FRANKLIN STREET PROPERTIES CORP /MA/ 10-Q

Item 1. Financial Statements ​ Franklin Street Properties Corp. Consolidated Balance Sheets (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, ​ December 31, (in thousands, except share and par value amounts) 2025 2024 Assets: ​ ​ ​ ​ ​ ​ ​ Real estate assets: ​ ​ ​ ​ ​ ​ ​ Land (amounts related to variable interest entities ("VIEs") of $ 0 and $ 6,416 at September 30, 2025 and December 31, 2024, respectively) $ 98,883 $ 105,298 ​ Buildings and improvements (amounts related to VIEs of $ 0 and $ 13,279 at September 30, 2025 and December 31, 2024, respectively) ​ 1,088,981 ​ 1,096,265 ​ Fixtures and equipment ​ 11,355 ​ 11,053 ​ ​ ​ 1,199,219 ​ 1,212,616 ​ Less accumulated depreciation (amounts related to VIEs of $ 0 and $ 682 at September 30, 2025 and December 31, 2024, respectively) ​ 399,597 ​ 377,708 ​ Real estate assets, net (amounts related to VIEs of $ 0 and $ 19,013 at September 30, 2025 and December 31, 2024, respectively) ​ 799,622 ​ 834,908 ​ Acquired real estate leases, less accumulated amortization of $ 14,238 and $ 13,613 , respectively (amounts related to VIEs of $ 0 and $ 67 , less accumulated amortization of $ 0 and $ 35 at September 30, 2025 and December 31, 2024, respectively) ​ 2,899 ​ 4,205 ​ Cash, cash equivalents and restricted cash (amounts related to VIEs of $ 239 and $ 1,314 at September 30, 2025 and December 31, 2024, respectively) ​ 31,575 ​ 42,683 ​ Tenant rent receivables ​ 1,380 ​ 1,283 ​ Straight-line rent receivable ​ 38,857 ​ 37,727 ​ Prepaid expenses and other assets ​ 3,889 ​ 3,114 ​ Office computers and furniture, net of accumulated depreciation of $ 1,094 and $ 1,073 , respectively ​ 48 ​ 70 ​ Deferred leasing commissions, net of accumulated amortization of $ 14,749 and $ 14,195 , respectively ​ 22,762 ​ 22,941 ​ Total assets $ 901,032 $ 946,931 ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities and Stockholders’ Equity: ​ ​ ​ ​ ​ ​ ​ Liabilities: ​ ​ ​ ​ ​ ​ ​ Term loans payable, less unamortized financing costs of $ 881 and $ 2,220 , respectively ​ $ 125,114 ​ $ 124,491 ​ Series A & Series B Senior Notes, less unamortized financing costs of $ 473 and $ 1,191 , respectively ​ ​ 122,449 ​ ​ 122,430 ​ Accounts payable and accrued expenses (amounts related to VIEs of $ 83 and $ 534 at September 30, 2025 and December 31, 2024, respectively) ​ 28,785 ​ 34,067 ​ Accrued compensation ​ 2,635 ​ 3,097 ​ Tenant security deposits ​ 6,258 ​ 6,237 ​ Lease liability ​ ​ 417 ​ ​ 707 ​ Acquired unfavorable real estate leases, less accumulated amortization of $ 54 and $ 89 , respectively ​ 37 ​ 45 ​ Total liabilities ​ 285,695 ​ 291,074 ​ ​ ​ ​ ​ ​ ​ ​ ​ Commitments and contingencies ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stockholders’ Equity: ​ ​ ​ ​ ​ ​ ​ Preferred stock, $ .0001 par value, 20,000,000 shares authorized, none issued or outstanding ​ — ​ — ​ Common stock, $ .0001 par value, 180,000,000 shares authorized, 103,690,340 and 103,566,715 shares issued and outstanding , respectively ​ 10 ​ 10 ​ Additional paid-in capital ​ 1,335,586 ​ 1,335,361 ​ Accumulated other comprehensive income ​ — ​ — ​ Accumulated distributions in excess of accumulated earnings ​ ( 720,259 ) ​ ( 679,514 ) ​ Total stockholders’ equity ​ 615,337 ​ 655,857 ​ Total liabilities and stockholders’ equity $ 901,032 $ 946,931 ​ ​ The accompanying notes are an integral part of these consolidated financial statements. ​ 3 Table of Contents Franklin Street Properties Corp. Consolidated Statements of Operations (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months Ended September 30, ​ For the Nine Months Ended September 30, (in thousands, except per share amounts) 2025 2024 2025 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revenues: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Rental ​ $ 27,300 ​ $ 29,662 ​ $ 81,122 ​ $ 91,705 Other ​ — ​ 20 ​ — ​ 32 Total revenues ​ 27,300 ​ 29,682 ​ 81,122 ​ 91,737 Expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Real estate operating expenses ​ 10,671 ​ 11,574 ​ 31,467 ​ 33,620 Real estate taxes and insurance ​ 5,262 ​ 5,512 ​ 14,822 ​ 17,175 Depreciation and amortization ​ 10,550 ​ 10,911 ​ 32,000 ​ 34,018 General and administrative ​ 3,034 ​ 3,275 ​ 9,799 ​ 11,069 Interest ​ 6,348 ​ 6,585 ​ 18,378 ​ 20,513 Total expenses ​ 35,865 ​ 37,857 ​ 106,466 ​ 116,395 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loss on extinguishment of debt ​ ​ ( 7 ) ​ ​ ( 477 ) ​ ​ ( 12 ) ​ ​ ( 614 ) Loss on sale of properties and impairment of assets held for sale, net ​ ​ — ​ ​ ( 7,254 ) ​ ​ ( 12,900 ) ​ ( 20,459 ) Interest income ​ 249 ​ 340 ​ 756 ​ 1,696 Loss before taxes ​ ( 8,323 ) ​ ( 15,566 ) ​ ( 37,500 ) ​ ( 44,035 ) Tax expense ​ 3 ​ 56 ​ 137 ​ 162 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss ​ $ ( 8,326 ) ​ $ ( 15,622 ) ​ $ ( 37,637 ) ​ $ ( 44,197 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average number of shares outstanding, basic and diluted ​ 103,690 ​ 103,567 ​ 103,623 ​ 103,492 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss per share, basic and diluted ​ $ ( 0.08 ) ​ $ ( 0.15 ) ​ $ ( 0.36 ) ​ $ ( 0.43 ) ​ The accompanying notes are an integral part of these consolidated financial statements. ​ 4 Table of Contents Franklin Street Properties Corp. Consolidated Statements of Comprehensive Loss (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the ​ ​ For the ​ ​ Three Months Ended ​ ​ Nine Months Ended ​ ​ September 30, ​ ​ September 30, (in thousands) 2025 2024 2025 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss ​ $ ( 8,326 ) ​ $ ( 15,622 ) ​ ​ $ ( 37,637 ) ​ $ ( 44,197 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other comprehensive loss: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Reclassification from accumulated other comprehensive income into interest expense ​ ​ — ​ ​ — ​ ​ ​ — ​ ​ ( 355 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total other comprehensive loss ​ — ​ — ​ ​ — ​ ( 355 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Comprehensive loss ​ $ ( 8,326 ) ​ $ ( 15,622 ) ​ ​ $ ( 37,637 ) ​ $ ( 44,552 ) ​ ​ The accompanying notes are an integral part of these consolidated financial statements. ​ 5 Table of Contents Franklin Street Properties Corp. Consolidated Statements of Stockholders’ Equity (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ Distributions ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ other ​ in excess of ​ Total ​ ​ Common Stock ​ Paid-In ​ comprehensive ​ accumulated ​ Stockholders’ (in thousands, except per share amounts) Shares Amount Capital income (loss) earnings Equity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance, December 31, 2023 103,430 ​ $ 10 ​ $ 1,335,091 ​ $ 355 ​ $ ( 622,651 ) ​ $ 712,805 ​ Comprehensive loss — ​ — ​ — ​ ( 355 ) ​ ( 7,552 ) ​ ( 7,907 ) ​ Distributions $ 0.01 per share of common stock — ​ — ​ — ​ — ​ ( 1,034 ) ​ ( 1,034 ) ​ Balance, March 31, 2024 103,430 ​ $ 10 ​ $ 1,335,091 ​ $ — ​ $ ( 631,237 ) ​ $ 703,864 ​ Comprehensive loss — ​ — ​ — ​ — ​ ( 21,023 ) ​ ( 21,023 ) ​ Equity-based compensation ​ 137 ​ ​ — ​ ​ 270 ​ ​ — ​ ​ — ​ ​ 270 ​ Distributions $ 0.01 per share of common stock — ​ — ​ — ​ — ​ ( 1,034 ) ​ ( 1,034 ) ​ Balance, June 30, 2024 103,567 ​ $ 10 ​ $ 1,335,361 ​ $ — ​ $ ( 653,294 ) ​ $ 682,077 ​ Comprehensive loss — ​ — ​ — ​ — ​ ( 15,622 ) ​ ( 15,622 ) ​ Distributions $ 0.01 per share of common stock — ​ — ​ — ​ — ​ ( 1,036 ) ​ ( 1,036 ) ​ Balance, September 30, 2024 103,567 ​ $ 10 ​ $ 1,335,361 ​ $ — ​ $ ( 669,952 ) ​ $ 665,419 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance, December 31, 2024 103,567 ​ $ 10 ​ $ 1,335,361 ​ $ — ​ $ ( 679,514 ) ​ $ 655,857 ​ Comprehensive loss — ​ — ​ — ​ — ​ ( 21,435 ) ​ ( 21,435 ) ​ Distributions $ 0.01 per share of common stock — ​ — ​ — ​ — ​ ( 1,036 ) ​ ( 1,036 ) ​ Balance, March 31, 2025 103,567 ​ $ 10 ​ $ 1,335,361 ​ $ — ​ $ ( 701,985 ) ​ $ 633,386 ​ Comprehensive loss — ​ — ​ — ​ — ​ ( 7,876 ) ​ ( 7,876 ) ​ Equity-based compensation ​ 123 ​ ​ — ​ ​ 225 ​ ​ — ​ ​ — ​ ​ 225 ​ Distributions $ 0.01 per share of common stock — ​ — ​ — ​ — ​ ( 1,035 ) ​ ( 1,035 ) ​ Balance, June 30, 2025 103,690 ​ $ 10 ​ $ 1,335,586 ​ $ — ​ $ ( 710,896 ) ​ $ 624,700 ​ Comprehensive loss — ​ — ​ — ​ — ​ ( 8,326 ) ​ ( 8,326 ) ​ Distributions $ 0.01 per share of common stock — ​ — ​ — ​ — ​ ( 1,037 ) ​ ( 1,037 ) ​ Balance, September 30, 2025 103,690 ​ $ 10 ​ $ 1,335,586 ​ $ — ​ $ ( 720,259 ) ​ $ 615,337 ​ ​ ​ The accompanying notes are an integral part of these consolidated financial statements. ​ ​ 6 Table of Contents Franklin Street Properties Corp. Consolidated Statements of Cash Flows (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Nine Months Ended September 30, (in thousands) 2025 2024 Cash flows from operating activities: ​ ​ ​ ​ ​ ​ Net loss ​ $ ( 37,637 ) ​ $ ( 44,197 ) Adjustments to reconcile net loss to net cash used in operating activities: ​ ​ ​ ​ ​ ​ Depreciation and amortization expense ​ 34,045 ​ 36,284 Amortization of above and below market leases ​ — ​ ( 17 ) Shares issued as compensation ​ ​ 225 ​ 270 Amortization of other comprehensive income into interest expense ​ ​ — ​ ​ ( 355 ) Loss on extinguishment of debt ​ ​ 12 ​ ​ 614 Loss on sale of properties and impairment of assets held for sale, net ​ 12,900 ​ 20,459 Changes in operating assets and liabilities: ​ ​ ​ ​ ​ ​ Tenant rent receivables ​ ( 97 ) ​ 842 Straight-line rents ​ ( 41 ) ​ 1,249 Lease acquisition costs ​ ( 1,096 ) ​ ( 660 ) Prepaid expenses and other assets ​ ( 498 ) ​ 314 Accounts payable and accrued expenses ​ ( 4,274 ) ​ ( 4,364 ) Accrued compensation ​ ( 462 ) ​ ( 451 ) Tenant security deposits ​ 21 ​ ( 84 ) Payment of deferred leasing commissions ​ ( 3,176 ) ​ ( 3,168 ) Net cash provided by (used in) operating activities ​ ( 78 ) ​ 6,736 Cash flows from investing activities: ​ ​ ​ ​ ​ ​ Property improvements, fixtures and equipment ​ ​ ( 12,608 ) ​ ​ ( 19,074 ) Proceeds received from sales of properties ​ ​ 6,100 ​ ​ 62,909 Net cash provided by (used in) investing activities ​ ( 6,508 ) ​ 43,835 Cash flows from financing activities: ​ ​ ​ ​ ​ ​ Distributions to stockholders ​ ( 3,108 ) ​ ( 3,104 ) Repayments of Bank note payable ​ — ​ ( 22,667 ) Repayments of Term loans payable ​ ( 716 ) ​ ( 41,775 ) Repayments of Series A&B Senior Notes ​ ​ ( 698 ) ​ ( 62,870 ) Deferred financing costs ​ — ​ ( 5,660 ) Net cash used in financing activities ​ ( 4,522 ) ​ ( 136,076 ) Net decrease in cash, cash equivalents and restricted cash ​ ( 11,108 ) ​ ( 85,505 ) Cash, cash equivalents and restricted cash , beginning of year ​ 42,683 ​ 127,880 Cash, cash equivalents and restricted cash , end of period ​ $ 31,575 ​ $ 42,375 ​ ​ ​ ​ ​ ​ ​ Supplemental disclosure of cash flow information: ​ ​ ​ ​ ​ ​ Cash paid for: ​ ​ ​ ​ ​ ​ Interest ​ $ 13,526 ​ $ 16,038 Taxes ​ $ 304 ​ $ 372 Non-cash investing activities: ​ ​ ​ ​ ​ ​ Accrued costs for purchases of real estate assets ​ $ 1,313 ​ $ 2,266 ​ The accompanying notes are an integral part of these consolidated financial statements. ​ 7 Table of Contents Franklin Street Properties Corp. Notes to Consolidated Financial Statements (Unaudited) ​ 1.  Organization, Properties, Basis of Presentation, Financial Instruments and Recent Accounting Standards ​ Organization ​ Franklin Street Properties Corp. (“FSP Corp.” or the “Company”) holds, directly and indirectly, 100 % of the interest in FSP Investments LLC, FSP Property Management LLC , FSP Holdings LLC and FSP Protective TRS Corp . FSP Property Management LLC provides asset management and property management services. The Company also has a non-controlling common stock interest in the corporation that is the sole member of FSP Monument Circle LLC, which corporation was organized to operate as a real estate investment trust (“Monument Circle” or the “Sponsored REIT”). ​ As of September 30, 2025, the Company owned and operated a portfolio of real estate consisting of 14 operating properties. The Company may pursue, on a selective basis, the sale of its properties in order to take advantage of the value creation and demand for its properties, for geographic, property specific reasons or for other general corporate purposes. ​ Properties ​ The following table summarizes the Company’s number of owned and consolidated properties and rentable square feet of real estate. ​ ​ ​ ​ ​ ​ ​ ​ ​ As of September 30, ​ 2025 2024 Owned and Consolidated Properties: ​ ​ ​ ​ ​ Number of properties (1) 14 16 ​ Rentable square feet 4,807,663 5,180,158 ​ ​ (1) Includes one property that was classified as an asset held for sale as of September 30, 2024. ​ Basis of Presentation ​ The unaudited consolidated financial statements of the Company include all of the accounts of the Company and its majority-owned and controlled subsidiaries. All significant intercompany balances and transactions have been eliminated. These financial statements should be read in conjunction with the Company’s consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for its fiscal year ended December 31, 2024, as filed with the Securities and Exchange Commission. ​ The accompanying interim financial statements are unaudited; however, the financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and in conjunction with the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the disclosures required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting solely of normal recurring matters) necessary for a fair presentation of the financial statements for these interim periods have been included. Operating results for the three and nine months ended September 30, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025 or for any other period. ​ Liquidity and Management’s Plan ​ As of October 28, 2025, the Company had aggregate outstanding indebtedness under three unsecured loans, the BofA Term Loan, the BMO Term Loan and the Senior Notes (each as defined and described in Note 2 below), totaling approximately $ 248.9 million and maturing on April 1, 2026, which is within 12 months of the date of issuance of the financial statements accompanying this Quarterly Report on Form 10-Q. ​ 8 Table of Contents Management intends to engage in discussions with the Company’s lenders and/or third party financing sources to extend or refinance the Company’s existing debt and the Company also may seek to effect asset sales or other potential transactions to repay such debt prior to the applicable maturity dates. Management believes that it is more likely than not that the Company will be successful in extending the maturity date or refinancing all of its existing debt, or in effecting asset sales or other potential transactions prior to the applicable maturity dates. Accounting Standards Codification (ASC) 205-40, “Presentation of Financial Statements— Going Concern”, requires management to consider whether there is substantial doubt regarding the Company’s ability to continue as a going concern as a result of uncertainty about the maturity of the Company’s debt on April 1, 2026. Although management believes that it is more likely than not that the Company will be able to extend the maturity date or retire the existing debt through a refinancing, asset sales or other potential transactions, guidance issued under ASC 205-40 requires that management not conclude that such an outcome is “probable” if, among other factors, the outcome is not within the control of the Company. Because no such restructuring, refinancing, sale or other potential transactions have closed, such outcomes are not within the control of the Company; therefore, for accounting purposes, management is unable to conclude that such an outcome is probable. Accordingly, ASC 205-40 requires management to conclude that there is substantial doubt about the Company’s ability to continue as a going concern for at least one year following the date of issuance of these financial statements. ​ While management believes that it is more likely than not that the Company will be able to extend the maturity dates applicable to, or retire, the BofA Term Loan, the BMO Term Loan and the Senior Notes through a refinancing, asset sales or other potential transactions, there is no assurance that the Company will be able to do so. The failure to extend the maturity dates applicable to, or retire, the BofA Term Loan, the BMO Term Loan and the Senior Notes through a refinancing, asset sales or other potential transactions could lead to events of default, which would have a material adverse effect on the Company’s financial condition. ​ The accompanying financial statements have been prepared assuming that the Company will continue as a going concern and do not include any adjustments that might result from the outcome of this uncertainty. ​ Financial Instruments ​ The Company estimates that the carrying values of cash and cash equivalents, restricted cash, receivables, prepaid expenses, accounts payable and accrued expenses, accrued compensation, and tenant security deposits approximate their fair values based on their short-term maturity and the term loans payable approximate their fair values as they bear interest at variable interest rates or at rates that are at market for similar investments. ​ Cash, Cash Equ ivalents and Restricted Cash ​ The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statement of cash flows. ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, September 30, (in thousands) ​ 2025 ​ 2024 Cash and cash equivalents (1) ​ $ 31,425 ​ $ 40,861 Restricted cash ​ 150 ​ 1,514 Total cash, cash equivalents and restricted cash ​ $ 31,575 ​ $ 42,375 ​ ​ ​ ​ ​ ​ ​ (1) Includes $ 89 and $ 1,608 at September 30, 2025 and 2024, respectively, pertaining to Monument Circle, which the Company is unable to utilize for its own operational purposes. ​ ​ ​ ​ ​ ​ ​ Restricted cash consists of escrows arising from property sales. Cash held in escrow is paid based on the terms of the closing agreements for the sale. ​ ​ 9 Table of Contents Variable Interest Entities (VIEs) ​ The Company determines whether an entity is a VIE and, if so, whether it should be consolidated by utilizing judgments and estimates that are inherently subjective. The determination of whether an entity in which the Company holds a, direct or indirect, variable interest is a VIE is based on several factors, including whether the entity’s total equity investment at risk upon inception is sufficient to finance the entity’s activities without additional subordinated financial support. The Company makes judgments regarding the sufficiency of the equity at risk based first on a qualitative analysis, and then a quantitative analysis, if necessary. ​ The Company analyzes any investments in VIEs to determine if the Company is the primary beneficiary. In evaluating whether the Company is the primary beneficiary, the Company evaluates its direct and indirect economic interests in the entity. Determining which reporting entity, if any, is the primary beneficiary of a VIE is primarily a qualitative approach focused on identifying which reporting entity has both (1) the power to direct the activities of a VIE that most significantly impact such entity’s economic performance and (2) the obligation to absorb losses or the right to receive benefits from such entity that could potentially be significant to such entity. Performance of that analysis requires the exercise of judgment. ​ The Company considers a variety of factors in identifying the entity that holds the power to direct matters that most significantly impact the VIE’s economic performance including, but not limited to, the ability to direct a proposed sale of the property or merger of the company. In addition, the Company considers the rights of other investors to participate in those decisions, to replace the manager and to amend the corporate charter. The Company determines whether it is the primary beneficiary of a VIE at the time it becomes involved with a VIE and considers that conclusion upon a reconsideration event. ​ As of January 1, 2023, the Company’s relationship with the Sponsored REIT was considered a VIE and the Company became the primary beneficiary. Upon this reconsideration event, the entity is included within the Company’s consolidated financial statements and all intercompany accounts and transactions have been eliminated in consolidation. A gain on consolidation of approximately $ 0.4 million was recognized in the three months ended March 31, 2023. Cash and cash equivalents of $ 3 million held by Monument Circle was included in the Company’s cash and cash equivalents upon consolidation and is reflected as “Consolidation of Sponsored REIT” in the consolidated statement of cash flows. The cash and cash equivalents held by Monument Circle are unable to be utilized for the Company’s operational purposes. The creditors of Monument Circle’s trade payables do not have any recourse against the Company. ​ Management fees and interest income from loans: ​ Asset management fees range from 1 % to 5 % of collected rents and the applicable contracts are cancellable with 30 days notice. The Company recognized no asset management fee income from non-consolidated entities for each of the nine months ended September 30, 2025 and 2024. ​ The Company recognized no interest income and fees from the Sponsored REIT Loan for each of the three and nine months ended September 30, 2025 and 2024. ​ On October 29, 2021, the Company agreed to amend and restate the then existing Sponsored REIT Loan to extend the maturity date from December 6, 2022 to June 30, 2023 and to advance an additional $ 3.0 million tranche of indebtedness to Monument Circle with the same June 30, 2023 maturity date, effectively increasing the aggregate principal amount of the Sponsored REIT Loan from $ 21 million to $ 24 million. In addition, the Company agreed to defer all principal and interest payments due under the Sponsored REIT Loan until the maturity date. As part of its consideration for agreeing to amend and restate the Sponsored REIT Loan, the Company obtained from the stockholders of the parent of Monument Circle the right to vote their shares in favor of any sale of the property owned by Monument Circle any time on or after January 1, 2023. There were no commitments to lend additional funds to the Sponsored REIT. On June 26, 2023, the Sponsored REIT Loan maturity was extended to September 30, 2023. On September 26, 2023, the Sponsored REIT Loan maturity was further extended to September 30, 2024. On September 27, 2024, the Sponsored REIT Loan maturity was further extended to September 30, 2025 . The Sponsored REIT Loan was extinguished on June 6, 2025, when the property securing the loan was sold. More information on the sale is included in Note 8, “Disposition of Properties and Assets Held for Sale” in this Quarterly Report on Form 10-Q. ​ 10 Table of Contents Recent Accounting Standards ​ In October 2023, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative (“ASU 2023-06”). ASU 2023-06 adds interim and annual disclosure requirements to GAAP at the request of the Securities and Exchange Commission. The guidance in ASU 2023-06 is required to be applied prospectively and the GAAP requirements will be effective when the removal of the related SEC disclosure requirements is effective. If the SEC does not act to remove its related requirements by June 30, 2027, any related FASB amendments will be removed from the Accounting Standards Codification and will not be effective. The Company does not anticipate that the adoption of ASU 2023-06 will have a material impact on the consolidated financial statements. ​ In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”). ASU 2023-07 requires public entities to disclose significant segment expense and other segment items on an annual and interim basis and to provide in interim periods all disclosures about a reportable segment’s profit or loss and assets that are currently required annually. The guidance in ASU 2023-07 is applied retrospectively to all periods presented in the financial statements and is effective for public entities for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption was permitted. The Company adopted ASU 2023-07 for the fiscal year ended December 31, 2024, which did not have a material impact on the consolidated financial statements. ​ In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 enhances the transparency and decision usefulness of income tax disclosures and disclosures about income taxes paid. The guidance in ASU 2023-09 should be applied prospectively but may be applied retrospectively for each period presented. ASU 2023-09 is effective for public entities for fiscal years beginning after December 15, 2024. The Company adopted ASU 2023-09 on January 1, 2025, which did not have a material impact on the consolidated financial statements. ​ In November 2024, the FASB issued ASU No. 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”). ASU 2024-03 requires public business entities to provide disaggregated disclosures, in the notes to the financial statements, of certain categories of expenses that are included in expense line items on the face of the income statement. The guidance in ASU 2024-03 is required to be applied prospectively and entities may apply it retrospectively. ASU 2024-03 is effective for public entities for fiscal years beginning after December 15, 2026. The Company does not anticipate that the adoption of ASU 2024-03 will have a material impact on the consolidated financial statements . ​ ​ ​ ​ ​ 2.  