ST JOE Co (JOE)

Item 2.         Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the accompanying unaudited condensed consolidated financial statements and related notes in Item 1 and with the audited consolidated financial statements and the related notes included in our Annual Report on Form 10-K. The statements in this discussion regarding industry outlook, our expectations regarding our future performance, liquidity and capital resources and other non-historical statements are forward-looking statements. These forward-looking statements are subject to risks and uncertainties, including the risks and uncertainties described in “Forward-Looking Statements” below and “Risk Factors” beginning on page 7 of our Annual Report on Form 10-K. Our actual results may differ materially from those contained in or implied by any forward-looking statements. We assume no obligation to revise or publicly release any revision to any forward-looking statements contained in this Quarterly Report on Form 10-Q, unless required by law.

Business Overview

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 partner with or explore the sale of discrete assets, such as our sale of a senior living community property in September 2025, in order to optimize resource allocation and maximize value. See Note 4. Joint Ventures for additional information. We seek to continue to enhance the value of our owned real estate assets by developing residential, hospitality and commercial 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.

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 developing long-term, scalable residential communities, growing our hospitality offerings and expanding our portfolio of income producing commercial properties. In addition, we operate a real estate brokerage, title insurance agency and insurance agency business. 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. These investments are made with a long-term value creation perspective. 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.

Our real estate investment strategy focuses on projects that meet long-term risk-adjusted return criteria. Our practice is to only incur such expenditures when our analysis indicates that a project will generate a return equal to or greater than the threshold return over its life.

Highlights for the first quarter of 2026 compared to the first quarter of 2025 include:

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​

Market Conditions

While macroeconomic factors such as uncertainty over tariffs, inflation, geopolitical conflicts, elevated interest rates and higher insurance costs for consumers and overall consumer confidence, among other things, continued to produce economic headwinds and impacted buyer sentiment in many parts of the country, our segments continued to generate positive financial results through the first quarter of 2026. We believe this is primarily due to the continued growth of Northwest Florida as a result of net migration, which we attribute to the region’s high quality of life, natural beauty and outstanding amenities.

Elevated interest rates, market conditions in home states, and higher insurance costs have negatively impacted or delayed the ability of some buyers to obtain financing or sell their existing homes in their home states. The negative impact has been partially offset by the net migration into our markets and the number of cash buyers. In addition, we have not experienced an increase in cancellation rates as homebuilders have continued to perform on their contractual obligations with us.

Given our diverse portfolio of residential holdings, the mix of sales and pricing from different communities may impact revenue and margins period over period, as discussed in more detail below.

Reportable Segments

We conduct primarily all of our business in the following three reportable segments: (1) residential, (2) hospitality and (3) commercial.

The following table sets forth the relative contribution of these reportable segments to our consolidated operating revenue:

​

For more information regarding our reportable segments see Note 16. Segment Information.

Residential Segment

Our residential segment primarily plans and develops residential communities of various sizes across a wide range of price points and sells homesites to homebuilders or retail consumers. Our residential segment also evaluates opportunities to enter into JV agreements for specific communities such as Latitude Margaritaville Watersound.

The residential segment generates revenue from sales of homesites, homes and other residential land and certain homesite residuals from homebuilder sales that provide us a percentage of the sale price of the completed home if the home price exceeds a negotiated threshold. Revenue is recognized at the point in time when a sale is closed and title and control have been transferred to the buyer. The residential segment also generates revenue from the sale of tap and

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impact fee credits, marketing fees and other fees on certain transactions. Certain homesite residuals and other revenue related to homebuilder homesite sales are recognized in revenue at the point in time of the closing of the sale. The residential segment incurs costs from direct costs (e.g., development and construction costs), selling costs and other indirect costs. Cost of real estate revenue excludes depreciation, depletion and amortization expense.

Our residential segment includes the Bayside at Ward Creek, Breakfast Point East, Breakwater at Ward Creek, College Station, Park Place, Salt Creek at Mexico Beach, Salt Grass at Ward Creek, Titus Park, Watersound Camp Creek, Watersound Origins, Watersound Origins West and WindMark Beach communities, which are large scale, multi-phase communities with current development activity, sales activity or future phases. Homesites in these communities are developed based on market demand and sold primarily to homebuilders and on a limited basis to retail customers.

The East Lake Creek, East Lake Powell, Lake Powell, Pigeon Creek, Teachee, West Bay Creek and West Laird projects have phases of homesites in preliminary planning or permitting. Homesites in these projects will be developed based on market demand.

The SummerCamp Beach community has homesites available for sale and along with the RiverCamps and SouthWood communities, have additional lands for future development.

The Latitude Margaritaville Watersound community is a 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 3,700 residential homes, which are being developed in smaller increments of discrete neighborhoods. As of March 31, 2026, the unconsolidated Latitude Margaritaville Watersound JV had completed 2,273 home sale transactions of the total estimated 3,700 homes planned in the community and had 158 homes under contract, which are expected to result in a sales value to the JV of approximately $93.5 million at closing of the homes. See Note 4. Joint Ventures for additional information.

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The residential homesite pipeline by community/project is as follows:

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[Excerpt truncated for page length; source filing is linked above.]

Item 7.    Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the accompanying audited consolidated financial statements and the related notes included in this Form 10-K. The statements in this discussion regarding industry outlook, our expectations regarding our future performance, liquidity and capital resources and other non-historical statements are forward-looking statements. These forward-looking statements are subject to risks and uncertainties, including the risks and uncertainties described in “Risk Factors” in this Form 10-K. Our actual results may differ materially from those contained in or implied by any forward-looking statements. We assume no obligation to revise or publicly release any revision to any forward-looking statements contained in this Form 10-K, unless required by law.

Business Overview

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 partner with or explore the sale of discrete assets, such as our sale of a senior living community property in September 2025, in order to optimize resource allocation and maximize value. See Note 4. Joint Ventures included in Item 15 of this Form 10-K for additional information. We seek to continue to enhance the value of our owned real estate assets by developing residential, hospitality and commercial 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.

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 developing long-term, scalable residential communities, growing our hospitality offerings and expanding our portfolio of income producing commercial properties. 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. These investments are made with a long-term value creation perspective. 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.

Our real estate investment strategy focuses on projects that meet long-term risk-adjusted return criteria. Our practice is to only incur such expenditures when our analysis indicates that a project will generate a return equal to or greater than the threshold return over its life.

Highlights for the year ended December 31, 2025 compared to the year ended December 31, 2024 include:

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Market Conditions

While macroeconomic factors such as uncertainty over tariffs, inflation, elevated interest rates and higher insurance costs for consumers and overall consumer confidence, among other things, continued to produce economic headwinds and impacted buyer sentiment in many parts of the country, our segments continued to generate positive financial results throughout 2025. We believe this is primarily due to the continued growth of Northwest Florida as a result of net migration, which we attribute to the region’s high quality of life, natural beauty and outstanding amenities.

While elevated interest rates, market conditions in their home states and higher insurance costs have negatively impacted or delayed the ability of some buyers to obtain financing or sell their existing home in their home state, the impact has been partially offset by the net migration into our markets and the number of cash buyers. Market conditions have also not caused an increase in cancellation rates as homebuilders have continued to perform on their contractual obligations with us.

Given our diverse portfolio of residential holdings, the mix of sales and pricing from different communities may impact revenue and margins period over period, as discussed in more detail below. Further discussion of the potential impacts on our business from the current macroeconomic environment are included in Part I. Item 1A. Risk Factors.

Reportable Segments

We conduct primarily all of our business in the following three reportable segments: 1) residential, 2) hospitality and 3) commercial.

