Franklin Street Properties Corp. (the “Company”, “FSP”, “we” or
“our”) (NYSE American: FSP), a real estate investment trust (REIT),
announced its results for the second quarter ended June 30,
2023.
George J. Carter, Chairman and Chief Executive Officer,
commented as follows:
“As the third quarter of 2023 begins, we continue to believe
that the current price of our common stock does not accurately
reflect the value of our underlying real estate assets. We will
seek to increase shareholder value by (1) pursuing the sale of
select properties where we believe that short to intermediate term
valuation potential has been reached and (2) striving to lease
vacant space. We intend to use proceeds from property dispositions
primarily for debt reduction.
We look forward to the remainder of 2023 and beyond with
anticipation and optimism.”
Financial Highlights
- GAAP net loss was $8.4 million and $6.0 million, or $0.08 and
$0.06 per basic and diluted share for the three and six months
ended June 30, 2023, respectively.
- Funds From Operations (FFO) was $7.1 million and $15.5 million,
or $0.07 and $0.15 per basic and diluted share, for the three and
six months ended June 30, 2023, respectively.
Leasing Highlights
- During the six months ended June 30, 2023, we leased
approximately 445,000 square feet, including 176,000 square feet of
new leases.
- Our directly owned real estate portfolio of 20 owned
properties, totaling approximately 6.1 million square feet, was
approximately 75.7% leased as of June 30, 2023, compared to
approximately 75.6% leased as of December 31, 2022. The increase in
the leased percentage is primarily a result of leasing completed
during the six months ended June 30, 2023, which was partially
offset by lease expirations and a property disposition.
- The weighted average GAAP base rent per square foot achieved on
leasing activity during the six months ended June 30, 2023, was
$29.14, or 7.2% higher than average rents in the respective
properties for the year ended December 31, 2022. The average lease
term on leases signed during the six months ended June 30, 2023,
was 6.6 years compared to 6.4 years during the year ended December
31, 2022. Overall, the portfolio weighted average rent per occupied
square foot was $31.21 as of June 30, 2023, compared to $30.48 as
of December 31, 2022.
- During the second quarter, we entered into a lease amendment
with an existing tenant, Kaiser Foundation Health Plan, Inc., at
our Greenwood Plaza property in Englewood, Colorado. The lease
amendment extends the term applicable to all of Kaiser’s
approximately 121,000 square foot premises by 5 years, from May 31,
2024, to May 31, 2029.
- During the second quarter, we entered into a new lease with the
Commonwealth of Virginia, Department of General Services, at our
Innsbrook property in Glen Allen, Virginia. The lease is for
approximately 100,000 square feet, has a term of 10.5 years and is
anticipated to commence during December 2023.
- We are currently tracking approximately 500,000 square feet of
new prospective tenants, including approximately 300,000 square
feet of prospective tenants that have identified our properties on
their respective short lists of potential locations.
- We believe that our continuing portfolio of real estate is well
located, primarily in the Sunbelt and Mountain West geographic
regions, and consists of high-quality assets with upside leasing
potential.
Investment Highlights
- We remain committed to seeking to sell select properties during
2023 and using proceeds primarily for debt reduction.
- Since December 2020, we have completed the sale of properties
resulting in gross proceeds of approximately $852 million and
reflecting an average price per square foot of approximately
$220.
- During the third quarter of 2023, we expect to close on the
sale of Forest Park in Charlotte, North Carolina for approximately
$9.2 million in gross proceeds. We recorded an impairment of $0.8
million on this property for the expected loss on sale and
classified the property as an asset held-for-sale during the three
months ended June 30, 2023. Proceeds will be used primarily for
debt reduction.
- We have entered into purchase and sale agreements with three
different (and unrelated) purchasers for the potential sale of
three properties that would result in aggregate gross proceeds of
approximately $156 million. These transactions remain subject to
customary closing conditions, including without limitation,
successful completion by the purchasers of due diligence inspection
periods. If successful, these transactions are expected to close
during the fourth quarter of 2023 and the proceeds are intended to
be used primarily for the repayment of debt.
- Assuming that the three properties currently under purchase and
sale agreement, together with our Forest Park property, close at
their currently negotiated purchase prices, those four dispositions
would reflect an average price per square foot of approximately
$250.
Dividends
- On July 7, 2023, we announced that our Board of Directors
declared a quarterly cash dividend for the three months ended June
30, 2023 of $0.01 per share of common stock that will be paid on
August 10, 2023 to stockholders of record on July 21, 2023.
