UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒

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

For the quarterly period ended ~~September~~March 3031, ~~2024~~2025.

☐

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

For the transition period from to

Commission File Number: 001-32470

Franklin Street Properties Corp.

(Exact name of registrant as specified in its charter)


Maryland		04-3578653
(State or other jurisdiction of incorporation		(I.R.S. Employer Identification No.)
or organization)

401 Edgewater Place, Suite 200

Wakefield, MA 01880

(Address of principal executive offices)(Zip Code)

(781) 557-1300

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

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


Title of each class:	Trading Symbol	Name of each exchange on which registered:
Common Stock, $.0001 par value per share	FSP	NYSE American

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 is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares of common stock outstanding as of ~~October~~April 24, ~~2024~~2025, was 103,566,715.

Table of Contents

Franklin Street Properties Corp.
Form 10-Q

Quarterly ~~ReportSeptember~~ReportMarch 3031, ~~2024~~2025

Table of Contents


			Page
Part I.	Financial Information

	Item 1.	Financial Statements

		Consolidated Balance Sheets as of ~~September~~March 3031, ~~2024~~2025 and December 31, ~~2023~~2024	3

		Consolidated Statements of Operations for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024	4

		Consolidated Statements of Comprehensive Loss for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024	5

		Consolidated Statements of Stockholders’ Equity for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024	6

		Consolidated Statements of Cash Flows for the ~~nine~~three months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024	7

		Notes to Consolidated Financial Statements	8-20

	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21

	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4037

	Item 4.	Controls and Procedures	4038

Part II.	Other Information

	Item 1.	Legal Proceedings	4139

	Item 1A.	Risk Factors	4139

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4140

	Item 3.	Defaults Upon Senior Securities	4140

	Item 4.	Mine Safety Disclosures	4140

	Item 5.	Other Information	4140

	Item 6.	Exhibits	4241

Signatures			4342

Table of Contents

PART I — FINANCIAL INFORMATION

Item 1.Financial Statements

Franklin Street Properties Corp.

Consolidated Balance Sheets

(Unaudited)


	~~September~~March 3031,		December 31,
(in thousands, except share and par value amounts)	~~2024~~2025		~~2023~~2024
Assets:
Real estate assets:
Land (amounts related to variable interest entities ("VIEs") of $6,416 and $6,416 at September 30, 2024 and December 31, 2023, respectively)	$	105,298	$	110,298
Land (amounts related to variable interest entities ("VIEs") of $0 and $6,416 at March 31, 2025 and December 31, 2024, respectively)	$	98,882	$	105,298
Buildings and improvements (amounts related to VIEs of $13,279 and $13,279 at September 30, 2024 and December 31, 2023, respectively)		1,090,551		1,133,971
Buildings and improvements (amounts related to VIEs of $0 and $13,279 at March 31, 2025 and December 31, 2024, respectively)		1,083,971		1,096,265
Fixtures and equipment		1011,~~776~~289		1211,~~904~~053
		1,~~206~~194,~~625~~142		1,~~257~~212,~~173~~616
Less accumulated depreciation (amounts related to VIEs of $597 and $341 at September 30, 2024 and December 31, 2023, respectively)		369,276		366,349
Less accumulated depreciation (amounts related to VIEs of $0 and $682 at March 31, 2025 and December 31, 2024, respectively)		383,815		377,708
Real estate assets, net (amounts related to VIEs of $19,098 and $19,354 at September 30, 2024 and December 31, 2023, respectively)		837,349		890,824
Real estate assets, net (amounts related to VIEs of $0 and $19,013 at March 31, 2025 and December 31, 2024, respectively)		810,327		834,908
Acquired real estate leases, less accumulated amortization of $16,465 and $20,413, respectively (amounts related to VIEs of $67 and $305, less accumulated amortization of $30 and $222 at September 30, 2024 and December 31, 2023, respectively)		4,695		6,694
Acquired real estate leases, less accumulated amortization of $14,015 and $13,613, respectively (amounts related to VIEs of $0 and $67, less accumulated amortization of $0 and $35 at March 31, 2025 and December 31, 2024, respectively)		3,737		4,205
Assets held for sale		32,926		73,318
Asset held for sale (amounts related to VIEs of $5,685 and $0 at March 31, 2025 and December 31, 2024, respectively)		5,685		—
Cash, cash equivalents and restricted cash (amounts related to VIEs of $1,608 and $2,167 at September 30, 2024 and December 31, 2023, respectively)		42,375		127,880
Cash, cash equivalents and restricted cash (amounts related to VIEs of $1,218 and $1,314 at March 31, 2025 and December 31, 2024, respectively)		31,559		42,683
Tenant rent receivables		1,~~349~~462		21,~~191~~283
Straight-line rent receivable		3837,~~432~~724		4037,~~397~~727
Prepaid expenses and other assets		3,~~243~~429		43,~~239~~114
Office computers and furniture, net of accumulated depreciation of $1,063 and $1,020, respectively		80		123
Office computers and furniture, net of accumulated depreciation of $1,081 and $1,073, respectively		62		70
Deferred leasing commissions, net of accumulated amortization of $14,724 and $16,008, respectively		21,064		23,664
Deferred leasing commissions, net of accumulated amortization of $14,373 and $14,195, respectively		22,381		22,941
Total assets	$	~~981~~916,~~513~~366	$	1946,~~169,330~~931

Liabilities and Stockholders’ Equity:
Liabilities:
Bank note payable	$	—	$	90,000
Term loans payable, less unamortized financing costs of $1,773 and $2,220, respectively	$	124,861	$	124,491
Term loans payable, less unamortized financing costs of $2,956 and $293, respectively		137,601		114,707
Series A & Series B Senior Notes, less unamortized financing costs of $950 and $1,191, respectively		122,595		122,430
Series A & Series B Senior Notes, less unamortized financing costs of $1,585 and $329, respectively		135,545		199,670
Accounts payable and accrued expenses (amounts related to VIEs of $663 and $534 at March 31, 2025 and December 31, 2024, respectively)		27,510		34,067
Accounts payable and accrued expenses (amounts related to VIEs of $643 and $590 at September 30, 2024 and December 31, 2023, respectively)		32,821		41,879
Accrued compensation		1,205		3,097
Accrued compensation		3,193		3,644
Tenant security deposits		6,156		6,237
Tenant security deposits		6,120		6,204
Lease liability		612		707
Lease liability		763		334
Acquired unfavorable real estate leases, less accumulated amortization of $92 and $89, respectively		41		45
Acquired unfavorable real estate leases, less accumulated amortization of $310 and $396, respectively		51		87
Total liabilities		282,980		291,074
Total liabilities		316,094		456,525

Commitments and contingencies

Stockholders’ Equity:
Preferred stock, $.0001 par value, 20,000,000 shares authorized, none issued or outstanding		—		—
Common stock, $.0001 par value, 180,000,000 shares authorized, 103,566,715 and 103,430,353 shares issued and outstanding, respectively		10		10
Common stock, $.0001 par value, 180,000,000 shares authorized, 103,566,715 and 103,566,715 shares issued and outstanding, respectively		10		10
Additional paid-in capital		1,335,361		1,335,~~091~~361
Accumulated other comprehensive income		—		~~355~~—
Accumulated distributions in excess of accumulated earnings		(~~669~~701,~~952~~985)		(~~622~~679,~~651~~514)
Total stockholders’ equity		~~665~~633,~~419~~386		~~712~~655,~~805~~857
Total liabilities and stockholders’ equity	$	~~981~~916,~~513~~366	$	1946,~~169,330~~931

The accompanying notes are an integral part of these consolidated financial statements.

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Franklin Street Properties Corp.

Consolidated Statements of Operations

(Unaudited)



	For the Three Months Ended ~~September~~March 3031,				~~For the Nine Months Ended September 30,~~
(in thousands, except per share amounts)	~~2024~~2025		~~2023~~2024		~~2024~~		~~2023~~

Revenues:
Rental	$	2927,~~662~~107	$	3631,~~903~~225	$	~~91,705~~	$	~~110,927~~
Other		20		—		32		9
Total revenues		27,107		31,225
Total revenues		29,682		36,903		91,737		110,936
Expenses:
Expenses:
Real estate operating expenses		10,095		11,019
Real estate operating expenses		11,574		12,797		33,620		37,627
Real estate taxes and insurance		5,369		5,936
Real estate taxes and insurance		5,512		7,115		17,175		21,257
Depreciation and amortization		10,824		11,625
Depreciation and amortization		10,911		13,408		34,018		42,780
General and administrative		3,484		4,159
General and administrative		3,275		3,265		11,069		10,849
Interest		5,691		6,846
Interest		6,585		6,209		20,513		18,099
Total expenses		35,463		39,585
Total expenses		37,857		42,794		116,395		130,612


Loss on extinguishment of debt		(2)		(137)
Loss on extinguishment of debt		(477)		(39)		(614)		(106)
Loss on sale of properties and impairment of assets held for sale, net		(13,284)		(5)
Gain on consolidation of Sponsored REIT		—		—		—		394
Interest income		259		1,008
Loss on sale of properties and impairment of assets held for sale, net		(7,254)		(39,671)		(20,459)		(32,085)
Loss before taxes		(21,383)		(7,494)
Interest income		340		—		1,696		—
Tax expense		52		58
Loss before taxes		(15,566)		(45,601)		(44,035)		(51,473)

Tax expense		56		70		162		212
Net loss	$	(21,435)	$	(7,552)

Net loss	$	(15,622)	$	(45,671)	$	(44,197)	$	(51,685)
Weighted average number of shares outstanding, basic and diluted		103,567		103,430

Weighted average number of shares outstanding, basic and diluted		103,567		103,430		103,492		103,333
Net loss per share, basic and diluted	$	(0.21)	$	(0.07)

Net loss per share, basic and diluted	$	(0.15)	$	(0.44)	$	(0.43)	$	(0.50)

The accompanying notes are an integral part of these consolidated financial statements.

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Franklin Street Properties Corp.

