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TABLE OF CONTENTS
INDEX TO FINANCIAL STATEMENTS

Table of Contents

As filed with the Securities and Exchange Commission on November 3, 2017.

Registration No. 333-220964


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549



Amendment No. 4 to
FORM S-11
FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933
OF SECURITIES OF CERTAIN REAL ESTATE COMPANIES



Workspace Property Trust
(Exact name of registrant as specified in governing instruments)



700 Dresher Road, Suite 150
Horsham, PA 19044
(215) 328-2700
(Address, including Zip Code, and Telephone Number, including Area Code, of Registrant's Principal Executive Offices)



Thomas A. Rizk
Chief Executive Officer
700 Dresher Road, Suite 150
Horsham, PA 19044
(215) 328-2700
(Name, Address, Including Zip Code and Telephone Number, Including Area Code, of Agent For Service)



Copies to:

John P. Napoli, Esq.
Blake Hornick, Esq.
Michael T. Dunn, Esq.
Seyfarth Shaw LLP
The New York Times Building
620 Eighth Avenue
New York, NY 10018
Phone: (212) 218-5500
Facsimile: (212) 218-5526

 

Michael W. Benjamin, Esq.
Lewis W. Kneib, Esq.
Julian Kleindorfer, Esq.
Latham & Watkins LLP
885 Third Avenue
New York, NY 10022-4834
Phone: (212) 906-1200
Facsimile: (212) 751-4864

 

Gilbert G. Menna, Esq.
Scott C. Chase, Esq.
Goodwin Procter LLP
The New York Times Building
620 Eighth Avenue
New York, NY 10018
Phone: (212) 813-8800
Facsimile: (212) 355-3333



Approximate date of commencement of proposed sale to the public:
As soon as practicable after the effective date of this registration statement.

          If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.    o

          If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

          If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

          If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

          If delivery of the prospectus is expected to be made pursuant to Rule 434, check the following box.    o

          Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (check one):

          Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer o   Accelerated filer o   Non-accelerated filer ý
(Do not check if a
smaller reporting company)
  Smaller reporting company o

Emerging Growth Company ý

          If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.    ý



          The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment that specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

   


Table of Contents

The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

Subject to Completion. Dated November 3, 2017.

39,000,000 Common Shares

LOGO

Workspace Property Trust



        This is the initial public offering of common shares of beneficial interest, $0.01 par value per share, of Workspace Property Trust. We are selling all of the common shares being sold in this offering.

        Prior to this offering, there has been no public market for the common shares. It is currently estimated that the initial public offering price per share will be between $12.00 and $15.00. We have applied to have the common shares listed on the New York Stock Exchange under the symbol "WSPT."

        We intend to elect to be treated and to qualify as a real estate investment trust ("REIT") for U.S. federal income tax purposes commencing with our taxable year ending December 31, 2017. Our common shares will be subject to the ownership and transfer restrictions in our declaration of trust, which are intended to assist us in qualifying and maintaining our qualification as a REIT. Our declaration of trust generally provides that no person may beneficially or constructively own more than 9.8% in value of the aggregate of our outstanding shares of all classes or series or more than 9.8% in value or in number of shares, whichever is more restrictive, of the aggregate number of our outstanding common shares. See "Description of Shares—Restrictions on Ownership and Transfer."

        We are an "emerging growth company" under federal securities laws and will be subject to reduced public company reporting requirements.

        See "Risk Factors" beginning on page 24 to read about factors you should consider before buying the common shares.



        Neither the Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.



 
 
Per Share
 
Total

Initial public offering price

  $               $            

Underwriting discount

  $               $            

Proceeds, before expenses, to Workspace Property Trust

  $               $            

        See the section entitled "Underwriting" for a complete description of the compensation payable to the underwriters.

        To the extent that the underwriters sell more than 39,000,000 common shares, the underwriters have the option to purchase up to an additional 5,850,000 common shares from Workspace Property Trust at the initial price to public, less the underwriting discount, for 30 days after the date of this prospectus. To the extent the underwriters exercise their over-allotment option, we will use up to $50.0 million of proceeds (before underwriting discounts) from the sale of additional common shares to acquire up to 3,703,704 common units (based on the midpoint of the price range set forth on the front cover of this prospectus) from Safanad Suburban Office Partnership, LP, an affiliate of Safanad Limited.



        The underwriters expect to deliver the shares against payment in New York, New York on                          , 2017.

Goldman Sachs & Co. LLC   J.P. Morgan   BofA Merrill Lynch

 

KeyBanc Capital Markets   Barclays   Citigroup   BMO Capital Markets   Capital One Securities   JMP Securities



Prospectus dated                          , 2017.


Table of Contents

LOGO


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Table of Contents

GRAPHIC


TABLE OF CONTENTS

PROSPECTUS

PROSPECTUS SUMMARY

    1  

RISK FACTORS

   
24
 

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

   
59
 

USE OF PROCEEDS

   
61
 

DISTRIBUTION POLICY

   
62
 

CAPITALIZATION

   
66
 

DILUTION

   
67
 

SELECTED CONSOLIDATED HISTORICAL AND PRO FORMA FINANCIAL AND OTHER DATA

   
69
 

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

   
72
 

INDUSTRY AND MARKET DATA

   
100
 

BUSINESS AND PROPERTIES

   
136
 

MANAGEMENT

   
167
 

EXECUTIVE AND TRUSTEE COMPENSATION

   
180
 

PRINCIPAL SHAREHOLDERS

   
188
 

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

   
192
 

POLICIES WITH RESPECT TO CERTAIN ACTIVITIES

   
199
 

STRUCTURE AND FORMATION OF OUR COMPANY

   
203
 

PRICING SENSITIVITY ANALYSIS

   
209
 

DESCRIPTION OF SHARES

   
211
 

DESCRIPTION OF THE PARTNERSHIP AGREEMENT OF WORKSPACE PROPERTY TRUST, L.P. 

   
217
 

CERTAIN PROVISIONS OF MARYLAND LAW AND OUR DECLARATION OF TRUST AND BYLAWS

   
232
 

SHARES ELIGIBLE FOR FUTURE SALE

   
240
 

MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS

   
243
 

UNDERWRITING

   
266
 

LEGAL MATTERS

   
275
 

EXPERTS

   
275
 

WHERE YOU CAN FIND MORE INFORMATION

   
275
 

INDEX TO FINANCIAL STATEMENTS

   
F-1
 



i


        Through and including                        , 2017 (the 25th day after the date of this prospectus), all dealers effecting transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to a dealer's obligation to deliver a prospectus when acting as an underwriter and with respect to an unsold allotment or subscription.



        We have not authorized anyone to provide any information or to make any representations to you other than those contained in this prospectus or in any free writing prospectuses we have prepared. We take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. This prospectus is an offer to sell only the shares offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus is current only as of its date.


MARKET DATA AND INDUSTRY FORECASTS

        We use market data and industry forecasts throughout this prospectus. We have obtained certain information contained in the sections entitled "Prospectus Summary—Market Opportunity", "Industry and Market Data" and "Business and Properties", as well as in other sections of this prospectus where indicated, from market research prepared for us by Cushman & Wakefield, Inc., or "C&W" or "Cushman & Wakefield," a nationally recognized real estate consulting firm, and such information is included in this prospectus in reliance on C&W's authority as an expert in such matters. We have obtained certain information contained in the section entitled "Business and Properties" from market research prepared for us by Jones Lang La Salle, or "JLL," a nationally recognized real estate consulting firm, and such information is included in this prospectus in reliance on JLL's authority as an expert in such matters. In addition, we have obtained certain market data from publicly available information and industry publications. These sources generally state that the information they provide has been obtained from sources believed to be reliable, but the accuracy and completeness of the information are not guaranteed. The forecasts are based on industry surveys and the preparers' experience in the industry, and there is no assurance that any of such forecasts will be achieved. We believe that the surveys and market research others have performed are reliable, but we have not independently verified this information.

        This prospectus also contains certain company estimates, which involve significant assumptions and judgments and the application of alternative assumptions, judgments or methodologies could result in materially different estimates.


CERTAIN DEFINED TERMS

        Except where the context suggests otherwise, we define certain terms in this prospectus as follows:

    "adjusted percent leased" is calculated as (i) square footage under commenced leases as of June 30, 2017, plus additional square footage leased pursuant to signed but not commenced leases (net of renewals) as of October 20, 2017, minus square footage under expired or terminated leases between July 1, 2017 and October 20, 2017, divided by (ii) total rentable square feet.

    "annualized rent" represents annualized monthly contractual rent under leases commenced as of June 30, 2017 and is calculated by multiplying total cash rent before abatements for a specified month by 12. Annualized rent is converted from triple net or modified gross to gross basis by adding expense reimbursements to base rent.

    "annualized rent per square foot" represents annualized rent divided by leased square feet under commenced leases as of June 30, 2017.

    "CBD" refers to central business districts in urban areas.

    "capitalization rate" or "cap rate" refers to the ratio of the annual net operating income of a property to its purchase price.

ii


    "common units" refers to the common units of limited partnership interest in our operating partnership, which units are redeemable for cash or, at our option, common shares on a one-for-one basis.

    "continuing investors" refers to investors in our predecessor that will own common shares or common units following the consummation of the formation transactions.

    "first generation leases" refers to leases for space that was (i) vacant (including space that was leased but not occupied) at the time of the acquisition of an asset, (ii) previously under a lease that was scheduled to expire within three months of the acquisition of an asset, (iii) vacant for more than one year, including expansions by existing tenants into such vacant space, or (iv) substantially demolished and demised for its first time following a renovation.

    "first portfolio" refers to the portfolio of 40 office and flex properties and one land parcel in the Philadelphia market that our predecessor acquired on December 3, 2015.

    "flex" or "flex space" refers to buildings that are generally configured with a combination of office and warehouse space and can be designed to fit a number of uses, including office, research and development, laboratory, assembly, showroom, light manufacturing and other activities.

    "formation transactions" refers to the series of transactions occurring prior to, or concurrently with, the completion of this offering by our predecessor and its affiliates to establish our operating and capital structure. See "Structure and Formation of Our Company."

    "fully diluted basis" refers, unless the context otherwise requires or indicates, to the (i) 39,000,000 common shares to be issued in this offering, (ii) 6,996,345 common shares to be issued in connection with the formation transactions, (iii) 137,741 restricted share units subject to time-based vesting to be granted to eligible non-executive employees and 24,075 restricted share units subject to time-based vesting to be granted to our independent trustees concurrently with the completion of this offering, (iv) 30,120,212 common units expected to be issued in the formation transactions, and (v) 283,336 LTIP units subject to time-based vesting to be granted to our executive officers and 333,333 fully vested LTIP units to be granted to certain of our executive officers concurrently with the completion of this offering (in each case, other than the common shares to be issued in this offering, based on the midpoint of the price range set forth on the front cover of this prospectus and assuming the exchange of such restricted share units subject to time-based vesting, common units, LTIP units subject to time-based vesting and fully vested LTIP units on a one-for-one basis for common shares), which is not the same as the meaning of "fully diluted" under GAAP.

    "GAAP" refers to generally accepted accounting principles in the United States.

    "Millennials" refers to the age cohort born between 1980 and 2000.

    "modified gross lease" refers to a lease that requires the tenant to pay base rent at the lease's inception and, in subsequent years, the base rent plus a proportional share of some of the property operating expenses, including real estate taxes, utilities, insurance premiums and repair and maintenance costs.

    "net absorption" refers to the change in physically occupied space from one period to another period of time and takes into account newly constructed buildings and the conversion or demolition of buildings.

    "new unsecured credit facilities" refers to (i) a revolving credit facility we expect to enter into upon the consummation of this offering and the formation transactions, allowing for borrowings of up to $500.0 million at any one time outstanding (which may be increased to $1.25 billion upon our request, subject to meeting specified requirements and obtaining additional commitments from lenders), including (a) a swingline facility of up to $75.0 million and (b) letters of credit available for issuance of up to $75.0 million, and (ii) two delayed draw term

iii


      loan facilities we intend to enter into shortly after the consummation of this offering and the formation transactions for borrowings of up to $650.0 million in the aggregate (which may be increased to $750.0 million in the aggregate upon our request, subject to meeting specified requirements and obtaining additional commitments from lenders), consisting of a term loan A facility of up to $325.0 million and a term loan B facility of up to $325.0 million.

    "non-recurring capital expenditures" include expenditures to renovate and upgrade the competitive positioning, or convert the use, of a property.

    "our operating partnership" refers to Workspace Property Trust, L.P., a Delaware limited partnership, together with its consolidated subsidiaries.

    "our predecessor" refers to Workspace Property Trust, L.P. and its affiliates, including Workspace RVFP, L.P., Workspace Property Management, L.P., RV OP 2, L.P., RV OP 3, L.P., RV OP 4, L.P., RVFP Limited, L.P., WPT FAMP Limited Partnership and their consolidated subsidiaries.

    "percent leased" is based on commenced leases as of June 30, 2017 and is calculated as total rentable square feet under commenced leases divided by total rentable square feet.

    "pro forma" or "pro forma basis" means that the related financial information gives effect to this offering and the formation transactions as if such offering or formation transactions had occurred (i) with respect to balance sheet data, on June 30, 2017, and (ii) with respect to statement of operations data, on January 1, 2016.

    "psf" means per square foot.

    "recurring capital expenditures" refers to expenditures to maintain an asset's competitive position within the submarket or extend the useful life of the asset due to ordinary wear and tear, including, but not limited to, expenditures to replace or repair mechanical systems, HVAC systems, roof replacements and other structural systems.

    "rentable square feet" or "RSF" reflects management's estimates based on existing leases and, in the case of square footage available for lease, our measurements and/or historical leasing activity, which may be less or more than the Building Owners and Managers Association, or BOMA, rentable area. Rentable square footage may change over time due to remeasurement or releasing. As of June 30, 2017, total rentable square feet consisted of 8,763,589 leased square feet, 185,223 square feet with respect to signed but not commenced leases, 944,704 square feet available for lease and 36,447 square feet for building management use.

    "second generation leases" refers to leases for space that had previously been under lease and was vacant for one year or less.

    "signed but not commenced lease" refers to a lease that has been signed but the tenant is not yet entitled to occupy the space or the renewal term has not yet started as of the date specified.

    "second portfolio" refers to the portfolio of 108 office and flex properties and two land parcels located in the Philadelphia, South Florida, Tampa, Minneapolis and Phoenix markets that our predecessor acquired on October 3, 2016.

    "South Florida" refers to the Fort Lauderdale and West Palm Beach markets.

    "tech flex" or "tech flex space" refers to flex space where the warehouse component of the building (which also includes office space) is used for high-tech or capital intensive uses beyond those uses typically associated with traditional flex space, such as research and development, manufacturing or laboratory activities by technology or biotechnology tenants.

    "total shareholder return" means the appreciation in stock price assuming contemporaneous reinvestment of all dividends and other distributions.

iv


    "triple-net lease" refers to a lease that requires the tenant to pay substantially all of the property operating expenses, including real estate taxes, insurance premiums and repair and maintenance costs.

    "triple-net lease with a cap" refers to triple-net leases that cap the amount by which certain operating expenses may grow on a per annum basis and be reimbursed by the tenant.

    "Workspace," "we," "our," "us," "general partner," and "our company" refer to Workspace Property Trust, a Maryland real estate investment trust, together with its consolidated subsidiaries after giving effect to the formation transactions described in this prospectus, including our operating partnership, and, in certain cases, refer to the activities of Workspace conducted prior to the formation transactions.

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PROSPECTUS SUMMARY

        You should read the following summary together with the more detailed information regarding our company and the historical and pro forma financial statements appearing elsewhere in this prospectus. You should carefully review the entire prospectus, including the risk factors, the consolidated financial statements and the notes thereto and the other documents to which this prospectus refers before making an investment decision. References in this prospectus to "Workspace," "we," "our," "us," "general partner" and "our company" refer to Workspace Property Trust, together with our consolidated subsidiaries, including Workspace Property Trust, L.P. References in this prospectus to "our operating partnership" refer to Workspace Property Trust, L.P., a Delaware limited partnership, together with its consolidated subsidiaries. Unless the context otherwise requires or indicates, this prospectus (i) assumes the formation transactions, as described under the caption "Structure and Formation of Our Company," have been completed, (ii) assumes the 39,000,000 common shares to be sold in this offering are sold at $13.50 per share, which is the midpoint of the price range set forth on the front cover of this prospectus, (iii) assumes no exercise by the underwriters of their option to purchase up to an additional 5,850,000 common shares to cover over-allotments, or the over-allotment option, and (iv) presents all property-level information as of June 30, 2017 on a pro forma basis for the formation transactions.

Workspace Property Trust

        Workspace Property Trust is a fully integrated real estate investment company primarily focused on acquiring, owning and operating high-quality office and flex real estate in prime locations within transit centric, amenity rich U.S. suburban office submarkets. We believe the U.S. suburban office market is under-represented in the public real estate investment trust ("REIT") space despite offering compelling risk-adjusted returns that are supported by recovering demand, limited new supply and an increasing demographic shift back to the suburbs. We intend to capitalize on this market opportunity by sourcing and executing accretive acquisitions and enhancing the value of our portfolio through proactive asset management. As a first step in executing on our strategy, we have assembled a strong portfolio of 148 properties, totaling 9.9 million rentable square feet. As of October 20, 2017, through our extensive network of relationships, we have identified an acquisition pipeline of high-quality, well-located and attractively-priced suburban office and flex properties owned by third-party sellers totaling more than 25.0 million square feet and with an estimated purchase price of approximately $4.0 billion based on management's estimates of the market price for such square footage.

        Thomas A. Rizk, our Chairman and Chief Executive Officer, and Roger W. Thomas, our President and Chief Operating Officer, each has over 30 years of experience acquiring, owning and operating commercial real estate across markets and cycles, with extensive experience in suburban office and flex real estate. In August 1994, Messrs. Rizk and Thomas orchestrated the initial public offering of Cali Realty Corporation ("Cali"), a REIT focused on suburban office opportunities. Under their leadership, Cali completed more than $3 billion in acquisitions totaling approximately 23 million square feet, including the acquisition of the suburban office portfolio of The Mack Company in December 1997, prior to Mr. Rizk's departure from Mack-Cali Realty Corporation in April 1999. After the completion of this offering and the formation transactions, our senior management team is expected to own approximately 9.2% of our company on a fully diluted basis (or 9.0% of our company if the underwriters exercise their over-allotment option in full) (in each case, based on the midpoint of the price range set forth on the front cover of this prospectus), providing a strong alignment of their interests with those of our shareholders.

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        We believe our focus on acquiring, owning and operating high-quality office and flex real estate in prime suburban submarkets will generate attractive risk-adjusted returns to our shareholders. We further believe:

    the large and fragmented U.S. suburban office and flex market presents an attractive opportunity to be an active consolidator of suburban office and flex properties within well-positioned suburban submarkets;

    suburban office fundamentals are well-positioned for continued recovery and long-term growth, supported by increasing re-suburbanization trends, robust leasing activity and subdued new construction;

    the current pricing and liquidity dislocations between suburban and CBD office markets, particularly with respect to large, multi-asset portfolios, create attractive acquisition opportunities for high-quality suburban office and flex assets in prime locations with multiple demand generators and limited supply growth;

    as one of the few publicly traded REITs with a core suburban office and flex strategy, our scale, expertise and focus will competitively position us to capitalize on the strong growth potential embedded in suburban office and flex assets relative to other asset classes;

    our senior management team's acquisition experience and deep, long-standing network of relationships with real estate owners and developers, national and regional lenders, brokers, tenants and other market participants will enable us to source and execute attractive off-market acquisitions;

    our market and asset selection process will enable us to pursue acquisition opportunities without geographic constraints in select markets throughout the United States where we believe we can achieve compelling scale and effectively recycle capital;

    our integrated, scalable management platform provides us with cost benefits and control over operating expenses and leasing processes, enabling us to drive internal growth; and

    our process of enhancing suburban office properties by creating vibrant and stimulating work environments that appeal to the Millennial workforce and employers will allow us to offer differentiated office and flex products that we believe will drive demand for our properties.

        In 2015, Messrs. Rizk and Thomas jointly founded our predecessor and have since built a senior management team with an average of over 20 years of commercial real estate experience and an organization of approximately 70 other real estate professionals with extensive operating experience, deep local knowledge and strong relationships in the suburban office industry. Our differentiated investment and operating strategy has enabled us to achieve strong operating results, and we believe we are well positioned to generate significant opportunities for future growth. Since our founding in 2015, we:

    completed two off-market portfolio acquisitions totaling 9.9 million rentable square feet, comprised of 40 office and flex properties and one land parcel (our "first portfolio") that we signed a letter of intent to acquire on May 15, 2015 and closed on December 3, 2015 and 108 office and flex properties and two land parcels (our "second portfolio") that we signed a letter of intent to acquire on February 18, 2016 and closed on October 3, 2016;

    commenced 115 leases totaling 1,233,561 square feet, comprised of 32 new leases totaling 351,963 square feet, 66 renewal leases totaling 745,648 square feet and 17 expansion leases totaling 135,950 square feet through June 30, 2017; and

    increased our portfolio's percent leased since the closing of our second portfolio by 320 basis points from 87.3% to 90.5% as of June 30, 2017.

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        In addition, during the period from July 1, 2017 to October 20, 2017, we signed 15 new leases for 148,369 square feet and 31 renewal leases for 820,545 square feet for a total square footage of 968,914 (excluding 80,000 square feet relating to a build to suit property in Phoenix and 31,812 square feet of short-term leases). The new leases have an average term of 6.6 years, average cash leasing spreads of 10.9% and average total lease transaction costs per square foot per year of $2.48. The renewal leases have an average term of 4.4 years, average cash leasing spreads of 2.8% and average total lease transaction costs per square foot per year of $1.90. During the period from the closing of our second portfolio to October 20, 2017, we have signed leases with average initial contractual rents of $20.39 per square foot, representing average cash leasing spreads of 1.7%. Cash leasing spreads are calculated by dividing initial contractual rents under new, renewal and expansion leases (less contractual rent under expiring leases in the same space) by contractual rents under expiring leases in the same space. New leases are included only if the same space was leased within the previous year. Total lease transaction costs include tenant improvements, leasing commissions and other leasing costs.

        As of October 20, 2017, we also have identified a pipeline of potential off-market acquisitions consistent with our investment strategy totaling more than 25.0 million square feet and with an estimated purchase price of approximately $4.0 billion based on management's estimates of the market price for such square footage.

Our Portfolio

        The following table provides information about our portfolio as of June 30, 2017 (except as otherwise indicated):

Market
  Number of
Properties
  Rentable
Square
Feet(1)
  Percent
Leased(2)
  Initial
Percent
Leased(3)
  Annualized
Rent(4)
  Annualized
Rent Per
Square
Foot(5)
 

Philadelphia

                                     

Office

    44     3,044,298     83.6 %   80.3 % $ 59,458,640   $ 24.12  

Flex

    26     1,381,915     92.8 %   95.8 %   18,189,786   $ 14.26  

South Florida

                                     

Office

    11     1,136,698     98.1 %   94.2 %   31,525,216   $ 28.39  

Tampa

                                     

Office

    14     684,363     93.5 %   82.5 %   13,100,360   $ 21.93  

Flex

    20     1,115,205     97.2 %   94.2 %   14,852,351   $ 14.25  

Minneapolis

                                     

Office

    11     921,204     87.8 %   84.6 %   18,705,326   $ 23.41  

Flex

    8     567,628     88.4 %   82.6 %   7,821,209   $ 15.58  

Phoenix

                                     

Office

    13     977,383     92.8 %   99.4 %   18,450,320   $ 20.34  

Flex

    1     101,269     100.0 %   0.0 %   1,513,972   $ 14.95  

Portfolio Total / Weighted Average

    148     9,929,963     90.5 %   87.3 % $ 183,617,179   $ 20.87  

(1)
Reflects management's estimates based on existing leases and, in the case of square footage available for lease, our measurements and/or historical leasing activity, which may be less or more than BOMA rentable area. Rentable square footage may change over time due to remeasurement or releasing. Total rentable square feet consists of 8,763,589 leased square feet, 185,223 square feet with respect to signed new leases not yet commenced, 944,704 square feet available for lease and 36,447 square feet for building management use.

(2)
Based on commenced leases as of June 30, 2017 and calculated as total rentable square feet less square feet available for lease divided by total rentable square feet. As of October 20, 2017, we had entered into 31 new leases (including one short-term lease for 536 square feet) and 84 renewal leases (including six short-term renewals for 84,663 square feet) that

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    had not yet commenced as of June 30, 2017. The table below sets forth adjusted percent leased data reflecting these signed but not commenced leases.

 
  Leased Square
Feet Under
Signed But Not
Commenced
Leases(a)
  Adjusted
Percent
Leased(b)
  Annualized
Rent Under
Signed But Not
Commenced
Leases(c)
  Total Adjusted
Annualized
Rent(d)
  Total Adjusted
Annualized Rent
per Square
Foot(e)
 

Portfolio Total / Weighted Average

    2,286,695     90.3 % $ 46,253,518   $ 187,668,820   $ 20.93  

(a)
Leased square feet under signed but not commenced leases include an aggregate of (i) 230,093 square feet of new leases (including one short-term lease for 536 square feet) and 1,320,267 square feet of renewals (including short-term renewals for 70,354 square feet) in Philadelphia, (ii) 29,518 square feet of new leases and 85,884 square feet of renewals in South Florida, (iii) 118,555 square feet of new leases and 298,498 square feet of renewals (including short-term renewals for 14,309 square feet) in Tampa, (iv) 11,796 square feet of new leases and 54,029 square feet of renewals in Minneapolis, and (v) 8,413 square feet of new leases and 129,642 square feet of renewals in Phoenix. Figures exclude an executed lease for 80,000 square feet associated with a build-to-suit office project in Phoenix. We commenced site preparation work for construction of this project in October 2017.

(b)
Adjusted percent leased is calculated as (i) square footage under commenced leases as of June 30, 2017, plus additional square footage leased pursuant to signed but not commenced leases (net of renewal space) as of June 30, 2017, minus square footage under expired or terminated leases between July 1, 2017 and October 20, 2017, divided by (ii) total rentable square feet.

(c)
Represents annualized monthly contractual rent under leases that had not commenced as of June 30, 2017. This amount reflects total cash rent before abatements. Abatements committed to signed but not commenced leases for the 12 months ending June 30, 2018 were $2.7 million. This figure includes $1.2 million of rent abatements for new leases and $1.5 million for renewal leases. Annualized rent is converted from triple net or modified gross to gross basis by adding estimated expense reimbursements to base rent. Amounts include approximately $0.7 million of estimated reimbursement revenue attributable to tenants between July 1, 2017 and October 20, 2017. Amounts exclude additional income for areas such as parking space, storage space, roof space and antenna usage.

(d)
Total adjusted annualized rent is calculated by adding annualized rent as of June 30, 2017 and annualized rent under signed but not commenced leases (net of renewals) and subtracting annualized rent for space under leases that were expired or terminated between July 1, 2017 and October 20, 2017. Total adjusted annualized rent does not include annualized rent for space under commenced leases as of June 30, 2017 that were being renewed pursuant to a signed but not commenced lease.

(e)
Total adjusted annualized rent per square foot is calculated as (i) total adjusted annualized rent, divided by (ii) square footage under commenced leases as of June 30, 2017 plus additional square footage leased pursuant to signed but not commenced leases (net of renewal space) as of June 30, 2017 minus square footage under expired or terminated leases between July 1, 2017 and October 20, 2017.

For additional information with respect to our signed but not commenced leases as of October 20, 2017, see "Business and Properties—Our Portfolio."

(3)
Based on commenced leases as of October 3, 2016, the closing date of the acquisition of our second portfolio, and calculated as total rentable square feet less square feet available for lease divided by total rentable square feet as of that date, excluding one property that was underwritten as vacant at acquisition but for which the single tenant with 56,480 square feet remained in occupancy as of the closing date of our second portfolio.

(4)
Represents annualized monthly contractual rent under leases commenced as of June 30, 2017. This amount reflects total cash rent before abatements. Abatements committed to leases that commenced as of June 30, 2017 for the 12 months ending June 30, 2018 were $2.3 million. Based on annualized rent as of June 30, 2017, approximately 91.1%, 7.4%, 1.1% and 0.4% of our annualized rent was generated from triple-net, triple-net leases with a cap, modified gross leases and gross leases, respectively. Annualized rent is converted from triple net or modified gross to gross basis by adding expense reimbursements to base rent. Amounts also include $62.7 million of reimbursement revenue attributable to tenants as of June 30, 2017. Amounts exclude $1.4 million of accrued (but unbilled) reimbursement revenue that has not been allocated to a specific tenant as of period end and $0.6 million of additional income for areas such as parking space, storage space, roof space and antenna usage.

(5)
Represents annualized rent divided by square feet under commenced leases. Annualized rent excludes $1.4 million of accrued (but unbilled) reimbursement revenue and $0.6 million of additional income for areas such as parking space, storage space, roof space and antenna usage that has not been allocated to a specific tenant as of period end.

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        The following charts provide the source of our annualized rent by market and asset type, as well as the usage of our flex assets by square feet, as of June 30, 2017:


GRAPHIC
 
GRAPHIC
 
GRAPHIC

(1)
Includes flex space used for research and development, laboratory, assembly, showroom, light manufacturing and other activities.

Market Opportunity

        A constellation of factors has made suburban office one of the most compelling investment opportunities in the U.S. commercial real estate market. Family formation among aging Millennials, supported by a growing economy and strong job market, is expected to re-ignite suburbanization trends and spur growth in the suburban office market, which continues to benefit from a favorable supply environment, stable occupancy and rent growth. Yield spreads between suburban and CBD office markets have widened to multi-year highs despite favorable suburban fundamentals, presenting a compelling long-term value proposition.

        Since 2005, Millennials have driven an acceleration of urban population growth as they entered the prime city-dwelling age of 25-29. Urbanization has been further amplified by the global financial crisis, delayed family formation, higher student debt and stricter home-lending practices, all of which combined to slow population outflows from cities. However, in 2015, eight out of 10 births were to Millennial mothers. In addition, Millennials now represent both the biggest homebuyer group (with a demonstrated preference for homes in the suburbs) and the largest workforce cohort at 35% and are expected to reach 75% by 2025. These factors are already driving re-suburbanization trends and are expected to boost employer demand in an already-strong suburban office environment.

GRAPHIC



Source: U.S. Census Bureau forecasts.

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GRAPHIC   GRAPHIC

Source: Pew Research center analysis of National Center for health statistics data.
 
Source: National Association of Realtors.

