FRANKLIN STREET PROPERTIES CORP /MA/ 10-K

Item 9A. Controls and Procedures ​ Disclosure Controls and Procedures ​ Our management, with the participation of our chief executive officer and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2024. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of December 31, 2024, our chief executive officer and chief financial officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level. ​ Management’s Annual Report on Internal Control Over Financial Reporting ​ The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rules 13a-15(f) or 15d-15(f) promulgated under the Exchange Act as a process designed by, or under the supervision of, the Company’s principal executive and principal financial officer and effected by the Company’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that: ​ ● Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company; ​ ● Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and ​ ● Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements. ​ Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. ​ The Company’s management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2024. In making this assessment, the Company’s management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework, 2013 framework. ​ Based on our assessment, management concluded that, as of December 31, 2024, the Company’s internal control over financial reporting is effective based on those criteria. ​ 45 Table of Contents Ernst & Young LLP, the independent registered public accounting firm that audited our financial statements included elsewhere in this annual report on Form 10-K, has issued an attestation report on our internal control over financial reporting as of December 31, 2024. Please see page F-3. ​ Changes in Internal Control Over Financial Reporting ​ No change in our internal control over financial reporting occurred during the quarter ended December 31, 2024 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. ​ Item 9B. Other Information ​ Director and Officer Trading Arrangements ​ None of our directors or officers adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement (as defined in Item 408(c) of Regulation S-K) during the fourth quarter of 2024. ​ Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections ​ None. ​ ​ 46 Table of Contents PART III ​ Certain information required by Part III of this Form 10-K will be contained in our definitive proxy statement pursuant to Regulation 14A (the “Proxy Statement”) which we plan to file not later than 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K, and is incorporated herein by reference. ​ Item 10. Directors, Executive Officers and Corporate Governance ​ The response to this item is contained under the caption “Information about our Executive Officers” in Part I hereof and in the Proxy Statement under the captions “CORPORATE GOVERNANCE”, “PROPOSAL 1 - ELECTION OF DIRECTORS” and, if applicable, “DELINQUENT SECTION 16(a) REPORTS” and is incorporated herein by reference. ​ Our board of directors has adopted a code of business conduct and ethics that applies to all of our executive officers, directors and employees. The code was approved by the nominating and corporate governance committee of our board of directors and by the full board of directors. We have posted a current copy of our code under “Corporate Governance” in the “Investor Relations” section of our website at http://www.fspreit.com. To the extent permitted by applicable rules of the NYSE American, we intend to satisfy the disclosure requirements under Item 5.05 of Form 8-K regarding an amendment to, or waiver from, a provision of the code of business conduct and ethics with respect to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, by posting such information on our website. ​ Item 11. Executive Compensation ​ The response to this item is contained in the Proxy Statement under the captions “COMPENSATION DISCUSSION AND ANALYSIS” and “DIRECTOR COMPENSATION AND STOCK OWNERSHIP GUIDELINES” and, other than the information required by Item 402(v) of Regulation S-K, is incorporated herein by reference. ​ The “Compensation Committee Report” contained in the Proxy Statement shall not be deemed “soliciting material” or “filed” with the SEC or otherwise subject to the liabilities of Section 18 of the Exchange Act, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended (the “Securities Act”) or the Exchange Act, except to the extent we specifically request that such information be treated as soliciting material or specifically incorporate such information by reference into a document filed under the Securities Act or the Exchange Act. ​ Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters ​ The response to this item is contained in the Proxy Statement under the captions “SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT” and “SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS” and is incorporated herein by reference. ​ Item 13. Certain Relationships and Related Transactions, and Director Independence ​ The response to this item is contained in the Proxy Statement under the captions “PROPOSAL 1 - ELECTION OF DIRECTORS”, “CORPORATE GOVERNANCE” and “TRANSACTIONS WITH RELATED PERSONS” and is incorporated herein by reference. ​ Item 14. Principal Accounting Fees and Services ​ The response to this item is contained in the Proxy Statement under the caption “INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS FEES AND SERVICES” and is incorporated herein by reference. ​ 47 Table of Contents PART IV ​ Item 15. Exhibits and Financial Statement Schedules. ​ (a) The following documents are filed as part of this report: ​ 1. Financial Statements: ​ The Financial Statements listed in the accompanying Index to Consolidated Financial Statements are filed as part of this Annual Report on Form 10-K. ​ 2. Financial Statement Schedules: ​ The Financial Statement Schedules listed on the accompanying Index to Consolidated Financial Statements are filed as part of this Annual Report on Form 10-K. ​ Schedules other than those listed are omitted as they are not applicable or the required or equivalent information has been included in the financial statements or notes thereto. ​ 3. Exhibits: ​ ​ 48 Table of Contents EXHIBIT INDEX Exhibit No. Description 3.1 (1) ​ Articles of Incorporation, as amended. ​ ​ ​ 3.2 (2) ​ Amended and Restated By-laws. ​ ​ ​ 4.1 (3) ​ Description of Securities Registered Under Section 12 of the Exchange Act. ​ ​ ​ 10.1+ (4) ​ 2002 Stock Incentive Plan of FSP Corp . ​ ​ ​ 10.2 (5) ​ Second Amendment to Credit Agreement, dated February 21, 2024, among FSP Corp., Bank of America, N.A. and the other parties thereto ​ ​ ​ 10.3 (6) ​ Second Amendment to Second Amended and Restated Credit Agreement, dated February 21, 2024, among FSP Corp., Bank of Montreal and the other parties thereto. ​ ​ ​ 10.4 (7) ​ First Amendment to Note Purchase Agreement, dated February 21, 2024, among FSP Corp. and the other parties named therein as purchasers. ​ ​ ​ 10.5 (8) ​ First Amendment to Credit Agreement, dated February 10, 2023, among FSP Corp., Bank of America, N.A. and the other parties thereto. ​ ​ ​ 10.6 (9) ​ First Amendment to Second Amended and Restated Credit Agreement, dated February 10, 2023, among FSP Corp., Bank of Montreal and the other parties thereto. ​ ​ ​ 10.7 (10) ​ Credit Agreement, dated January 10, 2022, among FSP Corp., Bank of America, N.A. and the other parties thereto. ​ ​ ​ 10.8 (11) ​ Joinder and Increase Agreement, dated February 10, 2022, among FSP Corp., BankUnited N.A. and Bank of America, N.A., as administrative agent. ​ ​ ​ 10.9 (12) ​ Second Amended and Restated Credit Agreement, dated September 27, 2018, among FSP Corp., Bank of Montreal and the other parties thereto. ​ ​ ​ 10.10 (13) ​ Note Purchase Agreement, dated October 24, 2017, among FSP Corp. and the other parties named therein as purchasers. ​ ​ ​ 10.11 +(14) ​ Form of Retention Agreement. ​ ​ ​ 10.12 +(15) ​ Change in Control Discretionary Plan. ​ ​ ​ 10.13 (16) ​ Cooperation Agreement, dated as of November 27, 2024, by and among FSP Corp., Converium Capital Inc., Converium Capital Master Fund LP, Converium PGEQ Multi-Strategy Fund L.P., Erez REIT Opportunities LP and Erez Asset Management LLC. ​ ​ ​ 19.1* ​ Insider Trading Policy . ​ ​ ​ 21.1* ​ Subsidiaries of the Registrant. ​ ​ ​ 23.1* ​ Consent of Ernst & Young LLP. ​ ​ ​ 31.1* ​ Certification of FSP Corp.’s Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. ​ ​ ​ 31.2* ​ Certification of FSP Corp.’s Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. ​ ​ ​ 32.1* ​ Certification of FSP Corp.’s Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. ​ ​ ​ 32.2* ​ Certification of FSP Corp.’s Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. ​ ​ ​ 97+(17) ​ Compensation Recovery Policy. ​ ​ ​ 49 Table of Contents 101* ​ The following materials from FSP Corp.’s Annual Report on Form 10-K for the year ended December 31, 2024, formatted in iXBRL (inline eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets; (ii) the Consolidated Statements of Income; (iii) the Consolidated Statements of Cash Flows; (iv) the Consolidated Statements of Other Comprehensive Income; and (v) the Notes to Consolidated Financial Statements. ​ ​ ​ 104 ​ Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). ​ (1) ​ Incorporated by reference to Exhibit 3.1 to FSP Corp.’s Quarterly Report on Form 10-Q filed on July 30, 2019 (File No. 001-32470). ​ ​ ​ (2) ​ Incorporated by reference to Exhibit 3.1 to FSP Corp.’s Current Report on Form 8-K, filed on February 3, 2023 (File No. 001-32470). ​ ​ ​ (3) ​ Incorporated by reference to Exhibit 10.1 to FSP Corp.’s Annual Report on Form 10-K, filed on February 15, 2022 (File No. 001-32470). ​ ​ ​ (4) ​ Incorporated by reference to Exhibit 10.1 to FSP Corp.’s Annual Report on Form 10-K, filed on March 29, 2002 (File No. 001-32470). ​ ​ ​ (5) ​ Incorporated by reference to Exhibit 10.2 to FSP Corp.’s Annual Report on Form 10-K, filed on February 26, 2024 (File No. 001-32470). ​ ​ ​ (6) ​ Incorporated by reference to Exhibit 10.3 to FSP Corp.’s Annual Report on Form 10-K, filed on February 26, 2024 (File No. 001-32470). ​ ​ ​ (7) ​ Incorporated by reference to Exhibit 10.4 to FSP Corp.’s Annual Report on Form 10-K, filed on February 26, 2024 (File No. 001-32470). ​ ​ ​ (8) ​ Incorporated by reference to Exhibit 10.1 to FSP Corp.’s Current Report on Form 8-K, filed on February 10, 2023 (File No. 001-32470). ​ ​ ​ (9) ​ Incorporated by reference to Exhibit 10.2 to FSP Corp.’s Current Report on Form 8-K, filed on February 10, 2023 (File No. 001-32470). ​ ​ ​ (10) ​ Incorporated by reference to Exhibit 10.1 to FSP Corp.’s Current Report on Form 8-K, filed on January 12, 2022 (File No. 001-32470). ​ ​ ​ (11) ​ Incorporated by reference to Exhibit 10.3 to FSP Corp.’s Annual Report on Form 10-K, filed on February 15, 2022 (File No. 001-32470). ​ ​ ​ (12) ​ Incorporated by reference to Exhibit 10.1 to FSP Corp.’s Current Report on Form 8-K, filed on September 27, 2018 (File No. 001-32470). ​ ​ ​ (13) ​ Incorporated by reference to Exhibit 10.4 to FSP Corp.’s Current Report on Form 8-K, filed on October 24, 2017 (File No. 001-32470) ​ ​ ​ (14) ​ Incorporated by reference to Exhibit 10.5 to FSP Corp.’s Annual Report on Form 10-K, filed on February 24, 2006 (File No. 001-32470). ​ ​ ​ (15) ​ Incorporated by reference to Exhibit 99.2 to FSP Corp.’s Current Report on Form 8-K, filed on February 8, 2006 (File No. 001-32470). ​ ​ ​ (16) ​ Incorporated by reference to Exhibit 10.1 to FSP Corp.’s Current Report on Form 8-K, filed on November 27, 2024 (File No. 001-32470) ​ ​ ​ (17) ​ Incorporated by reference to Exhibit 97 to FSP Corp.’s Annual Report on Form 10-K, filed on February 26, 2024 (File No. 001-32470). + ​ Management contract or compensatory plan or arrangement filed as an Exhibit to this Form 10-K pursuant to Item 15(b) of Form 10-K. ​ ​ ​ * ​ Filed herewith. ​ 50 Table of Contents Item 16. Form 10-K Summary ​ Not applicable. ​ SIGNATURES ​ Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf as of February 11, 2025 by the undersigned, thereunto duly authorized. ​ ​ FRANKLIN STREET PROPERTIES CORP. ​ ​ ​ By: /s/ George J. Carter ​ ​ George J. Carter ​ ​ Chief Executive Officer ​ Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated. ​ ​ ​ Signature Title Date ​ ​ ​ ​ ​ /s/ George J. Carter ​ Chief Executive Officer and Director (Principal Executive Officer) ​ February 11, 2025 George J. Carter ​ ​ ​ ​ ​ ​ ​ ​ ​ /s/ John G. Demeritt ​ Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer and Principal Accounting Officer) ​ February 11, 2025 John G. Demeritt ​ ​ ​ ​ ​ ​ ​ ​ ​ /s/ John N. Burke ​ Director ​ February 11, 2025 John N. Burke ​ ​ ​ ​ ​ ​ ​ ​ ​ /s/ Brian N. Hansen ​ Director ​ February 11, 2025 Brian N. Hansen ​ ​ ​ ​ ​ ​ ​ ​ ​ /s/ Kenneth A. Hoxsie ​ Director ​ February 11, 2025 Kenneth A. Hoxsie ​ ​ ​ ​ ​ ​ ​ ​ ​ /s/ Dennis J. McGillicuddy ​ Director ​ February 11, 2025 Dennis J. McGillicuddy ​ ​ ​ ​ ​ ​ ​ ​ ​ /s/ Georgia Murray ​ Director ​ February 11, 2025 Georgia Murray ​ ​ ​ ​ ​ ​ ​ ​ ​ /s/ Bruce Schanzer ​ Director ​ February 11, 2025 Bruce Schanzer ​ ​ ​ ​ ​ ​ ​ ​ ​ /s/ Milton P. Wilkins Jr. ​ Director ​ February 11, 2025 Milton P. Wilkins Jr. ​ ​ ​ ​ ​ ​ ​ 51 Table of Contents Franklin Street Properties Corp. Index to Consolidated Financial Statements ​ Reports of Independent Registered Public Accounting Firm (PCAOB ID 42 ) F-2 ​ ​ Consolidated Financial Statements: ​ ​ ​ Consolidated Balance Sheets as of December 31, 2024 and 2023 F-5 ​ ​ Consolidated Statements of Operations for each of the three years in the period ended December 31, 2024 F-7 ​ ​ Consolidated Statements of Comprehensive Income (Loss) for each of the three years in the period ended December 31, 2024 F-8 ​ ​ Consolidated Statements of Stockholders’ Equity for each of the three years in the period ended December 31, 2024 F-9 ​ ​ Consolidated Statements of Cash Flows for each of the three years in the period ended December 31, 2024 F-10 ​ ​ Notes to the Consolidated Financial Statements F-12 ​ ​ Financial Statement Schedules — Schedule II and III F-33 ​ All other schedules for which a provision is made in the applicable accounting resolutions of the Securities and Exchange Commission are not required under the related instructions or are inapplicable, and therefore have been omitted. ​ F-1 Table of Contents Report of Independent Registered Public Accounting Firm ​ To the Stockholders and the Board of Directors of Franklin Street Properties Corp. ​ Opinion on Internal Control Over Financial Reporting ​ We have audited Franklin Street Properties Corp.’