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Armada Hoffler Acquires Retail Assets: Time to Buy AHH?

Armada Hoffler Properties, Inc.AHH recently declared the acquisition of a grocery-anchored retail center - Renaissance Square - in the greater Charlotte area, as well as a retail and entertainment center, Columbus Village II, which is next to the Town Center of Virginia Beach.

The company shelled out around $17.1 million in cash for the Renaissance Square acquisition, while the Columbus Village II was bought for two million shares of common stock.

These retail acquisitions in North Carolina and Virginia seem a strategic fit for the company as the properties have sufficient capability to add to the company's top-line growth.

Presently 92% occupied, Renaissance Square has enhanced Armada's operating property portfolio with over 80,000 square feet of retail space and in fact, facilitated the company's expansion into one of its target markets. The property boasts solid trade area demographics for its location in the Charlotte submarket that has an estimated average household income of over $130,000.

Also, the retail center is anchored by a Harris Teeter store that comprises around 50,000 square foot of space. With the remaining lease term exceeding 11 years, the property is expected to enjoy a steady cash flow over a longer period.

On the other hand, comprising more than 92,000 square feet of space, Columbus Village II is fully leased to Bed Bath & Beyond Inc. BBBY , Regal Cinemas and Schlotzsky's Deli. Together with the 65,000 square foot retail center - Columbus Village I - which the company has acquired in 2015, the property offers 12 acres land that can be used for redevelopment purpose next to the Town Center.

Notably, Armada Hoffler is engaged in developing, building, owning and managing office, retail and multifamily properties in attractive markets throughout the Mid-Atlantic U.S. It is based in Virginia Beach, U.S. Armada currently has a Zacks Rank #2 (Buy).

In addition, shares of Armada Hoffler have performed better than the Zacks categorized Real estate industry year to date. In fact, Armada's shares have gained 39.9% year to date, while the industry has just logged in a return of around 3.0% year to date. This price performance is backed by a solid estimate revision.

The company has witnessed its full-year estimates revising 3.1% over the last 60 days to $1.00. Given its progress on the fundamentals and a solid Zacks Rank, the stock should keep performing well in the quarters ahead.

Investors interested in the REIT industry can consider stocks like Preferred Apartment Communities, Inc. APTS and Sun Communities, Inc. SUI . Both these stocks have a Zacks Rank #2. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

Preferred Apartment Communities' 2016 estimates climbed 2.4% over the past 60 days to $1.30 and represent a growth of 12.1% from the prior-year period.

Sun Communities, too, is experiencing upward revision in estimates with its 2016 estimate inching up 1.9% to $3.79 over the past 60 days.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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