FRP Holdings Inc (FRPH) 2020 Q4 法說會逐字稿

Excuse me, everyone. We now have all of our speakers in conference. (Operator Instructions)

I would now like to turn the conference over to John Baker II. Mr. Baker, you may begin.

Good morning. My name is John Baker, and I'm Executive Chairman and CEO of FRP Holdings, Inc. With me today on the line are David deVilliers, Jr., our President; John Baker III, our CFO; David deVilliers III, our Executive Vice President; John Klopfenstein, our Chief Accounting Officer; and John Milton, our Secretary.

Before we begin discussion of the quarter's results, let me remind you that any statements on this call, which relate to the future or by their nature is subject to risks and uncertainties that could cause actual results and events to differ materially from those indicated in such forward-looking statements. These risks and uncertainties are listed from time to time in our SEC filings, including, but not limited to, our annual and quarterly reports. We have no obligation to revise or update any forward-looking statements, except as imposed by law as a result of future events or new information.

Now let me turn to the results. Net income for the fourth quarter of 2020 and was $393,000 or $0.04 per share, bringing our net income for the year to $11.615 million or $1.21 per share versus $16.177 million or $1.63 per share.

The lower results for 2020 were driven by lower investment income as interest rates fell dramatically during the year and by greater losses on our joint ventures, especially the Maren and Bryant Street, which had high interest and depreciation expense and operating losses as we built our rent rolls from 0 at both locations. These losses were partially offset by gains on property sales, including: our 3 remaining lots in the Lakeside Business Park; our depleted mining site at Gulf Hammock, Florida; our right-of-way through our Fort Myers property; and our newly completed and fully occupied warehouse in our Hollander Business Park in Baltimore.

During the year, we made good progress on our new developments at Bryant Street and Half Street in Washington; our 2 mixed-use projects in Greenville, South Carolina; and at the Maren where we completed the construction of the second phase of our Anacostia property, and expect to achieve 90% occupancy this month.

Additionally, our mining royalties business had record results, and we negotiated new 12-year interest-only loans on Dock 79 and the Maren at a fixed rate of 3.03%, with total principal on the 2 loans of $180 million. The loan on the Dock 79 replaces a 4.15% loan. And on that property alone, we will save over $1 million a year in interest.

Finally, during the year, we repurchased 510,145 shares of our stock at an average cost of $41.78, while still leaving ourselves with $150 million of cash and equivalents at year-end.

Let me turn over the call to our President, David deVilliers, who will walk you through our various projects. David?

Thank you, John, and good day to those on the call this morning. Let me now add a bit of detail to the highlights John provided in his opening remarks.

As to our Asset Management segment, with the disposition of our final 2 heritage properties in 2019, we completed the liquidation of a little over 4 million square feet of assets that made up this business segment, leaving just the company's 33,000 square foot multi-tenanted home office building in Sparks, Maryland, and the now vacant lot in Jacksonville, Florida, that at one time, housed Florida Rock Industries' home office that remains under lease to Vulcan Materials.

Earlier this year, we transferred from the Development segment, 1801 62nd Street, our completed 94,350 square foot Speculative Warehouse building in Baltimore City. The building became 100% leased and occupied in the first quarter of 2020, and we subsequently completed the sale of the asset in July of 2020, realizing a gain of some $3.8 million.

In early 2019, we added an asset to this business segment through the purchase of the Cranberry Run Business Park in Aberdeen, Maryland, a 268,000 square foot multi-building warehouse park that was in dire need of rehabilitation. We spent the remaining months of 2019 and part of 2020, completing an extensive renovation of the park and associated buildings. During 2020, we received significant leasing success, bringing the park from 26.1% at the beginning of the year to 87.6% occupancy at year's end.

Total revenues for the Asset Management segment for the quarter were up 44% to $658,000 over the same period last year with an operating profit of $36,000 versus a loss of $213,000 in the same quarter last year. Increased revenues and profit this quarter were mainly attributable to approved leasing at Cranberry Run. In the mining and royalty segment, total revenues for the quarter were $2.383 million versus $2.274 million in the same period last year. Total operating profit was $2.089 million, an increase of 2.5% over the same period last year. And of particular note, as John said earlier in his opening remarks, this business segment experienced the highest revenue numbers for the year in our company's history.