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Franklin Street Properties Corp. (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on the COSO criteria. ​ We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2024 and the related notes and financial statement schedules listed in the index at Item 15(a)(2) and our report dated February 11, 2025 expressed an unqualified opinion thereon. ​ Basis for Opinion ​ The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. ​ We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. ​ Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. ​ Definition and Limitations of Internal Control Over Financial Reporting ​ A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. ​ Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. ​ /s/ Ernst & Young LLP ​ Boston, Massachusetts February 11, 2025 F-2 Table of Contents Report of Independent Registered Public Accounting Firm ​ To the Stockholders and the Board of Directors of Franklin Street Properties Corp. ​ Opinion on the Financial Statements ​ We have audited the accompanying consolidated balance sheets of Franklin Street Properties Corp. (the Company) as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2024 and the related notes and financial statement schedules listed in the Index at Item 15(a)(2) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024 and 2023 and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with U.S. generally accepted accounting principles. ​ We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 11, 2025 expressed an unqualified opinion thereon. ​ Basis for Opinion ​ These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. ​ We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. ​ Critical Audit Matter ​ The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. ​ F-3 Table of Contents ​ Impairment assessment of real estate assets ​ ​ Description of the Matter The Company’s real estate assets, net totaled $835 million as of December 31, 2024. As described in Note 2 to the consolidated financial statements, the Company reviews its properties to determine if their carrying amounts will be recovered from future operating cash flows when indicators of impairment are identified. Auditing the Company's impairment assessment involved a high degree of subjectivity as estimates underlying the determination of recoverability involve management making significant judgments to derive assumptions affected by expected future market conditions and leasing activity. Assumptions included in the Company’s recoverability assessment included the rental rates and future occupancy of the Company’s real estate properties. ​ ​ How We Addressed the Matter in Our Audit We tested the design and operating effectiveness of controls over the Company’s impairment process. For example, we tested controls over management’s review of significant assumptions underlying projections used in the Company’s recoverability assessment. Our testing of the Company’s impairment assessment included, among other procedures, evaluating the significant assumptions used to estimate the future undiscounted cash flows used in the recoverability assessment. For example, we compared future market conditions to current market data, performed a sensitivity analysis to evaluate the impact of certain assumptions on the estimate of undiscounted cash flows and recalculated management’s estimate. Professionals with specialized skill and knowledge were used to assist in the evaluation of the appropriateness of the certain assumptions for certain real estate assets. ​ ​ ​ /s/ Ernst & Young LLP ​ ​ ​ We have served as the Company’s auditor since 2003. ​ ​ ​ Boston, Massachusetts ​ February 11, 2025 ​ ​ F-4 Table of Contents Franklin Street Properties Corp. Consolidated Balance Sheets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, (in thousands) 2024 2023 ​ ​ ​ ​ ​ ​ ​ ​ Assets: ​ ​ ​ ​ ​ ​ ​ Real estate assets: ​ ​ ​ ​ ​ ​ ​ Land (amounts related to variable interest entities ("VIEs") of $ 6,416 and $ 6,416 at December 31, 2024 and December 31, 2023, respectively) ​ $ 105,298 ​ $ 110,298 ​ Buildings and improvements (amounts related to VIEs of $ 13,279 and $ 13,279 at December 31, 2024 and December 31, 2023, respectively) ​ 1,096,265 ​ 1,133,971 ​ Fixtures and equipment ​ 11,053 ​ 12,904 ​ ​ ​ 1,212,616 ​ 1,257,173 ​ Less accumulated depreciation (amounts related to VIEs of $ 682 and $ 341 at December 31, 2024 and December 31, 2023, respectively) ​ 377,708 ​ 366,349 ​ Real estate assets, net (amounts related to VIEs of $ 19,013 and $ 19,354 at December 31, 2024 and December 31, 2023, respectively) ​ 834,908 ​ 890,824 ​ ​ ​ ​ ​ ​ ​ ​ ​ Acquired real estate leases, less accumulated amortization of $ 13,613 and $ 20,413 , respectively (amounts related to VIEs of $ 67 and $ 305 , less accumulated amortization of $ 35 and $ 222 at December 31, 2024 and December 31, 2023, respectively) ​ 4,205 ​ 6,694 ​ Asset held for sale ​ ​ — ​ ​ 73,318 ​ Cash, cash equivalents and restricted cash (amounts related to VIEs of $ 1,314 and $ 2,167 at December 31, 2024 and December 31, 2023, respectively) ​ 42,683 ​ 127,880 ​ Tenant rent receivables ​ 1,283 ​ 2,191 ​ Straight-line rent receivable ​ 37,727 ​ 40,397 ​ Prepaid expenses and other assets ​ 3,114 ​ 4,239 ​ Office computers and furniture, net of accumulated depreciation of $ 1,073 and $ 1,020 , respectively ​ 70 ​ 123 ​ Deferred leasing commissions, net of accumulated amortization of $ 14,195 and $ 16,008 , respectively ​ 22,941 ​ 23,664 ​ ​ ​ ​ ​ ​ ​ ​ ​ Total assets ​ $ 946,931 ​ $ 1,169,330 ​ ​ The accompanying notes are an integral part of these consolidated financial statements. ​ F-5 Table of Contents Franklin Street Properties Corp. Consolidated Balance Sheets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, (in thousands, except share and par value amounts) 2024 2023 ​ ​ ​ ​ ​ ​ ​ ​ Liabilities and Stockholders’ Equity: ​ ​ ​ ​ ​ ​ ​ Liabilities: ​ ​ ​ ​ ​ ​ ​ Bank note payable ​ $ — ​ $ 90,000 ​ Term loans payable, less unamortized financing costs of $ 2,220 and $ 293 , respectively ​ 124,491 ​ 114,707 ​ Series A & Series B Senior Notes, less unamortized financing costs of $ 1,191 and $ 329 , respectively ​ ​ 122,430 ​ ​ 199,670 ​ Accounts payable and accrued expenses (amounts related to VIEs of $ 534 and $ 590 at December 31, 2024 and December 31, 2023, respectively) ​ 34,067 ​ 41,879 ​ Accrued compensation ​ 3,097 ​ 3,644 ​ Tenant security deposits ​ 6,237 ​ 6,204 ​ Lease liability ​ ​ 707 ​ ​ 334 ​ Acquired unfavorable real estate leases, less accumulated amortization of $ 89 and $ 396 , respectively ​ 45 ​ 87 ​ ​ ​ ​ ​ ​ ​ ​ ​ Total liabilities ​ 291,074 ​ 456,525 ​ ​ ​ ​ ​ ​ ​ ​ ​ Commitments and contingencies ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stockholders’ Equity: ​ ​ ​ ​ ​ ​ ​ Preferred stock, $ .0001 par value, 20,000,000 shares authorized, none issued or outstanding ​ — ​ — ​ Common stock, $ .0001 par value, 180,000,000 shares authorized, 103,566,715 and 103,430,353 shares issued and outstanding , respectively ​ 10 ​ 10 ​ Additional paid-in capital ​ 1,335,361 ​ 1,335,091 ​ Accumulated other comprehensive income ​ — ​ 355 ​ Distributions in excess of accumulated earnings ​ ( 679,514 ) ​ ( 622,651 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ Total stockholders’ equity ​ 655,857 ​ 712,805 ​ ​ ​ ​ ​ ​ ​ ​ ​ Total liabilities and stockholders’ equity ​ $ 946,931 ​ $ 1,169,330 ​ ​ ​ The accompanying notes are an integral part of these consolidated financial statements. ​ F-6 Table of Contents Franklin Street Properties Corp. Consolidated Statements of Operations ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended ​ December 31, (in thousands, except per share amounts) 2024 2023 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ Revenues: ​ ​ ​ ​ ​ ​ ​ ​ ​ Rental $ 120,080 ​ $ 145,446 ​ $ 163,739 ​ Related party revenue: ​ ​ ​ ​ ​ ​ ​ ​ ​ Management fees and interest income from loans — ​ — ​ 1,855 ​ Other 32 ​ 261 ​ 21 ​ Total revenues 120,112 ​ 145,707 ​ 165,615 ​ Expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ Real estate operating expenses 45,043 ​ 50,732 ​ 52,820 ​ Real estate taxes and insurance 22,716 ​ 27,200 ​ 34,620 ​ Depreciation and amortization 44,774 ​ 54,738 ​ 63,808 ​ General and administrative 13,884 ​ 14,021 ​ 13,885 ​ Interest 26,424 ​ 24,318 ​ 22,808 ​ Total expenses 152,841 ​ 171,009 ​ 187,941 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loss on extinguishment of debt ​ ( 1,042 ) ​ ​ ( 106 ) ​ ​ ( 78 ) ​ Gain on consolidation of Sponsored REIT ​ — ​ ​ 394 ​ ​ — ​ Impairment and loan loss reserve ​ — ​ ​ — ​ ​ ( 4,237 ) ​ Gain (loss) on sale of properties and impairment of assets held for sale, net ​ ( 20,826 ) ​ ​ ( 23,384 ) ​ ​ 27,939 ​ Interest income 2,090 ​ 567 ​ — ​ Income (loss) before taxes ( 52,507 ) ​ ( 47,831 ) ​ 1,298 ​ Tax expense 216 ​ 279 ​ 204 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income (loss) $ ( 52,723 ) ​ $ ( 48,110 ) ​ $ 1,094 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average number of shares outstanding, basic and diluted 103,510 ​ 103,357 ​ 103,338 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income (loss) per share, basic and diluted $ ( 0.51 ) ​ $ ( 0.47 ) ​ $ 0.01 ​ ​ The accompanying notes are an integral part of these consolidated financial statements. ​ ​ F-7 Table of Contents Franklin Street Properties Corp. Consolidated Statements of Comprehensive Income (Loss) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the ​ ​ Year Ended ​ ​ December 31, (in thousands) 2024 2023 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income (loss) ​ $ ( 52,723 ) ​ $ ( 48,110 ) ​ $ 1,094 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other comprehensive income (loss): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Unrealized gain on derivative financial instruments ​ — ​ 177 ​ 9,597 ​ Reclassification from accumulated other comprehensive income into interest expense ​ ​ ( 355 ) ​ ​ ( 4,180 ) ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total other comprehensive income (loss) ​ ( 355 ) ​ ( 4,003 ) ​ 9,597 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Comprehensive income (loss) ​ $ ( 53,078 ) ​ $ ( 52,113 ) ​ $ 10,691 ​ ​ The accompanying notes are an integral part of these consolidated financial statements. ​ ​ F-8 Table of Contents Franklin Street Properties Corp. Consolidated Statements of Stockholders’ Equity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ Distributions ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ other ​ in excess of ​ Total ​ ​ Common Stock ​ Paid-In ​ comprehensive ​ accumulated ​ Stockholders’ (in thousands) Shares Amount Capital income (loss) earnings Equity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance, December 31, 2021 103,999 ​ 10 $ 1,339,226 $ ( 5,239 ) $ ( 550,794 ) $ 783,203 ​ Comprehensive income — ​ — ​ — ​ 9,597 ​ 1,094 ​ 10,691 ​ Repurchased shares ​ ( 847 ) ​ ​ — ​ ​ ( 4,843 ) ​ ​ — ​ ​ — ​ ​ ( 4,843 ) ​ Shares issued for: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ — ​ Equity-based compensation ​ 84 ​ ​ — ​ ​ 393 ​ ​ — ​ ​ — ​ ​ 393 ​ Distributions — ​ — ​ — ​ — ​ ( 20,708 ) ​ ( 20,708 ) ​ Balance, December 31, 2022 103,236 ​ 10 ​ 1,334,776 ​ 4,358 ​ ( 570,408 ) ​ 768,736 ​ Comprehensive loss — ​ ​ — ​ ​ — ​ ​ ( 4,003 ) ​ ​ ( 48,110 ) ​ ​ ( 52,113 ) ​ Repurchased shares ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ Shares issued for: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Equity-based compensation ​ 194 ​ — ​ 315 ​ — ​ — ​ 315 ​ Distributions — ​ — ​ — ​ — ​ ( 4,133 ) ​ ( 4,133 ) ​ Balance, December 31, 2023 103,430 ​ 10 ​ 1,335,091 ​ 355 ​ ( 622,651 ) ​ 712,805 ​ Comprehensive loss — ​ ​ — ​ ​ — ​ ​ ( 355 ) ​ ​ ( 52,723 ) ​ ​ ( 53,078 ) ​ Repurchased shares ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ Shares issued for: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ — ​ Equity-based compensation ​ 137 ​ — ​ 270 ​ — ​ — ​ 270 ​ Distributions — ​ — ​ — ​ — ​ ( 4,140 ) ​ ( 4,140 ) ​ Balance, December 31, 2024 103,567 ​ $ 10 ​ $ 1,335,361 ​ $ — ​ $ ( 679,514 ) ​ $ 655,857 ​ ​ The accompanying notes are an integral part of these consolidated financial statements. ​ F-9 Table of Contents Franklin Street Properties Corp. Consolidated Statements of Cash Flows ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, (in thousands) 2024 2023 2022 Cash flows from operating activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income (loss) ​ $ ( 52,723 ) ​ $ ( 48,110 ) ​ $ 1,094 ​ Adjustments to reconcile net income (loss) to net cash provided by operating activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Depreciation and amortization expense ​ 47,742 ​ 57,240 ​ 65,697 ​ Amortization of above and below market leases ​ ( 17 ) ​ ( 44 ) ​ ( 118 ) ​ Shares issued as compensation ​ ​ 270 ​ 315 ​ 394 ​ Amortization of other comprehensive income into interest expense ​ ​ ( 355 ) ​ ​ ( 3,851 ) ​ ​ — ​ Loss on extinguishment of debt ​ ​ 1,042 ​ ​ 106 ​ ​ 78 ​ Gain on consolidation of Sponsored REIT ​ ​ — ​ ​ ( 394 ) ​ ​ — ​ Impairment and loan loss reserve ​ ​ — ​ ​ — ​ ​ 4,237 ​ (Gain) loss on sale of properties and impairment of assets held for sale, net ​ 20,826 ​ 23,384 ​ ( 27,939 ) ​ Changes in operating assets and liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Tenant rent receivables ​ 908 ​ 10 ​ ( 247 ) ​ Straight-line rents ​ 1,970 ​ 625 ​ ( 5,895 ) ​ Lease acquisition