AH Realty Trust (AHRT) 2026财年第三季度业绩电话会：上调FFO指引

核心要点

• 2026财年第三季度调整后FFO为1530万美元，即摊薄每股0.16美元。 AFFO为1420万美元，即摊薄每股0.15美元。
• 同店现金NOI增长6.1%，其中零售物业增长6.8%， 办公物业增长5.2%。整体物业组合NOI达3510万美元。
• AH Realty Trust将2026全年调整后FFO指引上调至 摊薄每股0.57-0.59美元，并将办公物业同店现金NOI 增长指引上调至3%-4%。
• 季度末净债务与总调整后EBITDA的比率为7.1倍，低于 第一季度末的8.3倍。管理层预计已完成和待完成的资产 出售将在年末前将杠杆率降至约6.4倍。
• 近期的再融资交易消除了截至2029年前的重要债务到期风险。 固定或套期保值债务占比提高至96.2%，预计将在剩余资产处置完成后 达到100%。
• 已签约但尚未产生租金的租赁协议代表约650万美元 的年化基础租金，管理层预计大部分计租率差距将在2027年中期前消除。

关键财务数据

业务与运营表现

本季度零售同店NOI增长6.8%。受客流量增加和续租租金正价差支撑，购物中心同店NOI增长近8%。客流量同比增长6%，较2019年第三季度增长10%。主力店和小店续租现金租金价差分别为5%和7%。

综合体零售表现不一。因空置率上升，Town Center零售NOI同比下降10%。相比之下，在F1 Arcade开始起租的推动下，The Interlock的零售NOI增长了29%。零售物业组合拥有110万美元已签约但未入驻的年化基础租金，管理层预计大部分将在2027年确认为收入。

办公物业同店NOI增长5.2%。Harbor Point出租率为98%，而Town Center办公物业出租率超过99%，并实现了超过11%的NOI增长。随着租赁协议生效及免租期届满，The Interlock的办公物业NOI增长了30%以上。

在一名租户迁出后，位于达勒姆（Durham）的One City Center租赁出租率和实际计租出租率均降至67%。管理层将其43,000平方英尺的可用甲级办公空间确定为未来的租赁机遇。

办公物业组合的加权平均租赁到期期限超过七年，截至2027年到期的办公物业年化基础租金占比不足6%。近三分之二的租赁协议到期日在2032年或更晚。

AH Realty Trust已完成13项计划中的多家庭住宅资产出售中的11项。管理层预计Greenside项目将在未来几周内完成交割，Premier项目将在2027年第二季度交割。公司还退出了全部四个房地产融资项目及其总承包业务。通过转型，公司债务已减少近5亿美元。

管理层业绩指引

AH Realty Trust将2026全年调整后FFO指引上调至摊薄每股0.57-0.59美元。

公司还将2026年办公物业同店现金NOI增长预期上调至3%-4%，并重申了零售物业2.5%-3.5%的增长指引。

该展望计入了较高的再融资成本，但部分被债务余额下降和浮动利率风险敞口的消除所抵消。该展望假设Greenside项目的出售将在第四季度较晚时完成，且2026年剩余时间内不进行任何收购。

管理层预计年末杠杆率将达到约6.4倍，处于其5.5倍至6.5倍的目标区间内。公司表示，租赁出租率与实际计租出租率之间的绝大部分差距应在2027年中期前缩小，尽管部分租金起租日期可能会延长至2027年底或2028年初。

风险与关注领域

管理层预计第四季度同店NOI增速将有所放缓，部分归因于2025年第四季度的对比基数较高。公司还对The Interlock的几家娱乐租户采用了保守的坏账假设。

Town Center零售仍是物业组合中较为疲软的部分，季度及年初至今的NOI均下降10%。在出租率下滑后，One City Center也需要重新招租。

尽管杠杆率有所改善，但季度末仍高于公司的目标区间。能否实现预测的年末6.4倍水平取决于已完成及待完成的资产出售。

再融资使加权平均利率从上一季度的4.3%上升至5.2%。管理层表示，多项租赁协议中平均约3%的合同租金递增条款应有助于随着时间推移消化较高的利息支出。

分析师问答环节亮点

管理层表示，资本配置将在股票回购、重修开发和选择性收购之间保持平衡，同时将杠杆率维持在5.5倍至6.5倍之间。公司强调，鉴于目前物业组合内具备内生性增长管线，公司没有迫切寻求交易的压力。

约有45万平方英尺的租赁合同将于2027年到期，其中包括约10万平方英尺的办公空间。管理层预计已知办公户迁出面积约为2.5万平方英尺，并表示已在评估招租方案。

2027年到期的最大零售租赁项目是位于Town Center的一所占地5万平方英尺的电影院。AH Realty Trust每年都会延长该租约，以保留对紧邻新Trader Joe's超市的4英亩地块进行重新开发的灵活性。

管理层未提供针对整体物业组合的具体按市场租金调整（mark-to-market）预测，但表示供需状况继续支持零售和办公物业实现正向续租租金价差。随着租赁到期，预计租金增长机会将逐步显现。

业绩电话会议完整记录

完整财报电话会议逐字稿

管理层陈述

Operator

Good morning and thank you for holding. Welcome to the AH Realty Trust Third Quarter 2026 Earnings Call. [Operator Instructions]

I will now hand the conference over to Chelsea Forrest, EVP of Investor Relations. Chelsea, please go ahead.

