The St. Joe (JOE) Q3 2025 Earnings Call Transcript

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Date

Thursday, October 30, 2025 at 11 a.m. ET

Call participants

President, Chief Executive Officer, and Chairman — Jorge Luis Gonzalez

Chief Financial Officer — Marek Bakun

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Takeaways

Total Revenue Growth -- 63% increase in revenue for 2025 compared to 2024.

Net Income Growth -- 130% increase in net income for 2025 compared to 2024.

Residential Revenue -- Residential real estate revenue grew by 94% to $36.8 million from $19 million for 2025 compared to 2024.

Average Home Site Price -- Increased to $150,000 from $86,000, attributed mainly to mix, for 2025 compared to 2024.

Residential Gross Margin -- Rose to 53% from 39% for 2025 compared to 2024.

Leasing Revenue -- Leasing revenue increased by 7% to an all-time quarterly record of $16.7 million.

Hospitality Revenue -- Achieved an all-time third-quarter high of $60.6 million, up 9% year-over-year for Q3 2025.

Residential Contracted Units -- 1,992 units at the end of Q3 2025, up from 1,381 at the end of Q3 2024.

Residential Pipeline -- Over 24,000 entitled units in various development stages noted for strategic flexibility.

Commercial Leases -- 83 lease transactions (40 new, 43 renewals) during the first nine months of 2025, compared with 53 in the prior year.

Watercrest Senior Living Sale -- Sold for $41 million (7.7 acres) in Q3 2025, generating a $19.4 million gross profit; the property was originally appraised at $2.7 million in 2019.

Share Repurchases -- $24.9 million repurchased in the first nine months of 2025, up from zero in the same period of 2024; $8.7 million was repurchased in Q3 2025.

Outstanding Shares -- Outstanding shares are now below 58 million, the lowest in nearly 30 years as of Q3 2025.

Quarterly Dividend -- Announced a 14% increase to $0.16 per share for Q3 2025, payable December 12.

Debt Reduction -- $28.4 million in project debt reduction for Q3 2025, including $19.2 million related to a loan payoff following the Watercrest sale.

Available Cash -- Management reported a cash position of $126 million as of Q3 2025.

Recurring Revenue Detail -- Hospitality revenue was $169 million for the first nine months of 2025, up from $157 million in the prior year; leasing revenue was $49.4 million, compared to $44.7 million in the prior year.

CapEx -- $20.4 million for capital expenditures in the third quarter.

Nonstop Flights -- New daily ECP-to-LaGuardia nonstop added, increasing access to population centers.

Townhome Strategy Shift -- 46 Waterfront Origins Crossings townhomes transitioning from leasing to staged sales, with 14 already sold.

Summary

Management emphasized a measured, multifaceted capital allocation approach, prioritizing share repurchases, strategic asset monetization, and dividends as recurring elements. The company clarified its intent to monetize select operating properties and nonstrategic timberlands when market conditions align, with proceeds supporting future reinvestment. Recent increases in home site pricing (to $150,000 from $86,000) and residential gross margins (to 53% from 39%) in Q3 2025 were discussed as being primarily mix-driven, rather than the result of discounting or broad price increases. The successful Watercrest Senior Living sale reinforced a strategy of developing assets for both recurring revenue and opportunistic monetization. Management maintained flexibility in its residential pipeline and outlined continued expansion strategies in hospitality and commercial leasing, particularly focusing on town center developments. Strategic benefits from enhanced air connectivity and ongoing talks with builders point to continued efforts to expand market reach and enhance asset values.

Gonzalez said, "share repurchase is a priority for us as we have said a number of times," highlighting capital allocation strategy rigor.

Bakun described recent leasing results as "the biggest single quarter we have had in leasing in the history of the company for Q3 2025." for commercial.

Management confirmed no discounting in residential home site pricing across communities and stressed targeted negotiation with builders to preserve margins.

