FRP Holdings, Inc.

Good day, everyone, and welcome to the FRP Holdings, Inc. Fourth Quarter 2025 Conference Call. At this time, all participants are placed on a listen-only mode, and we will open the floor for your questions and comments after the presentation. It is now my pleasure to hand the floor over to your host, Chief Financial Officer Matt McNulty. Sir, the floor is yours. Thank you.

Good afternoon, and thank you all for joining us on this call today. I am Matt McNulty, Chief Financial Officer of FRP Holdings, Inc. And with me today are John Baker II, our Chairman, John Baker III, our CEO, David DeVilliers III, our President and Chief Operating Officer, Mark Levy, our Chief Investment Officer, and John Klopfenstein, our Chief Accounting Officer. First, let me run through a brief disclosure regarding forward-looking statements and non-GAAP measures used by the company. As a reminder, 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 in our SEC filings. To supplement the financial results presented in accordance with generally accepted accounting principles, FRP presents certain non-GAAP financial measures within the meaning of Regulation G. The non-GAAP financial measures referenced in this call are net operating income, or NOI, and pro rata NOI. In this quarter, we provided an adjusted net income to adjust for the impact of one-time expenses of the ultimate logistics acquisition, which is a material business combination unlike our historical real estate acquisitions or joint ventures where expenses are capitalized. We also provided adjusted net operating income to adjust for the impact of the one-time material royalty payment in the third quarter of 2024 to better depict the comparable results year to date. Management believes these adjustments provide a more accurate comparison of our ongoing business operation and results over time due to the non-recurring material and unusual nature of these two specific items. FRP uses these non-GAAP financial measures to analyze its operations and to monitor, assess, and identify meaningful trends in our operating and financial performance. These measures are not and should not be viewed as a substitute for GAAP financial measures. To reconcile adjusted net income, net operating income, and adjusted net operating income to GAAP net income, please refer to our most recently filed 10-K. I will now turn the call over to our President and Chief Operating Officer, David Abelia III, for his report on company and segment financials as well as operations. David?

