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FRP Holdings Inc (NASDAQ:FRPH)
Q2 2020 Earnings Call
Aug 6, 2020, 1:00 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

[Operator Instructions] I would like to now turn the conference over to Mr. John Baker, Chairman and CEO. Please go ahead.

John D. Baker -- Executive Chairman / Chief Executive Officer

Good morning. This is John Baker II, Chairman and CEO of FRP Holdings. With me today are David deVilliers, Jr., our President; John Baker III, our CFO; John Milton, our General Counsel; John Klopfenstein, our Chief Accounting Officer; and David deVilliers III, our Executive VP.

This call will contain forward-looking statements within the meaning of the Securities Act of 1933 and the Securities and Exchange Act of 1934. Such statements represent management's current views with respect to financial results related to future events and are based on assumptions and expectations that may not be realized and are inherently subject to risks and uncertainties, which cannot be predicted with accuracy and some of which might not even be anticipated. Future events and actual results, financial or otherwise, may differ perhaps materially from the results discussed in such forward-looking statements. Risk factors are discussed in our 10-Q and other SEC filings. We have no obligation to revise or update any forward-looking statements other than imposed by law as a result of future events or new information. You are, therefore, cautioned not to place undue reliance on such forward-looking statements.

Thank you all for joining us this morning. As you've undoubtedly summarized from the press release, we are well along in the remaking of our company after the sale of our warehouses in 2019. During the quarter, we purchased 215,000 shares of our stock at an average price of $41.39. We currently have authorization to continue to purchase up to $8.5 million in additional stock and plan to do so opportunistically. Our quarterly earnings were impacted by the decision to delay our annual stock grants until the annual meeting. The previous grants have been given in December 2018.

Our results were also impacted by COVID-19 as our retail establishments at our Dock 79 investment in Washington were closed during portions of the quarter. And while they are resuming operations today, they are far slower than a year ago, which also impacts our revenues. Our leasing efforts at The Maren had been great, though we have spent heavily to get that penetration. We continue with the development of our mixed-use projects at Bryant Street and a new project called Half Street in Washington, D.C. as well as the two projects we have invested with Woodfield properties in Greenville, South Carolina.

Our cash and investments have remained fairly constant at around $165 million despite these investments. Our aggregates -- royalty segment remain steady at a high level. Revenues were down slightly as we no longer receive double minimum royalties on our Lake Louisa project in central Florida with Cemex as they achieve their goal of permitting the property.

Let me now turn it over to David deVilliers, Jr., our President, so he can walk you through our operations in more detail. David?

David H. deVilliers -- President

Thank you, John, and good day to those on the call this morning. Let me now add a bit of detail to the highlights provided by John in his opening remarks. As of the close of the second quarter, our Asset Management segment consisted of four commercial property: the Cranberry business center in Harford County, Maryland, the completed Hollander spec industrial building in Baltimore, Maryland; the land at 21st Street in Jacksonville, Florida; and lastly, our home office, multi-tenanted office building in Sparks, Maryland.

In June of last year, the company finalized the liquidation of assets that made up our entire warehouse platform of 43 buildings, totaling a bit over 4 million square feet prior to its sale in May of '18. This quarter, we continue to grow the occupancy at Cranberry Run from 54% as of March 31 to 71.9% at quarter's end. The significant $2 million renovation project is now complete, and the upgrades of the buildings have been well received by the market. Total revenues for this business segment were $716,000, up $54,000 over the same period last year, albeit with a different set of assets. Operating profit was $58,000, up $69,000 from an operating loss of $11,000 in the same period last year primarily due to our new spec building at 1801 62nd Street reaching full occupancy. Of note, subsequent to the end of the quarter, on July 31, the warehouse at 1801 62nd Street was sold for $12.3 million, resulting in a gain on sale of $3.8 million, the proceeds of which have been placed in a 1031 exchange fund.

In the Mining and Royalties segment, total revenues were $2,402,000 versus $2,633,000 in the same period last year. Total operating profit as $2,110,000, a decrease of $312,000 versus $2,422,000. The primary reason, as John alluded to in his opening remarks for this decrease in revenue and operating profit is that the double minimum royalties are no longer being paid at Lake Louisa due to our tenant having received the final permit to begin mining in July of 2019. On another note, we sold our Gulf Hammock property during the quarter for $2,510,000 that generated a gain on sale $1.7 million. Our outlook for the short and long-term remains very positive regarding this business segment. Our annualized revenue of $9,174,000 and the revenue for the last 12 months of $9,163,000 would still be the second best year in the history of this business segment.

