AH Realty Trust, Inc (AHRT) 2019 Q3 法說會逐字稿

Thank you and welcome to Armada Hoffler's Third Quarter 2019 Earnings Conference Call. (Operator Instructions) As a reminder, this conference call is being recorded today, Thursday, October 31, 2019.

感謝您並歡迎參加 Armada Hoffler 2019 年第三季財報電話會議。（接線員指示）提醒您，本電話會議將於今日（2019 年 10 月 31 日，星期四）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 Third Quarter 2019 Earnings Conference Call and Webcast. On the call this morning, in addition to myself, is Lou Haddad, CEO. The press release announcing our third quarter earnings along with our quarterly supplemental package were distributed this morning. A replay of this call will be available shortly after the conclusion of the call through December 1, 2019. The numbers to access the replay are provided in the earnings press release.

各位早安，感謝您參加 Armada Hoffler 2019 年第三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。宣布我們第三季財報的新聞稿以及季度補充資料包已於今早發佈。本次電話會議結束後不久將提供重播，並可收聽至 2019 年 12 月 1 日。重播的撥入號碼已載於本次財報新聞稿中。

For those who listen to the rebroadcast of this presentation, we remind you that the remarks made herein are as of today, October 31, 2019, and will not be updated subsequent to this initial earnings call.

對於收聽本簡報重播的聽眾，我們提醒您，本次發言內容截至今日（2019 年 10 月 31 日）為準，且在本次初次財報電話會議後將不再更新。

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. 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 disclosed in our press release this morning and the risk factors disclosed in documents we have filed with, or furnished to, the SEC.

在本次電話會議中，我們將作出前瞻性陳述，包括與我們投資組合未來表現、開發管線、收購與處分的影響、夾層融資計畫、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。提醒聽眾注意，這些陳述受某些風險與不確定性影響，其中許多難以預測且通常超出我們控制範圍。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揭露的前瞻性陳述，以及我們向美國證券交易委員會（SEC）提交或提供之文件中揭露的風險因素。

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。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。

Now I will turn over the call over 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.

謝謝你，Mike。各位早安，感謝今天加入我們。

Before we go over our operating results and update you on our other activities, I'll first comment on a topic that may be a new focus for some listening on this call, but for us at Armada Hoffler a topic that has been part of our corporate culture since our founding. Environmental sustainability, social responsibility and effective transparent governance, or ESG for short, are qualities that have been at the core of our business for many years.

在我們回顧營運結果並向各位更新其他活動之前，我先就一個主題發表看法；對於部分收聽本次電話會議的人而言，這可能是新的關注焦點，但對 Armada Hoffler 而言，這個主題自公司創立以來便一直是企業文化的一部分。環境永續、社會責任與有效且透明的公司治理（簡稱 ESG），多年來一直是我們業務的核心特質。

When Dan Hoffler founded the business some 40 years ago, he insisted that good corporate citizenship would always be a focused initiative of our organization. We sum it up in one simple motto. We built trust -- the trust of our employees, the trust of our partners, clients, subcontractors and vendors, the trust of our investors and the trust of the communities in which we work and live. Simply put, a business built on trust produces positive results for all stakeholders.

約 40 年前 Dan Hoffler 創立公司時，他堅持良好的企業公民精神必須永遠是我們組織的重點倡議。我們用一句簡單的座右銘來概括。我們建立信任——員工的信任、合作夥伴的信任、客戶的信任、分包商與供應商的信任、投資人的信任，以及我們工作與生活所在社區的信任。簡而言之，以信任為基礎的企業能為所有利害關係人帶來正向成果。

Over the years we have won numerous awards for community leadership, philanthropy and, perhaps most importantly, workplace excellence. We have consistently been ranked as a best place to work based on employee responses to numerous regional surveys. ESG is the primary reason we are able to boast of the extremely long tenure of the majority of our staff.

多年來，我們在社區領導力、慈善公益，以及或許最重要的職場卓越方面，獲得了眾多獎項。根據員工對多項區域性調查的回覆，我們一貫被評為最佳雇主之一。ESG 是我們得以自豪地表示多數員工具有極長任職年資的主要原因。

Striving to add to the greater good has produced other tangible results in the marketplace. Many of our projects have been recognized for excellence in design and sustainability, with several achieving LEED certification. Undoubtedly these ongoing efforts, combined with the transparency we offer in our dealings, have been instrumental in our selection as the development partner in over 20 public/private partnerships with various municipalities and institutions.

致力於增進整體公益，也在市場上帶來了其他可量化的成果。我們許多專案在設計與永續性方面獲得卓越肯定，其中數個取得 LEED 認證。毫無疑問，這些持續的努力，加上我們在往來交易中所提供的透明度，使我們得以被選為與各地方政府與機構合作、超過 20 項公私協力（PPP）專案的開發夥伴，並在其中扮演關鍵角色。

Early next year we will publish a comprehensive view of our long history of ESG activities, as well as new developments in these areas.

明年年初，我們將發布一份全面報告，呈現我們長期以來的 ESG 活動歷程，以及這些領域的最新進展。

In a few minutes Mike O'Hara will update you on the important highlights of the quarter. I'll first report on a couple of ongoing initiatives.

幾分鐘後，Mike O'Hara 將向各位更新本季的重要亮點。我先報告幾項正在進行的倡議。

Last quarter we announced a strategic portfolio review being led by our CIO, Jonathan Morris, with support from our President of Asset Management, Shelly Hampton, and her excellent team of asset managers. While we've become well known for routinely trimming noncore assets from our portfolio to keep it fresh and of the highest quality, this effort is more comprehensive and longer term in nature than our previous reviews.

上季我們宣布由投資長（CIO）Jonathan Morris 主導一項策略性投資組合檢視，並由資產管理總裁 Shelly Hampton 及其優秀的資產管理團隊提供支援。雖然我們一向以定期剔除投資組合中的非核心資產、以保持組合新鮮且維持最高品質而聞名，但此次工作較以往的檢視更為全面，且屬於更長期的性質。

As anticipated, we have identified several assets with an approximate value of $125 million for disposition. Some of these have been released to the market and we anticipate launching the sales effort on the rest by the end of the year. It is unlikely that any closings will occur prior to year-end. This group includes the One City Center office building anchored by Duke University, as well as several of our well-established neighborhood centers.

如先前預期，我們已辨識出數項擬處分資產，估計價值約 1.25 億美元。其中部分已推向市場，其餘我們預計在年底前啟動銷售作業。在年底前完成任何交易交割的可能性不高。此資產組合包括由杜克大學（Duke University）作為主要承租戶的 One City Center 辦公大樓，以及我們數個成熟的鄰里型商業中心。

I'll reiterate here that we are very comfortable with our current portfolio and its multiyear performance has been stellar. This is not a repositioning effort. It is simply a continuation of our long-established recycling strategy that we use to achieve the most efficient allocation of capital to maximize the growth and stability of the company. We believe that recycling capital to create value versus increasing the share count to simply increase size is a strategy that will best serve investors over the long term. Some of the anticipated proceeds may be used for balance sheet purposes to help fund the next development pipeline. Most will be used to purchase higher-growth assets through 1031 exchanges.

我在此重申，我們對目前的投資組合非常有信心，其多年表現十分亮眼。這不是一項重新定位的行動。這只是延續我們長期既有的資本回收再投資策略，以達成最有效率的資本配置，並最大化公司的成長與穩定性。我們相信，透過資本回收再投資來創造價值，而非僅為了擴大規模而增加流通股數，將是長期最能服務投資人的策略。部分預期所得款項可能用於資產負債表相關目的，以協助資助下一波開發管線。大部分將透過 1031 交換購買成長性更高的資產。

That said, please bear in mind that the decision to market an asset is not necessarily a decision to sell that asset. We are very comfortable owning these properties. So if we feel any one in particular is not receiving appropriate value from the market, we will not transact on that property. We expect to give you further clarification on this initiative with next quarter's results.

話雖如此，請記住，決定將某項資產推向市場，並不必然代表決定出售該資產。我們非常樂於持有這些不動產。因此，若我們認為市場對某一項資產未給予適當價值，我們將不會就該資產進行交易。我們預期在下季財報結果中，將就此倡議提供更進一步的說明。

Secondly, we previously reported that we viewed the pending expiration of the 84,000 square foot Dick's lease at the Town Center of Virginia Beach as a major opportunity. Subsequently a number of entertainment concepts as well as back-office users expressed interest in the space. As we announced yesterday, we decided to lease the space to Apex Entertainment. This New-England-based group has proven to be creative and savvy operators. We believe that their facility will complement the existing entertainment and dining choices at our center. The intent is that Apex Entertainment, with its multiple family-friendly attractions, will further expand the already diverse customer base at Town Center. As we suggested earlier, the redevelopment and build-out of the facility will last through the better part of next year and we do not expect an appreciable income contribution during 2020.

