What changed in this filing

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Item 1. Business

2021-02-16 compared with 2020-02-11 · 52 added, 16 removed, 243 unchanged (22% of the section changed)

36 unchanged sentences

Our efforts have been awarded recognition from various third party review entities, such as GRESB, ENERGY STAR and LEED.

For more details on our programs, key performance indicators, and achivements, please review the ESG tab on our website, www.fspreit.com .

Impact of COVID-19

The COVID-19 pandemic has caused severe disruptions in the U.S.

and global economies and has had and is expected to continue to have an adverse impact on our financial condition and results of operations.

This impact could be materially adverse to the extent that the current COVID-19 pandemic, or future pandemics, cause tenants to be unable to pay their rent or reduce the demand for commercial real estate.

See “Item 1A.

Risk Factors” and “Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations” for additional information.

Investment Objectives

6 unchanged sentences

From time to time, as market conditions warrant, we may sell properties owned by us.

For example, we sold an office property located in Durham, North Carolina on December 23, 2020 with a sales price of approximately $89.7 million, at a gain of approximately $41.9 million.

We did not sell any properties during 2019 or 2018.

We sold an office property located in Milpitas, California on January 6, 2017 at a $2.3 million gain and an office property located in Baltimore, Maryland on October 20, 2017 at a $20.8 million loss.

When we sell a property, we either distribute some or all of the sale proceeds to our stockholders as a distribution or retain some or all of such proceeds for investment in real properties or other corporate activities.

In 2021, we determined that further debt reduction would provide greater financial flexibility and potentially increase shareholder value.

Accordingly, we have adopted a strategy to dispose of certain properties in 2021 where we believe our valuation objective has been met.

Pursuant to this strategy we anticipate dispositions in 2021 will result in estimated aggregate gross proceeds in the range of $350 million to $450 million.

Proceeds from these potential dispositions would be used primarily for the repayment of debt.

We rely on the following principles in selecting real properties for acquisition by FSP Corp.

13 unchanged sentences

Competitive conditions are affected by larger market forces beyond our control, such as general economic conditions, which may increase competition among landlords for quality tenants, and individual decisions by tenants that are beyond our control.

Governmental Regulations

Under various federal, state and local laws, ordinances and regulations, we, as an owner or operator of real property may become liable for the costs of removal or remediation of certain hazardous substances released on or in our property.

Such laws may impose liability without regard to whether the owner or operator knew of, or caused, the release of such hazardous substances.

The presence of hazardous substances on a property may adversely affect the owner’s ability to sell such property or to borrow using such property as collateral, and it may cause the owner of the property to incur substantial remediation costs.

In addition to claims for cleanup costs, the presence of hazardous substances on a property could result in the owner incurring substantial liabilities as a result of a claim by a private party for personal injury or a claim by an adjacent property owner for property damage.

All of our properties are required to comply with the Americans With Disabilities Act, or ADA, and the regulations, rules and orders that may be issued thereunder.

The ADA has separate compliance requirements for “public accommodations” and “commercial facilities,” but generally requires that buildings be made accessible to persons with disabilities.

Compliance with ADA requirements might require, among other things, removal of access barriers.

Noncompliance with such requirements could result in the imposition of fines by the U.S.

government or an award of damages to private litigants.

In addition, we are required to operate our properties in compliance with fire and safety regulations, building codes and other land use regulations, as they may be adopted by governmental agencies and bodies and become applicable to our properties.

Compliance with such requirements may require us to make substantial capital expenditures, which expenditures would reduce cash otherwise available for distribution to our stockholders.

The provisions of the tax code governing the taxation of REITs are very technical and complex, and although we expect that we will be organized and will operate in a manner that will enable us to meet such requirements, no assurance can be given that we will always succeed in doing so.

If in any taxable year we do not qualify as a REIT, we would be taxed as a corporation and distributions to our stockholders would not be deductible by us in computing our taxable income.

In addition, if we were to fail to qualify as a REIT, we could be disqualified from treatment as a REIT in the year in which such failure occurred and for the next four taxable years and, consequently, we would be taxed as a regular corporation during such years.

Failure to qualify for even one taxable year could result in a significant reduction

of our cash available for distribution to our stockholders or could require us to incur indebtedness or liquidate investments in order to generate sufficient funds to pay the resulting federal income tax liabilities.

See “Item 1A.

Risk Factors” and “Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations” for additional information.

Human Capital

We had 37 employees as of each of February 5, 2021 and December 31, 2020.

Women represent 48.6% of our employees, of which 50.0% hold management level/leadership roles.

