JW Mays (MAYS) Risk Analysis

We are a part of the communities in which we do business. Accordingly, like other businesses in our communities, we are subject to the following risks: • changes in the rate of economic growth, and interest rates both nationally and locally; • existing indebtedness, including the potential for accelerated maturities; • the ability to obtain additional financing at reasonable costs and interest rates; • 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; • lease cancellations and particularly loss of key tenants; • changes in our estimates of costs; • loss of key personnel; • war and/or terrorist attacks 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 companies; • compliance with our loan covenants; • climate change; • recoverability of claims against our tenants and others by us and claims by third parties against us; • changes in estimates used in our critical accounting policies; • cybersecurity threats or incidents; and • pandemics and the related trends of office versus remote work practices. Our investment in property development may be limited by increasing costs required to make improvements to property leased to tenants. Also, as the cost of fitting up properties increases, we may be required to wait and forsake opportunities that would be revenue producing until such time that we obtain the necessary financing of such ventures. This risk may be mitigated by obtaining lines of credit and other financing vehicles, although such have significant limitations on the amounts that may be borrowed at any point in time.2We also may be subject to environmental liability as an owner or operator of properties. Many of our properties are old and when we need to fit up a property for a new tenant, we may find materials and the like that could be deemed to contain hazardous elements requiring remediation or encapsulation. As online retail operations continue to expand nationwide, retailers are facing increased competition which reduces the need for the leasing of properties. Remote work since the pandemic has resulted in tenants’ careful evaluation and reduction of office space needs and a decline in demand of commercial office space rentals from increasing competition. The Company emphasizes retention of tenants over a long period of time which helps in difficult economic conditions. The Company also aggressively markets available space to tenants including governmental agencies, medical, industrial, and educational institutions. We try to lease our properties to tenants with adequate finances. As a result of the current high interest rate environment and less liquidity available to smaller businesses, even formerly financially strong tenants may be at risk. The Company mitigates the risk of tenants with less than adequate finances by leasing our properties to multiple tenants, where applicable, in order to diversify the tenant base.