First Quarter Highlights and Recent Developments
- 130% increase in Net Income (
$1.3 million vs$565,000 ) - 22% increase in pro-rata NOI (
$8.53 million vs$6.99 million ) - 92% increase in the Multifamily segment’s NOI
- 36% increase in Industrial and Commercial revenue and 47% increase in that segment’s NOI
Executive Summary and Analysis
This quarter represented another meaningful step in the growth of this Company. The brisk pace at which we grew pro-rata NOI in 2023 continued into the first quarter of this year as we saw a 22% increase over the same period last year. The primary driver for this increase was our Multifamily Segment, due in part to the stabilization of .408 Jackson and
As we have communicated on a number of occasions recently, we have shifted our development focus primarily towards industrial projects. The returns are currently better than most multifamily projects, and are less capital intensive and less reliant on debt. Industrial development has always been our core competency and we are excited to flex that muscle in markets both familiar and new.
The Company is in predevelopment work to get shovel ready on two projects in
Finally, this quarter, we entered into two separate joint venture agreements to develop industrial product in
First Quarter Consolidated Results of Operations
Net income for the first quarter of 2024 was
- Operating profit increased slightly as favorable results in Multifamily and Industrial and Commercial were offset by lower Mining royalties and higher Development Segment losses.
- Interest expense decreased
$95,000 compared to the same quarter last year due to$127,000 more capitalized interest and increased costs related to our credit agreement. More interest was capitalized due to increased in-house and joint venture projects under development this quarter compared to last year. - Interest income increased
$401,000 due to an increase in interest earned on cash equivalents ($552,000 ), increased income from our lending ventures ($449,000 ), partially offset by decreased preferred interest ($600,000 ). - Equity in loss of Joint Ventures decreased
$606,000 primarily due to lease-up of The Verge.
First Quarter Segment Operating Results
Multifamily Segment:
Our Multifamily Segment consists of two consolidated joint ventures (
Total revenues for our two consolidated joint ventures were
For our three unconsolidated joint ventures pro-rata revenues were
Units | Pro-rata NOI Q1 2024 | % Occupied | Avg. Occupancy Q1 2024 | Avg. Occupancy CY 2023 | Renewal Success Rate Q1 2024 | Renewal % increase Q1 2024 | ||||||||
Dock 79 Anacostia DC | 305 | 94.8% | 94.8% | 94.4% | 71.1% | 2.6% | ||||||||
Maren Anacostia DC | 264 | 924,000 | 95.1% | 93.8% | 95.6% | 50.0% | 2.5% | |||||||
Bryant Street DC | 487 | 1,496,000 | 92.8% | 93.0% | 93.0% | 56.5% | 5.7% | |||||||
Riverside | 200 | 224,000 | 94.0% | 93.7% | 94.5% | 65.7% | 1.6% | |||||||
.408 Jackson Greenville | 227 | 293,000 | 94.7% | 93.0% | 59.9% | 36.4% | 3.5% | |||||||
Multifamily Segment | 1,483 | 94.1% | 93.5% | 87.7% |
The combined consolidated and unconsolidated pro-rata net operating income this quarter for this segment was
Industrial and Commercial Segment:
Total revenues in this segment were
Mining Royalty Lands Segment:
Total revenues in this segment were
Development Segment:
With respect to ongoing Development Segment projects:
- We entered into two new joint venture agreements this quarter with BBX Logistics. The first joint venture is a 200,000 square-foot warehouse development project in
Lakeland, FL , and the second joint venture is a 160,000 square-foot warehouse redevelopment project inBroward County, FL. - Last summer we broke ground on a new speculative warehouse project in
Aberdeen, MD onChelsea Road . Vertical construction is underway. This Class A, 259,200 square foot building is due to be complete in the 4th quarter of 2024. - Lease-up is nearing completion at The Verge. At quarter end, the building was 94.2% leased and 91.6% occupied. Retail at this location is 45.2% leased. This is our third mixed-use project in the Anacostia waterfront submarket in
Washington , DC. - We are the principal capital source for a residential development venture in
Harford County, MD known as Aberdeen Overlook. The project includes 110 acres and 344 residential building lots. We have committed$31.1 million to the project with$23.1 million currently drawn. A national homebuilder is under contract to purchase all 222 townhomes and 122 single family dwelling lots. As of quarter-end 23 lots had been sold and$5.8 million of preferred interest and principal has been returned to the company.
