FRP Holdings, Inc.: Form 10-Q for the period ended Sep 30, 2025

CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the accompanying unaudited consolidated financial statements and related notes in Item 1 and with the audited consolidated financial statements and the related notes included in our annual report on Form 10-K. The statements in this discussion regarding industry outlook, our expectations regarding our future performance, liquidity and capital resources and other non-historical statements in this discussion are forward-looking statements. These forward-looking statements are subject to risks and uncertainties, including the risks and uncertainties described in “Forward-Looking Statements” below and “Risk Factors” on page 5 of our annual report on Form 10-K. Our actual results may differ materially from those contained in or implied by any forward-looking statements. We assume no obligation to revise or publicly release any revision to any forward-looking statements contained in this quarterly report on Form 10-Q, unless required by law.

The following discussion includes non-GAAP financial measures within the meaning of Regulation G promulgated by the Securities and Exchange Commission to supplement the financial results as reported in accordance with GAAP. The non-GAAP financial measures discussed are operating profit before G&A and pro rata net operating income (NOI), adjusted pro rata net operating income, and adjusted net income. The Company uses these metrics to analyze its continuing operations and to monitor, assess, and identify meaningful trends in its operating and financial performance. These measures are not, and should not be viewed as, a substitute for GAAP financial measures. Refer to “Non-GAAP Financial Measure” below in this quarterly report for a more detailed discussion, including reconciliations of this non-GAAP financial measure to its most directly comparable GAAP financial measure.

Executive Overview - FRP Holdings, Inc. is a real estate development, asset management and operating company business. Our properties are located in the Mid-Atlantic and southeastern United States and consist of:

Residential apartments and retail spaces in Washington, D.C. and Greenville, SC;

Warehouse or office properties in Maryland and Florida either existing or under development;

Mining royalty lands, some of which will have second lives as development properties;

Mixed use properties under development in Washington, D.C., Greenville, SC and Florida; and

Properties held for sale.

We believe our present capital structure, liquidity and land provide us with years of opportunities to increase recurring revenue and long-term value for our shareholders. We intend to focus on our core business activity of real estate development, asset management and operations. We are developing a broad range of asset types that we believe will provide acceptable rates of return, grow recurring revenues and support future business. Capital commitments will be funded with cash proceeds from completed projects, existing cash, owned-land, partner capital and financing arrangements. Timing of projects may be subject to delays caused by factors beyond our control.

Reportable Segments

We conduct primarily all of our business in the following four reportable segments: (1) multifamily (2) industrial and commercial (3) mining royalty lands and (4) development.

Multifamily Segment.

As of September 30, 2025, the Multifamily segment included six stabilized joint ventures which own and manage apartment buildings and any associated retail. These assets create revenue and cash flows through tenant rental payments and reimbursements for building operating costs. The Company’s residential units typically lease for 12 – 15-month lease terms. If no notice to move out or renew is made, then the leases go month-to-month until notification of termination or renewal is received. Renewal terms are typically 9 – 12 months. The Company also leases retail spaces at apartment/mixed-use properties. The retail leases are typically 10 - 15-year leases with options to renew for another five years. Retail leases at these properties also include percentage rents which collect on average 3-6% of annual sales when a tenant exceeds a breakpoint stipulated by each individual lease. All base rent revenue is recognized on a straight-line basis. The major cash outlays incurred in this segment are for property taxes, full service maintenance, property management, utilities and marketing. The six multifamily properties are as follows:

Industrial and Commercial Segment.

The Industrial and Commercial segment owns, leases and manages commercial properties. These assets create revenue and cash flows through tenant rental payments, lease management fees and reimbursements for building operating costs. The Company’s industrial warehouses typically lease for terms ranging from 3 – 10 years often with one or two renewal options. All base rent revenue is recognized on a straight-lined basis. All of the commercial warehouse leases are triple net and common area maintenance costs (CAM Revenue) are billed monthly, and insurance and real estate taxes are billed annually. Office leases are also recognized on a straight-lined basis. The major cash outlays incurred in this segment are for operating expenses, real estate taxes, building repairs, lease commissions and other lease closing costs, construction of tenant improvements, capital to acquire existing operating buildings and closing costs related thereto and personnel costs of our property management team.

As of September 30, 2025, the Industrial and Commercial Segment includes five commercial properties owned by the Company in fee simple as follows:

1) 34 Loveton Circle in suburban Baltimore County, MD consists of one office building totaling 33,708 square feet which is 59.3% occupied (25% of the space is occupied by the Company for use as our Baltimore headquarters). The property is subject to commercial leases with various tenants.

