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2 months ago
Franklin Street Properties Corp. Announces First Quarter 2026 ResultsApril 28, 2026 4:25 PM
Business Wire
Franklin Street Properties Corp. (the “Company”, “FSP”, “we” or “our”) (NYSE American: FSP), a real estate investment trust (REIT), announced its results for the three months ended March 31, 2026.
George J. Carter, Chairman and Chief Executive Officer, commented as follows:
“As we move through 2026, our focus remains squarely on maximizing value for our shareholders through a comprehensive and disciplined evaluation of strategic alternatives.
To further support this effort, we have expanded our strategic review process to include both BofA Securities and JLL Real Estate Investment Banking as co-financial advisors. We believe this enhanced framework strengthens our ability to source, evaluate, and execute on a wide range of potential opportunities, including corporate transactions, portfolio level transactions, individual asset sales, and other strategic initiatives. By combining BofA Securities’ extensive capital markets expertise and global reach with JLL’s deep property level expertise, owner user connectivity, and experience across both asset level execution and mergers and acquisitions, we are broadening our ability to identify and pursue the most compelling outcomes for our shareholders.
Importantly, our recent refinancing of our outstanding debt has provided the Company with increased flexibility, allowing us to avoid making forced or rushed decisions and instead pursue strategic initiatives in a disciplined and thoughtful manner. This position allows us to act opportunistically as market conditions evolve and as attractive opportunities emerge.
The capital markets environment for office assets remains uneven. Transaction volume continues to be below historical levels, with constrained liquidity and limited participation from traditional institutional investors. Buyer activity remains more heavily weighted toward private, opportunistic, and non-traditional capital, and pricing in many cases continues to reflect these dynamics rather than the underlying long-term value of institutional quality assets. That said, we believe we are beginning to observe early signs of stabilization, which may represent the initial stages of a broader recovery over time.
We also want to report that we have entered into an Inspection and Confidentiality Agreement with a potential owner user for our Greenwood Plaza property and that we are simultaneously negotiating a Purchase and Sale Agreement with that potential buyer. Closing of the transaction would be subject to completion of due diligence by the potential buyer, the negotiation and execution of a Purchase and Sale Agreement with the potential buyer and the satisfaction of other customary closing conditions. This potential transaction reflects our targeted approach to asset level execution and our ability to identify buyers capable of recognizing value beyond traditional investor underwriting.
In parallel, FSP continues to prioritize leasing and occupancy improvement across our portfolio. We are encouraged by increasing tenant engagement and have seen an increased number of larger prospective leasing opportunities across our markets. We believe that continued leasing progress, including improving occupancy and extending lease duration, remains an important contributor to long term value.
We also continue to focus on driving efficiencies across our platform, including thoughtful management of general and administrative expenses, as part of our broader commitment to disciplined capital allocation and value creation.
We believe that this combination of an expanded and active strategic review process, disciplined execution, and continued leasing progress provides the best path to maximizing value. We remain focused on taking the actions necessary to deliver the strongest possible outcomes for our shareholders.”
Financial Highlights
GAAP net loss was $9.5 million, or $0.09 per basic and diluted share for the three months ended March 31, 2026.
General and administrative expenses for the three months ended March 31, 2026, were $815,000 lower compared to the three months ended March 31, 2025 as a result of lower personnel costs.
Funds From Operations (FFO) was $1.2 million, or $0.01 per basic and diluted share, for the three March 31, 2026.
Leasing Highlights
During the three months ended March 31, 2026, we leased approximately 145,000 square feet of space of which approximately 112,000 were from renewals and expansions of existing tenants.
Our directly-owned real estate portfolio of 14 properties, totaling approximately 4.8 million square feet, was approximately 68.4% leased as of March 31, 2026, compared to approximately 68.9% leased as of December 31, 2025. The decrease in the leased percentage is due to lease expirations exceeding new executed leases during the three months ended March 31, 2026.
The weighted average GAAP base rent per square foot achieved on leasing activity during the three months ended March 31, 2026, was $35.16, or 6.4% higher than average rents in the respective properties for the year ended December 31, 2025. The average lease term on leases signed during the three months ended March 31, 2026, was 6.2 years compared to 5.7 years during the year ended December 31, 2025. Overall, the portfolio weighted average rent per occupied square foot was $30.84 as of March 31, 2026, compared to $30.86 as of December 31, 2025.
We believe that our continuing portfolio of real estate is well located within their respective markets, primarily in the Sunbelt and Mountain West geographic regions, and consists of high-quality assets with long-term upside leasing potential.
Dividend
On March 9, 2026, the Company announced that the Board of Directors had determined to suspend the payment of quarterly dividends. The Board did so in part to redeploy that capital into leasing efforts intended to enhance the value of our portfolio.
The Company estimates that suspension of the dividend will preserve approximately $4.1 million in cash on an annualized basis. The Board and the Company will reassess, on a quarterly basis, when and if quarterly dividend payments can be reinstated and will announce any change to the dividend policy.
Consolidation of Sponsored REIT
As of January 1, 2023, we consolidated the operations of our Monument Circle sponsored REIT into our financial statements and on June 6, 2025, the property held by Monument Circle was sold and Monument Circle and the corporation that had been its sole member were dissolved on December 9, 2025. Additional information about the consolidation of Monument Circle can be found in Note 2, “Significant Accounting Policies - Variable Interest Entities (VIEs)”, Note 3, “Related Party Transactions and Investments in Non-Consolidated Entities - Management fees and interest income from loans” and Note 10, “Disposition of Properties and Assets Held for Sale”, in the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for year ended December 31, 2025.
Non-GAAP Financial Information
A reconciliation of Net loss to FFO, Adjusted Funds From Operations (AFFO) and Sequential Same Store NOI and our definitions of FFO, AFFO and Sequential Same Store NOI can be found on Supplementary Schedules H and I.
Real Estate Update
Supplementary schedules provide property information for the Company’s owned and consolidated properties as of March 31, 2026. 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.fspreit.com.
