Exhibit 99.1
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PRESS RELEASE | Franklin Street Properties Corp. |
401 Edgewater Place Suite 200 Wakefield, Massachusetts 01880 (781) 557-1300 www.franklinstreetproperties.com
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Contact: Georgia Touma (877) 686-9496 | For Immediate Release |
Franklin Street Properties Corp. Announces
First Quarter 2016 Results
Wakefield, MA—April 26, 2016—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 $26.0 million or $0.26 per share for the first quarter ended March 31, 2016. Net income was $2.6 million or $0.03 per share for the first quarter ended March 31, 2016.
The Company evaluates its performance based on FFO, Adjusted Funds From Operations (AFFO), Net Income and Earnings Per Share (EPS) and believes each is an important measure. A reconciliation of Net Income to FFO and AFFO, which are non-GAAP financial measures, is provided on page 3 of this press release.
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(in 000's except per share data) | | Three Months Ended March 31, | |
| | | | | | | | Increase | |
| | 2016 | | 2015 | | (Decrease) | |
| | | | | | | | | | |
Net Income | | $ | 2,579 | | $ | 12,533 | | $ | (9,954) | |
| | | | | | | | | | |
FFO | | $ | 26,037 | | $ | 25,672 | | $ | 365 | |
Per Share Data: | | | | | | | | | | |
EPS | | $ | 0.03 | | $ | 0.13 | | $ | (0.10) | |
FFO | | $ | 0.26 | | $ | 0.26 | | $ | — | |
AFFO | | $ | 0.21 | | $ | 0.21 | | $ | — | |
| | | | | | | | | | |
Weighted average shares (diluted) | | | 100,187 | | | 100,187 | | | — | |
Comparing results for the first quarter of 2016 to the same period in 2015, FFO increased $0.4 million to $26.0 million and was $0.26 per share for the first quarter of 2016 and the first quarter of 2015. The FFO increase was primarily from higher property income as a result of leasing and the acquisition of a property on April 8, 2015, which was partially offset by the impact of asset sales and loan repayments that occurred in the last twelve months. Net Income and EPS were $2.6 million and $0.03 per share for the first quarter of 2016, respectively, compared to Net Income of $12.5 million and EPS of $0.13 for the first quarter of 2015. Included in Net Income for the first quarter of 2015, were gains on sales of properties of $10.5 million or $0.10 per share. We did not sell any properties in the first quarter of 2016.
George J. Carter, President and CEO, commented as follows:
“For the first quarter of 2016, FSP’s funds from operations, or FFO, totaled approximately $26.0 million or $0.26 per share. These results are within our guidance range for the first quarter of 2016. Dividend distributions paid/declared for first quarter 2016 totaled approximately $19.0 million or $0.19 per share. Our initial FFO guidance for full year 2016 is being maintained and is estimated to be in the range of $1.01 to $1.07 per diluted share, while for the second quarter of 2016, we estimate FFO to be in the range of $0.24 to $0.26 per diluted share.
Our directly owned real estate portfolio of 35 properties totaling approximately 9.3 million square feet was approximately 90.2% leased as of March 31, 2016. We continued active leasing in the first quarter, much of it renewals ahead of future lease expirations. We anticipate continued significant leasing activity within the portfolio during 2016.
Subsequent to the end of the first quarter, on April 5, 2016, we sold our Maryland Heights, Missouri property, known as Lakeside Crossing I for $20.2 million. FSP will record a gain on sale for this property disposition of approximately $4.1 million in the second quarter of 2016. Property acquisition efforts are currently very active and are focused on CBD and urban infill office buildings located within our five core markets. We anticipate making one or more property acquisitions during 2016. Regarding our redevelopment efforts at 801 Marquette Avenue in downtown Minneapolis, Minnesota, after extensive costing analysis with our potential development partners and outside professionals, we have decided to redevelop the existing building ourselves, rather than raze it and build a new, mixed use tower with outside development partners. As previously announced, Ryan Companies US, Inc. will be the development manager and design/builder, Perkins+Will will lead the architectural design work and CBRE Group, Inc. will be the exclusive leasing agent. We are fully engaged with our outside professionals on this exciting redevelopment and will continue to provide updates as they become available.
