EX-99.1 2 fsp-20160426ex9912f227e.htm EX-99.1 fsp_Ex99_1

Exhibit 99.1

 

 

 

PRESS RELEASE

Franklin Street Properties Corp.

 

401 Edgewater Place Suite 200 Wakefield, Massachusetts  01880 (781) 557-1300    www.franklinstreetproperties.com

 

 

 

Contact: Georgia Touma   (877)  686-9496

For Immediate Release

 

Franklin Street Properties Corp. Announces

First Quarter 2016 Results

 

Wakefield, MA—April 26, 2016—Franklin Street Properties Corp. (the “Company”,  “FSP”, “we” or “our”) (NYSE MKT:  FSP), a real estate investment trust (REIT), announced today Funds From Operations (FFO) of $26.0 million or $0.26 per share for the first quarter ended March 31, 2016.  Net income was $2.6 million or $0.03 per share for the first quarter ended March 31, 2016.    

 

The Company evaluates its performance based on FFO,  Adjusted Funds From Operations (AFFO),  Net Income and Earnings Per Share (EPS) and believes each is an important measure.  A reconciliation of Net Income to FFO and AFFO, which are non-GAAP financial measures, is provided on page 3 of this press release.

 

 

 

 

 

 

 

 

 

 

 

 

(in 000's except per share data)

 

Three Months Ended March 31,

 

 

 

 

 

 

 

 

 

Increase

 

 

   

2016

   

2015

   

(Decrease)

   

 

 

 

 

 

 

 

 

 

 

 

Net Income

 

$
2,579

 

$
12,533

 

$
(9,954)

 

 

 

 

 

 

 

 

 

 

 

 

FFO

 

$
26,037

 

$
25,672

 

$
365

 

Per Share Data:

 

 

 

 

 

 

 

 

 

 

EPS

 

$
0.03

 

$
0.13

 

$
(0.10)

 

FFO

 

$
0.26

 

$
0.26

 

$

 —

 

AFFO

 

$
0.21

 

$
0.21

 

$

 —

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares (diluted)

 

 
100,187

 

 
100,187

 

 

 —

 

 

Comparing results for the first quarter of 2016 to the same period in 2015, FFO increased $0.4 million to $26.0 million and was $0.26 per share for the first quarter of 2016 and the first quarter of 2015.  The FFO increase was primarily from higher property income as a result of leasing and the acquisition of a property on April 8, 2015, which was partially offset by the impact of asset sales and loan repayments that occurred in the last twelve months.  Net Income and EPS were $2.6 million and $0.03 per share for the first quarter of 2016, respectively, compared to Net Income of $12.5 million and EPS of $0.13 for the first quarter of 2015.  Included in Net Income for the first quarter of 2015, were gains on sales of properties of $10.5 million or $0.10 per share.  We did not sell any properties in the first quarter of 2016.

 

George J. Carter, President and CEO, commented as follows:

 

“For the first quarter of 2016, FSP’s funds from operations, or FFO, totaled approximately $26.0 million or $0.26 per share.   These results are within our guidance range for the first quarter of 2016. Dividend distributions paid/declared for first quarter 2016 totaled approximately $19.0 million or $0.19 per share.  Our initial FFO guidance for full year 2016 is being maintained and is estimated to be in the range of $1.01 to $1.07 per diluted share, while for the second quarter of 2016, we estimate FFO to be in the range of $0.24 to $0.26 per diluted share.

 

 

 

-2-

Our directly owned real estate portfolio of 35 properties totaling approximately 9.3 million square feet was approximately 90.2% leased as of March 31, 2016.  We continued active leasing in the first quarter, much of it renewals ahead of future lease expirations.  We anticipate continued significant leasing activity within the portfolio during 2016.

 

Subsequent to the end of the first quarter, on April 5, 2016, we sold our Maryland Heights, Missouri property, known as Lakeside Crossing I for $20.2 million.  FSP will record a gain on sale for this property disposition of approximately $4.1 million in the second quarter of 2016. Property acquisition efforts are currently very active and are focused on CBD and urban infill office buildings located within our five core markets.  We anticipate making one or more property acquisitions during 2016.  Regarding our redevelopment efforts at 801 Marquette Avenue in downtown Minneapolis, Minnesota, after extensive costing analysis with our potential development partners and outside professionals, we have decided to redevelop the existing building ourselves, rather than raze it and build a new, mixed use tower with outside development partners.  As previously announced, Ryan Companies US, Inc. will be the development manager and design/builder, Perkins+Will will lead the architectural design work and CBRE Group, Inc. will be the exclusive leasing agent.  We are fully engaged with our outside professionals on this exciting redevelopment and will continue to provide updates as they become available.  

