AH Realty Trust, Inc (AHRT) 2018 Q4 法說會逐字稿

Welcome to Armada Hoffler's Fourth Quarter 2018 Earnings Conference Call. At this time, all participants are in a listen-only mode. After management's prepared remarks, you'll be invited to participate in a question and answer session. (Operator Instructions) As a reminder, this conference call is being recorded today, Thursday, February 7, 2019.

歡迎參加 Armada Hoffler 2018 年第四季財報電話會議。此時，所有與會者將以僅收聽模式參與。在管理層預先準備的發言結束後，將邀請各位參與問答環節。(接線員指示) 提醒各位，本次電話會議正在錄音，時間為 2019 年 2 月 7 日（星期四）。

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 Fourth Quarter and Full Year 2018 Earnings Conference Call and Webcast. On this call this morning, in addition to myself, is Lou Haddad, CEO.

各位早安，感謝各位參加 Armada Hoffler 2018 年第四季及全年財報電話會議與網路直播。今天早上的電話會議中，除了我之外，還有執行長 Lou Haddad。

The press release announcing our fourth quarter earnings, along with our quarterly supplemental package and our 2019 guidance presentation, were distributed this morning. A replay of this call will be available shortly after the conclusion of the call through March 7, 2019. The numbers to access the replay are provided in the earnings press release. For those who listen to the rebroadcast of this presentation, I remind you that the remarks made herein are as of today, February 7, 2019, and will not be updated subsequent to this initial earnings call.

本公司今早已發布宣布第四季財報的新聞稿，以及季度補充資料包與 2019 年財測指引簡報。本次電話會議的重播將於會議結束後不久提供，並可收聽至 2019 年 3 月 7 日。重播的撥入號碼已載於財報新聞稿中。對於收聽本次簡報重播的聽眾，提醒各位：本次發言內容截至今日（2019 年 2 月 7 日）為準，且在本次初次財報電話會議後不會再更新。

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

在本次電話會議中，我們將作出前瞻性陳述，包括與本公司投資組合未來表現、開發案儲備（pipeline）、收購與處分的影響、夾層融資（mezzanine）計畫、營造業務、投資組合表現與融資活動相關之陳述，以及對我們指引與展望的評論。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。

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 the risk factors disclosed in documents we have filed with or furnished to the SEC.

這些風險與不確定性可能導致實際結果與我們目前的預期出現重大差異；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風險因素。

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, 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，可於我們網站 Armadahoffler.com 取得。

We will start the call today by discussing our 2019 guidance. At this time, I'd like to draw your attention to our 2019 guidance presentation that we published this morning. I'll now turn over the call to Lou.

今天我們將先討論 2019 年財測指引。此時，我想請各位留意我們今早發布的 2019 年財測指引簡報。接下來我把電話交給 Lou。

Thanks, Mike. Good morning, everyone, and thank you for joining us today.

謝謝你，Mike。各位早安，感謝各位今天加入我們。

This month Armada Hoffler will celebrate its 40th anniversary. We take a good deal of pride in achieving this milestone not often seen in the commercial real estate business. Over the years, we've earned a reputation for integrity, consistency, and professionalism, traits that are the foundation of our success. Complementing our seasoned management team, we have a vibrant young staff and like-minded partners that have us positioned for even greater achievements in the future.

本月 Armada Hoffler 將慶祝成立 40 週年。我們對達成這個在商用不動產產業並不常見的里程碑深感自豪。多年來，我們以誠信、一致性與專業精神建立了聲譽，而這些特質正是我們成功的基礎。除了經驗豐富的管理團隊外，我們也擁有充滿活力的年輕員工與志同道合的合作夥伴，使我們在未來有望取得更大的成就。

In addition to analysts and investors, there are many employees and joint venture partners listening in on the call today. On behalf of our founder and chairman, Dan Hoffler, the Board of Directors, and executive management, we sincerely thank you for being part of our team. I'm proud to be associated with each one of you.

除了分析師與投資人之外，今天也有許多員工與合資夥伴正在收聽本次電話會議。我謹代表我們的創辦人兼董事長 Dan Hoffler、董事會以及執行管理團隊，誠摯感謝各位成為我們團隊的一份子。能與各位每一位共事，我深感榮幸。

The focus of my comments today will be on our 2019 guidance as presented in the release this morning. Before we discuss those projections, I'll offer a few thoughts on the fourth quarter and 2018.

我今天的重點將放在今早發布資料中所呈現的 2019 年財測指引。在討論這些預測之前，我先分享幾點對第四季與 2018 年的看法。

As you can see from our earnings release, the fourth quarter was extremely busy at the company. We started a number of new projects, signed several third-party construction contracts, sold a major portfolio asset, and closed on the distribution center sale with over a 15% profit. Perhaps most importantly, leasing in our portfolio continued at a very brisk pace, with healthy increases in both same-store NOI and re-leasing spreads. Lease-up in the newly delivered development projects remains on track as well.

從我們的財報新聞稿可見，第四季公司非常忙碌。我們啟動了多個新專案，簽下數份第三方營造合約，出售了一項主要投資組合資產，並完成配送中心出售案，獲利超過 15%。或許最重要的是，我們投資組合的租賃活動持續以非常快的速度進行，同店 NOI 與續租價差（re-leasing spreads）皆有健康的提升。新完工交付的開發專案之招租（lease-up）也仍按計畫推進。

Our fourth quarter results were in line with expectations, and normalized FFO for the full year was $1.03 per share, which was at the high end of our guidance range. As we said at the beginning of last year, 2018 would yield respectable growth in per-share earnings over 2017, and it has done so with a year-over-year increase of over 4%.

我們第四季的結果符合預期，全年標準化 FFO 為每股 1.03 美元，位於我們指引區間的高端。正如我們在去年年初所說，2018 年將帶來相較 2017 年每股盈餘的可觀成長，而實際上年增幅超過 4%。

More notably, we anticipated that our activities over the course of 2018 would build a solid foundation for significantly higher earnings in 2019 and beyond. Turning to our guidance presentation, as you can see by the earnings target on page 4, we intend to deliver on that assertion. The midpoint of our per share guidance range of $1.14 represents an increase of more than 10% over last year. Our guidance is even more impressive when you consider the FFO headwinds from both anticipated and completed dispositions.

更值得注意的是，我們預期 2018 年期間的各項活動將為 2019 年及之後顯著更高的獲利奠定堅實基礎。回到我們的指引簡報，從第 4 頁的獲利目標可見，我們打算兌現這項主張。我們每股指引區間中點 1.14 美元，較去年增加逾 10%。若再考量因預期與已完成處分所帶來的 FFO 逆風，我們的指引更顯亮眼。

During 2019, we expect to sell a grocery-anchored center in the fourth quarter. More significantly, on December 31, Home Depot exercised its below-market purchase option upon lease expiration at our Broad Creek Center, resulting in a considerable loss of some $700,000 of NOI.

在 2019 年期間，我們預期將於第四季出售一座以超市為主力店（grocery-anchored）的購物中心。更重要的是，12 月 31 日 Home Depot 在我們 Broad Creek Center 的租約到期時，行使其低於市價的購買選擇權，導致我們損失約 70 萬美元的 NOI，影響相當可觀。

Before I walk you through the other highlights of our presentation, I'm going to reiterate a fact that many who follow our company have correctly pointed out, that we do not fit neatly into the standard REIT box. With third-party construction profits, build-to-suit asset sales, and mezzanine interest income, our platform has a unique complexity that can't be wholly measured by traditional REIT metrics.

在我帶各位看過簡報的其他重點之前，我想重申一個許多關注我們公司的投資人已正確指出的事實：我們並不完全符合標準 REIT 的典型框架。由於第三方營造利潤、量身訂做（build-to-suit）資產出售，以及夾層融資利息收入，我們的平台具有獨特的複雜性，無法完全以傳統 REIT 指標衡量。

That said, while these ancillary income streams augment earnings and decrease the need for external capital, the end goal of monetizing development spreads in this fashion is to enhance growth in our portfolio income through new development projects and off-market OP unit acquisitions.

話雖如此，儘管這些附屬收入來源可增厚獲利並降低對外部資本的需求，但以此方式將開發價差變現的最終目標，是透過新開發專案與場外（off-market）OP 單位收購，提升我們投資組合收入的成長。

Illustrative of this point, as you can see by the information at the top of page 5, we expect our portfolio NOI to climb by over 50% from 2018 levels when the current development projects are fully stabilized. The FFO per share contribution from this additional NOI will be meaningfully higher due to the millions of dollars earned from mezzanine interest and construction income that we reinvest into the company, thereby reducing the need for outside capital.