As we continue 2016, our property portfolio is operating smoothly with existing and known upcoming vacancies actively being marketed to multiple potential tenants. We look forward with anticipation to 2016 and beyond.”
Dividend Update
On April 8, 2016, the Company announced that its Board of Directors declared a regular quarterly dividend for the three months ended March 31, 2016 of $0.19 per share of common stock that will be paid on May 12, 2016 to stockholders of record on April 22, 2016.
FFO Guidance
We are maintaining our full year FFO guidance for 2016 to be in the range of $1.01 to $1.07 per diluted share and, for the second quarter of 2016, we estimate FFO to be in the range of $0.24 to $0.26 per diluted share. This guidance (a) excludes the impact of future acquisitions, developments, dispositions, debt financings or repayments or other capital market transactions; (b) reflects estimates from our ongoing portfolio of properties, other real estate investments and G&A expenses; and (c) reflects our current expectations of economic conditions. We will update guidance quarterly in our earnings releases. There can be no assurance that the Company’s actual results will not differ materially from the estimates set forth above.
Real Estate Update
Supplementary schedules provide property information for the Company’s owned real estate portfolio and for two non-consolidated REITs in which the Company holds preferred stock interests as of March 31, 2016. 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.
Funds From Operations (FFO) and Adjusted Funds From Operations (AFFO)
A reconciliation of Net Income to FFO and AFFO is shown below and a definition of FFO and AFFO is provided on Supplementary Schedule H. Management believes FFO and AFFO are used broadly throughout the real estate investment trust (REIT) industry as measurements of performance. Management also believes that FFO and AFFO represent the most accurate measures of activity and are the basis for distributions paid to equity holders. The Company has included the NAREIT FFO definition in the table and notes that other REITs may not define FFO in accordance with the current NAREIT definition or may interpret the current NAREIT definition differently. The Company’s computation of FFO and AFFO may not be comparable to FFO or AFFO reported by other REITs or real estate companies that define FFO or AFFO differently.
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Reconciliation of Net Income to FFO and AFFO: | | Three Months Ended | |
| | March 31, | |
(In thousands, except per share amounts) | | 2016 | | 2015 | |
| | | | | | | |
Net income | | $ | 2,579 | | $ | 12,533 | |
Gain on sale of assets, less applicable income tax | | | — | | | (10,462) | |
GAAP loss from non-consolidated REITs | | | 286 | | | 322 | |
FFO from non-consolidated REITs | | | 645 | | | 601 | |
Depreciation & amortization | | | 22,527 | | | 22,678 | |
NAREIT FFO | | | 26,037 | | | 25,672 | |
Acquisition costs of new properties | | | — | | | — | |
Funds From Operations (FFO) | | $ | 26,037 | | $ | 25,672 | |
| | | | | | | |
Funds From Operations (FFO) | | $ | 26,037 | | $ | 25,672 | |
Reverse FFO from non-consolidated REITs | | | (645) | | | (601) | |
Distributions from non-consolidated REITs | | | 27 | | | 27 | |
Amortization of deferred financing costs | | | 517 | | | 517 | |
Straight-line rent | | | (1,275) | | | (69) | |
Tenant improvements | | | (1,929) | | | (2,936) | |
Leasing commissions | | | (1,613) | | | (830) | |
Non-investment capex | | | (438) | | | (643) | |
Adjusted Funds From Operations (AFFO) | | $ | 20,681 | | $ | 21,137 | |
| | | | | | | |
Per Share Data | | | | | | | |
EPS | | $ | 0.03 | | $ | 0.13 | |
FFO | | $ | 0.26 | | $ | 0.26 | |
AFFO | | $ | 0.21 | | $ | 0.21 | |
| | | | | | | |
Weighted average shares (basic and diluted) | | | 100,187 | | | 100,187 | |
Today’s news release, along with other news about Franklin Street Properties Corp., is available on the Internet at www.franklinstreetproperties.com. We routinely post information that may be important to investors in the Investor Relations section of our website. We encourage investors to consult that section of our website regularly for important information about us and, if they are interested in automatically receiving news and information as soon as it is posted, to sign up for E-mail Alerts.