With respect to ongoing and new projects in the development section, highlights would include, one, at year's end, phase 1 of our joint venture with St. John's properties, consisted of 4 buildings totaling 72,080 square feet of single-story office buildings and 27,950 square feet of small bay retail space in Baltimore County, Maryland. Leasing efforts procured 1 retail tenant despite the pandemic, who took possession in the fourth quarter of 2020 with lease commencement in January of 2021. As a result, the project is now 46.7% occupied overall, a 2.7% increase over 2019. At completion, this project will consist of 329,000 square feet of office and retail space.

Secondly, we continue with the PUD entitlement process at Hampstead Overlook, our 118-acre development track in Hampstead, Maryland. The concept plan approved in the first quarter of this year calls for 164 single-family and 91 townhome units. We are currently seeking preliminary plan approval from local agencies as the next step in the development process. We are optimistic that 2021 will be the year of substantial progress towards this goal.

Third, as an update to our lending ventures, all of the entitlements were completed this year at Hyde Park and Baltimore County, Maryland, and a homebuilder purchased all 126 residential lots prior to the commencement of any land development activities. All principal and accrued interest has been repaid, and part of the profits have been received. Additional profits are expected to be received in 2021 and early 2022, resulting in an overall return of our $3.5 million investment of over 27% were a little over $1 million.

Fourth, relative to our other lending venture, it is also a residential development project called Amber Ridge and located in Prince George's County, Maryland. Our total commitment for this project is $18.5 million. As with Hyde Park, the investment includes a charged 10% interest rate and a preferred return of 20%, above which a profit induced waterfall determines the final split of proceeds, similar to Hyde Park. Entitlements are complete, land development has commenced, and two national homebuilders are under contract to purchase all 187 lots after completion of the horizontal development.

Five, phase 2 of our riverfront on the Anacostia project in Washington, D.C., known as Maren, as John alluded to earlier, began leasing in March and received a final certificate of occupancy for the building in the September of 2020. By year's end, 87.5% of the apartments were leased, 84.1% were occupied, far out -- exceeding expectations despite the pandemic environment. Of note, the apartments are expected to reach occupancy by the end of this month. Relative to the 6,900 square feet of first floor retail, 76% of the space is leased, with occupancy currently scheduled for the third quarter of this year. As with Dock 79, this is a joint venture project with MidAtlantic Realty Partners or MRP, in which FRP is the major partner.

Sixth, at the end of 2018, we entered into a third joint venture with MRP to develop the first phase of a mixed-use residential and retail development adjacent to the Red Line Metro Station in Northeast Washington, D.C., known as Bryant Street. As a transit-oriented development, immediate access to public transportation options is a critical feature to the design and marketing of this project. FRP contributed $32 million in common equity and another $23 million in preferred equity to the joint venture, all of which were capital gains dollars. Construction began in February of 2019 and the project at year-end is 82% complete.

The first building delivery, entitled Coda, consisting of 154 apartments was completed at the end of December, and our leasing team has produced 34 leases as of the end of February, making this building 25% leased. On time and within budget, we expect to deliver the remaining 3 phases of phase 1 in Q3 of this year. Not unexpectedly, we are keeping a watchful eye on the completion of construction and the delivering of such a large project during the pandemic. We believe leasing activity should increase as the critical mass of vaccinations are completed, and we approach herd immunity, thereby allowing a certain return to normalcy that hinges on people moving about freely, a linchpin to the attractiveness of this project.

This property is located in a designated opportunity zone, which allows us to defer a significant tax liability. In total, phase 1 at Bryant Street will consist of 487 apartments and 86,100 square feet of first floor and freestanding retail. Approximately 44,000 square feet of the retail is pre-leased.

