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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10 - Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2012

 

OR

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to __________.

 

Commission File Number: 000-52551

FSP 50 South Tenth Street Corp.

(Exact name of registrant as specified in its charter)

 

Delaware 20-5530367
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

 

401 Edgewater Place

Wakefield, MA 01880

(Address of principal executive offices)(Zip Code)

 

(781) 557-1300

(Registrant’s telephone number, including area code)

 

N/A

(Former name, former address and former fiscal year, if changed since last report)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

 

YES NO

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

 

YES NO

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

      Large accelerated filer Accelerated filer
      Non-accelerated filer (Do not check if a smaller reporting company) Smaller reporting company

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

 

YES NO

 

The number of shares of common stock outstanding was 1 and the number of shares of preferred stock outstanding was 700, each as of April 30, 2012.

 

 
 

 

FSP 50 South Tenth Street Corp.

 

Form 10-Q

 

Quarterly Report

March 31, 2012

 

Table of Contents

       
      Page
Part I. Financial Information  
       
  Item 1. Financial Statements  
       
    Consolidated Balance Sheets as of March 31, 2012 and December 31, 2011 2
       
    Consolidated Statements of Operations for the three months ended  
    March 31, 2012 and 2011 3
       
    Consolidated Statements of Cash Flows for the three months ended  
    March 31, 2012 and 2011 4
       
    Notes to Consolidated Financial Statements 5-8
       
  Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 9-15
       
  Item 3. Quantitative and Qualitative Disclosures About Market Risk 16
       
  Item 4. Controls and Procedures 16
       
       
Part II. Other Information  
       
  Item 1. Legal Proceedings 17
       
  Item 1A. Risk Factors 17
       
  Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 17
       
  Item 3. Defaults Upon Senior Securities 17
       
  Item 4. Mine Safety Disclosures 17
       
  Item 5. Other Information 17
       
  Item 6. Exhibits 17
       
Signatures   18

 

 

1
 

PART I – FINANCIAL INFORMATION

Item 1.     Financial Statements.

 

FSP 50 South Tenth Street Corp.
Consolidated Balance Sheets
(Unaudited)

 

(in thousands, except share and par value amounts)  March 31,
2012
   December 31,
2011
 
           
Assets:          
Real estate investments, at cost:          
Land  $21,974   $21,974 
Building and improvements   98,304    98,276 
    120,278    120,250 
Less accumulated depreciation   13,782    13,121 
Real estate investments, net   106,496    107,129 
           
Acquired real estate leases, net of accumulated amortization of $2,728 and $3,295, respectively   1,091    1,694 
Acquired favorable real estate leases, net of accumulated
amortization of $1,693 and $1,794, respectively
   625    824 
Cash and cash equivalents   10,089    9,519 
           
Tenant rent receivable, less allowance for doubtful accounts of $51 and $51, respectively   126    15 
Step rent receivable   743    771 
Lease acquisition costs   23,950    - 
Deferred leasing costs, net of accumulated amortization of $131 and $125, respectively   7,075    297 
Deferred financing costs, net of accumulated amortization of $156 and $0, respectively   1,278    1,084 
Prepaid expenses and other assets   14    140 
Total assets  $151,487   $121,473 
           
Liabilities and Stockholders’ Equity:          
           
Liabilities:          
Accounts payable and accrued expenses  $2,412   $1,531 
Tenant security deposits   107    107 
Loan payable - affiliate   106,200    76,200 
Acquired unfavorable real estate leases, net of accumulated amortization of $760 and $725, respectively   456    491 
Total liabilities   109,175    78,329 
           
Commitments and Contingencies:   -    - 
           
Stockholders’ Equity:          
Preferred Stock, $.01 par value, 1,540 shares authorized, 700 issued and outstanding at March 31, 2012 and December 31, 2011, aggregate liquidation preference $70,000   -    - 
Common Stock, $.01 par value, 1 share authorized, issued and outstanding   -    - 
Additional paid-in capital   64,224    64,224 
Retained earnings and distributions in excess of earnings   (21,912)   (21,080)
Total Stockholders’ Equity   42,312    43,144 
           
Total Liabilities and Stockholders’ Equity  $151,487   $121,473 
See accompanying notes to consolidated financial statements.

2
 

 

FSP 50 South Tenth Street Corp.
Consolidated Statements of Operations
(Unaudited)

 

   For the
Three Months Ended
March 31,
 
(in thousands, except share and per share amounts)  2012   2011 
         
         
Revenues:          
 Rental  $3,738   $3,887 
           
Total revenue   3,738    3,887 
           
Expenses:          
           
Rental operating expenses   971    1,047 
Real estate taxes and insurance   711    699 
Depreciation and amortization   1,283    849 
Interest expense   1,607    1,022 
           
Total expenses   4,572    3,617 
           
Net income (loss) before interest income   (834)   270 
           
Interest income   2    2 
           
Net income (loss) attributable to preferred stockholders  $(832)  $272 
           
Weighted average number of preferred shares outstanding,  basic and diluted   700    700 
           
Net income (loss) per preferred share, basic and diluted  $(1,189)  $389 
See accompanying notes to consolidated  financial statements.

