Q4 2022 FRP Holdings Inc Earnings Call
Speaker 1: Thanks for watching!
Speaker 1: For.
Speaker 2: Good day everyone and welcome to today's earnings conference call. At this time all participants are in a listen only mode. Later you will have the opportunity to ask questions during the question and answer session. You may register to ask a question at any time by pressing the star and one on your touch down phone.
Speaker 2: Please note this call may be recorded and it is now my pleasure to turn the call over to John Baker. Please go ahead Good morning. I'm John Baker III, the Chief Financial Officer and Treasurer of FRP Holdings.
Speaker 3: And with me today are David DeVillet Jr., our president.
Speaker 3: John Milton, our Executive Vice President and General Counsel. John Kaufstein, our Chief Accounting Officer, and David DeViglia III, our Executive Vice President.
Speaker 3: These risks and uncertainties are listed in our SEC filings. 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. To supplement the financial results presented in accordance with the generally accepted accounting principles, FRP presents certain non-GAAP financial measures within the meaning of Regulation G promulgated by the Securities and Exchange Commission.
Speaker 3: The non-GAAP financial measures referenced in this call.
Speaker 3: is net operating income or NOI.
Speaker 3: versus a net loss of $592,000 or $0.06 per share during the same period last year.
Speaker 3: enamorization expense, a $678,000 decrease in operation expense, a $1.4 million increase in net investment income offset by a $311,000 increase in interest expense. Fourth quarter pro-rad NOI for all segments was $6,260,000 versus $3,690,000 in the same period last year for an increase of 58.2%.
Speaker 3: Highlights for calendar year 2022 include net income of...
Speaker 3: $4,565,000 or 48 cents per share versus $28,215,000 or $3 per share in 2021.
Speaker 3: The primary reason for the decrease in net income compared to 2021.
Speaker 3: Was because 2021 included a gain of $51.1 million on the re-measurement of investment in the Marin Real Estate Partnership, which is included in income before income taxes.
Speaker 3: This gain on remeasurement was mitigated by a $10.1 million provision for taxes and a $10.1 million contribution to non-controlling interest.
Speaker 3: and Revenue at 39.2% increase in NOI.
Speaker 4: those on the call this morning. Today I'd like to offer a bit of a slant on our financial results for this past quarter.
Speaker 4: Though our business segments are important silos in which to report and analyze company, operationally we have some overlap and synergies that can be difficult to follow using the reportable business segments that John referenced in his open remarks.
Speaker 4: So allow me to shine a light on the day-to-day at FRP using a more operational perspective versus GAAP.
Speaker 4: So basically we employ a four-pronged approach to our business.
Speaker 4: Since 2018, when we liquidated our legacy warehouse portfolio.
Speaker 4: In-house, which includes our industrial, commercial, and land development platform.
Speaker 4: These properties are developed, managed, and owned 100% by FRP.
Speaker 4: are developed, managed, and owned 100% by FRP. Then we have the mining and royalties.
Speaker 4: and fourth, Lending Ventures, where we are the principal capital source for residential land development activities and sales. Relative to our in-house industrial platform, or asset management, increased occupancies and rental rates combine to produce a substantial increase in net operating income for these operations from a negative $268,000 in Q4 of 2021 to a positive of $902,000 for Q4 2022. Cranberry Run Business Park in Aberdeen, Maryland in Aberdeen, Maryland became fully occupied in the first.
Speaker 4: 59,000 square foot warehouse building on our 17 acre parcel in the Paringman Industrial section of Barford County, Maryland. Not too different from our other assets in Aberdeen.
Speaker 4: Depending on market conditions and local government posture, construction on this project could begin as early as Q2 23.
Speaker 4: In the fall of 2022, we purchased 170 acres of industrial land in northeast Cecil County, Maryland.
Speaker 4: This plot of ground will hold a 900,000 square foot distribution warehouse.
