UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
July 28, 2015
Franklin Street Properties Corp. |
(Exact name of registrant as specified in its
charter)
Maryland |
001-32470 |
04-3578653 |
(State or other jurisdiction
of incorporation) |
(Commission
File Number) |
(IRS Employer
Identification No.) |
401 Edgewater Place, Suite 200, Wakefield, Massachusetts |
01880 |
(Address of principal executive offices) |
(Zip Code) |
Registrant’s telephone number, including
area code: (781) 557-1300
|
(Former name or former address, if changed since last report.) |
Check the appropriate box below if the Form
8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions
(see General Instruction A.2. below):
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02. Results of Operations and Financial
Condition.
On July 28, 2015, Franklin
Street Properties Corp. (the “Registrant”) announced its financial results for the three and six months ended June
30, 2015. The full text of the press release issued in connection with the announcement is furnished as Exhibit 99.1 to this Current
Report on Form 8-K. The press release references certain supplemental operating and financial data that is now available on the
Registrant’s website. A copy of the supplemental operating and financial data is attached hereto as Exhibit 99.2 and is incorporated
by reference herein.
The information in this
Form 8-K (including Exhibits 99.1 and 99.2) shall not be deemed "filed" for purposes of Section 18 of the Securities
Exchange Act of 1934 (the "Exchange Act") or otherwise subject to the liabilities of that section, nor shall it be deemed
incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by
specific reference in such a filing.
Item 9.01. Financial Statements and Exhibits.
See Exhibit Index attached
hereto.
SIGNATURES
Pursuant to the
requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
|
FRANKLIN STREET PROPERTIES CORP. |
Date: July 28, 2015 |
By: /s/ George J. Carter |
|
George J. Carter
President and Chief Executive Officer |
|
|
|
|
|
EXHIBIT INDEX
Exhibit
No. |
Description |
99.1 |
Press
Release issued by Franklin Street Properties Corp. on July 28, 2015. |
99.2 |
Supplemental
Operating and Financial Data for the three and six months ended June 30, 2015. |
Exhibit 99.1
PRESS RELEASE |
Franklin Street Properties Corp. |
401
Edgewater Place · Suite
200 · Wakefield, Massachusetts 01880
· (781) 557-1300 · www.franklinstreetproperties.com |
Contact: Georgia Touma (877) 686-9496 |
For Immediate Release |
|
|
|
Franklin Street Properties Corp. Announces
Second Quarter 2015 Results
Wakefield, MA—July 28, 2015—Franklin
Street Properties Corp. (the “Company”, “FSP”, “we” or “our”) (NYSE MKT: FSP),
a real estate investment trust (REIT), announced today Funds From Operations (FFO) of $27.2 million or $0.27 per share for the
second quarter ended June 30, 2015; and net income of $3.9 million or $0.04 per share for the second quarter ended June 30, 2015.
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) | |
2015 | |
2014 | |
Increase (Decrease) | |
2015 | |
2014 | |
Increase (Decrease) |
| |
| |
| |
| |
| |
| |
|
Net Income | |
$ | 3,903 | | |
$ | 3,713 | | |
$ | 190 | | |
$ | 16,436 | | |
$ | 7,286 | | |
$ | 9,150 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
FFO | |
$ | 27,188 | | |
$ | 28,254 | | |
$ | (1,066 | ) | |
$ | 52,860 | | |
$ | 57,033 | | |
$ | (4,173 | ) |
Per Share Data: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
EPS | |
$ | 0.04 | | |
$ | 0.04 | | |
$ | 0.00 | | |
$ | 0.16 | | |
$ | 0.07 | | |
$ | 0.09 | |
FFO | |
$ | 0.27 | | |
$ | 0.28 | | |
$ | (0.01 | ) | |
$ | 0.53 | | |
$ | 0.57 | | |
$ | (0.04 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Weighted average | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
shares (diluted) | |
| 100,187 | | |
| 100,187 | | |
| — | | |
| 100,187 | | |
| 100,187 | | |
| — | |
Comparing results for the second quarter
of 2015 to the same period in 2014, FFO decreased $1.1 million or $0.01 per share to $27.2 million or $0.27 per share in
2015. The FFO decrease was primarily from lower property income as a result of asset sales, loan repayments achieved in the
last twelve months and lower occupancy, which was partially offset by the acquisition of a property on April 8, 2015. We
recorded a $0.9 million gain on the sale of a property in the second quarter of 2015. Net Income and EPS was $3.9 million or
$0.04 per share for the second quarter of 2015 compared to a net income of $3.7 million or $0.04 per share for the second
quarter of 2014.
Comparing results for the six months ended
June 30, 2015 to the same period in 2014, FFO decreased $4.2 million or $0.04 per share to $52.9 million or $0.53 per share. The
FFO decrease was primarily from lower property income as a result of asset sales and loan repayments achieved in the last twelve
months and from lower occupancy, which was partially offset by the acquisition of a property on April 8, 2015. We recorded a $11.4
million gain on the sale of three properties during the six months ended June 30, 2015. Net Income and EPS was $16.4 million or
$0.16 per share for the six months ended June 30, 2015 compared to net income of $7.3 million or $0.07 per share for the six months
ended June 30, 2014.
George J. Carter, President and CEO, commented
as follows:
“For the second quarter of 2015, FSP’s
profits as represented by FFO totaled approximately $27.2 million, or $0.27 per share. Our directly owned real estate portfolio
of 36 properties totaling approximately 9.6 million square feet was 90.6% leased as of June 30, 2015. We are updating our full-year
2015 FFO guidance to the range of $1.04 to $1.08 per share.
During the first half of 2015, we
continued to lease vacant space, totaling approximately 547,000 square feet, in our property portfolio. The largest lease
completed occurred on June 30, 2015 at our “Timberlake” property in Chesterfield, Missouri for approximately
117,618 square feet to Centene Management Company, LLC. The lease is guaranteed by Centene Corporation. This lease brings the
entire three building Timberlake office complex to the 77.2% leased level. However, our overall portfolio leased percentage
remained relatively unchanged at approximately 90.6%, primarily because of our $78 million purchase during the quarter of the
442,130 square foot “Two Ravinia” office property in Atlanta, Georgia, which is an approximately 80% leased
value-add opportunity. Also, on May 13, 2015, we completed the disposition of a property known as Park Seneca, a 109,699
square foot suburban office property located in Charlotte, North Carolina, for $8.2 million. A total gain of $0.9 million was
realized as a result of the sale. Park Seneca had been owned by FSP or an FSP affiliate since 1997.
We continue to actively pursue further potential
dispositions of other suburban office assets that we believe are no longer core to our long-term strategy of acquiring larger,
multi-tenant, urban in-fill, CBD or town-center office properties. We believe selective acquisitions, such as Two Ravinia located
in the Central Perimeter submarket of Atlanta, could provide shareholders with better risk/reward adjusted returns over an extended
slow growth period in the U.S. business cycle. Potential target acquisition opportunities are primarily being pursued in our five
core markets of Atlanta, Dallas, Denver, Houston and Minneapolis. Along with our existing property portfolio’s ongoing leasing
activity, we believe the results, size, timing and execution of our current capital recycling efforts could meaningfully affect
value creation and results for full year 2015 and beyond.
We remain very
positive about our prospects and opportunities.”
Dividend Update
On July 10, 2015, the Company announced that
its Board of Directors declared a regular quarterly dividend for the three months ended June 30, 2015 of $0.19 per share of common
stock that will be paid on August 13, 2015 to stockholders of record on July 24, 2015.
FFO Guidance
Our full year FFO guidance for 2015 has been
updated to be in the range of $1.04 to $1.08 per diluted share. This guidance (a) excludes the impact of future acquisitions, 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 June 30, 2015. 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)
A reconciliation of Net Income to FFO is shown
below and a definition of FFO is provided on Supplementary Schedule H. Management believes FFO is used broadly throughout the real
estate investment trust (REIT) industry as a measurement of performance. Management also believes that FFO represents the most
accurate measure of activity and is 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 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
June 30, | |
Six Months Ended
June 30, |
(In thousands, except per share amounts) | |
2015 | |
2014 | |
2015 | |
2014 |
| |
| |
| |
| |
|
Net income | |
$ | 3,903 | | |
$ | 3,713 | | |
$ | 16,436 | | |
$ | 7,286 | |
Gain on sale of assets, less applicable income tax | |
| (948 | ) | |
| — | | |
| (11,410 | ) | |
| — | |
GAAP loss from non-consolidated REITs | |
| 38 | | |
| 552 | | |
| 360 | | |
| 1,036 | |
FFO from non-consolidated REITs | |
| 885 | | |
| 351 | | |
| 1,486 | | |
| 770 | |
Depreciation & amortization | |
| 23,168 | | |
| 23,638 | | |
| 45,846 | | |
| 47,927 | |
NAREIT FFO | |
| 27,046 | | |
| 28,254 | | |
| 52,718 | | |
| 57,019 | |
Acquisition costs of new properties | |
| 142 | | |
| — | | |
| 142 | | |
| 14 | |
Funds From Operations (FFO) | |
$ | 27,188 | | |
$ | 28,254 | | |
$ | 52,860 | | |
$ | 57,033 | |
| |
| | | |
| | | |
| | | |
| | |
Per Share Data | |
| | | |
| | | |
| | | |
| | |
EPS | |
$ | 0.04 | | |
$ | 0.04 | | |
$ | 0.16 | | |
$ | 0.07 | |
FFO | |
$ | 0.27 | | |
$ | 0.28 | | |
$ | 0.53 | | |
$ | 0.57 | |
| |
| | | |
| | | |
| | | |
| | |
Weighted average shares (basic and diluted) | |
| 100,187 | | |
| 100,187 | | |
| 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 July 29,
2015 at 10:00 a.m. (ET) to discuss the second quarter 2015 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, 2014, as the same
may be updated from time to time in subsequent filings with the United States Securities and Exchange Commission. Although we believe
the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity,
performance or achievements. We will not update any of the forward-looking statements after the date of this press release to conform
them to actual results or to changes in our expectations that occur after such date, other than as required by law.
Franklin Street Properties Corp.
Earnings Release
Supplementary Information
Table of Contents
|
|
Franklin Street Properties Corp. Financial Results |
A-C |
Real Estate Portfolio Summary Information |
D |
Portfolio and Other Supplementary Information |
E |
Percentage of Leased Space |
F |
Largest 20 Tenants – FSP Owned Portfolio |
G |
Definition of Funds From Operations (FFO) |
H |
|
|
Franklin Street
Properties Corp. Financial Results
Supplementary
Schedule A
Condensed
Consolidated Income (Loss) Statements
(Unaudited)
| |
For the Three Months Ended June 30, | |
For the Six Months Ended June 30, |
(in thousands, except per share amounts) | |
2015 | |
2014 | |
2015 | |
2014 |
| |
| |
| |
| |
|
Revenue: | |
| | | |
| | | |
| | | |
| | |
Rental | |
$ | 58,801 | | |
$ | 60,994 | | |
$ | 117,814 | | |
$ | 122,591 | |
Related party revenue: | |
| | | |
| | | |
| | | |
| | |
Management fees and interest income from loans | |
| 1,412 | | |
| 1,671 | | |
| 2,885 | | |
| 3,314 | |
Other | |
| 20 | | |
| 76 | | |
| 41 | | |
| 99 | |
Total revenue | |
| 60,233 | | |
| 62,741 | | |
| 120,740 | | |
| 126,004 | |
| |
| | | |
| | | |
| | | |
| | |
Expenses: | |
| | | |
| | | |
| | | |
| | |
Real estate operating expenses | |
| 14,644 | | |
| 14,995 | | |
| 30,000 | | |
| 30,066 | |
Real estate taxes and insurance | |
