Franklin Street Properties Corp. Announces Third Quarter 2013 Results

Business Wire

WAKEFIELD, Mass.--(BUSINESS WIRE)--

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 $27.1 million or $0.27 per share for the third quarter ended September 30, 2013. Net income was $4.1 million or $0.04 per share for the third quarter ended September 30, 2013.

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 September 30,   Nine Months Ended September 30,
(in 000's except per share data)   2013     2012     Increase (Decrease)     2013     2012   Increase (Decrease)
 
Net Income $ 4,094   $ (8,998 )   $ 13,092 $ 13,236   $ 2,174   $ 11,062
 
FFO $ 27,134   $ 19,913     $ 7,221 $ 69,892   $ 58,526   $ 11,366
Per Share Data:
EPS $ 0.04 $ (0.11 ) $ 0.15 $ 0.14 $ 0.03 $ 0.11
FFO $ 0.27 $ 0.24 $ 0.03 $ 0.76 $ 0.71 $ 0.05
 

Weighted average

shares (diluted)

  100,187     82,937       17,250   91,720     82,937     8,783

Comparing results for the third quarter of 2013 to the same period in 2012, FFO increased $7.2 million or $0.03 per share. The FFO increase was primarily from higher property income due to five acquisitions completed since July 2012 and improved occupancy in our portfolio, which was partially offset by decreased interest income as a result of repayment of secured real estate loans and by higher G&A. Net Income and EPS was $4.1 million or $0.04 per share for the third quarter of 2013 compared to a net loss of $9.0 million or $0.11 per share for the third quarter of 2012.

Comparing results for the nine months ended September 30, 2013 to 2012, FFO increased $11.4 million or $0.05 per share. The FFO increase was primarily from higher property income due to five acquisitions completed since July 2012 and improved occupancy in our portfolio, which was partially offset by decreased interest income as a result of repayment of secured real estate loans and by higher G&A. Net Income and EPS was $13.2 million and $0.14 per share, respectively, for the nine months ended September 30, 2013 compared to net income of $2.2 million and $0.03 per share for the same period in 2012.

George J. Carter, President and CEO, commented as follows:

“For the third quarter of 2013, FSP's profits as represented by FFO rose approximately $5.0 million to $27.1 million or $0.27 per share compared to $22.1 million or $0.24 per share in the second quarter of 2013. Dividend distributions declared for the third quarter of 2013, which are payable on November 14, 2013, will be approximately $19.1 million or $0.19 per share.

Our directly-owned real estate portfolio of 40 properties, totaling 9,807,339 square feet, was approximately 93.8% leased as of September 30, 2013, a decrease from 94.4% as of June 30, 2013. The drop in leased percentage for the third quarter was primarily attributable to the acquisition of a 655,420 square foot office building in Denver Colorado that was 88.5% leased at the time of acquisition. We believe this property offers an excellent opportunity to increase occupancy and rental income stream within a vibrant and growing Denver CBD office market, creating incremental value for the company. Our portfolio has a relatively modest lease expiration schedule for the balance of 2013 and 2014 and we continue to proactively address future years scheduled expirations where it is financially advantageous to do early lease renewals.

Growth in FSP's real estate asset base and balance sheet continued in the third quarter of 2013. On July 1, 2013, we acquired a 621,946 rentable square foot office building at 999 Peachtree Street in the mid-town submarket of Atlanta Georgia, for $157.9 million. On August 28, 2013, we acquired a 655,420 rentable square foot office building at 1001 17th Street in Denver Colorado's central business district, for $217.0 million. Both Atlanta Georgia and Denver Colorado are core markets for FSP, and we believe both markets have strong, sustainable, macro-economic growth drivers that offer the potential to drive leasing demand and rental increases above average levels that are likely to be achieved for the broader U.S. office markets. In addition, on August 26, 2013 we closed a new $220 million, seven year, unsecured term loan with certain members of our bank group to lock in attractive long-term interest rates, and improve the financial flexibility of our balance sheet as we continue to pursue potential opportunities.

