What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2022-03-30 compared with 2021-03-19 · 2632 added, 223 removed, 119 unchanged (96% of the section changed)

CONTROLS AND PROCEDURES.

CONCLUSION REGARDING THE EFFECTIVENESS OF

DISCLOSURE CONTROLS AND PROCEDURES

Under the supervision and with the participation

of our management, including our principal executive officer, principal financial officer and chief accounting officer, we conducted

an evaluation of our disclosure controls and procedures, as such terms is defined under Rule 13a-15(e) promulgated under the Exchange

Based on this evaluation, our principal executive officer, our principal financial officer and our chief

accounting officer concluded that our disclosure

controls and procedures were effective as of the end of the period covered by this Annual Report.

MANAGEMENT’S REPORT ON INTERNAL CONTROL

OVER FINANCIAL REPORTING

Our management is responsible for establishing

and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f).

the supervision and with the participation of our management, including our principal executive officer, principal financial officer

and principal accounting officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting

based on the framework in the Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations

of the Treadway Commission (COSO).

Based on our evaluation under the framework in the Internal Control-Integrated Framework

(2013) , our management concluded that our internal control over financial reporting was effective as of December 31, 2020.

CONCLUSION REGARDING THE EFFECTIVENESS OF DISCLOSURE

CONTROLS AND PROCEDURES

Under the supervision and with the participation of

our management, including our principal executive officer, principal financial officer and chief accounting officer, we conducted an evaluation

of our disclosure controls and procedures, as such terms are defined under Rule 13a-15(e) promulgated under the Exchange Act.

this evaluation, our principal executive officer, our principal financial officer and our chief accounting officer concluded that our

disclosure controls and procedures were effective as of the end of the period covered by this Annual Report.

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER

FINANCIAL REPORTING

Our management is responsible for establishing and

maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f).

Under the supervision

and with the participation of our management, including our principal executive officer, principal financial officer and principal accounting

officer, we conducted an evaluation of the effectiveness of our internal control over

financial reporting based on the framework in the

Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

Based on our evaluation under the framework in the Internal Control-Integrated Framework (2013) , our management concluded that

our internal control over financial reporting was effective as of December 31, 2021.

This Annual Report does not include an attestation

report of our Independent Registered Certified Public Accounting Firm, Hancock Askew & Co., LLP, regarding internal control

over financial reporting.

Management’s report was not subject to attestation by our Independent Registered Certified Public

Accounting Firm pursuant to rules of the Securities and Exchange Commission that permit the Company to provide only management’s

report in this Annual Report.

CHANGE IN INTERNAL CONTROL OVER FINANCIAL

During the fourth quarter of 2020, there were

no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially

affect, our internal control over financial reporting.

report of our Independent Registered Public Accounting Firm, Hancock Askew & Co., LLP, regarding internal control over financial reporting.

Management’s report was not subject to attestation by our Independent Registered Public Accounting Firm pursuant to rules of the

Securities and Exchange Commission that permit the Company to provide only management’s report in this Annual Report.

CHANGE IN INTERNAL CONTROL OVER FINANCIAL REPORTING

During the fourth quarter of 2021, there were no changes

in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal

control over financial reporting.

INHERENT LIMITATIONS OVER INTERNAL CONTROLS

Our internal control over financial reporting

is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated

financial statements for external purposes in accordance with generally accepted accounting principles.

Our internal control over

financial reporting includes those policies and procedures that:

pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect

the transactions and dispositions of our assets;

provide reasonable assurance that transactions are recorded as necessary to permit preparation

of consolidated financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures

are being made only in accordance with authorizations of our management and directors;

provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition,

use or disposition of our assets that could have a material effect on the consolidated financial statements.

Internal control over financial reporting cannot

provide absolute assurance of achieving financial reporting objectives because of its inherent limitations, including the possibility

of human error and circumvention by collusion or overriding of controls.

Accordingly, even an effective internal control system

may not prevent or detect material misstatements on a timely basis.

Also, projections of any evaluation of effectiveness to future

periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance

with the policies or procedures may deteriorate.

Our internal control over financial reporting is designed

to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements

for external purposes in accordance with generally accepted accounting principles.

Our internal control over financial reporting includes

those policies and procedures that:

pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions

and dispositions of our assets;

provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated

financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made

only in accordance with authorizations of our management and directors;

provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use

or disposition of our assets that could have a material effect on the consolidated financial statements.

Internal control over financial reporting cannot provide

absolute assurance of achieving financial reporting objectives because of its inherent limitations, including the possibility of human

error and circumvention by collusion or overriding of controls.

Accordingly, even an effective internal control system may not prevent

or detect material misstatements on a timely basis.

Also, projections of any evaluation of effectiveness to future periods are subject

to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or

procedures may deteriorate.

OTHER INFORMATION.

DIRECTORS, EXECUTIVE OFFICERS AND

CORPORATE GOVERNANCE.

The Company has adopted a Financial Code of

Ethical Conduct applicable to its principal executive officers, principal financial officers and principal accounting officers.

A copy of this Financial Code of Ethical Conduct is filed as Exhibit 14 to this Form 10-K.

The Financial Code of Ethical Conduct

is also available on our web site at www.frpdev.com/investor-relations/corporate-governance/.

The rest of the information required in response

to this Item 10 is included under the captions “Board of Directors & Corporate Governance”, “Our Executive

Officers”, “Securities Ownership” in the Company's Proxy Statement, and such information is incorporated herein

by reference.

The Proxy Statement will be filed with the Securities and Exchange Commission not later than March 31, 2021.

DISCLOSURE REGARDING FOREIGN JURISDICTIONS

THAT PREVENT INSPECTIONS.

Not applicable.

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE

The Company has adopted a Financial Code of Ethical

Conduct applicable to its principal executive officers, principal financial officers and principal accounting officers.

A copy of this

Financial Code of Ethical Conduct is filed as Exhibit 14 to this Form 10-K.

The Financial Code of Ethical Conduct is also available on

our web site at www.frpdev.com/investor-relations/corporate-governance/.

The rest of the information required in response to

this Item 10 is included under the captions “Board of Directors & Corporate Governance”, “Our Executive Officers”,

“Securities Ownership” in the Company's Proxy Statement, and such information is incorporated herein by reference.

Statement will be filed with the Securities and Exchange Commission not later than March 31, 2022.

EXECUTIVE COMPENSATION.

Information required in response to this Item

11 is included under the caption “Executive Compensation” in the Company's Proxy Statement, and such information is

incorporated herein by reference.

The Proxy Statement will be filed with the Securities and Exchange Commission not later than

March 31, 2021.

Information required in response to this Item 11 is

included under the caption “Executive Compensation” in the Company's Proxy Statement, and such information is incorporated

herein by reference.

The Proxy Statement will be filed with the Securities and Exchange Commission not later than March 31, 2022.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL

20 unchanged sentences

not approved by security holders

(a) includes 120,089 stock options granted under our 2016 Equity Incentive Plan and 2006

Stock Incentive Plan and 4,572 performance share awards granted under our 2016 Equity

Incentive Plan.

Each performance share award shown in the table represents a right to

to the satisfaction of certain performance criteria and the recipient’s continued service to the Company, a number of shares

of restricted stock, which number will be calculated after the applicable performance period by dividing the pre-determined value

of each award by the closing price of our common stock on the date the restricted stock is issued.

The aggregate value of the

performance share awards shown in table is $237,500.

For illustrative purposes, the maximum payout of the performance share awards

Column (a) includes 150,829 stock options granted under our 2016 Equity Incentive

Plan and 2006 Stock Incentive Plan and 3,703 performance share awards granted under our 2016 Equity Incentive Plan.

Each performance share

award shown in the table represents a right to receive, subject to the satisfaction of certain performance criteria and the recipient’s

continued service to the Company, a number of shares of restricted stock, which number will be calculated after the applicable performance

period by dividing the pre-determined value of each award by the closing price of our common stock on the date the restricted stock is

The aggregate value of the performance share awards shown in table is $215,000.

For illustrative purposes, the maximum

payout of the performance share awards

has been assumed, and the number of performance share awards has been calculated using our closing stock price on March 2, 2022 ($58.06).

The performance share awards are subject to partial or complete forfeiture if the vesting criteria are not met.

some or all of the performance share awards may not vest, and because the number of shares of restricted stock to be issued thereunder

is dependent on future stock prices, columns (a) and (c) may overstate or understate expected dilution.

there is no exercise price associated with the performance share awards, the weighted-average

exercise price does not take the performance share awards into account.

Because some or all of

the performance share awards may not vest, and because the number of shares of restricted stock to be issued thereunder is dependent on

future stock prices, columns (a) and (c) may overstate or understate expected dilution.

Because there is no exercise price associated with the performance share awards,

the weighted-average exercise price does not take the performance share awards into account.

The remainder of the information

3 unchanged sentences

not later than March 31, 2022.

CERTAIN RELATIONSHIPS

AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.

Information required in response to this Item

13 is included under the captions “Related Party Transactions” and “Board of Directors & Corporate Governance”

in the Company's Proxy Statement, and such information is incorporated herein by reference.

The Proxy Statement will be filed with

the Securities and Exchange Commission not later than March 31, 2021.

PRINCIPAL ACCOUNTING

FEES AND SERVICES.

Information required in response to this Item

14 is included under the captions “Proposal 2:

The Auditor Proposal” in the Company’s Proxy Statement, and such

information is incorporated herein by reference.

The Proxy Statement will be filed with the Securities and Exchange Commission

not later than March 31, 2021.

EXHIBITS, FINANCIAL

STATEMENT SCHEDULE.

(a) (1) and (2) Financial Statements

and Financial Statement Schedule.

The response to this item is

submitted as a separate section.

See Index to Financial Statements and Financial Statement Schedule on page 24 of this Form 10-K.

CERTAIN RELATIONSHIPS AND RELATED

TRANSACTIONS, AND DIRECTOR INDEPENDENCE.

Information required in response to this Item 13 is

included under the captions “Related Party Transactions” and “Board of Directors & Corporate Governance” in

the Company's Proxy Statement, and such information is incorporated herein by reference.

The Proxy Statement will be filed with the Securities

and Exchange Commission not later than March 31, 2022.

PRINCIPAL ACCOUNTING FEES AND

Our independent registered accounting firm is

Hancock Askew & Co., LLP , Jacksonville, Florida , Firm 794 .

Information required in response to this Item 14 is included under

the captions “Proposal 2:

The Auditor Proposal” in the Company’s Proxy Statement, and such information is

incorporated herein by reference.

The Proxy Statement will be filed with the Securities and Exchange Commission not later than March

EXHIBITS, FINANCIAL STATEMENT

(a) (1) Financial Statements.

The response to this item is submitted

as a separate section.

See Index to Financial Statements on page 27 of this Form 10-K.

(3) Exhibits.

The response to this item is

submitted as a separate section.

The response to this item is submitted

as a separate section.

See Exhibit Index on pages 25 through 26 of this Form 10-K.

Pursuant to the requirements of Section 13

or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned,

thereunto duly authorized.

FORM 10-K SUMMARY.

Pursuant to the requirements of Section 13 or 15(d)

of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto

duly authorized.

FRP Holdings, Inc.

6 unchanged sentences

Officer (Principal Accounting Officer)

Pursuant to the requirements of the Securities

Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities

indicated on March 19, 2021.

Pursuant to the requirements of the Securities Exchange

Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated on

March 30, 2022.

Executive Chairman and

6 unchanged sentences

(Principal Financial Officer)

Controller and Chief Accounting

Controller and Chief Accounting Officer

(Principal Accounting Officer)

4 unchanged sentences

FRP HOLDINGS, INC.

FORM 10-K FOR THE FISCAL

YEAR ENDED DECEMBER 31, 2020

FORM 10-K FOR THE FISCAL YEAR

ENDED DECEMBER 31, 2021

EXHIBIT INDEX

4 unchanged sentences

Third Amended and Restated Bylaws of FRP Holdings, Inc., as amended March 31, 2020, incorporated herein by reference to Exhibit 3(i) to the Company’s Form 8-K filed on April 6, 2020 .

Articles III, V and X of the Second Amended and Restated Articles of Incorporation of FRP Holdings, Inc, incorporated herein by reference to Exhibit 3.1 of this Form 10-K.

Articles III, V and X of the Second Amended and Restated Articles of Incorporation of FRP Holdings, Inc, incorporated herein by reference to Exhibit 3.1 of the Company’s Form 10-Q filed May 8, 2015 .

Specimen stock certificate of FRP Holdings, Inc., incorporated herein by reference to Exhibit 4.1 of the Company’s Post-Effective Amendment to Registration Statement on Form S-8 filed on December 5, 2014 .

Description of Registrant’s Common Stock.

Description of Registrant’s Common Stock, incorporated herein by reference to Exhibit 4.3 of the Company’s Form 10-K filed on March 19, 2021 .

Tax Matters Agreement, dated January 30, 2015, by and between FRP Holdings, Inc.

21 unchanged sentences

Subsidiaries of Registrant at December 31, 2021

Florida Rock Properties, Inc.

(a Florida corporation);

FRP Development Corp.

(a Maryland corporation);

34 Loveton Center LLC (a Maryland limited liability company);

1502 Quarry, LLC(a Maryland limited liability company);

FRP Lakeside LLC #3 (a Maryland limited liability company);

FRP Hillside LLC #4 (a Maryland limited liability company);

FRP Bird River LLC (a Maryland limited liability company);

FRP Azalea LLC (a Maryland limited liability company);

FRP Hampstead LLC (a Maryland limited liability company);

FRP Hollander 95 LLC (a Maryland limited liability company);

Brooksville Joint Venture (a Florida limited liability company, 50% owned by the Company);

Lake Louisa, LLC (a Florida limited liability company);

FRP Riverfront I, LLC (a Delaware limited liability company);

Riverfront Investment Partners I, LLC (a Delaware limited liability company);

BC Realty, LLC (a Maryland limited liability company, 50% owned by the Company);

FRP Riverfront II, LLC (a Delaware limited liability company);

Riverfront Investment Partners Phase II, LLC (a Delaware limited liability company, 80% owned by the Company);

FRP Cranberry Run, LLC (a Maryland limited liability company);

FRP Bryant Street Phase I-AC OZ Fund, LLC (a District of Columbia limited liability company);

FRP Bryant Street Phase I-B OZ Fund, LLC (a District of Columbia limited liability company);

FRP Bryant Street Phase I-D OZ Fund, LLC (a District of Columbia limited liability company);

FRP Bryant Street Phase I-E OZ Fund, LLC (a District of Columbia limited liability company);

FRP OZ Fund 2019-A, LLC (a Delaware limited liability company);

FRP OZ Fund 2019-B, LLC (a Delaware limited liability company);

FRP OZ Fund 2019-C, LLC (a Delaware limited liability company;

Bryant Venture Phase I-A&C, LLC (a District of Columbia limited liability Company, 61.36% owned by the Company);

Bryant Venture Phase I-B, LLC (a District of Columbia limited liability Company, 61.36% owned by the Company);

Bryant Venture Phase I-D, LLC (a District of Columbia limited liability Company, 61.36% owned by the Company);

Bryant Venture Phase I-E, LLC (a District of Columbia limited liability Company, 61.36% owned by the Company);

1800 Half Street Owner, LLC (a District of Columbia limited liability company);

Woodfield .408 Jackson OZB, LLC (a Delaware limited liability company);

Woodfield Riverside OZB, LLC (a Delaware limited liability company);

FRP Old Philadelphia Road, LLC (a Maryland limited liability company).

Consent of Hancock Askew & Co., Inc., Independent Registered Certified Public Accounting Firm, appears on page 27 of this Form 10-K.

Consent of Hancock Askew & Co., Inc., Independent Registered Public Accounting Firm, appears on page 28 of this Form 10-K .

Certification of John D.

4 unchanged sentences

Information Statement of Patriot Transportation Holding, Inc., dated January 12, 2015, incorporated by reference to the Company’s Form 8-K filed on January 13, 2015.

XBRL Instance Document

XBRL Taxonomy Extension Schema

XBRL Instance Document Taxonomy Extension Schema

XBRL Taxonomy Extension Schema Document

XBRL Taxonomy Extension Calculation Linkbase

2 unchanged sentences

XBRL Taxonomy Extension Presentation Linkbase

Cover Page Interactive Data File (embedded within the Inline XBRL document and contained in Exhibit 101).

FRP HOLDINGS, INC.

INDEX TO FINANCIAL STATEMENTS

AND FINANCIAL STATEMENT SCHEDULE

(Item 15(a) (1) and 2))

7 unchanged sentences

Notes to consolidated financial statements

Reports of Independent Registered Certified Public Accounting Firm

Report of Independent Registered Public Accounting Firm

Selected quarterly financial data (unaudited)

Consent of Independent Registered Certified Public Accounting Firm

Report of Independent Registered Certified Public Accounting Firm

on Financial Statement Schedule

Consolidated Financial Statement Schedule:

III – Real estate and accumulated depreciation and depletion

(a) Refers to the page number in the Company's 2020 Annual Report to Shareholders.

Such information is incorporated by reference in Item 8 of this Form 10-K.

(b) Refers to the page number in this Form 10-K

All other schedules have been omitted, as they are not required under the related instructions, are inapplicable, or because the information required is included in the consolidated financial statements.

CONSENT OF INDEPENDENT REGISTERED

CERTIFIED PUBLIC ACCOUNTING FIRM

Consent of Independent Registered Public Accounting Firm

All schedules have been omitted, as they

are not required under the related instructions, are inapplicable, or because the information required is included in the consolidated

financial statements.

