Exhibit 99.2

 

 

Supplemental Operating and Financial Data Third Quarter 2011

 

 

 

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	21
Key Financial Data			20 Largest Tenants, Industry Profile	22
Financial Highlights	6		Lease Expirations by Square Feet	23
Management’s Key Operating Measures	7		Lease Expirations with annualized rent per square foot	24
Income Statements	8		Percentage of Leased Space by Property	25
EPS, FFO, GOS and FFO+GOS	9
Balance Sheets	10		Transactional Drivers
Cash Flow Statements	11		Capital Recycling	26
Segment Information	12-13		Investment Banking Performance	27
Property Net Operating Income (NOI): Cash and GAAP Basis	14
Capital Analysis	15		FFO and FFO+GOS Reconciliations	28
			FFO and FFO+GOS Definitions	29
Portfolio Overview			FAD Reconciliation and Definition	30
Property by Form of FSP Participation	16		EBITDA Reconciliation and Definition	31
Regional Analysis and Map	17		NOI Reconciliation and Definition	32
Owned Property List	18
Properties with annualized rent per square foot	19
Capital Expenditures	20

 

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) (NYSE Amex: 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, interim acquisition and 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.

 

Our Business

 

FSP operates in two business segments and has two principal sources of revenue; real estate operations and investment banking/investment services. Real estate operations include rental income from real estate leasing, interest income from loans made for interim acquisition or other purposes, and fee income from asset management. Investment banking/investment services generate brokerage commissions, loan origination fees, development services and other fees related to the organization of single-purpose entities that own real estate and the private placement of equity in those entities.

 

Strategy

 

FSP’s investment strategy is to make selective acquisitions based on market and/or property specific criteria, actively manage the property to maximize its value and dispose of the property when the ideal time or situation arises. 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. Unlike many real estate investment companies, which have utilized significant leverage in an attempt to enhance their real estate portfolio’s returns, FSP has used very moderate leverage. FSP’s historical growth has been achieved without the use of permanent mortgage debt on any of our properties. This model has significantly reduced FSP’s risk profile by reducing foreclosure, financing and refinancing risk. The Company’s strategy is to employ modest leverage to accelerate its growth and capitalize on market conditions and opportunities as they arise. In addition, FSP believes that it can lower investment risk while enhancing current income and long-term appreciation potential by owning properties in diversified geographic locations that have sound long-term economic growth potential.

 

Snapshot
(as of September 30, 2011)
Corporate Headquarters	Wakefield, MA
Fiscal Year-End	31-Dec
Total Properties	35
Total Square Feet	6.9 Million
Common Shares Outstanding	82,937,405
Quarterly Dividend	$0.19
Dividend Yield	6.72%
Total Market Capitalization	$1.3 Billion
Insider Holdings	12.6%

 

 

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 and the income from FSP’s investment banking business.

 

 

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

 

 

 

Corporate Headquarters		Trading Symbol		Inquiries
401 Edgewater Place, Suite 200		NYSE Amex		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 Amex: FSP)
	For the Three Months Ended
	30-Sep-11	30-Jun-11	31-Mar-11	31-Dec-10	30-Sep-10	30-Jun-10	31-Mar-10
High Price	13.91	14.25	15.63	14.42	12.86	15.70	15.01
Low Price	10.49	12	13.52	12.2	10.99	11.04	11.64
Closing Price, at the end of the quarter	11.31	12.91	14.07	14.25	12.42	11.81	14.43
Dividends paid per share – quarterly	0.19	0.19	0.19	0.19	0.19	0.19	0.19
Closing dividend yield – annualized	6.72%	5.89%	5.40%	5.33%	6.12%	6.44%	5.27%
Common shares outstanding (millions)	82.94	81.44	81.44	81.44	79.84	79.68	79.68

 

 

Timing

 

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

 

First Quarter:		4-May-12		Third Quarter:	2-Nov-12
Second Quarter:		30-Jul-12		Fourth Quarter:	24-Feb-12

 

 

																														For the Year
		For the Three Months Ended																												Ended
		31-Mar-11				30-Jun-11				30-Sep-11				31-Mar-10				30-Jun-10				30-Sep-10				31-Dec-10				31-Dec-10
Income Items:
Revenue:
Rental		$	31,100			$	34,755			$	33,672			$	28,588			$	27,046			$	29,222			$	29,782			$	114,638
Related party revenue			2,016				5,658				2,040				800				1,853				896				4,163				7,712
Other			6				7				7				9				6				20				54				89
Total revenue			33,122				40,420				35,719				29,397				28,905				30,138				33,999				122,439
Total expenses			29,336				33,589				32,919				25,320				24,488				26,987				29,258				106,053
Income before interest income, equity in earnings in non-consolidated REITs and taxes			3,786				6,831				2,800				4,077				4,417				3,151				4,741				16,386
Interest income			11				9				8				8				9				4				4				25
Equity in earnings in non-consolidated REITs			968				1,166				573				253				380				404				229				1,266
Income before taxes			4,765				8,006				3,381				4,338				4,806				3,559				4,974				17,677
Income tax expense (benefit)			50				68				67				(68	)			5				(37	)			317				217
Income from continuing operations			4,715				7,938				3,314				4,406				4,801				3,596				4,657				17,460
Income from discontinued operations			459				97				—				1,156				1,153				1,161				1,163				4,633
Gain on sale of assets			19,593				2,346				—				—				—				—				—				—
Net income		$	24,767			$	10,381			$	3,314			$	5,562			$	5,954			$	4,757			$	5,820			$	22,093
FFO+GOS*:
FFO		$	16,250			$	20,140			$	16,463			$	16,650			$	16,702			$	16,052			$	17,518			$	66,922
GOS			19,593				2,346				—				—				—				—				—				—
FFO+GOS		$	35,843			$	22,486			$	16,463			$	16,650			$	16,702			$	16,052			$	17,518			$	66,922
Per Share Data:
EPS		$	0.30			$	0.13			$	0.04			$	0.07			$	0.07			$	0.06			$	0.07			$	0.28
FFO			0.20				0.25				0.20				0.21				0.21				0.20				0.22				0.84
GOS			—				—				—				—				—				—				—				—
FFO+GOS			0.44				0.28				0.20				0.21				0.21				0.20				0.22				0.84
Weighted Average Shares (diluted)			81,437				81,437				81,600				79,681				79,681				79,751				80,187				79,826
Balance Sheet Items:
Real estate, net		$	979,560			$	976,131			$	997,258			$	778,409			$	798,058			$	796,289			$	862,698			$	862,698
Other assets, net			387,342				327,633				348,526				372,139				387,141				391,270				376,037				376,037
Total assets, net			1,366,902				1,303,764				1,345,784				1,150,548				1,185,199				1,187,559				1,238,735				1,238,735
Total liabilities, net			435,801				377,374				413,784				222,771				266,347				277,272				317,177				317,177
Shareholders' equity			931,101				926,390				932,000				927,777				918,852				910,287				921,558				921,558

 

* See page 28 for a reconciliation of Net Income to FFO and FFO+GOS and page 29 for definitions of FFO and FFO+GOS

 

 

 

 

 

* See page 28 for a reconciliation of Net Income to FFO and FFO+GOS (Total Profits) and page 29 for definitions of FFO and FFO+GOS

 

 