| 9,469 | | |
| 9,763 | | |
| 19,517 | | |
| 19,014 | |
Depreciation and amortization | |
| 23,207 | | |
| 23,563 | | |
| 45,879 | | |
| 47,863 | |
Selling, general and administrative | |
| 3,401 | | |
| 3,148 | | |
| 7,092 | | |
| 6,420 | |
Interest | |
| 6,365 | | |
| 6,891 | | |
| 12,552 | | |
| 14,067 | |
| |
| | | |
| | | |
| | | |
| | |
Total expenses | |
| 57,086 | | |
| 58,360 | | |
| 115,040 | | |
| 117,430 | |
| |
| | | |
| | | |
| | | |
| | |
Income before interest income, equity in losses of non-consolidated REITs and taxes | |
| 3,147 | | |
| 4,381 | | |
| 5,700 | | |
| 8,574 | |
Interest income | |
| — | | |
| 1 | | |
| 1 | | |
| 2 | |
Equity in losses of non-consolidated REITs | |
| (38 | ) | |
| (552 | ) | |
| (360 | ) | |
| (1,036 | ) |
Gain on sale of properties, less applicable income tax | |
| 948 | | |
| — | | |
| 11,410 | | |
| — | |
| |
| | | |
| | | |
| | | |
| | |
Income before taxes on income | |
| 4,057 | | |
| 3,830 | | |
| 16,751 | | |
| 7,540 | |
Taxes on income | |
| 154 | | |
| 117 | | |
| 315 | | |
| 254 | |
| |
| | | |
| | | |
| | | |
| | |
Net income | |
$ | 3,903 | | |
$ | 3,713 | | |
$ | 16,436 | | |
$ | 7,286 | |
| |
| | | |
| | | |
| | | |
| | |
Weighted average number of shares outstanding, | |
| | | |
| | | |
| | | |
| | |
basic and diluted | |
| 100,187 | | |
| 100,187 | | |
| 100,187 | | |
| 100,187 | |
| |
| | | |
| | | |
| | | |
| | |
Earnings per share, basic and diluted: | |
| | | |
| | | |
| | | |
| | |
Net income per share, basic and diluted | |
$ | 0.04 | | |
$ | 0.04 | | |
$ | 0.16 | | |
$ | 0.07 | |
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) | |
2015 | |
2014 |
Assets: | |
| | | |
| | |
Real estate assets: | |
| | | |
| | |
Land | |
$ | 180,271 | | |
$ | 183,930 | |
Buildings and improvements | |
| 1,636,444 | | |
| 1,604,984 | |
Fixtures and equipment | |
| 1,800 | | |
| 1,677 | |
| |
| 1,818,515 | | |
| 1,790,591 | |
Less accumulated depreciation | |
| 279,172 | | |
| 266,284 | |
Real estate assets, net | |
| 1,539,343 | | |
| 1,524,307 | |
Acquired real estate leases, less accumulated amortization of $110,884 and $101,838, respectively | |
| 126,926 | | |
| 138,714 | |
Investment in non-consolidated REITs | |
| 78,164 | | |
| 78,611 | |
Cash and cash equivalents | |
| 15,841 | | |
| 7,519 | |
Restricted cash | |
| 48 | | |
| 742 | |
Tenant rent receivables, less allowance for doubtful accounts of $250 and $325, respectively | |
| 2,886 | | |
| 4,733 | |
Straight-line rent receivable, less allowance for doubtful accounts of $50 and $162, respectively | |
| 46,168 | | |
| 47,021 | |
Prepaid expenses and other assets | |
| 9,096 | | |
| 10,292 | |
Related party mortgage loan receivables | |
| 93,641 | | |
| 93,641 | |
Other assets: derivative asset | |
| 918 | | |
| 3,020 | |
Office computers and furniture, net of accumulated depreciation of $1,183 and $1,036, respectively | |
| 562 | | |
| 609 | |
Deferred leasing commissions, net of accumulated amortization of $18,386 and $16,944, respectively | |
| 26,508 | | |
| 27,181 | |
Total assets | |
$ | 1,940,101 | | |
$ | 1,936,390 | |
| |
| | | |
| | |
Liabilities and Stockholders’ Equity: | |
| | | |
| | |
Liabilities: | |
| | | |
| | |
Bank note payable | |
$ | 300,000 | | |
$ | 268,000 | |
Term loans payable | |
| 620,000 | | |
| 620,000 | |
Accounts payable and accrued expenses | |
| 39,199 | | |
| 42,561 | |
Accrued compensation | |
| 2,327 | | |
| 3,758 | |
Tenant security deposits | |
| 4,315 | | |
| 4,248 | |
Other liabilities: derivative liability | |
| 7,632 | | |
| 7,268 | |
Acquired unfavorable real estate leases, less accumulated amortization of $9,779 and $8,687, respectively | |
| 11,082 | | |
| 10,908 | |
Total liabilities | |
| 984,555 | | |
| 956,743 | |
| |
| | | |
| | |
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 | |
| (6,714 | ) | |
| (4,248 | ) |
Accumulated distributions in excess of accumulated earnings | |
| (311,306 | ) | |
| (289,671 | ) |
Total stockholders’ equity | |
| 955,546 | | |
| 979,647 | |
Total liabilities and stockholders’ equity | |
$ | 1,940,101 | | |
$ | 1,936,390 | |
| |
| | | |
| | |
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) | |
2015 | |
2014 |
Cash flows from operating activities: | |
| | | |
| | |
Net income | |
$ | 16,436 | | |
$ | 7,286 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |
| | | |
| | |
Depreciation and amortization expense | |
| 46,913 | | |
| 48,854 | |
Amortization of above market lease | |
| (32 | ) | |
| 63 | |
Equity in losses of non-consolidated REITs | |
| 360 | | |
| 1,036 | |
Gain on sale of properties, less applicable income tax | |
| (11,410 | ) | |
| — | |
Increase (decrease) in allowance for doubtful accounts | |
| (75 | ) | |
| 125 | |
Changes in operating assets and liabilities: | |
| | | |
| | |
Restricted cash | |
| 694 | | |
| (85 | ) |
Tenant rent receivables | |
| 1,922 | | |
| 2,110 | |
Straight-line rents | |
| (643 | ) | |
| (3,323 | ) |
Lease acquisition costs | |
| (231 | ) | |
| (437 | ) |
Prepaid expenses and other assets | |
| 196 | | |
| 503 | |
Accounts payable, accrued expenses and other items | |
| (4,306 | ) | |
| (8,405 | ) |
Accrued compensation | |
| (1,431 | ) | |
| (933 | ) |
Tenant security deposits | |
| 66 | | |
| 232 | |
Payment of deferred leasing commissions | |
| (2,737 | ) | |
| (3,908 | ) |
Net cash provided by operating activities | |
| 45,722 | | |
| 43,118 | |
Cash flows from investing activities: | |
| | | |
| | |
Property acquisitions | |
| (66,104 | ) | |
| — | |
Acquired real estate leases | |
| (10,604 | ) | |
| — | |
Property improvements, fixtures and equipment | |
| (10,333 | ) | |
| (7,578 | ) |
Distributions in excess of earnings from non-consolidated REITs | |
| 54 | | |
| 54 | |
Repayment of related party mortgage loan receivable | |
| — | | |
| 13,880 | |
Investment in related party mortgage loan receivable | |
| — | | |
| (2,570 | ) |
Proceeds received on sales of real estate assets | |
| 55,659 | | |
| — | |
Net cash provided by (used in) investing activities | |
| (31,328 | ) | |
| 3,786 | |
Cash flows from financing activities: | |
| | | |
| | |
Distributions to stockholders | |
| (38,072 | ) | |
| (38,072 | ) |
Borrowings under bank note payable | |
| 95,000 | | |
| 10,000 | |
Repayments of bank note payable | |
| (63,000 | ) | |
| (20,000 | ) |
Net cash used in financing activities | |
| (6,072 | ) | |
| (48,072 | ) |
Net increase in cash and cash equivalents | |
| 8,322 | | |
| (1,168 | ) |
Cash and cash equivalents, beginning of year | |
| 7,519 | | |
| 19,623 | |
Cash and cash equivalents, end of period | |
$ | 15,841 | | |
$ | 18,455 | |
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 |
2015 |
|
218,762 |
2.3% |
2016 |
|
1,084,573 |
11.3% |
2017 |
|
1,122,704 |
11.6% |
2018 |
|
956,527 |
9.9% |
2019 |
|
1,485,457 |
15.4% |
Thereafter (2) |
|
4,771,717 |
49.5% |
|
|
9,639,740 |
100.0% |
| (1) | Percentages are determined based upon square footage of expiring commercial leases. |
| (2) | Includes 902,447 square feet of current vacancies. |
(dollars & square feet in 000's) | |
As of June 30, 2015 |
| |
# of | |
| |
% of | |
Square | |
% of |
State | |
Properties | |
Investment | |
Portfolio | |
Feet | |
Portfolio |
| |
| |
| |
| |
| |
|
Texas | |
| 9 | | |
$ | 370,346 | | |
| 24.1 | % | |
| 2,418 | | |
| 25.1 | % |
Colorado | |
| 5 | | |
| 433,687 | | |
| 28.2 | % | |
| 2,010 | | |
| 20.8 | % |
Georgia | |
| 4 | | |
| 286,384 | | |
| 18.6 | % | |
| 1,838 | | |
| 19.1 | % |
Virginia | |
| 4 | | |
| 95,585 | | |
| 6.2 | % | |
| 685 | | |
| 7.1 | % |
Minnesota | |
| 1 | | |
| 29,852 | | |
| 1.9 | % | |
| 475 | | |
| 4.9 | % |
Missouri | |
| 3 | | |
| 61,107 | | |
| 4.0 | % | |
| 478 | | |
| 4.9 | % |
North Carolina | |
| 2 | | |
| 55,953 | | |
| 3.6 | % | |
| 322 | | |
| 3.4 | % |
Illinois | |
| 2 | | |
| 45,371 | | |
| 2.9 | % | |
| 372 | | |
| 3.9 | % |
Maryland | |
| 1 | | |
| 52,023 | | |
| 3.4 | % | |
| 325 | | |
| 3.4 | % |
Florida | |
| 1 | | |
| 42,461 | | |
| 2.8 | % | |
| 213 | | |
| 2.2 | % |
Indiana | |
| 1 | | |
| 32,193 | | |
| 2.1 | % | |
| 205 | | |
| 2.1 | % |
California | |
| 2 | | |
| 20,671 | | |
| 1.3 | % | |
| 182 | | |
| 1.9 | % |
Washington | |
| 1 | | |
| 13,710 | | |
| 0.9 | % | |
| 117 | | |
| 1.2 | % |
| |
| 36 | | |
$ | 1,539,343 | | |
| 100.0 | % | |
| 9,640 | | |
| 100.0 | % |
Franklin Street
Properties Corp. Earnings Release
Supplementary
Schedule E
Portfolio and
Other Supplementary Information
(Unaudited &
Approximated)
Recurring Capital Expenditures |
|
|
|
|
|
|
|
|
Owned Portfolio |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands) | |
For the Three Months Ended | |
For the Six Months Ended |
|
|
|
|
|
|
|
|
| |
31-Mar-15 | |
30-Jun-15 | |
30-Jun-15 |
|
|
|
|
|
|
|
|
| |
| |
| |
|
|
|
|
|
|
|
|
|
Tenant improvements | |
$ | 2,936 | | |
$ | 3,420 | | |
$ | 6,356 | |
|
|
|
|
|
|
|
|
Deferred leasing costs | |
| 830 | | |
| 1,539 | | |
| 2,369 | |
|
|
|
|
|
|
|
|
Non-investment capex | |
| 643 | | |
| 1,418 | | |
| 2,061 | |
|
|
|
|
|
|
|
|
| |
$ | 4,409 | | |
$ | 6,377 | | |
$ | 10,786 | |
|
|
|
|
|
|
|
|
| |
For the Three Months Ended: | |
Year ended |
| |
31-Mar-14 | |
30-Jun-14 | |
30-Sep-14 | |
31-Dec-14 | |
31-Dec-14 |
| |
| |
| |
| |
| |
|
Tenant improvements | |
$ | 1,132 | | |
$ | 1,837 | | |
$ | 2,612 | | |
$ | 4,244 | | |
$ | 9,825 | |
Deferred leasing costs | |
| 1,080 | | |
| 2,786 | | |
| 577 | | |
| 1,405 | | |
| 5,848 | |
Non-investment capex | |
| 364 | | |
| 1,621 | | |
| 700 | | |
| 851 | | |
| 3,536 | |
| |
$ | 2,576 | | |
$ | 6,244 | | |
$ | 3,889 | | |
$ | 6,500 | | |
$ | 19,209 | |
Square foot & leased percentages |
June 30, |
|
December 31, |
|
|
2015 |
|
2014 |
|
|
|
|
|
Owned portfolio of commercial real estate |
|
|
|
|
Number of properties |
36 |
|
38 |
|
Square feet |
9,639,740 |
|
9,580,057 |
|
Leased percentage |
90.6% |
|
92.8% |
|
|
|
|
|
Investments in non-consolidated REITs |
|
|
|
|
Number of properties |
2 |
|
2 |
|
Square feet |
1,396,071 |
|
1,395,780 |
|
Leased percentage |
69.7% |
|
71.3% |
|
|
|
|
|
Single Asset REITs (SARs) managed |
|
|
|
|
Number of properties |
7 |
|
8 |
|
Square feet |
1,487,026 |
|
1,897,801 |
|
Leased percentage |
73.5% |
|
84.7% |
|
|
|
|
|
Total owned, investments & managed properties |
|
|
|
|
Number of properties |
45 |
|
48 |
|
Square feet |
12,522,837 |
|
12,873,638 |
|
Leased percentage |
86.3% |
|
89.3% |
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-15 |
Held |
FSP 303 East Wacker Drive Corp. |
Chicago |
IL |
861,000 |
59.0% |
43.7% |
FSP Grand Boulevard Corp. |
Kansas City |
MO |
535,071 |
86.9% |
27.0% |
|
|
|
1,396,071 |
69.7% |
|
Franklin Street
Properties Corp. Earnings Release
Supplementary
Schedule F
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-15 |
Leased (2) |
30-Jun-15 |
Leased (2) |
|
|
|
|
|
|
|
|
1 |
PARK SENECA |
Charlotte, NC |
- |
91.9% |
90.4% |
Sold May 13, 2015 |
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 |
MEADOW POINT |
Chantilly, VA |
138,537 |
92.6% |
92.6% |
100.0% |
100.0% |
5 |
TIMBERLAKE |
Chesterfield, MO |
234,023 |
43.8% |
43.8% |
93.8% |
60.4% |
6 |
FEDERAL WAY |
Federal Way, WA |
117,010 |
57.1% |
57.1% |
58.9% |
58.9% |
7 |
NORTHWEST POINT |
Elk Grove Village, IL |
176,848 |
100.0% |
100.0% |
100.0% |
100.0% |
8 |
TIMBERLAKE EAST |
Chesterfield, MO |
116,197 |
43.1% |
35.8% |
43.7% |
43.5% |
9 |
PARK TEN |
Houston, TX |
157,460 |
63.1% |
63.1% |
63.1% |
63.1% |
10 |
MONTAGUE |
San Jose, CA |
145,951 |
81.1% |
81.1% |
81.1% |
81.1% |
11 |
ADDISON |
Addison, TX |
289,974 |
86.2% |
88.5% |
91.6% |
88.6% |
12 |
COLLINS CROSSING |
Richardson, TX |
300,472 |
99.5% |
99.5% |
100.0% |
99.7% |
13 |
GREENWOOD PLAZA |
Englewood, CO |
196,236 |
100.0% |
100.0% |
100.0% |
100.0% |
14 |
RIVER CROSSING |
Indianapolis, IN |
205,059 |
100.0% |
100.0% |
90.6% |
93.7% |
15 |
LIBERTY PLAZA |
Addison, TX |
218,934 |
90.7% |
90.5% |
84.2% |
86.3% |