Chelsea Forrest

Good morning and thank you for joining AH Realty Trust's third quarter 2026 earnings conference call and webcast. On the call this morning, in addition to myself, is Shawn Tibbetts, Chairman, President and CEO; Matthew Barnes-Smith, CFO; and Craig Ramiro, EVP of Asset Management.

The press release announcing our third quarter earnings, along with our supplemental package were distributed yesterday afternoon. A telephonic replay will be available shortly after the conclusion of the call through Thursday, December 3, 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 remarks made herein are as of today, November 3, 2026, and will not be updated subsequent to this initial earnings call.

During the call, we may make forward-looking statements, including statements related to the future performance of our portfolio, transactions involved in our multifamily portfolio, our real estate financing program and our construction business and the use of these proceeds from such transactions, our rebranding and the effects thereof, the consequences of our strategic transformation, our liquidity position 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 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 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, normalized FFO and FFO as adjusted. 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 ahrealtytrust.com.

I will now turn the call over to Shawn.

Shawn Tibbetts

Good morning and thank you for joining us today. We delivered strong results in the third quarter and remain well ahead of our transformation strategy milestones. Third quarter FFO as adjusted was $0.16 per diluted share, ahead of our expectations, with same-store cash NOI up 6.1%. This quarter demonstrates that the significant progress we are making across the company is translating into meaningful financial improvement. Given our progress year-to-date, both in restructuring the company and in the performance of the portfolio, we are again raising our full year 2026 FFO as adjusted guidance range to $0.57 to $0.59 per diluted share. Notably, our portfolio delivered these results while we were simultaneously executing one of the most significant transitions in the company's history.

Six months ago, the market viewed AH Realty Trust as an execution story with real questions attached. Could we sell the multifamily and capture good value? Could we materially reduce leverage? Could we cleanly exit construction and real estate financing? The answer to each of those questions was and continues to be yes. Today, our company is a focused retail and mixed-use office REIT with a stronger balance sheet and a portfolio that is performing well. We are much leaner, we have meaningfully reduced leverage, and we have addressed our near-term debt maturities. While we have significantly improved the business and its performance, we believe the market has yet to fully recognize that progress.

As we continued to deliver on our commitments, we expect the market to see the value we see, given the derisked balance sheet and our line of sight to meaningful organic earnings growth into 2027. Earlier this year, I stated that this transition would improve the company's long-term growth trajectory and position us to deliver shareholder value more consistently over time as we become a more focused REIT. We are now seeing that play out. Today, we believe that performance and transformation over the past 2 quarters demonstrate that the correct building blocks are in place and that AH Realty Trust is on an appropriate trajectory.

2026 was the year we transformed AH Realty Trust and materially completed the work to reposition the company for growth. In 2027, investors can expect the momentum to continue as we focus on embedded organic growth and on further improving the operations of the business. We own great assets in great locations, leased to strong tenants who view these properties as essential to their business. We believe our story is attractive as shareholders are compensated for owning the stock today, including through our quarterly dividend, AH Realty Trust dividend yield is approximately 9.3%, the dividend is fully covered by current AFFO and the business is cash flow positive. We are proud of where we are and excited about what we see on the horizon.

Let's step back for a few minutes and discuss the progress as it relates to transformation and evolution into a more focused, simpler and less levered company. Just over 2 quarters ago, we committed to our shareholders and the market that we would substantially transform this company and its balance sheet. I'm proud to say we have delivered on materially all of those commitments on an ambitious time line and in a challenging environment for real estate. Our timing on the multifamily sale was especially important. We secured pricing at a blended mid-5 cap rate before the recent move in rates began pushing cap rates higher. Investors now own the company we said we would build, simpler to run, far less levered and designed to produce predictable earnings and steady growth in cash flow.

With that foundation in place, we are now in a position to show what this company and its operating model can do. That work depends on our people. We rebuilt this organization from the ground up, putting the right people in the right roles and holding ourselves to a high standard of focus and discipline. I'm confident in the team we have and this quarter's results reflect their work. This company's profile has significantly changed, both in terms of the portfolio holdings and balance sheet strength. With the sale of the Everly and Gainesville II, which closed last week, we have now closed 11 of 13 multifamily dispositions. We expect Greenside to close in the coming weeks and Premier in the second quarter of 2027, consistent with the time line we previously outlined.

