EX-99.2 3 fsp-20230502xex99d2.htm EX-99.2

Exhibit 99.2 

Graphic

Franklin Street Properties Corp.

Supplemental Operating & Financial Data

401 Edgewater Place ~Wakefield, MA 01880

781.557.1300.~ www.fspreit.com


Graphic

First Quarter 2023
Table of Contents

Page

Page

Company Information

3

Tenant Analysis and Leasing Activity

Tenants by Industry

17

Key Financial Data

20 Largest Tenants with Annualized Rent and Remaining Term

18-19

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

Reconciliation

Disposition Activity

24

FFO & AFFO

9

EBITDA

10

Loan Portfolio of Secured Real Estate

25

Property NOI

11

Net Asset Value Components

26

Debt Summary

12

Appendix: Non-GAAP Financial Measures Definitions

Capital Analysis

13

FFO

27

EBITDA and NOI

28

Owned and Consolidated Portfolio Overview

14-16

AFFO

29

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 geopolitical events, increasing  inflation, the COVID-19 pandemic and other potential infectious disease outbreaks and terrorist attacks or other acts of violence, which may negatively affect the markets in which we and our tenants operate, increasing interest rates, disruptions in the debt markets, economic conditions in the markets in which we own properties, risks of a lessening of demand for the types of real estate owned by us, adverse changes in energy prices, which if sustained, could negatively impact occupancy and rental rates in the markets in which we own properties, including energy-influenced markets such as Dallas, Denver and Houston, any inability to dispose of properties on acceptable terms and any delays in the timing of any such anticipated dispositions, changes in government regulations and regulatory uncertainty, uncertainty about governmental fiscal policy 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.

Graphic

1999 Broadway, Denver, CO

March 31, 2023| Page 2


Graphic

Company Information

Overview

Snapshot (as of March 31, 2023)

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

Owned & Consolidated Properties

21

Total Square Feet

6.3 Million

Trading Symbol

FSP

Exchange

NYSE American

Common Shares Outstanding

103,235,914

Our Business

Total Market Capitalization

$0.6 Billion (1)

As of March 31, 2023, the Company owned a portfolio of real estate consisting of 20 owned  properties and one consolidated Sponsored REIT.  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, for geographic, property specific reasons or for other general corporate purposes.

Insider Holdings

6.06%

Graphic

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

600 17th Street, Denver, CO

Inquiries

Inquiries should be directed to: Georgia Touma

877.686.9496 or InvestorRelations@fspreit.com

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

outstanding.

March 31, 2023| Page 3


Graphic

Summary of Financial Highlights

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

    

31-Mar-23

    

31-Dec-22

    

30-Sep-22

    

30-Jun-22

    

31-Mar-22

Income Items:

Rental revenue

$

37,767

$

40,745

$

40,366

$

40,831

$

41,797

Total revenue

37,767

41,211

40,836

41,304

42,264

Net income (loss)

2,406

(2,884)

17,246

(9,110)

(4,158)

Adjusted EBITDA*

14,269

16,112

15,250

15,891

16,918

FFO*

8,407

10,463

9,041

10,257

11,582

AFFO*

1,810

(8,681)

(9,735)

(4,072)

918

Per Share Data:

EPS

$

0.02

$

(0.03)

$

0.17

$

(0.09)

$

(0.04)

FFO*

$

0.08

$

0.10

$

0.09

$

0.10

$

0.11

AFFO*

$

0.02

$

(0.08)

$

(0.09)

$

(0.04)

$

0.01

Weighted Average Shares (diluted)

103,236

103,236

103,236

103,193

103,691

Closing share price

$

1.57

$

2.73

$

2.63

$

4.17

$

5.90

Dividend declared

$

0.01

$

0.01

$

0.01

$

0.09

$

0.09

Balance Sheet Items:

Real estate, net

$

1,095,915

$

1,103,248

$

1,118,983

$

1,186,157

$

1,187,348

Other assets, net

117,767

138,418

143,087

145,562

149,772

Total assets, net

1,213,682

1,241,666

1,262,070

1,331,719

1,337,120

Total liabilities, net

444,387

472,930

489,509

577,687

567,234

Shareholders' equity

769,295

768,736

772,561

754,032

769,886

Market Capitalization and Debt:

Total Market Capitalization (a)

$

562,080

$

694,834

$

701,510

$

960,494

$

1,123,596

Total debt outstanding (excluding unamortized financing costs)

$

400,000

$

413,000

$

430,000

$

530,000

$

515,000

Debt to Total Market Capitalization

71.2%

59.4%

61.3%

55.2%

45.8%

Net Debt to Adjusted EBITDA ratio*

6.8

6.3

6.9

8.3

7.4

Owned Properties Leasing Statistics (b):

Owned properties assets

20

21

22

24

24

Owned properties total SF

6,049,466

6,239,530

6,433,954

6,915,715

6,915,609

Owned properties % leased

73.9%

75.6%

75.9%

76.3%

77.3%


(a)Total Market Capitalization is the closing share price multiplied by the number of shares outstanding plus total debt outstanding on that date.
(b)Excludes one property known as Monument Circle that was consolidated in our financial statements effective January 1, 2023. Please see the note: Consolidation of Sponsored REIT on page 25 for more information.

