Good morning, ladies and gentlemen, and welcome to the Armada Hoffler First Quarter '25 Earnings Conference Call and Webcast. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question-and-answer session. This call is being recorded on Thursday, May 8, 2025. I would now like to turn the conference over to Chelsea Forrest. Please go ahead.

Good morning, and thank you for joining Armada Hoffler's First Quarter 2025 Earnings Conference Call and Webcast. On the call this morning, in addition to myself, is Shawn Tibbetts, CEO and President, and Matthew Barnes-Smith, CFO. The press release announcing our first quarter earnings, along with our supplemental package, were distributed yesterday afternoon. A replay of this call will be available shortly after the conclusion of the call through June 7, 2025. The numbers to access the replay are provided in the earnings press release. For those who listened to the rebroadcast of this presentation, we remind you that the remarks made herein are as of today, May 8, 2025, and will not be updated subsequent to the initial earnings call. During this call, we made forward-looking statements, including statements related to the future performance of our portfolio, our development pipeline, the impact of acquisitions and dispositions, our mezzanine program, our construction business, our liquidity position, our portfolio performance and financing activities, as well as comments on our outlook. Listeners are cautioned that any forward-looking statements are based upon management's beliefs, assumptions, and expectations, taking into account information that is currently available. These beliefs, assumptions, and expectations may change as a result of possible events or factors, not all of which are known and many of which are hard to predict and generally beyond our control. These risks and uncertainties can cause actual results to differ materially from our current expectations, and we advise listeners to review the forward-looking statement, disclosure, and our press release that we distributed yesterday and the risk factors disclosed in the documents we have filed with or furnished to the SEC. We will also discuss certain non-GAAP financial measures, including but not limited to FFO and normalized FFO. Definitions of these non-GAAP measures, as well as reconciliations to the most comparable GAAP measures, are included in the quarterly supplemental package, which is available on our website at armadahoffler.com. I will now turn the call over to Shawn.