Furthermore, as of October 29, our partner closed on Solis Kennesaw. And as a result, we have exited all 4 of the real estate financing positions as well as the general contracting business. As a result of selling the multifamily portfolio at a blended mid-5 cap, we captured significant arbitrage between the equity markets valuation and the private market valuation for the multifamily assets. If you recall, when we announced the multifamily dispositions in the first quarter, we committed to returning the value to shareholders. We have delivered on that commitment specifically by reducing debt by nearly $500 million, with leverage on track to improve by nearly 2 turns and continued repurchasing resulting in a total of 6.4 million shares at a weighted average price of $5.96.

Turning to the balance sheet. Net debt to total adjusted EBITDA was 7.1x at the quarter end, and we expect the remaining dispositions to move us into our target range of 5.5 to 6.5x. This stronger balance sheet benefits shareholders in 2 ways. First, it lowers our risk profile with a dividend that is fully covered. Second, it gives us flexibility to pursue redevelopments or selective acquisitions when appropriate. Matt will cover loan maturities and our recent refinancing activities in more detail, but I'm pleased with the Constellation refinancing and the recast credit facility, which leaves us with no material maturity until 2029 and nearly 100% of our debt fixed or hedged.

As rates have moved higher, the cost of capital across commercial real estate has risen with them. The decisions we made early in the year to sell multifamily, pay down debt and refinance ahead of our maturity mean we enter this environment from a position of strength. We remain intensely focused on operating the company's healthy open-air retail and mixed-use office portfolio. Our goal is simple, to be the best operator because that is how we create lasting value for shareholders going forward. I have personally committed, as has our entire team, to holding ourselves to close and intense management of every property, ensuring that we are sweating our assets and running each as efficiently as possible.

Our third quarter results are demonstrative that this focus is gaining traction. Same-store cash NOI grew 6.1% with retail up 6.8% and office up 5.2%. This is well ahead of our expectations for the year. And as a result, we are raising our same-store cash NOI range for the office segment to 3% to 4% and reaffirming the retail at the previously raised range of 2.5% to 3.5%. Leasing momentum continued with new lease cash spreads of 16.5% in retail and 23.3% in office and retail leased occupancy at 95%. We also see room to push rents further. Against the backdrop of a very strong retail market, we see mark-to-market opportunity in the short, mid and long term as today's demand and limited new supply give us more pricing power. That upside will come incrementally as leases roll, given how our lease expirations are laddered.

The office portfolio is equally stable at nearly 97% leased with a WALT of more than 7 years and less than 6% of office ABR expiring through the end of 2027. And 2028 is similarly modest at roughly 5% of ABR. By contrast, nearly 2/3 of office ABR runs through 2032 or later. Approximately 95% of office ABR is situated in mixed-use ecosystem communities. And our tenant base is anchored by high-quality tenants, including investment-grade names such as Constellation, Morgan Stanley and T. Rowe Price, along with defense and government-related tenants such as Huntington Ingalls.

After shedding the complexity of multifamily, construction and real estate financing, our team is better able to scrutinize the operations of every property, and that work is leading to real changes. Earlier this year, we restructured our asset management team and operating team into a matrix structure built around 2 areas of focus. Craig Ramiro is accountable for the top line, including leasing and transactions. And Jeremy Riddick is accountable for operations, expense management and efficiency. We've placed team members according to their strengths, giving each function clear ownership and accountability that sharpens our focus on operational excellence.

We are supporting that structure with better data, technology and systems. Across the portfolio, we are adding capabilities step by step from leasing all the way through to expense management, from our largest costs such as real estate taxes and insurance down to the smallest details like landscaping. That includes integrating AI tools such as Claude working alongside Yardi to analyze lease and expense data faster, identifying savings opportunities and support tenant targeting. We are deploying technology and finance and accounting as well, so the team can spend much more of its time on higher-value work. Over time, we expect a surgical approach to our operations to produce continued margin improvement.

As I said at the outset, 2026 was the year we repositioned AH Realty Trust, and 2027 is about portfolio performance. A meaningful portion of our near-term growth is already locked in. Leases that are signed but not yet paying rent in our stabilized portfolio represent approximately $6.5 million of ABR. Southern Post in Roswell, Georgia is a good example. The office component is more than 95% leased, but only about 42% of rent is being collected today as tenants complete build-outs and free rent periods burn off. As rent commences, rent collected should more than double. The retail at Southern Post is following a similar path at 93% leased and roughly 81% economic occupancy.

We have a meaningful pipeline of redevelopment opportunities within our existing footprint. We have identified 12 opportunities across our property that put land and space we already own to more productive use. These include creating and developing outparcels in the parking fields and repurposing underused space to higher-value commercial uses. We are excited about what this portfolio can produce. Given today's capital markets and our cost of capital, we are laser-focused on maximizing NOI by optimizing our operations.

