What changed in this filing

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Item 1. Financial Statements

2021-11-08 compared with 2021-08-03 · 118 added, 80 removed, 364 unchanged (35% of the section changed)

2 unchanged sentences

Consolidated Balance Sheets

September 30,

(in thousands, except share and par value amounts)

36 unchanged sentences

Consolidated Statements of Operations

For the Three Months Ended June 30,

For the Six Months Ended June 30,

For the Three Months Ended September 30,

For the Nine Months Ended September 30,

(in thousands, except per share amounts)

9 unchanged sentences

Gain on sale of properties, net

Income (loss) before taxes

Income (loss) before taxes and equity in income of non-consolidated REITs

Equity in income of non-consolidated REITs

Net Income (loss)

5 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

(in thousands)

22 unchanged sentences

Balance, June 30, 2020

Comprehensive income (loss)

Distributions $ 0.09 per

share of common stock

Balance, September 30, 2020

Balance, December 31, 2020

8 unchanged sentences

Balance, June 30, 2021

Comprehensive income (loss)

Repurchased shares

Distributions $ 0.09 per

share of common stock

Balance, September 30, 2021

The accompanying notes are an integral part of these consolidated financial statements.

1 unchanged sentence

Consolidated Statements of Cash Flows

For the Six Months Ended June 30,

For the Nine Months Ended September 30,

(in thousands)

1 unchanged sentence

Net income (loss)

Adjustments to reconcile net loss to net cash provided by operating activities:

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation and amortization expense

3 unchanged sentences

Gain on sale of properties, net

Equity in income of non-consolidated REITs

Distributions from non-consolidated REITs

Decrease in allowance for doubtful accounts

16 unchanged sentences

Distributions to stockholders

Stock repurchases

Borrowings under bank note payable

18 unchanged sentences

Collectively, the two REITs are referred to as the “Sponsored REITs”.

As of June 30, 2021, the Company owned and operated a portfolio of real estate consisting of 29 operating properties, one redevelopment property and two managed Sponsored REITs and held one promissory note secured by a mortgage on real estate owned by a Sponsored REIT.

As of September 30, 2021, the Company owned and operated a portfolio of real estate consisting of 26 operating properties, one redevelopment property and two managed Sponsored REITs and held one promissory note secured by a mortgage on real estate owned by a Sponsored REIT.

From time-to-time, the Company may acquire real estate or make additional secured loans.

1 unchanged sentence

The following table summarizes the Company’s number of operating properties and rentable square feet of real estate.

As of June 30, 2021 and June 30, 2020, the Company had one and three redevelopment properties, respectively, which are excluded from the table.

As of June 30,

As of September 30, 2021 and September 30, 2020, the Company had one and three redevelopment properties, respectively, which are excluded from the table.

As of September 30,

Operating Properties:

9 unchanged sentences

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 six months ended June 30, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021 or for any other period.

Operating results for the three and nine months ended September 30, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021 or for any other period.

Financial Instruments

4 unchanged sentences

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,

(in thousands)

5 unchanged sentences

Recent Accounting Standards

In March 2020, the FASB issued ASU No.

In March 2020, the Financial Accounting Standards Board (“FASB”) issued ASU No.

2020-04, Reference Rate Reform (Topic 848):

5 unchanged sentences

Investment in Sponsored REITs:

At each of June 30, 2021 and December 31, 2020, the Company held a non-controlling common stock interest in two Sponsored REITs in which the Company no longer shares in economic benefit or risk.

At each of September 30, 2021 and December 31, 2020, the Company held a non-controlling common stock interest in two Sponsored REITs in which the Company no longer shares in economic benefit or risk.

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.

Asset management fee income from non-consolidated entities amounted to approximately $ 34,000 and $ 45,000 for the six months ended June 30, 2021 and 2020, respectively.

Asset management fee income from non-consolidated entities amounted to approximately $ 50,000 and $ 59,000 for the nine months ended September 30, 2021 and 2020, respectively.

