Armada Hoffler Properties Inc (AHH) 2023 Q4 法說會逐字稿

Good morning, ladies and gentlemen, and welcome to the Armada Hoffler fourth quarter 2023 earnings conference call. (Operator Instructions) This call is being recorded on Thursday, February 22, 2024.

早安，女士們、先生們，歡迎參加 Armada Hoffler 2023 年第四季財報電話會議。（操作員說明）此通話錄音時間為 2024 年 2 月 22 日星期四。

I will now like to turn the conference over to Chelsea Forrest, Director of Corporate Communications and Investor Relations. Please go ahead.

我現在將會議交給企業傳播和投資者關係總監切爾西·福雷斯特 (Chelsea Forrest)。請繼續。

Good morning, and thank you for joining Armada Hoffler fourth quarter and full year 2023 earnings conference call and webcast. On the call this morning. In addition to myself is Lou Haddad, CEO; Matthew Barnes-Smith, CFO; and Shawn Tibbetts, President and COO.

早安，感謝您參加 Armada Hoffler 2023 年第四季和全年財報電話會議和網路廣播。今天早上打電話。除了我本人之外，還有執行長盧·哈達德 (Lou Haddad)；馬修‧巴恩斯‧史密斯，財務長；以及總裁兼營運長肖恩·蒂貝茨 (Shawn Tibbetts)。

The press release announcing our fourth quarter earnings, along with our earnings guidance and supplemental package were distributed this morning, and a replay of this call will be available shortly after the conclusion of the call through May 23, 2024. The numbers to access the replay are provided in the earnings press release. For those who listen to the rebroadcast of this presentation, we remind you that the remarks made herein are as of today, February 22, 2024, and will not be updated subsequent to this initial earnings call.

宣布我們第四季度收益的新聞稿以及我們的收益指導和補充方案已於今天上午發布，本次電話會議的重播將在電話會議結束後不久提供，直至 2024 年 5 月 23 日。收益新聞稿中提供了觀看重播的號碼。對於那些收聽本簡報重播的人，我們提醒您，本文中的言論截至今天，即 2024 年 2 月 22 日，並且不會在本次首次財報電話會議後更新。

During this call, we may make forward-looking statements, including statements related to the future performance of our portfolio, our development pipeline, the impact of acquisitions and dispositions, our mezzanine program, our construction business, our liquidity position, our portfolio performance and financing activities, as well as comments on our guidance and outlook.

在這次電話會議中，我們可能會做出前瞻性陳述，包括與我們的投資組合的未來業績、我們的開發管道、收購和處置的影響、我們的夾層計劃、我們的建築業務、我們的流動性狀況、我們的投資組合績效和融資活動，以及對我們的指導和前景的評論。

Listeners are cautioned that any forward-looking statements are based upon management's beliefs, assumptions and expectations, taking into account information that is currently available. These beliefs, assumptions and expectations may change as a result of possible events or factors, not all of which are known and many of which are difficult to predict and generally beyond our control.

請聽眾注意，任何前瞻性陳述均基於管理層的信念、假設和期望，並考慮了當前可獲得的資訊。這些信念、假設和期望可能會因可能發生的事件或因素而發生變化，並非所有事件或因素都是已知的，而且其中許多難以預測並且通常超出我們的控制範圍。

These risks and uncertainties can cause actual results to differ materially from our current expectations, and we advise listeners to review the forward-looking statement disclosure in our press release that we distributed this morning. And the risk factors disclosed documents that we have filed with or furnished to the SEC.

這些風險和不確定性可能導致實際結果與我們目前的預期有重大差異，我們建議聽眾查看我們今天早上發布的新聞稿中所揭露的前瞻性聲明。風險因素揭露了我們已向 SEC 提交或提供的文件。

We will also discuss certain non-GAAP financial measures, including but not limited to FFO and normalized FFO. Definitions of these non-GAAP measures, as well as reconciliations to the most comparable GAAP measures are included in the quarterly supplemental package, which is available on our website at armadahoffler.com. I'll now turn the call over to Lou.

我們還將討論某些非 GAAP 財務指標，包括但不限於 FFO 和標準化 FFO。這些非 GAAP 衡量標準的定義以及與最具可比性 GAAP 衡量標準的調整均包含在季度補充包中，該補充包可在我們的網站 armadahoffler.com 上取得。我現在將電話轉給盧。

Thanks, Chelsea. Good morning, everyone, and thank you for joining us today. In addition to analysts and investors, there are many of our motto hopper family and joint venture partners on the call. On behalf of our Founder and Chairman, Dan Hoffler, the Board of Directors and executive management. We sincerely thank you for being a part of our team later in the call, Shawn and Matt will comment on our year end results as well as our 2024 guidance. I will highlight two important actions that were taken by our Board of Directors.

謝謝，切爾西。大家早安，感謝您今天加入我們。除了分析師和投資者之外，參加電話會議的還有我們的座右銘 hopper 家族和合資夥伴的許多人。代表我們的創辦人兼董事長 Dan Hoffler、董事會和執行管理階層。我們衷心感謝您在稍後的電話會議中成為我們團隊的一員，Shawn 和 Matt 將評論我們的年終業績以及 2024 年的指導。我將重點放在董事會採取的兩項重要行動。

Lastly, first, as you probably have already seen, we've raised the dividend a solid 5% to $0.205 per quarter. This increase brings the dividend into alignment with our long-standing coverage parameters of approximately 80% of AFFO.

最後，首先，正如您可能已經看到的，我們將股息穩定提高了 5%，達到每季 0.205 美元。這一增長使股息與我們長期覆蓋 AFFO 約 80% 的參數保持一致。

More importantly, is indicative of management's confidence in the trajectory of our business model, increased property NOI, strong leasing activity and development income expected to come online in the fourth quarter. All factor into our confidence in our core business and sustainability of our current cash flows.

更重要的是，這表明管理層對我們的業務模式軌跡、房地產 NOI 增加、租賃活動強勁以及預計在第四季度上線的開發收入充滿信心。所有這些因素都影響了我們對核心業務和當前現金流可持續性的信心。

The second Board resolution was the promotion of Shaun pivots to the position of President upon my retirement in spring of 2025. We anticipate Shawn will become CEO. Over the last five years, Shawn has shown remarkable business acumen, team, building skills and leadership talent as a CEO, who is nearing the end of his time in the top job, one of the most important duties it defined and Mentor a likely successor, and he does his job really well.

