FRP Holdings, Inc. (NASDAQ: FRPH) Announces Results for the First Quarter Ended March 31, 2025
JACKSONVILLE, Fla., May 12, 2025 (GLOBE NEWSWIRE) -- FRP Holdings, Inc. (NASDAQ-FRPH) --
FRP Holdings is a real estate asset developer and manager across three differing asset classes including Multifamily, Industrial and Commercial, and Mining and Royalty Lands.
Net Income Results - Net income for the first quarter of 2025 was $1,710,000 or $.09 per share versus $1,301,000 or $.07 per share in the same period last year.
Executive Summary and Analysis -- In the first quarter, the Company saw a 31% improvement in Net Income as well as a 10% increase in pro rata NOI compared to the same period last year. These improvements were driven primarily by 1) increases in mining royalty revenue and unrealized revenue; 2) improved occupancy at the Verge which drove the $988,000 improvement in equity in loss of joint venture; as well as 3) a $226,000 increase in lending venture interest income compared to the same period last year. Last quarter we cautioned our investors to temper their expectations for growth this year, especially compared to the rapid NOI growth of the previous three years. Despite the positive results from this quarter, the rationale for those tempered expectations is evident in our first quarter results. Industrial NOI was down compared to last year because of a tenant default and eviction which will take time to replace. Early in the second quarter we finished construction on our Chelsea warehouse and transferred it to the Industrial and Commercial segment from Development. This 258,000 square-foot industrial asset in Harford County, MD will have operating expenses that will further negatively impact NOI until we get it leased and occupied. The multifamily segment growth we saw this quarter will be the last bump we get from occupancy increases in the run up to stabilization. Going forward, all our multifamily assets will have been stabilized for a full year, and we expect results to be more in line with the same store growth we had this quarter, i.e. flat to slightly negative, as we compete with a glut of new projects in Washington, DC. These are temporary headwinds that may be too heavy a lift for improvements in Mining Royalties and lending venture income to offset.
Our focus in 2025 is setting the stage for our next phase of NOI growth. Part of that means leasing efforts at Cranberry and Chelsea, but primarily it means putting money to work in new projects. We have closed on the construction loans for both of our industrial JVs with Altman Logistics (f/k/a BBX) and anticipate breaking ground in the second quarter. We will continue entitlement work on our industrial pipeline in Maryland in order to be shovel ready in 2026, and we anticipate bolstering that pipeline with an additional land purchase and/or JV this year. We remain on track to deliver three new industrial assets every two years with the goal of doubling the size of our industrial segment over the next five years. As mentioned last quarter, we anticipate beginning construction this year on two multifamily projects, the first in Greenville and the second outside Ft. Myers, FL. These two projects will add 810 units and an estimated $6 million in NOI upon stabilization.
First Quarter Highlights
-- 31% increase in Net Income ($1.7 million vs $1.3 million)
-- 10% increase in pro rata NOI ($9.4 million vs $8.5 million)
-- 3% increase in the Multifamily segment's pro rata NOI primarily due to
improved occupancy of The Verge. This comparison includes the results for
this project from the same period last year (when this project was still
in our Development segment)
-- 2% decrease in Industrial and Commercial segment NOI due to and eviction
and write-off of one tenant
-- 19% increase in the Mining Royalty Lands segment's NOI
Comparative Results of Operations for the three months ended March 31, 2025 and 2024
Consolidated Results
(dollars in thousands) Three Months Ended March 31,
2025 2024 Change %
------ ------- ------ ----------
Revenues:
Lease revenue $ 7,072 7,170 $ (98) -1.4%
Mining royalty and
rents 3,234 2,963 271 9.1%
------ ------ ---- ------
Total revenues 10,306 10,133 173 1.7%
Cost of operations:
Depreciation,
depletion and
amortization 2,607 2,535 72 2.8%
Operating expenses 1,859 1,867 (8) -.4%
Property taxes 938 807 131 16.2%
General and
administrative 2,577 2,042 535 26.2%
------ ------ ---- ------
Total cost of
operations 7,981 7,251 730 10.1%
Total operating profit 2,325 2,882 (557) -19.3%
Net investment income 2,561 2,783 (222) -8.0%
Interest expense (695) (911) 216 -23.7%
Equity in loss of joint
ventures (2,031) (3,019) 988 -32.7%
Income before income
taxes 2,160 1,735 425 24.5%
Provision for income
taxes 526 400 126 31.5%
------ ------ ---- ------
Net income 1,634 1,335 299 22.4%
Income (loss)
attributable to
noncontrolling
interest (76) 34 (110) -323.5%
------ ------ ---- ------
Net income attributable
to the Company $ 1,710 1,301 $ 409 31.4%
====== ====== ==== ======
Net income for the first quarter of 2025 was $1,710,000 or $.09 per share versus $1,301,000 or $.07 per share in the same period last year. Pro rata NOI for the first quarter of 2025 was $9,364,000 versus $8,534,000 in the same period last year. The first quarter of 2025 was impacted by the following items:
-- Operating profit decreased 19% from higher General and administrative
expense and the default of an Industrial tenant. This decrease was
partially offset by improved results in the Multifamily and Mining
segments, as well as a reduction in Development professional fees.