CONSENT OF INDEPENDENT REGISTERED PUBLIC

ACCOUNTING FIRM

FRP Holdings, Inc.

Jacksonville, Florida

We hereby consent to the incorporation

by reference in the Registration Statements on Form S-8 (No.

We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (No.

333- 125099, 333-131475 and 333-216025) of FRP Holdings, Inc.

reports dated March 19, 2021, relating to the consolidated financial statements which appear in the Annual Report to Shareholders

incorporated by reference herein.

We also consent to the incorporation by reference of our report dated March 19, 2021 relating

to the financial statement schedule, which appears in this Form 10-K.

/s/ Hancock Askew & Co.,

Savannah, Georgia

of our report dated March 30, 2022, relating to the consolidated financial statements which appear in the Annual Report to Shareholders incorporated by reference herein.

Respectfully submitted,

Hancock Askew & Co., LLP

Jacksonville, Florida

March 30, 2022

REPORT OF INDEPENDENT REGISTERED

CERTIFIED PUBLIC ACCOUNTING FIRM ON FINANCIAL STATEMENT SCHEDULE

The Shareholders and Board of Directors

Annual Report 2021

CONSOLIDATED FINANCIAL HIGHLIGHTS

Years ended December 31

(Amounts in thousands except per share

Operating profit

Net investment income

Interest Expense

Equity in loss of joint ventures

Gain on remeasurement of investment in real estate partnership

Gain on sale of real estate

Gain (loss) attributable to noncontrolling interest

Net income attributable to the Company

Per common share:

Net income attributable to the Company:

Shareholders' Equity

Common Shares Outstanding

Book Value Per Common Share

FRP Holdings, Inc.

Our audit of the consolidated financial

statements referred to in our report dated March 19, 2021 appearing in the 2020 Annual Report to Shareholders of FRP Holdings,

(which report and consolidated financial statements are incorporated by reference in this Annual Report on Form 10-K) also

included an audit of the financial statement schedule listed in Item 15(a)(2) of this Form 10-K.

The financial statement schedule

is the responsibility of the Company’s management.

Our responsibility is to express an opinion on the financial statement

schedule based on our audit.

In our opinion, the financial statement schedule presents fairly, in all material respects, the information

set forth therein when read in conjunction with the related consolidated financial statements.

/s/ Hancock Askew & Co.,

Savannah, Georgia

March 19, 2021

a holding company engaged in the real estate business, namely (i) leasing and management of commercial properties owned by the Company,

(ii) leasing and management of mining royalty land owned by the Company, (iii) real property acquisition, entitlement, development and

construction primarily for apartment, retail, warehouse, and office buildings either alone or through joint ventures, (iv) ownership,

leasing and management of buildings through joint ventures.

The Company’s operating subsidiaries are FRP Development Corp.

Rock Properties, Inc.

Our strategy consists

of a re-deployment of proceeds from the May 2018 warehouse sale into asset classes that allow management to exploit its knowledge and

The asset classes of choice are mixed-use, raw land, existing buildings, and strategic partnerships located in core markets

with growth potential.

Emphasis will be placed on generating returns through opportunistic disposition versus cash-flow and long-term

appreciation.

We strive to improve

shareholder value through (1) active engagement with properties and partners to grow asset value, (2) contributing our operating expertise

and connections to maximize value and NOI growth, and (3) manage our capital structure in an efficient and responsible manner, with a

watchful eye on projected future market conditions and trends to facilitate timely disposition of selected assets, (4) balancing growth

against market pressure.

To Our Shareholders,

There is a concept in the study of cognitive behavior

known as “recency bias.” It is a phenomenon you are no doubt familiar with even if you have never heard the term.

memory bias that favors recent events over historical ones, granting what is fresh in our memory a potency lacking in the more distant

This bias leads us to immediately declare the Chiefs-Bills playoff game as the greatest of all time (though that might actually

A C-SPAN clip causes us to claim (incorrectly) that America has never been more politically divided, allowing the partisan name-calling

of today to seem more bitter than the Civil War.

So, as we look forward into 2022 with 2021 fresh in our minds, some might feel a sense

of frustration.

With the seemingly never-ending conveyor belt of new Covid variants, the looming specter of inflation, the moving targets

of herd immunity and normalcy—there is a temptation, and even a compulsion, to get caught up in the moment and think that after

another year of uncertainty, we are right back where we started, cautiously optimistic perhaps, but more cautious than optimistic.

progress has been made, second verse same as the first.

And yet, that description could not be less accurate.

2020 was a truly awful year—in another example

of recency bias, some were (mistakenly) inclined to call it the worst year in American history.

It was chaotic, uncertain, and downright

scary—a period of time when keeping one’s head above water felt like real progress.

That is not an accurate description of

most of 2021, particularly for this Company.

In 2020, we were happy to see our assets behave normally in abnormal times.

This year, we

wanted to move beyond normal, and begin enacting the first stage of a meaningful period of growth for this Company.

By and large, we have

delivered on that.

This year saw the stabilization of The Maren;

permanent financing of the Maren and the refinancing of Dock 79 at extremely favorable terms;

the completion of construction on Riverside,

our first multifamily joint venture in Greenville, South Carolina;

and the completion of construction at Bryant Street, where our anchor

retail tenant is in and operating and residential occupancy is over 50%.

In 2021, we finished construction on two new warehouses at our

Hollander Business Park and began construction on a third, effectively exhausting all available developable inventory in our land bank,

and we sought to remedy exhausting our land bank by purchasing 17 acres of future industrial space.

Finally, after years of speculating

on when, and even if, it might happen, Congress passed an infrastructure bill which should have a meaningful impact on future mining royalty

We ended 2020 with 569 multifamily units, 267,737 square feet of industrial, and $17,051,000 in NOI.

At the end of 2021, we

had 1,256 multifamily units, 413,327 square feet of industrial, and $20,815,000 in NOI.

Despite selling our warehouse portfolio in 2018, we

remain committed to industrial real estate as an asset class through value-add purchases like Cranberry Run as well as developing our

remaining pad sites at Hollander Business Park.

2021 represented a big step forward in that commitment.

As mentioned previously, this

year we completed construction on two new warehouses at Hollander totaling 145,590 square feet, we began construction on a 101,750 square-foot,

build-to-suit, and we purchased 17 acres in Harford County, Maryland where we plan to develop a 250,000 square foot, Class A warehouse

which will comprise the entirety of the developable space on the site.

That is 497,000 square feet of industrial development.

to the 625,000 square feet of industrial development we have planned for our Crause Property adjacent to Cranberry Run which we purchased

last year, then we are talking about over a million square feet of industrial that did not exist prior to Covid.

The 2021 highlights of the Stabilized Joint Venture

segment have been mentioned previously but bear repeating.

In March, the Maren achieved stabilization, meaning 90% of its units were leased

and occupied, triggering a change in control with the end result being that the asset is now consolidated on to our books in exactly the

same way Dock 79 is.

Its balance sheet is now part of our balance sheet and its income statement flows through the Company’s income

In addition to the one-time gain on remeasurement of $51.1 million, this consolidation has impacted and will continue to impact

our depreciation and amortization, greatly increasing both.

As a result, the impact on net income may in fact be negative for some time,

but the positive impact on our NOI and cash flow will be significant.

Around the same time that the Maren reached stabilization, the Company

simultaneously negotiated both the permanent financing of the Maren and a refinancing of Dock 79.

This $180 million loan ($92 million

for Dock 79, $88 million for The Maren) lowered the interest rate at Dock 79 from 4.125% to 3.03%, deferred any principal payments for

12 years for both properties, and repaid our $13.75 million in preferred equity along with $2.3 million in accrued interest.

Covid measures continue to hamstring our retail tenants,

but a full baseball season with fans , particularly in the warm weather months when outdoor seating is not a problem, was

especially meaningful for our retail tenants in light of the

difficulties they faced in 2020.

Build out of The Maren’s second retail space was completed at the beginning of 2022 and the retail tenant is open for business.

Occupancy was strong throughout the year for both assets.

Dock 79 was more than 94% occupied at the end of each

quarter in 2021 which is the first such year for this asset.

Average annual occupancy was 95.47% for Dock 79, which is in line with the

highest average annual occupancy we’ve ever had there and an improvement over 2020’s rate of 93.13%.

Average occupancy at

the Maren since stabilization was 94.84%.

Renewal rates on expiring leases were strong for both buildings.

62.20% of Dock 79’s expiring

leases renewed vs 57.14% in 2020, and as the first generation of leases at the Maren expired, 67.40% renewed.

These are positive developments,

to be sure, but the ability to grow NOI was mitigated severely by the fact that the District kept emergency protocols in place, preventing

us from evicting non-paying tenants and raising rent on renewals.

Though evictions remain a long and complicated process, the prohibition

on raising rents was allowed to lapse at the end of 2021.

Since we start renewal discussions several weeks in advance of expiration, the

prospect of rent increases will not kick in until February, and it remains to be seen if the renewal rates we saw during the rent freeze

persist when rents start moving more in line with where the market rather than the District dictates.

Construction continues on The Verge, our joint venture

with MRP in Buzzard Point, as well as .408 Jackson, our joint venture with Woodfield Development.

We expect both projects to be complete

and leasing to begin in the third quarter of 2022.

More pressing, as alluded to earlier, is the fact that we have finished construction

on both Bryant Street and Riverside.

Bryant Street is a joint venture with MRP for the first phase of a multi-family mixed use project

in northeast Washington, DC.

We have invested $32 million in common equity and another $23 million in preferred equity in this four building,

487-unit development.

From both a capital and size perspective, Bryant Street is a big bet on the DC multi-family market.

is now complete on all four buildings, leasing is underway, and our retail anchor, Alamo Drafthouse Cinema, is open for business.

end, Bryant Street’s residential units are 56.1% leased and 50.9% occupied, and its commercial space is 82.5% leased and 61.7% occupied.

Bryant Street’s primary amenities are the Alamo Drafthouse and its proximity to the DC Metro.

Public transportation and indoor entertainment

are not yet the draws they used to be, but this project is an opportunity zone investment, and it is our intent to retain the property

for the ten-year hold period required to realize the full tax benefits associated with this program.

We have a lengthy investment time

horizon on this project and we still believe the long term fundamentals are in place to make it successful.

As mentioned previously, this

year we also completed construction on Riverside, our first multifamily joint venture in Greenville, South Carolina.

Leasing began in

the third quarter on this 200-unit project, and at year end, it is 60% leased and 49% occupied.

The aggregates business is cyclical.

Its three main

drivers are home construction, commercial construction, and infrastructure, and the first two correlate very strongly with the economy

and business cycle.

A decade of more-or-less uninterrupted growth combined with the pricing power of aggregates producers has been very

kind to our mining tenants and this Company in turn.

Since 2011, our royalty income has achieved a compound annual growth rate of 9%,

which while impressive, is perhaps unsustainable.

Trees, as the saying goes, do not grow to the sky.

If growth is the story of this Company

over the past year, mining royalties is seemingly the only segment that does not fit that narrative.

Royalty revenue was slightly down

this year, and while steady, revenue has been more or less flat for the last three years (2019:

$9.44 million;

9.48 million;

$9.47 million).

A cursory glance at the numbers might lead a reasonable person to conclude that the segment has peaked or at the very

least plateaued.

Anyone paying attention to this sector knows this is not the case.

In 2019, the Company achieved $9 million in mining

royalty revenue for the very first time.

In 2020, we were able to improve on the previous year’s mark despite the loss of double

minimums at our Lake Louisa location which left a $350,000 hole in revenue.

In 2021, Vulcan temporarily shifted its mining activity off

our portion of the Manassas quarry leading to a $600,000 decrease in royalties at the location compared to 2020, and yet total royalty

revenue remained largely unaffected.

That royalties were more or less flat two years in a row, despite major shortfalls in revenue at

specific locations, demonstrates the resilience of this segment and the quality of our tenants and locations.

We have market exposure

in three of the country’s best aggregate producing states both in terms of production and pricing.

Florida and Georgia, where the

bulk of our assets are located, have benefited in particular from accelerated migration to the Sun Belt where job growth and housing starts

continue to outpace the national average.

These are markets where aggregates demand is already high, so the Infrastructure Investment

and Jobs Act will meaningfully impact our mining tenants.

In whatever form this Act’s $110 billion investment in hard infrastructure

makes its way down to the markets our mining assets serve, the result will be an increase in demand when demand is already incredibly

high and supply is stretched.

This should lead to meaningful price increases.

We have always had the utmost confidence in our assets,

but we are particularly excited to see how they will perform in the next few years.

Every pandemic is different, but the one thing they

have in common is that they have all ended.

The same will be true for

Unfortunately, 2021 was not the year it happened.

and probably the world are suffering from Covid fatigue, and each variant that extends the abnormality that is our new, or at least current

normal, aggravates us.

That aggravated recency bias can cause us to lose sight of how far we have come in the last two years.

true for this nation and it is true for this Company.

As you have read in this letter, 2021 was a period of very meaningful growth where

we increased NOI by 22.11%, expanded our number of available multi-family units by 120.74%, and grew our industrial square footage by

We are by no means at the finish line.

This is merely the first step in a process to put our excess capital to work.

are pleased with the initial results, we will continue to work to ensure that, recency bias or not, this Company— your Company—is

one you are proud to own.

Respectfully yours,

and Executive Chairman

FORWARD LOOKING STATEMENTS

Certain matters discussed in this report

contain forward-looking statements, including without limitation relating to the Company's plans, strategies, objectives, expectations,

intentions, capital expenditures, future liquidity, and plans and timetables for completion of pending development projects.

or phrases “anticipate,” “estimate,” ”believe,” “budget,” “continue,” “could,”

“intend,” “may,” “plan,” “potential,” “predict,” “seek,” “should,”

“will,” “would,” “expect,” “objective,” “projection,” “forecast,”

“goal,” “guidance,” “outlook,” “effort,” “target” and similar expressions

identify forward-looking statements.

The following factors and others discussed in the Company’s periodic reports and filings with

the Securities and Exchange Commission are among the principal factors that could cause actual results to differ materially from the forward-looking

levels of construction activity in the markets served by our mining properties;

risk insurance markets;

availability and terms

of financing;

interest rates, inflation and general economic conditions;

demand for warehouse/office facilities in the Baltimore-Washington-Northern

Virginia area;

demand for apartments in Washington D.C., Richmond, Virginia and Greenville, South Carolina;

and ability to obtain zoning

and entitlements necessary for property development.

However, this list is not a complete statement of all potential risks or uncertainties.

These forward-looking statements are made

as of the date hereof based on management’s current expectations, and the Company does not undertake an obligation to update such

statements, whether as a result of new information, future events or otherwise.

Additional information regarding these and other risk

factors may be found in the Company’s other filings made from time to time with the Securities and Exchange Commission.

OPERATING PROPERTIES

The Company owns (predominately in fee simple but

also through ownership of interests in joint ventures) approximately 20,000 acres of land in Florida, Georgia, Maryland, Virginia, South

Carolina, and the District of Columbia.

This land is generally held by the Company in four distinct segments:

(i) Asset Management Segment

(land owned and operated as income producing rental properties in the form of commercial properties), (ii) Mining Royalty Lands Segment

(land owned and leased to mining companies for royalties or rents), (iii) Development Segment (land owned and held for investment to be

further developed for future income production or sales to third parties), and (iv) Stabilized Joint Venture Segment (ownership, leasing

and management of buildings through joint ventures).

Asset Management Segment.

As of December 31,

2021, the Asset Management Segment owned four commercial properties in fee simple as follows:

1) 34 Loveton Circle in suburban Baltimore County,

Maryland consists of one office building totaling 33,708 square feet which is 95.1% occupied (16% of the space is occupied by the Company

for use as our Baltimore headquarters).

The property is subject to commercial leases with various tenants.

21 st Street in Duval County,

Florida was an office building property that remains under lease through March 2026.

We permitted the tenant to demolish all structures

on the property during 2018.

3) Cranberry Run Business Park in Hartford County,

Maryland consists of five office buildings totaling 267,737 square feet which are 81% occupied and 100% leased.

The property is subject

to commercial leases with various tenants.

4) Hollander 95 Business Park in Baltimore City, Maryland

consists of two buildings totaling 145,590 square feet that were completed in the fourth quarter of 2021 and are 29.1% leased.

On May 21, 2018, the Company completed the disposition

of 40 industrial warehouse properties and three additional land parcels to an affiliate of Blackstone Real Estate Partners VIII, L.P.

for $347.2 million.

The Company sold an additional warehouse property, which was excluded from the initial sale due to the tenant exercising

its right of first refusal to purchase the property, to the same buyer for $11.7 million on June 28, 2019.

The warehouse portfolio sale

resulted in the disposition of all of the Company’s industrial flex/office warehouse properties prior to the sale date and constituted

a major strategic shift and, as a result, these properties have been reclassified as discontinued operations for all periods presented

in the financial statements filed herewith.

Mining Royalty Lands Segment – Mining Properties.

The Company owns a fee simple interest in 13 open pit aggregates quarries located in Florida, Georgia and

Virginia, which comprise approximately 15,000 total acres.

The Company’s quarries are subject to mining leases with various tenants,

including Vulcan Materials, Martin Marietta, Cemex, Argos, and The Concrete Company.

Aggregates consist of crushed stone, sand, gravel,

fill dirt, limestone and calcium and are used primarily in construction applications.

