AHH - NYSE

Good morning, ladies and gentlemen, and welcome to the Armada Hoffler Properties, Inc. Fourth Quarter 2025 Earnings Call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press 0 for the operator. This call is being recorded on Tuesday, 02/17/2026. I would now like to turn the conference over to Chelsea D. Forrest, Vice President of Investor Relations. Please go ahead. Good morning, and thank you for joining Armada Hoffler Properties, Inc.'s Fourth Quarter 2025 Earnings and 2026 Guidance Conference Call and Webcast. On the call this morning, in addition to myself, is Shawn J. Tibbetts, Chairman, President, and CEO; Matthew T. Barnes-Smith, CFO; and Craig Romero, EVP of Asset Management. The press release announcing our fourth quarter earnings along with our

supplemental and guidance packages were distributed yesterday afternoon. A replay of this call will be available shortly after the conclusion of the call through 03/19/2026. The numbers to access the replay are provided in the earnings press release. For those who listen to the rebroadcast of this presentation, we remind you that the remarks made herein are as of today, 02/17/2026, and will not be updated subsequent to this initial earnings call. During this call, we may make forward-looking statements, including statements related to the future performance of our portfolio, the potential dispositions of our multifamily portfolio, our real estate financing programs, and our construction business, and the use of the proceeds from such dispositions, our rebranding and the efforts thereof, the consequences of our strategic transformation, the impact of acquisitions and dispositions, 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, 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 difficult 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 in 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. Yesterday, we formally announced the rebranding of the company as A H Realty Trust, effective March 2, which marks the defining moment and more about the transformation of the company and our path forward.

This past year marked a pivotal period for the company, particularly with respect to capital allocation, balance sheet strategy, and how we operate the business. I will begin this morning by discussing the strategic decisions we announced yesterday and the rationale behind them. I will introduce Craig Romero, EVP of Asset Management, to talk through highlights from the portfolio and Matt will cover our fourth quarter results and provide details on 2026 guidance. I stepped into this role one year ago with a clear objective to evaluate every aspect of our business: our portfolio, capital structure, operating model, and long-term positioning. Over the past twelve months, we have done exactly that, reviewing every layer of the business, challenging long-held assumptions, and focusing on where we believe we can create the most durable value for shareholders. This comprehensive process, backed with full support from the Board, resulted in a clear path that we believe positions the company to maximize shareholder value over time.

At our core,

we are a public REIT focused on well-positioned retail and office assets in growing markets. Alongside the relaunch of Armada Hoffler Properties, Inc. as A H Realty Trust, we announced the planned exit and divestitures of our multifamily portfolio and fee income businesses, including construction, to improve the quality and predictability of our income stream and meaningfully reduce leverage. I am pleased that we have already made substantial progress on these initiatives. We are under a LOI for 11 of our 14 multifamily assets with a global real estate investment and management firm, following a disciplined and targeted marketing process that began months ago, drawing strong interest from multiple credible parties. These negotiations are materially far along and we believe we are approaching final terms at an attractive price point and value. Despite the high quality of our assets, public market valuations do not reflect the underlying private market value of the portfolio. Exiting the multifamily portfolio unlocks significant embedded value by harvesting the arbitrage between public and private market valuations and accelerates our deleveraging program. In addition, the exit of our construction business is effectively complete, and we are substantially finalized on terms with the buyer. Lastly, we have executed a LOI with an institutional buyer to acquire the interest in two of our four real estate financing investments, and we are in discussions with our partner to exit a third. The remaining investment is currently in the market with comparable cap rates in the low five cap range. We expect that transaction to be completed in the near term, derisking the business. Given this progress, we have removed the associated revenue streams from our 2026 outlook. With this transition, we believe we will improve the company's long-term growth trajectory and position this

with inconsistent income

and no longer deploying capital towards sectors where our scale and advantage were limited. We believe in a streamlined operating model, with significantly reduced leverage, we will be a stronger, leaner, and more agile firm.

