What changed in this filing

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Item 1A. Risk Factors

2026-04-15 compared with 2025-03-18 · 55 added, 18 removed, 128 unchanged (36% of the section changed)

4 unchanged sentences

Risks Relating to our Business

A decline in the economic conditions in Baltimore and Washington, D.C.

markets could adversely affect our business.

The majority of our stabilized properties are located in the Baltimore area and Washington, D.C.

Current economic and market conditions, including, but not limited to, elevated interest rates, new and expanded tariffs, a decline in consumer confidence and spending, inflationary conditions that have increased the costs of operating our businesses (including raw materials, products, labor, and freight), widespread supply chain disruptions, has and could continue to adversely impact gross margins, operating margins, and the results of the Company ’ s operating businesses.

Current economic and market conditions are highly uncertain and volatile as a result of various factors, including elevated interest rates, new and expanded tariffs, a decline in consumer confidence and spending, inflationary conditions, the threat of government shut downs, and supply chain disruptions, which have been exacerbated by the Russian invasion of Ukraine, the fighting in the Middle East, as well as piracy in shipping lanes.

We believe these factors have created economic uncertainty which may negatively affect our operating results by, among other things:

(i) increasing the cost of raw materials and finished goods such as steel and lumber for our development projects, increasing interest expense on variable rate debt and any new debt, (ii) decreasing gross margins and investment returns due to increased costs of construction and maintenance, (iii) reducing the availability of debt and equity capital for new real estate investments and the number of real estate development projects meeting the Company’s investment criteria and (iv) increasing overall operating expenses due to increases in labor and service costs.

These factors also may impact our industrial tenants by increasing their borrowing costs, reducing consumer demand for certain imported products and increasing labor and service costs.

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The Company has experienced significant increases in commodity and labor prices and insurance costs, and such increases may be further impacted by the implementation of additional tariffs on building materials sourced from international markets.

In addition, higher interest rates have increased the cost of the Company’s outstanding indebtedness and the costs of financing for new development projects.

Higher rates have also had an adverse impact on the availability of financing, and the anticipated profitability of development projects, as capitalization rates related to multifamily apartment communities are generally impacted by interest rates.

These factors may have an adverse impact on the Company’s operating results in future periods, particularly if higher development and construction costs continue and debt and equity financing is not available for new projects or is only available on less attractive terms.

Contracted labor is one of the primary components of our expenses.

Several factors may adversely affect the labor force available to our contractors or increase their labor costs, including labor shortages, increased competition for qualified employees, and laws and regulations related to minimum wages, including the potential implementation of increases in the statutory minimum salary requirements for employees who are not required to be paid overtime compensation.

A sustained labor shortage or increased turnover rates, whether caused by wage inflation or general economic conditions, natural disasters or other factors, could lead to increased costs for future development projects, which could in turn negatively affect our operations or adversely impact our business and results.

In addition, electricity prices have been increasing and are expected to continue to increase due to the rapid expansion of data centers for artificial intelligence.

Investments by the Company in real estate developments directly or through joint ventures expose it to market and economic risks inherent in the real estate construction and development industry.

The real estate construction and development industry is highly competitive and subject to numerous risks which may be beyond management’s control.

The success of the Company’s investments in real estate developments is dependent on many factors, including:

• Changes in capitalization rates impacting real estate values;

• Availability and reasonable pricing of labor;

• Availability and reasonable pricing of construction materials, such as steel, lumber, framing, concrete and other building materials, including increases associated with tariffs and supply chain disruptions;

• Changes in laws and regulations for new construction and land entitlements, including environmental and zoning laws and regulations;

• Natural disasters and severe weather conditions increasing costs, delaying construction, causing uninsured losses or reducing demand;

• Availability and cost of insurance;

• Availability of land in desirable locations at prices that result in an economically viable project;

• Delays and costs associated with obtaining permits, approvals or licenses necessary to develop property;

• Availability of property for development at attractive prices;

• Availability and cost of financing;

• Risk of losses resulting from cost overrun guarantees in joint venture projects sponsored by the Company or the failure of such properties to achieve profitability or a profitable exit;

• Real estate market values and general economic conditions.

Any of these factors could give rise to delays in the start or completion of a project, increase the cost of developing a project, or result in reduced prices and values and significant losses.

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A decline in the economic conditions in our core markets could adversely affect our business.

The majority of our stabilized properties are located in the Baltimore area, Washington, D.C., and Greenville, South Carolina.

We are, therefore, subject to increased exposure to (positive or negative) economic factors and other competitive factors specific to markets in confined geographic areas.

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

The Trump administration has created an initiative known as the Department of Governmental Efficiency focused on reducing government expenditures.

The initiative is expected to lead to a reduction of a significant number of government jobs in the Washington, D.C.

however, the potential impact of this initiative on the demand for our residential properties in the region cannot be determined at this time.

We conduct a significant portion of our operations through joint ventures, which may lead to disagreements with our joint venture partners and adversely affect our interests in the joint ventures.

We conduct a significant portion of our operations through joint ventures, which may lead to disagreements with our joint venture partners and adversely affect our interests in the joint ventures, may expose us to liability under completion guarantees and impose development management responsibilities on us in certain joint ventures in which we are a minority partner.

We currently are a party to several joint ventures and we may enter into additional joint ventures in the future.

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

may not be able to resolve such disagreement in our favor and such a disagreement could have a material adverse effect on our interest in the joint venture or on the business of the joint venture generally.

