What changed in this filing

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Item 1A. Risk Factors

2022-03-30 compared with 2021-03-19 · 298 added, 317 removed, 36 unchanged (94% of the section changed)

RISK FACTORS.

Our future results may be affected by a number

of factors over which we have little or no control.

The following issues, uncertainties, and risks, among others, should be considered

in evaluating our business and outlook.

Also, note that additional risks not currently identified or known to us could also negatively

impact our business or financial results.

Risks Relating to the COVID-19

The current pandemic of the novel coronavirus

COVID-19 could materially and adversely impact or disrupt our financial condition, results of operations, cash flows and performance.

Since being reported in December 2019, the

novel coronavirus (COVID-19) pandemic has had repercussions across regional and global economies and financial markets.

of COVID-19 has significantly adversely impacted global economic activity, contributed to significant volatility and negative pressure

in financial markets and increased economic uncertainty.

In response to the pandemic, many states and cities in which we own properties

have instituted quarantines, restrictions on travel, restrictions on types of business that may continue to operate, and/or restrictions

on the types of construction projects that may continue.

response to these restrictions and to protect

employee safety, many of our employees continue to work remotely.

The restrictions in place as a result of the

COVID-19 pandemic are negatively impacting many industries, especially the commercial real estate industry and mixed-use properties,

which have apartment dwellers, small businesses, and restaurants as tenants.

The significance, extent and duration of the impacts

of the COVID-19 pandemic on our business and operations are dependent on factors that cannot be accurately predicted at this time,

such as the continued severity and spread of the virus, the period of time during which mandated social distancing or other mitigation

measures remain in place, and the timetable for implementing effective treatments and vaccines.

The financial performance of our mixed-use

Our future results may be affected by a number of

factors over which we have little or no control.

The following issues, uncertainties, and risks, among others, should be considered in

evaluating our business and outlook.

Also, note that additional risks not currently identified or known to us could also negatively impact

our business or financial results.

Risks Relating to the COVID-19 Pandemic

The current pandemic of the novel coronavirus COVID-19

could materially and adversely impact or

disrupt our financial condition, results of operations,

cash flows and performance.

The financial performance of our stabilized mixed-use

properties in Washington, D.C.

(The Maren and Dock 79) has been adversely affected by the COVID-19 pandemic due to restrictions

on the operation of local businesses, the rent freeze on lease renewals imposed in Washington, D.C., and the lack of fan attendance

at the Washington Nationals baseball park.

At this time, the Company anticipates that these factors will continue to impact The

Maren and Dock 79 for at least the first half of 2021, which will adversely affect our financial condition, results of operations

and cash flows.

has been adversely affected by the COVID-19 pandemic due to restrictions on the operation of local businesses,

the rent freeze on lease renewals imposed in Washington, D.C.

(through December 31, 2021), and the lack of fan attendance at the Washington

Nationals baseball park in 2020.

At this time, the Company is not certain the degree to which these factors will continue to impact Dock

79, The Maren.

and Bryant Street, which could adversely affect our financial condition, results of operations and cash flows.

Additionally, the COVID-19 pandemic could materially

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on construction activities, delays in the permitting process or delays in the supply of materials or labor necessary for construction

due to ongoing supply chain disruptions.

Risks Relating to our Business

A decline in the economic conditions in

Baltimore and Washington, D.C.

A decline in the economic conditions in Baltimore

and Washington, D.C.

markets could adversely affect our business.

1 unchanged sentence

use properties are located in the Baltimore area and Washington, D.C.

We are, therefore, subject to increased exposure (positive

or negative) to economic and other competitive factors specific to markets in confined geographic areas.

Our operations may also

be affected if too many competing properties are built in these markets.

An economic downturn in these markets could adversely

affect our operation.

We cannot be sure that these markets will continue to grow or demand the type of assets in our portfolio.

We conduct a significant portion of our

operations through joint ventures, which may lead to disagreements with our joint venture partners and adversely affect our interests

in the joint ventures.

We are, therefore, subject to increased exposure (positive or negative)

to economic and other competitive factors specific to markets in confined geographic areas.

Our operations may also be affected if too

many competing properties are built in these markets.

An economic downturn in these markets resulting from factors outside of our control

could adversely affect our operation.

Such a downturn could be triggered by such factors as the downsizing or relocation of government

jobs, increased work from home opportunities, crime or acts of terrorism.

We cannot be sure that these markets will continue to grow or

demand the type of assets in our portfolio.

