Thank you, and good morning. This is John Baker, and I'm Chairman and CEO of FRP Holdings, Inc.

With me today are David deVilliers Jr., our President; John Baker III, our CFO; John Milton, our General Counsel; and John Klopfenstein, our Chief Accounting Officer.

Let me caution those of you who are on the call that any statements made today which relate to the future are, by their very nature, subject to risks and uncertainties that could cause actual results and events to differ materially from those indicated in such forward-looking statements. Additionally, I ask you to review the other risks listed in our SEC filings including, but not limited to, our annual and quarterly reports.

Net income for the third quarter of 2019 was $2,001,000 or $0.20 per share, down from $2,224,000 or $0.22 per share in the same quarter of 2018. As you may recall, last year on May 21, 2018, the company completed the disposition of 40 industrial parcels and 3 additional land parcels to Blackstone for $347.2 million.

Since that time, we have sold a warehouse that was excluded from the original transaction to Blackstone for $11.7 million and an office building for $8.9 million to a third-party.

We made the sale because year-over-year returns on our build and hold industrial business had declined, and prices for such assets were at an all-time high. Our job now is to redeploy those funds prudently and we're off to a good start.

Before I turn it over to David deVilliers to walk you through the projects we're working on, I'd like to point out that our Mining and Royalty properties continue to perform well. Revenue was up 8.3% for the quarter and the initiation of royalties on our Fort Myers properties should bolster this segment going forward.

This quarter marked the sixth

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in Mining revenues, and the royalties collected in the first 9 months are more than we collected in any year prior to 2017. We've invested our cash and short-term bonds, money market funds and preferred equity on The Maren and Bryant Street projects.

As of September 30, we have purchased 159,282 shares in 2019 at an average price of $48.43 per share. Net investment income, including realized gains on some bonds that were called or sold were $2,019,000 for the quarter.

Now David, would you please walk us through the projects we're working on to redeploy the proceeds from the warehouse sale?

Thank you, John, and good day to those on the call this morning. Since John covered the highlights of the Mining and Royalties segment, let me jump into some of the ongoing activities and highlights for the quarter in our other business segments.

So with the second quarter dispositions of our assets at 1502 Quarry Drive and 7030 Dorsey Road for $11.7 million and $8.9 million, respectively, behind us, the company has nearly completed the liquidation of its heritage properties that made up the asset management business segment. Of the 43 buildings owned and operated by the company at the beginning of 2018, all that remains in this particular business asset for now is the company's multi-tenanted home office building in Sparks, Maryland and the vacant lot in Jacksonville, Florida that at one time housed Florida Rock Industries' home office and now remains under lease to Vulcan Materials.

Earlier this year, subsequent to the purchase and after an extensive rehabilitation process, the Cranberry Run Business Park in Harford County Maryland totaling 268,000 square feet was transferred from the Development business segment. And as of the end of this quarter, the business park was 26.1% occupied.

Also transferred from the Development segment was our recently completed 94,350 square feet speculative warehouse building in Baltimore City, Maryland. During this quarter, we completed lease-up to 100% and tenants are expected to occupy the building by the first quarter of 2020.

Total revenues for this business segment were down for the quarter 24.3% to $430,000, with an operating loss of $160,000. This presents a negative variance of some $400,000 over the same period last year due to a higher allocation of corporate expense and the sale of the previously mentioned suburban office building.

With respect to ongoing and new projects in our Development business segment, highlights would include, one, in January this year, the first phase of our joint venture with St. John Properties consisting of 4 buildings totaling 100,300 square feet of single-story office and small bay retail space in Baltimore County, Maryland was placed in service.

At quarter's end, market and leasing efforts have resulted in the project being 44% leased and occupied, which is consistent with the historic absorption in this submarket. At completion, this project will have 329,000 square feet of office and retail space.

Two, our efforts continue before the appropriate government agencies seeking a planned unit development titles for our 118-acre track in Carroll County, Maryland which has been annexed in the town of Hampstead. The project known as Hampstead Overlook calls for a combination of 250 single-family and townhouse building lots.

