Franklin Street Properties Corp.

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Franklin Street Properties Corp. Announces Second Quarter 2013 Results

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 $22.1 million or $0.24 per share for the second quarter ended June 30, 2013. Net income was $4.7 million or $0.05 per share for the second quarter.

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 June 30,         Six Months Ended June 30,
(in 000's except per share data) 2013     2012    

Increase

(Decrease)

2013     2012    

Increase

(Decrease)

 
Net Income $ 4,741   $ 5,434   $ (693 ) $ 9,142   $ 11,172   $ (2,030 )
 
FFO $ 22,130   $ 19,041   $ 3,089   $ 42,747   $ 38,612   $ 4,135  
Per Share Data:
EPS $ 0.05 $ 0.07 $ (0.02 ) $ 0.10 $ 0.13 $ (0.03 )
FFO $ 0.24 $ 0.23 $ 0.01 $ 0.49 $ 0.47 $ 0.02
 

Weighted average shares (diluted)

  91,847     82,937       8,909     87,417     82,937       4,479  
 

Comparing results for the second quarter of 2013 to the same period in 2012, FFO increased $3.1 million or $0.01 per share. The FFO increase was primarily from higher property income due to three 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 $4.7 million or $0.05 per share for the second quarter of 2013 compared to net income of $5.4 million or $0.07 per share for the second quarter of 2012.

Comparing results for the six months ended June 30, 2013 to 2012, FFO increased $4.1 million or $0.02 per share. The FFO increase was primarily from higher property income due to three 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 $9.1 million and $0.10 per share, respectively, for the six months ended June 30, 2013 compared to net income of $11.2 million and $0.13 per share for the same period in 2012.

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

“For the second quarter of 2013, FSP's profits as represented by FFO totaled approximately $22.1 million or $0.24 per share compared to the first quarter of 2013 where FFO totaled approximately $20.6 million or $0.25 per share. Weighted average shares outstanding rose in the second quarter of 2013 as a result of our common stock offering of 17,250,000 shares completed on May 15, 2013. Proceeds from our stock offering were not fully deployed into additional planned property investments until July 1, 2013, the start of the third quarter. Consequently, there was some per-share dilution of FFO for the second quarter. The impact of fully investing the net proceeds from our recent stock offering should be visible in our third quarter 2013 results. Dividend distributions declared for the second quarter of 2013, which are payable on August 15, 2013, will be approximately $19 million or $0.19 per share.

Our directly-owned real estate portfolio of 38 properties, totaling 8,529,752 square feet, was approximately 94.4% leased as of June 30, 2013, unchanged from the first quarter of 2013. We anticipate continued organic growth in rental revenue/FFO from our existing portfolio of properties in the second half of this year as we begin to realize the benefit of significant new leases signed in recent quarters and as continuing "same-store" rental increases positively affect profits. Our property portfolio of office assets has relatively modest lease expirations over the next one and a half years, which we continue to proactively reduce. As of the end of the second quarter, only 1.2% of our commercial square footage is scheduled to expire during the balance of 2013, down from 2.2% at the end of the first quarter of 2013.

Growth in FSP's real estate assets and broader capital structure has been significant since the beginning of the second quarter of 2013, and we plan to continue to actively pursue additional growth opportunities that we believe are available to us. On May 15, 2013, we completed a common stock offering of 17,250,000 shares, providing the Company with proceeds of approximately $230.7 million. On May 22, 2013, we acquired a 680,277 rentable square foot office property for $183 million, located in the central business district of Denver, Colorado, one of FSP's primary markets. On July 1, 2013, we acquired a 621,007 rentable square foot office property for $157.9 million located in the mid-town submarket of Atlanta, Georgia, another one of FSP's primary markets. On July 15, 2013, we signed an agreement to purchase (subject to customary due diligence, etc.) a 655,565 rentable square foot office property located in the central business district of Denver, Colorado for $217 million. This second Denver central business district property, whose address is 1001 17th Street, is scheduled to close on August 28, 2013 (subject to successful due diligence, etc.). Capital to facilitate this acquisition, as well as for other uses, is anticipated to be provided by certain members of our existing bank group in the form of an unsecured fixed-rate term loan.