We conduct a significant portion of our operations

through joint ventures, which may lead to disagreements with our joint venture partners and adversely affect our interests in the joint

We currently are a party to several joint ventures

and we may enter into additional joint ventures in the future.

In each of our existing joint ventures, the consent of our joint

venture partner is required to take certain actions, and in some cases will share equal voting control.

Our joint venture partners,

as well as future partners, may have interests that are different from ours which may result in conflicting views as to the conduct

of the joint ventures.

In the event that we have a disagreement with a joint venture partner as to the resolution of a particular

issue to come before the joint venture, or as to the conduct or management of the joint venture generally, we may not be able to

resolve such disagreement in our favor and such a disagreement could have a material adverse effect on our interest in the joint

venture or on the business of the joint venture generally.

Our business may be adversely affected by

seasonal factors and harsh weather conditions.

In each of our existing joint ventures, the consent of our joint venture

partner is required to take certain actions, and in some cases will share equal voting control.

Our joint venture partners, as well as

future partners, may have interests that are different from ours which may result in conflicting views as to the conduct of the joint

In the event that we have a disagreement with a joint venture partner as to the resolution of a particular issue to come before

the joint venture, or as to the conduct or management of the joint venture generally, we may not be able to resolve such disagreement

in our favor and such a disagreement could have a material adverse effect on our interest in the joint venture or on the business of the

joint venture generally.

Our business may be adversely affected by seasonal

factors and harsh weather conditions.

The Mining Royalty Lands Segment and the Development

Segment could be adversely affected by reduced construction and mining activity during periods of inclement weather.

These factors

could cause our operating results to fluctuate from quarter to quarter.

An occurrence of unusually harsh or long-lasting inclement

weather such as hurricanes, tornadoes and heavy snowfalls could have an adverse effect on our operations and profitability.

Our business could be negatively impacted

by cyberattacks targeting our computer and

telecommunications systems and infrastructure,

or targeting those of our third-party service providers.

These factors could

cause our operating results to fluctuate from quarter to quarter.

An occurrence of unusually harsh or long-lasting inclement weather such

as hurricanes, tornadoes and heavy snowfalls could have an adverse effect on our operations and profitability.

Our business could be negatively impacted by cyberattacks

targeting our computer and telecommunications systems and infrastructure, or targeting those of our third-party service providers.

Our business, like other companies in our industry,

has become increasingly dependent on digital technologies, including technologies that are managed by third-party service providers

on whom we rely to help us collect, host or process information.

has become increasingly dependent on digital technologies, including technologies that are managed by third-party service providers on

whom we rely to help us collect, host or process information.

Such technologies are integrated into our business operations.

Use of the internet and other public networks for communications, services, and storage, including "cloud"

exposes all users (including our business) to cybersecurity risks.

While we and our third-party service providers

commit resources to the design, implementation, and monitoring of our information systems, there is no guarantee that our security

measures will provide absolute security.

Despite these security measures, we may not be able to anticipate, detect, or prevent

cyberattacks, particularly because the methodologies used by attackers change frequently or may not be recognized until launched,

and because attackers are increasingly using techniques designed to circumvent controls and avoid detection.

We and our third-party

service providers may therefore be vulnerable to security events that are beyond our control, and we may be the target of cyber-attacks,

as well as physical attacks, which could result in information security breaches and significant disruption to our business.

Our revenues depend in part on construction sector activity,

which tends to be cyclical.

Our Mining Royalty Lands Segment revenues are

derived from royalties on construction aggregates mined on our properties.

Thus, our results depend in part on residential, commercial

and infrastructure construction activity and spending levels.

internet and other public networks for communications, services, and storage, including "cloud"

computing, exposes all users (including our business)

to cybersecurity risks.

While we and our third-party service providers commit

resources to the design, implementation, and monitoring of our information systems, there is no guarantee that our security measures will

provide absolute security.

Despite these security measures, we may not be able to anticipate, detect, or prevent cyberattacks, particularly

because the methodologies used by attackers change frequently or may not be recognized until launched, and because attackers are increasingly

using techniques designed to circumvent controls and avoid detection.

We and our third-party service providers may therefore be vulnerable

to security events that are beyond our control, and we may be the target of cyber-attacks, as well as physical attacks, which could result

in information security breaches and significant disruption to our business.

Our revenues depend in part on construction sector activity, which tends

to be cyclical.

Our Mining Royalty Lands Segment revenues are derived

from royalties on construction aggregates mined on our properties.