*

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

March 31, 2023| Page 4


Graphic

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-23

31-Mar-22

30-Jun-22

30-Sep-22

31-Dec-22

31-Dec-22

Revenue:

Rental

  

$

37,767

  

  

  

$

41,797

  

$

40,831

  

$

40,366

  

$

40,745

  

$

163,739

Related party revenue:

Management fees and interest income from loans

460

467

466

462

1,855

Other

7

6

4

4

21

Total revenue

37,767

42,264

41,304

40,836

41,211

165,615

Expenses:

Real estate operating expenses

12,690

12,834

12,344

13,369

14,273

52,820

Real estate taxes and insurance

6,973

8,719

9,043

8,951

7,907

34,620

Depreciation and amortization

14,727

15,670

18,186

15,148

14,804

63,808

General and administrative

3,817

3,784

3,981

3,232

2,888

13,885

Interest

5,806

5,366

5,664

6,110

5,668

22,808

Total expenses

44,013

46,373

49,218

46,810

45,540

187,941

Loss on extinguishment of debt

(67)

(78)

(78)

Gain on consolidation of Sponsored REIT

394

Impairment and loan loss reserve

(1,140)

(717)

(2,380)

(4,237)

Gain on sale of properties, net

8,392

24,077

3,862

27,939

Income (loss) before taxes on income

2,473

(4,109)

(9,054)

17,308

(2,847)

1,298

Tax expense on income

67

49

56

62

37

204

Net income (loss)

$

2,406

$

(4,158)

$

(9,110)

$

17,246

$

(2,884)

$

1,094

Weighted average number of shares outstanding, basic and diluted

103,236

103,691

103,193

103,236

103,236

103,338

Net income (loss) per share, basic and diluted

$

0.02

$

(0.04)

$

(0.09)

$

0.17

$

(0.03)

$

0.01

March 31, 2023| Page 5


$ in thousands, except per share amounts)

Graphic

Condensed Consolidated Balance Sheets

(in thousands)

March 31,

March 31,

June 30,

September 30,

December 31,

    

2023

  

  

2022

2022

    

2022

    

2022

 

Assets:

Real estate assets:

Land

$

130,147

$

146,844

$

146,844

$

131,556

$

126,645

Buildings and improvements

1,367,629

1,465,312

1,477,913

1,397,303

1,388,869

Fixtures and equipment

11,411

11,819

12,192

10,656

11,151

1,509,187

1,623,975

1,636,949

1,539,515

1,526,665

Less accumulated depreciation

413,272

436,627

450,792

420,532

423,417

Real estate assets, net

1,095,915

1,187,348

1,186,157

1,118,983

1,103,248

Acquired real estate leases, net

9,620

13,453

12,373

11,177

10,186

Cash, cash equivalents and restricted cash

13,110

10,983

4,693

8,717

6,632

Tenant rent receivables, net

3,306

2,041

2,627

1,309

2,201

Straight-line rent receivable, net

51,703

51,309

54,354

50,885

52,739

Prepaid expenses and other assets

6,125

7,403

6,863

6,961

6,676

Related party mortgage loan receivable, less allowance for credit loss

24,000

22,860

22,143

19,763

Other assets: derivative asset

1,951

4,266

4,358

Office computers and furniture, net of accumulated depreciation

145

204

187

170

154

Deferred leasing commissions, net

33,758

40,379

39,654

37,459

35,709

Total assets

$

1,213,682

$

1,337,120

$

1,331,719

$

1,262,070

$

1,241,666

Liabilities and Stockholders’ Equity:

Liabilities:

Bank note payable

$

75,000

$

40,000

$

55,000

$

65,000

$

48,000

Term loan payable, net of unamortized financing costs

124,365

274,402

274,518

164,692

164,750

Series A & Series B Senior Notes

199,547

199,383

199,424

199,465

199,506

Accounts payable and accrued expenses

37,720

44,700

39,315

50,371

50,366

Accrued compensation

1,189

1,206

2,252

3,159

3,644

Tenant security deposits

5,740

5,837

5,819

5,726

5,710

Lease liability

655

1,061

962

862

759

Other liabilities: derivative liabilities

195

Acquired unfavorable real estate leases, net

171

450

397

234

195

Total liabilities

444,387

567,234

577,687

489,509

472,930

Commitments and contingencies

Stockholders’ Equity:

Preferred stock

Common stock

10

10

10

10

10

Additional paid-in capital

1,334,776

1,334,383

1,334,776

1,334,776

1,334,776

Accumulated other comprehensive (income) loss

3,544

(195)

1,951

4,266

4,358

Accumulated distributions in excess of accumulated earnings

(569,035)

(564,312)

(582,705)

(566,491)

(570,408)

Total stockholders’ equity

769,295

769,886

754,032

772,561

768,736

Total liabilities and stockholders’ equity

$

1,213,682

$

1,337,120

$

1,331,719

$

1,262,070

$

1,241,666

March 31, 2023| Page 6


Graphic

Condensed Consolidated Statements of Cash Flows

(in thousands)

Three Months Ended March 31,

2023

2022

Cash flows from operating activities:

Net income (loss)

$

2,406

$

(4,158)

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

Depreciation and amortization expense

15,316

16,195

Amortization of above and below market leases

(18)

(9)

Amortization of other comprehensive income into interest expense

(662)

Loss on extinguishment of debt

67

Gain on consolidation of Sponsored REIT

(394)

Gain on sale of properties, net

(8,392)

Changes in operating assets and liabilities:

Tenant rent receivables

(1,105)

(87)

Straight-line rents

(332)

(1,216)

Lease acquisition costs

(818)

(1,069)

Prepaid expenses and other assets

(513)

(1,274)

Accounts payable and accrued expenses

(3,317)

