Franklin Street Properties Corp. Annual Report 2024

FY2024 Annual Report · Franklin Street Properties Corp.

Loading PDF…

Franklin Street Properties
2024 Annual Report

Franklin Street Properties Corp. (FSP) (NYSE American: FSP) is a real estate investment trust (REIT)
focused on infill and central business district (CBD) office properties in the U.S. Sunbelt and Mountain
West, as well as select opportunistic markets. FSP seeks value-oriented investments with an eye
towards long-term growth and appreciation, as well as current income. FSP’s principal revenue sources
from real estate operations include rental income from real estate leasing, property dispositions
and fee income from asset/property management and development. As of December 31, 2024,
FSP’s directly owned real estate portfolio of 14 owned properties was approximately 70.3% leased.

This Annual Report contains “forward-looking statements” within the meaning of federal securities laws, including Section
21E of the Securities Exchange Act of 1934, as amended. For more information, please refer to the discussion in the first
paragraph of Part II, Item 7 in the attached Annual Report on Form 10-K for the year ended December 31, 2024.
COVER PROPERTY: 1999 BROADWAY - DENVER, CO

ABOVE PROPERTY: ADDISON CIRCLE ONE - ADDISON, TX
Franklin Street Properties Corp.

During the twelve months ended December 31, 2024, we leased approximately 616,000 square feet of office
space, including 171,000 square feet of new leases. Our directly-owned real estate portfolio, consisting of 14
properties totaling approximately 4.8 million square feet, was approximately 70.3% leased as of year end 2024.
The weighted average GAAP base rent per square foot achieved on leasing activity during the year ended
December 31, 2024 was $30.06, or 8.2% higher than average rents in the respective properties for the year ended
December 31, 2023. The average lease term on leases signed during the year ended December 31, 2024 was 6.3
years, compared to 6.8 years during the year ended December 31, 2023. Overall, the portfolio weighted average
rent per occupied square foot was $31.77 as of December 31, 2024, compared to $30.72 as of December 31, 2023.
Since December of 2020, we have used net proceeds from property dispositions to reduce our total
indebtedness by approximately 75%, from approximately $1.0 billion as of December 31, 2020 to approximately
$250 million as of December 31, 2024. During 2024, we sold properties in Richardson, Texas; Glen Allen,
Virginia; and Atlanta, Georgia, reducing total liabilities by approximately $165.45 million, from approximately
$456.52 million as of December 31, 2023 to approximately $291.07 million as of December 31, 2024.
As we begin 2025, we are seeing a general increase in office activity. More employees are coming back to the
office, there are clearer, longer-term leasing requirements from larger tenants, and more capital is showing an
interest in potential lending and equity investing in office. If this current increase in office activity continues, it
could present us with better and more diverse opportunities to try and realize what we believe to be the intrinsic
value of our underlying real estate assets for stockholders.
Thank you for your continued support.
George J. Carter
Chairman and Chief Executive Officer
Fellow Stockholders

F o l l o w i n g i s t h e A n n u a l R e p o r t o n F o r m 1 0 - K
f o r t h e f i s c a l y e a r e n d e d D e c e m b e r 3 1 , 2 0 2 4

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File No. 001-32470
FRANKLIN STREET PROPERTIES CORP.
(Exact name of registrant as specified in its charter)

Maryland

04-3578653
(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification No.)

401 Edgewater Place, Suite 200, Wakefield, Massachusetts

01880
(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (781) 557-1300

Securities registered pursuant to Section 12(b) of the Act:

Title of each class:

Trading Symbol(s)

Name of each exchange on which registered:
Common Stock, $.0001 par value per share

FSP

NYSE American

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes  No .
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes  No .

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes ☒ No ☐.

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation
S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging
growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the
Exchange Act.

Large accelerated filer ☐

Accelerated filer ☒

Non-accelerated filer ☐

Smaller reporting company ☒
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or
revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over
financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing
reflect the correction of an error to previously issued financial statements. 
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any
of the registrant’s executive officers during the relevant recovery period pursuant to § 240.10D-1(b). 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒.

The aggregate market value of the voting and non-voting common equity held by non-affiliates based on the closing sale price as reported on NYSE American, as
of the last business day of the registrant’s most recently completed second fiscal quarter, June 30, 2024, was approximately $147,967,048.

There were 103,566,715 shares of common stock of the registrant outstanding as of February 7, 2025.

Documents incorporated by reference: The registrant intends to file a definitive proxy statement pursuant to Regulation 14A, promulgated under the Securities Exchange Act
of 1934, as amended, to be used in connection with the registrant’s Annual Meeting of Stockholders to be held on May 15, 2025 (the “Proxy Statement”). The information
required in response to Items 10 — 14 of Part III of this Form 10-K, other than that contained in Part I under the caption, “Information about our Executive Officers,” is
hereby incorporated by reference to the Proxy Statement.

TABLE OF CONTENTS

PART I

1
Item 1.

Business
1
Item 1A.
Risk Factors
8
Item 1B.
Unresolved Staff Comments
17
Item 1C.
Cybersecurity
18
Item 2.

Properties
19
Item 3.

Legal Proceedings
22
Item 4.

Mine Safety Disclosures
22

PART II

23
Item 5.

Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases
of Equity Securities
23

Stock Performance Graph
23
Item 6.

[Reserved]
24
Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations
24
Item 7A.
Quantitative and Qualitative Disclosures About Market Risk
44
Item 8.

Financial Statements and Supplementary Data
44
Item 9.

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
44
Item 9A.
Controls and Procedures
45
Item 9B.
Other Information
46
Item 9C.
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
46

PART III

47
Item 10.

Directors, Executive Officers and Corporate Governance
47
Item 11.

Executive Compensation
47
Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
47
Item 13.

Certain Relationships and Related Transactions, and Director Independence
47
Item 14.

Principal Accounting Fees and Services
47

PART IV

48
Item 15.

Exhibits and Financial Statement Schedules
48
Item 16

Form 10-K Summary
51

SIGNATURES
51

1
PART I

Item 1.
Business

History

Our company, Franklin Street Properties Corp., which we refer to as FSP Corp., the Company, we or our, is a
Maryland corporation that operates in a manner intended to qualify as a real estate investment trust, or REIT, for federal
income tax purposes. Our common stock is traded on the NYSE American under the symbol “FSP”. FSP Corp. is the
successor to Franklin Street Partners Limited Partnership, or the FSP Partnership, which was originally formed as a
Massachusetts general partnership in January 1997 as the successor to a Massachusetts general partnership that was
formed in 1981. On January 1, 2002, the FSP Partnership converted into FSP Corp., which we refer to as the conversion.
As a result of this conversion, the FSP Partnership ceased to exist and we succeeded to the business of the FSP
Partnership. In the conversion, each unit of both general and limited partnership interests in the FSP Partnership was
converted into one share of our common stock. As a result of the conversion, we hold, directly and indirectly, 100% of
the interest in three former subsidiaries of the FSP Partnership: FSP Investments LLC, FSP Property Management LLC,
and FSP Holdings LLC. We operate some of our business through these subsidiaries.

Our Business

We are a REIT focused on commercial real estate investments primarily in office markets and currently operate
in only one segment: real estate operations. The principal revenue sources for our real estate operations include rental
income from real estate leasing, property dispositions and fee income from asset/property management and development.

We invest in infill and central business district office properties in the United States sunbelt and mountain west
regions as well as select opportunistic markets. We believe that the United States sunbelt and mountain west regions
have macro-economic drivers that have the potential to increase occupancies and rents. We seek value-oriented
investments with an eye towards long-term growth and appreciation, as well as current income.

Previously we also operated in an investment banking segment, which was discontinued in December 2011.
Our investment banking segment generated brokerage commissions, loan origination fees, development services and
other fees related to the organization of single-purpose REITs that own real estate and the private placement of equity in
those entities.

From time-to-time we may acquire real estate or invest in real estate by making secured loans on real estate.
We may also pursue on a selective basis the sale of our properties to take advantage of the value creation and demand for
our properties, or for geographic or property specific reasons.

Real Estate

As of December 31, 2024, we owned and operated a portfolio of real estate consisting of 14 properties, which
we refer to as our owned properties, and a non-controlling common stock interest in the corporation that is the sole
member of FSP Monument Circle LLC, which was organized to operate as a real estate investment trust and which we
refer to as the Sponsored REIT or Monument Circle. The Sponsored REIT was consolidated in our financial statements
effective January 1, 2023. We refer to these 15 properties as our owned and consolidated properties. We derive rental
revenue from income paid to us by tenants of these properties. See Item 2 of this Annual Report on Form 10-K for more
information about our properties. From time-to-time we dispose of properties generating gains or losses in an ongoing
effort to improve and upgrade our portfolio and/or to repay a portion of our debt.

We provide asset management, property management, property accounting, investor and/or development
services to our portfolio and our Sponsored REIT through our subsidiaries FSP Investments LLC and FSP Property
Management LLC. Neither FSP Investments LLC nor FSP Property Management LLC receives any rental income.

2
Sustainability

As an owner of commercial real estate, a sector with significant environmental, social and governance, or ESG,
impact, we strive to maximize shareholder value through the prudent application of sound ESG strategies. Our efforts
have been awarded recognition from various third party review entities, such as GRESB, ENERGY STAR and LEED.

Long-Term Impact of COVID-19 Pandemic

Considerable uncertainty still surrounds the long-term impact of the COVID-19 pandemic and its potential
effects on the population, including the spread of more contagious variants of the virus, and on the commercial real
estate market and our business. Many of our tenants still do not fully occupy the space that they lease. The impact of the
COVID-19 pandemic continues to present material uncertainty and risk with respect to the performance of our properties
and our financial results, such as the potential negative impact to the businesses of our tenants, the impact of work-from-
home and return-to-work policies, the potential negative impact to leasing efforts and occupancy at our properties,
uncertainty regarding future rent collection levels or requests for rent concessions from our tenants, the occurrence of a
default under any of our debt agreements, the potential for increased borrowing costs, negative impacts on our ability to
refinance existing indebtedness or to secure new sources of capital on favorable terms, fluctuations in our level of
dividends, increased costs of operations, making more difficult our ability to complete required capital expenditures in a
timely manner and on budget, decreases in values of our real estate assets, changes in law and/or regulation, and
uncertainty regarding government and regulatory policy. We are unable to estimate the full extent of the long-term
impact that the COVID-19 pandemic will have on our future financial results at this time. See “Item 1A. Risk Factors”
and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” for additional
information.

Investment Objectives

Our investment objectives are to increase shareholder value by increasing revenue from rental, interest and fee
income and net gains from sales of properties and increase the cash available for distribution in the form of dividends to
our stockholders. We expect that we will continue to derive real estate revenue from owned properties.

We continue to believe that the current price of our common stock does not accurately reflect the intrinsic value
of our underlying real estate assets and we will seek to increase shareholder value by (1) pursuing the sale of select
properties where we believe that short to intermediate term valuation potential has been reached and (2) striving to lease
vacant space. As we continue to execute our strategy of select property dispositions and striving to lease vacant space,
our revenue, Funds From Operations, and capital expenditures may decrease. Proceeds from dispositions are intended to
be used primarily for the repayment of debt.

Although our property portfolio is focused on properties in the central business districts of Dallas, Denver,
Houston and Minneapolis, we may acquire, and have acquired, real properties in any geographic area of the United
States and of any property type. Our 15 owned and consolidated office properties are located in four different states as
of December 31, 2024. See Item 2 of this Annual Report on Form 10-K for more information about our properties. Our
investment objectives are to create shareholder value by increasing revenue from rental, dividend, interest and fee
income and net gains from sales of properties and increase the cash available for distribution in the form of dividends to
our stockholders. We expect that we will continue to derive real estate revenue from owned properties and the
Sponsored REIT fees from asset management, property management and investor services. We may also acquire
additional real properties.

As a result, from time to time, as market conditions warrant, we expect to sell properties owned by us. On
January 26, 2024, we sold an office property located in Richardson, Texas for a gross sales price of $35.0 million, at a
loss of approximately $2.1 million. On July 8, 2024, we sold a property in Glen Allen, Virginia for a gross sales price of
$31.0 million at a loss of $13.2 million. On October 23, 2024, we sold an office property located in Atlanta, Georgia for
a gross sales price of $34.0 million at a loss of $27.2 million. On March 10, 2023, we sold an office property located in
Elk Grove, Illinois for a gross sales price of $29.1 million, at a gain of approximately $8.4 million. On August 9, 2023,
we sold a property in Charlotte, North Carolina for a gross sales price of $9.2 million at a loss of $0.8 million. On

3
October 26, 2023, we sold an office property located in Plano, Texas for a gross sales price of $48 million at a gain of
$10.6 million. On December 6, 2023, we sold an office property located in Miami, Florida for a gross sales price of
$68.0 million at a loss of approximately $18.9 million. In 2022, we sold two office properties located in Broomfield,
Colorado for aggregate gross sales proceeds of $102.5 million at a gain of $24.1 million and one office property located
in Evanston, Illinois for gross sale proceeds of $27.8 million at a gain of $3.4 million.

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


we sought to buy or develop investment properties at a price which produces value for investors and avoid
overpaying for real estate merely to outbid competitors;

we sought to buy or develop properties in excellent locations with substantial infrastructure in place around
them and avoid investing in locations where the future construction of such infrastructure is speculative; and

we sought to buy or develop properties that are well-constructed and designed to appeal to a broad base of users
and avoid properties where quality has been sacrificed for cost savings in construction or which appeal only to a
narrow group of users.

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


we aggressively manage, maintain and upgrade our properties and refuse to neglect or undercapitalize
management, maintenance and capital improvement programs; and

we believe that we have the ability to hold properties through down cycles because we generally do not have
mortgage debt on the Company, which could place the properties at risk of foreclosure. As of February 7, 2025,
none of our owned properties were subject to mortgage debt.

Competition

With respect to our real estate investments, we face competition in each of the markets where our properties are
located. In order to establish, maintain or increase the rental revenues for a property, it must be competitive on location,
cost and amenities with other buildings of similar use. Some of our competitors may have significantly more resources
than we do and may be able to offer more attractive rental rates or services. On the other hand, some of our competitors
may be smaller or have less fixed overhead costs, less cash or other resources that make them willing or able to accept
lower rents in order to maintain a certain occupancy level. In markets where there is not currently significant existing
property competition, our competitors may decide to enter the market and build new buildings to compete with our
existing projects or those in a development stage. Our competition is not only with other developers, but also with
property users who choose to own their building or a portion of the building in the form of an office condominium.
Competitive conditions are affected by larger market forces beyond our control, such as general economic conditions,
which may increase competition among landlords for quality tenants, and individual decisions by tenants that are beyond
our control.

Governmental Regulations

Under various federal, state and local laws, ordinances and regulations, we, as an owner or operator of real
property may become liable for the costs of removal or remediation of certain hazardous substances released on or in our
property. Such laws may impose liability without regard to whether the owner or operator knew of, or caused, the
release of such hazardous substances. The presence of hazardous substances on a property may adversely affect the
owner’s ability to sell such property or to borrow using such property as collateral, and it may cause the owner of the
property to incur substantial remediation costs. In addition to claims for cleanup costs, the presence of hazardous
substances on a property could result in the owner incurring substantial liabilities as a result of a claim by a private party
for personal injury or a claim by an adjacent property owner for property damage.

All of our properties are required to comply with the Americans With Disabilities Act, or ADA, and the
regulations, rules and orders that may be issued thereunder. The ADA has separate compliance requirements for “public
accommodations” and “commercial facilities,” but generally requires that buildings be made accessible to persons with
disabilities. Compliance with ADA requirements might require, among other things, removal of access barriers.

4
Noncompliance with such requirements could result in the imposition of fines by the U.S. government or an award of
damages to private litigants.

In addition, we are required to operate our properties in compliance with fire and safety regulations, building
codes and other land use regulations, as they may be adopted by governmental agencies and bodies and become
applicable to our properties. Compliance with such requirements may require us to make substantial capital
expenditures, which expenditures would reduce cash otherwise available for distribution to our stockholders.