Thus, our results depend in part on residential, commercial and infrastructure

construction activity and spending levels.

The construction industry in our markets tends to be cyclical.

activity and spending levels vary across our markets and are influenced by interest rates, inflation, consumer spending habits,

demographic shifts, environmental laws and regulations, employment levels and the availability of funds for public infrastructure

Economic downturns may lead to recessions in the construction industry, either in individual markets or nationally.

Construction activity and spending

levels vary across our markets and are influenced by interest rates, inflation, consumer spending habits, demographic shifts, environmental

laws and regulations, employment levels and the availability of funds for public infrastructure projects.

Economic downturns may lead

to recessions in the construction industry, either in individual markets or nationally.

Our operations are subject to various environmental

laws and regulations, the violation of which could result in substantial fines or penalties.

Liability for environmental contamination

on real property owned by the Company may include the following costs, without limitation:

investigation and feasibility study

costs, remediation costs, litigation costs, oversight costs, monitoring costs, institutional control costs, penalties from state

and federal agencies and third-party claims.

These costs could be substantial and in extreme cases could exceed the value of the

contaminated property.

Moreover, on-site operations may be suspended until certain environmental contamination is remediated and/or

permits are received, and governmental agencies can impose permanent restrictions on the manner in which a property may be used

depending on the extent and nature of the contamination.

This may result in a breach of the terms of the lease entered into with

Governmental agencies also may create liens on contaminated sites for damages it incurred to address such contamination.

In addition, the presence of hazardous substances at, on, under or from a property may adversely affect our ability to sell the

property or borrow funds using the property as collateral, thus harming our financial condition.

The presence of contaminated material at

our RiverFront on the Anacostia development site will subject us to substantial environmental liability and costs as construction

to our RiverFront on the Anacostia site in Washington, D.C., preliminary environmental testing has indicated the presence of contaminated

material that will have to be specially handled in excavation in conjunction with construction.

While we have recovered and will

continue to seek partial reimbursement for these costs from neighboring property owners, we still expect to incur significant environmental

costs in connection with construction.

During the quarter ending December 31, 2015,

management successfully completed negotiations and entered into a $3.0 million settlement of environmental claims on all four phases

against our former tenant at the Riverfront on the Anacostia property and continues to pursue settlement negotiations with other

potentially responsible parties.

The total remediation expense for Phase I of this development

was $1.833 million.

The Company executed a letter of intent with

MRP Realty in May 2016 to develop Phase II of the Riverfront on the Anacostia project and recorded an estimated environmental remediation

expense of $2.0 million for the Company’s estimated liability under the proposed agreement.

The Company substantially completed

the remediation and reduced the estimated liability in the quarter ending September 30, 2018 by $465,000 and further reduced the

liability $92,000 to zero in 2020.

The Company has no obligation to remediate

this contamination on Phases III and IV of the development until such time as it makes a commitment to commence construction on

The Company's actual expense to address this issue may be materially higher or lower than the expense previously recorded

depending upon the actual costs incurred.

Uninsured losses could significantly reduce

our earnings.

We self-insure for a portion of our claims

exposure resulting from workers’ compensation, auto liability, general liability and employees’ health insurance.

also are responsible for our legal expenses relating to such claims.

We maintain insurance above the amounts for which we self-insure

with licensed insurance carriers.

Although we believe the aggregate insurance limits should be sufficient to cover reasonably expected

claims, it is possible that one or more claims could exceed our aggregate coverage limits.

Additionally, there are certain losses,

such as losses from hurricanes, terrorism, wars or earthquakes, where insurance is limited or not economically justifiable.

the Company experiences an uninsured loss of real property, we could lose both the invested capital and anticipated revenues associated

with such property.

We accrue currently for estimated incurred losses and expenses and periodically evaluate and adjust our claims

accrued liability to reflect our experience.

However, ultimate results may differ from our estimates, which could result in losses

greater than accrued amounts.

We may be unable to renew leases or re-lease

properties as leases expire.

When a lease expires, a tenant may elect not

Liability for environmental contamination on real

property owned by the Company may include the following costs, without limitation:

investigation and feasibility study costs, remediation

costs, litigation costs, oversight costs, monitoring costs, institutional control costs, penalties from state and federal agencies and

third-party claims.

These costs could be substantial and in extreme cases could exceed the value of the contaminated property.

on-site operations may be suspended until certain environmental contamination is remediated and/or permits are received, and governmental

agencies can impose permanent restrictions on the manner in which a property may be used depending on the extent and nature of the contamination.