Consolidated Statements of Comprehensive Loss

(Unaudited)


	For the				~~For the~~
	Three Months Ended				~~Nine Months Ended~~
	~~September~~March 3031,				~~September 30,~~
(in thousands)	~~2024~~2025		~~2023~~2024		~~2024~~		~~2023~~

Net loss	$	(1521,~~622~~435)	$	(457,~~671~~552)	$	~~(44,197)~~	$	~~(51,685)~~

Other comprehensive income (loss):
Other comprehensive loss:
Unrealized gain on derivative financial instruments		—		—		—		177
Reclassification from accumulated other comprehensive income into interest expense		—		(355)
Reclassification from accumulated other comprehensive income into interest expense		—		(1,063)		(355)		(3,118)


Total other comprehensive loss		—		(355)
Total other comprehensive loss		—		(1,063)		(355)		(2,941)


Comprehensive loss	$	(21,435)	$	(7,907)
Comprehensive loss	$	(15,622)	$	(46,734)	$	(44,552)	$	(54,626)

The accompanying notes are an integral part of these consolidated financial statements.

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Franklin Street Properties Corp.

Consolidated Statements of Stockholders’ Equity

(Unaudited)


						Accumulated		Distributions
				Additional		other		in excess of		Total
	Common Stock			Paid-In		comprehensive		accumulated		Stockholders’
(in thousands, except per share amounts)	Shares	Amount		Capital		income (loss)		earnings		Equity

Balance, December 31, 2022	103,236	$	10	$	1,334,776	$	4,358	$	(570,408)	$	768,736
Comprehensive income (loss)	—		—		—		(814)		2,406		1,592
Distributions $0.01 per share of common stock	—		—		—		—		(1,033)		(1,033)
Balance, March 31, 2023	103,236	$	10	$	1,334,776	$	3,544	$	(569,035)	$	769,295
Comprehensive loss	—		—		—		(1,064)		(8,420)		(9,484)
Equity-based compensation	194		—		315		—		—		315
Distributions $0.09 per share of common stock	—		—		—		—		(1,032)		(1,032)
Balance, June 30, 2023	103,430	$	10	$	1,335,091	$	2,480	$	(578,487)	$	759,094
Comprehensive loss	—		—		—		(1,063)		(45,671)		(46,734)
Distributions $0.01 per share of common stock	—		—		—		—		(1,034)		(1,034)
Balance, September 30, 2023	103,430	$	10	$	1,335,091	$	1,417	$	(625,192)	$	711,326

Balance, December 31, 2023	103,430	$	10	$	1,335,091	$	355	$	(622,651)	$	712,805
Comprehensive loss	—		—		—		(355)		(7,552)		(7,907)
Distributions $0.01 per share of common stock	—		—		—		—		(1,034)		(1,034)
Balance, March 31, 2024	103,430	$	10	$	1,335,091	$	—	$	(631,237)	$	703,864
Comprehensive loss	—		—		—		—		(21,023)		(21,023)

Equity-based compensation	137		—		270		—		—		270
Balance, December 31, 2024	103,567	$	10	$	1,335,361	$	—	$	(679,514)	$	655,857
Distributions $0.01 per share of common stock	—		—		—		—		(1,034)		(1,034)
Comprehensive loss	—		—		—		—		(21,435)		(21,435)
Balance, June 30, 2024	103,567	$	10	$	1,335,361	$	—	$	(653,294)	$	682,077
Comprehensive loss	—		—		—		—		(15,622)		(15,622)
Distributions $0.01 per share of common stock	—		—		—		—		(1,036)		(1,036)
Balance, September 30, 2024	103,567	$	10	$	1,335,361	$	—	$	(669,952)	$	665,419
Balance, March 31, 2025	103,567	$	10	$	1,335,361	$	—	$	(701,985)	$	633,386

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

Franklin Street Properties Corp.

Consolidated Statements of Cash Flows

(Unaudited)


	For the ~~Nine~~Three Months Ended ~~September~~March 3031,
(in thousands)	~~2024~~2025		~~2023~~2024
Cash flows from operating activities:
Net loss	$	(4421,~~197~~435)	$	(517,~~685~~552)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization expense		3611,~~284~~509		4412,~~705~~305
Amortization of above and below market leases		~~(17)~~—		(396)
Shares issued as compensation		270		315
Amortization of other comprehensive income into interest expense		—		(355)
Amortization of other comprehensive income into interest expense		(355)		(2,789)
Loss on extinguishment of debt		2		137
Loss on extinguishment of debt		614		106
Loss on sale of properties and impairment of assets held for sale, net		13,284		5
Gain on consolidation of Sponsored REIT		—		(394)
Loss on sale of properties and impairment of assets held for sale, net		20,459		32,085
Changes in operating assets and liabilities:
Tenant rent receivables		~~842~~(179)		(~~653~~9)
Straight-line rents		~~1,249~~70		~~427~~206
Lease acquisition costs		(~~660~~74)		(~~903~~122)
Prepaid expenses and other assets		~~314~~(225)		(~~644~~400)
Accounts payable and accrued expenses		(45,~~364~~914)		(26,~~516~~677)
Accrued compensation		(~~451~~1,892)		(~~465~~2,448)
Tenant security deposits		(8481)		~~(79)~~64
Payment of deferred leasing commissions		(~~3,168~~546)		(52,~~926~~236)
Net cash provided by operating activities		6,736		11,545
Net cash used in operating activities		(5,481)		(7,088)
Cash flows from investing activities:
Property improvements, fixtures and equipment		(194,~~074~~454)		(268,~~024~~759)
Consolidation of Sponsored REIT		—		3,048
Proceeds received from sales of properties		—		34,329
Proceeds received from sales of properties		62,909		37,062
Net cash provided by (used in) investing activities		(4,454)		25,570
Net cash provided by investing activities		43,835		14,086
Cash flows from financing activities:
Distributions to stockholders		(31,~~104~~036)		(31,~~099~~034)
Proceeds received from termination of interest rate swap		—		4,206
Repayments of Bank note payable		—		(22,667)
Borrowings under Bank note payable		—		67,000
Repayments of Term loans payable		(77)		(28,963)
Repayments of Bank note payable		(22,667)		(35,000)
Repayments of Series A&B Senior Notes		(76)		(50,370)
Repayments of Term loans payable		(41,775)		(50,000)
Deferred financing costs		—		(5,549)
Repayments of Series A&B Senior Notes		(62,870)		—
Net cash used in financing activities		(1,189)		(108,583)
Deferred financing costs		(5,660)		(2,327)
Net decrease in cash, cash equivalents and restricted cash		(11,124)		(90,101)
Net cash used in financing activities		(136,076)		(19,220)
Cash, cash equivalents and restricted cash, beginning of year		42,683		127,880
Net increase (decrease) in cash, cash equivalents and restricted cash		(85,505)		6,411
Cash, cash equivalents and restricted cash, end of period	$	31,559	$	37,779
Cash, cash equivalents and restricted cash, beginning of year		127,880		6,632
Cash, cash equivalents and restricted cash, end of period	$	42,375	$	13,043

Supplemental disclosure of cash flow information:
Cash paid for:
Interest	$	162,~~038~~510	$	164,~~704~~328
Taxes	$	372	$	337
Non-cash investing activities:
Accrued costs for purchases of real estate assets	$	2,~~266~~060	$	2,~~562~~444
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
Accrued deferred financing costs	$	—	$	11

The accompanying notes are an integral part of these consolidated financial statements.

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Franklin Street Properties Corp.
Notes to Consolidated Financial Statements
(Unaudited)

1. Organization, Properties, Basis of Presentation, Financial Instruments and Recent Accounting Standards

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 ~~September~~March 3031, ~~2024~~2025, the Company owned and operated a portfolio of real estate consisting of 1514 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.

Properties

The following table summarizes the Company’s number of owned and consolidated properties and rentable square feet of real estate.


	As of ~~September~~March 3031,
	~~2024~~2025	~~2023~~2024
Owned and Consolidated Properties:
Number of properties (1)	1615	2017
Rentable square feet	5,~~180~~020,~~158~~216	65,~~206~~478,~~460~~176

(1) Includes one property ~~and three properties~~ that ~~were~~was classified as ~~assets~~an asset held for sale as of ~~September~~March 3031, ~~2024~~2025 and ~~September 30, 2023, respectively~~2024.

Basis of Presentation

The unaudited consolidated financial statements of the Company include all of the accounts of the Company and its majority-owned and controlled subsidiaries. All significant intercompany balances and transactions have been eliminated. These financial statements should be read in conjunction with the Company’s consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for its fiscal year ended December 31, ~~2023~~2024, as filed with the Securities and Exchange Commission.

The accompanying interim financial statements are unaudited; however, the financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and in conjunction with the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the disclosures required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting solely of normal recurring matters) necessary for a fair presentation of the financial statements for these interim periods have been included. Operating results for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2024~~2025 are not necessarily indicative of the results that may be expected for the year ending December 31, ~~2024~~2025 or for any other period.

~~Financial~~Liquidity ~~Instruments~~and Management’s Plan

As ~~disclosed~~of inApril ~~Note~~29, 42025, the Company’s ~~derivatives~~had ~~were~~aggregate ~~recorded~~outstanding atindebtedness ~~fair~~under ~~value~~three ~~using~~unsecured ~~Level~~loans, 2the ~~inputs~~BofA ~~prior~~Term toLoan, ~~their~~the ~~termination~~BMO onTerm ~~February~~Loan 8,and ~~2023. The~~the ~~Company~~Senior ~~estimates~~Notes ~~that~~(each ~~the~~as ~~carrying~~defined ~~values~~and ofdescribed ~~cash~~in ~~and~~Note ~~cash~~2 ~~equivalents~~below), ~~restricted~~totaling ~~cash~~approximately $250.2 million and maturing on April 1, ~~receivables~~2026, ~~prepaid~~which ~~expenses,~~is ~~accounts~~within ~~payable~~12 ~~and~~months ~~accrued~~of ~~expenses,~~the ~~accrued~~date ~~compensation,~~of ~~and~~issuance ~~tenant~~of ~~security~~the ~~deposits~~financial statements accompanying this Quarterly Report on Form 10-Q.

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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 or at rates that are at market for similar investments.