As the fourth quarter of 2013 begins, our property portfolio is well stabilized, with a balanced lease expiration schedule. Most of our largest property markets are now experiencing positive trends in both occupancies and rental rates. Our simple and flexible balance sheet provides access to a variety of capital sources to support our ongoing growth objectives. As we approach 2014, we continue to see numerous potential opportunities for consideration. We are very optimistic about our future growth potential.”

Dividend Announcement

On October 11, 2013, the Company announced that its Board of Directors declared a regular quarterly dividend for the three months ended September 30, 2013 of $0.19 per share of common stock payable on November 14, 2013 to stockholders of record on October 25, 2013.

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 September 30, 2013. 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.

Earnings Call

A conference call is scheduled for October 30, 2013 at 10:00 a.m. (ET) to discuss the third quarter 2013 results. To access the call, please dial 1-888-317-6016. Internationally, the call may be accessed by dialing 1-412-317-6016. 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.

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. 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   Nine Months Ended
September 30, September 30,
(In thousands, except per share amounts)   2013     2012     2013     2012  
 
Net income (loss) $ 4,094 $ (8,998 ) $ 13,236 $ 2,174
Provision for loss on property held for sale - 14,300 - 14,300
GAAP (income) loss from non-consolidated REITs 431 (176 ) 814 (1,061 )
Distributions from non-consolidated REITs 27 907 81 2,733
Depreciation & amortization   22,176     13,779     55,205     40,279  
NAREIT FFO 26,728 19,812 69,336 58,425
Acquisition costs of new properties   406     101     556     101  
Funds From Operations (FFO) $ 27,134   $ 19,913   $ 69,892   $ 58,526  
 
Per Share Data
EPS $ 0.04 $ (0.11 ) $ 0.14 $ 0.03
FFO $ 0.27 $ 0.24 $ 0.76 $ 0.71
 
Weighted average shares (basic and diluted)   100,187     82,937     91,720     82,937  

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.

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.

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, 2012, 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
 

Franklin Street Properties Corp. Financial Results

Supplementary Schedule A

Condensed Consolidated Income (Loss) Statements

(Unaudited)

  For the

Three Months Ended

September 30,

  For the

Nine Months Ended

September 30,

(in thousands, except per share amounts)   2013     2012       2013     2012  
 
Revenue:
Rental $ 56,760 $ 37,944 $ 145,618 $ 109,207
Related party revenue:
Management fees and interest income from loans 1,665 3,485 4,929 9,146
Other   21     39       64     112  
Total revenue   58,446     41,468       150,611     118,465  
 
Expenses:
Real estate operating expenses 13,991 9,642 35,877 26,938
Real estate taxes and insurance 8,801 5,761 22,704 16,946
Depreciation and amortization 22,163 13,367 54,863 39,031
Selling, general and administrative 3,477 3,141 9,213 7,454
Interest   5,474     4,187       13,856     11,901  
 
Total expenses   53,906     36,098       136,513     102,270  
 
Income before interest income, equity in earnings (losses) of
non-consolidated REITs and taxes 4,540 5,370 14,098 16,195
Interest income 5 5 10 17
Equity in earnings (losses) of non-consolidated REITs   (431 )   176       (814 )   1,061  
 
Income before taxes on income 4,114 5,551 13,294 17,273
Taxes on income   118     80       352     236  
 
Income from continuing operations   3,996     5,471       12,942     17,037  
 
Discontinued operations:
Income (loss) from discontinued operations, net of income tax 98 (169 ) 294 (563 )
Provision for loss on property held for sale of $14,300 less applicable income tax   -     (14,300 )     -     (14,300 )
Total discontinued operations   98     (14,469 )     294     (14,863 )
 
Net income (loss) $ 4,094   $ (8,998 )   $ 13,236   $ 2,174  
 
Weighted average number of shares outstanding,
basic and diluted   100,187     82,937       91,720     82,937  
 