為了說明這一點，如第 5 頁上方資訊所示，當目前開發專案完全穩定（fully stabilized）後，我們預期投資組合 NOI 將較 2018 年水準提升逾 50%。由於我們將從夾層融資利息與營造收入所賺取的數百萬美元再投資於公司，從而降低對外部資本的需求，因此這些新增 NOI 對每股 FFO 的貢獻將顯著更高。

Also of note on page 5, as we have been projecting, the pie chart showing the NOI contribution of our various product types continues to rebalance, with concentration moving from retail into multifamily and office. While the non-retail assets that are being added to the portfolio are of trophy quality and offer significant long term growth, I'd like to emphasize that we are very bullish on all components of our retail portfolio.

同樣值得注意的是第 5 頁：如我們先前所預測，顯示各產品類型 NOI 貢獻的圓餅圖持續再平衡，集中度正由零售轉向多戶住宅與辦公。雖然新增至投資組合的非零售資產屬於旗艦級（trophy quality），並提供顯著的長期成長，但我想強調，我們對零售投資組合的所有組成部分仍非常看多。

Neighborhood grocery stores, regional discount centers, entertainment, and mixed-use retail will remain as a high occupancy and growing sector of our business. That said, we anticipate taking advantage of low cap rates to raise approximately $25 million by selling one of these centers.

社區型雜貨店、區域折扣中心、娛樂，以及複合式零售，仍將是我們業務中高入住率且持續成長的領域。話雖如此，我們預期將利用偏低的資本化率（cap rates）優勢，透過出售其中一座中心籌集約 2,500 萬美元。

Turning to page 6, you can see that we've also been very successful in diversifying the portfolio on a geographic basis. Upon stabilization of the current pipeline, nearly half of our property NOI will come from outside of Virginia. This diversification is the result of years of goodwill and strong relationships built with strategic partners in these dynamic markets.

翻到第 6 頁，您可以看到我們在按地理區域分散投資組合方面也非常成功。在目前開發管線穩定後，我們物業的 NOI 近一半將來自維吉尼亞州以外地區。這種分散化是多年來在這些充滿活力的市場中，與策略夥伴建立的良好商譽與穩固關係所帶來的成果。

Beyond the current pipeline, we are evaluating multiple new opportunities in these and other neighboring areas. While these have not been finalized, our expectation is that at least one of these new engagements will be ready to announce later this year.

除目前的開發管線之外，我們也在這些以及其他鄰近地區評估多個新機會。雖然尚未定案，但我們預期至少有一項新的合作案可望在今年稍晚對外宣布。

The development pipeline is described on page 7. Currently, we have over $0.5 billion in various stages of development. Several of these projects are nearing stabilization, while some are still under construction. All of these were previously disclosed and are on track, and we are very pleased with the progress to date on each of our projects.

第 7 頁說明了我們的開發管線。目前，我們在不同開發階段的專案總額超過 5 億美元。其中數個專案已接近穩定期，另一些仍在施工中。這些專案先前皆已揭露且進度如期，我們對目前各專案的進展感到非常滿意。

The furthest along is 1405 Point, the apartments at the Inner Harbor in Baltimore. This trophy asset is over 90% leased, and we expect both stabilization and execution of our at-cost purchase option in the second quarter. The fully leased Brooks Crossing office building will also come online in the same timeframe. We can answer any specific questions you may have regarding the pipeline in the Q&A portion of this call.

進度最超前的是 1405 Point，也就是位於巴爾的摩內港的公寓案。這項旗艦級資產出租率已超過 90%，我們預期將於第二季達到穩定期，並執行我們的按成本購買選擇權。已全數出租的 Brooks Crossing 辦公大樓也將在相同時間點投入營運。在本次電話會議的問答環節，我們可以回答您對開發管線的任何具體問題。

Page 8 shows our mezzanine investment program. This initiative allows us to provide development and construction expertise, as well as our strong credit, to trusted partners developing high-quality projects in return for most of the value creation.

第 8 頁展示我們的夾層投資計畫。此項計畫讓我們能向可信賴的合作夥伴提供開發與施工專業，以及我們強健的信用，以換取大部分的價值創造。

We've separated the program into 2 parts, assets that we intend to ultimately acquire through a discounted purchase option and projects that we feel are better suited as short term investments. The assets in this latter category are expected to trade at cap rates significantly below our cost of capital, thereby making our acquisition less practical. Consequently, our partners will be offering the projects to the general market.

我們將該計畫分為兩部分：一類是我們打算最終透過折價購買選擇權取得的資產；另一類是我們認為更適合作為短期投資的專案。後者類別的資產預期將以顯著低於我們資金成本的資本化率（cap rate）成交，因此使我們收購的可行性較低。因此，我們的合作夥伴將把這些專案提供給一般市場。

The mezzanine lending strategy, combined with the schedule, quality, and cost control provided through our general contracting arm, enables us to participate in top quality developments such as Whole Foods centers and monetize a large percentage of the wholesale to retail spread through interest and fee income. Stated another way, this aspect of our investment strategy maximizes flexibility in deciding which projects are best suited for inclusion in the portfolio and which are best to monetize based on a variety of factors, including capital market and commercial real estate conditions.

夾層放款策略結合我們總承包部門在工期、品質與成本控管上的能力，使我們得以參與如 Whole Foods 中心等頂級開發案，並透過利息與費用收入將批發到零售的價差中相當大的一部分變現。換句話說，這一投資策略面向可在多項因素（包括資本市場與商用不動產景氣）下，最大化我們在決定哪些專案適合納入投資組合、哪些專案更適合變現方面的彈性。

As you can see, over a multiyear period we expect to generate $60 million of net proceeds, substantially reducing our need for external capital. Based on the projected payoff dates of the current projects and likely engagements in predevelopment, we expect the program to stay at or near these levels at least through 2020, yielding significant profits over the next few years. Mike will update you on the 2019 guidance of this segment of our business.

如您所見，在多年期間我們預期可產生 6,000 萬美元的淨收益，大幅降低我們對外部資金的需求。根據目前專案預估的回收日期，以及在前期開發階段可能承作的案源，我們預期該計畫至少到 2020 年都能維持在這些水準或接近這些水準，並在未來幾年帶來可觀獲利。Mike 將向各位更新我們此業務分部 2019 年的指引。

Page 9 covers our third-party construction and other real estate services. With a healthy backlog of over $160 million, the division is expected to make over $5 million in gross profit this year. While we don't anticipate a build-to-suit engagement in this calendar year, this skill set remains a part of our overall strategy in the construction division, and we typically execute on one of these opportunities every 18 to 24 months.

第 9 頁涵蓋我們的第三方施工及其他不動產服務。在超過 1.6 億美元的健康在手訂單支撐下，該部門今年預期可創造超過 500 萬美元的毛利。雖然我們預期本曆年不會有量身訂做（build-to-suit）的合作案，但這項能力仍是我們施工事業部整體策略的一部分，而我們通常每 18 至 24 個月會執行其中一個此類機會。

Lastly, on this page, you'll see the remaining $4.5 million to be recognized from the sale of our purchase option at Annapolis Junction. You'll recall that the accounting treatment for the $5 million payment we received last fall requires us to book this profit over the remaining term of the mezzanine loan.

最後，在本頁您會看到，出售我們在 Annapolis Junction 的購買選擇權尚有 450 萬美元待認列。各位應記得，我們去年秋天收到的 500 萬美元款項，其會計處理要求我們在夾層貸款剩餘期間內分期認列該筆獲利。

Stepping back to a macro look at the business, the top of page 10 shows the year-over-year anticipated change in the composition of our normalized FFO. As you can see, property FFO rises the most on an absolute basis, followed by mezzanine interest.

從更宏觀的角度來看業務，第 10 頁上方顯示我們標準化 FFO 組成在年度間預期的變化。如您所見，物業 FFO 以絕對金額計增幅最大，其次是夾層利息。

The pie charts show that, while a significant portion of our FFO is derived from ancillary real estate related sources, the vast majority is generated from traditional rental income. With the ramp-up of the mezzanine program and the profit contribution from the option sale, 2019 shows a corresponding decrease in the percentage earned from rental real estate.

圓餅圖顯示，雖然我們的 FFO 有相當一部分來自不動產相關的附屬來源，但絕大多數仍由傳統租金收入所產生。隨著夾層計畫的加速推進，以及出售選擇權帶來的獲利貢獻，2019 年來自出租不動產的占比相應下降。

However, our expectation is that mezzanine, construction, and build-to-suit contributions will stay more or less static over the next few years, while stabilization of the existing development pipeline will increase property NOI by some $30 million. We expect the resulting FFO generated will return the property segment to well over 80% of the total on a consistent basis, thereby solidifying our earnings base and multiple.

然而，我們預期夾層、施工以及量身訂做（build-to-suit）的貢獻在未來幾年將大致維持不變，而既有開發管線達到穩定期後，物業 NOI 將增加約 3,000 萬美元。我們預期由此產生的 FFO 將使物業部門的占比在穩定狀態下回升至總額的 80% 以上，從而鞏固我們的獲利基礎與估值倍數。

Now I'll turn the call over to Mike to give some further detail on our guidance as well as some specifics on last quarter.