This may result in a breach of the terms of the lease entered into with our tenants.

Governmental agencies also may create liens on contaminated

sites for damages it incurred to address such contamination.

In addition, the presence of hazardous substances at, on, under or from a

property may adversely affect our ability to sell the property or borrow funds using the property as collateral, thus harming our financial

The presence of contaminated material at our Riverfront

on the Anacostia development site will subject us to substantial environmental liability and costs as construction proceeds.

With respect to

Phases III and IV of the Riverfront on the Anacostia site in Washington, D.C., preliminary environmental testing has indicated the presence

of contaminated material that will have to be specially handled in excavation in conjunction with construction.

While we have recovered

and will continue to seek partial reimbursement for these costs from neighboring property owners, we still expect to incur significant

environmental costs in connection with construction.

The Company has no obligation to remediate this contamination

on Phases III and IV of the development until such time as it makes a commitment to commence construction on each phase.

The Company's

actual expense to address this issue may be materially higher or lower than the expense previously recorded depending upon the actual

costs incurred.

Our operations could be adversely affected by climate

change and climate change regulations.

Climate change presents an array of risks to real

estate companies due to sea level rise, flooding, extreme weather, stronger storms and human migration.

[We have accounted for the risk

of flooding and sea level rise in the design of our Riverfront on the Anacostia development.] Future developments, including potential

“second life” uses of our mining properties, could be impacted by these factors and the impacts that they have

on human behavior.

Uninsured losses could significantly reduce our

We self-insure for a portion of our claims exposure

resulting from workers’ compensation, auto liability, general liability and employees’ health insurance.

We also are responsible

for our legal expenses relating to such claims.

We maintain insurance above the amounts for which we self-insure with licensed insurance

Although we believe the aggregate insurance limits should be sufficient to cover reasonably expected claims, it is possible

that one or more claims could exceed our aggregate coverage limits.

Additionally, there are certain losses, such as losses from hurricanes,

terrorism, wars or earthquakes, where insurance is limited or not economically justifiable.

If the Company experiences an uninsured loss

of real property, we could lose both the invested capital and anticipated revenues associated with such property.

We accrue currently

for estimated incurred losses and expenses and periodically evaluate and adjust our claims accrued liability to reflect our experience.

However, ultimate results may differ from our estimates, which could result in losses greater than accrued amounts.

We may be unable to renew leases or re-lease properties

as leases expire.

When a lease expires, a tenant may elect not to renew

If that occurs, we may not be able to lease the property on similar terms.

The terms of renewal or re-lease (including

the cost of required renovations and concessions to tenants) may be less favorable than the prior lease.

If we are unable to lease

all or substantially all of our properties, or if the rental rates upon such re-leasing are significantly lower than expected rates,

our cash generated before debt repayments and capital expenditures may be adversely affected.

We may be unable to lease currently vacant

If we are unable to obtain leases sufficient

to cover carrying costs, then our cash flows may be adversely affected.

The bankruptcy or insolvency of significant

tenants with long-term leases may adversely affect income produced by our properties.

Should tenants default on their obligations,

our cash flow would be adversely affected, and we may not be able to find another tenant to occupy the space under similar terms

or may have to make expenditures to retrofit or divide the space.

Additionally, we may have to incur a non-cash expense for a significant

amount of deferred rent revenue generated from the accounting requirement to straight-line rental revenues.

The bankruptcy or insolvency

of a major tenant may also adversely affect the income produced by a property.

If any of our tenants become a debtor in a case

under the U.S.

Bankruptcy Code, we cannot evict that tenant solely because of its bankruptcy.

The bankruptcy court may authorize

the tenant to reject and terminate its lease with the Company.

Our claim against such a tenant for unpaid future rent would be

subject to a statutory limitation that may be substantially less than the remaining rent actually owed to us under the tenant’s

Any shortfall in rent payments could adversely affect our cash flow.

Our inability to obtain necessary approvals

for property development could adversely affect our profitability.

We may be unable to obtain, or incur delays

in obtaining, necessary zoning, land-use, building, occupancy

and other required governmental permits and

authorizations, which could result in increased costs or abandonment of certain projects.

Before we can develop a property, we

must obtain a variety of approvals from local and state governments with respect to such matters as zoning, density, parking, subdivision,

site planning and environmental issues.

