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FRP Holdings, Inc. (NASDAQ: FRPH) Announces Results for the Third Quarter and Nine Months Ended September 30, 2023
ソース: Nasdaq GlobeNewswire / 08 11 2023 11:18:24 America/Chicago
JACKSONVILLE, Fla., Nov. 08, 2023 (GLOBE NEWSWIRE) -- FRP Holdings, Inc. (NASDAQ-FRPH) –
Third Quarter Operational Highlights (compared to the same quarter last year)
- 29.5% increase in pro-rata NOI ($8.09 million vs $6.24 million)
- Mining royalty revenue increased 24.7%; 19.2% increase in royalties per ton
- 54.2% increase in Asset Management revenue; 58.2% increase in Asset Management NOI
Third Quarter Consolidated Results of Operations
Net income for the third quarter of 2023 was $1,259,000 or $.13 per share versus $480,000 or $.05 per share in the same period last year. The third quarter of 2023 was impacted by the following items:
- Operating profit increased $1,047,000 compared to the same quarter last year due to improved revenues in all four segments.
- Interest income increased $1,512,000 due primarily to an increase in interest earned on cash equivalents ($1,118,000) and increased income from our lending ventures ($349,000).
- Interest expense increased $378,000 compared to the same quarter last year due to less capitalized interest. We capitalized less interest because of fewer in-house and joint venture projects under development this quarter compared to last year.
- Equity in loss of Joint Ventures increased $1,035,000 primarily due to increased losses during lease up at The Verge ($856,000).
Third Quarter Segment Operating Results
Asset Management Segment:
Total revenues in this segment were $1,442,000, up $507,000 or 54.2%, over the same period last year. Operating profit was $520,000, up $255,000 from $265,000 in the same quarter last year. Revenues and operating profit are up because of full occupancy at 1841 62nd Street (compared to 22.7% same period last year) and the addition of 1941 62nd Street to this segment in March 2023. We now have nine buildings in service at three different locations totaling 515,077 square feet of industrial and 33,708 square feet of office. At quarter end, we were 95.6% leased and 95.6% occupied. Net operating income in this segment was $1,096,000, up $403,000 or 58.2% compared to the same quarter last year.
Mining Royalty Lands Segment:
Total revenues in this segment were $3,082,000 versus $2,471,000 in the same period last year. Total operating profit in this segment was $2,509,000, an increase of $509,000 versus $2,000,000 in the same period last year. This increase is the result of increases in revenue at nearly every active location. Net Operating Income this quarter for this segment was $2,837,000, up $501,000 or 21.4% compared to the same quarter last year.
Development Segment:
With respect to ongoing projects:
- We are the principal capital source of a residential development venture in Prince George’s County, Maryland known as “Amber Ridge.” Of the $18.5 million of committed capital to the project, $17.3 million in principal draws have taken place through quarter end. Through the end of September 30, 2023, 175 of the 187 units have been sold, and we have received 19.6 million in preferred interest and principal to date.
- Bryant Street is a mixed-use joint venture between the Company and MRP in Washington, DC consisting of three apartment buildings with ground floor retail and one commercial building which is fully leased. At quarter end, Bryant Street’s 487 residential units were 94.5% leased and 94.5% occupied. Its commercial space was 95.9% leased and 79.1% occupied at quarter end.
- Lease-up is underway at The Verge, and at quarter end, the building was 89.5% leased and 74.1% occupied inclusive of 25 units licensed to Placemaker Management for a short-term corporate rental program. Retail at this location is 45.2% leased. This is our third mixed-use project in the Anacostia waterfront submarket in Washington, DC.
- .408 Jackson is our second joint venture project in Greenville. Leasing began in the fourth quarter of 2022 with residential units 93.4% leased and 86.8% occupied at quarter end. Retail at this location is 100% leased and currently under construction and expected to open this winter.
- Windlass Run, our suburban office and retail joint venture with St. John Properties, Inc. signed a new office lease for 2,752 square feet bringing the office portion of the project to 82.1% leased and 78.3% occupied. Additional retail space at this site is 38.2% leased and 22.9% occupied.
