Financial Data and Key Metrics Changes - The company reported funds from operations (FFO) of approximately $4.2 million or $0.04 per share for Q1 2024, compared to a GAAP net loss of about $7.6 million or $0.07 per share for the same period [6][11][30]. Business Line Data and Key Metrics Changes - The economic occupancy of the directly owned portfolio was approximately 71.3% at the end of Q1 2024, an increase from 70.1% at the end of Q4 2023, attributed to new lease commencements, partially offset by the impact of a sold property [17][30]. - FSP finalized approximately 197,000 square feet of total leasing during Q1 2024, which included about 136,000 square feet of renewals and expansions along with 61,000 square feet of new tenant leases [31][30]. Market Data and Key Metrics Changes - The market for office property sales remains challenging, with a reported 56% decline in completed office property sales activity year-over-year [21][30]. - There has been an increase in overall new tenant activity in FSP's assets located in suburban Houston and Downtown Denver over the past 5 to 6 months [18][30]. Company Strategy and Development Direction - The company continues to focus on property dispositions and leasing efforts to generate potential new sources of shareholder value, despite the challenging capital markets and office leasing environment [4][16]. - Management emphasized the importance of being cautious with prospective disposition information to maximize achieved values for shareholders in the current investment climate [23][30]. Management's Comments on Operating Environment and Future Outlook - Management noted that the back-to-office attendance post-COVID is improving but varies significantly across industries and markets [5][15]. - The company remains optimistic about its ability to create increased shareholder value through ongoing property dispositions and leasing activities [16][49]. Other Important Information - The company is currently tracking over 700,000 square feet of prospective new tenants, including approximately 350,000 square feet of prospects that have identified FSP assets on their respective shortlists [31][30]. - Management indicated that the perceived creditworthiness of in-place tenants is a significant consideration for potential buyers in the current market [22][30]. Q&A Session Summary Question: Is there an expectation for continued leasing velocity? - Management indicated that it depends on various factors, but there has been increased engagement with tenants, particularly smaller ones looking to grow [25][37]. Question: What are the trends in tenant improvement allowances? - Management noted that tenant improvement costs have remained relatively static over the past 5 to 10 years, despite inflation and supply chain issues [27][53]. Question: Are there geographical markets that are stronger or weaker? - Management observed stronger demand in suburban and Sunbelt markets, while urban areas are catching up but still lagging [56][30]. Question: Are there any buyers interested in redeveloping properties for multifamily use? - Management has not seen buyers specifically looking to redevelop properties for conversion but acknowledged that it is more common in downtown areas than in suburban properties [45][30].

Franklin Street Properties (FSP) came out with quarterly funds from operations (FFO) of $0.04 per share, in line with the Zacks Consensus Estimate. This compares to FFO of $0.08 per share a year ago. These figures are adjusted for non-recurring items.A quarter ago, it was expected that this hybrid real estate investment trust would post FFO of $0.07 per share when it actually produced FFO of $0.07, delivering no surprise.Over the last four quarters, the company has not been able to surpass consensus FFO est ...

Exhibit 99.2 Franklin Street Properties Corp. Supplemental Operating & Financial Data 401 Edgewater Place ~Wakefield, MA 01880 781.557.1300.~ www.fspreit.com First Quarter 2024 Table of Contents | | Page | | Page | | --- | --- | --- | --- | | Company Information | 3 | Tenant Analysis and Leasing Activity | | | | | Tenants by Industry | 17 | | Key Financial Data | | 20 Largest Tenants with Annualized Rent and Remaining Term | 18-19 | | Financial Highlights | 4 | Leasing Activity | 20 | | Income Statements | ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2024. 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. (Exact name of registrant as specified in its charter) (State or othe ...

beklaus/E+ via Getty ImagesFranklin Street Properties (NYSE:FSP) has dipped around 16% since I last covered the ticker with a sell rating. The office REIT is now changing hands for 7.4x multiple to its annualized fiscal 2023 fourth quarter funds from operations ("FFO"). FFO was $0.07 per share in the fourth quarter, dipping $0.03 versus its year-ago comp of $0.10 per share. This multiple is markedly lower than FSP's prior 8.8x multiple from when I last covered the ticker. It comes as the REIT looks to a ...

