WAKEFIELD, Mass.--(BUSINESS WIRE)--Franklin Street Properties Corp. ("FSP†, "our†or "we†) (NYSE American: FSP) announced today that its Board of Directors declared a quarterly dividend of $0.01 per share of common stock for the period July 1, 2025 through September 30, 2025, payable on November 6, 2025 to stockholders of record as of October 17, 2025. This press release, along with other news about FSP, is available on the Internet at www.fspreit.com. We routinely post information that may be. ...

Group 1 - The article discusses the author's journey into investing, starting in high school in 2011, focusing on REITs, preferred stocks, and high-yield bonds, indicating a long-standing interest in markets and the economy [1] - The author has recently adopted a strategy that combines long stock positions with covered calls and cash secured puts, emphasizing a fundamental long-term investment approach [1] - The author primarily covers REITs and financials on Seeking Alpha, with occasional articles on ETFs and other stocks influenced by macro trade ideas [1]

Core Insights - Franklin Street Properties reported a GAAP net loss of $(0.08) per share, aligning with analyst expectations, and revenue of $26.7 million, reflecting ongoing operational challenges in the office real estate market [1][7] Financial Performance - EPS (GAAP) for Q2 2025 was $(0.08), consistent with estimates and improved from $(0.20) in Q2 2024, showing a year-over-year change of $0.12 [2] - Revenue decreased by 13.3% from $30.8 million in Q2 2024 to $26.7 million in Q2 2025 [2] - Funds From Operations (FFO) per share fell to $0.02, a 50% decrease from $0.04 in Q2 2024 [2] - Adjusted Funds From Operations (AFFO) per share was approximately break-even, compared to $0.01 in Q2 2024, indicating a significant change [2] - The owned portfolio leased percentage dropped to 69.1%, down from 70.3% at year-end 2024 [2] Operational Trends - The company faced persistent challenges in leasing, with new leasing activity primarily driven by renewals and expansions rather than new tenants [5] - The average rent per occupied square foot decreased from $31.77 at year-end 2024 to $30.98 at June 30, 2025 [6] - Year-to-date leasing activity reached 187,000 square feet, but the overall leasing environment remains weak [5] Strategic Focus - The company is focusing on increasing leasing in existing properties and pursuing selective property sales to reduce debt, which stood at approximately $250 million as of March 31, 2025 [4][8] - Management is exploring options for further property sales or potentially selling the company, with no specified timeline for outcomes [11] Market Overview - The portfolio is concentrated in the Sunbelt and Mountain West regions, particularly Texas, Colorado, and Minnesota, with ongoing difficulties noted in the Minneapolis market [3][10] - Management observed firmer tenant demand in Texas, especially Houston, but this has not significantly improved overall portfolio metrics [10] Dividend and Guidance - The quarterly dividend remained unchanged at $0.01 per share, despite negative cash flow on an adjusted basis [12] - Management did not provide financial guidance for the next quarter or fiscal 2025, citing uncertainty in leasing demand and potential property sales [13]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) (Exact name of registrant as specified in its charter) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025. OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-32470 Franklin Street Properties Corp. (State or other ...