With respect to ongoing and new projects in our Development segment, highlights include: one, Phase 1 of our joint venture with St. John Properties consisting of four buildings totaling 72,080 square feet of single-story office and 27,950 square feet of small bay retail space in Baltimore County, Maryland, remained 44% occupied overall. Two, our entitlements are ongoing for our project in Hampstead, Maryland, known as Hampstead Overlook, which received concept plan approval this spring for the 255 single-family and townhouse building lots as proposed. Three, is an update to our land development venture at Hyde Park in Baltimore County, Maryland. The first phase of settlement closed in May of this year on 122 townhouse and four single-family building lots. The settlement produced $2.67 million in principal and accrued interest payments. Four, relative to our residential development project called Amber Ridge, located in Prince George's County, Maryland, entitlements are currently being pursued and two national homebuilders are under contract to purchase all of the 187 lots after we complete the infrastructure development. The first section of lots are scheduled to be turned over in the second quarter of 2021.

Five, Phase II of our RiverFront on the Anacostia project in Washington, D.C., now known as Maren, welcomed its first tenant in late March. As John mentioned in his opening remarks, leasing activities and occupancies have exceeded our projections. This 14-story mixed-use development consists of 264 apartments and 6,937 square feet of first floor retail. As with Dock 79, this is a joint venture with MidAtlantic Realty Partners, or MRP, in which FRP is the major partner. As of June 30, Maren was 98% complete with the top floor housing, the pool and amenities package being the only remaining part to fully complete. Nonetheless, the building was 45% leased and 23% occupied as of the end of June. Since then, the Maren has maintained a robust leasing and occupancy trend. As of August 3, the project was 60.98% leased and 47.73% occupied. Finally, we executed the lease for the large retail suite totaling 5,111 rental square feet at the end of June.

Moving on, the first phase of our mixed-use residential and retail development in northeast Washington, D.C., known as Bryant Street is now 67% complete as of June 30, with the first of four buildings scheduled delivery in the fourth quarter of this year, and the remaining three buildings expected to be complete in the fourth quarter of 2021. This phase consists of 487 apartments and 85,681 square feet of first floor and freestanding retail. Approximately 44,000 square feet of the retail is pre-leased. The project is running on time and is within budget and is located in a designated opportunity zone, which allows us to defer a significant tax liability associated with the 2018s warehouse platform sale. This project is also a joint venture with MRP with FRP being the major partner.

Next, in December of 2019, the company contributed $37.3 million of equity into a new joint venture agreement with MRP for the development of a mixed-use project known as 1800 Half Street. The development is located in the Buzzard Point area of Washington, D.C., less than 0.5 mile downriver from Dock 79 and the Maren. It lies directly between our two-acre site on the Anacostia, currently under lease with Vulcan Materials and Audi Field, the home stadium of the D.C., United soccer team. The 10-story structure will have 344 apartments and 11,246 square feet of ground floor retail. The project is a qualified opportunity zone investment and will defer just over $10 million in taxes associated with the 2018 warehouse platform sale. During the first quarter of this year, the venture purchased the land and is currently in the process of demolishing the existing structure and making other preparations for vertical construction that will start during the third quarter of this year.

Also, in December of 2019, we entered into a two joint venture agreement with Woodfield Development, a new strategic partner to invest in two separate and distinct development projects in Greenville, South Carolina. Woodfield has vast experience development residential and mixed projects throughout the southeast and Washington, D.C. The first project named Riverside is a 200 unit multifamily project in which FRP has contributed $6.2 million in exchange for a 40% ownership interest. Construction began during the first quarter of this year and is expected to be complete in the third quarter of 2021. This is a qualified opportunity zone investment.