Legislation could impose moratoriums on new real estate development or land-use conversions

from mining to development.

These factors may reduce our profit or growth and may limit the value of these properties.

Real estate investments are not as liquid

as other types of assets.

The illiquid nature of real estate investments

may limit our ability to react promptly to changes in economic or other conditions.

In addition, significant expenditures associated

with real estate investments, such as mortgage payments, real estate taxes and maintenance costs, are generally not reduced when

circumstances cause a reduction in income from the investments.

Thus, the illiquid nature of our real estate investments could

adversely affect our profitability under certain economic conditions.

Our debt service obligations may have adverse

consequences on our business operations.

We use debt to finance our operations,

including acquisitions of properties.

As of December 31, 2020, we had outstanding non-recourse mortgage indebtedness of

$90,000,000, secured by developed real estate properties having a carrying value of $89,964,000.

Our use of debt may have

adverse consequences, including the following:

The terms of renewal or re-lease (including the cost of

required renovations and concessions to tenants) may be less favorable than the prior lease.

If we are unable to lease all or substantially

all of our properties, or if the rental rates upon such re-leasing are significantly lower than expected rates, our cash generated before

debt repayments and capital expenditures may be adversely affected.

We may be unable to lease currently vacant properties.

If we are unable to obtain leases sufficient to cover

carrying costs, then our cash flows may be adversely affected.

The bankruptcy or insolvency of significant tenants

with long-term leases may adversely affect income produced by our properties.

Should tenants default on their obligations, our cash

flow would be adversely affected, and we may not be able to find another tenant to occupy the space under similar terms or may have to

make expenditures to retrofit or divide the space.

Additionally, we may have to incur a non-cash expense for a significant amount of deferred

rent revenue generated from the accounting requirement to straight-line rental revenues.

The bankruptcy or insolvency of a major tenant

may also adversely affect the income produced by a property.

If any of our tenants become a debtor in a case under the U.S.

Code, we cannot evict that tenant solely because of its bankruptcy.

The bankruptcy court may authorize the tenant to reject and terminate

its lease with the Company.

Our claim against such a tenant for unpaid future rent would be subject to a statutory limitation that may

be substantially less than the remaining rent actually owed to us under the tenant’s lease.

Any shortfall in rent payments could

adversely affect our cash flow.

Our inability to obtain necessary approvals for

property development could adversely affect our profitability.

We may be unable to obtain, or incur delays in obtaining,

necessary zoning, land-use, building, occupancy and other required governmental permits and authorizations, which could result in increased

costs or abandonment of certain projects.

Before we can develop a property, we must obtain a variety of approvals from local and state

governments with respect to such matters as zoning, density, parking, subdivision, site planning and environmental issues.

could impose moratoriums on new real estate development or land-use conversions from mining to development.

These factors may reduce our

profit or growth and may limit the value of these properties.

Real estate investments are not as liquid as other

types of assets.

The illiquid nature of real estate investments may

limit our ability to react promptly to changes in economic or other conditions.

In addition, significant expenditures associated with

real estate investments, such as mortgage payments, real estate taxes and maintenance costs, are generally not reduced when circumstances

cause a reduction in income from the investments.

Thus, the illiquid nature of our real estate investments could adversely affect our

profitability under certain economic conditions.

Our debt service obligations may have adverse consequences

on our business operations.

We use debt to finance our operations, including acquisitions

of properties.

As of December 31, 2021, we had outstanding non-recourse mortgage indebtedness of $180,070,000, secured by developed real

estate properties having a carrying value of $263,214,000.

Our use of debt may have adverse consequences, including the following:

· Our cash flows from operations

2 unchanged sentences

of one or more of our properties, possibly on disadvantageous terms, to make payments on our debt.

We may default on our

debt obligations, and the lenders may foreclose on our properties that collateralize those loans.

A foreclosure on one

of our properties could create taxable income without any accompanying cash proceeds to pay the tax.

We may not be able to

refinance or extend our existing debt.

· We may default on our debt obligations,

and the lenders may foreclose on our properties that collateralize those loans.

· A foreclosure on one of our

properties could create taxable income without any accompanying cash proceeds to pay the tax.

· We may not be able to refinance

or extend our existing debt.

· The terms of any refinancing

or extension may not be as favorable as the terms of our existing debt.

We may not be able to

issue debt on unencumbered properties under reasonable terms to finance growth of our portfolio of properties.