Consolidation of Sponsored
REIT
As of January 1, 2023, we consolidated the operations of our
Monument Circle sponsored REIT into our financial statements. On
October 29, 2021, we agreed to amend and restate our existing loan
to Monument Circle that is secured by a mortgage on real estate
owned by Monument Circle, which we refer to as the Sponsored REIT
Loan. The amended and restated Sponsored REIT Loan extended the
maturity date from December 6, 2022 to June 30, 2023 (subject to
further extension to September 30, 2023), increased the aggregate
principal amount of the loan from $21 million to $24 million, and
included certain other modifications. On June 26, 2023, the
maturity date was extended to September 30, 2023. In consideration
of our agreement to amend and restate the Sponsored REIT Loan, we
obtained from the stockholders of Monument Circle the right to vote
their shares in favor of any sale of the property owned by Monument
Circle any time on or after January 1, 2023. As a result of our
obtaining this right to vote shares, GAAP variable interest entity
(VIE) rules required us to consolidate Monument Circle as of
January 1, 2023. A gain on consolidation of approximately $0.4
million was recognized in the three months ended March 31,
2023.
Additional information about the consolidation of Monument
Circle can be found in Note 1, “Organization, Properties, Basis of
Presentation, Financial Instruments, and Recent Accounting
Standards – Variable Interest Entities (VIEs)” and Note 2, “Related
Party Transactions and Investments in Non-Consolidated Entities -
Management fees and interest income from loans”, in the Notes to
Consolidated Financial Statements included in our Quarterly Report
on Form 10-Q for the quarter ended June 30, 2023.
Non-GAAP Financial
Information
A reconciliation of Net income to FFO, Adjusted Funds From
Operations (AFFO) and Sequential Same Store NOI and our definitions
of FFO, AFFO and Sequential Same Store NOI can be found on
Supplementary Schedules H and I.
2023 Net Income, FFO and Disposition
Guidance
At this time, due primarily to economic conditions and
uncertainty surrounding the timing and amount of proceeds received
from property dispositions, we are continuing suspension of Net
Income, FFO and property disposition guidance.
Real Estate Update
Supplementary schedules provide property information for the
Company’s owned and consolidated properties as of June 30, 2023.
The Company will also be filing an updated supplemental information
package that will provide stockholders and the financial community
with additional operating and financial data. The Company will file
this supplemental information package with the SEC and make it
available on its website at www.fspreit.com.
Today’s news release, along with other news about Franklin
Street Properties Corp., is available on the Internet at
www.fspreit.com. We routinely post information that may be
important to investors in the Investor Relations section of our
website. We encourage investors to consult that section of our
website regularly for important information about us and, if they
are interested in automatically receiving news and information as
soon as it is posted, to sign up for E-mail Alerts.
Earnings Call
A conference call is scheduled for August 2, 2023 at 11:00 a.m.
(ET) to discuss the second quarter 2023 results. To access the
call, please dial 888-440-4368 and use conference ID 5398803.
Internationally, the call may be accessed by dialing 646-960-0856
and using conference ID 5398803. To listen via live audio webcast,
please visit the Webcasts & Presentations section in the
Investor Relations section of the Company's website
(www.fspreit.com) at least ten minutes prior to the start of the
call and follow the posted directions. The webcast will also be
available via replay from the above location starting one hour
after the call is finished.
About Franklin Street Properties
Corp.
Franklin Street Properties Corp., based in Wakefield,
Massachusetts, is focused on infill and central business district
(CBD) office properties in the U.S. Sunbelt and Mountain West, as
well as select opportunistic markets. FSP seeks value-oriented
investments with an eye towards long-term growth and appreciation,
as well as current income. FSP is a Maryland corporation that
operates in a manner intended to qualify as a real estate
investment trust (REIT) for federal income tax purposes. To learn
more about FSP please visit our website at www.fspreit.com.