2) 155 E. 21st Street in Duval County, FL was an office building property that remains under lease through March 2026. We permitted the tenant to demolish all structures on the property during 2018.

3) Cranberry Run Business Park in Harford County, MD consists of five industrial buildings totaling 267,737 square feet which are 46.8% leased and occupied. The property is subject to commercial leases with various tenants.

4) Hollander 95 Business Park in Baltimore City, MD consists of three industrial buildings totaling 247,340 square feet and two ground leases that are 100.0% leased and occupied.

5) 755 Chelsea Road in Harford County, MD is a 258,279 square foot speculative industrial building. Our Development segment completed construction and it moved to this segment as of April 1, 2025.

Management focuses on several factors to measure our success on a comparative basis in this segment. The major factors we focus on are (1) net operating income growth, (2) growth in occupancy, (3) average annual occupancy rate (defined as the occupied square feet at the end of each month during a fiscal year divided by the number of months to date in that fiscal year as a percentage of the average number of square feet in the portfolio over that same time period), (4) tenant retention success rate (as a percentage of total square feet to be renewed), (5) building and refurbishing assets to meet Class A and Class B institutional grade classifications, and (6) reducing complexities and deferred capital expenditures to maximize sale price.

Mining Royalty Lands Segment.

Our Mining Royalty Lands segment owns several properties comprising approximately 16,640 acres currently under lease for mining rents or royalties (excluding the 4,280 acres owned by our Brooksville joint venture with Vulcan Materials). Other than one location in Virginia, all of these properties are located in Florida and Georgia. The Company leases land under long-term leases that grant the lessee the right to mine and sell sand and stone deposits from our property in exchange for royalty payments. A typical lease has an option to extend the lease for additional terms. The typical lease in this segment requires the tenant to pay us a royalty based on the number of tons of mined materials sold from our property during a given fiscal year multiplied by a percentage of the average annual sales price per ton sold. As a result of this royalty payment structure, we do not bear the cost risks associated with the mining operations, however, we are subject to the cyclical nature of the construction markets in these states as both volumes and prices tend to fluctuate through those cycles. In certain locations, typically where the sand and stone deposits on our property have been depleted but the tenant still has a need for the leased land, we collect a minimum annual rental amount. In the year ended December 31, 2024, aggregate royalty tons sold were 9.6 million.

The major expenses in this segment are comprised of collection and accounting for royalties, management’s oversight of the mining leases, land entitlement for post-mining uses and property taxes at our non-leased locations and at our Grandin location which, unlike our other leased mining locations, are not entirely paid by the tenant. As such, our costs in this business are very low as a percentage of revenue, are relatively stable and are not affected by increases in production at our locations. Our current mining tenants are Vulcan Materials, Martin Marietta, Cemex, Summit Materials and The Concrete Company.

Additionally, these locations provide us with opportunities for valuable “second lives” for these assets through proper land planning and entitlement.

Significant “Second life” Mining Lands:

24

In late 2023, the Central Florida Expressway Authority (CFX) used its eminent domain power to take title to approximately 27.6 acres from the southern boundary of a parcel of the Company’s approximately 1,196-acre Lake Louisa property that is leased to Cemex. As required by Florida law, CFX deposited $2,582,000 into the registry of the Court, representing CFX’s good faith estimate of the value of the condemned property. As the Company’s tenant, Cemex is claiming a portion of the funds ultimately paid by CFX as business damages. The Company is litigating with CFX over the value of the condemned property. The condemnation proceeding is not expected to impact the lease with Cemex.

Development Segment.

Through our Development segment, we own and are continuously monitoring for their “highest and best use” several parcels of land that are in various stages of development. Our overall strategy in this segment is to convert all our non-income producing lands into income production through (i) an orderly process of constructing new commercial and residential buildings for us to own and operate or (ii) a sale to, or joint venture with, third parties. Additionally, our Development segment will purchase land or form joint ventures on new developments of land not previously owned by the Company.

Revenues in this segment are generated predominately from land sales and interim property rents. The significant cash outlays incurred in this segment are for land acquisition costs, entitlement costs, property taxes, design and permitting, the personnel costs of our in-house management team and horizontal and vertical construction costs.

Development Segment – Industrial and Commercial Projects under Development.

At September 30, 2025, this segment owned the following future development parcels:

1) 54 acres of land that will be capable of supporting up to 635,000 square feet of industrial product located at 1001 Old Philadelphia Road in Aberdeen, MD (Crouse land adjacent to Cranberry Business Park).

2) 170 acres of land located at 765 Mechanics Valley Road in Cecil County, MD that can accommodate 900,000 square feet of industrial development.

