Good day, everyone, and welcome to today's FRP Holdings call regarding acquisition of Oatman Logistics. 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. Please note today's call will be recorded, and I will be standing by should you need any assistance. It is now my pleasure to turn the conference over to Chief Financial Officer, Matt McNulty. Please go ahead. Thank you, and good afternoon, everyone. Thank you for joining the FRP Holdings Inc. conference call today to review the company's recent announcement of the strategic acquisition of Oatman Logistics. With me on the call is John Baker III, Chief Executive Officer; David deVilliers III, our Chief Operating Officer; John D. Baker II, our Chairman; David deVilliers Jr., our Vice Chairman; and John Klopfenstein, our Chief Accounting Officer. First, let me run through a brief disclosure regarding forward-looking statements and non-GAAP measures used by the company. As a reminder, any statements on this call which relate to the future are, by their nature, subject to risks and uncertainties that could cause actual results and events to differ materially from those indicated in such forward-looking statements. These risks and uncertainties are listed in our SEC filings. 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. Supplement the financial results presented in accordance with generally accepted accounting principles. FRP presents certain non-GAAP financial measures within the meaning of Regulation G. The non-GAAP financial measures referenced in this call are Net Operating Income, or NOI, and Pro Rata NOI. FRP uses these non-GAAP financial measures to analyze its operations and to monitor, assess, and identify meaningful trends in its operating and financial performance. This measure is not and should not be viewed as a substitute for GAAP financial measures. To reconcile NOI to GAAP, please refer to the segment entitled "Non-GAAP Financial Matters" in our most recent earnings release. Any reference to cap rates, asset values, per-share values, or the analysis of the estimated value of our assets, net of debt and liabilities, are for illustrative purposes only and as a reflection of how management views its various assets for purposes of informing management decisions and do not necessarily reflect the price that would be obtained upon a sale of the asset or the associated cost or tax liability. I will now turn the call over to our CEO, John Baker III, to discuss the recent announcement. John? Thanks, Matt, and good afternoon to those on the call. Earlier this week, we announced the completion of an important strategic acquisition that expands FRP's core industrial business development platform. This acquisition, which closed on October 21, 2025, adds a number of development projects to our existing and growing portfolio, including raising FRP's ownership interest to 100% in two projects in Florida currently under development and scheduled for completion in 2026. This transaction both broadens our exposure to high-quality industrial assets and key markets, as well as deepening the bench of our team. Now, let me review the terms of the transaction. FRP acquired minority membership interest in five joint ventures and took an assignment of a land sales contract from Oatman Logistics, LLC, for a total purchase price of $23.6 million, plus a requirement to replace a $10 million guarantee fund that serves as collateral for the existing construction loans. At closing, $42.5 million of the $121.8 million in total construction financing for the projects had been drawn, with FRP's proportionate share currently at $4.9 million. The company expects to record additional liabilities and expenses between now and the sale of the projects related to employee compensation tied to promote participation for successful projects. In the release accompanying this announcement, we included a table which details the projects being purchased with this transaction, inclusive of the two projects that FRP already had an existing partnership with Oatman and which FRP now owns 100%. The Oatman Logistics Properties Model consisted of a develop and sell program whereby Oatman collects development fees from its joint venture partners and holds the right to a promote upon a successful sale of the project at stabilization. Exclusive of the two properties that FRP will now own 100% of, the company intends to continue the Oatman Logistics Properties Model for these other projects, which the company estimates will generate a 15%- 20% IRR at the property level prior to any promotes the company would be entitled to receive. The Reader's Digest version of what we expect to achieve with this deal is that upon stabilization of our five-year development pipeline, we will be able to execute our stated goal of doubling our NOI, as well as growing FRP's sum-of-the-parts valuation to over a billion dollars. The finances of this deal are obviously attractive to us. Through the promotes and sales we expect our team to achieve on these deals in place, we are going to generate a significant amount of cash that will help fuel future development more in line with the traditional FRP Holdings Inc. model of in-house development for the purposes of holding and managing assets. To me, what pushes this