Market fundamentals provide a tailwind, and we believe we can capitalize on it by maximizing NOI. With limited new supply in both retail and mixed-use office, we are positioned to keep driving rents and occupancy higher across both sectors. We will selectively look at opportunities to recycle capital as part of a disciplined capital allocation strategy. But with a clear line of sight on healthy organic growth and strength in 2027 and beyond and a balance sheet with no material maturities until 2029, we will be highly selective and opportunistic regarding any potential acquisitions or dispositions.

Two quarters ago, we asked the market to trust that we could execute a complex transformation in a short period of time. We said we would sell the multifamily at strong values, exit our non-core businesses, reduce leverage and return capital to shareholders. We have substantially done each of those things, and we have done them while maximizing the portfolio's performance. We are a simpler, stronger company, a focused retail and mixed-use office REIT with a healthier balance sheet, a portfolio that is performing well with strong leasing and meaningful embedded forward growth in the portfolio. We believe the market does not yet recognize that, and we intend to close that gap by continuing to execute quarter after quarter.

Before I turn it over, I want to thank our team. The pace and quality of what they have accomplished this year has been exceptional, and I appreciate the commitment they have shown.

With that, I'll turn the call over to Craig.

Craig Ramiro

Thank you, Shawn, and good morning, everyone. I'll spend the next few minutes double-clicking on property portfolio performance, starting with retail. Retail same-store NOI for the quarter was up nearly 7%, driven by increases from our shopping center portfolio and the Interlock, which more than offset anticipated decreases at Town Center. About 75% of retail NOI comes from our shopping center portfolio with the other 25% coming from our mixed-use properties, primarily Town Center in Virginia Beach and the Interlock in West Midtown Atlanta.

Shopping center fundamentals remain strong with nearly 8% year-over-year growth in same-store NOI in the third quarter, 5% cash spreads on anchor tenant renewals and 7% cash spreads on shop tenant renewals. Third quarter visits to our shopping centers increased 6% year-over-year and 10% compared to the pre-COVID third quarter of 2019. At the end of the third quarter, our shopping center portfolio was 96% leased with 95% economic occupancy, with the remaining vacancy split roughly 50-50 between anchor and shop space.

Anchor space vacancy is down to just 3%. And while we negotiate terms with long-term backfill tenants, we continue to monetize available space for temporary short-term seasonal uses to bolster NOI. At the end of the third quarter, shop space vacancy is down to around 7%, presenting growth opportunity as we intend to capitalize on the success of our anchor tenants, increase in foot traffic and demand for retail space in a supply-constrained environment.

Turning to our mixed-use retail properties. We expected Town Center retail to weigh on current year same-store NOI due to increased vacancy and year-over-year Town Center retail NOI declined 10% in both the third quarter and year-to-date period. That being said, last month, Abercrombie & Fitch opened a new 5,000 square foot store in a prime corner space opposite both Anthropologie and lululemon. And the space catty-corner to Abercrombie, we leased in the third quarter to a national new-to-market retailer at a 14% cash spread. Furthermore, we are currently negotiating terms on another 11,000 square feet of Town Center retail space at a double-digit blended cash spread. I look forward to providing further progress updates next quarter.

At the Interlock in West Midtown Atlanta, retail NOI increased 29% year-over-year with rent commencing from F1 Arcade in the third quarter. At the end of the third quarter, the retail portfolio was 95% leased with just under 91% economic occupancy. Signed non-occupied ABR was $1.1 million, the majority of which we expect to realize in 2027. Year-to-date, retail same-store NOI increased over 4% year-over-year. Looking ahead, we anticipate growth moderating in the fourth quarter with annual retail same-store NOI growth settling within our full year guidance range of 2.5% to 3.5% for 2026.

Turning to our office portfolio. Office same-store NOI was up over 5% for the quarter, driven by increases at Harbor Point, Town Center and the Interlock. Harbor Point in Baltimore accounted for over 55% of office same-store NOI with Town Center contributing over 25% and the Interlock about 8%. Third quarter office NOI at Harbor Point increased slightly despite the contractual free rent period and corresponding decrease in economic occupancy at Thames Street Wharf that I mentioned last quarter. Looking ahead, economic occupancy at Thames Street Wharf is expected to increase in the fourth quarter before decreasing in the first quarter of 2027 to reflect a final future free rent period, again reaching full economic occupancy in the second quarter of 2027.

As expected, leased occupancy at Wills Wharf increased to over 95% in the third quarter. Both of the office lease renewals executed during the third quarter were also at Wills Wharf. And despite already commanding top of market rents, we still produced positive cash spreads with healthy annual increases over the extended term. Looking ahead, we anticipate Wills Wharf reaching full economic occupancy by the end of next year.