Better positioned,

to produce predictable earnings and sustainable cash flow growth in 2027 and beyond. At the same time, we are intensely focused on the operation of the company's retail and office portfolio. We believe the best way to drive durable value is to be the best operator in our markets, maintaining rigorous and fee income businesses. Our operating team holds a strong conviction that exiting the multifamily sector, strengthening the balance sheet, and concentrating on sustainable cash flow and disciplined growth most benefits the long-term value of the company. While the quarter itself is not the focus of today's call, it reinforces the stability of our retail and office assets and provides a strong foundation as we enter 2026. As we discuss guidance for the new year, as previously mentioned, it is important to note that 2026 guidance reflects the discontinued operations of the multifamily portfolio and the fee income portions of the business. While 2026 represents a transition year for the company, I want to underscore that throughout this period, we continue to maintain full dividend coverage from the cash flows generated by our operating properties while also meaningfully reducing debt. To provide added transparency around this shift, we included an FFO bridge in our guidance materials posted to our investor website. The bridge walks from reported 2025 FFO to a pro forma 2025 FFO that removes discontinued operations, and then to post-transformation FFO, which reflects the company as it will operate going forward. By removing contributions from the construction management business, the real estate financing platform, and the multifamily assets, investors can clearly assess the value of the streamlined retail and office portfolio. Importantly, by the end of the transformation, leverage is expected to improve by approximately two full turns, further strengthening the balance sheet and enhancing long-term resilience. Matt will discuss the guidance in detail. As we look ahead, our focus is on discipline, high quality, consistent growth, and a simplified operating model. With lower leverage and a clearer operating model, we are in a stronger position to pursue accretive acquisitions that offer embedded upside in key growth markets that meet our fundamentals. This transformation only happens with a dedicated team. 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. It begins with our people, and we are confident in the team we have assembled to execute this plan. This marks a new day for the firm, and I am excited about reducing risk and positioning the company for future growth. As we enter this next chapter, we do so with a clearer strategy, a more focused portfolio, a streamlined organization, and a stronger financial foundation. We are not simply repositioning the company; we are fundamentally changing the quality of the business. We believe this transformation will result in a significantly stronger foundation that positions us to deliver predictable earnings, sustainable cash flow growth, and long-term outperformance. With that, I will turn it over to Craig Romero, EVP of Asset Management. Craig has been with the company for more than a decade and has been deeply involved in every aspect of our real estate operations. In addition to his extensive real estate experience, he brings a Big Four public accounting background, which further strengthens his strategic and financial oversight. He leads our asset management team with exceptional focus and discipline, and his deep expertise continues to be instrumental in driving our success. Given his experience and intimate knowledge of the portfolio, I am pleased to have him join the call for the first time to walk through the portfolio highlights. Thank you, Shawn, and good morning, everyone. As Shawn outlined, with the portfolio now fully focused on retail and office, our attention is squarely on execution at the property level. I will briefly cover fourth quarter operating performance, and then spend time on what we see ahead for the portfolio. Retail same-store NOI for the quarter was up 5.6% on a GAAP basis and 3.4% on a cash basis, driven by new leasing and rent commencements across the portfolio as well as positive renewal spreads of 15% GAAP and 10% cash. Specifically, fourth quarter cash results reflect rent commencements for long-term backfill tenants of anchor spaces in Atlanta, Durham, and Virginia Beach. Retail same-store results year-over-year were up 1% GAAP and down 1% cash. Weighing on both fourth quarter and full year same-store results was anchor space vacancy resulting from the bankruptcies of Conn’s, Party City, and JOANN Fabrics, totaling 92,000 square feet across the portfolio. These vacancies are reflected in year-end occupancy just under 95% that was temporarily elevated in the third quarter by short We anticipate rent commencing on roughly a third of the backfill space in 2026, with the balance starting by mid-2027. Looking ahead, we expect retail same-store NOI growth in 2026 to be supported by rent commencement at The Interlock, including Atlanta’s first and only F1 Arcade that opened earlier this month, as well as our successful redevelopment of Columbus Village. In the fourth quarter, both Trader Joe’s and Golf opened in the former Bed Bath & Beyond box at Columbus Village. Since opening, the new Golf Galaxy location ranks in the top five nationwide in terms of foot traffic, and the new Trader Joe’s store has seen more than double the number of visits. Successfully, we released all of Columbus Village at 60% higher rents. At full occupancy, the redeveloped Columbus Village is expected to generate over $1,000,000 of new ABR, the majority of which we anticipate realizing in 2026.

