Exhibit 99.2

 

 

Supplemental Operating and Financial Data First 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): Cash and GAAP Basis	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 Annualized 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 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, 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 March 31, 2012, the Company owned and operated a portfolio of real estate consisting of 36 properties, 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 March 31, 2012)
Corporate Headquarters	Wakefield, MA
Fiscal Year-End	31-Dec
Total Properties	36
Total Square Feet	7.1 Million
Common Shares Outstanding	82,937,405
Quarterly Dividend	$0.19
Dividend Yield	7.2%
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 Amex		Inquiries 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
	31-Mar-12	31-Dec-11	30-Sep-11	30-Jun-11	31-Mar-11	31-Dec-10	30-Sep-10	30-Jun-10
High Price	$        11.14	$        13.08	$        13.91	$        14.25	$        15.63	$        14.42	$        12.86	$    15.70
Low Price	$          9.43	$          9.90	$        10.49	$        12.00	$        13.52	$        12.20	$        10.99	$    11.04
Closing Price, at the end of the quarter	$        10.60	$          9.95	$        11.31	$        12.91	$        14.07	$        14.25	$        12.42	$    11.81
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	7.2%	7.64%	6.72%	5.89%	5.40%	5.33%	6.12%	6.44%
Common shares outstanding (millions)	82.94	82.94	82.94	81.44	81.44	81.44	79.84	79.68

 

 

Timing

 

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

 

First Quarter:	3-May-13		Third Quarter:	2-Nov-12
Second Quarter:	3-Aug-12		Fourth Quarter:	1-Mar-13

 

 

		For the Three																				For the Year
		Months Ended				For the Three Months Ended																Ended
		31-Mar-12				31-Mar-11				30-Jun-11				30-Sep-11				31-Dec-11				31-Dec-11
Income Items:
Revenue:
Rental		$	36,668			$	31,099			$	33,606			$	33,672			$	37,014			$	135,391
Related party revenue			2,616				808				1,150				1,037				1,051				4,046
Other			34				7				6				7				29				49
Total revenue			39,318				31,914				34,762				34,716				38,094				139,486
Total expenses			33,900				28,288				31,201				31,772				33,685				124,946
Income before interest income, equity in earnings in non-consolidated REITs and taxes			5,418				3,626				3,561				2,944				4,409				14,540
Interest income			8				11				5				3				3				22
Equity in earnings in non-consolidated REITs			391				968				1,166				573				978				3,685
Income before taxes			5,817				4,605				4,732				3,520				5,390				18,247
Income tax expense			79				50				68				67				82				267
Income from continuing operations			5,738				4,555				4,664				3,453				5,308				17,980
Income from discontinued operations			—				620				3,370				(139	)			(246	)			3,605
Gain on sale of assets			—				19,592				2,347				—				—				21,939
Net income		$	5,738			$	24,767			$	10,381			$	3,314			$	5,062			$	43,524
FFO*		$	19,571			$	16,250			$	20,140			$	16,362			$	18,457			$	71,209
Per Share Data:
EPS		$	0.07			$	0.30			$	0.13			$	0.04			$	0.06			$	0.53
FFO*			0.24				0.20				0.25				0.20				0.22				0.87
Weighted Average Shares (diluted)			82,937				81,437				81,437				81,600				82,937				81,857
Balance Sheet Items:
Real estate, net		$	1,001,863			$	979,560			$	976,131			$	997,258			$	1,006,221			$	867,608
Other assets, net			436,665				387,342				327,633				348,526				402,440				402,440
Total assets, net			1,438,528				1,366,902				1,303,764				1,345,784				1,408,661				1,238,735
Total liabilities, net			527,181				435,801				377,374				413,784				487,294				487,294
Shareholders' equity			911,347				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 Three																				For the
		Months Ended				For the Three Months Ended																Year Ended
		31-Mar-12				31-Mar-11				30-Jun-11				30-Sep-11				31-Dec-11				31-Dec-11
Revenue:
Rental		$	36,668			$	31,099			$	33,606			$	33,672			$	37,014			$	135,391
Related party revenue:
Management fees and interest income from loans			2,616				808				1,150				1,037				1,051				4,046
Other			34				7				6				7				29				49
Total revenue			39,318				31,914				34,762				34,716				38,094				139,486
Expenses:
Real estate operating expenses			9,077				8,730				8,765				9,328				9,862				36,685
Real estate taxes and insurance			5,813				4,759				5,228				5,020				5,426				20,433
Depreciation and amortization			13,256				10,745				12,029				12,351				13,124				48,249
Selling, general and administrative			2,077				1,645				1,602				1,654				2,012				6,913
Interest			3,677				2,408				3,578				3,419				3,261				12,666
Total expenses			33,900				28,287				31,202				31,772				33,685				124,946
Income before interest income, equity in earnings of non-consolidated REITs and taxes			5,418				3,627				3,560				2,944				4,409				14,540
Interest income			8				11				5				3				3				22
Equity in earnings of non-consolidated REITs			391				968				1,166				573				978				3,685
Income before taxes on income			5,817				4,606				4,731				3,520				5,390				18,247
Income tax expense			79				50				68				67				82				267
Income from continuing operations			5,738				4,556				4,663				3,453				5,308				17,980
Income from discontinued operations			—				620				3,370				(139	)			(246	)			3,605
Gain on sale of assets			—				19,592				2,347				—				—				21,939
Net income		$	5,738			$	24,768			$	10,380			$	3,314			$	5,062			$	43,524
Weighted average number of shares outstanding, basic and diluted			82,937				81,437				81,437				81,600				82,937				81,857
Earnings per share, basic and diluted, attributable to:
Continuing operations		$	0.07			$	0.06			$	0.06			$	0.04			$	0.06			$	0.22
Discontinued operations			—				0.01				—				(0.00	)			(0.00	)			0.04
Gains on sales of assets			—				0.24				0.03				—				—				0.27
Net income per share, basic and diluted		$	0.07			$	0.30			$	0.13			$	0.04			$	0.06			$	0.53