The provisions of the tax code governing the taxation of REITs are very technical and complex, and although
we expect that we will be organized and will operate in a manner that will enable us to meet such requirements, no
assurance can be given that we will always succeed in doing so. If in any taxable year we do not qualify as a REIT, we
would be taxed as a corporation and distributions to our stockholders would not be deductible by us in computing our
taxable income. In addition, if we were to fail to qualify as a REIT, we could be disqualified from treatment as a REIT in
the year in which such failure occurred and for the next four taxable years and, consequently, we would be taxed as a
regular corporation during such years. Failure to qualify for even one taxable year could result in a significant reduction
of our cash available for distribution to our stockholders or could require us to incur indebtedness or liquidate
investments in order to generate sufficient funds to pay the resulting federal income tax liabilities.

See “Item 1A. Risk Factors” and “Item 7. Management’s Discussion and Analysis of Financial Condition and
Results of Operations” for additional information.

Human Capital

We had 28 employees as of both February 7, 2025 and December 31, 2024. Women represent 46.4% of our
employees, of which 38.5% hold management level/leadership roles. We endeavor to maintain a workplace that is free
from discrimination or harassment on the basis of color, race, sex, national origin, ethnicity, religion, age, disability,
sexual orientation, gender identification or expression or any other status protected by applicable law. We regularly
conduct training to prevent harassment and discrimination. The Company’s basis for recruitment, hiring, development,
training, compensation and advancement of employees is qualifications, performance, skills and experience. Many of our
employees have a long tenure with the Company. Our employees are compensated without regard to gender, race and
ethnicity, and our compensation program is designed to attract and retain talent.

Available Information

We make available, free of charge through our website http://www.fspreit.com our annual report on Form 10-K,
quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished
pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended as soon as reasonably practicable
after we electronically file such material with the Securities and Exchange Commission, or SEC.

We will voluntarily provide paper copies of our filings and code of ethics upon written request received at the
address on the cover of this Annual Report on Form 10-K, free of charge.

5
Information about our Directors

The following table sets forth the names, ages and positions of all our directors as of February 7, 2025.

Name
Age
Position

George J. Carter
76 Chief Executive Officer and Chairman of the Board
John N. Burke (1) (2) (3) (4)
63 Director

Brian N. Hansen (3)
53 Director

Kenneth Hoxsie (1) (3) (6)
74 Director

Dennis J. McGillicuddy (1)
83 Director

Georgia Murray (1) (2) (7)
74 Director

Bruce Schanzer (1)
56 Director

Milton P. Wilkins, Jr. (1) (2) (5)
77 Director

(1) Member of the Audit Committee
(2) Member of the Compensation Committee
(3) Member of the Nominating and Corporate Governance Committee
(4) Chair of the Audit Committee
(5) Chair of the Compensation Committee
(6) Chair of the Nominating and Corporate Governance Committee
(7) Lead Independent Director

George J. Carter, age 76, is Chief Executive Officer and has been Chairman of the Board of Directors of FSP
Corp. since 2002. Mr. Carter also was the President of FSP Corp. from 2002 to May 2016. Mr. Carter is responsible for
all aspects of the business of FSP Corp. and its affiliates, with special emphasis on the evaluation, acquisition and
structuring of real estate investments. Prior to the conversion, he was President of the general partner of the FSP
Partnership and was responsible for all aspects of the business of the FSP Partnership and its affiliates. From 1992
through 1996 he was President of Boston Financial Securities, Inc. (“Boston Financial”). Prior to joining Boston
Financial, Mr. Carter was owner and developer of Gloucester Dry Dock, a commercial shipyard in Gloucester,
Massachusetts. From 1979 to 1988, Mr. Carter served as Managing Director in charge of marketing at First Winthrop
Corporation, a national real estate and investment banking firm headquartered in Boston, Massachusetts. Prior to that, he
held a number of positions in the brokerage industry including those with Merrill Lynch & Co. and Loeb Rhodes & Co.
Mr. Carter is a graduate of the University of Miami (B.S.).

John N. Burke, age 63, has been a Director of FSP Corp. since 2004 and Chair of the Audit Committee since
June 2004. Mr. Burke is a certified public accountant with over 35 years of experience in the practice of public
accounting working with both private and publicly traded companies with extensive experience serving clients in the real
estate and REIT industry. His experience includes analysis and evaluation of financial reporting, accounting systems,
internal controls and audit matters. Mr. Burke has been involved as an advisor on several public offerings, private equity
and debt financings and merger and acquisition transactions. Mr. Burke’s consulting experience includes a wide range of
accounting, tax and business planning matters. Prior to starting his own firm, BA, Inc., in 2003, where he currently
practices, Mr. Burke was an Audit Partner in the Boston office of BDO USA, LLP. Mr. Burke is a member of the
American Institute of Certified Public Accountants and the Massachusetts Society of CPAs. Mr. Burke earned an M.S. in
Taxation and studied undergraduate accounting at Bentley University.

Brian N. Hansen, age 53, has been a Director of FSP Corp. since 2012. Since 2007, Mr. Hansen has served as
President and Chief Operating Officer of Confluence Investment Management LLC, a St. Louis based Registered
Investment Advisor. Prior to founding Confluence in 2007, Mr. Hansen served as a Managing Director in A.G. Edwards’
Financial Institutions & Real Estate Investment Banking practice. While at A.G. Edwards, Mr. Hansen advised a wide
variety of Real Estate Investment Trusts on numerous capital markets transactions, including public and private offerings
of debt and equity securities as well as the analysis of various merger & acquisition opportunities. Prior to joining A.G.
Edwards, Mr. Hansen served as a Manager in Arthur Andersen LLP’s Audit & Business Advisory practice. Mr. Hansen
has served on the boards of a number of non-profit entities and currently serves on the Finance Council and as the
Investment Committee Chair of the Archdiocese of St. Louis. Mr. Hansen earned his M.B.A. from the Kellogg School

6
of Management at Northwestern University and his Bachelor of Science in Commerce from DePaul University. Mr.
Hansen is a Certified Public Accountant.

Kenneth A. Hoxsie, age 74, has been a Director of FSP Corp. since January 2016 and Chair of the Nominating
and Corporate Governance Committee since February 2021. Mr. Hoxsie was a Partner at the international law firm of
Wilmer Cutler Pickering Hale and Dorr LLP (“WilmerHale”) until his retirement in December 2015. He joined Hale
and Dorr (the predecessor of WilmerHale) in 1981, subsequently worked at Copley Real Estate Advisors, an institutional
real estate investment advisory firm, and rejoined Hale and Dorr in 1994. Mr. Hoxsie has over 30 years’ experience in
real estate capital markets transactions, fund formation, public company counseling and mergers and acquisitions and has
advised the Company since its formation in 1997. Mr. Hoxsie earned his J.D. (Cum Laude) from Harvard Law School,
his M.A. from Harvard University and his B.A. (Summa Cum Laude) from Amherst College, where he was elected to
Phi Beta Kappa.

Dennis J. McGillicuddy, age 83, has been a Director of FSP Corp. since May 2002. Mr. McGillicuddy
graduated from the University of Florida with a B.A. degree and from the University of Florida Law School with a J.D.
degree. In 1968, Mr. McGillicuddy joined Barry Silverstein in founding Coaxial Communications, a cable television
company. In 1998 and 1999, Coaxial sold its cable systems. Mr. McGillicuddy has served on the boards of various
charitable organizations. He is currently President of the Board of Trustees of Florida Studio Theater, a professional non-
profit theater organization, and is a Director of All-Star Children’s Foundation, an organization engaged in creating a
new paradigm for foster care.

Georgia Murray, age 74, has been a Director of FSP Corp. since April 2005 and Lead Independent Director
since February 2014. Ms. Murray is retired from Lend Lease Real Estate Investments, Inc., where she served as a
Principal from November 1999 until May 2000. From 1973 through October 1999, Ms. Murray worked at The Boston
Financial Group, Inc., serving as Senior Vice President and a Director at times during her tenure. Boston Financial was
an affiliate of the Boston Financial Group, Inc. She is a past Trustee of the Urban Land Institute and a past President of
the Multifamily Housing Institute. Ms. Murray previously served on the Board of Directors of Capital Crossing Bank.
She also serves on the boards of numerous non-profit entities. Ms. Murray is a graduate of Newton College.

Bruce J. Schanzer, age 56, has been a Director of FSP Corp. since November 2024. Mr. Schanzer is Chairman
and Chief Investment Officer of Erez Asset Management, a fund manager focused on investment opportunities in small
market cap REITs. Prior to forming Erez Asset Management in August 2022, Mr. Schanzer was President, Chief
Executive Officer and a director of Cedar Realty Trust (NYSE: CDR), a real estate investment trust focused on the
ownership, operation and redevelopment of shopping centers in the Washington, D.C. to Boston corridor, from June
2011 to August 2022. Before joining Cedar in 2011, he was a managing director in the real estate investment banking
group at Goldman Sachs & Co and prior thereto a vice president at Merrill Lynch. Before working on Wall Street, Bruce
worked as a real estate attorney in New York. He received an M.B.A. in finance and accounting from the University of
Chicago (now known as the Booth School of Business); a J.D. from Benjamin N. Cardozo School of Law, where he
served as a member of the Law Review; and a B.A. from Yeshiva College, where he is currently a member of the board
of trustees of Sym Schools of Business. He is also presently a member of the board of trustees of SAR Academy in
Riverdale, NY and the board of advisors of New York Medical College. Mr. Schanzer previously served as a member of
the board of governors of the National Association of Real Estate Investment Trusts.

Milton P. Wilkins, Jr., age 77, has been a Director of FSP Corp. since February 2022 and Chair of the
Compensation Committee since January 2025. Mr. Wilkins served as an investment advisor with RBF Wealth Advisors
in St. Louis, Missouri, from 1997 to 2024. Concurrently, from 2003 to 2015, Mr. Wilkins served with Hammond
Associates/Mercer Investment Consulting as a senior investment consultant to institutional clients. From 1976 to 1986
and from 1989 to 1997, Mr. Wilkins served in various positions at Monsanto Corporation, including as Vice President of
Corporate Development in the corporate mergers and acquisition group, as Vice President of the Plant Sciences Division
and as Regional Director of Latin America. Mr. Wilkins currently serves as Chairman of the St. Louis County
Employees Retirement Board (pension plan), a member of the Investment Committee of the Archdiocese of St. Louis,
and as a member of the Board of Directors of the Nine PBS public television station in St. Louis. Mr. Wilkins holds a
M.B.A. degree from the Harvard Graduate School of Business Administration and a Bachelor of Arts degree from
Morehouse College.

Information about our Executive Officers

The following table sets forth the names, ages and positions of all our executive officers as of February 7, 2025.

Name
Age
Position
George J. Carter (1)
76 Chief Executive Officer and Chairman of the Board
Jeffrey B. Carter
53 President and Chief Investment Officer
Scott H. Carter
53 Executive Vice President, General Counsel and Secretary
John G. Demeritt
64 Executive Vice President, Chief Financial Officer and Treasurer
John F. Donahue
58 Executive Vice President
Eriel Anchondo
47 Executive Vice President and Chief Operating Officer

(1) Information about George J. Carter is set forth above. See “Directors of FSP Corp.”

Jeffrey B. Carter, age 53, is President and Chief Investment Officer of FSP Corp. Mr. Carter served as
Executive Vice President and Chief Investment Officer from February 2012 until May 2016, when he was appointed as
President in addition to his position as Chief Investment Officer. Previously, Mr. Carter served as Senior Vice President
and Director of Acquisitions of FSP Corp. from 2005 to 2012 and as Vice President - Acquisitions from 2003 to 2005.
Mr. Carter oversees the day-to-day execution of the Company’s strategic objectives and business plan. In addition, Mr.
Carter is primarily responsible for developing and implementing the Company’s investment strategy, including
coordination of acquisitions and dispositions. Prior to joining FSP Corp., Mr. Carter worked in Trust Administration for
Northern Trust Bank in Miami, Florida. Mr. Carter is a graduate of Arizona State University (B.A.), The George
Washington University (M.A.) and Cornell University (M.B.A.). Mr. Carter’s father, George J. Carter, serves as Chief
Executive Officer and Chairman of the Board of Directors of FSP Corp. and Mr. Carter’s brother, Scott H. Carter, serves
as Executive Vice President, General Counsel and Secretary of FSP Corp.

Scott H. Carter, age 53, is Executive Vice President, General Counsel and Secretary of FSP Corp. Mr. Carter
has served as General Counsel since February 2008. Mr. Carter joined FSP Corp. in October 2005 as Senior Vice
President and In-house Counsel. Mr. Carter is primarily responsible for the management of all of the legal affairs of FSP
Corp. and its affiliates. Prior to joining FSP Corp. in October 2005, Mr. Carter was associated with the law firm of
Nixon Peabody LLP, which he originally joined in 1999. At Nixon Peabody LLP, Mr. Carter concentrated his practice
on the areas of real estate syndication, acquisitions and finance. Mr. Carter received a Bachelor of Business
Administration (B.B.A.) degree in Finance and Marketing and a Juris Doctor (J.D.) degree from the University of
Miami. Mr. Carter is admitted to practice law in the Commonwealth of Massachusetts. Mr. Carter’s father, George J.
Carter, serves as Chief Executive Officer and Chairman of the Board of Directors of FSP Corp. and Mr. Carter’s brother,
Jeffrey B. Carter, serves as President and Chief Investment Officer of FSP Corp.

John G. Demeritt, age 64, is Executive Vice President, Chief Financial Officer and Treasurer of FSP Corp. and
has been Chief Financial Officer since March 2005. Mr. Demeritt previously served as Senior Vice President, Finance
and Principal Accounting Officer from September 2004 to March 2005. Prior to September 2004, Mr. Demeritt was a
Manager with Caturano & Company, an independent accounting firm (which later merged with McGladrey) where he
focused on Sarbanes Oxley compliance. Previously, from March 2002 to March 2004 he provided consulting services to
public and private companies where he focused on SEC filings, evaluation of business processes and acquisition
integration. During 2001 and 2002 he was Vice President of Financial Planning & Analysis at Cabot Industrial Trust, a
publicly traded real estate investment trust, which was acquired by CalWest in December 2001. From October 1995 to
December 2000 he was Controller and Officer of The Meditrust Companies, a publicly traded real estate investment trust
(formerly known as The La Quinta Companies, which was then acquired by the Blackstone Group), where he was
involved with a number of merger and financing transactions. Prior to that, from 1986 to 1995 he had financial and
accounting responsibilities at three other public companies, and was previously associated with Laventhol & Horwath,
an independent accounting firm from 1983 to 1986. Mr. Demeritt is a Certified Public Accountant and holds a Bachelor
of Science degree from Babson College.

8
John F. Donahue, age 58, is Executive Vice President of FSP Corp. and President of FSP Property Management
LLC and has held those positions since May 2016. Mr. Donahue is primarily responsible for the oversight of the
management of all of the real estate assets of FSP Corp. and its affiliates. Mr. Donahue joined FSP Corp. in August
2001 as Vice President of FSP Property Management LLC. From 2001 to May 2016, Mr. Donahue was responsible for
the management of real estate assets of FSP Corp. and its affiliates. From 1992 to 2001, Mr. Donahue worked in the
pension fund advisory business for GE Capital and AEW Capital Management with oversight of office, research and
development, industrial and land investments. From 1989 to 1992, Mr. Donahue worked for Krupp Realty in various
accounting and finance roles. Mr. Donahue holds a Bachelor of Science in Business Administration degree from Bryant
College.

Eriel Anchondo, age 47, is Executive Vice President and Chief Operating Officer of FSP Corp. and has held
those positions since May 2016. Mr. Anchondo joined FSP Corp. in 2015 as Senior Vice President of Operations. Mr.
Anchondo is responsible for ensuring that the Company has the proper operational controls, administrative and reporting
procedures, and people systems and infrastructure in place to effectively grow the organization and maintain financial
strength and operating efficiency. Prior to joining FSP Corp., from July 2014 to December 2014, Mr. Anchondo
provided consulting services to the retail banking division of ISBAN, which is part of the Technology and Operations
division of the Santander Group of financial institutions. From May 2007 to July 2013, Mr. Anchondo was employed by
Mercer, a global consulting leader in talent, health, retirement, and investments, as an Employee Education Manager
across all lines of Mercer’s business. From May 2005 to May 2007, Mr. Anchondo was a Communications Consultant at
New York Life Investment Management. From December 2002 to May 2005, Mr. Anchondo worked in the Preferred
Client Services Group at Putnam Investments. Mr. Anchondo is a graduate of Boston University (B.A.) and Cornell
University (M.B.A.).

Each of the above executive officers has been a full-time employee of FSP Corp. for the past five fiscal years.

