Armada Hoffler (NYSE: AHH) Chairman, President, and CEO Shawn Tibbetts says the launch of a new strategic direction for the REIT, which involves paring its portfolio to focus on retail and office properties, is all about creating a trajectory for continued, consistent growth that drives long-term shareholder value.
The Virginia Beach, Virginia-based REIT, founded in 1979, has spent four decades developing, building, acquiring, and managing institutional-grade office, retail, and multifamily properties primarily in the Mid-Atlantic and Southeastern United States. The company will rebrand as AH Realty Trust, Inc . (NYSE: AHRT) in early March.
In an interview with REIT.com, Tibbetts, who assumed the CEO role at the start of 2025 and became chairman this January, emphasized the solid foundation built by his predecessors while acknowledging the need to produce more value for shareholders. To achieve that, he said, “we need to decrease leverage and unlock some of the value pinned up in the portfolio—specifically in the multifamily space.”
The company has entered into a letter of intent with a global real estate investment management firm for the potential sale of 11 of the 14 multifamily assets in its portfolio. In addition to exiting multifamily, Armada Hoffler will step away from its construction business and all of its real estate financing platform investments.
“It was the right decision to realize the value of some of the real estate that we had, that maybe the public markets weren't valuing, and use that capital to reduce leverage while also exiting the fee income business and really creating a more focused and streamlined company,” Tibbetts said.
“Simplicity breeds success and complexity sometimes creates confusion. For us, it made a lot of sense to simplify the story such that investors can appreciate the underlying real estate values,” he added.
Core Competencies
Tibbetts described retail and office as the REIT’s “core competencies…we play well in the space.”
While noting an “extremely good” credit profile for its office portfolio, and a 96.5% occupancy rate, Tibbetts said the focus going forward is primarily on retail. “We think that that probably is most appealing to our investors at this point in the cycle.”
Tibbetts pointed to limited new supply in the retail space as a tailwind. “As the economy grows and as time progresses, the supply demand relationship as it relates to retail continues to lean in our favor. That’s why we like the space; it's a good place for us to be given our cost of capital and the long run health of retail,” he said.
Grocery-anchored retail and strip centers already comprise a meaningful portion of the REIT’s retail portfolio, and these are the segments where Tibbetts thinks the most value can be added in future. “It's already part of our DNA and we'll continue to lever our expertise in those markets,” he said.
To that end, Armada Hoffler will continue to take a data-driven approach, studying population and wage growth, foot traffic, “and all of the things that make a center healthy,” Tibbetts noted. “Data tells the story and data-driven decisions are exactly where we want to be, and where we will be, as we continue to move forward.”
Tibbetts said he expects the REIT to expand its retail footprint through a combination of “appropriate acquisitions in the appropriate markets,” alongside a more “surgical approach” to development and redevelopment than in the past.
He explained that it makes more sense for Armada Hoffler to partner with third party developers and undertake joint venture-style development, rather than taking on projects internally. “We have a lot of good partners out there who play in the space so we're excited about the opportunities there,” he said.
Long-Term Focus
The rebranding and realignment underway at Armada Hoffer coincide with Tibbetts assuming the board chairman role. Other leadership developments currently underway include the expansion of the executive team with cross‑industry expertise spanning finance, operations, logistics, and infrastructure to drive operational execution.
“We're continuously bringing diverse skill sets to the table in order to challenge long-held assumptions,” the CEO said. “I’ve already taken the opportunity to introduce some of the talent that's present in our team. It’s good for the market to see and understand the folks who are actually moving the needle internally to create shareholder value every time.”
Meanwhile, another core feature of Armada Hoffler’s strategy that Tibbetts wants the market to appreciate is the REIT’s focus on the long-term consequences of the decisions it makes today.
“We're going to make the hard decisions and the right decisions to ensure the long-term health of the company is in shape. We've done a lot of work to get here, but I couldn't be more excited about where we are—and more specifically where we're headed,” he said.