(10,568)

Accrued compensation

(2,455)

(3,498)

Tenant security deposits

30

(382)

Payment of deferred leasing commissions

(908)

(3,706)

Net cash used in operating activities

(1,095)

(9,772)

Cash flows from investing activities:

Property improvements, fixtures and equipment

(11,420)

(9,952)

Consolidation of Sponsored REIT

3,048

Proceeds received from sales of properties

28,098

Net cash provided by (used in) investing activities

19,726

(9,952)

Cash flows from financing activities:

Distributions to stockholders

(1,033)

(42,640)

Stock repurchases

(4,843)

Proceeds received from termination of interest rate swap

4,206

Borrowings under bank note payable

57,000

45,000

Repayments of bank note payable

(30,000)

(5,000)

Repayment of term loan payable

(40,000)

Deferred financing costs

(2,326)

(2,561)

Net cash used in financing activities

(12,153)

(10,044)

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

6,478

(29,768)

Cash, cash equivalents and restricted cash, beginning of period

6,632

40,751

Cash, cash equivalents and restricted cash, end of period

$

13,110

$

10,983

March 31, 2023| Page 7


Graphic

Property Net Operating Income (NOI)* with

Same Store Comparison (in thousands)

Rentable

 

Square Feet

Three Months Ended

Three Months Ended

Year Ended

Inc

%

 

(in thousands)

    

or RSF

   

31-Mar-23

   

   

31-Mar-22

   

30-Jun-22

   

30-Sep-22

31-Dec-22

   

31-Dec-22

   

(Dec)

   

Change

 

Region

East

 

362

 

$

478

 

 

$

497

 

$

474

 

$

392

$

526

 

$

1,889

 

$

(19)

 

(3.8)

%

MidWest

 

758

 

2,239

 

2,478

 

3,038

 

2,486

 

2,406

 

10,408

 

(239)

 

(9.6)

%

South

 

2,797

 

7,933

 

5,817

 

5,611

 

5,902

 

7,896

 

25,226

 

2,116

 

36.4

%

West

 

2,132

 

6,422

 

8,070

 

6,609

 

6,401

 

6,028

 

27,108

 

(1,648)

 

(20.4)

%

Property NOI* from Owned Properties

 

6,049

 

17,072

 

16,862

 

15,732

 

15,181

 

16,856

 

64,631

 

210

 

1.2

%

Disposition and Acquisition Properties (a)

214

 

668

 

2,719

 

3,386

2,487

1,359

 

9,951

 

(2,051)

 

(10.6)

%

Property NOI*

6,263

 

$

17,740

 

 

$

19,581

 

$

19,118

 

$

17,668

$

18,215

 

$

74,582

 

$

(1,841)

 

(9.4)

%

 

Same Store

 

$

17,072

 

 

$

16,862

 

$

15,732

 

$

15,181

$

16,856

 

$

64,631

 

$

210

 

1.2

%

Less Nonrecurring

Items in NOI* (b)

 

1,292

 

273

 

1,258

494

818

 

2,843

 

1,019

 

(6.1)

%

Comparative

Same Store

 

$

15,780

 

 

$

16,589

 

$

14,474

 

$

14,687

$

16,038

 

$

61,788

 

$

(809)

 

(4.9)

%


(a)We define Disposition and Acquisition Properties as properties that were sold or acquired or consolidated and do not have operating activity for all periods presented.
(b)Nonrecurring items in NOI include proceeds from bankruptcies, lease termination fees or other significant nonrecurring income or expenses, which may affect comparability.

*

See Appendix for Non-GAAP Financial Measures Definitions beginning on page 27.

March 31, 2023| Page 8


Graphic

FFO* & AFFO* Reconciliation

(in thousands, except per share amounts)

Year

Three Months Ended

Three Months Ended

Ended

    

31-Mar-23

    

 

 

31-Mar-22

    

30-Jun-22

    

30-Sep-22

    

31-Dec-22

    

31-Dec-22

 

Net income (loss)

$

2,406

$

(4,158)

$

(9,110)

$

17,246

$

(2,884)

$

1,094

Gain on consolidation of Sponsored REIT

(394)

Impairment and loan loss reserve

1,140

717

2,380

4,237

Gain on sale of properties, net

(8,392)

(24,077)

(3,862)

(27,939)

Depreciation & amortization

14,709

15,661

18,141

15,114

14,773

63,689

NAREIT FFO*

8,329

11,503

10,171

9,000

10,407

41,081

Lease Acquisition costs

78

79

86

41

56

262

Funds From Operations (FFO)*

$

8,407

$

11,582

$

10,257

$

9,041

$

10,463

$

41,343

Adjusted Funds From Operations (AFFO)*

Funds From Operations (FFO)*

$

8,407

$

11,582

$

10,257

$

9,041

$

10,463

$

41,343

Loss on extinguishment of debt

67

78

78

Amortization of deferred financing costs

589

526

481

461

421

1,889

Shares issued as compensation

394

394

Straight-line rent

(331)

(1,216)

(1,688)

(1,160)

(1,831)

(5,895)

Tenant improvements

(3,047)

(1,877)

(5,453)

(6,813)

(7,508)

(21,651)

Leasing commissions

(908)

(3,032)

(1,327)

(2,053)

(1,152)

(7,564)

Non-investment capex

(2,967)

(5,065)

(6,736)

(9,289)

(9,074)

(30,164)

Adjusted Funds From Operations (AFFO)*

$

1,810

$

918

$

(4,072)

$

(9,735)

$

(8,681)

$

(21,570)

Per Share Data:

EPS

$

0.02

$

(0.04)

$

(0.09)

$

0.17

$

(0.03)

$

0.01

FFO*

0.08

0.11

0.10

0.09

0.10

0.40

AFFO*

0.02

0.01

(0.04)

(0.09)

(0.08)

(0.21)

Weighted Average Shares (basic and diluted)

103,236

103,691

103,193

103,236

103,236

103,338


*

See Appendix for Non-GAAP Financial Measures Definitions beginning on page 27.

