ST JOE Co
For the period ended Mar 31, 2025. Filed Apr 23, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed Apr 23, 2025
JOE$69.97+0.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-10-23.
0001558370-24-013522
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-04-23.
0001558370-25-005281
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 203 previous paragraphs and 161 current paragraphs.
75 unchanged; 71 reworded; 10 added; 36 removed; 21 previous and 5 current paragraphs rearranged.
Tables are not compared: 74 previous and 62 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (10)
Current report
Commercial and Forestry Real Estate Revenue and Gross Profit. During the three months ended March 31, 2025, we had two commercial and forestry real estate sales totaling approximately 133 acres for $3.2 million, resulting in a gross profit of $3.1 million (or gross margin of 96.9%). During the three months ended March 31, 2024, we had two commercial and forestry real estate sales totaling approximately 76 acres for $1.4 million, resulting in a gross profit of $1.1 million (or gross margin of 78.6%).
Current report
Corporate and other operating expenses decreased $0.5 million to $6.6 million during the three months ended March 31, 2025, as compared to $7.1 million in the same period in 2024. The decrease was primarily due to employee costs related to bonuses, partially offset by an increase in professional fees.
Current report
Other Expense, Net
Current report
Other expense, net decreased $0.3 million to $0.2 million during the three months ended March 31, 2025, as compared to $0.5 million in the same period in 2024. Miscellaneous expense, net during the three months ended March 31, 2024, includes a $0.5 million net loss on disposal of assets. See Note 15.Other Income, Net for additional information.
Current report
The increase of $0.5 million in depreciation, depletion and amortization expense during the three months ended March 31, 2025, as compared to the same period in 2024, was primarily due to new properties placed in service.
Current report
During the three months ended March 31, 2025 and 2024 timber revenue and gross margin were comparable. There were 74,000 tons of wood products sold at an average price per ton of $14.61 during the three months ended March 31, 2025, as compared to 75,000 tons of wood products sold at an average price per ton of $14.83, during the same period in 2024.
Current report
The increase of $0.4 million in depreciation, depletion and amortization expense during the three months ended March 31, 2025, as compared to the same period in 2024, was primarily due to new properties placed in service.
Current report
maturity date was extended from March 2025 to February 2030. During the three months ended March 31, 2025, we incurred less than $0.1 million of additional loan costs due to the modification. The loan is secured by the real property and certain other Security Interests. See Note 8.Debt, Net for additional information.
Current report
In 2021, a wholly-owned subsidiary of ours entered into a loan, as amended. In February 2025, the North Bay Landing Loan was refinanced, which increased the principal amount of the loan to $27.8 million, fixed the interest rate to 5.9% and provides for monthly payments of principal and interest through maturity in March 2060. As of March 31, 2025 and December 31, 2024, $27.8 million and $22.7 million, respectively, was outstanding on the North Bay Landing Loan. The refinanced loan terms include a prepayment premium due to the lender of 1% - 10% for any principal that is prepaid through March 2035. The refinanced loan is insured by HUD and is secured by the real property and certain other Security Interests. During the three months ended March 31, 2025, we incurred $0.5 million of loan costs due to the refinance. The three months ended March 31, 2025 includes a less than $0.1 million loss on early extinguishment of debt related to unamortized debt issuance costs, included within other income, net on the condensed consolidated statements of income. See Note 8.Debt, Net for additional information.
Current report
As part of a certain sale of forestry land in 2014, we generated significant tax gains. The installment note’s structure allowed us to defer the resulting federal and state tax liability of $45.6 million until 2029, the maturity date for the installment note. We have a deferred tax liability related to the gain in connection with the sale. At the maturity date of the installment note in 2029, the $200.0 million time deposit included in investments held by special purpose entities will be used to pay the $180.0 million of principal for the Senior Notes held by special purpose entity and the remaining $20.0 million will become available to us, which can be used to pay a portion of the tax liability. See Note 5.Financial Instruments and Fair Value Measurementsfor additional information.
Removed paragraphs (36)
Previous report
Commercial and Forestry Real Estate Revenue and Gross Profit. During the three months ended September 30, 2024, we had three commercial and forestry real estate sales totaling approximately 25 acres for $7.3 million, resulting in a gross profit of $4.1 million (or gross margin of 56.2%). During the three months ended September 30, 2023, we had five commercial and forestry real estate sales totaling approximately 29 acres for $3.1 million and land improvement services of less than $0.1 million, together resulting in a gross profit of $1.8 million (or gross margin of 58.1%).
Previous report
During the nine months ended September 30, 2024, we had six commercial and forestry real estate sales totaling approximately 268 acres for $9.4 million, resulting in a gross profit of $5.8 million (or gross margin of 61.7%). During the nine months ended September 30, 2023, we had twenty-one commercial and forestry real estate sales totaling approximately 212 acres for $13.9 million and land improvement services of $0.3 million, together resulting in a gross profit of $8.2 million (or gross margin of 57.7%).
Previous report
Timber revenue decreased $1.1 million, or 27.5%, to $2.9 million during the nine months ended September 30, 2024, as compared to $4.0 million in the same period in 2023. The decrease was primarily due to a decrease in tons of wood products sold and prices in the current period. There were 186,000 tons of wood products sold at an average price per ton of $14.21 during the nine months ended September 30, 2024, as compared to 216,000 tons of wood products sold at an average price per ton of $16.62, during the same period in 2023. Timber gross margin was 79.3% during the nine months ended September 30, 2024, as compared to 85.0% during the same period in 2023. The decrease was primarily due to less tons of wood products sold and lower prices in the current period.
Previous report
Hospitality revenue increased $8.0 million, or 16.9%, to $55.4 million during the three months ended September 30, 2024, as compared to $47.4 million in the same period in 2023. The increase in hospitality revenue was primarily related to the growth in membership dues and membership ancillary spend, opening of new Camp Creek amenities in April 2023, as well as an increase in lodging revenue. The increase in lodging revenue was primarily related to Embassy Suites by Hilton Panama City Beach Resort, which opened in April 2023; and the Home2 Suites by Hilton Santa Rosa Beach, Hotel Indigo Panama City Marina and Camp Creek Inn, which all opened in June 2023. Hospitality
Previous report
had a gross margin of 34.1% during the three months ended September 30, 2024, compared to 23.8% during the same period in 2023. The increase in gross margin was primarily due to new assets being stabilized in the current period.
Previous report
Leasing revenue increased $2.5 million, or 19.1%, to $15.6 million during the three months ended September 30, 2024, as compared to $13.1 million in the same period in 2023. The increase was primarily due to new multi-family and commercial property leases, as well as other new leases. Leasing gross margin was 50.0% during the three months ended September 30, 2024, as compared to 48.1% during the same period in 2023. The increase in leasing gross margin was primarily due to new leases, as well as new assets being operational throughout the current period.
Previous report
Corporate and other operating expenses decreased $0.2 million to $6.0 million during the three months ended September 30, 2024, as compared to $6.2 million in the same period in 2023. Corporate and other operating expenses increased $1.5 million to $18.9 million during the nine months ended September 30, 2024, as compared to $17.4 million in the same period in 2023. The increases were primarily due to employee costs for bonuses and restricted stock awards. See Note 14.Stockholders’ Equity for additional information related to the issuance of common stock for employee compensation.
Previous report
Investment income, net was $3.5 million for the three months ended September 30, 2024, as compared to $3.6 million in the same period in 2023. Investment income, net increased $0.5 million to $10.3 million for the nine months ended September 30, 2024, as compared to $9.8 million in the same period in 2023. The increase was primarily due to the change in cash and cash equivalents held and higher interest rates earned in the current period. See Note 16.Other Income, Net* *for additional information.
Previous report
Gain on Contributions to Unconsolidated Joint Ventures
Previous report
Gain on contributions to unconsolidated joint ventures includes gain on additional infrastructure improvements contributed to our unconsolidated JVs as detailed in the table below. See Note 4.Joint Ventures for additional information.