The following table sets forth the relative contribution of these reportable segments to our consolidated operating revenue:

​

For more information regarding our reportable segments, see Note 18. Segment Information included in Item 15 of this Form 10-K for additional information.

Residential Segment

Our residential segment typically plans and develops residential communities of various sizes across a wide range of price points and sells homesites to homebuilders or retail consumers. Our residential segment also evaluates opportunities to enter into JV agreements for specific communities such as Latitude Margaritaville Watersound.

The residential segment generates revenue from sales of homesites, homes and other residential land and certain homesite residuals from homebuilder sales that provide us a percentage of the sale price of the completed home if the home price exceeds a negotiated threshold. Revenue is recognized at the point in time when a sale is closed and title and control has been transferred to the buyer. The residential segment also generates revenue from the sale of tap and impact fee credits, marketing fees and other fees on certain transactions. Certain homesite residuals and other revenue related to

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homebuilder homesite sales are recognized in revenue at the point in time of the closing of the sale. The residential segment incurs cost from direct costs (e.g., development and construction costs), selling costs and other indirect costs. Cost of real estate revenue excludes depreciation, depletion and amortization expense.

Our residential segment includes the Bayside at Ward Creek, Breakfast Point East, Breakwater at Ward Creek, College Station, Park Place, Salt Creek at Mexico Beach, Salt Grass at Ward Creek, Titus Park, Watersound Camp Creek, Watersound Origins, Watersound Origins West and WindMark Beach communities, which are large scale, multi-phase communities with current development activity, sales activity or future phases. Homesites in these communities are developed based on market demand and sold primarily to homebuilders and on a limited basis to retail customers.

The East Lake Creek, East Lake Powell, Lake Powell, Pigeon Creek, 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.

The SummerCamp Beach community has homesites available for sale and along with the RiverCamps and SouthWood communities, have additional lands for future development.

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 3,700 residential homes, which are being developed in smaller increments of discrete neighborhoods. As of December 31, 2025, the unconsolidated Latitude Margaritaville Watersound JV has completed 2,190 home sale transactions of the total estimated 3,700 homes planned in the community and had 149 homes under contract, which are expected to result in a sales value to the JV of approximately $88.8 million at closing of the homes. See Note 4. Joint Ventures included in Item 15 of this Form 10-K for additional information.

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The residential homesite pipeline by community/project are as follows:

​

In addition to the communities listed above, we have a number of other residential project concepts in various stages of planning and evaluation.

As of December 31, 2025, we had eighteen different homebuilders within our residential communities. As of December 31, 2025, we had 1,992 residential homesites under contract, which are expected to result in revenue of approximately $143.5 million, plus residuals, at closing of the homesites over the next several years. By comparison, as of December 31, 2024, we had 1,074 residential homesites under contract, which were expected to result in revenue of approximately $102.0 million, plus residuals. The change in homesites under contract is due to homesite transactions during 2025, new contracts, including a long-term contract totaling approximately 650 undeveloped homesites within the SouthWood community, 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 December 31, 2025, in addition to the 1,992 homesites under contract in other residential communities, our unconsolidated Latitude Margaritaville Watersound JV had 149 homes under contract, which together with the 1,992 homesites are expected to result in a sales value of approximately $232.3 million at closing of the homesites and homes.

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Hospitality Segment

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 offerings. 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. Our hospitality segment may also generate revenue from the sale of operating properties. Real estate sales in our hospitality segment incur costs of revenue directly associated with the land, development, construction and selling costs. Cost of hospitality revenue and cost of real estate revenue exclude depreciation, depletion and amortization expense. Some of our JV assets and other assets incur interest and financing expenses related to the loans as described in Note 9. Debt, Net included in Item 15 of this Form 10-K.

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 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.

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, Watersound Origins West and Watersound Villas on the Fairway members consisting of the communities’ residents. In addition, an executive golf course located in the community is available to residents and for public play.

We own and operate the award-winning WaterColor Inn (which includes the Fish Out of Water restaurant) and The Pearl Hotel (which includes the Havana Beach Bar & Grill restaurant); the Camp Creek Inn, the Hilton Garden Inn Panama City Airport, the Homewood Suites by Hilton Panama City Beach, the Hotel Indigo Panama City Marina, the Home2 Suites by Hilton Santa Rosa Beach, the Watersound Inn and two gulf-front vacation rental houses. With our JV partners, we own and operate The Lodge 30A and the Embassy Suites by Hilton Panama City Beach Resort. We also operate the WaterColor Beach Club, which includes food and beverage operations and other hospitality related activities, such as beach chair rentals.

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Our hotel portfolio by property is as follows:

We own and operate two marinas, the Point South Marina Bay Point in Bay County, Florida and Point South Marina Port St. Joe in Gulf County, Florida. We are planning new marinas along the Intracoastal Waterway.

We also own and operate retail stores, two standalone restaurants and other entertainment assets.

In addition to the properties listed above, we have a number of hospitality projects in various stages of planning.

Commercial Segment

Our commercial segment includes leasing of commercial property, multi-family, self-storage and other assets, as well as senior living prior to the sale of the SJWCSL, LLC’s (“Watercrest JV”) senior living community property in September 2025. See Note 4. Joint Ventures included in Item 15 of this Form 10-K for additional information. 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 believe the diversity of our commercial segment complements the growth of our residential and hospitality segments. 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 FSU and 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.

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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. Cost of leasing revenue and cost of real estate revenue exclude depreciation, depletion and amortization expense. Some of our JV assets and other assets incur interest and financing expenses related to loans as described in Note 9. Debt, Net included in Item 15 of this Form 10-K.

Total units and percentage leased for multi-family and senior living communities by location are as follows:

​

Our leasing portfolio consists of approximately 1,174,000 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 (Pier Park TPS JV), a 121-room

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Residence Inn (Pier Park RI JV), a Busy Bee branded fuel station and convenience store, which includes a Starbucks, (SJBB, LLC, the “Busy Bee JV”) and a golf cart sales and service facility (SJECC, LLC, the “Electric Cart Watersound JV”), all located in Bay County, Florida.

The total net leasable square feet and percentage leased of leasing properties are as follows:

​

We have commercial projects under development and construction as detailed in the table below. In addition to these properties, we have other commercial buildings and sites in various stages of planning and development.

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​

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Results of Operations

Consolidated Results

The following table sets forth a comparison of the results of our operations:

Results of operations in this Form 10-K generally discusses 2025 and 2024 items and comparisons. For a detailed discussion of results of operations and comparisons for 2024 and 2023, see Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, included in our Form 10‑K for the year ended December 31, 2024 filed with the SEC on February 26, 2025.

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Real Estate Revenue and Gross Profit

The following table sets forth a comparison of our total consolidated real estate revenue and gross profit:

Residential Real Estate Revenue and Gross Profit. During 2025, residential real estate revenue increased $48.2 million, or 41.3%, to $165.0 million, as compared to $116.8 million in 2024. During 2025, residential real estate gross profit increased $26.7 million, to $81.5 million (or gross margin of 49.4%), as compared to $54.8 million, (or gross margin of 46.9%) in 2024. During 2025, we sold 911 homesites, 25 homes and had an unimproved residential land sale of $0.9 million, compared to 912 homesites and no homes or unimproved residential land sales during 2024. During 2025 and 2024 the average base revenue, excluding homesite residuals, per homesite sold was approximately $137,000 and $108,000, respectively, due to the mix of sales from different communities. Homesite sales during 2024 also include the sale of 82 entitled but undeveloped homesites sold within the SouthWood community, compared to none in the current period. 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 development and the volume of sales within each of the communities. The number of homesites sold varied in each period due to the timing of homebuilder contractual closing obligations in our residential communities.