Management intends to engage in discussions with the Company’s lenders and/or third party financing sources to extend or refinance the Company’s existing debt. Management believes that it is more likely than not that the Company will be successful in extending the maturity date or refinancing all of its existing debt. Accounting Standards Codification (ASC) 205-40, “Presentation of Financial Statements— Going Concern”, requires management to consider whether there is substantial doubt regarding the Company’s ability to continue as a going concern as a result of uncertainty about the maturity of the Company’s debt on April 1, 2026. Although management believes that it is more likely than not that the Company will be able to extend the maturity date or retire the existing debt through a refinancing and/or asset sales, guidance issued under ASC 205-40 requires that management not conclude that such an outcome is “probable” if, among other factors, the outcome is not within the control of the Company. Because no such restructuring, refinancing or sale transactions have closed, such outcomes are not within the control of the Company; therefore, for accounting purposes, management is unable to conclude that such an outcome is probable. Accordingly, ASC 205-40 requires management to conclude that there is substantial doubt about the Company’s ability to continue as a going concern for at least one year following the date of issuance of these financial statements.

While management believes that it is more likely than not that the Company will be able to extend the maturity dates applicable to, or retire, the BofA Term Loan, the BMO Term Loan and the Senior Notes through a refinancing and/or asset sales, there is no assurance that the Company will be able to do so. The failure to extend the maturity dates applicable to, or retire, the BofA Term Loan, the BMO Term Loan and the Senior Notes through a refinancing and/or asset sales could lead to events of default, which would have a material adverse effect on the Company’s financial condition.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern and do not include any adjustments that might result from the outcome of this uncertainty.

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 term loans payable approximate their fair values as they bear interest at variable interest rates or at rates that are at market for similar investments.

Cash, Cash Equivalents and Restricted Cash

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.


	~~September~~March 3031,		~~September~~March 3031,
(in thousands)	~~2024~~2025		~~2023~~2024
Cash and cash equivalents (1)	$	4030,~~861~~167	$	1334,~~043~~179
Restricted cash		1,~~514~~392		—3,600
Total cash, cash equivalents and restricted cash	$	4231,~~375~~559	$	1337,~~043~~779

(1) Includes $1,608 and $2,445 at September 30, 2024 and 2023, respectively, pertaining to Monument Circle, which the Company is unable to utilize for its own operational purposes.
(1) Includes $1,218 and $2,080 at March 31, 2025 and 2024, respectively, pertaining to Monument Circle, which the Company is unable to utilize for its own operational purposes.

Restricted cash consists of escrows arising from property sales. Cash held in escrow is paid based on the terms of the closing agreements for the sale.

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.

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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.

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.

9Management fees and interest income from loans:

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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~~Asset ~~Company~~management ~~assessed~~fees ~~the~~range ~~fair~~from ~~value~~1% to 5% of collected rents and the ~~acquired~~applicable ~~real~~contracts ~~estate~~are ~~leases~~cancellable ~~based~~with on30 ~~estimated~~days ~~cash~~notice. The ~~flow~~Company ~~projections~~recognized ~~that~~no ~~utilize~~asset ~~appropriate~~management ~~discount~~fee ~~rates~~income ~~and~~from ~~available~~non-consolidated ~~market~~entities ~~information.~~for ~~Such~~each ~~inputs~~of ~~are~~the ~~Level~~three 3months inended ~~the~~March ~~fair~~31, ~~value~~2025 ~~hierarchy~~and 2024.

The ~~following~~Company ~~table~~recognized ~~summarizes~~no ~~the~~interest ~~estimated~~income ~~fair~~and ~~value~~fees offrom the ~~assets~~Sponsored ~~acquired~~REIT atLoan ~~the~~for ~~date~~each of ~~consolidation,~~the ~~January~~three 1months ended March 31, ~~2023:~~2025 and 2024.


(in thousands)

Real estate assets	$	19,695
Value of acquired real estate leases		305
Total	$	20,000

~~The~~On ~~following~~October is29, ~~quantitative~~2021, ~~information~~the ~~about~~Company ~~significant~~agreed ~~unobservable~~to ~~inputs~~amend inand restate the ~~Company’s~~then ~~Level~~existing Sponsored REIT Loan to extend the maturity date from December 6, 2022 to June 30, 2023 and to advance an additional $3.0 ~~measurement~~million tranche of indebtedness to Monument Circle with the ~~assets~~same ~~acquired~~June in30, 2023 maturity date, effectively increasing the ~~consolidation~~aggregate principal amount 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 ~~and~~the ~~were~~right ~~measured~~to atvote ~~fair~~their ~~value~~shares onin afavor ~~nonrecurring~~of ~~basis~~any atsale of the property owned by Monument Circle any time on or after January 1, 2023:. 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 further extended to September 30, 2024. On September 27, 2024, the Sponsored REIT Loan maturity was further extended to September 30, 2025.


	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.

The relationships and investments related to the Sponsored REIT are summarized in Note 2.

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 requirements 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. Early adoption is permitted. The Company does not anticipate that the adoption of ASU 2023-07 will have a material impact on the consolidated financial statements.

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Ineffective ~~December~~when ~~2023,~~ the ~~FASB~~removal ~~issued~~of ~~ASU~~the ~~No.~~related ~~2023-09,~~SEC ~~Income~~disclosure ~~Taxes~~requirements ~~(Topic~~is ~~740): Improvements to Income Tax Disclosures (“ASU 2023-09”)~~effective. ~~ASU~~If ~~2023-09 enhances~~ the ~~transparency~~SEC ~~and~~does ~~decision~~not ~~usefulness~~act ofto ~~income~~remove ~~tax~~its ~~disclosures~~related ~~and~~requirements ~~disclosures~~by ~~about~~June ~~income~~30, ~~taxes~~2027, ~~paid. The~~any ~~guidance~~related inFASB ~~ASU~~amendments ~~2023-09~~will ~~should~~ be ~~applied~~removed ~~prospectively~~from ~~but~~the ~~may~~Accounting beStandards ~~applied~~Codification ~~retrospectively~~and ~~for~~will ~~each~~not ~~period~~be ~~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 2023-0906 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. Early adoption was permitted. The Company adopted ASU 2023-07 for the fiscal year ended December 31, 2024, which did not have a material impact on the consolidated financial statements.

2In December 2023, the FASB issued ASU No. ~~Related~~ ~~Party~~2023-09, ~~Transactions~~Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 enhances the transparency and ~~Investments~~decision usefulness of income tax disclosures and disclosures about income taxes paid. The guidance in ~~Non~~ASU 2023-~~Consolidated~~09 ~~Entities~~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 adopted ASU 2023-09 on January 1, 2025, which did not have a material impact on the consolidated financial statements.

~~Management~~In ~~fees~~November ~~and~~2024, ~~interest~~the ~~income~~FASB ~~from~~issued ~~loans~~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.

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 and $0 for the nine months ended September 30, 2024 and 2023, 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 fair value, 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 is 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 outstanding Sponsored REIT Loan is secured by a mortgage on the underlying property and the balances within the borrower’s cash accounts.

The Company recognized no interest income and fees from the Sponsored REIT Loan for the nine months ended September 30, 2024 and 2023, respectively.

On October 29, 2021, the Company agreed to amend and restate the then existing 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 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. 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 decrease in its provision for credit losses during the three months ended March 31, 2023~~. ~~The~~ Term ~~change~~Loans inPayable ~~the~~and ~~allowance~~Senior for credit losses during the three months ended March 31, 2023 was due to the consolidation of Monument Circle. There were no adjustments during the nine months ended September 30, 2024. The following table presents a roll-forward of the Company’s allowance for credit losses. Notes

BMO Term Loan

As of March 31, 2025, the Company has a term loan borrowing in the aggregate principal amount of approximately $71.0 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

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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 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”.


	For the Nine Months Ended September 30,
(In thousands)		2024		2023

Beginning allowance for credit losses	$	—	$	(4,237)
Additional increases to the allowance for credit losses		—		—
Reductions to the allowance for credit losses		—		4,237
Ending allowance for credit losses	$	—	$	—

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. On March 6, 2025, the Company repaid an approximately $43,000 portion of the BMO Term Loan from an escrow collected on March 4, 2025, which had been held from the sale of a property located in Glen Allen, Virginia.

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. Effective April 1, 2025, the spread over SOFR or the base rate, as applicable, permanently increased 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 March 31, 2025 and December 31, 2024, the interest rate on the BMO Term Loan was 8.00% and 8.00% per annum, respectively. As of April 1, 2025, the interest rate on the BMO Term Loan was 9.00%. The weighted average variable interest rate on all amounts outstanding under the BMO Term Loan was 8.00% and 8.34% for the three months ended March 31, 2025 and the year ended December 31, 2024, respectively.

3Although 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. ~~Bank~~ ~~Note~~On ~~Payable~~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 ~~Loans~~Loan ~~Payable~~at 2.39% per annum for the period beginning on August 26, 2020 and ~~Senior~~ending ~~Notes~~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 March 31, 2025.

As of September 30, 2024, the Company has a term loan borrowing in the aggregate principal amount of approximately $78.8 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~~provides ~~September~~for ~~27,~~customary ~~2018~~events (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~~default ~~basis points or 200 basis points over the base rate~~ with acorresponding ~~floor~~grace ~~on the base rate of 600 basis points; (3) provide that~~periods, ~~if,~~including asfailure ofto ~~March~~pay ~~31,~~any ~~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~~interest ~~base~~when ~~rate~~due, ascertain ~~applicable,~~cross ~~will~~defaults ~~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%~~change 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~~control 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 1.75x to 1.25x. The Original BMO Credit Agreement, as ~~amended~~defined byin the BMO ~~First Amendment and the BMO Second Amendment, is referred to as the BMO Credit Agreement.~~

As of September 30, 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 8.44% for the nine months ended September 30, 2024. As of December 31, 2023, the interest rate on the BMO Term Loan was 8.47% per annum. The weighted average

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~~variable~~Credit ~~interest~~Agreement). ~~rate~~In onthe ~~all~~event ~~amounts~~of ~~outstanding~~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 ~~Term~~Credit ~~Loan~~Agreement ~~from~~immediately ~~February~~due 8,and ~~2023~~payable, ~~which~~terminate isthe ~~when~~lenders’ commitments to make loans under the ~~Company~~BMO ~~terminated~~Credit ~~its~~Agreement, ~~outstanding~~and ~~interest~~enforce ~~rate~~any ~~swaps~~and ~~applicable~~all torights of the lenders or administrative agent under the BMO ~~Term~~Credit ~~Loan~~Agreement asand ~~described~~related ~~below,~~documents. ~~through~~For ~~December~~certain 31events of default related to bankruptcy, ~~2023~~insolvency, ~~was~~and ~~approximately~~receivership, ~~8.11%~~the ~~per~~commitments ~~annum~~of lenders will be automatically terminated and all outstanding obligations of the Company will become immediately due and payable.