																														For the
		For the Three Months Ended																												Year Ended
		31-Mar-11				30-Jun-11				30-Sep-11				31-Mar-10				30-Jun-10				30-Sep-10				31-Dec-10				31-Dec-10
Revenue:
Rental		$	31,100			$	33,605			$	33,672			$	28,588			$	27,046			$	29,222			$	29,782			$	114,638
Related party revenue:
Syndication fees			517				2,973				533				121				541				20				1,862				2,544
Transaction fees			691				2,685				470				146				753				246				1,582				2,727
Management fees and interest income from loans			808				1,150				1,037				533				559				630				719				2,441
Other			6				7				7				9				6				20				54				89
Total revenue			33,122				40,420				35,719				29,397				28,905				30,138				33,999				122,439
Expenses:
Real estate operating expenses			8,730				8,765				9,328				7,949				7,335				8,714				9,602				33,600
Real estate taxes and insurance			4,759				5,228				5,020				4,973				4,038				4,636				4,430				18,077
Depreciation and amortization			10,783				12,067				12,389				8,461				8,485				9,655				9,729				36,330
Selling, general and administrative			2,368				2,396				2,414				2,171				2,559				2,074				2,482				9,286
Commissions			288				1,555				349				114				336				16				1,011				1,477
Interest			2,408				3,578				3,419				1,652				1,735				1,892				2,004				7,283
Total expenses			29,336				33,589				32,919				25,320				24,488				26,987				29,258				106,053
Income before interest income, equity in earnings of non-consolidated REITs and taxes			3,786				6,831				2,800				4,077				4,417				3,151				4,741				16,386
Interest income			11				9				8				8				9				4				4				25
Equity in earnings of non-consolidated REITs			968				1,166				573				253				380				404				229				1,266
			4,765				8,006				3,381				4,338				4,806				3,559				4,974				17,677
Income tax expense (benefit)			50				68				67				(68	)			5				(37	)			317				217
Income from continuing operations			4,715				7,938				3,314				4,406				4,801				3,596				4,657				17,460
Income from discontinued operations			459				97				—				1,156				1,153				1,161				1,163				4,633
Gain on sale of assets			19,593				2,346				—				—				—				—				—				—
Net income		$	24,767			$	10,381			$	3,314			$	5,562			$	5,954			$	4,757			$	5,820			$	22,093
Weighted average number of shares outstanding, basic and diluted			81,437				81,437				81,600				79,681				79,681				79,751				80,187				79,826
Earnings per share, basic and diluted, attributable to:
Continuing operations		$	0.06			$	0.10			$	0.04			$	0.06			$	0.06			$	0.05			$	0.06			$	0.22
Discontinued operations			0.01				—				—				0.01				0.01				0.01				0.01				0.06
Gains on sales of assets			0.24				0.03				—				—				—				—				—				—
Net income per share, basic and diluted		$	0.30			$	0.13			$	0.04			$	0.07			$	0.07			$	0.06			$	0.07			$	0.28

 

 

 

 

* See page 28 for a reconciliation of Net Income to FFO and FFO+GOS (Total Profits) and page 29 for definitions of FFO and FFO+GOS

 

 

		March 31,				June 30,				September 30,				March 31,				June 30,				September 30,				December 31,
		2011				2011				2011				2010				2010				2010				2010
Assets:
Real estate assets:
Land		$	129,800			$	129,800			$	134,711			$	101,322			$	109,950			$	109,950			$	121,720
Buildings and improvements			978,876				982,821				1,006,814				779,033				795,515				799,339				863,317
Fixtures and equipment			600				726				761				354				458				458				578
			1,109,276				1,113,347				1,142,286				880,709				905,923				909,747				985,615
Less accumulated depreciation			129,716				137,216				145,028				102,300				107,865				113,458				122,917
Real estate assets, net			979,560				976,131				997,258				778,409				798,058				796,289				862,698
Acquired real estate leases, net			85,290				81,455				91,585				30,822				45,871				43,185				40,578
Investment in non-consolidated REITs			88,652				88,654				88,225				91,787				90,782				89,995				89,327
Assets held for syndication, net			47,630				11,206				4,720				2,791				—				—				2,976
Assets held for sale			5,108				—				—				148,472				147,225				145,981				74,947
Cash and cash equivalents			49,488				28,881				44,047				22,815				21,487				20,554				68,213
Restricted cash			440				459				477				50				59				55				420
Tenant rent receivables, net			1,688				1,846				1,418				1,385				900				2,123				1,922
Straight-line rent receivable, net			20,838				23,745				26,067				13,584				14,153				15,183				18,752
Prepaid expenses			1,400				1,255				2,553				2,236				2,280				2,511				1,654
Related party mortgage loan receivable			60,116				61,916				61,916				41,325				46,270				53,756				57,684
Other assets			6,339				6,237				5,219				1,220				1,620				1,387				1,188
Deferred leasing commissions, net			20,353				21,979				22,299				15,652				16,494				16,540				18,376
Total assets		$	1,366,902			$	1,303,764			$	1,345,784			$	1,150,548			$	1,185,199			$	1,187,559			$	1,238,735
Liabilities and Stockholders’ Equity:
Liabilities:
Bank note payable		$	404,000			$	345,000			$	375,000			$	119,968			$	162,968			$	167,968			$	209,968
Term loan payable			—				—				—				75,000				75,000				75,000				74,850
Accounts payable and accrued expenses			20,562				21,431				28,258				20,467				18,766				25,064				22,435
Accrued compensation			603				1,070				1,383				274				1,040				1,334				1,803
Tenant security deposits			2,533				2,476				2,453				1,696				2,004				1,922				1,930
Other liabilities: derivative termination value			828				447				63				1,995				1,735				1,416				1,077
Acquired unfavorable real estate leases, net			7,275				6,950				6,627				3,371				4,834				4,568				5,114
Total liabilities			435,801				377,374				413,784				222,771				266,347				277,272				317,177
Commitments and contingencies
Stockholders’ Equity:
Preferred stock			—				—				—				—				—				—				—
Common stock			8				8				8				8				8				8				8
Additional paid-in capital			1,025,491				1,025,491				1,042,876				1,003,712				1,003,712				1,005,211				1,025,491
Accumulated other comprehensive loss			(828	)			(447	)			(63	)			(1,995	)			(1,735	)			(1,416	)			(1,077	)
Accumulated distributions in excess of accumulated earnings			(93,570	)			(98,662	)			(110,821	)			(73,948	)			(83,133	)			(93,516	)			(102,864	)
Total stockholders’ equity			931,101				926,390				932,000				927,777				918,852				910,287				921,558
Total liabilities and stockholders’ equity		$	1,366,902			$	1,303,764			$	1,345,784			$	1,150,548			$	1,185,199			$	1,187,559			$	1,238,735

 

 

		Nine Months ended September 30,								Twelve Months ended December 31
		2011				2010				2010				2009				2008
Cash flows from operating activities:
Net income		$	38,462			$	16,273			$	22,093			$	27,872			$	31,959
Adjustments to reconcile net income to net cash         provided by  operating activities:
Gains on assets sold			(21,939	)			—				—				(424	)			—
Depreciation and amortization expense			36,563				29,078				39,627				36,561				30,444
Amortization of above market lease			(119	)			1,243				1,362				3,359				4,283
Equity in earnings (losses) from non-consolidated REITs			(2,805	)			(1,037	)			(1,183	)			(2,012	)			(2,747	)
Distributions from non-consolidated REITs			4,086				3,923				5,170				5,628				5,348
Increase in bad debt reserve			(365	)			920				980				111				79
Changes in operating assets and liabilities:
Restricted cash			(57	)			279				(86	)			2				—
Tenant rent receivables			869				(1,261	)			(1,120	)			(564	)			64
Straight-line rents			(7,404	)			(2,961	)			(4,249	)			(1,879	)			(1,406	)
Prepaid expenses and other assets			116				(126	)			865				907				(901	)
Accounts payable and accrued expenses			4,131				615				(351	)			2,760				448
Accrued compensation			(420	)			(82	)			387				(238	)			90
Tenant security deposits			523				114				122				(66	)			—
Payment of deferred leasing commissions			(6,710	)			(7,894	)			(10,515	)			(2,659	)			(3,353	)
Net cash provided by operating activities			44,931				39,084				53,102				69,358				64,308
Cash flows from investing activities:
Purchase of real estate assets, office computers and furniture, capitalized merger costs and acquired real estate leases			(214,275	)			(48,659	)			(54,344	)			(132,323	)			(78,396	)
Investment in non-consolidated REITs			(10	)			(2	)			(11	)			(13,218	)			(10	)
Investment in related party mortgage loan receivable			(4,232	)			(17,221	)			(21,149	)			(35,410	)			(1,125	)
Changes in deposits on real estate assets			200				—				(200	)			—				(1,300	)
Investment in assets held for syndication, net			(2,427	)			4,858				1,319				8,159				12,236
Proceeds received on sales of real estate assets			96,790				—				—				672				—
Net cash used in investing activities			(123,954	)			(61,024	)			(74,385	)			(172,120	)			(68,595	)
Cash flows from financing activities:
Distributions to stockholders			(46,419	)			(45,418	)			(60,586	)			(55,313	)			(70,481	)
Proceeds (costs) from equity offering, net			17,465				1,548				21,868				114,695				—
Borrowings under New Revolver, net			375,000				58,960				—				—				—
Borrowings (repayments) under Revolver			(209,968	)			—				100,960				41,540				(17,282	)
Borrowing (repayment) of term loan payable, net			(74,850	)			—				(150	)			—				75,000
Deferred Financing Costs			(5,389	)			—				—				—				(694	)
Swap termination payment			(982	)			—				—				—				—
Net cash provided by (used in) financing activities			54,857				15,090				62,092				100,922				(13,457	)
Net decreases in cash and cash equivalents			(24,166	)			(6,850	)			40,809				(1,840	)			(17,744	)
Cash and cash equivalents, beginning of period			68,213				27,404				27,404				29,244				46,988
Cash and cash equivalents, end of period		$	44,047			$	20,554			$	68,213			$	27,404			$	29,244