        Suburban markets have experienced steady job and population growth since the financial crisis, leading to strong net absorption that has outpaced CBD net absorption, declining vacancy rates and attractive rent growth. Despite this strong recovery, suburban office construction has remained constrained and is expected to remain low for the foreseeable future, particularly in Workspace's office markets, where Workspace estimates replacement office rents needed on average to justify new construction are approximately 60-84% above market office rents. In contrast, CBD office construction as a percentage of inventory is approximately twice the suburban office ratio, which will likely lead to continued tightening of vacancy rates in suburban office markets relative to CBD office markets.

GRAPHIC



Source: Cushman & Wakefield.

        While suburban and CBD office rents have exhibited similar recovery since their pre-crisis peaks, suburban office is valued 4% below its previous cycle peak while CBD office is valued at 55% above its previous cycle peak. This suggests that the price gap is not a result of fundamentals but rather due to capital market forces.

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GRAPHIC



Source: Cushman & Wakefield.

        In the beginning stages of the recovery, historically wide yield spreads seemed justified as suburban office rents and vacancies were slower to recover, while CBD office rents showed faster growth. The influx of Millennials into the nation's cities led to higher office rents and lower vacancies, creating a false expectation of permanent growth in cities, which in turn drove cap rate spreads. Additionally, investors have been increasingly willing to pay for assets with low perceived risk. However, these market assumptions proved to be inconsistent with the strong fundamentals of the suburban office market since the post-recession recovery. Investors are beginning to recognize the mispricing and there has been increased investor interest in the suburban office sector relative to the CBD office sector, with transaction volumes in the first half of 2017 increasing by 10% year-over-year for suburban office while decreasing by 20% for CBD office. Overall, the suburban office market presents an attractive risk-adjusted investment opportunity on both a valuation and a fundamentals basis. We believe we are optimally positioned to take advantage of this opportunity given our scale, operating expertise and infrastructure.

Competitive Strengths

        We believe that we distinguish ourselves from other owners and operators of office and flex properties through several competitive strengths, including the following:

    Experienced and Aligned Management Team.  Our senior management team has extensive experience acquiring, owning and operating suburban office and flex real estate across markets and cycles, including our founders' experience at a publicly traded suburban office REIT. We believe that our senior management team's proven experience, as well as deep and long-standing relationships within the suburban office and flex space, will competitively position us, provide us with access to off-market acquisition opportunities and facilitate our ability to execute our growth plan.

    Differentiated Suburban Office and Flex Strategy.  As one of the few publicly traded REITs with a suburban office and flex strategy, our expertise, scale and focus will competitively position us to capitalize on the strong growth potential embedded in suburban office markets relative to CBD office and other asset classes. Our process of enhancing properties to appeal to the Millennial workforce and employers will allow us to offer differentiated products that we believe will drive demand for our properties.

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    Proven Ability to Originate and Execute Acquisition Opportunities.  Our senior management team has an extensive network of longstanding relationships with owners, operators, brokers, lenders and other participants in suburban office and flex markets, which it has leveraged to access a wide variety of acquisition opportunities. We believe our extensive industry network, coupled with our history of successful acquisitions, improves our ability to source and execute attractive transactions.

    Integrated, Scalable Platform.  We operate a platform that is both vertically integrated across functions, including investment, finance, property management and leasing, and horizontally integrated across office and flex real estate assets. Our integrated structure enables us to identify value creation opportunities and realize significant operating efficiencies. We believe proactive, in-house property management and leasing allows us to exercise greater control of operating and capital expenditures while improving re-leasing spreads and occupancy. This is demonstrated by the 11.1% vacancy rate of our office portfolio as of June 30, 2017, which is approximately 270 basis points lower than the weighted average office vacancy rate of 13.8% in our markets, according to C&W data as of June 30, 2017.

    Growth-Oriented Capital Structure.  We plan to have a conservative capital structure that will provide us with significant financial flexibility and capacity to fund future growth. We expect to have substantial liquidity, with our new unsecured credit facilities to be entered into upon or shortly after the consummation of this offering and the formation transactions, which provide commitments totaling, and which will allow for borrowings up to, $1.15 billion and no debt maturities prior to October 2021 (including extensions, which are subject to certain conditions) after giving effect to the use of proceeds from this offering. We expect to close our new revolving credit facility (allowing for borrowings of up to $500.0 million) concurrently with the consummation of this offering and the formation transactions, and we intend to close on our two new delayed draw term loan facilities (allowing for borrowings of up to $650.0 million in the aggregate) shortly after the consummation of this offering and the formation transactions.

Business Objectives and Growth Strategies

        Our primary objective is to generate attractive risk-adjusted returns for our shareholders through dividends and capital appreciation. We believe that pursuing the following strategies will enable us to achieve this objective:

    External Growth through Acquisitions.  We continually evaluate potential new markets throughout the United States, with a focus on targeting markets that possess the vibrant attributes necessary to drive leasing demand and occupancy rates and where we believe we can achieve critical mass of over 1.0 million square feet, typically in business parks or campus clusters. We believe there are many opportunities to acquire large portfolios of suburban office properties from REITs that have determined suburban office to be non-core to their investment strategies and private institutions that have finite investment horizons. Non-core portfolios tend to be under-managed, representing an upside opportunity for an acquirer with operating expertise and focus. We believe this creates an opportunity for us to grow our already compelling scale in markets that meet our investment criteria through strategic and accretive acquisitions that will generate substantial growth.

    Value Creation Through Capital Recycling.  We intend to pursue an efficient capital allocation strategy that maximizes the value of our invested capital. This strategy may include selectively disposing of properties in our portfolio or in portfolios we may acquire in the future that do not fit our investment strategy or for which we believe returns have been maximized given prevailing economic, market and other circumstances and redeploying capital into acquisition opportunities with higher return prospects, in each case, in a manner that is consistent with our qualification as a REIT.

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    Aggressive, In-House Leasing Strategy.  We employ aggressive leasing strategies and leverage our tenant relationships to increase the occupancy rates at our properties, attract high-quality tenants and maximize tenant retention rates. Since the acquisition of our first portfolio on December 3, 2015, 97.4% of the 155 executed leases (excluding 14 short-term leases) were leased by our dedicated in-house leasing teams without using an external broker for landlord representation. We believe our in-house leasing platform allows us to control the leasing process and maximize rental rates while minimizing leasing costs and execution timing.

    Value-Enhancing, Tenant-Focused Property Management.  We intend to manage our properties to increase our operating cash flow by continuing to reduce property-level operating and leasing costs. We also seek to enhance our tenants' experience at our office properties through a process we call "Workspacing." We believe that with minimal investment from us or our tenants, we can create and maintain vibrant and stimulating work environments that appeal to the Millennial workforce and a variety of commercial tenants. We are in the process of Workspacing our multi-tenant buildings that have common areas to create technology-rich facilities with inviting communal lobbies complete with Wi-Fi access, charging stations and quiet areas, as well as our branded "Workspace TV" video wall installation, expanded food service options, premium landscaping and modern fit and finish.

    Financing Strategy.  We intend to employ a conservative leverage strategy and maintain ample liquidity in order to minimize operational risk and retain growth capacity. We are committed to achieving an investment grade rating as soon as practicable, which would allow us to access the unsecured debt markets. However, to effectively manage our long-term leverage strategy, we will continue to analyze various sources of debt capital to determine which sources will be the most advantageous to our investment strategy at any particular point in time.

Summary of Risk Factors

        An investment in our common shares involves various risks, and prospective investors are urged to carefully consider the matters discussed under "Risk Factors" prior to making an investment in common shares. The following is a summary list of some of these risks.

    Adverse market and economic conditions in the United States and globally could adversely affect occupancy levels, rental rates, rent collections, operating and development expenses and the overall value of our assets, and could have a material adverse effect on our results of operations, financial condition, cash flow and our ability to service our debt and to make distributions to our shareholders.

    Substantially all of our rental revenue is derived from properties located in our markets, and adverse economic or other developments in our markets could negatively affect our results of operations, financial condition and ability to service our debt and to make distributions to our shareholders.

    We may be unable to identify and execute on acquisitions that meet our criteria, which may impede our growth.

    We have a limited operating history and may not be able to operate our business successfully or implement our business strategy.

    We face significant competition, which may impede our ability to attract or retain tenants and maintain our rental rates.

    Adverse developments concerning the industries in which our tenants are concentrated could adversely affect our results of operations, financial condition and ability to service our debt and to make distributions to our shareholders.

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    We are dependent on our key personnel whose continued service is not guaranteed, and the departure of any of our key personnel could materially and adversely affect us.

    A material weakness has been identified in our internal control over financial reporting. If we fail to implement and maintain effective internal control over financial reporting, we may be unable to report our financial results accurately on a timely basis, investors could lose confidence in our reported financial information, the trading price of our common shares could decline and our access to the capital markets or other financing sources could become limited.

    We expect to have approximately $652.8 million of indebtedness outstanding following this offering and the formation transactions. Our indebtedness may expose us to interest rate fluctuations and the risk of default under our debt obligations.

    Failure to qualify or to maintain our qualification as a REIT would have significant adverse consequences to the value of our common shares.

    There has been no public market for our common shares prior to this offering and an active trading market for our common shares may not develop or be sustained following this offering.

    We may be unable to make distributions at expected levels, and we may be required to borrow funds to make distributions, which could result in a decrease in the market value of our common shares.

    Increases in market interest rates may cause prospective purchasers to seek higher distribution yields and therefore reduce demand for our common shares and result in a decline in the market price of our common shares.

Pro Forma Indebtedness

        As of June 30, 2017, on a pro forma basis, our total consolidated indebtedness was $652.8 million, all of which was variable rate debt subject to interest rate caps. Our pro forma consolidated indebtedness has a maturity date of October 9, 2018 and has a weighted average interest rate of 6.22%. In the future, overall leverage will depend on how we choose to finance our portfolio, including future acquisitions, and the cost of leverage.

Structure and Formation of Our Company

        We were formed as a Maryland real estate investment trust in June 2017, and we intend to elect to be treated and to qualify as a REIT for U.S. federal income tax purposes beginning with our taxable year ending December 31, 2017. Prior to, or concurrently with, the completion of this offering, Workspace Property Trust, L.P., our operating partnership, and its affiliates will engage in a series of transactions intended to establish our operating and capital structure.

Our Operating Partnership

        Upon completion of the formation transactions, substantially all of our assets will be held by, and substantially all of our operations will be conducted through, our operating partnership, either directly or through its subsidiaries, and we will be the sole general partner of our operating partnership. We will contribute the net proceeds received by us from this offering to our operating partnership in exchange for common units. As the sole general partner of our operating partnership, we will generally have the exclusive power under the partnership agreement to manage and conduct its business, subject to limited approval and voting rights of the limited partners described more fully under "Description of the Partnership Agreement of Workspace Property Trust, L.P." Our interest in our operating partnership will generally entitle us to share in cash distributions from, and in the profits and losses of, our operating partnership in proportion to our percentage ownership.

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Formation Transactions

        Prior to or concurrently with the completion of this offering, our operating partnership and its affiliates will engage in a series of transactions intended to establish our operating and capital structure. We refer to these transactions, which are described below, as our formation transactions.

    Workspace Property Trust was formed as a Maryland real estate investment trust in June 2017. We intend to elect to be treated and to qualify as a REIT for U.S. federal income tax purposes beginning with our taxable year ending December 31, 2017.

    Workspace RVFP, L.P., the general partner of our operating partnership, which we refer to as the predecessor general partner, will distribute to its limited partners the carried interest in our operating partnership that the predecessor general partner received in December 2015 and October 2016 with respect to the cash capital contributions our operating partnership received at those dates from its existing limited partners in connection with our acquisition of our first portfolio and our second portfolio, respectively.

    The predecessor general partner will be merged with and into Workspace Property Trust, with Workspace Property Trust surviving and succeeding as the general partner of our operating partnership, and the owners of the predecessor general partner will receive common shares in exchange for their interests in the predecessor general partner.

    Entities that own the limited and general partner interests in Workspace Property Management, L.P., which provides property management services and certain other services to our operating partnership and which we refer to as Workspace Property Management, will contribute to our operating partnership their partnership interests in Workspace Property Management in exchange for common units. Workspace Property Management will be jointly owned by our operating partnership and WPT TRS LLC, a wholly-owned subsidiary owned by our operating partnership that will make an election to be treated as a taxable REIT subsidiary.

    Our operating partnership will redeem the mandatorily redeemable preferred equity our operating partnership issued in connection with our acquisition of our second portfolio in exchange for a combination of cash and common shares.

    The existing partnership interests in our operating partnership (including the carried interest in our operating partnership distributed to the limited partners of our predecessor general partner described in the second bullet above) will be converted into common units in our operating partnership and/or exchanged for common shares. The transactions described in the second, third, fourth and fifth bullets above, including the settlement of the carried interest in our operating partnership for common units, may shift the respective percentage ownership interest among the investors in our predecessor prior to the consummation of the formation transactions but will not result in any dilution in the indirect ownership of our operating partnership by investors purchasing common shares in this offering. See "Pricing Sensitivity Analysis."

    The limited partnership agreement of our operating partnership will be amended and restated.

        The issuance of common shares and common units will be effected in reliance upon exemptions from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended (the "Securities Act"), and Regulation D of the Securities Act.

        We will sell 39,000,000 common shares (or 44,850,000 common shares if the underwriters exercise their over-allotment option in full) in this offering and contribute the net proceeds of this offering, other than the net proceeds from the sale of additional common shares pursuant to the underwriters' exercise of their over-allotment option, if any, we will use to acquire common units as described below, to our operating partnership in exchange for common units. We expect our operating partnership to use a portion of the net proceeds received from us to:

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    repay approximately $215.7 million in outstanding indebtedness under our existing loan agreement with KeyBank National Association, which we refer to as the KeyBank Loan Agreement;

    repay approximately $163.2 million of outstanding indebtedness under a senior mortgage loan and three mezzanine loans we entered into in connection with our acquisition of our second portfolio; and

    pay approximately $63.6 million in cash in connection with the redemption of the mandatorily redeemable preferred equity our operating partnership issued in connection with our acquisition of our second portfolio. See "Structure and Formation of our Company—Formation Transactions—Redemption of Mandatorily Redeemable Preferred Equity."

        We expect our operating partnership to use any remaining net proceeds received from us for general corporate purposes, including capital expenditures and potential future acquisition opportunities.

        To the extent the underwriters exercise their over-allotment option, we will use up to $50.0 million of proceeds (before underwriting discounts) from the sale of additional common shares to acquire up to 3,703,704 common units (based on the midpoint of the price range set forth on the front cover of this prospectus) from Safanad Suburban Office Partnership, LP ("SSOP LP"), an affiliate of Safanad Limited. See "Certain Relationships and Related Transactions—Repurchase of Common Units." We will contribute any remaining net proceeds from the sale of such additional common shares to our operating partnership in exchange for common units. We expect our operating partnership to use any such net proceeds received from us for general corporate purposes, including capital expenditures and potential future acquisition opportunities.

Consequences of this Offering and the Formation Transactions

        The completion of this offering and the formation transactions will have the following consequences. All amounts are based on the midpoint of the price range set forth on the front cover of this prospectus.

    We will be the sole general partner of our operating partnership, which indirectly owns, leases and operates all of our assets. We are a holding company and will conduct all of our operations through our operating partnership. We will not have, apart from our ownership of our operating partnership, any independent operations upon the completion of this offering.

    Purchasers of common shares in this offering will own approximately 84.4% of our outstanding common shares, or approximately 50.7% of our company on a fully diluted basis (86.2% of our outstanding common shares, or 56.7% of our company on a fully diluted basis, if the underwriters exercise their over-allotment option in full).

    Our trustees, executive officers and employees will beneficially own approximately 0.4% of our outstanding common shares, or approximately 9.4% of our company on a fully diluted basis (0.3% of our outstanding common shares, or 9.2% of our company on a fully diluted basis, if the underwriters exercise their over-allotment option in full).

    Continuing investors who are not our trustees, executive officers or employees will beneficially own approximately 15.2% of our outstanding common shares, or approximately 39.9% of our company on a fully diluted basis (13.5% of our outstanding common shares, or 34.1% of our company on a fully diluted basis, if the underwriters exercise their over-allotment option in full).

    We will contribute the net proceeds from this offering, other than the net proceeds from the sale of additional common shares pursuant to the underwriters' exercise of their over-allotment option, if any, we will use to acquire common units described below, to our operating partnership in exchange for a number of common units equal to the number of common shares that are issued in this offering.

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    To the extent the underwriters exercise their over-allotment option, we will use up to $50.0 million of proceeds (before underwriting discounts) from the sale of additional common shares to acquire up to 3,703,704 common units from SSOP LP. See "Certain Relationships and Related Transactions—Repurchase of Common Units."

    We will own approximately 60.0% of limited partnership interests in our operating partnership (or 65.8% if the underwriters exercise their over-allotment option in full).

    We expect to have total consolidated indebtedness of approximately $652.8 million.

Our Structure

        The following diagram depicts our ownership structure upon completion of this offering, based on the midpoint of the price range set forth on the front cover of this prospectus.

GRAPHIC


(1)
The ownership interest of SSOP LP and its affiliates is less than 1% of Workspace Property Trust and 17.4% of Workspace Property Trust, L.P.

        Information set forth in the table above includes (i) 39,000,000 common shares to be issued in this offering, (ii) 6,996,345 common shares and 30,120,212 common units to be issued in connection with the formation transactions and (iii) 283,336 LTIP units subject to time-based vesting and 333,333 fully vested LTIP units to be granted to our executive officers, 137,741 restricted share units subject to time-based vesting to be granted to eligible non-executive employees and 24,075 restricted share units subject to time-based vesting to be granted to our independent trustees concurrently with the

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completion of this offering. Excludes (a) 5,850,000 common shares issuable upon the exercise in full of the underwriters' over-allotment option, (b) 1,703,702 LTIP units subject to performance-based vesting to be granted to our executive officers (such number of LTIP units determined based on the midpoint of the price range set forth on the front cover of this prospectus using the maximum number of LTIP units that may vest) and 137,741 performance share units to be granted to eligible non-executive employees concurrently with the completion of this offering, (c) 3,064,897 common shares available for future issuance under our 2017 Incentive Award Plan, (d) 30,120,212 common shares that may be issued, at our option, upon exchange of 30,120,212 common units to be issued in the formation transactions and (e) securities deemed to be indirectly beneficially owned by certain of our trustees who disclaimed beneficial ownership of such securities that are directly beneficially owned by other continuing investors.

Benefits to Related Parties

        Upon completion of this offering and the formation transactions, certain of our trustees, our executive officers and employees will receive material benefits, including the following:

    We will grant to our executive officers an aggregate of 283,336 LTIP units subject to time-based vesting consisting of 111,111 LTIP units to Mr. Rizk ($1.5 million); 87,963 LTIP units to Mr. Thomas ($1.2 million); 18,519 LTIP units to each of Messrs. Allen, Nolan, Gervasio and Nichols ($250,000 each); 5,556 LTIP units to Mr. Eckerd ($75,000); and 4,630 LTIP units to Mr. Koch ($62,500) (such number of LTIP units, in each case, determined based on the midpoint of the price range set forth on the front cover of this prospectus). See "Executive and Trustee Compensation—IPO Grants Under our 2017 Incentive Award Plan—Time-Based LTIP Unit Awards."

    We will grant to our executive officers an aggregate of 1,703,702 LTIP units subject to performance-based vesting consisting of 833,333 LTIP units to Mr. Rizk ($1.7 million at threshold performance, $4.5 million at target performance and $11.25 million at maximum performance); 659,722 LTIP units to Mr. Thomas ($445,313 at threshold performance, $3.6 million at target performance and $8.9 million at maximum performance); 46,296 LTIP units to each of Messrs. Allen, Nolan, Gervasio and Nichols ($93,750 each at threshold performance, $250,000 each at target performance and $625,000 each at maximum performance); 13,889 LTIP units to Mr. Eckerd ($28,125 at threshold performance, $75,000 at target performance and $187,500 at maximum performance); and 11,574 LTIP units to Mr. Koch ($23,438 at threshold performance, $62,500 at target performance and $156,250 at maximum performance) (such number of LTIP units, in each case, determined based on the midpoint of the price range set forth on the front cover of this prospectus using the maximum number of LTIP units that may vest). See "Executive and Trustee Compensation—IPO Grants Under our 2017 Incentive Award Plan—Performance-Based LTIP Unit Awards."

    We will grant to certain eligible non-executive employees an aggregate of 137,741 performance share units subject to performance-based vesting and 137,741 restricted share units subject to time-based vesting with an aggregate value of $3.7 million (such number of performance share units and restricted share units, in each case, determined based on the midpoint of the price range set forth on the front cover of this prospectus using the target number of performance share units that may vest).

    We will grant to our independent trustees an aggregate of 24,075 restricted share units subject to time-based vesting with an aggregate estimated value of $0.3 million (such number of restricted share units, in each case, determined based on the midpoint of the price range set forth on the front cover of this prospectus).

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    We will grant 259,259 LTIP units with an estimated value of $3.5 million to Mr. Nolan, 37,037 LTIP units with an estimated value of $0.5 million to Mr. Nichols and 37,037 LTIP units with an estimated value of $0.5 million to Mr. Allen (such number LTIP units, in each case, determined based on the midpoint of the price range set forth on the front cover of this prospectus). These awards are being made in recognition of services these executive officers have provided to us in connection with this offering. These awards will be fully vested upon grant and will be made outside of the 2017 Incentive Award Plan.

    The board of directors of our predecessor approved a one-time transaction bonus for Messrs. Rizk and Thomas in the amounts of $3.0 million and $2.0 million, respectively. By prior agreement among the continuing investors in our predecessor, these bonuses are to be paid in cash through a draw by our predecessor under the KeyBank Loan Agreement that will be repaid out of the net proceeds from this offering. The aggregate number of common units and common shares issued to our existing investors upon the consummation of the formation transactions will be reduced by a number of common units and common shares valued at $5.0 million (based on the initial public offering price of the common shares sold in this offering set forth in the final prospectus), and our existing investors' aggregate percentage ownership interest in our common units and common shares will be correspondingly reduced pro rata by this amount in the formation transactions. These cash bonuses are intended to compensate Messrs. Rizk and Thomas, in part, for the diminution in their future cash compensation resulting from the contribution to our operating partnership of their interests in Workspace Property Management and the termination of the management agreement with Workspace Property Management upon completion of this offering. See "Pricing Sensitivity."

    We will issue an aggregate of 7,238,728 common shares and common units (based on the midpoint of the price range set forth on the front cover of this prospectus) to certain of our trustees, executive officers and employees (or their respective affiliates) in the formation transactions. See "Pricing Sensitivity Analysis."

    To the extent the underwriters exercise their over-allotment option, we will use up to $50.0 million of proceeds (before underwriting discounts) from the sale of additional common shares to acquire up to 3,703,704 common units (based on the midpoint of the price range set forth on the front cover of this prospectus) from SSOP LP. See "Certain Relationships and Related Transactions—Repurchase of Common Units."

    We expect to enter into employment agreements with certain of our executive officers that will take effect upon completion of this offering. For a description of the terms of these employment agreements, see "Executive and Trustee Compensation—Employment Agreements."

    We expect to enter into registration rights agreements with the entities and individuals receiving our common shares and common units in the formation transactions, including certain of our trustees and executive officers (or their affiliates). See "Shares Eligible for Future Sale—Registration Rights."

    We expect to enter into indemnification agreements with each of our executive officers, trustees and trustee nominees, whereby we will agree to indemnify our executive officers, trustees and trustee nominees against all expenses and liabilities and pay or reimburse their reasonable expenses in advance of final disposition of a proceeding to the fullest extent permitted by Maryland law if they are made or threatened to be made a party to the proceeding by reason of their service to our company, subject to limited exceptions. See "Certain Provisions of Maryland Law and Our Declaration of Trust and Bylaws—Limitation of Liability and Indemnification."

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Our Tax Status

        We intend to elect to be treated and to qualify as a REIT for U.S. federal income tax purposes beginning with our taxable year ending December 31, 2017. We believe we have been organized, have operated and will continue to be organized and operated in a manner that permits us to satisfy the requirements for taxation as a REIT under the applicable provisions of the Internal Revenue Code of 1986, as amended (the "Code"). To maintain REIT status, we must meet a number of organizational, ownership and operational requirements, including a requirement that we annually distribute at least 90% of our taxable income to our shareholders, computed without regard to the dividends paid deduction and excluding our net capital gain, plus 90% of our net income after tax from foreclosure property (if any), minus the sum of various items of excess non-cash income. We must also meet a number of requirements regarding the nature and composition of our assets and income.

        In any year in which we qualify as a REIT, we generally will not be subject to U.S. federal income tax on that portion of our taxable income or capital gain that is distributed to our shareholders. If we do not meet the applicable requirements, and the statutory relief provisions of the Code do not apply, we will lose our REIT status and be subject to entity-level income tax, including any applicable alternative minimum tax, on our taxable income at regular U.S. corporate tax rates. Even if we qualify as a REIT, we will be subject to certain U.S. federal, state and local taxes on our income and property and on taxable income that we do not distribute to our shareholders. See "Material U.S. Federal Income Tax Considerations."

Distribution Policy

        We intend to make regular quarterly distributions to our shareholders. We intend to declare a pro rata initial distribution with respect to the period commencing on the completion of this offering and ending June 30, 2018, based on a distribution of $0.135 per share for a full quarter. On an annualized basis, this would be $0.540 per share, or an annual distribution rate of approximately 4.0% (based on the midpoint of the price range set forth on the front cover of this prospectus). We estimate that this initial annual distribution rate will represent approximately 104.0% of estimated cash available for distribution to our common shareholders for the 12-month period ending June 30, 2018. We do not plan to reduce our intended initial annual distribution rate if the underwriters exercise their over-allotment option in full. We will be subject to prohibitions on distributions to our shareholders if we are in default under the new unsecured credit facilities we intend to enter into upon or shortly after the consummation of this offering as described in "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources." Furthermore, we plan to maintain this rate for the 12-month period following completion of this offering, unless circumstances change materially. All distributions will be made at the discretion of our board of trustees and will depend on our historical and projected results of operations, liquidity and financial condition and other factors our board of trustees deem relevant from time to time. No assurance can be given that our estimated cash available for distribution to our shareholders will be accurate or that our actual cash available for distribution to our shareholders will be sufficient to pay distributions to them at any expected level or at any particular yield, in an amount sufficient for us to continue to qualify as a REIT or to reduce or eliminate U.S. federal income taxes, or at all. See "Distribution Policy."

Restrictions on Ownership of Our Common Shares

        Generally, our declaration of trust provides that no person may beneficially own or be deemed to beneficially own by virtue of the attribution rules of the Code more than 9.8% in value of the aggregate of our outstanding shares of all classes or series or more than 9.8% in value or in number of shares, whichever is more restrictive, of the aggregate number of our outstanding common shares. See "Description of Shares—Restrictions on Ownership and Transfer."

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        In order for us to maintain our REIT qualification under the Code, not more than 50% in value of our outstanding capital stock may be owned, directly or indirectly, by five or fewer individuals (including certain entities treated as individuals for these purposes) during the last half of a taxable year, and at least 100 persons must beneficially own our outstanding shares for at least 335 days per 12-month taxable year, or during a proportionate part of a taxable year of less than 12 months. These tests apply commencing with our second taxable year as a REIT. To help ensure that we meet these tests, our declaration of trust provides that no holder may beneficially own or be deemed to beneficially own by virtue of the attribution rules of the Code more than 9.8% in value of the aggregate of our outstanding shares of all classes or series or more than 9.8% in value or in number of shares, whichever is more restrictive, of the aggregate number of our outstanding common shares. Our board of trustees may waive these ownership limits if it receives evidence that ownership in excess of the limits will not jeopardize our REIT status under the Code.

        The ownership limitations and restrictions on transfer will not apply if our board of trustees determines that it is no longer in our best interest to attempt to qualify, or to continue to qualify, as a REIT under the Code.

Restrictions on Redemption and Transfer

        Under the partnership agreement of our operating partnership, holders of common units do not have redemption or exchange rights, except under limited circumstances, until the later to occur of: (i) 12 months from the original date of issuance of the common units and (ii) the first business day of the first calendar month after the 12-month anniversary of the effectiveness of the registration statement of which this prospectus is a part. Transfers of units by limited partners and their assignees are subject to various conditions, including our right of first refusal, described under "Description of the Partnership Agreement of Workspace Property Trust, L.P.—Transfers and Withdrawals." We, our executive officers, trustees and the continuing investors that are receiving our common shares or common units in the formation transactions have agreed not to sell or transfer any common shares or securities convertible into, exchangeable for, exercisable for, or repayable with common shares, including common units, for 180 days after the date of this prospectus without first obtaining the written consent of the representatives of the underwriters, subject to certain exceptions. See "Underwriting."

Emerging Growth Company Status

        We are an "emerging growth company," as defined in the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act"), and we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not "emerging growth companies," including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act"), reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. We have not yet made a decision as to whether we will take advantage of any or all of these exemptions in the future. If we do take advantage of any of these exemptions, we do not know if some investors will find our common shares less attractive as a result. The result may be a less active trading market for our common shares and our share price may be more volatile.

        In addition, the JOBS Act also provides that an "emerging growth company" can take advantage of the extended transition period provided in the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. However, we have chosen to "opt out" of this extended transition period, and, as a result, we will comply with new

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or revised accounting standards on the relevant dates on which adoption of such standards is required for all public companies that are not emerging growth companies. Our decision to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable.

        We will remain an "emerging growth company" until the earliest to occur of (i) the last day of the fiscal year during which our total annual revenue equals or exceeds $1.07 billion (subject to adjustment for inflation), (ii) the last day of the fiscal year following the fifth anniversary of this offering, (iii) the date on which we have, during the previous three-year period, issued more than $1.0 billion in non-convertible debt or (iv) the date on which we are deemed to be a "large accelerated filer" under the Securities Exchange Act of 1934, as amended (the "Exchange Act").

Corporate Information

        Our principal executive offices are located at 700 Dresher Road, Suite 150, Horsham, Pennsylvania 19044. Our telephone number is (215) 328-2700. We maintain a website at http://www.workspaceproperty.com. Information contained on, or accessible through, our website is not incorporated by reference into and does not constitute a part of this prospectus or any other reports or documents we file with or furnish to the Securities and Exchange Commission ("SEC").