Continued growth, both organically and through additional property acquisitions, makes us very optimistic about our profit performance potential for the second half of 2013 and beyond.”

Dividend Announcement

On July 12, 2013, the Company announced that its Board of Directors declared a regular quarterly dividend for the three months ended June 30, 2013 of $0.19 per share of common stock payable on August 15, 2013 to stockholders of record on July 26, 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 June 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 July 31, 2013 at 10:00 a.m. (ET) to discuss the second 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 I. 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 Six Months Ended

June 30,

June 30,
(In thousands, except per share amounts) 2013     2012 2013     2012
 
Net income $ 4,741 $ 5,434 $ 9,142 $ 11,172
Less gain on sale of properties - - - -
GAAP (income) loss from non-consolidated REITs 196 (494 ) 383 (885 )
Distributions from non-consolidated REITs 27 898 54 1,827
Depreciation & amortization   17,045         13,203     33,029         26,498  
NAREIT FFO 22,009 19,041 42,608 38,612
Acquisition costs of new properties   133         -     150         -  
Funds From Operations (FFO) $ 22,142       $ 19,041   $ 42,758       $ 38,612  
 
Per Share Data
EPS $ 0.05 $ 0.07 $ 0.10 $ 0.13
FFO $ 0.24 $ 0.23 $ 0.49 $ 0.47
 
Weighted average shares (basic and diluted)   91,847         82,937     87,417         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
Quarterly Information – Prior Four Quarters F
Percentage of Leased Space G
Largest 20 Tenants – FSP Owned Portfolio H
Definition of Funds From Operations (FFO) I
 
Franklin Street Properties Corp. Financial Results
Supplementary Schedule A
Condensed Consolidated Income (Loss) Statements
(Unaudited)
         
For the For the
Three Months Ended Six Months Ended
        June 30,     June 30,
(in thousands, except per share amounts)       2013     2012     2013     2012
       
Revenue:
Rental $ 46,322 $ 35,570 $ 89,469 $ 71,873
Related party revenue:
Management fees and interest income from loans 1,643 3,045 3,265 5,661
Other         12         39         43         73  
Total revenue         47,977         38,654         92,777         77,607  
 
Expenses:
Real estate operating expenses 11,116 8,604 21,886 17,301
Real estate taxes and insurance 7,311 5,493 13,908 11,189
Depreciation and amortization 17,124 13,003 33,111 26,074
Selling, general and administrative 3,204 2,236 5,736 4,313
Interest         4,174         4,037         8,382         7,714  
                           
Total expenses         42,929         33,373         83,023         66,591  
 
Income before interest income, equity in earnings of
non-consolidated REITs and taxes 5,048 5,281 9,754 11,016
Interest income 4 4 5 12
Equity in earnings (losses) of non-consolidated REITs         (196 )       494         (383 )       885  
 
Income before taxes on income 4,856 5,779 9,376 11,913
Taxes on income         115         77         234         156  
 
Income from continuing operations         4,741         5,702         9,142         11,757  
 
Discontinued operations:
Loss from discontinued operations, net of income tax         -         (268 )       -         (585 )
Total discontinued operations         -         (268 )       -         (585 )
 
Net income       $ 4,741       $ 5,434       $ 9,142       $ 11,172  
 
Weighted average number of shares outstanding,
basic and diluted         91,847         82,937         87,417         82,937  
 
Earnings per share, basic and diluted, attributable to:
Continuing operations $ 0.05 $ 0.07 $ 0.10 $ 0.14
Discontinued operations         -         -         -         (0.01 )
Net income per share, basic and diluted       $ 0.05       $ 0.07       $ 0.10       $ 0.13  
 
Franklin Street Properties Corp. Financial Results
Supplementary Schedule B
Condensed Consolidated Balance Sheets
(Unaudited)
           