 

 

		Three Months Ended September 30, 2011												Three Months Ended  September 30, 2010												Nine Months Ended September 30, 2011												Nine Months Ended September 30, 2010
		Real				Investment								Real				Investment								Real				Investment								Real				Investment
		Estate				Banking				Total				Estate				Banking				Total				Estate				Banking				Total				Estate				Banking				Total
Revenue:
Rental Income		$	33,672			$	—			$	33,672			$	29,222			$	—			$	29,222			$	98,377			$	—			$	98,377			$	84,855			$	—			$	84,855
Syndication Fees			—				533				533				—				21				21				—				4,023				4,023				—				682				682
Transaction Fees			—				470				470				—				246				246				—				3,846				3,846				—				1,145				1,145
Management Fees & Interest Income			1,037				—				1,037				629				—				629				2,995				—				2,995				1,721				—				1,721
Other Income			7				—				7				20				—				20				20				—				20				35				—				35
Total Revenue			34,716				1,003				35,719				29,871				267				30,138				101,392				7,869				109,261				86,611				1,827				88,438
Expenses
Rental Operating Expenses			9,328				—				9,328				8,716				(2	)			8,714				26,823				—				26,823				23,998				—				23,998
Real Estate Taxes and Insurance			5,020				—				5,020				4,636				—				4,636				15,007				—				15,007				13,646				—				13,646
Depreciaton and Amortization			12,351				38				12,389				9,589				66				9,655				35,126				113				35,239				26,462				138				26,600
Selling, general and administrative			1,655				759				2,414				1,400				674				2,074				4,900				2,278				7,178				4,700				2,104				6,804
Commissions and  Broker Expenses			—				349				349				—				16				16				—				2,192				2,192				—				466				466
Interest & Commitment Fees			3,419				—				3,419				1,892				—				1,892				9,405				—				9,405				5,280				—				5,280
Total Expenses			31,773				1,146				32,919				26,233				754				26,987				91,261				4,583				95,844				74,086				2,708				76,794
Income before Equity, Interest and Taxes			2,943				(143	)			2,800				3,638				(487	)			3,151				10,131				3,286				13,417				12,525				(881	)			11,644
Interest Income			4				4				8				4				—				4				19				9				28				20				1				21
Equity Income SARs			573				—				573				404				—				404				2,707				—				2,707				1,037				—				1,037
Income before Taxes			3,520				(139	)			3,381				4,046				(487	)			3,559				12,857				3,295				16,152				13,582				(880	)			12,702
Income Taxes			67				—				67				49				(86	)			(37	)			185				—				185				162				(263	)			(101	)
Income from continuing operations			3,453				(139	)			3,314				3,997				(401	)			3,596				12,672				3,295				15,967				13,420				(617	)			12,803
Income from discontinued operations			—				—				—				1,161				—				1,161				556				—				556				3,470				—				3,470
Gain on sale of assets			—				—				—				—				—				—				21,939				—				21,939				—				—				—
Net Income (loss)		$	3,453			$	(139	)		$	3,314			$	5,158			$	(401	)		$	4,757			$	35,167			$	3,295			$	38,462			$	16,890			$	(617	)		$	16,273
Funds From Operations (FFO)*
Net Income		$	3,453			$	(139	)		$	3,314			$	5,158			$	(401	)		$	4,757			$	35,167			$	3,295			$	38,462			$	16,890			$	(617	)		$	16,273
Gain on sale of assets, net			—				—				—				—				—				—				(21,939	)			—				(21,939	)			—				—				—
Equity in income of SARs			(573	)			—				(573	)			(404	)			—				(404	)			(3,511	)			—				(3,511	)			(1,037	)			—				(1,037	)
Cash received from SARs			1,104				—				1,104				1,192				—				1,192				4,086				—				4,086				3,923				—				3,923
Acquisition costs			185				—				185				(4	)			—				(4	)			463				—				463				125				—				125
Depreciation and amortization			12,294				38				12,332				10,445				66				10,511				35,078				113				35,191				29,982				138				30,120
Funds From Operations (FFO)*			16,463				(101	)			16,362				16,387				(335	)			16,052				49,344				3,408				52,752				49,883				(479	)			49,404
EPS		$	0.04			$	—			$	0.04			$	0.07			$	(0.01	)		$	0.06			$	0.43			$	0.04			$	0.47			$	0.21			$	(0.01	)		$	0.20
FFO per Share*		$	0.20			$	—			$	0.20			$	0.21			$	(0.01	)		$	0.20			$	0.61			$	0.04			$	0.65			$	0.63			$	(0.01	)		$	0.62
Weighted Average Shares											81,600												79,751												81,492												79,704

 

*See page 28 for a reconciliation of Net Income to FFO and FFO+GOS and page 29 for definitions of FFO and FFO+GOS

 

 