第二項董事會決議是在我 2025 年春季退休後晉升 Shaun 擔任總裁職務。我們預計肖恩將成為首席執行官。在過去的五年裡，肖恩作為執行長表現出了卓越的商業頭腦、團隊精神、培養技能和領導才能，他的最高職位任期即將結束，這是其定義的最重要的職責之一，而導師可能是繼任者，而且他的工作做得非常好。

We find someone who has the potential to eclipse the accomplishments of his predecessor, we have found that person in Shawn, this promotion is the first step in the succession plan approved by the Board last year. The next phase will be our Founder and Chairman, Dan Hoffler's transition to Chairman Emeritus.

我們找到了一個有潛力讓他的前任的成就黯然失色的人，我們找到了肖恩這個人，這次晉升是董事會去年批准的繼任計劃的第一步。下一階段將是我們的創辦人兼董事長 Dan Hoffler 過渡為榮譽主席。

We expect to remain on the Board as of our annual meeting in June. At that time, assuming shareholder approval, I will become both Chairman and CEO for an interim period, expected to be approximately one year, after which we expect to promote Shawn to CEO. Dan and I are excited to start to transition to a new generation of management while continuing to guide the Company to further growth and prosperity.

我們預計自 6 月的年度會議起將繼續留在董事會。屆時，假設股東批准，我將暫時擔任董事長兼首席執行官，預計大約一年，之後我們預計將肖恩晉升為首席執行官。丹和我很高興開始向新一代管理層過渡，同時繼續引導公司進一步發展和繁榮。

And now I'll turn the call over to Shawn.

現在我將把電話轉給肖恩。

Thank you, Lou, and I appreciate the kind words and confidence you have placed in me to lead the company into the future. As Lou stated, we concluded a challenging and successful year in 2023 and are looking forward to continuing to put in place the foundational elements necessary to further expand the Company and bolster growth.

謝謝你，Lou，我很感謝你對我領導公司走向未來的善意話語和信任。正如樓先生所說，我們在 2023 年結束了充滿挑戰且成功的一年，並期待繼續落實進一步擴大公司和促進成長所需的基礎要素。

This morning, I'll be focusing on performance during 2023, followed by our guidance for 2024. In addition to sharing commentary about our projections into 2025 and beyond, Matt will also follow up with more detail we released earnings for the fourth quarter and the full year 2023. Earlier this morning, Q4 ended at $0.31 of AFFO per share. While the year concluded at $1.24 in FFO per share to sell performance represents a growth of 16% since the pandemic reset in 2021.

今天早上，我將重點放在 2023 年的表現，然後是我們對 2024 年的指導。除了分享我們對 2025 年及以後預測的評論之外，Matt 還將跟進我們發布的第四季度和 2023 年全年收益的更多細節。今天早些時候，第四季度 AFFO 收於每股 0.31 美元。儘管 2021 年 FFO 每股銷售業績收於 1.24 美元，但自 2021 年疫情爆發以來，業績成長了 16%。

Our 2023 earnings results were yet another record for our 43 year old company and amid significant headwinds, the earnings were consistent with our guidance. I want to take a moment and thank all of the talented and dedicated Armada Hoffler team members for their tremendous efforts and results while actively managing the challenges presented and the real estate and broader market.

我們 2023 年的獲利結果創下了這家擁有 43 年歷史的公司的另一項紀錄，儘管面臨巨大的阻力，但獲利與我們的指導一致。我想花一點時間感謝所有才華橫溢、敬業的 Armada Hoffler 團隊成員，他們在積極應對所面臨的挑戰以及房地產和更廣泛市場的同時，付出了巨大的努力並取得了成果。

As you recall, we were awarded an investment-grade credit rating of triple B from Morningstar DBRS. in January of 2023 to bring you up to date. And as you may have seen in our press release, MorningStar DBRS has reaffirmed the triple-B rating effective January 2024. We are proud of this accomplishment and remain optimistic that we will be able to leverage the rating to place private debt when the time is right.

您還記得，我們​​獲得了晨星 DBRS 的 3B 投資等級信用評級。 2023 年 1 月為您帶來最新動態。正如您可能在我們的新聞稿中看到的那樣，晨星 DBRS 重申了 3B 評級，自 2024 年 1 月起生效。我們對這項成就感到自豪，並樂觀地認為，我們將能夠在時機成熟時利用該評級來發行私人債務。

Matt will touch on this a bit later. Please refer to the supplemental package to review our detailed portfolio highlights in addition to our organic same-store portfolio NOI growth, we purchased the interlock in West Midtown Atlanta. As you recall, we were the construction firm and mezzanine lender on that project. This was a significant win for our Company's loan to own program and for our expansion, more deeply into the Southeast market surrounding Atlanta.

馬特稍後會談到這一點。請參閱補充包以查看我們詳細的產品組合亮點，以及我們的有機同店產品組合 NOI 增長，我們購買了亞特蘭大中城西區的聯鎖。您還記得，我們​​是該專案的建築公司和夾層貸款人。對於我們公司的貸款自有計劃以及我們的擴張來說，這是一場重大勝利，更深入地進入亞特蘭大周邊的東南市場。

Following the theme of our real estate financing program, we have since selectively backfilled the mezzanine and preferred equity allocation with three additional high-quality multifamily projects. We now have five high-quality multifamily deals strategically located throughout growth markets in Virginia, North Carolina and Georgia. We look forward to owning one or more of these assets should the opportunity present itself.

遵循我們的房地產融資計劃的主題，我們有選擇地用另外三個高品質的多戶住宅專案回填夾層和優先股權配置。我們現在擁有五個高品質的多戶住宅交易，策略性地分佈在維吉尼亞州、北卡羅來納州和喬治亞州的成長型市場。如果有機會的話，我們期待擁有其中一項或多項資產。

Turning now to office. Although the macro office market has been grappling with occupancy issues. This is not the case for all office buildings. Our office portfolio is comprised of trophy assets, which are highly leased at 95.3% and therefore, differentiation should be recognized when applying an earnings multiple.