~~Although~~BofA ~~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~~As ~~BMO~~of ~~Credit~~March ~~Agreement~~31, ~~contains~~2025, ~~customary~~the ~~affirmative~~Company ~~and~~has ~~negative~~a ~~covenants~~term ~~for~~loan ~~credit~~borrowing ~~facilities~~in the aggregate principal amount of ~~this~~approximately ~~type,~~$55.6 ~~including~~million ~~limitations~~(the “BofA Term Loan”) with ~~respect~~Bank toof ~~indebtedness~~America, ~~liens,~~N.A. ~~investments,~~as ~~mergers~~administrative agent, and ~~acquisitions~~other lending institutions party thereto that matures on April 1, ~~disposition~~2026. ofPrior ~~assets~~to February 21, ~~use~~2024, ofwe ~~net~~referred ~~cash~~to ~~proceeds~~the ~~from~~BofA Term Loan as the ~~disposition~~BofA ofRevolver. ~~property~~On February 21, ~~assets~~2024, ~~and~~the ~~equity~~Company ~~issuances~~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, ~~mandatory~~2022 ~~prepayments~~(the Original BofA Credit Agreement, as amended by the ~~requirement~~First Amendment to ~~have~~Credit ~~certain~~Agreement ~~subsidiaries~~dated ~~provide~~February ~~guarantees~~10, 2023 (the ~~requirement~~“BofA First Amendment”) to, ~~pledge~~among ~~the~~other ~~Company’s~~things: ~~equity~~(1) ~~interests~~extend inthe ~~certain~~maturity ~~subsidiaries~~date asfrom ~~collateral~~October 1, ~~changes~~2024 into ~~business~~April 1, ~~certain~~2026; ~~restricted~~(2) ~~payments,~~convert ~~repurchases~~borrowings ~~and~~from ~~redemptions~~being either revolving loans or letters of credit to a term loan; (3) change the ~~Company’s~~interest ~~common~~rate ~~stock,~~from ~~going~~either ~~concern~~300 ~~qualifications~~basis topoints over SOFR or 200 basis points over the ~~Company’s~~base ~~financial~~rate ~~statements,~~to ~~and~~either ~~transactions~~300 basis points over SOFR with ~~affiliates.~~a Infloor ~~addition,~~on SOFR of 500 basis points or 200 basis points over the ~~BMO~~base ~~Credit~~rate ~~Agreement~~with ~~also~~a ~~restricts~~floor on the ~~Company’s~~base ~~ability~~rate toof ~~make~~600 ~~quarterly~~basis ~~dividend~~points; ~~distributions~~(4) provide that, ~~exceed~~if, ~~$0.01~~as ~~per~~of ~~share~~March of31, 2025, the ~~Company’s~~aggregate ~~common~~principal ~~stock;~~amount ~~provided,~~outstanding ~~however,~~under ~~that~~the ~~notwithstanding~~BMO ~~such~~Term ~~restriction~~Loan, the ~~Company~~BofA isTerm ~~permitted~~Loan toand ~~make~~the ~~dividend~~Senior ~~distributions~~Notes ~~based~~exceeds on$200 million, the ~~Company’s~~spread ~~good~~over ~~faith~~SOFR ~~estimate~~will ofpermanently ~~projected~~increase orby ~~estimated~~100 ~~taxable~~basis ~~income~~points orfrom ~~otherwise~~300 asbasis ~~necessary~~points to ~~retain~~400 basis points in the ~~Company’s~~case ~~status~~of asSOFR, aand ~~real~~from ~~estate~~200 ~~investment~~basis ~~trust,~~points to ~~meet~~300 basis points in the ~~distribution~~case ~~requirements~~of the base rate; (5) require mandatory prepayments of ~~Section~~the ~~857~~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 ~~Internal~~BMO ~~Revenue~~Term ~~Code~~Loan; or(b) 20.00000% to ~~eliminate~~the ~~any~~BofA ~~income~~Term orLoan; ~~excise~~(c) ~~taxes~~44.44444% to ~~which~~the Senior Notes; and (d) the ~~Company~~remaining ~~would~~10% ~~otherwise~~to be ~~subject.~~retained ~~The~~by ~~BMO~~the ~~Credit~~Company; ~~Agreement~~(6) ~~also~~require ~~contains~~that, ~~financial~~within ~~covenants~~90 ~~that~~days ~~require~~of the ~~Company~~February to21, ~~maintain~~2024 aeffective ~~minimum~~date ~~tangible~~of ~~net~~the ~~worth~~BofA Second Amendment, acertain ~~maximum~~of ~~leverage~~the ~~ratio~~Company’s subsidiaries guarantee the BofA Term Loan; (7) require that, awithin ~~maximum~~90 ~~secured~~days ~~leverage~~of ~~ratio~~the February 21, a2024 ~~maximum~~effective ~~secured~~date ~~recourse~~of ~~leverage~~the ~~ratio~~BofA Second Amendment, athe 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, afrom ~~maximum~~1.50x ~~unencumbered~~to ~~leverage~~1.25x; ~~ratio,~~ and (9) reduce the Company’s minimum unsecured interest coverage ratio from 1.75x to 1.25x. The ~~Company~~Original ~~was~~BofA inCredit ~~compliance~~Agreement, ~~with~~as amended by the ~~BMO~~BofA ~~Term~~First ~~Loan~~Amendment ~~financial~~and ~~covenants~~the BofA Second Amendment, is referred to as ofthe ~~September~~“BofA ~~30,~~Credit ~~2024~~Agreement”.

~~The~~On ~~BMO~~February ~~Credit~~21, ~~Agreement~~2024, ~~provides~~as ~~for~~part ~~customary events~~ of ~~default~~the ~~with~~BofA ~~corresponding~~Second ~~grace periods~~Amendment, ~~including~~the ~~failure~~Company torepaid ~~pay~~an ~~any~~approximately ~~principal~~$22.7 ormillion ~~interest~~portion ~~when~~of ~~due,~~the ~~certain~~BofA ~~cross~~Revolver. On ~~defaults~~July ~~and~~10, a2024, ~~change in control of~~ the Company ~~(as~~repaid ~~defined~~an inapproximately ~~the BMO Credit Agreement)~~$5.6 Inmillion ~~the~~portion ~~event~~ of ~~a default by~~ the ~~Company,~~BofA ~~the~~Term ~~administrative~~Loan ~~agent~~from ~~may,~~asset ~~and~~sale atproceeds ~~the request~~ of ~~the~~a ~~requisite~~property ~~number~~located ofin ~~lenders~~Glen ~~shall~~Allen, ~~declare~~Virginia. On ~~all~~October ~~obligations~~25, ~~under~~2024, the ~~BMO~~Company ~~Credit~~repaid ~~Agreement~~an ~~immediately~~approximately ~~due~~$6.1 ~~and~~million ~~payable,~~portion ~~terminate~~of the ~~lenders’~~BofA ~~commitments~~Term toLoan ~~make~~from ~~loans~~asset ~~under~~sale ~~the~~proceeds ~~BMO~~of ~~Credit~~a ~~Agreement,~~property ~~and~~located ~~enforce~~in ~~any~~Atlanta, ~~and~~Georgia. On ~~all~~March ~~rights~~6, of2025, the ~~lenders~~Company orrepaid ~~administrative~~an ~~agent~~approximately ~~under~~$34,000 ~~the~~portion ~~BMO~~of ~~Credit~~the ~~Agreement~~BofA ~~and~~Term ~~related~~Loan ~~documents.~~from ~~For~~an ~~certain~~escrow ~~events~~collected ofon ~~default~~March ~~related to bankruptcy~~4, ~~insolvency~~2025, ~~and~~which ~~receivership,~~had ~~the~~been ~~commitments~~held offrom ~~lenders~~the ~~will~~sale ~~be automatically terminated and all outstanding obligations~~ of ~~the~~a ~~Company~~property ~~will~~located ~~become~~in ~~immediately~~Glen ~~due~~Allen, ~~and payable~~Virginia.

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. Effective April 1, 2025, the spread over SOFR or the base rate, as applicable, permanently increased 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 September 30, 2024, the Company has a term loan borrowing in the aggregate principal amount of approximately $61.7 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; (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

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~~the~~As ~~February~~of 21March 31, ~~2024~~2025 ~~effective~~and ~~date~~December of31, ~~the BofA Second Amendment~~2024, ~~certain of~~ the ~~Company’s~~interest ~~subsidiaries~~rate ~~guarantee~~on the BofA Term Loan; ~~(7)~~was ~~require~~8.00% ~~that,~~and ~~within~~8.00% 90per ~~days~~annum, respectively. As of ~~the~~April ~~February~~1, 212025, ~~2024~~the ~~effective~~interest ~~date~~rate ofon the BofA ~~Second~~Term ~~Amendment,~~Loan ~~the~~was ~~Company~~9.00%. The ~~pledge~~weighted ~~its~~average ~~equity~~variable ~~interests~~interest inrate ~~certain~~on ofall ~~the~~amounts ~~Company’s~~outstanding ~~subsidiaries~~under ~~as collateral for~~ the BofA Term Loan; ~~(8)~~was ~~reduce the Company’s minimum fixed charge coverage ratio from 1~~8.~~50x~~00% toand 18.~~25x;~~34% ~~and~~for ~~(9) reduce~~ the ~~Company’s~~three ~~minimum~~months ~~unsecured~~ended ~~interest~~March ~~coverage ratio from 1.75x to 1.25x. The Original BofA Credit Agreement~~31, as2025 ~~amended~~and by the ~~BofA~~year ~~First~~ended ~~Amendment~~December ~~and~~31, ~~the BofA Second Amendment~~2024, ~~is referred to as the BofA Credit Agreement~~respectively.

