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• 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).

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.

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).

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%,

Industrial and Commercial Segment

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

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

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

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)

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)

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).

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%.

Industrial and Commercial Segment

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

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