J. W. Mays, Inc.

 

J.W. MAYS, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our consolidated financial statements and related notes thereto contained in this report. In this discussion, the words “Company”, “we”, “our” and “us” refer to J.W. Mays, Inc., and its subsidiaries.

 

Cautionary Statement Regarding Forward-Looking Statements:

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations and other sections of this Report on Form 10-Q, may contain forward-looking statements that are based on our assumptions, expectations and projections about us and the real estate industry. These include statements regarding our expectations about revenues, our liquidity, or expenses and our continued growth, among others. Such forward-looking statements by their nature involve a degree of risk and uncertainty. We caution that a variety of factors, including but not limited to the factors described under Item 1A, “Risk Factors” in our Form 10-K for the fiscal year ended July 31, 2025 and the following, could cause our business performance or financial results to differ materially from what is contained in forward-looking statements:

 

●	changes in the rate of economic growth in the commercial real estate leasing market, and interest rates both nationally and locally;
●	existing indebtedness, including the potential for accelerated maturities;
●	the ability to obtain additional financing to fund our necessary capital expenditure projects on reasonable terms or at all, including but not limited to the success of any proposed strategic transactions with respect to our properties;
●	changes in the financial condition of our customers;
●	changes in the regulatory environment and particularly burdens of increasing local, state, and federal requirements and taxes;
●	increasing trend of lease cancellations and loss of key tenants at our properties;
●	changes in our estimates of costs;
●	loss of key personnel;
●	war and/or terrorist attacks, global, national and local political unrest and protests could significantly impact buildings leased to tenants;
●	the continued availability of insurance for various policies at reasonable rates;
●	outcomes of pending and future litigation;
●	increasing competition by other landlords and building management companies, including the use of artificial intelligence and other advanced technologies among competitors;
●	compliance with our loan covenants;
●	impact of climate change on our properties and the geographic regions in which we operate;
●	recoverability of claims against our customers and others by us and claims by third parties against us;
●	changes in estimates used in our critical accounting policies;
●	cybersecurity and data privacy breach threats or incidents; and
●	pandemics and the related trends of office versus remote work practices.

 

Other factors and assumptions not identified above were also involved in the formation of these forward-looking statements and the failure of such other assumptions to be realized, as well as other factors, may also cause actual results to differ materially from those projected. Most of these factors are difficult to predict accurately and are generally beyond our control. You should consider the areas of risk described above in connection with any forward-looking statements that may be made by us.

 

We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events risk factors or otherwise. You are advised, however, to review any additional disclosures we make in our public filings and periodic reports with the Securities and Exchange Commission.

 

Critical Accounting Policies and Estimates:

 

Critical accounting policies are defined as those most important to the portrayal of a company’s financial condition and results and require the most difficult, subjective or complex judgments. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make estimates and judgments that affect the reported amounts of assets and liabilities at the date of the financial statements, the reported amount of revenues, and expenses during the reporting period and related disclosure of contingent assets and liabilities. We believe the critical accounting policies affect our more significant judgments and estimates used in the preparation of our financial statements. Estimates are based on historical experience, where applicable or other assumptions that management believes are reasonable under the circumstances. There have been no significant changes to our critical accounting policies and estimates during the nine months ended April 30,

 

2026 from those disclosed in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of our 2025 Annual Report to Shareholders incorporated by reference into our Annual Report on Form 10-K for the fiscal year ended July 31, 2025.

 

Results of Operations:

 

Three months ended April 30, 2026 compared to the three months ended April 30, 2025:

 

In the three months ended April 30, 2026, the Company reported net loss of $(216,863), or $(.11) per share. In the comparable three months ended April 30, 2025, the Company reported net income of $86,784, or $.04 per share. The loss in the 2026 three months was primarily due to loss of tenants and rent concessions granted; partially offset by rent escalations.

 

Revenues in the current three months decreased to $5,314,751 from $5,632,151 in the comparable three months ended April 30, 2025, primarily due to loss of tenants and rent concessions granted of $210,409; partially offset by rent escalations.

 

Real estate operating expenses in the current three months increased to $3,999,990 from $3,822,276 in the comparable three months ended April 30, 2025, primarily due to increases in real estate taxes, maintenance cost, insurance cost, and commission expense; partially offset by decreases in payroll cost and license and permits.

 

Administrative and general expenses decreased in the current three months to $1,164,625 from $1,239,480 in the comparable three months ended April 30, 2025, primarily due to decreases in pension expenses.