Previous report
Other (Expense) Income, Net
Previous report
Other (expense) income, net decreased $1.3 million to expense of $0.1 million during the three months ended September 30, 2024, as compared to $1.2 million of income in the same period in 2023. Other (expense) income, net decreased $3.9 million to expense of $0.6 million during the nine months ended September 30, 2024, as compared to $3.3 million of income in the same period in 2023. Accretion income from retained interest investments includes
Previous report
accretion of investment income over the life of the retained interest using the effective yield method, prior to optional prepayment, in full, of the installment notes in August 2023. Miscellaneous (expense) income, net during the nine months ended September 30, 2024, includes a $0.6 million net loss on disposal of assets. Miscellaneous (expense) income, net during the three and nine months ended September 30, 2023, includes $0.5 million and $1.1 million, respectively, of income received from the Florida Division of Emergency Management’s TRBG program for recovery of lost income related to timber crop that was destroyed as a result of Hurricane Michael in 2018. Miscellaneous (expense) income, net during the nine months ended September 30, 2023, also includes a $0.4 million gain on retained interest investment. Miscellaneous (expense) income, net during the three and nine months ended September 30, 2023, includes $0.4 million and $0.6 million, respectively, of expense for cleanup of damaged timber as a result of Hurricane Michael. See Note 16.Other Income, Net for additional information.
Previous report
Income tax expense was $19.3 million during the nine months ended September 30, 2024, as compared to $21.7 million during the same period in 2023. Our effective tax rate was 25.9% for the nine months ended September 30, 2024, as compared to 25.2% during the same period in 2023.
Previous report
We did not have any gain on contributions to unconsolidated joint ventures for the three months ended September 30, 2024. Gain on contributions to unconsolidated joint ventures for the three months ended September 30, 2023, includes a gain of $0.1 million on additional infrastructure improvements contributed to our unconsolidated Latitude Margaritaville Watersound JV. See Note 4.Joint Ventures for additional information.
Previous report
Equity in income from unconsolidated joint ventures includes our proportionate share of earnings or losses of an unconsolidated JV accounted for by the equity method. Equity in income from unconsolidated joint ventures decreased $0.4 million during the three months ended September 30, 2024, as compared to the same period in 2023. The decrease was due to additional costs for warranties, construction supervision and higher Margaritaville trademark licensing fees in the current period, partially offset by a higher average margin per home sold during the current period related to our unconsolidated Latitude Margaritaville Watersound JV. The Latitude Margaritaville Watersound JV completed 189 home sale transactions during each of the three months ended September 30, 2024 and 2023. See Note 4.Joint Venturesfor additional information.
Previous report
*Land sales.*During the nine months ended September 30, 2024, we did not have any unimproved land sales. During the nine months ended September 30, 2023, we had unimproved residential land sales of $0.6 million, resulting in a gross margin of approximately 83.3%.
Previous report
Gain on contributions to unconsolidated joint ventures for the nine months ended September 30, 2024 and 2023, include a gain of less than $0.1 million and $0.6 million, respectively, on additional infrastructure improvements contributed to our unconsolidated Latitude Margaritaville Watersound JV. See Note 4.Joint Ventures for additional information.
Previous report
Revenue from our clubs increased $5.6 million, or 38.1%, during the three months ended September 30, 2024, as compared to the same period in 2023. The increase in revenue in the current period was due to growth in membership
Previous report
dues and membership ancillary spend, as well as the opening of new Camp Creek amenities in April 2023 and Camp Creek Inn in June 2023. Our clubs gross margin was 43.3% during the three months ended September 30, 2024, compared to 21.8% during the same period in 2023. The increase in gross margin was primarily due to new assets being stabilized during the current period.
Previous report
The increase of $0.3 million in depreciation, depletion and amortization expense during the three months ended September 30, 2024, as compared to the same period in 2023, was primarily due to new assets placed in service.
Previous report
Revenue from our hotel operations increased $16.6 million, or 23.9%, during the nine months ended September 30, 2024, as compared to the same period in 2023. The increase was primarily due to an increase in lodging revenue from Embassy Suites by Hilton Panama City Beach Resort, which opened in April 2023; The Lodge 30A, which opened in February 2023; and Home2 Suites by Hilton Santa Rosa Beach and Hotel Indigo Panama City Marina, which
Previous report
both opened in June 2023. Our hotels had a gross margin of 27.4% for the nine months ended September 30, 2024, compared to 18.3% during the same period in 2023. The increase in gross margin was primarily due to new assets being operational throughout the current period.
Previous report
Revenue from other hospitality operations increased $0.8 million, or 8.5%, during the nine months ended September 30, 2024, as compared to the same period in 2023. The increase was due to increased occupancy and special events at our Point South Marina Bay Point and Point South Marina Port St. Joe. Our other hospitality operations had a gross margin of 18.6% during the nine months ended September 30, 2024, compared to 20.2% during the same period in 2023. The decrease in gross margin was due to increased operational costs during the current period.
Previous report
The increase of $4.6 million in depreciation, depletion and amortization expense during the nine months ended September 30, 2024, as compared to the same period in 2023, was primarily due to new properties placed in service.
Previous report
Total leasing revenue increased $2.2 million, or 17.9%, during the three months ended September 30, 2024, as compared to the same period in 2023. The increase was primarily due to new multi-family and commercial property leases, as well as other new leases. Total leasing gross margin during the three months ended September 30, 2024 was 54.5%, as compared to 52.0% during the same period in 2023. The increase in leasing gross margin was primarily due to new leases, as well as new assets being operational throughout the current period.
Previous report
During the three months ended September 30, 2024, we had three commercial and forestry real estate sales of approximately 25 acres for $7.3 million resulting in a gross profit margin of approximately 56.2%. During the three months ended September 30, 2023, we had five commercial and forestry real estate sales of approximately 29 acres for $3.1 million and land improvement services of less than $0.1 million, together resulting in a gross margin of approximately 58.1%.
Previous report
Timber revenue decreased $0.3 million, or 30.0%, to $0.7 million during the three months ended September 30, 2024, as compared to $1.0 million during the same period in 2023. The decrease was primarily due to a decrease in tons of wood products sold and prices in the current period. There were 45,000 tons of wood products sold during the three months ended September 30, 2024, as compared to 48,000 tons of wood products sold during the same period in 2023. The average price of wood products sold decreased to $13.35 per ton during the three months ended September 30, 2024, as compared to $17.77 per ton during the same period in 2023. Timber gross margin was 71.4% during the three months ended September 30, 2024, as compared to 80.0% during the same period in 2023. The decrease was primarily due to less tons of wood products sold and lower prices in the current period.
Previous report
The increase of $0.8 million in depreciation, depletion and amortization expense during the three months ended September 30, 2024, as compared to the same period in 2023, was primarily due to new properties placed in service.
Previous report
Timber revenue decreased $1.1 million, or 27.5%, to $2.9 million during the nine months ended September 30, 2024, as compared to $4.0 million during the same period in 2023. The decrease was primarily due to a decrease in tons of wood products sold and prices in the current period. There were 186,000 tons of wood products sold during the nine months ended September 30, 2024, as compared to 216,000 tons of wood products sold during the same period in 2023. The average price of wood products sold decreased to $14.21 per ton during the nine months ended September 30, 2024, as compared to $16.62 per ton during the same period in 2023. Timber gross margin was 79.3% during the nine months ended September 30, 2024, as compared to 85.0% during the same period in 2023. The decrease was primarily due to less tons of wood products sold and lower prices in the current period.
Previous report
The increase of $2.1 million in depreciation, depletion and amortization expense during the nine months ended September 30, 2024, as compared to the same period in 2023, was primarily due to new properties placed in service.
Previous report
Other (expense) income, net during the nine months ended September 30, 2023, includes $1.1 million of income received from the Florida Division of Emergency Management’s TRBG program for recovery of lost income related to timber crop that was destroyed as a result of Hurricane Michael. Other (expense) income, net during the nine months ended September 30, 2023, includes $0.6 million of expense for cleanup of damaged timber as a result of Hurricane Michael.