Thank you, Matt, and good afternoon, everyone. I'll begin with a review of our fourth quarter and full year 2025 results and then discuss our operating priorities as we move into 2026 and beyond. 2025 was a transition year operationally, but more importantly, It was a year where we significantly expanded the scale, capabilities, and long-term earnings potential of our platform. As we enter 2026, our focus is shifting from repositioning and investment toward execution and the conversion of embedded value into cash flow. For the year, we generated approximately $37.9 million of NOI and $22.1 million of FFO. were $1.16 per share and ended the year with approximately $144 million of liquidity. These results were generally in line with our expectations and positioned us well for the next phase of growth. Late in the fourth quarter, we completed the Altman Industrial Acquisition for approximately $33.5 million, adding roughly 1.6 million square feet of industrial development pipeline. While not included in our original budget, this acquisition significantly expands our platform and strengthens our presence in high conviction logistics markets. Turning to commercial and industrial, the portfolio totals approximately 807,000 square feet and ended the year approximately 47.5% occupied or 69.9% excluding our new Chelsea building. compared to 95.6% last year. Segment NOI was approximately 875,000 in Q4 and 3.9 million for the year, representing declines of 11.8% and 13.6%, respectively. The primary dynamic in 2025, which we anticipated entering the year, was lease rollover timing. While occupancy declined as expected, leasing velocity was somewhat slower than anticipated as tenant decision cycles lengthened. Importantly, we view this as timing within the leasing cycle rather than a change in underlying demand. We currently have approximately 423,000 square feet available for lease up, representing roughly 52 percent of the segment. At stabilization, this represents approximately 3.3 million of incremental annual NOI representing a clear and visible earnings opportunity over the next 24 months. Execution will be focused on leasing velocity, pricing discipline, and progressing occupancy towards approximately 70 percent by year end, with a path to stabilization in the low 90 percent range over the following 18 to 24 months. Turning to mining and royalties, this segment generated approximately 3.9 million of NOI in Q4, and $14.6 million for the year, representing increases of 11.5% and 1.5% respectively, with strong margins. The business continues to provide durable, high-margin cash flow with minimal incremental capital requirements and remains an important stabilizing component of our overall earnings and profile. While quarterly results may fluctuate due to timing or non-recurring items, Underlining performance remains consistent and supports balance sheet flexibility. Moving to multifamily, the portfolio includes approximately 1,827 units across Washington, D.C. and Greenville, South Carolina. NOI totaled approximately 4.2 million in Q4 and 18.1 million for the year, representing modest declines of 2.6 percent and 0.4 percent, respectively. with average occupancy around 93 percent, and economic occupancy, which reflects concessions and delinquencies, of approximately 88 percent. Fourth quarter results were somewhat below expectations, primarily driven by, one, retail revenue softness of approximately 127,000 NOI impact, two, lower occupancy at Marin, averaging approximately 89 percent, and three, continued operating expense pressures. From a regional perspective, South Carolina remains stable with economic occupancy around 92 percent. Washington, D.C. remains more competitive due to supply pressure with economic occupancy around 87 percent. Our focus remains on resident retention, disciplined pricing, expense control, and improving retail occupancy where possible. Development remains a primary driver of incremental value creation. Our current pipeline represents approximately 441 million in total project costs, with expected stabilized incremental NOI of approximately 30 million over time. The Altman acquisition expands our footprint into Florida and New Jersey, adds experienced development talent, and enhances our relationship with institutional capital partners. We continue to underwrite conservatively. Target yields on costs of approximately 6.7 percent or greater, market cap rates of approximately 5.25 percent or lower, target IRRs in the 15 to 20 percent range. Development value is realized over time through lease-up, and our pacing remains disciplined and aligned with market conditions. Stepping back, we operate a capital-efficient logistics platform. designed to compound long-term per share value. This model combines development, selective ownership, and partners to generate multiple sources of return, including development gains, durable cash flow, and fee income. Our approach allows us to recycle capital, scale beyond our balance sheet, and dynamically allocate capital across opportunities based on risk adjusted returns. Importantly, this model allows us to generate value through development, convert that value into durable earnings, and scale through partnerships, creating a more capital efficient and higher return platform over time. Our estimated NAV per share is approximately $37.60, increasing to over $40 per share over the next three years, compared to a current share price that has recently traded between $20 and $24. Closing this gap remains a central focus of management, and we believe execution across leasing, development stabilization, and disciplined capital allocation will be the primary drivers in narrowing that discount over time. Looking ahead, we view 2026 as an investment year. We expect NOI to be approximately 37.1 to 37.7 million, with G&A increasing to approximately 15 to 16 million, as we integrate the Altman platform and continue investing in the infrastructure required to support a larger, more scalable operating platform. Importantly, this increase reflects potential investment ahead of NOI growth, including the addition of a development, asset management, and operational capabilities necessary to execute on our expanded pipeline. As a result, G&A as a percentage of NOI is expected to be elevated in 2026, potentially in the low 40 percent range, before declining meaningfully as leasing activity accelerates, development stabilizes, and incremental NOI is realized. Over time, as the platform scales, we expect operating leverage to emerge, with G&A trending toward a more normalized range in the low 20 percent area. We believe this is the right tradeoff, investing today to unlock a significantly larger and more valuable earnings base over the next several years. Balance sheet discipline remains foundational. We ended the year with approximately $144 million of liquidity, net debt to enterprise value of approximately 21%, and a weighted average interest rate of approximately 5.24%. This liquidity provides flexibility to fund development, support lease up, and navigate market cycles without reliance on asset sales. To close, the next 12 to 24 months are about execution and value realization. Leasing the industrial portfolio, stabilizing development, and converting embedded NAV into durable cash flow are the key drivers of near-term performance. We were seeing early signs of stabilization across our markets and fundamentals for well-located logistics assets remain constructive. In fact, we recently signed a lease for 15,000 square feet at Cranberry Business Park in Maryland with a face rent 38% higher than the previous tenant. And in the final stages of a lease for over 26,000 square feet at Davey in South Florida with a face rate above underwriting. We believe the work completed in 2025 has positioned us to drive meaningful growth in both NAV per share and durable earnings over the next several years. With that, I'll turn the call over to Mark Levy, our Chief Investment Officer, to provide additional perspective on leasing strategy, capital deployment, and market positioning. Mark?