UPDATE: Wunderlich Initiates Coverage on Armada Hoffler Properties on Best In Class Development

In a report published Friday, Wunderlich Securities analyst Craig Kucera initiated coverage on Armada Hoffler Properties (NYSE: AHH) with a Buy rating and $11.50 price target.

In the report, Wunderlich Securities noted, “Armada Hoffler Properties, Inc. (AHH) has built a ‘best in class' portfolio of office, multifamily, and retail assets that is concentrated in the Virginia Beach/Hampton Roads area. Since going public in May 2013, there has been substantial headline risk and what impact the ‘sequester' might have in 2013 going forward; however, a closer analysis highlights the resiliency of the Virginia Beach economy during periods of defense spending cuts. While development revenue does not contribute much to the bottom line, the general contractor has a renowned expertise in public/private partnerships, where municipalities seek to develop commercial space to increase their tax base. This competency is likely to continue to source attractive assets for the REIT at a favorable cost basis.”

Armada Hoffler Properties closed on Thursday at $9.60.