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Franklin Street Properties (FSP)

Participants
Scott Carter Executive VP, General Counsel & Secretary
John Demeritt Executive VP, CFO & Treasurer
George Carter Chairman & CEO
John Donahue EVP
Jeffrey Carter President & CIO
Nicholas Thillman Robert W. Baird
Call transcript
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Operator

Good morning, and thank you for attending today's Franklin Street Properties Corp. Q1 2022 Earnings Call. My name is Selena, and I will be your moderator. [Operator Instructions] I would now like to pass the conference over to our host, Scott Carter, General Counsel. Please go ahead.

Scott Carter

to Street welcome XXXX First and Call. Earnings morning, the Properties Franklin Quarter Good

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

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

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

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

John Demeritt

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

a as can refer supplemental our found or mentioned, $X.XX funds our Scott about per or on of of $XXX per share our March first had As million quarter. loss we a outstanding. $XX.X $X.X about share million reported operations, XX-Q, for the XX, $X.XX earnings will net 'XX, or for reported 'XX, comments release, debt today be GAAP from and million reminder, of quarter the first At FFO, We of to which, package and we website.

ratio at X.Xx was 'XX of of the XX, ratio result repayments March as year. was primarily made X.Xx and to sales 'XX. compared debt-to-EBITDA net in impact asset decrease Our March the XX, a that of The last in debt

debt coverage the was service first 'XX for compared for quarter first quarter to of ratio X.XXx X.XXx Our 'XX. of the

revolver availability our As of March we XX, and of million have about $XXX liquidity cash in on hand. between 'XX,

of debt to George? that, all reminder, With the our remains unsecured. George. a I'll turn As call over

George Carter

And you, to Properties welcome Thank XXXX again, Earnings First Call. John. Quarter Franklin Street

many execute we For year to you X.X XX% of those XXXX have or the space year first continuing are million for Street objectives and as available on end full about portfolio XXXX, office in properties, the primary about focus the will vacant which total of million set quarter. of followed and first our in of out lease quarter this our of same business lease of to efforts feet we focused of the of year on through to who square know last feet XXXX. into we goals XXXX, square Franklin Major have X.X that about continuing

been intermediate-term reached. those specific valuation properties has We short are where continuing we our potential that disposition efforts properties, office to of believe

to bulk any proceeds. of the We with property debt further disposition also down intend continue pay to our

is mentioned, our of as John just All debt, unsecured.

sale proceeds plan available FSP So debt and any continue being shares to property And without to are approximately common penalties asset-specific previously to are our can XXXX be for the prepayment incurred. used reduction in we million the debt proceeds. property for able all year repurchase guidance $XXX any market sold be under full this announced stock previously in plan. our announced to At $XXX in gross open be disposition time, range maintaining repurchase million aggregate we of to

variety to change conditions guidance disposition geopolitical our events. and conditions, However, including reasons, is office of subject for market a economic

now update quarterly Property call I'd FSP our President earnings to over John the will like We turn guidance our in to of Management And disposition releases. Dona, John? Company.

John Donahue

the the FSP end square the majority and we XX,XXX of slowly large year, of improved Demand square XX.X% regards the midsized decrease this of during at end you, feet XX.X% markets XXX,XXX fourth assets was of feet which of active portfolio FSP Denver. leases, executed of feet portfolio Subsequent approximately The Dallas the Houston. of quarter approximately finalized leasing Good space leases. lease end, requirements for XXX,XXX small Thank modestly compared maturities majority quarter is of first quarter. to approximately primarily the attributable morning, office FSP's across quarter to the leased total XXXX, to as to in for in have calendar in including particularly and George. everyone. at tenants square for FSP leased first new The has are new to space during requirements. of

XXXX. will occupancy that addition, XXX,XXX of with Jeff including in FSP second assets respective we ideal of portfolio. tracking feet FSP's of half now -- their thank feet, square FSP you. square calendar opportunity list. short expirations increase prospects excess XXXX Lease an with of combined We in representing prospective on XXX,XXX tenants, the to of I approximately prospective over approximately square it X.X% the pipeline of new have for lease to are minimal provides of remainder turn growing total The Carter. currently identified feet expirations tenants, In XXX,XXX

Jeffrey Carter

and Thank safe you, John. at that morning, Franklin here healthy. Good everyone. hope everyone We Properties, remains Street

accurately current share to to for we is work continuing is reflected FSP not that our unlock shareholders our XXXX, within value price. For being believe

intermediate-term that referenced reached. George his respective their we to of through capture remarks, we assets embedded are short value striving property has in been potential believe when the to sale select As

