Exhibit 99.2

 

 

Supplemental Operating and Financial Data Third Quarter 2012

 

 

 

Franklin Street Properties Corp. ● 401 Edgewater Place ● Wakefield, MA 01880 ● (781) 557-1300

 

www.franklinstreetproperties.com

 

 

	Page			Page
Company Overview	3-5		Tenant Analysis
			20 Largest Tenants with Annualized Rent and Remaining Term	17
Key Financial Data			20 Largest Tenants, Industry Profile	18
Financial Highlights	6		Lease Expirations by Square Feet	19
Income Statements	7		Lease Expirations with Annualized Rent per Square Foot	20
Balance Sheets	8		Percentage of Leased Space by Property	21
Cash Flow Statements	9
Property Net Operating Income (NOI)	10		Transactional Drivers
Capital Analysis	11		Capital Recycling	22
Portfolio Overview			FFO Reconciliation	23
Property by Form of FSP Participation	12		FFO Definition	24
Regional Analysis and Map	13		FAD Reconciliation and Definition	25
Owned Property List	14		EBITDA Reconciliation and Definition	26
Properties with GAAP Rent per Square Foot	15		NOI Reconciliation and Definition	27
Capital Expenditures	16

 

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, 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.

 

 

Overview

Franklin Street Properties Corp. (“FSP”, “we”, “our” or the “Company”) (NYSE MKT: FSP) is an investment firm focused on achieving current income and long-term growth through investments in commercial properties. FSP’s portfolio of real estate assets consists primarily of suburban office buildings and includes select investments in central business district (CBD) properties. FSP’s real estate operations include property acquisitions and dispositions, short-term financing, leasing, development and asset management. FSP’s subsidiary, FSP Investments LLC (member, FINRA and SIPC), is a real estate investment banking firm and registered broker/dealer that previously sponsored the organization of single-purpose entities that own real estate and the private placement of equity in those entities, which we refer to as “Sponsored REITs”.

 

Our Business

As of September 30, 2012, the Company owned and operated a portfolio of real estate consisting of 37 properties (including one held for sale), managed 16 Sponsored REITs and held eight 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.

 

Strategy

FSP’s investment strategy is to make direct investments in real estate assets. Our primary type of real estate asset is suburban office properties. The Company believes that real estate, in general, and suburban office real estate, in particular, is a cyclical asset class, and FSP tries to minimize the risk of investing in that cyclical asset class by maintaining a low to moderate level of debt at the corporate level and historically has not had secured debt at the property level. FSP believes that matching a low to moderate leverage ratio with investments in the cyclical suburban office asset class will allow it to take advantage of disposition opportunities during peaks in the cycles and protect its investments from foreclosure or refinancing risk during the lows of the cycles. In addition to maintaining modest leverage, FSP believes that it can lower investment risk while enhancing current income and long-term appreciation potential through geographical diversification by owning a portfolio of properties in varied markets that have sound long-term economic growth potential.

 

Snapshot
(as of September 30, 2012)
Corporate Headquarters	Wakefield, MA
Fiscal Year-End	31-Dec
Total Properties	37
Total Square Feet	7.4 Million
Common Shares Outstanding	82,937,405
Quarterly Dividend	$0.19
Dividend Yield	6.9%
Total Market Capitalization	$1.4 Billion
Insider Holdings	12.1%

 

 

 

FSP selects acquisitions based on market and/or property specific criteria, and actively manages the properties to maximize current income and long term appreciation in value. Attempting to invest more heavily in property near the perceived bottom of market cycles and likewise disposing of properties near the perceived top of the market cycles is a natural consequence of our flexible lower leverage model. Proceeds from property sales are redeployed into other specific real estate assets, used for other corporate purposes and/or paid out to shareholders as special dividends.

 

Structure of the Company

FSP has elected to be taxed as a real estate investment trust (REIT) under the Internal Revenue Code. To qualify as a REIT, we must meet a number of organizational and operational requirements, including a requirement to distribute at least 90% of our adjusted taxable income to our shareholders. Management intends to continue to adhere to these requirements and to maintain our REIT status. As a REIT we are entitled to a tax deduction for some or all of the dividends we pay to shareholders. Accordingly, we generally will not be subject to federal income taxes as long as we distribute an amount equal to or in excess of our taxable income to shareholders.

 

Dividend Philosophy

FSP has been able to offer shareholders high-quality, risk-adjusted returns. The ongoing and recurring rental revenue stream provides stability to our regular quarterly dividend. In addition, the possibility exists for the payment of annual special dividends resulting from the sale of properties in the portfolio.

 

Board of Directors and Management
George J. Carter		Dennis J. McGillicuddy		Scott H. Carter
President, Chief Executive Officer		Director, Member, Audit Committee  and		Executive Vice President, General
Chairman of the Board		Member, Compensation Committee		Counsel and Assistant Secretary
Barbara J. Fournier		Georgia Murray		Jeffrey B. Carter
Executive Vice President,  Chief Operating Officer,		Director, Chair, Compensation Committee and		Executive Vice President and
Treasurer, Secretary and Director		Member, Audit Committee		Chief Investment Officer
Janet Notopoulos		Barry Silverstein		John G. Demeritt
Executive Vice President and Director		Director, Member, Audit Committee  and		Executive Vice President and
		Member, Compensation Committee		Chief Financial Officer
John N. Burke
Director, Chair, Audit Committee and
Member, Compensation Committee

 

 

Corporate Headquarters		Trading Symbol		Inquiries
401 Edgewater Place, Suite 200		NYSE MKT		Inquires should be directed to:
Wakefield, MA 01880		Symbol: FSP		John Demeritt, CFO
(t) 781-557-1300				877-686-9496 or InvestorRelations@
(f) 781-246-2807				franklinstreetproperties.com
www.franklinstreetproperties.com

 

Common Stock Data (NYSE MKT: FSP)
	For the Three Months Ended
	30-Sep-12	30-Jun-12	31-Mar-12	31-Dec-11	30-Sep-11	30-Jun-11	31-Mar-11	31-Dec-10
High Price	$          12.34	$          10.84	$          11.14	$          13.08	$          13.91	$          14.25	$          15.63	$      14.42
Low Price	$            9.98	$            9.57	$            9.43	$            9.90	$          10.49	$          12.00	$          13.52	$      12.20
Closing Price, at the end of the quarter	$          11.07	$          10.58	$          10.60	$            9.95	$          11.31	$          12.91	$          14.07	$      14.25
Dividends paid per share – quarterly	0.19	0.19	0.19	0.19	0.19	0.19	0.19	0.19
Closing dividend yield – annualized	6.9%	7.2%	7.2%	7.64%	6.72%	5.89%	5.40%	5.33%
Common shares outstanding (millions)	82.94	82.94	82.94	82.94	82.94	81.44	81.44	81.44

 

 

Quarterly and Annual results are expected to be announced during the week ending on these dates:

 

First Quarter:	3-May-13		Third Quarter:	1-Nov-13
Second Quarter:	2-Aug-13		Fourth Quarter:	1-Mar-13

 

