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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Franklin Street Properties Corp | AMEX:FSP | AMEX | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.01 | 0.58% | 1.72 | 1.75 | 1.695 | 1.75 | 353,884 | 23:20:12 |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 28, 2015
Franklin Street Properties Corp. |
(Exact name of registrant as specified in its charter) |
Maryland | 001-32470 | 04-3578653 |
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
401 Edgewater Place, Suite 200, Wakefield, Massachusetts | 01880 |
(Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: (781) 557-1300
(Former name or former address, if changed since last report.) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02. Results of Operations and Financial Condition.
On April 28, 2015, Franklin Street Properties Corp. (the “Registrant”) announced its financial results for the three months ended March 31, 2015. The full text of the press release issued in connection with the announcement is furnished as Exhibit 99.1 to this Current Report on Form 8-K. The press release references certain supplemental operating and financial data that is now available on the Registrant’s website. A copy of the supplemental operating and financial data is attached hereto as Exhibit 99.2 and is incorporated by reference herein.
The information in this Form 8-K (including Exhibits 99.1 and 99.2) shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act") or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such a filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
See Exhibit Index attached hereto.
2 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
FRANKLIN STREET PROPERTIES CORP. | |||
Date: April 28, 2015 | By: /s/ George J. Carter | ||
George J. Carter President and Chief Executive Officer |
|||
3 |
EXHIBIT INDEX
Exhibit No. | Description |
99.1 | Press Release issued by Franklin Street Properties Corp. on April 28, 2015. |
99.2 | Supplemental Operating and Financial Data for the three months ended March 31, 2015. |
4 |
Exhibit 99.1
PRESS RELEASE | Franklin Street Properties Corp. | |
401 Edgewater Place · Suite 200 · Wakefield, Massachusetts 01880 · (781) 557-1300 · www.franklinstreetproperties.com | ||
Contact: John Demeritt (877) 686-9496 | For Immediate Release | |
Franklin Street Properties Corp. Announces
First Quarter 2015 Results
Wakefield, MA—April 28, 2015—Franklin Street Properties Corp. (the “Company”, “FSP”, “we” or “our”) (NYSE MKT: FSP), a real estate investment trust (REIT), announced today Funds From Operations (FFO) of $25.7 million or $0.26 per share for the first quarter ended March 31, 2015; and net income was $12.5 million or $0.13 per share for the first quarter ended March 31, 2015.
The Company evaluates its performance based on FFO, Net Income and EPS and believes each is an important measure. A reconciliation of Net Income to FFO, which is a non-GAAP financial measure, is provided on page 3 of this press release.
Three Months Ended March 31, | ||||||||||||
(in 000's except per share data) | 2015 | 2014 | Increase (Decrease) | |||||||||
Net Income | $ | 12,533 | $ | 3,573 | $ | 8,960 | ||||||
FFO | $ | 25,672 | $ | 28,779 | $ | (3,107 | ) | |||||
Per Share Data: | ||||||||||||
EPS | $ | 0.13 | $ | 0.04 | $ | 0.09 | ||||||
FFO | $ | 0.26 | $ | 0.29 | $ | (0.03 | ) | |||||
Weighted average shares (diluted) | 100,187 | 100,187 | — |
Comparing results for the first quarter of 2015 to the same period in 2014, FFO decreased $3.1 million or $0.03 per share to $25.7 million or $0.26 per share in 2015. The FFO decrease was primarily from lower property income as a result of asset sales and loan repayments achieved in the last twelve months and from lower occupancy, which were partially offset by lower interest expense for the quarter as we used proceeds to repay debt. Interest expense was also lower as a result of lower spreads on our revolving line of credit that was amended on October 29, 2014. We achieved a $10.5 million gain on the sale of two properties in the first quarter of 2015. Net Income and EPS was $12.5 million or $0.13 per share for the first quarter of 2015 compared to a net income of $3.6 million or $0.04 per share for the first quarter of 2014.
George J. Carter, President and CEO, commented as follows:
“For the first quarter of 2015, FSP’s profits as represented by FFO totaled approximately $25.7 million or $0.26 per share. Our directly owned real estate portfolio of 36 properties totaling approximately 9.3 million square feet was 90.4% leased as of March 31, 2015. We are maintaining our full-year 2015 FFO guidance range of $1.03 to $1.08 per share.
During the first quarter of 2015 we completed the disposition of a property known as Willow Bend located in Plano, Texas for approximately $20.8 million, and a property known as Eden Bluff located in Eden Prairie, Minnesota for approximately $28.0 million. A total gain of $10.5 million was realized as a result of the sale of these properties. Willow Bend is a two-story suburban office property with approximately 117,050 square feet and is a suburban office property that had been owned by FSP or an FSP affiliate for over fifteen years. Eden Bluff is a one-story, flex, single-tenant, suburban office property with approximately 153,028 square feet that was owned by FSP for approximately five and one-half years. In December 2014, we also sold a property known as Centennial located in Colorado Springs, Colorado for approximately $15.5 million. The sale proceeds from these dispositions were not re-invested during the first quarter of 2015.
-2- |
However, on April 8, 2015, we completed the acquisition of a property known as Two Ravinia in the greater Atlanta, Georgia market for $78 million, effectively fully re-investing proceeds from the Centennial, Willow Bend, and Eden Bluff dispositions.
Two Ravinia is a 17-story class “A” multi-tenant office tower with approximately 442,130 rentable square feet that is located in the Central Perimeter Submarket of Atlanta, Georgia. The newly acquired property is directly adjacent to our existing 386,603 square foot office tower known as One Ravinia, which we have owned since July of 2012. Two Ravinia is currently 80.5% leased, with in place rents that we believe average approximately 25% below today’s current market asking rates. We anticipate planned building capital investments at Two Ravinia (excluding leasing costs) of approximately $4.8 million over the next three to four years.
We continue to actively pursue further potential dispositions of other suburban office assets that we believe are no longer core to our long-term strategy of acquiring larger, multi-tenant, urban infill, CBD or town-center office properties. We believe selective acquisitions of this profile will provide shareholders with better risk/reward adjusted returns over an extended slow growth period in the U.S. business cycle. Potential target acquisition opportunities are primarily being pursued in our five core markets of Atlanta, Dallas, Denver, Houston and Minneapolis. Along with our existing property portfolio’s ongoing leasing activity, we believe the results, size, timing and execution of our current capital recycling efforts will meaningfully affect value-creation and results for full year 2015 and beyond.
We remain very positive about our prospects and opportunities.”
Dividend Update
On April 10, 2015, the Company announced that its Board of Directors declared a regular quarterly dividend for the three months ended March 31, 2015 of $0.19 per share of common stock that will be paid on May 14, 2015 to stockholders of record on April 24, 2015.
FFO Guidance
Our full year FFO guidance for 2015 continues to be maintained in the range of $1.03 to $1.08 per diluted share. This guidance (a) excludes the impact of future acquisitions, dispositions, debt financings or repayments or other capital market transactions; (b) reflects estimates from our ongoing portfolio of properties, other real estate investments and G&A expenses; and (c) reflects our current expectations of economic conditions. We will update guidance quarterly in our earnings releases. There can be no assurance that the Company’s actual results will not differ materially from the estimates set forth above.
Real Estate Update
Supplementary schedules provide property information for the Company’s owned real estate portfolio and for two non-consolidated REITs in which the Company holds preferred stock interests as of March 31, 2015. The Company will also be filing an updated supplemental information package that will provide stockholders and the financial community with additional operating and financial data. The Company will file this supplemental information package with the SEC and make it available on its website at www.franklinstreetproperties.com.
-3- |
Funds From Operations (FFO)
A reconciliation of Net Income to FFO is shown below and a definition of FFO is provided on Supplementary Schedule H. Management believes FFO is used broadly throughout the real estate investment trust (REIT) industry as a measurement of performance. Management also believes that FFO represents the most accurate measure of activity and is the basis for distributions paid to equity holders. The Company has included the NAREIT FFO definition in the table and notes that other REITs may not define FFO in accordance with the current NAREIT definition or may interpret the current NAREIT definition differently. The Company’s computation of FFO may not be comparable to FFO reported by other REITs or real estate companies that define FFO differently.
Reconciliation of Net Income to FFO: | Three Months Ended | |||||||
March 31, | ||||||||
(In thousands, except per share amounts) | 2015 | 2014 | ||||||
Net income | $ | 12,533 | $ | 3,573 | ||||
Gain on sale of assets, less applicable income tax | (10,462 | ) | — | |||||
GAAP loss from non-consolidated REITs | 322 | 484 | ||||||
FFO from non-consolidated REITs | 601 | 419 | ||||||
Depreciation & amortization | 22,678 | 24,289 | ||||||
NAREIT FFO | 25,672 | 28,765 | ||||||
Acquisition costs of new properties | — | 14 | ||||||
Funds From Operations (FFO) | $ | 25,672 | $ | 28,779 | ||||
Per Share Data | ||||||||
EPS | $ | 0.13 | $ | 0.04 | ||||
FFO | $ | 0.26 | $ | 0.29 | ||||
Weighted average shares (basic and diluted) | 100,187 | 100,187 |
Today’s news release, along with other news about Franklin Street Properties Corp., is available on the Internet at www.franklinstreetproperties.com. We routinely post information that may be important to investors in the Investor Relations section of our website. We encourage investors to consult that section of our website regularly for important information about us and, if they are interested in automatically receiving news and information as soon as it is posted, to sign up for E-mail Alerts.
Earnings Call
A conference call is scheduled for April 29, 2015 at 10:00 a.m. (ET) to discuss the first quarter 2015 results. To access the call, please dial 1-877-507-4376. Internationally, the call may be accessed by dialing 1-412-317-6014. To listen via live audio webcast, please visit the Webcasts & Presentations section in the Investor Relations section of the Company's website (www.franklinstreetproperties.com) at least ten minutes prior to the start of the call and follow the posted directions. The webcast will also be available via replay from the above location starting one hour after the call is finished.
About Franklin Street Properties Corp.
Franklin Street Properties Corp., based in Wakefield, Massachusetts, is focused on investing in institutional-quality office properties in the U.S. FSP’s strategy is to invest in select urban infill and central business district (CBD) properties, with primary emphasis on our top five markets of Atlanta, Dallas, Denver, Houston, and Minneapolis. FSP seeks value-oriented investments with an eye towards long-term growth and appreciation, as well as current income. FSP is a Maryland corporation that operates in a manner intended to qualify as a real estate investment trust (REIT) for federal income tax purposes. To learn more about FSP please visit our website at www.franklinstreetproperties.com.
-4- |
Forward-Looking Statements
Statements made in this press release that state FSP’s or management’s intentions, beliefs, expectations, or predictions for the future may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. This press release may also contain forward-looking statements based on current judgments and current knowledge of management, which are subject to certain risks, trends and uncertainties that could cause actual results to differ materially from those indicated in such forward-looking statements. Accordingly, readers are cautioned not to place undue reliance on forward-looking statements. Investors are cautioned that our forward-looking statements involve risks and uncertainty, including without limitation, economic conditions in the United States, disruptions in the debt markets, economic conditions in the markets in which we own properties, risks of a lessening of demand for the types of real estate owned by us, changes in government regulations and regulatory uncertainty, uncertainty about governmental fiscal policy, geopolitical events and expenditures that cannot be anticipated such as utility rate and usage increases, unanticipated repairs, additional staffing, insurance increases and real estate tax valuation reassessments. See the “Risk Factors” set forth in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2014, as the same may be updated from time to time in subsequent filings with the United States Securities and Exchange Commission. Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. We will not update any of the forward-looking statements after the date of this press release to conform them to actual results or to changes in our expectations that occur after such date, other than as required by law.
Franklin Street Properties Corp.
