$0.35 Net Income per Share for Fourth
Quarter 2020 $0.16 FFO (Funds From Operations) per Share for Fourth
Quarter 2020 Includes a $0.03 per Share Decrease Due to a
Non-Cash Write-Off from a Fourth Quarter Bankruptcy of a Tenant in
the Travel Industry
_______________________________________
$0.30 Net Income per Share for Full Year
2020 $0.74 FFO per Share for Full Year 2020 Includes a $0.03
per Share Decrease Due to a Non-Cash Write-Off from a Fourth
Quarter Bankruptcy of a Tenant in the Travel Industry
_______________________________________
Sold Emperor Boulevard Property in Durham,
North Carolina on December 23, 2020 Sales Price was $89.7
Million, or approximately $346 per square foot Sold at a Gain of
approximately $41.9 Million Repaid $87.3 Million of Debt with
Proceeds on December 24, 2020
_______________________________________
Introduces 2021 Disposition Guidance
Anticipates Aggregate Gross Proceeds of Approximately $350 Million
to $450 Million Sale Proceeds to be Primarily Used for Repayment of
Debt FSP Remains Committed to its Sunbelt and Mountain West Market
Focus
Franklin Street Properties Corp. (the “Company”, “FSP”, “we” or
“our”) (NYSE American: FSP), a real estate investment trust (REIT),
announced its results for the fourth quarter and year ended
December 31, 2020.
George J. Carter, Chairman and Chief Executive Officer,
commented as follows:
“Reflecting on 2020, I would like to start by thanking everyone
who contributed to the successful operation of our business during
these challenging times that were headlined by the COVID-19
pandemic, including frontline workers, first responders, our
tenants and their employees, FSP employees, our vendors and service
providers, our Board of Directors, and of course, our shareholders.
Notwithstanding the specific challenges caused by the pandemic, for
full-year 2020, our monthly rental collections averaged
approximately 99% and we achieved approximately 1,130,000 square
feet of total leasing with new tenants, renewals and
expansions.
For 2021, we are focused on two primary objectives: leasing
progress and debt reduction. From a leasing perspective, we
anticipate the potential for growing office space demand in our
markets as a result of an improved economic situation due to
increasing access to both therapeutics and vaccines. We believe
that users of office space are now reconsidering the office
densification trends of the past approximately 20 years. We also
believe that, even with the continuation of some planned for level
of remote/work-from-home flexibility, the potential reversal or
slowing of office densification could bode well for future office
space absorption. Our 2021 leasing focus includes both increased
economic occupancy and longer-term renewals of existing tenants. We
believe that successful leasing efforts will translate into higher
property valuations.
In terms of debt reduction, we believe that the sale of our
Emperor Boulevard property in Durham, North Carolina on December
23, 2020 for $89.7 million demonstrated our ability to identify and
dispose of a property that we viewed as having reached its
valuation objective, and then to apply substantially all of the
proceeds to the repayment of debt. FSP intends to build upon our
sale of Emperor Boulevard by pursuing additional dispositions,
particularly where we believe that embedded values of properties
may not be appropriately reflected in the price of our common
stock, and then to apply the proceeds from any such dispositions
primarily for the repayment of debt. We believe that further debt
reduction will provide greater financial flexibility and position
the Company for stronger shareholder returns. Accordingly, we have
introduced full year 2021 disposition guidance in the range of
approximately $350 million to $450 million in aggregate gross
proceeds.
FSP remains committed to its Sunbelt and Mountain-West office
focus that emphasizes markets/properties with compelling long-term
population and employment growth potential. We look forward to 2021
with anticipation and optimism.”
Financial Highlights
- Net Income was $37.4 million and $32.6 million, or $0.35 and
$0.30 per basic and diluted share, for the fourth quarter and year
ended December 31, 2020, respectively.
- Funds From Operations (FFO) was $17.4 million and $79.3
million, or $0.16 and $0.74 per basic and diluted share, for the
fourth quarter and year ended December 31, 2020, respectively.
- FFO for the fourth quarter and year ended December 31, 2020
includes a charge of $3.1 million, or $0.03 per share, as a result
of a write-off related to the December 21, 2020 voluntary petition
for relief under Chapter 11 of the United States Bankruptcy Code by
the parent of WorldVentures Holdings, LLC (the “WorldVentures
Bankruptcy”). WorldVentures leases approximately 130,000 square
feet at our Legacy Tennyson property in Plano, Texas.