We also have three properties that were either spun off to us from Florida Rock Industries in 1986 or acquired by us from unrelated third parties. These properties, as a result of our “highest and best use” studies, are being prepared for income generation through sale or joint venture with third parties, and in certain cases we are leasing these properties on an interim basis for an income stream while we wait for the development market to mature.

Development Segment - Significant Investment Lands Inventory:

25

Development Segment - Investments in Joint Ventures

The third leg of our Development Segment consists of investments in joint ventures for properties in development. The Company has investments in joint ventures, primarily with other real estate developers which are summarized below:

Joint ventures where FRP is not the primary beneficiary (including those in the Multifamily Segment) are not consolidated and are reflected in the line “Investment in joint ventures” on the balance sheet and “Equity in loss of joint ventures” on the income statement. The following table summarizes the Company’s investments in unconsolidated joint ventures (in thousands):

The major classes of assets, liabilities and equity of the Company’s unconsolidated joint ventures as of September 30, 2025 are summarized in the following two tables (in thousands):

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The following table presents the calculation of the Company's pro rata share of certain balance sheet items by segment as of September 30, 2025:

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Third Quarter Highlights and Recent Developments

• 51% decrease in Net Income ($0.7 million vs $1.4 million) due largely to expenses related to the Altman Logistics platform acquisition ($1.3 million) partially offset by higher mining royalties and improved results in Equity in Loss of Joint Ventures (excluding the Altman acquisition expenses, adjusted Net Income was up $0.3 million).
• 16% decrease in pro rata NOI ($9.5 million vs $11.3 million) primarily due to a non-recurring $1.9 million minimum royalty payment in last year's third quarter. This one-time, catch-up payment applied to the prior twenty-four months when the tenant failed to meet a production requirement contained in the lease. The revenue from this payment was straight-lined over the life of the lease. Excluding the $1.9 million payment in last year, adjusted pro rata NOI was up $0.1 million this quarter versus last year's same quarter.
• 3% decrease in the Multifamily segment’s pro rata NOI primarily due to lower NOI at the Maren from higher uncollectable revenue along with higher operating costs and property taxes.
• 25% decrease in Industrial and Commercial segment NOI primarily due to vacancies from an eviction of one tenant and lease expirations.
• 26% decrease in Mining Royalty Lands segment NOI from the aforementioned $1.9 million minimum royalty payment in the third quarter of 2024. Excluding the $1.9 million payment in last year, adjusted pro rata NOI was up $0.5 million or 16% this quarter versus last year's same quarter.
• Entered into a joint venture agreement with Strategic Real Estate Partners ("SREP"), a private real estate development firm which specializes in industrial real estate development, to develop 377,892 square feet in two warehouses in Lake County, Florida near Orlando, with options for investment in additional industrial warehouses on adjacent properties in the future.
• Subsequent to the end of the quarter, on October 21, 2025, the Company acquired the business operations and development pipeline of Altman Logistics Property, LLC, including two projects already majority-owned by FRP Holdings as well as minority interests in a portfolio of institutional grade assets under development.

Executive Summary and Analysis

Results for the first nine months were in line with the expectations we outlined earlier this year. Net income is down for this calendar year primarily due to legal expenses associated with our recently announced acquisition of Altman Logistics. On an NOI basis, year-to-date results trailed our 2024 performance primarily due to the one-time $1.9 million catch-up payment received in the third quarter of last year.

Looking forward to next quarter and beyond, we are focused on laying the foundation for long-term earnings and NOI growth. Leasing and occupying the industrial and commercial vacancies accumulated over the past year will be key drivers of both these metrics. Over the next five years, though, our most significant growth will come from executing on projects within our development pipeline. This includes advancing development entitlements in Maryland to ensure these projects are shovel-ready in 2026, continuing to deliver on our active developments in Florida and South Carolina, and filling the newly developed spaces with tenants.

Essential to any discussion of future growth for the Company is our acquisition of Altman Logistics, which closed subsequent to the end of the quarter. Altman was the Company’s partner on our first two industrial joint venture in Florida. This transaction is an important step toward scaling the Company and expanding beyond our traditional in-house development footprint into key growth markets, especially Florida and New Jersey. The additional cashflows generated from the future sale of our minority interests acquired in the Altman transaction will help fuel our newly expanded development platform. This combination will be the driver for the Company’s next decade of growth.