Seven, in December 2019, the company entered into its fourth joint venture with MRP for the development of a mixed-use project known as 1800 Half Street. And in August of this year, we've began construction. The development is located in the Buzzard Point area of Washington, D.C., less than 0.5 mile down river from Dock 79 and Maren. It lies directly between our 2-acre site on the Anacostia River currently under lease to Vulcan Materials and Audi Field, the home stadium of the D.C. United professional soccer team.

The 10-story structure will have 344 apartments and 11,246 square feet of ground floor retail and is scheduled for completion in the third quarter of 2022. This project is also located in an opportunity zone and FRP contributed $37.3 million of capital gains as common equity.

At the end of 2019, we entered into 2 joint venture agreements with Woodfield Development, a new strategic partner to invest in the 2 distinct projects in Greenville, South Carolina. Woodfield has vast experience developing residential and mixed-use projects throughout the Southeast and Washington, D.C. Our first JV called, Riverside, is a 200-unit multifamily project in which FRP contributed $6.2 million in capital gains in exchange for a 40% ownership interest. Construction began in Q1 of '20, and is on schedule to be complete in the third quarter of 2021. This is a qualified opportunity zone investment.

Our second joint venture with Woodfield is a 227-unit multifamily development entitled .408 Jackson, which is a nod to Shoeless Joe Jackson and is adjacent to Greenville's Minor League baseball stadium. This project will also include 4,700 square feet of retail space.

FRP has received a 40% ownership position in this project in exchange for $9.7 million in capital gains funds. Construction began in May of this year and should be complete in the third quarter of 2022. This is also a qualified opportunity investment, and along with Riverside, will allow us to defer a little over $4.3 million in federal taxes.

To close out 2020, in November, we completed the purchase of a 55-acre tract of land in Aberdeen, Maryland, adjacent to the Cranberry Run Business Park. We paid $10.5 million for this property. This project will be known as Cranberry Run phase 2 and could support up to 675,000 square feet of warehouse product in a robust distribution market. This purchase will expand our industrial land holdings to allow us to continue the industrial development program beyond the remaining undeveloped building lot in Hollander Business Park in Baltimore City.

We are currently petitioning for [annexation] to bring all parcels of this property into the same municipal boundaries. This process will take a year, and we will begin the design process in the interim. Existing land leases for the storage of trailers on-site will help to offset our carrying and entitlement costs. We are hopeful we can begin construction here in late 2022 or early 2023.

Moving on to our Stabilized Joint Venture business segment. In July of 2019, we completed a partial 1031 like-kind exchange by investing $6 million for a 26.65% beneficial interest in a Delaware Statutory Trust, or DST, that owns a 294-unit garden-style apartment community known as Hickory Creek, located in Henrico County, Virginia. The complex was constructed in 1984, and substantially renovated in 2016.

The business plan calls for further rehabilitation of the apartments, generating value-added rents prior to selling the project after an appropriate hold period. We continue to receive monthly distributions from operations in Hickory Creek. Fourth quarter distributions were $85,000 and $339,000 for the year. Occupancy averaged above 95% for the year with a collection rate and 12 COVID-related payment plans representing less than 3% of revenues.

Relative to Dock 79, the average occupancy for the year was 93.1%, down from 95.1% last year. This past quarter, retention rate was 60.4%, similar to the same period last year. Rental rates, however, were flat due to government-imposed restrictions on [rent freezes] due to COVID. Net operating income for the quarter was $1.55 million, down $270,000 or 14.77% over the same period last year.

All in all, Dock 79 fared quite well during the year despite the significant interruptions we all experienced throughout 2020, generating a net operating income of $6.652 million, down 7.1% over 2019. Keeping our eyes on resident retention, finding creative solutions to help our tenants weather a difficult new reality and optimizing expense savings continues to be our primary focus as we navigate this property through the pandemic.

Though seriously impacted by COVID with shutdowns, reduced capacity, canceled stadium events and general uncertainty, our 3 retail tenants at Dock 79, which total approximately 10,500 square feet of the total 14,000 of retail space seem to be holding their own and looking forward to warmer weather and better utilization of their outdoor spaces. The remaining retail suite is being actively marketed, but we are being quite selective as to vendor and use. Full occupancy is expected in late '21 for the retail program. Dock 79 was our first joint venture between MRP and FRP, in which FRP is the major partner with a 66% ownership position.