[Company Information](index=3&type=section&id=Company%20Information) [Company Overview](index=3&type=section&id=Company%20Overview) FSP is a REIT specializing in U.S. Sunbelt and Mountain West office properties, with 14 owned properties as of June 30, 2025 - FSP focuses on office properties in the U.S. Sunbelt and Mountain West, as well as other select opportunistic markets[10](index=10&type=chunk) - As of June 30, 2025, the Company's portfolio comprised **14 owned properties** totaling **4.8 million square feet**[11](index=11&type=chunk)[13](index=13&type=chunk) Corporate Snapshot (as of June 30, 2025) | Metric | Value | | :--- | :--- | | Trading Symbol | FSP (NYSE American) | | Common Shares Outstanding | 103,690,340 | | Total Market Capitalization | $0.4 Billion | | Insider Holdings | 8.67% | [Key Financial Data](index=4&type=section&id=Key%20Financial%20Data) [Financial Highlights](index=4&type=section&id=Financial%20Highlights) Financial highlights for Q2 2025 show declining revenue, persistent net losses, decreasing occupancy, and reduced total debt Quarterly Financial & Operational Trends | Metric (in thousands) | Q2 2025 | Q1 2025 | Q4 2024 | Q2 2024 | | :--- | :--- | :--- | :--- | :--- | | Total revenue | $26,715 | $27,107 | $28,375 | $30,830 | | Net loss | $(7,876) | $(21,435) | $(8,526) | $(21,023) | | FFO* | $2,516 | $2,727 | $2,707 | $3,721 | | AFFO* | $(514) | $(693) | $(5,157) | $518 | | Total assets, net | $903,243 | $916,366 | $946,931 | $1,012,527 | | Total debt outstanding | $249,818 | $250,179 | $250,332 | $303,000 | | Owned properties % leased | 69.1% | 69.2% | 70.3% | 72.3% | [Income Statements](index=5&type=section&id=Income%20Statements) Q2 2025 saw a **$7.9 million net loss** on **$26.7 million total revenue**, with six-month net loss at **$29.3 million** due to property dispositions Income Statement Summary (in thousands) | Period | Total Revenue | Total Expenses | Net Loss | | :--- | :--- | :--- | :--- | | **Three Months Ended Jun 30, 2025** | $26,715 | $35,138 | $(7,876) | | **Three Months Ended Jun 30, 2024** | $30,830 | $38,953 | $(21,023) | | **Six Months Ended Jun 30, 2025** | $53,822 | $70,601 | $(29,311) | | **Six Months Ended Jun 30, 2024** | $62,055 | $78,538 | $(28,575) | [Balance Sheets](index=6&type=section&id=Balance%20Sheets) As of June 30, 2025, total assets decreased to **$903.2 million**, liabilities to **$278.5 million**, and stockholders' equity to **$624.7 million** Balance Sheet Comparison (in thousands) | Account | June 30, 2025 | Dec 31, 2024 | June 30, 2024 | | :--- | :--- | :--- | :--- | | Real estate assets, net | $803,412 | $834,908 | $840,756 | | **Total assets** | **$903,243** | **$946,931** | **$1,012,527** | | **Total liabilities** | **$278,543** | **$291,074** | **$330,450** | | **Total stockholders' equity** | **$624,700** | **$655,857** | **$682,077** | [Cash Flow Statements](index=7&type=section&id=Cash%20Flow%20Statements) H1 2025 saw a **$12.2 million net cash outflow**, with **$8.4 million** used in operations, **$1.2 million** in investing, and **$2.6 million** in financing Cash Flow Summary (Six Months Ended June 30, in thousands) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash used for operating activities | $(8,359) | $(7,736) | | Net cash (used for) provided by investing activities | $(1,221) | $21,079 | | Net cash used for financing activities | $(2,585) | $(109,728) | | **Net decrease in cash** | **$(12,165)** | **$(96,385)** | [Property Net Operating Income (NOI)](index=8&type=section&id=Property%20Net%20Operating%20Income%20(NOI)) Same Store Property NOI decreased by **6.9%** in H1 2025, with total Property NOI declining by **17.2%** due to dispositions and weaker regional performance Same Store Property NOI (Six Months Ended June 30, in thousands) | Region | 2025 | 2024 | % Change | | :--- | :--- | :--- | :--- | | MidWest | $3,114 | $3,305 | (5.8)% | | South | $8,724 | $9,200 | (5.2)% | | West | $11,365 | $12,428 | (8.6)% | | **Total Same Store** | **$23,203** | **$24,933** | **(6.9)%** | - The report provides a detailed reconciliation from Net Loss to Property NOI, adjusting for items such as depreciation, G&A expenses, and interest to arrive at the property-level operating