Expansion in the Windmark Beach community continues, aided by a builder-driven approach and the potential to reach nearly a thousand units.

Development of the FSU TMH academic health center is positioned as a catalyst for economic growth and institutional demand in the company's core region.

Plans for future announcements about national brand attraction at Watersound Town Center were mentioned as upcoming catalysts.

Industry glossary

DSAP: Development of Regional Impact Specific Area Plan; a regulatory planning designation for land development in Florida enabling phased growth and entitlements.

Takedowns: Contractual purchase schedule allowing homebuilders to close on home sites in phases or intervals as developments progress.

FSU TMH health campus: Joint healthcare initiative between Florida State University (FSU) and Tallahassee Memorial HealthCare, positioned as an academic medical center within St. Joe development holdings.

Full Conference Call Transcript

Jorge Luis Gonzalez: Thank you, and good morning. I am Jorge Luis Gonzalez, President, CEO, and Chairman of The St. Joe Company. It is my pleasure to welcome you to our quarterly earnings release. I am joined today by Marek Bakun, our Chief Financial Officer. Yesterday afternoon, after the market closed, we issued our third quarter 2025 earnings release, which can be found in the Investor Relations portion of our website at joe.com. This morning, we continue our commitment to quarterly earnings calls to provide our shareholders and the investor community with an opportunity to ask questions about our business and performance. We have always been an open and transparent company that welcomes all feedback and opinions.

Because of the types of assets that we own, we encourage shareholders to visit us in person so they can assess the progress of the region and of our company. Before we begin, I would like to remind everyone that today's press release and the statements made during this call include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are subject to risks and uncertainties that could cause actual results to differ materially from our expectations and projections. Such risks and uncertainties include the factors set forth in the earnings release and in our filings with the Securities and Exchange Commission.

Additionally, during today's call, we will discuss non-GAAP measures which we believe can be useful in evaluating our performance. A reconciliation of these measures can be found in our earnings release. Let's go ahead and get started. We assume everyone has already carefully reviewed our earnings release, which provides comprehensive details about our performance. So I am only going to mention a few key highlights before we move on to your questions. For 2025, we showed solid performance with 63% growth in revenue and 130% growth in net income when compared to 2024. Residential real estate revenue grew by 94% to $36.8 million from $19 million.

The average home site base price increased to $150,000 from $86,000, and the gross margin increased to 53% from 39%. We also continued to grow recurring revenue with leasing revenue increasing by 7% to an all-time quarterly record of $16.7 million and hospitality revenue increasing by 9% to an all-time third quarter record of $60.6 million. Our leasing and residential pipelines are also growing. For the first nine months of 2025, we executed 40 new commercial leases and renewed 43 existing leases for a total of 83, compared to 26 new leases and 27 renewals for a total of 53 during the same period in 2024.

At the end of the third quarter, we had 1,992 residential units under contract, compared to 1,381 for the same period in 2024. We have over 24,000 entitled units in our residential pipeline in various stages of planning, engineering, permitting, or development. This pipeline includes a wide range of locations, products, and pricing which gives us the flexibility to respond to the ebb and flow of market conditions. Included in commercial real estate revenue for the third quarter is the sale of Watercrest Senior Living to one of the nation's largest senior living REITs. This sale is part of our core business, and an example of how we create value by developing successful operating properties.

The land encompassed approximately 7.7 acres and was originally appraised in 2019 at approximately $2.7 million. After development and leasing of the property, ending in 2020, Watercrest was sold in the third quarter for $41 million, resulting in a gross profit of $19.4 million. Senior living is an asset type that is needed for the regional ecosystem. It is not an asset type we plan to grow as part of our commercial leasing portfolio because these types of assets take longer to lease than multifamily and because they entail considerable operational intensity.