Term Loans Payable and Senior Notes ​ BMO Term Loan ​ As of September 30, 2025, the Company has a term loan borrowing in the aggregate principal amount of approximately $ 70.7 million (the “BMO Term Loan”) with Bank of Montreal, as administrative agent, and the other lending institutions party thereto, that matures on April 1, 2026. On February 21, 2024, the Company amended the BMO Term Loan by entering into a Second Amendment to Second Amended and Restated Credit Agreement with Bank of Montreal and the other lending institutions party thereto (the “BMO Second Amendment”). The BMO Second Amendment amended the Second Amended and Restated Credit Agreement dated September 27, 2018 (the “Original BMO Credit Agreement”), as amended by the First Amendment to Second Amended and Restated Credit Agreement dated February 10, 2023 (the “BMO First Amendment”), to, among other things: (1) extend the maturity date from October 1, 2024 to April 1, 2026; (2) change the interest rate from either 300 basis points over SOFR or 200 basis points over the base rate to either 300 basis points over SOFR with a floor on SOFR of 500 basis points or 200 basis points over the base rate with a floor on the base rate of 600 basis points; (3) provide that, if, as of March 31, 2025, the aggregate principal amount outstanding under the BMO Term Loan, BofA Term Loan (defined below) and the Senior Notes (defined below) exceeded $ 200 million, the spread over SOFR or the base rate, as applicable, would be permanently increased by 100 basis points from 300 basis points to 400 basis points in the case of 11 Table of Contents SOFR, and from 200 basis points to 300 basis points in the case of the base rate; (4) require mandatory prepayments of the BMO Term Loan, the BofA Term Loan and the Senior Notes with net cash proceeds from the disposition of property, assets and equity issuances as follows: (a) 25.55556 % to the BMO Term Loan; (b) 20.00000 % to the BofA Term Loan; (c) 44.44444 % to the Senior Notes; and (d) the remaining 10 % to be retained by the Company; (5) require that, within 90 days of the February 21, 2024 effective date of the BMO Second Amendment, certain of the Company’s subsidiaries guarantee the BMO Term Loan; (6) require that, within 90 days of the February 21, 2024 effective date of the BMO Second Amendment, the Company pledge its equity interests in certain of the Company’s subsidiaries as collateral for the BMO Term Loan; (7) reduce the Company’s minimum fixed charge coverage ratio from 1.50 x to 1.25 x; and (8) reduce the Company’s minimum unsecured interest coverage ratio from 1.75 x to 1.25 x. The Original BMO Credit Agreement, as amended by the BMO First Amendment and the BMO Second Amendment, is referred to as the “BMO Credit Agreement”. ​ On February 21, 2024, as part of the BMO Second Amendment, the Company repaid an approximately $ 29.0 million portion of the BMO Term Loan. On July 10, 2024, the Company repaid an approximately $ 7.2 million portion of the BMO Term Loan from asset sale proceeds of a property located in Glen Allen, Virginia. On October 25, 2024, the Company repaid an approximately $ 7.8 million portion of the BMO Term Loan from asset sale proceeds of a property located in Atlanta, Georgia. On March 6, 2025, the Company repaid an approximately $ 43,000 portion of the BMO Term Loan from an escrow collected on March 4, 2025, which had been held from the sale of a property located in Glen Allen, Virginia. On May 16, 2025, the Company repaid an approximately $ 103,000 portion of the BMO Term Loan from escrows collected on May 14, 2025, which had been held from the sale of a property located in Glen Allen, Virginia and the sale of a property located in Atlanta, Georgia. On August 1, 2025, the Company repaid an approximately $ 256,000 portion of the BMO Term Loan from escrows collected on July 31, 2025, which had been held from the sale of a property located in Atlanta, Georgia. ​ Effective February 21, 2024, upon entering into the BMO Second Amendment, the BMO Term Loan bears interest at either (i) 300 basis points over one , three or six month term SOFR, plus a corresponding adjustment of 0.11448 %, 0.26161 % or 0.42826 %, respectively, with a floor on SOFR of 5.00 % or (ii) 200 basis points over the base rate with a floor on the base rate of 6.00 %. In addition, effective February 21, 2024 upon entering into the BMO Second Amendment, if, as of March 31, 2025, the aggregate principal amount outstanding under the BMO Term Loan, the BofA Term Loan and the Senior Notes exceeds $ 200 million, the spread over SOFR or the base rate, as applicable, will permanently increase by 100 basis points from 300 basis points to 400 basis points in the case of SOFR, and from 200 basis points to 300 basis points in the case of the base rate. Effective April 1, 2025, the spread over SOFR or the base rate, as applicable, permanently increased by 100 basis points, from 300 basis points to 400 basis points in the case of SOFR, and from 200 basis points to 300 basis points in the case of the base rate. ​ Effective April 1, 2025, the interest rate on the BMO Term Loan increased from 8.00 % per annum to 9.00 % per annum. ​ As of September 30, 2025 and December 31, 2024, the interest rate on the BMO Term Loan was 9.00 % and 8.00 % per annum, respectively. The weighted average variable interest rate on all amounts outstanding under the BMO Term Loan was 8.67 % and 8.34 % for the nine months ended September 30, 2025 and the year ended December 31, 2024, respectively. ​ Although the interest rate on the BMO Term Loan was variable under the BMO Credit Agreement, the Company fixed the base LIBOR interest rate that previously applied to the BMO Term Loan by entering into interest rate swap transactions. On February 20, 2019, the Company entered into ISDA Master Agreements with a group of banks that fixed the base LIBOR interest rate on the BMO Term Loan at 2.39 % per annum for the period beginning on August 26, 2020 and ending January 31, 2024. On February 8, 2023, the Company terminated all outstanding interest rate swaps applicable to the BMO Term Loan and, on February 10, 2023, the Company received an aggregate of approximately $ 4.3 million as a result of such terminations, of which approximately $ 0.1 million related to interest receivable. ​ The BMO Credit Agreement contains customary affirmative and negative covenants for credit facilities of this type, including limitations with respect to indebtedness, liens, investments, mergers and acquisitions, disposition of assets, use of net cash proceeds from the disposition of property, assets and equity issuances, mandatory prepayments, the requirement to have certain subsidiaries provide guarantees, the requirement to pledge the Company’s equity interests in certain subsidiaries as collateral, changes in business, certain restricted payments, repurchases and redemptions of the Company’s common stock, going concern qualifications to the Company’s financial statements, and transactions with affiliates. In addition, the BMO Credit Agreement also restricts the Company’s ability to make quarterly dividend distributions that exceed $ 0.01 per share of 12 Table of Contents the Company’s common stock; provided, however, that notwithstanding such restriction, the Company is permitted to make dividend distributions based on the Company’s good faith estimate of projected or estimated taxable income or otherwise as necessary to retain the Company’s status as a real estate investment trust, to meet the distribution requirements of Section 857 of the Internal Revenue Code or to eliminate any income or excise taxes to which the Company would otherwise be subject. The BMO Credit Agreement also contains financial covenants that require the Company to maintain a minimum tangible net worth, a maximum leverage ratio, a maximum secured leverage ratio, a maximum secured recourse leverage ratio, a minimum fixed charge coverage ratio, a maximum unencumbered leverage ratio, and minimum unsecured interest coverage. The Company was in compliance with the BMO Term Loan financial covenants as of September 30, 2025. ​ The BMO Credit Agreement provides for customary events of default with corresponding grace periods, including failure to pay any principal or interest when due, certain cross defaults and a change in control of the Company (as defined in the BMO Credit Agreement). In the event of a default by the Company, the administrative agent may, and at the request of the requisite number of lenders shall, declare all obligations under the BMO Credit Agreement immediately due and payable, terminate the lenders’ commitments to make loans under the BMO Credit Agreement, and enforce any and all rights of the lenders or administrative agent under the BMO Credit Agreement and related documents. For certain events of default related to bankruptcy, insolvency, and receivership, the commitments of lenders will be automatically terminated and all outstanding obligations of the Company will become immediately due and payable. ​ BofA Term Loan ​ As of September 30, 2025, the Company has a term loan borrowing in the aggregate principal amount of approximately $ 55.3 million (the “BofA Term Loan”) with Bank of America, N.A. as administrative agent, and other lending institutions party thereto that matures on April 1, 2026. Prior to February 21, 2024, we referred to the BofA Term Loan as the BofA Revolver. On February 21, 2024, the Company amended the BofA Term Loan by entering into a Second Amendment to Credit Agreement with the lending institutions party thereto (the “BofA Second Amendment”). The BofA Second Amendment amended the Credit Agreement dated January 10, 2022 (the Original BofA Credit Agreement, as amended by the First Amendment to Credit Agreement dated February 10, 2023 (the “BofA First Amendment”) to, among other things: (1) extend the maturity date from October 1, 2024 to April 1, 2026; (2) convert borrowings from being either revolving loans or letters of credit to a term loan; (3) change the interest rate from either 300 basis