What changed in this filing

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Item 1A. Risk Factors

2026-03-09 compared with 2025-02-11 · 57 added, 87 removed, 164 unchanged (47% of the section changed)

The following material factors, among others, could cause actual results to differ materially from those indicated by forward-looking statements made in this Annual Report on Form 10-K and presented elsewhere by management from time-to-time.

Risks Related to our Indebtedness

If our one remaining Sponsored REIT defaults on its Sponsored REIT Loan, we may be required to keep balances outstanding on our existing debt, seek new debt or use our cash balance to repay our existing debt, which may reduce cash available for distribution to our stockholders or for other corporate purposes.

We have one remaining secured loan to a Sponsored REIT in the form of a mortgage loan, which we refer to as the Sponsored REIT Loan.

We anticipate that the Sponsored REIT Loan will be repaid through cash flow from property operations or sale of the underlying property, although the actual amount and timing of any repayment is uncertain and will likely depend on prevailing market conditions at the time of any such sale.

If the Sponsored REIT defaults on the Sponsored REIT Loan, the Sponsored REIT could be unable to fully repay the Sponsored REIT Loan and we may have to satisfy our obligations under our existing debt through other means, including without limitation, keeping balances outstanding, seeking new debt, and/or using our cash balance.

If that happens, we may have less cash available for distribution to our stockholders or for other corporate purposes.

Our operating results and financial condition could be adversely affected if we are unable to refinance the BofA Term Loan, the BMO Term Loan, the Series A Notes or the Series B Notes.

Each of the BofA Term Loan, the BMO Term Loan, the Series A Notes or the Series B Notes (each as defined in Part II, Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations) matures on April 1, 2026.

There can be no assurance that we will be able to refinance this indebtedness at maturity, or if we were able to do so, that any such refinancings would be on terms as favorable as the terms currently applicable to the BofA Term Loan, the BMO Term Loan, the Series A Notes, or the Series B Notes, and we may not be able to otherwise obtain

funds by selling assets or raising equity to make required payments on the BofA Term Loan, the BMO Term Loan, the Series A Notes or the Series B Notes.

If we are unable to refinance or repay the BofA Term Loan, the BMO Term Loan, the Series A Notes or the Series B Notes at maturity or otherwise meet our payment obligations, we would be in default under the terms of the applicable indebtedness and our operations and financial condition would be materially and adversely affected.

Failure to comply with covenants in the documents evidencing the BofA Term Loan, the BMO Term Loan, the Series A Notes or the Series B Notes could adversely affect our financial condition.

The documents evidencing the BofA Term Loan, the BMO Term Loan, the Series A Notes and the Series B Notes contain customary affirmative and negative covenants, including some or all of the following:

limitations with respect to indebtedness, liens, investments, mergers and acquisitions, disposition of assets, use of net cash proceeds from the disposition of properties, assets and equity issuances, mandatory prepayments, the requirement to have certain subsidiaries provide guarantees, the requirement to pledge our equity interests in certain subsidiaries as collateral, changes in business, certain restricted payments, repurchases and redemptions of our common stock, going concern qualifications to our financial statements, and transactions with affiliates.

In addition, subject to certain tax-related exceptions, the documents evidencing the BofA Term Loan, the BMO Term Loan, the Series A Notes and the Series B Notes restrict our ability to make quarterly dividend distributions that exceed $0.01 per share of our common stock;

provided, however, that notwithstanding such restriction, we are permitted to make dividend distributions based on our good faith estimate of projected or estimated taxable income or otherwise as necessary to retain our 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 we would otherwise be subject.

The documents evidencing the BofA Term Loan, the BMO Term Loan, the Series A Notes and the Series B Notes contain the following financial covenants:

minimum tangible net worth;

maximum leverage ratio;

maximum secured leverage ratio;

maximum secured recourse leverage ratio;

minimum fixed charge coverage ratio;

maximum unencumbered leverage ratio;

and minimum unsecured interest coverage.

Our continued general compliance with the BofA Term Loan, the BMO Term Loan, the Series A Notes and the Series B Notes is subject to ongoing compliance with our financial and other covenants.

Failure to comply with such covenants could cause a default under the BofA Term Loan, the BMO Term Loan, the Series A Notes or the Series B Notes, and we may then be required to repay them with capital from other sources.