At Town Center

The NOI impact is diminished, given the below-market rent structures of both leases. Market conditions continued to favor existing brick-and-mortar retail with tenant demand far exceeding new supply. Our portfolio of shopping centers and mixed-use retail assets remains well-positioned to capture this demand as demonstrated by our team’s ability to lease space at

spreads. We are

in our team’s ability to relet both West Elm spaces at two to three times rent commencements in Town Center, specifically to Columbus, as well as Wills Wharf and Harbor Point. Renewal spreads during the quarter were positive 9% GAAP to 2.5% cash. Over the course of 2025, occupancy at The Interlock increased nearly 600 basis points, ending the year at over 94% leased. Year over year, office same-store NOI increased 6%, increased 500 basis points during the fourth quarter, partially offsetting our recapture of 8,000 square feet of space in 4525 Main. Decrease in occupancy during the quarter to 96.4% but we are already at lease with a backfill tenant at a double-digit re-leasing spread with lease execution anticipated by the middle of this year. By the second quarter of this year, we expect to complete the downsize and relocate. Our intentional move to occupy the most cost-effective space in A H Tower unlocked 38,000 square feet of premier workspace, all of which has been re-leased at an average rate of $35 per square foot, the highest rents in the market, creating $1,300,000 of new ABR that we expect to fully realize in 2027 with partial recognition in 2026. Looking ahead, we expect same-store NOI

growth

at One City Center in Durham, and Wills Wharf in Harbor Point. As a reminder, we reclaimed 30,000 square feet of space from WeWork at One City Center in the second quarter of this past year. In the fourth quarter, we negotiated the recapture of 9,000 square feet from an existing tenant at Wills Wharf in exchange for a $3,100,000 upfront fee and, in the process, consolidated most of the vacancy in the building onto a single floor. This proactive and intentional move allowed us to accommodate an existing tenant’s desire to rightsize their footprint while also giving us the flexibility to pursue larger floor prospects in the market. While we are not forecasting any new rent commencements at either One City Center or Wills Wharf in 2026, we are seeing good activity and interest in the market and remain confident in our team’s ability to re-lease the space. At Southern Post, we expect full rent commencement by existing office tenants in 2026 and we are seeing strong interest and activity on the balance of the office space. Office portfolio fundamentals are strong with nearly eight years of WALT, high-credit tenancy, only 1.7% rollover in 2026, and our team’s demonstrated ability to lease space and grow rents. We see continued growth opportunity across both our retail and office portfolios through proactive leasing and tenant retention, disciplined expense management, mark-to-market adjustments on new leases, and targeted redevelopment and capital investment for the next year, and the strategic transformation of the business. I will close with an update on our balance sheet and debt strategy

as we position the company for the next phase. This quarter and full year represents an important inflection point for the company, both in terms of financial performance and in the ongoing evolution of our platform, portfolio composition, and capital structure. Starting with the fourth quarter, our results reflect continued operational excellence across the portfolio against a complex macroeconomic and capital markets backdrop. For the fourth quarter of 2025, normalized FFO attributable to common shareholders was $29,500,000 or $0.29 per diluted share, above our expectations and guidance.