接下來我把電話會議交給 Mike，請他就我們的指引以及上一季的一些細節做進一步說明。

Thanks, Lou. After a couple of comments on the quarter, I will continue the discussion on our 2019 guidance.

謝謝，Lou。在對本季做幾點評論之後，我將繼續說明我們 2019 年的指引。

This morning we reported FFO of $0.26 and normalized FFO of $0.30 per share for the fourth quarter. For the full year, FFO was $0.99 and normalized FFO was $1.03 per share. The majority of the difference between FFO and normalized FFO in the fourth quarter was from the non-cash mark-to-market adjustments from our interest rate hedging strategy and severance related charges. These unexpected severance-related charges caused our G&A to be outside our previously announced guidance range.

今天早上我們公布第四季每股 FFO 為 0.26 美元、每股標準化 FFO 為 0.30 美元。全年而言，每股 FFO 為 0.99 美元、每股標準化 FFO 為 1.03 美元。第四季 FFO 與標準化 FFO 差異的主要來源，是我們利率避險策略所產生的非現金按市價評價（mark-to-market）調整，以及與資遣相關的費用。這些非預期的資遣相關費用，導致我們的 G&A 超出先前公布的指引區間。

Although 2018 was not a good year for REIT stocks, our total return was slightly better than the RMS. Our 5-year total shareholder return through February 1 was 122% versus 55% for the RMS. Obviously, we are pleased with these returns and are grateful for the trust that our shareholders have placed in our company.

雖然 2018 年對 REIT 股票而言不是好的一年，但我們的總報酬率略優於 RMS。截至 2 月 1 日，我們 5 年期股東總報酬率為 122%，相較之下 RMS 為 55%。顯然，我們對這些報酬感到滿意，也感謝股東對本公司的信任。

Our core operating portfolio occupancy for the fourth quarter remained strong at 96%, with office at 93%, retail at 96%, and multifamily at 97%. Same-store NOI was positive for the third consecutive quarter and slightly positive for the year.

我們核心營運投資組合在第四季的出租率仍維持強勁，整體為 96%，其中辦公為 93%、零售為 96%、多戶住宅為 97%。同店 NOI 連續第三季為正，全年也略為正成長。

Additionally, our re-leasing spreads were positive again this quarter, 5.7% on a GAAP basis and 3.4% on cash. They were also positive 5.4% on a GAAP basis and 1.1% on cash for the year. We believe these positive metrics are a reflection of the quality of our portfolio.

此外，本季我們的續租租金價差再次為正：按 GAAP 基礎為 5.7%，按現金基礎為 3.4%。全年而言，按 GAAP 基礎為正 5.4%，按現金基礎為正 1.1%。我們認為這些正向指標反映了我們投資組合的品質。

Now back to the guidance deck, starting on page 11. There are a couple of slides relating to the balance sheet. As you can see, we have maintained leverage within our corporate targets of total debt to EBITDA with an upper limit of 8 times and core debt to core EBITDA in the 6 times range. There were exceptions to this in 2018 with regards to core debt to core EBITDA.

現在回到指引簡報，從第 11 頁開始。其中有幾張投影片與資產負債表相關。如您所見，我們將槓桿維持在公司目標範圍內：總負債對 EBITDA 的上限為 8 倍，核心負債對核心 EBITDA 約在 6 倍區間。2018 年在核心負債對核心 EBITDA 方面曾有例外情況。

As we previously discussed, we elevated leverage in 2018 for the build-to-suit distribution center. With the short term nature of this project and associated debt, we did not raise any equity capital for this project, which sold in December as planned. As you can see, leverage was back in our target range at year-end.

如我們先前所討論，2018 年我們因量身訂做（build-to-suit）配送中心而提高了槓桿。由於該專案及其相關負債屬短期性質，我們未為此專案募集任何股權資本；該專案也如計畫於 12 月出售。如您所見，年底時槓桿已回到我們的目標區間。

We anticipate the following sources will meet our capital needs for 2019, and expect that we will maintain leverage within our target range for the year; first, the disposition of a grocery-anchored shopping center for the expected proceeds of approximately $25 million. The proceeds from this sale will be used to pay down debt. Second, we expect that the Decatur Whole Foods centers and Annapolis Junction loans to be paid off this year. The expected payments are approximately $60 million. And third, raising $50 million through the ATM program, which is less than 2018, assuming favorable market conditions.

我們預期以下資金來源將可滿足我們2019年的資本需求，並預期我們在今年將把槓桿維持在目標區間內；第一，處分一座以雜貨店為主力店的購物中心，預計可取得約2,500萬美元的款項。本次出售所得將用於償還債務。第二，我們預期Decatur Whole Foods中心與Annapolis Junction貸款將於今年清償。預期還款金額約為6,000萬美元。第三，在市場條件有利的前提下，透過ATM計畫籌資5,000萬美元，低於2018年。

As Lou said, we are evaluating a number of new development opportunities. We do not expect any of these to break ground until late this year, and therefore require little capital investment in 2019.

如Lou所說，我們正在評估多項新的開發機會。我們預期這些項目要到今年稍晚才會動工，因此在2019年所需的資本投入不多。

Now turning to page 12 to review debt maturities. There was only one maturity in 2019, which was paid off in January. In 2020, there are 2 loan maturities, both of which are construction loans totaling $45 million. The loans are for the Greenside Apartments in Charlotte and Town Center Phase VI. With the leasing activity on both projects, we have no concerns on either exercising our extension options or refinancing these projects. I'll have further comments on the balance sheet later in my remarks.

接著請看第12頁，檢視債務到期情況。2019年僅有一筆到期款，已於1月償清。2020年有兩筆貸款到期，皆為建築貸款，合計4,500萬美元。這些貸款分別用於夏洛特的Greenside Apartments以及Town Center第六期。鑑於兩個專案的出租進度，我們對於行使展期選擇權或為這些專案再融資均無疑慮。我稍後在談到資產負債表時會再補充說明。

Next, I'll discuss a couple segments of our business. Page 13 of the deck illustrates our core operating portfolio occupancy since 2013, which has been in the mid 90%'s. This reflects the strength of our properties, and we expect this to continue at these levels in 2019.

接下來，我將討論我們業務的幾個部門。簡報第13頁呈現自2013年以來我們核心營運投資組合的出租率，一直維持在90%中段水準。這反映了我們資產的強勁表現，我們預期2019年將持續維持在此水準。

Page 14 of the deck illustrates the details of our 2019 mezzanine investment program guidance. The size of this program has increased substantially during the fourth quarter with the closing of the 3 new mezz loans.

簡報第14頁說明我們2019年夾層投資計畫指引的細節。由於第四季完成三筆新的夾層貸款，本計畫規模大幅增加。

With the growth of the program, we are considering making this a separate segment for financial reporting in 2019. We do not anticipate the program growing beyond current year levels, but will remain substantial over the next few years. If we make this change, under GAAP interest income will be reported net of interest expense.

隨著計畫成長，我們正考慮在2019年將其作為單獨部門進行財務報導。我們不預期該計畫規模會超過本年度水準，但未來幾年仍將維持相當規模。若我們進行此變更，依GAAP規定，利息收入將以扣除利息費用後的淨額列示。

For the year, we expect net interest income of approximately $16 million, which includes $4.5 million from the amortization of the Annapolis Junction purchase option sale. As discussed earlier, under GAAP this property is considered interest income and recognize through maturity. 2019 interest income guidance is based upon the anticipated loan payoffs of the Decatur and Annapolis Junction loans in 2019, as listed on this slide.

就全年而言，我們預期淨利息收入約為1,600萬美元，其中包含來自Annapolis Junction購買選擇權出售之攤銷的450萬美元。如先前所述，依GAAP規定，該項目被視為利息收入並於到期前逐期認列。2019年利息收入指引係基於本投影片所列、預期於2019年清償的Decatur與Annapolis Junction貸款。

On page 15 is our 2019 full year normalized FFO guidance of $1.11 to $1.17 per share, which is a substantial increase in normalized FFO per share from 2018, which was $1.03.

第15頁為我們2019年全年標準化FFO指引，每股1.11至1.17美元；相較於2018年的每股1.03美元，標準化FFO每股大幅提升。

The assumptions of the 2019 guidance are the sale of a grocery-anchored shopping center for anticipated proceeds of approximately $25 million in the fourth quarter; acquisition of 79% interest of the partnership in 1405 Point Street Apartments during the second quarter; acquisition of the commercial component of One City Center from the joint venture in the first quarter. We have not included any other acquisitions in this guidance, but as in the past we continue to pursue accretive OP unit transactions; Decatur Whole Foods center loan being paid off in the second quarter and Annapolis Junction loan being paid off in the fourth quarter, raising $50 million through the ATM program, assuming favorable market conditions. Interest expect is calculated on the forward LIBOR curve, which forecasts LIBOR at 2.57% at year-end.

