FRP NASDAQ: FRPH executives said 2025 was a “transition year” marked by a major platform expansion, as the company moved to scale its industrial logistics development capabilities and positioned itself for what management described as a new phase focused on execution and cash flow conversion.
2025 results and liquidity
President and Chief Operating Officer David deVilliers III said FRP generated approximately $37.9 million of net operating income (NOI) and $22.1 million of funds from operations (FFO), or $1.16 per share, for the year. He added the company ended 2025 with approximately $144 million of liquidity.
On the balance sheet, deVilliers said FRP finished the year with net debt to enterprise value of approximately 21% and a weighted average interest rate of approximately 5.24%, which he said provides flexibility to fund development and lease-up “without reliance on asset sales.”
Altman acquisition expands development pipeline
DeVilliers said FRP completed the Altman Industrial acquisition late in the fourth quarter for approximately $33.5 million, adding roughly 1.6 million square feet of industrial development pipeline. He said the deal was not included in the company’s original budget, but “significantly expands our platform and strengthens our presence in high conviction logistics markets.”
Chief Executive Officer John Baker III said the Altman Logistics platform and its team “opens up” FRP’s options for where and how it develops, and with whom it partners. He said management expects the acquisition to help drive earnings, operating cash flow, and net asset value.
Segment performance: industrial vacancy, mining stability, multifamily pressures
In the company’s commercial and industrial segment, deVilliers said the portfolio totaled approximately 807,000 square feet and ended the year 47.5% occupied, or 69.9% excluding the new Chelsea building, compared with 95.6% last year. Segment NOI was approximately $875,000 in Q4 and $3.9 million for the year, representing declines of 11.8% and 13.6%, respectively.
DeVilliers attributed the year’s industrial results primarily to lease rollover timing and said leasing velocity was slower than anticipated as tenant decision cycles lengthened. However, he said management views this as “timing within the leasing cycle rather than a change in underlying demand.” He noted roughly 423,000 square feet is available for lease-up, representing about 52% of the segment, and estimated that stabilization could add approximately $3.3 million of incremental annual NOI over the next 24 months.
In Mining and Royalties, deVilliers said NOI was approximately $3.9 million in Q4 and $14.6 million for the year, up 11.5% and 1.5%, respectively. He described the segment as a “durable, high-margin cash flow” generator with minimal capital needs, while noting quarterly results can fluctuate based on timing or non-recurring items.
In multifamily, deVilliers said the portfolio includes approximately 1,827 units across Washington, D.C., and Greenville, South Carolina. NOI totaled approximately $4.2 million in Q4 and $18.1 million for the year, reflecting modest declines of 2.6% and 0.4%, respectively. Average occupancy was about 93%, while economic occupancy was approximately 88%.
DeVilliers said fourth-quarter multifamily results were below expectations due to retail revenue softness (about a $127,000 NOI impact), lower occupancy at Maren (about 89%), and ongoing operating expense pressure. He said South Carolina remained stable with economic occupancy around 92%, while Washington, D.C. remained more competitive due to supply pressure, with economic occupancy around 87%.
Leasing and development priorities
Chief Investment Officer Mark Levy said leasing is “the fulcrum of value creation” for the industrial strategy and outlined steps the company has taken to standardize its leasing approach, including tightening broker coverage, implementing a structured outreach cadence, refining competitive intelligence, and aligning leasing and asset management under a single framework.
Levy said in Maryland, where absorption lagged expectations, FRP recalibrated rent positioning where appropriate and expanded brokerage engagement. He emphasized the company is “underwriting to today’s strike rents and protecting long-term basis rather than forcing velocity at the expense of asset value.”
DeVilliers cited early signs of improvement, including a 15,000-square-foot lease at Cranberry Business Park in Maryland with a year-one face rent 38% higher than the previous tenant, and “final stages” of a lease for over 26,000 square feet at Davie in South Florida with a face rate above underwriting.
On development, deVilliers said FRP’s pipeline represents approximately $441 million in total project costs with expected stabilized incremental NOI of about $30 million over time. He said the company is underwriting projects with target yields on cost of approximately 6.7% or greater, market cap rates of approximately 5.25% or lower, and target internal rates of return in the 15% to 20% range.
Baker said a key development priority is stabilizing three industrial assets in Florida currently under development. He said the company anticipates stabilization of buildings totaling 762,000 square feet in 2028, representing approximately $9.6 million in NOI.
During the Q&A, Baker said FRP’s Florida industrial projects are delivering this summer and that the company’s equity is already funded, with remaining capital needs largely coming from construction loans. CFO Matt McNulty clarified that certain Florida assets (Camp Lake, Lakeland, and Davie) are long-term hold assets where FRP owns 95% to 100%, while other projects tied to the Altman platform (including Delray, Hamilton, and Parsippany) are merchant build-and-sell investments where FRP is “roughly a 10% partner.”
2026 outlook: investment and integration
Looking ahead, deVilliers said FRP expects 2026 NOI of approximately $37.1 million to $37.7 million. He also forecast G&A of approximately $15 million to $16 million as the company integrates the Altman platform and invests in development, asset management, and operating infrastructure to support a larger pipeline.
DeVilliers said G&A as a percentage of NOI could be elevated in 2026, “potentially in the low 40% range,” before declining as leasing accelerates and development stabilizes. Over time, he said management expects G&A to trend toward a “more normalized” range in the low 20% area as operating leverage emerges.
In the multifamily discussion of Washington, D.C., Baker said FRP is competing with nearby new deliveries offering “significant rental concessions,” such as “two-three months,” which has pressured occupancy at Dock, Maren, and Verge. He said FRP has limited concessions to certain cases while noting renewal success in 2025 of about 60% with renewal increases of roughly 2% to 4%. McNulty also referenced legal changes in D.C., including a rental reform act intended to help landlords with eviction-cycle issues, though he said it would take time to see meaningful improvement.
Closing the call, Baker reiterated enthusiasm for the Altman acquisition and said improved leasing activity has increased management’s confidence entering 2026.
About FRP NASDAQ: FRPH
FRP Holdings, Inc NASDAQ: FRPH is an industrial services holding company that provides asset integrity and life-extension solutions to heavy-industry clients. Through its operating subsidiaries, FRP offers a broad suite of non-destructive testing (NDT), inspection services, mechanical maintenance, protective coatings, thermal spray and surface-preparation services. These offerings help clients maintain and extend the service life of critical equipment and infrastructure across multiple sectors.
The company's core activities include ultrasonic, radiographic and magnetic-particle testing, site-based inspections, welding and fabrication support, and specialized coating applications designed to withstand extreme environments.
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