現在轉到辦公室。儘管宏觀辦公室市場一直在努力解決入住率問題。並非所有辦公大樓都是如此。我們的辦公大樓投資組合由獎盃資產組成，這些資產的出租率高達 95.3%，因此，在應用市盈倍數時應認識到差異化。

As you know, our office products are best positioned in their respective submarkets and are integral to robust and active mixed-use ecosystems. These factors have resulted in Armada Hoffler portfolio, benefiting from the continued flight to quality, evidenced by elevated occupancy and leasing activity as well as establishing their own superior market rents that defied trends in the office space.

如您所知，我們的辦公產品在各自的子市場中處於最佳地位，並且是強大而活躍的混合用途生態系統不可或缺的一部分。這些因素使 Armada Hoffler 的投資組合受益於對品質的持續追求，入住率和租賃活動的增加以及建立自己的優越市場租金證明了這一點，這與辦公空間的趨勢相悖。

Overall, we expect to maintain relative outperformance of the competitive set to not only continue but accelerate over time as employers prefer highly amenitized class-A assets in mixed use environment. An opportunity for leasing was recently created from our intentional removal of we work from the interlock asset in Atlanta.

總體而言，我們預計，隨著雇主更喜歡混合使用環境中高度便利的A 級資產，我們預計將保持相對於競爭對手的相對優異表現，不僅會持續下去，而且會隨著時間的推移而加速。最近，我們有意將我們的工作從亞特蘭大的連鎖資產中移除，創造了一個租賃機會。

We are not willing to impair our trophy asset with a long term punitive lease and therefore, we're not willing to accept the terms we work needed to stay in the building. As a result, we canceled the lease and simultaneously reduced our forward exposure to the tenant while maintaining earnings consistent with our guidance target in 2023.

我們不願意透過長期懲罰性租約來損害我們的獎盃資產，因此，我們不願意接受留在大樓內工作所需的條款。因此，我們取消了租賃，同時減少了對租戶的遠期風險，同時保持盈利與 2023 年指導目標一致。

While this created a temporary blip in same-store office NOI, given the quality and location of the interlock. We are confident that this space will be quickly re-leased with creditworthy long-term tenant. We have seen significant activity since the announcement and look forward to updating you on our progress.

鑑於聯鎖的品質和位置，這在同店辦公室 NOI 中造成了暫時的影響。我們有信心，該空間將很快重新出租給信譽良好的長期租戶。自公告發布以來，我們已經看到了重大活動，並期待向您通報我們的最新進展。

As you may know, we work in the second round of renegotiating with landlords, and we continue to work with them on a solution for our Durham, North Carolina asset we will keep you apprised of the outcomes. However, we are close enough to closure to say that we are confident a solution will be had that ultimately results in a deal with end market rent range. Apartments began to experience pressure in 2023, specifically on a relative basis when compared to 2022.

如您所知，我們正在與房東進行第二輪重新談判，我們將繼續與他們合作，為我們位於北卡羅來納州達勒姆的資產找到解決方案，我們將隨時向您通報結果。然而，我們已經接近關閉，可以說我們有信心找到一個解決方案，最終在終端市場租金範圍內達成協議。公寓在 2023 年開始面臨壓力，特別是與 2022 年相比。

Our residential product performed well, meeting our projected low to mid-single digit expectations. We recognize that supply has increased. However, household formation continues to grow while single-family home production remains constrained. As a result, we believe that available supply will be absorbed and the projects now in development will benefit from delivery into a supply-constrained market.

我們的住宅產品表現良好，達到了我們預期的低至中個位數的預期。我們認識到供應量有所增加。然而，家庭組成繼續增長，而單戶住宅的生產仍然受到限制。因此，我們相信現有供應將被吸收，目前正在開發的項目將受益於交付到供應受限的市場。

Regardless, our product type and location are intentional as we aim to be in the best location and therefore have the most desirable asset in the submarket. We continue to see relative outperformance due to our long stress tested strategy at the higher end of the market.

無論如何，我們的產品類型和位置都是有意為之的，因為我們的目標是處於最佳位置，從而擁有子市場中最理想的資產。由於我們在高端市場進行了長期壓力測試策略，我們繼續看到相對優異的表現。

Shifting to 2024, we are focused on excellence in our operations, disciplined execution and meeting or exceeding our KPI targets. As you will often hear me say, we will focus on running our playbook as we believe that best in class operations throughout the portfolio. Safe and reliable construction services, combined with seamless execution of high-quality development projects, will continue to create sustained shareholder value for years to come.

展望 2024 年，我們將專注於卓越營運、嚴格執行以及達到或超越我們的 KPI 目標。正如您經常聽到我說的那樣，我們將專注於經營我們的劇本，因為我們相信整個投資組合中的營運都是一流的。安全可靠的施工服務，加上高品質開發項目的無縫執行，將在未來幾年繼續創造持續的股東價值。

Let's take a few minutes to review highlights of our 2024 guidance presentation, which were released this morning and can be found on the Investor Relations page of our website. On page 3 of the guidance package, you will notice that we have taken a conservative approach to our guidance range, which I will elaborate on as we walk through each of the components.

讓我們花幾分鐘回顧一下今天早上發布的 2024 年指導簡報的要點，這些簡報可以在我們網站的投資者關係頁面上找到。在指南包的第 3 頁上，您會注意到我們對指南範圍採取了保守的方法，我將在介紹每個組件時對其進行詳細說明。

Our earnings range midpoint of $1.24 represents 16% growth over the post-pandemic 2021 earnings results and 19% growth, assuming we achieve the high end of the range at $1.27. Coupled with the dividend increase, the targeted earnings per share represents healthy growth in total shareholder return in an otherwise challenging real estate environment.

我們的獲利範圍中點為 1.24 美元，比大流行後的 2021 年獲利結果增加 16%，假設我們達到該範圍的高端 1.27 美元，則成長 19%。加上股息的增加，每股目標收益代表了股東總回報在充滿挑戰的房地產環境中的健康成長。

Income is growing steadily, primarily driven by increased rents, cost controls, strengthening portfolio NOI, incremental income from development projects and consistent fee income. As you can see on page 4, the upward trajectory of property NOI continues this year at an increase of 5% over 2023. Net of the impact of rework.