Under those circumstances, other sources of capital may not be available to us, or be available only on unattractive terms.

If we breach covenants in the documents evidencing the BofA Term Loan, the BMO Term Loan, the Series A Notes or the Series B Notes, the lenders can declare a default.

A default under documents evidencing the BofA Term Loan, the BMO Term Loan, the Series A Notes, or the Series B Notes could result in difficulty financing growth in our business and could also result in a reduction in the cash available for distribution to our stockholders or for other corporate purposes.

A default under documents evidencing the BofA Term Loan, the BMO Term Loan, the Series A Notes or the Series B Notes could materially and adversely affect our financial condition and results of operations.

An increase in interest rates would increase our interest costs on variable rate debt and could adversely impact our ability to refinance existing debt or sell assets.

As of each of December 31, 2024 and February 6, 2025, we had $55.6 million outstanding under the BofA Term Loan.

Interest on the BofA Term Loan bears interest at variable rates based on a spread over SOFR and includes a 5.00% floor on SOFR.

As of each of December 31, 2024 and February 6, 2025, we had $71.1 million outstanding under the BMO Term Loan.

Interest on the BMO Term Loan bears interest at variable rates based on a spread over SOFR and includes a 5.00% floor on SOFR.

During 2024, the Federal Reserve lowered the federal funds rate target three times, most recently decreasing it by 25 basis points on December 18, 2024, to a range of 4.25% to 4.50%.

If interest rates increase, then the interest costs on our unhedged variable rate debt will also increase, which could adversely affect our cash flow, our ability to pay

principal and interest on our debt and our ability to make distributions to stockholders.

In addition, rising interest rates could limit our ability to incur new debt or to refinance existing debt when it matures.

From time to time, we may enter into interest rate swap agreements and other interest rate hedging contracts, including swaps, caps and floors.

While these agreements are intended to lessen the impact of rising interest rates on us, they also expose us to the risks that the other parties to the agreements will not perform, we could incur significant costs associated with the settlement of the agreements, the agreements will be unenforceable and the underlying transactions will fail to qualify as highly-effective cash flow hedges.

In addition, increases in interest rates could decrease the amount third parties are willing to pay for our assets, thereby limiting our ability to change our portfolio promptly in response to changes in economic or other conditions, to incur new debt or refinance existing debt when it matures.

Downgrades in our credit ratings could reduce our access to funding sources in the credit and capital markets.

We are currently assigned a corporate credit rating from Moody’s Investors Service, Inc.

(“Moody’s”) based on its evaluation of our creditworthiness.

Although our corporate credit rating from Moody’s is currently below investment grade, there can be no assurance that we will not be further downgraded.

Credit rating reductions or other negative actions by one or more rating agencies could adversely affect our access to funding sources, the cost and other terms of obtaining funding as well as our overall financial condition, operating results and cash flow.

If we do not repay a portion of our indebtedness by March 31, 2025, our interest costs will increase.

The terms of the BofA Term Loan and the BMO Term Loan 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, then 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.

The terms of the Senior Notes 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, then the per annum interest rates applicable to the Series A Notes and the Series B Notes will permanently increase by 1.00% from 8.00% per annum to 9.00% per annum.

We currently have approximately $250.3 million of indebtedness outstanding under the BMO Term Loan, the BofA Term Loan and the Senior Notes.

Therefore, if we do not repay approximately $50.3 million of our indebtedness by March 31, 2025, the interest rate on each of our BMO Term Loan, the BofA Term Loan and the Senior Rates will permanently increase by 1%.

An increase in our interest costs would adversely affect our cash flow and could adversely affect our capacity to pay principal and interest on our debt and our ability to make distributions to stockholders.

In addition, increased interest rates on our outstanding indebtedness could adversely affect our ability to incur new debt or to refinance our existing debt when it matures.

Risks Related to our Operations and Properties

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The COVID-19 pandemic has adversely impacted our properties and operating results and continues to present material uncertainty and risk with respect to the performance of our properties and our financial results.

Considerable uncertainty still surrounds the long-term impact of the COVID-19 pandemic and its potential effects on the population, including the spread of more contagious variants of the virus, and on the commercial real estate market and our business.

Uncertainty still surrounds the long-term impact of the COVID-19 pandemic, on the commercial real estate market and our business.