Good morning, and thank you for joining us as we review Armada Hoffler's first quarter results and provide some perspective on where we're headed for the remainder of the year and beyond. The first quarter was highly productive, reflecting our focus on operational excellence and the core goal of quality. As you can see from the release, all of our property types performed well, and we delivered a strong result with normalized FFO of $0.25 per diluted share. With portfolio occupancy holding steady at a minimum of 95% over the past four quarters, we are reaffirming our full year guidance. Our office assets remain essentially fully occupied at 97.5%. The remaining 2.5% is well inside a market vacancy factor. It is an especially good time to be concentrated in highly-amenitized, mixed-use environments where we benefit from a more affluent multifamily renter base and strong, stable office occupants, both of which are attracted to and support a curated mix of retail and entertainment offerings. These settings create natural synergies that align with our evolving tenants and consumer preferences, positioning us for sustained success. Additionally, both our shopping centers and apartment communities remain defensive by nature, supported by demand for everyday goods and services, particularly grocery and necessity-based retail. When looking at the 25% of retail outside of our mixed-use environment, 40% of this AVR comes from those with grocery anchors or shadow anchors. This strategic mix of asset classes and location reinforces our ability to drive steady performance. We are pleased with the strong performance delivered across all segments of our portfolio, office, retail, and multifamily. Our properties demonstrated solid fundamentals this quarter, with both our office and retail assets achieving double-digit GAAP renewal spreads and a blended 2.6% growth rate for new and renewed multifamily leases. The positive releasing activity in our commercial portfolio demonstrates our ability to simultaneously grow rents and extend lease terms. While the construction activity met expectations in the first quarter, a few construction projects across the balance of the year have come out of our guidance. As we have previously communicated, our business strategy continues to shift away from reliance on fee income, with an increased emphasis on driving higher-quality property-level earnings. We believe the increased property-level performance, coupled with expense management, will help to offset the decreased construction income for the remainder of the year, thus our unchanged guidance. Before we move on, I'll make a few comments on the broader economic landscape. It's clear that external factors like tariffs and ongoing macroeconomic uncertainty are top of mind for all businesses right now, and we are no exception. We are fully focused on those things that we can control. For us, control in this context is a disciplined approach to managing costs, seeking operational efficiencies, and making strategic decisions that position us for long-term success. We will continue refining our business model by reviewing all levels of expenses to ensure that we are most efficiently and properly stewarding our resources. An example of this is our 2025 G&A reduction of 13% year-over-year, achieved with tighter cross controls and reduction in executive headcount. We are confident we can continue to deliver value through this challenging environment by remaining agile and always maintaining a proactive posture, looking for opportunities to unlock value, whether that means disposing of a fully stabilized asset with less growth at aggressive cap rates or unearthing value through redevelopment. Since the beginning of the year, we spent a significant amount of time on the road, meeting directly with our shareholders and investment partners. These conversations have been invaluable, providing opportunities to reinforce our conviction in the company's long-term, quality-focused strategy, which is to reduce the complexity of the business model while improving the balance sheet. As part of the improvement of the balance sheet, in mid-March, we reset our quarterly dividend to $0.14 per share. This was a difficult but necessary decision that we made with long-term value creation in mind. The new dividend level is now fully supported by operating property cash flow. This change reinforces our broader goal of delivering sustained, durable, and predictable returns while also increasing fiscal flexibility for the company. We are in a solid financial position and feel very comfortable that we can sustain this more appropriate level of dividends into the future. In the first quarter, we experienced continued momentum across the portfolio with above 95% occupancy across all three segments. Commercial leasing was robust, with 320,000 square feet transacted during the quarter. Additionally, our office has no material lease expirations through 2027. Multifamily remains strong at 95% occupancy, and we are seeing signs of supply absorption in key Sunbelt markets like Atlanta and Charlotte. Retail remains solid, with demand for well-located space driving continued leasing activity and positive spread. Our retail portfolio remains resilient amid broader retail headwinds, including closures by tenants such as Party City, Conn's and JOANN Fabrics, representing roughly 115,000 square feet of space in our portfolio. However, I'm pleased to share that as of today, there is tenant interest on all of this space, with over 85% already under lease, or LOI, to higher credit-quality tenants at 25% higher rents. These leasing successes reflect the strength of our locations, as well as our proactive approach to tenant rollover and repositioning opportunities. The Interlock, our mixed-use asset in West Midtown Atlanta, in partnership with Georgia Tech, has made tremendous progress over the last several quarters, reaching materially full occupancy as we committed. The retail component is currently 98% leased, underscoring the strong demand for space in this vibrant, walkable neighborhood. During the quarter, we announced the marquee new lease with F1 Arcade, the