Armada Hoffler Properties Inc
For the period ended Sep 30, 2024. Filed Nov 8, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 8, 2024
AHRT$6.38-2.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-07.
0001569187-24-000119
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-08.
0001569187-24-000159
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 236 previous paragraphs and 245 current paragraphs.
150 unchanged; 58 reworded; 36 added; 27 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 18 previous and 18 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (36)
Current report
During the three and nine months ended September 30, 2024, we recognized $0.1 million and $1.5 million, respectively, of interest income on the note.
Current report
Solis North Creek
Current report
On July 10, 2024, we entered into a $27.0 million preferred equity investment for the development of a multifamily property located in Huntersville, North Carolina ("Solis North Creek"). The preferred equity investment has economic terms consistent with a note receivable, including a mandatory redemption feature effective on August 8, 2030, and it is accounted for as a note receivable. Our investment bears interest at a rate of 12.0% for the first 24 months. Beginning on July 10, 2026, the investment will bear interest at a rate of 9.0% for 12 months. On July 10, 2027, the investment will again bear interest at 12.0% through maturity. The interest compounds annually. We also earn an unused commitment fee of 4.5% on the unfunded portion of the investment's maximum loan commitment, which also compounds annually. The preferred equity investment was initially subject to a minimum interest guarantee of $8.9 million over the life of the investment.
Current report
On August 8, 2024, the Company signed an amendment to the operating agreement for the entity through which we own our real estate financing investment with respect to Solis North Creek to reduce the equity funding requirement from $27.0 million to $26.8 million and the minimum interest guarantee from $8.9 million to $8.8 million.
Current report
The balance on the Solis North Creek note was $2.7 million as of September 30, 2024, which includes less than $0.1 million of cumulative accrued interest and $0.3 million of cumulative accrued unused commitment fees. During each of the three and nine months ended September 30, 2024, we recognized $0.3 million of interest income on the note.
Current report
▪Retail 13.1% (GAAP) and 7.8% (Cash)
Current report
▪Office 18.5% (GAAP) and 0.8% (Cash)
Current report
▪Multifamily 1.8% (GAAP and Cash)
Current report
•Raised $108.7 million of gross proceeds in an underwritten public offering of 10.35 million shares of our common stock at a public offering price of $10.50 per share. Net proceeds, after deducting the underwriting discount and offering expenses, totaled $103.5 million.
Current report
•On September 27, 2024, the Company paid off the $35.0 million, $23.7 million, and $10.9 million balances of the loans secured by the Chronicle Mill mixed-use multifamily, retail, and office property, the Premier mixed-use multifamily and retail property, and the Market at Mill Creek retail property, respectively.
Current report
Retail rental revenues, property expenses, and NOI for the three and nine months ended September 30, 2024 and 2023 were as follows (in thousands):
Current report
Retail segment NOI for the three months ended September 30, 2024 decreased 6.5% compared to the three months ended September 30, 2023, primarily due to decreased parking income at The Interlock Retail, the commencement of operations of Southern Post Retail in the third quarter of 2024, and a nonrecurring collection of bad debt that occurred in 2023 for Harrisonburg Regal. Retail segment NOI for the nine months ended September 30, 2024 is materially consistent with the nine months ended September 30, 2023.
Current report
Retail same store rental revenues, property expenses, and NOI for the three and nine months ended September 30, 2024 and 2023 were as follows (in thousands):
Current report
Retail same store NOI for the three and nine months ended September 30, 2024 decreased 4.9% and 1.8%, respectively, compared to the three and nine months ended September 30, 2023, primarily due to increased costs such as repairs and maintenance, contracted services, utilities and insurance, and professional fees, as well as decreased parking income.
Current report
Office rental revenues, property expenses, and NOI for the three and nine months ended September 30, 2024 and 2023 were as follows (in thousands):
Current report
Office segment NOI for the three and nine months ended September 30, 2024 increased 38.0% and 21.9%, respectively, compared to the three and nine months ended September 30, 2023, primarily due to the receipt of a termination fee from one of our tenants at Wills Wharf and the addition of new tenants at Wills Wharf, as well as the acquisition of The Interlock Office in May 2023.
Current report
Office same store rental revenues, property expenses, and NOI for the three and nine months ended September 30, 2024 and 2023 were as follows (in thousands):
Current report
(1) Same Store NOI excludes a $4.0 million termination fee received from one of our tenants at the Wills Wharf property and $0.3 million of accelerated straight-line rent effect from the termination of such tenant's lease for the three and nine months ended September 30, 2024. The impact of the same is included in Non-Same Store NOI.