Commercial and Forestry Real Estate Revenue and Gross Profit. During 2025, we had sixteen commercial, hospitality and forestry real estate sales totaling approximately 351 acres for $57.1 million, resulting in a gross profit of $32.3 million (or gross margin of 56.6%). The commercial, hospitality and forestry real estate sales during 2025, included the sale of the Watercrest JV’s senior living community property for $41.0 million, resulting in a gross margin of approximately 47.2% and a commercial property used in hospitality operations for $1.4 million resulting in a gross margin of approximately 42.9%. See Note 4. Joint Ventures included in Item 15 of this Form 10-K for additional information. During 2024, we had eleven commercial and forestry real estate sales totaling approximately 634 acres for $18.0 million, resulting in a gross profit of $13.1 million (or gross margin of 72.8%).

Revenue from commercial and forestry real estate can vary significantly from period-to-period depending on the proximity to developed areas and mix of real estate sold in each period, with varying compositions of retail, office, industrial, timber and other commercial uses. Our gross margin can vary significantly from period-to-period depending on the characteristics of the property sold. Sales of forestry land typically have a lower cost basis than residential and commercial real estate sales. In addition, our cost basis in residential and commercial real estate can vary depending on the amount of development or other costs incurred on the property.

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Timber Revenue and Gross Profit. Timber revenue was $4.2 million during each of 2025 and 2024. There were 246,000 tons of wood products sold at an average price per ton of $16.02 during 2025, as compared to 256,000 tons of wood products sold at an average price per ton of $14.56, during 2024. Timber gross margin was 81.0% during both 2025 and 2024.

Other Revenue. Other revenue primarily consists of our real estate brokerage, title insurance agency and insurance agency business revenue and mitigation bank credit sales. Other revenue increased $3.7 million during 2025, compared to 2024, primarily due to our real estate brokerage business, which began operations in the second quarter of 2025.

Hospitality Revenue and Gross Profit

​

Hospitality revenue increased $16.2 million, or 8.1% to $215.4 million during 2025, as compared to $199.2 million in 2024. The increase in hospitality revenue was primarily related to the increase 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 also related to an increase in hotel operations. As of December 31, 2025, Watersound Club had 3,594 members, compared with 3,476 members as of December 31, 2024, a net increase of 118 members. As of both December 31, 2025 and 2024, we had 1,053 operational hotel rooms (excluding 245 hotel rooms related to unconsolidated JVs). Hospitality gross margin was 31.1% during 2025, compared to 31.5% during 2024. The decrease in gross margin was primarily due to ongoing operating costs for The Third golf course and reopening and ongoing operating costs of the Shark’s Tooth clubhouse during the current period.

Leasing Revenue and Gross Profit

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Leasing revenue increased $3.3 million, or 5.5%, to $63.6 million during 2025, as compared to $60.3 million in 2024. The increase was primarily due to additional commercial property, multi-family and marina leases, partially offset by a decrease related to the Watercrest JV’s senior living community property, which was sold and ceased operating activities, and the sale of 24 townhomes in the Watersound Villas on the Fairway community in the current period. Leasing gross margin increased to 55.3% during 2025, as compared to 52.2% during 2024. The increase in leasing gross margin was primarily due to additional leases in the current period and the sale of the Watercrest JV’s senior living community property in September 2025, which operated with lower margins.

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Corporate and Other Operating Expenses

Corporate and other operating expenses increased $2.1 million, or 8.3%, to $27.3 million during 2025, as compared to $25.2 million in 2024. The increase was due to increased operating costs, primarily related to employee costs, property taxes, licenses, professional fees, marketing and owner association costs.

Depreciation, Depletion and Amortization

Depreciation, depletion and amortization expense increased $1.1 million during 2025, as compared to 2024, primarily due to new hospitality and commercial assets placed in service, partially offset by assets sold in the current period. Depreciation is a non-cash, generally accepted accounting principles (“GAAP”) expense, which is amortized over an asset’s useful life, while maintenance and repair expenses are period costs and expensed as incurred. See Note 2. Significant Accounting Policies included in Item 15 of this Form 10-K for additional information.

Investment Income, Net

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 a special purpose entity and (iii) interest earned on notes receivable, the Company’s unimproved land contribution to the unconsolidated Latitude Margaritaville Watersound JV as home sales are transacted in the community and other receivables as detailed in the table below:

​

Investment income, net decreased $0.3 million during 2025, as compared to 2024, primarily due to less interest earned on the unimproved land contribution to our unconsolidated Latitude Margaritaville Watersound JV related to the decreased volume of home sales transacted in the community during the current period. The decrease was also due to lower yields on our cash, cash equivalents and other investments, partially offset by higher balances of cash, cash equivalents and other investments in the current period. See Note 4. Joint Ventures included in Item 15 of this Form 10-K for additional information.

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Interest Expense

Interest expense primarily includes interest incurred on project financing, the Senior Notes issued by Northwest Florida Timber Finance, LLC (“Senior Notes”), Community Development District (“CDD”) debt and finance leases, as well as amortization of debt discount and premium and debt issuance costs as detailed in the table below:

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Interest expense decreased $3.1 million, or 9.2%, to $30.5 million in 2025, as compared to $33.6 million in 2024. The decrease in interest expense is due to repayment of project financing and a decrease in interest rates from the prior period. See Note 9. Debt, Net and Note 17. Other Income, Net included in Item 15 of this Form 10-K for additional information regarding project financing.

Equity in Income from Unconsolidated Joint Ventures

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 Ventures included in Item 15 of this Form 10-K for additional information.

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Other Income (Expense), Net

Other income (expense), net primarily includes accretion income from our retained interest investments, gain on contributions to unconsolidated joint ventures, gain (loss) on disposition of assets and other income and expense items as detailed in the table below:

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​

Other income (expense), net increased $1.3 million to other income, net of $0.6 million during 2025, as compared to other expense, net of $0.7 million in 2024.

Accretion income from retained interest investments includes 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.

Gain on contributions to unconsolidated joint ventures includes gain on additional infrastructure improvements contributed to our unconsolidated Latitude Margaritaville Watersound JV. See Note 4. Joint Ventures included in Item 15 of this Form 10-K for additional information.

Gain on disposition of assets during 2025 primarily includes a gain on the sale of our Pilatus PC-12 NG aircraft (“N850J”) previously used in hospitality operations. Loss on disposition of assets during 2024 primarily includes loss on disposal of hospitality assets.

Miscellaneous (expense) income, net during 2025, primarily includes expense of $1.2 million for design costs for certain residential, hospitality and commercial assets that we are no longer pursuing. Miscellaneous (expense) income, net during 2025 also includes loss on early extinguishment of debt related to the payoff of the Watercrest JV Loan, as well as fees related to other loans. See Note 9. Debt, Net and Note 17. Other Income, Net included in Item 15 of this Form 10-K for additional information.

Income Tax Expense

Income tax expense was $39.2 million in 2025, as compared to $26.0 million during 2024. Our effective tax rate was 25.3% in 2025, as compared to 26.4% in 2024.

Our effective rate for 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 12. Income Taxes included in Item 15 of this Form 10-K for additional information.

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Segment Results

Residential

The table below sets forth the consolidated results of operations of our residential segment:

The following tables set forth our consolidated residential real estate revenue and cost of revenue activity:

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Year Ended December 31, 2025 Compared to the Year Ended December 31, 2024

The following discussion sets forth details of the consolidated results of operations of our residential segment.

