Franklin Street Properties (FSP) 2 Aug 232023 Q2 Earnings call transcript

Good morning, and welcome to the Franklin Street Properties Corp.

Second Quarter 2023 Results Conference Call. All participants are in a listen-only mode. After the speakers’ presentation we will conduct a question-and-answer session. [Operator Instructions] As a reminder, this conference call is being recorded.

to call like Carter, to now Counsel. General would turn over the Scott I you. Thank sir. ahead, go Please

Good morning, to earnings and welcome call. quarter Properties XXXX second the Franklin Street

John Carter, Joining our Carter, FSP Chief John Chief are Property this and and Chief George Officer; President me Executive Officer; morning President Officer; Donahue, Demeritt, Investment Jeff Management. our Financial our of

make Management. statements Also Private of XXXX. about Act may that Vice Presidents Executive Will Friend, joining both remarks and plans me this expectations, of under Reform constitute various FSP future morning safe Please Property prospects are we company the that Toby provisions Litigation harbor may for Daley and the the note of Securities for purposes forward-looking

as in XXXX, of file those by XX-K a factors, SEC. reports including results on Risk annual ended the on important December result XX, the as of which indicated Actual from materially statements may various discussed differ section the are year with Form those on report all amended of Factors for Form our XX-Q, quarterly forward-looking by our these

expectations forward-looking company's XXXX. represent the of as In addition, August these today, statements only X,

should to the statements, it obligation any of these today. company update Any to as do the relied be forward-looking so. or may forward-looking any disclaims While views as upon specifically elect statements representing not estimates to company's date subsequent

at to non-GAAP press measures refer of available from yesterday's website www.fspreit.com. or operations, is the financial of net contained funds and we to Relations times on during this other may section which call, At FFO. Reconciliations income our release, FFO Investor in GAAP are

John call Demeritt. Now John? over the to I'll turn

a Afterward, his I'm of the everyone. to I'll brief overview results. for second you, Thank our and Scott, morning, George going call pass quarter thoughts. to good give

release, and website. supplemental As refer our which our found be our today will XX-Q, package on can comments earnings to a reminder,

about FFO, quarter, of $X.XX $X.X million GAAP net operations from or of second of second quarter the about loss a per for ‘XX. share the We for reported $X.X million funds or $X.XX or

about $XX.X a a loss ended share per On June period. million the for GAAP year-to-date six same and 'XX, basis, per the $X about for $X.XX or $X.XX reported or of million of share FFO months net we XX,

As 'XX, of million same is total with we of outstanding, the March. we remain reported June XX, $XXX the debt at end of level which

With turn George? that, over George. I'll to call the

again, welcome second And John. quarter Franklin you, Properties call. Thank XXXX Street to earnings

that underlying does reflect the common As quarter we the assets. of our accurately third continue believe real price estate not XXXX our of value stock of begins, to current the

seek property note price. began meaningful million feet, representing of foot. square relevant foot considered It square metrics, one for unlock to to viewing efforts our through to value portfolio. in just that approximately potential of FSP’s price our December average value of per continue equates that shareholders sold aggressive to XXXX, we In proposition, select it have could disposition in to many to property, which will vacant We dispositions is lease an and space be about million $XXX program per square of since that approximately $XXX X.XX

continued further We market implied portfolio property of square the about of primarily our per price from our reduction. per a of As proceeds XXXX, dispositions, the $XX end property million foot approximately debt remaining to public quarter square second X.X price to foot on square foot. continue use for stock intend

property challenged of program, the investment. their we approximately in all of to have debt, we continued quality Since and market, risk potential XX% has currently our believe office repaid FSP this disposition longer-term increasing while recent the of our beginning stakeholders which reduced

John Donahue, FSP John? the over leasing to I activity, Property Management turn call our Now for more color of Board. President on will

compared quarter, leased at leased everyone. George. end as morning, of portfolio the owned Good year-end the The was XX.X% directly second leased XXXX. and approximately at quarter of the first XX.X% XX.X% you, to end the FSP Thank of

to during primarily quarter owned and increase the quarter. in disposition months of in occupancy leasing offset of was by and completed six the portfolio attributable the to quarter, end quarter. the one was the XX.X% during compared by second XX.X% property of first year The first at end the the the the Economic second lease first directly approximately expirations at

the which leases. to of approximately of renewals first-half approximately The tenant exceeding XXX,XXX of included along XXX,XXX XXX,XXX quarter. square square tenant leasing expansions finalized increase of feet was second commencements and FSP new lease total square the XXXX, departures feet during feet due during with

