[Operator Instructions] I would now like to turn the conference over to Mr. John Baker III. Please go ahead, sir..

Good morning. I am John Baker III, Chief Financial Officer and Treasurer of FRP Holdings. And with me today are David deVilliers Jr., our President; John Milton, our Executive Vice President and General Counsel; John Klopfenstein, our Chief Accounting Officer; and David deVilliers III, our Executive Vice President.

Before we begin, let me remind you that any statements on this call which relate to the future are, by their nature, 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 in our SEC filings.

We have no obligation to revise or update any forward-looking statements except as imposed by law, as a result of future events or information. You are, of course, used to hearing the voice of a different and more experienced, maybe more capable, John Baker.

Our Chairman and CEO had a scheduling conflict, and I drew the short straw of having to fill his very big shoes. This will be old news to anyone who attended our annual meeting yesterday, but during the quarter ended March 31, 2021, we had two important accomplishments in our Riverfront on the Anacostia Project.

First, we secured a $92 million refinancing of Dock 79, as well as permanent refinancing of the Marin for $88 million. These are 12-year interest only loans at 3.03% and will significantly lower our debt service at Dock 79. In addition to paying off the construction loan at the Marin, as well as the mezzanine financing we provided to the project.

Secondly, the Marin achieved stabilization in March, meaning 90% of the individual apartments were leased and occupied.

As a result of that, the Company is now considered for accounting purposes to have control of the partnership without any transfer of consideration and is required to write up the value of the assets and liabilities to their fair market value.

Previously the Marin joint venture was accounted for under the equity method and prior periods are still reflected using that method.

Starting in April, all the Marin's revenues and expenses are reported in the corresponding categories in the consolidated statement of income, including the amounts attributed both to the Company and our partner MRP Realty. The amount of new income attributable to our partners is clearly identified as non-controlling interest.

Because of the increased depreciation and amortization attributable to the Company as a result of consolidating the Marin's results into our income statement, the impact on net income going forward may in fact be negative, but the positive impact on our NOI and cash flow, will be significant. Now let me turn to financial highlights.

Net income for the first quarter was $28,373,000 or $3.03 per share versus $1,618,000 or $0.16 in the same period last year.

The lion's share of this increase is a result of the stabilization of the Marin and subsequent fair write-up -- excuse me, write up to fair value, which resulted in a gain of $51.1 million on the measurement of investment in the Marin real estate partnership, which is included in income before taxes.

This gain on re-measurement is mitigated by $10.3 million provision for taxes and a $13 million attributable to non-controlling interest. Additionally, we were positively impacted by a decrease in expenses.

During the same period last year, professional fees were $260,000 higher, primarily because of environmental claims on our Anacostia property, which we settled at the end of last year. We also had stock compensation expenses of $202,000 compared to $601,000 this quarter last year, due to the timing of stock grants.

Finally, this quarter our loss on joint ventures increased $993,000. This is primarily due to a $248,000 increased loss at the Marin prior to stabilization and a $663,000 increased loss Bryant Street. At this point last year, the Marin was not in service and we hadn't yet started leasing efforts at Bryant Street.

Aggregates royalties income this quarter increased by 5.95% compared to the same period last year. The $2.315 million in revenues this quarter is the best first quarter in revenue in the segment's history.

This is the third quarter in a row where royalties during the pandemic have exceeded those prior and with royalty revenue of $9.6 million over the last 12 months, this is also the first time we have surpassed the $9.5 million revenue threshold in any consecutive 12 month period.

On a big picture level this is also the closest in sometime that we, as a nation, have been to a major national infrastructure bill. Both parties have submitted infrastructure plans, albeit very different ones. Hopefully they can do what Congress is designed to do and come up with a compromise both sides can live with.

Any kind of infrastructure bill, in addition to being sorely needed, would of course positively impact the segment. We still retain high levels of liquidity relative to our size with roughly $160 million in cash and bonds, as well as a $20 million line of credit.

While we are busier than ever in terms of sourcing deals to re-deploy our cash, this substantial capital cushion is more precious to us than it has ever been. With vaccination numbers on the rise, a path back to a quote unquote normal world is slowly starting to materialize, but we are not out of the woods by any stretch.