We have touched a few times on the impact COVID has had on FRP. Make no mistake, we are not immune to the effects of this terrible global disease that has monopolized the world's attention throughout 2020. FRP has significantly adjusted its operations with stood infected employees and contractors, held the hands of tenants paralyzed by new government regulations, preventing their opening for business, and witnessed the carnage of life and enterprise in many turns. All the while, we are immensely grateful that as a business and a collection of professionals, we stand atop a solid financial foundation that uniquely enables us to progress as an organization with a steadfast mission that followed closely, should insulate us from much of the troubles others face.

Thank you, and I'll now turn the call back to John.

Thank you, David. Now we are, at this point, happy to open up the call for any questions that any of you might have.

(Operator Instructions) And our first question comes from Bill Chen.

A couple of questions. I'm probably going to jump around a little bit. I think there's an Alamo Drafthouse in the Bryant Street project, if my memory serves me correctly, and they just filed for bankruptcy yesterday. Is there any -- any updates on whether would go through with the Alamo Drafthouse as a tenant on the Bryant Street project?

Bill, this is David deVilliers. We know about the parent filing bankruptcy if at the same time you did. The lease that we have is with the franchisee. And they have 3 different -- this will be the third. And they have 2 other operations that are open, but certainly not to the extent that they would like them to be. So we don't know fully yet. We speak with them probably on a biweekly basis. So again, we're aware. We're just going to have to see what that fallout does.

We -- the building is under construction. We're going to get to a white box program, and then we'll try to figure it out from them. They were expected to come and start working on the interior of the project sometime this summer. So could be better if we can get to herd immunity, but that's kind of about where we are now.

Got you. And just in case, for some reason that -- can we repurpose that space if needed? I mean, movie theaters kind of got a certain layout, which may be different than a typical layout. So any color on that would be helpful.

Again, the building is designed for them. As you may or may not know, 65% of their revenues is derived from food and beverage. So it can be -- I won't say it can be repurposed easily or quickly, but it can certainly be repositioned for other retail uses.

Got you. Okay. And I'm just going to jump around a little bit. I hope you guys don't mind. On Cranberry Run, great job getting that repurpose and leased up. Is -- can you guys share what kind of rent we're getting on that building?

Well, it's -- when you say, what kind of rent, a lot of these spaces there bill our temporary spaces. We call temporary leases, plus or minus a year. And so our original underwriting was for something a lot less than what we're getting now. When they do storage for temporary spaces, we were -- again, we paid about $30-some a foot for that building and then put a bunch of money into it. So we've got a pretty low basis, but then the leases we're generating are well beyond what we had originally underwritten.

Got you. And the intention there is -- is it -- refresh my memory. I guess the intention there is to sell that?

Well, everything is for sale, as you can -- as you certainly know, from our past activities. I mean, the paint was hardly dry on the Hollander building before we sold that one in June. So we just -- again, we don't know -- we don't make any plans to sell something right away. We just look at the market, and we try to be as opportunistic as possible in the sale of our assets.

Got you. And I think the new acquisition, the $10 million acquisition, the Aberdeen, that's right next to Cranberry. Is that right?

Yes, sir.

And was there like -- what did you guys see that made that attractive?

Well, it's surrounded by the large box institutional warehouses. It's a great location, it's a great location. It's close to 95%. And as you know, where we're located there in the Northeast, you can get to a major part of America's population in less than an 8-hour drive. So we -- and more importantly, it adds -- it helps to put some -- a little bit of inventory back into our program. I mean, for years, we probably had too much inventory, but -- and before we bought that, we had 1 lot left at Hollander Business Park that could take as much as 100,000 feet. Now we're out. So -- but primarily, we love the location.

Got you, got you. And on local rent dynamic, I think the headline is generally that in Richmond, Virginia, I think I saw something in the mid-single digits rent increase for 2020. Just want to get a confirmation on that. I don't know if that happened in the DSP property, so if you could comment on that. And also, if you could comment on rent trends in Greenville, South Carolina, if that is a market that experienced rent growth in 2020.