2019年指引的假設包括：第四季出售一座以雜貨店為主力店的購物中心，預計取得約2,500萬美元款項；第二季收購1405 Point Street Apartments合夥企業79%權益；第一季自合資企業收購One City Center的商業部分。本指引未納入其他收購案，但如同以往，我們仍持續尋求具增益性的OP單位交易；Decatur Whole Foods中心貸款於第二季清償、Annapolis Junction貸款於第四季清償；在市場條件有利的前提下，透過ATM計畫籌資5,000萬美元。利息費用係依遠期LIBOR曲線計算，該曲線預測年末LIBOR為2.57%。

2019 guidance of $1.11 to $1.17 per share is predicated on the following updated components; total NOI in the $93.7 million to $96.6 million range; third-party construction gross profit in the $4.9 million to $5.7 million range; net interest income from our mezzanine financing program in the $16 million to $16.5 million range, which includes the remaining $4.5 million recognized from the amortization of the Annapolis Junction purchase option; general and administrative expenses in the $10.8 million to $11.5 million range; interest expense in the $25.5 million to $26.5 million range, which does not include the interest expense related to the mezz program as discussed earlier; and 69.3 million weighted average shares outstanding.

2019年每股1.11至1.17美元的指引係基於以下更新後的組成項目：NOI總額介於9,370萬至9,660萬美元；第三方施工毛利介於490萬至570萬美元；夾層融資計畫的淨利息收入介於1,600萬至1,650萬美元，其中包含因Annapolis Junction購買選擇權攤銷而認列的剩餘450萬美元；一般及行政費用介於1,080萬至1,150萬美元；利息費用介於2,550萬至2,650萬美元（不包含如前所述與夾層計畫相關的利息費用）；以及加權平均流通股數6,930萬股。

Now back to the fourth quarter, which had a lot of activity. In December, unfortunately Home Depot took advantage of their purchase option of their store in the Broad Creek Shopping Center. While this is a financial negative to the company, we believe this shows the strength of the center and why it has experienced historically high occupancy.

回到第四季，當季有許多活動。很遺憾地，12月Home Depot行使其在Broad Creek Shopping Center門市的購買選擇權。雖然這對公司財務面為負面影響，但我們認為這顯示該中心的強勁實力，也解釋了其歷來維持高出租率的原因。

The proceeds from this sale were used to purchase an out-parcel adjacent to our Wendover Shopping Center through a 1031 tax-free exchange. The net loss of NOI after this acquisition is over $700,000, which equates to over $0.01 of earnings per share.

本次出售所得透過1031免稅交換，用於購買緊鄰我們Wendover Shopping Center的一塊外圍地塊（out-parcel）。在完成該收購後，NOI淨減少超過70萬美元，約相當於每股盈餘減少超過0.01美元。

As expected, Kroger did not renew the lease at their Waynesboro Shopping Center. The store is only 38,000 square feet, which is too small for their current model. With its small size and rural location, we decided disposition is the best option. With an executed purchase-sale agreement, the center is now classified as held for sale in the balance sheet. An impairment loss was recognized in the fourth quarter.

如預期，Kroger未續租其在Waynesboro Shopping Center的租約。該店面僅38,000平方英尺，對其目前的營運模式而言過小。考量其面積小且位於鄉村地區，我們決定處分是最佳選項。在簽署買賣協議後，該中心目前於資產負債表中分類為待售。第四季已認列減損損失。

When City Center was placed in service with Duke University and WeWork occupying the building, income for this building net of depreciation and interest expense is recognized in a new line on our income statement, equity and income of unconsolidated real estate entities. This project is in a joint venture, of which we own 100% of the commercial space. We expect to distribute this property out of the joint venture and refinance it this quarter.

當City Center投入使用且由Duke University與WeWork進駐後，該大樓在扣除折舊與利息費用後的收益，於我們損益表中以新科目列示：未合併不動產實體之權益法投資損益。此專案為合資案，其中商業空間由我們持有100%。我們預期本季將該資產自合資企業中分配出來並進行再融資。

We also had a lot of activity with our mezzanine loan program. We closed on the Nexton Square project in Summerville, South Carolina, and 2 projects that are part of The Interlock development in Atlanta. Interlock projects are the Terwilliger Pappas Solis multifamily project and the S.J. Collins mixed-used building. Please see the press release we issued last month for more information on these projects.

我們的夾層貸款計畫也有許多進展。我們完成了南卡羅來納州Summerville的Nexton Square專案，以及亞特蘭大The Interlock開發案中的兩個專案。Interlock專案包括Terwilliger Pappas Solis多戶住宅專案，以及S.J. Collins的複合用途大樓。關於這些專案的更多資訊，請參閱我們上月發布的新聞稿。

The first project in our mezzanine program was the 1405 Point Street Apartments. As part of this structure, we have an at-cost purchase option of the project, which we can exercise in 2 phases. We intend to exercise our first purchase option, which is 79% of the partnership, during the second quarter.

我們夾層計畫的第一個專案是1405 Point Street Apartments。在此架構下，我們擁有以成本價購買該專案的選擇權，且可分兩個階段行使。我們計畫於第二季行使第一階段購買選擇權，即取得合夥企業79%權益。

Now back to the balance sheet. In the fourth quarter, we raised $5.9 million through our ATM program at an average price of $15.05 per share. In 2018, we raised $66.5 million at an average share price of $14.39.

現在回到資產負債表。第四季，我們透過ATM計畫以每股平均15.05美元的價格籌資590萬美元。2018年，我們以每股平均14.39美元的價格籌資6,650萬美元。

This month we paid off the North Point Center note 1, which is our only debt maturity in 2019. We added this property to the borrowing base of our credit facility and utilized the accordion feature to increase the capacity by $25 million to a total of $355 million.

本月我們已償還 North Point Center 票據 1，這是我們在 2019 年唯一到期的債務。我們將該物業納入我們信貸融資的借款基礎，並運用增額（accordion）條款將額度提高 2,500 萬美元，使總額達到 3.55 億美元。

At quarter end, we had total outstanding debt of $701 million, including $126 million outstanding under the $150 million revolving credit facility. We continue to evaluate our exposure to higher interest rates and look for opportune times to hedge our interest rate exposure. At year-end, 100% of our debt was either fixed or hedged. This quarter we purchased a 2-year $50 million interest rate cap at 2.75%, and we entered into a $10 million swap lock on the Lightfoot Marketplace loan.

截至季度末，我們的未償還債務總額為 7.01 億美元，其中包括 1.5 億美元循環信貸融資項下已動用的 1.26 億美元。我們持續評估利率上升帶來的曝險，並尋找適當時機對利率曝險進行避險。截至年末，我們 100% 的債務皆為固定利率或已避險。本季度我們以 2.75% 的上限利率購買了一筆 2 年期、5,000 萬美元的利率上限（cap），並就 Lightfoot Marketplace 貸款簽訂了一筆 1,000 萬美元的利率交換鎖定（swap lock）。

As you've just heard, we have a lot of activity in 2019 with many moving parts. We will continue to be transparent and keep you informed. Now I'll turn the call back to Lou.

如各位剛才所聽到的，2019 年我們有許多活動在進行，且涉及多個變動因素。我們將持續保持透明並讓各位掌握最新資訊。現在我把電話交回給 Lou。

Thanks, Mike. We remain extremely bullish on the performance of our company. With an accretive pipeline starting to deliver and a solid balance sheet, we believe we are poised for significant growth over the next few years.

謝謝，Mike。我們對公司表現仍然極度看多。隨著具增益性的專案管線開始交付，加上穩健的資產負債表，我們相信未來幾年將具備顯著成長的有利條件。

When combining these factors with a dividend that has increased annually and still yields in excess of 5%, we feel that we are delivering exceptional value to our shareholders in the form of above-average growth in income. We'll be discussing the dividend at our quarterly Board of Directors meeting on February 21, and we will issue a press release shortly thereafter.

再加上股利逐年增加且殖利率仍超過 5%，我們認為我們正以高於平均的收益成長，為股東創造卓越價值。我們將在 2 月 21 日的季度董事會會議上討論股利，並將於其後不久發布新聞稿。

Thank you for your time this morning and your interest in Armada Hoffler. Operator, we would like to begin the question and answer session.

感謝各位今天上午撥冗，以及對 Armada Hoffler 的關注。接線員，我們希望開始問答環節。

The floor is now open for questions. (Operator Instructions) Our first question is coming from Dave Rodgers of Baird.

現在開放提問。（接線員指示）我們的第一個問題來自 Baird 的 Dave Rodgers。

Wanted to ask a little bit about the development pipeline, obviously $550 million with a couple of the mezz purchase options in there, but most of that completes or stabilizes between 3Q 2018 and kind of 3Q 2019. So you mentioned adding some more projects, potentially, by the end of the year, but can you kind of talk about the activity that you're seeing to kind of keep that pipeline full and continue to be able to grow the core NOI of the company?