Nine of the Company’s quarries (located in Grandin,

FL, Fort Myers, FL, Keuka, FL, Newberry, FL, Astatula, FL, Columbus, GA, Macon, GA, Tyrone, GA, and Manassas, VA;

comprising 12,649 acres

in the aggregate) are currently being mined, and four of the Company’s quarries (located in Marion County, FL, Lake Louisa, FL,

and Lake Sand, FL and Forest Park, GA;

comprising 2,452 acres in the aggregate) are leased but are not currently being mined.

mining lease requires the tenant to pay the Company a royalty based on the number of tons of mined materials sold from our mining property

during a given fiscal year multiplied by a percentage of the average annual sales price per ton sold.

In certain locations, typically

where the reserves on the property have been depleted but the tenant still has a need for the leased land, we collect a minimum annual

rental amount.

In the fiscal years ended December 31, 2021, 2020 and 2019, aggregate tons sold with respect to the Company’s mining

properties were approximately 7,575,000, 8,206,000 and 7,815,000, respectively.

In May 2014, the Company entered into an amendment

to our lease with Vulcan for our Fort Myers location requiring that the mining be accelerated and that the mining plan be conformed to

accommodate the future construction of up to 105 residential dwelling units around the mined lakes.

In return, the Company granted Lee

County an option to purchase a right of way for a connector road that would benefit the residential area on our property and to place

a conservation easement on part of the property, which the County exercised in 2020.

Mining activity commenced in 2017 following Lee County’s

issuance of a mine operating permit allowing Vulcan to begin production.

In November 2017, Lake County commissioners voted

to approve a permit to Cemex to mine the Company’s land in Lake Louisa, Florida.

The county issued the permit in July 2019.

completing the work necessary to prepare this site to become an active sand mine, Cemex expects to begin mining by March 2023.

Mining Royalty Lands Segment - Brooksville Joint

In 2006, a subsidiary of the Company entered into a joint venture agreement with Vulcan Materials Company to jointly own

and develop approximately 4,280 acres of land near Brooksville, Florida as a mixed-use community.

In April 2011, the Florida Department

of Community Affairs issued its final order approving the development of the project consisting of 5,800 residential dwelling units and

over 600,000 square feet of commercial and 850,000 of light industrial uses.

Zoning for the project was approved by the County in August

Vulcan Materials still mines on the property and the Company receives 100% of the royalty on all tons sold at the Brooksville property.

In 2021, 280,000 tons were sold.

During 2017, the Company extended the mining lease on this property for an additional ten years (through

2032) in exchange for an increase in production of 100,000 tons by December 31, 2023.

Mining Royalty Lands Segment - Other Properties .

The segment also owns an additional 107 acres of investment property in Brooksville, Florida.

Development Segment – Warehouse/Office Land.

At December 31, 2021, this segment owned the following

future development parcels:

1) 6 acres of horizontally developed land with 101,750 square feet in one industrial building under construction

at Hollander 95 Business Park in Baltimore City, Maryland.

2) 55 acres of land that will be capable of supporting over 625,000 square feet of industrial product located

at 1001 Old Philadelphia Road in Aberdeen, Maryland.

3) 17 acres of land in Harford County, Maryland that will support 250,000 square feet of industrial development.

Development Segment – Land Held for Investment

At December 31, 2021, this segment owned the following

development parcels:

1) Riverfront on the Anacostia:

The Riverfront on the Anacostia property is a 5.8-acre parcel of real estate

in Washington, D.C.

that fronts the Anacostia River and is adjacent to the Washington Nationals Baseball Park.

A revised Planned Unit

Development (PUD) plan was approved in 2012 and permits the Company to develop, in four phases, a four-building, mixed-use project, containing

approximately 1,161,050 square feet.

The approved development includes numerous publicly accessible open spaces and a waterfront esplanade

along the Anacostia River.

The first phase (now known as Dock 79), which was completed through a joint venture with MRP Realty, and which

consisted of a single building with residential and retail uses, became our fourth business segment in July 2017, now known as the Stabilized

Joint Venture Segment.

The second phase (now known as The Maren), also completed through a joint venture with MRP Realty and consists

of a single building with residential and retail uses, was added to the Stabilized Joint Venture Segment effective March 31, 2021.

final two phases, Phase 3 and Phase 4 remain under a first-stage PUD approval expiring April 5, 2023, permitting 599,545 square feet of

2) Hampstead Trade Center:

The Hampstead Trade Center property in Hampstead, Carroll County, Maryland is

a 118-acre parcel located adjacent to the State Route 30 bypass.

The parcel was previously zoned for industrial use, but our request for

rezoning for residential use was approved in December 2018.

Management believes this to be a higher and better use of the property.

are fully engaged in the formal process of seeking PUD entitlements for this tract, which is now known as “Hampstead Overlook”.

3) Bryant Street:

On December 24, 2018 the Company and MRP Realty formed four partnerships to purchase and

develop approximately five acres of land at 500 Rhode Island Ave NE, Washington, D.C.

This property is the first phase of the Bryant Street

The property is located in an Opportunity Zone, which provides tax benefits in the new communities development program as

established by Congress in the Tax Cuts and Jobs Act of 2017.

This first phase is a mixed-use development which supports 487 residential

units and 91,661 square feet of first floor and stand-alone retail on approximately five acres of the roughly 12-acre site.

is complete and leasing efforts are under way.

4) 1800 Half Street:

On December 20, 2019 the Company and MRP formed a joint venture to acquire and develop

a mixed-use project located at 1800 Half Street, Washington, D.C.

This property is located in the Buzzard Point area of Washington, DC,

less than half a mile downriver from Dock 79 and the Maren.

It lies directly between our two acres on the Anacostia currently under lease

by Vulcan and Audi Field, the home stadium of the DC United.

The project is located in an Opportunity Zone, which provides tax benefits

in the new communities’ development program as established by Congress in the Tax Cuts and Jobs Act of 2017.

The ten-story structure

will have 344 apartments and 11,246 square feet of ground floor retail.

5) Square 664E:

The Company’s Square 664E property is approximately two acres situated on the Anacostia

River at the base of South Capitol Street less than half a mile down river from our Riverfront on the Anacostia property.

This property

is currently under lease to Vulcan Materials for use as a concrete batch plant through 2026.

In March 2017, reconstruction of the bulkhead

was completed at a cost of $4.2 million in anticipation of future high-rise development.

6) .408 Jackson:

In December 2019, the Company entered into a joint venture with a new partner, Woodfield

Development, for the acquisition and development of a mixed-use project known as “.408 Jackson” in Greenville, South Carolina.

Woodfield specializes in Class-A multi-family, mixed use developments primarily in the Carolinas and DC.

The project is located across

the street from Greenville’s minor league baseball stadium and will hold 227 multi-family units and 4,539 square feet of retail

It is located in an Opportunity Zone, which provides tax benefits in the new communities’ development program as established

by Congress in the Tax Cuts and Jobs Act of 2017.

7) Riverside:

In December 2019, the Company entered into a joint venture with Woodfield Development for the

acquisition and development of a 200-unit multi-family apartment project located at 1430 Hampton Avenue, Greenville, South Carolina.

project is located in an Opportunity Zone, which provides tax benefits in the new communities’ development program as established

by Congress in the Tax Cuts and Jobs Act of 2017.

8) Windlass Run:

In March 2016, the Company entered into an agreement with St.

Johns Properties Inc., a Baltimore

development company, to jointly develop the remaining lands of our Windlass Run Business Park,

located in Middle River, Maryland, into

a multi-building business park consisting of approximately 329,000 square feet of single-story office space.

The project will take place

in several phases, with construction of the first phase, which includes two office buildings and two retail buildings totaling 100,030-square-feet

(inclusive of 27,950 retail), commenced in the fourth quarter of 2017 and was completed in January 2019.

At December 31, 2021 Phase I

was 48.0% leased and 46.7% occupied, the subsequent phases will follow as each phase is stabilized.

Stabilized Joint Venture Segment.

At December 31, 2021, this segment owned the following

stabilized joint ventures:

In 2014, approximately 2.1 acres (Phase I) of the total 5.8-acres

was contributed to a joint venture owned by the Company (77%) and our partner, MRP Realty (23%), and construction commenced in October

2014 on a 305-unit residential apartment building with approximately 14,430 square feet of first floor retail space.

Lease up commenced

in May 2016 and rent stabilization of the residential units of 90% occupied was achieved in the third quarter of 2017.

The attainment

of stabilization resulted in a change of control for accounting purposes as the veto rights of the minority shareholder lapsed and the

Company became the primary beneficiary.

As such, beginning July 1, 2017, the Company consolidated the assets (at current fair value based

on a third-party opinion), liabilities and operating results of the joint venture.

This consolidation resulted in a gain on remeasurement

of investment in real estate partnership of $60,196,000 of which $20,469,000 was attributed to the noncontrolling interest.

used the fair value amount to calculate adjusted ownership under the Conversion election.

As such for financial reporting purposes effective

July 1, 2017 the Company ownership is based upon this substantive profit-sharing arrangement and is 66.0% on a prospective basis.

2) The Maren:

On May 4, 2018, the Company and MRP Realty formed a Joint Venture to develop the second phase

only of the four-phase master development known as Riverfront on the Anacostia in Washington, D.C.

The purpose of the Joint Venture is

to develop and own a 250,000-square-foot mixed-use development which supports 264 residential units and 6,758 square feet of retail.

up commenced in March 2020 and rent stabilization of the residential units of 90% occupied was achieved in March 2021.

Reaching stabilization

results in a change of control for accounting purposes as the veto rights of the minority shareholder lapsed and the Company became the

primary beneficiary.

As such, beginning March 31, 2021, the Company consolidated the assets (at fair value), liabilities and operating

results of the joint venture.

This consolidation resulted in a gain on remeasurement of investment in real estate partnership of $51,139,000

of which $13,965,000 was attributed to the noncontrolling interest.

In accordance with the terms of the Joint Venture agreements, the

Company used the fair value amount at date of conversion and calculated an adjusted ownership under the Conversion election.

financial reporting purposes effective March 31, 2021 the Company ownership is based upon this substantive profit sharing arrangement

and is 70.41% on a prospective basis as agreed to by FRP and MRP.

3) DST Hickory Creek:

In July 2019, the Company completed a like-kind exchange by reinvesting $6,000,000

into a Delaware Statutory Trust (DST) known as CS1031 Hickory Creek DST.

The DST owns a 294-unit garden-style apartment community located

in Henrico County, Virginia known as Hickory Creek, which consists of 19 three-story apartment buildings containing 273,940 rentable square

Hickory Creek was constructed in 1984 and substantially renovated in 2016.

The Company is 26.649% beneficial owner and receives

monthly distributions.

Five Year Summary

(Amounts in thousands except per share amounts)

Years Ended December 31,

Summary of Operations:

Operating profit

Interest expense

Income from continuing operations

Per Common Share:

Income from discontinued operations, net

Income (loss) attributable to noncontrolling interest

Net income attributable to the Company

Per Common Share:

Financial Summary:

Property and equipment, net

Long-term debt

Shareholders' equity

Net Book Value per common share

Weighted average common shares - basic

Weighted average common shares - diluted

Number of employees

Shareholders of record

Quarterly Results (unaudited)

(Dollars in thousands except per share

For the Quarter Ended

September 30,

Total Fiscal Year 2021

Operating profit (loss)

Income (loss) from continuing operations

Net income (loss) attributable to the Company

Earnings per common share (a):

Net income attributable to the Company-

Market price per common share (b):

For the Quarter Ended

September 30,

Total Fiscal Year 2020

Operating profit

Income from continuing operations

Net income attributable to the Company

Earnings per common share (a):

Net income attributable to the Company-

Market price per common share (b):

(a) Earnings per share of common stock is computed

independently for each quarter presented.

The sum of the quarterly net earnings per share of common stock for a year may not equal the

total for the year due to rounding differences.

(b) All prices represent high and low daily

closing prices as reported by The Nasdaq Stock Market.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following discussion includes a non-GAAP financial

measure within the meaning of Regulation G promulgated by the Securities and Exchange Commission to supplement the financial results as

reported in accordance with GAAP.

The non-GAAP financial measure discussed is net operating income (NOI).

The Company uses this metric

to analyze its continuing operations and to monitor, assess, and identify meaningful trends in its operating and financial performance.

This measure is not, and should not be viewed as, a substitute for GAAP financial measures.

Refer to “Non-GAAP Financial Measure”

below in this annual report for a more detailed discussion, including reconciliations of this non-GAAP financial measure to its most directly

comparable GAAP financial measure.

Executive Overview

FRP Holdings, Inc.

SCHEDULE III (CONSOLIDATED)-REAL

ESTATE & ACCUMULATED DEPRECIATION AND

DEPLETION (dollars in thousands)

(“FRP” or the “Company”)

is a real estate development, asset management and operating company businesses.

Our properties are located in the Mid-Atlantic and southeastern

United States and consist of:

Lands leased to mining companies,

some of which will have second lives as development properties;

Residential apartments in Washington,

Warehouse or office properties

in the Mid-Atlantic states either existing or under development;

Mixed use properties under development

in Washington, D.C.

or Greenville, South Carolina;

Properties held for sale.

We believe our present capital structure, liquidity

and land provide us with years of opportunities to increase recurring revenue and long-term value for our shareholders.

We intend to focus

on our core business activity of real estate development, asset management and operations.

We are developing a broad range of asset types

that we believe will provide acceptable rates of return, grow recurring revenues and support future business.

Capital commitments will

be funded with cash proceeds from completed projects, existing cash, owned-land, partner capital and financing arrangements.

anticipate immediate benefits from investments.

Timing of projects may be subject to delays caused by factors beyond our control.

Reportable Segments

We conduct primarily all of our business in the following

four reportable segments:

(1) asset management (2) mining royalty lands (3) development and (4) stabilized joint ventures.

For more information regarding our reportable segments, see Note 10.

Business Segments of our consolidated financial statements

included in this annual report.

Highlights of 2021 .

Dock 79’s average annual occupancy was above

95% for the second time ever.

Third year in a row with mining royalties in excess

of $9.4 million.

Grew NOI by 22.11% from $17.05 million in 2020 to

$20.82 million in 2021

With construction complete on both Bryant Street

and Riverside, this year the Company added 687 residential units, an increase of 120.74% over last year

· The Maren reached stabilization meaning 90% of the

individual apartments had been leased and occupied by third party tenants.

This event triggered a change in control and the Company consolidated

the assets (at current fair value), liabilities and operating results of the joint venture.

Asset Management Segment.

The Asset Management segment owns, leases and manages

commercial properties.

These assets create revenue and cash flows through tenant rental payments, lease management fees and reimbursements

for building operating costs.

The Company’s industrial warehouses typically lease for terms ranging from 3 – 10 years often

with 1 or 2 renewal options.

All base rent revenue is recognized on a straight-lined basis.

All of the commercial warehouse leases

are triple net and common area maintenance costs (CAM Revenue) are billed monthly, and insurance and real estate taxes are billed annually.

34 Loveton is the only office product wherein all leases are full service therefore there is no CAM revenue.

Office leases are also

recognized on a straight-lined basis.

The major cash outlays incurred in this segment are for operating expenses, real estate taxes, building

repairs, lease commissions and other lease closing costs, construction of tenant improvements, capital to acquire existing operating buildings

and closing costs related thereto and personnel costs of our property management team.

As of December 31, 2021, the Asset Management Segment

owned four commercial properties in fee simple as follows:

1) 34 Loveton Circle in suburban Baltimore County,

Maryland consists of one office building totaling 33,708 square feet which is 95.1% occupied (16% of the space is occupied by the Company

for use as our Baltimore headquarters).

The property is subject to commercial leases with various tenants.

21 st Street in Duval County,

Florida was an office building property that remains under lease through March 2026.

We permitted the tenant to demolish all structures

on the property during 2018.

3) Cranberry Run Business Park in Hartford County,

Maryland consists of five office buildings totaling 267,737 square feet which are 81% occupied and 100% leased.

The property is subject

to commercial leases with various tenants.

4) Hollander 95 Business Park in Baltimore City, Maryland

consists of two buildings totaling 145,590 square feet that were completed in the fourth quarter of 2021and are 29.1% leased.

Management focuses on several factors to measure our

success on a comparative basis in this segment.

The major factors we focus on are (1) net operating income growth, (2) growth in occupancy,

(3) average annual occupancy rate (defined as the occupied square feet at the end of each month during a fiscal year divided by the number

of months to date in that fiscal year as a percentage of the average number of square feet in the portfolio over that same time period),

(4) tenant retention success rate (as a percentage of total square feet to be renewed), (5) building and refurbishing assets to meet Class

A and Class B institutional grade classifications, and (6) reducing complexities and deferred capital expenditures to maximize sale price.

Mining Royalty Lands Segment.

Our Mining Royalty Lands segment owns several properties

comprising approximately 15,000 acres currently under lease for mining rents or royalties (excluding the 4,280 acres owned by our Brooksville

joint venture with Vulcan Materials).

Other than one location in Virginia, all of these properties are located in Florida and Georgia.

Company leases land under long-term leases that grant the lessee the right to mine and sell reserves from our property in exchange for

royalty payments.

A typical lease has an option to extend the lease for additional terms.

The typical lease in this segment requires the

tenant to pay us a royalty based on the number of tons of mined materials sold from our property during a given fiscal year multiplied

by a percentage of the average annual sales price per ton sold.

As a result of this royalty payment structure, we do not bear the cost

risks associated with the mining operations, however, we are subject to the cyclical nature of the construction markets in these states

as both volumes and prices tend to fluctuate through those cycles.

In certain locations, typically where the reserves on our property

have been depleted but the tenant still has a need for the leased land, we collect a minimum annual rental amount.

We believe strongly

in the potential for future growth in construction in Florida, Georgia, and Virginia which would positively benefit our profitability

in this segment.

fiscal year ended December 31, 2021, a total of 8

million tons were mined.