 

 

		March 31,				March 31,				June 30,				September 30,				December 31,
		2012				2011				2011				2011				2011
Assets:
Real estate assets:
Land		$	137,503			$	129,800			$	129,800			$	134,711			$	137,503
Buildings and improvements			1,023,905				978,876				982,821				1,006,814				1,020,449
Fixtures and equipment			885				600				726				761				856
			1,162,293				1,109,276				1,113,347				1,142,286				1,158,808
Less accumulated depreciation			160,430				129,716				137,216				145,028				152,587
Real estate assets, net			1,001,863				979,560				976,131				997,258				1,006,221
Acquired real estate leases, net			87,073				85,290				81,455				91,585				91,613
Investment in non-consolidated REITs			87,061				88,652				88,654				88,225				87,598
Assets held for syndication, net			—				47,630				11,206				4,720				—
Assets held for sale			—				5,108				—				—				—
Cash and cash equivalents			29,283				49,488				28,881				44,047				23,813
Restricted cash			511				440				459				477				493
Tenant rent receivables, net			1,090				1,688				1,846				1,418				1,460
Straight-line rent receivable, net			31,932				20,838				23,745				26,067				28,545
Prepaid expenses			1,164				1,400				1,255				2,553				1,223
Related party mortgage loan receivable			172,286				60,116				61,916				61,916				140,516
Other assets			4,006				6,339				6,237				5,219				4,538
Deferred leasing commissions, net			22,259				20,353				21,979				22,299				22,641
Total assets		$	1,438,528			$	1,366,902			$	1,303,764			$	1,345,784			$	1,408,661
Liabilities and Stockholders’ Equity:
Liabilities:
Bank note payable		$	494,000			$	404,000			$	345,000			$	375,000				449,000
Term loan payable			—				—				—				—				—
Accounts payable and accrued expenses			23,311				20,562				21,431				28,258				26,446
Accrued compensation			446				603				1,070				1,383				2,222
Tenant security deposits			2,181				2,533				2,476				2,453				2,008
Other liabilities: derivative termination value			—				828				447				63				—
Acquired unfavorable real estate leases, net			7,243				7,275				6,950				6,627				7,618
Total liabilities			527,181				435,801				377,374				413,784				487,294
Commitments and contingencies
Stockholders’ Equity:
Preferred stock			—				—				—				—				—
Common stock			8				8				8				8				8
Additional paid-in capital			1,042,876				1,025,491				1,025,491				1,042,876				1,042,876
Accumulated other comprehensive loss			—				(828	)			(447	)			(63	)			—
Accumulated distributions in excess of accumulated earnings			(131,537	)			(93,570	)			(98,662	)			(110,821	)			(121,517	)
Total stockholders’ equity			911,347				931,101				926,390				932,000				921,367
Total liabilities and stockholders’ equity		$	1,438,528			$	1,366,902			$	1,303,764			$	1,345,784			$	1,408,661

 

 