第二點，我們先前曾表示，維吉尼亞海灘 Town Center 內 84,000 平方英尺的 Dick's 租約即將到期，我們視之為一項重大機會。其後，多個娛樂概念業者以及後勤辦公（back-office）使用者對該空間表達興趣。如同我們昨日宣布的，我們決定將該空間出租給 Apex Entertainment。這家以新英格蘭為基地的團隊已證明其具備創意且經營能力出眾。我們相信其設施將與本中心既有的娛樂與餐飲選擇相互補強。我們的目標是，Apex Entertainment 憑藉多項適合家庭的吸引設施，將進一步擴大 Town Center 既有且多元的客群。如我們先前所提，該設施的改造與裝修工程將持續至明年大部分時間，因此我們預期 2020 年不會有顯著的收益貢獻。

Most of you have seen in this morning's earnings release that we reported $0.30 of normalized FFO per share this quarter, which was slightly ahead of our expectations. Perhaps more importantly, the core portfolio continues to show robust performance with increases in renewal spreads, occupancies and same-store NOI across all property sites. This is the sixth consecutive quarter of increasing same-store NOI. High occupancy and steadily increasing income have long been hallmarks of our portfolio and we expect these trends to stay consistent over the long term. Given the strength of our properties, year-to-date acquisition activity and the stabilization of several pipeline projects, our current projections show a double-digit increase in portfolio NOI in 2020.

各位大多已在今天上午的財報新聞稿中看到，我們本季每股標準化 FFO 為 0.30 美元，略高於我們的預期。更重要的是，核心投資組合持續展現強勁表現，所有物業據點的續租價差、出租率與同店 NOI 均有所提升。這已是同店 NOI 連續第六季成長。高出租率與穩步上升的收入長期以來一直是我們投資組合的標誌，我們預期這些趨勢在長期內將保持一致。鑑於我們物業的強勁表現、年初至今的收購活動，以及多個管線專案的穩定化，我們目前的預測顯示 2020 年投資組合 NOI 將出現兩位數成長。

Please bear in mind, as we have previously said, we expect lower mezzanine income in 2020, resulting in moderate earnings growth versus the 14% increase we anticipate this year. While the ancillary income from third-party construction fees and mezzanine interest will continue to be an important part of our business, our primary focus remains on increasing NAV through amassing a top-quality portfolio. This strategy has led to impressive returns over the past several years and we believe we can continue to reward shareholders with outperformance in the future.

請記住，正如我們先前所說，我們預期 2020 年夾層收入將較低，因此相較於我們預期今年 14% 的增幅，獲利成長將較為溫和。雖然來自第三方施工費用與夾層利息的附屬收入仍將是我們業務的重要部分，但我們的首要重點仍是透過累積頂級品質的投資組合來提升 NAV。此策略在過去數年帶來亮眼報酬，我們相信未來仍能持續以優於同業的表現回饋股東。

As many of you know, the majority of our current development pipeline has been delivered and the properties are well on their way to stabilization. In fact, the 3 multifamily projects delivered in the last year, 1405 Point in Baltimore, Premier in Virginia Beach and Greenside in Charlotte have all reached stable occupancy.

如各位所知，我們目前開發管線中的大部分已交付，且物業正穩步邁向穩定化。事實上，過去一年交付的 3 個多戶住宅專案——巴爾的摩的 1405 Point、維吉尼亞海灘的 Premier，以及夏洛特的 Greenside——皆已達到穩定出租率。

More recently, we delivered Hoffler Place, the first of our student housing projects in Charleston. That facility opened in its first year at over 85% leased, which is somewhat higher than we anticipated. We are also in negotiations with a national retailer that we expect will occupy the majority of the ground-floor retail space. This convenience retailer should give the facility a tremendous advantage over its peers in attracting students. As we reported last quarter, the second Charleston student housing project, Summit Place on Meeting Street, remains under construction while we gear up for the fall leasing season. This project will be open for the fall of 2020 semester.

近期我們交付了 Hoffler Place，這是我們在查爾斯頓的首個學生住宅專案。該設施開業第一年出租率即超過 85%，略高於我們的預期。我們也正與一家全國性零售商洽談，預期其將承租大部分一樓零售空間。這家便利型零售商應能在吸引學生方面，讓該設施相較同業具備顯著優勢。如同我們上季所報告，查爾斯頓第二個學生住宅專案——位於 Meeting Street 的 Summit Place——仍在施工中，我們正為秋季招租旺季做準備。該專案將於 2020 年秋季學期開放。

Construction continues on the Wills Wharf office building at the Inner Harbor in Baltimore. We are expecting an on-time delivery toward the end of the first quarter. Two recently signed leases have brought total preleasing to nearly 70%. This project, in concert with our adjacent James Street Wharf building and the apartments at 1405 Point give us a critical mass of trophy-quality properties in this highly sought after submarket at the Inner Harbor of Baltimore. We intend to continue building out Harbor Point with our partners at Beatty Development into a world-class, mixed-use destination.

巴爾的摩內港的 Wills Wharf 辦公大樓仍在持續施工。我們預期將於第一季末如期交付。近期簽署的兩份租約使預租率提升至接近 70%。該專案結合我們相鄰的 James Street Wharf 大樓以及 1405 Point 的公寓，使我們在巴爾的摩內港這個極受青睞的次市場中，形成具關鍵規模的頂級（trophy-quality）物業群。我們計畫與 Beatty Development 的合作夥伴持續推進 Harbor Point 的開發，打造世界級的複合式目的地。

Nexton Square, a lifestyle center where we hold the mezzanine loan and discounted purchase option, is in the greater Charleston market. Although construction won't be completed until early next year, the first handful of tenants have opened and leasing is over 90%. Due to the mezzanine structure on this project, along with our discounted purchase option, we anticipate using some of the disposition proceeds from the expected asset sales I mentioned earlier in a 1031 exchange for this property.

Nexton Square 是我們持有夾層貸款並擁有折價購買選擇權的生活風格中心，位於大查爾斯頓市場。雖然施工要到明年初才會完成，但首批幾家租戶已開業，整體出租率已超過 90%。由於該專案的夾層結構以及我們的折價購買選擇權，我們預期將把我先前提到的預期資產出售所得中的部分處分款，透過 1031 交換用於取得該物業。

Southern Post, the mixed-use project in Roswell, Georgia that we announced last quarter, is the latest addition to our development pipeline and is on track to commence construction in the spring of next year. This $95 million infill project located in a fast-growing area of the Atlanta MSA has already received significant tenant interest from office users, retail concepts and apartment renters, despite being nearly 2 years from completion.

我們在上季宣布的喬治亞州羅斯威爾（Roswell）複合式專案 Southern Post，是我們開發管線中的最新加入者，並按計畫將於明年春季動工。這個位於亞特蘭大都會統計區（MSA）快速成長地帶的 9,500 萬美元都會填充（infill）專案，儘管距離完工仍近 2 年，已獲得辦公使用者、零售概念與公寓租戶的高度興趣。

Our development group is hard at work underwriting a number of new opportunities. Although deal flow is at an all-time high, we remain committed to keeping our new development run rate in the $200 million range over an 18-month timeframe. This discipline helps to ensure that only the most promising projects are selected for investment. Currently a couple of mixed-use urban infill projects similar in size and nature to Southern Post will likely be the next projects to be announced, hopefully by year-end.

我們的開發團隊正全力投入，對多個新機會進行承作評估（underwriting）。儘管案源量創歷史新高，我們仍致力於在 18 個月期間內，將新開發的執行速度（run rate）維持在 2 億美元左右。這項紀律有助於確保只有最具潛力的專案才會被選入投資。目前有幾個與 Southern Post 在規模與性質相近的複合式都會填充專案，可能會是下一批宣布的專案，希望能在年底前公布。

On the redevelopment front the upgrade to the units at The Cosmopolitan apartments in Town Center continues to receive rave reviews. Newly refreshed apartments are leasing at a 10% premium to the same unimproved units. Our other project currently under redevelopment, Columbus Village I, is well underway and will bring 3 new tenants to the region -- Steak Shack, which opened earlier this year; Barnes & Noble's new concept; and Cava. In the first quarter of next year we will begin redevelopment for Apex Entertainment in the 84,000 square foot retail space currently occupied by Dick's Sporting Goods here in [downtown]. This ability to attract new-to-market tenants gives further proof that Town Center is the premier mixed-use destination in the region.