Speaker 4: Initial pre-development activities have commenced and assuming favorable market conditions, we expect to construct this warehouse in 24 or 25.
Speaker 4: Finally, in Q3 of 22, we completed the annexation process of the 55 acres we own in Hartford County, Maryland.
Speaker 4: that was purchased in 2020. Entitlements in building design to create up to $2,675,000 square feet of warehouse product will follow in 2024 with construction to follow in 25 or 26. Exifting landlaces for the storage of trailers on site.
Speaker 4: help to offsite our carrying entitlement costs on this process.
Speaker 4: Finally, completion of these three aforementioned land development projects plus the final warehouse at Hollander will add just shy of 2 million square feet of additional warehouse product to our industrial platform.
Speaker 4: that when added to the other assets in operation at Hollander Business Park and Cranberry, we'll total nearly 2.4 million square feet.
Speaker 4: With the increased occupancy at the new buildings at Hollander and the fully occupied Cranberry Run Business Park, NOI in this segment should trend positively.
Speaker 4: Division saw total revenues for the quarter of $2.9 million versus $2.267,000 in the same period last year.
Speaker 4: saw total revenues for the quarter of $2.9 million versus $2,267,000 in the same period last year. This is the most revenue in any quarter ever.
Speaker 4: for this segment. Operating profit was $2,452,000, an increase of $485,000 over the same period last year.
Speaker 4: NLI in this segment was $2,779,000, up 30% over Q4 2021. Moving on to our third party joint ventures.
Speaker 4: Currently, we maintain both stabilized and projects under development with three distinct partners.
Speaker 4: MRP Realty, Woodfield Development.
Speaker 4: and St. John's properties. Projects that reach 90% occupancy for a period of 90 days are considered stabilized, otherwise they remain in development.
Speaker 4: as of the end of the year.
Speaker 4: 2022, our ZB program included seven mixed-use projects.
Speaker 4: six apartment retail and one office retail project in various stages of development and operation.
Speaker 4: Concentrating on the apartment retail projects I offer the following highlights. Four apartment retail projects are located in Washington, D.C.
Speaker 4: where MRP is our joint venture partner. These projects are DOC 79, Marin, Bryant, Street Phase 1, and Burge.
Speaker 4: Doc 79 and Marin remain better than 93% occupied on average for the quarter.
Speaker 4: And with the last retail suite of DOC 79 being leased prior to the end of the year, the retail component of both buildings is now fully leased.
Speaker 4: Bryant Street Phase 1, our transit oriented mixed use project just north of Union Station.
Speaker 4: In DC, saw its total residential occupancy increased to 89.5% and retail occupancy remained at 71.4% as of your end.
Speaker 4: Several small retail tenants that will make up our food hall concepts are due to open for business at Bryan Street over the next several weeks, helping to bolster the retail component, which has been severely curtailed by an elongated permitting timeframe and supply chain issues.
Speaker 4: Our newest project in DC, Verge, welcomed its first tenant just before Thanksgiving and at quarter's end was 13.7%.
Speaker 4: Leased and 9.6% occupied.
Speaker 4: Nearly half of the 84,000, excuse me, 84, 100 square feet of retail space at birds is least with the zone under one.
Speaker 4: Our two apartment retail projects in Greenville, South Carolina with woodfield is our development partner preparing quite well.
Speaker 4: Riverside's 200 apartments were 18 months old in February . Joining Doc and Marin is our third stabilized asset in Q3 or 22. Riverside was 92.5% occupied and 98% leased as of the end of the fourth quarter.
Speaker 4: For OA Jackson's 227 apartments were placed in service just before the end of the year and its 100th apartment went under lease on March 1.
Speaker 4: 408's 4,500 square feet of retail is 100% free lease with interior construction now under way.
Speaker 4: Greenville is an exciting secondary market in the Southern Sun Belt. The city is sending accelerating growth and we continue to look out for additional opportunities in this part of the country.