		Three Months Ended March 31,								Twelve Months Ended December 31
		2012				2011				2011				2010				2009
Cash flows from operating activities:
Net income		$	5,738			$	24,767			$	43,524			$	22,093			$	27,872
Adjustments to reconcile net income to net cash         provided by  operating activities:
Gains on assets sold			—				(19,592	)			(21,939	)			—				(424	)
Depreciation and amortization expense			13,763				11,109				50,261				39,627				36,561
Amortization of above market lease			40				(6	)			(47	)			1,362				3,359
Equity in earnings (losses) from non-consolidated REITs			(391	)			(1,066	)			(3,086	)			(1,183	)			(2,012	)
Distributions from non-consolidated REITs			487				1,283				3,474				1,633				2,283
Increase in bad debt reserve			65				(375	)			(365	)			980				111
Changes in operating assets and liabilities:
Restricted cash			(18	)			(20	)			(73	)			(86	)			2
Tenant rent receivables			305				609				827				(1,120	)			(564	)
Straight-line rents			(1,517	)			(2,303	)			(9,878	)			(4,249	)			(1,879	)
Prepaid expenses and other assets			93				88				1,611				865				907
Accounts payable and accrued expenses			(3,388	)			(1,212	)			4,213				(351	)			2,760
Accrued compensation			(1,776	)			(1,200	)			419				387				(238	)
Tenant security deposits			173				603				78				122				(66	)
Payment of deferred leasing commissions			(641	)			(2,819	)			(8,058	)			(10,515	)			(2,659	)
Net cash provided by operating activities			12,933				9,866				60,961				49,565				66,013
Cash flows from investing activities:
Purchase of real estate assets, office computers and furniture, capitalized merger costs and acquired real estate leases			(5,376	)			(169,339	)			(236,250	)			(54,344	)			(132,323	)
Investment in non-consolidated REITs			(1	)			(9	)			(10	)			(11	)			(13,218	)
Distributions in excess of earnings from non-consolidated REITs			442				484				1,582				3,537				3,345
Investment in related party mortgage loan receivable			(31,770	)			(2,432	)			(82,832	)			(21,149	)			(35,410	)
Changes in deposits on real estate assets			—				200				200				(200	)			—
Investment in assets held for syndication, net			—				(45,186	)			2,230				1,319				8,159
Proceeds received on sales of real estate assets			—				89,382				96,790				—				672
Net cash used in investing activities			(36,705	)			(126,900	)			(218,290	)			(70,848	)			(168,775	)
Cash flows from financing activities:
Distributions to stockholders			(15,758	)			(15,473	)			(62,177	)			(60,586	)			(55,313	)
Proceeds (costs) from equity offering, net			—				(90	)			17,295				21,868				114,695
Borrowings under New Revolver, net			45,000				404,000				449,000				—				—
Borrowings (repayments) under Revolver			—				(209,968	)			(209,968	)			100,960				41,540
Borrowing (repayment) of term loan payable, net			—				(74,850	)			(74,850	)			(150	)			—
Deferred Financing Costs			—				(4,328	)			(5,388	)			—				—
Swap termination payment			—				(982	)			(983	)			—				—
Net cash provided by (used in) financing activities			29,242				98,309				112,929				62,092				100,922
Net decreases in cash and cash equivalents			5,470				(18,725	)			(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		$	29,283			$	49,488			$	23,813			$	68,213			$	27,404

 

 

Property NOI Cash*

								Three Months				Year
								Ended				Ended				Three Months Ended
				31-Mar-12
Region		Division		Sq Feet				31-Mar-12				2012				31-Mar-11				30-Jun-11				30-Sep-11				31-Dec-11
Eastern		Mideast			1,441			$	4,485			$	4,485			$	3,476			$	3,840			$	3,573			$	4,139
Midwest		East North Central			792				1,773				1,773				1,586				1,057				1,116				1,691
		West North Central			1,102				2,962				2,962				2,405				2,909				3,010				2,887
					1,894				4,735				4,735				3,991				3,966				4,126				4,578
South		Southeast			600				2,011				2,011				2,068				2,023				2,027				1,893
		Southwest			2,028				6,777				6,777				3,747				4,907				5,399				6,189
					2,628				8,788				8,787				5,815				6,930				7,426				8,082
West		Mountain			790				1,591				1,591				922				1,311				1,144				1,619
		Pacific			299				479				479				518				523				518				530
					1,089				2,070				2,070				1,440				1,834				1,662				2,149
Total					7,052			$	20,078			$	20,077			$	14,722			$	16,570			$	16,787			$	18,948

 

Property NOI GAAP*

								Three Months				Year
								Ended				Ended				Three Months Ended
				31-Mar-12
Region		Division		Sq Feet				31-Mar-12				2012				31-Mar-11				30-Jun-11				30-Sep-11				31-Dec-11
Eastern		Mideast			1,441			$	5,113			$	5,113			$	4,007			$	4,486			$	4,427			$	5,157
Midwest		East North Central			792				1,999				1,999				1,552				1,027				1,164				2,017
		West North Central			1,102				2,991				2,991				2,886				2,986				3,040				2,935
					1,894				4,990				4,990				4,438				4,013				4,204				4,952
South		Southeast			600				2,055				2,055				1,572				2,093				2,117				1,988
		Southwest			2,028				7,158				7,158				4,629				6,558				6,173				6,777
					2,628				9,213				9,213				6,201				8,651				8,290				8,765
West		Mountain			790				1,720				1,720				1,162				1,715				1,494				1,927
		Pacific			299				558				558				555				577				600				621
					1,089				2,278				2,278				1,717				2,292				2,094				2,548
Total					7,052			$	21,594			$	21,594			$	16,363			$	19,442			$	19,015			$	21,422

 

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

 

 

		31-Mar-12				31-Mar-11				30-Jun-11				30-Sep-11				31-Dec-11
Market Data:
Shares Outstanding			82,937				81,437				81,437				82,937				82,937
Closing market price per share		$	10.60			$	14.07			$	12.91			$	11.31			$	9.95
Market capitalization		$	879,136			$	1,145,824			$	1,051,357			$	938,022			$	825,227
Total Debt			494,000				404,000				345,000				375,000				449,000
Total Market Capitalization		$	1,373,136			$	1,549,824			$	1,396,357			$	1,313,022			$	1,274,227
Dividend Data:
Total dividends paid		$	15,758			$	15,473			$	15,473			$	15,473			$	15,758
Common dividend per share		$	0.19			$	0.19			$	0.19			$	0.19			$	0.19
Quarterly dividend as a % of FFO*			80.5%				95%				76%				95%				86%
Liquidity:
Cash and cash equivalents		$	29,283			$	49,488			$	28,881			$	44,047			$	23,813
Revolving credit facilities:
Gross potential available under current credit facilities			600,000				500,000				600,000				600,000				600,000
Less:
Outstanding balance			(494,000	)			(404,000	)			(345,000	)			(375,000	)			(449,000	)
Total Liquidity		$	135,283			$	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

