FRP Holdings, Inc. (NASDAQ: FRPH) Announces Results for the Third Quarter and Nine Months Ended September 30, 2024

Rhea-AI Summary

FRP Holdings reported Q3 2024 results with net income of $1.4 million, up 8% from Q3 2023. The company saw a 39% increase in pro rata NOI to $11.3 million, including a one-time royalty payment of $1.9 million. The Multifamily segment's pro rata NOI increased 23% due to lease-up of Bryant St., 408 Jackson, and The Verge properties. The Mining and Royalties segment saw an 80% increase in NOI. Shell construction is nearly complete for the Chelsea Project in Harford County, MD, with two industrial JV projects in Florida planned for March 2025 construction start.

Positive

• Net income increased 8% to $1.4 million in Q3 2024
• Pro rata NOI grew 39% to $11.3 million
• Multifamily segment NOI increased 23%
• Mining and Royalties segment NOI up 80%
• Interest expense decreased 33.5% to $742,000

Negative

• Lease revenue declined 1% to $7.4 million
• Net investment income decreased 14.7% to $2.3 million
• General and administrative expenses increased 17.5%
• Equity losses of $2.8 million from joint ventures

Insights

Financial Analyst

The Q3 2024 results show positive momentum with notable improvements across key metrics. Net income increased 8% to $1.4 million, while pro rata NOI saw a substantial 39% jump to $11.3 million. The growth was driven by strong performance across all segments, particularly in Mining and Royalties which benefited from a one-time $1.9 million minimum royalty payment.

The multifamily segment demonstrated robust growth with a 23% increase in pro rata NOI, primarily due to successful lease-up of Bryant St., 408 Jackson and The Verge properties. The industrial portfolio maintains high occupancy at 95.6%, while development projects are progressing with three new industrial developments totaling 640,000 square feet underway.

The company's financial position remains solid with reduced interest expenses and improved joint venture performance. The projected 6-7% unlevered yield on new industrial developments suggests potential for continued NOI growth.

Real Estate Investment Analyst

The portfolio diversification across multifamily, industrial and mining royalties is proving effective. The multifamily segment shows strong fundamentals with high occupancy rates averaging 92.8% across 1,483 units. Renewal rates and modest rent increases (2-6%) indicate sustainable growth without aggressive pricing that could impact occupancy.

The industrial development pipeline is particularly noteworthy, with $116 million in total capex planned for three strategic projects. The Chelsea Project coming in under budget and two new Florida industrial JVs demonstrate disciplined capital deployment in high-demand markets. The mining royalty segment provides stable cash flow with potential upside from minimum royalty provisions.

JACKSONVILLE, Fla., Nov. 06, 2024 (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.

Third Quarter Highlights

• 8% increase in Net Income ($1.4 million vs $1.3 million)

• 39% increase in pro rata NOI ($11.3 million vs $8.1 million)

• Pro rata NOI includes a one-time, catch-up, minimum royalty payment of $1.9 million that applies to the prior twenty-four months as the tenant failed to meet a production requirement contained in the lease. This revenue was straight-lined over the life of the lease.

• 23% increase in the Multifamily segment’s pro rata NOI primarily due to lease up of Bryant St., 408 Jackson, and The Verge. This comparison includes the results for these three projects from the same period last year (when these projects were still in our Development segment).

• 10% increase in Industrial and Commercial segment NOI
  

Executive Summary and Analysis – In the third quarter, the Company saw a 39% improvement in pro rata NOI compared to the same period last year, and a 28% increase in pro rata NOI in the first nine months compared to the same period last year. This is consistent with the 26.4% CAGR at which we have grown pro rata NOI over the last three years on a trailing twelve month basis. The growth in pro rata NOI for the third quarter was driven by increases across all segments but particularly in the Mining and Royalties segment (80% increase). The substantial increase in Mining Royalty NOI was due to a $2 million increase in unrealized revenue. This was mostly the result of a one-time, minimum royalty payment at one location which is straight-lined across the life of the lease for GAAP revenue purposes.

Shell construction is nearly complete for our Chelsea Project in Harford County, MD, which we expect to come in under budget. We are working to get shovel ready the sites of our two industrial JV’s in Florida with an anticipated construction start for both in March of 2025. These three projects represent 640,000 square feet of new, Class A, industrial product requiring $116 million in total capex and are in keeping with our stated strategy of focusing on industrial development. We have underwritten all these projects at an unlevered 6-7% yield.