Previous report
In 2020, a wholly-owned subsidiary of ours entered into a $5.8 million loan, which is guaranteed by us. As of both September 30, 2024 and December 31, 2023, $4.7 million was outstanding on the Self-Storage Facility Loan. The loan
Previous report
matures in November 2025 and bears interest at a rate of SOFR plus 2.5%, with a floor of 2.9%. The loan is secured by the real property and certain other Security Interests. Our liability as guarantor under the loan shall not exceed $2.9 million, plus any additional fees, with the project maintaining a certain debt service coverage. See Note 9.Debt, Net for additional information.
Previous report
In 2021, a wholly-owned subsidiary of ours entered into a $26.8 million loan, which is guaranteed by us. In August 2024, a wholly-owned subsidiary of ours entered into a modification of the loan that amended the principal amount of the loan to $22.9 million, adjusted the interest rate to SOFR plus 2.5%, with a floor of 3.2%, extended the maturity date by eighteen months and provides for monthly principal and interest payments with a final balloon payment at maturity in March 2026. As of September 30, 2024 and December 31, 2023, $22.9 million and $26.8 million, respectively, was outstanding on the North Bay Landing Loan. Upon reaching a certain debt service coverage ratio, the loan will bear interest at a rate of SOFR plus 2.3%, with a floor of 3.0%. The loan is secured by the real property and certain other Security Interests. As guarantor, our liability under the loan is 50% of the outstanding principal amount and will be reduced to 25% of the outstanding principal amount upon reaching and maintaining a certain debt service coverage ratio. In addition, the guarantee can become full recourse in the case of any fraud or intentional misrepresentation or failure to abide by other certain obligations on the part of such guarantor. See Note 9.Debt, Net for additional information. In May 2023, we began the process to make available the option to refinance the North Bay Landing Loan by seeking a loan commitment to be insured by HUD.
Previous report
Capital expenditures for operating property and property and equipment were $41.9 million and $111.8 million, during the nine months ended September 30, 2024 and 2023, respectively, which were primarily for our commercial and hospitality segments.
Reworded paragraphs (71)
Previous wording
St. Joe is a real estate development, asset management and operating company with all of its real estate assets and operations in Northwest Florida. We intend to use existing assets for residential, hospitality and commercial ventures. We have significant residential and commercial land-use entitlements. We actively seek higher and better uses for our real estate assets through a range of development activities. As part of our core business strategy, we have created a meaningful portion of our business through JVs and limited partnerships over the past several years. We enter into these arrangements for the purposes of developing real estate and other business activities, which we believe allows us to complement our growth strategy, leverage industry expertise and diversify our business. We may also partner with or explore the sale of discrete assets when we and/or others can better deploy resources. We seek to enhance the value of our owned real estate assets by developing residential, commercial and hospitality projects to meet market demand. Approximately 87% of our real estate is located in Florida’s Bay, Gulf, and Walton counties. Approximately 90% of our real estate land holdings are located within fifteen miles of the Gulf of Mexico.
Current wording
St. Joe is a diversified real estate development, asset management and operating company with all of its real estate assets and operations in Northwest Florida. We intend to use existing assets for residential, hospitality and commercial ventures. We have significant residential and commercial land-use entitlements. We actively seek higher and better uses for our real estate assets through a range of development activities. As part of our core business strategy, we have created a meaningful portion of our business through JVs. We enter into these arrangements for the purposes of developing real estate and other business activities, which we believe allows us to complement our growth strategy, leverage industry expertise and diversify our business. We may also partner with or explore the sale of discrete assets when we and/or others can better deploy resources. We seek to continue to enhance the value of our owned real estate assets by developing residential, commercial and hospitality projects to meet market demand. Approximately 87% of our real estate is located in Florida’s Bay, Gulf, and Walton counties. Approximately 90% of our real estate land holdings are located within fifteen miles of the Gulf of Mexico.
Previous wording
We believe our present capital structure, liquidity and land provide us with years of opportunities to increase recurring revenue and long-term value for our shareholders. We intend to focus on our core business activity of real estate development, asset management and operations. We continue to develop a broad range of asset types that we believe will provide acceptable rates of return, grow recurring revenues and support future business. Capital commitments will be funded with cash proceeds from completed projects, existing cash, owned-land, partner capital and financing arrangements. We do not anticipate immediate benefits from investments. Timing of projects may be subject to delays caused by factors beyond our control. We may also choose to operate rather than lease assets, lease rather than sell assets, or sell improved rather than unimproved land that may delay revenue and profits.
Current wording
We believe our present capital structure, liquidity and land provide us with years of opportunities to increase recurring revenue and long-term value for our shareholders. We intend to continue to focus on our core business activity of real estate development, asset management and operations by expanding our portfolio of income producing commercial properties, developing long-term, scalable residential communities and growing our hospitality offerings. We continue to develop a broad range of asset types that we believe will provide acceptable rates of return, grow recurring revenues and support future business. Capital commitments will be funded with cash proceeds from completed projects, existing cash, owned-land, partner capital and financing arrangements. We do not anticipate immediate benefits from investments. Timing of projects may be subject to delays caused by factors beyond our control. We may also choose to operate rather than lease assets, lease rather than sell assets, or sell improved rather than unimproved land that may delay revenue and profits.
Previous wording
Highlights for the third quarter and first nine months of 2024 compared to the third quarter and first nine months of 2023 include:
Current wording
Highlights for the first quarter of 2025 compared to the first quarter 2024 include:
Previous wording
Throughout the first nine months of 2024, we continued to generate positive financial results. While macroeconomic factors such as inflation, elevated interest rates, higher insurance costs, supply chain disruptions, labor shortages, financial institution disruptions and geopolitical conflicts, among other things, continued to produce economic headwinds and impacted buyer sentiment, demand across our segments remains strong. We believe this is primarily due to the continued growth of Northwest Florida as a result of increased migration, which we attribute to the region’s high quality of life, natural beauty and outstanding amenities.
Current wording
Throughout the first three months of 2025, we continued to generate positive financial results. While macroeconomic factors such as tariffs, inflation, elevated interest rates, higher insurance costs, supply chain disruptions, labor shortages, financial institution disruptions and geopolitical conflicts, among other things, continued to produce economic headwinds and impacted buyer sentiment, demand across our segments remains strong. We believe this is primarily due to the continued growth of Northwest Florida as a result of increased migration, which we attribute to the region’s high quality of life, natural beauty and outstanding amenities.
Previous wording
The East Lake Creek, East Lake Powell, Lake Powell, Teachee, West Bay Creek and West Laird communities have phases of homesites in preliminary planning or permitting. Homesites in these communities will be developed based on market demand and sold primarily to homebuilders and on a limited basis to retail customers.
Current wording
The East Lake Creek, East Lake Powell, Lake Powell, Teachee, West Bay Creek and West Laird communities have phases of homesites in preliminary planning or permitting. Homesites in these communities will be developed based on market demand.
Previous wording
The Latitude Margaritaville Watersound community is a planned 55+ active adult residential community in Bay County, Florida. The community is located near the Intracoastal Waterway with convenient access to the Northwest Florida Beaches International Airport. The community is being developed through our unconsolidated Latitude Margaritaville Watersound JV with our partner Minto Communities USA, a homebuilder and community developer, and is estimated to include approximately 3,500 residential homes, which are being developed in smaller increments of discrete neighborhoods. As of September 30, 2024, the unconsolidated Latitude Margaritaville Watersound JV had 426 homes under contract, which are expected to result in a sales value to the JV of approximately $254.4 million at closing of the homes. See Note 4.Joint Ventures for additional information.
Current wording
The Latitude Margaritaville Watersound community is a planned 55+ active adult residential community in Bay County, Florida. The community is located near the Intracoastal Waterway with convenient access to the Northwest Florida Beaches International Airport. The community is being developed through our unconsolidated Latitude Margaritaville Watersound JV with our partner Minto Communities USA, a homebuilder and community developer, and is estimated to include approximately 3,500 residential homes, which are being developed in smaller increments of discrete neighborhoods. As of March 31, 2025, the unconsolidated Latitude Margaritaville Watersound JV had completed 1,855 home sale transactions of the total estimated 3,500 homes planned in the community and had 264 homes under contract, which are expected to result in a sales value to the JV of approximately $158.0 million at closing of the homes. See Note 4.Joint Ventures for additional information.