		Year Ended December 31, 2010												Year Ended December 31, 2009												Year Ended December 31, 2008
						Investment												Investment												Investment
		Real Estate				Banking				Total				Real Estate				Banking				Total				Real Estate				Banking				Total
Revenue:
Rental Income		$	114,638			$	—			$	114,638			$	119,341			$	—			$	119,341			$	110,531			$	—			$	110,531
Syndication Fees			—				2,544				2,544				—				2,428				2,428				—				3,766				3,766
Transaction Fees			—				2,727				2,727				—				2,080				2,080				—				3,641				3,641
Management Fees & Interest Income			2,439				—				2,439				1,740				—				1,740				1,739				—				1,739
Other Income			89				—				89				61				—				61				72				—				72
Total Revenue			117,166				5,271				122,437				121,142				4,508				125,650				112,342				7,407				119,749
Expenses
Rental Operating Expenses			33,600				—				33,600				30,807				—				30,807				28,966				—				28,966
Real Estate Taxes and Insurance			18,077				—				18,077				18,892				—				18,892				17,655				—				17,655
Depreciaton and Amortization			36,156				173				36,329				35,303				123				35,426				30,078				138				30,216
Selling, general  and administrative			6,399				2,887				9,286				4,452				4,062				8,514				4,229				4,039				8,268
Commissions and  Broker Expenses			—				1,477				1,477				—				1,801				1,801				100				2,051				2,151
Interest & Commitment Fees			7,283				—				7,283				6,570				—				6,570				4,921				—				4,921
Total Expenses			101,515				4,537				106,052				96,024				5,986				102,010				85,949				6,228				92,177
Income before Equity, Interest and Taxes			15,651				734				16,385				25,118				(1,478	)			23,640				26,393				1,179				27,572
Interest Income			24				1				25				92				4				96				709				36				745
Equity Income SARs			1,266				—				1,266				1,994				—				1,994				2,747				—				2,747
Income before Taxes			16,941				735				17,676				27,204				(1,474	)			25,730				29,849				1,215				31,064
Income Taxes			217				—				217				248				(827	)			(579	)			246				(736	)			(490	)
Income from continuing operations			16,724				735				17,459				26,956				(647	)			26,309				29,603				1,951				31,554
Income from discontinued operations			4,634				—				4,634				1,139				—				1,139				405				—				405
Gain on sale of assets			—				—				—				424				—				424				—				—				—
Net Income		$	21,358			$	735			$	22,093			$	28,519			$	(647	)		$	27,872			$	30,008			$	1,951			$	31,959
Funds From Operations (FFO)*
Net Income		$	21,358			$	735			$	22,093			$	28,519			$	(647	)		$	27,872			$	30,008			$	1,951			$	31,959
Gain on sale of assets, net			—				—				—				(424	)			—				(424	)			—				—				—
Equity in income of SARs			(1,190	)			—				(1,190	)			(2,012	)			—				(2,012	)			(2,747	)			—				(2,747	)
Cash received from SARs			5,170				—				5,170				5,628				—				5,628				5,348				—				5,348
Acquisition costs			125				—				125				643				—				643				—				—				—
Depreciation and amortization			40,551				173				40,724				39,529				123				39,652				34,505				138				34,643
Funds From Operations (FFO)*			66,014				908				66,922				71,883				(524	)			71,359				67,114				2,089				69,203
EPS		$	0.27			$	0.01			$	0.28			$	0.39			$	(0.01	)		$	0.38			$	0.43			$	0.03			$	0.45
FFO per Share*		$	0.83			$	0.01			$	0.84			$	0.99			$	(0.01	)		$	0.98			$	0.95			$	0.03			$	0.98
Weighted Average Shares											79,826												73,001												70,481

 

*See page 28 for a reconciliation of Net Income to FFO and FFO+GOS and page 29 for definitions of FFO and FFO+GOS

 

 

Property NOI Cash*

									Three Months Ended												Three Months Ended																Year
					30-Sep-11																																Ended
Region		Division			Sq Feet				31-Mar-11				30-Jun-11				30-Sep-11				31-Mar-10				30-Jun-10				30-Sep-10				31-Dec-10				2010
Eastern		Mideast				1,441			$	3,476			$	3,840			$	3,573			$	4,031			$	4,390			$	5,551			$	4,931			$	18,903
Midwest		East North Central				792				1,586				1,057				1,116				1,103				1,574				1,184				1,123				4,984
		West North Central				1,102				2,405				2,909				3,010				2,034				2,000				2,991				3,028				10,053
						1,894				3,991				3,966				4,126				3,137				3,574				4,175				4,151				15,037
South		Southeast				600				2,068				2,023				2,027				2,307				2,251				2,285				1,917				8,760
		Southwest				1,906				3,747				4,907				5,399				4,234				4,238				3,597				3,564				15,633
						2,506				5,815				6,930				7,426				6,541				6,489				5,882				5,481				24,393
West		Mountain				790				922				1,311				1,144				3,254				2,212				810				894				7,170
		Pacific				299				518				523				518				443				491				498				480				1,912
						1,089				1,440				1,834				1,662				3,697				2,703				1,308				1,374				9,082
Total						6,930			$	14,722			$	16,570			$	16,787			$	17,406			$	17,156			$	16,916			$	15,937			$	67,415

 

Property NOI GAAP*

									Three Months Ended												Three Months Ended																Year
					30-Sep-11																																Ended
Region		Division			Sq Feet				31-Mar-11				30-Jun-11				30-Sep-11				31-Mar-10				30-Jun-10				30-Sep-10				31-Dec-10				2010
Eastern		Mideast				1,441			$	4,007			$	4,486			$	4,427			$	4,666			$	5,002			$	5,992			$	5,362			$	21,022
Midwest		East North Central				792				1,552				1,027				1,164				1,110				1,602				1,210				1,166				5,088
		West North Central				1,102				2,886				2,986				3,040				2,164				2,106				3,136				3,135				10,541
						1,894				4,438				4,013				4,204				3,274				3,708				4,346				4,301				15,629
South		Southeast				600				1,572				2,093				2,117				2,356				2,355				2,359				2,033				9,103
		Southwest				1,906				4,629				6,558				6,173				4,404				4,395				3,797				3,778				16,374
						2,506				6,201				8,651				8,290				6,760				6,750				6,156				5,811				25,477
West		Mountain				790				1,162				1,715				1,494				3,229				2,502				1,100				1,231				8,062
		Pacific				299				555				577				600				497				533				524				513				2,067
						1,089				1,717				2,292				2,094				3,726				3,035				1,624				1,744				10,129
Total						6,930			$	16,363			$	19,442			$	19,015			$	18,426			$	18,495			$	18,118			$	17,218			$	72,257

 

*See page 31 for a reconciliation and definition of Net Income to Property NOI cash and Property NOI GAAP.

 

 

		31-Mar-11				30-Jun-11				30-Sep-11				31-Mar-10				30-Jun-10				30-Sep-10				31-Dec-10
Market Data:
Shares Outstanding			81,437				81,437				82,937				79,681				79,681				79,837				81,437
Closing market price per share		$	14.07			$	12.91			$	11.31			$	14.43			$	11.81			$	12.42			$	14.25
Market capitalization		$	1,145,824			$	1,051,357			$	938,022			$	1,149,793			$	941,029			$	991,581			$	1,160,483
Total Debt			404,000				345,000				375,000				194,968				237,968				242,968			$	284,118
Total Market Capitalization		$	1,549,824			$	1,396,357			$	1,313,022			$	1,344,761			$	1,178,997			$	1,234,549			$	1,444,601
Dividend Data:
Total dividends paid		$	15,473			$	15,473			$	15,473			$	15,139			$	15,139			$	15,139			$	15,169
Common dividend per share		$	0.19			$	0.19			$	0.19			$	0.19			$	0.19			$	0.19			$	0.19
Quarterly dividend as a % of FFO*			95%				76%				95%				90%				90%				95%				86%
Liquidity:
Cash and cash equivalents		$	49,488			$	28,881			$	44,047			$	22,815			$	21,487			$	20,554			$	68,213
Revolving credit facilities:
Gross potential available under current credit facilities			500,000				600,000				600,000				250,000				250,000				250,000				250,000
Less:
Outstanding balance			(404,000	)			(345,000	)			(375,000	)			(119,968	)			(162,968	)			(167,968	)			(209,968	)
Total Liquidity		$	145,488			$	283,881			$	269,047			$	152,847			$	108,519			$	102,586			$	108,245

 

*See page 28 for a reconciliation of Net Income to FFO and FFO+GOS and page 29 for definitions of FFO and FFO+GOS

 

 

Property by Form of FSP Participation

 

	30-Sep-11	30-Jun-11	31-Mar-11	31-Dec-10	30-Sep-10	30-Jun-10	31-Mar-10
Owned portfolio of commercial real estate:
Number of properties (1)	35	34	35	33	33	33	32
Square feet	6,929,891	6,747,815	6,845,176	6,422,357	6,417,299	6,418,835	5,942,299
Leased percentage	88%	87%	88%	86%	82%	85%	85%
Investments in non-consolidated commercial real estate:
Number of properties	3	3	3	3	3	3	3
Square feet	1,998,575	1,996,457	1,995,932	1,995,913	1,998,519	1,998,519	1,995,041
Leased percentage	83%	82%	85%	77%	76%	77%	78%
Single Asset REITs (SARs) managed:
Number of properties	13	13	13	12	11	11	11
Square feet *	3,322,638	3,322,569	3,325,694	2,915,896	2,702,287	2,406,370	2,406,370
Leased percentage*	80%	79%	79%	75%	73%	76%	76%
Total owned, investments and managed properties:
Number of properties	51	50	51	48	47	47	46
Square feet *	12,251,104	12,066,841	12,166,802	11,334,166	11,118,105	10,823,724	10,343,710
Leased percentage*	85%	84%	85%	81%	79%	82%	82%

