,the investment earns a
152、n unused commitment fee of 10.0%on theunfunded portion of the investments maximum loan commitment and an equity fee on our commitment of$0.3 million,which is amortized through thedate of redemption.Both the interest and unused commitment fee compound annually.The preferred equity investment is subje
153、ct to a minimum interestguarantee of$5.9 million over the life of the investment,which represents approximately 24 months of interest.On July 10,2024,we signed an amendment to the operating agreement for the entity through which we own our real estate financing investmentwith respect to Solis Gaines
154、ville II to reduce the preference rate on the investment from 10.0%to 6.0%starting on January 1,2025.We also received a calloption to purchase a controlling interest in the entity that owns Solis Gainesville II at fair market value during the period from January 1,2025 to December31,2025,which optio
155、n also gives us a right of first refusal to buy the property during the same period.The balance on the Solis Gainesville II note was$25.3 million as of December 31,2024,which includes$5.4 million of cumulative accruedinterest,$0.4 million of cumulative accrued unused commitment fees,and a discount o
156、f$0.1 million due to unamortized equity fees.During the year endedDecember 31,2024,we recognized$3.0 million of interest income on the note.As of December 31,2024,this note was fully funded and the developmentproperty was approximately 69%leased.See Note 7 to our consolidated financial statements in
157、 Item 8 of this Annual Report on Form 10-K.Solis KennesawOn May 25,2023,we entered into a$37.9 million preferred equity investment for the development of a multifamily property located in Marietta,Georgia.The investment has economic terms consistent with a note receivable,including a mandatory redem
158、ption or maturity on May 25,2027,and it isaccounted for as a note receivable.Our investment bears interest at a rate of 14.0%for the first 24 months.Beginning on May 25,2025,the investment willbear interest at a rate of 9.0%for the following 12 months.On May 25,2026,the investment will again bear in
159、terest at a rate of 14.0%through maturity.The interest compounds annually.We also earn an unused commitment fee of 11.0%on the unfunded portion of the investments maximum commitment,which does not compound,and an equity fee on our commitment of$0.6 million which is amortized through the date of rede
160、mption.The preferred equityinvestment is subject to a minimum interest guarantee of$13.1 million over the life of the investment,which represents approximately 27 months ofinterest.The balance on the Solis Kennesaw note was$45.6 million as of December 31,2024,which includes$5.2 million of cumulative
161、 accrued interest,$2.9 million of cumulative accrued unused commitment fees,and a discount of$0.3 million due to unamortized equity fees.During the year endedDecember 31,2024,we recognized$5.4 million of interest income on the note.See Note 7 to our consolidated financial statements in Item 8 of thi
162、s AnnualReport on Form 10-K.10Table of ContentsSolis Peachtree CornersOn July 26,2023,we entered into a$28.4 million preferred equity investment for the development of a multifamily property located in PeachtreeCorners,Georgia(Solis Peachtree Corners).The preferred equity investment has economic and
163、 other terms consistent with a note receivable,including amandatory redemption feature effective on October 27,2027,and it is accounted for as a note receivable.Our investment bears interest at a rate of 15.0%for the first 27 months.Beginning on November 1,2025,the investment will bear interest at a
164、 rate of 9.0%for 12 months.On November 1,2026,theinvestment will again bear interest at a rate of 15.0%through maturity.The interest compounds annually.We also earn an unused commitment fee of 10.0%on the unfunded portion of the investments maximum loan commitment,which also compounds annually,and a
165、n equity fee on our commitment of$0.4 million,which is amortized through the date of redemption.The preferred equity investment is subject to a minimum interest guarantee of$12.0 million over the life of the investment,which represents approximately 30 months of interest.The balance on the Solis Pea
166、chtree Corners note was$33.5 million as of December 31,2024,which includes$3.3 million of cumulative accruedinterest,$2.1 million of cumulative accrued unused commitment fees,and a discount of$0.3 million due to unamortized equity fees.During the year endedDecember 31,2024,we recognized$4.1 million
167、of interest income on the note.See Note 7 to our consolidated financial statements in Item 8 of this AnnualReport on Form 10-K.The Allure at EdinburghOn July 26,2023,we entered into a$9.2 million preferred equity investment for the development of a multifamily property located in Chesapeake,Virginia
168、(The Allure at Edinburgh).The preferred equity investment has economic and other terms consistent with a note receivable,including amandatory redemption feature effective on January 16,2028,and it is accounted for as a note receivable.Our investment bears interest at a rate of 15.0%,which does not c
169、ompound.Upon The Allure at Edinburgh obtaining a certificate of occupancy,the investment will bear interest at a rate of 10.0%.Thecommon equity partner in the development property holds an option to sell the property to us at a predetermined amount if certain conditions are met.Wealso hold an option
170、 to purchase the property at any time prior to maturity of the preferred equity investment,and at the same predetermined amount as thecommon equity partners option to sell.The balance on The Allure at Edinburgh note was$11.2 million as of December 31,2024,which includes$2.0 million of cumulative acc
