St. Joe Company (NYSE:JOE) has a nearly 100-year history going back to Florida's first land speculation bubble in the 1920s. Today the company is using its extensive land holdings to develop a series of master plan communities in the panhandle of Florida.

In this video from the Industry Focus podcast recorded on December 10, Motley Fool contributor Luis Sanchez and Industry Focus host Nick Sciple discuss the company's history and business today.

Nick Sciple: That's Texas Pacific Land Trust. Let's turn now to St. Joe. This is another company that has a history. Going back to another speculative bubble, can you tell us about that?

Luis Sanchez: Yeah. I think the theme today is, we're tying the loop, connecting different bubbles. St. Joe also goes back more than 100 years ago, in the early 1900s, the famous industrialist, Alfred Du Pont, he was speculating on the Florida real estate boom in the early 1900s. Eventually, that bubble popped. He formed St. Joe, I believe, in the 1930s as a place to put his real estate and to figure out what to do with it. Over the last 100 years, the company's had three different lives, it was primarily a paper company, at one point, it was a sugar manufacturer, it was also a forestry operation and it still does some forestry. Then finally, about 15 years ago, it became a hot stock again because they got caught up in the most recent housing bubble in Florida and then it also got burned from that. But in the last 10 years, the company has really narrowed its focused and today, it is primarily developing land in the panhandle of Florida in Bay and Walton counties in Florida, so that's primarily land around Panama City Beach, Florida.

Nick Sciple: What's the investment thesis today then, Luis, around those Panama City assets?

Luis Sanchez: Yeah. If you're not from the area, you might not know this, but it's sometimes referred to light-heartedly as the Redneck Riviera, or also known as the Emerald Coast. The panhandle of Florida and that area in the gulf, there's really beautiful beaches. There are actually very nice homes, very expensive homes. It's a regional hub for retirees, vacation rentals, second homes. I'm based in New York, so in a way, I think of it as the Long Island or the Hamptons of those areas around Florida or Georgia. The thesis is essentially that Joe has approved a master plan in the Bay and Walton County areas to build up to 170,000 residential units, over 9,000 hotel rooms. They have the land, similar to Texas Pacific. Joe has 170,000 acres of land in Florida. They have this asset-light business model where they're contributing the land, they're developing it into lots, they've already gotten it approved by the local governments of those areas, and they're partnering with home-builders who buy the lots from Joe. The home-builders will put the capital in, develop the homes, and then use their own sales force to generate demand. Like I said, it has similarities to Texas Pacific. It's asset-light. They're relying on other companies to do a lot of the capital intensive part of developing the residential communities there. But then interesting thing about Joe is that they also have this recurring revenue business that they're starting to turn up. One aspect of that is, they have what's called club memberships. In all these different communities, remember, some of these communities are really nice, very expensive, they have resort, amenities like golf courses, and pools, and little clubs. Joe sells membership packages to these clubs. If you join the club, if you're a member, of one these communities, in joining the club, you're paying a couple of hundred dollars a month to stay in that club. That's recurring revenue that Joe can count on. Then Joe has also developed some hotels, some commercial leasing spaces around shopping centers, as well as affordable apartment units which it rents out. A lot of these other developments are still under construction and are starting to come online over the next couple of years.

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