Q2 2025 The St. Joe Co Earnings Call
Operator: Joe Company second quarter 2025 earnings conference. At this time, all participants are in a listen only mode. After the speaker's presentation, there will be a question and answer session.
Good day, and thank you for standing by, welcome to the St. Joe company, second quarter 2025 earnings conference call.
At this time, all participants are in a listen-only mode.
Operator: If you wish to ask a question via the webcast, please use the Q&A box available on the webcast link at any time during the Please be advised that today's conference is also being I would now like to hand the conference over to George Gonzalez, President, CEO, and Chairman of the.
After the speaker's presentation, there will be a question and answer session.
if you wish to ask a question via the webcast, please use the Q&A Box available on the webcast Link at any time during the conference
Please be advised that today's conference is also being recorded.
Operator: Please go ahead. Thank you.
George Gonzalez: Good afternoon, everyone. I am George Gonzalez, President, CEO and Chairman of the St. Joe Company. It is my pleasure to welcome you to the quarterly earnings call of the St. Joe Company. Yesterday afternoon, after the market closed, we issued our 2025 second quarter earnings press release. which can be found in the investor relations portions of our website at joe.com As a reminder, in a housekeeping matter in the top right hand corner of your screen, the word submitted question are visible. Clicking that text will take you to the section where you can type in your question and then click submit for later in this call.
Speaker Change: I would now like to hand the conference over to Jorge Gonzalez president CEO and chairman of the St. Joe Company. Please go ahead.
Thank you. Good afternoon everyone. I am Jorge Gonzalez, president and CEO and chairman of the St. Joe company. It is my pleasure to welcome you to the quarterly earnings call of the St. Joe company yesterday afternoon, after the market closed we issued our 2025 second quarter, earnings press release.
Speaker Change: Which can be found in the investor relations portions of our website at joe.com.
Speaker Change: As a reminder and a housekeeping. Matter in the top right hand, corner of your screen, the word submitted question are visible.
George Gonzalez: I'm joined today by Marek Bakun, our Chief Financial Officer.
Speaker Change: Booking that text will take you to the section where you can type in your question, and then click submit for later in this call.
George Gonzalez: As we discussed at our 2025 annual meeting of shareholders back in May, we committed to launching quarterly earnings calls to provide our shareholders and the investor community with another opportunity to engage with management and ask questions about our business and performance. We have always been an open and transparent company that welcomes engagement in any form throughout the year. Because of the types of assets that we own, we always encourage shareholders to visit us in person so they can assess the progress of the region and of the company. We are excited to begin this new chapter of investor engagement as the company continues to execute on our strategic transformation.
Speaker Change: I'm joined today by Mary cocoon or Chief Financial Officer.
Speaker Change: As we discussed at our 2025 annual meeting of shareholders back in may we committed to launching quarterly earnings calls to provide our shareholders and the investor Community with another opportunity to engage with management and ask questions about our business and performance.
Speaker Change: We have always been an open and transparent company that welcome to engagement in any form throughout the year.
Speaker Change: Because of the types of assets that we own, we always encourage shareholders to visit us in person so they can assess the progress of the region and of the company.
George Gonzalez: Over the past several years, we have evolved from primarily a transactional land sales company to a diversified real estate operating company with multiple recurring revenue Our strategy centers on growing and enhancing the ecosystem in Northwest Florida by developing scalable master plan residential communities and businesses and hospitality and commercial leasing that generate recurring revenue. We call this our virtuous circle of value creation, where investments in one area enhance the value of our adjacent assets. The essence of our business is we connect people to play.
Speaker Change: We are excited to begin this new chapter of investor engagement, as a company continues to execute on our strategic transformation.
Speaker Change: over the past several years, we have evolved from primarily a transactional land sales company to a diversified real estate operating company with multiple recurring revenue streams,
Speaker Change: our strategy centers on growing and enhancing the ecosystem. In Northwest Florida by developing, scalable master, plan residential, communities and businesses and hospitality and Commercial, leasing that generate recurring Revenue.
Speaker Change: we call this our virtuous circle of value creation, where investments in 1 area, enhance the value of our adjacent assets,
Speaker Change: the essence of our business is we connect people to place,
George Gonzalez: Before we begin discussing our results and answering your questions, I would like to remind everyone that today's press release and the statements made during this call include forward looking statements within the meaning of the private securities litigation reform act of 1995. These statements are subject to risks and uncertainties that could cause actual results to differ materially from our expectations and projections. Such risks and uncertainties include the factors set forth in the earnings release and in our filings with the Securities and Exchange Commission. Additionally, during today's call, we will be discussing non-GAAP measures, which we believe can be useful in evaluating our performance.
Speaker Change: Before we begin, discussing our results and answering your questions, I would like to remind everyone that today's press release.
Speaker Change: and the statements made during this call include forward-looking statements within the meeting of the private Securities, litigation Reform, Act of 1995,
Speaker Change: these statements are subject to risks and uncertainties that could cause actual results to differ materially from our expectations and projections.
Speaker Change: Such risks and uncertainties include the factor set forth in the earnings release.
George Gonzalez: A reconciliation of these measures can be found in our earnings release.
George Gonzalez: Our earnings release provides comprehensive details on our performance, so I'm not going to read all the details, but I will briefly focus on hitting on some key highlights before we move to our questions or to your questions. For the second quarter, we continue to show solid organic growth with 16% growth in revenue, 20% growth in net income, led by 27% growth in real estate revenue. What is particularly encouraging is the continued growth of our recurring revenue streams, leasing revenue increased by 11% to a quarterly record in hospitality revenue increased to 10% to a quarterly record.