 

3
 

 

FSP 50 South Tenth Street Corp.
Consolidated Statements of Cash Flows
(Unaudited)

 

   For the
Three Months Ended
March 31,
 
(in thousands)  2012   2011 
         
Cash flows from operating activities:          
    Net income (loss)  $(832)  $272 
    Adjustments to reconcile net income (loss) to net cash          
           provided by (used for) operating activities:          
                    Depreciation and amortization   1,439    864 
                    Amortization of favorable real estate leases   199    103 
                    Amortization of unfavorable real estate leases   (35)   (46)
                    Increase in bad debt reserve   -    21 
             Changes in operating assets and liabilities:          
                    Cash - held in escrow   -    (750)
                    Tenant rent receivable   (111)   (65)
                    Step rent receivable   28    (111)
                    Prepaid expenses and other assets   126    30 
                    Accounts payable and accrued expenses   901    774 
    Payment of lease acquisition costs   (23,950)   - 
    Payment of deferred leasing costs   (6,780)   (5)
           
                       Net cash provided by (used for) operating activities   (29,015)   1,087 
Cash flows from investing activities:          
    Purchase of real estate assets   (42)   (191)
           
                       Net cash used for investing activities   (42)   (191)
Cash flows from financing activities:          
    Distributions to stockholders   -    (1,225)
    Proceeds from loan payable – affiliate   30,000    - 
    Payments of deferred financing costs   (373)   - 
           
                      Net cash provided by (used for) financing activities   29,627    (1,225)
           
Net increase (decrease) in cash and cash equivalents   570    (329)
           
Cash and cash equivalents, beginning of period   9,519    8,864 
           
Cash and cash equivalents, end of period  $10,089   $8,535 
           
Supplemental disclosure of cash flow information:          
    Cash paid for interest  $1,400   $1,007 
           
Disclosure of non-cash investing activities:          
    Accrued costs for purchase of real estate assets  $6   $8 
See accompanying notes to consolidated financial statements.

 

4
 

FSP 50 South Tenth Street Corp.

Notes to Consolidated Financial Statements

(Unaudited)

 

1.     Organization, Basis of Presentation, Real Estate and Depreciation, Lease Acquisition Costs and Financial Instruments

 

Organization

 

FSP 50 South Tenth Street Corp. (the “Company”) was organized on September 12, 2006 as a corporation under the laws of the State of Delaware to purchase, own and operate a twelve-story multi-tenant office and retail building containing approximately 498,768 rentable square feet of space located in downtown Minneapolis, Minnesota (the “Property”). The Company acquired the Property on November 8, 2006. Franklin Street Properties Corp. (“Franklin Street”) (NYSE Amex: FSP) holds the sole share of the Company’s common stock, $.01 par value per share (the “Common Stock”). Between November 2006 and January 2007, FSP Investments LLC (member, FINRA and SIPC), a wholly-owned subsidiary of Franklin Street, completed the sale on a best efforts basis of 700 shares of preferred stock, $.01 par value per share (the “Preferred Stock”) in the Company. FSP Investments LLC sold the Preferred Stock in a private placement offering to “accredited investors” within the meaning of Regulation D under the Securities Act of 1933.

 

All references to the Company refer to FSP 50 South Tenth Street Corp. and its consolidated subsidiary, collectively, unless the context otherwise requires.

 

Basis of Presentation

 

The unaudited consolidated financial statements of the Company include all the accounts of the Company and its wholly-owned subsidiary. These financial statements should be read in conjunction with the Company's financial statements and notes thereto contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2011, as filed with the Securities and Exchange Commission (the “SEC”).

 

The accompanying interim financial statements are unaudited; however, the financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) in the United States of America for interim financial information and in conjunction with the rules and regulations of the SEC. Accordingly, they do not include all of the disclosures required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting solely of normal recurring matters) necessary for a fair presentation of the financial statements for these interim periods have been included. Operating results for the three months ended March 31, 2012 are not necessarily indicative of the results that may be expected for the year ending December 31, 2012 or for any other period.

Real Estate and Depreciation

Real estate assets are stated at the lower of cost or fair value, as appropriate, less accumulated depreciation.

Costs related to property acquisition and improvements are capitalized. Typical capital items include new roofs, site improvements, various exterior building improvements and major interior renovations.

Routine replacements and ordinary maintenance and repairs that do not extend the life of the asset are expensed as incurred. Funding for repairs and maintenance items typically is provided by cash flows from operating activities.

Depreciation is computed using the straight-line method over the assets’ estimated useful lives as follows:

 

  Category Years
  Building 39
  Building Improvements 15-39
  Furniture and Fixtures 5-7

 

The Company reviews the Property to determine if the carrying amount will be recovered from future cash flows if certain indicators of impairment are identified at the Property. The evaluation of anticipated cash flows is highly subjective and is based in part on assumptions regarding future occupancy, rental rates and capital requirements that could differ materially from actual results in future periods. When indicators of impairment are present and the sum of the undiscounted future cash flows is less than the carrying value of such asset, an impairment loss is recorded equal to the difference between the asset’s current carrying value and its fair value based on discounting its estimated future cash flows. At March 31, 2012 and December 31, 2011, no impairment charges were recorded.

5
 

FSP 50 South Tenth Street Corp.

Notes to Consolidated Financial Statements

(Unaudited)

 

1.      Organization, Basis of Presentation, Real Estate and Depreciation, Lease Acquisition Costs and Financial Instruments (continued)

 

Lease Acquisition Costs

 

The lease acquisition costs represent incentive payments made in the leasing of commercial space. On February 29, 2012, the Company and Target Corporation (“Target”) entered into a new Office Lease Agreement and in lieu of any tenant improvement allowance, abatement of rent or any other lease concessions, the Company paid Target a tenant incentive payment in the amount of $23,950,000. These costs are capitalized and starting April 1, 2012, these costs will be amortized on a straight-line basis over the term of the lease agreement. Amortization will be shown as a reduction of rental income in the Company’s Consolidated Statements of Operations.

 

Financial Instruments

 

The Company estimates that the carrying value of cash and cash equivalents, cash-held in escrow, and loan payable - affiliate approximate their fair values based on their short-term maturity and prevailing interest rates.

 

2.     Income Taxes

 

The Company has elected to be taxed as a real estate investment trust (“REIT”) under the Internal Revenue Code of 1986, as amended (the "Code"). As a REIT, the Company generally is entitled to a tax deduction for dividends paid to its stockholders, thereby effectively subjecting the distributed net income of the Company to taxation at the shareholder level only. The Company must comply with a variety of restrictions to maintain its status as a REIT. These restrictions include the type of income it can earn, the type of assets it can hold, the number of stockholders it can have and the concentration of their ownership, and the amount of the Company’s income that must be distributed annually.