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This Offering

Common shares offered by us

  39,000,000 shares

Common shares to be outstanding upon completion of this offering

 

46,158,161 shares(1)

Common shares and common units to be outstanding upon completion of this offering and the formation transactions (excluding common units held by us)

 

76,895,042 common shares and common units(1)(2)

Use of proceeds

  We estimate that the net proceeds to us from the sale of            common shares in this offering, after deducting underwriting discounts and estimated offering expenses, will be approximately $472.1 million ($499.2 million if the underwriters exercise their option to purchase up to additional common shares in full), in each case based on the midpoint of the price range set forth on the front cover of this prospectus. We will contribute the net proceeds from this offering, other than the net proceeds from the sale of additional common shares pursuant to the underwriters' exercise of their over-allotment option, if any, we will use to acquire common units described below, to our operating partnership in exchange for common units. We expect our operating partnership to use a portion of the net proceeds received from us to:

repay approximately $215.7 million in outstanding indebtedness under the KeyBank Loan Agreement;

repay approximately $163.2 million of outstanding indebtedness under a senior mortgage loan and three mezzanine loans we entered into in connection with the acquisition of our second portfolio; and

pay approximately $63.6 million in cash in connection with the redemption of the mandatorily redeemable preferred equity our operating partnership issued in connection with our acquisition of our second portfolio. See "Structure and Formation of Our Company—Formation Transactions—Redemption of Mandatorily Redeemable Preferred Equity."

 

We expect our operating partnership to use any remaining net proceeds received from us for general corporate purposes, including capital expenditures and potential future acquisition opportunities.

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To the extent the underwriters exercise their over-allotment option, we will use up to $50.0 million of proceeds (before underwriting discounts) from the sale of additional common shares to acquire up to 3,703,704 common units (based on the midpoint of the price range set forth on the front cover of this prospectus) from SSOP LP. See "Certain Relationships and Related Transactions—Repurchase of Common Units." We will contribute any remaining net proceeds from the sale of such additional common shares to our operating partnership in exchange for common units. We expect our operating partnership to use any such net proceeds received from us for general corporate purposes, including capital expenditures and potential future acquisition opportunities.

Risk Factors

 

Investing in our common shares involves a high degree of risk. You should carefully read and consider the information set forth under the heading "Risk Factors" beginning on page 24 and other information included in this prospectus before investing in our common shares.

Proposed NYSE symbol

 

WSPT.


(1)
Includes (i) 39,000,000 common shares to be issued in this offering, (ii) 6,996,345 common shares to be issued in connection with the formation transactions (based on the midpoint of the price range set forth on the front cover of this propsectus) and (iii) 137,741 restricted share units subject to time-based vesting to be granted to eligible non-executive employees and 24,075 restricted share units subject to time-based vesting to be granted to our independent trustees concurrently with the completion of this offering (in each case, based on the midpoint of the price range set forth on the front cover of this prospectus). Excludes (a) 5,850,000 common shares issuable upon the exercise in full of the underwriters' over-allotment option, (b) 137,741 performance share units to be granted to eligible non-executive employees concurrently with the completion of this offering (based on the midpoint of the price range set forth on the front cover of this prospectus), (c) 3,064,897 common shares available for future issuance under our 2017 Incentive Award Plan (based on the midpoint of the price range set forth on the front cover of this prospectus) and (d) 30,120,212 common shares that may be issued, at our option, upon exchange of 30,120,212 common units to be issued in the formation transactions (based on the midpoint of the price range set forth on the front cover of this propsectus).

(2)
Includes 30,120,212 common units expected to be issued in the formation transactions and 283,336 LTIP units subject to time-based vesting to be granted to our executive officers and 333,333 fully vested LTIP units to be granted to certain of our executive officers concurrently with the completion of this offering (in each case, based on the midpoint of the price range set forth on the front cover of this prospectus). Excludes 1,703,702 LTIP units subject to performance-based vesting to be granted to our executive officers concurrently with the completion of this offering (such number of LTIP units determined based on the midpoint of the price range set forth on the front cover of this prospectus using the maximum number of LTIP units that may vest).

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Summary Consolidated Historical and Pro Forma Financial and Other Data

        The following table sets forth summary financial and other data on (i) an historical basis for our predecessor and (ii) a pro forma basis for our company after giving effect to the completion of this offering, the formation transactions and the other adjustments described in the unaudited pro forma consolidated financial statements beginning on page F-3. We have not presented historical data for Workspace Property Trust because we have not had any corporate activity since our formation other than the issuance of common shares in connection with our initial capitalization and activity in connection with this offering and the formation transactions. Accordingly, we do not believe that a discussion of the historical results of Workspace Property Trust would be meaningful. Prior to or concurrently with the completion of this offering, we will consummate the formation transactions pursuant to which we will become the sole general partner of our operating partnership. Upon completion of the formation transactions, substantially all of our assets will be held by, and substantially all of our operations will be conducted through, our operating partnership. We will contribute the net proceeds received by us from this offering, other than the net proceeds from the sale of additional common shares pursuant to the underwriters' exercise of their over-allotment option, if any, we will use to acquire common units as described under "Use of Proceeds," to our operating partnership in exchange for common units. For more information regarding our predecessor, our operating partnership and the formation transactions, please see "Structure and Formation of Our Company."

        The historical financial data as of December 31, 2016 and 2015 and for the year ended December 31, 2016, the period December 3, 2015 (when our predecessor commenced operations) to December 31, 2015 and the period January 1, 2015 to December 2, 2015 has been derived from our predecessor's audited combined consolidated financial statements included elsewhere in this prospectus. The historical financial data as of June 30, 2017 and for each of the six months ended June 30, 2017 and 2016 has been derived from our predecessor's unaudited combined consolidated financial statements included elsewhere in this prospectus and includes all adjustments, consisting of normal accruals, that management considers necessary to present fairly the information set forth therein.

        The unaudited pro forma consolidated financial data as of and for the six months ended June 30, 2017 and for the year ended December 31, 2016 is presented as if this offering, the formation transactions and the other adjustments described in the unaudited pro forma consolidated financial statements had occurred on June 30, 2017 for purposes of the unaudited pro forma consolidated balance sheet and as of January 1, 2016 for purposes of the unaudited pro forma consolidated statements of operations. Our unaudited pro forma consolidated financial data is not necessarily indicative of what our actual financial condition and results of operations would have been as of the date and for the periods indicated, nor does it purport to represent our future financial condition or results of operations.

        You should read the following selected financial data in conjunction with our predecessor's historical combined consolidated financial statements, our unaudited pro forma consolidated financial statements and, in each case, the related notes thereto, along with "Management's Discussion and

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Analysis of Financial Condition and Results of Operations," which are included elsewhere in this prospectus.

 
   
   
   
   
  Workspace Ownership Period    
  Prior
Ownership
Period
 
 
   
  Workspace
Ownership Period
   
   
 
 
  Pro Forma    
   
  Period from
December 3,
2015
(commencement
of operations) to
December 31,
2015
   
 
 
  Pro Forma    
   
  Period from
January 1,
2015 to
December 2,
2015
 
 
  Six Months Ended June 30,    
   
 
 
  Year Ended
December 31,
2016
  Year Ended
December 31,
2016
   
 
(Dollars in thousands, except per share data)
  2017   2017   2016    
 
   
 
 
  (Unaudited)
  (Unaudited)
  (Unaudited)
  (Unaudited)
   
   
   
   
 

Statement of Operations Data

                                               

Revenues:

                                               

Rental revenue

  $ 59,447     $59,447     $14,878   $ 118,976     $51,467     $2,319       $ 23,083  

Tenant reimbursements

    33,234     33,234     8,458     61,321     27,338     1,139         15,521  

Other revenue

    662     662     77     4,601     3,952     10         115  

Total revenue

    93,343     93,343     23,413     184,898     82,757     3,468         38,719  

Expenses:

                                               

Operating expenses

    22,082     22,082     5,640     35,330     17,531     773         9,564  

Real estate taxes

    11,731     11,731     2,528     23,071     9,611     399         4,747  

Depreciation and amortization

    46,393     46,393     10,381     93,876     41,129     1,855         9,632  

Transaction related costs

                213     213     778          

General and administrative

    9,493     7,269     1,293     11,598     5,644     308         8  

Management fees and allocated costs

                                3,199  

Total expenses

    89,699     87,475     19,842     164,088     74,128     4,113         27,150  

Operating income (loss)

    3,644     5,868     3,571     20,810     8,629     (645 )       11,569  

Other income (expenses):

                                               

Interest expense

    (23,958 )   (45,073 )   (6,597 )   (46,084 )   (31,545 )   (1,030 )        

Loss on extinguishment of debt

                (1,093 )   (1,093 )            

Unrealized gain (loss) on derivative instruments             

    96     96     (845 )   (781 )   (781 )   (140 )        

Net income (loss)

  $ (20,218 )   $(39,109 )   $(3,871 ) $ (27,148 )   $(24,790 ) $ (1,815 )     $ 11,569  

Per Share Data:

                                               

Pro forma loss per share—basic and diluted

  $ (0.26 )             $ (0.35 )                      

Pro forma weighted average common shares outstanding—basic and diluted

    45,996                 45,996                        

 

 
   
  Workspace Ownership Period  
 
  Pro Forma  
 
   
  December 31, 2016   December 31, 2015  
(Dollars in thousands)
  June 30, 2017   June 30, 2017  
 
  (Unaudited)
  (Unaudited)
   
   
 

Balance Sheet Data

                         

Real estate properties, net

  $ 1,043,826   $ 1,043,826   $ 1,054,968   $ 231,314  

Total assets

    1,239,766     1,231,427     1,260,490     264,705  

Mortgages and other loan payables, net

    644,074     1,013,956     1,008,073     205,567  

Redeemable preferred equity, net

        104,297     99,585      

Total liabilities

    695,481     1,175,159     1,150,929     218,715  

Total equity

    544,285     56,268     109,561     45,990  

Total liabilities and equity

    1,239,766     1,231,427     1,260,490     264,705  

Number of rental properties (at end of period)

   
148
   
148
   
148
   
40
 

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  Workspace Ownership Period    
  Prior
Ownership
Period
 
 
   
  Workspace
Ownership Period
   
   
 
 
  Pro Forma    
   
  Period from
December 3,
2015
(commencement
of operations) to
December 31,
2015
   
 
 
  Pro Forma    
   
  Period from
January 1,
2015 to
December 2,
2015
 
 
  Six Months Ended June 30,    
   
 
 
  Year Ended
December 31,
2016
  Year Ended
December 31,
2016
   
 
 
  2017   2017   2016    
 
(Dollars in thousands)
   
 
 
  (Unaudited)
  (Unaudited)
  (Unaudited)
  (Unaudited)
   
   
   
   
 

Other Data

                                               

Net cash provided by (used in) operating activities

          $25,055     $6,456           $25,799     $(213 )       $16,587  

Net cash used in investing activities

          (6,529 )   (565 )         (975,547 )   (238,449 )       (4,083 )

Net cash provided by (used in) financing activities

          (13,599 )   (2,463 )         980,513     (242,392 )       (12,582 )

NOI(1)

  $ 58,289               $ 122,944                        

Adjusted EBITDA(1)

    52,261                 120,809                        

FFO(1)

    26,165                 66,728                        

Core FFO(1)

    26,069                 68,815                        

(1)
See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures" for a definition of this metric and reconciliation of this metric to the most directly comparable GAAP number and a statement of why our management believes the presentation of the metric provides useful information to investors and, to the extent material, any additional purposes for which management uses the metric.

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RISK FACTORS

        An investment in our common shares involves a high degree of risk. You should carefully consider the following material risks, as well as the other information contained in this prospectus, before making an investment in our company. If any of the following risks actually occur, our business, financial condition or results of operations could be materially and adversely affected. In such an event, the trading price of our common shares could decline and you could lose part or all of your investment.


Risks Related to Our Business and Operations

Adverse market and economic conditions in the United States and globally could adversely affect occupancy levels, rental rates, rent collections, operating and development expenses and the overall value of our assets, and could have a material adverse effect on our results of operations, financial condition, cash flow and our ability to service our debt and to make distributions to our shareholders.

        Our business may be affected by market and economic challenges experienced by the U.S. economy and real estate industry as a whole, including volatility in the financial and credit markets and general global economic uncertainty. Our business, results of operations, financial condition, cash flow and ability to service our debt and to make distributions to our shareholders may be adversely affected by the following conditions, among others:

    significant job losses in the industries in which our tenants do business (including manufacturing, finance, insurance, real estate, healthcare, transportation and communication industries), which may decrease demand for our office and flex properties, causing market rental rates and property values to be negatively impacted;

    decline in the financial condition of our tenants, as a result of which we may see increases in bankruptcies of, and defaults by, our tenants and we may experience higher vacancy rates and delays in re-leasing vacant space;

    availability of financing on terms and conditions that we find acceptable or at all, which could reduce our ability to pursue acquisition or development opportunities and refinance existing debt, reduce our returns from both our existing operations and our acquisition and development activities, and increase our future interest expense; and

    declines in the market values of our properties, which may limit our ability to dispose of properties at attractive prices or to obtain debt financing secured by our properties and also may reduce the availability of unsecured loans.

Substantially all of our rental revenue is derived from properties located in our markets, and adverse economic or other developments in our markets could negatively affect our results of operations, financial condition and ability to service our debt and to make distributions to our shareholders.

        Our properties are located in the Philadelphia, South Florida, Tampa, Minneapolis and Phoenix markets. As a result, we are particularly susceptible to adverse economic or other developments in these markets, such as periods of general or industry economic slowdown or recession, business lay-offs or downsizing, relocations of businesses, increases in real estate and other taxes, and the cost of complying with current or new governmental regulations, as well as to natural disasters and other disruptions that occur in such markets. Our operations also may be affected if competing properties are built in our markets. We cannot assure you that our markets will grow or that underlying real estate fundamentals will be favorable to owners, operators and developers of office and flex properties. Any adverse developments in our markets could materially reduce the value of our real estate portfolio and our rental revenues, and thus adversely affect our business, results of operations, financial condition and ability to service our debt and to make distributions to our shareholders.

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We may be unable to identify and execute on acquisitions that meet our criteria, which may impede our growth.

        We intend to continue to acquire properties consistent with our investment strategy and may attempt to acquire properties when strategic opportunities exist. However, we may be unable to acquire any of the properties identified as potential acquisition opportunities under "Business and Properties—Acquisition Pipeline" or that we may identify in the future on the terms we expect or at all. Our ability to acquire properties on favorable terms or at all may be subject to the following risks, among others:

    competition from other real estate owners, operators, developers and investors with significant capital, including publicly traded REITs, private equity investors and institutional investment funds, which may be able to accept more risk than we can prudently manage, including risks with respect to the geographic proximity of investments and the payment of higher acquisition prices;

    we may incur significant costs and divert management attention in connection with evaluating and negotiating potential acquisitions, including ones that we are subsequently unable to complete;

    even if we enter into agreements for the acquisition of properties, these agreements are subject to customary conditions to closing, including the satisfactory completion of our due diligence investigations; and

    we may be unable to finance the acquisition on favorable terms or at all.

        In addition, failure to identify or complete acquisitions of suitable properties could slow our growth. If we are unable to finance property acquisitions or acquire properties on favorable terms or at all, our business, results of operations, financial condition and ability to service our debt and to make distributions to our shareholders may be adversely affected.

Our future acquisitions may not yield the returns we expect.

        Our future acquisitions and our ability to successfully operate the properties we acquire in such acquisitions may be exposed to the following risks, among others:

    even if we are able to acquire a desired property, competition from other potential acquirers may significantly increase the purchase price;

    we may acquire properties that are not accretive to our results upon acquisition, and we may not successfully manage and lease those properties to meet our expectations;

    our cash flow may be insufficient to meet our required principal and interest payments;

    we may spend more than budgeted amounts to make necessary improvements or renovations to acquired properties;

    we may be unable to quickly and efficiently integrate new acquisitions, particularly acquisitions of portfolios of properties, into our existing operations; and

    market conditions may result in higher than expected vacancy rates and lower than expected rental rates.

        If we cannot operate acquired properties to meet our financial expectations, our business, results of operations, financial condition and ability to service our debt and to make distributions to our shareholders may be adversely affected.

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We have a limited operating history and may not be able to operate our business successfully or implement our business strategy.

        Upon completion of the offering and consummation of the formation transactions, we will own 148 properties totaling 9.9 million rentable square feet. We acquired our first portfolio in December 2015 and our second portfolio in October 2016. As such, we have a limited operating history, and an investment in our common shares may entail more risk than an investment in a real estate company with a substantial operating history. You should consider our prospects in light of the risks, uncertainties and difficulties frequently encountered by companies that, like us, are in their early stage of operations. Such risks include, among others:

    insufficient capital to fully realize our operating or investment strategy and objectives;

    our ability to identify and complete future acquisitions that meet our acquisition criteria and further our investment strategy and objectives;

    our ability to attract, integrate, motivate and retain qualified personnel to manage our operations;

    our ability to respond to competition in an environment characterized by well-capitalized competitors; and

    our ability to be continuously aware of, and correctly interpret, marketing trends and conditions.

        Certain data in this prospectus has been provided by third-party sellers in connection with our acquisition of our first portfolio and our second portfolio, including percent leased information for our properties prior to our acquisition. Although we believe such data is reliable, we can provide no assurance as to its accuracy. Furthermore, there can be no assurance that our senior management team will replicate its success in its previous endeavors, and our investment returns and other performance measures could be substantially lower than the returns and other performance measures achieved by their previous endeavors.

We have no operating history as a REIT or a publicly traded company and may not be able to successfully operate as a REIT or a publicly traded company.

        We have no operating history as a REIT or a publicly traded company. We cannot assure you that the past experience of our senior management team will be sufficient to successfully operate our company as a REIT or a publicly traded company, including the requirements to timely meet disclosure requirements of the SEC and comply with the Sarbanes-Oxley Act. Upon completion of this offering, we will be required to develop and implement control systems and procedures in order to qualify and maintain our qualification as a REIT and satisfy our periodic and current reporting requirements under applicable SEC regulations and comply with NYSE listing standards, and this transition could place a significant strain on our management systems, infrastructure and other resources. Failure to operate successfully as a public company or maintain our qualification as a REIT would have an adverse effect on our financial condition, results of operations, cash flow and per share trading price of our common shares.

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We may not be able to effectively manage our growth, and any failure to do so may have an adverse effect on our business and operating results.

        Since 2015, we have experienced rapid growth through the acquisition of 148 properties. Our future operating results will depend, in part, on our ability to effectively manage our growth, which is, in turn, dependent upon our ability to:

    successfully integrate and operate new acquisitions, including the integration of such acquisitions into our financial and operational reporting infrastructure and internal control framework in a timely manner;

    stabilize and manage an increasing number of properties and tenant relationships across our portfolio and control or adjust our operating expenses;

    identify and supervise a number of suitable third parties on which we rely to provide certain services outside of property management to our properties;

    attract, integrate and retain new management and operations personnel; and

    continue to improve our operational and financial controls and reporting procedures and systems.

        In addition, if we decide to expand beyond our current markets, we will not possess the same level of familiarity with the dynamics and conditions of the new markets we may enter, which could adversely affect the results of our expansion into those markets. We can provide no assurance that we will be able to manage our properties or grow our business efficiently or effectively or without incurring significant additional expenses. Any failure to do so may have an adverse effect on our business, results of operations, financial condition and ability to service our debt and to make distributions to our shareholders.

We may be subject to unknown or contingent liabilities related to properties or businesses that we acquire for which we may have limited or no recourse against the sellers.

        Assets and entities that we have acquired or may acquire in the future may be subject to unknown or contingent liabilities for which we may have limited or no recourse against the sellers. Unknown or contingent liabilities might include liabilities for clean-up or remediation of environmental conditions, claims of customers, vendors or other persons dealing with the acquired entities, tax liabilities and other liabilities whether incurred in the ordinary course of business or otherwise. In the future we may enter into transactions with limited representations and warranties or with representations and warranties that do not survive the closing of the transactions, in which event we would have no or limited recourse against the sellers of such properties. While we usually require the sellers to indemnify us with respect to breaches of representations and warranties that survive the closing of the transactions, such indemnification is often limited and subject to various materiality thresholds, a significant deductible or an aggregate cap on losses. As a result, there is no guarantee that we will recover any amounts with respect to losses due to breaches by the sellers of their representations and warranties. In addition, the total amount of costs and expenses that we may incur with respect to liabilities associated with acquired properties and entities may exceed our expectations, which may adversely affect our business, financial condition and results of operations. Finally, indemnification agreements between us and the sellers may provide that the sellers will retain certain specified liabilities relating to the assets and entities acquired by us. While the sellers are generally contractually obligated to pay all losses and other expenses relating to such retained liabilities, there can be no guarantee that such arrangements will not require us to incur losses or other expenses as well.

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We face significant competition, which may impede our ability to attract or retain tenants and maintain our rental rates.

        We compete with numerous developers, owners and operators of office and flex properties, many of which own properties similar to ours in the same submarkets in which our properties are located. If our competitors offer space at rental rates below current market rates, or below the rental rates we currently charge our tenants, we may lose existing or potential tenants and we may be pressured to reduce our rental rates below those we currently charge or to offer more substantial rent abatements, tenant improvements, early termination rights or below-market renewal options in order to retain tenants when our tenants' leases expire. As a result, our business, results of operations, financial condition and ability to service our debt and to make distributions to our shareholders may be adversely affected.

Our dependence on rental income may adversely affect us, including our profitability, our ability to meet our debt service and other financial obligations and our ability to make distributions to our shareholders.

        Our financial performance depends on our ability to collect rent from tenants. Our results of operations, financial condition and ability to service our debt and to make distributions to our shareholders would be adversely affected if a significant number of our tenants, or any of our major tenants, (i) delay lease commencements, (ii) decline to extend or renew leases upon expiration, (iii) fail to make rental payments when due or (iv) declare bankruptcy. Any of these actions could result in the termination of the tenants' leases with us and the loss of rental income attributable to the terminated leases. In these events, we cannot assure you that such tenants will renew those leases or that we will be able to re-lease spaces on economically advantageous terms or at all. The loss of rental revenues from our tenants and our inability to replace such tenants may adversely affect our results of operations, financial condition and ability to service our debt and to make distributions to our shareholders.

The actual rents we receive for the properties in our portfolio may be less than our asking rents, and we may experience lease roll down from time to time.

        As a result of various factors, including competitive pricing pressure in our markets, the desirability of our properties compared to other properties in our markets and adverse conditions in the real estate market generally, we may be unable to realize the asking rents across the properties in our portfolio. In addition, the degree of discrepancy between our asking rents and the actual rents we are able to obtain may vary both from property to property and among different leased spaces within a single property. If we are unable to obtain rental rates that are on average comparable to our asking rents across our portfolio, our ability to generate cash flow growth will be negatively impacted. In addition, depending on asking rental rates at any given time as compared to expiring leases in our portfolio, from time to time rental rates for expiring leases may be higher than starting rental rates for new leases.

We may suffer adverse consequences if our rental revenues decline because our operating costs do not necessarily decline proportionally.

        Our operating costs do not necessarily fluctuate in relation to changes in our rental revenue and many of the expenses associated with our business, such as real estate taxes, acquisition, renovation and maintenance costs, and other general corporate expenses are relatively inflexible. Some components of our fixed assets depreciate more rapidly and require ongoing capital expenditures. Our expenses and ongoing capital expenditures also are affected by inflationary increases and certain of our cost increases may exceed the rate of inflation in any given period or market. By contrast, our rental revenue is affected by many factors beyond our control, such as the availability of alternative office and flex space and economic conditions in our markets. As a result, we may not be able to fully offset rising costs and capital spending by increasing rental rates. Additionally, if our operating costs increase but our rental

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revenues do not, we may be forced to borrow to cover our costs and we may incur losses. Such losses may adversely affect our results of operations, financial condition and ability to service our debt and to make distributions to our shareholders.

The inability to pay rent, bankruptcy or insolvency of any of our tenants could adversely affect our results of operations, financial condition and ability to service our debt and to make distributions to our shareholders.

        If a tenant defaults, we may experience delays and incur substantial costs in enforcing our rights as landlord and protecting our investments. If a tenant files for bankruptcy, we cannot evict the tenant solely because of the bankruptcy and, following a potential court judgment rejecting and terminating such tenant's lease (which would subject all future unpaid rent to a statutory cap), we may be unable to replace the defaulting tenant with a new tenant at a comparable rental rate without incurring significant expenses or a reduction in rental income. Moreover, if a tenant or lease guarantor files for bankruptcy, we will become a creditor of such entity, but may not be able to collect all pre-bankruptcy amounts owed by such entity. In addition, a tenant that files for bankruptcy protection may terminate its lease with us under federal law, in which event we would have a general unsecured claim against such tenant that would likely be worth less than the full amount owed to us for the remainder of the lease term. The inability to pay rent, bankruptcy or insolvency of any of our tenants could adversely affect our results of operations, financial condition and ability to service our debt and to make distributions to our shareholders.

We may be required to make rent or other concessions and/or significant capital expenditures to improve our properties in order to retain and attract tenants, which could adversely affect our results of operations, financial condition and ability to service our debt and to make distributions to our shareholders.

        As of June 30, 2017, we had approximately 944,704 rentable square feet of available space for lease (excluding signed but not commenced leases). In addition, as of June 30, 2017, leases representing approximately 56.9% of our total annualized rent and approximately 50.4% of the rentable square footage of the properties in our portfolio were scheduled to expire by the end of 2020. We may be unable to renew such expiring leases or our properties may not be re-leased at rental rates equal to or above the current average rental rates.

        When we renew leases or lease to new tenants, we may be required to make rent or other concessions to tenants, accommodate requests for renovations, build-to-suit remodeling and other improvements, or provide additional services to our tenants. As a result, we may have to make significant capital or other expenditures in order to retain tenants whose leases expire or to attract new tenants in sufficient numbers. We may need to raise capital or incur additional indebtedness to make such expenditures. If we are unable to do so or capital is otherwise unavailable, we may be unable to make the required expenditures. This could result in non-renewals by tenants upon expiration of their leases, which could adversely affect our results of operations, financial condition and ability to service our debt and to make distributions to our shareholders.

        In addition, to the extent we undertake build-to-suit or other property improvements that significantly modify a property to meet the needs of a particular tenant, if the current lease is terminated or not renewed, we may be required to renovate the property at substantial costs, decrease the rent we intend to charge or provide other concessions in order to lease the property to another tenant. If the rental rates of our properties decrease, our existing tenants do not renew their leases or we do not re-lease a significant portion of our available and soon-to-be-available space, our results of operations, financial condition and ability to service our debt and to make distributions to our shareholders could be adversely affected.

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Adverse developments concerning the industries in which our tenants are concentrated could adversely affect our results of operations, financial condition and ability to service our debt and to make distributions to our shareholders.

        We have tenants concentrated in various industries that may be adversely affected by current or future economic conditions. For instance, tenants in the finance, insurance and real estate industry, healthcare services industry, manufacturing industry and business services industry accounted for 17.7%, 16.8%, 15.6% and 13.9%, respectively, of our annualized rent as of June 30, 2017. If any of these industries suffered a downturn and/or our tenants became insolvent, declared bankruptcy or otherwise refused to pay rent in a timely manner or at all, our results of operations, financial condition and ability to service our debt and to make distributions to our shareholders could be adversely affected.

Leasing office or flex space to start-up and growth-oriented businesses carries the risk of interruption to our cash flow.

        Some of our tenants are smaller, growth-oriented businesses that may have shorter operating histories and lesser financial strength as compared to more established and larger corporate tenants. Start-up and growth-oriented businesses generally experience a higher rate of turnover on real estate leases than their larger counterparts because they have a higher rate of failure than larger businesses, and if they are successful, are likely to outgrow their space and seek alternative office or flex space. Leasing space to such smaller companies could create a higher rate of tenant turnover and lease defaults, which could negatively impact our cash flow and business and adversely affect our results of operations, financial condition and ability to service our debt and to make distributions to our shareholders.

Illiquidity of real estate could impede our ability to react quickly in response to changes in economic and other market conditions.

        Real estate investments are relatively illiquid. Such illiquidity may limit our ability to react quickly in response to changes in economic and other market conditions. If we want to sell an investment, we might not be able to dispose of that investment in the time period we desire due to prevailing economic and market conditions, and the sales price of that investment might not recoup or exceed the amount of our investment. Our inability to sell our properties on favorable terms or at all could have an adverse effect on our sources of working capital and our ability to satisfy our debt obligations. The provisions in the Code, and related Treasury regulations on a REIT holding property for sale also may restrict our ability to sell property. The limitations on our ability to sell our investments could adversely affect our ability to change or reduce our portfolio quickly in response to changes in economic or other market conditions, which could adversely affect our results of operations, financial condition and ability to service our debt and to make distributions to our shareholders.

We may acquire properties or portfolios of properties through tax-deferred contribution transactions, which could result in shareholder dilution and limit our ability to sell such assets.

        In the future, we may acquire properties or portfolios of properties through tax-deferred contribution transactions in exchange for partnership interests in our operating partnership, which may result in shareholder dilution if we elect to issue common shares upon redemption of partnership interests in our operating partnership. This acquisition structure may have the effect of, among other things, reducing the amount of tax depreciation we could deduct over the tax life of the acquired properties, and may require that we agree to protect the contributors' ability to defer recognition of taxable gain through restrictions on our ability to dispose of the acquired properties and/or the allocation of partnership debt to the contributors to maintain their tax bases. These restrictions could limit our ability to sell an asset at a time or on terms that would be favorable absent such restrictions.

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Our properties may be subject to impairment charges.

        On a quarterly basis, we will assess whether there are any indicators that the value of our properties may be impaired. A property's value is considered to be impaired only if the estimated aggregate future cash flows (undiscounted and without interest charges) to be generated by the property are less than the carrying value of the property. In our estimate of cash flows, we will consider factors such as expected future operating income, trends and prospects, the effects of demand, competition and other factors. If we are evaluating the potential sale of an asset or development alternatives, the undiscounted future cash flows analysis will consider the most likely course of action at the balance sheet date based on current plans, intended holding periods and available market information. We will be required to make subjective assessments as to whether there are impairments in the value of our properties. These assessments may be influenced by factors beyond our control, such as early vacating by a tenant or damage to properties due to earthquakes, tornadoes, hurricanes and other natural disasters, fire, civil unrest, terrorist acts or acts of war. These assessments may have a direct impact on our earnings because recording an impairment charge results in an immediate negative adjustment to earnings. There can be no assurance that we will not take impairment charges in the future related to the impairment of our properties. Any such impairment could have a material adverse effect on our business, financial condition and results of operations in the period in which the charge is taken.

We have recorded net losses in the past and we may continue to record net losses in the future.

        We have recorded consolidated net losses in the six months ended June 30, 2017, in the year ended December 31, 2016, and from December 3, 2015 (when our predecessor commenced operations) through December 31, 2015. These net losses were inclusive in each period of significant depreciation and amortization and interest expense. We expect such depreciation and amortization and interest expense to continue to be significant in future periods and, as a result, we may continue to record net losses in future periods.