Earnings Release
Supplementary Information
Table of Contents
Franklin Street Properties Corp. Financial Results | A-C |
Real Estate Portfolio Summary Information | D |
Portfolio and Other Supplementary Information | E |
Percentage of Leased Space | F |
Largest 20 Tenants – FSP Owned Portfolio | G |
Definition of Funds From Operations (FFO) | H |
-5- |
Franklin Street Properties Corp. Financial Results
Supplementary Schedule A
Condensed Consolidated Income (Loss) Statements
(Unaudited)
For the Three Months Ended March 31, | ||||||||
(in thousands, except per share amounts) | 2015 | 2014 | ||||||
Revenue: | ||||||||
Rental | $ | 59,013 | $ | 61,597 | ||||
Related party revenue: | ||||||||
Management fees and interest income from loans | 1,473 | 1,643 | ||||||
Other | 21 | 23 | ||||||
Total revenue | 60,507 | 63,263 | ||||||
Expenses: | ||||||||
Real estate operating expenses | 15,356 | 15,071 | ||||||
Real estate taxes and insurance | 10,048 | 9,251 | ||||||
Depreciation and amortization | 22,672 | 24,300 | ||||||
Selling, general and administrative | 3,691 | 3,272 | ||||||
Interest | 6,187 | 7,176 | ||||||
Total expenses | 57,954 | 59,070 | ||||||
Income before interest income, equity in losses of | ||||||||
non-consolidated REITs and taxes | 2,553 | 4,193 | ||||||
Interest income | 1 | 1 | ||||||
Equity in losses of non-consolidated REITs | (322 | ) | (484 | ) | ||||
Gain on sale of properties, less applicable income tax | 10,462 | — | ||||||
Income before taxes on income | 12,694 | 3,710 | ||||||
Taxes on income | 161 | 137 | ||||||
Net income | $ | 12,533 | $ | 3,573 | ||||
Weighted average number of shares outstanding, | ||||||||
basic and diluted | 100,187 | 100,187 | ||||||
Net income per share, basic and diluted | $ | 0.13 | $ | 0.04 |
-6- |
Franklin Street Properties Corp. Financial Results
Supplementary Schedule B
Condensed Consolidated Balance Sheets
(Unaudited)
March 31, | December 31, | |||||||
(in thousands, except share and par value amounts) | 2015 | 2014 | ||||||
Assets: | ||||||||
Real estate assets: | ||||||||
Land | $ | 174,707 | $ | 183,930 | ||||
Buildings and improvements | 1,581,524 | 1,604,984 | ||||||
Fixtures and equipment | 1,724 | 1,677 | ||||||
1,757,955 | 1,790,591 | |||||||
Less accumulated depreciation | 271,058 | 266,284 | ||||||
Real estate assets, net | 1,486,897 | 1,524,307 | ||||||
Acquired real estate leases, less accumulated amortization | ||||||||
of $105,045 and $101,838, respectively | 124,337 | 138,714 | ||||||
Investment in non-consolidated REITs | 78,228 | 78,611 | ||||||
Cash and cash equivalents | 14,945 | 7,519 | ||||||
Restricted cash | 56 | 742 | ||||||
Tenant rent receivables, less allowance for doubtful accounts | ||||||||
of $330 and $325, respectively | 4,587 | 4,733 | ||||||
Straight-line rent receivable, less allowance for doubtful accounts | ||||||||
of $162 and $162, respectively | 45,498 | 47,021 | ||||||
Prepaid expenses and other assets | 13,526 | 10,292 | ||||||
Related party mortgage loan receivables | 93,641 | 93,641 | ||||||
Other assets: derivative asset | 774 | 3,020 | ||||||
Office computers and furniture, net of accumulated depreciation | ||||||||
of $1,109 and $1,036, respectively | 588 | 609 | ||||||
Deferred leasing commissions, net of accumulated amortization | ||||||||
of $17,429 and $16,944, respectively | 26,335 | 27,181 | ||||||
Total assets | $ | 1,889,412 | $ | 1,936,390 | ||||
Liabilities and Stockholders’ Equity: | ||||||||
Liabilities: | ||||||||
Bank note payable | $ | 240,000 | $ | 268,000 | ||||
Term loans payable | 620,000 | 620,000 | ||||||
Accounts payable and accrued expenses | 36,065 | 42,561 | ||||||
Accrued compensation | 1,241 | 3,758 | ||||||
Tenant security deposits | 4,019 | 4,248 | ||||||
Other liabilities: derivative liability | 9,836 | 7,268 | ||||||
Acquired unfavorable real estate leases, less accumulated amortization of $9,218 and $8,687, respectively | 9,921 | 10,908 | ||||||
Total liabilities | 921,082 | 956,743 | ||||||
Commitments and contingencies | ||||||||
Stockholders’ Equity: | ||||||||
Preferred stock, $.0001 par value, 20,000,000 shares authorized, none issued or outstanding | — | — | ||||||
Common stock, $.0001 par value, 180,000,000 shares authorized, 100,187,405 and 100,187,405 shares issued and outstanding, respectively | 10 | 10 | ||||||
Additional paid-in capital | 1,273,556 | 1,273,556 | ||||||
Accumulated other comprehensive loss | (9,062 | ) | (4,248 | ) | ||||
Accumulated distributions in excess of accumulated earnings | (296,174 | ) | (289,671 | ) | ||||
Total stockholders’ equity | 968,330 | 979,647 | ||||||
Total liabilities and stockholders’ equity | $ | 1,889,412 | $ | 1,936,390 |
-7- |
Franklin Street Properties Corp. Financial Results
Supplementary Schedule C
Condensed Consolidated Statements of Cash Flows
(Unaudited)
For the Three Months Ended March 31, | ||||||||
(in thousands) | 2015 | 2014 | ||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 12,533 | $ | 3,573 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization expense | 23,189 | 24,797 | ||||||
Amortization of above market lease | 6 | (11 | ) | |||||
Equity in losses of non-consolidated REITs | 322 | 484 | ||||||
Gain on sale of properties, less applicable income tax | (10,462 | ) | — | |||||
Changes in operating assets and liabilities: | ||||||||
Restricted cash | 686 | (45 | ) | |||||
Tenant rent receivables | 146 | (933 | ) | |||||
Straight-line rents | (69 | ) | (1,784 | ) | ||||
Lease acquisition costs | (3 | ) | (347 | ) | ||||
Prepaid expenses and other assets | 283 | 800 | ||||||
Accounts payable, accrued expenses and other items | (7,706 | ) | (7,257 | ) | ||||
Accrued compensation | (2,517 | ) | (1,958 | ) | ||||
Tenant security deposits | (230 | ) | 231 | |||||
Payment of deferred leasing commissions | (1,116 | ) | (1,113 | ) | ||||
Net cash provided by operating activities | 15,062 | 16,437 | ||||||
Cash flows from investing activities: | ||||||||
Property acquisitions | ||||||||
Property improvements, fixtures and equipment | (4,298 | ) | (4,850 | ) | ||||
Distributions in excess of earnings from non-consolidated REITs | 27 | 27 | ||||||
Investment in related party mortgage loan receivable | — | (2,170 | ) | |||||
Proceeds received on sales of real estate assets | 47,671 | — | ||||||
Changes in deposits on real estate assets | (4,000 | ) | — | |||||
Net cash provided by (used in) investing activities | 39,400 | (6,993 | ) | |||||
Cash flows from financing activities: | ||||||||
Distributions to stockholders | (19,036 | ) | (19,036 | ) | ||||
Borrowings under bank note payable | 20,000 | 10,000 | ||||||
Repayments of bank note payable | (48,000 | ) | — | |||||
Net cash used in financing activities | (47,036 | ) | (9,036 | ) | ||||
Net increase (decrease) in cash and cash equivalents | 7,426 | 408 | ||||||
Cash and cash equivalents, beginning of year | 7,519 | 19,623 | ||||||
Cash and cash equivalents, end of year | $ | 14,945 | $ | 20,031 |
-8- |
Franklin Street Properties Corp. Earnings Release
Supplementary Schedule D
Real Estate Portfolio Summary Information
(Unaudited & Approximated)
Commercial portfolio lease expirations (1) | |||
Total | % of | ||
Year | Square Feet | Portfolio | |
2015 | 349,621 | 3.8% | |
2016 | 1,005,893 | 10.8% | |
2017 | 1,039,874 | 11.2% | |
2018 | 934,962 | 10.0% | |
2019 | 1,566,112 | 16.8% | |
Thereafter (2) | 4,413,669 | 47.4% | |
9,310,131 | 100.0% |
(1) | Percentages are determined based upon square footage of expiring commercial leases. |
(2) | Includes 897,321 square feet of current vacancies. |
(dollars & square feet in 000's) | As of March 31, 2015 | |||||
# of | % of | Square | % of | |||
State | Properties | Investment | Portfolio | Feet | Portfolio | |
Texas | 9 | $ 373,025 | 25.1% | 2,422 | 26.0% | |
Colorado | 5 | 433,900 | 29.2% | 2,010 | 21.6% | |
Georgia | 3 | 221,523 | 14.9% | 1,396 | 15.0% | |
Virginia | 4 | 96,087 | 6.5% | 685 | 7.4% | |
Minnesota | 1 | 29,865 | 2.0% | 475 | 5.1% | |
Missouri | 3 | 61,609 | 4.1% | 477 | 5.1% | |
North Carolina | 3 | 63,212 | 4.2% | 431 | 4.6% | |
Illinois | 2 | 45,833 | 3.1% | 372 | 4.0% | |
Maryland | 1 | 52,465 | 3.5% | 325 | 3.5% | |
Florida | 1 | 42,729 | 2.9% | 213 | 2.3% | |
Indiana | 1 | 32,573 | 2.2% | 205 | 2.2% | |
California | 2 | 20,313 | 1.4% | 182 | 2.0% | |
Washington | 1 | 13,763 | 0.9% | 117 | 1.2% | |
36 | $ 1,486,897 | 100.0% | 9,310 | 100.0% |
-9- |
Franklin Street Properties Corp. Earnings Release
Supplementary Schedule E
Portfolio and Other Supplementary Information
(Unaudited & Approximated)
Recurring Capital Expenditures
Owned Portfolio
Three Months | ||||||||||||||||||||
(in thousands) | Ended | |||||||||||||||||||
31-Mar-15 | ||||||||||||||||||||
Tenant improvements | $ | 2,936 | ||||||||||||||||||
Deferred leasing costs | 830 | |||||||||||||||||||
Non-investment capex | 643 | |||||||||||||||||||
$ | 4,409 |
For the Three Months Ended: | Year ended | |||||||||||||||||||
31-Mar-14 | 30-Jun-14 | 30-Sep-14 | 31-Dec-14 | 31-Dec-14 | ||||||||||||||||
Tenant improvements | $ | 1,132 | $ | 1,837 | $ | 2,612 | $ | 4,244 | $ | 9,825 | ||||||||||
Deferred leasing costs | 1,080 | 2,786 | 577 | 1,405 | 5,848 | |||||||||||||||
Non-investment capex | 364 | 1,621 | 700 | 851 | 3,536 | |||||||||||||||
$ | 2,576 | $ | 6,244 | $ | 3,889 | $ | 6,500 | $ | 19,209 |
Square foot & leased percentages | March 31, | December 31, | ||
2015 | 2014 | |||
Owned portfolio of commercial real estate | ||||
Number of properties | 36 | 38 | ||
Square feet | 9,310,131 | 9,580,057 | ||
Leased percentage | 90.4% | 92.8% | ||
Investments in non-consolidated REITs | ||||
Number of properties | 2 | 2 | ||
Square feet | 1,396,071 | 1,395,780 | ||
Leased percentage | 70.1% | 71.3% | ||
Single Asset REITs (SARs) managed | ||||
Number of properties | 7 | 8 | ||
Square feet | 1,488,003 | 1,897,801 | ||
Leased percentage | 73.4% | 84.7% | ||
Total owned, investments & managed properties | ||||
Number of properties | 45 | 48 | ||
Square feet | 12,194,205 | 12,873,638 | ||
Leased percentage | 86.0% | 89.3% |
The following table shows property information for our investments in non-consolidated REITs:
Square | % Leased | % Interest | |||
Single Asset REIT name | City | State | Feet | 31-Mar-15 | Held |
FSP 303 East Wacker Drive Corp. | Chicago | IL | 861,000 | 59.6% | 43.7% |
FSP Grand Boulevard Corp. | Kansas City | MO | 535,071 | 86.9% | 27.0% |
1,396,071 | 70.1% |
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Franklin Street Properties Corp. Earnings Release
Supplementary Schedule F
Percentage of Leased Space
(Unaudited & Estimated)
Fourth | First | ||||||
% Leased (1) | Quarter | % Leased (1) | Quarter | ||||