Our second project with Woodfield is a 227 unit mixed-use development called.408 Jackson, a nod to Shoeless Joe Jackson, who actually grew up on this site and which is adjacent to Greenville's Minor League Baseball stadium, which houses an affiliate of the Boston Red Sox. This project will also include 4,700 square feet of retail space. FRP has received a 40% ownership position in this project in exchange for $9.7 million. Closing on the property occurred at the end of April, construction has begun and the project should be ready to receive its first tenant in the second quarter of 2022. This project is also a qualified opportunity investment and along with Riverside allows us to defer a total of $4.3 million in taxes.

Moving on to our Stabilized Joint Venture business segment. Relative to Dock 79, net operating income for the quarter was $1,092,000, down 11% over the same period last year. Average occupancy during the quarter for this part was 91.5%, down from 93.52% quarter before. This past quarter's retention rate was 62.3%, up from 54% for the previous quarter, but with no rate increases due to a statutory prohibition by the District of Colombia due to COVID, which is currently expected to last through the end of the year. We will continue to renew and sign tenants at their existing rates, preferring terms of occupancy over chasing rent growth.

The retail component of Dock 79 which totals approximately 14,600 square feet remained at 76% occupied and 76% leased as of the end of the quarter. However, our retail tenants were shut down as a result of the COVID-19 pandemic with exception of one of the restaurants being partially opened for carryout only. All three retail tenants were allowed to open, albeit nowhere near capacity as of June 22, and rent payments have resumed for the most part. Our key guiding principle in this situation is maintaining open communication, while preserving our rights as landlord, while we wait to see what the future holds for these businesses. The goal is to assist our existing tenant base in ultimately regaining their financial viability. Retenanting those retail spaces would be expensive and time consuming. We partnered with these existing tenants because we believed in their concepts and business plans, and we continue to do so. The remaining retail space had an executed letter of intent to lease prior to the COVID-19 breakout. The suite is now back on the market. Dock 79 is the joint venture between MRP in which FRP is the majority partner.

Relative to the new asset introduced to this business segment in July of last year, the 294-unit Hickory Creek apartment complex in Richmond, Virginia, things are pretty much status quo in the second quarter of this year with a 94.6% occupancy as of June 30. The distribution was on time and for the anticipated amount of $85,000. Our $6 million investment in this project is a part of a 1031 like-kind exchange. The complex was constructed in 1984 and substantially renovated in 2016. The business plan calls for further refurbishments to the interiors of the apartments and the increasing of rents prior to selling the project at a greater value after an appropriate hold period.

While FRP is fortunate to have a focused and talented team that has recently been quite active in leasing and executing acquisitions and sales across multiple business segments, it's important to note that we, like the rest of society, have been stunned by the state of the world. We are operating under a new set of rules to the COVID pandemic. Our operations, communications, workflow and access have all changed, but we are committed to our mission and remain mindful of the unprecedented impact COVID has and is having on us all. We're considered an essential business and continue to operate at full capacity while hitting the guidance of the federal government and orders issued by the state and local authorities. Our offices at Loveton Circle are open for limited activities on site, and all employees are set up to operate fully from their homes. When required, our employees are physically distancing and employing other measures to ensure the protection of the folks with whom we interact with as we go about our business.

At the end of the first quarter, requests for forbearance were limited to four tenants, three retail tenants at Dock 79 and one small office tenant whose business focus is related to hotel services. At the end of the second quarter, all but one of the above tenants had made significant project -- progress toward clearing late rents and expenses. To be sure, FRP is not unscathed by COVID-19. However, the retail tenants of Dock 79 represent 6% of the company's net operating income. And for the most part, appear to be faring better than most in their category. The vast majority of our tenants continue to operate, though perhaps on revised schedules and conditions, and they continue to pay rent as usual.

At this point, we have been given no reason to expect this situation to change. We're mindful of the challenges that are facing our tenants, partners and employees every day, and we strive to be a good steward of our stockholders' faith as well as the trust and support of our business partners. COVID-19 marks a new beginning and will change the way we behave personally and professional, but with all challenges come opportunity.

Thank you. And I'll now turn the call back to John.

John D. Baker -- Executive Chairman / Chief Executive Officer

Thanks, David. Now let's turn it over to our guests to see if there are any questions that they might have of us at this time.

Questions and Answers:

Operator

Thank you. At this time we'll open the floor for questions. [Operator Instructions] Our first question comes from Curtis Jensen with Robotti & Company.