General and administrative expense increased primarily due to overlapping
compensation as a result of the implementation of our executive
succession and transition plan that commenced in May, 2024.
-- Net investment income decreased $222,000 due to reduced earnings on cash
equivalents ($447,000) partially offset by higher income from our lending
ventures ($226,000) due to more residential lot sales.
-- Interest expense decreased $216,000 compared to the same quarter last
year as we capitalized $211,000 more interest this quarter. More interest
was capitalized due to increased in-house and joint venture projects
under development this quarter compared to last year.
-- Equity in loss of Joint Ventures improved $988,000 due to improved
results of our unconsolidated joint ventures. Results improved at The
Verge ($409,000) due to improved occupancy and at Bryant Street
($444,000) and BC Realty ($107,000) both due to higher revenues and lower
variable rate interest expense.
Multifamily Segment (Pro rata consolidated and pro rata unconsolidated)
For ease of comparison all the figures in the tables below include the results for The Verge from the same period last year (when this project was still in our Development segment).
Three months ended March 31
(dollars in thousands) 2025 % 2024 % Change %
----- --------- ----- --------- ------ --------
Lease revenue $8,305 100.0% 7,883 100.0% 422 5.4%
Depreciation and
amortization 3,287 39.6% 3,305 41.9% (18) -.5%
Operating expenses 2,625 31.6% 2,519 32.0% 106 4.2%
Property taxes 970 11.7% 889 11.3% 81 9.1%
----- ----- ----- ----- ----- ----
Cost of operations 6,882 82.9% 6,713 85.2% 169 2.5%
----- ----- ----- ----- ----- ----
Operating profit before
G&A $1,423 17.1% 1,170 14.8% 253 21.6%
===== ===== ===== ===== ===== ====
Depreciation and
amortization 3,287 3,305 (18)
Unrealized rents &
other (80) 14 (94)
----- --------- ----- --------- ----- --------
Net operating income $4,630 55.7% 4,489 56.9% 141 3.1%
===== ===== ===== ===== ===== ====
The combined consolidated and unconsolidated pro rata net operating income this quarter for this segment was $4,630,000, up $141,000 or 3% compared to $4,489,000 in the same quarter last year. Most of this increase was from the improved occupancy of The Verge. This project contributed $753,000 of pro rata NOI to this segment compared to $606,000 in the Development segment in the same quarter last year, an increase of $147,000. Same store NOI decreased $6,000.
Renewal
Pro rata Pro rata Avg. Avg. Success Renewal
Apartment NOI Q1 NOI Q1 Occupancy Occupancy Rate % increase
Building Units 2025 2024 Q1 2025 Q1 2024 Q1 2025 Q1 2025
Dock 79
Anacostia
DC 305 $905,000 $946,000 95.6% 94.8% 65.1% 3.1%
Maren
Anacostia
DC 264 $855,000 $924,000 93.9% 93.8% 52.5% 7.2%
Riverside
Greenville 200 $222,000 $224,000 92.9% 93.7% 47.2% 1.9%
Bryant
Street DC 487 $1,539,000 $1,496,000 92.5% 92.8% 47.1% 2.0%
.408 Jackson
Greenville 227 $356,000 $293,000 97.2% 93.0% 72.7% 4.6%
Verge
Anacostia
DC 344 $753,000 $606,000 93.5% 87.7% 75.0% 3.4%
------------ ----- ---------- ---------- ----- --- ----- ---
Multifamily
Segment 1,827 $4,630,000 $4,489,000 94.0% 92.4%
Multifamily Segment (Consolidated - Dock 79 & The Maren)
Three months ended March 31
-----------------------------------
(dollars in thousands) 2025 % 2024 % Change %
----- --------- ----- --------- ------ ---------
Lease revenue $5,424 100.0% 5,414 100.0% 10 .2%
Depreciation and
amortization 1,995 36.8% 1,981 36.6% 14 .7%
Operating expenses 1,585 29.2% 1,461 27.0% 124 8.5%
Property taxes 635 11.7% 524 9.7% 111 21.2%
----- ----- ----- ----- ----- -----
Cost of operations 4,215 77.7% 3,966 73.3% 249 6.3%
----- ----- ----- ----- ----- -----
Operating profit before
G&A $1,209 22.3% 1,448 26.7% (239) -16.5%
===== ===== ===== ===== ===== =====
Total revenues for our two consolidated joint ventures were $5,424,000, an increase of $10,000 versus $5,414,000 in the same period last year. Total operating profit before G&A for the consolidated joint ventures was $1,209,000, a decrease of $239,000, or 17% versus $1,448,000 in the same period last year primarily due to higher operating expenses and property taxes. Operating expenses increased due to higher utilities from the colder weather (plus a $30,000 water leak from a frozen pipe) and higher repairs and maintenance.