Comparative Results of Operations for the Three months ended September 30, 2024 and 2023

Consolidated Results

(dollars in thousands)		Three Months EndedSeptember 30,
		2024				2023			Change				%
Revenues:
Lease revenue		$	7,434			7,509			$	(75	)		-1.0	%
Mining royalty and rents			3,199			3,082				117			3.8	%
Total revenues			10,633			10,591				42			.4	%
Cost of operations:
Depreciation, depletion and amortization			2,551			2,816				(265	)		-9.4	%
Operating expenses			1,860			2,012				(152	)		-7.6	%
Property taxes			850			919				(69	)		-7.5	%
General and administrative			2,289			1,948				341			17.5	%
Total cost of operations			7,550			7,695				(145	)		-1.9	%
Total operating profit			3,083			2,896				187			6.5	%
Net investment income			2,304			2,700				(396	)		-14.7	%
Interest expense			(742	)		(1,116	)			374			-33.5	%
Equity in loss of joint ventures			(2,839	)		(2,913	)			74			-2.5	%
(Loss) gain on sale of real estate			—			(1	)			1			-100.0	%
Income before income taxes			1,806			1,566				240			15.3	%
Provision for income taxes			427			467				(40	)		-8.6	%
Net income			1,379			1,099				280			25.5	%
Income (loss) attributable to noncontrolling interest			18			(160	)			178			-111.3	%
Net income attributable to the Company		$	1,361			1,259			$	102			8.1	%

Net income for the third quarter of 2024 was $1,361,000 or $.07 per share versus $1,259,000 or $.07 per share in the same period last year. Pro rata NOI for the third quarter of 2024 was $11,272,000 versus $8,085,000 in the same period last year including the one-time, $1.9 million royalty payment referenced in the third quarter highlights. The third quarter of 2024 was impacted by the following items:

• Operating profit increased 6% as favorable results in Multifamily, Industrial and Commercial, and Mining were partially offset by higher net Development segment and General and administrative costs.

• Net investment income decreased $396,000 due to reduced income from our lending ventures ($75,000) and decreased preferred interest ($613,000) due to the conversion of FRP preferred equity to common equity at Bryant Street partially offset by increased earnings on cash equivalents ($292,000).

• Interest expense decreased $374,000 compared to the same quarter last year as we capitalized $408,000 more interest this quarter, partially offset by higher costs related to the increase in our line of credit with Wells Fargo. 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 $74,000 due to improved results of our unconsolidated joint ventures. Results improved at The Verge ($372,000) due to lease up but were lower at .408 Jackson ($104,000) due to an increased real estate tax assessment and BC Realty ($196,000) due to a $302,000 write off of design costs for offices on phase II as we made the decision to repurpose the plan to a higher and better use.
  

Multifamily Segment (Consolidated)

Our Multifamily Segment has two consolidated joint ventures (Dock 79 and The Maren).

		Three months ended September 30
(dollars in thousands)		2024				%			2023			%			Change			%
Lease revenue		$	5,682			100.0	%		5,633			100.0	%		49			.9	%
Depreciation and amortization			1,985			35.0	%		2,265			40.1	%		(280	)		-12.4	%
Operating expenses			1,573			27.7	%		1,773			31.5	%		(200	)		-11.3	%
Property taxes			565			9.9	%		555			9.9	%		10			1.8	%
Cost of operations			4,123			72.6	%		4,593			81.5	%		(470	)		-10.2	%
Operating profit before G&A		$	1,559			27.4	%		1,040			18.5	%		519			49.9	%

Total revenues for our two consolidated joint ventures were $5,682,000, an increase of $49,000 versus $5,633,000 in the same period last year. Total operating profit before G&A for the consolidated joint ventures was $1,559,000, an increase of $519,000, or 50% versus $1,040,000 in the same period last year primarily due to lower depreciation and operating expenses. Depreciation decreased as some of the assets became fully depreciated. Operating expenses decreased due to lower maintenance, utilities, insurance and marketing costs.