The sale of Watercrest is an example of how our operating properties generate recurring revenue but they are also piggy banks that can be monetized with the right set of circumstances. We anticipate continuing to create asset value by developing operating properties which we may own for recurring revenue or choose to monetize and reinvest strategic capital allocation. We will also continue to evaluate nonstrategic timberlands for opportunities to monetize and reinvest for strategic capital allocation. For the third quarter, we continued to execute a measured and multifaceted capital allocation strategy with $20.4 million for capital expenditures, $8.7 million for share repurchase, $8.1 million for cash dividends, and $28.4 million for project debt reduction.

It is important to remember that the exact capital allocations will vary from quarter to quarter based on the circumstances of that quarter. For example, in the third quarter, project debt reduction includes $19.2 million for the loan payoff associated with the sale of Watercrest. With the $8.7 million in share repurchase for the third quarter, we are at $24.9 million in share repurchases through the first nine months of 2025, compared to zero share repurchases through the first nine months of 2024, which is a significant year-over-year acceleration. The outstanding share balance is now below 58 million for the first time in nearly thirty years.

In the third quarter, we announced a 14% increase in the quarterly dividend to $0.16 per share payable on December 12, to all shareholders of record as of the close of business on November 13. Since we started this dividend program in 2020, we have increased dividend payments by 129%. Beyond the numbers, we are excited about the new daily nonstop flights between Northwest Florida Beaches International Airport, ECP, and LaGuardia Airport in New York City, which is the largest metropolitan statistical area in the country, with a population of approximately 20 million people. The company is poised to leverage new opportunities by expanding marketing efforts to promote the quality of the Watersound lifestyle to this large population base.

With this new flight, ECP now has nonstop flights to seven of the 10 largest metropolitan statistical areas in the country. Now, Marek and I are going to answer your questions. As a reminder, in the top right-hand corner of your screen, the words "submit a question" are visible. Clicking that text will take you to the text entry box where you can type your question and click submit.

Marek Bakun: Yes. Good morning.

Jorge Luis Gonzalez: We have already received a number of questions, so we will go ahead and start with the first one.

Marek Bakun: At the current buyback rate,

Jorge Luis Gonzalez: the company is repurchasing around 1% of the company on an annual basis. We have $126 million of cash. Our recurring income continues to increase. Our outstanding debt has declined by over $50 million, and the capital intensity of our business continues to decline. Management deserves

Park Brady: all of the credit here. Why are we building our cash balance rather than investing and, I am sorry, rather than increasing the pace of our buybacks?

Jorge Luis Gonzalez: That is a great question. I appreciate the question. And in many ways, it outlines all the positive things that are happening in the company at this moment. Having cash is a high-class problem. And we have been generating real cash, not through gimmicks or short-term financial engineering techniques. Many other companies, to be honest with you, wish that they had the same high-class problem. So we are very happy with the way that the company is generating cash. It is something that we started planning years ago. And the execution that we have had has essentially created the situation for us.

Having said all that, share repurchase is a priority for us as we have said a number of times. As part of our capital allocation strategy. Evidence of how much of a priority it is something I mentioned in the opening remarks. Through the first nine months of 2025, we have invested $25 million in share repurchase when compared to $0 for the same nine months in 2024. Even after the third quarter, we have continued to repurchase shares. And something that is important to think about, really, the largest liquidity or cash event we had in the third quarter, the sale of Watercrest, occurred literally a couple of days at the end of the third quarter.

Park Brady: Next question. Over the last year, there have been several land real estate transactions. The discretion is severe. Does several land real estate transaction Bay and Walton Counties? At valuation that would support an NAV that is materially higher than the current stock price. It seems there could be several more opportunities to either sell land or additional assets that are either outside of the Baywalking sector plan

Jorge Luis Gonzalez: or where the major appreciation has already occurred.

Park Brady: Why not sell more of these assets? At values that are materially material relative to a current market cap and use the proceeds to meaningfully reduce a share count while we continue to own a century worth of future developable land.