From time to time the Company may make secured loans (“Sponsored REIT Loans”) to Sponsored REITs in the form of mortgage loans or revolving lines of credit to fund construction costs, capital expenditures, leasing costs and for other purposes.

1 unchanged sentence

The Company regularly evaluates the extent and impact of any credit deterioration that could affect performance and the value of the secured property, as well as the financial and operating capability of the borrower.

A property’s operating results and existing cash balances are considered and used to assess whether cash flows from operations are sufficient to cover the current and future operating and debt service requirements.

A property’s fair value, operating results and existing cash balances are considered and used to assess whether cash flows from operations are sufficient to cover the current and future operating and debt service requirements.

The Company also evaluates the borrower’s competency in managing and operating the secured property and considers the overall economic environment, real estate sector and geographic sub-market in which the secured property is located.

1 unchanged sentence

None of the Sponsored REIT loans have been impaired.

The Company anticipates the Sponsored REIT Loan will be repaid at maturity or earlier from refinancing, long term financings of the underlying property, cash flows from the underlying property or some other capital event.

The Sponsored REIT Loan is secured by a mortgage on the underlying property and has a term of approximately two years .

The following is a summary of the Sponsored REIT Loan outstanding as of June 30, 2021:

The Company anticipates the sole Sponsored REIT Loan outstanding will be repaid at maturity or earlier from refinancing, long term financings of the underlying property, cash flows from the underlying property or some other capital event.

outstanding Sponsored REIT Loan is secured by a mortgage on the underlying property and has a term of approximately two years .

The following is a summary of the sole Sponsored REIT Loan outstanding as of September 30, 2021:

(dollars in thousands, except footnotes)

4 unchanged sentences

(1) The interest rate is a fixed rate and this mortgage loan includes an origination fee of $ 164,000 and an exit fee of $ 38,000 when repaid by the borrower.

The Company recognized interest income and fees from the Sponsored REIT Loans of approximately $ 793,000 and $ 763,000 for the six months ended June 30, 2021 and 2020, respectively.

The financial instrument was classified within Level 3 of the fair value hierarchy and had a fair value of approximately $ 20.4 million as of June 30, 2021.

On December 6, 2020, the Company entered into a second amendment to the Sponsored REIT Loan which qualified as a troubled debt restructuring.

The Company recognized interest income and fees from the Sponsored REIT Loan of approximately $ 1,196,000 and $ 1,149,000 for the nine months ended September 30, 2021 and 2020, respectively.

The financial instrument was classified within Level 3 of the fair value hierarchy and had a fair value of approximately $ 20.5 million as of September 30, 2021.

On December 6, 2020, the Company entered into a second amendment to the Sponsored REIT Loan with FSP Monument Circle LLC which qualified as a troubled debt restructuring.

The amendment extended the maturity date of the loan for two years and increased the interest rate from 7.19 % to 7.51 %.

There were no commitments to lend additional funds to the Sponsored REIT and the loan is fully collateralized by the mortgage held on the Sponsored REIT's property.

Repayment of the Sponsored REIT Loan outstanding with FSP Monument Circle LLC is expected to be provided substantially through the sale of the collateral.

There were no commitments in this amendment to lend additional funds to such Sponsored REIT and the loan is fully collateralized by the mortgage held on the Sponsored REIT's property.

Repayment of this Sponsored REIT Loan is expected to be provided substantially through the sale of the collateral.

Bank Note Payable, Term Loans Payable and Senior Notes

9 unchanged sentences

On September 27, 2018, the Company entered into a Second Amended and Restated Credit Agreement with the lending institutions party thereto and Bank of Montreal (“BMO”), as administrative agent (the “BMO Credit Agreement”).

The BMO Credit Agreement provides for a single, unsecured term loan borrowing in the initial amount of $ 220 million (the “BMO Term Loan”), of which $ 165 million remains fully advanced and outstanding.