points over SOFR or 200 basis points over the base rate to either 300 basis points over SOFR with a floor on SOFR of 500 basis points or 200 basis points over the base rate with a floor on the base rate of 600 basis points; (4) provide that, if, as of March 31, 2025, the aggregate principal amount outstanding under the BMO Term Loan, the BofA Term Loan and the Senior Notes exceeds $ 200 million, the spread over SOFR will permanently increase by 100 basis points from 300 basis points to 400 basis points in the case of SOFR, and from 200 basis points to 300 basis points in the case of the base rate; (5) require mandatory prepayments of the BMO Term Loan, the BofA Term Loan and the Senior Notes with net cash proceeds from the disposition of property, assets and equity issuances as follows: (a) 25.55556 % to the BMO Term Loan; (b) 20.00000 % to the BofA Term Loan; (c) 44.44444 % to the Senior Notes; and (d) the remaining 10 % to be retained by the Company; (6) require that, within 90 days of the February 21, 2024 effective date of the BofA Second Amendment, certain of the Company’s subsidiaries guarantee the BofA Term Loan; (7) require that, within 90 days of the February 21, 2024 effective date of the BofA Second Amendment, the Company pledge its equity interests in certain of the Company’s subsidiaries as collateral for the BofA Term Loan; (8) reduce the Company’s minimum fixed charge coverage ratio from 1.50 x to 1.25 x; and (9) reduce the Company’s minimum unsecured interest coverage ratio from 1.75 x to 1.25 x. The Original BofA Credit Agreement, as amended by the BofA First Amendment and the BofA Second Amendment, is referred to as the “BofA Credit Agreement”. ​ On February 21, 2024, as part of the BofA Second Amendment, the Company repaid an approximately $ 22.7 million portion of the BofA Revolver. On July 10, 2024, the Company repaid an approximately $ 5.6 million portion of the BofA Term Loan from asset sale proceeds of a property located in Glen Allen, Virginia. On October 25, 2024, the Company repaid an approximately $ 6.1 million portion of the BofA Term Loan from asset sale proceeds of a property located in Atlanta, Georgia. On March 6, 2025, the Company repaid an approximately $ 34,000 portion of the BofA Term Loan from an escrow collected on March 4, 2025, which had been held from the sale of a property located in Glen Allen, Virginia. On May 16, 2025, the Company repaid an approximately $ 80,000 portion of the BofA Term Loan from escrows collected on May 14, 2025, which had been held from the sale of a property located in Glen Allen, Virginia and the sale of a property located in Atlanta, Georgia. On August 1, 2025, the Company repaid an approximately $ 200,000 portion of the BofA Term Loan from escrows collected on July 31, 2025, which had been held from the sale of a property located in Atlanta, Georgia. 13 Table of Contents ​ Effective February 21, 2024, upon entering into the BofA Second Amendment, the BofA Term Loan bears interest at 300 basis points over either (i) the daily simple SOFR, plus an adjustment of 0.11448 %, or (ii) one , three or six month term SOFR, plus a corresponding adjustment of 0.11448 %, 0.26161 % or 0.42826 %, respectively, with a floor on SOFR of 5.00 %. In addition, effective February 21, 2024, upon entering into the BofA Second Amendment, under certain circumstances, such as if SOFR is not able to be determined, the BofA Term Loan bears interest at 200 basis points over the base rate with a floor on the base rate of 600 basis points. In addition, effective February 21, 2024 upon entering into the BofA Second Amendment, if, as of March 31, 2025, the aggregate principal amount outstanding under the BMO Term Loan, the BofA Term Loan and the Senior Notes exceeds $ 200 million, the spread over SOFR will permanently increase by 100 basis points from 300 basis points to 400 basis points in the case of SOFR, and from 200 basis points to 300 basis points in the case of the base rate. Effective April 1, 2025, the spread over SOFR or the base rate, as applicable, permanently increased by 100 basis points, from 300 basis points to 400 basis points in the case of SOFR, and from 200 basis points to 300 basis points in the case of the base rate. ​ Effective April 1, 2025, the interest rate on the BMO Term Loan increased from 8.00 % per annum to 9.00 % per annum. ​ As of September 30, 2025 and December 31, 2024, the interest rate on the BofA Term Loan was 9.00 % and 8.00 % per annum, respectively. The weighted average variable interest rate on all amounts outstanding under the BofA Term Loan was 8.67 % and 8.34 % for the nine months ended September 30, 2025 and the year ended December 31, 2024, respectively. ​ The BofA Credit Agreement contains customary affirmative and negative covenants for credit facilities of this type, including limitations with respect to indebtedness, liens, investments, mergers and acquisitions, disposition of assets, use of net cash proceeds from the disposition of property, assets and equity issuances, mandatory prepayments, the requirement to have certain subsidiaries provide guarantees, the requirement to pledge the Company’s equity interests in certain subsidiaries as collateral, changes in business, certain restricted payments, repurchases and redemptions of the Company’s common stock, going concern qualifications to the Company’s financial statements, and transactions with affiliates. In addition, the BofA Credit Agreement also restricts the Company’s ability to make quarterly dividend distributions that exceed $ 0.01 per share of the Company’s common stock; provided, however, that notwithstanding such restriction, the Company is permitted to make dividend distributions based on the Company’s good faith estimate of projected or estimated taxable income or otherwise as necessary to retain the Company’s status as a real estate investment trust, to meet the distribution requirements of Section 857 of the Internal Revenue Code or to eliminate any income or excise taxes to which the Company would otherwise be subject. The BofA Credit Agreement also contains financial covenants that require the Company to maintain a minimum tangible net worth, a maximum leverage ratio, a maximum secured leverage ratio, a maximum secured recourse leverage ratio, a minimum fixed charge coverage ratio, a maximum unencumbered leverage ratio, and minimum unsecured interest coverage. The Company was in compliance with the BofA Term Loan financial covenants as of September 30, 2025. ​ The BofA Credit Agreement provides for customary events of default with corresponding grace periods, including failure to pay any principal or interest when due, failure to comply with the provisions of the BofA Credit Agreement, certain cross defaults and a change in control of the Company (as defined in the BofA Credit Agreement). In the event of a default by the Company, BofA, in its capacity as administrative agent, may, and at the request of the requisite number of lenders shall, declare all obligations under the BofA Credit Agreement immediately due and payable and enforce any and all rights of the lenders or BofA under the BofA Credit Agreement and related documents. For certain events of default related to bankruptcy, insolvency, and receivership, all outstanding obligations of the Company will become immediately due and payable. ​ Senior Notes ​ As of September 30, 2025, the Company has senior notes in the aggregate principal amount of approximately $ 122.9 million (the “Senior Notes”) that mature on April 1, 2026. The Senior Notes consist of (i) Series A Senior Notes due April 1, 2026 in an aggregate principal amount of approximately $ 71.3 million (the “Series A Notes”) and (ii) Series B Senior Notes due April 1, 2026 in the aggregate principal amount of approximately $ 51.6 million (the “Series B Notes”). On February 21, 2024, the Company amended the terms of the Senior Notes by entering into a First Amendment to Note Purchase Agreement (the “NPA First Amendment”) with the purchasers party thereto. The NPA First Amendment amended the Note Purchase Agreement dated October 24, 2017 (the “Original Note Purchase Agreement”) to, among other things: (1) extend the maturity date of the Series A Notes from December 20, 2024 to April 1, 2026; (2) shorten the maturity date of the Series B 14 Table of Contents Notes from December 20, 2027 to April 1, 2026; (3) increase the interest rate applicable to the Series A Notes from 4.49 % per annum to 8.00 % per annum; (4) increase the interest rate applicable to the Series B Notes from 4.76 % per annum to 8.00 % per annum; (5) provide that, if, as of March 31, 2025, the aggregate principal amount outstanding under the BMO Term Loan, the BofA Term Loan and the Senior Notes exceeds $ 200 million, the per annum interest rates applicable to the Series A Note and the Series B Notes will permanently increase by 1.00 % from 8.00 % per annum to 9.00 % per annum; (6) require mandatory prepayments of the BMO Term Loan, the BofA Term Loan and the Senior Notes with net cash proceeds from the disposition of property, assets and equity issuances as follows: (a) 25.55556 % to the BMO Term Loan; (b) 20.00000 % to the BofA Term Loan; (c) 44.44444 % to the Senior Notes; and (d) the remaining 10 % to be retained by the Company; (7) require that, within 90 days of the February 21, 2024 effective date of the NPA First Amendment, certain of the Company’s subsidiaries guarantee the Senior Notes; (8) require that, within 90 days of the February 21, 2024 effective date of the NPA First Amendment, the Company pledge its equity interests in certain of the Company’s subsidiaries as collateral for the Senior Notes; and (9) conform all financial covenants and negative covenants in the Note Purchase Agreement with the BofA Credit Agreement and the BMO Credit Agreement. The Original Note Purchase Agreement, as amended by the NPA First Amendment, is referred to as the “Note Purchase Agreement”. ​ On February 21, 2024, as part of the NPA First Amendment, the Company repaid an approximately $ 29.2 million portion of the Series A Notes and an approximately $ 21.2 million portion of the Series B Notes. On July 10, 2024, the Company repaid an approximately $ 7.2 million portion of the Series A Notes and an approximately $ 5.3 million portion of the Series B Notes from asset sale proceeds of a property located in Glen Allen, Virginia. On October 25, 2024, the Company repaid an approximately $ 7.8 million portion of the Series A Notes and an approximately $ 5.7 million portion of the Series B Notes from asset sale proceeds of a property located in Atlanta, Georgia. On March 6, 2025, the Company repaid an approximately $ 44,000 portion of the Series A Notes and an approximately $ 32,000 portion of the Series B Notes from an escrow collected on March 4, 2025, which had been held from the sale of a property located in Glen Allen, Virginia. On May 16, 2025, the Company repaid an approximately $ 103,000 portion of the Series A Notes and an approximately $ 75,000 portion of the Series B Notes from escrows collected on May 14, 2025, which had been held from the sale of a property located in Glen Allen, Virginia and the sale of a property located in Atlanta, Georgia. On August 1, 2025, the Company repaid an approximately $ 258,000 portion of the Series A Notes and an approximately $ 187,000 portion of the Series B Notes from escrows collected on August 1, 2025, which had been held from the sale of a property located in Atlanta, Georgia. As of September 30, 2025, approximately $ 71.3 million aggregate principal amount of the Series A Notes remained outstanding and approximately $ 51.6 million aggregate principal amount of the Series B Notes remained outstanding. ​ Effective April 1, 2025, the interest rates on both the Series A Notes and the Series B Notes permanently increased from 8.00 % per annum to 9.00 % per annum. ​ As of September 30, 2025 and December 31, 2024, the interest rate on both the Series A Notes and Series B Notes was 9.00 % per annum and 8.00 % per annum, respectively. ​ The Note Purchase Agreement contains customary affirmative and negative covenants, including limitations with respect to indebtedness, liens, investments, mergers and acquisitions, disposition of assets, use of net cash proceeds from the disposition of property, assets and equity issuances, mandatory prepayments, the requirement to have certain subsidiaries provide guarantees, the requirement to pledge the Company’s equity interests in certain subsidiaries as collateral, changes in business, certain restricted payments, repurchases and redemptions of the Company’s common stock, going concern qualifications to the Company’s financial statements, transactions with affiliates, certain restrictions on severance, retention and similar arrangements applicable to the Company’s executive officers, and real estate investment trust compliance requirements. In addition, the Note Purchase Agreement also restricts the Company’s ability to make quarterly dividend distributions that exceed $ 0.01 per share of the Company’s common stock; provided, however, that notwithstanding such restriction, the Company is permitted to make dividend distributions based on the Company’s good faith estimate of projected or estimated taxable income or otherwise as necessary to retain the Company’s status as a real estate investment trust, to meet the distribution requirements of Section 857 of the Internal Revenue Code or to eliminate any income or excise taxes to which the Company would otherwise be subject. The Note Purchase Agreement also contains financial covenants that require the Company to maintain a minimum tangible net worth, a maximum leverage ratio, a maximum secured leverage ratio, a maximum secured recourse leverage ratio, a minimum fixed charge coverage ratio, a maximum unencumbered leverage ratio, and minimum unsecured interest coverage. The Company was in compliance with the Note Purchase Agreement financial covenants as of September 30, 2025. 15 Table of Contents ​ The Note Purchase Agreement contains customary events of default, including payment defaults, cross defaults with certain other indebtedness, breaches of covenants and bankruptcy events. In the case of an event of default, the purchasers may, among other remedies, accelerate the payment of all obligations. ​ 3.  Financial Instruments: Derivatives and Hedging ​ On February 20, 2019, the Company entered into interest rate swap transactions that fixed the interest rate for the period beginning August 26, 2020 and ending January 31, 2024 on the BMO Term Loan (the “2019 BMO Interest Rate Swap”). The variable rates that were fixed under the 2019 BMO Interest Rate Swap is described in Note 2. On February 8, 2023, the Company terminated the 2019 BMO Interest Rate Swap applicable to the BMO Term Loan and, on February 10, 2023, the Company received an aggregate of approximately $ 4.3 million as a result of such terminations, of which approximately $ 0.1 million related to interest receivable. As of September 30, 2025, there were no derivative instruments. ​ The 2019 BMO Interest Rate Swap qualified as a cash flow hedge and has been recognized on the consolidated balance sheets at fair value. If a derivative qualifies as a hedge, depending on the nature of the hedge, changes in the fair value of the derivative will either be offset against the change in fair value of the hedged asset, liability, or firm commitment through earnings, or recognized in other comprehensive income until the hedged item is recognized in earnings. The ineffective portion of a derivative’s change in fair value will be recognized in earnings in the same period in which the hedged interest payments affect earnings, which may increase or decrease reported net income and stockholders’ equity prospectively, depending on future levels of interest rates and other variables affecting the fair values of derivative instruments and hedged items, but will have no effect on cash flows. ​ The gain (loss) on the 2019 BMO Interest Rate Swap was recorded in other comprehensive income (loss) (OCI), and the accompanying consolidated statements of operations as a component of interest expense for the nine months ended September 30, 2025 and 2024, was as follows: ​ ​ ​ ​ ​ ​ ​ ​ (in thousands) ​ Nine Months Ended September 30, Interest Rate Swaps in Cash Flow Hedging Relationships: 2025 2024 ​ ​ ​ ​ ​ ​ ​ Amounts of gain recognized in OCI ​ $ — ​ $ — Amounts of previously recorded gain (loss) reclassified from OCI into Interest Expense ​ $ — ​ $ 355 ​ ​ ​ ​ ​ ​ ​ Total amount of Interest Expense presented in the consolidated statements of operations ​ $ 18,378 ​ $ 20,513 ​ Over time, the realized gains in accumulated other comprehensive income were reclassified into earnings as a decrease to interest expense in the same periods in which the hedged interest payments affected earnings. ​ The Company hedged the exposure to variability in anticipated future interest payments on existing debt. ​ 4.  Net Income (Loss) Per Share ​ Basic net income (loss) per share is computed by dividing net income (loss) by the weighted average number of Company shares outstanding during the period. Diluted net income (loss) per share reflects the potential dilution that could occur if securities or other contracts to issue shares were exercised or converted into shares. There were no potential dilutive shares outstanding at each of September 30, 2025 and 2024. ​ 16 Table of Contents 5.  