Item 1A.
Risk Factors

The following material factors, among others, could cause actual results to differ materially from those
indicated by forward-looking statements made in this Annual Report on Form 10-K and presented elsewhere by
management from time-to-time.

Risks Related to our Indebtedness

If our one remaining Sponsored REIT defaults on its Sponsored REIT Loan, we may be required to keep
balances outstanding on our existing debt, seek new debt or use our cash balance to repay our existing debt,
which may reduce cash available for distribution to our stockholders or for other corporate purposes.

We have one remaining secured loan to a Sponsored REIT in the form of a mortgage loan, which we refer to as
the Sponsored REIT Loan. We anticipate that the Sponsored REIT Loan will be repaid through cash flow from property
operations or sale of the underlying property, although the actual amount and timing of any repayment is uncertain and
will likely depend on prevailing market conditions at the time of any such sale. If the Sponsored REIT defaults on the
Sponsored REIT Loan, the Sponsored REIT could be unable to fully repay the Sponsored REIT Loan and we may have
to satisfy our obligations under our existing debt through other means, including without limitation, keeping balances
outstanding, seeking new debt, and/or using our cash balance. If that happens, we may have less cash available for
distribution to our stockholders or for other corporate purposes.

Our operating results and financial condition could be adversely affected if we are unable to refinance the BofA
Term Loan, the BMO Term Loan, the Series A Notes or the Series B Notes.

Each of the BofA Term Loan, the BMO Term Loan, the Series A Notes or the Series B Notes (each as defined
in Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations) matures on
April 1, 2026. There can be no assurance that we will be able to refinance this indebtedness at maturity, or if we were
able to do so, that any such refinancings would be on terms as favorable as the terms currently applicable to the BofA
Term Loan, the BMO Term Loan, the Series A Notes, or the Series B Notes, and we may not be able to otherwise obtain

9
funds by selling assets or raising equity to make required payments on the BofA Term Loan, the BMO Term Loan, the
Series A Notes or the Series B Notes. If we are unable to refinance or repay the BofA Term Loan, the BMO Term Loan,
the Series A Notes or the Series B Notes at maturity or otherwise meet our payment obligations, we would be in default
under the terms of the applicable indebtedness and our operations and financial condition would be materially and
adversely affected.

Failure to comply with covenants in the documents evidencing the BofA Term Loan, the BMO Term Loan, the
Series A Notes or the Series B Notes could adversely affect our financial condition.

The documents evidencing the BofA Term Loan, the BMO Term Loan, the Series A Notes and the Series B
Notes contain customary affirmative and negative covenants, including some or all of the following: limitations with
respect to indebtedness, liens, investments, mergers and acquisitions, disposition of assets, use of net cash proceeds from
the disposition of properties, assets and equity issuances, mandatory prepayments, the requirement to have certain
subsidiaries provide guarantees, the requirement to pledge our equity interests in certain subsidiaries as collateral,
changes in business, certain restricted payments, repurchases and redemptions of our common stock, going concern
qualifications to our financial statements, and transactions with affiliates. In addition, subject to certain tax-related
exceptions, the documents evidencing the BofA Term Loan, the BMO Term Loan, the Series A Notes and the Series B
Notes restrict our ability to make quarterly dividend distributions that exceed $0.01 per share of our common stock;
provided, however, that notwithstanding such restriction, we are permitted to make dividend distributions based on our
good faith estimate of projected or estimated taxable income or otherwise as necessary to retain our 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 we would otherwise be subject. The documents evidencing the BofA Term Loan, the
BMO Term Loan, the Series A Notes and the Series B Notes contain the following financial covenants: minimum
tangible net worth; maximum leverage ratio; maximum secured leverage ratio; maximum secured recourse leverage
ratio; minimum fixed charge coverage ratio; maximum unencumbered leverage ratio; and minimum unsecured interest
coverage.

Our continued general compliance with the BofA Term Loan, the BMO Term Loan, the Series A Notes and the
Series B Notes is subject to ongoing compliance with our financial and other covenants. Failure to comply with such
covenants could cause a default under the BofA Term Loan, the BMO Term Loan, the Series A Notes or the Series B
Notes, and we may then be required to repay them with capital from other sources. Under those circumstances, other
sources of capital may not be available to us, or be available only on unattractive terms.

If we breach covenants in the documents evidencing the BofA Term Loan, the BMO Term Loan, the Series A
Notes or the Series B Notes, the lenders can declare a default. A default under documents evidencing the BofA Term
Loan, the BMO Term Loan, the Series A Notes, or the Series B Notes could result in difficulty financing growth in our
business and could also result in a reduction in the cash available for distribution to our stockholders or for other
corporate purposes. A default under documents evidencing the BofA Term Loan, the BMO Term Loan, the Series A
Notes or the Series B Notes could materially and adversely affect our financial condition and results of operations.

An increase in interest rates would increase our interest costs on variable rate debt and could adversely impact
our ability to refinance existing debt or sell assets.

As of each of December 31, 2024 and February 6, 2025, we had $55.6 million outstanding under the BofA
Term Loan. Interest on the BofA Term Loan bears interest at variable rates based on a spread over SOFR and includes a
5.00% floor on SOFR.

As of each of December 31, 2024 and February 6, 2025, we had $71.1 million outstanding under the BMO
Term Loan. Interest on the BMO Term Loan bears interest at variable rates based on a spread over SOFR and includes a
5.00% floor on SOFR.

During 2024, the Federal Reserve lowered the federal funds rate target three times, most recently decreasing it
by 25 basis points on December 18, 2024, to a range of 4.25% to 4.50%. If interest rates increase, then the interest costs
on our unhedged variable rate debt will also increase, which could adversely affect our cash flow, our ability to pay

10
principal and interest on our debt and our ability to make distributions to stockholders. In addition, rising interest rates
could limit our ability to incur new debt or to refinance existing debt when it matures. From time to time, we may enter
into interest rate swap agreements and other interest rate hedging contracts, including swaps, caps and floors. While
these agreements are intended to lessen the impact of rising interest rates on us, they also expose us to the risks that the
other parties to the agreements will not perform, we could incur significant costs associated with the settlement of the
agreements, the agreements will be unenforceable and the underlying transactions will fail to qualify as highly-effective
cash flow hedges. In addition, increases in interest rates could decrease the amount third parties are willing to pay for
our assets, thereby limiting our ability to change our portfolio promptly in response to changes in economic or other
conditions, to incur new debt or refinance existing debt when it matures.

Downgrades in our credit ratings could reduce our access to funding sources in the credit and capital markets.

We are currently assigned a corporate credit rating from Moody’s Investors Service, Inc. (“Moody’s”) based on
its evaluation of our creditworthiness. Although our corporate credit rating from Moody’s is currently below investment
grade, there can be no assurance that we will not be further downgraded. Credit rating reductions or other negative
actions by one or more rating agencies could adversely affect our access to funding sources, the cost and other terms of
obtaining funding as well as our overall financial condition, operating results and cash flow.

If we do not repay a portion of our indebtedness by March 31, 2025, our interest costs will increase.

The terms of the BofA Term Loan and the BMO Term Loan 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, then 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. The terms of the Senior Notes 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, then the per
annum interest rates applicable to the Series A Notes and the Series B Notes will permanently increase by 1.00% from
8.00% per annum to 9.00% per annum.

We currently have approximately $250.3 million of indebtedness outstanding under the BMO Term Loan, the
BofA Term Loan and the Senior Notes. Therefore, if we do not repay approximately $50.3 million of our indebtedness
by March 31, 2025, the interest rate on each of our BMO Term Loan, the BofA Term Loan and the Senior Rates will
permanently increase by 1%. An increase in our interest costs would adversely affect our cash flow and could adversely
affect our capacity to pay principal and interest on our debt and our ability to make distributions to stockholders. In
addition, increased interest rates on our outstanding indebtedness could adversely affect our ability to incur new debt or
to refinance our existing debt when it matures.

Risks Related to our Operations and Properties

The long-term impact of the COVID-19 pandemic may continue to have an adverse impact on our financial
condition and results of operations. This impact could be materially adverse to the extent that the long-term
impact of the COVID-19 pandemic, or future pandemics, cause tenants to be unable to pay their rent or reduce
the demand for commercial real estate, or cause other impacts described below.

The COVID-19 pandemic has adversely impacted our properties and operating results and continues to present
material uncertainty and risk with respect to the performance of our properties and our financial results. Considerable
uncertainty still surrounds the long-term impact of the COVID-19 pandemic and its potential effects on the population,
including the spread of more contagious variants of the virus, and on the commercial real estate market and our business.
Many of our tenants still do not fully occupy the space that they lease. Any ongoing negative impacts from the COVID-
19 pandemic could adversely affect us and/or our tenants due to, among other factors: the potential negative impact to
the businesses of our tenants, the impact of work-from-home and return-to-work policies, the potential negative impact
to leasing efforts and occupancy at our properties, uncertainty regarding future rent collection levels or requests for rent
concessions from our tenants, the occurrence of a default under any of our debt agreements, the potential for increased
borrowing costs, negative impacts on our ability to refinance existing indebtedness or to secure new sources of capital on

11
favorable terms, fluctuations in our level of dividends, increased costs of operations, making more difficult our ability to
complete required capital expenditures in a timely manner and on budget, decreases in values of our real estate assets,
changes in law and/or regulation, and uncertainty regarding government and regulatory policy.

Some of our existing tenants and potential tenants operate in businesses and industries that continue to be
adversely affected by the continuing disruption to business as a result of the COVID-19 pandemic. Some of our existing
tenants and potential tenants have elected to, or been required to, and may in the future elect to, or be required to, reduce
or suspend operations for extended periods of time, including as a result of work-from-home policies. Some of our
tenants have requested rent concessions and more tenants may request rent concessions or may not pay rent in the future.
These situations could lead to increased rent delinquencies and/or defaults under leases, a lower demand for rentable
space leading to increased concessions or lower occupancy, increased tenant improvement capital expenditures, or
reduced rental rates to maintain occupancies. For example, on December 21, 2020, the parent company of a tenant that
leases approximately 130,000 square feet filed a voluntary petition for relief under Chapter 11 of the United States
Bankruptcy Code, resulting in a writeoff charge of $3.1 million. Our operations could be materially negatively affected
if the economic downturn is prolonged, which could adversely affect our operating results, our ability to pay dividends,
our ability to repay or refinance our existing indebtedness, and the price of our common stock.

Economic conditions in the United States could have a material adverse impact on our earnings and financial
condition.

Although recent indicators suggest that economic activity has expanded at a modest pace, the global economy
continues to experience significant disruptions and uncertainty as a result of various factors, including geopolitical events
such as the wars and conflicts in Ukraine and the Middle East, increasing tensions with China and Iran, the long-term
impact of the COVID-19 pandemic and continuing supply chain difficulties. Because economic conditions directly affect
the demand for office space, our primary income producing asset, broad economic market conditions in the United
States, including uncertainty over interest rates, slower growth, stock market volatility or recession fears, could have a
material adverse effect on our earnings and financial condition. Economic conditions may be affected by numerous
other factors, including but not limited to, inflation and employment levels, energy prices, uncertainty about government
fiscal, monetary, trade and tax policies, changes in currency exchange rates, the regulatory environment and the
availability of credit. Future economic factors also may negatively affect the demand for office space, real estate values,
occupancy levels and property income.

If we are not able to collect sufficient rents from each of our owned real properties or collect interest on the
Sponsored REIT Loan, we may suffer significant operating losses or a reduction in cash available for future
dividends.

A substantial portion of our revenue is generated by the rental income of our real properties. If our properties
do not provide us with a steady rental income, our revenues will decrease, which may cause us to incur operating losses
in the future. In addition, if our properties do not provide us with rental income or we do not collect interest income
from the Sponsored REIT Loan, it will reduce the cash available for distribution to our stockholders.

We may not be able to dispose of properties on acceptable terms or within the time periods we anticipate
pursuant to our disposition strategy.

We have adopted a strategy seeking to increase shareholder value by pursuing the sale of select properties
where we believe that short to intermediate term valuation potential has been reached and striving to lease vacant space.
As we execute this strategy, our revenue, Funds From Operations, and capital expenditures may decrease in the short
term. Proceeds from dispositions are intended to be used primarily for the repayment of debt. We may not be able to
dispose of properties at acceptable prices or otherwise on anticipated terms and conditions within the time periods
contemplated by our disposition strategy, which would adversely affect our ability to use the proceeds as intended and
impair our financial flexibility.

12
We are dependent on key personnel.

We depend on the efforts of George J. Carter, our Chief Executive Officer and Chairman of the Board of
Directors; Jeffrey B. Carter, our President and Chief Investment Officer; Scott H. Carter, our General Counsel, Secretary
and an Executive Vice President; John G. Demeritt, our Chief Financial Officer, Treasurer and an Executive Vice
President; John F. Donahue, our President of FSP Property Management LLC and an Executive Vice President; and Eriel
Anchondo, our Chief Operating Officer and an Executive Vice President. If any of our executive officers were to resign,
our operations could be adversely affected. We do not have employment agreements with any of our executive officers.

We face risks from tenant defaults or bankruptcies.

If any of our tenants defaults on its lease, we may experience delays in enforcing our rights as a landlord and
may incur substantial costs in protecting our investment. In addition, at any time, a tenant of one of our properties may
seek the protection of bankruptcy laws, which could result in the rejection and termination of such tenant’s lease and
thereby cause a reduction in cash available for distribution to our stockholders. For example, on December 21, 2020, the
parent company of a tenant that leases approximately 130,000 square feet filed a voluntary petition for relief under
Chapter 11 of the United States Bankruptcy Code, resulting in a write-off charge of $3.1 million.

New acquisitions may fail to perform as expected.

We may fund acquisitions of new properties, if any, with cash, by assuming existing indebtedness, by entering
into new indebtedness, by issuing debt securities, by issuing shares of our stock or by other means. Our acquisition
activities are subject to the following risks:


acquired properties may fail to perform as expected;

the actual costs of repositioning, redeveloping or maintaining acquired properties may be greater than
our estimates; and

we may be unable to quickly and efficiently integrate new acquisitions into our existing operations,
and this could have an adverse effect on our results of operations and financial condition.

We face risks in owning, developing, redeveloping and operating real property.

An investment in us is subject to the risks incidental to the ownership, development, redevelopment and
operation of real estate-related assets. These risks include the fact that real estate investments are generally illiquid,
which may affect our ability to vary our portfolio in response to changes in economic and other conditions, as well as the
risks normally associated with:


changes in general and local economic conditions;

the supply or demand for particular types of properties in particular markets;

changes in market rental rates;

the impact of environmental protection laws;

changes in tax, real estate and zoning laws; and

the impact of obligations and restrictions contained in title-related documents.

Certain significant costs, such as real estate taxes, utilities, insurance and maintenance costs, generally are not
reduced even when a property’s rental income is reduced. In addition, environmental and tax laws, interest rate levels,
the availability of financing and other factors may affect real estate values and property income. Furthermore, the supply
of commercial space fluctuates with market conditions.

We may encounter significant delays in reletting vacant space, resulting in losses of income.

When leases expire, we may incur expenses and may not be able to re-lease the space on the same terms. While
we cannot predict when existing vacant space in properties will be leased, if existing tenants with expiring leases will
renew their leases or what the terms and conditions of the lease renewals will be, we expect to renew or sign new leases

13
at current market rates for locations in which the buildings are located, which in some cases may be below the expiring
rates. Certain leases provide tenants the right to terminate early if they pay a fee. If we are unable to re-lease space
promptly, if the terms are significantly less favorable than anticipated or if the costs are higher, we may have to reduce
distributions to our stockholders. Typical lease terms range from five to ten years, so up to approximately 20% of our
rental revenue from commercial properties could be expected to expire each year.

We face risks of tenant-type concentration.

As of December 31, 2024, approximately 25% of our tenants as a percentage of the total rentable square feet
operated in the energy services industry. An economic downturn in these or any industry in which a high concentration
of our tenants operate or in which a significant number of our tenants currently or may in the future operate, could
negatively impact the financial condition of such tenants and cause them to fail to make timely rental payments or
default on lease obligations, fail to renew their leases or renew their leases on terms less favorable to us, become
bankrupt or insolvent, or otherwise become unable to satisfy their obligations to us, which could adversely affect our
financial condition and results of operations.

We face risks from geographic concentration.