Speaker Change: And in our filings with the Securities and Exchange Commission. Additionally, during today's call, we will be discussing non-gaap measures in which we believe can be useful. In evaluating our performance, and Reconciliation of these measures can be found in our earnings release.
Speaker Change: Our earnings release provides comprehensive details on our performance. So I'm not going to read all the details, but I will briefly focus on hitting on some key highlights before we move to our questions or to your questions.
Speaker Change: For the second quarter, we continue to show solid organic growth, with 16% growth in Revenue, 20% growth in net income, led by 27% growth in real estate Revenue.
George Gonzalez: Through the first six months of 2025, recurring revenue is now 63% of our total revenue, which is a significant transformation of the company. In the second quarter, we continue to execute a measured and multifaceted capital allocation strategy with $36.5 million in capital expenditures for growth, $10.1 million for share repurchase, $8.1 million for cash dividends, and $7.7 million for project debt reduction. We have accelerated share repurchase with $16.2 million through the first half of 2025, leaving the outstanding share balance below $58 million for the first time since 1996, or 29 years ago.
Speaker Change: What is particularly encouraging is? The continued growth of our recurring revenue streams, leasing Revenue, increased by 11% to a quarterly record in Hospitality Revenue increased to 10% to a quarterly record.
Speaker Change: Through the first 6 months of 2025 recurring revenue is not 63% of our total revenue which is a significant transformation of the company.
Speaker Change: And the second quarter, we continue to execute a measure in multifaceted Capital allocation strategy with 36.5 million in capital expenditures for growth.
10.1 million for share repurchase.
Speaker Change: 8.1 million for cash, dividends and 7.7 million for project debt reduction.
Speaker Change: We have a celebrated share repurchase with 16.2 million through the first half of 2025.
Speaker Change: 1996, or 29 years ago.
George Gonzalez: Beyond the numbers, there were several events in the second quarter that are relevant to our business that I would like to briefly mention in case anyone missed On April 1st, the Bay County Commission approved the Pigeon Creek Detail Specific Area Plan, or DSAP. with entitlements for over 3,000 residential units and over 400,000 square feet of commercial. We are already in discussion with a homebuilder interested in the entire DSAP that will be a new addition to our builder program.
Speaker Change: Beyond the numbers, there were several events in the second quarter that are relevant to our business. That I would like to briefly mention in case anyone missed them.
Speaker Change: On April 1st, the Bay County Commission approved. The Pigeon Creek, details specific area plan or dap.
Speaker Change: With entitlements, for over 3,000 residential units.
Speaker Change: And over 400,000 square feet of commercial.
Speaker Change: We are already in discussion with a home builder interstate in the entire dap that would be a new addition to our Builder program.
George Gonzalez: On May 5th, we launched Waterstown Real Estate, a boutique real estate brokerage located in the Watercolor Town Center with several other future locations planned. This is our latest asset like business to complement our existing title and insurance businesses that generate recurring revenue from capital investments we have already made.
Speaker Change: On May 5th, we launched watersound real estate. If Boutique real estate brokerage located in the watercolor Town Center, with several other future locations plans.
Speaker Change: This is our latest asset like business to complement our existing Title and Insurance businesses. That generate recurring revenue from Capital Investments. We have already made
George Gonzalez: On May 7th, Delta announced year-round daily nonstop flights between New York City's LaGuardia Airport and Northwest Florida Beaches Airport, ECP. This is an exciting opportunity for us to reach a new and heavily populated market.
Speaker Change: On May 7th, Delta announced your round daily non-stop flights between New York, City's LaGuardia Airport, and Northwest Florida beaches airport, ECP. This is an exciting opportunity for us to reach a new and heavily populated Market.
George Gonzalez: On June 10, the Florida Governor and Cabinet approved the issuance of $414 million of bonds for the construction of a new FSU Health Teaching Research Hospital in Bay County on our medical campus on State Road 79. On June 27th, Topgolf opened its doors in Panama City Beach as our main anchor for Pure Park City Center, an exciting new entertainment district.
Speaker Change: On June 10th, the Florida governor and cabinet approved. The issuance of 414 million dollars of bonds for the construction of a new FSU Health, teaching Research Hospital in Bay County, on our Medical Campus on State Road 79,
George Gonzalez: on June 30th, the Florida governor signed the state budget for fiscal year 2025 26. which includes a $5 million appropriation to Bay County for the planning of a new sanitary sewer plant in the northern part of State Road 79 corridor to help support future growth.
Speaker Change: on June 27th, Topgolf opened its doors in Panama City, Beach as our main anchor for Pure Park, City Center and exciting new Entertainment District
On June 30th, the Florida governor signed the state budget for fiscal year 202526.
Speaker Change: Which includes a $5 million appropriation to Bay County for the planning of a new sanitary, sewer plant in the northern part of State Road 79 Corridor to help support future growth.
George Gonzalez: In closing, no matter the high quality of our real estate assets, the quality of our people is what stands out. We have a hardworking team that is committed to executing our shared vision, and it is an honor and privilege to be a part of the journey with us.
In closing, no matter the high quality of our real estate assets. The quality of our people is what stands out. We have a hard-working team that is committed to executing our shared vision and it is an honor and privilege to be a part of the journey with them.
Operator: So now we're going to transition to the question and answer part of the call. We're going to read the questions as they come up on the screen.