costs ​ ( 666 ) ​ ( 2,007 ) ​ ( 4,494 ) ​ Prepaid expenses and other assets ​ 355 ​ 382 ​ ( 1,805 ) ​ Accounts payable and accrued expenses ​ ( 3,708 ) ​ ( 2,709 ) ​ ( 5,983 ) ​ Accrued compensation ​ ( 547 ) ​ — ​ ( 1,060 ) ​ Tenant security deposits ​ 33 ​ 494 ​ ( 509 ) ​ Payment of deferred leasing commissions ​ ( 6,143 ) ​ ( 7,575 ) ​ ( 8,216 ) ​ Net cash provided by operating activities ​ 8,987 ​ 17,866 ​ 15,234 ​ Cash flows from investing activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Property improvements, fixtures and equipment ​ ​ ( 25,213 ) ​ ​ ( 31,637 ) ​ ​ ( 54,910 ) ​ Consolidation of Sponsored REIT ​ — ​ ​ 3,048 ​ — ​ Proceeds received from sales of properties ​ ​ 95,497 ​ ​ 142,225 ​ ​ 128,949 ​ Net cash provided by investing activities ​ 70,284 ​ 113,636 ​ 74,039 ​ Cash flows from financing activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Distributions to stockholders ​ ( 4,140 ) ​ ( 4,133 ) ​ ( 53,988 ) ​ Proceeds received from termination of interest rate swap ​ — ​ 4,206 ​ — ​ Stock repurchases ​ ​ — ​ ​ — ​ ​ ( 4,843 ) ​ Borrowings under Bank note payable ​ — ​ 77,000 ​ 90,000 ​ Repayments of Bank note payable ​ ( 22,667 ) ​ ( 35,000 ) ​ ( 42,000 ) ​ Repayments of Term loans payable ​ ( 55,622 ) ​ ( 50,000 ) ​ ( 110,000 ) ​ Repayments of Series A&B Senior Notes ​ ​ ( 76,379 ) ​ — ​ ​ — ​ Deferred financing costs ​ ( 5,660 ) ​ ( 2,327 ) ​ ( 2,561 ) ​ Net cash used in financing activities ​ ( 164,468 ) ​ ( 10,254 ) ​ ( 123,392 ) ​ Net increase (decrease) in cash, cash equivalents and restricted cash ​ ( 85,197 ) ​ 121,248 ​ ( 34,119 ) ​ Cash, cash equivalents and restricted cash , beginning of year ​ 127,880 ​ 6,632 ​ 40,751 ​ Cash, cash equivalents and restricted cash , end of period ​ $ 42,683 ​ $ 127,880 ​ $ 6,632 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The accompanying notes are an integral part of these consolidated financial statements. ​ F-10 Table of Contents Franklin Street Properties Corp. Consolidated Statements of Cash Flows ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, (in thousands) 2024 2023 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Supplemental disclosure of cash flow information: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash paid for: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest ​ $ 24,068 ​ $ 25,740 ​ $ 21,085 ​ Taxes on income ​ $ 385 ​ $ 339 ​ $ 667 ​ Non-cash investing and financing activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accrued costs for purchase of real estate assets ​ $ 2,888 ​ $ 7,566 ​ $ 9,962 ​ Investment in related party mortgage loan receivable converted to real estate assets and acquired real estate leases in conjunction with variable interest entity consolidation ​ $ — ​ $ 20,000 ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The accompanying notes are an integral part of these consolidated financial statements. ​ ​ ​ F-11 Table of Contents Franklin Street Properties Corp. Notes to the Consolidated Financial Statements 1. Organization ​ Franklin Street Properties Corp. (“FSP Corp.” or the “Company”) holds, directly and indirectly, 100 % of the interest in FSP Investments LLC, FSP Property Management LLC , FSP Holdings LLC and FSP Protective TRS Corp . FSP Property Management LLC provides asset management and property management services. The Company also has a non-controlling common stock interest in the corporation that is the sole member of FSP Monument Circle LLC, which corporation was organized to operate as a real estate investment trust (“Monument Circle” or the “Sponsored REIT”). ​ As of December 31, 2024, the Company owned and operated a portfolio of real estate consisting of 14 operating properties, and the Sponsored REIT, which was consolidated effective January 1, 2023. The Company may pursue, on a selective basis, the sale of its properties in order to take advantage of the value creation and demand for its properties, for geographic, property specific reasons or for other general corporate purposes. ​ 2. Significant Accounting Policies ​ Basis of Presentation ​ The accompanying consolidated financial statements include all of the accounts of the Company and its majority-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. ​ Estimates and Assumptions ​ The Company prepares its financial statements and related notes in conformity with generally accepted accounting principles in the United States of America (“GAAP”). These principles require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates in the consolidated financial statements include the allowance for credit losses, purchase price allocations and impairment considerations. ​ Variable Interest Entities (VIEs) ​ The Company determines whether an entity is a VIE and, if so, whether it should be consolidated by utilizing judgments and estimates that are inherently subjective. The determination of whether an entity in which the Company holds a, direct or indirect, variable interest is a VIE is based on several factors, including whether the entity’s total equity investment at risk upon inception is sufficient to finance the entity’s activities without additional subordinated financial support. The Company makes judgments regarding the sufficiency of the equity at risk based first on a qualitative analysis, and then a quantitative analysis, if necessary. ​ The Company analyzes any investments in VIEs to determine if the Company is the primary beneficiary. In evaluating whether the Company is the primary beneficiary, the Company evaluates its direct and indirect economic interests in the entity. Determining which reporting entity, if any, is the primary beneficiary of a VIE is primarily a qualitative approach focused on identifying which reporting entity has both (1) the power to direct the activities of a VIE that most significantly impact such entity’s economic performance and (2) the obligation to absorb losses or the right to receive benefits from such entity that could potentially be significant to such entity. Performance of that analysis requires the exercise of judgment. ​ The Company considers a variety of factors in identifying the entity that holds the power to direct matters that most significantly impact the VIE’s economic performance including, but not limited to, the ability to direct a proposed sale of the property or merger of the company. In addition, the Company considers the rights of other investors to participate in those decisions, to replace the manager and to amend the corporate charter. The Company determines whether it is the primary beneficiary of a VIE at the time it becomes involved with a VIE and considers that conclusion upon a reconsideration event. F-12 Table of Contents ​ As of January 1, 2023, the Company’s relationship with the Sponsored REIT was considered a VIE and the Company became the primary beneficiary. Upon this reconsideration event, the entity is included within the Company’s consolidated financial statements and all intercompany accounts and transactions have been eliminated in consolidation. A gain on consolidation of approximately $ 0.4 million was recognized in the three months ended March 31, 2023. Cash and cash equivalents of $ 3 million held by Monument Circle was included in the Company’s cash and cash equivalents upon consolidation and is reflected as “Consolidation of Sponsored REIT” in the consolidated statement of cash flows. The cash and cash equivalents held by Monument Circle are unable to be utilized for the Company’s operational purposes. The creditors of Monument Circle’s trade payables do not have any recourse against the Company. ​ The consolidation value of Monument Circle was allocated to real estate investments and leases, including lease origination costs. Lease origination costs represent the value associated with acquiring an in-place lease (i.e. the market cost to execute a similar lease, including leasing commission, legal, vacancy, and other related costs). The value assigned to building approximates the replacement cost; the value assigned to land approximates its appraised value; and the value assigned to leases approximate their fair value. Other assets and liabilities are recorded at their historical costs, which approximates fair value. ​ The Company assessed the fair value of the acquired real estate leases based on estimated cash flow projections that utilize appropriate discount rates and available market information. Such inputs are Level 3 in the fair value hierarchy. ​ The following table summarizes the estimated fair value of the assets acquired at the date of consolidation, January 1, 2023: ​ ​ ​ ​ (in thousands) ​ ​ ​ ​ ​ Real estate assets $ 19,695 Value of acquired real estate leases ​ 305 Total $ 20,000 ​ The following is quantitative information about significant unobservable inputs in the Company’s Level 3 measurement of the assets acquired in the consolidation of Monument Circle and were measured at fair value on a nonrecurring basis at January 1, 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair Value (1) at ​ Significant Range ​ Weighted Description ​ January 1, 2023 ​ Valuation Technique ​ Unobservable Input ​ Min ​ Max Average (2) ​ ​ ​ (in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Monument Circle Consolidation ​ $ 20,000 Discounted Cash Flows ​ Exit Cap Rate 7.50 % ​ 7.50 % ​ 7.50 % ​ ​ ​ ​ ​ ​ ​ Discount Rate ​ 9.50 % ​ 9.50 % ​ 9.50 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) Classified within Level 3 of the fair value hierarchy. ​ (2) Unobservable inputs were weighted based on the fair value of the related instrument. ​ ​ Prior to January 1, 2023, the Company’s relationship with the Sponsored REIT was considered a VIE in which the Company was not the primary beneficiary. The Company’s maximum exposure to losses associated with this VIE was limited to the principal amount outstanding under the loan from the Company to the Sponsored REIT secured by a mortgage on real estate owned by the Sponsored REIT (the “Sponsored REIT Loan”) net of the allowance for credit loss, the related accrued interest receivable and an exit fee receivable, which were in aggregate approximately $ 22.1 million at December 31, 2022. The accrued interest and exit fee receivables are included in prepaid expenses and other assets in the consolidated balance sheet and were approximately $ 2.3 million at December 31, 2022. The relationships and investments related to the Sponsored REIT are summarized in Note 3 . ​ Real Estate and Depreciation ​ Real estate assets are stated at cost less accumulated depreciation. F-13 Table of Contents ​ The Company allocates the value of real estate acquired among land, buildings and identified intangible assets or liabilities. Costs related to land, building and improvements are capitalized. Typical capital items include new roofs, site improvements, various exterior building improvements and major interior renovations. Costs incurred in connection with leasing (primarily tenant improvements and leasing commissions) are capitalized and amortized over the lease period. Routine replacements and ordinary maintenance and repairs that do not extend the life of the asset are expensed as incurred. Depreciation is computed using the straight-line method over the assets’ estimated useful lives as follows: ​ ​ ​ ​ ​ ​ ​ Category Years Commercial buildings ​ 39 ​ ​ Building improvements 15 - 39 ​ Fixtures and equipment 3 - 7 ​ ​ The Company reviews its properties to determine if their carrying amounts will be recovered from future operating cash flows if certain indicators of impairment are identified at those properties. These indicators may include lower or declining tenant occupancy, weak or declining tenant profitability, cash flows or liquidity, the Company’s decision to dispose of an asset before the end of its estimated useful life or legislative, economic, or market changes that permanently reduce the value of the Company’s investment. If indicators of impairment are present, the Company evaluates the carrying value of the property by comparing it to its expected future undiscounted cash flow. A property’s value is impaired only if management’s estimate of future undiscounted cash flows to be generated by the property over its estimated holding period is less than the carrying value of the property. If there are different potential outcomes for a property, the Company will take a probability weighted approach to estimating future cash flows. If the Company determines that impairment has occurred, the affected assets are reduced to their fair value. The evaluation of anticipated cash flows is highly subjective and is based in part on assumptions regarding future occupancy, rental rates, capital requirements, estimated holding periods and outcome probabilities that could differ materially from actual results in future periods. Since cash flows are considered on an undiscounted basis in the analysis that the Company conducts to determine whether an asset has been impaired, the Company’s strategy of holding properties over the long term directly decreases the likelihood of recording an impairment loss. If the Company’s strategy changes or market conditions otherwise dictate an earlier sale date, an impairment loss may be recognized. The Company did not recognize any impairment losses on any assets classified as held and used for the years ended December 31, 2024, 2023 and 2022. ​ Acquired Real Estate Leases and Amortization ​ Acquired real estate leases represent costs associated with acquiring an in-place lease (i.e., the market cost to execute a similar lease, including leasing commission, tenant improvements, legal, vacancy and other related costs) and the value relating to leases with rents above the market rate. Amortization is computed using the straight-line method over the term of the leases, which range from 12 months to 154 months . Amortization of these combined components was approximately $ 2.5 million, $ 3.2 million and $ 4.5 million for the years ended December 31, 2024, 2023 and 2022, respectively. ​ Amortization