Today’s news release, along with other news about Franklin Street Properties Corp., is available on the Internet at www.fspreit.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 infill and central business district (CBD) office properties in the U.S. Sunbelt and Mountain West, as well as select opportunistic markets. FSP is focused on long-term growth and appreciation. 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.fspreit.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, such as those relating to our review of strategic alternatives, expectations for future potential leasing activity, expectations for property dispositions, value creation/enhancement in future periods and expectations for growth and leasing activities in future periods that are based on current judgments and current knowledge of management and 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, adverse changes in general economic or local market conditions, including as a result of the long-term effects of the COVID-19 pandemic, wars, terrorist attacks or other acts of violence, which may negatively affect the markets in which we and our tenants operate, impacts of changes in tariffs that the United States and other countries have announced or implemented, as well as any additional new tariffs, trade restrictions or export regulations that may be implemented or reversed in the future, inflation rates, interest rates, disruptions in the debt markets, economic conditions in the markets in which we own properties, risks of a lessening of demand for the types of real estate owned by us, adverse changes in energy prices, which if sustained, could negatively impact occupancy and rental rates in the markets in which we own properties, including energy-influenced markets such as Dallas, Denver and Houston, changes in government regulations and regulatory uncertainty, uncertainty about governmental fiscal policy, geopolitical events and expenditures that cannot be anticipated, such as utility rate and usage increases, increases in the level of general and administrative costs as a percentage of revenues as revenues decrease as a result of property dispositions, 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, 2025, which may be further 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, acquisitions, dispositions, 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
Reconciliation and Definitions of Funds From Operations (FFO) and Adjusted
Funds From Operations (AFFO)
H
Reconciliation and Definition of Sequential Same Store results to Property Net
Operating Income (NOI) and Net Loss
I
Franklin Street Properties Corp. Financial Results
Supplementary Schedule A
Condensed Consolidated Statements of Operations
(Unaudited)
For the
Three Months Ended
March 31,
(in thousands, except per share amounts)
2026
2025
Revenue:
Rental
$
26,225
$
27,107
Total revenue
26,225
27,107
Expenses:
Real estate operating expenses
10,290
10,095
Real estate taxes and insurance
4,243
5,369
Depreciation and amortization
10,580
10,824
General and administrative
2,669
3,484
Interest
6,812
5,691
Total expenses
34,594
35,463
Loss on extinguishment of debt
(1,267
)
(2
)
Loss on sale of properties and impairment of assets held for sale, net
—
(13,284
)
Interest income
163
259
Loss before taxes
(9,473
)
(21,383
)
Tax expense
54
52
Net loss
$
(9,527
)
$
(21,435
)
Weighted average number of shares outstanding, basic and diluted
103,690
103,567
Loss per share, basic and diluted:
Net loss per share, basic and diluted
$
(0.09
)
$
(0.21
)
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)
2026
2025
Assets:
Real estate assets:
Land
$
98,882
$
98,883
Buildings and improvements
1,094,771
1,091,728
Fixtures and equipment
11,562
11,572
1,205,215
1,202,183
Less accumulated depreciation
416,644
408,461
Real estate assets, net
788,571
793,722
Acquired real estate leases, less accumulated amortization of $15,058 and $14,648, respectively
2,080
2,490
Cash, cash equivalents and restricted cash
23,753
30,571
Tenant rent receivables
1,345
471
Straight-line rent receivable
38,670
38,744
Prepaid expenses and other assets
4,322
4,080
Office computers and furniture, net of accumulated depreciation of $1,059 and $1,047, respectively
124
136
Deferred leasing commissions, net of accumulated amortization of $14,694 and $14,571, respectively
22,921
22,670
Total assets
$
881,786
$
892,884
Liabilities and Stockholders’ Equity:
Liabilities:
Initial Term Loans, less unamortized financing costs and OID of $23,473
$
251,527
$
—
Term loans payable, less unamortized financing costs of $441
—
125,555
Series A & Series B Senior Notes, less unamortized financing costs of $236
—
122,686
Accounts payable and accrued expenses
26,391
28,724
Accrued compensation
234
2,394
Tenant security deposits
6,186
6,198
Lease liability
1,002
316
Acquired unfavorable real estate leases, less accumulated amortization of $58 and $56, respectively
33
34
Total liabilities
285,373
285,907
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, 103,690,340 and 103,690,340 shares issued and outstanding, respectively
10
10
Additional paid-in capital
1,335,586
1,335,586
Accumulated distributions in excess of accumulated earnings
(739,183
)
(728,619
)
Total stockholders’ equity
596,413
606,977
Total liabilities and stockholders’ equity
$
881,786
$
892,884
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)
2026
2025
Cash flows from operating activities:
Net loss
$
(9,527
)
$
(21,435
)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization expense
11,600
11,509
Loss on extinguishment of debt
1,267
2
Loss on sale of properties and impairment of assets held for sale, net
—
13,284
Changes in operating assets and liabilities:
Tenant rent receivables
(874
)
(179
)
Straight-line rents
221
70
Lease acquisition costs
(147
)
(74
)
Prepaid expenses and other assets
448
(225
)
Accounts payable and accrued expenses
(4,582
)
(5,914
)
Accrued compensation
(2,160
)
(1,892
)
Tenant security deposits
(12
)
(81
)
Payment of deferred leasing commissions
(1,386
)
(546
)
Net cash used in operating activities
(5,152
)
(5,481
)
Cash flows from investing activities:
Property improvements, fixtures and equipment
(2,696
)
(4,454
)
Net cash used in investing activities
(2,696
)
(4,454
)
Cash flows from financing activities:
Distributions to stockholders
(1,037
)
(1,036
)
Cost of extinguished debt
(1,018
)
—
Proceeds received from Initial Term Loans
258,500
—
Repayments of Term loans payable
(125,995
)
(77
)
Repayments of Series A&B Senior Notes
(122,922
)
(76
)
Deferred financing costs
(6,498
)
—
Net cash provided by (used in) financing activities
1,030
(1,189
)
Net decrease in cash, cash equivalents and restricted cash
(6,818
)
(11,124
)
Cash, cash equivalents and restricted cash, beginning of year
30,571
42,683
Cash, cash equivalents and restricted cash, end of period
$
23,753
$
31,559
Franklin Street Properties Corp. Earnings Release
Supplementary Schedule D
Real Estate Portfolio Summary Information
(Unaudited & Approximated)
Commercial portfolio lease expirations (1)
Year
Total
Square Feet
% of
Portfolio
2026
216,212
4.5%
2027
486,073
10.1%
2028
242,409
5.0%
2029
568,905
11.8%
2030
268,950
5.6%
Thereafter (2)
3,026,938
63.0%
4,809,487
100.0%
____________________
(1)
Percentages are determined based upon total square footage.
(2)
Includes 1,519,581 square feet of vacancies at our owned properties as of March 31, 2026.
(dollars & square feet in 000's)
As of March 31, 2026
% of
Square
% of
State
Properties
Investment
Portfolio
Feet
Portfolio
Colorado
4
$
423,954
53.8%
2,143
44.6%
Texas
7
255,659
32.4%
1,908
39.7%
Minnesota
3
108,958
13.8%
758
15.7%
Total
14
$
788,571
100.0%
4,809
100.0%
Franklin Street Properties Corp. Earnings Release
Supplementary Schedule E
Portfolio and Other Supplementary Information
(Unaudited & Approximated)
Recurring Capital Expenditures
(in thousands)
For the Three Months Ended
31-Mar-26
Tenant improvements
$
3,386
Deferred leasing costs
1,386
Non-investment capex
489
$
5,261
(in thousands)
For the Three Months Ended
Year Ended
31-Mar-25
30-Jun-25
30-Sep-25
31-Dec-25
31-Dec-25
Tenant improvements
$
2,374
$
1,415
$
4,469
$
2,023
$
10,281
Deferred leasing costs
545
1,702
929
1,050
4,226
Non-investment capex
1,258
750
753
1,154
3,915
$
4,177
$
3,867
$
6,151
$
4,227
$
18,422
Square foot & leased percentages
March 31,
December 31,
2026
2025
Owned Properties:
Number of properties
14
14
Square feet
4,809,487
4,807,663
Leased percentage
68.4%
68.9%
Franklin Street Properties Corp. Earnings Release
Supplementary Schedule F
Percentage of Leased Space
(Unaudited & Estimated)
Property Name
Location
Square Feet
% Leased (1)
as of
31-Dec-25
Fourth
Quarter
Average %
Leased (2)
% Leased (1)
as of
31-Mar-26
First
Quarter
Average %
Leased (2)
1
PARK TEN
Houston, TX
157,609
86.8%
86.8%
86.8%
86.8%
2
PARK TEN PHASE II
Houston, TX
156,746
76.3%
76.3%
76.3%
76.3%
3
GREENWOOD PLAZA
Englewood, CO
196,236
65.0%
65.0%
65.0%
65.0%
4
ADDISON
Addison, TX
289,333
67.7%
67.7%
64.3%
64.3%
5
LIBERTY PLAZA
Addison, TX
217,841
66.9%
66.4%
66.9%
66.9%
6
ELDRIDGE GREEN
Houston, TX
248,399
100.0%
100.0%
100.0%
100.0%
7
121 SOUTH EIGHTH ST
Minneapolis, MN
297,744
80.4%
79.1%
75.2%
76.4%
8
801 MARQUETTE AVE
Minneapolis, MN
129,691
91.8%
91.8%
91.8%
91.8%
9
LEGACY TENNYSON CTR
Plano, TX
209,562
60.9%
60.9%
60.9%
60.9%
10
WESTCHASE I & II
Houston, TX
629,025
66.2%
66.2%
66.2%
67.4%
11
1999 BROADWAY
Denver, CO
682,639
50.7%
50.3%
50.7%
50.7%
12
1001 17TH STREET
Denver, CO
652,423
76.4%
75.6%
77.4%
76.7%
13
PLAZA SEVEN
Minneapolis, MN
330,096
51.0%
51.0%
48.9%
48.9%
14
600 17TH STREET
Denver, CO
612,143
69.1%
69.4%
69.7%
69.3%
OWNED PORTFOLIO
4,809,487
68.9%
68.6%
68.4%
68.5%
____________________
(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 three months during the quarter.