We are exposed to risks associated with property development.

        As part of our operating strategy, we may acquire land for development or construct on owned land (including build-to-suit renovations and new developments for anticipated tenants). To the extent that we do so, we will be subject to certain risks, including:

    availability and pricing of financing for development projects on favorable terms or at all;

    availability and timely receipt of zoning and other regulatory approvals;

    development costs higher than anticipated;

    contractor and subcontractor disputes, strikes, labor disputes or supply disruptions;

    failure to complete construction and lease-up on schedule or within budget, which may result in cost overruns and increase debt service expense and construction and other costs;

    delays with respect to obtaining, or the inability to obtain, necessary zoning, occupancy, land use and other governmental permits and changes in zoning and land use laws; and

    failure to rent the development at rent levels originally contemplated or at all.

        These risks could result in substantial unanticipated delays or expenses and could prevent the initiation or the completion of development activities, any of which could have an adverse effect on our results of operations, financial condition and ability to service our debt and to make distributions to our shareholders.

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We may be subject to unknown or contingent liabilities related to our first portfolio and our second portfolio for which we may have limited recourse against the seller.

        We acquired our first portfolio, comprised of 40 office and flex properties and one land parcel, on December 3, 2015 and our second portfolio, comprised of 108 office and flex properties and two land parcels, on October 3, 2016. Although we acquired our first portfolio and our second portfolio from an institutional seller and conducted due diligence in connection with these acquisitions, the properties and land parcels in our first portfolio and our second portfolio may be subject to unknown or contingent liabilities for which we may have limited recourse against the seller. Unknown or contingent liabilities might include liabilities for clean-up or remediation of environmental conditions, claims of tenants, service providers or other persons dealing with the these properties and land parcels, tax liabilities and other liabilities whether incurred in the ordinary course of business or otherwise. The seller of our first portfolio and our second portfolio is required to indemnify us with respect to its breaches of representations and warranties. However, such indemnification is somewhat limited and is subject to various survival periods (which, subject to certain exceptions, have expired), materiality thresholds, deductibles and aggregate caps on losses, with minimal exceptions. Because many unknown or contingent liabilities may not be identified within such periods and may be limited by such materiality thresholds, deductibles and aggregate caps on losses, we may have limited or no recourse against the seller for such liabilities. As a result, any unknown or contingent liability that we assumed in connection with our acquisition of our first portfolio or our second portfolio could adversely affect our business, results of operations, financial condition and ability to service our debt and to make distributions to our shareholders.

Property ownership through joint ventures could subject us to the contrary business objectives of our co-venturers.

        While we do not currently own any properties through joint ventures, in the future, from time to time, we may invest in joint ventures or partnerships in which we do not hold a controlling interest in the assets underlying the entities in which we invest, including joint ventures in which we own a direct interest in an entity which controls such assets or we own a direct interest in an entity which owns indirect interests, through one or more intermediaries, of such assets. These joint venture investments involve risks that do not exist with properties in which we own a controlling interest with respect to the underlying assets, including the possibility that:

    our co-venturers or partners may, at any time, become insolvent or otherwise refuse to make capital contributions when due;

    we may be responsible to our co-venturers or partners for indemnifiable losses;

    we may become liable with respect to guarantees of payment or performance by the joint ventures;

    we may become subject to buy-sell arrangements which could cause us to sell our interests or acquire our co-venturer's or partner's interests in a joint venture; or

    our co-venturers or partners may, at any time, have business, economic or other objectives that are inconsistent with our objectives.

        Because we lack a controlling interest, our co-venturers or partners may be in a position to take action contrary to our instructions or requests or contrary to our policies or objectives. These contrary actions may implicate compliance with the REIT requirements, and our REIT status could be jeopardized if any of our joint ventures does not operate in compliance with the REIT requirements. While we seek protective rights against such contrary actions, there can be no assurance that we will be successful in procuring any such protective rights, or if procured, that the rights will be sufficient to fully protect us against contrary actions. Our organizational documents do not limit the amount of

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available funds that we may invest in joint ventures or partnerships. If the objectives of our co-venturers or partners are inconsistent with ours, it may adversely affect our results of operations, financial condition and ability to service our debt and to make distributions to our shareholders.

We are dependent on our key personnel whose continued service is not guaranteed, and the departure of any of our key personnel could materially and adversely affect us.

        Our continued success and our ability to manage anticipated future growth depend, in large part, upon the efforts of key personnel, particularly Thomas A. Rizk, our Chairman and Chief Executive Officer, Roger W. Thomas, our President and Chief Operating Officer, Christopher B. Allen, our Executive Vice President and Chief Financial Officer, and Leo P. Nolan, our Senior Vice President and Chief Investment Officer, who have extensive market knowledge and relationships and exercise substantial influence over our operational, financing, acquisition and disposition activity. Among the reasons that they are important to our success is that each has a national or regional industry reputation that attracts business and investment opportunities and assists us in negotiations with lenders, existing and potential tenants and industry personnel. If we lose their services, our relationships with such personnel could diminish.

        Many of our other senior executives also have extensive experience and strong reputations in the real estate industry, which aid us in identifying opportunities, having opportunities brought to us and negotiating with tenants and build-to-suit prospects. The loss of services of one or more members of our senior management team, or our inability to attract and retain highly qualified personnel, could adversely affect our business, diminish our investment opportunities and weaken our relationships with lenders, business partners, existing and prospective tenants and industry personnel, which could adversely affect our results of operations, financial condition and ability to service our debt and to make distributions to our shareholders.

Competition for skilled personnel could increase our labor costs.

        We compete intensely with various other companies in attracting and retaining qualified and skilled personnel. We depend on our ability to attract and retain skilled management personnel in order to successfully manage the day-to-day operations of our company. Competitive pressures may require that we enhance our pay and benefits package to compete effectively for such personnel. We may not be able to offset such added costs by increasing the rates we charge our tenants. If there is an increase in these costs or if we fail to attract and retain qualified and skilled personnel, our business and operating results could be harmed.

We rely on information technology in our operations, therefore security breaches and other disruptions could compromise our information and expose us to liability, which would cause our business and reputation to suffer.

        In the ordinary course of our business, we collect and store sensitive data, including intellectual property, our proprietary business information and that of our tenants and business partners, including personally identifiable information of our tenants and employees, in our data centers and on our networks. Despite our security measures, our information technology and infrastructure may be vulnerable to attacks by hackers or breached due to employee error, malfeasance or other disruptions. Any such breach could compromise our networks and the information stored there could be accessed, publicly disclosed, lost or stolen. Any such access, disclosure or other loss of information could result in legal claims or proceedings, liability under laws that protect the privacy of personal information, disrupt our operations, and damage our reputation, which could adversely affect our business. We also may incur costs to remedy damage caused by such disruptions.

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A material weakness has been identified in our internal control over financial reporting. If we fail to implement and maintain effective internal control over financial reporting, we may be unable to report our financial results accurately on a timely basis, investors could lose confidence in our reported financial information, the trading price of our common shares could decline and our access to the capital markets or other financing sources could become limited.

        As a public company, we will be required to maintain internal control over financial reporting and to report any material weaknesses in such internal control. In addition, beginning with our second Annual Report on Form 10-K following this offering (which we expect will cover our year ending December 31, 2018), we will be required to furnish a management report on the effectiveness of our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act. We are in the process of designing, implementing and testing the internal control over financial reporting required to comply with this obligation, which process is time consuming, costly and complicated.

        In connection with the audit of our predecessor's financial statements as of December 31, 2016 and 2015 and for the year ended December 31, 2016 and the period December 3, 2015 to December 31, 2015, our independent registered public accounting firm identified a deficiency in our system of internal control over financial reporting that it considered to be a material weakness. The Public Company Accounting Oversight Board's Auditing Standard No. 5 defines a material weakness as a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of annual or interim financial statements will not be prevented or detected on a timely basis. The identified material weakness related to our lack of formally designed processes and controls to prevent or mitigate the risk of material errors from occurring within our financial statements.

        We are executing on our plan to remedy this material weakness, including (i) hiring a third-party consultant to assist us in developing and implementing formal processes and related control procedures, and the subsequent testing of those controls, (ii) hiring additional accounting resources with the appropriate level of technical experience and training in the application of technical accounting guidance to routine and complex transactions in order to properly analyze, review, record and report on business transactions, including a new Chief Financial Officer, Chief Accounting Officer, Financial Reporting Manager and Assistant Corporate Controller, and (iii) implementing policies and procedures focusing on enhancing the review and approval of all relevant data to support our assumptions and judgments in routine and complex transactions appropriately and timely and documenting such review and approval. However, there is no assurance that these actions, as well as further actions we may take, will allow us to remediate this material weakness and provide a solid foundation to meet the ongoing requirements of being a public company. If we fail to implement and maintain effective internal control over financial reporting (including appropriately and effectively remediating this material weakness), we may be unable to report our financial results accurately on a timely basis, investors could lose confidence in our reported financial information and the trading price of our common shares could be adversely affected.

Our business and ability to make distributions to our shareholders are subject to risks associated generally with the real estate industry.

        Our business and ability to make distributions to our shareholders depend on the ability of our properties to generate revenues in excess of operating expenses (including scheduled principal payments on debt and capital expenditures). The following non-exclusive risks, many of which are beyond our control, could adversely affect our results of operations, financial condition and ability to service our debt and to make distributions to our shareholders:

    an oversupply of office or flex space, a reduction in demand for office or flex space, or reductions in office or flex market rental rates in our markets or generally;

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    changes in international, national, regional or local economic, demographic or real estate market conditions;

    adverse changes in financial conditions of buyers, sellers and tenants of properties;

    decreases in the underlying value of our properties;

    illiquidity of real estate investments, generally;

    vacancies or our inability to rent space on favorable terms, including possible market pressures to offer tenants rent abatements, tenant improvements, early termination rights or below-market renewal options, and the need to periodically repair, renovate and re-let space;

    competition from other owners or operators of office and flex properties;

    costs resulting from the clean-up of, and liability to third parties for damages resulting from, environmental problems, such as indoor mold;

    the cost, quality and condition of the properties we are able to acquire in the future;

    changes in laws and regulations (including tax, environmental, zoning and building codes, landlord/tenant and other property laws and regulations) and agency or court interpretations of such laws and regulations and the related costs of compliance;

    changes in interest rate levels and the availability of financing; and

    civil unrest, earthquakes, acts of terrorism and other natural disasters or acts of God that may result in uninsured losses.

Our insurance coverage on our properties may be inadequate or our insurance providers may default on their obligations to pay claims.

        We currently carry comprehensive insurance on all of our properties, including insurance for liability, fire and flood. We cannot guarantee that the limits of our current policies will be sufficient in the event of a catastrophe to our properties. We cannot guarantee that we will be able to renew or duplicate our current insurance coverage in adequate amounts or at reasonable prices. In addition, while our current insurance policies insure us against loss from toxic mold, in the future, insurance companies may no longer offer coverage against this type of losses, or, if offered, might be prohibitively expensive. If any or all of the foregoing should occur, we may not have insurance coverage against certain types of losses and/or there may be decreases in the limits of insurance available. Should an uninsured loss or a loss in excess of our insured limits occur, we could lose all or a portion of our investment in a property or properties, as well as the anticipated future revenue from the property or properties. Nevertheless, we might remain obligated for any mortgage debt or other financial obligations related to the property or properties. We cannot guarantee that material losses in excess of insurance proceeds will not occur in the future. If any of our properties were to experience a catastrophic loss, it could seriously disrupt our operations, delay revenue and result in large expenses to repair or rebuild the property. If one or more of our insurance providers were to fail to pay a claim as a result of insolvency, bankruptcy or otherwise, the nonpayment of such claims could have an adverse effect on our financial condition and results of operations. In addition, if one or more of our insurance providers were to become subject to insolvency, bankruptcy or other proceedings and our insurance policies with the provider were terminated or canceled as a result of those proceedings, we cannot guarantee that we would be able to find alternative coverage in adequate amounts or at reasonable prices. In such case, we could experience a lapse in any or adequate insurance coverage with respect to one or more properties and be exposed to potential losses relating to any claims that may arise during such period of lapsed or inadequate coverage.

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We are subject to risks from natural disasters such as earthquakes and severe weather.

        Natural disasters and severe weather such as earthquakes, tornadoes or hurricanes may result in significant damage to our properties. The extent of our casualty losses and loss in operating income in connection with such events is a function of the severity of the event and the total amount of exposure in the affected area. When we have geographic concentration of exposures, a single catastrophe (such as an earthquake) or destructive weather event (such as a hurricane, especially in the Florida area) affecting a region may have a significant negative effect on our financial condition and results of operations. Our financial results may be adversely affected by our exposure to losses arising from natural disasters or severe weather.

        We also are exposed to risks associated with inclement winter weather, particularly in the Northeast, Mid-Atlantic, and Mid-Western states, including increased costs for the removal of snow and ice. Inclement weather also could increase the need for maintenance and repair of our communities.

We face possible risks associated with the physical effects of climate change.

        To the extent that climate change does occur, its physical effects could have a material adverse effect on our properties, operations and business. For example, many of our properties are located near or along the East coast, particularly those in Florida and Pennsylvania. To the extent climate change causes changes in weather patterns, our markets could experience increases in storm intensity and rising sea-levels. These conditions could result in physical damage to our properties or declining demand for space in our buildings or the inability of us to operate the buildings at all in the areas affected by these conditions. Climate change also may have indirect effects on our business by increasing the cost of (or making unavailable) property insurance on terms we find acceptable, increasing the cost of energy and increasing the cost of snow removal or related costs at our properties. Proposed legislation to address climate change could increase utility and other costs of operating our properties which, if not offset by rising rental income, would reduce our net income. Should the impact of climate change be material in nature or occur for lengthy periods of time, our properties, operations or business would be adversely affected.

We may from time to time be subject to litigation, which could have a material adverse effect on our business, financial condition and results of operations.

        We may be a party to various claims and routine litigation arising in the ordinary course of business. Some of these claims or others to which we may be subject from time to time may result in defense costs, settlements, fines or judgments against us, some of which are not, or cannot be, covered by insurance. Payment of any such costs, settlements, fines or judgments that are not insured could have an adverse impact on our financial position and results of operations. In addition, certain litigation or the resolution of certain litigation may affect the availability or cost of some of our insurance coverage, which could adversely impact our results of operations and cash flow, expose us to increased risks that would be uninsured, or adversely impact our ability to attract officers and trustees.

We may incur significant costs complying with various federal, state and local laws and regulations that are applicable to our properties.

        The properties in our portfolio are subject to various federal, state and local laws and regulatory requirements, including permitting and licensing requirements, some of which may conflict with one another or be subject to limited judicial or regulatory interpretations. Local regulations, including municipal or local ordinances, zoning restrictions and building codes may restrict our use of our properties and may require us to obtain approval from local officials at any time with respect to our properties, including prior to acquiring a property or when undertaking renovations of any of our existing properties. Among other things, these restrictions may relate to fire and safety, seismic or

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hazardous material abatement requirements. There can be no assurance that existing laws and regulatory policies will not adversely affect us or the timing or cost of any future acquisitions or renovations, or that additional regulations will not be adopted that increase such delays or result in additional costs. Our growth strategy may be affected by our ability to obtain permits, licenses and zoning relief.

        In addition, federal and state laws and regulations, including laws such as the Americans with Disabilities Act ("ADA"), impose further restrictions on our properties and operations. Under the ADA, all public accommodations must meet federal requirements related to access and use by disabled persons. Some of our properties may currently be in non-compliance with the ADA. If one or more of the properties in our portfolio is not in compliance with the ADA or any other regulatory requirements, we may be required to incur additional costs to bring the property into compliance and we might incur governmental fines or the award of damages to private litigants. In addition, we do not know whether existing requirements will change or whether future requirements will require us to make significant unanticipated expenditures that will adversely impact our financial condition, results of operations, cash flow and per share trading price of our common shares.

We may experience environmental issues at our properties that are costly to remediate or result in liability for us or, in some cases, our tenants.

        Various federal, state and local laws and regulations subject current or former real property owners or operators to liability for the costs of, and damages resulting from, removal or remediation of certain hazardous or toxic substances located on or in the property. These laws often impose liability without regard to whether the owner or operator was responsible for or even knew of the presence or release of such substances. Environmental laws also may create liens on contaminated sites in favor of the government for damages and costs it incurs to address such contamination. Moreover, if contamination is discovered on our properties, environmental laws may impose restrictions on the manner in which that property may be used or how businesses may be operated on that property. The presence of, or failure to, properly remediate hazardous or toxic substances (such as toxic mold, lead paint and asbestos) on our properties may adversely affect our ability to rent, sell, develop or borrow against such contaminated property and may impose liability upon us for personal injury to persons exposed to such substances, property damage or for similar reasons.

        Further, various laws and regulations also impose liability on persons who arrange for the disposal or treatment of hazardous or toxic substances at another off-site location or treatment facility for the costs of removal or remediation of such substances at the disposal or treatment facility, whether or not the person arranging for such disposal ever owned or operated the disposal facility and without regard for whether environmental laws were complied with in disposing of such materials. As owners and operators of property and as potential arrangers for hazardous substance disposal, we may be liable under such laws and regulations for removal or remediation costs, governmental penalties, property damage, personal injuries and related expenses. Payment of such costs and expenses could adversely affect our business and our ability to make distributions or payments to our shareholders. In addition, certain other environmental and health and safety laws and regulations impose liability on owners or operators and, in some cases, tenants, of real property, including for building conditions such as the proper management and removal of asbestos-containing or other materials or remediation of indoor air quality issues due to mold, inadequate ventilation, chemical or biological contamination, among other reasons. Moreover, we may be subject to liability for personal injury or property damage sustained as a result of exposure to these building conditions.

        Environmental liabilities could affect a tenant's ability to make rental payments to us. Additionally, if we do incur material environmental liabilities in the future, we may face significant remediation costs, and we may find it difficult to sell any affected properties. Costs or liabilities incurred as a result of

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environmental issues may adversely affect our business, results of operations, financial condition and ability to service our debt and to make distributions to our shareholders.


Risks Related to Our Indebtedness and Financing

We expect to have approximately $652.8 million of indebtedness outstanding following this offering and the formation transactions. Our indebtedness may expose us to interest rate fluctuations and the risk of default under our debt obligations.

        Upon completion of this offering and the formation transactions, we anticipate that our total consolidated indebtedness will be approximately $652.8 million, all of which will be variable rate debt subject to interest rate cap agreements. In addition, we intend to enter into new unsecured credit facilities for which we have obtained commitments totaling, and which will allow for borrowings up to, $1.15 billion upon or shortly after the consummation of this offering and the formation transactions, and we may incur significant additional debt to finance future acquisition and development activities.

        Payments of principal and interest on borrowings may leave us with insufficient cash resources to operate our properties, pay the dividends currently contemplated or necessary to maintain our REIT qualification or eliminate entity-level taxes payable by us as a REIT. Our level of debt and the limitations imposed on us by our debt agreements could have significant adverse consequences, including the following:

    our cash flow may be insufficient to meet required payments of principal and interest;

    we may be unable to borrow additional funds as needed or on favorable terms, which could, among other things, adversely affect our ability to meet operational needs;

    because a portion of our debt bears interest at variable rates, increases in interest rates could increase our interest expense;

    we may be forced to dispose of one or more of our properties, possibly on unfavorable terms or in violation of certain covenants to which we may be subject;

    payments of principal and interest on borrowings could reduce funds available for distribution to our shareholders and may leave us with insufficient cash resources to pay operating expenses;

    we may violate restrictive covenants in our loan documents, which would entitle the lenders to accelerate our debt obligations and could possibly lead to loss of property to foreclosure;

    we may not be able to refinance indebtedness on our properties at maturity or the refinancing terms may be less favorable than the terms of our original indebtedness;

    reduce our flexibility to respond to changing business and economic conditions, limit our ability to withstand competitive pressures and increase our vulnerability to an economic downturn; and

    our default under any loan with cross default provisions could result in a default on other indebtedness.

        If any one of these events were to occur, our results of operations, financial condition, cash flow and ability to service our debt and to pay distributions to our shareholders could be adversely affected. Furthermore, foreclosures could create taxable income without accompanying cash proceeds, which could hinder our ability to meet the REIT distribution requirements imposed by the Code or could otherwise increase any entity-level taxes payable by us as a REIT. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Indebtedness to be Outstanding After this Offering."

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Upon completion of this offering and the formation transactions, we anticipate our debt will restrict our ability to engage in certain business activities, which could adversely affect our results of operations, financial condition, cash flow and ability to service our debt and to make distributions to our shareholders.

        The agreements governing our current indebtedness contain, and agreements governing the new unsecured credit facilities we intend to enter into upon or shortly after the completion of this offering will likely contain, customary negative covenants and other financial and operating covenants that:

    restrict our ability to incur additional indebtedness;

    restrict our ability to incur additional liens;

    restrict our ability to make certain investments (including certain capital expenditures);

    restrict our ability to merge with another company;

    restrict our ability to sell or dispose of assets;

    restrict our ability to enter new leases outside of stipulated guidelines or to materially modify existing leases;

    restrict our ability to make distributions to shareholders; and

    require us to satisfy certain customary financial covenant ratios, such as minimum tangible net worth requirements and maximum leverage ratios.

        In addition, the agreements governing the indebtedness we incurred in connection with the acquisition of the second portfolio contain certain negative covenants that:

    restrict our ability to incur additional liens on our properties securing this debt; and

    restrict our ability to sell properties securing this debt.

        Failure to comply with these covenants could cause a default under the agreements and, in certain circumstances, our lenders may be entitled to accelerate our debt obligations. These limitations will restrict our ability to engage in some business activities, which could adversely affect our results of operations, financial condition, cash flow and ability to service our debt and to pay distributions to our shareholders.

The terms of our senior mortgage and mezzanine loans may restrict or limit the use of rent proceeds from the properties securing this debt (with no exceptions allowing for compliance with REIT distribution requirements).

        We entered into a senior mortgage loan and three mezzanine loans (mezzanine A loan, mezzanine B loan and mezzanine C loan) in connection with our acquisition of our second portfolio in October 2016, which we collectively refer to as the second portfolio debt. Under the terms of the second portfolio debt, all rents and other amounts paid to the borrower from our second portfolio must be deposited into an account, or the cash management account, controlled by the lender. In the event of a "cash sweep event," which is defined as the earliest to occur of (1) an event of default under the agreements governing the loans; (2) any bankruptcy action of the borrower or the property manager; or (3) a "debt yield trigger event," funds otherwise available for distribution to us are escrowed as additional collateral and not available for distributions to us until the cash sweep event is cured, which would limit the amount of cash available for us to use in our business and could limit or eliminate our ability to service our debt and to make distributions to our shareholders. As of June 30, 2017, the second portfolio debt had an aggregate principal balance of $816.0 million. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Description of Certain Debt—Second Portfolio Mortgage and Mezzanine Loans." The occurrence of a cash sweep event could prevent us from servicing our debt or making distributions to

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our shareholders and have a material adverse effect on our results of operations, financial condition and cash flow.

Our growth depends on external sources of capital that are outside of our control and may not be available to us on commercially reasonable terms or at all.

        In order to maintain our qualification as a REIT, we are required under the Code, among other things, to distribute annually at least 90% of our taxable income, determined without regard to the dividends paid deduction and excluding any net capital gain. In addition, we will be subject to income tax at regular corporate rates to the extent that we distribute less than 100% of our taxable income, including any net capital gains. Because of these distribution requirements, we may not be able to fund future capital needs, including any necessary acquisition financing, from operating cash flow. Consequently, we intend to rely on third-party sources to fund our capital needs. We may not be able to obtain the financing on favorable terms or at all. Any additional debt we incur will increase our leverage and likelihood of default. Our access to third-party sources of capital depends, in part, on:

    general market conditions;

    the market's perception of our growth potential;

    our current debt levels;

    our current and expected future earnings;

    our cash flow and cash distributions; and

    the market price of our common shares.

        If we cannot obtain capital from third-party sources, we may not be able to acquire or develop properties when strategic opportunities exist, meet the capital and operating needs of our existing properties, satisfy our debt service obligations or make the cash distributions to our shareholders necessary to maintain our qualification as a REIT.

Failure to hedge effectively against interest rate changes may adversely affect our results of operations, financial condition, cash flow and ability to service our debt and to pay distributions to our shareholders.

        If interest rates increase, so will the interest costs on our unhedged or partially hedged variable rate debt, which could adversely affect our cash flow and our ability to pay principal and interest on our debt and our ability to make distributions to our shareholders. Further, rising interest rates could limit our ability to refinance existing debt when it matures. We seek to manage our exposure to interest rate volatility by using interest rate hedging arrangements (including derivatives) that involve risk, such as the risk that counterparties may fail to honor their obligations under these arrangements, and that these arrangements may not be effective in reducing our exposure to interest rate changes. Failure to hedge effectively against interest rate changes may materially adversely affect our results of operations, financial condition, cash flow and ability to service our debt and to pay distributions to our shareholders.

        In addition, while such agreements are intended to lessen the impact of rising interest rates on us, they also expose us to the risk that the other parties to the agreements will not perform, we could incur significant costs associated with the settlement of the agreements, the agreements will be unenforceable and the underlying transactions will fail to qualify as highly-effective cash flow hedges under Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, 815, Derivative and Hedging. Should we desire to terminate a hedging agreement, there could be significant costs and cash requirements involved to fulfill our obligation under the hedging agreement.

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        When a hedging agreement is required under the terms of our loan agreements, it is often a condition that the hedge counterparty maintains a specified credit rating. There is a risk that a hedge counterparty could have their credit rating downgraded to a level that would not be acceptable under our loan provisions. If we were unable to renegotiate the credit rating condition with the lender or find an alternative counterparty with acceptable credit rating, we could be in default under our loans and the lender could seize the property under our loans through foreclosure, which could adversely affect us.

Complying with REIT requirements may limit our ability to hedge effectively and may cause us to incur tax liabilities.

        The REIT provisions of the Code limit our ability to engage in hedging activities. Generally, income from a hedging transaction we enter into either to manage risk of interest rate changes with respect to borrowings incurred or to be incurred to acquire or carry real estate assets, or to manage the risk of currency fluctuations with respect to any item of income or gain (or any property that generates such income or gain) that constitutes "qualifying income" for purposes of the 75% or 95% gross income tests applicable to REITs, does not constitute "gross income" for purposes of the 75% or 95% gross income tests, provided that we properly identify the hedging transaction pursuant to the applicable sections of the Code and Treasury Regulations. To the extent that we enter into other types of hedging transactions, the income from those transactions is likely to be treated as non-qualifying income for purposes of both gross income tests. As a result of these rules, we may need to limit our use of otherwise advantageous hedging techniques or implement those hedges through a "Taxable REIT Subsidiary," or TRS. The use of a TRS could increase the cost of our hedging activities (because our TRS would be subject to tax on income or gain resulting from hedges entered into by it) or expose us to greater risks than we would otherwise want to bear.

Mortgage debt obligations expose us to the possibility of foreclosure on our ownership interests in our properties, which could result in the loss of our investment in a property or group of properties subject to mortgage debt.

        Incurring mortgage and other secured debt obligations increases our risk of property losses because defaults on indebtedness secured by properties may result in foreclosure actions initiated by lenders and ultimately our loss of the property securing any loans for which we are in default. Any foreclosure on a mortgaged property or group of properties could adversely affect the overall value of our portfolio of properties. For tax purposes, a foreclosure of any of our properties that is subject to a nonrecourse mortgage loan would be treated as a sale of the property for a purchase price equal to the outstanding balance of the debt secured by the mortgage. If the outstanding balance of the debt secured by the mortgage exceeds our tax basis in the property, we would recognize taxable income on foreclosure, but would not receive any cash proceeds, which could hinder our ability to meet the distribution requirements applicable to REITs under the Code.

High mortgage rates or unavailability of mortgage debt may make it difficult for us to finance or refinance properties, which could reduce the number of properties we can acquire, negatively impact our net income and reduce the amount of cash available for distributions.

        If mortgage debt is unavailable at reasonable rates, we may not be able to finance the purchase of properties. If we place mortgage debt on properties, we may be unable to refinance the properties when the loans become due, or to refinance on favorable terms. If interest rates are higher when we refinance our properties, our income could be reduced. If any of these events occur, our cash flow could be reduced. This, in turn, could reduce cash available for distribution to our shareholders and may hinder our ability to raise more capital by issuing more shares or by borrowing more money. In addition, payments of principal and interest made to service our debts may leave us with insufficient

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cash to make distributions necessary to meet the distribution requirements imposed on REITs under the Code.


Risks Related to Our Organization and Structure

The ability of our shareholders to control our policies and effect a change of control of our company is limited by certain provisions of our declaration of trust and bylaws and by Maryland law.

        There are provisions of Maryland law and in our declaration of trust and bylaws that may discourage a third party from making a proposal to acquire us, even if some of our shareholders might consider the proposal to be in their best interests. See "Description of Shares" and "Certain Provisions of Maryland Law and Our Declaration of Trust and Bylaws". These provisions include the following:

    Number of Trustees:  Our bylaws provide that a majority of our entire board of trustees may increase or decrease the number of trustees.

    Shareholder Requested Special Meetings:  Our bylaws provide that a special meeting of shareholders will be called by our secretary to act on any matter that may properly be considered at a meeting of shareholders upon the written request of shareholders who are entitled to cast not less than a majority of all the votes entitled to be cast on such matter at such meeting and who comply with the shareholder-requested special meeting provisions of our bylaws. Such provision, among others, could delay, defer or prevent a transaction or a change of control of our company that might involve a premium price for holders of our common shares or otherwise be in their best interest.

    Advance Notice Provisions for Shareholder Nominations and Proposals:  Our bylaws require advance written notice for shareholders to nominate persons for election as trustees at, or to bring other business before, any meeting of shareholders. This bylaw provision limits the ability of shareholders to make nominations of persons for election as trustees or to introduce other proposals unless we are notified in a timely manner prior to the meeting. Such provision, among others, could delay, defer or prevent a transaction or a change of control of our company that might involve a premium price for holders of our common shares or otherwise be in their best interest.

    Authorization of Shares:  Our declaration of trust authorizes our board of trustees, without any action by our shareholders, to amend our declaration of trust from time to time to increase or decrease the aggregate number of authorized shares, to authorize us to issue additional common shares or preferred shares or securities or rights convertible into such shares and to classify or reclassify unissued common shares or preferred shares and thereafter to authorize us to issue such classified or reclassified shares. We believe these provisions will provide us with increased flexibility in structuring possible future financings and acquisitions and in meeting other needs that might arise. The additional classes or series, as well as the additional authorized common shares, will be available for issuance without further action by our shareholders, unless such action is required by applicable law or the rules of any stock exchange or automated quotation system on which our securities may be listed or traded. Although our board of trustees does not currently intend to do so, it could authorize us to issue a class or series of shares that could, depending upon the terms of the particular class or series, delay, defer or prevent a transaction or a change of control of our company that might involve a premium price for holders of our common shares or that our common shareholders otherwise believe to be in their best interests.

