FRP HOLDINGS, INC.

FRP Holdings, Inc. is a holding company engaged in the real estate business, operating through four reportable segments: the Industrial and Commercial Segment, the Mining Royalty Lands Segment, the Development Segment, and the Multifamily Segment. The Company's properties are located in the Mid-Atlantic and southeastern United States, consisting of residential/mixed-use apartments in Washington, D.C., Greenville, SC, and Florida; warehouse or office properties in Maryland, New Jersey and Florida either existing or under development; mining royalty lands, some of which will have second lives as development properties; and properties held for sale.

The Company competes with numerous developers, owners and operators of real estate, many of whom own properties similar to ours in the same submarkets in which our properties are located. Price, location, rental space availability, flexibility of design and property management services are the major factors that affect competition. In the Mining Royalty Lands Segment, one tenant, Vulcan Materials Company, accounted for 26% ¹ of the Company's consolidated revenues in 2025. The Company's current mining tenants are Vulcan Materials, Martin Marietta, Cemex, Quikrete and The Concrete Company.

The Company generates revenue through four segments: leasing and management of industrial and commercial properties; leasing and management of mining royalty land; real property acquisition, entitlement, development and construction primarily for apartment, retail, industrial, and office; and management of mixed-use residential/retail properties owned through joint ventures. Revenues are derived from lease revenue, mining royalty and rents, and joint venture management fee revenue. The Company's residential units typically lease for 12 – 15 month lease terms, retail leases are typically 10 - 15 year leases, and industrial warehouses typically lease for terms ranging from 3 – 10 years.

The Industrial and Commercial Segment owns, leases and manages in-service commercial properties, including ten warehouses in three business parks, an office building partially occupied by the Company, and two ground leases all wholly owned by the Company. As of December 31, 2025, this segment includes ten buildings at five commercial properties: 34 Loveton Circle (33,708 square feet, 59.3% occupied), 155 E. 21st Street (under lease through March 2026), Cranberry Run Business Park (five industrial buildings totaling 267,737 square feet, 43.4% leased), Hollander 95 Business Park (three industrial buildings totaling 247,340 square feet, 100.0% leased and occupied), and 755 Chelsea Road (a 258,279 square foot speculative industrial building). The Mining Royalty Lands Segment owns several properties totaling approximately 16,640 acres ² currently under lease for mining rents or royalties, excluding the 4,280 acres ³ owned in the Brooksville joint venture 50/50 with Vulcan Materials. In the fiscal years ended December 31, 2025, 2024 and 2023, aggregate tons sold with respect to the Company's mining properties were approximately 8,845,000 ⁴, 9,351,000 ⁵ and 9,569,000 ⁶, respectively. The Development Segment owns and is continuously assessing the highest and best use of several parcels of land in various stages of development, including Riverfront on the Anacostia (a 5.8-acre parcel), Square 664E (approximately two acres), Hampstead Trade Center (a 118-acre parcel), and others. The Multifamily Segment includes joint ventures which own, lease and manage buildings that have met initial lease-up criteria, including Dock 79 (305-unit residential apartment building), The Maren (264 residential units), Riverside (200-unit residential apartment project), Bryant Street (487 residential units), .408 Jackson (227 multifamily units), and The Verge (344 apartments).

On October 21, 2025, the Company completed the closing on its Purchase and Sales Agreement to acquire the business operations and development pipeline of Altman Logistics Properties, LLC, an operating platform of BBX Capital. In conjunction with the acquisition, the Company hired six of Altman Logistics' employees. The acquisition included minority interests in a portfolio of institutional-grade industrial assets under various stages of development as well as a contract for the purchase of an industrial land parcel. During the fourth quarter of 2025, the Company repurchased 20,281 ⁷ shares at an average price of $22.89 ⁸ per share, for a total of $464,000 ⁹. The Company also entered into a new joint venture agreement with Strategic Real Estate Partners on July 23, 2025 to develop 377,892 ¹⁰ square feet in two warehouses in Lake County, Florida.

For the fiscal year ended December 31, 2025, total revenues were $42,846,000 ¹¹ compared to $41,774,000 ¹² in fiscal 2024, an increase of 2.6% ¹³. Net income attributable to the Company was $3,330,000 ¹⁴ versus $6,385,000 ¹⁵ in the prior year, a decrease of 47.8% ¹⁶. Diluted earnings per share were $0.18 ¹⁷ compared to $0.34 ¹⁸ in fiscal 2024. Operating profit was $7,028,000 ¹⁹ compared to $11,704,000 ²⁰ in the prior year, a decrease of 40.0% ²¹. Total assets were $735,145,000 ²² as of December 31, 2025, compared to $728,485,000 ²³ as of December 31, 2024.