Current report
Office same store NOI for the three and nine months ended September 30, 2024 increased 6.1% and 5.6%, respectively, compared to the three and nine months ended September 30, 2023, primarily due to new tenants at Wills Wharf.
Current report
Multifamily rental revenues, property expenses, and NOI for the three and nine months ended September 30, 2024 and 2023 were as follows (in thousands):
Current report
Multifamily segment NOI for the three and nine months ended September 30, 2024 decreased 5.8% and 2.7%, respectively, compared to the three and nine months ended September 30, 2023, primarily due to the commencement of operations at Chandler Residences in April 2024, as well as increased utilities and repairs and maintenance at Chronicle Mill Apartments.
Current report
Multifamily same store rental revenues, property expenses and NOI for the three and nine months ended September 30, 2024 and 2023 were as follows (in thousands):
Current report
Multifamily same store NOI for the three and nine months ended September 30, 2024 decreased 3.7% and 1.1%, respectively, compared to the three and nine months ended September 30, 2023, primarily due to increased utilities and repair and maintenance.
Current report
Real estate financing gross profit for the three and nine months ended September 30, 2024 decreased 15.2% and 5.4%, respectively, compared to the three and nine months ended September 30, 2023, primarily due to the effect of increased funded balances and the increase to allocated interest costs in connection therewith, partially offset by an increase in recognized interest income.
Current report
Rental revenues for the three and nine months ended September 30, 2024 increased 9.0% and 8.2%, respectively, compared to the three and nine months ended September 30, 2023 as follows (in thousands):
Current report
Retail rental revenues for the three months ended September 30, 2024 was materially consistent with the three months ended September 30, 2023. Retail rental revenues for the nine months ended September 30, 2024 increased 4.2% compared to the nine months ended September 30, 2023, primarily as a result of the acquisition of The Interlock Retail in May 2023.
Current report
Office rental revenues for the three and nine months ended September 30, 2024 increased 26.0% and 16.4%, respectively, compared to the three and nine months ended September 30, 2023, primarily due to the receipt of termination fees from one of our tenants at Wills Wharf and the addition of new tenants at Wills Wharf.
Current report
Rental expenses for the three and nine months ended September 30, 2024 increased 12.8% and 12.0%, respectively, compared to the three and nine months ended September 30, 2023 as follows (in thousands):
Current report
Retail rental expenses for the three and nine months ended September 30, 2024 increased 20.7% and 18.0%, respectively, compared to the three and nine months ended September 30, 2023, primarily due to inflationary increases in reimbursable expenses, such as contracted property services, repairs and maintenance, and compensation..
Current report
Real estate taxes for the three and nine months ended September 30, 2024 increased 5.4% and 6.4%, respectively, compared to the three and nine months ended September 30, 2023 as follows (in thousands):
Current report
Retail real estate taxes for the three and nine months ended September 30, 2024 increased 3.4% and 4.4%, respectively, compared to the three and nine months ended September 30, 2023, primarily due to increased assessments with respect to our properties located in Virginia Beach.
Current report
Office real estate taxes for the three and nine months ended September 30, 2024 increased 4.8% and 3.3%, respectively, compared to the three and nine months ended September 30, 2023, primarily due to tax credits received with respect to our properties located in Baltimore, Maryland.
Current report
Recent Common Stock Offering
Current report
On September 27, 2024, the Company completed an underwritten public offering of 9.00 million shares of common stock at a public offering price of $10.50 per share, which resulted in gross proceeds of $94.5 million. The Company granted the underwriters an option to purchase 1.35 million shares of common stock at a public offering price of $10.50 per share, which resulted in gross proceeds of $14.2 million. The Company had net proceeds, after deducting the underwriting discount and offering expenses, of $103.5 million.
Current report
Less than one percent
Current report
During the nine months ended September 30, 2024, net cash provided by operating activities increased $12.9 million compared to the nine months ended September 30, 2023, primarily due to an increase in portfolio NOI and construction gross profit, as well as the timing of payments for construction and rental payables, partially offset by an increase in interest expense.
Removed paragraphs (27)
Previous report
The balance on the Solis City Park II note was $25.7 million as of June 30, 2024, which includes $5.2 million of cumulative accrued interest and a discount of $0.1 million due to unamortized equity fees. During the three and six months ended June 30, 2024, we recognized $0.6 million and $1.4 million, respectively, of interest income on the note. As of June 30, 2024, this note was fully funded.
