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FRP (FRPH)

Participants
John Baker CFO & Treasurer
David deVilliers President & COO
Curtis Jensen Robotti & Company Advisors
Stephen Farrell Oppenheimer + Close
Bill Chen Rhizome Partners
Call transcript
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Operator

Good day, everyone, and welcome to today's earnings conference call. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask questions during the question-and-answer session. [Operator Instructions]. It is now my pleasure to turn the conference over to John Baker. ahead. go Please

John Baker

our John Chief of I'm John Chief Officer III, Counsel; Vice deVilliers, Financial II, Vice Executive our Good and our Officer; President Holdings. Baker, and And Treasurer General Jr., David CEO; FRP Chairman Klopfenstein, are John with and Milton, our Executive our afternoon. John and III, President; Accounting me President. Baker, deVilliers, today David

nature, materially future subject statements any this which are, on uncertainties that by SEC in the cause forward-looking events their indicated are risks As results a reminder, our and such filings. could to relate call, These uncertainties from and and to risks in listed statements. actual to those differ

earnings this uses and monitor, in to measure recent viewed be and segment to non-GAAP non-GAAP analyze to measure trends financial accepted except or law most future its in We result and financial of its titled financial accounting of net information. certain and as, a promulgated Page identify imposed substitute income, meaning new presents call accordance a operations this of meaningful performance. G and for not by GAAP should have financial operating financial financial obligation forward-looking Commission. the assess, operating within is by income, financial Exchange with our measurements. the net non-GAAP measures principles, revise no as results referenced events This please to supplement in FRP or measures To reconcile GAAP FRP To the not, the NOI. The refer update presented Securities generally Regulation to statements measures X on is release. any non-GAAP

remeasurement This until Ted Founder, out remain a the Florida smart would of and along let well X in Brooksville companies this Maren's in for these were notion their tribute of Ted, pay subsequent quarter company, me more was year. included by gain Ted He in brainchild items cared The on in million, spin-off $XXX,XXX but tribute or was not of Net defining. a the the Chairman million attributable the of year. the XXXX $XX.X in impacting we is Baker, incredible as XX. and when of is with that leases attributable to noncontrolling we or the of a so much $XX time running one The the a remiss at founding Other years the per to Before or remeasurement $X.XX until last the quarter career in this he being to $XX.X spirit, footnote and of in general we lost like quarter, interest. age this and Transportation the from place Patriot the silence financial The Because would decrease what the interested last sale write-ups. in Rock provision million a income to of amortization $XXX,XXX same the The income per Maren of is is and us in begin, In first legacy of from same involved was to the highlights were period for our X I the but almost $X.XX turn kind remarkable weeks company would embodied years. and this combined to philanthropy, in the and ago about. who less XXXX. have entirely he income Industries, for generous is businesses our versus served as $XX,XXX,XXX absolutely success be excess very life, tribute This associated of which who in offset and if share is share to decrease with someone interest his taxes at quieter consolidation property not fully related in quarter's $XXX,XXX as place in income. here end. $XXX,XXX of gain the gain world the life expense paying to and he

increase a is increase additional period that net income Some an our and $X.X of segments, fact for quarter the versus this from operating preferred permanent noncontrolling including due year joint loan. XX%. in the venture, of to all longer operating to income was The last decrease primarily same paid This income The and is so interest, first a are lower Net result no maturities loan off million Maren's that the the of the for million return of interest $X.X receiving on result bond we Maren. refinancing

The chunks addition continue the over Development segment increase, to next -- in Maren in near a we manner up lease of construction our our with plan will the As the detail on with lease years, briefly highlights. operational of few depth up of grow David in projects touch NOI greater complete end we in is which substantially in impacted expect the This to to in operations NOI and remarks, his mention NOI. albeit will I X consistent future. but

ended quarter, occupancy, time XX reporting that's straight XX% the happened first fourth since that's XXXX. and Dock the So the with period

