Excuse me, everyone. We now have all of our speakers in conference. Please be aware that each of your lines is in a listen-only mode. At the conclusion of today's presentation, we will open the floor for questions. Instructions for asking questions will be given at that time. I would now like to turn the conference over to John Baker II. Mr. Baker, you may begin.

Good morning. My name is John Baker, and I'm Executive Chairman and CEO of FRP Holdings, Inc. With me today on the line are David deVilliers, Jr., our President; John Baker III our CFO; David deVilliers III, our Executive Vice President; John Klopfenstein, our Chief Accounting Officer; and John Milton, our Secretary. Before we begin discussion of the quarter's results, let me remind you that any statements on this call, 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 risks and uncertainties are 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 except as imposed by law as a result of future events or new information. Now, let me turn to the results. Net income for the fourth quarter of 2020 was $393,000 or $0.04 per share, bringing our net income for the year to $11.615 million or $1.21 per share versus $16.177 million or $1.63 per share. The lower results for 2020 were driven by lower investment income as interest rates fell dramatically during the year and by greater losses on our joint ventures, especially the Maren and Bryant Street, which had high interest and depreciation expense and operating losses as we built our rent rose zero at both locations. These losses were partially offset by gains on property sales, including 3 remaining lots in the Lakeside Business Park, our depleted mining site at Gulf Hammock, Florida, a right of way through our Ft. Myers property and our newly completed and fully occupied warehouse in our Hollander Business Park in Baltimore. During the year, we made good progress on our new developments at Bryant Street and Half Street in Washington; our two mixed-use projects in Greenville, South Carolina; and at the Maren, where we completed the construction of the second phase of our Anacostia property, and expect to achieve 90% occupancy this month. Additionally, our mining royalties business had record results and we negotiated new 12-year interest only loans on Dock 79 and the Maren at a fixed rate of 3.03%. With total principal on the 2 loans of $180 million, the loan on the Dock 79 replaces a 4.15% loan. And on that property alone, we will save over $1 million a year in interest. Finally, during the year, we repurchased 510,145 shares of our stock at an average cost of $41.78, while still leaving ourselves with $150 million of cash and equivalents at yearend. Let me turn over the call to our President, David deVilliers, who will walk you through our various projects. David?

Thank you, John, and good day to those on the call this morning. Let me now add a bit of detail to the highlights John provided in his opening remarks. As to our Asset Management segment, with the disposition of our final 2 heritage properties in 2019, we completed the liquidation of a little over 4 million square feet of assets that made up this business segment, leaving just the company's 33,000 square foot multi-tenanted home office building in Sparks, Maryland; and the now vacant lot in Jacksonville, Florida that at one time house Florida Rock Industries' home office that remains under lease to Vulcan Materials. Earlier this year, we transferred from the Development segment 1801 62nd Street, our completed 94,350 square foot speculative warehouse building in Baltimore City. The building became 100% leased and occupied in the first quarter of 2020. And we subsequently completed the sale of the asset in July of 2020, realizing a gain of some $3.8 million. In early 2019, we added an asset to this business segment through the purchase of the Cranberry Run business park, in Aberdeen, Maryland, the 268,000 square foot multi-building warehouse park that was in dire need of rehabilitation. We spent the remaining months of 2019 and part of 2020, completing an extensive renovation of the park and associated buildings. During 2020, we received significant leasing success, bringing the park from 26.1% at the beginning of the year to 87.6% occupancy at year's end. Total revenues for the Asset Management segment for the quarter were up 44% or $658,000 over the same period last year with an operating profit of $36,000 versus a loss of $213,000 in the same quarter last year. Increased revenues and profit this quarter were mainly attributable to improved leasing at Cranberry Run. In the Mining…

Thank you, David. Now, we are at this point happy to open up the call for any questions that any of you might have.

And at this time, we will open the floor for questions. [Operator Instructions] And our first question comes from Bill Chen. Please go ahead.

Hi, guys.

Hey, Bill.

Hey, Bill.

