- Earnings call transcript Q3 2022

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Operator

Good day, everyone, and welcome to the FRP Holdings Third Quarter Earnings Conference Call. [Operator Instructions] Please note this call is being recorded, and I will be standing by if you should need any assistance. It is now my pleasure to turn the conference over to John Baker, II, CEO and Chairman of FRP Holdings. Please go ahead.

John Baker II

Good afternoon and thanks for joining us today. General and deVilliers, FRP, Baker and Jr., CFO; Milton, Chairman today with III, John Baker, III, John David deVilliers Accounting are our our Klopfenstein, John our CEO Vice Officer. and of me our our Chief I'm Executive David President; Counsel; President; John

risks results from on could from reports. remind by relate which forward-looking to quarterly actual future, are to, and Before me investors cautioned call, you I begin, filings, that those that this indicated statements. These limited to differ and are events materially nature and time SEC in subject to include their time our not that cause annual such let risks in but any uncertainties listed include, our statements made to the

obligation This two reliance an to result agreement on period as and XXXX, law or Listeners announcing another are forward-looking results to revise press and imposed ending Steuart forward-looking cautioned September we Investment the quarterly or information. update a our statements. MRP as with than statements Company new for have such not We undue One, XX, releases. week Realty. issued no other by of events future any place

ago, our year. a up Net in The year. very which the over in David income first outlook, moment. same months was of up increased was in success, operating year million, moving contained up X the and with you results will quarter detail USDX.XXX charges rents walk last which more barometer quarterly USDXXX,XXX, the encouraging. September, from in and USDXX.XXX Net press is through deVilliers our internal income, operations release our main were needle. ended million were for XX% lower the year a Revenues X.X% period amortization XX% from

newly section include XX, and of and partner properties second with Point release Investment a into joint Buzzard Capitol in completed and ourselves. Point. undeveloped Southeastern Vulcan There leasing. XX just Riverfront Steuart-owned began the by Riverfront Phases in ready-mix press parcels combine properties, X projects and Buzzard MRP, Company, are by Point. our our X Dock an and various announced which The plant properties to of the The final are Point-Buzzard venture. project ourselves These which Maren, owned Steuart The MRP FRP, longtime owned agreement X Verge entirely Washington and our are These X in X Buzzard

The and projects, the design, XX% least new retain develop we FRP at financing control projects, and of XX% As of will MRP development, each the owning Steuart the MRP XX% XX%. will the with of FRP to have to and right on XXXX. to properties their Steuart XX% through and FRP X are and to every can MRP-FRP so properties. be developed developed X properties properties buy right whenever we years MRP's scheduled the The be of to choose. XX% ownership

X deal We XX% that purchase will bottom our projects first purchase of in of X capital and million Maren they excuse And hottest design give required which The we Steuart include the MRP to Phase its timed these Steuart's will line operated. the are markets and having XX apartment will we've Dock By square have and X,XXX of The in our -- XX%. of predominance quality control. feet can is properties extent right conjunction to they developed, in the and quality and except developed, U.S. XX apartments make rents capital. me, having by nation's can and absorption. control with FRP. and that of in mixed-use of MRP, and entrance have to are some so maximize contingent, these when developments, ensure we've the which reputation. of beauty are they of of And southern the retained the by control how of reduced which one are these the they're projects, level is high uniformly coinvest all entire This as a the the control, Steuart how FRP, and neighborhood comprise will will this projects, for sure invest, if ways, of

the Our a we over believe it's with know to In process David a all X the which Arnold it. X stand, decades. a deVilliers transform will are in and truly people, all deal that have in deal & excited heaven. attorneys, we carefully where parties. about carefully This FRP III, is We Porter, especially controlled all we short, working our crafted and to fair of outlines rights made

Now, me I our deVilliers, could, ongoing through you walk to let David if ask President, our projects.