收入穩定成長，主要受到租金上漲、成本控制、投資組合 NOI 加強、開發專案增量收入和持續的費用收入的推動。正如您在第 4 頁上看到的，今年房地產 NOI 繼續呈上升趨勢，比 2023 年增長了 5%。扣除返工的影響。

Specifically, we wrote off nearly $2 million of accrued rent in 2023 and canceled nearly $2 million of annual rent on a go-forward basis. Our construction team continues to produce record results as we manage the nearly $0.5 billion third-party backlog remaining at the end of 2023. We look forward to another record year in construction, producing a target gross profit of over $13 million as we continue to build for strategic partners and deliver high-quality assets destined for our own portfolio.

具體來說，我們在 2023 年註銷了近 200 萬美元的應計租金，並取消了近 200 萬美元的年租金。我們的施工團隊繼續創造創紀錄的成果，並管理 2023 年底剩餘的近 5 億美元的第三方積壓訂單。我們期待建設再創歷史新高，在我們繼續為戰略合作夥伴建設並為我們自己的投資組合提供高品質資產的同時，實現超過 1300 萬美元的目標毛利。

G&A expenses were held flat for 2024 guidance as a result of diligent planning and savings by our team. The inflation effect on G&A has been largely mitigated this year. As we look forward to continued process excellence and refinement across our company. Interest expense remains a focal point and the cost of money has increased over 2022 levels, which has obviously had an impact on our per share growth.

由於我們團隊的勤奮規劃和節約，一般管理費用與 2024 年指引持平。今年通膨對一般行政費用的影響已基本減輕。我們期待整個公司的流程持續卓越和完善。利息支出仍然是一個焦點，資金成本較 2022 年水準增加，這顯然對我們的每股成長產生了影響。

Matt will talk to you in more detail about this and other financial metrics. However, I would like to commend Matt and his team on their performance this year while managing the interest rate challenges and creating capacity with which to finance our investments. The graph on page 4 illustrates our continued growth in income allocated by source the NOI growth across our properties is complemented by the fee income streams that will remain relatively constant in 2024.

馬特將與您更詳細地討論這個和其他財務指標。不過，我要讚揚馬特和他的團隊今年在應對利率挑戰和創造投資融資能力方面的表現。第 4 頁的圖表說明了我們按來源分配的收入持續增長，我們各酒店的 NOI 增長得到了 2024 年將保持相對穩定的費用收入流的補充。

Please note the introduction of JV income in 2024 and growing into stabilization. The portfolio NOI continues to grow despite the decision to eliminate we work at the interlock as discussed previously, and placement of a few tenants on bad debt.

請注意2024年合資公司收入的引入並趨於穩定。儘管我們決定取消先前討論的聯鎖工作，並讓一些租戶承擔壞賬，但投資組合的 NOI 仍在繼續增長。

On page 5, we have illustrated the current portfolio composition as well as the evolution of the NOI makeup inclusive of the JV income. The organic growth of the portfolio, the stabilization of the development pipeline and the opportunity cost of the JV income create a significant growth opportunity for our company. Although we have remained conservative in our underwriting of 2024, we are bullish on our continued earnings growth given the significant opportunities in 2025.

在第 5 頁，我們說明了目前的投資組合組成以及包括合資企業收入在內的 NOI 構成的演變。投資組合的有機成長、開發管道的穩定以及合資企業收入的機會成本為我們公司創造了重大的成長機會。儘管我們對 2024 年的承保仍持保守態度，但鑑於 2025 年的重大機遇，我們對盈利持續增長持樂觀態度。

Finally, on page 6, we have summarized the consistent growth and trajectory that our team has sustained over the past few years. NOI, EBITDA, and NFFO trends are included here as some of the key financial metrics that continue to grow over time. And we expect that we will continue that trend into 2025 in the future.

最後，在第 6 頁，我們總結了我們團隊在過去幾年中持續的成長和軌跡。NOI、EBITDA 和 NFFO 趨勢均包含在此處，作為隨著時間的推移持續增長的一些關鍵財務指標。我們預計未來將繼續這一趨勢到 2025 年。

As stated in previous conversations, we understand and our narrative is inconsistent with that of the broader market that said, our product is robust, high-quality and primarily trophy class. We will continue to leverage the quality of the portfolio to create continued and increase shareholder return with an expectation that the market values, the earnings stream and underlying real estate with the quality multiple it deserves.

正如先前的對話中所述，我們理解並且我們的敘述與更廣泛的市場的說法不一致，即我們的產品是強大的、高品質的並且主要是獎杯級別的。我們將繼續利用投資組合的品質來創造持續和增加的股東回報，並期望市場價值、收益流和基礎房地產具有應有的品質倍數。

Finally, we continue to look for opportunities to grow as we work through 2024 and prepare for significant growth into 2025 and beyond. Thank you to our greatest asset, our employees for continuing to invest their time and energy, which results in our outperformance.

最後，我們將在 2024 年之前繼續尋找成長機會，並為 2025 年及以後的顯著成長做好準備。感謝我們最大的資產，我們的員工繼續投入時間和精力，這使我們取得了優異的表現。

I'll now turn the call over to Matt.

我現在將電話轉給馬特。

Good morning, and thank you assure once again, the team has produced another strong quarter of financial results, in line with our guidance and analyst expectations. As Shawn indicated, for the final quarter of 2023, we reported FFO of $0.13 per diluted share and normalized FFO of $0.31 per diluted share.

早安，謝謝您再次保證，團隊又取得了強勁的季度財務業績，符合我們的指導和分析師的預期。正如 Shawn 所指出的，2023 年最後一個季度，我們報告的 FFO 為每股稀釋每股 0.13 美元，標準化 FFO 為每股稀釋每股 0.31 美元。

The difference between the two numbers being the negative $16 million unrealized change in fair market value of our derivatives due to the up dated declining forward yield curve fourth quarter also produced a robust, robust set of operating metrics across our portfolio, achieving exactly what we committed to our shareholders, whilst absorbing the we work leases.

