FRPH - Earnings call transcript Q2 2022

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Operator

Good morning. I’d like to welcome everyone to the FRP Holdings Second Quarter Earnings Conference Call. [Operator Instructions] I would now like to turn the conference over to Chairman and CEO, John Baker. Mr. Baker, you may begin.

John Baker

morning. good and you, Thank I’m John Holdings, CEO FRP Chairman and I’m Inc. and of Baker, me today VP; And Jr., the Milton, our on with line and Officer; David our John John III, Chief III, Accounting our General are deVilliers our Baker Executive Counsel. John our CFO; Klopfenstein, President; deVilliers, David

Securities risks us, and on that even of which and call, materially, forward-looking expectations statements contains of respect XXE actual from this results based begin accuracy statements realized to cannot Section statements. may we related may be Securities are of in or predicted call and forward-looking Future perhaps of with other some Exchange future anticipated. XXXX views financial and assumptions results, to not XXXX. uncertainties, reflect the this subject might meeting Act and information financial of the of Before Such events results which together otherwise, such with with many publicly Section be and and management’s to events XXA the disseminated and be of not are by Act discussed inherently within differ, current statements

share same last than results income first a $X.XXX ended year. you new was $X.XX update XXXX to $X.XX statements. to the the half share is by million net obligation second $XX,XXX have a reliance last quarter such cautioned undue $XXX,XXX the for statements on share present June or $XX,XXX,XXX income period Investors We per per months of share result XX, our our to versus the versus or as for forward-looking not It no such are The per the quarter was X $X.XX forward-looking $X.XX law or or of year. other Net information. XXXX. future for revise pleasure or or imposed of events and to place

on attributable $XX ever, quarter included our our Maren write-up highest increase million. for the were investment our and use warehouse NOI first a offset royalty for $XX.X XX.X% and net pretax interest and other for industrial The and The from remeasurement noncontrolling Maren, a last our write-up million in Dock assets. by X-month of million at second The our strong in are in to results of mixed-use revenues, strong increase strategy $XX.X highlights the continued taxes half. occupancy the redeploy recall, this projects in operating quarter and mixed you year of As and a of for NOI gains to XX and gains net reflect XX% into XX% important in quarter income sale the provision

project in engines year’s the nicely, second are and are stabilized Jackson, park Hollander be without earnings by NOI. year a in The in Street Greenville. from the costs Greenville, projects in progressing D.C., project current our Baltimore to experiencing start-up .XXX roll. rent depreciation, phase along are marketing projects in losses they impacted are Verge These of warehouses where D.C. interest, after-tax losses and taxes in include next project with benefits the Riverside in They Our our and growth that Bryant and X with they, our industrial our will

our your of proud support. We’re progress and appreciate continued

of deVilliers, me our through to turn walk David President, details over David? our various to projects. let Now you it the

David deVilliers Jr.

quarter of follow and end we to completed and of by at full complete Relative and cap to entitlement in-house XXX,XXX projections. XXXX. to The this park on-site the warehouse building Park this up occupied building be are morning year. the ready square today. is be to Maryland XX,XXX trailers product underway, should off fourth XXXX. of the remains Run building process This tenant for of leased or good square feet foot park, in land create Hollander Run build-to-suit John, our the that and storage entitlements to warehouse of the Park, totaling of leases fully multi-building XXX,XXX Cranberry quarter is original XX-acre the foot industrial X XXXX, XXXX, on our occupied its speculative management, we ahead Existing X square those and became costs. fully to warehouses you, helped Park square platform Building offset purchased for of our expect fully renovated performing will strength designed feet, call pipeline, carrying asset late the Thank week. XXX,XXX our as will Cranberry to Business early past occupy final the in year-end. in Business The industrial in the of parcel adjacent the in annexation in occupied Aberdeen, first for in to Business now

We here construction are hopeful can XXXX. we sometime in begin

in additional operation Hollander that, over ‘XX in-house total in platform Park add QX build-to-suit will begin first market XXXX. operations procurement increase feet. of XX.X%. $XXX,XXX square the industrial feet square Completion square over entitlement last Business was million both quarter assets Run, to same XXX,XXX section our begun early Maryland, NOI to support to industrial too for the this added dynamics, of million warehouse X.X these on at have of Perryman approximate as an an foot the other Aberdeen. when $XXX,XXX for development on warehouse our in the building quarter year, Depending plus parcel products versus Harford Cranberry County, aforementioned in as and our not XX-acre building design of we Hollander and assets of on currently warehouse from projects will X under Finally, construction distant X project land construction could in