Comparative Results of Operations for the three months ended September 30, 2025 and 2024

Consolidated Results

(dollars in thousands)

30

Net income for the third quarter of 2025 was $662,000 or $.03 per share versus $1,361,000 or $.07 per share in the same period last year. Excluding the Altman acquisition expenses, adjusted Net Income was up $281,000 . Pro rata NOI for the third quarter of 2025 was $9,523,000 versus $11,272,000 in the same period last year. Excluding the $1.9 million payment in last year, adjusted pro rata NOI was up $104,000 this quarter versus last year's same quarter. The third quarter of 2025 was impacted by the following items:

• Operating profit decreased $1,720,000 primarily due to $1,281,000 of expenses related to the Altman Logistics platform acquisition. The pro rata operating profit of the Multifamily segment increased however the consolidated portion of the Multifamily segment (Dock/Maren) decreased $404,000 due to uncollectable revenue and higher operating expenses and property taxes. The Industrial and Commercial segment operating profit declined $501,000 due to $207,000 higher depreciation from completion of our new Chelsea warehouse along with lower occupancy due to a tenant default and non-renewing leases. Mining Royalty Land's segment operating profit increased $438,000 due to higher royalty tons and revenues less related depletion.
• Net investment income increased $65,000 because of higher income from our lending ventures ($465,000) mostly offset by reduced earnings on cash equivalents ($400,000).
• Equity in loss of Joint Ventures improved $614,000 due to improved results of our unconsolidated joint ventures. Results improved at Bryant Street ($255,000) and BC Realty ($401,000) both due to higher revenues and lower variable rate interest expense.
• Pro rata NOI decreased $1,749,000 primarily due to the same quarter last year including a catch-up, minimum royalty payment of $1.9 million that applied to the prior twenty-four months as the tenant failed to meet a production requirement contained in the lease. This revenue was straight-lined over the life of the lease. Excluding the $1.9 million payment in last year, adjusted pro rata NOI was up $104,000 this quarter versus last year's same quarter.

Multifamily Segment (Pro rata consolidated and pro rata unconsolidated)

The combined consolidated and unconsolidated pro rata net operating income this quarter for this segment was $4,570,000, down $152,000 or 3% compared to $4,722,000 in the same quarter last year. Most of this decrease was from $177,000 lower NOI at the Maren due to increased uncollectable revenue along with higher operating costs and property taxes.

Multifamily Segment (Consolidated - Dock 79 & The Maren)

Total revenues for our two consolidated joint ventures were $5,556,000, a decrease of $126,000 versus $5,682,000 in the same period last year. Total operating profit before G&A for the consolidated joint ventures was $1,155,000, a decrease of $404,000, or 26% versus $1,559,000 in the same period last year primarily due to increased uncollectable revenue along with higher operating costs and property taxes at the Maren.

Multifamily Segment (Pro rata unconsolidated)

Our Multifamily Segment has four unconsolidated joint ventures (Bryant Street, The Verge, Riverside, and .408 Jackson). Riverside was moved from the Development segment to the Multifamily segment in 2022, Bryant Street and .408 Jackson moved as of the beginning of 2024 and The Verge moved effective July 1, 2024, each upon reaching lease up stabilization.

For our four unconsolidated joint ventures, pro rata revenues were $5,440,000, an increase of $311,000 or 6% compared to $5,129,000 in the same period last year. Pro rata operating profit before G&A was $621,000, an increase of $299,000 or 93% versus $322,000 in the same period last year. The increase was due to improved occupancy at The Verge and Bryant Street and higher revenues at .408 Jackson.

Industrial and Commercial Segment

Shell construction on our 258,279 square foot spec warehouse project in Aberdeen, MD on Chelsea Road was completed effective April 1, 2025 and is in the lease-up phase. We have ten buildings in service at four different locations totaling 773,356 square feet of industrial and 33,708 square feet of office of which 48.6% was leased and occupied at September 30, 2025. Excluding Chelsea these assets were 72.4% leased and occupied during the quarter compared to 95.6% leased and occupied during the same quarter last year primarily due to an eviction for failure to pay rent by one tenant and lease expirations. Total revenues in this segment were $1,229,000, down $226,000 or 16%, over the same period last year. Operating profit before G&A was $341,000, down $501,000 or 60% over the same quarter last year due to $216,000 of depreciation and $40,000 of operating costs at Chelsea along with the lower occupancy. Net operating income in this segment was $904,000, down $305,000 or 25% compared to the same quarter last year.

Mining Royalty Lands Segment Results

Total revenues in this segment were $3,689,000, an increase of $490,000 or 15% versus $3,199,000 in the same period last year. Royalty tons were up 6.5%. Royalty revenue per ton increased 5% over the same period last year. Total operating profit before G&A in this segment was $3,384,000, an increase of $438,000 versus $2,946,000 in the same period last year. Net operating income was $3,756,000, down $1,347,000 or 26% compared to the same quarter last year as higher revenues were more than offset by a $1,835,000 decrease in unrealized revenues. The unrealized revenue decrease is due to the same quarter last year including a catch-up, minimum royalty payment of $1.9 million that applied to the prior twenty-four months as the tenant failed to meet a production requirement contained in the lease. This revenue was straight-lined over the life of the lease.