FFO

attributable to common shareholders was $23,100,000 or $0.23 per diluted share. AFFO came in at $17,800,000 or $0.17 per diluted share. Same-store NOI for the portfolio increased 6.3% on a GAAP basis and 7.1% on a cash basis. Turning to the full year, 2025 was defined by foundational work repositioning the company with a strong focus on balance sheet discipline. For the full year 2025, normalized FFO attributable to common shareholders was $110,100,000 or $1.08 per diluted share, above guidance. FFO attributable to common shareholders was $79,400,000 or $0.78 per diluted share. AFFO came in at $75,600,000 or $0.74 per diluted share

shift to

simplification of the platform, higher quality and more predictable earnings streams, and enhanced balance sheet resilience through positive cash flow. Starting the year with rightsizing of the dividend represents not merely a financial transaction, but a structural evolution of the company. As we look forward, we are evolving into a more focused, more transparent, and more predictable operating platform. Shawn discussed the planned disposition of the multifamily portfolio, the real estate financing platform, and the construction

entity.

I will now walk through

management’s estimates related markets, and easier to value and more closely aligns with long-term institutional capital. Post transformation, we will be positioned as a simplified pure-play retail and office REIT characterized by focus on recurring contractual cash flows with no reliance on fee or non-recurring income. This year, we report our results in the most fundamental and transparent way, using NAREIT-defined FFO for our earnings metric, cash same-store growth metrics to be consistent with other REITs in our space, and leverage at a net debt to EBITDA level. We will be guiding towards NAREIT FFO less the discontinued

of the general

contracting and real estate services business in 2026, disposition of the multifamily portfolio with the exception of Smiths Landing in 2026, realization of The Allure at Edinburgh in mid-2026, exit of the real estate financing portfolio in 2026, blended retail and office same-store NOI cash growth of just over 1.7%, acquisitions of approximately $50,000,000 of retail properties with a cap rate range of 6.25% to 7% in 2026, secured debt paydowns of approximately $270,000,000 as a result of the multifamily disposition, net unsecured debt paydowns of approximately $400,000,000. Page four of the guidance presentation illustrates an FFO bridge starting at our reported 2025 NAREIT FFO of $0.78 per diluted share and walking through the transition, ending with management’s estimated NAREIT FFO for the full year post transition of $0.64 per diluted share. As you can see, post transition, we expect to significantly reduce our leverage into a net debt to EBITDA range

That gives some context to the expected FFO growth post transformation. There is no question that deleveraging brings some dilution that dramatically decreases risk and backstops the dividend. Most importantly, page six illustrates our AFFO payout ratio both in 2026 and post transition. Management committed to the market that the cash from the properties would cover the cash dividend going forward and we do not intend to waver from that sentiment. You will see in the post transformation column of the table that there are no non-cash entries in the change in fair market value of derivatives. I will discuss our x-rate long-term debt as our hedges mature at the 2026. Finally, the guidance presentation focuses on growth. The reduction of debt enables the company to have a balance sheet that will unlock our ability to grow. Page seven shows post transformation, our earnings profile will consist of roughly 50% retail and 50% office NOI with 94% of that NOI in mixed-use communities. Page eight demonstrates the potential opportunity and estimated NOI trends, organic growth, planned 2026 acquisition basis, demonstrating strong retail and office NOI performance, prioritizing earnings quality, durability of cash flows, and balance sheet strength over short-term growth metrics. Turning to the balance sheet, our capital strategy is anchored in three principles: resilience, discipline, and proactive risk management. We are actively managing our upcoming maturities with three scheduled maturities in the near term: a $95,000,000 unsecured term loan maturing in May 2026, Cane Street Wharf maturing in September 2026, and the Constellation Energy Building maturing in November 2026. Our approach to addressing these maturities is structured and multifaceted, centered around placing long-term fixed-rate debt either at the property or the corporate level. We are currently already in the market with each of these loans, receiving preliminary pricing and terms similar to our inaugural debt private placement, which closed last July. This long-term fixed-rates approach is designed to reduce volatility in our cash flow and earnings, enhance financial resilience, and ensure the company operates from a position of balance sheet strength. As the transformative initiatives are finalized and we use the capital to pay down debt, the company will be in a much better position to ladder in long-term debt private placements and other long-term fixed-rate debt, extinguishing our reliance on derivative products as they mature. I will now turn the call back to Shawn. Thank you, Craig and Matt. I will close by paraphrasing something Nick Saban often says.