David deVilliers

call and Thank USDXXX,XXX in or the this the industrial was QX operating Relative of to afternoon. income platform, for our day in-house versus John, in-house of our good period Management, operations on increase Asset for those year, 'XX USDXXX,XXX an XX.X%. net last to you, same

buildings of X our Park end the XXX,XXX spec completed in and totaling of leased the at XXXX fully collectively feet quarter. became square Hollander Business second at third The

remains first multi-building Maryland our This in quarter square-foot occupy Supply XXXX. became quarter off the the Park, the We projections. XXXX. occupied building at ready final be Cranberry the will of is Park fully of quarter first expect occupied park in the for in renovated occupancy XXX,XXX XXX,XXX chain building square should warehouse performing original cap notwithstanding, XXX% full ahead also that park foot of and issues its tenant Aberdeen, Run XXXX. first build-to-suit Hollander warehouse in to Business Business

annexation the in to XXXX. Existing up purchased On have projects in Maryland, designed entitlement carrying completed will product track of past in for follow the trailers County, on-site storage leases to This Harford of offset and Building to warehouse we the costs. square feet queue. create XXXX. front, predevelopment in XXX,XXX X helped land our XX-acre of the the we quarter, process

we can are XXXX. in We here construction hopeful begin

too of QX XX-acre XXXX. other our on Aberdeen. could Perryman assets in early are building section We knee-deep on market to as square into distant construction dynamics, support not the Depending process from our also parcel in the this project industrial XXX,XXX begin foot Maryland, County, on permitting approximate warehouse as an Harford

total the purchase Finally, assuming quarter, a land of in 'XX entitlements at of Cecil these product 'XX. that Hollander plot additional completion begun X.X X County, feet shortly hold when aforementioned to we'll warehouse market conditions, square Business Initial the build-to-suit will On feet. added warehouse this construct in and will northeast, we Maryland. add X.X at million square and Park our during square have of due This industrial deliver land foot acres assets of expect predevelopment to development plus the in industrial building operation XXX,XXX this distribution projects, of to XXX million Hollander, ground favorable over completed warehouse. platform we to or Cranberry

occupancy In Royalty XXXX, same the in due and purchase of for period versus of fully an and as the year, USDX.XXX income mentioned our Quarry] the USDX.XXX revenues property at at over Lake occupied last the million, and new to of same the toward our lift year. the John million As saw division the in to buildings Run increase Mining his Business Cranberry our healthy Hollander the million last Royalty a XX.XX% we quarter operating April Florida. primarily was look period [Blandford County, business Net provide NOI. Mining Park increased in should remarks, segment, opening USDX.XXX

stabilized MRP distinct to projects and Moving our maintain Properties. we third-party partners, Johns development with Woodfield St. Development, Currently, ventures. on both development under X Realty, joint and

D.C. the As our MRP Bryant end. and for are Maren, of These XX% maintained quarter, at stages Dock is than projects Maren welcomed tenant office and X first venture platform X leased XX X various and underway XX% are the month. includes Verge, XX, where during X/XX/XX, Phase operation. quarter's at project quarter. and in located Leasing Verge of the joint and Dock Verge became joint in and its mixed-use Dock retail XX partner. our X,XXX X, venture square we Verse. occupancies at XX% is the Street was and feet retail at last better development suite this projects of complete

residential Phase X increase retail XX.X% saw of XX.X% its September D.C., Our mixed-use Union in Station project occupancy just to Bryant of transit-oriented north occupancy XX. as Street was and

XXX above feet Creek, Hickory single-story occupied remained in development were the quarter, XX% Carolina, Johns up XX% XX,XXX as XXX XX.X% the apartments and as our platform pre-leased. our square apartment third of was year year as of Riverside for and Few in quarter's in project quarter's leased Statutory feet Johns, Properties. office third end the units projects retail Baltimore, Greenville, XX% Delaware also more current square our more of than third-party progress. in excellent defined or the with mixed-use office of asset the Creek's August, saw the Maryland occupancy stabilized with X for balance while XX,XXX retail, XXX end and a Richmond, apartments, in additional as JV make project JV remains days. at and end. are X,XXX St. old occupied X includes complete Our Riverside South and than quarter, retail XX% feet our were partner, XXX% that DST of that XXX St. service of placed square at Hickory in before end. quarter. Virginia, occupied will with of became Jackson's an the Woodfield third is XX the Trust This be projects

ready projects Bryant for and a versus totaled including in X,XXX the last XX, FRP's of XXXX, X the XX% when apartments remaining quarter share a increase. construction Street, represents September had USDX.XXX which we end increase occupancy third in third Maren, currently in spaces retail million Riverside, year for for X,XXX Verge, of the this will the apartments operation. income X XX% The XXX by these and completed Dock of million net USDX.XXX As and over be under the of XXXX operation, operating third quarter projects, XX, of apartments was quarter year.

