Franklin Street Properties Corp.

Good morning and welcome to the Franklin Street Properties third quarter 2022 earnings call. Joining me this morning are George Carter, our Chief Executive Officer, John DeMeritt, our Chief Financial Officer, Jeff Carter, our President and Chief Investment Officer, John Donahue, President of FSP Property Management, and Toby Daly, Executive Vice President of FSP Property Management. Please note that various remarks that we may make about future expectations, plans, and prospects for the company may constitute forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors. including those discussed in the risk factor section of our annual report on Form 10-K for the year ended December 31, 2021, as amended by our quarterly reports on Form 10-Q, which are on file with the SEC. In addition, these forward-looking statements represent the company's expectations only as of today, November 2, 2022. While the company may elect to update these forward-looking statements, it specifically disclaims any obligation to do so. Any forward-looking statements should not be relied upon as representing the company's estimates or views as of any date subsequent to today. At times during this call, we may refer to funds from operations or FFO. Reconciliations of FFO and other non-GAAP financial measures to GAAP net income are contained in yesterday's press release. which is available in the investor relations section of our website at www.fspreit.com. Now I'll turn the call over to John DeMeritt. John?

Thank you, Scott, and good morning, everyone. I'm going to give a very brief overview of our third quarter results, and afterward I'll pass the call to George for his comments. As a reminder, our comments today will refer to our earnings release which Scott just mentioned can be found on our website, and also there is our supplemental package in 10-Q. We reported funds from operations or FFO of about $9 million or $0.09 per share for the third quarter of 22 and reported gap net income of $17.2 million or $0.17 per share for the third quarter. On August 31st, 22, we sold two office properties located in Broomfield, Colorado, for an aggregate sale price of $102.5 million and achieved a gain of $24.1 million on those sales. On September 6, 2022, we prepaid the remaining balance of our $110 million term loan and have no debt maturities at this point until January of 24. Primarily as a result of this debt reduction, our net debt to EBITDA decreased to 6.9 times at September 30, compared to 8.3 times at the end of June 22. As of September 30th, 22, we had $430 million of debt outstanding, and our debt service coverage ratio was 2.5 times. These calculations are disclosed in our supplemental filing if you'd like to look at them. As of September 30th, we had liquidity of about $181.2 million between availability on our revolver and cash on hand. As a reminder, all of our debt remains unsecured. With that, I'll turn the call over to George. George?

Thank you, John. And again, welcome to Franklin Street Properties' third quarter 2022 earnings call. As the fourth quarter of 2022 begins, we continue to believe that the current price of our common stock does not accurately reflect the value of our underlying real estate assets. Our primary objectives for the balance of the year remain to increase shareholder value through the potential sale of select properties where we believe that short to intermediate term valuation potential has been reached, and to increase occupancy in our continuing portfolio of real estate. During the third quarter, we did sell two properties in Broomfield, Colorado, 380 and 390 Interlochen. for 102.5 million. And as John said, prepaid in full a $110 million term loan. Our funds from operations or FFO was approximately 9 million or 9 cents per share for the quarter. As 2022 has progressed, we are finding that both debt and equity capital available for potential purchasers of office properties and other commercial real estate has been more and more negatively impacted. We believe that current economic conditions, office market conditions, geopolitical events, and other factors are contributing to this circumstance. Volatility in the capital markets has created funding uncertainty among potential purchasers of office properties. and has generally resulted in longer periods of time to close dispositions. As a result, we are updating our property disposition guidance for full year 2022 to be in the range of approximately 102.5 million to 200 million in aggregate gross proceeds compared to our previously estimated range of 200 million to 300 million. While we are not providing disposition guidance for 2023 at this time, we believe that some of the disposition activity that we had anticipated would occur in 2022 will now likely occur in the first quarter of 2023. We are currently working with identified potential purchasers on new potential dispositions that would result in approximately $180 million in aggregate gross proceeds in addition to the $102.5 million already closed. We will continue to update our disposition guidance quarterly in our earnings releases. Now I will turn the call over to John Donahue, President of FSP Property Management Corp. John?