The key to sustained success is getting the right people on the bus, aligned around the same principles and standards, and focused on executing at a high level. Over the past year, that is exactly what we have done. We are no longer the company we once were. We have streamlined, refocused, and rebuilt the organization in a way that reflects who we are today: aligned, disciplined, and operating with clarity of purpose. The days of being a sprawling, complex octopus are behind us. We are a new company with a sharper strategy, a stronger team, and a more accountable operating model. When focus, accountability, and alignment come together, results follow. With that, Operator, we are ready to open the line for questions.

Thank you. Ladies and gentlemen, we will now begin the question-and-answer. You will hear a prompt that your hand has been raised, and should you wish to cancel your request, please press star followed by the two. If you are using a speakerphone, please lift the handset before pressing any keys. One moment please for your first question. Thank you. And your first question comes from the line of Viktor Fediv from Scotiabank.

Good morning, everyone, and thank you for taking my question. Matt and probably Shawn as well. So in terms of your long-term growth trajectory, on page eight of your guidance presentation, you highlighted the potential for, like, $10,000,000 of annualized commercial NOI addition starting from 2027 and beyond, which implies around $150,000,000 of acquisitions if you just

ask him six and a half cap rate. So how do you plan to finance this, and what are your key assumptions, particularly around share price and debt cost? For these to be achievable?

Viktor, good morning. Thank you for the question. I think this starts with the theme here, right? We want to maintain the appropriate leverage point. Right? So we, I think, have done what we said we would do here and demonstrated we are willing to do what is needed to unlock the value of the existing portfolio. That said, we want to be balanced in our approach. We want to be disciplined in our approach, and we want to be consistent in our growth. So there is a balance here. To your point, we think there is obviously debt capital available, but at the right time, we would like to balance the capital stack by continuing to add equity. But we are not going to do that at any cost. Right? And so at the end of the day, the shares need to be trading at the right level relative to NAV for us to even think about that. So what you are seeing us project here is we think we can get to that point, and we think it makes sense in the out 2027 years, if

Got it. And then if you look, let us say, five years from now, where do you see A H’s real detract in terms of retail to office NOI split

Yeah. I think as we have talked about here, and thank you for the question, we like to operate and we intend to operate going forward where we can add the most value. I think it is pretty clear that we add the most value in both retail and office. In the short run, we are focused on retail and specifically the type of retail that we have in our portfolio, right? And we are somewhat agnostic, agnostic in that regard because again, we add the most value there. I think if you talk to Craig, and I am going to ask him to chime in here, you know, we have our eye on a couple of opportunities now. It does not mean we are going to pull the trigger. But as you are aware, we have embedded in the model about $50,000,000 of capital to outlay to go into acquisition mode if, in fact, that makes the most sense for us. But we are not beholden to that. Craig, do you want to add a little more color there? No. I think that is good context, Shawn. I will only add that, look, our team has shown the ability to continue to lease space and grow rents. And so we will look for acquisition opportunities that display those same fundamentals in the right target market: population growth, income growth, below-market rents, and the ability to drive and create value. So our eyes are open. We are always active in the market. And we look forward to executing on our strategy.

Got it. And then just a quick follow-up on that. So, obviously, you are looking within geographies where you have some expertise and competitive advantage. Just trying to understand how wide your opportunity set is now in terms of you have kind of plans to acquire $50,000,000 this year but how wide is kind of under consideration pool now for you, and what are the key metrics you are kind of paying the most attention to?