We endeavor to maintain a workplace that is free from discrimination or harassment on the basis of color, race, sex, national origin, ethnicity, religion, age, disability, sexual orientation, gender identification or expression or any other status protected by applicable law.

We regularly conduct training to prevent harassment and discrimination.

The Company’s basis for recruitment, hiring, development, training, compensation and advancement of employees is qualifications, performance, skills and experience.

Many of our employees have a long tenure with the Company.

Our employees are compensated without regard to gender, race and ethnicity, and our compensation program is designed to attract and retain talent.

During the COVID-19 pandemic, employees have been offered work-from-home flexibility to meet personal and family needs.

Available Information

1 unchanged sentence

We will voluntarily provide paper copies of our filings and code of ethics upon written request received at the address on the cover of this Annual Report on Form 10-K, free of charge.

Directors of FSP Corp.

Information about our Directors

The following table sets forth the names, ages and positions of all our directors as of February 5, 2021.

9 unchanged sentences

(3) Member of the Nominating and Corporate Governance Committee

(4) Term expiring at 2022 Annual Meeting of Stockholders

(5) Term expiring at 2021 Annual Meeting of Stockholders

(6) Term expiring at 2020 Annual Meeting of Stockholders

(4) Term expiring at our 2022 Annual Meeting of Stockholders

(5) Term expiring at our 2021 Annual Meeting of Stockholders

(6) Chair of the Audit Committee

6 unchanged sentences

Carter is responsible for all aspects of the business of FSP Corp.

and its affiliates, with special emphasis on the evaluation, acquisition and structuring of real estate investments.

and its affiliates, with special emphasis on the evaluation,

acquisition and structuring of real estate investments.

Prior to the conversion, he was President of the general partner of the FSP Partnership and was responsible for all aspects of the business of the FSP Partnership and its affiliates.

20 unchanged sentences

Hansen, age 49, has been a Director of FSP Corp.

since 2012 and Chair of the Nominating and Corporate Governance Committee since 2013.

since 2012 and became Chair of the Compensation Committee in February 2021.

Since 2007, Mr.

8 unchanged sentences

Hansen served as a Manager in Arthur Andersen LLP’s Audit & Business Advisory practice.

Hansen has served on the boards of a number of non-profit entities and currently serves on the Investment Committee of the Archdiocese of St.

Hansen has served on the boards of a number of non-profit entities and currently serves on the Finance Council and as the Investment Committee Chair of the Archdiocese of St.

Louis and as a member of the St.

4 unchanged sentences

Hoxsie, age 70, has been a Director of FSP Corp.

since January 2016.

since January 2016 and became Chair of the Nominating and Corporate Governance Committee in February 2021.

Hoxsie was a Partner at the international law firm of Wilmer Cutler Pickering Hale and Dorr LLP (“WilmerHale”) until his retirement on December 31, 2015.

13 unchanged sentences

He is currently president of the Board of Trustees of Florida Studio Theater, a professional non-profit theater organization, and he serves as a Co-Chair, together with his wife, of Embracing Our Differences, an annual two-month long art exhibit that promotes the values of diversity and inclusion.

McGillicuddy also is a director of All-Star Children’s Foundation, an organization engaged in creating a new paradigm for foster care.

McGillicuddy also is a director and Chief Executive Officer of All-Star Children’s Foundation, an organization engaged in creating a new paradigm for foster care.

Georgia Murray, age 70, has been a Director of FSP Corp.

since April 2005, Chair of the Compensation Committee since October 2006 and Lead Independent Director since February 2014.

since April 2005 and Lead Independent Director since February 2014.

Murray is retired from Lend Lease Real Estate Investments, Inc., where she served as a Principal from November 1999 until May 2000.

13 unchanged sentences

O’Neil was an Investment Consultant at Cambridge Associates where she specialized in Alternative Assets.

O’Neil currently serves on a variety of non-profit boards, including the Peabody Essex Museum where she is a Director and a member of the Finance, Audit, and Investment Committees, Horizon’s for Homeless Children where she is a Director and serves on the Executive and Finance Committees, and the Trustees of Reservations where she serves on the President’s Council and Investment Committee.

O’Neil is a Trustee Emeritus of Colby College and a former member of the Board of Overseers of the Boston Museum of Science.

87 unchanged sentences

Anchondo is a graduate of Boston University (B.A.) and Cornell University (M.B.A.).

Except for Eriel Anchondo, who joined FSP Corp.

in 2015, each of the above executive officers has been a full-time employee of FSP Corp.

Each of the above executive officers has been a full-time employee of FSP Corp.

for the past five fiscal years.

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 1. Business