 

As we continue 2016, our property portfolio is operating smoothly with existing and known upcoming vacancies actively being marketed to multiple potential tenants.  We look forward with anticipation to 2016 and beyond.”

 

Dividend Update

 

On April 8, 2016, the Company announced that its Board of Directors declared a regular quarterly dividend for the three months ended March 31, 2016 of $0.19 per share of common stock that will be paid on May 12, 2016 to stockholders of record on April 22, 2016.         

 

FFO Guidance

 

We are maintaining our full year FFO guidance for 2016 to be in  the range of $1.01 to $1.07 per diluted share and,  for the second quarter of 2016,  we estimate FFO to be in the range of $0.24 to $0.26 per diluted share.  This guidance (a) excludes the impact of future acquisitions, developments, dispositions, debt financings or repayments or other capital market transactions; (b) reflects estimates from our ongoing portfolio of properties, other real estate investments and G&A expenses; and (c) reflects our current expectations of economic conditions.  We will update 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.     

 

 

-3-

Real Estate Update

 

Supplementary schedules provide property information for the Company’s owned real estate portfolio and for two non-consolidated REITs in which the Company holds preferred stock interests as of March 31, 2016.  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.franklinstreetproperties.com. 

 

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 H.  Management believes FFO and AFFO are used broadly throughout the real estate investment trust (REIT) industry as measurements of performance.   Management also believes that FFO and AFFO represent the most accurate measures of activity and are the basis for distributions paid to equity holders.  The Company has included the NAREIT FFO definition 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

 

 

 

March 31,

 

(In thousands, except per share amounts)

    

2016

    

2015

    

 

 

 

 

 

 

 

 

Net income

 

$
2,579

 

$
12,533

 

Gain on sale of assets, less applicable income tax

 

 

 —

 

 
(10,462)

 

GAAP loss from non-consolidated REITs

 

 
286

 

 
322

 

FFO from non-consolidated REITs

 

 
645

 

 
601

 

Depreciation & amortization

 

 
22,527

 

 
22,678

 

NAREIT FFO

 

 
26,037

 

 
25,672

 

Acquisition costs of new properties

 

 

 —

 

 

 —

 

Funds From Operations (FFO)

 

$
26,037

 

$
25,672

 

 

 

 

 

 

 

 

 

Funds From Operations (FFO)

 

$
26,037

 

$
25,672

 

Reverse FFO from non-consolidated REITs

 

 
(645)

 

 
(601)

 

Distributions from non-consolidated REITs

 

 
27

 

 
27

 

Amortization of deferred financing costs

 

 
517

 

 
517

 

Straight-line rent

 

 
(1,275)

 

 
(69)

 

Tenant improvements

 

 
(1,929)

 

 
(2,936)

 

Leasing commissions

 

 
(1,613)

 

 
(830)

 

Non-investment capex

 

 
(438)

 

 
(643)

 

Adjusted Funds From Operations (AFFO)

 

$
20,681

 

$
21,137

 

 

 

 

 

 

 

 

 

Per Share Data

 

 

 

 

 

 

 

EPS

 

$
0.03

 

$
0.13

 

FFO

 

$
0.26

 

$
0.26

 

AFFO

 

$
0.21

 

$
0.21

 

 

 

 

 

 

 

 

 

Weighted average shares (basic and diluted)

 

 
100,187

 

 
100,187

 

 

 

 

-4-

Today’s news release, along with other news about Franklin Street Properties Corp., is available on the Internet at www.franklinstreetproperties.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 April 27, 2016 at 10:00 a.m. (ET) to discuss the first quarter 2016 results. To access the call, please dial 1-877-507-4376. Internationally, the call may be accessed by dialing 1-412-317-6014.  To listen via live audio webcast, please visit the Webcasts & Presentations section in the Investor Relations section of the Company's website (www.franklinstreetproperties.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 investing in institutional-quality office properties in the U.S.  FSP’s strategy is to invest in select urban infill and central business district (CBD) properties, with primary emphasis on our top five markets of Atlanta, Dallas, Denver, Houston, and Minneapolis.  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.franklinstreetproperties.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 based on current judgments and current knowledge of management, which 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, economic conditions in the United States, 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, 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, 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, 2015, 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, 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. 