16 |
INNSBROOK |
Glen Allen, VA |
298,456 |
99.9% |
99.9% |
99.9% |
99.9% |
17 |
380 INTERLOCKEN |
Broomfield, CO |
240,185 |
95.8% |
95.8% |
97.1% |
96.7% |
18 |
BLUE LAGOON |
Miami, FLA |
212,619 |
100.0% |
100.0% |
100.0% |
100.0% |
19 |
ELDRIDGE GREEN |
Houston, TX |
248,399 |
100.0% |
100.0% |
100.0% |
100.0% |
20 |
ONE OVERTON PARK |
Atlanta, GA |
387,267 |
84.4% |
84.4% |
84.5% |
83.8% |
21 |
390 INTERLOCKEN |
Broomfield, CO |
241,516 |
72.3% |
72.3% |
72.3% |
72.3% |
22 |
EAST BALTIMORE |
Baltimore, MD |
325,445 |
81.3% |
81.3% |
81.3% |
81.3% |
23 |
PARK TEN PHASE II |
Houston, TX |
156,746 |
100.0% |
100.0% |
100.0% |
100.0% |
24 |
LAKESIDE CROSSING I |
Maryland Heights, MO |
127,778 |
100.0% |
100.0% |
100.0% |
100.0% |
25 |
LOUDOUN TECH |
Dulles, VA |
136,658 |
92.0% |
92.0% |
92.0% |
92.0% |
26 |
4807 STONECROFT |
Chantilly, VA |
111,469 |
100.0% |
100.0% |
100.0% |
100.0% |
27 |
121 SOUTH EIGHTH ST |
Minneapolis, MN |
475,012 |
90.2% |
90.6% |
90.2% |
90.2% |
28 |
EMPEROR BOULEVARD |
Durham, NC |
259,531 |
100.0% |
100.0% |
100.0% |
100.0% |
29 |
LEGACY TENNYSON CTR |
Plano, TX |
202,600 |
100.0% |
100.0% |
100.0% |
100.0% |
30 |
ONE LEGACY |
Plano, TX |
214,110 |
100.0% |
100.0% |
100.0% |
100.0% |
31 |
909 DAVIS |
Evanston, IL |
195,245 |
97.9% |
97.9% |
100.0% |
99.7% |
32 |
ONE RAVINIA DRIVE |
Atlanta, GA |
386,603 |
95.2% |
95.2% |
95.2% |
95.2% |
33 |
TWO RAVINIA |
Atlanta, GA |
442,130 |
Purchased April 8, 2015 |
77.5% |
77.5% |
34 |
WESTCHASE I & II |
Houston, TX |
629,025 |
97.1% |
97.1% |
95.9% |
95.9% |
35 |
1999 BROADWAY |
Denver, CO |
676,379 |
87.7% |
88.0% |
86.2% |
86.7% |
36 |
999 PEACHTREE |
Atlanta, GA |
621,946 |
98.2% |
97.8% |
95.1% |
96.0% |
37 |
1001 17th STREET |
Denver, CO |
655,420 |
86.1% |
85.7% |
86.3% |
86.5% |
|
TOTAL WEIGHTED AVERAGE (3) |
|
9,639,740 |
90.4% |
90.4% |
90.6% |
89.9% |
(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) Average lease totals include assets sold during the year. |
Franklin Street
Properties Corp. Earnings Release
Supplementary
Schedule G
Largest 20 Tenants
– FSP Owned Portfolio
(Unaudited &
Estimated)
The following table includes the
largest 20 tenants in FSP’s owned portfolio based on leased square feet:
| As of June 30, 2015 |
| |
| |
|
| |
| |
| |
% of |
| |
Tenant | |
Sq Ft | |
Portfolio |
| 1 | |
TCF National Bank | |
| 263,111 | | |
| 3.0 | % |
| 2 | |
Quintiles Transnational Corp | |
| 259,531 | | |
| 3.0 | % |
| 3 | |
CITGO Petroleum Corporation | |
| 248,399 | | |
| 2.8 | % |
| 4 | |
Newfield Exploration Company | |
| 234,495 | | |
| 2.7 | % |
| 5 | |
US Government (a) | |
| 223,433 | | |
| 2.6 | % |
| 6 | |
Sutherland Asbill Brennan LLP | |
| 222,422 | | |
| 2.5 | % |
| 7 | |
Burger King Corporation | |
| 212,619 | | |
| 2.4 | % |
| 8 | |
Denbury Onshore, LLC (b) | |
| 202,600 | | |
| 2.3 | % |
| 9 | |
SunTrust Bank (c) | |
| 182,888 | | |
| 2.1 | % |
| 10 | |
Citicorp Credit Services, Inc | |
| 176,848 | | |
| 2.0 | % |
| 11 | |
T-Mobile South, LLC dba T-Mobile | |
| 151,792 | | |
| 1.7 | % |
| 12 | |
Houghton Mifflin Harcourt Publishing Company | |
| 150,050 | | |
| 1.7 | % |
| 13 | |
Petrobras America, Inc. | |
| 144,813 | | |
| 1.7 | % |
| 14 | |
Murphy Exploration & Production Company | |
| 144,677 | | |
| 1.7 | % |
| 15 | |
Argo Data Resource Corporation | |
| 140,246 | | |
| 1.6 | % |
| 16 | |
Monsanto Company | |
| 127,778 | | |
| 1.5 | % |
| 17 | |
Federal National Mortgage Association | |
| 123,144 | | |
| 1.4 | % |
| 18 | |
Vail Corp d/b/a Vail Resorts (d) | |
| 122,232 | | |
| 1.4 | % |
| 19 | |
Kaiser Foundation Health Plan | |
| 120,979 | | |
| 1.4 | % |
| 20 | |
Centene Management Company, LLC (e) | |
| 117,618 | | |
| 1.3 | % |
| | |
Total | |
| 3,569,675 | | |
| 40.9 | % |
|
(a) |
Includes 180,444 and 27,398 square feet which expire in 2018 & 2017, respectively. The remaining 15,591 square feet expire between 2016 - 2020. |
|
(b) |
Includes 102,600 square feet which expire 7/31/16 and 100,000 square feet that expires 7/31/19. |
|
(c) |
Includes 55,388 square feet which expires October 31, 2016. The remaining 127,500 square feet expires September 30, 2021. |
|
(d) |
Includes 38,293 square feet which expires March 31, 2019. The remaining 83,939 square feet expires March 31, 2023. |
|
(e) |
The lease was executed June 30, 2015 and rent has not commenced. |
Franklin Street
Properties Corp. Earnings Release
Supplementary
Schedule H
Definition of
Funds From Operations (“FFO”)
The Company
evaluates performance based on Funds From Operations, which we refer to as FFO, as management believes that FFO represents the
most accurate measure of activity and is the basis for distributions paid to equity holders. The Company defines FFO as net income
(computed in accordance with GAAP), excluding gains (or losses) from sales of property and acquisition costs of newly acquired
properties that are not capitalized, plus depreciation and amortization, including amortization of acquired above and below market
lease intangibles and impairment charges 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.
Exhibit 99.2
|
|
Supplemental
Operating and Financial Data
Second
Quarter 2015
|
Franklin Street Properties
Corp. ● 401 Edgewater Place ● Wakefield, MA 01880 ● (781) 557-1300
www.franklinstreetproperties.com
|
|
Table of Contents |
|
Page |
|
|
Page |
|
|
|
|
|
Company
Overview |
3 |
|
Tenant
Analysis and Leasing Activity |
|
|
|
|
Tenants
by Industry |
18 |
Key
Financial Data |
|
|
20
Largest Tenants with Annualized Rent and Remaining Term |
19 |
Financial
Highlights |
4 |
|
Leasing
Activity |
20 |
Income
Statements |
5 |
|
Lease
Expirations by Square Feet |
21 |
Balance
Sheets |
6 |
|
Lease
Expirations with Annualized Rent per Square Foot |
22 |
Cash
Flow Statements |
7 |
|
Capital
Expenditures |
23 |
Property
Net Operating Income (NOI) |
8 |
|
|
|
|
|
|
Transaction
Activity |
24 |
Reconciliation |
|
|
|
|
FFO
& AFFO |
9 |
|
Loan
Portfolio of Secured Real Estate |
25 |
EBITDA |
10 |
|
|
|
Property
NOI |
11 |
|
Net
Asset Value Components |
26 |
|
|
|
|
|
Debt
Summary |
12 |
|
Appendix:
Definitions of Non-GAAP Measures |
|
|
|
|
FFO |
27 |
Capital
Analysis |
13 |
|
EBITDA
and NOI |
28 |
|
|
|
AFFO |
29 |
Owned
and Managed Portfolio Overview |
14-17 |
|
|
|
All financial information contained in this supplemental
information package is unaudited. In addition, certain statements contained in this supplemental information package may be
deemed to be forward-looking statements within the meaning of the federal securities laws. Although FSP believes that the
expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance
that its expectations will be achieved. Factors that could cause actual results to differ materially from FSP’s current
expectations include general economic conditions, uncertainties relating to fiscal policy, changes in government regulations,
regulatory uncertainty, geopolitical events, local real estate conditions, the performance of properties that FSP has acquired or
may acquire, the timely lease-up of properties and other risks, detailed from time to time in FSP’s SEC reports. FSP
assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events. |
|
|
|
|
Company
Overview |
Overview
Franklin Street Properties Corp. (“FSP”, “we”, “our” or the “Company”) (NYSE
MKT: FSP) is 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. FSP’s real estate operations include property acquisitions and dispositions,
short-term financing, leasing, development and asset management.
Our Business
As of June 30, 2015, the Company owned and operated a portfolio of real estate consisting of 36 properties, managed 9 Sponsored
REITs and held five promissory notes secured by mortgages on real estate owned by Sponsored REITs. From time-to-time, the
Company may acquire real estate, make additional secured loans or acquire one of its Sponsored REITs. The Company may also
pursue, on a selective basis, the sale of its properties in order to take advantage of the value creation and demand for its
properties, or for geographic or property specific reasons.
Management Team |
|
|
|
|
|
|
|
George J. Carter |
|
|
Scott H. Carter |
President, Chief Executive Officer |
|
|
Executive Vice President, General |
Chairman of the Board |
|
|
Counsel and Secretary |
|
|
|
|
John G. Demeritt |
|
|
Jeffrey B. Carter |
Executive Vice President, Chief |
|
|
Executive Vice President and |
Financial Officer & Treasurer |
|
|
Chief Investment Officer |
|
|
|
|
Janet Notopoulos |
|
|
Eriel Anchando |
Executive Vice President and Director |
|
|
Senior Vice President of |
|
|
|
Operations |
Inquiries
Inquires should be directed to: Georgia Touma
877-686-9496 or InvestorRelations@franklinstreetproperties.com
Snapshot (as of June 30, 2015) |
|
Corporate Headquarters |
Wakefield, MA |
Fiscal Year-End |
31-Dec |
Total Properties |
36 |
Total Square Feet |
9.6 Million |
Trading Symbol |
FSP |
Exchange |
NYSE MKT |
Common Shares Outstanding |
100,187,405 |
Quarterly Dividend |
$0.19 |
Dividend Yield |
6.7% |
Total Market Capitalization |
$2.1 Billion |
Insider Holdings |
5.1% |
|
|
Summary
of Financial Highlights |
(in thousands except per share amounts, SF & number of properties) | |
|
| |
30-Jun-15 | |
31-Mar-15 | |
31-Dec-14 | |
30-Sep-14 | |
30-Jun-14 |
Income Items: | |
| | | |
| | | |
| | | |
| | | |
| | |
Rental revenue | |
$ | 58,801 | | |
$ | 59,013 | | |
$ | 61,022 | | |
$ | 59,728 | | |
$ | 60,994 | |
Total revenue | |
| 60,233 | | |
| 60,507 | | |
| 62,489 | | |
| 61,190 | | |
| 62,741 | |
Adjusted EBITDA* | |
| 32,642 | | |
| 31,097 | | |
| 33,182 | | |
| 33,973 | | |
| 34,359 | |
Equity in losses of non-consolidated REITs | |
| (38 | ) | |
| (322 | ) | |
| (269 | ) | |
| (455 | ) | |
| (552 | ) |
Net income | |
| 3,903 | | |
| 12,533 | | |
| 4,295 | | |
| 1,567 | | |
| 3,713 | |
FFO* | |
| 27,188 | | |
| 25,672 | | |
| 27,525 | | |
| 27,904 | | |
| 28,254 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Per Share Data: | |
| | | |
| | | |
| | | |
| | | |
| | |
EPS | |
$ | 0.04 | | |
$ | 0.13 | | |
$ | 0.04 | | |
$ | 0.02 | | |
$ | 0.04 | |
FFO* | |
$ | 0.27 | | |
$ | 0.26 | | |
$ | 0.27 | | |
$ | 0.28 | | |
$ | 0.28 | |
Weighted Average Shares (diluted) | |
| 100,187 | | |
| 100,187 | | |
| 100,187 | | |
| 100,187 | | |
| 100,187 | |
Closing share price | |
$ | 11.31 | | |
$ | 12.82 | | |
$ | 12.27 | | |
$ | 11.22 | | |
$ | 12.58 | |
Dividend | |
$ | 0.19 | | |
$ | 0.19 | | |
$ | 0.19 | | |
$ | 0.19 | | |
$ | 0.19 | |
Payout Ratio: | |
| 70 | % | |
| 74 | % | |
| 69 | % | |
| 68 | % | |
| 67 | % |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Balance Sheet Items: | |
| | | |
| | | |
| | | |
| | | |
| | |
Real estate, net | |
$ | 1,539,343 | | |
$ | 1,486,897 | | |
$ | 1,524,307 | | |
$ | 1,542,012 | | |
$ | 1,549,963 | |
Other assets, net | |
| 400,758 | | |
| 402,515 | | |
| 412,083 | | |
| 425,305 | | |
| 438,634 | |
Total assets, net | |
| 1,940,101 | | |
| 1,889,412 | | |
| 1,936,390 | | |
| 1,967,317 | | |
| 1,988,597 | |
Total liabilities, net | |
| 984,555 | | |
| 921,082 | | |
| 956,743 | | |
| 968,948 | | |
| 975,853 | |
Shareholders' equity | |
| 955,546 | | |
| 968,330 | | |
| 979,647 | | |
| 998,369 | | |
| 1,012,744 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Market Capitalization and Debt: | |
| | | |
| | | |
| | | |
| | | |
| | |
Total Market Capitalization (a) | |
$ | 2,053,120 | | |
$ | 2,144,403 | | |
$ | 2,117,299 | | |
$ | 2,029,103 | | |
$ | 2,176,858 | |
Total debt outstanding | |
| 920,000 | | |
| 860,000 | | |
| 888,000 | | |
| 905,000 | | |
| 916,500 | |
Debt to Total Market Capitalization | |
| 44.8 | % | |
| 40.1 | % | |
| 41.9 | % | |
| 44.6 | % | |
| 42.1 | % |
Debt to Adjusted EBITDA | |
| 7.0 | | |
| 6.9 | | |
| 6.7 | | |
| 6.7 | | |
| 6.7 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Owned Portfolio Leasing Statistics: | |
| | | |
| | | |
| | | |
| | | |
| | |