- This past quarter we broke ground on a new speculative warehouse project in Aberdeen, Maryland on Chelsea Road. This Class A, 259,200 square foot building due to be complete in the 3rd quarter of 2024.
Stabilized Joint Venture Segment:
Total revenues in this segment were $5,633,000, an increase of $157,000 versus $5,476,000 in the same period last year. The Maren’s revenue was $2,670,000, an increase of 2.4% and Dock 79 revenues increased $95,000 to $2,963,000 or 3.3%. Total operating profit in this segment was $840,000, a decrease of $66,000 versus $906,000 in the same period last year. During the quarter we experienced water damage to an elevator that resulted in a $100,000 insurance deductible expense. Pro-rata net operating income this quarter for this segment was $2,038,000, down $665,000 or 24.6% compared to the same quarter last year because of the sale of our 20% Tenancy-In-Common (TIC) interest in both properties to Steuart Investment Company (SIC), mitigated by $231,000 in pro-rata NOI from our share of the Riverside joint venture in Greenville, SC.
At the end of September, The Maren was 93.18% leased and 93.94% occupied. Average residential occupancy for the quarter was 95.57%, and 59.70% of expiring leases renewed with an average rent increase on renewals of 3.18%. The Maren is a joint venture between the Company and MRP and SIC, in which FRP Holdings, Inc. is the majority partner with 56.3% ownership.
Dock 79’s average residential occupancy for the quarter was 95.08%, and at the end of the quarter, Dock 79’s residential units were 93.44% leased and 95.74% occupied. This quarter, 71.43% of expiring leases renewed with an average rent increase on renewals of 2.30%. Dock 79 is a joint venture between the Company and MRP and SIC, in which FRP Holdings, Inc. is the majority partner with 52.8% ownership.
During the third quarter of 2022, we achieved stabilization at our Riverside Joint Venture in Greenville, South Carolina. At quarter end, the building was 94.5% leased with 91.5% occupancy. Average occupancy for the quarter was 92.92% with 52.83% of expiring leases renewing with an average rental increase of 8.55%. Riverside is a joint venture with Woodfield Development and the Company owns 40% of the venture.
Nine Months Operational Highlights (compared to the same period last year)
- 26.2% increase in pro-rata NOI ($22.69 million vs $17.97 million)
- Mining Royalties increased 23.8%; 13% increase in royalties per ton
- 46.4% increase in Asset Management revenue; 46.2% increase in Asset Management NOI
Nine Months Consolidated Results of Operations
Net income for the first nine months of 2023 was $2,422,000 or $.26 per share versus $1,809,000 or $.19 per share in the same period last year. The first nine months of 2023 was impacted by the following items:
- Operating profit increased $3,238,000 compared to the same period last year due to improved revenues and profits in all four segments.
- Management company indirect increased $393,000 due to merit increases and new hires along with recruiting costs.
- Interest income increased $5,001,000 due primarily to an increase in interest earned on cash equivalents ($3,637,000) and increased income from our lending ventures ($1,228,000).
- Interest expense increased $1,036,000 compared to the same period last year due to less capitalized interest. We capitalized less interest because of fewer in-house and joint venture projects under development compared to last year.
- Equity in loss of Joint Ventures increased $5,337,000 primarily due to increased losses during lease up at The Verge ($4,096,000) and .408 Jackson ($642,000).
- The first nine months of 2022 included a $874,000 gain on sales of excess property at Brooksville.
Nine Months Segment Operating Results
Asset Management Segment:
Total revenues in this segment were $3,932,000, up $1,246,000 or 46.4%, over the same period last year. Operating profit was $1,225,000, up $618,000 from $607,000 in the same period last year. Revenues and operating profit are up partly because of rent growth at Cranberry Run, but primarily because of full occupancy at 1865 and 1841 62nd Street and the addition of 1941 62nd Street to this segment in March 2023. Net operating income in this segment was $2,726,000, up $862,000 or 46.2% compared to the same period last year.