We may be subject to

a significant increase in the variable interest rates on our unsecured and secured lines of credit, which could adversely impact

our operations.

Our debt agreements have

yield maintenance requirements that result in a penalty if we prepay loans.

· We may not be able to issue

debt on unencumbered properties under reasonable terms to finance growth of our portfolio of properties.

· We may be subject to a significant

increase in the variable interest rates on our unsecured and secured lines of credit, which could adversely impact our operations.

· Our debt agreements have yield

maintenance requirements that result in a penalty if we prepay loans.

Our uncollateralized revolving credit agreement

restricts our ability to engage in some business activities.

Our uncollateralized revolving credit agreement

contains customary negative covenants and other financial and operating covenants that, among other things:

restricts our ability

to incur certain additional indebtedness;

restricts our ability

to make certain investments;

restricts our ability

to merge with another company;

restricts our ability

to pay dividends;

requires us to maintain

financial coverage ratios;

Our uncollateralized revolving credit agreement contains

customary negative covenants and other financial and operating covenants that, among other things:

· restricts our ability to incur

certain additional indebtedness;

· restricts our ability to make

certain investments;

· restricts our ability to merge

with another company;

· restricts our ability to pay

· requires us to maintain financial

coverage ratios;

· requires us to not encumber

certain assets except as approved by the lenders.

These restrictions could cause us to default

on our unsecured line of credit or negatively affect our operations.

The replacement of LIBOR with an alternative

reference rate may adversely affect interest expense related to outstanding debt and our financial results.

The United Kingdom’s Financial Conduct

Authority (FCA) has announced that it would phase out LIBOR as a benchmark by the end of 2021.

It is unclear if LIBOR will cease

to exist at that time or if new methods of calculating LIBOR will be established such that it continues to exist after 2021.

LIBOR ceases to exist, we will likely need to agree upon a replacement index with our lenders, which would require an amendment

to our borrowing arrangements that use LIBOR as a factor in determining the interest rate (including our credit agreement with

Wells Fargo), and the interest rate thereunder will likely change.

Federal Reserve, in conjunction with

the Alternative Reference Rates Committee, a steering committee comprised of large U.S.

financial institutions, is considering

replacing U.S.

dollar LIBOR with a new index, the Secured Overnight Financing Rate (SOFR), calculated using short-term repurchase

agreements backed by Treasury securities.

Whether or not SOFR, or another alternative reference rate, attains market traction as

a LIBOR replacement tool remains in question.

The transition to an alternative rate will

require careful and deliberate consideration and implementation so as to not disrupt the stability of financial markets.

is no guarantee that a transition from LIBOR to an alternative will not result in financial market disruptions, significant increases

in benchmark rates, or borrowing costs to borrowers, any of which could have an adverse effect on our business, results of operations

and financial condition.

These restrictions could cause us to default on our

unsecured line of credit or negatively affect our operations.

The replacement of LIBOR with an alternative reference

rate may adversely affect interest expense related to outstanding debt and our financial results.

The United Kingdom’s Financial Conduct Authority

(FCA) has announced that it would phase out LIBOR as a benchmark by the June 30, 2023.

We will need to agree upon a replacement index

with our lenders, which would require an amendment to our borrowing arrangements that use LIBOR as a factor in determining the interest

rate (including our credit agreement with Wells Fargo), and the interest rate thereunder will likely change.

Federal Reserve, in conjunction with the

Alternative Reference Rates Committee, a steering committee comprised of large U.S.

financial institutions, is considering replacing U.S.

dollar LIBOR with a new index, the Secured Overnight Financing Rate (SOFR), calculated using short-term repurchase agreements backed by

Treasury securities.

Whether or not SOFR, or another alternative reference rate, attains market traction as a LIBOR replacement tool remains

The transition to an alternative rate will require

careful and deliberate consideration and implementation so as to not disrupt the stability of financial markets.

There is no guarantee

that a transition from LIBOR to an alternative will not result in financial market disruptions, significant increases in benchmark rates,

or borrowing costs to borrowers, any of which could have an adverse effect on our business, results of operations and financial condition.

Furthermore, any changes announced by the FCA, U.S.

Federal Reserve, or other regulators in the method

pursuant to which the reference rates are determined may result in a sudden or prolonged increase or decrease in the reported reference

rates, which could have an adverse effect on our interest payments and our results of operations and financial condition.

Fluctuations in value of Bond Portfolio

and losses on bonds sold.