The BMO Credit Agreement provides for a single, unsecured term loan borrowing in the initial amount of $ 220 million (the “BMO

Term Loan”), of which $ 165 million remains fully advanced and outstanding.

The BMO Term Loan initially consisted of a $ 55 million tranche A term loan and a $ 165 million tranche B term loan.

On June 4, 2021, the Company repaid the tranche A term loan that was scheduled to mature on November 30, 2021, and incurred a loss on extinguishment of debt of $ 0.1 million

related to unamortized deferred financing costs.

On June 4, 2021, the Company repaid the tranche A term loan that was scheduled to mature on November 30, 2021, and incurred a loss on extinguishment of debt of $ 0.1 million related to unamortized deferred financing costs.

The $ 165 million tranche B term loan matures on January 31, 2024.

1 unchanged sentence

The BMO Term Loan was previously evidenced by an Amended and Restated Credit Agreement, dated October 29, 2014, among the Company, BMO, as administrative agent and lender, and the other lending institutions party thereto, as amended by a First Amendment, dated July 21, 2016, and a Second Amendment, dated October 18, 2017.

The BMO Term Loan bears interest at either (i) a number of basis points over LIBOR depending on the Company’s credit rating ( 165 basis points over LIBOR at June 30, 2021) or (ii) a number of basis points over the base rate depending on the Company’s credit rating ( 65 basis points over the base rate at June 30, 2021).

The BMO Term Loan bears interest at either (i) a number of basis points over LIBOR depending on the Company’s credit rating ( 165 basis points over LIBOR at September 30, 2021) or (ii) a number of basis points over the base rate depending on the Company’s credit rating ( 65 basis points over the base rate at September 30, 2021).

Although the interest rate on the BMO Term Loan is variable under the BMO Credit Agreement, the Company fixed the base LIBOR interest rate by entering into interest rate swap transactions.

1 unchanged sentence

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.

Accordingly, based upon the Company’s credit rating, as of June 30, 2021, the effective interest rate on the BMO Term Loan was 4.04 % per annum.

Accordingly, based upon the Company’s credit rating, as of September 30, 2021, the effective interest rate on the BMO Term Loan was 4.04 % per annum.

On June 4, 2021, the Company paid approximately $ 0.6 million to terminate the portion of the interest rate swap on the tranche A term loan, which was scheduled to mature on November 30, 2021.

4 unchanged sentences

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.

The Company was in compliance with the BMO Term Loan financial covenants as of June 30, 2021.

The Company was in compliance with the BMO Term Loan financial covenants as of September 30, 2021.

BAML Credit Facility

4 unchanged sentences

● Borrowings made pursuant to the BAML Revolver may be borrowed, repaid and reborrowed from time to time until the initial maturity date of January 12, 2022.

The Company has the right to extend the maturity

date of the BAML Revolver by two additional six month periods, or until January 12, 2023, upon payment of a fee and satisfaction of certain customary conditions.

The Company has the right to extend the maturity date of the BAML Revolver by two additional six month periods, or until January 12, 2023, upon payment of a fee and satisfaction of certain customary conditions.

● The BAML Credit Facility includes an accordion feature that allows for an aggregate amount of up to $ 500 million of additional borrowing capacity applicable to the BAML Revolver and/or the BAML Term Loan, subject to receipt of lender commitments and satisfaction of certain customary conditions.

As of June 30, 2021, there were no borrowings outstanding under the BAML Revolver.

The BAML Revolver bears interest at either (i) a margin over LIBOR depending on the Company’s credit rating ( 1.55 % over LIBOR at June 30, 2021) or (ii) a margin over the base rate depending on the Company’s credit rating ( 0.55 % over the base rate at June 30, 2021).

As of September 30, 2021, there were no borrowings outstanding under the BAML Revolver.

