DBRS rates Armada Hoffler BBB

DBRS said it assigned a BBB issuer rating with a stable trend to Armada Hoffler Properties, Inc.

In explaining the rating, the agency cited the company’s market position in the Mid-Atlantic, the quality of its multifamily portfolio, the quality and diversity of its commercial tenant base and the longer-term weighted-average lease terms for its office and retail assets.

However, constraining the rating is the company’s exposure to general contracting income, the concentration of its assets in the Virginia Beach, Va. and Baltimore markets, its higher leverage relative to the BBB category and the smaller portfolio size on an EBITDA and square footage basis relative to the BBB rating category, DBRS said.

The stable outlook reflects the view that Armada Hoffler will continue to fully exploit operations for its current real estate holdings while executing related and unrelated development projects, the development of related projects will be delivered and stabilized as scheduled, and it will continue to hedge its variable-interest-rate exposure.

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