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 September 30
(dollars in thousands)		2024				%			2023			%			Change			%
Lease revenue		$	5,119			100.0	%		4,103			100.0	%		1,016			24.8	%
Depreciation and amortization			2,228			43.5	%		1,813			44.2	%		415			22.9	%
Operating expenses			1,895			37.0	%		1,652			40.3	%		243			14.7	%
Property taxes			467			9.1	%		487			11.9	%		(20	)		-4.1	%
Cost of operations			4,590			89.7	%		3,952			96.3	%		638			16.1	%
Operating profit before G&A		$	529			10.3	%		151			3.7	%		378			250.3	%

For our four unconsolidated joint ventures, pro rata revenues were $5,119,000, an increase of $1,016,000 or 25% compared to $4,103,000 in the same period last year. Pro rata operating profit before G&A was $529,000, an increase of $378,000 or 250% versus $151,000 in the same period last year.

Multifamily Segment (Pro rata consolidated and pro rata unconsolidated)

For ease of comparison all the figures in the tables below include the results for Bryant Street, .408 Jackson, and The Verge from the same period last year (when these projects were still in our Development segment).

		Three months ended September 30
(dollars in thousands)		2024				%			2023			%			Change			%
Lease revenue		$	8,215			100.0	%		7,171			100.0	%		1,044			14.6	%
Depreciation and amortization			3,316			40.4	%		3,049			42.5	%		267			8.8	%
Operating expenses			2,749			33.5	%		2,622			36.6	%		127			4.8	%
Property taxes			774			9.4	%		788			11.0	%		(14	)		-1.8	%
Cost of operations			6,839			83.3	%		6,459			90.1	%		380			5.9	%
Operating profit before G&A		$	1,376			16.7	%		712			9.9	%		664			93.3	%
Depreciation and amortization			3,316						3,049						267
Unnrealized rents & other			30						64						(34	)
Net operating income		$	4,722			57.5	%		3,825			53.3	%		897			23.5	%

The combined consolidated and unconsolidated pro rata net operating income this quarter for this segment was $4,722,000, up $897,000 or 23% compared to $3,825,000 in the same quarter last year. Most of this increase was from the lease up of Bryant Street, .408 Jackson, and The Verge. These three projects contributed $2,542,000 of pro rata NOI to this segment compared to $1,787,000 in the Development segment in the same quarter last year, an increase of $755,000. Same store NOI increased $142,000 or 7%,

Apartment Building	Units		Pro rata NOI Q3 2024		Pro rata NOI Q3 2023		Avg. Occupancy Q3 2024	Avg. Occupancy CY 2023	Renewal Success Rate Q3 2024	Renewal % increase Q3 2024
Dock 79 Anacostia DC	305		$964,000		$952,000		94.0%	94.4%	71.4%	2.9%
Maren Anacostia DC	264		$973,000		$855,000		94.9%	95.6%	50.7%	2.3%
Riverside Greenville	200		$243,000		$231,000		94.0%	94.5%	56.0%	2.7%
Bryant Street DC	487		$1,537,000		$1,210,000		91.5%	92.9%	56.7%	2.0%
.408 Jackson Greenville	227		$362,000		$284,000		94.5%	59.9%	52.9%	6.1%
Verge Anacostia DC	344		$643,000		$293,000		90.1%	47.3%	63.6%	3.9%
Multifamily Segment	1,483		$4,722,000		$3,825,000		92.8%	81.0%

Industrial and Commercial Segment

		Three months ended September 30
(dollars in thousands)		2024				%			2023				%			Change				%
Lease revenue		$	1,455			100.0	%			1,442			100.0	%			13			0.9	%
Depreciation and amortization			360			24.7	%			369			25.6	%			(9	)		(2.4	%)
Operating expenses			185			12.7	%			173			12.0	%			12			6.9	%
Property taxes			68			4.7	%			62			4.3	%			6			9.7	%
Cost of operations			613			42.1	%			604			41.9	%			9			1.5	%
Operating profit before G&A		$	842			57.9	%			838			58.1	%			4			0.5	%
Depreciation and amortization			360							369							(9	)
Unrealized revenues			7							(111	)						118
Net operating income		$	1,209			83.1	%		$	1,096			76.0	%		$	113			10.3	%

Total revenues in this segment were $1,455,000, up $13,000 or 1%, over the same period last year. Operating profit before G&A was $842,000, up $4,000 or 0.5% over the same quarter last year. We now 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 95.6% leased and occupied during the entire quarter. Net operating income in this segment was $1,209,000, up $113,000 or 10% compared to the same quarter last year primarily due to more unrealized rental revenue in the prior year due to rent abatements that expired in 2023.