We remain extremely optimistic about our projects under development, but our liquidity allows us the luxury of that optimism. We will continue to be opportunistic with our share buy backs. This past quarter, we purchased 6,004 shares at an average cost of $43.95 per share. Now, if I could turn things over to David deVilliers Jr.

to walk you through our segments in more detail.

David?.

Thank you, John. And good morning to those on the call today. I'll now offer some detail to the highlights provided by John in his opening remarks.

As our asset management segment with the final disposition of two heritage properties in 2019, we completed the liquidation of a little over 4 million square feet of warehouse 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 vacant lot in Jacksonville, Florida that at one time housed Florida Rock Industries home office that remains under lease to Vulcan Materials until 2026.

We are constantly seeking value-add purchase opportunities, and will continue to construct speculative-type buildings upon our land inventory when available. 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 completed an extensive renovation of the park and associated buildings late last year. And as of March 31, the asset was 87.6% occupied. Total revenues for this business segment for the quarter were up 9.2% over the same period, last year.

$712,000 with an operating profit of $17,000, up 148,000 from a loss of $131,000 the same period last year. Increased revenues and profits for this quarter were mainly attributable to the stronger occupancies at Cranberry Run. I won't give any further detail on the mining and royalty segment because John took care of that in his opening remarks.

Quite an amazing program that the mining and royalty segment is on. With respect to ongoing and new projects in the development segment, we have many highlights to provide. At quarter's end Phase one of our joint venture with John St.

John Properties consisting of four buildings totaling 72,080 square feet of single story office and 27,950 square feet of small retail space in Baltimore County, Maryland remained as it was at the end of 2020, being 46.7% leased overall.

This asset class of office and retail has been devastated by the pandemic, but the tenants at Winmost have kept current with their rental payments.

Two, after the sale of our 94,000 square foot warehouse in the third quarter of last year, we were encouraged by the velocity of the sub market and began construction of two speculative Shell warehouse buildings, totaling 145,750 square feet at the Hollander business park near the port of Baltimore.

Like their predecessor these are state of the art class A, concrete wall buildings with 28 and 32 foot clear ceiling heights, built to Baltimore City green building standards. Leasing efforts are ongoing and we expect to complete these buildings in the third quarter of this year.

Next we continue with the PUD entitlement process in Hampstead Overlook, our 118 acre development track in Hampstead, Maryland. Concept plan approved at the end of last year calls for 164 single and 91 town home units. We are currently seeking preliminary plan review 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. Next, as an update to our lending venture activities, all of the entitlements were completed in 2020 at our Hyde Park project in Baltimore County, Maryland.

And a home builder purchased all 126 residential lots prior to our initiating any infrastructure development activities. All principals and accrued interest has been repaid and part of the profits have been received.

Additional profits are expected in the second or third quarter of this year, which is quicker than expected due to the strong demand for housing, resulting in an overall internal rate of return on our initial $3.5 million investment of over 27% or over $1 million. Relative to our other lending venture.

There's 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 our Hyde Park venture, the investment includes a charged 10% interest rate and a minimum 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 home builders are under contract to purchase all 187 lots after completion of the infrastructure development. The first set of finished lots are due to be delivered to the purchasers in the third quarter of this year.

At the end of 2018, we entered into our third joint venture project with MRP to develop the first Phase of a mixed use residential and retail development known as Bryant Street, which is adjacent to the Red Line Metro station in Northeast Washington DC.

As a transit oriented development, immediate access to public transportation options is a critical feature to the design and marketing of this project. The first building, named Coda, was placed in service on January 1 of this year, and received final certificates of occupancy on April 1 for all of its 154 apartments.

Our leasing team has done a Herculean job of leasing during the period from January through March. And at the end of the quarter of the building was 35.7% leased.

As the weather has gotten warmer and project completion is on the horizon, being 94% of the quarter's end, the traffic has picked up, and as of yesterday, Coda was 57.1% leased and 34.4% occupied.

Not unexpectedly, we are keeping a watchful eye on the completion of construction and the delivering of such a large project during a pandemic, but we are certainly encouraged by the recent philosophy. In total, Phase 1 will consist of 487 apartments in three buildings and 86,100 square feet of first floor and freestanding retail.