Mining Royalty Lands Segment:
Total revenues in this segment were $9,628,000 versus $7,779,000 in the same period last year. Total operating profit in this segment was $8,031,000, an increase of $1,592,000 versus $6,439,000 in the same period last year. This increase is the result of the additional royalties from the acquisition in Astatula, Florida, which we completed at the beginning of the second quarter 2022, as well as increases in revenue at nearly every active location. Net Operating Income in this segment was $9,110,000, up $1,737,000 or 24% compared to the same period last year. As reported in a subsequent event note in the 10-Q from the quarter ended June 30, 2023, in August we received notification of an overpayment of $842,000 at a quarry where we share a property line within the pit. The operator incorrectly identified the reserves being mined as belonging to the Company instead of our neighboring landlord. After auditing and confirming the tenant’s findings, the Company has reached a resolution with the tenant to allow the overpayment to be deducted from a portion of future royalties, and we have worked with the tenant to improve processes and controls to prevent an incident of this type and magnitude from occurring in the future. This will impact future royalty revenue and revenue growth until the overpayment is satisfied.
Stabilized Joint Venture Segment:
In the fourth quarter of 2022, as part of our new partnership with Steuart Investment Company and MidAtlantic Realty Partners, we sold a 20% ownership interest in a tenancy-in-common (TIC) of Dock 79 and The Maren for $65.3 million, $44.5 million attributable to the Company, placing a combined valuation of the two buildings at $326.5 million.
Total revenues in this segment were $16,454,000, an increase of $493,000 versus $15,961,000 in the same period last year. The Maren’s revenue was $7,900,000, an increase of 5.7%, and Dock 79 revenues increased $66,000 or .8% to $8,553,000. Total operating profit in this segment was $2,556,000, an increase of $365,000 versus $2,191,000 in the same period last year. Pro-rata net operating income for this segment was $6,212,000, down $1,029,000 or 14.2% compared to the same period last year because of the sale of our 20% TIC interest in both properties to SIC, mitigated by $676,000 in pro-rata NOI from our share of the Riverside joint venture.
At the end of September, The Maren was 93.18% leased and 93.94% occupied. Average residential occupancy for the first nine months of 2023 was 96.11%, and 50.66% of expiring leases renewed with an average rent increase on renewals of 4.86%. The Maren is a joint venture between the Company and MRP and SIC, in which FRP Holdings, Inc. is the majority partner with 56.3% ownership.
Dock 79’s average residential occupancy for the first nine months of 2023 was 94.21%, and at the end of the quarter, Dock 79’s residential units were 93.44% leased and 95.74% occupied. Through the first nine months of the year, 67.90% of expiring leases renewed with an average rent increase on renewals of 3.11%. Dock 79 is a joint venture between the Company and MRP and SIC, in which FRP Holdings, Inc. is the majority partner with 52.8% ownership.
During the third quarter of 2022, we achieved stabilization at our Riverside Joint Venture in Greenville, South Carolina. At end of September, the building was 94.5% leased with 91.5% occupancy. Average occupancy for the first nine months of 2023 was 94.26% with 56.03% of expiring leases renewing with an average rental increase of 10.25%. Riverside is a joint venture with Woodfield Development and the Company owns 40% of the venture.
Summary and Outlook
Royalty revenue for this quarter was up 24.7% over the same period last year, and royalty revenue for the first nine months is up 23.8%. The last three quarters have been the three highest revenue quarters in this segment’s history. Mining royalty revenue for the last twelve months is $12.53 million, a 24.7% increase over the same period last year, and the segment’s highest revenue total over any twelve-month period.
In the Stabilized Joint Venture segment, pro-rata NOI is down for the segment for both the quarter and the first nine months, which is to be expected after selling 20% of our share of Dock 79 and The Maren to SIC. NOI for the two projects as a whole increased 1.0% ($10,163,000 vs $10,063,000) for the first nine months compared to the same period last year. At Dock 79, average occupancy (95.08%) remains in line with historic expectations, but the high renewal rate (71.43%) with reduced increases (2.30%) is consistent with a post-Covid glut in apartment supply in the DC market as evidenced by the negative trade-outs (-4.60%) we’re seeing at that building. The Maren performed slightly better with strong renewals (59.70%) at higher increases (3.18%) and positive trade-outs (4.60%), but at rates lower than we have experienced in the past prior to the second quarter of this year. Riverside in Greenville (which was added to this segment in the third quarter of 2022) has maintained strong occupancy (93.65% LTM) in its first year post-stabilization. Renewal rates for the quarter (52.83%) and year-to-date (56.03%) are consistent with expected results, and the increase on renewals (8.55% for Q3, 10.25% YTD) remain high. Our pro-rata share of NOI at Riverside this quarter was $231,000 and $676,000 for the first nine months.