    Duties of Trustees with Respect to Unsolicited Takeovers:  Maryland law provides protection for Maryland real estate investment trusts against unsolicited takeovers by limiting, among other things, the duties of the trustees in unsolicited takeover situations. The standard of conduct applicable to trustees of Maryland real estate investment trusts does not require them to (a) act

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      to accept, recommend or respond to any proposal by a person seeking to acquire control of the Maryland real estate investment trust, (b) act to authorize the Maryland real estate investment trust to redeem any rights under, or modify or render inapplicable, any shareholder rights plan, (c) act to elect to be subject to or refrain from electing to be subject to any or all of the provisions of Subtitle 8 (as defined herein), (d) act to make a determination under the Maryland Business Combination Act or the Maryland Control Share Acquisition Act, or (e) act solely because of the effect the act may have on an acquisition or potential acquisition of control of the Maryland real estate investment trust or the amount or type of consideration that may be offered or paid to the shareholders in an acquisition or a potential acquisition of control. Maryland law also contains a statutory presumption that an act of a trustee of a Maryland real estate investment trust is presumed to be in accordance with the applicable standard of conduct for trustees under Maryland law.

    Ownership Limits:  In order to qualify as a REIT, not more than 50% in value of our outstanding shares may be owned, directly or indirectly, by or for five or fewer individuals (as defined in the Code to include certain entities such as private foundations) at any time during the last half of any taxable year (beginning with our second taxable year as a REIT). In order to help us qualify as a REIT, our declaration of trust generally provides that no person may beneficially or constructively own more than 9.8% in value of the aggregate of our outstanding shares of all classes or series or more than 9.8% in value or in number of shares, whichever is more restrictive, of the aggregate number of our outstanding common shares. Our declaration of trust provides that the sole purpose of such ownership restrictions is to preserve our status as a REIT under the Code and that our board of trustees may grant exemptions from the restrictions on transfer and ownership of shares, subject to the conditions set forth in our declaration of trust. Nevertheless, the ownership restrictions may prevent or delay a change in control and, as a result, could adversely affect our shareholders' ability to realize a premium for their common shares.

    Maryland Business Combination Act:  The Maryland Business Combination Act provides that unless exempted, a Maryland real estate investment trust may not engage in certain business combinations, including mergers, consolidations, share exchanges or, in circumstances specified in the statute, asset transfers, issuances or reclassifications of shares and other specified transactions, with an "interested stockholder" or an affiliate of an interested stockholder, for five years after the most recent date on which the interested stockholder became an interested stockholder, and thereafter unless specified criteria are met. An interested stockholder is generally a person owning or controlling, directly or indirectly, 10 percent or more of the voting power of the outstanding shares of the Maryland real estate investment trust. Our declaration of trust provides that we expressly elect not to be governed by the provisions of the Maryland Business Combination Act, in whole or in part, as to any business combination between us and any interested stockholder or any affiliate of an interested stockholder. Any amendment to or repeal of this provision requires the affirmative vote of the holders of not less than a majority of the shares then outstanding and entitled to vote thereon. In the event that this provision of our declaration of trust is amended or revoked by our shareholders, we would be subject to the Maryland Business Combination Act.

    Maryland Control Share Acquisition Act:  Maryland law provides that holders of "control shares" of a Maryland real estate investment trust acquired in a "control share acquisition" shall have no voting rights with respect to the control shares except to the extent approved by a vote of two-thirds of the votes eligible to cast on the matter under the Maryland Control Share Acquisition Act. "Control shares" means shares that, if aggregated with all other shares previously acquired by the acquirer, would entitle the acquirer to exercise voting power in electing trustees within one of the following ranges of the voting power: one-tenth or more but

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      less than one-third, one-third or more but less than a majority or a majority or more of all voting power. A "control share acquisition" means the acquisition of control shares, subject to certain exceptions.

      If voting rights of control shares acquired in a control share acquisition are not approved at a shareholders' meeting, then subject to certain conditions and limitations, the issuer may redeem any or all of the control shares for fair value. If voting rights of such control shares are approved at a shareholders' meeting and the acquirer becomes entitled to vote a majority of the shares entitled to vote, all other shareholders may exercise appraisal rights. Our declaration of trust provides that the Maryland Control Share Acquisition Act will not apply to any acquisition by any person of shares of beneficial interest of us. Any amendment to or repeal of this provision requires the affirmative vote of the holders of not less than a majority of the shares then outstanding and entitled to vote thereon. In the event that this provision of our declaration of trust is amended or revoked by our shareholders, we would be subject to the Maryland Control Share Acquisition Act.

    Unsolicited Takeovers:  Under Subtitle 8 of Title 3 of the Maryland General Corporation Law ("Subtitle 8"), a Maryland real estate investment trust with a class of equity securities registered under the Exchange Act, and at least three independent trustees may elect to be subject, by provision in its declaration of trust or bylaws or by a resolution of its board of trustees, without shareholder approval and notwithstanding any contrary provision in the declaration of trust or bylaws, to any or all of the following five provisions of the statute: (i) the board will be divided into three classes; (ii) the affirmative vote of two-thirds of the votes entitled to be cast in the election of trustees is required to remove a trustee; (iii) the number of trustees may be fixed only by vote of the trustees; (iv) a vacancy on the board must be filled only by the remaining trustees, and trustees elected to fill a vacancy will serve for the remainder of the full term of the class of trustees in which the vacancy occurred and until a successor is duly elected and qualified; and (v) the request of shareholders entitled to cast at least a majority of all the votes entitled to be cast at the meeting is required for the calling of shareholder-requested special meetings. Our declaration of trust provides that once we become eligible to do so (which we expect will be upon closing of this offering), we will elect to be subject to the provision of Subtitle 8 providing that any vacancy on our board must be filled only by the remaining trustees, and the trustee elected to fill a vacancy will serve for the remainder of the full term of the class of trustees in which the vacancy occurred and until a successor is duly elected and qualified. Our declaration of trust further provides that we are prohibited from electing to be subject to any or all of the other provisions of Subtitle 8. Any amendment to or repeal of either of these provisions of our declaration of trust requires the affirmative vote of the holders of not less than a majority of the shares then outstanding and entitled to vote thereon. In the event that the provision of our declaration of trust prohibiting us from electing to be subject to any or all of the other provisions of Subtitle 8 is amended or revoked by our shareholders, we could elect to be subject to such other provisions of Subtitle 8. However, through provisions in our declaration of trust and bylaws unrelated to Subtitle 8, we (i) vest in our board of trustees the exclusive power to fix the number of trustees and (ii) require, unless called by our Chief Executive Officer, our president or our board of trustees, the request of shareholders entitled to cast a majority of all the votes entitled to be cast on such matter to call a special meeting to consider and vote on any matter that may properly be considered at a meeting of shareholders.

        Each item discussed above may delay, deter or prevent a change in control of our company, even if a proposed transaction is at a premium over the then-current market price for our common shares. Further, these provisions may apply in instances where some shareholders consider a transaction beneficial to them. As a result, the price of our common shares may be negatively affected by these provisions.

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Certain provisions in the partnership agreement of our operating partnership may delay or prevent acquisitions of us.

        Provisions in the partnership agreement of our operating partnership may delay, or make more difficult, acquisitions of us or changes of our control. These provisions could discourage third parties from making proposals involving an acquisition of us or change of our control, although some holders of common shares might consider such proposals, if made, desirable. These provisions include:

    redemption rights to holders of common units after the later to occur of: (i) 12 months from the original date of issuance of the common units or (ii) the first business day of the first calendar month after the 12-month anniversary of effectiveness of the registration statement of which this prospectus is a part, subject to certain exceptions;

    a requirement that we may not be removed as the general partner of our operating partnership without our consent;

    transfer restrictions on common units; and

    our ability, as general partner, in some cases to amend the partnership agreement and to cause the operating partnership to issue units with terms that could delay, defer or prevent a merger or other change of control of us or operating partnership without the consent of the limited partners.

        Following the completion of the formation transactions and this offering, our continuing investors, including our trustees, executive officers, employees and affiliates, will own an aggregate of 40.0% of the outstanding common units and our company will own 60.0% of the outstanding common units (34.2% of the outstanding common units and 65.8% of the outstanding common units, respectively, if the underwriters exercise their over-allotment option in full) (in each case, based on the midpoint of the price range set forth on the front cover of this prospectus).

Our subsidiaries may be prohibited from making distributions and other payments to us.

        All of our properties are owned, and all of our operations are conducted, by our operating partnership and our other subsidiaries. As a result, we depend on distributions and other payments from our operating partnership and our other subsidiaries in order to satisfy our financial obligations and make payments to our investors. The ability of our subsidiaries to make such distributions and other payments depends on their earnings and cash flow and may be subject to statutory or contractual limitations. As an equity investor in our subsidiaries, our right to receive assets upon their liquidation or reorganization will be effectively subordinated to the claims of their creditors. To the extent that we are recognized as a creditor of such subsidiaries, our claims may still be subordinate to any security interest in or other lien on their assets and to any of such subsidiaries' debt or other obligations that are senior to our claims.

Our board of trustees may change our investment and financing policies without shareholder approval and we may become more highly leveraged, which may increase our risk of default under our debt obligations.

        Our policies, including any policies with respect to investments, leverage, financing, growth, debt and capitalization, will be determined by our board of trustees or those committees or officers to whom our board of trustees may delegate such authority. Further, our organizational documents do not limit the amount or percentage of indebtedness, funded or otherwise, that we may incur. Our board of trustees also will establish the amount of any dividends or other distributions that we may pay to our shareholders. Our board of trustees or the committees or officers to which such decisions are delegated will have the ability to amend or revise these and our other policies at any time without shareholder vote. If, for example, our policy on debt is changed, we could become more highly leveraged which could result in an increase in our debt service. Higher leverage also increases the risk of default on our

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obligations. In addition, a change in our investment policies, including the manner in which we allocate our resources across our portfolio or the types of assets in which we seek to invest, may increase our exposure to interest rate risk, real estate market fluctuations and liquidity risk. Any change in our policies may have an adverse effect on our results of operations, financial condition and ability to service our debt and to make distributions to our shareholders.

Our rights and the rights of our shareholders to take action against our trustees and officers are limited, which could limit your recourse in the event of actions that you do not believe are in your best interests.

        Maryland law provides that, subject to the provisions described in the next sentence, a trustee of a Maryland real estate investment trust is not personally liable for the obligations of the real estate investment trust. Maryland law further provides that, if a trustee otherwise would be liable, the provisions described in the immediately preceding sentence do not relieve the trustee from any liability to the trust or its security holders for any act that constitutes bad faith, willful misfeasance, gross negligence or reckless disregard of the trustee's duties. Upon completion of this offering, as permitted by Maryland law, our declaration of trust will limit the liability of our trustees and officers to us and our shareholders for money damages, except for liability resulting from:

    actual receipt of an improper benefit or profit in money, property or services; or

    a final judgment based upon a finding of active and deliberate dishonesty by the trustee or officer that was material to the cause of action adjudicated.

        In addition, our declaration of trust will authorize us to obligate us, and our bylaws will require us, to indemnify our trustees and officers for actions taken by them in his or her service or in certain other capacities to the maximum extent permitted by Maryland law. Indemnification agreements that we have entered into with our trustees and executive officers will require us to indemnify such trustees and officers for actions taken by them in his or her service to the maximum extent permitted by Maryland law. As a result, we and our shareholders may have more limited rights against our trustees and officers than might otherwise exist. Accordingly, in the event that actions taken in good faith by any of our trustees or officers impede the performance of our company, your ability to recover damages from such trustee or officer will be limited. In addition, we will be obligated to advance expenses incurred by our trustees and our executive officers, and may, in the discretion of our board of trustees, advance expenses incurred by our employees and other agents, in connection with legal proceedings.

Conflicts of interest may exist or could arise in the future between the interests of our shareholders and the interests of holders of units in our operating partnership, which may impede business decisions that could benefit our shareholders.

        Conflicts of interest may exist or could arise in the future as a result of the relationships between us and our affiliates, on the one hand, and our operating partnership or any partner thereof, on the other. Our trustees and officers have duties to our company under Maryland law in connection with their management of our company. At the same time, we, as the general partner of our operating partnership, have fiduciary duties and obligations to our operating partnership and its limited partners under Delaware law and the partnership agreement of our operating partnership in connection with the management of our operating partnership. Our fiduciary duties and obligations as the general partner of our operating partnership may come into conflict with the duties of our trustees and officers to our company.

        Under Delaware law, a general partner of a Delaware limited partnership has fiduciary duties of loyalty and care to the partnership and its partners and must discharge its duties and exercise its rights as general partner under the partnership agreement or Delaware law consistently with the obligation of good faith and fair dealing. The partnership agreement provides that, in the event of a conflict between the interests of our operating partnership or any partner, on the one hand, and the separate interests

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of our company or our shareholders, on the other hand, we, in our capacity as the general partner of our operating partnership, are under no obligation not to give priority to the separate interests of our company or our shareholders, and that any action or failure to act on our part or on the part of our trustees that gives priority to the separate interests of our company or our shareholders that does not result in a violation of the contract rights of the limited partners of the operating partnership under its partnership agreement does not violate the duty of loyalty that we, in our capacity as the general partner of our operating partnership, owe to the operating partnership and its partners.

        Additionally, the partnership agreement provides that we will not be liable to our operating partnership or any partner for monetary damages for losses sustained, liabilities incurred or benefits not derived by our operating partnership or any limited partner, except for liability for our intentional harm or gross negligence. Our operating partnership must indemnify us, our trustees and officers, officers of our operating partnership and our designees from and against any and all claims that relate to the operations of our operating partnership, unless (i) an act or omission of the person was material to the matter giving rise to the action and either was committed in bad faith or was the result of active and deliberate dishonesty, (ii) the person actually received an improper personal benefit in violation or breach of the partnership agreement or (iii) in the case of a criminal proceeding, the indemnified person had reasonable cause to believe that the act or omission was unlawful. Our operating partnership also must pay or reimburse the reasonable expenses of any such person upon its receipt of a written affirmation of the person's good faith belief that the standard of conduct necessary for indemnification has been met and a written undertaking to repay any amounts paid or advanced if it is ultimately determined that the person did not meet the standard of conduct for indemnification. Our operating partnership will not indemnify or advance funds to any person with respect to any action initiated by the person seeking indemnification without our approval (except for any proceeding brought to enforce such person's right to indemnification under the partnership agreement) or if the person is found to be liable to our operating partnership on any portion of any claim in the action.

Upon completion of this offering and the formation transactions, our trustees, executive officers and employees will beneficially own an aggregate of approximately 0.4% of our outstanding common shares, or 9.4% of our company on a fully-diluted basis (based on the midpoint of the price range set forth on the front cover of this prospectus), and each will have the ability to exercise significant influence on our company.

        Upon completion of this offering and the formation transactions, our trustees, executive officers and employees will beneficially own approximately 0.4% of our outstanding common shares, or approximately 9.4% of our company on a fully diluted basis (0.3% of our outstanding common shares, or 9.2% of our company on a fully diluted basis, if the underwriters exercise their over-allotment option in full) (in each case, based on the midpoint of the price range set forth on the front cover of this prospectus). Consequently, our board of trustees and executive officers may be able to significantly influence the outcome of matters submitted for shareholder action, including the election of our board of trustees and approval of significant transactions, including business combinations, consolidations and mergers. As a result, these trustees and executive officers could exercise their influence in a manner that conflicts with the interests of other shareholders.

The formation transactions and related agreements were negotiated between the investors in our predecessor and may not be as favorable to us as if they had been negotiated with unaffiliated third-parties.

        The terms of the formation transactions, including the value of Workspace Property Management (which provides property management services and certain other services to our operating partnership, and will be contributed to our operating partnership in exchange for common units) and the related agreements, including the various contribution/merger agreements, were negotiated between the investors in our predecessor and before our independent trustees were elected. As a result, the terms of the formation transactions may not be as favorable to us as if they had been negotiated with

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unaffiliated third parties. In addition, the value of the common shares and common units that we will issue in the formation transactions will increase or decrease if the price of our common shares increases or decreases. The initial public offering price of our common shares will be determined in consultation with the underwriters. The initial public offering price does not necessarily bear any relationship to our book value or the fair market value of our assets. Moreover, in the course of structuring the formation transactions, certain members of our senior management team may have had the ability to influence the type and level of benefits that they will receive from us. In addition, certain members of our senior management team had substantial pre-existing ownership interests in Workspace Property Management and will receive substantial economic benefits as a result of the formation transactions. Accordingly, the formation transactions and related agreements may not be as favorable to us as if they had been negotiated with unaffiliated third-parties.

We may pursue less vigorous enforcement of terms of the contribution and/or merger and other agreements with certain members of our senior management and our affiliates because of our dependence on them and conflicts of interest.

        Each of Thomas A. Rizk, our Chairman and Chief Executive Officer, and Roger W. Thomas, our President and Chief Operating Officer, are parties to or have interests in contribution and/or merger agreements with us pursuant to which we have acquired or will acquire interests in certain entities that comprise our predecessor. In addition, certain of our executive officers may become parties to employment agreements with us. We may choose not to enforce, or to enforce less vigorously, our rights under these agreements because of our desire to maintain our ongoing relationships with members of our senior management and their affiliates, with possible negative impact on shareholders.


Risks Related to Our Status as a REIT

Failure to qualify or to maintain our qualification as a REIT would have significant adverse consequences to the value of our common shares.

        We intend to elect to be treated and to operate in a manner that will allow us to qualify as a REIT commencing with our taxable year ending December 31, 2017. We believe that we have been and will continue to be owned and organized, and have operated and will operate, in a manner that will allow us to qualify as a REIT commencing with our taxable year ending December 31, 2017. However, we cannot assure you that we have been and will continue to be owned and organized and have operated and will operate as such. Qualification as a REIT involves the application of highly technical and complex provisions of the Code as to which there may only be limited judicial and administrative interpretations and involves the determination of facts and circumstances not entirely within our control. We have not requested and do not intend to request a ruling from the Internal Revenue Service ("IRS") that we qualify as a REIT. The complexity of these provisions and of the applicable Treasury Regulations is greater in the case of a REIT that, like us, holds its assets through one or more partnerships. Moreover, in order to qualify as a REIT, we must meet, on an ongoing basis, various tests regarding the nature and diversification of our assets and our income, the ownership of our outstanding shares, the absence of inherited retained earnings from non-REIT periods and the amount of our distributions. Our ability to satisfy the asset tests imposed on REITs depends upon our analysis of the characterization and fair market values of our assets, some of which are not susceptible to a precise determination, and for which we will not obtain independent appraisals. Our compliance with the REIT gross income and quarterly asset requirements also depends upon our ability to manage successfully the composition of our gross income and assets on an ongoing basis. Future legislation, new regulations, administrative interpretations or court decisions may significantly change the tax laws or the application of the tax laws with respect to qualification as a REIT for U.S. federal income tax purposes or the U.S. federal income tax consequences of such qualification. Accordingly, it is possible that we may not meet the requirements for qualification as a REIT.

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        If, with respect to any taxable year, we fail to maintain our qualification as a REIT, we would not be allowed to deduct distributions to shareholders in computing our taxable income. If we were not entitled to relief under the relevant statutory provisions, we also would be disqualified from treatment as a REIT for the four subsequent taxable years. If we fail to qualify as a REIT, we would be subject to entity-level income tax, including any applicable alternative minimum tax, on our taxable income at regular corporate tax rates. As a result, the amount available for distribution to holders of our common shares would be reduced for the year or years involved, and we would no longer be required to make distributions. In addition, our failure to qualify as a REIT could impair our ability to expand our business and raise capital, and adversely affect the value of our common shares.

We may owe certain taxes notwithstanding our qualification as a REIT.

        Even if we qualify as a REIT, we will be subject to certain U.S. federal, state and local taxes on our income and property, on taxable income that we do not distribute to our shareholders, on net income from certain "prohibited transactions," and on income from certain activities conducted as a result of foreclosure. We may, in certain circumstances, be required to pay an excise or penalty tax (which could be significant in amount) in order to utilize one or more relief provisions under the Code to maintain our qualification as a REIT. In addition, we may provide services that are not customarily provided by a landlord, hold properties for sale and engage in other activities (such as a management business) through one or more TRSs, and the income of those subsidiaries will be subject to U.S. federal income tax at regular corporate rates. Furthermore, to the extent that we conduct operations outside of the United States, our operations would subject us to applicable foreign taxes, regardless of our status as a REIT for U.S. tax purposes.

        In the case of assets we acquire on a tax-deferred basis from a C corporation, we also will be subject to U.S. federal income tax at the highest regular corporate tax rate, which is currently 35%, on all or a portion of the gain recognized from a taxable disposition of any such assets occurring within the five-year period following the acquisition date, to the extent of the asset's built-in gain based on the fair market value of the asset on the acquisition date in excess of our initial tax basis in the asset. Gain from a sale of such an asset occurring after the five-year period ends will not be subject to this tax. We currently do not expect to dispose of such an asset if the disposition would result in the imposition of a material tax liability under the above rules, but we cannot assure you that we will not change our plans in this regard. We do not believe that any of our assets will be subject to such tax on built-in gain as of the closing of the formation transactions.

        The Code generally requires that a REIT distribute at least 90% of its taxable income (without regard to the dividends paid deduction and excluding net capital gains) to shareholders annually, and a REIT must pay income tax, including any applicable alternative minimum tax, at regular corporate rates to the extent that it distributes less than 100% of its taxable income (including capital gains) in a given year. In addition, a REIT is required to pay a 4% nondeductible excise tax on the amount, if any, by which the distributions it makes in a calendar year are less than the sum of 85% of its ordinary income, 95% of its capital gain net income and 100% of its undistributed income from prior years. To avoid entity-level U.S. federal income and excise taxes, we anticipate distributing all of our taxable income.

If our operating partnership is treated as a corporation for U.S. federal income tax purposes, we will cease to qualify as a REIT.

        We believe our operating partnership qualifies and will continue to qualify as a partnership for U.S. federal income tax purposes. Assuming that it qualifies as a partnership for U.S. federal income tax purposes, our operating partnership will not be subject to U.S. federal income tax on its income. Instead, its partners, including us, generally are required to pay tax on their respective allocable share of our operating partnership's income. No assurance can be provided, however, that the IRS will not

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challenge our operating partnership's status as a partnership for U.S. federal income tax purposes, or that a court would not sustain such a challenge. If the IRS were successful in treating our operating partnership as a corporation for U.S. federal income tax purposes, we would fail to meet the gross income tests and certain of the asset tests applicable to REITs and, therefore, likely cease to qualify as a REIT, and our operating partnership would become subject to U.S. federal, state and local income tax. The payment by our operating partnership of income tax would reduce significantly the amount of cash available to our partnership to satisfy obligations to make principal and interest payments on its debt and to make distribution to its partners, including us.

We must distribute any non-REIT earnings and profits.

        To qualify as a REIT, we must not have any non-REIT accumulated earnings and profits, as measured for U.S. federal income tax purposes, at the end of any REIT taxable year. Such non-REIT earnings and profits generally will include any accumulated earnings and profits of a C corporation acquired by us (or whose assets we acquire, in certain cases). The determination of the amounts of any such non-REIT earnings and profits is a complex factual and legal determination, especially in the case of corporations that have been in operation for many years. We will not be acquiring any C corporation, or any C corporation's earnings and profits, in connection with the formation transactions that would implicate these rules, but we are not restricted from doing so in the future. If it is subsequently determined that we had undistributed non-REIT earnings and profits at the end of any taxable year as a REIT, we could fail to qualify as a REIT.

The lenders of the second portfolio debt have the right to control the investment of cash held in our "cash management accounts" with the lenders, which if invested in certain assets, may cause us to fail to meet one of the various asset tests to qualify as a REIT.

        Pursuant to the cash management agreement entered into in connection with the second portfolio debt, the lender and the depository bank have the right to control the cash deposited in the cash management account and determine in which of certain types of permitted investments such deposited cash may be invested. It is possible that the lender could cause investments in the cash management account to be held in such a quantity or manner that would cause us to fail to satisfy the various assets tests to which REITs are subject under the Code. If we were to fail to meet one or more of the REIT assets tests, such a failure could result in our inability to qualify as a REIT and/or other material adverse consequences, such as the payment of additional taxes or penalties. Although certain remedial measures could be taken if we were to fail any of the REIT assets tests to maintain our qualification as a REIT, there can be no assurance that such remedial measures will be successful. A failure to satisfy the various assets tests and a loss of our REIT qualification would have a material adverse effect on our financial condition, results of operations and ability to make distribution to our shareholders.

Dividends payable by REITs generally do not qualify for reduced tax rates.

        The maximum U.S. federal income tax rate for certain qualified dividends payable to U.S. shareholders that are individuals, trusts and estates generally is currently 20%. Dividends payable by REITs, however, are generally not eligible for the reduced rates and therefore may be subject to a current 39.6% maximum U.S. federal income tax rate on ordinary income when paid to such shareholders. The more favorable rates applicable to regular corporate dividends could cause investors who are individuals, trusts and estates or are otherwise sensitive to these lower rates to perceive investments in REITs to be relatively less attractive than investments in the shares of non-REIT corporations that pay dividends, which could adversely affect the value of the shares of REITs, including our common shares.

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Complying with the REIT requirements may cause us to forego otherwise attractive opportunities or liquidate certain of our investments.

        To qualify as a REIT for U.S. federal income tax purposes, we must continually satisfy tests concerning, among other things, the sources of our income, the nature and diversification of our assets, the amounts we distribute to our shareholders and the ownership of our shares. We may be required to make distributions to our shareholders at disadvantageous times or when we do not have funds readily available for distribution. Thus, compliance with the REIT requirements may, for instance, hinder our ability to make certain otherwise attractive investments or undertake other activities that might otherwise be beneficial to us and our shareholders, or may require us to borrow or liquidate investments in unfavorable market conditions and, therefore, may hinder our investment performance. As a REIT, we must satisfy certain asset tests on a quarterly basis, as described in "Material U.S. Federal Income Tax Considerations—Requirements for REIT Qualification—In General—REIT Asset Tests." After meeting these requirements at the close of a calendar quarter, if we fail to comply with these requirements at the end of any subsequent calendar quarter, we must correct the failure within 30 days after the end of the calendar quarter or qualify for certain statutory relief provisions to avoid losing our REIT qualification. As a result, we may be required to liquidate certain assets from our portfolio or forego otherwise attractive investments. These actions could have the effect of reducing our income and amounts available for distribution to our shareholders.

We may be subject to a 100% penalty tax on any prohibited transactions that we enter into, or may be required to forego certain otherwise beneficial opportunities in order to avoid the penalty tax on prohibited transactions.

        If we are found to have held, acquired or developed property primarily for sale to customers in the ordinary course of business, we may be subject to a 100% "prohibited transactions" tax under U.S. federal tax laws on the gain from disposition of the property unless the disposition qualifies for one or more safe harbor exceptions (or the disposition is made through a TRS and, therefore, is subject to corporate U.S. federal income tax). Under existing law, whether property is held primarily for sale to customers in the ordinary course of a trade or business depends on all the facts and circumstances. We intend to hold, and, to the extent within our control, to have any joint venture to which our operating partnership, or one of its subsidiaries, is a partner hold, properties for investment with a view to long-term appreciation, to engage in the business of acquiring, owning, operating and developing the properties, and to make sales of our properties and other properties acquired subsequent to the date hereof as are consistent with our investment objectives. However, it may not always be practical for us to comply with one of the safe harbors, and, therefore, we may be subject to the 100% penalty tax on the gain from dispositions of property if we otherwise are deemed to have held the property primarily for sale to customers in the ordinary course of business. The potential application of the prohibited transactions tax could cause us to forego potential dispositions of other property or other opportunities that might otherwise be attractive to us, or to hold investments or undertake such dispositions or other opportunities through a TRS, which would generally result in corporate income taxes being incurred.

REIT distribution requirements could adversely affect our liquidity and adversely affect our ability to execute our business plan.

        In order to maintain our qualification as a REIT and to meet the REIT distribution requirements, we may need to modify our business plans. Our cash flow from operations may be insufficient to fund required distributions, for example, as a result of differences in timing between our cash flow, the receipt of income for GAAP purposes and the recognition of income for U.S. federal income tax purposes, the effect of non-deductible capital expenditures, the creation of reserves, payment of required debt service or amortization payments, or the need to make additional investments in qualifying real estate assets. The insufficiency of our cash flow to cover our distribution requirements

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could require us to (i) sell assets in adverse market conditions, (ii) borrow on unfavorable terms, (iii) distribute amounts that would otherwise be invested in future acquisitions or capital expenditures or used for the repayment of debt, (iv) pay dividends in the form of "taxable stock dividends" or (v) use cash reserves, in order to comply with the REIT distribution requirements.

The ability of our board of trustees to revoke our REIT qualification without shareholder approval may cause adverse consequences to our shareholders.

        Our declaration of trust provides that our board of trustees may revoke or otherwise terminate our REIT election, without the approval of our shareholders, if it determines that it is no longer in our best interest to continue to qualify as a REIT. If we cease to be a REIT, we will not be allowed a deduction for dividends paid to shareholders in computing our taxable income and will be subject to U.S. federal income tax at regular corporate rates, as well as state and local taxes, which may have adverse consequences on our total return to our shareholders.

Although our use of TRSs may partially mitigate the impact of meeting certain requirements necessary to maintain our qualification as a REIT, there are limits on our ability to own and engage in transactions with TRSs, and a failure to comply with the limits would jeopardize our REIT qualification and may result in the application of a 100% excise tax.

        A REIT may own up to 100% of the stock of one or more TRSs. A TRS may hold assets and earn income that would not be qualifying assets or income if held or earned directly by a REIT. Both the subsidiary and the REIT must jointly elect to treat the subsidiary as a TRS. A corporation of which a TRS directly or indirectly owns more than 35% of the voting power or value of the stock will automatically be treated as a TRS. Overall, no more than 20% (25% for tax years beginning before January 1, 2018) of the value of a REIT's assets may consist of securities of one or more TRSs. In addition, rules limit the deductibility of interest paid or accrued by a TRS to its parent REIT to assure that the TRS is subject to an appropriate level of corporate taxation. Rules also impose a 100% excise tax on certain transactions between a TRS and its parent REIT that are treated as not being conducted on an arm's-length basis. We intend to jointly elect with one or more subsidiaries for those subsidiaries to be treated as TRSs for U.S. federal income tax purposes. These subsidiaries and any other TRSs that we form will pay U.S. federal, state and local income tax on their taxable income, and their after-tax net income will be available for distribution to us but is not required to be distributed to us. Although we will monitor the aggregate value of the securities of such TRSs and intend to conduct our affairs so that such securities will represent less than 20% of the value of our total assets, there can be no assurance that we will be able to comply with the TRS limitation in all market conditions.