Franklin Street Properties (FSP) came out with quarterly funds from operations (FFO) of $0.07 per share, in line with the Zacks Consensus Estimate. This compares to FFO of $0.10 per share a year ago. These figures are adjusted for non-recurring items.A quarter ago, it was expected that this hybrid real estate investment trust would post FFO of $0.07 per share when it actually produced FFO of $0.07, delivering no surprise.Over the last four quarters, the company has not been able to surpass consensus FFO est ...

Financial Performance - Rental revenue for Q4 2023 was $34.519 million, a decrease of 6.0% from $36.903 million in Q3 2023[11] - Total revenue for Q4 2023 was $34.771 million, down from $36.903 million in the previous quarter, reflecting a decline of 5.8%[11] - The company reported a net income of $3.575 million for Q4 2023, a significant recovery from a net loss of $45.671 million in Q3 2023[11] - Adjusted EBITDA for Q4 2023 was $13.112 million, slightly down from $13.718 million in Q3 2023[11] - Funds from Operations (FFO) for Q4 2023 were $6.938 million, compared to $7.509 million in Q3 2023, a decrease of 7.6%[11] - Total revenue for the year ended December 31, 2023, was $145.707 million, a decrease from $165.615 million in the previous year, representing a decline of approximately 12%[15] - Net income for the year ended December 31, 2023, was a loss of $48,110,000, compared to a net income of $1,094,000 in 2022[19] - Net income for the three months ended March 31, 2023, was $2.406 million, compared to a net loss of $8.420 million for the same period in the previous year[15] - Net income for the three months ended March 31, 2023, was $2,406,000, compared to a net loss of $48,110,000 for the year ended December 31, 2022[31] Market Capitalization and Debt - The company’s total market capitalization increased to $669.782 million as of December 31, 2023, up from $586.346 million in the previous quarter[11] - The debt to total market capitalization ratio improved to 60.5% in Q4 2023, down from 67.4% in Q3 2023[11] - The company reported a net debt of $386.890 million as of March 31, 2023, down from $504.017 million in the previous year, indicating improved financial health[28] - The company’s debt as of December 31, 2023, stands at $405,000,000[79] - Total debt outstanding as of December 31, 2023, was $405,000,000, with an average interest rate of 6.56%[34] Property and Leasing Activity - As of December 31, 2023, the company owned a portfolio of 18 properties totaling 5.8 million square feet[9] - The percentage of owned properties leased was 74.0% as of December 31, 2023, a slight decrease from 74.8% in the previous quarter[11] - New leasing activity for the year ended December 31, 2023, was 228,000 square feet, while renewals and expansions totaled 478,000 square feet, resulting in a total leasing activity of 706,000 square feet[56] - The average GAAP rent on leasing for the year was $29.71, reflecting a 7.4% increase over the previous year's average[56] - The largest tenant, CITGO Petroleum Corporation, occupies 248,399 square feet, contributing $7,064,468 in annualized rent, which is 5.6% of the total[52] - The company has 1,846,680 square feet leased to its 20 largest tenants, representing 32.0% of total leased square feet[52] - The company has 1,444,903 square feet of owned property vacant as of December 31, 2023[62] Cash and Expenses - Cash and cash equivalents increased to $127.880 million as of September 30, 2023, up from $10.983 million as of December 31, 2022[17] - The company incurred total expenses of $171.009 million for the year ended December 31, 2023, compared to $187.941 million in the previous year, indicating a reduction of approximately 9%[15] - The company reported a tax expense of $279,000 for the year ended December 31, 2023, compared to $204,000 in the previous year[15] - The company reported total capital expenditures of $35,291,000 for the year ended December 31, 2023, compared to $59,379,000 for the year ended December 31, 2022, indicating a decrease of approximately 40.5%[67] Non-GAAP Measures - The Company evaluates performance based on Funds From Operations (FFO), which is defined as net income or loss excluding certain gains and losses, plus depreciation and amortization[81] - FFO should not be considered an alternative to net income or loss or as an indicator of the Company's financial performance[82] - The Company also evaluates performance based on Adjusted Funds From Operations (AFFO), which includes FFO adjusted