Franklin Street Properties Corp. Announces Fourth Quarter and Full Year 2024 Results

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 fourth quarter and the year ended December 31, 2024.

George J. Carter, Chairman and Chief Executive Officer, commented as follows:

“During the fourth quarter of 2024, we leased a total of approximately 252,000 square feet of office space within our approximately 4.8 million square foot directly–owned property portfolio.

As previously reported, on October 23, 2024, we completed the sale of our last property in Atlanta, Georgia. The property, known as Pershing Park Plaza, sold for a gross selling price of $34 million. On October 25, 2024, we repaid approximately $27.4 million of our debt with a portion of the net proceeds from the Pershing Park Plaza disposition. As of October 25, 2024 and December 31, 2024, our total indebtedness was approximately $250.3 million, equivalent to approximately $52 per square foot on our remaining approximately 4.8 million square foot directly-owned property portfolio.”

Financial Highlights

GAAP net loss was $8.5 million and $52.7 million, or $0.08 and $0.51 per basic and diluted share for the three and twelve months ended December 31, 2024, respectively.
Funds From Operations (FFO) was $2.7 million and $13.3 million, or $0.03 and $0.13 per basic and diluted share, for the three and twelve months ended December 31, 2024, respectively.

Leasing Highlights

During the twelve months ended December 31, 2024, we leased approximately 616,000 square feet, including 171,000 square feet of new leases.
Our directly-owned real estate portfolio of 14 owned properties, totaling approximately 4.8 million square feet, was approximately 70.3% leased as of December 31, 2024, compared to approximately 74.0% leased as of December 31, 2023. The decrease in the leased percentage is primarily a result of three property dispositions and lease expirations during the year ended December 31, 2024, which were partially offset by leasing completed during the year ended December 31, 2024.
The weighted average GAAP base rent per square foot achieved on leasing activity during the year ended December 31, 2024, was $30.06, or 8.2% higher than average rents in the respective properties for the year ended December 31, 2023. The average lease term on leases signed during the year ended December 31, 2024, was 6.3 years compared to 6.8 years during the year ended December 31, 2023. Overall, the portfolio weighted average rent per occupied square foot was $31.77 as of December 31, 2024, compared to $30.72 as of December 31, 2023.
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 continue to believe that the current price of our common stock does not accurately reflect the intrinsic value of our underlying real estate assets. We will continue to seek to increase shareholder value by pursuing the sale of select properties when we believe that short to intermediate term valuation potential has been reached.
Since December of 2020, our property dispositions have resulted in aggregate gross proceeds of approximately $1.1 billion and reflect an average sales price per square foot of approximately $211.
Since December of 2020, we have used net proceeds from property dispositions to reduce our total indebtedness by approximately 75%, from approximately $1.0 billion to approximately $250 million.
On October 23, 2024, we sold our last property in Atlanta, Georgia, known as Pershing Park Plaza. The property, an approximately 160,145 square foot office building, sold for a gross selling price of $34 million. On October 25, 2024, we used approximately $27.4 million of the net proceeds from the disposition to repay debt resulting in a reduction in total indebtedness to an aggregate of approximately $250.3 million, which reflects about $52 per square foot on the remaining approximately 4.8 million square foot directly owned portfolio.

Dividends

On January 10, 2025, we announced that our Board of Directors declared a quarterly cash dividend for the three months ended December 31, 2024, of $0.01 per share of common stock that will be paid on February 13, 2025, to stockholders of record on January 24, 2025.

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 extended to September 30, 2024 and on September 27, 2024, was further extended to September 30, 2025. 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 2, “Significant Accounting Policies – Variable Interest Entities (VIEs)” and Note 3, “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 Annual Report on Form 10-K for year ended December 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 December 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 February 12, 2025, at 11:00 a.m. (ET) to discuss the fourth quarter and full year 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 is focused on 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.

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 expectations for future potential leasing activity, expectations for future potential property dispositions, the payment of dividends and the repayment of debt 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, 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, delays in construction schedules, unanticipated increases in construction costs, 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, 2024, which 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, 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)	2024			2023		2024			2023

Revenue:
Rental	$	28,375		$	34,519	$	120,080		$	145,446
Other		—			252		32			261
Total revenue		28,375			34,771		120,112			145,707

Expenses:
Real estate operating expenses		11,423			13,105		45,043			50,732
Real estate taxes and insurance		5,541			5,943		22,716			27,200
Depreciation and amortization		10,756			11,958		44,774			54,738
General and administrative		2,815			3,172		13,884			14,021
Interest		5,911			6,219		26,424			24,318
Total expenses		36,446			40,397		152,841			171,009

Loss on extinguishment of debt		(428	)		—		(1,042	)		(106	)
Gain on consolidation of Sponsored REIT		—			—		—			394
Gain (loss) on sale of properties and impairment of assets held for sale, net		(367	)		8,701		(20,826	)		(23,384	)
Interest income		394			567		2,090			567
Income (loss) before taxes		(8,472	)		3,642		(52,507	)		(47,831	)
Tax expense		54			67		216			279
Net income (loss)	$	(8,526	)	$	3,575	$	(52,723	)	$	(48,110	)