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 total square feet:
As of March 31, 2026
% of
Tenant
Sq Ft
Portfolio
1
CITGO Petroleum Corporation
248,399
5.2%
2
EOG Resources, Inc.
169,167
3.5%
3
US Government
168,573
3.5%
4
Kaiser Foundation Health Plan, Inc.
120,979
2.5%
5
Deluxe Corporation
98,922
2.0%
6
Ping Identity Corp.
89,856
1.9%
7
Olin Corporation
81,480
1.7%
8
Permian Resources Operating, LLC
67,856
1.4%
9
Hall and Evans LLC
65,878
1.4%
10
Cyxtera Management, Inc.
61,826
1.3%
11
Precision Drilling (US) Corporation
59,569
1.2%
12
PwC US Group
54,334
1.1%
13
Coresite, LLC
49,518
1.0%
14
Schwegman, Lundberg & Woessner, P.A.
46,269
1.0%
15
Ark-La-Tex Financial Services, LLC.
41,011
0.9%
16
Invenergy, LLC.
35,088
0.7%
17
Chevron U.S.A., Inc.
35,088
0.7%
18
Moss, Luse & Womble, LLC
34,071
0.7%
19
QB Energy Operating, LLC.
34,063
0.7%
20
International Business Machines Corporation
31,564
0.7%
Total
1,593,511
33.1%
Franklin Street Properties Corp. Earnings Release
Supplementary Schedule H
Reconciliation and Definitions of Funds From Operations (“FFO”) and
Adjusted Funds From Operations (“AFFO”)
A reconciliation of Net loss to FFO and AFFO is shown below and a definition of FFO and AFFO is provided on Supplementary Schedule I. Management believes FFO and AFFO are used broadly throughout the real estate investment trust (REIT) industry as measurements of performance. The Company has included the National Association of Real Estate Investment Trusts (NAREIT) FFO definition as of May 17, 2016 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 and AFFO may not be comparable to FFO or AFFO reported by other REITs or real estate companies that define FFO or AFFO differently.
Reconciliation of Net loss to FFO and AFFO:
Three Months Ended
March 31,
(In thousands, except per share amounts)
2026
2025
Net loss
$
(9,527
)
$
(21,435
)
Loss on sale of properties and impairment of asset held for sale, net
—
13,284
Depreciation & amortization
10,580
10,824
NAREIT FFO
1,053
2,673
Lease Acquisition costs
98
54
Funds From Operations (FFO)
$
1,151
$
2,727
Funds From Operations (FFO)
$
1,151
$
2,727
Loss on extinguishment of debt
1,267
2
Amortization of deferred financing costs and OID
1,020
685
Straight-line rent
221
70
Tenant improvements
(3,386
)
(2,374
)
Leasing commissions
(1,386
)
(545
)
Non-investment capex
(489
)
(1,258
)
Adjusted Funds From Operations (AFFO)
$
(1,602
)
$
(693
)
Per Share Data
EPS
$
(0.09
)
$
(0.21
)
FFO
$
0.01
$
0.03
AFFO
$
(0.02
)
$
(0.01
)
Weighted average shares (basic and diluted)
103,690
103,567
Funds From Operations (“FFO”)
The Company evaluates performance based on Funds From Operations, which we refer to as FFO, as management believes that FFO represents the most accurate measure of activity and is the basis for distributions paid to equity holders. The Company defines FFO as net income or loss (computed in accordance with GAAP), excluding gains (or losses) from sales of property, hedge ineffectiveness, acquisition costs of newly acquired properties that are not capitalized and lease acquisition costs that are not capitalized plus depreciation and amortization, including amortization of acquired above and below market lease intangibles and impairment charges on mortgage loans, properties or investments in non-consolidated REITs, and after adjustments to exclude equity in income or losses from, and, to include the proportionate share of FFO from, non-consolidated REITs.
FFO should not be considered as an alternative to net income or loss (determined in accordance with GAAP), nor as an indicator of the Company’s financial performance, nor as an alternative to cash flows from operating activities (determined in accordance with GAAP), nor as a measure of the Company’s liquidity, nor is it necessarily indicative of sufficient cash flow to fund all of the Company’s needs.
Other real estate companies and the National Association of Real Estate Investment Trusts, or NAREIT, may define this term in a different manner. We have included the NAREIT FFO as of May 17, 2016 in the 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 or loss and cash flows from operating, investing and financing activities in the consolidated financial statements.
Adjusted Funds From Operations (“AFFO”)
The Company also evaluates performance based on Adjusted Funds From Operations, which we refer to as AFFO. The Company defines AFFO as (1) FFO, (2) excluding loss on extinguishment of debt that is non-cash, (3) excluding our proportionate share of FFO and including distributions received, from non-consolidated REITs, (4) excluding the effect of straight-line rent, (5) plus the amortization of deferred financing costs and original issue discounts, (6) plus the value of shares issued as compensation and (7) less recurring capital expenditures that are generally for maintenance of properties, which we call non-investment capex or are second generation capital expenditures. Second generation costs include re-tenanting space after a tenant vacates, which include tenant improvements and leasing commissions.
We exclude development/redevelopment activities, capital expenditures planned at acquisition and costs to reposition a property. We also exclude first generation leasing costs, which are generally to fill vacant space in properties we acquire or were planned for at acquisition.
AFFO should not be considered as an alternative to net income or loss (determined in accordance with GAAP), nor as an indicator of the Company’s financial performance, nor as an alternative to cash flows from operating activities (determined in accordance with GAAP), nor as a measure of the Company’s liquidity, nor is it necessarily indicative of sufficient cash flow to fund all of the Company’s needs. Other real estate companies may define this term in a different manner. We believe that in order to facilitate a clear understanding of the results of the Company, AFFO should be examined in connection with net income or loss and cash flows from operating, investing and financing activities in the consolidated financial statements.