As of December 31, 2020, the Company had total

investments of $75,609,000 in corporate bonds with maturities ranging from 2021 through 2022.

The Company measures the fair value

of these investments on a quarterly basis and recognizes the unrealized gain or loss in its comprehensive income.

the Company’s comprehensive income will be impacted by factors outside our control such as fluctuations in interest rates

that impact the value of our investment portfolio.

The Company could incur losses should it sell the bonds prior to maturity or

if the bond issuer does not redeem the bond at par.

Our Asset Management and Development Segments

face competition from numerous sources.

As a developer of apartments, retail, flexible

warehouse and office space, we compete with numerous developers, owners and operators of real estate, many of whom own properties

similar to ours in the same submarkets in which our properties are located.

If our competitors offer space at rental rates below

current market rates, or below the rental rates we currently charge our tenants, we may lose potential tenants and we may be pressured

to reduce our rental rates to an amount lower than we currently charge in order to retain tenants when our tenants’ leases

As a result, our financial condition, results of operations, cash flow and ability to satisfy our debt service obligations

could be materially adversely affected.

Federal Reserve, or other regulators in the method pursuant to which the reference

rates are determined may result in a sudden or prolonged increase or decrease in the reported reference rates, which could have an adverse

effect on our interest payments and our results of operations and financial condition.

Fluctuations in value of our investments U.S.

As of December 31, 2021, the Company had total investments

of $24,926,000 in U.S Treasury Notes which mature in late 2023.

The Company measures the fair value of these investments on a quarterly

basis and recognizes the unrealized gain or loss in its comprehensive income.

As a result, the Company’s comprehensive income will

be impacted by factors outside our control such as fluctuations in interest rates that impact the value of our investment portfolio.

Company could incur losses should it sell the Notes prior to maturity.

Our Asset Management and Development Segments face

competition from numerous sources.

As a developer of apartments, retail, flexible warehouse

and office space, we compete with numerous developers, owners and operators of real estate, many of whom own properties similar to ours

in the same submarkets in which our properties are located.

If our competitors offer space at rental rates below current market rates,

or below the rental rates we currently charge our tenants, we may lose potential tenants and we may be pressured to reduce our rental

rates to an amount lower than we currently charge in order to retain tenants when our tenants’ leases expire.

As a result, our financial

condition, results of operations, cash flow and ability to satisfy our debt service obligations could be materially adversely affected.

Construction costs may be higher than anticipated .

Our long-term business plan includes a number

of construction projects.

The construction costs of these projects may exceed original estimates and possibly make the completion

of a property uneconomical.

Building material commodity shortages, construction delays or stoppages or rapidly escalating construction

costs may out-pace market rents, which would adversely affect our profits.

The market environment and existing lease commitments

may not allow us to raise rents to cover these higher costs.

Our long-term business plan includes a number of construction

The construction costs of these projects may exceed original estimates and possibly make the completion of a property uneconomical.

Building material commodity shortages, supply chain disruptions, construction delays or stoppages or rapidly escalating construction costs

may out-pace market rents, which would adversely affect our profits.

The market environment and existing lease commitments may not allow

us to raise rents to cover these higher costs.

Risks Relating to our Common Stock

Certain shareholders have effective control of a significant

percentage of FRP's common stock and

would have significant influence on the outcome of any shareholder

As of December 31, 2020, our Chief Executive

Officer, John D.

Baker, II beneficially owned approximately 14.8% of the outstanding shares of our common stock (79.8% of which

are held in trusts under which voting power is shared with other family members) and members of his family who are (i) officers

or directors of the company, (ii) required to report their beneficial ownership on Schedule 13D or Schedule 13G, or (iii) are members

of his immediate family beneficially own, collectively, an additional 20.8% of the outstanding shares of our common stock.

result, these individuals effectively may have the ability to direct the election of all members of our board of directors and

to exercise a controlling influence over its business and affairs, including any determinations with respect to mergers or other

business combinations involving the Company, its acquisition or disposition of assets, its borrowing of monies, its issuance of

any additional securities, its repurchase of common stock and its payment of dividends.

Provisions in our articles of incorporation and bylaws and certain

provisions of Florida law could delay or prevent a change in control of FRP.

The existence of some provisions of our articles

of incorporation and bylaws and Florida law could discourage, delay or prevent a change in control of FRP that a shareholder may

consider favorable.

Certain shareholders have effective control of a significant percentage

of FRP's common stock and would have significant influence on the outcome of any shareholder vote.