Jorge Luis Gonzalez: As I mentioned, great question again. As I mentioned in my opening remarks, we are continuing to evaluate not only our operating properties but timberlands in our portfolio to determine which ones create the best opportunity for us to monetize and reallocate those resources into more strategic capital allocation strategies. What we are not going to do is

Park Brady: sell assets at a discount.

Jorge Luis Gonzalez: We are going to make sure that we get the value that our shareholders deserve when we monetize our assets, whether they are operating properties or timberlands.

Park Brady: So next question. Great quarter. Joe continues to shine in a sector that has seen some softness. Where does the company see cash levels twelve to eighteen months from now? Also, noting that the company has done some heavy lifting with CapEx during previous quarters, and we are on a side of reaping revenues from that CapEx. Also, what are the regulatory hurdles execution, restrictions, when the company is buying back its own shares? Also, what cash levels does the company feel comfortable with?

Jorge Luis Gonzalez: Great question. That is certainly a question from somebody who has followed the company for a long time and understands the evolution of the company. Let me make sure I can answer all the subcomponents of the question. If I miss any, Marek can chime in. So the first one is where does the company see cash levels twelve to twenty months from now? It is really going to depend on facts and circumstances. Where are we in the evolution of the company, where are we in our capital allocation strategy? What are the macroeconomic conditions, what are the microeconomic conditions? Certainly, as we have stated many times, we view our capital allocation strategy as being measured and multifaceted.

Our capital allocation strategy is not singular, to save cash. Certainly, capital expenditures are a part of it. Share repurchase is a part of it. Dividends are a part of it. And project debt reduction is a part of it. The next question or sub-question is, what are the regulatory hurdles execution restrictions when companies buying back its own shares? There are a series of requirements that we have to abide by and navigate, and a lot of that depends on the open and close periods. And when we can purchase in the open and close periods. There are different requirements for each one.

That is part of something that we consider in our capital allocation strategy, and that is one of the reasons why we mentioned and I mentioned in my opening remarks, that quarter-to-quarter capital allocation may be different. But, again, share repurchase is a priority for us as part of our capital allocation strategy. The last part of the question is what cash levels does the company feel comfortable with? And the answer to that is similar to the answer to the first question. It just depends on facts and circumstances, what is happening at macroeconomic levels, micro, where we are in the seeding and harvesting process of our residential home sites.

As anybody who has managed a diversified real estate operating company knows, liquidity is important. It is important for many reasons. So, we obviously want to maintain liquidity, but we also want to make sure that we continue our capital allocation strategy in a way that creates the best returns for our shareholders.

Marek Bakun: Yep. And, Jorge, Jorge talks about the seeding and harvesting.

Park Brady: It is definitely great to see the harvesting and what you saw in this quarter is the growth in cash from some of the harvesting. It also allowed for us to accelerate repurchases and increase dividends to our shareholders. Moving on to the next question. Great execution and appreciate the color and philosophy around Watercrest. Any progress update on the talks with a large-scale builder interested in the entire Pigeon Creek DSAP?

Jorge Luis Gonzalez: Those talks are ongoing. We do not have anything specific to report at this moment in time. But we are encouraged with the progress that has been made in those talks.

Park Brady: So next question. We have stayed in one of your beautiful twin beachfront vacation homes in Panama City Beach. Great place for the family, by the way. We loved it. Just wondering if there are any plans for the beachfront lots about a block east which also includes several acres across the street. I think it is called Wave Runner. So the project is actually called WaveCrest internally, so close. On that stuff. And it is a well-located property, very close, including frontage on the beach, just east of those two homes that are mentioned in this question.