for non-cash items and recurring capital expenditures[91] - AFFO should be examined in connection with net income or loss and cash flows from operating, investing, and financing activities[93] - The Company provides property performance based on Net Operating Income (NOI), which is defined as net income or loss plus certain expenses and excluding non-property specific income and expenses[88] - NOI may not be comparable to NOI reported by other REITs due to different definitions[88] - EBITDA is defined as net income or loss plus interest expense, income tax expense, and depreciation and amortization expense[86] - Adjusted EBITDA excludes certain gains and losses and is presented as a supplemental disclosure regarding liquidity[86] - The Company believes that net income or loss is the most directly comparable financial measure to EBITDA and Adjusted EBITDA[86] - The Company emphasizes that all non-GAAP measures should not be considered as substitutes for measures prepared in accordance with GAAP[82]

Property Sales and Gains - The company sold an office property in Elk Grove, Illinois for a gross sales price of $29.1 million, resulting in a gain of approximately $8.4 million[19]. - On October 26, 2023, the company sold an office property in Plano, Texas for a gross sales price of $48 million, achieving a gain of $10.6 million[19]. - The company reported a loss of approximately $18.9 million from the sale of an office property in Miami, Florida, which sold for $68.0 million[19]. - The company sold two office properties in Broomfield, Colorado in 2022 for aggregate gross sales proceeds of $102.5 million, achieving a gain of $24.1 million[19]. Financial Condition and Debt - As of December 31, 2023, the company had $90 million outstanding under the BofA Term Loan, with a variable interest rate based on SOFR and a 5.00% floor on SOFR[64]. - As of December 31, 2023, the company had $115 million outstanding under the BMO Term Loan, also with a variable interest rate based on SOFR and a 5.00% floor on SOFR[65]. - The company has one remaining secured loan to a Sponsored REIT, which is anticipated to be repaid through cash flow from property operations or sale of the underlying property[58]. - The company may face reduced cash available for distribution to stockholders if it is required to keep balances outstanding on existing debt or seek new debt[58]. - The company’s financial condition could be adversely affected if it is unable to refinance the BofA Term Loan, the BMO Term Loan, the Series A Notes, or the Series B Notes upon their respective maturities[59]. - Failure to comply with covenants in the documents evidencing the BofA Term Loan, the BMO Term Loan, the Series A Notes, or the Series B Notes could adversely affect the company’s financial condition[60]. - A default under the loan documents could result in difficulty financing growth and a reduction in cash available for distribution to stockholders[63]. - An increase in interest rates would raise interest costs on variable rate debt, impacting the company’s ability to refinance existing debt[64]. - The company currently holds a corporate credit rating below investment grade from Moody's, which could limit access to funding sources and increase costs of obtaining funding[67]. Impact of COVID-19 and Economic Risks - The long-term impact of the COVID-19 pandemic continues to present material uncertainty regarding the performance of the company's properties[15]. - The long-term impact of the COVID-19 pandemic continues to create uncertainty, potentially affecting tenant rent payments and demand for commercial real estate[70]. - As of December 31, 2023, approximately 19% of tenants operate in the energy services industry, and 13% in information technology, indicating a concentration risk that could impact rental payments during economic downturns[82]. - The geographic distribution of properties shows 41% in the South and 37% in the West, with significant concentrations in Denver (37%), Houston (20.6%), and Dallas (17.6%), exposing the company to regional economic risks[83]. - The company may face significant delays in reletting vacant space, which could result in reduced distributions to stockholders, as up to 20% of rental revenue could expire each year[81]. - The company has experienced tenant defaults, including a write-off charge of $3.1 million due to a tenant's bankruptcy, which could negatively impact cash available for distribution[77]. - Rising interest rates could decrease the amount third parties are