Earnings per share, basic and diluted, attributable to:
Continuing operations $ 0.04 $ 0.07 $ 0.14 $ 0.21
Discontinued operations   -     (0.18 )     -     (0.18 )
Net income (loss) per share, basic and diluted $ 0.04   $ (0.11 )   $ 0.14   $ 0.03  

Franklin Street Properties Corp. Financial Results

Supplementary Schedule B

Condensed Consolidated Balance Sheets

(Unaudited)

 
September 30,   December 31,
(in thousands, except share and par value amounts)   2013       2012  
Assets:
Real estate assets:
Land $ 185,479 $ 141,545
Buildings and improvements 1,599,519 1,172,928
Fixtures and equipment   985       904  
1,785,983 1,315,377
Less accumulated depreciation   210,293       180,589  
Real estate assets, net 1,575,690 1,134,788
Acquired real estate leases, less accumulated amortization
of $60,589 and $39,203, respectively 194,893 108,203
Investment in non-consolidated REITs 81,065 81,960
Asset held for sale 10,143 10,575
Cash and cash equivalents 25,539 21,267
Restricted cash 623 575
Tenant rent receivables, less allowance for doubtful accounts
of $80 and $1,300, respectively 6,029 1,749
Straight-line rent receivable, less allowance for doubtful accounts
of $135 and $135, respectively 40,086 35,374
Related party mortgage loan receivables 98,846 93,896
Prepaid expenses and other assets 11,303 13,761
Other assets: derivative asset 4,365 -
Office computers and furniture, net of accumulated depreciation
of $694 and $584, respectively 543 544
Deferred leasing commissions, net of accumulated amortization
of $14,402 and $11,812, respectively   27,504       23,376  
Total assets $ 2,076,629     $ 1,526,068  
 
Liabilities and Stockholders’ Equity:
Liabilities:

Bank note payable

$ 331,500 $ 216,750
Term loans payable 620,000 400,000
Accounts payable and accrued expenses 39,907 31,122
Accrued compensation 2,432 2,540
Tenant security deposits 3,891 2,489
Other liabilities: derivative liability 4,579 1,219

Acquired unfavorable real estate leases, less accumulated amortization of $5,936 and $4,618, respectively

  15,171       7,199  
Total liabilities   1,017,480       661,319  
 
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 82,937,405 shares issued and outstanding, respectively

10 8
Additional paid-in capital 1,273,585 1,042,876
Accumulated other comprehensive loss (214 ) (1,219 )
Accumulated distributions in excess of accumulated earnings   (214,232 )   (176,916 )
Total stockholders’ equity   1,059,149     864,749  
Total liabilities and stockholders’ equity $ 2,076,629     $ 1,526,068  

Franklin Street Properties Corp. Financial Results

Supplementary Schedule C

Condensed Consolidated Statements of Cash Flows

(Unaudited)