Earnings Call
A conference call is scheduled for April 27, 2016 at 10:00 a.m. (ET) to discuss the first quarter 2016 results. To access the call, please dial 1-877-507-4376. Internationally, the call may be accessed by dialing 1-412-317-6014. To listen via live audio webcast, please visit the Webcasts & Presentations section in the Investor Relations section of the Company's website (www.franklinstreetproperties.com) at least ten minutes prior to the start of the call and follow the posted directions. The webcast will also be available via replay from the above location starting one hour after the call is finished.
About Franklin Street Properties Corp.
Franklin Street Properties Corp., based in Wakefield, Massachusetts, is focused on investing in institutional-quality office properties in the U.S. FSP’s strategy is to invest in select urban infill and central business district (CBD) properties, with primary emphasis on our top five markets of Atlanta, Dallas, Denver, Houston, and Minneapolis. FSP seeks value-oriented investments with an eye towards long-term growth and appreciation, as well as current income. FSP is a Maryland corporation that operates in a manner intended to qualify as a real estate investment trust (REIT) for federal income tax purposes. To learn more about FSP please visit our website at www.franklinstreetproperties.com.
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, 2015, 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
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Franklin Street Properties Corp. Financial Results | A-C |
Real Estate Portfolio Summary Information | D |
Portfolio and Other Supplementary Information | E |
Percentage of Leased Space | F |
Largest 20 Tenants – FSP Owned Portfolio | G |
Definition of Funds From Operations (FFO) | H |
Franklin Street Properties Corp. Financial Results
Supplementary Schedule A
Condensed Consolidated Income (Loss) Statements
(Unaudited)
| | | | | | | |
| | For the | |
| | Three Months Ended | |
| | March 31, | |
(in thousands, except per share amounts) | | 2016 | | 2015 | |
| | | | | | | |
Revenue: | | | | | | | |
Rental | | $ | 58,360 | | $ | 59,013 | |
Related party revenue: | | | | | | | |
Management fees and interest income from loans | | | 1,433 | | | 1,473 | |
Other | | | 20 | | | 21 | |
Total revenue | | | 59,813 | | | 60,507 | |
| | | | | | | |
Expenses: | | | | | | | |
Real estate operating expenses | | | 15,292 | | | 15,356 | |
Real estate taxes and insurance | | | 9,150 | | | 10,048 | |
Depreciation and amortization | | | 22,445 | | | 22,672 | |
Selling, general and administrative | | | 3,530 | | | 3,691 | |
Interest | | | 6,433 | | | 6,187 | |
Total expenses | | | 56,850 | | | 57,954 | |
| | | | | | | |
Income before interest income, equity in losses of non-consolidated REITs and taxes | | | 2,963 | | | 2,553 | |
Interest income | | | — | | | 1 | |
Equity in losses of non-consolidated REITs | | | (286) | | | (322) | |
Gain on sale of properties, less applicable income tax | | | — | | | 10,462 | |
| | | | | | | |
Income before taxes on income | | | 2,677 | | | 12,694 | |
Taxes on income | | | 98 | | | 161 | |
Net income | | $ | 2,579 | | $ | 12,533 | |
| | | | | | | |
Weighted average number of shares outstanding, basic and diluted | | | 100,187 | | | 100,187 | |
| | | | | | | |
Net income per share, basic and diluted | | $ | 0.03 | | $ | 0.13 | |
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) | | 2016 | | 2015 | |
Assets: | | | | | | | |
Real estate assets: | | | | | | | |
Land | | $ | 168,120 | | $ | 170,021 | |