related to costs associated with acquiring an in-place lease is included in depreciation and amortization on the consolidated statements of income. Amortization related to leases with rents above the market rate is offset against the rental revenue in the consolidated statements of income. The estimated annual amortization expense for the five years and thereafter following December 31, 2024 is as follows: ​ ​ ​ ​ ​ ​ (in thousands) December 31, 2025 ​ $ 1,718 ​ 2026 ​ 1,644 ​ 2027 ​ 389 ​ 2028 ​ 300 ​ 2029 ​ 125 ​ 2030 and thereafter ​ 29 ​ ​ F-14 Table of Contents Acquired Unfavorable Real Estate Leases and Amortization ​ Acquired unfavorable real estate leases represent the value relating to leases with rents below the market rate. Amortization is computed using the straight-line method over the term of the leases, which range from 101 months to 151 months . Amortization expense was approximately $ 0.1 million, $ 0.1 million and $ 0.2 million for the years ended December 31, 2024, 2023 and 2022, respectively. ​ Amortization related to leases with rents below the market rate is included with rental revenue in the consolidated statements of income. The estimated annual amortization for the five years and thereafter following December 31, 2024 is as follows: ​ ​ ​ ​ ​ ​ (in thousands) December 31, 2025 ​ $ 10 ​ 2026 ​ 8 ​ 2027 ​ 8 ​ 2028 ​ 6 ​ 2029 ​ 6 ​ 2030 and thereafter ​ 7 ​ ​ Asset Held For Sale ​ Classification of a property as held for sale typically occurs upon the execution of a purchase and sale agreement and belief by management that the sale or disposition is probable of occurrence within one year . Upon determining that a property was held for sale, the Company discontinues depreciating the property and reflects the property in its consolidated balance sheet at the lower of its carrying amount or fair value less the cost to sell. The Company presents the property held for sale on its consolidated balance sheet as “Asset held for sale”. The Company reports the results of operations of its properties sold or held for sale (that do not represent a strategic shift that has, or will have, a major effect on financial results) in its consolidated statements of income through the date of sale. ​ Cash and Cash Equivalents ​ The Company considers all highly liquid instruments purchased with an original maturity of three months or less to be cash equivalents. 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. ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, December 31, (in thousands) ​ 2024 ​ 2023 Cash and cash equivalents (1) ​ $ 41,121 ​ $ 125,530 Restricted cash ​ 1,562 ​ 2,350 Total cash, cash equivalents and restricted cash ​ $ 42,683 ​ $ 127,880 ​ ​ ​ ​ ​ ​ ​ (1) Includes $ 1,314 and $ 2,167 at December 31, 2024 and 2023, respectively, pertaining to Monument Circle, which the Company is unable to utilize for its own operational purposes. ​ Restricted Cash ​ Restricted cash consists of tenant security deposits, which are required by law in some states or by contractual agreement to be kept in a segregated account, and escrows arising from property sales. Tenant security deposits are refunded when tenants vacate, provided that the tenant has not damaged the property. ​ Cash held in escrow is paid based on the terms of the closing agreement for the sale. Restricted cash also may include funds segregated for specific tenant improvements per lease agreements. ​ F-15 Table of Contents Tenant Rent Receivables ​ Tenant rent receivables are expected to be collected within one year . The Company recognizes the effect of a change in its assessment of whether the collectability of operating lease receivables are probable as an adjustment to lease income. ​ Concentration of Credit Risks ​ Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash investments, derivatives, related party mortgage loan receivable and accounts receivable. The Company maintains its cash balances principally in two banks which the Company believes to be creditworthy. The Company periodically assesses the financial condition of the banks and believes that the risk of loss is minimal. Cash balances held with various financial institutions frequently exceed the insurance limit of $ 250,000 provided by the Federal Deposit Insurance Corporation. The Company performs ongoing credit evaluations of its tenants and requires certain tenants to provide security deposits or letters of credit. Though these security deposits and letters of credit are insufficient to meet the total value of a tenant’s lease obligation, they are a measure of good faith and a source of funds to offset the economic costs associated with lost rent and the costs associated with re-tenanting the space. The Company has no single tenant which accounts for more than 10 % of its annualized rent. ​ Financial Instruments ​ The Company estimates that the carrying values of cash and cash equivalents, restricted cash, receivables, prepaid expenses, accounts payable and accrued expenses, accrued compensation, and tenant security deposits approximate their fair values based on their short-term maturity and the bank note and term loans payable approximate their fair values as they bear interest at variable interest rates. ​ Straight-line Rent Receivable ​ Certain leases provide for fixed rent increases over the term of the lease. Rental revenue is recognized on a straight-line basis over the related lease term; however, billings by the Company are based on the lease agreements. Straight-line rent receivable, which is the cumulative revenue recognized in excess of amounts billed by the Company, was $ 37.7 million, $ 40.4 million and $ 52.7 million at December 31, 2024, 2023 and 2022, respectively. ​ Deferred Leasing Commissions ​ Deferred leasing commissions represent direct and incremental external leasing costs incurred in the leasing of commercial space. These costs are capitalized and are amortized on a straight-line basis over the terms of the related lease agreements. Amortization expense was approximately $ 4.5 million, $ 5.9 million and $ 7.1 million for the years ended December 31, 2024, 2023 and 2022, respectively. ​ The estimated annual amortization for the five years and thereafter following December 31, 2024 is as follows: ​ ​ ​ ​ ​ ​ (in thousands) December 31, 2025 $ 4,374 ​ 2026 3,706 ​ 2027 3,244 ​ 2028 2,797 ​ 2029 2,324 ​ 2030 and thereafter 6,496 ​ ​ Common Share Repurchases ​ The Company recognizes the gross cost of the common shares it repurchases as a reduction in stockholders’ equity using the treasury stock method. Maryland law does not recognize a separate treasury stock account but provides that shares F-16 Table of Contents repurchased are classified as authorized but unissued shares. Accordingly, the Company reduces common stock for the par value and the excess of the purchase price over the par value is a reduction to additional paid-in capital. ​ Revenue Recognition ​ Rental Revenue - The Company has retained substantially all of the risks and benefits of ownership of the Company’s commercial properties and accounts for its leases as operating leases. Rental revenue includes income from leases, certain reimbursable expenses, straight-line rent adjustments and other income associated with renting the property. Rental income from leases, which includes rent concessions (including free rent and other lease inducements) and scheduled increases in rental rates during the lease term, is recognized on a straight-line basis. The Company does not have any significant percentage rent arrangements with its commercial property tenants. Reimbursable expenses are included in rental income in the period earned. A summary of rental revenue is shown in the following table: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, (in thousands) 2024 2023 2022 Income from leases ​ $ 86,563 ​ $ 103,716 ​ $ 107,990 ​ Reimbursable expenses ​ 35,469 ​ 42,311 ​ 49,736 ​ Straight-line rent adjustment ​ ( 1,970 ) ​ ( 626 ) ​ 5,895 ​ Amortization of favorable and unfavorable leases ​ 18 ​ 45 ​ 118 ​ ​ ​ $ 120,080 ​ $ 145,446 ​ $ 163,739 ​ ​ Related Party and Other Revenue - Property and asset management fees, interest income on loans and other income are recognized when the related services are performed and the earnings process is complete. ​ Segment Reporting ​ The Company is a REIT focused on real estate investments primarily in the office market and currently operates in only one segment: real estate operations. ​ Income Taxes ​ Taxes on income for the years ended December 31, 2024, 2023 and 2022 represent taxes incurred by FSP Protective TRS Corp, which is a taxable REIT subsidiary, and the State of Texas franchise tax applicable to FSP Corp., which is classified as an income tax for reporting purposes. ​ Net Income Per Share ​ Basic net income per share is computed by dividing net income by the weighted average number of shares outstanding during the period. 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 December 31, 2024, 2023 and 2022. The denominator used for calculating basic and diluted net income per share was 103,510,000 , 103,357,000 and 103,338,000 for the years ended December 31, 2024 , 2023 and 2022 , respectively. ​ Derivative Instruments ​ The Company recognizes derivatives on the consolidated balance sheets at fair value. Derivatives that do not qualify, or are not designated as hedge relationships, must be adjusted to fair value through income. Derivative instruments designated in a hedge relationship to mitigate exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Cash flow hedges are accounted for by recording the fair value of the derivative instrument on the consolidated balance sheets as either an asset or liability. To the extent hedges are effective, a corresponding amount, adjusted for swap payments, is recorded in accumulated other comprehensive income within stockholders’ equity. Amounts are then reclassified from accumulated other comprehensive income to the income statement in the period or periods the hedged forecasted transaction affects earnings. Ineffectiveness, if any, is recognized in other comprehensive income (“OCI”) and reclassified into the income statement. The Company reviews F-17 Table of Contents the effectiveness of each hedging transaction, which involves estimating future cash flows, at least quarterly. Derivative instruments designated in a hedge relationship to mitigate exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. The Company currently has no fair value hedges outstanding. Fair values of derivatives are subject to significant variability based on changes in interest rates and counterparty credit risk. The results of such variability could be a significant increase or decrease in the Company’s derivative assets, derivative liabilities, equity, and/or earnings. ​ Fair Value Measurements ​ Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There is also an established fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value. Financial assets and liabilities recorded on the consolidated balance sheets at fair value are categorized based on the inputs to the valuation techniques as follows: ​ Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access. Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interest rates and yield curves that are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or liability, which is typically based on an entity’s own assumptions, as there is little, if any, related market activity or information. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability including credit risk, which was not significant to the overall value. These inputs (See Notes 2 and 10) were considered and applied to the Company’s Sponsored REIT purchase price allocation and assets held for sale. Level 3 inputs were used to value assets acquired in the consolidation of the Sponsored REIT and the valuation of certain assets held for sale. ​ Subsequent Events ​ In preparing these consolidated financial statements the Company evaluated events that occurred through the date of issuance of these financial statements for potential recognition or disclosure. ​ Recent Accounting Standards ​ In October 2023, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative (“ASU 2023-06”). ASU 2023-06 adds interim and annual disclosure requirements to GAAP at the request of the Securities and Exchange Commission. The guidance in ASU 2023-06 is required to be applied prospectively and the GAAP requirements will be effective when the removal of the related SEC disclosure requirements is effective. If the SEC does not act to remove its related requirement by June 30, 2027, any related FASB amendments will be removed from the Accounting Standards Codification and will not be effective. The Company does not anticipate that the adoption of ASU 2023-06 will have a material impact on the consolidated financial statements. ​ In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”). ASU 2023-07 requires public entities to disclose significant segment expense and other segment items on an annual and interim basis and to provide in interim periods all disclosures about a reportable segment’s profit or loss and assets that are currently required annually. The guidance in ASU 2023-07 is applied retrospectively to all periods presented in the financial statements and is effective for public entities for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. F-18 Table of Contents Early adoption is permitted. The Company adopted ASU 2023-07, which did not have a material impact on the consolidated financial statements. ​ In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 enhances the transparency and decision usefulness of income tax disclosures and disclosures about income taxes paid. The guidance in ASU 2023-09 should be applied prospectively but may be applied retrospectively for each period presented. ASU 2023-09 is effective for public entities for fiscal years beginning after December 15, 2024. The Company does not anticipate that the adoption of ASU 2023-09 will have a material impact on the consolidated financial statements. ​ In November 2024, the FASB issued ASU No. 