Previous report
▪Retail 5.8% (GAAP) and 2.9% (Cash)
Previous report
▪Office 24.3% (GAAP) and 4.4% (Cash)
Previous report
▪Multifamily 4.3% (GAAP and Cash)
Previous report
Retail rental revenues, property expenses, and NOI for the three and six months ended June 30, 2024 and 2023 were as follows (in thousands):
Previous report
Retail segment NOI for the three months ended June 30, 2024 was materially consistent with the three months ended June 30, 2023. Retail segment NOI for the six months ended June 30, 2024 increased 6.6% compared to the six months ended June 30, 2023, primarily due to the acquisition of The Interlock Retail in May 2023.
Previous report
Retail same store rental revenues, property expenses, and NOI for the three and six months ended June 30, 2024 and 2023 were as follows (in thousands):
Previous report
Retail same store NOI for the three and six months ended June 30, 2024 was materially consistent with the three and six months ended June 30, 2023.
Previous report
Office rental revenues, property expenses, and NOI for the three and six months ended June 30, 2024 and 2023 were as follows (in thousands):
Previous report
Office segment NOI for the three and six months ended June 30, 2024 increased 12.5% and 10.8%, respectively, compared to the three and six months ended June 30, 2023, primarily due to the acquisition of The Interlock Office in May 2023, increased occupancy at Wills Wharf, and increased parking income at the Constellation Office.
Previous report
Office same store rental revenues, property expenses, and NOI for the three and six months ended June 30, 2024 and 2023 were as follows (in thousands):
Previous report
Office same store NOI for the three and six months ended June 30, 2024 increased 9.0% and 3.7%, respectively, compared to the three and six months ended June 30, 2023, primarily due to increased occupancy at Wills Wharf, and increased reimbursable and parking income at the Constellation Office.
Previous report
Multifamily rental revenues, property expenses, and NOI for the three and six months ended June 30, 2024 and 2023 were as follows (in thousands):
Previous report
Multifamily segment NOI for the three and six months ended June 30, 2024 was materially consistent with the three and six months ended June 30, 2023.
Previous report
Multifamily same store rental revenues, property expenses and NOI for the three and six months ended June 30, 2024 and 2023 were as follows (in thousands):
Previous report
Multifamily same store NOI for the three and six months ended June 30, 2024 was materially consistent with the three and six months ended June 30, 2023.
Previous report
Real estate financing gross profit for the three months ended June 30, 2024 decreased 9.0% compared to the three months ended June 30, 2023, primarily due to higher interest expense allocable to the outstanding loans that offset the increased income for the 2024 period. Real estate financing gross profit for the six months ended June 30, 2024 was materially consistent with the six months ended June 30, 2023.
Previous report
Rental revenues for the three and six months ended June 30, 2024 increased 5.5% and 7.7%, respectively, compared to the three and six months ended June 30, 2023 as follows (in thousands):
Previous report
Retail rental revenues for the three and six months ended June 30, 2024 increased 3.2% and 7.3%, respectively, compared to the three and six months ended June 30, 2023, primarily as a result of the acquisition of The Interlock Retail in May 2023.
Previous report
Office rental revenues for the three and six months ended June 30, 2024 increased 10.9% and 11.1%, respectively, compared to the three and six months ended June 30, 2023, primarily as a result of the acquisition of The Interlock Office in May 2023, increased occupancy at Wills Wharf, and increased reimbursable and parking income at the Constellation Office.
Previous report
Retail rental expenses for the three and six months ended June 30, 2024 increased 7.9% and 11.5%, respectively, compared to the three and six months ended June 30, 2023, primarily due to the acquisition of The Interlock Retail in May 2023.
Previous report
Real estate taxes for the three and six months ended June 30, 2024 increased 4.5% and 7.0%, respectively, compared to the three and six months ended June 30, 2023 as follows (in thousands):
Previous report
Retail real estate taxes for the three months ended June 30, 2024 were materially consistent with the three months ended June 30, 2023. Retail real estate taxes for the six months ended June 30, 2024 increased 4.9% compared to the six months ended June 30, 2023, primarily due to the acquisition of The Interlock Retail in May 2023.
Previous report
Office real estate taxes for the three and six months ended June 30, 2024 were materially consistent with the three and six months ended June 30, 2023.
Previous report
Multifamily real estate taxes for the three and six months ended June 30, 2024 increased 17.4% and 19.7%, respectively, compared to the three and six months ended June 30, 2023, primarily due to increased tax assessments across the multifamily portfolio and the commencement of operations at Chandler Residences.