想請教一下開發管線的情況，顯然是 5.5 億美元，其中包含幾個夾層（mezz）購買選擇權，但大部分會在 2018 年第三季到大約 2019 年第三季之間完工或達到穩定。你提到可能在年底前再加入一些專案，但能否談談你們目前看到的活動情況，以便讓管線保持充實，並持續推動公司核心 NOI 的成長？

Sure. Thanks, Dave. Yes, I mentioned last quarter that we're looking at further opportunities in Charlotte, in Charleston, in Baltimore and in Nashville, and those still remain the areas of focus. These are pretty complex multiuse projects. I still -- at this point, we really can't forecast that they are going to start, but they all look promising, which I will remind you typically means that one gets started, one gets delayed, and one gets killed. But we'll see how that develops. But there's an awful of activity out there and it's really good to see. Our development partners are very active, as well as our own development group.

當然。謝謝你，Dave。是的，我上季提到我們正在尋找夏洛特、查爾斯頓、巴爾的摩與納什維爾的進一步機會，這些仍是我們的重點區域。這些都是相當複雜的複合用途專案。目前我們仍無法預測它們是否會啟動，但看起來都很有希望；我也提醒各位，通常這代表其中一個會啟動、一個會延後、另一個會被取消。不過我們會觀察後續發展。但外部的活動非常多，看到這點真的很好。我們的開發合作夥伴非常積極，我們自己的開發團隊也同樣活躍。

And then maybe moving on to the mezz program, it's obviously -- sounds like it's kind of getting to a peak level for you guys over the next couple of years, and it's been a good contributor. But I guess what happens if something kind of goes wrong or if a developer defaults on some of these projects or can't fulfill the obligations? How do you guys foresee handling that if that were to happen?

接著談談夾層融資計畫，顯然——聽起來在未來幾年你們的規模會達到高峰，而且一直是很好的貢獻來源。但我想問的是，如果某些事情出了狀況，或某位開發商在其中一些專案上違約、或無法履行義務，會怎麼辦？若真的發生這種情況，你們預期會如何處理？

That's a great question, Dave. Let me start by saying that in almost all of these engagements our construction company is the general contractor on the project from inception, so our development group is involved in support of the prime developer on the deal. So in the event of a developer faltering, we have a built-in smooth transition process for us to fulfill the lead role. As you're aware, we have decades of experience in construction and development, which really is the key reason that we're comfortable with this whole mezzanine structure. Our security in case of default is the developer's partnership interest in the project. And that's where our underwriting comes in. We are just as meticulous in the evaluation process as we are in our projects. We underwrite the market demand, the location, the tenants, the design, the cost estimates, all of this thoroughly before we agree to fund the loan. So while we certainly wouldn't wish our partners to default, we would be fine with assuming their ownership and their obligations at what would then be a significant discount to the value of the asset. Nothing in real estate is completely bulletproof, but we believe we have a tremendous amount of protection around these transactions.

這是個很好的問題，Dave。我先說明，在幾乎所有這類合作中，我們的營造公司從一開始就是該專案的總承包商，因此我們的開發團隊會參與並支援該交易的主要開發商。因此一旦開發商出現問題，我們有內建的順暢移轉機制，可由我們接手主導角色。如你所知，我們在營造與開發方面有數十年的經驗，這也是我們對整體夾層結構感到安心的關鍵原因。若發生違約，我們的擔保品是開發商在該專案中的合夥權益。這也正是我們承作審查（underwriting）發揮作用之處。我們在評估流程上與自有專案一樣一絲不苟。在同意撥付貸款前，我們會徹底審查市場需求、地點、租戶、設計、成本估算等所有面向。因此，雖然我們當然不希望合作夥伴違約，但若真的發生，我們也能以相對於資產價值將大幅折價的條件，接手其所有權與義務。不動產沒有任何事是完全萬無一失的，但我們相信在這些交易周邊我們有非常充分的保護。

And last one for me on the retail leasing. You had a really active quarter in retail leasing. Can you kind of talk about where that activity was in terms of maybe kind of the entertainment and restaurant versus kind of inline centers, and talk about the activity that you saw there?

我最後一個問題是關於零售租賃。你們這一季在零售租賃方面非常活躍。能否談談這些活動主要集中在哪些類型——例如娛樂與餐飲，相較於一般的街舖型（inline）商場——以及你們看到的相關動能？

Yes. We're seeing the most activity in -- you kind of hit the nail on the head. It's more in restaurant and entertainment than it is in traditional retail. As you can see, our occupancy is very high at this point, and we're not seeing any cracks in the armor to speak of. But the fast-casual restaurants really are on a tear. We've signed a few here at Town Center in the last few months. We have had a number of renewals in our neighborhood centers as well as the couple of power centers that we own. And as we said, somewhat unfortunately Home Depot took advantage of the option at the end of their 20-year lease at our Broad Creek Center to buy the project from us. I think it's important to note there that that project is all on a ground lease, so effectively Home Depot has signed up for another 30 or 40 years of operations. That center's been extremely strong for day one and continues to be so.

好的。我們看到最多的活動在——你說得很到位。餐飲與娛樂的動能比傳統零售更強。如各位所見，我們目前的出租率非常高，坦白說也沒有看到任何明顯的裂痕。但快速休閒餐廳（fast-casual）確實成長迅猛。過去幾個月我們在 Town Center 這裡簽了幾家。我們在社區型商場以及我們持有的幾個大型賣場型（power center）也完成了多筆續租。另外如我們所說，有點可惜的是，Home Depot 在我們 Broad Creek Center 的 20 年租約期滿時行使選擇權，向我們買下該專案。我認為重要的是要指出，該專案全部是地上權租賃（ground lease），因此實質上 Home Depot 等於又承諾了未來 30 或 40 年的營運。該中心自第一天起就非常強勁，至今仍然如此。

Our next question is coming from John Guinee of Stifel.

我們的下一個問題來自 Stifel 的 John Guinee。

First, just out of curiosity, Interlock, do you have any equity there, one? Two, is it close enough the MARTA to be MARTA accessible? And three, I think we work as your major tenant, which is your second development with WeWork as your primary lead tenant, the first one being Wills Wharf in Baltimore.

首先，純粹好奇，Interlock 你們有沒有投入任何股權，第一點？第二，它離 MARTA 夠近、可以算是 MARTA 可達嗎？第三，我想 WeWork 是你們的主要租戶，這是你們第二個以 WeWork 作為主要主力租戶的開發案，第一個是巴爾的摩的 Wills Wharf。

Yes. I guess, John, a couple things. One, we do not have equity in that project outside the mezz loan. Obviously, we've got the collateral around that. It is not next to MARTA. It's in the mid-west part of Atlanta, which is a new thriving, booming area which has what we like in those kind of centers, is walkability, great location from that standpoint. And yes, WeWork is another major tenant at that location. And they are I think 100,000 square feet of a development that's over 300,000 square feet.

是的。John，我想有幾點。第一，除了夾層貸款之外，我們在該專案沒有投入股權。當然，我們對此有相應的擔保品安排。它不在 MARTA 旁邊。它位於亞特蘭大中西部地區，那是一個新興且蓬勃發展的區域；就我們喜歡的這類中心而言，它具備可步行性與良好區位。是的，WeWork 也是該地點的另一個主要租戶。我想他們約 10 萬平方英尺，而整個開發案超過 30 萬平方英尺。

John, just as a reminder, in both of those projects that you're referring to, the anchors in one case were Duke University, in the other case is Georgia Tech. So we're happy to have WeWork as well, but the foundation was with the credit of those 2 tenants.

John，提醒一下，在你提到的那兩個專案中，其中一個案子的主力錨定租戶是杜克大學，另一個案子則是喬治亞理工學院。所以我們也很高興能有 WeWork，但基礎其實是來自那兩位租戶的信用。

And then looking at page 14, probably Mike projected mezz interest expense of $5.5 million. What's your average balance on that mezz program, and what's the interest rate you're assuming to get to the $5.5 million as your cost of capital?

再看第14頁，Mike 可能預估了夾層利息費用為550萬美元。你們這個夾層計畫的平均餘額是多少？以及你假設的利率是多少，才能推導出550萬美元作為資金成本？

Yes. On a total balance, we expect it to peak out like I think we talked about last call, in the $145 million range or so. And that's all going to be dependent on when the payoffs come, like the Decatur Whole Foods and etc. On the cost of capital, we're using our credit facility, which is in that 4.5% to 5% range at this point in time. And the amount of interest for us that we use here for 2019 is $5.5 million, which obviously doesn't include any interest expense against the Annapolis Junction piece of that.

是的。就總餘額而言，我們預期會如同上次電話會議所談到的，最高大約到1.45億美元左右。而這完全取決於何時有償還進來，例如 Decatur Whole Foods 等等。在資金成本方面，我們使用的是我們的信用額度融資，目前大約在4.5%到5%的區間。我們在此用於2019年的利息金額是550萬美元，當然這不包含 Annapolis Junction 那一部分的任何利息費用。

And so essentially, if I'm looking at this page, essentially the $16.2 million equates to roughly $0.23 in FFO.

