AH Realty Trust, Inc (AHRT) 2018 Q2 法說會逐字稿

Welcome to Armada Hoffler's Second Quarter 2018 Earnings Conference Call. (Operator Instructions)

歡迎參加 Armada Hoffler 2018 年第二季財報電話會議。(接線員指示)

As a reminder, this conference call is being recorded today, Tuesday, July 31, 2018.

提醒各位，本次電話會議將於今天（2018 年 7 月 31 日，星期二）進行錄音。

I will now turn the conference call over to Michael O'Hara, Chief Financial Officer at Armada Hoffler. Please go ahead.

現在我將把電話會議交給 Armada Hoffler 財務長 Michael O'Hara。請開始。

Good morning, and thank you for joining Armada Hoffler's Second Quarter 2018 Earnings Conference Call and Webcast. On the call this morning, in addition to myself, are Lou Haddad, CEO; and Eric Smith, Chief Operating Officer, who will be available for questions.

各位早安，感謝各位參加 Armada Hoffler 2018 年第二季財報電話會議與網路直播。今天早上的電話會議中，除我之外，還有執行長 Lou Haddad，以及營運長 Eric Smith；他們將在問答環節回答問題。

The press release announcing our second quarter earnings, along with our quarterly supplemental package, were distributed this morning. Replay of this call will be available shortly after the conclusion of the call through August 31, 2018. The numbers to access the replay are provided in the earnings press release.

我們今早已發布宣布第二季財報的新聞稿，以及季度補充資料包。本次電話會議的重播將於會議結束後不久提供，並可使用至 2018 年 8 月 31 日。重播的撥入號碼已載於財報新聞稿中。

For those who listen to the rebroadcast of this presentation, we remind you that the remarks made herein are as of today, July 31, 2018, and will not be updated subsequent to this initial earnings call.

對於收聽本次簡報重播的聽眾，我們提醒：本次發言係截至今日（2018 年 7 月 31 日）之內容，且在本次初次財報電話會議之後不會再更新。

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

在本次電話會議中，我們將發表前瞻性陳述，包括與我們投資組合未來表現、開發案儲備（pipeline）、併購與處分之影響、營造業務、投資組合績效與融資活動相關的陳述，以及對我們指引與展望的評論。

Listeners are cautioned that these statements are subject to certain risks and uncertainties, many of which are difficult to predict and generally beyond our control. These risks and uncertainties can cause actual results to differ materially from our current expectations, and we advise listeners to review the forward-looking statement disclosure in our press release this morning and in factors disclosed in documents we have filed with or furnished to the SEC.

提醒聽眾注意，這些陳述受若干風險與不確定性影響，其中許多難以預測，且通常超出我們的控制範圍。這些風險與不確定性可能導致實際結果與我們目前預期存在重大差異；我們建議聽眾查閱今早新聞稿中的前瞻性陳述揭露，以及我們向美國證券交易委員會（SEC）提交或提供之文件中所揭露的相關因素。

We'll 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, armadahoffler.com.

我們也將討論若干非 GAAP 財務衡量指標，包括但不限於 FFO 與標準化 FFO（normalized FFO）。這些非 GAAP 指標的定義，以及與最可比 GAAP 指標的調節表，均收錄於季度補充資料包中，並已公布於我們的網站 armadahoffler.com。

Now I'll turn over the call to our Chief Executive Officer, Lou Haddad. Lou?

現在我將把電話會議交給我們的執行長 Lou Haddad。Lou？

Thanks, Mike. Good morning, everyone, and thank you for joining us today. As you can see from the press releases that we issued yesterday and this morning, it's a very exciting time here at Armada Hoffler.

謝謝你，Mike。各位早安，感謝各位今天加入我們。從我們昨天與今天早上發布的新聞稿中各位可以看到，對 Armada Hoffler 而言，這是一個非常令人振奮的時刻。

As I mentioned during our last conference call, our company is built to thrive in a variety of macroeconomic scenarios, and the current backdrop is no exception. The growing economy has yielded increased opportunities in development, public-private partnerships, build-to-suit engagements, third-party construction and tenant expansions. We believe these factors more than offset the impact of gradually rising interest rates. This morning, I'll offer several updates that will continue to validate this thesis.

如同我在上次電話會議中提到的，我們公司的架構足以在各種總體經濟情境下茁壯成長，而目前的環境也不例外。經濟成長帶來更多機會，包括開發、公私協力（PPP）、量身打造（build-to-suit）合作、第三方營造，以及租戶擴張。我們相信，這些因素足以抵銷利率逐步上升所帶來的影響。今天早上，我將提供幾項最新進展，以持續驗證這項論點。

First, a few comments on the results of the past quarter. We reported $0.24 of normalized FFO per share for the second quarter, which was in line with our expectations. Also, same-store NOI was positive across all product types on both a cash and GAAP basis. Although increases occurred across the portfolio, a significant portion resulted from office activity within the Town Center of Virginia Beach. Also, as we expected, with the winding down of disruptive construction of Phase VI, multifamily occupancy has returned to form.

首先，針對上一季的業績結果說明幾點。我們第二季每股標準化 FFO 為 0.24 美元，符合我們的預期。此外，同店 NOI（淨營運收入）在所有產品類型上，無論以現金或 GAAP 基礎計算皆為正成長。雖然整體投資組合皆有提升，但其中相當一部分來自維吉尼亞海灘 Town Center 的辦公室業務活動。同時，如我們所預期，隨著第六期（Phase VI）具干擾性的施工逐步收尾，多戶住宅入住率已恢復正常水準。

On the retail front, the opening of Williams-Sonoma and Pottery Barn has brought additional excitement and leasing activity to Town Center. In fact, post quarter end, 2 additional leases have been executed, including the region's first Shake Shack. Also, several new retailers are now actively engaged in negotiations for space at Town Center.

在零售方面，Williams-Sonoma 與 Pottery Barn 的開幕，為 Town Center 帶來更多話題與租賃活動。事實上，在季後，我們又簽署了 2 份額外租約，其中包括該地區第一家 Shake Shack。此外，數家新零售商目前也正積極就 Town Center 的店面空間進行洽談。

Finally, and most notably, we have significantly raised our full year normalized FFO guidance, with the new range rising to $1.05 to $1.08 per share. This change is primarily due to the anticipated sale of our at-cost purchase option for Annapolis Junction. Most of you are well aware of the optionality afforded us by our mezzanine lending program in conjunction with our construction and development expertise.

最後，也是最值得注意的是，我們大幅上調全年標準化 FFO 指引，新區間提升至每股 1.05 至 1.08 美元。此一變動主要來自我們預期出售 Annapolis Junction 的按成本購買選擇權（at-cost purchase option）。各位多半都很清楚，我們的夾層貸款計畫（mezzanine lending program）結合營造與開發專業，為我們帶來相當的選擇性（optionality）。

While Annapolis Junction would make a fine addition to our portfolio upon stabilization, we believe that the capital currently invested as well as the profit from the sale of our option are better deployed in the 2 new pipeline projects announced yesterday. We believe that this decision, despite representing a meaningful discount to a fully stabilized valuation, is the proper path to maintaining a strong balance sheet, creation of long-term value for our investors and ultimately a higher NAV per share.

雖然 Annapolis Junction 在穩定後將會是我們投資組合的優質補充，但我們認為，目前投入的資本以及出售選擇權所獲得的利潤，更適合配置到昨天宣布的 2 個新儲備開發案中。我們相信，儘管此決策相較於完全穩定後的估值代表著相當幅度的折價，但這是維持強健資產負債表、為投資人創造長期價值，並最終提升每股淨資產價值（NAV）的正確途徑。

This transaction returns $50 million to our balance sheet, inclusive of some $5.5 million of profit on our option. All told, between interest income, construction fees and the option sale, we will have recognized over $16 million of profit from this project. This marks the second time in the last few years that we have monetized a significant profit on a multifamily project during lease up, once again proving our development spreads and the advantages in optionality that our integrated model brings to our shareholders.