In our Asset Management Segment, occupancy and our overall square-footage have increased since the third quarter of 2022, leading to a 46.2% increase in NOI for the first nine months compared to the same period last year. We are 95.6% leased and occupied on 548,785 square feet compared to 85.9% occupied on 447,035 square feet at the end of the third quarter of 2022.
As mentioned last quarter and in our recent Investor Day presentation, the heady cocktail of inflation, interest rates, increased construction costs, and a softening in the DC market because of an influx of new apartment projects have led us to shift our development strategy away from new developments in DC for the time being. We are shifting towards (relatively) less capital-intensive projects like warehouse construction, where we can use our cash on hand to finance construction on an all equity basis and develop in-demand industrial product while the interest rates on construction loans keep most development on the sidelines. To that end, we are underway on the construction of a $30 million spec warehouse project at our Chelsea site in Aberdeen, MD. We anticipate shell completion on this 259,200 square-foot building in the third quarter of 2024. We will continue to do the predevelopment work required to prepare the first phase of our partnership with SIC and MRP for vertical construction, but we will pause at that point until interest rates and construction costs come back in line with what’s required to make a reasonable return. We still have the utmost confidence in our assets and the markets in which they thrive. To that end, during the first nine months of 2023 we repurchased 36,909 shares at an average cost of $54.19 per share.
Conference Call
The Company will host a conference call on Thursday, November 9, 2023 at 10:00 a.m. (EDT). Analysts, stockholders and other interested parties may access the teleconference live by calling 1-800-274-8461 (passcode 82391) within the United States. International callers may dial 1-203-518-9814 (passcode 82391). Audio replay will be available until November 23, 2023 by dialing 1-888-567-0675 within the United States. International callers may dial 1-402-530-0417. No passcode needed. An audio replay will also be available on the Company’s investor relations page (https://www.frpdev.com/investor-relations/) following the call.
Investors are cautioned that any statements in this press release 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 include, but are not limited to: the possibility that we may be unable to find appropriate investment opportunities; levels of construction activity in the markets served by our mining properties; demand for flexible warehouse/office facilities in the Baltimore-Washington-Northern Virginia area; demand for apartments in Washington D.C. and Greenville, South Carolina; our ability to obtain zoning and entitlements necessary for property development; the impact of lending and capital market conditions on our liquidity; our ability to finance projects or repay our debt; general real estate investment and development risks; vacancies in our properties; risks associated with developing and managing properties in partnership with others; competition; our ability to renew leases or re-lease spaces as leases expire; illiquidity of real estate investments; bankruptcy or defaults of tenants; the impact of restrictions imposed by our credit facility; the level and volatility of interest rates; environmental liabilities; inflation risks; cybersecurity risks; as well as other risks listed from time to time in our SEC filings; including but not limited to; our annual and quarterly reports. We have no obligation to revise or update any forward-looking statements, other than as imposed by law, as a result of future events or new information. Readers are cautioned not to place undue reliance on such forward-looking statements.
FRP Holdings, Inc. is a holding company engaged in the real estate business, namely (i) leasing and management of commercial properties owned by the Company, (ii) leasing and management of mining royalty land owned by the Company, (iii) real property acquisition, entitlement, development and construction primarily for apartment, retail, warehouse, and office, (iv) leasing and management of residential apartment buildings.