所以基本上，如果我看這一頁，1,620萬美元大致相當於每股約0.23美元的FFO。

Correct.

正確。

Then on page 9, I guess -- well, let's see. Where is your sources you used? Okay, this is page 11. You have a source. You have basically your target, which you hit in 2018, and then you have your sources of capital in 2019, which is sort of weighted toward the end of the year. You don't have uses here, but I'm assuming the primary uses are the net funding on One City Center and the net funding on 1405 Point. What's the net funding? If I look at page 7, I've got $99 million and $46 million. Are those the -- I'm assuming those are gross numbers, or are they net numbers?

那再看第9頁，我想——嗯，我看看。你們使用的資金來源在哪裡？好，這是第11頁。你們有資金來源。基本上你們有目標，而且你們在2018年達成了，然後你們有2019年的資金來源，時間分布上比較偏向年底。這裡沒有列資金用途，但我假設主要用途是 One City Center 的淨投入資金，以及 1405 Point 的淨投入資金。淨投入是多少？如果我看第7頁，我看到9,900萬美元和4,600萬美元。那些——我假設是總額，還是淨額？

Yes. So the main capital needs are going to be funding the development pipeline, which is Wills Wharf office, finishing up the student housing projects in Charleston. On 1405 Point and One City Center, we've already funded 100% of the equity requirements on those, so then it's just a matter of bringing those on balance sheet.

是的。所以主要的資金需求會是為開發管線提供資金，也就是 Wills Wharf 辦公案，以及完成查爾斯頓的學生住宅專案。至於 1405 Point 和 One City Center，我們已經把這兩個案子的股權出資需求100%都投入了，所以接下來只是把相關負債納入資產負債表的問題。

So essentially what you're saying, I think, is that your mezz is essentially the equity and you're going to just bring the debt on the balance sheet.

所以基本上你的意思是，我想，是你們的夾層融資本質上就是股權，而你們接下來只是把債務放到資產負債表上。

Correct, yes, except for One City Center was not a mezz project. That's a joint venture, of which we had to contribute our capital for our piece of that joint venture, which was the commercial space.

正確，是的，不過 One City Center 不是夾層專案。那是一個合資案，我們必須就合資中屬於我們的部分投入資金，也就是商業空間那一塊。

So is it safe to assume that you're going to spike up in your debt metrics in the first half of this year and then come down in the second?

那是否可以合理假設，你們今年上半年負債指標會先衝高，然後下半年再降下來？

No. Based upon our models, we're going to stay within the ranges that we have here. Will it be a little higher than fourth quarter? Yes. But will it be within our ranges? We believe so.

不會。依照我們的模型，我們會維持在這裡所列的區間範圍內。會不會比第四季稍高？會。但會不會仍在我們的區間內？我們相信會。

And then the last question is, if you look at your -- you have on page 10 $5.3 million of construction build-to-suit net profit. How much of that is your net profit on your construction business, your fee business, and how much of that is a build-to-suit, on page 10?

最後一個問題，如果你看你們——在第10頁你們有530萬美元的興建量身訂做（build-to-suit）工程淨利。其中有多少是你們營造事業、收費型業務的淨利？又有多少是 build-to-suit 的部分，在第10頁？

So in 2018, of the $6.1 million, $3.4 million of that was the build-to-suit on the sale of the distribution center. In 2019, we do not have any build-to-suit property in there. That's all third party construction.

所以在2018年，在610萬美元當中，其中340萬美元是來自配送中心出售的 build-to-suit。在2019年，我們裡面沒有任何 build-to-suit 物業。全部都是第三方工程施工。

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

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

Back to Dave's question on development pipeline, Lou, it sounded like that -- when you were answering those questions, it sounded like that the stuff that you anticipate starting in the remainder of this year are multiuse, more complex projects. Is that fair to say?

回到 Dave 關於開發管線的問題，Lou，聽起來——你在回答那些問題時，聽起來你們預期在今年剩餘時間內動工的項目是多用途、較複雜的專案。這樣說公平嗎？

That's correct. These are really exciting projects. I don't want to get too far out there because it's still -- they still are in that predevelopment phase where they still could potentially not come together. But these are large, infill CBD type projects that have multiuse which, as you guys know, is really in our wheelhouse.

沒錯。這些真的是非常令人興奮的專案。我不想講得太超前，因為它們仍處於前期開發階段，仍有可能最後無法成案。但這些都是大型、位於市中心商業區（CBD）的填充型專案，且為多用途；如各位所知，這正是我們最擅長的領域。

I mean, I guess the question there in terms of looking out on the development pipeline, I mean, basically everything except for Wills Wharf winds up completing this year. And so if you're starting in the middle or end of 2019 with complex projects that are likely to have at least 18 month probably, maybe closer to 24 month construction timetables, it seems like the development pipeline is going to ebb in 2020 just in terms of deliveries, that you're going to have a bunch of deliveries this year and then it's going to fall off. You're just going to have the one next year and then maybe some pick back up in 2021, but just wanted to make sure that I was thinking about that correctly.

我的意思是，就開發管線往前看這個問題而言，基本上除了 Wills Wharf 之外，其他幾乎都會在今年完工。所以如果你們在2019年年中或年底啟動複雜專案，而這些專案很可能至少需要18個月、也許更接近24個月的施工期，看起來2020年的開發管線在交付量上會出現回落：今年交付很多，然後就會下滑。明年你們可能只剩一個交付，然後2021年可能又會回升一些；我只是想確認我的理解是否正確。

Yes, I think that's a fair assertion. We haven't mentioned we're looking at a number of smaller projects as well that I really haven't called out. We said that our retail portfolio is going to continue to grow. Particularly our grocery anchors are very active, so I think there'll be some infill with that.

是的，我認為這樣的推論是合理的。我們也沒有提到，我們同時在看一些較小的專案，我其實沒有特別點名。我們說過我們的零售投資組合會持續成長。特別是我們的雜貨主力店非常積極，所以我認為那方面會有一些填充型開發。

But I think in 2020, as we tried to illustrate, the majority of growth is going to come from that extra $30 million worth of NOI that comes from the development pipeline stabilizing.

但我認為在2020年，正如我們試圖說明的，多數成長將來自開發管線達到穩定後所帶來的額外3,000萬美元NOI。

And then what type of IRRs are you getting on the Cosmo redevelopment currently?

那目前 Cosmo 改造案的IRR大概是多少？

I'm sorry. Could you repeat that?

不好意思。你可以再重複一次嗎？

What type of IRRs or returns are you getting on the Cosmo redevelopment now that that's stabilizing back up?

Cosmo 改造案現在回到穩定狀態之後，你們的IRR或報酬率大概是多少？

That's a great question. And I hesitate to answer because the returns are better than expected, but it's early. At the end of the day, we will have invested over $10 million in Cosmo over a couple year period. The revitalized units have come back online, and we're seeing a significant increase in rental income. We also expect that any kind of concessions will go away as well. So at the front end, it looks like a double-digit return. I'm just not ready to take that to the bank because we have to cycle through 350 units. But it certainly looks really good at this point.

這是個很好的問題。我有點猶豫要不要回答，因為目前的報酬率比預期更好，但現在還太早。最終來看，我們在幾年期間對 Cosmo 的投入會超過1,000萬美元。翻新的單位已重新投入市場，我們看到租金收入顯著提升。我們也預期任何形式的租賃優惠（concessions）都會逐步消失。所以就目前前端來看，似乎是雙位數報酬。我還不準備把這當成板上釘釘，因為我們還得把350個單位輪替完成。但就目前而言，確實看起來非常不錯。

And then in Mike's guidance, it includes ATM issuance. When you're thinking about it today, given the still decent market for asset dispositions, how do you think about raising capital in the ATM versus selling a few more retail centers to fund your capital needs?

另外，在 Mike 的指引中包含透過 ATM 發行。以你們現在的想法來看，考量到資產處分市場仍算不錯，你們如何在透過 ATM 募資與再賣出幾個零售中心以滿足資金需求之間做取捨？

We're going to continue doing like we have, Rob, and that's looking at both. If the capital markets are good, we'll get on the ATM. And I thought -- especially in the second half of last year, really pleased that we were able to sell stock and raise capital. At this point right now, the plan is to sell that one center. But certainly if the dynamics change, we will switch course.

我們會像過去一樣繼續做，Rob，也就是兩者都會看。如果資本市場狀況良好，我們就會啟動 ATM。我認為——尤其是去年下半年——我們能夠出售股票並籌集資本，真的很令人滿意。就目前而言，計畫是出售那一個中心。但如果情勢變化，我們當然會調整方向。

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

下一個問題來自 D.A. Davidson 的 Jim Lykins。

First of all, is there any color you can provide on the office leases expiring this year? Looks like you've got over 9% of the portfolio rents coming due.

