EX-99.2 3 fsp-20200430xex99d2.htm EX-99.2 fsp_Ex99_2

Exhibit 99.2 

Picture 25

 

Picture 22

First Quarter 2020
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

19-20

Financial Highlights
4

 

Leasing Activity
21

Income Statements
5

 

Lease Expirations by Square Feet
22

Balance Sheets
6

 

Lease Expirations with Annualized Rent per Square Foot
23

Cash Flow Statements
7

 

Redevelopment Activity
24

Property Net Operating Income (NOI)
8

 

Capital Expenditures
25

 

 

 

 

 

Reconciliation

 

 

Transaction Activity
26

FFO & AFFO
9

 

 

 

EBITDA
10

 

Loan Portfolio of Secured Real Estate
27

Property NOI
11

 

 

 

 

 

 

Net Asset Value Components
28

Debt Summary
12

 

 

 

 

 

 

Appendix: Definitions of Non-GAAP Measures

 

Capital Analysis
13

 

FFO
29

 

 

 

EBITDA and NOI
30

Owned and Managed Portfolio Overview

14-17

 

AFFO
31

 

 

 

 

 

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 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, 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.  FSP assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.

 

Picture 35

 

 

 

 

 

Greenwood Plaza, Englewood, CO 

 

 

March 31, 2020| Page 2

 

 

Picture 27

Company Information

 

 

Overview

 

 

 

 

Snapshot (as of March  31, 2020

 

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. 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

35 (1)

 

 

 

 

Total Square Feet

9.9 Million (1)

 

 

 

 

Trading Symbol

FSP

 

 

 

 

Exchange

NYSE American

 

 

 

 

Common Shares Outstanding

107,269,201

 

 

 

 

Quarterly Dividend

$0.09

Our Business

 

 

 

 

Dividend Yield

6.3%

As of March 31, 2020, the Company owned and operated a portfolio of real estate consisting of 32 operating properties, three redevelopment properties and two 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

$1.6 Billion (2)

 

 

 

 

Insider Holdings

4.08%

 

 

 

 

Picture 39

 

 

 

 

 

 

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

 

 

 

 

Plaza Seven, Minneapolis, MN

 

 

 

 

 

 

 

Inquiries

 

 

 

 

 

 

Inquiries should be directed to:  Georgia Touma

 

 

 

 

 

 

877.686.9496 or InvestorRelations@fspreit.com

 

(1) Includes both operating and redevelopment properties.

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

  outstanding. 

 

 

 

 

 

 

 

 

March 31, 2020| Page 3

 

 

Picture 9

Summary of Financial Highlights

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

31-Mar-20

    

31-Dec-19

    

30-Sep-19

    

30-Jun-19

    

31-Mar-19

 

Income Items:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rental revenue

$

62,567

 

$

68,575

 

$

68,108

 

$

65,485

 

$

63,359

 

Total revenue

 

62,983

 

 

68,997

 

 

68,539

 

 

66,813

 

 

64,716

 

Net income (loss)

 

(1,071)

 

 

3,648

 

 

2,399

 

 

1,633

 

 

(1,205)

 

Adjusted EBITDA*

 

30,325

 

 

35,632

 

 

33,996

 

 

33,113

 

 

31,267

 

FFO*

 

21,292

 

 

26,755

 

 

24,908

 

 

23,769

 

 

22,110

 

AFFO*

 

3,101

 

 

544

 

 

10,364

 

 

2,916

 

 

6,717

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Per Share Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EPS

$

(0.01)

 

$

0.03

 

$

0.02

 

$

0.02

 

$

(0.01)

 

FFO*

$

0.20

 

$

0.25

 

$

0.23

 

$

0.22

 

$

0.21

 

AFFO*

$

0.03

 

$

0.01

 

$

0.10

 

$

0.03

 

$

0.06

 

Weighted Average Shares (diluted)

 

107,269

 

 

107,240

 

 

107,231

 

 

107,231

 

 

107,231

 

Closing share price

$

5.73

 

$

8.56

 

$

8.46

 

$

7.38

 

$

7.19

 

Dividend declared

$

0.09

 

$

0.09

 

$

0.09

 

$

0.09

 

$

0.09

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance Sheet Items:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real estate, net

$

1,639,196

 

$

1,637,210

 

$

1,626,510

 

$

1,627,681

 

$

1,624,833

 

Other assets, net

 

208,431

 

 

205,444

 

 

216,640

 

 

215,661

 

 

266,412

 

Total assets, net

 

1,847,627

 

 

1,842,654

 

 

1,843,150

 

 

1,843,342

 

 

1,891,245

 

Total liabilities, net

 

1,090,309

 

 

1,056,258

 

 

1,053,497

 

 

1,042,834

 

 

1,071,258

 

Shareholders' equity

 

757,318

 

 

786,396

 

 

789,653

 

 

800,508

 

 

819,987

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Market Capitalization and Debt:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Market Capitalization (a)

$

1,614,653

 

$

1,888,224

 

$

1,877,176

 

$

1,761,366

 

$

1,780,992

 

Total debt outstanding (excluding unamortized financing costs)

$

1,000,000

 

$

970,000

 

$

970,000

 

$

970,000

 

$

1,010,000

 

Debt to Total Market Capitalization

 
61.9%

 

 
51.4%

 

 
51.7%

 

 
55.1%

 

 
56.7%

 

Net Debt to Adjusted EBITDA*

 

8.1

 

 

6.7

 

 

7.0

 

 

7.2

 

 

8.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Properties Leasing Statistics (b):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating properties assets

 

32

 

 

32

 

 

32

 

 

32

 

 

32

 

Operating properties total SF

 

9,506,513

 

 

9,504,634

 

 

9,503,964

 

 

9,498,858

 

 

9,495,118

 

Operating properties % leased

 
85.4%

 

 
87.6%

 

 
89.7%

 

 
88.1%

 

 
88.5%

 

(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 2020 and 2019, excludes redevelopment properties.

*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 29.

 

 

 

March 31, 2020| Page 4

Picture 42

Condensed Consolidated Income Statements

($ in thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the

 

 

For the Three Months Ended

 

For the Three Months Ended

 

Year Ended

 

 

31-Mar-20

 

31-Mar-19

 

30-Jun-19

 

30-Sep-19

 

31-Dec-19

 

31-Dec-19

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rental

  

$

62,567

  

$

63,359

  

$

65,485

  

$

68,108

  

$

68,575

  

$

265,527

Related party revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Management fees and interest income from loans

 

 

403

 

 

1,352

 

 

1,322

 

 

426

 

 

417

 

 

3,517

Other

 

 

13

 

 

 5

 

 

 6

 

 

 5

 

 

 5

 

 

21

Total revenue

 

 

62,983

 

 

64,716

 

 

66,813

 

 

68,539

 

 

68,997

 

 

269,065

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real estate operating expenses

 

 

17,298

 

 

17,726

 

 

17,116

 

 

18,041

 

 

19,428

 

 

72,311

Real estate taxes and insurance

 

 

11,762

 

 

12,102

 

 

12,801

 

 

12,505

 

 

10,463

 

 

47,871

Depreciation and amortization

 

 

22,338

 

 

23,245

 

 

22,109

 

 

22,559

 

 

22,996

 

 

90,909

General and administrative

 

 

3,525

 

 

3,509

 

 

3,702

 

 

3,886

 

 

3,376

 

 

14,473

Interest

 

 

9,063

 

 

9,368

 

 

9,371

 

 

9,036

 

 

8,982

 

 

36,757

Total expenses

 

 

63,986

 

 

65,950

 

 

65,099

 

 

66,027

 

 

65,245

 

 

262,321

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) before taxes on income

 

 

(1,003)

 

 

(1,234)

 

 

1,714

 

 

2,512

 

 

3,752

 

 

6,744

Taxes on income

 

 

68

 

 

(29)

 

 

81

 