Sure. I think, Viktor, the answer is best rooted in that we like and meet our markets that have fundamentals our investment thresholds. A little more deeply there, markets with growth, markets with population growth. You know as well as I that we operate in secondary markets. That way, we can build a moat and be the best operator. We are not intending on going into Tier 1 cities and, you know, battling it out with folks that are 50 times our size. Our cost of capital and our expertise primarily exists in the secondary market. So we like markets that are a reflection of the markets that we are in today.

Markets and

what their growth looks like on a go-forward basis.

Got it. Thank you.

Thank you. And your next question comes from the line of Andrew Berger from Bank of America.

Great. Good morning, and congratulations on putting these plans into motion. Could you just talk maybe high level about your latest thoughts on mixed-use communities and whether these retail investments that you are targeting are still within mixed-use communities or are these separate? And I guess also to that point on the office side, you know, it sounds like you are not looking to invest in office at the moment. You know, maybe just any more

color there as you think over the next couple of years about that split that you were talking about before with the retail versus office, you know, if office is something you would be willing to sell if you get, you know, the pricing on those assets a bit more in favor.

Morning, Andrew. Yeah. We are, obviously, capable in the mixed-use space, right? We have quite a significant chunk of our portfolio that sits in mixed-use. So we like mixed-use. But that said, as I mentioned earlier to Viktor, we like all of retail. And we are willing to look at all of that retail. In terms of office, I will answer the latter part of your question first. We are capital allocators in the end.

And

that is what we focus on. So if there is an opportunity to harvest capital at an appropriate price, we will do so. We do not have intentions of doing so as we sit here today. But we think that the office market does recover, specifically the high-quality trophy-type assets that we hold. And so we will take a look

color on the multifamily dispositions. Just maybe anything around the pricing for that and any more color on the timing?

Sure. As you are aware, we are under LOI with 11 out of the 14 assets. To be clear, the remaining two, notwithstanding the Smiths Landing asset, we will take to market in near future. So I think the best way to describe this is, number one, we are looking at fair and competitive pricing relative to market comps on the assets that we own. We are thinking in the mid-5% cap range, just to give you a number. In terms of progress, we feel really good about this. The buyer as well as ourselves have been leaning in heavily here, and we have been working feverishly to get there. We made tremendous progress. Obviously, the goal is to derisk the company, remove the uncertainty, set ourselves up for healthy growth. So we want to make sure we keep kind of as our north star here, the deleveraging aspect: selling these assets, harvesting the arbitrage, and applying that to the leverage, driving down that leverage on our balance sheet. But, yeah, we feel good. I mean, we hope to come back to the market very soon and talk more definitively about the deal that we are able to get. So we are excited about that. Actually, I just want to say while I have an opportunity here, I am proud of this team and the amount of progress we have made, and we feel good about it, and that is why we chose to share this with the market today.

Great. Thank you. And maybe just one final one for me on the dividend. You did address the 95% payout ratio earlier. I guess the question is where would you like to see that trend over time? You know, it is 95% in 2026 as well as post transformation. Should we be thinking about it, you know, just over the next couple of years as trending lower from there? Like, can you just talk a little bit? Like, is there any other metric we should be looking at besides AFFO payout ratio just to kind of get a sense of, you know, how you and the Board are thinking about the dividend?

Sure. I think it is important to note that we were cash flow positive in 2025, which is great. Happy to get us there. Obviously, it was a challenging environment to get there, but I think that is the first sign of health. We expect to be cash flow positive in 2026, which is good. I think you should be thinking about this with us being conservative with our capital, right? And we want to pay out a nice dividend, but we do not want to overpay a dividend. So at the end of the day, you are not going to see us aggressively hike that. You are going to see us stay in compliance with the REIT standards, right? But also put the capital back to shareholders in an appropriate manner. I guess that is a long way of saying we are not in a hurry to hike the dividend. We are in a hurry to simplify this company and delever this company. And the dividend will fall into place as the company grows and as the cash flows grow.

