A sprawling REIT is paring down its portfolio and business model to focus exclusively on retail and office investment.
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Virginia-based Armada Hoffler announced it was in the process of unloading 13 of its 14-property multifamily portfolio in Virginia, Baltimore and Atlanta, its construction business, and its real estate financing operations.
The company will also be rebranded as AH Realty Trust, with the change taking effect March 2.
The move comes after the company undertook a yearlong strategic reevaluation under President and CEO Sean J. Tibbetts, who assumed the helm of the REIT on Jan. 1, 2025.
“Over the past year, we have stripped the company down to its foundation, and are building it back up with the right people, the right focus, and the right operating discipline,” Tibbetts said in a Q4 2025 earnings call on Tuesday.
The company has entered into a letter of intent with a global real estate investment and management firm to sell 11 of its 14 multifamily properties, with two additional properties to enter the market soon.
The company currently owns several high-profile multifamily or mixed-use properties, including The Interlock, an Atlanta mixed-use complex with 203K SF of office space, 108K SF of retail space, 349 apartment units, 41 single-family townhomes and a 161-room boutique hotel.
The company did not disclose the identity of the potential new owner of the 11 properties or the properties covered by the LOI, and did not immediately respond to Bisnow's request for comment.
Armada Hoffler is also close to finalizing terms for the sale of its Virginia-based construction business and has signed an LOI with an institutional buyer to purchase its fee-based real estate financing program, company officials said during the call. The buyers' identities were not released.
Company officials indicated the properties being unloaded will likely move at a cap rate of 5% and the prices being offered were favorable. They did not disclose the sale prices, however.
The collective moves are projected to help pay down approximately $400M of the REIT’s debt and, by 2027, reposition the company to focus on enhanced investment in retail centers in selective markets. The company also plans to stay in the office marketplace.
At the end of last year, Armada Hoffler had $1.5B of total debt outstanding, including $241M under its revolving credit facility. This was higher than the company's stated long-term target debt load of 5.5 to 6.5 times its annual operating earnings.
Tibbetts believes reducing leverage and narrowing the company's focus to retail and office will help the publicly traded REIT achieve more predictable earnings and sustainable cash flow.
“The days of being a sprawling, complex octopus are behind us,” Tibbetts said. “We're a new company with a sharper strategy, a stronger team, and a more accountable operating model.”
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