deal from attractive into the realm of necessary is the people. At our Investor Day event earlier this year, we presented a growth plan to more than double our run rate NOI by the end of this decade, centered around a substantial investment in and growth of our industrial portfolio. We detailed an extensive plan and a pipeline of projects with the goal of delivering three new industrial properties every two years across the back half of this decade. In order to make that possible, we knew we needed to bring on at least three people who would hold meaningful positions in the company. Those hires would have to be talented, capable people who fit our culture and share our values. What this deal accomplishes, in addition to being financially creative, is to complete this whole process in one step, rather than hiring, training, mentoring, and professionally growing a new crop of employees to get us where we need to be. We have acquired wholesale a talented team that we know and trust with a proven track record, deep contacts, and expertise in markets well outside our current reach. We have broadened our branch and greatly expanded our bandwidth and done it with a known commodity, mitigating the lengthy process of professional development and internal growth that might have taken a decade to achieve if done organically. Over the last 40 years, the long-term movement of interest rates and cap rates have made it difficult to differentiate between the pretty good and the truly talented. In this current environment of interest rate and cap rate uncertainty, talent is going to be the only differentiator we can count on to deliver value to our investors. The ability to identify growth markets, leverage contacts for off-market deals, control construction costs, and get a building occupied and stabilized quickly with quality tenants is going to be everything. In closing this transaction, we now have a deep bench of proven professionals who can do just that and can accomplish in-house what we would have had to pay for through development fees and equity had we pursued a deal via a joint venture. We have for some time laid out an ambitious plan for growth, and this certainly adds to it. Now we have the team that can deliver it and then some. At this point, we'll be happy to answer any questions you might have. At this time, if you would like to ask a question, please press the star and one on your telephone keypad. You may withdraw yourself from the queue at any time by pressing star two. Once again, for your questions, that is star and one. We'll pause a moment to allow any questions to queue. Once again, that is star and one. We'll take our first question from Kevin Amirsaleh with Via Mizner Capital, LLC. Your line is open. Hi, guys. Sorry, I might have missed this. Just joining the call, but could you just speak about if the future direction, is this just an opportunity that came your way, or is this a strategic, you know, fork in the path for FRPH? You know, what is it, what is your thinking and sort of the flavor here going forward on development and what you guys are going to lean into? Hey. Hey, Kevin. This is John Baker. It's really an opportunity that came our way. Oatman approached us. They were kind of at an interesting point in their company's trajectory. Their overall, you know, majority shareholder was looking to wind things down, and we had a relationship with their industrial team, and they approached us about, you know, potentially taking their team on and taking on the projects that they have under consideration. I don't think, you know, a year ago, if you'd asked us if we'd be in the, you know, fee development business, that that's not a strategy we necessarily would have pursued. What we did know, you know, a year ago was that we, in order to get where we wanted to be, we were going to have to make some serious hires and take on, you know, real quality people, kind of what David deVilliers III was to his dad when he was President of FRP Development Corp. The taking on of, you know, additional employees was something we knew we had to do. When this opportunity presented itself and you had a team of people that, you know, we knew, trusted, we knew were really talented and had the opportunity to take them on, the question was, "Okay, the fee development business, you know, what does that look like? What does that look like for us?" That was, you know, essentially our due diligence. You know, what I think, I don't know necessarily that long-term we're going to be in the fee development business. It's a really wonderful muscle to be able to flex if we want to. What I do know is that the projects that they have are going to generate a serious amount of cash for us, and that's going to be able to fuel kind of our more traditional model of developing things in-house. The other benefit of this transaction is, you know, had we kind of proceeded as planned and made additional hires, just assuming that those hires worked out perfectly, which I think anyone who's ever hired anyone, that's not a guarantee. The beauty of, you know, the Oatman team is that they're in a completely different market. It's essentially like opening up a new office, and you know, they are focused on markets that we really haven't been able to