Speaker 4: So to summarize, at year 10, the 6th Department retail projects, including Doc, 79, Marin, Bryan Street, Burge, Riverside, and 408 Jackson.
Speaker 4: rental rate increases, along with lease up of the place in service projects, help to increase FRP's share of the NLI for these six projects to 2.6 million in the fourth quarter 22, a 29% increase over the same period last year.
Speaker 4: Finally, as a post-cript to our third party joint venture program, I have two items to mention.
Speaker 4: Our Hickory Creek project, a 294 DST investment in Richmond, Virginia, was sold in the fourth quarter of 2022, with sale proceeds to the company amounting to $8.83 billion on an initial investment of $6 million.
Speaker 4: Total distributions for the year prior to sale total additional $332,000. Also in November we entered into a new partnership with Stewart Investment Company and our existing partners of over a decade and more of a realty. For the development of up to 10 mixed-use projects in the Anacostia and Buzzardcoin submarkets of Southeast Washington DC, these projects will come from four parcels owned by Stewart Charco- UTTrigger S&U, one of the leaders of Doppler went on for over 100 years since the founding of the project to plan the incomplete year completely, so the launch contract was limited by the Federal cheque soldering company of Robert Stewart died after they had won the sale of gold
Speaker 4: phases three and four of our riverfront development, our site currently leased to Vulcan Materials, and the existing mixed-use department retail properties, DOC, Marin, and Verge, owned by MRP and FRP. Upon completion, these 10 projects will comprise over...
Speaker 4: control a unique waterfront destination among multiple projects with the freedom to pursue development opportunities that are unavailable to individual parcels.
Speaker 4: Together these parcels represent a record of mile of the unenrupted water for along the Anacostia River at the Southern entrance to our nation's council.
Speaker 4: As part of the newly formed partnership, we, along with our partner, MRP, sold a 20% tenant and common interest in both Doc 79 and Marin to Stewart Investment Company.
Speaker 4: The gross sale amounted to $65.3 million, or the equivalent of over $570,000 per apartment unit. $44.5 million of which represented FRP's share of the sale.
Speaker 4: Pre-development activities on Phase 1, Conceftionally planned for 500 plus apartments in 10,000 square feet retail, located on one of the four parcels that Stewart brings to the venture, has commenced, and we anticipate a shovel ready project sometime in late 23 for early 24. Looking on to our last operational enterprise.
Speaker 4: return of 20 percent above which a profit induced waterfall determines the flannel split of proceeds. As the Viren, the horizontal development was complete at 135 of the total 187 loss, all of which are under contract or sale.
Speaker 4: have been taken down with $16.6 million inclusive of interest having been returned to FRP as of 1231-22. Our current funding venture now known as Aberdeen Overlook is a 110-acre residential development project in Aberdeen Maryland.
Speaker 4: consisting of 344 lots. Subsequent to year end, entitlements were complete, which was a condition precedent to the purchase of the land, which occurred in January . We've committed $31.1 billion in funding under similar terms to Amber Ridge to this program.
Speaker 4: We have a contract of sale for all 344 lots from a national home builder inclusive of 222 can have and 122 single family loss that included a deposit of $3.3 million.
Speaker 4: Needless to say, we're watching this project closely as home building throughout the country is slipped dramatically. But we do have certain safeguards in place, and the man in the fourth quarter in this particular sub market far out way to supply.
Speaker 4: In March 2020, when the world shut down, FRP maintained a portfolio of 510,000 square feet of operating industrial, office, and retail space, and 599 apartments.
Speaker 4: Today FRP has over 760,000 square feet of operating industrial office and retail space and 1,827 operating apartment units.
Speaker 4: five acres of land in our development pipeline, this board over three million square feet of additional development. FRP is at the dawn of an era of growth, all made possible by the breadth of opportunity we have been able to cultivate through the leveraging of our financial foundation.