March 31, 2023| Page 9


Graphic

EBITDA* & Adjusted EBITDA* Reconciliation

(in thousands, except ratio amounts)

Year

Three Months Ended

Three Months Ended

Ended

    

31-Mar-23

    

31-Mar-22

    

30-Jun-22

    

30-Sep-22

    

31-Dec-22

    

31-Dec-22

 

 

Net income (loss)

$

2,406

$

(4,158)

$

(9,110)

$

17,246

$

(2,884)

$

1,094

Interest expense

5,806

5,366

5,664

6,110

5,668

22,808

Depreciation and amortization

14,709

15,661

18,141

15,114

14,773

63,689

Income taxes

67

49

56

62

37

204

EBITDA*

$

22,988

$

16,918

$

14,751

$

38,532

$

17,594

$

87,795

Loss on extinguishment of debt

67

78

78

Gain on consolidation of Sponsored REIT

(394)

Impairment and loan loss reserve

1,140

717

2,380

4,237

Gain on sale of properties, net

(8,392)

(24,077)

(3,862)

(27,939)

Adjusted EBITDA*

$

14,269

$

16,918

$

15,891

$

15,250

$

16,112

$

64,171

Interest expense

$

5,806

$

5,366

$

5,664

$

6,110

$

5,668

$

22,808

Scheduled principal payments

Interest and scheduled principal payments

$

5,806

$

5,366

$

5,664

$

6,110

$

5,668

$

22,808

Interest coverage ratio

2.46

3.15

2.81

2.50

2.84

2.81

Debt service coverage ratio

2.46

3.15

2.81

2.50

2.84

2.81

Debt excluding unamortized financing costs

$

400,000

$

515,000

$

530,000

$

430,000

$

413,000

Cash, cash equivalents and restricted cash

13,110

10,983

4,693

8,717

6,632

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

$

386,890

$

504,017

$

525,307

$

421,283

$

406,368

Adjusted EBITDA*

$

14,269

$

16,918

$

15,891

$

15,250

$

16,112

Annualized

$

57,076

$

67,672

$

63,564

$

61,000

$

64,448

Net Debt-to-Adjusted EBITDA ratio*

6.8

7.4

8.3

6.9

6.3


*

See Appendix for Non-GAAP Financial Measures Definitions beginning on page 27.

March 31, 2023| Page 10


Graphic

Reconciliation of Net Income (Loss) to Property NOI*

(in thousands)

Year

Three Months Ended

Three Months Ended

Ended

    

31-Mar-23

    

    

31-Mar-22

    

30-Jun-22

    

30-Sep-22

    

31-Dec-22

    

31-Dec-22

 

Net income (loss)

$

2,406

$

(4,158)

$

(9,110)

$

17,246

$

(2,884)

$

1,094

Add (deduct):

Loss on extinguishment of debt

67

78

78

Gain on consolidation of Sponsored REIT

(394)

Impairment and loan loss reserve

1,140

717

2,380

4,237

Gain on sale of properties, net

(8,392)

(24,077)

(3,862)

(27,939)

Management fee income

(374)

(291)

(267)

(274)

(295)

(1,127)

Depreciation and amortization

14,727

15,670

18,185

15,148

14,805

63,808

Amortization of above/below market leases

(18)

(9)

(45)

(34)

(30)

(118)

General and administrative

3,817

3,784

3,981

3,233

2,888

13,886

Interest expense

5,806

5,366

5,664

6,110

5,668

22,808

Interest income

(451)

(455)

(461)

(460)

(1,827)

Non-property specific items, net

95

(330)

25

(18)

5

(318)

Property NOI*

$

17,740

$

19,581

$

19,118

$

17,668

$

18,215

$

74,582


*

See Appendix for Non-GAAP Financial Measures Definitions beginning on page 27.

March 31, 2023| Page 11


Graphic

Debt Summary

(in thousands)

Maximum

Amount

Interest

Interest

Maturity

Amount

Drawn at

Rate (a)

Rate at

Facility

    

Date

    

of Loan

    

31-Mar-23

    

Components

    

31-Mar-23

    

Fee

 