FRP HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands except per share amounts)
(Unaudited)THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, 2023 2022 2023 2022 Revenues: Lease revenue $ 7,509 6,823 21,773 19,850 Mining lands lease revenue 3,082 2,471 9,628 7,779 Total Revenues 10,591 9,294 31,401 27,629 Cost of operations: Depreciation, depletion and amortization 2,816 2,744 8,415 8,510 Operating expenses 2,012 1,967 5,574 5,316 Property taxes 919 1,034 2,745 3,103 Management company indirect 1,059 966 2,938 2,545 Corporate expenses 889 734 3,212 2,876 Total cost of operations 7,695 7,445 22,884 22,350 Total operating profit 2,896 1,849 8,517 5,279 Net investment income 2,700 1,188 8,207 3,206 Interest expense (1,116 ) (738 ) (3,251 ) (2,215 ) Equity in loss of joint ventures (2,913 ) (1,878 ) (10,585 ) (5,248 ) Gain (loss) on sale of real estate (1 ) 141 7 874 Income before income taxes 1,566 562 2,895 1,896 Provision for (benefit from) income taxes 467 178 898 526 Net income 1,099 384 1,997 1,370 Loss attributable to noncontrolling interest (160 ) (96 ) (425 ) (439 ) Net income attributable to the Company $ 1,259 480 2,422 1,809 Earnings per common share: Net income attributable to the Company- Basic $ 0.13 0.05 0.26 0.19 Diluted $ 0.13 0.05 0.26 0.19 Number of shares (in thousands) used in computing: -basic earnings per common share 9,423 9,397 9,423 9,382 -diluted earnings per common share 9,460 9,433 9,463 9,423 FRP HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited) (In thousands, except share data)September 30 December 31 Assets: 2023 2022 Real estate investments at cost: Land $ 141,578 141,579 Buildings and improvements 282,379 270,579 Projects under construction 4,689 12,208 Total investments in properties 428,646 424,366 Less accumulated depreciation and depletion 65,444 57,208 Net investments in properties 363,202 367,158 Real estate held for investment, at cost 10,510 10,182 Investments in joint ventures 154,025 140,525 Net real estate investments 527,737 517,865 Cash and cash equivalents 166,028 177,497 Cash held in escrow 646 797 Accounts receivable, net 1,683 1,166 Unrealized rents 1,452 856 Deferred costs 3,028 2,343 Other assets 583 560 Total assets $ 701,157 701,084 Liabilities: Secured notes payable $ 178,668 178,557 Accounts payable and accrued liabilities 3,689 5,971 Other liabilities 1,886 1,886 Federal and state income taxes payable 704 18 Deferred revenue 1,029 259 Deferred income taxes 67,903 67,960 Deferred compensation 1,395 1,354 Tenant security deposits 889 868 Total liabilities 256,163 256,873 Commitments and contingencies Equity: Common stock, $.10 par value 25,000,000 shares authorized, 9,477,104 and 9,459,686 shares issued and outstanding, respectively 948 946 Capital in excess of par value 67,168 65,158 Retained earnings 343,002 342,317 Accumulated other comprehensive loss, net (328 ) (1,276 ) Total shareholders’ equity 410,790 407,145 Noncontrolling interest 34,204 37,066 Total equity 444,994 444,211 Total liabilities and equity $ 701,157 701,084 Asset Management Segment:
Three months ended September 30 (dollars in thousands) 2023 % 2022 % Change % Lease revenue $ 1,442 100.0 % 935 100.0 % 507 54.2 % Depreciation, depletion and amortization 369 25.5 % 219 23.4 % 150 68.5 % Operating expenses 173 12.0 % 162 17.3 % 11 6.8 % Property taxes 62 4.3 % 53 5.7 % 9 17.0 % Management company indirect 141 9.8 % 109 11.7 % 32 29.4 % Corporate expense 177 12.3 % 127 13.6 % 50 39.4 % Cost of operations 922 63.9 % 670 71.7 % 252 37.6 % Operating profit $ 520 36.1 % 265 28.3 % 255 96.2 % Mining Royalty Lands Segment:
