Derivative Financial Instruments

12 Months Ended

Dec. 31, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

8. Derivative Financial Instruments

On March 14, 2014, the Company executed a LIBOR interest rate cap agreement on a notional amount of $50.0 million and a strike price of 1.25% for a premium of $0.4 million. The interest rate cap agreement expires on March 1, 2017.

The Company’s derivatives comprised the following as of December 31, 2014 and 2013 (in thousands):

	December 31,
	2014							2013
	Notional Amount		Fair Value					Notional Amount		Fair Value
			Asset		Liability					Asset		Liability
Pay fixed interest rate swaps	$	685	$	—	$	(11	)	$	705	$	—	$	(16	)
Interest rate caps		180,434		260		—			130,672		102		—
Total	$	181,119	$	260	$	(11	)	$	131,377	$	102	$	(16	)

The changes in the fair value of Armada Hoffler’s derivatives during each of the three years ended December 31, 2014 was as follows (in thousands):

	Years Ended December 31,
	2014			2013			2012
Pay fixed interest rate swaps	$	5		$	152		$	445
Interest rate caps		(238	)		(164	)		(37	)
Other (expense) income	$	(233	)	$	(12	)	$	408

Subsequent to December 31, 2014

On February 20, 2015, the Operating Partnership entered into a $50.0 million floating-to-fixed interest rate swap attributable to one-month LIBOR indexed interest payments. The $50.0 million interest rate swap has a fixed rate of 2.00%, an effective date of March 1, 2016 and a maturity date of February 20, 2020. The Operating Partnership entered into this interest rate swap agreement in connection with the new $50.0 million senior unsecured term loan facility that bears interest at LIBOR plus 1.35% to 1.95%, depending on the Operating Partnership’s total leverage. The Company designated this interest rate swap as a cash flow hedge of the variable interest payments associated with the term loan facility.