Franklin Street Properties Corp. Announces Third Quarter 2011 Results
(firmenpresse) - WAKEFIELD, MA -- (Marketwire) -- 11/01/11 -- Franklin Street Properties Corp. (the "Company", "FSP", "we" or "our") (NYSE Amex: FSP), an investment firm specializing in real estate, announced today Funds From Operations (FFO) of $16.4 million or $0.20 per share for the third quarter ended September 30, 2011. The Company also announced Net Income of $3.3 million and Earnings per Share (EPS) of $0.04 for the third quarter and provided an update on other activities.
The Company evaluates its performance based on Net Income, EPS, FFO, Gains on Sales (GOS) and FFO+GOS, and believes each is an important measure. A reconciliation of Net Income to FFO and FFO+GOS, which are non-GAAP financial measures, is provided on page 4 of this press release.
Comparing results for the third quarter of 2011 to 2010, Net Income and EPS decreased $1.4 million or $0.02 per share, FFO increased $0.3 million and FFO+GOS increased $0.3 million. The increase in FFO was primarily attributable to an increase in real estate FFO of $0.1 million and an increase in investment banking FFO of $0.2 million. The increase in real estate FFO was primarily from three new acquisitions made in March 2011, and the benefits of increased occupancy in the real estate portfolio at September 30, 2011, compared to September 30, 2010, and was partially offset by the sale of two properties in 2011. One is a property in Falls Church, Virginia sold in January 2011 and the other is a property in Savage, Maryland sold in June 2011. The increase from investment banking resulted from greater sales of securities by our investment bank, which were $7.5 million for the third quarter of 2011 as compared to $0.3 million in the third quarter of 2010. Revenue from our investment bank is primarily based on the value of securities sales. There was no GOS during the third quarter of 2011 or 2010.
Comparing results for the nine months ended September 30, 2011 to the same period in 2010, Net Income and EPS increased $22.2 million or $0.27 per share, FFO increased $3.3 million or $0.03 per share and FFO+GOS increased $25.3 million or $0.30 per share. The increase in FFO was primarily attributable to an increase in investment banking FFO of $3.8 million and was partially offset by a decrease in real estate FFO of $0.5 million. The decrease in real estate FFO was primarily a result of timing of the sale of a property in Falls Church, Virginia in January 2011, for which proceeds were not reinvested until March 2011, compared to results in the nine months ended September 30, 2010, during which we did not sell properties. The increase in investment banking FFO resulted from greater sales of securities by our investment bank, which were $57.6 million during the nine months ended September 30, 2011 as compared to $10.7 million for the same period of 2010. Revenue from our investment bank is primarily based on the value of securities sales. The sale of a property in January 2011 located in Falls Church, Virginia contributed $19.6 million and the sale of a property in June 2011 located in Savage, Maryland contributed $2.3 million, or in the aggregate, $0.27 per share of GOS for the nine months ended September 30, 2011. There was no GOS during the same period of 2010.
"For the third quarter of 2011, FSP's profits as represented by FFO + GOS totaled approximately $16.4 million or $0.20 per share, a decrease of $0.05 per share compared to the second quarter of 2011. Dividend distributions declared for the third quarter of 2011, which are payable on November 18, 2011, are approximately $15.8 million or $0.19 per share.
Our directly-owned real estate portfolio of 35 properties, totaling 6,929,891 square feet, was approximately 88.1% leased as of September 30, 2011, up from approximately 86.9% leased as of June 30, 2011. Our property portfolio is primarily suburban office assets. Many of the rental/leasing markets where our properties are located remained stable during the third quarter, and showed moderate improvement in occupancy and rental-rate levels. The nation's stalling employment growth as well as financial and regulatory uncertainty appear to be factors in slowing many corporate decisions on potential future office space needs. However, we continue to make leasing progress in our portfolio and continue to have as our objective to move overall occupancy levels to the 90+% range by early 2012.
