Franklin Street Properties Corp. Reports Mixed Financial Results for Q3 and Nine Months Ended September 30, 2024

Franklin Street Properties Corp. (FSP Corp.) reported its financial results for the three and nine months ended September 30, 2024, revealing significant changes in revenue and profitability compared to the previous fiscal period.

For the three months ended September 30, 2024, total revenues decreased to $29.7 million from $36.9 million in the same period of 2023, primarily due to a reduction in rental revenues, which fell by approximately $7.2 million. This decline was attributed to the sale of four properties in 2023 and two in 2024, along with losses from lease expirations. Total expenses for the same period decreased to $37.9 million from $42.8 million, driven by lower real estate operating expenses and depreciation linked to property dispositions. The net loss improved to $15.6 million, compared to a net loss of $45.7 million in the prior year.

For the nine months ended September 30, 2024, total revenues were $91.7 million, down from $110.9 million in 2023, with rental revenues specifically decreasing by $19.2 million for similar reasons as noted above. Total expenses also decreased to $116.4 million from $130.6 million, reflecting reductions in operating expenses and depreciation. The net loss for this period was $44.2 million, an improvement from a net loss of $51.7 million in the previous year.

As of September 30, 2024, the company’s total assets were reported at $981.5 million, with total liabilities of $316.1 million, resulting in total stockholders’ equity of $665.4 million. The company’s cash and cash equivalents decreased significantly to $42.4 million from $127.9 million at the end of 2023, primarily due to cash used in financing activities, including debt repayments.

Strategically, FSP Corp. continues to focus on its real estate operations, which include leasing and asset management services. The company has consolidated its Sponsored REIT, Monument Circle, since January 1, 2023, and is actively pursuing property sales to enhance value and manage debt. The company reported proceeds from property sales of $62.9 million for the nine months ended September 30, 2024, compared to $37.1 million in the same period of 2023.

The company’s debt structure includes a BMO Term Loan of approximately $78.8 million and a BofA Term Loan of about $61.7 million, both maturing in April 2026. Recent amendments to these loans have adjusted interest rates and extended maturity dates, reflecting the company’s ongoing efforts to manage its financial obligations amid changing market conditions.

Overall, FSP Corp. is navigating a challenging real estate environment while implementing strategies aimed at improving financial performance and shareholder value.