Maren. nicely increase since on assets been place we full occupancy XX. remarkable occupancy effect received X.XX% more a placed in raise for Maren first when The consolidated even concludes consistent the district renewals until and release that able in Dock COVID we headwind, considering mid-February. have this rent we increase a occupancy which measures quarter fact didn't which the hit on above at And a emergency The rents all that is March quarter average XX.XX% the until the The was in year The the The XXXX. XX%, renewals on reached dovetails and with demand stabilized year, to take of of these XX% that not first in is Maren did renewals and with X.XX% But stabilized residential mid-July. This at increases

Mining best had quarter day we Royalty terms particularly million the XXXX This an This revenue a generated is its $X.XX The segment. Royalty Mining closed XX.XX% Florida. the previous and in XX%, existing $XX.X Mining revenue. million is its the Mining is royalties Astatula, of property and owners. under is to acquisition For our segment for first XXXX. since addition property after sand the in just to XX.X million million second we roughly total. is first XXXX property tons X,XXX-acre in because our in to quarter This royalty adjacent $X.XX exciting of under purchased ended, FRP's Vulcan year of Royalty ever row, Royalty lease of our contains to

to turn things through segments David walk in deVilliers, Jr. to our Now to detail. David? more you I'd like over

David deVilliers

afternoon. Thank call we or feet. in-house of you, John, those in industrial X to delivered XXXX, management, on asset and this platform square speculative Relative XXX,XXX good our totaling the day to December warehouses,

building totaling that feet 'XX, XXX,XXX Business the One leased Park. which for Hollander of balance with fully of is the occupied year. warehouse will on foot XX% of in broke the now buildings and building, QX build-to-suit final is square at Also this we in second ground off XX,XXX scheduled the square cap quarter a occupancy

Maryland, Run complete warehouse first occupied square a in park up over foot We The XX-acre provide interior leased Aberdeen, last we in track Business period pipeline XX.X% Cranberry the renovated year. Business pads, purchased and the Park, our and quarter in occupied industrial for the multi-building we are this XXXX. the year-end. Park Run XXXX, occupancy same expect to adjacent late fully became entitlements strength building of Cranberry in fit-up XXX,XXX by seeking to from to of tenant

later offsite and up trailers annexation, to the to for begin storage the look design carrying expect to to leases of product. costs. we'll We XXX,XXX Existing this process building be the annexation to and of create feet on-site entitlement our square helped land upon warehouse year, complete

We are can in we construction begin hopeful here XXXX.

square both begin the of to in construction build-to-suit QX in-house result land in development the currently service add the primarily Maryland, million warehouse warehouse building new approximate the XX-acre of for over Depending distant we these begun to our dynamics, of our warehouse tenant in platform. $XXX,XXX in That NOI Completion feet of County, XXX,XXX placing X The work total this another additional on X.X Hollander XXXX. 'XX. assets on million building. of our operations and support early Industrial QX have was project and XXXX industrial without versus Business market plus Harford projects design over Hollander to in Finally, added other in X operations section too assets the not and buildings at QX XXXX, from the Perryman for square Aberdeen Cranberry entitlement will $XXX,XXX September our of product will when at Park occupancy. reduction feet. as parcel an square in could foot construction as purchased

As progresses, Run total X million this for division period the million the increased in a Cranberry versus Mining Hollander should year. the buildings and new Royalty. and Business our of occupancy in the Park NOI at occupied lift fully revenues This $X.X same $X.X segment healthy at quarter to year provide XXXX. for saw last the

same revenue off million, of As NOI tenant quarter and period of spite site our $X.XX Manassas, the an Mining John shifting $X.XXX a the first operations in for year is part increase mentioned, the for a year. the was over segment. Royalty record of temporarily this in last Virginia million

of Properties projects ventures. between of occupancy Woodfield to XX% stabilized of Development Baltimore, operate John both XX of initial Currently, period development an partners. of North stabilized days. level third-party distinct Maryland. a with being on Moving and for our and The and Carolina St. Washington, difference we MRP development D.C., development joint X

our is quarter Verge Dock X These quarter, D.C., occupancy joint in X Phase partner. stages will As where of for of and Maren, MRP XX.X% complete located end. joint be venture of our quarter's and in Bryant was of are includes projects third ready end Realty platform projects development year various operations. the Verge. at Street the mixed-use and venture in the X are this XX, Washington,