Right. A couple of questions, I'm probably going to jump around a little bit. I think there's an Alamo Drafthouse in the Bryant Street project, if my memory serves me correctly, and they just filed for bankruptcy yesterday. Is there any - any updates on whether we're going through with the Alamo Drafthouse as a tenant on the Bryant Street project?

Bill, this is David deVilliers. We knew about the parent filing bankruptcy about the same time you did. So the lease that we have is with the franchisee. And they have 3 different - this will be the third. And they have 2 other operations that are open, but certainly not to the extent that they would like them to be. So we don't know fully yet. We speak with them probably on a biweekly basis. So, again, we're aware. We're just going to have to see what that fallout does. The building is under construction. We're going to get to a white-box program and then we'll try to figure it out from that. They were expected to come and start working on the interior of the project sometime this summer. So the time could be better if we can get to herd immunity, but that's kind of about where we are now.

Got you. And just in case for some reason, that - we repurpose that space if needed. And then, yeah, movie theaters kind of got a certain layout which may be different than a typical layout. So any color in that would be helpful.

Again, and the building is designed for them. As you may or may not know, 65% of their revenue is derived from food and beverage. So, it can be - I won't say it can be repurposed easily or quickly. But it can certainly be repositioned for other retail uses.

Got you. Okay. And I'm just going to jump around a little bit. I hope you guys don't mind. On Cranberry Run, great job getting that repurposed and leased up. Can you guys share what kind of rent we're getting on that building?

Well, it's - when you say, what kind of rent, a lot of these spaces there, Bill, are temporary spaces. We call temporary leases, plus or minus a year. And so, our original underwriting was for something a lot less than what we're getting now. When you do storage for temporary spaces, we were - again, we paid about 30-some-dollars a foot for that building, and then put a bunch of money into it. So we've got a pretty low basis. But then the leases we're generating are well beyond what we had originally underwritten.

Got you. And the intention there is, is it - refresh my memory, I guess, the intention there is to sell that?

Well, everything is for sale. As you can - as you certainly know from our past activities. I mean, the paint was hardly dry on to the Hollander building before we sold that one in June. So we just - again, we don't know - we don't make any plans to sell something right away. We just look at the market and we try to be as opportunistic as possible in the sale of our assets.

Got you. Thank you. And I think the new acquisition, the $10 million acquisition, the Aberdeen, that's right next to Cranberry. Is that right?

Yes, sir.

And was there, like what did you guys see that made that attractive?

Well, it's surrounded by the large box institutional warehouses. It's a great location. It's a great location, it's close to 95. And as you know, where we're located there in the northeast, you can get to a major part of America's population in less than an 8-hour drive. And more importantly, it helps to put some - a little bit of inventory back into our program. I mean, for years, we probably had too much inventory. But right asset and before we bought that, we had one lot left at Hollander Business Park that could take as much as 100,000 feet. Now, we're out. So - but primarily, we love the location.

Got you. Got you. And on local rent dynamic, I think the [headline] [ph] is generally that in Richmond, Virginia, I think I saw something in the mid-single-digits rent increase for 2020. Just want to get a confirmation on that. I don't know if that happened in the DST property. So if you could comment on that. And also, if you could comment on rent trends in Greenville, South Carolina and if that is a market that experienced rent growth in 2020?

It has - excuse me, as you can imagine, 2020 has been a very unusual year for everybody, in every asset class. I think I'd rather be in the mixed use and warehouse class in the office and retail, but so it's really kind of hard to tell. It's somewhat of an anomaly. We've seen positive signs in both Richmond by virtue of some of the increases they got at Hickory Creek. But again, when you're dealing with a pandemic, it's awful hard to put any real credibility on rent increases or whatever. So, for example, in D.C., as you know, the government wouldn't allow us to increase rents. We did see a favorable trend. We see the trend continuing. I think it's kind of bumped along in 2020. But we're very, very excited about these vaccinations and return to people moving about freely. And I think that'll show a tremendous chance to increase rents all around, especially in places that had success before this came in.