Subsequent Event - Appointment of Officers
Subsequent to the end of the quarter, on
John D. Baker II will remain the Company’s Chairman of the Board of Directors. David deVilliers, Jr. will remain the Company’s President and Vice Chairman of the Board of Directors.
Conference Call
The Company will host a conference call on
Investors are cautioned that any statements in this press release which relate to the future are, by their nature, subject to risks and uncertainties that could cause actual results and events to differ materially from those indicated in such forward-looking statements. These include, but are not limited to: the possibility that we may be unable to find appropriate investment opportunities; levels of construction activity in the markets served by our mining properties; demand for flexible warehouse/office facilities in the Baltimore-
CONSOLIDATED STATEMENTS OF INCOME (In thousands except per share amounts) (Unaudited) | ||||||||
THREE MONTHS ENDED | ||||||||
2024 | 2023 | |||||||
Revenues: | ||||||||
Lease revenue | $ | 7,170 | 6,832 | |||||
Mining royalty and rents | 2,963 | 3,282 | ||||||
Total revenues | 10,133 | 10,114 | ||||||
Cost of operations: | ||||||||
Depreciation, depletion and amortization | 2,535 | 2,780 | ||||||
Operating expenses | 1,867 | 1,740 | ||||||
Property taxes | 807 | 947 | ||||||
General and administrative | 2,042 | 1,793 | ||||||
Total cost of operations | 7,251 | 7,260 | ||||||
Total operating profit | 2,882 | 2,854 | ||||||
Net investment income | 2,783 | 2,382 | ||||||
Interest expense | (911 | ) | (1,006 | ) | ||||
Equity in loss of joint ventures | (3,019 | ) | (3,625 | ) | ||||
Gain on sale of real estate | — | 10 | ||||||
Income before income taxes | 1,735 | 615 | ||||||
Provision for income taxes | 400 | 209 | ||||||
Net income | 1,335 | 406 | ||||||
Income (loss) attributable to noncontrolling interest | 34 | (159 | ) | |||||
Net income attributable to the Company | $ | 1,301 | 565 | |||||
Earnings per common share (1): | ||||||||
Net income attributable to the Company- | ||||||||
Basic | $ | 0.07 | 0.03 | |||||
Diluted | $ | 0.07 | 0.03 | |||||
Number of shares (in thousands) used in computing (1): | ||||||||
-basic earnings per common share | 18,859 | 18,832 | ||||||
-diluted earnings per common share | 18,944 | 18,912 | ||||||
(1) adjusted for the 2 for 1 stock split that occurred in |
CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands, except share data) | ||||||||
Assets: | 2024 | 2023 | ||||||
Real estate investments at cost: | ||||||||
Land | $ | 141,602 | 141,602 | |||||
Buildings and improvements | 282,780 | 282,631 | ||||||
Projects under construction | 16,730 | 10,845 | ||||||
Total investments in properties | 441,112 | 435,078 | ||||||
Less accumulated depreciation and depletion | 70,241 | 67,758 | ||||||
Net investments in properties | 370,871 | 367,320 | ||||||
Real estate held for investment, at cost | 10,832 | 10,662 | ||||||
Investments in joint ventures | 164,271 | 166,066 | ||||||
Net real estate investments | 545,974 | 544,048 | ||||||
Cash and cash equivalents | 152,484 | 157,555 | ||||||