Mining Royalty Lands Segment Results

		Three months ended September 30
(dollars in thousands)		2024				%			2023				%			Change				%
Mining royalty and rent revenue		$	3,199			100.0	%			3,082			100.0	%			117			3.8	%
Depreciation, depletion and amortization			163			5.1	%			138			4.4	%			25			18.1	%
Operating expenses			20			0.6	%			18			0.6	%			2			11.1
Property taxes			70			2.2	%			181			5.9	%			(111	)		-61.3	%
Cost of operations			253			7.9	%			337			10.9	%			(84	)		-24.9	%
Operating profit before G&A		$	2,946			92.1	%			2,745			89.1	%			201			7.3	%
Depreciation and amortization			163							138							25
Unrealized revenues			1,994							(46	)						2,040
Net operating income		$	5,103			159.5	%		$	2,837			92.1	%		$	2,266			79.9	%

Total revenues in this segment were $3,199,000, an increase of $117,000 or 3.8% versus $3,082,000 in the same period last year. Royalty tons were down 3%. Total operating profit before G&A in this segment was $2,946,000, an increase of $201,000 versus $2,745,000 in the same period last year due to higher revenues and lower property taxes. Net Operating Income this quarter for this segment was $5,103,000, up $2,266,000 or 80% compared to the same quarter last year mostly due to a $2,040,000 increase in unrealized revenues. This was mostly the result of a one-time, minimum royalty payment at one location which is straight-lined across the life of the lease for GAAP revenue purposes.

Development Segment Results

		Three months ended September 30
(dollars in thousands)		2024				2023			Change
Lease revenue		$	297			434			(137	)
Depreciation, depletion and amortization			43			44			(1	)
Operating expenses			82			48			34
Property taxes			147			121			26
Cost of operations			272			213			59
Operating profit before G&A		$	25			221			(196	)

With respect to ongoing Development Segment projects:

• We entered into two new joint venture agreements in early 2024 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 182,000 square-foot warehouse redevelopment project in Broward County, FL. We anticipate construction to start on both projects in the first quarter of 2025.

• Last summer we broke ground on a new speculative warehouse project in Aberdeen, MD on Chelsea Road. Vertical construction is underway. This Class A, 258,000 square foot building is due to be complete in the 4th quarter of 2024.

• We are the principal capital source to develop 344 residential lots on 110 acres in Harford County, MD. We have funded $25.5 million of our $31.1 million total commitment. A national homebuilder is under contract to purchase all 222 townhome lots and 122 single family lots. At quarter-end, 79 lots have been sold and $12.9 million of preferred interest and principal has been returned to the company of which $3.6 million was booked as profit to the Company.
  

Nine Month Highlights

• 94% increase in Net Income ($4.7 million vs $2.4 million)

• 28% increase in pro rata NOI ($29.0 million vs $22.7 million), including the one-time, $1.9 million minimum royalty payment referenced previously

• 39% increase in the Multifamily segment’s pro rata NOI primarily due to lease up of Bryant St., 408 Jackson, and The Verge. This comparison includes the results for these three projects from the same period last year (when these projects were still in our Development segment).

• 11% increase in Industrial and Commercial revenue and 30% increase in that segment’s NOI

Comparative Results of Operations for the Nine months ended September 30, 2024 and 2023

Consolidated Results

(dollars in thousands)		Nine Months EndedSeptember 30,
		2024				2023				Change				%
Revenues:
Lease revenue		$	21,850				21,773			$	77			.4	%
Mining royalty and rents			9,393				9,628				(235	)		-2.4	%
Total revenues			31,243				31,401				(158	)		-.5	%
Cost of operations:
Depreciation/depletion/amortization			7,629				8,415				(786	)		-9.3	%
Operating expenses			5,429				5,574				(145	)		-2.6	%
Property taxes			2,517				2,745				(228	)		-8.3	%
General and administrative			6,883				6,150				733			11.9	%
Total cost of operations			22,458				22,884				(426	)		-1.9	%
Total operating profit			8,785				8,517				268			3.1	%
Net investment income			8,795				8,207				588			7.2	%
Interest expense			(2,482	)			(3,251	)			769			-23.7	%
Equity in loss of joint ventures			(8,582	)			(10,585	)			2,003			-18.9	%
Gain on sale of real estate			—				7				(7	)		-100.0	%
Income before income taxes			6,516				2,895				3,621			125.1	%
Provision for income taxes			1,743				898				845			94.1	%
Net income			4,773				1,997				2,776			139.0	%
Income (loss) attributable to noncontrolling interest			67				(425	)			492			-115.8	%
Net income attributable to the Company		$	4,706			$	2,422			$	2,284			94.3	%

Net income for the first nine months of 2024 was $4,706,000 or $.25 per share versus $2,422,000 or $.13 per share in the same period last year. Pro rata NOI for the first nine months of 2024 was $29,036,000 versus $22,687,000 in the same period last year. The first nine months of 2024 were impacted by the following items:

• Operating profit increased 3.1% as favorable results in Multifamily and Industrial and Commercial were mostly offset by lower Mining profits and higher net Development and General and administrative costs.