It has -- as you can imagine, 2020 has been a very unusual year for everybody in every asset class. I think I'd rather be in the mixed-use and warehouse class in the office and retail, but -- so it's really kind of hard to tell, it's somewhat of an anomaly. We've seen positive signs in both Richmond by virtue of some of the increases they got at Hickory Creek.

But again, when you're dealing with the pandemic, it's awful hard to put any real credibility on rent increases or whatever. So for example, in D.C., as you know, the government wouldn't allow us to increase rents. We do see a favorable trend. We see the trend continuing. I think it kind of bumped along in 2020. But we're very, very excited about these vaccinations and the return to people moving about freely. And I think that will show a tremendous chance to increase rents all around, especially in places that had success before this came in.

And just one last question before I dropped off. So I'm looking at the apartment rents in Coda, for the Bryant Street project. It seems like the asking rent is about $2.8 a square foot for the Coda building. Can we extrapolate that to the rest of the Bryant Street project?

Well, the Coda building is a little bit -- is probably the lower end -- I won't say the low end, but a lower end than the chase, which are the 2 buildings that are a little closer to the railroad, and on the other end of the park. So Coda's units are just, I would say, just a touch below. So we're going to see greater rents at the chase, which are the 2 buildings that are under construction now.

So we have given a little bit more of a discount than we had -- that we had underwritten in the beginning, 5% to 7% maybe. But we've only been open for 2 months and we've leased 34 units as of February 28. So the game's afoot. We feel really good about the project. We'll be excited when the spring comes, and we finish the project because the great thing about this project is there are a lot of open space, and that's important. A very important factor for the retail component, and also for the people that live there.

And our next question comes from Curtis Jensen.

Can you hear me okay?

Yes, sir.

Yes, Curtis.

Well, congratulations on getting through the year. Your business held up amazingly well, and you got a heck of a lot accomplished. You were very busy, and it was pretty remarkable. But 2 or 3 questions, if I could.

Just thinking about some of the submarkets in D.C., like Southwest and Capitol Hill and Capitol Riverfront, there was I think in the last year, something like 3,900 units delivered into those markets and across a dozen buildings or so. And as you kind of -- you've got big commitments at Half Street and Bryant Street. How do you feel about -- and there's probably been positive absorption, and it sounds like you guys are doing a great job getting leased up and stuff like that.

But given your significant footprint already, and given what you've learned about this public health experience, are you inclined to keep putting big checks into the D.C. area? Or if you had a -- are you thinking about it -- I mean, obviously, you're thinking about other things. You spent $10 million for property in light industrial and Aberdeen and stuff like that. But I mean, just give me a sense of where you think you might be allocating.

Are you kind of done for the moment in D.C.? Obviously, there's stuff at Buzzard Point coming down in the years ahead. But I mean, how do you -- how are you feeling about this market right now in the multifamily market given all these cross currents?

I can offer a couple of comments, and then John, I guess you could -- appreciate your insight to this as well. We've talked about this, Curtis. I mean, look, the southeast of Washington, D.C., where we're located is literally the southern entrance to the nation's capital. And the new Frederick Douglass Memorial Bridge, the infrastructure improvements with the Oval and all of that that's under construction, which has created somewhat of a nightmare for the -- for all the people that live there and walk around there. But we see a very strong increase in the people, they continue to move into the area down there, the younger people. And you can argue that with the change of the way people work, where they don't go to offices, they like to live in nicer places.

And there's a tremendous amount of live-work-play type of activities in and around the southeast. I mean you've got sports and baseball and soccer. You have the water. You have sports betting. You have a lot of different positive influences on that area.

So we're still pretty bullish on the area. I mean, obviously, it's not without a little trepidation, but we continue to take a look at what's in front of us. And as this, "We reach herd immunity," we see where things kind of play out. I think at that point, we'll take a look at where we are and decide and kind of look at the tea leaves and squeeze the old crystal ball and see where we think things are at that time.