Owned portfolio assets | |
| 36 | | |
| 36 | | |
| 38 | | |
| 39 | | |
| 39 | |
Portfolio total SF | |
| 9,639,740 | | |
| 9,310,131 | | |
| 9,580,057 | | |
| 9,690,361 | | |
| 9,686,215 | |
Portfolio % leased | |
| 90.6 | % | |
| 90.4 | % | |
| 92.8 | % | |
| 93.3 | % | |
| 94.1 | % |
(a) | | Total Market Capitalization is the closing share price multiplied by the number of
shares outstanding plus total debt outstanding on that date. |
* | | See pages 9 & 10 for reconciliations of Net Income to FFO and Adjusted EBITDA,
respectively, and the Appendix for Definitions of these Non-GAAP Measures beginning on page 27. |
|
|
Condensed
Consolidated Income Statements ($ in thousands, except per share amounts) |
| |
| |
| |
For the Six | |
| |
| |
| |
| |
For the |
| |
For the Three Months Ended | |
Months
Ended | |
For the Three Months Ended | |
Year
Ended |
| |
31-Mar-15 | |
30-Jun-15 | |
30-Jun-15 | |
31-Mar-14 | |
30-Jun-14 | |
30-Sep-14 | |
31-Dec-14 | |
31-Dec-14 |
| |
| |
| |
| |
| |
| |
| |
| |
|
Revenue: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Rental | |
$ | 59,013 | | |
$ | 58,801 | | |
$ | 117,814 | | |
$ | 61,597 | | |
$ | 60,994 | | |
$ | 59,728 | | |
$ | 61,022 | | |
$ | 243,341 | |
Related party revenue: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Management fees and interest income from loans | |
| 1,473 | | |
| 1,412 | | |
| 2,885 | | |
| 1,643 | | |
| 1,671 | | |
| 1,462 | | |
| 1,465 | | |
| 6,241 | |
Other | |
| 21 | | |
| 20 | | |
| 41 | | |
| 23 | | |
| 76 | | |
| — | | |
| 2 | | |
| 101 | |
Total revenue | |
| 60,507 | | |
| 60,233 | | |
| 120,740 | | |
| 63,263 | | |
| 62,741 | | |
| 61,190 | | |
| 62,489 | | |
| 249,683 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Expenses: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Real estate operating expenses | |
| 15,356 | | |
| 14,644 | | |
| 30,000 | | |
| 15,071 | | |
| 14,995 | | |
| 15,632 | | |
| 16,334 | | |
| 62,032 | |
Real estate taxes and insurance | |
| 10,048 | | |
| 9,469 | | |
| 19,517 | | |
| 9,251 | | |
| 9,763 | | |
| 8,555 | | |
| 9,288 | | |
| 36,857 | |
Depreciation and amortization | |
| 22,672 | | |
| 23,207 | | |
| 45,879 | | |
| 24,300 | | |
| 23,563 | | |
| 24,878 | | |
| 23,174 | | |
| 95,915 | |
Selling, general and administrative | |
| 3,691 | | |
| 3,401 | | |
| 7,092 | | |
| 3,272 | | |
| 3,148 | | |
| 3,071 | | |
| 3,492 | | |
| 12,983 | |
Interest | |
| 6,187 | | |
| 6,365 | | |
| 12,552 | | |
| 7,176 | | |
| 6,891 | | |
| 6,883 | | |
| 6,483 | | |
| 27,433 | |
Total expenses | |
| 57,954 | | |
| 57,086 | | |
| 115,040 | | |
| 59,070 | | |
| 58,360 | | |
| 59,019 | | |
| 58,771 | | |
| 235,220 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Income before interest income, equity in losses of non-consolidated REITs and taxes | |
| 2,553 | | |
| 3,147 | | |
| 5,700 | | |
| 4,193 | | |
| 4,381 | | |
| 2,171 | | |
| 3,718 | | |
| 14,463 | |
Interest income | |
| 1 | | |
| — | | |
| 1 | | |
| 1 | | |
| 1 | | |
| — | | |
| 1 | | |
| 3 | |
Equity in losses of non-consolidated REITs | |
| (322 | ) | |
| (38 | ) | |
| (360 | ) | |
| (484 | ) | |
| (552 | ) | |
| (455 | ) | |
| (269 | ) | |
| (1,760 | ) |
Gain on sale of properties, less applicable income tax | |
| 10,462 | | |
| 948 | | |
| 11,410 | | |
| — | | |
| — | | |
| — | | |
| 940 | | |
| 940 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Income before taxes on income | |
| 12,694 | | |
| 4,057 | | |
| 16,751 | | |
| 3,710 | | |
| 3,830 | | |
| 1,716 | | |
| 4,390 | | |
| 13,646 | |
Income tax expense | |
| 161 | | |
| 154 | | |
| 315 | | |
| 137 | | |
| 117 | | |
| 149 | | |
| 95 | | |
| 498 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Net income | |
$ | 12,533 | | |
$ | 3,903 | | |
$ | 16,436 | | |
$ | 3,573 | | |
$ | 3,713 | | |
$ | 1,567 | | |
$ | 4,295 | | |
$ | 13,148 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Weighted average number of shares outstanding, | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
basic and diluted | |
| 100,187 | | |
| 100,187 | | |
| 100,187 | | |
| 100,187 | | |
| 100,187 | | |
| 100,187 | | |
| 100,187 | | |
| 100,187 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Net income per share, basic and diluted | |
$ | 0.13 | | |
$ | 0.04 | | |
$ | 0.16 | | |
$ | 0.04 | | |
$ | 0.04 | | |
$ | 0.02 | | |
$ | 0.04 | | |
$ | 0.13 | |
|
|
Condensed
Consolidated Balance Sheets (in thousands) |
| |
March 31, | | |
June 30, | | |
March 31, | | |
June 30, | | |
September 30, | | |
December 31, | |
| |
2015 | | |
2015 | | |
2014 | | |
2014 | | |
2014 | | |
2014 | |
Assets: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Real estate assets: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Land | |
$ | 174,707 | | |
$ | 180,271 | | |
$ | 185,479 | | |
$ | 185,479 | | |
$ | 185,479 | | |
$ | 183,930 | |
Buildings and improvements | |
| 1,581,524 | | |
| 1,636,444 | | |
| 1,605,808 | | |
| 1,609,747 | | |
| 1,613,699 | | |
| 1,604,984 | |
Fixtures and equipment | |
| 1,724 | | |
| 1,800 | | |
| 1,296 | | |
| 1,395 | | |
| 1,633 | | |
| 1,677 | |
| |
| 1,757,955 | | |
| 1,818,515 | | |
| 1,792,583 | | |
| 1,796,621 | | |
| 1,800,811 | | |
| 1,790,591 | |
Less accumulated depreciation | |
| 271,058 | | |
| 279,172 | | |
| 234,447 | | |
| 246,658 | | |
| 258,799 | | |
| 266,284 | |
Real estate assets, net | |
| 1,486,897 | | |
| 1,539,343 | | |
| 1,558,136 | | |
| 1,549,963 | | |
| 1,542,012 | | |
| 1,524,307 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Acquired real estate leases, net | |
| 124,337 | | |
| 126,926 | | |
| 172,262 | | |
| 161,519 | | |
| 149,019 | | |
| 138,714 | |
Investment in non-consolidated REITs | |
| 78,228 | | |
| 78,164 | | |
| 79,983 | | |
| 79,405 | | |
| 78,907 | | |
| 78,611 | |
Cash and cash equivalents | |
| 14,945 | | |
| 15,841 | | |
| 20,031 | | |
| 18,455 | | |
| 15,930 | | |
| 7,519 | |
Restricted cash | |
| 56 | | |
| 48 | | |
| 688 | | |
| 728 | | |
| 707 | | |
| 742 | |
Tenant rent receivables, net | |
| 4,587 | | |
| 2,886 | | |
| 6,035 | | |
| 2,867 | | |
| 2,865 | | |
| 4,733 | |
Straight-line rent receivable, net | |
| 45,498 | | |
| 46,168 | | |
| 44,392 | | |
| 46,021 | | |
| 46,737 | | |
| 47,021 | |
Prepaid expenses and other assets | |
| 14,114 | | |
| 9,658 | | |
| 9,954 | | |
| 9,716 | | |
| 9,768 | | |
| 10,901 | |
Related party mortgage loan receivable | |
| 93,641 | | |
| 93,641 | | |
| 101,916 | | |
| 88,436 | | |
| 88,436 | | |
| 93,641 | |
Other assets: derivative asset | |
| 774 | | |
| 918 | | |
| 4,801 | | |
| 2,626 | | |
| 4,582 | | |
| 3,020 | |
Deferred leasing commissions, net | |
| 26,335 | | |
| 26,508 | | |
| 27,477 | | |
| 28,861 | | |
| 28,354 | | |
| 27,181 | |
Total assets | |
$ | 1,889,412 | | |
$ | 1,940,101 | | |
$ | 2,025,675 | | |
$ | 1,988,597 | | |
$ | 1,967,317 | | |
$ | 1,936,390 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Liabilities and Stockholders’ Equity: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Liabilities: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Bank note payable | |
$ | 240,000 | | |
$ | 300,000 | | |
$ | 316,500 | | |
$ | 296,500 | | |
$ | 285,000 | | |
$ | 268,000 | |
Term loan payable | |
| 620,000 | | |
| 620,000 | | |
| 620,000 | | |
| 620,000 | | |
| 620,000 | | |
| 620,000 | |
Accounts payable and accrued expenses | |
| 36,065 | | |
| 39,199 | | |
| 34,390 | | |
| 34,590 | | |
| 40,228 | | |
| 42,561 | |
Accrued compensation | |
| 1,241 | | |
| 2,327 | | |
| 1,027 | | |
| 2,052 | | |
| 2,863 | | |
| 3,758 | |
Tenant security deposits | |
| 4,019 | | |
| 4,315 | | |
| 4,258 | | |
| 4,259 | | |
| 4,331 | | |
| 4,248 | |
Other liabilities: derivative termination value | |
| 9,836 | | |
| 7,632 | | |
| 3,825 | | |
| 5,985 | | |
| 4,847 | | |
| 7,268 | |
Acquired unfavorable real estate leases, net | |
| 9,921 | | |
| 11,082 | | |
| 13,273 | | |
| 12,467 | | |
| 11,679 | | |
| 10,908 | |
Total liabilities | |
| 921,082 | | |
| 984,555 | | |
| 993,273 | | |
| 975,853 | | |
| 968,948 | | |
| 956,743 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Commitments and contingencies | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Stockholders’ Equity: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Preferred stock | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
Common stock | |
| 10 | | |
| 10 | | |
| 10 | | |
| 10 | | |
| 10 | | |
| 10 | |
Additional paid-in capital | |
| 1,273,556 | | |
| 1,273,556 | | |
| 1,273,556 | | |
| 1,273,556 | | |
| 1,273,556 | | |
| 1,273,556 | |
Accumulated other comprehensive income (loss) | |
| (9,062 | ) | |
| (6,714 | ) | |
| 976 | | |
| (3,359 | ) | |
| (265 | ) | |
| (4,248 | ) |
Accumulated distributions in excess of accumulated earnings | |
| (296,174 | ) | |
| (311,306 | ) | |
| (242,140 | ) | |
| (257,463 | ) | |
| (274,932 | ) | |
| (289,671 | ) |
Total stockholders’ equity | |
| 968,330 | | |
| 955,546 | | |
| 1,032,402 | | |
| 1,012,744 | | |
| 998,369 | | |
| 979,647 | |
Total liabilities and stockholders’ equity | |
$ | 1,889,412 | | |
$ | 1,940,101 | | |
$ | 2,025,675 | | |
$ | 1,988,597 | | |
$ | 1,967,317 | | |
$ | 1,936,390 | |
|
|
Condensed
Consolidated Statements of Cash Flows (in thousands) |
| |
Six
Months ended June 30, | |
Twelve
Months ended December 31 |
| |
2015 | |
2014 | |
2014 | |
2013 |
| |
| |
| |
| |
|
Cash flows from operating
activities: | |
| | | |
| | | |
| | | |
| | |
Net
income | |
$ | 16,436 | | |
$ | 7,286 | | |
$ | 13,148 | | |
$ | 19,827 | |
Adjustments
to reconcile net income to net cash provided by operating activities: | |
| | | |
| | | |
| | | |
| | |
Depreciation
and amortization expense | |
| 46,913 | | |
| 48,854 | | |
| 97,916 | | |
| 81,267 | |
Amortization
of above market lease | |
| (32 | ) | |
| 63 | | |
| 635 | | |
| (365 | ) |
Gain
on sale of properties, less applicable income tax | |
| (11,410 | ) | |
| — | | |
| (940 | ) | |
| (2,158 | ) |
Equity
in earnings (losses) from non-consolidated REITs | |
| 360 | | |
| 1,036 | | |
| 1,760 | | |
| 1,358 | |
Increase
in allowance for doubtful accounts | |
| (75 | ) | |
| 125 | | |
| 275 | | |
| (1,250 | ) |
Changes
in operating assets and liabilities: | |
| | | |
| | | |
| | | |
| | |
Restricted
cash | |
| 694 | | |
| (85 | ) | |
| (99 | ) | |
| (68 | ) |
Tenant
rent receivables | |
| 1,922 | | |
| 2,110 | | |
| 94 | | |
| (2,103 | ) |
Straight-line
rents | |
| (643 | ) | |
| (3,323 | ) | |
| (4,737 | ) | |
| (5,782 | ) |
Lease
acquisition costs | |
| (231 | ) | |
| (437 | ) | |
| (440 | ) | |
| (1,146 | ) |
Prepaid
expenses and other assets | |
| 196 | | |
| 503 | | |
| 700 | | |
| (1,547 | ) |
Accounts
payable and accrued expenses | |
| (4,306 | ) | |
| (8,405 | ) | |
| 206 | | |
| 11,137 | |
Accrued
compensation | |
| (1,431 | ) | |
| (933 | ) | |
| 773 | | |
| 445 | |
Tenant
security deposits | |
| 66 | | |
| 232 | | |
| 222 | | |
| 1,538 | |
Payment
of deferred leasing commissions | |
| (2,737 | ) | |
| (3,908 | ) | |
| (6,347 | ) | |
| (9,125 | ) |
| |
| | | |
| | | |
| | | |
| | |
Net
cash provided by operating activities | |
| 45,722 | | |
| 43,118 | | |
| 103,166 | | |
| 92,028 | |
| |
| | | |
| | | |
| | | |
| | |
Cash flows from investing
activities: | |
| | | |
| | | |
| | | |
| | |
Property
acquisitions | |
| (66,104 | ) | |
| | | |
| — | | |
| (454,447 | ) |
Acquired
real estate leases | |
| (10,604 | ) | |
| | | |
| — | | |
| (100,143 | ) |
Property
improvements, fixtures and equipment | |
| (10,333 | ) | |
| (7,578 | ) | |
| (18,370 | ) | |
| (19,120 | ) |
Office
computers and furniture | |
| | | |
| | | |
| (191 | ) | |
| (355 | ) |
Investment
in non-consolidated REITs | |
| — | | |
| — | | |
| — | | |
| 4,858 | |
Distributions
in excess of earnings from non-consolidated REITs | |
| 54 | | |
| 54 | | |
| 107 | | |
| 108 | |
Investment
in related party mortgage loan receivable | |
| — | | |
| (2,570 | ) | |
| (11,170 | ) | |
| (8,200 | ) |
Repayment
