Franklin Street Properties (FSP)

Scott Carter Executive Vice President, General Counsel and Secretary
John Demeritt Executive Vice President, Chief Financial Officer
George Carter CEO and Chairman of the Board
John Donahue Executive Vice President
Jeffrey Carter President, Chief Investment Officer
Leo ("Toby") Daley, Jr. Senior Vice President
William Friend Senior Vice President
Craig Kucera B. Riley Securities
Call transcript
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Good day, and welcome to the Franklin Street Properties Third Quarter 2021 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions]. Please note today's event is being recorded. I'd now like to turn the conference over to Scott Carter, General Counsel. sir. ahead go Please

Scott Carter

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

may Officer; forward-looking future President Litigation important statements Joining our John joining John Financial is purposes in Chief Reform this statements Donahue, year as Executive Harbor Carter, me morning those the for may Property Officer; Demeritt, are prospects Safe file morning this Securities President of XX-K XXXX. of and constitute that our Factors of including Management. Officer; the Chief Property the from on Please Annual Management. Daley may forward-looking FSP which results various the various a SEC. we our Investment factors, Actual both remarks discussed result of and under George XXXX, FSP and Risk on Report XX, Friend, the those me of Act differ Carter, Will Jeff and Private Toby expectations, make these company section about note Form for for are by our with Presidents ended Executive the Also plans materially Chief that provisions Vice indicated December of

GAAP income Investor www.fspreit.com. available which of financial at disclaims as be from the press should yesterday's estimates to company's of to obligation this In company statements are XX, specifically as operations FFO. website of any contained XXXX, FFO as to Relations forward-looking call, is Reconciliations views net may these forward-looking company's addition, today. to while upon do Any not in elect date our statements any these we funds during of representing non-GAAP forward-looking the represent times other or it measures and statements, the on only section refer so. subsequent expectations or today, November At release, relied to the may update

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

John Demeritt

our good pass everyone. quarter give as a And I'll brief our reported our for operations morning in of $X.XX Scott. which overview call from can XX-Q, or comments reminder, supplemental We $XX.X on a the I'm his website. will And be to 'XX. mentioned today the per earnings to found George very funds Thank you, afterwards, third million, of to third refer And FFO our as for release going share results. quarter of package or comments. Scott

During In of our at to drawn use proceeds property QX, our million we XXXX October, the about of used gain maturity. $XXX and at million a gain proceeds a debt million $XX.X balance against of $XX repay the $XXX and million three sold XXXX properties debt the revolver we another million the of million our completed and against maturity. to $XX sale $X.X of net repay of

unsecured. we As we as debt $XXX.X quarter have on from year debt of cash line a total about of $XXX our of million hand a ago. is At million. our outstanding end, all availability on today, down and of reminder, outstanding And $X liquidity had billion between

I'll XXXX, with call in maturity George? we matures can revolver that a year. And our turn Although that, extend for George. to over the

George Carter

by XX, to of end XXX earnings at sale Thank on XXX,XXX departure Jones the the call. Pershing XXXX since Significant XXXX Properties occurring includes FSP quarter XXXX at tenant a lease Property feet John. Street again square Franklin for And Atlanta quarter recent substantially the you, the our backfills third the new and vacancy with a welcome of left of activity $XXX.X This Peachtree Midtown lease second approximately Day. October of million Park. new

and approximately total in October of approximately September proceeds of we have Between $XXX XXXX XX, XXXX, for Aggregate $X have a October to sold our increased XXXX $XXX value by not has sold of currently we million. pricing pool $XXX Consequently, indebtedness billion gross potential for come our of $XXX we total of XXXX a conviction to a are Demand $XXX has a to buyers. assets our that approximately million. diverse from aggregate XX, million. of real the from new properties have on approximately eight the XX, As million our XXXX $XXX million end range unlocking reduced disposition is estate we for XX% top embedded approximately shareholders strong reinforced our million reflected range of of that price from the property guidance stock. previous to in approximately our