Cash held in escrow | 655 | 860 | ||||||
Accounts receivable, net | 1,397 | 1,046 | ||||||
Federal and state income taxes receivable | — | 337 | ||||||
Unrealized rents | 1,770 | 1,640 | ||||||
Deferred costs | 2,798 | 3,091 | ||||||
Other assets | 595 | 589 | ||||||
Total assets | $ | 705,673 | 709,166 | |||||
Liabilities: | ||||||||
Secured notes payable | $ | 178,742 | 178,705 | |||||
Accounts payable and accrued liabilities | 3,829 | 8,333 | ||||||
Other liabilities | 1,487 | 1,487 | ||||||
Federal and state income taxes payable | 60 | — | ||||||
Deferred revenue | 920 | 925 | ||||||
Deferred income taxes | 69,456 | 69,456 | ||||||
Deferred compensation | 1,423 | 1,409 | ||||||
Tenant security deposits | 885 | 875 | ||||||
Total liabilities | 256,802 | 261,190 | ||||||
Commitments and contingencies | ||||||||
Equity: | ||||||||
Common stock, 25,000,000 shares authorized, 19,000,600 and 18,968,448 shares issued and outstanding, respectively | 1,900 | 1,897 | ||||||
Capital in excess of par value | 67,023 | 66,706 | ||||||
Retained earnings | 347,183 | 345,882 | ||||||
Accumulated other comprehensive income, net | 27 | 35 | ||||||
Total shareholders’ equity | 416,133 | 414,520 | ||||||
Noncontrolling interest | 32,738 | 33,456 | ||||||
Total equity | 448,871 | 447,976 | ||||||
Total liabilities and equity | $ | 705,673 | 709,166 |
Multifamily Segment (Consolidated): | ||||||||||||||||||||||||
Three months ended | ||||||||||||||||||||||||
(dollars in thousands) | 2024 | % | 2023 | % | Change | % | ||||||||||||||||||
Lease revenue | $ | 5,414 | 100.0 | % | 5,276 | 100.0 | % | 138 | 2.6 | % | ||||||||||||||
Depreciation, depletion and amortization | 1,981 | 36.6 | % | 2,264 | 42.9 | % | (283 | ) | -12.5 | % | ||||||||||||||
Operating expenses | 1,461 | 27.0 | % | 1,488 | 28.2 | % | (27 | ) | -1.8 | % | ||||||||||||||
Property taxes | 524 | 9.7 | % | 531 | 10.1 | % | (7 | ) | -1.3 | % | ||||||||||||||
General and administrative | 236 | 4.3 | % | 189 | 3.6 | % | 47 | 24.9 | % | |||||||||||||||
Cost of operations | 4,202 | 77.6 | % | 4,472 | 84.8 | % | (270 | ) | -6.0 | % | ||||||||||||||
Operating profit | $ | 1,212 | 22.4 | % | 804 | 15.2 | % | 408 | 50.7 | % |
Multifamily Segment (Pro-rata Unconsolidated): | ||||||||||||||||||||||||
Three months ended | ||||||||||||||||||||||||
(dollars in thousands) | 2024 | % | 2023 | % | Change | % | ||||||||||||||||||
Lease revenue | $ | 3,713 | 100.0 | % | 2,706 | 100.0 | % | 1,007 | 37.2 | % | ||||||||||||||
Depreciation, depletion and amortization | 1,562 | 42.1 | % | 1,265 | 46.7 | % | 297 | 23.5 | % | |||||||||||||||
Operating expenses | 1,281 | 34.5 | % | 1,056 | 39.0 | % | 225 | 21.3 | % | |||||||||||||||
Property taxes | 461 | 12.4 | % | 175 | 6.5 | % | 286 | 163.4 | % | |||||||||||||||
Cost of operations | 3,304 | 89.0 | % | 2,496 | 92.2 | % | 808 | 32.4 | % | |||||||||||||||
Operating profit | $ | 409 | 11.0 | % | 210 | 7.8 | % | 199 | 94.8 | % |
Industrial and Commercial Segment: | ||||||||||||||||||||||||
Three months ended | ||||||||||||||||||||||||