of related party mortgage loan receivable | |
| — | | |
| 13,880 | | |
| 17,275 | | |
| 2,350 | |
Changes
in deposits on real estate assets | |
| — | | |
| — | | |
| — | | |
| — | |
Proceeds
received on sales of real estate assets | |
| 55,659 | | |
| — | | |
| 14,192 | | |
| 12,301 | |
| |
| | | |
| | | |
| | | |
| | |
Net
cash provided by (used in) investing activities | |
| (31,328 | ) | |
| 3,786 | | |
| 1,843 | | |
| (562,648 | ) |
| |
| | | |
| | | |
| | | |
| | |
Cash
flows from financing activities: | |
| | | |
| | | |
| | | |
| | |
Distributions
to stockholders | |
| (38,072 | ) | |
| (38,072 | ) | |
| (76,142 | ) | |
| (69,588 | ) |
Proceeds
(costs) from equity offering, net | |
| — | | |
| — | | |
| — | | |
| 230,682 | |
Borrowings
under bank note payable | |
| 95,000 | | |
| 10,000 | | |
| 15,000 | | |
| 160,000 | |
Repayments
of bank note payable | |
| (63,000 | ) | |
| (20,000 | ) | |
| (53,500 | ) | |
| (70,250 | ) |
Borrowing
(repayment) of term loan payable, net | |
| — | | |
| — | | |
| — | | |
| 220,000 | |
Deferred
Financing Costs | |
| — | | |
| — | | |
| (2,471 | ) | |
| (1,868 | ) |
| |
| | | |
| | | |
| | | |
| | |
Net
cash provided by (used in) financing activities | |
| (6,072 | ) | |
| (48,072 | ) | |
| (117,113 | ) | |
| 468,976 | |
| |
| | | |
| | | |
| | | |
| | |
Net decreases in cash
and cash equivalents | |
| 8,322 | | |
| (1,168 | ) | |
| (12,104 | ) | |
| (1,644 | ) |
| |
| | | |
| | | |
| | | |
| | |
Cash
and cash equivalents, beginning of period | |
| 7,519 | | |
| 19,623 | | |
| 19,623 | | |
| 21,267 | |
| |
| | | |
| | | |
| | | |
| | |
Cash
and cash equivalents, end of period | |
$ | 15,841 | | |
$ | 18,455 | | |
$ | 7,519 | | |
$ | 19,623 | |
|
|
Property
Net Operating Income (NOI)*
with Same Store Comparison (in thousands) |
| |
Rentable | |
| |
| |
Six Months | |
| |
| |
Six Months | |
| |
|
| |
Square Feet | |
Three Months Ended | |
Ended | |
Three Months Ended | |
Ended | |
Inc | |
% |
Region | |
or RSF | |
31-Mar-15 | |
30-Jun-15 | |
30-Jun-15 | |
31-Mar-14 | |
30-Jun-14 | |
30-Jun-14 | |
(Dec) | |
Change |
East | |
| 1,333 | | |
$ | 4,736 | | |
$ | 4,648 | | |
$ | 9,384 | | |
$ | 4,577 | | |
$ | 4,655 | | |
$ | 9,232 | | |
$ | 152 | | |
| 1.6 | % |
MidWest | |
| 1,530 | | |
| 3,469 | | |
| 3,563 | | |
| 7,032 | | |
| 4,586 | | |
| 4,541 | | |
| 9,127 | | |
| (2,095 | ) | |
| -23.0 | % |
South | |
| 4,026 | | |
| 15,781 | | |
| 15,995 | | |
| 31,776 | | |
| 16,796 | | |
| 16,183 | | |
| 32,979 | | |
| (1,203 | ) | |
| -3.6 | % |
West | |
| 2,309 | | |
| 8,216 | | |
| 8,571 | | |
| 16,787 | | |
| 9,388 | | |
| 9,290 | | |
| 18,678 | | |
| (1,891 | ) | |
| -10.1 | % |
Same Store | |
| 9,198 | | |
| 32,202 | | |
| 32,777 | | |
| 64,979 | | |
| 35,347 | | |
| 34,669 | | |
| 70,016 | | |
| (5,037 | ) | |
| -7.2 | % |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Acquisitions | |
| 442 | | |
| — | | |
| 1,057 | | |
| 1,057 | | |
| — | | |
| — | | |
| — | | |
| 1,057 | | |
| 1.5 | % |
Property NOI from | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
the continuing portfolio | |
| 9,640 | | |
| 32,202 | | |
| 33,834 | | |
| 66,036 | | |
| 35,347 | | |
| 34,669 | | |
| 70,016 | | |
| (3,980 | ) | |
| -5.7 | % |
Dispositions | |
| | | |
| 822 | | |
| 61 | | |
| 883 | | |
| 1,226 | | |
| 1,257 | | |
| 2,483 | | |
| (1,600 | ) | |
| -2.1 | % |
Property NOI | |
| | | |
$ | 33,024 | | |
$ | 33,895 | | |
$ | 66,919 | | |
$ | 36,573 | | |
$ | 35,926 | | |
$ | 72,499 | | |
$ | (5,580 | ) | |
| -7.7 | % |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Same Store | |
| | | |
$ | 32,202 | | |
$ | 32,777 | | |
$ | 64,979 | | |
$ | 35,347 | | |
$ | 34,669 | | |
$ | 70,016 | | |
$ | (5,037 | ) | |
| -7.2 | % |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Less Nonrecurring | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Items in NOI (a) | |
| | | |
| 75 | | |
| 81 | | |
| 156 | | |
| 707 | | |
| 287 | | |
| 994 | | |
| (838 | ) | |
| 1.1 | % |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Comparative | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Same Store | |
| | | |
$ | 32,127 | | |
$ | 32,696 | | |
$ | 64,823 | | |
$ | 34,640 | | |
$ | 34,382 | | |
$ | 69,022 | | |
$ | (4,199 | ) | |
| -6.1 | % |
| (a) | Nonrecurring Items in NOI include proceeds from bankruptcies, lease termination fees or other significant nonrecurring income
or expenses, which may affect comparability. |
| * | See page 11 for a reconciliation of Net Income to Property NOI and the Appendix for Definitions of Non-GAAP Measures beginning
on page 27. Property NOI Excludes NOI from investments in and interest income from secured loans to non-consolidated REITs. |
|
|
FFO
& AFFO Reconciliation (in thousands, except per share amounts) |
| |
| | |
| | |
For the | | |
| | |
| | |
| | |
| | |
For the | |
| |
| | |
| | |
Six Months | | |
| | |
| | |
| | |
| | |
Year | |
| |
For the Three Months Ended | | |
Ended | | |
For the Three Months Ended | | |
Ended | |
| |
31-Mar-15 | | |
30-Jun-15 | | |
30-Jun-15 | | |
31-Mar-14 | | |
30-Jun-14 | | |
30-Sep-14 | | |
31-Dec-14 | | |
31-Dec-14 | |
| |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| |
Net income | |
$ | 12,533 | | |
$ | 3,903 | | |
$ | 16,436 | | |
$ | 3,573 | | |
$ | 3,713 | | |
$ | 1,567 | | |
$ | 4,295 | | |
$ | 13,148 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Gain (loss) on sale, less applicable income tax | |
| (10,462 | ) | |
| (948 | ) | |
| (11,410 | ) | |
| — | | |
| — | | |
| — | | |
| (940 | ) | |
| (940 | ) |
GAAP income from non-consolidated REITs | |
| 322 | | |
| 38 | | |
| 360 | | |
| 484 | | |
| 552 | | |
| 455 | | |
| 269 | | |
| 1,760 | |
FFO from non-consolidated REITs | |
| 601 | | |
| 885 | | |
| 1,486 | | |
| 419 | | |
| 351 | | |
| 508 | | |
| 652 | | |
| 1,930 | |
Depreciation & amortization | |
| 22,678 | | |
| 23,168 | | |
| 45,846 | | |
| 24,289 | | |
| 23,638 | | |
| 25,374 | | |
| 23,249 | | |
| 96,550 | |
NAREIT FFO* | |
| 25,672 | | |
| 27,046 | | |
| 52,718 | | |
| 28,765 | | |
| 28,254 | | |
| 27,904 | | |
| 27,525 | | |
| 112,448 | |
Acquisition costs | |
| — | | |
| 142 | | |
| 142 | | |
| 14 | | |
| — | | |
| — | | |
| — | | |
| 14 | |
Funds From Operations (FFO)* | |
$ | 25,672 | | |
$ | 27,188 | | |
$ | 52,860 | | |
$ | 28,779 | | |
$ | 28,254 | | |
$ | 27,904 | | |
$ | 27,525 | | |
$ | 112,462 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Adjusted Funds From Operations (AFFO)* | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Funds From Operations (FFO)* | |
$ | 25,672 | | |
$ | 27,188 | | |
$ | 52,860 | | |
$ | 28,779 | | |
$ | 28,254 | | |
$ | 27,904 | | |
$ | 27,525 | | |
$ | 112,462 | |
Reverse FFO from non-consolidated REITs | |
| (601 | ) | |
| (885 | ) | |
| (1,486 | ) | |
| (419 | ) | |
| (351 | ) | |
| (508 | ) | |
| (652 | ) | |
| (1,930 | ) |
Distributions from non-consolidated REITs | |
| 27 | | |
| 27 | | |
| 54 | | |
| 27 | | |
| 27 | | |
| 27 | | |
| 26 | | |
| 107 | |
Amortization of deferred financing costs | |
| 517 | | |
| 517 | | |
| 1,034 | | |
| 499 | | |
| 499 | | |
| 498 | | |
| 506 | | |
| 2,002 | |
Straight-line rent | |
| (69 | ) | |
| (574 | ) | |
| (643 | ) | |
| (1,783 | ) | |
| (1,541 | ) | |
| (714 | ) | |
| (698 | ) | |
| (4,736 | ) |
Tenant improvements | |
| (2,936 | ) | |
| (3,420 | ) | |
| (6,356 | ) | |
| (1,132 | ) | |
| (1,837 | ) | |
| (2,612 | ) | |
| (4,244 | ) | |
| (9,825 | ) |
Leasing commissions | |
| (830 | ) | |
| (1,539 | ) | |
| (2,369 | ) | |
| (1,080 | ) | |
| (2,786 | ) | |
| (577 | ) | |
| (1,405 | ) | |
| (5,848 | ) |
Non-investment capex | |
| (643 | ) | |
| (1,418 | ) | |
| (2,061 | ) | |
| (364 | ) | |
| (1,621 | ) | |
| (700 | ) | |
| (851 | ) | |
| (3,536 | ) |
Adjusted Funds From Operations (AFFO)* | |
$ | 21,137 | | |
$ | 19,896 | | |
$ | 41,033 | | |
$ | 24,527 | | |
$ | 20,644 | | |
$ | 23,318 | | |
$ | 20,207 | | |
$ | 88,696 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Per Share Data: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
EPS | |
$ | 0.13 | | |
$ | 0.04 | | |
$ | 0.16 | | |
$ | 0.04 | | |
$ | 0.04 | | |
$ | 0.02 | | |
$ | 0.04 | | |
$ | 0.13 | |
FFO* | |
| 0.26 | | |
| 0.27 | | |
| 0.53 | | |
| 0.29 | | |
| 0.28 | | |
| 0.28 | | |
| 0.27 | | |
| 1.12 | |
AFFO* | |
| 0.21 | | |
| 0.20 | | |
| 0.41 | | |
| 0.24 | | |
| 0.21 | | |
| 0.23 | | |
| 0.20 | | |
| 0.89 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Weighted Average Shares (basic and diluted) | |
| 100,187 | | |
| 100,187 | | |
| 100,187 | | |
| 100,187 | | |
| 100,187 | | |
| 100,187 | | |
| 100,187 | | |
| 100,187 | |
* See the Appendix for Definitions of these Non-GAAP Measures beginning
on page 27.
|
|
EBITDA
Reconciliation (in thousands, except ratio amounts) |
| |
| | |
| | |
Six Months | | |
| | |
| | |
| | |
| | |
| |
| |
For the Three Months Ended | | |
Ended | | |
For the Three Months Ended | | |
Year Ended | |
| |
31-Mar-15 | | |
30-Jun-15 | | |
30-Jun-15 | | |
31-Mar-14 | | |
30-Jun-14 | | |
30-Sep-14 | | |
31-Dec-14 | | |
31-Dec-14 | |
| |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| |
Net income | |
$ | 12,533 | | |
$ | 3,903 | | |
$ | 16,436 | | |
$ | 3,573 | | |
$ | 3,713 | | |
$ | 1,567 | | |
$ | 4,295 | | |
$ | 13,148 | |
Interest expense | |
| 6,187 | | |
| 6,365 | | |
| 12,552 | | |
| 7,176 | | |
| 6,891 | | |
| 6,883 | | |
| 6,483 | | |
| 27,433 | |
Depreciation and amortization | |
| 22,678 | | |
| 23,168 | | |
| 45,846 | | |
| 24,289 | | |
| 23,638 | | |
| 25,374 | | |
| 23,249 | | |
| 96,550 | |
Income taxes | |
| 161 | | |
| 154 | | |
| 315 | | |
| 137 | | |
| 117 | | |
| 149 | | |
| 95 | | |
| 498 | |
EBITDA | |
| 41,559 | | |
| 33,590 | | |
| 75,149 | | |
| 35,175 | | |
| 34,359 | | |
| 33,973 | | |
| 34,122 | | |
| 137,629 | |
Excluding (gain) loss on sale, less applicable income
tax | |
| (10,462 | ) | |
| (948 | ) | |
| (11,410 | ) | |
| — | | |
| — | | |
| — | | |
| (940 | ) | |
| (940 | ) |
Adjusted EBITDA | |
$ | 31,097 | | |
$ | 32,642 | | |
$ | 63,739 | | |
$ | 35,175 | | |
$ | 34,359 | | |
$ | 33,973 | | |
$ | 33,182 | | |
$ | 136,689 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Interest expense | |
$ | 6,187 | | |
$ | 6,365 | | |
$ | 12,552 | | |
$ | 7,176 | | |
$ | 6,891 | | |
$ | 6,883 | | |
$ | 6,483 | | |
$ | 27,433 | |
Scheduled principal payments | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
Interest and scheduled principal payments | |
$ | 6,187 | | |
$ | 6,365 | | |
$ | 12,552 | | |
$ | 7,176 | | |
$ | 6,891 | | |
$ | 6,883 | | |
$ | 6,483 | | |
$ | 27,433 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Interest coverage ratio | |
| 5.03 | | |
| 5.13 | | |
| 5.08 | | |
| 4.90 | | |
| 4.99 | | |
| 4.94 | | |
| 5.12 | | |
| 4.98 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Debt service coverage ratio | |
| 5.03 | | |
| 5.13 | | |
| 5.08 | | |
| 4.90 | | |
| 4.99 | | |
| 4.94 | | |
| 5.12 | | |
| 4.98 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Debt | |
$ | 860,000 | | |
$ | 920,000 | | |
$ | 920,000 | | |
$ | 936,500 | | |
$ | 916,500 | | |
$ | 905,000 | | |
$ | 888,000 | | |
| | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Adjusted EBITDA | |
| 31,097 | | |
| 32,642 | | |
| 63,739 | | |
| 35,175 | | |
| 34,359 | | |
| 33,973 | | |
| 33,182 | | |
| | |
Annualized | |
| 124,388 | | |
| 130,568 | | |
| 127,478 | | |
| 140,700 | | |
| 137,436 | | |
| 135,892 | | |
| 132,728 | | |
| | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Debt-to-EBITDA | |
| 6.9 | | |
| 7.0 | | |
| 7.2 | | |
| 6.7 | | |
| 6.7 | | |
| 6.7 | | |
| 6.7 | | |
| | |
* See the Appendix for Definitions of these Non-GAAP Measures beginning on page 27. Amounts in the EBITDA reconciliation do
not reflect our proportionate share of interest expense, depreciation, amortization , income taxes, gains or losses on sales
and debt from our investments in non-consolidated REITs , which are accounted for under the equity method.