在改造（redevelopment）方面，Town Center 的 The Cosmopolitan 公寓單位升級持續獲得高度好評。新翻新的公寓租金較同樣但未改善的單位高出 10%。我們另一個正在改造的專案 Columbus Village I 進展順利，將為該地區帶來 3 個新租戶——Steak Shack（今年稍早已開業）、Barnes & Noble 的新概念店，以及 Cava。明年第一季，我們將在目前由 Dick's Sporting Goods 於此處 [downtown] 所承租的 84,000 平方英尺零售空間，開始為 Apex Entertainment 進行改造。能吸引首次進入本市場的新租戶，進一步證明 Town Center 是該地區首屈一指的複合式目的地。

As development has become a bigger part of our business we added expanded disclosures, starting with this quarter's Supplemental and going forward. We intend to show that the capital we invest in redevelopment will produce yields that rival, if not exceed, those of our ground-up developments with even less risk.

隨著開發在我們業務中的比重提高，我們自本季的補充資料（Supplemental）起並在未來持續，新增並擴充相關揭露。我們希望展現：我們投入於改造的資本所產生的收益率，將可與（甚至超越）我們從零開始開發（ground-up development）的收益率，同時風險更低。

The construction group continues to perform at a very high level. On-time completion of Hoffler Place highlighted the quarter. We also continue to track scheduled completions for the rest of the development pipeline currently underway. The value of controlling the construction of our development properties cannot be overstated. Offering dependable delivery dates to demanding tenants gives us a meaningful advantage over our peer group.

施工團隊持續維持非常高水準的表現。Hoffler Place 的如期完工是本季亮點。我們也持續追蹤目前進行中的其餘開發管線專案之預定完工時程。掌控我們開發物業的施工，其價值再怎麼強調都不為過。能向要求嚴格的租戶提供可靠的交付日期，使我們相較同業具備實質優勢。

Similarly, control of the construction process gives us the confidence to pursue the mezzanine lending strategy that has led to significant cash generation, thereby reducing our reliance on the capital markets to fund our portfolio growth.

同樣地，掌控施工流程也讓我們有信心推進夾層放款策略；該策略已帶來可觀的現金創造，從而降低我們對資本市場為投資組合成長提供資金的依賴。

Reliable construction timeframes are also a large factor in our team's selection by third-party clients on a repeat basis, which solidifies the steady fee income that we have enjoyed for a number of years. Third-party contract backlog stands at $173 million. With several potential engagements in the pre-construction phase, we are anticipating an outstanding year in this division for 2020.

可靠的施工時程也是我們團隊能被第三方客戶反覆選用的重要因素，進一步鞏固我們多年來享有的穩定費用收入。第三方合約在手訂單（backlog）為 1.73 億美元。隨著多個潛在合作案正處於施工前（pre-construction）階段，我們預期 2020 年該事業部將有非常出色的一年。

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 40 years and investors can count on this to remain our primary focus. As the company's largest equity holder, a position we maintain despite a nearly fourfold increase in our market cap since inception, management will continue to operate a business model that includes a variety of deal structures.

請記得，Armada Hoffler 首先且最重要的是一家機會型房地產公司，運用多元策略來提升獲利能力並創造價值。這些一直是我們 40 年來的核心信念，投資人可以相信這仍將是我們的首要重點。作為公司最大的股權持有人——儘管自成立以來我們的市值已接近成長四倍，我們仍維持此一持股地位——管理團隊將持續採行包含多種交易結構的商業模式來經營公司。

We are extremely optimistic about the company's prospects for the rest of 2019, as well as our ability to deliver on our promises over a multiyear timeframe. As we look forward we feel strongly that our investors will continue to realize great value creation well into the future.

我們對公司在 2019 年剩餘期間的前景，以及在多年期時間框架內兌現承諾的能力，感到極為樂觀。展望未來，我們堅信投資人將在未來很長一段時間內持續實現可觀的價值創造。

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

此時我將把電話會議交給 Mike，請他討論我們第三季的業績。

Thanks, Lou. Today I want to cover the highlights of the quarter, thoughts on our balance sheet and our 2019 guidance.

謝謝你，Lou。今天我想說明本季的重點、我們對資產負債表的看法，以及我們對 2019 年的指引。

This morning, we reported FFO of $0.29 and normalized FFO of $0.30 per share for the third quarter. The largest difference between these 2 metrics is a noncash mark-to-market adjustment relating to our hedging activities.

今天早上，我們公布第三季每股 FFO 為 0.29 美元、每股標準化 FFO 為 0.30 美元。這兩項指標之間最大的差異，來自與我們避險活動相關的非現金按市價評價（mark-to-market）調整。

Our core operating portfolio occupancy for the third quarter remains high at 97%, with both office and retail at 97% and multifamily at 96%.

我們第三季核心營運投資組合的出租率仍維持在高檔 97%，其中辦公與零售皆為 97%，多戶住宅為 96%。

Same-store NOI was impressive again this quarter with all property types positive for the quarter and for the year. This is the sixth consecutive quarter of positive same-store NOI growth. GAAP was positive 6.3% and cash was positive 6.4%. Most significantly, our multifamily GAAP same-store NOI was positive 16%. The majority of the increase relates to our JHU student housing asset, where rents were increased by nearly 15% and higher summer occupancies since the transitioning to 12-month leases.

本季同店 NOI 再次表現亮眼，所有物業類型在本季與全年均為正成長。這是同店 NOI 連續第六季呈現正成長。GAAP 口徑成長 6.3%，現金口徑成長 6.4%。最值得注意的是，我們多戶住宅的 GAAP 同店 NOI 成長 16%。增幅主要來自我們的 JHU 學生宿舍資產，租金上調近 15%，且自轉為 12 個月租約後，暑期入住率提高。

Office and retail same-store NOI were also strong this quarter. Retail GAAP was positive 4.3% and cash was positive 3.7%. Office GAAP was positive 4.4% and cash was positive 16%. And for the trifecta, GAAP and cash releasing spreads were positive for both retail and office. GAAP was positive 6.2% and cash was positive 3.9%. All these portfolio metrics demonstrate why Lou said we are very comfortable with our current portfolio.

辦公與零售的同店 NOI 本季也同樣強勁。零售 GAAP 口徑成長 4.3%，現金口徑成長 3.7%。辦公 GAAP 口徑成長 4.4%，現金口徑成長 16%。此外，作為「三冠王」，零售與辦公在 GAAP 與現金口徑的續租租金價差（leasing spreads）皆為正。GAAP 口徑為正 6.2%，現金口徑為正 3.9%。所有這些投資組合指標都說明了為何 Lou 表示我們對目前的投資組合非常有信心。

On the construction front, we reported segment gross profit in the third quarter of $1.2 million on revenue of $27.6 million. At the end of the quarter the company had a third-party construction backlog of $173 million.

在營建方面，我們第三季營建分部的毛利為 120 萬美元，營收為 2,760 萬美元。截至季末，公司第三方營建在手訂單（backlog）為 1.73 億美元。

Now for an update on our mezzanine program. The Decatur Whole Foods Center loan was paid off in the third quarter. This was a very successful project for all involved. The developer sold it [in an asset] at attractive cap rates and we made a profit of $3.4 million on a loan that was outstanding for 26 months.

接著更新我們的夾層融資（mezzanine）計畫。Decatur Whole Foods Center 貸款已於第三季清償。這對所有參與者而言都是非常成功的專案。開發商以具吸引力的資本化率（cap rate）出售該資產，而我們在一筆存續 26 個月的貸款上獲利 340 萬美元。

The Interlock projects in Atlanta are well under way and we anticipate fully funding these loans by year-end and expect the balances to remain outstanding well into 2021.

亞特蘭大的 Interlock 專案進展順利，我們預期在年底前完成這些貸款的全額撥款，並預期其餘額將持續未清償至 2021 年。

Timing of the Annapolis Junction loan payoff changed this past quarter. Our partner decided to sell the asset and offers started coming in this past week. With expected closing early next year, we are working on a loan extension.

Annapolis Junction 貸款的清償時點在本季有所變動。我們的合作夥伴決定出售該資產，而本週開始收到出價。由於預期將於明年初完成交割，我們正著手辦理貸款展期。

Now turning to our balance sheet. Over the past quarter, we have completed most of our 2019 capital plan and we believe we are well positioned going into 2020.