Three months ended September 30 (dollars in thousands) 2023 % 2022 % Change % Mining lands lease revenue $ 3,082 100.0 % 2,471 100.0 % 611 24.7 % Depreciation, depletion and amortization 138 4.5 % 172 7.0 % (34 ) -19.8 % Operating expenses 18 0.6 % 18 0.7 % — 0.0 % Property taxes 181 5.9 % 69 2.8 % 112 162.3 % Management company indirect 137 4.4 % 129 5.2 % 8 6.2 % Corporate expense 99 3.2 % 83 3.4 % 16 19.3 % Cost of operations 573 18.6 % 471 19.1 % 102 21.7 % Operating profit $ 2,509 81.4 % 2,000 80.9 % 509 25.5 % Development Segment:
Three months ended September 30 (dollars in thousands) 2023 2022 Change Lease revenue $ 434 412 22 Depreciation, depletion and amortization 44 47 (3 ) Operating expenses 48 250 (202 ) Property taxes 121 355 (234 ) Management company indirect 665 625 40 Corporate expense 529 457 72 Cost of operations 1,407 1,734 (327 ) Operating loss $ (973 ) (1,322 ) 349 Stabilized Joint Venture Segment:
Three months ended September 30 (dollars in thousands) 2023 % 2022 % Change % Lease revenue $ 5,633 100.0 % 5,476 100.0 % 157 2.9 % Depreciation, depletion and amortization 2,265 40.2 % 2,306 42.1 % (41 ) -1.8 % Operating expenses 1,773 31.5 % 1,537 28.1 % 236 15.4 % Property taxes 555 9.8 % 557 10.2 % (2 ) -0.4 % Management company indirect 116 2.1 % 103 1.9 % 13 12.6 % Corporate expense 84 1.5 % 67 1.2 % 17 25.4 % Cost of operations 4,793 85.1 % 4,570 83.5 % 223 4.9 % Operating profit $ 840 14.9 % 906 16.5 % (66 ) -7.3 % Asset Management Segment:
Nine months ended September 30 (dollars in thousands) 2023 % 2022 % Change % Lease revenue $ 3,932 100.0 % 2,686 100.0 % 1,246 46.4 % Depreciation, depletion and amortization 1,006 25.6 % 683 25.4 % 323 47.3 % Operating expenses 490 12.4 % 441 16.4 % 49 11.1 % Property taxes 185 4.7 % 158 5.9 % 27 17.1 % Management company indirect 396 10.1 % 301 11.2 % 95 31.6 % Corporate expense 630 16.0 % 496 18.5 % 134 27.0 % Cost of operations 2,707 68.8 % 2,079 77.4 % 628 30.2 % Operating profit $ 1,225 31.2 % 607 22.6 % 618 101.8 % Mining Royalty Lands Segment:
Nine months ended September 30 (dollars in thousands) 2023 % 2022 % Change % Mining lands lease revenue $ 9,628 100.0 % 7,779 100.0 % 1,849 23.8 % Depreciation, depletion and amortization 472 4.9 % 416 5.4 % 56 13.5 % Operating expenses 51 0.5 % 50 0.6 % 1 2.0 % Property taxes 324 3.4 % 203 2.6 % 121 59.6 % Management company indirect 390 4.1 % 346 4.4 % 44 12.7 % Corporate expense 360 3.7 % 325 4.2 % 35 10.8 % Cost of operations 1,597 16.6 % 1,340 17.2 % 257 19.2 % Operating profit $ 8,031 83.4 % 6,439 82.8 % 1,592 24.7 % Development Segment:
Nine months ended September 30 (dollars in thousands) 2023 2022 Change Lease revenue $ 1,387 1,203 184 Depreciation, depletion and amortization 140 139 1 Operating expenses 215 541 (326 ) Property taxes 587 1,066 (479 ) Management company indirect 1,822 1,621 201 Corporate expense 1,918 1,794 124 Cost of operations 4,682 5,161 (479 ) Operating loss $ (3,295 ) (3,958 ) 663 Stabilized Joint Venture Segment:
Nine months ended September 30 (dollars in thousands) 2023 % 2022 % Change % Lease revenue $ 16,454 100.0 % 15,961 100.0 % 493 3.1 % Depreciation, depletion and amortization 6,797 41.3 % 7,272 45.6 % (475 ) -6.5 % Operating expenses 4,818 29.3 % 4,284 26.9 % 534 12.5 % Property taxes 1,649 10.0 % 1,676 10.5 % (27 ) -1.6 % Management company indirect 330 2.0 % 277 1.7 % 53 19.1 % Corporate expense 304 1.9 % 261 1.6 % 43 16.5 % Cost of operations 13,898 84.5 % 13,770 86.3 % 128 0.9 % Operating profit $ 2,556 15.5 % 2,191 13.7 % 365 16.7 % 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) because we believe it assists investors and analysts in estimating our economic interest in our consolidated and unconsolidated partnerships, when read in conjunction with our reported results under GAAP. This measure is not, and should not be viewed as, a substitute for GAAP financial measures.