And just one last question before I dropped off. So, I'm looking at the apartment rents in Coda, for the Bryant Street project. It seems like the asking rent is about 280 a square foot for the Coda building. Can we extrapolate that to the rest of the Bryant Street project?

Well, the Coda building is a little bit, is probably the lower end. I won't say the low end, but a lower end than the Chase, which are the 2 buildings that are a little closer to the railroad and on the other end of the park. So Coda's units are, I would say, just a touch below. So we're going to see greater rents at the Chase, which are the 2 buildings that are under construction now. So we have given a little bit more of a discount than we had - that we had underwritten in the beginning, 5%, 7%, maybe. But we've only been open for 2 months, and we've leased 34 units as of February 28. So, the game is afoot. We feel really good about the project. We'll be excited when the spring comes, and we finish the project, because the great thing about this project is there a lot of open space. And that's important, and a very important factor for the retail component, and also for the people that live there.

Got you. Thank you very much. I think that's all the questions that I have.

Okay.

Thank you. And our next question comes from Curtis Jensen. Please go ahead.

Hey, good morning, fellows. Can you hear me okay?

Yes, sir.

Yeah, Curtis.

Well, congratulations on getting through the year. Your business held up amazingly well, and you got a heck of a lot accomplished. You're very busy. And it was pretty remarkable. But 2 or 3 questions, if I could. Just thinking about some of the submarkets in D.C. like Southwest and Capitol Hill and Capitol Riverfront, there was, I think in the last year, something like 3,900 units delivered into those markets, and across a dozen buildings or so. And as you kind of - you've got big commitments at Half Street and Bryant Street. How do you feel about and there's probably been positive absorption and sounds like you guys are doing a great job of getting leased up and stuff like that? But, given your significant footprint already and given what you've learned about this public health experience, are you inclined to keep putting big checks into the D.C. area? Or if you had to - are you thinking about it? I mean, obviously, you're thinking about other things. You spent $10 million for property and light industrial, in Aberdeen, and stuff like that. But, I mean, just give me a sense of where you think you might be allocating. Are you kind of done for the moment in D.C.? Obviously, there's stuff at Buzzard Point coming down in the years ahead. But, I mean, how are you feeling about this market right now, and the multifamily market? Given all these crosscurrents?

I can offer a couple of comments. And then, John, I guess you could - appreciate your insight to this as well. We've talked about this, Curtis. I mean, look, the Southeast of Washington, D.C., where we're located is literally the southern entrance to the nation's capital. And the new Frederick Douglass Memorial Bridge, the infrastructure improvements with the oval and all of that, that's under construction, which is created somewhat of a nightmare for all the people that live there and walk around there. But we see a very strong - a strong increase in the people that continue to move into the area down there, the younger people and you can argue that with the change of the way people work, where they don't go to offices, they like to live in nicer places, and there's a tremendous amount of live/work/play type of activities in and around the southeast. I mean, you've got sports and baseball and soccer. You have the water. You have sports betting. You have a lot of different positive influences on that area. So we're still bullish on the area, I mean, obviously, it's not without a little trepidation. But we continue to take a look at what's in front of us. And as this quote, we reach herd immunity. And we see where things kind of play out. I think at that point, we'll take a look at where we are and decide, and kind of look at the tea leaves and squeeze the old crystal ball and see where we think things are at that time.

Fair enough.

We do - go ahead, sorry.

Curtis, I would - this is John Baker, I would say, we are very bullish on the area in Buzzard Point and Phases III and IV of our Anacostia property. So, we were very surprised - pleasantly surprised at how quickly the Maryland leased up, I think, we were figuring that we would get 15 units a month. And we got a lot of months, 2 or 3 times that. So we've got every reason, both - because of what happened before COVID and during COVID to have a lot of faith in that part of the market. We've got a - we're going to watch Bryant Street, as David mentioned, it is a thing. That's a multi-phase building, and we're starting off with a big hunk of apartments and retail. So we'll watch that one to see if it leases up. We're off to a decent start. But it really won't be fair to analyze that market until people start using the metro again. And we get some resolution on what happened with the Alamo Drafthouse Theater, so less optimistic about that. But we would be prepared to go forward if we can get it leased up in a reasonable amount of time on Phase I. So, to answer your question were anything but done in DC.