 

Accrued interest and penalties will be recorded as income tax expense, if the Company records a liability in the future. The Company files income tax returns in the U.S. federal jurisdiction and State of Minnesota jurisdiction. The statute of limitations for the Company’s income tax returns is generally three years and as such, the Company’s returns that remain subject to examination would be primarily from 2008 and thereafter.

 

3.     Loan Payable

 

The Property was subject to a $76,200,000 mortgage loan (the “BofA Loan”) with Bank of America, N.A. The BofA Loan was repaid in full on December 29, 2011. The BofA Loan originally closed on December 21, 2006, had a January 1, 2012 maturity date and was secured by, among other items, a first mortgage lien on the Property. Interest on the BofA Loan was fixed at 5.287% per annum and the Company was obligated to make monthly payments of interest only until the maturity date, at which time the principal amount of the BofA Loan, together with any accrued but unpaid interest, was due and payable in full. Interest expense paid for the three months ended March 31, 2011 was $1,007,000. The BofA Loan was nonrecourse to the Company. The documentation evidencing and securing the BofA Loan contained customary representations and warranties, as well as customary events of default and affirmative and negative covenants. The Company was in compliance with BofA Loan covenants on December 29, 2011, the date that the BofA Loan was repaid in full.

 

4.     Related Party Transactions

 

The Company has in the past engaged in and currently engages in transactions with a related party, Franklin Street, and its subsidiaries FSP Investments LLC and FSP Property Management LLC (collectively “FSP”). The Company expects to continue to have related party transactions with FSP in the form of management fees paid to FSP to manage the Company on behalf of its stockholders. FSP Property Management LLC currently provides the Company with asset management and financial reporting services. The asset management agreement between the Company and FSP Property Management LLC requires the Company to pay FSP Property Management LLC a monthly fee equal to one percent (1%) of the gross revenues of the Property. The asset management agreement between the Company and FSP Property Management LLC may be terminated by either party without cause at any time, upon at least thirty (30) days written notice, effective at the end of the notice period. For the three months ended March 31, 2012 and 2011, management fees paid were $40,000 and $39,000, respectively.

6
 

 

FSP 50 South Tenth Street Corp.

Notes to Consolidated Financial Statements

(Unaudited)

 

4.     Related Party Transactions (continued)

 

On December 29, 2011, the Company executed and delivered a promissory note to Franklin Street that evidences a loan for up to $106,200,000 (the “Bridge Loan”). The Bridge Loan includes a term loan component (the “Term Loan Component”) in the amount of $76,200,000, all of which was funded on December 29, 2011 and used to repay the BofA Loan in full. The Company paid Franklin Street a Term Loan Component fee in the amount of $762,000, on December 29, 2011. The Bridge Loan also includes a revolving line of credit component that shall not at any time exceed $30,000,000 (the “Revolving Line Component”). The proceeds of the Revolving Line Component of the Bridge Loan are to be used for lender-approved tenant improvement costs, leasing commissions and other incentives necessary to lease space at the Property.

 

The Bridge Loan is evidenced by a loan agreement dated December 29, 2011 by and between the Company and Franklin Street. Pursuant to the loan agreement, the Company may borrow, repay and reborrow Revolving Line Component funds in the form of revolving advances from time to time so long as no event of default exists and certain other customary conditions are satisfied, provided; however, that the aggregate principal amount of all revolving advances outstanding at any time shall in no event exceed $30,000,000. On March 4, 2012, the Company requested and Franklin Street funded a revolving advance in the amount of $30,000,000. The Company is required to pay Franklin Street a fee in an amount equal to 1.00% of each revolving advance. As of March 31, 2012, the outstanding principal balance of the Bridge Loan was $106,200,000 and for the three months ended March 31, 2012, the revolving advance fees paid to Franklin Street were $300,000.

 

Costs and fees paid associated with the Bridge Loan, including the $762,000 Term Loan Component fee and $300,000 Revolving Line Component fee paid to Franklin Street, were $1,434,000 and are being amortized on a straight-line basis over the term of the Bridge Loan. Amortization expense of $156,000 is included in interest expense in the Company’s Statement of Operations for the three months ended March 31, 2012.

 

The Company is obligated to pay interest only on the outstanding principal amount of the Term Loan Component and any revolving advances under the Revolving Line Component at the fixed rate of 6.51% per annum. The outstanding principal amount of the Bridge Loan, together with any accrued but unpaid interest, shall be due and payable on December 31, 2013. The Bridge Loan may be prepaid in whole or in part at any time without premium or penalty. Any partial payment shall be in an amount at least equal to $100,000. At the time of any prepayment and upon payment of the unpaid principal balance on the maturity date, the Company shall pay Franklin Street an exit fee in an amount equal to 0.49% of such prepayment or payment of the unpaid principal balance. Interest expense paid for the three months ended March 31, 2012 was $1,400,000.

  

The promissory note and the loan agreement are secured by a combination mortgage, security agreement and fixture filing dated December 29, 2011 from the Company in favor of Franklin Street, an environmental indemnification agreement dated December 29, 2011 from the Company in favor of Franklin Street, and an assignment of leases and rents dated December 29, 2011 from the Company in favor of Franklin Street. The mortgage constitutes a lien against the Property and has been recorded in the land records of Hennepin County, Minnesota. The loan documents evidencing and securing the Bridge Loan contain customary representations and warranties, as well as customary events of default and affirmative and negative covenants. The Company was in compliance with Bridge Loan covenants as of March 31, 2012.

 

Franklin Street is the sole holder of the Company’s one share of Common Stock that is issued and outstanding. Subsequent to the completion of the placement of the Preferred Stock in January 2007, Franklin Street has not been entitled to share in earnings or any dividend related to the Common Stock.