retail Windlass our joint mixed-use current developments, So in Creek of and and X,XXX apartments ventures to and XXX,XXX relative totaling square third-party feet notwithstanding, multifamily X summarize, to retail. are we mixed-use currently invested projects, Hickory

and to feet Finally, existing cannot some freedom by create the developments Realty, and on In to newly with profit-induced parcels waterfall this additional a to activities for to of the add apartments our mile of joint along commitment at agreement square the ownership venture parcels X opportunity ventures, the XX-plus preferred have and has PG Anacostia of approximately development the determines have the penned current represent The plans interest and with commentary and in of a located XX,XXX final with feet that River Steuart uninterrupted down. Predevelopment split we apartments as a winding controlled X a charged remarks, years, to X million entrance project County, includes of and we individual mixed-use our our The group shovel-ready projects, Washington. MRP feet brings and that X,XXX John's conceptually consider. is will Maryland is return apartments alternate venture we pursue existing lending proceeds. Together, retail XXXX. new Investment XX%, X.XX square X southern Southeast anticipate on Phase unique XXX total in investment planned postscript a above single lending capital. over a third-party our multiple commenced, Amber sometime partnership to our development already the XXX,XXX destination Ridge to project of Company rate waterfront program, million. minimum the a nation's a on generational some among waterfront our The opening all project, Steuart as and venture USDXX.X partners of which square XXX-plus

shut of returned In sale horizontal space inclusive of XXX are complete. interest, XXX XX, of a As XXX,XXX of total have operating March September maintained which down, under to feet the square was lots, been USDXX.X the and world million XXXX of of FRP of taken been contract when all national industrial, XXX to office, portfolio as of apartments. have FRP with the retail homebuilders X/XX/XX. of and down, development

now units space XXX,XXX and operating of industrial formidable days. decisions projects, us of As FRP categories. retail XXX,XXX This tremendous is make it breadth are and hard due in next financial speak to turn share. operating of to. September a proud period office mixed-use the to not apartment this we does without competition, And None of be XXXX, story would capitalize and residential with of is square foundation much FRP the enables apartments to separates from it of growth and X,XXX not Thank a an industrial you. solid of us both feet is our industrial deliver I'll on and that a additional possible additional for pipeline This which John. the eager XXX had of in or growth the square back and feet to XX sometimes great development opportunity to and

John Baker II

you, David. Thank

open if might. questions now for up Let's we it

Operator

Our Instructions] Emerito first [Operator Numantia. from of Quintana question comes

Emerito Quintana

Can you hear me?

John Baker II

Yes, we can.

Emerito Quintana

My long XX in your aggregates the disasters you quarries, hurricanes the of the Spain long name in from I'm will our of is the the And hope such years? I in know shares Holdings, growth the to to and I of for per owns how because like would FRP a and calling business Emerito as term? Quintana, Florida price mining of term? how the is see in the X% estimate What long so expect fund of do do ton remain business natural it you time. affect

John Baker II

and simply Martin the reported, last increase have have course, what's the rising, nice aggregates X that. no because as One, belief at even course, business of of years, we the to it's for to Vulcan, is and over a X XX has times pricing we to rates The down of throughout it's the is would high quarry you, next happen their in It's rock permit mortgage will that, the business. in what an to and XX% Virginia, escalate I running continue you my at Marietta a this proud With inflationary have I affect going or shareholder. amazing that and years. idea And that homebuilding to dramatically. the But seen certainly for inflation segment pricing of that XX slow in out hard growing quarter. think, it's certainly could Georgia business pricing years. you Florida, of been period today's in XX% well rates Florida, things. in time But business meet see of United for expect up in greater-than-inflationary growth excess to Emerito, maybe to States we're