Buildings and improvements | | | 1,625,819 | | | 1,637,066 | |
Fixtures and equipment | | | 2,649 | | | 2,528 | |
| | | 1,796,588 | | | 1,809,615 | |
Less accumulated depreciation | | | 309,307 | | | 299,991 | |
Real estate assets, net | | | 1,487,281 | | | 1,509,624 | |
Acquired real estate leases, less accumulated amortization of $117,134 and $112,844, respectively | | | 99,102 | | | 108,046 | |
Investment in non-consolidated REITs | | | 76,707 | | | 77,019 | |
Asset held for sale | | | 15,921 | | | — | |
Cash and cash equivalents | | | 14,316 | | | 18,163 | |
Restricted cash | | | 10 | | | 23 | |
Tenant rent receivables, less allowance for doubtful accounts of $130 and $130, respectively | | | 3,691 | | | 2,898 | |
Straight-line rent receivable, less allowance for doubtful accounts of $50 and $50, respectively | | | 49,696 | | | 48,502 | |
Prepaid expenses and other assets | | | 5,943 | | | 5,484 | |
Related party mortgage loan receivables | | | 79,575 | | | 118,641 | |
Other assets: derivative asset | | | — | | | 1,132 | |
Office computers and furniture, net of accumulated depreciation of $1,372 and $1,333, respectively | | | 438 | | | 484 | |
Deferred leasing commissions, net of accumulated amortization of $21,035 and $20,002, respectively | | | 28,705 | | | 28,999 | |
Total assets | | $ | 1,861,385 | | $ | 1,919,015 | |
| | | | | | | |
Liabilities and Stockholders’ Equity: | | | | | | | |
Liabilities: | | | | | | | |
Bank note payable | | $ | 265,000 | | $ | 290,000 | |
Term loans payable, less unamortized financing costs of $2,120 and $2,353, respectively | | | 617,880 | | | 617,647 | |
Accounts payable and accrued expenses | | | 37,791 | | | 49,489 | |
Accrued compensation | | | 1,274 | | | 3,726 | |
Tenant security deposits | | | 4,433 | | | 4,829 | |
Other liabilities: derivative liability | | | 13,226 | | | 8,243 | |
Acquired unfavorable real estate leases, less accumulated amortization of $9,822 and $9,368, respectively | | | 8,697 | | | 9,425 | |
Total liabilities | | | 948,301 | | | 983,359 | |
| | | | | | | |
Commitments and contingencies | | | | | | | |
| | | | | | | |
Stockholders’ Equity: | | | | | | | |
Preferred stock, $.0001 par value, 20,000,000 shares authorized, none issued or outstanding | | | - | | | - | |
Common stock, $.0001 par value, 180,000,000 shares authorized, 100,187,405 and 100,187,405 shares issued and outstanding, respectively | | | 10 | | | 10 | |
Additional paid-in capital | | | 1,273,556 | | | 1,273,556 | |
Accumulated other comprehensive loss | | | (13,226) | | | (7,111) | |
Accumulated distributions in excess of accumulated earnings | | | (347,256) | | | (330,799) | |
Total stockholders’ equity | | | 913,084 | | | 935,656 | |
Total liabilities and stockholders’ equity | | $ | 1,861,385 | | $ | 1,919,015 | |
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) | | 2016 | | 2015 | |
Cash flows from operating activities: | | | | | | | |
Net income | | $ | 2,579 | | $ | 12,533 | |
Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | | |
Depreciation and amortization expense | | | 22,962 | | | 23,189 | |
Amortization of above market lease | | | 81 | | | 6 | |
Equity in losses of non-consolidated REITs | | | 286 | | | 322 | |
Gain on sale of properties, less applicable income tax | | | — | | | (10,462) | |
Changes in operating assets and liabilities: | | | | | | | |
Restricted cash | | | 13 | | | 686 | |
Tenant rent receivables | | | (793) | | | 146 | |
Straight-line rents | | | (1,275) | | | (69) | |
Lease acquisition costs | | | (199) | | | (3) | |
Prepaid expenses and other assets | | | (791) | | | 283 | |