 

Depreciation expense in the current three months of $471,707 approximated $457,285 in the comparable three months ended April 30, 2025.

 

Other income (expense) and interest expense improved in the current three months to $12,708 income compared to $(3,326) loss in the comparable three months ended April 30, 2025, primarily due to decreased in interest expense.

 

Nine months ended April 30, 2026 compared to the nine months ended April 30, 2025:

 

In the nine months ended April 30, 2026, the Company reported net loss of $(1,059,850), or $(.53) per share. In the comparable nine months ended April 30, 2025, the Company reported net loss of $(44,240), or $(.02) per share. The increase in loss for the 2026 nine months was primarily due to loss of tenants and rent concessions granted combined with increases in real estate operating expenses; partially offset by rent escalations and decreases in general and administrative expenses.

 

Revenues in the current nine months decreased to $15,777,647 from $16,814,724 in the comparable nine months ended April 30, 2025, primarily due to loss of tenants and rent concessions granted of $544,351; partially offset by rent escalations.

 

Real estate operating expenses in the current nine months increased to $12,204,787 from $11,700,830 in the comparable nine months ended April 30, 2025, primarily due to an increase in real estate taxes, insurance, utilities, commissions, and maintenance expenses, and a loss on fixed asset disposal; partially offset by decreases in payroll cost and license and permits.

 

Administrative and general expenses decreased in the current nine months to $3,680,364 from $3,784,108 in the comparable nine months ended April 30, 2025, primarily due to a decrease in professional fees, and pension expenses; partially offset by increases in executive payroll and other administrative cost.

 

Depreciation expense in the current nine months increased to $1,414,646 from $1,346,625 in the comparable nine months ended April 30, 2025 primarily due to tenant improvements placed in service at various buildings.

 

Other income (expense) and interest expense improved in the current nine months to $18,300 income compared to $(44,401) loss in the comparable nine months ended April 30, 2025, primarily due to increased dividend and interest income, and a decrease in interest expense.

 

Liquidity and Capital Resources:

 

Commercial Leasing Activities

 

In August 2025, the Company exercised the second of four five-year option periods with its landlord to extend the Jamaica Avenue at 169th Street, Jamaica, New York property lease beyond May 31, 2035 for a total of five years through May 31, 2040.

 

In August 2025, the Company leased 5,500 square feet of retail space at the Company’s Jowein building in Brooklyn, New York. Monthly rent is $15,000 with annual rent increases. Brokerage commissions were $73,487.

 

Effective October 1, 2025 the Company leased approximately 9,500 square feet at the Company’s Fishkill, New York building for use as storage space for three months expiring December 31, 2025. Total rent was $46,526 and brokerage commissions were $2,187.

 

In October 2025, a tenant who occupies 31,438 square feet at the Company’s Jowein building in Brooklyn, New York extended their lease from May 2026 to October 2026, and was given a rent concession of $375,165 effective November 2025 to October 2026. In May 2026, this tenant advised they are vacating the space 6/30/2026. Loss of rent is approximately $243,000.

 

In October 2025, a tenant who occupies 915 square feet at the Company’s 9 Bond Street building in Brooklyn, New York extended their lease from January 2026 to January 2028. Annual rent is $24,000.

 

In December 2025, a tenant who occupies 1,810 square feet at the Company’s 9 Bond Street building in Brooklyn, New York extended their lease from February 2026 to January 2036. Annual rent is $240,000 with yearly rent escalation beginning in year two.

 

In January 2026 the Company leased 9,500 square feet of warehouse space at the Company’s Fishkill building, New York for a total rent of $62,034 from February 2026 to May 2026. Total brokerage commissions were $2,357.

 

In January 2026, a tenant who occupies 1,000 square feet at the Company’s 9 Bond Street building in Brooklyn, New York extended their lease for five years from February 01^st, 2026. Annual rent is $42,000 with yearly rent escalations.

 

In February 2026, a tenant who occupies 25,423 square feet at the Company’s 9 Bond Street building in Brooklyn, New York extended their lease from December 2025 to September 2029, with a sixty days’ notice cancelation clause. Annual rent is $915,228.

 

In February 2026, a tenant who occupies 38,109 square feet at the Company’s Jamaica, New York premises, extended their lease from December 2025 to September 30, 2029, with a sixty days’ notice cancelation clause. Annual rent is $1,099,445.