Possible legislative, regulatory or other actions could adversely affect our shareholders and us.

        The rules dealing with U.S. federal, state and local income taxation are constantly under review by persons involved in the legislative process and by the IRS and the U.S. Treasury Department. Changes to tax laws (which changes may have retroactive application) could adversely affect our shareholders or us. In recent years, many such changes have been made and changes are likely to continue to occur in the future. We cannot predict whether, when, in what form, or with what effective dates, tax laws, regulations and rulings may be enacted, promulgated or decided, which could result in an increase in our, or our shareholders', tax liability or require changes in the manner in which we operate in order to minimize increases in our tax liability. A shortfall in tax revenues for states and municipalities in which we operate may lead to an increase in the frequency and size of such changes. If such changes occur, we may be required to pay additional taxes on our assets or income or be subject to additional restrictions. These increased tax costs could, among other things, adversely affect our financial condition, the results of operations and the amount of cash available for the payment of dividends.

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        A top legislative priority of the current administration and the current Congress may be significant reform of the Code, including potentially significant changes to taxation of business entities and the deductibility of interest expense. A material reduction of the corporate tax rate from the current 35% rate may reduce the attractiveness to potential shareholders of an investment in REIT stock compared with investments in other corporate investments. There is a substantial lack of clarity around the likelihood, timing and details of any such tax reform and the impact of any potential tax reform on our business and on the price of our common shares.

Our property taxes could increase due to property tax rate changes or reassessment, which could adversely affect our financial condition, results of operations, cash flow, per share trading price of our common shares and our ability to satisfy our principal and interest obligations and to make distributions to our shareholders.

        Even if we qualify as a REIT for U.S. federal income tax purposes, we will be required to pay state and local taxes on our properties. The real property taxes on our properties may increase as property tax rates change or as our properties are assessed or reassessed by taxing authorities. In particular, our portfolio of properties may be reassessed as a result of this offering. Therefore, the amount of property taxes we pay in the future may increase substantially from what we have paid in the past. If the property taxes we pay increase, our financial condition, results of operations, cash flow, per share trading price of our common shares and our ability to satisfy our principal and interest obligations and to make distributions to our shareholders could be adversely affected.

We may become subject to tax audits from time to time.

        In 2016, Congress revised the rules applicable to U.S. federal income tax audits of partnerships (such as our operating partnership) and the collection of any tax resulting from any such audits or other tax proceedings, generally for taxable years beginning after December 31, 2017. Under the new rules, the partnership itself may be liable for a hypothetical increase in partner-level taxes (including interest and penalties) resulting from an adjustment of partnership tax items on audit, regardless of changes in the composition of the partners (or their relative ownership) between the year under audit and the year of the adjustment. The new rules also include an elective alternative method under which the additional taxes resulting from the adjustment are assessed against the affected partners, subject to a higher rate of interest than otherwise would apply. Many questions remain as to how the new rules will apply, especially with respect to partners that are REITs or which are themselves partnerships (such as any partnership in which the operating partnership is a partner), and it is not clear at this time what effect this new legislation will have on us. However, these changes could increase the federal income tax, interest, and/or penalties otherwise borne by us in the event of a federal income tax audit of a subsidiary partnership (such as our operating partnership).


Risks Related to this Offering

There has been no public market for our common shares prior to this offering and an active trading market for our common shares may not develop or be sustained following this offering.

        Prior to this offering, there has not been any public market for our common shares, and there can be no assurance that an active trading market will develop or be sustained following this offering or that our common shares will be resold at or above the initial public offering price. We intend to apply to have our common shares listed on the NYSE under the symbol "WSPT." The initial public offering price of our common shares has been determined in consultation with the underwriters, but there can be no assurance that our common shares will not trade below the initial public offering price following the completion of this offering. See "Underwriting." The market value of our common shares could be substantially affected by general market conditions, including the extent to which a secondary market develops for our common shares following the completion of this offering, the extent of institutional investor interest in us, the general reputation of REITs and the attractiveness of their equity securities

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in comparison to other equity securities (including securities issued by other real estate-based companies), our financial performance and general stock and bond market conditions.

The market price and trading volume of our common shares may be volatile following this offering.

        Even if an active trading market develops for our common shares, the trading price of our common shares may be volatile. In addition, the trading volume in our common shares may fluctuate and cause significant price variations to occur. If the trading price of our common shares declines significantly, you may be unable to resell your shares at or above the public offering price. We cannot assure you that the trading price of our common shares will not fluctuate or decline significantly in the future.

        Some of the factors that could negatively affect our share price or result in fluctuations in the price or trading volume of our common shares include:

    actual or anticipated variations in our quarterly operating results or dividends;

    changes in guidance related to financial performance;

    publication of research reports about us or the real estate industry;

    increases in market interest rates that lead purchasers of our shares to demand a higher yield;

    changes in market valuations of similar companies;

    issuances of common shares upon exercise or vesting of equity awards or redemption of limited partnership interests;

    adverse market reaction to any additional debt we incur in the future;

    additions or departures of key management personnel;

    actions by institutional shareholders;

    speculation in the press or investment community;

    the realization of any of the other risk factors presented in this prospectus;

    the extent of investor interest in our securities;

    the general reputation of REITs and the attractiveness of our equity securities in comparison to other equity securities, including securities issued by other real estate-based companies;

    our underlying asset value;

    investor confidence in the stock and bond markets, generally;

    changes in tax laws;

    future equity issuances;

    failure to meet guidance related to financial performance;

    failure to meet and maintain REIT qualifications; and

    general market and economic conditions.

        In the past, securities class action litigation has often been instituted against companies following periods of volatility in the price of their common shares. This type of litigation could result in substantial costs and divert our management's attention and resources, which could have an adverse effect on our financial condition, results of operations, cash flow and trading price of our common shares.

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We may allocate the net proceeds from this offering in ways that you and other shareholders may not approve.

        We intend to use a portion of the net proceeds received from us to repay approximately $215.7 million in outstanding indebtedness under the KeyBank Loan Agreement, repay approximately $163.2 million of outstanding indebtedness under a senior mortgage loan and three mezzanine loans we entered into in connection with the acquisition of our second portfolio, pay approximately $63.6 million in connection with the redemption of our mandatory redeemable preferred equity and, if the underwriters exercise their over-allotment option, use up to $50.0 million of proceeds (before underwriting discounts) to repurchase up to 3,703,704 common units (based on the midpoint of the price range set forth on the front cover of this prospectus) from an affiliate of Safanad Limited. See "Use of Proceeds". We expect to use any remaining net proceeds for general corporate purposes, including capital expenditures and potential future acquisition opportunities. However, we have not yet committed to acquire specific properties, and you will be unable to evaluate the economic merits of such investments before making an investment decision to purchase our common shares in this offering. We have broad authority to invest in real estate investments that we may identify in the future, and we may make investments with which you may not agree. In addition, our investment policies may be amended or revised from time to time at the discretion of our board of trustees, without a vote of our shareholders. Our management could have broad discretion in the application of certain of the net proceeds from this offering and could spend the proceeds in ways that do not necessarily improve our operating results or enhance the value of our common shares. These factors increase the uncertainty, and thus the risk, of an investment in our common shares.

We may be unable to make distributions at expected levels, and we may be required to borrow funds to make distributions, which could result in a decrease in the market value of our common shares.

        Our estimated initial annual distributions represent 104.0% of our estimated initial cash available for distribution for the 12 months ending June 30, 2018, as calculated in "Distribution Policy." Accordingly, we may be unable to pay our estimated initial annual distribution to shareholders out of cash available for distribution. If sufficient cash is not available for distribution from our operations, we may have to fund distributions from working capital, borrow to provide funds for such distributions, or reduce the amount of such distributions. To the extent we borrow to fund distributions, our future interest costs would increase, thereby reducing our earnings and cash available for distribution from what they otherwise would have been. If cash available for distribution generated by our assets is less than our current estimate (based on the midpoint of the price range set forth on the front cover of this prospectus), or if such cash available for distribution decreases in future periods from expected levels, our inability to make the expected distributions could result in a decrease in the market price of our common shares. In the event the underwriters exercise their option to purchase additional shares, pending investment of the proceeds therefrom, our ability to pay such distributions out of cash from our operations may be further materially adversely affected.

        All distributions will be made at the discretion of our board of trustees and will be based upon, among other factors, our historical and projected results of operations, financial condition, cash flows and liquidity, maintenance of our REIT qualification and other tax considerations, capital expenditure and other expense obligations, debt covenants, contractual prohibitions or other limitations and applicable law and such other matters as our board of trustees may deem relevant from time to time. We may not be able to make distributions in the future.

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The continuing investors will receive benefits in connection with this offering, which create a conflict of interest because such investors have interests in the successful completion of this offering that may influence their decisions affecting the terms and circumstances under which this offering and formation transactions are completed.

        In connection with this offering and the formation transactions, our trustees, executive officers and employees will beneficially own an aggregate of 0.4% of our outstanding common shares or approximately 9.4% of our company on a fully diluted basis (0.3% of our outstanding common shares, or 9.2% of our company on a fully diluted basis, if the underwriters exercise their over-allotment option in full), and our other continuing investors will beneficially own approximately 15.2% of our outstanding common shares, or approximately 39.9% of our company on a fully diluted basis (13.5% of our outstanding common shares, or 34.1% of our company on a fully diluted basis, if the underwriters exercise their over-allotment option in full), and will beneficially own approximately 49.3% of outstanding partnership interests (or 43.3% if the underwriters exercise their over-allotment option in full) in our operating partnership (in each case, based on the midpoint of the price range set forth on the front cover of this prospectus). These transactions create a conflict of interest because the continuing investors have interests in the successful completion of this offering. These interests may influence their decisions, affecting the terms and circumstances under which this offering and the formation transactions are completed.

Increases in market interest rates may cause prospective purchasers to seek higher distribution yields and therefore reduce demand for our common shares and result in a decline in the market price of our common shares.

        The price of our common shares may be influenced by our distribution yield (i.e., the amount of our annual or annualized distributions, if any, as a percentage of the market price of our common shares) relative to market interest rates. An increase in market interest rates, which are currently low relative to historical levels, may lead prospective purchasers and holders of our common shares to expect a higher distribution yield, which we may not be able, or may choose not, to satisfy. As a result, prospective purchasers may decide to purchase other securities rather than our common shares, which would reduce the demand for our common shares, and existing holders of our common shares may decide to sell their shares, either of which could result in a decline in the market price of our common shares.

Future offerings of debt or equity securities, which would be senior to our common shares upon liquidation, and/or preferred equity securities, which may be senior to our common shares for purposes of dividend distributions or upon liquidation, may adversely affect the per share trading price of our common shares.

        In the future, we may attempt to increase our capital resources by making additional offerings of debt or equity securities (or causing our operating partnership to issue debt securities), including medium-term notes, senior or subordinated notes and classes or series of preferred shares. Upon liquidation, holders of our debt securities and shares of preferred shares and lenders with respect to other borrowings will be entitled to receive our available assets prior to distribution to the holders of our common shares. Additionally, any convertible or exchangeable securities that we issue in the future may have rights, preferences and privileges more favorable than those of our common shares and may result in dilution to owners of our common shares. Holders of our common shares are not entitled to preemptive rights or other protections against dilution. Our preferred shares, if issued, could have a preference on liquidating distributions or a preference on dividend payments that could limit our ability to pay dividends to the holders of our common shares. Because our decision to issue securities in any future offering will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of our future offerings.

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We are an "emerging growth company," and we cannot be certain if the reduced reporting requirements applicable to emerging growth companies will make our common shares less attractive to investors.

        We are an "emerging growth company" as defined in the JOBS Act. We will remain an "emerging growth company" until the earliest to occur of (i) the last day of the fiscal year during which our total annual revenue equals or exceeds $1.07 billion (subject to adjustment for inflation), (ii) the last day of the fiscal year following the fifth anniversary of this offering, (iii) the date on which we have, during the previous three-year period, issued more than $1 billion in non-convertible debt or (iv) the date on which we are deemed to be a "large accelerated filer" under the Exchange Act. We may take advantage of exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including, but not limited to, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. We cannot predict if investors will find our common shares less attractive because we may rely on these exemptions and benefits under the JOBS Act. If some investors find our common shares less attractive as a result, there may be a less active trading market for our common shares and the market price of our common shares may be more volatile and decline significantly.

We will incur significant costs as a result of operating as a new public company, and our management will devote substantial time to compliance initiatives.

        As a public company, we will incur significant legal, accounting, and other expenses that we did not incur as a private company. In addition, the Sarbanes-Oxley Act, as well as rules subsequently implemented by the SEC and the NYSE impose various requirements on public companies. In July 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act") the Dodd-Frank Act, was enacted. There are significant corporate governance and executive compensation related provisions in the Dodd-Frank Act that require the SEC to adopt additional rules and regulations in these areas such as "say on pay" and pay parity. Shareholder activism, the current political environment, and the current high level of government intervention and regulatory reform may lead to substantial new regulations and disclosure obligations, which may lead to additional compliance costs and impact the manner in which we operate our business in ways we cannot currently anticipate. Our management and other personnel will need to devote a substantial amount of time to these compliance initiatives. Moreover, these rules and regulations will increase our legal and financial compliance costs and will make some activities more time consuming and costly. For example, we expect these rules and regulations to make it more difficult and more expensive for us to obtain trustee and officer liability insurance and we may be required to incur substantial costs to maintain our current levels of such coverage.

If you invest in this offering, you will experience immediate dilution.

        Purchasers of our common shares offered by this prospectus will experience an immediate and substantial dilution of the net tangible book value of our common shares from the assumed initial public offering price based on the midpoint of the price range set forth on the front cover of this prospectus. Net tangible book value per share represents the amount of total tangible assets, less total liabilities, divided by the number of outstanding common shares (assuming the issuance of common shares upon redemption of common units on a one-for-one basis). As of June 30, 2017, our predecessor had a net tangible book deficit of approximately $67.4 million, or $(2.23) per share held by continuing investors. After giving effect to the sale of common shares by us in this offering (based on the midpoint of the price range set forth on the front cover of this prospectus), the application of aggregate net proceeds therefrom, completion of the formation transactions and the other adjustments set forth in our unaudited pro forma consolidated financial statements included elsewhere in this

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prospectus, the pro forma net tangible book value as of June 30, 2017 attributable to common shareholders would have been $420.4 million, or $5.50 per share, assuming the exchange of common units to be issued in connection with the formation transactions into common shares on a one-for-one basis (excluding LTIP units subject to time-based vesting, LTIP units subject to performance-based vesting, restricted share units subject to time-based vesting and performance share units to be granted to our executive officers, independent trustees and eligible non-executive employees concurrently with the completion of this offering). This amount represents an immediate increase in net tangible book value of $7.73 per share to our continuing investors and an immediate dilution in pro forma net tangible book value of $8.00 per share from the public offering price of $13.50 per share to our new investors.

The form, timing or amount of dividend distributions in future periods may vary and be impacted by economic and other considerations.

        The form, timing or amount of dividend distributions will be declared at the discretion of our board of trustees and will depend on actual cash from operations, our financial condition, capital requirements, the annual distribution requirements applicable to REITs under the Code and other factors as our board of trustees may consider relevant.

The market value of our common shares may decline due to the large number of our shares eligible for future sale.

        The market value of our common shares could decline as a result of sales of a large number of common shares in the market after this offering or upon issuance of common shares upon redemption of partnership interests in our operating partnership , or the perception that such sales could occur. These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell common shares in the future at a time and at a price that we deem appropriate. Upon completion of this offering, we will have a total of 46,158,161 common shares outstanding (or 52,008,161 common shares assuming the underwriters exercise their over-allotment option) including 24,075 restricted share units subject to time-based vesting to be granted to our independent trustees and 137,741 restricted share units subject to time-based vesting to be granted to eligible non-executive employees pursuant to the 2017 Incentive Award Plan (in each case, based on the midpoint of the price range set forth on the front cover of this prospectus). The 39,000,000 common shares sold in this offering (or 44,850,000 common shares if the underwriters exercise their over-allotment option in full) will be freely transferable without restriction or further registration under the Securities Act by persons other than our trustees, trustee nominees and executive officers and the continuing investors. Remaining common shares that will be held by our continuing investors immediately following the completion of the offering and the formation transactions will be "restricted securities" within the meaning of Rule 144 under the Securities Act and may not be sold in the absence of registration under the Securities Act unless an exemption from registration is available, including the exemptions contained in Rule 144. All of these common shares will be eligible for future sale following the expiration of the 180-day lock-up period. Such shares held by our continuing investors will have registration rights, including rights to underwritten demand registration statements, pursuant to registration rights agreements that we will enter into with those investors. When the restrictions under the lock-up arrangements expire or are waived, the related common shares or securities convertible into, exchangeable or redeemable for, exercisable for, or repayable with common shares will be available for sale or resale, as the case may be. We also may issue common or preferred shares or common or preferred units in connection with future property, portfolio or business acquisitions. Sales of substantial amounts of common shares (including common shares issued pursuant to our 2017 Incentive Award Plan) or common units in the public market, or upon issuance of common shares upon redemption of common units, or the perception that such sales might occur could adversely affect the market price of the common shares. In addition, future issuances of common shares may be dilutive to existing shareholders.

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

        This prospectus contains forward-looking statements within the meaning of the federal securities laws. In particular, statements relating to our liquidity and capital resources, portfolio performance and results of operations contain forward-looking statements. Furthermore, our pro forma financial statements and all statements regarding future financial performance and anticipated market conditions and demographics are forward-looking statements. We caution investors that any forward-looking statements included in this prospectus are based on management's beliefs and assumptions based on information currently available to management. When used, the words "anticipate," "believe," "expect," "intend," "may," "might," "plan," "estimate," "project," "should," "will," "would," "result," "pro forma," "approximately" and other similar expressions that do not relate solely to historical matters are intended to identify forward-looking statements. You can also identify forward-looking statements by discussions of strategy, plans or intentions.

        Forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond our control, and depend on assumptions, data or methods that may be incorrect or imprecise. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or projected. We caution you, therefore, against relying on any of these forward-looking statements.

        Some of the risks and uncertainties that may cause our actual results, performance, liquidity or achievements to differ materially from those expressed or implied by forward-looking statements include, among others, the following:

    adverse economic or real estate developments in our submarkets;

    general economic conditions;

    defaults on, early terminations or non-renewals of leases by tenants;

    risks associated with our leasing activities, including the risk that we will experience decreased rental rates or increased vacancy rates or that we do not realize the potential incremental annualized rent from embedded lease-up opportunities;

    intense competition in the real estate market that may limit our ability to attract or retain tenants or re-lease space;

    difficulties in identifying properties to acquire and completing acquisitions;

    our failure to successfully operate acquired properties;

    risks related to capital or other expenditures we may be required to make to retain and attract tenants;

    increased operating costs that we are unable to pass along to our tenants;

    loss of key personnel;

    our failure to obtain necessary outside financing;

    fluctuations in interest rates and increased costs to refinance or obtain new financing;

    our failure to generate sufficient cash flows to service our outstanding indebtedness;

    insufficient amounts of insurance or exposure to events that are either uninsured or underinsured;

    uncertainties and risks related to adverse weather conditions, natural disasters and climate change;

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    exposure to liability relating to environmental and health and safety matters;

    limited ability to dispose of assets because of the relative illiquidity of real estate investments and the nature of our assets;

    failure to meet the restrictive covenants and requirements in our existing and new debt agreements;

    risks associated with mortgage debt or unsecured financing or the unavailability thereof, which could make it difficult to finance or refinance properties and could subject us to foreclosure; and

    general volatility of the capital and credit markets and the market price of our common shares;

    changes in real estate and zoning laws and increases in real property tax rates;

    failure to qualify or maintain our qualification as a REIT;

    risks associated with the market for our common shares;

    risks associated with future sales of our common shares by our continuing investors or the perception that our continuing investors intend to sell substantially all of the common shares that they hold; or

    any of the other risks included in this prospectus, including those set forth under the headings "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Business and Properties."

        While forward-looking statements reflect our good faith beliefs, they are not guarantees of future performance. They are based on estimates and assumptions only as of the date of this prospectus. We undertake no obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, new information, data or methods, future events or other changes, except as required by applicable law.

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USE OF PROCEEDS

        We estimate that the net proceeds to us from this offering, after deducting underwriting discounts and estimated offering expenses, will be approximately $472.1 million ($499.2 million if the underwriters exercise their over-allotment option to purchase up to 5,850,000 additional common shares in full), in each case based on the midpoint of the price range set forth on the front cover of this prospectus. We will contribute the net proceeds from this offering, other than the net proceeds from the sale of additional common shares pursuant to the underwriters' exercise of their over-allotment option, if any, we will use to acquire common units described below, to our operating partnership in exchange for common units.

        We expect our operating partnership to use a portion of the net proceeds received from us to:

    repay approximately $215.7 million in outstanding indebtedness under the KeyBank Loan Agreement;

    repay approximately $163.2 million of outstanding indebtedness under a senior mortgage loan and three mezzanine loans we entered into in connection with the acquisition of our second portfolio; and

    pay approximately $63.6 million in cash in connection with the redemption of the mandatorily redeemable preferred equity our operating partnership issued in connection with our acquisition of our second portfolio. See "Structure and Formation of our Company—Formation Transactions—Redemption of Mandatorily Redeemable Preferred Equity."

        To the extent the underwriters exercise their over-allotment option, we will use up to $50.0 million of proceeds (before underwriting discounts) from the sale of additional common shares to acquire up to 3,703,704 common units (based on the midpoint of the price range set forth on the front cover of this prospectus) from SSOP LP. See "Certain Relationships and Related Transactions—Repurchase of Common Units." We will contribute any remaining net proceeds from the sale of such additional common shares to our operating partnership in exchange for common units. We expect our operating partnership to use any such net proceeds received from us for general corporate purposes, including capital expenditures and potential future acquisition opportunities.

        We expect our operating partnership to use any remaining net proceeds received from us for general corporate purposes, including capital expenditures and potential future acquisition opportunities.

        We entered into the KeyBank Loan Agreement in October 2016 and amended and restated the KeyBank Loan Agreement in July 2017. The KeyBank Loan Agreement provides for revolving loans of up to $235.0 million, has a maturity date of January 12, 2018 (which may be extended for two terms of three months each, subject to meeting certain conditions) and bears interest at an annual rate of LIBOR plus 1.30%. In connection with the amendment and restatement of the KeyBank Loan Agreement in July 2017, we borrowed $210.7 million, $210.3 million of which was used to repay all of the outstanding indebtedness we incurred in connection with the acquisition of our first portfolio. In August 2017, we borrowed an additional $5.0 million under the KeyBank Loan Agreement.

        We entered into a senior mortgage loan and three mezzanine loans (mezzanine A loan, mezzanine B loan and mezzanine C loan) in connection with our acquisition of our second portfolio in October 2016, which we collectively refer to as the second portfolio debt. As of June 30, 2017, the senior mortgage loan had a principal balance of $557.0 million, the mezzanine A loan had a principal balance of $100.0 million, the mezzanine B loan had a principal balance of $109.0 million and the mezzanine C loan had a principal balance of $50.0 million. The second portfolio debt has a maturity date of October 9, 2018 (which may be extended for three terms of one year each, subject to meeting certain conditions) and had a weighted average interest rate of 6.22% at June 30, 2017.

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DISTRIBUTION POLICY

        We intend to make regular quarterly distributions to our shareholders. We intend to declare a pro rata initial distribution with respect to the period commencing on the completion of this offering and ending June 30, 2018, based on a distribution of $0.135 per share for a full quarter. On an annualized basis, this would be $0.540 per share, or an annual distribution rate of approximately 4.0% (based on the midpoint of the price range set forth on the front cover of this prospectus). We estimate that this initial annual distribution rate will represent approximately 104.0% of estimated cash available for distribution to our common shareholders for the 12-month period ending June 30, 2018. We do not plan to reduce our intended initial annual distribution rate if the underwriters exercise their over-allotment option in full. We will be subject to prohibitions on distributions to our shareholders if we are in default under the new unsecured credit facilities we intend to enter into upon or shortly after the consummation of this offering as described in "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources." Furthermore, we plan to maintain this rate for the 12-month period following completion of this offering, unless circumstances change materially.

        Our intended initial annual distribution rate has been established based on our estimate of cash available for distribution for the 12-month period ending June 30, 2018, which we have calculated based on adjustments to our pro forma net (loss) before non-controlling interest for the 12 months ended June 30, 2017. This estimate was based on the pro forma operating results and does not take into account our business and growth strategies, nor does it take into account any unanticipated expenditures we may have to make or any financings to fund such expenditures. In estimating our cash available for distribution for the 12 months ending June 30, 2018, we have made certain assumptions as reflected in the table and footnotes below.

        Our estimate of cash available for distribution does not include the effect of any changes in our working capital resulting from changes in our working capital accounts. Our estimate also does not reflect the amount of cash estimated to be used for investing activities for acquisition, redevelopment and other similar activities, except as specifically noted below. It also does not reflect the amount of cash estimated to be used for financing activities, as specifically noted below. Any such investing and/or financing activities may materially and adversely affect our estimate of cash available for distribution. Because we have made the assumptions set forth above in estimating cash available for distribution, we do not intend this estimate to be a projection or forecast of our actual results of operations, net operation income, or NOI, earnings before interest, tax, depreciation and amortization, or EBITDA, adjusted EBITDA, funds from operations, or FFO, core FFO, liquidity or financial condition and have estimated cash available for distribution for the sole purpose of determining our estimated initial annual distribution amount. Our estimate of cash available for distribution should not be considered as an alternative to cash flow from operating activities (computed in accordance with GAAP) or as an indicator of our liquidity or our ability to pay distributions. In addition, the methodology upon which we made the adjustments described below is not necessarily intended to be a basis for determining future dividends or other distributions.

        No assurance can be given that our estimated cash available for distribution to our shareholders will be accurate or that our actual cash available for distribution to our shareholders will be sufficient to pay distributions to them at any expected or level or at any particular yield, in an amount sufficient for us to continue to qualify as a REIT or to reduce or eliminate U.S. federal income taxes or at all. Accordingly, we may need to borrow (for instance, through draws on our new unsecured credit facilities) or rely on other third-party capital to make distributions to our shareholders, and such third-party capital may not be available to us on favorable terms, or at all. As a result, we may not be able to pay distributions to our common shareholders in the future. In addition, our preferred shares, if issued, would likely have a preference on distribution payments. All distributions will be made at the discretion of our board of trustees and will depend on our historical and projected results of operations, liquidity and financial

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condition, our REIT qualification, our debt service requirements, operating expenses and capital expenditures, prohibitions and other restrictions under financing arrangements and applicable law and other factors as our board of trustees may deem relevant from time to time. If we borrow to fund distributions, our future interest costs would increase, thereby reducing our earnings and cash available for distribution from what they otherwise would have been.

        U.S. federal income tax law requires that a REIT distribute annually at least 90% of its taxable income (determined without regard to the dividends paid deduction and excluding net capital gain) and that it pay U.S. federal income tax at regular corporate rates to the extent that it distributes annually less than 100% of its taxable income (including capital gain). For more information, please see "Material U.S. Federal Income Tax Considerations."

        The following table describes our pro forma net income (loss) for the 12-month period ended June 30, 2017 and the adjustments we have made to calculate our estimated cash available for distribution for the 12-month period ending June 30, 2018 (dollars in thousands, except per share data):

Pro forma net income (loss) for the 12 months ended December 31, 2016

  $ (27,148 )

Less: Pro forma net income (loss) for the six months ended June 30, 2016

    17,305  

Add: Pro forma net income (loss) for the six months ended June 30, 2017

    (20,218 )

Pro forma net income (loss) for the 12 months ended June 30, 2017

  $ (30,061 )

Add: Real estate depreciation and amortization

    88,947  

Less: Net effects of straight-lining rental revenue(1)

    (7,389 )

Add: Net effects of above- and below-market lease amortization(2)

    4,253  

Add: Other depreciation and amortization(3)

    10  

Add: Non-cash compensation expense(4)

    5,179  

Add: Non-cash interest expense(5)

    8,228  

Add: Net increases in contractual rent(6)

    13,411  

Add: Loss on extinguishment of debt

    1,093  

Add: Transaction related costs(7)

    133  

Less: Unrealized gain on derivative instruments(8)

    (160 )

Less: Net decreases in contractual rent due to lease expirations, assuming renewals consistent with historical data(9)

    (8,938 )

Estimated cash flow from operating activities for the 12 months ending June 30, 2018

  $ 74,706  

Less: Estimated provision for tenant improvements and leasing commissions associated with second generation leases(10)

  $ (24,356 )

Less: Estimated provision for recurring capital expenditures(11)

    (2,170 )

Less: Estimated provision for tenant improvements and leasing commissions associated with first generation leases(12)

    (8,174 )

Less: Estimated provision for non-recurring capital expenditures(13)

    (8,086 )

Less: Additional capitalized interest under the expected revolving credit facility(14)

    (77 )

Estimated cash flow used in investing activities for the 12 months ending June 30, 2018

  $ (42,863 )

Add: Borrowings from expected revolving credit facility(15)

  $ 8,086  

Estimated cash flow provided by financing activities for the 12 months ending June 30, 2018

  $ 8,086  

Estimated cash available for distribution for the 12 months ending June 30, 2018

  $ 39,929  

Our shareholders' share of estimated cash available for distribution(16)

  $ 23,969  

Non-controlling interests' share of estimated cash available for distribution(17)

  $ 15,960  

Total estimated initial annual distribution to our shareholders

  $ 24,925  

Estimated initial annual distribution per share(18)

  $ 0.540  

Payout ratio based on our shareholders' share of estimated cash available for distribution(19)

    104.0 %

(1)
Represents the elimination of the net effects of straight-lining pro forma rental revenues for the 12 months ended June 30, 2017.

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(2)
Represents the elimination of pro forma non-cash adjustments for above- and below-market leases (including above-market ground leases) for the 12 months ended June 30, 2017.

(3)
Represents the elimination of pro forma depreciation and amortization associated with all other identified tangible and intangible assets for the 12 months ended June 30, 2017 (other than pro forma real estate depreciation).