Speaker 4: which uniquely enables us to capitalize on great projects and sometimes make hard decisions not to.
Speaker 3: Thank you, and I'll now turn the call back to John . Thank you, David. Not to put too fine a point on it, but 2022 was a big, big year for the company.
Speaker 3: Financially, in 2022, we saw meaningful increases across all operating segments.
Speaker 3: Financially in 2022, we saw meaningful increases across all operating segments. With every segment having its biggest year for revenue.
Speaker 3: operating profit and NOI since the asset sale in 2018.
Speaker 3: Operational in 2022, all of our asset management properties are fully leased.
Speaker 3: and we purchased a new mining royalty property which is now our biggest royalty producer.
Speaker 3: Strategically, with our new partnership with Stewart and MRP, we have the ability to build something really, really special in one of the great cities of the world.
Speaker 3: It's a really amazing opportunity.
Speaker 3: work. The next 10 to 15 years are going to transform this company.
Speaker 3: But it all started in 2022.
Speaker 2: Now, at this point we're happy to open up the call for any questions that any of you might have. I have to sign through to ask a question. Please press star and one on your touchtone phone. You may withdraw yourself from the question queue at any time by pressing the star and two.
Speaker 2: Once again for everyone that is star and one to join the question queue.
Speaker 2: And our first question comes from...
Speaker 2: Emirator, jesta.
Speaker 2: Hello, Wuntia from Numantia. Your line is open.
Speaker 5: Hi guys, it's Samarito again from Spain. I'm interested on the cell of your interest of the Marin and Dog 79 because if I'm correct
Speaker 5: There were two mortgages of $180 million.
Speaker 5: on both buildings.
Speaker 5: buildings so
Speaker 5: So your net interest, I think it's more like a hundred million dollars if I incorrect, so the twenty percent is
Speaker 5: 20 million dollars.
Speaker 5: 2018 ????? 24 24
Speaker 5: The 44 million, but 20 million dollars net of mortgages.
Speaker 5: You have to do an FRP. Yeah. Okay, thank you. Another question.
Speaker 5: What's the growth of the price per ton of aggregates without the new acquisition?
Speaker 6: Uhh nopey
Speaker 3: We still would have had a bigger year than last year, but it would have been like...
Speaker 3: not 16% more like it was, but you still saw volume and some price growth even without the new acquisition.
Speaker 3: 16% more like it was, but you still saw volume and some price growth even without the new acquisition. Okay. Understood. Thank you.
Speaker 2: And our next question comes from Bill Chin from Ryzone Partners. Your line is open.
Speaker 7: Hi guys. Morning Bill, how are you? Good. Good.
Speaker 7: So I hope you guys are getting some nice weather there as well. I um...
Speaker 7: I had a bunch of questions written down and then now I'm blank. But as I do the math for the cash that you have right now,
Speaker 7: And I sat down and did a NAP calculation, a private market valuation for the company.
Speaker 7: And I know you guys previously when you buy last year, you want to be stealing it.
Speaker 7: And this does have to do with the fact that the aggregate business is such a good business and all these projects are working.
Speaker 7: you know, that they're leasing up, they're stabilizing, they're performing well. I'm kind of getting to a nab that's, you know, in the high double digits, low triple digits, and you know, at where you trade at today, if you were to buy back shares, and that's my definition of stealing it, stealing shares.
Speaker 7: And also, you know, I voice this, you know, in the past, in the conversations, I mean, I would just love to own more of the aggregate business and the waterfronts. I mean, you know, to the extent that we do buy that shares.
Speaker 7: To own more of this incredible aggregate business, which is nothing that I've seen anywhere in any of my other investments, I'm just saying from someone who owns a good chunk of, meaningful position in my portfolio.
Speaker 7: I'm comfortable only more of the aggregate business and the you know the waterfront and DC and you're creating those you know projects. You know just just letting you guys know that that you know from one long time shareholders perspective. I have no problem if we wind up you know it is every.