Pro-rata Net Operating Income Reconciliation Nine months ended 09/30/23 (in thousands) Stabilized Asset Joint Mining Unallocated FRP Management Development Venture Royalties Corporate Holdings Segment Segment Segment Segment Expenses Totals Net Income (loss) $ 892 (7,192 ) (816 ) 5,842 3,270 1,996 Income Tax Allocation 331 (2,667 ) (145 ) 2,168 1,212 899 Income (loss) before income taxes 1,223 (9,859 ) (961 ) 8,010 4,482 2,895 Less: Unrealized rents 531 — — 143 — 674 Gain on sale of real estate — — — 10 — 10 Interest income — 3,692 — — 4,515 8,207 Plus: Unrealized rents — — 117 — — 117 Loss on sale of real estate 2 — 1 — — 3 Equity in loss of Joint Ventures — 10,256 298 31 — 10,585 Professional fees - other — — 59 — — 59 Interest Expense — — 3,218 — 33 3,251 Depreciation/Amortization 1,006 140 6,797 472 — 8,415 Management Co. Indirect 396 1,822 330 390 — 2,938 Allocated Corporate Expenses 630 1,918 304 360 — 3,212 Net Operating Income 2,726 585 10,163 9,110 — 22,584 NOI of noncontrolling interest — — (4,627 ) — — (4,627 ) Pro-rata NOI from unconsolidated joint ventures — 4,054 676 — — 4,730 Pro-rata net operating income $ 2,726 4,639 6,212 9,110 — 22,687 Pro-Rata Net Operating Income Reconciliation Nine months ended 09/30/22 (in thousands) Stabilized Asset Joint Mining Unallocated FRP Management Development Venture Royalties Corporate Holdings Segment Segment Segment Segment Expenses Totals Net income (loss) $ 443 (4,953 ) (166 ) 5,311 735 1,370 Income tax allocation 164 (1,837 ) 101 1,969 129 526 Income (loss) before income taxes 607 (6,790 ) (65 ) 7,280 864 1,896 Less: Unrealized rents 223 — (62 ) 153 — 314 Gain on sale of real estate — — — 874 — 874 Interest income — 2,311 — — 895 3,206 Plus: Equity in loss of joint ventures — 5,143 72 33 — 5,248 Interest expense — — 2,184 — 31 2,215 Depreciation/amortization 683 139 7,272 416 — 8,510 Management company indirect 301 1,621 277 346 — 2,545 Allocated Corporate expenses 496 1,794 261 325 — 2,876 Net operating income (loss) 1,864 (404 ) 10,063 7,373 — 18,896 NOI of noncontrolling interest — — (3,212 ) — — (3,212 ) Pro-rata NOI from unconsolidated joint ventures — 1,896 390 — — 2,286 Pro-rata net operating income $ 1,864 1,492 7,241 7,373 — 17,970 The following tables represent the Joint Venture and Development pro-rata NOI by project:
Development Segment: FRP Bryant Street BC FRP .408 Verge Total Nine months ended Portfolio Partnership Realty, LLC Jackson Partnership Pro-rata NOI 9/30/2023 585 3,595 251 350 (142 ) 4,639 9/30/2022 (404 ) 1,853 277 (10 ) (224 ) 1,492 Stabilized Joint Venture Segment: Riverside Total Nine months ended Dock 79 The Maren Joint Venture Pro-rata NOI 9/30/2023 2,825 2,711 676 6,212 9/30/2022 3,316 3,535 390 7,241 
Contact: John D. Baker III Chief Financial Officer 904/858-9100