171、ruedinterest.During the year ended December 31,2024,we recognized$1.4 million of interest income on the note.As of December 31,2024,this note wasfully funded and the development property was approximately 24%leased.See Note 7 to our consolidated financial statements in Item 8 of this AnnualReport on
172、 Form 10-K.Solis North CreekOn July 10,2024,we entered into a$27.0 million preferred equity investment for the development of a multifamily property located inHuntersville,North Carolina(Solis North Creek).The preferred equity investment has economic terms consistent with a note receivable,including
173、 amandatory redemption feature effective on August 8,2030,and it is accounted for as a note receivable.Our investment bears interest at a rate of 12.0%forthe first 24 months.Beginning on July 10,2026,the investment will bear interest at a rate of 9.0%for 12 months.On July 10,2027,the investment will
174、again bear interest at 12.0%through maturity.The interest compounds annually.We also earn an unused commitment fee of 4.5%on the unfunded portionof the investments maximum loan commitment,which also compounds annually.The preferred equity investment was initially subject to a minimuminterest guarant
175、ee of$8.9 million over the life of the investment.On August 8,2024,we signed an amendment to the operating agreement for the entity through which we own our real estate financing investmentwith respect to Solis North Creek to reduce the equity funding requirement from$27.0 million to$26.8 million an
176、d the minimum interest guarantee from$8.9 million to$8.8 million.The balance on the Solis North Creek note was$5.8 million as of December 31,2024,which includes$0.2 million of cumulative accrued interestand$0.5 million of cumulative accrued unused commitment fees.During the year ended December 31,20
177、24,we recognized$0.7 million of interest incomeon the note.See Note 7 to our consolidated financial statements in Item 8 of this Annual Report on Form 10-K.AcquisitionsThe Company did not acquire any properties during the year ended December 31,2024.11Table of ContentsDispositionsOn December 18,2024
178、,we completed the dispositions of the Market at Mill Creek and Nexton Square retail properties for gross proceeds of$82.0 million,resulting in a combined net gain on real estate dispositions of$21.3 million.Other Real Estate TransactionsDuring the year ended December 31,2024,we recognized impairment
179、 of real estate of$1.5 million and wrote off development costs of$5.5 million related to undeveloped land under predevelopment,which reflects the excess of the book value of the propertys assets over the estimated fairvalue of the property.An income tax benefit of$1.6 million related to the impairme
180、nt and development costs was recognized,creating an income taxbenefit for the year ended December 31,2024,that was attributable to the profits and losses of our development and construction businesses operatedthrough our TRS.On June 25,2024,we entered into a non-binding letter of intent to sell the
181、property to an unrelated third party for$4.8 million,whichwas used as an approximation of fair value as a level 3 input in the fair value hierarchy.We anticipate completing the sale of the property in 2025.The landparcel was classified as held-for-sale as of December 31,2024.Tax Status We have elect
182、ed 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 requirem
183、ents under the Internal Revenue Code of 1986,as amended(the Code),relating to,among other things,the sources of our grossincome,the composition and values of our assets,our distribution levels,and the diversity of ownership of our capital stock.We believe that we areorganized in conformity with the
184、requirements for qualification as a REIT under the Code and that our manner of operation will enable us to maintain therequirements 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 subsid
185、iaries,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
186、to numerous organizational and operational requirements,including a requirement that they distribute at least 90%oftheir REIT taxable income each year,determined without regard to the deduction for dividends paid and excluding any net capital gains.If we fail toqualify for taxation as a REIT in any
187、taxable year and do not qualify for certain statutory relief provisions,our income for that year will be taxed at regularcorporate rates,and we would be disqualified from taxation as a REIT for the four taxable years following the year during which we ceased to qualify as aREIT.Even if we qualify as
188、 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 tofederal income and excise taxes on our undistributed income.Additionally,any income earned by our services company,and any other TRS we form in thefuture,will be fully subject
189、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 ourportfolio under a blanket insurance policy in addition to other coverage that may be appropriate for
190、certain of our properties.We believe the policyspecifications and insured limits are appropriate and adequate for our properties given the relative risk of loss,the cost of the coverage,and industrypractice;however,our insurance coverage may not be sufficient to fully cover our losses.We do not carr
191、y insurance for certain losses,including,but notlimited to,losses caused by riots or war.Some of our policies,such as those covering losses due to terrorism and earthquakes,are insured subject tolimitations involving large deductibles or co-payments and policy limits that may not be sufficient to co
192、ver losses for such events.In addition,all but one ofthe properties in our portfolio as of December 31,2024 were located in Maryland,Virginia,North Carolina,South Carolina,Florida and Georgia,which areareas subject to an increased risk of hurricanes.While we will carry hurricane insurance on certain