Previous wording
As of September 30, 2024, we had nineteen different homebuilders within our residential communities. As of September 30, 2024, we had 1,381 residential homesites under contract, which are expected to result in revenue of approximately $122.3 million, plus residuals, at closing of the homesites over the next several years. By comparison, as of September 30, 2023, we had 1,575 residential homesites under contract, with an expected revenue of approximately $135.5 million, plus residuals. The change in homesites under contract is due to homesite transactions since the end of the prior period and the amount of remaining homesites in current phases of the residential communities. The number of homesites under contract is subject to change based on homesite closings and new sales activity. Homesite prices vary significantly by community and often sell in concentrated transactions that may impact quarterly results. As of September 30, 2024, in addition to the 1,381 homesites under contract in other residential communities, our unconsolidated Latitude Margaritaville Watersound JV had 426 homes under contract, which together with the 1,381 homesites are expected to result in a sales value of approximately $376.7 million at closing of the homesites and homes.
Current wording
As of March 31, 2025, we had twenty different homebuilders within our residential communities. As of March 31, 2025, we had 952 residential homesites under contract, which are expected to result in revenue of approximately $94.4 million, plus residuals, at closing of the homesites over the next several years. By comparison, as of March 31, 2024, we had 1,335 residential homesites under contract, with an expected revenue of approximately $119.8 million, plus residuals. The change in homesites under contract is due to homesite transactions since the end of the prior period and the amount of remaining homesites in current phases of the residential communities. Homesite prices vary significantly by community and often sell in concentrated transactions that may impact period over period results. As of March 31, 2025, in addition to the 952 homesites under contract in other residential communities, our unconsolidated Latitude Margaritaville Watersound JV had 264 homes under contract, which together with the 952 homesites are expected to result in a sales value of approximately $252.4 million at closing of the homesites and homes.
Previous wording
Our hospitality segment features a private membership club (the “Watersound Club”), hotel operations, food and beverage operations, golf courses, beach clubs, retail outlets, gulf-front vacation rentals, marinas and other entertainment assets. The hospitality segment generates revenue from membership sales, golf courses, lodging at our hotels, short-term vacation rentals, food and beverage operations, merchandise sales, marina operations (including boat slip rentals, boat storage fees and fuel sales), charter flights, other resort and entertainment activities and beach clubs, which includes operation of the WaterColor Beach Club. Hospitality revenue is generally recognized at the point in time services are provided and represent a single performance obligation with a fixed transaction price. Hospitality revenue recognized over time includes non-refundable club membership initiation fees, club membership dues and other membership fees. The hospitality segment incurs costs from the services and goods provided, personnel costs, maintenance of the facilities and holding costs of the assets. From time to time, we may explore the sale of certain hospitality properties, the development of new hospitality properties, as well as new entertainment and management opportunities. Some of our JV assets and other assets incur interest and financing expenses related to the loans as described in Note 9.Debt, Net.
Current wording
assets. The hospitality segment generates revenue from membership sales, golf courses, lodging at our hotels, short-term vacation rentals, food and beverage operations, merchandise sales, marina operations (including boat slip rentals, boat storage fees and fuel sales), other resort and entertainment activities and beach clubs, which includes food and beverage operations of the WaterColor Beach Club. Hospitality revenue is generally recognized at the point in time services are provided and represent a single performance obligation with a fixed transaction price. Hospitality revenue recognized over time includes non-refundable club membership initiation fees, club membership dues and other membership fees. The hospitality segment incurs costs from the services and goods provided, personnel costs, maintenance of the facilities and holding costs of the assets. From time to time, we may explore the sale of certain hospitality properties, the development of new hospitality properties, as well as new entertainment and management opportunities. Some of our JV assets and other assets incur interest and financing expenses related to the loans as described in Note 8.Debt, Net.
Previous wording
Watersound Club provides club members and guests of some of our hotels access to our member facilities, which include Camp Creek golf course and amenities, Shark’s Tooth golf course and tennis center, Watersound Beach Club and a Pilatus PC-12 NG aircraft (“N850J”). Watersound Club offers different types of club memberships, each with different access rights and associated fee structures. Watersound Club is focused on creating an outstanding membership experience combined with the luxurious aspects of a destination resort. Club operations include a private beach club located on Scenic Highway 30A, with over one mile of Gulf of Mexico frontage, two resort-style pools, two restaurants, three bars, kid’s room and a recreation area. Shark’s Tooth includes an 18-hole golf course, tennis center, a full club house, a pro shop, as well as two food and beverage outlets. Camp Creek includes an 18-hole golf course, a full club house, health and wellness center, three restaurants, a tennis and pickle ball center, a resort-style pool complex with separate adult pool, a golf teaching academy, pro shop and multi-sport fields. We are in the process of constructing The Third, an 18-hole golf course, planned to be added to our Watersound Club operations. In June 2024, we opened The Sporting Preserve, a 12-stand sporting clays course.
Current wording
Watersound Club provides club members access to our member facilities, which include the Watersound Beach Club, Camp Creek golf course and amenities, Shark’s Tooth golf course and tennis center and The Third golf course, which opened in November 2024. In addition, in June 2024, we opened The Sporting Preserve, a 12-stand sporting clays course. Watersound Club offers different types of club memberships, each with different access rights and associated fee structures. Watersound Club is focused on creating an outstanding membership experience combined with the luxurious aspects of a destination resort. Watersound Beach Club located on Scenic Highway 30A with over one mile of Gulf of Mexico frontage, has two resort-style pools, two restaurants, three bars, kid’s room and a recreation area. Camp Creek includes an 18-hole golf course, a full club house, health and wellness center, three restaurants, a tennis and pickle ball center, a resort-style pool complex with separate adult pool, a golf teaching academy, pro shop and multi-sport fields. Shark’s Tooth includes an 18-hole golf course, tennis center, a full club house, a pro shop, as well as two food and beverage outlets. The Third includes an 18-hole golf course. Guests of some of our hotels also have access to certain Watersound Club amenities.
Previous wording
Watersound Origins amenities include an executive golf course, resort-style pool, fitness center, pickle ball courts and tennis courts located in the community. Access to these amenities is reserved to Watersound Origins and Watersound Origins West members consisting of the communities’ residents. The golf course is available for public play.
Current wording
Watersound Origins amenities include a resort-style pool, fitness center, pickle ball courts and tennis courts located in the community. Access to these amenities is reserved to Watersound Origins and Watersound Origins West members consisting of the communities’ residents. In addition, an executive golf course located in the community is available to residents and for public play.
Previous wording
Our commercial segment includes leasing of commercial property, multi-family, senior living, self-storage and other assets. The commercial segment also oversees the planning, development, entitlement, management and sale of our commercial and forestry land holdings for a variety of uses, including a broad range of retail, office, hotel, senior living, multi-family, self-storage and industrial properties. We provide development opportunities for national, regional and local retailers and other strategic partners in Northwest Florida. We own and manage retail shopping centers and develop commercial parcels. We are currently developing the Watersound Town Center in Walton County, Florida and Watersound West Bay Center in Bay County, Florida. These lifestyle centers are complementary to our Watersound Origins and Latitude Margaritaville Watersound residential communities. In conjunction with Florida State University (“FSU”) and Tallahassee Memorial Hospital (“TMH”), we are in the process of developing an 87-acre medical campus in Panama City Beach, Florida. We have large land holdings near the Pier Park retail center, adjacent to the Northwest Florida Beaches International Airport, near or within business districts in the region and along major roadways. We lease land for various other uses. The commercial segment manages our timber holdings in Northwest Florida which includes growing and selling pulpwood, sawtimber and other products.