- Adjusted Funds From Operations (AFFO) was $0.05 and $0.11 per
basic and diluted share for the fourth quarter and year ended
December 31, 2020, respectively.
- On December 23, 2020, we sold our Emperor Boulevard property in
Durham, North Carolina for $89.7 million, or approximately $346 per
square foot, and recorded a gain of approximately $41.9 million in
connection with the sale.
- In December 2020, we repaid $87.3 million of debt under our
revolving and term loan facilities using net proceeds from the sale
of Emperor Boulevard.
- We have $600.7 million of liquidity as of December 31, 2020,
consisting of $4.2 million of cash and $596.5 million available on
our revolving line of credit.
- Our debt is entirely unsecured and we have no scheduled debt
maturities until November 30, 2021.
COVID-19 Pandemic Update
FSP remains committed to the health and safety of its employees,
tenants, vendors and visitors and will continue to implement
recommended guidelines for social distancing and other safety
protocols at our properties and corporate headquarters.
- All of our properties remain open for business.
- As of February 12, 2021, we had collected approximately 99% of
rental receipts due in January 2021. Due to the high level of
uncertainty related to the COVID-19 pandemic, we are unable to
predict the level of rental receipts in future months.
- We collected approximately 98% of rental receipts due for the
fourth quarter 2020 and approximately 99% of rental receipts due
for the year ended December 31, 2020.
- For the year ended December 31, 2020, we had tenant write-offs
of approximately $3.8 million, representing approximately 1.5% of
annualized rents.
- During the COVID-19 pandemic, we have received rent relief
requests from some of our tenants. The majority of these requests
for relief have been in the form of potential rent deferrals for
varying lengths of time. Excluding any impact from the
WorldVentures Bankruptcy, as of February 5, 2021, we are in
discussions with tenants regarding potential rent deferrals
representing less than approximately 1% of annualized rents. We
will continue to review each request for rent relief on a case by
case basis. Where prudent, we may grant deferrals and, in some
instances, seek extended lease terms. We are unable to predict the
outcomes of these ongoing negotiations, the amount of the rent
relief packages, if any, and ultimate recovery of any deferred
amounts.
Leasing Update
- During the quarter ended December 31, 2020, we leased
approximately 524,000 square feet, of which approximately 21,000
square feet was with new tenants. During the year ended December
31, 2020, we leased approximately 1,130,000 square feet, of which
approximately 368,000 square feet was with new tenants. During the
year ended December 31, 2019, we leased approximately 1,417,000
square feet, of which approximately 534,000 square feet was with
new tenants.
- Our directly owned real estate portfolio of 34 owned properties
(including our 2 redevelopment properties) totaling approximately
9.7 million square feet, was approximately 83.8% leased as of
December 31, 2020, compared to approximately 84.3% leased as of
September 30, 2020. The decrease in the leased percentage is
primarily a result of the December 23, 2020 sale of our Emperor
Boulevard property with 259,531 rentable square feet, which was
100% leased and is excluded from our statistics at year-end.
- During the quarter ended December 31, 2020, existing tenant
Booz Allen Hamilton entered into an amendment to its lease to
extend and expand its leased square footage at our Meadow Point
property in Chantilly, Virginia by approximately 29,000 rentable
square feet, from approximately 34,000 rentable square feet to
approximately 63,000 rentable square feet. The term of the
expansion is 67 months, with the term of the lease now expiring on
July 31, 2027. Meadow Point was approximately 91% leased as of
December 31, 2020.
- During the quarter ended December 31, 2020, existing tenant
Centene Management Company entered into an amendment to its lease
to extend and expand its leased square footage at our Timberlake
Corporate Center in Chesterfield, Missouri by approximately 100,000
rentable square feet, from approximately 217,000 rentable square
feet to approximately 317,000 rentable square feet. The term was
extended by 84 months, with the term of the lease now expiring on
June 30, 2030. Timberlake Corporate Center was 100% leased as of
December 31, 2020.
- Lease expirations for 2021 are approximately 739,000 square
feet, representing approximately 7.6% of our owned portfolio.