Accounts payable, accrued expenses and other items | | | (10,374) | | | (7,706) | |
Accrued compensation | | | (2,452) | | | (2,517) | |
Tenant security deposits | | | (396) | | | (230) | |
Payment of deferred leasing commissions | | | (1,825) | | | (1,116) | |
Net cash provided by operating activities | | | 7,816 | | | 15,062 | |
Cash flows from investing activities: | | | | | | | |
Property improvements, fixtures and equipment | | | (6,699) | | | (4,298) | |
Office computers and furniture | | | (21) | | | — | |
Distributions in excess of earnings from non-consolidated REITs | | | 27 | | | 27 | |
Repayment of related party mortgage loan receivable | | | 39,066 | | | — | |
Proceeds received on sales of real estate assets | | | — | | | 47,671 | |
Changes in deposits on real estate assets | | | — | | | (4,000) | |
Net cash provided by investing activities | | | 32,373 | | | 39,400 | |
Cash flows from financing activities: | | | | | | | |
Distributions to stockholders | | | (19,036) | | | (19,036) | |
Borrowings under bank note payable | | | 15,000 | | | 20,000 | |
Repayments of bank note payable | | | (40,000) | | | (48,000) | |
Net cash used in financing activities | | | (44,036) | | | (47,036) | |
Net increase (decrease) in cash and cash equivalents | | | (3,847) | | | 7,426 | |
Cash and cash equivalents, beginning of year | | | 18,163 | | | 7,519 | |
Cash and cash equivalents, end of period | | $ | 14,316 | | $ | 14,945 | |
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 | |
2016 | | 587,494 | | 6.3% | |
2017 | | 1,012,296 | | 10.9% | |
2018 | | 1,113,118 | | 11.9% | |
2019 | | 1,314,261 | | 14.1% | |
2020 | | 851,253 | | 9.1% | |
Thereafter (2) | | 4,446,827 | | 47.7% | |
| | 9,325,249 | | 100.0% | |
| (1) | | Percentages are determined based upon total square footage. |
| (2) | | Includes 917,040 square feet of current vacancies. |
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(dollars & square feet in 000's) | | As of March 31, 2016 | |
| | # of | | | | | % of | | Square | | % of | |
State | | Properties | | Investment | | Portfolio | | Feet | | Portfolio | |
| | | | | | | | | | | | |
Texas | | 9 | | $ | 363,725 | | 24.2% | | 2,418 | | 25.9% | |
Colorado | | 5 | | | 428,338 | | 28.5% | | 2,010 | | 21.6% | |
Georgia | | 4 | | | 286,124 | | 19.1% | | 1,838 | | 19.7% | |
Virginia | | 4 | | | 92,516 | | 6.2% | | 685 | | 7.3% | |
Minnesota (a) | | 1 | | | 26,544 | | 1.8% | | 306 | | 3.3% | |
Missouri (b) | | 3 | | | 61,734 | | 4.1% | | 478 | | 5.1% | |
North Carolina | | 2 | | | 54,805 | | 3.7% | | 322 | | 3.5% | |
Illinois | | 2 | | | 44,002 | | 2.9% | | 372 | | 4.0% | |
Maryland | | 1 | | | 50,797 | | 3.4% | | 325 | | 3.4% | |
Florida | | 1 | | | 41,545 | | 2.8% | | 213 | | 2.3% | |
Indiana | | 1 | | | 31,342 | | 2.1% | | 205 | | 2.2% | |
California | | 1 | | | 3,794 | | 0.3% | | 36 | | 0.4% | |
Washington | | 1 | | | 13,667 | | 0.9% | | 117 | | 1.3% | |
Total | | 35 | | $ | 1,498,933 | | 100.0% | | 9,325 | | 100.0% | |
| (a) | | Excludes approximately $4,269, which is our investment in a property being redeveloped. |
| (b) | | Includes asset held for sale of $15,921, which was sold on April 5, 2016. |
Franklin Street Properties Corp. Earnings Release
Supplementary Schedule E
Portfolio and Other Supplementary Information
(Unaudited & Approximated)
Recurring Capital Expenditures
Owned Portfolio
| | | | | | | | | | | | | | | | | | |
| | For the Three Months Ended | | Year ended |
| | 31-Mar-16 | | 31-Mar-15 | | 30-Jun-15 | | 30-Sep-15 | | 31-Dec-15 | | 31-Dec-15 |
| | | | | | | | | | | | | | | | | | |