 

5.     Net Income Per Share

 

Basic net income per share is computed by dividing net income by the weighted average number of shares of Preferred Stock outstanding during the period. Diluted net income per share reflects the potential dilution that could occur if securities or other contracts to issue shares were exercised or converted into shares. There were no potential dilutive shares outstanding at March 31, 2012 and 2011.

 

6.     Segment Reporting

 

The Company operates in one industry segment, which is real estate ownership of commercial property. The Company owned and operated the Property for all periods presented.

7
 

FSP 50 South Tenth Street Corp.

Notes to Consolidated Financial Statements

(Unaudited)

 

7.      Cash Distributions

 

The Company’s board of directors declared and paid cash distributions as follows:

 

Quarter Paid  Distributions Per
Preferred Share
   Total
Distributions
 
First quarter of 2012  $-   $- 
           
First quarter of 2011  $1,750   $1,225,000 

 

 

8.     Subsequent Event

 

The Company’s board of directors declared a cash distribution of $715 per preferred share on April 26, 2012 to the holders of record of the Preferred Stock on May 10, 2012, payable on May 30, 2012.

 

8
 

Item 2.   Management’s Discussion and Analysis of Financial Condition and Results of Operations.

 

The following discussion should be read in conjunction with the financial statements and notes thereto appearing elsewhere in this report and in our Annual Report on Form 10-K for the year ended December 31, 2011. Historical results and percentage relationships set forth in the consolidated financial statements, including trends which might appear, should not be taken as necessarily indicative of future operations. The following discussion and other parts of this Quarterly Report on Form 10-Q 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 United States and in the market where we own the Property, disruptions in the debt markets, risks of a lessening of demand for the type of real estate owned by us, the financial performance of Target Corporation (NYSE:TGT), which we refer to as Target, changes in government regulations and regulatory uncertainty, 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. 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 may not update any of the forward-looking statements after the date this Quarterly Report on Form 10-Q is filed to conform them to actual results or to changes in our expectations that occur after such date, other than as required by law.

 

Overview

 

FSP 50 South Tenth Street Corp., which we refer to as the Company, is a Delaware corporation formed to purchase, own and operate a twelve-story multi-tenant office and retail building containing approximately 498,768 square feet of rentable space located in downtown Minneapolis, Minnesota, which we refer to as the Property.

 

Franklin Street Properties Corp., which we refer to as Franklin Street, is the sole holder of our one share of common stock, $.01 par value per share, which we refer to as the Common Stock, that is issued and outstanding. Between November 2006 and January 2007, FSP Investments LLC (member, FINRA and SIPC), a wholly-owned subsidiary of Franklin Street, completed the sale on a best efforts basis of 700 shares of our preferred stock, $.01 par value per share, which we refer to as the Preferred Stock. FSP Investments LLC sold the Preferred Stock in a private placement offering to “accredited investors” within the meaning of Regulation D under the Securities Act of 1933. Since the completion of the placement of the Preferred Stock in January 2007, Franklin Street has not been entitled to share in any earnings or dividend related to the Common Stock.

 

We operate in one business segment, which is real estate operations, and own a single property. Our real estate operations involve real estate rental operations, leasing services and property management services. The main factor that affects our real estate operations is the broad economic market conditions in the United States and, more specifically, the economic conditions in Minneapolis, Minnesota. These market conditions affect the occupancy levels and the rent levels on both a national and local level. We have no influence on national or local market conditions.

 

Trends and Uncertainties

 

Economic Conditions

 

The economy in the United States is continuing to experience a period of limited economic growth, including historically high levels of unemployment, the lingering effect from the failure and near failure of a number of financial institutions and increased credit risk premiums for a number of market participants. Economic conditions may be affected by numerous factors, including but not limited to, inflation and employment levels, energy prices, slow growth and/or recessionary concerns, changes in currency exchange rates, geopolitical events, the regulatory environment and the availability of debt and interest rate fluctuations. Current and future economic factors may negatively affect real estate values, occupancy levels and property income. At this time, we cannot predict the extent or duration of any negative impact current or future economic factors will have on our business.

 

9
 

Real Estate Operations

 

The Property was completed in 2001 and is currently leased to office and retail tenants with staggered lease expirations but, as described below, has a large office component that is effectively leased to Target through March 31, 2030. The Property is located directly across the street from the designated world headquarters of Target and is connected to a corporately-owned two-level Target retail store and sits above an approximately 850-stall, three-level parking garage that is owned and managed by the City of Minneapolis.

 

The Property also has street level retail space and is part of a larger area that we refer to as the Project that covers a full city block in Minneapolis, Minnesota. The Project is comprised of our Property, the Target retail store and the parking garage. The three owners of the Project, the Company, Target and the City of Minneapolis, share expenses and responsibilities for maintenance of the Project under the terms of a Reciprocal Easement and Operation Agreement (REOA), which is administered by Ryan Companies US, Inc., which we refer to as Ryan. The three owners of the Project also share certain common areas and access to four skyway bridges that connect the Project to other buildings, including Target’s world headquarters across the street, and the greater Minneapolis skyway system. Ryan also serves as our property manager and is a tenant of ours at the Property. These common area expenses are typically recovered through tenant leases.

 

The Property primarily has office and retail space, which collectively was approximately 98.8% occupied as of March 31, 2012. There are approximately 449,233 rentable square feet, which we refer to as RSF, of office space, approximately 36,415 RSF of retail space and approximately 13,120 RSF of storage space. Oracle America, Inc., which we refer to as Oracle America, leases approximately 242,107 RSF of office space through March 31, 2014. Oracle America subleases a portion (approximately 215,838 RSF) of its office space to Target and the balance (approximately 26,269 RSF) to another tenant. Ryan leased approximately 86,381 RSF of office space through March 31, 2012. In addition, Target directly leases approximately 43,506 RSF of office space through June 30, 2015.