Forward-Looking Statements
Statements made in this press release that state FSP’s or
management’s intentions, beliefs, expectations, or predictions for
the future may be forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. This press
release may also contain forward-looking statements, such as those
relating to expectations for future potential leasing activity,
expectations for future potential property dispositions, the
payment of dividends and the repayment of debt in future periods,
value creation/enhancement in future periods and expectations for
growth and leasing activities in future periods that are based on
current judgments and current knowledge of management and are
subject to certain risks, trends and uncertainties that could cause
actual results to differ materially from those indicated in such
forward-looking statements. Accordingly, readers are cautioned not
to place undue reliance on forward-looking statements. Investors
are cautioned that our forward-looking statements involve risks and
uncertainty, including without limitation, adverse changes in
general economic or local market conditions, including as a result
of the COVID-19 pandemic and other potential infectious disease
outbreaks and terrorist attacks or other acts of violence, which
may negatively affect the markets in which we and our tenants
operate, inflation rates, increasing interest rates, disruptions in
the debt markets, economic conditions in the markets in which we
own properties, risks of a lessening of demand for the types of
real estate owned by us, adverse changes in energy prices, which if
sustained, could negatively impact occupancy and rental rates in
the markets in which we own properties, including energy-influenced
markets such as Dallas, Denver and Houston, and any delays in the
timing of anticipated dispositions, changes in government
regulations and regulatory uncertainty, uncertainty about
governmental fiscal policy, geopolitical events and expenditures
that cannot be anticipated, such as utility rate and usage
increases, delays in construction schedules, unanticipated
increases in construction costs, increases in the level of general
and administrative costs as a percentage of revenues as revenues
decrease as a result of property dispositions, unanticipated
repairs, additional staffing, insurance increases and real estate
tax valuation reassessments. See the “Risk Factors” set forth in
Part I, Item 1A of our Annual Report on Form 10-K for the year
ended December 31, 2022, which may be updated from time to time in
subsequent filings with the United States Securities and Exchange
Commission. Although we believe the expectations reflected in the
forward-looking statements are reasonable, we cannot guarantee
future results, levels of activity, acquisitions, dispositions,
performance or achievements. We will not update any of the
forward-looking statements after the date of this press release to
conform them to actual results or to changes in our expectations
that occur after such date, other than as required by law.
Franklin Street Properties Corp.
Earnings Release Supplementary Information Table
of Contents
Franklin Street Properties Corp. Financial
Results
A-C
Real Estate Portfolio Summary
Information
D
Portfolio and Other Supplementary
Information
E
Percentage of Leased Space
F
Largest 20 Tenants – FSP Owned
Portfolio
G
Reconciliation and Definitions of Funds
From Operations (FFO) and Adjusted
Funds From Operations (AFFO)
H
Reconciliation and Definition of
Sequential Same Store results to Property Net
Operating Income (NOI) and Net Loss
I
Franklin Street Properties Corp. Financial
Results Supplementary Schedule A Condensed Consolidated Statements
of Operations (Unaudited)
For the
For the
Three Months Ended
Six Months Ended
June 30,
June 30,
(in thousands, except per share
amounts)
2023
2022
2023
2022
Revenue:
Rental
$
36,257
$
40,831
$
74,024
$
82,628
Related party revenue:
Management fees and interest income from
loans
—
467
—
927
Other
9
6
9
13
Total revenue
36,266
41,304
74,033
83,568
Expenses:
Real estate operating expenses
12,140
12,344
24,830
25,178
Real estate taxes and insurance
7,169
9,043
14,142
17,762
Depreciation and amortization
14,645
18,186
29,372
33,856
General and administrative
3,767
3,981
7,584
7,765
Interest
6,084
5,664
11,890
11,030
Total expenses
43,805
49,218
87,818
95,591
Loss on extinguishment of debt
—
—
(67
)
—
Gain on consolidation of Sponsored
REIT
—
—
394
—
Impairment and loan loss reserve
—
(1,140
)
—
(1,140
)
Gain on sale of properties and impairment
of asset held for sale, net
(806
)
—
7,586
—
Loss before taxes
(8,345
)
(9,054
)
(5,872
)
(13,163
)
Tax expense
75
56
142
105
Net loss
$
(8,420
)
$
(9,110
)
$
(6,014
)
$
(13,268
)
Weighted average number of shares
outstanding, basic and diluted
103,330
103,193
103,283
103,441
Net loss per share, basic and diluted
$
(0.08
)
$
(0.09
)
$
(0.06
)
$
(0.13
)