• Pro rata NOI includes a one-time, catch-up, minimum royalty payment of $1,853,000 that applies to the prior twenty-four months as the tenant failed to meet a production requirement contained in the lease. This revenue was straight-lined over the life of the lease.

• Net investment income increased $588,000 due to increased earnings on cash equivalents ($1,252,000) and increased income from our lending ventures ($1,155,000), partially offset by decreased preferred interest ($1,819,000) due to the conversion of FRP preferred equity to common equity at Bryant Street.

• Interest expense decreased $769,000 compared to the same period last year as we capitalized $869,000 more interest, partially offset by increased costs related to the increase in our line of credit with Wells Fargo. 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 $2,003,000 due to improved results at our unconsolidated joint ventures. Results improved at The Verge ($1,959,000) and .408 Jackson ($169,000).
  

Multifamily Segment (Consolidated)

		Nine Months Ended September 30,
(dollars in thousands)		2024				%			2023			%			Change			%
Lease revenue		$	16,592			100.0	%		16,454			100.0	%		138			.8	%
Depreciation and amortization			5,947			35.9	%		6,797			41.3	%		(850	)		-12.5	%
Operating expenses			4,553			27.4	%		4,818			29.3	%		(265	)		-5.5	%
Property taxes			1,665			10.0	%		1,649			10.0	%		16			1.0	%
Cost of operations			12,165			73.3	%		13,264			80.6	%		(1,099	)		-8.3	%
Operating profit before G&A		$	4,427			26.7	%		3,190			19.4	%		1,237			38.8	%

Total revenues for our two consolidated joint ventures were $16,592,000, an increase of $138,000 versus $16,454,000 in the same period last year. Total operating profit before G&A for the consolidated joint ventures was $4,427,000, an increase of $1,237,000, or 39% versus $3,190,000 in the same period last year primarily due to lower depreciation and operating expense. Depreciation decreased as some of the assets became fully depreciated. Operating expenses decreased due to lower maintenance, utilities, insurance and marketing costs.

Multifamily Segment (Pro rata unconsolidated)

		Nine Months Ended September 30,
(dollars in thousands)		2024				%			2023			%			Change			%
Lease revenue		$	15,173			100.0	%		10,377			100.0	%		4,796			46.2	%
Depreciation and amortization			6,747			44.5	%		5,854			56.4	%		893			15.3	%
Operating expenses			5,358			35.3	%		4,667			45.0	%		691			14.8	%
Property taxes			1,665			11.0	%		1,292			12.5	%		373			28.9	%
Cost of operations			13,770			90.8	%		11,813			113.8	%		1,957			16.6	%
Operating profit		$	1,403			9.2	%		(1,436	)		(13.8	%)		2,839

For our four unconsolidated joint ventures, pro rata revenues were $15,173,000, an increase of $4,796,000 or 46% compared to $10,377,000 in the same period last year. Pro rata operating profit before G&A was $1,403,000, an increase of $2,839,000 versus a loss of $1,436,000 in the same period last year.

Multifamily Segment (Pro rata consolidated and pro rata unconsolidated)

For ease of comparison all the figures in the tables below include the results for Bryant Street, .408 Jackson, and The Verge from prior periods (when these projects were still in our Development segment).