 

 

-5-

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

Definition of Funds From Operations (FFO)

H

 

 

-6-

Franklin Street Properties Corp. Financial Results

Supplementary Schedule A

Condensed Consolidated Income (Loss) Statements

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

For the

 

 

 

Three Months Ended

 

 

 

March 31,

 

(in thousands, except per share amounts)

    

2016

    

2015

 

 

 

 

 

 

 

 

 

Revenue:

 

 

 

 

 

 

 

Rental

 

$
58,360

 

$
59,013

 

Related party revenue:

 

 

 

 

 

 

 

Management fees and interest income from loans

 

 
1,433

 

 
1,473

 

Other

 

 
20

 

 
21

 

Total revenue

 

 
59,813

 

 
60,507

 

 

 

 

 

 

 

 

 

Expenses:

 

 

 

 

 

 

 

Real estate operating expenses

 

 
15,292

 

 
15,356

 

Real estate taxes and insurance

 

 
9,150

 

 
10,048

 

Depreciation and amortization

 

 
22,445

 

 
22,672

 

Selling, general and administrative

 

 
3,530

 

 
3,691

 

Interest

 

 
6,433

 

 
6,187

 

Total expenses

 

 
56,850

 

 
57,954

 

 

 

 

 

 

 

 

 

Income before interest income, equity in losses of  non-consolidated REITs and taxes

 

 
2,963

 

 
2,553

 

Interest income

 

 

 —

 

 
1

 

Equity in losses of non-consolidated REITs

 

 
(286)

 

 
(322)

 

Gain on sale of properties, less applicable income tax

 

 

 —

 

 
10,462

 

 

 

 

 

 

 

 

 

Income before taxes on income

 

 
2,677

 

 
12,694

 

Taxes on income

 

 
98

 

 
161

 

Net income

 

$
2,579

 

$
12,533

 

 

 

 

 

 

 

 

 

Weighted average number of shares outstanding,  basic and diluted

 

 
100,187

 

 
100,187

 

 

 

 

 

 

 

 

 

Net income per share, basic and diluted

 

$
0.03

 

$
0.13

 

 

 

-7-

Franklin Street Properties Corp. Financial Results

Supplementary Schedule B

Condensed Consolidated Balance Sheets

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

March 31,

 

December 31,

 

(in thousands, except share and par value amounts)

    

2016

    

2015

 

Assets:

 

 

 

 

 

 

 

Real estate assets:

 

 

 

 

 

 

 

Land

 

$
168,120

 

$
170,021

 

Buildings and improvements

 

 
1,625,819

 

 
1,637,066

 

Fixtures and equipment

 

 
2,649

 

 
2,528

 

 

 

 
1,796,588

 

 
1,809,615

 

Less accumulated depreciation

 

 
309,307

 

 
299,991

 

Real estate assets, net

 

 
1,487,281

 

 
1,509,624

 

Acquired real estate leases, less accumulated amortization of $117,134 and $112,844, respectively

 

 
99,102

 

 
108,046

 

Investment in non-consolidated REITs

 

 
76,707

 

 
77,019

 

Asset held for sale

 

 
15,921

 

 

 —

 

Cash and cash equivalents

 

 
14,316

 

 
18,163

 

Restricted cash

 

 
10

 

 
23

 

Tenant rent receivables, less allowance for doubtful accounts of $130 and $130, respectively

 

 
3,691

 

 
2,898

 

Straight-line rent receivable, less allowance for doubtful accounts of $50 and $50, respectively

 

 
49,696

 

 
48,502

 

Prepaid expenses and other assets

 

 
5,943

 

 
5,484

 

Related party mortgage loan receivables

 

 
79,575

 

 
118,641

 

Other assets: derivative asset

 

 

 —

 

 
1,132

 

Office computers and furniture, net of accumulated depreciation of $1,372 and $1,333, respectively

 

 
438

 

 
484

 

Deferred leasing commissions, net of accumulated amortization of $21,035 and $20,002, respectively

 

 
28,705

 

 
28,999

 

Total assets

 

$
1,861,385

 

$
1,919,015

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity:

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

Bank note payable

 

$
265,000

 

$
290,000

 

Term loans payable, less unamortized financing costs of $2,120 and $2,353, respectively

 

 
617,880

 

 
617,647

 

Accounts payable and accrued expenses

 