Franklin Street Properties Corp. Financial
Results Supplementary Schedule B Condensed Consolidated Balance
Sheets (Unaudited)
June 30,
December 31,
(in thousands, except share and par value
amounts)
2023
2022
Assets:
Real estate assets:
Land
$
128,588
$
126,645
Buildings and improvements
1,362,939
1,388,869
Fixtures and equipment
11,612
11,151
1,503,139
1,526,665
Less accumulated depreciation
421,180
423,417
Real estate assets, net
1,081,959
1,103,248
Acquired real estate leases, less
accumulated amortization of $20,962 and $20,243, respectively
8,828
10,186
Asset held for sale
8,860
—
Cash, cash equivalents and restricted
cash
6,697
6,632
Tenant rent receivables
1,938
2,201
Straight-line rent receivable
50,267
52,739
Prepaid expenses and other assets
5,648
6,676
Related party mortgage loan receivable,
less allowance for credit loss of $0 and $4,237, respectively
—
19,763
Other assets: derivative asset
—
4,358
Office computers and furniture, net of
accumulated depreciation of $1,149 and $1,115, respectively
127
154
Deferred leasing commissions, net of
accumulated amortization of $20,327 and $19,043, respectively
34,985
35,709
Total assets
$
1,199,309
$
1,241,666
Liabilities and Stockholders’ Equity:
Liabilities:
Bank note payable
$
75,000
$
48,000
Term loans payable, less unamortized
financing costs of $529 and $250, respectively
124,471
164,750
Series A & Series B Senior Notes, less
unamortized financing costs of $412 and $494, respectively
199,588
199,506
Accounts payable and accrued expenses
32,501
50,366
Accrued compensation
2,286
3,644
Tenant security deposits
5,666
5,710
Lease liability
550
759
Acquired unfavorable real estate leases,
less accumulated amortization of $537 and $574, respectively
153
195
Total liabilities
440,215
472,930
Commitments and contingencies
Stockholders’ Equity:
Preferred stock, $.0001 par value,
20,000,000 shares authorized, none issued or outstanding
—
—
Common stock, $.0001 par value,
180,000,000 shares authorized, 103,430,353 and 103,235,914 shares
issued and outstanding, respectively
10
10
Additional paid-in capital
1,335,091
1,334,776
Accumulated other comprehensive income
2,480
4,358
Accumulated distributions in excess of
accumulated earnings
(578,487
)
(570,408
)
Total stockholders’ equity
759,094
768,736
Total liabilities and stockholders’
equity
$
1,199,309
$
1,241,666
Franklin Street Properties Corp. Financial
Results Supplementary Schedule C Condensed Consolidated Statements
of Cash Flows (Unaudited)
For the
Six Months Ended
June 30,
(in thousands)
2023
2022
Cash flows from operating
activities:
Net loss
$
(6,014
)
$
(13,268
)
Adjustments to reconcile net income (loss)
to net cash provided by (used in) operating activities:
Depreciation and amortization expense
30,634
34,863
Amortization of above and below market
leases
(30
)
(54
)
Amortization of other comprehensive income
into interest expense
(1,726
)
—
Shares issued as compensation
315
394
Loss on extinguishment of debt
67
—
Gain on consolidation of Sponsored
REIT
(394
)
—
Impairment and loan loss reserve
—
1,140
Gain on sale of properties and impairment
of asset held for sale, net
(7,586
)
—
Changes in operating assets and
liabilities:
Tenant rent receivables
263
(673
)
Straight-line rents
322
(2,904
)
Lease acquisition costs
(824
)
(2,426
)
Prepaid expenses and other assets
(267
)
(1,153
)
Accounts payable and accrued expenses
(8,747
)
(18,268
)
Accrued compensation
(1,358
)
(2,452
)
Tenant security deposits
(44
)
(400
)
Payment of deferred leasing
commissions
(4,137
)
(5,033
)
Net cash provided by (used in) operating
activities
474
(10,234
)
Cash flows from investing
activities:
Property improvements, fixtures and
equipment
(18,369
)
(21,496
)
Consolidation of Sponsored REIT
3,048
—
Proceeds received from sales of
properties
28,098
—
Net cash provided by (used in) investing
activities
12,777
(21,496
)
Cash flows from financing
activities:
Distributions to stockholders
(2,065
)
(51,924
)
Proceeds received from termination of
interest rate swap
4,206
—
Stock repurchases
—
(4,843
)
Borrowings under bank note payable
62,000
60,000
Repayments of bank note payable
(35,000
)
(5,000
)
Repayments of term loans payable
(40,000
)
—
Deferred financing costs
(2,327
)
(2,561
)
Net cash used in financing activities
(13,186
)
(4,328
)
Net increase (decrease) in cash, cash
equivalents and restricted cash
65
(36,058
)
Cash, cash equivalents and restricted
cash, beginning of year
6,632
40,751
Cash, cash equivalents and restricted
cash, end of period
$
6,697
$
4,693
Franklin Street Properties Corp. Earnings
Release Supplementary Schedule D Real Estate Portfolio Summary
Information (Unaudited & Approximated)
Commercial portfolio lease expirations (1)
Total
% of
Year
Square Feet
Portfolio
2023
177,038
2.8
%
2024
622,040
9.9
%
2025
438,551
7.0
%
2026
617,649
9.9
%
2027
334,289
5.3
%
Thereafter (2)
4,081,091
65.1
%
6,270,658
100.0
%
(1)
Percentages are determined based upon
total square footage.