Previous report
As of June 30, 2024, we held one interest rate cap corridor. We purchased a SOFR interest rate cap at 1.00% and sold a SOFR interest rate cap at 3.00%, resulting in a SOFR interest rate cap corridor of 1.00% to 3.00%, effective on September 1, 2022. This corridor is designated as a cash flow hedge. The intended goal of this corridor is to provide a level of protection from the effect of rising interest rates and reduce the all-in-cost of the derivative instrument. We paid a premium of $1.4 million to purchase the corridor. As of June 30, 2024, the notional amount was $73.6 million, which is the maximum notional amount. The corridor is scheduled to mature on September 1, 2024.
Previous report
During the six months ended June 30, 2024, net cash provided by operating activities decreased $23.4 million compared to the six months ended June 30, 2023 primarily due to timing of billing for construction projects.
Reworded paragraphs (58)
Previous wording
On July 1, 2024, we signed an amendment to the operating agreement for the entity in which we own our real estate financing investment with respect to Solis Gainesville II to reduce the preference rate on the investment from 14% to 6% starting on January 1, 2025. We also received a call option to purchase a controlling interest in the entity that owns Gainesville II at fair market value during the period from January 1, 2025 to December 31, 2025, which option also gives us a right of first refusal to buy the property during the same period.
Current wording
On July 10, 2024, we signed an amendment to the operating agreement for the entity through which we own our real estate financing investment with respect to Solis Gainesville II to reduce the preference rate on the investment from 14% to 6% starting on January 1, 2025. We also received a call option to purchase a controlling interest in the entity that owns Solis Gainesville II at fair market value during the period from January 1, 2025 to December 31, 2025, which option also gives us a right of first refusal to buy the property during the same period.
Previous wording
The balance on the Solis Gainesville II note was $23.8 million as of June 30, 2024, which includes $4.0 million of cumulative accrued interest, $0.4 million of unused commitment fees and a discount of $0.2 million due to unamortized equity fees. During the three and six months ended June 30, 2024, we recognized $0.8 million and $1.6 million, respectively, of interest income on the note. As of June 30, 2024, this note was fully funded and the development property was approximately 35% leased.
Current wording
The balance on the Solis Gainesville II note was $24.6 million as of September 30, 2024, which includes $4.8 million of cumulative accrued interest, $0.4 million of cumulative accrued unused commitment fees and a discount of $0.1 million due to unamortized equity fees. During the three and nine months ended September 30, 2024, we recognized $0.8 million and $2.4 million, respectively, of interest income on the note. As of September 30, 2024, this note was fully funded and the development property was approximately 53% leased.
Previous wording
The balance on the Solis Kennesaw note was $34.8 million as of June 30, 2024, which includes $2.4 million of cumulative accrued interest, $2.8 million of unused commitment fees and a discount of $0.4 million due to unamortized equity fees. During the three and six months ended June 30, 2024, we recognized $1.3 million and $2.6 million, respectively, of interest income on the note.
Current wording
The balance on the Solis Kennesaw note was $44.1 million as of September 30, 2024, which includes $3.7 million of cumulative accrued interest, $2.9 million of cumulative accrued unused commitment fees and a discount of $0.4 million due to unamortized equity fees. During the three and nine months ended September 30, 2024, we recognized $1.4 million and $4.0 million, respectively, of interest income on the note.
Previous wording
The balance on the Solis Peachtree Corners note was $18.4 million as of June 30, 2024, which includes $1.5 million of cumulative accrued interest, $1.7 million of unused commitment fees and a discount of $0.3 million due to unamortized equity fees. During the three and six months ended June 30, 2024, we recognized $0.9 million and $1.8 million, respectively, of interest income on the note.
Current wording
The balance on the Solis Peachtree Corners note was $24.5 million as of September 30, 2024, which includes $2.2 million of cumulative accrued interest, $2.0 million of cumulative accrued unused commitment fees and a discount of $0.3 million due to unamortized equity fees. During the three and nine months ended September 30, 2024, we recognized $1.1 million and $2.9 million, respectively, of interest income on the note.
Previous wording
The balance on The Allure at Edinburgh note was $10.5 million as of June 30, 2024, which includes $1.3 million of cumulative accrued interest. During the three and six months ended June 30, 2024, we recognized $0.3 million and $0.7 million, respectively, of interest income on the note. As of June 30, 2024, this note was fully funded.
Current wording
The balance on The Allure at Edinburgh note was $10.9 million as of September 30, 2024, which includes $1.6 million of cumulative accrued interest. During the three and nine months ended September 30, 2024, we recognized $0.3 million and $1.0 million, respectively, of interest income on the note. As of September 30, 2024, this note was fully funded.