此筆交易將為我們的資產負債表帶回 5,000 萬美元，其中包含約 550 萬美元的選擇權出售利潤。總計而言，包含利息收入、營造費用以及選擇權出售，我們將自該專案認列超過 1,600 萬美元的利潤。這是近幾年來我們第二次在多戶住宅專案出租期（lease up）期間將可觀利潤變現，再次證明我們的開發利差（development spreads），以及整合式模式為股東帶來的選擇性優勢。

The increase in our guidance range occurs despite the fact that our original guidance included an acquisition that we ultimately passed on, a disposition that was not forecasted and Annapolis Junction mezzanine interest income originally projected through the end of the year. Additionally, our ATM activity was larger and earlier than we originally anticipated. Collectively, these strategic decisions serve to further strengthen our balance sheet in preparation for the robust future growth that we are anticipating through our development pipeline.

我們上調指引區間，儘管原先的指引包含一項最終我們選擇不進行的收購、一項原本未預期的處分，以及原先預估將持續至年底的 Annapolis Junction 夾層利息收入。此外，我們的 ATM（隨市發行）活動規模更大，且發生時間也早於原先預期。整體而言，這些策略性決策將進一步強化我們的資產負債表，以因應我們預期將透過開發案儲備帶來的強勁未來成長。

While we are thrilled to have meaningfully raised our normalized FFO guidance range for 2018, we still expect healthy year-over-year earnings growth in 2019 based on the current delivery schedule for the projects in our development pipeline, projected lease up in our portfolio and the potential for new and accretive transactions.

雖然我們很高興能在 2018 年大幅上調標準化 FFO 指引區間，但基於目前開發案儲備的交付時程、投資組合預估出租進度，以及潛在的新且具增益（accretive）的交易，我們仍預期 2019 年將有健康的年增獲利成長。

Starting with Town Center for the pipeline updates, Phase VI street-level retail was delivered, and the tenants I mentioned opened to large crowds. Adding to the excitement, the Lego Americana Roadshow has made a 2-week stop in Town Center and has exposed the center to an even broader clientele. The multifamily portion of this block is on track for August delivery with nearly 30% of the units leased.

從 Town Center 的儲備開發案更新開始，第六期（Phase VI）街邊零售已交付，我剛才提到的租戶也在大量人潮中開幕。更添熱度的是，Lego Americana Roadshow 已在 Town Center 停留兩週，讓該中心接觸到更廣泛的客群。本街區的多戶住宅部分預計於 8 月交付，目前已有近 30% 的單位完成出租。

Point Street Apartments at Harbor Point continues to exceed all expectations with leasing now in excess of 60% despite being open for only 4 months.

Harbor Point 的 Point Street 公寓持續超出所有預期，儘管僅開放 4 個月，出租率現已超過 60%。

City Center in downtown Durham is nearly complete. The office portion stands at nearly 90% leased with the first tenants opening in the month of September. The bulk of the remaining space has been proposed to a few small tenants, and we expect occupancy to approach 95% over the next few quarters.

位於達勒姆市中心的 City Center 幾乎完工。辦公部分出租率接近 90%，首批租戶將於 9 月開業。其餘大部分空間已向幾家小型租戶提出方案，我們預期未來幾個季度入住率將接近 95%。

The Harding Place Apartments in downtown Charlotte will deliver in late August, and the leasing office is now open for business.

位於夏洛特市中心的 Harding Place 公寓將於 8 月下旬交付，租賃辦公室現已開始營運。

All other pipeline projects are on track for their scheduled 2019 completions.

其他所有在建管線專案均按計畫推進，預計於 2019 年如期完工。

Our construction company continues to perform at a very high level. While revenue generated from third-party construction projects is lower than previous years, total volume, including internal projects, will top $225 million for the year, which is near the high end of our historic range.

我們的營造公司持續維持非常高的表現水準。雖然第三方營造專案帶來的營收低於往年，但包含內部專案在內的總量今年將超過 2.25 億美元，接近我們歷史區間的高端。

Now that the sales contract for the disposition of the build-to-suit distribution center has been signed, we've narrowed the guidance range on this business segment to reflect the anticipated gain on sale. The profit is roughly double what we would've earned had we simply built the project for a market fee, which serves as further evidence of the advantages of our unique cross-selling platform. As I mentioned last quarter, we expect backlog of third-party contracts to surge by summer's end, with 2019 shaping up to be another stellar year for this division.

隨著量身打造（build-to-suit）配送中心處分的銷售合約已簽署，我們已縮窄該業務分部的指引區間，以反映預期的出售收益。該利潤約為若我們僅以市場費率承建該專案所能賺取的兩倍，進一步證明我們獨特交叉銷售平台的優勢。如我在上季所提，我們預期第三方合約的在手訂單將於夏末大幅攀升，2019 年可望成為該部門另一個亮眼年度。

Finally, I'd like to highlight the 2 projects we announced yesterday. The Wills Wharf office project, adjacent to our Point Street Apartment building, will be the latest iteration in our 25-year run at Baltimore's Inner Harbor. This $117 million building is the fourth property we will have built at Harbor Point. As you can see in the press release, in addition to the hotel lease, we expect 100,000 square feet of office space to be preleased, bringing the total committed space to over 60% prior to construction commencement. We are also seeing considerable interest in the remaining square footage despite the early stage of development.

最後，我想重點說明我們昨天宣布的兩個專案。Wills Wharf 辦公專案緊鄰我們的 Point Street 公寓大樓，將成為我們在巴爾的摩內港 25 年布局的最新延伸。這棟造價 1.17 億美元的建築，將是我們在 Harbor Point 興建的第四個物業。如新聞稿所示，除飯店租約外，我們預期將有 10 萬平方英尺的辦公空間可預先出租，使得在動工前已承諾的總面積超過 60%。儘管仍處於開發初期，我們也看到市場對剩餘面積有相當濃厚的興趣。

As we have said on many occasions and as evidenced by the amount of construction and leasing activity we've seen in just a few short years, we believe that Harbor Point is one of the top destinations for office, retail and multifamily space in the entire mid-Atlantic.

正如我們多次所言，且從短短數年間所見的大量施工與租賃活動可得印證，我們相信 Harbor Point 是整個大西洋中部地區（mid-Atlantic）辦公、零售與多戶住宅空間的頂尖目的地之一。

Just as exciting is The Interlock project in West Midtown Atlanta. This public-private partnership with Georgia Tech was brought to us by our partners at S.J. Collins, and its location at the intersection of 14th Street and Howell Mill Road is in the middle of this highly sought after submarket. As a part of a larger, mixed-use complex, the office and retail portion that we will participate in will total some 300,000 square feet with an estimated cost in excess of $110 million.

同樣令人振奮的是亞特蘭大 West Midtown 的 The Interlock 專案。這項與喬治亞理工學院（Georgia Tech）的公私合營合作案由我們的合作夥伴 S.J. Collins 介紹，其位於第 14 街與 Howell Mill Road 的交會處，正處於這個極受青睞的次級市場核心。作為更大型複合式開發的一部分，我們將參與的辦公與零售部分合計約 30 萬平方英尺，估計成本超過 1.10 億美元。

With Georgia Tech anchoring the project with a 50,000 square-foot office lease, we anticipate that the project will be nearly 60% leased by groundbreaking, which we expect to occur by year-end. S.J. Collins will serve as the project's master developer and will be responsible for performing several functions, including site development and land sales related to the hotel, multifamily and townhouse portions of the project.

由喬治亞理工以 5 萬平方英尺的辦公租約作為錨定租戶，我們預期在動工時該專案出租率將接近 60%，而我們預計將於年底前動工。S.J. Collins 將擔任專案的總開發商，並負責多項工作，包括基地開發，以及與飯店、多戶住宅與聯排住宅部分相關的土地銷售。

These transactions are not well suited to our REIT structure. For this reason, we will utilize a participating mezzanine structure for our investment in the office and retail components of Interlock. Separately, we anticipate that our construction company will not only construct Interlock commercial for S.J. Collins, but will also be the general contractor for the hotel and multifamily developers as well.