Franklin Street Properties Corp. Earnings Release
Supplementary Schedule I
Reconciliation and Definition of Sequential Same Store results to property Net Operating Income (NOI) and Net Income
Net Operating Income (“NOI”)
The Company provides property performance based on Net Operating Income, which we refer to as NOI. Management believes that investors are interested in this information. NOI is a non-GAAP financial measure that the Company defines as net income or loss (the most directly comparable GAAP financial measure) plus general and administrative expenses, depreciation and amortization, including amortization of acquired above and below market lease intangibles and impairment charges, interest expense, less equity in earnings of nonconsolidated REITs, interest income, management fee income, hedge ineffectiveness, gains or losses on extinguishment of debt, gains or losses on the sale of assets and excludes non-property specific income and expenses. The information presented includes footnotes and the data is shown by region with properties owned in the periods presented, which we call Sequential Same Store. The comparative Sequential Same Store results include properties held for all periods presented. We exclude properties that have been placed in service, but that do not have operating activity for all periods presented, dispositions and significant nonrecurring income such as bankruptcy settlements and lease termination fees. NOI, as defined by the Company, may not be comparable to NOI reported by other REITs that define NOI differently. NOI should not be considered an alternative to net income or loss as an indication of our performance or to cash flows as a measure of the Company’s liquidity or its ability to make distributions. The calculations of NOI and Sequential Same Store are shown in the following table:
Rentable
Square Feet
Three Months Ended
Three Months Ended
Inc
%
(in thousands)
or RSF
31-Mar-26
31-Dec-25
(Dec)
Change
Region
MidWest
758
1,372
1,320
52
3.9
%
South
1,908
4,692
4,740
(48
)
(1.0
)
%
West
2,143
5,397
5,683
(286
)
(5.0
)
%
Property NOI* from Owned Properties
4,809
11,461
11,743
(282
)
(2.4
)
%
Disposition and Acquisition Properties (a)
-
(10
)
61
(71
)
(0.6
)
%
NOI*
4,809
$
11,451
$
11,804
$
(353
)
(3.0
)
%
Sequential Same Store
$
11,461
$
11,743
$
(282
)
(2.4
)
%
Less Nonrecurring
Items in NOI* (b)
52
194
(142
)
1.2
%
Comparative
Sequential Same Store
$
11,409
$
11,549
$
(140
)
(1.2
)
%
Reconciliation to
Three Months Ended
Three Months Ended
Net loss
31-Mar-26
31-Dec-25
Net loss
$
(9,527
)
$
(7,323
)
Add (deduct):
Loss on extinguishment of debt
1,267
—
(Gain) loss on sale of properties and impairment of assets held for sale, net
—
2
Management fee income
(375
)
(363
)
Depreciation and amortization
10,580
10,609
General and administrative
2,669
2,628
Interest expense
6,812
6,340
Interest income
(163
)
(230
)
Non-property specific items, net
188
141
NOI*
$
11,451
$
11,804
(a)
We define Disposition and Acquisition Properties as properties that were sold acquired or consolidated and do not have operating activity for all periods presented.
(b)
Nonrecurring Items in NOI include proceeds from bankruptcies, lease termination fees or other significant nonrecurring income or expenses, which may affect comparability.
*Excludes NOI from investments in and interest income from secured loans to non-consolidated REITs.
View source version on businesswire.com: https://www.businesswire.com/news/home/20260428723003/en/
For Franklin Street Properties Corp.
Georgia Touma (877) 686-9496
Original: Franklin Street Properties Corp. Announces First Quarter 2026 Results
US Market News
3 months ago
Franklin Street Properties Corp. Announces Fourth Quarter and Full Year 2025 ResultsMarch 9, 2026 4:29 PM
Business Wire
Franklin Street Properties Corp. (the “Company”, “FSP”, “we” or “our”) (NYSE American: FSP), a real estate investment trust (REIT), announced its results for the fourth quarter and the year ended December 31, 2025.
George J. Carter, Chairman and Chief Executive Officer, commented as follows:
“As previously announced on February 27, 2026, the Company closed a $320 million secured credit facility with an affiliate of TPG Credit. The Company repaid in full all of its then outstanding approximately $249 million aggregate principal amount of indebtness with borrowings under the facility. The facility has an original stated maturity of February 26, 2029, subject to potential extension of up to one year at the option of the Company, subject to certain conditions. The facility includes up to $45 million of delayed draw term loans, which, subject to certain conditions, will be used to fund tenant improvements, leasing commissions, building improvements and other uses approved by the lender.
FSP continues to maintain its focus on trying to improve leasing and occupancy across our portfolio. Nationally, the overall office sector continues to face headwinds from capital markets volatility and evolving workplace dynamics, but we have recently seen some encouraging signs of stabilization and “return-to-office” trends in many cities across the United States. While overall leasing volume within the FSP portfolio during the year ended December 31, 2025 has been modest, we have seen more signs of improved tenant activity in our markets. National office vacancy rates have finally declined slightly for the first time since early 2019. Importantly, we are also seeing and competing for a greater number of larger potential lease transactions at our properties. More prospective tenants are in the market seeking to expand their office space footprints. The increased demand from these prospective tenants is pushing up against a reduced supply of office space from a lack of new development and inventory removal.
Now that our near-term debt maturity has been addressed and while leasing and property operations are ongoing, we are continuing our review of potential strategic alternatives. Our Board of Directors and management team remain deeply committed to continuing to explore ways to maximize shareholder value. We believe that successfully addressing our near-term debt maturities has reduced a significant source of near-term uncertainty and avoided putting the Company in a position of having to make forced or suboptimal decisions, thereby enabling us to focus on executing strategic initiatives in what continues to be an uneven office market environment.”
Financial Highlights
GAAP net loss was $7.3 million and $45.0 million, or $0.07 and $0.43 per basic and diluted share for the three and twelve months ended December 31, 2025, respectively.
Funds From Operations (FFO) was $3.4 million and $11.0 million, or $0.03 and $0.11 per basic and diluted share, for the three and twelve months ended December 31, 2025, respectively.
Leasing Highlights
During the year ended December 31, 2025, we leased approximately 413,000 square feet of space of which approximately 320,000 were from renewals and expansions of existing tenants.
Our directly-owned real estate portfolio of 14 properties, totaling approximately 4.8 million square feet, was approximately 68.9% leased as of December 31, 2025, compared to approximately 70.3% leased as of December 31, 2024. The decrease in the leased percentage is due to lease expirations exceeding new executed leases during the year ended December 31, 2025.
The weighted average GAAP base rent per square foot achieved on leasing activity during the year ended December 31, 2025, was $32.42, or 5.7% higher than average rents in the respective properties for the year ended December 31, 2024. The average lease term on leases signed during the year ended December 31, 2025, was 5.7 years compared to 6.3 years during the year ended December 31, 2024. Overall, the portfolio weighted average rent per occupied square foot was $30.86 as of December 31, 2025, compared to $31.77 as of December 31, 2024.
We believe that our continuing portfolio of real estate is well located within their respective markets, primarily in the Sunbelt and Mountain West geographic regions, and consists of high-quality assets with long-term upside leasing potential.
Strategic Review
George J. Carter, Chairman and Chief Executive Officer, commented as follows with respect to the Company’s review of strategic alternatives:
“Our Board of Directors continues to work with our financial advisor, BofA Securities, in connection with a review of strategic alternatives in order to explore ways to maximize shareholder value. To date, we have evaluated a broad range of strategic alternatives, including portfolio-level transactions, individual asset dispositions, joint venture structures, corporate-level transactions, and liquidation scenarios in addition to the refinancing alternatives that resulted in the new secured credit facility with an affiliate of TPG Credit. No assurances can be given regarding the outcome or timetable for completion of the strategic review process.
Management and the Board continue to believe that the intrinsic value of the Company’s real estate portfolio exceeds its current public market valuation. However, the Company’s ability to realize that value is dependent upon transaction and financing liquidity in the relevant capital markets and property submarkets, including for assets of similar quality, occupancy levels, and weighted average lease terms. Based on market evidence, transaction comparables, and discussions with potential counterparties, the Board, in consultation with our professional advisors, determined that, to date, market conditions have not been supportive of transactions at pricing levels that would reasonably reflect the intrinsic value of the Company’s assets. Accordingly, pursuing asset sales or liquidation under such market conditions would likely not maximize value for our shareholders. We believe that current transaction activity in many office markets continues to reflect limited capital availability and highly selective buyer demand rather than the underlying long-term value of institutional quality assets.
Our review of potential strategic alternatives remains ongoing and continues to include evaluation of a broad range of alternatives, including asset sales. We look forward to updating the market as and when appropriate.”
Dividend
The Company is today announcing that the Board of Directors has determined to suspend the payment of quarterly dividends. The Board did so in part to support the Company’s efforts to reduce operating expenses and to redeploy that capital into leasing efforts intended to enhance the value of our portfolio.