June 30, December 31,
(in thousands, except share and par value amounts)       2013       2012
Assets:
Real estate assets, net $ 1,288,025 $ 1,142,628
Acquired real estate leases, less accumulated amortization
of $51,938 and $40,062, respectively 132,662 111,982
Investment in non-consolidated REITs 81,523 81,960
Cash and cash equivalents 24,962 21,267
Restricted cash 602 575
Tenant rent receivables, less allowance for doubtful accounts
of $110 and $1,300, respectively 2,331 1,749
Straight-line rent receivable, less allowance for doubtful accounts
of $135 and $135, respectively 37,952 35,441
Prepaid expenses 1,760 1,106
Related party mortgage loan receivables 97,846 93,896
Other assets 10,262 12,655
Other assets: derivative asset 6,739 -
Office computers and furniture, net of accumulated depreciation
of $658 and $584, respectively 510 544
Deferred leasing commissions, net of accumulated amortization
of $13,325 and $11,812, respectively         24,877           23,376  
Total assets       $ 1,710,051         $ 1,527,179  
 
Liabilities and Stockholders’ Equity:
Liabilities:
Bank note payable $ 181,500 $ 216,750
Term loan payable 400,000 400,000
Accounts payable and accrued expenses 29,971 31,122
Accrued compensation 1,677 2,540
Tenant security deposits 3,074 2,489
Other liabilities: derivative liability - 1,219
Acquired unfavorable real estate leases, less accumulated amortization
of $5,644 and $4,870, respectively         12,785           8,310  
Total liabilities         629,007           662,430  
 
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 income (loss) 6,739 (1,219 )
Accumulated distributions in excess of accumulated earnings         (199,290 )         (176,916 )
Total stockholders’ equity         1,081,044           864,749  
Total liabilities and stockholders’ equity       $ 1,710,051         $ 1,527,179  
 
Franklin Street Properties Corp. Financial Results
Supplementary Schedule C
Condensed Consolidated Statements of Cash Flows
(Unaudited)
 
For the
Six Months Ended
June 30,
(in thousands)   2013       2012
Cash flows from operating activities:      
Net income $ 9,142 $ 11,172
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense 33,968 27,495
Amortization of above market lease (82 ) 20
Equity in (earnings) losses of non-consolidated REITs 383 (885 )
Distributions from non-consolidated REITs - 993
Increase (decrease) in bad debt reserve (1,190 ) 65
Changes in operating assets and liabilities:
Restricted cash (27 ) (40 )
Tenant rent receivables, net 608 (8 )
Straight-line rents, net (1,842 ) (2,571 )
Lease acquisition costs (669 ) (2,026 )
Prepaid expenses and other assets, net (870 ) (1,512 )
Accounts payable and accrued expenses (1,244 ) (1,395 )
Accrued compensation (863 ) (1,278 )
Tenant security deposits 585 105
Payment of deferred leasing commissions     (3,711 )         (1,513 )
Net cash provided by operating activities     34,188           28,622  
Cash flows from investing activities:
Purchase of real estate assets, office computers and furniture (164,189 ) (7,112 )
Acquired real estate leases (28,105 ) -
Investments in non-consolidated REITs 4,752 (1 )
Distributions in excess of earnings from non-consolidated REITs 54 834
Investment in related party mortgage loan receivable (3,950 ) (37,020 )
Changes in deposits on real estate assets     (3,000 )         -  
Net cash used in investing activities     (194,438 )         (43,299 )
Cash flows from financing activities:
Proceeds from stock offering 241,500 -
Offering costs (10,789 ) -
Distributions to stockholders (31,516 ) (31,516 )
Borrowings (repayments) under bank note payable     (35,250 )         45,000  
Net cash provided by financing activities     163,945           13,484  
Net increase (decrease) in cash and cash equivalents 3,695 (1,193 )
Cash and cash equivalents, beginning of period     21,267           23,813  
Cash and cash equivalents, end of period   $ 24,962         $ 22,620  
 
          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 102,195 1.2%
2014 382,485 4.5%
2015 1,165,200 13.7%
2016 990,188 11.6%
2017 967,183 11.3%
Thereafter (2) 4,922,501       57.7%  
8,529,752       100.0%  
 

(1) Percentages are determined based upon square footage of expiring commercial leases.
(2) Includes 476,581 square feet of current vacancies.