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

John $X,XXX,XXX, X.X% of mentioned in due is purchase property in segment. over opening period the remarks, his [ph] the Mining the this same for increase primarily the NOI business a quarry Lake an in to record Royalties last second of County, April year revenue As Florida. quarter Blandford was

Moving joint our to third-party ventures. on

June, venture this are and Pre-leasing end MRP projects venture Dock complete the be Maren, welcome ready begun located Bryant at first These at are of Verge, quarter’s X Phase Verge operation. platform was Verge. its we where X XX, XX% projects and October joint has tenant of development year. Four end. of in will to our Street mixed-use Washington, our includes stages joint D.C., As partner. various in and of Realty is in

X have in joint where Carolina, our We Greenville, venture projects partner. multifamily South is Woodfield Development

of and at with remained this that venture end. in quarter’s quarter ago John end year and Creek Hickory units project, first XX,XXX St. office joint of occupied lease-up retail and office platform The retail in its the year, feet while square joint includes Riverside, as Properties. venture The of feet the remained first St. for end this make was Capital our the third-party XXX of was will this XXX apartments up of as our are with of X the occupied project half the single-story John that XX% apartment of of XX,XXX balance fourth XX% Square the of placed quarter. complete service .XXX Creek’s XX% began XX% year month an projects be Jackson June. occupied Hickory above and with

apartments at retail. ventures, FRP’s operating retail income projects be mixed-use occupancy program ready to we So year. our multifamily homebuilders. quarter XX, currently At Riverside net same X of development we versus time for square currently notwithstanding, toward will venture of occupied our $X,XXX,XXX relative completed in Street, sale where of spaces of XXX,XXX year’s XXXX which feet last construction the operating in to operation, X XXXX. at retail were and projects, of the same under remaining to Creek second the versus square XXX last summarize, third-party quarter the XX,XXX single-family increase. invested horizontal was their second totaling and mixed-use Lending ultimately, $X,XXX,XXX residential Maren, the time in these and X were Hickory projects apartment share respective end. year, versus X,XXX and retail developments, for and Bryant with leg were X,XXX including units and of projects are for by joint tenants national entitlement units quarter X,XXX occupied spaces last of capital Windlass the feet That’s end, and this a on square occupying is our working XXX Dock totaling apartments, a provide stool, XXX% XX,XXX a feet and, The

is and project this profit-induced out development public of Two been of Ridge in XX Maryland, interest, the a our Amber a interest lots. including investment commitment homebuilders charged national of minimum waterfall County, are which million first infrastructure purchase of horizontal needs to the The complete all of to above total only quarter. contract closed current X The split lots with preferred end Prince the and under Ridge. to a $XX.X be return taken is XXX XX% rate proceeds. return, determines Amber Land includes of a as final final complete development George’s million. $XX.XX at the have down projects to XX%, with

provide development and in. project Presbyterian called this $XX.X to underway, roll Maryland. are in lending Amber million up funding similar XXX-acre conditions settling precedent current plan Homes. is success to Aberdeen, under XXX-lot venture terms their We are other Entitlements to Ridge. Our to the a on residential in It’s

every the So many FRP world we mark and assist it we tenants, with made through. Despite of our all of and COVID-XX. accommodate those one have been which is the love, the and know to and able employees trauma persevered lapped that has X-year on has in and

of office single feet our where base the needed XXXX, and retail maintained This to have to testament to March a so. ability down, of lost square apartments. We industrial, space when XXX,XXX shift pivot operating strength in and some us a FRP have of and tenant of In our is the world portfolio do our shut XXX and long-term tenants commercial not a portfolio. tenant

XX As square months, space, X to next operating the and XXXX, industrial in over of of office next FRP X,XXX to and [XXX,XXX] apartments retail had June XXX,XXX an deliver deliver days. with another due operating feet the XXX square feet additional due with

safe is it’s mode. to that to and to]. story. hard John. the foundation to capitalize our to the decisions to I’ll FRP our Central on in growth Thank and share solid back growth So [not to never call you, been more enables We’ve us turn and is excited now sometimes opportunities say financial success make