The major expenses in this segment are comprised of

collection and accounting for royalties, management’s oversight of the mining leases, land entitlement for post-mining uses and

property taxes at our non-leased locations and at our Grandin location which, unlike our other leased mining locations, are not entirely

paid by the tenant.

As such, our costs in this business are very low as a percentage of revenue, are relatively stable and are not affected

by increases in production at our locations.

Our current mining tenants include Vulcan Materials, Martin Marietta, Cemex, Argos and The

Concrete Company.

Additionally, these locations provide us with opportunities

for valuable “second lives” for these assets through proper land planning and entitlement.

Significant “2 nd life” Mining

Brooksville, FL

Development of Regional of Impact and County Land Use and Master Zoning in place for 5,800 residential unit, mixed-use development

Approval in place for 105, 1 acre, waterfront residential lots after mining completed.

Development Segment.

Through our Development segment, we own and are continuously

monitoring for their “highest and best use” several parcels of land that are in various stages of development.

strategy in this segment is to convert all our non-income producing lands into income production through (i) an orderly process of constructing

new commercial and residential buildings for us to own and operate or (ii) a sale to, or joint venture with, third parties.

Additionally,

our Development segment will purchase or form joint ventures on new developments of land not previously owned by the Company.

Revenues in this segment are generated predominately

from land sales and interim property rents.

The significant cash outlays incurred in this segment are for land acquisition costs, entitlement

costs, property taxes, design and permitting, the personnel costs of our in-house management team and horizontal and vertical construction

Development Segment – Warehouse/Office Land.

At December 31, 2021, this segment owned the following

future development parcels:

1) 6 acres of horizontally developed land with 101,750 square feet in one industrial building under construction

at Hollander 95 Business Park in Baltimore City, Maryland.

2) 55 acres of land that will be capable of supporting over 625,000 square feet of industrial product located

at 1001 Old Philadelphia Road in Aberdeen, Maryland.

3) 17 acres of land in Harford County, Maryland that will support 250,000 square feet of industrial development.

We also have three properties that were either spun-off

to us from Florida Rock Industries in 1986 or acquired by us from unrelated third parties.

These properties, as a result of our “highest

and best use” studies, are being prepared for income generation through sale or joint venture with third parties, and in certain

cases we are leasing these properties on an interim basis for an income stream while we wait for the development market to mature.

Development Segment - Significant Investment Lands

Riverfront on the Anacostia Phases III-IV

Conceptual design program ongoing

Hampstead Trade Center, MD

Zoning applied for in preparation for sale

Square 664E, on the Anacostia River in DC

Under lease to Vulcan Materials as a concrete batch plant through 2026

Development Segment - Investments in Joint Ventures

The third leg of our Development Segment consists

of investments in joint venture for properties in development.

The Company has investments in joint ventures, primarily with other real

estate developers which are summarized below:

Brooksville Quarry, LLC near Brooksville, Florida

Vulcan Materials Company

Future planned residential development of 3,500 acres which are currently subject to mining lease

BC FRP Realty, LLC for 35 acres in Maryland

St John Properties

Development of 329,000 square feet multi-building business park in progress

Bryant Street Partnerships for 5 acres of land in Washington, D.C.

Mixed-use development with 487 residential units and 91,661 square feet of retail partially completed

Aberdeen Station residential development in Harford County, Maryland

$31.1 million in exchange for an interest rate of 10% and a 20% preferred return after which the Company is also entitled to a portion of proceeds from sale

Amber Ridge residential development in Prince George’s County, Maryland

$18.5 million in exchange for an interest rate of 10% and a 20% preferred return after which the Company is also entitled to a portion of proceeds from sale

1800 Half Street property in Buzzard Point area of Washington, D.C.

Construction of ten-story structure with 344 apartments and 11,246 square feet of ground floor retail underway

.408 Jackson property in Greenville, SC

Woodfield Development

Construction of mixed-use project with 227 multifamily units and 4,539 square feet of retail space began in May 2020

Riverside property 1430 Hampton Avenue, Greenville, SC

Woodfield Development

Construction of 200-unit apartment project began in February 2020

Joint ventures where FRP is not the primary beneficiary

are reflected in the line “Investment in joint ventures” on the balance sheet and “Equity in loss of joint ventures”

on the income statement.

The following table summarizes the Company’s investments in unconsolidated joint ventures (in thousands):

Share of Profit

Total Assets of

Profit (Loss)

(Loss) of the

The Partnership

Of the Partnership

Partnership (1)

As of December 31, 2021

Brooksville Quarry, LLC

BC FRP Realty, LLC

Riverfront Holdings II, LLC (1)

Bryant Street Partnerships

Aberdeen Station Loan

DST Hickory Creek

Amber Ridge Loan

1800 Half St.

Greenville/Woodfield Partnerships

(1) Riverfront Holdings II, LLC was consolidated on

March 31, 2021, and reflected in Stabilized Joint Ventures.

The major classes of assets, liabilities and equity

of the Company’s Investments in Joint Ventures as of December 31, 2021, are summarized in the following two tables (in thousands):

As of December 31, 2021

Bryant Street

1800 Half St.

Holdings II, LLC

Investments in real estate, net

Cash and cash equivalents

Unrealized rents & receivables

Deferred costs

Secured notes payable

Other liabilities

Capital - FRP

Capital – Third Parties

Total Liabilities and Capital

As of December 31, 2021

Investments in real estate, net.

Cash and cash equivalents

Unrealized rents & receivables

Deferred costs

Secured notes payable

Other liabilities

Capital - FRP

Capital - Third Parties

Total Liabilities and Capital

Stabilized Joint Venture Segment .

Currently the segment includes three stabilized joint

ventures which own, lease and manage buildings.

These assets create revenue and cash flows through tenant rental payments, and reimbursements

for building operating costs.

The Company’s residential spaces generally lease for 12 – 15-month lease terms and 90 days prior

to the expiration, as long as there is no balance due, the tenant is offered a renewal.

If no notice to move out or renew is made, then

the leases go to month to

month until notification of termination or renewal

Renewal terms are typically 9 – 12 months.

In 2021, due to the DC legislation in place freezing rent increases

as a part of a covid relief plan, FRP was unable to increase rental rates for renewals.

This legislation was lifted in February 2022.

The Company also leases retail spaces at apartment/mixed-use properties.

The retail leases are typically 10 -15-year leases with

options to renew for another 5 years.

Retail leases at these properties also include percentage rents which average 3-6% of annual

sales for the tenant that exceed a breakpoint stipulated by each individual lease.

All base rent revenue is recognized on a straight-line

The major cash outlays incurred in this segment are for property taxes, full service maintenance, property management, utilities

and marketing.

The three stabilized joint venture properties are as follows:

Property and Occupancy

Method of Accounting

Dock 79 apartments Washington, D.C.

305 apartment units and 14,430 square feet of retail

The Maren apartments Washington, D.C.

264 residential units and 6,758 square feet of retail

Consolidated as of March 31, 2021

DST Hickory Creek 294 apartment units in Henrico County, MD

Capital Square

COMPARATIVE RESULTS OF OPERATIONS

Consolidated Results

(dollars in thousands)

Twelve Months Ended December 31,

Lease revenue

Mining lands lease revenue

Total Revenues

Cost of operations:

Depreciation/Depletion/Amortization

Operating Expenses

Property Taxes

Management Company indirect

Corporate Expense

Total cost of operations

Total operating profit

Net investment income, including realized gains

of $0 and $298

Interest Expense

Equity in loss of joint ventures

Gain on remeasurement of investment in real estate partnership

Gain on sale of real estate

Income before income taxes

Provision for income taxes

Gain (loss) attributable to noncontrolling interest

Net income attributable to the Company

Net income attributable to the Company for 2021 was

$28,215,000 or $3.00 per share versus $12,715,000 or $1.32 per share in the same period last year.

The calendar year 2021 was impacted

by the following items:

Gain of $51.1 million on the remeasurement of investment

in The Maren real estate partnership, which is included in Income before income taxes.

This gain on remeasurement is mitigated by a $10.1

million provision for taxes and $14.0 million attributable to noncontrolling interest.

The period includes $3,899,000 amortization expense

of the $4,750,000 fair value of The Maren’s leases-in-place established when we booked this asset as part of the gain on remeasurement

upon consolidation of this Joint Venture.

Operating expenses includes $807,000 expense for

non-refundable deposit of $500,000 and due diligence costs on a potential warehouse property where the acquisition has recently been determined

to be considered less than probable.

The prior year included a $250,000 credit for settlement of environmental claims on our Anacostia

Interest income decreased $3,200,000 due to bond

maturities and the repayment of the Company’s preferred interest in The Maren upon the building’s refinancing.

Interest expense increased $1,204,000 due to interest

on The Maren’s debt consolidated in April partially offset by a lower interest rate on Dock 79.

The current year included a $900,000

prepayment penalty on Dock 79 while last year included $902,000 accelerated amortization of deferred loan fees at Dock 79 in anticipation

of the early refinancing.

Gain from sale of real estate decreased $8,365,000.

The year included $805,000 for an easement and sale of excess land in the Mining Royalty Lands Segment.

The prior year included a gain

of $9,170,000 primarily due to the sale of the three remaining lots at our Lakeside Business Park, 1801 62 nd Street, our inactive

and depleted quarry land at Gulf Hammock, and 87 acres from our Ft.

Myers property.

Asset Management Segment Results

Twelve months ended December 31

(dollars in thousands)

Lease revenue

Depreciation, depletion and amortization

Operating expenses

Property taxes

Management company indirect

Corporate expense

Cost of operations

Operating loss

Total revenues in this segment were $2,575,000, down

$172,000 or 6.3%, over the same period last year due to the sale of our warehouse 1801 62nd Street in July 2020 which had $423,000 of

revenues in the same period last year.

Operating loss was $(231,000), up $(229,000) from an operating loss of $(2,000) in the same period

last year primarily due to the sale of 1801 62nd Street.

Mining Royalty Lands Segment Results

Twelve months ended December 31

(dollars in thousands)

Mining lands lease revenue

Depreciation, depletion and amortization

Operating expenses

Property taxes

Management company indirect

Corporate expense

Cost of operations

Operating profit

Total revenues in this segment were $9,465,000 versus

$9,477,000 in the same period last year.

Total operating profit in this segment was $8,240,000, a decrease of $101,000 versus $8,341,000

in the same period last year.

Development Segment Results

Twelve months ended December 31

(dollars in thousands)

Lease revenue

Depreciation, depletion and amortization

Operating expenses

Property taxes

Management company indirect

Corporate expense

Cost of operations

Operating loss

Equity in loss of Joint Venture

Gain on sale of real estate

Interest earned

Loss from continuing operations before income taxes

The Development segment is responsible for (i) seeking

out and identifying opportunistic purchases of income producing warehouse/office buildings, and (ii) developing our non-income producing

properties into income production.

With respect to ongoing projects:

In the third quarter, we purchased 17 acres in Harford County, Maryland for $1.96 million for the

purposes of industrial development.

We are pursuing entitlements on the land, and we anticipate beginning construction in the third quarter

of 2022 on a 250,000 square foot, Class A warehouse which will comprise the entirety of the developable space on the site.

As referenced previously, during the fourth quarter, we completed construction on two industrial

buildings totaling approximately 146,000 square feet at Hollander Business Park.

These assets are now a part of the Asset Management segment.

Construction on the build-to-suit building totaling 101,750 square feet continues and we estimate shell completion and occupancy in the

fourth quarter of 2022.

With respect to our joint venture with St.

John Properties, we are now in the process of leasing

these four single-story buildings totaling 100,030 square feet of office and retail space.

At quarter end, Phase I was 48.1% leased and

46.8% occupied.

We are the principal capital source of a residential development venture in Prince George’s

County, Maryland known as “Amber Ridge.” Of the $18.5 million in committed capital to the project, $15.9 million in

principal draws have taken place to date.

Through the end of the fourth quarter, 34 of the 187 units have been sold, and we have received

$6,362,000 in preferred interest and principal to date.

The Coda, the first of our four buildings at Bryant Street joint venture, received a final certificate

of occupancy on April 1, 2021, and leasing efforts are under way.

At quarter end, the Coda was 93.5% leased and 95.5% occupied.

began in August on the second building at Bryant Street, known as the Chase 1B.

At quarter end, this building was 62.7% leased and 55.9%

Leasing of the third building, the Chase 1A, began during the fourth quarter and at quarter end, this building was 16.3% leased

and 6.4% occupied.

The fourth building which is purely a commercial space is 90% leased to Alamo Draft House and opened in December.

total, at quarter end, all four buildings now have their certificate of occupancy, and Bryant Street’s 487 residential units are

56.1% leased and 50.9% occupied.

Its commercial space is 82.5% leased and 61.7% occupied at quarter end.

We began construction on our 1800 Half Street joint venture project at the end of August 2020 and

expect the building to be complete in the third quarter of 2022.

As of the end of the fourth quarter, the project was 67.01% complete.

At quarter end, our first joint venture in Greenville, South Carolina is now complete and has received

its final certificate of occupancy.

Leasing began on Riverside in the third quarter and the building is 60% leased and 49% occupied.

Jackson is our second joint venture project in Greenville and is currently under construction.

This project is 83.23% complete and we

expect to complete construction and begin leasing in third quarter of 2022.

Stabilized Joint Venture Segment Results

Twelve months ended December 31

(dollars in thousands)

Lease revenue

Depreciation, depletion and amortization

Operating expenses

Property taxes

Management company indirect

Corporate expense

Cost of operations

Operating profit (loss)

Total revenues in this segment were $17,617,000, an

increase of $7,410,000 versus $10,207,000 in the same period last year.

The Maren’s revenue was $6,989,000 and Dock 79 revenues

increased $422,000.

Total operating loss in this segment was $(1,630,000), a decrease of $3,109,000 versus a profit of $1,479,000 in the

same period last year.

The period includes $3,899,000 amortization expense of the $4,750,000 fair value of The Maren’s leases-in-place

established when we booked this asset as part of the gain on remeasurement upon consolidation of this Joint Venture.

Net Operating Income

for this segment was $10,816,000, up $4,164,000 or 62.6% compared to the same period last year due to The Maren’s consolidation

into this segment.

Since The Maren achieved stabilization on the last

day of March, average residential occupancy is 94.84% and 67.40% of expiring leases have renewed with no increase in rent due to the mandated

rent freeze on renewals in DC.

The Maren is a joint venture between the Company and MRP, in which FRP Holdings, Inc.

is the majority partner

with 70.41% ownership.

Dock 79’s average residential occupancy for

2021 was 95.47%.

Through the year, 62.20% of expiring leases renewed with no increase in rent due to the mandated rent freeze on renewals

Dock 79 is a joint venture between the

Company and MRP, in which FRP Holdings, Inc.

majority partner with 66% ownership.

In March, we completed a refinancing of Dock 79 as

well as securing permanent financing for The Maren.

This $180 million loan ($92 million for Dock 79, $88 million for The Maren) lowers

the interest rate at Dock 79 from 4.125% to 3.03%, defers any principal payments for 12 years for both properties, and repays our $13.75

million preferred equity investment in The Maren along with $2.3 million in accrued interest.

Distributions from our CS1031 Hickory Creek DST investment

were $343,000 for 2021.

LIQUIDITY AND CAPITAL RESOURCES

The growth of the Company’s businesses requires

significant cash needs to acquire and develop land or operating buildings and to construct new buildings and tenant improvements.

December 31, 2021, we had $161,521,000 of cash and cash equivalents along with $4,317,000 of investments available for sale.

As of December

31, 2021, we had no debt borrowed under our $20 million Wells Fargo revolver, $506,000 outstanding under letters of credit and $19,494,000

available to borrow under the revolver.

On March 19, 2021, the Company refinanced Dock 79 and The Maren projects pursuant to separate

Loan Agreements and Deed of Trust Notes entered into with Teachers Insurance and Annuity Association of America, LLC.

Dock 79 and The

Maren borrowed principal sums of $92,070,000 and $88,000,000 respectively, in connection with the refinancing.

Cash Flows - The following table summarizes

our cash flows from operating, investing and financing activities for each of the periods presented (in thousands of dollars):

Years ended December 31,

Total cash provided by (used for):

Operating activities

Investing activities

Financing activities

Increase in cash and cash equivalents

Outstanding debt at the beginning of the period

Outstanding debt at the end of the period

Operating Activities - Net cash provided by

operating activities in 2021 was $22,242,000 versus $18,613,000 in the same period last year.

The Gain on remeasurement of investment

in real estate partnership and related deferred income taxes were both non-cash adjustments to net income to arrive at net cash provided

by operating activities.

Net cash provided by operating activities in 2020

was $18,613,000 versus $47,023,000 in 2019.

Net cash used in operating activities of discontinued operations in 2019 was $1,742,000.

cash provided by operating activities of continuing operations was lower primarily due to the prior year deferral of income taxes related

to a 1031 exchange on the sales of 1502 Quarry Drive and 7020 Dorsey Road and the prior year placement of $50 million in two opportunity

Current income tax expense in 2019 included

an $13,797,000 provision to return adjustment related to the deferral of current federal and state taxes due in connection with $50 million

additional Opportunity Zone investment funds invested in June of 2019 but applied to the 2018 returns.

In addition, 2019 included an additional

deferral reduction of $4,213,000 of current state taxes related to the $55 million Opportunity Zone investment in December of 2018 which

were deferred rather than our prior 2018 tax position that the state taxes would not conform to the federal treatment.

The aggregate of

the provision to return adjustments in 2019 of $18 million offset current tax provision of $2 million absent these adjustments for a net

current tax benefit of $16 million.