Current wording
Our commercial segment includes leasing of commercial property, multi-family, senior living, self-storage and other assets. The commercial segment also oversees the planning, development, entitlement, management and sale of our commercial and forestry land holdings for a variety of uses, including a broad range of retail, office, hotel, senior living, multi-family, self-storage and industrial properties. We provide development opportunities for national, regional and local retailers and other strategic partners in Northwest Florida. We own and manage retail shopping centers and develop commercial parcels. We are currently developing the Watersound Town Center in Walton County, Florida and Watersound West Bay Center in Bay County, Florida. These lifestyle centers are complementary to the Watersound Origins, Watersound Origins West and Latitude Margaritaville Watersound residential communities. In conjunction with Florida State University (“FSU”) and Tallahassee Memorial Hospital (“TMH”), we are in the process of developing an 87-acre medical campus in Panama City Beach, Florida, the first building of which opened in July 2024. We have large land holdings near the Pier Park retail center, adjacent to the Northwest Florida Beaches International Airport, near or within business districts in the region and along major roadways. We lease land for various other uses. The commercial segment manages our timber holdings in Northwest Florida which includes growing and selling pulpwood, sawtimber and other products.
Previous wording
The commercial segment generates leasing revenue and incurs leasing expenses primarily from maintenance and management of our properties, personnel costs and asset holding costs. Our commercial segment generates revenue from the sale of developed and undeveloped land, timber holdings or land with limited development and/or entitlements and the sale of commercial operating properties. Real estate sales in our commercial segment incur costs of revenue directly associated with the land, development, construction, timber and selling costs. Our commercial segment generates timber
Current wording
The commercial segment generates leasing revenue and incurs leasing expenses primarily from maintenance and management of our properties, personnel costs and asset holding costs. Our commercial segment generates revenue from the sale of developed and undeveloped land, timber holdings or land with limited development and/or entitlements and the sale of commercial operating properties. Real estate sales in our commercial segment incur costs of revenue directly associated with the land, development, construction, timber and selling costs. Our commercial segment generates timber revenue primarily from open market sales of timber on site without the associated delivery costs. Some of our JV assets and other assets incur interest and financing expenses related to loans as described in Note 8.Debt, Net.
Previous wording
As of September 30, 2024, our leasing portfolio consists of approximately 1,179,000 square feet of leasable space for mixed-use, retail, industrial, office, self-storage and medical uses. Through separate unconsolidated JVs, other commercial properties that are operated by our JV partners include a 124-room TownePlace Suites by Marriott, a 121-room Residence Inn, a Busy Bee branded fuel station and convenience store, which includes a Starbucks, and a golf cart sales and service facility, all located in Bay County, Florida. Through an unconsolidated JV, an additional golf cart sales showroom, located in Walton County, Florida, is operated by our JV partner.
Current wording
As of March 31, 2025, our leasing portfolio consists of approximately 1,180,000 square feet of leasable space for mixed-use, retail, industrial, office, self-storage and medical uses. Through separate unconsolidated JVs, other commercial properties that are operated by our JV partners include a 124-room TownePlace Suites by Marriott, a 121-room Residence Inn, a Busy Bee branded fuel station and convenience store, which includes a Starbucks, and a golf cart sales and service facility, all located in Bay County, Florida.
Previous wording
The discussion and analysis of our financial condition and results of operations are based upon our condensed consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses and related disclosures of contingent assets and liabilities. We base these estimates on historical experience, available current market information and on various other assumptions that management believes are
Current wording
The discussion and analysis of our financial condition and results of operations are based upon our condensed consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses and related disclosures of contingent assets and liabilities. We base these estimates on historical experience, available current market information and on various other assumptions that management believes are reasonable under the circumstances. Additionally, we evaluate the results of these estimates on an on-going basis. Management’s estimates form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions and our accounting estimates are subject to change.
Previous wording
Critical accounting policies that we believe reflect our more significant judgments and estimates used in the preparation of our condensed consolidated financial statements are set forth in Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2023. There have been no significant changes in these policies during the first nine months of 2024, however we cannot assure you that these policies will not change in the future.
Current wording
Critical accounting policies that we believe reflect our more significant judgments and estimates used in the preparation of our condensed consolidated financial statements are set forth in Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2024. There have been no significant changes in these policies during the first three months of 2025, however we cannot assure you that these policies will not change in the future.
Previous wording
Residential Real Estate Revenue and Gross Profit. During the three months ended September 30, 2024, residential real estate revenue decreased $16.5 million, or 46.5%, to $19.0 million, as compared to $35.5 million during the same period in 2023. During the three months ended September 30, 2024, residential real estate gross profit decreased $8.9 million to $7.5 million (or gross margin of 39.5%), as compared to $16.4 million (or gross margin of 46.2%) during the same period in 2023. During the three months ended September 30, 2024, we sold 179 homesites, compared to 254 homesites during the same period in 2023. During the three months ended September 30, 2024 and 2023, the average base revenue, excluding homesite residuals, per homesite sold was approximately $86,000 and $103,000, respectively, due to the mix of sales from different communities. The revenue, gross profit and margin for each period was impacted by the difference in pricing among the communities, the difference in the cost of the homesite development and the volume of sales within each of the communities. The number of homesites sold varied each period due to the timing of homebuilder contractual closing obligations in our residential communities.
Current wording
Residential Real Estate Revenue and Gross Profit. During the three months ended March 31, 2025, residential real estate revenue increased $2.1 million, or 6.8%, to $32.9 million, as compared to $30.8 million during the same period in 2024. During the three months ended March 31, 2025, residential real estate gross profit decreased $0.8 million to $15.0 million (or gross margin of 45.6%), as compared to $15.8 million (or gross margin of 51.3%) during the same period in 2024. During the three months ended March 31, 2025, we sold 249 homesites, compared to 216 homesites during the same period in 2024. During the three months ended March 31, 2025 and 2024, the average base revenue, excluding homesite residuals, per homesite sold was approximately $114,000 and $117,000, respectively, due to the mix of sales from different communities. The revenue, gross profit and margin for each period was impacted by the difference in pricing among the communities, the difference in the cost of the homesite development and the volume of sales within each of the communities. The number of homesites sold varied each period due to the timing of homebuilder contractual closing obligations in our residential communities.
Previous wording
Timber Revenue and Gross Profit. Timber revenue decreased $0.3 million, or 30.0%, to $0.7 million during the three months ended September 30, 2024, as compared to $1.0 million in the same period in 2023. The decrease was primarily due to a decrease in tons of wood products sold and prices in the current period. There were 45,000 tons of wood products sold at an average price per ton of $13.35 during the three months ended September 30, 2024, as compared to 48,000 tons of wood products sold at an average price per ton of $17.77, during the same period in 2023. Timber gross margin was 71.4% during the three months ended September 30, 2024, as compared to 80.0% during the same period in 2023. The decrease was primarily due to less tons of wood products sold and lower prices in the current period.
Current wording
Timber Revenue and Gross Profit. During the three months ended March 31, 2025 and 2024 timber revenue was comparable. There were 74,000 tons of wood products sold at an average price per ton of $14.61 during the three months ended March 31, 2025, as compared to 75,000 tons of wood products sold at an average price per ton of $14.83, during the same period in 2024. Timber gross margin was 83.3% during both the three months ended March 31, 2025 and 2024.
Previous wording
Other Revenue. Other revenue primarily consists of mitigation bank credit sales and title insurance business revenue.
Current wording
Other Revenue. Other revenue primarily consists of title insurance business revenue and mitigation bank credit sales.
Previous wording
Hospitality revenue increased $40.0 million, or 34.2%, to $157.0 million during the nine months ended September 30, 2024, as compared to $117.0 million in the same period in 2023. The increase in hospitality revenue was primarily related to the growth in membership dues and membership ancillary spend, opening of new Camp Creek amenities in April 2023, as well as an increase in lodging revenue. The increase in lodging revenue was related to Embassy Suites by Hilton Panama City Beach Resort, which opened in April 2023; The Lodge 30A, which opened in February 2023; and Home2 Suites by Hilton Santa Rosa Beach, Hotel Indigo Panama City Marina and Camp Creek Inn, which all opened in June 2023. As of September 30, 2024, Watersound Club had 3,532 members, compared with 3,088 members as of September 30, 2023, an increase of 444 members. As of both September 30, 2024 and 2023, we had 1,053 operational hotel rooms (excluding 245 hotel rooms related to unconsolidated JVs). Hospitality had a gross margin of 33.3% during the nine months ended September 30, 2024, compared to 21.0% during the same period in 2023. The increase in gross margin was primarily due to new assets being operational throughout the current period.