Curtis Jensen -- Robotti & Company -- Analyst

Hey. Good morning fellows. Can you hear me all right?

John D. Baker -- Executive Chairman / Chief Executive Officer

Yes. Good morning.

David H. deVilliers -- President

Good morning.

Curtis Jensen -- Robotti & Company -- Analyst

Does any -- just kind of a general question, I mean, does any of what's happening in terms of, not only the pandemic, but kind of social unrest in large cities, I mean, does it give you pause about the future of urban multifamily? Or, I mean, do you sort of see this as a passing phase?

John D. Baker -- Executive Chairman / Chief Executive Officer

It would have to give you pause because it's a complete unknown at this point, Curtis, but if there's one place that's going to be vibrant, I would say it would be Washington, D.C., and that, of course, is the -- really the centerpiece of most of our development. So we're not worried about it. You have to be cognizant of it and watching it. But I wouldn't say that, that's a big deal in our mind at this point.

Curtis Jensen -- Robotti & Company -- Analyst

Okay. And are you -- around Dock 79 and the Maren, are you able to do in-person tours? Are people able to physically get in the building to look at apartments? Or they do it virtually or?

John D. Baker -- Executive Chairman / Chief Executive Officer

David, take that.

David H. deVilliers -- President

Both. We are giving -- we're doing a lot of virtual tours, but we're also doing a lot of personal tours, so both.

Curtis Jensen -- Robotti & Company -- Analyst

Okay. And do you see other buildings in the area? I mean are people having to offer incentives and cutting rents and things like that, around that?

David H. deVilliers -- President

Again, not to the extent that you would think it's -- I think we've been offering a half a month at Dock 79 and about the equivalent of that at The Maren. It hasn't been a large discount, and the rents per square foot that we're getting are pretty strong. And god knows the velocity of The Maren has just been unbelievable.

Curtis Jensen -- Robotti & Company -- Analyst

I mean I'm kind of curious, if somebody were looking at both buildings, what do you think is kind of the distinguishing factors for people in The Maren, obviously, a couple years newer, a little bit. But in terms of amenities or apartment layouts? Or what's kind of the differentiator between the two?

David H. deVilliers -- President

Both about the same, Curtis, it's one, like you said, one of them is a little bit newer than the other one. We've had, I think, a total of about, I think, at last count, 9 or 10 people that have moved from Dock 79 to Maren since it's opened up. It's a little bit more per square foot. Obviously, same basic locations, same basic amenity package. Size of the apartments are similar, quality might be a little bit different, but they're pretty close together.

Curtis Jensen -- Robotti & Company -- Analyst

Okay. [Indecipherable] friendly? The Maren...

David H. deVilliers -- President

It's very much the same.

Curtis Jensen -- Robotti & Company -- Analyst

Last question, and I'll let you go. Out of Buzzard Point, is there any discussion with Vulcan about or any thoughts about whether they're likely to exercise their option to renew their lease there? Or, I mean, you're pouring a little more capital into that that neighborhood, so I'm just kind of curious whether there's any thoughts about what Vulcan might do?

John D. Baker -- Executive Chairman / Chief Executive Officer

They will renew it. There's no question about that.

Curtis Jensen -- Robotti & Company -- Analyst

And so does that -- are you able to go ahead with -- I mean is it going to impact you think the project -- the latest project you've got going on there? Or is it...

John D. Baker -- Executive Chairman / Chief Executive Officer

The thought -- our thought is twofold. One, having a view of a concrete plan is not as beautiful to everyone as it might be to me. But the important thing there is because of the fact that we started right now in the middle of a pandemic, we will be -- I think I'm correct on this, David, the only new building coming online at that period of time. And so that does give us an advantage as we begin to lease up. The important thing, I think, is to remember that it is an opportunity zone investment.

And while, obviously, you want a cash flow, we feel like we can get it leased up and begin to cash flow. And when we'll really care about what this place looks like is 10 years from now when we go to sell it, if we do go to sell it. And at that point, it is going to be surrounded by what I would say are really stunning buildings, and it will be a gorgeous spot. So it may be a slower start than The Maren, for instance. But it fits within our business plan. And we want to get as much penetration in that market as we can, and that's how we were able to do it with this one.

Curtis Jensen -- Robotti & Company -- Analyst

Okay. And Vulcan still has like -- it's just basically a ground lease and $1 million for the year or something like...