																														For the
		For the Three Months Ended												For the Three Months Ended																Year Ended
		31-Mar-12				30-Jun-12				30-Sep-12				31-Mar-11				30-Jun-11				30-Sep-11				31-Dec-11				31-Dec-11
Income Items:
Revenue:
Rental		$	36,303			$	35,571			$	38,251			$	30,766			$	33,330			$	33,398			$	36,744			$	134,238
Related party revenue			2,616				3,045				3,485				808				1,150				1,037				1,051				4,046
Other			34				39				39				6				7				7				29				49
Total revenue			38,953				38,655				41,775				31,580				34,487				34,442				37,824				138,333
Total expenses			33,218				33,374				36,303				27,662				30,568				31,095				33,067				122,392
Income before interest income, equity in earnings in non-consolidated REITs and taxes			5,735				5,281				5,472				3,918				3,919				3,347				4,757				15,941
Interest income			8				4				5				11				5				3				3				22
Equity in earnings in non-consolidated REITs			391				494				176				968				1,166				573				978				3,685
Income before taxes			6,134				5,779				5,653				4,897				5,090				3,923				5,738				19,648
Income tax expense			79				77				80				50				68				67				82				267
Income from continuing operations			6,055				5,702				5,573				4,847				5,022				3,856				5,656				19,381
Income from discontinued operations			(317	)			(268	)			(271	)			327				3,013				(542	)			(594	)			2,204
Gain on sale of properties and provision for loss on property held for sale of $14,300 less applicable income tax			—				—				(14,300	)			19,593				2,346				—				—				21,939
Net income		$	5,738			$	5,434			$	(8,998	)		$	24,767			$	10,381			$	3,314			$	5,062			$	43,524
FFO*		$	19,571			$	19,042			$	19,913			$	16,250			$	20,140			$	16,362			$	18,457			$	71,209
Per Share Data:
EPS		$	0.07			$	0.07			$	(0.11	)		$	0.30			$	0.13			$	0.04			$	0.06			$	0.53
FFO*			0.24				0.23				0.24				0.20				0.25				0.20				0.22				0.87
Weighted Average Shares (diluted)			82,937				82,937				82,937				81,437				81,437				81,600				82,937				81,857
Balance Sheet Items:
Real estate, net		$	987,003			$	982,685			$	1,015,984			$	965,011			$	961,118			$	982,143			$	991,225			$	991,225
Other assets, net			451,525				447,678				379,950				401,891				342,646				363,641				417,436				417,436
Total assets, net			1,438,528				1,430,363				1,395,934				1,366,902				1,303,764				1,345,784				1,408,661				1,408,661
Total liabilities, net			527,181				529,340				521,338				435,801				377,374				413,784				487,294				487,294
Shareholders' equity			911,347				901,023				874,596				931,101				926,390				932,000				921,367				921,367

 

* See page 23 for a reconciliation of Net Income to FFO and page 24 for a definition of FFO

 

 

																														For the
		For the Three Months Ended												For the Three Months Ended																Year Ended
		31-Mar-12				30-Jun-12				30-Sep-12				31-Mar-11				30-Jun-11				30-Sep-11				31-Dec-11				31-Dec-11
Revenue:
Rental		$	36,303			$	35,571			$	38,251			$	30,766			$	33,330			$	33,398			$	36,744			$	134,238
Related party revenue:
Management fees and interest income from loans			2,616				3,045				3,485				808				1,150				1,037				1,051				4,046
Other			34				39				39				6				7				7				29				49
Total revenue			38,953				38,655				41,775				31,580				34,487				34,442				37,824				138,333
Expenses:
Real estate operating expenses			8,697				8,604				9,639				8,341				8,360				8,889				9,486				35,076
Real estate taxes and insurance			5,696				5,493				5,764				4,655				5,152				4,950				5,357				20,114
Depreciation and amortization			13,071				13,004				13,572				10,613				11,875				12,183				12,951				47,622
Selling, general and administrative			2,077				2,236				3,141				1,645				1,602				1,654				2,012				6,913
Interest			3,677				4,037				4,187				2,408				3,578				3,419				3,261				12,666
Total expenses			33,218				33,374				36,303				27,662				30,567				31,095				33,067				122,391
Income before interest income, equity in earnings of non-consolidated REITs and taxes			5,735				5,281				5,472				3,918				3,920				3,347				4,757				15,942
Interest income			8				4				5				11				5				3				3				22
Equity in earnings of non-consolidated REITs			391				494				176				968				1,166				573				978				3,685
Income before taxes on income			6,134				5,779				5,653				4,897				5,091				3,923				5,738				19,649
Income tax expense			79				77				80				50				68				67				82				267
Income from continuing operations			6,055				5,702				5,573				4,847				5,023				3,856				5,656				19,382
Income from discontinued operations			(317	)			(268	)			(271	)			327				3,012				(542	)			(594	)			2,203
Gain on sale of properties and provision for loss on property held for sale of $14,300 less applicable income tax			—				—				(14,300	)			19,593				2,346				—				—				21,939
Net income		$	5,738			$	5,434			$	(8,998	)		$	24,767			$	10,381			$	3,314			$	5,062			$	43,524
Weighted average number of shares outstanding, basic and diluted			82,937				82,937				82,937				81,437				81,437				81,600				82,937				81,857
Earnings per share, basic and diluted, attributable to:
Continuing operations		$	0.07			$	0.07			$	0.07			$	0.06			$	0.06			$	0.05			$	0.07			$	0.24
Discontinued operations			—				—				—				—				0.04				(0.01	)			(0.01	)			0.02
Gain on sale of properties and provision for loss on property held for sale of $14,300 less applicable income tax			—				—				(0.18	)			0.24				0.03				—				—				0.27
Net income per share, basic and diluted		$	0.07			$	0.07			$	(0.11	)		$	0.30			$	0.13			$	0.04			$	0.06			$	0.53

 

 

		March 31,				June 30,				September 30,				March 31,				June 30,				September 30,				December 31,
		2012				2012				2012				2011				2011				2011				2011
Assets:
Real estate assets:
Land		$	132,393			$	132,393			$	135,845			$	124,723			$	124,723			$	129,634			$	132,393
Buildings and improvements			1,009,706				1,013,122				1,051,111				965,541				968,888				992,632				1,006,267
Fixtures and equipment			860				871				904				575				701				736				831
			1,142,959				1,146,386				1,187,860				1,090,839				1,094,312				1,123,002				1,139,491
Less accumulated depreciation			155,956				163,701				171,876				125,828				133,194				140,859				148,266
Real estate assets, net			987,003				982,685				1,015,984				965,011				961,118				982,143				991,225
Acquired real estate leases, net			87,073				82,769				92,717				85,290				81,455				91,585				91,613
Investment in non-consolidated REITs			87,061				86,658				85,927				88,652				88,654				88,225				87,598
Assets held for syndication, net			—				—				—				47,630				11,206				4,720				—
Assets held for sale			15,215				15,032				685				19,984				15,324				15,411				15,355
Cash and cash equivalents			29,283				22,620				23,962				49,488				28,881				44,047				23,813
Restricted cash			511				533				546				440				459				477				493
Tenant rent receivables, net			1,090				1,403				1,182				1,688				1,846				1,418				1,460
Straight-line rent receivable, net			31,861				33,048				34,190				20,838				23,741				26,058				28,502
Prepaid expenses			1,164				2,605				2,336				1,400				1,255				2,553				1,223
Related party mortgage loan receivable			172,286				177,536				108,236				60,116				61,916				61,916				140,516
Other assets			4,006				3,640				8,467				6,339				6,237				5,219				4,538
Deferred leasing commissions, net			21,975				21,834				21,702				20,026				21,672				22,012				22,325
Total assets		$	1,438,528			$	1,430,363			$	1,395,934			$	1,366,902			$	1,303,764			$	1,345,784			$	1,408,661
Liabilities and Stockholders’ Equity:
Liabilities:
Bank note payable		$	494,000			$	494,000			$	82,000			$	404,000			$	345,000			$	375,000			$	449,000
Term loan payable			—				—				400,000				—				—				—				—
Accounts payable and accrued expenses			23,311				25,408				26,462				20,562				21,431				28,258				26,446
Accrued compensation			446				944				2,194				603				1,070				1,383				2,222
Tenant security deposits			2,181				2,113				2,281				2,533				2,476				2,453				2,008
Other liabilities: derivative termination value			—				—				1,671				828				447				63				—
Acquired unfavorable real estate leases, net			7,243				6,875				6,730				7,275				6,950				6,627				7,618
Total liabilities			527,181				529,340				521,338				435,801				377,374				413,784				487,294
Commitments and contingencies
Stockholders’ Equity:
Preferred stock			—				—				—				—				—				—				—
Common stock			8				8				8				8				8				8				8
Additional paid-in capital			1,042,876				1,042,876				1,042,287				1,025,491				1,025,491				1,042,876				1,042,876
Accumulated other comprehensive loss			—				—				(1,671	)			(828	)			(447	)			(63	)			—
Accumulated distributions in excess of accumulated earnings			(131,537	)			(141,861	)			(166,617	)			(93,570	)			(98,662	)			(110,821	)			(121,517	)
Total stockholders’ equity			911,347				901,023				874,007				931,101				926,390				932,000				921,367
Total liabilities and stockholders’ equity		$	1,438,528			$	1,430,363			$	1,395,345			$	1,366,902			$	1,303,764			$	1,345,784			$	1,408,661

