Executive Summary

Q2 2025 delivered stable operations: GAAP diluted EPS of $0.04, Normalized FFO/share of $0.25, and total revenues of $101.3M, with same-store NOI up 1.4% GAAP and broad-based positive releasing spreads in office (+11.7% GAAP) and retail (+10.8% GAAP) .
vs. estimates: EPS beat (Actual $0.048 vs. $0.035 consensus; +$0.013), while FFO/share missed (Actual $0.19 vs. $0.261 consensus). Revenue printed well above consensus (Actual $101.3M vs. $64.4M consensus). Bolded below in tables. Values retrieved from S&P Global.
Guidance maintained at $1.00–$1.10 Normalized FFO/share for FY 2025; key assumptions adjusted (higher adjusted interest expense, slightly higher portfolio NOI, lower interest income; construction GP raised) .
Balance sheet actions (July private placement $115M at blended ~5.86% and $820M swaps) reduce rate volatility and extend duration; debt ~94% fixed/hedged at quarter end .
Strategic catalysts: accelerating lease-up at Allied | Harbor Point (ahead of schedule), strong office occupancy in mixed-use ecosystems, and redevelopment backfills (e.g., Trader Joe’s and Golf Galaxy) at materially higher rents supporting NOI trajectory .

What Went Well and What Went Wrong

What Went Well

Resilient commercial leasing: office releasing spreads +11.7% GAAP (+5.5% cash) and retail renewal spreads +10.8% GAAP (+5.5% cash) in Q2; portfolio occupancy solid (Retail 94.2%, Office 96.3%, Multifamily 94.0%) .
Strategic capital execution: $115M senior unsecured notes (3 tranches; 5.57%–6.09% due 2028–2032) used to repay construction loan and revolver; incremental hedging with $820M swaps (SOFR 2.25%) through Aug-2026 .
Management focus on quality and simplification: “We are building on our strengths to create a more agile Armada Hoffler; one positioned to deliver consistent, durable earnings growth and long-term value.” — CEO Shawn Tibbetts .

What Went Wrong

FFO/share compression YoY and vs consensus: Q2 FFO/share $0.19 vs $0.25 in Q2 2024 due to lower construction gross profit, higher interest expense, and equity loss from unconsolidated entities; Normalized FFO/share $0.25 vs $0.34 YoY .
Construction revenues/gross profit down sharply YoY (revenues $32.0M vs $116.8M; gross profit $1.4M vs $4.3M) reflecting backlog cadence and eliminations; backlog ended at $106.6M .
Leverage ticked up with Allied consolidation and financing; Net Debt/Total Adjusted EBITDAre at 7.7x in Q2 (guidance to end-year 7.4–7.5x contingent on stabilization pacing) .

Financial Results

Core metrics vs prior periods and consensus

Metric	Q2 2024	Q1 2025	Q2 2025
Total Revenues ($USD Millions)	$184.736	$114.643	$101.263
GAAP Diluted EPS ($)	$0.00	-$0.07	$0.04
FFO per Diluted Share ($)	$0.25	$0.17	$0.19
Normalized FFO per Diluted Share ($)	$0.34	$0.25	$0.25

Consensus vs Actual (Q2 2025 only):

Metric	Consensus	Actual
Revenue ($USD Millions)	$64.425*	$101.263
Primary EPS ($)	$0.035*	$0.048*
FFO / Share (REIT) ($)	$0.261*	$0.19

EPS: beat → Actual $0.048 vs. $0.035 consensus → bolded beat. FFO/share: miss → Actual $0.19 vs. $0.261 consensus → bolded miss. Revenue: beat → Actual $101.3M vs. $64.4M consensus → bolded beat. Values retrieved from S&P Global.
Note: EPS actual from S&P reflects $0.048; GAAP diluted EPS per company release is $0.04 .

Segment NOI and key contributions

Segment NOI ($USD Millions)	Q2 2024	Q1 2025	Q2 2025
Retail Segment NOI	$19.278	$17.982	$18.311
Office Segment NOI	$14.780	$15.238	$15.445
Multifamily Segment NOI	$8.232	$9.020	$8.724
General Contracting & Real Estate Services Gross Profit	$4.339	$1.364	$1.384
Real Estate Financing Gross Profit	$3.966	$2.022	$3.672
Total Property Portfolio NOI	$42.290	$42.240	$42.480

KPIs and Operating Metrics

KPI	Q1 2025	Q2 2025
Occupancy – Retail	94.5%	94.2%
Occupancy – Office	97.5%	96.3%
Occupancy – Multifamily	95.0%	94.0%
Retail Renewal Spreads (GAAP / Cash)	11.0% / 7.4%	10.8% / 5.5%
Office Releasing Spreads (GAAP / Cash)	23.3% / 3.7%	11.7% / 5.5%
Same-Store NOI Growth (GAAP)	2.5% YoY (Q1)	1.4% YoY (Q2)
Construction Backlog ($USD Millions)	$80.4	$106.6
Commercial Leasing Volume (sq ft)	~313K	~161K

Note: Q2 press release referenced ~168K sq ft; 8‑K lists ~161K sq ft executed. We use 8‑K for consistency .