這兩個數字之間的差異是，由於第四季度更新的遠期殖利率曲線下降，我們的衍生性商品公平市場價值出現了1,600 萬美元的未實現負變化，這也為我們的投資組合帶來了一套穩健的營運指標，完全實現了我們的承諾為我們的股東提供服務，同時吸收我們的工作租賃。

For the full 2023 fiscal year, we achieved FFO of $1.2 per diluted share and normalized FFO of $1.24 per diluted share, achieving the midpoint of our guidance and outperforming our 2022 fiscal year earnings high by just under 2%. This is a remarkable achievement for the team against the backdrop with the highest interest rate environment in a decade, executing on another Hoffler's largest ever development pipeline and navigating through the tough office leasing sentiment.

在整個 2023 財年，我們實現了稀釋後每股 1.2 美元的 FFO 和稀釋後每股 1.24 美元的標準化 FFO，達到了我們指導的中點，比 2022 財年的盈利高點略低於 2%。在十年來最高利率環境的背景下，這對團隊來說是一項了不起的成就，執行了霍夫勒有史以來最大的另一個開發項目，並克服了嚴峻的辦公室租賃情緒。

Shawn highlighted our portfolio's operational performance and our supplemental financial package provides additional insight if required over this last year, we have spoken at length regarding our balance sheet transformation towards long-term fixed rate unsecured debt. We are pleased to report that we continue to make progress executing our fiscal strategy and have retained our triple-B credit rating from Morningstar DBRS.

肖恩強調了我們投資組合的營運績效，如果去年需要的話，我們的補充財務方案提供了額外的見解，我們詳細討論了我們的資產負債表向長期固定利率無擔保債務的轉型。我們很高興地報告，我們在執行財務策略方面繼續取得進展，並保留了晨星 DBRS 的 3B 信用評級。

For the fourth quarter of 2023, the ratio of our stabilized portfolio debt to stabilized portfolio adjusted EBITDA was 6.5 times. This is elevated from our stabilized leverage target range of between 5 times to 5.5 times and predominantly due to our self-funding of our development pipeline. Whilst equity prices were suppressed, we anticipate our leverage to reduce back towards its target range once we entered the ATM market, sell our positions in one or both of our joint ventures and realized the funds from our preferred equity projects in our real estate financing book.

2023年第四季度，我們的穩定投資組合負債與穩定投資組合調整後EBITDA的比率為6.5倍。這高於我們 5 倍至 5.5 倍的穩定槓桿目標範圍，這主要是由於我們對開發管道的自籌資金。雖然股價受到壓制，但我們預計，一旦我們進入 ATM 市場、出售我們在一家或兩家合資企業的頭寸並變現房地產融資賬簿中優先股權項目的資金，我們的槓桿率將回到目標範圍。

MorningStar DBRS identified several strengths supporting the reaffirmation of our investment grade credit rating, including our market-leading positions in the mid-Atlantic and trophy assets in Baltimore, a high degree of diversification across asset classes within our commercial tenant base and mitigates exposure to cash flow volatility. We will monitor market conditions and look to transact in the debt private placement market when the environment is favorable.

晨星 DBRS 確定了支持重申我們投資級信用評級的多項優勢，包括我們在大西洋中部的市場領先地位和巴爾的摩的獎杯資產、我們商業租戶基礎內資產類別的高度多元化以及減少現金敞口流量波動。我們將密切關注市場狀況，並在環境有利時尋求在債務私募市場上進行交易。

In the fourth quarter, our weighted average cost of debt remained at 4%. Illustrating the success in maintaining our debt is 100% fixed or hedged due to interest rates being high for longer, we proactively replaced our expiring derivatives achieving a cheaper cost of debt in the short term when compared to the debt private placement market.

第四季度，我們的加權平均債務成本維持在4%。由於利率長期處於高位，我們在維持債務 100% 固定或對沖方面取得了成功，我們主動更換了即將到期的衍生品，與債務私募市場相比，在短期內實現了更便宜的債務成本。

Ultimately, in the medium term, we expect to reduce our reliance on derivatives transitioning to long-term fixed rate debt. Assuming the forward yield curve stays reasonably consistent with current projections, our expectation is that our weighted average cost of debt will stay consistent around 4% for 2024 and 2025. This is higher than what our cost of funds were in the previous two years.

最終，從中期來看，我們預計將減少對衍生性商品過渡到長期固定利率債務的依賴。假設遠期殖利率曲線與目前預測保持合理一致，我們預計 2024 年和 2025 年加權平均債務成本將維持在 4% 左右。這高於我們前兩年的資金成本。

Please review page 12 in our supplemental financial package for details on our debt management. Our debt remains well-laddered with a small amount of expirations in 2024 and 2025 being paid off at maturity. The two construction loans that we hold have extension options.

請查看我們的補充財務方案第 12 頁，以了解有關我們債務管理的詳細資訊。我們的債務仍然良好，2024 年和 2025 年到期的少量債務將在到期時償還。我們持有的兩筆建築貸款都有延期選擇。

However, we expect to transition these to unsecured financing using the free capacity on our term loans with a lower cost of debt as you can tell the execution of the balance sheet transformation continues to go well. We have solid leverage metrics, competitive with our peers, a low cost of debt and limited maturities in the next two years, coupled with our strong liquidity position, we are intentionally structured to achieve our growth strategy. As Shawn mentioned in our guidance slides ready to support our projected business growth well into the future.

然而，我們希望利用我們定期貸款的自由能力將這些融資轉變為無擔保融資，債務成本較低，因為您可以看出資產負債表轉型的執行繼續順利。我們擁有堅實的槓桿指標，與同行競爭，債務成本低，未來兩年期限有限，加上我們強大的流動性狀況，我們有意建立以實現我們的成長策略。正如肖恩在我們的指南中提到的那樣，幻燈片已準備好支持我們未來預計的業務成長。

I will now turn the call back to Mr. Haddad for his closing remarks.

現在我將把電話轉回給哈達德先生，讓他作總結發言。

Thank you, Matt. As we reflect on our performance throughout the fourth quarter and the year, and I'm proud of our team's dedication and resilience, which has translated into exceptional results. Best in market properties in healthy markets give us the ability to continue adding to earnings and dividends while we wait for the market to recognize superior performance.

