Armada Hoffler Announces Morningstar Upgrades Outlook to Stable and Confirms BBB Credit Rating

Rhea-AI Summary

Armada Hoffler (NYSE: AHH) received a positive update from Morningstar, which upgraded its outlook to stable while confirming its BBB credit rating. The rating agency's decision was influenced by AHH's improving leverage profile and enhanced portfolio diversification, particularly following the development of Allied, a mixed-use project in Baltimore featuring 312 multifamily units, retail space, and a parking garage.

The Allied project, scheduled for completion in Q1 2025 and expected stabilization by Q3 2026, is projected to become a significant contributor to the company's net operating income (NOI). The company's financial position was strengthened by a $103.5 million net proceed equity raise in September 2024, which was used for debt reduction. This strategic move has improved the company's leverage profile and enhanced its financial flexibility within the credit rating category.

Positive

• Morningstar upgraded outlook to stable and confirmed BBB credit rating
• Improved leverage profile following $103.5M equity raise used for debt reduction
• Allied development project expected to become top NOI contributor upon completion
• Enhanced portfolio diversification through mixed-use development strategy

Negative

• None.

News Market Reaction

-1.22%

1 alert

-1.22% News Effect

On the day this news was published, AHH declined 1.22%, reflecting a mild negative market reaction.

Data tracked by StockTitan Argus on the day of publication.

VIRGINIA BEACH, Va., Jan. 10, 2025 (GLOBE NEWSWIRE) -- Armada Hoffler (NYSE: AHH) announced that Morningstar has upgraded its outlook to stable and confirmed its BBB credit rating.

“We are pleased that Morningstar has upgraded our outlook to stable and reiterated our BBB credit rating,” said Shawn Tibbetts, Chief Executive Officer and President of Armada Hoffler. “This reflects the quality, stability and strategic execution that define Armada Hoffler’s operations. Furthermore, it demonstrates the dedication of our team and our commitment to delivering value to our shareholders.”

In its analysis of the Company, Morningstar, a globally recognized credit rating agency, cited several factors supporting the rating confirmation. According to Morningstar, “the Stable trend reflects the [company’s] improving leverage profile and the more diversified real estate portfolio following the completion and delivery of Allied, leading to an improvement in the Diversification business risk assessment factor. Allied is a mixed-use, 312-unit multifamily, retail, and parking garage asset under development in Baltimore, scheduled to be completed in Q1 2025 and stabilized by Q3 2026. Upon stabilization, the asset is expected to be a top asset in the portfolio by net operating income (NOI) contribution and increase geographical and asset type diversification. The enhanced business risk assessment factor allows greater financial flexibility within the respective credit rating category. The improving leverage profile is largely the result of a $103.5 million net proceed equity raise in September 2024 with funds used to repay debt.”

More information regarding Armada Hoffler’s credit rating assignment can be found in the Morningstar press release dated January 9, 2025.

About Armada Hoffler

Armada Hoffler (NYSE: AHH) is a vertically integrated, self-managed real estate investment trust (“REIT”) with over four decades of experience developing, building, acquiring, and managing high-quality office, retail, and multifamily properties located primarily in the Mid-Atlantic and Southeastern United States. We also provide general construction and development services to third-party clients, in addition to developing and building properties to be placed in our stabilized portfolio. Founded in 1979 by Daniel A. Hoffler, Armada Hoffler has elected to be taxed as a REIT for U.S. federal income tax purposes. For more information visit ArmadaHoffler.com.

Contact:

Chelsea Forrest

Armada Hoffler

Vice President of Corporate Communications and Investor Relations

Email: CForrest@ArmadaHoffler.com

Phone: (757) 612-4248

FAQ

What is Armada Hoffler's (AHH) current credit rating from Morningstar?

Morningstar has confirmed Armada Hoffler's BBB credit rating and upgraded its outlook to stable in January 2025.

How much equity did AHH raise in September 2024?

Armada Hoffler raised $103.5 million in net proceeds through an equity offering in September 2024, which was used to repay debt.

When is AHH's Allied development project expected to be completed?

The Allied development project is scheduled to be completed in Q1 2025 and is expected to reach stabilization by Q3 2026.

What are the key features of AHH's Allied development project in Baltimore?

The Allied project is a mixed-use development featuring 312 multifamily units, retail space, and a parking garage, expected to be a top NOI contributor upon stabilization.

Why did Morningstar upgrade AHH's outlook to stable?

Morningstar upgraded the outlook due to AHH's improving leverage profile and more diversified real estate portfolio, particularly following the Allied development project.