performance[35](index=35&type=chunk) [FFO & AFFO](index=9&type=section&id=FFO%20%26%20AFFO) Q2 2025 FFO decreased to **$2.5 million** (**$0.02 per share**), while AFFO was negative **$0.5 million** (**$0.00 per share**), reflecting lower FFO and capital expenditures FFO & AFFO Reconciliation (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net loss (in thousands) | $(7,876) | $(21,023) | | **FFO* (in thousands)** | **$2,516** | **$3,721** | | **AFFO* (in thousands)** | **$(514)** | **$518** | | FFO per share* | $0.02 | $0.04 | | AFFO per share* | $(0.00) | $0.01 | [EBITDA](index=10&type=section&id=EBITDA) Q2 2025 Adjusted EBITDA was **$8.8 million**, with Net Debt-to-Annualized Adjusted EBITDA ratio at **6.2x**, reflecting debt reduction EBITDA & Debt Metrics (as of June 30) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Adjusted EBITDA* (Quarterly, in thousands) | $8,790 | $10,783 | | Net Debt (in thousands) | $219,300 | $271,505 | | Net Debt-to-Adjusted EBITDA ratio* | 6.2x | 6.3x | [Debt and Capital Analysis](index=12&type=section&id=Debt%20and%20Capital%20Analysis) [Debt Summary](index=12&type=section&id=Debt%20Summary) As of June 30, 2025, total debt was **$249.8 million**, with all instruments maturing April 1, 2026, at a **9.00% fixed interest rate** Debt Outstanding as of June 30, 2025 (in thousands) | Debt Instrument | Maturity Date | Outstanding Balance | Interest Rate | | :--- | :--- | :--- | :--- | | BofA Term Loan | Apr 1, 2026 | $55,515 | 9.00% | | BMO Term Loan Tranche B | Apr 1, 2026 | $70,936 | 9.00% | | Series A Senior Notes | Apr 1, 2026 | $71,553 | 9.00% | | Series B Senior Notes | Apr 1, 2026 | $51,814 | 9.00% | | **Total** | | **$249,818** | **9.00%** | - The company has consistently used proceeds from property sales throughout 2024 and 2025 to repay outstanding debt pari passu[38](index=38&type=chunk) [Capital Analysis](index=13&type=section&id=Capital%20Analysis) Q2 2025 equity market capitalization was **$170.1 million**, total market capitalization **$419.9 million**, with a **$0.01 per share** quarterly common dividend Capitalization and Dividend Data (as of June 30, 2025) | Metric | Value | | :--- | :--- | | Closing market price per share | $1.64 | | Market capitalization (in thousands) | $170,052 | | Total debt outstanding (in thousands) | $249,818 | | **Total Market Capitalization (in thousands)** | **$419,870** | | Common dividend declared per share | $0.01 | [Portfolio Overview](index=14&type=section&id=Portfolio%20Overview) As of June 30, 2025, FSP's portfolio comprised **14 properties** (**4.8 million SF**) with **69.1% leased**, reflecting a reduction from prior year due to dispositions Owned Portfolio Trend | As of | Number of Properties | Square Feet | Leased Percentage | | :--- | :--- | :--- | :--- | | June 30, 2025 | 14 | 4,807,663 | 69.1% | | Dec 31, 2024 | 14 | 4,806,253 | 70.3% | | June 30, 2024 | 16 | 5,264,416 | 72.3% | Portfolio by Region (as of June 30, 2025) | Region | Square Feet | Leased Percentage | Wtd Avg GAAP Rent | | :--- | :--- | :--- | :--- | | South | 1,908,515 | 73.3% | $29.39 | | Midwest | 757,531 | 68.8% | $24.55 | | West | 2,141,617 | 65.5% | $34.89 | | **Total** | **4,807,663** | **69.1%** | **$30.98** | [Tenant Analysis and Leasing Activity](index=16&type=section&id=Tenant%20Analysis%20and%20Leasing%20Activity) [Tenants by Industry](index=16&type=section&id=Tenants%20by%20Industry) The portfolio's tenant base is diversified across industries like Energy, Professional Services, and Technology, mitigating concentration risk - The portfolio's tenancy is diversified by industry, with a visual breakdown provided by square feet[47](index=47&type=chunk) [20 Largest Tenants](index=17&type=section&id=20%20Largest%20Tenants) The top 20 tenants account for **33.1% of square footage** and **51.6% of annualized rent**, with CITGO Petroleum as the largest tenant - The top 20 tenants represent a significant portion of the portfolio's income, accounting for **51.6% of total annualized rent**[50](index=50&type=chunk) Top 3 Tenants by Annualized Rent | Tenant | Leased Square Feet | % of Total Annualized Rent | | :--- | :--- | :--- | | 1. CITGO Petroleum Corporation | 248,399 | 7.5% | | 2. US Government | 168,573 | 6.4% | | 3. EOG Resources, Inc. | 169,167 | 6.3% | [Leasing Activity](index=19&type=section&id=Leasing%20Activity) H1 2025 leasing activity totaled **187,000 square feet**, including **16,000 SF new leases** and **171,000 SF renewals**, with a **6.3-year** weighted average lease term Leasing Activity (Six Months Ended June 30) | Activity | 2025 (in Square Feet) | 2024 (in Square Feet) | | :--- | :--- | :--- | | New leasing | 16,000 | 92,000 | | Renewals and expansions | 171,000 | 180,000 | | **Total** | **187,000** | **272,000** | [Lease Expirations](index=20&type=section&id=Lease%20Expirations) A significant lease expiration of **571,296 square feet** (**20.8% of annualized rent**) is scheduled for 2026, representing the largest near-term concentration Upcoming Lease Expirations by Annualized Rent | Year of Expiration | Square Footage | % of Total Annualized Rent | | :--- | :--- | :--- | | 2025 | 146,798 | 4.4% | | 2026 | 571,296 | 20.8% | | 2027 | 324,440 | 11.2% | | 2028 | 242,052 | 7.4% | - A visual chart on page 20 illustrates the lease expiration schedule by square feet, highlighting the significant rollover in 2026[57](index=57&type=chunk) [Capital Expenditures](index=22&type=section&id=Capital%20Expenditures) H1 2025 capital expenditures totaled **$8.0 million**, allocated to tenant improvements (**$3.8 million**), deferred leasing costs (**$2.2 million**), and non-investment capex (**$2.0 million**) Capital Expenditures (Six Months Ended June 30, 2025, in thousands) | Category | Amount | | :--- | :--- | | Tenant improvements | $3,789 | | Deferred leasing costs | $2,247 | | Non-investment capex | $2,008 | | **Total Capital Expenditures** | **$8,044** | [Disposition Activity](index=23&type=section&id=Disposition%20Activity) The company sold one property in June 2025 for **$6.0 million**, incurring a **$12.9 million loss**, continuing its selective disposition strategy Recent Disposition Summary | Year | Number of Properties Sold | Total Gross Proceeds (in thousands) | | :--- | :--- | :--- | | 2025 (YTD) | 1 | $6,000 | | 2024 | 3 | $100,000 | | 2023 | 5 | $154,482 | - The sale of the Monument Circle property in Indianapolis on June 6, 2025, resulted in a significant loss on sale of **$12.9 million**[66](index=66&type=chunk) [Net Asset Value Components](index=24&type=section&id=Net%20Asset%20Value%20Components) This section provides key figures for Net Asset Value (NAV) calculation as of June 30, 2025, including market capitalization, asset/liability balances, and rental revenue reconciliation Key NAV Components (as of June 30, 2025) | Component | Value | | :--- | :--- | | Market capitalization (in thousands) | $170,052 | | Debt (in thousands) | $249,818 | | **Total Market Capitalization (in thousands)** | **$419,870** | | Cash, cash equivalents and restricted cash (in thousands) | $30,518 | | Straight-line rent receivable (in thousands) | $37,839 | [Appendix: Non-GAAP Financial Measures Definitions](index=25&type=section&id=Appendix%3A%20Non-GAAP%20Financial%20Measures%20Definitions) This appendix defines non-GAAP financial measures like FFO, AFFO, EBITDA, Adjusted EBITDA, and Property NOI, clarifying their calculation and use as key performance indicators [FFO](index=25&type=section&id=FFO) FFO is defined as net income adjusted for non-cash items and property sale gains/losses, serving as a primary operational performance and distribution measure - FFO is defined as net income excluding gains/losses from property sales and adding back depreciation and amortization[70](index=70&type=chunk) [EBITDA and NOI](index=26&type=section&id=EBITDA%20and%20NOI) EBITDA is net income plus interest, taxes, depreciation, and amortization; Adjusted EBITDA further excludes specific gains/losses; Property NOI measures property-level performance by excluding corporate and non-operating items - Adjusted EBITDA is presented as a supplemental disclosure for liquidity, showing the company's ability to service debt[75](index=75&type=chunk) - Property NOI is a non-GAAP measure used to evaluate the performance of the company's properties, excluding corporate-level and non-operating items[76](index=76&type=chunk) [AFFO](index=27&type=section&id=AFFO) AFFO adjusts FFO for non-cash items and deducts recurring capital expenditures, aiming to measure residual cash flow available for distribution - AFFO adjusts FFO by excluding straight-line rent and deducting recurring capital expenditures like tenant improvements and leasing commissions[78](index=78&type=chunk)