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”). ASU 2024-03 requires public business entities to provide disaggregated disclosures, in the notes to the financial statements, of certain categories of expenses that are included in expense line items on the face of the income statement. The guidance in ASU 2024-03 is required to be applied prospectively and entities may apply it retrospectively. ASU 2024-03 is effective for public entities for fiscal years beginning after December 15, 2026. The Company does not anticipate that the adoption of ASU 2024-03 will have a material impact on the consolidated financial statements . ​ 3. Related Party Transactions and Investments in Non-Consolidated Entities ​ Investment in Sponsored REITs ​ The Company held a common stock interest in one Sponsored REIT on each of December 31, 2024, 2023 and 2022. ​ 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 day s notice. Asset management fee income from non-consolidated entities amounted to approximately $ 0 , $ 0 and $ 28,000 for the years ended December 31, 2024, 2023 and 2022, respectively. ​ Prior to the consolidation of Monument Circle on January 1, 2023, the Company held the Sponsored REIT Loan, which was reported in the balance sheet as a related party mortgage loan receivable. The Company reviewed the need for an allowance under the current expected credit loss model for the Sponsored REIT Loan at each reporting period. The measurement of expected credit losses was based upon historical experiences, current conditions, and reasonable and supportable forecasts that affected the collectability of the reported amount. The Company elected to apply the practical expedient for financial assets secured by collateral in instances where the borrower was experiencing financial difficulty and repayment of the Sponsored REIT Loan was expected to be provided substantially through operation or sale of the collateral. The Company used the fair value of the collateral at the reporting date, and an adjustment to the allowance for expected credit losses was recorded when the amortized cost basis of the financial asset exceeded the fair value of the collateral, less costs to sell. ​ The Company regularly evaluated 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 were considered and used to assess whether cash flows from operations were sufficient to cover the current and future operating and debt service requirements. The Company also evaluated the borrower’s competency in managing and operating the secured property and considered the overall economic environment, real estate sector and geographic sub-market in which the secured property was located. The Company applied normal loan review and underwriting procedures (as may be implemented or modified from time to time) in making that judgment. ​ The Company recognized interest income and fees from the Sponsored REIT Loan of approximately $ 0.0 million, $ 0.0 million and $ 1.8 million for the years ended December 31, 2024, 2023 and 2022, respectively. On October 29, 2021, the Company agreed to amend and restate the Sponsored REIT Loan 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 F-19 Table of Contents 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. 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 Monument Circle the right to vote their shares in favor of any sale of the property owned by Monument Circle any time on or after January 1, 2023. The amended and restated Sponsored REIT Loan qualified as a troubled debt restructuring. There were no commitments to lend additional funds to the Sponsored REIT. On June 26, 2023, the Sponsored REIT Loan maturity was extended to September 30, 2023. On September 26, 2023, the Sponsored REIT Loan maturity was extended to September 30, 2024. On September 27, 2024, the Sponsored REIT Loan maturity was extended to September 30, 2025. ​ The Company recorded a $ 4.2 million increase in its provision for credit losses during the year ended December 31, 2022. The change in the allowance for credit losses during the year ended December 31, 2022 was primarily due to the deterioration within the current real estate market, changes to key assumptions applied within the Company’s financial model to reflect these market changes, such as the exit capitalization and discount rates, and due to an increase in the accrued interest receivable balance. The Company recorded a $ 4.2 million decrease in its provision for credit losses during the year ended December 31, 2023. The change in the allowance for credit losses during the year ended December 31, 2023 is due to the consolidation of Monument Circle. The following table presents a roll-forward of the Company’s allowance for credit losses. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, (In thousands) ​ 2024 ​ 2023 ​ 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Beginning allowance for credit losses ​ $ — ​ $ ( 4,237 ) ​ $ — Additional increases to the allowance for credit losses ​ ​ — ​ ​ — ​ ​ ( 4,237 ) Reductions to the allowance for credit losses ​ ​ — ​ ​ 4,237 ​ ​ ​ Ending allowance for credit losses ​ $ — ​ $ — ​ $ ( 4,237 ) ​ ​ ​ ​ 4. Bank Note Payable, Term Note Payable and Private Placements BMO Term Loan As of December 31, 2024, the Company has a term loan borrowing in the aggregate principal amount of approximately $ 71.1 million (the “BMO Term Loan”) with Bank of Montreal, as administrative agent, and the other lending institutions party thereto, that matures on April 1, 2026. On February 21, 2024, the Company amended the BMO Term Loan by entering into a Second Amendment to Second Amended and Restated Credit Agreement with Bank of Montreal and the other lending institutions party thereto (the “BMO Second Amendment”). The BMO Second Amendment amended the Second Amended and Restated Credit Agreement dated September 27, 2018 (the “Original BMO Credit Agreement”), as amended by the First Amendment to Second Amended and Restated Credit Agreement dated February 10, 2023 (the “BMO First Amendment”), to, among other things: (1) extend the maturity date from October 1, 2024 to April 1, 2026; (2) change the interest rate from either 300 basis points over SOFR or 200 basis points over the base rate to either 300 basis points over SOFR with a floor on SOFR of 500 basis points or 200 basis points over the base rate with a floor on the base rate of 600 basis points; (3) provide that, if, as of March 31, 2025, the aggregate principal amount outstanding under the BMO Term Loan, BofA Term Loan (defined below) and the Senior Notes (defined below) exceeds $ 200 million, the spread over SOFR or the base rate, as applicable, will permanently increase by 100 basis points from 300 basis points to 400 basis points in the case of SOFR, and from 200 basis points to 300 basis points in the case of the base rate; (4) require mandatory prepayments of the BMO Term Loan, the BofA Term Loan and the Senior Notes with net cash proceeds from the disposition of property, assets and equity issuances as follows: (a) 25.55556 % to the BMO Term Loan; (b) 20.00000 % to the BofA Term Loan; (c) 44.44444 % to the Senior Notes; and (d) the remaining 10 % to be retained by the Company; (5) require that, within 90 days of the February 21, 2024 effective date of the BMO Second Amendment, certain of the Company’s subsidiaries guarantee the BMO Term Loan; (6) require that, within 90 days of the February 21, 2024 effective date of the BMO Second Amendment, the Company pledge its equity interests in certain of the Company’s subsidiaries as collateral for the BMO Term Loan; (7) reduce the Company’s minimum fixed charge coverage ratio from 1.50 x to 1.25 x; and (8) reduce the Company’s minimum unsecured interest coverage ratio from F-20 Table of Contents 1.75 x to 1.25 x. The Original BMO Credit Agreement, as amended by the BMO First Amendment and the BMO Second Amendment, is referred to as the BMO Credit Agreement. On February 21, 2024, as part of the BMO Second Amendment, the Company repaid an approximately $ 29.0 million portion of the BMO Term Loan. On July 10, 2024, the Company repaid an approximately $ 7.2 million portion of the BMO Term Loan from asset sale proceeds of a property located in Glen Allen, Virginia. On October 25, 2024, the Company repaid an approximately $ 7.8 million portion of the BMO Term Loan from asset sale proceeds of a property located in Atlanta, Georgia. ​ Effective February 21, 2024, upon entering into the BMO Second Amendment, the BMO Term Loan bears interest at either (i) 300 basis points over one , three or six month term SOFR, plus a corresponding adjustment of 0.11448 %, 0.26161 % or 0.42826 %, respectively, with a floor on SOFR of 5.00 % or (ii) 200 basis points over the base rate with a floor on the base rate of 6.00 %. In addition, effective February 21, 2024 upon entering into the BMO Second Amendment, if, as of March 31, 2025, the aggregate principal amount outstanding under the BMO Term Loan, the BofA Term Loan and the Senior Notes exceeds $ 200 million, the spread over SOFR or the base rate, as applicable, will permanently increase by 100 basis points from 300 basis points to 400 basis points in the case of SOFR, and from 200 basis points to 300 basis points in the case of the base rate. As of December 31, 2024, the interest rate on the BMO Term Loan was 8.00 % per annum. The weighted average variable interest rate on all amounts outstanding under the BMO Term Loan was 8.34 % for the year ended December 31, 2024. As of December 31, 2023, the interest rate on the BMO Term Loan was 8.47 % per annum. The weighted average variable interest rate on all amounts outstanding under the BMO Term Loan from February 8, 2023, which is when the Company terminated its outstanding interest rate swaps applicable to the BMO Term Loan as described below, through December 31, 2023, was approximately 8.11 % per annum. Although the interest rate on the BMO Term Loan was variable under the BMO Credit Agreement, the Company fixed the base LIBOR interest rate that previously applied to the BMO Term Loan by entering into interest rate swap transactions. 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. On February 8, 2023, the Company terminated all outstanding interest rate swaps applicable to the BMO Term Loan and, on February 10, 2023, the Company received an aggregate of approximately $ 4.3 million as a result of such terminations, of which approximately $ 0.1 million related to interest receivable. The BMO Credit Agreement 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, use of net cash proceeds from the disposition of property, assets and equity issuances, mandatory prepayments, the requirement to have certain subsidiaries provide guarantees, the requirement to pledge the Company’s equity interests in certain subsidiaries as collateral, changes in business, certain restricted payments, repurchases and redemptions of the Company’s common stock, going concern qualifications to the Company’s financial statements, and transactions with affiliates. In addition, the BMO Credit Agreement also restricts the Company’s ability to make quarterly dividend distributions that exceed $ 0.01 per share of the Company’s common stock; provided, however, that notwithstanding such restriction, the Company is permitted to make dividend distributions based on the Company’s good faith estimate of projected or estimated taxable income or otherwise as necessary to retain the Company’s status as a real estate investment trust, to meet the distribution requirements of Section 857 of the Internal Revenue Code or to eliminate any income or excise taxes to which the Company would otherwise be subject. The BMO Credit Agreement 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 maximum secured recourse leverage ratio, a minimum fixed charge coverage ratio, a maximum unencumbered leverage ratio, and minimum unsecured interest coverage. The Company was in compliance with the BMO Term Loan financial covenants as of December 31, 2024. The BMO Credit Agreement provides for customary events of default with corresponding grace periods, including failure to pay any principal or interest when due, certain cross defaults and a change in control of the Company (as defined in the BMO Credit Agreement). 