- The weighted average GAAP base rent per square foot achieved on
leasing activity during the year ended December 31, 2020 was
$28.47, or 7.7% higher than average rents in the respective
properties as applicable compared to the year ended December 31,
2019. The average lease term on leases in the year ended December
31, 2020, was 8.3 years, matching the 8.3 years for the full year
of 2019. Overall the portfolio weighted average rent per occupied
square foot was $29.60 as of December 31, 2020 compared to $29.88
as of December 31, 2019.
Dividend Update
On January 15, 2021, the Company announced that its Board of
Directors declared a regular quarterly cash dividend for the three
months ended December 31, 2020 of $0.09 per share of common stock
that will be paid on February 18, 2021 to stockholders of record on
January 29, 2021.
Non-GAAP Financial
Information
A reconciliation of Net income to FFO, 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.
2021 Net Income, FFO and Disposition
Guidance
At this time, we are not able to predict whether and to what
extent our level of rental receipts may change in future months.
Consequently, we are continuing suspension of Net Income and FFO
guidance and will not be providing additional guidance until such
time as we have a better understanding of the duration of the
COVID-19 pandemic and its impact on our business and the businesses
of our tenants. However, we are introducing disposition guidance
for full year 2021, as we execute on a strategy to dispose of
certain properties where we believe our valuation objectives have
been met. Anticipated dispositions in 2021 are estimated to result
in aggregate gross proceeds in the range of approximately $350
million to $450 million. We intend to use the proceeds of any such
dispositions primarily for the repayment of debt under our
revolving line of credit and term loan facilities, any special
distributions required to meet REIT requirements, and general
corporate purposes. This guidance reflects our current expectations
of economic and market conditions and is subject to change. We will
update our disposition guidance quarterly in our earnings releases.
There can be no assurance that the Company’s actual results will
not differ materially from the estimates set forth above.
Real Estate Update
Supplementary schedules provide property information for the
Company’s owned and managed real estate portfolio as of December
31, 2020. 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 February 17, 2021 at 11:00
a.m. (ET) to discuss the fourth quarter 2020 results. To access the
call, please dial 1-800-464-8240. Internationally, the call may be
accessed by dialing 1-412-902-6521. To access the call from Canada,
please dial 1-866-605-3852. 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 our
ability to lease space in the future, expectations for dispositions
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, 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, any inability to
dispose of properties on acceptable terms and any delays in the
timing of any such 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, 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,
2020, as the same 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
Year Ended
December 31,
December 31,
(in thousands, except per share
amounts)
2020
2019
2020
2019
Revenue:
Rental
$
59,408
$
68,575
$
244,207
$
265,527
Related party revenue:
Management fees and interest income from
loans
402
417
1,610
3,517
Other
—
5
31
21
Total revenue
59,810
68,997
245,848
269,065
Expenses:
Real estate operating expenses
17,442
19,428
66,940
72,311
Real estate taxes and insurance
12,042
10,463
48,390
47,871
Depreciation and amortization
21,899
22,996
88,558
90,909
General and administrative
3,838
3,376
14,997
14,473
Interest
9,030
8,982
36,026
36,757
Total expenses
64,251
65,245
254,911
262,321
Gain on sale of property
41,928
—
41,928
—
Income before taxes on income
37,487
3,752
32,865
6,744
Tax expense on income
47
104
250
269
Net income
$
37,440
$
3,648
$
32,615
$
6,475
Weighted average number of shares
outstanding, basic and diluted
107,328
107,240
107,303
107,233
Net income per share, basic and
diluted
$
0.35
$
0.03
$
0.30
$
0.06
Franklin Street Properties Corp.