 

 

		Nine Months Ended September 30,								Twelve Months Ended December 31
		2012				2011				2011				2010				2009
Cash flows from operating activities:
Net income		$	2,174			$	38,462			$	43,524			$	22,093			$	27,872
Adjustments to reconcile net income to net cash provided by operating activities:
(Gain) on sale of properties and provision for asset held for sale			14,300				(21,939	)			(21,939	)			—				(424	)
Depreciation and amortization expense			41,846				36,563				50,261				39,627				36,561
Amortization of above market lease			56				(119	)			(47	)			1,362				3,359
Equity in earnings (losses) from non-consolidated REITs			(1,061	)			(2,805	)			(3,086	)			(1,183	)			(2,012	)
Distributions from non-consolidated REITs			1,246				3,034				3,474				1,633				2,283
Increase in bad debt reserve			105				(365	)			(365	)			980				111
Changes in operating assets and liabilities:
Restricted cash			(53	)			(57	)			(73	)			(86	)			2
Tenant rent receivables			173				869				827				(1,120	)			(564	)
Straight-line rents			(3,498	)			(7,404	)			(9,878	)			(4,249	)			(1,879	)
Lease Acquisition Costs			(2,235	)			(55	)			(153	)			(4,246	)			(59	)
Prepaid expenses and other assets			(1,278	)			171				1,611				865				907
Accounts payable and accrued expenses			(25	)			4,131				4,213				(351	)			2,760
Accrued compensation			(28	)			(420	)			419				387				(238	)
Tenant security deposits			273				523				78				122				(66	)
Payment of deferred leasing commissions			(2,425	)			(6,710	)			(8,058	)			(10,515	)			(2,659	)
Net cash provided by operating activities			49,570				43,879				60,808				45,319				65,954
Cash flows from investing activities:
Purchase of real estate assets, office computers and furniture, capitalized merger costs and acquired real estate leases			(63,585	)			(214,275	)			(236,097	)			(50,098	)			(132,264	)
Investment in non-consolidated REITs			(1	)			(10	)			(10	)			(11	)			(13,218	)
Distributions in excess of earnings from non-consolidated REITs			1,487				1,052				1,582				3,537				3,345
Investment in related party mortgage loan receivable			(73,920	)			(4,232	)			(82,832	)			(21,149	)			(35,410	)
Repayment of related party mortgage loan receivable			106,200				—				—				—				—
Changes in deposits on real estate assets			—				200				200				(200	)			—
Investment in assets held for syndication, net			—				(2,427	)			2,230				1,319				8,159
Proceeds received on sales of real estate assets			—				96,790				96,790				—				672
Net cash used in investing activities			(29,819	)			(122,902	)			(218,137	)			(66,602	)			(168,716	)
Cash flows from financing activities:
Distributions to stockholders			(47,274	)			(46,419	)			(62,177	)			(60,586	)			(55,313	)
Proceeds (costs) from equity offering, net			—				17,465				17,295				21,868				114,695
Borrowings under bank note payable			160,000				375,000				449,000				—				—
Repayments under bank note payable, net			(527,000	)			(209,968	)			(209,968	)			100,960				41,540
Borrowing (repayment) of term loan payable, net			400,000				(74,850	)			(74,850	)			(150	)			—
Deferred Financing Costs			(5,328	)			(5,389	)			(5,388	)			—				—
Swap termination payment			—				(982	)			(983	)			—				—
Net cash provided by (used in) financing activities			(19,602	)			54,857				112,929				62,092				100,922
Net increase (decrease) in cash and cash equivalents			149				(24,166	)			(44,400	)			40,809				(1,840	)
Cash and cash equivalents, beginning of period			23,813				68,213				68,213				27,404				29,244
Cash and cash equivalents, end of period		$	23,962			$	44,047			$	23,813			$	68,213			$	27,404

 

 

(in thousands)					Nine					Nine
	Rentable				Months					Months
	Square Feet	Three Months Ended:			Ended		Three Months Ended:			Ended	Inc	%
Region	or RSF	31-Mar-12	30-Jun-12	30-Sep-12	30-Sep-12		31-Mar-11	30-Jun-11	30-Sep-11	30-Sep-11	(Dec)	Change
East	1,182	$       3,479	$     3,094	$       3,165	$     9,738		$      3,019	$     2,735	$        2,801	$     8,555	$     1,183	13.8%
MidWest	1,484	4,166	4,031	4,078	12,275		4,597	4,217	4,428	13,242	(967)	-7.3%
South	2,089	6,901	6,725	7,152	20,778		5,886	6,756	6,439	19,081	1,697	8.9%
West	1,089	2,278	2,443	2,428	7,149		1,718	2,293	2,095	6,106	1,043	17.1%
Same Store	5,844	16,824	16,293	16,823	49,940		15,220	16,001	15,763	46,984	2,956	6.3%
Acquisitions	1,380	4,901	4,868	5,755	15,524		807	3,513	3,488	7,808	7,716
Property NOI from the continuing portfolio	7,224	21,725	21,161	22,578	65,464		16,027	19,514	19,251	54,792	10,672
Dispositions and asset held for sale		(132)	(47)	(101)	(280)		336	(72)	(236)	28	(308)
Property NOI		$     21,593	$   21,114	$     22,477	$   65,184		$    16,363	$   19,442	$      19,015	$   54,820	$   10,364
Same Store		$     16,824	$   16,293	$     16,823	$   49,940		$    15,220	$   16,001	$      15,763	$   46,984	$     2,956	6.3%
Nonrecurring
Items in NOI (a)		599	21	307	927		1	-	169	170	757	1.6%
Comparative
Same Store		$     16,225	$   16,272	$     16,516	$   49,013		$    15,219	$   16,001	$      15,594	$   46,814	$     2,199	4.7%

 

(a) Nonrecurring Items in NOI include proceeds from bankruptcies, termination fees or other significant nonrecurring income or expenses, which may affect comparability.

 

*Excludes NOI from investments in and interest income from secured loans to non-consolidated REITs.

 

See page 27 for a reconciliation and definition of Net Income to Property NOI GAAP.