 

(1) Includes asset held for sale for 12/31/10 and prior periods

*Prior to September 30, 2010, excludes a property that completed construction on July 9, 2010 with approximately 295,891 square feet

 

 

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	298,692
East Baltimore	Baltimore	MD	East	325,445
Loudoun Tech Center	Dulles	VA	East	135,888
Southfield Centre	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	472,178
Blue Lagoon Drive	Miami	FL	South	212,619
One Overton Place	Atlanta	GA	South	387,267
Willow Bend Office Center	Plano	TX	South	116,622
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
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	110,730
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				6,929,891
Managed:
Name	City	State	Region	Square Feet
1441 Main Street	Columbia	SC	East	264,857
303 East Wacker Drive	Chicago	IL	MidWest	844,953
Monument Circle	Indianapolis	IN	MidWest	213,609
505 Waterford	Plymouth	MN	MidWest	256,417
50 South Tenth Street	Minneapolis	MN	MidWest	498,768
Grand Boulevard	Kansas City	MO	MidWest	533,999
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	325,796
Phoenix Tower	Houston	TX	South	619,623
Highland Place I	Centennial	CO	West	139,142
385 Interlocken	Broomfield	CO	West	295,891
Total				5,321,213

 

Properties by Division/Region
($ in thousands)
							NBV (a)		% Leased
	# of Properties		Square Feet		% of Portfolio		30-Sep-11		30-Sep-11
East Region Total	8		1,441,324		20.8%		$     225,162		85.8%
East North Central Division	4		791,849		11.4%		101,008		80.6%
West North Central	5		1,101,947		15.9%		106,768		95.3%
Midwest Region Total	9		1,893,796		27.3%		207,776		89.1%
Southeast	2		599,886		8.7%		118,315		93.8%
Southwest	9		1,905,679		27.5%		286,147		92.8%
South Region Total	11		2,505,565		36.2%		404,463		93.0%
Mountain	4		789,957		11.4%		123,866		78.4%
Pacific	3		299,249		4.3%		35,991		77.3%
West Region Total	7		1,089,206		15.7%		159,857		78.1%
Grand Total	35		6,929,891		100.0%		$     997,258		88.1%

 

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

 

 

 

 

 

						NBV (1)	% Leased
Region	Division	Name	City	State	S.F.	30-Sep-11	30-Sep-11
West	Pacific	Hillview Center	Milpitas	CA	36	4,119	100.0%
West	Pacific	Montague	San Jose	CA	146	17,499	100.0%
West	Mountain	380 Interlocken	Broomfield	CO	240	42,249	85.1%
West	Mountain	390 Interlocken	Broomfield	CO	242	42,067	96.6%
West	Mountain	Centennial Technology Center	Colorado Springs	CO	111	11,154	66.9%
West	Mountain	Greenwood Plaza	Englewood	CO	197	28,395	54.3%
South	Southeast	Blue Lagoon Drive	Miami	FL	213	46,097	100.0%
South	Southeast	One Overton Place	Atlanta	GA	387	72,218	90.4%
MidWest	East North Central	Northwest Point	Elk Grove Village	IL	177	27,816	100.0%
MidWest	East North Central	909 Davis	Evanston	IL	195	23,140	94.8%
MidWest	East North Central	River Crossing	Indianapolis	IN	205	34,937	93.5%
East	Mideast	East Baltimore	Baltimore	MD	325	54,702	55.7%
MidWest	East North Central	Southfield Centre	Southfield	MI	215	15,115	39.2%
MidWest	West North Central	Eden Bluff	Eden Prairie	MN	153	14,180	100.0%
MidWest	West North Central	121 South 8th Street	Minneapolis	MN	472	23,947	93.6%
MidWest	West North Central	Timberlake	Chesterfield	MO	233	34,282	97.7%
MidWest	West North Central	Timberlake East	Chesterfield	MO	116	17,442	85.9%
MidWest	West North Central	Lakeside Crossing	Maryland Heights	MO	128	16,918	100.0%
East	Mideast	Park Seneca	Charlotte	NC	109	7,396	80.9%
East	Mideast	Forest Park	Charlotte	NC	62	6,102	100.0%
East	Mideast	Emperor Boulevard	Durham	NC	259	55,660	100.0%
South	Southwest	Addison Circle	Addison	TX	294	47,031	95.8%
South	Southwest	Liberty Plaza	Addison	TX	219	24,053	68.6%
South	Southwest	Park Ten	Houston	TX	156	18,116	98.8%
South	Southwest	Eldridge Green	Houston	TX	248	42,662	100.0%
South	Southwest	Park Ten Phase II	Houston	TX	157	30,287	100.0%
South	Southwest	Willow Bend Office Center	Plano	TX	117	17,979	83.1%
South	Southwest	Legacy Tennyson Center	Plano	TX	203	24,801	100.0%
South	Southwest	One Legacy Circle	Plano	TX	214	38,729	100.0%
South	Southwest	Collins Crossing	Richardson	TX	299	42,490	88.4%
East	Mideast	Meadow Point	Chantilly	VA	139	23,226	100.0%
East	Mideast	Stonecroft	Chantilly	VA	111	19,066	100.0%
East	Mideast	Loudoun Tech Center	Dulles	VA	136	17,162	100.0%
East	Mideast	Innsbrook	Glen Allen	VA	299	41,849	86.8%
West	Pacific	Federal Way	Federal Way	WA	117	14,373	42.0%
					6,930	$    997,258	88.1%

 

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

 

 