Curtis, I would -- this is John Baker. I would say we are very bullish on the area in Buzzard Point and Phases 3 and 4 of our Anacostia property. So we were very surprised, pleasantly surprised at how quickly the Maren leased up. I think we were figuring that we would get 15 units a month. And we got a lot of months, 2 or 3x that. So we've got every reason, both because of what happened before COVID and during COVID to have a lot of faith in that part of the market.

We've got to -- we're going to watch Bryant Street. As David mentioned in his thing, that's a multiphase building, and we're starting off with a big hunk of apartments and retail. So we'll watch that one to see if it leases up. We're off to a decent start, but it really won't be fair to analyze that market until people start using the metro again and we get some resolution on what happens with the Alamo Drafthouse Theater.

So less optimistic about that, but we would be prepared to go forward if we can get it leased up in a reasonable amount of time on phase 1. So to answer your question, we're anything but done in D.C.

And on phase 3 and 4, do you have to wait until the bridge is done before you can get going there? Or -- I know there was some -- you had some situation with the city, I guess, around an easement or something like that, that was -- but do you have to kind of wait until the bridge is done before you get going there? Or...

The answer to the question would be, probably would want to wait until it's done. But more importantly, with us building at Half Street, we wouldn't think about starting a new project until we get that up and rent it out. So either way, it's going to be -- the bridge is going to be done.

And I don't know if you've seen it, the bridge and that roundabout that they're going to have there is really looking beautiful. I mean, it -- I never thought that bridge would be an amenity, but it is gorgeous. And so I think it just adds something to the whole area.

Are they taking down the -- I guess they're going to take down the old bridge, right? The old one will be taken down in time?

Yes, right.

On Dock 79, you said the NOI was $6.6 million, I think. Is there -- were there added expenses? I mean, I'm sure there were probably added expenses related to COVID precautions and things like that. Expenses that you think will go away that you can take out once the public health issues abate a bit. Or do you think you're going to be running the building the way it is?

We -- this is David deVilliers. Absolutely. I mean we had a lot of expenses because of keeping it sanitized and that sort of thing that we would not have under normal conditions, for sure.

And that be like a few hundred thousand dollars a year -- annually? Or is that...

It could be. It could be, yes.

That's probably high. That's probably high, Curtis. But the real play on that is that in our retail, we had been getting excess rents, especially during the World Series year and -- as opposed to being shut down and hoping to get rents. So I think that's where you'll see an improvement as we come back. And also, our rent was 93 -- our occupancy was 93% at Dock 79 as opposed to 95% the year before. That's an impact.

Average occupancy.

Average occupancy.

And the rent freeze.

Yes. And we were unable to raise the rents, where it's interesting, at Maren, our rents are -- what David, about 10% higher than they are at the Dock? So there's room to raise rents when that freeze comes back -- or ends, I should say.

So I think you'll see Dock 79 get improvements in a lot of ways as -- not the least of which was, as we were building the Maren, I'm not exaggerating, it couldn't -- we had heavy construction going on, 20 or 30 feet from Dock 79, and that could not have helped the leasing activities at all. And that's, of course, done now. So it will be a lot more mature place and I think a very, very desirable place.

Great. When I think about Hyde Park and Amber Ridge, it seems like you guys -- it seemed like an opportunistic kind of mezzanine-lending approach. Maybe that's not the right phrase, but that's how I kind of think about it. Do you see -- knowing what's going on? I mean, homebuilders are dying for land, and I mean -- do you see other opportunities like those that -- coming down the pipe?

Yes. Curtis, we do. As a matter of fact, we have one that's fairly close to us making a charge. But you're absolutely right. I mean, it's been an interesting dynamic, obviously, trying to navigate, have our partner navigate through 2020, dealing with entitlements for government agencies that are closed down, that sort of thing. And to be able to get to get one of the projects sold and then to get all the entitlements on the other one during the -- during this year has really been pretty remarkable. But we're in a -- we look at in really good areas where we can find the hole in the donut. And that's what these 2 are.

And we have other ones that we look at, but they have to meet -- we have some pretty rigid criteria before we're going to become part of a lending venture. But we have a really good partner who has been in the residential development business and the past president of actually a couple of the national homebuilding companies, who's our partner, and we've known for over 25 years. So we're pretty excited about the lending ventures program. And it also -- and also, we don't want to take our eyes off what our real business is and that is industrial development and then certainly now mixed-use.

