News Details

WAKEFIELD, Mass.--(BUSINESS WIRE)-- Franklin Street Properties Corp. (the “Company”, “FSP”, “we” or “our”) (NYSE MKT:FSP), a real estate investment trust (REIT), announced today Funds From Operations (FFO) of $27.9 million or $0.28 per share for the third quarter ended September 30, 2014. Net income was $1.6 million or $0.02 per share for the third quarter ended September 30, 2014.

The Company evaluates its performance based on FFO, Net Income and EPS and believes each is an important measure. A reconciliation of Net Income to FFO, which is a non-GAAP financial measure, is provided on page 3 of this press release.

Comparing results for the third quarter of 2014 to the same period in 2013, FFO increased $0.3 million to $27.9 million and was flat per share at $0.28 per share. The FFO increase was primarily from higher property income and was partially offset by higher interest costs. Net Income and EPS was $1.6 million or $0.02 per share for the third quarter of 2014 compared to a net income of $4.1 million or $0.04 per share for the third quarter of 2013.

Comparing results for the nine months ended September 30, 2014 to the same period in 2013, FFO increased $13.3 million or $0.07 per share to $84.9 million or $0.85 per share. The FFO increase was primarily from higher property income. The increase was partially offset by higher interest costs and G&A expenses. Net Income and EPS was $8.9 million or $0.09 per share for the nine months ended September 30, 2014 compared to a net income of $13.2 million or $0.14 per share for the same period in 2013.

George J. Carter, President and CEO, commented as follows:

“For the third quarter of 2014, FSP's funds from operations, or FFO, totaled approximately $27.9 million or $0.28 per share. For the nine months ending September 30, 2014, FSP's FFO totaled approximately $84.9 million or $0.85 per share, a 9.0% increase over the same period last year on a per share basis. Dividend distributions declared for the third quarter of 2014 were approximately $19.0 million or $0.19 per share. Our directly-owned real estate portfolio of 39 properties, totaling approximately 9.7 million square feet, was approximately 93.3% leased as of September 30, 2014, and our comparative same-store rental growth totaled approximately 2.8% through the first nine months of 2014.

Currently, we are in active efforts to lease existing vacancy and future portfolio lease-rolls and to potentially dispose of several of our suburban office assets that, we believe, are no longer core to our long-term strategy. We also are pursuing a number of potential new property acquisitions within our primary markets, as well as continuing to analyze with our development team the best opportunity for the anticipated future repositioning of our 801 Marquette Avenue South office building located in Minneapolis, Minnesota.

As we begin the fourth quarter of 2014, our property portfolio is operating smoothly with generally steady or improving rental conditions in most of our locations. We remain very optimistic about our continuing growth prospects for the balance of 2014 and beyond.”

Dividend Update

On October 10, 2014, the Company announced that its Board of Directors declared a regular quarterly dividend for the three months ended September 30, 2014 of $0.19 per share of common stock that will be paid on November 13, 2014 to stockholders of record on October 24, 2014.

FFO Guidance

Our full year FFO guidance for 2014 is updated to be in the range of $1.10 to $1.12 per diluted share. This guidance (a) excludes the impact of future acquisitions, dispositions, debt financings or repayments or other capital market transactions; (b) reflects estimates from our ongoing portfolio of properties, other real estate investments and G&A expenses; and (c) reflects our current expectations of economic conditions. We will update guidance quarterly in our earnings releases. There can be no assurance that the Company’s actual results will not differ materially from the estimates set forth above.

Real Estate Update

Supplementary schedules provide property information for the Company’s owned real estate portfolio and for two non-consolidated REITs in which the Company holds preferred stock interests as of September 30, 2014. The Company will also be filing an updated supplemental information package that will provide stockholders and the financial community with additional operating and financial data. The Company will file this supplemental information package with the SEC and make it available on its website at www.franklinstreetproperties.com.

Funds From Operations (FFO)

A reconciliation of Net Income to FFO is shown below and a definition of FFO is provided on Supplementary Schedule H. Management believes FFO is used broadly throughout the real estate investment trust (REIT) industry as a measurement of performance. The Company has included the NAREIT FFO definition in the table and notes that other REITs may not define FFO in accordance with the current NAREIT definition or may interpret the current NAREIT definition differently. The Company’s computation of FFO may not be comparable to FFO reported by other REITs or real estate companies that define FFO differently.

Today’s news release, along with other news about Franklin Street Properties Corp., is available on the Internet at www.franklinstreetproperties.com. We routinely post information that may be important to investors in the Investor Relations section of our website. We encourage investors to consult that section of our website regularly for important information about us and, if they are interested in automatically receiving news and information as soon as it is posted, to sign up for E-mail Alerts.

Earnings Call

A conference call is scheduled for October 29, 2014 at 9:00 a.m. (ET) to discuss the third quarter 2014 results. To access the call, please dial 1-877-507-4376. Internationally, the call may be accessed by dialing 1-412-317-6014. To listen via live audio webcast, please visit the Webcasts & Presentations section in the Investor Relations section of the Company's website (www.franklinstreetproperties.com) at least ten minutes prior to the start of the call and follow the posted directions. The webcast will also be available via replay from the above location starting one hour after the call is finished.

About Franklin Street Properties Corp.

Franklin Street Properties Corp., based in Wakefield, Massachusetts, is focused on investing in institutional-quality office properties in the U.S. FSP’s strategy is to invest in select urban infill and central business district (CBD) properties, with primary emphasis on our top five markets of Atlanta, Dallas, Denver, Houston, and Minneapolis. FSP seeks value-oriented investments with an eye towards long-term growth and appreciation, as well as current income. FSP is a Maryland corporation that operates in a manner intended to qualify as a real estate investment trust (REIT) for federal income tax purposes. To learn more about FSP please visit our website at www.franklinstreetproperties.com.

Forward-Looking Statements

Statements made in this press release that state FSP’s or management’s intentions, beliefs, expectations, or predictions for the future may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.This press release may also contain forward-looking statements based on current judgments and current knowledge of management, which are subject to certain risks, trends and uncertainties that could cause actual results to differ materially from those indicated in such forward-looking statements.Accordingly, readers are cautioned not to place undue reliance on forward-looking statements.Investors are cautioned that our forward-looking statements involve risks and uncertainty, including without limitation, economic conditions in the United States, disruptions in the debt markets, economic conditions in the markets in which we own properties, risks of a lessening of demand for the types of real estate owned by us, changes in government regulations and regulatory uncertainty, uncertainty about governmental fiscal policy, geopolitical events and expenditures that cannot be anticipated such as utility rate and usage increases, unanticipated repairs, additional staffing, insurance increases and real estate tax valuation reassessments.See the “Risk Factors” set forth in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2013, as the same may be updated from time to time in subsequent filings with the United States Securities and Exchange Commission.Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.We will not update any of the forward-looking statements after the date of this press release to conform them to actual results or to changes in our expectations that occur after such date, other than as required by law.

(1) Percentages are determined based upon square footage of expiring commercial leases.
(2) Includes 645,437 square feet of current vacancies.

The following table shows property information for our investments in non-consolidated REITs:

Franklin Street Properties Corp. Earnings Release
Supplementary Schedule H
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 on properties or investments in non-consolidated REITs, and after adjustments to exclude equity in income or losses from, and, to include the proportionate share of FFO from, non-consolidated 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 NAREIT, may define this term in a different manner. We have included the NAREIT FFO definition in our table and note that other REITs may not define FFO in accordance with the current NAREIT definition or may interpret the current NAREIT definition differently than we do.

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

Franklin Street Properties Corp.
John Demeritt, 877-686-9496

Source: Franklin Street Properties Corp.