John D. Baker -- Executive Chairman / Chief Executive Officer

Yes. That's right. Something that's close.

Curtis Jensen -- Robotti & Company -- Analyst

All right. Thanks a lot fellows.

Operator

Thank you. Our next question comes from Stephen Farrell with Oppenheimer.

Stephen Farrell -- Oppenheimer -- Analyst

Good morning. How are you?

John D. Baker -- Executive Chairman / Chief Executive Officer

Great, Stephen. How are you?

Stephen Farrell -- Oppenheimer -- Analyst

I'm doing well. I have a few questions here. Regarding the new JVs with Woodfield, what sort of internal rates of return are you expecting from the two new partnerships?

John D. Baker -- Executive Chairman / Chief Executive Officer

David, would you take that?

David H. deVilliers -- President

Well, let's see. We're looking -- these are both, again, it's a little bit like the other. These are both opportunity zone projects, but that's not why we got involved in them at the outset. We wanted -- we like the idea of Woodfield as a partner. We think they're great locations. They've got -- they're kind of a pioneering area in one and so we're excited about that. The internal rates, obviously, we'd love to have as much as we can get, but we certainly are looking at things well into the double-digits.

Stephen Farrell -- Oppenheimer -- Analyst

Great. Thank you. And your relationship with Woodfield, do you see these two new properties as sort of a stepping stone into bigger projects in the future?

David H. deVilliers -- President

We certainly would like to think so. Our plan, as a company, is to join ourselves up with third-party platforms that have similar philosophies. And we provide a lot of insight from our background. And so it seems -- so far, it seems to be working pretty well. But we look and we hope to be able to spend some more time with them as we move forward.

Stephen Farrell -- Oppenheimer -- Analyst

Great. And during the quarter, did you start to see any potential deals? And how would you characterize them?

David H. deVilliers -- President

We saw -- we are out in the market looking at a lot of different deals primarily in the mixed-use and industrial asset classes, and we looked at several. I think it depends on time, we've kind of taken -- we saw some that were quite interesting. But at the last minute, we decided to take a little bit of a pause. Again, not knowing what -- if it wasn't for the COVID in front of us, we probably would have jumped into the water again. But that's given us a little bit of a pause. And so -- but we're still actively looking.

Stephen Farrell -- Oppenheimer -- Analyst

And are you seeing in D.C., the prices of multifamily sort of coming down with the uncertainty around the length of the rent freeze?

David H. deVilliers -- President

The rent freeze is, right now, is up through the end of October, but we lease out about 60 days in advance. So that's why we said in our conference call that we're not going to be looking for any rent increases until after the beginning of the year. The interesting thing, though, is that the rents that we are renewing, we're kind of above-market rents when we did it in last year. So they're pretty strong rents today. So for us, it's a bit of a pause. But as I said, we'd rather have tenants paying rent than chasing rent for the deferred time.

John D. Baker -- Executive Chairman / Chief Executive Officer

And Steve, to add on to that a little bit, I would say, we've got a lot of mixed-use projects going on at once. And our thought was that unless we just ran across something that was a steal, we would -- we thought it made sense to let -- get these built, see how they go, not get too strong out. There's obviously debt on all of them. And then we're mindful of making sure we can meet our obligations no matter how bad things get.

What we are looking at more so today, I would say, would be industrial development opportunities because, as David described to you, the one that we just sold last week. We got a tremendous mark up on that. And it's indicative of how -- just how hot industrial, especially as it deals with the Amazon type world that we live in, it's just a red hot thing now. And so that's probably where we'll pivot for a little while.

Stephen Farrell -- Oppenheimer -- Analyst

Great. And then with the Hollander Business Park, where you have the remaining acres there as well. Are you planning to develop those sooner because of the environment around the warehouse?

John D. Baker -- Executive Chairman / Chief Executive Officer

Yes.

David H. deVilliers -- President

We've actually -- we actually just broke ground or we will be next week breaking ground on two buildings and back up to one another that are literally next door to the one we just sold.

Stephen Farrell -- Oppenheimer -- Analyst

Okay. And you said you were looking at deals for mixed-use in industrial, and you just sold the Gulf Hammock property. Is there any interest in adding to the mining land that you currently have? And at what price is, let's say, an acre of minable land attractive to you, around 15,000 or somewhere around that?