這些交易並不適合我們的 REIT 架構。因此，我們將採用參與式夾層（mezzanine）架構，投資於 Interlock 的辦公與零售組成部分。另外，我們預期我們的營造公司不僅會為 S.J. Collins 興建 Interlock 的商業部分，也將擔任飯店與多戶住宅開發商的總承包商。

Wills Wharf and Interlock commercial represent over $225 million worth of development and will be the cornerstones of our next development pipeline. Our expectation is to have more new project announcements over the next few months and that this new development pipeline will equal if not exceed the current one. With a mix steering more towards high-credit tenancy and CBD office along with some multifamily and retail, our initial return on investment should be meaningfully higher than the current pipeline being delivered, which is more heavily multifamily weighted.

Wills Wharf 與 Interlock 商業部分代表超過 2.25 億美元的開發規模，將成為我們下一階段開發管線的基石。我們預期未來幾個月會有更多新專案公告，而這條新的開發管線將與目前管線相當，甚至可能超越。由於組合將更偏向高信用租戶與 CBD 辦公，並搭配部分多戶住宅與零售，我們的初始投資報酬率應會顯著高於目前正在交付、以多戶住宅為主的管線。

Despite this increase in development activity, be assured that we continue to be extremely selective with regard to the projects we pursue. The vast majority of the opportunities that present themselves do not meet our rigid criteria and are quickly removed from consideration.

儘管開發活動增加，請放心，我們在選擇追求的專案方面仍極為嚴格。絕大多數出現的機會不符合我們嚴苛的標準，會迅速被排除在考量之外。

The unannounced projects in pre-development include more signature assets in some of the hottest markets in the Southeast. As these engagements come together, we will be evaluating further dispositions and the use of the ATM as a part of our continuing strategy to maintain a strong balance sheet and grow NAV over the long term.

尚未公布、處於前期開發階段的專案，包含位於美國東南部一些最火熱市場的更多旗艦資產。隨著這些合作逐步成形，我們將評估進一步處分資產，以及將 ATM（隨市發行）納入我們持續策略的一部分，以維持強健的資產負債表並在長期提升 NAV。

Remember, Armada Hoffler is first and foremost an opportunistic real estate company that employs multiple strategies to enhance profitability and create value. These have been our central tenets for nearly 40 years, and investors can count on this to remain our primary focus. As the company's largest equity holder, management will continue to operate a business model that includes a variety of deal structures as well as disposition of development projects, at-cost options and stable assets.

請記住，Armada Hoffler 首先且最重要的是一家機會型不動產公司，運用多元策略以提升獲利能力並創造價值。這些理念近 40 年來一直是我們的核心準則，投資人可以相信這仍將是我們的主要重點。作為公司最大的股權持有人，管理團隊將持續採行包含多種交易架構的商業模式，同時也會處分開發專案、成本價選擇權（at-cost options）以及穩定型資產。

We're extremely optimistic about the company's prospects for the rest of 2018 and our ability to deliver on our promises over a multiyear time frame.

我們對公司在 2018 年剩餘期間的前景，以及在多年期時間範圍內兌現承諾的能力，感到非常樂觀。

At this time, I'll turn the call over to Mike to discuss our second quarter results.

接下來，我把電話會議交給 Mike，請他說明我們第二季的業績。

Thanks, Lou. Today, I want to cover the highlights of the quarter, thoughts on our balance sheet and our updated 2018 guidance.

謝謝你，Lou。今天我想說明本季重點、我們對資產負債表的看法，以及更新後的 2018 年財測指引。

This morning, we reported FFO of $0.24 per share and normalized FFO of $0.24 per share for the second quarter, which was in line with our expectations. As we anticipated, same-store NOI continues to improve, with this quarter being positive in all 3 property types. The negative impact on this metric from the Town Center relocation and construction activity has finally ended.

今天早上，我們公布第二季每股 FFO 為 0.24 美元、每股標準化 FFO 亦為 0.24 美元，符合我們的預期。如我們所預期，同店 NOI 持續改善，本季在三種物業類型上皆為正成長。Town Center 搬遷與施工活動對此指標造成的負面影響終於結束。

The portfolio continues to perform well. Our core operating portfolio occupancy for the second quarter was 95%, with office at 94%, retail at 97% and multifamily at 89%. Multifamily occupancy was lower than last quarter due to the summer occupancy at the JHU student housing project. We do not expect this impact next year, as we've changed to 1-year leases rather than the current academic-year leases. Without the effect of this property, multifamily occupancy would have been similar to the 96% of last quarter. Additionally, our re-leasing spreads in the retail and office portfolio were positive on a GAAP basis.

投資組合持續表現良好。第二季我們核心營運投資組合的入住率為 95%，其中辦公為 94%、零售為 97%、多戶住宅為 89%。多戶住宅入住率較上季偏低，原因是 JHU 學生住宅專案的暑期入住情況。我們預期明年不會再有此影響，因為我們已改為一年期租約，而非目前的學年制租約。若排除該物業的影響，多戶住宅入住率將與上季的 96% 類似。此外，我們零售與辦公投資組合的續租租金價差（re-leasing spreads）在 GAAP 基礎下為正。

On the construction front, we reported a segment gross profit in the second quarter of $600,000 on revenue of $21 million. At the end of the second quarter, the company had a third-party construction backlog of $38 million. As we've said, we expect construction backlog to increase over the next few months.

在建築業務方面，我們第二季在2,100萬美元營收下，回報該分部毛利為60萬美元。截至第二季末，公司第三方建築在手訂單（backlog）為3,800萬美元。如同我們所說，我們預期未來幾個月建築在手訂單將增加。

Now turning to our balance sheet, over the past quarter we continue to take actions to enhance the flexibility of our balance sheet and work on loan maturities. As Lou discussed, we have 2 large development projects with several more in the predevelopment. We are making several moves to position the balance sheet for these projects and future growth.

接著談到資產負債表，過去一季我們持續採取行動以提升資產負債表的彈性，並處理貸款到期事宜。如Lou所討論，我們有2個大型開發專案，另有數個專案處於前期開發階段。我們正採取多項措施，使資產負債表能因應這些專案及未來成長。

First, during the quarter, we sold a Wawa out parcel from the newly acquired Indian Lakes Harris Teeter Center for a 5.35% cap rate. We acquired the Indian Lakes Center for a 7.1% cap rate, and net of this out parcel sale, we now have a Harris Teeter Center that is yielding nearly 8%.

第一，在本季期間，我們以5.35%的資本化率（cap rate）出售了新近收購的Indian Lakes Harris Teeter Center中的一塊Wawa外部地塊（out parcel）。我們以7.1%的資本化率收購Indian Lakes Center；扣除這筆外部地塊出售後，我們目前持有的Harris Teeter Center之收益率接近8%。

Second, we raised $50 million through our ATM program last quarter at an average price of $14.07 per share. We raised more than anticipated due to a couple of large reverse inquiries.

第二，我們上季透過ATM計畫以每股平均14.07美元的價格募集5,000萬美元。由於有幾筆大型反向詢價（reverse inquiries），我們募集金額高於原先預期。

And third, we anticipate selling our at-cost purchase option on Annapolis Junction to our partner. We are selling this option, instead of acquiring the property at-cost and bringing it on balance sheet, in order to use the capital for the development projects we announced yesterday. We expect over $50 million in cash from this transaction through the payoff of our loan and the proceeds from this sale.

第三，我們預期將把Annapolis Junction的按成本購買選擇權出售給合作夥伴。我們選擇出售該選擇權，而非按成本收購該物業並納入資產負債表，是為了將資金用於我們昨天宣布的開發專案。我們預期此交易可帶來超過5,000萬美元現金，來源包括償還我們貸款後的現金以及本次出售所得。

As we've discussed, this mezzanine structure gives us optionality, including bringing the property on balance sheet, using the property as a 1031 candidate or selling our option. By selling the option and not the real estate, we avoid the 2-year holding period required under the REIT tax laws. Since this transaction is the sale of an option and not real estate, it will therefore be included in FFO. We are also including this in normalized FFO because we view this as an integral part of our business model.