Emerito Quintana

you want you But Okay. opportunistic of the guys know can expected buybacks. the be to and how buyback? an And the last [steal] do I one. eventual see return you when now stock with

John Baker II

Okay.

going low. We happens invest forward. carefully preference than are the usage plotting rather our it to just have to our that be to unless And projects in in we very invest is stock

in very And we money joint the the that Steuart about forward the because need so careful got especially we've venture, over going for with next be will years. buying stock XX

it would will so And while we available projects. in, I think cash I for of us good never for But too say we wouldn't badly. prudent a is buy tempted bit future thing the keep if to

Operator

next We'll & Jensen Curtis take Robotti our Company. from of question

Curtis Jensen

me hear you Can okay?

John Baker II

Yes, sir.

Curtis Jensen

it's environment? I'm work? then that and you'll in could you it, create about where you it's of buildings Is guess, at Steuart And announcement I will interesting. depend swath resource going Buzzard sudden, for on large done control Or by those guess example, my question. these pretty be guess and just all things, wondering, that's and connect can me have the projects is, of parallel still the and fashion first what all of it'll strikes you'll I or Point, you can I serial very dynamic this at to fashion all -- as if where on? guess, I architecturally property planned projects multiple a referred have a community you -- be other you these master almost

David deVilliers

all can in that you and because can articulated. We is to said like with things David community types sorts this scope really masterplan bit The size do things about think my us. really We lots. Well, that program just deVilliers. different at thing create do We like can all first what for like properties remarks it's combine up a run exciting the I that Curtis. is of we plans. a this We we of a there. We I'll the individuals of ability have do. it, can little And It's I project. around. can take an of can't come the part, move Obviously, of development

in slate, purposes, much do the Zoning have So of the a but we excited just all they're projects Office clean come certainly market yes, that can urban of a development of input owners the action intents lot Commission we that design how and one about different for and pretty it's Planning, appropriate up dealing set with locations. of with. they I pretty Relative to get dictate whatever and as logistics from and the will We'll developed, well. think

go away the design buildings the have concrete with you For by to program, to then and want going it. build to. driving water the something we or example, trucks from sometimes any than we be to don't But more we're towards way having want

we a for of when be some John The Steuart's anything. market's could all at and want the over projects them. to So requirement much we determine you the purposes. program control buy have we going But properties, to as pretty other development two articulated, intents dictate ones years. actions do once. much We XX as as do those doing Theoretically, to

Curtis Jensen

terms somebody stipulated that say, do or works? happens third-party Okay. to how difficulty] a this What that you is that's appraisal the -- on in subject have of, [technical valuation let's

David deVilliers

saying, projects -- be... you how I of but the do broke think value up, think what will I land the you were you determine the

Curtis Jensen

Is appraisal of a type third-party thing? it

David deVilliers

ready, of before. when through shovel for not Yes. We'll they properties go all the an appraisal are process

And a if third -- appraised, the being would ready, the a Steuart, then get Steuart we when an within in theirs. people didn't MRP-FRP the projects one. come are them we certain shovel we case get get FRP-MRP; of percentage, So these can we would get we appraisal,

be issues environmental properties effectively whatever shovel-ready, the from gets appraised arm's for will not they're clean Also, be length parcel. that program, before. are process, reduced it's So but when an out there will which appraised the a

Curtis Jensen

Okay. terms But in whether to pretty to specter I up some guess the Steuart alignment borrowing like you discipline costs, on And a have good outlook getting then feel with higher about and a approach second. you you right probably probably are construction your I'm a your married higher Do is for in here respect everybody. curious long But philosophical I'll costs time. has guys wrap of imposed life? and how now of

David deVilliers

as as endgame. but I think a projects. economic what are sizable good into different forward we do, go the these sense. all a all of And investing We can pretty groups, having have same three that we you is makes the shovel-ready project with really amount determines dollars

design. have We all to the do

to price general contractor. get guaranteed the We a have from maximum

We have return market financing. to cost. give that And projects acceptable would dictate get on to the appropriate us of the and would cost have appropriate these obviously, the

