FRP Holdings Profile
FRP Holdings, Inc. engages in various real estate businesses. Nearly all of the company’s residential/mixed-use and commercial properties are located in the Baltimore area and Washington, D.C.
Segments
The company operates through four segments: Asset Management, Mining Royalty Lands, Development, and Stabilized Joint Venture.
The company’s business segments are leasing and management of commercial properties owned by the company (the ‘Asset Management segment’); leasing and management of mining royalty land owned by the company (the ‘Mining Royalty Lands segment’); real property acquisition, entitlement, development and construction primarily for apartment, retail, warehouse, and office buildings either alone or through joint ventures (the ‘Development segment’); and ownership, leasing and management of buildings through joint ventures (the ‘Stabilized Joint Venture segment’).
The Asset Management segment owns, leases, and manages in-service commercial properties wholly owned by the company. This includes seven warehouses in two business parks, an office building partially occupied by the company, and two ground leases.
The company’s Mining Royalty Lands segment owns several properties totaling approximately 16,650 acres under lease for mining rents or royalties and an additional 4,280 acres through the company’s Brooksville joint venture with Vulcan Materials. Other than one location in Virginia, all of the company’s mining properties are located in Florida and Georgia.
The company’s Development segment owns and continuously monitors the highest and best use of parcels of land that are in various stages of development. The overall strategy for this segment is to convert all of the company’s non-income producing property into income-producing property through an orderly process of constructing new apartment, retail, warehouse, and office buildings to be operated by the company; or a sale to, or joint venture with, third parties. Additionally, the company’s Development segment will form joint ventures on new developments of land not previously owned by the company.
The Stabilized Joint Venture segment includes joint ventures, which own, lease and manage buildings that have met the company’s initial lease-up criteria. The company intends to transfer additional joint ventures from the company’s Development segment into this segment as they reach stabilization. Stabilization occurs when a minimum occupancy threshold has been achieved for a certain period of time.
Customers
In the Mining Royalty Lands segment, the company has a total of five tenants leasing its mining locations, and Vulcan Materials Company (‘Vulcan’ or ‘Vulcan Materials’) accounted for 23% of the company’s consolidated revenues in 2022.
Sales and Marketing
The company uses national brokerage firms to assist the company in marketing its vacant properties. The company’s hands on in-house management team focuses on tenant satisfaction during the life of the lease, which the company has found to be very beneficial with respect to its tenant renewal success rate over the years.
Properties
The company owns (predominately in fee simple but also through ownership of interests in joint ventures) approximately 21,000 acres of land in Florida, Georgia, Maryland, Virginia, South Carolina, and the District of Columbia. This land is generally held by the company in four distinct segments: Asset Management segment (land owned and operated as income producing rental properties in the form of commercial properties), Mining Royalty Lands segment (land owned and leased to mining companies for royalties or rents), Development segment (land owned and held for investment to be further developed for future income production or sales to third parties), and Stabilized Joint Venture segment (ownership, leasing and management of buildings through joint ventures).
Asset Management segment
As of December 31, 2022, the Asset Management segment included eight buildings at four commercial properties owned by the company in fee simple as follows:
34 Loveton Circle in suburban Baltimore County, Maryland consists of one office building totaling 33,708 square feet, which is 95.1% occupied (16% of the space is occupied by the company for use as the company’s Baltimore headquarters). The property is subject to commercial leases with various tenants.
155 E. 21st Street in Duval County, Florida was an office building property that remains under lease through March 2026. The company permitted the tenant to demolish all structures on the property during 2018.
Cranberry Run Business Park in Hartford County, Maryland consists of five office buildings totaling 267,737 square feet which are 100% leased and occupied. The property is subject to commercial leases with various tenants.
Hollander 95 Business Park in Baltimore City, Maryland consists of two buildings totaling 145,590 square feet that were completed in the fourth quarter of 2021 and are 100.0% leased and 45.4% occupied.
Mining Royalty Lands segment
Mining Properties
The company owns a fee simple interest in 14 open pit aggregates quarries located in Florida, Georgia and Virginia, which comprise approximately 16,650 total acres. The company’s quarries are subject to mining leases with various tenants, including Vulcan Materials, Martin Marietta, Cemex, Argos, and The Concrete Company. Aggregates consist of crushed stone, sand, gravel, fill dirt, limestone and calcium; and are used primarily in construction applications.