Core Viewpoint - Franklin Street Properties (NYSE: FSP) is a REIT focused on U.S. office properties and is currently trading significantly below its book value, having underperformed the market with a return of -12% over the past two years [1] Group 1: Company Performance - FSP has shown a strong underperformance compared to the market, with a return of -12% since the first article was published nearly two years ago [1] Group 2: Investment Activity - The article mentions notable investment activities, including two "Buy" coverages for ADTH in September and November 2023, with an acquisition price of $3.21 per share in June 2024 [1] - LUMN also had two "Buy" coverages in September and November 2023, with a downgrade noted after selling the full position in October 2024 at $6.08 [1]

Financial Data and Key Metrics Changes - The company reported funds from operations (FFO) of approximately $2.7 million or $0.03 per share for Q1 2025 [5] - A GAAP net loss of about $21.4 million or $0.21 per share was recorded for the same period [6] Business Line Data and Key Metrics Changes - The directly owned portfolio was approximately 69.2% leased at the end of Q1 2025, down from 70.3% at the end of Q4 2024 [9] - Economic occupancy for the directly owned portfolio was approximately 67.7% at the end of Q1 2025, compared to 68.6% at the end of 2024 [9] Market Data and Key Metrics Changes - The company has tracked approximately 800,000 square feet of prospective new tenants, with about 300,000 square feet of prospects identifying FSP assets on their shortlist [11] - Scheduled lease expirations for the remainder of 2025 total approximately 246,000 square feet, representing about 5.1% of FSP's directly owned portfolio [12] Company Strategy and Development Direction - The company remains focused on advancing leasing of space in its existing property portfolio and pursuing property dispositions to repay debt [7] - The company is actively considering operational adjustments and strategic transactions to enhance shareholder value [9] Management's Comments on Operating Environment and Future Outlook - Management noted macroeconomic uncertainties affecting deal-making within the office asset class, including recent tariff headlines [8] - The company remains confident in its direction but is open to various strategies to maximize shareholder value [9] Other Important Information - Since initiating its current disposition strategy in late 2020, the company has completed approximately $1.1 billion in property sales, reducing corporate indebtedness by nearly 75% [13] - National office transaction volumes rose by 22% in 2024 and accelerated in Q1 2025, finishing 31% higher year over year [16] Q&A Session Summary Question: Insight on why leasing was solely executed for renewals during Q1 - Management indicated that new leases stalled but they are pursuing renewal transactions and expect positive results in Q2 and Q3 [18][19] Question: Which geographies currently depict greater strength in the portfolio? - Management highlighted strong demand in Texas, particularly Houston, with improving conditions in Dallas, Denver, and Minneapolis, though suburban areas in Texas are performing better [20][21]

Financial Data and Key Metrics Changes - The company reported funds from operations (FFO) of approximately $2.7 million or $0.03 per share for Q1 2025 [5] - A GAAP net loss of about $21.4 million or $0.21 per share was recorded for the same period [6] Business Line Data and Key Metrics Changes - The directly owned portfolio was approximately 69.2% leased at the end of Q1 2025, down from 70.3% at the end of Q4 2024 [9] - Economic occupancy for the directly owned portfolio was approximately 67.7% at the end of Q1 2025, compared to 68.6% at the end of 2024 [9] - Approximately 60,000 square feet of total leasing was finalized during Q1 2025, consisting entirely of renewals and expansions [10] Market Data and Key Metrics Changes - The company has tracked approximately 800,000 square feet of prospective new tenants, with about 300,000 square feet of prospects identifying FSP assets on their shortlist [11] - Scheduled lease expirations for the remainder of 2025 total approximately 246,000 square feet, representing about 5.1% of FSP's directly owned portfolio [12] Company Strategy and Development Direction - The company remains focused on advancing leasing of space in its existing property portfolio and pursuing property dispositions to repay debt [6][7] - The company is actively considering operational adjustments and strategic transactions to unlock the full value of its property portfolio [8] Management's Comments on Operating Environment and Future Outlook - Management noted macroeconomic uncertainties, including tariff headlines, that could impact corporate leasing decisions and investment in office properties [7] - The company remains confident in its direction but is open to various strategies to maximize shareholder value [9] Other Important Information - Since initiating its current disposition strategy in late 2020, the company has completed approximately $1.1 billion in property sales, leading to a nearly 75% reduction in corporate indebtedness [13] - National office transaction volumes rose by 22% in 2024 and accelerated in Q1 2025, finishing 31% higher year over year [15] Q&A Session Summary Question: Insight on why leasing was solely executed for renewals during Q1 - Management indicated that new leases had stalled but they are pursuing renewal transactions and expect positive news in Q2 and Q3 [17][18] Question: Which geographies currently depict greater strength in the portfolio? - Management highlighted strong demand in Texas, particularly in Houston, with Dallas showing some improvement, while Denver and Minneapolis are better than previous years but not as robust as Texas suburbs [19]

Financial Performance - Total revenue for the three months ended March 31, 2025, was $27107 thousand[17], compared to $31225 thousand for the three months ended March 31, 2024[17] - Net loss for the three months ended March 31, 2025, was $(21435) thousand[17], compared to a net loss of $(7552) thousand for the three months ended March 31, 2024[17] - Adjusted EBITDA for the three months ended March 31, 2025, was $8418 thousand[29], compared to $11113 thousand for the three months ended March 31, 2024[29] - FFO for the three months ended March 31, 2025, was $2673 thousand[27], compared to $4072 thousand for the three months ended March 31, 2024[27] - AFFO for the three months ended March 31, 2025, was $(693) thousand[27], compared to $(659) thousand for the three months ended March 31, 2024[27] Property Portfolio - As of March 31, 2025, the company owned 14 properties and one consolidated Sponsored REIT[7] - Total owned square footage was 5020216 square feet[40], with a weighted occupied percentage of 664%[40] - Property NOI from owned properties was $5020 thousand[25], compared to $11319 thousand in the prior year quarter[25], a decrease of 76%[25] - Same-store property NOI decreased by 76% to $11319 thousand[25] Debt and Capitalization - Total market capitalization was $434528 thousand[14] - Total debt outstanding (excluding unamortized financing costs) was $250179 thousand[14], representing 576% of total market capitalization[14] - Net Debt to Adjusted EBITDA was 65[14]

Property Leasing and Occupancy - As of March 31, 2025, approximately 69.2% of the company's owned properties were leased, down from 70.3% as of December 31, 2024, with a total of approximately 1,482,000 square feet of vacancy[115] - The leased space in owned and consolidated properties was 66.4% as of March 31, 2025, down from 70.6% as of March 31, 2024[135] - The average GAAP base rents for newly leased office space were $29.64 per square foot, representing a 3.4% increase compared to the previous year[115] - The company expects to renew or sign new leases at current market rates, which may vary from expiring rates due to market conditions[118] Financial Performance - Total revenues decreased by $4.1 million to $27.1 million for the three months ended March 31, 2025, compared to the same period in 2024, primarily due to a decrease in rental revenue from property sales and lease expirations[135] - Total expenses decreased by $4.1 million to $35.5 million for the three months ended March 31, 2025, mainly due to reductions in real estate operating expenses, depreciation, and general administrative expenses[136] - Net loss for the three months ended March 31, 2025, was $21.4 million, compared to a net loss of $7.6 million for the same period in 2024[143] - Funds From Operations (FFO) for the three months ended March 31, 2025, was $2.7 million, down from $4.2 million in the same period in 2024[148] - Property NOI from owned properties decreased by 7.6% to $11.3 million from $12.2 million year-over-year[157] Debt and Financing - Approximately 50.6% of the company's total debt was unhedged variable rate debt as of March 31, 2025, which could be adversely affected by rising interest rates[114] - The company had aggregate outstanding indebtedness of approximately $250.2 million, with loans maturing on April 1, 2026[157] - The company intends to engage in discussions with lenders to extend or refinance existing debt, although there is substantial doubt about its ability to continue as a going concern[158][159] - The company anticipates that proceeds from property dispositions will primarily be used for debt repayment[126] - The company anticipates repaying the Sponsored REIT Loan, which has a principal amount of $24 million, through cash flow from the sale of the underlying property, currently under a purchase agreement for $6.0 million[191] Cash Flow and Liquidity - The total cash and cash equivalents decreased to $31.6 million as of March 31, 2025, down from $42.7 million at the end of 2024, a decrease of $11.1 million[160] - Cash used in operating activities was $5.4 million, primarily due to the net loss and adjustments for non-cash expenses[161] - Cash used in investing activities totaled $4.5 million, primarily for purchases of real estate assets and office equipment[162] Impairment and Asset Sales - An impairment loss of $13.3 million was recorded for a property classified as held for sale, with a gross sales price of $6.0 million expected from a property sale[123] - The company recorded an impairment loss of $13.3 million related to the estimated fair value of a property in Indianapolis, Indiana, which is under a purchase and sale agreement for $6.0 million[139] - The company continues to pursue the sale of select properties to enhance shareholder value and lease vacant spaces[126] Market Conditions and Future Outlook - The company continues to face uncertainties related to the long-term impact of the COVID-19 pandemic on tenant occupancy and rent collection[111] - The company is focusing on infill and central business district office properties in the U.S. sunbelt and mountain west regions, aiming for long-term growth and appreciation[103] Credit Ratings and Covenants - The company's credit rating was downgraded to Caa1 as of March 31, 2025, impacting borrowing costs and financial flexibility[110] - The minimum fixed charge coverage ratio was reduced from 1.50x to 1.25x under the BMO and BofA Credit Agreements[168][177] - The company was in compliance with the financial covenants of the BMO Term Loan as of March 31, 2025[175] - The company was in compliance with all financial covenants under the BofA Credit Agreement and the Note Purchase Agreement[188] Interest Rates and Loan Terms - The interest rate on the BMO Term Loan was 8.00% as of March 31, 2025, and increased to 9.00% on April 1, 2025[173] - The interest rate on the BofA Term Loan was 8.00% as of March 31, 2025, and increased to 9.00% on April 1, 2025[180] - The interest rates on both Series A and Series B Notes increased from 8.00% per annum to 9.00% per annum effective April 1, 2025[187] Stock and Shareholder Value - The company has a stock repurchase program that was authorized for up to $50 million but was discontinued on February 10, 2023[190] - The company reported that rental income exceeded operating expenses for most properties, except for Monument Circle, which had $76,000 in rental income and $293,000 in operating expenses for the three months ended March 31, 2025[196]