Many of our tenants still do not fully occupy the space that they lease.

Any ongoing negative impacts from the COVID-19 pandemic could adversely affect us and/or our tenants due to, among other factors:

the potential negative impact to the businesses of our tenants, the impact of work-from-home and return-to-work policies, the potential negative impact to leasing efforts and occupancy at our properties, uncertainty regarding future rent collection levels or requests for rent concessions from our tenants, the occurrence of a default under any of our debt agreements, the potential for increased borrowing costs, negative impacts on our ability to refinance existing indebtedness or to secure new sources of capital on

favorable terms, fluctuations in our level of dividends, increased costs of operations, making more difficult our ability to complete required capital expenditures in a timely manner and on budget, decreases in values of our real estate assets, changes in law and/or regulation, and uncertainty regarding government and regulatory policy.

Some of our existing tenants and potential tenants operate in businesses and industries that continue to be adversely affected by the continuing disruption to business as a result of the COVID-19 pandemic.

Some of our existing tenants and potential tenants have elected to, or been required to, and may in the future elect to, or be required to, reduce or suspend operations for extended periods of time, including as a result of work-from-home policies.

Some of our tenants have requested rent concessions and more tenants may request rent concessions or may not pay rent in the future.

These situations could lead to increased rent delinquencies and/or defaults under leases, a lower demand for rentable space leading to increased concessions or lower occupancy, increased tenant improvement capital expenditures, or reduced rental rates to maintain occupancies.

For example, on December 21, 2020, the parent company of a tenant that leases approximately 130,000 square feet filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code, resulting in a writeoff charge of $3.1 million.

Our operations could be materially negatively affected if the economic downturn is prolonged, which could adversely affect our operating results, our ability to pay dividends, our ability to repay or refinance our existing indebtedness, and the price of our common stock.

the potential negative impact to the businesses of our tenants, the impact of work-from-home and return-to-work policies, the potential negative impact to leasing efforts and occupancy at our properties, the occurrence of a default under any of our debt agreements, the potential for increased borrowing costs, negative impacts on our ability to refinance existing indebtedness or to secure new sources of capital on favorable terms, decreases in values of our real estate assets, and uncertainty regarding government and regulatory policy.

Some of our existing tenants and potential tenants operate in businesses and industries that continue to be adversely affected by continuing effects of the COVID-19 pandemic.

These effects could lead to increased rent delinquencies and/or defaults under leases, a lower demand for rentable space leading to increased concessions or lower occupancy, increased tenant improvement capital expenditures, or reduced rental rates to maintain occupancies.

For example, on December 21, 2020, the parent company of a tenant that leased approximately 130,000 square feet filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code, resulting in a writeoff charge of $3.1 million.

Our operations could be materially negatively affected as a result, which could adversely affect our operating results, our ability to pay dividends, our ability to repay or refinance our existing indebtedness, and the price of our common stock.

Economic conditions in the United States could have a material adverse impact on our earnings and financial condition.

Although recent indicators suggest that economic activity has expanded at a modest pace, the global economy continues to experience significant disruptions and uncertainty as a result of various factors, including geopolitical events such as the wars and conflicts in Ukraine and the Middle East, increasing tensions with China and Iran, the long-term impact of the COVID-19 pandemic and continuing supply chain difficulties.

Because economic conditions directly affect the demand for office space, our primary income producing asset, broad economic market conditions in the United States, including uncertainty over interest rates, slower growth, stock market volatility or recession fears, could have a material adverse effect on our earnings and financial condition.

The global economy continues to experience significant disruptions and uncertainty as a result of various factors, including changes in U.S.

trade or other policies or those policies of other nations, geopolitical events such as the wars and conflicts in Iran and other countries in the Middle East and Ukraine, increasing tensions with China and Venezuela, tensions between the U.S.

and Europe related to the sovereignty of Greenland, major political shifts domestically or internationally and continuing supply chain difficulties.

Because economic conditions directly affect the demand for office space, our primary income producing asset, broad economic market conditions in the United States, including uncertainty over interest rates, inflation, tariffs, slower growth, stock market volatility or recession fears, could have a material adverse effect on our earnings and financial condition.