Square | as of | Average % | as of | Average % | |||
Property Name | Location | Feet | 31-Dec-14 | Dec-14 | 31-Mar-15 | Leased (2) | |
1 | PARK SENECA | Charlotte, NC | 109,699 | 92.1% | 91.0% | 91.9% | 90.4% |
2 | HILLVIEW CENTER | Milpitas, CA | 36,288 | 100.0% | 100.0% | 100.0% | 100.0% |
3 | FOREST PARK | Charlotte, NC | 62,212 | 100.0% | 100.0% | 100.0% | 100.0% |
4 | MEADOW POINT | Chantilly, VA | 138,537 | 92.6% | 92.6% | 92.6% | 92.6% |
5 | TIMBERLAKE | Chesterfield, MO | 232,766 | 98.3% | 98.3% | 43.8% | 43.8% |
6 | FEDERAL WAY | Federal Way, WA | 117,010 | 57.1% | 57.3% | 57.1% | 57.1% |
7 | NORTHWEST POINT | Elk Grove Village, IL | 176,848 | 100.0% | 100.0% | 100.0% | 100.0% |
8 | TIMBERLAKE EAST | Chesterfield, MO | 116,197 | 91.0% | 91.0% | 43.1% | 35.8% |
9 | PARK TEN | Houston, TX | 157,460 | 63.1% | 68.8% | 63.1% | 63.1% |
10 | MONTAGUE | San Jose, CA | 145,951 | 81.1% | 81.1% | 81.1% | 81.1% |
11 | ADDISON | Addison, TX | 294,053 | 89.6% | 93.4% | 86.2% | 88.5% |
12 | COLLINS CROSSING | Richardson, TX | 300,472 | 99.5% | 99.5% | 99.5% | 99.5% |
13 | GREENWOOD PLAZA | Englewood, CO | 196,236 | 100.0% | 100.0% | 100.0% | 100.0% |
14 | RIVER CROSSING | Indianapolis, IN | 205,059 | 100.0% | 99.7% | 100.0% | 100.0% |
15 | LIBERTY PLAZA | Addison, TX | 218,934 | 90.6% | 93.2% | 90.7% | 90.5% |
16 | INNSBROOK | Glen Allen, VA | 298,456 | 99.9% | 99.9% | 99.9% | 99.9% |
17 | 380 INTERLOCKEN | Broomfield, CO | 240,185 | 95.8% | 95.8% | 95.8% | 95.8% |
18 | BLUE LAGOON | Miami, FLA | 212,619 | 100.0% | 100.0% | 100.0% | 100.0% |
19 | ELDRIDGE GREEN | Houston, TX | 248,399 | 100.0% | 100.0% | 100.0% | 100.0% |
20 | WILLOW BEND | Plano, TX | - | 100.0% | 100.0% | Sold February 23, 2015 | |
21 | ONE OVERTON PARK | Atlanta, GA | 387,267 | 86.3% | 90.7% | 84.4% | 84.4% |
22 | 390 INTERLOCKEN | Broomfield, CO | 241,516 | 72.3% | 72.0% | 72.3% | 72.3% |
23 | EAST BALTIMORE | Baltimore, MD | 325,445 | 81.9% | 81.9% | 81.3% | 81.3% |
24 | PARK TEN PHASE II | Houston, TX | 156,746 | 100.0% | 100.0% | 100.0% | 100.0% |
25 | LAKESIDE CROSSING I | Maryland Heights, MO | 127,778 | 100.0% | 100.0% | 100.0% | 100.0% |
26 | LOUDOUN TECH | Dulles, VA | 136,658 | 92.0% | 92.0% | 92.0% | 92.0% |
27 | 4807 STONECROFT | Chantilly, VA | 111,469 | 100.0% | 100.0% | 100.0% | 100.0% |
28 | EDEN BLUFF | Eden Prairie, MN | - | 100.0% | 100.0% | Sold March 31, 2015 | |
29 | 121 SOUTH EIGHTH ST | Minneapolis, MN | 475,012 | 91.2% | 90.9% | 90.2% | 90.6% |
30 | EMPEROR BOULEVARD | Durham, NC | 259,531 | 100.0% | 100.0% | 100.0% | 100.0% |
31 | LEGACY TENNYSON CTR | Plano, TX | 202,600 | 100.0% | 100.0% | 100.0% | 100.0% |
32 | ONE LEGACY | Plano, TX | 214,110 | 100.0% | 100.0% | 100.0% | 100.0% |
33 | 909 DAVIS | Evanston, IL | 195,245 | 97.9% | 97.9% | 97.9% | 97.9% |
34 | ONE RAVINIA DRIVE | Atlanta, GA | 386,603 | 95.2% | 94.7% | 95.2% | 95.2% |
35 | WESTCHASE I & II | Houston, TX | 629,025 | 97.7% | 97.7% | 97.1% | 97.1% |
36 | 1999 BROADWAY | Denver, CO | 676,379 | 88.9% | 88.4% | 87.7% | 88.0% |
37 | 999 PEACHTREE | Atlanta, GA | 621,946 | 97.7% | 97.9% | 98.2% | 97.8% |
38 | 1001 17th STREET | Denver, CO | 655,420 | 84.8% | 82.3% | 86.1% | 85.7% |
TOTAL WEIGHTED AVERAGE (3) | 9,310,131 | 92.8% | 93.0% | 90.4% | 90.4% |
(1) % Leased as of month's end includes all leases that expire on the last day of the quarter.
(2) Average quarterly percentage is the average of the end of the month leased percentage for each of the 3 months during the quarter.
(3) Totals for Q4 include Willow Bend and Eden Bluff, which were sold in Q1 2015.
-11- |
Franklin Street Properties Corp. Earnings Release
Supplementary Schedule G
Largest 20 Tenants – FSP Owned Portfolio
(Unaudited & Estimated)
The following table includes the largest 20 tenants in FSP’s owned portfolio based on leased square feet:
As of March 31, 2015 | ||||
% of | ||||
Tenant | Sq Ft | Portfolio | ||
1 | TCF National Bank | 263,111 | 2.8% | |
2 | Quintiles Transnational Corp | 259,531 | 2.8% | |
3 | CITGO Petroleum Corporation | 248,399 | 2.7% | |
4 | Sutherland Asbill Brennan LLP (a) | 243,839 | 2.6% | |
5 | Newfield Exploration Company | 234,495 | 2.5% | |
6 | US Government (b) | 221,270 | 2.4% | |
7 | Burger King Corporation | 212,619 | 2.3% | |
8 | Denbury Onshore, LLC | 202,600 | 2.1% | |
9 | SunTrust Bank (c) | 182,888 | 2.0% | |
10 | Citicorp Credit Services, Inc | 176,848 | 1.9% | |
11 | T-Mobile South, LLC dba T-Mobile | 151,792 | 1.6% | |
12 | Houghton Mifflin Harcourt Publishing Company | 150,050 | 1.6% | |
13 | Petrobras America, Inc. | 144,813 | 1.6% | |
14 | Murphy Exploration & Production Company | 144,677 | 1.6% | |
15 | Argo Data Resource Corporation | 140,246 | 1.5% | |
16 | Monsanto Company | 127,778 | 1.4% | |
17 | Federal National Mortgage Association | 123,144 | 1.3% | |
18 | Vail Corp d/b/a Vail Resorts (d) | 122,232 | 1.3% | |
19 | Kaiser Foundation Health Plan | 120,979 | 1.3% | |
20 | Giesecke & Devrient America | 112,110 | 1.2% | |
Total | 3,583,421 | 38.5% |
(a) | Includes 222,422 expiring in 2020 and 21,417 expiring April 30, 2015. |
(b) | Includes 180,444 and 27,398 square feet which expire in 2018 & 2017, respectively. The remaining 13,428 square feet expire between 2015 - 2020. |
(c) | Includes 55,388 square feet which expires October 31, 2016. The remaining 127,500 square feet expires September 30, 2021. |
(d) | Includes 38,293 square feet which expires March 31, 2019. The remaining 83,939 square feet expires March 31, 2023. |
-12- |
Franklin Street Properties Corp. Earnings Release
Supplementary Schedule H
Definition of Funds From Operations (“FFO”)
The Company evaluates performance based on Funds From Operations, which we refer to as FFO, as management believes that FFO represents the most accurate measure of activity and is the basis for distributions paid to equity holders. The Company defines FFO as net income (computed in accordance with GAAP), excluding gains (or losses) from sales of property and acquisition costs of newly acquired properties that are not capitalized, plus depreciation and amortization, including amortization of acquired above and below market lease intangibles and impairment charges on properties or investments in non-consolidated REITs, and after adjustments to exclude equity in income or losses from, and, to include the proportionate share of FFO from, non-consolidated REITs.
FFO should not be considered as an alternative to net income (determined in accordance with GAAP), nor as an indicator of the Company’s financial performance, nor as an alternative to cash flows from operating activities (determined in accordance with GAAP), nor as a measure of the Company’s liquidity, nor is it necessarily indicative of sufficient cash flow to fund all of the Company’s needs.
Other real estate companies and NAREIT, may define this term in a different manner. We have included the NAREIT FFO definition in our table and note that other REITs may not define FFO in accordance with the current NAREIT definition or may interpret the current NAREIT definition differently than we do.
We believe that in order to facilitate a clear understanding of the results of the Company, FFO should be examined in connection with net income and cash flows from operating, investing and financing activities in the consolidated financial statements.
Exhibit 99.2
Supplemental
Operating First Quarter 2015 |
Franklin Street Properties Corp. ● 401 Edgewater Place ● Wakefield, MA 01880 ● (781) 557-1300
www.franklinstreetproperties.com
Table of Contents |
Page | Page | |||
Company Overview | 3 | Tenant Analysis and Leasing Activity | ||
Tenants by Industry | 18 | |||
Key Financial Data | 20 Largest Tenants with Annualized Rent and Remaining Term | 19 | ||
Financial Highlights | 4 | Leasing Activity | 20 | |
Income Statements | 5 | Lease Expirations by Square Feet | 21 | |
Balance Sheets | 6 | Lease Expirations with Annualized Rent per Square Foot | 22 | |
Cash Flow Statements | 7 | Capital Expenditures | 23 | |
Property Net Operating Income (NOI) | 8 | |||
Transaction Activity | 24 | |||
Reconciliation | ||||
FFO & AFFO | 9 | Loan Portfolio of Secured Real Estate | 25 | |
EBITDA | 10 | |||
Property NOI | 11 | Net Asset Value Components | 26 | |
Debt Summary | 12 | Appendix: Definitions of Non-GAAP Measures | ||
FFO | 27 | |||
Capital Analysis | 13 | EBITDA and NOI | 28 | |
AFFO | 29 | |||
Owned and Managed Portfolio Overview | 14-17 |
All financial information contained in this supplemental information package is unaudited. In addition, certain statements contained in this supplemental information package may be deemed to be forward-looking statements within the meaning of the federal securities laws. Although FSP believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that its expectations will be achieved. Factors that could cause actual results to differ materially from FSP’s current expectations include general economic conditions, uncertainties relating to fiscal policy, changes in government regulations, regulatory uncertainty, geopolitical events, local real estate conditions, the performance of properties that FSP has acquired or may acquire, the timely lease-up of properties and other risks, detailed from time to time in FSP’s SEC reports. FSP assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.
March 31, 2015
|
2 |
Company Overview |
Overview
Franklin Street Properties Corp. (“FSP”, “we”, “our” or the “Company”) (NYSE MKT: FSP) is investing in institutional-quality office properties in the U.S. FSP’s strategy is to invest in select urban infill and central business district (CBD) properties, with primary emphasis on our top five markets of Atlanta, Dallas, Denver, Houston, and Minneapolis. FSP seeks value-oriented investments with an eye towards long-term growth and appreciation, as well as current income. FSP is a Maryland corporation that operates in a manner intended to qualify as a real estate investment trust (REIT) for federal income tax purposes. FSP’s real estate operations include property acquisitions and dispositions, short-term financing, leasing, development and asset management.
Our Business
As of March 31, 2015, the Company owned and operated a portfolio of real estate consisting of 36 properties, managed 9 Sponsored REITs and held five promissory notes secured by mortgages on real estate owned by Sponsored REITs. From time-to-time, the Company may acquire real estate, make additional secured loans or acquire one of its Sponsored REITs. The Company may also pursue, on a selective basis, the sale of its properties in order to take advantage of the value creation and demand for its properties, or for geographic or property specific reasons.