193、 of our properties,the amount of our hurricane insurancecoverage may not be sufficient to fully cover losses from hurricanes.We may reduce or discontinue hurricane,terrorism,or other insurance on some or allof our properties in the future if the cost of premiums for any of these policies exceeds,in
194、our judgment,the value of the coverage discounted for the risk ofloss.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 incursignificant costs in the event of adverse weather conditions and natural disasters.In
195、 addition,our title insurance policies may not insure for the currentaggregate 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 weor one or more of our tenants experiences a loss that is uninsured or that ex
196、ceeds policy limits,we could lose the capital invested in the damaged propertiesas well as the anticipated future cash flows from those properties.In addition,if the damaged properties are subject to12Table of Contentsrecourse indebtedness,we would continue to be liable for the indebtedness,even if
197、these properties were irreparably damaged.Furthermore,we may not beable to obtain adequate insurance coverage at reasonable costs in the future as the costs associated with property and casualty renewals may be higher thananticipated.Regulation General Our properties are subject to various covenants
198、,laws,ordinances,and regulations,including regulations relating to common areas and fire andsafety 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 Titl
199、e III of the Americans with Disabilities Act of 1990(the ADA),to the extent that such properties arepublic accommodations as defined by the ADA.Under the ADA,all public accommodations must meet federal requirements related to access and use bydisabled persons.The ADA may require removal of structura
200、l barriers to access by persons with disabilities in certain public areas of our properties wheresuch removal is readily achievable.Although we believe that the properties in our portfolio in the aggregate substantially comply with present requirementsof the ADA,we have not conducted a comprehensive
201、 audit or investigation of all of our properties to determine our compliance,and we are aware thatsome particular properties may currently be in non-compliance with the ADA.Noncompliance with the ADA could result in the incurrence of additionalcosts to attain compliance,the imposition of fines,an aw
202、ard of damages to private litigants,and a limitation on our ability to refinance outstandingindebtedness.The obligation to make readily achievable accommodations is an ongoing one,and we will continue to assess our properties and to makealterations as appropriate in this respect.Environmental Matter
203、s 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,und
204、er,or migrating from such property,including costs to investigate and clean up such contamination and liability for harm to natural resources.Suchlaws often impose liability without regard to whether the owner or operator knew of,or was responsible for,the presence of such contamination,and theliabi
205、lity may be joint and several.These liabilities could be substantial,and the cost of any required remediation,removal,fines,or other costs couldexceed the value of the property and our aggregate assets.In addition,the presence of contamination or the failure to remediate contamination at ourproperti
206、es 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
207、infavor 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 mayrequire sub
208、stantial expenditures.Some of our properties contain,have contained,or are adjacent to or near other properties that have contained or currently contain storage tanksfor the storage of petroleum products,propane,or other hazardous or toxic substances.Similarly,some of our properties were used in the
209、 past forcommercial or industrial purposes,or are currently used for commercial purposes,that involve or involved the use of petroleum products or otherhazardous or toxic substances,or are adjacent to or near properties that have been or are used for similar commercial or industrial purposes.As a re
210、sult,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
211、,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 imposefines and penalties for fai
212、lure to comply with these requirements or expose us to third-party liability.Such laws require that owners or operators ofbuildings containing ACBM(and employers in such buildings)properly manage and maintain the asbestos,adequately notify or train those who may comeinto contact with asbestos,and un
213、dertake special precautions,including removal or other abatement,if asbestos would be disturbed during renovation ordemolition of a building.In addition,the presence of ACBM in our properties may expose us to third-party liability(e.g.liability for personal13Table of Contentsinjury associated with e
214、xposure 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 finesand penalties for failure to comply with these req
215、uirements.Such laws require,among other things,that owners or operators of residential facilities thatcontain or potentially contain lead-based paint notify residents of the presence or potential presence of lead-based paint prior to occupancy and prior torenovations and manage lead-based paint wast
216、e appropriately.In addition,the presence of lead-based paint in our buildings may expose us to third-partyliability(e.g.,liability for personal injury associated with exposure to lead-based paint).We are not presently aware of any material adverse issues at ourproperties involving lead-based paint.I
217、n 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 theiropera
218、tions at our properties,which are subject to regulation.Such environmental and health and safety laws and regulations could subject us or our tenantsto liability resulting from these activities.Environmental liabilities could affect a tenants ability to make rental payments to us.In addition,changes