													Percentage		Annualized		Average
							Year Built						Leased as of		Rent as of		Annualized
							or		Net Rentable		Leased		September 30,		September 30,		Rent per Leased
Property Name		City		State	Type		Renovated		Square Feet		Sq. Ft.		2011 (a)		2011 (b)		Square Feet (c)
Park Seneca		Charlotte		NC	Office		1969		109,550		88,643		80.9%		1,395,679		$     15.74
Forest Park		Charlotte		NC	Office		1999		62,212		62,212		100.0%		768,213		12.35
Meadow Point		Chantilly		VA	Office		1999		138,537		138,537		100.0%		3,504,284		25.29
Innsbrook		Glen Allen		VA	Office		1999		298,692		259,337		86.8%		532,434		2.05
East Baltimore		Baltimore		MD	Office		1989		325,445		181,298		55.7%		4,475,648		24.69
Loudoun Tech Center		Dulles		VA	Office		1999		135,888		135,888		100.0%		1,788,430		13.16
Stonecroft		Chantilly		VA	Office		2008		111,469		111,469		100.0%		4,035,422		36.20
Emperor Boulevard		Durham		NC	Office		2009		259,531		259,531		100.0%		8,190,181		31.56
East total									1,441,324		1,236,915		85.8%		24,690,290		19.96
Southfield Centre		Southfield		MI	Office		1977		214,697		84,205		39.2%		973,159		11.56
Northwest Point		Elk Grove Village		IL	Office		1999		176,848		176,848		100.0%		3,511,335		19.86
909 Davis Street		Evanston		IL	Office		2002		195,245		185,125		94.8%		6,884,803		37.19
River Crossing		Indianapolis		IN	Office		1998		205,059		191,769		93.5%		3,433,015		17.90
Timberlake		Chesterfield		MO	Office		1999		232,766		227,292		97.7%		4,378,988		19.27
Timberlake East		Chesterfield		MO	Office		2000		116,197		99,801		85.9%		2,438,149		24.43
Lakeside Crossing		Sl. Louis		MO	Office		2008		127,778		127,778		100.0%		3,153,561		24.68
Eden Bluff		Eden Praire		MN	Office		2006		153,028		153,028		100.0%		3,984,757		26.04
121 South 8th Street		Minneapolis		MN	Office		1974		472,178		441,730		93.6%		6,729,972		15.24
Midwest total									1,893,796		1,687,576		89.1%		35,487,740		21.03
Blue Lagoon Drive		Miami		FL	Office		2002		212,619		212,619		100.0%		4,440,795		20.89
One Overton Place		Atlanta		GA	Office		2002		387,267		350,039		90.4%		6,884,808		19.67
Willow Bend Office Center		Plano		TX	Office		1999		116,622		96,912		83.1%		928,717		9.58
Park Ten		Houston		TX	Office		1999		155,715		153,820		98.8%		2,833,449		18.42
Addison Circle		Addison		TX	Office		1999		293,787		281,503		95.8%		6,849,104		24.33
Collins Crossing		Richardson		TX	Office		1999		298,766		264,010		88.4%		2,397,648		9.08
Eldridge Green		Houston		TX	Office		1999		248,399		248,399		100.0%		7,150,326		28.79
Park Ten Phase II		Houston		TX	Office		2006		156,746		156,746		100.0%		4,197,749		26.78
Liberty Plaza		Addison		TX	Office		1985		218,934		150,074		68.6%		2,578,375		17.18
Denbury Park		Plano		TX	Office		1999/2008		202,600		202,600		100.0%		3,440,040		16.98
One Legacy Circle		Plano		TX	Office		2008		214,110		214,110		100.0%		5,688,449		26.57
South Total									2,505,565		2,330,832		93.0%		47,389,459		20.33
Centennial Technology Center		Colorado Springs		CO	Office		1999		110,730		74,030		66.9%		1,284,850		17.36
380 Interlocken		Broomfield		CO	Office		2000		240,184		204,347		85.1%		5,534,966		27.09
Greenwood Plaza		Englewood		CO	Office		2000		197,527		107,157		54.3%		596,529		5.57
390 Interlocken		Broomfield		CO	Office		2002		241,516		233,410		96.6%		6,264,859		26.84
Hillview Center		Milpitas		CA	Office		1984		36,288		36,288		100.0%		538,494		14.84
Federal Way		Federal Way		WA	Office		1982		117,010		49,149		42.0%		664,155		13.51
Montague Business Center		San Jose		CA	Office		1982		145,951		145,951		100.0%		2,217,622		15.19
West Total									1,089,206		850,332		78.1%		17,101,476		20.11
Grand Total									6,929,891		6,105,655		88.1%		$      124,668,965		$     20.42

 

(a)

Based on all leases in effect, including month-to-month tenants, divided by the Property's net rentable square footage.

(b)

Represents gross rental charges for the month of September 2011 (including month-to-month leases) multiplied by 12, which can result in unusual per square foot amounts calculated when there are free rent periods (usually with new leases).

(c)

Represents the annualized rent as of September 2011 divided by leased square feet.

 

 

														Nine Months
		For the Three Months Ended												Ended
		31-Mar-11				30-Jun-11				30-Sep-11				30-Sep-11
Tenant improvements		$	2,506			$	3,215			$	5,092			$	10,813
Deferred leasing costs			2,819				2,567				1,324				6,710
Building improvements			449				876				754				2,079
Total		$	5,774			$	6,658			$	7,170			$	19,602

 

																		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

 

																		Year
		For the Three Months Ended																Ended
		31-Mar-08				30-Jun-08				30-Sep-08				31-Dec-08				31-Dec-08
Tenant improvements		$	2,337			$	560			$	1,667			$	823			$	5,387
Deferred leasing costs			817				1,313				305				919				3,354
Building improvements			197				372				740				419				1,728
Total		$	3,351			$	2,245			$	2,712			$	2,161			$	10,469

 

 

			Remaning	Aggregate	% of Aggregate	Annualized	% of
	Tenant	Number of	Lease Term	Leased	Leased	Rent (1)	Aggregate
	Name	Leases	in Months	Square Feet	Square Feet	(in 000's)	Annualized Rent
1	TCF National Bank	2	51	267,470	3.86%	$     2,883,511	2.31%
2	Quintiles Transnational Corporation	1	90	259,531	3.75%	8,143,405	6.53%
3	CITGO Petroleum Corporation	1	125	248,399	3.58%	7,150,326	5.74%
4	Burger King Corporation	1	84	212,619	3.07%	4,440,795	3.56%
5	Denbury Onshore, LLC	2	58	202,600	2.92%	3,440,040	2.76%
6	RGA Reinsurance Company	2	39	185,501	2.68%	3,870,017	3.10%
7	Citicorp Credit Services, Inc	1	63	176,848	2.55%	3,511,335	2.82%
8	C.H. Robinson Worldwide, Inc	1	117	153,028	2.21%	3,984,757	3.20%
9	SunTrust Bank	2	61, 120	150,142	2.17%	1,392,682	1.12%
10	Houghton Mifflin Company	1	66	150,050	2.17%	5,561,713	4.46%
11	Murphy Exploration & Production Company	1	67	144,677	2.09%	3,914,253	3.14%
12	Giesecke & Devrient America, Inc	1	41	135,888	1.96%	1,788,430	1.43%
13	Monsanto Company	1	40	127,778	1.84%	3,153,561	2.53%
14	Vail Holdings, Inc (a)	1	3 ,90, 138	125,313	1.81%	3,402,701	2.73%
15	Argo Data Resource Corporation (b)	1	3, 80	111,687	1.61%	2,096,330	1.68%
16	Northrop Grumman Systems Corporation	1	79	111,469	1.61%	4,035,422	3.24%
17	Alliance Data Systems	1	108, 117	96,749	1.40%	2,437,686	1.96%
18	Federal National Mortgage Association	1	23	92,358	1.33%	1,847,160	1.48%
19	Amdocs, Inc. (c)	1	8, 63	91,928	1.33%	1,746,632	1.40%
20	County of Santa Clara	1	111	90,467	1.31%	1,380,732	1.11%
		Total Square Footage		3,134,502	45.23%	$    70,181,487	56.29%

 

(1)

Annualized rent represents the monthly rent, including tenant reimbursements, for each lease in effect at September 30, 2011 multiplied by 12. Tenant reimbursements generally include payment of real estate taxes, operating expenses and common area maintenance and utility charges.

 

(a) Vail Holdings temporarily leased 3,400 sf to expire 12/31/11

(b) Argo Data temporarily leased 1,697 sf to expire 12/31/11

(c) Amdocs, Inc. provided notice to contract 10,388 sf as of 5/31/12

 

 

 

 

 

 

 

 

 

 

Year		Total Square Feet		% of Square Feet Commercial
2011		123,479		1.8%
2012		325,061		4.7%
2013		419,885		6.1%
2014		432,333		6.2%
2015		798,433		11.5%
2016		902,286		13.0%
2017		682,776		9.8%
2018		530,826		7.7%
2019		629,407		9.1%
2020		163,844		2.4%
2021		559,875		8.1%
2022		451,335		6.5%
2023		86,115		1.2%
Vacant		824,236		11.9%
Total		6,929,891		100.0%

 

 

				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
2011	50	(b)		123,479		1,388,047		11.24		1.11%
2012	72			325,061		6,729,594		20.70		5.40%
2013	47			419,885		9,635,455		22.95		7.73%
2014	40			432,333		7,546,668		17.46		6.05%
2015	34			798,433		16,845,207		21.10		13.51%
2016	29			902,286		16,480,970		18.27		13.22%
2017	19			682,776		17,092,528		25.03		13.71%
2018	11			530,826		12,716,198		23.96		10.20%
2019	10			629,407		13,198,374		20.97		10.59%
2020 and thereafter	24			1,261,169		23,035,924		18.27		18.48%
	336			6,105,655		124,668,965		20.42		100.00%
Vacancies as of 9/30/11				824,236
Total Portfolio Square Footage				6,929,891

 

(a)

Annualized rent represents the monthly rent, including tenant reimbursements, for each lease in effect at September 30, 2011 multiplied by 12. Tenant reimbursements generally include payment of real estate taxes, operating expenses and common area maintenance and utility charges.