		Nine Months Ended September 30,
(dollars in thousands)		2024				%			2023			%			Change			%
Lease revenue		$	24,214			100.0	%		19,343			100.0	%		4,871			25.2	%
Depreciation and amortization			10,006			41.3	%		9,565			49.4	%		441			4.6	%
Operating expenses			7,844			32.4	%		7,324			37.9	%		520			7.1	%
Property taxes			2,570			10.6	%		2,188			11.3	%		382			17.5	%
Cost of operations			20,420			84.3	%		19,077			98.6	%		1,343			7.0	%
Operating profit before G&A		$	3,794			15.7	%		266			1.4	%		3,528			1326.3	%
Depreciation and amortization			10,006						9,565						441
Unnrealized rents & other			91						184						(93	)
Net operating income		$	13,891			57.4	%		10,015			51.8	%		3,876			38.7	%

The combined consolidated and unconsolidated pro rata net operating income this quarter for this segment was $13,891,000, up $3,876,000 or 39% compared to $10,015,000 in the same period last year. Most of this increase was from the lease up of Bryant Street, .408 Jackson, and The Verge. These three projects contributed $7,547,000 of pro rata NOI to this segment compared to $3,803,000 in the Development segment in the same period last year, an increase of $3,744,000. Same store NOI increased $132,000 or 2%.

Apartment Building	Units		Pro rata NOI YTD 2024		Pro rata NOI YTD 2023	Avg. Occupancy YTD 2024	Avg. Occupancy CY 2023	Renewal Success Rate YTD 2024	Renewal % increase YTD 2024
Dock 79 Anacostia DC	305		$2,842,000		$2,825,000	94.1%	94.4%	68.3%	3.2%
Maren Anacostia DC	264		$2,820,000		$2,711,000	94.5%	95.6%	56.8%	2.2%
Riverside Greenville	200		$682,000		$676,000	93.6%	94.5%	57.5%	3.1%
Bryant Street DC	487		$4,588,000		$3,595,000	91.9%	92.9%	57.5%	2.8%
.408 Jackson Greenville	227		$1,000,000		$350,000	94.6%	59.9%	53.3%	5.0%
Verge Anacostia DC	344		$1,959,000		-$142,000	89.7%	47.3%	67.4 %	1.8%
Multifamily Segment	1,483		$13,891,000		$10,015,000	92.7%

Industrial and Commercial Segment

		Nine Months Ended September 30,
(dollars in thousands)		2024				%			2023				%			Change				%
Lease revenue		$	4,353			100.0	%			3,932			100.0	%			421			10.7	%
Depreciation and amortization			1,083			24.8	%			1,006			25.6	%			77			7.7	%
Operating expenses			591			13.6	%			490			12.5	%			101			20.6	%
Property taxes			195			4.5	%			185			4.7	%			10			5.4	%
Cost of operations			1,869			42.9	%			1,681			42.8	%			188			11.2	%
Operating profit before G&A		$	2,484			57.1	%			2,251			57.2	%			233			10.4	%
Depreciation and amortization			1,083							1,006							77
Unrealized revenues			(12	)						(531	)						519
Net operating income		$	3,555			81.7	%		$	2,726			69.3	%		$	829			30.4	%

Total revenues in this segment were $4,353,000, up $421,000 or 11%, over the same period last year. Operating profit before G&A was $2,484,000, up $233,000 or 10% from $2,251,000 in the same quarter last year. Revenues and operating profit are up because of full occupancy at 1841 62nd Street (which had only $11,000 of revenue in the first quarter last year) and the addition of 1941 62nd Street to this segment in March 2023. We were 95.6% leased and occupied during the entire period. Net operating income in this segment was $3,555,000, up $829,000 or 30% compared to the same period last year partially due to $519,000 more unrealized rental revenue in the prior year due to rent abatements that expired in 2023.

Mining Royalty Lands Segment Results

		Nine Months Ended September 30,
(dollars in thousands)		2024				%			2023				%			Change				%
Mining royalty and rent revenue		$	9,393			100.0	%			9,628			100.0	%			(235	)		-2.4	%
Depreciation, depletion and amortization			471			5.0	%			472			4.9	%			(1	)		-0.2	%
Operating expenses			53			0.6	%			51			0.5	%			2			3.9
Property taxes			214			2.3	%			324			3.4	%			(110	)		-34.0	%
Cost of operations			738			7.9	%			847			8.8	%			(109	)		-12.9	%
Operating profit before G&A		$	8,655			92.1	%			8,781			91.2	%			(126	)		-1.4	%
Depreciation and amortization			471							472							(1	)
Unrealized revenues			1,765							(143	)						1,908
Net operating income		$	10,891			115.9	%		$	9,110			94.6	%		$	1,781			19.5	%

Total revenues in this segment were $9,393,000, a decrease of $235,000 or 2% versus $9,628,000 in the same period last year. Royalty revenues were impacted by the deduction of royalties to resolve an $842,000 overpayment which we referenced previously. Through the first three quarters of this year, the tenant has withheld $619,000 in royalties otherwise due to the Company with the remainder ($223,000) withheld in the fourth quarter of 2023. There are no further amounts to be withheld moving forward. Royalty tons were down 8%. Total operating profit before G&A in this segment was $8,655,000, a decrease of $126,000 versus $8,781,000 in the same period last year. Net operating income in this segment was $10,891,000, up $1,781,000 or 20% compared to the same period last year mostly due to a $1,908,000 increase in unrealized revenues (see discussion in the Mining segment's quarterly analysis).