Management Team | |||
George J. Carter | Scott H. Carter | ||
President, Chief Executive Officer | Executive Vice President, General | ||
Chairman of the Board | Counsel and Secretary | ||
John G. Demeritt | Jeffrey B. Carter | ||
Executive Vice President and | Executive Vice President and | ||
Chief Financial Officer and Treasuer | Chief Investment Officer | ||
Janet Notopoulos | Eriel Anchondo | ||
Executive Vice President and Director | Senior Vice President of Operations |
Inquiries
Inquires should be directed to: John Demeritt, CFO
877-686-9496 or InvestorRelations@franklinstreetproperties.com
Snapshot (as of March 31, 2015) | |
Corporate Headquarters | Wakefield, MA |
Fiscal Year-End | 31-Dec |
Total Properties | 36 |
Total Square Feet | 9.3 million |
Trading Symbol | FSP |
Exchange | NYSE MKT |
Common Shares Outstanding | 100,187,405 |
Quarterly Dividend | $0.19 |
Dividend Yield | 5.9% |
Total Market Capitalization | $2.1 Billion |
Insider Holdings | 10.2% |
March 31, 2015
|
3 |
Summary of Financial Highlights |
(in thousands except per share amounts, SF & number of properties) | ||||||||||||||||||||
31-Mar-15 | 31-Dec-14 | 30-Sep-14 | 30-Jun-14 | 31-Mar-14 | ||||||||||||||||
Income Items: | ||||||||||||||||||||
Rental revenue | $ | 59,013 | $ | 61,022 | $ | 59,728 | $ | 60,994 | $ | 61,597 | ||||||||||
Total revenue | 60,507 | 62,489 | 61,190 | 62,741 | 63,263 | |||||||||||||||
Adjusted EBITDA* | 31,097 | 33,182 | 33,973 | 34,359 | 35,175 | |||||||||||||||
Equity in losses of non-consolidated REITs | (322 | ) | (269 | ) | (455 | ) | (552 | ) | (484 | ) | ||||||||||
Net income | 12,533 | 4,295 | 1,567 | 3,713 | 3,573 | |||||||||||||||
FFO* | 25,672 | 27,525 | 27,904 | 28,254 | 28,779 | |||||||||||||||
Per Share Data: | ||||||||||||||||||||
EPS | $ | 0.13 | $ | 0.04 | $ | 0.02 | $ | 0.04 | $ | 0.04 | ||||||||||
FFO* | $ | 0.26 | $ | 0.27 | $ | 0.28 | $ | 0.28 | $ | 0.29 | ||||||||||
Weighted Average Shares (diluted) | 100,187 | 100,187 | 100,187 | 100,187 | 100,187 | |||||||||||||||
Closing share price | $ | 12.82 | $ | 12.27 | $ | 11.22 | $ | 12.58 | $ | 12.60 | ||||||||||
Dividend | $ | 0.19 | $ | 0.19 | $ | 0.19 | $ | 0.19 | $ | 0.19 | ||||||||||
Payout Ratio: | 74 | % | 69 | % | 68 | % | 67 | % | 66 | % | ||||||||||
Balance Sheet Items: | ||||||||||||||||||||
Real estate, net | $ | 1,486,897 | $ | 1,524,307 | $ | 1,542,012 | $ | 1,549,963 | $ | 1,558,136 | ||||||||||
Other assets, net | 402,515 | 412,083 | 425,305 | 438,634 | 467,539 | |||||||||||||||
Total assets, net | 1,889,412 | 1,936,390 | 1,967,317 | 1,988,597 | 2,025,675 | |||||||||||||||
Total liabilities, net | 921,082 | 956,743 | 968,948 | 975,853 | 993,273 | |||||||||||||||
Shareholders' equity | 968,330 | 979,647 | 998,369 | 1,012,744 | 1,032,402 | |||||||||||||||
Market Capitalization and Debt: | ||||||||||||||||||||
Total Market Capitalization (a) | $ | 2,144,403 | $ | 2,117,299 | $ | 2,029,103 | $ | 2,176,858 | $ | 2,198,861 | ||||||||||
Total debt outstanding | 860,000 | 888,000 | 905,000 | 916,500 | 936,500 | |||||||||||||||
Debt to Total Market Capitalization | 40.1 | % | 41.9 | % | 44.6 | % | 42.1 | % | 42.6 | % | ||||||||||
Debt to Adjusted EBITDA | 6.9 | 6.7 | 6.7 | 6.7 | 6.7 | |||||||||||||||
Owned Portfolio Leasing Statistics: | ||||||||||||||||||||
Owned portfolio assets | 36 | 38 | 39 | 39 | 39 | |||||||||||||||
Portfolio total SF | 9,310,131 | 9,580,057 | 9,690,361 | 9,686,215 | 9,686,055 | |||||||||||||||
Portfolio % leased | 90.4 | % | 92.8 | % | 93.3 | % | 94.1 | % | 94.5 | % |
(a) | Total Market Capitalization is the closing share price multiplied by the number of shares outstanding plus total debt outstanding on that date. |
* | See pages 9 & 10 for reconciliations of Net Income to FFO and Adjusted EBITDA, respectively, and the Appendix for Definitions of these Non-GAAP Measures beginning on page 27. |
March 31, 2015
|
4 |
Condensed
Consolidated Income Statements ($ in thousands, except per share amounts) |
For the Three | For the | |||||||||||||||||||||||
Months Ended | For the Three Months Ended | Year Ended | ||||||||||||||||||||||
31-Mar-15 | 31-Mar-14 | 30-Jun-14 | 30-Sep-14 | 31-Dec-14 | 31-Dec-14 | |||||||||||||||||||
Revenue: | ||||||||||||||||||||||||
Rental | $ | 59,013 | $ | 61,597 | $ | 60,994 | $ | 59,728 | $ | 61,022 | $ | 243,341 | ||||||||||||
Related party revenue: | ||||||||||||||||||||||||
Management fees and interest income from loans | 1,473 | 1,643 | 1,671 | 1,462 | 1,465 | 6,241 | ||||||||||||||||||
Other | 21 | 23 | 76 | — | 2 | 101 | ||||||||||||||||||
Total revenue | 60,507 | 63,263 | 62,741 | 61,190 | 62,489 | 249,683 | ||||||||||||||||||
Expenses: | ||||||||||||||||||||||||
Real estate operating expenses | 15,356 | 15,071 | 14,995 | 15,632 | 16,334 | 62,032 | ||||||||||||||||||
Real estate taxes and insurance | 10,048 | 9,251 | 9,763 | 8,555 | 9,288 | 36,857 | ||||||||||||||||||
Depreciation and amortization | 22,672 | 24,300 | 23,563 | 24,878 | 23,174 | 95,915 | ||||||||||||||||||
Selling, general and administrative | 3,691 | 3,272 | 3,148 | 3,071 | 3,492 | 12,983 | ||||||||||||||||||
Interest | 6,187 | 7,176 | 6,891 | 6,883 | 6,483 | 27,433 | ||||||||||||||||||
Total expenses | 57,954 | 59,070 | 58,360 | 59,019 | 58,771 | 235,220 | ||||||||||||||||||
Income before interest income, equity in losses of non-consolidated REITs and taxes | 2,553 | 4,193 | 4,381 | 2,171 | 3,718 | 14,463 | ||||||||||||||||||
Interest income | 1 | 1 | 1 | — | 1 | 3 | ||||||||||||||||||
Equity in losses of non-consolidated REITs | (322 | ) | (484 | ) | (552 | ) | (455 | ) | (269 | ) | (1,760 | ) | ||||||||||||
Gain on sale of properties, less applicable income tax | 10,462 | — | — | — | 940 | 940 | ||||||||||||||||||
Income before taxes on income | 12,694 | 3,710 | 3,830 | 1,716 | 4,390 | 13,646 | ||||||||||||||||||
Income tax expense | 161 | 137 | 117 | 149 | 95 | 498 | ||||||||||||||||||
Net income | $ | 12,533 | $ | 3,573 | $ | 3,713 | $ | 1,567 | $ | 4,295 | $ | 13,148 | ||||||||||||
Weighted average number of shares outstanding, basic and diluted | 100,187 | 100,187 | 100,187 | 100,187 | 100,187 | 100,187 | ||||||||||||||||||
Net income per share, basic and diluted | $ | 0.13 | $ | 0.04 | $ | 0.04 | $ | 0.02 | $ | 0.04 | $ | 0.13 |
March 31, 2015
|
5 |
Condensed
Consolidated Balance Sheets (in thousands) |
March 31, | March 31, | June 30, | September 30, | December 31, | ||||||||||||||||
2015 | 2014 | 2014 | 2014 | 2014 | ||||||||||||||||
Assets: | ||||||||||||||||||||
Real estate assets: | ||||||||||||||||||||
Land | $ | 174,707 | $ | 185,479 | $ | 185,479 | $ | 185,479 | $ | 183,930 | ||||||||||
Buildings and improvements | 1,581,524 | 1,605,808 | 1,609,747 | 1,613,699 | 1,604,984 | |||||||||||||||
Fixtures and equipment | 1,724 | 1,296 | 1,395 | 1,633 | 1,677 | |||||||||||||||
1,757,955 | 1,792,583 | 1,796,621 | 1,800,811 | 1,790,591 | ||||||||||||||||
Less accumulated depreciation | 271,058 | 234,447 | 246,658 | 258,799 | 266,284 | |||||||||||||||
Real estate assets, net | 1,486,897 | 1,558,136 | 1,549,963 | 1,542,012 | 1,524,307 | |||||||||||||||
Acquired real estate leases, net | 124,337 | 172,262 | 161,519 | 149,019 | 138,714 | |||||||||||||||
Investment in non-consolidated REITs | 78,228 | 79,983 | 79,405 | 78,907 | 78,611 | |||||||||||||||
Cash and cash equivalents | 14,945 | 20,031 | 18,455 | 15,930 | 7,519 | |||||||||||||||
Restricted cash | 56 | 688 | 728 | 707 | 742 | |||||||||||||||
Tenant rent receivables, net | 4,587 | 6,035 | 2,867 | 2,865 | 4,733 | |||||||||||||||
Straight-line rent receivable, net | 45,498 | 44,392 | 46,021 | 46,737 | 47,021 | |||||||||||||||
Prepaid expenses and other assets | 14,114 | 9,954 | 9,716 | 9,768 | 10,901 | |||||||||||||||
Related party mortgage loan receivable | 93,641 | 101,916 | 88,436 | 88,436 | 93,641 | |||||||||||||||
Other assets: derivative asset | 774 | 4,801 | 2,626 | 4,582 | 3,020 | |||||||||||||||
Deferred leasing commissions, net | 26,335 | 27,477 | 28,861 | 28,354 | 27,181 | |||||||||||||||
Total assets | $ | 1,889,412 | $ | 2,025,675 | $ | 1,988,597 | $ | 1,967,317 | $ | 1,936,390 | ||||||||||
Liabilities and Stockholders’ Equity: | ||||||||||||||||||||
Liabilities: | ||||||||||||||||||||
Bank note payable | $ | 240,000 | $ | 316,500 | $ | 296,500 | $ | 285,000 | $ | 268,000 | ||||||||||
Term loan payable | 620,000 | 620,000 | 620,000 | 620,000 | 620,000 | |||||||||||||||
Accounts payable and accrued expenses | 36,065 | 34,390 | 34,590 | 40,228 | 42,561 | |||||||||||||||
Accrued compensation | 1,241 | 1,027 | 2,052 | 2,863 | 3,758 | |||||||||||||||
Tenant security deposits | 4,019 | 4,258 | 4,259 | 4,331 | 4,248 | |||||||||||||||
Other liabilities: derivative termination value | 9,836 | 3,825 | 5,985 | 4,847 | 7,268 | |||||||||||||||
Acquired unfavorable real estate leases, net | 9,921 | 13,273 | 12,467 | 11,679 | 10,908 | |||||||||||||||
Total liabilities | 921,082 | 993,273 | 975,853 | 968,948 | 956,743 | |||||||||||||||