接著談談我們的資產負債表。在過去一季，我們已完成 2019 年資本計畫的大部分內容，並認為在邁入 2020 年時我們已具備良好定位。

Our 2019 guidance issued in February consists of the following to achieve our leverage target for the year. First, the disposition of our grocery- anchored shopping center. During the quarter we closed on the sale of the Lightfoot Harris Teeter Center for $30 million, representing a 5.8 cap rate. Second, as I just discussed, Decatur Whole Foods Center was paid off and the Annapolis Junction loan is expected to be paid off early next year. And third, we anticipated raising $50 million through the ATM program in 2019. With the stock trading at all-time highs and above consensus NAV this past quarter, we took advantage of these favorable market conditions. During the quarter we raised $34.6 million at an average price of $17.72 and in October we raised another $9.9 million at an average price of $18.14. Year-to-date we have raised $82.7 million at an average price of $16.48. If AHH continues to trade at these levels, we will continue to be active with the ATM program. Updated guidance includes raising a total of $95 million in 2019.

我們在 2 月發布的 2019 年指引，包含以下事項以達成年度槓桿目標。第一，處分我們的雜貨店主力（grocery-anchored）購物中心。本季我們完成出售 Lightfoot Harris Teeter Center，售價 3,000 萬美元，對應 5.8 的資本化率。第二，如我剛才所述，Decatur Whole Foods Center 已清償，而 Annapolis Junction 貸款預計將於明年初清償。第三，我們原預期於 2019 年透過 ATM 計畫募資 5,000 萬美元。由於本季股價交易於歷史高點且高於市場一致預估的 NAV，我們把握了這些有利的市場條件。本季我們以平均價格 17.72 美元募得 3,460 萬美元，10 月又以平均價格 18.14 美元再募得 990 萬美元。年初至今我們已以平均價格 16.48 美元募得 8,270 萬美元。若 AHH 持續在此水準交易，我們將持續積極運用 ATM 計畫。更新後的指引包含 2019 年合計募資 9,500 萬美元。

In addition, in the second quarter we raised $63 million through our first preferred equity offering. We think preferred is a good source of capital, but limited to 10% or so of our equity. We now have permanent capital at a fixed rate of 6.75%, which we believe will be less expensive than our common stock over time. We also have a number of new, well respected institutional investors who invested in the company for the first time.

此外，在第二季我們透過首次優先股權（preferred equity）發行募得 6,300 萬美元。我們認為優先股是良好的資金來源，但占我們股權的比例大致以 10% 左右為限。我們現在擁有固定利率 6.75% 的永久性資本，我們相信長期而言其成本將低於普通股。我們也新增了多家備受尊敬的機構投資人，首次投資本公司。

As Lou said, we are evaluating a number of new development opportunities, the first, Southern Post in Roswell, Georgia, which was announced during the quarter. We acquired the land last week, with construction expected to begin in the spring. The other development opportunities that we are underwriting will not begin construction until well into 2020. As is typical with development projects, the initial capital requirements are modest and ramp up during the construction schedule.

如 Lou 所說，我們正在評估多項新的開發機會；第一個是喬治亞州 Roswell 的 Southern Post，已於本季宣布。我們上週已取得土地，預計於春季開始動工。我們正在承作評估（underwriting）的其他開發機會，將不會在 2020 年相當後期才開始施工。如同開發案的常態，初期資本需求較小，並會在施工進度中逐步增加。

We believe our execution of our 2019 capital plan reflects management's commitment to managing the balance sheet and leverage as we have in the past, with core debt to core EBITDA in the mid-6x range.

我們認為 2019 年資本計畫的執行，反映管理團隊一如既往對資產負債表與槓桿管理的承諾，核心負債對核心 EBITDA 維持在 6 倍中段水準。

We added several new metrics in the supplemental package last quarter, reflecting preferred equity, including additional leverage metrics and fixed-charge coverage ratios.

我們在上季的補充資料包中新增了數項指標，以反映優先股權，包括額外的槓桿指標與固定費用覆蓋率（fixed-charge coverage ratios）。

This quarter we made another change to the core EBITDA calculation due to the new GAAP REIT standard. We are the [leasee] on 2 ground leases, which under this new standard are considered financed leases. This requires the ground lease payments to be treated similar to loan payments, with most of the payment classified as interest expense and therefore are not including rental expenses or EBITDA. In our new core EBITDA calculations we unwind this GAAP treatment and reflect the actual ground lease payment in EBITDA. We believe it is appropriate even though it's detrimental to our leverage calculation.

本季由於新的 GAAP REIT 準則，我們也對核心 EBITDA 的計算做了另一項調整。我們在 2 份地租（ground lease）中為承租方，依新準則這些被視為融資租賃（financed leases）。這要求地租付款需類似貸款付款處理，其中大部分付款被歸類為利息費用，因此不會納入租金費用或 EBITDA。在我們新的核心 EBITDA 計算中，我們會回轉（unwind）此 GAAP 處理方式，並在 EBITDA 中反映實際的地租付款。我們認為這樣做是適當的，即使這會對我們的槓桿計算不利。

This month, we closed on a amendment to our unsecured credit facility, which extends the maturity of the revolver portion to January 2024 and the term loan to January 2025. This also includes some minor changes to loan covenants and the credit spreads are reduced by 5 to 15 basis points, depending on leverage.

本月，我們完成對無擔保循環信用額度的修訂，將循環額度部分的到期日延長至 2024 年 1 月，並將定期貸款延長至 2025 年 1 月。修訂亦包含對貸款契約條款（covenants）的一些小幅調整，且信用利差依槓桿水準下調 5 至 15 個基點。

We've also been working on our 3 2020 loan maturities. We signed an application with a life company for a 10-year, $34 million loan with the interest rate fixed at 3.17% for Greenside Apartments. This week we closed on a 5-year loan extension with the current lender, with the interest rate lowered to LIBOR plus 1.55% for the Premier. And finally, we have proposed terms from the existing lender on 1405 Point. And all the loan closes are due in the next couple of weeks.

我們也一直在處理 2020 年到期的 3 筆貸款。我們已向一家壽險公司簽署申請，為 Greenside Apartments 辦理一筆 10 年期、3,400 萬美元的貸款，利率固定為 3.17%。本週我們與現有貸方完成一項 5 年期的貸款展延，Premier 的利率下調至 LIBOR 加 1.55%。最後，我們已收到現有貸方就 1405 Point 提出的條件。所有貸款的結案預計都在接下來幾週內完成。

At the end of the quarter we had total outstanding debt of $952 million, including $110 million outstanding on the revolving credit facility. At quarter end, 85% of our debt was hedged or fixed. With interest rates falling we have been patient with buying new interest rate caps and entering the swap lot.

在本季末，我們的未償還總債務為9.52億美元，其中循環信用額度項下未償還金額為1.10億美元。在季末，我們85%的債務已進行避險或為固定利率。在利率下行的情況下，我們對於購買新的利率上限（interest rate caps）及進入利率交換（swap）部位一直保持耐心。

Now I'd like to go through the details of updated 2019 guidance. The assumptions of the guidance are raising a total of $95 million through the ATM program in 2019, assuming favorable market conditions. Interest expense is calculated on the Forward LIBOR Curve, which forecasts LIBOR, at 1.74% at year-end.

接下來我想說明更新後的2019年財測指引細節。該指引的假設為：在2019年透過ATM計畫募集合計9,500萬美元，並假設市場條件有利。利息費用係依據遠期LIBOR曲線計算；該曲線預測LIBOR於年末為1.74%。

Our updated 2019 normalized FFO-per-share guidance is $1.16 to $1.18 per share, predicated on the following updated components -- full NOI in the $102.8 million to $103.2 million range; third-party construction gross profit in the $4.5 million to $5.1 million range; general and administrative expenses in the $12.3 million to $12.6 million range; D&A was increased this quarter due to legal, accounting and IT expenses; interest income from our mezzanine finance program in the $16.3 million to $17.6 million range, which is net of $5.5 million of interest expense and also includes the remaining $4.5 million recognized in the amortization of the Annapolis Junction apartments purchase option; interest expense in the $25.1 million to $25.6 million range, which does not include interest expense related to the mezz program; and 72.6 million weighted shares outstanding.

我們更新後的2019年常態化每股FFO指引為每股1.16至1.18美元，係基於以下更新後的組成項目——完整NOI介於1.028億至1.032億美元；第三方建造毛利介於450萬至510萬美元；一般及行政費用介於1,230萬至1,260萬美元；本季折舊與攤銷（D&A）因法律、會計及IT費用而上調；夾層融資計畫（mezzanine finance program）的利息收入介於1,630萬至1,760萬美元（已扣除550萬美元利息費用，並包含安納波利斯交匯處（Annapolis Junction）公寓購買選擇權攤銷中剩餘450萬美元的認列）；利息費用介於2,510萬至2,560萬美元（不包含與mezz計畫相關的利息費用）；以及加權流通股數為7,260萬股。

In January 2020, we have another new GAAP standard will go into effect, currently expected credit losses, which is known as CECL. This new credit standard requires companies to establish a loss reserve on most receivables and loans. In establishing these reserves companies need to estimate the impact of future business cycles that would have an impact on loans. We are working through how to apply this new standard, purchasing external loan default data and assessing the effect on our financial statements. While we do not know the impact at this time, we expect it will reduce our 2020 reported mezz interest income.