首先，關於今年到期的辦公室租約，你能提供一些補充說明嗎？看起來你們有超過 9% 的投資組合租金即將到期。

So at this point, we're not anticipating any big holes in the ship. We've got some expirations toward the end of this year. It's kind of an interesting phenomena right now, Jim. We all kind of lived through the downsizing of all of the lawyers here several year ago, and then we all kind of lived through the downsizing of the investment houses and financial brokers. Now we're living through the downsizing of the schools. We have four schools here at Town Center, and each one of them is in the process of downsizing. So that's really kind of been the focus in terms of a sector. Fortunately for us, the professional services sector has really picked up strong here with architects, engineers, insurance brokers and the like. We've also got a good foothold now in technology. So I don't anticipate any large vacancies. We are going to have some holes to fill, like I said, through the downsizing of some of these schools. But it's nothing that gives us a whole lot of heartburn at this point.

就目前而言，我們不預期會出現任何重大的「船身破洞」。我們有一些到期是在今年年底附近。Jim，現在這算是一個挺有意思的現象。我們都經歷過幾年前這裡律師行業的縮編，之後也都經歷過投資機構與金融經紀商的縮編。現在我們正在經歷學校的縮編。我們在 Town Center 這裡有四所學校，而每一所都在縮編中。所以就產業別而言，這一直是我們關注的重點。對我們來說幸運的是，專業服務產業在這裡確實強勁回升，例如建築師、工程師、保險經紀等。我們在科技領域也已經建立了不錯的立足點。因此我不預期會出現大規模空置。如我所說，因為部分學校縮編，我們會有一些空間需要補租。但目前這並不會讓我們太過擔心。

And kind of the same question for retail. Is there just any commentary you can provide on what you're seeing right now with how you see what's trending in retail into the quarter and throughout 2019 right now?

零售方面也是類似的問題。你能否評論一下你們目前看到的情況，以及你們如何看待本季以及 2019 年零售趨勢的發展？

Right now we really don't have anybody under duress. I tell you, this is -- it takes constant monitoring, because even the stores that are doing reasonably well can become a problem mainly because of what's going on at a macro level in the retail industry. Our people are all over sales. And we've talked about this before on this conference call, how we've really got to stay on top of the sales in our centers. And that's really the key. In the retail center game, as long as you're tracking sales and your sales are strong, even if a tenant becomes weak, you know you can refill that spot. It's interesting the way the market continues to shift. Now we're heavily weighted to fast-casual restaurants and to discounters as well as services, and 10 years ago we were all after the higher end boutique shops. It requires constant monitoring. But as you see, our retail centers have averages over 95% for quite a long period of time. So we anticipate being able to continue at that kind of pace. And like I mentioned in my opening comments, we feel really good about the retail business the way we're approaching it. We've got a lot of optimistic grocers in tow. And as long as you keep your small shop construction in a reasonable place, these centers yield great results for many, many years.

目前我們確實沒有任何租戶處於困境。我跟你說——這需要持續監控，因為即便是表現還不錯的店家，也可能因為零售產業宏觀層面的變化而變成問題。我們的團隊非常關注銷售。我們之前在這通電話也談過，我們必須緊盯我們各中心的銷售表現。這才是關鍵。在零售中心的經營中，只要你在追蹤銷售且銷售強勁，即使某個租戶變弱，你也知道你可以把那個位置再補租出去。市場持續轉變的方式很有意思。現在我們的組合更偏重於快速休閒餐飲（fast-casual）、折扣零售商以及各類服務；而 10 年前我們追逐的則是較高端的精品店。這需要不斷監控。但如你所見，我們的零售中心在相當長一段時間內平均出租率都超過 95%。因此我們預期能夠以這樣的節奏持續下去。而且如我在開場評論中提到的，我們對於以目前方式經營零售業務感到非常有信心。我們也有許多樂觀積極的雜貨商（grocers）一路相隨。只要把小店鋪的施工量控制在合理範圍內，這些中心就能在很多很多年裡帶來很好的成果。

Labor construction costs are up for everyone across the board. I'm just wondering, sitting here right now as you look across the timeline for your development pipeline, are there any projects that kind of stick out that could be just another you feel pretty good about how that timeline looks right now?

勞務與施工成本對所有人來說都全面上升。我想請問，就你們目前檢視開發管線的時程來看，有沒有哪一些專案特別突出，讓你覺得對目前的時程安排相當有把握？

Yes, I think we're okay now. All these things are a challenge. As you correctly pointed out, Jim, the market's very tight. The market for labor is extremely tight. We're seeing schedules elongate on a regular basis. We're trying to anticipate that as much as is possible. Not anticipating any issues right now. We're got some critical deliveries coming up this year between the HII Building later on this spring, as well as the Charleston projects coming this summer. We appear to be tracking exactly where we need to be. Our construction group does a great job of staying on top of this, but it is definitely a challenge. And we saw the projects that we delivered last year took longer to fully close out, even though we made the initial dates. Just getting these things put to bed 100% has become quite a challenge. But it's what we get paid to do, and feel pretty good about where we sit.

有，我認為我們目前沒問題。這些事情都很具挑戰。正如你指出的，Jim，市場非常吃緊。勞動力市場極度緊俏。我們看到工期經常被拉長。我們正盡可能提前把這些因素納入預期。目前不預期會有任何問題。今年我們有一些關鍵交付：包括今年春末的 HII 大樓，以及今年夏天要交付的 Charleston 專案。看起來我們的進度完全符合需要達成的節點。我們的施工團隊在掌握進度方面做得非常好，但這確實是一項挑戰。我們也看到去年交付的專案，即使達成了最初的日期，最終結案（close out）仍花了更久時間。要把這些事情 100% 完整收尾，已經變得相當具挑戰性。但這就是我們拿報酬要做的事，而我們對目前的狀況感到相當有信心。

Our next question is coming from Bill Crow of Raymond James.

下一個問題來自 Raymond James 的 Bill Crow。

Lou, you talked about some of the tenant downsizing in the office sector with the lawyers and financial institutions. Have you turned any leases, renewed any leases with material expansions over the last 2 or 3 years in office?

Lou，你談到辦公室領域中律師與金融機構的一些租戶縮編。過去兩到三年在辦公室方面，你們是否有任何租約到期後重新出租（turn），或續約時出現具實質規模的擴租？

Yes. So that's what I meant about the sectors that are really performing. We've increased in the technology sector. We had a significant expansion from Mythics as well as Lumos. We expanded in the architects and engineers. You may recall that when we had to expand and relocate Kimley-Horn out of an older high-rise into the newer high-rise. Professional services is really, really doing well, and that's very fortunate for us. Both here and at Town Center, as well as at One City Center, we've got a number of prospects for the last little bit of space there, expect to be filled pretty quickly. And Wills Wharf, again, abundant prospects, and we'll see who lands first. But outside of a 2008 type event, it's been my experience over 30-some years that there is always robust sectors of the market, and you've just got to be positioned to take advantage of that. Our asset management group is really good at staying on top of these things. As you guys all know, the real estate business is very fluid. You can't -- you've got to wake up every day and anticipate where things are headed. And we don't always guess right, but I can tell you we are constantly thinking through how to gain an advantage and keep our properties strong.

有。這就是我所說那些表現非常好的產業別。我們在科技領域有所增加。Mythics 以及 Lumos 都有相當顯著的擴張。我們在建築師與工程師領域也有擴張。你可能還記得，我們曾需要把 Kimley-Horn 從較舊的高樓擴租並搬遷到較新的高樓。專業服務真的、真的表現很好，這對我們來說非常幸運。無論是在這裡與 Town Center，或是在 One City Center，我們對那裡最後一小部分空間都有不少潛在租戶，預期很快就會被填滿。Wills Wharf 也是一樣，潛在租戶很多，我們就看誰會先落定。但除了像 2008 年那樣的事件之外，以我 30 多年的經驗，市場上總是會有一些強勢的產業別，而你必須把自己定位好以便把握機會。我們的資產管理團隊非常擅長緊盯這些事情。各位也都知道，不動產業非常具有流動性。你不能——你必須每天醒來就預判事情會往哪裡走。我們不一定每次都猜對，但我可以告訴你，我們一直在思考如何取得優勢並讓我們的資產保持強勁。

On the retail front, you talked about staying on top of revenues. Maybe you can just tell us, Town Center, what happened to revenues per foot 2018 versus 2017?

在零售方面，你提到要緊盯營收。也許你可以告訴我們，Town Center 的每平方英尺營收在 2018 年相較於 2017 年發生了什麼變化？

That's a great question. And unfortunately it's all over the board, so I can't really give you a good characterization. The restaurants continue to be extremely strong, and now we are adding a few. A couple of the specialty retailers struggled. They're still here, but they've struggled. I think they're struggling nationwide. In terms of sales, Bill, I wouldn't venture -- I wouldn't want to point you in one direction or the other. I could -- depending on where we concentrate, we could paint it as positive or negative. One thing that I can say is that, at this point in time here at Town Center, I think we're seeing more retail prospects than we have in quite some time. So, the activity is really encouraging. We've signed a -- we are in negotiations for a few more leases now. We don't have a lot of vacancy, but it looks really good as far as filling it. I think this place has established itself as a great place to do business. What's really good, encouraging for me, is that not only are we seeing the national groups, but now we're getting more play from local mom and pops, good regional players that are looking at Town Center as a great place to service the greater Virginia Beach area. And that's why I think we have a lot of one of a kind stores.