If you look at the map directly to the north is a lot of our land holdings on the other side of 98, which if you look at the presentation we did at the shareholder meeting, had a couple DSAPs. That is a future growth area. Clearly, having that growth to the north will continue to add value to this property that we have right at the beach directly south of there. And if I could just quickly add to that, the Watercrest property

Jorge Luis Gonzalez: that we are talking about, has a pretty significant amount of frontage on the Gulf Of Mexico. That frontage does not get created every day. So we have been very thoughtful about what are the highest and best uses for that property. We have been evaluating it for quite some time. Because it is a property that is unique. By fronting in the Gulf Of Mexico. And when we reach a conclusion of what the highest and best use is for that property, that can create synergy, like Marek mentioned, with potentially other more inland landholdings, we will execute that strategy.

Park Brady: Okay. Next question. Has management identified or received interest in additional opportunities to monetize some of the assets within the hospitality or leasing segments? Like I mentioned in my opening remarks,

Jorge Luis Gonzalez: we are constantly evaluating all of our assets, whether they are operating properties or timberlands, to determine what is the best strategy. Hold and continue to receive recurring revenue or monetize like we did with Watercrest. So, yes, it is a dialogue that we have. And it is an evaluation that is ongoing.

Park Brady: Given to look through implied piggy banks, would you consider increasing the pace of the measured capital allocation via share repurchases? So we continue to, as Jorge stated in his press release, we continue to look at our assets, the piggy banks, as Jorge mentioned. We also look at the cash and look at the forward cash to see what opportunities to continue to adjust to our measured capital allocation. As Jorge mentioned in his opening statement, we have increased this year's repurchases compared to prior years. Because we always look and evaluate our overall capital allocation strategy.

Marek Bakun: Okay? The company has 46 completed townhomes at Waterfront Origins Crossings with only 14 leased.

Park Brady: Are all of the currently unleased townhomes up for sale? So we are no longer executing long-term leases. It is our intent over time to go ahead and sell the remaining 46 townhomes that we have in there. So the 14 that you mentioned have already transacted. So we are managing the leases in order to be able to manage sales. Yeah. And if I could add,

Jorge Luis Gonzalez: we made a decision because we thought it would create the best value to sell the townhouses one at a time as opposed to selling the townhouses as a portfolio. And so far, that has proven out to be true. We have had good success in selling the townhouses at the price levels that we anticipated. And we are going to continue doing that. So as Marek mentioned, that is an asset that we are gradually transitioning from a commercial leasing asset into a residential real estate sales.

Park Brady: Okay. Seems like there has been a significant uptick in lot sales at Windmark Beach. The community has expanded quite a bit over the past five years. Can you talk about what is going on there? Is there an area maybe hitting an inflection point? Is there an ability to expand the scale of the community in the future? So we have been very pleased

Jorge Luis Gonzalez: when we executed a new strategy for Windmark several years ago. In Windmark, we were selling originally lots or home sites on a retail basis. And we made a decision that was a very difficult strategy to execute in that location. I believe at the time, we were selling two or three lots per year. It is a location that is challenging for folks who are not from that area to purchase a home site, find a builder. So what we decided when we changed the strategy in Windmark was that we would get volume and absorption if we transition Windmark into a builder program. And particularly a builder that would initially build a lot of spec homes.

Because we thought keys would sell a lot better for consumers than going through the mechanics of buying a lot and finding a custom home builder. That strategy has turned out to be true. It has been very successful. We have been selling a lot of home sites, and our builder in Windmark has been selling a lot of homes. We still have quite a few to go in Windmark. And we also own surrounding properties. That if the trend continues, we will have opportunities to expand the program. Yep. And, Jorge, just to add to that, there are about 800 developed lots.

Most of them are now homes, and there are a couple hundred more lots currently under development in there. So it will be very close to a thousand units in the Windmark community within a reasonable period of time. Absolutely. And, just a quick follow-up. In

Jorge Luis Gonzalez: the original Windmark master plan, there was a plan for a golf course. That is a potential area that we can look at transitioning into other higher and best uses.