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 BMO Credit Agreement immediately due and payable, terminate the lenders’ commitments to make loans under the BMO Credit Agreement, and enforce any and all rights of the lenders or administrative agent under the BMO Credit Agreement and related F-21 Table of Contents 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. ​ BofA Term Loan ​ As of December 31, 2024, the Company has a term loan borrowing in the aggregate principal amount of approximately $ 55.6 million (the “BofA Term Loan”) with Bank of America, N.A. as administrative agent, and other lending institutions party thereto that matures on April 1, 2026. Prior to February 21, 2024, we referred to the BofA Term Loan as the BofA Revolver. On February 21, 2024, the Company amended the BofA Term Loan by entering into a Second Amendment to Credit Agreement with the lending institutions party thereto (the “BofA Second Amendment”). The BofA Second Amendment amended the Credit Agreement dated January 10, 2022 (the Original BofA Credit Agreement, as amended by the First Amendment to Credit Agreement dated February 10, 2023 (the “BofA First Amendment”) to, among other things: (1) extend the maturity date from October 1, 2024 to April 1, 2026; (2) convert borrowings from being either revolving loans or letters of credit to a term loan; (3) change the interest rate from 300 basis points over SOFR to 300 basis points over SOFR with a floor on SOFR of 500 basis points in the case of SOFR, and from 200 basis points to 300 basis points in the case of the base rate; (4) provide that, if, as of March 31, 2025, the aggregate principal amount outstanding under the BMO Term Loan, the BofA Term Loan and the Senior Notes exceeds $ 200 million, the spread over SOFR will permanently increase by 100 basis points from 300 basis points to 400 basis points; (5) require mandatory prepayments of the BMO Term Loan, the BofA Term Loan and the Senior Notes with net cash proceeds from the disposition of property, assets and equity issuances as follows: (a) 25.55556 % to the BMO Term Loan; (b) 20.00000 % to the BofA Term Loan; (c) 44.44444 % to the Senior Notes; and (d) the remaining 10 % to be retained by the Company; (6) require that, within 90 days of the February 21, 2024 effective date of the BofA Second Amendment, certain of the Company’s subsidiaries guarantee the BofA Term Loan; (7) require that, within 90 days of the February 21, 2024 effective date of the BofA Second Amendment, the Company pledge its equity interests in certain of the Company’s subsidiaries as collateral for the BofA Term Loan; (8) reduce the Company’s minimum fixed charge coverage ratio from 1.50 x to 1.25 x; and (9) reduce the Company’s minimum unsecured interest coverage ratio from 1.75 x to 1.25 x. The Original BofA Credit Agreement, as amended by the BofA First Amendment and the BofA Second Amendment, is referred to as the BofA Credit Agreement. ​ On February 21, 2024, as part of the BofA Second Amendment, the Company repaid an approximately $ 22.7 million portion of the BofA Revolver. On July 10, 2024, the Company repaid an approximately $ 5.6 million portion of the BofA Term Loan from asset sale proceeds of a property located in Glen Allen, Virginia. On October 25, 2024, the Company repaid an approximately $ 6.1 million portion of the BofA Term Loan from asset sale proceeds of a property located in Atlanta, Georgia. ​ Effective February 21, 2024, upon entering into the BofA Second Amendment, the BofA Term Loan bears interest at 300 basis points over either (i) the daily simple SOFR, plus an adjustment of 0.11448 %, or (ii) one , three or six month term SOFR, plus a corresponding adjustment of 0.11448 %, 0.26161 % or 0.42826 %, respectively, with a floor on SOFR of 5.00 %. In addition, effective February 21, 2024, upon entering into the BofA Second Amendment, under certain circumstances, such as if SOFR is not able to be determined, the BofA Term Loan bears interest at 200 basis points over the base rate with a floor on the base rate of 600 basis points. In addition, effective February 21, 2024 upon entering into the BofA Second Amendment, if, as of March 31, 2025, the aggregate principal amount outstanding under the BMO Term Loan, the BofA Term Loan and the Senior Notes exceeds $ 200 million, the spread over SOFR will permanently increase by 100 basis points from 300 basis points to 400 basis points in the case of SOFR, and from 200 basis points to 300 basis points in the case of the base rate. ​ As of December 31, 2024, the interest rate on the BofA Term Loan was 8.00 % per annum. The weighted average variable interest rate on all amounts outstanding under the BofA Term Loan was 8.34 % for the year ended December 31, 2024. As of December 31, 2023, the interest rate on the BofA Revolver was 8.47 % per annum. The weighted average variable interest rate on all amounts outstanding under the BofA Revolver through December 31, 2023 was approximately 8.05 % per annum. ​ F-22 Table of Contents The BofA Credit Agreement 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, use of net cash proceeds from the disposition of property, assets and equity issuances, mandatory prepayments, the requirement to have certain subsidiaries provide guarantees, the requirement to pledge the Company’s equity interests in certain subsidiaries as collateral, changes in business, certain restricted payments, repurchases and redemptions of the Company’s common stock, going concern qualifications to the Company’s financial statements, and transactions with affiliates. In addition, the BofA Credit Agreement also restricts the Company’s ability to make quarterly dividend distributions that exceed $ 0.01 per share of the Company’s common stock; provided, however, that notwithstanding such restriction, the Company is permitted to make dividend distributions based on the Company’s good faith estimate of projected or estimated taxable income or otherwise as necessary to retain the Company’s status as a real estate investment trust, to meet the distribution requirements of Section 857 of the Internal Revenue Code or to eliminate any income or excise taxes to which the Company would otherwise be subject. The BofA Credit Agreement 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 maximum secured recourse leverage ratio, a minimum fixed charge coverage ratio, a maximum unencumbered leverage ratio, and minimum unsecured interest coverage. The Company was in compliance with the BofA Term Loan financial covenants as of December 31, 2024. ​ The BofA Credit Agreement provides for customary events of default with corresponding grace periods, including failure to pay any principal or interest when due, failure to comply with the provisions of the BofA Credit Agreement, certain cross defaults and a change in control of the Company (as defined in the BofA Credit Agreement). In the event of a default by the Company, BofA, in its capacity as administrative agent, may, and at the request of the requisite number of lenders shall, declare all obligations under the BofA Credit Agreement immediately due and payable and enforce any and all rights of the lenders or BofA under the BofA Credit Agreement and related documents. For certain events of default related to bankruptcy, insolvency, and receivership, all outstanding obligations of the Company will become immediately due and payable. ​ Senior Notes ​ As of December 31, 2024, the Company has senior notes in the aggregate principal amount of approximately $ 123.6 million (the “Senior Notes”) that mature on April 1, 2026. The Senior Notes consist of (i) Series A Senior Notes due April 1, 2026 in an aggregate principal amount of approximately $ 71.7 million (the “Series A Notes”) and (ii) Series B Senior Notes due April 1, 2026 in the aggregate principal amount of approximately $ 51.9 million (the “Series B Notes”). On February 21, 2024, the Company amended the terms of the Senior Notes by entering into a First Amendment to Note Purchase Agreement (the “NPA First Amendment”) with the purchasers party thereto. The NPA First Amendment amended the Note Purchase Agreement dated October 24, 2017 (the “Original Note Purchase Agreement”) to, among other things: (1) extend the maturity date of the Series A Notes from December 20, 2024 to April 1, 2026; (2) shorten the maturity date of the Series B Notes from December 20, 2027 to April 1, 2026; (3) increase the interest rate applicable to the Series A Notes from 4.49 % per annum to 8.00 % per annum; (4) increase the interest rate applicable to the Series B Notes from 4.76 % per annum to 8.00 % per annum; (5) provide that, if, as of March 31, 2025, the aggregate principal amount outstanding under the BMO Term Loan, the BofA Term Loan and the Senior Notes exceeds $ 200 million, the per annum interest rates applicable to the Series A Note and the Series B Notes will permanently increase by 1.00 % from 8.00 % per annum to 9.00 % per annum; (6) require mandatory prepayments of the BMO Term Loan, the BofA Term Loan and the Senior Notes with net cash proceeds from the disposition of property, assets and equity issuances as follows: (a) 25.55556 % to the BMO Term Loan; (b) 20.00000 % to the BofA Term Loan; (c) 44.44444 % to the Senior Notes; and (d) the remaining 10 % to be retained by the Company; (7) require that, within 90 days of the February 21, 2024 effective date of the NPA First Amendment, certain of the Company’s subsidiaries guarantee the Senior Notes; (8) require that, within 90 days of the February 21, 2024 effective date of the NPA First Amendment, the Company pledge its equity interests in certain of the Company’s subsidiaries as collateral for the Senior Notes; and (9) conform all financial covenants and negative covenants in the Note Purchase Agreement with the BofA Credit Agreement and the BMO Credit Agreement. The Original Note Purchase Agreement, as amended by the NPA First Amendment, is referred to as the Note Purchase Agreement. ​ On February 21, 2024, as part of the NPA First Amendment, the Company repaid an approximately $ 29.2 million portion of the Series A Notes and an approximately $ 21.2 million portion of the Series B Notes. On July 10, 2024, the F-23 Table of Contents Company repaid an approximately $ 7.2 million portion of the Series A Notes and an approximately $ 5.3 million portion of the Series B Notes from asset sale proceeds of a property located in Glen Allen, Virginia. On October 25, 2024, the Company repaid an approximately $ 7.8 million portion of the Series A Notes and an approximately $ 5.7 million portion of the Series B Notes from asset sale proceeds of a property located in Atlanta, Georgia. As of December 31, 2024, approximately $ 71.7 million aggregate principal amount of the Series A Notes remained outstanding and approximately $ 51.9 million aggregate principal amount of the Series B Notes remained outstanding. ​ As of December 31, 2024, the interest rate on the Series A Notes was 8.00 % per annum and the interest rate on the Series B Notes was 8.00 % per annum. As of December 31, 2023, the interest rate on the Series A Notes was 4.49 % per annum and the interest rate on the Series B Notes was 4.76 % per annum. ​ The Note Purchase Agreement contains customary affirmative and negative covenants, including limitations with respect to indebtedness, liens, investments, mergers and acquisitions, disposition of assets, use of net cash proceeds from the disposition of property, assets and equity issuances, mandatory prepayments, the requirement to have certain subsidiaries provide guarantees, the requirement to pledge the Company’s equity interests in certain subsidiaries as collateral, changes in business, certain restricted payments, repurchases and redemptions of the Company’s common stock, going concern qualifications to the Company’s financial statements, transactions with affiliates, certain restrictions on severance, retention and similar arrangements applicable to the Company’s executive officers, and real estate investment trust compliance requirements. In addition, the Note Purchase Agreement also restricts the Company’s ability to make quarterly dividend distributions that exceed $ 0.01 per share of the Company’s common stock; provided, however, that notwithstanding such restriction, the Company is permitted to make dividend distributions based on the Company’s good faith estimate of projected or estimated taxable income or otherwise as necessary to retain the Company’s status as a real estate investment trust, to meet the distribution requirements of Section 857 of the Internal Revenue Code or to eliminate any income or excise taxes to which the Company would otherwise be subject. The Note Purchase Agreement 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 maximum secured recourse leverage ratio, a minimum fixed charge coverage ratio, a maximum unencumbered leverage ratio, and minimum unsecured interest coverage. The Company was in compliance with the Note Purchase Agreement financial covenants as of December 31, 2024. ​ The Note Purchase Agreement contains customary events of default, including payment defaults, cross defaults with certain other indebtedness, breaches of covenants and bankruptcy events. In the case of an event of default, the purchasers may, among other remedies, accelerate the payment of all obligations. ​ 5. Financial Instruments: Derivatives and Hedging ​ On February 20, 2019, the Company entered into interest rate swap transactions 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 2019 BMO Interest Rate Swap is described in Note 3. On February 8, 2023, the Company terminated the 2019 BMO Interest Rate Swap applicable to the BMO Term Loan and, on February 10, 2023, the Company received an aggregate of approximately $ 4.3 million as a result of such terminations, of which approximately $ 0.1 million related to interest receivable. As of December 31, 2024 and December 31, 2023, there were no derivative instruments. ​ The 2019 BMO Interest Rate Swap qualified as a cash flow hedge and has been recognized on the consolidated balance sheets at fair value. If a derivative qualifies as a hedge, depending on the nature of the hedge, changes in the fair value of the derivative will either be offset against the change in fair value of the hedged asset, liability, or firm commitment through earnings, or recognized in other comprehensive income until the hedged item is recognized in earnings. 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. ​ F-24 Table of Contents The gain/(loss) on the 2019 BMO Interest Rate Swap that was recorded in OCI and the accompanying consolidated statements of income as a component of interest expense for the years ended December 31, 2024, 2023 and 2022, respectively, was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (in thousands) ​ Year Ended December 31, Interest Rate Swaps in Cash Flow Hedging Relationships: 2024 2023 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amounts of gain recognized in OCI ​ $ — ​ $ 177 ​ $ 8,451 Amounts of previously recorded gain (loss) reclassified from OCI into Interest Expense ​ $ 355 ​ $ 4,180 ​ $ ( 1,146 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total amount of Interest Expense presented in the consolidated statements of operations ​ $ 26,424 ​ $ 24,318 ​ $ 22,808 ​ Over time, the realized gains in accumulated other comprehensive income were reclassified into earnings as a decrease to interest expense in the same periods in which the hedged interest payments affected earnings. ​ The Company hedged the exposure to variability in anticipated future interest payments on existing debt. ​ ​ 6. Stockholders’ Equity ​ Equity-Based Compensation ​ On May 20, 2002, the stockholders of the Company approved the 2002 Stock Incentive Plan (the “Plan”). The Plan is an equity-based incentive compensation plan, and provides for the grants of up to a maximum of 2,000,000 shares of the Company’s common stock (“Awards”). All of the Company’s employees, officers, directors, consultants and advisors are eligible to be granted Awards. Awards under the Plan are made at the discretion of the Company’s Board of Directors, and have no vesting requirements. 