|
|
Reconciliation of Net Income to Property NOI* (in thousands) |
Reconciliation to Net income | |
| |
| |
Six Months | |
| |
| |
Six Months |
| |
Three Months Ended | |
Ended | |
Three Months Ended | |
Ended |
| |
31-Mar-15 | |
30-Jun-15 | |
30-Jun-15 | |
31-Mar-14 | |
30-Jun-14 | |
30-Jun-14 |
Net Income | |
$ | 12,533 | | |
$ | 3,903 | | |
$ | 16,436 | | |
$ | 3,573 | | |
$ | 3,713 | | |
$ | 7,286 | |
Add (deduct): | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Gain on sale of properties,less applicable income taxes | |
| (10,462 | ) | |
| (948 | ) | |
| (11,410 | ) | |
| — | | |
| — | | |
| — | |
Loss provision or (gain) on sale of assets | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
Management fee income | |
| (643 | ) | |
| (559 | ) | |
| (1,202 | ) | |
| (646 | ) | |
| (682 | ) | |
| (1,328 | ) |
Depreciation and amortization | |
| 22,672 | | |
| 23,207 | | |
| 45,879 | | |
| 24,300 | | |
| 23,563 | | |
| 47,863 | |
Amortization of above/below market leases | |
| 6 | | |
| (39 | ) | |
| (33 | ) | |
| (11 | ) | |
| 74 | | |
| 63 | |
Selling, general and administrative | |
| 3,691 | | |
| 3,401 | | |
| 7,092 | | |
| 3,272 | | |
| 3,148 | | |
| 6,420 | |
Interest expense | |
| 6,187 | | |
| 6,365 | | |
| 12,552 | | |
| 7,176 | | |
| 6,891 | | |
| 14,067 | |
Interest income | |
| (1,262 | ) | |
| (1,278 | ) | |
| (2,540 | ) | |
| (1,410 | ) | |
| (1,408 | ) | |
| (2,818 | ) |
Equity in losses of | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
non-consolidated REITs | |
| 322 | | |
| 38 | | |
| 360 | | |
| 484 | | |
| 552 | | |
| 1,036 | |
Non-property specific items, net | |
| (20 | ) | |
| (195 | ) | |
| (215 | ) | |
| (165 | ) | |
| 75 | | |
| (90 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Property NOI | |
$ | 33,024 | | |
$ | 33,895 | | |
$ | 66,919 | | |
$ | 36,573 | | |
$ | 35,926 | | |
$ | 72,499 | |
* See the Appendix for Definition of Non-GAAP Measures beginning
on page 27.
|
|
Debt
Summary
(in thousands) |
| |
| |
Maximum | |
Amount | |
Interest | |
Interest | |
|
| |
Maturity | |
Amount | |
Drawn at | |
Rate | |
Rate at | |
Facility |
| |
Date | |
of Loan | |
30-Jun-15 | |
Components | |
30-Jun-15 | |
Fee |
| |
| |
| |
| |
| |
| |
|
BAML Revolver | |
| 29-Oct-18 | | |
$ | 500,000 | | |
$ | 300,000 | | |
| L+1.25% | | |
| 1.43 | % | |
| 0.25 | % |
BAML Term Loan | |
| 27-Sep-17 | | |
| 400,000 | | |
| 400,000 | | |
| 0.75%
+ 1.45% | | |
| 2.20 | % | |
| | |
BMO Term Loan | |
| 26-Aug-20 | | |
| 220,000 | | |
| 220,000 | | |
| 2.32%
+ 1.65% | | |
| 3.97 | % | |
| | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| |
| | | |
$ | 1,120,000 | | |
$ | 920,000 | | |
| | | |
| 2.37 | % | |
| | |
(a) Interest rate excludes amortization of deferred financing costs
and facility fees, see notes below
On October 29, 2014, we amended and restated our bank facility
we call the BAML Credit Facility, which has a total of $900 million available and is comprised of a revolver that we can borrow
up to $500 million on, which we call the BAML Revolver and a term loan for $400 million that we call the BAML Term Loan. On August
26, 2013, we entered into a term loan we call the BMO Term Loan and borrowed $220 million. Additional information about these
loans are in the footnotes to our financial statements. Pricing is based on our credit rating for the BAML Revolver, BAML Term
Loan and the BMO Term Loan. Our credit rating as of June 30, 2015 was Baa3 from Moody’s.
| • | The BAML Revolver is priced based on our
current credit rating at a spread of 1.25%, which was an interest rate of 1.43% as of June 30, 2015. The BAML Revolver is also
subject to a facility fee based on our credit rating, which was 25 bps or approximately $1.25 million per year. |
| • | The BAML Term Loan has LIBOR fixed at 0.75% for five years. At our credit rating the spread for
the BAML Term Loan is 1.45%, so our interest rate is 2.20%. |
| • | The BMO Term Loan has fixed LIBOR at 2.32% for seven years. At our credit rating the spread over
LIBOR is 1.65%, so our interest rate is 3.97%. |
| • | We incurred financing costs to close the BAML Revolver, BAML Term Loan and the credit facilities
that preceded them. We also incurred financing costs to close the BMO Term Loan. These costs are deferred and amortized into interest
expense during the terms of the loans. The annual run rate for amortization to interest expense from deferred financing costs is
approximately $2.1 million. |
| • | The BAML Revolver can be extended for 1 year at the Company’s option upon payment of fees
and includes an accordion feature that allows for up to $250 million of additional borrowing capacity. The BMO Term Loan includes
an accordion feature that allows for up to $50 million of additional borrowing capacity. The accordion features are subject to
receipt of lender commitments and satisfaction of certain customary conditions. |
|
|
Capital Analysis
(in thousands, except per share amounts) |
| |
31-Mar-15 | |
30-Jun-15 | |
31-Mar-14 | |
30-Jun-14 | |
30-Sep-14 | |
31-Dec-14 |
Market Data: | |
| |
| |
| |
| |
| |
|
Shares Outstanding | |
| 100,187 | | |
| 100,187 | | |
| 100,187 | | |
| 100,187 | | |
| 100,187 | | |
| 100,187 | |
Closing market price per share | |
$ | 12.82 | | |
$ | 11.31 | | |
$ | 12.60 | | |
$ | 12.58 | | |
$ | 11.22 | | |
$ | 12.27 | |
Market capitalization | |
$ | 1,284,403 | | |
$ | 1,133,120 | | |
$ | 1,262,361 | | |
$ | 1,260,358 | | |
$ | 1,124,103 | | |
$ | 1,229,299 | |
Total Debt | |
| 860,000 | | |
| 920,000 | | |
| 936,500 | | |
| 916,500 | | |
| 905,000 | | |
| 888,000 | |
Total Market Capitalization | |
$ | 2,144,403 | | |
$ | 2,053,120 | | |
$ | 2,198,861 | | |
$ | 2,176,858 | | |
$ | 2,029,103 | | |
$ | 2,117,299 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Dividend Data: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Total dividends paid | |
$ | 19,036 | | |
$ | 19,036 | | |
$ | 19,036 | | |
$ | 19,035 | | |
$ | 19,036 | | |
$ | 19,036 | |
Common dividend per share | |
$ | 0.19 | | |
$ | 0.19 | | |
$ | 0.19 | | |
$ | 0.19 | | |
$ | 0.19 | | |
$ | 0.19 | |
Quarterly dividend as a % of FFO* | |
| 73.1 | % | |
| 70.4 | % | |
| 65.5 | % | |
| 67.9 | % | |
| 67.9 | % | |
| 70.4 | % |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Liquidity: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Cash and cash equivalents | |
$ | 14,946 | | |
$ | 15,841 | | |
$ | 20,031 | | |
$ | 18,455 | | |
$ | 15,930 | | |
$ | 7,519 | |
Revolving credit facilities: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Gross potential available under the BAML Credit Facility | |
| 900,000 | | |
| 900,000 | | |
| 900,000 | | |
| 900,000 | | |
| 900,000 | | |
| 900,000 | |
Less: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Outstanding balance | |
| (640,000 | ) | |
| (700,000 | ) | |
| (716,500 | ) | |
| (696,500 | ) | |
| (685,000 | ) | |
| (668,000 | ) |
Total Liquidity | |
$ | 274,946 | | |
$ | 215,841 | | |
$ | 203,531 | | |
$ | 221,955 | | |
$ | 230,930 | | |
$ | 239,519 | |
*See page 9 for a reconciliation of Net Income to FFO and the Appendix
for Definitions of Non-GAAP Measures beginning on page 27.
|
|
Portfolio Overview |
|
As of the Quarter Ended |
|
30-Jun-15 |
31-Mar-15 | |
31-Dec-14 | |
30-Sep-14 | |
30-Jun-14 |
Owned portfolio of commercial real estate: |
|
| |
| |
| |
|
Number of properties |
36 | |
| 36 | | |
| 38 | | |
| 39 | | |
| 39 | |
Square feet |
9,639,740 | |
| 9,310,131 | | |
| 9,580,057 | | |
| 9,690,361 | | |
| 9,686,215 | |
Leased percentage |
90.6 | % |
| 90.4 | % | |
| 92.8 | % | |
| 93.3 | % | |
| 94.1 | % |
|
| |
| | | |
| | | |
| | | |
| | |
Investments in non-consolidated |
| |
| | | |
| | | |
| | | |
| | |
commercial real estate: |
| |
| | | |
| | | |
| | | |
| | |
Number of properties |
2 | |
| 2 | | |
| 2 | | |
| 2 | | |
| 2 | |
Square feet |
1,396,071 | |
| 1,396,071 | | |
| 1,395,780 | | |
| 1,395,500 | | |
| 1,395,500 | |
Leased percentage |
69.7 | % |
| 70.1 | % | |
| 71.3 | % | |
| 71.0 | % | |
| 65.5 | % |
|
| |
| | | |
| | | |
| | | |
| | |
Single Asset REITs (SARs) managed: |
| |
| | | |
| | | |
| | | |
| | |
Number of properties |
7 | |
| 7 | | |
| 8 | | |
| 9 | | |
| 11 | |
Square feet |
1,487,026 | |
| 1,488,003 | | |
| 1,897,801 | | |
| 2,036,572 | | |
| 2,687,775 | |
Leased percentage |
73.5 | % |
| 73.4 | % | |
| 84.7 | % | |
| 86.6 | % | |
| 89.1 | % |
|
| |
| | | |
| | | |
| | | |
| | |
|
| |
| | | |
| | | |
| | | |
| | |
Total owned (a) , investments and managed properties: |
| |
| | | |
| | | |
| | | |
| | |
Number of properties |
45 | |
| 45 | | |
| 48 | | |
| 50 | | |
| 52 | |
Square feet |
12,522,837 | |
| 12,194,205 | | |
| 12,873,638 | | |
| 13,122,433 | | |
| 13,769,490 | |
Leased percentage |
86.3 | % |
| 86.0 | % | |
| 89.3 | % | |
| 89.9 | % | |
| 90.2 | % |
|
|
Owned Portfolio Overview |
|
| |
| |
|
|
| |
Percent | |
Wtd
Ave (a) | |
GAAP
(b) |
MSA
/ Property Name |
| |
City | |
State |
|
Square
Feet | |
Leased | |
Occupied | |
Rent |
|
| |
| |
|
|
| |
| |
| |
|
East
Region |
| |
| |
| | |
|
| | | |
| | | |
| | | |
| | |
|
| |
| |
| | |
|
| | | |
| | | |
| | | |
| | |
Baltimore |
| |
| |
| | |
|
| | | |
| | | |
| | | |
| | |
East
Baltimore |
| |
Baltimore | |
| MD | |
|
| 325,445 | | |
| 81.3 | % | |
| 81.3 | % | |
$ | 23.13 | |
|
| |
| |
| | |
|
| | | |
| | | |
| | | |
| | |
Washington,
D.C. |
| |
| |
| | |
|
| | | |
| | | |
| | | |
| | |
Meadow
Point |
| |
Chantilly | |
| VA | |
|
| 138,537 | | |
| 100.0 | % | |
| 92.6 | % | |
$ | 27.29 | |
Stonecroft |
| |
Chantilly | |
| VA | |
|
| 111,469 | | |
| 100.0 | % | |
| 100.0 | % | |
$ | 37.76 | |
Loudoun
Tech Center |
| |
Dulles | |
| VA | |
|
| 136,658 | | |
| 92.0 | % | |
| 92.0 | % | |
$ | 18.53 | |
|
| |
| |
| | |
|
| | | |
| | | |
| | | |
| | |
Richmond |
| |
| |
| | |
|
| | | |
| | | |
| | | |
| | |
Innsbrook |
| |
Glen
Allen | |
| VA | |
|
| 298,456 | | |
| 99.9 | % | |
| 99.9 | % | |
$ | 18.74 | |
|
| |
| |
| | |
|
| | | |
| | | |
| | | |
| | |
Charlotte |
| |
| |
| | |
|
| | | |
| | | |
| | | |
| | |
Forest
Park |
| |
Charlotte | |
| NC | |
|
| 62,212 | | |
| 100.0 | % | |
| 100.0 | % | |
$ | 13.77 | |
|
| |
| |
| | |
|
| | | |
| | | |
| | | |
| | |
Raleigh-Durham |
| |
| |
| | |
|
| | | |
| | | |
| | | |
| | |
Emperor
Boulevard |
| |
Durham | |
| NC | |
|
| 259,531 | | |
| 100.0 | % | |
| 100.0 | % | |
$ | 36.18 | |
|
| |
| |
| | |
|
| | | |
| | | |
| | | |
| | |
East
Region Total |
| |
| |
| | |
|
| 1,332,308 | | |
| 94.6 | % | |
| 93.8 | % | |
$ | 25.59 | |
|
| |
| |
| | |
|
| | | |
| | | |
| | | |
| | |
Midwest
Region |
| |
| |
| | |
|
| | | |
| | | |
| | | |
| | |
|
| |
| |
| | |
|
| | | |
| | | |
| | | |
| | |
Chicago |
| |
| |
| | |
|
| | | |
| | | |
| | | |
| | |
Northwest
Point |
| |
Elk
Grove Village | |
| IL | |
|
| 176,848 | | |
| 100.0 | % | |
| 100.0 | % | |
$ | 23.17 | |
909
Davis Street |
| |
Evanston | |
| IL | |
|
| 195,245 | | |
| 100.0 | % | |
| 98.4 | % | |
$ | 35.91 | |
|
| |
| |
| | |
|
| | | |
| | | |
| | | |
| | |
Indianapolis |
| |
| |
| | |
|
| | | |
| | | |
| | | |
| | |
River
Crossing |
| |
Indianapolis | |
| IN | |
|
| 205,059 | | |
| 90.6 | % | |
| 96.7 | % | |
$ | 19.55 | |
|
| |
| |
| | |
|
| | | |
| | | |
| | | |
| | |
St.
