The St. Joe Company plans to initiate two new DSAPs in 2026 with projected lot price targets at 20% to 25% of finished home prices, aligning pricing strategies with market trends and builder demand.
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Can you provide projected lot price targets (MPC percentage of finished home price) for the two DSAPs starting in 2026?
Analysis of Projected Lot Price Targets (MPC % of Finished Home Price) for the Two DSAPs Starting in 2026
The St. Joe Company plans to break ground on two additional Detailed Specific Area Plans (DSAPs) in 2026 to accommodate growing demand from homebuilders, especially new entrants into their market 12. The key issue raised is the anticipated lot pricing strategy for these upcoming DSAPs, expressed as a percentage of the finished home price (the MPC - market participation contribution).
Current Lot Pricing:
Present lot sales are occurring at prices generally in the low to high $80,000s to around $90,000 per lot, for example at Breakfast Point and Breakfast Point East 3. When viewed as a percentage of the finished home price, current lot pricing has often been in the "low teens" (i.e., approximately 10%-15% of finished home price), which the company admits is somewhat below typical market levels.
Market Comps:
Comparable transactions in adjacent or nearby developments have taken place at significantly higher lot prices, ranging approximately $100,000 to $146,000 per lot, frequently reflecting lot pricing at or above 20% of the finished home price—a more market-comparable rate 3. For instance, D.R. Horton paid $146,000 per lot near Breakfast Point, and lots at SweetBay in Panama City recently sold for over $130,000 each.
Company’s Pricing Philosophy and Future Strategy:
The company acknowledges that "some of the lowest hanging fruit" for materially growing cash flows is to bring MPC lot prices to levels reflecting true market value. Specifically, the target MPC pricing for the new DSAPs is projected to be in the range of 20% to 25% of the finished home price 3. This is a strategic move to align lot prices with market reality and improve margins.
Unique Back-End Participation Structure:
St. Joe emphasizes they do not sell lots at a discount despite appearances on the surface because they have a unique back-end participation on home sales, which means they earn a profit share on the eventual sale price of the finished home by builders that purchase lots from them 34. This structural differentiation complicates a direct apples-to-apples comparison to competitors. The effective MPC might therefore be economically higher than the lot sale price alone would suggest.
While exact lot price targets in dollars are not explicitly disclosed for the new DSAPs, the discussion implies that the company will seek to price these lots at the more favorable 20%-25% MPC range, bringing them in line with or slightly above current market comps in the region 3.
Given the company’s competitive positioning as a price maker rather than a price taker, and the entry of new builders demanding lots, the move towards higher MPC percentages embodies both market-driven opportunity and strategic ambition 3.
The company is clearly motivated to capitalize on the strong demand pipeline and premium site offerings, including plans for high-end retail custom homesite products, as seen with previous neighborhoods like Camp Creek and Origins West 56. This supports the premium pricing thesis for new DSAP lots.
| Aspect | Details | Citation |
|---|---|---|
| Current lot price range | $80,000 - $90,000 (low teens % MPC currently) | 3 |
| Nearby comps | $100,000 - $146,000 per lot (20%+ MPC reported) | 3 |
| Company’s target MPC for DSAPs | 20% to 25% of finished home price | 3 |
| Strategic rationale | Align lot prices with market value to grow cash flow | 3 |
| Unique lot sale structure | Back-end participation increases effective pricing | 34 |
| Planned DSAP starts | 2 DSAPs breaking ground in 2026 to meet builder demand | 12 |
Conclusion:
For the two DSAPs starting in 2026, The St. Joe Company projects lot price targets at approximately 20% to 25% of the finished home price, significantly above their current "low teens" MPC rate but consistent with observed market transactions nearby. This price positioning aims to capture greater value from growing builder demand and better reflect market conditions, while leveraging their unique profit participation model with homebuilders.
This analysis is strictly based on information disclosed in the 2025 Q4 earnings transcript and should be considered within the context of evolving market conditions and company execution.
Disclaimer: The output generated by dafinchi.ai, a Large Language Model (LLM), may contain inaccuracies or "hallucinations." Users should independently verify the accuracy of any mathematical calculations, numerical data, and associated units, as well as the credibility of any sources cited. The developers and providers of dafinchi.ai cannot be held liable for any inaccuracies or decisions made based on the LLM's output.
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