Summary of FRP Holdings Inc. 2025 Investor Day Company Overview - **Company**: FRP Holdings Inc. (FRPH) - **Industry**: Real Estate Development, focusing on industrial, multifamily, and mining assets - **Historical Background**: The company has roots dating back to Fort O'Rock Industries, which was established during the Great Depression and evolved through various strategic decisions, including a tax-free spin-off in 1986 [3][4]. Core Business Segments 1. **Mining and Royalty Segment**: - Operates 14 locations in Florida, Georgia, and Virginia, producing sand and crushed stone [20]. - Royalty income increased from $4.8 million in 2006 to $12.8 million in 2024, reflecting strong pricing growth [47]. - The segment generated $14.4 million in NOI in 2024, with a 17.2% CAGR over the last four years [25]. 2. **Industrial Commercial Segment**: - Currently holds approximately 550,000 square feet of industrial space, generating $4.5 million in NOI in 2024 [26]. - Plans to double the industrial portfolio to over 1.1 million square feet by 2025 [22]. - Achieved a pro rata NOI CAGR of 33.4% over the last four years [26]. 3. **Multifamily Segment**: - Comprises over 1,800 units and generated $18.2 million in NOI in 2024 [26]. - Focused on high-growth markets, with plans to expand in Greenville, South Carolina, and Southwest Florida [23][45]. - The segment has a pro rata NOI CAGR of 31% over the last four years [26]. 4. **Development Segment**: - Represents early-stage projects and land banked for future development, contributing approximately $1 million in NOI [27]. - Actively entitling 1.9 million square feet of industrial product and over 1,800 multifamily units [28]. Strategic Focus and Growth Plans - **Shift to Industrial Focus**: The company is pivoting back to industrial development after a period of multifamily focus, aiming to capitalize on high-quality markets with strong demand [7][10]. - **Joint Ventures**: Engaging in partnerships to expand capabilities in new markets, particularly in Florida [8][37]. - **Projected Growth**: Plans to invest $300 million over the next five years, targeting an additional $44 million in annual NOI [62]. Financial Performance and Projections - **NOI Growth**: The company has grown pro rata NOI at a rate of 21% from 2021 to 2024 and aims to grow it by another $30 million over the next five years [13][14]. - **Cash Flow Management**: The company plans to maintain a strong balance sheet while investing heavily in growth, with a projected drawdown in cash reserves [72][75]. - **Market Valuation**: Current share price reflects only income-producing assets, with potential for significant value creation from development projects [59][60]. Market Conditions and Challenges - **Economic Environment**: The company acknowledges the complexities of the current market, including rising interest rates and construction costs, which necessitate strategic patience and decisive actions [54]. - **Regulatory Landscape**: Changes in tenant-landlord laws in the DC market have impacted multifamily development, leading to a strategic pause in that segment [41][42]. Conclusion - **Long-term Vision**: FRP Holdings is positioned for growth through a diversified portfolio and strategic investments in industrial and multifamily assets, with a focus on high-demand markets [55][56]. The company aims to create substantial shareholder value by leveraging its strong balance sheet and operational expertise in real estate development [54].