FRP (NASDAQ:FRPH) reported first-quarter 2026 net operating income of approximately $8.9 million and funds from operations of $3.6 million, or $0.19 per share, as management said the company is shifting from platform expansion toward leasing execution and project stabilization.
On the company’s earnings call, President and Chief Operating Officer David H. deVilliers III said 2025 was a year in which FRP “significantly expanded the scale and long-term earnings potential of the platform,” while 2026 is focused on converting that growth into recurring cash flow.
The company ended the quarter with approximately $130 million of liquidity, including cash and line availability. Management said the balance sheet remains flexible despite near-term pressure from lease-up timing, higher platform costs and higher interest expense.
Industrial Occupancy Falls, But Leasing Activity Improves
FRP’s commercial and industrial portfolio totaled approximately 807,000 square feet at quarter-end and was approximately 47.5% occupied, down from approximately 85% a year earlier. DeVilliers attributed the decline primarily to anticipated lease rollover timing, slower tenant decision cycles and the addition of the Chelsea building.
Segment NOI was approximately $758,000, compared with $1.1 million in the prior-year period. Management characterized the issue as one of timing rather than demand.
DeVilliers said the company has approximately 423,000 square feet available for lease, representing roughly $3.3 million of incremental annual NOI opportunity at stabilization. Through the first quarter, FRP had signed leases or letters of intent totaling approximately 53,000 square feet, which management said represents about $1 million of future annualized NOI as leases commence and convert to occupancy.
Chief Investment Officer Mark Levy said FRP has made targeted refinements to leasing and operating processes after a comprehensive review over recent quarters. Those changes are intended to accelerate decision-making, improve market intelligence and better align leasing, development and asset management teams.
Levy said proposal activity, tenant engagement, tours and active negotiations have increased meaningfully compared with prior periods, though the company’s focus is now on converting that activity into executed leases and recurring NOI growth.
Altman Acquisition Expands Pipeline and Capacity
Late in the fourth quarter of 2025, FRP completed the Altman Industrial acquisition for approximately $33.5 million. DeVilliers said the transaction added roughly 1.6 million square feet of industrial development pipeline and expanded the company’s presence in Florida and New Jersey.
He said the acquisition was important because it expanded both FRP’s pipeline and geographic footprint while adding management capacity to execute on that pipeline. FRP’s current development pipeline represents approximately $441 million of total project costs, with expected stabilized incremental NOI of approximately $30 million over time.
Management said development remains the company’s largest long-term NOI growth opportunity, but emphasized that pacing will remain disciplined. DeVilliers said the focus is on execution, lease-up and stabilization, “not simply growing to grow.”
Levy said FRP continues to see encouraging tenant activity in New Jersey and Florida, particularly from logistics, e-commerce and third-party distribution users. In Maryland, where lease-up activity lagged expectations in 2025, FRP recalibrated rent positioning where appropriate, expanded broker engagement and added leasing resources following the Altman transaction.
Mining Royalties Provide Stability
FRP’s mining and royalties segment generated approximately $3.8 million of NOI during the quarter, up $498,000, or 15%, year over year. DeVilliers said it was the second consecutive quarter of double-digit underlying growth, with both volume and pricing trending favorably.
Management described mining royalties as a durable, high-margin source of cash flow with limited incremental capital requirements. DeVilliers said the segment remains an important stabilizing component of FRP’s earnings profile and balance sheet flexibility.
Multifamily Results Pressured by D.C. Supply
FRP’s multifamily portfolio includes approximately 1,827 units across Washington, D.C., and Greenville, South Carolina. The segment generated approximately $4.1 million of NOI in the first quarter.
DeVilliers said multifamily results were below expectations due to lower occupancy and economic occupancy in Washington, D.C., higher operating costs and softness in ground-floor retail. He said South Carolina remained relatively stable, with economic occupancy in the low 90% range.
Washington, D.C. remained more competitive because of continued supply pressure, particularly from Vermeer and The Stacks, which affected occupancy and concessions across Dock 79, The Maren and The Verge. Economic occupancy in D.C. remained in the high 80% range during the quarter.
DeVilliers said FRP views the pressure as a localized supply issue rather than a broader deterioration across its multifamily platform.
Management Points to Near-Term FFO Pressure
For full-year 2026, FRP expects NOI to remain relatively stable at approximately $37 million. Management said FFO is expected to remain pressured in the near term, with meaningful improvement tied to industrial lease-up and development stabilization.
General and administrative expenses are expected to be approximately $15 million to $16 million in 2026, reflecting investment in people, systems and infrastructure needed to operate at scale.
Chief Executive Officer John D. Baker III said first-quarter results were worse than the prior year and that headwinds from 2025 remain in place. However, he said he is more optimistic about the rest of the year and beyond because industrial leasing activity has “completely flipped” compared with last year.
“I don’t think we are seeing a return to the industrial boom of the Covid years, but even a return to a more normalized leasing environment is comforting after the uncertainty of 2025,” Baker said.
Baker said FRP will measure success by the performance of same-store assets and value created by the development segment, specifically three industrial assets under development in Florida. No analysts asked questions during the call.
About FRP (NASDAQ:FRPH)
FRP Holdings, Inc (NASDAQ: FRPH) is an industrial services holding company that provides asset integrity and life-extension solutions to heavy-industry clients. Through its operating subsidiaries, FRP offers a broad suite of non-destructive testing (NDT), inspection services, mechanical maintenance, protective coatings, thermal spray and surface-preparation services. These offerings help clients maintain and extend the service life of critical equipment and infrastructure across multiple sectors.
The company’s core activities include ultrasonic, radiographic and magnetic-particle testing, site-based inspections, welding and fabrication support, and specialized coating applications designed to withstand extreme environments.