 

113

 

 

104

 

 

269

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

(1,071)

 

$

(1,205)

 

$

1,633

 

$

2,399

 

$

3,648

 

$

6,475

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares outstanding, basic and diluted

 

 

107,269

 

 

107,231

 

 

107,231

 

 

107,231

 

 

107,240

 

 

107,233

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) per share, basic and diluted

 

$

(0.01)

 

$

(0.01)

 

$

0.02

 

$

0.02

 

$

0.03

 

$

0.06

 

 

 

March 31, 2020| Page 5

 

$ in thousands, except per share amounts)

Picture 1

Condensed Consolidated Balance Sheets

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

March 31,

 

 

March 31,

 

June 30,

 

September 30,

 

December 31,

 

 

    

2020

  

  

2019

 

2019

    

2019

    

2019

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real estate assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Land

 

$

191,578

 

 

$

191,578

 

$

191,578

 

$

191,578

 

$

191,578

 

Buildings and improvements

 

 

1,941,952

 

 

 

1,872,082

 

 

1,886,294

 

 

1,900,131

 

 

1,924,664

 

Fixtures and equipment

 

 

11,917

 

 

 

9,153

 

 

10,607

 

 

11,099

 

 

11,665

 

 

 

 

2,145,447

 

 

 

2,072,813

 

 

2,088,479

 

 

2,102,808

 

 

2,127,907

 

Less accumulated depreciation

 

 

506,251

 

 

 

447,980

 

 

460,798

 

 

476,298

 

 

490,697

 

Real estate assets, net

 

 

1,639,196

 

 

 

1,624,833

 

 

1,627,681

 

 

1,626,510

 

 

1,637,210

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquired real estate leases, net

 

 

37,270

 

 

 

53,948

 

 

49,475

 

 

45,066

 

 

40,704

 

Cash, cash equivalents and restricted cash

 

 

17,283

 

 

 

8,832

 

 

13,100

 

 

20,159

 

 

9,790

 

Tenant rent receivables, net

 

 

3,609

 

 

 

4,489

 

 

6,366

 

 

4,410

 

 

3,851

 

Straight-line rent receivable, net

 

 

68,317

 

 

 

55,836

 

 

61,438

 

 

64,111

 

 

66,881

 

Prepaid expenses and other assets

 

 

7,486

 

 

 

10,469

 

 

8,052

 

 

8,868

 

 

7,246

 

Related party mortgage loan receivable

 

 

21,000

 

 

 

72,795

 

 

21,530

 

 

21,265

 

 

21,000

 

Other assets: derivative asset

 

 

 —

 

 

 

10,469

 

 

4,645

 

 

2,844

 

 

3,022

 

Office computers and furniture, net of accumulated depreciation

 

 

215

 

 

 

166

 

 

154

 

 

136

 

 

183

 

Deferred leasing commissions, net

 

 

53,251

 

 

 

49,408

 

 

50,901

 

 

49,781

 

 

52,767

 

Total assets

 

$

1,847,627

 

 

$

1,891,245

 

$

1,843,342

 

$

1,843,150

 

$

1,842,654

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bank note payable

 

$

30,000

 

 

$

40,000

 

$

 —

 

$

 —

 

$

 —

 

Term loan payable, net of unamortized financing costs

 

 

766,124

 

 

 

764,642

 

 

765,005

 

 

765,369

 

 

765,733

 

Series A & Series B Senior Notes

 

 

199,055

 

 

 

198,892

 

 

198,933

 

 

198,974

 

 

199,015

 

Accounts payable and accrued expenses

 

 

57,076

 

 

 

52,248

 

 

54,282

 

 

61,657

 

 

66,658

 

Accrued compensation

 

 

1,335

 

 

 

1,073

 

 

2,191

 

 

3,769

 

 

3,400

 

Tenant security deposits

 

 

9,615

 

 

 

6,352

 

 

9,118

 

 

9,008

 

 

9,346

 

Lease liability

 

 

1,803

 

 

 

2,141

 

 

2,059

 

 

1,976

 

 

1,890

 

Other liabilities: derivative liabilities

 

 

23,035

 

 

 

2,496

 

 

8,132

 

 

9,934

 

 

7,704

 

Acquired unfavorable real estate leases, net

 

 

2,266

 

 

 

3,414

 

 

3,114

 

 

2,810

 

 

2,512

 

Total liabilities

 

 

1,090,309

 

 

 

1,071,258

 

 

1,042,834

 

 

1,053,497

 

 

1,056,258

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ Equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred stock

 

 

 —

 

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

Common stock

 

 

11

 

 

 

11

 

 

11

 

 

11

 

 

11

 

Additional paid-in capital

 

 

1,356,794

 

 

 

1,356,457

 

 

1,356,457

 

 

1,356,457

 

 

1,356,794

 

Accumulated other comprehensive income (loss)

 

 

(23,035)

 

 

 

7,973

 

 

(3,487)

 

 

(7,090)

 

 

(4,682)

 

Accumulated distributions in excess of accumulated earnings

 

 

(576,452)

 

 

 

(544,454)

 

 

(552,473)

 

 

(559,725)

 

 

(565,727)

 

Total stockholders’ equity

 

 

757,318

 

 

 

819,987

 

 

800,508

 

 

789,653

 

 

786,396

 

Total liabilities and stockholders’ equity

 

$

1,847,627

 

 

$

1,891,245

 

$

1,843,342

 

$

1,843,150

 

$

1,842,654

 

 

March 31, 2020| Page 6

Picture 19

Condensed Consolidated Statements of Cash Flows

(in thousands)

 

 

 

 

 

 

 

 

 

 

Three Months Ended March 31,

 

 

 

 

 

 

 

 

 

2020

 

2019

 

Cash flows from operating activities:

 

 

 

 

 

Net loss

$

(1,071)

$

(1,205)

 

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

 

 

 

 

 

Depreciation and amortization expense

 

23,086

 

23,962

 

Amortization of above and below market leases

 

(73)

 

(112)

 

Decrease in allowance for doubtful accounts
and write-off of accounts receivable

 

(13)

 

(60)

 

Changes in operating assets and liabilities:

 

 

 

 

 

Tenant rent receivables

 

255

 

(491)

 

Straight-line rents

 

(966)

 

(1,140)

 

Lease acquisition costs

 

(470)

 

(689)

 

Prepaid expenses and other assets

 

(644)

 

1,497

 

Accounts payable and accrued expenses

 

(8,215)

 

(6,101)

 

Accrued compensation

 

(2,065)

 

(1,970)

 

Tenant security deposits

 

269

 

33

 

Payment of deferred leasing commissions

 

(2,892)

 

(4,242)

 

Net cash provided by operating activities

 

7,201

 

9,482

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

Property improvements, fixtures and equipment

 

(20,054)

 

(15,223)

 

Investment in related party mortgage loan receivable

 

 —

 

(2,400)

 

Repayment of related party mortgage loan receivable

 

 —

 

265

 

Proceeds received from liquidating trust

 

 —

 

263

 

Net cash used in investing activities

 

(20,054)

 

(17,095)

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

Distributions to stockholders

 

(9,654)

 

(9,651)

 

Borrowings under bank note payable

 

35,000

 

30,000

 

Repayments of bank note payable

 

(5,000)

 

(15,000)

 

Deferred Financing Costs

 

 —

 

(81)

 

Net cash provided by financing activities

 

20,346

 

5,268

 

Net increase (decrease) in cash, cash equivalents and restricted cash

 

7,493

 

(2,345)

 

Cash, cash equivalents and restricted cash, beginning of period

 

9,790

 

11,177

 

Cash, cash equivalents and restricted cash, end of period

$

17,283

$

8,832

 

 

 

March 31, 2020| Page 7

Picture 40

Property Net Operating Income (NOI)* with

Same Store Comparison (in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rentable

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year

 

 

 

 

 

 

 