Approximately 51% -- excuse me, 51,000 square feet of the retail is now pre-leased. This property is located in a designated opportunity zone, which allows us to defer a significant tax liability. In December of 2019, the Company entered into its fourth joint venture with MRP for the development of another mixed use project known as 1800 Half Street.

In August of this past year, we began construction. The development is located in the Buzzard Point area of Washington DC, less than half a mile down river from Dock 79 and Merit.

It lies directly between our two acres on the Anacostia currently under least of developing materials, and the Audi Field, the home stadium of the DC United soccer franchise. 10 story structure will have 344 apartments and 11,246 square feet with ground floor retail, and it's scheduled for completion in the third quarter of 2022.

At quarter's end, 1800 Half Street was 16% complete. This project is also located in an opportunity zone. In the waning hours of 2019, we entered into two joint venture agreements with Woodfield Development, a new strategic partner to invest in two distinct projects in Greenville, South Carolina.

Woodfield has vast experience developing residential and mixed use projects throughout the Southeast and Washington DC. The first joint venture, called Riverside, is a 200-unit apartment project. Construction began in the first quarter of 2020 and is on scheduled to be complete in the third quarter of this year.

The second JV with Woodfield is a 227-unit multi-family development entitled 0.408 Jackson, a nod to Shoeless Joe Jackson, and adjacent to Greenville's minor league baseball stadium. This project will also include 4,700 square feet of retail space. Construction began in May of 2020 and should be complete in the third quarter of 2022.

FRP he's invested $15.9 million in capital gains funds for 40% ownership interest in these two South Carolina projects, which are both opportunities zone investments, which will allow us to defer a total of $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, which [indiscernible] the Cranberry Run Business Center for $10.5 million. This project will be known as Cranberry Run Business Center Phase 2, and could support up to 675,000 square feet of warehouse product and a robust distribution market.

This purchase will expand our industrial landholdings to allow us to continue the industrial development program beyond the remaining building lot at Hollander Business Park in Baltimore City. We are currently petitioning for annexation to bring all parcels that make up the assemblage into the same municipal boundaries.

This process will take the rest of this 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're hopeful we can begin construction here in late 2022 or early 2023.

Just last month in April, we entered into a build to suit long-term lease agreement for 101,750 square foot warehouse building on the last remaining building lot, the Hollander Business Park. We expect to begin construction in the third quarter of this year, and to deliver the project and the tenant in the fourth quarter of 2022.

Moving on to our stabilized joint ventures business segment. In July of 2019, we completed a partial 10-31 like-kind exchange by investing $6 million for a 26.6% beneficial interest in a statutory -- excuse me, Delaware, statutory, or D, that owns a 294 unit garden style apartments 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 to departments generating value added rents prior to selling the project after an appropriate whole period. We continue to see receive monthly distributions from operations at Hickory Creek.

In the first quarter of 2021, distributions were $84,000 equal to a 5.65% per annum on our investment. Occupancy average is above 95% for the year and the first quarter with a collection rate and 12 COVID payment plans representing less than 3% of revenues.

To round out the quarter, Phase 2 of our Riverfront on the Anacostia project in Washington DC, known as Marin, reached stabilization or 90% occupancy of its 264 apartment units in March of this year. As a result of this milestone, we'll join Dock 79 and Hickory Creek and our stabilized joint ventures business segment.

At quarter end, 92.8% of the apartments released to 92.04% were occupied. Relative to the 6,900 square feet of first for retail, 100% of the space [indiscernible] currently scheduled for the third and fourth quarter this year. As with Dock 79, this is a joint venture with MRP or Mid Atlantic Realty partners, in which FRP is the majority partner.

Of particular note, this building received its final certificate of occupancy at the end of March 2020, and reached stabilization of 90% in less than 12 months. A significant speed on its own, but during the pandemic, that's something else. Relative to Dock 79, its 305 apartments for 94.1% leased and occupied at the end of this quarter.

The retention rate was 60%, similar to what it was last quarter. Rent, however, was flat through the government impose restrictions on rent increases due to COVID.

Net operating income for the quarter was $1.53 million, down $278,000 over the same period last year due to the affirmation government imposed rent freeze and lower traffic through our three restaurants and parking facilities. All in all, Dock 79 fared quite well over the past year, despite the significant interruptions we all experience.