(2)
Includes 1,674,276 square feet of
vacancies at our owned and consolidated properties as of June 30,
2023.
(dollars & square feet in 000's)
As of June 30, 2023
% of
Square
% of
State
Properties
Investment
Portfolio
Feet
Portfolio
Colorado
4
$
457,647
42.3
%
2,140
34.1
%
Texas
9
330,946
30.6
%
2,424
38.6
%
Georgia
1
52,444
4.9
%
160
2.6
%
Minnesota
3
119,425
11.0
%
758
12.1
%
Virginia
1
31,821
2.9
%
298
4.8
%
Florida
1
70,152
6.5
%
213
3.4
%
Indiana
1
19,524
1.8
%
214
3.4
%
North Carolina (a)
1
-
0.0
%
64
1.0
%
Total
21
$
1,081,959
100.0
%
6,271
100.0
%
(a)
Property was classified as an asset held
for sale as of June 30, 2023.
Franklin Street Properties Corp. Earnings
Release Supplementary Schedule E Portfolio and Other Supplementary
Information (Unaudited & Approximated)
Recurring Capital Expenditures
(in thousands)
For the Three Months Ended
Year to Date
31-Mar-23
30-Jun-23
30-Jun-23
Tenant improvements
$
3,047
$
4,381
$
7,428
Deferred leasing costs
908
3,230
4,138
Non-investment capex
2,967
2,042
5,009
$
6,922
$
9,653
$
16,575
(in thousands)
For the Three Months Ended
Year Ended
31-Mar-22
30-Jun-22
30-Sep-22
31-Dec-22
31-Dec-22
Tenant improvements
$
1,877
$
5,453
$
6,813
$
7,508
$
21,651
Deferred leasing costs
3,032
1,327
2,053
1,152
7,564
Non-investment capex
5,065
6,736
9,289
9,074
30,164
$
9,974
$
13,516
$
18,155
$
17,734
$
59,379
Square foot & leased
percentages
June 30,
December 31,
2023
2022
Owned Properties:
Number of properties (a)
20
21
Square feet
6,056,898
6,239,530
Leased percentage
75.7
%
75.6
%
Consolidated Property - Single Asset
REIT (SAR):
Number of properties
1
—
Square feet
213,760
—
Leased percentage
4.1
%
Total Owned and Consolidated
Properties:
Number of properties
21
21
Square feet
6,270,658
6,239,530
Leased percentage
73.3
%
75.6
%
(a)
Includes property that was classified as
an asset held for sale as of June 30, 2023.
Franklin Street Properties Corp. Earnings
Release Supplementary Schedule F Percentage of Leased Space
(Unaudited & Estimated)
First
Second
% Leased (1)
Quarter
% Leased (1)
Quarter
as of
Average %
as of
Average %
Property Name
Location
Square Feet
31-Mar-23
Leased (2)
30-Jun-23
Leased (2)
1
FOREST PARK (3)
Charlotte, NC
64,198
78.4
%
78.4
%
78.4
%
78.4
%
2
PARK TEN
Houston, TX
157,609
90.8
%
86.6
%
90.8
%
90.8
%
3
PARK TEN PHASE II
Houston, TX
156,746
95.0
%
95.0
%
95.0
%
95.0
%
4
GREENWOOD PLAZA
Englewood, CO
196,236
66.3
%
66.3
%
66.3
%
66.3
%
5
ADDISON
Addison, TX
289,333
83.0
%
83.0
%
83.0
%
83.0
%
6
COLLINS CROSSING
Richardson, TX
300,887
97.1
%
96.8
%
97.1
%
97.1
%
7
INNSBROOK
Glen Allen, VA
298,183
47.8
%
47.8
%
81.3
%
81.3
%
8
LIBERTY PLAZA
Addison, TX
217,841
72.9
%
72.9
%
71.6
%
71.8
%
9
BLUE LAGOON
Miami, FL
213,182
98.5
%
98.5
%
98.5
%
98.5
%
10
ELDRIDGE GREEN
Houston, TX
248,399
100.0
%
100.0
%
100.0
%
100.0
%
11
121 SOUTH EIGHTH ST
Minneapolis, MN
298,121
84.5
%
84.5
%
79.6
%
82.2
%
12
801 MARQUETTE AVE
Minneapolis, MN
129,691
91.8
%
91.8
%
91.8
%
91.8
%
13
LEGACY TENNYSON CTR
Plano, TX
209,461
49.0
%
49.0
%
62.5
%
53.5
%
14
ONE LEGACY
Plano, TX
214,110
69.3
%
69.3
%
73.8