Economic conditions may be affected by numerous other factors, including but not limited to, inflation and employment levels, energy prices, uncertainty about government fiscal, monetary, trade and tax policies, changes in currency exchange rates, the regulatory environment and the availability of credit.

Future economic factors also may negatively affect the demand for office space, real estate values, occupancy levels and property income.

If we are not able to collect sufficient rents from each of our owned real properties or collect interest on the Sponsored REIT Loan, we may suffer significant operating losses or a reduction in cash available for future dividends.

If we are not able to collect sufficient rents from each of our owned real properties, we may suffer significant operating losses.

A substantial portion of our revenue is generated by the rental income of our real properties.

If our properties do not provide us with a steady rental income, our revenues will decrease, which may cause us to incur operating losses in the future.

In addition, if our properties do not provide us with rental income or we do not collect interest income from the Sponsored REIT Loan, it will reduce the cash available for distribution to our stockholders.

We may not be able to dispose of properties on acceptable terms or within the time periods we anticipate pursuant to our disposition strategy.

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As we execute this strategy, our revenue, Funds From Operations, and capital expenditures may decrease in the short term.

Proceeds from dispositions are intended to be used primarily for the repayment of debt.

Under the Credit Agreement, certain proceeds from dispositions are required to be used for the repayment of debt.

We may not be able to dispose of properties at acceptable prices or otherwise on anticipated terms and conditions within the time periods contemplated by our disposition strategy, which would adversely affect our ability to use the proceeds as intended and impair our financial flexibility.

We are dependent on key personnel.

We are dependent on key personnel and if our Chief Executive Officer and Chairman of the Board of Directors ceases to serve in such position, we may be obligated to pay all outstanding obligations under the Credit Agreement.

We depend on the efforts of George J.

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Donahue, our President of FSP Property Management LLC and an Executive Vice President;

and Eriel Anchondo, our Chief Operating Officer and an Executive Vice President.

Anchondo, our Chief Operating Officer and an Executive Vice President.

If any of our executive officers were to resign, our operations could be adversely affected.

We do not have employment agreements with any of our executive officers.

The Credit Agreement provides that if George J.

Carter ceases to serve in the position of our Chief Executive Officer and Chairman of the Board of Directors or devote substantially all of his business time and attention to FSP Corp., whether as a result of resignation, death, disability or otherwise, and we do not use commercially reasonable efforts to find a permanent replacement to replace Mr.

Carter that is reasonably satisfactory to the Required Lenders (as defined in the Credit Agreement) following such cessation, such event will constitute an event of default under the Credit Agreement and would entitle the lenders to terminate their lending commitments, and to accelerate all outstanding obligations under the Credit Agreement.

Carter remains our Chief Executive Officer and Chairman of the Board of Directors is not entirely under our control.

Although we intend to find an appropriate replacement satisfactory to the Required Lenders if Mr.

Carter leaves his current position, there is no assurance that we will be able to find a replacement acceptable to the Required Lenders.

If there is an event of default under the Credit Agreement, there can be no assurance that we will be able to repay all outstanding obligations or be able to find alternative financing, which could materially adversely affect our business, financial condition and results of operations.

We face risks from tenant defaults or bankruptcies.

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In addition, at any time, a tenant of one of our properties may seek the protection of bankruptcy laws, which could result in the rejection and termination of such tenant’s lease and thereby cause a reduction in cash available for distribution to our stockholders.

For example, in December 2020, the parent company of a tenant that leased approximately 130,000 square feet filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code, resulting in a write-off charge of $3.1 million.

New acquisitions may fail to perform as expected.

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Certain significant costs, such as real estate taxes, utilities, insurance and maintenance costs, generally are not reduced even when a property’s rental income is reduced.

In addition, environmental and tax laws, interest rate levels, the availability of financing and other factors may affect real estate values and property income.

In addition, environmental and tax laws, interest rate levels,

the availability of financing and other factors may affect real estate values and property income.

Furthermore, the supply of commercial space fluctuates with market conditions.

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When leases expire, we may incur expenses and may not be able to re-lease the space on the same terms.

at current market rates for locations in which the buildings are located, which in some cases may be below the expiring rates.

While we cannot predict when existing vacant space in properties will be leased, if existing tenants with expiring leases will renew their leases or what the terms and conditions of the lease renewals will be, we expect to renew or sign new leases at current market rates for locations in which the buildings are located, which in some cases may be below the expiring rates.