Stockholders’ Equity ​ As of September 30, 2025, the Company had 103,690,340 shares of common stock outstanding. The Company declared and paid dividends as follows (in thousands, except per share amounts): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Dividends Per ​ Total Quarter Paid Share Dividends ​ ​ ​ ​ ​ ​ ​ ​ 2025: ​ ​ ​ ​ ​ ​ ​ First quarter of 2025 $ 0.01 $ 1,036 ​ Second quarter of 2025 $ 0.01 $ 1,035 ​ Third quarter of 2025 $ 0.01 $ 1,037 ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024: ​ ​ ​ ​ ​ ​ ​ First quarter of 2024 $ 0.01 $ 1,034 ​ Second quarter of 2024 $ 0.01 $ 1,034 ​ Third quarter of 2024 $ 0.01 $ 1,036 ​ ​ Equity-Based Compensation ​ On May 20, 2002, the stockholders of the Company approved the 2002 Stock Incentive Plan (the “Plan”). The Plan is an equity-based incentive compensation plan and provides for the grants of up to a maximum of 2,000,000 shares of the Company’s common stock (“Awards”). All of the Company’s employees, officers, directors, consultants and advisors are eligible to be granted Awards. Awards under the Plan are made at the discretion of the Company’s Board of Directors, and have no vesting requirements. Upon granting an Award, the Company will recognize compensation cost equal to the fair value of the Company’s common stock, as determined by the Company’s Board of Directors, on the date of the grant. ​ On May 31, 2024 and May 30, 2025, the Company granted shares under the Plan to non-employee directors with the compensation cost related to such grants indicated in the table below, which was recognized during the year ended December 31, 2024 and the nine months ended September 30, 2025, respectively, and is included in general and administrative expenses for such period. Such shares were fully vested on the date of issuance. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Shares Available ​ Compensation ​ ​ for Grant ​ Cost ​ ​ ​ ​ ​ ​ ​ Balance December 31, 2023 ​ ​ 1,502,248 ​ $ 1,721,241 Shares granted 2024 ​ ​ ( 136,362 ) ​ ​ 269,997 Balance December 31, 2024 ​ ​ 1,365,886 ​ $ 1,991,238 Shares granted 2025 ​ ​ ( 123,625 ) ​ ​ 224,998 Balance September 30, 2025 ​ ​ 1,242,261 ​ $ 2,216,236 ​ ​ ​ ​ ​ ​ ​ ​ ​ 6.  Income Taxes ​ General ​ The Company has elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended (the “Code”). As a REIT, the Company generally is entitled to a tax deduction for distributions paid to its shareholders, thereby effectively subjecting the distributed net income of the Company to taxation at the shareholder level only. The Company must comply with a variety of restrictions to maintain its status as a REIT. These restrictions include the type of income it can earn, the type of assets it can hold, the number of shareholders it can have and the concentration of their ownership, and the amount of the Company’s taxable income that must be distributed annually. ​ One such restriction is that the Company generally cannot own more than 10 % of the voting power or value of the securities of any one issuer unless the issuer is itself a REIT or a taxable REIT subsidiary (“TRS”). In the case of TRSs, the 17 Table of Contents Company’s ownership of securities in all TRSs generally cannot exceed 20 % ( 25 % of taxable years beginning on or before December 31, 2017) of the value of all of the Company’s assets and, when considered together with other non-real estate assets, cannot exceed 25 % of the value of all of the Company’s assets. FSP Investments LLC and FSP Protective TRS Corp. are the Company’s taxable REIT subsidiaries operating as taxable corporations under the Code. The TRSs have gross amounts of net operating losses (“NOLs”) available to those taxable corporations of $ 4.9 million and $ 4.9 million as of December 31, 2024 and December 31, 2023, respectively. The NOLs created prior to 2018 will expire between 2030 and 2047 and the NOLs generated after 2017 will not expire. A valuation allowance is provided for the full amount of the NOLs as the realization of any tax benefits from such NOLs is not assured. ​ Income taxes are recorded based on the future tax effects of the difference between the tax and financial reporting bases of the Company’s assets and liabilities. In estimating future tax consequences, potential future events are considered except for potential changes in income tax law or in rates. ​ The Company adopted an accounting pronouncement related to uncertainty in income taxes effective January 1, 2007, which did not result in recording a liability, nor was any accrued interest and penalties recognized with the adoption. Accrued interest and penalties will be recorded as income tax expense, if the Company records a liability in the future. The Company’s effective tax rate was not affected by the adoption. The Company and one or more of its subsidiaries files income tax returns in the U.S. federal jurisdiction and various state jurisdictions. The statute of limitations for the Company’s income tax returns is generally three years and as such, the Company’s returns that remain subject to examination would be primarily from 2021 and thereafter. ​ Net operating losses ​ Section 382 of the Code restricts a corporation’s ability to use net operating losses (“NOLs”) to offset future taxable income following certain “ownership changes.” Such ownership changes occurred with past mergers and accordingly a portion of the NOLs incurred by the Company’s prior sponsored REITs available for use by the Company in any particular future taxable year will be limited. To the extent that the Company does not utilize the full amount of the annual NOLs limit, the unused amount may be carried forward to offset taxable income in future years. NOLs expire 20 years after the year in which they arise, and the last of the Company’s NOLs will expire in 2027. Approximately $ 0.4 million of NOLs expired in 2024. A valuation allowance is provided for the full amount of the gross NOLs available as the realization of any tax benefits remaining from such NOLs is not assured. The gross amount of NOLs available to the Company was approximately $ 95.8 million as of both September 30, 2025 and December 31, 2024. ​ Income Tax Expense ​ The Company recognized approximately $ 31,000 in Federal Income Tax expense related to the sale of Monument Circle for the nine months ended September 30, 2025. The Company is subject to a business tax known as the Revised Texas Franchise Tax. Some of the Company’s leases allow reimbursement by tenants for these amounts because the Revised Texas Franchise Tax replaces a portion of the property tax for school districts. Because the tax base on the Revised Texas Franchise Tax is derived from an income based measure, it is considered an income tax. The Company recorded a provision for the Revised Texas Franchise Tax of $ 106,000 and $ 162,000 for the nine months ended September 30, 2025 and 2024, respectively. The income tax expense reflected in the consolidated statements of operations relates primarily to a franchise tax on the Company’s Texas properties. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Nine Months Ended September 30, (Dollars in thousands) 2025 2024 ​ ​ ​ ​ ​ ​ ​ Federal Income Tax ​ $ 31 ​ $ — ​ Revised Texas Franchise Tax ​ ​ 106 ​ ​ 162 ​ Other Taxes ​ — ​ — ​ Tax expense ​ $ 137 ​ $ 162 ​ ​ 18 Table of Contents Taxes on income are a current tax expense. No deferred income taxes were provided as there were no material temporary differences between the financial reporting basis and the tax basis of the TRSs. ​ 7.  Leases ​ Leases as a Lessor: The Company is a lessor of commercial real estate with operations that include the leasing of office properties. Many of the leases with customers contain options to extend leases at a fair market rate and may also include options to terminate leases. The Company considers several inputs when evaluating the amount it expects to derive from its leased assets at the end of the lease terms, such as the remaining useful life, expected market conditions, fair value of lease payments, expected fair values of underlying assets, and expected deployment of the underlying assets. The Company’s strategy to address its risk for the residual value in its commercial real estate is to re-lease the commercial space. ​ The Company has elected to apply the practical expedient to not separate non-lease components from the related lease component of real estate leases. This combined component is primarily comprised of fixed lease payments, early termination fees, common area maintenance cost reimbursements, and parking lease payments. The Company applies ASC 842-Leases to the combined lease and non-lease components. ​ For the nine months ended September 30, 2025 and 2024, the Company recognized the following amounts of income relating to lease payments: ​ ​ ​ ​ ​ ​ ​ ​ Income relating to lease payments: ​ ​ ​ ​ For the Nine Months Ended September 30, (in thousands) 2025 ​ 2024 Income from leases (1) ​ $ 81,081 ​ $ 92,937 ​ ​ $ 81,081 ​ $ 92,937 ​ ​ ​ ​ ​ ​ ​ (1) Includes amounts recognized from variable lease payments of $ 24,362 and $ 26,584 for the nine months ended September 30, 2025 and 2024, respectively. ​ ​ ​ ​ ​ ​ ​ ​ 8. Disposition of