What changed in this filing

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Item 1. Business

2025-02-11 compared with 2024-02-26 · 49 added, 48 removed, 252 unchanged (28% of the section changed)

10 unchanged sentences

real estate operations.

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.

The principal revenue sources for our real estate operations include rental income from real estate leasing, property dispositions and fee income from asset/property management and development.

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.

10 unchanged sentences

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

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

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

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.

6 unchanged sentences

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.

The 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, such as 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.

We are unable to estimate the full extent of the long-term impact that the COVID-19 pandemic will have on our future financial results at this time.

See “Item 1A.

2 unchanged sentences

Investment Objectives

Our investment objectives are to create shareholder value by increasing revenue from rental, dividend, interest and fee income and net gains from sales of properties and increase the cash available for distribution in the form of dividends to our stockholders.

We expect that we will continue to derive real estate revenue from owned properties and the Sponsored REIT Loan and fees from asset management, property management and investor services.

We may also acquire additional real properties.

Our investment objectives are to increase shareholder value by increasing revenue from rental, interest and fee income and net gains from sales of properties and increase the cash available for distribution in the form of dividends to our stockholders.

We expect that we will continue to derive real estate revenue from owned properties.

We continue to believe that the current price of our common stock does not accurately reflect the intrinsic 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 we continue to execute 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.

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.

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

Our 15 owned and consolidated office properties are located in four different states as of December 31, 2024.

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.

We expect that we will continue to derive real estate revenue from owned properties and the Sponsored REIT fees from asset management, property management and investor services.

We may also acquire additional real properties.

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

On January 26, 2024, we sold an office property located in Richardson, Texas for a gross sales price of $35.0 million, at a loss of approximately $2.1 million.

On July 8, 2024, we sold a property in Glen Allen, Virginia for a gross sales price of $31.0 million at a loss of $13.2 million.

On October 23, 2024, we sold an office property located in Atlanta, Georgia for a gross sales price of $34.0 million at a loss of $27.2 million.

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.

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 $3.4 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.

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.

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

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

● we seek to buy or develop investment properties at a price which produces value for investors and avoid overpaying for real estate merely to outbid competitors;

● we seek to buy or develop properties in excellent locations with substantial infrastructure in place around them and avoid investing in locations where the future construction of such infrastructure is speculative;

● we seek to buy or develop properties that are well-constructed and designed to appeal to a broad base of users and avoid properties where quality has been sacrificed for cost savings in construction or which appeal only to a narrow group of users;

Historically, we relied on the following general principles in selecting real properties for acquisition:

● we sought to buy or develop investment properties at a price which produces value for investors and avoid overpaying for real estate merely to outbid competitors;

● we sought to buy or develop properties in excellent locations with substantial infrastructure in place around them and avoid investing in locations where the future construction of such infrastructure is speculative;

● we sought to buy or develop properties that are well-constructed and designed to appeal to a broad base of users and avoid properties where quality has been sacrificed for cost savings in construction or which appeal only to a narrow group of users.

Generally, in managing real properties after acquisition, we rely on the following principles:

● we aggressively manage, maintain and upgrade our properties and refuse to neglect or undercapitalize management, maintenance and capital improvement programs;

22 unchanged sentences

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.

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.

17 unchanged sentences

Burke (1) (2) (3) (4)

Hansen (2) (3) (5)

Kenneth Hoxsie (1) (3) (6)

1 unchanged sentence

Georgia Murray (1) (2) (7)

O'Neil (1) (2) (3)

Bruce Schanzer (1)

(1) Member of the Audit Committee

9 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 53, has been a Director of FSP Corp.

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

Since 2007, Mr.

9 unchanged sentences

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.

Louis County Retirement Board.

Hansen earned his M.B.A.

from the Kellogg School of Management at Northwestern University and his Bachelor of Science in Commerce from DePaul University.

from the Kellogg School

of Management at Northwestern University and his Bachelor of Science in Commerce from DePaul University.

Hansen is a Certified Public Accountant.

20 unchanged sentences

From 1973 through October 1999, Ms.

Murray worked at The Boston

Financial Group, Inc., serving as Senior Vice President and a Director at times during her tenure.

Murray worked at The Boston Financial Group, Inc., serving as Senior Vice President and a Director at times during her tenure.

Boston Financial was an affiliate of the Boston Financial Group, Inc.

3 unchanged sentences

Murray is a graduate of Newton College.

O’Neil, age 60, has been a Director of FSP Corp.

since January 2016.

O’Neil was a Director at Bain Capital in the Investor Relations area where she focused on Private Equity and had oversight of the Investment Advisory sector from 2011 until her retirement in 2014.

From 1999 to 2007, Ms.

O’Neil was a Partner at FLAG Capital Management LLC, a manager of fund-of-funds investment vehicles in private equity, venture capital, real estate and natural resources.

Previously, Ms.

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, 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.

O’Neil holds a B.A.

(Summa Cum Laude) and M.A.

(Honorary) from Colby College where she was elected to Phi Beta Kappa.

O’Neil received her M.B.A.

from The Harvard Graduate School of Business Administration.

Schanzer, age 56, has been a Director of FSP Corp.

since November 2024.

Schanzer is Chairman and Chief Investment Officer of Erez Asset Management, a fund manager focused on investment opportunities in small market cap REITs.

Prior to forming Erez Asset Management in August 2022, Mr.

Schanzer was President, Chief Executive Officer and a director of Cedar Realty Trust (NYSE:

CDR), a real estate investment trust focused on the ownership, operation and redevelopment of shopping centers in the Washington, D.C.

to Boston corridor, from June 2011 to August 2022.

Before joining Cedar in 2011, he was a managing director in the real estate investment banking group at Goldman Sachs & Co and prior thereto a vice president at Merrill Lynch.

Before working on Wall Street, Bruce worked as a real estate attorney in New York.

He received an M.B.A.

in finance and accounting from the University of Chicago (now known as the Booth School of Business);

from Benjamin N.

Cardozo School of Law, where he served as a member of the Law Review;

from Yeshiva College, where he is currently a member of the board of trustees of Sym Schools of Business.

He is also presently a member of the board of trustees of SAR Academy in Riverdale, NY and the board of advisors of New York Medical College.

Schanzer previously served as a member of the board of governors of the National Association of Real Estate Investment Trusts.

Wilkins, Jr., age 77, has been a Director of FSP Corp.

since February 2022.

Wilkins has served as an investment advisor with RBF Wealth Advisors in St.

Louis, Missouri, since 1997.

since February 2022 and Chair of the Compensation Committee since January 2025.

Wilkins served as an investment advisor with RBF Wealth Advisors in St.

Louis, Missouri, from 1997 to 2024.

Concurrently, from 2003 to 2015, Mr.

Wilkins served with Hammond Associates/Mercer Investment Consulting as an institutional investment consultant.

Wilkins served with Hammond Associates/Mercer Investment Consulting as a senior investment consultant to institutional clients.

From 1976 to 1986 and from 1989 to 1997, Mr.

Wilkins served in various positions at Monsanto Corporation, including as Vice President of Corporate Development in the corporate mergers and acquisition group.

Wilkins served in various positions at Monsanto Corporation, including as Vice President of Corporate Development in the corporate mergers and acquisition group, as Vice President of the Plant Sciences Division and as Regional Director of Latin America.

Wilkins currently serves as Chairman of the St.

88 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