As of December 31, 2020 the company has deferred taxes of approximately $31 million associated with

$112 million of gains on sales reinvested through Opportunity Zone investments.

These taxes are deferred until the earlier of the sale

of the related investments or December 31, 2026 and 10% of gains are excluded from tax once the investments are held five years plus an

additional 5% is excluded at seven years.

Investing Activities – Net cash provided

by investing activities in 2021 was $66,601,000 versus $50,527,000 in 2020.

The increase was due primarily due to a return of our preferred

equity financing with interest of $16.1 million from The Maren, $5.3 million return of capital from Amber Ridge, $24.6 million decrease

in purchases of corporate bonds due to lack of attractive investment opportunities, and $3.7 million for cash on the books of The Maren

upon consolidation mostly offset by a $15.9 million decrease on maturities and sales of our corporate bond portfolio and the $18.3 million

decrease in proceeds from the sale of assets as the prior year included the sale of the three remaining lots at our Lakeside Business

Park, 1801 62 nd Street, Gulf Hammock, and 87 acres from our Ft.

Myers property.

Net cash provided by investing activities in 2020

was $50,527,000 versus cash used in investing activities of $33,819,000 in 2019.

The increase was due primarily to the proceeds on the

sale of investments available for sale offset by the purchase of investments available for sale, the proceeds from the sale of the three

remaining lots at our Lakeside Business Park, 1801 62 nd Street, Gulf Hammock, and 87 acres form our Ft.

Myers property, offset

by the purchase of property at 1001 Old Philadelphia Road.

At December 31, 2021, the Company was invested in

two corporate bonds valued at $4,266,000 with maturities in January 2022 and U.S.

Treasury notes valued at $24,926,000 maturing in late

The unrealized loss on these investments of $42,000 was recorded as part of comprehensive income and was based on the estimated

market value by National Financial Services, LLC (“NFS”) obtained from sources that may include pricing vendors, broker/dealers

who clear through NFS and/or other sources (Level 2).

The Company recorded no realized gains or losses on bonds that matured or were sold

Financing Activities – Net

cash required by financing activities was $1,231,000 versus $21,838,000 in the same period last year primarily due the refinancing of

Dock 79 for $1.4 million more net of debt issuance costs than the amount matured and $21.0 million lower repurchases of company stock.

Net cash required by financing activities

in 2020 $21,838,000 versus $9,144,000 in 2019 primarily due to the increased purchase of company stock in 2020.

Credit Facilities - On February 6,

2019, the Company entered into a First Amendment to the 2015 Credit Agreement (the "Credit Agreement") with Wells Fargo Bank,

(Wells Fargo”).

The Credit Agreement modifies the Company’s prior Credit Agreement with Wells Fargo, dated January 30,

The Credit Agreement establishes a five-year revolving credit facility with a maximum facility amount of $20 million.

rate under the Credit Agreement will be a maximum of 1.50% over Daily 1-Month LIBOR, which may be reduced quarterly to 1.25% or 1.0% over

Daily 1-Month LIBOR if the Company meets a specified ratio of consolidated total debt to consolidated total capital.

A commitment fee

of 0.25% per annum is payable quarterly on the unused portion of the commitment but the amount may be reduced to 0.20% or 0.15% if the

Company meets a specified ratio of consolidated total debt to consolidated total capital.

The credit agreement contains certain conditions

and financial covenants, including a minimum tangible net worth and dividend restriction.

As of December 31, 2021, these covenants would

have limited our ability to pay dividends to a maximum of $246 million combined.

On March 19, 2021, the Company refinanced

Dock 79 and The Maren projects pursuant to separate Loan Agreements and Deed of Trust Notes entered into with Teachers Insurance and Annuity

Association of America, LLC.

Dock 79 and The Maren borrowed principal sums of $92,070,000 and $88,000,000 respectively, in connection

with the refinancing.

The loans are separately secured by the Dock 79 and The Maren real property and improvements, bear a fixed interest

rate of 3.03% per annum, and require monthly payments of interest only with the principal in full due April 1, 2033.

Either loan may be

prepaid subsequent to April 1, 2024, subject to yield maintenance premiums.

Either loan may be transferred to a qualified buyer as part

of a one-time sale subject to a 60% loan to value, minimum of 7.5% debt yield and a 0.75% transfer fee.

Effective March 31, 2021, the

Company consolidated the assets (at current fair value), liabilities and operating results of our Riverfront Investment Partners II, LLC

partnership (The Maren) which was previously accounted for under the equity method.

As such the full amount of our mortgage loan was recorded

in the consolidated financial statements.

Cash Requirements – The Company expended

capital of $29,431,000 during 2021 for real estate development including investments in joint ventures.

These capital expenditures were

funded from cash and investments on hand, cash generated from operations and property sales, or borrowings under our credit facilities.

The Company expects to make capital and

investments in joint ventures of $54.7 million in

2022 to be funded from cash on hand and cash generated from operations.

Non-GAAP Financial Measures.

To supplement the financial results presented in accordance

with GAAP, FRP presents a non-GAAP financial measure within the meaning of Regulation G promulgated by the Securities and Exchange Commission.

The non-GAAP financial measure included in this Annual Report on Form 10-K is net operating income (NOI).

FRP uses this non-GAAP financial

measure to analyze its operations and to monitor, assess, and identify meaningful trends in its operating and financial performance.

measure is not, and should not be viewed as, a substitute for GAAP financial measures.

Net Operating Income Reconciliation

Twelve months ended 12/31/21 (in thousands)

Net Income (loss)

Income Tax Allocation

Income (loss) before income taxes

Gain on remeasurement of real estate investment

Gain on investment land sold

Unrealized rents

Interest income

Loss on sale of land

Equity in loss of Joint Venture

Interest Expense

Depreciation/Amortization

Management Co.

Allocated Corporate Expenses

Net Operating Income (loss)

Net Operating Income Reconciliation

Twelve months ended 12/31/20 (in thousands)

Income (loss) from continuing operations

Income Tax Allocation

Income (loss) from continuing operations before income taxes

Equity in profit of Joint Ventures

Gains on sale of buildings

Unrealized rents

Interest income

Unrealized rents

Equity in loss of Joint Venture

Interest Expense

Depreciation/Amortization

Management Co.

Allocated Corporate Expenses

Net Operating Income (loss)

OFF-BALANCE SHEET ARRANGEMENTS

The Company has outstanding letters of credit described

above under “Liquidity and Capital Resources.” The Company has guaranteed debt as described above under Note 12 Contingent

The Company unconsolidated Joint Ventures have debt as scheduled under “Investments in Joint Ventures”.

does not have any other off-balance sheet arrangements that either have, or are reasonably likely to have, a current or future material

effect on its

financial condition.

CRITICAL ACCOUNTING POLICIES

Management of the Company considers the following

accounting policies critical to the reported operations of the Company:

Accounts Receivable and Unrealized Rents Valuation .

The Company is subject to customer credit risk that could affect the collection of outstanding accounts receivable and unrealized rents,

that is rents recorded on a straight-lined basis.

To mitigate these risks, the Company performs credit reviews on all new customers and

periodic credit reviews on existing customers.

A detailed analysis of late and slow pay customers is prepared monthly and reviewed by

senior management.

The overall collectibility of outstanding receivables and straight-lined rents is evaluated and allowances are recorded

as appropriate.

Significant changes in customer credit could require increased allowances and affect cash flows.

Net Real Estate Investments and Impairment

Net real estate investments are recorded at cost less accumulated depreciation and depletion.

Provision for depreciation

of Net real estate investments is computed using the straight-line method based on the following estimated useful lives:

Buildings and improvements

Depletion of sand and stone deposits is

computed on the basis of units of production in relation to estimated reserves.

The Company periodically reviews net real estate investments

for potential impairment whenever events or circumstances indicate the carrying amount of a long-lived asset may not be recoverable.

review consists of comparing cap rates on recent cash flows and market value estimates to the carrying values of each asset group.

this review indicates the carrying value might exceed fair value then an estimate of future cash flows for the remaining useful life of

each property is prepared considering anticipated vacancy, lease rates, and any future capital expenditures.

Changes in estimates or assumptions

could have an impact on the Company’s financials.

All direct and indirect costs, including interest

and real estate taxes, associated with the development, construction, leasing or expansion of real estate investments are capitalized

as a development cost of the property.

Included in indirect costs is an estimate of internal costs associated with development and rental

of real estate investments.

Changes in estimates or assumptions could have an impact on the Company’s financials.

Accounting for Real Estate Investments.

Company accounts for its real estate investments which are not wholly owned using either the cost method, the equity method or by consolidation

with related non-controlling interest.

Consolidation is required if the Company controls an investment and is the primary beneficiary.

Equity method is required when the Company has significant influence over the operating and financial policies of the investment but is

not in control or not the primary beneficiary.

Cost method applies when the Company does not have significant influence of the operating

and financial policies.

Significant judgment is required and regular review as the facts change.

Income Taxes.

The Company accounts

for income taxes under the asset-and-liability method.

Deferred tax assets and liabilities represent items that will result in taxable

income or a tax deduction in future years for which the related tax expense or benefit has already been recorded in our statement of earnings.

Deferred tax accounts arise as a result of timing differences between when items are recognized in the Consolidated Financial Statements

compared with when they are recognized in the tax returns.

The Company assesses the likelihood that deferred tax assets will be recovered

from future taxable income.

To the extent recovery is not probable, a valuation allowance is established and included as an expense as

part of our income tax provision.

No valuation allowance was recorded at December 31, 2021, as all deferred tax assets are considered

more likely than not to be realized.

Significant judgment is required in determining and assessing the impact of complex tax laws and

certain tax-related contingencies on the provision for income taxes.

As part of the calculation of the provision for income taxes, we

assess whether the benefits of our tax positions are at least more likely than not of being sustained upon audit based on the technical

merits of the tax position.

For tax positions that are more likely than not of being sustained upon audit, we accrue the largest amount

of the benefit that is more likely than not of being sustained in our consolidated financial statements.

Such accruals require estimates

and judgments, whereby

actual results could vary materially from

these estimates.

Further, a number of years may elapse before a particular matter, for which an established accrual was made, is audited

and resolved.

Most of the Company’s operating expenses

are inflation-sensitive, with inflation generally producing increased costs of operations.

Substantially all of the Company’s royalty

agreements are based on a percentage of the sales price of the related mined items.

Minimum royalties and substantially all lease agreements

provide escalation provisions.

CONSOLIDATED STATEMENTS OF INCOME

– Years ended December 31

(in thousands, except per share amounts)

Years Ended December 31,

Lease revenue

Mining Royalty and rents

Total Revenues

Cost of operations:

Depreciation, depletion and amortization

Operating expenses

Property taxes

Management company indirect

Corporate expenses (Note 3 Related Party)

Total cost of operations

Total operating profit

Net investment income, including realized gains of $ 0 , $ 298 , and $ 949 , respectively

Interest expense

Equity in loss of joint ventures

Gain on remeasurement of investment in real estate partnership

Gain on sale of real estate

Income from continuing operations before income taxes

Provision for income taxes

Income from continuing operations

Income from discontinued operations, net of tax

Gain (loss) attributable to noncontrolling interest

Net income attributable to the Company

Earnings per common share:

Income from continuing operations-

Discontinued operations-

Number of shares (in thousands) used in computing:

-basic earnings per common share

-diluted earnings per common share

See accompanying notes.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME – Years

ended December 31

(In thousands)

Years Ended December 31,

Other comprehensive income (loss) net of tax:

Unrealized (loss) gain on investments, net of income tax effect of $ ( 194 ) , $ ( 145 ) and $ 602

Minimum pension liability, net of income tax effect of $ ( 15 ) , $ 53 and $ 0

Comprehensive income

income attributable to noncontrolling interest

Comprehensive income attributable to the Company

See accompanying notes.

CONSOLIDATED BALANCE SHEETS – As of December

(In thousands, except share data)

Real estate investments at cost:

Buildings and improvements

Projects under construction

Total investments in properties

Less accumulated depreciation and depletion

Net investments in properties

Real estate held for investment, at cost

Investments in joint ventures

Net real estate investments

Cash and cash equivalents

Cash held in escrow

Accounts receivable, net

Investments available for sale at fair value

Federal and state income taxes receivable

Unrealized rents

Deferred costs

Secured notes payable

Accounts payable and accrued liabilities

Other liabilities

Deferred revenue

Deferred income taxes

Deferred compensation

Tenant security deposits

Total liabilities

Commitments and contingencies

Common stock, $ .10 par value

25,000,000 shares authorized,

9,411,028 and 9,363,717 shares issued

and outstanding, respectively

Capital in excess of par value

Retained earnings

Accumulated other comprehensive income, net

Total shareholders’ equity

Noncontrolling interest MRP

Total liabilities and equity

See accompanying notes.

CONSOLIDATED STATEMENTS OF CASH FLOWS – Years ended December 31

(In thousands)

Cash flows from operating activities:

to reconcile net income to net cash provided by continuing operating activities:

Income from discontinued operations, net

Depreciation, depletion and amortization

Deferred income taxes

Gain on remeasurement of invest in real estate partnership

Equity in loss of joint ventures

Gain on sale of equipment and property

Stock-based compensation

Realized (gain) loss on available for sale investments

Deferred debt issuance cost write-off

Net changes in operating assets and liabilities:

Accounts receivable

Deferred costs and other assets

Accounts payable and accrued liabilities

Income taxes payable and receivable

Other long-term liabilities

Net cash provided by operating activities of continuing operations

Net cash used in operating activities of discontinued operations

provided by operating activities

Cash flows from investing activities:

Investments in properties

Investments in joint ventures

Return of capital from investments in joint ventures

Purchases of investments available for sale

Proceeds from sales of investments available for sale

Cash at consolidation of real estate partnership

Cash held in escrow

Proceeds from sale of assets

Net cash provided by (used in) investment activities of continuing operations

Net cash provided by investing activities of discontinued operations

Net cash provided by (used in) investing activities

Cash flows from financing activities:

Proceeds from long-term debt

Repayment of long-term debt

Debt issue costs

Distribution to noncontrolling interest

Repurchase of company stock

Exercise of employee stock options

Net cash used in financing activities of continuing operations

Net cash used in financing activities of discontinued operations

Net cash used in financing activities

Net increase in cash and cash equivalents

Cash and cash equivalents at beginning of year

Cash and cash equivalents at end of the year

Supplemental disclosures of cash flow information:

Cash paid during the year for:

Interest, net of capitalized amounts

Income taxes (refunded) paid

See accompanying notes.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(In thousands, except share amounts)

Balance at January 1, 2019

Exercise of stock options

Stock option grant

Restricted stock compensation

Shares granted to Employee

Shares granted to Directors

Restricted stock award

Shares purchased and cancelled

Contributions from partners

Distributions to partners

Minimum pension liability, net

Unrealized gain on investment, net

Balance at December 31, 2019

Exercise of stock options

Stock option grant compensation

Restricted stock compensation

Shares granted to Employee

Shares granted to Directors

Restricted stock award

Shares purchased and cancelled

Contributions from partners

Distributions to partners

Minimum pension liability, net

Unrealized loss on investment, net

Balance at December 31, 2020

Exercise of stock options

Stock option grant compensation

Restricted stock compensation

Shares granted to Employee

Shares granted to Directors

Restricted stock award

Shares purchased and cancelled

Contributions from partners

Distributions to partners

Minimum pension liability, net

Unrealized loss on investment, net

Balance at December 31, 2021

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Accounting Policies .

ORGANIZATION - FRP Holdings, Inc.

(the “Company”)

is a holding company engaged in various real estate businesses.

The segments of the Company include:

(i) leasing and management of commercial

properties owned by the Company (the “Asset Management Segment”), (ii) leasing and management of mining royalty land owned

by the Company (the “Mining Royalty Lands Segment”), (iii) real property acquisition, entitlement, development and construction

primarily for apartment, retail, warehouse, and office buildings either alone or through joint ventures (the “Development Segment”),

(iv) ownership, leasing and management of buildings through joint ventures (the “Stabilized Joint Venture Segment”).

FRP Holdings, Inc.

was incorporated on April 22, 2014

in connection with a corporate reorganization that preceded the Spin-off of Patriot Transportation Holding, Inc.

The Company’s predecessor

issuer was formed on July 20, 1998.

The business of the Company is conducted through our wholly-owned subsidiaries FRP Development Corp.,

a Maryland corporation (“Development”) and Florida Rock Properties, Inc., a Florida corporation (“Properties”),

and the various subsidiaries of each.

On May 21, 2018, the Company completed the disposition

of 40 industrial warehouse properties and three additional land parcels to an affiliate of Blackstone Real Estate Partners VIII, L.P.

for $ 347.2 million .

One warehouse property valued at $ 11.7 million was excluded from the sale due to the tenant exercising its right of

first refusal to purchase the property.

On June 28, 2019, the Company completed the sale of the excluded property to the same buyer for

$ 11.7 million .

This resulted in the disposition of all of the Company’s industrial flex/office warehouse properties prior to the

sale date and constituted a major strategic shift and as a result, these properties have been reclassified as discontinued operations

for all periods presented.

The Asset Management segment currently contains four commercial properties.

CONSOLIDATION - The consolidated financial

statements include the accounts of the Company inclusive of our operating real estate subsidiaries, Development and Properties, and all

wholly-owned or controlled entities.

Our investments in real estate partnerships which are conducted through limited liability corporations

(“LLC”) are also referred to as joint ventures.

Investments in real estate joint ventures not controlled by the Company are

accounted for under the equity or cost method of accounting as appropriate (See Note 2).

All significant intercompany balances and transactions

are eliminated in the consolidated financial statements.