In the event that we have a disagreement with a joint venture partner as to the resolution of a particular issue to come before the joint venture, or as to the conduct or management of the joint venture generally, we may not be able to resolve such disagreement in our favor and such a disagreement could have a material adverse effect on our interest in the joint venture or on the business of the joint venture generally.

Moreover, in certain cases the Company is exposed to potential liability under repayment, construction completion and cost overrun guarantees made by the Company.

Also, with our recent acquisition of Altman Logistics, we have assumed development management responsibilities for management projects in which we have a minority interest, which may create additional risks if we fail to perform to the satisfaction of our joint venture partners.

Our business may be adversely affected by seasonal factors and harsh weather conditions.

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While we and our third-party service providers commit resources to the design, implementation, and monitoring of our information systems, there is no guarantee that our security measures will provide absolute security.

Despite these security measures, we may not be able to anticipate, detect, or prevent cyberattacks, particularly because the methodologies used by attackers change frequently or may not be recognized until launched, and because attackers are increasingly using techniques designed to circumvent controls and avoid detection.

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

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because the methodologies used by attackers change frequently or may not be recognized until launched, and because attackers are increasingly using techniques designed to circumvent controls and avoid detection.

We and our third-party service providers may therefore be vulnerable to security events that are beyond our control, and we may be the target of cyber-attacks, as well as physical attacks, which could result in information security breaches and significant disruption to our business.

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The geographic concentration of our properties makes our business more vulnerable to severe weather conditions, natural disasters and climate change.

Climate change presents an array of risks to real estate companies due to sea level rise, flooding, extreme weather, stronger storms and human migration.

Climate change presents an array of risks to real estate companies due to sea level rise, flooding, extreme weather, changing weather patterns and ocean currents, stronger storms, human migration, and supply chain disruptions.

A significant number of our properties are located in areas that are susceptible to hurricanes, tropical storms, flooding, sea level rise and other natural disasters.

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[Additionally, the cost of insurance associated with our properties has increased, and future weather conditions may cause premiums to increase in the future.]

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Uninsured losses could significantly reduce our earnings.

We self-insure for claims exposure outside of our coverage resulting from property damage, workers’ compensation, auto liability, general liability and employees’ health insurance.

We self-insure for claims exposure outside of our coverage from property damage, workers’ compensation, auto liability, general liability and employees’ health insurance.

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

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

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Real estate investments are not as liquid as other types of assets.

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We use debt to finance our operations, including acquisitions of properties.

As of December 31, 2024, we had outstanding non-recourse mortgage indebtedness of $180,070,000, secured by developed real estate properties having a carrying value of $239,436,000.

As of December 31, 2025, we had outstanding consolidated indebtedness $193,958,000, secured by developed real estate properties having a carrying value of $276,460,000.

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

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

Construction costs may be higher than anticipated .

Our long-term business plan includes a number of construction projects.

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

The imposition of tariffs on foreign building materials such as lumber, building material commodity shortages, supply chain disruptions, construction delays or stoppages or rapidly escalating construction costs may out-pace market rents, which would adversely affect our profits.

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

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Unexpected events, such as public health issues, natural disasters, geopolitical conflicts, civil unrest, severe weather and terrorist activities, may disrupt the Company ’ s operations and increase our costs.

The occurrence of one or more unexpected events, including public health issues, tsunamis, hurricanes, earthquakes, floods and other forms of severe weather or civil unrest, geopolitical conflicts (including the conflict between Ukraine and Russia as well as the conflict in the Middle East) and/or terrorist activities in countries or regions in which our customers, assets, suppliers or our operating businesses are located could adversely affect our operations and financial performance.

Risks Relating to our Common Stock

12 unchanged sentences

These provisions apply even if a takeover offer may be considered beneficial by some shareholders.

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FRP may issue preferred stock with terms that could dilute the voting power or reduce the value of our common stock.

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Many of these issues lie at the heart of what the Company considers to be best practices, but a failure to adequately demonstrate our commitment to them might dissuade institutional investors from holding our stock, which would result in downward pressure on our stock price.

The Company ’ s Bylaws contain an exclusive forum provision, which could impair the ability of shareholders to obtain a favorable judicial forum for certain disputes with the Company or its directors, officers or other employees and be cost-prohibitive to shareholders.

The Company’s Bylaws contain an exclusive forum provision which provides that, unless its Board of Directors consents to the selection of an alternative forum, the Circuit Court located in Duval County, Florida or the federal district court for the Middle District of Florida will be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the corporation, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director or officer or other employee of the corporation to the corporation or the corporation’s shareholders, (iii) any action asserting a claim against the corporation or any director or officer or other employee of the corporation arising pursuant to any provision of the Florida Business Corporation Act or the corporation’s articles of incorporation or bylaws (as either may be amended from time to time), or (iv) any action asserting a claim against the corporation or any director or officer or other employee of the corporation governed by the internal affairs doctrine.

Notwithstanding the foregoing, shareholders cannot waive compliance with the federal securities laws and the rules and regulations thereunder.

The exclusive forum provision may limit a shareholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with the Company or its directors, officers or other employees or be cost-prohibitive to shareholders, which may discourage such lawsuits against the Company or its directors, officers and other employees.

However, there is uncertainty regarding whether a court would enforce the exclusive forum provision.

If a court were to find the exclusive forum provision to be inapplicable or unenforceable in an action, the Company may incur additional costs associated with resolving such action in other jurisdictions, which could adversely affect the Company’s financial condition and operating results.

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 1A. Risk Factors