Previous wording
Second Quarter 2024 and Recent Highlights
Current wording
Third Quarter 2024 and Recent Highlights
Previous wording
•Net income attributable to common stockholders and holders ("OP Unitholders") of units of limited partnership interest in the Operating Partnership ("OP Units") of $0.4 million, or $0.00 per diluted share, compared to $11.7 million, or $0.13 per diluted share, for the three months ended June 30, 2023.
Current wording
•Net loss attributable to common stockholders and holders ("OP Unitholders") of units of limited partnership interest in the Operating Partnership ("OP Units") of $10.4 million, or $0.11 per diluted share, compared to net income attributable to common stockholders and OP Unitholders of $5.3 million, or $0.06 per diluted share, for the three months ended September 30, 2023.
Previous wording
•Normalized funds from operations attributable to common stockholders and OP Unitholders ("Normalized FFO") of $30.2 million, or $0.34 per diluted share, compared to $28.3 million, or $0.32 per diluted share, for the three months ended June 30, 2023. See "Non-GAAP Financial Measures."
Current wording
•Funds from operations attributable to common stockholders and OP Unitholders ("FFO") of $12.7 million, or $0.14 per diluted share, compared to $27.6 million, or $0.31 per diluted share, for the three months ended September 30, 2023. See "Non-GAAP Financial Measures."
Previous wording
•Funds from operations attributable to common stockholders and OP Unitholders ("FFO") of $22.4 million, or $0.25 per diluted share, compared to $31.4 million, or $0.35 per diluted share, for the three months ended June 30, 2023. See "Non-GAAP Financial Measures."
Current wording
•Normalized funds from operations attributable to common stockholders and OP Unitholders ("Normalized FFO") of $31.4 million, or $0.35 per diluted share, compared to $27.7 million, or $0.31 per diluted share, for the three months ended September 30, 2023. See "Non-GAAP Financial Measures."
Previous wording
•As of June 30, 2024, weighted average stabilized portfolio occupancy was 94.9%. Retail occupancy was 95.4%, office occupancy was 94.3%, and multifamily occupancy was 94.9%.
Current wording
•As of September 30, 2024, weighted average stabilized portfolio occupancy was 95.4%. Retail occupancy was 96.2%, office occupancy was 94.7%, and multifamily occupancy was 95.3%.
Previous wording
•Executed 23 lease renewals and 9 new leases during the second quarter for an aggregate of 248,714 of net rentable square feet.
Current wording
•Executed 28 lease renewals and 9 new leases during the third quarter for an aggregate of 273,212 of net rentable square feet.
Previous wording
•Same Store NOI increased 0.6% on a GAAP basis compared to the quarter ended June 30, 2023.
Current wording
•Office Same Store NOI increased 6.1% on a GAAP basis compared to the quarter ended September 30, 2023.
Previous wording
•Third-party construction backlog as of June 30, 2024 was $302.9 million and construction gross profit for the second quarter was $4.3 million.
Current wording
•Third-party construction backlog as of September 30, 2024 was$193.1 million and construction gross profit for the third quarter was$3.4 million.
Previous wording
•During the second quarter of 2024, unrealized losses on non-designated interest rate derivatives that negatively affected FFO were $2.0 million. As of June 30, 2024, the value of the Company’s entire interest rate derivative portfolio, net of unrealized losses, was $32.5 million. These losses are excluded from normalized FFO.
Current wording
•During the third quarter of 2024, unrealized losses on non-designated interest rate derivatives that negatively affected FFO were $16.7 million. As of September 30, 2024, the value of the Company’s entire interest rate derivative portfolio, net of unrealized losses, was $11.1 million. These losses are excluded from normalized FFO.
Previous wording
•In July, realized $25.8 million in cash upon full redemption of the Solis City Park II preferred equity investment.
Current wording
•In July, we realized $25.8 million in cash upon full redemption of the Solis City Park II preferred equity investment.
Previous wording
Since our Annual Report on Form 10-K for the year ended December 31, 2023, we retrospectively reclassified certain components of mixed-use properties between the retail, office, and multifamily real estate segments in order to align the components of those properties with their tenant composition. As a result, NOI for the three months ended June 30, 2023 increased $0.5 million and less than $0.1 million for the retail and office real estate segments, respectively, and decreased $0.5 million for the multifamily real estate segment. NOI for the six months ended June 30, 2023 increased $0.8 million and less than $0.1 for the retail and office real estate segments, respectively, and decreased $0.9 million for the multifamily real estate segment. These reclassifications had no effect on total property NOI as previously reported. These reclassifications also had no impact on our general contracting and real estate services or real estate financing segments.