The Company's primary growth vector is development, particularly industrial development, which management describes as the primary engine for long-term value creation. The expanded industrial pipeline is set to deliver value through a merchant development program acquired from the purchase of Altman Logistics Properties, which will generate cash from sales upon stabilization. Additionally, industrial assets under development in Lakeland and Broward County, FL and Minneola, FL, totaling 762,085 ²⁴ square feet of new, Class A industrial space, are expected to represent approximately $9.3 million ²⁵ in NOI attributable to the Company when they reach stabilization in approximately 2028 ²⁶. The Company also expects to generate value through increasing same store industrial and commercial NOI by resolving current industrial vacancies of approximately 400,000 ²⁷ square feet, which at current market rents represents approximately $3-3.5 million ²⁸ in NOI improvement with minimal capex.

The acquisition of the Altman Logistics Properties platform expands the Company's operating footprint into Florida and New Jersey, markets with strong demographic trends, logistics demand, and long-term capital interest. The acquisition strengthened internal talent base, broadened the development pipeline, and expanded relationships with equity partners, lenders, and operating counterparties. The Company is now able to execute both in-house development as well as fee development, or a hybrid of the two, and generate equity for shareholders rather than giving it up. The combination of development fees and loss in equity on a project can range from 3-15% ²⁹ of total project costs.

Management expects that any growth in NOI in 2026 will be marginal, and Funds From Operations (FFO) will be down due to increased expenses, depreciation, and interest expense from the Altman acquisition. The Company expects to invest cash of $75 million ³⁰ into existing real estate holdings and joint ventures during 2026 and $114 million ³¹ beyond 2026 for projects currently in the pipeline, with such capital being funded from cash and investments on hand, cash generated from operations, property sales, distributions from joint ventures, or borrowings through credit facilities.

The Company expects to invest cash of $75 million ³² into existing real estate holdings and joint ventures during 2026 and $114 million ³³ beyond 2026 for projects currently in the pipeline. The Company's capital allocation strategy includes funding these investments from cash and investments on hand, cash generated from operations, property sales, distributions from joint ventures, or borrowings through credit facilities. As of December 31, 2025, the Company had $105,361,000 ³⁴ of cash, cash equivalents, and restricted cash, and $49,590,000 ³⁵ available to borrow under its $50 million ³⁶ Wells Fargo revolver.

Management identified several headwinds and constraints, including elevated interest rates, new and expanded tariffs, a decline in consumer confidence and spending, inflationary conditions that have increased the costs of operating the businesses, and widespread supply chain disruptions. These factors have and could continue to adversely impact gross margins, operating margins, and results. Higher interest rates have increased the cost of the Company's outstanding indebtedness and the costs of financing for new development projects, and have had an adverse impact on the availability of financing and the anticipated profitability of development projects. The Company also faces risks from the cyclical nature of the construction industry, which affects the Mining Royalty Lands Segment, and from the geographic concentration of properties in the Baltimore area, Washington, D.C., and Greenville, South Carolina.

The Company faces material risks from current economic and market conditions, including elevated interest rates, new and expanded tariffs, and inflationary conditions that have increased costs of operating businesses and could adversely impact gross margins and operating results. Higher interest rates have increased the cost of the Company's outstanding consolidated indebtedness of $193,958,000 ³⁷ secured by developed real estate properties having a carrying value of $276,460,000 ³⁸, and have adversely impacted the availability of financing and anticipated profitability of development projects. The Company's revenues depend in part on construction sector activity, which tends to be cyclical, and the Mining Royalty Lands Segment's revenues are derived from royalties on construction aggregates mined on properties totaling approximately 16,640 acres ³⁹. A significant portion of operations are conducted through joint ventures, which may lead to disagreements with partners and expose the Company to liability under completion guarantees. The geographic concentration of properties in the Baltimore area, Washington, D.C., and Greenville, South Carolina makes the business more vulnerable to economic downturns in those specific markets. Additionally, the Company faces environmental liability risks, particularly at the Riverfront on the Anacostia development site where preliminary environmental testing has indicated the presence of contaminated material that will have to be specially handled in excavation in conjunction with construction.

Management's message to shareholders acknowledges that 2025 was a transitional financial year, with pro rata NOI growth moderating and earnings declining as several multifamily assets moved beyond lease-up, portions of the industrial portfolio entered a new leasing cycle, and broader supply-demand dynamics created headwinds for rent growth and leasing velocity. Management states that any growth in NOI in 2026 will be marginal and FFO will be down. The key strategic priorities emphasized are: (1) durable cash flow from mining royalties, (2) operational execution and same-store growth, and (3) development and disciplined capital deployment. Management expressed confidence that the market will ultimately recognize the value the Company is set to create with same store growth and the development pipeline.