The BAML Revolver bears interest at either (i) a margin over LIBOR depending on the Company’s credit rating ( 1.55 % over LIBOR at September 30, 2021) or (ii) a margin over the base rate depending on the Company’s credit rating ( 0.55 % over the base rate at September 30, 2021).

The BAML Credit Facility also obligates the Company to pay an annual facility fee in an amount that is also based on the Company’s credit rating.

The facility fee is assessed against the total amount of the BAML Revolver, or $ 600 million ( 0.30 % at June 30, 2021).

Based upon the Company’s credit rating, as of June 30, 2021, the interest rate on the BAML Revolver was 1.65 % per annum.

The weighted average interest rate on all amounts outstanding on the BAML Revolver during the six months ended June 30, 2021 was approximately 1.31 % per annum.

The facility fee is assessed against the total amount of the BAML Revolver, or $ 600 million ( 0.30 % at September 30, 2021).

Based upon the Company’s credit rating, as of September 30, 2021, the interest rate on the BAML Revolver was 1.63 % per annum.

The weighted average interest rate on all amounts outstanding on the BAML Revolver during the nine months ended September 30, 2021 was approximately 1.32 % per annum.

As of December 31, 2020, there were $ 3.5 million of borrowings outstanding under the BAML Revolver.

1 unchanged sentence

BAML Term Loan Highlights

● The BAML Term Loan is for $ 400 million.

● The original principal amount of the BAML Term Loan was $ 400 million.

On September 30, 2021, the Company repaid a $ 90 million portion of the BAML Term Loan and incurred a loss on extinguishment of debt of $ 0.2 million related to unamortized deferred financing costs.

As of September 30, 2021, $ 310 million remained outstanding under the BAML Term Loan.

● The BAML Term Loan matures on January 12, 2023.

● On September 27, 2012, the Company drew down the entire $ 400 million under the BAML Term Loan and such amount remains fully advanced and outstanding under the BAML Term Loan.

The BAML Term Loan bears interest at either (i) a margin over LIBOR depending on the Company’s credit rating ( 1.75 % over LIBOR at June 30, 2021) or (ii) a margin over the base rate depending on the Company’s credit rating ( 0.75 % over the base rate at June 30, 2021).

Although the interest rate on the BAML Credit Facility is variable, the Company fixed the base LIBOR interest rate on the BAML Term Loan by entering into interest rate swap transactions.

On July 22, 2016, the Company entered into ISDA Master Agreements with a group of banks that fixed the base LIBOR interest rate on the BAML Term Loan at 1.12 % per annum for the period beginning on September 27, 2017 and ending on September 27, 2021.

Accordingly, based upon the Company’s credit rating, as of June 30, 2021, the effective interest rate on the BAML Term Loan was 2.87 % per annum.

The BAML Term Loan bears interest at either (i) a margin over LIBOR depending on the Company’s credit rating ( 1.75 % over LIBOR at September 30, 2021) or (ii) a margin over the base rate depending on the Company’s credit rating ( 0.75 % over the base rate at September 30, 2021).

The interest rate on the BAML Credit Facility was variable at September 30, 2021.

Previously the Company had fixed the base LIBOR interest rate on the BAML Term Loan by entering into interest rate swap transactions.

Based upon the Company’s credit rating, as of September 30, 2021, the interest rate on the BAML Term Loan was 1.83 % per annum.

The weighted average variable interest rate on all amounts outstanding under the BAML Term Loan after the expiration of the interest rate swaps, from September 28 through September 30, 2021 was approximately 1.84 % per annum.

BAML Credit Facility General Information

The BAML Credit Facility 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, changes in business, certain restricted payments, the requirement to have subsidiaries provide a guaranty in the event that they incur recourse indebtedness and transactions with affiliates.

business, certain restricted payments, the requirement to have subsidiaries provide a guaranty in the event that they incur recourse indebtedness and transactions with affiliates.

The BAML Credit Facility 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 minimum fixed charge coverage ratio, a maximum unencumbered leverage ratio, and minimum unsecured interest coverage.