Though seriously impacted by COVID with shutdowns, reduced capacity, canceled stadium events, and general uncertainty, our three retail tenants at Dock 79, which totaled approximately 10,500 square feet with a total 14,000 square feet of retail space, seem to be holding their own and looking forward to warmer weather and better utilization of their outdoor spaces.

In early April, remaining retail space became leased, and we looked forward to full occupancy in 2021. Dock 79 was our first joint venture with MRP in which we are the majority partner with 66% ownership possession. We have touched a few times on the impact COVID has had on FRP.

Spring is upon us, the baseball is back at the National stadium, and vaccines are being widely received. These are strong signals for us, personally, and as a business, that new life, new energy, and new opportunities are on the horizon.

However, make note, we're not immune to the effects of this terrible global disease that has monopolized the world's attention throughout the past year.

FRP has significantly adjusted its operations, withstood 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 terms.

All the while, we were 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, can insulate us from the troubles other face. Thank you and I'll now turn the call back to John..

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

Thank you. At this time, we will open the floor for any questions. [Operator Instructions] We'll take our first question. This comes from Kevin with Via Mizner Capital..

Congratulations on the first quarter. Just had some questions on the language. In the last paragraph, there's some pretty bold language. I think the wording was substantially more multi-family.

If you guys could just touch upon, are you guys pivoting the ship to become multi-family mainly? Could you see another doubling or so in the portfolio next couple of years? Some color there would be great..

Thank you, Kevin. What we meant by substantially more multi-family is -- Kevin, do you mind muting your line? It's getting a little feedback. What we meant by substantially more multi-family is just sort of our development pipeline is, as you know, by our definition, substantially more multi-family.

If you look at where the Company was a year ago, we had one multi-family building. Now we have two. Then this year, we'll have our first project in Greenville, and then four buildings at Bryant Street, and two more projects coming on a year after that.

It's just definitely a huge period of transition for us, as you know several multi-family projects under development start to come online in the next 24 months. That's where the substantially more multi-family line came from..

We'll take our next question. This comes from Curtis Jensen with Robotti & Company..

Couple of questions.

One on the Marin, given the change of control, does FRP's share stay at 80% of the joint venture?.

They need to…..

David, you want to?.

Yes. Curtis, there's a program. There is a promote there. There's a process that requires us to go through a kind of a monetization process which will then upon an agreed-upon value that comes through various sources, not the least of which are appraisals.

There'll be a waterfall program that will reduce our ownership a little bit like it did in Dock 79. We went from, I think, some 77% to 66% of the Dock. We're not quite ready yet to get into the negotiations with them, but yes, that'll happen..

And then would you anticipate maybe disclosing the appraisal in a 10-Q?.

When the process is complete, I'm sure we will..

All right.

Do you have in your ballpark of what the construction costs were for the building?.

The total project was about $113 million and the construction contract was $71 million..

Okay.

What are you seeing in terms of cost inflation around materials, labor, anything and availability of such? Anything that is troubling you or status quo?.

All of the above, Curtis. I think we all know that construction pricing has been pretty substantial here over the last nine months or even a year because of the closing of, for example, the closing of lumber mills in Canada, as demand for residential is skyrocketed. So there's been a lot of increases.

We've seen an increase in lumber go actually two to three folds. It's come back a little bit, but it's out there. Relative to our projects, all of the buying has taken place and we're in pretty good shape there. So now we're dealing in some instances with deliveries, but not necessarily cost increases because we're past that..

All right.

And then, just kind of a hypothetical, the administration's talking about changes to the tax laws, including potentially, changes to the 10-31, which I assume would have some impact to the real estate industry commercial real estate industry broadly in you folks? Would such a thing kind of impact your potential sale decisions and has management started thinking about this at all, would you, for example, re-examine the idea of converting to a REIT or would such a thing even makes sense? I realize I'm dealing in hypotheticals here, but any color on that or thoughts?.

I think it's a little early to tell, Curtis. A lot of the projects that we have ongoing right now are opportunities on projects where you're going to have to hold the projects for a minimum of at least through 2026. So not a whole lot we can do there. And they're all kind of grandfathered within the program that they're on.