world's first Formula One-themed hospitality and entertainment brand, backed by Liberty Media, the owner of Formula One, which will occupy over 15,000 square feet of first-generation space at the Interlock. This dynamic concept will further elevate the experience-driven energy of the project. On the office side, we are currently 94% leased with only 11,000 square feet available for lease with current interest and no rollover this year or next. We executed three new office leases totaling approximately 23,000 square feet, reinforcing our belief that well-located, high-quality office space in mixed-use environments remains highly desirable for a wide range of tenants. At Harbor Point, we are thrilled to welcome T. Rowe Price to their new global headquarters as of the first week of March. Having T. Rowe officially on-site in our Harbor Point ecosystem is a major milestone for the community and a testament to the long-term vision we've executed on at Harbor Point. We announced Monday that we entered into a binding term sheet with our partner to acquire our partner's full interest in allied apartments, where leasing is actively progressing with 39% currently leased. We have received positive feedback from residents that have moved in over the past few months. We're also preparing to welcome an exciting roster of new retailers all opening this summer that will complement the existing merchandising mix and further enhance the vibrancy and amenity base of the neighborhood. I'm pleased to report that Chandler Residences, located within the mixed-use community of Southern Post, has successfully achieved stabilization with 95% leased. Southern Post combines residential leasing with thoughtfully curated retail, dining, and office components, creating a vibrant, walkable community. On the commercial side, Southern Post is currently 72% leased, or LOI. This includes all retail space, reflecting strong tenant demand and the project's growing momentum. Two new restaurants are scheduled to open their doors in the coming weeks, further activating the street-level experience and enhancing foot traffic through the site. Multifamily fundamentals remain solid. We reported a healthy combined trade-out of 2.6% for the first quarter, supported by strong retention and disciplined rent growth strategies. April has meaningfully improved as a result of some short-term leases with renewal spreads holding strong at 5.1% and new lease spreads rebounding to 4.1%. We look forward to continued demand in our markets and capturing rent growth while maintaining high occupancy and resident satisfaction. Our momentum further validates our strategic position heading into the prime leasing season. Our 2018 vintage community, Greenside and Charlotte, has experienced leaks that impacted the exterior of several units, and we are using this as an opportunity to complete a thoughtful improvement throughout the building, enhancing their overall appeal and value. As a result, some of the units are offline as we complete work in phases over the next 10 to 12 months. Given the property's prime location in Midtown, less than a mile from the new Pearl Innovation Medical District, we are confident that we will realize the return on these capital investments once completed. The impact of this has been contemplated in our earnings guidance for this year. As part of our long-term strategy, we are closely evaluating redevelopment opportunities within our existing portfolio, allowing us to unlock incremental value and drive future growth. We have added a section to the supplemental to detail these opportunities on page 25. These efforts are focused on enhancing high-performing assets and capitalizing on underutilized real estate that can be repositioned to meet evolving market demand. A great example is our ongoing work at Columbus Village, adjacent to Town Center Virginia Beach, where we are redeveloping the former Bed, Bath & Beyond store. This project will bring in a highly sought-after national grocer and Golf Galaxy, complementing Town Center's current offerings and increasing traffic to the center, while representing a 51% rent premium. We view this as a replicable model using our holistic approach and mix of asset classes to strategically allocate capital and resources in proven locations. Another example is our plan to monetize an undeveloped out parcel at Southgate Square for a new drive-through coffee location, which will activate excess land, drive additional traffic to the center, and enhance the property's overall income stream. We are also in the process of moving our Liberty Apartments leasing office from its current footprint to a more efficient nearby retail space. This move will allow us to repurpose the former leasing area into additional apartments, capitalizing on the strong demand for this community. Redevelopment is a key lever we will use to create value and enhance the quality of our income stream while maintaining a disciplined approach to capital deployment. Before we wrap up, I would like to take a moment to recognize the recent addition of Jennifer Boykin to our Board of Directors. Jennifer brings tremendous leadership experience and a strong operational background, most recently serving as EVP of Huntington Ingalls Industries and President of Newport News Shipbuilding. Her insights and perspective will be incredibly valuable, and we are excited to welcome her to the team. We remain focused on value creation through disciplined execution, thoughtful reinvestment, and managing risk. As the year progresses, we are positioned to benefit from our upcoming multifamily deliveries, as well as the continued maturation and ultimate stabilization of our development pipeline. We are acting with intentionality, building a stronger, simplified, and more consistent Armada Hoffler, one that is more efficient, more balanced, and creating more reliable earnings growth over time. Ultimately, one that is more aligned with creating long-term shareholder value. I'm proud of the progress we've made so far, and I'm excited about the future. And I'm confident in the execution of our strategy. I'll now turn the call over to Matt.