 

Square Feet

 

Three Months Ended

Three Months Ended

 

Ended

 

Inc

 

%

 

(in thousands)

    

or RSF

   

31-Mar-20

   

31-Mar-19

   

30-Jun-19

   

30-Sep-19

 

31-Dec-19

   

31-Dec-19

   

(Dec)

   

Change

 

Region

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

East

 

944

 

$

2,664

 

$

3,185

 

$

3,301

 

$

3,001

 

$

3,174

 

$

12,661

 

$

(521)

 

(16.4)

%

MidWest

 

1,555

 

 

5,485

 

 

5,163

 

 

5,174

 

 

5,297

 

 

5,243

 

 

20,877

 

 

322

 

6.2

%

South

 

4,387

 

 

13,290

 

 

14,272

 

 

15,196

 

 

17,456

 

 

17,589

 

 

64,513

 

 

(982)

 

(6.9)

%

West

 

2,620

 

 

11,463

 

 

10,559

 

 

11,240

 

 

11,134

 

 

11,974

 

 

44,907

 

 

904

 

8.6

%

Property NOI* from Operating Properties

 

9,506

 

 

32,902

 

 

33,179

 

 

34,911

 

 

36,888

 

 

37,980

 

 

142,958

 

 

(277)

 

(0.8)

%

Dispositions and Redevelopment Properties

 

405

 

 

(28)

 

 

(205)

 

 

(215)

 

 

(21)

 

 

(47)

 

 

(488)

 

 

177

 

0.5

%

Property NOI*

 

9,911

 

$

32,874

 

$

32,974

 

$

34,696

 

$

36,867

 

$

37,933

 

$

142,470

 

$

(100)

 

(0.3)

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Same Store

 

 

 

$

32,902

 

$

33,179

 

$

34,911

 

$

36,888

 

$

37,980

 

$

142,958

 

$

(277)

 

(0.8)

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less Nonrecurring

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Items in NOI* (a)

 

 

 

 

26

 

 

35

 

 

706

 

 

3,434

 

 

4,402

 

 

8,577

 

 

(9)

 

0.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Comparative

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Same Store

 

 

 

$

32,876

 

$

33,144

 

$

34,205

 

$

33,454

 

$

33,578

 

$

134,381

 

$

(268)

 

(0.8)

%

 

(a)

Nonrecurring items in NOI include proceeds from bankruptcies, lease termination fees or other significant nonrecurring income or expenses, which may affect comparability. 

 

*See the Appendix for Definition of Non-GAAP Measures beginning on page 29.

 

 

March 31, 2020| Page 8

Picture 32

FFO* & AFFO* Reconciliation

(in thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year

 

 

 

Three Months Ended

 

Three Months Ended

 

Ended

 

 

    

31-Mar-20

 

31-Mar-19

    

30-Jun-19

    

30-Sep-19

    

31-Dec-19

    

31-Dec-19

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

(1,071)

 

$

(1,205)

 

$

1,633

 

$

2,399

 

$

3,648

 

$

6,475

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation & amortization

 

 

22,265

 

 

23,133

 

 

22,028

 

 

22,448

 

 

22,898

 

 

90,507

 

NAREIT FFO*

 

 

21,194

 

 

21,928

 

 

23,661

 

 

24,847

 

 

26,546

 

 

96,982

 

Lease Acquisition costs

 

 

98

 

 

182

 

 

108

 

 

61

 

 

209

 

 

560

 

Funds From Operations (FFO)*

 

$

21,292

 

$

22,110

 

$

23,769

 

$

24,908

 

$

26,755

 

$

97,542

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Funds From Operations (AFFO)*

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Funds From Operations (FFO)*

 

$

21,292

 

$

22,110

 

$

23,769

 

$

24,908

 

$

26,755

 

$

97,542

 

Amortization of deferred financing costs

 

 

748

 

 

717

 

 

720

 

 

720

 

 

721

 

 

2,878

 

Shares issued as compensation

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

337

 

 

337

 

Straight-line rent

 

 

(966)

 

 

(1,140)

 

 

(3,689)

 

 

(2,120)

 

 

(1,927)

 

 

(8,876)

 

Tenant improvements

 

 

(10,716)

 

 

(8,318)

 

 

(10,169)

 

 

(7,890)

 

 

(15,874)

 

 

(42,251)

 

Leasing commissions

 

 

(2,730)

 

 

(4,239)

 

 

(3,666)

 

 

(1,286)

 

 

(3,164)

 

 

(12,355)

 

Non-investment capex

 

 

(4,527)

 

 

(2,413)

 

 

(4,049)

 

 

(3,968)

 

 

(6,304)

 

 

(16,734)

 

Adjusted Funds From Operations (AFFO)*

 

$

3,101

 

$

6,717

 

$

2,916

 

$

10,364

 

$

544

 

$

20,541

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Per Share Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EPS

 

$

(0.01)

 

$

(0.01)

 

$

 0.02

 

$

 0.02

 

$

 0.03

 

$

 0.06

 

FFO*

 

 

 0.20

 

 

 0.21

 

 

 0.22

 

 

 0.23

 

 

 0.25

 

 

 0.91

 

AFFO*

 

 

 0.03

 

 

 0.06

 

 

 0.03

 

 

 0.10

 

 

 0.01

 

 

 0.19

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted Average Shares (basic and diluted)

 

 

107,269

 

 

107,231

 

 

107,231

 

 

107,231

 

 

107,240

 

 

107,233

 

 

*See the Appendix for Definitions of these Non-GAAP Measures beginning on page 29. 

 

 

March 31, 2020| Page 9

Picture 34

EBITDA* & Adjusted EBITDA* Reconciliation

(in thousands, except ratio amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year

 

 

Three Months Ended

 

 

Three Months Ended

 

Ended

 

    

31-Mar-20

    

   

   

31-Mar-19

    

30-Jun-19

    

30-Sep-19

    

31-Dec-19

    

31-Dec-19

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

(1,071)

 

 

 

$

(1,205)

 

$

1,633

 

$

2,399

 

$

3,648

 

$

6,475

Interest expense

 

 

9,063

 

 

 

 

9,368

 

 

9,371

 

 

9,036

 

 

8,982

 

 

36,757

Depreciation and amortization

 

 

22,265

 

 

 

 

23,133

 

 

22,028

 

 

22,448

 

 

22,898

 

 

90,507

Income taxes

 

 

68

 

 

 

 

(29)

 

 

81

 

 

113

 

 

104

 

 

269

EBITDA*

 

$

30,325

 

 

 

$

31,267

 

$

33,113

 

$

33,996

 

$

35,632

 

$

134,008

(Gain) loss on sale of properties and provisions for loss
on properties held for sale or equity investments

 

 

 —

 

 

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

Adjusted EBITDA*

 

$

30,325

 

 

 

$

31,267

 

$

33,113

 

$

33,996

 

$

35,632

 

$

134,008

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

$

9,063

 

 

 

$

9,368

 

$

9,371

 

$

9,036

 

$

8,982

 

$

36,757

Scheduled principal payments

 

 

 —

 

 

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

Interest and scheduled principal payments

 

$

9,063

 

 

 

$

9,368

 

$

9,371

 

$

9,036

 

$

8,982

 

$

36,757

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest coverage ratio

 

 

3.35

 

 

 

 

3.34

 

 

3.53

 

 

3.76

 

 

3.97

 

 

3.65

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt service coverage ratio

 

 

3.35

 

 

 

 

3.34

 

 

3.53

 

 

3.76

 

 

3.97

 

 

3.65

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt excluding unamortized financing costs

 

$

1,000,000

 

 

 

$

1,010,000

 

$

970,000

 

$

970,000

 

$

970,000

 

 

 

Cash, cash equivalents and restricted cash

 

 

17,283

 

 

 

 

8,832

 

 

13,100

 

 

20,159

 

 

9,790

 

 

 

Net Debt (Debt less Cash, cash equivalents and restricted cash)

 

$

982,717

 

 

 

$

1,001,168

 

$

956,900

 

$

949,841

 

$

960,210

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA*

 

$

30,325

 

 

 

$

31,267

 

$

33,113

 

$

33,996

 

$

35,632

 

 

 

Annualized

 

$

121,300

 

 

 

$

125,068

 

$

132,452

 

$

135,984

 

$

142,528

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Debt-to-Adjusted EBITDA*

 

 

8.1

 

 

 

 

8.0

 

 

7.2

 

 

7.0

 

 

6.7

 

 

 

*See the Appendix for Definitions of these Non-GAAP Measures beginning on page 29.  Amounts in the EBITDA and Adjusted EBITDA reconciliation do not reflect our proportionate share of interest expense, depreciation, amortization, income taxes, gains or losses on sales and debt from our investments in non-consolidated REITs, which are accounted for under the equity method.