219、 in lawscould increase the potential liability for noncompliance.Our leases sometimes require our tenants to comply with environmental and health and safety lawsand regulations and to indemnify us for any related liabilities.However,in the event of the bankruptcy or inability of any of our tenants t
220、o satisfy suchobligations,we may be required to satisfy such obligations.In addition,we may be held directly liable for any such damages or claims regardless ofwhether we knew of,or were responsible for,the presence or disposal of hazardous or toxic substances or waste and irrespective of tenant lea
221、se 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 remainsundiscovered or is not addressed over
222、 a period of time.Some molds may produce airborne toxins or irritants.Indoor air quality issues can also stem frominadequate ventilation,chemical contamination from indoor or outdoor sources,and other biological contaminants such as pollen,viruses,and bacteria.Indoor exposure to airborne toxins or i
223、rritants above certain levels can be alleged to cause a variety of adverse health effects and symptoms,includingallergic or other reactions.As a result,the presence of significant mold or other airborne contaminants at any of our properties could require us to undertakea costly remediation program t
224、o contain or remove the mold or other airborne contaminants from the affected property or increase indoor ventilation.Inaddition,the presence of significant mold or other airborne contaminants could expose us to liability from our tenants,employees of our tenants,or othersif property damage or perso
225、nal injury occurs.We are not presently aware of any material adverse indoor air quality issues at our properties.Competition We compete with a number of developers,owners,and operators of retail,office,and multifamily real estate,many of which own propertiessimilar to ours in the same markets in whi
226、ch our properties are located and some of which have greater financial resources than we do.In operating andmanaging our portfolio,we compete for tenants based on a number of factors,including location,rental rates,security,flexibility,and expertise to designspace to meet prospective tenants needs a
227、nd the manner in which the property is operated,maintained,and marketed.As leases at our properties expire,wemay encounter significant competition to renew or re-lease space in light of the large number of competing properties within the markets in which weoperate.As a result,we may be required to p
228、rovide 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 opportuni
229、ties.Our competitors may be able to pay higher propertyacquisition prices,may have private access to opportunities not available to us,may have more financial resources than we do,and may otherwise be in abetter position to acquire or develop a property.Competition may also have the effect of reduci
230、ng the number of suitable development and acquisitionopportunities 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
231、,includingsmall local companies and large regional and national companies.In our construction business,we compete for construction projects based on severalfactors,including cost,reputation for quality and timeliness,access to machinery and equipment,access to and relationships with high-qualitysubc
232、ontractors,financial strength,knowledge of local markets,and project management abilities.We believe that we compete favorably on the basis of theforegoing factors and that our construction business is well-positioned to compete effectively in the markets in which we operate.However,some of theconst
233、ruction companies with which we compete have different cost structures and greater financial and other resources than we14Table of Contentsdo,which may put them at an advantage when competing with us for construction projects.Competition from other construction companies may reduce thenumber of cons
234、truction projects that we are hired to complete and increase pricing pressure,either of which could reduce the profitability of ourconstruction business.Human Capital As of December 31,2024,we had 148 employees.We are committed to providing each employee with a safe,welcoming,and inclusive workenvir
235、onment and culture that enables them to contribute fully and develop to their highest potential.We invest heavily in our employees by providingquality training and learning opportunities;promoting inclusion and diversity;and upholding a high standard of ethics and respect for human rights.Attracting
236、,developing,and retaining team members is crucial to executing our strategy.We offer a comprehensive total rewards program aimed atthe varying health,home-life,and financial services.This program includes market-competitive pay,broad-based stock grants and bonuses,healthcarebenefits with company pai
237、d premiums,retirement savings plans,paid time off,paid parental leave,flexible work schedules,an Employee AssistanceProgram and other mental health services.Additionally,we invest in developing employees through programs such as the High-Performance Leadershipprogram,to help ensure they have a stron
238、g pipeline of future leaders.Additional information regarding our activities related to our people and sustainability,as well as our workforce diversity data,can be found in ourlatest Sustainability Report,which is located on our website at https:/ Sustainability Report is updated periodically.This
239、website address is intended to be an inactive textual reference only.None of the information on,or accessible through,our website is part of this Form10-K or is incorporated by reference herein.Corporate Information Our principal executive office is located at 222 Central Park Avenue,Suite 1000,Virg