Tenant improvements | | $ | 1,929 | | $ | 2,936 | | $ | 3,420 | | $ | 1,794 | | $ | 3,788 | | $ | 11,938 |
Deferred leasing costs | | | 1,613 | | | 830 | | | 1,539 | | | 1,490 | | | 3,952 | | | 7,811 |
Non-investment capex | | | 438 | | | 643 | | | 1,411 | | | 1,090 | | | 1,162 | | | 4,306 |
Total Capital Expenditures | | $ | 3,980 | | $ | 4,409 | | $ | 6,370 | | $ | 4,374 | | $ | 8,902 | | $ | 24,055 |
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Square foot & leased percentages | | March 31, | | December 31, | |
| | 2016 | | 2015 | |
Owned portfolio of commercial real estate | | | | | |
Number of properties (a) | | 35 | | 36 | |
Square feet | | 9,325,249 | | 9,494,953 | |
Leased percentage | | 90.2% | | 91.6% | |
| | | | | |
Investments in non-consolidated REITs | | | | | |
Number of properties | | 2 | | 2 | |
Square feet | | 1,396,071 | | 1,396,071 | |
Leased percentage | | 73.9% | | 73.5% | |
| | | | | |
Single Asset REITs (SARs) managed | | | | | |
Number of properties | | 6 | | 7 | |
Square feet | | 1,191,135 | | 1,487,026 | |
Leased percentage | | 75.8% | | 77.0% | |
| | | | | |
Total owned, investments & managed properties | | | | | |
Number of properties | | 43 | | 45 | |
Square feet | | 11,912,455 | | 12,378,050 | |
Leased percentage | | 86.8% | | 87.8% | |
| (a) | | Excludes property in redevelopment in 2016. |
The following table shows property information for our investments in non-consolidated REITs:
| | | | | | | | | | | |
| | | | | | Square | | % Leased | | % Interest | |
Single Asset REIT name | | City | | State | | Feet | | 31-Mar-16 | | Held | |
FSP 303 East Wacker Drive Corp. | | Chicago | | IL | | 861,000 | | 65.7% | | 43.7% | |
FSP Grand Boulevard Corp. | | Kansas City | | MO | | 535,071 | | 87.2% | | 27.0% | |
| | | | | | 1,396,071 | | 73.9% | | | |
Franklin Street Properties Corp. Earnings Release
Supplementary Schedule F
Percentage of Leased Space
(Unaudited & Estimated)
| | | | | | | | | | | | | | | |
| | | | | | | | | | Fourth | | | | First | |
| | | | | | | | % Leased (1) | | Quarter | | % Leased (1) | | Quarter | |
| | | | | | | | as of | | Average % | | as of | | Average % | |
| | Property Name | | Location | | Square Feet | | 31-Dec-15 | | Leased (2) | | 31-Mar-16 | | Leased (2) | |
| | | | | | | | | | | | | | | |
1 | | HILLVIEW CENTER | | Milpitas, CA | | 36,288 | | 100.0% | | 100.0% | | 100.0% | | 100.0% | |
2 | | FOREST PARK | | Charlotte, NC | | 62,212 | | 100.0% | | 100.0% | | 100.0% | | 100.0% | |
3 | | MEADOW POINT | | Chantilly, VA | | 138,537 | | 100.0% | | 100.0% | | 100.0% | | 100.0% | |
4 | | TIMBERLAKE | | Chesterfield, MO | | 234,023 | | 95.4% | | 94.3% | | 95.4% | | 95.4% | |
5 | | FEDERAL WAY | | Federal Way, WA | | 117,010 | | 66.8% | | 64.9% | | 61.6% | | 65.1% | |
6 | | NORTHWEST POINT | | Elk Grove Village, IL | | 176,848 | | 100.0% | | 100.0% | | 100.0% | | 100.0% | |
7 | | TIMBERLAKE EAST | | Chesterfield, MO | | 116,197 | | 96.2% | | 61.2% | | 96.2% | | 96.2% | |
8 | | PARK TEN | | Houston, TX | | 157,460 | | 63.1% | | 63.1% | | 63.1% | | 63.1% | |
9 | | ADDISON | | Addison, TX | | 290,041 | | 93.4% | | 93.4% | | 93.4% | | 93.4% | |
10 | | COLLINS CROSSING | | Richardson, TX | | 300,887 | | 100.0% | | 100.0% | | 100.0% | | 100.0% | |
11 | | GREENWOOD PLAZA | | Englewood, CO | | 196,236 | | 100.0% | | 100.0% | | 100.0% | | 100.0% | |
12 | | RIVER CROSSING | | Indianapolis, IN | | 205,059 | | 91.1% | | 91.1% | | 91.1% | | 91.1% | |
13 | | LIBERTY PLAZA | | Addison, TX | | 218,934 | | 81.8% | | 79.2% | | 80.9% | | 81.5% | |
14 | | INNSBROOK | | Glen Allen, VA | | 298,456 | | 100.0% | | 100.0% | | 100.0% | | 100.0% | |