Financial Results
Supplementary Schedule B
Condensed Consolidated Balance
Sheets
(Unaudited)
December 31,
December 31,
(in thousands, except share and par value
amounts)
2020
2019
Assets:
Real estate assets:
Land
$
189,155
$
191,578
Buildings and improvements
1,938,629
1,924,664
Fixtures and equipment
12,949
11,665
2,140,733
2,127,907
Less accumulated depreciation
538,717
490,697
Real estate assets, net
1,602,016
1,637,210
Acquired real estate leases, less
accumulated amortization of $55,447 and $60,749, respectively
28,206
40,704
Cash, cash equivalents and restricted
cash
4,150
9,790
Tenant rent receivables
7,656
3,851
Straight-line rent receivable
67,789
66,881
Prepaid expenses and other assets
5,752
7,246
Related party mortgage loan
receivables
21,000
21,000
Other assets: derivative asset
—
3,022
Office computers and furniture, net of
accumulated depreciation of $1,443 and $1,362, respectively
163
183
Deferred leasing commissions, net of
accumulated amortization of $30,411 and $28,114, respectively
56,452
52,767
Total assets
$
1,793,184
$
1,842,654
Liabilities and Stockholders’ Equity:
Liabilities:
Bank note payable
$
3,500
$
—
Term loans payable, less unamortized
financing costs of $2,677 and $4,267, respectively
717,323
765,733
Series A & Series B Senior Notes, less
unamortized financing costs of $822 and $985, respectively
199,178
199,015
Accounts payable and accrued expenses
72,058
66,658
Accrued compensation
3,918
3,400
Tenant security deposits
8,677
9,346
Lease liability
1,536
1,890
Other liabilities: derivative
liabilities
17,311
7,704
Acquired unfavorable real estate leases,
less accumulated amortization of $4,031 and $4,676,
respectively
1,592
2,512
Total liabilities
1,025,093
1,056,258
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, 107,328,199 and 107,269,201 shares
issued and outstanding, respectively
11
11
Additional paid-in capital
1,357,131
1,356,794
Accumulated other comprehensive loss
(17,311
)
(4,682
)
Accumulated distributions in excess of
accumulated earnings
(571,740
)
(565,727
)
Total stockholders’ equity
768,091
786,396
Total liabilities and stockholders’
equity
$
1,793,184
$
1,842,654
Franklin Street Properties Corp.
Financial Results
Supplementary Schedule C
Condensed Consolidated Statements
of Cash Flows
(Unaudited)
For the
Year Ended
December 31,
(in thousands)
2020
2019
Cash flows from operating
activities:
Net income
$
32,615
$
6,475
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization expense
91,581
93,787
Amortization of above and below market
leases
(313
)
(402
)
Shares issued as compensation
337
337
Gain on sale of property
(41,928
)
—
Decrease in allowance for doubtful
accounts and write-off of accounts receivable
(13
)
(71
)
Changes in operating assets and
liabilities:
Tenant rent receivables
(3,792
)
158
Straight-line rents
(1,685
)
(8,876
)
Lease acquisition costs
(2,123
)
(3,999
)
Prepaid expenses and other assets
(129
)
2,313
Accounts payable and accrued expenses
7,785
3,910
Accrued compensation
518
357
Tenant security deposits
(669
)
3,027
Payment of deferred leasing
commissions
(13,735
)
(15,101
)
Net cash provided by operating
activities
68,449
81,915
Cash flows from investing
activities:
Property improvements, fixtures and
equipment
(77,919
)
(70,746
)
Repayment of related party mortgage loan
receivable
—
(2,400
)
Investment in related party mortgage loan
receivable
—
52,060
Proceeds received from sale of
property
88,958
—
Proceeds received from liquidating
trust
—
1,470
Net cash provided by (used in) investing
activities
11,039
(19,616
)
Cash flows from financing
activities:
Distributions to stockholders
(38,628
)
(38,603
)
Borrowings under bank note payable
105,000
45,000
Repayments of bank note payable
(101,500
)
(70,000
)
Repayment on term loan payable
(50,000
)
—
Deferred financing costs
—
(83
)
Net cash used in financing activities
(85,128
)
(63,686
)
Net decrease in cash, cash equivalents
and restricted cash
(5,640
)
(1,387
)
Cash, cash equivalents and restricted
cash, beginning of year
9,790
11,177
Cash, cash equivalents and restricted
cash, end of period
$
4,150
$
9,790
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
2021
738,723
7.6%
2022
1,067,527
11.1%
2023
450,184
4.7%
2024
839,607
8.7%
2025
867,351
9.0%
Thereafter (2)
5,692,748
58.9%
9,656,140
100.0%
________________________________ (1)
Percentages are determined based upon total square footage.
(2)
Includes 1,396,863 square feet of vacancies at our operating
properties and 168,843 square feet of vacancies at our
redevelopment properties as of December 31, 2020. We define
redevelopment properties as properties being developed, redeveloped
or where redevelopment is complete, but are in lease-up and that
are not stabilized.