that consider achieved a generally is that emphasize on upside assets. in our important capital properties of a weighted analysis be term but scenario asset properties to of primarily factors, to-date that our return potential for dispositions selecting period. that it estimated specific a portfolio view that future costs, disposition ownership XXXX potential and think be on a the is indicative pricing I potential intermediate could could of objectives currently variety against value estate our criteria and short for We hold believe of real We net total longer-term is to achieved specific. achieved pricing continuing longer the of our it's over

not accurately to We value assets. our estate the our underlying the continue stock current that reflect price believe real common of of does

our our our estimates believe Donahue, to continuing Management. select shareholder and net value it and required those disparity to estate real future to levels our benchmark on of reduction, of our value market long a Property as We applied common proceeds estate $XX of see of our properties. share exceed we we net remains our sale liabilities would seeking real turn of requirements portfolio have general valuation is based through over dispositions from to-date continuing FSP and portfolio. as across of as meet outstanding the purposes. other to value repurchases the achieved President assets, With it, of will as dispositions per We using of comments, that stock stock call REIT on corporate debt that use to continued intend so our special dividends the to And pricing for strategy continue John? intention price any wide increase I the John

John Donahue

FSP the the Houston. the you, Thank and end at Good quarter, compared secondarily in morning, leased of at primarily second in third of square as new end everyone. The quarter. The of the approximately to portfolio was XX.X% is feet leasing, XX.X% George. achieved and Atlanta to XXX,XXX leased Dallas increase attributable

vacated During over which XXX,XXX anchor the the approximately quarter, feet currently XXX,XXX of FSP Pershing the second space Park, quarter. a Jones Day an tracking backfilling will lease third in and for building the is tenant potential majority prospects feet of by FSP a assets of new renewals. signed tenant occupy their square of choice approximately or of XXX,XXX intent. short an tenant FSP new feet have square XXX,XXX letter Approximately of identified top as FSP feet prospects listed finalized square square the

and by to meaningful leasing activity FSPs in growth healthy continue prospective be of We encouraged tenants. pipeline

feet first and leasing the new nine During renewals. calendar XXXX, deals XXX,XXX of of months over total FSP finalized including square has

final Carter. three coupled meaningful quarter make the we the you. which will square demand is assets, Thank exposure, positioned turn next in to I of it XX,XXX of believe our regarding four to that FSPs the absorption now that to to the approximately months. rollover X% limited progress FSP has well is portfolio XXXX, less with Jeff over over of improving For Due for feet space than portfolio. tenants expiring,

Jeffrey Carter

properties Atlanta specifically, from since here group $XX,XXX,XXX, additional normal also morning, that million, Corporate John. include Timberlake office we and expectations. St. respective sales and complete call, closing that guidance. Point properties, and demand total a diverse aggregate, for Building for of we our the everyone. pricing our and original at And last quarterly property Indianapolis $XX everyone two last quality Meadow Louis we to conditions, Virginia you, XXX in on at have agreement, approximately the purchase expect million. our is and Greater both Northern well-located for high importantly, sales River now FSP and in totaling In subject sold Good $XXX properties and Properties FSP Street quarter. Stonecroft safe sale More disposition are approximately $XXX our buyers. to strong continuing under achieving remains the from Thank exceeded Crossing Franklin approximately fourth our is to in $XXX Center and million, has exceeding for year that We during hope in for million Peachtree comments healthy. quarter, see their

Given to the compelling guidance demand top FSP million. increased the and experienced, pricing disposition end being approximately $XXX our of range

rate cap own achieved our in approximately such at closed pricing sales our to of affirmed dispositions valuations indeed weighted excess in belief for average As an during FSP sold that us mentioned, shareholders. and aggregate value X.X%. market capturing To-date embedded our dispositions have have place are and 'XX, have our pending of

place to average occupancy Point cap reduce weighted future pending weighted the about the stronger Stonecroft company to shareholders. included, and has Meadow disposition a materially corporate been the in rate With for our adjust and will X.X% work approximately at and objective sales indebtedness of primary to position and average The FSP of at our XX%. of returns opportunities