 

 

March 31, 2020| Page 10

 

 

Picture 24

Reconciliation of Net Income (Loss) to Property NOI*

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year

 

 

 

Three Months Ended

 

Three Months Ended

 

Ended

 

 

    

31-Mar-20

    

31-Mar-19

    

30-Jun-19

    

30-Sep-19

    

31-Dec-19

    

31-Dec-19

 

Net income (loss)

 

$

(1,071)

 

$

(1,205)

 

$

1,633

 

$

2,399

 

$

3,648

 

$

6,475

 

Add (deduct):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Management fee income

 

 

(478)

 

 

(677)

 

 

(645)

 

 

(634)

 

 

(570)

 

 

(2,526)

 

Depreciation and amortization

 

 

22,338

 

 

23,245

 

 

22,109

 

 

22,559

 

 

22,996

 

 

90,909

 

Amortization of above/below market leases

 

 

(73)

 

 

(112)

 

 

(81)

 

 

(112)

 

 

(97)

 

 

(402)

 

General and administrative

 

 

3,525

 

 

3,509

 

 

3,703

 

 

3,886

 

 

3,375

 

 

14,473

 

Interest expense

 

 

9,063

 

 

9,368

 

 

9,371

 

 

9,036

 

 

8,982

 

 

36,757

 

Interest income

 

 

(382)

 

 

(1,294)

 

 

(1,259)

 

 

(395)

 

 

(390)

 

 

(3,338)

 

Non-property specific items, net

 

 

(48)

 

 

140

 

 

(135)

 

 

128

 

 

(11)

 

 

122

 

Property NOI*

 

$

32,874

 

$

32,974

 

$

34,696

 

$

36,867

 

$

37,933

 

$

142,470

 

 

*See the Appendix for Definition of Non-GAAP Measures beginning on page 29.

 

 

March 31, 2020| Page 11

Picture 38

Debt Summary

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Maximum

 

Amount

 

Interest

 

Interest

 

 

 

 

 

Maturity

 

Amount

 

Drawn at

 

Rate (a)

 

Rate at

 

Facility

 

 

    

Date

    

of Loan

    

31-Mar-20

    

Components

    

31-Mar-20

    

Fee

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BAML Revolver

 

12-Jan-22

 

$

600,000

 

$

30,000

 

L

 + 
1.20%

 
2.12%

 
0.25%

 

JPM Term Loan (b)

 

30-Nov-21

 

 

150,000

 

 

150,000

 

L

 + 
1.25%

 
3.21%

 

 

 

BAML Term Loan

 

12-Jan-23

 

 

400,000

 

 

400,000

 
1.12%

 + 
1.35%

 
2.47%

 

 

 

BMO Term Loan Tranche A

 

30-Nov-21

 

 

55,000

 

 

55,000

 
2.32%

 + 
1.25%

 
3.57%

 

 

 

BMO Term Loan Tranche B

 

31-Jan-24

 

 

165,000

 

 

165,000

 
2.32%

 + 
1.25%

 
3.57%

 

 

 

Series A Senior Notes

 

20-Dec-24

 

 

116,000

 

 

116,000

 

 

 

 

 
3.99%

 

 

 

Series B Senior Notes

 

20-Dec-27

 

 

84,000

 

 

84,000

 

 

 

 

 
4.26%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

1,570,000

 

$

1,000,000

 

 

 

 

 
3.14%

 

 

 

 

·

On August 2, 2018, we entered into an Amended and Restated Credit Agreement with respect to the JPM Term Loan, which extended the maturity of the JPM Term Loan to November 30, 2021 and reduced the number of basis points over the LIBOR-based rate used to determine the interest rate.  On March 7, 2019, we entered into interest rate swap transactions for a  $100 million portion of the $150 million JPM Term Loan that fixed the LIBOR-based rate at 2.44% from March 29, 2019 and until the loan matures on November 30, 2021.  Accordingly, the interest rate on the $100 million portion was 3.69% and the interest rate on the remaining $50 million portion was 2.25% at March 31, 2020.  The weighted average rate at March 31, 2020 was 3.21% on the JPM Term Loan. 

·

On September 27, 2018, we entered into a Second Amended and Restated Credit Agreement with respect to the BMO Term Loan, which consists of a $55 million tranche A term loan and a $165 million tranche B term loan.  The tranche A term loan matures on November 30, 2021 and the tranche B term loan matures on January 31, 2024.  The number of basis points over LIBOR used to determine the interest rate was reduced.     

·

The BAML Revolver is subject to a 25 basis point facility fee based on our credit rating and, when applied to our availability of $600 million at March 31, 2020, would be $1.5 million annually.     

·

On October 24, 2017, we entered into a note purchase agreement relating to a private placement of $200 million in aggregate principal amount of unsecured senior notes, consisting of $116 million in aggregate principal amount of 3.99% Series A Senior Notes with a 7-year maturity and $84 million in aggregate principal amount of 4.26% Series B Senior Notes with a 10-year maturity.  On December 20, 2017, we drew the proceeds from the private placement and reduced the outstanding balance on our revolving line of credit. 

·

We incurred financing costs, some of which are deferred and amortized into interest expense during the terms of the loans we execute.  We estimate the annualized rate for this amortization to interest expense will be approximately $2.9 million.

·

Additional information on these transactions can be found in Current Reports on Form 8-K that the Company filed with the U.S. Securities and Exchange Commission on October 24, 2017, August 2, 2018 and September 27, 2018.        

 

(a)

Interest rate excludes amortization of deferred financing costs and facility fees, which is discussed in the notes above.

(b)

The interest rate is calculated as $100 million at the fixed rate of 3.69% and the remaining $50 million at the floating rate plus 1.25%, or 2.25% as  of March 31, 2020.    

 

March 31, 2020| Page 12

 

 

Picture 17

Capital Analysis

(in thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

31-Mar-20

 

 

31-Mar-19

 

30-Jun-19

 

30-Sep-19

 

31-Dec-19

 

Market Data:

    

 

 

  

  

 

 

    

 

 

    

 

 

    

 

 

  

Shares Outstanding

 

 

107,269

 

 

 

107,231

 

 

107,231

 

 

107,231

 

 

107,269

 

Closing market price per share

 

$

5.73

 

 

$

7.19

 

$

7.38

 

$

8.46

 

$

8.56

 

Market capitalization

 

$

614,653

 

 

$

770,992

 

$

791,366

 

$

907,176

 

$

918,224

 

Total debt outstanding excluding unamortized financing costs

 

 

1,000,000

 

 

 

1,010,000

 

 

970,000

 

 

970,000

 

 

970,000

 

Total Market Capitalization

 

$

1,614,653

 

 

$

1,780,992

 

$

1,761,366

 

$

1,877,176

 

$

1,888,224

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividend Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total dividends declared for the quarter

 

$

9,654

 

 

$

9,651

 

$

9,651

 

$

9,651

 

$

9,650

 

Common dividend declared per share

 

$

0.09

 

 

$

0.09

 

$

0.09

 

$

0.09

 

$

0.09

 

Declared dividend as a % of Net income (loss) per share

 

 

-901%

 

 

 

-801%

 

 
591%

 

 
402%

 

 
265%

 

Declared dividend as a % of AFFO* per share

 

 
311%

 

 

 
144%

 

 
331%

 

 
93%

 

 
1774%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liquidity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash, cash equivalents and restricted cash

 

$

17,283

 

 

$

8,832

 

$

13,100

 

$

20,159

 

$

9,790

 

Revolver:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross potential available under the BAML Revolver

 

 

600,000

 

 

 

600,000

 

 

600,000

 

 

600,000

 

 

600,000

 

Less:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Outstanding balance

 

 

(30,000)

 

 

 

(40,000)

 

 

 —

 

 

 —

 

 

 —

 

Total Liquidity

 

$

587,283

 

 

$

568,832

 

$

613,100

 

$

620,159

 

$

609,790

 

 

*See page 9 for a reconciliation of Net Income (Loss) to AFFO and the Appendix for Definitions of Non-GAAP Measures beginning on page 29.