And then I'll shut up in a second. My last question is, can you just remind me of the kind of obligations you have in an opportunity zone? Are they -- is there sort of an 80-20 low-income type of obligation? Or is there -- what sort of other obligations do you have when you go into an opportunity zone?

Well, the big thing is, obviously, in a lot of these, you have a certain percentage in different locations of, what we'll call it, affordable housing, and those dynamics change depending on the location. But more importantly, it's the whole period. You have to -- it defers -- we have to -- the current program with opportunity zones is that you have to settle on the property by the end of 2021. And then that, you have to then hold -- keep the property at least through, I believe, it's 2027. And then you pay, you owe the taxes on those capital gains monies that you invested in 2021, you owe taxes on 85% of that.

And then as -- then more importantly, if you go past 2021, the monies that you invest in these projects, you have to keep them up and operating for 10 years. And if that happens, then the basis is frozen, and you don't have to pay taxes on the increased basis if and when you ever sell the property. That's the big program, is the deferral of taxes in the short term, but the freezing of the basis, so whatever happens, you don't have to pay taxes on the increased basis when you ultimately do sell it after that 10-year hold period.

And our next question comes from Stephen Farrell.

Can you hear me?

Yes.

Yes.

A quick question about Bryan Street. I know you mentioned with the Maren, that your internal metrics were about 15 leases a month. What are your similar lease-up metrics for the Coda? And what kind of contingency plans are in place in case there's a slow lease up?

Well, Coda has been -- has actually been leasing at the rate of about 17 units a month at the -- for January and February. I mean, we're just kind of just getting started. And that's not a bad start considering the fact that construction is going on all the way all around you. So we're pretty -- actually, we're pretty happy with what has happened at the Coda.

We are -- as John said, we're looking at that project closely. And as I said in my remarks, we're watching the construction completion. We have a lot going on as it relates to generating the retail activity that will then, we think, will help to keep the leasing activity up and maybe even increase it. We are very conservative in our underwriting of these leases going in. So we're not that far off of what our underwriting criteria was at least to start at Bryan Street.

So we are giving up some -- when -- we changed the pricing on these properties just about every day through the software programs that our property manager has, which is the Bozzuto companies. And they're very good and very experienced in running and operating these programs. So we're kind of following along with them.

As it relates to the retail program, we have -- as John and I had said earlier, we are watching to see what happens with the Alamo Drafthouse. That's 44,000 feet, but we have another 42,000 or 43,000 feet of first floor retail. And we've had some really good velocity from retail tenants, which is amazing. We're -- we've created a food hall concept, I don't -- that will occupy about 10,000 square feet of that. And we have an incredible amount of velocity. We've actually got a couple of letters of intent that we're going to lease on. So, so far, so good.

And Stephen, to answer your question, on a less optimistic point of view, we've got $150 million in cash. And that's what our plan -- our backup is if things don't go well. That would enable us to keep paying the loan.

(inaudible)

Stephen, you're breaking up. We can't hear you.

Stephen, I'm sorry, we can't hear you. I think it's frozen.

Yes, we lost him.

(Operator Instructions) We do have a question here from [John Collar].

Just a couple of follow-up questions from what Stephen was asking, if I may. Can you bracket your CapEx budget for this year? And then as a follow-up to that, if you can also sort of ballpark where you see funds coming in from either asset sales or refinancing and how you expect that to offset any cap spend you have.

John K, can you talk about the CapEx?

I don't have that figure right in front of me. David, do you recall the...

What was -- yes. What was the question? I'm sorry.

Sorry. I was just wondering -- yes, what your cash outflow was looking like for all the projects you have and then how you might offset some of that from asset sales or the refinancing of Maren or any cash that you might pull out. I'm just curious about how the cash flow looks for the year as a corollary to the $150 million that you already have in the bank.

Okay.

When you say, for the year, do you mean 2020 or 2021?

2021, please. Sorry.