Speaker Change: So now, we're going to transition to the question and answer part of the call.
Operator: So please, I encourage you, if you have any questions, click on the question button and submit them to us and we can read them and answer your questions.
Unknown Shareholder: The first question is, would the board consider reviewing the current access policies to ensure that hotel guests usage in our waters on club?
Speaker Change: Uh we're going to read the questions as they come up on the screen. Um so please I encourage you if you have any questions uh click on the question button and submit them to us so we can read them and answer your questions.
George Gonzalez: Do not dilute the premium experience and investment for members. There's currently three hotels on 30 a that we allow access to our club amenities out of total 12 hotels. At this moment in time, we don't have a plan to change that current policy.
Speaker Change: The first question is uh, with the board consider reviewing, the current access policies to ensure that hotel guests usage in our Watson club uh, do not dilute the premium experience and investment for members. Uh, there's currently 3 hotels on 30A that we allow access to our club amenities out of, uh, total of 12 hotels, at this moment in time, uh, we don't have a plan to change that current policy
George Gonzalez: The next question distributed cash from Latitude Margaritaville Water Sound. Could you provide color on the decision make on the decision making of how much capital or cash is kept at Latitude versus being distributed out to the joint venture partner? The answer to the question is there's not a specific formula that the partners execute ourselves and Minto on the actual distribution. It's a decision that's made based on how the business is going, how sales are going, how closings are going, the infrastructure needs, the capital needs for the infrastructure. So there's not a specific formula. It is something that we work together with our partner as part of the normal day-to-day execution of the joint.
Speaker Change: The next question.
Speaker Change: Distributed cache from latitude Margaritaville, water sound, could you provide color on the decision, make on the decision, making of how much capital or cash is kept at Latitude versus being distributed out to the joint venture Partners? Uh, the answer to the question is, there's not a specific formula, uh, that, uh, the partners execute ourselves in mentos on the actual distribution. It's a decision that's made based on how the business is going. Uh, how sales are going, how closings are going, uh, the infrastructure, uh, needs the capital needs for the infrastructure. Uh, so there's not a specific formula. Uh, it is something that, um, that we work together with our partner. Um,
Speaker Change: um, as part of the, the the normal day-to-day execution of the joint venture,
George Gonzalez: The next question, what is the number of acres contributed to the Margaritaville joint venture with Minto? It is approximately 2,600 acres.
Speaker Change: Uh, the next question. What is the number of Acres contributed to the margarita Margaritaville joint venture uh, with Mentos? Uh, it is approximately 2600 Acres.
Operator: Next question.
Unknown Shareholder: What can you tell us on the ground in terms of what you're seeing in terms of population growth in the area over the past year? Do you think it's possible that we can see the housing market in the area but the national trend?
Speaker Change: Next question.
What can you tell us on the ground in terms of what you're seeing in terms of population, growth in the area, over the past year?
Unknown Shareholder: You return 26 million to equity holders in the form of dividends buybacks that pay down being able to return significant capital to shareholders while continuing to grow is essential to this investment. Do you believe we have reached a point where we can return close to 100 million annually to shareholders in the manner you did this past quarter?
Speaker Change: Do you think it's possible that we can see the housing market in the area? But the national trend
Speaker Change: you returned 26 million to equity holders in the form of dividends BuyBacks. That pay down being able to return significant Capital to shareholders while continuing to grow is essential to this investment.
George Gonzalez: So let me answer those questions one section at a time. What can you tell us on the ground in terms of what you're seeing in terms of population growth in the area over the past year? As we shared at the annual meeting, Bay and Walton County are among the fastest growing counties in the state of Florida by rate. We are still seeing that level of in-migration coming into our area. We're not seeing any material difference in that aspect.
Speaker Change: Section of the time.
George Gonzalez: So the answer to the question is we expect to see a continuation of the trend in the growth rate that we've been seeing in both Bay and Walton County.
George Gonzalez: Could you see the housing market in the area above the national trend? Time will tell, but so far we certainly, our region is certainly doing better than many other parts, many other metro markets in the country.
Speaker Change: Um, what can you tell us on the ground, in terms of what you're seeing in terms of population, growth in the area over the past year? Um, as we shared at the annual meeting, uh, bay and Walton County, uh, are among the fastest growing counties in the State of Florida, uh, by rate. Uh, we are still seeing, uh, that level of immigration, uh, coming into our area. Uh, we're not seeing any material difference, uh, in that aspect. Um, so, uh, the, the answer to the question is we we expect to, uh, to see a continuation of the trend, uh, in the growth, uh, rate that we've been seeing in both Ben, Walton County.
George Gonzalez: You return $26 million to equity holders in the form of dividends. I think really the question is, do you believe you have reached a point where you can return close to $100 million annually to shareholders in the manner you did this quarter? We don't know. Capital allocation is something that we we look at daily. We make decisions based on what's happening at the ground level, what's happening at the macro level, at the micro level. Share price. But as I've said many times and we talked about in great detail at the annual meeting, it is something that is very important to us.
Speaker Change: Um, could you see the housing market in the area above the national Trend uh time will tell. Um, but so far, uh, we certainly our region is currently doing better than many other parts. Uh, many other Metro markets in the country.