BofA Revolver

1-Oct-24

$

150,000

$

75,000

SOFR

 + 

3.00%

7.92%

0.35%

BMO Term Loan Tranche B

1-Oct-24

125,000

125,000

SOFR

 + 

3.00%

7.91%

Series A Senior Notes

20-Dec-24

116,000

116,000

4.49%

Series B Senior Notes

20-Dec-27

84,000

84,000

4.76%

$

475,000

$

400,000

6.26%

The table above is a summary of our debt as of March 31, 2023.  Additional information on our debt can be found in our Annual Report on Form 10-K for the year ended December 31, 2022, as updated in our Quarterly Reports on Form 10-Q, on file with the U.S. Securities and Exchange Commission.  
On February 8, 2023, we terminated all remaining interest rate swaps applicable to the BMO Term Loan and, on February 10, 2023, we received an aggregate of approximately $4.3 million as a result of such terminations.  
On February 10, 2023, we entered into an amendment to the credit agreement evidencing our $165 million BMO Term Loan.   On February 10, 2023, as part of the amendment to the BMO Term Loan, we repaid a $40 million portion of the BMO Term Loan, so that $125 million remains outstanding under the BMO Term Loan.  On or before April 1, 2024, we are required to repay an additional $25 million of the BMO Term Loan.  The amendment, among other items, extended the maturity date from January 31, 2024 to October 1, 2024, changed the interest rate from a number of basis points over LIBOR depending on our credit rating to 300 basis points over SOFR, and made certain changes to conditions and covenants.    
On February 10, 2023, we entered into an amendment to the credit agreement evidencing our BofA Revolver.  The amendment, among other items, extended the maturity date from January 12, 2024 to October 1, 2024, reduced availability from $237.5 million to $150 million, with further reductions to $125 million effective October 1, 2023 and to $100 million effective April 1, 2024, changed the interest rate from a number of basis points over SOFR depending on our credit rating to 300 basis points over SOFR, and made certain changes to conditions and covenants.  
As of March 31, 2023, the BofA Revolver was subject to a 35 basis point facility fee on the unused portion of the facility.          
We incurred financing costs, some of which are deferred and amortized into interest expense during the terms of the loans we execute.  

(a)Interest rates exclude amortization of deferred financing costs and facility fees, which is discussed in the notes above.

March 31, 2023| Page 12


Graphic

Capital Analysis

(in thousands, except per share amounts)

31-Mar-23

31-Mar-22

30-Jun-22

30-Sep-22

31-Dec-22

Market Data:

    

  

  

    

    

    

  

Shares Outstanding

103,236

103,152

103,236

103,236

103,236

Closing market price per share

$

1.57

$

5.90

$

4.17

$

2.63

$

2.73

Market capitalization

$

162,080

$

608,596

$

430,494

$

271,510

$

281,834

Total debt outstanding excluding unamortized financing costs

400,000

515,000

530,000

430,000

413,000

Total Market Capitalization

$

562,080

$

1,123,596

$

960,494

$

701,510

$

694,834

Dividend Data:

Total dividends declared for the quarter

$

1,033

$

9,360

$

9,284

$

1,032

$

1,032

Common dividend declared per share

$

0.01

$

0.09

$

0.09

$

0.01

$

0.01

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

43%

(224)%

(102)%

6%

(36)%

Declared dividend as a % of AFFO* per share

57%

1017%

(228)%

(11)%

(12)%

Liquidity:

Cash, cash equivalents and restricted cash

$

13,110

$

10,983

$

4,693

$

8,717

$

6,632

Revolver:

Gross potential available under the BofA Revolver

150,000

237,500

237,500

237,500

237,500

Less:

Outstanding balance

(75,000)

(40,000)

(55,000)

(65,000)

(48,000)

Total Liquidity

$

88,110

$

208,483

$

187,193

$

181,217

$

196,132


*

See page 9 for a reconciliation of Net Income (Loss) to AFFO and the Appendix for Non-GAAP Financial Measures Definitions beginning on page 27.

March 31, 2023| Page 13


Graphic

Owned & Consolidated Portfolio Overview

As of the Quarter Ended

    

31-Mar-23

31-Dec-22

30-Sep-22

30-Jun-22

31-Mar-22

 

Total Owned Properties:

Number of properties

20

21

22

24

24

Square feet

6,049,466

6,239,530

6,433,954

6,915,715

6,915,609

Leased percentage

73.9%

75.6%

75.9%

76.3%

77.3%

Consolidated Property - Single Asset REIT (SAR):

Number of properties

1

Square feet

213,760

Leased percentage

4.1%

Total Owned and Consolidated Properties:

Number of properties

21

21

22

24

24

Square feet

6,263,226

6,239,530

6,433,954

6,915,715

6,915,609

Leased percentage

71.5%

75.6%

75.9%

76.3%

77.3%

March 31, 2023| Page 14


Graphic

Owned & Consolidated 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)

 

Owned Properties:

East Region

Midwest Region

Richmond, VA

Minneapolis

Innsbrook

Glen Allen

VA

298,183

47.8%

47.8%

$

19.33

121 South 8th Street

Minneapolis

MN

298,121

84.5%

84.5%

$

25.06

801 Marquette Ave

Minneapolis

MN

129,691

91.8%

91.8%

24.35

Charlotte, NC

Plaza Seven

Minneapolis

MN

330,096

65.0%

71.6%

29.74

Forest Park

Charlotte

NC

64,198

78.4%

78.4%

23.43

Indianapolis, IN

Monument Circle (c)

Indianapolis

IN

213,760

4.1%

4.1%

31.97

East Region Total

362,381

53.2%

53.2%

$

20.40

Midwest Region Total

971,668

61.1%

63.4%

$

26.82


(a)Weighted Occupied Percentage for the three months ended March 31, 2023.
(b)Weighted Average GAAP Rent per Occupied Square Foot.
(c)Consolidated as of January 1, 2023, property held by Single Asset REIT (SAR).