 

 

 

	31-Mar-12	31-Dec-11	30-Sep-11	30-Jun-11	31-Mar-11
Owned portfolio of commercial real estate:
Number of properties	36	36	35	34	35
Square feet	7,052,068	7,052,068	6,929,891	6,747,815	6,845,176
Leased percentage	89%	89%	88%	87%	88%
Investments in non-consolidated commercial real estate:
Number of properties	3	3	3	3	3
Square feet	2,004,953	2,001,542	1,998,575	1,996,457	1,995,932
Leased percentage	90%	87%	83%	82%	85%
Single Asset REITs (SARs) managed:
Number of properties	13	13	13	13	13
Square feet	3,322,570	3,322,639	3,322,638	3,322,569	3,325,694
Leased percentage	84%	80%	80%	79%	79%
Total owned, investments and managed properties:
Number of properties	52	52	51	50	51
Square feet	12,379,591	12,376,249	12,251,104	12,066,841	12,166,802
Leased percentage	88%	86%	85%	84%	85%

 

 

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	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	472,616
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
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				7,052,068
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	256,348
50 South Tenth Street	Minneapolis	MN	MidWest	498,768
Grand Boulevard	Kansas City	MO	MidWest	536,056
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				5,327,523

 

 

Properties by Division/Region
($ in thousands)
							NBV (a)		% Leased
	# of Properties		Square Feet		% of Portfolio		31-Mar-12		31-Mar-12
Mideast Division	8		1,441,088		20.4%		$        224,433		88.3%
East Region Total	8		1,441,088		20.4%		224,433		88.3%
East North Central Division	4		791,849		11.2%		99,856		80.7%
West North Central	5		1,102,385		15.6%		105,577		95.3%
Midwest Region Total	9		1,894,234		26.8%		205,433		89.2%
Southeast	2		599,886		8.5%		117,888		94.6%
Southwest	10		2,027,979		28.8%		292,871		92.3%
South Region Total	12		2,627,865		37.3%		410,759		92.9%
Mountain	4		789,632		11.2%		125,151		80.9%
Pacific	3		299,249		4.3%		36,087		79.2%
West Region Total	7		1,088,881		15.5%		161,238		80.4%
Grand Total	36		7,052,068		100.0%		$      1,001,863		89.0%

 

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

 

 

 

 

					NBV (1)	% Leased
Division	Name	City	State	S.F.	31-Mar-12	31-Mar-12
Pacific	Hillview Center	Milpitas	CA	36	$       4,083	100.0%
Pacific	Montague	San Jose	CA	146	17,760	100.0%
Mountain	380 Interlocken	Broomfield	CO	240	41,507	89.5%
Mountain	390 Interlocken	Broomfield	CO	242	41,502	96.4%
Mountain	Centennial Technology Center	Colorado Springs	CO	110	11,536	85.4%
Mountain	Greenwood Plaza	Englewood	CO	197	30,606	48.9%
Southeast	Blue Lagoon Drive	Miami	FL	213	46,581	100.0%
Southeast	One Overton Place	Atlanta	GA	387	71,307	91.7%
East North Central	Northwest Point	Elk Grove Village	IL	177	27,687	100.0%
East North Central	909 Davis	Evanston	IL	195	22,907	94.8%
East North Central	River Crossing	Indianapolis	IN	205	34,403	93.9%
Mideast	East Baltimore	Baltimore	MD	325	54,135	56.2%
East North Central	Southfield Centre	Southfield	MI	215	14,859	39.2%
West North Central	Eden Bluff	Eden Prairie	MN	153	14,061	100.0%
West North Central	121 South 8th Street	Minneapolis	MN	473	24,006	93.8%
West North Central	Timberlake	Chesterfield	MO	233	33,692	97.7%
West North Central	Timberlake East	Chesterfield	MO	116	17,108	85.9%
West North Central	Lakeside Crossing	Maryland Heights	MO	128	16,710	100.0%
Mideast	Park Seneca	Charlotte	NC	110	7,306	80.5%
Mideast	Forest Park	Charlotte	NC	62	6,012	100.0%
Mideast	Emperor Boulevard	Durham	NC	259	54,972	100.0%
Southwest	Addison Circle	Addison	TX	294	45,967	95.8%
Southwest	Liberty Plaza	Addison	TX	219	24,024	76.4%
Southwest	Park Ten	Houston	TX	156	18,518	81.2%
Southwest	Eldridge Green	Houston	TX	248	42,050	100.0%
Southwest	Park Ten Phase II	Houston	TX	157	29,983	100.0%
Southwest	Willow Bend Office Center	Plano	TX	117	18,515	77.4%
Southwest	Legacy Tennyson Center	Plano	TX	203	24,518	100.0%
Southwest	One Legacy Circle	Plano	TX	214	39,102	100.0%
Southwest	Collins Crossing	Richardson	TX	299	42,254	87.8%
Southwest	East Renner Road	Richardson	TX	122	7,940	100.0%
Mideast	Meadow Point	Chantilly	VA	139	22,635	100.0%
Mideast	Stonecroft	Chantilly	VA	111	18,835	100.0%
Mideast	Loudoun Tech Center	Dulles	VA	136	16,991	100.0%
Mideast	Innsbrook	Glen Allen	VA	298	43,546	98.3%
Pacific	Federal Way	Federal Way	WA	117	14,244	47.0%
				7,052	$ 1,001,863	89.0%