Speaker Change: You return 26 million to equity holders and the form of dividends. Um, I think really the question is, do you believe you have reached a point where you can return clothes to 100 million annually to shareholders in the manner you did this quarter? Um we we don't know. Uh Capital allocation is something that we we uh we look at Daily. Uh, we make decisions based on what's happening at the ground level. What's happening at the macro level at the micro level? Uh, share price. Um, but uh, as I've said many times and we talked about
George Gonzalez: It is top of mind. And we're constantly thinking about capital allocation and the best way that we can create value for our shareholders.
Speaker Change: In great detail, at the annual meeting. It is uh, something that is very important to us. It is top of mind and we're constantly thinking about Capital allocation and the best way that we can create value for our shareholders,
George Gonzalez: The next question, what is going on with memberships? So two things about memberships.
George Gonzalez: First of all, and I think that question is probably because Unknown Shareholder, Marek Bakun, St.
Speaker Change: The next question, what is going on with memberships? Um, so 2 things about memberships. Uh, first of all, um and I think that question is probably because um,
Speaker Change: the re the question, uh,
Speaker Change: that individual asking the question, notice that there was a slight decrease in memberships, uh, for the quarter.
George Gonzalez: Joe Co Next question. There was a nice pickup to 492 newly contracted home sites this quarter. Were there any major communities that drove this number? The answer is no, there was not one major community that drove that number that was spread out over all the active communities that we have.
Speaker Change: But a lot of that has to do with 2 things uh 1. Uh we had a an adjustment uh or recalibration of membership types of particularly Legacy Family, memberships, and that created a bit of an anomaly. Um, in the in the math of the membership, we actually had 113 new members, full new members join, uh, so far, uh, the second thing is, we did expect, uh, a little bit of a Slowdown in membership, um, because we increased the entry fee, significantly starting in January this year and the monthly dues, uh, so every time we've done that and we, we increase the entry fee and the membership. Dues, uh, very gradually and incrementally over time, and the trend has always been when we do that. There's a little bit of a Slowdown in new memberships, uh, reacting to
Speaker Change: Uh, the increase in entry fees and memberships and over time, um, that the, the market absorbs, the increase, and then we get back on on another upcycle in membership growth.
Speaker Change: Next question, there was a nice pickup to 482, newly contracted homesites quarter. Were there any major communities that drove this number?
George Gonzalez: What is currently the main bottleneck? to sell more than the thousand home sites that you have averaged in the last year. I think, I'm not sure I would call it a bottleneck, but probably the same driver that affects all the builders nationally.
Uh, the answer is no, there was not 1, major community, that drove that number um, that was uh, spread out over, uh, all the active communities that we have.
Speaker Change: What is currently the main bottleneck?
George Gonzalez: Relief in mortgage interest rates would certainly be very helpful in us accelerating in going beyond not only to the thousand for a year, but even going beyond the thousand. We are still seeing good traffic in the sales centers. We are still seeing good in migration into our region. We still get positive feedback about the quality of the product that is here. So it's a matter of interest rates decreasing. So the consumer will feel a little bit more comfortable about making that final decision.
Speaker Change: To sell more than the Thousand home sites that you have average in the last year. Um I think uh I'm not sure I would call it a bottleneck but probably the same driver that affects uh all the builders uh nationally uh relief in mortgage interest rates would certainly uh, be very helpful uh, in US. Uh, accelerating, uh, in going Beyond, not only to the Thousand for a year. But even going Beyond, uh, the Thousand, um, we did, we are still seeing good traffic in the sales centers. We are still seeing good in migration into our region, uh, we still get positive feedback about the quality of the product that is here. Um, so it's a matter of um, uh, interest rates, uh, decreasing. Uh, so, uh, the consumer will feel a little bit more
Speaker Change: More comfortable about making that final decision.
George Gonzalez: Next question, how do you think about the vehicle traffic you're creating over time when traffic already seems difficult at times.
Speaker Change: Next question. How do you think?
George Gonzalez: Yes, we infrastructure, not just in terms of transportation, but utilities is a really important aspect of what we do. We as a company are constantly planning three, five, seven, 10 years ahead. We spend a lot of time with our partners at the state level at the regional level and at the local level planning for future infrastructure expansion. It is always difficult to get it just right. You're either too far ahead or far behind, but it is something that we are constantly spending time on with our state, regional and local partners trying to make sure that the infrastructure keeps up with the growth.
Speaker Change: 357, 10 years ahead. Uh, we spent a lot of time with our partners, uh, at the state level at the regional level and at the local level, uh planning uh, for future, uh infrastructure expansion. Um, it is always difficult to get it just right. Um, you're either too far ahead or or far behind but it is something that we are constantly uh spending time on with our state regional and local Partners uh trying to make sure that the infrastructure keeps up with the growth.
Unknown Shareholder: The next question, um, C club grads grew with lower memberships. What color on that? Can you provide?
George Gonzalez: Um, so Couple things higher dues was a big part of it. As I mentioned before, we increased not only the entry fee, but the monthly dues pretty significantly in January of this year. So that obviously resulted in higher revenue for the for the club. We also have the new golf course. So we now have three golf courses that increases the fees associated with a golf course and we had a pretty good second quarter in terms of our hotel occupancy. In our rate.
The next question. Um, C Club, Brad screw with lower memberships. What color on that can you provide? Um,
Speaker Change: so,
Speaker Change: Couple things uh, higher dose, um, was a big part of it. As I mentioned before we increase, not only the entry fee, but the, the monthly dues pretty significantly in January of this year so that obviously resulted in in higher revenue for the for the club. Um, we also have the new golf course, so we not have 3 golf courses. That increases, uh, the fees associated with the golf course. Uh, and we had a pretty good second quarter uh in terms of our hotel occupancy, um, in our rates.