So definitely I aligned think our interests that in regard. are

Curtis Jensen

first is talk share But you the queue? think what can about in up or you

David deVilliers

said the I of process Steuart. and Well, as about Office remarks, in X And Commission. then Planning retail, X square I property, Steuart's of the we're the song first which with on I the and apartments, ultimately of predevelopment through my of partially on this feet believe we the on guess, about dance XX,XXX are and of opening XXX-plus it's Zoning the venture, through, going phases is the phase

out maximum time and to And move then the see decide market back just we so guaranteed there what get the want will the then forward and forward dictate, to approvals sit kind is there, wait. then entitlements of the price, and that financing once drawings go and we with what or we whether appropriate at and and off would

Curtis Jensen

to Keep good guys. work, up

Operator

our Close. We'll John Oppenheimer & from next of Instructions] [Operator take question Koller

John Koller

on about I what I question you've balls And at My the seems you pace the to not And which capital really it allocation necessary. fine. know considered venture. of at how and you you to actually depending all you're curious next of be a so I'm probably Bryant the Street, how are new you'll which you that me the that and around of cards, then between But thinking that capital air, what buybacks revolve in about raise might are capital like the consider if require? number going raises these. in phase joint now the which between developing might and pace think develop to large is if the questions industrial, at need it's the

John Baker II

that? David, a want you to take crack at

David deVilliers

least on equity partners, other of things at of like one Obviously, program, is reduces FRP the back that Steuart, these amount it Yes. be these then and projects. would the we I'll into that having putting this about other the with that other get ones, the partnerships,

For XX, off and then XX%. about we of at Dock did at started XX% when it we the was ownership example, Maren

equity less. to be obviously, at be And so that so XX%, now be substantial, is to going required is to It's the but we're still it's going less. going

not Another be in Bryant the but we submarket, which ownership XX% example would Street, a of there. have different this in [part] is

a requirement, we that there we So be up the back from more But one thing XX% to if going many in question of to have is will you the capital XX% shortfall about because do money to in obviously, anywhere equity. add how an opportunity, balls the less be might We the have of air. so of equity. up putting desire

there's to how there. want anything enough We dry the And bank are conscious comes powder that as utilized. that to make is stand sure capital to pretty we much in very our out off

darn relates to conservative So any we're have one we how invested it money time. much at pretty that as

this Maren. example, of about is of first purchased in this one our programs came XX% a ownership an As as of result they the of and interesting Steuart, that phase Dock

X. Phase we're from came invest is then using quarter sale another some which proceeds, about million, Steuart up the those USDXX in that after to proceeds So that to third us and

like additional sell created we inside in capital. of in the conjunction we come with Board we're rails more if probably so, to something a with And delay either up have to to of. have outside has that even of get set the So to maybe that, order stay or the and Board, ourselves going projects

John Koller

Okay.

I you be Bryant and think to Street going guess, most assume industrial I less venture will think or up. lined opportunities in maybe would would, then space I the time primary occupy of focus? that -- a fair joint the be it new you've this pursue of the to that still development your once is would focus? industrial, got is So don't

David deVilliers

we've in industrial Well, been successful program. our as pretty things can the you always -- one of

of As apartments it this fact, pretty new us money we're a all in and it got in off seed projects matter to take we industrial. to much where when still us in those involved and gave the to industrial sold now XXXX, direction. But we're

As all up, we in we quarter one not our said, that's we up, have leased -- XXXX. of that be and have the and fully of of even buildings right now, them first will is occupied

consider we do same We joint -- the or decide industrial. at we and It's shovel And the them go be partner. stand queue to development condition capital, that we not market, in three we we the at have when projects would which either or ready, get ventures, look idea forward for time. even is take we there to the take a a in the is our three maybe have a these down look necessarily

of For equity Board appropriate maintaining feet, warehouses, and we to we or bringing The square on, these important the square capital may to partner consider debt XXX,XXX a feet certainly and and the -- our not. is is to may very example, some big us. the XXX,XXX

equivalents we cash that And have. so that cash careful we're pretty protecting and about

John Koller

last Bryant just on The is then quick. I Street. And guess, one have, really I Okay.