John Baker

David. you, Thank

questions for have. any now of the Let’s open investors any may floor our

Operator

Company. Curtis comes first Robotti from of [Operator Jensen question Instructions] Our &

Curtis Jensen

I’ve got a royalties. the few questions. One on mining is

up kind basis? been were on you the have a would acquisition, of same-store the If to exclude revenues royalty

Unidentified Company Representative

I think mark. under they [Blandford] was acquisition would $XXX,XXX I in have -- the last below. to $XXX,XXX year. Late like just want dollar say, been was the

So good thing we it. got

John Baker

other business at which and business Their don’t much, that have mining is Northern is actually but properties, in Fort is Vulcan Virginia off. like them. Myers obviously, that strong. And not it’s on they falling we their

Curtis Jensen

Yes. the think? rest and of in a And really NOI Is is of I guess out and you do Maren. had going run Dock kind QX the at $X.X year, million year, you of bump for a And good next kind assumption? a reasonable into that that nice rate

David deVilliers Jr.

grab increases, this for each renewals, their where another to up Maren, is and basically in tenant one were trade Curtis, Both and David of X X so. hope for back. were outs, good we on NOIs Dock some the deVilliers. comes leaves the but them. only XX% quarter, able not We about pretty the Well,

buildings. We X. We’re hard those those in occupancies of both really mean, because is and up. maintaining starting to occupancy to It side both And Occupancies I by the quarter’s of XX% starting itself COVID, strong residential of over starting coming occupied it’s hit some really average along. dig were in are of XX% Bryant out. and we’re end. got we’re -- Street in kind go

month. over of the beginning little the We’re as of XX% a

riding because of pretty hopefully are -- Street it it. was There’s everybody things but nobody concerned really in got right the [indiscernible] direction, runs COVID. by the about red hit Bryant still. even that line COVID, right -- So moving still was everybody’s

Curtis Jensen

Yes.

mean, that expenses Okay. you that at Are of your away? properties or these I process are to the going of anything in that or supplies there COVID-related staff extraordinary incurring were you’re... any you think kind

David deVilliers Jr.

not It’s it’s certainly reduced. been but waning. over, It’s

Curtis Jensen

out get then And Okay. then way. more, couple a just I’ll and of the

up and and On mean, lending, relative your homebuilders lending just and expectations? is generally are home how unfolding kind original rates homebuilder kind what’s there going on -- down, demand expectations? relative they everything developing these your ventures, And mortgage of things to that’s I how with original are of to

David deVilliers Jr.

continues Amber we Ridge X But X, by hope takedowns Curtis. ahead ahead and it homebuilders. from of of schedule, the way. have it is the is actually schedule Obviously, We that

big literally. of Prince could Harford it’s mention, We’re we’ve substantially that County effectively a not counties of to expectations wholesale all and supply, County, is And at to that land are maybe of -- all $XXX that something and with condition I contract is George’s whereby point land. But break really metrics the thing entitlements other months ahead supply million to a than on one their to of the selling is you going that is, vice it’s what also look August, piece under the got that the the the metric is Presbyterian underway. at through in And demand -- were. we that’s obviously as month and in on, precedent X one, one not these is Homes And our that’s original success and where something the both our beginning under eyes got of again, have X that there versa. borrower and are X X -- -- thing and from where the one of of we’re less good supply-demand X entitlements, the -- we equilibrium we’ve the like is

sale but that look, making when look is that recently executed going these homebuilder, done a this fully thing the of a national sure we’re of have to and going decision. a where But that the just take come and we’re we’re we’re contract happens, the things rash substantial look So all was deposit. to obviously they to at end year, make a at stand with not there going

Curtis Jensen

It’s size pretty a commitment. good Yes.

sold develop. I gain. be property that on nice remind question Brooksville the me curious Can you kind at to there guess with I’d these things So of see last were is sale? was was, excess And guess, how I the what a proceeds

David deVilliers Jr.

close Probably guess. to I to I pretty the had don’t gain, But know. if

Operator

take Stephen of We’ll our Farrell from question next Instructions] [Operator Oppenheimer.

