J.W. Mays, Inc. is a diversified real estate company that owns and operates commercial properties in the Northeast United States. With a history dating back to 1924, the company has established itself as a prominent player in the regional real estate market, weathering economic cycles and adapting to changing market dynamics.

Business Overview

J.W. Mays' core business revolves around the ownership, management, and leasing of commercial properties, including office, retail, and industrial spaces. The company's portfolio is primarily concentrated in the New York metropolitan area, with properties located in Brooklyn, Queens, and Westchester County. This geographic focus allows J.W. Mays to leverage its deep understanding of the local real estate market and capitalize on the region's economic growth and development.

The company's property portfolio consists of both owned and leased assets, providing a diversified revenue stream. As of April 30, 2024, J.W. Mays owned 12 properties, totaling approximately 1.2 million square feet of leasable space. Additionally, the company leases several properties, further expanding its reach and flexibility in the market.

Financials

In the fiscal year ended July 31, 2023, J.W. Mays reported annual revenue of $22,576,455, a decrease from the previous year's figure of $23,102,345. This decline was primarily attributable to the loss of a major tenant and a decrease in revenue from a seasonal tenant. Despite the revenue decrease, the company maintained a strong focus on cost management, with annual operating expenses of $21,400,852, resulting in an annual net income of -$82,964.

The company's liquidity position remains solid, with $3,321,117 in total liquidity as of April 30, 2024, consisting of $1,171,121 in cash and cash equivalents and $2,149,996 in marketable securities. This liquidity, combined with the company's access to additional financing sources, provides J.W. Mays with the flexibility to pursue strategic growth opportunities and address any short-term challenges.

Quarterly Performance

In the third quarter of fiscal year 2024, which ended on April 30, 2024, J.W. Mays reported revenue of $5,364,324, a decrease from the $5,563,396 reported in the same quarter of the previous year. This decline was primarily due to the loss of a tenant who agreed to terminate their lease effective March 31, 2023, as well as a decrease in rent revenue from a seasonal tenant occupying less space.

The company's operating expenses in the third quarter of fiscal year 2024 were $5,521,021, resulting in a net loss of $84,880, or $0.04 per share. This compares to a net loss of $39,160, or $0.02 per share, in the same quarter of the previous year. The increase in net loss was primarily driven by the decrease in rental income, partially offset by decreases in real estate operating expenses and administrative and general expenses.

For the nine-month period ended April 30, 2024, J.W. Mays reported revenue of $16,102,968, a decrease from the $17,170,949 reported in the same period of the previous year. The company's net loss for the nine-month period was $375,483, or $0.19 per share, compared to net income of $65,095, or $0.03 per share, in the same period of the previous year.

Liquidity

J.W. Mays' primary sources of liquidity include cash provided by operations, marketable securities, and borrowings. As of April 30, 2024, the company had total liquidity of $3,321,117, consisting of $1,171,121 in cash and cash equivalents and $2,149,996 in marketable securities.

The company's capital expenditures during the nine months ended April 30, 2024 totaled $2,062,818, primarily related to improvements and renovations at its properties in Fishkill, New York, Brooklyn, New York, and Jamaica, New York. J.W. Mays anticipates incurring an additional $2 million in capital expenditures over the next twelve months to complete these projects.

To finance its capital requirements, the company utilizes fixed-rate debt, which does not expose it to market risk related to changes in interest rates. As of April 30, 2024, J.W. Mays had $4,223,243 in fixed-rate debt outstanding.

Recent Developments

Leasing Activity

During the third quarter of fiscal year 2024, J.W. Mays' leasing activity included the following highlights:

• In August 2023, a tenant who occupies 22,045 square feet at the company's Jamaica, New York premises renewed its lease for another five-year term through June 30, 2028.

• In September 2023, the company leased approximately 25,000 square feet at its Fishkill, New York building for use as storage space for four months.
• In September 2023, a tenant extended its leases for one year through September 30, 2024 for 25,423 square feet at the company's 9 Bond Street building in Brooklyn, New York and 38,109 square feet at its Jamaica, New York property.
• In November 2023, the company leased approximately 1,600 square feet to a coffee store retailer at its 9 Bond Street building in Brooklyn, New York for ten years.

These leasing activities demonstrate J.W. Mays' ability to maintain occupancy levels and secure long-term tenants, even in the face of challenges posed by the COVID-19 pandemic and evolving market conditions.

Risks and Challenges

While J.W. Mays has a diversified portfolio and a strong presence in the Northeast real estate market, the company faces several risks and challenges that could impact its future performance:

1. Macroeconomic Conditions: The company's performance is closely tied to the overall health of the regional and national economies. Factors such as economic growth, inflation, and interest rate fluctuations can significantly affect the commercial real estate market and the company's ability to attract and retain tenants.

2. Tenant Concentration: A significant portion of J.W. Mays' revenue is derived from a limited number of large tenants. The loss of one or more of these key tenants could have a material adverse effect on the company's financial performance.

3. Regulatory Environment: Changes in local, state, and federal regulations, such as zoning laws, environmental regulations, and tax policies, can impact the company's operations and profitability.

4. Competition: J.W. Mays faces competition from other real estate companies, both locally and nationally, which may offer similar or more attractive properties and services to potential tenants.

5. Liquidity and Financing: The company's ability to secure additional financing or refinance existing debt on favorable terms is crucial for funding future growth and capital expenditures. Unfavorable market conditions or changes in the company's creditworthiness could limit its access to capital.

Outlook

J.W. Mays has not provided specific financial guidance for the upcoming fiscal year. However, the company's management has expressed cautious optimism about the future, citing the resilience of the regional real estate market and the company's efforts to diversify its tenant base and property portfolio.

The company's focus on maintaining a strong liquidity position and prudent capital allocation should position it to navigate any near-term challenges and capitalize on potential growth opportunities as they arise.

Conclusion

J.W. Mays, Inc. is a well-established real estate company with a diversified portfolio of commercial properties in the Northeast United States. Despite facing headwinds in the form of tenant losses and a challenging macroeconomic environment, the company has demonstrated its ability to adapt and maintain a solid financial position.

With a focus on strategic leasing, prudent capital management, and a commitment to enhancing its property portfolio, J.W. Mays is poised to navigate the evolving real estate landscape and create value for its shareholders over the long term.