如同我們先前討論，這種夾層（mezzanine）結構提供我們多種選擇，包括將該物業納入資產負債表、將該物業作為1031交換候選標的，或出售我們的選擇權。透過出售選擇權而非出售不動產本身，我們可避免REIT稅法所要求的2年持有期間。由於此交易為出售選擇權而非不動產，因此將計入FFO。我們也將其納入標準化FFO（normalized FFO），因為我們認為這是我們商業模式不可或缺的一部分。

We will continue joint venture development projects with this structure and, in the future, expect to periodically monetize the equity creation in this manner. We like the flexibility this structure provides us, especially with multifamily projects, which we can sell below our cost of capital and keep the proceeds for balance sheet purposes. The capital raised from these transactions is expected to be about $105 million, which have and will be used to pay down the credit facility.

我們將持續以此結構進行合資開發專案，並預期未來會定期以此方式將股權增值變現。我們喜歡此結構所提供的彈性，特別是在多戶住宅（multifamily）專案上，我們可以以低於資金成本的價格出售，並將所得用於資產負債表需求。預期這些交易所募集的資金約為1.05億美元，已經並將用於償還循環信貸額度（credit facility）。

We continue to work on the 2018 loan maturities. As of June 30, 2 loans remain to be refinanced. First is the JHU Village loan which closed last week. The loan is for a 7-year term at a rate of LIBOR plus 125 basis points. We entered into a swap lock to fix the rate at 4.19% for the 7-year term. The second maturity is the Lightfoot Marketplace loan, which we expect to close in the next couple of weeks.

我們持續處理2018年到期的貸款。截至6月30日，仍有2筆貸款待再融資。第一筆是JHU Village貸款，上週已完成簽約（closed）。該貸款期限為7年，利率為LIBOR加125個基點。我們簽訂了利率交換鎖定（swap lock），將7年期利率固定在4.19%。第二筆到期貸款為Lightfoot Marketplace貸款，我們預期將在未來幾週內完成簽約。

As discussed last quarter, the lending environment has changed this year, with spreads substantially lower. We took advantage of this environment and refinanced our loans that have floating interest rates. We have closed on loans over $100 million, lowering the spreads by 35 to 65 basis points, which equates to an annual savings of over $500,000.

如同上季所述，今年放貸環境已改變，利差（spreads）顯著下降。我們把握此環境，將原本為浮動利率的貸款進行再融資。我們已完成超過1億美元的貸款簽約，將利差降低35至65個基點，折合每年節省超過50萬美元。

At the end of the quarter, we had total outstanding debt of $587 million, including $83 million outstanding under the $150 million revolving credit facility. We continue to evaluate our exposure to higher rates, higher interest rates and look for opportune times to hedge our interest rate exposure. At quarter-end, 89% of our debt was fixed or hedged. This past quarter, we entered into a 5-year swap lock for $50 million. Subsequent to quarter-end, we entered into a $53 million swap lock on the JHU Village loan and purchased a 2-year, $50 million interest rate cap at 2.5%. Inclusive of these 2 transactions, we are now 100% fixed or hedged.

截至季末，我們未償還總負債為5.87億美元，其中包括1.5億美元循環信貸額度下已動用的8,300萬美元。我們持續評估對利率上升、較高利率的曝險，並尋找適當時點對利率曝險進行避險。截至季末，我們89%的債務為固定利率或已避險。本季我們簽訂了一筆5年期、5,000萬美元的交換鎖定（swap lock）。季末之後，我們就JHU Village貸款簽訂了5,300萬美元的交換鎖定，並購買了一筆2年期、5,000萬美元、上限利率2.5%的利率上限（interest rate cap）。包含這兩筆交易後，我們目前100%的債務已固定或已避險。

Today, we raised our 2018 full year normalized FFO guidance to $1.05 to $1.08 per share, up from $1 to $1.05 per share. The guidance includes the expected sale of the Annapolis Junction purchase option and the sale of the distribution center by the TRS. The distribution center is a construction project that evolved from our cross-selling platform.

今天，我們將2018年全年標準化FFO指引上調至每股1.05至1.08美元，先前為每股1.00至1.05美元。該指引包含預期出售Annapolis Junction購買選擇權，以及由TRS出售配送中心。該配送中心是一個由我們交叉銷售平台（cross-selling platform）發展而來的建築專案。

We intend to sell this asset before it is placed in service and include the profit in normalized FFO. We include this expected gain from this sale in both construction company gross profit and normalized FFO guidance. This transaction will have an impact on debt to EBITDA in 2018, as our balance sheet will carry the debt with no corresponding EBITDA. Because of the short-term nature of this project and associated debt, we do not intend to issue any equity for this project.

我們計畫在該資產投入使用（placed in service）之前出售，並將利潤計入標準化FFO。我們在建築公司毛利與標準化FFO指引中，皆納入此項預期出售收益。此交易將在2018年影響負債對EBITDA比率，因為我們的資產負債表將承擔該負債，但沒有相對應的EBITDA。由於此專案及其相關負債屬短期性質，我們不打算為此專案發行任何股權。

Now I'd like to go through the details of our updated 2018 guidance, first starting with our assumptions: the acquisition of the Lowes Foods shopping center in the second half of the year; a gain of $5 million to $6 million from the sale of the Annapolis Junction purchase option during the third quarter; a gain of $2.4 million to $3.2 million from the sale of the distribution center in the fourth quarter; no additional activity in the ATM program; interest expense is calculated on the forward LIBOR curve, which forecasts rates rising to 2.38% by year-end.

接下來我想說明我們更新後的2018年指引細節，先從假設開始：下半年收購Lowes Foods購物中心；第三季出售Annapolis Junction購買選擇權帶來500萬至600萬美元的收益；第四季出售配送中心帶來240萬至320萬美元的收益；ATM計畫不再有額外活動；利息費用係依遠期LIBOR曲線計算，該曲線預測利率於年底上升至2.38%。

The guidance of $1.05 to $1.08 per share is predicated on the following updated components: total NOI in a $78.8 million to $79.5 million range; third-party construction gross profit in the $5.6 million to $6.4 million range, which includes the expected profit from the sale of the distribution center; general administrative expenses in the $10.8 million to $11 million range; interest income from mezzanine financing program in the $7.9 million to $8.1 million range -- as of quarter end, the aggregate loan balance of these mezzanine loans was $93 million -- interest expense in the $18.3 million to $18.8 million range; and 64.5 million weighted average shares outstanding.

每股1.05至1.08美元的指引係基於以下更新後的組成項目：總NOI介於7,880萬至7,950萬美元；第三方建築毛利介於560萬至640萬美元（包含預期出售配送中心的利潤）；一般及行政費用介於1,080萬至1,100萬美元；夾層融資計畫的利息收入介於790萬至810萬美元——截至季末，這些夾層貸款的合計貸款餘額為9,300萬美元——利息費用介於1,830萬至1,880萬美元；以及加權平均流通股數為6,450萬股。

Now I'll turn the call back to Lou.

現在我把電話交回給 Lou。

Thank you for your time this morning and your interest in Armada Hoffler.

感謝各位今天上午撥冗參與，並對 Armada Hoffler 的關注。

Operator, we'd like to begin the question-and-answer session.

接線員，我們想開始問答環節。

(Operator Instructions) Our first question is coming from the line of Dave Rodgers with Robert W. Baird.

(接線員指示) 我們的第一個問題來自 Robert W. Baird 的 Dave Rodgers。

Lou, wanted to start with the new development announcements. A lot of excitement there. Can you talk a little bit more about the project with S.J. Collins in Midtown Atlanta, maybe with respect to the sizing of the mezzanine loan and any purchase option that you're considering there as well?