touch and wouldn't have been able to touch unless we'd done it, you know, in the kind of more expensive form of a joint venture. Their market contacts in South and Central Florida, Tri-State area really, you know, broadens our market outreach. I think that's kind of the big strategic shift, if anything. Yeah. I'd just add, Kevin, just because you mentioned fork in the road, I just want to be definitely not a fork in the road. I think this is just something that is in place now that will play out with these guys. The long-term vision is to take this team and meld them into our core vision of building assets for ourselves and owning them long-term. There'll be a shift out of, over time, we may do some more fee development projects, but ultimately, they'll roll into our normal development program. To John's point, if we wanted to flex that muscle and do a fee development because it was really attractive, we'd have the capability to do that once in a while. Gotcha. Just to follow up, if I may, like you said, this is, what, doubling the size of the employees. This is a pretty substantial growth. This team gives you an ability. You talked about your vision for the company. What ability ultimately, not necessarily what's in front of you in six months, but what ability do they give you? What is it you envision? What is that capability they give you and what this team will do for FRP in the long run? Kind of what are your ambitions here? One thing to clarify, unless somebody else steals that call, I think I heard you say doubling the size of the employee base, which is, if that was heard, that was not right. We've got a little over 20 today, and we added six new people with this deal. Okay. Thank you for that. What does it enable you to do? What part of the puzzle does this fill in? Not necessarily for 12 months, but more of the vision around what you guys are doing. What have you just unlocked? I think. I'll touch. Yeah, go ahead, David. I'll touch base on one aspect of this. You know, this team is entrenched in South and Central Florida, an area that we don't have development boots on the ground. We just don't have people down there. You know, we're more concentrated up here in Maryland. This group of people really opens us up to a new geographic location in South Florida and also up in New Jersey, New York, Pennsylvania. The Northeast market and that Southern market are two markets that we want to be in. We like the market characteristics. We like the demand drivers. This team allows us to get into those markets really, really well. They already had traction there, and we're jumping on that traction and looking to scale that. This team allows us to do that. It allows us to do that today. It allows us to do that in a year, two years, 10 years. That's something that's really, really exciting. You know, Mark Levy, he worked for Prologis. He worked for JLL. He's worked with Hillco. He's been up and down the East Coast for a while. His black book and the amount of people that he knows is wide and deep. You know, we are going to see a lot more deal flow. We're going to see a lot more opportunities, and we're going to be able to really scour a lot of deals to pick the ones that we really, really like. Those two things, more deal flow and access to these geographical markets that are different than the Mid-Atlantic, are really, really exciting and something that they bring today and 10 years from now. Gotcha. We'll take our next question from David Foley with Estabrook. Your line is open. Thank you. Thank you for taking my question. I guess the previous caller kind of asked a handful of things. How many, I guess, two parts of this. Is there a square footage level that you guys, I mean, I thought a couple of years ago, and this might be more than a couple of years ago, you wanted to get back to around a million square feet. You used the term doubling your NOI. Is there a number that in your minds of saying, "I'd like to get to this level"? Some of that is it seems that, you know, a long time ago, you kind of had some industrial space in the Maryland area, and it was probably a little bit smaller in terms of the buildings you were building. You'd sort of build one building and get it entirely leased before breaking ground on the next one. We're obviously in a bit of a different place here. Is there a sense or a direction that you'd like to go to before you'd say, "Let's catch our breath and, you know, generate enough cash here to perhaps give a dividend," which would make some shareholders elated, as to where you want to be, I guess? I don't know if there's a square footage cap exactly that we have in mind, but I think at a certain point in the next basically five years and beyond, the projects that we have on hand are going to be developing or generating, I think, more cash than we'd feel comfortable employing year in, year out. That's when essentially, not that we'd be a mature company, but when you've got more cash than you have projects to deploy it in, that's when you're returning capital to shareholders. Yeah. David, just so you know, and I'm sure it's pretty clear, this transaction, you know, we would have ended up buying the extra 10% and 20% of Lakeland and Davie, you know, upon stabilization. That comes in. That