240、inia Beach,Virginia 23462 in the Armada Hoffler Tower atthe Town Center of Virginia Beach.In addition,we have a construction office located at 1300 Thames Street,Suite 30,Baltimore,Maryland 21231 inThames Street Wharf at Harbor Point.The telephone number for our principal executive office is(757)366
241、-4000.We maintain a website located atArmadaH.The information on,or accessible through,our website is not incorporated into and does not constitute a part of this Annual Report onForm 10-K or any other report or document we file with or furnish to the SEC.Available Information We file our Annual Rep
242、ort on Form 10-K,Quarterly Reports on Form 10-Q,Current Reports on Form 8-K,and all amendments to those reportswith the SEC.You may obtain copies of these documents by accessing the SECs website at www.sec.gov.In addition,as soon as reasonably practicableafter such materials are furnished to the SEC
243、,we make copies of these documents available to the public free of charge through our website or bycontacting 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 commi
244、ttee,compensation committeeand nominating and corporate governance committee are all available in the Governance section of the Investor Relations section of our website.Anyamendment to or waiver of our Code of Business Conduct and Ethics will be disclosed in the Corporate Governance section of the
245、Investor Relationssection 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 Insider Trading Policy,an Environmental Policy,a Vendor Conduct Policy,and the charter of our
246、SustainabilityCommittee,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
247、,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 ourCompany and our business.The occurrence of any of the following risks could materially
248、 and15Table of Contentsadversely impact our financial condition,results of operations,cash flow,the market price of shares of our common stock,and our ability to,among otherthings,satisfy our debt service obligations and to make distributions to our stockholders,which in turn could cause our stockho
249、lders to lose all or a part oftheir investment.Some statements in this Annual Report on Form 10-K,including statements in the following risk factors constitute forward-lookingstatements.Please refer to the section entitled Special Note Regarding Forward-Looking Statements at the beginning of this An
250、nual Report on Form 10-K.Risks Related to Our BusinessAdverse 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 ob
251、ligations.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 estateindustry as a whole.Such conditions may materially and adversely affect us as a result of the following potential consequences,among others:decreased d
252、emand for retail,office,and multifamily space,which would cause market rental rates and property values to be negativelyimpacted;reduced values of our properties may limit our ability to dispose of assets at attractive prices or obtain debt financing secured by ourproperties and may reduce the avail
253、ability 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 topursue acquisition and development opportunities and refinance existing debt,reduce our returns from our acquisition and developmentact
254、ivities,and increase our future debt service expense;andone or more lenders under our credit facility(as defined below)could refuse to fund their financing commitment to us or could otherwisefail to do so,and we may not be able to replace the financing commitment of any such lenders on favorable ter
255、ms 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 mayexperience higher vacancy rates and delays in re-leasing vacant space,which could negatively impact our financial condition,results of operations,cashflow,cash
256、available for distribution,and ability to service our debt obligations.We may be unable to identify and complete acquisitions of properties and development opportunities that meet our investment criteria,which maymaterially and adversely affect our results of operations,cash flow,and growth prospect
257、s.Our business and growth strategy involves the development and selective acquisition of retail,office,and multifamily properties.We may expendsignificant management time and other resources,including out-of-pocket costs,in pursuing these investment opportunities.Our ability to completedevelopment p
258、rojects 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 acquisitions anddevelopment opportunities,including those that we are su
259、bsequently unable to complete;we have agreements for the acquisition or development of properties that are subject to conditions,which we may be unable to satisfy;andwe may be unable to obtain financing on favorable terms or at all.If we are unable to identify attractive investment opportunities and
260、 successfully develop new properties,our results of operations,cash flow,andgrowth prospects could be materially and adversely affected.We may dispose of certain properties over time as we seek to pursue growth through our investment strategy.However,investments in real estate areilliquid,and it may
261、 not be possible to dispose of assets in a timely manner or on favorable terms,which could adversely affect our financial condition,operating results,and cash flows.Our ability to dispose of properties on advantageous terms depends on factors beyond our control,including competition from other selle
262、rs and theavailability of attractive financing for potential buyers,and we cannot predict whether we will be able to sell any property we desire to for the price or onthe terms set by us or acceptable to us,or the length of time needed to find a willing buyer and to close the sale.Upon sales of prop
263、erties or assets,we maybecome subject to contractual indemnity obligations,incur unusual or extraordinary distribution requirements,be required to expend funds to correctdefects or make16Table of Contentscapital improvements or,as a result of required debt repayment,face a shortage of liquidity.Ther