The Company estimates that suspension of the dividend will preserve approximately $4.1 million in cash on an annualized basis. The Board and the Company will reassess, on a quarterly basis, when and if quarterly dividend payments can be reinstated.
Consolidation of Sponsored REIT
As of January 1, 2023, we consolidated the operations of our Monument Circle sponsored REIT into our financial statements and on June 6, 2025, the property held by Monument Circle was sold and Monument Circle and the corporation that had been its sole member were dissolved on December 9, 2025. Additional information about the consolidation of Monument Circle can be found in Note 2, “Significant Accounting Policies - Variable Interest Entities (VIEs)”, Note 3, “Related Party Transactions and Investments in Non-Consolidated Entities - Management fees and interest income from loans” and Note 10, “Disposition of Properties and Assets Held for Sale”, in the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for year ended December 31, 2025.
Non-GAAP Financial Information
A reconciliation of Net loss to FFO, Adjusted Funds From Operations (AFFO) and Sequential Same Store NOI and our definitions of FFO, AFFO and Sequential Same Store NOI can be found on Supplementary Schedules H and I.
2025 Net Income (Loss), FFO and Disposition Guidance
At this time, due primarily to economic conditions and uncertainty surrounding the timing and amount of proceeds received from property dispositions, we are continuing suspension of Net Income (Loss), FFO and property disposition guidance.
Real Estate Update
Supplementary schedules provide property information for the Company’s owned and consolidated properties as of December 31, 2025. 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.fspreit.com.
Today’s news release, along with other news about Franklin Street Properties Corp., is available on the Internet at www.fspreit.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 infill and central business district (CBD) office properties in the U.S. Sunbelt and Mountain West, as well as select opportunistic markets. FSP is focused on long-term growth and appreciation. 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.fspreit.com.
Earnings Call
A conference call is scheduled for March 10, 2026, at 10:00 a.m. (ET) to discuss the fourth quarter and full year 2025 results. To access the call, please dial 800-715-9871 and use conference ID 5455485. Internationally, the call may be accessed by dialing 646-307-1963 and using conference ID 5455485. To listen via live audio webcast, please visit the Events & Presentations section in the Investor Relations section of the Company's website (www.fspreit.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.
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, such as those relating to our review of strategic alternatives, expectations for future potential leasing activity, the payment of dividends in future periods, value creation/enhancement in future periods and expectations for growth and leasing activities in future periods that are based on current judgments and current knowledge of management and 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, adverse changes in general economic or local market conditions, including as a result of the long-term effects of the COVID-19 pandemic, wars, terrorist attacks or other acts of violence, which may negatively affect the markets in which we and our tenants operate, impacts of changes in tariffs that the United States and other countries have announced or implemented, as well as any additional new tariffs, trade restrictions or export regulations that may be implemented or reversed in the future, inflation rates, interest rates, disruptions in the debt markets, economic conditions in the markets in which we own properties, risks of a lessening of demand for the types of real estate owned by us, adverse changes in energy prices, which if sustained, could negatively impact occupancy and rental rates in the markets in which we own properties, including energy-influenced markets such as Dallas, Denver and Houston, changes in government regulations and regulatory uncertainty, uncertainty about governmental fiscal policy, geopolitical events and expenditures that cannot be anticipated, such as utility rate and usage increases, increases in the level of general and administrative costs as a percentage of revenues as revenues decrease as a result of property dispositions, 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, 2025, which may be further 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, acquisitions, dispositions, 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
Reconciliation and Definitions of Funds From Operations (FFO) and Adjusted
Funds From Operations (AFFO)
H
Reconciliation and Definition of Sequential Same Store results to Property Net
Operating Income (NOI) and Net Loss
I
Franklin Street Properties Corp. Financial Results
Supplementary Schedule A
Condensed Consolidated Statements of Operations
(Unaudited)
For the
For the
Three Months Ended
Year Ended
December 31,
December 31,
(in thousands, except per share amounts)
2025
2024
2025
2024
Revenue:
Rental
$
26,040
$
28,375
$
107,162
$
120,080
Other
—
—
—
32
Total revenue
26,040
28,375
107,162
120,112
Expenses:
Real estate operating expenses
10,573
11,423
42,040
45,043
Real estate taxes and insurance
3,389
5,541
18,211
22,716
Depreciation and amortization
10,609
10,756
42,609
44,774
General and administrative
2,628
2,815
12,427
13,884
Interest
6,340
5,911
24,718
26,424
Total expenses
33,539
36,446
140,005
152,841
Loss on extinguishment of debt
—
(428
)
(12
)
(1,042
)
Loss on sale of properties and impairment of assets held for sale, net
(2
)
(367
)
(12,902
)
(20,826
)
Interest income
230
394
986
2,090
Loss before taxes
(7,271
)
(8,472
)
(44,771
)
(52,507
)
Tax expense
52
54
189
216
Net loss
$
(7,323
)
$
(8,526
)
$
(44,960
)
$
(52,723
)
Weighted average number of shares outstanding, basic and diluted
103,690
103,567
103,640
103,510
Loss per share, basic and diluted:
Net loss per share, basic and diluted
$
(0.07
)
$
(0.08
)
$
(0.43
)
$
(0.51
)
Franklin Street Properties Corp. Financial Results
Supplementary Schedule B
Condensed Consolidated Balance Sheets
(Unaudited)
December 31,
December 31,
(in thousands, except share and par value amounts)
2025
2024
Assets:
Real estate assets:
Land
$
98,883
$
105,298
Buildings and improvements
1,091,728
1,096,265
Fixtures and equipment
11,572
11,053
1,202,183
1,212,616
Less accumulated depreciation
408,461
377,708
Real estate assets, net
793,722
834,908
Acquired real estate leases, less accumulated amortization of $14,648 and $13,613, respectively
2,490
4,205
Cash, cash equivalents and restricted cash
30,571
42,683
Tenant rent receivables
471
1,283
Straight-line rent receivable
38,744
37,727
Prepaid expenses and other assets
4,080
3,114
Office computers and furniture, net of accumulated depreciation of $1,047 and $1,073, respectively
136
70
Deferred leasing commissions, net of accumulated amortization of $14,566 and $14,195, respectively
22,670
22,941
Total assets
$
892,884
$
946,931
Liabilities and Stockholders’ Equity:
Liabilities:
Term loans payable, less unamortized financing costs of $441 and $2,220, respectively
$
125,555
$
124,491
Series A & Series B Senior Notes, less unamortized financing costs of $236 and $1,191, respectively
122,686
122,430
Accounts payable and accrued expenses
28,724
34,067
Accrued compensation
2,394
3,097
Tenant security deposits
6,198
6,237
Lease liability
316
707
Acquired unfavorable real estate leases, less accumulated amortization of $56 and $89, respectively
34
45
Total liabilities
285,907
291,074
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, 103,690,340 and 103,566,715 shares issued and outstanding, respectively
10
10
Additional paid-in capital
1,335,586
1,335,361
Accumulated distributions in excess of accumulated earnings
(728,619
)
(679,514
)
Total stockholders’ equity
606,977
655,857
Total liabilities and stockholders’ equity
$
892,884
$
946,931
Franklin Street Properties Corp. Financial Results
Supplementary Schedule C
Condensed Consolidated Statements of Cash Flows
(Unaudited)
For the
Year Ended
December 31,
(in thousands)
2025
2024
Cash flows from operating activities:
Net loss
$
(44,960
)
$
(52,723
)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization expense
45,330
47,742
Amortization of above and below market leases
—
(17
)
Amortization of other comprehensive income into interest expense
—
(355
)
Shares issued as compensation
225
270
Loss on extinguishment of debt
12
1,042
Loss on sale of properties and impairment of assets held for sale, net
12,902
20,826
Changes in operating assets and liabilities:
Tenant rent receivables
812
908
Straight-line rents
147
1,970
Lease acquisition costs
(1,171
)
(666
)
Prepaid expenses and other assets
(593
)
355
Accounts payable and accrued expenses
(3,982
)
(3,708
)
Accrued compensation
(703
)
(547
)
Tenant security deposits
(39
)
33
Payment of deferred leasing commissions
(4,227
)
(6,143
)
Net cash provided by operating activities
3,753
8,987
Cash flows from investing activities:
Property improvements, fixtures and equipment
(16,415
)
(25,213
)
Proceeds received from sales of properties
6,109
95,497
Net cash provided by (used in) investing activities
(10,306
)
70,284
Cash flows from financing activities:
Distributions to stockholders
(4,145
)
(4,140
)
Repayments of Bank note payable
—
(22,667
)
Repayments of Term loans payable
(716
)
(55,622
)
Repayments of Series A&B Senior Notes
(698
)
(76,379
)
Deferred financing costs
—
(5,660
)
Net cash used in financing activities
(5,559
)
(164,468
)
Net decrease in cash, cash equivalents and restricted cash
(12,112
)
(85,197
)
Cash, cash equivalents and restricted cash, beginning of year
42,683
127,880
Cash, cash equivalents and restricted cash, end of period
$
30,571
$
42,683
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
2026
365,916
7.6
%
2027
500,108
10.4
%
2028
242,046
5.0
%
2029
561,561
11.7
%
2030
268,950
5.6
%
Thereafter (2)
2,869,082
59.7
%
4,807,663
100.0
%
____________________
(1) Percentages are determined based upon total square footage.