willing to pay for the company's assets, limiting portfolio adjustments in response to economic changes[66]. - The company faces risks from climate change, which could increase operational costs and impact demand for office space[86]. Legal and Compliance Risks - Security breaches could compromise sensitive data, leading to significant financial exposure and potential regulatory penalties[87]. - The company faces risks related to compliance with the Americans With Disabilities Act, which may require significant capital expenditures[91]. - The company has been managing its legal affairs and compliance with financial covenants to mitigate risks associated with its debt obligations[60]. Corporate Governance and Management - The company aims to increase shareholder value by pursuing the sale of select properties and leasing vacant spaces[18]. - The company’s executive team has extensive experience in finance and investment management, contributing to its strategic objectives and business plan execution[49]. - The company adopted a variable quarterly dividend policy in 2022, allowing the Board of Directors to determine dividends based on various factors, including annual taxable income estimates[95]. - The company has a change in control plan that may discourage acquisition proposals, potentially inhibiting changes in control[100]. Derivatives and Interest Rate Management - The interest rate on the BofA Revolver was 8.47% per annum as of December 31, 2023, with $90 million drawn on it[284]. - If market rates on the BMO Term Loan increased by 10%, future earnings and cash flows would decrease by approximately $1.0 million[287]. - The company terminated all outstanding interest rate swaps applicable to the BMO Term Loan in February 2023, receiving approximately $4.3 million[287]. - The company requires derivatives contracts to be with counterparties that have investment grade ratings[289]. - The company does not anticipate any counterparty failing to meet its obligations, but there are risks associated with hedging strategies[289]. - The total contractual variable rate borrowings as of December 31, 2023, amount to $405,000[292]. - The BofA Revolver has a total of $90,000 due in 2024[292]. - The BMO Term Loan Tranche B has a total of $115,000 due in 2024[292]. - The Series A Notes have a total of $116,000 due in 2024[292]. - The Series B Notes have a total of $84,000 due in 2027[292]. - The effective portion of the derivatives' fair value is recorded in other comprehensive income[290]. - The notional value of the 2019 BMO Interest Rate Swap is $165,000 with a strike rate of 2.39%[288]. - The fair value of the 2019 BMO Interest Rate Swap as of December 31, 2022, was $4,358[288].

[Part I. Financial Information](index=3&type=section&id=Part%20I.%20Financial%20Information) [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The company reported a significant net loss of $51.7 million, driven by property sale losses and impairments Consolidated Balance Sheet Highlights (in thousands) | Account | Sep 30, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | **Total Assets** | **$1,151,773** | **$1,241,666** | | Real estate assets, net | $921,581 | $1,103,248 | | Assets held for sale | $132,659 | $— | | Cash and cash equivalents | $13,043 | $6,632 | | **Total Liabilities** | **$440,447** | **$472,930** | | Bank note payable | $80,000 | $48,000 | | Term loans payable, net | $114,610 | $164,750 | | **Total Stockholders' Equity** | **$711,326** | **$768,736** | Consolidated Statements of Operations Highlights (in thousands) | Metric | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :--- | :--- | :--- | | Total Revenues | $110,936 | $124,404 | | Total Expenses | $130,612 | $142,401 | | Gain (loss) on sale of properties, net | $(32,085) | $24,077 | | **Net Income (Loss)** | **$(51,685)** | **$3,978** | | **Net Income (Loss) per Share** | **$(0.50)** | **$0.04** | Consolidated Statements of Cash Flows Highlights (in thousands) | Cash Flow Category | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :--- | :--- | :--- | | Net cash provided by operating activities | $11,545 | $9,354 | | Net cash provided by investing activities | $14,086 | $63,972 | | Net cash used in financing activities | $(19,220) | $(105,360) | | **Net increase (decrease) in cash** | **$6,411** | **$(32,034)** | [Note 1: Organization, Properties, and Basis of Presentation](index=10&type=section&id=Note%201.