March 31, 2023| Page 15


Graphic

Owned & Consolidated 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

209,461

49.0%

49.0%

$

29.05

1999 Broadway

Denver

CO

680,255

61.9%

65.0%

$

34.25

One Legacy Circle

Plano

TX

214,110

69.3%

63.7%

38.64

Greenwood Plaza

Englewood

CO

196,236

66.3%

66.3%

26.44

Addison Circle

Addison

TX

289,333

83.0%

83.0%

34.63

1001 17th Street

Denver

CO

644,785

70.8%

69.9%

37.92

Collins Crossing

Richardson

TX

300,887

97.1%

96.1%

26.38

600 17th Street

Denver

CO

611,163

80.5%

76.8%

34.96

Liberty Plaza

Addison

TX

217,841

72.9%

72.9%

24.08

West Region Total

2,132,439

70.3%

70.0%

$

34.90

Houston

Park Ten

Houston

TX

157,609

90.8%

72.0%

28.79

Total Owned & Consolidated Properties

6,263,226

71.5%

70.1%

$

31.06

Eldridge Green

Houston

TX

248,399

100.0%

100.0%

26.68

Park Ten Phase II

Houston

TX

156,746

95.0%

95.0%

29.13

Westchase I & II

Houston

TX

629,025

59.0%

58.6%

27.34

Miami-Ft. Lauderdale-West Palm Beach

Blue Lagoon Drive

Miami

FL

213,182

98.5%

73.6%

41.87

Atlanta

Pershing Plaza

Atlanta

GA

160,145

79.8%

79.8%

39.03

South Region Total

2,796,738

78.4%

74.8%

$

30.55


(a)Weighted Occupied Percentage for the three months ended ended March 31, 2023.
(b)Weighted Average GAAP Rent per Occupied Square Foot.

March 31, 2023| Page 16


Graphic

Tenants by Industry

(Owned and Consolidated Properties by Square Feet)

Graphic

March 31, 2023| Page 17


Graphic

20 Largest Tenants with Annualized Rent and Remaining Term

(Owned and Consolidated Properties)

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

CITGO Petroleum Corporation

1

120

248,399

4.0%

$

7,064,468

5.1%

2

EOG Resources, Inc.

1

45

169,167

2.7%

6,237,187

4.5%

3

US Government (b)

2

34, 94

168,573

2.7%

6,339,490

4.5%

4

Lennar Homes, LLC

1

168

155,808

2.5%

6,450,451

4.6%

5

Kaiser Foundation Health Plan

1

14

120,979

1.9%

3,971,812

2.8%

6

Argo Data Resource Corporation (c)

1

5, 89

114,200

1.8%

3,444,272

2.5%

7

Swift, Currie, McGhee & Hiers, LLP

1

126

101,296

1.6%

4,111,908

3.0%

8

Deluxe Corporation

1

172

98,922

1.6%

2,955,910

2.1%

9

Ping Identity Corp.

1

39

89,856

1.4%

3,673,313

2.6%

10

Permian Resources Operating, LLC

1

103

67,856

1.1%

2,876,416

2.1%

11

Bread Financial Payments, Inc.

1

39

67,274

1.1%

2,828,872

2.0%

12

PricewaterhouseCoopers LLP

1

70

66,304

1.1%

2,323,323

1.7%

13

Hall and Evans LLC

1

77

65,878

1.1%

2,516,081

1.8%

14

Cyxtera Management, Inc.

1

82

61,826

1.0%

2,404,413

1.7%

15

Precision Drilling (US) Corporation

1

62

59,569

1.0%

2,059,896

1.5%

16

Schwegman, Lundberg & Woessner, P.A. (d)

1

2, 58

58,263

0.9%

1,748,141

1.3%

17

EMC Corporation

1

18

57,100

0.9%

1,727,275

1.2%

18

ID Software, LLC

1

74

57,100

0.9%

1,687,605

1.2%

19

Olin Corporation

1

84

54,080

0.9%

1,684,592

1.2%

20

Unique Vacations (e)

1

130

53,119

0.8%

0.0%

Total

1,935,569

31.0%

$

66,105,425

47.4%


Footnotes on next page

March 31, 2023| Page 18


Graphic

20 Largest Tenants with Annualized Rent and Remaining Term

(Owned and Consolidated Properties)

Footnotes:

(a) Annualized rent represents the monthly rent charged, including tenant reimbursements, for each lease in effect at March 31, 2023 multiplied by 12. Tenant reimbursements generally include payment of real estate taxes, operating expenses and common area maintenance and utility charges.

(b) Includes 43,573 square feet expiring in 2026. The remaining 125,000 square feet expire in 2031.

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

(d) Includes 11,994 square feet expiring in 2023. The remaining 46,269 square feet expire in 2028.

(e) Lease commences on June 1, 2023 and rent commences on April 1, 2024.

March 31, 2023| Page 19


Graphic

Leasing Activity

(Owned and Consolidated Properties)

Year

Year

    

Three Months Ended

Ended

    

Ended

 

Leasing Activity

31-Mar-23

31-Mar-22

31-Dec-22

31-Dec-21

(in Square Feet - SF)

New leasing

48,000

103,000

275,000

370,000

Renewals and expansions

81,000

28,000

160,000

665,000

129,000

131,000

435,000

1,035,000

Other information per SF

(Activity on a year-to-date basis)

GAAP Rents on leasing

$

32.87

$

33.35

$

33.27

30.86

Weighted average lease term

6.1 Years

8.6 Years

6.4 Years

7.7 Years

Increase over average GAAP rents in prior year (a)

5.7%

2.4%

10.6%

2.5%

Average free rent

5 Months

8 Months

6 Months

7 Months

Tenant Improvements

$

28.53

$

52.16

$

31.86

25.89

Leasing Costs

$

9.71

$

18.10

$

11.80

11.45

(a)  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, 2023| Page 20


Graphic

Lease Expirations by Square Feet

(Owned and Consolidated Properties)