Current wording
Hospitality revenue increased $0.3 million, or 0.8%, to $39.6 million during the three months ended March 31, 2025, as compared to $39.3 million in the same period in 2024. The increase in hospitality revenue was primarily related to the growth in membership dues and membership ancillary spend as well as The Third golf course, which opened in November 2024 and the renovated Shark’s Tooth clubhouse, which reopened in February 2025. The increase in revenue was partially offset by a decrease in hotel operations, due to the timing of holidays and school breaks. As of March 31, 2025, Watersound Club had 3,498 members, compared with 3,433 members as of March 31, 2024, a net increase of 65 members. As of both March 31, 2025 and 2024, we had 1,053 operational hotel rooms (excluding 245 and 124 hotel rooms related to unconsolidated JVs, respectively). Hospitality gross margin decreased to 18.2% during the three months ended March 31, 2025, compared to 22.9% during the same period in 2024. The decrease in gross margin was primarily due to opening and ongoing operating costs for The Third golf course and reopening of the Shark’s Tooth clubhouse during the current period.
Previous wording
Leasing revenue increased $7.5 million, or 20.2%, to $44.7 million during the nine months ended September 30, 2024, as compared to $37.2 million in the same period in 2023. The increase was primarily due to new multi-family, commercial property and marina leases, as well as other new leases. Leasing gross margin was 50.3% during the nine months ended September 30, 2024, as compared to 49.7% during the same period in 2023.
Current wording
Leasing revenue increased $2.0 million, or 14.0%, to $16.3 million during the three months ended March 31, 2025, as compared to $14.3 million in the same period in 2024. The increase was primarily due to additional multi-family, commercial property and marina leases, as well as other leases. Leasing gross margin increased to 54.6% during the three months ended March 31, 2025, as compared to 49.7% during the same period in 2024. The increase in leasing gross margin was primarily due to additional leases in the current period.
Previous wording
Depreciation, depletion and amortization expense increased $1.1 million and $6.8 million during the three and nine months ended September 30, 2024, respectively, as compared to the same periods in 2023, primarily due to new hospitality and commercial assets placed in service.
Current wording
Depreciation, depletion and amortization expense increased $0.9 million during the three months ended March 31, 2025, as compared to the same period in 2024, primarily due to new hospitality and commercial assets placed in service. Depreciation is a non-cash, GAAP expense which is amortized over an asset’s useful life, while maintenance and repair expenses are period costs and expensed as incurred.
Previous wording
Investment income, net primarily includes (i) interest and dividends earned and accretion of the net discount, (ii) interest income earned on the time deposit held by SPE and (iii) interest earned on notes receivable and other receivables as detailed in the table below:
Current wording
Investment income, net primarily includes (i) interest, dividends and accretion income accrued or received on our cash, cash equivalents and other investments, (ii) interest income earned on the time deposit held by SPE and (iii) interest earned on notes receivable and other receivables as detailed in the table below:
Previous wording
Interest expense for the three months ended September 30, 2024 and 2023 were comparable. Interest expense increased $3.7 million, or 17.0%, to $25.5 million during the nine months ended September 30, 2024, as compared to $21.8 million in the same period in 2023. The increase in interest expense is primarily related to completion of projects where interest expense is no longer capitalized and the increase in project financing. See Note 9.Debt, Net and Note 16.Other Income, Net for additional information regarding project financing.
Current wording
Interest expense decreased $0.7 million, or 8.2%, to $7.8 million during the three months ended March 31, 2025, as compared to $8.5 million in the same period in 2024. The decrease in interest expense is primarily due to repayment of project financing and a decrease in interest rates from the prior period. See Note 8.Debt, Net and Note 15.Other Income, Net for additional information regarding project financing.
Previous wording
Equity in income (loss) from unconsolidated joint ventures includes our proportionate share of earnings or losses of unconsolidated JVs accounted for by the equity method as detailed in the table below. See Note 4.Joint Venturesfor additional information.
Current wording
Equity in income (loss) from unconsolidated joint ventures includes our proportionate share of earnings or losses of unconsolidated JVs accounted for using the equity method as detailed in the table below. See Note 4.Joint Venturesfor additional information.
Previous wording
Other (expense) income, net primarily includes income from our retained interest investments and other income and expense items as detailed in the table below:
Current wording
Other expense, net primarily includes other income and expense items as detailed in the table below:
Previous wording
Income tax expense was $6.4 million during the three months ended September 30, 2024, as compared to $6.8 million during the same period in 2023. Our effective tax rate was 27.6% for the three months ended September 30, 2024, as compared to 25.8% during the same period in 2023.
Current wording
Income tax expense was $5.8 million during the three months ended March 31, 2025, as compared to $4.7 million during the same period in 2024. Our effective tax rate was 25.8% for the three months ended March 31, 2025, as compared to 25.0% during the same period in 2024.
Previous wording
Our effective rate for the three and nine months ended September 30, 2024 and 2023, differed from the federal statutory rate of 21.0% primarily due to state income taxes, tax credits and other permanent differences. See Note 12.Income Taxes for additional information.
Current wording
Our effective rate for the three months ended March 31, 2025 and 2024, differed from the federal statutory rate of 21.0% primarily due to state income taxes, nontaxable or nondeductible and other differences. See Note 11.Income Taxes for additional information.
Previous wording
Homesites. Revenue from homesite sales decreased $15.6 million, or 48.0%, during the three months ended September 30, 2024, as compared to the same period in 2023, primarily due to the mix and number of homesites sold per community and the timing of homebuilder contractual closing obligations in our residential communities. During the three months ended September 30, 2024 and 2023, the average base revenue, excluding homesite residuals, per homesite sold was approximately $86,000 and $103,000, respectively, due to the mix of sales from different communities. Revenue does not include any estimated homesite residuals during the three months ended September 30, 2024. Revenue includes estimated homesite residuals of $4.9 million during the three months ended September 30, 2023. Estimated homesite residuals vary based on themix and number of homesites sold in specific communities during the period. Gross margin decreased to 39.1% during the three months ended September 30, 2024, as compared to 44.6% during the same period in 2023, primarily due to the cost, mix and number of homesites sold from different communities during each respective period. Gross margin may vary each period depending on the location of homesite sales.
Current wording
Homesites. Revenue from homesite sales increased $1.7 million, or 5.9%, during the three months ended March 31, 2025, as compared to the same period in 2024, primarily due to the mix and number of homesites sold per community and the timing of homebuilder contractual closing obligations in our residential communities. During the three months ended March 31, 2025 and 2024, the average base revenue, excluding homesite residuals, per homesite sold was approximately $114,000 and $117,000, respectively, due to the mix of sales from different communities. Revenue includes estimated homesite residuals of $1.1 million and $2.1 million during the three months ended March 31, 2025 and 2024, respectively. The decrease in estimated homesite residuals was due to themix and number of homesites sold in specific communities during the current period. Gross margin decreased to 45.6% during the three months ended March 31, 2025, as compared to 50.0% during the same period in 2024. Gross margin may vary each period depending on the location of homesite sales.
Previous wording
Other revenue includes tap and impact fee credits sold, marketing fees and other fees. Other revenue includes estimated fees related to homebuilder homesite sales of $0.6 million and $1.5 million, during the three months ended September 30, 2024 and 2023, respectively.
Current wording
Other revenue includes tap and impact fee credits sold, marketing fees and other fees. Other revenue includes estimated fees related to homebuilder homesite sales of $0.5 million and $0.8 million, during the three months ended March 31, 2025 and 2024, respectively.
Previous wording
Investment income, net primarily consists of interest earned on our notes receivable and unimproved land contribution to our unconsolidated Latitude Margaritaville Watersound JV as home sales are transacted in the community. See Note 4.Joint Ventures for additional information. Interest expense primarily consists of interest incurred on our portion of the total outstanding CDD debt. See Note 9.Debt, Net for additional information.
Current wording
Investment income, net primarily consists of interest earned on the unimproved land contribution to our unconsolidated Latitude Margaritaville Watersound JV as home sales are transacted in the community. See Note 4.Joint Ventures for additional information. Interest expense primarily consists of interest incurred on our portion of the total outstanding CDD debt. See Note 8.Debt, Net for additional information.