 

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

 

 

													Percentage		Annualized		Average
							Year Built						Leased as of		Rent as of		Annualized Rent
							or		Net Rentable		Leased		March 31,		as of March 31,		per Leased
Property Name		City		State	Type		Renovated		Square Feet		Sq. Ft.		2012 (a)		2012 (b)		Square Feet (c)
Park Seneca		Charlotte		NC	Office		1969		109,550		88,233		80.54%		$       1,368,916		$             15.51
Forest Park		Charlotte		NC	Office		1999		62,212		62,212		100.00%		808,999		13.00
Meadow Point		Chantilly		VA	Office		1999		138,537		138,537		100.00%		3,562,762		25.72
Innsbrook		Glen Allen		VA	Office		1999		298,456		293,410		98.31%		3,214,059		10.95
East Baltimore		Baltimore		MD	Office		1989		325,445		183,027		56.24%		4,593,212		25.10
Loudoun Tech Center		Dulles		VA	Office		1999		135,888		135,888		100.00%		1,842,083		13.56
Stonecroft		Chantilly		VA	Office		2008		111,469		111,469		100.00%		4,194,445		37.63
Emperor Boulevard		Durham		NC	Office		2009		259,531		259,531		100.00%		8,327,973		32.09
East total									1,441,088		1,272,307		88.29%		27,912,448		21.94
Southfield Centre		Southfield		MI	Office		1977		214,697		84,205		39.22%		885,084		10.51
Northwest Point		Elk Grove Village		IL	Office		1999		176,848		176,848		100.00%		3,511,335		19.86
909 Davis Street		Evanston		IL	Office		2002		195,245		185,125		94.82%		7,071,410		38.20
River Crossing		Indianapolis		IN	Office		1998		205,059		192,533		93.89%		4,184,636		21.73
Timberlake		Chesterfield		MO	Office		1999		232,766		227,292		97.65%		4,431,314		19.50
Timberlake East		Chesterfield		MO	Office		2000		116,197		99,801		85.89%		2,384,775		23.90
Lakeside Crossing		Sl. Louis		MO	Office		2008		127,778		127,778		100.00%		3,244,444		25.39
Eden Bluff		Eden Praire		MN	Office		2006		153,028		153,028		100.00%		4,064,622		26.56
121 South 8th Street		Minneapolis		MN	Office		1974		472,616		443,225		93.78%		6,836,000		15.42
Midwest total									1,894,234		1,689,835		89.21%		36,613,620		21.67
Blue Lagoon Drive		Miami		FL	Office		2002		212,619		212,619		100.00%		4,465,755		21.00
One Overton Place		Atlanta		GA	Office		2002		387,267		355,109		91.70%		6,888,788		19.40
Willow Bend Office Center		Plano		TX	Office		1999		116,622		90,252		77.39%		712,644		7.90
Park Ten		Houston		TX	Office		1999		155,715		126,391		81.17%		3,547,574		28.07
Addison Circle		Addison		TX	Office		1999		293,787		281,503		95.82%		6,867,480		24.40
Collins Crossing		Richardson		TX	Office		1999		298,766		262,313		87.80%		5,940,700		22.65
Eldridge Green		Houston		TX	Office		1999		248,399		248,399		100.00%		7,274,525		29.29
Park Ten Phase II		Houston		TX	Office		2006		156,746		156,746		100.00%		4,310,985		27.50
Liberty Plaza		Addison		TX	Office		1985		218,934		167,159		76.35%		2,696,839		16.13
Denbury Park		Plano		TX	Office		1999/2008		202,600		202,600		100.00%		3,440,040		16.98
One Legacy Circle		Plano		TX	Office		2008		214,110		214,110		100.00%		6,604,183		30.84
East Renner Road		Richardson		TX	Office		1999		122,300		122,300		100.00%		958,812		7.84
South Total									2,627,865		2,439,501		92.83%		53,708,326		22.02
Centennial Technology Center		Colorado Springs		CO	Office		1999		110,405		94,296		85.41%		1,321,865		14.02
380 Interlocken		Broomfield		CO	Office		2000		240,184		214,912		89.48%		5,779,240		26.89
Greenwood Plaza		Englewood		CO	Office		2000		197,527		96,518		48.86%		1,668,615		17.29
390 Interlocken		Broomfield		CO	Office		2002		241,516		232,930		96.44%		6,256,999		26.86
Hillview Center		Milpitas		CA	Office		1984		36,288		36,288		100.00%		537,234		14.80
Federal Way		Federal Way		WA	Office		1982		117,010		54,965		46.97%		843,069		15.34
Montague Business Center		San Jose		CA	Office		1982		145,951		145,951		100.00%		1,923,541		13.18
West Total									1,088,881		875,860		80.44%		18,330,562		20.93
Grand Total									7,052,068		6,277,503		89.02%		$      136,564,956		$             21.75

 

(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 March 2012 (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 March 2012 divided by leased square feet.