Weighted average number of shares outstanding, basic and diluted		103,567			103,430		103,510			103,357

Net income (loss) per share, basic and diluted	$	(0.08	)	$	0.03	$	(0.51	)	$	(0.47	)

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)	2024			2023
Assets:
Real estate assets:
Land	$	105,298		$	110,298
Buildings and improvements		1,096,265			1,133,971
Fixtures and equipment		11,053			12,904
		1,212,616			1,257,173
Less accumulated depreciation		377,708			366,349
Real estate assets, net		834,908			890,824
Acquired real estate leases, less accumulated amortization of $13,613 and $20,413, respectively		4,205			6,694
Assets held for sale		—			73,318
Cash, cash equivalents and restricted cash		42,683			127,880
Tenant rent receivables		1,283			2,191
Straight-line rent receivable		37,727			40,397
Prepaid expenses and other assets		3,114			4,239
Office computers and furniture, net of accumulated depreciation of $1,073 and $1,020, respectively		70			123
Deferred leasing commissions, net of accumulated amortization of $14,195 and $16,008, respectively		22,941			23,664
Total assets	$	946,931		$	1,169,330

Liabilities and Stockholders’ Equity:
Liabilities:
Bank note payable	$	—		$	90,000
Term loans payable, less unamortized financing costs of $2,220 and $293, respectively		124,491			114,707
Series A & Series B Senior Notes, less unamortized financing costs of $1,191 and $329, respectively		122,430			199,670
Accounts payable and accrued expenses		34,067			41,879
Accrued compensation		3,097			3,644
Tenant security deposits		6,237			6,204
Lease liability		707			334
Acquired unfavorable real estate leases, less accumulated amortization of $89 and $396, respectively		45			87
Total liabilities		291,074			456,525

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, 103,566,715 and 103,430,353 shares issued and outstanding, respectively		10			10
Additional paid-in capital		1,335,361			1,335,091
Accumulated other comprehensive income		—			355
Accumulated distributions in excess of accumulated earnings		(679,514	)		(622,651	)
Total stockholders’ equity		655,857			712,805
Total liabilities and stockholders’ equity	$	946,931		$	1,169,330

Franklin Street Properties Corp. Financial Results Supplementary Schedule C Condensed Consolidated Statements of Cash Flows (Unaudited)

	For the
	Year Ended
	December 31,
(in thousands)	2024			2023
Cash flows from operating activities:
Net loss	$	(52,723	)	$	(48,110	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization expense		47,742			57,240
Amortization of above and below market leases		(17	)		(44	)
Amortization of other comprehensive income into interest expense		(355	)		(3,851	)
Shares issued as compensation		270			315
Loss on extinguishment of debt		1,042			106
Gain on consolidation of Sponsored REIT		—			(394	)
Loss on sale of properties and impairment of assets held for sale, net		20,826			23,384
Changes in operating assets and liabilities:
Tenant rent receivables		908			10
Straight-line rents		1,970			625
Lease acquisition costs		(666	)		(2,007	)
Prepaid expenses and other assets		355			382
Accounts payable and accrued expenses		(3,708	)		(2,709	)
Accrued compensation		(547	)		—
Tenant security deposits		33			494
Payment of deferred leasing commissions		(6,143	)		(7,575	)
Net cash provided by operating activities		8,987			17,866
Cash flows from investing activities:
Property improvements, fixtures and equipment		(25,213	)		(31,637	)
Consolidation of Sponsored REIT		—			3,048
Proceeds received from sales of properties		95,497			142,225
Net cash provided by investing activities		70,284			113,636
Cash flows from financing activities:
Distributions to stockholders		(4,140	)		(4,133	)
Proceeds received from termination of interest rate swap		—			4,206
Borrowings under Bank note payable		—			77,000
Repayments of Bank note payable		(22,667	)		(35,000	)
Repayments of Term loans payable		(55,622	)		(50,000	)
Repayments of Series A&B Senior Notes		(76,379	)		—
Deferred financing costs		(5,660	)		(2,327	)
Net cash used in financing activities		(164,468	)		(10,254	)
Net increase (decrease) in cash, cash equivalents and restricted cash		(85,197	)		121,248
Cash, cash equivalents and restricted cash, beginning of year		127,880			6,632
Cash, cash equivalents and restricted cash, end of period	$	42,683		$	127,880

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
2025	321,725	6.4	%
2026	609,509	12.1	%
2027	301,642	6.0	%
2028	259,540	5.2	%
2029	486,384	9.7	%
Thereafter (2)	3,041,213	60.6	%
	5,020,013	100.0	%

____________________
(1)		Percentages are determined based upon total square footage.
(2)		Includes 1,632,976 square feet of vacancies at our owned and consolidated properties as of December 31, 2024.