這是個很好的問題。但不幸的是，情況差異很大，所以我很難給你一個好的概括。餐飲業態仍然非常強勁，而且我們現在還在新增幾家。有幾家專門零售商表現吃力。他們仍然在這裡，但確實很吃力。我認為他們在全國範圍內都在掙扎。就銷售而言，Bill，我不想冒然下結論——我不想把你引導到某一個方向。我可以——取決於我們把重點放在哪裡，我們可以把它描繪成正面或負面。但有一點我可以說的是，就目前在 Town Center 這裡，我認為我們看到的零售潛在客戶比相當長一段時間以來都多。所以，這樣的活動量真的很令人鼓舞。我們已經簽了一份——我們目前也正在就另外幾份租約進行談判。我們空置率不高，但就填補空置而言，看起來非常不錯。我認為這個地方已經建立起作為一個很適合做生意的地點的地位。對我來說真正好的、令人鼓舞的是，我們不僅看到全國性集團，現在也有更多本地的夫妻店、優質的區域型業者，把 Town Center 視為服務大維吉尼亞海灘地區的絕佳據點。這也是為什麼我認為我們有很多獨一無二的店。

I do have one for Mike, but let me follow up with that. And I don't want to ask an open-ended question, so maybe we'll try and keep it short. But can you characterize the economic trends and the vitality of the Virginia Beach market? I mean, what do you see in there that has you encouraged or discouraged about the area?

我有一個問題想問 Mike，但讓我先追問一下剛才那個。我不想問一個太開放式的問題，所以我們盡量簡短。你能否概括一下維吉尼亞海灘市場的經濟趨勢與活力？我是說，你在那裡看到哪些讓你對這個地區感到鼓舞或擔憂的地方？

I'll try not to take up too much of everybody's time. You kind of hit the nail on the head, Bill. I'm encouraged and discouraged all at once, and I'll tell you why. The area is doing really well right now. There's been a considerable uptick in defense spending after years of decline. You also may have read that the government just let a double aircraft carrier contract to HII over on the peninsula, first time in the history of our country. And so the economy here is on the rise, again, that underpinning from the port which is doing incredibly well, as well as tourism, which is certainly holding its own. And now we add a little uptick in government spending, which is really helpful. So, I'm really encouraged in what's going on right now. But I'm also as someone trying to do some things in the community, I'm part of a group that is advocating that the area try and reduce its dependence on government spending. And that's where we've got a lot of wood to chop in order to get where we need to get to.

我會盡量不占用大家太多時間。Bill，你說到重點了。我同時感到鼓舞也感到擔憂，我告訴你原因。這個地區目前表現得非常好。在多年下滑之後，國防支出出現了顯著回升。你可能也讀到政府剛在半島那邊把一份雙航母合約交給 HII，這在我國歷史上是第一次。因此這裡的經濟正在回升；同時，港口的支撐也非常強勁，旅遊業當然也維持得不錯。再加上一點政府支出回升，這確實很有幫助。所以，我對目前正在發生的事情感到非常鼓舞。但同時，作為一個想在社區推動一些事情的人，我也是一個倡議團體的一員，主張這個地區應該努力降低對政府支出的依賴。而在這方面，我們還有很多硬仗要打，才能達到我們需要到達的目標。

And then Mike, just finally for me, if I just think about your mezz loan program this year, a little over $16 million of income. You lose $4.5 million from Annapolis Junction. You lose $2 million from 1405 Point and Nexton Square. You lose call it half of a full year at the Decatur Whole Foods, $700,000. I think that gets us down about $7 million to about $8.5 million or $9 million for next year gross. I don't know what happens to that $5.5 million of expense. And is that the right way to think about it as a run rate for next year if you don't do any -- if you don't originate any more mezzanine loans?

然後 Mike，最後一個問題：如果我只看你們今年的夾層貸款（mezz loan）計畫，收入略高於 1,600 萬美元。你們會失去來自 Annapolis Junction 的 450 萬美元。你們會失去來自 1405 Point 和 Nexton Square 的 200 萬美元。你們會失去 Decatur Whole Foods 半個完整年度的收入，大約 70 萬美元。我想這會讓我們明年毛額降到少了約 700 萬美元，也就是大約 850 萬到 900 萬美元。我不確定那 550 萬美元的費用會怎麼變化。如果你們不做任何——如果你們不再承作任何新的夾層貸款，用這樣的方式把它當作明年的運行水準（run rate）來思考，是否正確？

Bill, let me start there and then I'll turn it over to Mike, as I want to try and make this clear in what I was saying when looking at the guidance there. If you look at that page 13 or whatever it was where we had the pie chart showing the makeup and you see that the other activity is in that 22%, 23% range for this year, we believe that that's going to stay pretty much static. And we believe that based on all the arrows in our quiver, based on construction activity that we're seeing, further mezzanine engagements that are shaping up, as well as more build-to-suit opportunities. So in our thinking, we believe that 2020 is going to stay at or near those levels. We just don't have things to announce at this point. Mike?

Bill，我先從這裡開始，然後我會交給 Mike，因為我想把我在看那份指引時所說的內容講清楚。如果你看第 13 頁或那一頁，我們用圓餅圖顯示組成，你會看到「其他活動」今年大約在 22%、23% 的區間，我們認為這將大致維持不變。我們之所以這麼認為，是基於我們手上所有的工具與資源，基於我們看到的施工活動、正在成形的進一步夾層融資案（mezzanine engagements），以及更多量身打造（build-to-suit）的機會。所以以我們的想法，我們相信 2020 年會維持在這些水準或接近這些水準。只是我們目前沒有事情可以對外宣布。Mike？

I don't have a lot to add to that, other than the ones that just closed here in December will certainly have more outstanding balance during -- average balance in 2020 than they will in 2019, as those ramp up during the year. As Lou said, there's activity out there on the Whole Foods. That activity seems to be picking up, and we hope to be involved in more of those coming up here later this year.

我沒有太多要補充的，除了 12 月剛完成結案的那些案子，在——隨著它們在一年中逐步放量，2020 年的未償餘額（outstanding balance）與平均餘額，肯定會高於 2019 年。如 Lou 所說，Whole Foods 那邊確實有一些活動。那個活動看起來正在升溫，我們希望今年稍晚能參與更多接下來的案子。

Yes, I neglected to mention that we're really excited about S.J. Collins and the ramp up they're seeing in the Whole Foods-Amazon portion of their business, as well as some other grocers they've become close to. I tell you, I can't -- if I haven't said it before, I can't say enough about our joint venture partners, to work with Pappas people, S.J. Collins, Michael Beatty in Baltimore, Maryland. We've got top quality developers that we are doing business with on a repeat basis in really trophy type assets. And that's where a big part of our optimism comes from.

是的，我剛才漏提了：我們對 S.J. Collins 感到非常興奮，因為他們在 Whole Foods-Amazon 這一塊業務的放量成長很明顯，另外他們也與其他一些雜貨商建立了更緊密的合作關係。我跟你說，如果我以前沒說過，我也要再說一次：我們的合資夥伴真的非常出色——與 Pappas 團隊、S.J. Collins，以及馬里蘭州巴爾的摩的 Michael Beatty 合作。我們與頂尖品質的開發商反覆合作，所做的都是非常旗艦、獎盃型（trophy type）的資產。而這也是我們樂觀情緒很大一部分的來源。

At this time, I'd like to turn the floor back over to Mr. Haddad for closing comments.

此時，我想把時間交回給 Haddad 先生作結語。

Thanks, guys. We appreciate all the time you spent this morning. It seems like it's longer than usual, so we won't keep everybody. We really appreciate the interest.

謝謝，各位。我們很感謝大家今天早上花的時間。看起來比平常久一些，所以我們就不再耽誤大家了。我們非常感謝各位的關注。

I hope that the presentation that we made helps to clarify some things in our business. Mike and I are available the rest of the day for any comments or questions you might have on a further basis. And have a great day and we hope to talk to you soon. Take care.

我希望我們所做的簡報能幫助釐清我們業務中的一些事情。Mike 和我今天剩下的時間都會在，如有任何進一步的意見或問題，歡迎提出。祝各位有美好的一天，也希望很快能再與各位交流。保重。

Ladies and gentlemen, thank you for your participation. This concludes today's conference call. You may disconnect your lines at this time. And have a wonderful day.

各位女士、先生，感謝您的參與。今天的電話會議到此結束。您現在可以掛斷電話線。祝您有美好的一天。