Effective July 1, 2017 the Company consolidated

the assets (at fair value), liabilities and operating results of our Riverfront Investment Partners I, LLC joint venture (“Dock

79”) which was previously accounted for under the equity method.

Subsequent to the July 1, 2017 consolidation, the ownership of

Dock 79 attributable to our partner MRP Realty is reflected on our consolidated balance sheet as a noncontrolling interest.

In March 2021,

Riverfront II, LLC reached stabilization which resulted in a change of control for accounting purposes as the veto rights of the minority

shareholder lapsed and the Company became the primary beneficiary.

As such, effective March 31, 2021 the Company consolidated the assets

(at fair value), liabilities and operating results of our Riverfront Investment Partners II, LLC joint venture (“The Maren”)

which was previously accounted for under the equity method.

Subsequent to the March 31, 2021 consolidation, the ownership of The Maren

attributable to our partner MRP Realty is reflected on our consolidated balance sheet as a noncontrolling interest.

Such noncontrolling

interests are reported on the Consolidated Balance Sheets within equity but separately from shareholders' equity.

On the Consolidated

Statements of Income, all of the revenues and expenses from Dock 79 are reported in net income, including both the amounts attributable

to the Company and the noncontrolling interest.

The Maren is reflected in Equity in loss of joint ventures on the Consolidated Statements

of Income for the periods up to March 31, 2021 but is reflected like Dock 79 for periods commencing April 1, 2021.

The amounts of

consolidated net income attributable to

the noncontrolling interest is clearly identified on the accompanying Consolidated Statements of Income.

CASH AND CASH EQUIVALENTS - The Company

considers all Treasury bills available for sale regardless of maturity and other highly liquid debt instruments with maturities of three

months or less at time of purchase to be cash equivalents.

Bank overdrafts consist of outstanding checks not yet presented to a bank for

settlement, net of cash held in accounts with right of offset.

INVESTMENTS AVAILABLE FOR SALE - The Company

determines the appropriate classification of its investments in debt securities at the time of purchase and reevaluates such determinations

at each balance sheet date.

Debt securities are classified as held to maturity when the Company has the positive intent and ability to

hold the securities to maturity.

Marketable securities that are bought and held principally for the purpose of selling them in the near

term are classified as trading securities and are reported at fair value, with unrealized gains and losses recognized in earnings.

securities not classified as held to maturity or as trading, are classified as available-for-sale, and are carried at fair value, with

the unrealized gains and losses, net of tax, included in the determination of comprehensive income and reported in the Consolidated Statements

of Comprehensive Income.

The fair value of securities is determined using quoted market prices.

At December 31, 2021, no investments were

held for trading purposes or classified as held to maturity.

REVENUE AND EXPENSE RECOGNITION - Real estate

rental revenue and mining royalties are generally recognized when earned under the leases and are considered collectable.

Rental income

from leases with scheduled increases or other incentives during their term is recognized on a straight-line basis over the term of the

Reimbursements of expenses, when provided in the lease, are recognized in the period that the expenses are incurred.

Sales of real estate are recognized when

the collection of the sales price is reasonably assured and when the Company has fulfilled substantially all of its obligations, which

are typically as of the closing date.

Accounts receivable are recorded net of

discounts and provisions for estimated allowances.

We estimate allowances on an ongoing basis by considering historical and current trends.

We record estimated bad debts expense as a reduction of lease revenue.

We estimate the net collectibility of our accounts receivable and

establish an allowance for doubtful accounts based upon this assessment.

Specifically, we analyze the aging of accounts receivable balances,

historical bad debts, customer concentrations, customer credit-worthiness, current economic trends and changes in customer payment terms.

PROPERTY AND EQUIPMENT - Property and equipment

is recorded at cost less accumulated depreciation and depletion.

Provision for depreciation of property, plant and equipment is computed

using the straight-line method based on the following estimated useful lives:

Building and improvements

Depletion of sand and stone deposits is

computed on the basis of units of production in relation to estimated reserves.

Reserve estimates are periodically adjusted

based upon surveys.

The Company recorded depreciation and depletion

expenses for fiscal year 2021, 2020 and 2019, of $ 8,806,000 , $ 5,766,000 and $ 5,784,000 , respectively.

All direct and indirect costs, including

interest and real estate taxes, associated with the development, construction, leasing or expansion of real estate investments are capitalized

as a cost of the property.

Included in indirect costs is an allocation of internal costs associated with development of real estate investments.

The cost of routine repairs and maintenance to property and equipment is expensed as incurred.

IMPAIRMENT OF LONG-LIVED ASSETS –

The Company reviews its long-lived assets, which include property and equipment and purchased intangible assets subject to amortization

for potential impairment annually or whenever events or circumstances indicate the carrying amount of a long-lived asset may not be recoverable.

This review consists of comparing cap rates on recent cash flows and market value estimates to the carrying values of each asset group.

If this review indicates the carrying value might exceed fair value then an estimate of future cash flows for the remaining useful life

of each property is prepared considering anticipated vacancy, lease rates, and any future capital expenditures.

DEVELOPED PROPERTY RENTALS PURCHASE ACCOUNTING

– Acquisitions of rental property, including any associated intangible assets, are measured at fair value at the date of acquisition.

Any liabilities assumed or incurred are recorded at their fair value at the time of acquisition.

The fair value of the acquired property

is allocated between land and building (on an as-if vacant basis) based on management’s estimate of the fair value of those components

for each type of property and to tenant improvements based on the depreciated replacement cost of the tenant improvements, which approximates

their fair value.

The fair value of the in-place leases is recorded as follows:

· the fair value of leases

in-place on the date of acquisition is based on absorption costs for the estimated lease-up period in which vacancy and foregone revenue

are avoided due to the presence of the acquired leases;

· the fair value of above

and below-market in-place leases based on the present value (using a discount rate that reflects the risks associated with the acquired

leases) of the difference between contractual rent amounts to be paid under the assumed lease and the estimated market lease rates for

the corresponding spaces over the remaining non-cancelable terms of the related leases;

· the fair value of intangible

tenant or customer relationships.

The Company’s determination of these

fair values requires it to estimate market rents for each of the leases and make certain other assumptions.

These estimates and assumptions

affect the rental revenue, and depreciation and amortization expense recognized for these leases and associated intangible assets and

INVESTMENTS IN JOINT VENTURES - The Company

uses the equity method to account for its investments in Brooksville, BC FRP Realty, and Greenville/Woodfield, in which it has a voting

interest of 50% or less and has significant influence but does not have control.

The Company uses the cost method to account for its investment

in DST Hickory Creek because it does not have significant influence over operating and financial policies.

The Company uses the equity

method to account for its investment in the Bryant Street Partnerships and 1800 Half Street, in which it has a voting interest in excess

of 50% because all major decisions are shared equally.

Under the equity method, the investment is originally recorded at cost and adjusted

to recognize the Company’s share of net earnings or losses of the investee, limited to the extent of the Company’s investment

in and advances to the investee and financial guarantees on behalf of the investee that create additional basis.

The Company regularly

monitors and evaluates the realizable value of its investments.

When assessing an investment for an other-than-temporary decline in value,

the Company considers such factors as, the performance of the investee in relation to its own operating targets and its business plan,

the investee’s revenue and cost trends, as well as liquidity and cash position, and the outlook for the overall industry in which

the investee operates.

From time to time, the Company may consider third party evaluations or valuation reports.

If events and circumstances

indicate that a decline in the value of these assets has occurred and is other-than-temporary, the Company records a charge to investment

income (expense).

INCOME TAXES - Deferred tax assets and liabilities

are recognized based on differences between financial statement and tax bases of assets and liabilities using presently enacted tax rates.

Deferred income taxes result from temporary differences between pre-tax income reported in the financial statements and taxable income.

The Company recognizes liabilities for uncertain tax positions based on a two-step process.

The first step is to evaluate the tax position

for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be

sustained on audit.

The second step is to estimate and measure the tax benefit as the largest amount that is more than 50% likely to be

realized upon ultimate settlement.

It is inherently difficult and subjective to estimate such amounts, as the amounts rely upon the determination

of the probability of various possible outcomes.

The Company reevaluates these uncertain tax positions on a quarterly basis.

This evaluation

is based on factors including, but not limited to,

changes in facts or circumstances, changes

in tax law and expiration of statutes of limitations, effectively settled issues under audit, and audit activity.

Such a change in recognition

or measurement would result in the recognition of a tax benefit or an additional charge to the tax provision.

It is the Company's policy

to recognize as additional income tax expense the items of interest paid and

penalties directly related to income taxes.

STOCK BASED COMPENSATION – The Company

accounts for compensation related to share based plans by recognizing the grant date fair value of stock options and other equity-based

compensation issued to employees in its income statement over the requisite employee service period using the straight-line attribution

In addition, compensation expense must be recognized for the change in fair value of any awards modified, repurchased or cancelled

after the grant date.

The fair value of each grant is estimated on the date of grant using the Black-Scholes option-pricing model.

assumptions used in the model and current year impact are discussed in Note 7.

DEFERRED COMPENSATION PLAN - The Company

has a deferred compensation plan, the Management Security Plan (MSP) for our President.

The accruals for future benefits are based upon

actuarial assumptions.

EARNINGS PER COMMON SHARE - Basic earnings

per common share are based on the weighted average number of common shares outstanding during the periods.

Diluted earnings per common

share are based on the weighted average number of common shares and potential dilution of securities that could share in earnings.

differences between basic and diluted shares used for the calculation are the effect of employee and director stock options and restricted

USE OF ESTIMATES - The preparation of financial

statements in conformity with accounting principles generally accepted in the United State requires management to make estimates and assumptions

that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial

statements and the reported amounts of revenues and expenses during the reporting period.

Actual results could differ from those estimates.

Certain accounting policies and estimates

are of more significance in the financial statement preparation process than others.

The most critical accounting policies and estimates

include the economic useful lives of our mining reserves, property and equipment, provisions for uncollectible accounts receivable and

collectibility of unrealized rents, accounting for real estate investments, estimates of exposures related to our insurance claims plans

and environmental liabilities, and estimates for taxes.

To the extent that actual, final outcomes are different than these estimates,

or that additional facts and circumstances result in a revision to these estimates, earnings during that accounting period will be affected.

ENVIRONMENTAL - Environmental expenditures

that benefit future periods are capitalized.

Expenditures that relate to an existing condition caused by past operations, and which do

not contribute to current or future revenue generation, are expensed.

Liabilities are recorded for the estimated amount of expected environmental

assessments and/or remedial efforts.

Estimation of such liabilities includes an assessment of engineering estimates, continually evolving

governmental laws and standards, and potential involvement of other potentially responsible parties.

COMPREHENSIVE INCOME – Comprehensive

income consists of net income and other comprehensive income (loss).

Other comprehensive income (loss) refers to expenses, gains, and

losses that are not included in net income, but rather are recorded directly in shareholders’ equity.

RECENTLY ISSUED ACCOUNTING STANDARDS – In February

2016, the FASB issued ASU No.

2016-02, “Leases (Topic 842)”, which requires lessees to recognize a right-to-use asset and

a lease obligation for all leases.

The Company is not a significant lessee.

Lessors will account for leases using an approach that is

substantially equivalent to existing accounting standards.

The Company's existing leases will continue to be classified as operating leases.

Leases entered into after the effective date of the new standard may be classified as operating or sales-type leases, based on specific

classification criteria.

Operating leases will continue to have a similar pattern of recognition as under current GAAP.

Sales-type lease

accounting, however, will result in the recognition of selling profit at lease commencement, with interest income recognized over the

life of the lease.

The new standard also includes a change to the treatment of internal leasing costs and legal costs, which can no longer

be capitalized.

Only incremental costs of a lease that would not have been

incurred if the lease had not been obtained may be

deferred as initial direct costs.

The new standard also requires lessors to exclude from variable payments certain lessor costs, such

as real estate taxes, that the lessor contractually requires the lessee to pay directly to a third party on its behalf.

The new standard

requires our expected credit loss related to the collectability of lease receivables to be reflected as an adjustment to the line item

Lease Revenue.

Additionally, the new standard requires lessors to allocate the consideration in a contract between the lease component

(right to use an underlying asset) and non-lease component (transfer of a good or service that is not a lease).

However, lessors are provided

with a practical expedient, elected by class of underlying asset, to account for lease and non-lease components of a contract as a single

lease component if certain criteria are met.

The terms of the Company's leases generally provide that the Company is entitled to receive

reimbursements from tenants for operating expenses such as real estate taxes, insurance and common area maintenance, in addition to the

base rental payments for use of the underlying asset.

Under the new standard, common area maintenance is considered a non-lease component

of a lease contract, which would be accounted for under Topic 606.

However, the Company will apply the practical expedient to account

for its lease and non-lease components as a single, combined operating lease component.

While the timing of recognition should remain

the same, the Company is no longer presenting reimbursement revenue from tenants separately in our Consolidated Statements of Income beginning

January 1, 2019.

The new standard along with the adoption of

2018-11, Leases - Targeted Improvements which the FASB issued in July 2018, was adopted effective January 1, 2019 and we have

elected to use January 1, 2019 as our date of initial application.

We elected the package of practical expedients permitted under the

transition guidance within the new standard.

By adopting these practical expedients, we were not required to reassess (1) whether an existing

contract meets the definition of a lease;

(2) the lease classification for existing leases;

or (3) costs previously capitalized as initial

direct costs.

The adoption of this guidance did not have a material impact on our financial statements.

Investments in Joint Ventures .

The Company has investments in joint ventures, primarily

with other real estate developers.

Joint ventures where FRP is not the primary beneficiary are reflected in the line “Investment

in joint ventures” on the balance sheet and “Equity in loss of joint ventures” on the income statement.

The assets of

these joint ventures are restricted to use by the joint ventures and their obligations can only be settled by their assets or additional

contributions by the partners.

On October 8, 2021 the Company entered into a loan

agreement with a Baltimore developer to be the principal capital source of a residential development venture in Harford County, Maryland

known as “Aberdeen Station.” We have committed up to $ 31.1 million in exchange for an interest rate of 10 % and a preferred

return of 20 % after which the Company is also entitled to a portion of proceeds from sale.

This project will hold 344 single-family homes

and town homes.

The following table summarizes the Company’s

Investments in unconsolidated joint ventures (in thousands):

Share of Profit

Total Assets of

Profit (Loss)

(Loss) of the

The Partnership

Of the Partnership

Partnership (1)

As of December 31, 2021

Brooksville Quarry, LLC

BC FRP Realty, LLC

Riverfront Holdings

Bryant Street Partnerships

Aberdeen Station Loan

DST Hickory Creek

Amber Ridge Loan

1800 Half St.

Greenville/Woodfield Partnerships

Share of Profit

Total Assets of

Profit (Loss)

(Loss) of the

The Partnership

Of the Partnership

Partnership (1)

As of December 31, 2020

Brooksville Quarry, LLC

BC FRP Realty, LLC

Riverfront Holdings II, LLC

Bryant Street Partnerships

DST Hickory Creek

Amber Ridge Loan

1800 Half St.

Greenville/Woodfield Partnerships

Riverfront Holdings II, LLC was consolidated on March 31, 2021.

Bryant Street Partnerships

includes $ 747,000

in 2021 and $ 1,146,000

in 2020 for the Company’s share of preferred interest and $ 471,000

in 2021 and $ 471,000

in 2020 for amortization of guarantee liability related to the Bryant Street loan.

major classes of assets, liabilities and equity of the Company’s Investments in Joint Ventures as of December 31,

2021 are summarized in the following two tables (in thousands):

Investments in Apartment/Mixed Use Joint

Ventures as of December 31, 2021

As of December 31, 2021

Bryant Street

1800 Half St.

Holdings II, LLC

Investments in real estate, net

Cash and cash equivalents

Unrealized rents & receivables

Deferred costs

Secured notes payable

Other liabilities

Capital - FRP

Capital – Third Parties

Total Liabilities and Capital

in Joint Ventures as of December 31, 2021

As of December 31, 2021

Investments in real estate, net

Cash and cash equivalents

Unrealized rents & receivables

Deferred costs

Secured notes payable

Other liabilities

Capital - FRP

Capital - Third Parties

Total Liabilities and Capital

The Company’s capital recorded by the unconsolidated

Joint Ventures is $ 5,461,000 less than the Investment in Joint Ventures reported in the Company’s consolidated balance sheet due

primarily to capitalized interest.

The major classes of assets, liabilities and equity

of the Company’s Investments in Joint Ventures as of December 31, 2020 are summarized in the following two tables (in thousands):

Investments in Apartment/Mixed Use Joint

Ventures as of December 31, 2020

As of December 31, 2020

Bryant Street

1800 Half St.

Holdings II, LLC

Investments in real estate, net

Cash and cash equivalents

Unrealized rents & receivables

Deferred costs

Secured notes payable

Other liabilities

Capital - FRP

Capital - Third Parties

Total Liabilities and Capital

in Joint Ventures as of December 31, 2020

As of December 31, 2020

Investments in real estate, net

Cash and cash equivalents

Unrealized rents & receivables

Deferred costs

Secured notes payable

Other liabilities

Capital - FRP

Capital - Third Parties

Total Liabilities and Capital

The amount of consolidated retained earnings (accumulated

deficit) for these joint ventures was $ ( 8,942,000 ) and $ ( 8,278,000 ) as of December 31, 2021 and December 31, 2020, respectively.

The income statements of the Bryant Street Partnerships

are as follows (in thousands):

Bryant Street

Company Share

Rental Revenue

Revenue – other

Total Revenues

Cost of operations:

Depreciation and amortization

Operating expenses

Property taxes

Total cost of operations

Total operating profit (loss)

Interest expense

Net loss before tax

Related Party Transactions .