 

In March 2026, the Company leased approximately 1,500 square feet at the Company’s 9 Bond Street building in Brooklyn, New York for five years effective August 1st, 2026. Annual rent is $126,000 with yearly rent escalation from year two. Brokerage commissions were $53,293.

 

In April 2026, the Company leased an additional 75,500 square feet to an existing tenant at the Company’s Fishkill, New York building for fifteen years effective September 1st, 2026. Annual rent is $1,423,930 with yearly rent escalations from year three. Total brokerage commission were $595,000.

 

In April 2026, a tenant who occupies 13,451 square feet at the Company’s 9 Bond Street building in Brooklyn, New York extended their lease for seven years from August 1st, 2026. Annual rent is $484,236 with yearly rent escalations. Total brokerage commission were $125,209.

 

Cash Flows:

 

The following table summarizes our cash flow activity for the nine months ended April 30, 2026 and 2025:

 

	Nine Months Ended April 30,
	2026				2025
Net cash provided by operating activities	$	2,633,274			$	3,347,851
Net cash (used) by investing activities		(4,145,391	)			(1,723,076	)
Net cash provided (used) by financing activities		2,894,937				(615,073	)

 

Cash Flows From Operating Activities

 

Deferred Expenses: The Company incurred $141,135 for brokerage commissions during the nine months ended April 30, 2026. Commissions due were for two new tenant leases at the Company’s Jowein property, one tenant for the Brooklyn property and one tenant for the Massapequa premises.

 

Accounts Payable and Accrued Expenses: The Company recorded an accounts payable of $611,597 related to capital improvements during the nine months ended April 30, 2026.

 

Cash Flows From Investing Activities

 

During the nine months ended April 30, 2026, the Company had expenditures for tenant improvements of:

 

-	$777,770 at the Company’s 9 Bond Street building in Brooklyn, New York. Total improvements are now complete.

 

-	$2,513,423 at the Company’s Fishkill building, New York representing build out of new space for an existing tenant.

 

-	$60,041 for tenant improvements at the Company’s Jamaica, New York premises for two tenants which are now complete as of October 31, 2025.

  

-	$794,157 at the Company’s Jowein building in Brooklyn, New York mostly related to scaffolding and steel work at the basement level.

 

Source of Funds; Cash Flows from Financing Activities; Company Indebtedness

 

As of April 30, 2026, the Company anticipates incurring an additional $7.8 million in capital expenditures over the next twelve months ending April 30, 2027. The Company’s primary source of liquidity is 1) cash provided by operations, and 2) borrowings. Total liquidity as of April 30, 2026 consists of cash and cash equivalents of $2,110,713. Total liquidity includes proceeds from fixed rate borrowings as of April 30, 2026.

 

For a more detailed description of the Company’s indebtedness, see Note 4 - Mortgage Payable contained in these Consolidated Financial Statements.

 

As disclosed in Note 11 - Subsequent Event, on May 12, 2026, the Company obtained a non-revolving line of credit and building loan mortgage with a bank & trust in the amount of $8,000,000. The Company was advanced approximately $2,000,000 at closing of the loan and intends to use such proceeds and additional advances to draw down on the entire $8,000,000 before a Fishkill, New York property expansion project is completed for an existing tenant.   

 

The Company’s ability to increase cash flows from operations, and to obtain additional sources of borrowings is dependent on many factors such as the continuously evolving local and macroeconomic commercial real estate markets, the effects of the overall economy, fluctuating interest rates, inflation, trends of office versus remote work practices, city and state regulations, and increasing real estate tax assessments. There is no assurance the Company will be successful in securing additional sources of financing when needed.

 

The Company is considering any strategic opportunities to sell or divest one or more of its properties or real estate assets to manage its liquidity needs, and the determination of whether a particular property should be sold or otherwise disposed of will generally be made after consideration of relevant factors, including, but not limited to prevailing macro-economic and real estate market conditions, alternative investment opportunities, tax implications, and considerations specific to the condition, value, and financial performance of the property to be sold.

 

The Company has engaged Newmark Group, Inc. to actively market 25 Elm Place, Brooklyn, New York for sale to unaffiliated third-party prospective buyers. These marketing efforts are in their early stages and will remain ongoing for the foreseeable future. Any decision by the Company to enter into a sale transaction of the Property will be approved by the Company’s Board of Directors. There can be no assurances regarding whether a sale of the Property will take place nor on the timing of such a sale.

 

We believe our sources of liquidity described above will be sufficient to meet our obligations over the next 12 months.