Stephen Farrell

few seeing Are kind What for at like environment a What’s D.C.? quick you there pretty multifamily have be questions. just the rates? here. are opportunities of sellers are a now? higher I’ll there on? Or I cap in holding

David deVilliers Jr.

some Pretty for still of deVilliers. been these, we cap type Dave It’s the low is Class is pretty environment This The A still buildings. much from the fairly same. for rates of what strong, understand.

Stephen Farrell

supply sort And there’s then terms do reaching of the inflection in think do an of to you in there? you think go? you’re market Or point room

David deVilliers Jr.

I it different are, obviously, submarkets. the you where depends on think

feet continue new to might that coming be online For but while. come the which obviously, in, be assuming -- example, that first for anybody other in going with X,XXX hopefully, But it’s floor of the we’re block, furniture. and case, XXX-unit get be Verge, our in there earn can places, that’s square we apartment submarket. a retail will located, to is that’s building September, to The we’re on kid going only it’s where where There’s not the online the

Unidentified Company Representative

-- the I’m as correct around wrong, David, ballpark, of submarket. kind as area next the of that development built Point, if correct? that in the at But Buzzard area not kind that’s the footprint of It’s Anacostia directly out me

David deVilliers Jr.

but of over answer there’s not around to But one true. online. But new that’s coming a a that’s Yard. on not it, the even X of It’s coming other next part of ballpark X Navy There’s over ones area, product the online months. the one the there’s considered dearth question, by It lot to coming is. whole

Stephen Farrell

re-leasing market? sort markets. impact Amazon the other had of that any had warehouse in we’ve obviously, industrial, Baltimore Has within then on And

David deVilliers Jr.

least be and Not point. to has maintain buildings continue Baltimore XX% we this seen, on been up that have, it is but looks and strong basis. the at at really this like to It strong remains will a going a

indications. any seeing not We’re

down rents been. have the the matter that’s but know don’t that are and been stay, what As roof it’s up amazing increases a to the and fact, going XX%. of been going I rental through have

John Baker

by Baltimore that say would heavily is deepening I the of Stephen, impacted the harbor.

as It’s it’s by all imports not e-commerce well. So driven. driven

Stephen Farrell

the you new opportunities? And in you’re where the Are are here. your terms last out question that stock when repurchases, comparing viewing growth of just given How capital pipeline investment penciling especially allocation, now? is to the you share

John Baker

look We are. the We at it, time. course, of all

got philosophy prices know, much back. rather But low, far as projects it stock of Our our when want the repurchases the philosophy. as on it. we’ve in all We buying repurchase company we’re we we you share of if we is That’s are we as thought the us. would to steal ahead had when good -- grow too more

Unidentified Company Representative

really of I the in to money other on repurchases don’t invest Yes, been and use had one a to asset -- or to it Since projects. we’ve hasn’t new that make. we’ve sale, had choice the share money

such be one the we each it. competing find that then been see has we it. those been So it But I share repurchase, just not at hasn’t other. -- we think we’d discount more so when other. things of invest don’t X in project like, If been a crazy that to It’s with we have fallen not a repurchase that the or we far,

Operator

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

Bill Chen

I couldn’t, able make the but I’m I join to the able I to call. thought was call.

of you this tour possibly from Day hear Got a questions. a we Verge to The give Do Investor of to an investors plan good and a couple have guys. So host year?

John Baker

was We Days change. other would those do subject to I every year. do that’s mean, I Investor we thought not. that

our I But If years think something every think it’s we’re to the you it. given happy do, of enough. of size couple do all company, should is we

Bill Chen

[cat with me I let new some among] because Well, investors. chat Okay.

are shareholders maybe event, you to get became back and that like and them think I but scaled guys. year -- survey there down the chat me maybe it this because with could be some appreciative, and Let see a that interest I’ll

John Baker

Thank you.

Bill Chen

I From a someone a how would And on forward? the permanent don’t It’s pleasure. this with know if XX%. -- going earlier. someone financing problem. that’s Riverside, be know but don’t question also, income earlier, always that statement yes, if asked perspective, if asked And this I no don’t I know now treated

Unidentified Company Representative

-- Maren to the in could as And XX there and the result, statement be sheet it building. As will we Maren, it a trigger because Riverside. had ability up. not were, opportunity the consolidated it’s a it sell statement far or control that and XX don’t an like as Dock write with income income and balance was we’re... where goes, Dock That’s our zone and we consolidate have with We

David deVilliers Jr.

own only We XX%.

