What changed in this filing

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Item 1. Business

2022-02-15 compared with 2021-02-16 · 24 added, 27 removed, 268 unchanged (16% of the section changed)

11 unchanged sentences

The principal revenue sources for our real estate operations include rental income from real estate leasing, interest income from secured loans made on office properties, property dispositions and fee income from asset/property management and development.

Our current strategy is to invest in infill and central business district office properties in the United States sunbelt and mountain west regions as well as select opportunistic markets.

We invest in infill and central business district office properties in the United States sunbelt and mountain west regions as well as select opportunistic markets.

We believe that the United States sunbelt and mountain west regions have macro-economic drivers that have the potential to increase occupancies and rents.

7 unchanged sentences

We may also pursue on a selective basis the sale of our properties to take advantage of the value creation and demand for our properties, or for geographic or property specific reasons.

We own and operate a portfolio of real estate consisting of 34 office properties as of December 31, 2020, consisting of 32 operating properties and 2 redevelopment properties.

We own and operate a portfolio of real estate consisting of 24 office properties as of December 31, 2021.

We derive rental revenue from income paid to us by tenants of these properties.

2 unchanged sentences

We provide asset management, property management, property accounting, investor and/or development services to our portfolio and certain of our Sponsored REITs through our subsidiaries FSP Investments LLC and FSP Property Management LLC.

recognizes revenue from its receipt of fee income from Sponsored REITs that

have not been consolidated or acquired by us.

recognizes revenue from its receipt of fee income from Sponsored REITs that have not been consolidated or acquired by us.

Neither FSP Investments LLC nor FSP Property Management LLC receives any rental income.

4 unchanged sentences

Sustainability

As an owner of commercial real estate, a sector with significant environmental, social and governance “ESG” impact, we strive to maximize shareholder value through the prudent application of sound ESG strategies.

As an owner of commercial real estate, a sector with significant environmental, social and governance, or ESG, impact, we strive to maximize shareholder value through the prudent application of sound ESG strategies.

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

10 unchanged sentences

We may also acquire additional real properties.

We may acquire, and have acquired, real properties in any geographic area of the United States and of any property type.

We own 34 office properties that are located in 10 different states as of December 31, 2020, which consist of 32 operating properties and 2 redevelopment properties.

Although our property portfolio is focused on properties in the central business districts of Atlanta, Dallas, Denver, Houston and Minneapolis, we may acquire, and have acquired, real properties in any geographic area of the United States and of any property type.

We own 24 office properties that are located in eight different states as of December 31, 2021.

See Item 2 of this Annual Report on Form 10-K for more information about our properties.

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.

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 continue to believe that the current price of our common stock does not accurately reflect the value of our underlying real estate assets and intend to continue the strategy we initially adopted in 2021 of seeking to increase shareholder value through the sale of select properties where we believe that short to intermediate term valuation potential has been reached.

Pursuant to this strategy, we anticipate that dispositions in 2022 will result in estimated aggregate gross proceeds in the range of approximately $250 million to $350 million.

As a result, from time to time, as market conditions warrant, we expect to sell properties owned by us in 2022.

In 2021, we sold 10 office properties located in four different states for aggregate gross sale proceeds of $602.7 million, at a net gain of $113.1 million.

In 2020, we sold an office property located in Durham, North Carolina for gross proceeds of approximately $89.7 million, at a net gain of approximately $41.9 million.

We did not sell any properties during 2019.

As we continue to execute on our property disposition strategy, our revenue, Funds From Operations, and capital expenditures are likely to decrease in the short term.

Proceeds from dispositions are intended to be used for the repayment of debt, repurchases of our common stock, any special dividends required to meet REIT requirements, and other general corporate purposes.

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

28 unchanged sentences

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.

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.

2 unchanged sentences

Human Capital

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

We had 32 and 34 employees as February 4, 2022 and December 31, 2021, respectively.

Women represent 46.9% of our employees, of which 40.0% hold management level/leadership roles.

20 unchanged sentences

(3) Member of the Nominating and Corporate Governance Committee

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

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

(4) 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.

39 unchanged sentences

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.

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

He joined Hale and Dorr (the predecessor of WilmerHale) in 1981, subsequently worked at Copley Real Estate Advisors, an institutional real estate investment advisory firm, and rejoined Hale and Dorr in 1994.

11 unchanged sentences

McGillicuddy has served on the boards of various charitable organizations.

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

He is currently President of the Board of Trustees of Florida Studio Theater, a professional non-

profit theater organization, and is President, Vice-Chairman and Director of All-Star Children’s Foundation, an organization engaged in creating a new paradigm for foster care.

Georgia Murray, age 71, has been a Director of FSP Corp.

15 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 was a member of the Investment Committee from 2006 to 2020.

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 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 was a member of the Investment Committee from 2006 to 2020.

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

39 unchanged sentences

in October 2005, Mr.

Carter was associated with the law firm of Nixon Peabody LLP, which he originally joined in 1999.

Carter was associated with the law firm of

Nixon Peabody LLP, which he originally joined in 1999.

At Nixon Peabody LLP, Mr.

Carter concentrated his practice on the areas of real estate syndication, acquisitions and finance.

Carter received a Bachelor of Business

Administration (B.B.A.) degree in Finance and Marketing and a Juris Doctor (J.D.) degree from the University of Miami.

Carter received a Bachelor of Business Administration (B.B.A.) degree in Finance and Marketing and a Juris Doctor (J.D.) degree from the University of Miami.

Carter is admitted to practice law in the Commonwealth of Massachusetts.

44 unchanged sentences

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