At the end of the third quarter, Harbor Point office space was 98% leased. And given the limited availability, third quarter cash spreads on new Harbor Point office leases were over 23%. Town Center office NOI increased over 11% during the third quarter, driven by anticipated rent commencements at One Columbus, Two Columbus and the top floor of 222 Central Park that we previously occupied. At the end of the third quarter, Town Center office space was over 99% leased.

Third quarter office NOI at the Interlock increased over 30%, driven by rent commencements and free rent burn-off, resulting in a sequential increase in economic occupancy to 77% with further economic occupancy increases expected in the fourth quarter, coinciding with anticipated future rent commencements on signed leases. As expected, both leased and economic occupancy at One City Center in Durham declined in the third quarter to 67% with the 43,000 square feet of available trophy Class A space representing significant future growth potential given the quality of the asset and its location in close proximity to walkable amenities.

At the end of the third quarter, the office portfolio was 97% leased with 90% economic occupancy. The majority of that gap we expect to close by the middle of next year. Year-to-date, office same-store NOI increased 4.7% year-over-year. Looking ahead, we expect growth moderating in the fourth quarter with annual office same-store NOI growth settling within our revised full year guidance range of 3% to 4% for 2026.

With that, I'll turn it over to Matt to discuss the balance sheet, third quarter results and updates to our full year 2026 guidance.

Matthew Barnes

Good morning, and thank you, Craig. The third quarter and weeks since have been a defining time period for the AH Realty Trust balance sheet. Last week, we completed the refinancing of the Constellation Energy Building at Harbor Point and closed the recast of our unsecured credit facility, including a new 7-year term loan. Together, these transactions address every material maturity we had in front of us through 2028, extend the tenor of our debt to better match the duration of our leases and leave the company fully fixed or hedged once our final dispositions close this year.

This morning, I will focus primarily on the balance sheet, but first, the results. For the third quarter, FFO attributable to common shareholders was $15.2 million or $0.16 per diluted share. FFO as adjusted, which excludes the results of the segments we have classified as discontinued operations was $15.3 million or $0.16 per diluted share, ahead of our expectations. As a reminder, this is the metric that best represents the earnings of our go-forward retail and mixed-use office platform.

Total property portfolio NOI was $35.1 million with same-store NOI cash up 6.1% on a blended basis, 6.8% in retail and 5.2% in office. AFFO totaled $14.2 million or $0.15 per diluted share, representing a payout ratio of approximately 97.5% on our current dividend. As Craig covered, leasing across the portfolio remained healthy. Cash renewal spreads were 5.8% in retail and 1.5% in office. Retail leased occupancy ended the quarter at 95% and office at 96.6%. These results continue to reflect the quality and location of our assets, and in particular, our mixed-use ecosystems at Harbor Point in Baltimore and the Interlock in Atlanta.

On capital allocation, year-to-date through September 30, we repurchased 6.4 million shares, $38.2 million, at an average price of approximately $5.96 per share. With our shares continuing to trade at what we believe is a meaningful discount to NAV, as outlined on Page 13 of the supplemental, we continue to view repurchasing our shares as a potentially high accretive use of capital, balanced against our first priority of reducing leverage.

Turning to the balance sheet. On October 28, we closed the refinancing of the $121.8 million loan on the Constellation Energy Building at Harbor Point, which was scheduled to mature in November. The new loan is a 3-year amended and restated term loan with PNC maturing in October 2029 and is swapped to an all-in rate of 6.36%. The building is anchored by the corporate headquarters of the Constellation Energy, an investment-grade tenant with a lease running through November of 2036. The 3-year term was a deliberate choice, preserving the flexibility to turn the asset out into longer-dated capital, including the private placement market as we continue to extend our debt profile. We appreciate PNC's continued support as one of our relationship lenders.

On October 28, we also closed the fourth amendment and restatement of our unsecured credit facility. As we signaled on our last call, the recast consolidates our previously separate unsecured term loans, including the term loan we previously extended to May 2027 and rightsizes our primary facility in line with our simplified retail and mixed-use office platform. The new facility comprises of a $150 million revolving credit facility maturing in 2031, a $200 million 4-year term loan maturing in 2030, a $200 million 5-year term loan maturing in 2031 and a new $100 million 7-year term loan maturing in 2033.

I want to emphasize the 7-year term loan. 7-year unsecured bank capital is not available to every borrower, and we see it as a direct reflection of the transformation we have completed and the quality of the platform that remains. Bank of America continues to lead our bank group. TD Bank anchored the new 7-year term loan, and we are grateful for the depth of support across the entire group. We have swapped the 7-year term loan with an all-in fixed rate of 6.37%, locking in the cost of this capital through 2033. Pricing across the full facility is 10 basis points tighter than the prior facility and the covenant package is consistent with the existing agreement. With these 2 transactions, together with the Thames Street Wharf refinancing completed in the second quarter, we have addressed every maturity we discussed with you at the start of the year and have no material maturities until 2029. The updated maturity schedule is on Page 16 of our investor presentation posted on our website.