 
For the

Nine Months Ended

September 30,

(in thousands)   2013     2012  
Cash flows from operating activities:
Net income $ 13,236 $ 2,174
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense 56,796 41,846
Amortization of above market lease (277 ) 56
Provision for loss on property held for sale of $14,300
less applicable income tax - 14,300
Equity in (earnings) losses of non-consolidated REITs 814 (1,061 )
Distributions from non-consolidated REITs - 1,246
Increase (decrease) in bad debt reserve (1,220 ) 105
Changes in operating assets and liabilities:
Restricted cash (48 ) (53 )
Tenant rent receivables, net (3,060 ) 173
Straight-line rents, net (3,920 ) (3,498 )
Lease acquisition costs (820 ) (2,235 )
Prepaid expenses and other assets, net (1,845 ) (1,278 )
Accounts payable and accrued expenses 6,860 (25 )
Accrued compensation (108 ) (28 )
Tenant security deposits 1,402 273
Payment of deferred leasing commissions   (7,532 )   (2,425 )
Net cash provided by operating activities   60,278     49,570  
Cash flows from investing activities:
Purchase of real estate assets, office computers and furniture (468,893 ) (49,209 )
Acquired real estate leases (100,143 ) (14,376 )
Investments in non-consolidated REITs 4,858 (1 )
Distributions in excess of earnings from non-consolidated REITs 81 1,487
Investment in related party mortgage loan receivable (4,950 ) (73,920 )
Repayment of related party mortgage loan receivable - 106,200
Changes in deposits on real estate assets   -     -  
Net cash used in investing activities   (569,047 )   (29,819 )
Cash flows from financing activities:
Proceeds from stock offering 241,500 -
Offering costs (10,789 ) -
Distributions to stockholders (50,552 ) (47,274 )
Borrowings under bank note payable 160,000 160,000
Repayment of bank note payable (45,250 ) (527,000 )
Borrowing from term loan payable 220,000 400,000
Deferred financing costs   (1,868 )   (5,328 )
Net cash provided by (used in) financing activities   513,041     (19,602 )
Net increase in cash and cash equivalents 4,272 149
Cash and cash equivalents, beginning of period   21,267     23,813  
Cash and cash equivalents, end of period $ 25,539   $ 23,962  

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
2013 60,908 0.6 %
2014 474,667 4.9 %
2015 1,065,576 11.0 %
2016 968,158 10.0 %
2017 1,069,533 11.0 %
Thereafter (2) 6,046,197 62.5 %
9,685,039 100.0 %

(1) Percentages are determined based upon square footage of expiring commercial leases and exclude assets held for sale.

(2) Includes 604,944 square feet of current vacancies.

(dollars & square feet in 000's)           As of September 30, 2013 (1)
  # of     % of       Square   % of
State   Properties   Investment   Portfolio       Feet   Portfolio
 
Texas 10 $   406,681 25.8   % 2,537 26.2   %
Colorado 6 459,386 29.2 % 2,118 21.9 %
Georgia 3 225,829 14.3 % 1,396 14.4 %
Virginia 4 96,705 6.1 % 684 7.1 %
Minnesota 2 41,875 2.7 % 628 6.5 %
Missouri 3 64,598 4.1 % 477 4.9 %
North Carolina 3 65,808 4.1 % 431 4.4 %
Illinois 2 48,494 3.1 % 372 3.8 %
Maryland 1 53,129 3.4 % 325 3.4 %
Florida 1 44,632 2.8 % 213 2.2 %
Indiana 1 34,097 2.2 % 205 2.1 %
California 2 21,029 1.3 % 182 1.9 %
Washington 1       13,427   0.9   %       117   1.2   %
39   $   1,575,690   100.0   %       9,685   100.0   %

(1) Excludes asset held for sale

Franklin Street Properties Corp. Earnings Release

Supplementary Schedule E

Portfolio and Other Supplementary Information

(Unaudited & Approximated)

 
Capital Expenditures    
Owned Portfolio Three Months Ended Nine Months Ended
(in thousands) 30-Sep-13 30-Sep-12 30-Sep-13 30-Sep-12
 
Tenant improvements $ 4,596 $ 2,854 $ 12,079 $ 8,573
Deferred leasing costs 3,821 1,104 7,721 4,643
Building improvements   1,552   711   4,292   2,460
$ 9,969 $ 4,669 $ 24,092 $ 15,676
Square foot & leased percentages September 30, December 31,
  2013   2012  
 
Owned portfolio of commercial real estate (1)
Number of properties 40 37
Square feet 9,807,339 7,854,679
Leased percentage 93.8 % 94.0 %
 
Investments in non-consolidated REITs
Number of properties 2 2
Square feet 1,395,500 1,392,316
Leased percentage 61.5 % 65.2 %
 
Single Asset REITs (SARs) managed
Number of properties 13 13
Square feet 3,323,198 3,323,566
Leased percentage 86.6 % 87.2 %
 