include as of Greenville, with progress Development Woodfield about in make saw Riverside in for March. the end service where projects mixed of quarter in retail quarter's be of the two placed August was of XX,XXX feet year, and this feet lease up of single-story John while its at complete square end. XX% and venture XX,XXX quarter, as at Square occupied will of Our units partner and are the Capital Hickory project the our venture Properties. projects opened Carolina John third-party apartment Hickory excellent Jackson retail platform of Creek balance above occupied for apartments XXX development remained XXX was was the up our XX% occupancy in Two with and end square that an XXX Creek's year foot that St. additional slightly with office joint at XXXX the South joint and XX% Properties St. our third XX% with office

for the under our joint retail. Dock quarter's At and FRP's multifamily/retail of Windlass projects same end, occupying So occupied was X ready be are their Street, in and apartment the in remaining operation, versus to the respective XXX,XXX relative the first by X developments, retail of of of feet were X XXX $X.XXX first XXXX. were currently Hickory square million apartments X,XXX for projects, XX,XXX totaling Creek time projects ventures apartments of construction XX,XXX $X.XXX to The spaces feet these square last X,XXX at the totaling in year. XXXX NOI quarter Riverside were the spaces year. in currently and mixed-use year. these at summarize, related square mixed-use tenants apartments and feet XXX quarter notwithstanding, will in versus including for of invested of and XX, units XXX the third-party we time completed Maren, million occupancy last retail of and Byrant which units projects, same end share this occupied

and the capital where ultimately, lending it a working toward horizontal stool, program kind entitlement sale which residential leg we single-family homebuilders. to As is last to development national the relates of our of is this a ventures, projects, and provide operating of our

charged is of X to which rate Amber first XX% XX proceeds. of split is and at of preferred to Ridge Prince in the above are sold profit-induced interest homebuilders final with project XX%, contract stages this current minimum Maryland, The $XX.X projects a in return a all a total million. a and X/XX. lots of Amber Ridge return County, with includes and million the development purchase The national determines principal our commitment George's under lots. investment X XXX are Land waterfall interest of as final in $X.X

held called is million their similar settling Aberdeen, provide are Entitlements in $XX funding conditions on residential plan Ridge. in venture success to terms a underway challenges healthy fortunate the and raw Homes, our relative Our We able that the the We affected to limited new FRP project has other some on current to Presbyterian impact years. the we're lending despite been to last Amber has under COVID-XX development avenue. to proud negatively a continue X its prosper precedent us have XXX-lot, to XXX-acre employees. for are our concern, have attention Maryland. land. remain grow company and to and

our to office normal the and team on close are doorstep. the with back warmer We in at activity FRP weather

conditions and grow this our navigate We will allow. portfolio look assist new continue normal to as tenants, to market our

opportunities not also now on on we business, sometimes return the financial solid to. back stand I'll to and hard capitalize John. a Thank call foundation As enables to the making decisions that you, a while us

John Baker

Thank you, David.

our David's echo about financial to position. point Just

Our more We're NOI last to being, valuable to in this have cash remained cash the the put flow. the purpose and for income-producing several less. the for use But the money a or equivalents remains net. safety cash same cash of and growing time projects working for quarters,

of to are, happy questions any up at any call for we point, open might the this have. that Now you

Operator

Instructions]. [Operator take from first Jason Cook, our Private we'll question Investor. And

Unidentified Analyst

platform most as if or not understand situation I whether that had out if quick doing of maybe kind just the seen market changed with we've optimism your to question and curious positioned kind grow question you the the world competitive trying noise e-commerce all valuation guys getting it? the Second was and as attractive also looks is I'm new purchase buying The versus not? that just math, Just to was were -- yield. it continuing the to just at industrial I in of a I'm really you curious the around asset well far sector there. the just

John Baker

first what price and your we the have as question, landowner were to and was, Jason, happy wouldn't it. market speak we but answer have must with well And sold they the was been the or obviously, to they I approached by it. negotiated can't that we're