Last quarter, I described our weighted average years to maturity of 2 years as intentionally short while we completed the final stages of the transformation. Following these transactions, it has extended to approximately 4.4 years, and our maturity ladder is now well staggered with no single year representing more than approximately 30% of total debt. We have been deliberate about bringing the duration of our debt closer to the duration of our income. The weighted average remaining lease term is approximately 7.5 years across our office portfolio and 5.4 years across retail with our grocery and necessity-based anchors carrying longer terms. With these transactions, we have more than doubled our weighted average debt maturity from 2 years to approximately 4.4 years and significantly narrowed the gap to our lease terms.

We will keep closing that gap, extending maturities as refinancing opportunities arise, including through long-term private placements so that our debt better matches the contracted cash flows that support it. And whilst the company's interest costs are now substantially fixed, our rents are not. Contractual rent escalators averaging approximately 3% across many of our leases grow the cash flow that services this debt every year, which over time, we expect to help absorb the higher interest expense from these refinancings.

At the end of the quarter, 61.4% of our debt was fixed or hedged, which reflects timing ahead of these transactions. Following these transactions, that has increased to 96.2% and will reach 100% once the remaining dispositions close at a weighted average interest rate of 5.2%. That compares with 4.3% last quarter, with the increase reflecting the financing of loans originated at lower rates. We chose certainty over optionality because we do not believe it is prudent for a company of our size to carry floating rate exposure against its long-term portfolio and equity capital.

On leverage, net debt to total adjusted EBITDA was 7.1x at quarter end, consistent with last quarter and down from 8.3x at the end of the first quarter. Net debt plus preferred to total adjusted EBITDA was 8.3x. We continue to target 5.5 to 6.5x, and we expect the dispositions of the Everly and Gainesville II and Greenside, together with the exit of our remaining real estate financing investment, bring us into that range at an estimated 6.4x at year-end. Lower leverage and fixed rate, longer-dated debt are 2 halves of the same strategy. And together, they will substantially reduce the sensitivity of our earnings to interest rates.

We ended the quarter with total liquidity of $262.4 million, including $195.3 million of availability under our credit facility and $37 million of cash on hand. Approximately 84% of our properties representing 79% of annualized base rents remain unencumbered. Taken together, with our debt fixed or hedged, no material maturities until 2029 and leverage moving into our target range, we do not expect to be a forced seller or a forced borrower. That gives us the ability to be patient and strategic in how we allocate capital. Whilst we are not coupon clippers by nature, we have the flexibility to do just that if the economy or interest rate environment goes south. And while nothing is guaranteed, still cover our dividend in almost any scenario.

Turning to guidance. As Shawn mentioned, we are raising our full year 2026 FFO as adjusted guidance to $0.57 to $0.59 per diluted share. We are also raising our same-store NOI cash growth range for office to 3% to 4% and reaffirming retail at last quarter's raised range of 2.5% to 3.5%. This outlook reflects the terms of the refinancing I have described, including the higher all-in cost of the refinance debt, partially offset by lower debt balances and the elimination of floating rate exposure. It assumes the dispositions of the Everly and Gainesville II and the exit of our remaining real estate financing investment announced last week and the disposition of Greenside later this quarter with no acquisitions planned for the balance of 2026.

With the transformation substantially complete and the balance sheet refinanced, termed out and fixed, we believe we have addressed the key uncertainties in our story. What remains is a simpler, higher quality retail and mixed-use office platform financed with longer-dated fixed rate capital match to lease duration. We believe AH Realty Trust is positioned to compound value for shareholders. And as committed, we will continue to provide the enhanced disclosures that will allow investors to track our progress.

With that, I will turn the call back over to Shawn.

Shawn Tibbetts

Thank you, Matt. With our transformation now substantially complete, AH Realty Trust is the company we set out to build, a focused retail and mixed-use office REIT with a stronger balance sheet and a cleaner earnings profile. Thank you to our team for their continued dedication and to our shareholders for their ongoing investment in AH Realty Trust.

Operator, we are ready for questions.

Operator

[Operator Instructions] Our first question comes from the line of Jana Galan from Bank of America.

分析师问答

Jana Galan

Congrats on the tremendous progress on the strategic plan. Shawn, can you discuss your kind of current capital allocation priorities from here, maybe between redevelopment, share buybacks and any opportunistic acquisitions while you also continue to maintain the target leverage?

Shawn Tibbetts

Sure. Thank you, Jana. We appreciate the positive commentary about the progress thus far. Yes. So our capital allocation strategy is, as I said, very disciplined, right, very opportunistic, highly selective. And what I'm saying there is we are very cognizant and very focused on the level of leverage that we maintain. We made a commitment to the Street and to our investors that we would stay between 5.5 and 6.5x levered. I'm happy to say, as we sit here today, which Matt, I'm sure will talk about in a minute, we are inside of that range, which we're super excited about, a lot of work to get here. Thank you to the team for that.