在2020年1月，另一項新的GAAP準則將生效，即「預期信用損失」（currently expected credit losses），稱為CECL。這項新的信用準則要求公司對大多數應收款與放款建立損失準備。在建立這些準備時，公司需要估計未來景氣循環對放款可能造成的影響。我們正在研議如何適用此新準則，採購外部貸款違約資料並評估其對我們財務報表的影響。雖然目前尚不清楚其影響程度，但我們預期它將降低我們2020年所報導的mezz利息收入。

This makes 3 years in a row with a significant new GAAP standard which we believe for our business makes the financial statements less relevant. We believe adjustments we are making to GAAP measures in arriving at normalized FFO and adjusted EBITDA results in better [metrics] to understand our business. There have been a couple of articles recently in The Wall Street Journal discussing that most companies are now defining their own non-GAAP performance metrics. Although these articles are very critical of this practice, we believe it is necessary and appropriate. Under GAAP, as discussed, our ground lease payments are now treated as amortization and interest expense and therefore are not included in NOI or EBITDA, which is not consistent with how real estate is valued. With this change in GAAP it increases NOI and therefore creates the illusion of increased value of our properties. Changes in GAAP do not make our real estate any more or less valuable.

這已是連續第3年出現重大的新GAAP準則；我們認為就我們的業務而言，這使財務報表的相關性降低。我們相信，在計算常態化FFO與調整後EBITDA時對GAAP衡量指標所做的調整，能提供更好的[指標]以理解我們的業務。《華爾街日報》近期有幾篇文章討論，多數公司現在都在自行定義其非GAAP績效指標。儘管這些文章對此作法相當批判，我們認為這是必要且適當的。如前所述，依GAAP規定，我們的地租（ground lease）付款現在被視為攤銷與利息費用，因此不納入NOI或EBITDA，這與不動產估值方式並不一致。此GAAP變更會提高NOI，因而造成我們資產價值增加的假象。GAAP的變更並不會讓我們的不動產變得更有價值或更沒有價值。

While it's too early for our 2020 guidance, I want to give some insight into next year. As in the past, earnings growth has been lumpy with the delivery of development projects, but with earnings growth over the long term. 2020 will be one of those years where growth slows versus the 14% growth in 2019.

雖然現在談2020年指引仍為時過早，但我想提供一些對明年的看法。如同以往，獲利成長會隨開發案交付而呈現不均勻（lumpy），但長期而言仍會成長。2020年將是成長放緩的一年，相較於2019年的14%成長。

Some of our other 2020 earnings headwinds are we are expecting 3 of the current mezz loans to be paid off during the first half of 2020. This reduces the outstanding balance significantly for most of the year. In addition, [interest] income will be lower due to the absence of amortization of the $4.5 million in the Annapolis Junction purchase option; the 84,000 square feet Dick's space being vacant for at least 6 months during renovations; the (inaudible) student housing real estate taxes are increasing by $600,000 because of the expiration of the real estate tax abatement. This will also have a significant effect on same-store NOI.

我們在2020年獲利方面的其他逆風包括：我們預期目前的3筆mezz貸款將在2020年上半年償還。這將使大部分年度期間的未償餘額顯著降低。此外，[利息]收入也會因缺少安納波利斯交匯處購買選擇權4,500萬美元的攤銷而降低；Dick's 84,000平方英尺的空間在整修期間至少有6個月為空置；以及（聽不清）學生住宅的不動產稅因不動產稅減免到期而增加60萬美元。這也將對同店NOI造成顯著影響。

As discussed earlier, we expect to have raised approximately $95 million under the ATM program this year. These extra shares will be dilutive to 2020 earnings. At this time we do not know the earnings impact of our asset recycling, but expect it to be a drag on 2020 earnings. And lastly, as discussed, the new GAAP standard, CECL, will reduce our reported net income next year.

如先前所述，我們預期今年透過ATM計畫募集約9,500萬美元。這些新增股份將對2020年獲利造成稀釋。目前我們尚不清楚資產汰換／再循環（asset recycling）對獲利的影響，但預期將拖累2020年獲利。最後，如前所述，新的GAAP準則CECL將降低我們明年所報導的淨利。

After an expected 14% increase in earnings this year, our focus for 2020 will be concentrating on enhancing portfolio quality and increasing NAV.

在今年預期獲利成長14%之後，我們2020年的重點將放在提升投資組合品質並提高NAV。

Now I'll turn the call back to Lou.

現在我把電話交回給Lou。

Thanks, Mike. As some of you already know, Mike and I will not be attending the NAREIT conference next week. We are at a critical juncture on several pipeline and unannounced developments which require our presence for final negotiations, loan closings and lease executions. The timing required for these agreements makes travel to the West Coast for the better part of a week not in the best interests of the company.

謝謝，Mike。如各位部分人士已經知道的，Mike和我下週不會出席NAREIT年會。我們正處於數個管線中及尚未公布之開發案的關鍵時點，需要我們親自參與最後談判、貸款交割與租約簽署。這些協議所需的時程，使得前往西岸出差將近一週並不符合公司的最佳利益。

We're happy to take your questions on this issue or any other topic this morning. Operator, we're ready to start the question-and-answer.

今天早上我們很樂意就此議題或任何其他主題回答各位的問題。接線生，我們準備開始問答。

(Operator Instructions) Your first question comes from Dave Rodgers from Baird.

（接線生指示）第一個問題來自Baird的Dave Rodgers。

Thanks for the detail in the prepared comments. Lou, wanted to start on the development side. You just kind of touched on it at the end in your NAREIT comments. But you said you've got a record level of kind of activity in the pipeline, but also that you wanted to limit it to the $200 million. So curious, one, on what you're seeing in terms of kind of more color on what's out there. Are you seeing compression in the development yield due to the amount of competition that's out there? And then maybe a little more color on the $200 million soft cap that you kind of mentioned over that rolling period.

感謝在事先準備的發言中提供這麼多細節。Lou，我想先從開發面談起。你在NAREIT相關評論的最後稍微提到。你說你們的管線活動量創新高，但同時也希望把規模限制在2億美元。所以我好奇，第一，想請你更具體說明你們看到的外部機會狀況。由於競爭激烈，你們是否看到開發收益率（development yield）被壓縮？另外，也請多談談你提到的在那個滾動期間內2億美元的軟性上限（soft cap）。

Sure. Well, first of all, we are seeing compression but it's mainly coming from the increase in construction prices. We're getting a lot of pressure, upward pressure, on pricing. And obviously that tends to compress you, which makes us more cautious about all these opportunities.

當然。首先，我們確實看到壓縮，但主要來自建造成本上升。我們在價格上承受很大的上行壓力。而這顯然會壓縮收益率，使我們對所有這些機會更加謹慎。

Not really seeing it in terms of competition. In the markets where we're playing with the partners we have as boots on the ground, it's really a situation where we're in the enviable position of being able to cherry-pick the opportunity.

就競爭而言，倒不是真的看到那種情況。在我們與具備在地執行能力的合作夥伴所參與的市場中，實際上我們處於一個令人稱羨的位置，能夠從容挑選最好的機會。

The $200 million, again, is a run rate. That's consistent with the pipeline being at a level of $400 million to $500 million, which it had been until all the deliveries of this year. So don't look at that as a cap, but just simply a gauge of how fast all this gets put into place.

2億美元，再次強調，是一個年化運行水準（run rate）。這與管線維持在4億至5億美元的水準一致，而在今年所有交付完成之前一直都是如此。所以不要把它看作上限，而只是衡量這些事項落地推進速度的一個指標。

And then on the portfolio review, the $125 million, sounds like you'll take all that to market, maybe not sell all of it but at least try to get it out into the market next year. Looking at One City Center as a piece of that, it looks like about half retail centers and half of that One City Center project, plus or minus.

然後就投資組合檢視而言，這1.25億美元，聽起來你們會把這些都拿到市場上，也許不會全部出售，但至少會嘗試在明年把它推向市場。把 One City Center 視為其中一部分來看，它看起來大約一半是零售中心，另一半是 One City Center 專案，正負些許差異。

But I guess on the flip side of that, what do you like? What do you put that into? Where are you really confident deploying that capital on a 1031 basis? Is it some land? Is it all retail? What are your thoughts on that as you sit here today?