As of December 31, 2021, our Chief Executive Officer,

Baker, II beneficially owned approximately 14.9% of the outstanding shares of our common stock (79.4% of which are held in trusts

under which voting power is shared with other family members) and members of his family who are (i) officers or directors of the company,

(ii) required to report their beneficial ownership on Schedule 13D or Schedule 13G, or (iii) are members of his immediate family beneficially

own, collectively, an additional 20.9% of the outstanding shares of our common stock.

As a result, these individuals effectively may have

the ability to direct the election of all members of our board of directors and to exercise a controlling influence over its business

and affairs, including any determinations with respect to mergers or other business combinations involving the

Company, its acquisition or disposition of assets,

its borrowing of monies, its issuance of any additional securities, its repurchase of common stock and its payment of dividends.

Provisions in our articles of incorporation and bylaws and certain provisions

of Florida law could delay or prevent a change in control of FRP.

The existence of some provisions of our articles of

incorporation and bylaws and Florida law could discourage, delay or prevent a change in control of FRP that a shareholder may consider

These include provisions:

providing that directors may be removed by

our shareholders only for cause;

authorizing a large number of shares of stock

that are not yet issued, which would allow FRP’s board of directors to issue shares to persons friendly to current management,

thereby protecting the continuity of its management, or which could be used to dilute the stock ownership of persons seeking to

obtain control of FRP;

prohibiting shareholders from calling special

meetings of shareholders or taking action by written consent;

providing that directors may be removed by our shareholders

only for cause;

authorizing a large number of shares of stock that

are not yet issued, which would allow FRP’s board of directors to issue shares to persons friendly to current management, thereby

protecting the continuity of its management, or which could be used to dilute the stock ownership of persons seeking to obtain control

prohibiting shareholders from calling special meetings

of shareholders or taking action by written consent;

imposing advance notice requirements for nominations

of candidates for election to our board of directors at the annual shareholder meetings.

These provisions apply even if a takeover offer

may be considered beneficial by some shareholders and could delay or prevent an acquisition that our board of directors determines

is not in the Company’s or the shareholders’ best interests.

FRP may issue preferred stock with terms

that could dilute the voting power or reduce the value of our common stock.

Our articles of incorporation authorize us

to issue, without the approval of our shareholders, one or more classes or series of preferred stock having such designations,

powers, preferences and relative, participating, optional and other rights, and such qualifications, limitations or restrictions

as our board of directors generally may determine.

The terms of one or more classes or series of preferred stock could dilute the

voting power or reduce the value of FRP's common stock.

For example, FRP could grant holders of preferred stock the right to elect

some number of its directors in all events or on the happening of specified events or the right to veto specified transactions.

Similarly, the repurchase or redemption rights or dividend, distribution or liquidation preferences FRP could assign to holders

of preferred stock could affect the residual value of the common stock.

These provisions apply even if a takeover offer may

be considered beneficial by some shareholders and could delay or prevent an acquisition that our board of directors determines is not

in the Company’s or the shareholders’ best interests.

FRP may issue preferred stock with terms that could

dilute the voting power or reduce the value of our common stock.

Our articles of incorporation authorize us to issue,

without the approval of our shareholders, one or more classes or series of preferred stock having such designations, powers, preferences

and relative, participating, optional and other rights, and such qualifications, limitations or restrictions as our board of directors

generally may determine.

The terms of one or more classes or series of preferred stock could dilute the voting power or reduce the value

of FRP's common stock.

For example, FRP could grant holders of preferred stock the right to elect some number of its directors in all

events or on the happening of specified events or the right to veto specified transactions.

Similarly, the repurchase or redemption rights

or dividend, distribution or liquidation preferences FRP could assign to holders of preferred stock could affect the residual value of

the common stock.

Institutional investor focus on environmental,

social and governance issues may impact our stock price.

Many large institutional investors focus on sustainability

in managing investment risks, portfolio design and dealing with companies in which the invest.

This focus extends to climate change and

the plan for transitioning to a net-zero economy, diversity and inclusion and other human resource matters, and social and governance

issues and corporate social responsibility.

While we are proud of the returns to shareholders and our sustainable practices in construction

and environmental management, we recognize our responsibility to focus on these key issues that impact our long-term sustainability.

failure to demonstrate this commitment could dissuade institutional investors from holding our stock, which would result in downward pressure

on our stock price.

UNRESOLVED STAFF COMMENTS.

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What changed 10-K

Item 1A. Risk Factors