Commitments and contingencies | ||||||||||||||||||||
Stockholders’ Equity: | ||||||||||||||||||||
Preferred stock | — | — | — | — | — | |||||||||||||||
Common stock | 10 | 10 | 10 | 10 | 10 | |||||||||||||||
Additional paid-in capital | 1,273,556 | 1,273,556 | 1,273,556 | 1,273,556 | 1,273,556 | |||||||||||||||
Accumulated other comprehensive income (loss) | (9,062 | ) | 976 | (3,359 | ) | (265 | ) | (4,248 | ) | |||||||||||
Accumulated distributions in excess of accumulated earnings | (296,174 | ) | (242,140 | ) | (257,463 | ) | (274,932 | ) | (289,671 | ) | ||||||||||
Total stockholders’ equity | 968,330 | 1,032,402 | 1,012,744 | 998,369 | 979,647 | |||||||||||||||
Total liabilities and stockholders’ equity | $ | 1,889,412 | $ | 2,025,675 | $ | 1,988,597 | $ | 1,967,317 | $ | 1,936,390 |
March 31, 2015
|
6 |
Condensed
Consolidated Statements of Cash Flows (in thousands) |
Three Months ended March 31, | Twelve Months ended December 31 | |||||||||||||||
2015 | 2014 | 2014 | 2013 | |||||||||||||
Cash flows from operating activities: | ||||||||||||||||
Net income | $ | 12,533 | $ | 3,573 | $ | 13,148 | $ | 19,827 | ||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||||
Depreciation and amortization expense | 23,189 | 24,797 | 97,916 | 81,267 | ||||||||||||
Amortization of above market lease | 6 | (11 | ) | 635 | (365 | ) | ||||||||||
Gain on sale of properties, less applicable income tax | (10,462 | ) | — | (940 | ) | (2,158 | ) | |||||||||
Equity in earnings (losses) from non-consolidated REITs | 322 | 484 | 1,760 | 1,358 | ||||||||||||
Increase in allowance for doubtful accounts | — | — | 275 | (1,250 | ) | |||||||||||
Changes in operating assets and liabilities: | ||||||||||||||||
Restricted cash | 686 | (45 | ) | (99 | ) | (68 | ) | |||||||||
Tenant rent receivables | 146 | (933 | ) | 94 | (2,103 | ) | ||||||||||
Straight-line rents | (69 | ) | (1,784 | ) | (4,737 | ) | (5,782 | ) | ||||||||
Lease acquisition costs | (3 | ) | (347 | ) | (440 | ) | (1,146 | ) | ||||||||
Prepaid expenses and other assets | 283 | 800 | 700 | (1,547 | ) | |||||||||||
Accounts payable and accrued expenses | (7,706 | ) | (7,257 | ) | 206 | 11,137 | ||||||||||
Accrued compensation | (2,517 | ) | (1,958 | ) | 773 | 445 | ||||||||||
Tenant security deposits | (230 | ) | 231 | 222 | 1,538 | |||||||||||
Payment of deferred leasing commissions | (1,116 | ) | (1,113 | ) | (6,347 | ) | (9,125 | ) | ||||||||
Net cash provided by operating activities | 15,062 | 16,437 | 103,166 | 92,028 | ||||||||||||
Cash flows from investing activities: | ||||||||||||||||
Property acquisitions | — | (454,447 | ) | |||||||||||||
Property improvements, fixtures and equipment | (4,298 | ) | (4,850 | ) | (18,370 | ) | (19,120 | ) | ||||||||
Office computers and furniture | (191 | ) | (355 | ) | ||||||||||||
Acquired real estate leases | — | (100,143 | ) | |||||||||||||
Investment in non-consolidated REITs | — | — | — | 4,858 | ||||||||||||
Distributions in excess of earnings from non-consolidated REITs | 27 | 27 | 107 | 108 | ||||||||||||
Investment in related party mortgage loan receivable | — | (2,170 | ) | (11,170 | ) | (8,200 | ) | |||||||||
Repayment of related party mortgage loan receivable | 17,275 | 2,350 | ||||||||||||||
Changes in deposits on real estate assets | (4,000 | ) | — | — | — | |||||||||||
Proceeds received on sales of real estate assets | 47,671 | — | 14,192 | 12,301 | ||||||||||||
Net cash provided by (used in) investing activities | 39,400 | (6,993 | ) | 1,843 | (562,648 | ) | ||||||||||
Cash flows from financing activities: | ||||||||||||||||
Distributions to stockholders | (19,036 | ) | (19,036 | ) | (76,142 | ) | (69,588 | ) | ||||||||
Proceeds (costs) from equity offering, net | — | — | — | 230,682 | ||||||||||||
Borrowings under bank note payable | 20,000 | — | 15,000 | 160,000 | ||||||||||||
Repayments of bank note payable | (48,000 | ) | 10,000 | (53,500 | ) | (70,250 | ) | |||||||||
Borrowing (repayment) of term loan payable, net | — | — | — | 220,000 | ||||||||||||
Deferred Financing Costs | — | — | (2,471 | ) | (1,868 | ) | ||||||||||
Net cash provided by (used in) financing activities | (47,036 | ) | (9,036 | ) | (117,113 | ) | 468,976 | |||||||||
Net decreases in cash and cash equivalents | 7,426 | 408 | (12,104 | ) | (1,644 | ) | ||||||||||
Cash and cash equivalents, beginning of period | 7,519 | 19,623 | 19,623 | 21,267 | ||||||||||||
Cash and cash equivalents, end of period | $ | 14,945 | $ | 20,031 | $ | 7,519 | $ | 19,623 |
March 31, 2015
|
7 |
Property
Net Operating Income (NOI)* with Same Store comparison (in thousands) |
Net Operating Income (NOI)* | ||||||||||||||||||||
(in thousands) | ||||||||||||||||||||
Rentable | ||||||||||||||||||||
Square Feet | Three Months Ended | Inc | % | |||||||||||||||||
Region | or RSF | 31-Mar-15 | 31-Mar-14 | (Dec) | Change | |||||||||||||||
East | 1,442 | $ | 4,832 | $ | 4,726 | $ | 106 | 2.2 | % | |||||||||||
MidWest | 1,529 | 3,469 | 4,586 | (1,117 | ) | -24.4 | % | |||||||||||||
South | 4,030 | 15,781 | 16,796 | (1,015 | ) | -6.0 | % | |||||||||||||
West | 2,309 | 8,216 | 9,388 | (1,172 | ) | -12.5 | % | |||||||||||||
Same Store | 9,310 | 32,298 | 35,496 | (3,198 | ) | -9.0 | % | |||||||||||||
Acquisitions | — | — | — | — | 0.0 | % | ||||||||||||||
Property NOI from the continuing portfolio | 9,310 | 32,298 | 35,496 | (3,198 | ) | -9.0 | % | |||||||||||||
Dispositions and asset held for sale | 726 | 1,077 | (351 | ) | -0.7 | % | ||||||||||||||
Property NOI | $ | 33,024 | $ | 36,573 | $ | (3,549 | ) | -9.7 | % | |||||||||||
Same Store | $ | 32,298 | $ | 35,496 | $ | (3,198 | ) | -9.0 | % | |||||||||||
Nonrecurring | ||||||||||||||||||||
Items in NOI (a) | 75 | 707 | (632 | ) | 1.6 | % | ||||||||||||||
Comparative | ||||||||||||||||||||
Same Store | $ | 32,223 | $ | 34,789 | $ | (2,566 | ) | -7.4 | % |
(a) | Nonrecurring Items in NOI include proceeds from bankruptcies, lease termination fees or other significant nonrecurring income or expenses, which may affect comparability. |
* | See page 11 for a reconciliation of Net Income to Property NOI and the Appendix for Definitions of Non-GAAP Measures beginning on page 27. Property NOI Excludes NOI from investments in and interest income from secured loans to non-consolidated REITs. |
March 31, 2015
|
8 |
FFO
& AFFO Reconciliation (in thousands, except per share amounts) |
For the Three | For the | |||||||||||||||||||||||
Months Ended | For the Three Months Ended | Year Ended | ||||||||||||||||||||||
31-Mar-15 | 31-Mar-14 | 30-Jun-14 | 30-Sep-14 | 31-Dec-14 | 31-Dec-14 | |||||||||||||||||||
Net income | $ | 12,533 | $ | 3,573 | $ | 3,713 | $ | 1,567 | $ | 4,295 | $ | 13,148 | ||||||||||||
Gain (loss) on sale, less applicable income tax | (10,462 | ) | — | (940 | ) | (940 | ) | |||||||||||||||||
GAAP income from non-consolidated REITs | 322 | 484 | 552 | 455 | 269 | 1,760 | ||||||||||||||||||
FFO from non-consolidated REITs | 601 | 419 | 351 | 508 | 652 | 1,930 | ||||||||||||||||||
Depreciation & amortization | 22,678 | 24,289 | 23,638 | 25,374 | 23,249 | 96,550 | ||||||||||||||||||
NAREIT FFO* | 25,672 | 28,765 | 28,254 | 27,904 | 27,525 | 112,448 | ||||||||||||||||||
Acquisition costs | — | 14 | — | — | — | 14 | ||||||||||||||||||
Funds From Operations (FFO)* | $ | 25,672 | $ | 28,779 | $ | 28,254 | $ | 27,904 | $ | 27,525 | $ | 112,462 | ||||||||||||
Adjusted Funds From Operations (AFFO)* | ||||||||||||||||||||||||
Funds From Operations (FFO)* | 25,672 | 28,779 | 28,254 | 27,904 | 27,525 | 112,462 | ||||||||||||||||||
Reverse FFO from non-consolidated REITs | (601 | ) | (419 | ) | (351 | ) | (508 | ) | (652 | ) | (1,930 | ) | ||||||||||||
Distributions from non-consolidated REITs | 27 | 27 | 27 | 27 | 26 | 107 | ||||||||||||||||||
Amortization of deferred financing costs | 517 | 499 | 499 | 498 | 506 | 2,002 | ||||||||||||||||||
Straight-line rent | (69 | ) | (1,783 | ) | (1,541 | ) | (714 | ) | (698 | ) | (4,736 | ) | ||||||||||||
Tenant improvements | (2,936 | ) | (1,132 | ) | (1,837 | ) | (2,612 | ) | (4,244 | ) | (9,825 | ) | ||||||||||||
Leasing commissions | (830 | ) | (1,080 | ) | (2,786 | ) | (577 | ) | (1,405 | ) | (5,848 | ) | ||||||||||||
Non-investment capex | (643 | ) | (364 | ) | (1,621 | ) | (700 | ) | (851 | ) | (3,536 | ) | ||||||||||||
Adjusted Funds From Operations (AFFO)* | $ | 21,137 | $ | 24,527 | $ | 20,644 | $ | 23,318 | $ | 20,207 | $ | 88,696 | ||||||||||||
Per Share Data: | ||||||||||||||||||||||||
EPS | $ | 0.13 | $ | 0.04 | $ | 0.04 | $ | 0.02 | $ | 0.04 | $ | 0.13 | ||||||||||||
FFO* | 0.26 | 0.29 | 0.28 | 0.28 | 0.27 | 1.12 | ||||||||||||||||||
AFFO* | 0.21 | 0.24 | 0.21 | 0.23 | 0.20 | 0.89 | ||||||||||||||||||
Weighted Average Shares (basic and diluted) | 100,187 | 100,187 | 100,187 | 100,187 | 100,187 | 100,187 |
* See the Appendix for Definitions of these Non-GAAP Measures beginning on page 27.