15 | | 380 INTERLOCKEN | | Broomfield, CO | | 240,185 | | 97.1% | | 97.1% | | 97.1% | | 97.1% | |
16 | | BLUE LAGOON | | Miami, FL | | 212,619 | | 100.0% | | 100.0% | | 100.0% | | 100.0% | |
17 | | ELDRIDGE GREEN | | Houston, TX | | 248,399 | | 100.0% | | 100.0% | | 100.0% | | 100.0% | |
18 | | ONE OVERTON PARK | | Atlanta, GA | | 387,267 | | 85.0% | | 85.0% | | 85.0% | | 85.0% | |
19 | | 390 INTERLOCKEN | | Broomfield, CO | | 241,516 | | 84.6% | | 85.1% | | 84.6% | | 84.6% | |
20 | | EAST BALTIMORE | | Baltimore, MD | | 325,445 | | 85.4% | | 85.4% | | 83.6% | | 84.8% | |
21 | | PARK TEN PHASE II | | Houston, TX | | 156,746 | | 100.0% | | 100.0% | | 100.0% | | 100.0% | |
22 | | LAKESIDE CROSSING I | | Maryland Heights, MO | | 127,778 | | 100.0% | | 100.0% | | 100.0% | | 100.0% | |
23 | | LOUDOUN TECH | | Dulles, VA | | 136,658 | | 92.0% | | 92.0% | | 92.0% | | 92.0% | |
24 | | 4807 STONECROFT | | Chantilly, VA | | 111,469 | | 100.0% | | 100.0% | | 100.0% | | 100.0% | |
25 | | 121 SOUTH EIGHTH ST | | Minneapolis, MN | | 305,990 | | 88.3% | | 88.3% | | 56.2% | | 56.2% | |
| | 801 MARQUETTE AVE (3) | | Minneapolis, MN | | — | | 97.2% | | 97.2% | | (3) | | (3) | |
26 | | EMPEROR BOULEVARD | | Durham, NC | | 259,531 | | 100.0% | | 100.0% | | 100.0% | | 100.0% | |
27 | | LEGACY TENNYSON CTR | | Plano, TX | | 202,600 | | 100.0% | | 100.0% | | 100.0% | | 100.0% | |
28 | | ONE LEGACY | | Plano, TX | | 214,110 | | 100.0% | | 100.0% | | 100.0% | | 100.0% | |
29 | | 909 DAVIS | | Evanston, IL | | 195,245 | | 100.0% | | 100.0% | | 88.8% | | 88.8% | |
30 | | ONE RAVINIA DRIVE | | Atlanta, GA | | 386,603 | | 94.8% | | 94.8% | | 94.8% | | 94.8% | |
31 | | TWO RAVINIA | | Atlanta, GA | | 442,130 | | 80.8% | | 78.6% | | 84.0% | | 82.2% | |
32 | | WESTCHASE I & II | | Houston, TX | | 629,025 | | 87.0% | | 87.8% | | 87.0% | | 87.0% | |
33 | | 1999 BROADWAY | | Denver, CO | | 676,379 | | 82.7% | | 82.7% | | 83.0% | | 82.8% | |
34 | | 999 PEACHTREE | | Atlanta, GA | | 621,946 | | 95.0% | | 95.2% | | 95.3% | | 95.1% | |
35 | | 1001 17th STREET | | Denver, CO | | 655,420 | | 88.6% | | 87.6% | | 87.6% | | 87.9% | |
| | TOTAL WEIGHTED AVERAGE | | | | 9,325,249 | | 91.6% | | 90.8% | | 90.2% | | 90.2% | |
| (1) | | % Leased as of month's end includes all leases that expire on the last day of the quarter. |
| (2) | | Average quarterly percentage is the average of the end of the month leased percentage for each of the 3 months during the quarter. |
| (3) | | Property is being redeveloped in 2016. |
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, 2016
| | | | | | | |
| | | | | | % of | |
| | Tenant | | Sq Ft | | Portfolio | |
1 | | Quintiles Transnational Corp | | 259,531 | | 3.1% | |
2 | | CITGO Petroleum Corporation | | 248,399 | | 3.0% | |
3 | | Newfield Exploration Company | | 234,495 | | 2.8% | |
4 | | US Government | | 223,433 | | 2.7% | |
5 | | Sutherland Asbill Brennan LLP | | 222,422 | | 2.6% | |
6 | | Burger King Corporation | | 212,619 | | 2.5% | |
7 | | Denbury Onshore, LLC | | 202,600 | | 2.4% | |
8 | | SunTrust Bank | | 182,888 | | 2.2% | |
9 | | Centene Management Company, LLC | | 179,637 | | 2.1% | |
10 | | Citicorp Credit Services, Inc | | 176,848 | | 2.1% | |
11 | | T-Mobile South, LLC dba T-Mobile | | 151,792 | | 1.8% | |
12 | | Petrobras America, Inc. | | 144,813 | | 1.7% | |
13 | | Murphy Exploration & Production Company | | 144,677 | | 1.7% | |
14 | | Argo Data Resource Corporation | | 140,246 | | 1.7% | |
15 | | Houghton Mifflin Harcourt Publishing Company | | 128,226 | | 1.5% | |
16 | | Monsanto Company | | 127,778 | | 1.5% | |