Lou，我想先從新的開發案公告談起。那裡有很多令人振奮的消息。你能否再多談一點與 S.J. Collins 在亞特蘭大 Midtown 的那個專案，例如夾層貸款（mezzanine loan）的規模，以及你們也在考慮的任何購買選擇權？

Sure. Thanks, Dave. I'm going to let Mike discuss the size of the mez loan. It's still not tied down because we're waiting on Collins to finalize how they want to handle their construction loan. But Mike, do you want to comment?

當然。謝謝你，Dave。我會請 Mike 說明夾層貸款的規模。目前還沒有完全定案，因為我們在等 Collins 最終確定他們要如何處理其建築貸款。不過 Mike，你要不要補充一下？

Yes. So certainly the loan package is out to the financing on that. And once we know the amount of the senior loan, which will probably be in the 60% to 75%, then we'll know the actual amount of the mezzanine financing.

好的。所以，這個案子的貸款方案確實已經送交融資端處理。一旦我們知道第一順位貸款（senior loan）的金額，可能會落在 60% 到 75% 之間，我們就能知道夾層融資的實際金額。

It's an interesting deal structure here. We're going to earn a significant coupon on our mez interest like we have -- like we are in the other projects with S.J. Collins. We also have a cash flow participation that is significant as well as opposed to the at-cost option. Therefore, there'll be some meaningful income coming throughout the construction period with this particular structure.

這裡的交易結構很有意思。我們將在夾層利息上賺取相當可觀的票息（coupon），就像我們在與 S.J. Collins 的其他專案中一樣。此外，我們也有相當可觀的現金流分成，而不是採用按成本（at-cost）的選擇權。因此，透過這個特定結構，在施工期間將會持續產生一些具實質意義的收入。

Okay. That's great. Sounds like more to come as well there. I wanted to look -- I wanted to dive into your new leasing activity. I think you did 13 leases this quarter, over 50,000 square feet. You mentioned 150,000 square feet in total leasing for the quarter, including renewals, obviously both big numbers for you guys. But in your comments earlier, you kind of mentioned that that would lead to the redevelopment of Columbus Village, but it's obviously not in the development or redevelopment pipeline. So maybe what does that look like? How quickly is that coming just given your comments in the press release today?

了解。很好。聽起來後續還會有更多進展。我想再深入談談你們新的租賃活動。我記得你們本季簽了 13 份租約，超過 50,000 平方英尺。你們也提到本季總租賃量（包含續租）為 150,000 平方英尺，顯然對你們來說都是很大的數字。但在你先前的評論中，你提到這會帶動 Columbus Village 的改造，不過它顯然不在開發或改造的管線中。所以它大概會是什麼樣子？考量你們今天新聞稿中的說法，這會多快發生？

Sure. There's a lot of moving pieces surrounding Town Center and the redevelopment of the 2 shopping centers we purchased, which are Columbus Village. The first piece that has landed is the Shake Shack that we'd mentioned, and according to the Millennials in our office, that really means Town Center has arrived, so we'll see if that ends up being the case. But that section of Columbus Village will probably be the only section that remains more of a traditional shopping center, which is great for the project because we do have some tenants that want to be a part of Town Center but need a parking field out front, so those 3 or 4 acres involved there, with an out parcel building with Shake Shack, will end up staying in the traditional sense. The other pieces of Columbus Village are -- like I say, there's a lot of wheels in motion. All the tenants that are there want to stay in the new facilities. The city would like to see us go vertical. All those things are moving around, and I'm not quite sure of the timeframe. It could come together very quickly, or it also could be another year. But in any case, it's been a great purchase for us, and cash flow is going to continue to increase irrespective of development activity.

當然。圍繞 Town Center 以及我們買下的兩個購物中心（也就是 Columbus Village）的改造，有很多變動中的環節。第一個已經落地的是我們提過的 Shake Shack；根據我們辦公室的千禧世代同事說法，這真的代表 Town Center 已經到位了，所以我們看看最後是否真是如此。不過，Columbus Village 的那一段可能會是唯一仍維持較傳統購物中心型態的區塊，這對整個專案其實是好事，因為確實有一些租戶想成為 Town Center 的一部分，但需要前方有一片停車場，所以那裡涉及的 3 到 4 英畝土地，加上設有 Shake Shack 的外側地塊（out parcel）建物，最後會以傳統型態保留下來。至於 Columbus Village 的其他部分——如我所說，還有很多事情在推進。目前在那裡的所有租戶都希望能留在新的設施中。市政府也希望我們能往垂直開發（go vertical）。這些事情都在同步推動，但我還不太確定時間表。它可能很快就能整合到位，也可能還要再等一年。但無論如何，這對我們來說是一筆很棒的收購，而且不論是否進行開發，現金流都會持續增加。

Great. And then maybe finally for me, as you look ahead to '19, fairly large lease expiration year both on retail and in office and combined. Any concerns or opportunities that you guys see today as you begin to now look out to 2019?

很好。最後一個問題：展望 2019 年，無論零售或辦公室，加總起來都是租約到期相對較多的一年。當你們開始展望 2019 年時，目前看到有哪些疑慮或機會？

That's a great question, Dave. We're focusing on a couple of the large retail renewals, or expirations if you will. Our expectation is that everybody's going to remain in place. I think everybody knows about our small Kroger in Waynesboro that Kroger will not renew going forward. We've got some re-leasing efforts going there. But aside from that, our expectation is that things are going to roll over but for the Home Depot, which is the largest expiration that comes due in 2019. Unfortunately, Home Depot, we believe, is going to use their option that they have to buy the project out from under us. So the good news is it's a very strong store in a very strong center. The bad news is we're going to lose that income stream, we believe, as things move forward.

這是個很好的問題，Dave。我們正聚焦在幾個較大型的零售續租案，或說到期案。我們的預期是大家都會續留原址。我想大家都知道，我們在 Waynesboro 的那家較小的 Kroger，Kroger 未來不會續租。我們已在那裡進行重新招租的工作。除此之外，我們預期大多數租約都會續約，唯獨 Home Depot 例外；它是 2019 年到期中最大的一筆。很可惜，我們認為 Home Depot 會行使其選擇權，把該專案從我們手上買走。好消息是，那是一家在非常強勁的商圈內、表現非常強的店。壞消息是，我們相信隨著後續推進，我們將失去那一筆收入來源。

The next question is coming from the line of Bill Crow with Raymond James.

下一個問題來自 Raymond James 的 Bill Crow。

2 or 3 questions from me today. Mike, maybe we can start with you and just help us think about sources and uses over the next 18 months. If we just look at what's been announced, what's pending, etc., what are we looking at? We've got -- and as far as income, the sources coming in, we've got the mez repayment, we've got the sale of the distribution center. What else do we have as far as inflows?

我今天有 2 到 3 個問題。Mike，也許我們先從你開始，請你協助我們思考未來 18 個月的資金來源與用途。如果只看已公告、待完成等事項，我們大概會看到什麼？就收入、資金流入來源而言，我們有夾層貸款的償還款，也有配送中心的出售。那還有哪些其他的資金流入？

Yes, so as I've discussed earlier, we've got $100 million between the ATM and the sale of Annapolis Junction. On top of that, we've got the proceeds from the distribution center, and that will certainly get us well on our way to get these couple of big projects underway. These projects of this size take a while to get out of the ground, and it'll be a while before there really gets to be heavy capital requirements on those. So certainly, we'll be looking to get back into the ATM in 2019 and start to bring in the capital required for that. And we'll additionally continue to look at sales of assets like we have in the past. We'll continue to manage the balance sheet and keep the leverage in appropriate places like we always have.

好的，正如我先前提到的，我們透過 ATM（隨市發行）以及出售 Annapolis Junction，合計有 1 億美元。此外，我們還有配送中心出售的款項，這些資金肯定能讓我們在推動這幾個大型專案上走得很前面。這種規模的專案需要一段時間才能動工並進入正軌，而在真正出現大量資本需求之前也還需要一些時間。因此，我們當然會在 2019 年再回到 ATM，開始募集所需資本。另外，我們也會像過去一樣，持續尋找資產出售的機會。我們會持續管理資產負債表，並一如既往把槓桿維持在適當水準。

So well -- I know you're not sure how much the mez piece will be on The Interlock yet, but do you have a general range of outcomes there?