March 31, 2015
|
9 |
EBITDA
Reconciliation (in thousands, except ratio amounts) |
Three Months | ||||||||||||||||||||||||
Ended | For the Three Months Ended | Year Ended | ||||||||||||||||||||||
31-Mar-15 | 31-Mar-14 | 30-Jun-14 | 30-Sep-14 | 31-Dec-14 | 31-Dec-14 | |||||||||||||||||||
Net income | $ | 12,533 | $ | 3,573 | $ | 3,713 | $ | 1,567 | $ | 4,295 | $ | 13,148 | ||||||||||||
Interest expense | 6,187 | 7,176 | 6,891 | 6,883 | 6,483 | 27,433 | ||||||||||||||||||
Depreciation and amortization | 22,678 | 24,289 | 23,638 | 25,374 | 23,249 | 96,550 | ||||||||||||||||||
Income taxes | 161 | 137 | 117 | 149 | 95 | 498 | ||||||||||||||||||
EBITDA | 41,559 | 35,175 | 34,359 | 33,973 | 34,122 | 137,629 | ||||||||||||||||||
Excluding (gain) loss on sale, less applicable income tax | (10,462 | ) | — | — | — | (940 | ) | (940 | ) | |||||||||||||||
Adjusted EBITDA | $ | 31,097 | $ | 35,175 | $ | 34,359 | $ | 33,973 | $ | 33,182 | $ | 136,689 | ||||||||||||
Interest expense | $ | 6,187 | $ | 7,176 | $ | 6,891 | $ | 6,883 | $ | 6,483 | $ | 27,433 | ||||||||||||
Scheduled principal payments | — | — | — | — | — | — | ||||||||||||||||||
Interest and scheduled principal payments | $ | 6,187 | $ | 7,176 | $ | 6,891 | $ | 6,883 | $ | 6,483 | $ | 27,433 | ||||||||||||
Interest coverage ratio | 5.03 | 4.90 | 4.99 | 4.94 | 5.12 | 4.98 | ||||||||||||||||||
Debt service coverage ratio | 5.03 | 4.90 | 4.99 | 4.94 | 5.12 | 4.98 | ||||||||||||||||||
Debt | $ | 860,000 | $ | 936,500 | $ | 916,500 | $ | 905,000 | $ | 888,000 | ||||||||||||||
Adjusted EBITDA | 31,097 | 35,175 | 34,359 | 33,973 | 33,182 | |||||||||||||||||||
Annualized | 124,388 | 140,700 | 137,436 | 135,892 | 132,728 | |||||||||||||||||||
Debt-to-EBITDA | 6.9 | 6.7 | 6.7 | 6.7 | 6.7 |
* See the Appendix for Definitions of these Non-GAAP Measures beginning on page 27. Amounts in the EBITDA reconciliation do not reflect our proportionate share of interest expense, depreciation, amortization , income taxes, gains or losses on sales and debt from our investments in non-consolidated REITs , which are accounted for under the equity method.
March 31, 2015
|
10 |
Reconciliation of Net Income to Property NOI* (in thousands) |
Reconciliation to Net income | Three Months | |||||||
Ended | ||||||||
31-Mar-15 | 31-Mar-14 | |||||||
Net Income | $ | 12,533 | $ | 3,573 | ||||
Add (deduct): | ||||||||
Gain on sale of properties, less applicable income tax | (10,462 | ) | — | |||||
Management fee income | (643 | ) | (646 | ) | ||||
Depreciation and amortization | 22,672 | 24,300 | ||||||
Amortization of above/below market leases | 6 | (11 | ) | |||||
Selling, general and administrative | 3,691 | 3,272 | ||||||
Interest expense | 6,187 | 7,176 | ||||||
Interest income | (1,262 | ) | (1,410 | ) | ||||
Equity in earnings of nonconsolidated REITs | 322 | 484 | ||||||
Non-property specific items, net | (20 | ) | (165 | ) | ||||
Property NOI from the continuing portfolio | $ | 33,024 | $ | 36,573 | ||||
Dispositions and asset held for sale | — | — | ||||||
Property NOI | $ | 33,024 | $ | 36,573 |
* See the Appendix for Definition of Non-GAAP Measures beginning on page 27.
March 31, 2015
|
11 |
Debt Summary |
(a) | ||||||||||||||||||||||||
(dollars in thousands) | Maximum | Amount | Interest | Interest | ||||||||||||||||||||
Maturity | Amount | Drawn at | Rate | Rate at | Facility | |||||||||||||||||||
Date | of Loan | 31-Mar-15 | Components | 31-Mar-15 | Fee | |||||||||||||||||||
BAML Revolver | 29-Oct-18 | $ | 500,000 | $ | 240,000 | L+1.25% | 1.42% | 0.25% | ||||||||||||||||
BAML Term Loan | 27-Sep-17 | 400,000 | 400,000 | 0.75% + 1.45% | 2.20% | |||||||||||||||||||
BMO Term Loan | 26-Aug-20 | 220,000 | 220,000 | 2.32% + 1.65% | 3.97% | |||||||||||||||||||
$ | 1,120,000 | $ | 860,000 | 2.44% | ||||||||||||||||||||
(a) Interest rate excludes amortization of deferred financing costs and facility fees, see notes below
On October 29, 2014, we amended and restated our bank facility we call the BAML Credit Facility, which has a total of $900 million available and is comprised of a revolver that we can borrow up to $500 million on, which we call the BAML Revolver and a term loan for $400 million that we call the BAML Term Loan. On August 26, 2013, we entered into a term loan we call the BMO Term Loan and borrowed $220 million. Additional information about these loans are in the footnotes to our financial statements. Pricing is based on our credit rating for the BAML Revolver, BAML Term Loan and the BMO Term Loan. Our credit rating as of March 31, 2015 was Baa3 from Moody’s.
• | The BAML Revolver is priced based on our current credit rating at a spread of 1.25%, which was an interest rate of 1.42% as of March 31, 2015. The BAML Revolver is also subject to a facility fee based on our credit rating, which was 25 bps or approximately $1.25 million per year at March 31, 2015. |
• | The BAML Term Loan has LIBOR fixed at 0.75% for five years. At our current credit rating the spread for the BAML Term Loan is 1.45%, so our interest rate is 2.20%. |
• | The BMO Term Loan has fixed LIBOR at 2.32% for seven years. At our current credit rating the spread over LIBOR is 1.65%, so our interest rate is 3.97%. |
• | We incurred financing costs to close the BAML Revolver, BAML Term Loan and the credit facilities that preceded them. We also incurred financing costs to close the BMO Term Loan. These costs are deferred and amortized into interest expense during the terms of the loans. The annual run rate for amortization to interest expense from deferred financing costs is approximately $2.1 million. |
• | The BAML Revolver can be extended for 1 year at the Company’s option upon payment of fees and includes an accordion feature that allows for up to $250 million of additional borrowing capacity. The BMO Term Loan includes an accordion feature that allows for up to $50 million of additional borrowing capacity. The accordion features are subject to receipt of lender commitments and satisfaction of certain customary conditions. |
March 31, 2015
|
12 |
Capital Analysis (in thousands, except per share amounts) |
31-Mar-15 | 31-Mar-14 | 30-Jun-14 | 30-Sep-14 | 31-Dec-14 | ||||||||||||||||
Market Data: | ||||||||||||||||||||
Shares Outstanding | 100,187 | 100,187 | 100,187 | 100,187 | 100,187 | |||||||||||||||
Closing market price per share | $ | 12.82 | $ | 12.60 | $ | 12.58 | $ | 11.22 | $ | 12.27 | ||||||||||
Market capitalization | $ | 1,284,403 | $ | 1,262,361 | $ | 1,260,358 | $ | 1,124,103 | $ | 1,229,299 | ||||||||||
Total Debt | 860,000 | 936,500 | 916,500 | 905,000 | 888,000 | |||||||||||||||
Total Market Capitalization | $ | 2,144,403 | $ | 2,198,861 | $ | 2,176,858 | $ | 2,029,103 | $ | 2,117,299 | ||||||||||
Dividend Data: | ||||||||||||||||||||
Total dividends paid | $ | 19,036 | $ | 19,036 | $ | 19,035 | $ | 19,036 | $ | 19,036 | ||||||||||
Common dividend per share | $ | 0.19 | $ | 0.19 | $ | 0.19 | $ | 0.19 | $ | 0.19 | ||||||||||
Quarterly dividend as a % of FFO* | 73.1% | 65.5% | 67.9% | 67.9% | 70.4% | |||||||||||||||
Liquidity: | ||||||||||||||||||||
Cash and cash equivalents | $ | 14,946 | $ | 20,031 | $ | 18,455 | $ | 15,930 | $ | 7,519 | ||||||||||
Revolving credit facilities: | ||||||||||||||||||||
Gross potential available under the BAML Credit Facility | 900,000 | 900,000 | 900,000 | 900,000 | 900,000 | |||||||||||||||
Less: | ||||||||||||||||||||
Outstanding balance | (640,000 | ) | (716,500 | ) | (696,500 | ) | (685,000 | ) | (668,000 | ) | ||||||||||
Total Liquidity | $ | 274,946 | $ | 203,531 | $ | 221,955 | $ | 230,930 | $ | 239,519 |
*See page 9 for a reconciliation of Net Income to FFO and the Appendix for Definitions of Non-GAAP Measures beginning on page 27.
March 31, 2015
|
13 |
Portfolio Overview |
As of the Quarter Ended | |||||
31-Mar-15 | 31-Dec-14 | 30-Sep-14 | 30-Jun-14 | 31-Mar-14 | |
Owned portfolio of commercial real estate: | |||||
Number of properties | 36 | 38 | 39 | 39 | 39 |
Square feet | 9,310,131 | 9,580,057 | 9,690,361 | 9,686,215 | 9,686,055 |
Leased percentage | 90.4% | 92.8% | 93.3% | 94.1% | 94.5% |
Investments in non-consolidated | |||||
commercial real estate: | |||||
Number of properties | 2 | 2 | 2 | 2 | 2 |
Square feet | 1,396,071 | 1,395,780 | 1,395,500 | 1,395,500 | 1,395,500 |
Leased percentage | 70.1% | 71.3% | 71.0% | 65.5% | 64.0% |
Single Asset REITs (SARs) managed: | |||||
Number of properties | 7 | 8 | 9 | 11 | 12 |
Square feet | 1,488,003 | 1,897,801 | 2,036,572 | 2,687,775 | 3,067,199 |
Leased percentage | 73.4% | 84.7% | 86.6% | 89.1% | 87.4% |
Total owned (a) , investments | |||||
and managed properties: | |||||
Number of properties | 45 | 48 | 50 | 52 | 53 |
Square feet | 12,194,205 | 12,873,638 | 13,122,433 | 13,769,490 | 14,148,754 |
Leased percentage | 86.0% | 89.3% | 89.9% | 90.2% | 90.0% |
March 31, 2015
|
14 |
Owned Portfolio Overview |
Percent | Wtd Ave (a) | GAAP (b) | ||||
MSA / Property Name | City | State | Square Feet | Leased | Occupied | Rent |
East Region | ||||||
Baltimore | ||||||
East Baltimore | Baltimore | MD | 325,445 | 81.3% | 81.3% | $ 23.06 |
Washington, D.C. | ||||||
Meadow Point | Chantilly | VA | 138,537 | 92.6% | 92.6% | $ 28.43 |
Stonecroft | Chantilly | VA | 111,469 | 100.0% | 100.0% | $ 38.33 |
Loudoun Tech Center | Dulles | VA | 136,658 | 92.0% | 92.0% | $ 19.54 |
Richmond | ||||||
Innsbrook | Glen Allen | VA | 298,456 | 99.9% | 99.9% | $ 18.77 |
Charlotte | ||||||
Park Seneca | Charlotte | NC | 109,699 | 91.9% | 88.7% | $ 14.57 |
Forest Park | Charlotte | NC | 62,212 | 100.0% | 100.0% | $ 14.08 |
Raleigh-Durham | ||||||
Emperor Boulevard | Durham | NC | 259,531 | 100.0% | 100.0% | $ 35.86 |
East Region Total | 1,442,007 | 93.7% | 93.4% | $ 24.99 | ||
Midwest Region | ||||||
Chicago | ||||||
Northwest Point | Elk Grove Village | IL | 176,848 | 100.0% | 100.0% | $ 24.23 |
909 Davis Street | Evanston | IL | 195,245 | 97.9% | 97.9% | $ 36.17 |
Indianapolis | ||||||
River Crossing | Indianapolis | IN | 205,059 | 100.0% | 99.7% | $ 21.10 |
St. Louis | ||||||
Timberlake | Chesterfield | MO | 232,766 | 43.8% | 43.8% | $ 23.24 |
Timberlake East | Chesterfield | MO | 116,197 | 43.1% | 10.8% | $ 24.88 |
Lakeside Crossing | Maryland Heights | MO | 127,778 | 100.0% | 100.0% | $ 25.47 |
Minneapolis | ||||||
121 South 8th Street | Minneapolis | MN | 475,012 | 90.2% | 90.3% | $ 15.03 |
Midwest Region Total | 1,528,905 | 83.8% | 81.3% | $ 22.43 |
(a) Weighted Occupied Percentage for the three months ended March 31, 2015
(b) Weighted Average GAAP Rent per Occupied Square Foot
March 31, 2015
|
15 |
Owned Portfolio Overview |
Percent | Wtd Ave (a) | GAAP (b) | ||||
MSA / Property Name | City | State | Square Feet | Leased | Occupied | Rent |
South Region | ||||||