(dollars in thousands) | 2024 | % | 2023 | % | Change | % | ||||||||||||||||||
Lease revenue | $ | 1,453 | 100.0 | % | 1,070 | 100.0 | % | 383 | 35.8 | % | ||||||||||||||
Depreciation, depletion and amortization | 363 | 25.0 | % | 278 | 26.0 | % | 85 | 30.6 | % | |||||||||||||||
Operating expenses | 215 | 14.8 | % | 141 | 13.2 | % | 74 | 52.5 | % | |||||||||||||||
Property taxes | 63 | 4.3 | % | 60 | 5.6 | % | 3 | 5.0 | % | |||||||||||||||
General and administrative | 250 | 17.2 | % | 296 | 27.6 | % | (46 | ) | -15.5 | % | ||||||||||||||
Cost of operations | 891 | 61.3 | % | 775 | 72.4 | % | 116 | 15.0 | % | |||||||||||||||
Operating profit | $ | 562 | 38.7 | % | 295 | 27.6 | % | 267 | 90.5 | % |
Mining Royalty Lands Segment: | ||||||||||||||||||||||||
Three months ended | ||||||||||||||||||||||||
(dollars in thousands) | 2024 | % | 2023 | % | Change | % | ||||||||||||||||||
Mining royalty and rent revenue | $ | 2,963 | 100.0 | % | 3,282 | 100.0 | % | (319 | ) | -9.7 | % | |||||||||||||
Depreciation, depletion and amortization | 149 | 5.0 | % | 183 | 5.6 | % | (34 | ) | -18.6 | % | ||||||||||||||
Operating expenses | 17 | 0.6 | % | 17 | 0.5 | % | — | — | ||||||||||||||||
Property taxes | 73 | 2.4 | % | 69 | 2.1 | % | 4 | 5.8 | % | |||||||||||||||
General and administrative | 278 | 9.4 | % | 223 | 6.8 | % | 55 | 24.7 | % | |||||||||||||||
Cost of operations | 517 | 17.4 | % | 492 | 15.0 | % | 25 | 5.1 | % | |||||||||||||||
Operating profit | $ | 2,446 | 82.6 | % | 2,790 | 85.0 | % | (344 | ) | -12.3 | % |
Development Segment: | ||||||||||||
Three months ended | ||||||||||||
(dollars in thousands) | 2024 | 2023 | Change | |||||||||
Lease revenue | $ | 303 | 486 | (183 | ) | |||||||
Depreciation, depletion and amortization | 42 | 55 | (13 | ) | ||||||||
Operating expenses | 174 | 94 | 80 | |||||||||
Property taxes | 147 | 287 | (140 | ) | ||||||||
General and administrative | 1,278 | 1,085 | 193 | |||||||||
Cost of operations | 1,641 | 1,521 | 120 | |||||||||
Operating loss | $ | (1,338 | ) | (1,035 | ) | (303 | ) |
Non-GAAP Financial Measures
To supplement the financial results presented in accordance with GAAP, FRP presents certain non-GAAP financial measures within the meaning of Regulation G promulgated by the
Pro-rata Net Operating Income Reconciliation | |||||||||||||||||||||||
Three months ended | |||||||||||||||||||||||
Industrial and | Mining | Unallocated | FRP | ||||||||||||||||||||
Commercial | Development | Multifamily | Royalties | Corporate | Holdings | ||||||||||||||||||
Segment | Segment | Segment | Segment | Expenses | Totals | ||||||||||||||||||
Net income (loss) | $ | 430 | (1,186 | ) | (1,254 | ) | 1,862 | 1,483 | 1,335 | ||||||||||||||
Income tax allocation | 132 | (364 | ) | (396 | ) | 572 | 456 | 400 | |||||||||||||||
Income (loss) before income taxes | 562 | (1,550 | ) | (1,650 | ) | 2,434 | 1,939 | 1,735 | |||||||||||||||
Less: | |||||||||||||||||||||||
Unrealized rents | 16 | — | 9 | 113 | — | 138 | |||||||||||||||||
Interest income | — | 802 | — | — | 1,981 | 2,783 | |||||||||||||||||
Plus: | |||||||||||||||||||||||
Professional fees | — | — | 12 | — | — | 12 | |||||||||||||||||