Nine of the company’s quarries (located in Grandin, FL, Fort Myers, FL, Keuka, FL, Newberry, FL, Astatula, FL, Columbus, GA, Macon, GA, Tyrone, GA, and Manassas, VA; totaling 13,876 acres) are being mined, and five of the company’s quarries (located in Marion County, FL, Lake Louisa, FL, Astatula, FL and Lake Sand, FL and Forest Park, GA; totaling 2,778 acres) are leased but are not being mined. In the year ended December 31, 2022, aggregate tons sold with respect to the company’s mining properties were approximately 9,525,000.
In May 2014, the company entered into an amendment to its lease with Vulcan for the company’s Fort Myers location requiring that the mining be accelerated and that the mining plan be conformed to accommodate the future construction of up to 105 residential dwelling units around the mined lakes. In return, the company granted Lee County an option to purchase a right of way for a connector road that would benefit the residential area on the company’s property and to place a conservation easement on part of the property, which the County exercised in 2020. Mining activity commenced in 2017 following Lee County’s issuance of a mine operating permit allowing Vulcan to begin production.
In November 2017, Lake County commissioners voted to approve a permit to Cemex to mine the company’s land in Lake Louisa, Florida. The county issued the permit in July 2019. Cemex expects to begin mining after completing the work necessary to prepare this site to become an active sand mine.
Brooksville Joint Venture
Additionally, through a joint venture with Vulcan Materials, the company owns a 50% interest in 4,280 acres of mixed-use property in Brooksville, Florida, a portion of which comprises a ground calcium mine that is mined by Vulcan Materials. The company entered into the joint venture in 2006 for the purpose of jointly owning and developing the land as a mixed-use community. In April 2011, the Florida Department of Community Affairs issued its final order approving the development of the project consisting of 5,800 residential dwelling units and over 600,000 square feet of commercial and 850,000 of light industrial uses. Zoning for the project was approved by the County in August 2012. Vulcan Materials still mines on the property and the company receives 100% of the royalty on all tons sold at the Brooksville property. In the year ended December 31, 2022, aggregate tons sold were approximately 244,000.
Other Properties
The company also owns an additional 36 acres of investment property in Brooksville, Florida.
Development Segment – Warehouse/Office Land
As of December 31, 2022, this segment owned the following future development parcels:
Six acres of horizontally developed land at Hollander Business Park in Baltimore City, Maryland with one 101,750 square feet industrial build-to-suit awaiting final certificate of occupancy.
54 acres of land that will be capable of supporting over 690,000 square feet of industrial product located at 1001 Old Philadelphia Road in Aberdeen, Maryland.
17 acres of land in Harford County, Maryland that can accommodate 259,000 square feet of industrial development.
170 acres of land in Cecil County, Maryland that can accommodate 900,000 square feet of industrial development.
Development Segment – Land Held for Investment or Sale
As of December 31, 2022, this segment was invested in the following development parcels:
Riverfront on the Anacostia: The Riverfront on the Anacostia property is a 5.8-acre parcel of real estate in Washington, D.C. that fronts the Anacostia River and is adjacent to the Washington Nationals Baseball Park. A revised Planned Unit Development (PUD) plan was approved in 2012 and permits the company to develop, in four phases, a four-building, mixed-use project, containing approximately 1,161,050 square feet. The approved development includes numerous publicly accessible open spaces and a waterfront esplanade along the Anacostia River. The first phase (now known as Dock 79), which was completed through a joint venture with MRP Realty, and which consisted of a single building with residential and retail uses, became the company’s fourth business segment in July 2017, now known as the Stabilized Joint Venture Segment. The second phase (now known as The Maren), also completed through a joint venture with MRP Realty and consists of a single building with residential and retail uses, was added to the Stabilized Joint Venture Segment effective March 31, 2021. The final two phases, Phase 3 and Phase 4 remain under a first-stage PUD approval expiring April 5, 2023, permitting 500,000 square feet of development.
Hampstead Trade Center: The Hampstead Trade Center property in Hampstead, Carroll County, Maryland is a 118-acre parcel located adjacent to the State Route 30 bypass. The parcel was previously zoned for industrial use, but the company’s request for rezoning for residential use was approved in December 2018. The company is fully engaged in the formal process of seeking PUD entitlements for this tract, which is now known as ‘Hampstead Overlook’.