(4)
Represents the elimination of pro forma non-cash compensation expense related to equity-based awards granted to our executive officers, independent trustees and eligible non-executive employees for the 12 months ended June 30, 2017.

(5)
Represents the elimination of pro forma non-cash interest expense for the 12 months ended June 30, 2017, including the amortization of deferred finance costs and debt discount.

(6)
Represents the sum of (i) contractual rent increases and the full-year impact of leases that commenced during the 12 months ended June 30, 2017 and will continue in effect during the 12 months ending June 30, 2018 of approximately $7.7 million, net of associated increases in property operating expenses of approximately $30,000, plus (ii) net reductions in rent abatement from leases that commenced on or before June 30, 2017 during the 12 months ending June 30, 2018 of approximately $2.9 million, plus (iii) contractual rent from leases entered into on or prior to October 20, 2017 but not commenced as of June 30, 2017 of approximately $5.6 million, net of associated increases in property operating expenses of approximately $156,500 and abatements associated with these leases of approximately $2.7 million for the 12 months ending June 30, 2018.

(7)
Represents the elimination of certain transaction related costs attributable to the acquisition of our second portfolio that were expensed and reflected in our historical results of operations for the year ended December 31, 2016 but not eliminated in our pro forma net income (loss) for the 12 months ended June 30, 2017.

(8)
Represents the elimination of pro forma non-cash unrealized gain relating to the increase in the fair value of our interest rate caps that are not designated as hedges for the 12 months ended June 30, 2017.

(9)
Represents the full-year impact of leases that expired or were terminated during the 12 months ending June 30, 2017 and estimated net decreases in contractual rent during the 12 months ending June 30, 2018 due to lease expirations totaling 1,230,652 square feet, assuming a renewal rate of 71.7% based on expiring square feet, which was our historical lease renewal rate (without giving effect to incremental square footage under expansion leases or new leases) during the periods set forth below, and rental rates on renewed leases equal to the in-place rates for such leases at expiration. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Lease Expirations" for a further discussion of our scheduled lease expirations. This adjustment gives effect only to expirations net of estimated renewals and does not take into account incremental expansion or new leasing.
 
  Period from
December 3,
2015 to
December 31,
2015
  Year Ended
December 31,
2016
  Six Months
Ended
June 30,
2017
  Total
December 3,
2015 to June 30,
2017
 

Total scheduled lease expirations (RSF)

    5,454     532,728     877,882     1,416,064  

Terminated/defaulted leases (RSF)

        18,736     11,258     29,994  

Short-term/swing space leases (RSF)

        52,550     40,880     93,430  

Known vacates (RSF)

        165,162     23,381     188,543  

Renewable leases (RSF)

    5,454     296,280     802,363     1,104,097  

Lease renewals (RSF)(1)

    4,244     254,480     532,424     791,148  

Renewal rate

    77.8 %   85.9 %   66.4 %   71.7 %

(1)
Excludes 70,660, 76,972, and 1,942 square feet of incremental space under lease expansions and 216,643, 168,246, and 6,463 square feet under new leases for the six months ended June 30, 2017, the year ended December 31, 2016 and the period from December 3, 2015 through December 31, 2015, respectively.
(10)
Includes (i) approximately $16.0 million for contractually committed tenant improvement or leasing commission costs expected to be paid or incurred in the 12 months ending June 30, 2018 related to second generation leases entered into on or prior to October 20, 2017 and (ii) estimated tenant improvement and leasing commission costs of approximately $8.3 million for the estimated lease renewals described in footnote 9 above assuming weighted average costs of $9.42 per square foot, based on tenant improvement and leasing commission costs for renewal leases across our portfolio during the periods set forth below. During the 12 months ending June 30, 2018, we expect to have additional tenant improvement and leasing commission costs related to new leasing that occurs after October 20, 2017. Any increases in such costs would be directly related to such new leasing in that such costs would only be committed to when a new lease is signed. Except for

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    the estimate of tenant improvement and leasing commission costs for the estimated lease renewals described in footnote 9 above, increases in costs for tenant improvements and leasing commissions for any such new leases are not included herein.

 
  Period from
December 3,
2015 to
December 31,
2015
  Year Ended
December 31,
2016
  Six Months
Ended
June 30,
2017
  Weighted
Average
December 3,
2015 to June 30,
2017
 

Total average tenant improvement and leasing commission costs per square foot

  $   $ 6.98   $ 10.48   $ 9.42  
(11)
For the purposes of calculating the amount in the above table, we have assumed, based on our current estimates, that we will incur approximately $2.2 million, or $0.22 per square foot, of recurring capital expenditures over the 12 months ending June 30, 2018.

(12)
For purposes of calculating the amount in the above table, we have assumed, based on our current estimates, that we will incur (i) approximately $2.1 million of tenant improvements and leasing commission costs associated with a build-to-suit office project in Phoenix and (ii) approximately $6.0 million of tenant improvements and leasing commission costs associated with other first generation leases over the 12 months ending June 30, 2018.

(13)
For the purposes of calculating the amount in the above table, we have assumed, based on our current estimates, that we will incur approximately $8.2 million of non-recurring capital expenditures (excluding costs of tenant improvements and leasing commissions associated with first generation leases) associated with a build-to-suit office project in Phoenix over the 12 months ending June 30, 2018.

(14)
Represents the estimated capitalized interest associated with borrowings under the revolving credit facility we intend to enter into in connection with this offering and the formation transactions to cover certain tenant improvements and leasing commissions and non-recurring capital expenditures during the 12 months ending June 30, 2018 described in footnotes 12 and 13 above. These amounts are calculated based on a projected draw schedule that reflects management's estimate of when these costs will be incurred over the 12 months ending June 30, 2018.

(15)
Represents the estimated borrowings under the revolving credit facility we intend to enter into in connection with this offering and the formation transactions to cover approximately $8.2 million of non-recurring capital expenditures associated with a build-to-suit office project in Phoenix during the 12 months ending June 30, 2018 described in footnote 13 above.

(16)
Our shareholders' share of estimated cash available for distribution is based on an estimated ownership by our company of approximately 60.0% of the limited partner interests in our operating partnership (based on the midpoint of the price range set forth on the front cover of this prospectus).

(17)
Represents the share of our estimated cash available for distribution for the 12 months ending June 30, 2018 that is attributable to the holders of limited partner interests in our operating partnership (based on the midpoint of the price range set forth on the front cover of this prospectus).

(18)
Based on a total of 46,158,161 common shares and restricted share units subject to time-based vesting to be outstanding upon completion of this offering.

(19)
Calculated as the estimated initial annual distribution to our shareholders divided by our shareholders' share of estimated cash available for distribution for the 12 months ending June 30, 2018. To the extent our actual cash available for distribution to our shareholders is not sufficient to pay our estimated initial annual distribution to our shareholders, we may need to borrow funds (for instance, through draws on our new unsecured credit facilities) or rely on other third-party capital to make distributions to our shareholders, and such third-party capital may not be available to us on favorable terms, or at all.

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CAPITALIZATION

        The following table sets forth the cash and cash equivalents and capitalization of our predecessor as of June 30, 2017 and our cash and cash equivalents and capitalization as of June 30, 2017 on a pro forma basis, giving effect to this offering, the formation transactions and the other adjustments described in the unaudited pro forma consolidated financial statements and the notes related thereto included elsewhere in this prospectus and based on the midpoint of the price range set forth on the front cover of this prospectus. You should read this table in conjunction with "Use of Proceeds," "Selected Consolidated Historical and Pro Forma Financial and Other Data," "Management's Discussion and Analysis of Financial Condition and Results of Operations," our predecessor's combined consolidated financial statements and our unaudited pro forma consolidated financial statements and the notes related thereto included elsewhere in this prospectus (dollars in thousands).

 
  As of June 30, 2017  
 
  Historical
Predecessor
  Company
Pro Forma
 

Cash and cash equivalents(1)

  $ 10,852   $ 27,024  

Debt:

             

Mortgages payable, net(2)

  $ 1,013,956   $ 644,074  

Redeemable preferred equity, net

    104,297        

Equity:

             

Owners' equity

    56,491        

Accumulated other comprehensive loss

    (223 )   (134 )

Common shares, $0.01 par value per share, 46,158,161 shares issued and outstanding, pro forma(3)

        460  

Preferred shares, $0.01 par value per share, zero shares issued and outstanding, pro forma

           

Additional paid in capital

        444,132  

Accumulated deficit

        (109,355 )

Noncontrolling interest

        209,182  

Total equity

    56,268     544,285  

Total capitalization

  $ 1,174,521   $ 1,188,359  

(1)
Pro forma amount excludes the potential payment of approximately $5.1 million of lender fees in connection with the closing of our two new delayed draw term loan facilities shortly after the consummation of this offering and the formation transactions. No assurance can be given that we will close on our two new delayed draw term loan facilities based on this proposed timing or at all.

(2)
We also expect to enter into our new unsecured credit facilities allowing for borrowings of up to $1.15 billion. We expect to close our new revolving credit facility (allowing for borrowings of up to $500.0 million) concurrently with the consummation of this offering and the formation transactions, and we intend to close on our two new term loan facilities (allowing for borrowings of up to $650.0 million in the aggregate) shortly after the consummation of this offering and the formation transactions. Although we have obtained $1.15 billion in total commitments for our new unsecured credit facilities, no assurance can be given that we will close on our two new delayed draw term loan facilities based on this proposed timing or at all.

(3)
Includes (i) 39,000,000 common shares to be issued in this offering, (ii) 6,996,345 common shares to be issued in connection with the formation transactions (based on the midpoint of the price range set forth on the front cover of this prospectus) and (iii) 137,741 restricted share units subject to time-based vesting to be granted to eligible non-executive employees and 24,075 restricted share units subject to time-based vesting to be granted to our independent trustees concurrently with the completion of this offering (in each case, based on the midpoint of the price range set forth on the front cover of this prospectus). Excludes (a) 5,850,000 common shares issuable upon the exercise in full of the underwriters' over-allotment option to purchase up to an additional shares from us, (b) 137,741 performance share units to be granted to eligible non-executive employees concurrently with the completion of this offering (based on the midpoint of the price range set forth on the front cover of this prospectus), (c) 3,064,897 common shares available for future issuance under our 2017 Incentive Award Plan (based on the midpoint of the price range set forth on the front cover of this prospectus) and (d) 30,120,212 common shares that may be issued, at our option, upon exchange of 30,120,212 common units to be issued in the formation transactions (based on the midpoint of the price range set forth on the front cover of this prospectus).

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DILUTION

        Purchasers of common shares offered by this prospectus will experience an immediate and substantial dilution of the net tangible book value of our common shares from the assumed initial public offering price at the midpoint of the price range set forth on the front cover of this prospectus. Net tangible book value per share represents the amount of total tangible assets less total liabilities, divided by the number of outstanding common shares, assuming the exchange of common units into common shares on a one-for-one basis. As of June 30, 2017, our predecessor had a net tangible book deficit of approximately $67.4 million, or $(2.23) per share held by continuing investors. After giving effect to the sale of common shares by us in this offering (based on the midpoint of the price range set forth on the front cover of this prospectus), the application of aggregate net proceeds therefrom, completion of the formation transactions and the other adjustments set forth in our unaudited pro forma consolidated financial statements included elsewhere in this prospectus, the pro forma net tangible book value as of June 30, 2017 attributable to common shareholders would have been $420.4 million, or $5.50 per share, assuming the exchange of common units to be issued in connection with the formation transactions into common shares on a one-for-one basis (excluding LTIP units subject to time-based vesting, LTIP units subject to performance-based vesting, restricted share units subject to time-based vesting and performance share units to be granted to our executive officers, independent trustees and eligible non-executive employees concurrently with the completion of this offering). This amount represents an immediate increase in net tangible book value of $7.73 per share to our continuing investors and an immediate dilution in pro forma net tangible book value of $8.00 per share from the public offering price of $13.50 per share to our new investors. The following table illustrates this per share dilution.

Assumed initial public offering price per share at the midpoint of the price range set forth on the front cover of this prospectus

        $ 13.50  

Net tangible book value (deficit) per share of our predecessor as of June 30, 2017, before the formation transactions and this offering(1)

  $ (2.23 )      

Net increase in net tangible book value per share attributable to this offering and the formation transactions

  $ 7.73        

Pro forma net tangible book value per share after this offering and the formation transactions(2)

        $ 5.50  

Dilution in pro forma net tangible book value per share to new investors(3)

        $ 8.00  

(1)
Net tangible book value per share of our predecessor as of June 30, 2017 before this offering and the formation transactions was determined by dividing the net tangible book value of our predecessor as of June 30, 2017 by the number of common shares held by continuing investors immediately after this offering, assuming the exchange of common units to be issued in connection with the formation transactions and fully-vested LTIP units to be granted to certain executive officers concurrently with the completion of this offering into common shares on a one-for-one basis. These calculations exclude those common shares issued in connection with the redemption of our mandatorily redeemable preferred equity concurrently with the offering because our mandatorily redeemable preferred equity was accounted for as debt by our predecessor.

(2)
The pro forma net tangible book value per share after this offering and the formation transactions was determined by dividing net tangible book value of approximately $420.4 million by common shares deemed to be outstanding immediately after this offering, assuming the exchange of common units to be issued in connection with the formation transactions and fully-vested LTIP units to be granted to certain executive officers concurrently with the completion of this offering into common shares on a one-for-one basis (excluding LTIP units subject to time-based vesting, LTIP units subject to performance-based vesting, restricted share units subject to time-based vesting and performance share units to be granted to our executive officers, independent trustees and eligible non-executive employees concurrently with the completion of this offering), which amount excludes the shares and the related proceeds that may be issued by us upon exercise of the over-allotment option and additional shares reserved for future issuance under our 2017 Incentive Award Plan.

(3)
The dilution in pro forma net tangible book value per share to new investors was determined by subtracting pro forma net tangible book value per share after this offering and the formation transactions from the assumed initial public offering price paid by a new investor for our common shares. For the purpose of calculating our predecessor's pro forma book

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    values, we have assumed that, as of June 30, 2017, the common shares and common units to be issued as part of the formation transactions and fully-vested LTIP units to be granted to certain executive officers concurrently with the completion of this offering were outstanding as of such date.

        Assuming the underwriters exercise their over-allotment option in full, our pro forma net tangible book value at June 30, 2017 would have been $447.5 million, or $5.69 per share. This represents an immediate dilution in pro forma net tangible book value of $0.19 per share to our new investors. The calculation of the pro forma net tangible book value, assuming the exercise of the underwriters' over-allotment option in full, assumes the issuance of 5,850,000 common shares and the repurchase of approximately 3,703,704 common units from SSOP LP (based on the midpoint of the price range set forth on the front cover of this prospectus), resulting in a net 2,146,296 additional common shares and common units being issued (based on the midpoint of the price range set forth on the front cover of this prospectus).

        The table below summarizes, as of June 30, 2017, on a pro forma basis, the differences between the number of common shares and common units to be received by the continuing investors in connection with the formation transactions and the new investors purchasing common shares in this offering and the net tangible book value attributable to investments by our continuing investors and the net tangible book value attributable to cash paid by the new investors purchasing common shares in this offering. In calculating the the net tangible book value attributable to cash paid by the new investors purchasing common shares in this offering, we used an assumed initial public offering price of $13.50 per share, which is the midpoint of the price range set forth on the front cover of this prospectus, after deducting underwriting discounts and estimated offering expense payable by us.

 
   
   
  Pro Forma Net
Tangible Book Value
of Contribution/
Cash(1)
  Average
Price
Per
Share/
Common
Unit
 
 
  Shares/Common
Units Issued/Granted
 
 
  Number   Percentage   Amount   Percentage  
 
   
   
  (dollars in thousands,
except per share data)

   
 

Continuing investors—common shares(2)

    6,996,345     9.2 % $ (9,733 )   (2.3 )% $ (1.39 )

Continuing investors—common units(3)

    30,120,212     39.4 %   (41,904 )   (10.0 )% $ (1.39 )

New investors(4)

    39,000,000     51.0 %   472,070     112.3 % $ 12.10  

LTIP units to be granted to certain executive officers in connection with this offering(5)

    333,333     0.4 %              

Total

    76,449,890     100.0 % $ 420,433     100.0 % $ 5.50  

(1)
Represents pro forma net tangible book value as of June 30, 2017 after giving effect to this offering and the formation transactions.

(2)
Includes common shares to be issued in connection with the formation transactions.

(3)
Includes common units to be issued in connection with the formation transactions (excluding the LTIP units subject to time-based vesting, LTIP units subject to performance-based vesting to be granted to our executive officers and LTIP units that will be fully-vested upon grant to certain of our executive officers concurrently with the completion of this offering).

(4)
Includes common shares to be sold in this offering.

(5)
Includes LTIP units that will be fully vested upon grant to certain of our executive officers concurrently with the completion of this offering. Excludes LTIP units subject to time-based vesting, LTIP units subject to performance-based vesting, restricted share units subject to time-based vesting and performance share units to be granted to our executive officers and eligible non-executive employees concurrently with the completion of this offering.

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SELECTED CONSOLIDATED HISTORICAL AND PRO FORMA FINANCIAL AND OTHER DATA

        The following table sets forth selected financial and other data on (i) an historical basis for our predecessor and (ii) a pro forma basis for our company after giving effect to the completion of this offering, the formation transactions and the other adjustments described in the unaudited pro forma consolidated financial statements beginning on page F-3. We have not presented historical data for Workspace Property Trust because we have not had any corporate activity since our formation other than the issuance of common shares in connection with our initial capitalization and activity in connection with this offering and the formation transactions. Accordingly, we do not believe that a discussion of the historical results of Workspace Property Trust would be meaningful. Prior to or concurrently with the completion of this offering, we will consummate the formation transactions pursuant to which we will become the sole general partner of our operating partnership. Upon completion of the formation transactions, substantially all of our assets will be held by, and substantially all of our operations will be conducted through, our operating partnership. We will contribute the net proceeds received by us from this offering, other than the net proceeds from the sale of additional common shares pursuant to the underwriters' exercise of their over-allotment option, if any, we will use to acquire common units as described under "Use of Proceeds," to our operating partnership in exchange for common units. For more information regarding our predecessor, our operating partnership and the formation transactions, please see "Structure and Formation of Our Company."

        The historical financial data as of December 31, 2016 and 2015 and for the year ended December 31, 2016 and, the period from December 3, 2015 (when our predecessor commenced operations) to December 31, 2015, and the period from January 1, 2015 to December 2, 2015 has been derived from our predecessor's audited combined consolidated financial statements included elsewhere in this prospectus. The historical financial data as of June 30, 2017 and for each of the six months ended June 30, 2017 and 2016 has been derived from our predecessor's unaudited combined consolidated financial statements included elsewhere in this prospectus and includes all adjustments, consisting of normal accruals, that management considers necessary to present fairly the information set forth therein.

        The unaudited pro forma consolidated financial data as of and for the six months ended June 30, 2017 and for the year ended December 31, 2016 is presented as if this offering, the formation transactions and the other adjustments described in the unaudited pro forma consolidated financial statements had occurred on June 30, 2017 for purposes of the unaudited pro forma consolidated balance sheet and as of January 1, 2016 for purposes of the unaudited pro forma consolidated statements of operations. Our unaudited pro forma consolidated financial data is not necessarily indicative of what our actual financial condition and results of operations would have been as of the date and for the periods indicated, nor does it purport to represent our future financial condition or results of operations.

        You should read the following selected financial data in conjunction with our predecessor's historical combined consolidated financial statements, our unaudited pro forma consolidated financial statements and, in each case, the related notes thereto, along with "Management's Discussion and

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Analysis of Financial Condition and Results of Operations," which are included elsewhere in this prospectus.

 
   
   
   
   
  Workspace Ownership Period    
  Prior
Ownership
Period
 
 
   
  Workspace
Ownership Period
   
   
 
 
  Pro Forma    
   
  Period from
December 3,
2015
(commencement
of operations) to
December 31,
2015
   
 
 
  Pro Forma    
   
  Period from
January 1,
2015 to
December 2,
2015
 
 
  Six Months Ended June 30,    
   
 
 
  Year Ended
December 31,
2016
  Year Ended
December 31,
2016
   
 
(Dollars in thousands, except per share data)
  2017   2017   2016    
 
   
 
 
  (Unaudited)
  (Unaudited)
  (Unaudited)
  (Unaudited)
   
   
   
   
 

Statement of Operations Data

                                               

Revenues:

                                               

Rental revenue

  $ 59,447     $59,447     $14,878   $ 118,976     $51,467     $2,319         $23,083  

Tenant reimbursements

    33,234     33,234     8,458     61,321     27,338     1,139         15,521  

Other revenue

    662     662     77     4,601     3,952     10         115  

Total revenue

    93,343     93,343     23,413     184,898     82,757     3,468         38,719  

Expenses:

                                               

Operating expenses

    22,082     22,082     5,640     35,330     17,531     773         9,564  

Real estate taxes

    11,731     11,731     2,528     23,071     9,611     399         4,747  

Depreciation and amortization

    46,393     46,393     10,381     93,876     41,129     1,855         9,632  

Transaction related costs

                213     213     778          

General and administrative

    9,493     7,269     1,293     11,598     5,644     308         8  

Management fees and allocated costs

                                3,199  

Total expenses

    89,699     87,475     19,842     164,088     74,128     4,113         27,150  

Operating income (loss)

    3,644     5,868     3,571     20,810     8,629     (645 )       11,569  

Other income (expenses):

                                               

Interest expense

    (23,958 )   (45,073 )   (6,597 )   (46,084 )   (31,545 )   (1,030 )        

Loss on extinguishment of debt

                (1,093 )   (1,093 )            

Unrealized gain (loss) on derivative instruments

    96     96     (845 )   (781 )   (781 )   (140 )        

Net income (loss)

  $ (20,218 )   $(39,109 )   $(3,871 ) $ (27,148 )   $(24,790 )   $(1,815 )       $11,569  

Per Share Data:

                                               

Pro forma loss per share—basic and diluted

  $ (0.26 )             $ (0.35 )                      

Pro forma weighted average common shares outstanding—basic and diluted

    45,996                 45,996                        

 

 
   
  Workspace Ownership Period  
 
  Pro Forma  
 
   
  December 31, 2016   December 31, 2015  
(Dollars in thousands)
  June 30, 2017   June 30, 2017  
 
  (Unaudited)
  (Unaudited)
   
   
 

Balance Sheet Data

                         

Real estate properties, net

  $ 1,043,826   $ 1,043,826   $ 1,054,968   $ 231,314  

Total assets

    1,239,766     1,231,427     1,260,490     264,705  

Mortgages and other loan payables, net

    644,074     1,013,956     1,008,073     205,567  

Redeemable preferred equity, net

        104,297     99,585      

Total liabilities

    695,481     1,175,159     1,150,929     218,715  

Total equity

    544,285     56,268     109,561     45,990  

Total liabilities and equity

    1,239,766     1,231,427     1,260,490     264,705  

Number of rental properties (at end of period)

   
148
   
148
   
148
   
40
 

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  Workspace Ownership Period    
  Prior
Ownership
Period
 
 
   
  Workspace
Ownership Period
   
   
 
 
  Pro Forma    
   
  Period from
December 3,
2015
(commencement
of operations) to
December 31,
2015
   
 
 
  Pro Forma    
   
  Period from
January 1,
2015 to
December 2,
2015
 
 
  Six Months Ended June 30,    
   
 
 
  Year Ended
December 31,
2016
  Year Ended
December 31,
2016
   
 
(Dollars in thousands)
  2017   2017   2016    
 
   
 
 
  (Unaudited)
  (Unaudited)
  (Unaudited)
  (Unaudited)
   
   
   
   
 

Other Data

                                               

Net cash provided by (used in) operating activities

          $25,055     $6,456           $25,799     $(213 )       $16,587  

Net cash used in investing activities

          (6,529 )   (565 )         (975,547 )   (238,449 )       (4,083 )

Net cash provided by (used in) financing activities

          (13,599 )   (2,463 )         980,513     (242,392 )       (12,582 )

NOI(1)

  $ 58,289               $ 122,944                        

Adjusted EBITDA(1)

    52,261                 120,809                        

FFO(1)

    26,165                 66,728                        

Core FFO(1)

    26,069                 68,815                        

(1)
See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures" for a definition of this metric and reconciliation of this metric to the most directly comparable GAAP number and a statement of why our management believes the presentation of the metric provides useful information to investors and, to the extent material, any additional purposes for which management uses the metric.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

        You should read the following discussion of our results of operations and financial condition in conjunction with our unaudited combined consolidated statements and notes thereto of our predecessor as of June 30, 2017 and the six months ended June 30, 2017 and June 30, 2016, and the combined consolidated financial statements and related notes thereto of our predecessor as of December 31, 2016 and 2015 and for the year ended December 31, 2016, the period December 3, 2015 (when our predecessor commenced operations) to December 31, 2015, which we refer to as the Workspace ownership period, and the period January 1, 2015 to December 2, 2015, which we refer to as the prior ownership period, each included elsewhere in this prospectus, as well as our unaudited pro forma consolidated financial statements and related notes, each included elsewhere in this prospectus. In order to present this discussion and analysis in a way that offers investors a period to period comparison, the historical results of operations, cash flows and certain other information for the year ended December 31, 2015 are presented and discussed on a basis that combines the results of operations, cash flows and certain other information of the Workspace owner with those of the prior owner. This discussion contains forward-looking statements that involve risks and uncertainties. The forward-looking statements are not historical facts, but rather are based on current expectations, estimates, assumptions and projections about our industry, business and future financial results. Our actual results could differ materially from the results contemplated by these forward-looking statements due to a number of factors, including those discussed in the sections of this prospectus entitled "Risk Factors" and "Cautionary Statement Regarding Forward-Looking Statements." As used in this section, unless the context otherwise requires, "we," "us," "our" and "our company" mean our predecessor for the periods presented and Workspace Property Trust and its consolidated subsidiaries upon consummation of this offering and the formation transactions.

Our Company

        Workspace Property Trust is a fully integrated real estate investment company primarily focused on acquiring, owning and operating high-quality office and flex real estate in prime locations within transit centric, amenity rich U.S. suburban office submarkets. The founding members of our management team, Thomas A. Rizk and Roger W. Thomas, have a proven track record, having led a public suburban office real estate REIT that achieved market-leading total shareholder returns during their joint tenure. We believe the U.S. suburban office market is under-represented in the public REIT space despite offering compelling risk-adjusted returns that are supported by recovering demand, limited new supply and an increasing demographic shift back to the suburbs. We intend to capitalize on this market opportunity by sourcing and executing accretive acquisitions and enhancing the value of our portfolio through proactive asset management. As a first step in executing on our strategy, we have assembled a strong portfolio of 148 properties, totaling 9.9 million rentable square feet, and, as of October 20, 2017, we have identified an acquisition pipeline of high-quality, well-located and attractively-priced suburban office and flex properties totaling more than 25.0 million square feet and with an estimated purchase price of approximately $4.0 billion based on management's estimates of the market price for such square footage.

Our Predecessor

        Workspace Property Trust was formed as a Maryland real estate investment trust to continue the business of our predecessor. Our predecessor includes Workspace Property Trust, L.P., or our operating partnership, and its affiliates, all of which are managed and controlled by the board of managers of RVFP WS GP, LLC, the general partner of Workspace RVFP, L.P., the general partner of our operating partnership, which we refer to as the predecessor general partner. Workspace Property Trust, L.P. was formed on November 18, 2015 and commenced operations on December 3, 2015 when it acquired 40 office and flex properties and one land parcel in the Philadelphia market, which we refer to as our first portfolio, from a third-party seller. On October 3, 2016, Workspace Property Trust, L.P. acquired a

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portfolio of 108 office and flex properties and two land parcels located in the Philadelphia, South Florida, Tampa, Minneapolis and Phoenix markets, which we refer to as our second portfolio, from a third-party seller. In connection with the formation transactions described below, the predecessor general partner will merge with and into Workspace Property Trust, with Workspace Property Trust surviving as the sole general partner of Workspace Property Trust, L.P. Upon completion of the formation transactions, substantially all of our assets will be held by, and substantially all of our operations will be conducted through, our operating partnership, either directly or through its subsidiaries.

Formation Transactions

        Prior to or concurrently with the completion of this offering, our operating partnership and its affiliates will engage in a series of transactions intended to establish our operating and capital structure. We refer to these transactions, which are described below, as our formation transactions.

    Workspace Property Trust was formed as a Maryland real estate investment trust in June 2017. We intend to elect to be treated and to qualify as a REIT for U.S. federal income tax purposes beginning with our taxable year ending December 31, 2017.

    The predecessor general partner will distribute to its limited partners the carried interest in our operating partnership that the predecessor general partner received in December 2015 and October 2016 with respect to the cash capital contributions our operating partnership received at those dates from its existing limited partners in connection with our acquisition of our first portfolio and our second portfolio, respectively.

    The predecessor general partner will be merged with and into Workspace Property Trust, with Workspace Property Trust surviving and succeeding as the general partner of our operating partnership, and the owners of the predecessor general partner will receive common shares in exchange for their interests in the predecessor general partner.

    Entities that own the limited and general partnership interests in Workspace Property Management, L.P., which provides property management services and certain other services to our operating partnership and which we refer to as Workspace Property Management, will contribute to our operating partnership their partnership interests in Workspace Property Management in exchange for common units. Workspace Property Management will be jointly owned by our operating partnership and WPT TRS LLC, a wholly-owned subsidiary owned by our operating partnership that will make an election to be treated as a taxable REIT subsidiary.

    Our operating partnership will redeem the mandatorily redeemable preferred equity our operating partnership issued in connection with our acquisition of our second portfolio in exchange for a combination of cash and common shares.

    The existing partnership interests in our operating partnership (including the carried interest in our operating partnership distributed to the limited partners of our predecessor general partner described in the second bullet above) will be converted into common units in our operating partnership and/or exchange for common shares. The transactions described in the second, third, fourth and fifth bullets above, including the settlement of the carried interest in our operating partnership for common units, may shift the respective percentage ownership interest among the investors in our predecessor prior to the consummation of the formation transactions but will not result in any dilution in the indirect ownership of our operating partnership by investors purchasing common shares in this offering. See "Pricing Sensitivity Analysis."

    The limited partnership agreement of our operating partnership will be amended and restated.