 

 

		31-Mar-12				30-Jun-12				30-Sep-12				31-Mar-11				30-Jun-11				30-Sep-11				31-Dec-11
Market Data:
Shares Outstanding			82,937				82,937				82,937				81,437				81,437				82,937				82,937
Closing market price per share		$	10.60			$	10.58			$	11.07			$	14.07			$	12.91			$	11.31			$	9.95
Market capitalization		$	879,136			$	877,478			$	918,117			$	1,145,824			$	1,051,357			$	938,022			$	825,227
Total Debt			494,000				494,000				482,000				404,000				345,000				375,000				449,000
Total Market Capitalization		$	1,373,136			$	1,371,478			$	1,400,117			$	1,549,824			$	1,396,357			$	1,313,022			$	1,274,227
Dividend Data:
Total dividends paid		$	15,758			$	15,758			$	15,758			$	15,473			$	15,473			$	15,473			$	15,758
Common dividend per share		$	0.19			$	0.19			$	0.19			$	0.19			$	0.19			$	0.19			$	0.19
Quarterly dividend as a % of FFO*			80.5%				82.6%				79.2%				95.0%				76.0%				95.0%				86.4%
Liquidity:
Cash and cash equivalents		$	29,283			$	22,620			$	23,962			$	49,488			$	28,881			$	44,047			$	23,813
Revolving credit facilities:
Gross potential available under current credit facilities			600,000				600,000				900,000				500,000				600,000				600,000				600,000
Less:
Outstanding balance			(494,000	)			(494,000	)			(482,000	)			(404,000	)			(345,000	)			(375,000	)			(449,000	)
Total Liquidity		$	135,283			$	128,620			$	441,962			$	145,488			$	283,881			$	269,047			$	174,813

 

*See page 23 for a reconciliation of Net Income to FFO and page 24 for a definition of FFO

 

 

 

 

	30-Sep-12	30-Jun-12	31-Mar-12	31-Dec-11	30-Sep-11
Owned portfolio of commercial real estate:
Number of properties (a)	37	36	36	36	35
Square feet	7,439,195	7,052,592	7,052,068	7,052,068	6,929,891
Leased percentage	90%	90%	89%	89%	88%
Investments in non-consolidated commercial real estate:
Number of properties	3	3	3	3	3
Square feet	2,016,260	2,003,968	2,004,953	2,001,542	1,998,575
Leased percentage	68%	89%	90%	87%	83%
Single Asset REITs (SARs) managed:
Number of properties	13	13	13	13	13
Square feet	3,322,589	3,322,589	3,322,570	3,322,639	3,322,638
Leased percentage	85%	85%	84%	80%	80%
Total owned (a) , investments and managed properties:
Number of properties	53	52	52	52	51
Square feet	12,778,044	12,379,149	12,379,591	12,376,249	12,251,104
Leased percentage	85%	89%	88%	86%	85%
(a) Includes asset held for sale

 

 

Owned:
Name	City	State	Region	Square Feet
Park Seneca	Charlotte	NC	East	109,550
Forest Park	Charlotte	NC	East	62,212
Emperor Boulevard	Durham	NC	East	259,531
Meadow Point	Chantilly	VA	East	138,537
Stonecroft	Chantilly	VA	East	111,469
Innsbrook	Glen Allen	VA	East	298,456
East Baltimore	Baltimore	MD	East	325,445
Loudoun Tech Center	Dulles	VA	East	135,888
Southfield Centre (a)	Southfield	MI	MidWest	214,697
Northwest Point	Elk Grove Village	IL	MidWest	176,848
909 Davis	Evanston	IL	MidWest	195,245
River Crossing	Indianapolis	IN	MidWest	205,059
Timberlake	Chesterfield	MO	MidWest	232,766
Timberlake East	Chesterfield	MO	MidWest	116,197
Lakeside Crossing	Maryland Heights	MO	MidWest	127,778
Eden Bluff	Eden Prairie	MN	MidWest	153,028
121 South 8th Street	Minneapolis	MN	MidWest	472,712
Blue Lagoon Drive	Miami	FL	South	212,619
One Overton Place	Atlanta	GA	South	387,267
One Ravinia	Atlanta	GA	South	386,603
Willow Bend Office Center	Plano	TX	South	117,050
Legacy Tennyson Center	Plano	TX	South	202,600
One Legacy Circle	Plano	TX	South	214,110
Park Ten	Houston	TX	South	155,715
Addison Circle	Addison	TX	South	293,787
Collins Crossing	Richardson	TX	South	298,766
East Renner Road	Richardson	TX	South	122,300
Eldridge Green	Houston	TX	South	248,399
Park Ten Phase II	Houston	TX	South	156,746
Liberty Plaza	Addison	TX	South	218,934
Centennial Technology Center	Colorado Springs	CO	West	110,405
380 Interlocken	Broomfield	CO	West	240,184
Greenwood Plaza	Englewood	CO	West	197,527
390 Interlocken	Broomfield	CO	West	241,516
Hillview Center	Milpitas	CA	West	36,288
Federal Way	Federal Way	WA	West	117,010
Montague Business Center	San Jose	CA	West	145,951
Total				7,439,195
Managed:
Name	City	State	Region	Square Feet
1441 Main Street	Columbia	SC	East	264,857
303 East Wacker Drive	Chicago	IL	MidWest	857,245
Monument Circle	Indianapolis	IN	MidWest	213,609
505 Waterford	Plymouth	MN	MidWest	256,367
50 South Tenth Street	Minneapolis	MN	MidWest	498,768
Grand Boulevard	Kansas City	MO	MidWest	535,071
Lakeside Crossing II	Maryland Heights	MO	MidWest	116,000
Centre Pointe V	West Chester	OH	MidWest	135,936
Union Centre	West Chester	OH	MidWest	409,798
Satellite Place	Duluth	GA	South	134,785
5601 Executive Drive	Irving	TX	South	152,121
Galleria North	Dallas	TX	South	379,518
Energy Tower I	Houston	TX	South	325,797
Phoenix Tower	Houston	TX	South	623,944
Highland Place I	Centennial	CO	West	139,142
385 Interlocken	Broomfield	CO	West	295,891
Total				5,338,849
(a) Asset held for sale

 

Properties by Division/Region
($ in thousands)
							NBV (a)		% Leased
	# of Properties		Square Feet		% of Portfolio		30-Sep-12		30-Sep-12
Mideast Division	8		1,441,088		19.4%		$     221,034		88.3%
East Region Total	8		1,441,088		19.4%		221,034		88.3%
East North Central Division*	4		791,849		10.6%		84,676		82.8%
West North Central	5		1,102,481		14.8%		105,854		95.2%
Midwest Region Total	9		1,894,330		25.4%		190,530		90.0%
Southeast	3		986,489		13.3%		154,228		91.8%
Southwest	10		2,028,407		27.3%		291,470		95.1%
South Region Total	13		3,014,896		40.6%		445,698		94.0%
Mountain	4		789,632		10.6%		123,182		81.1%
Pacific	3		299,249		4.0%		35,540		79.3%
West Region Total	7		1,088,881		14.6%		158,722		80.6%
Grand Total	37		7,439,195		100.0%		$ 1,015,984		89.9%

 

(a) NBV is for real estate assets, excluding intangibles

* Includes asset held for sale

 

 

 

 