Third, as an update to our land development ventures, at Hyde Park in Baltimore County, Maryland, to start this off, earlier this year, we received final approval of the development plan for 122 townhouses and 4 single-family building lots. Subsequently, we entered into a contract of sale with a homebuilder for all the lots upon receipt of record flat versus having to complete horizontal development into finished lots.

Due diligence is now complete and settlement is scheduled for some time in the first quarter of 2020 upon our completion of the necessary engineering documents.

Fourth, at the end of the second quarter, we became the principal capital source in another residential development project called Amber Ridge located in Prince George’s County, Maryland. Our commitment for this project is $18.5 million.

As with our Hyde Park venture, the investment includes a charged 10% interest rate and a minimum preferred return of 20%, above which a profit-induced waterfall determines the final split of proceeds. Entitlements are currently being pursued and a National Homebuilder is under contract to purchase 134 of the anticipated 200 lots available upon completion of land development activities.

Next, construction continues in earnest on Phase 2 of our RiverFront on the Anacostia project in Washington, D.C. now known as The Maren.

This mixed-use development will consist of 264 apartments and 7,900 square feet of first floor retail. The building is on budget and slightly ahead of schedule and will be ready to receive its first resident in mid-2020.

Like we did for Phase 1, or Dock 79 as it's now known, this is a joint venture with MidAtlantic Realty Partners, or MRP, which MRP is the major -- excuse me, FRP, is the major partner.

Next, late last year, we entered into a joint venture agreement with MRP to develop the first phase of a mixed-use residential and retail development adjacent to the Red Line Metro Station in Northeast Washington, D.C. known as Bryant Street.

FRP contributed $32 million in common equity and another $23 million in preferred equity to the joint venture. Construction began in February of this year and the first of 4 buildings is scheduled for delivery in the fourth quarter of 2020, with the remaining 3 buildings expected to be complete in mid-2021.

This property is located in a designated opportunity zone, which allows us to defer a significant tax liability associated with last year's warehouse sale. Phase 1 will consist of 488 apartments and 86,000 square feet of first floor and freestanding retail.

Approximately 44,000 square feet of the retail is pre-leased.

We are encouraged that we are finding projects with strong potential for appropriate returns but continue to be resolute to the fact that spending monies realized from the warehouse sale needs to be done carefully and prudently. It's also important to mention that the investment in these projects does not consume all the proceeds, which provides a nice cushion for us to absorb a potential debt turndown in the economy while also providing some dry powder should an extraordinary investment come our way.

It's also important to mention that although we have utilized tax deferral acquisitions such as opportunity zone purchases and 1031 exchanges from proceeds generated by the warehouse platform sale, we are driven to these projects by the baseline economics of their potential development. We will continue to make prudent investment decisions based not on temporary tax advantageous strategies alone but with a guiding principle of return on investment and value to shareholders.

Moving on to our Stabilized Joint Ventures business segment. In July, we completed a partial 1031 like-kind exchange with some of the funds from the earlier mentioned sales of the warehouse and suburban office building by investing $6 million for a 26.649% beneficial interest in a Delaware Statutory Trust, or DST, that owns a 294-unit garden-style apartment community known as Hickory Creek, located in Henrico County, Virginia.

The complex was constructed in 1984 and substantially renovated in 2016. The business plan calls for further rehabilitation to the apartments, generating value-added rents prior to selling of the project after an appropriate hold period.

We receive monthly distributions from the operations at Hickory Creek.

Relative to Dock 79, previously known as Phase 1 of Riverfront on the Anacostia project, the average occupancy for the 9 months just ended was 96.7%. This past quarter, the retention rate was 63.51% and it had an average rental rate increase of 3.19%.

These metrics have exceeded our expectations and last year's performance for the same periods.

Keeping our eyes on resident retention, maximizing rental rates and optimizing expenses continues to be our primary focus. The retail component of Dock 79, which totals approximately 14...

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occupied and 76% leased as of the end of the quarter. The remaining retail space is being actively marketed, but we are quite selective as to vendor and use.

Full retail occupancy is expected in 2020. The 3 existing restaurants have been well received and are experiencing high levels of traffic and related revenues, bolstered this fall by October baseball and a World Series win by the Nationals just last week.

So as the chapter of your company continues to unfold, our strategy remains the same. We look to redeploy proceeds from the May 18 sale of our warehouse platform into assets that allow management to exploit its knowledge and expertise.