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 May 31, 2024, May 18, 2023 and May 17, 2022, the Company granted shares under the Plan to non-employee directors with the compensation cost related to such grants indicated in the table below, which was recognized during the years ended December 31, 2024, 2023 and 2022, respectively, and is included in general and administrative expenses in the consolidated statements of income for such periods. Such shares were fully vested on the date of issuance. ​ ​ ​ ​ ​ ​ ​ ​ ​ Shares Available ​ Compensation ​ ​ for Grant ​ Cost ​ ​ ​ ​ ​ ​ ​ Balance December 31, 2021 ​ ​ 1,780,820 ​ $ 1,012,500 Shares granted 2022 ​ ​ ( 84,133 ) ​ ​ 393,750 Balance December 31, 2022 ​ ​ 1,696,687 ​ $ 1,406,250 Shares granted 2023 ​ ​ ( 194,439 ) ​ ​ 314,991 Balance December 31, 2023 ​ ​ 1,502,248 ​ ​ 1,721,241 Shares granted 2024 ​ ​ ( 136,362 ) ​ ​ 269,997 Balance December 31, 2024 ​ ​ 1,365,886 ​ $ 1,991,238 ​ ​ ​ ​ ​ ​ ​ ​ 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 repurchased 846,739 shares of common stock during the first quarter of 2022 at an aggregate cost of approximately $ 4.8 million and at an average cost of approximately $ 5.72 per share, inclusive of brokerage F-25 Table of Contents commissions. The Company did not repurchase any shares of common stock during the remainder of 2022, 2023 or in 2024. On February 10, 2023, the Company announced it had discontinued the previous repurchase authorization made on June 23, 2021. The excess of the purchase price over the par value of the shares repurchased is applied to reduce additional paid-in capital. ​ A summary of the repurchase of common stock by the Company is shown in the following table: ​ ​ ​ ​ ​ ​ ​ ​ (Cost in thousands) ​ ​ Shares Repurchased ​ Cost Balance, December 31, 2021 ​ ​ 4,413,741 ​ $ 37,019 Repurchase of shares ​ ​ 846,739 ​ ​ 4,843 Balance, December 31, 2022 ​ ​ 5,260,480 ​ $ 41,862 ​ ​ ​ ​ ​ ​ ​ ​ ​ 7. Federal Income Tax Reporting ​ General ​ The Company has elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended (the “Code”). As a REIT, the Company generally is entitled to a tax deduction for distributions paid to its shareholders, thereby effectively subjecting the distributed net income of the Company to taxation at the shareholder level only. The Company must comply with a variety of restrictions to maintain its status as a REIT. These restrictions include the type of income it can earn, the type of assets it can hold, the number of shareholders it can have and the concentration of their ownership, and the amount of the Company’s taxable income that must be distributed annually. ​ One such restriction is that the Company generally cannot own more than 10 % of the voting power or value of the securities of any one issuer unless the issuer is itself a REIT or a taxable REIT subsidiary (“TRS”). In the case of TRSs, the Company’s ownership of securities in all TRSs generally cannot exceed 20 % ( 25 % of taxable years beginning on or before December 31, 2017) of the value of all of the Company’s assets and, when considered together with other non-real estate assets, cannot exceed 25 % of the value of all of the Company’s assets. FSP Investments LLC and FSP Protective TRS Corp. 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 $ 4.9 million and $ 4.9 million as of December 31, 2024 and 2023, respectively. The NOLs created prior to 2018 will expire between 2030 and 2047 and the NOLs generated after 2017 will not expire. 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. ​ Income taxes are recorded based on the future tax effects of the difference between the tax and financial reporting bases of the Company’s assets and liabilities. In estimating future tax consequences, potential future events are considered except for potential changes in income tax law or in rates. ​ The Company adopted an accounting pronouncement related to uncertainty in income taxes effective January 1, 2007, which did not result in recording a liability, nor was any accrued interest and penalties recognized with the adoption. Accrued interest and penalties will be recorded as income tax expense if the Company records a liability in the future. The Company’s effective tax rate was not affected by the adoption. The Company and one or more of its subsidiaries files income tax returns in the U.S. federal jurisdiction and various state jurisdictions. The statute of limitations for the Company’s income tax returns is generally three years and as such, the Company’s returns that remain subject to examination would be primarily from 2021 and thereafter. ​ The Company is subject to a business tax known as the Revised Texas Franchise Tax. Some of the Company’s leases allow reimbursement by tenants for these amounts because the Revised Texas Franchise Tax replaces a portion of the property tax for school districts. 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 $ 0.2 million, $ 0.3 million and $ 0.2 million for the years ended December 31, 2024, 2023 and 2022, respectively. ​ F-26 Table of Contents Net operating losses ​ Section 382 of the Code restricts a corporation’s ability to use net operating losses (“NOLs”) to offset future taxable income following certain “ownership changes.” Such ownership changes occurred with past mergers and accordingly a portion of the NOLs incurred by the Company’s prior sponsored REITs available for use by the Company in any particular future taxable year will be limited. To the extent that the Company does not utilize the full amount of the annual NOLs limit, the unused amount may be carried forward to offset taxable income in future years. NOLs expire 20 years after the year in which they arise, and the last of the Company’s NOLs will expire in 2027. Approximately $ 0.4 million and $ 0.7 million of NOLs expired in 2024 and 2023, respectively. A valuation allowance is provided for the full amount of the gross NOLs available as the realization of any tax benefits remaining from such NOLs is not assured. The gross amount of NOLs available to the Company was approximately $ 95.8 million and $ 32.1 million as of December 31, 2024 and December 31, 2023, respectively. ​ Income Tax Expense ​ The income tax expense reflected in the consolidated statements of income relates primarily to state income taxes as a result of some states that limit the use of net operating losses, which are in Other Taxes, and to a lesser extent, the Revised Texas Franchise Tax. FSP Protective TRS Corp. provides taxable services to tenants at some of the Company’s properties. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, (Dollars in thousands) 2024 2023 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revised Texas Franchise Tax ​ $ 216 ​ $ 279 ​ $ 239 ​ Other Taxes ​ — ​ — ​ ( 35 ) ​ Tax expense ​ $ 216 ​ $ 279 ​ $ 204 ​ ​ Taxes on income are a current tax expense. No deferred income taxes were provided as there were no material temporary differences between the financial reporting basis and the tax basis of the TRSs. ​ At December 31, 2024, the Company’s net tax basis of its real estate assets is more than the amount set forth in the Company’s consolidated balance sheets by $ 145.6 million and at December 31, 2023, the Company’s net tax basis of its real estate assets is more than the amount set forth in the Company’s consolidated balance sheets by $ 144.4 million. ​ Tax Components ​ The following summarizes the tax components of the Company’s common distributions paid per share for the years ended December 31, 2024, 2023 and 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 ​ 2023 ​ 2022 ​ Per Share % Per Share % Per Share % Ordinary income ​ $ — — % $ — — % $ — — % Capital gain ​ — — % — — % 0.14 70 % Return of capital ​ 0.04 100 % 0.04 100 % 0.06 30 % Total ​ $ 0.04 100 % $ 0.04 100 % $ 0.20 100 % ​ ​ 8. Leases ​ Leases as a Lessee: ​ The Company entered into a noncancelable contract with a third party to obtain office space that commenced on September 1, 2010. The contract was amended on October 25, 2016 to extend the contract through September 30, 2024 and amended again on February 7, 2024 to extend the contract through September 30, 2026. As of December 31, 2024 and December 31, 2023, the Company’s right-of-use asset was $ 0.7 million and $ 0.3 million, respectively, which is F-27 Table of Contents included in prepaid and other assets on the consolidated balance sheet. A discount rate equal to the Company’s incremental borrowing rate was applied to the future monthly contractual lease payments remaining as of December 31, 2024 to compute the lease liability. The incremental borrowing rate is the rate equal to the closest borrowing under the BofA Revolver at the time of the February 7, 2024 lease amendment. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Lease Costs ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, (in thousands) ​ 2024 ​ 2023 ​ 2022 Operating lease cost $ 411 ​ $ 419 ​ $ 419 ​ $ 411 ​ $ 419 ​ $ 419 ​ ​ ​ ​ ​ ​ ​ ​ ​ Other information ​ ​ ​ ​ ​ ​ ​ ​ Cash paid for amounts included in the measurement of lease liabilities $ 412 ​ $ 447 ​ $ 438 Weighted average remaining lease terms in years - operating leases ​ 1.75 ​ ​ 0.75 ​ ​ 1.75 Weighted average discount rate - operating leases ​ 8.44 % ​ ​ 3.86 % ​ ​ 3.86 % ​ ​ ​ ​ ​ ​ ​ ​ ​ Maturity analysis for liabilities Total ​ ​ ​ ​ ​ Undiscounted ​ ​ ​ ​ ​ ​ (in thousands) Cash Flows ​ ​ ​ ​ ​ ​ Discount rate at commencement ​ 8.44 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 $ 436 ​ ​ ​ ​ ​ ​ 2026 ​ 327 ​ ​ ​ ​ ​ ​ ​ $ 763 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Present value lease liability $ 707 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Difference between undiscounted cash flows and discounted cash flows $ 56 ​ ​ ​ ​ ​ ​ ​ Leases as a Lessor: ​ The Company is a lessor of commercial real estate with operations that include the leasing of office 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. 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. The Company’s strategy to address its risk for the residual value in its commercial real estate is to re-lease the commercial space. ​ The Company has elected to apply the practical expedient to not separate non-lease components from the related lease component of real estate leases. This combined component is primarily comprised of fixed lease payments, early termination fees, common area maintenance cost reimbursements, and parking lease payments. The Company applies ASC 842, Leases, to the combined lease and non-lease components. ​ F-28 Table of Contents For the years ended December 31, 2024, 2023 and 2022, the Company recognized the following amounts of income relating to lease payments: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income relating to lease payments: ​ ​ ​ ​ For the Year Ended December 31, (in thousands) 2024 ​ 2023 2022 Income from leases (1) ​ $ 122,032 ​ $ 146,027 ​ $ 157,719 ​ ​ $ 122,032 ​ $ 146,027 ​ $ 157,719 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Undiscounted Cash Flows Year ending ​ ​ ​ ​ ​ ​ (in thousands) ​ December 31, ​ ​ ​ ​ ​ ​ 2025 ​ ​ 69,392 ​ ​ ​ ​ ​ ​ 2026 ​ ​ 64,321 ​ ​ ​ ​ ​ ​ 2027 ​ ​ 54,286 ​ ​ ​ ​ ​ ​ 2028 ​ ​ 48,479 ​ ​ ​ ​ ​ ​ 2029 ​ ​ 40,699 ​ ​ ​ ​ ​ ​ 2030 and thereafter ​ 113,033 ​ ​ ​ ​ ​ ​ ​ ​ $ 390,210 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) Includes amounts recognized from variable lease payments of $ 35,413 , $ 42,311 , and $ 49,730 for the year ended December 31, 2024, 2023 and 2022, respectively. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 9. Retirement Plan ​ In 2006, the Company established a 401(k) plan to cover eligible employees, which permitted deferral of up to $ 17,000 per year (indexed for inflation) into the 401(k) plan, subject to certain limitations imposed by the Internal Revenue Code. An employee’s elective deferrals are immediately vested upon contribution to the 401(k) plan. The Company matches employee contributions to the 401(k) plan dollar for dollar up to 3 % of each employee’s annual compensation up to $ 200,000 . In addition, we may elect to make an annual discretionary profit-sharing contribution. The Company’s total contribution under the 401(k) plan amounted to $ 0.1 million, $ 0.1 million and $ 0.1 million for the years ended December 31, 2024, 2023 and 2022, respectively. ​ 10. Dispositions of Property ​ In 2024, the Company sold an office property located in Richardson, Texas on January 26, 2024, for a gross sales price of $ 35 million. The property was classified as held for sale as of December 31, 2023, and an impairment of $ 2.1 million had been recorded during the year ended December 31, 2023. An additional $ 5,000 of costs related to the sale were recorded during the three months ended March 31, 2024. During the three months ended June 30, 2024, the Company entered into an agreement to sell a property in Glen Allen, Virginia for a gross sales price of approximately $ 31.0 million and an expected loss of $ 13.2 million, which was recorded as an impairment. The property was sold on July 8, 2024, at the expected loss. During the three months ended September 30, 2024, the Company recorded an additional $ 0.7 million in costs related to the sale of properties previously sold. During the three months ended September 30, 2024, the Company entered into an agreement to sell a property in Atlanta, Georgia, which was classified as an asset held for sale during 2023. The Company increased the expected loss on this property by $ 6.6 million to $ 27.2 million when the Company entered into this new agreement to sell the property for a gross sales price of $ 