But yes, look, we are looking at a balanced approach. We are capital allocators at the end of the day. We will buy our own shares back when we believe that's the best value proposition. Yes, we will invest in redevelopment when the risk-adjusted spread is there to spread to our cost of capital most appropriately and to kind of replacement value of the assets so on and so forth. And if we see an acquisition on the horizon that we think makes sense for our shareholders, we will buy it. That being said, I think we're in a pretty strong position here. We've done a lot of work to kind of transform the foundation. We're well positioned to roll into 2027 with a very clear line of sight on extremely healthy earnings growth as well as obviously a healthy dividend that's well supported by the cash flow.

So we're not in a hurry to do anything, especially in this market because our portfolio is performing very, very well, and I'm happy about that and the ability of the performance to continue. And candidly, the opportunity that we created to allow performance alongside the transformation of the company. I'm really proud of the fact that we didn't lose sight on the large transformation or the operations of the portfolio and the improvement thereof along the way. So yes, we are looking at all of those things that you mentioned, including share buyback, including redevelopment of assets or repositioning of assets that we own and potential acquisitions. But we're being highly selective, and we are not in a rush to do anything, especially against the backdrop of this market.

Jana Galan

And then maybe just real quick, looking at the 2027 lease expirations, curious if there's any kind of large known move-outs in either the office or retail portfolio? And maybe just in general, how are those discussions and negotiations going?

Shawn Tibbetts

Yes. I'll start by saying, I feel very good having looked at not only the watch list, but also the rollover, our team has done a great job getting out in front of that. But Craig, why don't you touch on a little detail, give a little color to the call about what you're seeing?

Craig Ramiro

Yes, happy to, Shawn. And Jana, thank you for the question. In total, 2027, we're only looking at roughly, what, 450,000 square feet or so expiring. Much of that, I'm proud to say, we are already in negotiations with tenants to extend or renew, but nothing of significance to note. I will highlight 2 things just for the horizon. Of that 450,000, about 100,000 of that is in the office sector. We know we'll probably get back about 25,000 square feet or so. So those are known vacates. The good news is we know about it. We proactively pulled discussions with our tenants to get in front of those things, and we're already exploring options for backfilling that. But outside of that, not a ton of risk on the office side.

In the retail side of the 350-or-so-thousand square feet that rolls next year. If anything, there's opportunity. The single biggest piece of that is a movie theater here in Town Center, that's 50,000 square feet. We deliberately and intentionally extend that lease kind of on an annual basis to preserve future redevelopment potential. Now that, that 4-acre site is adjacent to a brand-new Trader Joe's, that real estate has only gotten more valuable over the last year. And so if anything, that's an intentional move to create and preserve flexibility for us in the future.

Shawn Tibbetts

What you hear Craig saying is essentially what I alluded to in my previous comments, we're sweating these assets. We're focused on the operations of this company. We will transact when necessary and when appropriate, but we believe there's more value to be had out of this portfolio, and the team has a heightened focus on that. So thank you for the question, Jana.

Operator

Your next question comes from Viktor Fediv from Scotiabank.

Viktor Fediv

Great to see you nearly across the finish line of transformation. I'd like to focus on your core portfolio growth opportunity and looking across, let's say, the next 2 to 3 years of your lease expirations, what is the approximate mark-to-market between the expiring rents and respective current market rents for the office and retail portfolios? And what could that opportunity contribute to leasing spreads and same-store NOI growth over that period of time?

Shawn Tibbetts

I think you heard us talk about what we believe and what we see as opportunistic mark-to-market kind of uptick in the rents and therefore, obviously, NOI spreads so on and so forth. The truth is you're going to see that, as I mentioned, incrementally over time, right? There are obviously options. These leases are laddered in. So we'll continue to extract that value and take advantage of the tailwinds that exist candidly in both the retail and the office market, supply and demand relationship leaning in our favor.

But I think in my view, Viktor, and I'm happy to step aside and let Craig or ask Craig to add some commentary here. But I think you should see more of the same, more similar to what you saw this year. We're obviously not guiding at this point into 2027, short of -- or long of what we've already said back in February about where we expect kind of post transformation pro forma earnings to be. But I think you should see something that looks similar to 2026 and 2027 and beyond given the laddered effect of these leases and the opportunities we see on the horizon.

Craig, anything you want to add to that?

Craig Ramiro

No, I think that's a good summary, Shawn. I'll just add, I think we're seeing very positive signs both in the office and retail portfolios. In retail, we continue to push rents, both on the anchored side and shop space side, again, positive spreads this quarter in both areas. In the office segment, we command top of market rents in our office projects, Harbor Point specifically, Town Center here in Virginia Beach. And quarter after quarter, we continue to produce positive results. So we expect more of the same. And if you look at the last 4 quarters, healthy growth in renewal spreads across the board.

