Franklin Street Properties Corp. · AMEX:FSP
Franklin Street Properties — Investor Presentation (June 2016)
26 slides from Franklin Street Properties's investor presentation, Jun 6, 2016
Slide 1: Investor Presentation June 2016
Two Ravinia Drive 1999 Broadway 1001 17th Street Addison Circle One Legacy Circle Eldridge Green Westchase I & II 801 Marquette Avenue South Investor Presentation June 2016 Franklin Street Properties Corp. 401 Edgewater Place ● Wakefield, MA 01880 ● (781) 557-1300 www.franklinstreetproperties.com 99
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation may 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-l
Slide 3: FSP: An Overview
FSP: An Overview ____________________ (1) As of June 6, 2016. Includes the acquisition of the Plaza Seven property in Minneapolis, MN
Slide 4: Experienced Management Team
Experienced Management Team Position(1) Years of Real Estate Experience GEORGE J. CARTER CEO, Founder & Chairman 42 JEFFREY B. CARTER President & Chief Investment Officer 18 JOHN G. DEMERITT EVP & Chief Financial Officer 19 JOHN F. DONAHUE EVP & President of Property Management 27 SCOTT H. CARTER EV
Slide 5: Top Core Markets: Sunbelt & Mountain West Market Focus
~73%(1) RSF in Top 5 Core Markets Sunbelt & Mountain West Market Focus FSP Core Market Current Properties Houston Dallas Minneapolis Denver Atlanta ~8% sf ~21% sf ~13% sf ~12% sf ~19% sf ____________________ (1) As of June 6, 2016. Includes the acquisition of the Plaza Seven property in Minneapolis,
Slide 6: Creating Value with Sustainable FFO Growth
Creating Value with Sustainable FFO Growth Leasing Opportunity to increase rental revenue with approximately 800,000 RSF of vacant space within our five core markets(1). Proactively working to retain our existing tenants. Select New Investments Targeting high quality investments that have the potent
Slide 7: 1. Value Creation Through Leasing
1. Value Creation Through Leasing We believe that expiring leases in 2016 and 2017 in our five core markets are on average at least 5% below current market rental rates. 2018 and Future Expiration 73% Vacancies 10% 2016 Expiring Leases 6% 2017 Expiring Leases 11% 2018 and Future Expiration Vacancies
Slide 8: Value Creation Through Rent Growth
Value Creation Through Rent Growth ____________________ Source: Public Company Filings and Disclosures. Note: Includes FSP owned portfolio only. 88.7% 94.0% 94.1% 92.8% 91.6% 90.2% $20.58 $22.02 $24.15 $25.33 $25.42 $26.51 $19.00 $21.00 $23.00 $25.00 $27.00 $29.00 74.0% 78.0% 82.0% 86.0% 90.0% 94.0%
Slide 9: 2. Value Creation Through Select New Investments
Gross sales proceeds of $20.8M Realized a $1.5M gain on sale 2. Value Creation Through Select New Investments Two Ravinia Central Perimeter Atlanta, GA Acquired in April 2015 442,130 RSF Purchase Price $78M Since 2014 ~$178M in dispositions and loan repayments redeployed into two Class “A” infill ac
Slide 10: Plaza Seven
Plaza Seven Plaza Seven Highlights Acquired June 6, 2016 Class “A” Mixed Use Tower completed in 1987 Mixed-use amenities in property include a 360 room Radisson Blu Hotel located on floors 1-17 (excluded from acquisition) Diverse rent roll anchored by a new 12+ year lease with PricewaterhouseCoopers
Slide 11: 3. Value Creation Through Select Development/Redevelopment
3. Value Creation Through Select Development/Redevelopment 801 Marquette Avenue in downtown Minneapolis as current project. Estimated total investment including leasing costs of $15 to $18 Million. Intend to redevelop into a premier office property to attract growing tenants seeking high quality and
Slide 12: 4. Prudent Balance Sheet Management
Staggered Maturity Schedule 70% of Debt is Fixed Rate Weighted Average Interest Rate under 3% No Preferred Stock or Convertible Debt 100% Unencumbered Asset Base ~$255M in Available Liquidity Capitalization(1) Debt Maturity Schedule(1) Moody’s Investment Grade Rating of Baa3 Debt to Undepreciated As
Slide 13: Core Market Profile – Atlanta
Core Market Profile – Atlanta Portfolio Snapshot(6) Square Feet 1,837,946 Leased Percentage (3/31/16) 90.3% Average Asking Rent $29.88 % of Total sq. ft. ~19% One Ravinia Drive Two Ravinia Drive ____________________ Source: (1) Metro Atlanta Chamber of Commerce (www.metroatlantachamber.com/docs/defa
Slide 14: Core Market Profile – Dallas