好的——我知道你們目前還不確定 The Interlock 的夾層（mezz）部分會是多少，但你們能否提供一個大致的結果區間？

Yes, it's going to be in the mid-$30 million range, and certainly we'll be receiving the coupon on that that will provide the EBITDA in order to keep the leverage right on that piece of it.

是的，會在3,000多萬美元的區間，當然我們也會收到該筆的票息（coupon），以提供 EBITDA，從而讓該部分的槓桿維持在合理水準。

Okay. And then Wills Wharf, the expected outflows over the next year and a half?

好的。那麼 Wills Wharf，在未來一年半的預期資金流出是多少？

Yes. You've got a 20 month-or-so construction schedule, so we've got a long runway in order to meet those capital needs, and that building is entirely on balance sheet. And Mike will be shopping for a construction loan appropriately.

是的。工期大約是20個月，所以我們有很長的時間跑道來滿足那些資本需求，而且那棟建築完全是在資產負債表內。Mike 也會適時去洽談一筆建築貸款。

Yes. Okay. Mike, on Wills Wharf or more generally on Harbor Point, what's left there? What are the opportunities that you see over the next few years or are we getting to the point where it's getting built out?

是的。好的。Mike，就 Wills Wharf 或更廣泛的 Harbor Point 而言，那邊還剩下什麼？你認為未來幾年有哪些機會，還是我們已經快到開發完成、逐步建滿的階段了？

No. Actually, I'd need to direct you to the website, to the Harbor Point website. You can see that there are still -- there's an additional 4 development parcels there. People have asked us for years, where's the next Town Center? This is our fourth building in that little development. It's going to include a great waterfront park and 3 additional vertical buildings. So our intent is to continue working with Beatty Development and build out the entire center.

不。其實我得請你去看網站，Harbor Point 的網站。你可以看到那裡仍然——還有另外4塊可開發地塊。多年來大家一直問我們，下一個 Town Center 在哪裡？這是我們在那個小型開發案中的第四棟建築。它將包含一座很棒的濱水公園，以及另外3棟垂直建築。因此，我們的意圖是繼續與 Beatty Development 合作，把整個中心完整開發建設完成。

Okay. And then I guess one more for you, Mike, and this is a bigger picture question. But it's an interesting time. We're 10 years into the cycle. We've got fairly significant cost inflation in construction, and we've got rising interest rates. So the question we get from clients is, what are you doing with all this commitment to development late in the cycle? Obviously, it's something that you're comfortable with, but why are you comfortable? Kind of give us your perspective on that.

好的。那我想再問你一個問題，Mike，這是更宏觀的問題。但現在是個很有意思的時點。我們已經在景氣循環中走了10年。建築成本通膨相當顯著，而且利率正在上升。所以客戶問我們的問題是：在循環後段，你們仍然投入這麼多開發承諾，是在做什麼？顯然這是你們覺得可以接受的，但你們為什麼覺得安心？請談談你們的看法。

Okay. This is Lou again. Thanks, Bill. That's a great question. You're right. We've gotten that question from investors several times as well. I'm trying to address it as best I can. First, let me say that the next recession that we're subjected to will be my fifth at Armada Hoffler. And we've learned several lessons through the first 4. A couple of them come to mind very quickly, including our central tenet. But first and foremost, let me say that time to time, the business cycle is a fool's errand. Nobody knows whether we're in the ninth inning or in the top of the first of a doubleheader or what have you. And so it's just not worth a lot of consideration. The second point -- and if you accept that first point, then the second point becomes even more important, and that is underwriting. We are meticulous in our underwriting of projects, and when I say underwriting, I don't just mean the financial models. I mean underwriting your tenants, underwriting your locations, underwriting your design, your construction. Every facet that goes into a building has to be parsed and reparsed, if that's a word, in order to make yourself as bulletproof as possible, or at least bullet resistant. If you've done your underwriting properly and the cycle turns against you, then all that means is that it's going to take you longer to be right. I'll give you a great case in point. We launched our Richmond Tower in 2007 at the crest of the biggest boom in history, absolute worst possible time to launch a high rise. But we did our underwriting properly. We had a fantastic location, an iconic building, really strong tenants. And despite all that, when we brought it online in 2009, I don't believe we could have sold it for what it would've cost to build. So what happened? Well, we enjoyed some great cash flow for about 5 years, and then in 2014, we sold the building for a $24 million profit. Now they don't always turn out that well. But the bottom line, I guess our view is whether it's late cycle, early cycle, midcycle, whatever, if you do your underwriting properly, then you're generally going to be okay. And that's a tenet that Mr. Hoffler started some 40 years ago and is going to remain our tenet going forward. But thanks for your question, Bill.

好的。我是 Lou，再次回答。謝謝你，Bill。這是個很好的問題。你說得對。我們也多次從投資人那裡收到這個問題。我會盡我所能來回答。首先我要說，我在 Armada Hoffler 經歷的下一次衰退將會是第五次。我們從前四次中學到了幾個教訓，其中有幾點很快就能想到，包括我們的核心信條。但首先也是最重要的是，我要說：試圖去判斷景氣循環的時點，時不時就是徒勞無功。沒有人知道我們是在第九局，還是雙重賽的第一局上半，諸如此類。因此這不值得花太多心力去考量。第二點——如果你接受第一點，那第二點就更重要了，也就是承作評估（underwriting）。我們對專案的承作評估非常嚴謹；我說的 underwriting 不只是財務模型。我指的是對租戶做評估、對地點做評估、對設計做評估、對施工做評估。建築所涉及的每一個面向都必須被拆解並反覆檢視（如果這樣說得通），以便讓自己盡可能刀槍不入，或至少具備一定的抗風險能力。如果你把 underwriting 做對了，而循環走勢對你不利，那意味著你只是需要更長時間才能證明你是對的。我給你一個很好的例子。我們在2007年、史上最大繁榮的高點啟動 Richmond Tower，這絕對是推出高樓案最糟的時機。但我們把 underwriting 做對了。我們有極佳的地點、具代表性的建築、非常強的租戶。即便如此，當我們在2009年完工投入營運時，我不認為我們能以足以覆蓋建造成本的價格把它賣掉。那結果如何？我們享受了大約5年的良好現金流，然後在2014年，我們以2,400萬美元的獲利出售了那棟大樓。當然，不是每次都會有這麼好的結果。但我想結論是：不管是循環後段、前段、中段或任何階段，只要你把 underwriting 做好，通常就會沒問題。這是 Hoffler 先生大約40年前建立的信條，未來也會持續作為我們的信條。不過謝謝你的提問，Bill。

The next question is coming from the line of John Guinee with Stifel.

下一個問題來自 Stifel 的 John Guinee。

Our next question is coming from the line of Jim Lykins with D.A. Davidson.

我們的下一個問題來自 D.A. Davidson 的 Jim Lykins。

Just a couple things. First of all, I want to make sure I heard something correctly. Did you say at Wills Wharf that that could go from $117 million possibly up to $225 million? Is that correct?

我有幾點想問。首先，我想確認我是否聽對了。你是說 Wills Wharf 可能會從1.17億美元上升到2.25億美元嗎？是這樣嗎？

No, no, no. It's a $117 million building. My $225 million reference was just the volume that the construction company expects to do this year in total.

不不不。那是一棟1.17億美元的建築。我提到的2.25億美元，只是指建築公司預期今年全年總計要做的工程量（volume）。

Okay. And also regarding the shadow pipeline, I know you've got a pretty significant shadow pipeline. Just any color at all right now about additional -- when we can expect some additional announcements for more projects and also what you're looking at, if it's more public-private partnerships or more mixed use. Just anything more you can tell us about that shadow pipeline.