Commonwealth a executed we term quarter, Glen in lease a square the with The of approximately feet Virginia. at second our years. new with XXX,XXX Virginia is lease the of XX.X During Allen, Innsbrook property approximately

that December We commence in expect XXXX. to lease

entire by Also feet in during XXX,XXX tenant the applicable approximately with amendment the May Colorado. we quarter, Kaiser a our existing expiration Plaza new of Health property Englewood, finalized lease square premises lease an five Greenwood of Kaiser's second Foundation with date at amendment term extends Plan, to years the XXXX. The

feet We that for XXX,XXX of of pipeline of identified FSP respective have are assets shortness. square tracking new square a leases, prospects tenants currently feet including prospective over on healthy their approximately XXX,XXX

an this assets. witness summer continues tours for in request leasing overall of FSP Denver. in past Despite positive a Dallas, over proposals FSP's which evident to and Houston most been in slight activity has The FSP's for is markets the and several slowdown pickup months, in incrementally time for suburban including trend the activity, modest typical year, in

FSP’s portfolio. excess expirations of engaged remainder tenants square XXX,XXX potential that that These renewals and of existing are to X% continues total in owned XXX,XXX XXXX feet. with total work the for square represents expansions which calendar for FSP feet, of than approximately less directly

it will I turn now Thank to Jeff you. over Carter.

for to as discussing select current you, properties efforts I Good own Thank generally, as more marketplace specifically. sell everyone. morning, well office John. will be investment our potentially sales properties the

sales office macro in and level financings, term value properties eye challenged. and/or class an towards with for a as is deep groups office but been finding buyers the a at bulk office particular, looking who growth and large for has property respect these widely asset to buyers And other key property have with market At well portfolios. Not reported, and distressed as of types remains as are FSP. longer value office unexpectedly, proposition focus are and the out opportunities, so the

constrained real The equity when reliably combined responsible ability current it primarily closing property and lack historically procure currently and and of difficult conditions of liquidity needed investors purchases. with lending debt resulting interest the to facilitate capital environment, are of estate reduced to the rates, and for rising the

real Investors continue to continue prospective potential high-quality buyers. work our interest from respect and own dispositions, With to see on we office seek properties. select well-located property to

there are in However, indeed the than fewer buyers past.

entering are transactions our intention with of watching from own genuine closing. see the observations, And and current that many marketplace, belief we the proposed buyers

to they in procurement than due However, cases, some to they liquidity greater can falling they transactions deals previously entirely. of and or debt timeframes constraints, as anticipated contract out even processes, consummate find through longer result which equity challenges mentioned work their the respective in

the approximately our properties. said, third all to efforts quarter. $X.X underway the making on own in during Charlotte, Carolina, gross That for specifically, Forest select is North of located FSP sale close progress single-story currently million in More building proceeds sole Park, our to expect we on sell

have Forest Park. different disposition for agreements purchase million and properties Forest with Park, gross in addition total entered would the potential in and approximately into $XXX disclosed of the of three released that additional our and above In to purchasers unrelated we beyond FSP sale results that just aggregate three quarterly proceeds sale

transactions including closing customary these As XXXX. quarter successful, these their transactions conditions, of inspection during remain of subject the diligence close to reported, respective the expected are to due successful periods. If fourth completion

pending And debt. be appropriate. $XXX.X average in foot potential until proceeds sales currently in to process, to equal price per have approximately a intended the this used an All we our current in and In specific interest Forest we reasons proceeds share environment, aggregate, the Park, four that believe potential for total disposition will to $XXX the be primarily not gross dispositions are foot. in property for competitive million including square information repayment shareholders of market of

look we'd informed. questions. to up that, to the keeping you listening conference Julian? any And for call call the thank today. And market like We our earnings open now time, this to forward with for at