Current wording
Since our Annual Report on Form 10-K for the year ended December 31, 2023, we retrospectively reclassified certain components of mixed-use properties between the retail, office, and multifamily real estate segments in order to align the components of those properties with their tenant composition. As a result, NOI for the three months ended September 30, 2023 increased $0.5 million for the retail real estate segment, and decreased less than $0.1 million and $0.4 million for the office and multifamily real estate segments, respectively. NOI for the nine months ended September 30, 2023 increased $1.3 million and less than $0.1 for the retail and office real estate segments, respectively, and decreased $1.4 million for the multifamily real estate segment. These reclassifications had no effect on total property NOI as previously reported. These reclassifications also had no impact on our general contracting and real estate services or real estate financing segments.
Previous wording
Retail same store results for the three and six months ended June 30, 2024 and 2023 exclude The Interlock Retail, Columbus Village II, and Southern Post Retail due to redevelopment. Retail same store results for the six months ended June 30, 2024 and 2023 also exclude Chronicle Mill Retail.
Current wording
Retail same store results for the three and nine months ended September 30, 2024 and 2023 exclude Southern Post Retail and Columbus Village II due to redevelopment. Retail same store results for the nine months ended September 30, 2024 and 2023 also exclude Chronicle Mill Retail and The Interlock Retail.
Previous wording
Office same store results for the three and six months ended June 30, 2024 and 2023 exclude The Interlock Office and Southern Post Office. Office same store results for the six months ended June 30, 2024 and 2023 also exclude Chronicle Mill Office.
Current wording
Office same store results for the three and nine months ended September 30, 2024 and 2023 exclude Southern Post Office. Office same store results for the nine months ended September 30, 2024 and 2023 also exclude Chronicle Mill Office and The Interlock Office.
Previous wording
Multifamily same store results for the three and six months ended June 30, 2024 and 2023 exclude Chandler Residences. Multifamily same store results for the six months ended June 30, 2024 and 2023 also exclude Chronicle Mill Apartments.
Current wording
Multifamily same store results for the three and nine months ended September 30, 2024 and 2023 exclude Chandler Residences. Multifamily same store results for the nine months ended September 30, 2024 and 2023 also exclude Chronicle Mill Apartments.
Previous wording
General contracting and real estate services revenues, expenses, and gross profit for the three and six months ended June 30, 2024 and 2023 were as follows (in thousands):
Current wording
General contracting and real estate services revenues, expenses, and gross profit for the three and nine months ended September 30, 2024 and 2023 were as follows (in thousands):
Previous wording
(1)50% and 90% of gross profit attributable to our T. Rowe Price Global HQ and Allied | Harbor Point development projects, respectively, is not reflected within general contracting and real estate services revenues due to elimination. The Company is still entitled to receive cash proceeds in relation to the eliminated amounts. Prior to any gross profit eliminations attributable to these projects, operating margin was 4.0% and 3.7% for the three and six months ended June 30, 2024, respectively, and 3.9% and 4.0% for the three and six months ended June 30, 2023, respectively.
Current wording
(1)50% and 90% of gross profit attributable to our T. Rowe Price Global HQ and Allied | Harbor Point development projects, respectively, is not reflected within general contracting and real estate services revenues due to elimination. The Company is still entitled to receive cash proceeds in relation to the eliminated amounts. Prior to any gross profit eliminations attributable to these projects, operating margin was 3.2% and 3.6% for the three and nine months ended September 30, 2024, respectively, and 3.8% and 3.9% for the three and nine months ended September 30, 2023, respectively.
Previous wording
General contracting and real estate services segment gross profit for the three and six months ended June 30, 2024 increased $0.8 million and $1.8 million, respectively, compared to the three and six months ended June 30, 2023, primarily due to an increase in work performed in the execution of our backlog and the recognition of savings from unused contingencies for certain contracts.
Current wording
General contracting and real estate services segment gross profit for the three and nine months ended September 30, 2024 increased $0.1 million and $1.9 million, respectively, compared to the three and nine months ended September 30, 2023, primarily due to an increase in work performed in the execution of our backlog and the recognition of savings from unused contingencies for certain contracts.
Previous wording
The changes in third party construction backlog for the three and six months ended June 30, 2024 and 2023 were as follows (in thousands):
Current wording
The changes in third party construction backlog for the three and nine months ended September 30, 2024 and 2023 were as follows (in thousands):
Previous wording
As of June 30, 2024, we had $100.3 million in the backlog relating to the Harbor Point Parcel 3 and Harbor Point Parcel 4 developments in Baltimore.