Okay. Well, we -- again, John spoke earlier, we're going through some refinancing, both Maren and Dock. That's going to generate $180 billion of new financing. One of the programs that, that will do is the Maren, we are refinancing basically the construction loan into a long-term permanent financing. And when we go to settlement on that financing, which John talked about, we get $13.750 million of preferred equity back plus accrued interest of about $2.3 million. So that's close to, what, $16 million there.

Our CapEx right now for 2021 is scheduled to be around $36 million. So that's kind of -- from 3,000 feet, but that's kind of where we are right now. We don't have anything under contract to sell right now. So I don't know that, that will add cash. So if you take just the $16 million we know we're going to get back and you put that against the $36 million, it's probably a net CapEx of around $20 million that we would have to go into the bank of our $150 million to take it out.

Okay. Perfect. And I'm guessing, given the amount of money that's available pretty much everywhere, that potential deals of any material size are probably not within your price range. Is that a reasonable assessment that you're just -- you're seeing opportunity, but they're not priced right?

We have a pretty strict underwriting criteria, and we're always looking. But there's a lot of crazy money out there in the world today. So -- but we look at a lot of projects. We probably -- last year, we looked, I'm embarrassed to say, probably over 800 projects. And we wound up purchasing 55 acres in Aberdeen, Maryland.

Yes. That's great. That's the right filter in my opinion.

John, I think your point is a very good one. There are not many projects that are built and for sale that would wet our appetite because they are -- they're just expensive as can be. And that's exactly why we think developing these projects is a better business model than buying them right now.

Okay. Great. And then lastly, your execution on the share repurchase was quite good. And I'm not asking for an opinion on where you view the stock price or anything like that. But given the lack of potential deals and depending how your CapEx budget goes, would you still look to allocate some cash for additional repurchases where you thought the stock was in expensive?

I think we've got about $10 million approved at this point by the Board. And I'm glad you're not going to ask us what our pricing strategy. But needless to say, we would rather pay less than more.

And next, we'll go to Bill Chen.

On the refinancing of the Maren and Dock 79, we've seen the 10-year Treasury have some wild moves slightly. Are those 2 transactions kind of like a foregone conclusion? Or is there some way that those 2 financing could be derailed?

Bill, the rates that we quoted, said today, are fixed. We looked at probably -- we're deep into the documents now. We could probably get the settlement in over the next 2 or 3 weeks. So we're well within the confines of the time allocated to get the settlement here. And it was -- those loans actually were originally -- they had a -- they were on a 12-year -- a 12-year average as opposed to the 10, and 180 basis points.

So there was a floor on those loans when we first went into it that we couldn't lock in until we send in the application. But the floor was like 2.8%, we got -- I won't say we got caught, and we wound up at 3.03%. No, this is -- we -- hopefully, we'll get to the end. There's no reason to believe that we won't, but crazier things have happened.

And on the construction loan on the Maren, do we have an estimate on that, what that final number will be?

The final number of what?

For the Maren construction loan.

It's about [$69 million].

I mean, I think it was roughly $63 million, was $65 million. I know the construction loan was approved for -- was $71 million. Is $71 million the final figure?

It's a little less than that.

It's $69 million.

It's $69.5 million.

$69.5 million. Okay. Got you. That's helpful. And I think I just want to leave off with my final opinion as a shareholder, that we believe that share buybacks are a great use of capital. And I was just encouraged that as you continue to create a lot of value for shareholders, that the share buyback price is a moving target.

My suggestion would be don't get fixated on what you paid in the past. I think that number could rise over time. As these projects get developed and value gets created, just be flexible on that end. And we can have -- I will reach out offline to discuss, but I just want to -- I think previous share buybacks have been done at very attractive prices. And I think future share prices should account for the increase in prices through all the good jobs that you guys have done.

Thank you. And it appears that we have no additional questions at this time.

Well, I appreciate everybody joining the call. There were really good questions, and enjoyed being with you all, and appreciate your interest in FRP. And we'll talk to you next quarter.

Thank you, ladies and gentlemen. This concludes today's teleconference. You may now disconnect.