Development Segment Results

(dollars in thousands)

34

With respect to ongoing Development Segment projects:

• We are the principal capital source to develop 344 residential lots on 110 acres in Harford County, MD. We have funded $27.5 million of our $31.1 million total commitment. A national homebuilder is under contract to purchase all 222 townhome lots and 122 single family lots. At quarter-end, 180 lots have been sold and $24.8 million has been returned to the company of which $6.1 million was booked as profit to the Company.
• We entered into two new joint venture agreements in early 2024 with Altman Logistics. The first joint venture is a 201,420 square-foot warehouse development project in Lakeland, FL, and the second joint venture is a two building 183,215 square-foot warehouse redevelopment project in Broward County, FL. We closed on both construction loans in March, 2025 and construction commenced in the second quarter of 2025. Substantial completion of both projects is expected in the second quarter of 2026.
• On May 30, 2025, we secured construction financing for our multifamily joint venture with Woodfield Development, known as Woven. This is our third multifamily project in Greenville, SC. This is an $87.8M project with 214 units and 13,500 square feet of ground floor retail that is eligible to receive South Carolina Textile Rehabilitation Credits upon substantial completion and received Special Source Credits equal to 50% of the real estate taxes for a period of 20 years. The project broke ground during the 3rd quarter and substantial completion of the project is expected in late 2027.
• On July 23,2025, we entered into a joint venture agreement with Strategic Real Estate Partners (“SREP”), a private real estate development firm which specializes in industrial real estate development, to develop 377,892 square feet in two warehouses in Lake County, Florida near Orlando, with options for investment in additional industrial warehouses on adjacent properties in the future. Substantial completion of the first warehouse is expected in the fourth quarter of 2026,
• On September 12, 2025, we secured construction financing for the first phase (296 multifamily units and 28,745 square feet of retail) of our Estero joint venture with Woodfield Development, located between Naples and Ft. Myers. Substantial completion is expected late 2027.

Nine Month Highlights

• 37% decrease in Net Income ($3.0 million vs $4.7 million) due to $2 million of expenses related to acquiring the Altman Logistics platform. Excluding the $2 million of Altman acquisition expenses, adjusted Net income was down $0.2 million.
• 1.6% decrease in pro rata NOI ($28.6 million vs $29.0 million). Excluding the $1.9 million payment in last year, adjusted pro rata NOI was up $1.4 million this year.
• Multifamily segment’s pro rata NOI was up slightly as improved results at Bryant Street, .408 Jackon and The Verge were mostly offset by uncollectable revenue along with higher operating costs and property taxes at the Maren.
• 9% decrease in Industrial and Commercial revenue and 14% decrease in that segment’s NOI
• 1.7% decrease in the Mining Royalty Lands' Segment's NOI. Excluding the $1.9 million paynent in last year, adjusted pro rata NOI in this segment was up $1.7 million or 18%.

Comparative Results of Operations for the Nine months ended September 30, 2025 and 2024

Consolidated Results

(dollars in thousands)

Net income for the first nine months of 2025 was $2,950,000 or $.16 per share versus $4,706,000 or $.25 per share in the same period last year. Excluding the $2 million of Altman acquisition expenses, adjusted Net Income was down $231,000. Pro rata NOI for the first nine months of 2025 was $28,575,000 versus $29,036,000 in the same period last year. Excluding the $1.9 million payment in last year, adjusted pro rata NOI was up $1.4 million this year. The first nine months of 2025 were impacted by the following items:

• Operating profit decreased $3,440,000 primarily due to $1,993,000 of expenses related to the Altman Logistics platform acquisition and higher General and administrative expense ($907,000). General and administrative expense increased primarily due to overlapping compensation as a result of the implementation of our executive succession and transition plan that commenced in June, 2024. Industrial and commercial segment operating profit declined $1,057,000 because of a $446,000 increase in depreciation expense from completion of our new Chelsea warehouse, as well as lower occupancy due

to a tenant default and non-renewing leases. Mining Royalty Land's segment operating profit increased $1,034,000 due to higher royalty revenues and the prior year's overpayment deduction of $566,000.