1 unchanged sentence

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 BAML Credit Facility immediately due and payable, terminate the lenders’ commitments to make loans under the BAML Credit Facility, and enforce any and all rights of the lenders or administrative agent under the BAML Credit Facility 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.

The Company was in compliance with the BAML Credit Facility financial covenants as of June 30, 2021.

The Company was in compliance with the BAML Credit Facility financial covenants as of September 30, 2021.

The Company may use the proceeds of the loans under the BAML Credit Facility to finance the acquisition of real properties and for other permitted investments;

4 unchanged sentences

The Senior Notes bear interest depending on the Company’s credit rating.

As of June 30, 2021, the Series A Notes bear interest at 4.49 % per annum and the Series B Notes bear interest at 4.76 % per annum.

As of September 30, 2021, the Series A Notes bear interest at 4.49 % per annum and the Series B Notes bear interest at 4.76 % per annum.

The Note Purchase Agreement contains customary financial covenants, including a maximum leverage ratio, a maximum secured leverage ratio, a minimum fixed charge coverage ratio, and a maximum unencumbered leverage ratio.

6 unchanged sentences

In the case of an event of default, the Purchasers may, among other remedies, accelerate the payment of all obligations.

The Company was in compliance with the Senior Notes financial covenants as of June 30, 2021.

The Company was in compliance with the Senior Notes financial covenants as of September 30, 2021.

Financial Instruments:

Derivatives and Hedging

On July 22, 2016, the Company fixed the interest rate for the period beginning on September 27, 2017 and ending on September 27, 2021 on the BAML Term Loan (the “2017 Interest Rate Swap”).

On March 7, 2019, the Company fixed the interest rate for the period beginning on March 29, 2019 and ending on November 30, 2021 on a $ 100 million portion of the JPM Term Loan (the “2019 JPM Interest Rate Swap”).

On February 20, 2019, the Company 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”).

On July 22, 2016, the Company entered into interest rate swap tranactions that fixed the interest rate for the period beginning on September 27, 2017 and ended on September 27, 2021 on the BAML Term Loan (the “2017 Interest Rate Swap”).

On March 7, 2019, the Company entered into interest rate swap tranactions that fixed the interest rate for the period beginning on March 29, 2019 and ending on November 30, 2021 on a $ 100 million portion of the JPM Term Loan (the “2019 JPM Interest Rate Swap”).

On February 20, 2019, the Company entered into interest rate swap tranactions 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 2017 Interest Rate Swap, the 2019 JPM Interest Rate Swap and the 2019 BMO Interest Rate Swap (collectively referred to as the “Interest Rate Swaps”) are described in Note 3.

5 unchanged sentences

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 following table summarizes the notional and fair value of the Company’s derivative financial instruments at June 30, 2021.

The following table summarizes the notional and fair value of the Company’s derivative financial instruments at September 30, 2021 and December 31, 2020.

The notional value is an indication of the extent of the Company’s involvement in these instruments at that time, but does not represent exposure to credit, interest rate or market risks.

1 unchanged sentence

(in thousands)

June 30, 2021

September 30, 2021

December 31, 2020

4 unchanged sentences

(2) Classified within Level 2 of the fair value hierarchy.

On June 30, 2021, the 2017 Interest Rate Swap and 2019 BMO Interest Rate Swap were reported as liabilities with an aggregate fair value of approximately $ 9.4 million and are included in other liabilities:

derivative liabilities in the consolidated balance sheet at June 30, 2021.

The gain/(loss) on the Company’s Interest Rate Swaps that was recorded in other comprehensive income (loss) (OCI) and the accompanying consolidated statements of operations as a component of interest expense for the six months ended June 30, 2021 and 2020, respectively, was as follows:

On September 30, 2021, the 2019 BMO Interest Rate Swap was reported as a liability with a fair value of approximately $ 7.6 million and is included in other liabilities:

derivative liabilities in the consolidated balance sheet at September 30, 2021.