Total owned, investments & managed properties (1)
Number of properties 55 52
Square feet 14,526,037 12,570,561
Leased percentage 89.1 % 89.0 %
 

(1) Includes asset held for sale

The following table shows property information for our investments in non-consolidated REITs:

    Square % Leased   % Interest
Single Asset REIT name   City   State Feet 30-Sep-13   Held
FSP 303 East Wacker Drive Corp. Chicago IL 860,429 50.1 % 43.7 %
FSP Grand Boulevard Corp. Kansas City MO 535,071 79.9 % 27.0 %
1,395,500 61.5 %

Franklin Street Properties Corp. Earnings Release

Supplementary Schedule F

Percentage of Leased Space

(Unaudited & Estimated)

 
   

Second Quarter Average % Leased (2)

  Third Quarter Average % Leased (2)

% Leased (1) as of 30-Jun-13

% Leased (1) as of 30-Sep-13
Property Name Location

Square Feet

   
 
1 PARK SENECA Charlotte, NC 109,674 79.3 % 79.1 % 80.7 % 79.6 %
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 CENTENNIAL Colorado Springs, CO 110,405 85.4 % 85.4 % 85.4 % 85.4 %
5 MEADOW POINT Chantilly, VA 138,537 92.6 % 92.6 % 92.6 % 92.6 %
6 TIMBERLAKE Chesterfield, MO 232,766 98.3 % 98.3 % 98.3 % 98.3 %
7 FEDERAL WAY Federal Way, WA 117,010 48.4 % 48.4 % 51.5 % 51.5 %
8 NORTHWEST POINT Elk Grove Village, IL 176,848 100.0 % 100.0 % 100.0 % 100.0 %
9 TIMBERLAKE EAST Chesterfield, MO 116,197 94.6 % 95.4 % 94.6 % 94.6 %
10 PARK TEN Houston, TX 157,460 100.0 % 100.0 % 100.0 % 100.0 %
11 MONTAGUE San Jose, CA 145,951 100.0 % 100.0 % 100.0 % 100.0 %
12 ADDISON Addison, TX 293,787 95.4 % 95.4 % 94.3 % 94.3 %
13 COLLINS CROSSING Richardson, TX 298,766 99.5 % 99.5 % 99.5 % 99.5 %
14 GREENWOOD PLAZA Englewood, CO 196,236 100.0 % 100.0 % 100.0 % 100.0 %
15 RIVER CROSSING Indianapolis, IN 205,059 98.2 % 97.6 % 99.1 % 98.8 %
16 LIBERTY PLAZA Addison, TX 218,934 84.6 % 83.2 % 86.0 % 85.5 %
17 INNSBROOK Glen Allen, VA 298,456 99.0 % 99.0 % 99.9 % 99.6 %
18 380 INTERLOCKEN Broomfield, CO 240,184 87.6 % 86.7 % 86.1 % 86.1 %
19 BLUE LAGOON Miami, FLA 212,619 100.0 % 100.0 % 100.0 % 100.0 %
20 ELDRIDGE GREEN Houston, TX 248,399 100.0 % 100.0 % 100.0 % 100.0 %
21 WILLOW BEND Plano, TX 117,050 92.3 % 94.8 % 92.3 % 92.3 %
22 ONE OVERTON PARK Atlanta, GA 387,267 98.8 % 98.2 % 98.9 % 98.8 %
23 390 INTERLOCKEN Broomfield, CO 241,516 79.8 % 80.0 % 69.4 % 76.3 %
24 EAST BALTIMORE Baltimore, MD 325,445 76.8 % 76.3 % 76.8 % 76.8 %
25 PARK TEN PHASE II Houston, TX 156,746 100.0 % 100.0 % 100.0 % 100.0 %
26 LAKESIDE CROSSING I Maryland Heights, MO 127,778 100.0 % 100.0 % 100.0 % 100.0 %
27 LOUDOUN TECH Dulles, VA 135,888 100.0 % 100.0 % 100.0 % 100.0 %
28 4807 STONECROFT Chantilly, VA 111,469 100.0 % 100.0 % 100.0 % 100.0 %
29 EDEN BLUFF Eden Prairie, MN 153,028 100.0 % 100.0 % 100.0 % 100.0 %
30 121 SOUTH EIGHTH ST Minneapolis, MN 474,791 90.7 % 90.7 % 90.2 % 90.2 %
31 EMPEROR BOULEVARD Durham, NC 259,531 100.0 % 100.0 % 100.0 % 100.0 %
32 LEGACY TENNYSON CTR Plano, TX 202,600 100.0 % 100.0 % 100.0 % 100.0 %
33 ONE LEGACY Plano, TX 214,110 100.0 % 100.0 % 100.0 % 100.0 %
34 909 DAVIS Evanston, IL 195,245 97.9 % 97.9 % 97.9 % 97.9 %
35 1410 EAST RENNER (3) Richardson, TX 122,300 100.0 % 100.0 % 100.0 % 100.0 %
36 ONE RAVINIA DRIVE Atlanta, GA 386,603 91.0 % 91.0 % 91.0 % 91.0 %
37 WESTCHASE I & II Houston, TX 629,025 96.6 % 96.6 % 97.1 % 97.1 %
38 1999 BROADWAY Denver, CO 673,793 95.9 % 95.8 % 95.8 % 95.9 %
39 999 PEACHTREE Atlanta, GA 621,946 N/A N/A 94.3 % 94.6 %
40 1001 17th STREET Denver, CO 655,420   N/A   N/A     88.5 % 88.5 %
TOTAL WEIGHTED AVERAGE 9,807,339   94.4 % 94.3 %   93.8 % 94.1 %
 