                             
 
(dollars & square feet in 000's) As of June 30, 2013
# of % of Square % of

State

Properties Investment Portfolio Feet Portfolio
 
Texas 11 $   416,186 32.3% 2,659 31.2%
Colorado 5 278,204 21.6% 1,462 17.1%
Georgia 2 107,477 8.3% 774 9.1%
Virginia 4 97,557 7.6% 684 8.0%
Minnesota 2 40,951 3.2% 628 7.4%
Missouri 3 64,991 5.0% 477 5.6%
North Carolina 3 66,268 5.2% 431 5.0%
Illinois 2 48,953 3.8% 372 4.4%
Maryland 1 53,533 4.2% 326 3.8%
Florida 1 44,894 3.5% 213 2.5%
Indiana 1 34,284 2.7% 205 2.4%
California 2 21,167 1.6% 182 2.1%
Washington 1           13,560       1.0% 117       1.4%
38       $   1,288,025       100.0% 8,530       100.0%
 
Franklin Street Properties Corp. Earnings Release
Supplementary Schedule E
Portfolio and Other Supplementary Information
(Unaudited & Approximated)
                       
Capital Expenditures
Owned Portfolio Three Months Ended Six Months Ended
(in thousands) 30-Jun-13 30-Jun-12 30-Jun-13 30-Jun-12
 
Tenant improvements $ 5,755 $ 2,705 $ 7,484 $ 5,719
Deferred leasing costs 1,087 1,343 3,900 3,539
Building improvements   1,622   1,003   2,740   1,749
$ 8,464 $ 5,051 $ 14,124 $ 11,007
 
Square foot & leased percentages       June 30,       December 31,
  2013 2012
 
Owned portfolio of commercial real estate
Number of properties 38 37
Square feet 8,529,752 7,854,679
Leased percentage 94.4% 94.0%
 
Investments in non-consolidated REITs
Number of properties 2 2
Square feet 1,395,500 1,392,316
Leased percentage 67.6% 65.2%
 
Single Asset REITs (SARs) managed
Number of properties 13 13
Square feet 3,323,566 3,323,566
Leased percentage 83.9% 87.2%
 
Total owned, investments & managed properties
Number of properties 53 52
Square feet 13,248,818 12,570,561
Leased percentage 88.9% 89.0%
 

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

            Square     % Leased     % Interest

Single Asset REIT name

City

State

Feet

30-Jun-13

Held

FSP 303 East Wacker Drive Corp. Chicago IL 860,429 60.0% 43.7%
FSP Grand Boulevard Corp. Kansas City MO 535,071     79.9% 27.0%
1,395,500     67.6%
 
Franklin Street Properties Corp. Earnings Release
Supplementary Schedule F: Quarterly Information
(Unaudited)
               
(in thousands)
Q1 Q4 Q3 Q2
Revenue: 2013 2012 2012 2012
Rental $ 43,147 $ 41,532 $ 38,251 $ 35,570
Related party revenue:
Management fees and interest income from loans 1,622 1,801 3,485 3,045
Other         31           87       39       39  
Total revenues         44,800           43,420       41,775       38,654  
Expenses:
Real estate operating expenses 10,770 10,501 9,639 8,604
Real estate taxes and insurance 6,597 5,960 5,764 5,493
Depreciation and amortization 15,987 15,226 13,572 13,003
Selling, general and administrative 2,532 2,462 3,141 2,236
Interest         4,208           4,167       4,187       4,037  
Total expenses         40,094           38,316       36,303       33,373  
 

Income before interest income, equity in earnings of

non-consolidated REITs and taxes on income

4,706 5,104 5,472 5,281
Interest income 1 34 5 4
Equity in earnings of non-consolidated REITs         (187 )         972       176       494  
 
Income before taxes on income 4,520 6,110 5,653 5,779
Taxes on income         119           99       80       77  
 
Income from continuing operations         4,401           6,011       5,573       5,702  
Discontinued operations:
Income from discontinued operations, net of tax - (26 ) (271 ) (268 )
Provision for loss on sale of property         -           (526 )     (14,300 )     -  
Total discontinued operations         -           (552 )     (14,571 )     (268 )
 
Net income       $ 4,401         $ 5,459     $ (8,998 )   $ 5,434  
 
 
FFO calculations:
 
Net income       $ 4,401         $ 5,459     $ (8,998 )   $ 5,434  
(Gain) Loss on sale of assets - 526 14,300 -
GAAP income from non-consolidated REITs 187 (972 ) (176 ) (494 )
Distributions from non-consolidated REITs 27 76 907 898
Acquisition costs 17 186 101 -
Depreciation of real estate & intangible amortization 15,984 15,241 13,779 13,203
                         