The Company is a party to an Administrative

Services Agreement which resulted from our January 30, 2015 spin-off of Patriot Transportation Holding, Inc.

The Administrative

Services Agreement sets forth the terms on which Patriot will provide to FRP certain services that were shared prior to the Spin-off,

including the services of certain employees and executive officers.

The boards of the respective companies amended and extended this agreement

for one year effective April 1, 2022.

The consolidated statements of income reflect

charges and/or allocation from Patriot for these services of $ 1,025,000 and $ 1,305,000 for 2021 and 2020, respectively.

These charges

are reflected as part of corporate expenses.

To determine these allocations between FRP

and Patriot as set forth in the Administrative Services Agreement, we employ an allocation method to allocate said expenses and thus we

believe that the allocations to FRP are a reasonable approximation of the costs related to FRP’s operations, but any such related-party

transactions cannot be presumed to be carried out on an arm’s-length basis.

Debt is summarized as follows (in thousands):

Fixed rate mortgage loans, 3.03 % interest only, matures 4/1/2033

Unamortized debt issuance costs

Credit agreement

Long term debt

The aggregate amount of principal payments,

excluding the revolving credit, due subsequent to December 31, 2021 is:

2026 and subsequent

years - $ 180,070,000 .

On February 6, 2019, the Company entered

into a First Amendment to the 2015 Credit Agreement (the “Credit

Agreement”) with Wells Fargo Bank,

(“Wells Fargo”), effective February 6, 2019.

The Credit Agreement modifies the Company’s prior Credit Agreement

with Wells Fargo dated January 30, 2015.

The Credit Agreement establishes a five -year revolving credit facility with a maximum facility

amount of $ 20 million .

The interest rate under the Credit Agreement will be a maximum of 1.50 % over Daily 1-Month LIBOR, which may be

reduced quarterly to 1.25 % or 1.0 % over Daily 1-Month LIBOR if the Company meets a specified ratio of consolidated debt to consolidated

total capital, as defined which excludes FRP Riverfront.

A commitment fee of 0.25 % per annum is payable quarterly on the unused portion

of the commitment but the amount may be reduced to 0.20 % or 0.15 % if the Company meets a specified ratio of consolidated total debt to

consolidated total capital.

The Credit Agreement contains certain conditions, affirmative financial covenants and negative covenants.

As of December 31, 2021, there was no debt outstanding on this revolver, $ 506,000 outstanding under letters of credit and $ 19,494,000

available for borrowing.

The letters of credit were issued to guarantee certain obligations to state agencies related to real estate development.

Most of the letters of credit are irrevocable for a period of one year and typically are automatically extended for additional one-year

The letter of credit fee is 1 % and applicable interest rate would have been 1.10425 % on December 31, 2021.

The credit agreement

contains certain conditions and financial covenants, including a minimum tangible net worth and dividend restriction.

As of December 31,

2021, these covenants would have limited our ability to pay dividends to a maximum of $ 246 million combined.

On November 17, 2017, Dock 79 borrowed a

principal sum of $ 90,000,000 pursuant to a Loan Agreement and Deed of Trust Note entered into with EagleBank.

The loan was secured by

the Dock 79 real property and improvements, bore a fixed interest rate of 4.125 % per annum and had a term of 120 months .

paid in full on March 19, 2021.

A prepayment penalty of $ 900,000 was recorded into interest expense in the quarter ending March 31, 2021.

Effective March 31, 2021, the Company consolidated

the assets (at current fair value), liabilities and operating results of our Riverfront Investment Partners II, LLC partnership (“The

Maren”) which was previously accounted for under the equity method.

As such the full amount of our mortgage loan was recorded in

the consolidated financial statements.

On March 19, 2021, the Company refinanced

Dock 79 and The Maren projects pursuant to separate Loan Agreements and Deed of Trust Notes entered into with Teachers Insurance and Annuity

Association of America, LLC.

Dock 79 and The Maren borrowed principal sums of $ 92,070,000 and $ 88,000,000 respectively, in connection

with the refinancing.

The loans are separately secured by the Dock 79 and The Maren real property and improvements, bear a fixed interest

rate of 3.03 % per annum, and require monthly payments of interest only with the principal in full due April 1, 2033.

Either loan may be

prepaid subsequent to April 1, 2024, subject to yield maintenance premiums.

Either loan may be transferred to a qualified buyer as part

of a one-time sale subject to a 60% loan to value, minimum of 7.5% debt yield and a 0.75% transfer fee .

Debt cost amortization of $ 150,000 was recorded

During 2021 and 2020, the Company capitalized interest costs of $ 3,783,000 and $ 3,762,000 , respectively.

The Company was in compliance with all debt

covenants as of December 31, 2021.

The Company is a lessor of residential apartment homes,

retail portions of mixed-use communities, commercial properties, and open pit aggregates quarries.

The Company’s residential spaces generally lease

for 12 – 15-month lease terms and 90 days prior to the expiration, as long as there is no balance due, the tenant is offered a renewal.

If no notice to move out or renew is made, then the leases go to month to month until notification of termination or renewal is received.

Renewal terms are typically 9 – 12 months.

In 2021, due to the DC legislation in place freezing rent increases as a part of

a covid relief plan, FRP was unable

to increase rental rates for renewals.

This legislation

was lifted in February 2022.

The Company also leases retail spaces at apartment/mixed-use

The retail leases are typically 10 -15-year leases with options to renew for another 5 years.

Retail leases at these

properties also include percentage rents which average 3-6% of annual sales for the tenant that exceed a breakpoint stipulated by each

individual lease.

All base rent revenue is recognized on a straight-line basis.

Commercial & Office

The Company’s industrial warehouses typically

lease for terms ranging from 3 – 10 years often with 1 or 2 renewal options.

All base rent revenue is recognized on a straight-lined

All of the commercial warehouse leases are triple net and common area maintenance costs (CAM Revenue) are billed monthly, and insurance

and real estate taxes are billed annually.

34 Loveton is the only office product wherein all leases are full service therefore there is

no CAM revenue.

Office leases are also recognized on a straight-lined basis.

The Company leases land under long-term leases that

grant the lessee the right to mine and sell reserves from our property in exchange for royalty payments.

A typical lease has an option

to extend the lease for additional terms.

At December 31, 2021, the total Carrying

value of property owned by the Company which is leased or held for lease to others is summarized as follows (in thousands):

Construction aggregates property

Commercial property

Residential/mixed use property

Carrying Value of property owned by the Company leased or held for lease, gross

Less accumulated depreciation and depletion

Carrying Value of property owned by the Company leased or held for lease, net

The minimum future straight-lined rentals

due the Company on noncancelable leases as of December 31, 2021 are as follows:

2022 - $ 15,610,000 ;

2023 - $ 5,115,000 ;

2024 - $ 4,924,000 ;

2025 - $ 4,561,000 ;

2026 - $ 3,606,000 ;

2027 and subsequent years $ 16,691,000 .

Earnings per Share .

The following details the computations of

the Basic and Diluted Earnings Per Common Share (in thousands, except per share amounts):

Years Ended December 31

Common shares:

Weighted average common shares outstanding during the period – shares used for basic earnings per common share

Common shares issuable under share based payments plans which are potentially dilutive

Common shares used for diluted earnings per common share

Income from continuing operations

Discontinued operations

Net income attributable to the Company

Basic earnings per common share:

Income from continuing operations

Discontinued operations

Net income attributable to the Company

Diluted earnings per common share:

Income from continuing operations

Discontinued operations

Net income attributable to the Company

For 2021 and 2020, 6,680 and 53,545 shares,

respectively, attributable to outstanding stock options were excluded from the calculation of diluted earnings per share because their

inclusion would have been anti-dilutive.

During 2021 the Company repurchased 6,004

shares at an average cost of $ 43.95 .

During 2020 the Company repurchased 510,145 shares at an average cost of $ 41.78 .

During 2019 the

Company repurchased 169,251 shares at an average cost of $ 48.51 .

Stock-Based Compensation Plans .

The Company has two Stock Option Plans (the

2006 Stock Incentive Plan and the 2016 Equity Incentive Option Plan) under which options for shares of common stock were granted to directors,

officers and key employees.

The 2016 plan permits the grant of stock options, stock appreciation rights, restricted stock awards, restricted

stock units, or stock awards.

The options awarded under the plans have similar characteristics.

All stock options are non-qualified and

expire ten years from the date of grant.

Stock based compensation awarded to directors, officers and employees are exercisable immediately

or become exercisable in cumulative installments of 20% or 25% at the end of each year following the date of grant.

When stock options

are exercised the Company issues new shares after receipt of exercise proceeds and taxes due, if any, from the grantee.

The Company utilizes the Black-Scholes valuation

model for estimating fair value of stock compensation for options awarded to officers and employees.

Each grant is evaluated based upon

assumptions at the time of grant.

The assumptions were no dividend yield, expected volatility between 29 % and 41 %, risk-free interest

rate of 1.0 % to 2.9 % and expected life of 3.0 to 7.0 years.

The dividend yield of zero is based on the

fact that the Company does not pay cash dividends and has no present intention to pay cash dividends.

Expected volatility is estimated

based on the Company’s historical experience over a period equivalent to the expected life in years.

The risk-free interest rate

is based on the U.S.

Treasury constant maturity interest rate at the date of grant with a term consistent with the expected life of the

options granted.

The expected life calculation is based on the observed and expected time to exercise options by the employees.

In January 2021, 8,896 shares of restricted

stock were granted to employees that will vest over the next four years .

In January 2021, 18,882 shares of restricted stock were

granted to employees as part of a long-term incentive plan that will vest over the next five years .

In March 2020, 20,520 shares of

restricted stock were granted to employees as part of a long-term incentive plan that will vest over the next five years .

of common shares available for future issuance was 403,499 at December 31, 2021.

In March 2021 and March 2020, 1,098 and 11,448

shares of stock, respectively, were granted to employees rather than stock options as in prior years.

The Company recorded the following Stock

compensation expense in its consolidated statements of income (in thousands):

Years Ended December 31,

Stock option grants

Restricted stock awards

Employee stock grant

Unrestricted employee stock award

Annual director stock award

Stock compensation

A Summary of changes in outstanding options

is presented below (in thousands, except share and per share amounts):

Fair Value(000's)

at January 1, 2019

at December 31, 2019

at December 31, 2020

at December 31, 2021

Vested during twelve months ended

December 31, 2021

end of period

The following table summarizes information

concerning stock options outstanding at December 31, 2021:

Summary of stock options outstanding

Range of Exercise

Prices per Share

Exercise Price

Remaining Life

Non-exercisable:

$44.31 - $45.97

$19.68 - $29.52

$29.53 - $44.30

$44.31 - $45.97

The aggregate intrinsic value of exercisable

in-the-money options was $ 1,984,000 and the aggregate intrinsic value of outstanding in-the-money options was $ 2,081,000 based on the

market closing price of $ 57.80 on December 31, 2021 less exercise prices.

The unrecognized compensation cost of options

granted to FRP employees but not yet vested as of December 31, 2021 was $ 129,000 , which is expected to be recognized over a weighted-average

period of 1.9 years .

Gains of $ 602,000 were realized by option

holders during the year ended December 31, 2021.

A Summary of changes in restricted stock

awards is presented below (in thousands, except share and per share amounts):

Restricted stock

Fair Value(000's)

Non-vested at January 1, 2020

Performance-based awards granted

Non-vested at December 31, 2020

Time-based awards granted

Performance-based awards granted

Non-vested at December 31, 2021

Total unrecognized compensation cost of

restricted stock granted but not yet vested as of December 31, 2021 was $ 1,259,000 which is expected to be recognized over a weighted-average

period of 3.4 years .

Income Taxes .

The Provision for income tax expense included

in the financial statements (in thousands):

Years Ended December 31,

Included in Net income:

Continuing operations

Discontinued operations

Income tax expense benefit

Comprehensive income

Total tax expense

The Provision for income taxes (income tax

benefit) consists of the following (in thousands):

Year Ended December 31,

Current income tax expense

The deferred taxes in 2020 are primarily

related to the bonus depreciation on property placed in service.

Taxes in 2020 were favorably impacted by $ 1,100,000 due to a carryback

of our 2020 tax net operating loss to fiscal 2016 when the federal tax rate was 35 %.

Current income tax expense in 2019 includes a $ 13,797,000

provision to return adjustment related to the deferral of current federal and state taxes due in connection with $ 50 million additional

Opportunity Zone investment funds invested in June of 2019 but applied to the 2018 returns.

In addition, 2019 includes an additional deferral

reduction of $ 4,213,000 of current state taxes related to the $ 55 million Opportunity Zone investment in December of 2018 which were deferred

rather than our prior 2018 tax position that the state taxes would not conform to the federal treatment.

The aggregate of the provision

to return adjustments in 2019 of $ 18 million offset current tax provision of $ 2 million absent these adjustments for a net current tax

benefit of $ 16 million .

As of December 31, 2021 the company has

deferred taxes of approximately $ 31 million associated with $ 112 million of gains on sales reinvested through Opportunity Zone investments.

These taxes are deferred until the earlier of the sale of the related investments or December 31, 2026 and 10% of gains are excluded from

tax once the investments are held five years plus an additional 5% is excluded at seven years .

A Reconciliation between the amount of tax

shown above and the amount computed at the statutory Federal income tax rate follows (in thousands):

Year Ended December 31

Amount computed at statutory

State income taxes (net of Federal

income tax benefit)

Carryback of net operating loss

Provision for income taxes

In this reconciliation, the category “Other,

net” consists of permanent tax differences related to non-deductible expenses, special tax rates and tax credits, interest paid

and penalties, and adjustments to prior year estimates.

The types of temporary differences and their

related tax effects that give rise to Deferred tax assets and deferred tax liabilities are presented below (in thousands):

Deferred tax liabilities:

Property and equipment

Investment in opportunity zone

Unrealized rents

Prepaid expenses

Gross deferred tax liabilities

Deferred tax assets:

Federal tax loss carryforwards

State tax loss carryforwards

Employee benefits and other

Gross deferred tax assets

Net deferred tax liability

Other Items - All Gross

State NOL Carryovers

Federal NOL Carryovers

The Company has no unrecognized tax benefits.

FRP tax returns in the U.S.

states that include the Company are subject to audit by taxing authorities.

As of December 31, 2021, the earliest tax year that remains

open for audit is 2016.

Our effective income tax expense may vary, possibly materially, due to projected effective state tax rates.

Employee Benefits .

The Company and certain subsidiaries have

a savings/profit sharing plan for the benefit of qualified employees.

The savings feature of the plan incorporates the provisions of Section

401(k) of the Internal Revenue Code under which an eligible employee may elect to save a portion (within limits) of their compensation

on a tax deferred basis.

The Company contributes to a participant’s account an amount equal to 50 % (with certain limits) of the

participant’s contribution.

Additionally, the Company may make an annual discretionary contribution to the plan as determined by

the Board of Directors, with certain limitations.

The plan provides for deferred vesting with benefits payable upon retirement or earlier

termination of employment.

The Company’s cost was $ 49,000 in 2021 and $ 43,000 in 2020.

The Company has a deferred compensation

plan, the Management Security Plan (MSP) for our President.

The accruals for future benefits are based upon actuarial assumptions.

insurance on his life has been purchased to partially fund this benefit and the Company is the owner and beneficiary of that policy.

expense for 2021 and 2020, was $ 8,000 and $ 2,000 , respectively.

The accrued benefit under this plan as of December 31, 2021 and December

31, 2020 was $ 1,302,000 and $ 1,252,000 , respectively.

Business Segments .

The Company is reporting its financial performance

based on four reportable segments, Asset Management, Mining Royalty Lands, Development and Stabilized Joint Venture, as described below.

The Asset Management segment owns, leases and manages

commercial properties.

The flex/office warehouses in the Asset Management Segment were sold and reclassified to discontinued operations

leaving only two commercial properties and one recent industrial acquisition,

Cranberry Run Business Park, which we purchased in 2019.

In July 2020 we sold our property located at 1801 62 nd Street in Hollander

Business Park, which had joined Asset Management April 1, 2019.

During the fourth quarter of 2021 we completed construction on two buildings

in our Hollander Business Park.

Our Mining Royalty Lands segment owns several properties

comprising approximately 15,000 acres currently under lease for mining rents or royalties (this does not include the 4,280 acres owned

in our Brooksville joint venture with Vulcan Materials).

Other than one location in Virginia, all of these properties are located

in Florida and Georgia.

Through our Development segment, we own

and are continuously assessing for their highest and best use for several parcels of land that are in various stages of development.

overall strategy in this segment is to convert all of our non-income producing lands into income production through (i) an orderly process

of constructing new buildings for us to own and operate or (ii) a sale to, or joint venture with, third parties.

Additionally, our Development

segment will form joint ventures on new developments of land not previously owned by the Company.

The Stabilized Joint Venture segment includes

joint ventures which own, lease and manage buildings that have met our initial lease up criteria.

Two of our joint ventures in the segment,

Riverfront Investment Partners I, LLC (“Dock 79”) and Riverfront Investment Partners II, LLC (“The Maren”) are

consolidated.

The Maren was consolidated effective March 31, 2021 and prior periods are still reflected under the equity method.

The ownership

of Dock 79 and The Maren (commencing March, 2021) attributable to our partner MidAtlantic Realty Partners, LLC (MRP) is reflected on our

consolidated balance sheet as a noncontrolling interest.

Such noncontrolling interests are reported on the Consolidated Balance Sheets

within equity but separately from shareholders' equity.