264、efore,as a result of the foregoing events or circumstances,we may not be able to achieve our strategic reshaping of our portfolio promptly,on favorable terms,or at all in response to changing economic,financial,and investment conditions,which may adversely affect our cash flows and our ability to ma
265、ke distributions to stockholders.The geographic concentration of our portfolio could cause us to be more susceptible to adverse economic or regulatory developments in the markets inwhich our properties are located than if we owned a more geographically diverse portfolio.The majority of the propertie
266、s in our portfolio are located in Virginia,Maryland,and North Carolina,which expose us to greater economic risksthan if we owned a more geographically diverse portfolio.As of December 31,2024,our properties in the Virginia,Maryland.and North Carolina marketsrepresented approximately 41%,28%,and 13%,
267、respectively,of the total rental revenues of the properties in our portfolio.Furthermore,many of ourproperties are located in the Town Center of Virginia Beach and Harbor Point at Baltimore,and the rental revenues from such properties represented 22%and 27%,respectively,of our total rental revenues
268、for the year ended December 31,2024.As a result of this geographic concentration,we are particularlysusceptible to adverse economic,regulatory or other conditions in the Virginia,Maryland,and North Carolina markets(such as periods of economicslowdown or recession,business layoffs or downsizing,indus
269、try slowdowns,relocations of businesses,increases in real estate and other taxes,and the costof complying with governmental regulations or increased regulation),as well as to natural disasters that occur in these markets(such as hurricanes andother events).For example,the markets in Virginia,Marylan
270、d,and North Carolina in which many of the properties in our portfolio are located contain highconcentrations of military personnel and operations,and a reduction of the military presence or cuts in defense spending in these markets could have amaterial adverse effect on us.If there is a downturn in
271、the economy in Virginia,Maryland,or North Carolina,our operations,revenue,and cash availablefor distribution,including cash available to pay distributions to our stockholders,could be materially and adversely affected.We cannot assure you thatthese markets will grow or that underlying real estate fu
272、ndamentals will be favorable to owners and operators of retail,office,or multifamily properties.Our operations may also be adversely affected if competing properties are built in these markets.Moreover,submarkets within any of our target marketsmay be dependent upon a limited number of industries.An
273、y adverse economic or real estate developments in our markets,or any decrease in demand forretail,office,or multifamily space resulting from the regulatory environment,business climate or energy or fiscal problems,could materially and adverselyaffect our financial condition,results of operations,cas
274、h 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 suchproperties,including as a result of hurricanes or other disast
275、ers.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 itsexisting specifications.For example,all but one of the properties in our portfolio as of December 31,2024 are located in Maryland,Virginia,NorthCarolina,
276、South Carolina,Georgia,and Florida,which are areas particularly susceptible to hurricanes.While we carry insurance on certain of ourproperties,the amount of our insurance coverage may not be sufficient to fully cover losses from hurricanes and will be subject to limitations involvinglarge deductible
277、s or co-payments.Further,reconstruction or improvement of properties would likely require significant upgrades to meet zoning andbuilding code requirements.Environmental and legal restrictions could also restrict the rebuilding of our properties.We have a substantial amount of indebtedness outstandi
278、ng,which may expose us to the risk of default under our debt obligations and may includecovenants that restrict our ability to pay distributions to our stockholders.As of December 31,2024,we had total debt of approximately$1.3 billion,including amounts drawn under our credit facility,and we may incu
279、rsignificant 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$1.3 billion as of December 31,2024.Payments of principal and interest on borrowings m
280、ayleave us with insufficient cash resources to operate our properties or to pay the dividends currently contemplated or necessary to maintain our REITqualification.Our level of debt and the limitations imposed on us by our debt agreements could have significant adverse consequences,including thefoll
281、owing: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 abilityto meet operational needs;we may be unable to refinance our indebtedness
282、 at maturity or the refinancing terms may be less favorable than the terms of our originalindebtedness,particularly if interest rates remain elevated;17Table of Contentswe may be forced to dispose of one or more of our properties,possibly on unfavorable terms or in violation of certain covenants to
283、whichwe 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 theloans or collect rents and other income from our properties;we may violate restrictive covenants in our loan documents,which would entitle
284、 the lenders to accelerate our debt obligations or reduce ourability to pay,or prohibit us from paying,distributions to our stockholders;andour 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
285、condition,results of operations,cash flow,cash available for distribution,and ability toservice our debt obligations could be materially and adversely affected.Furthermore,foreclosures could create taxable income without accompanying cashproceeds,which could hinder our ability to meet the REIT distr