%
73.8
%
15
WESTCHASE I & II
Houston, TX
629,025
59.0
%
60.3
%
58.7
%
58.7
%
16
1999 BROADWAY
Denver, CO
682,639
61.9
%
65.2
%
61.0
%
61.6
%
17
1001 17TH STREET
Denver, CO
648,861
70.8
%
70.3
%
71.0
%
71.0
%
18
PLAZA SEVEN
Minneapolis, MN
330,096
65.0
%
71.6
%
64.4
%
64.3
%
19
PERSHING PLAZA
Atlanta, GA
160,145
79.8
%
79.8
%
79.8
%
79.8
%
20
600 17TH STREET
Denver, CO
612,135
80.5
%
79.3
%
80.8
%
80.6
%
OWNED PORTFOLIO
6,056,898
73.9
%
74.9
%
75.7
%
75.6
%
21
MONUMENT CIRCLE (4)
Charlotte, NC
213,760
4.1
%
4.1
%
4.1
%
4.1
%
OWNED & CONSOLIDATED
PORTFOLIO
6,270,658
71.5
%
72.5
%
73.3
%
73.2
%
(1)
% Leased as of month's end includes all
leases that expire on the last day of the quarter.
(2)
Average quarterly percentage is the
average of the end of the month leased percentage for each of the
three months during the quarter.
(3)
Property was classified as an asset held
for sale as of June 30, 2023.
(4)
Consolidated property as of January 1,
2023, which was previously was a managed property.
Franklin Street Properties Corp. Earnings
Release Supplementary Schedule G Largest 20 Tenants – FSP Owned and
Consolidated Portfolio (Unaudited & Estimated)
The following table includes the largest 20
tenants in FSP’s owned and consolidated portfolio based on total
square feet:
As of June 30, 2023
% of
Tenant
Sq Ft
Portfolio
1
CITGO Petroleum Corporation
248,399
4.0
%
2
EOG Resources, Inc.
169,167
2.7
%
3
US Government
168,573
2.7
%
4
Lennar Homes, LLC
155,808
2.5
%
5
Kaiser Foundation Health Plan, Inc.
120,979
1.9
%
6
Argo Data Resource Corporation
114,200
1.8
%
7
Swift, Currie, McGhee & Hiers, LLP
101,296
1.6
%
8
Commonwealth of Virginia
100,010
1.6
%
9
Deluxe Corporation
98,922
1.6
%
10
Ping Identity Corp.
89,856
1.4
%
11
Permian Resources Operating, LLC
67,856
1.1
%
12
Bread Financial Payments, Inc.
67,274
1.1
%
13
PricewaterhouseCoopers LLP
66,304
1.1
%
14
Hall and Evans LLC
65,878
1.0
%
15
Cyxtera Management, Inc.
61,826
1.0
%
16
Precision Drilling (US) Corporation
59,569
0.9
%
17
EMC Corporation
57,100
0.9
%
18
ID Software, LLC
57,100
0.9
%
19
Olin Corporation
54,080
0.9
%
20
Unique Vacations, Inc.
53,119
0.8
%
Total
1,977,316
31.5
%
Franklin Street Properties Corp. Earnings
Release Supplementary Schedule H Reconciliation and Definitions of
Funds From Operations (“FFO”) and Adjusted Funds From Operations
(“AFFO”)
A reconciliation of Net income to FFO and AFFO is shown below
and a definition of FFO and AFFO is provided on Supplementary
Schedule I. Management believes FFO and AFFO are used broadly
throughout the real estate investment trust (REIT) industry as
measurements of performance. The Company has included the National
Association of Real Estate Investment Trusts (NAREIT) FFO
definition as of May 17, 2016 in the table and notes that other
REITs may not define FFO in accordance with the current NAREIT
definition or may interpret the current NAREIT definition
differently. The Company’s computation of FFO and AFFO may not be
comparable to FFO or AFFO reported by other REITs or real estate
companies that define FFO or AFFO differently.