The properties in our portfolio as of December 31, 2024, by aggregate square footage, are distributed
geographically as follows: West — 42.6%, South — 38.0% and Midwest — 19.4%. However, within certain of those
regions, we hold a larger concentration of our properties in Denver, Colorado — 42.6%, Houston, Texas — 23.7%,
Minneapolis, Minnesota — 15.1%, and Dallas, Texas — 14.3%. We are likely to face risks to the extent that any of
these areas in which we hold a larger concentration of our properties suffer deteriorating economic conditions. As the
Dallas, Denver and Houston metropolitan areas have a significant presence in the energy sector, a prolonged period of
low oil or natural gas prices, or other factors negatively impacting the energy industry, could have an adverse impact on
our ability to maintain the occupancy of our properties in those areas or could cause us to lease space at rates below
current in-place rents, or at rates below the rates we have leased space in those areas in the prior year. In addition, factors
negatively impacting the energy industry could reduce the market values of our properties in those areas, which could
reduce our net asset value and adversely affect our financial condition and results of operations, or cause a decline in the
value of our common stock.

We compete with national, regional and local real estate operators and developers, which could adversely affect
our cash flow.

Competition exists in every market in which our properties are currently located and in every market in which
properties we may acquire in the future will be located. We compete with, among others, national, regional and
numerous local real estate operators and developers. Such competition may adversely affect the percentage of leased
space and the rental revenues of our properties, which could adversely affect our cash flow from operations and our
ability to make expected distributions to our stockholders. Some of our competitors may have more resources than we
do or other competitive advantages. Competition may be accelerated by any increase in availability of funds for
investment in real estate. For example, decreases in interest rates tend to increase the availability of funds and therefore
can increase competition. To the extent that our properties continue to operate profitably, this will likely stimulate new
development of competing properties. The extent to which we are affected by competition will depend in significant part
on both local market conditions and national and global economic conditions.

We face possible risks associated with the physical effects of climate change.

The physical effects of climate change could have a material adverse effect on our properties, operations and
business. For example, climate change could increase utility and other costs of operating our properties, including
increased costs for energy, water, insurance, regulatory compliance and other supply chain materials, which if not offset
by rising rental income and/or paid by tenants, could have a material adverse effect on our properties, operations and
business. We are also subject to climate change induced severe storm hazards, which to the extent not covered by
insurance, could result in significant capital expenditures. Over time, the physical effects of climate change could result
in declining demand for office space in our buildings or our inability to operate the buildings at all.

Security breaches and other disruptions could compromise our information and expose us to liability, which
could cause our business and reputation to suffer.

In the ordinary course of our business, we collect and store sensitive data concerning investors in the Sponsored
REIT, tenants and vendors. Although we have taken steps to protect the security of our information technology systems
and the data maintained in those systems, such systems and infrastructure may be vulnerable to attacks by hackers,
computer viruses or ransomware, or breaches due to employee error, malfeasance, impersonation of authorized users or
other disruptions. Any such breach or attack could compromise our networks and the information stored there could be
accessed, publicly disclosed, lost or stolen. Because the techniques used to obtain unauthorized access, disable or
degrade service, or sabotage systems change frequently and continuously become more sophisticated, often are not
recognized until launched against a target and may be difficult to detect for a long time, we may be unable to anticipate
these techniques or to implement adequate preventive or detective measures. Any unauthorized access, disclosure or
other loss of information could result in significant financial exposure, including significant costs to remediate possible
injury to the affected parties. We may also be subject to sanctions and civil or criminal penalties if we are found to be in
violation of the privacy or security rules under laws protecting confidential information. Any failure to maintain proper
functionality and security of our information systems could interrupt our operations, damage our reputation, subject us to
liability claims or regulatory penalties and could have a material adverse effect on our business, financial condition, cash
flows and results of operations.

Actual or threatened terrorist attacks may adversely affect our ability to generate revenues and the value of our
properties.

We have significant investments in markets that may be the targets of actual or threatened terrorism attacks in
the future. As a result, some tenants in these markets may choose to relocate their businesses to other markets or to
lower-profile office buildings within these markets that may be perceived to be less likely targets of future terrorist
activity. This could result in an overall decrease in the demand for office space in these markets generally or in our
properties in particular, which could increase vacancies in our properties or necessitate that we lease our properties on
less favorable terms or both. In addition, future terrorist attacks in these markets could directly or indirectly damage our
properties, both physically and financially, or cause losses that materially exceed our insurance coverage. As a result of
the foregoing, our ability to generate revenues and the value of our properties could decline materially. See also “We
may lose capital investment or anticipated profits if an uninsured event occurs.”

We may lose capital investment or anticipated profits if an uninsured event occurs.

We carry, or our tenants carry, comprehensive liability, fire and extended coverage with respect to each of our
properties, with policy specification and insured limits customarily carried for similar properties. There are, however,
certain types of losses that may be either uninsurable or not economically insurable. Should an uninsured material loss
occur, we could lose both capital invested in the property and anticipated profits.

Risks Related to Legal and Regulatory Matters

We are subject to possible liability relating to environmental matters, and we cannot assure you that we have
identified all possible liabilities.

15
In addition, we cannot assure you that:


future laws, ordinances or regulations will not impose any material environmental liability;

the current environmental conditions of our properties will not be affected by the condition of properties in the
vicinity of such properties (such as the presence of leaking underground storage tanks) or by third parties
unrelated to us;

tenants will not violate their leases by introducing hazardous or toxic substances into our properties that could
expose us to liability under federal or state environmental laws; or

environmental conditions, such as the growth of bacteria and toxic mold in heating and ventilation systems or
on walls, will not occur at our properties and pose a threat to human health.

We are subject to compliance with the Americans With Disabilities Act and fire and safety regulations, any of
which could require us to make significant capital expenditures.

We face risks associated with our tenants being designated “Prohibited Persons” by the Office of Foreign Assets
Control.

Pursuant to Executive Order 13224 and other laws, the Office of Foreign Assets Control of the United States
Department of the Treasury, or OFAC, maintains a list of persons designated as terrorists or who are otherwise blocked
or banned, which we refer to as Prohibited Persons. OFAC regulations and other laws prohibit conducting business or
engaging in transactions with Prohibited Persons, or collectively, the “OFAC Requirements”. Our current leases and
certain other agreements require the other party to comply with the OFAC Requirements. If a tenant or other party with
whom we contract is placed on the OFAC list, we may be required by the OFAC Requirements to terminate the lease or
other agreement. Any such termination could result in a loss of revenue or a damage claim by the other party that the
termination was wrongful.

Risks Related to our Common Stock

Our level of dividends may fluctuate.

Because our real estate occupancy levels, rental rates and property disposition levels can fluctuate, there is no
predictable recurring level of revenue from such activities and changes in interest rates or in the mix of our fixed and
variable rate debt can cause our interest costs to fluctuate. As a result of these fluctuations, the amount of cash available
for distribution to our stockholders may fluctuate, which may result in our not being able to maintain or grow dividend
levels, including special dividends, in the future. In 2022, we adopted a variable quarterly dividend policy, which
replaced our previous regular quarterly dividend policy. Under this dividend policy, our Board of Directors determines
quarterly dividends based upon a variety of factors, including our estimates of our annual taxable income and the amount
that we are required to distribute annually in the aggregate to enable us to continue to qualify as a REIT for federal
income tax purposes. In addition, the BofA Term Loan, the BMO Term Loan, the Series A Notes and the Series B Notes
include restrictions on our ability to make quarterly dividend distributions that exceed $0.01 per share of our common
stock; provided, however, that notwithstanding such restrictions, we are permitted to make dividend distributions based

16
on our good faith estimate of projected or estimated taxable income or otherwise as necessary to retain our status as a
REIT, to meet the distribution requirements of Section 857 of the Internal Revenue Code or to eliminate any income or
excise taxes to which we would otherwise be subject.

The real properties held by us may significantly decrease in value.

As of December 31, 2024, we owned 14 properties. Some or all of these properties may decline in value. To
the extent our real properties decline in value, our stockholders could lose some or all of the value of their investments.
The value of our common stock may be adversely affected if the real properties held by us decline in value since these
real properties represent the majority of the tangible assets held by us. Moreover, if we are forced to sell or lease the real
property held by us below its initial purchase price or its carrying costs, respectively, or if we are forced to lease real
property at below market rates because of the condition of the property or general economic or local market conditions,
our results of operations would be adversely affected and such negative results of operations may result in lower
dividends being paid to holders of our common stock.

Further issuances of equity securities may be dilutive to current stockholders.

The interests of our existing stockholders could be diluted if we issue additional equity securities to finance
future acquisitions, repay indebtedness or to fund other general corporate purposes. Our ability to execute our business
strategy depends on our access to an appropriate blend of debt financing, including unsecured lines of credit and other
forms of secured and unsecured debt, and equity financing.

The price of our common stock may vary.

The market prices for our common stock may fluctuate with changes in market and economic conditions,
including the market perception of real estate investment trusts, or REITs, in general, and changes in our financial
condition and results of operations. Such fluctuations may depress the market price of our common stock independent of
the financial performance of FSP Corp. The market conditions for REIT stocks generally could affect the market price
of our common stock.

Risks Related to our Organization and Structure

Our employee retention plan may prevent changes in control.

During February 2006, our Board of Directors approved a change in control plan, which included a form of
retention agreement and discretionary payment plan. Payments under the discretionary plan are capped at 1% of the
market capitalization of FSP Corp. as reduced by the amount paid under the retention plan. The costs associated with
these two components of the plan may have the effect of discouraging a third party from making an acquisition proposal
for us and may thereby inhibit a change in control under circumstances that could otherwise give the holders of our
common stock the opportunity to realize a greater premium over the then-prevailing market prices.

We would incur adverse tax consequences if we failed to qualify as a REIT.

The provisions of the tax code governing the taxation of REITs are very technical and complex, and although
we expect that we will be organized and will operate in a manner that will enable us to meet such requirements, no
assurance can be given that we will always succeed in doing so. In addition, as a result of our past acquisition of certain
sponsored REITs by merger, which we refer to as target REITs, we might no longer qualify as a REIT. We could lose
our ability to so qualify for a variety of reasons relating to the nature of the assets acquired from the target REITs, the
identity of the stockholders of the target REITs who become our stockholders or the failure of one or more of the target
REITs to have previously qualified as a REIT. Moreover, if one or more of the target REITs that we acquired in
May 2008, April 2006, April 2005 or June 2003 did not qualify as a REIT immediately prior to the consummation of its
acquisition, we could be disqualified as a REIT as a result of such acquisition.

17
If in any taxable year we do not qualify as a REIT, we would be taxed as a corporation and distributions to our
stockholders would not be deductible by us in computing our taxable income. In addition, if we were to fail to qualify as
a REIT, we could be disqualified from treatment as a REIT in the year in which such failure occurred and for the next
four taxable years and, consequently, we would be taxed as a regular corporation during such years. Failure to qualify
for even one taxable year could result in a significant reduction of our cash available for distribution to our stockholders
or could require us to incur indebtedness or liquidate investments in order to generate sufficient funds to pay the
resulting federal income tax liabilities.

Provisions in our organizational documents may prevent changes in control.

Our Articles of Incorporation and Bylaws contain provisions, described below, which may have the effect of
discouraging a third party from making an acquisition proposal for us and may thereby inhibit a change of control under
circumstances that could otherwise give the holders of our common stock the opportunity to realize a premium over the
then-prevailing market prices.

Ownership Limits. In order for us to maintain our qualification as a REIT, the holders of our common stock
may be limited to owning, either directly or under applicable attribution rules of the Internal Revenue Code, no more
than 9.8% of the lesser of the value or the number of our equity shares, and no holder of common stock may acquire or
transfer shares that would result in our shares of common stock being beneficially owned by fewer than 100 persons.
Such ownership limit may have the effect of preventing an acquisition of control of us without the approval of our board
of directors. Our Articles of Incorporation give our board of directors the right to refuse to give effect to the acquisition
or transfer of shares by a stockholder in violation of these provisions.

Preferred Stock. Our Articles of Incorporation authorize our board of directors to issue up to 20,000,000 shares
of preferred stock, par value $.0001 per share, and to establish the preferences and rights of any such shares issued. The
issuance of preferred stock could have the effect of delaying or preventing a change in control even if a change in control
may be in our stockholders’ best interest.

Increase of Authorized Stock. Our board of directors, without any vote or consent of the stockholders, may
increase the number of authorized shares of any class or series of stock or the aggregate number of authorized shares we
have authority to issue. The ability to increase the number of authorized shares and issue such shares could have the
effect of delaying or preventing a change in control even if a change in control may be in our stockholders’ best interest.

Amendment of Bylaws. Our board of directors has the power to amend our Bylaws. This power could have the
effect of delaying or preventing a change in control even if a change in control may be in our stockholders’ best interests.

Stockholder Meetings. Our Bylaws require advance notice for stockholder proposals to be considered at annual
and special meetings of stockholders and for stockholder nominations for election of directors at annual and special
meetings of stockholders. The advance notice provisions require a proponent to provide us with detailed information
about the proponent and/or nominee. Our Bylaws also provide that stockholders entitled to cast more than 50% of all the
votes entitled to be cast at a meeting must join in a request by stockholders to call a special meeting of stockholders and
that a specific process for the meeting request must be followed. These provisions could have the effect of delaying or
preventing a change in control even if a change in control may be in the best interests of our stockholders.

Supermajority Votes Required. Our Articles of Incorporation require the affirmative vote of the holders of no
less than 80% of the shares of capital stock outstanding and entitled to vote in order (i) to amend the provisions of our
Articles of Incorporation relating to the removal of directors, limitation of liability of officers and directors or
indemnification of officers and directors or (ii) to amend our Articles of Incorporation to impose cumulative voting in the
election of directors. These provisions could have the effect of delaying or preventing a change in control even if a
change in control may be in our stockholders’ best interest.

Item 1B. Unresolved Staff Comments.

None.

Item 1C. Cybersecurity.

We have certain processes for assessing, identifying and managing cybersecurity risks, which are built into our
overall risk management program/information technology function and are designed to help protect our information
assets and operations from internal and external cyber threats, protect employee information from unauthorized access or
attack, as well as secure our networks and systems. Such processes include physical, procedural and technical
safeguards, response plans, regular tests on our systems, and routine review of our policies and procedures to identify
risks and enhance our practices. We engage certain external parties to enhance our cybersecurity oversight. We consider
the internal risk oversight programs of third-party service providers before engaging them in order to help protect us
from any related vulnerabilities.

We do not believe that there are any risks from known cybersecurity threats, including as a result of any prior
cybersecurity incidents, that have materially affected or are reasonably likely to materially affect us or our business
strategy, results of operations or financial condition. See “Security breaches and other disruptions could compromise our
information and expose us to liability, which could cause our business and reputation to suffer." in “Item 1A. Risk
Factors” for additional information.

The Audit Committee of our Board of Directors provides direct oversight over cybersecurity risk and provides
updates to the Board of Directors regarding such oversight. The Audit Committee receives quarterly updates from
management regarding cybersecurity matters and is notified between such updates regarding significant new
cybersecurity threats or incidents.

Our Vice President and Director of Information Technology leads the operational oversight of company-wide
cybersecurity strategy, policy, standards and processes and works across relevant departments to assess and help prepare
us and our employees to address cybersecurity risks. Prior to his approximately 15 years overseeing and securing our
information technology operations, our Vice President and Director of Information Technology held various roles during
his approximately 9 years of tenure at USI New England, most recently overseeing and securing their information
technology operations as Regional IT Manager. This experience is reinforced with regular cybersecurity training from
industry leading organizations such as the SANS Institute and ISC2.

In an effort to protect our resources from cyber threats, we maintain a security program that includes multiple
layers designed to prevent, mitigate, detect, defend against, and remediate these threats. These include, but are not
limited to, continuous vulnerability assessment and remediation, annual penetration testing conducted by a third party,
security and monitoring tools that are monitored by a 24x7 SOC (Security Operations Center) and Incident Response
Planning. Additionally, all employees are required to take annual cyber security training that aligns with our risks and
current cyber trends such as ransomware, BEC (business email compromise,) phishing, and social engineering.

19
Item 2.
Properties

Set forth below is information regarding our properties as of December 31, 2024:

Approx.
Percent

Approx.