 
37,791

 

 
49,489

 

Accrued compensation

 

 
1,274

 

 
3,726

 

Tenant security deposits

 

 
4,433

 

 
4,829

 

Other liabilities: derivative liability

 

 
13,226

 

 
8,243

 

Acquired unfavorable real estate leases, less accumulated amortization of $9,822 and $9,368, respectively

 

 
8,697

 

 
9,425

 

Total liabilities

 

 
948,301

 

 
983,359

 

 

 

 

 

 

 

 

 

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, 100,187,405 and 100,187,405 shares issued and outstanding, respectively

 

 
10

 

 
10

 

Additional paid-in capital

 

 
1,273,556

 

 
1,273,556

 

Accumulated other comprehensive loss

 

 
(13,226)

 

 
(7,111)

 

Accumulated distributions in excess of accumulated earnings

 

 
(347,256)

 

 
(330,799)

 

Total stockholders’ equity

 

 
913,084

 

 
935,656

 

Total liabilities and stockholders’ equity

 

$
1,861,385

 

$
1,919,015

 

 

 

-8-

Franklin Street Properties Corp. Financial Results

Supplementary Schedule C

Condensed Consolidated Statements of Cash Flows

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

For the

 

 

 

Three Months Ended

 

 

 

March 31,

 

(in thousands)

    

2016

    

2015

 

Cash flows from operating activities:

 

 

 

 

 

 

 

Net income

 

$
2,579

 

$
12,533

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

Depreciation and amortization expense

 

 
22,962

 

 
23,189

 

Amortization of above market lease

 

 
81

 

 
6

 

Equity in losses of non-consolidated REITs

 

 
286

 

 
322

 

Gain on sale of properties, less applicable income tax

 

 

 —

 

 
(10,462)

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

Restricted cash

 

 
13

 

 
686

 

Tenant rent receivables

 

 
(793)

 

 
146

 

Straight-line rents

 

 
(1,275)

 

 
(69)

 

Lease acquisition costs

 

 
(199)

 

 
(3)

 

Prepaid expenses and other assets

 

 
(791)

 

 
283

 

Accounts payable, accrued expenses and other items

 

 
(10,374)

 

 
(7,706)

 

Accrued compensation

 

 
(2,452)

 

 
(2,517)

 

Tenant security deposits

 

 
(396)

 

 
(230)

 

Payment of deferred leasing commissions

 

 
(1,825)

 

 
(1,116)

 

Net cash provided by operating activities

 

 
7,816

 

 
15,062

 

Cash flows from investing activities:

 

 

 

 

 

 

 

Property improvements, fixtures and equipment

 

 
(6,699)

 

 
(4,298)

 

Office computers and furniture

 

 
(21)

 

 

 —

 

Distributions in excess of earnings from non-consolidated REITs

 

 
27

 

 
27

 

Repayment of related party mortgage loan receivable

 

 
39,066

 

 

 —

 

Proceeds received on sales of real estate assets

 

 

 —

 

 
47,671

 

Changes in deposits on real estate assets

 

 

 —

 

 
(4,000)

 

Net cash provided by investing activities

 

 
32,373

 

 
39,400

 

Cash flows from financing activities:

 

 

 

 

 

 

 

Distributions to stockholders

 

 
(19,036)

 

 
(19,036)

 

Borrowings under bank note payable

 

 
15,000

 

 
20,000

 

Repayments of bank note payable

 

 
(40,000)

 

 
(48,000)

 

Net cash used in financing activities

 

 
(44,036)

 

 
(47,036)

 

Net increase (decrease) in cash and cash equivalents

 

 
(3,847)

 

 
7,426

 

Cash and cash equivalents, beginning of year

 

 
18,163

 

 
7,519

 

Cash and cash equivalents, end of period

 

$
14,316

 

$
14,945

 

 

-9-

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

 

2016

 
587,494

 
6.3%

 

2017

 
1,012,296

 
10.9%

 

2018

 
1,113,118

 
11.9%

 

2019

 
1,314,261

 
14.1%

 

2020

 
851,253

 
9.1%

 

Thereafter (2)

 
4,446,827

 
47.7%

 

 

 
9,325,249

 
100.0%

 

(1)

Percentages are determined based upon total square footage.        

(2)

Includes 917,040 square feet of current vacancies.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(dollars & square feet in 000's)

 

As of March 31, 2016

 

 

 

# of

 

 

 

 

% of

 

Square

 

% of

 

State

    

Properties

    

Investment

    

Portfolio

    

Feet

    

Portfolio

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Texas

 
9

 

$
363,725

 
24.2%

 
2,418

 
25.9%

 

Colorado

 
5

 

 
428,338

 
28.5%

 
2,010

 
21.6%

 

Georgia

 
4

 

 
286,124

 
19.1%

 
1,838

 
19.7%

 

Virginia

 
4

 

 
92,516

 
6.2%

 
685

 
7.3%

 

Minnesota (a)

 
1

 

 
26,544

 
1.8%

 
306

 
3.3%

 

Missouri (b)

 
3

 

 
61,734

 
4.1%

 
478

 
5.1%

 

North Carolina

 
2

 

 
54,805

 
3.7%

 
322

 
3.5%

 

Illinois

 
2

 

 
44,002

 
2.9%

 
372

 
4.0%

 

Maryland

 
1

 

 
50,797

 
3.4%

 
325

 
3.4%

 

Florida

 
1

 

 
41,545

 
2.8%

 
213

 
2.3%

 

Indiana

 
1

 

 
31,342

 
2.1%

 
205

 
2.2%

 

California

 
1

 

 
3,794

 
0.3%

 
36

 
0.4%

 

Washington

 
1

 

 
13,667

 
0.9%

 
117

 
1.3%

 

Total

 
35

 

$
1,498,933

 
100.0%

 
9,325

 
100.0%

 

 

(a)

Excludes approximately $4,269, which is our investment in a property being redeveloped.

(b)

Includes asset held for sale of $15,921, which was sold on April 5, 2016.

 

-10-

Franklin Street Properties Corp. Earnings Release

Supplementary Schedule E

Portfolio and Other Supplementary Information

(Unaudited & Approximated)

 

Recurring Capital Expenditures

Owned Portfolio

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

 

Year ended

   

    

31-Mar-16

    

31-Mar-15

    

30-Jun-15

    

30-Sep-15

    

31-Dec-15

    

31-Dec-15

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tenant improvements

 

$
1,929

 

$
2,936

 

$
3,420

 

$
1,794

 

$
3,788

 

$
11,938

Deferred leasing costs

 

 
1,613

 

 
830

 

 
1,539

 

 
1,490

 

 
3,952

 

 
7,811

Non-investment capex

 

 
438

 

 
643

 

 
1,411

 

 
1,090

 

 
1,162

 

 
4,306

Total Capital Expenditures

 

$
3,980

 

$
4,409

 

$
6,370

 

$
4,374

 

$
8,902

 

$
24,055

 

 

 

 

 

 

 

 

 

Square foot & leased percentages

 

March 31,

 

December 31,

 

 

    

2016

    

2015

 

Owned portfolio of commercial real estate

 

 

 

 

 

Number of properties (a)

 
35

 
36

 

Square feet

 
9,325,249

 
9,494,953

 

Leased percentage

 
90.2%

 
91.6%

 

 

 

 

 

 

 

Investments in non-consolidated REITs

 

 

 

 

 

Number of properties

 
2

 
2

 

Square feet

 
1,396,071

 
1,396,071

 

Leased percentage

 
73.9%

 
73.5%

 

 

 

 

 

 

 

Single Asset REITs (SARs) managed

 

 

 

 

 

Number of properties

 
6

 
7

 

Square feet

 
1,191,135

 
1,487,026

 

Leased percentage

 
75.8%

 
77.0%

 

 

 

 

 

 

 

Total owned, investments & managed properties

 

 

 

 

 

Number of properties

 
43

 
45

 

Square feet

 
11,912,455

 
12,378,050

 

Leased percentage

 
86.8%

 
87.8%

 

(a)

Excludes property in redevelopment in 2016.

 

The following table shows property information for our investments in non-consolidated REITs:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Square

 

% Leased

 

% Interest

 

Single Asset REIT name

    

City

    

State

    

Feet

    

31-Mar-16

    

Held

 

FSP 303 East Wacker Drive Corp.

 

Chicago

 

IL

 
861,000

 
65.7%

 
43.7%

 

FSP Grand Boulevard Corp.

 

Kansas City

 

MO

 
535,071

 
87.2%

 
27.0%

 

 

 

 

 

 

 
1,396,071

 
73.9%

 

 

 

 

-11-

Franklin Street Properties Corp. Earnings Release

Supplementary Schedule F

Percentage of Leased Space

(Unaudited & Estimated) 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fourth

 

 

 

First

 

 

 

 

 

 

 

 

 

% Leased (1)

 

Quarter

 

% Leased (1)

 

Quarter

 

 

 

 

 

 

 

 

 

as of

 

Average %

 

as of

 

Average %

 

 

    

Property Name

    

Location

    

Square Feet

    

31-Dec-15

    

Leased (2)

    

31-Mar-16

    

Leased (2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1

 

HILLVIEW CENTER

 

Milpitas, CA

 
36,288

 
100.0%

 
100.0%

 
100.0%

 
100.0%

 

2

 

FOREST PARK

 

Charlotte, NC

 
62,212

 
100.0%

 
100.0%

 
100.0%

 
100.0%

 

3

 

MEADOW POINT

 

Chantilly, VA

 
138,537

 
100.0%

 
100.0%

 
100.0%

 
100.0%

 

4

 

TIMBERLAKE

 

Chesterfield, MO

 
234,023

 
95.4%

 
94.3%

 
95.4%

 
95.4%

 

5

 

FEDERAL WAY

 

Federal Way, WA

 
117,010

 
66.8%

 
64.9%

 
61.6%

 
65.1%

 

6

 

NORTHWEST POINT

 

Elk Grove Village, IL

 
176,848

 
100.0%

 
100.0%

 
100.0%

 
100.0%

 

7

 

TIMBERLAKE EAST

 

Chesterfield, MO

 
116,197

 
96.2%

 
61.2%

 
96.2%

 
96.2%

 

8

 

PARK TEN

 

Houston, TX

 
157,460

 
63.1%

 
63.1%

 
63.1%

 
63.1%

 

9

 

ADDISON

 

Addison, TX

 
290,041

 
93.4%

 
93.4%

 
93.4%

 
93.4%

 

10

 

COLLINS CROSSING

 

Richardson, TX

 
300,887

 
100.0%

 
100.0%

 
100.0%

 
100.0%

 

11

 

GREENWOOD PLAZA

 

Englewood, CO

 
196,236

 
100.0%

 
100.0%

 
100.0%

 
100.0%

 

12

 

RIVER CROSSING

 

Indianapolis, IN

 
205,059

 
91.1%

 
91.1%

 
91.1%

 
91.1%

 

13

 

LIBERTY PLAZA

 

Addison, TX

 
218,934

 
81.8%

 
79.2%

 
80.9%

 
81.5%

 

14

 

INNSBROOK

 

Glen Allen, VA

 
298,456

 
100.0%

 
100.0%

 
100.0%

 
100.0%

 

15

 

380 INTERLOCKEN

 

Broomfield, CO

 
240,185

 
97.1%

 
97.1%

 
97.1%

 
97.1%

 

16

 

BLUE LAGOON

 

Miami, FL

 
212,619

 
100.0%

 
100.0%

 
100.0%

 
100.0%

 

17

 

ELDRIDGE GREEN

 

Houston, TX

 
248,399

 
100.0%

 
100.0%

 
100.0%

 
100.0%

 

18

 

ONE OVERTON PARK

 

Atlanta, GA

 
387,267

 
85.0%

 
85.0%

 
85.0%

 
85.0%

 

19

 

390 INTERLOCKEN

 

Broomfield, CO

 
241,516

 
84.6%

 
85.1%

 
84.6%

 
84.6%

 

20

 

EAST BALTIMORE

 

Baltimore, MD

 
325,445

 
85.4%

 
85.4%

 
83.6%

 
84.8%

 

21

 

PARK TEN PHASE II

 

Houston, TX

 
156,746

 
100.0%

 
100.0%

 
100.0%

 
100.0%

 

22

 

LAKESIDE CROSSING I

 

Maryland Heights, MO

 
127,778

 
100.0%

 
100.0%

 
100.0%

 
100.0%

 

23

 

LOUDOUN TECH

 

Dulles, VA

 
136,658

 
92.0%

 
92.0%

 
92.0%

 
92.0%

 

24

 

4807 STONECROFT

 

Chantilly, VA

 
111,469

 
100.0%

 
100.0%

 
100.0%

 
100.0%

 

25

 

121 SOUTH EIGHTH ST

 

Minneapolis, MN

 
305,990

 
88.3%

 
88.3%

 
56.2%

 
56.2%

 

 

 

801 MARQUETTE AVE (3)

 

Minneapolis, MN

 

 —

 
97.2%

 
97.2%

 
(3)

 
(3)

 

26

 

EMPEROR BOULEVARD

 

Durham, NC

 
259,531

 
100.0%

 
100.0%

 
100.0%

 
100.0%

 

27

 

LEGACY TENNYSON CTR

 

Plano, TX

 
202,600

 
100.0%

 
100.0%

 
100.0%

 
100.0%

 

28

 

ONE LEGACY

 

Plano, TX

 
214,110

 
100.0%

 
100.0%

 
100.0%

 
100.0%

 

29

 

909 DAVIS

 

Evanston, IL

 
195,245

 
100.0%

 
100.0%

 
88.8%

 
88.8%

 

30

 

ONE RAVINIA DRIVE

 

Atlanta, GA

 
386,603

 
94.8%

 
94.8%

 
94.8%

 
94.8%

 

31

 

TWO RAVINIA

 

Atlanta, GA

 
442,130

 
80.8%

 
78.6%

 
84.0%

 
82.2%

 

32

 

WESTCHASE I & II

 

Houston, TX

 
629,025

 
87.0%

 
87.8%

 
87.0%

 
87.0%

 

33

 

1999 BROADWAY

 

Denver, CO

 
676,379

 
82.7%

 
82.7%

 
83.0%

 
82.8%

 

34

 

999 PEACHTREE

 

Atlanta, GA

 
621,946

 
95.0%

 
95.2%

 
95.3%

 
95.1%

 

35

 

1001 17th STREET

 

Denver, CO

 
655,420

 
88.6%

 
87.6%

 
87.6%

 
87.9%

 

 

 

TOTAL WEIGHTED AVERAGE

 

 

 
9,325,249

 
91.6%

 
90.8%

 
90.2%

 
90.2%

 

(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 3 months during the quarter.

(3)

Property is being redeveloped in 2016.

 

-12-

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 March 31, 2016

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

% of

 

 

    

Tenant

    

Sq Ft

    

Portfolio

 

1

 

Quintiles Transnational Corp

 
259,531

 
3.1%

 

2

 

CITGO Petroleum Corporation

 
248,399

 
3.0%

 

3

 

Newfield Exploration Company

 
234,495

 
2.8%

 

4

 

US Government

 
223,433

 
2.7%

 

5

 

Sutherland Asbill Brennan LLP

 
222,422

 
2.6%

 

6

 

Burger King Corporation

 
212,619

 
2.5%

 

7

 

Denbury Onshore, LLC

 
202,600

 
2.4%

 

8

 

SunTrust Bank

 
182,888

 
2.2%

 

9

 

Centene Management Company, LLC

 
179,637

 
2.1%

 

10

 

Citicorp Credit Services, Inc

 
176,848

 
2.1%

 

11

 

T-Mobile South, LLC dba T-Mobile

 
151,792

 
1.8%

 

12

 

Petrobras America, Inc.

 
144,813

 
1.7%

 

13

 

Murphy Exploration & Production Company

 
144,677

 
1.7%

 

14

 

Argo Data Resource Corporation

 
140,246

 
1.7%

 

15

 

Houghton Mifflin Harcourt Publishing Company

 
128,226

 
1.5%

 

16

 

Monsanto Company

 
127,778

 
1.5%

 

17

 

Federal National Mortgage Association

 
123,144

 
1.5%

 

18

 

Vail Corp d/b/a Vail Resorts

 
122,232

 
1.5%

 

19

 

Kaiser Foundation Health Plan

 
120,979

 
1.4%

 

20

 

Giesecke & Devrient America

 
112,110

 
1.3%

 

 

 

Total

 
3,458,869

 
41.1%

 

 

 

-13-

Franklin Street Properties Corp. Earnings Release

Supplementary Schedule H

Definition of Funds From Operations (“FFO”) and

Adjusted Funds From Operations (“AFFO”)

 

Funds From Operations (“FFO”)

 

The Company evaluates performance based on Funds From Operations, which we refer to as FFO.  The Company defines FFO as net income (computed in accordance with GAAP), excluding gains (or losses) from sales of property and acquisition costs of newly acquired properties 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 (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 NAREIT, may define this term in a different manner.  We have included the NAREIT FFO definition in our 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 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 the sum of (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 deferred financing costs, (5) 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 (determined in accordance with GAAP), 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 and cash flows from operating, investing and financing activities in the consolidated financial statements.