						NBV (1)	% Leased
Region	Division	Name	City	State	S.F.	30-Sep-12	30-Sep-12
West	Pacific	Hillview Center	Milpitas	CA	36	$       4,047	100.0%
West	Pacific	Montague	San Jose	CA	146	17,535	100.0%
West	Mountain	380 Interlocken	Broomfield	CO	240	40,812	89.5%
West	Mountain	390 Interlocken	Broomfield	CO	242	41,019	97.2%
West	Mountain	Centennial Technology Center	Colorado Springs	CO	110	11,279	85.4%
West	Mountain	Greenwood Plaza	Englewood	CO	197	30,071	48.9%
South	Southeast	Blue Lagoon Drive	Miami	FL	213	45,906	100.0%
South	Southeast	One Ravinia	Atlanta	GA	387	37,930	84.5%
South	Southeast	One Overton Place	Atlanta	GA	387	70,392	94.6%
MidWest	East North Central	Northwest Point	Elk Grove Village	IL	177	27,163	100.0%
MidWest	East North Central	909 Davis	Evanston	IL	195	22,737	97.9%
MidWest	East North Central	River Crossing	Indianapolis	IN	205	34,775	97.0%
East	Mideast	East Baltimore	Baltimore	MD	325	53,459	57.2%
MidWest	East North Central	Southfield Centre (2)	Southfield	MI	215	-	41.4%
MidWest	West North Central	Eden Bluff	Eden Prairie	MN	153	13,942	100.0%
MidWest	West North Central	121 South 8th Street	Minneapolis	MN	473	25,475	91.1%
MidWest	West North Central	Timberlake	Chesterfield	MO	233	33,160	97.0%
MidWest	West North Central	Timberlake East	Chesterfield	MO	116	16,774	97.0%
MidWest	West North Central	Lakeside Crossing	Maryland Heights	MO	128	16,503	100.0%
East	Mideast	Park Seneca	Charlotte	NC	110	7,182	77.3%
East	Mideast	Forest Park	Charlotte	NC	62	5,925	100.0%
East	Mideast	Emperor Boulevard	Durham	NC	259	54,279	100.0%
South	Southwest	Addison Circle	Addison	TX	294	44,987	98.4%
South	Southwest	Liberty Plaza	Addison	TX	219	23,886	85.2%
South	Southwest	Park Ten	Houston	TX	156	18,690	96.1%
South	Southwest	Eldridge Green	Houston	TX	248	42,894	100.0%
South	Southwest	Park Ten Phase II	Houston	TX	157	29,758	100.0%
South	Southwest	Willow Bend Office Center	Plano	TX	117	18,178	77.8%
South	Southwest	Legacy Tennyson Center	Plano	TX	203	24,235	100.0%
South	Southwest	One Legacy Circle	Plano	TX	214	38,580	100.0%
South	Southwest	Collins Crossing	Richardson	TX	299	42,388	90.0%
South	Southwest	East Renner Road	Richardson	TX	122	7,873	100.0%
East	Mideast	Meadow Point	Chantilly	VA	139	22,045	100.0%
East	Mideast	Stonecroft	Chantilly	VA	111	18,604	100.0%
East	Mideast	Loudoun Tech Center	Dulles	VA	136	16,821	100.0%
East	Mideast	Innsbrook	Glen Allen	VA	298	42,720	98.3%
West	Pacific	Federal Way	Federal Way	WA	117	13,959	47.0%
					7,439	$ 1,015,984	89.9%

 

(1) NBV is for real estate assets, excluding intangibles

(2) Asset held for sale at September 30, 2012

 

 

												Weighted
												Occupied		Weighted
						Year Built				Weighted		Percentage as of		Average GAAP
						or		Net Rentable		Occupied		December 31,		Rent per Occupied
Property Name		City		State		Renovated		Square Feet		Sq. Ft.		2011 (a)		Square Feet (b)
Park Seneca		Charlotte		NC		1969		109,550		87,300		79.7%		$           15.58
Forest Park		Charlotte		NC		1999		62,212		48,239		77.5%		15.53
Meadow Point		Chantilly		VA		1999		138,537		137,817		99.5%		26.23
Innsbrook		Glen Allen		VA		1999		298,456		149,944		50.2%		20.82
East Baltimore		Baltimore		MD		1989		325,445		204,445		62.8%		27.43
Loudoun Tech Center		Dulles		VA		1999		135,888		135,888		100.0%		15.58
Stonecroft		Chantilly		VA		2008		111,469		111,469		100.0%		37.40
Emperor Boulevard		Durham		NC		2009		259,531		259,531		100.0%		34.58
East total								1,441,088		1,134,633		78.7%		26.19
Southfield Centre		Southfield		MI		1977		214,697		97,215		45.3%		11.83
Northwest Point		Elk Grove Village		IL		1999		176,848		176,848		100.0%		19.38
909 Davis Street		Evanston		IL		2002		195,245		185,131		94.8%		33.84
River Crossing		Indianapolis		IN		1998		205,059		191,833		93.6%		23.75
Timberlake		Chesterfield		MO		1999		232,766		227,296		97.7%		21.33
Timberlake East		Chesterfield		MO		2000		116,197		109,365		94.1%		23.74
Lakeside Crossing		St. Louis		MO		2008		127,778		127,778		100.0%		23.68
Eden Bluff		Eden Praire		MN		2006		153,028		153,028		100.0%		27.21
121 South 8th Street		Minneapolis		MN		1974		472,616		419,021		88.7%		15.64
Midwest total								1,894,234		1,687,515		89.1%		21.68
Blue Lagoon Drive		Miami		FL		2002		212,619		212,619		100.0%		22.03
One Overton Place		Atlanta		GA		2002		387,267		352,916		91.1%		21.19
Willow Bend Office Center		Plano		TX		1999		116,622		74,801		64.1%		20.23
Park Ten		Houston		TX		1999		155,715		108,533		69.7%		28.67
Addison Circle		Addison		TX		1999		293,787		281,507		95.8%		25.16
Collins Crossing		Richardson		TX		1999		298,766		217,830		72.9%		24.37
Eldridge Green		Houston		TX		1999		248,399		248,399		100.0%		27.20
Park Ten Phase II		Houston		TX		2006		156,746		156,746		100.0%		28.75
Liberty Plaza		Addison		TX		1985		218,934		156,516		71.5%		20.91
Denbury Park		Plano		TX		1999/2008		202,600		202,600		100.0%		17.03
One Legacy Circle		Plano		TX		2008		214,110		198,608		92.8%		33.10
East Renner Road		Richardson		TX		1999		122,300		122,300		100.0%		10.00
South Total								2,627,865		2,333,376		88.8%		23.56
Centennial Technology Center		Colorado Springs		CO		1999		110,405		73,817		66.9%		16.39
380 Interlocken		Broomfield		CO		2000		240,184		204,349		85.1%		27.64
Greenwood Plaza		Englewood		CO		2000		197,527		92,383		46.8%		18.68
390 Interlocken		Broomfield		CO		2002		241,516		215,456		89.2%		29.24
Hillview Center		Milpitas		CA		1984		36,288		36,288		100.0%		14.19
Federal Way		Federal Way		WA		1982		117,010		43,773		37.4%		18.94
Montague Business Center		San Jose		CA		1982		145,951		145,951		100.0%		15.45
West Total								1,088,881		812,018		74.6%		22.76
Grand Total								7,052,068		5,967,542		84.6%		$           23.42

 

(a) Based on weighted occupied square feet for the year ended December 31, 2011, including month-to-month tenants, divided by the Property's net rentable square footage.

(b) Represents GAAP rental revenue for year ended December 2011 per weighted occupied square foot.