 

 

 

		For the
		Three Months
		Ended
		31-Mar-12
Tenant improvements		$	3,014
Deferred leasing costs			2,196
Building improvements			746
Total		$	5,956

 

																		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
	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	45	267,470	3.79%	$    2,903,474	2.13%
2	Quintiles Transnational Corporation	1	84	259,531	3.68%	8,279,077	6.06%
3	CITGO Petroleum Corporation	1	119	248,399	3.52%	7,274,525	5.33%
4	Burger King Corporation	1	78	212,619	3.01%	4,465,755	3.27%
5	Denbury Onshore, LLC	2	52	202,600	2.87%	3,440,040	2.52%
6	RGA Reinsurance Company	2	33	185,501	2.63%	3,803,069	2.78%
7	SunTrust Bank	2	55,114	182,888	2.59%	2,827,072	2.07%
8	Citicorp Credit Services, Inc	1	57	176,848	2.51%	3,511,335	2.57%
9	C.H. Robinson Worldwide, Inc	1	111	153,028	2.17%	4,064,622	2.98%
10	Houghton Mifflin Company	1	60	150,050	2.13%	5,603,653	4.10%
11	Murphy Exploration & Production Company	1	61	144,677	2.05%	4,017,514	2.94%
12	Giesecke & Devrient America, Inc.	1	35	135,888	1.93%	1,842,083	1.35%
13	Monsanto Company	1	34	127,778	1.81%	3,244,444	2.38%
14	AT&T Services, Inc.	1	75	122,300	1.73%	958,812	0.70%
15	Vail Holdings, Inc.	1	84,132	122,232	1.73%	3,350,543	2.45%
16	Northrop Grumman Systems Corporation	1	73	111,469	1.58%	4,194,445	3.07%
17	Argo Data Resource Corporation	1	74	109,990	1.56%	2,690,829	1.97%
18	Alliance Data Systems	1	98,111	96,749	1.37%	2,890,424	2.12%
19	Federal National Mortgage Association	1	17	92,358	1.31%	1,863,613	1.36%
20	Amdocs, Inc. (a)	1	2,57	91,928	1.30%	1,816,393	1.33%
				3,194,303	45.30%	$      73,041,723	53.48%

 

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

 

 

 

 

 

 

 

 

 

Year		Total Square Feet		% of Square Feet Commercial
2012		221,088		3.1%
2013		474,097		6.7%
2014		428,487		6.1%
2015		802,138		11.4%
2016		923,880		13.1%
2017		735,496		10.4%
2018		667,492		9.5%
2019		637,782		9.0%
2020		174,958		2.5%
2021		590,748		8.4%
2022		475,730		6.7%
2023		145,607		2.1%
Vacant		774,565		11.0%
Total		7,052,068		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
March 31,	Year			Leases		Leases (a)		Leases		Leases
2012	99	(b)		221,088		4,443,127		20.10		3.25%
2013	52			474,097		10,829,714		22.84		7.93%
2014	43			428,487		8,009,056		18.69		5.86%
2015	41			802,138		16,563,276		20.65		12.13%
2016	36			923,880		17,751,291		19.21		13.00%
2017	27			735,496		18,370,793		24.98		13.45%
2018	13			667,492		14,982,881		22.45		10.97%
2019	11			637,782		15,858,692		24.87		11.61%
2020	8			174,958		4,245,992		24.27		3.11%
2021 and thereafter	26			1,212,085		25,510,134		21.05		18.68%
	356			6,277,503		136,564,956		21.75		100.00%
Vacancies as of 3/31/12				774,565
Total Portfolio Square Footage				7,052,068

 

(a) Annualized rent represents the monthly rent, including tenant reimbursements, for each lease in effect at March 31, 2012 mulitplied by 12. Tenant reimbursements generally include payment of real estate taxes, operating expenses and common area maintenance and utility charges.

 

(b) The 44 leases are Month to Month

 

 