Louis |
| |
| |
| | |
|
| | | |
| | | |
| | | |
| | |
Timberlake |
| |
Chesterfield | |
| MO | |
|
| 234,023 | | |
| 93.8 | % | |
| 43.7 | % | |
$ | 24.03 | |
Timberlake
East |
| |
Chesterfield | |
| MO | |
|
| 116,197 | | |
| 43.7 | % | |
| 20.9 | % | |
$ | 21.03 | |
Lakeside
Crossing |
| |
Maryland
Heights | |
| MO | |
|
| 127,778 | | |
| 100.0 | % | |
| 100.0 | % | |
$ | 24.47 | |
|
| |
| |
| | |
|
| | | |
| | | |
| | | |
| | |
Minneapolis |
| |
| |
| | |
|
| | | |
| | | |
| | | |
| | |
121
South 8th Street |
| |
Minneapolis | |
| MN | |
|
| 475,012 | | |
| 90.2 | % | |
| 90.2 | % | |
$ | 15.34 | |
|
| |
| |
| | |
|
| | | |
| | | |
| | | |
| | |
Midwest
Region Total |
| |
| |
| | |
|
| 1,530,162 | | |
| 90.5 | % | |
| 81.7 | % | |
$ | 22.03 | |
|
|
Owned Portfolio Overview |
| |
| |
| |
| |
Percent | |
Wtd
Ave (a) | |
GAAP
(b) |
MSA
/ Property Name | |
City | |
State | |
Square
Feet | |
Leased | |
Occupied | |
Rent |
| |
| |
| | | |
| | | |
| | | |
| | | |
| | |
South
Region | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
| |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Dallas-Fort
Worth | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Legacy
Tennyson Center | |
Plano | |
| TX | | |
| 202,600 | | |
| 100.0 | % | |
| 100.0 | % | |
$ | 17.60 | |
One Legacy Circle | |
Plano | |
| TX | | |
| 214,110 | | |
| 100.0 | % | |
| 100.0 | % | |
$ | 33.33 | |
Addison Circle | |
Addison | |
| TX | | |
| 289,974 | | |
| 91.6 | % | |
| 86.2 | % | |
$ | 23.77 | |
Collins Crossing | |
Richardson | |
| TX | | |
| 300,472 | | |
| 100.0 | % | |
| 99.5 | % | |
$ | 24.15 | |
Liberty Plaza | |
Addison | |
| TX | | |
| 218,934 | | |
| 84.2 | % | |
| 87.9 | % | |
$ | 20.65 | |
| |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Houston | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Park Ten | |
Houston | |
| TX | | |
| 157,460 | | |
| 63.1 | % | |
| 63.1 | % | |
$ | 31.66 | |
Eldridge Green | |
Houston | |
| TX | | |
| 248,399 | | |
| 100.0 | % | |
| 100.0 | % | |
$ | 31.37 | |
Park Ten Phase II | |
Houston | |
| TX | | |
| 156,746 | | |
| 100.0 | % | |
| 100.0 | % | |
$ | 31.43 | |
Westchase I & II | |
Houston | |
| TX | | |
| 629,025 | | |
| 95.9 | % | |
| 96.2 | % | |
$ | 33.83 | |
| |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Miami-Ft.
Lauderdale-West Palm Beach | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Blue Lagoon Drive | |
Miami | |
| FL | | |
| 212,619 | | |
| 100.0 | % | |
| 100.0 | % | |
$ | 23.28 | |
| |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Atlanta | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
One
Overton Place | |
Atlanta | |
| GA | | |
| 387,267 | | |
| 84.5 | % | |
| 78.1 | % | |
$ | 24.82 | |
One
Ravinia | |
Atlanta | |
| GA | | |
| 386,603 | | |
| 95.2 | % | |
| 95.2 | % | |
$ | 22.82 | |
Two
Ravinia | |
Atlanta | |
| GA | | |
| 442,130 | | |
| 77.5 | % | |
| 75.9 | % | |
$ | 24.79 | |
999
Peachtree | |
Houston | |
| TX | | |
| 621,946 | | |
| 95.1 | % | |
| 95.7 | % | |
$ | 28.90 | |
South
Region Total | |
| |
| | | |
| 4,468,285 | | |
| 84.5 | % | |
| 91.4 | % | |
$ | 27.08 | |
| |
| |
| | | |
| | | |
| | | |
| | | |
| | |
West
Region | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
| |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Seattle | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Federal Way | |
Federal Way | |
| WA | | |
| 117,010 | | |
| 58.9 | % | |
| 57.7 | % | |
$ | 18.65 | |
| |
| |
| | | |
| | | |
| | | |
| | | |
| | |
San
Francisco-San Jose-Oakland | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Hillview Center | |
Milpitas | |
| CA | | |
| 36,288 | | |
| 100.0 | % | |
| 100.0 | % | |
$ | 16.28 | |
Montague Business Center | |
San Jose | |
| CA | | |
| 145,951 | | |
| 81.1 | % | |
| 81.1 | % | |
$ | 16.37 | |
| |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Denver | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
380 Interlocken | |
Broomfield | |
| CO | | |
| 240,185 | | |
| 97.1 | % | |
| 95.8 | % | |
$ | 29.39 | |
1999 Broadway | |
Denver | |
| CO | | |
| 676,379 | | |
| 86.2 | % | |
| 86.8 | % | |
$ | 32.16 | |
Greenwood Plaza | |
Englewood | |
| CO | | |
| 196,236 | | |
| 100.0 | % | |
| 100.0 | % | |
$ | 24.48 | |
390 Interlocken | |
Broomfield | |
| CO | | |
| 241,516 | | |
| 72.3 | % | |
| 71.3 | % | |
$ | 28.40 | |
1001 17th Street | |
Denver | |
| CO | | |
| 655,420 | | |
| 86.3 | % | |
| 83.1 | % | |
$ | 34.65 | |
| |
| |
| | | |
| | | |
| | | |
| | | |
| | |
West
Region Total | |
| |
| | | |
| 2,308,985 | | |
| 85.6 | % | |
| 84.6 | % | |
$ | 29.71 | |
| |
| |
| | | |
| | | |
| | | |
| | | |
| | |
| |
| |
| | | |
| | | |
| | | |
| | | |
| | |
| |
| |
| | | |
| | | |
| | | |
| | | |
| | |
| |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Total
Owned | |
| |
| | | |
| 9,639,740 | | |
| 90.6 | % | |
| 88.5 | % | |
$ | 26.73 | |
(a) Weighted Occupied Percentage for the six months ended June 30, 2015. |
(b) Weighted Average GAAP Rent per Occupied Square Foot. |
|
|
|
Managed Portfolio Overview |
|
MSA / Property Name |
City |
State |
Square Feet |
|
|
|
|
|
|
Southeast Region |
|
|
|
|
|
|
|
|
|
Columbia |
|
|
|
|
1441 Main Street |
Columbia |
SC |
264,857 |
|
|
|
|
|
|
Atlanta |
|
|
|
|
Satellite Place |
Duluth |
GA |
134,785 |
|
|
|
|
|
|
Southeast Region Total |
|
|
399,642 |
|
|
|
|
|
|
Southwest Region |
|
|
|
|
|
|
|
|
|
Houston |
|
|
|
|
Energy Tower I |
Houston |
TX |
325,797 |
|
|
|
|
|
|
Denver |
|
|
|
|
385 Interlocken |
Broomfield |
CO |
295,891 |
|
|
|
|
|
|
Southwest Region Total |
|
|
621,688 |
|
|
|
|
|
|
Midwest Region |
|
|
|
|
|
|
|
|
|
Chicago |
|
|
|
(a) |
East Wacker |
Chicago |
IL |
861,000 |
|
|
|
|
|
|
Indianapolis |
|
|
|
|
Monument Circle |
Indianapolis |
IN |
213,760 |
|
|
|
|
|
|
St. Louis |
|
|
|
|
Lakeside Crossing II |
Maryland Heights |
MO |
116,000 |
|
|
|
|
|
|
Kansas City |
|
|
|
(b) |
Grand Boulevard |
Kansas City |
MO |
535,071 |
|
|
|
|
|
|
Cincinnati |
|
|
|
|
Centre Pointe V |
West Chester |
OH |
135,936 |
|
|
|
|
|
|
|
|
|
|
|
Midwest Region Total |
|
|
1,861,767 |
|
|
|
|
|
|
Total Managed |
|
|
2,883,097 |
|
|
|
|
|
|
Total Owned & Managed |
|
|
12,522,837 |
(a) FSP has a Preferred Share Interest of 43.7% in the entity
that owns this property.
(b) FSP has a Preferred Share Interest of 27.0% in the entity
that owns this property.
|
|
Tenants By Industry
(By Square Feet) |
|
|
20 Largest Tenants with Annualized Rent and
Remaining Term (Owned Portfolio) |
|
|
|
|
|
|
|
% of |
|
|
|
|
|
% of |
|
Aggregate |
|
|
|
Remaining |
Aggregate |
Aggregate |
Annualized |
Leased |
|
Tenant |
Number of |
Lease Term |
Leased |
Leased |
Rent |
Annualized |
|
Name |
Leases |
in Months |
Square Feet |
Square Feet |
(in 000's) |
Rent |
|
|
|
|
|
|
|
|
1 |
TCF National Bank |
2 |
6 |
263,111 |
3.0% |
$ 2,997,573 |
1.3% |
2 |
Quintiles Transnational Corp |
1 |
45 |
259,531 |
3.0% |
9,067,770 |
4.0% |
3 |
CITGO Petroleum Corporation |
1 |
80 |
248,399 |
2.8% |
7,904,056 |
3.5% |
4 |
Newfield Exploration Company |
1 |
80 |
234,495 |
2.7% |
8,614,349 |
3.8% |
5 |
US Government (a) |
5 |
12, 14, 35, 49, 63 |
223,433 |
2.6% |
7,173,033 |
3.2% |
6 |
Sutherland Asbill Brennan LLP |
1 |
58 |
222,422 |
2.5% |
6,823,317 |
3.0% |
7 |
Burger King Corporation |
1 |
39 |
212,619 |
2.4% |
5,134,749 |
2.3% |
8 |
Denbury Onshore, LLC (b) |
2 |
13, 49 |
202,600 |
2.3% |
3,510,042 |
1.6% |
9 |
SunTrust Bank (c) |
2 |
16, 75 |
182,888 |
2.1% |
3,736,826 |
1.7% |
10 |
Citicorp Credit Services, Inc |
1 |
18 |
176,848 |
2.0% |
4,612,196 |
2.1% |
11 |
T-Mobile South, LLC dba T-Mobile |
1 |
44 |
151,792 |
1.7% |
3,588,363 |
1.6% |
12 |
Houghton Mifflin Harcourt Publishing Company |
1 |
21 |
150,050 |
1.7% |
6,243,052 |
2.8% |
13 |
Petrobras America, Inc. |
1 |
53 |
144,813 |
1.7% |
5,337,807 |
2.4% |
14 |
Murphy Exploration & Production Company |
1 |
22 |
144,677 |
1.7% |
4,718,321 |
2.1% |
15 |
Argo Data Resource Corporation |
1 |
98 |
140,246 |
1.6% |
3,718,923 |
1.7% |
16 |
Monsanto Company |
1 |
55 |
127,778 |
1.5% |
3,019,394 |
1.3% |
17 |
Federal National Mortgage Association |
1 |
15 |
123,144 |
1.4% |
2,695,622 |
1.2% |
18 |
Vail Corp d/b/a Vail Resorts (d) |
2 |
45, 93 |
122,232 |
1.4% |
3,471,917 |
1.5% |
19 |
Kaiser Foundation Health Plan |
1 |
107 |
120,979 |
1.4% |
3,000,611 |
1.3% |
20 |
Centene Management Company, LLC (e) |
1 |
96 |
117,618 |
1.3% |
- |
- |
|
|
|
|
|
|
|
|
|
|
|
Total |
3,569,675 |
40.9% |
$ 95,367,921 |
42.4% |
| (a) | Includes 180,444 and 27,398 square feet which expire in 2018 & 2017, respectively. |
The remaining 15,591 square feet expire between
2016-2020.