I'm sure you'll agree, we have a lot of work to do. Thank you and I'll now turn the call back to John

Thanks, David. And now let's now open up the line to answer any questions any of you may have.

I see that JBG bought the first residences, I think on the other side of the ballpark from Dock 79. Is that -- do you have any sense of what the cap rate was on that?

Or that's a kind of a comparable for Dock 79 [ in the area ]?

David, do you have any intel on that?

A little bit, John. I know it was in the mid-4s, mid to low 4s on the cap rate.

And again, it's on the other side of the stadium. We have the water and certain amenities that they don't have.

But it was a nice building.

Okay. Are you -- I know there's -- the rental strength -- rental rate has been pretty strong.

But is there any concern about multifamily in capital Riverfront, Southwest D.C.? I mean I think I had read something that said there's 7,000 or 8,000 units to be delivered over the next 2 or 3 years.

Does that give you any pause? Or is that -- do you think that's sort of a TBD?

Well, obviously, it kind of is what it is, Curtis. I mean the whole area is growing and becoming much more mature, which I think also helps.

The soccer stadium is now up and running full steam, and they had to kind of get through some of those issues. And the bridge construction is causing a little bit of its own issues.

I think as the whole area continues to mature, I think it will take on a lot of new apartments, and they are under construction. We'll just have to see how it works.

We're a little conservative in our underwriting for The Maren, but we still feel awfully good about the future down there.

Curtis, I would say one comment is that we are absolutely stunned by the occupancy in the first phase, given that there is a major construction project, namely, The Maren, going up 20 feet from a good number of the apartments, and yet, we're full. So there's certainly demand, but as we all know, you can overpopulate just about anything and we'll just have to see.

Yes. And can you just remind me, the NOI that you reported for Dock 79 in the JV segment, that's $1.8 million for the quarter.

That's for 100% of the JV, I guess, right?

That's correct.

And then I guess you had noted, over the 9-month period, there was an increase -- a bump from retail. Did you lease out one of the stores?

Or is it just kind of -- what accounts for that bump? Just...

Curtis, we have not. We still have one of the smallest retail space that is vacant.

And it kind of bumps right up against the new Maren. So we've had a lot of interest there, but we want to kind of get the construction done and open the place up.

I think we'll generate the right -- a better type of tenant there when we get it opened up. But the overage based -- most of that's coming from the overage rents we get from the 3 restaurants.

They were very, very successful this year.

So do you get a share of the sales as well as the [ fixed ]?

Yes. Correct.

Hopefully, October was a good month, given the World Series.

You'll see it when we report the next earnings.

What -- can you say anything more about the DST investment in terms of monthly distributions or the NOI of those buildings?

The idea of this investment, one, was for the 1031 program. The distributions have started as soon as, obviously, we settled.

The property is about 97% occupied. We were there about 1.5 months ago.

And the idea is that, I guess, a lot of the major renovation was done in 2016. But it left a little bit of the easy stuff for us to do, kind of the low-hanging fruit like new countertops and some things like that.

And so they're generating some value-added rental increases. And it's in a great area.

They're looking to hold onto that property, probably somewhere 4 or 5 years. Obviously, it depends on the most opportune time to sell.

And to answer your question, it's about a 5 cap rate, something like that, that we expect will -- the additional rent with the new renovations will just take the rents up and the net operating income up over the next 4, 5 years. So there's some upside to that as well as the tax savings.

Okey-doke. And barring any sort of storms or disruption on the Mining side, would you think that, that $2 million of operating profit is a decent run rate for your -- or is there any kind of seasonal effect where maybe this quarter is strong and fourth quarter is a little softer?

Is it seasonal at all, or is that a decent sort of run rate for the business?

Well, it's a decent run rate for the business. We do have one quarry in Northern Virginia that would definitely be affected by the weather.

Georgia can get some cold weather too. So you would expect it would trail off a little bit in the winter, but not in a big way.

Of course, the more important worry is that if you had a recession that in the construction, activity slowed down. But so far, we aren't seeing that.

Okay. Well, thank you, all, for joining us today.

We look forward to updating you next quarter.