OnThe ~~February~~BofA 21Credit Agreement contains customary affirmative and negative covenants for credit facilities of this type, ~~2024~~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 ~~part~~collateral, changes in business, certain restricted payments, repurchases and redemptions of the ~~BofA~~Company’s ~~Second~~common ~~Amendment~~stock, going concern qualifications to the Company’s ~~repaid~~financial anstatements, ~~approximately~~and transactions with affiliates. In addition, the BofA Credit Agreement also restricts the Company’s ability to make quarterly dividend distributions that exceed $220.701 ~~million~~per ~~portion~~share of the ~~BofA~~Company’s ~~Revolver. On~~common ~~July~~stock; 10provided, ~~2024~~however, that notwithstanding such restriction, the Company ~~repaid~~is anpermitted ~~approximately~~to ~~$5.6~~make ~~million~~dividend ~~portion~~distributions based on the Company’s good faith estimate of projected or estimated taxable income or otherwise as necessary to retain the ~~BofA~~Company’s ~~Term~~status ~~Loan~~as ~~from~~a ~~asset~~real ~~sale~~estate ~~proceeds~~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 ~~property~~minimum ~~located~~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 ~~Glen~~compliance ~~Allen~~with the BofA Term Loan financial covenants as of March 31, ~~Virginia~~2025.

~~Effective~~The ~~February 21, 2024, upon entering into the~~ BofA ~~Second~~Credit ~~Amendment,~~Agreement ~~the~~provides ~~BofA~~for ~~Term~~customary ~~Loan~~events ~~bears~~of ~~interest~~default atwith ~~300~~corresponding ~~basis~~grace ~~points over either (i) the daily simple SOFR~~periods, ~~plus~~including anfailure ~~adjustment~~to ofpay ~~0.11448%,~~any orprincipal ~~(ii) one, three~~ or ~~six~~interest ~~month~~when ~~term SOFR~~due, ~~plus~~failure ato ~~corresponding~~comply ~~adjustment of 0.11448%, 0.26161% or 0.42826%, respectively,~~ with athe ~~floor~~provisions ~~on SOFR~~ of ~~5.00%. In addition, effective February 21, 2024, upon entering into~~ the BofA ~~Second~~Credit ~~Amendment~~Agreement, ~~under~~ certain ~~circumstances,~~cross ~~such~~defaults asand ifa ~~SOFR~~change isin ~~not~~control ~~able~~of ~~to be determined,~~ the ~~BofA~~Company ~~Term~~(as ~~Loan~~defined ~~bears~~in ~~interest~~the atBofA ~~200~~Credit ~~basis~~Agreement). ~~points~~In ~~over~~ the ~~base~~event ~~rate~~of ~~with~~ a ~~floor~~default onby the ~~base~~Company, ~~rate~~BofA, ofin ~~600~~its ~~basis~~capacity ~~points.~~as Inadministrative ~~addition~~agent, ~~effective February 21~~may, ~~2024~~and ~~upon~~at ~~entering into~~ the ~~BofA~~request ~~Second~~of ~~Amendment,~~the ~~if,~~requisite asnumber of ~~March~~lenders 31shall, ~~2025,~~declare ~~the~~all ~~aggregate~~obligations ~~principal amount outstanding~~ under the ~~BMO~~BofA ~~Term~~Credit ~~Loan,~~Agreement ~~the~~immediately ~~BofA~~due ~~Term~~and ~~Loan~~payable and ~~the~~enforce ~~Senior~~any ~~Notes~~and ~~exceeds~~all ~~$200~~rights ~~million,~~of the ~~spread~~lenders ~~over~~or ~~SOFR~~BofA ~~will~~under ~~permanently~~the ~~increase~~BofA byCredit ~~100~~Agreement ~~basis~~and ~~points~~related ~~from~~documents. ~~300~~For ~~basis~~certain ~~points~~events toof ~~400~~default ~~basis~~related ~~points~~to inbankruptcy, ~~the case of SOFR~~insolvency, and ~~from~~receivership, ~~200~~all ~~basis~~outstanding ~~points~~obligations toof ~~300~~the ~~basis~~Company ~~points~~will inbecome ~~the~~immediately ~~case~~due ofand ~~the base rate~~payable.

AsSenior of September 30, 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 8.44% for the nine months ended September 30, 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. Notes

~~The~~As ~~BofA~~of ~~Credit~~March ~~Agreement~~31, ~~contains~~2025, ~~customary~~the ~~affirmative~~Company ~~and~~has ~~negative~~senior ~~covenants~~notes ~~for~~in ~~credit~~the ~~facilities~~aggregate principal amount of ~~this~~approximately ~~type,~~$123.6 ~~including~~million ~~limitations~~(the ~~with~~“Senior ~~respect~~Notes”) tothat ~~indebtedness,~~mature ~~liens,~~on ~~investments~~April 1, ~~mergers~~2026. ~~and~~The ~~acquisitions,~~Senior ~~disposition~~Notes consist of ~~assets~~(i) Series A Senior Notes due April 1, ~~use~~2026 in an aggregate principal amount of ~~net~~approximately ~~cash~~$71.7 ~~proceeds~~million ~~from~~(the “Series A Notes”) and (ii) Series B Senior Notes due April 1, 2026 in the ~~disposition~~aggregate principal amount of ~~property,~~approximately ~~assets~~$51.9 ~~and~~million ~~equity~~(the ~~issuances,~~“Series ~~mandatory~~B ~~prepayments~~Notes”). On February 21, 2024, the ~~requirement~~Company amended the terms of the Senior Notes by entering into a First Amendment to ~~have~~Note ~~certain~~Purchase ~~subsidiaries~~Agreement ~~provide~~(the ~~guarantees~~“NPA First Amendment”) with the purchasers party thereto. The NPA First Amendment amended the Note Purchase Agreement dated October 24, 2017 (the ~~requirement~~“Original Note Purchase Agreement”) to, ~~pledge~~among other things: (1) extend the ~~Company’s~~maturity ~~equity~~date ~~interests~~of inthe ~~certain~~Series ~~subsidiaries~~A asNotes ~~collateral~~from December 20, ~~changes~~2024 into ~~business~~April 1, ~~certain~~2026; ~~restricted~~(2) ~~payments,~~shorten ~~repurchases~~the ~~and~~maturity ~~redemptions~~date of the ~~Company’s~~Series ~~common~~B ~~stock,~~Notes ~~going~~from ~~concern~~December ~~qualifications~~20, 2027 to April 1, 2026; (3) increase the ~~Company’s~~interest ~~financial~~rate ~~statements,~~applicable ~~and~~to ~~transactions~~the ~~with~~Series ~~affiliates~~A Notes from 4.49% Inper ~~addition,~~annum ~~the~~to ~~BofA~~8.00% ~~Credit~~per ~~Agreement~~annum; ~~also~~(4) ~~restricts~~increase the ~~Company’s~~interest ~~ability~~rate applicable to ~~make~~the ~~quarterly~~Series ~~dividend~~B ~~distributions~~Notes ~~that~~from ~~exceed~~4.76% $0per annum to 8.0100% per ~~share~~annum; (5) provide that, if, as of March 31, 2025, the ~~Company’s~~aggregate ~~common~~principal ~~stock;~~amount ~~provided,~~outstanding ~~however~~under the BMO Term Loan, ~~that~~the ~~notwithstanding~~BofA ~~such~~Term ~~restriction~~Loan and the Senior Notes exceeds $200 million, the ~~Company~~per isannum ~~permitted~~interest rates applicable to ~~make~~the ~~dividend~~Series ~~distributions~~A ~~based~~Note onand the ~~Company’s~~Series ~~good~~B ~~faith~~Notes ~~estimate~~will ofpermanently ~~projected~~increase orby ~~estimated~~1.00% ~~taxable~~from ~~income~~8.00% orper ~~otherwise~~annum asto ~~necessary~~9.00% toper ~~retain~~annum; ~~the~~(6) ~~Company’s~~require ~~status~~mandatory asprepayments aof ~~real~~the ~~estate~~BMO ~~investment~~Term ~~trust~~Loan, tothe ~~meet~~BofA Term Loan and the ~~distribution~~Senior ~~requirements~~Notes ofwith ~~Section~~net ~~857~~cash ofproceeds from the ~~Internal~~disposition ~~Revenue~~of ~~Code~~property, orassets toand ~~eliminate~~equity ~~any~~issuances ~~income~~as orfollows: ~~excise~~(a) ~~taxes~~25.55556% to ~~which~~ the ~~Company~~BMO ~~would~~Term ~~otherwise~~Loan; be(b) ~~subject~~20.00000% ~~The~~to the BofA ~~Credit~~Term ~~Agreement~~Loan; ~~also~~(c) ~~contains~~44.44444% ~~financial~~to ~~covenants~~the ~~that~~Senior ~~require~~Notes; and (d) the ~~Company~~remaining 10% to ~~maintain~~be aretained ~~minimum~~by ~~tangible~~the ~~net~~Company; ~~worth~~(7) require that, awithin ~~maximum~~90 ~~leverage~~days ~~ratio~~of the February 21, a2024 ~~maximum~~effective ~~secured~~date ~~leverage~~of ~~ratio~~the NPA First Amendment, acertain ~~maximum~~of ~~secured~~the ~~recourse~~Company’s ~~leverage~~subsidiaries ~~ratio~~guarantee the Senior Notes; (8) require that, awithin ~~minimum~~90 ~~fixed~~days ~~charge~~of ~~coverage~~the ~~ratio~~February 21, a2024 ~~maximum~~effective ~~unencumbered~~date ~~leverage~~of ~~ratio~~the NPA First Amendment, ~~and~~the ~~minimum~~Company ~~unsecured~~pledge ~~interest~~its ~~coverage.~~equity ~~The~~interests in certain of the Company’s ~~was~~subsidiaries as collateral for the Senior Notes; and (9) conform all financial covenants and negative covenants in ~~compliance~~the Note Purchase Agreement with the BofA ~~Term~~Credit ~~Loan~~Agreement ~~financial~~and ~~covenants~~the BMO Credit Agreement. The Original Note Purchase Agreement, as ofamended ~~September~~by 30the NPA First Amendment, ~~2024~~is referred to as the “Note Purchase Agreement”.

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.