%20Organization%2C%20Properties%2C%20Basis%20of%20Presentation%2C%20Financial%20Instruments%20and%20Recent%20Accounting%20Standards) The company's portfolio shrank to 20 properties, and management's plans alleviate going concern doubts - As of September 30, 2023, the company's portfolio consisted of **20 properties** with 6.2 million rentable square feet, a decrease from 22 properties and 6.4 million square feet a year prior[25](index=25&type=chunk) - Effective January 1, 2023, the company consolidated the Sponsored REIT (Monument Circle) as a Variable Interest Entity (VIE), recognizing a gain of approximately **$0.4 million**[37](index=37&type=chunk)[39](index=39&type=chunk)[41](index=41&type=chunk) - Management has concluded that its plans to dispose of assets and extend/refinance debt are probable of being achieved, **alleviating substantial doubt** about the company's ability to continue as a going concern[30](index=30&type=chunk)[49](index=49&type=chunk) [Note 2: Related Party Transactions](index=18&type=section&id=Note%202.%20Related%20Party%20Transactions%20and%20Investments%20in%20Non-Consolidated%20Entities) The consolidation of the Sponsored REIT eliminated a related-party interest income stream in 2023 - Interest income and fees from the Sponsored REIT Loan were approximately **$1.37 million** for the nine months ended September 30, 2022, but **$0 for the same period in 2023** due to consolidation[59](index=59&type=chunk) - The maturity of the Sponsored REIT Loan was extended multiple times, most recently to **September 30, 2024**[60](index=60&type=chunk) Allowance for Credit Losses Roll-Forward (in thousands) | | For the Nine Months Ended Sep 30, 2023 | For the Nine Months Ended Sep 30, 2022 | | :--- | :--- | :--- | | Beginning allowance | $(4,237) | $— | | Additional increases | — | $(1,857) | | Reductions | 4,237 | — | | **Ending allowance** | **$—** | **$(1,857)** | [Note 3: Debt Structure and Covenants](index=20&type=section&id=Note%203.%20Bank%20Note%20Payable%2C%20Term%20Loans%20Payable%20and%20Senior%20Notes) Key credit facilities were amended, extending maturities to 2024 and increasing interest rates - On Feb 10, 2023, the BMO Term Loan maturity was extended to Oct 1, 2024, and the interest rate was changed to **300 basis points over SOFR**[65](index=65&type=chunk) - On Feb 10, 2023, the BofA Revolver maturity was also extended to Oct 1, 2024, with borrowing capacity reduced to **$150 million** and the interest rate increased to **300 basis points over SOFR**[72](index=72&type=chunk) - The company has **$200 million in senior unsecured notes**, consisting of $116 million Series A Notes due Dec 20, 2024, and $84 million Series B Notes due Dec 20, 2027[89](index=89&type=chunk)[93](index=93&type=chunk) - Both the BMO and BofA credit agreements restrict quarterly dividends to **$0.01 per share**, though exceptions are permitted to maintain REIT status[70](index=70&type=chunk)[77](index=77&type=chunk) [Note 4: Derivatives and Hedging](index=28&type=section&id=Note%204.%20Financial%20Instruments%3A%20Derivatives%20and%20Hedging) The company terminated all interest rate swaps in February 2023 and currently holds no derivatives - On February 8, 2023, the company terminated its interest rate swaps and received aggregate proceeds of approximately **$4.3 million**[95](index=95&type=chunk) - As of September 30, 2023, the company had **no outstanding derivative instruments**[95](index=95&type=chunk) - The company estimates that approximately **$1.4 million** will be reclassified from AOCI into earnings as a reduction to interest expense within the next 12 months[100](index=100&type=chunk) [Note 6: Stockholders' Equity](index=31&type=section&id=Note%206.%20Stockholders'%20Equity) The quarterly dividend remains at $0.01 per share and the stock repurchase program was discontinued Dividends Per Share Comparison | Period | Dividend Per Share | | :--- | :--- | | Q1 2022 | $0.09 | | Q2 2022 | $0.09 | | Q3 2022 | $0.01 | | Q1 2023 | $0.01 | | Q2 2023 | $0.01 | | Q3 2023 | $0.01 | - The company's stock repurchase program was **discontinued on February 10, 2023**, with no shares repurchased in the first nine months of 2023[110](index=110&type=chunk) [Note 9: Property Dispositions and Assets Held for Sale](index=34&type=section&id=Note%209.