John D. Baker -- Executive Chairman / Chief Executive Officer

The first part of your question is we're very interested. But to be blunt about it, it is very hard to get those. The operators we just assume own the land themselves, and we've talked to all of the major aggregates firms. And unless they get a cash buying, we don't anticipate we're going to be able to grow our aggregates lands much. The way we look at the pricing of it is each project is so different that if -- what we would do would be to say, OK, if we want to get a 6% or 7% return day one on any project that we do. And so if we were to buy the land, we would expect them to pay us a minimum royalty equal to the 6% or 7% plus the earned royalty. And where we would benefit from that is, as prices rise, the royalties grow. But again, that's the business model, but it is not likely to be one we're going to be able to be successful in growing much.

Stephen Farrell -- Oppenheimer -- Analyst

Okay. Thank you. I'm not sure if there's anyone else in the queue behind me, I'm happy to let them answer -- ask some questions or if not, I have a few more here.

John D. Baker -- Executive Chairman / Chief Executive Officer

Why don't we let somebody else if there is somebody? And if not, we'll just come back to you.

Stephen Farrell -- Oppenheimer -- Analyst

Great. Sounds good.

Operator

[Operator Instructions] Our next question comes from Bill Chen with Rhizome Partners.

Bill Chen -- Rhizome Partners -- Analyst

Hey guys.

John D. Baker -- Executive Chairman / Chief Executive Officer

Good morning Bill.

David H. deVilliers -- President

Hey, Bill.

Bill Chen -- Rhizome Partners -- Analyst

Hey guys. A couple of questions. I think you disclosed that you're selling the lot at Lakeside Business Park. Did that close -- has that been sold already? Or is that sometime in the future?

David H. deVilliers -- President

They were sold in April.

Bill Chen -- Rhizome Partners -- Analyst

Okay. Got you. And then the other question is, going to Dock 79, the -- like how do we recognize revenue when we have a tenant, like those tenants were not -- those retail tenants were not open and do we like not recognize those revenues? Do we recognize them, but then like treat like a receivable? Like you just help me understand it. And then if you could provide a little bit more detail on -- actually, kind of how much the amount is down. Could you break out like how much of the decrease in revenue and NOI due to lower occupancy versus lower occupancy on the multifamily side versus the retail side?

David H. deVilliers -- President

Bill, this is David deVilliers. What we do is, first of all, relative to the NOI being down, the occupancy slipped a little bit in the second quarter. But we've seen some pretty strong activity. And we'd like to think we're going to be back up to 93%, 94% here shortly from the residential side. The -- relative to the retail side, what we did there is we bill the tenants and then we have an allowance for doubtful accounts that we're carrying, and we'll take a look at that as we get further into the year. Any time they get to be over 90 days, at least then we take a certain amount of it and put it and make an allowance for doubtful accounts.

The interesting dynamic here, though, is that of the three tenants, the three retail tenants, two of them have -- they're all three back in business, albeit partially, but two of them have paid all of their back operating expenses. They paid June and July's rent. So the only outstanding balance that we have with those two is April and May. The third tenant, we do have a recurring allowance for doubtful accounts with them. But they're back up and running, and they seem to doing a pretty good job. We're following their business to see how their revenues increase, and then we'll look to recover those. Those we'll call them deferred rents, probably after the first of the year and as we start to head into the baseball season next year because that's when those guys really start to make their money.

John D. Baker -- Executive Chairman / Chief Executive Officer

Bill, one of the big things that occurred last year was when they really do well, we get bonus rents and based on their revenues. And obviously, that isn't happening now, but it did happened last year.

Bill Chen -- Rhizome Partners -- Analyst

Got you. Got you. And then was that a factor in the drop-off in rent and NOI for Q2? Because there -- I mean I guess baseball season starts -- I actually don't know when baseball season starts, but I think baseball season starts in Q2, right? And is it a...

John D. Baker -- Executive Chairman / Chief Executive Officer

Yes, it's a factor because it starts -- the season started, but there are no fans, which -- so we get no benefit of the season started.

Bill Chen -- Rhizome Partners -- Analyst

Got you. That's really helpful guys. Thank you. Those are all my questions. So [Indecipherable] and then I'll go back [Indecipherable].