Date of

Square
Leased as

Number

Property Location
Purchase (1)
Feet
of 12/31/24 of Tenants
Major Tenants (2)

Office

16285 Park Ten Place

6/27/02
157,609
83.5 %
7 Blade Energy Partners, Ltd.

Houston, TX 77084

Baytex Energy USA, Inc.

Edge Engineering & Science,
LLC

Liberty Lift Solutions, LLC

15601 Dallas Parkway

9/30/02
289,333
79.9 %
13 Cyxtera Management Inc.

Addison, TX 75001

WDT Acquisition Corporation

Aerotek, Inc.

CarOffer, LLC

1293 Eldridge Parkway

1/16/04
248,399
100.0 %
1 CITGO Petroleum Corporation
Houston, TX 77077

6550 & 6560 Greenwood Plaza
Englewood, CO 80111

2/24/05
196,236
65.0 %
2

Kaiser Foundation Health Plan,
Inc.

16290 Katy Freeway

9/28/05
156,746
75.5 %
6 Olin Corporation

Houston, TX 77094

Bluware, Inc.

5055 & 5057 Keller Springs Rd.
2/24/06
217,841
78.4 %
22 See Footnote 3

Addison, TX 75001

121 South Eighth Street
Minneapolis, MN 55402

6/29/10
297,541
78.5 %
33

Schwegman, Lundberg &
Woessner

801 Marquette Ave. South

6/29/10
129,691
91.8 %
3 Workbox Marquette MN, LLC
Minneapolis, MN 55402

Greater Minneapolis
Convention & Visitor
Association

Deluxe Corporation

5100 & 5160 Tennyson Parkway
Plano, TX 75024

3/10/11
209,562
51.0 %
6

ARK-LA-TEX Financial
Services, LLC

10370 & 10350 Richmond Ave.
11/1/12
629,025
65.5 %
43 See Footnote 3

Houston, TX 77042

1999 Broadway

5/22/13
682,639
50.2 %
28 United States Government

Denver, CO 80202

1001 17th Street
Denver CO, 80202

8/28/13
649,400
75.4 %
16

Permian Resources Operating,
LLC

Hall and Evans, LLC

Ping Identity Corp.

Approx.
Percent

Approx.

Date of

Square
Leased as

Number

Property Location
Purchase (1)
Feet
of 12/31/24 of Tenants
Major Tenants (2)

45 South Seventh Street

6/6/16
330,096
52.8 %
16 PwC US Group

Minneapolis, MN 55402

600 17th Street

12/1/16
612,135
77.1 %
32 EOG Resources, Inc.

Denver, CO 80202

120 Monument Circle

1/1/23
213,760
4.1 %
2 See Footnote 3

Indianapolis, IN

Total Owned & Consolidated
Portfolio

5,020,013
67.5 %

(1) Date of purchase or merged entity date of purchase.
(2) Major tenants that occupy 10% or more of the space in an individual property.
(3) No tenant occupies more than 10% of the space.

All of the properties listed above are owned, directly or indirectly, by us, except for Monument Circle which is a
consolidated variable interest entity. None of our owned properties are subject to any mortgage loans. We have no other
material undeveloped or unimproved properties, or proposed programs for material renovation or development of any of
our properties in 2025. We believe that our properties are adequately covered by insurance as of December 31, 2024.

21
The information presented below provides the weighted average GAAP rent per square foot for the year ended
December 31, 2024 for our properties and weighted occupancy square feet and percentages. GAAP rent includes the
impact of tenant concessions and reimbursements.

Weighted

Occupied

Weighted

Year Built

Weighted
Percentage as of
Average

or
Net Rentable
Occupied

December 31,
Rent per Occupied
Property Name

City
State Renovated Square Feet
Sq. Ft.

2024 (a)

Square Feet (b)

120 Monument Circle
Indianapolis IN
1992

213,760
8,721
4.1 %

34.63
121 South 8th Street
Minneapolis MN
1974

297,541
224,733
75.5 %
25.80
801 Marquette Ave
Minneapolis MN 1923/2017
129,691
119,108
91.8 %

25.90
Plaza Seven
Minneapolis MN
1987

330,096
187,099
56.7 %
30.48
Midwest Total

971,088
539,661
55.6 %

27.59
Park Ten
Houston
TX
1999

157,609
119,925
76.1 %
28.95
Addison Circle
Addison
TX
1999

289,333
229,817
79.4 %
35.06
Eldridge Green
Houston
TX
1999

248,399
248,399
100.0 %
27.43
Park Ten Phase II
Houston
TX
2006

156,746
123,187
78.6 %
29.75
Liberty Plaza
Addison
TX
1985

217,841
163,337
75.0 %
26.51
Legacy Tennyson
Center
Plano
TX 1999/2008
209,562
108,574
51.8 %
30.81
Westchase I & II
Houston
TX 1983/2008
629,025
386,850
61.5 %
27.55
South Total

1,908,515 1,380,089
72.3 %
29.23
1999 Broadway
Denver
CO
1986

682,639
347,259
50.9 %
35.30
1001 17th Street
Denver
CO 1977/2006
649,400
462,048
71.2 %
38.56
600 17th Street
Denver
CO
1982

612,135
475,629
77.7 %
34.82
Greenwood Plaza
Englewood CO
2000

196,236
128,181
65.3 %
31.25
West Total

2,140,410 1,413,117
66.0 %
35.84

Total Owned &
Consolidated
Properties

5,020,013 3,332,867
66.4 % $
31.77

(a) Based on weighted occupied square feet for the year ended December 31, 2024, including month-to-month tenants,
divided by the property’s net rentable square footage.
(b) Represents annualized GAAP rental revenue for the year ended December 31, 2024 per weighted occupied square
foot.

22
The information presented below is a lease expiration table for ten years and thereafter, stating (i) the number of tenants
whose leases will expire, (ii) the total area in square feet covered by such leases, (iii) the annual rental represented by
such leases in dollars and by square feet, and (iv) the percentage of gross annual rental represented by such leases.

Rentable

Annualized Percentage

Number of
Square

Rent

of Total

Year of

Leases

Footage

Annualized
Per Square Annualized

Lease
Expiring

Subject to

Rent Under
Foot Under Rent Under

Expiration
Within the
Expiring

Expiring

Expiring
Cumulative
December 31,
Year (a)
Leases

Leases (b)

Leases

Total

2025

41 (c) 321,725
$ 10,682,388 $ 33.20
10.0 %
10.0 %
2026

42
609,509
21,851,095
35.85
20.5 %
30.5 %
2027

30
301,642
10,532,884
34.92
9.9 %
40.4 %
2028

26
259,540

8,008,461
30.86
7.5 %
47.9 %
2029

32
486,384
15,411,441
31.69
14.4 %
62.3 %
2030

18
242,551

7,531,497
31.05
7.1 %
69.4 %
2031

10
266,031
10,234,815
38.47
9.6 %
79.0 %
2032

7
61,352

36,441
0.59
0 %
79.0 %
2033

8
390,287
11,546,827
29.59
10.8 %
89.8 %
2034

5
51,384

1,552,826
30.22
1.5 %
91.3 %
2035 and thereafter

22
396,632 (d)
9,330,944
23.53
8.7 %
100.0 %
Leased total

241
3,387,037
$ 106,719,619 $ 31.51
100.0 %

Vacancies as of 12/31/24

1,632,976

Total Portfolio Square Footage

5,020,013

(a) The number of leases approximates the number of tenants. Tenants with lease maturities in different years are
included in annual totals for each lease. Tenants may have multiple leases in the same year.
(b) Annualized rent represents the monthly rent charged, including tenant reimbursements, for each lease in effect at
December 31, 2024 multiplied by 12. Tenant reimbursements generally include payment of real estate taxes,
operating expenses and common area maintenance and utility charges.
(c) Includes 2 leases that are month-to-month.
(d) Includes 51,088 square feet that are non-revenue producing building amenities.

Item 3.
Legal Proceedings

From time to time, we may be subject to legal proceedings and claims that arise in the ordinary course of our
business. Although occasional adverse decisions (or settlements) may occur, we believe that the final disposition of such
matters will not have a material adverse effect on our financial position, cash flows or results of operations.

Item 4.
Mine Safety Disclosures

Not applicable.

23
PART II

Item 5.
Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities
Our common stock is listed on the NYSE American under the symbol “FSP”.
As of January 17, 2025, there were 10,497 holders of our common stock, including both holders of record and
participants in securities position listings.
While not guaranteed, we expect to continue to pay cash dividends on our common stock in the future. See Part
I, Item 1A, Risk Factors, “Our level of dividends may fluctuate.” for additional information.

STOCK PERFORMANCE GRAPH

In accordance with SEC regulations, the following graph compares the cumulative total stockholder return on
the Company’s common stock between December 31, 2019 and December 31, 2024 with the cumulative total return of
(1) the FTSE NAREIT Equity Office Index (“NAREIT Office”), (2) the Standard & Poor’s 500 Composite Stock Price
Index (“S&P 500”), and (3) the Russell 2000 Total Return Index (“Russell 2000”) over the same period. This graph
assumes the investment of $100.00 on December 31, 2019 and assumes that any distributions are reinvested.

As of December 31,

2019 2020 2021 2022 2023 2024
FSP
$ 100 $ 55 $ 84 $ 40 $ 39 $ 28
S&P 500
100 118 152 125 158 197
Russell 2000

100
12
138
110
128
143
NAREIT Office
100 82 100 62 63 77

Notes to Graph:
The above performance graph and related information shall not be deemed “soliciting material” or to be “filed” with the
Securities and Exchange Commission, nor shall such information be incorporated by reference into any future filing
under the Securities Act of 1933 or Securities Exchange Act of 1934, each as amended, except to the extent that we
specifically incorporate it by reference into such filing.

24
Item 6.
[Reserved]

Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with the financial statements and notes thereto
appearing elsewhere in this report. Historical results and percentage relationships set forth in the consolidated financial
statements, including trends which might appear, should not be taken as necessarily indicative of future operations. The
following discussion and other parts of this Annual Report on Form 10-K may also contain forward-looking statements
based on current judgments and current knowledge of management, which are subject to certain risks, trends and
uncertainties that could cause actual results to differ materially from those indicated in such forward-looking statements.
Accordingly, readers are cautioned not to place undue reliance on forward-looking statements. Investors are cautioned
that our forward-looking statements involve risks and uncertainty, including without limitation, adverse changes in
general economic or local market conditions, including the impact of recessionary concerns, inflation, energy prices and
interest rates, as well as those resulting from the COVID-19 pandemic, and the impact of work-from-home and return-to-
work policies, and other potential infectious disease outbreaks and terrorist attacks or other acts of violence, which may
negatively affect the markets in which we and our tenants operate, our inability to extend and/or refinance our debt or
effect asset sales sufficient to repay such debt prior to the maturity dates thereof, adverse changes in energy prices, which
if sustained, could negatively impact occupancy and rental rates in the markets in which we own properties, including
energy-influenced markets such as Dallas, Denver and Houston, expectations for future potential property dispositions,
expectations for future potential leasing activity, expectations for the potential payment of special dividends, changes in
interest rates as a result of economic market conditions, disruptions in the debt markets, economic conditions in the
markets in which we own properties, risks of a lessening of demand for the types of real estate owned by us,
uncertainties relating to fiscal policy, changes in government regulations and regulatory uncertainty, geopolitical events,
and expenditures that cannot be anticipated such as utility rate and usage increases, delays in construction schedules,
unanticipated increases in construction costs, unanticipated repairs, increases in the level of general and administrative
costs as a percentage of revenues as revenues decrease as a result of property dispositions, additional staffing, insurance
increases and real estate tax valuation reassessments. See “Risk Factors” in Part I, Item 1A, of this Annual Report on
Form 10-K. Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot
guarantee future results, levels of activity, performance or achievements. We may not update any of the forward-looking
statements after the date this Annual Report on Form 10-K is filed to conform them to actual results or to changes in our
expectations that occur after such date, other than as required by law.

Overview

FSP Corp., or we or the Company, operates in a single reportable segment: real estate operations. The real
estate operations market involves real estate rental operations, leasing, secured financing of real estate and services
provided for asset management, property management, property acquisitions, dispositions and development. Our current
strategy is to focus on infill and central business district office properties in the United States sunbelt and mountain west
regions as well as select opportunistic markets. We believe that the United States sunbelt and mountain west regions
have macro-economic drivers that have the potential to increase occupancies and rents. We are focused on long-term
growth and appreciation, as well as current income.

As of December 31, 2024, approximately 4.8 million square feet, or approximately 95.7% of our total owned
and consolidated portfolio, was located in Dallas, Denver, Houston and Minneapolis.

The main factor that affects our real estate operations is the broad economic market conditions in the United
States. These market conditions affect the occupancy levels and the rent levels on both a national and local level. We
have no influence on broader economic market conditions. We may look to acquire and/or develop quality properties in
good locations in order to lessen the impact of downturns in the market and to take advantage of upturns when they
occur.

25
vacant space. As we continue to execute this strategy, our revenue, Funds From Operations, and capital expenditures
may decrease in the short term. Proceeds from dispositions are intended to be used primarily for the repayment of debt.

For the year ended December 31, 2024, our disposition strategy resulted in aggregate gross sale proceeds of
$100.0 million. On February 21, 2024, we repaid an aggregate amount of $102 million of debt in connection with the
extensions of our BofA Term Loan, BMO Term Loan, our Series A Notes and our Series B Notes (each as defined in
Liquidity and Capital Resources below). On July 10, 2024 and October 25, 2024, we repaid an aggregate amount of
$25.3 million and $27.4 million, respectively, of our debt previously outstanding under the BofA Term Loan, BMO
Term Loan, Series A Notes and Series B Notes (each as defined in Liquidity and Capital Resources below).

In July 2022, we adopted a variable quarterly dividend policy, which replaced our previous regular quarterly
dividend policy. Under the variable quarterly dividend policy, the Board of Directors determines quarterly dividends
based upon a variety of factors, including the Company’s estimates of its annual taxable income and the amount that the
Company is required to distribute annually in the aggregate to enable the Company to continue to qualify as a real estate
investment trust for federal income tax purposes.

As of February 21, 2024, the interest rate applicable to borrowings under the Senior Notes (as defined in
Liquidity and Capital Resources below) was no longer based on the credit rating of our debt. The credit rating for our
senior unsecured debt was downgraded by Moody’s Investor Service from Ba1 to Ba3 on April 12, 2023, and from Ba3
to B3 on June 14, 2023. As of December 31, 2024, our credit rating remains at B3.

Trends and Uncertainties

Long-Term Impact of COVID-19 Pandemic

Considerable uncertainty still surrounds the long-term impact of the COVID-19 pandemic and its potential
effects on the population, including the spread of more contagious variants of the virus, and on the commercial real
estate market and our business. Many of our tenants still do not fully occupy the space that they lease. The impact of the
COVID-19 pandemic continues to present material uncertainty and risk with respect to the performance of our properties
and our financial results, such as the potential negative impact to the businesses of our tenants, the impact of work-from-
home and return-to-work policies, the potential negative impact to leasing efforts and occupancy at our properties,
uncertainty regarding future rent collection levels or requests for rent concessions from our tenants, the occurrence of a
default under any of our debt agreements, the potential for increased borrowing costs, negative impacts on our ability to
refinance existing indebtedness or to secure new sources of capital on favorable terms, fluctuations in our level of
dividends, increased costs of operations, making more difficult our ability to complete required capital expenditures in a
timely manner and on budget, decreases in values of our real estate assets, changes in law and/or regulation, and
uncertainty regarding government and regulatory policy. We are unable to estimate the full extent of the long-term
impact that the COVID-19 pandemic will have on our future financial results at this time. The long-term impact of the
COVID-19 pandemic has had and may continue to have an adverse impact on our financial condition and results of
operations. This impact could be materially adverse to the extent that the long-term impact of the COVID-19 pandemic,
or future pandemics, cause tenants to be unable to pay their rent or reduce the demand for commercial real estate, or
cause other impacts described below.” in Item 1A. “Risk Factors”.