The gain/(loss) on the Company’s Interest Rate Swaps that 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, 2021 and 2020, respectively, was as follows:

(in thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Interest Rate Swaps in Cash Flow Hedging Relationships:

18 unchanged sentences

Diluted net income 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 June 30, 2021 and 2020.

There were no potential dilutive shares outstanding at each of September 30, 2021 and 2020.

Stockholders’ Equity

As of June 30, 2021, the Company had 107,394,763 shares of common stock outstanding.

As of September 30, 2021, the Company had 105,632,725 shares of common stock outstanding.

The Company declared and paid dividends as follows (in thousands, except per share amounts):

2 unchanged sentences

Second quarter of 2021

Third quarter of 2021

First quarter of 2020

Second quarter of 2020

Third quarter of 2020

Equity-Based Compensation

4 unchanged sentences

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 June 4, 2020, the Company granted 58,998 shares under the Plan to non-employee directors at a compensation cost of approximately $ 337,500 and on May 20, 2021, the Company granted 66,564 shares under the Plan to non-employee directors at a compensation cost of approximately $ 337,500 , which was recognized during the six months ended June 30, 2020 and 2021, respectively, and is included in general and administrative expenses for such periods.

On June 4, 2020, the Company granted 58,998 shares under the Plan to non-employee directors at a compensation cost of approximately $ 337,500 and on May 20, 2021, the Company granted 66,564 shares under the Plan to non-employee directors at a compensation cost of approximately $ 337,500 , which was recognized during the nine months ended September 30, 2020 and 2021, respectively, and is included in general and administrative expenses for such periods.

Such shares were fully vested on the date of issuance.

1 unchanged sentence

Shares Available

(in thousands)

Balance December 31, 2019

2 unchanged sentences

Shares granted 2021

Balance June 30, 2021

Balance September 30, 2021

Repurchase of Common Stock

On June 23, 2021, the Board of Directors of the Company authorized the repurchase of up to $ 50 million of the Company’s common stock from time to time in the open market, privately negotiated transactions or other manners as permitted by federal securities laws.

The repurchase authorization may be suspended or discontinued at any time.

The Company subsequently repurchased 1,762,038 shares of common stock during the third quarter of 2021 at an aggregate cost of approximately $ 8.2 million at an average cost of approximately $ 4.68 per share, inclusive of brokerage commissions.

The excess of the purchase price over the par value of the shares repurchased is applied to reduce additional paid-in capital.

The Company did not effect any repurchases during 2020.

A summary of the repurchase of common stock by the Company is shown in the following table:

(Cost in thousands)

Shares Repurchased

Balance December 31, 2020

Repurchase of shares

Balance, September 30, 2021

The Company has elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended (the “Code”).

6 unchanged sentences

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 $ 4.6 million and $ 4.4 million as of each of December 31, 2020, and 2019 respectively.

The TRSs have gross amounts of net operating losses (“NOLs”) available to those taxable corporations of $ 4.6 million and $ 4.4 million as of each of December 31, 2020, and 2019 respectively.

The NOLs created prior to 2018 will expire between 2030 and 2047 and the NOLs generated after 2017 will not expire.

13 unchanged sentences

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.

The gross amount of NOLs available to the Company was $ 13.0 million as of each of June 30, 2021 and December 31, 2020.

The gross amount of NOLs available to the Company was $ 13.0 million as of each of September 30, 2021 and December 31, 2020.

Income Tax Expense

2 unchanged sentences

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 $ 123,000 and $ 132,000 for the six months ended June 30, 2021 and 2020, respectively.

The Company recorded a provision for the Revised Texas Franchise Tax of $ 174,000 and $ 203,000 for the nine months ended September 30, 2021 and 2020, 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 Six Months Ended June 30,

For the Nine Months Ended September 30,

(Dollars in thousands)

4 unchanged sentences

The Company is a lessor of commercial real estate with operations that include the leasing of office and industrial 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.