Current wording
As of September 30, 2024, we had$48.0 million in the backlog relating to the Harbor Point Parcel 3 and Harbor Point Parcel 4 developments in Baltimore.
Previous wording
Real estate financing interest income, interest expense, and gross profit for the three and six months ended June 30, 2024 and 2023 were as follows (in thousands):
Current wording
Real estate financing interest income, interest expense, and gross profit for the three and nine months ended September 30, 2024 and 2023 were as follows (in thousands):
Previous wording
The following table summarizes the results of operations for the three and six months ended June 30, 2024 and 2023 (unaudited, in thousands):
Current wording
The following table summarizes the results of operations for the three and nine months ended September 30, 2024 and 2023 (unaudited, in thousands):
Previous wording
Multifamily rental revenues for the three and six months ended June 30, 2024 increased 1.9% and 3.7%, respectively, compared to the three and six months ended June 30, 2023, as a result of the commencement of operations at Chandler Residences.
Current wording
Multifamily rental revenues for the three and nine months ended September 30, 2024 increased 2.0% and 3.1%, respectively, compared to the three and nine months ended September 30, 2023, as a result of the commencement of operations at Chandler Residences in April 2024.
Previous wording
General contracting and real estate services revenues for the three and six months ended June 30, 2024 increased $14.3 million and $57.0 million, respectively, compared to the three and six months ended June 30, 2023 due to an increase in work performed in the execution of our backlog and the recognition of savings from unused contingencies for certain contracts.
Current wording
General contracting and real estate services revenues for the three and nine months ended September 30, 2024 increased $14.9 million and $71.9 million, respectively, compared to the three and nine months ended September 30, 2023 due to the execution of our backlog and the recognition of savings from unused contingencies for certain contracts.
Previous wording
Interest income for the three and six months ended June 30, 2024 increased 35.7% and 29.8%, respectively, compared to the three and six months ended June 30, 2023, primarily due to interest earned on unused commitments on real estate financing investments and higher interest bearing cash deposits.
Current wording
Interest income for the three and nine months ended September 30, 2024 increased 27.4% and 29.0%, respectively, compared to the three and nine months ended September 30, 2023, primarily due to higher outstanding principal balances on our real estate financing investments, interest earned on unused commitments on real estate financing investments, and higher interest bearing cash deposits.
Previous wording
Office rental expenses for the three and six months ended June 30, 2024 increased 11.7% and 15.1%, respectively, compared to the three and six months ended June 30, 2023, primarily as a result of the acquisition of The Interlock Office in May 2023 and increased occupancy at Constellation Office.
Current wording
Office rental expenses for the three and nine months ended September 30, 2024 increased 6.0% and 8.2%, respectively, compared to the three and nine months ended September 30, 2023, primarily as a result of the acquisition of The Interlock Office in May 2023, increased occupancy at Wills Wharf, and increased occupancy at Constellation Office.
Previous wording
Multifamily rental expenses for the three and six months ended June 30, 2024 increased 10.9% and 6.9%, respectively, compared to the three and six months ended June 30, 2023, primarily as a result of the commencement of operations at Chandler Residences, as well as increases in utilities and repairs.
Current wording
Multifamily rental expenses for the three and nine months ended September 30, 2024 increased 14.5% and 11.1%, respectively, compared to the three and nine months ended September 30, 2023, primarily as a result of the commencement of operations at Chandler Residences in April 2024 and increased utilities and repairs and maintenance.
Previous wording
Rental expenses for the three and six months ended June 30, 2024 increased 10.3% and 11.5%, respectively, compared to the three and six months ended June 30, 2023 as follows (in thousands):
Current wording
Multifamily real estate taxes for the three and nine months ended September 30, 2024 increased 10.3% and 16.4%, respectively, compared to the three and nine months ended September 30, 2023, primarily due to the commencement of operations at Chandler Residences in April 2024.
Previous wording
General contracting and real estate services expenses for the three and six months ended June 30, 2024 increased $13.4 million and $55.2 million, respectively, compared to the three and six months ended June 30, 2023 due to an increase in work performed in the execution of our backlog.
Current wording
General contracting and real estate services expenses for the three and nine months ended September 30, 2024 increased $14.9 million and $70.0 million, respectively, compared to the three and nine months ended September 30, 2023 primarily due to an increase in work performed in the execution of our backlog.