(dollars & square feet in 000's)
As of December 31, 2020 (a)
# of
% of
Square
% of
State
Properties
Investment
Portfolio
Feet
Portfolio
Colorado
6
$
552,576
34.5%
2,620
27.1%
Texas
9
341,721
21.3%
2,420
25.1%
Georgia
5
322,107
20.1%
1,967
20.4%
Minnesota
3
120,527
7.5%
757
7.8%
Virginia
4
84,587
5.3%
685
7.1%
North Carolina
1
5,877
0.4%
64
0.7%
Missouri
2
43,108
2.7%
352
3.6%
Illinois
2
46,379
2.9%
372
3.9%
Florida
1
55,500
3.5%
213
2.2%
Indiana
1
29,634
1.8%
206
2.1%
Total
34
$
1,602,016
100.0%
9,656
100.0%
(a)
Includes investment in our redevelopment
properties. We define redevelopment properties as properties being
developed, redeveloped or where redevelopment is complete, but are
in lease-up and that are not stabilized.
Franklin Street Properties Corp.
Earnings Release
Supplementary Schedule E
Portfolio and Other Supplementary
Information
(Unaudited &
Approximated)
Recurring Capital Expenditures
Year
(in thousands)
For the Three Months Ended
Ended
31-Mar-20
30-Jun-20
30-Sep-20
31-Dec-20
31-Dec-20
Tenant improvements
$
10,716
$
13,531
$
8,022
$
837
$
33,106
Deferred leasing costs
2,730
603
2,033
7,432
12,798
Non-investment capex
4,527
6,581
6,373
6,105
23,586
$
17,973
$
20,715
$
16,428
$
14,374
$
69,490
For the Three Months Ended
Year Ended
31-Mar-19
30-Jun-19
30-Sep-19
31-Dec-19
31-Dec-19
Tenant improvements
$
8,318
$
10,169
$
7,890
$
15,874
$
42,251
Deferred leasing costs
4,239
3,666
1,286
3,164
12,355
Non-investment capex
2,413
4,049
3,968
6,304
16,734
$
14,970
$
17,884
$
13,144
$
25,342
$
71,340
Square foot & leased
percentages
December 31,
December 31,
2020
2019
Operating Properties:
Number of properties
32
32
Square feet
9,331,489
9,504,634
Leased percentage
85.0%
87.6%
Redevelopment Properties (a):
Number of properties
2
3
Square feet
324,651
405,215
Leased percentage
48.0%
50.3%
Total Owned Properties:
Number of properties
34
35
Square feet
9,656,140
9,909,849
Leased percentage
83.8%
86.1%
Managed Properties - Single Asset REITs
(SARs):
Number of properties
2
2
Square feet
348,545
348,545
Total Operating, Redevelopment and
Managed Properties:
Number of properties
36
37
Square feet
10,004,685
10,258,394
(a)
We define redevelopment properties as
properties being developed, redeveloped or where redevelopment is
complete, but are in lease-up and that are not stabilized.
Franklin Street Properties Corp.
Earnings Release
Supplementary Schedule F
Percentage of Leased Space
(Unaudited & Estimated)
Third
Fourth
% Leased (1)
Quarter
% Leased (1)
Quarter
as of
Average %
as of
Average %
Property Name
Location
Square Feet
30-Sep-20
Leased (2)
31-Dec-20
Leased (2)
1
FOREST PARK
Charlotte, NC
64,198
78.4%
49.9%
78.4%
78.4%
2
MEADOW POINT
Chantilly, VA
138,537
70.3%
70.3%
91.1%
77.2%
3
TIMBERLAKE
Chesterfield, MO
234,496
95.7%
95.7%
100.0%
97.1%
4
TIMBERLAKE EAST
Chesterfield, MO
117,036
100.0%