Good morning, and thank you, Shawn. Armada-Hoffler delivered a strong start to the 2025 fiscal year, demonstrating the resilience of our diversified portfolio and disciplined operating model. For the first quarter, normalized FFO attributable to common shareholders was $25.6 million, or $0.25 per diluted share, slightly above our expectations for the period. Net operating income for Q1 was $42.2 million, representing a 2% increase year-over-year and $600,000 better than budgeted. FFO attributable to common shareholders was $17.2 million, or $0.17 per diluted share. AFFO totaled $20.4 million, or $0.20 per diluted share. Once we subtract the non-cash interest income, this results in $0.16 per diluted share, which is above our cash dividend as detailed on page 19 of the supplemental. Our mixed-use portfolio continues to perform exceptionally well, especially in the office segment. Same-store office NOI increased by 9.2% on a GAAP basis and 6.3% on a cash basis. Office occupancy remained high at 97.5%, and office releasing spreads rose by 23.3% on a GAAP basis and 3.7% on a cash basis. Multifamily leasing performed well in Q1, with new lease growth and renewal growth both contributing meaningfully, reporting a blended rate for the quarter of 2.6%. Multifamily releasing spreads were 5.4%, with new leases reporting negative 1%. These spreads continued to perform well in April, increasing to 5.1% and 4.1%, respectively. Rent collections remain strong and tenant demand across our residential portfolio remains healthy. In our retail segment, performance remains steady. Leasing activity remains robust at our grocery anchored centers, and our mixed-use retail assets consistently achieve high occupancy levels, maintaining above 95% as the complementary blend of residential, retail, and office components creates a self-reinforcing ecosystem of demand, driving stability across economic cycles. Our balance sheet remains a key focus of the management team. For the quarter, net debt to total adjusted EBITDA stood at 7.1 times at quarter-end, with our stabilized leverage at 5.4 times. Relative to our historic performance, we maintained strong liquidity of over $211 million. We also completed our hedging transaction during the quarter for $150 million notional amounts, with a swap fixed rate of 2.5%, mitigating exposure to further interest rate volatility. We continue to operate with the expectation that interest rates may remain elevated longer than previously anticipated. Our balance sheet strategy emphasizes flexibility, allowing this management team to navigate through this environment whilst providing us options to fund growth when needed. We also recognize that debt capital markets remain selective. Our proactive approach to liquidity and disciplined deployments ensures that we can fund our current development commitments and, when appropriate, invest without undue balance sheet pressure. Prudent cash management is foundational to our approach, particularly in today's uncertain economic environment. In March, the Board of Directors made the strategic decision to right-size our dividends and better align with projected property cash levels, ensuring a sustainable payout that supports both shareholder returns and long-term balance sheet strength. As Shawn mentioned, maintaining sufficient liquidity to fund operations, service debt, and supporting our dividend from the cash flows generated by owned properties is paramount to the company's success. We proactively stress-test our cash flow model under a range of downside scenarios, including a potential recessionary environment, higher for longer interest rates, and moderate leasing activity. Following our recent dividend right-sizing, our adjusted funds from operations for the quarter and on a projected run rate basis is well positioned to fully cover our dividend obligations, even under stress scenarios. This updated approach by management ensures that we are able to preserve balance sheet flexibility, protect our core distribution to shareholders, and retain capital for strategic investment opportunities that may emerge over the course of the cycle. Finally, I would like to highlight a very important point on expenses. General and administrative expenses are projected to decrease by 13% year-over-year, reflecting our conscious and ongoing efforts to manage costs prudently. Given the year-over-year reduction in earnings, we are taking deliberate steps to align G&A with the scale of our current operations while still supporting our strategic priorities. Fiscal responsibility remains a cornerstone of our operating philosophy, as demonstrated by a better than expected performance in the first quarter and will maintain a tight focus on expense control throughout the remainder of the year. For the remainder of the year, we will continue to focus on strengthening the stability of our cash flows supporting both future growth and a consistent sustainable dividend, driving operating efficiencies through strategic investments in technology and process improvements, which continue to enhance margins over time. We remain disciplined in our execution, selectively advancing projects that offer attractive risk-adjusted returns. We are fully aware that transaction volumes across the real estate market have slowed. Our mid-term growth will primarily be driven by the stabilization of the development pipeline and continued leasing activity which positions us well in the current environment. Fortunately, with our strong internal pipeline this year, our model does not include external acquisitions to drive growth, other than bringing online the allure multifamily assets from our real estate financing portfolio. Given our first quarter performance and our current line of sight for the remainder of the year, we are reaffirming our full year 2025 normalized FFO guidance of $1 to $1.10 per diluted share. Even with the headwinds that Shawn mentioned in our construction entity, we are confident that our strategy, combined with our new leadership and diversified portfolio, positions Armada Hoffler to deliver for the shareholders. Thank you for your time and support. With that, I will now turn over to Shawn for his closing remarks.