 

 

														Nine Months
		For the Three Months Ended:												Ended
		31-Mar-12				30-Jun-12				30-Sep-12				30-Sep-12
Tenant improvements		$	3,014			$	2,705			$	2,854			$	8,573
Deferred leasing costs			2,196				1,343				1,104				4,643
Building improvements			746				1,003				711				2,460
Total		$	5,956			$	5,051			$	4,669			$	15,676

 

																		Year
		For the Three Months Ended																Ended
		31-Mar-11				30-Jun-11				30-Sep-11				31-Dec-11				31-Dec-11
Tenant improvements		$	2,506			$	3,215			$	5,092			$	8,219			$	19,032
Deferred leasing costs			2,819				2,567				1,324				1,348				8,058
Building improvements			449				876				754				747				2,826
Total		$	5,774			$	6,658			$	7,170			$	10,314			$	29,916

 

																		Year
		For the Three Months Ended																Ended
		31-Mar-10				30-Jun-10				29-Sep-10				31-Dec-10				31-Dec-10
Tenant improvements		$	1,305			$	935			$	3,634			$	1,126			$	7,000
Deferred leasing costs			5,566				1,519				808				2,622				10,515
Building improvements			380				498				671				1,053				2,602
Total		$	7,251			$	2,952			$	5,113			$	4,801			$	20,117

 

																		Year
		For the Three Months Ended																Ended
		31-Mar-09				30-Jun-09				30-Sep-09				31-Dec-09				31-Dec-09
Tenant improvements		$	1,373			$	912			$	931			$	1,528			$	4,744
Deferred leasing costs			162				1,395				645				457				2,659
Building improvements			466				116				265				619				1,466
Total		$	2,001			$	2,423			$	1,841			$	2,604			$	8,869

 

 

			Remaining	Aggregate	% of Aggregate	Annualized	% of Aggregate
	Tenant	Number of	Lease Term	Leased	Leased	Rent	Leased
	Name	Leases	in Months	Square Feet	Square Feet	(in 000's)	Annualized Rent
1	TCF National Bank	2	3, 39	268,252	3.71%	$      2,934,887	2.01%
2	Quintiles Transnational Corp.	1	78	259,531	3.59%	8,279,077	5.68%
3	CITGO Petroleum Corporation	1	113	248,399	3.44%	7,202,681	4.94%
4	Burger King Corporation	1	72	212,619	2.94%	4,465,755	3.06%
5	Denbury Onshore, LLC	1	46	202,600	2.80%	3,510,042	2.41%
6	RGA Reinsurance Company	1	27	197,354	2.73%	4,128,166	2.83%
7	SunTrust Bank	2	49, 108	182,888	2.53%	3,627,622	2.49%
8	Citicorp Credit Services, Inc	1	51	176,848	2.45%	3,511,335	2.41%
9	C.H. Robinson Worldwide, Inc	1	105	153,028	2.12%	4,064,622	2.79%
10	T-Mobile South, LLC dba T-Mobile	1	77	151,792	2.10%	3,530,556	2.42%
11	Houghton Mifflin Harcourt Publishing Company	1	54	150,050	2.08%	5,696,915	3.91%
12	Murphy Exploration & Production Company	1	55	144,677	2.00%	4,017,514	2.76%
13	Giesecke & Devrient America, Inc.	1	29	135,888	1.88%	1,842,083	1.26%
14	Monsanto Company	1	28	127,778	1.77%	3,308,333	2.27%
15	AT&T Services, Inc.	1	69	122,300	1.69%	977,989	0.67%
16	Vail Holdings, Inc.	1	78, 126	122,232	1.69%	3,373,457	2.31%
17	Northrop Grumman Systems Corporation	1	67	111,469	1.54%	4,260,211	2.92%
18	Argo Data Resource Corporation	1	68	109,990	1.52%	2,690,829	1.85%
19	Alliance Data Systems	1	92, 105	96,749	1.34%	2,932,555	2.01%
20	Federal National Mortgage Association	1	11	92,358	1.28%	1,863,613	1.28%
	Excludes Asset Held for Sale at September 30, 2012		Total	3,266,802	45.22%	$    76,218,243	52.27%

 

 

 

 

 

 

 

 

 

				Rentable				Annualized		Percentage
	Number of			Square				Rent		of Total Final
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
December 31,	Year			Leases		Leases (a)		Leases		Leases
2012	56	(b)		88,523	$	1,570,176	$	17.74		1.08%
2013	61			423,414		9,954,048		23.51		6.83%
2014	46			411,131		7,561,889		18.39		5.19%
2015	53			835,285		17,740,031		21.24		12.17%
2016	43			925,979		17,931,436		19.36		12.30%
2017	40			816,436		20,776,570		25.45		14.25%
2018	25			770,594		16,514,715		21.43		11.32%
2019	17			929,940		22,684,545		24.39		15.56%
2020	10			189,592		3,222,645		17.00		2.21%
2021 and thereafter	42			1,210,473		27,869,241		23.02		19.11%
	393			6,601,367	$	145,825,297	$	22.09		100.00%
Vacancies as of 9/30/12				623,131
Total Portfolio Square Footage*				7,224,498

 

* Excludes asset held for sale

 

(a) Annualized rent represents the monthly rent, including tenant reimbursements, for each lease in effect at September 30, 2012 mulitplied by 12. Tenant reimbursements generally include payment of real estate taxes, operating expenses and common area maintenance and utility charges.

 

(b) 41 leases are Month to Month

 

 