 

(b)

44 leases are Month to Month

 

 

					First		Second		Third
				% Leased (1)	Quarter	% Leased (1)	Quarter	% Leased (1)	Quarter
				as of	Average %	as of	Average %	as of	Average %
	Property Name	Location	Square Feet	31-Mar-11	Leased (2)	30-Jun-11	Leased (2)	30-Sep-11	Leased (2)
1	PARK SENECA	Charlotte, NC	109,550	78.5%	78.5%	80.1%	79.1%	80.9%	80.5%
2	HILLVIEW CENTER	Milpitas, CA	36,288	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%
3	SOUTHFIELD	Southfield, MI	214,697	61.1%	61.0%	39.2%	41.7%	39.2%	39.2%
4	FOREST PARK	Charlotte, NC	62,212	77.5%	77.5%	100.0%	85.0%	100.0%	100.0%
5	CENTENNIAL	Colorado Springs, CO	110,730	66.9%	66.9%	66.9%	66.9%	66.9%	66.9%
6	MEADOW POINT	Chantilly, VA	138,537	100.0%	98.6%	100.0%	100.0%	100.0%	100.0%
7	TIMBERLAKE	Chesterfield, MO	232,766	97.7%	97.7%	97.7%	97.7%	97.7%	97.7%
8	FEDERAL WAY	Federal Way, WA	117,010	42.0%	38.5%	42.0%	42.0%	42.0%	42.0%
9	NORTHWEST POINT	Elk Grove Village, IL	176,848	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%
10	TIMBERLAKE EAST	Chesterfield, MO	116,197	100.0%	100.0%	100.0%	100.0%	85.9%	90.6%
11	PARK TEN	Houston, TX	155,715	98.8%	95.4%	98.8%	98.8%	98.8%	98.8%
12	MONTAGUE	San Jose, CA	145,951	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%
14	COLLINS CROSSING	Richardson, TX	298,766	79.1%	79.1%	79.7%	79.3%	88.4%	88.4%
15	GREENWOOD PLAZA	Englewood, CO	197,527	60.1%	60.1%	54.3%	58.2%	54.3%	54.3%
16	RIVER CROSSING	Indianapolis, IN	205,059	93.8%	93.8%	93.5%	93.4%	93.5%	93.5%
17	LIBERTY PLAZA	Addison, TX	218,934	75.6%	74.3%	75.6%	75.6%	68.6%	68.0%
18	INNSBROOK	Glen Allen, VA	298,692	60.8%	61.0%	63.7%	67.3%	86.8%	78.8%
19	380 INTERLOCKEN	Broomfield, CO	240,184	85.1%	85.1%	85.1%	85.1%	85.1%	85.1%
20	BLUE LAGOON	Miami, FLA	212,619	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%
22	WILLOW BEND	Plano, TX	116,622	67.0%	63.2%	83.1%	76.8%	83.1%	83.1%
23	ONE OVERTON PARK	Atlanta, GA	387,267	92.4%	92.4%	91.1%	91.5%	90.4%	90.6%
24	390 INTERLOCKEN	Broomfield, CO	241,516	95.9%	95.9%	95.9%	95.9%	96.6%	96.9%
25	EAST BALTIMORE	Baltimore, MD	325,445	84.5%	84.3%	55.7%	55.5%	55.7%	55.7%
26	PARK TEN PHASE II	Houston, TX	156,746	100.0%	99.1%	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%
28	LOUDOUN TECH	Dulles, VA	135,888	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%
30	EDEN BLUFF	Eden Prairie, MN	153,028	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%
31	121 SOUTH EIGHTH ST	Minneapolis, MN	472,178	92.2%	92.2%	92.5%	92.1%	93.6%	93.1%
32	EMPEROR BOULEVARD	Durham, NC	259,531	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%
34	ONE LEGACY	Plano, TX	214,110	89.7%	89.7%	100.0%	94.6%	100.0%	100.0%
35	909 DAVIS	Evanston, IL	195,245	n/a	n/a	n/a	n/a	94.8%	94.8%
	TOTAL WEIGHTED AVERAGE  (3)		6,929,891	88.4%	87.4%	86.9%	86.9%	88.1%	87.7%

 

(1) % Leased as of month's end includes all leases that expire on the last day of the quarter.

(2) Average quarterly percentage is the average of the end of the month leased percentage for each of the 3 months during the quarter.

(3) First & Second Quarter 2011 Totals include Bollman Place (98,745 sf) located in Maryland, which sold in June 2011.

 

 

Recent Acquisitions:

State/Region

Property Type

Square Feet

Date Acquired

Purchase Price

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

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

Bolman

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 three months ended																																For the year ended
		31-Mar-11				30-Jun-11				30-Sep-11				31-Mar-10				30-Jun-10				30-Sep-10				31-Dec-10				31-Mar-09				30-Jun-09				30-Sep-09				31-Dec-09				2010				2009
Net income		$	24,767			$	10,381			$	3,314			$	5,562			$	5,954			$	4,757			$	5,820			$	7,808			$	4,865			$	6,941			$	8,258			$	22,093			$	27,872
(Gain) Loss on sale of assets			(19,592	)			(2,346	)			—				—				—				—				—				—				—				—				(424	)			—				(424	)
GAAP income from non-consolidated REITs			(1,773	)			(1,166	)			(573	)			(253	)			(380	)			(404	)			(153	)			(792	)			(443	)			(475	)			(301	)			(1,190	)			(2,011	)
Distributions from non-consolidated REITs			1,767				1,215				1,104				1,407				1,324				1,192				1,247				1,615				1,523				1,119				1,371				5,170				5,628
Acquisition costs			269				9				185				—				129				(4	)			—				—				248				391				4				125				643
Depreciation & amortization			10,812				12,047				12,332				9,934				9,675				10,510				10,605				8,707				11,216				9,561				10,167				40,724				39,651
Funds From Operations (FFO)			16,250				20,140				16,362				16,650				16,702				16,051				17,519				17,338				17,409				17,537				19,075				66,922				71,359
Plus gains on sales of assets (GOS)			19,592				2,346				—				—				—				—				—				—				—				—				424				—				424
FFO+GOS (Total Profits)		$	35,842			$	22,486			$	16,362			$	16,650			$	16,702			$	16,051			$	17,519			$	17,338			$	17,409			$	17,537			$	19,499			$	66,922			$	71,783
Per Share Data:
EPS		$	0.30			$	0.13			$	0.04			$	0.07			$	0.07			$	0.06			$	0.07			$	0.11			$	0.07			$	0.10			$	0.10			$	0.28			$	0.38
FFO			0.20				0.25				0.20				0.21				0.21				0.20				0.22				0.25				0.25				0.25				0.24				0.84				0.98
GOS			0.24				0.03				—				—				—				—				—				—				—				—				—				—				—
FFO+GOS			0.44				0.28				0.20				0.21				0.21				0.20				0.22				0.25				0.25				0.25				0.24				0.84				0.98
Weighted Average Shares (basic and diluted)			81,437				81,437				81,600				79,681				79,681				79,751				80,187				70,481				70,481				71,281				79,681				79,826				73,001

 

 

Definition of Funds From Operations (“FFO”), and FFO plus Gains on Sales (“FFO+GOS”)

 

The Company evaluates the performance of its reportable segments based on several measures, including Funds From Operations (“FFO”) and FFO plus Gains on Sales (“FFO+GOS” or “Total Profits”), because management believes they represent important measures of activity and are an important consideration in determining distributions paid to equity holders. The Company defines FFO as net income (computed in accordance with generally accepted accounting principles, or 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 after adjustments to exclude non-cash income (or losses) from non-consolidated or Sponsored REITs, plus distributions received from non-consolidated or Sponsored REITs. The Company defines FFO+GOS as FFO as defined above, plus gains (or losses) from sales of properties and provisions for assets held for sale, if applicable.

