MAYS J W INC (MAYS) stock intrinsic value fair value estimate & owner earnings analysis

J.W. Mays is a small landlord that turned the real estate of its former Mays department stores into rental property. It owns about 90% of a 380,000 sq ft complex at Fulton Street and Bond Street in Downtown Brooklyn (52.7% occupied at July 31, 2025), the 201,000 sq ft Jowein building at 25 Elm Place in Brooklyn, a 203,000 sq ft building in Fishkill, New York, and properties in Levittown, New York and Circleville, Ohio. It leases its 297,000 sq ft Jamaica, Queens building and part of the Fulton Street site, mostly from a company controlled by a director; the Jamaica lease now runs to May 2040. Revenue was $22.5 million in fiscal 2025 (the year ending July 31). How we measured earnings: we start from cash generated by operations, strip out short-term swings in payables, prepaid costs and tenant deposits, and subtract the capital spent to keep space leased. Brokerage commissions paid to sign tenants are treated as an ongoing cost. Rising receivables, which here mostly reflect rent booked ahead of billing, are not added back. On that basis the portfolio's cash before lender payments has ranged from -$5.1 million (fiscal 2020, the year of the first Fishkill college build-out) to +$2.4 million (fiscal 2023). Over fiscal 2021-2025, the period that best reflects today's tenant roster, the middle year was roughly break-even (-$66,000). Fiscal 2026 has been weaker, with revenue for the nine months to April 30, 2026 down 6%. At Jowein, tenants occupying 17,364 and 5,640 sq ft left (about $885,000 of annual rent), and a 31,438 sq ft office tenant that paid about $1.07 million a year moved out on June 30, 2026 after receiving a $375,165 concession. A 9 Bond Street tenant received $660,000 of rent concessions. Because three straight quarters confirm the decline, we start the existing portfolio at about -$350,000 a year before interest, below the recent middle year. The one firm source of new income is at Fishkill. The community college that has leased 47,000 sq ft there since 2019 signed a 15-year lease for another 75,500 sq ft starting September 1, 2026, at $1,423,930 a year with increases from year three. The college's expansion is backed by about $5 million of state grants. Mays is paying for the build-out: $2.5 million spent through April 2026, an $8 million Beacon Bank construction loan signed May 12, 2026, and $7.8 million of total capital spending expected in the twelve months to April 2027. We charge about $6 million of extra build-out cost against the first year of the base case. Debt: at April 30, 2026 the company owed $6.2 million on a 7% fixed mortgage on the Circleville property, taken in March 2026 partly to repay $3.1 million of older mortgage debt. About $2.0 million more was advanced at closing on the Beacon loan, which costs prime plus 1% with a 7.25% floor, then converts to a fixed rate with a 6% floor in May 2027, matures in 2036, and requires a $1 million deposit. Cash was $2.1 million. After setting aside the required deposit and allowing for borrowing costs above 6%, we count net debt of about $7.6 to $8.0 million, roughly $3.80 to $4.00 a share. The company has hired Newmark to market 25 Elm Place for sale to manage its liquidity. Base case, $2.59 a share: the existing properties run at -$350,000 a year indefinitely, with tenant rent increases offsetting rising costs. The Fishkill expansion adds about $1.3 million a year net from fiscal 2027, growing 1.5% a year, and the college renews after 2041 given its investment in the campus. After the build-out, the business is worth about $13.0 million; less $7.8 million of net debt, that leaves $5.2 million. Cash before interest of about $1 million a year roughly matches the interest on a fully drawn loan balance of about $14 million. Repaying principal therefore depends on refinancing, as the company did twice in 2026 with the Circleville and Fishkill loans; its Brooklyn buildings carry no mortgage and could support more borrowing. Bear case, -$4.12 a share: the existing properties lose $800,000 a year for ten years and then fade to zero. Fulton Street stays near half occupied, more Jowein space empties, and rent on the leased Jamaica and Fulton parcels steps up; the company's lease expense already runs about $0.8 million a year ahead of the cash it pays. Fishkill nets $1.2 million a year and ends with the lease in 2041, and the build-out overruns to $7 million. The business is worth about -$0.3 million against $8.0 million of debt. In this case the company would owe roughly $8.3 million more than its operations can support, and it would need property sales, new shares or a restructuring to meet its loans. Bull case, $10.60 a share: the company's re-leasing record continues; Jowein occupancy rose from 72.5% to 83.5% between 2021 and 2025, and fiscal 2023 produced $2.4 million. That lifts the existing properties to +$400,000 a year. Fishkill nets $1.35 million with 2.5% annual increases and renews, and the build-out costs $5.8 million. The business is worth about $29.0 million; less $7.6 million of debt, that leaves $21.4 million. What these values leave out: the share price largely reflects the land and buildings in Downtown Brooklyn, which this cash-based approach does not value directly. A sale of 25 Elm Place or another property at a strong price would add value beyond all three cases, but no agreement or price exists, so none is counted. If the buildings are worth far more than the cash they produce, shareholders capture that gap only if they are sold or redeveloped. Since our previous estimate (base $0.86), the signed 75,500 sq ft Fishkill lease has raised the base and bull cases. The Jowein tenant losses, new borrowing at 7% or more, and heavy build-out spending have lowered the bear case. We now discount every case at a single 6% rate and charge risk through the spread between the cases.