17 | | Federal National Mortgage Association | | 123,144 | | 1.5% | |
18 | | Vail Corp d/b/a Vail Resorts | | 122,232 | | 1.5% | |
19 | | Kaiser Foundation Health Plan | | 120,979 | | 1.4% | |
20 | | Giesecke & Devrient America | | 112,110 | | 1.3% | |
| | Total | | 3,458,869 | | 41.1% | |
Franklin Street Properties Corp. Earnings Release
Supplementary Schedule H
Definition of Funds From Operations (“FFO”) and
Adjusted Funds From Operations (“AFFO”)
Funds From Operations (“FFO”)
The Company evaluates performance based on Funds From Operations, which we refer to as FFO. The Company defines FFO as net income (computed in accordance with GAAP), excluding gains (or losses) from sales of property and acquisition costs of newly acquired properties that are not capitalized, plus depreciation and amortization, including amortization of acquired above and below market lease intangibles and impairment charges on properties or investments in non-consolidated REITs, and after adjustments to exclude equity in income or losses from, and, to include the proportionate share of FFO from, non-consolidated REITs.
FFO should not be considered as an alternative to net income (determined in accordance with GAAP), nor as an indicator of the Company’s financial performance, nor as an alternative to cash flows from operating activities (determined in accordance with GAAP), nor as a measure of the Company’s liquidity, nor is it necessarily indicative of sufficient cash flow to fund all of the Company’s needs.
Other real estate companies and NAREIT, may define this term in a different manner. We have included the NAREIT FFO definition in our table and note that other REITs may not define FFO in accordance with the current NAREIT definition or may interpret the current NAREIT definition differently than we do.
We believe that in order to facilitate a clear understanding of the results of the Company, FFO should be examined in connection with net income and cash flows from operating, investing and financing activities in the consolidated financial statements.
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 the sum of (1) FFO; (2) excluding our proportionate share of FFO and including distributions received, from non-consolidated REITs; (3) excluding the effect of straight-line rent; (4) plus deferred financing costs, (5) less recurring capital expenditures that are generally for maintenance of properties, which we call non-investment capex or are second generation capital expenditures. Second generation costs include re-tenanting space after a tenant vacates, which include tenant improvements and leasing commissions.
We exclude development/redevelopment activities, capital expenditures planned at acquisition and costs to reposition a property. We also exclude first generation leasing costs, which are generally to fill vacant space in properties we acquire or were planned for at acquisition.
AFFO should not be considered as an alternative to net income (determined in accordance with GAAP), as an indicator of the Company’s financial performance, nor as an alternative to cash flows from operating activities (determined in accordance with GAAP), nor as a measure of the Company’s liquidity, nor is it necessarily indicative of sufficient cash flow to fund all of the Company’s needs. Other real estate companies may define this term in a different manner. We believe that in order to facilitate a clear understanding of the results of the Company, AFFO should be examined in connection with net income and cash flows from operating, investing and financing activities in the consolidated financial statements.