				%	Fourth	%	First	%	Second	%	Third
				Leased (1)	Quarter	Leased (1)	Quarter	Leased (1)	Quarter	Leased (1)	Quarter
			Square	as of	Average %	as of	Average %	as of	Average %	as of	Average %
	Property Name	Location	Feet	31-Dec-11	Leased (2)	31-Mar-12	Leased (2)	30-Jun-12	Leased (2)	30-Sep-12	Leased (2)
1	PARK SENECA	Charlotte, NC	109,550	80.6%	80.6%	80.5%	79.9%	81.5%	80.9%	77.3%	78.2%
2	HILLVIEW CENTER	Milpitas, CA	36,288	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%
3	SOUTHFIELD	Southfield, MI	214,697	39.2%	39.2%	39.2%	39.2%	39.6%	38.5%	41.4%	40.5%
4	FOREST PARK	Charlotte, NC	62,212	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%
5	CENTENNIAL	Colorado Springs, CO	110,405	85.4%	73.0%	85.4%	85.4%	85.4%	85.4%	85.4%	85.4%
6	MEADOW POINT	Chantilly, VA	138,537	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%
7	TIMBERLAKE	Chesterfield, MO	232,766	97.7%	97.7%	97.7%	97.7%	93.2%	96.2%	97.0%	97.0%
8	FEDERAL WAY	Federal Way, WA	117,010	47.0%	44.3%	47.0%	47.0%	47.0%	47.0%	47.0%	47.0%
9	NORTHWEST POINT	Elk Grove Village, IL	176,848	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%
10	TIMBERLAKE EAST	Chesterfield, MO	116,197	85.9%	85.9%	85.9%	85.9%	97.0%	89.6%	97.0%	97.0%
11	PARK TEN	Houston, TX	155,715	81.2%	81.2%	81.2%	81.2%	96.1%	91.1%	96.1%	96.1%
12	MONTAGUE	San Jose, CA	145,951	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%
13	ADDISON	Addison, TX	293,787	95.8%	95.8%	95.8%	95.8%	95.8%	95.8%	98.4%	96.7%
14	COLLINS CROSSING	Richardson, TX	298,766	88.4%	88.4%	87.8%	87.8%	87.8%	87.8%	90.0%	88.5%
15	GREENWOOD PLAZA	Englewood, CO	197,527	48.9%	48.4%	48.9%	48.9%	48.9%	48.9%	48.9%	48.9%
16	RIVER CROSSING	Indianapolis, IN	205,059	93.5%	93.5%	93.9%	93.1%	96.1%	94.6%	97.0%	96.7%
17	LIBERTY PLAZA	Addison, TX	218,934	77.9%	74.8%	76.4%	77.4%	84.1%	78.9%	85.2%	85.2%
18	INNSBROOK	Glen Allen, VA	298,456	98.3%	90.7%	98.3%	98.3%	98.3%	98.3%	98.3%	98.3%
19	380 INTERLOCKEN	Broomfield, CO	240,184	85.1%	85.1%	89.5%	86.5%	89.5%	89.5%	89.5%	89.5%
20	BLUE LAGOON	Miami, FLA	212,619	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%
21	ELDRIDGE GREEN	Houston, TX	248,399	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%
22	WILLOW BEND	Plano, TX	117,050	83.1%	83.1%	77.4%	77.4%	77.8%	77.8%	77.8%	77.8%
23	ONE OVERTON PARK	Atlanta, GA	387,267	89.3%	90.0%	91.7%	90.9%	92.6%	92.3%	94.6%	94.6%
24	390 INTERLOCKEN	Broomfield, CO	241,516	93.4%	94.3%	96.4%	94.6%	97.2%	96.9%	97.2%	97.2%
25	EAST BALTIMORE	Baltimore, MD	325,445	55.7%	55.7%	56.2%	55.9%	58.2%	57.5%	57.2%	57.5%
26	PARK TEN PHASE II	Houston, TX	156,746	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%
27	LAKESIDE CROSSING I	Maryland Heights, MO	127,778	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%
28	LOUDOUN TECH	Dulles, VA	135,888	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%
29	4807 STONECROFT	Chantilly, VA	111,469	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%
30	EDEN BLUFF	Eden Prairie, MN	153,028	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%
31	121 SOUTH EIGHTH ST	Minneapolis, MN	472,712	93.6%	93.6%	93.8%	93.8%	95.6%	94.4%	91.1%	92.6%
32	EMPEROR BOULEVARD	Durham, NC	259,531	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%
33	LEGACY TENNYSON CTR	Plano, TX	202,600	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%
34	ONE LEGACY	Plano, TX	214,110	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%
35	909 DAVIS	Evanston, IL	195,245	94.8%	94.8%	94.8%	94.8%	94.8%	94.8%	97.9%	96.9%
36	1410 EAST RENNER	Richardson, TX	122,300	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%
37	ONE RAVINIA DRIVE	Atlanta, GA	386,603	n/a	n/a	n/a	n/a	n/a	n/a	84.5%	84.0%
	TOTAL WEIGHTED AVERAGE		7,439,195	88.7%	88.1%	89.0%	88.8%	90.0%	89.5%	89.9%	89.8%

 

(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.

 

 

Recent Acquisitions:

State/Region

Property Type

Square Feet

Date Acquired

Purchase Price

2012

One Ravinia

GA/South

Office

386,603

7/31/12

$             52,518

2011

Emperor Boulevard

NC/East

Office

259,531

3/4/11

75,800

Legacy Tennyson Center

TX/South

Office

202,600

3/10/11

37,000

One Legacy Circle

TX/South

Office

214,110

3/24/11

52,983

909 Davis

IL/Midwest

Office

195,245

9/30/11

37,062

East Renner Road

TX/South

Office

122,300

10/6/11

11,282

2010

121 South 8th Street

MN/Midwest

Office

474,646

6/29/10

39,405

2009

Stonecroft-Chantilly

VA/East

Office

111,469

6/26/09

29,000

Eden Bluff - Eden Prairie

MN/Midwest

Office

153,028

6/30/09

22,784

Fairview

VA/East

Office

252,613

9/30/09

73,000

2008

Park Ten Phase II

TX/South

Office

156,746

5/15/08

35,079

Lakeside Crossing

MO/Midwest

Office

127,778

12/11/08

20,003

Loudoun Tech Center

VA/East

Office

135,888

12/23/08

18,628

2007

East Baltimore

MD/East

Office

325,298

6/13/07

63,592

Recent Dispositions:

Net Sales

Gain (Loss)

State/Region

Property Type

Square Feet

Date Sold

Proceeds

on Sale

2011

Fairview

VA/East

Office

252,613

1/21/11

$             89,382

$             19,592

Bollman

MD/East

Industrial

98,745

6/24/11

7,408

2,346

2007

Piedmont Center

SC/East

Office

144,029

1/31/07

5,830

(4,849)

Royal Ridge

GA/South

Office

161,366

6/21/07

32,535

6,601

Goldentop Technology Center

CA/West

Office

141,405

6/27/07

36,199

14,741

Lyberty Way

MA/East

Office

104,711

7/16/07

10,861

1,942

Austin N.W. (Canyon Hills)

TX/South

Office

68,533

12/20/07

10,429

257

 

 

		For the Three Months Ended:																												For the Year Ended:
		31-Mar-12				30-Jun-12				30-Sep-12				31-Mar-11				30-Jun-11				30-Sep-11				31-Dec-11				2011				2010				2009				2008
Net income		$	5,738			$	5,434			$	(8,998	)		$	24,767			$	10,381			$	3,314			$	5,062			$	43,524			$	22,093			$	27,872			$	24,572
Less gain on sale of assets			—				—				14,300				(19,593	)			(2,346	)			—				—				(21,939	)			—				(424	)			—
GAAP income from non-consolidated REITs			(391	)			(494	)			(176	)			(1,773	)			(1,166	)			(573	)			(978	)			(4,490	)			(1,190	)			(2,012	)			(1,953	)
Distributions from non-consolidated REITs			929				898				907				1,767				1,215				1,104				970				5,056				5,170				5,628				4,802
Depreciation & amortization			13,295				13,203				13,779				10,812				12,047				12,332				13,248				48,439				40,724				39,652				26,146
NAREIT FFO			19,571				19,041				19,812				15,980				20,131				16,177				18,302				70,590				66,797				70,716				53,567
Acquisition costs			—				—				101				269				9				185				157				620				125				643				—
Funds From Operations (FFO)		$	19,571			$	19,041			$	19,913			$	16,249			$	20,140			$	16,362			$	18,459			$	71,210			$	66,922			$	71,359			$	53,567
Per Share Data:
EPS		$	0.07			$	0.07			$	(0.11	)		$	0.30			$	0.13			$	0.04			$	0.06			$	0.55			$	0.28			$	0.38			$	0.35
FFO			0.24				0.23				0.24				0.20				0.25				0.20				0.23				0.89				0.84				0.98				0.76
Weighted Average Shares (basic and diluted)			82,937				82,937				82,937				81,437				81,437				81,600				81,600				79,826				79,826				73,001				70,481

 

 

Definition of Funds From Operations (“FFO”)

 

The Company evaluates performance based on Funds From Operations, which we refer to as FFO, as management believes that FFO represents the most accurate measure of activity and is the basis for distributions paid to equity holders. The Company defines FFO as net income (computed in accordance with GAAP), excluding gains (or losses) from sales of property and acquisition costs of newly acquired properties that are not capitalized, plus depreciation and amortization, including amortization of acquired above and below market lease intangibles and impairment charges, and after adjustments to exclude non-cash income (or losses) from non-consolidated or Sponsored REITs, plus distributions received from non-consolidated or Sponsored REITs.

 

FFO should not be considered as an alternative to net income (determined in accordance with GAAP), nor as an indicator of the Company’s financial performance, nor as an alternative to cash flows from operating activities (determined in accordance with GAAP), nor as a measure of the Company’s liquidity, nor is it necessarily indicative of sufficient cash flow to fund all of the Company’s needs.