would have added, you know, that kind of was already in our square footage. We're not really adding any square feet with the other projects in this deal because we'll sell them in the next three to four years. They'll just be developed and sold and collect the promotes and generate the cash for future projects. I think in my mind, I think we've kind of said that in the next few years, we think we'll be at like $1.2 billion, with the projects in the pipeline. I could see, you know, five more years after that, some adding another $750 million- $1 billion, I think, is probably in our program. In 10 years, we could be at around $2 billion. That the apartment sort of component of the company is sort of in a holding pattern until that market gets more attractive in what is remaining in the DC area and perhaps in some other places where you've made some investments. I don't know about holding pattern. I think there's still apartment markets that we are excited about and don't want to, you know, completely abandon. I think we're really happy with Greenville. We've got a project that we've invested in right outside of Fort Myers. I think, you know, as we said before, I think our focus is industrial. That is going to be the brunt of our CapEx and equity. I don't think we're abandoning apartments by any stretch of the imagination. Yeah. We do have an active project right now that just broke ground in South Carolina, the Woburn project. We have two multifamily projects that are active, but it's certainly not, to John's point, the heft of what we're actively doing. It's 25% or something of what we're doing. We'll just wait and see on DC. We've got a lot of projects up there to do, but we're not in a hurry to do them until we kind of see the market get better. Yeah. All right. Thank you. Thanks, David. Thanks, David. We'll move next to Stephen Farrell with Oppenheimer. Your line is open. Good afternoon. Hey, Stephen. Hey, Stephen. I just have a quick question on the impact to the income statement here. What will be the cost of overhead of bringing the team on? The team is, you know, it's kind of shifted over time, but I think the cost of the team is probably going to be somewhere in the $3.5 million- $4 million range annually. We'll collect each year somewhere around half of that. I'm just going to use round numbers in development fees that'll cover that cost. You're looking at probably a net $1.5 million or so, $2 million. You mentioned, for now, you're just going to finish these, the other three projects you'll do as develop to sell and focus on your own FRP developments. Is there more bandwidth to maybe increase? The goal is, what, three every two years? It seems like now they got five going on in the pipeline at one time. Is that pace change at all? For in-house projects, no. That's still kind of our North Star right now. It's just that we'll have, you know, on top of that, these projects that are currently under development, and then some of the projects have additional phases that, you know, we have an obligation to see through and an opportunity to see through. It's probably a much better way of saying that. With the future developments, do you think that what you're trying to do would sort of replicate the old structure of when you had the prior industrial developments where they'd have debt and less likely to use joint ventures then? Yeah. I think we're less likely to use joint ventures at this point. I mean, that's sort of the beauty of this team is that the markets we want to be in, which we would have had to joint venture into, now we don't have to. I think beyond what we currently have planned, we expect to see more projects in the South and Central Florida, Tri-State, Pennsylvania area. I think we'll certainly get through this first phase of develop and sell, collect fees, get promotes. I think what you might see after that is kind of a hybrid of our program with theirs where you might do two projects where you're, and maybe bigger projects, certainly different markets where you can bring in institutional capital. You can be the GP on a deal, collect fees, earn a promote, and then you probably put debt on those. From there, you could either sell them, you could buy out your partner, you could own it together. I think this just opens up a lot of possibilities for us. I know it's not a pivot, like you said, but there is a bigger focus on industrial development. Personally, I feel like with the housing in short supply and lack of new developments coming on, now is kind of a better time to be leaning into that side. Do you envision that at all, or are we kind of at the pace that we've been going in the last two years? I don't think we're going to ramp up our multifamily development program. We still have plenty of projects in the hopper. I think that's what we've always considered the beauty of our company and our strategy is, we have irons in several asset class fires. If the apartments are kind of where they were five years ago, there's nothing stopping us from moving ahead with Stewart Phase One, with Anacostia Phase Four, Phase Three. Our goal with any project that we have under development is to be shovel-ready as soon as possible so that when it's time to go, we can go. Yeah. We do have currently, we have