Armada Hoffler completes stock offering, board members buy in By Investing.com

Armada Hoffler Properties, Inc. (NYSE:), a real estate investment trust, announced today the completion of a public stock offering, which included purchases by several of its board members. On Wednesday, the company entered into an underwriting agreement with Jefferies LLC, BofA Securities, Inc., and Barclays Capital Inc. to sell 9 million shares at $10.50 each.

In addition to the initial offering, the underwriters exercised an option on Thursday to acquire an additional 1.35 million shares. The closing of the offering took place today, with certain board members participating as investors.

Louis S. Haddad, CEO and Executive Chairman, along with other board members, including Daniel A. Hoffler, Chairman Emeritus, and A. Russell Kirk, purchased shares at the public offering price. The transactions were conducted in accordance with a prospectus supplement and a base prospectus related to the company’s shelf registration statement.

The company, with its principal executive offices in Virginia Beach, VA, operates within the real estate sector, focusing on the development and management of properties. This offering is part of Armada Hoffler’s capital-raising activities, with the company’s common stock and preferred stock listed on the New York Stock Exchange.

The details of the underwriting agreement, along with legal opinions and consents related to the offering, have been filed with the SEC and are included as exhibits in the company’s current report on Form 8-K. This information is based on a press release statement.

In other recent news, Armada Hoffler Properties, Inc. has made notable strides in its financial performance and strategic initiatives. The company recently launched a public offering of 7 million shares of common stock, with the option for underwriters to purchase an additional 1.05 million shares. The proceeds from this offering will be used to repay several loans and address general corporate expenses, as managed by Jefferies, BofA Securities, and Barclays.

In addition to this, Armada Hoffler has declared dividends for its common and preferred shares, with a cash dividend of $0.205 per common share for the third quarter and a cash dividend of $0.421875 per share on its 6.75% Series A Cumulative Redeemable Perpetual Preferred Stock. This move underscores the company’s commitment to delivering value to its shareholders.

Furthermore, Armada Hoffler reported strong financial results for the second quarter of 2024, projecting high-end earnings by the end of the year. The company’s portfolio has seen high tenant demand and improved rents, particularly in the office segment. The construction division also posted its highest-ever gross profit.

The company’s mixed-use ecosystems are expanding, with three projects expected to complete by year-end. Armada Hoffler also successfully sold Solace City Park at a mid-5% cap rate, indicating a healthy market. Lastly, there is an upcoming transition in leadership, with Shawn Tibbetts set to assume the CEO role in the next year.

InvestingPro Insights

Armada Hoffler Properties’ recent public stock offering comes at a time when the company’s financial metrics present a mixed picture. According to InvestingPro data, the company’s market capitalization stands at $967 million, with a notable dividend yield of 7.59%. This high yield aligns with an InvestingPro Tip indicating that AHH “pays a significant dividend to shareholders,” which could be attractive to income-focused investors considering the recent stock offering.

The company’s revenue growth has been robust, with a 23.67% increase over the last twelve months as of Q2 2024. However, an InvestingPro Tip suggests that “analysts anticipate sales decline in the current year,” which may explain the company’s decision to raise capital through this stock offering.

Despite recent growth, AHH’s profitability has been challenged, as evidenced by its negative P/E ratio of -253.65 (adjusted for the last twelve months). This is consistent with another InvestingPro Tip stating that the company has “not been profitable over the last twelve months.” However, there’s optimism for the future, as analysts predict the company will return to profitability this year.

For investors seeking a deeper understanding of Armada Hoffler Properties, InvestingPro offers additional tips and insights. There are 9 more InvestingPro Tips available for AHH, which could provide valuable context for the company’s recent capital-raising activities and future prospects.

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