Yeah, on Phase III and IV, do you have to wait until the bridge is done before you can get going there? Or I know there was some - you had some situation with the city, I guess, around an easement or something like that there was - but do you have to kind of wait until the bridge is done before you get going there?

The answer to the question would be, probably would want to wait till it's done. But more importantly with us building, the building at Half Street, we wouldn't think about starting a new project until we get that up and rent it out. So either way, the bridge has got to be done. And I don't know if you've seen it the bridge and that round about it. They're going to have there is really looking beautiful. I mean, I never thought that bridge would be an amenity, but it is gorgeous. And so I think it is add something to the whole area.

Are they taking down - I guess, they're going to take down the old bridge, right? The old one will be taken down in time, yeah?

Yeah. Right.

On Dock 79, you said the NOI was $6.6 million, I think. Is there - were there added expenses, I mean, I'm sure there were probably added expenses related to COVID precautions and things like that expenses that you think will go away that you can take out once the public health issues abate a bit.

Absolutely…

What do you think that you're going to keep running the building the way it is?

If we - excuse me, Curtis, this is David deVilliers. Absolutely, I mean, we had a lot of expenses, because of keeping it sanitized, and that sort of thing that that we would not have under normal conditions, for sure.

And would that be like a few $100,000 annually or is that…?

It could be. It could be, probably had. That's probably had, Curtis. But the real play on that is in our retail. We had been getting excess rents, especially during the World Series year and as opposed to being shut down and hoping to get rents. So I think that's where you'll see an improvement is, we come back. And also, our rent was 93 - our occupancy was 93%. A Dock 79 as opposed to 95 the year before that's an impact.

Average occupancy.

Average occupancy.

And the rent freeze, yeah.

And we were unable to raise the rents. Well, it's interesting, at Maren, our rents are what, David, about 10% higher than they are at the Dock. So there's room to raise rents when that freeze comes back or ends, I should say. So I think, you'll see Dock 79 get improvements in a lot of ways, is not the least of which was - as we were building the Maren, I'm not exaggerating it, it couldn't - we had heavy construction going on 20 or 30 feet from Dock 79. And that could not have helped the listing activity at all. And that's, of course, done now. So it'll be a lot more mature place and I think a very, very desirable place.

Great. When I think about Hyde Park and Amber Ridge, it seems like you guys - seems like an opportunistic kind of mezzanine lending approach, maybe that's not the right phrase, but that's how I kind of think about it. Do you see - knowing what's going on, I mean, homebuilders are dying for land and would you see other opportunities like those that, coming down the pipe?

Yes, Curtis, we do. As a matter of fact, we have one that's fairly close to us making a charge. But you're absolutely, right. I mean, it's been an interesting dynamic, obviously trying to navigate - our partner navigates through 2020, we're dealing with entitlements for government agencies that are closed down and that sort of thing, and to be able to get one of the projects sold. And then to get all the entitlements on the other one during this year has really been pretty remarkable. But we're in a - we look at, it really good areas where we can find the hole in the doughnut. And that's what these 2 are, and we have other ones that we look at, but they have to meet. We have some pretty rigid criteria before we were going to become part of a lending venture. But we have a really good partner who has been in the residential development business and the past president of actually a couple of the national home building companies, who's our partner, and we've known for over 25 years. So we were pretty excited about the lending ventures program, and it also we don't want to take our eyes off what our real business is, that is industrial development, and then certainly now mixed-use.

And then I'll shut up in a second. My last question is, can you just remind me of the kind of obligations you have in an opportunity zone, are they - is there sort of an 80/20 low income type of obligation or is there - what sort of other obligations do you have when you go into an opportunity zone?