謝謝你，馬特。當我們回顧第四季度和全年的表現時，我為我們團隊的奉獻精神和韌性感到自豪，這已轉化為卓越的業績。健康市場中的最佳市場房產使我們能夠在等待市場認可卓越業績的同時繼續增加收益和股息。

I'll now turn it over to the operator for the question-and-answer session.

我現在將把它交給接線員進行問答環節。

(Operator Instructions) Rob Stevenson, Janney.

（操作員說明）Rob Stevenson，Janney。

Good morning, guys. Shawn or Lou, how are you guys thinking about, you know, we work, you know, in terms of near term, longer term I mean, companies tenuous future at best keeping them and maybe, you know, punting and having to possibly retenant this thing two years down the road when it may be better or worse office leasing environment versus just ripping the Band-Aid off and re-tenanting the space now or not.

早上好傢伙。肖恩或盧，你們怎麼想，我們工作，你們知道，從短期來看，從長遠來看，我的意思是，公司的未來充其量是留住它們，也許，你知道，賭注，不得不重新租用兩年後，辦公室租賃環境可能會更好或更糟，而不是現在就撕掉創可貼並重新租用空間。

How are you guys characterizing demand for these assets? And, you know, how are you guys thinking about, you know, having to answer questions about we work for the next few years.

你們如何描述這些資產的需求？而且，你們知道，你們如何思考必須回答有關我們未來幾年工作的問題。

Thanks for your question, Rob, and good morning. As Shawn mentioned on the call earlier, we took the proactive measure of taking them to a cash basis, which reduced our 2023 results by a couple of million and they'll be going forward on a cash basis in the Durham space?

謝謝你的提問，羅布，早安。正如肖恩早些時候在電話會議上提到的那樣，我們採取了主動措施，將它們採用現金制，這使我們2023 年的業績減少了幾百萬，並且他們將在達勒姆領域繼續以現金制進行？

I'll let Shawn comment on what's happening in Durham as well as our confidence in the Atlanta space.

我會讓肖恩評論達勒姆正在發生的事情以及我們對亞特蘭大空間的信心。

Sure. Yes, I think let's break it down by location and thanks for the question, Rob, and good morning. In Atlanta, we said the risk adjusted posture should be removal, and that's what you saw Do we think that was the most prudent and our conservative approach. I'll say we have approximately 10 deals on different from kind of areas of formation from Allied to a couple of smaller leases that are close to done a lot of activity, as I said, in that space.

當然。是的，我想讓我們按地點進行細分，謝謝你的提問，羅布，早安。在亞特蘭大，我們說應該取消風險調整姿態，這就是你所看到的，我們認為這是最審慎和保守的做法。我想說的是，我們有大約 10 筆交易，涉及不同的領域，從聯盟到幾個較小的租賃，正如我所說，在該領域幾乎完成了很多活動。

But we couldn't be more excited about that given the 10 prospects that we're trading paper with currently, that's on Atlanta. So to your point, we feel good about re-leasing that space are absolutely the right move, certainly dampened the '23 results and the '24 outlook but we think that's the right move long term for the Company and for the shareholders.

但考慮到我們目前正在與亞特蘭大進行票據交易的 10 名潛在客戶，我們對此感到非常興奮。因此，就您的觀點而言，我們對重新租賃該空間感到滿意，這絕對是正確的舉措，當然會削弱23 年的業績和24 年的前景，但我們認為這對於公司和股東來說是長期正確的舉措。

In Durham, the location is healthier. We think that, as I said, we're very close as a matter of fact, I was on the phone with we worked yesterday afternoon, very close to a deal there that makes sense for us that we believe puts us back to kind of a market rent range.

在達勒姆，位置更健康。我們認為，正如我所說，事實上，我們已經非常接近了，昨天下午我正在通電話，我們非常接近達成一項對我們來說有意義的協議，我們相信這會讓我們回到某種程度市場租金範圍。

You may see that deal structurally a little bit different than it looks today. And we think that that that is a good bet on that being said, again, the fundamentals are that that particular location are actually much better than the Atlanta. So we feel good about it in that in those terms.

您可能會發現該交易在結構上與今天看起來有些不同。我們認為這是一個很好的賭注，再說一次，基本面是那個特定的位置實際上比亞特蘭大要好得多。因此，從這些方面來說，我們對此感覺良好。

They have some strong government strong tenancy down there, Rob. And our expectation is that that's going to fortify their ability to pay rent there. And if in fact, they ultimately aren't able to do that the tenancy basically will speak for itself, and then we'll pull to quickly convert those into leases for our own their own landlord or they going to keep all of the derm space under the current negotiations?

他們那裡有一些強大的政府租約，羅布。我們的期望是，這將增強他們在那裡支付租金的能力。事實上，如果他們最終無法做到這一點，租約基本上會說明一切，然後我們將迅速將這些租約轉換為我們自己的房東的租約，否則他們將保留所有真皮空間根據目前的談判？

Are they going to get back a little bit?

他們會回來一點嗎？

Yes. Ultimately, it's going to shrink and until we have a much more manageable size for us, but our expectation is that we're not going to miss a beat once that happens.

是的。最終，它會縮小，直到我們擁有更易於管理的規模，但我們的期望是，一旦發生這種情況，我們不會錯過任何節拍。

Okay. And how should we be thinking about the GC pipeline beyond the current projects? I mean, you guys have talked for a couple of years about the sort of great level of activity. And I think at various points of time caution people not to just straight-line this and grow going forward.

好的。我們應該如何考慮當前專案之外的 GC 管道？我的意思是，你們多年來一直在談論這種高水準的活動。我認為在不同的時間點警告人們不要只是直線發展並繼續前進。

But, you know, are we really going to see a material slowdown in '25 or thereafter? I mean, it seems like there's this much business in a world with little office and modest retail development. Is this the new sort of run rate going forward? Is there anything that you guys see going forward that would really temper things other than some sort of major economic collapse.

但是，您知道，我們真的會在 25 年或之後看到經濟大幅放緩嗎？我的意思是，在一個辦公室很少、零售業發展也很有限的世界裡，似乎有這麼多的生意。這是未來新的運行率嗎？除了某種重大的經濟崩潰之外，你們認為未來還有什麼事情可以真正緩和局勢嗎？

So, Rob, our expectation is that there will be for us a slowdown at some point in time. Every year we say it must it's going to go back to the centerline not-too-distant future. And every year, it seems to outperform. That's partially because I think that may be unique to us and maybe not completely unique but unique from the standpoint of being in business for the last 45 years in of the markets that continue to experience growth, I've led to the development of a number of really strong relationships with well-heeled partners that continue to produce. We wouldn't want people to underwrite $13 million with a construction profit for the next 10 years, but we don't really see a material slowdown anytime soon.