Dallas-Fort Worth | ||||||
Legacy Tennyson Center | Plano | TX | 202,600 | 100.0% | 100.0% | $ 17.59 |
One Legacy Circle | Plano | TX | 214,110 | 100.0% | 100.0% | $ 33.46 |
Addison Circle | Addison | TX | 294,053 | 86.2% | 85.0% | $ 24.04 |
Collins Crossing | Richardson | TX | 300,472 | 99.5% | 99.5% | $ 24.20 |
Liberty Plaza | Addison | TX | 218,934 | 90.7% | 90.0% | $ 20.88 |
Houston | ||||||
Park Ten | Houston | TX | 157,460 | 63.1% | 63.1% | $ 30.89 |
Eldridge Green | Houston | TX | 248,399 | 100.0% | 100.0% | $ 31.08 |
Park Ten Phase II | Houston | TX | 156,746 | 100.0% | 100.0% | $ 31.52 |
Westchase I & II | Houston | TX | 629,025 | 97.1% | 96.7% | $ 33.44 |
Miami-Ft. Lauderdale-West Palm Beach | ||||||
Blue Lagoon Drive | Miami | FL | 212,619 | 100.0% | 100.0% | $ 23.44 |
Atlanta | ||||||
One Overton Place | Atlanta | GA | 387,267 | 84.4% | 77.4% | $ 24.89 |
One Ravinia | Atlanta | GA | 386,603 | 95.2% | 95.2% | $ 22.88 |
999 Peachtree | Houston | TX | 621,946 | 98.2% | 96.1% | $ 28.89 |
South Region Total | 4,030,234 | 94.3% | 93.1% | $ 27.25 | ||
West Region | ||||||
Seattle | ||||||
Federal Way | Federal Way | WA | 117,010 | 57.1% | 57.1% | $ 18.76 |
San Francisco-San Jose-Oakland | ||||||
Hillview Center | Milpitas | CA | 36,288 | 100.0% | 100.0% | $ 16.08 |
Montague Business Center | San Jose | CA | 145,951 | 81.1% | 81.1% | $ 16.39 |
Denver | ||||||
380 Interlocken | Broomfield | CO | 240,185 | 95.8% | 95.8% | $ 29.79 |
1999 Broadway | Denver | CO | 676,379 | 87.7% | 87.1% | $ 32.57 |
Greenwood Plaza | Englewood | CO | 196,236 | 100.0% | 100.0% | $ 24.27 |
390 Interlocken | Broomfield | CO | 241,516 | 72.3% | 71.2% | $ 29.50 |
1001 17th Street | Denver | CO | 655,420 | 86.1% | 81.1% | $ 35.84 |
West Region Total | 2,308,985 | 85.7% | 84.0% | $ 30.25 | ||
Total Owned | 9,310,131 | 90.4% | 89.0% | $ 26.86 |
(a) Weighted Occupied Percentage for the three months ended March 31, 2015
(b) Weighted Average GAAP Rent per Occupied Square Foot
March 31, 2015
|
16 |
Managed Portfolio Overview |
MSA / Property Name | City | State | Square Feet |
Southeast Region | |||
Columbia | |||
1441 Main Street | Columbia | SC | 264,857 |
Atlanta | |||
Satellite Place | Duluth | GA | 134,785 |
Southeast Region Total | 399,642 | ||
Southwest Region | |||
Houston | |||
Energy Tower I | Houston | TX | 325,797 |
Denver | |||
385 Interlocken | Broomfield | CO | 296,868 |
Southwest Region Total | 622,665 | ||
Midwest Region | |||
Chicago | |||
East Wacker (a) | Chicago | IL | 861,000 |
Indianapolis | |||
Monument Circle | Indianapolis | IN | 213,760 |
St. Louis | |||
Lakeside Crossing II | Maryland Heights | MO | 116,000 |
Kansas City | |||
Grand Boulevard (b) | Kansas City | MO | 535,071 |
Cincinnati | |||
Centre Pointe V | West Chester | OH | 135,936 |
Midwest Region Total | 1,861,767 | ||
Total Managed | 2,884,074 | ||
Total Owned & Managed | 12,194,205 |
(a) FSP has a Preferred Share Interest of 43.7% in the entity that owns this property.
(b) FSP has a Preferred Share Interest of 27.0% in the entity that owns this property.
March 31, 2015
|
17 |
Tenants By Industry (By Square Feet) |
March 31, 2015
|
18 |
20 Largest Tenants with Annualized Rent and Remaining Term (Owned Portfolio) |
% of | % of | ||||||
Remaining | Aggregate | Aggregate | Annualized | Aggregate | |||
Tenant | Number of | Lease Term | Leased | Leased | Rent | Leased | |
Name | Leases | in Months | Square Feet | Square Feet | (in 000's) | Annualized Rent | |
1 | TCF National Bank | 2 | 9 | 263,111 | 2.8% | $ 2,997,573 | 1.4% |
2 | Quintiles Transnational Corp | 1 | 48 | 259,531 | 2.8% | 9,067,770 | 4.1% |
3 | CITGO Petroleum Corporation | 1 | 83 | 248,399 | 2.7% | 7,904,056 | 3.6% |
4 | Sutherland Asbill Brennan LLP (a) | 1 | 61 | 243,839 | 2.6% | 7,210,826 | 3.3% |
5 | Newfield Exploration Company | 1 | 83 | 234,495 | 2.5% | 8,413,433 | 3.8% |
6 | US Government (b) | 5 | 5, 15, 38, 52, 66 | 221,270 | 2.4% | 7,147,549 | 3.3% |
7 | Burger King Corporation | 1 | 42 | 212,619 | 2.3% | 5,134,749 | 2.3% |
8 | Denbury Onshore, LLC | 2 | 52 | 202,600 | 2.2% | 3,510,042 | 1.6% |
9 | SunTrust Bank (c) | 2 | 19, 78 | 182,888 | 2.0% | 3,694,751 | 1.7% |
10 | Citicorp Credit Services, Inc | 1 | 21 | 176,848 | 1.9% | 4,612,196 | 2.1% |
11 | T-Mobile South, LLC dba T-Mobile | 1 | 47 | 151,792 | 1.6% | 3,620,103 | 1.6% |
12 | Houghton Mifflin Harcourt Publishing Company | 1 | 24 | 150,050 | 1.6% | 6,142,199 | 2.8% |
13 | Petrobras America, Inc. | 1 | 56 | 144,813 | 1.6% | 5,337,807 | 2.4% |
14 | Murphy Exploration & Production Company | 1 | 25 | 144,677 | 1.5% | 4,520,645 | 2.1% |
15 | Argo Data Resource Corporation | 1 | 101 | 140,246 | 1.5% | 3,718,923 | 1.7% |
16 | Monsanto Company | 1 | 58 | 127,778 | 1.4% | 3,019,394 | 1.4% |
17 | Federal National Mortgage Association | 1 | 18 | 123,144 | 1.3% | 2,695,622 | 1.2% |
18 | Vail Corp d/b/a Vail Resorts (d) | 1 | 48, 96 | 122,232 | 1.3% | 3,471,917 | 1.6% |
19 | Kaiser Foundation Health Plan | 1 | 110 | 120,979 | 1.3% | 2,942,751 | 1.3% |
20 | Giesecke & Devrient America | 1 | 116 | 112,110 | 1.2% | 1,892,417 | 0.9% |
Total | 3,583,421 | 38.5% | $ 97,054,721 | 44.2% |
(a) | Includes 222,422 expiring in 2020 and 21,417 expiring April 30, 2015. |
(b) | Includes 180,444 and 27,398 square feet which expire in 2018 & 2017, respectively. The remaining 13,428 square feet expire between 2015 - 2020. |
(c) | Includes 55,388 square feet which expires October 31, 2016. The remaining 127,500 square feet expires September 30, 2021. |
(d) | Includes 38,293 square feet which expires March 31, 2019. The remaining 83,939 square feet expires March 31, 2023. |
March 31, 2015
|
19 |
Leasing
Activity (Owned Portfolio) |
Year | Year | |||||||
Three Months Ended | Ended | Ended | ||||||
Leasing Activity | 31-Mar-15 | 31-Mar-14 | 31-Dec-14 | 31-Dec-13 | ||||
(in Square Feet - SF) | ||||||||
New leasing | 73,000 | 15,000 | 149,000 | 267,000 | ||||
Renewals | 135,000 | 165,000 | 635,000 | 645,000 | ||||
208,000 | 180,000 | 784,000 | 912,000 | |||||
Other information per SF | ||||||||
(Activity on a year-to-date basis) | ||||||||
GAAP Rents on leasing | $ 24.59 | $ 23.95 | $ 26.89 | $ 23.33 | ||||
Weighted average lease term | 4.0 Years | 6.75 Years | 6.25 Years | 7.2 Years | ||||
Increase over average GAAP rents in prior year | 10.5% | 11.9% | 11.8% | 8.0% | ||||
Average free rent | 2 Months | 3 Months | 3 Months | 3 Months | ||||
Tenant Improvements | $ 10.71 | $ 13.61 | $ 16.40 | $ 18.25 | ||||
Leasing Costs | $ 4.31 | $ 8.30 | $ 7.66 | $ 8.48 |
March 31, 2015
|
20 |
Lease
Expirations by Square Feet (Owned Portfolio) |
Year | Total Square Feet |
% of Square Feet | ||
2015 | 349,621 | 3.8% | ||
2016 | 1,005,893 | 10.8% | ||
2017 | 1,039,874 | 11.2% | ||
2018 | 934,962 | 10.0% | ||
2019 | 1,566,112 | 16.8% | ||
2020 | 825,545 | 8.9% | ||
2021 | 758,994 | 8.2% | ||
2022 | 924,619 | 9.9% | ||
2023 | 367,128 | 3.9% | ||
2024 | 243,343 | 2.6% | ||
2025 | 286,792 | 3.1% | ||
2026 | 109,927 | 1.2% | ||
Vacant | 897,321 | 9.6% | ||
Total | 9,310,131 | 100.0% |
March 31, 2015
|
21 |
Lease
Expirations with Annualized Rent per Square Foot (Owned Portfolio) |
Rentable | Annualized | Percentage | |||||||||||
Number of | Square | Rent | of Total | ||||||||||
Year of | Leases | Footage | Annualized | Per Square | Annualized | ||||||||
Lease | Expiring | Subject to | Rent Under | Foot Under | Rent Under | ||||||||
Expiration | Within the | Expiring | Expiring | Expiring | Expiring | Cumulative | |||||||
December 31, | Year | Leases | Leases (a) | Leases | Leases | Total | |||||||
2015 | 90 | (b) | 349,621 | $ 9,521,008 | $ 27.23 | 4.33% | 4.33% | ||||||
2016 | 77 | 1,005,893 | 21,753,543 | 21.63 | 9.90% | 14.23% | |||||||
2017 | 81 | 1,039,874 | 30,383,530 | 29.22 | 13.83% | 28.06% | |||||||
2018 | 64 | 934,962 | 27,191,586 | 29.08 | 12.38% | 40.44% | |||||||
2019 | 62 | 1,566,112 | 42,318,668 | 27.02 | 19.26% | 59.70% | |||||||
2020 | 42 | 825,545 | 21,102,844 | 25.56 | 9.60% | 69.30% | |||||||
2021 | 18 | 758,994 | 18,278,842 | 24.08 | 8.32% | 77.62% | |||||||
2022 | 19 | 924,619 | 26,550,474 | 28.72 | 12.08% | 89.70% | |||||||
2023 and thereafter | 31 | 1,007,190 | (c) | 22,624,317 | 22.46 | 10.30% | 100.00% | ||||||
484 | 8,412,810 | 219,724,814 | $ 26.12 | 100.00% | |||||||||
Vacancies as of 3/31/15 | 897,321 | ||||||||||||
Total Portfolio Square Footage | 9,310,131 |
(a) | Annualized rent represents the monthly rent, including tenant reimbursements, for each lease in effect at March 31, 2015 mulitplied by 12. Tenant reimbursements generally include payment of real estate taxes, operating expenses and common area maintenance and utility charges. |
(b) | Includes 28 leases that are month-to-month. |
(c) | Includes 53,055 square feet that are non-revenue producing building amenities. |
March 31, 2015
|
22 |
Capital Expenditures (in thousands) |
Capital Expenditures
Owned Portfolio
(in thousands)
31-Mar-15 | ||||||||||||||||||||
Tenant improvements | $ | 2,936 | ||||||||||||||||||
Deferred leasing costs | 830 | |||||||||||||||||||
Non-investment capex | 643 | |||||||||||||||||||
Recurring capital expenditures | 4,409 | |||||||||||||||||||
1st generation leasing | 1,934 | |||||||||||||||||||
Investment capex | 230 | |||||||||||||||||||
Total capital expenditures | $ | 6,573 |
(in thousands) | For the Three Months Ended | Year ended | ||||||||||||||||||
31-Mar-14 | 30-Jun-14 | 30-Sep-14 | 31-Dec-14 | 31-Dec-14 | ||||||||||||||||
Tenant improvements | $ | 1,132 | $ | 1,837 | $ | 2,612 | $ | 4,244 | $ | 9,825 | ||||||||||
Deferred leasing costs | 1,080 | 2,786 | 577 | 1,405 | 5,848 | |||||||||||||||
Non-investment capex | 364 | 1,621 | 700 | 851 | 3,536 | |||||||||||||||
Recurring capital expenditures | 2,576 | 6,244 | 3,889 | 6,500 | 19,209 | |||||||||||||||
1st generation leasing | 33 | 9 | 394 | 580 | 1,016 | |||||||||||||||
Investment capex | 755 | 580 | 244 | 516 | 2,095 | |||||||||||||||
Total capital expenditures | $ | 3,364 | $ | 6,833 | $ | 4,527 | $ | 7,596 | $ | 22,320 |
March 31, 2015
|
23 |
Transaction Activity |
Recent Acquisitions: | Purchase Price | ||||||||
City | State | Square Feet | Date Acquired | (in thousands) | |||||
2015 | |||||||||
Two Ravinia | Atlanta | GA | 442,130 | 4/8/15 | $ 78,000 | ||||
2013 | |||||||||
1999 Broadway | Denver | CO | 673,793 | 5/22/13 | $ 183,000 | ||||
999 Peachtree | Atlanta | GA | 621,946 | 7/1/13 | 157,900 | ||||
1001 17th Street | Denver | CO | 655,420 | 8/28/13 | 217,000 | ||||
2012 | |||||||||
One Ravinia | Atlanta | GA | 386,603 | 7/31/12 | $ 52,750 | ||||
Westchase | Houston | TX | 629,025 | 11/1/12 | 154,750 | ||||
Recent Dispositions: | |||||||||
Gross Sales | Gain | ||||||||
City | State | Square Feet | Date Sold | Proceeds | on Sale | ||||