So we're very opportunistic in our programming these days, and we look at each project and we'll try to make the best of every project we do as it relates to construction pricing efficiency, the quality of the program. And that's the primary goal as we get these complete, then we'll take a look at it then..

Thank you, Curtis. I think we've been hearing about the death knell of the 10-31 like on exchange for going on 40 years now. If it happens, it happens, but I think we have always been reluctant to let the tax tail wag the dog, so to speak. So we'll just sort of wait and see..

And we'll take our next question from Bill Chen with Rhizome Partners..

Question on the Marin that $10 million was so in taxes, tax provision, is that a cash provision or is that a gap?.

Bill. It's a deferred tax liability, not a non-cash..

Got you.

And the Brookfield, I know that's kind of been an asset that hasn't really been front and center, but given everything that's happening in Florida and the net migration to Florida, is there any timeline for the development of that asset in the next three years, or away beyond that?.

I think it would be beyond that. Brookfield happened in the last real estate boom when Hernando County seemed about as hot a place as there was, and then it wasn't.

And I think for a long time, we've been happy to get the mining royalties there, and it was sort of a one day, but not today and you are correct that our thinking on that has somewhat changed as people have been moving to Florida for a long time. But they've really been moving to Florida in the last year.

And so we have started to just put out feelers and do some market studies on that market and piece of property way more than we had in the years previously. So nothing concrete, but it's definitely become more front and center in our thinking than, than say a year or so ago..

Yes.

Can you remind me, what has been zoned for lots or we got to take that through an amendment process?.

It's zoned for residential. We have a DRI in place, and it's also zoned for a couple of golf courses, but, sort of beyond preliminary stuff, we'd have to build all the infrastructure and everything like that..

Got you..

Bill, just to add. It's kind of a master plan as much as a bubble diagram that has pods of different types of uses. You can't really call it a planned unit of development, but it's a massive concept land that takes over just about every type of actual asset class..

And then I'll give a little bit of background. I'm no stranger to investing in master plan communities. I think someone once told me that at early on, it's literally just a sketch on the napkin. And as time progressed, you can get more granular. But if I remember correctly, that's like a 4,000 acre site.

So if like any -- if you want like how many lots, like if we were to put up on the air and just say like is that a 10,000 community condo site potentially or something -- some ballpark would be helpful in terms of understanding what the potential value maybe..

I don't think we have enough there to know, Bill. At one time it was substantial, but we aren’t really far enough along to get into that..

Got you. And my last question on would be on the reconversion. We did a lot of work back in 2017/2018 to convert FRP into a REIT.

And as I look forward, about a year or three from now, with the Bryant Street coming online and 1800 Catholic coming online, and some of the projects in Greenville coming online, I backed into what I think the NOI and FFOs could potentially be from some of those projects.

It seems like it makes sense in 2020, late 2022 or 2023 to do kind of not revisit, or maybe that's a timing because that actually will bring cash flow to distribute to shareholders.

And then thoughts on that?.

Was the question on whether or not we're thinking of becoming a REIT as we add more multi-family?.

Yes. As the multi-family stabilize and gets leased up..

Yes. Probably not. I think one of the issues that we ran into every time we looked at a reconversion was, our mining royalty income is considered a nonreadable income for whatever arcane tax reasons and I believe only a quarter of your income can be nonreadable.

So that was back when we were generating a lot of income from our warehouses and had lower mining royalty income. And obviously that situation has flipped substantially. So I think that you will obviously continue to just explore whatever options make the most no sense.

We would never rule anything out, but I would say don't hold your breath on a re-election..

I was not aware of that 25% rule. And now that you mentioned that, it makes a lot of sense why the Company was moving forward back in that point 2017 timeline, because the warehouse was, if I remember correctly about 21 million of NOI and the royalty were a smaller portion back then. I have no further questions..

And we'll take our next question. This comes from John Deysher with Pinnacle Value..

Back to the 1031 exchange discussion.

I realize that you're kind of in a wait and see position with the rest of us, but can you remind us which of the current properties you have or acquired with some element of 1031 exchange embedded in it?.

The property we just acquired around our warehouse, the crouch property is a 1031.

And I don't recall, David, can you recall any of the other properties that are 1031?.