[Operator question you. Steven from Janney ahead. go come Please Our Scott. Dumanski will Montgomery from Thank Instructions] first

line Your is open.

you. Thank

In are planning currently terms and of transact dispositions, to you sold quarter, Northwest Point million. another you for million $XX $XXX on last

year. So that's this in total, approximately million around dispositions of for $XXX

special So given could and without your size, this sell hitting more dividend? a any year into a triggering you recap potentially

on question. is this within exist market given forward Carter. the my environment, not providing the challenges for potential that we're comment Thanks dispositions. I'll start This Jeff that current guidance with

currently do the various informed repaying further respective select that that appropriate. have what we assets However, their discovery more asset through sales few and of will market our processes, debt phases are as substantially respective and keep we uptakes we'll I is to a price of -- with say within committed

And that the terms again, on guidance I of dispositions. understand providing in

see curiosity, to purchase Just how out I of sales would any -- be? non-refundable if deposit the material and it's wanted agreements, regarding

I purchase not agreements appreciate the question. and though, are place, in sale on right would I comment that now.

you. helpful. Got it. That’s Thank

Thank you.

Riley next go Our ahead. Kucera Securities. from from Please B. Craig comes question

open. Your line is

guys. morning, on lease Congrats Innsbrook. good the Yes, getting at done

some has think four issues for had years. asset vacancy I that over

start mentioned when is period commencing rent rent? that there when is free that December. Is a You in Or the lease actually occurs? they paying

Donahue. John it's Craig,

calendar into There rent free correct. You're a period XXXX. that will go is

line if the straight commence December in rent FASB XX on we get So time. in should them

a far color Okay. any a for Was some to rent? Kaiser, would TI give did extension you in helpful. Was year Great. Just to was And extension? nice that at Kaiser lease the which be exchange have what adjustment the to five as as win, there package? there

the rent. Yes, pickup an rent, pretty a was no And the situation, rent could an exercised market. to absolutely, rare considered but it slightly option The where the be as-is norm, is that deal, That free and exception an below from Craig. was was negotiated. tenant expiring

say as was on if well. The the market, there could but that win is concession basis great huge a NER any below was all, news slightly rent don't you an it there So have the is for future. them as timing happy the a the that we're to that, property. Kaiser keep of grow is them planning We tenant exactly to but and know at

way Great. through this what of we plan are you the the Circle third end quarter? here Monument Changing quarter. -- being you're Kind until the of that given there, gears, is loan game extended

Hey as George. The game plan it has been. Craig, it's

tenancy We buyers and actively tenants the of potential are actively for searching to time. same the at And we prospects. existing property have are occupancy take -- for searching some

the are some And some are potential prospects tenant owners. other of words, both. In

on as paths. we we're And do property that again, in running a the those crossing so paths so marketplace, active are down And lot both that.

few had property -- issues have the Indianapolis, over to is its Downtown stabilized seems this is, where but last now. years,

sold and/or some of Monument leased And so combination getting or cautiously going we're optimistic forward on Circle. thereof,

Got me. it. And for one more just

you Just sold getting sort on some buyers liquidity the access and equity, the given any or how these commentary to working for your of time. you've assets Could of give debt financially and of on been color of buyers do Or sense three a capital? equity sources down are? worked go they these of sort already come qualified they the as raising with proof with them? debt of and need you of you Do to capital path their to

I profile question. many Jeff. appreciate property. our we've property seen is of this Greg, from varies on deals, buyer The to it the

the capital hard we the as debt really our price processes as equity buyer will say and on of has it's that generalize. has So to and interviews, work who through, through who well. part I to remains these But that transactions to access the case try discovery

and And market but run good we these we but we've till the have instances. a chance a keep it's got rigorous process in posted. nothing think we'll is a and market, success, challenging so done, of done It's

Okay, Thanks, that’s helpful. guys.

Welcome.

to have remarks. no to closing I call would over for back like questions. George further Carter We the turn

forward -- you for and into to next quarter. look Thank you, call, everyone, tuning the turning talking we into to

This conference participation. for you Thank call. today's concludes your

You may disconnect. now