2015 | |||||||||
Willow Bend | Plano | TX | 117,050 | 2/23/15 | $ 20,750 | $ 1,462 | |||
Eden Bluff | Eden Prairie | MN | 153,028 | 3/31/15 | 28,000 | 9,000 | |||
2014 | |||||||||
Centennial | Colorado Springs | CO | 110,405 | 12/3/14 | $ 15,500 | $ 940 | |||
2013 | |||||||||
East Renner Road | Richardson | TX | 122,300 | 10/29/13 | $ 12,475 | $ 2,169 | |||
March 31, 2015
|
24 |
Loan Portfolio of Secured Real Estate |
(dollars in thousands) | Maximum | Amount | Interest | |||||
Maturity | Amount | Drawn at | Interest | Draw | Rate at | |||
Sponsored REIT | Location | Date | of Loan | 31-Mar-15 | Rate (1) | Fee (2) | 31-Mar-15 | |
Secured revolving lines of credit | ||||||||
FSP Satellite Place Corp. | Duluth, GA | 31-Mar-17 | $ 5,500 | $ 5,500 | L+4.4% | 0.5% | 4.57% | |
FSP 1441 Main Street Corp. | Columbia, SC | 31-Mar-16 | 10,800 | 9,000 | L+4.4% | 0.5% | 4.57% | |
FSP Energy Tower I Corp. | Houston, TX | 3-Jul-15 | 20,000 | 8,600 | L+5.0% | 0.5% | 5.17% | |
Secured construction loan | ||||||||
FSP 385 Interlocken | ||||||||
Development Corp. | Broomfield, CO | 30-Apr-16 | 42,000 | 37,541 | L+4.4% | n/a | 4.57% | |
Mortgage loan secured by property | ||||||||
FSP Energy Tower I Corp. | Houston, TX | 3-Jul-15 | 33,000 | 33,000 | 6.41% | n/a | 6.41% | |
$ 111,300 | $ 93,641 |
(1) The interest rate is 30-day LIBOR rate plus the additional rate indicated, otherwise a fixed rate.
(2) The draw fee is a percentage of each new advance, and is paid at the time of each new draw.
March 31, 2015
|
25 |
Net Asset Value Components |
(in thousands except per share data) | |
As of | |
31-Mar-15 | |
Total Market Capitalization Values | |
Shares outstanding | 100,187.4 |
Closing price, December 31st | $ 12.82 |
Market capitalization | $ 1,284,403 |
Debt | 860,000 |
Total Market Capitalization | 2,144,403 |
3 Months | |
Ended | |
NOI Components | 31-Mar-15 |
Same Store NOI (1) | $ 32,223 |
Acquisitions (1) (2) | - |
Property NOI (1) | 32,223 |
Full quarter adjustment (3) | - |
Stabilized portfolio | $ 32,223 |
Financial Statement Reconciliation: | |
Rental Revenue | $ 59,013 |
Rental operating expenses | (15,356) |
Real estate taxes and insurance | (10,048) |
NOI on assets sold during the quarter | (726) |
Taxes (4) | (161) |
Management fees & other (5) | (499) |
Property NOI (1) | $ 32,223 |
Assets: | |
Loans outstanding on secured RE | $ 93,641 |
Investments in SARs (book basis) | 78,228 |
Straight-line rent receivable | 45,498 |
Asset held for sale | - |
Cash and cash equivalents | 14,945 |
Restricted cash | 56 |
Tenant rent receivables | 4,587 |
Prepaid expenses | 4,709 |
Office computers and furniture | 588 |
Other assets: | |
Deferred financing costs, net | 7,637 |
Other assets: Derivative Market Value | 774 |
Phoenix Tower Liquidating Trust (6) | 4 |
Other assets | 1,176 |
$ 251,843 | |
- | |
Liabilities: | |
Debt | $ 860,000 |
Accounts payable & accrued expenses | 37,306 |
Tenant security deposits | 4,019 |
Other liabilities: derivative liability | 9,836 |
$ 911,161 |
Other information:
Leased SF to be FFO producing | |
During 2015 (in 000's) | 132 |
Straight-line rental revenue current quarter | $ 69 |
Management fee income current quarter | $ 211 |
Interest income from secured loans | 1,262 |
Management fees and interest income from loans | $ 1,473 |
FFO from non-consolidated REITs - Q4 2014 (7): | |
East Wacker | $ 487 |
Grand Boulevard | 165 |
Total | $ 652 |
Footnotes to the components
(1) | See pages 11 & 28 for definitions and reconciliations |
(2) | Includes NOI from 3 acquisitions 2013 |
(3) | Adjustment to reflect property NOI for a full quarter in the quarter acquired, if necessary |
(4) | HB3 Tax in Texas is classified as an income tax, though we treat it as a real estate tax in Property NOI |
(5) | Management & other fees are eliminated in consolidation but included on Property NOI |
(6) | Expected liquidating distribution from sale of equity interest (Collection within 2 years, subject to some expenses) |
(7) | We report FFO from non-consolidated REITs for the previous quarter as their financial statements are not yet complete for the current quarter. |
March 31, 2015
|
26 |
Appendix: Non-GAAP Financial Measure Definitions |
Definition of Funds From Operations (“FFO”)
The Company evaluates performance based on Funds From Operations, which we refer to as FFO, as management believes that FFO represents the most accurate measure of activity and is the basis for distributions paid to equity holders. The Company defines FFO as net income (computed in accordance with GAAP), excluding gains (or losses) from sales of property and acquisition costs of newly acquired properties that are not capitalized, plus depreciation and amortization, including amortization of acquired above and below market lease intangibles and impairment charges on properties or investments in non-consolidated REITs, and after adjustments to exclude equity in income or losses from, and, to include the proportionate share of FFO from, non-consolidated REITs.
FFO should not be considered as an alternative to net income (determined in accordance with GAAP), nor as an indicator of the Company’s financial performance, nor as an alternative to cash flows from operating activities (determined in accordance with GAAP), nor as a measure of the Company’s liquidity, nor is it necessarily indicative of sufficient cash flow to fund all of the Company’s needs.
Other real estate companies and the National Association of Real Estate Investment Trusts, or NAREIT, may define this term in a different manner. We have included the NAREIT FFO definition in our table and note that other REITs may not define FFO in accordance with the current NAREIT definition or may interpret the current NAREIT definition differently than we do.
We believe that in order to facilitate a clear understanding of the results of the Company, FFO should be examined in connection with net income and cash flows from operating, investing and financing activities in the consolidated financial statements.
March 31, 2015
|
27 |
Appendix: Non-GAAP Financial Measure Definitions |
Definition of Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA) and Adjusted EBITDA
EBITDA is defined as net income plus interest expense, income tax expense and depreciation and amortization expense. Adjusted EBITDA is defined as EBITDA excluding gains and losses on sales of properties or shares of equity investments or provisions for losses on assets held for sale. EBITDA and Adjusted EBITDA are not intended to represent cash flow for the period, are not presented as an alternative to operating income as an indicator of operating performance, should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP and are not indicative of operating income or cash provided by operating activities as determined under GAAP. EBITDA and Adjusted EBITDA are presented solely as a supplemental disclosure with respect to liquidity because the Company believes it provides useful information regarding the Company's ability to service or incur debt. Because all companies do not calculate EBITDA or Adjusted EBITDA the same way, this presentation may not be comparable to similarly titled measures of other companies. The Company believes that net income is the financial measure calculated and presented in accordance with GAAP that is most directly comparable to EBITDA and Adjusted EBITDA.
Definition of Property Net Operating Income (Property NOI)
The Company provides property performance based on Net Operating Income, which we refer to as NOI. Management believes that investors are interested in this information. NOI is a non-GAAP financial measure that the Company defines as net income (the most directly comparable GAAP financial measure) plus selling, general and administrative expenses, depreciation and amortization, including amortization of acquired above and below market lease intangibles and impairment charges, interest expense, less equity in earnings of nonconsolidated REITs, interest income, management fee income, gains or losses on the sale of assets and excludes non-property specific income and expenses. The information presented includes footnotes and the data is shown by region with properties owned in both periods, which we call Same Store. The Comparative Same Store results include properties held for the periods presented and exclude significant nonrecurring income such as bankruptcy settlements and lease termination fees. NOI, as defined by the Company, may not be comparable to NOI reported by other REITs that define NOI differently. NOI should not be considered an alternative to net income as an indication of our performance or to cash flows as a measure of the Company's liquidity or its ability to make distributions.
March 31, 2015
|
28 |
Appendix: Non-GAAP Financial Measure Definitions |
Definition of Adjusted Funds From Operations (AFFO)
The Company defines AFFO as the sum of (1) FFO; (2) excluding our proportionate share of FFO and including distributions received, from non-consolidated REITs; (3) excluding the effect of straight-line rent; (4) plus deferred financing costs, (5) less recurring capital expenditures that are generally for (a) maintenance of properties, which we call non-investment capex or are second generation capital expenditures. Second generation costs include re-tenanting space after a tenant vacates, which include tenant improvements and leasing commissions.
We exclude development/redevelopment activities, capital expenditures planned at acquisition and costs to reposition a property. We also exclude first generation leasing costs, which are generally to fill vacant space in properties we acquire or were planned for at acquisition.
AFFO should not be considered as an alternative to net income (determined in accordance with GAAP), as an indicator of the Company’s financial performance, nor as an alternative to cash flows from operating activities (determined in accordance with GAAP), nor as a measure of the Company’s liquidity, nor is it necessarily indicative of sufficient cash flow to fund all of the Company’s needs. Other real estate companies may define this term in a different manner. We believe that in order to facilitate a clear understanding of the results of the Company, AFFO should be examined in connection with net income and cash flows from operating, investing and financing activities in the consolidated financial statements.
March 31, 2015
|
29 |
Investor Relations Contact
(877) 686-9496 InvestorRelations@franklinstreetproperties.com |
Franklin Street Properties Corp. ● 401 Edgewater Place ● Wakefield, MA 01880 ● (781) 557-1300
www.franklinstreetproperties.com
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