Hickory Creek was part of a 1031 until it [indiscernible] statutory trust. And that's about it. [indiscernible].

Hampstead, yes. Hampstead is part of 1033 and then as John Milton mentioned, the property that we bought at Crouse is a 1031, and then Hickory Creek..

So just to recap, the Crouse property and Hickory Creek, were they only 1031 exchange properties in the current portfolio?.

And Hampstead, our 118-acre residential development project..

We'd have to get back with you on that..

Yes..

Okay, and it doesn't seem like a 1031 exchanges are an overwhelming portion of the current portfolio..

That's correct..

[Operator Instructions] We'll take our next question from Stephen Farrell with Oppenheimer..

You mentioned that the 57% lease and the Coda, which is up pretty significantly since the end of the quarter. And you've mentioned that the trap had increased.

What type of competition are you seeing in the surrounding area around Bryant Street?.

Well, there's competition kind of everywhere throughout that area, Stephen. And I think the thing that we believe that we have a little bit of an advantage is because especially as time goes on, as we are literally right at the entrance to the red line there. And we're also adjacent to the bike trail.

And we also, because of its size and critical mass, you can create a real sense of place at Bryant Street. If you watch the annual presentation or more importantly, we would invite you and everyone on the call to visit our revamped website, www.frpdev.com.

And you can see by looking at the pictures that we create this sense of place within the four buildings. And so we have a lot of outside activities and activated areas. Which a lot of places don't have, and we think that's going to bode really well for us as we move forward..

And in the surrounding area there, you seeing sort of a lull in construction or new projects coming online around when the next three buildings are going to be completed? Can you give any color on that?.

The next three buildings are within months of being completed, actually, so we're close to being completed from a construction standpoint. There's cranes in the air everywhere and has been for a while in DC.

So it's really kind of hard to say, but once again, we have our property management group Bozzuto is doing a great job through its software program. Literally looking at every apartment that comes online and how it's been leasing. We've actually reduced the discount that we were given by half of one over the last several weeks.

So actually, sometimes competition really helps. You're no longer a pioneer in there, you're just becoming part of the city. So in some instances it actually can help. But again, we believe because of the retail component that we have, that that's really going to benefit our apartments..

And I've checked out the Coda website.

And actually after I started seeing ads and I've seen ads on Google search and across banners on other websites, what is the overall advertising strategy for the property?.

Stephen, I haven't spoken to our property manager. I think there's three active campaigns. It's people who have, either live or have toured some of the surrounding competition, there's site retargeting, people who've visited the Coda's website and then search retargeting people of search keywords related to the Coda and Bryant Street..

And what type of return are you expecting from the online advertising? You said you've reduced the discount. And so I'm guessing you're seeing strong demand.

How do you quantify any return from online advertising?.

In terms of like a cost per acquisition, is that where you're looking for?.

Yes..

Just what kind of hit rates you generate. I think for the streaming or online advertising, it's like $56, $57 per acquisition. It's a little bit higher than Facebook advertising, which is $42. But I think that the streaming is a little more effective and certainly more effective than like print advertising.

But I mean, to give you an idea, you could put out like 18,000 commercial views and you get 19 of those people walking onto the property. So you got to put yourself out there to generate any kind of traction..

Great. Thank you.

And it was mentioned earlier on the call that the increase in labor costs and raw materials, does that change the development of the Aberdeen property at all in the future? Are you looking, any acquisitions or ad-ons, would it be more brownfield, existing developments?.

We look at all developments. We have a tremendous amount of people out on the street that are kind of looking for us. And so we just look at each one as it comes along. And I think location is probably the single most important piece of it.

The number one, number two, from a value add standpoint, it's kind of the pound per foot that we're not going to pay too much going in. And we also look to buy land since we've been doing it for I'm embarrassed to say almost 40 years, pretty good at picking parcels that we feel are properly priced.

And then we'll let the market decide what and when and how we're going to build the buildings depending on what they are going forward..

And at this time we have no further questions. I would now like to turn the call back to Mr. Baker for any closing and final remarks..

Since there are no further questions, we would just like to thank everyone for their continued interest in the Company. Appreciate all..

Thank you. Ladies and gentlemen, this concludes today's conference. We thank you for your attendance and participation. You may now disconnect..