Thanks, Matt. I want to thank everyone for joining us today and for your continued interest in Armada Hoffler. We remain focused on executing our short-term strategy, delivering strong operational results and creating long-term value for our shareholders. As always, I want to thank our dedicated team for their hard work and commitment. We look forward to updating you on our progress in the quarters ahead. Thank you for joining us.

Thank you, Shawn. Ladies and gentlemen, we will now begin the question-and-answer session. And your first question comes from Andrew Berger with Bank of America. Please go ahead.

Great. Good morning. Thank you for all the color in the opening remarks. Maybe just sticking with kind of high-level, Shawn, you touched on the macro a bit and appreciate the color and the cost savings. And it does sound like obviously it slowed the construction pipeline a little bit. But just curious, has the macro uncertainty, the tariff conversations, has that translated to any changes in your office or retail leasing conversations? Have tenants brought this up as a concern or maybe caused any delays? Or has it really kind of been more limited to on that construction side?

Andrew, thank you for the question and good morning. I think the latter is what we're seeing. As you can see, we've been very busy executing new and renewal leases. So I think the activity on the portfolio side has not seen that to-date. And frankly, we're seeing strength in that space. So I think that's good. Again, we can't control the macro environment, to your point, but new starts are probably going to be softer. And that's what we're seeing in the construction side. So thankfully for us, the value of the portfolio continues to shine as we're able to maintain the guidance here, even given some softness in the construction space.

Great. Thank you. And I think you touched on this a couple of times in the opening remarks, Matt. I know you mentioned it at the end, but you said you want to maintain some optionality to invest strategically over the course of the cycle as opportunities arise. And could we just get your latest thoughts, obviously, appreciate there might not be anything immediate term, but as we get a couple of years out, do you want to see more of these mixed-use communities? How open are you to office, maybe versus the other asset classes, just your latest thoughts on the portfolio composition and whatnot?

Sure. I think in the short run, both disposition and acquisition are probably challenging, given the lack of recent trades and the uncertainty in the market. So I'm not sure we would feel comfortable going to market to either acquire or dispose in the short run. In the longer term, as you know, we are very equipped to operate and develop, if necessary, mixed-use communities. And we believe these ecosystems continue to drive value in markets such as this. And so, if we see an opportunity, we'll prepare to strike, but I don't see that happening this year, if you will, but we'll continue to keep our eyes peeled. We don't want to rule anything out, but I think, to answer your question, we are always looking for an opportunity to use our competency, and I would characterize one of our main competencies as operating and executing on these mixed-use ecosystems. In terms of office, I think the jury, from a market's perspective, is still out. I will, quick commercial here, say our office is 97.5% occupied, frankly, and we're happy with that. I hope the market continues to become happier about our office product, and we'll continue to advertise that. But I don't think you're going to see us rush out to do an office. That being said, we are comfortable with the office that we do have, and it's primarily, as you know, located in a mixed-use community, so back to the mixed-use story and kind of our core competency.

Great. Thank you. And if I could just squeeze in one more kind of on that point with office, the leasing spreads have been pretty strong over the last couple of quarters. I think they've averaged over 20% the past four quarters. So I'm just curious, kind of a two-part question. One, what type of annual escalators are you baking into those leases? And obviously, not much rolling over the next year or two. I know you said you've addressed most of the major expirations and obviously not much space to lease over 97% occupied, but how sustainable would you say those spreads are, looking out over the next couple of years, just kind of based on in-place rents, escalators, and today's market rents, assuming no major changes?

Yes, I believe we are in a good position. Typically, we see annual escalators of 2% to 3%, and we have secured 10-year terms on our leases, which provides a stable foundation with credit tenants. The demand in our properties, especially in Town Center, enables us to meet those escalation rates while benefiting from the long-term agreements. We feel positive about our strategy of minimizing risks in the office space, and it is evident in our occupancy rates and the limited turnover in the near to mid-term.

Great. Thank you very much.

Thank you. Your next question comes from Viktor Fediv with Scotiabank. Please go ahead.

Well, good morning, everyone, and thank you for taking my question. I have a question on the kind of retailer's tenant watch list. I know you mentioned a couple of tenants that went bankrupt already, and you have already, if I'm not mistaken, 85% of allies or interest for these spaces, but just trying to understand what are the next potential problem tenants, and what is your exposure to those ones?