Unknown Shareholder: The next question, you have 1209 homesites under contract, which is a decline versus previous years, despite having more active selling communities and more national builders. This implies that you have fewer home sites under contract per community and per builder. What is driving this decline? And how do you think about this metric versus prior years?
Speaker Change: the next question you have uh, 1,29 home sites under contract, which is a decline versus previous years despite having more active selling communities and more National builders
George Gonzalez: Well, the answer is we closed a lot of lots in the first half of this year. Also, as I've mentioned before, it's. difficult to try to create a an algorithm or a methodology on lock closings because the time it takes to engineer permit develop infrastructure in any one subdivision phase is not linear and it it takes approximately two years sometimes it takes a year sometimes it takes a year and a half so when when looking at that metric I would just caution shareholders on over reading or reading too much into that metric because there's a lot of components to delivering lots or home sites that are not easy or they're not easy to apply in a linear formula but we sold a lot of lots so obviously that that displaced a lot of those lots are under contract in terms of what we're seeing at the ground level in our discussions with all of our builders and we talk to them very regularly we don't we don't feel that there's any material difference in that pipeline that causes us any concern at this point.
Speaker Change: This implies that you have fewer home sites, under contract per community and per Builder, what is driving this Decline? And how do you think about this metric for versus prior years? Um, well, the answer is we closed a lot of lots. Um, in the first half of this year, um,
also, uh, as I've mentioned before, um, it's it's difficult to try to create a, an algorithm or a methodology, uh, on lot closings because the time it takes to engineer permit. Develop infrastructure and any 1, uh, subdivision phase is not linear and it's it takes, uh, approximately 2 years. Sometimes it takes a year, sometimes it takes a year and a half.
um, so when uh, when looking at that metric I would just caution, uh,
Speaker Change: Shareholders, uh, on, uh, over reading or reading too much into that metric. Um, because there's a lot of components to delivering Lots, uh, or home sites that are, are not easy, or they're not easy to, to apply in a linear formula. Um, but we sold a lot of lots. So obviously that, that displaced a lot of those lots that were under
Contract in terms of what we're seeing at the ground level, in our discussions, with all of our Builders, um, and we talked to them very regularly, um, we don't, uh, we don't feel that there's any material. Uh,
Speaker Change: Difference in that pipeline, uh, that causes us any concern at this point.
George Gonzalez: The next question, does the board believe Florida Senate Bill 1622 customer use assignments a lot this year by the governor to have negative effect in St Joe's real estate holdings, especially in Walton County? The answer is no, we don't anticipate it will have any effect on St Joe's real estate.
The next question, does the board believe Florida, Senate, Bill 1622 customer reviews assigned into law this year by the governor to have negative effect on St. Joe's, real estate holdings, especially in Walton County. Uh, the answer is no, we don't anticipate that we'll have any effect, uh, on St. Joe's real estate holdings.
Unknown Shareholder: The next question, there is a massive discrepancy between the market cap and NAB. How do you plan on closing that?
George Gonzalez: Any consideration for getting sell side coverage? Our focus as management is to continue to grow the company, continue to grow the company in the most profitable way possible and also in the best way possible. That's going to be creating shareholder value. That's our focus. That's what our team is focused on on a daily basis.
Speaker Change: The next question there is a massive discrepancy between the market cap and nav. How do you plan on closing that? Any consideration for getting Southside coverage. Uh, our Focus has management is to continue to grow. Uh, the company uh, continue to grow the company, uh, in the most profitable way possible, and also, in the, the best way possible that's going to be creating shareholder value. Uh, that's our Focus. Uh, that's what our team is focused on, on a daily, uh, basis.
Unknown Shareholder: The next question. CapEx and lot development seem significant relative to the amount of lots planted under development.
Speaker Change: The next question.
George Gonzalez: Can you give us some color here? Is it possible this CapEx is going towards lots and permitting planning? So yes, first of all, CapEx includes both soft dollars and hard dollars. Soft dollars are dollars that we spend in planning, engineering, permitting, and of course hard dollars are dollars that we spend in actually putting infrastructure in the ground. So it's a combination of both.
Speaker Change: Capex and lot development seen significant relative to the amount of launch plaited under development.
George Gonzalez: And again, it's very difficult and I would caution looking at any residential home site metric as it relates to timing and to not reading too much into it at any one time. Just because of that two year window, that's a big variable in the time it takes to engineer, permit, and develop homesites.
Can you give us some color here? Is it possible? This capex is going towards, lots and permitting planning. Uh, so yes. First of all, capex includes both soft dollars and heart dollars. Stop dollars are dollars that we spend in planning engineering permitting. And of course, hard dollars are, uh, dollars that we spend and actually putting infrastructure in the ground. Um, so it it's a combination of both and again, it's, it's very difficult and then I would caution. Um, uh,
Unknown Shareholder: The next question, when will phase two Margaritaville break round and what is its size? Will the pricing and market positioning be similar to phase one? Thanks and great work to all the team members.
Speaker Change: The next question. When will Phase 2 Margaritaville break? Ground? And what is its size? Uh will the pricing and Market positioning be similar to phase 1.
George Gonzalez: So, as we talked about in the annual meeting, we received approval for the detailed specific area plan immediately west of Latitude, I believe it was one or two years ago from Bay County. That's approved for over 4,000 units. We have been engaging in planning with our potential joint venture partner, extending the joint venture from Latitude to the property to the west. We are in discussions with our partner about the transition and the expansion of Latitude into that new area. At this point in time, we anticipate having a very similar market position in terms of pricing and product.