Over for for statement an market, shareholders. we'd open to specific and West the asset call have intended such And with Sunbelt the our thank markets, and capture during property Sunbelt that sales Rocco? like including for to that, a we within U.S. quality is up our U.S. value where committed And today. viewed the Mountain you the call our this not commitment located listening high long-term, to invested decision but should at we made embedded now instead questions, many owned FSP for conference as earnings remains to time, any be XXXX properties Accordingly, years. dynamic occur in about to


Securities. Today's with sir. ahead. Please Thank you. [Operator B. Riley Yes, from Craig comes question Kucera go first Instructions]

Craig Kucera

morning, that you year-to-date might have completed a at what sales the good occur? they… other dividend be it point Hi, based sense if those on are of to Yes. what scheduled special might John, and be Would sales the guys. this do

John Demeritt

lot We John. and is we involved divulge is that don't up information. once coming will right have this calculations that we an there or can with amount of with make decision board more a Yes, have now the that

Craig Kucera

more you. Okay. George, question a just for

Just rate the your is from is perspective, Board the NAV we would given but basis, considering where cap alternatives an on that implied this stock at a are strategic assets trading point? undervalued agree

George Carter

Hi, Craig.

avenues all Board value best avenues for considering to your including and So the try answer create alternatives. always question yes, the is, the strategic to all to shareholders consider does is short

Craig think as back, Just don't earnings to take calls I should -- the last one sure few as that probably because make this and though, I I've made over necessarily to step have. clear

potential for for revolves have cetera we core, tremendous many around pandemic and truly great Our top properties to value COVID the our strategy great which create at then truly leasing reopen. our of trying our those immense, the in that starts locations, et at shareholders the appreciation, markets properties best of once belief have

for As whatever pricing the became the is disposing of the pandemic term a stock for came And position have that our best we we have primary indebtedness. level the create may not for out the from the the we those have nearer that the strategic to and believe And has best realize to dispositions. this be front of those is really still that we -- coming to to for value. that and and our with post-COVID path post-COVID properties was believe that viewed And to recognize, best that best was some enough. can indebtedness we believe been have including the the does to of the have sheet in upon assets to balance reduce with the out clear way paths has believe some add believe Reducing at path intermediate us, some that completely path best add dispose the and that we not dispose continues that a these paths, into and do year, done in potential give flexibility we are properties to take power would us, to COVID all that that shareholders term our to coming us and true other remade us be Fortress it really further perspective that of of our from looked we have intermediate opportunity paths, dispositions do the shareholders. objective market properties by best of and company our Craig, as as potential shareholders value. maximum that All objective. that lot potential near we to is our value keep of term come to properties markets constantly we And as or

Craig Kucera

take your made it saying, of net you would what and Yes, of parentally asset think a alternatives given would value the traded had for it that with to a if so what to worth in shareholders guys their have you portfolio small steep and our guys guess, like process a it sense getting value. quite at and strategic that REITs you cap better doesn't accelerate lot have am guys your really it and maybe I discount are is I take think guess relative looking I in sound more that at $XX to engaged have NAV? their third-party to portfolio entering success into amount much other sense. than you fairly frankly, we

George Carter

with constantly, we along currently paths, paths. are all down looking other the Craig, strategic

other looking paths, well speak, we as the paths. all down strategic We are as as

takes we gotten it the is for all that that again, as can best versus the what and is on value value a we shareholders getting other for all speak is believe currently our paths. going be that so them, paths, And

Craig Kucera

you. thank Okay,


Ladies question-and-answer over and remarks. gentlemen, any like turn Carter to final for back conference to this George concludes the session. I'd our

George Carter

you the tuning you some you, and be to We'll again. look Virtual. of Thank into forward to you we'll NAREIT call, to on Thank for talking everyone quarter. next speaking


Thank concludes presentation. today's you, We conference thank attending you today's all sir. call. for This

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