| (b) | Includes 102,600 square feet which expire 7/31/16 and 100,000 square feet that expires 7/31/19. |
| (c) | Includes 55,388 square feet which expires October 31, 2016. The remaining 127,500 square feet expires September 30, 2021. |
| d) | Includes 38,293 square feet which expires March 31, 2019. The remaining 83,939 square feet expires March 31, 2023. |
| (e) | The lease was executed June 30, 2015 and rent has not commenced. |
|
|
Leasing
Activity
(Owned Portfolio) |
| |
Six Months | |
Year | |
Year |
| |
Ended | |
Ended | |
Ended |
Leasing Activity | |
| 30-Jun-15 | | |
| 31-Dec-14 | | |
| 31-Dec-13 | |
(in Square Feet - SF) | |
| | | |
| | | |
| | |
New leasing | |
| 218,000 | | |
| 149,000 | | |
| 267,000 | |
Renewals | |
| 329,000 | | |
| 635,000 | | |
| 645,000 | |
| |
| 547,000 | | |
| 784,000 | | |
| 912,000 | |
| |
| | | |
| | | |
| | |
Other information per SF | |
| | | |
| | | |
| | |
(Activity on a year-to-date basis) | |
| | | |
| | | |
| | |
GAAP Rents on leasing | |
$ | 26.38 | | |
$ | 26.89 | | |
$ | 23.33 | |
Weighted average lease term | |
| 4.8 Years | | |
| 6.25 Years | | |
| 7.2 Years | |
| |
| | | |
| | | |
| | |
| |
| | | |
| | | |
| | |
Increase over average GAAP rents in prior year | |
| 12.9% | | |
| 11.8% | | |
| 8.0% | |
| |
| | | |
| | | |
| | |
Average free rent | |
| 3 Months | | |
| 3 Months | | |
| 3 Months | |
Tenant Improvements | |
$ | 15.97 | | |
$ | 16.40 | | |
$ | 18.25 | |
Leasing Costs | |
$ | 5.80 | | |
$ | 7.66 | | |
$ | 8.48 | |
|
|
Lease
Expirations by Square Feet
(Owned Portfolio) |
Year |
|
Total
Square Feet |
|
%
of
Square Feet |
|
|
|
|
|
2015 |
|
218,762 |
|
2.3% |
2016 |
|
1,084,573 |
|
11.3% |
2017 |
|
1,122,704 |
|
11.6% |
2018 |
|
956,527 |
|
9.9% |
2019 |
|
1,485,457 |
|
15.4% |
2020 |
|
841,461 |
|
8.7% |
2021 |
|
783,618 |
|
8.1% |
2022 |
|
998,198 |
|
10.4% |
2023 |
|
547,766 |
|
5.7% |
2024 |
|
243,343 |
|
2.5% |
2025 |
|
320,666 |
|
3.3% |
2026 |
|
134,218 |
|
1.4% |
Vacant |
|
902,447 |
|
9.4% |
|
|
|
|
|
Total |
|
9,639,740 |
|
100.0% |
|
|
Lease
Expirations
with Annualized Rent per Square Foot
(Owned Portfolio) |
|
|
|
|
Rentable |
|
|
|
Annualized |
|
Percentage |
|
|
|
|
Number
of |
|
Square
|
|
|
|
Rent |
|
of
Total |
|
|
Year
of |
|
Leases
|
|
Footage |
|
Annualized |
|
Per
Square |
|
Annualized |
|
|
Lease |
|
Expiring |
|
Subject
to |
|
Rent
Under |
|
Foot
Under |
|
Rent
Under |
|
|
Expiration |
|
Within
the |
|
Expiring |
|
Expiring |
|
Expiring |
|
Expiring |
|
Cumulative
|
December
31, |
|
Year |
|
Leases |
|
Leases
(a) |
|
Leases |
|
Leases |
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
2015 |
|
44 |
(b) |
218,762 |
|
$ 6,452,857 |
|
$ 29.50 |
|
2.9% |
|
2.9% |
2016 |
|
74 |
|
1,084,573 |
|
22,883,620 |
|
21.10 |
|
10.2% |
|
13.1% |
2017 |
|
77 |
|
1,122,704 |
|
32,850,890 |
|
29.26 |
|
14.6% |
|
27.7% |
2018 |
|
70 |
|
956,527 |
|
30,112,401 |
|
31.48 |
|
13.4% |
|
41.1% |
2019 |
|
64 |
|
1,485,457 |
|
41,151,089 |
|
27.70 |
|
18.3% |
|
59.4% |
2020 |
|
55 |
|
841,461 |
|
21,526,151 |
|
25.58 |
|
9.6% |
|
69.0% |
2021 |
|
22 |
|
783,673 |
|
18,588,678 |
|
23.72 |
|
8.2% |
|
77.2% |
2022 |
|
25 |
|
998,198 |
|
28,239,300 |
|
28.29 |
|
12.5% |
|
89.7% |
2023
and thereafter |
|
35 |
|
1,245,938 |
(c) |
23,115,313 |
|
18.55 |
|
10.3% |
|
100.0% |
|
|
466 |
|
8,737,293 |
|
$ 224,920,300 |
|
$ 25.74 |
|
100.0% |
|
|
Vacancies
as of 6/30/15 |
|
|
|
902,447 |
|
|
|
|
|
|
|
|
Total
Portfolio Square Footage |
|
|
|
9,639,740 |
|
|
|
|
|
|
|
|
| (a) | Annualized rent represents the monthly rent, including tenant reimbursements, for each lease in effect at June 30, 2015 mulitplied
by 12. Tenant reimbursements generally include payment of real estate taxes, operating expenses and common area maintenance and
utility charges. |
| (b) | Includes 17 leases that are month-to-month. |
| (c) | Includes 62,170 square feet that are non-revenue producing building amenities. |
|
|
Capital Expenditures |
(in thousands) | |
| | |
| | |
Six Months | | |
| | |
| |
| |
For
the Three Months Ended | | |
Ended | | |
| | |
| |
| |
31-Mar-15 | | |
30-Jun-15 | | |
30-Jun-15 | | |
| | |
| |
| |
| | |
| | |
| | |
| | |
| |
Tenant improvements | |
$ | 2,936 | | |
$ | 3,420 | | |
$ | 6,356 | | |
| | | |
| | |
Deferred leasing costs | |
| 830 | | |
| 1,539 | | |
| 2,369 | | |
| | | |
| | |
Non-investment capex | |
| 643 | | |
| 1,418 | | |
| 2,061 | | |
| | | |
| | |
Recurring
Capital Expenditures | |
| 4,409 | | |
| 6,377 | | |
| 10,786 | | |
| | | |
| | |
1st generation leasing | |
| 1,934 | | |
| 712 | | |
| 2,646 | | |
| | | |
| | |
Investment
capex | |
| 230 | | |
| 243 | | |
| 473 | | |
| | | |
| | |
Total
Capital Expenditures | |
$ | 6,573 | | |
$ | 7,332 | | |
$ | 13,905 | | |
| | | |
| | |
| |
For
the Three Months Ended | | |
Year ended | |
| |
31-Mar-14 | | |
30-Jun-14 | | |
30-Sep-14 | | |
31-Dec-14 | | |
31-Dec-14 | |
| |
| | |
| | |
| | |
| | |
| |
Tenant improvements | |
$ | 1,132 | | |
$ | 1,837 | | |
$ | 2,612 | | |
$ | 4,244 | | |
$ | 9,825 | |
Deferred leasing costs | |
| 1,080 | | |
| 2,786 | | |
| 577 | | |
| 1,405 | | |
| 5,848 | |
Non-investment capex | |
| 364 | | |
| 1,621 | | |
| 700 | | |
| 851 | | |
| 3,536 | |
Recurring
Capital Expenditures | |
| 2,576 | | |
| 6,244 | | |
| 3,889 | | |
| 6,500 | | |
| 19,209 | |
1st generation leasing | |
| 33 | | |
| 9 | | |
| 394 | | |
| 580 | | |
| 1,016 | |
Investment
capex | |
| 755 | | |
| 580 | | |
| 244 | | |
| 516 | | |
| 2,095 | |
Total
Capital Expenditures | |
$ | 3,364 | | |
$ | 6,833 | | |
$ | 4,527 | | |
$ | 7,596 | | |
$ | 22,320 | |
|
|
Transaction Activity |
Recent Acquisitions: |
|
|
|
|
|
|
Purchase Price |
|
|
|
City |
State |
Square Feet |
|
Date Acquired |
|
(in thousands) |
|
|
2015 |
|
|
|
|
|
|
|
|
|
Two Ravinia |
Atlanta |
GA |
442,130 |
|
4/8/15 |
|
$ 78,000 |
|
|
|
|
|
|
|
|
|
|
|
|
2013 |
|
|
|
|
|
|
|
|
|
1999 Broadway |
Denver |
CO |
673,793 |
|
5/22/13 |
|
$ 183,000 |
|
|
999 Peachtree |
Atlanta |
GA |
621,946 |
|
7/1/13 |
|
157,900 |
|
|
1001 17th Street |
Denver |
CO |
655,420 |
|
8/28/13 |
|
217,000 |
|
|
|
|
|
|
|
|
|
|
|
|
2012 |
|
|
|
|
|
|
|
|
|
One Ravinia |
Atlanta |
GA |
386,603 |
|
7/31/12 |
|
$ 52,750 |
|
|
Westchase |
Houston |
TX |
629,025 |
|
11/1/12 |
|
154,750 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recent Dispositions: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Sales |
|
Gains |
|
City |
State |
Square Feet |
|
Date Sold |
|
Proceeds |
|
on Sales |
2015 |
|
|
|
|
|
|
|
|
|
Willow Bend |
Plano |
TX |
117,050 |
|
2/23/15 |
|
$ 20,750 |
|
$ 1,462 |
Eden Bluff |
Eden Prairie |
MN |
153,028 |
|
3/31/15 |
|
28,000 |
|
9,000 |
Park Seneca |
Charlotte |
NC |
109,699 |
|
5/13/15 |
|
8,150 |
|
948 |
|
|
|
|
|
|
|
|
|
|
2014 |
|
|
|
|
|
|
|
|
|
Centennial |
Colorado Springs |
CO |
110,405 |
|
12/3/14 |
|
$ 15,500 |
|
$ 940 |
|
|
|
|
|
|
|
|
|
|
2013 |
|
|
|
|
|
|
|
|
|
East Renner Road |
Richardson |
TX |
122,300 |
|
10/29/13 |
|
$ 12,475 |
|
$ 2,169 |
|
|
Loan Portfolio of Secured Real Estate |
(dollars
in thousands) |
|
|
Maximum |
Amount |
|
|
Interest |
|
|
Maturity |
Amount |
Drawn
at |
Interest |
Draw |
Rate
at |
Sponsored
REIT |
Location |
Date |
of
Loan |
30-Jun-15 |
Rate
(1) |
Fee
(2) |
30-Jun-15 |
|
|
|
|
|
|
|
|
Secured revolving lines of credit |
|
|
|
|
|
|
|
FSP Satellite Place Corp. |
Duluth, GA |
31-Mar-17 |
$ 5,500 |
$ 5,500 |
L+4.4% |
0.5% |
4.58% |
FSP 1441 Main Street Corp. |
Columbia, SC |
31-Mar-16 |
10,800 |
9,000 |
L+4.4% |
0.5% |
4.58% |
FSP Energy Tower I Corp. |
Houston, TX |
30-Jun-17 |
20,000 |
8,600 |
L+5.0% |
0.5% |
5.18% |
|
|
|
|
|
|
|
|
Secured construction loan |
|
|
|
|
|
|
|
FSP 385 Interlocken |
|
|
|
|
|
|
|
Development Corp. |
Broomfield, CO |
30-Apr-16 |
42,000 |
37,541 |
L+4.4% |
n/a |
4.58% |
|
|
|
|
|
|
|
|
Mortgage loan secured by property |
|
|
|
|
|
|
|
FSP Energy Tower I Corp. |
Houston, TX |
30-Jun-17 |
33,000 |
33,000 |
6.41% |
n/a |
6.41% |
|
|
|
|
|
|
|
|
|
|
|
$ 111,300 |
$ 93,641 |
|
|
|
(1) The interest rate is 30-day LIBOR rate plus the additional rate
indicated, otherwise a fixed rate.
(2) The draw fee is a percentage of each new advance, and is paid
at the time of each new draw.
|
|
Net Asset Value Components |
(in
thousands except per share data) |
|
|
As
of |
|
30-Jun-15 |
Total Market
Capitalization Values |
|
Shares outstanding |
100,187.4 |
Closing
price, December 31st |
$ 11.31 |
Market capitalization |
$ 1,133,120 |
Debt |
920,000 |
Total Market
Capitalization |
$ 2,053,120 |
|
|
|
|
|
3
Months |
|
Ended |
NOI Components |
30-Jun-15 |
|
|
Same Store
NOI (1) |
$ 32,696 |
Acquisitions
(1) (2) |
767 |
Property
NOI (1) |
33,463 |
Full quarter
adjustment (3) |
74 |
Stabilized
portfolio |
$ 33,537 |
|
|
|
|
Financial
Statement Reconciliation: |
|
Rental Revenue |
$ 58,802 |
Rental operating
expenses |
(14,644) |
Real estate
taxes and insurance |
(9,469) |
NOI on assets
sold during the quarter |
(61) |
Taxes (4) |
(155) |
Management
fees & other (5) |
(936) |
Property
NOI (1) |
$ 33,537 |
Assets: |
|
Loans outstanding on secured RE |
$ 93,641 |
Investments in SARs (book basis) |
78,164 |
Straight-line rent receivable |
46,168 |
Asset held for sale |
- |
Cash and cash equivalents |
15,841 |
Restricted cash |
48 |
Tenant rent receivables |
2,886 |
Prepaid expenses |
279 |
Office computers and furniture |
562 |
Other assets: |
|
Deferred financing costs, net |
7,637 |
Other assets: Derivative Market Value |
918 |
Phoenix Tower Liquidating Trust (6) |
4 |
Other assets |
1,176 |
|
$ 247,324 |
|
- |
Liabilities: |
|
Debt |
$ 920,000 |
Accounts payable & accrued expenses |
41,526 |
Tenant security deposits |
4,315 |
Other liabilities: derivative liability |
7,632 |
|
$ 973,473 |
Other
information: |
|
|
|
Leased
SF to be FFO producing during 2015 (in 000's) |
179 |
|
|
Straight-line
rental revenue current quarter |
$ 574 |
|
|
Management
fee income current quarter |
$ 135 |
Interest
income from secured loans |
1,277 |
Management
fees and interest income from loans |
$ 1,412 |
|
|
FFO
from non-consolidated REITs - Q1 2015 (7): |
|
East
Wacker |
$ 424 |
Grand
Boulevard |
177 |
Total |
$ 601 |
Footnotes to the components
| (1) | See pages 11 & 28 for definitions and reconciliations |
| (2) | Includes NOI from 3 acquisitions 2013 |
| (3) | Adjustment to reflect property NOI for a full quarter in the quarter acquired, if necessary |
| (4) | HB3 Tax in Texas is classified as an income tax, though we treat it as a real estate tax in Property NOI |
| (5) | Management & other fees are eliminated in consolidation but included on Property NOI |
| (6) | Expected liquidating distribution from sale of equity interest (Collection within 2 years, subject to some expenses) |
| (7) | We report FFO from non-consolidated REITs for the previous quarter as their financial statements are not yet complete for the
current quarter. |
|
|
Appendix:
Non-GAAP Financial Measure Definitions |
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 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 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.
|
|
Appendix:
Non-GAAP Financial Measure Definitions |
Definition of Earnings before Interest,
Taxes, Depreciation and Amortization (EBITDA) and Adjusted EBITDA
EBITDA is defined as net income plus interest expense, income
tax expense and depreciation and amortization expense. Adjusted EBITDA is defined as EBITDA excluding gains and losses on sales
of properties or shares of equity investments or provisions for losses on assets held for sale. EBITDA and Adjusted EBITDA are
not intended to represent cash flow for the period, are not presented as an alternative to operating income as an indicator of
operating performance, should not be considered in isolation or as a substitute for measures of performance prepared in accordance
with GAAP and are not indicative of operating income or cash provided by operating activities as determined under GAAP. EBITDA
and Adjusted EBITDA are presented solely as a supplemental disclosure with respect to liquidity because the Company believes it
provides useful information regarding the Company's ability to service or incur debt. Because all companies do not calculate EBITDA
or Adjusted EBITDA the same way, this presentation may not be comparable to similarly titled measures of other companies. The Company
believes that net income is the financial measure calculated and presented in accordance with GAAP that is most directly comparable
to EBITDA and Adjusted EBITDA.
Definition of Property Net Operating
Income (Property 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 (the most directly comparable GAAP financial measure) plus selling, 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,
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 both periods, which we call Same Store. The Comparative Same
Store results include properties held for the periods presented and exclude 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 as an indication of our performance or to cash
flows as a measure of the Company's liquidity or its ability to make distributions.
|
|
Appendix:
Non-GAAP Financial Measure Definitions |
Definition of Adjusted Funds From Operations
(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 (a) 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.
|
|
Investor Relations Contact:
Georgia Touma
(877) 686-9496
InvestorRelations@franklinstreetproperties.com
|
Franklin Street Properties
Corp. ● 401 Edgewater Place ● Wakefield, MA 01880 ● (781) 557-1300
www.franklinstreetproperties.com
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