34.0 million. The property sold on October 23, 2024, with a $ 0.4 million increase to loss from final sales adjustments on the date of sale. ​ In 2023, the Company sold one office property located in Elk Grove, Illinois on March 10, 2023, for a gross sales price of $ 29.1 million, at a gain of approximately $ 8.4 million. The Company used the proceeds of the disposition principally to repay a portion of outstanding indebtedness. The Company sold one office property located in Charlotte, North Carolina on August 9, 2023 for a gross sales price of $ 9.2 million, at a loss of $ 0.8 million. During the three months ended September 30, 2023, the Company recorded a gain on sale of $ 53,000 as a result of conveying approximately F-29 Table of Contents 7,826 square feet of land at the Company’s Addison, Texas property to the Town of Addison as part of a road revitalization project. ​ During the three months ended September 30, 2023, the Company reclassified $ 96.4 million of its office properties in Miami, Florida and Atlanta, Georgia as assets held for sale as of September 30, 2023. The Company recorded these properties at the fair value less cost to sell, which was less than the carrying value and resulted in an impairment of $ 39.7 million in the three months ended September 30, 2023. The reclassification was a non-cash investing activity on the statement of cash flows. The Company estimated the fair value of these properties, less estimated costs to sell, using the offers to purchase the properties made by third parties (Level 3 inputs, as there is no active market). ​ During the three months ended September 30, 2023, the Company entered into an agreement to sell a property in Plano, Texas for a gross sales price of approximately $ 48.0 million, at an expected gain of $ 10.6 million. The Company reclassified $ 36.2 million of this office property as an asset held for sale as of September 30, 2023. The reclassification was a non-cash investing activity on the statement of cash flows. On October 26, 2023, the Company completed the sale of the property located in Plano, Texas for a gross sales price of $ 48.0 million at a gain of approximately $ 10.6 million. On December 6, 2023, the Company sold another of the assets held for sale, an office property located in Miami, Florida for a sales price of $ 68.0 million at a loss of approximately $ 18.9 million. ​ The asset held for sale located in Atlanta, Georgia, was expected to sell for a gross sales price of $ 40.0 million at a loss of approximately $ 20.5 million, which was recorded as an impairment as of September 30, 2023, however on November 15, 2023, the Company received notice from the buyer indicating that the buyer was terminating the transaction and directing the deposit and interest be disbursed to the Company. At December 31, 2023, the office property remained classified on the consolidated balance sheet as an asset held for sale in the amount of $ 39.0 million and was comprised of $ 52.2 million of real estate assets, net of accumulated depreciation, $ 4.4 million of straight-line rents receivable, and $ 2.9 million of deferred leasing commissions, net of accumulated amortization. The Company expects the property will be sold within the next twelve months. ​ During the three months ended September 30, 2023, the Company entered into a purchase and sale agreement, which was subsequently amended, to sell a property located in Richardson, Texas for a gross sales price of $ 35.0 million. During the three months ended December 31, 2023, the Company recorded this property at the fair value less cost to sell, which was less than the carrying value and resulted in an impairment of $ 2.1 million. The Company reclassified $ 34.4 million of this office property as an asset held for sale, which comprised of $ 31.1 million in real estate assets, net of accumulated depreciation, $ 3.4 million in straight-line rents receivable, and $ 2.0 million in deferred leasing commissions, net of accumulated amortization. ​ In 2022, the Company sold two office properties located in Broomfield, Colorado on August 31, 2022 for an aggregate gross sales price of $ 102.5 million, at a gain of approximately $ 24.1 million. The Company sold an office property located in Evanston, Illinois on December 28, 2022 for a sales price of $ 27.8 million, at a gain of approximately $ 3.9 million. The Company used the proceeds of the dispositions principally to repay outstanding indebtedness. ​ The Company concluded the dispositions did not represent a strategic shift and reports the results of operations of its properties in its consolidated statements of operations, which includes rental income, rental operating expenses, real estate taxes and insurance and depreciation and amortization. ​ F-30 Table of Contents The operating results for the properties that the Company disposed of or classified as assets held for sale are summarized below: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, (in thousands) 2024 2023 ​ 2022 Rental revenue ​ $ 7,319 ​ $ 29,837 ​ $ 45,762 Rental operating expenses ​ ( 2,988 ) ​ ( 9,773 ) ​ ( 14,684 ) Real estate taxes and insurance ​ ( 324 ) ​ ( 4,316 ) ​ ( 10,449 ) Depreciation and amortization ​ ( 832 ) ​ ( 8,599 ) ​ ( 16,114 ) Income from dispositions and assets held for sale ​ $ 3,175 ​ $ 7,149 ​ $ 4,515 ​ ​ ​ 11. Segment Information ​ The Company is a REIT focused on real estate investments primarily in the office market and currently operates in one segment: real estate operations. Each of the Company’s properties qualify as an operating segment but are aggregated together because they exhibit similar economic characteristics and operating similarities. ​ The chief operating decision maker (CODM) of the Company is the Company’s Chief Executive Officer. The CODM measures the performance and profit or loss for the Company’s reportable segment using a measure referred to as Segment Net Operating Income (Segment NOI). The CODM utilizes Segment NOI when considering the deployment of the Company’s capital resources on a property-by-property basis. The significant expense categories which the Company’s CODM examines when measuring the segment’s performance include real estate operating expenses and real estate taxes and insurance. Asset information by segment is not reported because the Company does not use this measure to assess performance. The total assets of the Company’s reportable segment can be found on the Company’s consolidated balance sheets. ​ Segment NOI is a non-GAAP financial measure that the Company defines as net income or loss (the most directly comparable GAAP financial measure) plus selling, general and administrative expenses, depreciation and amortization, including amortization of acquired above and below market lease intangibles and impairment charges, interest expense, less equity in earnings of nonconsolidated REITs, interest income, hedge ineffectiveness, gains or losses on the sale of assets and excludes income taxes. Segment NOI, as defined by the Company, may not be comparable to NOI reported by other REITs that define NOI differently. Segment NOI should not be considered an alternative to net income or loss as an indication of our performance or to cash flows as a measure of the Company’s liquidity or its ability to make distributions. ​ The calculations of Segment NOI are shown in the following table: F-31 Table of Contents ​ Segment Net Operating Income (NOI) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ Year Ended ​ Year Ended (in thousands) 31-Dec-24 31-Dec-23 ​ 31-Dec-22 Total consolidated revenues ​ $ 120,112 ​ $ 145,707 ​ $ 165,615 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Reconciling items: ​ ​ ​ ​ ​ ​ ​ ​ ​ Amortization of above/below market leases ​ ​ ( 17 ) ​ ​ ( 44 ) ​ ​ ( 118 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Less: ​ ​ ​ ​ ​ ​ ​ ​ ​ Real estate operating expenses ​ ​ 45,043 ​ ​ 50,732 ​ ​ 52,820 Real estate taxes and insurance ​ ​ 22,716 ​ ​ 27,200 ​ ​ 34,620 Segment NOI ​ $ 52,336 $ 67,731 ​ $ 78,057 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ Year Ended ​ ​ Year Ended Reconciliation to Net Income (Loss) ​ ​ 31-Dec-24 ​ ​ 31-Dec-23 ​ ​ 31-Dec-22 Net income (loss) $ ( 52,723 ) $ ( 48,110 ) ​ ​ 1,094 Add (deduct): ​ ​ ​ ​ ​ ​ ​ ​ ​ Loss on extinguishment of debt ​ ​ 1,042 ​ ​ 106 ​ ​ 78 Gain on consolidation of Sponsored REIT ​ — ​ ( 394 ) ​ ​ — Impairment and loan loss reserve ​ ​ — ​ ​ — ​ ​ 4,237 (Gain) loss on sale of properties and impairment of assets held for sale, net ​ 20,826 ​ 23,384 ​ ​ ( 27,939 ) Depreciation and amortization ​ 44,774 ​ 54,738 ​ ​ 63,808 Amortization of above/below market leases ​ ( 17 ) ​ ( 44 ) ​ ​ ( 118 ) General and administrative ​ 13,884 ​ 14,021 ​ ​ 13,885 Interest expense ​ 26,424 ​ 24,318 ​ ​ 22,808 Interest income ​ ( 2,090 ) ​ ( 567 ) ​ ​ — Tax expense ​ ​ 216 ​ 279 ​ ​ 204 Segment NOI $ 52,336 $ 67,731 ​ $ 78,057 ​ ​ ​ ​ ​ 12. Subsequent Events ​ On January 10, 2025 , the Board of Directors of the Company declared a cash distribution of $ 0.01 per share of common stock payable on February 13, 2025 , to stockholders of record on January 24, 2025 . ​ ​ ​ ​ ​ ​ ​ F-32 Table of Contents ​ ​ Schedule II ​ Franklin Street Properties Corp. Valuation and qualifying accounts: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additions ​ ​ ​ ​ ​ ​ ​ (Decreases) ​ ​ ​ ​ ​ ​ ​ ​ Balance at ​ charged to ​ ​ ​ ​ Balance (in thousands) ​ beginning ​ costs and ​ ​ ​ ​ at end Classification ​ of year ​ expenses ​ Deductions ​ of year ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Allowance for doubtful accounts ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 ​ $ 533 ​ ( 38 ) ​ ( 478 ) ​ 17 ​ 2023 ​ 17 ​ ( 9 ) ​ — ​ 8 ​ 2024 ​ 8 ​ ( 8 ) ​ — ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Allowance for credit losses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 ​ $ — ​ 4,237 ​ — ​ 4,237 ​ 2023 ​ 4,237 ​ ( 4,237 ) ​ — ​ — ​ 2024 ​ — ​ — ​ — ​ — ​ ​ ​ ​ ​ ​ F-33 Table of Contents SCHEDULE III FRANKLIN STREET PROPERTIES CORP. REAL ESTATE AND ACCUMULATED DEPRECIATION December 31, 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Initial Cost ​ Historical Cost ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Costs ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Capitalized ​ ​ ​ ​ Buildings ​ ​ ​ ​ ​ ​ ​ Total Costs, ​ ​ ​ ​ ​ ​ ​ ​ (in thousands) ​ ​ ​ ​ ​ ​ Buildings ​ (Disposals) ​ ​ ​ ​ Improvements ​ ​ ​ ​ ​ ​ ​ Net of ​ Depreciable ​ ​ ​ Date of ​ ​ Encumbrances ​ ​ ​ ​ Improvements ​ Subsequent to ​ ​ ​ ​ and ​ ​ ​ ​ Accumulated ​ Accumulated ​ Life ​ Year ​ Acquisition Description ​ (1) ​ Land ​ and Equipment ​ Acquisition ​ Land ​ Equipment ​ Total (2) ​ Depreciation ​ Depreciation ​ Years ​ Built ​ (3) ​ ​ (in thousands) Commercial Properties: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Park Ten, Houston, TX — ​ 1,061 ​ 21,303 ​ 8,150 ​ 565 ​ 29,949 ​ 30,514 ​ 15,549 ​ 14,965 5 - 39 1999 2002 ​ Addison, Addison, TX — ​ 4,325 ​ 48,040 ​ 14,489 ​ 4,325 ​ 62,529 ​ 66,854 ​ 32,544 ​ 34,310 5 - 39 1999 2002 ​ Greenwood, Englewood, CO — ​ 3,100 ​ 30,201 ​ 13,165 ​ 3,100 ​ 43,366 ​ 46,466 ​ 21,140 ​ 25,326 5 - 39 2000 2005 ​ Eldridge Green, Houston, TX — ​ 3,900 ​ 43,791 ​ 12,423 ​ 3,900 ​ 56,214 ​ 60,114 ​ 25,615 ​ 34,499 5 - 39 1999 2004 ​ Liberty Plaza, Addison, TX — ​ 4,374 ​ 21,146 ​ 12,958 ​ 4,279 ​ 34,199 ​ 38,478 ​ 16,245 ​ 22,233 5 - 39 1985 2006 ​ Park Ten II, Houston, TX — ​ 1,300 ​ 31,712 ​ 7,261 ​ 1,300 ​ 38,973 ​ 40,273 ​ 18,421 ​ 21,852 5 - 39 2006 2006 ​ 121 South Eight Street, Minneapolis, MN — ​ 4,444 ​ 15,214 ​ 29,762 ​ 4,444 ​ 44,976 ​ 49,420 ​ 17,736 ​ 31,684 5 - 39 1974 2010 ​ 801 Marquette Ave South, Minneapolis, MN ​ — ​ 4,184 ​ — ​ 28,318 ​ 4,184 ​ 28,318 ​ 32,502 ​ 8,087 ​ 24,415 5 - 39 1923 2010 ​ Legacy Tennyson Center, Plano, TX — ​ 3,067 ​ 22,064 ​ 7,115 ​ 3,067 ​ 29,179 ​ 32,246 ​ 10,138 ​ 22,108 5 - 39 2008 2011 ​ Westchase I & II, Houston, TX — ​ 8,491 ​ 121,508 ​ 26,557 ​ 8,491 ​ 148,065 ​ 156,556 ​ 46,948 ​ 109,608 5 - 39 2008 2012 ​ 1999 Broadway, Denver CO — ​ 16,334 ​ 137,726 ​ 44,326 ​ 16,334 ​ 182,052 ​ 198,386 ​ 58,083 ​ 140,303 5 - 39 1986 2013 ​ 1001 17th Street, Denver, CO — ​ 17,413 ​ 165,058 ​ 42,904 ​ 17,413 ​ 207,962 ​ 225,375 ​ 60,394 ​ 164,981 5 - 39 2006 2013 ​ Plaza Seven, Minneapolis, MN ​ — ​ 6,604 ​ 54,240 ​ 15,228 ​ 6,604 ​ 69,468 ​ 76,072 ​ 18,814 ​ 57,258 5 - 39 1987 2016 ​ 600 17th Street, Denver, CO ​ — ​ 20,876 ​ 99,941 ​ 18,848 ​ 20,876 ​ 118,789 ​ 139,665 ​ 27,312 ​ 112,353 5 - 39 1982 2016 ​ Monument Circle, Indianapolis, IN ​ ​ ​ ​ 6,416 ​ ​ 13,279 ​ ​ — ​ ​ 6,416 ​ ​ 13,279 ​ ​ 19,695 ​ ​ 682 ​ ​ 19,013 ​ 5 - 39 ​ 1992 ​ 2023 ​ Balance — Real Estate — ​ $ 105,889 ​ $ 825,223 ​ $ 281,504 ​ $ 105,298 ​ $ 1,107,318 ​ $ 1,212,616 ​ $ 377,708 ​ $ 834,908 ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) There are no encumbrances on the above properties. (2) The aggregate cost for Federal Income Tax purposes is $ 1,360,898 . (3) Original date of acquisition by Sponsored Entity. ​ ​ ​ F-34 Table of Contents The following table summarizes the changes in the Company’s real estate investments and accumulated depreciation: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, (in thousands) 2024 2023 2022 Real estate investments, at cost: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance, beginning of year ​ $ 1,257,173 ​ $ 1,526,665 ​ $ 1,615,457 ​ Acquisitions ​ — ​ 19,695 ​ — ​ Improvements ​ 20,535 ​ 29,194 ​ 60,132 ​ Assets held for sale ​ — ​ ( 118,644 ) ​ — ​ Dispositions ​ ( 65,092 ) ​ ( 199,737 ) ​ ( 148,924 ) ​ Balance, end of year - Real Estate ​ $ 1,212,616 ​ $ 1,257,173 ​ $ 1,526,665 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated depreciation: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance, beginning of year ​ $ 366,349 ​ $ 423,417 ​ $ 424,487 ​ Depreciation ​ 37,746 ​ 45,558 ​ 52,208 ​ Assets held for sale ​ — ​ ( 35,399 ) ​ — ​ Dispositions ​ ( 26,387 ) ​ ( 67,227 ) ​ ( 53,278 ) ​ Balance, end of year - Accumulated Depreciation ​ $ 377,708 ​ $ 366,349 ​ $ 423,417 ​ ​ ​ ​ ​ F-35