286、ibution requirements imposed by the Code.See Managements Discussion and Analysis ofFinancial Condition and Results of OperationsLiquidity 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 capi
287、tal markets.Morningstar DBRS is expected to periodically evaluate our debt levels and other factors,which likely will include Morningstar DBRSsassessment of our financial strength,liquidity,capital structure,asset quality,and sustainability of cash flow and earnings.Due to changes in these factorsan
288、d 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
289、 interest expense and may adversely affect ourfinancial 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 int
290、erest rates wouldincrease our interest expense and increase the cost of refinancing existing debt and issuing new debt,which would adversely affect our cash flow andability to make distributions to our stockholders.In addition,if we need to repay existing debt during periods of rising interest rates
291、,we could be requiredto liquidate one or more of our investments at times that may not permit realization of the maximum return on such investments.The effect of prolongedinterest rate increases could adversely impact our ability to make acquisitions and develop properties.Subject to maintaining our
292、 qualification as a REIT,we expect to continue to enter into hedging transactions to protect us from the effects ofinterest rate fluctuations on floating rate debt.Our existing hedging transactions have included,and future hedging transactions may include,entering intointerest rate cap agreements or
293、 interest rate swap agreements,which involve risk.Our failure to hedge effectively against interest rate changes mayadversely 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
294、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 orat all,which could limit our ability to,among o
295、ther things,meet our capital and operating needs or make the cash distributions to our stockholdersnecessary 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 ourREIT taxabl
296、e income,determined without regard to the dividends paid deduction and excluding any net capital gain.In addition,we will be subject toincome 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 ofthese distr
297、ibution 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 alland any a
298、dditional 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 markets perception of our growth potential;our current debt levels;our current and expected future earnings;our cash flow and cas
299、h distributions;andthe market price per share of our common stock and Series A Preferred Stock.18Table of Contents If we cannot obtain capital from third-party sources,we may not be able to acquire or develop properties when strategic opportunities exist,meetthe capital and operating needs of our ex
300、isting properties,satisfy our debt service obligations or make the cash distributions to our stockholders necessaryto 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 andadv
301、ersely affect our financial condition,results of operations,cash flow,cash available for distribution,and ability to service our debt obligations.As of December 31,2024,approximately 4.0%of the square footage of the stabilized properties in our retail and office portfolios was available.Additionally
302、,4.7%and 12.3%of the ABR in our retail portfolio was scheduled to expire in 2025 and 2026,respectively,and 3.6%and 2.0%of the ABR inour office portfolio was scheduled to expire in 2025 and 2026,respectively.We cannot assure you that new leases will be entered into,that leases will berenewed,or that
303、our properties will be re-leased at net effective rental rates equal to or above the current average net effective rental rates or that substantialrent abatements,tenant improvements,early termination rights or below-market renewal options will not be offered to attract new tenants or retain existin
304、gtenants.In addition,our ability to lease our multifamily properties at favorable rates,or at all,may be adversely affected by the increase in supply ofmultifamily properties in our target markets.Our ability to lease our properties depends upon the overall level of spending in the economy,which isa
305、dversely affected by,among other things,job losses and unemployment levels,fears of a recession,personal debt levels,the housing market,stock marketvolatility,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-l
306、ease asignificant portion of our available space and space for which leases expire,our financial condition,results of operations,cash flow,cash available fordistribution,and ability to service our debt obligations could be materially and adversely affected.Tenant demand in our office portfolio may d
307、ecline due to disruptions to the office sector,which could materially and adversely affect us.Companies have been increasing their utilization of work-from-home alternatives,videoconferencing,shared office spaces,co-working spaces,telecommuting,and flexible work schedules.To the extent these trends
308、continue,tenant demand for our office space may be reduced,which couldmaterially 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 ofoperations,cash flow and cash available for distri
309、bution.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-leaseapartment units as leases expire,our rental revenues will be impacted by declines in market rents more quickly than if all of our leases had long
310、er 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 o
311、n our growth prospects.The current market for property acquisitions and development opportunities continues to be extremely competitive.This competition may increasethe demand for the types of properties in which we typically invest and,therefore,reduce the number of suitable investment opportunitie