Uh, thanks and great work to all the team members.
Speaker Change: Um, so um, as we talked about in the, uh, annual meeting, um, we uh received, uh, approval. Uh, for the detailed specific area plan immediately west of latitude, uh, I believe it was 1 or 2 years ago from Bay County. Um, that's approved for over 4,000 units. Um, we have been engaging in planning, uh, with um um, our potential joint venture partner, uh, extending the joint venture from latitude to the property to the West.
George Gonzalez: So that's something that we hope, in terms of answering the specific question, when we'll actually break ground, we don't have an exact projection for that. But if you can kind of look at the 3,500 units that were approved in the first joint venture and the current run rate that we're on on a yearly basis, it's probably going to be a couple years away when we break ground for the second Latitude project. But we do feel very positive with our relationship with our partner. We feel positive about the continued market acceptance and the traffic that we're seeing in the sales center.
Speaker Change: Um, we are in discussions with our partner, um, about uh the the transition and the expansion of latitude into that new area. Um, at this point in time we we anticipate uh, having a very similar, uh, Market position in terms of pricing and product. Um, so that's something that uh, we hope. Um, in terms of answering the specific question, when will actually break ground, we don't have an exact projection for that. Um, but if you, uh, can kind of look at the 3500 units that were approved in the first joint, venture in the current rate, run rate that we're on.
George Gonzalez: So we obviously are planning on continuing that relationship on that property to the immediate west.
Speaker Change: On a yearly basis. Um, it's probably going to be a couple years away, uh, when we break ground for the second, uh, latitude project. But we do feel, uh, very positive with our relationship with our partner. We feel positive about, uh, the continued Market acceptance and the traffic that we're seeing in the sales Center. Um, so we uh obviously our our planning and continuing that relationship on that property to the immediate West,
Unknown Shareholder: Your income from equity accounted investments is getting material due to latitude margaritaville, but the sum of the earnings of your two pure park JVs and soon to water sound fountains independent living JV are negative and the value of those two assets doesn't currently show in the PLNL.
George Gonzalez: What is the earnings potential of these properties as they ramp up? Is Joe the logical owner of these properties?
Next question, your income from Equity, accountant, Investments is getting material due to the latitude Market reederville. But the sum of the earnings of your, uh, 2 peer Park JVS and soon the Watson counts, Independent, Living JV are negative and the value of those 2 assets, doesn't currently show in the pnl. What is the earnings potential of these properties that they ramp up?
George Gonzalez: So a couple of those properties that were mentioned are still in the startup lease up phase, particularly the fountains. And that project was delayed on the construction side. So we started leasing later than we anticipated.
George Gonzalez: Residence Inn is the other hotel joint venture that was referenced. That's still in the startup. Stabilization Phase. We believe they're both two great locations. And the long term potential of those two assets, we we still believe are good.
Speaker Change: Is Joe, The Logical owner of these properties. Um, so um, a couple of those properties that were mentioned, are still in the startup lease up phase. Uh, particularly The Fountains, um, in that project was delayed on the construction side. So uh we started uh leasing uh, later than we anticipated. Um,
George Gonzalez: And for example, fountains, Watercress, our other senior living facility took a while to lease up, they don't have the same leasing trajectory as apartments, they do take longer than apartments. And Watercress was slow to lease up and now is in the 90 percentile, and actually quite profitable for us. There's no reason to believe that Watersound Fountains is going to be any different from that.
Speaker Change: Residents in is the other Hotel joint venture that was referenced. That was that's still in the startup. Um, uh, stabilization phase. Uh, we believe they're both 2, great locations, um, and the long-term potential, uh, those 2 assets. Uh, we, we still believe are are good. Um, and for example, fountains uh, Water Crest, uh, are other Senior Living facility took uh, a while to lease up they don't have the same leasing. Um,
George Gonzalez: So the, but having said all that, we're constantly looking at all of our assets constantly, whether it's a joint venture, or it's one of our projects, assessing its long term potential, assessing its long term profitability, and making decisions on on our long term ownership of that asset. That's something that we do constantly.
Trajectory as Apartments, they do take longer than apartments and Water Press was slow to lease up and now is in the 90% tile and actually, uh, quite profitable for us. Uh, there's no reason to believe that water sound fountains, uh, is going to be any different from that. Um, so, uh, the, but having said all that, uh, we're constantly looking at all of our assets constantly, whether to joint venture, or it's 1 of our projects, uh, assessing its long-term potential, assessing, its long-term profitability, um, and making decisions on on our long-term ownership of that asset. That's something that we do constantly.
Unknown Shareholder: The next question, what needs to occur for the West Bay Bridge to be built? And what kind of timeline do you envision for that? So the the question refers to the water sound, the West Bay Parkway, the road that would connect State Road 79 in Bay County, head west, go over the intercoastal waterway and then come out in Walton County west of Water Sound origins. That is a project that we've been engaged in planning with the Florida Department of Transportation. The Florida Department of Transportation has a very specific process they go through for regional roadways like that.
George Gonzalez: The very first step is choosing the alignment and that alignment was chosen. We worked closely with the Florida Department of Transportation and then making that decision of the alignment. The next step is engineering and permitting of the road. We have been in discussion with the local transportation planning organizations and DLP on putting together that next step in engineering and permitting.