 

 

March 31, 2020| Page 13

 

 

Picture 2

Owned Portfolio Overview

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of the Quarter Ended

 

 

    

31-Mar-20

 

31-Dec-19

 

30-Sep-19

 

30-Jun-19

 

31-Mar-19

 

Operating Properties:

 

 

 

 

 

 

 

 

 

 

 

Number of properties

 

32

 

32

 

32

 

32

 

32

 

Square feet

 

9,506,513

 

9,504,634

 

9,503,964

 

9,498,858

 

9,495,118

 

Leased percentage

 
85.4%

 
87.6%

 
89.7%

 
88.1%

 
88.5%

 

 

 

 

 

 

 

 

 

 

 

 

 

Redevelopment Properties (a):

 

 

 

 

 

 

 

 

 

 

 

Number of properties

 

 3

 

 3

 

 3

 

 3

 

 3

 

Square feet

 

405,215

 

405,215

 

405,215

 

404,652

 

404,652

 

Leased percentage

 
55.8%

 
50.3%

 
50.3%

 
11.9%

 
11.9%

 

 

 

 

 

 

 

 

 

 

 

 

 

Managed Properties - Single Asset REITs (SARs):

 

 

 

 

 

 

 

 

 

 

 

Number of properties

 

 2

 

 2

 

 2

 

 2

 

 3

 

Square feet

 

348,545

 

348,545

 

348,545

 

348,545

 

674,342

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Operating, Redevelopment and Managed Properties:

 

 

 

 

 

 

 

 

 

 

 

Number of properties

 

37

 

37

 

37

 

37

 

38

 

Square feet

 

10,260,273

 

10,258,394

 

10,257,724

 

10,252,055

 

10,574,112

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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.

 

 

 

March 31, 2020| Page 14

 

 

Picture 2

Owned Portfolio Overview

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Percent

 

Wtd Occupied

 

GAAP

 

 

 

 

 

 

 

 

 

 

Percent

 

Wtd Occupied

 

GAAP

 

MSA / Property Name

    

City

    

State

    

Square Feet

    

Leased

    

Percentage (a)

    

Rent (b)

    

    

MSA / Property Name

    

City

    

State

    

Square Feet

    

Leased

    

Percentage (a)

    

Rent (b)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Properties:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

East Region

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Midwest Region

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Washington, D.C.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Chicago

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Meadow Point

 

Chantilly

 

VA

 

138,537

 
91.1%

 
94.1%

 

$

25.72

 

 

Northwest Point

 

Elk Grove Village

 

IL

 

177,095

 
100.0%

 
100.0%

 

$

32.19

 

Stonecroft

 

Chantilly

 

VA

 

111,469

 
0.0%

 
0.0%

 

$

 —

 

 

909 Davis Street

 

Evanston

 

IL

 

195,098

 
93.3%

 
93.3%

 

$

38.22

 

Loudoun Tech Center

 

Dulles

 

VA

 

136,658

 
98.9%

 
98.9%

 

$

19.65

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Indianapolis

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Richmond

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

River Crossing

 

Indianapolis

 

IN

 

205,729

 
98.5%

 
97.4%

 

$

24.91

 

Innsbrook

 

Glen Allen

 

VA

 

298,183

 
57.2%

 
57.2%

 

$

18.94

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

St. Louis

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Raleigh-Durham

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Timberlake

 

Chesterfield

 

MO

 

234,496

 
95.7%

 
95.7%

 

$

27.13

 

Emperor Boulevard

 

Durham

 

NC

 

259,531

 
100.0%

 
100.0%

 

$

33.06

 

 

Timberlake East

 

Chesterfield

 

MO

 

117,036

 
100.0%

 
100.0%

 

$

26.67

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Minneapolis

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

121 South 8th Street

 

Minneapolis

 

MN

 

297,209

 
93.7%

 
89.5%

 

$

24.15

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Plaza Seven

 

Minneapolis

 

MN

 

328,403

 
89.0%

 
87.9%

 

$

32.03

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

East Region Total

 

 

 

 

 

944,378

 
73.2%

 
73.7%

 

$

25.61

 

 

Midwest Region Total

 

 

 

 

 

1,555,066

 
94.8%

 
93.6%

 

$

29.22

 

 

(a)

Weighted Occupied Percentage for the three months ended March 31, 2020.

(b)

Weighted Average GAAP Rent per Occupied Square Foot.

 

 

March 31, 2020| Page 15

 

 

Picture 3

Owned Portfolio Overview

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Percent

 

Wtd Occupied

 

GAAP

 

 

 

 

 

 

 

 

 

 

Percent

 

Wtd Occupied

 

GAAP

 

MSA / Property Name

    

City

    

State

    

Square Feet

    

Leased

    

Percentage (a)

    

Rent (b)

    

    

MSA / Property Name

    

City

    

State

    

Square Feet

    

Leased

    

Percentage (a)

    

Rent (b)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

South Region

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

West Region

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dallas-Fort Worth

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Denver

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Legacy Tennyson Center

 

Plano

 

TX

 

207,049

 
100.0%

 
91.8%

 

$

 29.80

 

 

380 Interlocken

 

Broomfield

 

CO

 

240,359

 
73.1%

 
72.4%

 

$

35.33

 

One Legacy Circle

 

Plano

 

TX

 

214,110

 
52.9%

 
45.5%

 

$

 35.79

 

 

1999 Broadway

 

Denver

 

CO

 

677,377

 
89.7%

 
80.0%

 

$

33.84

 

Addison Circle

 

Addison

 

TX

 

289,302

 
79.4%

 
74.9%

 

$

 33.45

 

 

Greenwood Plaza

 

Englewood

 

CO

 

196,236

 
100.0%

 
100.0%

 

$

25.18

 

Collins Crossing

 

Richardson

 

TX

 

300,887

 
79.7%

 
79.3%

 

$

 27.09

 

 

390 Interlocken

 

Broomfield

 

CO

 

241,512

 
99.4%

 
98.2%

 

$

34.92

 

Liberty Plaza

 

Addison

 

TX

 

216,827

 
73.4%

 
72.4%

 

$

 23.65

 

 

1001 17th Street

 

Denver

 

CO

 

655,420

 
98.5%

 
98.3%

 

$

37.01

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

600 17th Street

 

Denver

 

CO

 

609,353

 
92.4%

 
86.4%

 

$

32.47

 

Houston

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

West Region Total

 

 

 

 

 

2,620,257

 
92.7%

 
88.5%

 

$

33.90

 

Park Ten

 

Houston

 

TX

 

157,460

 
71.7%

 
71.7%

 

$

 24.79

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Eldridge Green

 

Houston

 

TX

 

248,399

 
100.0%

 
100.0%

 

$

 30.13

 

 

Total Operating Properties

 