Thank you. And your last question comes from the line of Jonathan Petersen from Jefferies. Please go ahead.

I was hoping you could talk about development as part of your long-term strategy for growth. It seems like in the near term, the focus is maybe more on acquisition of retail properties, but do you anticipate being a developer in the future?

Good morning, Jonathan. Thank you for the question. Great question. Obviously, development has helped build a good piece of the portfolio that we own today. That being said, as you are aware, cost of capital are up relative to where they were in our past. And although we are willing to do development where it makes sense, we believe there is a risk-adjusted spread that is required there. So we think the most accretive, given the timing, would be acquisition in the short run. That said, we are willing to do development surgically and in the right space, and I will just offer as a proxy the Bed Bath & Beyond conversion to Trader Joe’s, right? That was a quick conversion of an existing box. And as Craig mentioned, we experienced almost 60% increase over the former rents in a relatively short duration. So we are looking for surgical development opportunities, really thinking redevelopment. We do have conversations frequently about development with partners, but I think you are going to see us partner with others to do development as opposed to large-scale development pipelines as you have seen us deploy in the past.

Okay. That makes sense. I was hoping to maybe also get more context on the growth from your core businesses, retail and office, that is expected in 2026. I think the guidance is for 1.7% same-store NOI, but your fourth quarter growth number was quite a bit higher than that. So are there any sort of headwinds or move-outs in the office portfolio? And maybe are you able to parse out expected growth in office versus retail in 2026 on a same-store basis?

Sure. I will start by saying the team has done a tremendous job working ahead of the curve on move-outs and vacancies. And I think Craig can give you some more color here. But at the end of the day, we see upside. I think Craig mentioned the West Elm in the comments previously. We see opportunity there given the very low rent relative to the market there. So Craig and his team have been working on this. As you know, we take very seriously the rollover and vacancies, and we like to stay ahead of those. I think, if you do not mind, would you add a little more color on what you are seeing out in 2026 and beyond? Yes. Happy to, Shawn. And Jonathan, thank you for the question. Yeah. In my prepared remarks, I mentioned the anchor space that we got back with the bankruptcies of Conn’s, Party City, JOANN. We made a ton of progress there in terms of backfilling and leasing.

Still have a little bit of work to go.

Of course, with tenant build-out and move-in, there is lag in between former tenant exiting and new tenant commencing rent. So 2026 we are in that in-between period for the most part, and that is what you will see weigh

a bit on 2026 growth. With anticipated growth coming

in 2027 in the beginning and throughout 2027. So that is really what is dragging on retail results for next year.

Shawn mentioned West Elm. That is basically we did take back this first quarter.

At below-market rents, so we are excited, actually really excited, about taking that space back.

And the ability to re-lease at two to three times rent, bringing those spaces to market.

On the office side, not a ton of rollover there, right? So near-term risk is low.

And well-diversified across the portfolio.

The two things really

causing headwinds for us: the space at One City Center in Durham, which we have all known about and have been proactively managing, trying to mitigate, seeing good interest in the market there, as well as a little bit of space we took back at Wills Wharf to accommodate our existing anchor and to offer greater flexibility to prospects in the market. So all told, I think 2026 will be a little bit of a gap year in terms of that, with expected greater growth in 2027.

Thank you. That ends the question-and-answer session. I will now hand the call back to Shawn J. Tibbetts for any closing remarks.

Sure. Thank you very much. Thank you all for joining us today and your interest in our company. I just want to share with you, we could not be more excited about this. Our team is focused. Our team is intentional. And we are looking forward to putting the company on a growth trajectory. And that is really our message here, right? We are working feverishly to put the balance sheet in the place that it should be and set ourselves up for growth for the coming year. So thank you all for your interest today. We appreciate your time and your investment in us.