Well, the big thing is obviously in a lot of these you have a certain percentage in different locations of - we'll call it affordable housing and those dynamics change depending on the location. But more importantly, it's the whole period, you have to - it differs, we had to the current program with opportunity zone is that you have to settle on the property by the end of 2021. And then that you have to then hold, keep the property at least through I believe is 2027. And then you pay, you owe the taxes on those capital gains moneys that you invested in 2021, you owe taxes on 85% of that. And then, as the - more importantly, if you go past 2021, the moneys that you invest in these projects, you have to keep them up and operating for 10 years. And if that happens, then the basis is frozen, and you don't have to pay taxes on the increase basis if and when you ever sell the property. That's the big program is the deferral of taxes in the short-term, but the freezing of the basis. So whatever happens, you don't have to pay taxes on the increase basis when you ultimately do sell it after that 10-year hold period.

Okay. Thanks a lot. Keep up the good work.

Thank you.

Thank you.

Thanks for your support.

Thank you. And our next question comes from Stephen Farrell. Please go ahead.

Hi, guys, can you hear me?

Yeah.

Yes.

Quick question about Bryant Street, I know, you've mentioned with the Maren that your internal metrics were about 15 leases a month? What are your similar lease-up metrics for the Coda? And what kind of contingency plans are in place in case there's a slow lease up?

Well, Coda has been exactly been leasing at the rate of about 17 units a month at the - for January and February. I mean, we're just kind of just getting started. And that's not a bad start considering the fact that construction is going on all the way all around you, so we're pretty - actually we're pretty happy with what has happened at the Coda. We are - as John said, we're looking at that project closely. And as I said in my remarks, we're watching the construction of completion, we have a lot going on as it relates to generating the retail activity that will then we think will help to keep the leasing activity up and maybe even increase it. We are very conservative in our underwriting of these leases going in. So we're not that far off of what our underwriting criteria was at least to start at Bryant Street. So we are giving up some - when we change the pricing on these properties, just about every day through the software programs that our property manager has, which is the [Bazoodo] [ph] companies. And they're very good and very experienced in running and operating these programs. So we're kind of following along with them. As it relates to the retail program we have, as John and I said earlier, we're watching to see what happens with the Alamo Drafthouse that's 44,000 feet, but we have another 42,000 or 43,000 feet of first floor retail. And we've had some really good velocity from retail tenants, which is amazing. We're - we've created a food hall concept that will occupy about 10,000 square feet of that, and we have an incredible amount of velocity. We've actually got a couple of letters of intent that we're going to lease on, so far so good.

And Stephen, to answer your question, on a less optimistic point of view, we've got $150 million in cash and that's what our backup is if things don't go well.

Great. Thank you.

That would enable us to keep paying the loan.

And [Technical Difficulty]

Stephen, you're breaking up. We can't hear you.

Can I [Technical Difficulty]

Stephen, I'm sorry. We can't hear you. I think, it's frozen.

Yeah. We lost him.

[Operator Instructions] We do have a question here from [John Kohler] [ph]. Please go ahead.

Good morning, gentlemen. I'm - just a couple of follow up questions from what Stephen was asking, if I may. Can you bracket your CapEx budget for this year? And then as a follow-up to that, if you can also sort of ballpark where you see funds coming in from either asset sales or refinancing and how you expect that to offset any cap spend you have?

John, can you talk about CapEx?

I don't have that figure right in front of me, David, do you recall?

Yeah. What was the question? I'm sorry.

Yeah, what your cash outflow was looking like for all the projects you have, and then how you might offset some of that from asset sales or the refinancing of Maren, or any cash that you might pull out? I'm just curious about how the cash flow looks for the year, as a corollary to that $150 million you already have the bank.

Okay.

You said for the year, do you mean 2020 or 2021?

2021, please? Sorry.