Economic Conditions

Although recent indicators suggest that economic activity has expanded at a modest pace, the global economy
continues to experience significant disruptions as a result of various factors, including geopolitical events such as the
wars conflicts in Ukraine and the Middle East, increasing tensions with China and Iran, the long-term impact of the
COVID-19 pandemic and continuing supply chain difficulties. In addition, various economic factors, including but not
limited to, inflation and interest rates, are contributing to recessionary concerns for the economy of the United States.
Economic conditions directly affect the demand for office space, our primary income producing asset. In addition, the
broad economic market conditions in the United States are typically affected by numerous other factors, including but
not limited to, employment levels, energy prices, uncertainty about government fiscal, monetary, trade and tax policies,
changes in currency exchange rates, the regulatory environment and the availability of credit. During 2023 and 2024, the

26
Federal Reserve adjusted the federal funds rate target several times, most recently decreasing it by 25 basis points on
December 18, 2024, to a range of 4.25% to 4.50%. If interest rates increase, then the interest costs on our unhedged
variable rate debt would be adversely affected, which could in turn adversely affect our cash flow, our ability to pay
principal and interest on our debt and our ability to make distributions to stockholders. As of December 31, 2024,
approximately 50.6% of our total debt constituted unhedged variable rate debt. Increased interest rates could also
decrease the amount third parties are willing to pay for our assets and limit our ability to incur new debt or refinance
existing debt when it matures. As of the date of this report, the impact of current economic conditions and geopolitical
events and the long-term impact of the COVID-19 pandemic are adversely affecting the demand for office space in the
United States.

Real Estate Operations

As of December 31, 2024, our real estate portfolio was comprised of 14 owned properties, which we refer to as
our owned properties, and a non-controlling common stock interest in the corporation that is the sole member of FSP
Monument Circle LLC, which corporation was organized to operate as a real estate investment trust, which we refer to as
the Sponsored REIT. The Sponsored REIT, which we also refer to as Monument Circle, was consolidated effective
January 1, 2023. We refer to these 15 properties as our owned and consolidated properties. Our owned properties were
approximately 70.3% leased as of December 31, 2024, a decrease from 74.0% leased as of December 31, 2023. The
3.7% decrease in leased space was primarily a result of lease maturities that occurred during the year ended December
31, 2024, and the impact on leased percentage from the disposition of properties on January 26, 2024, July 8, 2024 and
October 23, 2024, respectively. These decreases were partially offset by new leasing during the year ended December
31, 2024. As of December 31, 2024, we had approximately 1,428,000 square feet of vacancy in our owned properties
compared to approximately 1,445,000 square feet of vacancy as of December 31, 2023. During the year ended
December 31, 2024, we leased approximately 616,000 square feet of office space in our owned properties, of which
approximately 445,000 square feet were with existing tenants, at a weighted average term of 6.3 years. On average,
tenant improvements for such leases were $26.06 per square foot, lease commissions were $9.72 per square foot and rent
concessions were approximately four months of free rent. Average GAAP base rents under such leases were $30.06 per
square foot, or 8.2% higher than average rents in the respective properties as applicable compared to the year ended
December 31, 2023.

Our owned and consolidated properties were approximately 67.5% leased as of December 31, 2024, compared
to 71.5% leased as of December 31, 2023. The difference is primarily a result of property sales and lease expirations
during 2024, which were partially offset by leasing achieved during 2024.

During 2024, 2023 and 2022, we had no redevelopment properties.

Our property known as Blue Lagoon in Miami, Florida, was substantially completed during the first quarter of
2021, and had previously been classified as a redevelopment property. As of December 31, 2022 and September 30,
2023, the property had leases signed for 98.5% of the rentable square feet of the property, including one tenant
occupying approximately 73.6% of the rentable square feet of the property. On December 6, 2023, we sold this property
for gross sales proceeds of approximately $68.0 million.

As of December 31, 2024, leases for approximately 6.4% and 12.1% of the square footage in our owned
portfolio are scheduled to expire during 2025 and 2026, respectively. As the first quarter of 2025 begins, we believe
that:


approximately half of our operating properties are stabilized with leased occupancy of 75% or more; and

our remaining operating properties are value add in nature with leased occupancy of less than 75%.

Existing vacancy is being actively marketed to numerous potential tenants. While leasing activity at our
properties has continued, we believe that the impact of geopolitical events, current economic conditions and the long-
term impact of the COVID-19 pandemic may limit or delay new tenant leasing during at least the first quarter of 2025
and potentially in future periods.

27
While we cannot generally predict when an existing vacancy in our owned properties will be leased or if
existing tenants with expiring leases will renew their leases or what the terms and conditions of the lease renewals will
be, we expect to renew or sign new leases at then-current market rates for locations in which the buildings are located,
which could be above or below the expiring rates. Also, we believe the potential exists for any of our tenants to default
on its lease or to seek the protection of bankruptcy. If any of our tenants defaults on its lease, we may experience delays
in enforcing our rights as a landlord and may incur substantial costs in protecting our investment. In addition, at any
time, a tenant of one of our properties may seek the protection of bankruptcy laws, which could result in the rejection
and termination of such tenant’s lease and thereby cause a reduction in cash available for distribution to our
stockholders.

Real Estate Acquisition and Investment Activity

During 2024:

on September 27, 2024, we agreed to extend the maturity date of our existing loan to Monument Circle
that is secured by a mortgage on real estate owned by Monument Circle, which we refer to as the
Sponsored REIT Loan, to September 30, 2025.

During 2023:

on September 26, 2023, we agreed to extend the maturity date of the Sponsored REIT Loan, to
September 30, 2024.

During 2022:

we continued to actively explore additional potential real estate investment opportunities.

Property Dispositions and Assets Held for Sale

During 2024, we 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 at 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, we entered into a new agreement to
sell a property in Atlanta, Georgia, which was previously classified as an asset held for sale during 2023 pursuant to a
previous agreement that was terminated on November 15, 2023. We increased the expected loss on this property by $6.6
million to $27.2 million when we entered into this new agreement to sell the property for a gross sales price of $34.0
million. The property was sold on October 23, 2024, with a $0.4 million increase to loss from final sales adjustments on
the date of sale.

During 2023, we sold an 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. During the three months ended June 30, 2023, we entered into
an agreement to sell a property in Charlotte, North Carolina at an expected loss of $0.8 million, which was recorded as
an impairment, and we classified the property as an asset held for sale as of June 30, 2023. The property was sold on
August 9, 2023, for a gross sales price of $9.2 million, at a loss of $0.8 million, which had been our expected loss.
During the three months ended September 30, 2023, we recorded a gain on sale of $53,000 as a result of conveying
approximately 7,826 square feet of land at our Addison, Texas property to the Town of Addison as part of a road
revitalization project. In addition, during the three months ended September 30, 2023, we executed purchase and sale
agreements with four different unrelated purchasers for the potential sale of four properties. Three of these potential
dispositions were classified as assets held for sale as of September 30, 2023. On October 26, 2023, we completed the
sale of one of the assets held for sale as of September 30, 2023, an office building 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, we sold another of the
assets held for sale, an office property located in Miami, Florida for a gross sales price of $68.0 million at a loss of
approximately $18.9 million. The one remaining asset held for sale 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;

28
however, on November 15, 2023, we received notice from the buyer indicating that the buyer was terminating the
transaction and directing the deposit and interest be disbursed to us.

During 2022, we sold two office properties located in Broomfield, Colorado on August 31, 2022 for an
aggregate sales price of $102.5 million, at a gain of approximately $24.1 million. We also sold an office property in
Evanston, Illinois on December 28, 2022, for a gross sales price of approximately $27.8 million, at a gain of $3.4
million. There were no properties held for sale as of December 31, 2022.

We used, or intend to use, the proceeds of the dispositions primarily to repay outstanding indebtedness.

The dispositions of these properties did not represent a strategic shift that has a major effect on our operations
and financial results. Our current strategy is to continue to invest in the sunbelt and mountain west regions of the United
States. Accordingly, the properties sold remained classified within continuing operations for all periods presented.

We continue to believe that the current price of our common stock does not accurately reflect the intrinsic value
of our underlying real estate assets, and we will seek to increase shareholder value by (1) pursuing the sale of select
properties where we believe that short to intermediate term valuation potential has been reached and (2) striving to lease
vacant space. As we continue to execute this strategy, our revenue, Funds From Operations, and capital expenditures
may decrease in the short term. Proceeds from dispositions are intended to be used primarily for the repayment of debt.

Critical Accounting Estimates

We have certain critical accounting policies that are subject to judgments and estimates by our management and
uncertainties of outcome that affect the application of these policies. We base our estimates on historical experience and
on various other assumptions we believe to be reasonable under the circumstances. On an on-going basis, we evaluate
our estimates. In the event estimates or assumptions prove to be different from actual results, adjustments are made in
subsequent periods to reflect more current information. The accounting policies that we believe are most critical to the
understanding of our financial position and results of operations, and that require significant management estimates and
judgments, are discussed below. Significant estimates in the consolidated financial statements include purchase price
allocations and impairment considerations.

Critical accounting policies are those that have the most impact on the reporting of our financial condition and
results of operations and those requiring significant judgments and estimates. We believe that our judgments and
estimates are consistently applied and produce financial information that fairly presents our results of operations. Our
most critical accounting policies involve our investments in sponsored REITs and our investments in real property.
These policies affect our:


allocation of purchase price; and

assessment of the carrying values and impairments of long lived assets;

These policies involve significant judgments made based upon our experience, including judgments about
current valuations, ultimate realizable value, current and future economic conditions and competitive factors in the
markets in which our properties are located. Competition, economic conditions and other factors may cause occupancy
declines in the future. In the future we may need to revise our carrying value assessments to incorporate information
which is not now known and such revisions could decrease the carrying values of our assets.

Allocation of Purchase Price

We allocate the value of real estate acquired among land, buildings, improvements and identified intangible
assets and liabilities, which may consist of the value of above market and below market leases, the value of in-place
leases, and the value of tenant relationships. Purchase price allocations and the determination of the useful lives are
based on management’s estimates. Under some circumstances we may rely upon studies commissioned from
independent real estate appraisal firms in determining the purchase price allocations.

29
Purchase price allocated to land and building and improvements is based on management’s determination of the
relative fair values of these assets assuming the property was vacant. Management determines the fair value of a property
using methods similar to those used by independent appraisers. Purchase price allocated to above or below market leases
is based on the present value (using an interest rate which reflects the risks associated with the leases acquired) of the
difference between (i) the contractual amounts to be paid pursuant to the in-place leases including consideration of
potential lease renewals and (ii) our estimate of fair market lease rates for the corresponding leases, measured over a
period equal to the remaining non-cancelable terms of the respective leases. This aggregate value is allocated between
in-place lease values and tenant relationships based on management’s evaluation of the specific characteristics of each
tenant’s lease; however, the value of tenant relationships has not been separated from in-place lease value because such
value and its consequence to amortization expense is immaterial for acquisitions reflected in our financial statements.
Factors considered by us in performing these analyses include (i) an estimate of carrying costs during the expected lease-
up periods, including real estate taxes, insurance and other operating income and expenses, and (ii) costs to execute
similar leases in current market conditions, such as leasing commissions, legal and other related costs. If future
acquisitions result in our allocating material amounts to the value of tenant relationships, those amounts would be
separately allocated and amortized over the estimated life of the relationships.

Impairment

We periodically evaluate our real estate properties for impairment indicators. These indicators may include
lower or declining tenant occupancy, weak or declining tenant profitability, cash flow or liquidity, our 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 our investments. If indicators of impairment are present, we evaluate the carrying value of the
property by comparing it to its expected future undiscounted cash flows. 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, we will
take a probability weighted approach to estimating future cash flows. If we determine that impairment has occurred, the
affected assets are reduced to their fair value. This analysis requires us to judge whether indicators of impairment exist
and to estimate likely future cash flows. If we misjudge or estimate incorrectly or if future tenant profitability, market or
industry factors differ from our expectations, we may record an impairment charge which is inappropriate or fail to
record a charge when we should have done so, or the amount of such charges may be inaccurate.

30
Results of Operations

The following table shows financial results for the years ended December 31, 2024 and 2023.

Year ended December 31,

(in thousands)

2024

2023

Change
Revenues:

Rental
$ 120,080 $ 145,446 $ (25,366)
Other

32
261
(229)
Total revenues
120,112 145,707 (25,595)
Expenses:

Real estate operating expenses
45,043 50,732 (5,689)
Real estate taxes and insurance
22,716 27,200 (4,484)
Depreciation and amortization
44,774 54,738 (9,964)
General and administrative
13,884 14,021
(137)
Interest
26,424 24,318
2,106
Total expenses
152,841 171,009 (18,168)

Loss on extinguishment of debt

(1,042)
(106)
(936)
Gain on consolidation of Sponsored REIT

—
394
(394)
Loss on sale of properties and impairment of assets held for sale, net
(20,826) (23,384)

2,558
Interest income

2,090
567
1,523
Loss before taxes
(52,507) (47,831)
(4,676)
Tax expense

216
279
(63)
Net loss
$ (52,723) $ (48,110) $ (4,613)

Comparison of the year ended December 31, 2024 to the year ended December 31, 2023

Revenues

Total revenues decreased by $25.6 million to $120.1 million for the year ended December 31, 2024, as
compared to the year ended December 31, 2023. The decrease was primarily a result of:


A decrease in rental revenue of approximately $25.4 million arising primarily from the sale of
three properties during 2024 and four properties in 2023 and other losses of rental income from
lease expirations during the periods presented. These decreases were partially offset by rental
income earned from leases commencing after December 31, 2023. Our leased space in our owned
and consolidated properties was 67.5% as of December 31, 2024, as compared to 71.5% as of
December 31, 2023.

A decrease in other income of $0.2 million during 2024 compared to 2023 from a deposit that was
forfeited by a potential buyer in 2023 for a property in Atlanta, Georgia that we had under
agreement when the transaction was terminated.

Expenses

Total expenses decreased by $18.2 million to $152.8 million for the year ended December 31, 2024, as
compared to the year ended December 31, 2023. The decrease was primarily a result of:


A decrease in real estate operating expenses and real estate taxes and insurance of approximately
$10.2 million was primarily attributable to the property dispositions noted above.

A decrease in depreciation and amortization of approximately $10.0 million was primarily
attributable to the property dispositions noted above.

A decrease in general and administrative expenses of $0.1 million, which was primarily
attributable to lower personnel costs, which were partially offset by higher professional fees

31
related to debt transactions completed in 2024 and the costs associated with adding a new director
to our Board of Directors in the fourth quarter of 2024.

These decreases were partially offset by:


An increase in interest expense of approximately $2.1 million. The increase was primarily due to
higher interest expense as a result of higher interest rates under the loan amendments we entered
into in February 2024, which are described below and was partially offset by a lower principal
amount of debt outstanding compared to the year ended December 31, 2023.

Loss on extinguishment of debt

During the years ended December 31, 2024 and December 31, 2023, we repaid debt and incurred a loss on
extinguishment of debt of approximately $1.1 million and $0.1 million, respectively, related to unamortized deferred
financing costs on the dates of the repayments.

Gain on consolidation of Sponsored REIT

During the year ended December 31, 2023, we recorded a gain on consolidation of Sponsored REIT as a result
of reducing the Monument Circle loan loss reserve, which resulted in a $0.4 million gain.

Gain and loss on sale of properties and impairment of assets held for sale

During the three months ended March 31, 2023, we sold an 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.

During the three months ended September 30, 2023, we sold an office property located in Charlotte, North
Carolina known as Forest Park, for a sales price of $9.2 million at a loss of approximately $0.8 million. During the three
months ended September 30, 2023, we also recorded a gain on sale of $53,000 as a result of conveying approximately
7,826 square feet of land at our Addison, Texas property to the Town of Addison as part of a road revitalization project
and increased the loss on sale of Forest Park by $38,000 as a result of final sales adjustments.

During the three months ended September 30, 2023, we entered into an agreement to sell a property in Miami,
Florida, known as Blue Lagoon, for a gross sales price of approximately $68.0 million at an expected loss of $19.2
million that was recorded as an impairment loss. We completed the sale of the property on December 6, 2023 at an
actual loss of $18.9 million. During the three months ended September 30, 2023, we entered into an agreement to sell a
property in Atlanta, Georgia for a gross sales price of approximately $40.0 million, at an expected loss of $20.5 million
that was recorded as an impairment loss. On October 26, 2023, we completed the sale of an asset held for sale as of
September 30, 2023, which was an office building located in Plano, Texas for a gross sales price of $48.0 million at a
gain of approximately $10.6 million. During the three months ended September 30, 2023, we entered into a purchase
and sales agreement, which was subsequently amended, to sell a property located in Richardson, Texas for a gross sales
price of $35 million, at an expected loss of $2.1 million that was recorded as an impairment loss during the three months
ended December 31, 2023. The property sold on January 26, 2024, at the expected loss.