(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) Asset held for sale at September 30, 2013.

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 September 30, 2013      
% of
Tenant Sq Ft SIC Code Portfolio
1 TCF National Bank 263,111 60 2.7 %
2 Quintiles Transnational Corp 259,531 87 2.7 %
3 CITGO Petroleum Corporation 248,399 29 2.6 %
4 Sutherland Asbill Brennan LLP 243,839 81 2.5 %
5 Newfield Exploration Company 234,495 13 2.4 %
6 US Government (a) 229,752 92 2.4 %
7 Burger King Corporation 212,619 58 2.2 %
8 Denbury Onshore, LLC 202,600 13 2.1 %
9 RGA Reinsurance Company 197,354 63 2.0 %
10 SunTrust Bank (b) 182,888 60 1.9 %
11 Citicorp Credit Services, Inc 176,848 61 1.8 %
12 C.H. Robinson Worldwide, Inc 153,028 47 1.6 %
13 T-Mobile South, LLC dba T-Mobile 151,792 48 1.6 %
14 Houghton Mifflin Harcourt Publishing Company 150,050 27 1.5 %
15 Petrobras America, Inc. 144,813 13 1.5 %
16 Murphy Exploration & Production Company 144,677 13 1.5 %
17 Argo Data Resource Corporation 138,540 57 1.4 %
18 Giesecke & Devrient America, Inc. (c) 135,888 73 1.4 %
19 Monsanto Company 127,778 28 1.3 %
20 Federal National Mortgage Association 123,144 61 1.3 %
Total 3,721,146 38.4 %
 
(a) Includes 180,444 and 37,813 square feet which expire in 2018 & 2014, respectively.
The remaining 11,495 square feet expire between 2015 - 2020.
(b) Includes 55,388 square feet which expires October 31, 2016.
(c) Includes 23,778 square feet which expires December 31, 2013.

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, and after adjustments to exclude non-cash income (or losses) from non-consolidated or Sponsored REITs, plus distributions received from non-consolidated or Sponsored 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.

Contact:
Franklin Street Properties Corp.
John Demeritt, 877-686-9496

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