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~~Senior~~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 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. On March 6, 2025, the Company repaid an approximately $44,000 portion of the Series A Notes and an approximately $32,000 portion of the Series B Notes from an escrow collected on March 4, 2025, which had been held from the sale of a property located in Glen Allen, Virginia. As of March 31, 2025, 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 ~~September~~March 3031, ~~2024,~~2025 the Company has senior notes in the aggregate principal amount of approximately $137.1 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 $79.5 million (the “Series A Notes”) and (ii) Series B Senior Notes due April 1, 2026 in the aggregate principal amount of approximately $57.6 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 2031, 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~~on toeach of the Series A Notes ~~from~~was ~~4.49% per annum to~~ 8.00% per annum; ~~(4)~~and ~~increase~~ the interest rate ~~applicable~~on to the Series B Notes ~~from~~was ~~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 1respectively.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.

OnEffective ~~February~~April 211, ~~2024~~2025, ~~as part of~~ the ~~NPA~~interest ~~First~~rates ~~Amendment,~~applicable ~~the~~to ~~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~~permanently ~~10,~~increased ~~2024,~~from ~~the Company repaid an approximately $7~~8.200% ~~million~~per ~~portion~~annum ofto ~~the Series A Notes and an approximately $5~~9.300% ~~million~~per ~~portion of the Series B Notes from asset sale proceeds of a property located in Glen Allen~~annum, ~~Virginia~~respectively. As of September 30, 2024, approximately $79.5 million aggregate principal amount of the Series A Notes remained outstanding and approximately $57.6 million aggregate principal amount of the Series B Notes remained outstanding.

AsThe Note Purchase Agreement contains customary affirmative and negative covenants, including limitations with respect to indebtedness, liens, investments, mergers and acquisitions, disposition of ~~September~~assets, 30use of net cash proceeds from the disposition of property, ~~2024~~assets and equity issuances, mandatory prepayments, the ~~interest~~requirement ~~rate~~to onhave certain subsidiaries provide guarantees, the ~~Series~~requirement Ato ~~Notes~~pledge ~~was~~the ~~8.00%~~Company’s ~~per~~equity ~~annum~~interests in certain subsidiaries as collateral, changes in business, certain restricted payments, repurchases and redemptions of the ~~interest~~Company’s ~~rate~~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 ~~Series~~Company’s Bexecutive ~~Notes~~officers, ~~was~~and 8real estate investment trust compliance requirements.~~00%~~ ~~per~~In ~~annum~~addition, the Note Purchase Agreement also restricts the Company’s ability to make quarterly dividend distributions that exceed $0. As01 per share of ~~December~~the 31Company’s common stock; provided, ~~2023~~however, that notwithstanding such restriction, the ~~interest~~Company ~~rate~~is permitted to make dividend distributions based on the ~~Series~~Company’s Agood ~~Notes~~faith ~~was~~estimate 4of 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.~~49%~~ ~~per~~The ~~annum~~Note ~~and~~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 ~~rate~~coverage. onThe Company was in compliance with the ~~Series~~Note BPurchase ~~Notes~~Agreement ~~was~~financial ~~4.76%~~covenants ~~per~~as ~~annum~~of March 31, 2025.

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 September 30, 2024.

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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.

43. 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 32. 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 ~~September~~March 3031, ~~2024~~2025, 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.~~

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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.

The gain (loss) on the ~~Company’s~~ 2019 BMO Interest Rate Swap was recorded in other comprehensive income (loss) (OCI), and the accompanying consolidated statements of operations as a component of interest expense for the ~~nine~~three months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024, was as follows:


(in thousands)	~~Nine~~Three Months Ended ~~September~~March 3031,
Interest Rate Swaps in Cash Flow Hedging Relationships:	~~2024~~2025		~~2023~~2024

Amounts of gain recognized in OCI	$	—	$	~~177~~—
Amounts of previously recorded gain (loss) reclassified from OCI into Interest Expense	$	~~355~~—	$	~~2,055~~355

Total amount of Interest Expense presented in the consolidated statements of operations	$	205,~~513~~691	$	116,~~890~~846

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.

54. Net Income (Loss) Per Share

Basic net income (loss) per share is computed by dividing net income (loss) by the weighted average number of Company shares outstanding during the period. Diluted net income (loss) 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 each of ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024.

165. Stockholders’ Equity

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6. Stockholders’ Equity

As of ~~September~~March 3031, ~~2024~~2025, the Company had 103,566,715 shares of common stock outstanding. The Company declared and paid dividends as follows (in thousands, except per share amounts):


	Dividends Per		Total
Quarter Paid	Share		Dividends

2025:
First quarter of 2025	$	0.01	$	1,036

2024:
First quarter of 2024	$	0.01	$	1,034
Second quarter of 2024	$	0.01	$	1,034
Third quarter of 2024	$	0.01	$	1,036

2023:
First quarter of 2023	$	0.01	$	1,033
Second quarter of 2023	$	0.01	$	1,032
Third quarter of 2023	$	0.01	$	1,034

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 ~~and May 18~~, ~~2023,~~ 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 three months ended June 30, 2024 ~~and year ended December 31~~, ~~2023, respectively,~~ and is included in general and administrative expenses for such ~~periods~~period. Such shares were fully vested on the date of issuance.

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	Shares Available		Compensation
	for Grant		Cost

Balance December 31, 2022		1,696,687	$	1,406,250
Balance December 31, 2023		1,502,248	$	1,721,241
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 September 30, 2024		1,365,886	$	1,991,238
Balance December 31, 2024		1,365,886	$	1,991,238
Shares granted 2025		—		—
Balance March 31, 2025		1,365,886	$	1,991,238

76. Income Taxes

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 December 31, 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.

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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, 2023 and December 31, 2022, 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 ~~2020~~2021 and thereafter.

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 $0.74 million of NOLs expired in ~~2023~~2024. 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 $29.7 million and $29.7 million as of September 30, 2024 and December 31, 2023, respectively.

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remaining from such NOLs is not assured. The gross amount of NOLs available to the Company was approximately $95.8 million and $95.8 million as of March 31, 2025 and December 31, 2024, respectively.

Income Tax Expense

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 $~~162~~52,000 and $~~212~~58,000 for the ~~nine~~three months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024, respectively.

The income tax expense reflected in the consolidated statements of operations relates primarily to a franchise tax on the Company’s Texas properties.


	For the ~~Nine~~Three Months Ended ~~September~~March 3031,
(Dollars in thousands)	~~2024~~2025		~~2023~~2024

Revised Texas Franchise Tax	$	~~162~~52	$	~~212~~58
Other Taxes		—		—
Tax expense	$	~~162~~52	$	~~212~~58

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.

187. Leases

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8. Leases

Leases as a Lessor:

The Company is a lessor of commercial real estate with operations that include the leasing of office ~~and industrial~~ 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.

For the ~~nine~~three months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024, the Company recognized the following amounts of income relating to lease payments:


Income relating to lease payments:
	For the ~~Nine~~Three Months Ended ~~September~~March 3031,
(in thousands)	~~2024~~2025		~~2023~~2024
Income from leases (1)	$	9227,~~937~~178	$	~~111~~31,~~316~~425
	$	9227,~~937~~178	$	~~111~~31,~~316~~425

(1) Includes amounts recognized from variable lease payments of $26,584 and $32,275 for the nine months ended September 30, 2024 and 2023, respectively.
(1) Includes amounts recognized from variable lease payments of $8,107 and $8,707 for the three months ended March 31, 2025 and 2024, respectively.

~~9. Disposition of Properties and Assets Held for Sale~~18

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8. Disposition of Properties and Assets Held for Sale

InOn ~~the~~April ~~three~~7, ~~months~~2025, ~~ended~~Monument ~~March~~Circle ~~31,~~entered ~~2023,~~into ~~the~~a ~~Company~~purchase ~~sold~~and ~~one~~sale ~~office~~agreement to sell its property located in ~~Elk Grove~~Indianapolis, ~~Illinois~~Indiana onto ~~March~~a ~~10,~~third ~~2023,~~party for a gross sales price of $296.10 million,. In atOctober a2021, ~~gain~~as part of ~~approximately~~its ~~$8.4~~consideration ~~million. The~~for agreeing to amend and restate the Sponsored REIT Loan, the Company ~~used~~obtained from the ~~proceeds~~stockholders of the ~~disposition~~parent ~~principally~~of Monument Circle the right to ~~repay~~vote atheir ~~portion~~shares in favor of ~~outstanding~~any ~~indebtedness. In~~sale of the ~~three~~property ~~months~~owned ~~ended~~by ~~September~~Monument 30Circle any time on or after January 1, 2023. At March 31, 2025, the Company ~~sold~~recorded ~~one~~this ~~office~~ property ~~located~~at inthe ~~Charlotte,~~fair ~~North~~value ~~Carolina~~less oncost ~~August~~to 9sell, ~~2023~~which ~~for~~was aless ~~sales~~than ~~price~~the carrying value and resulted in an impairment of $913.23 million. The Company reclassified $5.7 million of this office property as an asset held for sale, atwhich ais ~~loss~~comprised of $018.89 million. ~~During~~in ~~the~~real ~~three~~estate ~~months~~assets, ~~ended~~net ~~September~~of ~~30,~~accumulated ~~2023~~depreciation, prior to the ~~Company~~impairment. The ~~recorded~~reclassification was a ~~gain~~non-cash investing activity on ~~sale~~the statement of ~~$53,000~~cash asflows. The aCompany ~~result~~estimated the fair value of ~~conveying~~this ~~approximately~~property, 7less estimated costs to sell,~~826~~ ~~square~~based ~~feet~~on ofthe ~~land~~purchase atprice set forth in the ~~Company’s~~letter ~~Addison,~~of ~~Texas~~intent to purchase the property tothat Monument Circle entered into with the ~~Town~~third ofparty ~~Addison~~(Level as3 ~~part~~inputs, ofas athere ~~road~~are ~~revitalization~~no ~~project~~observable inputs).