Reconciliation of Net Loss to FFO and
AFFO:
Three Months Ended
Six Months Ended
June 30,
June 30,
(In thousands, except per share
amounts)
2023
2022
2023
2022
Net loss
$
(8,420
)
$
(9,110
)
$
(6,014
)
$
(13,268
)
Gain on consolidation of Sponsored
REIT
—
—
(394
)
—
Impairment and loan loss reserve
—
1,140
—
1,140
Gain on sale of properties and impairment
of asset held for sale, net
806
—
(7,586
)
—
Depreciation & amortization
14,633
18,141
29,342
33,802
NAREIT FFO
7,019
10,171
15,348
21,674
Lease Acquisition costs
91
86
169
165
Funds From Operations (FFO)
$
7,110
$
10,257
$
15,517
$
21,839
Funds From Operations (FFO)
$
7,110
$
10,257
$
15,517
$
21,839
Loss on extinguishment of debt
—
—
67
—
Amortization of deferred financing
costs
672
481
1,261
1,007
Shares issued as compensation
315
394
315
394
Straight-line rent
653
(1,688
)
322
(2,904
)
Tenant improvements
(4,381
)
(5,453
)
(7,428
)
(7,330
)
Leasing commissions
(3,230
)
(1,327
)
(4,138
)
(4,359
)
Non-investment capex
(2,042
)
(6,736
)
(5,009
)
(11,801
)
Adjusted Funds From Operations (AFFO)
$
(903
)
$
(4,072
)
$
907
$
(3,154
)
Per Share Data
EPS
$
(0.08
)
$
(0.09
)
$
(0.06
)
$
(0.13
)
FFO
$
0.07
$
0.10
$
0.15
$
0.21
AFFO
$
(0.01
)
$
(0.04
)
$
0.01
$
(0.03
)
Weighted average shares (basic and
diluted)
103,330
103,193
103,283
103,441
Funds From Operations (“FFO”)
The Company evaluates performance based on Funds From
Operations, which we refer to as FFO, as management believes that
FFO represents the most accurate measure of activity and is the
basis for distributions paid to equity holders. The Company defines
FFO as net income or loss (computed in accordance with GAAP),
excluding gains (or losses) from sales of property, hedge
ineffectiveness, acquisition costs of newly acquired properties
that are not capitalized and lease acquisition costs that are not
capitalized plus depreciation and amortization, including
amortization of acquired above and below market lease intangibles
and impairment charges on mortgage loans, properties or investments
in non-consolidated REITs, and after adjustments to exclude equity
in income or losses from, and, to include the proportionate share
of FFO from, non-consolidated REITs.
FFO should not be considered as an alternative to net income or
loss (determined in accordance with GAAP), nor as an indicator of
the Company’s financial performance, nor as an alternative to cash
flows from operating activities (determined in accordance with
GAAP), nor as a measure of the Company’s liquidity, nor is it
necessarily indicative of sufficient cash flow to fund all of the
Company’s needs.
Other real estate companies and the National Association of Real
Estate Investment Trusts, or NAREIT, may define this term in a
different manner. We have included the NAREIT FFO as of May 17,
2016 in the table and note that other REITs may not define FFO in
accordance with the current NAREIT definition or may interpret the
current NAREIT definition differently than we do.
We believe that in order to facilitate a clear understanding of
the results of the Company, FFO should be examined in connection
with net income or loss and cash flows from operating, investing
and financing activities in the consolidated financial
statements.
Adjusted Funds From Operations (“AFFO”)
The Company also evaluates performance based on Adjusted Funds
From Operations, which we refer to as AFFO. The Company defines
AFFO as (1) FFO, (2) excluding loss on extinguishment of debt that
is non-cash, (3) excluding our proportionate share of FFO and
including distributions received, from non-consolidated REITs, (4)
excluding the effect of straight-line rent, (5) plus the
amortization of deferred financing costs, (6) plus the value of
shares issued as compensation and (7) less recurring capital
expenditures that are generally for maintenance of properties,
which we call non-investment capex or are second generation capital
expenditures. Second generation costs include re-tenanting space
after a tenant vacates, which include tenant improvements and
leasing commissions.
We exclude development/redevelopment activities, capital
expenditures planned at acquisition and costs to reposition a
property. We also exclude first generation leasing costs, which are
generally to fill vacant space in properties we acquire or were
planned for at acquisition.