Marek Bakun: Okay. Next question. Early reads

Park Brady: commentary from Discover Water Sound Weekend. Nice concept. So, again, it is just a comment. It is one of the events that we have a lot of good events for that to really showcase the beautiful that are developing in that area. Was also a, you know, five and ten k run, which is nicely attended. It is really a fun event, and the weather was magnificent for us. So it really was a great weekend. Encourage everybody to come out next time. You saw a big jump in average home site price this quarter. Roughly $150,000 versus around $86,000 last year.

Could you help us understand how much of that was driven by mix versus genuine like-to-like pricing strength and whether you think these margins are sustainable into 2026.

Jorge Luis Gonzalez: We, in our queues and our earnings releases, we often say that our residential home site numbers quarter to quarter are based on the mix that we have in that particular quarter. We have a lot of active residential communities. Those communities offer a wide range of pricing, product, lifestyles. We have a wide range of margins. So we always caution shareholders when they look at our residential home site figures to look beyond quarter to quarter and look at the trends, particularly over a twelve-month or twenty-four-month period.

One of the reasons why we have deliberately diversified our residential segment with residential communities that offer a wide range of price points and products is because each community behaves differently in different economic times. Which is a great portfolio to have. For example, our higher-end communities like Camp Creek tend to be more agnostic to interest rates, mortgage interest rates. Because the type of consumer that is purchasing that product is probably more focused on how, for example, the stock market is doing. So, really, it has more to do with the mix of what closings we had in any particular moment than anything else. Marek? Yes. Just to add, in our shareholder meeting that we did in May,

Park Brady: we did provide some history on margins on our residential, and they have been around that 50% mark for a number of years. And as Jorge just mentioned, different communities with different price points do have different margins. And we also place, you know, a lot under contract that sometimes, in most cases, span longer than a twelve-month period. So you have to look at the community, the contract,

Jorge Luis Gonzalez: how phasing works to kind of get the

Park Brady: more specific numbers. But as if you look back historically, we have been closer to that 50% margins on residential lots.

Marek Bakun: Could you estimate

Park Brady: cumulative capital spending over the next three to five years assuming it does not grow very significantly, I would echo the sentiment in favor of repurchasing more shares.

Jorge Luis Gonzalez: Like I mentioned in answering one of the earlier questions, we have the high-class problem of our operations generating actual cash. And generating actual cash in executing a strategy that we have been consistently executing for many years now. Capital allocation, again, we view it as a multifaceted strategy, and share repurchase is a priority for us.

Marek Bakun: Yep. Okay. What is The St. Joe's estimate of the current value of its land inventory

Park Brady: at the 2025? What is The St. Joe's estimate of its recurring revenue at the 2025?

Marek Bakun: I will start with the last

Jorge Luis Gonzalez: part. I think the recurring revenue, that is an easy calculation to make. And I think Marek can maybe give you some high-level number of that because, really, our hospitality revenue and our leasing revenue are the two traditional recurring revenue types. In terms of the land valuation, we, in our annual meeting, we did provide, for the first time ever, a snapshot of the valuation range done by a third party, of our operating properties. We mentioned at that meeting that we were going to be working on a similar approach for our timberlands, our land holdings. That is something that is currently in process.

Park Brady: Yep. Yep. Jorge, you are exactly right. We do disclose both the growth and recurring revenue which we hospitality and leasing, just, for you mentioned, in your opening both, the commercial at 6.7% was the biggest single quarter. That we have had in leasing in the history of the company. And then the $60.6 million in hospitality for the quarter was the biggest third quarter. We have seasonality, so usually quarter two is a little bit bigger than that. For Q3, this was the biggest. So, for recurring, just to answer the question, is $169 million hospitality for nine months compared to $157 million last year. And then in leasing was $49.4 million versus $44.7 million.

Well, who is going to be the builder for LLP three? And I think that is Longleaf Park three.