Unidentified Company Representative

Yes, and XX%. we own only

Bill Chen

going Are be... we to

John Baker

say, I going I And XX% Bill, it’s occupied. to it refinanced wish XX%. we think all, have was I first it. was of

Bill Chen

Can you the that? interest rate on share the amount what was of

John Baker

you that? do David, have can -- you

David deVilliers Jr.

it $XX rate million fixed It’s X-year Yes, a million. of was $XX at it’s loan, X.XX%. a and

Bill Chen

Great. Got Okay. you. And I guess...

Unidentified Company Representative

very subsequent the to That that. to the end quarter, about clear be was of just

Bill Chen

the subsequent of to was quarter. That end the

you. from forward? guess, line on with Like we the the cash item statement that? flow up that, from I Okay. as would start Got receiving show going distribution distribution will And flow that a cash statement,

Unidentified Company Representative

refinancing? income from property The itself the from the or

Bill Chen

From Riverside?

Unidentified Company Representative

are making cash up will the ventures flows So distributions joint that operations. positive show as from for income

In section. up So the that it’s as in we’ll the turning move property meantime, as the area. showing profit, is to soon then investment to

Bill Chen

you. Got

there’s even kind it this yes. before. it’s consolidated, there’s value show if -- we like those And cash and a coming sometimes about mean, amount is talked properties because from up, may though of the flow. where I XX%, not tremendous I of Okay. that not in it’s guess, and I’m

I is from going flow amount and Riverside and is parent much a it’s cash think much the properties come those them for are -- be what both projects. distributed cash Because to that’s just it. of there’s understand flow And of that to cash performing pretty how from flow to shareholders company. likely being Jackson, to important how how back are going I good understand decent

flow value I think help us the question is you’ve lot understand on dynamics, created forward. shareholders And and just million $XX that it land final will making going those understand the to my easier on the think, project. for the cash recurring I

Let’s kind the there [indiscernible] goes to say inventory, right in lump X that? to is there Like respond down assuming be optionality assuming I’m Am all it’s that in of flexibility if -- sum, drawn like that I is at market won’t to higher, condition? in some it market stage. from

David deVilliers Jr.

Absolutely. Absolutely, Bill.

goes develop forward, We’re, say, a But tremendous of there’s to we’re set -- needless different a no, X lending there’s and different a lot from we thing watching pretty have it safeguards thing that closely. to in this if up sections, perspective. this

the So very we half very, near peak is will $XX million watch of total, Probably doesn’t get even less capital anywhere The that. that but closely. that. than

Bill Chen

and that have you other guys put the either/or. all. Got on where think buyback. cards, you. will be share me an management same comment at the That historically I I always Board My the number. not shares, same will we always back in don’t that, trust My and it’s surprise to does the bought team I be know suggestion

I think starting been would assets flow. in XXXX, creates I a definitely value there’s approach lot a And that a stabilize, cash been asset created recurring of to the these and sale lot suggest which are of since works. that’s just mixed

be So my don’t price be the to anchored suggestion just, would paid previously.

value, up lot a the buyback. XXXX lapped since has think big and value we asset the in intrinsic the I company since gone of a XXXX, net

more So the value. create target target on as that floating a should we buyback be price

be I’ll actually continue is as my steal has if notes previous suggestion risen. I the to to that to the that’s So stabilize, And because assets it’s be to that’s price price to interesting. think share not happy anchored my paid, compare these a

John Baker

you. with agree We you. Thank

Operator

at questions. remarks. like It to further management over back call this have turn additional or time to we I’d you. any closing the no appears Thank for

John Baker

strong see, We you Well, interest questions. your segments can group FRP. we’re markets. in all as in you in a a mode and of thank appreciate And those for growth industry

interest rates for positive grateful and the and the from flows strong impacts of balance We’re the are, of rising inflation cash operations. and sheet therefore, mindful

updated quarter, our can Investors We look much. deck the an information, to together your update period, you and Presentations. you we For next we put Thanks Investor forward to in highlights with again this talking financial for each under you from to which find website slide so plan this quarter. section financial of

Operator

for participation. today’s concludes your you Thank call. This

disconnect. may now You

FRP (FRPH) 15 Aug 222022 Q2 Earnings call transcript