所以，羅布，我們的預期是我們在某個時間點會出現放緩。每年我們都說它一定會在不久的將來回到中心線。每年，它似乎都表現出色。部分原因是我認為這對我們來說可能是獨一無二的，也許不是完全獨特，但從過去45 年在持續增長的市場中開展業務的角度來看，這是獨一無二的，我已經領導了許多項目的發展與持續生產的富有的合作夥伴建立了真正牢固的關係。我們不希望人們用未來 10 年的建築利潤來承保 1,300 萬美元，但我們短期內不會真正看到經濟放緩。

But no kind of, Rob, it's just the number if you think about it this way to Lou's point is somewhat on a somewhat enlarged are inflated by the T. Rowe Price, 50% JV. And so if you think about it to Lou's point on a consistent basis that we net that out, the number drops down a little bit, but we feel good about staying relatively consistent net of those of that large piece of that bubble, if you will look at and are you guys the GC on all five of the most apartment projects, not all of them.

但無論如何，Rob，這只是一個數字，如果你這麼想的話，Lou 的觀點有點被 T. Rowe Price（50% JV）誇大了。因此，如果你按照盧的觀點，在一致的基礎上考慮我們將其剔除，這個數字會下降一點，但我們對保持相對一致的淨值感到滿意，如果你願意的話看看你們是不是所有五個最多公寓專案的GC。

Now, a couple of them are modular type production that is has a proprietary system where we won't be performing that construct.

現在，其中一些是模組化類型的生產，具有專有系統，我們不會在其中執行該構造。

Okay. And then how should we be thinking about those five projects today? Are you viewing any of these as likely purchases for the retail? And do you get a prepayment penalty if they refi early because it seems like that the completion date for the construction is much closer than the expiration of the debt. And I would assume that they'd want to refi at more modest rates. If rates come down, then you know your 13% to 15%.

好的。那麼今天我們該如何思考這五個項目呢？您是否認為這些商品可能適合零售購買？如果他們提前重新融資，您是否會收到預付款罰金，因為施工完成日期似乎比債務到期日期更近。我認為他們希望以更適中的利率進行再融資。如果利率下降，那麼你就知道你的利率是 13% 到 15%。

But to start with your first question of, we'd love to own all of them, but I think it's up, but our eyes are a bit bigger than our stomachs. So the expectation is that, as Shawn mentioned, at least one of these will end up on our on our balance sheet.

但從你的第一個問題開始，我們很想擁有所有這些，但我認為已經完成了，但我們的眼睛比我們的胃大一點。因此，正如肖恩所提到的，我們的預期是，至少其中一項最終會出現在我們的資產負債表上。

They do carry a minimum interest line so that we have protection against the early refinance. So I think that that's going to be a great avenue for us to continue to add to the portfolio without having the drag of the development process.

他們確實有最低利息額度，這樣我們就可以免受早期再融資的影響。因此，我認為這將是我們繼續增加產品組合的一個很好的途徑，而不會受到開發過程的拖累。

Okay. And then speaking of the development process, you guys anticipate starting any new on-balance sheet developments in '24 at this point?

好的。然後談到開發過程，你們預計在 24 年此時開始任何新的資產負債表開發？

We anticipate starting a redevelopment of the Bed Bath site that we've been talking about for a while. Right now, our developments don't pencil some pencil with our with our cost of capital, and that's why we're going to be relying more on the preferred equity and the mez platform in order to grow the portfolio. But right now, construction costs have not come back in line.

我們預計將開始對我們已經討論了一段時間的 Bed Bath 場地進行重建。目前，我們的發展並沒有與我們的資本成本相提並論，這就是為什麼我們將更依賴優先股和中間層平台來擴大投資組合。但目前，建築成本尚未恢復正常。

Interest rates remain elevated and you don't have a ton of rent growth and it fits ironically that where we would have the most room is an office space, but obviously because we are completely full in the locations that we have and under normal circumstances, you'd be launching new office with anchor tenants. Obviously, that's not going to be the case right now and will as we wait to see how the office market on a macro level shakes out.

利率仍然居高不下，租金也沒有大幅增長，諷刺的是，我們擁有最多空間的地方是辦公空間，但顯然是因為我們擁有的位置在正常情況下已經完全滿了，您將與主要租戶一起開設新辦公室。顯然，現在情況不會如此，而且隨著我們等待宏觀層面的辦公市場如何變化，情況將會如此。

Okay. And one last one for me for Matt. How should we be thinking about the $1.7 million of JV property income drag from Allied Harbor Point this year? Is that going to be significantly larger than that in the first half of the year. And as that comes online goes to zero and then closer to positive territory, is that ratably throughout most of the year. How should that be thinking about timing as it impacts earnings?

好的。最後一張是我送給馬特的。我們該如何看待今年 Allied Harbor Point 帶來的 170 萬美元的合資財產收入拖累？這是否會比上半年顯著增加？隨著這一數字逐漸降至零，然後接近正值，這一數字在一年中的大部分時間都呈現顯著增長。當它影響收益時，應該如何考慮時機？

Yes, good morning, Rob. All of that's a net negative drag on or income, depending on what JV you're looking at, leverage T. Rowe or for parcel for the Allied comes in in the last quarter of 2024. So that is a very, very small portion of obviously, T. Rowe Price will occupy and be nearly 100% full on full for renting their arms. So we'll get income or our share of the income on day one.

是的，早安，羅布。所有這些都是對收入的淨負拖累，具體取決於您正在尋找的合資企業，槓桿 T. Rowe 或盟軍的包裹將在 2024 年最後一個季度進入。因此，這顯然只是 T. Rowe Price 所佔的非常非常小的一部分，幾乎 100% 全部用於出租他們的武器。因此，我們將在第一天獲得收入或我們的收入份額。

And then obviously, as we go the sell through stabilization on the Allied, there will be a negative drag that is upset. So as Shawn mentioned in the guidance presentation, we expect that to be positive in that last quarter and to the extent of roughly around $1 million worth of FFO.