• Net investment income decreased $1,517,000 from reduced earnings on cash equivalents ($1,303,000) and reduced income from our lending ventures ($214,000) primarily due to fewer residential lot sales.
• Interest expense decreased $224,000 compared to the same period last year as we capitalized $215,000 more interest. More interest was capitalized due to increased in-house and joint venture projects under development this quarter compared to last year.
• Equity in loss of Joint Ventures improved $1,947,000 because of improved results at our unconsolidated joint ventures. Results improved at The Verge ($517,000) due to lower rent concessions, improved occupancy and lower interest expense, and also at Bryant Street ($911,000) and BC Realty ($623,000) because of higher revenues and lower variable rate interest expense.

Multifamily Segment (Pro rata consolidated and pro rata unconsolidated)

For ease of comparison all the figures in the tables below include the results for The Verge from prior periods (when this project was still in our Development segment).

The combined consolidated and unconsolidated pro rata net operating income this quarter for this segment was $13,937,000, up $46,000 compared to $13,891,000 in the same period last year. The NOI increase was primarily due to improved results at Bryant Street, .408 Jackson, and The Verge mostly offset by underperformance at Maren due to increased uncollectable revenue along with higher operating costs and property taxes.

Multifamily Segment (Consolidated - Dock 79 and The Maren)

Total revenues for our two consolidated joint ventures were $16,547,000, an decrease of $45,000 versus $16,592,000 in the same period last year. Total operating profit before G&A for the consolidated joint ventures was $3,821,000, a decrease of $606,000, or 14% versus $4,427,000 in the same period last year primarily due to higher operating expenses ($322,000) and property taxes ($254,000).

Multifamily Segment (Pro rata unconsolidated)

Our Multifamily Segment has four unconsolidated joint ventures (Bryant Street, The Verge, Riverside, and .408 Jackson). Riverside was moved from the Development segment to the Multifamily segment in 2022, Bryant Street and .408 Jackson moved as of the beginning of 2024 and The Verge moved effective July 1, 2024, each upon reaching lease up stabilization.

For our four unconsolidated joint ventures, pro rata revenues were $16,225,000, an increase of $1,045,000 or 7% compared to $15,180,000 in the same period last year. Pro rata operating profit before G&A was $1,943,000, an increase of $744,000, or 62% versus $1,199,000 in the same period last year. The increase was due to lease up at The Verge and higher revenues at Bryant Street and .408 Jackson.

Industrial and Commercial Segment

Total revenues in this segment were $3,950,000, down $403,000 or 9%, over the same period last year. Operating profit before G&A was $1,427,000, down $1,057,000 or 43% from $2,484,000 in the same period last year due to $432,000 of depreciation and $70,000 of operating costs at our spec Chelsea warehouse placed in service in April, a write-off of $118,000 unrealized rent receivable and $34,000 deferred leasing commission related to a tenant that defaulted, and the related lower occupancy. Net operating income in this segment was $3,053,000, down $502,000 or 14% compared to the same period last year.

Mining Royalty Lands Segment Results

Total revenues in this segment were $10,532,000, an increase of $1,139,000 or 12% versus $9,393,000 in the same period last year. Royalty revenues in the prior year were impacted by the deduction of royalties to resolve an $842,000 overpayment which we referenced previously. Through the nine months of last year, the tenant withheld $619,000 in royalties otherwise due to the Company. Royalty tons were down 5% primarily due to a decrease at one location that had one-time project specific rail shipments in the prior year. The revenue reduction from the decreased volume was more than offset by increased royalties per ton (up 10.6% excluding the prior year payment deduction) along with the overpayment reduction in the prior year. Total operating profit before G&A in this segment was $9,689,000, an increase of $1,034,000 versus $8,655,000 in the same period last year. Net operating income in this segment was $10,705,000, down $186,000 or 2% compared to the same period last year as higher revenues were more than offset by a $1,317,000 decrease in unrealized revenues (see discussion in the Mining segment's quarterly analysis.

Development Segment Results

(dollars in thousands)

40

Liquidity and Capital Resources. The growth of the Company’s businesses requires significant cash needs to acquire and develop land or operating buildings and to construct new buildings and tenant improvements. As of September 30, 2025, we had $134,853,000 of cash and cash equivalents. As of September 30, 2025 we had no debt borrowed under our $50 million Wells Fargo revolver, $449,000 outstanding under letters of credit and $49,551,000 available to borrow under the revolver.

Cash Flows - The following table summarizes our cash flows from operating, investing and financing activities for each of the periods presented (in thousands of dollars):

Operating Activities - Net cash provided by operating activities for the nine months ended September 30, 2025 was $21,252,000 versus $21,404,000 in the same period last year. The decrease was primarily due to lower net income, less loss in equity of joint ventures, higher income tax payments, mostly offset by higher accounts payable and accrued liabilities due to the timing of construction in progress payments.