好的。另外關於影子管線（shadow pipeline），我知道你們有相當可觀的 shadow pipeline。目前能否提供任何補充說明——例如我們何時可以期待更多新專案的公告，以及你們在看的方向，是更多公私合營（public-private partnerships），還是更多複合式用途（mixed use）。關於這個 shadow pipeline，你們還能多透露一些嗎？

Sure. And Jim, let me correct myself. The $225 million is a combination of both Wills Wharf and The Interlock project that we announced.

當然。Jim，我先更正一下我剛才的說法。2.25億美元是我們已公告的 Wills Wharf 與 The Interlock 兩個專案合計的金額。

Okay.

好的。

So with regard to the rest of the pipeline, it's coming together pretty quickly. My expectation is that we'll have further announcements prior to the next conference call. I think everybody can kind of guess where we're going. We're very active in Charleston. We're very active in Charlotte. We're active in Raleigh-Durham. People know that we've been nosing around in Nashville. All these places have projects that are coming together. Again, back to my earlier response on the late cycle, at this point, we have the ability to just cherry pick the best deals that we can underwrite. And so while all those locations are very positive for us, I suspect that 1 or 2 of these projects won't make the cut. But ultimately, I believe that this whole pipeline will be announced by the end of the year with a couple possibly coming prior to the next conference call.

至於其餘的開發儲備案源（pipeline），目前進展相當快、很快就會成形。我預期在下一次電話會議之前，我們還會有進一步的公告。我想大家大概都猜得到我們要往哪裡走。我們在查爾斯頓非常積極。我們在夏洛特也非常積極。我們在羅利—達勒姆也有在推進。大家也知道我們一直在納什維爾附近探尋機會。這些地方都有正在逐步成形的專案。再回到我先前對於景氣循環後段的回覆，就目前而言，我們有能力只挑選（cherry pick）我們能承作評估（underwrite）的最佳交易。因此，雖然這些地點對我們都很正面，我猜其中有 1 到 2 個專案可能不會通過篩選。但最終我相信整體這條 pipeline 會在年底前對外公布，其中有幾個可能會在下一次電話會議之前就先公布。

So Lou, from where you're sitting right now, I know previously you'd talked about that shadow pipeline could be potentially in excess of the current development pipeline. How do you think about that right now? You said you'd cut some things back or do you think that at this point that could still grow larger than the current development pipeline?

那麼 Lou，就你目前所看到的情況，我知道你之前提過，那條「影子 pipeline」可能會超過目前的開發 pipeline。你現在怎麼看？你說你會把一些項目縮減，還是你認為到這個階段，它仍可能成長到比目前的開發 pipeline 更大？

Jim, it's tough to call. If you use $0.5 billion as a benchmark, to throw around big numbers, it could be $100 million on either side of that depending on how things go. And the answer to your other question is that, yes, there are more public-private opportunities within what I just said.

Jim，這很難判斷。如果以 5 億美元作為基準、用大數字來講，依事情進展而定，可能在上下各 1 億美元的範圍內波動。至於你另一個問題，答案是肯定的：在我剛才提到的內容裡，確實還有更多公私合營（public-private）的機會。

Okay. And one last one from me, I'm just wondering if you can give us any more color on the potential asset sales. I'm wondering if you're still seeing a lot of private equity chasing high-quality multifamily.

好的。我最後一個問題是，想請你再多談一些潛在資產出售的情況。我想知道你們是否仍看到很多私募股權在追逐高品質的多戶住宅（multifamily）。

Yes. Actually, I'm going to let Eric Smith take that, as we are seeing quite a bit of activity there.

是的。其實這題我會請 Eric Smith 來回答，因為我們確實看到那邊有相當多的活動。

Yes. Thanks, Lou. The narrative that we outlined on our last conference call appears to be still strongly in place. And that narrative, as you may recall, that we're hearing from multiple sources is that the buyers of multifamily are shying away from the interest rate risk and the construction cost inflation risk that was mentioned earlier on the call. And in lieu of that, they are willing to take specific submarket lease up risk. And so we're seeing still a huge amount of interest in well-located projects that may be in an untraditional range of lease up and certainly even sub-50%. Combine that with the amount of money that has been raised for bridge loans. Those folks have the financing capacity to bridge those purchases until stabilization when they can put on permanent debt. So it seems like avoiding the risk as well as the availability of money, we are still seeing an immense amount of money chasing well-located, high-quality multifamily.

是的。謝謝你，Lou。我們在上一次電話會議所描述的那個敘事（narrative）看起來仍然非常成立。而那個敘事，如你所記得的，我們從多個來源聽到的是：多戶住宅的買方正在避開利率風險，以及剛才會議前面提到的施工成本通膨風險。相對地，他們願意承擔特定次市場（submarket）的出租去化（lease up）風險。因此，我們仍看到市場對於地點良好的專案有大量興趣，即便其去化狀況落在較不傳統的區間，甚至明顯低於 50%。再加上為過渡貸款（bridge loans）所募集的資金規模。這些人具備融資能力，可以先以過渡性融資承接這些收購，等到資產穩定（stabilization）後再轉為長期融資（permanent debt）。所以看起來在避險心態以及資金可得性兩者的作用下，我們仍看到大量資金在追逐地點佳、高品質的多戶住宅。

The next question is coming from the line of Venkat Kommineni with Janney Montgomery Scott.

下一個問題來自 Janney Montgomery Scott 的 Venkat Kommineni。

Beyond the Wawa land parcel sale, how active on the disposition front do you guys expect to be in the second half of the year?

除了 Wawa 那筆土地地塊出售之外，你們預期今年下半年在資產處分方面會有多積極？

We're more opportunistic, Venkat, than we are formulaic in terms of our approach to dispositions. As Eric said, there's a lot of money chasing deals out there, and I guess I'm talking a lot about our basic tenets. Another basic tenet we have here is we don't fall in love with real estate, particularly when they're not core assets. So it's very easy -- we very easily could see more dispositions coming over the next 12 months.

Venkat，相較於用固定公式來操作處分，我們更偏向把握機會、視情況而定。如 Eric 所說，外面有很多資金在追逐交易，而我想我也一直在談我們的基本原則。我們在這裡的另一個基本原則是：我們不會愛上不動產，尤其當它們不是核心資產時更是如此。因此很容易——我們很有可能在未來 12 個月看到更多處分案出現。

This is Eric to provide a little more color commentary to that. You would imagine, based on what Lou just said and it being a central tenet of ours, our asset management group and our individual asset managers are in constant communication with our investment team as they review the stabilized properties in the portfolio and, while they may be performing just fine, constantly asking the question of, is that capital better used elsewhere, be it in a 1031 or working with Mike and questioning the balance sheet and whether the capital is better used on the balance sheet. And so that is an ongoing, active conversation at all times internally.

我是 Eric，補充一些更具體的說明。你可以想像，基於 Lou 剛才所說、且那是我們的核心原則之一，我們的資產管理團隊與各個資產經理會持續與投資團隊保持溝通；他們在檢視投資組合中已穩定的資產時，即便這些資產表現良好，也會不斷問同一個問題：這筆資本是否更適合用在其他地方——不論是做 1031 交換，或是與 Mike 一起檢視資產負債表，思考這筆資本是否更適合用在資產負債表上。因此，這在內部一直都是持續且活躍的討論。

Okay. Great. And then can you provide a little color on the sales process at Annapolis Junction? What do you guys expect the stabilized pro forma to be if you had kept it? And maybe discussing the cap rate and price per unit this represents.

好的。很好。那你能否再談談 Annapolis Junction 的出售流程？如果你們當時選擇持有，你們預期穩定後的預估財務模型（stabilized pro forma）會是什麼樣子？也請談談這筆交易所代表的資本化率（cap rate）以及每戶單價（price per unit）。

I want to be careful because that transaction -- the ultimate transaction is between our partner and a buyer, and we are not a party to it. Obviously, we have knowledge of it, but it's not a hard contract yet. But it's a -- as I said earlier, it's a meaningful discount to what we believe it could bring stabilized. I believe you're talking about a cap rate in the low 5s with a stabilized asset. So we've got a decent discount to that, but it's still a very good price for us.