  

On February 29, 2012, the Company and Target entered into a new Office Lease Agreement, which we refer to as the Target Lease, whereby Target extended and expanded its lease of space at the Property, effectively leasing 100% of the Property’s office space (449,233 RSF) through March 31, 2030 with no early termination rights. The office space that is subject to the Target Lease will become part of the leased premises at different times that are tied to the expiration dates of existing leases at the Property. However, in the event that any office space that is currently leased by an existing tenant becomes available prior to its scheduled expiration date, Target is required to accept delivery of such office space on the earlier of (i) the date three months after the Company provides written notice of the availability of such office space to Target or (ii) the originally scheduled commencement date for such office space. The initial leased premises contain an aggregate of 259,344 RSF, are located on floors 7-11 and a portion of floor 4 and have a commencement date of April 1, 2014. The balance of space contains an aggregate of 189,889 RSF and will become part of the leased premises pursuant to the following put arrangement:

 

Floor: Put Premises
RSF:
Space
Components:
Put Premises
Commencement Dates:
Floor 4 14,506 RSF Suite 440 and 450 April 1, 2012
Floor 3 71,875 RSF Suite 300 April 1, 2012
Floor 5 26,269 RSF Suite 500 April 1, 2014
Floor 5 16,707 RSF Suites 570, 560, 530 and 520 May 1, 2016
Floor 4 17,550 RSF Suites 490, 470 and 460 July 1, 2016
Floor 6 26,911 RSF Suites 680, 660, 620, 600 and 670 January 1, 2017
Floor 6 16,071 RSF Suites 610, 640 and 650 March 1, 2017
Total: 189,889 RSF    

 

Target also has the right to extend the term of the Target Lease beyond March 31, 2030 for a minimum of 225,000 RSF for two consecutive additional periods of five years each at prevailing market rental rates upon delivery of prior written notice and satisfaction of certain other customary conditions.

 

Rent is comprised of base rent and Target’s share of basic operating costs. Base rent increases each year. There is no “free-rent” or reduced rent period. In lieu of any further tenant improvement allowance, abatement of rent or any other lease concessions, the Company was required to pay Target a tenant incentive payment in the amount of $23,950,000. In addition, the Company was required to pay brokerage fees relating to the consummation of the Target Lease in the amount of $6,688,000.

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On February 29, 2012, the Company and Ryan entered into a Lease Termination Agreement, which we refer to as the Lease Termination Agreement, whereby the parties agreed to terminate Ryan’s lease with the Company effective March 31, 2012. Effective April 1, 2012, Target directly leased 100% of Ryan’s former space at the Property pursuant to the above-described put arrangement. Prior to execution of the Lease Termination Agreement, Ryan’s lease at the Property had been scheduled to terminate on July 31, 2015.

 

Management believes that the position of the Property within Minneapolis’ office and retail markets is strong. In order to further improve the Property’s position in Minneapolis’ office and retail markets, throughout 2011, management evaluated the Property’s operations for both greater efficiency and for more active and proactive sustainability practices. The Property is Energy Star® certified and, on November 1, 2010, earned LEED® Gold certification from the U.S. Green Building Council in the Leadership in Energy and Environmental Design for Existing Buildings: Operations and Maintenance.

 

It is difficult for management to predict what will happen to occupancy or rents after the expiration or earlier termination of existing leases at our Property because the need for space and the price tenants are willing to pay are tied to both the local economy and to the larger trends in the national economy, such as job growth, interest rates, the availability of credit and corporate earnings, which in turn are tied to even larger macroeconomic and political factors, such as recessionary concerns, volatility in energy pricing and the risk of terrorism. In addition to the difficulty of predicting macroeconomic factors, it is difficult to predict how our local market or tenants will suffer or benefit from changes in the larger economy. In addition, because the Property is in a single geographical market, these macroeconomic trends may have a different effect on the Property and on its tenants, many of which operate on a national level. Although we cannot predict how long it would take to lease vacant space at the Property or what the terms and conditions of any new leases would be, we would expect to sign new leases at current market rates which may be below the expiring rates.

 

The potential for any of our tenants to default on its lease or to seek the protection of bankruptcy laws exists. If any of our tenants defaults on its lease, we may experience delays in enforcing our rights as a landlord and may incur substantial costs in protecting our investment. In addition, at any time, a tenant may seek the protection of bankruptcy laws, which could result in the rejection and termination of such tenant’s lease and thereby cause a reduction in cash available for distribution to our stockholders. Bankruptcy or a material adverse change in the financial condition of a material tenant would likely have a material adverse effect on our results of operations.

 

Bridge Loan

 

On December 29, 2011, we executed and delivered a promissory note to Franklin Street that evidences a loan for up to $106,200,000, which we refer to as the Bridge Loan. The Bridge Loan includes a term loan component, which we refer to as the Term Loan Component, in the amount of $76,200,000, all of which was funded on December 29, 2011 and used to repay our loan in the same amount from Bank of America, N.A. in full. We paid Franklin Street a Term Loan Component fee in the amount of $762,000, on December 29, 2011. The Bridge Loan also includes a revolving line of credit component that shall not at any time exceed $30,000,000, which we refer to as the Revolving Line Component. The proceeds of the Revolving Line Component of the Bridge Loan are to be used for lender-approved tenant improvement costs, leasing commissions and other incentives necessary to lease space at the Property.

 

The Bridge Loan is evidenced by a loan agreement dated December 29, 2011 by and between the Company and Franklin Street. Pursuant to the loan agreement, we may borrow, repay and reborrow Revolving Line Component funds in the form of revolving advances from time to time so long as no event of default exists and certain other customary conditions are satisfied, provided; however, that the aggregate principal amount of all revolving advances outstanding at any time shall in no event exceed $30,000,000. On March 4, 2012, we requested and Franklin Street funded a revolving advance in the amount of $30,000,000. We are required to pay Franklin Street a fee in an amount equal to 1.00% of each revolving advance. As of March 31, 2012, the outstanding principal balance of the Bridge Loan was $106,200,000 and for the three months ended March 31, 2012, the revolving advance fees paid to Franklin Street were $300,000.