a project that's a pretty large project underway. It just broke ground in the last couple of months in South Carolina that we're, I want to say we're about a 70% owner of. Mm-hmm. Then we've got a project in Fort Myers, Florida, where we're a much smaller partner. We're 15%. It's a two-phase project that is a multi-use, mixed-use project with retail and some other things. We're still in there. Actually, if you look compared to the last couple of years, this is probably more active than we've been the last couple of years in the apartments. We're still working on entitlements and things up in DC as we speak. I think we actually, David, you can probably speak to this, just got approval for Phase Three and Phase Four as apartment buildings the way we wanted them and with a timeframe that makes sense. I think it gave us three years to start to break ground on the first one. We're just keeping an eye on that DC ball. If things improve in the market, they're not bad. The rents are fine. We just had a glut of projects come on in our area, two or three projects in the last few years, and those are starting to lease up. Hopefully, that'll get done, and rents will increase, and we'll see a good opportunity to jump back in there. Yeah, we're not rooting against multifamily by any stretch of the imagination. Yeah. No, I echo all that. I mean, I think, you know, industrial is a pillar of our strategy, but, you know, multifamily and other asset classes remain important. I think as everyone has seen, we've always taken a diversified approach to investment and development as a strength. Sometimes we lean in on multifamily, sometimes we lean in industrial, and it really has to do with the market and the opportunity that's there. Multifamily right now in D.C., I don't think it's the right time. Will it be in the future? Probably. We'll be ready for that. Our multifamily project down in Greenville, South Carolina, we got some tax breaks. We got some textile credit money, and the market is there right now. We saw that as an opportunity, and we're pursuing it. We're looking with all of these to make sure that there's a path to long-term value creation. That's kind of our North Star. The things have to pencil. It has to be a good opportunity. It's got to create value. If those boxes check, then it's something that we'll pursue. The number of opportunities for industrial development in Maryland haven't been as abundant as they once were. That's what led to the Florida JVs. This gives you optionality on Tri-State as well. How do you view just the overall market in those areas and risks of overbuilding and kind of doing this acquisition now? If we get into a scenario where we're oversupplied, how are you gauging the risk of this transaction and sort of a market and downturn? Yeah. Yeah, Steve, I think that's a really good question. Obviously, you know, one that we've factored into our investment strategy. Kind of what we've seen is that the big box, 900,000 square foot buildings and above, you know, that have a lot of institutional money behind it, I think there has been some oversupply in that regard. The kind of sandbox we play in, you know, your 100, 150, 250,000 square foot buildings, shallow bay industrial, that's just not at the level of investment required to get institutional capital behind it. You know, it's kind of a pain to develop. I think when you do see institutional capital come in, it's purchasing a building that's already been built and stabilized. Right now, the asset class that has always been our bread and butter is still, you know, relatively undersupplied. These buildings are all spread out, and none of these buildings really are in the same market as the other. Certainly, a downturn—I think I heard you say downturn—is going to affect every market in the country, and it would not be wonderful, obviously. We are mostly a 10% owner in these buildings, and we would be able to carry our weight, and our partners in these deals are big, big players, institutional players. I think we could weather a downturn. We certainly aren't rooting for it, but I think the diversification of locations is helpful in that regard. None of it's overlapping. Again, just last question. I know you mentioned getting to a billion in sum-of-the-parts, and at that point, you'd probably have more cash than you'd be willing to redeploy each year. What is the end game then? Are you building to get to that point and sell or building to get to that point and maintain and do, you know, one-off and lower level of development after that? I think our goal is to just keep getting bigger. We want to grow the value of this company. Everything's for sale, but that's not part of our strategy. We want to invest in quality assets and generate substantial cash flow once we've reached a certain portfolio size. Once we do, if we double the size of our portfolio, it doesn't mean we're going to necessarily double the size of the investment we put out every year. When we reach a point where we're generating more money, then we're going to put back into it. That's where you're going to see a return of capital. Yeah. This next five years is kind of the, you know, the cycle that we're going to draw down cash and invest. Towards the end of that is in the plan is when