There was one new property acquisition completed in the third quarter of 2011 for a total purchase price of approximately $35.1 million excluding closing costs and adjustments. The property is located in Evanston, Illinois at 909 Davis Street, and totals approximately 195,245 rentable square feet. It is approximately 95% leased and, together with "Northwest Point" and our preferred share interest in "303 East Wacker", brings to three our greater Chicago area property investments. Additional real estate investments during the fourth quarter are a major objective of FSP, and we would anticipate additional activity this year. There were no property dispositions in the third quarter.
During the third quarter of 2011, our Investment Banking Group raised $7,475,000 of a $62,000,000 private placement offering that began in March of this year. As of the beginning of the fourth quarter, there remained $9,200,000 of the offering to be subscribed. Investment banking business slowed significantly in the third quarter as we continued to see our typical investor's confidence and interest in commercial real estate to be changeable and very dependent on broader capital market/stock market activity. Capital raising efforts in this business over any specific period of time are likely to remain unpredictable.
We believe FSP continues to be in an excellent environment to position itself for meaningful future growth. Our Company will continue to use its capabilities and strong balance sheet to take advantage of competitive tenant leasing requirements and attractive real estate investment opportunities that are presenting themselves as a result of the current cyclical softness in the economy and certain commercial property markets. We are very much looking forward to realizing our future growth potential."
On October 14, 2011, the Company announced that its Board of Directors declared a regular quarterly dividend for the three months ended September 30, 2011 of $0.19 per share of common stock payable on November 18, 2011 to stockholders of record on October 28, 2011.
Supplementary Schedules D and E provide property information for our continuing real estate portfolio of 35 properties and for three non-consolidated REITs that we had interests in as of September 30, 2011. The Company will also be filing a 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 .
A reconciliation of Net Income to FFO and FFO+GOS is shown below and definitions of FFO and FFO+GOS are provided on Supplementary Schedule I. We believe FFO is used broadly throughout the real estate investment trust (REIT) industry as a measurement of performance. Our computation of FFO may not be comparable to FFO reported by other REITs or real estate companies that define FFO differently. We also believe that FFO+GOS is an important measure as it considers investment performance.
Today's news release, along with other news about Franklin Street Properties Corp., is available on the Internet at . 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.
A conference call is scheduled for November 2, 2011 at 10:00 a.m. (ET) to discuss the third quarter 2011 results. To access the call, please dial 1-866-831-6272, passcode 96067963. Internationally, the call may be accessed by dialing 1-617-213-8859, passcode 96067963. To listen via live audio webcast, please visit the Webcasts & Presentations section in the Investor Relations section of the Company's website () 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 achieving current income and long-term growth through investments in commercial properties. FSP operates in two business segments: real estate operations and investment banking/investment services. The majority of FSP's property portfolio is suburban office buildings, with select investments in certain central business district properties. FSP's subsidiary, FSP Investments LLC (member, FINRA and SIPC), is a real estate investment banking firm and a registered broker/dealer. 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 .
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, changes in the demand by investors for investment in Sponsored REITs (as defined in our Annual Report on Form 10-K for the year ended December 31, 2010), risks of a lessening of demand for the types of real estate owned by us, changes in government regulations, 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, 2010, 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.
The following table shows property information for our investments in non-consolidated REITs:
The following table includes the largest 20 tenants in FSP's owned portfolio based on leased square feet:
The Company evaluates the performance of its reportable segments based on several measures, including Funds From Operations ("FFO"), because management believes that FFO represents the most accurate measure of the reportable segment's activity and is the basis for distributions paid to equity holders. The Company defines FFO as net income (determined 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 after adjustments to exclude non-cash income (or losses) from non-consolidated or Sponsored REITs, plus distributions received from non-consolidated or Sponsored 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 the National Association of Real Estate Investment Trusts, or NAREIT, may define this term in a different manner. 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.
Contact:
John Demeritt
(877) 686-9496
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Datum: 01.11.2011 - 15:17 Uhr
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