AFFO should not be considered as an alternative to net income or
loss (determined in accordance with GAAP), nor as an indicator of
the Company’s financial performance, nor as an alternative to cash
flows from operating activities (determined in accordance with
GAAP), nor as a measure of the Company’s liquidity, nor is it
necessarily indicative of sufficient cash flow to fund all of the
Company’s needs. Other real estate companies may define this term
in a different manner. We believe that in order to facilitate a
clear understanding of the results of the Company, AFFO should be
examined in connection with net income or loss and cash flows from
operating, investing and financing activities in the consolidated
financial statements.
Franklin Street Properties Corp. Earnings
Release Supplementary Schedule I Reconciliation and Definition of
Sequential Same Store results to property Net Operating Income
(NOI) and Net Income
Net Operating Income (“NOI”)
The Company provides property performance based on Net Operating
Income, which we refer to as NOI. Management believes that
investors are interested in this information. NOI is a non-GAAP
financial measure that the Company defines as net income or loss
(the most directly comparable GAAP financial measure) plus general
and administrative expenses, depreciation and amortization,
including amortization of acquired above and below market lease
intangibles and impairment charges, interest expense, less equity
in earnings of nonconsolidated REITs, interest income, management
fee income, hedge ineffectiveness, gains or losses on
extinguishment of debt, gains or losses on the sale of assets and
excludes non-property specific income and expenses. The information
presented includes footnotes and the data is shown by region with
properties owned in the periods presented, which we call Sequential
Same Store. The comparative Sequential Same Store results include
properties held for all periods presented. We exclude properties
that have been placed in service, but that do not have operating
activity for all periods presented, dispositions and significant
nonrecurring income such as bankruptcy settlements and lease
termination fees. NOI, as defined by the Company, may not be
comparable to NOI reported by other REITs that define NOI
differently. NOI should not be considered an alternative to net
income or loss as an indication of our performance or to cash flows
as a measure of the Company’s liquidity or its ability to make
distributions. The calculations of NOI and Sequential Same Store
are shown in the following table:
Rentable Square Feet
Three Months Ended
Three Months Ended
Inc
%
(in thousands)
or RSF
30-Jun-23
31-Mar-23
(Dec)
Change
Region
East
362
$
553
$
478
$
75
15.7
%
MidWest
758
1,718
2,239
(521
)
(23.3
)
%
South
2,797
8,128
7,933
195
2.5
%
West
2,140
6,412
6,422
(10
)
(0.2
)
%
Property NOI* from Owned Properties
6,057
16,811
17,072
(261
)
(1.5
)
%
Disposition and Acquisition Properties
(a)
214
(240
)
668
(908
)
(5.1
)
%
NOI*
6,271
$
16,571
$
17,740
$
(1,169
)
(6.6
)
%
Sequential Same Store
$
16,811
$
17,072
$
(261
)
(1.5
)
%
Less Nonrecurring
Items in NOI* (b)
301
1,292
(991
)
6.1
%
Comparative
Sequential Same Store
$
16,510
$
15,780
$
730
4.6
%
Reconciliation to
Three Months Ended
Three Months Ended
Net income (loss)
30-Jun-23
31-Mar-23
Net income (loss)
$
(8,420
)
$
2,406
Add (deduct):
Loss on extinguishment of debt
—
67
Gain on consolidation of Sponsored
REIT
—
(394
)
Impairment and loan loss reserve
—
—
Gain on sale of properties, net
806
(8,392
)
Management fee income
(427
)
(374
)
Depreciation and amortization
14,645
14,727
Amortization of above/below market
leases
(12
)
(18
)
General and administrative
3,768
3,817
Interest expense
6,084
5,806
Interest income
—
—
Non-property specific items, net
127
95
NOI*
$
16,571
$
17,740
(a)
We define Disposition and Acquisition
Properties as properties that were sold or acquired or consolidated
and do not have operating activity for all periods presented.
(b)
Nonrecurring Items in NOI include proceeds
from bankruptcies, lease termination fees or other significant
nonrecurring income or expenses, which may affect
comparability.
*Excludes NOI from investments in and interest income from
secured loans to non-consolidated REITs.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230801022335/en/
Georgia Touma (877) 686-9496
Grafico Azioni Franklin Street Properties (AMEX:FSP)
Storico
Da Dic 2024 a Gen 2025
Grafico Azioni Franklin Street Properties (AMEX:FSP)
Storico
Da Gen 2024 a Gen 2025