Okay. Well, we - again, John spoke earlier, we were going through some refinancing of both Maren and Dock, that's going to generate $180 billion of new financing. One of the programs that that will do is the Maren, we are refinancing, basically the construction loan into a long-term permanent financing. And when we go to settlement on that financing, which John talked about, we get $13,750,000 of preferred equity back plus accrued interest of about $2.3 million. So that's close to what $16 million there. Our CapEx right now for 2021 is scheduled to be around $36 million. So that's kind of a very - from 3,000 feet, so that's kind of where we are right now. We don't have anything under contract to sell right now. So I don't know that that will add cash. So if you take just the 16 that we know, we're going to get back and you put that against the 36, it's probably be a net CapEx at around $20 million that we would have to go into the bank about $150 million to take it out.

Okay, perfect. And I'm guessing, given the amount of money that's available pretty much everywhere that potential deals of any material size are probably not within your price range. Is that a reasonable assessment that you just are seeing opportunity, but they're not priced, right?

We have a pretty strict underwriting criteria and we're always looking, but there's a lot of crazy money out there in the world today. So we look at a lot of projects, we probably look - last year we looked, I'm embarrassed to say probably over 800 projects and we wound up purchasing 55 acres in Aberdeen, Maryland.

Yeah, that's great. That's the right filter in my…

John, your…

Yeah.

John, I think your point is a very good one. Yeah. There are not many projects that are built and for sale, that would whet our appetite, because they are just expensive as can be. Yeah, yeah. And that's exactly why we think developing these projects is a better business model than buying them right now.

Okay, great. And then, lastly, your execution on the share repurchase was quite good. And I'm not asking for an opinion on where you view the stock price or anything like that. But given the lack of potential deals and depending on how your CapEx budget goes, would you still look to allocate some cash for additional repurchases where you thought the stock was inexpensive?

I think we've got about $10 million approved at this point by the board. And, I'm glad you're not going to ask us what's our pricing strategy is. But needless to say, we would rather pay less than more.

Okay, all right. Thank you very much.

Great.

Thank you. And next, we'll go to Bill Chen. Please go ahead.

Hi, guys. On the refinancing of the Maren and Dock 79, we've seen the 10-year treasury have some wild moves lately. Are those 2 transactions kind of like a foregone conclusion or is there some way that those 2 financing could be derailed?

Bill, the rates that we quoted, said today are fixed. We looked at probably - we're deep into the documents now. We could probably get the settlement in over the next 2 or 3 weeks. So we're well within the confines of the time allocated to get the settlement here. And it was those loans actually where originally they had a - they were on a 12-year average as opposed to the 10 and a 180 basis points. So there was a floor on those loans when we first went into it that we could lock in until we send in the application. But the floor was like 2.8%. We got - I won't say we got caught. We wound up at 3.03%. But this is - hopefully, we'll get to the end. There's no reason to believe that we won't. But crazier things have happened.

Thank you for the color. And on the construction loan on the Maren, do we have an estimate on that, what that final number will be?

The final number of what?

For the Maren construction loan.

I believe it's about $65 million.

[I think too] [ph].

I mean, I think it was roughly $63 million or 65 million. I know the construction loan was approved for, was $71 million.

$71 million, yeah.

Is $71 million the final figure?

It's $69 million…

It's a little less than that.

It's $69.5 million.

$69.5 million, okay. Got you. Thank you. That's helpful. And I think I just want to leave off with my - the final opinion as a shareholder that we believe that share buybacks are great use of capital. And I was just encouraged that as you continue to create a lot of value for shareholders, that the share buyback price is a moving target. My suggestion would be don't get fixated on what you paid in the past. I think that number could rise over time as these projects get developed, and value gets created. Just be flexible on that end. And we can have - I will reach out offline to discuss. But I just want to - I think previous share buybacks have been done at very attractive prices. And I think future share prices should account for the increase in prices through all the good jobs that you guys have done.

Thank you. Thank you.

Thank you. It appears that we have no additional questions at this time.

Well, I appreciate everybody joining the call. They were really good questions and enjoyed being with you all. And I appreciate your interest in FRP. And we'll talk to you next quarter.

Thank you, ladies and gentlemen. This concludes today's teleconference. You may now disconnect.