(2) Includes 1,496,641 square feet of vacancies at our owned properties as of December 31, 2025.
(dollars & square feet in 000's)
As of December 31, 2025
% of
Square
% of
State
Properties
Investment
Portfolio
Feet
Portfolio
Colorado
4
$
427,404
53.8
%
2,142
44.5
%
Texas
7
256,088
32.3
%
1,908
39.7
%
Minnesota
3
110,230
13.9
%
758
15.8
%
Total
14
$
793,722
100.0
%
4,808
100.0
%
____________________
Franklin Street Properties Corp. Earnings Release
Supplementary Schedule E
Portfolio and Other Supplementary Information
(Unaudited & Approximated)
Recurring Capital Expenditures
For the
(in thousands)
For the Three Months Ended
Year Ended
31-Mar-25
30-Jun-25
30-Sep-25
31-Dec-25
31-Dec-25
Tenant improvements
$
2,374
$
1,415
$
4,469
$
2,023
$
10,281
Deferred leasing costs
545
1,702
929
1,050
4,226
Non-investment capex
1,258
750
753
1,154
3,915
$
4,177
$
3,867
$
6,151
$
4,227
$
18,422
(in thousands)
For the Three Months Ended
Year Ended
31-Mar-24
30-Jun-24
30-Sep-24
31-Dec-24
31-Dec-24
Tenant improvements
$
2,619
$
2,558
$
4,444
$
4,173
$
13,794
Deferred leasing costs
2,237
511
421
2,974
6,143
Non-investment capex
1,019
1,480
1,658
2,568
6,725
$
5,875
$
4,549
$
6,523
$
9,715
$
26,662
Square foot & leased percentages
December 31,
December 31,
2025
2024
Owned Properties:
Number of properties
14
14
Square feet
4,807,663
4,806,253
Leased percentage
68.9
%
70.3
%
Consolidated Property - Single Asset REIT (SAR):
Number of properties
—
1
Square feet
—
213,760
Leased percentage
—
4.1
%
Total Owned and Consolidated Properties:
Number of properties
14
15
Square feet
4,807,663
5,020,013
Leased percentage
68.9
%
67.5
%
Franklin Street Properties Corp. Earnings Release
Supplementary Schedule F
Percentage of Leased Space
(Unaudited & Estimated)
Third
Fourth
% Leased (1)
Quarter
% Leased (1)
Quarter
as of
Average %
as of
Average %
Property Name
Location
Square Feet
30-Sep-25
Leased (2)
31-Dec-25
Leased (2)
1
PARK TEN
Houston, TX
157,609
86.8
%
91.6
%
86.8
%
86.8
%
2
PARK TEN PHASE II
Houston, TX
156,746
76.3
%
75.7
%
76.3
%
76.3
%
3
GREENWOOD PLAZA
Englewood, CO
196,236
65.0
%
65.0
%
65.0
%
65.0
%
4
ADDISON
Addison, TX
289,333
67.7
%
67.7
%
67.7
%
67.7
%
5
LIBERTY PLAZA
Addison, TX
217,841
65.4
%
66.5
%
66.9
%
66.4
%
6
ELDRIDGE GREEN
Houston, TX
248,399
100.0
%
100.0
%
100.0
%
100.0
%
7
121 SOUTH EIGHTH ST
Minneapolis, MN
297,744
78.5
%
77.9
%
80.4
%
79.1
%
8
801 MARQUETTE AVE
Minneapolis, MN
129,691
91.8
%
91.8
%
91.8
%
91.8
%
9
LEGACY TENNYSON CTR
Plano, TX
209,562
60.9
%
60.9
%
60.9
%
60.9
%
10
WESTCHASE I & II
Houston, TX
629,025
66.2
%
65.7
%
66.2
%
66.2
%
11
1999 BROADWAY
Denver, CO
682,639
50.2
%
50.4
%
50.7
%
50.3
%
12
1001 17TH STREET
Denver, CO
650,607
75.1
%
75.1
%
76.4
%
75.6
%
13
PLAZA SEVEN
Minneapolis, MN
330,096
51.0
%
51.0
%
51.0
%
51.0
%
14
600 17TH STREET
Denver, CO
612,135
72.5
%
72.5
%
69.1
%
69.4
%
OWNED PORTFOLIO
4,807,663
68.9
%
69.0
%
68.9
%
68.6
%
____________________
(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 three months during the quarter.
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 total square feet:
As of December 31, 2025
% of
Tenant
Sq Ft
Portfolio
1
CITGO Petroleum Corporation
248,399
5.2
%
2
EOG Resources, Inc.
169,167
3.5
%
3
US Government
168,573
3.5
%
4
Kaiser Foundation Health Plan, Inc.
120,979
2.5
%
5
Deluxe Corporation
98,922
2.0
%
6
Ping Identity Corp.
89,856
1.9
%
7
Olin Corporation
81,480
1.7
%
8
Permian Resources Operating, LLC
67,856
1.4
%
9
Hall and Evans LLC
65,878
1.4
%
10
Cyxtera Management, Inc.
61,826
1.3
%
11
Precision Drilling (US) Corporation
59,569
1.2
%
12
PwC US Group
54,334
1.1
%
13
Coresite, LLC
49,518
1.0
%
14
Schwegman, Lundberg & Woessner, P.A.
46,269
1.0
%
15
Ark-La-Tex Financial Services, LLC.
41,011
0.9
%
16
Invenergy, LLC.
35,088
0.7
%
17
Chevron U.S.A., Inc.
35,088
0.7
%
18
Moss, Luse & Womble, LLC
34,071
0.7
%
19
QB Energy Operating, LLC.
34,063
0.7
%
20
International Business Machines Corporation
31,564
0.7
%
Total
1,593,511
33.1
%
Franklin Street Properties Corp. Earnings Release
Supplementary Schedule H
Reconciliation and Definitions of Funds From Operations (“FFO”) and
Adjusted Funds From Operations (“AFFO”)
A reconciliation of Net loss to FFO and AFFO is shown below and a definition of FFO and AFFO is provided on Supplementary Schedule I. Management believes FFO and AFFO are used broadly throughout the real estate investment trust (REIT) industry as measurements of performance. The Company has included the National Association of Real Estate Investment Trusts (NAREIT) FFO definition as of May 17, 2016 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 and AFFO may not be comparable to FFO or AFFO reported by other REITs or real estate companies that define FFO or AFFO differently.