Bryant Street: On December 24, 2018, the company and MRP Realty formed four partnerships to purchase and develop approximately five acres of land at 500 Rhode Island Ave NE, Washington, D.C. This property is the first phase of the Bryant Street Master Plan. The property is located in an Opportunity Zone, which provides tax benefits in the new communities development program as established by Congress in the Tax Cuts and Jobs Act of 2017. This first phase is a mixed-use development which supports 487 residential units and 91,661 square feet of first floor and stand-alone retail on approximately five acres of the roughly 12-acre site. Construction is complete and leasing efforts are under way.
The Verge: On December 20, 2019, the company and MRP formed a joint venture to acquire and develop a mixed-use project located at 1800 Half Street, Washington, D.C. This property is located in the Buzzard Point area of Washington, DC, less than half a mile downriver from Dock 79 and The Maren. It lies directly between the company’s two acres on the Anacostia under lease by Vulcan and Audi Field, the home stadium of the DC United. The project is located in an Opportunity Zone, which provides tax benefits in the new communities’ development program as established by Congress in the Tax Cuts and Jobs Act of 2017. The eleven-story structure has 344 apartments and 8,536 square feet of ground floor retail. Construction is complete and leasing is under way.
Square 664E: The company’s Square 664E property is approximately two acres situated on the Anacostia River at the base of South Capitol Street less than half a mile down river from the company’s Riverfront on the Anacostia property. This property is under lease to Vulcan Materials for use as a concrete batch plant through 2026. In March 2017, reconstruction of the bulkhead was completed in the anticipation of future high-rise development.
.408 Jackson: In December 2019, the company entered into a joint venture with a new partner, Woodfield Development, for the acquisition and development of a mixed-use project known as ‘.408 Jackson’ in Greenville, South Carolina. Woodfield specializes in Class-A multi-family, mixed-use developments primarily in the Carolinas and DC. The project is located across the street from Greenville’s minor league baseball stadium and holds 227 multi-family units and 4,539 square feet of retail space. It is located in an Opportunity Zone, which provides tax benefits in the new communities’ development program as established by Congress in the Tax Cuts and Jobs Act of 2017. The temporary certificate of occupancy was received in December 2022. Leasing began in the fourth quarter of 2022 with residential units 21.6% leased and 4.9% occupied at quarter end. Retail at this location is 100%. The company owns 40% of the development.
Windlass Run: In March 2016, the company entered into an agreement with St. Johns Properties Inc., a Baltimore development company, to jointly develop the remaining lands of the company’s Windlass Run Business Park, located in Middle River, Maryland, into a multi-building business park consisting of approximately 329,000 square feet of single-story office space. The project will take place in several phases, with construction of the first phase, which includes two office buildings and two retail buildings totaling 100,030-square-feet (inclusive of 27,950 retail), commenced in the fourth quarter of 2017 and was completed in January 2019. As of December 31, 2022, Phase I was 50.7% leased and 48.0% occupied, the subsequent phases will follow as each phase is stabilized.
Estero: In August 2022, the company invested a minority interest in a joint venture with Woodfield Development to purchase and develop 46 acres in Estero, FL into a mixed-use project with 554 multifamily units, 72,000 square feet of commercial space, 41,000 square feet of office space and a boutique 170-key hotel. While the joint venture attempts to rezone the property, the company will receive a preferred return of 8% with an option to roll its investment into equity in the vertical development or exit at that point.
Stabilized Joint Venture segment
As of December 31, 2022, this segment was invested in the following stabilized joint ventures:
Dock 79: Dock 79 (Phase I of the Riverfront on the Anacostia development) is a 305-unit residential apartment building with approximately 14,430 square feet of first floor retail space. The property is situated on approximately 2.1 acres of land located on Potomac Avenue in Washington, DC, across the street from the Nationals Park.
The Maren: The Maren (Phase II of the Riverfront on the Anacostia development) is a 264-unit residential apartment building with 6,758 square feet of retail space.
Riverside: Riverside Joint Venture in Greenville South Carolina is a joint venture with Woodfield Development, which includes a 200-unit residential apartment building. The company owns 40% of the venture.
History
FRP Holdings, Inc., a Florida corporation, was incorporated in 2014.