Certain leases provide tenants the right to terminate early if they pay a fee.

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We face risks of tenant-type concentration.

As of December 31, 2024, approximately 25% of our tenants as a percentage of the total rentable square feet operated in the energy services industry.

As of December 31, 2025, approximately 25% and 10% of our tenants as a percentage of the total rentable square feet operated in the energy services industry and the professional services industry, respectively.

An economic downturn in these or any industry in which a high concentration of our tenants operate or in which a significant number of our tenants currently or may in the future operate, could negatively impact the financial condition of such tenants and cause them to fail to make timely rental payments or default on lease obligations, fail to renew their leases or renew their leases on terms less favorable to us, become bankrupt or insolvent, or otherwise become unable to satisfy their obligations to us, which could adversely affect our financial condition and results of operations.

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Security breaches and other disruptions could compromise our information and expose us to liability, which could cause our business and reputation to suffer.

In the ordinary course of our business, we collect and store sensitive data concerning investors in the Sponsored REIT, tenants and vendors.

In the ordinary course of our business, we collect and store sensitive data concerning tenants and vendors.

Although we have taken steps to protect the security of our information technology systems and the data maintained in those systems, such systems and infrastructure may be vulnerable to attacks by hackers, computer viruses or ransomware, or breaches due to employee error, malfeasance, impersonation of authorized users or other disruptions.

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Should an uninsured material loss occur, we could lose both capital invested in the property and anticipated profits.

Risks Related to our Indebtedness

Failure to comply with covenants in the Credit Agreement could adversely affect our financial condition.

On February 26, 2026, we entered into a Credit Agreement with Alter Domus (US) LLC, as administrative agent, and the lenders from time to time party thereto, which provides for a secured credit facility for aggregate principal commitments of up to $320 million, consisting of (i) initial term loans in an aggregate principal amount of $275 million, and (ii) delayed draw term loans available upon the approval of the lenders party thereto in an aggregate principal amount of up to $45 million.

The Credit Agreement contains customary affirmative and negative covenants, including without limitation and subject to certain exceptions, restrictions on indebtedness, liens, investments, mergers, consolidations and other fundamental changes, dispositions of assets (including real property), capital expenditures, changes in business, certain restricted payments, transactions with affiliates, burdensome agreements, sale leaseback transactions, prepayments of other debt, corporate operating expenses and severance and retention payments.

The Credit Agreement also contains minimum tangible net worth and minimum liquidity financial covenants.

Failure to comply with the covenants in the Credit Agreement would entitle the lenders to terminate their lending commitments, and to accelerate all outstanding obligations under the Credit Agreement.

Under those circumstances, other sources of capital may not be available to us, or be available only on unattractive terms.

A default under the Credit Agreement could result in difficulty financing growth in our business.

A default under the Credit Agreement could materially and adversely affect our financial condition and results of operations.

Risks Related to Legal and Regulatory Matters

We are subject to risks from changes in trade policies and tariffs

Changes in the financial condition of our tenants or prospective tenants directly or indirectly resulting from geopolitical developments that could negatively affect important supply chains and international trade, the termination or threatened termination of existing international trade agreements, or the implementation of tariffs or retaliatory tariffs on imported or exported goods could adversely affect the financial condition and results of operations of our tenants or prospective tenants.

The uncertainty regarding the ultimate impact of any changes in trade policies or tariffs could also impact tenants or prospective tenants as they continue to determine changes needed to their businesses.

Such changes in trade policy or the imposition of tariffs could accordingly adversely affect our ability to lease our properties which in turn could have a material adverse effect on our business, results of operations, and financial condition.

We are subject to possible liability relating to environmental matters, and we cannot assure you that we have identified all possible liabilities.

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Risks Related to our Common Stock

Our level of dividends may fluctuate.

Because our real estate occupancy levels, rental rates and property disposition levels can fluctuate, there is no predictable recurring level of revenue from such activities and changes in interest rates or in the mix of our fixed and variable rate debt can cause our interest costs to fluctuate.

As a result of these fluctuations, the amount of cash available for distribution to our stockholders may fluctuate, which may result in our not being able to maintain or grow dividend levels, including special dividends, in the future.