Development Segment Results

		Nine Months Ended September 30,
(dollars in thousands)		2024				2023			Change
Lease revenue		$	905			1,387			(482	)
Depreciation, depletion and amortization			128			140			(12	)
Operating expenses			232			215			17
Property taxes			443			587			(144	)
Cost of operations			803			942			(139	)
Operating profit before G&A		$	102			445			(343	)

FRP HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited) (In thousands, except share data)
Assets:		September 30 2024				December 31 2023
Real estate investments at cost:
Land		$	168,958			141,602
Buildings and improvements			283,104			282,631
Projects under construction			29,414			10,845
Total investments in properties			481,476			435,078
Less accumulated depreciation and depletion			75,183			67,758
Net investments in properties			406,293			367,320
Real estate held for investment, at cost			11,290			10,662
Investments in joint ventures			157,272			166,066
Net real estate investments			574,855			544,048
Cash and cash equivalents			144,681			157,555
Cash held in escrow			981			860
Accounts receivable, net			1,826			1,046
Federal and state income taxes receivable			—			337
Unrealized rents			1,395			1,640
Deferred costs			2,569			3,091
Other assets			611			589
Total assets		$	726,918			709,166
Liabilities:
Secured notes payable		$	178,816			178,705
Accounts payable and accrued liabilities			6,060			8,333
Other liabilities			1,487			1,487
Federal and state income taxes payable			452			—
Deferred revenue			2,392			925
Deferred income taxes			68,356			69,456
Deferred compensation			1,451			1,409
Tenant security deposits			801			875
Total liabilities			259,815			261,190
Commitments and contingencies			—			—
Equity:
Common stock, $.10 par value 25,000,000 shares authorized, 19,030,474 and 18,968,448 shares issued and outstanding, respectively			1,903			1,897
Capital in excess of par value			68,313			66,706
Retained earnings			350,588			345,882
Accumulated other comprehensive income, net			80			35
Total shareholders’ equity			420,884			414,520
Noncontrolling interests			46,219			33,456
Total equity			467,103			447,976
Total liabilities and equity		$	726,918			709,166

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 Securities and Exchange Commission. We believe these non-GAAP measures provide useful information to our Board of Directors, management and investors regarding certain trends relating to our financial condition and results of operations. Our management uses these non-GAAP measures to compare our performance to that of prior periods for trend analyses, purposes of determining management incentive compensation and budgeting, forecasting and planning purposes. We provide Pro rata net operating income (NOI) because we believe it assists investors and analysts in estimating our economic interest in our consolidated and unconsolidated partnerships, when read in conjunction with our reported results under GAAP. This measure is not, and should not be viewed as, a substitute for GAAP financial measures. For ease of comparison all the figures in the tables below include the results for Bryant Street, .408 Jackson, and The Verge in the Multifamily segment for all periods shown.

Pro rata Net Operating Income Reconciliation
Nine months ended 09/30/24 (in thousands)
		Industrial and Commercial Segment				Development Segment			Multifamily Segment			Mining Royalties Segment			Unallocated Corporate Expenses			FRP Holdings Totals
Net income (loss)		$	1,222			(2,498	)		(3,951	)		5,884			4,116			4,773
Income tax allocation			376			(767	)		(1,224	)		1,808			1,550			1,743
Income (loss) before income taxes			1,598			(3,265	)		(5,175	)		7,692			5,666			6,516
Less:
Unrealized rents			12			—			—			—			—			12
Interest income						2,995									5,800			8,795
Plus:
Unrealized rents			—			—			—			1,765			—			1,765
Professional fees			—			—			15			—			—			15
Equity in loss of joint ventures			—			2,081			6,466			35			—			8,582
Interest expense			—			—			2,348			—			134			2,482
Depreciation/amortization			1,083			128			5,947			471			—			7,629
General and administrative			886			4,281			788			928			—			6,883
																		—
Net operating income (loss)			3,555			230			10,389			10,891			—			25,065
NOI of noncontrolling interest			—			—			(4,727	)		—			—			(4,727	)
Pro rata NOI from unconsolidated joint ventures			—			469			8,229			—			—			8,698
Pro rata net operating income		$	3,555			699			13,891			10,891			—			29,036