Jorge Luis Gonzalez: So that phase of Watersound Origins is what we call Watersound Origins West. We have several different phases at various stages in our pipeline. From engineering to permitting, to development. Our plan in Origins West is to continue the same strategy we had in Origins. Which is to have a group of builders that are semi-custom builders, custom builders, that will create a product that is unique in our region. By offering different floor plans, different approaches to elevations. We do not intend to change the strategy that we have had at Watersound Origins. By just having one builder. We intend to continue the same strategy by having multiple builders.

Just like Origins, our intent is for Watersound Origins West after it is completed and the homes are built for it to feel, look and feel like a custom or semi-custom neighborhood.

Marek Bakun: Okay. Average home site sale price of $150,000 versus $86,000 is a significant jump.

Park Brady: How can you help me understand that increase? How and how should we be thinking about this going forward?

Jorge Luis Gonzalez: Yeah. I think the answer is similar to the previous couple of answers I have given, and we have consistently mentioned this in all of our disclosures. Our residential home site numbers are primarily driven by timing and mixture of communities.

Park Brady: Okay. Can you highlight with respect to the ebb and flow of the development cycle where hospitality and leasing is? For context, it seems the heavy load of investment from 2018 through 2024 period is concluded and the hypergrowth is waning. People continue to view abating growth numbers in these segments as a sign of slowdown rather than simply development cycle. Is there any color on when you expect growth to accelerate there? So, yes, we went

Jorge Luis Gonzalez: through an exponential growth period, particularly in hospitality. As an example, we opened five new hotels in a twelve-month calendar period. Which is pretty amazing when you consider that hospitality assets are operating assets and not real estate assets. We continue to believe that there are market opportunities for us to continue to expand the hospitality segment. We have different concepts at different stages of planning in engineering and design and permitting. As to whether we will exactly match the same pace that we had in that one year, that is hard to say. It is really a function of where we are in evaluating those projects.

But we still have plans to continue to expand the hospitality segment, at the right time and with the right product and right location. As in terms of commercial leasing, we have, as we have been mentioning in all of our disclosures for a couple of years now, we are particularly focused in our Watersound Town Center. In our West Bay, Town Center. And in our FSU TMH health campus. Just those three areas alone have the potential to more than double our commercial leasing portfolio. And the way that you create valuable leasing assets is not by just looking up and down a road like 98 and doing a series of strict commercial centers.

You are never going to get the high leasing rates and create the value in those portfolios that we are trying to create. Our strategy to focus on those town centers is very deliberate. And very measured. Because we believe if we focus on those town centers, we are going to create portfolios with the highest leasing rates in our region.

Park Brady: Yeah.

Jorge Luis Gonzalez: And then, one last quick thing. In the Watersound Town Center, we have mentioned this in the last couple of quarters. We have had a particular focus on attracting national apparel brands to the Watersound Town Center. Particularly in the building that we have under construction. And we have been pretty pleased with the progress we have made in attracting those brands to the Watersound Town Center. And we plan on making some announcements about our progress in the near future.

Park Brady: Yep.

Jorge Luis Gonzalez: Can you talk generally about pricing and the level of discounting versus a year ago? Kudos on a great performance.

Jorge Luis Gonzalez: Not sure if that pricing in terms of home sites, well, we really have not been discounting any of our pricing. So from a residential home site perspective across all of our residential communities, we do not discount pricing. We have a pretty good feel for what pricing we want to achieve to achieve our margins in every residential community. When we negotiate with our homebuilders and our builder programs, pricing, pace, number of takedowns per quarter, product type, because we want to make sure we do not have two builders in the same community building the exact same product to capitalize each other.

So those are all the things that we discuss when we negotiate builder takedown agreements with our builders. But, again, if the individual who asked the question meant home site pricing, we really have not been discounting home site pricing. Yep. Yeah. Jorge, just to add exactly what you just said, we

Park Brady: transact with homebuilders, and we have not been discussing. We have not been reducing any or discounting any of our prices. In your view, how far away is the area from becoming less of a secondary tertiary market

Marek Bakun: for both national builders and institutional real estate firms.