Equity in loss of joint ventures | — | 1,014 | 1,993 | 12 | — | 3,019 | |||||||||||||||||
Interest expense | — | — | 869 | — | 42 | 911 | |||||||||||||||||
Depreciation/amortization | 363 | 42 | 1,981 | 149 | — | 2,535 | |||||||||||||||||
General and administrative | 250 | 1,278 | 236 | 278 | — | 2,042 | |||||||||||||||||
Net operating income (loss) | 1,159 | (18 | ) | 3,432 | 2,760 | — | 7,333 | ||||||||||||||||
NOI of noncontrolling interest | — | — | (1,562 | ) | — | — | (1,562 | ) | |||||||||||||||
Pro-rata NOI from unconsolidated joint ventures | — | 750 | 2,013 | — | — | 2,763 | |||||||||||||||||
Pro-rata net operating income | $ | 1,159 | 732 | 3,883 | 2,760 | — | 8,534 |
Pro-rata Net Operating Income Reconciliation | |||||||||||||||||||||||
Three months ended | |||||||||||||||||||||||
Industrial and | Mining | Unallocated | FRP | ||||||||||||||||||||
Commercial | Development | Multifamily | Royalties | Corporate | Holdings | ||||||||||||||||||
Segment | Segment | Segment | Segment | Expenses | Totals | ||||||||||||||||||
Net income (loss) | $ | 215 | (2,608 | ) | (255 | ) | 2,034 | 1,020 | 406 | ||||||||||||||
Income tax allocation | 80 | (967 | ) | (36 | ) | 754 | 378 | 209 | |||||||||||||||
Income (loss) before income taxes | 295 | (3,575 | ) | (291 | ) | 2,788 | 1,398 | 615 | |||||||||||||||
Less: | |||||||||||||||||||||||
Unrealized rents | 82 | — | — | 48 | — | 130 | |||||||||||||||||
Gain on sale of real estate | — | — | — | 10 | — | 10 | |||||||||||||||||
Interest income | — | 972 | — | — | 1,410 | 2,382 | |||||||||||||||||
Plus: | |||||||||||||||||||||||
Unrealized rents | — | — | 45 | — | — | 45 | |||||||||||||||||
Equity in loss of joint ventures | — | 3,512 | 101 | 12 | — | 3,625 | |||||||||||||||||
Interest Expense | — | — | 994 | — | 12 | 1,006 | |||||||||||||||||
Depreciation/amortization | 278 | 55 | 2,264 | 183 | — | 2,780 | |||||||||||||||||
General and administrative | 296 | 1,085 | 189 | 223 | — | 1,793 | |||||||||||||||||
Net operating income (loss) | 787 | 105 | 3,302 | 3,148 | — | 7,342 | |||||||||||||||||
NOI of noncontrolling interest | — | — | (1,502 | ) | — | — | (1,502 | ) | |||||||||||||||
Pro-rata NOI from unconsolidated joint ventures | — | 926 | 222 | — | — | 1,148 | |||||||||||||||||
Pro-rata net operating income | $ | 787 | 1,031 | 2,022 | 3,148 | — | 6,988 |
The following tables detail the Development and Multifamily Segment pro-rata NOI by project:
Development Segment: | |||||||||||||||||||||||||
FRP | Bryant | BC FRP | .408 | The | Total | ||||||||||||||||||||
Three months ended | Portfolio | Street | Jackson | Verge | Pro-rata NOI | ||||||||||||||||||||
$ | (18 | ) | — | 144 | — | 606 | 732 | ||||||||||||||||||
$ | 104 | 1,255 | 80 | (22 | ) | (386 | ) | 1,031 |
Multifamily Segment: | |||||||||||||||||||||||||
Dock | .408 | Bryant | Total | ||||||||||||||||||||||
Three months ended | 79 | The Maren | Jackson | Street | Pro-rata NOI | ||||||||||||||||||||
$ | 946 | 924 | 224 | 293 | 1,496 | 3,883 | |||||||||||||||||||
$ | 887 | 913 | 222 | — | — | 2,022 |
Source:
2024 GlobeNewswire, Inc., source