					First		Second		Third		Fourth		First
				% Leased (1)	Quarter	% 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 %	as of	Average %
	Property Name	Location	Feet	31-Mar-11	Leased (2)	30-Jun-11	Leased (2)	30-Sep-11	Leased (2)	31-Dec-11	Leased (2)	31-Mar-12	Leased (2)
1	PARK SENECA	Charlotte, NC	109,550	78.5%	78.5%	80.1%	79.1%	80.9%	80.5%	80.6%	80.6%	80.5%	79.9%
2	HILLVIEW CENTER	Milpitas, CA	36,288	100.0%	100.0%	100.0%	100.0%	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%	39.2%	39.2%	39.2%	39.2%
4	FOREST PARK	Charlotte, NC	62,212	77.5%	77.5%	100.0%	85.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%
5	CENTENNIAL	Colorado Springs, CO	110,405	66.9%	66.9%	66.9%	66.9%	66.9%	66.9%	85.4%	73.0%	85.4%	85.4%
6	MEADOW POINT	Chantilly, VA	138,537	100.0%	98.6%	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%	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%	47.0%	44.3%	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%	100.0%	100.0%
10	TIMBERLAKE EAST	Chesterfield, MO	116,197	100.0%	100.0%	100.0%	100.0%	85.9%	90.6%	85.9%	85.9%	85.9%	85.9%
11	PARK TEN	Houston, TX	155,715	98.8%	95.4%	98.8%	98.8%	98.8%	98.8%	81.2%	81.2%	81.2%	81.2%
12	MONTAGUE	San Jose, CA	145,951	100.0%	100.0%	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%	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%	88.4%	88.4%	87.8%	87.8%
15	GREENWOOD PLAZA	Englewood, CO	197,527	60.1%	60.1%	54.3%	58.2%	54.3%	54.3%	48.9%	48.4%	48.9%	48.9%
16	RIVER CROSSING	Indianapolis, IN	205,059	93.8%	93.8%	93.5%	93.4%	93.5%	93.5%	93.5%	93.5%	93.9%	93.1%
17	LIBERTY PLAZA	Addison, TX	218,934	75.6%	74.3%	75.6%	75.6%	68.6%	68.0%	77.9%	74.8%	76.4%	77.4%
18	INNSBROOK	Glen Allen, VA	298,456	60.8%	61.0%	63.7%	67.3%	86.8%	78.8%	98.3%	90.7%	98.3%	98.3%
19	380 INTERLOCKEN	Broomfield, CO	240,184	85.1%	85.1%	85.1%	85.1%	85.1%	85.1%	85.1%	85.1%	89.5%	86.5%
20	BLUE LAGOON	Miami, FLA	212,619	100.0%	100.0%	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%	100.0%	100.0%
22	WILLOW BEND	Plano, TX	116,622	67.0%	63.2%	83.1%	76.8%	83.1%	83.1%	83.1%	83.1%	77.4%	77.4%
23	ONE OVERTON PARK	Atlanta, GA	387,267	92.4%	92.4%	91.1%	91.5%	90.4%	90.6%	89.3%	90.0%	91.7%	90.9%
24	390 INTERLOCKEN	Broomfield, CO	241,516	95.9%	95.9%	95.9%	95.9%	96.6%	96.9%	93.4%	94.3%	96.4%	94.6%
25	EAST BALTIMORE	Baltimore, MD	325,445	84.5%	84.3%	55.7%	55.5%	55.7%	55.7%	55.7%	55.7%	56.2%	55.9%
26	PARK TEN PHASE II	Houston, TX	156,746	100.0%	99.1%	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%	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%	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%	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%	100.0%	100.0%
31	121 SOUTH EIGHTH ST	Minneapolis, MN	472,616	92.2%	92.2%	92.5%	92.1%	93.6%	93.1%	93.6%	93.6%	93.8%	93.8%
32	EMPEROR BOULEVARD	Durham, NC	259,531	100.0%	100.0%	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%	100.0%	100.0%
34	ONE LEGACY	Plano, TX	214,110	89.7%	89.7%	100.0%	94.6%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%
35	909 DAVIS	Evanston, IL	195,245	n/a	n/a	n/a	n/a	94.8%	94.8%	94.8%	94.8%	94.8%	94.8%
36	1410 EAST RENNER	Richardson, TX	122,300	n/a	n/a	n/a	n/a	n/a	n/a	100.0%	100.0%	100.0%	100.0%
	TOTAL WEIGHTED AVERAGE  (3)		7,052,068	88.4%	87.4%	86.9%	86.9%	88.1%	87.7%	88.7%	88.1%	89.0%	88.8%

 

(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.

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

 

 

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

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

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 Year Ended:
		31-Mar-12				31-Mar-11				30-Jun-11				30-Sep-11				31-Dec-11				2011				2010				2009				2008				2007
Net income		$	5,738			$	24,767			$	10,381			$	3,314			$	5,062			$	43,524			$	22,093			$	27,872			$	24,572			$	61,085
(Gain) Loss on sale of assets			—				(19,593	)			(2,346	)			—				—				(21,939	)			—				(424	)			—				(23,789	)
GAAP income from non-consolidated REITs			(391	)			(1,773	)			(1,166	)			(573	)			(978	)			(4,490	)			(1,190	)			(2,012	)			(1,953	)			472
Distributions from non-consolidated REITs			929				1,767				1,215				1,104				970				5,056				5,170				5,628				4,802				1,806
Acquisition costs			—				269				9				185				157				620				125				643				—				—
Depreciation & amortization			13,295				10,812				12,047				12,332				13,248				48,439				40,724				39,652				26,146				35,475
Funds From Operations (FFO)		$	19,571			$	16,249			$	20,140			$	16,362			$	18,459			$	71,210			$	66,922			$	71,359			$	53,567			$	75,049
Per Share Data:
EPS		$	0.07			$	0.30			$	0.13			$	0.04			$	0.06			$	0.55			$	0.28			$	0.38			$	0.35			$	0.86
FFO			0.24				0.20				0.25				0.20				0.23				0.89				0.84				0.98				0.76				1.06
Weighted Average Shares (basic and diluted)			82,937				81,437				81,437				81,600				81,600				79,826				79,826				73,001				70,481				70,651

 

 