George Gonzalez: We don't have an exact time frame from when the road is going to be built. But one thing that we do know, as with the success of Latitude, every home that gets built at Latitude is another consumer that is going to appreciate that road. And the more of those consumers we have, the more positive we feel about the potential timing of that road.
Speaker Change: Engineering and permitting of the road. Uh, we have been in discussion with the local, uh, Transportation Planning organizations and Dot, um, on putting together that next step in, uh, engineering and, uh, permitting. Uh, we don't have an exact time frame from when the road is going to be built. But 1 thing that we do know, as, uh, with the success of latitude. Um, every home that gets built at latitude is another consumer that is going to, uh, appreciate that road. And the more of those consumers, we have, uh, the, the more positive we feel about, uh, the potential timing of that road.
Unknown Shareholder: The next question, there is a lot of real estate activity in the area, some distance from the coast in your area, for example, Freeport, your raw land is appreciated, even though it doesn't show up in quarterly results. Do you get offers to buy land from third parties? And how do you think about selling the land or holding on to it, even though you might not have immediate plans to use the land? That's a very good observation. We do get, from time to time, offers from individuals, different parts of our land holdings. The part of our land holdings that we consider non-strategic, which is essentially the bulk of that, is the property east of the Apalachicola River in Leon County, in Gadsden County, in Wacola County.
The next question there is a lot of uh real estate activity in the areas, some distance from the coast in your area. For example, Freeport your raw land is appreciating. Even though it doesn't show up in quarterly results, do you get offers to buy land from third parties and how do you think about selling the land or holding on to it even though you might not have immediate plans to use the land? Um, that's a a very, uh, good observation. Um, we do get um, uh, from time to time. Um, offers from individuals, uh different, uh, parts of our land Holdings. Um, the part of our land Holdings that we consider non-strategic, uh, which is essentially, uh, the bulk of that is the property, uh, east of the app.
George Gonzalez: In those counties, we are predisposed to sell at the right price, obviously. We're not discounting any land, even if it's non-strategic. So, on the east side of the Apalachicola River, Leon County, Gadsden, Wacola, and a couple of those counties, those are lands that we don't consider strategic. Land in our core counties, in our strategic counties, whether it's Bay, Walton, or Gulf, we're a lot more picky about engaging with potential parties that have an interest. And oftentimes, the interest is really to somebody looking to buy a property at a low price, and wait for the appreciation, and then do something in the future.
Speaker Change: Pola River in Leon County in Gatton County in Wakulla County, uh, in those counties, we are predisposed to sell at the right price, obviously. Uh, we're not, uh, discounting any, uh, any land even if it's non-strategic. Um, so on the east side of the app, Apalachicola River, uh, Leon County Gaston Wakulla and a couple other. Those counties those are lands that we don't consider strategic and we, when we get inquires about selling, uh, uh, or potential buyers, buying property in those, uh, areas. And those counties. Um, we are predisposed to do that, and we do, uh, we have sold several of those properties, uh, land, uh, in our core counties, in our strategic counties, whether it's Bay 1 or golf, uh, we're a lot more picky, um, about uh, engaging, um, with potential, uh, parties that have an interest. Um, and often times, uh, the interests, uh, is, is really to somebody
George Gonzalez: Quite frankly, that's not something that we think is in the best interest of our shareholders in the company.
George Gonzalez: But we always listen, we always meet, and if we think there's a strategic opportunity to sell a piece of land in one of our strategic counties at a good price that will be accretive to what we're doing, we are certainly going to consider that.
Speaker Change: Looking to, to buy a property at a, at a low price and and wait for the appreciation and then do something in the future, quite frankly. Uh, that's not something that we think is the best interest of our shareholders in the company. Um, but we always listen, we always meet and if we think there's a strategic opportunity to sell a piece of land in 1 of our strategic counties uh at a good price that will be accretive to what we're doing. We are certainly going to consider that
George Gonzalez: The next question, when do you expect the new marina to start construction on the ICW? So we started construction of that new marina. We did a lot of grading on that property.
George Gonzalez: We are still waiting for all the permits to be issued before we finalize the plan and move forward and finish the marina. But we have started construction. We're just waiting for all the permits before we can continue the development of that marina.
Speaker Change: The next question. When do you expect the new Marina to start construction on the icw? Um, so we started construction of that new Marina. Uh, we did a, a lot of grading, uh, on that property. Um, we are still waiting for all the permits, uh, to be issued, uh, before we, uh, finalized, um, the plan and move forward and, and finish, uh, the marina. But we have started, uh, construction. We're just waiting for all the permits, uh, before we can continue the development of that Marina.
Unknown Shareholder: The next question, how should we look at the earnings potential of the new St. Joe Brokerage Boutique? Will all St.
George Gonzalez: Joe's newly built homes be sold through your own brokerage? So we we have some pretty ambitious goals for for the agency. We're taking it one step at a time. We have been extremely pleased with the reaction that we've had in the agent community. When we announced that we were forming the brokerage, we were inundated with phone calls of agents in the region wanting to join the brokerage. Right now that the focus is on the first location, which is in the Watercolor Town Center, and the focus of that location is resale in that part of 30A.
Speaker Change: Your own brokerage so we have some pretty ambitious goals for for the agency.
Speaker Change: We're taking it one step at a time.
Speaker Change: We have been extremely pleased with the reaction that we've had in the agent community.
When we announced that we were forming.
Speaker Change: The brokerage we were inundated with phone calls of agents in the region wanting to join.