Viktor Fediv

Got it. And then if you think about what's already known, I appreciate the details you provided initially on signed not occupied pipeline, approximately $6.5 million of ABR incremental. But if you think about the timing and the actual cash NOI contribution in 2027 from both signed leases that have not yet commenced and remain in free rent periods. So how much of that embedded growth should benefit 2027?

Craig Ramiro

Yes. I think we expect to see the majority of that gap close, call it, by the middle of next year. There'll be some lingering tail in the -- towards the fourth quarter and first quarter of '28 even. But by the middle of '27, much of that gap we anticipate closing given the timing of delivery and build-out and where we are as of today.

Operator

Your next question comes from Jon Petersen with Jefferies.

Jonathan Petersen

Congrats on all the progress. I was hoping you could just talk about your submarkets and maybe rank them for us. Like where are you seeing like the best balance of supply and demand across your mixed-use office and retail shopping center markets? And where would you like to see a better demand profile?

Shawn Tibbetts

Jon, thank you for the question. It's interesting, we see relative strength across the market. But I would say, if we back up and kind of look at occupancy, not only lease but also economic occupancy, we're rather consistent, right, across the portfolio. Much of the office that we own is situated either in the -- as you well know, in mixed-use here in Virginia Beach, in the Baltimore MSA and down in the Southeast. And we continue to be able to push rents and -- or have the opportunity to push rents in all of those locations given supply and demand. So I feel good about that. We are running out of office space, which is a good problem to have. It's something we talk about often. We're happy with that. And we're happy to have real estate, as I've said, that people kind of desire and need to run their business, right?

Across the retail, certainly, there are stronger markets than others. Candidly, we are focused here on Virginia Beach Town Center. We want better occupancy here and a better curated mix for long-term stability. But the shopping centers, specifically the grocery-anchored shopping centers across the portfolio are continuing to see strength in our ability to push rents there. So we're excited about it. You see the spreads. You see the same-store. Those are both moving us in the right direction. We've got some pockets that we need to work on. And as you know and as we've discussed, One City Center is a place that we're focused on the office side. And as I just said here in Virginia Beach Town Center and the mixed-use, we want to make sure we get the right long-term kind of stable fit. Otherwise, we continue to see opportunistic kind of rent increases and supply/demand in our favor across the portfolio.

Craig, is there something on your mind that you're thinking is like top end, this is the strongest, this is a place where we need focus?

Craig Ramiro

No, I think you hit them all. I mean, when you look at office, Town Center office, 99% leased. Candidly, we have more inquiries than we have space available. Harbor Point, we're now up to 98% leased, continue to push rents. So we're still seeing good demand there. On the retail side, the shopping center portfolio continues to exhibit strength. If you look at foot traffic data, visits across all of our open-air shopping centers, up 6% year-over-year, 10% pre-COVID. So we're seeing good rent growth opportunities across the board, and we intend to take advantage of that.

Jonathan Petersen

All right. Great. And then I apologize if you covered this in the prepared, but the guidance kind of implies a step down into the fourth quarter, but you're also on same-store NOI and also just on the FFO number. But you also talked about the signed not occupied gap closing through the middle of next year. So I don't know if you could maybe walk us through the cadence here over the next few quarters of like what's driving the step down and if we should expect a reacceleration immediately after that in the first half of next year?

Shawn Tibbetts

Matt, do you want to take the guidance question and then Craig or I will jump on the same-store.

Matthew Barnes

Yes, certainly. So a couple of things happening with the same-store guidance for Q4. The first thing is we had a very strong Q4 of 2025. So the starting foundational block is higher on a percentage increase 1 quarter over the course of the next year. And secondly, we've been -- we believed it was prudent to really do a tenant watch list review with some of our bad debt in the retail segment. So we've been somewhat conservative in our forecast for the fourth quarter and what we're seeing down there, a couple of the entertainment tenants down in the Interlock in West Midtown Atlanta. So that is what's driving, as you would say, the step down in the retail same-store for Q4. Craig?

Craig Ramiro

No, I think that's a good observation. In my prepared remarks, I mentioned we expect growth moderating a bit here in the fourth quarter. But still on an annual basis, healthy growth for both segments, both retail and office.

Operator

There are no more questions at this time. I'll now turn the call back to Shawn Tibbetts for closing remarks.

Shawn Tibbetts

Thank you very much. I just want to take a minute, a second to thank all of the call participants, our investors, our shareholders, Board members, our team, all stakeholders and interested parties. We appreciate your confidence in and your investment in AH Realty Trust. We're looking forward to the future. We're excited about what we've accomplished, but even more so excited about what the future holds. So thank you for your time today. Looking forward to having individual conversations with you, and thank you for your time. Have a nice day.

Operator

This concludes today's call. Thank you for attending. You may now disconnect.