Portfolio Snapshot(5) Square Feet 1,226,572 Leased Percentage (3/31/16) 95.0% Average Asking Rent $29.50 % of Total sq. ft. ~13% Core Market Profile – Dallas One Legacy Circle Collins Crossing ____________________ Source: (1) Forbes (www.forbes.com/sites/erincarlyle/2015/01/27/americas-fastest-growi
Slide 15: Core Market Profile – Denver
Core Market Profile – Denver Portfolio Snapshot(4) Square Feet 2,009,736 Leased Percentage (3/31/16) 88.1% Average Asking Rent $33.12 % of Total sq. ft. ~21% 380 & 390 Interlocken Greenwood Plaza ____________________ Source: (1) Denver Office of Economic Development (www.denvergov.org/content/denver
Slide 16: Core Market Profile – Houston
Core Market Profile – Houston Portfolio Snapshot(6) Square Feet 1,191,630 Leased Percentage (3/31/16) 88.3% Average Asking Rent $34.57 % of Total sq. ft. ~12% Park Ten Phase II Westchase I & II ____________________ Source: (1) Forbes (www.forbes.com/sites/erincarlyle/2015/01/27/americas-fastest-grow
Slide 17: Core Market Profile – Minneapolis
Core Market Profile – Minneapolis Portfolio Snapshot(5) Square Feet 751,786 Leased Percentage ~77%** Average Asking Rent $27.00 % of Total sq. ft. ~8% ____________________ Source: (1) WalletHub (wallethub.com/edu/best-cities-for-jobs/2173/); (2) American Institute for Economic Research (www.aier.org
Slide 18: Where FSP is Heading...
Where FSP is Heading... Creating Value with Sustainable FFO Growth + Leasing vacant space and intelligent renewals. + Growing our Sunbelt & Mountain West focused portfolio of infill and CBD Class “A” office properties. + Select developments/redevelopments in our five core markets. Prudent Balance \
Slide 19: Capital Structure Provides Flexibility
Capital Structure Provides Flexibility Annualized Adjusted EBITDA(1) (3) / Interest Expense + Pref. Dividends Net Debt / Last Quarter Annualized Adjusted EBITDA(1)(2) (3) Unsecured Debt as a % of Total Debt (3) (4) (4) (4) ____________________ Source: SNL Financial as of March 31, 2016. Different RE
Slide 20: Attractive Value Opportunity
Attractive Value Opportunity Price / Consensus 2016E FFO Multiple(1) Dividend Yield Price / Consensus 2016E AFFO Multiple(1) ____________________ Source: SNL Financial as of May 31, 2016. Different REITs may calculate FFO and AFFO in different ways. Please refer to pages 20-22 for FSP’s definition o
Slide 21: Appendix: Non-GAAP Financial Measure Definitions
Appendix: Non-GAAP Financial Measure Definitions Definition of Funds From Operations (FFO) The Company evaluates performance based on Funds From Operations, which we refer to as FFO, as management believes that FFO represents the most accurate measure of activity and is the basis for distributions p
Slide 22: Definition of Adjusted Funds From Operations (AFFO)
Definition of Adjusted Funds From Operations (AFFO) The Company defines AFFO as the sum of (1) FFO; (2) excluding our proportionate share of FFO and including distributions received, from non-consolidated REITs; (3) excluding the effect of straight-line rent; (4) plus deferred financing costs, (5) l
Slide 23: FFO & AFFO Reconciliation
FFO & AFFO Reconciliation (in thousands, except per share amounts) Appendix: Non-GAAP Financial Measure Definitions and Reconciliations to GAAP Net Income For the Three For the Months Ended For the Three Months Ended Year Ended 31-Mar-16 31-Mar-15 30-Jun-15 30-Sep-15 31-Dec-15 31-Dec-15 Net income 2
Slide 24: Definition of EBITDA and Adjusted EBITDA
Definition of Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA) and Adjusted EBITDA EBITDA is defined as net income plus interest expense, income tax expense and depreciation and amortization expense. Adjusted EBITDA is defined as EBITDA excluding gains and losses on sales of p
Slide 25: EBITDA Reconciliation
EBITDA Reconciliation (in thousands, except ratio amounts) Appendix: Non-GAAP Financial Measure Definitions and Reconciliations to GAAP Net Income Three Months Ended For the Three Months Ended Year Ended 31-Mar-16 31-Mar-15 30-Jun-15 30-Sep-15 31-Dec-15 31-Dec-15 Net income 2,579 $ 12,533 $ 3,903 $
Slide 26: Investor Relations Contact
Two Ravinia Drive 1999 Broadway 1001 17th Street Addison Circle One Legacy Circle Eldridge Green Westchase I & II 801 Marquette Avenue South Franklin Street Properties Corp. 401 Edgewater Place ● Wakefield, MA 01880 ● (781) 557-1300 www.franklinstreetproperties.com 999 Peachtree Street Investor Rela
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