312、s available to usand increase the purchase prices for such properties in the event we are able to acquire or develop such properties.We face significant competition forattractive investment opportunities from an indeterminate number of investors,including publicly traded and privately held REITs,pri
313、vate 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 inproperties than we do,and the ability to accept more risk than we can prudently manage,including risks with respect to the geogra
314、phic proximity ofinvestments and the payment of higher acquisition prices.This competition will increase if investments in real estate become more attractive relative toother forms of investment.If the level of competition for investment opportunities is significant in our target markets,it could ha
315、ve a material adverseeffect on our growth prospects.Increased competition and increased affordability of residential homes could limit our ability to retain our residents,lease apartment units,or increaseor maintain rents at our multifamily apartment communities.Our multifamily apartment communities
316、 compete with numerous housing alternatives in attracting residents,including other multifamilyapartment communities and single-family rental units,as well as owner-occupied single-family and multifamily units.Competitive housing in a particulararea and an increase in affordability of owner-occupied
317、 single-family and19Table of Contentsmultifamily units due to,among other things,declining housing prices,oversupply,mortgage interest rates,and tax incentives and government programs topromote home ownership,could adversely affect our ability to retain residents,lease apartment units,and increase o
318、r maintain rents at our multifamilyproperties,which could adversely affect our results of operations,cash flow,and cash available for distribution.The failure of properties that we acquire or develop to meet our financial expectations could have a material adverse effect on us,including ourfinancial
319、 condition,results of operations,cash flow,cash available for distribution,ability to service our debt obligations,the per share trading price ofour common stock and Series A Preferred Stock,and growth prospects.Our acquisitions and development projects and our ability to successfully operate these
320、properties may be exposed to the following significantrisks,among others:we may acquire or develop properties that are not accretive to our results upon acquisition,and we may not successfully manage and leasethose properties to meet our expectations;our cash flow may be insufficient to enable us to
321、 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 newproperties;we may be unable to quickly and efficiently integrate new acquisitions or dev
322、eloped properties into our existing operations;market conditions may result in higher-than-expected vacancy rates and lower than expected rental rates;andwe may acquire properties subject to liabilities without any recourse,or with only limited recourse,with respect to unknown liabilities suchas lia
323、bilities for clean-up of undisclosed environmental contamination,claims by tenants,vendors,or other persons dealing with the formerowners of the properties,liabilities incurred in the ordinary course of business,and claims for indemnification by general partners,directors,officers,and others indemni
324、fied 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 comm
325、on stock and Series A Preferred Stock,andgrowth prospects could be materially and adversely affected.We may be required to make rent or other concessions or significant capital expenditures to improve our properties in order to retain and attracttenants,which may materially and adversely affect our
326、financial condition,results of operations,cash flow,cash available for distribution,and abilityto 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 imp
327、rovements,or provide additional services to our tenants,any of which would increase our costs.As a result,we may haveto 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 cap
328、ital to make such expenditures.If we are unable to do so or capital is otherwise unavailable,we may be unable tomake 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 couldhave a material adverse effect on
329、our financial condition,results of operations,cash flow,cash available for distribution,and ability to service our debtobligations.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 a
330、re outside of our primarymarkets.Entering into new markets exposes us to a variety of risks,including difficulty evaluating local market conditions and local economies,developingnew business relationships in the area,competing with other companies that already have an established presence in the are
331、a,hiring and retaining keypersonnel,evaluating quality tenants in the area,and a lack of familiarity with local governmental and permitting procedures.Furthermore,expansion intonew markets may divert management time and other resources away from our current primary markets.As a result,we may not be
332、successful in expandinginto new markets,which could adversely impact our financial condition,results of operations,cash flow,cash available for distribution,and ability toservice our debt obligations.Real estate financing investments are subject to significant risks,and losses related to these inves
333、tments could have a material adverse effect on ourfinancial condition and results of operations.We have originated,and in the future expect to originate or acquire,mezzanine loans,preferred equity investments,or20Table of Contentssimilar investments(together real estate financing investments),which take the form of subordinated loans secured by second mortgages on theunderlying property or loans s
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