What changed in this filing

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Item 1. Business

2024-02-26 compared with 2023-02-14 · 22 added, 22 removed, 278 unchanged (14% of the section changed)

15 unchanged sentences

Previously we also operated in an investment banking segment, which was discontinued in December 2011.

Our investment banking segment generated brokerage commissions, loan origination fees, development services and other fees related to the organization of single-purpose entities that own real estate and the private placement of equity in those entities.

We refer to these entities, which are organized as corporations and operated in a manner intended to qualify as REITs, as Sponsored REITs.

Our investment banking segment generated brokerage commissions, loan origination fees, development services and other fees related to the organization of single-purpose REITs that own real estate and the private placement of equity in those entities.

From time-to-time we may acquire real estate or invest in real estate by making secured loans on real estate.

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.

As of December 31, 2022, we owned and operated a portfolio of real estate consisting of 21 office properties and managed one Sponsored REIT.

As of December 31, 2023, we owned and operated a portfolio of real estate consisting of 17 properties, which we refer to as our owned properties, and a non-controlling common stock interest in the corporation that is the sole member of FSP Monument Circle LLC, which was organized to operate as a real estate investment trust and which we refer to as the Sponsored REIT or Monument Circle.

The Sponsored REIT was consolidated in our financial statements effective January 1, 2023.

We refer to these 18 properties as our owned and consolidated properties.

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

1 unchanged sentence

From time-to-time we dispose of properties generating gains or losses in an ongoing effort to improve and upgrade our portfolio.

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.

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

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

As of December 31, 2022, we had one remaining secured loan to a Sponsored REIT in the form of a mortgage loan, which we refer to as the Sponsored REIT Loan.

The Sponsored REIT Loan is secured by a mortgage on the underlying property and has a current term of less than one year.

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.

Sustainability

1 unchanged sentence

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

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.

Long-Term Impact of COVID-19 Pandemic

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.

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

The long-term impact of the COVID-19 pandemic continues to present material uncertainty and risk with respect to the performance of our properties and our financial results and we are unable to estimate the full extent of this impact on our future financial results at this time.

See “Item 1A.

6 unchanged sentences

Although our property portfolio is focused on properties in the central business districts of 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 21 office properties that are located in eight different states as of December 31, 2022.

Our 18 owned and consolidated office properties are located in six different states as of December 31, 2023.

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

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 we will seek to increase shareholder value by (1) pursuing the sale of select properties where we believe that short to intermediate term valuation potential has been reached and (2) striving to lease vacant space.

As a result, from time to time, as market conditions warrant, we expect to sell properties owned by us in 2023.

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

On March 10, 2023, we sold an office property located in Elk Grove, Illinois for a gross sales price of $29.1 million, at a gain of approximately $8.4 million.

On August 9, 2023, we sold a property in Charlotte, North Carolina for a gross sales price of $9.2 million at a loss of $0.8 million.

On October 26, 2023, we sold an office property located in Plano, Texas for a gross sales price of $48 million at a gain of $10.6 million.

On December 6, 2023, we sold an office property located in Miami, Florida for a gross sales price of $68.0 million at a loss of approximately $18.9 million.

In 2022, we sold two office properties located in Broomfield, Colorado for aggregate gross sales proceeds of $102.5 million at a gain of $24.1 million and one office property located in Evanston, Illinois for gross sale proceeds of $27.8 million at a gain of $3.9 million.

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.

As we continue to execute on our strategy of select property dispositions and striving to lease vacant space, our revenue, Funds From Operations, and capital expenditures may decrease in the short term.

As we continue to execute on our strategy of select property dispositions and striving to lease vacant space, our revenue, Funds From Operations, and capital expenditures may decrease.

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

In selecting real properties for acquisition by FSP Corp.

Generally, in selecting real properties for acquisition by FSP Corp.

and managing them after acquisition, we rely on the following principles:

63 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 52, has been a Director of FSP Corp.

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

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

Since 2007, Mr.

15 unchanged sentences

Hoxsie, age 73, has been a Director of FSP Corp.

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

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

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

31 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 Trustee 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 currently serves on a variety of non-profit boards, including the Peabody Essex Museum where she is a Trustee 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, McLean Hospital where she is a member of the Board of Trustees, 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.

102 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