Item 2. Properties
Item 2. PROPERTIES.
The Company owns (predominately in fee simple but
also through ownership of interests in joint ventures) approximately 21,000 acres of land in Florida, Georgia, Maryland, Virginia, South
Carolina, and the District of Columbia. This land is held by the Company in four distinct segments: (i) Industrial and Commercial 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) Multifamily Segment (ownership, leasing and management
of buildings through joint ventures).
Industrial and Commercial Segment. As of December
31, 2023, the Industrial and Commercial Segment includes nine buildings at four commercial properties owned by the Company in fee simple
as follows:
1) 34 Loveton Circle in suburban Baltimore County,
MD consists of one office building totaling 33,708 square feet which is 90.8% 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.
2) 155 E. 21 st Street in Duval County,
FL 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 Harford County,
MD consists of five industrial buildings totaling 267,737 square feet which are 92.1% leased and occupied. The property is subject to
commercial leases with various tenants.
4) Hollander 95 Business Park in Baltimore City, MD
consists of three industrial buildings totaling 247,340 square feet that are 100.0% leased and 100.0% occupied
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Mining Royalty Lands Segment.
Introduction.
Pursuant to amendments to Regulation S-K of the Securities
Act of 1933 (“Regulation S-K”) adopted by the Securities and Exchange Commission in 2018, effective for fiscal years beginning
on or after January 1, 2021, registrants with material mining operations must disclose certain information in their Securities and Exchange
Act filings concerning mineral resources and mineral reserves, in accordance with to Subpart 1300 of Regulation S-K. This section of Item
2 provides summary information about our overall portfolio of mining royalty properties.
Our mining leases do not require tenants to furnish
technical report summaries that meet the requirements of Rule 1302, and the Company does not otherwise have access to the technical data
required to determine precise amounts of each class of mineral resource or probable or proven resources. In accordance with Rule 1303(a)(3),
the Company is providing all required information in its possession or which it can obtain without incurring an unreasonable burden or
expense.
The Company periodically engages consultants to examine
remaining sand and stone deposit estimates and geological studies conducted by tenants and their industry professionals.
Locations. The following map presents
the locations of the Company’s mining properties, which are discussed by segment (as reported in the Company’s financial statements)
below:
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Mining Properties . The Company owns
a fee simple interest in 14 open pit aggregates quarries located in Florida, Georgia and Virginia, which comprise approximately 16,650
total acres. The Company’s quarries are subject to mining leases with 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; totaling 13,876 acres)
are currently being mined, and five of the Company’s quarries (located in Marion County, FL, Lake Louisa, FL, Astatula, FL and Lake
Sand, FL and Forest Park, GA; totaling 2,778 acres) are leased but are not currently being mined. Our typical 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 sand and stone
deposits 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, 2023, 2022 and 2021, aggregate tons sold with respect to the Company’s mining properties
were approximately 9,569,000, 9,525,000 and 7,575,000, 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. Cemex
expects to begin mining in late 2024 after completing the work necessary to prepare this site to become an active sand mine.
Brooksville Joint Venture. Additionally,
through a joint venture with Vulcan Materials, the Company owns a 50% interest in 4,280 acres of mixed-use property in Brooksville, Florida,
a portion of which comprises a ground calcium mine that is mined by Vulcan Materials. The Company entered into the joint venture in 2006
for the purpose of jointly owning and developing the land 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 2012. Vulcan
Materials still mines on the property and the Company receives 100% of the royalty on all tons sold at the Brooksville property. In the
fiscal years ended December 31, 2023, 2022, and 2021, aggregate tons sold were approximately 259,000, 244,000 and 280,000, respectively.
Other Properties. The Company also owns
an additional 36 acres of investment property in Brooksville, Florida.
Development Segment – Industrial and Commercial
Land.
At December 31, 2023, this segment owned the following
future development parcels:
1) 54 acres of land that will be capable of supporting over 690,000 square feet of industrial product located
at 1001 Old Philadelphia Road in Aberdeen, MD.