Previous wording
Equity in income from unconsolidated joint ventures includes our proportionate share of earnings or losses of an unconsolidated JV accounted for by the equity method. Equity in income from unconsolidated joint ventures increased $4.6 million during the nine months ended September 30, 2024, as compared to the same period in 2023. The increase was due to a higher average margin per home sold and the increased volume of home sale transactions during the current period related to our unconsolidated Latitude Margaritaville Watersound JV. The Latitude Margaritaville Watersound JV completed 529 home sale transactions during the nine months ended September 30, 2024, compared to 502 home sale transactions during the same period in 2023. See Note 4.Joint Venturesfor additional information.
Current wording
Equity in income from unconsolidated joint ventures includes our proportionate share of earnings or losses of an unconsolidated JV accounted for using the equity method. Equity in income from unconsolidated joint ventures increased $4.4 million during the three months ended March 31, 2025, as compared to the same period in 2024. The increase was due to a higher average margin per home sold and the increased volume of home sale transactions during the current period related to our unconsolidated Latitude Margaritaville Watersound JV. The Latitude Margaritaville Watersound JV completed 192 home sale transactions during the three months ended March 31, 2025, compared to 177 home sale transactions during the same period in 2024. See Note 4.Joint Venturesfor additional information.
Previous wording
Revenue from our clubs increased $22.6 million, or 59.2%, during the nine months ended September 30, 2024, as compared to the same period in 2023. The increase in revenue in the current period was due to growth in membership dues and membership ancillary spend, as well as the opening of new Camp Creek amenities in April 2023 and Camp Creek Inn in June 2023. As of September 30, 2024, Watersound Club had 3,532 members, compared with 3,088 members as of September 30, 2023, an increase of 444 members. Our clubs gross margin was 44.1% during the nine months ended September 30, 2024, compared to 26.2% during the same period in 2023. The increase in gross margin was primarily due to new assets being operational throughout the current period.
Current wording
Revenue from our clubs increased $0.6 million, or 3.2%, during the three months ended March 31, 2025, as compared to the same period in 2024. The increase in revenue was due to growth in membership dues and membership ancillary spend, as well as The Third golf course, which opened in November 2024 and the renovated Shark’s Tooth clubhouse, which reopened in February 2025. As of March 31, 2025, Watersound Club had 3,498 members, compared with 3,433 members as of March 31, 2024, a net increase of 65 members. Our clubs gross margin was 38.3% during the three months ended March 31, 2025, compared to 43.2% during the same period in 2024. The decrease in gross margin was primarily due to opening and ongoing operating costs for The Third golf course and reopening of the Shark’s Tooth clubhouse during the current period.
Previous wording
Revenue from our hotel operations increased $2.4 million, or 8.3%, during the three months ended September 30, 2024, as compared to the same period in 2023. The increase was primarily due to an increase in lodging revenue from Embassy Suites by Hilton Panama City Beach Resort, which opened in April 2023; and Home2 Suites by Hilton Santa Rosa Beach and Hotel Indigo Panama City Marina, which both opened in June 2023. Our hotels had a gross margin of 29.9% for the three months ended September 30, 2024, compared to 24.8% during the same period in 2023. The increase in gross margin was primarily due to new assets being stabilized during the current period.
Current wording
Revenue from our hotel operations decreased $0.2 million, or 1.1%, during the three months ended March 31, 2025, as compared to the same period in 2024. Our hotels had a negative gross margin of 1.1% for the three months ended March 31, 2025, compared to gross margin of 2.2% during the same period in 2024. The decrease in revenue and gross margin was primarily due to the timing of holidays and school breaks.
Previous wording
As of both September 30, 2024 and 2023, we had 1,053 operational hotel rooms (excluding 245 hotel rooms related to unconsolidated JVs).
Current wording
As of both March 31, 2025 and 2024, we had 1,053 operational hotel rooms (excluding 245 and 124 hotel rooms related to unconsolidated JVs, respectively).
Previous wording
Revenue from other hospitality operations was comparable during the three months ended September 30, 2024 and 2023. Our other hospitality operations had a gross margin of 18.9% during the three months ended September 30, 2024, compared to 24.3% during the same period in 2023. The decrease in gross margin was due to increased operational costs during the current period.
Current wording
Revenue from other hospitality operations during the three months ended March 31, 2025 and 2024, were comparable. Our other hospitality operations had a negative gross margin of 4.5% during the three months ended March 31, 2025, compared to gross margin of 17.4% during the same period in 2024. The decrease in gross margin was due to increased operational costs during the current period.
Previous wording
Leasing revenue includes marina boat slip and dry storage rental, as well as leases of other hospitality assets. Leasing revenue increased $1.2 million, or 80.0%, during the nine months ended September 30, 2024, as compared to the same period in 2023, primarily due to increased occupancy at our marinas and other hospitality assets.
Current wording
Leasing revenue includes marina boat slip and dry storage rental, as well as leases of other hospitality assets. Leasing revenue increased $0.2 million, or 28.6%, during the three months ended March 31, 2025, as compared to the same period in 2024, primarily due to increased occupancy at our marinas.
Previous wording
Interest expense primarily includes interest incurred from our hospitality project financing. The increase of $2.5 million in interest expense during the nine months ended September 30, 2024, as compared to the same period in 2023, was primarily due to completion of projects where interest expense is no longer capitalized and the increase in project financing. See Note 9.Debt, Net for additional information.
Current wording
Interest expense primarily includes interest incurred from our hospitality project financing. The decrease of $0.3 million in interest expense during the three months ended March 31, 2025, as compared to the same period in 2024, was primarily due to repayment of project financing and a decrease in interest rates from the prior period. See Note 8.Debt, Net for additional information.
Previous wording
Other income (expense), net for the nine months ended September 30, 2024, primarily includes net loss on disposal of assets.
Current wording
Other expense, net for the three months ended March 31, 2024, primarily includes net loss on disposal of assets.
Previous wording
Total leasing revenue increased $6.2 million, or 17.5%, during the nine months ended September 30, 2024, as compared to the same period in 2023. The increase was primarily due to new multi-family and commercial property leases, as well as other new leases. Total leasing gross margin during the nine months ended September 30, 2024 was 53.4%, as compared to 53.1% during the same period in 2023. As of September 30, 2024, we had net rentable square feet of approximately 1,179,000, of which approximately 1,130,000 square feet were under lease. As of September 30, 2023, we had net rentable square feet of approximately 1,082,000, of which approximately 1,036,000 square feet were under lease. As of September 30, 2024, our consolidated entities had 1,235 multi-family and senior living units completed, of which 1,080 were leased, compared to 1,079 multi-family and senior living units completed, of which 960 were leased as of September 30, 2023 (excludes 148 senior living units for the unconsolidated Watersound Fountains Independent Living JV).
Current wording
Total leasing revenue increased $1.6 million, or 11.9%, during the three months ended March 31, 2025, as compared to the same period in 2024. The increase was primarily due to additional multi-family and commercial property leases, as well as other leases. Total leasing gross margin during the three months ended March 31, 2025 was 55.6%, as compared to 51.9% during the same period in 2024. The increase in leasing gross margin was primarily due to additional leases in the current period. As of March 31, 2025, we had net rentable square feet of approximately 1,180,000, of which approximately 1,114,000 square feet were under lease. As of March 31, 2024, we had net rentable square feet of approximately 1,082,000, of which approximately 1,046,000 square feet were under lease. As of both March 31, 2025 and 2024, our consolidated entities had 1,235 multi-family and senior living units, of which 1,087 were leased as of March 31, 2025, compared to 1,039 leased as of March 31, 2024 (excludes 148 senior living units for the unconsolidated Watersound Fountains Independent Living JV).
Previous wording
We believe the diversity of our commercial segment complements the growth of our residential and hospitality segments. Commercial and forestry real estate revenue can vary depending on the proximity to developed areas and the mix and characteristics of commercial and forestry real estate sold in each period, with varying compositions of retail, office, industrial, timber and other commercial uses. During the nine months ended September 30, 2024, we had six commercial and forestry real estate sales of approximately 268 acres for $9.4 million, resulting in a gross margin of approximately 61.7%. During the nine months ended September 30, 2023, we had twenty-one commercial and forestry real estate sales of approximately 212 acres for $13.9 million and land improvement services of $0.3 million, together resulting in a gross margin of approximately 57.7%.
