About Louis Haddad
Louis Haddad, president and CEO of Armada Hoffler Properties, discussed the company’s acquisition of the Exelon Building in Baltimore in 2022, describing it as a LEED Platinum building that houses Exelon Constellation and represents a commitment to greener energy. He noted that the company exited the student housing sector by selling assets in Charleston and a Johns Hopkins project, using the proceeds to fund the purchase. Haddad stated that the company has focused on ESG for over 40 years and emphasized transparency and social responsibility in its public-private partnerships with cities and universities. He also said that prior to the pandemic, the company earned $1.17 in normalized FFO with a stock price of $19, and that in 2022 it was on track to earn the same amount with a stronger earnings makeup, while the stock price was around $14.
In earlier interviews, Haddad addressed the company’s response to economic downturns, noting that the management team had navigated five recessions. During the pandemic, he said the company worked with tenants, conserved cash, and suspended its dividend temporarily, while delaying four development projects to wait for clearer economic conditions. He expressed confidence that opportunities would emerge in 2021 and 2022, particularly from tenants in expansion mode and from projects controlled by others that might come back to market. Haddad also highlighted the company’s long-standing business model of manufacturing real estate through development rather than acquisition, and its focus on high-barrier-to-entry markets across multifamily, office, and retail properties.
Source: AI-verified profile updated from Louis Haddad's recent appearances.
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Transcript (11 segments)
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Sarah Walks0:01
I'm Sarah Walks in Quito, in conjunction with NAREIT Street Week 2020 Virtual Investor Conference. I'm joined by video link today with Lou Haddad, President and CEO of Armada Hoffler Properties. Welcome.
L
Louis Haddad0:18
Thanks very much. It's good to be here.
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Sarah Walks0:20
Armada Hoffler has weathered a number of recessions in the past. Are you applying lessons from those experiences as you tackle the uncertainties prevalent today?
L
Louis Haddad0:29
Yes, that's a great question. We, fortunately or unfortunately, this is our fifth recession essentially with the same management team, so we know the routine. We know it well. It's a fairly simple formula. Number one is to work with your tenants. We found that helping them through these kinds of times is a lot better than letting them go their own way and potentially vacate the space. So we work with our tenants extensively to work through the process. Secondly, is to conserve your cash. That's always been the mantra here, particularly in tough times. We made the very difficult decision as the largest shareholder to suspend our dividend for this past quarter, or for the current quarter, just until we have a better feel for how things are going to play out. And I think perhaps the most important aspect for us that's worked four times in the past, and we believe it'll work this time, is to get ourselves ready to outperform our peers as soon as we get the all clear. And hopefully that'll be this fall. But we want to be ready to take advantage of what should be a lot of opportunities in the market come the latter part of this year and of course in 2021.
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Sarah Walks2:08
Are you having to adjust your development pipeline at this time?
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Louis Haddad2:11
We're adjusting it in a number of different ways. One, as I said, we want to conserve cash at this time. We have four projects teed up to start this summer. We're delaying all four of those. We have that ability. We control the land either outright or through options, and we don't want to launch until again we feel better about what the economy is going to look like on the other side of this thing. So in that respect, we hope to start the development process later on this fall with at least a couple of them. But even more importantly, adjustment wise, we're seeing a lot more opportunities come our way, and so we believe there's going to be a very healthy pipeline to execute on in 2021.
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Sarah Walks3:01
Looking further ahead, to what extent could Armada Hoffler take advantage of opportunities that might emerge out of current market disruption?
L
Louis Haddad3:10
So there are numerous. Like I said, in the past four recessions, there's been a number of opportunities that showed up in places that you wouldn't intuitively recognize until you get there. And the same is going to be true here. This is not going to be any different, other than the fact that the recovery may be quicker than normal since the economy was so healthy going into this. So we believe that in particular on the development side, there's going to be a number of opportunities that have been controlled by people that aren't going to be ready to execute. They're going to come back onto the market, and we want to be poised to take advantage of those. We're also seeing a number of our tenants who are maintaining their health and even growing through this process that are going to be in full expansion mode come 2021, 2022. We want to be positioned with them to execute on new assignments.
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Sarah Walks4:14
Thanks for joining me today.
L
Louis Haddad4:17
Thanks, I appreciate you having me.
S
Sarah Walks4:21
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