 

 

 

 

9,506,513

 
85.4%

 
82.4%

 

$

30.31

 

Park Ten Phase II

 

Houston

 

TX

 

156,746

 
95.0%

 
82.6%

 

$

 28.20

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Westchase I & II

 

Houston

 

TX

 

629,025

 
55.8%

 
56.8%

 

$

 29.88

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Redevelopment Properties (c)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Atlanta

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Forest Park

 

Charlotte

 

NC

 

62,212

 
35.6%

 
0.0%

 

$

—

 

One Overton Park

 

Atlanta

 

GA

 

387,267

 
93.3%

 
81.3%

 

$

 24.53

 

 

Blue Lagoon Drive

 

Miami

 

FL

 

213,182

 
73.1%

 
0.0%

 

$

—

 

One Ravinia

 

Atlanta

 

GA

 

386,602

 
87.9%

 
86.4%

 

$

 27.64

 

 

801 Marquette Ave

 

Minneapolis

 

MN

 

129,821

 
37.0%

 
37.0%

 

$

 25.88

 

Two Ravinia

 

Atlanta

 

GA

 

411,047

 
69.8%

 
67.7%

 

$

 27.44

 

 

Total Redevelopment Properties

 

 

 

 

 

405,215

 
55.8%

 
11.9%

 

$

25.88

 

Pershing Plaza

 

Atlanta

 

GA

 

160,145

 
98.9%

 
98.4%

 

$

 30.81

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

999 Peachtree

 

Atlanta

 

GA

 

621,946

 
91.8%

 
84.9%

 

$

 33.67

 

 

Total Owned Portfolio

 

 

 

 

 

9,911,728

 
84.2%

 
79.5%

 

$
30.28

 

South Region Total

 

 

 

 

 

4,386,812

 
80.4%

 
76.6%

 

$

 29.28

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(a)

Weighted Occupied Percentage for the three months ended March 31, 2020.

(b)

Weighted Average GAAP Rent per Occupied Square Foot.

(c)

We define Redevelopment Properties as properties being developed, redeveloped or where redevelopment is complete, but are in lease-up and that are not stabilized. 

 

 

March 31, 2020| Page 16

 

 

Picture 5

Managed Portfolio Overview

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

MSA / Property Name

    

City

    

State

    

Square Feet

  

  

  

MSA / Property Name

    

City

    

State

    

Square Feet

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Southeast Region

 

 

 

 

 

 

 

 

 

Midwest Region

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Atlanta

 

 

 

 

 

 

 

 

 

Indianapolis

 

 

 

 

 

 

 

Satellite Place

 

Duluth

 

GA

 

134,785

 

 

 

Monument Circle

 

Indianapolis

 

IN

 

213,760

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Southeast Region Total

 

 

 

 

 

134,785

 

 

 

Midwest Region Total

 

 

 

 

 

213,760

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Managed

 

 

 

 

 

348,545

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Operating & Managed

 

 

 

 

 

10,260,273

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

March 31, 2020| Page 17

 

 

Picture 6

Tenants by Industry

(By Square Feet)

 

 

Picture 7

March 31, 2020| Page 18

 

 

Picture 23

20 Largest Tenants with Annualized Rent and Remaining Term

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Remaining

 

Aggregate

 

 

 

 

 

% of Aggregate

 

 

 

Tenant

 

Number of

 

Lease Term

 

Leased

 

% of Total

 

Annualized

 

Leased

 

 

    

Name

    

Leases

    

in Months

    

Square Feet

    

Square Feet

    

Rent (a)

    

Annualized Rent

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1

 

IQVIA Holdings Inc.

 
1

 
74

 

259,531

 
2.6%

 

$

8,847,806

 
3.7%

 

2

 

US Government (b)

 
4

 

1, 2, 6, 10, 122

 

259,141

 
2.6%

 

 

7,364,361

 
3.1%

 

3

 

CITGO Petroleum Corporation

 
1

 
23

 

248,399

 
2.5%

 

 

8,269,203

 
3.4%

 

4

 

Newfield Exploration Company

 
1

 
23

 

234,495

 
2.4%

 

 

9,845,185

 
4.1%

 

5

 

Centene Management Company, LLC

 
3

 

39, 39, 39

 

216,879

 
2.2%

 

 

6,199,728

 
2.6%

 

6

 

Eversheds Sutherland (US) LLP

 
1

 
73

 

179,868

 
1.8%

 

 

5,608,767

 
2.3%

 

7

 

EOG Resources, Inc.

 
1

 
81

 

169,167

 
1.7%

 

 

6,031,639

 
2.5%

 

8

 

The Vail Corporation

 
1

 
120

 

164,636

 
1.7%

 

 

5,557,414

 
2.3%

 

9

 

Lennar Homes, LLC (c)

 
1

 
192

 

155,808

 
1.6%

 

 

 —

 
0.0%

 

10

 

T-Mobile South, LLC dba T-Mobile

 
1

 
65

 

151,792

 
1.5%

 

 

4,027,042

 
1.7%

 

11

 

Citicorp Credit Services, Inc.

 
1

 
89

 

146,260

 
1.5%

 

 

4,809,029

 
2.0%

 

12

 

Jones Day (d)

 
1

 
14

 

140,342

 
1.4%

 

 

5,029,308

 
2.1%

 

13

 

Worldventures Holdings, LLC

 
2

 

118, 124

 

129,998

 
1.3%

 

 

4,054,886

 
1.7%

 

14

 

Kaiser Foundation Health Plan

 
1

 
50

 

120,979

 
1.2%

 

 

3,656,687

 
1.5%

 

15

 

Argo Data Resource Corporation (d)

 
1

 

41, 125

 

114,200

 
1.1%

 

 

3,280,966

 
1.4%

 

16

 

Giesecke & Devrient America

 
1

 
57

 

112,110

 
1.1%

 

 

2,153,633

 
0.9%

 

17

 

Randstad General Partner (US) (e)

 
1

 

15, 50

 

109,638

 
1.1%

 

 

2,819,226

 
1.2%

 

18

 

VMWare, Inc.

 
1

 
74

 

100,853

 
1.0%

 

 

3,314,925

 
1.4%

 

19

 

Ping Identity Corp.

 
1

 

75

 

94,761

 
1.0%

 

 

3,678,065

 
1.5%

 

20

 

Common Grounds LLC (f)

 
2

 

121, 150

 

76,984

 
0.8%

 

 

 —

 
0.0%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

3,185,841

 
32.1%

 

$

94,547,870

 
39.4%

 

 

Footnotes on next page

 

 

 

 

March 31, 2020| Page 19

 

 

Picture 23

20 Largest Tenants with Annualized Rent and Remaining Term

 

Footnotes:

 

(a)    Annualized rent represents the monthly rent charged, including tenant reimbursements, for each lease in effect at March 31, 2020 multiplied by 12. Tenant reimbursements generally include payment of real estate taxes, operating expenses and common area maintenance and utility charges.  

(b)Includes 97,228 square feet, which expire in 2020,  and 36,913 square feet, which expire in 2021.  The remaining 125,000 square feet expire in 2030.

(c)Lease and rent commence on November 1, 2020.

(d)  Includes 28,550 square feet, which expire in 2023.  The remaining 85,650 square feet expire in 2030.       

(e)  Includes 98,695 square feet, which expire in 2021, and 10,943 square feet, which expire in 2024. 

(f)   Includes 27,478 square feet, which expire in 2030 and 49,506 square feet, which expire in 2032.  Rent commences in April and October 2020, respectively.    