In 2022, we adopted a variable quarterly dividend policy, which replaced our previous regular quarterly dividend policy.

Under this dividend policy, our Board of Directors determines quarterly dividends based upon a variety of factors, including our estimates of our annual taxable income and the amount that we are required to distribute annually in the aggregate to enable us to continue to qualify as a REIT for federal income tax purposes.

In addition, the BofA Term Loan, the BMO Term Loan, the Series A Notes and the Series B Notes include restrictions on our ability to make quarterly dividend distributions that exceed $0.01 per share of our common stock;

provided, however, that notwithstanding such restrictions, we are permitted to make dividend distributions based

on our good faith estimate of projected or estimated taxable income or otherwise as necessary to retain our status as a REIT, to meet the distribution requirements of Section 857 of the Internal Revenue Code or to eliminate any income or excise taxes to which we would otherwise be subject.

We have suspended quarterly dividends and may not resume paying dividends on our common stock, and may not elect to resume paying dividends in the foreseeable future or at all.

In March 2026, our Board of Directors determined to suspend quarterly cash dividends to reduce operating expenses and to redeploy that capital into leasing efforts intended to enhance the value of our portfolio.

In addition, the Credit Agreement provides that we may not declare dividends in excess of the greater of $0.01 per share or such amount as is required to maintain our status as a REIT.

Any future declaration and payment of dividends will be determined from time to time by our Board of Directors and will depend on, among other things, our results of operations, cash flows, liquidity, financial condition, capital requirements and other factors the Board of Directors deems relevant.

There can be no assurance that we will resume paying dividends in the foreseeable future or at all, which could adversely affect the market price of our common stock.

The real properties held by us may significantly decrease in value.

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The value of our common stock may be adversely affected if the real properties held by us decline in value since these real properties represent the majority of the tangible assets held by us.

Moreover, if we are forced to sell or lease the real property held by us below its initial purchase price or its carrying costs, respectively, or if we are forced to lease real property at below market rates because of the condition of the property or general economic or local market conditions, our results of operations would be adversely affected and such negative results of operations may result in lower dividends being paid to holders of our common stock.

Further issuances of equity securities may be dilutive to current stockholders.

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The market conditions for REIT stocks generally could affect the market price of our common stock.

If we fail to comply with the continued listing requirements of the NYSE American stock exchange, our common stock may be delisted and the price of our common stock and our ability to access capital markets could be negatively impacted.

We must satisfy the NYSE American stock exchange’s continued listing requirements, including, among other things, a requirement that the price of our common stock may not sell for a substantial period of time at a low price per share.

If our common stock sells for a substantial period of time at a low price per share, the NYSE American may require us to effect a reverse split of such shares within a reasonable time after being notified that the NYSE American deems such action to be appropriate under all the circumstances.

A reverse split of our common stock could have an adverse effect on the value of a stockholder’s investment in our common stock if our stock price continued to fall after the reverse split is effected.

In addition, if we fail to maintain compliance with any of the NYSE American's continued listing requirements, it could affect our ability to raise capital on acceptable terms, or at all.

In the event our common stock is delisted from the NYSE American, the only established trading market for our common stock would be eliminated, and we would be forced to list our shares on the OTC Markets or another quotation medium, depending on our ability to meet the specific listing requirements of those quotation systems.

As a result, an investor would likely find it more difficult to trade or obtain accurate price quotations for our shares.

Delisting would likely also reduce the visibility, liquidity, and value of our common stock, reduce institutional investor interest in us, and may increase the volatility of our common stock.

Delisting could also cause a loss of confidence of potential lessees, lenders, and employees, which could further harm our business and our future prospects.

Risks Related to our Organization and Structure

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In addition, as a result of our past acquisition of certain sponsored REITs by merger, which we refer to as target REITs, we might no longer qualify as a REIT.

We could lose our ability to so qualify for a variety of reasons relating to the nature of the assets acquired from the target REITs, the identity of the stockholders of the target REITs who become our stockholders or the failure of one or more of the target REITs to have previously qualified as a REIT.

REITs to have previously qualified as a REIT.

Moreover, if one or more of the target REITs that we acquired in May 2008, April 2006, April 2005 or June 2003 did not qualify as a REIT immediately prior to the consummation of its acquisition, we could be disqualified as a REIT as a result of such acquisition.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors