EX-99.2 3 ex-99d2.htm EX-99.2 fsp_Ex99_2

Exhibit 99.2 

 

 

 

Picture 47

Picture 43

Picture 44

Franklin Street Properties

Supplemental Operating
and Financial Data

Third Quarter 2018

 

 

 

Picture 48

Franklin Street Properties Corp.

401 Edgewater Place ● Wakefield, MA 01880

(781) 557-1300 ● www.fspreit.com

Picture 49

 


 

Picture 22

Table of Contents

 

 

 

 

 

 

 

 

 

Page

 

 

Page

 

 

 

 

 

Company Information

3

 

Tenant Analysis and Leasing Activity

 

 

 

 

Tenants by Industry

18

Key Financial Data

 

 

20 Largest Tenants with Annualized Rent and Remaining Term

19

Financial Highlights

4

 

Leasing Activity

20

Income Statements

5

 

Lease Expirations by Square Feet

21

Balance Sheets

6

 

Lease Expirations with Annualized Rent per Square Foot

22

Cash Flow Statements

7

 

Capital Expenditures

23

Property Net Operating Income (NOI)

8

 

 

 

 

 

 

Transaction Activity

24

Reconciliation

 

 

 

 

FFO & AFFO

9

 

Loan Portfolio of Secured Real Estate

25

EBITDA

10

 

 

 

Property NOI

11

 

Net Asset Value Components

26

 

 

 

 

 

Debt Summary

12

 

Appendix: Definitions of Non-GAAP Measures

 

 

 

 

FFO

27

Capital Analysis

13

 

EBITDA and NOI

28

 

 

 

AFFO

29

Owned and Managed Portfolio Overview

14-17

 

 

 

 

 

 

 

 

All financial information contained in this supplemental information package is unaudited.  In addition, certain statements contained in this supplemental information package may be deemed to be forward-looking statements within the meaning of the federal securities laws.  Although FSP believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that its expectations will be achieved.  Factors that could cause actual results to differ materially from FSP’s current expectations include general economic conditions, uncertainties relating to fiscal policy, changes in government regulations, regulatory uncertainty, geopolitical events, local real estate conditions, the performance of properties that FSP has acquired or may acquire, the timely lease-up of properties and other risks, which are detailed from time to time in FSP’s reports filed with the Securities and Exchange Commission.  FSP assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.

 

Picture 7

 

 

 

 

 

801 Marquette

 

 

September 30, 2018| Page 2


 

 

 

Picture 27

Company Information

 

 

Overview

 

 

 

 

Snapshot (as of September 30, 2018)

Franklin Street Properties Corp. (“FSP”, “we”, “our” or the “Company”) (NYSE American: FSP) is 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 five core 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. FSP’s real estate operations include property acquisitions and dispositions, short-term financing, leasing, development and asset management.

 

 

 

 

Corporate Headquarters

Wakefield, MA

 

 

 

 

Fiscal Year-End

31-Dec

 

 

 

 

Total Properties

34

 

 

 

 

Total Square Feet

9.8 Million

 

 

 

 

Trading Symbol

FSP

 

 

 

 

Exchange

NYSE American

 

 

 

 

Common Shares Outstanding

107,231,155

 

 

 

 

Quarterly Dividend

$0.09

Our Business

 

 

 

 

Dividend Yield

4.5%

As of September 30, 2018, the Company owned and operated a portfolio of real estate consisting of 34 properties, one property that has been redeveloped and is classified as non-operating and has three managed Sponsored REITs, From time-to-time, the Company may acquire, develop or redevelop real estate, make additional secured loans or acquire one of its Sponsored REITs. The Company may also pursue, on a selective basis, the sale of its properties in order to take advantage of the value creation and demand for its properties, or for geographic or property specific reasons.

 

 

 

 

Total Market Capitalization

$1.8 Billion*

 

 

 

 

Insider Holdings

4.0%

 

 

 

 

Picture 20

 

 

 

 

 

 

Management Team

 

 

 

 

 

 

 

 

 

 

 

George J. Carter

Jeffrey B. Carter

 

 

 

 

Chief Executive Officer and

President and Chief Investment

 

 

 

 

Chairman of the Board

Officer

 

 

 

 

 

 

 

 

 

 

John G. Demeritt

Scott H. Carter

 

 

 

 

Executive Vice President, Chief

Executive Vice President, General

 

 

 

 

Financial Officer and Treasurer

Counsel and Secretary

 

 

 

 

 

 

 

 

 

 

John F. Donahue

Eriel Anchondo

 

 

 

 

Executive Vice President

Executive Vice President and

Chief Operating Officer

 

 

 

 

Greenwood Plaza, Englewood, CO

 

 

 

 

 

 

 

Inquiries

 

 

 

 

 

 

Inquiries should be directed to:  Georgia Touma

 

 

 

 

 

 

877.686.9496 or InvestorRelations@fspreit.com

 

* Total Market Capitalization is the closing share price multiplied by the number of shares outstanding plus total debt   

  outstanding. 

 

 

 

 

 

 

 

 

September 30, 2018| Page 3


 

 

 

Picture 9

Summary of Financial Highlights

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(in thousands except per share amounts, SF & number of properties)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

30-Sep-18

    

30-Jun-18

    

31-Mar-18

    

31-Dec-17

    

30-Sep-17

 

Income Items:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rental revenue

 

$

67,436

 

 

65,409

 

 

65,628

 

$

65,555

 

$

67,339

 

Total revenue

 

 

68,705

 

 

66,694

 

 

66,893

 

 

66,835

 

 

68,626

 

Adjusted EBITDA*

 

 

35,636

 

 

34,270

 

 

34,943

 

 

34,033

 

 

35,354

 

Equity in income (loss) of non-consolidated REITs

 

 

7,180

 

 

(282)

 

 

(105)

 

 

(2,885)

 

 

(121)

 

Net income (loss)

 

 

9,608

 

 

665

 

 

1,425

 

 

(4,932)

 

 

1,903

 

FFO*

 

 

26,158

 

 

25,393

 

 

26,364

 

 

26,347

 

 

27,991

 

AFFO*

 

 

13,024

 

 

9,658

 

 

16,930

 

 

13,044

 

 

17,110

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Per Share Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EPS

 

$

0.09

 

 

0.01

 

 

0.01

 

$

(0.05)

 

$

0.02

 

FFO*

 

$

0.24

 

 

0.24

 

 

0.25

 

$

0.25

 

$

0.26

 

AFFO*

 

$

0.12

 

 

0.09

 

 

0.16

 

$

0.12

 

$

0.16

 

Weighted Average Shares (diluted)

 

 

107,231

 

 

107,231

 

 

107,231

 

 

107,231

 

 

107,231

 

Closing share price

 

$

7.99

 

 

8.56

 

 

8.41

 

$

10.74

 

$

10.62

 

Dividend declared

 

$

0.09

 

 

0.09

 

 

0.09

 

$

0.19

 

$

0.19

 

AFFO Payout Ratio:

 

 

74%

 

 

100%

 

 

57%

 

 

156%

 

 

119%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance Sheet Items:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real estate, net

 

$

1,628,036

 

 

1,627,498

 

 

1,627,941

 

$

1,632,692

 

$

1,635,706

 

Other assets, net

 

 

280,523

 

 

352,029

 

 

358,254

 

 

357,820

 

 

395,979

 

Total assets, net

 

 

1,908,559

 

 

1,979,527

 

 

1,986,195

 

 

1,990,512

 

 

2,031,685

 

Total liabilities, net

 

 

1,055,146

 

 

1,127,140

 

 

1,127,277

 

 

1,119,220

 

 

1,142,299

 

Shareholders' equity

 

 

853,413

 

 

852,387

 

 

858,918

 

 

871,292

 

 

889,386

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Market Capitalization and Debt:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Market Capitalization (a)

 

$

1,843,777

 

 

1,985,899

 

 

1,969,814

 

$

2,199,663

 

$

2,208,795

 

Total debt outstanding (excluding unamortized financing costs)

 

 

987,000

 

 

1,068,000

 

 

1,068,000

 

 

1,048,000

 

 

1,070,000

 

Debt to Total Market Capitalization

 

 

53.5%

 

 

53.8%

 

 

54.2%

 

 

47.6%

 

 

48.4%

 

Net Debt to Adjusted EBITDA*

 

 

6.9

 

 

7.7

 

 

7.5

 

 

7.6

 

 

7.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Owned Portfolio Leasing Statistics (b):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Owned portfolio assets

 

 

34

 

 

34

 

 

34

 

 

34

 

 

35

 

Portfolio total SF

 

 

9,760,699

 

 

9,760,699

 

 

9,760,657

 

 

9,761,984

 

 

10,085,889

 

Portfolio % leased

 

 

90.5%

 

 

89.0%

 

 

88.5%

 

 

89.7%

 

 

88.7%

 


(a)

Total Market Capitalization is the closing share price multiplied by the number of shares outstanding plus total debt outstanding on that date.

(b)

For periods in 2018 and 2017, excludes one property that was redeveloped and is classified as non-operating, which is located in Minneapolis, Minnesota.

*See pages 9 & 10 for reconciliations of Net income or loss to FFO, AFFO and Adjusted EBITDA, respectively, and the Appendix for Definitions of these Non-GAAP Measures beginning on page 27.

 

 

 

September 30, 2018| Page 4


 

Picture 42

Condensed Consolidated Income Statements

($ in thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the

 

 

Three Months Ended

 

Ended

 

 

For the Three Months Ended

 

Year Ended

 

 

31-Mar-18

 

30-Jun-18

 

30-Sep-18

 

30-Sep-18

 

 

31-Mar-17

 

30-Jun-17

 

30-Sep-17

 

31-Dec-17

 

31-Dec-17

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rental

  

$

65,628

  

$

65,409

  

$

67,436

    

$

198,473

  

  

$

67,376

  

$

66,995

  

$

67,339

  

$

65,555

  

$

267,265

Related party revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Management fees and interest income from loans

 

 

1,256

 

 

1,276

 

 

1,261

 

 

3,793

 

 

 

1,370

 

 

1,366

 

 

1,278

 

 

1,271

 

 

5,285

Other

 

 

 9

 

 

 9

 

 

 8

 

 

26

 

 

 

10

 

 

10

 

 

 9

 

 

 9

 

 

38

Total revenue

 

 

66,893

 

 

66,694

 

 

68,705

 

 

202,292

 

 

 

68,756

 

 

68,371

 

 

68,626

 

 

66,835

 

 

272,588

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real estate operating expenses

 

 

17,151

 

 

16,954

 

 

17,946

 

 

52,051

 

 

 

17,308

 

 

17,286

 

 

17,898

 

 

18,720

 

 

71,212

Real estate taxes and insurance

 

 

11,177

 

 

12,292

 

 

11,651

 

 

35,120

 

 

 

12,403

 

 

11,595

 

 

11,882

 

 

9,961

 

 

45,841

Depreciation and amortization

 

 

24,035

 

 

23,591

 

 

23,277

 

 

70,903

 

 

 

25,332

 

 

25,279

 

 

24,988

 

 

25,659

 

 

101,258

General and administrative

 

 

3,432

 

 

3,082

 

 

3,394

 

 

9,908

 

 

 

3,443

 

 

3,077

 

 

3,286

 

 

3,665

 

 

13,471

Interest

 

 

9,486

 

 

9,753

 

 

9,935

 

 

29,174

 

 

 

7,579

 

 

7,893

 

 

8,258

 

 

8,657

 

 

32,387

Total expenses

 

 

65,281

 

 

65,672

 

 

66,203

 

 

197,156

 

 

 

66,065

 

 

65,130

 

 

66,312

 

 

66,662

 

 

264,169

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before equity in income (loss) of non-consolidated REITs, other, gain (loss) on sale of properties and properties held for sale, less applicable income tax and taxes

 

 

1,612

 

 

1,022

 

 

2,502

 

 

5,136

 

 

 

2,691

 

 

3,241

 

 

2,314

 

 

173

 

 

8,419

Equity in income (loss) of non-consolidated REITs

 

 

(105)

 

 

(282)

 

 

7,180

 

 

6,793

 

 

 

(397)

 

 

(201)

 

 

(121)

 

 

(2,885)

 

 

(3,604)

Other

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 

22

 

 

129

 

 

67

 

 

(2,096)

 

 

(1,878)

Gain (loss) on sale of properties and provision for loss on properties held for sale, less applicable income tax

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 

2,289

 

 

(20,492)

 

 

(257)

 

 

(21)

 

 

(18,481)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) before taxes on income

 

 

1,507

 

 

740

 

 

9,682

 

 

11,929

 

 

 

4,605

 

 

(17,323)

 

 

2,003

 

 

(4,829)

 

 

(15,544)

Income tax expense

 

 

82

 

 

75

 

 

74

 

 

231

 

 

 

125

 

 

72

 

 

100

 

 

103

 

 

400

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

1,425

 

$

665

 

$

9,608

 

$

11,698

 

 

$

4,480

 

$

(17,395)

 

$

1,903

 

$

(4,932)

 

$

(15,944)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares outstanding, basic and diluted

 

 

107,231

 

 

107,231

 

 

107,231

 

 

107,231

 

 

 

107,231

 

 

107,231

 

 

107,231

 

 

107,231

 

 

107,231

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) per share, basic and diluted

 

$

0.01

 

$

0.01

 

$

0.09

 

$

0.11

 

 

$

0.04

 

$

(0.16)

 

$

0.02

 

$

(0.05)

 

$

(0.15)

 

 

 

September 30, 2018| Page 5


 

 

$ in thousands, except per share amounts)

Picture 1

Condensed Consolidated Balance Sheets

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

March 31,

 

June 30,

 

September 30,

 

 

March 31,

 

June 30,

 

September 30,

 

December 31,

 

 

    

2018

 

2018

    

2018

  

  

2017

 

2017

    

2017

    

2017

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real estate assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Land

 

$

191,578

 

$

191,578

 

$

191,578

 

 

$

196,178

 

$

191,578

 

$

191,578

 

$

191,578

 

Buildings and improvements

 

 

1,821,035

 

 

1,833,470

 

 

1,848,362

 

 

 

1,836,073

 

 

1,792,784

 

 

1,800,831

 

 

1,811,631

 

Fixtures and equipment

 

 

5,909

 

 

7,565

 

 

7,842

 

 

 

4,600

 

 

4,841

 

 

5,017

 

 

5,614

 

 

 

 

2,018,522

 

 

2,032,613

 

 

2,047,782

 

 

 

2,036,851

 

 

1,989,203

 

 

1,997,426

 

 

2,008,823

 

Less accumulated depreciation

 

 

390,581

 

 

405,115

 

 

419,746

 

 

 

350,697

 

 

348,652

 

 

361,720

 

 

376,131

 

Real estate assets, net

 

 

1,627,941

 

 

1,627,498

 

 

1,628,036

 

 

 

1,686,154

 

 

1,640,551

 

 

1,635,706

 

 

1,632,692

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquired real estate leases, net

 

 

78,729

 

 

71,861

 

 

65,687

 

 

 

115,471

 

 

105,811

 

 

96,282

 

 

86,520

 

Investment in non-consolidated REITs

 

 

69,703

 

 

69,067

 

 

 —

 

 

 

74,423

 

 

73,876

 

 

73,405

 

 

70,164

 

Asset held for sale

 

 

 —

 

 

 —

 

 

 —

 

 

 

 —

 

 

31,868

 

 

31,615

 

 

 —

 

Cash, cash equivalents and restricted cash

 

 

14,355

 

 

10,448

 

 

10,434

 

 

 

11,174

 

 

11,623

 

 

12,710

 

 

9,819

 

Tenant rent receivables, net

 

 

3,411

 

 

4,039

 

 

3,206

 

 

 

3,785

 

 

4,706

 

 

3,990

 

 

3,123

 

Straight-line rent receivable, net

 

 

53,430

 

 

53,294

 

 

53,056

 

 

 

52,304

 

 

51,590

 

 

52,272

 

 

53,194

 

Prepaid expenses and other assets

 

 

8,355

 

 

7,444

 

 

9,259

 

 

 

4,946

 

 

5,124

 

 

6,282

 

 

8,387

 

Related party mortgage loan receivable

 

 

71,455

 

 

71,190

 

 

70,925

 

 

 

81,515

 

 

72,250

 

 

71,985

 

 

71,720

 

Other assets: derivative asset

 

 

18,740

 

 

21,196

 

 

22,265

 

 

 

13,603

 

 

11,333

 

 

10,771

 

 

13,925

 

Office computers and furniture, net of accumulated depreciation

 

 

261

 

 

236

 

 

216

 

 

 

275

 

 

287

 

 

319

 

 

289

 

Deferred leasing commissions, net

 

 

39,815

 

 

43,254

 

 

45,475

 

 

 

34,636

 

 

33,548

 

 

36,348

 

 

40,679

 

Total assets

 

$

1,986,195

 

$

1,979,527

 

$

1,908,559

 

 

$

2,078,286

 

$

2,042,567

 

$

2,031,685

 

$

1,990,512

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bank note payable

 

$

98,000

 

$

98,000

 

$

17,000

 

 

$

295,000

 

$

295,000

 

$

300,000

 

$

78,000

 

Term loan payable, net of unamortized financing costs

 

 

765,259

 

 

765,618

 

 

763,914

 

 

 

765,539

 

 

765,861

 

 

766,183

 

 

764,901

 

Series A & Series B Senior Notes

 

 

198,727

 

 

198,768

 

 

198,809

 

 

 

 —

 

 

 —

 

 

 —

 

 

198,692

 

Accounts payable and accrued expenses

 

 

53,327

 

 

52,651

 

 

62,699

 

 

 

50,529

 

 

55,241

 

 

57,593