顯然，當我們透過穩定盟軍來拋售時，將會出現令人不安的負面拖累。正如 Shawn 在指導報告中提到的那樣，我們預計上個季度的情況將是積極的，並且 FFO 的價值約為 100 萬美元左右。

Okay. So all in the fourth quarter, nothing earlier in the year. All right. Thanks, guys. Appreciate the time this morning from a club and Thank you.

好的。所以這一切都發生在第四季度，沒有發生在今年早些時候。好的。多謝你們。感謝今天早上在俱樂部度過的時光，謝謝。

Camille Bonnel, BMO.

卡米爾·博內爾，BMO。

Hi, this is Andrew Berger on behalf of Camille, but now from Bank of America, I just wanted to touch real quick on guidance, if you could maybe give and more color on the part about funding a new real estate project in the second half of 2024 I guess what are you seeing today in the market? What where would your preference?

大家好，我是代表卡米爾的安德魯·伯傑，但現在來自美國銀行，我只是想快速談一下指導意見，如果您能就下半年為新的房地產項目提供資金的部分提供更多信息2024 年我想您今天在市場上看到了什麼？您更喜歡哪裡？

Okay, sure. Thank you for the question. So this is our practice. I'll start with the preference Our preference would be as we have been in the multifamily space in a growth market in the Carolinas on or in Georgia. So we have a couple of prospects. We're in discussions with our partner and our intent would be to ladder these.

好吧，當然。感謝你的提問。這就是我們的做法。我將從偏好開始，我們的偏好是因為我們一直在卡羅來納州或喬治亞州的成長市場的多戶住宅空間中。所以我們有幾個前景。我們正在與我們的合作夥伴進行討論，我們的目的是逐步實現這些目標。

And as you can imagine, and one of the oldest deal is closer to rolling off, we expect the sale of that deal and therefore a payback of our principal. And obviously, the interest in our intent would be to redeploy that capital in order to keep consistent fee coming in the door and also keep our program at the size that we've committed to roughly $80 million outstanding.

正如你可以想像的那樣，最古老的交易之一即將完成，我們預計該交易將被出售，從而償還我們的本金。顯然，我們的意圖是重新部署該資本，以保持穩定的費用收入，並使我們的計劃保持在我們承諾的約 8000 萬美元未償付的規模。

So again, you probably similar to something you would see on the other five deals, if you could imagine, just copying and pasting one as one removes off, we would add another back. So that's our intent. We've seen a lot of high-quality deals out there and a lot of interest in our program given the constraints in the in the kind of senior markets.

再說一遍，您可能類似於在其他五筆交易中看到的內容，如果您能想像，只需在刪除一項時複製並貼上一項，我們就會添加另一項。這就是我們的意圖。考慮到老年市場的限制，我們已經看到了很多高品質的交易，並且對我們的計劃產生了極大的興趣。

Got you. That's very helpful. Thank you. And then I guess turning to the piece on the ATM program. Just wondering any color there and maybe what we should expect from a timing standpoint if we're able to talk to that.

明白你了。這非常有幫助。謝謝。然後我想轉向 ATM 程式的部分。只是想知道那裡有什麼顏色，也許從時間的角度來看，如果我們能夠談論它，我們應該期待什麼。

Yes, good morning, Andrew, and we anticipate arm as soon as we come out of the blackout period here. And we when we file the 10-K that we will go into the ATM obviously, the equity price is not exactly where we wanted to base that we will be I'm somewhat conservative with that. But in order to grow, we need to add some equity to the model, and we anticipate doing that throughout the whole of this year.

是的，早上好，安德魯，一旦我們結束這裡的封鎖期，我們就會立即啟動。當我們提交 10-K 表格時，我們將進入 ATM 顯然，股票價格並不完全是我們想要的基礎，我對此有些保守。但為了實現成長，我們需要為該模型增加一些股權，我們預計今年全年都會這樣做。

Got it. Thank you. And if I could just squeeze in one more, just turning to the debt side. So I know you discussed on replacing the derivatives as they expire. It looks like there's a pretty big one, I think $200 million coming up in March. Just wondering how is the cost of replacing these swaps and caps maybe versus call it six months ago or a year ago?

知道了。謝謝。如果我能再擠一點，就轉向債務方面。所以我知道您討論過在衍生品到期時更換它們。看起來金額相當大，我認為 3 月將達到 2 億美元。只是想知道更換這些掉期和上限的成本與六個月前或一年前相比可能如何？

Yes, that's a great question. And we have, in fact, replaced all of those derivatives. So if you look on our debt management page, page 12 of the supplemental, you will see that we are over 100% hedged. So that one in March has already been replaced. We replace those in October or November of 2023. What we have done, as I've said, is our weighted average cost of debt across the whole portfolio is now 4%, and we expect that to remain consistent through '24 and '25 when those set of derivatives expire in the latter half last quarter of 2025.

是的，這是一個很好的問題。事實上，我們已經替換了所有這些衍生品。因此，如果您查看我們的債務管理頁面（補充資料第 12 頁），您會發現我們的對沖程度超過 100%。所以三月的那個已經被替換了。我們將在 2023 年 10 月或 11 月更換這些內容。正如我所說，我們所做的是整個投資組合的加權平均債務成本現在為 4%，我們預計到 24 年和 25 年，當這些衍生品在下半年到期時，這一情況將保持一致2025 年最後一季。

Great. Thank you very much.

偉大的。非常感謝。

Appreciate it. Thank you.

欣賞它。謝謝。

Thank you. There are no further questions at this time. You may proceed.

謝謝。目前沒有其他問題。您可以繼續。

Thanks very much. Thanks for all your time and attention this morning, please stay tuned for further announcements as we are as we backfill that workspace as well as some other leases that are on the horizon Have a great day.

非常感謝。感謝您今天早上的所有時間和關注，請繼續關注進一步的公告，因為我們正在回填該工作空間以及即將到來的其他一些租賃，祝您有美好的一天。

Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines. Thank you.

女士們、先生們，今天的電話會議到此結束。我們感謝您的參與，並請您斷開線路。謝謝。