Graphic

March 31, 2023| Page 21


Graphic

Lease Expirations with Annualized Rent per Square Foot (SF)

(Owned and Consolidated Properties)

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 (e)

    

Leases (b)

    

Leases

    

Leases

Total

 

2023

31

(c)

256,233

$

7,825,299

$

30.54

5.6%

5.6%

2024

50

705,840

22,977,057

32.55

16.5%

22.1%

2025

55

436,447

14,482,960

33.18

10.4%

32.5%

2026

41

608,427

21,213,977

34.87

15.2%

47.7%

2027

22

321,740

9,726,005

30.23

7.0%

54.7%

2028

22

280,102

7,931,928

28.32

5.7%

60.4%

2029

16

350,900

10,408,862

29.66

7.5%

67.9%

2030

11

292,715

9,262,533

31.64

6.6%

74.5%

2031

8

271,904

10,028,022

36.88

7.2%

81.7%

2032

0.0%

81.7%

2033 and thereafter

51

953,042

(d)

25,587,065

26.85

18.3%

100.0%

Leased total

307

4,477,350

$

139,443,708

$

31.14

100.0%

Owned property vacant SF

1,580,831

Monument Circle vacant SF (e)

205,045

Total Portfolio Square Footage

6,263,226


(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.
(b)Annualized rent represents the monthly rent charged, including tenant reimbursements, for each lease in effect at March 31, 2023 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 66,666 square feet that are non-revenue producing building amenities.
(e)Includes one property known as Monument Circle that was consolidated in our financial statements effective January 1, 2023. Please see the note: Consolidation of Sponsored REIT on page 25 for more information.

March 31, 2023| Page 22


Graphic

Capital Expenditures

(Owned and Consolidated Properties)

(in thousands)

For the Three Months Ended

    

31-Mar-23

Tenant improvements

$

3,047

Deferred leasing costs

908

Non-investment capex

2,967

Total Capital Expenditures

$

6,922

For the Three Months Ended

Year Ended

    

31-Mar-22

    

30-Jun-22

    

30-Sep-22

    

31-Dec-22

    

31-Dec-22

Tenant improvements

$

1,877

$

5,453

$

6,813

$

7,508

$

21,651

Deferred leasing costs

3,032

1,327

2,053

1,152

7,564

Non-investment capex

5,065

6,736

9,289

9,074

30,164

Total Capital Expenditures

$

9,974

$

13,516

$

18,155

$

17,734

$

59,379


First generation leasing and investment capital was $0.3 million for the three months ended March 31, 2023 and $9.0 million for the year ended December 31, 2022.

March 31, 2023| Page 23


Graphic

Disposition Activity

(in thousands except for Square Feet)

Recent Dispositions:

Gross Sale

Gain (loss)

    

City

    

State

    

Square Feet

    

Date Sold

    

Proceeds

    

on Sale

 

2023

Northwest Point

Elk Grove

IL

177,095

3/10/23

$

29,125

$

8,392

2022

380 Interlocken

Broomfield

CO

240,359

8/31/22

$

42,000

$

5,665

390 Interlocken

Broomfield

CO

241,512

8/31/22

60,500

18,412

909 Davis

Evanston

IL

195,098

12/28/22

27,750

3,939

2021

One Ravinia

Atlanta

GA

386,602

5/27/21

$

74,879

$

29,075

Two Ravinia

Atlanta

GA

411,047

5/27/21

71,771

29

One Overton Park

Atlanta

GA

387,267

5/27/21

72,850

(6,336)

Loudoun Tech Center

Dulles

VA

136,658

6/29/21

17,250

(2,148)

River Crossing

Indianapolis

IN

205,729

8/31/21

35,050

(1,734)

Timberlake

Chesterfield

MO

234,496

9/23/21

44,667

6,184

Timberlake East

Chesterfield

MO

117,036

9/23/21

22,333

4,111

999 Peachtree

Atlanta

GA

621,946

10/22/21

223,900

86,766

Meadow Point

Chantilly

VA

138,537

11/16/21

25,500

1,878

Stonecroft

Chantilly

VA

111,469

11/16/21

14,500

(4,768)

2020

Emperor Boulevard

Durham

NC

259,531

12/23/20

$

89,700

$

41,928

March 31, 2023| Page 24


Graphic

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-23

    

31-Mar-23

 

Mortgage loan secured by property

FSP Monument Circle LLC (1)

Indianapolis, IN

30-Jun-23

$

24,000

$

24,000

7.51%

$

24,000

$

24,000


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

This mortgage loan secured by the property has been eliminated in consolidation, which is explained below.

Consolidation of Sponsored REIT 

As of January 1, 2023, we consolidated Monument Circle into our financial statements.  On October 29, 2021, we agreed to amend and restate our existing loan to Monument Circle that is secured by a mortgage on real estate owned by Monument Circle, which we refer to as the Sponsored REIT Loan.  The amended and restated Sponsored REIT Loan extended the maturity date from December 6, 2022 to June 30, 2023 (subject to further extension to September 30, 2023), increased the aggregate principal amount of the loan from $21 million to $24 million, and included certain other modifications.  In consideration of our agreement to amend and restate the Sponsored REIT Loan, we obtained from the stockholders of Monument Circle the right to vote their shares in favor of any sale of the property owned by Monument Circle any time on or after January 1, 2023.  As a result of our obtaining this right to vote shares, GAAP variable interest entity (VIE) rules required us to consolidate Monument Circle as of January 1, 2023.  A gain on consolidation of approximately $0.4 million was recognized in the three months ended March 31, 2023.