Funds From Operations (FFO)       $ 20,616         $ 20,516     $ 19,913     $ 19,041  
 
Franklin Street Properties Corp. Earnings Release
Supplementary Schedule G
Percentage of Leased Space
(Unaudited & Estimated)
 

 

           
First Second
% Leased (1) Quarter % Leased (1) Quarter
as of Average % as of Average %

Property Name

Location

Square Feet

31-Mar-13

Leased (2)

30-Jun-13

Leased (2)

 
1 PARK SENECA Charlotte, NC 109,674 78.1% 77.9% 79.3% 79.1%
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% 97.5% 98.3% 98.3%
7 FEDERAL WAY Federal Way, WA 117,010 48.4% 47.4% 48.4% 48.4%
8 NORTHWEST POINT Elk Grove Village, IL 176,848 100.0% 100.0% 100.0% 100.0%
9 TIMBERLAKE EAST Chesterfield, MO 116,197 97.0% 97.0% 94.6% 95.4%
10 PARK TEN Houston, TX 157,460 100.0% 99.1% 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 98.4% 98.4% 95.4% 95.4%
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 97.3% 93.9% 98.2% 97.6%
16 LIBERTY PLAZA Addison, TX 218,934 80.4% 82.0% 84.6% 83.2%
17 INNSBROOK Glen Allen, VA 298,456 99.0% 99.0% 99.0% 99.0%
18 380 INTERLOCKEN Broomfield, CO 240,184 86.3% 86.7% 87.6% 86.7%
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 117,217 100.0% 94.5% 92.3% 94.8%
22 ONE OVERTON PARK Atlanta, GA 387,267 97.9% 97.2% 98.3% 98.2%
23 390 INTERLOCKEN Broomfield, CO 241,516 83.8% 87.8% 79.8% 80.0%
24 EAST BALTIMORE Baltimore, MD 325,445 77.3% 77.3% 76.8% 76.3%
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 474,403 90.7% 89.9% 90.7% 90.7%
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 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 96.3% 96.3% 96.6% 96.6%
38 1999 BROADWAY Denver, CO 673,793 N/A N/A 95.9% 95.8%
                 
TOTAL WEIGHTED AVERAGE 8,529,752   94.4%   94.3%   94.4%   94.3%

 

(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.

Franklin Street Properties Corp. Earnings Release
Supplementary Schedule H
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 June 30, 2013
% of

Tenant

Sq Ft

SIC Code

Portfolio

1 TCF National Bank 263,111 60 3.1%
2 Quintiles Transnational Corp 259,531 87 3.0%
3 CITGO Petroleum Corporation 248,399 29 2.9%
4 US Government (a) 229,758 92 2.7%
5 Burger King Corporation 212,619 58 2.5%
6 Denbury Onshore, LLC 202,600 13 2.4%
7 RGA Reinsurance Company 197,354 63 2.3%
8 SunTrust Bank 182,888 60 2.1%
9 Citicorp Credit Services, Inc 176,848 61 2.1%
10 C.H. Robinson Worldwide, Inc 153,028 47 1.8%
11 T-Mobile South, LLC dba T-Mobile 151,792 48 1.8%
12 Houghton Mifflin Harcourt Publishing Company 150,050 27 1.8%
13 Petrobras America, Inc. 144,813 13 1.7%
14 Murphy Exploration & Production Company 144,677 13 1.7%
15 Argo Data Resource Corporation 138,540 57 1.6%
16 Giesecke & Devrient America, Inc. 135,888 73 1.6%
17 Monsanto Company 127,778 28 1.5%
18 Federal National Mortgage Association 123,144 61 1.4%
19 AT&T Services, Inc. 122,300 48 1.4%
20 Vail Holdings, Inc. 122,232 79 1.4%
Total 3,487,350 40.8%
 
(a) Includes 180,444 and 37,813 square feet which expire in 2018 & 2014, respectively.
The remaining 11,501 square feet expire between 2015 - 2020.
 

Franklin Street Properties Corp. Earnings Release
Supplementary Schedule I
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.

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

Source: Franklin Street Properties Corp.

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