During the three months ended June 30, 2024, we entered into an agreement to sell a property in Glen Allen,
Virginia for a gross sales price of approximately $31.0 million at an expected loss of $13.2 million that was recorded as
an impairment, and we classified the property as an asset held for sale as of June 30, 2024. The property was sold on
July 8, 2024, at the expected loss. During the three months ended September 30, 2024, an additional $0.7 million in
costs related to the sale of properties previously sold were recorded.

During the three months ended September 30, 2024, we entered into a new agreement to sell a property in
Atlanta, Georgia, which was classified as an asset held for sale, for a gross sales price of $34.0 million, and recorded an
additional impairment loss of $6.6 million based on the fair value less cost to sell. The property sold on October 23,
2024, with a $0.4 million increase to loss from final sales adjustments on the date of sale.

Interest Income

Interest income increased $1.5 million to $2.1 million during the year ended December 31, 2024, compared to
the year ended December 31, 2023. During the three months ended December 31, 2023, we invested disposition
proceeds in an interest-bearing account and earned $0.6 million in interest income. During 2024, we used a portion of
the disposition proceeds to reduce debt and earned $2.1 million in interest income from proceeds that remained invested.

Tax expense on income

Included in income taxes is the Revised Texas Franchise Tax, which is a tax on revenues from Texas properties,
which was $0.2 million during the year ended December 31, 2024, compared to $0.3 million during the year ended
December 31, 2023.

Net income and loss

Net loss for year ended December 31, 2024, was $52.7 million compared to $48.1 million for the year ended
December 31, 2023, for the reasons described above.

The following table shows financial results for the years ended December 31, 2023 and 2022.

Year ended December 31,

(in thousands)

2023

2022
Change
Revenues:

Rental
$ 145,446 $ 163,739 $ (18,293)
Related party revenue:

Management fees and interest income from loans

—
1,855 (1,855)
Other

261
21
240
Total revenues
145,707 165,615 (19,908)
Expenses:

Real estate operating expenses
50,732 52,820 (2,088)
Real estate taxes and insurance
27,200 34,620 (7,420)
Depreciation and amortization
54,738 63,808 (9,070)
General and administrative
14,021 13,885
136
Interest
24,318 22,808
1,510
Total expenses
171,009 187,941 (16,932)

Loss on extinguishment of debt

(106)
(78)
(28)
Gain on consolidation of Sponsored REIT

394
—
394
Impairment and loan loss reserve

—
(4,237)
4,237
Gain (loss) on sale of properties and impairments of assets held for sale, net
(23,384) 27,939 (51,323)
Interest income

567
—
567
Income (loss) before taxes
(47,831)
1,298 (49,129)
Tax expense

279
204
75
Net income (loss)
$ (48,110) $
1,094 $ (49,204)

33
Comparison of the year ended December 31, 2023 to the year ended December 31, 2022

Revenues

Total revenues decreased by $19.9 million to $145.7 million for the year ended December 31, 2023, as
compared to the year ended December 31, 2022. The decrease was primarily a result of:


A decrease in rental revenue of approximately $18.3 million arising primarily from the sale of
three properties during 2022 and four properties in 2023 and other losses of rental income from
lease expirations during the periods presented. These decreases were partially offset by rental
income earned from leases commencing after December 31, 2022. Our leased space in our owned
and consolidated properties was 71.5% at December 31, 2023 and for our owned properties was
75.6% at December 31, 2022.

A decrease in interest income from loans of approximately $1.8 million due to the consolidation of
Monument Circle in our financial results as of January 1, 2023.

These decreases were partially offset by an increase in other income of $0.2 million from a deposit
that was forfeited by a potential buyer for a property in Atlanta, Georgia that we had under
agreement when the transaction was terminated.

Expenses

Total expenses decreased by $16.9 million to $171.0 million for the year ended December 31, 2023, as
compared to the year ended December 31, 2022. The decrease was primarily a result of:


A decrease in real estate operating expenses and real estate taxes and insurance of approximately
$9.4 million primarily attributable to the property dispositions noted above.

A decrease in depreciation and amortization of approximately $9.1 million primarily attributable
to the property dispositions noted above.

These decreases were partially offset by:


An increase in general and administrative expenses of $0.1 million primarily attributable to
expenses relating to a proposed sale transaction that was terminated by the prospective buyer.

An increase in interest expense of approximately $1.5 million. The increase was primarily due to
higher interest expense as a result of higher interest rates under the loan amendments we entered
into on February 10, 2023 described below and was partially offset by a lower principal amount of
debt outstanding compared to the year ended December 31, 2022.

Loss on extinguishment of debt

During the year ended December 31, 2023 and December 31, 2022, we repaid debt and incurred a loss on
extinguishment of debt of approximately $0.1 million and $0.1 million, respectively, related to unamortized deferred
financing costs on the dates of the repayments.

Gain on consolidation of Sponsored REIT

During the year ended December 31, 2023, we recorded a gain on consolidation of Sponsored REIT as a result
of reducing the Monument Circle loan loss reserve, which resulted in a $0.4 million gain.

Impairment and loan reserve

During the year ended December 31, 2022, we recorded an impairment on a mortgage receivable of $4.2
million.

34
Gain and loss on sale of properties and impairment

Interest Income

During the three months ended December 31, 2023, we invested disposition proceeds in an interest bearing
account and earned $0.6 million in interest income.

Tax expense on income

Included in income taxes is the Revised Texas Franchise Tax, which is a tax on revenues from Texas properties,
which was $0.3 million during the year ended December 31, 2023, compared to $0.2 million during the year ended
December 31, 2022.

Net income and loss

Net loss for year ended December 31, 2023, was $48.1 million compared to net income of $1.1 million for the
year ended December 31, 2022, for the reasons described above.
.

35
Non-GAAP Financial Measures

Funds From Operations

The Company evaluates performance based on Funds From Operations, which we refer to as FFO, as
management believes that FFO represents the most accurate measure of activity and is the basis for distributions paid to
equity holders. The Company defines FFO as net income or loss (computed in accordance with GAAP), excluding gains
(or losses) from sales of property, hedge ineffectiveness, acquisition costs of newly acquired properties that are not
capitalized and lease acquisition costs that are not capitalized plus depreciation and amortization, including amortization
of acquired above and below market lease intangibles and impairment charges on properties or investments in non-
consolidated REITs, and after adjustments to exclude equity in income or losses from, and, to include the proportionate
share of FFO from, non-consolidated REITs. We exclude FFO from any Sponsored REIT that is consolidated from the
calculation of FFO.

FFO should not be considered as an alternative to net income (determined in accordance with GAAP), nor as an
indicator of the Company’s financial performance, nor as an alternative to cash flows from operating activities
(determined in accordance with GAAP), nor as a measure of the Company’s liquidity, nor is it necessarily indicative of
sufficient cash flow to fund all of the Company’s needs.

Other real estate companies and the National Association of Real Estate Investment Trusts, or NAREIT, may
define this term in a different manner. We have included the NAREIT FFO definition as of May 17, 2016 in the table
and note that other REITs may not define FFO in accordance with the NAREIT definition or may interpret the current
NAREIT definition differently than we do.

We believe that in order to facilitate a clear understanding of the results of the Company, FFO should be
examined in connection with net income and cash flows from operating, investing and financing activities in the
consolidated financial statements.

The calculations of FFO are shown in the following table:

For the year ended December 31,

(in thousands):

2024

2023

2022

Net income (loss)
$ (52,723)
$ (48,110)
$ 1,094
Gain on consolidation of Sponsored REIT

—

(394)

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

44,757
54,694
63,689
NAREIT FFO

12,860
29,574
41,081
Lease Acquisition costs

426

390

262

Funds From Operations
$ 13,286 $ 29,964 $ 41,343

Net Operating Income (NOI)

The Company provides property performance based on Net Operating Income, which we refer to as NOI.
Management believes that investors are interested in this information. 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, management fee income, hedge ineffectiveness, gains or losses on the sale of assets and excludes non-property
specific income and expenses. We exclude the NOI from any Sponsored REIT that is consolidated from the calculation
of NOI. The information presented includes footnotes and the data is shown by region with properties owned in the
periods presented, which we call Same Store. The comparative Same Store results include properties held for the periods
presented and exclude acquired properties. We also exclude properties that have been placed in service, but that do not
have operating activity for all periods presented, dispositions and significant nonrecurring income such as bankruptcy

36
settlements and lease termination fees. NOI, as defined by the Company, may not be comparable to NOI reported by
other REITs that define NOI differently. 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 NOI are shown in the following table:

Net Operating Income (NOI)

Year

(in thousands)

Rentable

Ended

Inc

Region
Square Feet 31-Dec-24 31-Dec-23
(Dec)
Change
MidWest

757 5,753 7,008 (1,255) (17.9)%
South

1,909 18,139 18,746
(607)
(3.2)%
West

2,140 24,135 25,335 (1,200)
(4.7)%
Property NOI from the continuing
portfolio

4,806 48,027 51,089 (3,062)
(6.0)%
Dispositions, Non-Operating,
Development or Redevelopment

3,135 14,905 (11,770) (16.5)%
Property NOI

$ 51,162 $ 65,994 $ (14,832) (22.5)%

Same Store

$ 48,027 $ 51,089 $ (3,062)
(6.0)%

Less Nonrecurring

Items in NOI (a)

764 2,295 (1,531)
2.9 %

Comparative

Same Store

$ 47,263 $ 48,794 $ (1,531)
(3.1)%

Year

Ended

Reconciliation to Net loss

31-Dec-24

31-Dec-23

Net loss
$
(52,723) $
(48,110)
Add (deduct):

Loss on extinguishment of debt

1,042

106
Gain on consolidation of Sponsored REIT

—

(394)
Gain on sale of property

20,826
23,384
Management fee income

(1,713)
(1,707)
Depreciation and amortization

44,775
54,738
Amortization of above/below market leases

(18)
(45)
General and administrative

13,884
14,021
Interest expense

26,425
24,318
Interest income

(2,091)
(567)
Non-property specific items, net

755
250
Property NOI
$
51,162 $
65,994

(a) Nonrecurring Items in NOI include proceeds from bankruptcies, lease termination fees or other significant
nonrecurring income or expenses, which may affect comparability.

37
Liquidity and Capital Resources

Cash and cash equivalents were $42.7 million and $127.9 million at December 31, 2024 and December 31,
2023, respectively. The decrease of $85.2 million is attributable to $9.0 million provided by operating activities, plus
$70.3 million provided by investing activities less $164.5 million used in financing activities. Management believes that
existing cash and cash anticipated to be generated internally by operations, including property dispositions, will be
sufficient to meet working capital requirements and anticipated capital expenditures for at least the next 12 months.
Although there is no guarantee that we will be able to obtain the funds necessary for our future growth, we anticipate
generating funds from continuing real estate operations and property dispositions. We believe that we have adequate
funds to cover unusual expenses and capital improvements, in addition to normal operating expenses. Our ability to
maintain or increase our level of dividends to stockholders, however, depends in significant part upon the level of rental
income from our real properties, property dispositions and our interest costs.

Operating Activities

Cash provided by our operating activities for the year ended December 31, 2024 of $9.0 million was primarily
attributable to a net loss of $52.7 million excluding net losses on sale of properties of $20.8 million, plus the add-back of
$50.7 million of non-cash expenses, less $6.1 million increase in payments of deferred leasing commissions, less a $4.3
million increase in accounts payable and accrued expenses, less a $0.7 million increase in lease acquisition costs plus an
increase in tenant rent receivables of $0.9 million and a $0.4 million increase in prepaid expenses and other assets.

Investing Activities

Cash provided by investing activities for the year ended December 31, 2024 of $70.3 million was primarily
attributable to proceeds from the sale of three properties of $95.5 million, which was partially offset by capital
expenditures and office equipment investments of approximately $25.2 million.

Financing Activities

Cash used in financing activities for the year ended December 31, 2024 of $164.5 million is primarily
attributable to repayment of a portion of the BMO Term Loan (defined below) of $43.9 million, repayment of a portion
of the BofA Revolver (defined below) of $22.7 million, repayment of a portion of the BofA Term Loan (defined below)
of $11.7 million, repayment of a portion of the Senior Notes (defined below) of $76.4 million, payment of deferred
financing costs of $5.7 million and payment of distributions to stockholders of $4.1 million.

Liquidity beyond the next 12 months

Our ability to generate cash adequate to meet our needs is dependent primarily on income from real estate
investments, the sale of real estate investments, leveraging of real estate investments, proceeds from public offerings of
stock, private placement of debt and access to the capital markets. The acquisition of new properties, the payment of
expenses related to real estate operations, capital improvement expenses, debt service payments, general and
administrative expenses, and distribution requirements place demands on our liquidity.

We intend to operate our properties from the cash flows generated by our properties. However, our expenses
are affected by various factors, including inflation. See Part I, Item 1A, Risk Factors for additional factors. Increases in
operating expenses are predominantly borne by our tenants. To the extent that increases cannot be passed on to our
tenants through rent reimbursements, such expenses would reduce the amount of available cash flow, which can
adversely affect the market value of the applicable property.

We have used a variety of sources to fund our cash needs in addition to our free cash flow generated from our
investments in real estate. We have considered adding or refinancing existing term debt or raising capital through public
offerings or At The Market (ATM) programs of our common stock. We believe these sources of funds will provide
sufficient funds to adequately meet our obligations beyond the next twelve months.

38
BMO Term Loan

We have a term loan borrowing in the aggregate principal amount of approximately $71.1 million as of
December 31, 2024, which we refer to as 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, we 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, which we refer to as the BMO Second Amendment. The BMO
Second Amendment amended the Second Amended and Restated Credit Agreement dated September 27, 2018, which
we refer to as the Original BMO Credit Agreement, as amended by the First Amendment to Second Amended and
Restated Credit Agreement dated February 10, 2023, which we refer to as 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 (Secured Overnight Financing Rate) 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, the 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 us; (5) require that, within 90 days of the February 21, 2024 effective date of the BMO Second Amendment,
certain of our subsidiaries guarantee the BMO Term Loan; (6) require that, within 90 days of the February 21, 2024
effective date of the BMO Second Amendment, we pledge our equity interests in certain of our subsidiaries as collateral
for the BMO Term Loan; (7) reduce our minimum fixed charge coverage ratio from 1.50x to 1.25x; and (8) reduce our
minimum unsecured interest coverage ratio from 1.75x to 1.25x. We refer to the Original BMO Credit Agreement, as
amended by the BMO First Amendment and the BMO Second Amendment, as the BMO Credit Agreement.

The BMO Credit Agreement initially provided for an unsecured term loan borrowing in the amount of $220
million. The BMO Term Loan initially consisted of a $55 million tranche A term loan and a $165 million tranche B
term loan. On June 4, 2021, we repaid the tranche A term loan that was scheduled to mature on November 30, 2021, and
incurred a loss on extinguishment of debt of $0.1 million related to unamortized deferred financing costs. On February
10, 2023, we repaid a $40 million portion of the tranche B term loan. On August 10, 2023, we repaid an additional $10
million portion of the tranche B term loan. On February 21, 2024, as part of the BMO Second Amendment, we repaid an
approximately $29.0 million portion of the tranche B term loan. On July 10, 2024, we repaid an approximately $7.2
million portion of the tranche B term loan from asset sale proceeds of a property located in Glen Allen, Virginia. On
October 25, 2024, we repaid an approximately $7.8 million portion of the tranche B term loan from asset sale proceeds
of a property located in Atlanta, Georgia. The tranche B term loan matures on April 1, 2026.

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.

39
Although the interest rate on the BMO Term Loan is currently variable under the BMO Credit Agreement, we
previously 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, we 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, we terminated all remaining interest rate swaps applicable to the
BMO Term Loan and, on February 10, 2023, we received an aggregate of approximately $4.3 million as a result of such
terminations.

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 our equity interests in certain
subsidiaries as collateral, changes in business, certain restricted payments, repurchases and redemptions of our common
stock, going concern qualifications to our financial statements, and transactions with affiliates. In addition, the BMO
Credit Agreement also restricts our ability to make quarterly dividend distributions that exceed $0.01 per share of our
common stock; provided, however, that notwithstanding such restriction, we are permitted to make dividend
distributions based on our good faith estimate of projected or estimated taxable income or otherwise as necessary to
retain our 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 we would otherwise be subject. The BMO Credit
Agreement also contains financial covenants that require us 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. We were 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 (as defined in
the BMO Credit Agreement). In the event of a default by us, 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 documents. For certain events
of default related to bankruptcy, insolvency, and receivership, the commitments of lenders will be automatically
terminated and all of our outstanding obligations will become immediately due and payable.