Investing Activities - Net cash used in investing activities for the nine months ended September 30, 2025 was $29,826,000 versus $46,974,000 in the same period last year. The $17.1 million decrease was due to a $12.9 million decrease in investment in properties from winding up the Chelsea warehouse construction combined with a $1.0 million decrease in investments in joint ventures due to lower capital calls and lending activity, partially offset by a $4.8 million increase in return of capital from joint ventures. Return of capital from joint ventures increased primarily due to $5.8 million loan repayment and $1.5 million distribution from BC Realty's third party financing, $1.1 million distributions from our Greenville properties while the prior year included a $5 million return from permanent financing at .408 Jackson and higher residential lot sales.

Financing Activities – Net cash used in financing activities was $5,193,000 versus $12,696,000 provided by financing activities in the same period last year due to $12.6 million distribution to noncontrolling interests related to the the planned increase in ownership of our partnerships with Altman Logistics at the construction/stabilization loan closings. Also related to these closings there was $1.4 million paid in debt issuance costs and $7.6 million draws on the loans.

Credit Facilities - On July 21, 2025, the Company entered into a 2023 Amended and Restated Credit Agreement (the "Credit Agreement") with Wells Fargo Bank, N.A. (“Wells Fargo”). The Credit Agreement modifies the Company’s prior Credit Agreement with Wells Fargo, dated December 22, 2023. The Credit Agreement establishes a three-year revolving credit facility with a maximum facility amount of $50 million. The interest rate under the Credit Agreement will be 2.25% over Daily Simple SOFR. A commitment fee of 0.35% per annum is payable quarterly on the unused portion of the commitment. The credit agreement contains certain conditions and financial covenants, including a minimum tangible net worth and dividend restriction. As of September 30, 2025, these covenants would have limited our ability to pay dividends to a maximum of $93.0 million combined.

On March 19, 2021, the Company refinanced Dock 79 and The Maren projects pursuant to separate Loan Agreements and Deed of Trust Notes entered into with Teachers Insurance and Annuity Association of America, LLC. Dock 79 and The Maren borrowed principal sums of $92,070,000 and $88,000,000 respectively, in connection with the refinancing. The loans bear a fixed interest rate of 3.03% per annum, and require monthly payments of interest only with the principal in full due April 1, 2033.

On July 25, 2022 the Greenville partnership at Riverside secured a $32,000,000 loan with a fixed rate of 4.92% from Synovus Bank, replacing the $22,800,000 loan with Truist Bank. It is an eight year loan maturing July 25, 2030. The term coincides with when the opportunity zone holding period lapses in 2030, when a sale could take place and the tax on gain is forgiven.

On December 4, 2023 the Bryant Street partnership secured a $110,000,000 loan with a floating rate equal to SOFR plus 2.9% from Rialto Capital Management, replacing the $132,000,000 loan with Capital One. It is a three year loan with two one-year extensions. A SOFR rate cap was secured at 5.35% from Chatham Financial creating an effective interest rate ceiling of 8.25%. The loan has a floor interest rate of 6.90%. FRP will look to secure a fixed permanent loan in the future when interest rates are more favorable.

On January 30, 2024 the Greenville partnership at .408 Jackson secured a $49,450,000 loan with a fixed rate of 5.59% from Fannie Mae, replacing the $36,000,000 loan with First National Bank. It is a seven year loan maturing February 1, 2031. The interest rate was favorable given the current market conditions and the term coincides with when the opportunity zone holding period lapses in 2030, when a sale could take place and the tax on gain is forgiven. As a result of refinancing, the Company received a $5 million return of capital.

On April 25, 2024 the Verge partnership secured a $68,862,000 loan with a fixed rate of 5.72% from Fannie Mae, replacing the $72,823,000 loan with Truist Bank. It is a seven year loan maturing May 1, 2031. The opportunity zone holding period lapses in 2030, when a sale could take place and the tax on gain is forgiven.

On March 7, 2025 the Lakeland partnership secured a $16.0 million loan with a floating rate equal to SOFR plus 2.75% from Seacoast National Bank. It is a three-year construction/stabilization loan with a two-year conditional extension at SOFR plus 2.50% with an interest rate swap conversion.

On March 13, 2025 the Davie partnership secured a $31.9 million loan with a floating rate equal to SOFR plus 2.75% from Synovus National Bank. It is a three-year construction/stabilization loan with a two-year conditional extension at SOFR plus 2.25%.

On May 30, 2025 the Woven partnership secured a $42.9 million loan with a floating rate equal to SOFR plus 2.85% from Bank of Texas and First Horizon Bank. It is a four-year construction/stabilization loan and includes a one-year conditional extension with principal and interest payments.