the stabilization it. where and soon; be. hopefully, next portion small very get of soon. You're you you that the only know curious phase point is may a for how I developed large might And timeline a reaching what I'm

David deVilliers

Well, it's interesting.

the feel is the to and percent by and still program. tried everyone that sure next destroyed about to way make before at got a buildings. going good COVID side in want XX%. occupied, the a to fully have dig We the we XX-some it transit-oriented go is We out. that This operating. XX% We're grows to And and have transit-oriented We make forward up we residential phase. but that with ways is still sure leased retail want stays X to it and

direction, to to approximately comfortable X, as So the it a XXX preliminary yet, don't X Phase we buy right show have we would with already we we still on Phase apartments, with make really up moving of we're either And whole. option or -- would to side feel plans going ways in before an relates but we that go X. but the which to open bolted remaining the have a would be that property property the that have on

a we So to have buy don't to we our head that have whenever property. to as gun

of that owner of In fact, partners. property the one is our

our we at time it's So for believe decide matter right can the pretty and capital we a of but much X would all how the much happen, appropriate when use is Phase what we spend.

John Koller

you additional [indiscernible] timelines you is -- Opportunity requirement? then And Are something get completed? under that Okay. promise. being where to this in is have the I Zone question, last any Or

David deVilliers

-- and to 'XX. done hold that. That's We're got really it just We're taxes have with in pay till we got 'XX we've to we No. to all do.

Operator

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

Bill Chen

me? hear guys you Can

John Baker II

Yes, sir.

Bill Chen

but -- my XX me since time, question, main reinvest or had but believe and of Could cash able right the release, on you the balance haven't my now. chance I'm mostly that's to digest a question the so driving press the the the is, sheet, in highway, breakdown I What's now I the maturity Treasuries on give gone that? the right less last X/X months. up amounts that? color like on than X/X to on have And are some we that rates in date significantly main mature take as

John Klopfenstein

here. John it's Bill, Klopfenstein

that and in you or in X-month Treasuries, is every week Treasuries, as cash the the all vast of got said, we've it coming So got are invested mature majority X. we've some

just invested at this X So months. we've for X.X% week,

go-forward that's So our plan.

Bill Chen

you great is is some year? that hear. -- Got to as I X how than like years. have duration That's thought longer out long to disclosure -- of in as Like X the there it that goes you. much I like read there is

John Klopfenstein

are now a basis, that's of set of did or else -- do less. We million Everything maturing mature Treasuries X-month USDXX early did on to the we is more at X-year those biweekly and XXXX. end on, Treasuries

Operator

time, this no in Baker at turn have queue. remarks. And I further over it floor Mr. back the to will now appears questions we additional any or closing for

John Baker II

I'd without around us a not that we an here. to can in a really are is air. for Thank that been like that really over that We have, historic money believe the a laying which mixed about number in that's long basis that negative us. get projects, slow, this enamored hurry by without balls amazing sure and we ever to development do about one we of do raising in -- all we we're like XX- it change more building to a trouble. joining know lot the has decades. period And have about company, way immense to put of trying them, got you, add XX-year market well-timed value it assured very we a will while us company for the reserves in And -- changing That's getting does it our very a in to again, this the sounds a fact be We're of in moment period, if it's ability whether all, great feel and time cash industrial, certainly bind. -- especially in projects a, allow good in it's by -- you some financial would going fashion. the quickly, And to over can this to or way a want I these timing use. of world we our the out in rule whether with funny of phasing a grow make we've comment what change, not meticulous

So I appreciate you all's interest.

we're talking good look to all I think next and ride, for quarter. a I forward you to

Operator

This concludes We call. today's you for conference your thank participation.

at You disconnect any time. may

John Baker II	Chairman and CEO
David deVilliers, Jr.	President
John Klopfenstein	Chief Accounting Officer
John Baker III	CFO
John Milton	General Counsel
David deVilliers III	Executive Vice President
Emerito Quintana	Numantia
Curtis Jensen	Robotti & Company
John Koller	Oppenheimer+Close
Bill Chen	Rhizome Partners

FRP (FRPH) 12 Nov 222022 Q3 Earnings call transcript