%20Disposition%20of%20Properties%20and%20Asset%20Held%20for%20Sale) The company is actively selling properties to reduce debt, recording a $39.7 million impairment in Q3 - In 2023, the company sold an office property in Elk Grove, IL for **$29.1M (gain of $8.4M)** and a property in Charlotte, NC for **$9.2M (loss of $0.8M)**[128](index=128&type=chunk) - During Q3 2023, the company entered agreements to sell properties in Miami, FL and Atlanta, GA, resulting in a recorded **impairment of $39.7 million**[129](index=129&type=chunk)[130](index=130&type=chunk) - As of September 30, 2023, three properties were classified as assets held for sale, totaling **$132.6 million** on the balance sheet[130](index=130&type=chunk)[131](index=131&type=chunk) - Subsequent to the quarter end, the company sold an office building in Plano, Texas, for **$48.0 million**, realizing a gain of approximately **$10.6 million**[133](index=133&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=38&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management focuses on asset sales to manage liquidity and address significant 2024 debt maturities [Overview and Strategy](index=38&type=section&id=Overview%20and%20Strategy) The company's strategy is to sell select properties to repay debt and enhance shareholder value - The company's current strategy is to invest in infill and central business district office properties in the **U.S. sunbelt and mountain west regions**[136](index=136&type=chunk) - A key strategic goal is to increase shareholder value by **selling select properties** and using the proceeds primarily for debt repayment[139](index=139&type=chunk) - The company's credit rating was **downgraded by Moody's twice in 2023**, expected to increase annual interest costs by approximately **$1.0 million**[144](index=144&type=chunk) [Trends and Uncertainties](index=40&type=section&id=Trends%20and%20Uncertainties) The company faces material uncertainty from work-from-home trends and adverse economic conditions - The long-term impact of the COVID-19 pandemic, including **work-from-home policies**, continues to present material uncertainty and risk[145](index=145&type=chunk) - Economic conditions, including **inflation and rising interest rates**, are contributing to recessionary concerns and adversely affecting demand for office space[146](index=146&type=chunk)[148](index=148&type=chunk) - As of September 30, 2023, approximately **49.4% of the company's total debt was unhedged variable rate debt**, exposing it to rising interest costs[148](index=148&type=chunk) - Owned properties were **74.8% leased** as of September 30, 2023, a decrease from 75.6% at year-end 2022[149](index=149&type=chunk)[151](index=151&type=chunk) [Results of Operations](index=47&type=section&id=Results%20of%20Operations) A significant impairment charge drove a Q3 net loss of $45.7 million despite lower operating expenses Comparison of Three Months Ended September 30 (in thousands) | Metric | 2023 | 2022 | Change | | :--- | :--- | :--- | :--- | | Total Revenues | $36,903 | $40,836 | $(3,933) | | Total Expenses | $42,794 | $46,810 | $(4,016) | | Gain (loss) on sale/impairment | $(39,671) | $24,077 | $(63,748) | | **Net Income (Loss)** | **$(45,671)** | **$17,246** | **$(62,917)** | Comparison of Nine Months Ended September 30 (in thousands) | Metric | 2023 | 2022 | Change | | :--- | :--- | :--- | :--- | | Total Revenues | $110,936 | $124,404 | $(13,468) | | Total Expenses | $130,612 | $142,401 | $(11,789) | | Gain (loss) on sale/impairment | $(32,085) | $24,077 | $(56,162) | | **Net Income (Loss)** | **$(51,685)** | **$3,978** | **$(55,663)** | [Non-GAAP Financial Measures (FFO & NOI)](index=53&type=section&id=Non-GAAP%20Financial%20Measures%20(FFO%20&%20NOI)) Funds From Operations decreased to $23.0 million, while Same Store NOI increased by 6.4% Funds From Operations (FFO) Reconciliation (in thousands) | | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :--- | :--- | :--- | | Net income (loss) | $(51,685) | $3,978 | | (Gain) loss on sale/impairment | 32,085 | (24,077) | | Depreciation and amortization | 42,742 | 48,916 | | Other adjustments | (394) | 1,857 | | **NAREIT FFO** | **$22,748** | **$30,674** | | Lease Acquisition costs | 278 | 206 | | **Funds From Operations** | **$23,026** | **$30,880** | - For the nine months ended September 30, 2023, **Same Store NOI increased 6.4%** year-over-year to $48.1 million from $45.2 million[198](index=198&type=chunk) [Liquidity and Capital Resources](index=57&type=section&id=Liquidity%20and%20Capital%20Resources) The company faces significant liquidity challenges with $195 million in debt maturing in October 2024 - As of September 30, 2023, the company had approximately **$195 million in debt maturing on October 1, 2024**, under its BofA Revolver and BMO Term Loan[204](index=204&type=chunk) - The