2) 17 acres of land in Harford County, MD with a 259,200 square foot speculative warehouse project on Chelsea
Road under construction due to be complete in the third quarter of 2024.
3) 170 acres of land in Cecil County, MD that can accommodate 900,000 square feet of industrial development.
Development Segment – Land Held for Development
or Sale.
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At December 31, 2023, this segment was invested in
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 Multifamily
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 Multifamily Segment effective March 31, 2021. The final two phases, Phase 3 and Phase
4 remain under a first-stage PUD approval expiring March 30, 2025, permitting 571,671 square feet of development.
2) Hampstead Trade Center: The Hampstead Trade Center property in Carroll County, MD 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. We 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
Master Plan. 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 91,607 square feet of first floor and stand-alone retail on approximately five acres of the roughly 12-acre site. Construction
is complete and leasing efforts are nearing completion.
4) The Verge: 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 eleven-story structure has
344 apartments and 8,536 square feet of ground floor retail. Construction is complete and leasing is nearing completion.
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 Woodfield Development for
the acquisition and development of a mixed-use project known as “.408 Jackson” in Greenville, SC. Woodfield specializes in
Class-A multifamily, mixed-use developments primarily in the Carolinas and DC. The project is located across the street from Greenville’s
minor league baseball stadium and holds 227 multifamily units and 4,539 square feet of retail space. 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. The temporary certificate of occupancy was received in December 2022. Leasing began in the fourth quarter of 2022 with residential
units 95.2% leased and 93.4% occupied at quarter end. Retail at this location is 100% leased. The Company owns 40% of the development.
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7) 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, MD, 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.
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, 2023 Phase I was 73.4% leased
and 62.8% occupied, the subsequent phases will follow as each phase is stabilized.
8) Estero: In August 2022, the Company invested $3.6 million for a minority interest in a joint venture with
Woodfield Development to purchase and develop 46 acres in Estero, FL into a mixed-use project with 554 multifamily units, 72,000 square
feet of commercial space, 41,000 square feet of office space and a boutique 170-key hotel. While the joint venture attempts to rezone
the property, the Company will receive a preferred return of 8% with an option to roll its investment into equity in the vertical development
or exit at that point.
9) Buzzard Point: In November 2022, the Company entered into a contribution
agreement with MRP and Steuart Investment Company (SIC) regarding potential development of an estimated 1,200 multifamily units in four
phases on land owned by SIC. The Company entered into a separate agreement with MRP to perform pre-development obligations for the contribution
agreement. The company owns 50% of the partnership with MRP .
10) Woven: In August 2023, the Company entered into an agreement with Woodfield
Development for the acquisition and development of a mixed-use project known as “Woven” in Greenville, SC, to consist
of an estimated 214 multifamily units and 10,000 square feet of retail space. The joint venture is in the pre-development and pre-closing
phase in pursuit of vertical construction closing conditions. The Company owns 50% at this time with final ownership to be determined
based upon contributions by the partners, land contributors, and other investors.
Multifamily Segment.
At December 31, 2023, this segment was invested in
the following stabilized multifamily joint ventures:
1) Dock 79: Dock 79 (Phase I of the Riverfront on the Anacostia development) is a 305-unit residential apartment
building with approximately 14,430 square feet of first floor retail space. The property is situated on approximately 2.1 acres of land
located on Potomac Avenue in Washington, DC, across the street from the Nationals Park.
2) The Maren: The Maren (Phase II of the Riverfront on the Anacostia development) is a 264-unit residential
apartment building with 6,811 square feet of retail space located on Potomac Avenue in Washington, DC, across the street from the Nationals
Park
3) Riverside: Riverside Joint Venture in Greenville, SC is a joint venture with Woodfield Development which
includes a 200-unit residential apartment building. The Company owns 40% of the venture.
Item 3. LEGAL PROCEEDINGS.
None.
Item 4. MINE SAFETY DISCLOSURES.
None.
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PART II