Properties and Assets Held for Sale ​ On April 7, 2025, Monument Circle entered into a purchase and sale agreement to sell its property located in Indianapolis, Indiana to a third party for a gross sales price of $ 6.0 million. The property was sold on June 6, 2025 at a total loss of $ 12.9 million, including an impairment loss of $ 13.3 million that was recorded during the three months ended March 31, 2025 and was decreased by $ 0.4 million for final sale adjustments during the three months ended June 30, 2025 after the sale was completed. ​ In October 2021, as part of its consideration for agreeing to amend and restate the Sponsored REIT Loan, the Company obtained from the stockholders of the parent of Monument Circle the right to vote their shares in favor of any sale of the property owned by Monument Circle any time on or after January 1, 2023. At March 31, 2025, the Company recorded this property at the fair value less cost to sell, which was less than the carrying value and resulted in an impairment loss of $ 13.3 million. The Company reclassified $ 5.7 million of this office property as an asset held for sale, which is comprised of $ 18.9 million in real estate assets, net of accumulated depreciation, prior to the impairment. The reclassification was a non-cash investing activity on the statement of cash flows. The Company estimated the fair value of this property, less estimated costs to sell, based on the purchase price set forth in the letter of intent to purchase the property that Monument Circle entered into with the third party (Level 3 inputs, as there are no observable inputs). ​ During the three months ended March 31, 2024, the Company sold one office property located in Richardson, Texas on January 26, 2024, for a sales price of $ 35.0 million at a loss of approximately $ 2.1 million, which was recorded as an impairment during the year ended December 31, 2023. An additional $ 5,000 of costs related to the sale were recorded during the three months ended March 31, 2024. ​ 19 Table of Contents During the three months ended June 30, 2024, the Company entered into an agreement to sell a property in Glen Allen, Virginia for a gross sales price of approximately $ 31.0 million and an expected loss of $ 13.2 million. The Company reclassified $ 28.6 million of its office property as an asset held for sale as of June 30, 2024, which was comprised of $ 38.0 million of real estate assets, net of accumulated depreciation, $ 1.4 million of straight-line rents receivable, and $ 2.4 million of deferred leasing commissions, net of accumulated amortization. The Company recorded the property at the fair value less cost to sell, which was less than the carrying value and resulted in an impairment loss of $ 13.2 million in the three months ended June 30, 2024. The reclassification is a non-cash investing activity on the statement of cash flows. The Company estimated the fair value of the property, less estimated costs to sell, using the offers to purchase the property made by third parties (Level 3 inputs, as there is no active market). The Company closed on the sale of the property on July 8, 2024. ​ During the three months ended September 30, 2023, the Company reclassified $ 39.0 million of an office property in Atlanta, Georgia as an asset held for sale as of September 30, 2023. The Company recorded this property at the fair value less cost to sell, which was less than the carrying value and resulted in an impairment loss of $ 20.5 million in the three months ended September 30, 2023. The reclassification was a non-cash investing activity on the statement of cash flows. The Company estimated the fair value of this property, less estimated costs to sell, using the offers to purchase the property made by third parties (Level 3 inputs, as there is no active market). ​ The asset held for sale located in Atlanta, Georgia, was expected to sell for a gross sales price of $ 40.0 million at a loss of approximately $ 20.5 million, which was recorded as an impairment loss as of September 30, 2023, however on November 15, 2023, the Company received notice from the buyer indicating that the buyer was terminating the transaction and directing the deposit and interest be disbursed to the Company. The property remained classified as an asset held for sale as of September 30, 2024. ​ During the three months ended September 30, 2024, the Company entered into an agreement to sell the property located in Atlanta, Georgia, which was classified as an asset held for sale during 2023. The Company increased the expected loss on this property by $ 6.6 million to $ 27.2 million when the Company entered into this new agreement to sell the property for a gross sales price of $ 34.0 million. The property sold on October 23, 2024, with a $ 0.4 million increase to loss from final sales adjustments on the date of sale. ​ ​ 9.  Segment Information ​ The Company is a REIT focused on real estate investments primarily in the office market and currently operates in one segment: real estate operations. Each of the Company’s properties qualify as an operating segment but are aggregated together because they exhibit similar economic characteristics and operating similarities. ​ The chief operating decision maker (“CODM”) of the Company is the Company’s Chief Executive Officer. The CODM measures the performance and profit or loss for the Company’s reportable segment using a measure referred to as Segment Net Operating Income (“Segment NOI”). The CODM utilizes Segment NOI when considering the deployment of the Company’s capital resources on a property-by-property basis. The significant expense categories which the Company’s CODM examines when measuring the segment’s performance include real estate operating expenses and real estate taxes and insurance. Asset information by segment is not reported because the Company does not use this measure to assess performance. The total assets of the Company’s reportable segment can be found on the Company’s consolidated balance sheets. ​ Segment NOI is a non-GAAP financial measure that the Company defines as net income or loss (the most directly comparable GAAP financial measure) plus selling, general and administrative expenses, depreciation and amortization, including amortization of acquired above and below market lease intangibles and impairment charges, interest expense, less equity in earnings of nonconsolidated REITs, interest income, hedge ineffectiveness, gains or losses on the sale of assets and excludes income taxes. Segment NOI, as defined by the Company, may not be comparable to NOI reported by other REITs that define NOI differently. Segment NOI should not be considered an alternative to net income or loss as an indication of our performance or to cash flows as a measure of the Company’s liquidity or its ability to make distributions. ​ 20 Table of Contents ​ The calculations of Segment NOI are shown in the following table: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Nine Months Ended ​ Three Months Ended ​ Nine Months Ended (in thousands) September 30, 2025 September 30, 2025 September 30, 2024 September 30, 2024 Total consolidated revenues ​ ​ 27,300 ​ $ 81,122 ​ ​ 29,682 ​ $ 91,737 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Reconciling items: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amortization of above/below market leases ​ ​ — ​ ​ — ​ ​ (5) ​ ​ ( 17 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Less: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Real estate operating expenses ​ ​ 10,671 ​ ​ 31,467 ​ ​ 11,574 ​ ​ 33,620 Real estate taxes and insurance ​ ​ 5,262 ​ ​ 14,822 ​ ​ 5,512 ​ ​ 17,175 Segment NOI ​ $ 11,367 ​ $ 34,833 $ 12,591 $ 40,925 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​ Nine Months Ended ​ Three Months Ended ​ Nine Months Ended Reconciliation to Net loss ​ ​ September 30, 2025 ​ September 30, 2025 ​ September 30, 2024 ​ September 30, 2024 Net loss $ ( 8,326 ) $ ( 37,637 ) $ (15,622) $ ( 44,197 ) Add (deduct): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loss on extinguishment of debt ​ ​ 7 ​ ​ 12 ​ ​ 477 ​ ​ 614 (Gain) loss on sale of properties and impairment of assets held for sale, net ​ ​ — ​ 12,900 ​ ​ 7,254 ​ 20,459 Depreciation and amortization ​ ​ 10,550 ​ 32,000 ​ ​ 10,911 ​ 34,018 Amortization of above/below market leases ​ ​ — ​ — ​ ​ (5) ​ ( 17 ) General and administrative ​ ​ 3,034 ​ 9,799 ​ ​ 3,275 ​ 11,069 Interest expense ​ ​ 6,348 ​ 18,378 ​ ​ 6,585 ​ 20,513 Interest income ​ ​ ( 249 ) ​ ( 756 ) ​ ​ (340) ​ ( 1,696 ) Tax expense ​ ​ 3 ​ ​ 137 ​ ​ 56 ​ 162 Segment NOI $ 11,367 $ 34,833 $ 12,591 $ 40,925 ​ ​ ​ ​ ​ ​ ​ 10.  Subsequent Events ​ On October 3, 2025 , the Board of Directors of the Company declared a cash distribution of $ 0.01 per share of common stock payable on November 6, 2025 , to stockholders of record on October 17, 2025 . ​ ​ ​ ​ ​ ​ 21 Table of Contents