Reconciliation of Net loss to FFO and AFFO:
Three Months Ended
Year Ended
December 31,
December 31,
(In thousands, except per share amounts)
2025
2024
2025
2024
Net loss
$
(7,323
)
$
(8,526
)
$
(44,960
)
$
(52,723
)
Loss on sale of properties and impairment of asset held for sale, net
2
367
12,902
20,826
Depreciation & amortization
10,609
10,755
42,609
44,757
NAREIT FFO
3,288
2,596
10,551
12,860
Lease Acquisition costs
153
111
456
426
Funds From Operations (FFO)
$
3,441
$
2,707
$
11,007
$
13,286
Funds From Operations (FFO)
$
3,441
$
2,707
$
11,007
$
13,286
Loss on extinguishment of debt
—
428
12
1,042
Amortization of deferred financing costs
677
703
2,722
2,968
Shares issued as compensation
—
—
225
270
Straight-line rent
188
720
147
1,969
Tenant improvements
(2,023
)
(4,173
)
(10,281
)
(13,794
)
Leasing commissions
(1,050
)
(2,974
)
(4,226
)
(6,143
)
Non-investment capex
(1,154
)
(2,568
)
(3,915
)
(6,725
)
Adjusted Funds From Operations (AFFO)
$
79
$
(5,157
)
$
(4,309
)
$
(7,127
)
Per Share Data
EPS
$
(0.07
)
$
(0.08
)
$
(0.43
)
$
(0.51
)
FFO
$
0.03
$
0.03
$
0.11
$
0.13
AFFO
$
0.00
$
(0.05
)
$
(0.04
)
$
(0.07
)
Weighted average shares (basic and diluted)
103,690
103,567
103,640
103,510
Funds From Operations (“FFO”)
The Company evaluates performance based on Funds From Operations, which we refer to as FFO, as management believes that FFO represents the most accurate measure of activity and is the basis for distributions paid to equity holders. The Company defines FFO as net income or loss (computed in accordance with GAAP), excluding gains (or losses) from sales of property, hedge ineffectiveness, acquisition costs of newly acquired properties that are not capitalized and lease acquisition costs that are not capitalized plus depreciation and amortization, including amortization of acquired above and below market lease intangibles and impairment charges on mortgage loans, properties or investments in non-consolidated REITs, and after adjustments to exclude equity in income or losses from, and, to include the proportionate share of FFO from, non-consolidated REITs.
FFO should not be considered as an alternative to net income or loss (determined in accordance with GAAP), nor as an indicator of the Company’s financial performance, nor as an alternative to cash flows from operating activities (determined in accordance with GAAP), nor as a measure of the Company’s liquidity, nor is it necessarily indicative of sufficient cash flow to fund all of the Company’s needs.
Other real estate companies and the National Association of Real Estate Investment Trusts, or NAREIT, may define this term in a different manner. We have included the NAREIT FFO as of May 17, 2016 in the 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 or loss and cash flows from operating, investing and financing activities in the consolidated financial statements.
Adjusted Funds From Operations (“AFFO”)
The Company also evaluates performance based on Adjusted Funds From Operations, which we refer to as AFFO. The Company defines AFFO as (1) FFO, (2) excluding loss on extinguishment of debt that is non-cash, (3) excluding our proportionate share of FFO and including distributions received, from non-consolidated REITs, (4) excluding the effect of straight-line rent, (5) plus the amortization of deferred financing costs, (6) plus the value of shares issued as compensation and (7) less recurring capital expenditures that are generally for maintenance of properties, which we call non-investment capex or are second generation capital expenditures. Second generation costs include re-tenanting space after a tenant vacates, which include tenant improvements and leasing commissions.
We exclude development/redevelopment activities, capital expenditures planned at acquisition and costs to reposition a property. We also exclude first generation leasing costs, which are generally to fill vacant space in properties we acquire or were planned for at acquisition.
AFFO should not be considered as an alternative to net income or loss (determined in accordance with GAAP), nor as an indicator of the Company’s financial performance, nor as an alternative to cash flows from operating activities (determined in accordance with GAAP), nor as a measure of the Company’s liquidity, nor is it necessarily indicative of sufficient cash flow to fund all of the Company’s needs. Other real estate companies may define this term in a different manner. We believe that in order to facilitate a clear understanding of the results of the Company, AFFO should be examined in connection with net income or loss and cash flows from operating, investing and financing activities in the consolidated financial statements.
Franklin Street Properties Corp. Earnings Release
Supplementary Schedule I
Reconciliation and Definition of Sequential Same Store results to property Net Operating Income (NOI) and Net Income
Net Operating Income (“NOI”)
The Company provides property performance based on Net Operating Income, which we refer to as NOI. Management believes that investors are interested in this information. NOI is a non-GAAP financial measure that the Company defines as net income or loss (the most directly comparable GAAP financial measure) plus general and administrative expenses, depreciation and amortization, including amortization of acquired above and below market lease intangibles and impairment charges, interest expense, less equity in earnings of nonconsolidated REITs, interest income, management fee income, hedge ineffectiveness, gains or losses on extinguishment of debt, gains or losses on the sale of assets and excludes non-property specific income and expenses. The information presented includes footnotes and the data is shown by region with properties owned in the periods presented, which we call Sequential Same Store. The comparative Sequential Same Store results include properties held for all periods presented. We exclude properties that have been placed in service, but that do not have operating activity for all periods presented, dispositions and significant nonrecurring income such as bankruptcy settlements and lease termination fees. NOI, as defined by the Company, may not be comparable to NOI reported by other REITs that define NOI differently. NOI should not be considered an alternative to net income or loss as an indication of our performance or to cash flows as a measure of the Company’s liquidity or its ability to make distributions. The calculations of NOI and Sequential Same Store are shown in the following table:
Rentable
Square Feet
Three Months Ended
Three Months Ended
Inc
%
(in thousands)
or RSF
31-Dec-25
30-Sep-25
(Dec)
Change
Region
MidWest
758
1,320
1,489
(169
)
(11.3
)%
South
1,908
4,740
4,144
596
14.4
%
West
2,142
5,683
5,450
233
4.3
%
Property NOI* from Owned Properties
4,808
11,743
11,083
660
6.0
%
Disposition and Acquisition Properties (a)
-
61
9
52
0.4
%
NOI*
4,808
$
11,804
$
11,092
$
712
6.4
%
Sequential Same Store
$
11,743
$
11,083
$
660
6.0
%
Less Nonrecurring
Items in NOI* (b)
194
52
142
(1.3
)%
Comparative
Sequential Same Store
$
11,549
$
11,031
$
518
4.7
%
Reconciliation to
Three Months Ended
Three Months Ended
Net loss
31-Dec-25
30-Sep-25
Net loss
$
(7,323
)
$
(8,326
)
Add (deduct):
Loss on extinguishment of debt
—
7
(Gain) loss on sale of properties and impairment of assets held for sale, net
2
—
Management fee income
(363
)
(345
)
Depreciation and amortization
10,609
10,550
Amortization of above/below market leases
—
—
General and administrative
2,628
3,034
Interest expense
6,340
6,348
Interest income
(230
)
(249
)
Non-property specific items, net
141
73
NOI*
$
11,804
$
11,092
(a) We define Disposition and Acquisition Properties as properties that were sold acquired or consolidated and do not have operating activity for all periods presented.
(b) Nonrecurring Items in NOI include proceeds from bankruptcies, lease termination fees or other significant nonrecurring income or expenses, which may affect comparability.