 

Other real estate companies and the National Association of Real Estate Investment Trusts, or NAREIT, may define this term in a different manner. We have included the NAREIT FFO definition in our table and note that other REITs may not define FFO in accordance with the current NAREIT definition or may interpret the current NAREIT definition differently than we do.

 

We believe that in order to facilitate a clear understanding of the results of the Company, FFO should be examined in connection with net income and cash flows from operating, investing and financing activities in the consolidated financial statements.

 

 

		For the Three Months Ended:
		31-Mar-12				30-Jun-12				30-Sep-12				31-Mar-11				30-Jun-11				30-Sep-11				31-Dec-11				31-Mar-10				30-Jun-10				30-Sep-10				31-Dec-10
Net income		$	5,738			$	5,434			$	(8,998	)		$	24,767			$	10,381			$	3,314			$	5,062			$	5,562			$	5,954			$	4,757			$	5,820
(Gain) Loss on sale of assets			—				—				14,300				(19,593	)			(2,346	)			—				—				—				—				—				—
GAAP income from non-consolidated REITs			(391	)			(494	)			(176	)			(1,773	)			(1,166	)			(573	)			(978	)			(253	)			(380	)			(404	)			(153	)
Distributions from non-consolidated REITs			929				898				907				1,767				1,215				1,104				970				1,407				1,324				1,192				1,247
Acquisition costs			—				—				101				269				9				185				157				—				129				(4	)			—
Depreciation & amortization			13,295				13,203				13,779				10,812				12,047				12,332				13,248				9,934				9,675				10,510				10,605
Funds From Operations (FFO)		$	19,571			$	19,041			$	19,913			$	16,249			$	20,140			$	16,362			$	18,459			$	16,650			$	16,702			$	16,051			$	17,519
Funds Available for Distribution:
Funds From Operations (FFO)			19,571				19,041				19,913				16,249				20,140				16,362				18,459				16,650				16,702				16,051				17,519
Straight-line rent			(1,516	)			(1,054	)			(927	)			(2,303	)			(2,873	)			(2,228	)			(2,474	)			(1,018	)			(740	)			(1,203	)			(1,288	)
Capital expenditures			(746	)			(1,003	)			(711	)			(449	)			(876	)			(754	)			(747	)			(380	)			(498	)			(671	)			(1,053	)
Funds Available for Distribution (FAD)		$	17,309			$	16,984			$	18,275			$	13,497			$	16,391			$	13,380			$	15,238			$	15,252			$	15,464			$	14,177			$	15,178
Per Share Data:
EPS		$	0.07			$	0.07			$	(0.11	)		$	0.30			$	0.13			$	0.04			$	0.06			$	0.07			$	0.07			$	0.06			$	0.07
FFO			0.24				0.23				0.24				0.20				0.25				0.20				0.22				0.21				0.21				0.20				0.22
FAD			0.21				0.20				0.22				0.17				0.20				0.16				0.18				0.19				0.19				0.18				0.19
Weighted Average Shares (basic and diluted)			82,937				82,937				82,937				81,437				81,437				81,600				82,937				79,681				79,681				79,751				80,187

 

The Company defines FAD as the sum of (1) FFO, (2) less the effect of straight-line rent, (3) less recurring capital expenditures that are generally for maintenance of properties and are not recovered through rental income from tenants, and (4) plus non-cash compensation expenses, if any. FAD 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, FAD should be examined in connection with net income and cash flows from operating, investing and financing activities in the consolidated financial statements.

 

 

		For the three months ended:												For the three months ended:																Year Ended
		31-Mar-12				30-Jun-12				30-Sep-12				31-Mar-11				30-Jun-11				30-Sep-11				31-Dec-11				31-Dec-11
Net income		$	5,738			$	5,434			$	(8,998	)		$	24,767			$	10,381			$	3,314			$	5,062			$	43,524
Excluding gains on sale of properties and provision for losses on property held for sale			—				—				14,300				(19,593	)			(2,346	)			—				—				(21,939	)
Interest expense			3,677				4,037				4,187				2,408				3,578				3,419				3,261				12,666
Depreciation and amortization			13,295				13,203				13,778				10,812				12,047				12,332				13,248				48,439
Income taxes			79				77				80				50				68				67				82				267
EBITDA			22,789				22,751				23,347				18,444				23,728				19,132				21,653				82,957
Interest expense		$	3,677			$	4,037			$	4,187			$	2,408			$	3,578			$	3,419			$	3,261			$	12,666
Scheduled principal payments			—				—				—				—				—				—				—				—
Interest and scheduled principal payments		$	3,677			$	4,037			$	4,187			$	2,408			$	3,578			$	3,419			$	3,261			$	12,666
Interest coverage ratio			6.20				5.64				5.58				7.66				6.63				5.60				6.64				6.55

 

EBITDA, a non-GAAP financial measure, is defined as net income excluding gains and losses on sales of properties or provisions for losses on assets held for sale, plus interest expense, income tax expense and depreciation and amortization expense. EBITDA is not intended to represent cash flow for the period, is 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 is not indicative of operating income or cash provided by operating activities as determined under GAAP. EBITDA is 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 the same way, this presentation of EBITDA 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.

 

 

		Three Months Ended												Three Months Ended																2011
		31-Mar-12				30-Jun-12				30-Sep-12				31-Mar-11				30-Jun-11				30-Sep-11				31-Dec-11				Total
Net Income		$	5,738			$	5,434			$	(8,998	)		$	24,767			$	10,381			$	3,314			$	5,062			$	43,524
Add (deduct):
Discontinued Operations			317				268				270				(326	)			(3,012	)			543				216				(2,579	)
Loss provision or (gain) on sale of assets			—				—				14,300				(19,593	)			(2,346	)			—				—				(21,939	)
Management fees (before elimination)			(488	)			(479	)			(562	)			(364	)			(428	)			(439	)			(563	)			(1,794	)
Depreciation and Amortization			13,071				13,004				13,573				10,611				11,876				12,183				12,951				47,621
Amortization of above/below market leases			40				(20	)			36				(39	)			(23	)			(57	)			72				(47	)
Selling, general and administrative			2,077				2,236				3,141				1,644				1,602				1,656				2,011				6,913
Interest expense			3,677				4,037				4,187				2,408				3,578				3,419				3,260				12,665
Interest income			(2,340	)			(2,774	)			(3,201	)			(600	)			(910	)			(790	)			(810	)			(3,110	)
Equity in earnings of nonconsolidated REITs			(391	)			(494	)			(176	)			(968	)			(1,166	)			(573	)			(978	)			(3,685	)
Non-property specific income and expenses, net			24				(51	)			8				(1,513	)			(38	)(5)							(13	)			(1,569	)
Property NOI from continuing portfolio		$	21,725			$	21,161			$	22,578			$	16,027			$	19,514			$	19,251			$	21,208			$	76,000
Dispositions and asset held for sale			(132	)			(47	)			(101	)			336				(72	)			(236	)			(175	)			(147	)
Property NOI from continuing portfolio		$	21,593			$	21,114			$	22,477			$	16,363			$	19,442			$	19,015			$	21,033			$	75,853

 

Property NOI is a non-GAAP financial measure equal to 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. Property NOI presented 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.

 

 

Investor Relations Contact   (877) 686-9496 InvestorRelations@franklinstreetproperties.com

 

 

 

Franklin Street Properties Corp. ● 401 Edgewater Place ● Wakefield, MA 01880 ● (781) 557-1300

 

www.franklinstreetproperties.com