 

Costs and fees paid associated with the Bridge Loan, including the $762,000 Term Loan Component fee and $300,000 Revolving Line Component fee paid to Franklin Street, were $1,434,000 and are being amortized on a straight-line basis over the term of the Bridge Loan. Amortization expense of $156,000 is included in interest expense in the Company’s Statement of Operations for the three months ended March 31, 2012.

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We are obligated to pay interest only on the outstanding principal amount of the Term Loan Component and any revolving advances under the Revolving Line Component at the fixed rate of 6.51% per annum. The outstanding principal amount of the Bridge Loan, together with any accrued but unpaid interest, shall be due and payable on December 31, 2013. The Bridge Loan may be prepaid in whole or in part at any time without premium or penalty. Any partial payment shall be in an amount at least equal to $100,000. At the time of any prepayment and upon payment of the unpaid principal balance on the maturity date, the Company will be required to pay Franklin Street an exit fee in an amount equal to 0.49% of such prepayment or payment of the unpaid principal balance. Interest expense paid for the three months ended March 31, 2012 was $1,400,000.

  

The promissory note and the loan agreement are secured by a combination mortgage, security agreement and fixture filing dated December 29, 2011 from the Company in favor of Franklin Street, an environmental indemnification agreement dated December 29, 2011 from the Company in favor of Franklin Street, and an assignment of leases and rents dated December 29, 2011 from the Company in favor of Franklin Street. The mortgage constitutes a lien against the Property and has been recorded in the land records of Hennepin County, Minnesota. The loan documents evidencing and securing the Bridge Loan contain customary representations and warranties, as well as customary events of default and affirmative and negative covenants. We were in compliance with Bridge Loan covenants as of March 31, 2012.

 

Revolving Line of Credit

 

While a line of credit is not expected to be needed, we may, without the consent of any holder of shares of our Preferred Stock, obtain a revolving line of credit of up to $46,200,000 on commercially reasonable terms to be used for capital improvements, operating expenses, working capital requirements or to refinance the Company’s debt and fund other Company purposes, if needed. As of April 30, 2012, we had neither sought nor obtained a revolving line of credit.

 

Possible Future Capital Transaction

 

Except for a possible permanent refinancing of the Bridge Loan, which matures on December 31, 2013, we do not intend to borrow any money but have the right to obtain the revolving line of credit described above. There can be no assurance that the Company will be able to sell or refinance the Property upon the maturity of the Bridge Loan or that the proceeds received from such sale or refinancing, or cash raised from the issuance of up to an additional 840 shares of Preferred Stock or the use of our revolving line of credit will be sufficient to repay the Bridge Loan at that time. In light of the Target Lease, we believe that our financial options could be numerous and intend to explore and consider permanent mortgage refinancing of the Bridge Loan and/or a possible sale of the Property. Of course, any sale of the Property would be subject to a number of conditions, including approval by our directors and a majority of the holders of Preferred Stock.

 

Critical Accounting Policies

 

We have certain critical accounting policies that are subject to judgments and estimates by our management and uncertainties of outcome that affect the application of these policies. We base our estimates on historical experience and on various other assumptions we believe to be reasonable under the circumstances. On an on-going basis, we evaluate our estimates. In the event estimates or assumptions prove to be different from actual results, adjustments are made in subsequent periods to reflect more current information. The accounting policies that we believe are most critical to the understanding of our financial position and results of operations, and that require significant management estimates and judgments, are discussed in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2011.

 

Critical accounting policies are those that have the most impact on the reporting of our financial condition and results of operations and those requiring significant judgments and estimates. We believe that our judgments and assessments are consistently applied and produce financial information that fairly presents our results of operations.

 

No changes to our critical accounting policies have occurred since the filing of our Annual Report on Form 10-K for the year ended December 31, 2011.

 

Results of Operations

 

Comparison of the three months ended March 31, 2012 to the three months ended March 31, 2011.

 

Revenue

 

Total revenue decreased by $0.2 million to $3.7 million for the three months ended March 31, 2012, as compared to $3.9 million for the three months ended March 31, 2011. This decrease was primarily attributable to the written-off acquired favorable real estate leases due to lease termination.

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Expenses

 

Total expenses increased by $1.0 million to $4.6 million for the three months ended March 31, 2012, as compared to $3.6 million for the three months ended March 31, 2011. This increase was primarily attributable to an increase in depreciation and amortization of $0.4 million and an increase in interest expense of $0.6 million.

 

Liquidity and Capital Resources

 

Cash and cash equivalents were approximately $10.1 million and $9.5 million at March 31, 2012 and December 31, 2011, respectively. The $0.6 million increase for the three months ended March 31, 2012 was primarily attributable to $29.6 million provided by financing activities and was partially offset by $29.0 million used by operating activities.

 

As of March 31, 2012, the Bridge Loan was outstanding in the principal amount of $106.2 million.

 

Management believes that existing cash and cash equivalents as of March 31, 2012 of $10.1 million and cash anticipated to be generated internally by operations will be sufficient to meet working capital requirements, distributions and anticipated capital expenditures for at least the next 12 months.

 

Operating Activities

 

The cash used for operating activities of $29 million for the three months ended March 31, 2012 was primarily attributable to net loss of approximately $0.8 million, payment of deferred leasing costs of $6.8 million, and tenant incentive payment of $24 million, which was partially offset by the add back of $1.6 million of depreciation and amortization and a decrease in prepaid expenses and other assets of $0.1 million and an increase in accounts payable and accrued liabilities of $0.9 million.

