Armada Hoffler's Recent Retail Asset Sales
Armada Hoffler (NYSE: AHH) has successfully concluded its exit from two retail properties, marking a significant milestone for the company. In a recent announcement, the firm shared that it sold Nexton Square and Market at Mill Creek, two sought-after retail locations in South Carolina.
A Strong Financial Performance
The sale was completed for an impressive total of $82 million, showcasing the company's capability to leverage the rising demand for retail properties in the Southeast U.S. market. Both assets were sold to the same unnamed buyer, achieving a blended cap rate in the low 6% range, which reflects a favorable market position. At the time of sale, both properties were fully stabilized, underlining Armada Hoffler’s successful management and operational strategies.
Strategic Development and Teamwork
Armada Hoffler collaborated with local sponsors to develop these retail spaces, which significantly contribute to the community's growth. The transaction, with its +20% profit spread over development costs, validates the company's initial investment thesis and strategic foresight. These successful sales highlight the company’s adept navigation through the complexities of real estate development and investment.
Future Growth Opportunities
With the completion of this transaction, Armada Hoffler is positioned to retire the mortgage of Nexton Square, the most expensive variable-rate loan in its portfolio. This financial maneuver will allow the company to free up nearly $60 million in cash equity, enabling them to explore higher growth opportunities going forward. Shawn Tibbetts, Chief Executive Officer and President, expressed optimism about the outcome and future strategies, emphasizing their intention to reinvest the proceeds in acquisitions that align with Armada Hoffler's long-term vision for growth.
Nexton Square: A Regional Retail Gateway
Nexton Square serves as a key retail center within a larger 4,500-acre master-planned community, showcasing over 133,608 square feet of open-air shopping space. Since opening in 2020, this lifestyle center has become an integral part of the community, catering to more than 10,000 new single-family and multifamily units being developed nearby.
Market at Mill Creek: Community-Centric Shopping
Similarly, Market at Mill Creek, which opened in early 2018, has established itself as a local favorite, anchored by a 50,000-square-foot Lowes Foods grocery store. Alongside additional inline shop spaces totaling 23,000 square feet, this retail center adds significant value to the shopping experience in the vicinity.
About Armada Hoffler
Founded in 1979 by Daniel A. Hoffler, Armada Hoffler is a highly regarded real estate investment trust (REIT) specializing in the acquisition, development, and management of institutional-grade office, retail, and multifamily assets primarily in the Mid-Atlantic and Southeastern United States. With over 40 years of experience, the company not only focuses on its own developments but also provides development and general contracting services to third-party clients.
Contact Information
If you would like to learn more about Armada Hoffler and its upcoming opportunities, please reach out to Chelsea Forrest, VP of Corporate Communications and Investor Relations, at (757) 366-4000 or via email at cforrest@armadahoffler.com.
Frequently Asked Questions
What properties did Armada Hoffler sell?
Armada Hoffler sold Nexton Square and Market at Mill Creek in South Carolina.
How much did the sales of the properties generate?
The total sales amount for both properties was $82 million.
What was the cap rate achieved in the sales?
The properties were sold at a blended cap rate in the low 6% range.
What is the significance of the Nexton Square mortgage repayment?
Repaying the Nexton Square mortgage allows Armada Hoffler to utilize cash equity for future higher growth investments.
When was Nexton Square opened?
Nexton Square opened its doors in 2020 and has since become a crucial retail destination.