David deVilliers

to answer happy this And deVilliers, -- to David question. I'm second is happy the I'm

with feet Amazon Our warehouse of not -- smaller. are necessarily that and have They most we XXX,XXX program. do are warehouses and the to involved square XX,XXX an

a that the have XXX,XXX For example, we building a for square manufacturing foot company. is under construction build-to-suit

have large buildings, have we tenants. foot e-commerce Obviously, of an extent. XXX-and-some or industrial have easily We it the the action part at feet to this is buildings that have at we XXXX. could up But we of all And sorts important and XXX,XXX least platform. supported in that the have, really stage, into books. one at will we whacked be square on dictate that The some have, the square anything XXX,XXX market thousand don't

John Baker

Yes, on just Jason, follow to that. up

case. highest the don't focused the buy, we buildings IRR even with that matter similar and hold we of the investment And But it's we we think doesn't I need our the were generated I think assumes that it cash, and you on really the IRR in can't for we that stated we that not when the IRR is the immediately. money invest focused on weren't immediately. and reinvest cash, a while, in that $XXX and were And fact business. you if a develop to return have of million another what sold

always particularly we're holding think of in industrial this that at lot And better off the So had these we have faith assets segment. a I time.

Operator

Company. next Robotti our from with & take Curtis will We question Jensen

Curtis Jensen

me hear you Can okay?

John Baker

are how you? Curtis,

Curtis Jensen

right. all doing I'm

FRP I guess the the First for of Baker I'm as well. family's loss, all, family and sorry,

to can purchase, -- is going there that there aggregates an about talk lease? is the Just back date you that -- expiration on

David deVilliers

extends dictate. the reserves would what It past

Curtis Jensen

Okay.

David deVilliers

that it mining. of will So terms I renewal they'll not it The the The through duration But be can't -- be mining. they'll -- of the are they in are couple it while terms unfortunately, that they have in be a the now specifics, does expire right options. recall.

Curtis Jensen

other And same profitability Dave, kind the is your of would as operations? you characterize the

David deVilliers

the will It drop acquisition probably down to the sure. line. No costs. us except cost For to bottom

-- all be straight it. might the and bottom royalties this will -- some So flow there to with property taxes will with associated line

John Baker

but are of the as basis the deplete depletion, we what residual down that small, The less will cost taxes be to very property get number think, the course, we property, depletion of more less. will or

So that's tax deduction. noncash a

Curtis Jensen

individual like small all of or... at it And was institutional the private can kind about a you characterize or landowner,

John Baker

It was to reasons to reasons land enter we their our and it for and had for time, wanting a a controlled that it. got long for they family exit had wanting that

concerning adults. So

Curtis Jensen

And at the a I know March to want balance confirm Amber There was it's of XX? kind but that million Ridge, $XX.X had just balance go. loan drawn, I with you at the been and

David deVilliers

No.

balance I gotten but $X about -- think back. million I'm the Curtis, I'm there, not thinking we've

the So I think balance...

John Baker

million. That was $X.X

David deVilliers

million, $X.X Curtis.

Curtis Jensen

And whether guys today the right. of of then And are assuming cost or it's years might versus uplift ago. All I'm get X thinking inflation your above rents, industrial replacement is number you to about in construction how a you cost properties you what X multifamily? paid the

David deVilliers

end thing always the right committed that then do. properties look well to Well, already it's Curtis, within has thing get building market time all we go And is comes, in plan the true properties already dynamics a of position that as a and whether do for and is and the which as when are our these what new permit. been a determine we to for is the at and warehouse. -- what at even get the we these as we all have take to we'll under good construction. properties, far development -- Same thing the and they're that say, completion holds But look nearing money of the

So us ever it's an it issue think I not right just will a be really be now, an and to question. will it issue, don't

Curtis Jensen

everything projects, say next in existing understand baked I XX a were months, point. was of I you is or in just multifamily looking return at kind But the the justify like that your we the Yes, you change guess. profile I let's at down, trying your at offset might goes that elevated guess to this think rent stay thing can higher upwards is costs profile I so just can get you main levels. and