BofA Term Loan

As of December 31, 2024, we have a term loan borrowing in the amount of approximately $55.6 million, which
we refer to as 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, we amended the BofA Term Loan by entering into a Second Amendment to Credit
Agreement with the lending institutions party thereto, which we refer to as the BofA Second Amendment. The BofA
Second Amendment amended the Credit Agreement dated January 10, 2022, which we refer to as the Original BofA
Credit Agreement, as amended by the First Amendment to Credit Agreement dated February 10, 2023, which we refer to
as 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; (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 in the case of SOFR, and from 200 basis points to 300 basis points in the
case of the base rate; (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 us; (6) require that, within 90 days of the February 21, 2024 effective date of the BofA Second
Amendment, certain of our subsidiaries guarantee the BofA Term Loan; (7) require that, within 90 days of the February
21, 2024 effective date of the BofA Second Amendment, we pledge our equity interests in certain of our subsidiaries as

40
collateral for the BofA Term Loan; (8) reduce our minimum fixed charge coverage ratio from 1.50x to 1.25x; and (9)
reduce our minimum unsecured interest coverage ratio from 1.75x to 1.25x. We refer to the Original BofA Credit
Agreement, as amended by the BofA First Amendment and the BofA Second Amendment, as the BofA Credit
Agreement.

Prior to entering into the BofA Second Amendment on February 21, 2024, borrowings made under the BofA
Revolver could be revolving loans or letters of credit, the combined sum of which could not exceed $150 million
outstanding at any time. On February 10, 2023, we borrowed $40.0 million under the BofA Revolver to repay a portion
of the BMO Term Loan. Effective October 1, 2023, availability under the BofA Revolver was reduced to $125 million.
As of December 31, 2023, there were borrowings of $90 million drawn and outstanding under the BofA Revolver. On
February 21, 2024, as part of the BofA Second Amendment, we repaid an approximately $22.7 million portion of the
BofA Revolver. On July 10, 2024, we 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, we 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.

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 our equity interests in certain
subsidiaries as collateral, changes in business, certain restricted payments, repurchases and redemptions of our common
stock, going concern qualifications to our financial statements, and transactions with affiliates. In addition, the BofA
Credit Agreement also restricts our ability to make quarterly dividend distributions that exceed $0.01 per share of our
common stock; provided, however, that notwithstanding such restriction, we are permitted to make dividend
distributions based on our good faith estimate of projected or estimated taxable income or otherwise as necessary to
retain our 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 we would otherwise be subject. The BofA Credit
Agreement also contains financial covenants that require us 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. We were in
compliance with the BofA Term Loan financial covenants as of December 31, 2024.

41
or BofA under the BofA Credit Agreement and related documents. For certain events of default related to bankruptcy,
insolvency, and receivership, all of our outstanding obligations will become immediately due and payable.

Senior Notes

We have senior notes in the aggregate principal amount of approximately $123.6 million as of December 31,
2024, which we refer to as 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, which we refer to as
the Series A Notes, and (ii) Series B Senior Notes due April 1, 2026 in the aggregate principal amount of approximately
$51.9 million, which we refer to as the Series B Notes. On February 21, 2024, we amended the terms of the Senior
Notes by entering into a First Amendment to Note Purchase Agreement, which we refer to as the NPA First Amendment,
with the purchasers party thereto. The NPA First Amendment amended the Note Purchase Agreement dated October 24,
2017, which we refer to as 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 us; (7) require that, within 90 days of the February 21, 2024 effective date of the NPA First Amendment,
certain of our subsidiaries guarantee the Senior Notes; (8) require that, within 90 days of the February 21, 2024 effective
date of the NPA First Amendment, we pledge our equity interests in certain of our 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. We refer to the Original Note Purchase Agreement, as
amended by the NPA First Amendment, as the Note Purchase Agreement.

On February 21, 2024, as part of the NPA First Amendment, we repaid an approximately $29.2 million portion
of the Series A Notes. In addition, on February 21, 2024, as part of the NPA First Amendment, we repaid an
approximately $21.2 million aggregate principal amount of the Series B Notes. On July 10, 2024, we 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, we 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.

42
Internal Revenue Code or to eliminate any income or excise taxes to which we would otherwise be subject. The Note
Purchase Agreement also contains financial covenants that require us 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. We
were in compliance with the Note Purchase Agreement financial covenants as of December 31, 2024.

Equity Offering

From time to time, we may issue debt securities, common stock, preferred stock or depository shares under a
registration statement to fund the acquisition of additional properties, to pay down any existing debt financing and for
other corporate purposes.

Stock Repurchases

On June 23, 2021, we announced that our Board of Directors had 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. On February 10, 2023, we disclosed in a Current Report on Form 8-K that our Board of Directors had
discontinued the repurchase authorization.

Contingencies

As of December 31, 2024, the Sponsored REIT Loan had $24 million principal amount outstanding. The
Sponsored REIT Loan is secured by a mortgage on the underlying property and has a current term of less than one year.
We anticipate that the Sponsored REIT Loan will be repaid through cash flow from property operations or sale of the
underlying property, although the actual amount and timing of any repayment is uncertain and will likely depend on
prevailing market conditions at the time of any such sale.

We may be subject to various legal proceedings and claims that arise in the ordinary course of our business.
Although occasional adverse decisions (or settlements) may occur, we believe that the final disposition of such matters
will not have a material adverse effect on our financial position or results of operations.

Loan to Sponsored REIT

The Sponsored REIT Loan is secured by a mortgage on the underlying property and has a current term of less
than one year. We anticipate that the Sponsored REIT Loan will be repaid through cash flow from property operations
or sale of the underlying property, although the actual amount and timing of any repayment is uncertain and will likely
depend on prevailing market conditions at the time of any such sale.

The Sponsored REIT Loan subjects us to credit risk. However, we believe that our position as asset manager of
the Sponsored REIT helps mitigate that risk by providing us with unique insight and the ability to rely on qualitative
analysis of the Sponsored REIT.

Additional information about the Sponsored REIT Loan outstanding as of December 31, 2024 is incorporated
herein by reference to Note 3, “Related Party Transactions and Investments in Non-Consolidated Entities - Management
fees and interest income from loans”, in the Notes to Consolidated Financial Statements included in this report.

Other Considerations

We generally pay the ordinary annual operating expenses of our owned and consolidated properties from the
rental revenue generated by the properties. For the three and twelve months ended December 31, 2024 and 2023,
respectively, the rental income exceeded the expenses for each individual property, with the exception of Monument
Circle for the three and twelve months ended December 31, 2024.

43
Monument Circle has approximately 214,000 square feet of rentable space comprised of both office and street
level retail space. The office component comprises approximately 95% of the rentable space and had been net leased to
a single corporate tenant through December 31, 2018. The retail component comprises the remaining approximately 5%
of the property’s rentable space. Monument Circle had approximately $85,000 and $302,000 of rental income, and,
$263,000 and $1,095,000 of operating expenses, for the three and twelve months ended December 31, 2024,
respectively, and was 4.1% leased to two retail tenants as of December 31, 2024.

Rental Income Commitments

Our commercial real estate operations include the leasing of office buildings subject to leases with terms greater
than one year. The leases thereon expire at various dates through 2037. Approximate undiscounted cash flows of rental
income from non-cancelable operating leases as of December 31, 2024 is:

Year ending

(in thousands)

December 31,

2025
$
69,392
2026

64,321
2027

54,286
2028

48,479
2029

40,699
Thereafter (2030-2037)

113,033

$
390,210

Contractual Obligations

The following table sets forth our contractual obligations as of December 31, 2024:

Payment due by period

Contractual

(in thousands)

Obligations

Total

2025

2026

2027

2028

2029
Thereafter
BofA Term Loan (1)

$
61,189
$
4,450
$ 56,739
$
—
$
—
$
—
$
—
BMO Term Loan Tranche B (1)

78,187
5,687

72,500
—

—

—
—
Series A Notes (1)

78,866
5,736

73,130
—

—

—
—
Series B Notes (1)

57,111
4,154

52,957
—

—

—
—
Operating Lease

763

436

327

—

—
Total

$ 276,116
$ 20,463
$ 255,653
$
—
$
—
$
—
$
—

(1) Amounts include principal and interest payments.

The operating lease in the table above consists of our lease of corporate office space, which commenced
September 1, 2010, and was amended on October 25, 2016 and on February 7, 2024. The amended lease expires on
September 30, 2026. The lease includes a base annual rent and additional rent for our share of taxes and operating costs.

Off-Balance Sheet Arrangements

Investments in Sponsored REITs

As of December 31, 2024, 2023 and 2022, we held a common stock interest in one Sponsored REIT, Monument
Circle, which is fully syndicated and in which we do not share economic benefit or risk. As a common stockholder, we
had no rights to the Sponsored REIT’s earnings or any related cash distributions. However, upon liquidation of the
sponsored REIT, we are entitled to our percentage interest as a common stockholder in any proceeds remaining after the
preferred stockholders have recovered their investment. Our common stock percentage interest in the sponsored REIT is
less than 1%. The affirmative vote of the holders of a majority of the Sponsored REIT’s preferred stockholders is
required for any actions involving merger, sale of property, amendment to charter or issuance of additional capital stock.
In addition, the Sponsored REIT allows the holders of more than 50% of the outstanding preferred shares to remove
(without cause) and replace one or more members of the Sponsored REIT’s board of directors.

44
As of December 31, 2024, the Sponsored REIT Loan had $24 million principal amount outstanding. Additional
information about the Sponsored REIT Loan as of December 31, 2024 is incorporated herein by reference to Note 2,
“Significant Accounting Policies - Variable Interest Entities (VIEs)” and Note 3, “Related Party Transactions and
Investments in Non-Consolidated Entities - Management fees and interest income from loans”, in the Notes to
Consolidated Financial Statements included in this report.

Item 7A.
Quantitative and Qualitative Disclosures About Market Risk.

Market Rate Risk

We are exposed to changes in interest rates primarily from our floating rate borrowing arrangements. As of
December 31, 2024 and December 31, 2023, if market rates on our outstanding borrowings under the BofA Term Loan
and the BofA Revolver, respectively, subject to a floating rate increased by 10% at maturity, or approximately 80 and 85
basis points, respectively, over the current variable rate, the increase in interest expense would have decreased future
earnings and cash flows by approximately $0.4 million and $0.8 million, respectively. The interest rate on the BofA
Term Loan as of December 31, 2024 and the BofA Revolver as of December 31, 2023, was SOFR plus an adjustment of
0.11448% plus 300 basis points, or 8.00% and 8.47% per annum, respectively. There was $55.6 million outstanding on
the BofA Term Loan and $90 million drawn on the BofA Revolver as of December 31, 2024 and December 31, 2023,
respectively. We do not believe that the interest rate risk on the BofA Term Loan is material as of December 31, 2024.

Although the interest rate on the BMO Term Loan is variable, the Company fixed the base LIBOR interest rate
on the BMO Term Loan by entering into interest rate swap agreements. On February 20, 2019, the Company fixed the
interest rate for the period beginning August 26, 2020 and ending January 31, 2024 on the BMO Term Loan with interest
rate swap agreements (the “2019 BMO Interest Rate Swap”). On February 8, 2023, we terminated all outstanding
interest rate swaps applicable to the BMO Term Loan and, on February 10, 2023, we 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, if market rates on our outstanding borrowings under the BMO Term Loan were
subject to a floating rate increased by 10% at maturity, or approximately 80 basis points over the current variable rate,
the increase in interest expense would have decreased future earnings and cash flows by approximately $0.6 million.
The interest rate on the BMO Term Loan as of December 31, 2024 was SOFR plus an adjustment of 0.11448% plus 300
basis points, or 8.00% per annum. We do not believe that the interest rate risk on the BMO Term Loan is material as of
December 31, 2024.

The following table presents, as of December 31, 2024, our contractual variable rate borrowings under our
BofA Term Loan, which matures on April 1, 2026, and under our BMO Term Loan Tranche B, which matures on April
1, 2026.

Payment due by period

(in thousands)

Total
2024 2025
2026
2027 2028 Thereafter
BofA Term Loan
$ 55,629 $ — $ — $ 55,629 $ — $ — $
—
BMO Term Loan Tranche B

71,082
—
— 71,082
—
—
—
Total
$ 126,711 $ — $ — $ 126,711 $ — $ — $
—

Item 8.
Financial Statements and Supplementary Data

The information required by this item is included in the financial pages following the Exhibit Index herein and
incorporated herein by reference. Reference is made to the Index to Consolidated Financial Statements in Item 15 of
Part IV.

Item 9.
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

Not applicable.

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.

46
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.

47
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.

48
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:

49
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.

50
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.

51
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.

F-1
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-2
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-3
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-4

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-5
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-6
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

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
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-7
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-8
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-9
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-10
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-11
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-12
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-13

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-14

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

F-15
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

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-16
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-17
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

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-18
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-19
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
days 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-20
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 1.50x to 1.25x; and (8) reduce the Company’s minimum unsecured interest coverage ratio from

F-21
1.75x to 1.25x. 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-22
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 1.50x to 1.25x; and (9) reduce the Company’s minimum unsecured interest coverage ratio from
1.75x to 1.25x. 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-23
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-24
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-25
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-26
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-27
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-28
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-29
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-30
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-31
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-32

Segment Net Operating Income (NOI)

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
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-33

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

(9)

—

8
2024

(8)

—

Allowance for credit losses

2022
$
—
4,237

—
4,237
2023

4,237
(4,237)

—

—
2024

—

F-34
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
Accumulate
d
Accumulate
d
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-35
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

CORPORATE HEADQUARTERS
Franklin Street Properties Corp.
401 Edgewater Place, Suite 200
Wakefield, MA 01880
Telephone: 800.950.6288
www.fspreit.com
STOCK LISTING
Franklin Street Properties Corp.’s
Common Stock trades on the
NYSE American under the symbol “FSP”
TRANSFER AGENT
Equiniti Trust Company, LLC
48 Wall Street, Floor 23
New York, NY 10005
OUTSIDE COUNSEL
Wilmer Cutler Pickering
Hale and Dorr LLP
60 State Street
Boston, MA 02109
Telephone: 617.526.6000
INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
Ernst & Young LLP
200 Clarendon Street
Boston, MA 02116
Telephone: 617.266.2000
INVESTOR RELATIONS CONTACT
Georgia Touma
Director of Investor Relations
Franklin Street Properties Corp.
401 Edgewater Place, Suite 200
Wakefield, MA 01880
Telephone: 877.686.9496
investorrelations@fspreit.com
PROPERTY PHOTO: ELDRIDGE GREEN - HOUSTON, TX
EXECUTIVE OFFICERS
Jeffrey B. Carter
President and Chief Investment Officer
John G. Demeritt
Executive Vice President,
Chief Financial Officer and Treasurer
Scott H. Carter
Executive Vice President,
General Counsel and Secretary
John F. Donahue
Executive Vice President
and President of
FSP Property Management LLC

Eriel Anchondo
Executive Vice President and
Chief Operating Officer
VIRTUAL ANNUAL
MEETING INFORMATION
Thursday, May 15, 2025
11:00 a.m., Eastern Time
virtualshareholdermeeting.com/FSP2025
BOARD OF DIRECTORS
George J. Carter*
Chairman and Chief Executive Officer
John N. Burke, CPA
Chair of the Audit Committee
Member of the Compensation and
Nominating and Corporate
Governance Committees
Brian N. Hansen
Member of the Nominating and
Corporate Governance Committee
Kenneth A. Hoxsie
Chair of the Nominating and
Corporate Governance Committee
Member of the Audit Committee
Dennis J. McGillicuddy
Member of the Audit Committee
Georgia Murray
Lead Independent Director
Member of the Audit and
Compensation Committees
Bruce J. Schanzer
Member of the Audit Committee
Milton P. Wilkins, Jr.
Chair of the Compensation Committee
Member of the Audit Committee
*Also an Executive Officer
of the Company
Franklin Street Properties Corp.

401 Edgewater Place
Suite 200
Wakefield, MA 01880
P 800.950.6288
www.fspreit.com