但我想從另一面來看，你們喜歡什麼？你們會把這筆資金投入到哪裡？以1031交換的方式，你們對把這些資本投放到哪裡最有信心？是一些土地嗎？還是全部是零售？以你們今天坐在這裡的角度，你們對此有什麼想法？

Sure. Well, one thing it definitely is not is land. As most of you know who've followed us, that's been a tenet of ours for 40 years, that we don't speculate on land unless obviously we have an anchor tenant and can start development right away.

當然。嗯，有一件事它肯定不是——土地。如同多數一路關注我們的人所知，這是我們40年來的一項原則：我們不會在土地上投機，除非很明顯我們已經有主力店租戶（anchor tenant），並且能立刻啟動開發。

At the same time, we've got our eyes, Dave, on the types of properties that we think will offer the best growth and it's really not necessarily the product type. As you know, we loved mixed use. We love walkable environments for a number of different reasons. So in a perfect world we'll acquire more mixed-use assets. And if we can't find things to our liking in that regard, we'll look to redevelopment. And if we can't find things in that regard we'll make our own mixed-use batch of acquisitions.

同時，Dave，我們也在關注我們認為能提供最佳成長的資產類型，而這其實未必取決於產品類型。如你所知，我們很喜歡複合式用途（mixed use）。我們喜歡可步行的環境，原因有很多。所以在理想情況下，我們會收購更多複合式用途資產。如果在這方面找不到合意的標的，我們就會轉而看重建／再開發（redevelopment）。如果這方面也找不到，我們就會自己打造一批複合式用途的收購。

But, again, remember what we're doing here. You don't want to sell something unless you've got a better use for the money. We've identified what we believe we can reap and sow into something better. But we're prepared to be wrong. Like I've said on many occasions, we're very comfortable with the assets we hold. And if it turns out those become the best things available, that's what we're going to do.

但是，再次提醒你要記得我們在做什麼。除非你對這筆錢有更好的用途，否則你不應該賣掉任何東西。我們已經辨識出我們相信可以「收割並再播種」到更好的標的上。但我們也準備好可能判斷錯誤。就像我多次說過的，我們對目前持有的資產非常滿意。如果結果證明那些反而是市場上最好的選擇，那我們就會那樣做。

Dave, you know. You've followed us from the beginning. We're under no pressure to increase the size of our business. We're under a lot of pressure to increase the value of our business. And unless the transaction is going to do that for us, we're just simply not going to transact.

Dave，你知道的。你從一開始就一路關注我們。我們沒有壓力要擴大公司規模。我們有很大的壓力要提升公司價值。除非這筆交易能為我們做到這點，否則我們就不會進行交易。

One last question from me. Go to Mike on this and Lou can chime in if you want. But you had a pretty long list of 2020 guidance impacts. You kind of talked about a slower pace of growth. I guess maybe one, a more direct question, is there a risk that 2020 earnings is lower than '19? And then, Mike, maybe some added details on how Summit Place could also impact and any potential office move-outs like Hampton University. How also would that impact the guidance as we try to start to hone in on a number?

我最後一個問題。這題我想問 Mike，Lou 你也可以補充。你們列了一長串2020年指引的影響因素。你們也談到成長速度會放慢。我想更直接問：2020年的盈餘是否有可能低於2019年？另外，Mike，能否再多談一些 Summit Place 可能帶來的影響，以及像 Hampton University 這類辦公室退租的潛在情況？當我們試著把數字範圍收斂得更精準時，這些又會如何影響指引？

So hopefully won't be lower than 2019. Certainly, that's not what we're looking to do. Where we're talking about a big impact here is on the mezzanine program where we have 3 loans getting paid off in the first half of the year, which is going to reduce that substantially.

希望不會低於2019年。當然，那不是我們想要的結果。我們所說的重大影響，主要在於夾層融資（mezzanine）計畫：上半年會有3筆貸款被償還，這將使該部分收入大幅下降。

Another thing, also with the new credit standard, we do not know the effect on that at this point in time. So that's certainly something we've got to work over here in the next few months.

另外，隨著新的信用標準，我們目前還不知道其影響會是什麼。所以這肯定是我們接下來幾個月必須處理與釐清的事項。

As for Summit, that will be a drag that will be placed in service come mid-summer, June/July timeframe. But obviously no income coming in until August.

至於 Summit，那會是一個拖累，預計在仲夏左右投入使用，大約在6月／7月的時間點。但很明顯要到8月才會開始有收入進來。

Unique timing on that as well, Dave. You've followed us over the long haul. And you know are big years of earnings growth coincide with development deliveries and stabilizations. So if you look over the last 6 years of history, it effectively worked out to reasonably every other year being a significant increase followed by every other year being a moderate increase. Our expectation is that's what's going to happen this time around, with no significant development deliveries in 2020.

Dave，這裡也有一個獨特的時間點因素。你長期一路關注我們。你也知道，我們盈餘大幅成長的年份通常與開發案交付與達到穩定營運（stabilization）相吻合。所以如果你回看過去6年的歷史，基本上相當於大約每隔一年就有一次顯著成長，接著隔一年是溫和成長。我們預期這次也會如此，因為2020年沒有重大的開發交付。

Your next question comes from Alexander Pernokas from Bank of America.

下一個問題來自美國銀行（Bank of America）的 Alexander Pernokas。

I was just wondering if you could give us your updated thoughts on WeWork as a top tenant. Do you see any exposure to the kind of scale-back, or any urgency to scale back this exposure given the recent drama with their IPO.

我想請問你們對 WeWork 作為主要租戶（top tenant）的最新看法。鑑於他們近期IPO的風波，你們是否看到任何縮減規模的曝險，或是否有任何迫切性需要降低這項曝險？

Sure. Alex, I guess I want to look at this in a little bit of a broader context. For us, it still comes down to proper underwriting of your assets for the long term. By almost all accounts co-working space is here to stay. It has a small but not insignificant portion of the Class A office market. Most folks are saying somewhere between 3% and 10%. We look at WeWork as simply one of a host of operators in this space. And if you're confident in your underwriting, that co-working space is a positive contributor to the NOI of your asset in a given location, then the particular brand is not as important as the quality of your build-out and your position in the submarket. We are comfortable with this use in the 2 facilities that we have them in, in Durham and in Baltimore.

當然。Alex，我想我會把這件事放在更宏觀的脈絡來看。對我們而言，核心仍然是對資產做長期、適當的承作審核（underwriting）。幾乎各方都認為共享辦公空間（co-working）會長期存在。它在A級（Class A）辦公市場中占比不大，但也不可忽視。多數人認為大約在3%到10%之間。我們把 WeWork 視為這個領域眾多營運商之一。如果你對你的承作審核有信心，認為在特定地點共享辦公能對資產的NOI（淨營運收入）帶來正面貢獻，那麼相較於品牌本身，你的裝修品質（build-out）以及你在次市場（submarket）中的位置更為重要。我們對他們在我們兩個據點（Durham 與 Baltimore）的這種用途感到放心。

That said, we're going to continue to closely monitor the actual performance of these locations and keep our exposure limited on an overall basis. That's one reason why we may end up selling One City Center.

話雖如此，我們會持續密切監控這些據點的實際表現，並在整體層面把曝險控制在有限範圍內。這也是我們可能最終會出售 One City Center 的原因之一。

Conversely, we are actively trying to create some vacancy at Town Center in Virginia Beach for the purpose of attracting an operator to lease a relatively small amount of co-working space to add to our mix of our million-some-odd square feet of office space. So we're kind of intrigued by the drama as everybody else is, but you've really got to look beyond that into what that use is and if it's a good fit for where you are. I hope that answers your question.

相反地，我們正積極嘗試在維吉尼亞海灘（Virginia Beach）的 Town Center 創造一些空置，目的是吸引某個營運商承租相對小面積的共享辦公空間，加入我們約一百萬多平方英尺的辦公面積組合中。所以我們跟大家一樣對這場風波感到好奇，但你必須超越風波本身，去看這種用途是什麼，以及它是否適合你所在的位置。希望這回答了你的問題。

Yes. That's very helpful.

是的。這非常有幫助。

And then my second question is just taking a step back and looking at long-term strategy, are there any markets that you're looking at for expansion, either new markets or markets that you're currently in?

然後我的第二個問題是，稍微退一步從長期策略來看，你們是否有在考慮哪些市場作為擴張目標，不論是新市場或是你們目前已經在的市場？

Sure. And we're in a number of high growth markets and hopefully when we can public the new projects that are coming out you'll see it coincides with our existing markets. We're very active in the Raleigh-Durham market, the Charlotte market, Charleston, Atlanta, as well as the Inner Harbor of Baltimore. And I think this next pipeline group will probably come from those areas. We're also looking at ancillary areas. Some of you have seen the big announcements of our foray into South Florida with Dania Beach in a public/private partnership. We'll see if that ends up bearing fruit. But we don't see a whole lot of reason to go very far afield. There's just a tremendous amount of opportunity in the markets where we're very comfortable in.

