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St. Joe Coming Up With Embassy Suites Hotel in Pier Park Area

Zacks Equity Research

The St. Joe Company JOE is undertaking every effort to expand business strategically. In line with this, recently, the company announced the beginning of construction of a 255-room Embassy Suites hotel in the Pier Park area of Panama City Beach, FL, in association with a Miami-based real estate investment and development company, Key International, Inc.

Anticipated to be completed by 2021, this hotel, neighboring the Pier Park lifestyle center at Front Beach Road, is coming up on a land currently owned by St. Joe. Following completion, St. Joe will manage the hotel’s day-to-day operations. With views of the Gulf of Mexico, the hotel will have guest suites, a pool, meeting space, a fitness center, an on-site restaurant besides an upper-level, gulf-view social, catering, and event space.

Notably, St. Joe is undertaking strategic moves to enhance its portfolio of income-producing properties and focus on recurring operating-income opportunities. This is likely to create long-term value for shareholders. Further, the company’s ownership of substantial land in Florida, which can be used for residential and commercial purposes, bodes well for long-term growth.

Particularly, the latest move of construction of Embassy Suites hotel is a strategic fit as demand for hotel space in the Pier Park area is high. In fact, over the past several years, visitation to Panama City Beach has been escalating and for the first time, last year, the Northwest Florida Beaches International Airport exceeded the one-million passenger mark, per St. Joe management.

St Joe is also focused on development or expansion of a number of commercial projects. In fact, the Panama City Beach Embassy Suites is one among at least 30 new residential, commercial or hospitality projects, which the company has initiated or plans to start in 2019. Apart from this hotel, the company’s cohort of hotel projects currently under construction also includes TownePlace Suites, adjacent to Frank Brown Park in Panama City Beach. St. Joe also has plans to build, own and operate a new branded hotel just next to the Northwest Florida Beaches International Airport.

Such measures are likely to drive the company’s top line in the upcoming period. Nonetheless, inconsistent revenue performance in many segments and regional business concentration are concerns.

Shares of this Zacks Rank #3 (Hold) company have gained 5.8% over the past three months, outperforming the industry’s rally of 2%.



Stocks to Consider

Some better-ranked stocks from the real-estate space include Alexandria Real Estate Equities, Inc. ARE, Equity Residential EQR and Mid-America Apartment Communities, Inc. MAA, each carrying a Zacks Rank of 2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Alexandria Real Estate’s Zacks Consensus Estimate for 2019 funds from operations (FFO) per share has moved marginally north to $6.98 in the past two months.

Equity Residential’s FFO per share estimate for the current year moved up 1.5% to $3.44 over the past month.

Mid-America’s Zacks Consensus Estimate for the ongoing year’s FFO per share climbed marginally to $6.28 in a week’s time.

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