Speaker 7: 50s with a private market value of almost 100. Why I think that's the sense with definition of stealing it.
Speaker 7: when we buy back shares. This observation also comes at just the cash balance.
Speaker 7: is so high right now and then I've done a fairly exhaustive analysis on where the cash needs are and also what some of the stabilized assets were starting to generate in terms of cash flow. So I take all of that into consideration. I know this is long and winded, but this is something that I've been thinking about a lot.
Speaker 7: station that that there's Is that contract is there a contract or is that just a verbal agreement to buy those lots? Because given everything that we've been airing I'm a little bit surprised that there is a buyer for all those lots rather than partial takedowns of those locks Could you provide a little bit more detail there? Sure. Hi Bill. Dave DuVillier.
Speaker 4: Yeah, there is a contract to sail with a National Home Builder. They have supplied a $3.2 million non-refundable deposit.
Speaker 4: they're gonna buy the lots down over a period of time, and there's a stipulated amount to each quarter. And of the 344 lots, there's about four, or maybe even as many as five different types of price points, so.
Speaker 4: Even though it's a lot of lots, they're kind of broken down into five different types. So that'll enable them to drop down quicker. But now this whole program is fully under contract.
Speaker 4: So we're off to the races. I know that as you say, home building throughout the country is not the greatest and we certainly are watching it closely. But the interesting thing here is that the supply is virtually nonexistent where we are. And so...
Speaker 7: The curve is in such great shape as it relates to demand or supply. That certainly does help us in this regard. God, you know, that's great color. And have we actually had the company actually advance any of the funding for this project yet? I mean, I don't.
Speaker 4: I don't think I saw any draw on the capital. Yes, we have. After the quarter, the idea was the, the, some of it had been advanced before the end of the year, about a million and a half dollars. We went through all of the entitlements, or excuse me, our borrow, went through all of the entitlements.
Speaker 4: received record plot, which was a condition precedent to buying the raw land which was done in early January .
Speaker 7: Okay, got you. Thank you. Well, that's great color and thank you. Thank you very much for that.
Speaker 7: the on the on the on the project on the warehouse project that may go may may you know
Speaker 7: start construction in Q2. What, you know, that's a, I mean, I guess at this point, if we were going to build it, that would be a spec bill. Like, what would be, give you the Goa No Go on that project? I know like the rents and the occupancy, they're fairly attractive right now, but I...
Speaker 4: for some key some considerations there but what we look for is we do a market study.
Speaker 4: The occupants, excuse me, the vacancies are very low right now. The rent have not moved down at all. Actually, the flat may actually take up a little bit for this type of a building. So, and actually some of our construction costs.
Speaker 4: for the first time and I can't remember how long some of those costs actually went down when we first bid the job out in October . Some of the prices actually went down.
Speaker 7: We don't want to wait too long because of the weather here. We don't want to be building this thing over the weather. So we'll see you over the next 60 days as to the direction we want to take. Gotcha. Gotcha. And one last question. You mentioned that there's a wireless storage on the...
Speaker 7: Is there an opportunity given that we're sitting on 20,000 acres of land in Georgia and Florida on those pits to kind of set aside some of these parcels for industrial outdoor storage because there are sites that where it is you know large
Speaker 7: parcels of land for parking, you know, of trucks and service vehicles have become harder to come by. I mean, is that an opportunity that the company is thinking about? Is there demand for them in those markets, in those 12 or 13 sites down in Georgia and Florida? And even in Manassas, right?
Speaker 7: Is that a potential there? Is there some potential there?
Speaker 3: Probably not on the mining sites, but it will just because that kind of falls under the purview of...
Speaker 3: of our operating tenants and I don't think they'd want a bunch of
Speaker 3: And I don't think they'd want a bunch of, you know.
Speaker 3: and building equipment, interfering with their ability to minor and get around the site.
