Armada Hoffler to Invest in South Carolina Retail Development Project

SUMMERVILLE, SC—Armada Hoffler Properties Inc. reports today it will invest in Nexton Square, a new open-air lifestyle center currently under construction here.

The Virginia Beach, VA-based REIT states that it will provide mezzanine loan financing that, combined with the proceeds from a senior construction loan, will complete the developer’s capital stack.

The company will also provide construction management/development services for the project and will have a below market option to purchase the project upon completion.

Louis Haddad, president and CEO of Armada Hoffler Properties, states that the company intends to exercise its purchase option upon completion and may use the asset as a replacement property in a tax-free exchange.

The initial phase of Nexton Square comprises 120,000 square feet across 13 buildings and is more than 75% pre-leased or under letter of intent. The initial tenant spaces are anticipated to be delivered in the first quarter of 2019 with full completion by the end of 2020. Subsequent phases for an additional 28,000 square feet remain subject to lease-up. The total estimated cost of the project at full build-out is $45 million.

Nexton Square is located at the entrance to a new 4,500-acre master-planned community and will serve as the retail gateway to more than 10,000 new single-family and multifamily residential units with plans for up to 148,000 square feet of space for local retailers, restaurants, and service providers.

“We are pleased to announce our fourth project in the growing Charleston MSA,” says Haddad. “Centrally located between the Boeing production facility to the south and the new Volvo assembly plant to the north, the Summerville submarket sits squarely along the path of growth in the region. As an integrated component of Summerville’s newest residential community, Nexton Square is strategically positioned to capitalize on that growth.”

The company also announced today results for the quarter ended Sept. 30, 2018. Armada Hoffler reported net income of $5.7 million, or $0.09 per diluted share for the quarter compared to net income of $10.5 million, or $0.17 per diluted share, for the quarter ended Sept. 30, 2017.

In late July Armada Hoffler Properties announced plans to build a new 325,000-square foot mixed-use building next to the Point Street Apartments as part of the Harbor Point development. Harbor Point is a 27-acre mixed-use development between the historic Fell’s Point neighborhood and the Inner Harbor East area.