Multifamily Segment (Pro rata unconsolidated)
Our Multifamily Segment has four unconsolidated joint ventures (Bryant Street, The Verge, Riverside, and .408 Jackson). Riverside was moved from the Development segment to the Multifamily segment in 2022, Bryant Street and .408 Jackson moved as of the beginning of 2024 and The Verge moved effective July 1, 2024, each upon reaching lease up stabilization.
Three months ended March 31
(dollars in thousands) 2025 % 2024 % Change %
------ --------- ----- --------- ------ --------
Lease revenue $5,349 100.0% 4,933 100.0% 416 8.4%
Depreciation and
amortization 2,193 41.0% 2,219 45.0% (26) -1.2%
Operating expenses 1,780 33.3% 1,728 35.0% 52 3.0%
Property taxes 625 11.7% 605 12.3% 20 3.3%
----- ----- ----- ----- ----- ----
Cost of operations 4,598 86.0% 4,552 92.3% 46 1.0%
----- ----- ----- ----- ----- ----
Operating profit before
G&A $ 751 14.0% 381 7.7% 370 97.1%
===== ===== ===== ===== ===== ====
For our four unconsolidated joint ventures, pro rata revenues were $5,349,000, an increase of $416,000 or 8% compared to $4,933,000 in the same period last year. Pro rata operating profit before G&A was $751,000, an increase of $370,000 or 97% versus $381,000 in the same period last year. The increase was due to improved occupancy at The Verge and higher revenues at Bryant Street and .408 Jackson.
Industrial and Commercial Segment
Three months ended March 31
-------------------------------------
(dollars in thousands) 2025 % 2024 % Change %
------ --------- ------- --------- ------ ---------
Lease revenue $1,347 100.0% 1,453 100.0% (106) (7.3%)
Depreciation and
amortization 391 29.1% 363 25.0% 28 7.7%
Operating expenses 233 17.3% 215 14.8% 18 8.4%
Property taxes 80 5.9% 63 4.3% 17 27.0%
----- ----- ----- ----- ---- -----
Cost of operations 704 52.3% 641 44.1% 63 9.8%
----- ----- ----- ----- ---- -----
Operating profit before
G&A $ 643 47.7% 812 55.9% (169) (20.8%)
===== ===== ===== ===== ==== =====
Depreciation and
amortization 391 363 28
Unrealized revenues 105 (16) 121
----- --------- ----- --------- ---- ---------
Net operating income $1,139 84.6% $1,159 79.8% $ (20) (1.7%)
===== ===== ===== ===== ==== =====
We have nine buildings in service at three different locations totaling 515,077 square feet of industrial and 33,708 square feet of office. These assets were 85.2% leased and occupied during the quarter compared to 95.6% leased and occupied during the same quarter last year due to an eviction for failure to pay rent by one tenant. Total revenues in this segment were $1,347,000, down $106,000 or 7%, over the same period last year due to the tenant default and eviction. Operating profit before G&A was $643,000, down $169,000 or 21% over the same quarter last year due to the lower occupancy and a $118,000 write-off of unrealized rent receivable and $34,000 write-off of leasing deferred commissions from the evicted tenant. Net operating income in this segment was $1,139,000, down $20,000 or 2% compared to the same quarter last year.
Mining Royalty Lands Segment Results
Three months ended March 31
-------------------------------------
(dollars in thousands) 2025 % 2024 % Change %
------ --------- ------- --------- -------- --------
Mining royalty and rent
revenue $3,234 100.0% 2,963 100.0% 271 9.1%
Depreciation, depletion
and amortization 178 5.5% 149 5.0% 29 19.5%
Operating expenses 16 0.5% 17 0.6% (1) -5.9
Property taxes 75 2.3% 73 2.5% 2 2.7%
----- ----- ----- ----- --- ----
Cost of operations 269 8.3% 239 8.1% 30 12.6%
----- ----- ----- ----- --- ----
Operating profit before
G&A $2,965 91.7% 2,724 91.9% 241 8.8%
===== ===== ===== ===== === ====
Depreciation and
amortization 178 149 29
Unrealized revenues 141 (113) 254
----- --------- ----- --------- --- --------
Net operating income $3,284 101.5% $2,760 93.1% $ 524 19.0%
===== ===== ===== ===== === ====
Total revenues in this segment were $3,234,000, an increase of $271,000 or 9% versus $2,963,000 in the same period last year. Royalty revenues in the prior year were impacted by the deduction of $289,000 of royalties to resolve an overpayment which we referenced previously. Royalty tons were down 10% primarily due to a decrease at one location that experienced a project specific spike in demand in the prior year. Royalty revenue per ton increased 7% over the same period last year excluding the prior year overpayment deduction. Total operating profit before G&A in this segment was $2,965,000, an increase of $241,000 versus $2,724,000 in the same period last year. Net operating income was $3,284,000, up $524,000 or 19% compared to the same quarter last year due to the higher revenues and a $254,000 decrease in unrealized revenues. The unrealized revenue decrease is due to the temporarily higher minimum royalty payments we are currently receiving at one location which are straight-lined across the life of the lease for GAAP revenue purposes.
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