During the three months ended ~~September~~March 3031, ~~2023~~2024, the Company ~~entered~~sold ~~into~~one anoffice ~~agreement to sell a~~ property located in ~~Miami~~Richardson, ~~Florida~~Texas ~~for a gross sales price of approximately $68.0 million and recorded an impairment loss of $19.2 million. The property was sold~~ on ~~December~~January 626, ~~2023~~2024, ~~at an actual loss of $18.9 million. During the three months ended September 30, 2023, the Company also entered into an agreement to sell a property in Atlanta, Georgia~~ for a ~~gross~~ sales price of ~~approximately~~ $4035.0 million~~. This~~ ~~property was classified as held for sale~~ at ~~September~~a ~~30, 2023 and the Company recorded an impairment~~ loss of approximately $202.51 million ~~in the three months ended September 30~~, ~~2023 based on the fair value less cost to sell,~~ which was ~~less than the carrying value. This agreement was terminated in November 2023. The Company~~ recorded ~~these~~as ~~properties at the fair value less cost to sell, which was less than the carrying value and resulted in~~ an impairment ofduring ~~$39.7 million in~~ the ~~three~~year ~~months~~ ended ~~September~~December 3031, 2023. ~~The~~An ~~reclassification~~additional is$5,000 ~~a non-cash investing activity on the statement~~ of ~~cash~~costs ~~flows. The~~related ~~Company~~to ~~estimated~~ the ~~fair~~sale ~~value~~were ofrecorded ~~these~~during ~~properties, less estimated costs to sell, using~~ the ~~offers~~three tomonths ~~purchase~~ended ~~the~~March ~~properties made by third parties (Level 3 inputs~~31, ~~as there is no active market)~~2024.

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 property sold on October 26, 2023 at the expected gain of $10.6 million.

9. 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.

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During the three months ended March 31, 2024, the Company sold one office property located in Richardson, Texas on January 26, 2024, for a sales price of $35.0 million at a loss of approximately $2.1 million, which was recorded as an impairment 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 ~~the~~calculations ~~three months ended September 30, 2024, the Company entered into a new agreement to sell the property in Atlanta, Georgia for a gross sales price~~ of ~~$34.0~~Segment ~~million~~NOI ~~and~~are ~~recorded~~shown an additional impairment loss of $6.6 million based on the fair value less cost to sell. At September 30, 2024 and December 31, 2023, the office property remained classified on the consolidated balance sheet as an asset held for sale in the ~~amount~~following of $32.9 million and $39.0 million, respectively and was comprised of $52.8 million and $52.2 million of real estate assets, net of accumulated depreciation, respectively, $4.4 million of straight-line rents receivable, and $2.9 million of deferred leasing commissions, net of accumulated depreciation. 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). table:

During the three months ended September 30, 2024, the Company sold a property located in Glen Allen. Virginia for a gross sales price of $31.0 million at a loss of approximately $13.2 million, which had previously been recorded as an impairment as of June 30, 2024. The Company used proceeds of $25.3 million, or 90% of the net proceeds from the disposition, to repay a portion of its outstanding indebtedness. An additional $0.7 million in costs related to the sale of properties previously sold was recorded in the three months ended September 30, 2024.



	Three Months		Three Months
	Ended		Ended
(in thousands)	March 31, 2025		March 31, 2024
Total consolidated revenues	$	27,107	$	31,225

Reconciling items:
Amortization of above/below market leases		—		(6)

Less:
Real estate operating expenses		10,095		11,019
Real estate taxes and insurance		5,369		5,936
Segment NOI	$	11,643	$	14,264


		Three Months		Three Months
		Ended		Ended
Reconciliation to Net loss	March 31, 2025		March 31, 2024
Net loss	$	(21,435)	$	(7,552)
Add (deduct):
Loss on extinguishment of debt		2		137
(Gain) loss on sale of properties and impairment of assets held for sale, net		13,284		5
Depreciation and amortization		10,824		11,625
Amortization of above/below market leases		—		(6)
General and administrative		3,484		4,159
Interest expense		5,691		6,846
Interest income		(259)		(1,008)
Tax expense		52		58
Segment NOI	$	11,643	$	14,264

The Company reports the results of operations of its properties that have been disposed of or classified as held for sale in its consolidated statements of operations, which includes rental income, rental operating expenses, real estate taxes and insurance and depreciation and amortization.

The operating results for the properties that the Company disposed of or classified as assets held for sale are summarized

below:



	Three months ended September 30,				Nine months ended September 30,
(in thousands)	2024		2023		2024		2023
Rental revenue	$	1,309	$	7,925	$	7,001	$	23,842
Rental operating expenses		(643)		(2,747)		(2,799)		(7,673)
Real estate taxes and insurance		196		(1,027)		(295)		(3,292)
Depreciation and amortization		—		(1,895)		(832)		(7,916)
Income from dispositions and assets held for sale	$	862	$	2,256	$	3,075	$	4,961

10. Subsequent Events

OnEffective ~~October~~April 41, ~~2024~~2025, the ~~Board~~interest ofrates ~~Directors~~applicable ofto the ~~Company~~BMO ~~declared~~Term aLoan, ~~cash~~the ~~distribution~~BofA ofTerm ~~$0.01~~Loan ~~per~~and ~~share~~the ofSenior ~~common~~Notes ~~stock~~permanently ~~payable~~increased onby ~~November 7~~1.00%, ~~2024,~~from to8.00% ~~stockholders~~per ofannum ~~record~~to on9.00% ~~October~~per ~~18, 2024~~annum.

On ~~October~~April 237, ~~2024~~2025, the ~~Company~~Board ~~sold~~of aDirectors ~~property~~of ~~located~~the inCompany ~~Atlanta,~~declared ~~Georgia for~~ a ~~gross~~cash ~~sales~~distribution ~~price~~ of $~~34.~~0 ~~million at a loss of approximately $27~~.501 ~~million,~~per ~~which~~share ~~had been substantially recorded as impairments as~~ of ~~September~~common ~~30,~~stock ~~2024~~payable ~~and~~on ~~September~~May 308, ~~2023. On October 25~~2025, ~~2024,~~to ~~the~~stockholders ~~Company used proceeds~~ of ~~approximately~~record ~~$27.4~~on ~~million,~~April ~~or 90%~~17, ~~of the net proceeds of the distribution, to repay a portion of its outstanding indebtedness~~2025.

On April 7, 2025, Monument Circle entered into a purchase and sale agreement to sell its property located in Indianapolis, Indiana for a gross sales price of $6.0 million.

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Item 2. 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 and in our Annual Report on Form 10-K for the year ended December 31, ~~2023~~2024. 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 Quarterly Report on Form 10-Q 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 or other potential transactions 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 Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, ~~2023~~2024. 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 Quarterly Report on Form 10-Q 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 ~~September~~March 3031, ~~2024~~2025, approximately 4.8 million square feet, or approximately 9295.87 % 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. InWe ~~the future, 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.

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.

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For the ~~nine months ended September 30, 2024 and the~~ year ended December 31, ~~2023~~2024, our disposition strategy resulted in aggregate gross sale proceeds of $66100.0 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, Series A Notes and 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 $~~154~~25.53 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 ~~more~~of fully described in Note 3 “Bank Note Payable, Term Loans Payable and Senior Notes” in the Notes to Consolidated Financial Statements included in this report and in “Liquidity and Capital Resources” below, on February 21, 2024, wethe ~~entered~~interest ~~into~~rate ~~amendments~~applicable to ~~each~~borrowings ofunder the ~~BofA~~Senior ~~Term Loan, BMO Term Loan, Series A~~ Notes ~~and Series B Notes~~ (~~each~~ as defined in ~~Note~~Liquidity 3and inCapital ~~the~~Resources ~~Notes~~below) towas ~~Consolidated~~no ~~Financial~~longer ~~Statements~~based ~~included~~on ~~in this report) to extend~~ the ~~maturity~~credit ~~dates~~rating of ~~each~~our ~~facility~~debt. The ~~and~~credit ~~modify~~rating ~~the~~for ~~interest~~our ~~rate~~senior ~~payable~~unsecured ~~under~~debt ~~each~~was ~~facility~~downgraded ~~and~~by inMoody’s ~~connection~~Investor ~~with~~Service ~~such~~from ~~amendments,~~Ba1 ~~repaid~~to anBa3 ~~aggregate~~on ofApril ~~$102~~12, ~~million~~2023, ~~principal~~from ~~amount~~Ba3 ofto ~~debt.~~B3 Onon ~~July~~June 1014, ~~2024~~2023, weand ~~used proceeds~~ from ~~the~~B3 ~~sale~~to ofCaa1 aon ~~property~~February ~~in Glen Allen~~27, ~~Virginia~~2025. As ~~to repay an aggregate~~ of ~~approximately~~March ~~$25.3~~31, ~~million~~2025, ofour ~~principal~~credit ~~amount~~rating ofremains ~~debt~~at Caa1.

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, which continues to be the rating as of September 30, 2024. As of February 21, 2024, the interest rate applicable to borrowings under the Senior Notes ceased to be based on the rating of our debt.

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 has had and will have on our future financial results at this time. See “~~Risk~~The ~~Factors~~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 ” inof our Annual Report on Form 10-K for the year ended December 31, ~~2023~~2024.

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 ~~ongoing~~conflicts ~~wars~~in ~~between Russia and~~ Ukraine, ~~between Israel~~ and ~~Hamas, a U.S. designated foreign Terrorist Organization, in~~ the ~~Gaza Strip, and between Israel and Hezbollah, a U.S. designated Foreign Terrorist Organization, in Lebanon and ongoing conflicts in various other parts of 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, impacts of changes in tariffs that the United States and other countries have announced or implemented, as well as any additional new tariffs, trade restrictions or export regulations that may be implemented or reversed in the future, 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 Federal Reserve adjusted the federal funds rate target several times, most recently decreasing it by 5025 basis points on ~~September~~December 18, 2024, to a range of 4.25% to 4.50%. If interest rates increase,

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~~range of 4.75% to 5.0%. 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 ~~September~~March 3031, ~~2024~~2025, 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 ~~September~~March 3031, ~~2024~~2025, our real estate portfolio was comprised of 1514 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 1615 properties as our owned and consolidated properties. Our owned properties were approximately 7069.42% leased as of ~~September~~March 3031, ~~2024~~2025, a decrease from 7470.03% leased as of December 31, ~~2023~~2024. The 31.61% decrease in leased space was primarily a result of lease maturities that occurred during the ~~nine~~three months ended ~~September~~March 3031, ~~2024, and the impact on leased percentage from the disposition of a properties on January 26, 2024 and July 8, 2024, respectively~~2025. ~~These~~ ~~decreases were partially offset by new leasing during the nine months ended September 30, 2024.~~ As of ~~September~~March 3031, ~~2024~~2025, we had approximately 1,~~469~~482,000 square feet of vacancy in our owned properties compared to approximately 1,~~445~~428,000 square feet of vacancy at December 31, ~~2023~~2024. During the ~~nine~~three months ended ~~September~~March 3031, ~~2024~~2025, we leased approximately ~~364~~60,000 square feet of office space in our owned properties, of which ~~approximately 242,000 square feet~~ were with existing tenants, at a weighted average term of 5.42 years. On average, tenant improvements for such leases were $253.3077 per square foot, lease commissions were $76.8365 per square foot and rent concessions were approximately ~~four~~three months of free rent. Average GAAP base rents under such leases were $29.9464 per square foot, or 103.94% higher than average rents in the respective properties as applicable compared to the year ended December 31, ~~2023~~2024.