(dollars & square feet in 000’s)	As of December 31, 2024
				% of		Square	% of
State	Properties	Investment		Portfolio		Feet	Portfolio

Colorado	4	$	442,982	53.0	%	2,140	42.6	%
Texas	7		259,575	31.1	%	1,909	38.0	%
Minnesota	3		113,338	13.6	%	757	15.1	%
Indiana	1		19,013	2.3	%	214	4.3	%
Total	15	$	834,908	100.0	%	5,020	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								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


(in thousands)	For the Three Months Ended								Year Ended
	31-Mar-23		30-Jun-23		30-Sep-23		31-Dec-23		31-Dec-23
Tenant improvements	$	3,047	$	4,381	$	3,653	$	5,295	$	16,376
Deferred leasing costs		908		3,230		1,114		1,649		6,901
Non-investment capex		2,967		2,042		1,775		5,230		12,014
	$	6,922	$	9,653	$	6,542	$	12,174	$	35,291


Square foot & leased percentages	December 31,	December 31,
	2024	2023
Owned Properties:
Number of properties (a)	14	17
Square feet	4,806,253	5,565,782
Leased percentage	70.3%	74.0%

Consolidated Property – Single Asset REIT (SAR):
Number of properties	1	1
Square feet	213,760	213,760
Leased percentage	4.1%	4.1%

Total Owned and Consolidated Properties:
Number of properties	15	18
Square feet	5,020,013	5,779,542
Leased percentage	67.5%	71.5%

(a) Includes two properties that were classified as assets held for sale as of December 31, 2023.


Franklin Street Properties Corp. Earnings Release Supplementary Schedule F Percentage of Leased Space (Unaudited & Estimated)

	Property Name	Location	Square Feet	% Leased (1) as of 30-Sep-24	Third Quarter Average % Leased (2)	% Leased (1) as of 31-Dec-24	Fourth Quarter Average % Leased (2)

1	PARK TEN	Houston, TX	157,609	82.1%	82.1%	83.5%	83.5%
2	PARK TEN PHASE II	Houston, TX	156,746	66.9%	66.9%	75.5%	69.7%
3	GREENWOOD PLAZA	Englewood, CO	196,236	65.0%	65.0%	65.0%	65.0%
4	ADDISON	Addison, TX	289,333	79.4%	79.4%	79.9%	79.9%
5	LIBERTY PLAZA	Addison, TX	217,841	75.9%	75.9%	78.4%	76.2%
6	ELDRIDGE GREEN	Houston, TX	248,399	100.0%	100.0%	100.0%	100.0%
7	121 SOUTH EIGHTH ST	Minneapolis, MN	297,541	72.4%	75.6%	78.5%	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	51.0%	52.4%	51.0%	51.0%
10	WESTCHASE I & II	Houston, TX	629,025	68.8%	67.6%	65.5%	65.5%
11	1999 BROADWAY	Denver, CO	682,639	50.7%	50.7%	50.2%	50.4%
12	1001 17TH STREET	Denver, CO	649,400	76.5%	76.5%	75.4%	75.4%
13	PLAZA SEVEN	Minneapolis, MN	330,096	53.8%	55.0%	52.8%	52.2%
	PERSHING PLAZA (3)	Atlanta, GA	—	79.8%	79.8%	(3)	(3)
14	600 17TH STREET	Denver, CO	612,135	76.7%	77.1%	77.1%	76.8%
	OWNED PORTFOLIO		4,806,253	70.4%	70.6%	70.3%	69.8%

15	MONUMENT CIRCLE (4)	Indianapolis, IN	213,760	4.1%	4.1%	4.1%	4.1%
	OWNED & CONSOLIDATED PORTFOLIO		5,020,013	67.7%	67.9%	67.5%	67.0%

____________________
(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.
(3)		Property was sold on October 23, 2024.
(4)		Consolidated property as of January 1, 2023, which was previously a managed property.

Franklin Street Properties Corp. Earnings Release Supplementary Schedule G Largest 20 Tenants – FSP Owned and Consolidated Portfolio (Unaudited & Estimated) The following table includes the largest 20 tenants in FSP’s owned and consolidated portfolio based on total square feet: As of December 31, 2024

			% of
	Tenant	Sq Ft	Portfolio
1	CITGO Petroleum Corporation	248,399	4.9%
2	EOG Resources, Inc.	169,167	3.4%
3	US Government	168,573	3.4%
4	Kaiser Foundation Health Plan, Inc.	120,979	2.4%
5	Deluxe Corporation	98,922	2.0%
6	Ping Identity Corp.	89,856	1.8%
7	Olin Corporation	81,480	1.6%
8	Permian Resources Operating, LLC	67,856	1.3%
9	Hall and Evans LLC	65,878	1.3%
10	Cyxtera Management, Inc.	61,826	1.2%
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	0.9%
15	Invenergy, LLC.	42,505	0.9%
16	Ark-La-Tex Financial Services, LLC.	41,011	0.8%
17	Chevron U.S.A., Inc.	35,088	0.7%
18	QB Energy Operating, LLC	34,063	0.7%
19	CarOffer, LLC.	30,913	0.6%
20	WDT Acquisition Corporation	30,913	0.6%
	Total	1,597,119	31.8%

Contacts

Georgia Touma (877) 686-9496

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