Homesites. Revenue from homesite sales increased $32.7 million, or 30.5%, during 2025, as compared to 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 2025 and 2024, the average base revenue, excluding homesite residuals, per homesite sold was approximately $137,000 and $108,000, respectively, due to the mix of sales from different communities. Homesite sales during 2024 also include the sale of 82 entitled but undeveloped homesites sold within the SouthWood community, compared to none in the current period. Revenue includes estimated homesite residuals of $10.9 million and $3.6 million, during 2025 and 2024, respectively. The increase in estimated homesite residuals was due to the mix and number of homesites sold in specific communities during the current period. Homesite gross margin increased to 50.5% during 2025, as compared to 47.0% during 2024, primarily due to the cost, mix and number of homesites sold from different communities during each period. Gross margin may vary each period depending on the location of homesite sales.

Homes. During 2025, we sold 24 completed townhomes within our Watersound Villas on the Fairway community and a home within our Watersound Origins community for a total of $14.2 million, resulting in a gross margin of 36.6%. During 2024, we did not have any home sales.

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Land sales. During 2025, we had an unimproved residential land sale for $0.9 million, with de minimis cost of revenue. During 2024, we did not have any unimproved residential land sales.

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 $2.8 million and $2.5 million during 2025 and 2024, respectively.

Leasing revenue includes long-term leases of residential assets.

Other operating expenses include salaries and benefits, property taxes, marketing, professional fees, project administration, owner association and CDD assessments and other administrative expenses.

Investment income, net consists of interest earned on our unimproved land contribution to our unconsolidated Latitude Margaritaville Watersound JV as home sales are transacted in the community. Investment income, net decreased $0.2 million during 2025, as compared to 2024, due to fewer home sales transacted in the community during the current period. See Note 4. Joint Ventures included in Item 15 of this Form 10-K for additional information. Interest expense primarily consists of interest incurred on our portion of the total outstanding CDD debt. See Note 9. Debt, Net included in Item 15 of this Form 10-K for additional information.

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 $2.9 million during 2025, compared to 2024. The increase was primarily due to higher average sales price and margin per home sold, partially offset by the decreased volume of home sale transactions. The year ended December 31, 2025, also includes $0.5 million of intra-entity profit elimination related to the sale of additional land to our unconsolidated Latitude Margaritaville Watersound JV, a pro-rata portion of which will be recognized as each home on the land is sold by the JV. The Latitude Margaritaville Watersound JV completed 527 home sale transactions during 2025, compared to 659 home sale transactions during 2024. See Note 4. Joint Ventures included in Item 15 of this Form 10-K for additional information.

Other (expense) income, net in 2025 primarily includes expense of $0.6 million for design costs for certain residential assets that we are no longer pursuing.

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Hospitality

The table below sets forth the consolidated results of operations of our hospitality segment:

The following table sets forth details of our hospitality segment consolidated revenue and gross profit:

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Year Ended December 31, 2025 Compared to Year Ended December 31, 2024

Revenue from our clubs increased $10.7 million, or 13.2%, during 2025, as compared to 2024. The increase in revenue in the current period was due to an increase in membership dues, membership ancillary spend, lodging related to the Camp Creek Inn, 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 December 31, 2025, Watersound Club had 3,594 members, compared with 3,476 members as of December 31, 2024, a net increase of 118 members. Our clubs gross margin was 42.2% during 2025, compared to 44.6% during 2024. The decrease in gross margin was primarily due to ongoing operating costs for The Third golf course and reopening and ongoing operating costs of the Shark’s Tooth clubhouse during the current period.

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Revenue from our hotel operations increased $4.6 million, or 4.4%, during 2025, as compared to 2024. The increase was primarily related to lodging revenue, as well as guest ancillary spend. Our hotels had a gross margin of 24.2% during 2025, comparable to 23.5% during 2024.

As of both December 31, 2025 and 2024, we had 1,053 operational hotel rooms (excluding 245 hotel rooms related to unconsolidated JVs).

Revenue from other hospitality operations increased $0.9 million, or 7.1%, during 2025, as compared to 2024. The increase was primarily due to our standalone restaurants and marina operations. Our other hospitality operations gross margin was 11.8% during 2025, compared to 15.7% during 2024. The decrease in gross margin was due to increased operational costs during the current period.

Leasing revenue includes marina boat slip and dry storage rentals, as well as leases of other hospitality assets. Leasing revenue increased $0.4 million, or 11.4%, during 2025, as compared to 2024, primarily due to increased occupancy and rates at our marinas and other hospitality assets.

Real estate revenue during 2025, includes the sale of a hospitality property for $1.4 million, resulting in a gross profit of $0.6 million (or gross margin of 42.9%).

Other operating expenses include salaries and benefits, professional fees, repairs and maintenance, and other administrative expenses. The increase of $0.4 million in other operating expenses during 2025, as compared to 2024, was primarily related to repair and maintenance and salaries and benefits expenses in the current period.

The increase of $1.5 million in depreciation, depletion and amortization expense during 2025, as compared to 2024, was primarily due to new assets placed in service, partially offset by assets sold in the current period.

Interest expense primarily includes interest incurred from our hospitality project financing. The decrease of $1.4 million in interest expense during 2025, as compared to 2024, was primarily due to repayment of project financing and a decrease in interest rates from the prior period. See Note 9. Debt, Net included in Item 15 of this Form 10-K for additional information.

Other income (expense), net during 2025 primarily includes a gain of $2.6 million on the sale of our N850J aircraft previously used in hospitality operations, partially offset by expense of $0.5 million for design costs for certain hospitality assets that we are no longer pursuing. Other income (expense), net during 2024 primarily includes net loss on disposal of assets.

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Commercial

The table below sets forth the consolidated results of operations of our commercial segment:

​

The following table sets forth details of our commercial segment consolidated revenue and gross profit:

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Year Ended December 31, 2025 Compared to Year Ended December 31, 2024

The following discussion sets forth details of the consolidated results of operations of our commercial segment.

Total leasing revenue increased $2.7 million, or 4.8% during 2025, as compared to 2024. The increase was primarily due to additional commercial property and multi-family leases, partially offset by a decrease for assets sold during the current period. Total leasing gross margin during 2025 increased to 57.0%, as compared to 54.1% during 2024. The increase in leasing gross margin was primarily due to additional leases in the current period and the sale of the Watercrest JV’s senior living community property in September 2025, which operated with lower margins. As of December 31, 2025, we had net leasable square feet of approximately 1,174,000, of which approximately 1,133,000 square feet were under lease. As of December 31, 2024, we had net leasable square feet of approximately 1,182,000, of which approximately 1,126,000 square feet were under lease. As of December 31, 2025 and 2024, our consolidated entities had 1,104 and 1,235, respectively, multi-family and senior living units completed, of which 988 and 1,064, respectively, were leased (excludes 148 senior living units related to the unconsolidated Watersound Fountains Independent Living JV). The number of multi-family and senior living units decreased during 2025, due to the Watercrest JV’s senior living community property, which was sold and ceased operating activities, and the sale of 24 townhomes in the Watersound Villas on the Fairway community. See Note 4. Joint Ventures included in Item 15 of this Form 10-K for additional information.

Commercial and forestry real estate revenue related to sales during the three years ended December 31, 2025 includes the following:

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 2025, we had fifteen commercial and forestry real estate sales of approximately 351 acres for $55.7 million, resulting in a gross margin of approximately 56.9%. The year ended December 31, 2025, included the sale of the Watercrest JV’s senior living community property for $41.0 million, resulting in a gross margin of approximately 47.2%. See Note 4. Joint Ventures included in Item 15 of this Form 10-K for additional information. During 2024, we had eleven commercial and forestry real estate sales of approximately 634 acres for $18.0 million, resulting in a gross margin of approximately 72.8%.

Timber revenue was $4.2 million during each of 2025 and 2024. There were 246,000 tons of wood products sold during 2025, as compared to 256,000 tons of wood products sold during 2024. The average price of wood products sold increased to $16.02 per ton during 2025, as compared to $14.56 per ton during 2024. Timber gross margin was 81.0% during both 2025 and 2024.

Other operating expenses include salaries and benefits, property taxes, CDD assessments, professional fees, marketing, project administration and other administrative expenses. The increase of $0.8 million in other operating expenses during 2025, as compared to 2024, was primarily related to property taxes.

The decrease of $0.4 million in depreciation, depletion and amortization expense during 2025, as compared to 2024, was primarily due to assets sold, partially offset by new assets placed in service in the current period.

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Interest expense primarily includes interest incurred from our commercial project financing and CDD debt. The decrease of $1.7 million in interest expense during 2025, as compared to 2024, was primarily due to repayment of project financing and a decrease in interest rates from the prior period. See Note 9. Debt, Net included in Item 15 of this Form 10-K for additional information.

Equity in loss from unconsolidated joint ventures includes our proportionate share of earnings or losses of unconsolidated JVs accounted for using the equity method. Equity in loss from unconsolidated joint ventures was $6.6 million during 2025, as compared to $5.7 million in 2024. Equity in loss from unconsolidated joint ventures during 2025 includes start-up, depreciation and interest expenses related to the Pier Park RI JV, which opened a 121-room hotel in April 2024. Equity in loss from unconsolidated joint ventures during 2025 and 2024, also includes lease-up, depreciation and interest expenses related to the Watersound Fountains Independent Living JV, which opened a 148-unit independent senior living community in March 2024 and is currently under lease-up. See Note 4. Joint Ventures included in Item 15 of this Form 10-K for additional information.

Other (expense) income, net during 2025 primarily includes loss on early extinguishment of debt related to the payoff of the Watercrest JV Loan, as well as fees related to other loans. See Note 9. Debt included in Item 15 of this Form 10-K for additional information.

Liquidity and Capital Resources

As of December 31, 2025, we had cash and cash equivalents of $129.6 million, compared to $88.8 million as of December 31, 2024.

We believe that our current cash position, financing arrangements and cash generated from operations will provide us with sufficient liquidity to satisfy our anticipated working capital needs, expected capital expenditures, principal and interest payments on our long-term debt, authorized stock repurchases and authorized dividends for the next twelve months. See Part I. Item 1A. Risk Factors.

During 2025, we invested a total of $108.1 million in capital expenditures, which includes $77.9 million for our residential segment, $8.9 million for our hospitality segment, $18.6 million for our commercial segment and $2.7 million for corporate and other expenditures. The $108.1 million in capital expenditures included $103.8 million for development or for new operating assets and $4.3 million for sustaining capital on existing operating properties. We anticipate that future capital commitments will be funded through cash generated from operations, cash and cash equivalents on hand and new financing arrangements. As of December 31, 2025, we had a total of $32.1 million primarily in construction and development related contractual obligations. Capital expenditures and contractual obligations exclude amounts related to unconsolidated JVs. See Note 4. Joint Ventures included in Item 15 of this Form 10-K for additional information.

As of December 31, 2025 and 2024, we had various loans outstanding totaling $396.0 million and $442.7 million, respectively, with maturities from April 2027 through March 2064. As of December 31, 2025, the weighted average effective interest rate of total outstanding debt was 4.8%, of which 80.8% includes fixed or swapped interest rates, and the average remaining life was 19.6 years. As of December 31, 2025, the weighted average rate on our variable rate loans, excluding the swapped portion, was 5.9%. See Note 9. Debt, Net included in Item 15 of this Form 10-K for additional information.

Our indebtedness consists of various loans on real and leasehold property. These loans are typically secured by various interests in the property such as assignment of rents, leases, deposits, permits, plans, specifications, fees, agreements, approvals, contracts, licenses, construction contracts, development contracts, service contracts, franchise agreements, the borrower’s assets, improvements, and security interests in the rents, personal property, management agreements, construction agreements, improvements, accounts, profits, leases and fixtures (collectively, “Security Interests”). The specific Security Interests vary from loan to loan.

In 2015, the Pier Park North JV (the “Pier Park North JV”) entered into a $48.2 million loan (the “PPN JV Loan”). In September 2025, the PPN JV Loan was refinanced, which increased the principal amount of the loan from $39.5

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million to $40.0 million and fixed the interest rate to 6.1%. The refinanced loan provides for monthly payments of principal and interest, with a final ballon payment at maturity in October 2035. As of December 31, 2025 and 2024, $39.9 million and $40.4 million, respectively, was outstanding on the PPN JV Loan. The loan may not be prepaid prior to October 2029. Commencing in October 2029 through May 2035, any principal prepaid is subject to a prepayment fee equal to the greater of (i) a prepayment ratio, as outlined in the loan agreement, or (ii) 1% of the amount prepaid. From June 2035 through maturity, the loan may be prepaid without a prepayment fee upon prior written notice. In connection with the loan, we entered into a limited guarantee in favor of the lender with respect to environmental indemnity matters and specified non-recourse carveouts outlined in the loan agreement. We incurred $0.3 million in loan costs due to the refinance. See Note 9. Debt, Net included in Item 15 of this Form 10-K for additional information.

In 2018, Pier Park Crossings LLC (the “Pier Park Crossings JV”) entered into a $36.6 million loan, insured by the U.S. Department of Housing and Urban Development (“HUD”), as amended, (the “PPC JV Loan”). As of December 31, 2025 and 2024, $33.6 million and $34.2 million, respectively, was outstanding on the PPC JV Loan. The loan bears interest at a rate of 3.1% and matures in June 2060. The loan includes a prepayment premium due to the lender of 2% - 7% for any additional principal that is prepaid through August 2031. The loan is secured by the real property and certain other Security Interests. See Note 9. Debt, Net included in Item 15 of this Form 10-K for additional information.

In 2019, a wholly-owned subsidiary of ours entered into a $5.5 million loan, which is guaranteed by us (the “Beckrich Building III Loan”). As of December 31, 2025 and 2024, $1.1 million and $5.0 million, respectively, was outstanding on the Beckrich Building III Loan. The loan bears interest at a rate of SOFR plus 1.8% and matures in August 2029. The loan is secured by the real property and certain other Security Interests. See Note 9. Debt, Net included in Item 15 of this Form 10-K for additional information. In January 2026, the loan was paid in full.

In 2020, a wholly-owned subsidiary of ours entered into a $15.3 million loan, which is guaranteed by us (the “Airport Hotel Loan”). As of December 31, 2025 and 2024, $3.2 million and $11.7 million, respectively, was outstanding on the Airport Hotel Loan. The loan bears interest at SOFR plus 2.1%, with a floor of 3.0%. In February 2025, the Airport Hotel Loan maturity date was extended from March 2025 to February 2030. 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 9. Debt, Net included in Item 15 of this Form 10-K for additional information.