Previous wording
Depreciation and amortization for the three and six months ended June 30, 2024 increased 4.6% and 7.5%, respectively, compared to the three and six months ended June 30, 2023, primarily due to the acquisition of The Interlock in May 2023.
Current wording
Depreciation and amortization for the three and nine months ended September 30, 2024 increased 3.7% and 6.1%, respectively, compared to the three and nine months ended September 30, 2023, primarily due to the acquisition of The Interlock in May 2023 and the placement of assets into service from development (Southern Post Retail, Southern Post Office, and Chandler Residences).
Previous wording
Amortization of right-of-use assets - finance leases for the three and six months ended June 30, 2024 increased 13.5% and 26.4%, respectively, compared to the three and six months ended June 30, 2023, primarily due to the ground lease assumed in connection with the acquisition of The Interlock in May 2023.
Current wording
Amortization of right-of-use assets - finance leases for the three months ended September 30, 2024 was materially consistent with the three months ended September 30, 2023. Amortization of right-of-use assets - finance leases for the nine months ended September 30, 2024 increased 12.9% compared to the nine months ended September 30, 2023, primarily due to the ground lease assumed in connection with the acquisition of The Interlock in May 2023.
Previous wording
General and administrative expenses for the three and six months ended June 30, 2024 increased 11.1% and 9.2%, respectively, compared to the three and six months ended June 30, 2023, primarily due to increased compensation costs, including severance costs.
Current wording
General and administrative expenses for the three and nine months ended September 30, 2024 increased 21.0% and 12.9%, respectively, compared to the three and nine months ended September 30, 2023, primarily due to severance costs.
Previous wording
Acquisition, development, and other pursuit costs for the three and six months ended June 30, 2024 increased compared to the three and six months ended June 30, 2023, primarily due to the write off of development costs related to an undeveloped land parcel in predevelopment located in Charlotte, North Carolina. Refer to Note 5 for more information.
Current wording
Acquisition, development, and other pursuit costs for the nine months ended September 30, 2024 related to the write off of development costs related to an undeveloped land parcel in predevelopment located in Charlotte, North Carolina. Acquisition, development, and other pursuit costs for the three months ended September 30, 2024 and the nine months ended September 30, 2023 were immaterial. There were no acquisition, development, and other pursuit costs for the three months ended September 30, 2023. Refer to Note 5 to our condensed consolidated financial statements in Item 1 of this Quarterly Report on Form 10-Q for more information.
Previous wording
Impairment charges for the three and six months ended June 30, 2024 relate to the impairment of an undeveloped land parcel in predevelopment located in Charlotte, North Carolina. Refer to Note 5 for more information.
Current wording
There were no impairment charges for the three months ended September 30, 2024. Impairment charges for the nine months ended September 30, 2024 relate to the impairment of an undeveloped land parcel in predevelopment located in Charlotte, North Carolina. Refer to Note 5 to our condensed consolidated financial statements in Item 1 of this Quarterly Report on Form 10-Q for more information.
Previous wording
Interest expense for the three and six months ended June 30, 2024 increased 55.7% and 51.2%, respectively, compared to the three and six months ended June 30, 2023, primarily due to higher levels of indebtedness in connection with the funding of development projects, real estate financing investments, and acquisitions, as well as the expiration of derivatives designated as cash flow hedges.
Current wording
Interest expense for the three and nine months ended September 30, 2024 increased 38.5% and 46.4%, respectively, compared to the three and nine months ended September 30, 2023, primarily due to higher levels of indebtedness in connection with the funding of development projects, real estate financing investments, and acquisitions, as well as the expiration of derivatives designated as cash flow hedges.
Previous wording
The change in fair value of derivatives and other for the three and six months ended June 30, 2024 includes a decrease in interest receipts for non-designated derivatives due to expiring instruments, and an increase in the fair value of our derivative instruments due to increases in forward SOFR (the Secured Overnight Financing Rate).
Current wording
The change in fair value of derivatives and other for the three and nine months ended September 30, 2024 includes an increase in interest receipts for non-designated derivatives due to an increase in the amount of non-designated derivatives, and a decrease in the fair value of our derivative instruments due to decreases in forward SOFR (the Secured Overnight Financing Rate).
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Current report — wording carried from elsewhere
On March 10, 2020, we commenced an at-the-market continuous equity offering program (the "ATM Program") through which we may, from time to time, issue and sell shares of our common stock and shares of our 6.75% Series A
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
The Credit Agreement limits our ability to pay cash dividends if a default has occurred and is continuing or would result therefrom. However, if certain defaults or events of default exist, we may pay cash dividends to the extent necessary to (i)