Speaker Change: The brokerage.
Speaker Change: Right now the focus is on the first location, which is in the watercolor town center and the focus of that location is resales in that part of 38.
George Gonzalez: We have plans to expand locations in multiple areas in both Bay and Walton. In terms of new home sales in communities, yes, that is something that we're certainly looking at and targeting of how our brokerage can be involved in executing that part of our business.
Speaker Change: We have plans to expand locations.
Speaker Change: In multiple.
Speaker Change: Areas in both Ben Walden.
Speaker Change: In terms of new home sales in communities, yes that is something that we're certainly looking at and targeting of how our brokerage.
Speaker Change: It can be involved in executing that.
Speaker Change: That part of our business.
Speaker Change: The next question as part of your strategic plan, what is the goal for growth rate.
Speaker Change: <unk> revenues for the next three to five years.
Speaker Change: We don't I don't know if I can tell you an exact goal at this moment in time, it's project by project.
Speaker Change: But we obviously like I said earlier, our focus at the management team is on growth is on growing revenues growing profitability.
Speaker Change: Particularly growing recurring revenue.
George Gonzalez: The next question, can you talk about the timing of the medical center breaking ground since the bonds have been approved and also the impact on the region? So first, the impact on the region, we believe it's going to be a pretty transformational impact to the region transformational impact in a in a actually extremely positive way. Having a research teaching hospital in our region is gonna be extremely beneficial for existing residents, prospective residents.
Speaker Change: The next question can you talk about the timing of the medical center breaking ground since the bonds have been approved and also the impact on the region.
Speaker Change: So first the impact on the region.
Speaker Change: We believe it's going to be a.
Speaker Change: Pretty transformational impact to the region transformational impact.
Speaker Change: Extremely positive way.
Speaker Change: Having a research teaching hospital.
Speaker Change: In our region.
Speaker Change: It's going to be extremely beneficial for existing residents prospective residents.
George Gonzalez: So we really believe it's gonna be a transformational event for the region. The, the bonds were issued FSU is currently in the process of finalizing an agreement with an operator. And as soon as that agreement is finalized, you're gonna be able to see the project move forward fairly quickly after that.
Speaker Change: So we really believe it's going to be a transformational event for the region.
Speaker Change: The bonds were issued.
Speaker Change: FSU is currently in the process of finalizing.
Speaker Change: An agreement with an operator.
Speaker Change: And as soon as that agreement is finalized.
Speaker Change: Youre going to be able to see the project move forward.
Speaker Change: Fairly quickly after that.
Unknown Shareholder: The next question is Pigeon Creek potentially a parcel that you would consider offloading for a sizable chunk of upfront cash to a single builder versus the slow bleed approach that seems to be common with the existing builders and MPC. The location of the land and potentially density, a large scale builder could quickly add on the residential side appears to make this sort of transaction more appealing. As I mentioned in my introductory comments, we are in discussions with one large scale builder, as the question mentions, that has an interest in the entire Pigeon Creek DSAP. We've made a lot of progress in those discussions.
Speaker Change: The next question is pitching creek potentially a parcel that you would consider offloading for a sizable chunk of upfront cash to a single builder versus the slow bleed approach that seems to be comparable to the existing builders and MPC.
Speaker Change: Location of Atlanta, and potentially density at large scale builder could quickly add on the residential side appears to make this sort of transaction more appealing as.
Speaker Change: As I mentioned in my introductory comments, we are in discussions with one.
Speaker Change: Large scale builder.
Speaker Change: That's the question.
Speaker Change: Mentioned.
Speaker Change: That has an interest in the entire Pigeon Creek VSAT.
Speaker Change: We've made a lot of progress in those discussions and we believe that builder is the right builder to accomplish what the question asks.
George Gonzalez: And we believe that builder is the right builder to accomplish what the question asks, which is to help accelerate the pace in the trajectory of our residential segment, particularly with the scale that Pigeon Creek has.
Speaker Change: Is to help accelerate.
Speaker Change: The pace in the trajectory.
Speaker Change: Our residential segment, particularly with the scale that pitching pre cast.
Speaker Change: Okay.
Operator: So I'm not seeing another question. If there's any more questions that anybody has, please go ahead and send them in. We'll give it a few more minutes to see if there's any other questions that come in.
Speaker Change: So I am not seen another question. If there is any more questions that anybody has please go ahead.
Speaker Change: And the sentiment.
Speaker Change: We'll give it a few more minutes.
Speaker Change: See if there's any other questions that come in.
George Gonzalez: Okay, we're not seeing any more questions. So thank you again for joining us today. I greatly appreciate the questions. There were some really great insightful questions from from individuals that know our company pretty well. So appreciate the questions. Appreciate the interest in the engagement.
Speaker Change: Okay, we're not seeing any more questions. So thank you.
Speaker Change: Again for joining us today I greatly appreciate the questions. There were some really great insightful questions from from individuals that know our company pretty well. So I appreciate the questions I appreciate the interest and the engagement.
Operator: And again, we're looking forward to this new phase of engagement with our shareholders and look forward to speaking with you again next quarter. Thank you, everybody. Have a great day.
Speaker Change: And again, we're looking forward to this new phase of engagement with our shareholders.
Speaker Change: And look forward to speaking with you again next quarter.
Speaker Change: Everybody have a great day.
This concludes today's conference. Thank you for participating. You may now disconnect.
Speaker Change: This concludes today's conference call. Thank you for participating.
Speaker Change: You may now disconnect.