John Baker

if things look I I or beyond we'd how we land costs, a price think a Yes. ability prohibitively at recessions is whether the start. what it's costs project, construction and to mean, hard return got long obviously our expensive, think if mean generate on. that's I is purchase

the on put just generate it. what return You can't into you

mean, -- regardless are goes market where the every cycle. a make a that's I So into factor in of that we decision we

Curtis Jensen

I Jones mean, I expect What in with of of happening backing you or that's or if -- of rates on really recent few cap haven't that would on But you, -- rates multifamily is high-quality what significantly CBRE interest mean from the gone and anything Lang could treasury? anything kind a into know any up cap mean, cap converging to don't your rates And I like Colliers. and months, rates. multifamily seen I have example, up last sense obviously, I XX-year or stabilized foresee sort for

John Baker

I can seen I as that I probably think David just to data. any mine, rate expect greater what insight is your intelligence I speak to than you haven't said. have but with the mean it. cap same

David deVilliers

the what not of so but we do but thank us and money Carolina and successful. as properties down We've is, the right so been properties And still out John. what think we're there's chasing I you, I just really lot been we continually financing whole intelligence, South market mean market is seeing far, change. are lot in now, it's a to product. at there ask project a good because the of -- of forth it's with Not people so Riverside to so on. want looking getting that

as move a we it's just market so the will And of be question forward. what dynamics

Curtis Jensen

right. All Last question.

dislocating is thoughts to homebuilders what's what's mortgage it's involved and capital you like of see probably unsettled kind Or on a kinds maybe little with about those even this homebuilders point? the in Would you construction market, of things at least the opportunities lending resi different. more side happened market of being kind in and the for projects? Given markets, residential at given happening the are

David deVilliers

even projects, fall. now, X mean to right today NBR, Curtis, than these first much example, a going the are pace they the in were taking to now, one I committed and as is down lots have we builders Right now an rapider at the right

dynamics So markets. know. comes think the I location of market these don't and to it Again, down I

the as We We in when of are We will I go. buy to very a in very, wholesale which them want to hole prices. entitled selective buying be turn that's we're And to where retail prices, lands go program. be the these. pioneering prerequisites want doughnut. in mentioned these kind we And to at but one don't these lands, the look we narrative, my we've them into of

contracts -- there total bring where time the Otherwise, some with an value value start, with work value to lot there dynamic may the never there any of wholesale at from entitlements we're coming but start in got development we until low at actual and land just homebuilders that So or effectively to point we horizontal would the would changes, a with value awfully be a significant we deposits. it. sit

John Baker

be kind this didn't to speaks to venture think And it benefits was say for David born cash in And fact a on of out business lot it about the with this. really in it cash nimble had Curtis, a it. into use a This been residential not and lot relationships time -- into and on but it's that David's like something Baltimore of the us and was leverage more being going to this This for all area of great have can smaller we able saying. could we that been of is and program to I has how kind shift the business, was our speaks that to while. one a follow-up being, that just permanent -- for the of what lot do company great perpetuity a of he and anything not the the But not hand a we business. part I of for in that's has are

Operator

Farrell our next from question take Stephen at + Oppenheimer We'll Close.

Stephen Farrell

Can me? you hear

John Baker

Yes, hey, Stephen.

Stephen Farrell

I Woodfield a almost there quick been very questions. just Riverside the coming have any is then? along and with strong few second other How is JVs at Has leasing working or the project relationship complete. The is talks about additional projects?

David deVilliers

great we're The have. far. own. Sun they're like relationship we We has best the as South other And to project looking, been that like Carolina. well its Belt. like class Woodfield. each stand has think in so again, partners but as We always on We We the

Stephen Farrell

Okay.

and has actively any it just just... been looking have you opportunities? found Or you haven't So great

David deVilliers

We're -- have always looking, we're an they looking. always that we actively but attractive through. we And matrix go

John Baker

you Otherwise, anything to know about yet. committed it. Yes. we have We have would don't

Stephen Farrell

Yes.

the what with cost the -- then on that the Okay. waterfall is And Ridge, Amber that is developing the split, return of homes? of based base

David deVilliers

all time. and we and It's funds the waterfall what it's then at much Nope, on how interest received get depends money all the determine we funds, when. in, much when it that that how profit come we receive and the is the when

John Baker

principal the of right, that IRR It's David? that an off we've Isn't provided. balance

David deVilliers

Yes.