On June 16, 2025 the BC Realty partnership refinanced our FRP provided floating rate construction loans on our two office buildings with Symetra Life Insurance Company. This is a 10 year, fully amortizing $10.5M permanent loan, at a fixed interest rate of 6.40%.

On July 23, 2025 the Camp Lake partnership secured a $33.0 million loan at SOFR plus 2.75% from Pinnacle Bank. It is a three-year construction/stabilization loan with two one-year conditional extensions.

On September 15, 2025 the Estero partnership secured a $81.5 million loan at SOFR plus 2.75% from Santander Bank. It is a four-year construction/stabilization loan with two one-year conditional extensions. In addition, there is an $8 million loan at SOFR plus 4.25% from Santander Bank related to future phases.

Cash Requirements – The Company expects to invest $31 million into our existing real estate holdings and joint ventures during the remainder of 2025 and $161 million beyond 2025 for projects currently in our pipeline, with such capital being funded from cash and investments on hand, cash generated from operations, property sales, distributions from joint ventures, or borrowings under our credit facilities.

Non-GAAP Financial Measures.

To supplement the financial results presented in accordance with GAAP, FRP presents certain non-GAAP financial measures within the meaning of Regulation G promulgated by the Securities and Exchange Commission. We believe these non-GAAP measures provide useful information to our Board of Directors, management and investors regarding certain trends relating to our financial condition and results of operations. Our management uses these non-GAAP measures to compare our performance to that of prior periods for trend analyses, purposes of determining management incentive compensation and budgeting, forecasting and planning purposes. We provide Pro rata net operating income (NOI), adjusted Pro rata net operating income, and adjusted Net income because we believe they assist investors and analysts in estimating our economic interest in our consolidated and unconsolidated partnerships, when read in conjunction with our reported results under GAAP. In this quarter, we provided an adjusted Net Income to adjust for the impact of one-time expenses of the Altman Logistics acquisition, which is a material business combination unlike our historical real estate acquisitions or joint ventures where expenses are capitalized. We also provided adjusted net operating income to adjust for the impact of the one-time material royalty payment in the third quarter of 2024 to better depict the comparable results in both the quarter and year to date. Management believes these adjustments provide a more accurate comparison of our on-going business operations and results over time due to the non-recurring, material and unusual nature of these two specific items. These measures are not, and should not be viewed as, a substitute for GAAP financial measures. For ease of comparison all the figures in the tables below include the results for The Verge in the Multifamily segment for all periods shown.

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Critical Accounting Policies – Management’s Discussion and Analysis of Financial Condition and Results of Operations is based upon our condensed consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP”). The preparation of financial statements in conformity with GAAP requires the use of estimates and assumptions that could affect the reported amounts in our condensed consolidated financial statements. Actual results could differ

from these estimates. Please refer to the section of our Annual Report on Form 10-K for the year ended December 31, 2024, entitled "Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies” for a discussion of our critical accounting policies. During the nine months ended September 30, 2025, there were no material changes to these policies.

Interest Rate Risk - We are exposed to the impact of interest rate changes through our variable-rate borrowings under our Credit Agreement with Wells Fargo and our variable rate construction/stabilization loans.

Applicable margin for borrowings at September 30, 2025 under the Wells Fargo Credit Agreement was Daily simple SOFR plus 2.25%. and under our variable rate construction/stabilization loans was Daily SOFR plus 2.75%.

The Company did not have a material amount of variable rate debt at September 30, 2025, so a sensitivity analysis was not performed to determine the impact of hypothetical changes in interest rates on the Company’s results of operations and cash flows.

CONCLUSION REGARDING THE EFFECTIVENESS OF DISCLOSURE CONTROLS AND PROCEDURES

The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company’s reports under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including the Company’s Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), as appropriate, to allow timely decisions regarding required disclosure.

The Company also maintains a system of internal accounting controls over financial reporting that are designed to provide reasonable assurance to the Company’s management and Board of Directors regarding the preparation and fair presentation of published financial statements.

All control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving the desired control objectives.

As of September 30, 2025, the Company, under the supervision and with the participation of the Company's management, including the CEO, CFO and CAO, carried out an evaluation of the effectiveness of the design and operation of the Company's disclosure controls and procedures. Based on this evaluation, the Company’s CEO, CFO and CAO concluded that the Company's disclosure controls and procedures are effective in alerting them in a timely manner to material information required to be included in periodic SEC filings.

There have been no changes in the Company’s internal controls over financial reporting during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024, which could materially affect our business, financial condition or future results. The risks described in our Annual Report on Form 10-K are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.