XXXX, FSP expected aggregate $XXX to anticipated has of sales with in likely in second gross majority half and between sales For proceeds most the guidance our the of occur disposition million $XXX the reaffirmed year. of million

in-place the As FSP a X.X%. year completed of reminder, property total $XXX rate approximately XXXX, in for aggregate full sales of weighted cap an million at approximately average

the marketplace, will For appropriate. share specifics potential on sale competitive not in reasons until any we

to gains centric, at property factors, for of a consider respective term Our selecting dispositions criteria and continues including be intermediate for value we properties. asset the variety potential market short specific versus to analyzing

for share turbulence color to we uncertainties investment sales wanted heightened also property the marketplace, in markets. well Despite demand recent regarding which this investors We contemplating, of increased estate the has office are specifically even real some as environment and the prospective capital in in properties are additional ongoing our in what offerings seeing in marketplace see environment. within generally, to as high-quality FSP interest well-located continued this

use to we We as to monitor the a by marketplace potential well who that office are a economy return to continue and our underwriting buyers large investors comparable will for sales come setting. more normalized from and dispositions on date, continue impacts. as attract, To on

variety subject we'd thank conference marketplace. quarterly our And at efforts listening to update economic for to for that, questions. Selena? to open any disposition I disposition you including reasons, the the a we to today. up this And continue adjustment for with conditions, remain our now guidance call time, Our for of will and call earnings like

Operator

Dave Rodgers comes question from Instructions] with first [Operator The Baird.

Nicholas Thillman

in It's Nick any on question further And rates? Dave. asset seen discovery. in that, if could along prospects are rise assets geography noticeable into part you of maybe with if Maybe pricing comment currently there the our that? And on the so, the on and assets for discovery? of second any interest price in the the you first bidding of change pool Have then the sales

Jeffrey Carter

discussion prospective amongst first part rates The impact supply in recent capital that other and we can watch market what for the And impacts buyers have we'll broader interest the we've year on we'll macro turbulence this that and in say the marketplace. levels for is the continue own to for having Ukraine. are marketplace. with for that. timing. appropriate our goals level And impacts on within question fall quarterly time, our has the and our apprised conditions, chain, micro sales ranges, we as point, well now believe increased markets seen COVID, related They've at to your topic at within that market any though recent to rates pricing still secondly, other expected certainly the higher a been the But had your level keep geography objectives. we uncertainty achievable seen but So that factors, investment question, have the interest and to do of as

to As second remarks, I successful, the we expect this my close if indicated in in sales, of the half year. majority of our

And you to specifically so more have we'll as report keep there. we posted

Nicholas Thillman

one then what feet of there? guess the leasing? the active maybe tenants. markets much XXX,XXX is maybe square shortlisted that for vacancy and kind most leasing current John, next on commenting the And of the on And I is of are how

John Demeritt

it's Good Nick, John. morning,

the Sunbelt of number Houston feet in in footage at square is currently Dallas largest time for leased. and this XXX,XXX of in Texas. None that large weighting prospects are majority in the that The of prospects markets. Virginia all then So is of space of new for and is The other is square moment Texas, vacancy. in and

are at large prospects block size that of Innsbrook, process. and number moving a We a have space along the larger have of of a we

waiting in Dallas then So would square go Virginia I you feet, by say would Houston. to

Nicholas Thillman

then needed up additional maybe vacancy much with is the to the just last in And this portfolio? How some the lease Great. of vacancy. one, capital

John Demeritt

asset course, positioning by all COVID. assets varies our we Well, and that of have during asset, been

And over the that XX or are Newfield. with in portfolio we Street the So position. been larger looking on as and upgrading to ready amenities, tenants lion's more share is TIs, the like such event and the we for last XXXX is new that so. the departures But departures looking The XX very the fact been expiration of good year for portfolio XXth projects ready of requirements working to all in recent lease majority of our tenants. also the finalizing have are We've Dallas of a go. for some repositioned with we're despite feel

Operator

time. register questions additional that no are There

to So over I call back will the George remarks. for closing pass

George Carter

to quarter. to Thank you a great Thank and much. very look earnings very everybody. call, Have in day, you tuning we for our much forward second

Operator

concludes QX That Franklin the your for Earnings XXXX Properties you participation. Street Corp. Call. Thank

You lines. now your disconnect may