 

March 31, 2020| Page 20

 

 

Picture 4

Leasing Activity

(Owned Portfolio)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year

 

Year

 

 

    

Three Months Ended

 

Ended

    

Ended

    

Leasing Activity (a)

 

 

31-Mar-20

 

 

31-Mar-19

 

 

31-Dec-19

 

 

31-Dec-18

 

(in Square Feet - SF)

 

 

 

 

 

 

 

 

 

 

 

 

 

New leasing

 

 

144,000

 

 

95,000

 

 

534,000

 

 

397,000

 

Renewals and expansions

 

 

136,000

 

 

365,000

 

 

883,000

 

 

1,284,000

 

 

 

 

280,000

 

 

460,000

 

 

1,417,000

 

 

1,681,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other information per SF

 

 

 

 

 

 

 

 

 

 

 

 

 

(Activity on a year-to-date basis)

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Rents on leasing

 

$

31.17

 

$

32.32

 

$

31.78

 

$

31.02

 

Weighted average lease term

 

 

6.3 Years

 

 

9.0 Years

 

 

8.3 Years

 

 

7.2 Years

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Increase or decrease over average GAAP rents in prior year (b)

 

 
10.5%

 

 
9.9%

 

 
10.9%

 

 
7.3%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average free rent

 

 

4 Months

 

 

3 Months

 

 

3 Months

 

 

4 Months

 

Tenant Improvements

 

$

22.13

 

$

28.76

 

$

34.44

 

$

29.13

 

Leasing Costs

 

$

7.80

 

$

13.41

 

$

13.51

 

$

8.99

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(a)  Leasing activity includes leasing at 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.

(b)  The increase or decrease percentage is calculated by comparing average GAAP rents at properties that had leasing activity in the current year to average GAAP rents at the same properties in the prior year. 

 

 

 

March 31, 2020| Page 21

 

 

Picture 28

Lease Expirations by Square Feet (a)

(Owned Portfolio)

 

 

Picture 10

 

 

(a)

Lease expirations include leases in 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.

 

 

March 31, 2020| Page 22

 

 

Picture 13

Lease Expirations with Annualized Rent per Square Foot

(Owned Portfolio)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rentable

 

 

 

 

Annualized

 

Percentage

 

 

 

 

Number of

 

Square

 

 

 

 

Rent

 

of Total

 

 

Year of

 

Leases

 

Footage

 

Annualized

 

Per Square

 

Annualized

 

 

Lease

 

Expiring

 

Subject to

 

Rent Under

 

Foot Under

 

Rent Under

 

 

Expiration

 

Within the

 

Expiring

 

Expiring

 

Expiring

 

Expiring

Cumulative

 

December 31,

    

Year (a)

    

Leases

    

Leases (b)

    

Leases

    

Leases

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2020

 

37

(c) 

355,633

 

$

11,685,526

 

$

32.86

 
4.9%
4.9%

 

2021

 

67

 

846,202

 

 

25,484,089

 

 

30.12

 
10.6%
15.5%

 

2022

 

79

 

1,193,848

 

 

39,663,258

 

 

33.22

 
16.5%
32.0%

 

2023

 

65

 

661,961

 

 

20,059,516

 

 

30.30

 
8.4%
40.4%

 

2024

 

62

 

863,983

 

 

25,877,579

 

 

29.95

 
10.8%
51.2%

 

2025

 

57

 

858,756

 

 

21,147,210

 

 

24.63

 
8.8%
60.0%

 

2026

 

25

 

909,107

 

 

29,594,860

 

 

32.55

 
12.3%
72.3%

 

2027

 

18

 

660,350

 

 

19,583,715

 

 

29.66

 
8.2%
80.5%

 

2028

 

13

 

378,390

 

 

9,189,593

 

 

24.29

 
3.8%
84.3%

 

2029

 

10

 

339,437

 

 

10,843,397

 

 

31.95

 
4.5%
88.8%

 

2030 and thereafter

 

72

 

1,279,750

(d) 

 

26,908,468

 

 

21.03

 
11.2%
100.0%

 

Leased total

 

505

 

8,347,417

 

$

240,037,211

 

$

28.76

 
100.0%

 

 

Vacancies as of 3/31/20

 

 

 

1,385,057

 

 

 

 

 

 

 

 

 

 

Redevelopment properties (e)

 

 

 

179,254

 

 

 

 

 

 

 

 

 

 

Total Portfolio Square Footage

 

 

 

9,911,728

 

 

 

 

 

 

 

 

 

 

 

(a)

The number of leases approximates the number of tenants. Tenants with lease maturities in different years are included in annual totals for each lease. Tenants may have multiple leases in the same year.  Includes annualized rent from 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. 

(b)

Annualized rent represents the monthly rent charged, including tenant reimbursements, for each lease in effect at March 31, 2020 multiplied by 12. Tenant reimbursements generally include payment of real estate taxes, operating expenses and common area maintenance and utility charges.

(c)

Includes 2 leases that are month-to-month.   

(d)

Includes 115,152 square feet that are non-revenue producing building amenities.

(e)

Redevelopment properties include properties being developed, redeveloped, or where redevelopment is complete, but are in lease-up and that are not stabilized. 

 

 

March 31, 2020| Page 23

 

 

Picture 12

Redevelopment Activity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(in 000's except square feet)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Estimated

 

Estimated

 

 

 

 

 

 

 

 

 

 

Incurred

 

Percent

 

Estimated

 

Leased

 

Occupied

 

 

 

 

 

 

Rentable

 

Anticipated

 

Through

 

Leased

 

Completion

 

Stabilization

 

Stabilization

Property Name

    

City

    

State

    

Square Feet

    

Investment (1)

    

31-Mar-20

    

31-Mar-20

    

Date

    

Date

    

Date

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Redevelopment Activity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Redevelopment in Process

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Forest Park (2)

 

Charlotte

 

NC

 

62,212

 

$

5,165

 

$

983

 
35.6%

 

30-Jun-20

 

31-Dec-20

 

1-Apr-21

Blue Lagoon Drive (3)

 

Miami

 

FL

 

213,182

 

 

39,614

 

 

10,972

 
73.1%

 

31-Dec-20

 

31-Dec-20

 

1-May-21

Total Office in Process

 

 

 

 

 

275,394

 

 

44,779

 

 

11,955

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Redevelopment Complete But Not Stabilized

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

801 Marquette Ave (4)

 

Minneapolis

 

MN

 

129,821

 

$

29,593

 

$

23,020

 
37.0%

 

30-Jun-17

 

31-Dec-20

 

1-Jun-21

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

 

 

405,215

 

$

74,372

 

$

34,975

 

 

 

 

 

 

 

 

 

(1)

Anticipated Investment includes capitalized redevelopment costs, capitalized interest and lease-up costs.

(2)

Leased square feet was 22,134 as of March 31, 2020. 

(3)

Leased square feet was 155,808 as of March 31, 2020. 

(4)

Leased square feet was 48,019 as of March 31, 2020.    

 

 

 

March 31, 2020| Page 24

 

 

Picture 14

Capital Expenditures

 

 

 

 

 

 

(in thousands)

 

 

 

 

For the Three Months Ended

 

    

31-Mar-20

 

 

 

 

Tenant improvements

 

$

10,716

Deferred leasing costs

 

 

2,730

Non-investment capex

 

 

4,527

Total Capital Expenditures

 

$

17,973

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

Total Capital Expenditures

 

$

14,970

 

$

17,884

 

$

13,144

 

$

25,342

 

$

71,340

 

First generation leasing and investment capital was  $3.6 million for three months ended March 31, 2020 and $18.1 million for the year ended December 31, 2019.  