Speaker 7: Got you. Got you. Is there any sites where their mining is so far away? Because like some of these sites are so big. Like I understand it if it's a 90-hundred acre site but if you know some of these sites are a thousand to two thousand acres and like is there some opportunity where?
Speaker 7: we could go to them and maybe it's like a revenue split or something. We're very far away from where they're actually actively mining. Or is that just like how much heading forward?
Speaker 3: They might consider it too much. I think obviously I never heard Sask and I think that's a really interesting suggestion. You probably only...
Speaker 3: have the potential for it in sites closer to cities and rural Florida that might not be.
Speaker 3: very robust business, but potentially outside of Atlanta.
Speaker 3: We'd have to just dig in and see what each site could support and then gauge our tenant's appetite for
Speaker 3: you know, that kind of deal.
Speaker 3: They probably wouldn't be gung ho about it unless there was something for them, but 50% of something is better than 100% and nothing. So I think that's a really interesting suggestion. Thank you.
Speaker 7: No problem. No problem.
Speaker 7: the hurricane that went through Fort Myer, I think when I saw him talk, and that will likely lead to more mining out of the Fort Myer site, which means the lake will be, I guess the lots will be ready, I guess, a little sooner than before.
Speaker 7: We still, unlike 2026, 2027 kind of timeline for those sites could be ready for like that phase one to be completed and then those last potentially being ready for sale.
Speaker 3: That's when the, we expect them to be done mining with that phase. I don't, I really could say that the locks are going to be 100% ready by then. Right. That is.
Speaker 3: Vulcan is on pace to...
Speaker 3: to be done with that phase of the quarry. Even without the hurricane, they were...
Speaker 3: mining that section of the quarries fast as humanly possible.
Speaker 3: I think they want to be done with that side of...
Speaker 3: of that mine prior to construction on the Alico Road extension, which is a
Speaker 3: connecting one part of Fort Myers to another. It's a huge priority for the county.
Speaker 3: They don't want to have to be, you know, hauling Brock across a road construction site. They don't have to.
Speaker 3: I think demand in that area was fairly robust even prior to the hurricane and obviously trying to get done before the road extension. They were going to rip through that as quick as they could. I think maybe the increased demand isn't going to...
Speaker 3: Move them along any faster, but it probably will affect price.
Speaker 3: move them along any faster but it probably will affect price that's you that's you
Speaker 2: Thank you. I have no further questions. Thank you, gentlemen. Thanks Bill. Our next question comes from Stephen Ferrell from Auburnheimer Clothes.
Speaker 2: Your line is open. Morning. Morning Stephen, how are you?
Speaker 8: I'm doing well. I just have a few quick questions. You talked about occupancy rates at the Brian Street. Can you talk a little bit on how you juggle the rental rates versus...
Speaker 8: and getting heads in the apartments there? Well, we are
Speaker 4: We operate through obviously our property managers software programs and those units are individually priced literally every day.
Speaker 4: So pricing can change effectively in a 24-hour period, and that's kind of what we do. The idea, obviously, to your comment about heads in beds, when you first start out, you know, also there's a lot of factors that go into it. One is the time of year when we've opened up, for example, we opened up birds.
Speaker 4: and late November . Couldn't ask for a worse time to open up just by virtue of the weather and that sort of thing. And so that we were starting to put some discounts on the face rate for those. They're starting to come into the building. We're starting to see some warm weather. The cherry blossoms are supposed to come out and so the rents are going to start.
Speaker 8: rates were quite a bit lower than the Marin. Do you think that's something that'll pick up as it gets warmer? When you say renewal rates, you mean that the numbers or the dollars?
Speaker 8: At the percentage, I think the renewal rate was 42% of expiring leases versus 62.
Speaker 4: Right, we had just depends on the timing of what leases expire. We did have several people come in that are actually we're not going to other apartments. They were leaving DC or looking to buy a house or different reasons. We weren't losing them too.
Speaker 4: to the competition. And it's pretty cyclical. We usually try to run about 50 to 55% on a success rate in order to try to maximize the...
Speaker 3: the profitability of the units. Steven, I think one factor that may explain for the discrepancy between the Marin and dock renewal rates is...
Speaker 3: You think about when each building came online.
Speaker 3: Doc got the full force of rental freezes on renewals. Whereas, you know, the mayor had been open for...
Speaker 3: You know, a year, maybe a year and a half into COVID before renewals started becoming an issue. So I think...
Speaker 8: Part of it could be explained by...
Speaker 3: In Doc 79, tenants didn't have to worry about rent renewals, rent increases on renewals for a much longer period of time than anyone at the Marin. And so, you know, the Marin was probably a little bit.
Speaker 3: close to the market and I think there's some sticker shock for tenants as you know, alright, well wine and tomatoes and some herbs, we burnedding. So, the mortgage could be adjusted in the vast sum and it is almost in Fraud. So, the mortgage could be adjusted in the vast sum and it is almost in Fraud.
Speaker 4: market as opposed to frozen. One last piece of that too is depending on which ones come up for renewal. If they're the affordable housing units, the people that are living there in some cases their income gets too high and they don't qualify for the affordable units and they got to go.
Speaker 8: So that could play into it as far as well. And at the verge you mentioned offering some discounts, but brands are picking up where are they now kind of versus DAC 79 and also just in the Marin and then also just versus what your expectations were.
Speaker 4: Well, let's see. First of all, the...
Speaker 4: The Marin is probably one of the more expensive units that we have, followed by Dock. Burge is running about right now, probably about 10% less. You know, the neighborhood is still under development more so than Dock and Marin.
Speaker 4: But we're pretty optimistic about where things are going, especially when the spring hits, but it's still a little bit too early to tell considering the amount of people that we've got, you know, leased up and occupying. That'll be a better question to ask, you know, during the spring, we'll have a much better indication of what things are.
Speaker 8: When do you anticipate financing, permanent or temporary financing on the verge? What would that look like? I guess, same question with Brian Street. Well, obviously we'd like to go to permanent financing.
Speaker 4: to get a little bit further into the spring. The retail function has been curtailed by, as I said in my opening remarks. You know, the DC government has been very, very, very difficult to work with as it relates to getting the intended improvement permits.
Speaker 4: I mean almost to the point where we're wondering whether they even want to have tennis in Washington DC, but we're getting through it And the supply chain issues with those type of specialty things that go into restaurants and tenant improvements have been tough as well. So we'd like to get into Bryant probably sometime
Speaker 4: You know, third quarter maybe. Virge, we've got 344 units. It's going to be a while before we get that place to a point where it would be stabilized. So it's probably going to be running under that.
Speaker 4: under that construction line at least through probably most of this year.
Speaker 8: The last question on the residential side, are the partners in South Carolina, what are they seeing in terms of demand down there and is there any additional opportunities that they've been coming across?
Speaker 4: We've been looking at some. I think I mentioned that we've actually I was there last week with them we've got a couple of some our eyes on some things we are as I said excited about that part of the country as you can see from the two projects that we have we leased we're about 44 45 percent leased at 408 Jackson and we just opened up in December
Speaker 8: The concessions have been virtually non-existent in both of those projects down there. So we're certainly bullish on the area and have our eyes open. Thank you. And last question. Bill kind of talked about the cash flows and...
Speaker 8: Do you have a ballpark on the dollar value you're going to spend on development activities?
Speaker 4: in 2023 between warehouses and the Stewart deal? Well, I'll take a run at that first, John . I don't have my numbers here in front of me, but obviously, nothing has to be done. We don't want to do anything just for the sake of doing it. For example, the warehouse that we have.
Speaker 4: on the plan table, the 260,000 square foot warehouse. If we don't like the looks of the market, or for some reason something comes bumping the night, we don't feel like it's the right time, then we'll pass and just push it off.
Speaker 4: So that's probably, that's anywhere from 10 to $17 million over the next 12 months. We also have phase one of the Stuart MRP investment that will maybe shovel ready in the fourth quarter of this year, but...
Speaker 4: You know, based on interest rates and the construction costs, we don't know that that's going to be a viable project, at least in our minds, and that's what's light as well. So it really depends on the market. We don't have to be building something just for the sake of building it. We got plenty to do without it. So it depends on the...
Speaker 8: you know, on the winds of the economic winds over the next, you know, six to 12 months. And with the Stuart partnership, you mentioned the environment is not supportive. You can kind of delay that. There was a provision for building every four years. Is that something that's flexible? And...
Speaker 8: Yes, yes, very much so. Do you need to at least do due diligence every four years or break ground?
Speaker 4: Well, you know, when you get these permits or get these approvals, they're only good for a certain period of time. So it's a, it's, it's a, you know, it's kind of a push full. We had to use something kind of as a framework for which to, you know, to create this program. So it's, it's.
Speaker 4: It's so massive and actually so exciting. And we're all in this together. So Stuart is going to stay in as a partner just like MRP and FRP. And nobody wants to go into a project unless they feel really good about it up front. So kind of up to us, you know, the partners to determine when and if we want to start a new one.
Speaker 8: And how would that affect additional developments there? Would that push back the second building or development? Second building, I don't understand. What do you mean second building? If we were going to do Stuart Phase II, does delaying for a year or so?
Speaker 4: delay the timeline of everything. Pushes everything back. Everything is fungible. There's no exact science to this. We will tie one project in with the next if there's some overriding reason to do more than one at the same time, which I don't know what that is, but.
Speaker 2: We're very flexible as to how and when we do these. That's good. Thank you, guys. Our next question is a follow-up from Emitro Quintana from Numeeta. Good morning, it's the hammerito again. I will turn the wander in.
Speaker 5: per se on a very detailed sum of the parts.
Speaker 3: Emory, we are pointing on doing an investor day and details of that will come out over the next couple months, but that was an opportunity that we really, really enjoyed. And I don't know if...
Speaker 3: were yet the size of a company that demands one every year, but I think every two years is about right for now. And that was a really special event and so much fun to present the properties for Sando investors. And I don't think that's...
Speaker 3: That's something we should pass up. So short answer to your question. Yes, we are planning on doing an investor day. We'll get the details out to you all soon.
Speaker 3: On your the Navin analysis, I mean very, very, you know, fortunate that our investors had the faith and the same faith in our assets that we do.
Speaker 3: We don't have a concerted share buyback plan right now. Obviously we love the assets that we have.
Speaker 3: But whether it's a dividend or share buybacks, there is a plan for all this money, at least for now.
Speaker 3: And there's our belief because we're a growing company that the cash and cash equivalents that we have are best put to use in the form of new investments or as a capital cushion to protect the investments that we already have.
Speaker 3: We're going to continue to monitor it the same way you all are. If we come to the same conclusion that it's trading at such a steep discount that we can afford to buy fasted, we might nibble here and there, but it's not...
Speaker 3: continue to monitor it the same way you all are and if we come to the same conclusion that it's trading at such a steep discount that we can't afford to bypass it, we might nibble here and there but it's not going to be a, you know, um...
Speaker 3: A steady, concerted, you know, planned to buy back shares.
Speaker 2: And it does appear that there are no further questions over the line at this time. All right. Well, thank you guys so much for your interest in the company. We're going to get back to work to grow Cheryl to value. Thank you.
Speaker 2: This does conclude today's program. Thank you for your participation. You may disconnect at any time.
Speaker 1: The that.
Speaker 1: I'll see you next time.
Speaker 1: The.
Speaker 1: The.
Speaker 1: I'll see you guys next time.
Speaker 1: I C this time.
Speaker 1: And off.