100.0%
100.0%
94.5%
5
NORTHWEST POINT
Elk Grove Village, IL
177,095
100.0%
100.0%
100.0%
100.0%
6
PARK TEN
Houston, TX
157,460
71.7%
71.7%
71.7%
71.7%
7
PARK TEN PHASE II
Houston, TX
156,746
95.0%
95.0%
95.0%
95.0%
8
GREENWOOD PLAZA
Englewood, CO
196,236
100.0%
100.0%
100.0%
100.0%
9
ADDISON
Addison, TX
289,325
83.7%
84.6%
83.7%
83.7%
10
COLLINS CROSSING
Richardson, TX
300,887
83.5%
83.5%
83.5%
83.5%
11
INNSBROOK
Glen Allen, VA
298,183
57.2%
57.2%
57.2%
57.2%
12
RIVER CROSSING
Indianapolis, IN
205,729
100.0%
99.0%
100.0%
100.0%
13
LIBERTY PLAZA
Addison, TX
216,906
75.1%
74.2%
74.1%
74.1%
14
380 INTERLOCKEN
Broomfield, CO
240,359
73.1%
73.1%
76.0%
74.1%
15
390 INTERLOCKEN
Broomfield, CO
241,512
99.4%
99.0%
99.4%
99.4%
16
BLUE LAGOON (3)
Miami, FL
213,182
73.1%
73.1%
73.1%
73.1%
17
ELDRIDGE GREEN
Houston, TX
248,399
100.0%
100.0%
100.0%
100.0%
18
ONE OVERTON PARK
Atlanta, GA
387,267
93.3%
93.3%
95.6%
94.3%
19
LOUDOUN TECH
Dulles, VA
136,658
98.9%
98.9%
98.9%
98.9%
20
4807 STONECROFT (3)
Chantilly, VA
111,469
0.0%
0.0%
0.0%
0.0%
21
121 SOUTH EIGHTH ST
Minneapolis, MN
297,209
92.7%
87.4%
92.6%
92.6%
22
801 MARQUETTE AVE
Minneapolis, MN
129,821
91.8%
55.2%
91.8%
91.8%
EMPEROR BOULEVARD
Durham, NC
—
100.0%
100.0%
(4)
(4)
23
LEGACY TENNYSON CTR
Plano, TX
207,049
100.0%
100.0%
100.0%
100.0%
24
ONE LEGACY
Plano, TX
214,110
56.4%
55.2%
56.4%
56.4%
25
909 DAVIS
Evanston, IL
195,098
93.3%
93.3%
93.3%
93.3%
26
ONE RAVINIA DRIVE
Atlanta, GA
386,602
88.5%
87.7%
89.0%
89.0%
27
TWO RAVINIA
Atlanta, GA
411,047
69.2%
69.3%
69.2%
69.2%
28
WESTCHASE I & II
Houston, TX
629,025
56.3%
55.6%
53.5%
54.4%
29
1999 BROADWAY
Denver, CO
677,539
84.8%
85.3%
81.8%
82.9%
30
999 PEACHTREE
Atlanta, GA
621,946
86.5%
86.7%
84.5%
84.5%
31
1001 17TH STREET
Denver, CO
655,420
96.8%
97.0%
96.0%
96.5%
32
PLAZA SEVEN
Minneapolis, MN
330,096
91.9%
91.3%
88.5%
90.4%
33
PERSHING PLAZA
Atlanta, GA
160,145
98.9%
98.9%
98.9%
98.9%
34
600 17TH STREET
Denver, CO
609,353
87.1%
87.6%
88.0%
88.0%
OWNED PORTFOLIO
9,656,140
84.3%
83.4%
83.8%
83.9%
______________________________
(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)
We define redevelopment properties as
properties being developed, redeveloped or where redevelopment is
complete, but are in lease-up and that are not stabilized.
(4)
Property was sold on December 23,
2020.
Franklin Street Properties Corp.
Earnings Release
Supplementary Schedule G
Largest 20 Tenants – FSP Owned
Portfolio
(Unaudited & Estimated)
The following table includes the largest
20 tenants in FSP’s owned portfolio based on total square feet:
As of December 31, 2020
% of
Tenant
Sq Ft
Portfolio
1
Centene Management Company, LLC
317,101
3.3%
2
CITGO Petroleum Corporation
248,399
2.6%
3
Ovintiv USA Inc.
234,495
2.4%
4
US Government
226,140
2.3%
5
Eversheds Sutherland (US) LLP
179,868
1.9%
6
EOG Resources, Inc.
169,167
1.8%
7
The Vail Corporation
164,636
1.7%
8
Lennar Homes, LLC
155,808
1.6%
9
T-Mobile South, LLC dba T-Mobile
151,792
1.6%
10
Citicorp Credit Services, Inc
146,260
1.5%
11
Jones Day
140,342
1.4%
12
Worldventures Holdings, LLC (1)
129,998
1.3%
13
Kaiser Foundation Health Plan
120,979
1.3%
14
Argo Data Resource Corporation
114,200
1.2%
15
Giesecke & Devrient America
112,110
1.2%
16
Randstad General Partner (US)
111,952
1.2%
17
VMWare, Inc.
100,853
1.0%
18
Deluxe Corporation
94,302
1.0%
19
Ping Identity Corp.
89,856
0.9%
20
Common Grounds, LLC
76,984
0.8%
Total
3,085,242
32.0%
(1)
On December 21, 2020, tenant’s parent
filed a voluntary petition for relief under Chapter 11 of the
United States Bankruptcy Code.
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 Income to FFO and
AFFO:
Three Months Ended
Year Ended
December 31,
December 31,
(In thousands, except per share
amounts)
2020
2019
2020
2019
Net income
$
37,440
$
3,648
$
32,615
$
6,475
Gain on sale of property
(41,928
)
—
(41,928
)
—
Depreciation & amortization
21,820
22,898
88,244
90,507
NAREIT FFO
17,332
26,546
78,931
96,982
Lease Acquisition costs
134
209
467
560
Funds From Operations (FFO)
$
17,466
$
26,755
$
79,398
$
97,542
Funds From Operations (FFO)
$
17,466
$
26,755
$
79,398
$
97,542
Amortization of deferred financing
costs
824
721
3,025
2,878
Shares issued as compensation
—
337
337
337
Straight-line rent
951
(1,927
)
(1,685
)
(8,876
)
Tenant improvements
(837
)
(15,874
)
(33,106
)
(42,251
)
Leasing commissions
(7,432
)
(3,164
)
(12,798
)
(12,355
)
Non-investment capex
(6,105
)
(6,304
)
(23,586
)
(16,734
)
Adjusted Funds From Operations (AFFO)
$
4,867
$
544
$
11,585
$
20,541
Per Share Data
EPS
$
0.35
$
0.03
$
0.30
$
0.06
FFO
$
0.16
$
0.25
$
0.74
$
0.91
AFFO
$
0.05
$
0.01
$
0.11
$
0.19
Weighted average shares (basic and
diluted)
107,328
107,240
107,303
107,233
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 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 our proportionate share of FFO and
including distributions received, from non-consolidated REITs, (3)
excluding the effect of straight-line rent, (4) plus the
amortization of deferred financing costs, (5) plus the value of
shares issued as compensation and (6) 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 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 the periods presented and
exclude our redevelopment properties. We also 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
31-Dec-20
30-Sep-20
(Dec)
Change
Region
East
573
$
1,047
$
922
$
125
13.6
%
MidWest
1,557
5,292
5,069
223
4.4
%
South
4,387
10,481
13,619
(3,138
)
(23.0)
%
West
2,620
11,006
10,976
30
0.3
%
Property NOI* from Operating
Properties
9,137
27,826
30,586
(2,760
)
(9.0)
%
Dispositions and Redevelopment Properties
(a)
519
1,554
1,611
(57
)
0.3
%
NOI*
9,656
$
29,380
$
32,197
$
(2,817
)
(8.7)
%
Sequential Same Store
$
27,826
$
30,586
$
(2,760
)
(9.0)
%
Less Nonrecurring
Items in NOI* (b)
345
351
(6
)
(0.1)
%
Comparative
Sequential Same Store
$
27,481
$
30,235
$
(2,754
)
(9.1)
%
Three Months Ended
Three Months Ended
Reconciliation to Net income
31-Dec-20
30-Sep-20
Net income (loss)
$
37,440
$
(1,679
)
Add (deduct):
Gain on sale of property
(41,928
)
—
Management fee income
(464
)
(484
)
Depreciation and amortization
21,899
22,076
Amortization of above/below market
leases
(79
)
(86
)
General and administrative
3,838
3,817
Interest expense
9,030
8,953
Interest income
(391
)
(386
)
Non-property specific items, net
35
(14
)
NOI*
$
29,380
$
32,197
(a)
We define redevelopment properties as properties being developed
redeveloped or where redevelopment is complete but are in lease-up
and that are not stabilized. We also include properties that have
been placed in service but that 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/20210216006183/en/
Georgia Touma (877) 686-9496
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