 

 

March 31, 2020| Page 25

 

 

Picture 15

Transaction Activity

(in thousands except for Square Feet)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Recent Acquisitions:

    

City

    

State

    

Square Feet

    

Date Acquired

    

Purchase Price

 

2016

 

 

 

 

 

 

 

 

 

 

 

 

Plaza Seven

 

Minneapolis

 

MN

 

325,796

 

6/6/16

 

$

82,000

 

Pershing Plaza

 

Atlanta

 

GA

 

160,145

 

8/10/16

 

 

45,450

 

600 17th Street

 

Denver

 

CO

 

613,527

 

12/1/16

 

 

154,260

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2015

 

 

 

 

 

 

 

 

 

 

 

 

Two Ravinia

 

Atlanta

 

GA

 

442,130

 

4/8/15

 

$

78,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Recent Dispositions:

 

 

 

 

 

 

 

 

 

Gross Sale

 

Gain (loss)

 

 

    

City

    

State

    

Square Feet

    

Date Sold

    

Proceeds

    

on Sale

 

2017

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hillview

 

Milpitas

 

CA

 

36,288

 

1/6/17

 

$

6,342

 

$

2,289

 

East Baltimore

 

Baltimore

 

MD

 

325,445

 

10/20/17

 

 

32,547

 

 

(20,770)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lakeside I

 

Maryland Heights

 

MO

 

127,778

 

4/5/16

 

$

20,189

 

$

4,154

 

Federal Way

 

Federal Way

 

WA

 

117,010

 

12/16/16

 

 

7,500

 

 

(7,092)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Willow Bend

 

Plano

 

TX

 

117,050

 

2/23/15

 

$

20,750

 

$

1,462

 

Eden Bluff

 

Eden Prairie

 

MN

 

153,028

 

3/31/15

 

 

28,000

 

 

9,000

 

Park Seneca

 

Charlotte

 

NC

 

109,699

 

5/13/15

 

 

8,150

 

 

949

 

Montague

 

San Jose

 

CA

 

145,561

 

12/9/15

 

 

30,250

 

 

12,251

 

 

 

March 31, 2020| Page 26

 

 

Picture 16

Loan Portfolio of Secured Real Estate

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(dollars in thousands, except footnotes)

 

 

 

 

 

Maximum

 

Amount

 

Interest

 

 

 

 

 

Maturity

 

Amount

 

Outstanding

 

Rate at

 

Sponsored REIT

    

Location

    

Date

    

of Loan

    

31-Mar-20

    

31-Mar-20

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage loan secured by property

 

 

 

 

 

 

 

 

 

 

 

 

 

FSP Monument Circle LLC (1)

 

Indianapolis, IN

 

6-Dec-20

 

 

21,000

 

 

21,000

 
7.19%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

$

21,000

 

$

21,000

 

 

 

 

(1)

Includes an origination fee of $164,000 and an exit fee of $38,000 when repaid by the borrower.    

 

 

March 31, 2020| Page 27

 

 

Picture 18

Net Asset Value Components

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(in thousands except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of

 

 

Assets:

 

 

 

 

 

Other information:

 

 

 

 

    

31-Mar-20

 

    

Loans outstanding on secured RE

    

$

21,000

 

    

Leased SF to be FFO producing

    

 

 

Total Market Capitalization Values

 

 

 

 

 

Investments in SARs (book basis)

 

 

 —

 

 

In 2020 (in 000's)

 

 

388

Shares outstanding

 

 

107,269.2

 

 

Straight-line rent receivable

 

 

68,317

 

 

 

 

 

 

Closing price

 

$

5.73

 

 

Asset held for sale

 

 

 —

 

 

Straight-line rental revenue current quarter

 

$

966

Market capitalization

 

$

614,653

 

 

Cash, cash equivalents and restricted cash

 

 

17,283

 

 

 

 

 

 

Debt

 

 

1,000,000

 

 

Tenant rent receivables

 

 

3,609

 

 

Management fee income current quarter

 

$

21

Total Market Capitalization

 

$

1,614,653

 

 

Prepaid expenses

 

 

3,466

 

 

Interest income from secured loans

 

 

382

 

 

 

 

 

 

Office computers and furniture

 

 

215

 

 

Management fees and interest income from loans

 

$

403

 

 

 

 

 

 

Other assets:

 

 

 

 

 

 

 

 

 

 

 

3 Months

 

 

Deferred financing costs, net

 

 

7,124

 

 

 

 

 

 

 

 

Ended

 

 

Other assets: Derivative Market Value

 

 

 —

 

 

 

 

 

 

NOI Components

 

31-Mar-20

 

 

Other assets - Right-to-Use Asset

 

 

1,717

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

122,731

 

 

 

 

 

 

Same Store NOI (1)

 

$

32,902

 

 

 

 

 

 

 

 

 

 

 

 

Acquisitions (1) (2)

 

 

 —

 

 

Liabilities:

 

 

 

 

 

Footnotes to the components

 

 

 

Property NOI (1)

 

 

32,902

 

 

Debt (excluding contra for unamortized financing costs)

 

$

1,000,000

 

 

 

 

 

 

Full quarter adjustment (3)

 

 

 —

 

 

Accounts payable & accrued expenses

 

 

58,411

 

 

(1) See pages 11 & 30 for definitions and reconciliations.

Stabilized portfolio

 

$

32,902

 

 

Tenant security deposits

 

 

9,615

 

 

 

 

 

 

 

 

 

Other liabilities: lease liability

 

 

1,803

 

 

(2) Includes NOI from acquisitions not in Same Store.

 

 

 

 

 

 

Other liabilities: derivative liability

 

 

23,035

 

 

 

Financial Statement Reconciliation:

 

 

 

 

 

 

 

$

1,092,864

 

 

(3) Adjustment to reflect property NOI for a full quarter in the quarter acquired, if necessary.

Rental Revenue

 

$

62,567

 

 

 

 

 

 

 

 

 

Rental operating expenses

 

 

(17,298)

 

 

 

 

 

 

 

 

(4) HB3 Tax in Texas is classified as an income tax, though we treat it as a real estate tax in Property NOI.

Real estate taxes and insurance

 

 

(11,762)

 

 

 

 

 

 

 

 

 

NOI from dispositions & redevelopment properties

 

 

28

 

 

 

 

 

 

 

 

(5) Management & other fees are eliminated in consolidation but included in Property NOI.

Taxes (4)

 

 

(68)

 

 

 

 

 

 

 

 

 

Management & other fees (5)

 

 

(565)

 

 

 

 

 

 

 

 

 

Property NOI (1)

 

$

32,902

 

 

 

 

 

 

 

 

 

 

 

 

 

 

March 31, 2020| Page 28

 

 

Picture 26

Appendix: Non-GAAP Financial Measure Definitions

 

 

Definition of 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 definition as of May 17, 2016 in the table on page 9 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.

 

 

 

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Appendix: Non-GAAP Financial Measure Definitions

 

 

Definition of Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA)
and Adjusted EBITDA

 

EBITDA is defined as net income or loss plus interest expense, income tax expense and depreciation and amortization expense. Adjusted EBITDA is defined as EBITDA excluding hedge ineffectiveness, gains and losses on sales of properties or shares of equity investments or provisions for losses on assets held for sale or equity investments. EBITDA and Adjusted EBITDA are not intended to represent cash flow for the period, are not presented as an alternative to operating income as an indicator of operating performance, should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP and are not indicative of operating income or cash provided by operating activities as determined under GAAP. EBITDA and Adjusted EBITDA are presented solely as a supplemental disclosure with respect to liquidity because the Company believes it provides useful information regarding the Company's ability to service or incur debt. Because all companies do not calculate EBITDA or Adjusted EBITDA the same way, this presentation may not be comparable to similarly titled measures of other companies. The Company believes that net income or loss is the financial measure calculated and presented in accordance with GAAP that is most directly comparable to EBITDA and Adjusted EBITDA.

 

Definition of Property Net Operating Income (Property 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 Same Store. The comparative Same Store results include properties held for the periods presented and exclude properties that are redevelopment properties, dispositions and significant nonrecurring income such as bankruptcy settlements and lease termination fees.  We define redevelopment properties as properties being developed, redeveloped or where redevelopment is complete, but are in lease-up and that are not stabilized.  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.

 

 

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Appendix: Non-GAAP Financial Measure Definitions

 

 

 

 

Definition of 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 for 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. 

 

 

 

 

 

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