On the Consolidated Statements of Income, all of the revenues and expenses from

Dock 79 are reported in net income, including both the amounts attributable to the Company and the noncontrolling interest.

is reflected in Equity in loss of joint ventures on the Consolidated Statements of Income for the periods up to March 31, 2021 but is

reflected like Dock 79 for periods commencing April 1, 2021.

The amounts of consolidated net income attributable to the noncontrolling

interest is clearly identified on the accompanying Consolidated Statements of Income.

On May 21, 2018, the Company completed the

disposition of 40 industrial warehouse properties and three additional land parcels to an affiliate of Blackstone Real Estate Partners VIII,

for $ 347.2 million .

One warehouse property valued at $ 11.7 million was excluded from the sale due to the tenant exercising its right

of first refusal to purchase the property.

On June 28, 2019, the Company completed the sale of the excluded property to the same buyer

for $ 11.7 million .

This sale constituted a major strategic shift and as a result, these properties have been reclassified as discontinued

operations for all periods presented.

Operating results and certain other financial

data for the Company’s business segments are as follows (in thousands):

Years Ended December 31,

Asset management

Mining royalty lands

Lake Louisa, FL

Prince William, VA

Investment Property

Asset Management Properties

Baltimore Co, MD

Development Properties

Baltimore City, MD

Washington D.C.

Residential Rental Properties

Washington D.C.

aggregate cost for Federal income tax purposes is $87,596 .

FRP HOLDINGS, INC.

SCHEDULE III (CONSOLIDATED) -

REAL ESTATE AND

ACCUMULATED DEPRECIATION AND DEPLETION

(In thousands)

Stabilized Joint Venture

Operating profit:

Before corporate expenses:

Operating profit before corporate expenses

Asset management

Operating profit before corporate expenses

Mining royalty lands

Operating profit before corporate expenses

Stabilized Joint Venture

Operating profit before corporate expenses

Corporate expenses:

Corporate expenses

Allocated to asset management

Corporate expenses

Allocated to mining royalty lands

Corporate expenses

Allocated to Development

Corporate expenses

Allocated to Stabilized Joint Venture

Corporate expenses

Operating profit

Interest expense

Depreciation, depletion and amortization:

Depreciation, depletion and amortization

Asset management

Depreciation, depletion and amortization

Mining royalty lands

Depreciation, depletion and amortization

Stabilized Joint Venture

Depreciation, depletion and amortization

Capital expenditures:

Capital expenditures

Asset management

Capital expenditures

Mining royalty lands

Capital expenditures

Stabilized Joint Venture

Capital expenditures

Identifiable net assets

Identifiable net assets at end of period:

Asset management

Mining royalty lands

Stabilized Joint Venture

Investments available for sale

Investments available for sale at fair value

Unallocated corporate assets

Fair Value Measurements .

Fair value is defined as the price that

would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement

The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels.

1 means the use of quoted prices in active markets for identical assets or liabilities.

Level 2 means the use of values that are derived

principally from or corroborated by observable market data.

Level 3 means the use of inputs are those that are unobservable and significant

to the overall fair value measurement.

At December 31, 2021, the Company was invested in

two corporate bonds valued at $ 4,266,000 with maturities in January 2022 and U.S.

Treasury notes valued at $ 24,926,000 maturing in late

The unrealized loss on these investments of $ 42,000 was recorded as part of comprehensive income and was based on the estimated

market value by National Financial Services, LLC (“NFS”) obtained from sources that may include pricing vendors, broker/dealers

who clear through NFS and/or other sources (Level 2).

The Company recorded no realized gains or losses on bonds that matured or were sold in 2021.

The amortized cost of the investments in

corporate bonds approximates fair value as of December 31, 2021.

At December 31, 2021 and 2020, the carrying

amount reported in the consolidated balance sheets for cash and cash

equivalents including U.S.

Treasury notes was adjusted to fair value

as described above.

The fair values of the Company’s other

mortgage notes payable were estimated based on current rates available to the Company for debt of the same remaining maturities.

31, 2021, the carrying amount and fair value of such other long-term debt was $ 180,070,000 and $ 174,111,000 , respectively.

31, 2020, the carrying amount and fair value of such other long-term debt was $ 90,000,000 and $ 96,187,000 , respectively.

Contingent Liabilities .

The Company may be involved in litigation

on a number of matters and is subject to certain claims which arise in the normal course of business.

The Company has retained certain

self-insurance risks with respect to losses for third party liability and property damage.

In the opinion of management, none of these

matters are expected to have a material adverse effect on the Company’s consolidated financial condition, results of operations

or cash flows.

The Company is subject to numerous environmental

laws and regulations.

The Company believes that the ultimate disposition of currently known environmental matters will not have a material

effect on its financial position, liquidity, or operations.

The Company can give no assurance that previous environmental studies with

respect to its properties have revealed all potential environmental contaminants;

that any previous owner, occupant or tenant did not

create any material environmental condition not known to the Company;

that the current environmental condition of the properties will

not be affected by tenants and occupants, by the condition of nearby properties, or by unrelated third parties;

and that changes in applicable

environmental laws and regulations or their interpretation will not result in additional environmental liability to the Company.

As of December 31, 2021, there was $ 506,000

outstanding under letters of credit.

The letters of credit were issued to guarantee certain obligations to state agencies related to real

estate development.

The Company and MRP guaranteed $ 26 million of the

construction loan on the Bryant Street Partnerships in exchange for a 1 % lower interest rate.

The Company and MRP have a side agreement

limiting the Company’s guarantee to its proportionate ownership.

The value of the guarantee was calculated at $ 1.9 million based

on the present value of the 1 % interest savings over the anticipated 48 -month term.

This amount is included as part of the Company’s

investment basis and is amortized to expense over the 48 months.

The Company will evaluate the guarantee liability based upon the success

of the project and assuming no payments are made under the guarantee the Company will have a gain for $ 1.9 million when the loan is paid

Borrower may prepay a portion of the unpaid principal to satisfy such tests.

Commitments .

The Company, at December 31, 2021, had entered

into various contracts to develop and maintain real estate with remaining commitments totaling $ 6,074,000 .

Concentrations .

The mining royalty lands segment has a total of five

tenants currently leasing mining locations and one lessee that accounted for 23 % of the Company’s consolidated revenues during 2021

and $ 278,000 of accounts receivable at December 31, 2021.

The termination of these lessees’ underlying leases could have a material

adverse effect on the Company.

The Company places its cash and cash equivalents with Wells Fargo Bank and First Horizon Bank.

times, such amounts may exceed FDIC limits.

Unusual or Infrequent Items Impacting Quarterly Results .

On March 31, 2021, the Company consolidated the assets

(at fair value), liabilities and operating results of The Maren real estate partnership.

The consolidation resulted in a gain on remeasurement

of investment in real estate partnership of

$ 51,139,000 of which $ 13,965,000 was attributed to noncontrolling interest.

Provision for income taxes in the fourth quarter of

2020 was favorably impacted by $ 1,100,000 due to a carryback of our 2020 tax net operating loss to fiscal 2016 when the federal tax rate

Intangible Assets .

The Company has allocated the purchase price of property

acquisitions based upon the fair value of the assets acquired, consisting of land, buildings and intangible assets, including in-place

leases and below market leases.

These deferred leasing intangible assets are recorded within Deferred Costs and Deferred lease intangible,

net in the consolidated balance sheets.

The value of the in-place lease intangibles will be amortized to amortization expense over the

remaining lease terms.

The fair value assigned pertaining to the above market in-place leases values are amortized as a reduction to rental

revenue, and the below market in-place lease values are amortized as an increase to rental revenue over the remaining non-cancelable terms

of the respective leases.

The Company reviews intangible assets for

impairment, whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable.

Recoverability

of long-lived assets is measured by a comparison of the carrying amount of the asset group to the future undiscounted net cash flows expected

to be generated by those assets.

If such assets are considered to be impaired, the impairment charge recognized is the amount by which

the carrying amounts of the assets exceeds the fair value of the assets.

The Company had the following Acquired Lease

Intangibles (in thousands):

Years Ended December 31,

Gross Carrying Cost of Real Estate:

Balance at beginning of period

Additions during period:

Amounts capitalized

Deductions during period:

Cost of real estate sold

Balance at close of period

Accumulated Depreciation & Depletion:

Balance at beginning of period

Additions during period:

Charged to cost & expense

Deductions during period:

Real estate sold

Balance at close of period

In-place leases

Accumulated amortization

Acquired intangible assets, net

Amortization expense for in-place leases

was $ 3,946,000 and $ 46,000 for 2021 and 2020, respectively, and is included in the Depreciation, depletion and amortization line in the

Consolidated Statements of Operations.

The Estimated Aggregate Amortization from

acquired lease intangibles for the next five years are as follows (in thousands):

lease intangibles

Discontinued Operations .

On May 21, 2018, the Company completed the disposition

of 40 industrial warehouse properties and three additional land parcels to an affiliate of Blackstone Real Estate Partners VIII, L.P.

for $ 347.2 million .

One warehouse property valued at $ 11.7 million was excluded from the sale due to the tenant exercising its right of

first refusal to purchase the property.

On June 28, 2019, the Company completed the sale of the excluded property to the same buyer for

$ 11.7 million .

properties comprised substantially all the assets of our Asset Management segment and have been reclassified as discontinued

operations for all periods presented.

The Results of operations associated with discontinued operations for the year ended December 31,

2019 was as follows (in thousands):

Year Ended December 31,

Lease Revenues

Cost of operations:

Depreciation, depletion and amortization

Operating expenses

Property taxes

Management company indirect

Corporate expenses

Total cost of operations

Total operating profit

Interest expense

Gain on sale of buildings

Income before income taxes

Provision for (benefit from) income taxes

Income from discontinued operations

Report of Management

Management's Responsibility for the Financial

Management of the Company is responsible

for the preparation and integrity of the consolidated financial statements appearing in our Annual Report on Form 10-K.

The financial

statements were prepared in conformity with accounting principles generally accepted in the United States appropriate in the circumstances

and, accordingly, include certain amounts based on our best judgments and estimates.

Financial information in this Annual Report on Form

10-K is consistent with that in the financial statements.

Management of the Company is responsible

for establishing and maintaining a system of internal controls and procedures to provide reasonable assurance regarding the reliability

of financial reporting and the preparation of the consolidated financial statements.

Our internal control system is supported by a program

of internal audits and appropriate reviews by management, written policies and guidelines, careful selection and training of qualified

personnel, and a written Code of Business Conduct adopted by our Company's Board of Directors, applicable to all officers and employees

of our Company and subsidiaries.

Because of its inherent limitations, internal

control over financial reporting may not prevent or detect misstatements and, even when determined to be effective, can only provide reasonable

assurance with respect to financial statement preparation and presentation.

Also, projections of any evaluation of effectiveness to future

periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance

with the policies or procedures may deteriorate.

Management's Report on Internal Control

Over Financial Reporting

Management of the Company is responsible

for establishing and maintaining adequate internal control over financial reporting as such term is defined in Rule 13a-15(f) under the

Securities Exchange Act of 1934 ("Exchange Act").

Management assessed the effectiveness of the Company's internal control over

financial reporting as of December 31, 2021.

In making this assessment, management used the criteria set forth by the Committee of Sponsoring

Organizations of the Treadway Commission (2013 Framework) ("COSO") in Internal Control—Integrated Framework.

this assessment, management believes that the Company maintained effective internal control over financial reporting as of December 31,

The Company's independent auditors, Hancock

Askew& Co., LLP, a registered public accounting firm, are appointed by the Audit Committee of the Company's Board of Directors, subject

to ratification by our Company's shareholders.

Hancock Askew & Co., LLP has audited and reported on the consolidated financial statements

of FRP Holdings, Inc.

The report of the independent auditors is contained in this annual report.

Audit Committee's Responsibility

The Audit Committee of our Company's Board

of Directors, composed solely of Directors who are independent in accordance with the requirements of the Nasdaq Stock Market listing

standards, the Exchange Act, and the Company's Corporate Governance Guidelines, meets with the independent auditors, management and internal

auditors periodically to discuss internal controls and auditing and financial reporting matters.

The Audit Committee reviews with the

independent auditors the scope and results of the audit effort.

The Audit Committee also meets periodically with the independent auditors

and the chief internal auditor without management present to ensure that the independent auditors and the chief internal auditor have

free access to the Audit Committee.

Our Audit Committee's Report can be found in the Company's 2021 Proxy Statement.

Report of Independent Registered Public

Accounting Firm

The Shareholders and Board of Directors FRP

Holdings, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance

sheets of FRP Holdings, Inc.

(the “Company”) as of December 31, 2021 and 2020, the related consolidated statements of income,

comprehensive income, shareholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2021,

and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated

financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020,

and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2021, in conformity

with accounting principles generally accepted in the United States of America.

Basis for Opinion

These consolidated financial statements are the

responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated financial

statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United

States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities

laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards

of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated

financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we

engaged to perform, an audit of its internal control over financial reporting.

As part of our audits, we are required to obtain an understanding

of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s

internal control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures to assess

the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures

that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the

consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by

management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audits provide

a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is

a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated

to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involve

especially challenging, subjective, or complex judgments.

The communication of a critical audit matter does not alter in any way our opinion

on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate

opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Real Estate Investment Accounting Assessment

Description of Matter

At December 31, 2021 the Company’s investments in real estate were

$506 million including unconsolidated real estate ventures of $145 million.

As explained in Note 1 to the consolidated financial statements,

the Company enters into real estate investments and performs an assessment as to which method of accounting is appropriate, whether the

proper accounting is to

whether to use the cost or equity method to account for an investment or whether to consolidate such investment.

Note 2 to the consolidated financial

statements provides a detail of unconsolidated real estate investments.

Application and auditing of the accounting

treatment of the Company’s real estate investments, including the process of evaluating the use of the cost or equity method of

accounting or the evaluation of criteria for consolidation based on the variable interest entity (VIE) model or a voting interest entity

(VOE) model, is complex and requires significant judgment.

This evaluation and analysis include the determination of which party, if any,

has power to direct the activities most significant to the economic performance of each real estate venture and whether the venture has

sufficient equity to finance its activities without additional subordinated support.

Factors considered by management in determining whether

the Company has the power to direct the activities include voting rights, involvement in day-to-day capital allocation and operating decisions

and the extent of the Company’s involvement in the entity.

How We Addressed the Matter in Our Audit

We obtained an understanding, evaluated

the design, and tested the operating effectiveness of relevant controls over the Company’s qualitative analysis that determines whether

the Company has control over the venture, through influence, voting interest or through the presence of a variable interest in a real

estate venture that would require consolidation.

For all investments in real estate ventures,

our procedures include reading the operating agreements and other relevant documents and evaluating the structure and terms of the agreements

and reviewing management’s evaluation of control over the entity and the applicability of the variable interest model as compared

to the voting interest model.

We evaluate management’s determination of whether the investee has sufficient equity to finance its

activities without additional subordinated financial support and whether the equity holders lack the characteristics of a controlling

financial interest.

We consider management’s determination on whether the Company is the primary beneficiary or has a controlling

financial interest that should be considered.

We take into consideration evidence obtained in other areas

of the audit, such as review of board minutes and status of the projects development to determine if any reconsideration of the findings

is necessary.

Hancock Askew & Co., LLP

We have served as the Company’s auditor since

Jacksonville, Florida

March 30, 2022

DIRECTORS AND OFFICERS

Chief Executive Officer of the Company

Commander III (2)(3)

Retired Partner

Foley & Lardner

Shad III (2)(4)

Retired Owner, Bozard Ford Company

Executive Chairman of Regency Centers Corporation

Walton (2)(3)(4)

Co-Founder and Managing Member of Rockpoint

Margaret Wetherbee

_______________

(1) Member of the Executive Committee

(2) Member of the Audit Committee

(3) Member of the Compensation Committee

(4) Member of the Nominating Committee

Chief Executive Officer

deVilliers, Jr.

President & Chief Operating Officer

deVilliers III

Executive Vice President

Chief Financial Officer & Treasurer

Executive Vice President, Secretary &

General Counsel

Controller and Chief Accounting Officer

FRP Holdings, Inc.

200 West Forsyth Street, 7th Floor

Jacksonville, Florida, 32202

(904) 396-5733

Annual Meeting

Shareholders are cordially invited to attend

the 2022 annual meeting of shareholders on Wednesday, May 11, 2022 at 11:00 a.m., Eastern Daylight Time, at The River Club, Ortega Room,

on the 34th floor of the Wells Fargo Building located at One Independent Drive, Jacksonville, Florida 32202.

Transfer Agent

American Stock Transfer & Trust Company

59 Maiden Lane

New York, NY 10038

1-800-937-5449

General Counsel

Nelson Mullins Riley & Scarborough LLP

Jacksonville, Florida

Independent Registered Public Accounting

Hancock Askew & Co., LLP

Jacksonville, Florida

Common Stock Listed

The Nasdaq Stock Market

Shareholders may receive, without charge,

a copy of FRP Holdings, Inc.’s annual report on Form 10-K for the year ended December 31, 2021 as filed with the Securities and

Exchange Commission by writing to the Treasurer at 200 West Forsyth Street, 7th Floor, Jacksonville, Florida 32202.

The most recent certifications

by our Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer pursuant to Section 302 of the Sarbanes-Oxley Act

of 2002 are filed as exhibits to our Form 10-K.

Company Website

The Company’s website may be accessed

at www.frpdev.com .

All of our filings with the Securities and Exchange Commission can be accessed through our website promptly

after filing.

This includes annual reports on Form 10-K, proxy statements, quarterly reports on Form 10-Q, current reports filed or furnished

on Form 8-K and all related amendments.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures