Guru	Date	Action	Impact	Price Range (Average)*	Change from Average	Comment	Current Shares

Bruce Berkowitz Comments on St. Joe - Feb 04, 2019

St. Joe (NYSE:JOE) is a complex story about unique lands and operations in Northwest Florida. The company has a strong balance sheet, low expenses, and the ability to profit for decades with real estate surrounding the Gulf of Mexico, US Intracoastal Waterways, and Northwest Florida Beaches International Airport.



There is growing demand for houses, apartments, limited and full-service hotels, clubs and resorts, and office space for work, life, and play in what Forbes calls “The Hamptons of The South.1” St. Joe initiated a record number of projects for 4,600 homes and 490 hotel rooms while buying back common stock with excess liquidity last year. Depending on scope, projects may take between eighteen and thirty-six months to show profits.



From Bruce Berkowitz (Trades, Portfolio)'s Fairholme Capital Management fourth-quarter 2018 shareholder letter.

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Bruce Berkowitz Comments on The St. Joe Company - Nov 01, 2018

JOE (NYSE:JOE) owns approximately 170,000 acres, 67% of which is within 10 miles of the Gulf of Mexico. 120,000 of the 170,000 acres is contiguous within Walton and Bay Counties and surround 15 miles of the US Intracoastal Waterway and Great Northwest Florida Beaches International Airport. JOE has built a home grown management team, a fortress-like balance sheet including $250 million of liquid investments, and a profitable pipeline of projects to build homes, apartments, limited and full-service hotels, clubs and resorts, commercial villages, marinas, manufacturing and office spaces, and all else that is needed for Northwest Florida coastal work, life, and play.



It’s hard to put into words how well JOE performed during Hurricane Michael. The company’s assets benefit from high elevations and hurricane-resistant construction. It’s also hard to describe the devastation suffered by so many, so near. Before Hurricane Michael, JOE was growing. Much more is now required to meet communities’ demands after Hurricane Michael. Activities planned for the next five years must be accomplished in three. CEO Jorge Gonzalez will soon update shareholders with the company’s quarterly earnings. As a fellow shareholder and Chairman of JOE’s Board of Directors, I could not be prouder of JOE and its people, nor more optimistic about the future. There is a good reason for a long-term focus on JOE.

From Bruce Berkowitz (Trades, Portfolio)'s third-qurter 2018 Fairholme Fund (Trades, Portfolio)s shareholder letter.

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Bruce Berkowitz Comments on St. Joe - Aug 01, 2018

St. Joe’s (NYSE:JOE) entitled land, resort assets, commercial properties, and ample cash pile are presently priced below a reasonable estimate of intrinsic value. As important, St. Joe is more focused than ever on increasing shareholder value in the coming years through expanding its portfolio of income producing assets. Currently, the market values all of St. Joe at $6,800 per acre of owned land or about $5,100 per acre net of the company’s cash and short-term liquidity portfolio. We are hard pressed to find cheaper comparables considering:

• St. Joe’s increasing growth initiatives, including Latitude Margaritaville, a joint venture with Minto Communities and Margaritaville Holdings to create a 55-and-better community located about six miles off the coast and just north on the Inter Coastal Waterway, with the first phase of 3,000 homes projected to open in early 2020.


• St. Joe’s leasable commercial property has grown over 44% to 813,000 square feet over the past few years, with occupancy now up to 87% leased.


• Airport capacity at Northwest Florida Beaches International Airport has increased from one airline carrier in 2009 to four, with passenger traffic up 300% as the airport soon approaches the one million annual passenger mark.

For these reasons and others, you can begin to understand why St. Joe has repurchased nearly one-third of its outstanding shares over the past few years and why St. Joe is the largest position in The Fairholme Fund (Trades, Portfolio).

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Bruce Berkowitz Comments on St. Joe - Feb 05, 2018

St. Joe (NYSE:JOE) is building a vibrant economic region and sustainable corporate profits with its communities across coastal Walton and Bay counties in Northwest Florida. The company is doing it the right way, with little debt, low fixed expenses, low-cost land, and $300 million of cash for the inevitable surprises of real estate development. Entitled to develop 178,000 homes and 22 million square feet of commercial space over 122,000 acres, St. Joe has a bright future, something its CEO Jorge Gonzalez and I –as the Chairman of both Fairholme and St. Joe – agree on.

There are big forces working in our favor. While Florida enjoys the country’s second fastest growing population, Northwest Florida’s Emerald Coast, where St. Joe owns its land, is growing twice as fast. The area has a new international airport and miles of sandy coast. Tyndall Air Force Base, which is spending $250 million and creating 1,600 new jobs, is but one example of the area’s rapid economic expansion.2 Aviation companies are looking to be nearby, and local campuses for Florida State University and Gulf Coast State College are expanding their engineering programs to meet expected demand. Passenger counts at Northwest Florida Beaches International Airport have nearly tripled to 910,000 since 2010. Planes are at least 80% full. A fourth national carrier will soon offer new direct flights to major cities. Recently, $1.5 billion was committed to boost the regional economy, using settlement funds from the BP oil spill. Even more appealing to prospective re-locators after the recent federal tax changes is Florida’s zero state income tax. St. Joe’s outlook is promising.

From Bruce Berkowitz (Trades, Portfolio)'s Fairholme Fund (Trades, Portfolio) fourth quarter 2017 shareholder letter.

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Bruce Berkowitz Comments on St. Joe - Aug 08, 2017

St. Joe (NYSE:JOE) owns 120,000 contiguous acres with entitlements to build homes and grow jobs for generations to come – at near zero land costs. CEO Jorge Gonzalez and team are making investments that will add value to this land with projects generating recurring revenue. It is my belief that GKN Aerospace may be just the first of many high-tech companies that will move to Northwest Florida. Great jobs build strong communities with top-notch education and healthcare.

If you are considering any type of corporate relocation or expansion, please call Jorge at (850) 544-3177 to find out why one of the largest global aerospace companies chose St. Joe to build their first facility in Florida.



From Bruce Berkowitz (Trades, Portfolio)'s mid-year 2017 shareholder letter.

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Bruce Berkowitz Comments on St. Joe - Jul 11, 2017

Daniel Schmerin: Bruce, I’d like to return to The St. Joe Company (NYSE:JOE) (“St. Joe”) and wrap up. You recently said that if you could only invest in one of our positions, St. Joe would be it. A shareholder asks a slightly different question: If you had no investment positions at all, what is the first investment you would put money into today? Would it still be St. Joe?

Bruce Berkowitz (Trades, Portfolio): Yes, it would.

Daniel Schmerin: So what is happening at St. Joe these days that gives you cause for optimism and what is the timeline for meaningful profitability?

Bruce Berkowitz (Trades, Portfolio): I should give everyone a taste of the new activities starting at St. Joe in Northwest Florida. St. Joe is increasing jobs in the area by helping to create global high-tech manufacturing facilities. St. Joe signed its first global high-tech company, GKN plc (“GKN”), an automotive and aerospace components company. Hopefully they will open up before the end of this year. St. Joe is increasing primary home choices for the first time, building apartments to rent as well as townhomes and condominiums to increase density. Of course, there is also the further expansion of retail and village spaces that go along with more jobs and more homes.

St. Joe is trying to increase the quality of education, looking to build new schools and very much focused on the “STEM” areas: sciences, technology, engineering, and mathematics. They are in talks to expand the healthcare system in the area. They’re working hard on a very large biomedical engineering project. Of course, they’re also looking to continue to increase tourism. I believe that Northwest Florida Beaches International Airport has crossed a million legs. I know airlines are exploring additional routes. For the first time they’re starting the process of looking to build new hotels and a new convention center. They’re also finalizing plans for a very large national sports facility.

I’m sure people haven’t heard of Triumph Gulf Coast. Triumph Gulf Coast is a nonprofit corporation that was created by the Florida legislature to distribute about a billion and a half dollars of funds for economic damages in the State of Florida that resulted from the 2010 Deepwater Horizon oil spill.

Florida’s Governor Rick Scott executed the Triumph legislation earlier this month, and it is now in effect. Triumph Gulf Coast attempts to establish, hold, invest, and administer this trust of a billion and a half dollars for the economic recovery, diversification, and enhancement of eight Northwest Florida counties that were disproportionately affected by the spill.

St. Joe owns property in five of the eight counties, with significant ownership in three of the counties – Bay, Gulf, and Walton counties.

I mentioned GKN. We’re constructing a 137,000 square foot building at Venture Crossings, which is proceeding well and should be completed later this year. St. Joe is constructing the building and leasing it to GKN. GKN has started the hiring process, and we expect them to create 170 aerospace manufacturing jobs with a median annual salary of about $65,000. We also expect another 400 to 500 jobs to be created from the knock-on, secondary effects associated with this new facility.

I mentioned apartments. St. Joe is constructing 240 units in a joint venture with HomeCorp near Pier Park. It is expected to commence in the third or fourth quarter of this year. St. Joe will be the majority owner of the JV and owns most of the land surrounding this project.

We expect many more starts to come, so I tell everyone to stay tuned.

Daniel Schmerin: Here’s an interesting one we received. Given that the Intergovernmental Panel on Climate Change expects that the oceans will rise between 11 and 38 inches by 2100, can you please discuss how much, if any, of St. Joe’s highly desirable real estate properties would be at risk?

Bruce Berkowitz (Trades, Portfolio): The coastline in Northwest Florida typically has higher elevations than other parts of Florida. For example, the gulf front at our Watercolor Inn has an elevation of 13 feet. Pier Park North commercial center has an elevation of 30 feet. Watersound Origin, one of our growing communities, has an average elevation of 35 feet. And our high-tech manufacturing area at Venture Crossings is adjacent to the airport with elevations ranging between 50 and 60 feet above sea level.

St. Joe is going to be A-OK, at least for the next few hundred years. I think those of us living in Miami have a lot more to worry about.

Daniel Schmerin: For the last several years, shares of St. Joe have underperformed the market and its peer groups. What action do you anticipate the company will take to highlight the value for investors of its cash and property, and when? And what actions will the company take to potentially increase capital allocation for shareholders, whether in the form of dividends or accelerated buybacks, especially given the strength of St. Joe’s balance sheet?

Bruce Berkowitz (Trades, Portfolio): I’m happy to report the company is executing on its plans. It’s focused on recurring revenues, executing joint ventures to maintain low fixed cost structures, working hard to diversify the regional economy. We’ve been very lucky and fortunate to have great support from the state and local officials, be it from Governor Rick Scott, Commissioner Adam Putnam, and many others who believe there’s a bright future for Northwest Florida. I’m quite excited.

And in terms of capital allocation, more capital will be directed toward new programs and projects. But St. Joe will still have significant excess liquidity, and shareholders could see substantial amounts of capital used to continue repurchasing shares if the price is right.

Daniel Schmerin: Another shareholder asked, “Are there accommodations for us small fry investors to go down to St. Joe and get a tour of the facilities and the region itself?” How would you recommend people go down and tour this area? And is Joe doing enough to promote itself?

Bruce Berkowitz (Trades, Portfolio): All of our shareholders are welcome at St. Joe. Feel free to call St. Joe and arrange a visit. Tell them I encouraged the visit. Shareholders who visit will be pleasantly surprised and it’s going to get easier and easier to get to the area, because every year, we expect more direct flights into Northwest Florida Beaches International Airport. And we’re hoping to see flights from the New York area in the not-too-distant future.

St. Joe is moving faster and faster on all fronts. However, they are still exercising prudence. Every project must be profitable from day one. Every project must add value to all other current or future projects. St. Joe has at least 30 years of organic growth ahead. People at St. Joe want to make sure that they achieve this tremendous growth with minimum risk to the company and communities. It’s my belief that the company is now ready for whatever may come.




From Bruce Berkowitz (Trades, Portfolio)'s June 29, 2017, public conference call transcript.

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