        We will sell 39,000,000 common shares (or 44,850,000 common shares if the underwriters exercise their over-allotment option in full) in this offering and contribute the net proceeds of this offering, other than the net proceeds from the sale of additional common shares pursuant to the underwriters'

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exercise of their over-allotment option, if any, we will use to acquire common units described below, to our operating partnership in exchange for common units. We expect our operating partnership to use a portion of the net proceeds received from us to:

    repay approximately $215.7 million in outstanding indebtedness under our existing loan agreement with KeyBank National Association, which we refer to as the KeyBank Loan Agreement;

    repay approximately $163.2 million of outstanding indebtedness under a senior mortgage loan and three mezzanine loans we entered into in connection with our acquisition of our second portfolio; and

    pay approximately $63.6 million in cash in connection with the redemption of the mandatorily redeemable preferred equity our operating partnership issued in connection with our acquisition of our second portfolio. See "Structure and Formation of our Company—Formation Transactions—Redemption of Mandatorily Redeemable Preferred Equity."

        We expect our operating partnership to use any remaining net proceeds received from us for general corporate purposes, including capital expenditures and potential future acquisition opportunities.

        To the extent the underwriters exercise their over-allotment option, we will use up to $50.0 million of proceeds (before underwriting discounts) from the sale of additional common shares to acquire up to 3,703,704 common units (based on the midpoint of the price range set forth on the front cover of this prospectus) from SSOP LP. See "Certain Relationships and Related Transactions—Repurchase of Common Units." We will contribute any remaining net proceeds from the sale of such additional common shares to our operating partnership in exchange for common units. We expect our operating partnership to use any such net proceeds received from us for general corporate purposes, including capital expenditures and potential future acquisition opportunities.

        Upon completion of this offering and the formation transactions we will own approximately 60.0% of limited partnership interests in our operating partnership (or 65.8% of the interests if the underwriters exercise their over-allotment option in full), in each case, based on the midpoint of the price range on the front cover of this prospectus. We expect to have total consolidated indebtedness of approximately $652.8 million. In addition, upon or shortly after the completion of this offering and the formation transactions, we expect to enter into our new unsecured credit facilities for which we have obtained commitments totaling, and which will allow for borrowings of up to, $1.15 billion. We expect to close our new revolving credit facility (allowing for borrowings of up to $500.0 million) concurrently with the consummation of this offering and the formation transactions, and we intend to close on our two new delayed draw term loan facilities (allowing for borrowings of up to $650.0 million in the aggregate) shortly after the consummation of this offering and the formation transactions. No assurance can be given that we will close on our two new term loan facilities based on this proposed timing or at all.

Factors that May Impact Our Operating Results

Rental Revenue

        We derive revenues primarily from rents, expense reimbursements and other income received from tenants under existing leases at each of our properties. "Tenant reimbursements" consist of payments made by tenants to us under contractual lease obligations to reimburse a portion of the property operating expenses and real estate taxes incurred at each property. The amount of net rental revenue and reimbursements that we receive depends principally on our ability to lease available space, re-lease space to new tenants upon the scheduled or unscheduled termination of leases, renew expiring leases and to maintain or increase our rental rates. Factors that could affect our rental revenue in the future include, but are not limited to: local, regional or national economic conditions; an oversupply of, or a

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reduction in demand for, suburban office and/or flex space; changes in market rental rates; our ability to provide adequate services and maintenance at our properties; and fluctuations in interest rates could adversely affect our rental revenue in future periods. Future economic or regional downturns affecting our submarkets or downturns in our tenants' industries could impair our ability to lease vacant space and renew or re-lease space as well as the ability of our tenants to fulfill their lease commitments, and could adversely affect our ability to maintain or increase the occupancy at our properties.

Leasing

        Due to the relatively small number of leases that are signed in any particular quarter or year, one or more larger leases may have a disproportionately positive or negative impact on average base rent, tenant improvement and leasing commission costs for that period/year. As a result, we believe it is more appropriate when analyzing trends in average base rent and tenant improvement and leasing commission costs to review activity over multiple quarters or years. In addition to tenant improvement costs, we sometimes incur expenditures for general improvements occurring concurrently with, but that are not directly related to, the cost of installing a new tenant. Leasing commission costs are similarly subject to significant fluctuations depending upon the rentable square footage of the lease, the lease term, and the rate.

        As of June 30, 2017, our portfolio was 90.5% leased (or 90.3% leased after giving effect to leases signed but not commenced as of October 20, 2017). See "Business and Properties—Our Portfolio." During the six months ended June 30, 2017, we signed 819,727 rentable square feet of new leases and lease renewals.

Tenant Credit Risk

        The economic condition of our tenants may deteriorate, which could negatively impact their ability to fulfill their lease commitments and in turn adversely affect our ability to maintain or increase the occupancy level and/or rental rates of our properties. Existing and/or potential tenants also may shift to a more cautionary mode with respect to leasing and look to consolidate space, reduce overhead and preserve operating capital, while others may defer strategic decisions, including entering into new, long-term leases at properties.

        We consistently monitor the credit quality of our portfolio by seeking to lease space to creditworthy tenants that meet our underwriting and operating guidelines and we actively monitor tenant creditworthiness following the initiation of a lease. When we assess tenant credit quality, we (i) review relevant financial information, including financial ratios, net worth, revenue, cash flows, leverage and liquidity; (ii) evaluate the depth and experience of the tenant's management team; and (iii) assess the strength/growth of the tenant's industry. This evaluation assists us in determining whether to lease to such potential tenant and, if so, the initial tenant security deposit. On an on-going basis, we evaluate the need for an allowance for doubtful accounts arising from estimated losses that could result from the tenant's inability to make required current rent payments and an allowance against accrued rental income for future potential losses that we deem to be unrecoverable over the term of the lease. The factors considered in determining the credit risk of our tenants include, but are not limited to: payment history; credit status and change in status (credit ratings for public companies are used as a primary metric); change in tenant space needs (i.e., expansion/downsize); tenant financial performance; economic conditions in a specific geographic region; and industry specific credit considerations. We believe the credit risk of our portfolio is mitigated by the high quality of our existing tenant base, reviews of prospective tenants' risk profiles prior to lease execution and consistent monitoring of our portfolio to identify and address potential problem tenants.

Market Conditions

        The properties in our portfolio are located in nine submarkets, which we operate as five geographic segments. Positive or negative changes in conditions in these submarkets such as business

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hiring, layoffs or downsizing, industry growth or slowdowns, relocations of businesses, increases or decreases in real estate and other taxes, costs of complying with governmental regulations or changed regulation, can impact our overall performance.

Our Leases

        We generally lease our properties to tenants pursuant to long-term, triple-net leases that require the tenant to pay their proportionate share of substantially all property operating expenses, such as real estate taxes, utilities, insurance premiums and repair and maintenance costs. As of June 30, 2017, approximately 91.1% of our annualized rent was generated from triple-net leases. We also lease our properties to tenants pursuant to triple-net leases that cap the amount by which certain operating expenses may grow on a per annum basis and be reimbursed by the tenant. As of June 30, 2017, approximately 7.4% of our annualized rent was generated from triple-net leases with this cap structure. Although less frequently, we also lease our properties pursuant to modified gross leases. A modified gross lease is one in which a tenant pays base rent at the lease's inception but, in subsequent years, pays the base plus a proportional share of some of the operating costs associated with the property, such as property taxes, utilities, insurance premiums and repair and maintenance costs, to the extent that a tenant's pro rata share of expenses exceeds a base year level set forth in the lease. Approximately 1.1% and 0.4% of our annualized rent was generated from modified gross and gross leases, respectively. Occasionally, we have entered into a lease pursuant to which we retain responsibility for the costs of structural repairs and maintenance. Although these instances are infrequent and have not resulted in significant costs to us to date, an increase in costs related to these responsibilities could negatively influence our operating results. Similarly, an increase in the vacancy rate of our portfolio would increase our costs, as we would be responsible for costs that our existing tenants are currently required to pay.

Operating Expenses

        Operating expenses generally consist of repairs and maintenance, insurance, real estate taxes, security, utilities, property-related payroll and provision for doubtful accounts. Factors that may affect our ability to control these operating costs include: increases in insurance premiums, changes in tax rates, the cost of periodic repair, renovation costs and the cost of re-leasing space, the cost of compliance with governmental regulation, including zoning and tax laws, and the potential for liability under applicable laws. As noted above, we generally lease our properties to tenants pursuant to long-term, triple-net leases that require the tenant to pay all property operating expenses. Recoveries from tenants are recognized as revenue on an accrual basis over the periods in which the related expenditures are incurred. Tenant reimbursements and operating expenses are recognized on a gross basis because we (i) are generally the primary obligor with respect to the goods and services, the purchase of which, gives rise to the reimbursement obligation, (ii) have discretion in selecting the vendors and suppliers and (iii) bear the credit risk in the event the tenants do not reimburse us.

        The expenses of owning and operating a property are not necessarily reduced when circumstances, such as market factors and competition, cause a reduction in income from the property. If revenues drop, we may not be able to reduce our expenses accordingly. Costs associated with real estate investments, such as real estate taxes and maintenance, generally will not be materially reduced even if a property is not fully occupied or other circumstances cause our revenues to decrease. As a result, if revenues decrease in the future, static operating costs may adversely affect our future cash flow and results of operations. If similar economic conditions exist in the future, we may experience future losses.

        As a public company our annual general and administrative expenses are anticipated to be meaningfully higher than those incurred since our inception due to, among other costs, board of trustees' fees and expenses, trustees and officers insurance, legal compliance cost, SEC reporting costs,

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incremental audit and tax fees and other cost of operating a public company. Increases in costs from any of the foregoing factors may adversely affect our future results and cash flows.

Cost of funds and interest rates

        We expect future changes in interest rates will impact our overall performance. In order to limit interest rate risk, we have historically entered into interest rate cap agreements or similar instruments and, subject to maintaining our qualification as a REIT for U.S. federal income tax purposes, expect to do so in the future. Although we may seek to cost-effectively manage our exposure to future rate increases through such means, a portion of our overall debt may at various times float at then current rates. Such floating rate debt may increase to the extent we use available borrowing capacity to fund capital improvements or otherwise manage liquidity. Upon completion of this offering and the formation transactions, we will have $652.8 million of floating rate debt.

Competition

        The leasing of suburban office and flex space is highly competitive in our submarkets, with many competitors who own or may seek to acquire or develop properties similar to ours in the same submarkets in which our properties are located. The principal means of competition are rent charged, tenant improvement allowances granted, free rent periods granted, location, services provided, and the nature and condition of the facility to be leased. In addition, we face competition from other real estate companies, including other REITs, private real estate funds, domestic and foreign financial institutions, life insurance companies, pension trusts, partnerships, individual investors, and others that may have greater financial resources or access to capital than we do or that are willing to acquire properties in transactions that are more highly leveraged or are less attractive from a financial viewpoint than we are willing to pursue. If our competitors offer space at rental rates below current market rates, below the rental rates we currently charge or are willing to accept from our tenants, in better locations within our submarkets or in higher quality facilities, we may lose potential tenants and we may be pressured to reduce our rental rates below those we currently charge in order to retain tenants when our tenants' leases expire.

Lease Expirations

        Our ability to re-lease space subject to expiring leases will impact our results of operations and is affected by economic and competitive conditions in our markets as well as the desirability of our individual properties. As of June 30, 2017, in addition to approximately 944,704 rentable square feet of currently available space in our office and flex buildings, leases (other than month-to-month leases) representing 439,119, or 4.4% of our total rentable square feet and 5.2% of our total annualized rent, were scheduled to expire during the six months ending December 31, 2017 and approximately 2.0 million, or 20.5% of our total rentable square feet and 23.2% of our total annualized rent, were scheduled to expire during the twelve months ending December 31, 2018. As of October 20, 2017, we had renewed 193,560, or 44.1%, of our total rentable square feet that was scheduled to expire during the six months ending December 31, 2017 and 383,329, or 18.8%, of our total rentable square feet that was scheduled to expire during the twelve months ending December 31, 2018.

        We expect to renew leases scheduled to expire during the six months ending December 31, 2017 and the twelve months ending December 31, 2018 consistent with our historical renewal rate. We calculate our "renewal rate" as the total square footage under renewal and expansion leases (without giving effect to incremental square footage under expansion leases or new leases) executed during the applicable period divided by the total square footage under renewable leases scheduled to expire during such period. We define "renewable leases" as all leases scheduled to expire during the applicable period, excluding terminated/defaulted leases, short-term/swing space leases and leases associated with

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known vacates at the time of acquisition. The following table sets forth certain historical information regarding our renewals rates during the periods set forth below.

 
  Period from
December 3,
2015 to
December 31,
2015
  Year Ended
December 31,
2016
  Six Months
Ended
June 30,
2017
  Total
December 3,
2015 to
June 30,
2017
 

Total scheduled lease expirations (RSF)

    5,454     532,728     877,882     1,416,064  

Terminated/defaulted leases (RSF)

        18,736     11,258     29,994  

Short-term/swing space leases (RSF)

        52,550     40,880     93,430  

Known vacates (RSF)

        165,162     23,381     188,543  

Renewable leases (RSF)

    5,454     296,280     802,363     1,104,097  

Lease renewals (RSF)(1)

    4,244     254,480     532,424     791,148  

Renewal rate

    77.8 %   85.9 %   66.4 %   71.7 %

(1)
Reflects lease renewals only. However, we leased 70,660, 76,972 and 1,942 square feet of incremental space under lease expansions and 216,643, 168,246 and 6,463 square feet under new leases for the six months ended June 30, 2017, the year ended December 31, 2016 and the period from December 3, 2015 through December 31, 2015, respectively.

        As of October 20, 2017, for leases representing 150,382 of our total rentable square feet and 1.8% of our total annualized rent scheduled to expire during the six months ending December 31, 2017, we believe based on estimates of our dedicated in-house leasing teams that the weighted average cash rental rates in the aggregate are approximately 9-12% below current average market rental rates. In addition, as of October 20, 2017, for leases representing 1.4 million rentable square feet and 16.7% of the total annualized rent scheduled to expire during the twelve months ending December 31, 2018, we believe based on estimates of our dedicated in-house leasing teams that the weighted average cash rental rates in the aggregate are approximately 6-8% below current average market rental rates. See "Business and Properties—Lease Expirations."

Critical Accounting Policies

        Our discussion and analysis of the historical financial condition and results of operations of our predecessor are based upon its combined consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements in conformity with GAAP requires management to make estimates and assumptions in certain circumstances that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses in the reporting period. Actual amounts may differ from these estimates and assumptions. We have provided a summary of the significant accounting policies in the notes to the combined consolidated financial statements of our predecessor included elsewhere in this prospectus. We have summarized below those accounting policies that require material subjective or complex judgments and that have the most significant impact on our financial conditions and results of operations. We evaluate these estimates on an ongoing basis, based upon information currently available and on various assumptions that we believe are reasonable as of the date hereof. Other companies in similar businesses may use different estimation policies and methodologies, which may impact the comparability of our results of operations and financial conditions to those of other companies.

Principles of Consolidation and Combined Financial Statements

        The combined consolidated financial statements include the accounts of Workspace Property Trust, L.P. and its affiliates, all of which are managed and controlled by the board of managers of RVFP WS GP, LLC, the general partner of the predecessor general partner. Therefore, we have

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prepared the financial statements on a combined basis due to common management. All significant intercompany transactions and balances are eliminated in combination.

Real Estate and Depreciation

        Real estate properties are carried at cost less accumulated depreciation and impairment losses, if any. The cost of real estate properties reflects their purchase price or development cost. We evaluate each acquisition transaction to determine whether the acquired assets meet the definition of business. Under ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, as discussed below and which our predecessor early adopted on December 3, 2015, an acquisition does not qualify as a business when substantially all of the fair value is concentrated in a single identifiable asset or group of similar identifiable assets or the acquisition does not include a substantive process in the form of an acquired workforce or an acquired contract that cannot be replaced without significant cost, effort or delay. Transaction costs related to acquisitions that are asset acquisitions are capitalized as part of the cost basis of the acquired assets, while transaction costs for acquisitions that are deemed to be acquisitions of a business are expensed as incurred and included in transaction costs in the combined consolidated statements of operations and comprehensive income (loss). Ordinary repairs and maintenance are expensed as incurred. Major replacements and betterments, which improve or extend the life of the asset, are capitalized and depreciated over their estimated useful lives.

        We allocate the purchase price of real estate in a transaction accounted for as an asset acquisition to net tangible and identified intangible assets acquired based on their relative fair values. Above-market and below-market in-place lease values for acquired properties are recorded based on the net present value (using a discount rate which reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) our estimate of the fair market lease rates for the corresponding in-place leases (including ground lease obligations), measured over a period equal to the remaining non-cancelable term of the lease (including the below market fixed-rate renewal period, if applicable). Capitalized above-market lease values are amortized on a straight-line basis as a reduction of rental income over the remaining non-cancelable terms of the respective leases, which generally range from less than one year to ten years. Capitalized below-market lease values are amortized on a straight-line basis as an increase to rental income over the remaining non-cancelable terms of the respective leases including any below market fixed-rate renewal periods that are considered probable, which generally range from less than one year to fifteen years. Other intangible assets also include in-place leases based on our evaluation of the specific characteristics of each tenant's lease. We estimate the cost to execute leases with terms similar to the remaining lease terms of the in-place leases, including leasing commissions, legal, and other related expenses. This intangible asset is amortized to depreciation and amortization expense on a straight-line basis over the remaining term of the respective leases and any fixed-rate bargain renewal periods, which generally range from less than one year to fifteen years. Our estimate of fair value is made using methods similar to those used by independent appraisers or by using independent appraisals. Factors we consider in this analysis include an estimate of the carrying costs during the expected lease-up periods considering current market conditions and costs to execute similar leases. In estimating carrying costs, we include real estate taxes, insurance and other operating expenses, and estimates of lost rentals at market rates during the expected lease-up periods, which primarily range from six to nine months. We also consider information obtained about each property as a result of its pre-acquisition due diligence, marketing, and leasing activities in estimating the fair value of the tangible and intangible assets acquired. We also use the information obtained as a result of our pre-acquisition due diligence as part of our consideration of the accounting standard governing asset retirement obligations and when necessary, will record a conditional asset retirement obligation as part of the purchase price. Though we consider the value of tenant relationships, the amounts are determined on a tenant-specific basis, if applicable. In the event that a tenant terminates its lease, the

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unamortized portion of each intangible, including in-place lease values and tenant relationship values, is charged to expense and above- and below-market lease adjustments are recorded in rental revenue.

        We may incur various costs in the development and leasing of our properties. The costs directly related to properties under development which include preconstruction costs essential to the development of the property, development costs, construction costs, interest costs, real estate taxes, salaries, and related costs incurred during the period of development are capitalized during the period of development. After the determination is made to capitalize a cost, it is allocated to the specific component of a project that is benefited. Determination of when a development project commences and capitalization begins, and when a development project is substantially complete and held available for occupancy and capitalization must cease, involves a degree of judgment.

        Depreciation is computed using the straight-line method. The estimated useful lives of buildings are 40 years. Minor improvements to buildings are capitalized and depreciated over useful lives ranging from three to 15 years. Tenant improvements are capitalized and depreciated over the non-cancellable term of the related lease or their estimated useful life, whichever is shorter.

        We evaluate our real estate investments upon occurrence of a significant adverse change in our operations to assess whether any impairment indicators are present that affect the recovery of the recorded value. If indicators of impairment are identified, we estimate the future undiscounted cash flows from the use and eventual disposition of the property and compares this amount to the carrying value of the property. If any real estate investment is considered impaired, a loss is recognized to reduce the carrying value of the property to its estimated fair value. We do not believe that the value of any of our properties and intangible assets were impaired at June 30, 2017.

Allowance for Doubtful Accounts

        We continually review accounts receivable and deferred rent receivable balances and determine collectability by taking into consideration the tenant payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates, and the economic conditions in the area in which the property is located. In the event that the collectability of a receivable is in doubt, the accounts receivable and deferred rent receivable balances are reduced by an allowance for doubtful accounts. Provision for doubtful accounts is included in operating expenses in our predecessor's combined consolidated statements of operations and comprehensive income (loss). If the accounts receivable balance or the deferred rent receivable balance is subsequently deemed uncollectible, such receivable amounts are written-off to the allowance for doubtful accounts.

Revenue Recognition

        Rental income is recognized on the straight-line basis, over the non-cancellable terms of the leases from the later of the date of the commencement of the lease or the date of acquisition of the property subject to certain leases. Rental revenue recognition begins when the tenant controls the space through the term of the related lease. We take into account whether the collectability of rents is reasonably assured in determining the amount of straight-line rent to record. For the purpose of determining the straight-line period, the straight-line calculation will take into consideration bargain renewal options, leases where the renewal appears reasonably assured and any guarantees by the lessee. Leases with contingent rentals are not straight-lined. For certain leases, we make significant assumptions and judgments in determining the lease term, including assumptions when the lease provides the tenant with an early termination option. The lease term impacts the period over which we determine and record minimum rents and also impacts the period over which we amortize lease-related costs. We recognize the excess of rents recognized over the amounts contractually due pursuant to the underlying leases as part of deferred rent receivable on the combined consolidated balance sheets. Any rental payments received prior to their due dates are reported in deferred revenue in our combined consolidated balance sheets.

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        Our leases also typically provide for tenant reimbursement of a pro rata share of common area maintenance expenses and other operating expenses to the extent that the tenant has a triple-net lease or to the extent that a tenant's pro rata share of expenses exceeds a base year level set in the lease when the tenant has a modified gross lease.

        Recoveries from tenants, consisting of amounts due from tenants for common area maintenance expenses, real estate taxes and other recoverable costs are recognized as revenue on an accrual basis over the periods in which the related expenditures are incurred.

        Tenant reimbursements are recognized on a gross basis because we are generally the primary obligor with respect to the goods and services, the purchase of which, gives rise to the reimbursement obligation, we have discretion in selecting the vendors and suppliers and we bear the credit risk in the event the tenants do not reimburse us.

        Termination fees, which are included in other revenue in our combined consolidated statements of operations and comprehensive income (loss), are fees that we have agreed to accept in consideration for permitting certain tenants to terminate their lease prior to the contractual expiration date. We recognize termination fees during the period the following conditions are met: the termination agreement is executed, the termination fee is determinable and collectability of the termination fee is assured.

Derivative Instruments and Hedging Activities

        We are exposed to certain risks arising from both our business operations and economic conditions. We principally manage our exposures to a wide variety of business and operational risks through management of our core business activities. We manage economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of our debt funding and the use of derivative financial instruments. Specifically, we enter into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. Our derivative financial instruments are used to manage differences in the amount, timing, and duration of our known or expected cash receipts and its known or expected cash payments principally related to our investments and borrowings.

        Our borrowings bear interest at variable rates. Our objective is to limit or manage our interest rate risk. To accomplish this objective, we primarily use interest rate caps as part of our interest rate risk management strategy. Interest rate caps involve the receipt of variable-rate amounts from a counterparty if interest rates rise above the strike rate on the contract in exchange for an up-front premium.

        We record all derivatives at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether we have elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. We may enter into derivative contracts that are intended to economically hedge certain of our risks, even though hedge accounting does not apply or we elect not to apply hedge accounting.

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        For cash flow hedges, we account for the effective portion of the changes in fair value of derivatives in accumulated other comprehensive income in the combined consolidated balance sheets, which is subsequently reclassified into earnings in the period that the hedged transaction affects earnings. We account for the ineffective portion of the changes in fair value of derivatives directly in earnings. For fair value hedges and derivatives not designated as hedging instruments, the gain or loss, resulting from the change in the estimated fair value of the derivatives, is recognized in earnings, as part of unrealized loss on derivative instruments in the combined consolidated statements of operations and comprehensive income (loss), during the period of change.

Results of Operations—Our Predecessor

Overview

        Our portfolio is comprised of our first portfolio, which was acquired on December 3, 2015, and our second portfolio, which was acquired on October 3, 2016. Accordingly, our predecessor's historical results of operations for the period presented below differ significantly when compared to the historical prior period information as a result of these acquisitions.

Comparison of the Six Months Ended June 30, 2017 to the Six Months Ended June 30, 2016

        The following table summarizes the combined consolidated historical results of operations of our predecessor for the six months ended June 30, 2017 and 2016. As noted above, our future financial condition and results of operations will differ significantly from, and will not be comparable to the historical financial position and results of operations of our predecessor.

 
  Six Months Ended
June 30,
   
 
 
  2017   2016   Change  
 
  (in thousands)
 

Revenues:

                   

Rental revenue

    $59,447   $ 14,878     $44,569  

Tenant reimbursements

    33,234     8,458     24,776  

Other revenue

    662     77     585  

Total revenues

    93,343     23,413     69,930  

Expenses:

                   

Operating expenses

    22,082     5,640     16,442  

Real estate taxes

    11,731     2,528     9,203  

Depreciation and amortization

    46,393     10,381     36,012  

General and administrative

    7,269     1,293     5,976  

Total expenses

    87,475     19,842     67,633  

Operating income

    5,868     3,571     2,297  

Other income (expenses):

                   

Interest expense

    (45,073 )   (6,597 )   (38,476 )

Unrealized gain (loss) on derivative instruments

    96     (845 )   941  

Net loss

  $ (39,109 ) $ (3,871 ) $ (35,238 )

Rental Revenue

        Rental revenue increased by $44.5 million to $59.4 million for the six months ended June 30, 2017 compared to $14.9 million for the six months ended June 30, 2016 primarily as a result of the acquisition of our second portfolio, which contributed $46.5 million of rental revenue during the six months ended June 30, 2017, partially offset by a reduction in rental revenue attributable to increased vacancies in our first portfolio. Occupancy in our first portfolio, excluding the three properties that were underwritten to be vacant at acquisition but the tenants remained in occupancy through

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December 2016, was 80.0% as of June 30, 2017 compared to 82.1% at June 30, 2016. Rental revenue recognized for the excluded properties was $1.5 million for the six months ended June 30, 2016. Occupancy in our second portfolio was 91.3% as of June 30, 2017.

Tenant Reimbursements

        Tenant reimbursements increased by $24.8 million to $33.2 million for the six months ended June 30, 2017 compared to $8.5 million for the six months ended June 30, 2016 primarily as a result of the acquisition of our second portfolio, which contributed $25.1 million of the tenant reimbursements during the six months ended June 30, 2017, partially offset by a decrease in tenant reimbursements of $0.7 million primarily related to the properties that we purchased assuming their rentable square footage would be vacant, as discussed above.

Other Revenue

        Other revenue, which includes parking fees, late fees, lease termination income, administrative fees and other miscellaneous income, increased by $0.6 million to $0.7 million for the six months ended June 30, 2017 compared to $0.1 million for the six months ended June 30, 2016. This was primarily as a result of the acquisition of our second portfolio, which contributed $0.5 million of the other income during the six months ended June 30, 2017.

Operating Expenses

        Operating expenses increased by $16.4 million to $22.1 million for the six months ended June 30, 2017 compared to $5.6 million for the six months ended June 30, 2016 as a result of the acquisition of our second portfolio, which contributed $14.4 million of operating expenses, and property-level payroll costs primarily for personnel hired to manage our second portfolio of $1.3 million during the six months ended June 30, 2017.

Real Estate Taxes

        Real estate taxes increased by $9.2 million to $11.7 million for the six months ended June 30, 2017 compared to $2.5 million for the six months ended June 30, 2016 as a result of the acquisition of our second portfolio, which contributed $9.1 million of real estate taxes during the six months ended June 30, 2017.

Depreciation and Amortization

        Depreciation and amortization increased by $36.0 million to $46.4 million for the six months ended June 30, 2017 compared to $10.4 million for the six months ended June 30, 2016 primarily as a result of the acquisition of our second portfolio, which contributed to an increase in depreciation and amortization expense of $38.8 million, partially offset by a reduction in depreciation and amortization of tenant improvements and in-place lease intangibles for our first portfolio relating to tenants that either vacated the property as of, or were subject to leases that were renewed prior to, December 31, 2016, at which time the related in-place lease intangibles and tenant improvements were fully amortized.

General and Administrative

        General and administrative expenses increased by $6.0 million to $7.3 million for the six months ended June 30, 2017 compared to $1.3 million for the six months ended June 30, 2016 primarily as a result of non-capitalizable transaction costs of $3.5 million incurred in connection with our proposed initial public offering and an increase in payroll costs of $1.2 million primarily attributable to the hiring of additional corporate employees to manage our second portfolio. General and administrative expenses also include consulting, marketing, audit and legal fees and other general and administrative costs, which contributed to the $1.3 million remaining increase.

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Interest Expense

        Interest expense increased by $38.5 million to $45.1 million for the six months ended June 30, 2017 compared to $6.6 million for the six months ended June 30, 2016 primarily due to debt and mandatorily redeemable preferred equity (which is accounted for as debt) financing obtained in October 2016 in connection with the acquisition of our second portfolio, which contributed additional interest expense, including amortization of deferred financing costs, of $28.4 million and $8.8 million, respectively. Additionally, interest expense on our first portfolio also increased by $1.1 million primarily as a result of the increase in LIBOR rate and amortization of additional deferred financing costs incurred in connection with the modifications of the mezzanine A and B loans. For more information on our mandatorily redeemable preferred equity, see Note 5 to our predecessor's combined consolidated financial statements as of and for the six months ended June 30, 2017 included elsewhere in this prospectus. The weighted average consolidated debt balance outstanding increased by $920.4 million to $1.1 billion for the six months ended June 30, 2017 compared to $209.8 million for the six months ended June 30, 2016. The weighted average interest rate increased by 1.62% to 6.83% for the six months ended June 30, 2017 compared to 5.21% for the six months ended June 30, 2016.

Unrealized Gain (Loss) on Derivative Instruments

        The unrealized gain (loss) on interest rate caps primarily relates to the reduction of the term of the interest rate caps coupled with market volatility during the six months ended June 30, 2017.

Comparison of the Year Ended December 31, 2016 to the Year Ended December 31, 2015

        The following table summarizes the combined consolidated historical results of operations of our predecessor for the years ended December 31, 2016 and December 31, 2015. As noted above, our future financial condition and results of operations will differ significantly from, and will not be comparable to the historical financial position and results of operations of our predecessor.

 
   
   
   
  Prior
Ownership
   
 
 
   
   
   
   
 
 
  Workspace Ownership    
   
 
 
   
   
   
 
 
  Year
Ended
December 31,
2016
  December 3,
2015 -
December 31,
2015
   
  January 1,
2015 -
December 2,
2015
   
 
 
   
   
 
 
   
  Change(1)  
 
   
 
 
  (in thousands)
   
 
 
   
   
   
   
   
 

Revenues:

                             

Rental revenue

  $51,467   $2,319       $ 23,083   $26,065  

Tenant reimbursements

    27,338     1,139         15,521     10,678  

Other revenue

    3,952     10         115     3,827  

Total revenues

    82,757     3,468         38,719     40,570  

Expenses:

                             

Operating expenses

    17,531     773         9,564     7,194  

Real estate taxes

    9,611     399         4,747     4,465