JOE - Why This Real Estate Stock's Less Risky Than It Looks
St. Joe (NYSE: JOE) sat idly on around 170,000 acres of undeveloped land on Florida's Gulf Coast for many years. During that time, the company faced the age-old chicken or egg question: What do we build first, homes and amenities to attract people, or commercial and industrial to attract jobs? A few years ago, they decided to start building both, profitably, with lower-than-average risk, at a fever pitch. Read on to see why St. Joe's could be an excellent long-term holding.
St. Joe's land is nestled between vacation destinations Destin and Panama City, Florida. About 90% of the company's acreage is located within 15 miles of the Gulf of Mexico. The company has homes, hotels, resorts, golf clubs, marinas, and commercial space already completed or planned for the acreage.
Building entire communities and massive commercial and hospitality projects typically take colossal up-front capital investments. The profit comes later, when projects are completed. In between, there is risk of cost overruns, delays, and changing market conditions.
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Why This Real Estate Stock's Less Risky Than It Looks