*Excludes NOI from investments in and interest income from secured loans to non-consolidated REITs.
View source version on businesswire.com: https://www.businesswire.com/news/home/20260309152026/en/
For Franklin Street Properties Corp.
Georgia Touma (877) 686-9496
Original: Franklin Street Properties Corp. Announces Fourth Quarter and Full Year 2025 Results
Enterprising Investor
2 years ago
Franklin Street Properties Corp. Announces First Quarter 2024 Results (4/30/24)
WAKEFIELD, Mass.--(BUSINESS WIRE)--Franklin Street Properties Corp. (the “Company”, “FSP”, “we” or “our”) (NYSE American: FSP), a real estate investment trust (REIT), announced its results for the first quarter ended March 31, 2024.
George J. Carter, Chairman and Chief Executive Officer, commented as follows:
“As the second quarter of 2024 begins, we continue to believe that the current price of our common stock does not accurately reflect the value of our underlying real estate assets. We will seek to increase shareholder value by continuing to (1) pursue the sale of select properties when we believe that short to intermediate term valuation potential has been reached and (2) strive to increase occupancy through the leasing of vacant space. We intend to use proceeds from property dispositions primarily for debt reductions.
During the first quarter of 2024, we sold an office property located in Richardson, Texas known as Collins Crossing for gross proceeds of approximately $35 million. Also, during the first quarter of 2024, we leased a total of 197,000 square feet of office space within our approximately 5.3 million square foot directly-owned property portfolio, including 136,000 square feet with existing tenant renewals and 61,000 square feet with new tenants.
On February 21, 2024, we repaid approximately $102 million of our debt and entered into amendments of our outstanding debt facilities pursuant to which all our debt now matures on April 1, 2026. As of March 31, 2024, our total indebtedness was approximately $303 million, equivalent to approximately $58 per square foot on our existing 5.3 million square foot directly-owned property portfolio. As of March 31, 2024, we had cash of approximately $37.7 million on the balance sheet.
We look forward to the remainder of 2024 and beyond with anticipation and optimism.”
Financial Highlights
GAAP net loss was $7.6 million or $0.07 per basic and diluted share for the three months ended March 31, 2024.
Funds From Operations (FFO) was $4.2 million, or $0.04 per basic and diluted share, for the three months ended March 31, 2024.
On February 21, 2024, we repaid approximately $102 million of debt and entered into amendments to each of our bank term loan, revolving line of credit agreement and Series A and Series B notes. The amendment to the revolving line of credit converted the revolving loan to a term loan. G&A expenses for the first quarter of 2024 were $0.3 million higher than the first quarter of 2023. However, G&A expenses for the first quarter of 2024 included approximately $0.4 million of expenses related to the debt amendments. Additional information on the amendments is available in our Quarterly Report on Form 10-Q for the three months ended March 31, 2024.
Leasing Highlights
During the three months ended March 31, 2024, we leased approximately 197,000 square feet, including 61,000 square feet of new leases.
Our directly-owned real estate portfolio of 16 owned properties, totaling approximately 5.3 million square feet, was approximately 73.3% leased as of March 31, 2024, compared to approximately 74.0% leased as of December 31, 2023. The decrease in the leased percentage is primarily a result of one property disposition during the three months ended March 31, 2024.
The weighted average GAAP base rent per square foot achieved on leasing activity during the three months ended March 31, 2024, was $26.96, or 13.8% higher than average rents in the respective properties for the year ended December 31, 2023. The average lease term on leases signed during the three months ended March 31, 2024, was 6.8 years compared to 6.8 years during the year ended December 31, 2023. Overall, the portfolio weighted average rent per occupied square foot was $30.81 as of March 31, 2024, compared to $30.72 as of December 31, 2023.
We are currently tracking more than 700,000 square feet of new prospective tenants, including approximately 350,000 square feet of prospective tenants that have identified our properties on their respective short lists of potential locations.
We believe that our continuing portfolio of real estate is well located, primarily in the Sunbelt and Mountain West geographic regions, and consists of high-quality assets with upside leasing potential.
Investment Highlights
We have primarily used asset sale disposition proceeds for debt reduction and remain committed to seeking to sell select properties during 2024 and to continue using proceeds primarily for debt reduction.
Since December 2020, our dispositions have resulted in aggregate gross proceeds of approximately $1 billion and reflect an average sales price per square foot of approximately $217.
On January 26, 2024, we completed the sale of Collins Crossing in Richardson, Texas for approximately $35 million in gross proceeds.
Dividends
On April 5, 2024, we announced that our Board of Directors declared a quarterly cash dividend for the three months ended March 31, 2024, of $0.01 per share of common stock that will be paid on May 9, 2024, to stockholders of record on April 19, 2024.
Consolidation of Sponsored REIT
As of January 1, 2023, we consolidated the operations of our Monument Circle sponsored REIT into our financial statements. On October 29, 2021, we agreed to amend and restate our existing loan to Monument Circle that is secured by a mortgage on real estate owned by Monument Circle, which we refer to as the Sponsored REIT Loan. The amended and restated Sponsored REIT Loan extended the maturity date from December 6, 2022 to June 30, 2023 (and was further extended to September 30, 2023 on June 26, 2023), increased the aggregate principal amount of the loan from $21 million to $24 million, and included certain other modifications. On September 26, 2023, the maturity date was further extended to September 30, 2024. In consideration of our agreement to amend and restate the Sponsored REIT Loan, we obtained from the stockholders of Monument Circle the right to vote their shares in favor of any sale of the property owned by Monument Circle any time on or after January 1, 2023. As a result of our obtaining this right to vote shares, GAAP variable interest entity (VIE) rules required us to consolidate Monument Circle as of January 1, 2023. A gain on consolidation of approximately $0.4 million was recognized in the three months ended March 31, 2023.
Additional information about the consolidation of Monument Circle can be found in Note 1, “Organization, Properties, Basis of Presentation, Financial Instruments, and Recent Accounting Standards – Variable Interest Entities (VIEs)” and Note 2, “Related Party Transactions and Investments in Non-Consolidated Entities - Management fees and interest income from loans”, in the Notes to Consolidated Financial Statements included in our Quarterly Report on Form 10-Q for the three months ended March 31, 2024.
Non-GAAP Financial Information
A reconciliation of Net income (loss) to FFO, Adjusted Funds From Operations (AFFO) and Sequential Same Store NOI and our definitions of FFO, AFFO and Sequential Same Store NOI can be found on Supplementary Schedules H and I.
2024 Net Income (Loss), FFO and Disposition Guidance
At this time, due primarily to economic conditions and uncertainty surrounding the timing and amount of proceeds received from property dispositions, we are continuing suspension of Net Income (Loss), FFO and property disposition guidance.
Real Estate Update
Supplementary schedules provide property information for the Company’s owned and consolidated properties as of March 31, 2024. 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.fspreit.com.
Today’s news release, along with other news about Franklin Street Properties Corp., is available on the Internet at www.fspreit.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 May 1, 2024, at 11:00 a.m. (ET) to discuss the first quarter 2024 results. To access the call, please dial 888-440-4368 and use conference ID 5398803. Internationally, the call may be accessed by dialing 646-960-0856 and using conference ID 5398803. To listen via live audio webcast, please visit the Webcasts & Presentations section in the Investor Relations section of the Company's website (www.fspreit.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 infill and central business district (CBD) office properties in the U.S. Sunbelt and Mountain West, as well as select opportunistic markets. FSP seeks value-oriented investments with an eye towards long-term growth and appreciation, as well as current income. FSP is a Maryland corporation that operates in a manner intended to qualify as a real estate investment trust (REIT) for federal income tax purposes. To learn more about FSP please visit our website at www.fspreit.com.
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