Thank you for the question, Viktor. From my perspective, and Matt may want to add his insights, there are three retailers that come to mind: JOANN, Party City, and Conn's. As I mentioned in the prepared remarks, we are currently engaged with 85% of this situation, either through leases or letters of intent, with rents expected to be 20% to 25% higher. This indicates a strong interest in that space. While there might not be a overwhelming demand, there are definitely interested parties approaching us for discussions. I'm pleased to report that our team has secured agreements on 85% of these, which is encouraging. There are certainly smaller shops of 1,000 to 3,000 square feet available, but as I noted earlier, we're in the process of significantly reducing our major risks. For instance, we recently renewed our lease with Nordstrom Rack for 32,000 square feet, which was a significant achievement for us. We are focused on securing these larger deals while also addressing smaller opportunities, but overall, we've largely managed the major concerns within our portfolio for the short- to mid-term.

Got it. Thank you. And then, sticking with the risks, but probably switching to the multifamily segment, in particular Baltimore submarket, do you see any impact from rest and Johns Hopkins cut in financing, and in particular, because you have new asset coming online there, is there any cannibalization in occupancy as well, so just trying to understand some color for that submarket and multifamily component?

Sure. To-date, we haven't seen, or at least we can't tell if there's an impact from the Johns Hopkins funding situation. I would say we have seen some of our residents interested in assigning leases next door at Allied which we think is a good thing. Occupancy seems to be holding, and the rate seems to be holding. And as we said to the market, we want to be very careful here that we don't cannibalize ourselves. But certainly, I think it's a testament to the quality of the product that's being offered up there, that our tenants are essentially, our residents are essentially moving from one high-quality asset, trophy asset, to a newer trophy-quality asset. And look, we've done a lot of calculus on this, and that's as far back as two years ago, I've been conveying to the market that we want to be very careful about the lease up. We do get questions about stabilization, and we've said, hey, look, this needs to be thinking 18 to 24 months such that we can maintain the market rents that we want to maintain to keep a healthy ecosystem there. So I think there's also the added benefit of T-Rowe employees and the added traffic in that area. There are a couple of thousand more employees there, and people are coming back to the office more than they were two years ago, so I think these are all, in my mind, drivers of increased demand over time relative to where we may have been 12 to 24 months ago.

Got it. Makes sense. Thank you.

Yes, sir.

Thank you. Your next question comes from Rob Stevenson with Janney. Please go ahead.

Good morning, guys. Shawn, to ask the tenant question a little bit differently. You have leases on, I guess, a little over 6% of the entire portfolio rolling over the remainder of '25 and about 12% of the retail portfolio in '26. Any tenants of impact that have either told you that they aren't renewing or look like that they may be iffy to renew, maybe not on a tenant watch list, but just because of whatever their changing needs are space-wise or location-wise that might not renew that might impact you guys looking forward?

Yes, thank you for the question and good morning. Let's start with the most significant upcoming rollover, which is in the retail sector. It's for Office Depot in Durham, covering 28,000 square feet. We believe they may not renew, but we have a prospective backfill identified and are actively working on it. We are also in discussions with a Staples, and all signs point to them renewing their 19,000 square feet. Another renewal in 2025 is a Ruth's Chris store located in Virginia Beach, which we have successfully renewed for 10 years following the first quarter; you will see this reflected in the second-quarter statistics. In 2026, there’s a Safeway for 55,000 square feet that we renewed for five years. Additionally, there's a Harris Teeter for 52,000 square feet, which is the best performer in the market, indicating a strong likelihood of renewal. If they don’t renew, we are confident another high-end grocer will want to take over that space. I anticipate seeing renewals, but the primary focus, as I mentioned, is ensuring we secure that Office Depot and the 28,000 square feet with the backfill we are pursuing.

Is it likely, if it winds up coming back to you, is that likely to be a multi-tenant space or at 28,000 square feet? Where is that tenant pool deep enough to release that at this point?

We've got options that could do both. I think, from my perspective, if we can fill it with a high-quality tenant that's able to absorb that space, so be it, if not, we can arrange a situation like we've done at Bed Bath here in Virginia Beach and have a two- or three-tenant, but we're comfortable that there's not a lot of drag there. That deal expires on the 31st of this year, so expect to have us having some more tangible conversation with you in the quarters to come.

Okay. And then back to your earlier comments about the disposition market being, I guess, a bit frozen to paraphrase you. If one of the options comes up to purchase one of the apartments out of the Mez portfolio, if the disposition market doesn't allow you, I assume that, given the cost of common, you probably wouldn't issue equity here, are you guys comfortable with temporary leveraging up using the line of credit to close a deal to get a high-quality apartment property in the mix? Do you push that out if that's the option? How are you guys thinking about that at this point in time?