當然。我們目前在多個高成長市場布局；希望等到我們能公開即將推出的新專案時，你會看到它們與我們既有市場是相吻合的。我們在羅利—達勒姆（Raleigh-Durham）市場、夏洛特（Charlotte）市場、查爾斯頓（Charleston）、亞特蘭大（Atlanta），以及巴爾的摩內港（Inner Harbor of Baltimore）都非常活躍。我認為下一批管線專案很可能也會來自這些地區。我們也在看一些周邊區域。你們有些人可能看過我們在南佛羅里達的重大公告：在丹尼亞海灘（Dania Beach）透過公私合營的方式進軍。我們會看看那是否最終能開花結果。但我們看不出有太多理由要跑到很遠的地方去。在我們非常熟悉的市場裡，機會實在非常多。

Your next question comes from Barry Oxford from D. A. Davidson.

下一個問題來自 D. A. Davidson 的 Barry Oxford。

Barry Oxford^ You mentioned that you would be looking at some mixed-used properties for acquisitions. And I know you are in different marketplaces and so the cap rates can range kind of wildly from market to market. So what are you seeing on cap rates for properties like mixed-use property?

Barry Oxford^ 你提到你們會考慮收購一些複合用途（mixed-use）物業。我知道你們在不同市場，因此各市場的資本化率（cap rates）可能差異很大。那麼對於像複合用途這類物業，你們目前看到的 cap rate 水準如何？

Barry, it really depends on the mix and the contribution of NOI from the various product types. The way people are evaluating things, retail obviously with the highest cap rate, followed by office, followed by multifamily. So it really depends on the mix there. But in a good quality mixed-use center they are trading in the mid-6s in our markets. And that's a fine place for us to play.

Barry，這真的取決於組合，以及各種產品類型對 NOI（淨營運收入）的貢獻度。以目前市場評價方式來看，零售的 cap rate 顯然最高，其次是辦公，再其次是多戶住宅（multifamily）。所以確實取決於組合。但在我們市場裡，品質好的複合用途中心成交大約在 6% 中段（mid-6s）。那對我們來說是很合適的區間。

Then do you want to maybe help us with a range on the $125 million for (inaudible). I know you don't want to kind of peg it, but what might we be looking at as far as overall range, not commenting on the one building, but a range of what you guys might be looking at out of that $125 million.

那你能不能大概幫我們說一下，關於那 1.25 億美元（聽不清）的範圍？我知道你不想把它釘死，但如果不評論那一棟建物本身，而是就整體而言，你們可能會在那 1.25 億美元裡面看什麼樣的總體區間？

Sure. I'm not sure I can give you that color from the standpoint of whatever this does in the short term is not really our focus. What we're looking for is the ability to have a higher-growth asset. So with what we're selling versus what we're buying, I would say it could be slightly negative and that -- again, it's hard to say, depending on the mix. If it looks like we're not -- based on our values for what we believe these things are worth, it would only be slightly negative if negative at all. If we're not getting the kind of value that we believe these things have earned, then we're not going to transact just for the sake of transacting.

當然。我不確定我能否就此提供更多細節，因為短期內這件事帶來的影響並不是我們的重點。我們在找的是能夠帶來更高成長的資產。所以就我們賣出的資產相對於買入的資產而言，我會說可能會略為負向（slightly negative）——但同樣地，這很難說，取決於組合。如果以我們對這些資產價值的判斷來看，若真的為負，也只會是小幅負向，甚至可能根本不會為負。如果我們拿不到我們認為這些資產應得的價值，那我們不會只是為了交易而交易。

Your next question comes from Rob Stevenson from Janney Montgomery Scott.

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

Lou, how extensive are the tenant improvement for Apex at Town Center to convert from a Dick's to an indoor amusement park essentially? And how are the rents versus Dick's?

Lou，Apex at Town Center 從 Dick's 轉換成基本上是室內遊樂園，租戶裝修（tenant improvement）工程有多大？另外租金相較於 Dick's 如何？

Yes. You probably heard us say before that the Dick's lease was not a very favorable lease. We and the city worked very hard to attract them -- attract what was then [Galleons] with a very attractive deal. The building is 17 years old, so the majority of the money that we're spending is in redoing HVAC and electrical systems and the like that were going to need to be done for whatever tenant came in.

是的。你可能之前聽我們說過，Dick's 的租約並不是一份很有利的租約。我們和市政府當時為了吸引他們——吸引當時的 [Galleons]——非常努力，並提供了相當有吸引力的條件。那棟建物已有 17 年，所以我們花的大部分資金是在重做 HVAC（暖通空調）與電力系統等，這些不管未來進來的是哪一個租戶，本來就都需要做。

So fortunately with Apex, they can use the physical plant pretty much as is. The tenant improvements were moderate, I'd say. I don't want to go into too many specifics. But we've got a moderate amount of tenant improvement and a moderate increase ultimately in the rental income from the property.

所以幸運的是，Apex 幾乎可以照現有狀況使用這些硬體設施。我會說租戶裝修屬於中等程度。我不想進入太多細節。但我們確實做了中等規模的租戶裝修，並且最終該物業的租金收入也會有中等幅度的提升。

Again, I want to reiterate what I said last quarter. We looked at this as a major opportunity to do something at Town Center that you really typically can't do. By the vacancy created in this kind of a box, we had the ability to do back-office space, which you really can't do at Town Center, which would have been a better financial deal in the short term. But we were looking to add something unique that's not in the market, that could increase the customer and client base here at Town Center for all the other mouths that we feed in the multifamily and the retail and the restaurants and the office space. And this fits that bill perfectly.

另外，我想重申我上季說過的。我們把這視為在 Town Center 做一件你通常很難做的事的重大機會。因為這種大盒子（box）空出來，我們其實有能力去做後勤辦公空間（back-office space），而這在 Town Center 通常做不到；就短期財務來看，那會是一筆更好的交易。但我們想加入一個市場上沒有的獨特業態，能夠為 Town Center 這裡所有其他我們所服務的「嘴巴」——多戶住宅、零售、餐廳以及辦公空間——增加客流與客戶基礎。而這個案子完全符合這個目標。

We've had to -- we've all grown up here with Town Center. And in running this place it's not trying to make the maximum amount of money on every deal. It's increasing the value of the entire center. And we believe that really does this. It just so happens that it also is slightly accretive to what we were getting from the old tenant.

我們不得不——我們大家都是在 Town Center 這裡一路成長的。在經營這個地方時，並不是每一筆交易都要追求賺到最多的錢。而是要提升整個中心的價值。我們相信這件事確實能做到。剛好它也會比我們從舊租戶那裡拿到的略為增益（slightly accretive）。

And does this pose any parking issues, either in the evenings or especially during the summer when the kids are out of school and it's raining outside during the day?

那這會造成任何停車問題嗎？不論是晚上，或是特別在夏天孩子放暑假、白天下雨的時候？

Oh, I think we're in good shape. In each -- this is a great partnership we have with the City of Virginia Beach. They own the 5,000-plus parking spaces that underpin our buildings. With each phase that's added to Town Center we get a new parking study done by a third-party expert that's been with us for the past 20 years. And this fits within the mixed-use parking scheme that has worked so far. Now we're -- that's a great question because it's something that we have to be mindful of in terms of day/night uses that are here at Town Center. But this one fits the bill exactly.

喔，我想我們狀況良好。在每一個——我們與維吉尼亞海灘市（City of Virginia Beach）的合作關係非常好。他們擁有支撐我們建物的 5,000 多個停車位。Town Center 每增加一個開發階段，我們都會請第三方專家做一份新的停車研究；那位專家過去 20 年一直與我們合作。而這個案子符合目前為止運作良好的複合用途停車配置模式。當然——這是個很好的問題，因為我們必須留意 Town Center 這裡日間/夜間使用型態的搭配。但這個案子完全符合需求。

And then can you talk about where the construction company's flow or deal flow is today? I mean the contract value is roughly $577 million, the backlog was $173 million at September 30. But between the Armada Hoffler projects slated for start in 2020 and third-party deals you're kicking around, how does it compare to previous years? Because I mean you've been cautioning for the last few not to extrapolate growth in that business. But their trailing 12 months you're up to over $7 million of profit. How should we be thinking about what's going to be happening with the construction company over the next 12 to 18 months?