Pro rata Net Operating Income Reconciliation
Nine months ended 09/30/23 (in thousands)
		Industrial and Commercial Segment				Development Segment			Multifamily Segment			MiningRoyalties Segment			Unallocated Corporate Expenses			FRP Holdings Totals
Net income (loss)		$	892			(7,192	)		(816	)		5,842			3,270			1,996
Income tax allocation			331			(2,667	)		(145	)		2,168			1,212			899
Income (loss) before income taxes			1,223			(9,859	)		(961	)		8,010			4,482			2,895
Less:
Unrealized rents			531			—			—			143			—			674
Gain on sale of real estate			—			—			—			10			—			10
Interest income			—			3,692			—			—			4,515			8,207
Plus:
Unrealized rents			—			—			117			—			—			117
Loss on sale of real estate			2			—			1			—			—			3
Professional fees			—			—			59			—			—			59
Equity in loss of joint ventures			—			10,256			298			31			—			10,585
Interest Expense			—			—			3,218			—			33			3,251
Depreciation/amortization			1,006			140			6,797			472			—			8,415
General and administrative			1,026			3,740			634			750			—			6,150
Net operating income (loss)			2,726			585			10,163			9,110			—			22,584
NOI of noncontrolling interest			—			—			(4,627	)		—			—			(4,627	)
Pro rata NOI from unconsolidated joint ventures			—			251			4,479			—			—			4,730
Pro rata net operating income		$	2,726			836			10,015			9,110			—			22,687

Conference Call

The Company will host a conference call on Wednesday, November 6, 2024 at 4:00 p.m. (EDT). Analysts, stockholders and other interested parties may access the teleconference live by calling 1-800-343-5172 (passcode 83364) within the United States. International callers may dial 1-203-518-9856 (passcode 83364). Audio replay will be available until November 20, 2024 by dialing 1-800-753-5207 within the United States. International callers may dial 1-402-220-2156. No passcode needed. An audio replay will also be available on the Company’s investor relations page (https://www.frpdev.com/investor-relations/) following the call.

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 MidAtlantic and Florida; multifamily demand in Washington D.C. and Greenville, South Carolina; our ability to obtain zoning and entitlements necessary for property development; the impact of lending and capital market conditions on our liquidity; our ability to finance projects or repay our debt; general real estate investment and development risks; vacancies in our properties; risks associated with developing and managing properties in partnership with others; competition; our ability to renew leases or re-lease spaces as leases expire; illiquidity of real estate investments; bankruptcy or defaults of tenants; the impact of restrictions imposed by our credit facility; the level and volatility of interest rates; environmental liabilities; inflation risks; cybersecurity risks; as well as other risks listed from time to time in our SEC filings; including but not limited to; our annual and quarterly reports. We have no obligation to revise or update any forward-looking statements, other than as imposed by law, as a result of future events or new information. Readers are cautioned not to place undue reliance on such forward-looking statements.

FRP Holdings, Inc. is a holding company engaged in the real estate business, namely (i) leasing and management of commercial properties owned by the Company, (ii) leasing and management of mining royalty land owned by the Company, (iii) real property acquisition, entitlement, development and construction primarily for apartment, retail, warehouse, and office, (iv) leasing and management of residential apartment buildings.

Contact:	John D. Baker III
	Chief Executive Officer	(904) 858-9100

FAQ

What was FRP Holdings' (FRPH) net income for Q3 2024?

FRP Holdings reported net income of $1.4 million for Q3 2024, an 8% increase from $1.3 million in Q3 2023.

How much did FRPH's pro rata NOI increase in Q3 2024?

FRPH's pro rata NOI increased 39% to $11.3 million in Q3 2024, compared to $8.1 million in Q3 2023.

What was the performance of FRPH's Multifamily segment in Q3 2024?

FRPH's Multifamily segment saw a 23% increase in pro rata NOI, primarily due to successful lease-up of Bryant St., 408 Jackson, and The Verge properties.

When will FRPH begin construction on its Florida industrial projects?

FRPH plans to begin construction on two industrial joint venture projects in Florida in March 2025.