Park Brady: What else besides the hospital and direct flights is needed to get there? And are there any new signs emerging that you could share with us in terms of the area getting closer to that point? Well, every area grows, goes through a cycle of growth.

Jorge Luis Gonzalez: And, obviously, our area has been going through that growth. We have chronicled the growth rates in Bay and Walton County several times at our annual meetings. That growth continues. As we have often said, in order for the growth to continue, the ecosystem needs a series of assets. The hospital is one of those. And I am not sure everybody fully understands it is an academic health center model. With teaching, research, and clinical delivery. When you look at the health care landscape across the country, arguably, academic health centers are the most

Marek Bakun: successful.

Jorge Luis Gonzalez: Health care delivery systems in the country. And everywhere you look at one of those facilities, they are a significant economic engine in that market, and we feel very optimistic about what the academic health center with FSU Health is going to create in our market. And the medical campus happens to be almost literally in the middle of our land holdings. So we are excited about that. The question also referenced more direct flights. We strongly believe that the flights that are starting to the largest metropolitan statistical area in the country to New York City is also a big part of that. Because what it does, it creates more exposure to our area with a larger population base.

So the short answer to the question is we believe that we are trending in that direction. We certainly are growing. We are certainly exposing the area, both consumers and businesses, to a broader range of individuals and companies. We get phone calls from businesses who have an interest in being in our region that we used to not get a couple of years ago. In fact, probably a couple of years ago, we had a hard time getting them to return our phone calls. Now they are calling us. So we certainly see that trend evolving.

Marek Bakun: Yeah.

Park Brady: Now that the business is more on a run rate, when will you show more midterm and long-term financial frameworks, KPIs, long-term revenue, cash flows, and cash flows per share, etcetera? I think it is fair that we have always considered the importance of providing good information to our shareholders. We will continue to look at options that we have and how we can present information that we hope our shareholders appreciate and use. We have added a number of schedules to our MD and A disclosure on a quarterly basis that allows for hopefully consistent and recurring information that can be used to analyze our business.

Jorge Luis Gonzalez: Yeah. And if I could just add to that, the question is spot on. We, and, again, this was all by design and deliberate. By growing recurring revenue, and certainly that has grown. And when you look at that quarter to quarter, that run rate, there is a cadence emerging. And with that cadence, that is going to allow the investor community as well as the company to have more consistency in evaluating everything that was mentioned in the question, particularly cash flow.

Park Brady: Is it accurate to conclude that there is progress accelerating for home site pricing as older builder contracts conclude and new ones kick in? College Station, for instance, seems to see about a 50% increase in lot prices from 2022.

Jorge Luis Gonzalez: So we always, when we, it is obviously all based on market conditions. But our market here has been growing. As migration has been occurring. So every time we look at a new phase of one of our existing residential communities, whether it is with a new builder that we are bringing to the market or one of our existing builders, we obviously always try to increase the pricing of the home sites. Again, it is based on market conditions, and it varies from project to project and location to location. But that is a goal of ours.

Marek Bakun: Yep. So, Jorge, these were great questions from informed shareholders. There are no more in the queue.

Marek Bakun: Okay. Maybe let us wait just a couple of seconds to see if there are

Jorge Luis Gonzalez: any more questions that come in.

Park Brady: This call, so it looks like the last one here, this call is an incredible and highly unique example of shareholder transparency, engagement. On behalf of shareholders, thank you both for the continued opportunity to learn more about the company and engage with management.

Jorge Luis Gonzalez: We greatly appreciate the comment. We feel that we are transparent, and we are going to continue to be transparent in every way we can with our disclosures and our earnings calls. Again, thank you for joining us today. We appreciate your interest. We appreciate the great questions that were asked today. And we look forward to speaking with you again next quarter. Thank you.

Operator: This concludes today's conference call. Thanks for participating.

Marek Bakun: You may now disconnect.

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