Operator

take from question our next We'll Bill with Instructions]. Rhizome [Operator Chen Partners.

Bill Chen

start lot it FRP your want because please a condolence I accept to my by I me to saying, my means start loss. out is to largest out -- deepest position. just for want

for I Joe you wonders me. that done and Hilton. Emily could they it's daunt So know and David And be

You the guys people. are wonderful all

-- for me. an there say Wonder So that Ted. heck to and for someone an that's of to like write was I eulogy also, if just a obituary want

I of just want And to start by a couple saying that. So out questions.

I into XX-month On -- But of gone the that that's kind projects. cash at X-year X% about right cash At X-month there of million that any about I interest, putting now, rate, a of year. treasuries? projects treasury in and -- the almost income coming or the mean, today's has know any then given $X is treasury interest into interest XX-month out that is always

John Baker

on but intuition Yes, don't the ours. it's good, at is right you're I Bill, -- least if and your it's point same know as

-- have obviously, as more invested treasury then we the something in rates were had just for points wanted money. money the to a we increase, nothing. as And the we than bonds. X-year rolled they get X saw months' few We off basically And market basis rates been then our and

So we've and treasury looking accordingly. been at laddering needs our capital investments our

we income more interest are when purchases been we markets. treasury money than So generating in just we had of these getting were off

I with you're happy So I that. hope know I am.

Bill Chen

I mean certainly duration mean capital. Yes. then No. sort perfectly yes, and some of I XX-month think use no. like was of a it is -- that's I later,

X to out going is even think fine. years I

to think is I treasuries my view historically, capital that put risk-off general better. that do the in a work that environment where we could

and guys ladder. you allocating it on top of are into that glad already it I'm already a So

into And deploy the opportunities time kind it tight does more then a question The Fed to today. looking than what of in mentioned right double-digit market kind be away. the did other those rate fantastic. if really the that my I have world short in got went I'll choppy that's cap you're So of a I keep cap and really capital rates opportunities of and will uncertain remember got think -- it my lot that market did. XXXX, looked this questions lot the when XXXX today, you around

arise kind increase the opportunities from that On more the starting rates little any guys you to in see a of just market? to are are starting volatility from bit -- in the

David deVilliers

well. deVilliers, hope I'll I start, Bill, you're David

pretty capital bit probably obviously have People the we too soon. that it's a we're looking, little know and think I quickly. to always available move

but As seen John nimble, yet. had we haven't we're said, anything pretty

Bill Chen

been or And has on on Is of to move. thoughts warehouses for to CapEx I've tenants. those would doesn't tenant on just that? kind it them build-to-suits inside be more some my make there the thought sense the final a Any warehouses. heavy preferring question where develop mission-critical invested and

John Baker

more little right to under color under David circumstances, have we currently a right be that. has that think I can the on love construction, but We and a circumstances. to the build-to-suits build-to-suit speak

David deVilliers

get us John programs, to lease our they mean to buildings the yes. programs. serve on. spot are in -- That's purchase have we they're when build-to-suits, not future build-to-suits have not I well only involved long-term these because as serve, in use

And sort building a shell flexible tenant left, down units. to building, could if is of and because a be all the so something way has that square they foot or just foot the we the that in have XXX,XXX take design square that XX,XXX you thing to single XX

the don't buildings long give them we're for their all improvements. build dollars get into going So amount, these We'll too we flexibility. give tenant a specific term and heavy our that's And to we and for using the them.

Operator

we time. no questions appears this have It that at further

John Baker

thank Thank All continued will and much so your right. for you this in company, to and interest all we you. soon. you talk support Well,

Operator

This does conclude participation. today's program. Thank you your for

any disconnect at may You time.