 

Investing Activities

 

Cash used for investing activities of approximately $42,000 for the three months ended March 31, 2012 was for capital expenditures.

 

Financing Activities

 

The cash provided by financing activities of $29.6 million for the three months ended March 31, 2012 was attributable to the $30 million proceeds from the March 4, 2012 revolving advance under the loan payable-affiliate, which was partially offset by the $0.4 million payments of deferred financing costs.

 

Sources and Uses of Funds

 

Our principal demands on liquidity are cash for operations, interest on debt payments and distributions to equity holders. As of March 31, 2012, we had approximately $2.4 million in accrued liabilities, and $106.2 million in long-term debt. In the near term, liquidity is generated by cash from operations.

 

Secured Debt

 

The Property was subject to a $76,200,000 mortgage loan, which we refer to as the BofA Loan, with Bank of America, N.A. The BofA Loan was repaid in full on December 29, 2011. The BofA Loan originally closed on December 21, 2006, had a January 1, 2012 maturity date and was secured by, among other items, a first mortgage lien on the Property. Interest on the BofA Loan was fixed at 5.287% per annum and the Company was obligated to make monthly payments of interest only until the maturity date, at which time the principal amount of the BofA Loan, together with any accrued but unpaid interest, was due and payable in full. Interest expense paid for the three months ended March 31, 2011 was $1,007,000. The BofA Loan was nonrecourse to the Company. The documentation evidencing and securing the BofA Loan contained customary representations and warranties, as well as customary events of default and affirmative and negative covenants. We were in compliance with BofA Loan covenants on December 29, 2011, the date that the BofA Loan was repaid in full.

 

On December 29, 2011, we executed and delivered a promissory note to Franklin Street that evidences a loan for up to $106,200,000, which we refer to as the Bridge Loan. The Bridge Loan includes a term loan component, which we refer to as the Term Loan Component, in the amount of $76,200,000, all of which was funded on December 29, 2011 and used to repay the BofA Loan in full. The Company paid Franklin Street a Term Loan Component fee in the amount of $762,000, on December 29, 2011. The Bridge Loan also includes a revolving line of credit component that shall not at any time exceed $30,000,000, which we refer to as the Revolving Line Component. The proceeds of the Revolving Line Component of the Bridge Loan are to be used for lender-approved tenant improvement costs, leasing commissions and other incentives necessary to lease space at the Property.

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The Bridge Loan is evidenced by a loan agreement dated December 29, 2011 by and between us and Franklin Street. Pursuant to the loan agreement, we may borrow, repay and reborrow Revolving Line Component funds in the form of revolving advances from time to time so long as no event of default exists and certain other customary conditions are satisfied, provided; however, that the aggregate principal amount of all revolving advances outstanding at any time shall in no event exceed $30,000,000. On March 4, 2012, we requested and Franklin Street funded a revolving advance in the amount of $30,000,000. We are required to pay Franklin Street a fee in an amount equal to 1.00% of each revolving advance. As of March 31, 2012, the outstanding principal balance of the Bridge Loan was $106,200,000 and for the three months ended March 31, 2012, revolving advance fees paid to Franklin Street were $300,000.

 

Costs and fees paid associated with the Bridge Loan, including the $762,000 Term Loan Component fee and $300,000 Revolving Line Component fee paid to Franklin Street, were $1,434,000 and are being amortized on a straight-line basis over the term of the Bridge Loan. Amortization expense of $156,000 is included in interest expense in the Company’s Statement of Operations for the three months ended March 31, 2012.

 

We are obligated to pay interest only on the outstanding principal amount of the Term Loan Component and any revolving advances under the Revolving Line Component at the fixed rate of 6.51% per annum. The outstanding principal amount of the Bridge Loan, together with any accrued but unpaid interest, shall be due and payable on December 31, 2013. The Bridge Loan may be prepaid in whole or in part at any time without premium or penalty. Any partial payment shall be in an amount at least equal to $100,000. At the time of any prepayment and upon payment of the unpaid principal balance on the maturity date, the Company shall pay Franklin Street an exit fee in an amount equal to 0.49% of such prepayment or payment of the unpaid principal balance. Interest expense paid for the three months ended March 31, 2012 was $1,400,000.

  

The promissory note and the loan agreement are secured by a combination mortgage, security agreement and fixture filing dated December 29, 2011 from us in favor of Franklin Street, an environmental indemnification agreement dated December 29, 2011 from us in favor of Franklin Street, and an assignment of leases and rents dated December 29, 2011 from us in favor of Franklin Street. The mortgage constitutes a lien against the Property and has been recorded in the land records of Hennepin County, Minnesota. The loan documents evidencing and securing the Bridge Loan contain customary representations and warranties, as well as customary events of default and affirmative and negative covenants. We were in compliance with Bridge Loan covenants as of March 31, 2012.

 

Contingencies

 

We may be subject to various legal proceedings and claims that arise in the ordinary course of our business. Although occasional adverse decisions or settlements may occur, we believe that the final disposition of such matters will not have a material adverse effect on our financial position or results of operations.

 

Related Party Transactions

 

We have in the past engaged in and currently engage in transactions with a related party, Franklin Street Properties Corp., which we refer to as Franklin Street, and its subsidiaries FSP Investments LLC and FSP Property Management LLC, which we collectively refer to as FSP. We expect to continue to have related party transactions with FSP in the form of management fees paid to FSP to manage the Company on behalf of our stockholders. FSP Property Management LLC currently provides the Company with asset management and financial reporting services. The asset management agreement between the Company and FSP Property Management LLC requires the Company to pay FSP Property Management LLC a monthly fee equal to one percent (1%) of the gross revenues of the Property. The asset management agreement between the Company and FSP Property Management LLC may be terminated by either party without cause at any time, upon at least thirty (30) days written notice, effective at the end of the notice period. For the three months ended March 31, 2012 and 2011, management fees paid were $40,000 and $39,000, respectively.