John D. Baker -- Executive Chairman / Chief Executive Officer

Thank you, Bill.

Operator

[Operator Instructions] Our next question is a follow-up from Stephen Farrell.

Stephen Farrell -- Oppenheimer -- Analyst

Okay. I'm just picking where we left off here. Absent a big deal and with the stock currently trading where it is, buybacks are wildly accretive to the underlying value of the properties. At what point do you decide to stop looking for deals and step up buybacks in a really significant way?

John D. Baker -- Executive Chairman / Chief Executive Officer

Of course, we would play those cards as they come. But what I can tell you is because of the limitations on how much we can buy as the company, we've been buying about as fast as we can go without doing something like a tender offer or something like that. I'm much more interested in preserving our excess cash at this point to get us through COVID and make sure that we can handle everything we've got on our plate. And I think that's -- I think we've got that covered in stage right now.

Stephen Farrell -- Oppenheimer -- Analyst

No. Yes, I agree. Good to keep cash on hand in case anything that impacts the business happens just as long-term shareholders, we would obviously prefer buybacks versus any sort of special dividend. And I just wanted to relay that.

John D. Baker -- Executive Chairman / Chief Executive Officer

Okay. Thank you. That's good to hear.

Stephen Farrell -- Oppenheimer -- Analyst

And sort of in the post COVID world, do you think that the first floor retail model will be changed? And does that make you rethink any future developments? How you'll -- what you'll do with the first floor?

John D. Baker -- Executive Chairman / Chief Executive Officer

David, why don't you take that?

David H. deVilliers -- President

I think we have to wait and see, Steve. Generally, retail has been pretty small amount of these buildings with the exception of Bryant Street, and that's a little bit more. We think that restaurants are an interesting dynamic. Food halls are a consideration as opposed to fixed retail. There's other things that we look at. But we try to come up with a retail component that you can't get online. Now we want to support the residents with different types of amenities. And we think the right retail component goes a long way to helping, not only the residential buildings stay filled up, but a good retail mix helps everybody in the retail component.

Stephen Farrell -- Oppenheimer -- Analyst

Right. And you mentioned the Bryant Street, and you have the first of four buildings coming to market at the end of this year. Do you think under the current landscape, it sort of changes, any prospects there?

David H. deVilliers -- President

We don't think so. I mean it's a big -- the first phase is a big phase, as you know, it's four separate buildings. The first one is in kind of off on -- a little bit off on the side. And we're looking -- we have a very strong property management company in Bozzuto. We're actually going to start the pre-leasing process here in the fourth quarter. The model has been very well received by people walking through it on a kind of on an as-is basis. So we're excited about where we are with that project. And the neighborhood seems to be pretty excited too. So we'll just have to wait and see.

Stephen Farrell -- Oppenheimer -- Analyst

Great. Thank you for your time. That's all the questions I have.

David H. deVilliers -- President

Thank you Steve.

Operator

Thank you. There are no additional questions at this time.

John D. Baker -- Executive Chairman / Chief Executive Officer

Okay. Well, thank you all. Really appreciate the dialogue and really, really, really good questions. While these are uncertain times, I must admit my feeling that is that the lumps we have taken seems small and the accomplishments' amazing given the times that we are in. Our team is performing extraordinarily well. We still face hurdles with our retail operations, as you've heard, both the existing and future. But the ability to maintain occupancy at Dock 79 and quickly rent demand vastly overshadows those.

Our land and warehouse sales were literally at the top of the cycle prices. Having a very strong balance sheet with great liquidity is an important aspect of this confidence. I can assure you that we do not take lightly our obligation to return just liquidity to you if that becomes prudent. For now, however, it is a pillar of strength for us, and we continue to hold the excess cash. I look forward to talking to you next quarter and appreciate your interest in FRP. Have a great day. Thanks.

Operator

[Operator Closing Remarks]

Duration: 46 minutes

Call participants:

John D. Baker -- Executive Chairman / Chief Executive Officer

David H. deVilliers -- President

Curtis Jensen -- Robotti & Company -- Analyst

Stephen Farrell -- Oppenheimer -- Analyst

Bill Chen -- Rhizome Partners -- Analyst

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