我得小心一點，因為那筆交易——最終的交易是在我們的合作夥伴與買方之間進行，而我們並非交易當事方。當然我們知道相關情況，但目前還不是一份已簽訂的正式合約。不過——如我先前所說，成交價格相對於我們認為資產穩定後可達到的價值，有相當幅度的折價。我想你問的是：若以穩定資產來看，資本化率大概在 5% 出頭的區間。所以我們確實是以相對那個水準的折價成交，但對我們而言仍是非常好的價格。

The next question is coming from the line of Craig Kucera with Wunderlich Securities.

下一個問題來自 Wunderlich Securities 的 Craig Kucera。

Lou, I feel like in prior cycles, you've spoken about how when rates are rising you've often seen business improving, particularly as measured by requests for expansions. Are you starting to see any of this pick up as we move through 2018, and is that expectation driving you guys toward an increased development weighting towards CBD office?

Lou，我記得在先前的景氣循環中，你曾談到當利率上升時，你往往會看到業務改善，特別是以擴張需求（requests for expansions）來衡量。隨著我們進入 2018 年，你是否開始看到這種情況回升？而這樣的預期是否也促使你們提高對 CBD 辦公室開發的配置比重？

Yes and yes. We're seeing an awful lot of optimism out there, both on the municipal side with various cities as well as very large tenants. So it really is different than any other cycle that we've seen in that people are optimistic. Unemployment, we're essentially at full employment. Rates are low in a matter what anybody says. They're low relative to historical averages. So it's a great time for the development business, and it's a great time for the real estate business. It's like we said before, if you can't take advantage of all these various factors and you focus simply on that you've got a mildly rising cost of capital, then you really shouldn't be in this business because this is what we all hope for.

是的，兩個都是。我們看到外界非常樂觀，不論是市政端、各個城市，或是非常大型的租戶。所以這確實不同於我們見過的任何其他循環，因為人們是樂觀的。失業率方面，我們基本上接近充分就業。不管任何人怎麼說，利率仍然偏低。相對於歷史平均而言，它們是低的。因此，這是做開發業務的好時機，也是做不動產業務的好時機。就像我們之前說的，如果你無法利用這些各種因素，而只專注在資本成本小幅上升，那你真的不該做這行，因為這正是我們所有人所期望的環境。

Got it. And one more from me, I think you mentioned that you expected higher development returns on these types of projects. And can you give us a rough idea of what you might be looking at versus where some of the multifamily projects have been penciling out recently?

了解。我再追問一個，我想你提到你預期這類專案的開發報酬會更高。你能否大致說明一下，你們可能期望的水準，對比近期一些多戶住宅專案的試算結果大概落在哪裡？

Sure. As you guys know, we talk about we look for a 20% spread between our wholesale and retail construction projects. And so if we follow the cap rate curve down, with multifamily, obviously, we're building to mid-6s to high 6s, even low 7s. For office and retail, it starts with a 7% and goes up to 8 1/2%, so if you -- the math simply says if we have more CBD office, our initial return on cost is going to be better than on the multifamily side.

當然。各位都知道，我們常說在批發型與零售型的建築開發專案之間，我們尋求約20%的利差。因此，如果沿著資本化率曲線往下看，多戶住宅方面，顯然我們的建造目標大約在6%中段到6%高段，甚至7%低段。至於辦公與零售，起點約7%，可上到8.5%，所以如果你——簡單的數學告訴你，如果我們有更多CBD核心商業區的辦公案，我們的初始成本報酬率會比多戶住宅那邊更好。

Our next question is coming from the line of Rob Stevenson with Janney Montgomery Scott.

下一個問題來自Janney Montgomery Scott的Rob Stevenson。

Just on the development pipeline and the shadow pipeline and what you guys are looking at, can you just talk a little bit about the rough mix is between office, retail and apartments and, I guess, other? How does that -- if you wind up going through with these projects, how does that sort of mesh out in terms of what the future of the company starts to look like from an asset class perspective?

就開發案的管線以及影子管線、以及你們正在評估的內容而言，能否談一下大致的組合比例：辦公、零售、公寓，以及我想還有其他類別？如果你們最後推進這些專案，從資產類別的角度來看，這會如何反映在公司未來的樣貌上？

Okay. Let's see. So obviously, the 2 projects that we just announced are almost singularly weighted towards office. Within the remaining projects, it still, I would say, is on the order of half office and with the other quarters being split between multifamily and retail. And of course, it's subject to change in case something dies. I could easily see there being very little retail in what's left. But it's all going to come together in the next few months, and we'll be able to be a little bit more certain on it.

好的。我想想。很明顯，我們剛宣布的那兩個專案幾乎是高度偏向辦公。在其餘的專案中，我會說大約有一半是辦公，另外兩個四分之一則由多戶住宅與零售分攤。當然，如果有案子告吹，這個比例也可能改變。我很容易想像剩下的案子裡零售可能會非常少。不過接下來幾個月就會逐步明朗，我們也能更有把握一些。

Okay. And then on the redevelopment at -- the new development that you're going to do at Town Center with Shake Shack etc., what's the aggregate dollar amount that you guys are going to end up investing in that?

好的。另外，關於Town Center那個要做的改造——也就是你們要做的新開發、包含Shake Shack等——你們最終在那上面的總投資金額大概會是多少？

Yes. In that particular phase, it's going to be pretty small. Like I said, what we're going to be effecting first is that 4 acres or so that is horizontal shops. I believe we're looking at $6 million or $7 million in terms of the total rehab of that center. As things progress and go more vertical, that number will ramp up pretty significantly. But those future phases involve tear downs rather than rehabs, and we also would expect significant city participation in those phases as well.

是的。在那個特定階段，規模會相當小。如我所說，我們首先要做的是大約4英畝左右的區域，也就是平面型的店鋪。我相信就該中心的整體整修而言，我們估計大約是600萬到700萬美元。隨著進度推進、並轉向更垂直的開發，那個數字會相當明顯地往上升。但那些後續階段涉及的是拆除重建而非整修，而且我們也預期在那些階段會有市政府相當程度的參與。

The next question is coming from the line of Dave Rodgers with Robert W. Baird.

下一個問題來自Robert W. Baird的Dave Rodgers。

Just one more follow-up from me, the Home Depot sale and then the Lowes Foods acquisition in the second half of '18, can you provide dollar amounts for each of those or a rough estimate?

我再追問一個：2018年下半年Home Depot的出售，以及Lowes Foods的收購，你能否提供各自的金額，或大概的估算？

Yes. The Lowes acquisition is in the mid-$25 million range -- around mid-20s, $25 million-or-so range. On the Home Depot, it's somewhat complicated in that the building sits on a ground lease, so the acquisition will just be for the building itself, which is not a lot of money. But what we still have to work out is what is their participation on paying us for the underlying ground lease that it sits on?

可以。Lowes的收購金額大約在2,500萬美元的中段區間——大概2,000多萬美元中段、約2,500萬美元左右。至於Home Depot，情況有點複雜，因為該建物坐落在一份地上權租約之上，所以收購只會針對建物本身，金額不會太大。但我們仍需釐清的是：他們對於支付我們該建物所坐落之底層地上權租約的對價，參與程度會是如何？

Sale-wise, it's 20-year-old bricks and sticks. It's a few million dollars, Dave.

就出售而言，那是20年的老建物。大概是幾百萬美元，Dave。

Thank you. It appears we have no more further questions at this time. So I would like to pass the floor back over to Mr. Haddad for any additional concluding comments.

謝謝。看起來目前沒有其他問題。那我想把時間交回給Haddad先生，請他做任何額外的結語。

Thanks very much for your interest in our company. We look forward to updating you on our activities and results in the coming quarters. Have a great day.

非常感謝各位對我們公司的關注。我們期待在接下來幾個季度向各位更新我們的活動與成果。祝各位有美好的一天。

Ladies and gentlemen, this does conclude today's teleconference. We thank you for your participation, and you may disconnect your lines at this time.

各位女士、先生，今天的電話會議到此結束。感謝各位的參與，現在可以掛斷電話線。