Current wording
We believe the diversity of our commercial segment complements the growth of our residential and hospitality segments. Commercial and forestry real estate revenue can vary depending on the proximity to developed areas and the mix and characteristics of commercial and forestry real estate sold in each period, with varying compositions of retail, office, industrial, timber and other commercial uses. During the three months ended March 31, 2025, we had two commercial and forestry real estate sales of approximately 133 acres for $3.2 million, resulting in a gross margin of approximately 96.9%. During the three months ended March 31, 2024, we had two commercial and forestry real estate sales of approximately 76 acres for $1.4 million, resulting in a gross margin of approximately 78.6%.
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Current report — wording carried from elsewhere
Our hospitality segment features a private membership club (the “Watersound Club”), hotel operations, food and beverage operations, golf courses, beach clubs, retail outlets, gulf-front vacation rentals, marinas and other entertainment
Current report — wording carried from elsewhere
Investment income, net for the three months ended March 31, 2025 and 2024 were comparable.
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interest payments on our long-term debt, authorized stock repurchases and authorized dividends for the next twelve months.
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perform any of the covenants, warranties or other certain obligations to be performed on the part of such guarantor. See Note 8.Debt, Net for additional information.
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loans outstanding, some of which we have entered into guarantees. See Note 4.Joint Venturesand Note 17.Commitments and Contingenciesfor additional information.
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Previous report — wording carried elsewhere
revenue primarily from open market sales of timber on site without the associated delivery costs. Some of our JV assets and other assets incur interest and financing expenses related to loans as described in Note 9.Debt, Net.
Previous report — wording carried elsewhere
reasonable under the circumstances. Additionally, we evaluate the results of these estimates on an on-going basis. Management’s estimates form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions and our accounting estimates are subject to change.
Previous report — wording carried elsewhere
During the nine months ended September 30, 2024, residential real estate revenue decreased $45.4 million, or 35.8%, to $81.5 million, as compared to $126.9 million during the same period in 2023. During the nine months ended September 30, 2024, residential real estate gross profit decreased $23.2 million to $39.1 million (or gross margin of 48.0%), as compared to $62.3 million (or gross margin of 49.1%) during the same period in 2023. During the nine months ended September 30, 2024, we sold 581 homesites, compared to 881 homesites and unimproved residential land sales of $0.6 million during the same period in 2023. During the nine months ended September 30, 2024 and 2023, the average base revenue, excluding homesite residuals, per homesite sold was approximately $115,000 and $105,000, respectively, due to the mix of sales from different communities. Homesite sales in the prior period include the sale of 100 entitled but undeveloped homesites sold within the SouthWood community, which reduced the average price per homesite. The revenue, gross profit and margin for each period was impacted by the difference in pricing among the communities, the difference in the cost of the homesite development and the volume of sales within each of the communities. The number of homesites sold varied each period due to the timing of homebuilder contractual closing obligations in our residential communities.
Previous report — wording carried elsewhere
The following table sets forth our consolidated residential real estate revenue and cost of revenue activity:
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The following discussion sets forth details of the consolidated results of operations of our residential segment.
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Homesites. Revenue from homesite sales decreased $44.0 million, or 37.3%, during the nine months ended September 30, 2024, as compared to the same period in 2023, primarily due to the mix and number of homesites sold per community and the timing of homebuilder contractual closing obligations in our residential communities. During the nine months ended September 30, 2024 and 2023, the average base revenue, excluding homesite residuals, per homesite sold was approximately $115,000 and $105,000, respectively, due to the mix of sales from different communities. Homesite sales in the prior period include the sale of 100 entitled but undeveloped homesites sold within the SouthWood community, which reduced the average price per homesite. Revenue includes estimated homesite residuals of $2.6 million and $20.0 million during the nine months ended September 30, 2024 and 2023, respectively. The decrease in estimated homesite residuals was due to themix and number of homesites sold in specific communities during the current period. Gross margin was 48.4% during both the nine months ended September 30, 2024 and 2023. Gross margin may vary each period depending on the location of homesite sales.
Previous report — wording carried elsewhere
Other revenue includes tap and impact fee credits sold, marketing fees and other fees. Other revenue includes estimated fees related to homebuilder homesite sales of $2.2 million and $4.4 million, during the nine months ended September 30, 2024 and 2023, respectively.
Previous report — wording carried elsewhere
Other operating expenses include salaries and benefits, property taxes, marketing, professional fees, project administration, owner association and CDD assessments and other administrative expenses.
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Investment income, net primarily consists of interest earned on our notes receivable and unimproved land contribution to our unconsolidated Latitude Margaritaville Watersound JV as home sales are transacted in the community. See Note 4.Joint Ventures for additional information. Interest expense primarily consists of interest incurred on our portion of the total outstanding CDD debt. See Note 9.Debt, Net for additional information.
Previous report — wording carried elsewhere
Leasing revenue includes marina boat slip and dry storage rental, as well as leases of other hospitality assets.
Previous report — wording carried elsewhere
Interest expense primarily includes interest incurred from our hospitality project financing. See Note 9.Debt, Net for additional information.
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The following table sets forth details of our hospitality segment consolidated revenue and gross profit:
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Other operating expenses include salaries and benefits, professional fees and other administrative expenses.
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Interest expense primarily includes interest incurred from our commercial project financing and CDD debt. See Note 9.Debt, Net for additional information.
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The following table sets forth details of our commercial segment consolidated revenue and gross profit:
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The following discussion sets forth details of the consolidated results of operations of our commercial segment.
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Other operating expenses include salaries and benefits, property taxes, CDD assessments, professional fees, marketing, project administration and other administrative expenses.
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Equity in loss from unconsolidated joint ventures includes our proportionate share of earnings or losses of unconsolidated JVs accounted for by the equity method. Equity in loss from unconsolidated joint ventures was $3.6 million during the nine months ended September 30, 2024, as compared to $0.2 million for the same period in 2023. The nine months ended September 30, 2024, primarily include pre-opening, lease-up, depreciation and interest expenses related to the Watersound Fountains Independent Living JV, which opened in March 2024 and is currently under lease-up. See Note 4.Joint Venturesfor additional information.
Previous report — wording carried elsewhere
As of September 30, 2024 and December 31, 2023, we were required to provide surety bonds that guarantee completion and maintenance of certain infrastructure in certain development projects and mitigation banks, as well as
Previous report — wording carried elsewhere
$69.0 million, capital distributions from unconsolidated joint ventures of $0.2 million and maturities of assets held by SPEs of $0.8 million.
Previous report — wording carried elsewhere
population expansion in our regions of development, particularly Northwest Florida; our ability to fully recover from natural disasters and severe weather conditions; the actual or perceived threat of climate change; the seasonality of our business; our ability to obtain adequate insurance for our properties or rising insurance costs; our dependence on certain third party providers; the inability of minority shareholders to influence corporate matters, due to concentrated ownership of largest shareholder; the impact of unfavorable legal proceedings or government investigations; the impact of complex and changing laws and regulations in the areas we operate; changes in tax rates, the adoption of new U.S. tax legislation, and exposure to additional tax liabilities, including with respect to Qualified Opportunity Zone program; new litigation; our ability to attract and retain qualified employees, particularly in our hospitality business; our ability to protect our information technology infrastructure and defend against cyber-attacks; increased media, political, and regulatory scrutiny negatively impacting our reputation; our ability to maintain adequate internal controls; risks associated with our financing arrangements, including our compliance with certain restrictions and limitations; our ability to pay our quarterly dividend; the potential volatility of our common stock; and the other risks and uncertainties discussed in “Risk Factors” beginning on page 7 of our most recent annual report on Form 10-K and from time to time in our subsequent filings with the SEC. We assume no obligation to revise or publicly released any revision to any forward-looking statements contained in this quarterly report on Form 10-Q unless required by law.