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 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				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			$	24,767			$	10,381			$	3,314			$	5,062			$	5,562			$	5,954			$	4,757			$	5,820
(Gain) Loss on sale of assets			—				(19,593	)			(2,346	)			—				—				—				—				—				—
GAAP income from non-consolidated REITs			(391	)			(1,773	)			(1,166	)			(573	)			(978	)			(253	)			(380	)			(404	)			(153	)
Distributions from non-consolidated REITs			929				1,767				1,215				1,104				970				1,407				1,324				1,192				1,247
Acquisition costs			—				269				9				185				157				—				129				(4	)			—
Depreciation & amortization			13,295				10,812				12,047				12,332				13,248				9,934				9,675				10,510				10,605
Funds From Operations (FFO)		$	19,571			$	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				16,249				20,140				16,362				18,459				16,650				16,702				16,051				17,519
Straight-line rent			(1,516	)			(2,303	)			(2,873	)			(2,228	)			(2,474	)			(1,018	)			(740	)			(1,203	)			(1,288	)
Capital expenditures			(746	)			(449	)			(876	)			(754	)			(747	)			(380	)			(498	)			(671	)			(1,053	)
Funds Available for Distribution (FAD)		$	17,309			$	13,497			$	16,391			$	13,380			$	15,238			$	15,252			$	15,464			$	14,177			$	15,178
Per Share Data:
EPS		$	0.07			$	0.30			$	0.13			$	0.04			$	0.06			$	0.07			$	0.07			$	0.06			$	0.07
FFO			0.24				0.20				0.25				0.20				0.22				0.21				0.21				0.20				0.22
FAD			0.21				0.17				0.20				0.16				0.18				0.19				0.19				0.18				0.19
Weighted Average Shares (basic and diluted)			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.

 

 

																						Year																				Year
		For the Three Months Ended:																				Ended				For the Three Months Ended:																Ended
		31-Mar-12				31-Mar-11				30-Jun-11				30-Sep-11				31-Dec-11				31-Dec-11				31-Mar-10				30-Jun-10				30-Sep-10				31-Dec-10				31-Dec-10
Net income		$	5,738			$	24,767			$	10,381			$	3,314			$	5,062			$	43,524			$	5,562			$	5,954			$	4,757			$	5,820			$	22,093
Interest expense			3,677				2,408				3,578				3,419				3,261				12,666				1,652				1,735				1,892				2,004				7,283
Depreciation and amortization			13,295				10,812				12,047				12,332				13,248				48,439				9,934				9,675				10,510				10,605				40,724
Income taxes			79				50				68				67				82				267				(68	)			5				(37	)			317				217
EBITDA			22,789				38,037				26,074				19,132				21,653				104,896				17,080				17,369				17,122				18,746				70,317
Interest expense		$	3,677			$	2,408			$	3,578			$	3,419			$	3,261			$	12,666			$	1,652			$	1,735			$	1,892			$	2,004			$	7,283
Scheduled principal payments (1)			—				—				—				—				—				—				—				—				—				150				150
Interest and scheduled principal payments		$	3,677			$	2,408			$	3,578			$	3,419			$	3,261			$	12,666			$	1,652			$	1,735			$	1,892			$	2,154			$	7,433
Interest coverage ratio			6.20				15.80				7.29				5.60				6.64				8.28				10.34				10.01				9.05				9.35				9.65
Debt service coverage ratio			6.20				15.80				7.29				5.60				6.64				8.28				10.34				10.01				9.05				8.70				9.46

 

(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																				2011				Three Months Ended																2010
		31-Mar-12				31-Mar-11				30-Jun-11				30-Sep-11				31-Dec-11				Total				31-Mar-10				30-Jun-10				30-Sep-10				31-Dec-10				Total
Net Income		$	5,738			$	24,767			$	10,381			$	3,314			$	5,062			$	43,524			$	5,562			$	5,954			$	4,757			$	5,820			$	22,093
Add (deduct):
Investment banking segment net loss (income)			—				(160	)			(3,274	)			139				(132	)			(3,427	)			479				(263	)			401				(1,352	)			(735	)
Gain on sale of assets			—				(19,592	)			(2,346	)			—				—				(21,938	)			—				—				—				—				—
Management fees (before elimination)			(488	)			(364	)			(428	)			(439	)			(563	)			(1,794	)			(484	)			(359	)			(362	)			(535	)			(1,740	)
Depreciation and Amortization			13,256				10,781				12,065				12,279				13,195				48,320				9,184				9,205				10,348				10,453				39,190
Amortization of favorable leases			40				(39	)			(23	)			(57	)			72				(47	)			716				432				96				119				1,363
Selling, general and administrative			2,077				1,644				1,602				1,656				2,011				6,913				1,447				1,854				1,400				1,698				6,399
Interest expense			3,677				2,408				3,578				3,419				3,260				12,665				1,652				1,736				1,892				2,003				7,283
Interest income			(2,340	)			(600	)			(910	)			(790	)			(810	)			(3,110	)			(338	)			(374	)			(431	)			(491	)			(1,634	)
Equity in earnings of nonconsolidated REITs			(391	)			(968	)			(1,166	)			(573	)			(978	)			(3,685	)			(253	)			(380	)			(404	)			(229	)			(1,266	)
Non-property specific income and expenses, net			25				(1,514	)			(37	)			67				305				(1,179	)			461				690				421				(268	)			1,304
GAAP Property NOI			21,594				16,363				19,442				19,015				21,422				76,242				18,426				18,495				18,118				17,218				72,257
Straight-line rent			(1,516	)			(1,641	)			(2,872	)			(2,228	)			(2,474	)			(9,216	)			(1,020	)			(1,339	)			(1,202	)			(1,281	)			(4,842	)
Cash Property NOI		$	20,078			$	14,722			$	16,570			$	16,787			$	18,948			$	67,026			$	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