Additional information about the consolidation of Monument Circle can be found in Note 1, “Organization, Properties, Basis of Presentation, Financial Instruments, and Recent Accounting Standards – Variable Interest Entities (VIEs)” and Note 2, “Related Party Transactions and Investments in Non-Consolidated Entities - Management fees and interest income from loans”, in the Notes to Consolidated Financial Statements included in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2023

March 31, 2023| Page 25


Graphic

Net Asset Value Components

(in thousands except per share data)

As of

Assets:

Other information:

    

31-Mar-23

 

    

Loans outstanding on secured RE

    

$

 

    

Leased SF to be FFO producing

    

Total Market Capitalization Values

Investments in non-consolidated SARs (book basis)

during 2023 (in 000's)

136

Shares outstanding

103,235.9

Straight-line rent receivable

51,703

Closing price

$

1.57

Asset held for sale

Straight-line rental revenue current quarter

$

331

Market capitalization

$

162,080

Cash, cash equivalents and restricted cash

13,110

Debt

400,000

Tenant rent receivables

3,306

Management fee income current quarter

$

Total Market Capitalization

$

562,080

Prepaid expenses

2,894

Interest income from secured loans

Office computers and furniture

145

Management fees and interest income from loans

$

Other assets:

3 Months

Deferred financing costs, net

3,711

Ended

Other assets: Derivative Market Value

NOI Components

31-Mar-23

Other assets - Right-to-Use Asset

608

$

75,477

Same Store NOI (1)

$

17,072

Acquisitions (1) (2)

Liabilities:

Footnotes to the components

Property NOI (1)

17,072

Debt (excluding contra for unamortized financing costs)

$

400,000

Full quarter adjustment (3)

Accounts payable & accrued expenses

38,909

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

Stabilized portfolio

$

17,072

Tenant security deposits

5,740

Other liabilities: lease liability

655

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

Other liabilities: derivative liability

Financial Statement Reconciliation:

$

445,304

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

Rental Revenue

$

37,767

Rental operating expenses

(12,690)

(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

(6,973)

NOI from dispositions & acquisition properties

(668)

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

Taxes (4)

(67)

Management & other fees (5)

(297)

Property NOI (1)

$

17,072

March 31, 2023| Page 26


Graphic

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 mortgage loans, properties or investments in non-consolidated REITs, and after adjustments to exclude equity in income or losses from, and, to include the proportionate share of FFO from, non-consolidated REITs.  

FFO should not be considered as an alternative to net income or loss (determined in accordance with GAAP), nor as an indicator of the Company’s financial performance, nor as an alternative to cash flows from operating activities (determined in accordance with GAAP), nor as a measure of the Company’s liquidity, nor is it necessarily indicative of sufficient cash flow to fund all of the Company’s needs.

Other real estate companies and the National Association of Real Estate Investment Trusts, or NAREIT, may define this term in a different manner. We have included the NAREIT FFO 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.

March 31, 2023| Page 27


Graphic

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 or losses on extinguishment of debt, 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 extinguishment of debt, gains or losses on the sale of assets and excludes non-property specific income and expenses.  The information presented includes footnotes and the data is shown by region with properties owned in the periods presented, which we call Same Store. The comparative Same Store results include properties held for all periods presented.  We also exclude properties that have been acquired, consolidated or placed in service, but that do not have operating activity for all periods presented, dispositions and significant nonrecurring income such as bankruptcy settlements and lease termination fees.  NOI, as defined by the Company, may not be comparable to NOI reported by other REITs that define NOI differently. NOI should not be considered an alternative to net income or loss as an indication of our performance or to cash flows as a measure of the Company's liquidity or its ability to make distributions.

March 31, 2023| Page 28


Graphic

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 loss on extinguishment of debt that is non-cash, (3) excluding our proportionate share of FFO and including distributions received, from non-consolidated REITs, (4) excluding the effect of straight-line rent, (5) plus the amortization of deferred financing costs, (6) plus the value of shares issued as compensation and (7) less recurring capital expenditures that are generally for maintenance of properties, which we call non-investment capex or are second generation capital expenditures.  Second generation costs include re-tenanting space after a tenant vacates, which include tenant improvements and leasing commissions.  

We exclude development/redevelopment activities, capital expenditures planned at acquisition and costs to reposition a property. We also exclude first generation leasing costs, which are generally to fill vacant space in properties we acquire or were planned for at acquisition.  

AFFO should not be considered as an alternative to net income or loss (determined in accordance with GAAP), nor as an indicator of the Company’s financial performance, nor as an alternative to cash flows from operating activities (determined in accordance with GAAP), nor as a measure of the Company’s liquidity, nor is it necessarily indicative of sufficient cash flow to fund all of the Company’s needs.  Other real estate companies may define this term in a different manner.  We believe that in order to facilitate a clear understanding of the results of the Company, AFFO should be examined in connection with net income or loss and cash flows from operating, investing and financing activities in the consolidated financial statements.  

March 31, 2023| Page 29


Graphic

Investor Relations Contact

Georgia Touma ~ 877.686.9496

InvestorRelations@fspreit.com

Franklin Street Properties Corp.

Supplemental Operating & Financial Data

401 Edgewater Place ~Wakefield, MA 01880

781.557.1300 ~ www.fspreit.com

March 31, 2023| Page 30