 

FFO and FFO+GOS should not be considered as alternatives to net income (determined in accordance with GAAP), nor as indicators of the Company’s financial performance, nor as alternatives to cash flows from operating activities (determined in accordance with GAAP), nor as measures of the Company’s liquidity, nor are they 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 these terms in a different manner. We believe that in order to facilitate a clear understanding of the results of the Company, FFO and FFO+GOS 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-11				30-Jun-11				30-Sep-11				31-Mar-10				30-Jun-10				30-Sep-10				31-Dec-10				31-Mar-09				30-Jun-09				30-Sep-09				31-Dec-09
Net income		$	24,767			$	10,381			$	3,314			$	5,562			$	5,954			$	4,757			$	5,820			$	7,808			$	4,865			$	6,941			$	8,258
(Gain) Loss on sale of assets			(19,593	)			(2,346	)			—				—				—				—				—				—				—				—				(424	)
GAAP income from non-consolidated REITs			(1,772	)			(1,166	)			(573	)			(253	)			(380	)			(404	)			(153	)			(792	)			(443	)			(475	)			(301	)
Distributions from non-consolidated REITs			1,767				1,215				1,104				1,407				1,324				1,192				1,247				1,615				1,522				1,119				1,371
Acquisition costs			269				9				185				—				129				(4	)			—				—				248				391				4
Depreciation & amortization			10,812				12,047				12,332				9,934				9,675				10,510				10,605				8,707				11,217				9,561				10,167
Funds From Operations (FFO)			16,250				20,140				16,362				16,650				16,702				16,051				17,519				17,338				17,409				17,537				19,075
Plus gains on sales of assets (GOS)			19,592				2,346				—				—				—				—				—				—				—				—				424
FFO+GOS (Total Profits)		$	35,842			$	22,486			$	16,362			$	16,650			$	16,702			$	16,051			$	17,519			$	17,338			$	17,409			$	17,537			$	19,499
Funds Available for Distribution:
Funds From Operations (FFO)			16,250				20,140				16,362				16,650				16,702				16,051				17,519				17,338				17,409				17,537				19,075
Straight-line rent			(2,303	)			(2,873	)			(2,228	)			(1,018	)			(740	)			(1,203	)			(1,288	)			(374	)			(69	)			(405	)			(1,030	)
Capital expenditures			(449	)			(876	)			(754	)			(380	)			(498	)			(671	)			(1,053	)			(466	)			(115	)			(265	)			(619	)
Funds Available for Distribution (FAD)		$	13,498			$	16,391			$	13,380			$	15,252			$	15,464			$	14,177			$	15,178			$	16,498			$	17,225			$	16,867			$	17,426
Per Share Data:
EPS		$	0.30			$	0.13			$	0.04			$	0.07			$	0.07			$	0.06			$	0.07			$	0.11			$	0.07			$	0.10			$	0.10
FFO			0.20				0.25				0.20				0.21				0.21				0.20				0.22				0.25				0.25				0.25				0.24
GOS			0.24				0.03				—				—				—				—				—				—				—				—				—
FFO+GOS			0.44				0.28				0.20				0.21				0.21				0.20				0.22				0.25				0.25				0.25				0.24
FAD			0.17				0.20				0.16				0.19				0.19				0.18				0.19				0.23				0.24				0.24				0.22
Weighted Average Shares (basic and diluted)			81,437				81,437				81,600				79,681				79,681				79,751				80,187				70,481				70,481				71,281				79,681

 

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:																												Year Ended				For the three months ended:																Year Ended
		31-Mar-11				30-Jun-11				30-Sep-11				31-Mar-10				30-Jun-10				30-Sep-10				31-Dec-10				31-Dec-10				31-Mar-09				30-Jun-09				30-Sep-09				31-Dec-09				31-Dec-09
Net income		$	24,767			$	10,381			$	3,314			$	5,562			$	5,954			$	4,757			$	5,820			$	22,093			$	7,808			$	4,865			$	6,941			$	8,258			$	27,872
Interest expense			2,408				3,578				3,419				1,652				1,735				1,892				2,004				7,283				1,577				1,599				1,744				1,650				6,570
Depreciation and amortization			10,812				12,047				12,332				9,934				9,675				10,510				10,605				40,724				8,707				11,216				9,561				10,167				39,651
Income taxes			50				68				67				(68	)			5				(37	)			317				217				(299	)			(75	)			(270	)			65				(579	)
EBITDA			38,037				26,074				19,132				17,080				17,369				17,122				18,746				70,317				17,793				17,605				17,976				20,140				73,514
Interest expense		$	2,408			$	3,578			$	3,419			$	1,652			$	1,735			$	1,892			$	2,004			$	7,283			$	1,577			$	1,599			$	1,744			$	1,650			$	6,570
Scheduled principal payments (1)			—				—				—				—				—				—				150				150				—				—				—				—				—
Interest and scheduled principal payments		$	2,408			$	3,578			$	3,419			$	1,652			$	1,735			$	1,892			$	2,154			$	7,433			$	1,577			$	1,599			$	1,744			$	1,650			$	6,570
Interest coverage ratio			15.80				7.29				5.60				10.34				10.01				9.05				9.35				9.65				11.28				11.01				10.31				12.21				11.19
Debt service coverage ratio			15.80				7.29				5.60				10.34				10.01				9.05				8.70				9.46				11.28				11.01				10.31				12.21				11.19

 

(1) Scheduled principal payments exclude repayment of our Term Loan on February 22, 2011 in its entirety.

 

EBITDA, a non-GAAP financial measure, is defined as net income, 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																2010
		31-Mar-11				30-Jun-11				30-Sep-11				31-Mar-10				30-Jun-10				30-Sep-10				31-Dec-10				Total
Net Income		$	24,767			$	10,381			$	3,314			$	5,562			$	5,954			$	4,757			$	5,820			$	22,093
Add (deduct):
Investment banking segment net loss (income)			(160	)			(3,274	)			139				479				(263	)			401				(1,352	)			(735	)
Gain on sale of assets			(19,592	)			(2,346	)			—				—				—				—				—				—
Management fees (before elimination)			(364	)			(428	)			(439	)			(484	)			(359	)			(362	)			(535	)			(1,740	)
Depreciation and Amortization			10,781				12,065				12,279				9,184				9,205				10,348				10,453				39,190
Amortization of favorable leases			(39	)			(23	)			(57	)			716				432				96				119				1,363
Selling, general and administrative			1,644				1,602				1,656				1,447				1,854				1,400				1,698				6,399
Interest expense			2,408				3,578				3,419				1,652				1,736				1,892				2,003				7,283
Interest income			(600	)			(910	)			(790	)			(338	)			(374	)			(431	)			(491	)			(1,634	)
Equity in earnings of nonconsolidated REITs			(968	)			(1,166	)			(573	)			(253	)			(380	)			(404	)			(229	)			(1,266	)
Non-property specific income and expenses, net			(1,514	)			(37	)			67				461				690				421				(268	)			1,304
GAAP Property NOI			16,363				19,442				19,015				18,426				18,495				18,118				17,218				72,257
Straight-line rent			(1,641	)			(2,872	)			(2,228	)			(1,020	)			(1,339	)			(1,202	)			(1,281	)			(4,842	)
Cash Property NOI		$	14,722			$	16,570			$	16,787			$	17,406			$	17,156			$	16,916			$	15,937			$	67,415

 

GAAP 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, interest expense, less equity in earnings of nonconsolidated REITs, interest income, management fee income, gains or losses on the sale of assets and excludes non-property specific income and expenses. The Company also presents this on a cash basis (Cash Property NOI), which is GAAP Property NOI after eliminating the effects of straight-line rent. GAAP Property NOI and Cash 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