另外你能談談建築公司的案源/交易流（flow or deal flow）目前如何嗎？我的意思是，合約金額大約 5.77 億美元，9 月 30 日的在手訂單（backlog）是 1.73 億美元。但在 2020 年預計開工的 Armada Hoffler 專案，以及你們正在評估的第三方案子之間，跟前幾年相比如何？因為你過去幾季一直提醒大家不要外推那個業務的成長。但以過去 12 個月（trailing 12 months）來看，你們的獲利已經超過 700 萬美元。我們應該如何看待未來 12 到 18 個月建築公司會發生什麼？

Sure. One thing to remember there, Rob, is that there was an outlier in those last 12 months in that the construction company built and effectively sold the Pepsi distribution center for a significant profit over and above the fee, something that we take a lot of pride in doing these build-to-suits. So it was a little bit inflated there.

當然。Rob，有一點要記得：過去 12 個月裡有一個離群值（outlier），也就是建築公司興建並實質上出售了百事（Pepsi）配送中心，獲得了顯著的利潤，且這個利潤高於一般的工程費（fee）；我們對能做這類量身訂做（build-to-suit）的案子感到非常自豪。所以那段期間的數字有點被墊高了。

That said, we think we're headed to a really good year coming up in 2020. The mix is going to be -- the pendulum is going to swing much further to the third party, which is the actual fee income portion of the business, because on the development side we'll be ramping up and those new projects in the pipeline won't be putting in as much volume. So it's going to be more fee generation than we saw this year. Things are shaping up really well for that business. The guys are doing a fantastic job in a really tough environment. It's really difficult to find good people as well as good contractors. But we've got a lot of 30-year employees that are really chopping the wood for us. So looking forward to a great, great year in that sector.

話雖如此，我們認為2020年將會是非常好的一年。組合將會是——擺盪會更大幅度地轉向第三方，也就是業務中實際的手續費收入部分，因為在開發端我們會加速推進，而管線中的新專案不會貢獻那麼多量。因此，手續費的產生將會比今年看到的更多。這項業務的態勢非常好。在非常艱難的環境下，團隊做得非常出色。要找到好的人才以及好的承包商也非常困難。但我們有很多任職30年的員工，真的在為我們賣力打拚。所以很期待該領域會有非常、非常好的一年。

And then just one last for Mike. Didn't want him to get off scot-free here. Yu talked before about the $0.01 difference between normalized and NAREIT FFO being the mark to market on the hedging. Does that $0.01 gap stay constant or the amount stay relatively constant and over what period of times does that burn off?

接著最後一個問題給Mike。不想讓他在這裡輕鬆過關。Yu先前提到，標準化與NAREIT FFO之間的0.01美元差異，是避險按市價評價（mark-to-market）造成的。這0.01美元的差距會維持不變嗎？或金額會相對維持穩定？以及在多長時間內會逐步消失？

No, it's not constant. It's whatever the LIBOR is versus where the caps are at that point in time it goes to mark to market. Certainly for each particular cap it goes away when that cap expires. But certainly one reason we don't give any guidance on that is we have no idea where those are going to price out and go mark to market.

不，並不是固定的。它取決於LIBOR相對於當時利率上限（cap）的水準，並據此做按市價評價。當然，就每一個特定的利率上限而言，該上限到期時影響就會消失。但我們不提供這方面指引的一個原因，是我們根本不知道它們會如何定價，以及按市價評價會變成什麼樣子。

Okay. And is there anything else other than that that's known at this point is a gap -- is a difference between NAREIT and normalized FFO for fourth quarter at this point?

了解。那麼就目前而言，第四季NAREIT與標準化FFO之間，除了這個之外還有其他已知的差距——也就是差異——嗎？

No.

沒有。

Your next question comes from Bill Crow from Raymond James.

下一個問題來自Raymond James的Bill Crow。

Lou, and I'm sure this has come up on prior calls. I just can't recall your response. But to what extent does Armada Hoffler have the interest in looking at broken malls and the ability to use your skills to redevelop into mixed-use facilities?

Lou，我相信這在之前的電話會議上應該提過。我只是想不起你當時的回覆。但Armada Hoffler在多大程度上有興趣去看那些經營失靈的購物中心（broken malls），並運用你們的能力把它們改造為複合式用途設施？

Bill, that's something that's been intriguing for a long time. There's a great opportunity in a well-located mall that's outlived its usefulness in that business obviously with what's happened in the retail landscape. We just haven't found the right place to play. We've looked at a number of those opportunities. As you might expect as a mixed-use developer a mall in trouble we're certainly one of the groups that somebody would reach out to. Just haven't found the right circumstance yet. But you're very prophetic. I'm hopeful that you'll see an announcement on that in the not-too-distant future where it's someplace we can get involved in in a big way.

Bill，這件事長期以來一直很吸引人。在零售版圖發生變化之後，對於一座位置很好、但在該業態中顯然已經過了使用年限的購物中心，確實存在很大的機會。只是我們還沒找到合適的切入點。我們看過不少這類機會。如你所料，作為複合式用途開發商，當一座購物中心陷入困境時，我們當然是會有人來接洽的團隊之一。只是還沒遇到合適的情境。但你的判斷很有先見之明。我希望在不久的將來你會看到相關公告，屆時會是我們能以很大規模參與的地方。

(Operator Instructions) Your next question is a follow-up question from Dave Rodgers of Baird.

(接線員指示) 下一個問題是Baird的Dave Rodgers的追問。

Hey, Mike, just one detail on the mezzanine. And as you think about the CECL rules which go into effect next year, what's the equity on top of your mezz? I mean, what's kind of the last dollar or last percentage exposure of a project that the mezz is for you guys? Just I'm trying to approximate some estimates.

嗨，Mike，關於夾層融資（mezzanine）有一個細節。當你們考量明年生效的CECL規則時，你們的夾層之上有多少股權（equity）？也就是說，夾層對你們而言大概覆蓋到專案的最後一塊資金、或最後一個百分比的曝險是多少？我只是想用來粗略估算一些數字。

Yes, Dave. So what we're always looking at, obviously is what's the exit cap rate versus what's the total capital stack? And certainly on the ones we're involved in, especially Whole Foods centers and those kinds of things is -- what we see is plenty of spread and it's something we obviously update the cap rates as we get market data each quarter. And so far we've been really comfortable and we haven't had any losses. But under the new standard, there's the assumption that a loan is going to go bad. And because of our history, not a long history, even though we've had a few loans paid off we're going to have to go out and get market data as how other mezz loans have performed. And then we're going to have to take that information and kind of overlay that on to what we have to come up with these new loss reserves. So unfortunately at this point in time we just don't have an idea what that's going to look like until we get further along.

是的，Dave。我們一直在看的，顯然是退出資本化率（exit cap rate）相對於整體資本結構（total capital stack）是什麼狀況。而且在我們參與的案子上，特別是Whole Foods中心以及這類型的案子——我們看到的是利差空間很充足；我們也會在每一季取得市場資料後更新資本化率。到目前為止我們一直很放心，也沒有發生任何損失。但在新準則下，會先假設一筆貸款將會變壞。而由於我們的歷史紀錄——並不是很長的歷史，儘管我們已有幾筆貸款償還——我們將必須去取得市場資料，了解其他夾層貸款的表現如何。接著我們必須把那些資訊納入考量，並套用到我們的情況上，以計算這些新的損失準備。所以很遺憾，就目前這個時間點，我們還不知道最後會長什麼樣子，得等我們再往前推進一些。

What we do know, Dave, is that whatever that reserve, it's going to have the effect of delaying recognition of income, some portion of the income, until the loan is paid off, which as Mike said -- you heard the frustration in his voice -- it kind of skews what's actually going on in the company. But obviously we'll comply and that will be the new standard and we'll make it work.

Dave，我們知道的是，不論那個準備金是多少，它都會造成一個效果：延後認列收入——其中一部分收入——直到貸款被償還為止；正如Mike所說——你也聽得出他語氣中的挫折——這會讓公司實際狀況看起來被扭曲。但我們當然會遵循規定，那將會是新的準則，我們也會讓它運作起來。

Thank you. We have reached the end of the question-and-answer session. I will now turn the call over to Lou for closing remarks.

謝謝。我們已到達問答環節的結束。我現在把電話交回Lou作結語。

Thanks again, everybody, for your interest in our company. We appreciate all the attention. It sounds like this one went a little bit longer, but hopefully you found it useful in your deliberations.

再次感謝各位對我們公司的關注。我們很感謝大家的重視。聽起來這次會議稍微久了一點，但希望對你們的評估有所幫助。

And we're, Mike and I -- again, we're not going to NAREIT in a few weeks but we are available for follow-up calls from any interested party. Thanks again. Have a great day.

另外，我和Mike——再次說明——幾週後我們不會去參加NAREIT，但我們願意為任何有興趣的各方安排後續電話。再次感謝。祝各位有美好的一天。

This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.

今天的會議到此結束，您現在可以掛斷電話線。感謝您的參與。