Franklin Street Properties (FSP) risk factors, FY2025 10-K

Franklin Street Properties's FY2025 10-K, filed Mar 09, 2026, lists 29 risk factors in 5 groups. Against the prior year's 31: 6 new, 8 dropped, 6 substantially reworded.

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Risk factors listed
295 groups
New this year
6vs 31 last year
Dropped
8since the prior 10-K
Substantially reworded
6of those kept
Section length
6k wordsItem 1A

What the changes say

  • Franklin Street Properties entered a new $320 million credit agreement, suspended quarterly dividends, and updated geographic and tenant concentrations.

What changed since the prior 10-K

New

  • NewRisks Related to our Operations and Properties

    We are dependent on key personnel and if our Chief Executive Officer and Chairman of the Board of Directors ceases to serve in such position, we may be obligated to pay all outstanding obligations under the Credit Agreement

    The $320 million credit agreement requires us to use commercially reasonable efforts to replace CEO George J. Carter if he leaves.

  • NewRisks Related to our Indebtedness

    Failure to comply with covenants in the Credit Agreement could adversely affect our financial condition

    We entered into a $320 million credit agreement with Alter Domus containing strict financial and operating covenants.

  • NewRisks Related to Legal and Regulatory Matters

    We are subject to risks from changes in trade policies and tariffs

    Changes in trade policies or tariffs could harm our tenants' businesses and impair our ability to lease properties.

  • NewRisks Related to our Common Stock

    We have suspended quarterly dividends and may not resume paying dividends on our common stock, and may not elect to resume paying dividends in the foreseeable future or at all

    We suspended quarterly cash dividends and our new credit agreement caps dividends at $0.01 per share or REIT minimums.

  • NewRisks Related to our Common Stock

    If we fail to comply with the continued listing requirements of the NYSE American stock exchange, our common stock may be delisted and the price of our common stock and our ability to access capital markets could be negatively impacted

    A low stock price could lead to our common stock being delisted from the NYSE American exchange.

  • NewRisks Related to our Organization and Structure

    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

    Historical failures of acquired target REITs to qualify as REITs could disqualify us and result in significant tax liabilities.

Dropped

  • DroppedRisks 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

    Default on remaining Sponsored REIT Loan.

  • DroppedRisks Related to our Indebtedness

    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

    Refinancing BofA and BMO term loans and notes maturing April 2026.

  • DroppedRisks Related to our Indebtedness

    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

    Covenant compliance on maturing term loans and notes.

  • DroppedRisks Related to our Indebtedness

    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

    SOFR floor exposure on BMO Term Loan.

  • DroppedRisks Related to our Indebtedness

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

    Moody's credit rating downgrades.

  • DroppedRisks Related to our Indebtedness

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

    Interest rate penalty if debt not reduced by March 2025.

  • DroppedRisks Related to our Operations and Properties

    We are dependent on key personnel

  • DroppedRisks Related to our Common Stock

    Our level of dividends may fluctuate

Reworded

  • 59% rewrittenRisks Related to our Organization and Structure

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

    Updated to reflect potential tax consequences from past REIT acquisitions.

  • 46% rewrittenRisks Related to our Operations and Properties

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

    Expanded macroeconomic risk factors to include specific trade policies, tariffs, and geopolitical tensions with Venezuela and Greenland.

  • 44% rewrittenRisks Related to our Operations and Properties

    If we are not able to collect sufficient rents from each of our owned real properties, we may suffer significant operating losses

    Removed references to collecting interest income from the Sponsored REIT Loan.

    Was: 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

  • 30% rewrittenRisks Related to our Operations and Properties

    We face risks from geographic concentration

    Updated regional property concentrations to 44.5% West, 39.7% South, and 15.8% Midwest as of December 31, 2025.

  • 24% rewrittenRisks Related to our Operations and Properties

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

    Added disclosure that the new Credit Agreement dictates how asset sale proceeds must be used to repay debt.

  • 22% rewrittenRisks Related to our Operations and Properties

    We face risks of tenant-type concentration

    Added professional services industry concentration representing 10% of rentable square feet alongside 25% in energy services.

All 29 risk factors

Headings as the filing states them, in filing order.

Risks Related to our Operations and Properties

  1. 01Economic conditions in the United States could have a material adverse impact on our earnings and financial condition46% rewritten
  2. 02If we are not able to collect sufficient rents from each of our owned real properties, we may suffer significant operating losses44% rewritten
  3. 03We may not be able to dispose of properties on acceptable terms or within the time periods we anticipate pursuant to our disposition strategy24% rewritten
  4. 04We are dependent on key personnel and if our Chief Executive Officer and Chairman of the Board of Directors ceases to serve in such position, we may be obligated to pay all outstanding obligations under the Credit AgreementNew
  5. 05We face risks from tenant defaults or bankruptcies
  6. 06New acquisitions may fail to perform as expected
  7. 07We face risks in owning, developing, redeveloping and operating real property
  8. 08We may encounter significant delays in reletting vacant space, resulting in losses of income
  9. 09We face risks of tenant-type concentration22% rewritten
  10. 10We face risks from geographic concentration30% rewritten
  11. 11We compete with national, regional and local real estate operators and developers, which could adversely affect our cash flow
  12. 12We face possible risks associated with the physical effects of climate change
  13. 13Security breaches and other disruptions could compromise our information and expose us to liability, which could cause our business and reputation to suffer
  14. 14Actual or threatened terrorist attacks may adversely affect our ability to generate revenues and the value of our properties
  15. 15We may lose capital investment or anticipated profits if an uninsured event occurs

Risks Related to our Indebtedness

  1. 16Failure to comply with covenants in the Credit Agreement could adversely affect our financial conditionNew

Risks Related to Legal and Regulatory Matters

  1. 17We are subject to risks from changes in trade policies and tariffsNew
  2. 18We are subject to possible liability relating to environmental matters, and we cannot assure you that we have identified all possible liabilities
  3. 19We 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
  4. 20We face risks associated with our tenants being designated “Prohibited Persons” by the Office of Foreign Assets Control

Risks Related to our Common Stock

  1. 21We have suspended quarterly dividends and may not resume paying dividends on our common stock, and may not elect to resume paying dividends in the foreseeable future or at allNew
  2. 22The real properties held by us may significantly decrease in value
  3. 23Further issuances of equity securities may be dilutive to current stockholders
  4. 24The price of our common stock may vary
  5. 25If we fail to comply with the continued listing requirements of the NYSE American stock exchange, our common stock may be delisted and the price of our common stock and our ability to access capital markets could be negatively impactedNew

Risks Related to our Organization and Structure

  1. 26Our employee retention plan may prevent changes in control
  2. 27We would incur adverse tax consequences if we failed to qualify as a REIT59% rewritten
  3. 28REITs 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 acquisitionNew
  4. 29Provisions in our organizational documents may prevent changes in control

Other Franklin Street Properties 10-Ks

  • FY2024 10-K risk factors
    31 risks

    Franklin Street Properties faces substantial debt refinancing and covenant risks with multiple loans and notes maturing on April 1, 2026. The company is vulnerable to tenant defaults, vacancy delays, and geographic concentration in markets like Denver and Houston. Operations are exposed to industry concentration, with 25 percent of tenants operating in energy services.

    Filed Feb 11, 2025

About this page

The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.