Guidance Changes

Metric	Period	Previous Guidance (Q1 2025)	Current Guidance (Q2 2025)	Change
Portfolio NOI ($USD Millions)	FY 2025	$172.2 – $175.8	$173.6 – $176.0	Raised (both ends)
Construction Segment Gross Profit ($USD Millions)	FY 2025	$4.8 – $6.8	$5.0 – $7.0	Raised (both ends)
G&A Expenses ($USD Millions)	FY 2025	($17.0) – ($16.2)	($17.2) – ($16.4)	Lowered (higher expense)
Interest Income ($USD Millions)	FY 2025	$15.9 – $16.9	$15.3 – $16.3	Lowered
Adjusted Interest Expense ($USD Millions)	FY 2025	($62.6) – ($58.6)	($64.7) – ($60.7)	Lowered (higher expense)
Normalized FFO per Diluted Share ($)	FY 2025	$1.00 – $1.10	$1.00 – $1.10	Maintained
Dividend (Quarterly)	2025	Reset to $0.14 in March; declared $0.14 on June 18	Maintained $0.14 (Q2 declaration)	Maintained

Assumptions: Southern Post commercial stabilization in 4Q25; two real estate financing investments; one disposition .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 2024; Q1 2025)	Current Period (Q2 2025)	Trend
Balance sheet simplification & duration	Dividend rightsize to $0.14; new hedges $150M; quality focus	$115M private notes; $820M swaps; debt ~94% fixed/hedged	Strengthening; duration up, volatility down
Office in mixed-use ecosystems	97.5% occupancy; strong spreads; minimal near-term expirations	96.3% occupancy; 11.7% GAAP spreads; Harbor Point activity lifted by T. Rowe HQ	Stable–Positive
Retail repositioning/backfills	85% of vacancy under LOI at higher rents; F1 Arcade at Interlock	Trader Joe’s + Golf Galaxy; Boot Barn; ~60%+ rent uplifts cited	Positive merchandising upgrades
Multifamily fundamentals	95% occupancy; blended lease growth; Greenside remediation	94% occupancy; Allied leasing ahead of schedule; July blended spreads ~4.3%	Mixed near term; improving lease-up
Tariffs/macro	Headwind commentary; controlled impact to leasing	Limited impact to leasing; construction cadence still variable	Neutral to mild headwinds
Technology/process	Margin enhancements via tech/process	Continued operational excellence messaging	Ongoing execution

Management Commentary

“We are reaffirming full year guidance… supported by stable operating performance, which will overcome the updated third party construction projection and a simplified capital base.” — CFO Matthew Barnes-Smith .
“We are building on our strengths to create a more agile Armada Hoffler; one positioned to deliver consistent, durable earnings growth and long-term value.” — CEO Shawn Tibbetts .
On retail backfills: “We executed an LOI to downsize Burlington… backfilling… driving almost 40% rent increase… Trader Joe’s… and Golf Galaxy… nearly 60% over Bed Bath and Beyond.” — CEO .
On leverage trajectory: “As EBITDA continues to come through, we expect [Net Debt leverage] to come down into the 7.4–7.5x range at the end of this year” — CFO .

Q&A Highlights

Guidance range drivers: Upside from Allied lease-up and construction; downside sensitivities around percent-complete recognition; balance sheet positioned against rate moves .
Cap rates and dispositions: Multifamily acquisitions around ~6% cap; contemplated mixed office/retail disposition mid-6% cap, redeployment to accretive uses vs private placement benchmark ~5.83% .
Maturities and refinancing strategy: Exercised TD term loan extension; considering GSE/Lifeco fixed debt ~5.0–5.25% for near maturities; potential future private placements .
WeWork giveback detail: ~31k sf vacancy at One City Center with potential demising; continuous rent payments through the quarter mitigated downtime .
Disposition pipeline thinking: Opportunistic in dislocated markets; recycle fully leased assets into higher-upside centers; no fixed dollar target .

Estimates Context

Q2 2025: EPS beat; FFO/share miss; Revenue beat vs S&P Global consensus.
Forward FY 2025: FFO/share consensus ~$1.05*, in the middle of company’s $1.00–$1.10 guidance range . Values retrieved from S&P Global.

Metric	Q4 2024	Q1 2025	Q2 2025
Revenue Consensus Mean ($USD Millions)	66.673*	63.180*	64.425*
Primary EPS Consensus Mean ($)	0.04*	—	0.035*
FFO / Share (REIT) Consensus Mean ($)	0.27*	0.26*	0.261*

Actuals for comparison:

Metric	Q4 2024	Q1 2025	Q2 2025
Revenue ($USD Millions)	142.845*	112.730*	101.263
Primary EPS ($)	—	-0.0585*	0.048*
FFO / Share (REIT) ($)	0.29	0.17	0.19

Values retrieved from S&P Global. Company-reported figures cited where available.

Key Takeaways for Investors

Mixed-use core remains the earnings engine: office occupancy ~96% with positive spreads and retail renewals >10% GAAP underpin NOI stability .
Expect near-term FFO/share pressure relative to consensus from lower construction gross profit and higher adjusted interest expense vs Q1, partly offset by portfolio NOI .
Balance sheet durability improved: $115M private notes and $820M swaps push fixed/hedged debt to ~94%, reducing rate volatility into 2026 .
Leasing catalysts: Allied | Harbor Point ahead of schedule; Trader Joe’s/Golf Galaxy and other backfills at materially higher rents likely lift retail NOI into 2026 .
Guidance steady at $1.00–$1.10 Normalized FFO/share; ranges raised for Portfolio NOI and Construction GP, but lowered for interest income and raised for adjusted interest expense .
Watch leverage trajectory and capital allocation: management targets ~7.4–7.5x Net Debt/Adj. EBITDAre by year-end contingent on stabilization pace and selective asset recycling .
Tactical trade setup: potential near-term EPS “beat narrative” amid FFO/share misses; stock reaction likely tied to visibility on Allied stabilization, retail backfill execution, and further duration-extension steps .

Armada Hoffler Properties, Inc. (AHH)·Q2 2025 Earnings Summary