In 2020, Pier Park Resort Hotel, LLC (the “Pier Park Resort Hotel JV”) entered into a loan with an initial amount of $52.5 million up to a maximum of $60.0 million through additional earn-out requests (the “Pier Park Resort Hotel JV Loan”). As of December 31, 2025 and 2024, $49.8 million and $50.9 million, respectively, was outstanding on the Pier Park Resort Hotel JV Loan. The loan matures in April 2027 and bears interest at a rate of SOFR plus 2.1%. The loan is secured by the real property and certain other Security Interests. In connection with the loan, as guarantors, we and our JV partner entered into a guarantee based on each partner’s ownership interest in favor of the lender, to guarantee the payment and performance of the borrower. As guarantor, our liability under the loan can be released upon reaching and maintaining certain debt service coverage. In addition, the guarantee can become full recourse in the case of the failure of the guarantor to abide by or perform any of the covenants or warranties to be performed on the part of such guarantor. The Pier Park Resort Hotel JV entered into an interest rate swap to hedge cash flows tied to changes in the underlying floating interest rate tied to SOFR. The interest rate swap matures in April 2027 and fixed the variable rate on the notional amount of related debt, initially at $42.0 million, amortizing to $38.7 million at swap maturity, to a rate of 3.2%. See Note 5. Financial Instruments and Fair Value Measurements and Note 9. Debt, Net included in Item 15 of this Form 10-K for additional information.

In 2020, a wholly-owned subsidiary of ours entered into a $16.8 million loan, which is guaranteed by us (the “Breakfast Point Hotel Loan”). As of December 31, 2025 and 2024, $15.0 million and $15.5 million, respectively, was outstanding on the Breakfast Point Hotel Loan. The loan matures in November 2042 and bears interest at a rate of 6.0% through November 2027 and the 1-year constant maturity Treasury rate plus 3.3% from December 2027 through November 2042, with a minimum rate of 6.0% throughout the term of the loan. The loan includes a prepayment premium due to the lender of 1% of the outstanding principal balance for any additional principal that is prepaid through November 2027. The loan is secured by the real property and certain other Security Interests. See Note 9. Debt, Net included in Item 15 of this Form 10-K for additional information.

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In 2021, 30A Greenway Hotel, LLC (“The Lodge 30A JV”) entered into a $15.0 million loan (the “Lodge 30A JV Loan”). As of December 31, 2025 and 2024, $13.6 million and $14.1 million, respectively, was outstanding on the Lodge 30A JV Loan. The loan bears interest at a rate of 3.8% and matures in January 2028. The loan is secured by the real property and certain other Security Interests. In connection with the loan, we, wholly-owned subsidiaries of ours and our JV partner entered into a joint and several payment and performance guarantee in favor of the lender. Upon reaching a certain debt service coverage ratio for a minimum of twenty-four months, our liability as guarantor can be reduced to 75% of the outstanding principal amount for a twelve-month period. The debt service coverage ratio will be tested annually thereafter and can be reduced to 50% in year four and 25% in year five. We receive a monthly fee related to the guarantee from our JV partner based on the JV partner’s ownership percentage. See Note 9. Debt, Net included in Item 15 of this Form 10-K for additional information.

In 2021, a wholly-owned subsidiary of ours entered into a loan, as amended (the “North Bay Landing Loan”). 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 principal and interest payments through maturity in March 2060. As of December 31, 2025 and 2024, $27.6 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. We incurred $0.6 million in loan costs due to the refinance. As a result of the refinance, 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 consolidated statements of income. See Note 9. Debt, Net included in Item 15 of this Form 10-K for additional information.

In 2021, a wholly-owned subsidiary of ours entered into a $28.0 million loan, which is guaranteed by us (the “Watersound Camp Creek Loan”). As of December 31, 2025 and 2024, $26.8 million and $27.4 million, respectively, was outstanding on the Watersound Camp Creek Loan. The loan matures in December 2047 and bears interest at a rate of SOFR plus 2.1%, with a floor of 2.6%. The loan is secured by the real property and certain other Security Interests. As guarantor, our liability under the loan will be reduced to 50% of the outstanding principal amount upon the project reaching and maintaining a trailing six months of operations with a certain debt service coverage ratio and reduced to 25% of the outstanding principal amount upon reaching and maintaining a trailing twelve months of operations with a certain debt service coverage ratio. In addition, the guarantee can become full recourse in the case of the failure of the guarantor to abide by or perform any of the covenants, warranties or other certain obligations to be performed on the part of such guarantor. See Note 9. Debt, Net included in Item 15 of this Form 10-K for additional information.

In 2021, a wholly-owned subsidiary of ours entered into a $12.0 million loan, which is guaranteed by us (the “Watersound Town Center Grocery Loan”). As of December 31, 2025 and 2024, $4.7 million and $8.1 million, respectively, was outstanding on the Watersound Town Center Grocery Loan. The loan bears interest at SOFR plus 2.1%, with a floor of 2.3%, and matures in August 2031. The loan is secured by the real property and certain other Security Interests. As guarantor, our liability under the loan has been reduced to 25% of the outstanding principal amount after reaching a certain debt service coverage ratio. See Note 9. Debt, Net included in Item 15 of this Form 10-K for additional information.

In 2021, a wholly-owned subsidiary of ours entered into a $21.2 million loan, which is guaranteed by us (the “Hotel Indigo Loan”). As of December 31, 2025 and 2024, $19.0 million and $19.9 million, respectively, was outstanding on the Hotel Indigo Loan. The loan bears interest at a rate of SOFR plus 2.5%, with a floor of 2.5%. The loan matures in October 2028 and includes an option for an extension of the maturity date by sixty months, subject to certain conditions. The loan is secured by the leasehold property and certain other Security Interests. See Note 9. Debt, Net included in Item 15 of this Form 10-K for additional information.

In 2022, Mexico Beach Crossings, LLC (the “Mexico Beach Crossings JV”) entered into a $43.5 million loan, insured by HUD (the “Mexico Beach Crossings JV Loan”). As of December 31, 2025 and 2024, $42.5 million and $43.1 million, respectively, was outstanding on the Mexico Beach Crossings JV Loan. The loan bears interest at a rate of 3.0% and matures in March 2064. The loan includes a prepayment premium due to the lender of 1% - 9% for any principal that is prepaid through March 2034. The loan is secured by the real property and certain other Security Interests. See Note 9. Debt, Net included in Item 15 of this Form 10-K for additional information.

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In 2022, Pier Park Crossings Phase II LLC (the “Pier Park Crossings Phase II JV”) refinanced into a $22.9 million loan, insured by HUD (the “PPC II JV Loan”). As of December 31, 2025 and 2024, $21.4 million and $21.8 million, respectively, was outstanding on the PPC II JV Loan. The loan bears interest at a rate of 2.7% and matures in May 2057. The loan includes a prepayment premium due to the lender of 1% - 7% for any principal that is prepaid through May 2032. The loan is secured by the real property and certain other Security Interests. See Note 9. Debt, Net included in Item 15 of this Form 10-K for additional information.

In 2022, a wholly-owned subsidiary of ours entered into a $13.7 million loan, which is guaranteed by us (the “Topsail Hotel Loan”). As of December 31, 2025 and 2024, $11.2 million and $12.3 million, respectively, was outstanding on the Topsail Hotel Loan. The loan bears interest at a rate of SOFR plus 2.1%, with a floor of 3.0% and matures in July 2027. The loan is secured by the real property and certain other Security Interests. See Note 9. Debt, Net included in Item 15 of this Form 10-K for additional information.

In 2022, a wholly-owned subsidiary of ours entered into a $37.0 million loan, which is guaranteed by us (“The Pearl Hotel Loan”). As of December 31, 2025 and 2024, $32.6 million and $34.0 million, respectively, was outstanding on The Pearl Hotel Loan. The loan bears interest at a rate of 6.3% and matures in December 2032. The loan includes a prepayment fee due to the lender of 1% - 2% of the outstanding principal balance if the loan is refinanced with another financial institution through December 2027. The loan is secured by the real property and certain other Security Interests. See Note 9. Debt, Net included in Item 15 of this Form 10-K for additional information.

In 2023, Origins Crossings, LLC (the “Watersound Origins Crossings JV”) refinanced into a $52.9 million loan, insured by HUD (the “Watersound Origins Crossings JV Loan”). As of December 31, 2025 and 2024, $51.3 million and $52.0 million, respectively, was outstanding on the Watersound Origins Crossings JV Loan. The loan bears interest at a rate of 5.0% and matures in April 2058. The loan includes a prepayment premium due to the lender of 1% - 8% for any principal that is prepaid through April 2033. The refinanced loan is secured by the real property and certain other Security Interests. See Note 9. Debt, Net included in Item 15 of this Form 10-K for additional information.

CDD bonds financed the construction of infrastructure improvements in some of our communities. The principal and interest payments on the bonds are paid by assessments on the properties benefited by the improvements financed by the bonds. We have recorded a liability for CDD debt that is associated with platted property, which is the point at which it becomes fixed and determinable. Additionally, we have recorded a liability for the balance of the CDD debt that is associated with unplatted property if it is probable and reasonably estimable that we will ultimately be responsible for repayment. We have recorded CDD related debt of $2.6 million as of December 31, 2025. Total outstanding CDD debt related to our land holdings was $9.0 million as of December 31, 2025, which is comprised of $7.4 million at the SouthWood community, $1.5 million at the existing Pier Park retail center and less than $0.1 million at the Wild Heron residential community. We pay interest on this total outstanding CDD debt.

As of December 31, 2025, our unconsolidated Latitude Margaritaville Watersound JV, Watersound Fountains Independent Living JV, Pier Park TPS JV, Pier Park RI JV, Busy Bee JV and Electric Cart Watersound JV had various loans outstanding, some of which we have entered into guarantees. See Note 4. Joint Ventures and Note 19. Commitments and Contingencies included in Item 15 of this Form 10-K for additional information.

During 2025 and 2024, we paid dividends of $0.58 and $0.52, respectively, per share on our common stock for a total of $33.6 million and $30.4 million, respectively.

During 2025, we repurchased 798,622 shares of our common stock outstanding at an average repurchase price of $50.10, per share, for an aggregate repurchase price of $40.0 million, excluding the excise tax on stock repurchases in excess of issuances as a result of the IRA. During 2024, we repurchased 70,985 shares of our common stock outstanding at an average repurchase price of $47.38, per share, for an aggregate repurchase price of $3.4 million, excluding the excise tax on stock repurchases in excess of issuances as a result of the IRA. See Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities and Note 14. Stockholders’ Equity included in Item 15 of this Form 10-K for additional information regarding the Stock Repurchase Program and treasury stock retirement during 2025.

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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 Measurements and Note 12. Income Taxes included in Item 15 of this Form 10-K for additional information.

As of December 31, 2025 and 2024, 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 other financial guarantees of $14.7 million and $53.1 million, respectively, as well as standby letters of credit in the amount of $0.4 million and $0.7 million, respectively, which may potentially result in a liability to us if certain obligations are not met.

In conducting our operations, we routinely hold customers’ assets in escrow pending completion of real estate transactions, and are responsible for the proper disposition of these balances for our customers. These amounts are maintained in segregated bank accounts and have not been included in the accompanying consolidated balance sheets, consistent with GAAP and industry practice. The cash deposit accounts and offsetting liability balances for escrow deposits in connection with our title insurance agencies for real estate transactions were $8.0 million and $6.4 million as of December 31, 2025 and 2024, respectively. These escrow funds are not available for regular operations.

Summary of Cash Flows

A summary of our cash flows from operating, investing and financing activities are as follows:

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Cash Flows from Operating Activities

Net cash provided by operating activities includes net income, adjustments for non-cash items, distribution of earnings from unconsolidated joint ventures, changes in operating assets and liabilities and expenditures related to assets ultimately planned to be sold. Adjustments for non-cash items primarily include depreciation, depletion and amortization, equity in income from unconsolidated joint ventures, deferred income tax and cost of real estate sold. Net cash provided by operations was $190.7 million in 2025, as compared to $108.0 million in 2024. During 2025 net income was $115.9 million, compared to $72.4 million in 2024. The increase in net cash provided by operating activities was primarily due to the changes in net income, distribution of earnings from unconsolidated joint ventures, cost of real estate sold, deferred revenue and accounts payable and other liabilities, partially offset by the changes in equity in income from unconsolidated joint ventures, deferred income tax, expenditures for an acquisition of real estate to be sold, (gain) loss on disposal of property and equipment and other assets during the year. During 2025, the Watercrest JV sold its senior living community property to a third party for $41.0 million, resulting in a gross profit of $19.4 million and a corresponding cash distribution of $19.1 million made to us. During 2025, distribution of earnings from unconsolidated joint ventures were $35.6 million, compared to $26.8 million in 2024. See Note 4. Joint Ventures included in Item 15 of this Form 10-K for additional information.

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Cash Flows from Investing Activities

Net cash used in investing activities primarily includes capital expenditures for operating property and property and equipment used in our operations and capital contributions to unconsolidated joint ventures, partially offset by proceeds from the disposition of assets and maturities of assets held by special purpose entities. During 2025, net cash used in investing activities was $26.2 million, which included capital expenditures for operating property and property and equipment of $23.8 million, primarily for our commercial and hospitality segments, and capital contributions to unconsolidated joint ventures of $7.8 million, partially offset by proceeds from the disposition of assets of $4.6 million primarily related to the sale of our N850J aircraft and maturities of assets held by SPEs of $0.8 million. During 2024, net cash used in investing activities was $50.4 million, which included capital expenditures for operating property and property and equipment of $49.9 million, primarily for our commercial and hospitality segments, and capital contributions to unconsolidated joint ventures of $1.7 million, partially offset by maturities of assets held by special purpose entities of $0.8 million, proceeds from insurance claims of $0.2 million and capital distributions from unconsolidated joint ventures of $0.2 million.

Cash Flows from Financing Activities

Net cash used in financing activities was $124.3 million in 2025, compared to $52.1 million in 2024. Net cash used in financing activities during 2025, included principal payments for debt of $114.5 million primarily related to the refinance of the PPN JV Loan and North Bay Landing Loan and payoff of the Watercrest JV Loan, repurchase of 798,622 shares of our common stock outstanding of $40.3 million, including excise tax, dividends paid of $0.58 per share on our common stock of $33.6 million, capital distributions to non-controlling interest of $2.9 million, debt issuance costs of $0.6 million and principal payments for finance leases of $0.2 million. Net cash used in financing activities during 2025, were partially offset by borrowings on debt of $67.8 million related to the refinance of the PPN JV Loan and North Bay Landing Loan. See Note 9. Debt, Net included in Item 15 of this Form 10-K for additional information. Net cash used in financing activities during 2024 included dividends paid of $0.52 per share on our common stock $30.3 million, principal payments for debt of $18.2 million, repurchase of 70,985 shares of our common stock outstanding of $3.4 million, including excise tax, capital distributions to non-controlling interest of $1.0 million, principal payments for finance leases of $0.2 million and debt issuance costs of $0.1 million, partially offset by borrowings on debt of $1.1 million.

Critical Accounting Estimates

The discussion and analysis of our financial condition and results of operations are based upon our 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.

Investment in Real Estate, Net and Cost of Real Estate Revenue. Costs associated with a specific real estate project are capitalized during the development period. These development costs include land and common development costs (such as structures, roads, utilities and amenities). We capitalize costs directly associated with development and construction of identified real estate projects. Indirect costs that clearly relate to a specific project under development, such as project administration, interest (up to total interest expense) and real estate property taxes, may also be capitalized.

A portion of real estate development costs and estimates for costs to complete are allocated to each unit based on the relative sales value of each unit as compared to the estimated sales value of the total project. These estimates are reevaluated at least annually, and more frequently if warranted by market conditions, changes in the project’s scope or other factors, with any adjustments being allocated prospectively to the remaining property or units.

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The capitalization period relating to direct and indirect project costs is the period in which activities necessary to ready a property for its intended use are in progress. The period begins when such activities commence, typically when we begin the site work or construction on land already owned, and ends when the asset is substantially complete and ready for its intended use. In the event that the activities to ready the asset for its intended use are suspended, the capitalization period will cease until such activities are resumed. If we determine not to complete a project, any previously capitalized costs that are not recoverable are expensed in the period in which the determination is made and recovery is not deemed probable.

Our investments in real estate are carried at cost, net of depreciation and timber depletion, unless circumstances indicate that the carrying value of the assets may not be recoverable. If we determine that an impairment exists due to the inability to recover an asset’s carrying value, an impairment charge is recorded to the extent that the carrying value exceeds estimated fair value. If such assets were held for sale, the provision for loss would be recorded to the extent that the carrying value exceeds estimated fair value, including costs to sell.

Long-Lived Assets. Long-lived assets include our investments in land holdings, operating and development properties, property and equipment and investment in unconsolidated JV’s. We evaluate our investment in unconsolidated JVs for impairment during each reporting period. A series of operating losses of an investee or other factors may indicate that a decrease in the value of our investment in the unconsolidated JV has occurred. The amount of impairment recognized is the excess of the investment’s carrying value over its estimated fair value.

Our investments in land holdings, operating and development properties and property and equipment are carried at cost, net of depreciation and timber depletion. We review our long-lived assets for impairment quarterly to determine whether events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. As part of our review for impairment of long-lived assets, we review the long-lived asset’s carrying value, current period actual financial results as compared to prior period and forecasted results contained in our business plan and any other events or changes in circumstances to identify whether an indicator of potential impairment may exist. Some of the events or changes in circumstances that are considered as indicators of potential impairment include:

We use varying methods to determine if an impairment exists, such as (i) considering indicators of potential impairment, (ii) analyzing expected future cash flows and comparing the expected future undiscounted cash flows of the property to its carrying value or (iii) determining market resale values.

The accounting estimate related to real estate impairment evaluation is susceptible to change due to the use of assumptions about future sales proceeds and future expenditures. For projects under development or construction, an estimate of future cash flows on an undiscounted basis is performed using estimated future expenditures necessary to maintain the existing project and using management’s best estimates about future sales prices and planned holding periods. Based on our investment return criteria for evaluating our projects under development or undeveloped land, management’s assumptions used in the projection of undiscounted cash flows include:

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For operating properties, an estimate of undiscounted cash flows requires management to make similar assumptions about the use and eventual disposition of such properties. Some of the significant assumptions that are used to develop the undiscounted cash flows include:

Homesites substantially completed and ready for sale are measured at the lower of carrying value or fair value, including costs to sell. Management identifies homesites as being substantially completed and ready for sale when the properties are being actively marketed with intent to sell such properties in the near term and under current market conditions. Other homesites, which management does not intend to sell in the near term under current market conditions, are evaluated for impairment based on management’s best estimate of the long-term use and eventual disposition of such property.

Other properties that management does not intend to sell in the near term under current market conditions and has the ability to hold are evaluated for impairment based on management’s best estimate of the long-term use and eventual disposition of the property. Typically, assets are carried based on historical cost basis, which in some cases may exceed fair value if sold in the near term. The results of impairment analysis for development and operating properties are particularly dependent on the estimated holding and selling period for each asset group.

If a property is considered impaired, the impairment charge is determined by the amount the property’s carrying value exceeds its fair value. We use varying methods to determine fair value, such as (i) analyzing expected future cash flows, (ii) determining resale values in a given market, (iii) applying a capitalization rate to net operating income using prevailing rates in a given market or (iv) applying a multiplier to revenue using prevailing rates in a given market. The fair value of a property may be derived either from discounting projected cash flows at an appropriate discount rate, through appraisals of the underlying property, or a combination thereof.

We classify the assets and liabilities of a long-lived asset as held-for-sale when management approves and commits to a formal plan of sale and it is probable that a sale will be completed. The carrying value of the assets held-for-sale is then recorded at the lower of their carrying value or fair value, including costs to sell.

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Income Taxes. In preparing our consolidated financial statements, significant management judgment is required to estimate our income taxes. Our estimates are based on our interpretation of federal and state tax laws. We estimate our actual current tax due and assess temporary differences resulting from differing treatment of items for tax and accounting purposes. The temporary differences result in deferred tax assets and liabilities, which are included in our consolidated balance sheets. Adjustments may be required by a change in assessment of our deferred tax assets and liabilities, changes due to audit adjustments by federal and state tax authorities and changes in tax laws. To the extent adjustments are required in any given period, we will include the adjustments in the deferred tax assets and liabilities in our consolidated financial statements. We record a valuation allowance against our deferred tax assets as needed based upon our analysis of the timing and reversal of future taxable amounts and our historical and future expectations of taxable income.

In general, a valuation allowance is recorded, if based on all the available positive and negative evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Realization of our deferred tax assets is dependent upon us generating sufficient taxable income in future years in the appropriate tax jurisdictions to obtain a benefit from the reversal of deductible temporary differences and from loss carryforwards.

As of December 31, 2025 and 2024, we had $9.5 million and $9.1 million, respectively, of federal net operating loss carryforwards (“NOLs”). The federal NOLs are specific to our qualified opportunity funds (“QOF”) entity and do not expire. As of December 31, 2025 and 2024, we had state net NOLs of $5.8 million and $4.0 million, respectively. The majority of these state NOLs are available to offset future taxable income through 2044 and will begin expiring in 2040. As of December 31, 2025 and 2024, we did not have a valuation allowance. As of December 31, 2025 and 2024, we had income tax payable of $2.1 million and $1.8 million, respectively, included within accounts payable and other liabilities on the consolidated balance sheets. See Note 12. Income Taxes included in Item 15 of this Form 10-K for additional information.

Recently Adopted Accounting Pronouncements

Measurement of Credit Losses for Accounts Receivable and Contract Assets

In July 2025, the FASB issued ASU 2025-05, Financial Instruments - Credit Losses (Topic 326) Measurement of Credit Losses for Accounts Receivable and Contract Assets (“ASU 2025-05”) that provides a practical expedient for estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under Revenue from Contracts with Customers (Topic 606). As of December 31, 2025, we adopted this guidance, which will be applied prospectively, and elected the practical expedient to assume current conditions as of the balance sheet date do not change for the remaining life of the assets. The adoption of this guidance had no impact on our financial condition, results of operations, cash flows and related disclosures.

Recently Issued Accounting Pronouncements

Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”) that requires additional disclosure in the notes to the financial statements information about specific costs and expense categories, including purchases of inventory, employee compensation, depreciation, intangible asset amortization and selling expenses, as well as qualitative descriptions for certain other expenses. In January 2025, the FASB issued ASU 2025-01, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date (“ASU 2025-01”) that clarifies the effective date of ASU 2024-03. This guidance will be effective for annual reporting periods beginning after December 15, 2026, and for interim reporting periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. The guidance should be applied either prospectively for periods after the effective date or retrospectively to all prior periods presented. We are currently evaluating the impact that the adoption of this guidance will have on our financial condition, results of operations, cash flows and related disclosures.

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