cash starts to grow pretty, pretty steadily going forward using our normal development investment amount, you know, kind of our staying flat on CapEx. I think to John's point, there's an opportunity there to start looking at returning, you know, shareholders, whether it's repurchases or something else. That's kind of where the eye on the ball is. Let's get through these next few years and get this plan, you know, stabilized and then take a look at it. Yeah. Thank you. That's all I have. Thanks, Stephen. We'll move next to Bill Chen with Rhizome Partners. Your line is open. Bill, you may need to check the mute function on your device or access your handset. All right. Can you help me understand the, you know, on the purchase price? You explained the $10 million. That's, there's a bank account. You know, how much is that really just kind of like dollar for dollar that you took over? Yeah. It was a dollar. That was a yes. Yep. It was a $10 million collateral account, essentially, required by some of the loans under these joint ventures. We We basically just replaced Oatman's $10 million with our $10 million, so it's just our cash. Okay. Gotcha. Can you give an opinion on the $23.6 million? It seems like you took over a bunch of minority interests. You know, love to hear your thought on, you know, like was that at a discount? You know, how do you feel about the positions? You put 10% of Lakeland, 20% of Davie, and then 10% of Delray Beach, which that property seems like it's almost done. Love to hear if you have a thought on that. I mean, Bill, I'll give an opinion of that. Look, we wouldn't, we would not have done this if we didn't think it was a good deal, one. You know, two, I would say that a portion of this purchase price was really about acquiring the team. You know, and that price was sort of based on the fees associated with the projects that they had in the pipeline. There was a piece of it that kind of was the team members. The other part of the purchase price was really, you know, at cost with, let's just say, a 20% premium on the cost. We're stepping in to your point at a time when these buildings are well under development, if not under roof. A lot of the due diligence, legal, all those costs to kind of get it to where it was, were done for us and worth that premium and then some. The purchase price I look at as very, very favorable. The proof is going to be in the next couple of years where we get at least stabilized. We value these things. The ones that we're keeping, Lakeland and Davie, you know, what type of returns, earnings we're getting on those. The other ones, you know, what type of sale price we're getting. The basis that we have in these things, that purchase price, I feel really good about and look forward to seeing what fruit this bears, you know, two, three years down the road when it's stabilized and/or, you know, we sold it. That's helpful. Approximately what is the estimated LTV on some of these projects you're stepping into? LTV, I just want to make sure we're talking about the same kind of loan-to-value? Yeah, yeah. I mean, I can tell you now that all of these are under a construction loan, and all of those are kind of a 55% loan-to-cost. Okay. They're not They're not highly leveraged. Most of these, or all of them, are floating to SOFR. I look forward to seeing what the Fed does, but so far, they're going in a direction that's very helpful to us. Lower construction interest is always better when we're developing these things. If we keep them, I think we've always been very prudent with our permanent financing to make sure the loan-to-value makes sense. If there's a couple of bumps in the road, we're still able to meet the covenants. If not, if we have to pay something down a couple of bucks, we've got the capacity to do it. We're excited about the capital stack now in terms of equity and construction, and look forward to getting these stabilized and making good decisions for permanent financing. That's helpful. I believe you said that these, the other 90, I mean, I know Lakeland, Davie, it's FRP, but the other four, the other majority investors are institutions and endowments, if I heard that correctly earlier? They are. Some are institutional. Others are, I call it, family office investments. I mean, again, we've got Deutsche Bank, PCCP. We've got some good, good partners, and we're excited to know them. I think that there's going to be some good opportunities based on our equity partner side and also our debt partners. We've met people from Trilist and Synovus and City National Bank and Seacoast. Just having those contacts and having access to different players in this market is exciting. I have no further questions. Thank you for that. Thanks, Bill. Thanks, Bill. There are no further questions at this time. I would now like to turn it back to management for any additional or closing remarks. Thank you to everyone for your interest in questions and this transaction and your continued investment in the company. This is a deal that we are really, really excited about, and we intend to deliver on that excitement and hope. Thank you again to everyone. This does conclude today's program. Thank you for your participation. You may disconnect at any time and have a wonderful afternoon.