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.

5 unchanged sentences

Although increases in the CPI are not estimated as part of the Company’s measurement of straight-line rent revenue, to the extent that the actual CPI is greater or less than the CPI at lease commencement, there could be changes to realized income or loss.

For the six months ended June 30, 2021 and 2020, the Company recognized the following amounts of income relating to lease payments:

For the nine months ended September 30, 2021 and 2020, the Company recognized the following amounts of income relating to lease payments:

Income relating to lease payments:

Six Months Ended

Nine Months Ended

(in thousands)

June 30, 2021

June 30, 2020

September 30, 2021

September 30, 2020

Income from leases (1)

(1) Amounts recognized from variable lease payments were $ 28,974 and $ 29,945 for the six months ended June 30, 2021 and 2020, respectively.

(1) Amounts recognized from variable lease payments were $ 42,298 and $ 45,281 for the nine months ended September 30, 2021 and 2020, respectively.

Dispositions of properties

2 unchanged sentences

The Company sold three office properties located in Atlanta, Georgia on May 27, 2021 with an aggregate sales price of approximately $ 219.5 million, at a net gain of approximately $ 22.8 million.

The Company sold an office property in Dulles, Virginia on June 29, 2021 at a loss of $ 2.1 million.

The Company sold an office property in Dulles, Virginia on June 29, 2021 with a sales price of approximately $ 17.3 million, at a loss of $ 2.1 million.

The Company sold an office property located in Indianapolis, Indiana on August 31, 2021 with a sales price of approximately $ 35 million, at a loss of approximately $ 1.7 million.

The Company sold two office properties located in Chesterfield, Missouri on September 23, 2021 with an aggregate sales price of approximately $ 67 million, at a gain of approximately $ 10.3 million.

The Company used the proceeds of the dispositions principally to repay outstanding indebtedness.

2 unchanged sentences

For the Three Months Ended

For the Six Months Ended

For the Nine Months Ended

September 30,

(in thousands)

5 unchanged sentences

Subsequent Events

On July 6, 2021, the Board of Directors of the Company declared a cash distribution of $ 0.09 per share of common stock payable on August 5, 2021 to stockholders of record on July 16, 2021.

On July 9, 2021, the Company entered into a Purchase and Sale Agreement with a third-party buyer for the disposition of two office properties located in Chantilly, Virginia for a purchase price of approximately $ 40 million.

Assuming satisfaction of certain customary conditions to close, including successful completion by the buyer of a due diligence inspection period, the closing of the sale of the properties is expected to take place on or about September 9, 2021.

On July 13, 2021, the Company entered into a Purchase and Sale Agreement with a third-party buyer for the disposition of two properties located in Chesterfield, Missouri for a purchase price of approximately $ 67 million.

On October 5, 2021, the Company entered into a Purchase and Sale Agreement with a third-party buyer for the disposition of two properties located in Chantilly, Virginia for a purchase price of approximately $ 40 million.

On October 8, 2021, the Board of Directors of the Company declared a cash distribution of $ 0.09 per share of common stock payable on November 11, 2021 to stockholders of record on October 22, 2021.

On October 22, 2021, the Company sold the 999 Peachtreee property located in Atlanta Georgia for a sales price of approximately $ 223.9 million, at a gain of approximately $ 86.8 million.

On October 25, 2021, the Company repaid $ 15.0 million of the BAML Revolver and $ 200.0 million of the BAML Term Loan using proceeds from the sale of the property.

On October 29, 2021, the Company agreed to amend and restate its existing Sponsored REIT Loan to FSP Monument Circle LLC 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 FSP Monument Circle LLC 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 on June 30, 2023.

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 FSP Monument Circle LLC the right to cause the sale of the property owned by FSP Monument Circle LLC any time on or after January 1, 2023.

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-Q

Item 1. Financial Statements