company plans to use proceeds from property dispositions to repay debt, with pending sales expected to generate over **$140 million**[205](index=205&type=chunk)[206](index=206&type=chunk) - Management is actively engaged in discussions with lenders to **extend and/or refinance** the BofA Revolver and BMO Term Loan before their October 2024 maturity[207](index=207&type=chunk) - The company also has **$116 million in Series A Notes maturing on December 20, 2024**, which will be a focus for future liquidity planning[209](index=209&type=chunk)[216](index=216&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=71&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is primarily exposed to interest rate risk from its unhedged floating-rate debt - The company **terminated all its interest rate swaps** on February 8, 2023, leaving its variable-rate debt unhedged[258](index=258&type=chunk) - A hypothetical **10% increase in market interest rates** would increase annual interest expense by approximately **$1.7 million**[257](index=257&type=chunk)[258](index=258&type=chunk) Debt Maturities as of September 30, 2023 (in thousands) | Debt Instrument | Total | Due in 2024 | Due in 2027 | | :--- | :--- | :--- | :--- | | BofA Revolver | $80,000 | $80,000 | $— | | BMO Term Loan | $115,000 | $115,000 | $— | | Series A Notes | $116,000 | $116,000 | $— | | Series B Notes | $84,000 | $— | $84,000 | | **Total** | **$395,000** | **$311,000** | **$84,000** | [Controls and Procedures](index=73&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of September 30, 2023 - Based on an evaluation as of September 30, 2023, the CEO and CFO concluded that the company's disclosure controls and procedures were **effective**[264](index=264&type=chunk) - **No material changes** to the company's internal control over financial reporting occurred during the third quarter of 2023[265](index=265&type=chunk) [Part II. Other Information](index=74&type=section&id=Part%20II.%20Other%20Information) [Legal Proceedings](index=74&type=section&id=Item%201.%20Legal%20Proceedings) Ongoing legal proceedings are not expected to have a material adverse effect on the company - The company states that any ongoing legal proceedings are **not expected to have a material adverse effect** on its financial condition or results[267](index=267&type=chunk) [Risk Factors](index=74&type=section&id=Item%201A.%20Risk%20Factors) A new risk factor highlights substantial doubt about the company's ability to continue as a going concern - A new risk factor has been identified regarding **substantial doubt about the company's ability to continue as a going concern** due to the October 1, 2024 debt maturities[269](index=269&type=chunk) - Failure to extend, refinance, or repay the **~$205 million in debt maturing in October 2024** could lead to events of default[271](index=271&type=chunk) - A **'going concern' qualification** in the year-end 2023 audited financial statements would violate debt covenants, triggering an event of default and accelerating all debt obligations[273](index=273&type=chunk)[274](index=274&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=76&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company made no equity repurchases in Q3 2023 as the program was previously discontinued - **No repurchases of equity securities** were made during the third quarter of 2023[276](index=276&type=chunk) [Other Items (Defaults, Mine Safety, Other Information)](index=76&type=section&id=Other%20Items) The company reported no defaults, mine safety issues, or new insider trading plan adoptions - The company reported **'None'** for Item 3 (Defaults Upon Senior Securities) and Item 4 (Mine Safety Disclosures)[277](index=277&type=chunk)[278](index=278&type=chunk) - No directors or officers adopted or terminated a **Rule 10b5-1 trading arrangement** during the quarter[279](index=279&type=chunk) [Exhibits](index=77&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including certifications and data files

Franklin Street Properties Corp. (NYSE:FSP) Q2 2023 Earnings Conference Call August 2, 2023 11:00 AM ET Company Participants Scott Carter - General Counsel John Demeritt - Chief Financial Officer George Carter - Chief Executive Officer John Donahue - President, FSP Property Management Jeff Carter - President and Chief Investment Officer Conference Call Participants Steven Dumanski - Janney Montgomery Scott Craig Kucera - B. Riley Securities Operator Good morning, and welcome to the Franklin Street Propertie ...