Yes, I think to your point, we don't want to take anything off the table, Rob, right? But if there were something attractive enough for us to look at, we would want to, to your point, kick the can on it and see if we can't keep a line of sight on it for long enough to get maybe some better capital availability or arrangement in place. My comment about disposition, please don't make a mistake. I have people calling all the time about wanting to buy assets. My view on this is, let the market settle down a little bit so that we can really understand what comps are. I'm not sure there are great comps out there right now. Back to the acquisition side, I mean that's certainly a source of capital. If we saw something we wanted, we can trade quickly and purchase it, assuming that it's fitting within our core strategy and that the sponsor developer is willing to sell it to us at a price that works. So I think, yes, a lot of algebra there, but to answer your question, we're not wild about obviously selling common at the price as we said today, and obviously, we're sensitive to leverage. I think there's a little bit of a dance there. Matt, you want to add anything to that from the balance sheet standpoint?

Just as a great question, Rob, just to say that we have spent a lot of time over the last year or so trying to be very disciplined and we're working very hard to get the leverage in a range that the investors, the shareholders are more comfortable with. So as Shawn said, there'd be some puts and takes on the algebra there and the calculation, but we've committed to the market that we're going to be disciplined capital allocators and we would have to look at that holistically with respect to where our cost of capital and where the cost of debt is today.

Okay. And is T-Rowe now paying full rent or is there still ramp up left in that lease to get full rent for them?

Yes. So T-Rowe started paying rent or they have been paying rent back since August. The rent commencement date and the move in was March 7th. Obviously, as the project closes out, there will be a true up here in the last little bits as the contractor finishes and finalizes that.

But you're recognizing rent as of March 7th?

Yes, we're recognizing rent, not prepaid, recognizing true rent as of March 7th.

Okay. So the second quarter should be a full, represent a full quarter of GAAP rent for T-Rowe?

Yes. And Rob, you will see that for us come in as a FFO contribution. It's an off-balance sheet JV. So our 50% comes back as an FFO contribution after debt service has been taken at the property level.

Okay. And then last one for me, there's five redevelopment projects listed in the supplemental totaling a little over $19 million. Have all of those projects started and are they already sort of either in the $80 million construction backlog or flowed through previous numbers? Just trying to get a feel for whether or not some of those haven't started and will hit the backlog at some point or whether or not that's basically already accounted for in the backlog, either past or present?

Got it. Thank you. I think probably the best way to run through these five, they're relatively small, Rob, to your point. So it's not going to be a tremendous kind of bubble in the backlog. Liberty Apartments is nearly complete. You're probably looking at a Q3 kind of lease-up. I think actually we've already signed paper for residents on those two, on those apartments. So that's an awesome, kind of small but awesome uplift story there. Columbus Village should be in the numbers. It's in progress, as you know. We're looking at Q4 for the retailers. Potentially the grocer will slide into Q1 of next year. Let's see, Southgate Square still working on that deal, so that's not in a number yet. Consolidation of company operations, that's kind of an internal move here. You haven't seen that yet, and then Brook Square, still talking to the kind of site work early planning folks on that one. But to be clear, these would not be in backlog because they're internal development projects, right? So you're not going to see that in the third-party backlog. Some of that may show up in our kind of broader backlog or broader work scope, but they won't be in the third-party backlog, as you know. We won't be able to recognize field notes.

Okay. Thanks, guys. Appreciate the time.

Yes. Thank you, Rob.

Thank you. There are no further questions at this time. I would like to turn the call back over to Shawn Tibbetts for closing remarks.

Thank you all for joining this morning. We appreciate your attention, appreciate all the questions. Just to our team who's listening out there, our partners, our investors, we appreciate your confidence in us. We look forward to continuing to improving the quality of this story and this great company. And I look forward to talking to you on the road in the next quarter, and again, appreciate your support. I hope you have a nice weekend. Take care.

Ladies and gentlemen, this concludes today's conference call and webcast. Thank you so much for your participation. You may now disconnect.