 

On December 29, 2011, we executed and delivered a promissory note to Franklin Street that evidences a loan for up to $106,200,000, which we refer to as the Bridge Loan. The Bridge Loan includes a term loan component, which we refer to as the Term Loan Component, in the amount of $76,200,000, all of which was funded on December 29, 2011 and used to repay the BofA Loan in full. The Company paid Franklin Street a Term Loan Component fee in the amount of $762,000, on December 29, 2011. The Bridge Loan also includes a revolving line of credit component that shall not at any time exceed $30,000,000, which we refer to as the Revolving Line Component. The proceeds of the Revolving Line Component of the Bridge Loan are to be used for lender-approved tenant improvement costs, leasing commissions and other incentives necessary to lease space at the Property.

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The Bridge Loan is evidenced by a loan agreement dated December 29, 2011 by and between us and Franklin Street. Pursuant to the loan agreement, we may borrow, repay and reborrow Revolving Line Component funds in the form of revolving advances from time to time so long as no event of default exists and certain other customary conditions are satisfied, provided; however, that the aggregate principal amount of all revolving advances outstanding at any time shall in no event exceed $30,000,000. On March 4, 2012, we requested and Franklin Street funded a revolving advance in the amount of $30,000,000. We are required to pay Franklin Street a fee in an amount equal to 1.00% of each revolving advance. As of March 31, 2012, the outstanding principal balance of the Bridge Loan was $106,200,000 and for the three months ended March 31, 2012, revolving advance fees paid to Franklin Street were $300,000.

 

Costs and fees paid associated with the Bridge Loan, including the $762,000 Term Loan Component fee and $300,000 Revolving Line Component fee paid to Franklin Street, were $1,434,000 and are being amortized on a straight-line basis over the term of the Bridge Loan. Amortization expense of $156,000 is included in interest expense in the Company’s Statement of Operations for the three months ended March 31, 2012.

 

We are obligated to pay interest only on the outstanding principal amount of the Term Loan Component and any revolving advances under the Revolving Line Component at the fixed rate of 6.51% per annum. The outstanding principal amount of the Bridge Loan, together with any accrued but unpaid interest, shall be due and payable on December 31, 2013. The Bridge Loan may be prepaid in whole or in part at any time without premium or penalty. Any partial payment shall be in an amount at least equal to $100,000. At the time of any prepayment and upon payment of the unpaid principal balance on the maturity date, the Company shall pay Franklin Street an exit fee in an amount equal to 0.49% of such prepayment or payment of the unpaid principal balance. Interest expense paid for the three months ended March 31, 2012 was $1,400,000.

  

The promissory note and the loan agreement are secured by a combination mortgage, security agreement and fixture filing dated December 29, 2011 from us in favor of Franklin Street, an environmental indemnification agreement dated December 29, 2011 from us in favor of Franklin Street, and an assignment of leases and rents dated December 29, 2011 from us in favor of Franklin Street. The mortgage constitutes a lien against the Property and has been recorded in the land records of Hennepin County, Minnesota. The loan documents evidencing and securing the Bridge Loan contain customary representations and warranties, as well as customary events of default and affirmative and negative covenants. We were in compliance with Bridge Loan covenants as of March 31, 2012.

 

Franklin Street is the sole holder of our one share of Common Stock that is issued and outstanding. Subsequent to the completion of the placement of our Preferred Stock in January 2007, Franklin Street has not been entitled to share in our earnings or any dividend related to our Common Stock.

15
 

 

Item 3.  Quantitative and Qualitative Disclosures About Market Risk.

 

Not Applicable.

  

Item 4.  Controls and Procedures.

 

Disclosure Controls and Procedures

Our management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2012. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 or the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of March 31, 2012 our principal executive officer and principal financial officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

 

Changes in Internal Control Over Financial Reporting

 

No change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the quarter ended March 31, 2012 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

 

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PART II – OTHER INFORMATION

 

Item 1.  Legal Proceedings.

 

From time to time, we may be subject to legal proceedings and claims that arise in the ordinary course of our business. Although occasional adverse decisions (or settlements) may occur, we believe that the final disposition of such matters will not have a material adverse effect on our financial position, cash flows or results of operations.

 

Item 1A.  Risk Factors.

 

Not applicable.

 

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds.

 

None.

 

Item 3.  Defaults Upon Senior Securities.

 

None.

 

Item 4.  Mine Safety Disclosures.

 

Not applicable.

 

Item 5.  Other Information.

 

None.

 

Item 6.  Exhibits.

 

See Exhibit Index attached hereto, which is incorporated herein by reference.

 

17
 

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, thereunto duly authorized.

 

 

 

  FSP 50 SOUTH TENTH STREET CORP.
     
     
     
Date Signature Title
     

Date: May 11, 2012

 

 

/s/ George J. Carter

George J. Carter

 

President

(Principal Executive Officer)

     

Date: May 11, 2012

 

 

/s/ Barbara J. Fournier

Barbara J. Fournier

 

Chief Operating Officer

(Principal Financial Officer)

 

 

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EXHIBIT INDEX

 

Exhibit No. Description
   
31.1* Certification of FSP 50 South Tenth Street Corp.'s principal executive officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
   
31.2* Certification of FSP 50 South Tenth Street Corp.'s principal financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
   
32.1* Certification of FSP 50 South Tenth Street Corp.'s principal executive officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
   
32.2* Certification of FSP 50 South Tenth Street Corp.'s principal financial officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
   
101** The following materials from FSP 50 South Tenth Street Corp.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2012, formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets; (ii) the Consolidated Statements of Operations; (iii) the Consolidated Statements of Cash Flows; and (iv) the Notes to Consolidated Financial Statements, tagged as blocks of text.
   
* Filed herewith.
   
** XBRL (eXtensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these Sections.

 

 

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