Our owned and consolidated properties were approximately 6766.74% and 7267.45% leased, as of ~~September~~March 3031, ~~2024~~2025 and ~~September~~December 3031, ~~2023~~2024, respectively.

As of ~~September~~March 3031, ~~2024~~2025, leases for approximately 14.59% and 811.4 6% of the square footage in our owned ~~and~~portfolio ~~consolidated properties~~ are scheduled to expire during ~~2024~~2025 and ~~2025~~2026, respectively. As the ~~fourth~~second quarter of ~~2024~~2025 begins, we believe that: our operating properties are stabilized, with a balanced lease expiration schedule, and 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 fourth quarter of 2024 and potentially in future periods.

•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 second quarter of 2025 and potentially in future periods.

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.

Consolidation of Sponsored REIT

As of January 1, 2023, we consolidated Monument Circle into our financial statements. On October 29, 2021, we agreed to amend and restate 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. The amended and restated Sponsored REIT Loan extended the maturity date from December 6, 2022 to June 30, 2023, increased the aggregate principal amount of the loan from $21 million to $24 million, and included certain other modifications. In consideration of our agreement to amend and restate the Sponsored REIT Loan, we obtained from the stockholders of Monument Circle the right to vote their shares in favor of any

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million to $24 million, and included certain other modifications. In consideration of our agreement to amend and restate the Sponsored REIT Loan, we obtained from the stockholders 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. As a result of our obtaining this right to vote shares, GAAP variable interest entity (VIE) rules required us to consolidate Monument Circle as of January 1, 2023. A gain on consolidation of approximately $0.4 million was recognized in the three months ended March 31, 2023. On June 26, 2023, the Sponsored REIT Loan maturity was initially extended to September 30, 2023 and on September 26, 2023 was further extended to September 30, 2024. On September 27, 2024, the Sponsored REIT Loan maturity was extended to September 30, 2025.

Additional information about the consolidation of Monument Circle is incorporated herein by reference to Note 1, “Organization, Properties, Basis of Presentation, Financial Instruments, and Recent Accounting Standards – Variable Interest Entities (VIEs)” ~~and Note 2, “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.

Dispositions of Properties and Assets Held for Sale

InOn ~~the~~April ~~three months ended March 31~~7, ~~2023~~2025, weMonument ~~sold~~Circle ~~an office property located in Elk Grove, Illinois for a 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~~purchase ~~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 asagreement ofwith ~~June 30, 2023. The property was sold on August 9, 2023, for~~ a ~~sales~~third ~~price~~party ofto ~~$9.2~~sell ~~million,~~its 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~~Indianapolis, ~~Texas~~Indiana for a gross sales price of $486.0 million ~~at a gain of approximately $10~~.~~6 million.~~ OnWe ~~December~~estimated 6,the ~~2023,~~fair wevalue ~~sold another~~ of ~~the~~this ~~assets held for sale, an office~~ property ~~located in Miami~~, ~~Florida~~less ~~for~~estimated acosts ~~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 sales price of $40.0 million at a loss of approximately $20.5 million~~, ~~which~~based ~~was recorded as an impairment as of September 30, 2023; however,~~ on ~~November 15, 2023, we received notice from~~ the ~~buyer~~purchase ~~indicating~~price ~~that~~set ~~the~~forth ~~buyer~~in ~~was terminating~~ the ~~transaction~~letter ~~and~~of ~~directing~~intent ~~the deposit and interest be disbursed~~ to ~~us. During~~purchase the ~~three months September 30, 2024, the expected loss on this~~ property ~~was~~that ~~increased~~Monument byCircle ~~$6.6 million after the Company~~ entered into awith ~~new~~the ~~agreement~~third toparty, ~~sell~~which ~~the~~resulted ~~property~~in ~~for~~recording aan ~~gross~~impairment ~~sales~~loss ~~price~~ of $3413.03 million~~. The~~ ~~property~~and ~~was~~we ~~sold on October 23, 2024.~~reclassified ~~During~~ the ~~three months ended December 31, 2023, we executed a purchase and sale agreement to sell a~~ property ~~located~~as inan ~~Richardson,~~asset ~~Texas~~held for ~~$35~~sale ~~million at an expected loss~~ of ~~approximately~~ $25.17 million, ~~which had been recorded~~ as ~~an impairment as~~ of ~~December~~March 31, ~~2023~~2025.

On January 26, 2024, we sold ~~the~~an office property located in Richardson, Texas for a 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~~was ~~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. ~~We used the proceeds from the disposition primarily for the repayment of debt.~~

~~During~~The ~~the~~disposition ~~three~~of ~~months~~this ~~ended~~property ~~June~~did ~~30,~~not ~~2024,~~represent ~~the Company entered into an agreement to sell~~ a ~~property~~strategic inshift ~~Glen~~that ~~Allen,~~has ~~Virginia for~~ a ~~gross~~major ~~sales~~effect ~~price~~on ofour ~~approximately~~operations ~~$31.0 million~~ and anfinancial ~~expected loss of $13~~results.2 Our ~~million,~~current ~~which~~strategy ~~was~~is ~~recorded~~to asfocus ~~an impairment as of June 30, 2024. The property was sold~~ on ~~July 8, 2024. During~~ the ~~three~~sunbelt ~~months~~and ~~ended~~mountain ~~September~~west ~~30,~~regions ~~2024,~~of the ~~Company~~United ~~used proceeds of $25~~States.~~3 million~~ Accordingly, orthe ~~90%~~property ofsold ~~the~~remained ~~net~~classified ~~proceeds~~within ~~from~~continuing ~~the~~operations ~~disposition,~~for toall ~~repay~~periods ~~outstanding indebtedness~~presented.

During the three months ended September 30, 2024, an additional $0.7 million in costs related to the sale of properties previously sold was recorded.

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 focus on the sunbelt and mountain west regions of the United States. Accordingly, the properties sold remained classified within continuing operations for all periods presented.

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We continue to believe that the current price of our common stock does not accurately reflect the value of our underlying real estate assets, and we will seek to increase shareholder value by (1) pursuing the sale of select properties where we believe that short to intermediate term valuation potential has been reached and (2) striving to lease vacant space. As 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 in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, ~~2023~~2024.

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.

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Recent Accounting Standards

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. Early adoption iswas permitted. The Company ~~does~~adopted ~~not~~ASU ~~anticipate~~2023-07 ~~that~~for the ~~adoption~~fiscal ofyear ~~ASU~~ended ~~2023-07~~December ~~will~~31, 2024, 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~~adopted ~~not~~ASU ~~anticipate~~2023-09 ~~that~~on ~~the~~January ~~adoption~~1, of2025, ~~ASU~~which ~~2023-09~~did ~~will~~not 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.

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Results of Operations

The following table shows financial results for the three months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024:


	Three months ended ~~September~~March 3031,
(in thousands)	~~2024~~2025		~~2023~~2024		Change
Revenues:
Rental	$	2927,~~662~~107	$	3631,~~903~~225	$	(74,~~241~~118)
Other		20		—		20
Total revenues		27,107		31,225		(4,118)
Total revenues		29,682		36,903		(7,221)
Expenses:
Real estate operating expenses		1110,~~574~~095		1211,~~797~~019		(~~1,223~~924)
Real estate taxes and insurance		5,~~512~~369		75,~~115~~936		(~~1,603~~567)
Depreciation and amortization		10,~~911~~824		1311,~~408~~625		(~~2,497~~801)
General and administrative		3,~~275~~484		34,~~265~~159		10(675)
Interest		65,~~585~~691		6,~~209~~846		~~376~~(1,155)
Total expenses		3735,~~857~~463		4239,~~794~~585		(4,~~937~~122)

Loss on extinguishment of debt		(~~477~~2)		(39137)		~~(438)~~135
Loss on sale of properties and impairment of assets held for sale, net		(713,~~254~~284)		(~~39,671~~5)		32(13,~~417~~279)
Interest income		~~340~~259		—1,008		~~340~~(749)
Loss before taxes		(1521,~~566~~383)		(457,~~601~~494)		30(13,~~035~~889)
Tax expense		5652		7058		(146)
Net loss	$	(1521,~~622~~435)	$	(457,~~671~~552)	$	30(13,~~049~~883)

Comparison of the three months ended ~~September~~March 3031, ~~2024~~2025 to the three months ended ~~September~~March 3031, ~~2023~~2024:

Revenues

Total revenues decreased by $74.21 million to $2927.71 million for the three months ended ~~September~~March 3031, ~~2024~~2025, as compared to the three months ended ~~September~~March 3031, ~~2023~~2024. The decrease was primarily a result of:

● A decrease in rental revenue of approximately $74.21 million arising primarily from the sale of ~~four~~three properties in ~~2023, and two properties in~~ 2024 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 ~~September~~March 3031, ~~2023~~2024. Our leased space in our owned and consolidated properties was 6766.74% as of ~~September~~March 3031, ~~2024~~2025 and 7270.46% as of ~~September~~March 3031, ~~2023~~2024.

Expenses

Total expenses decreased by $4.91 million to $3735.95 million for the three months ended ~~September~~March 3031, ~~2024~~2025, as compared to the three months ended ~~September~~March 3031, ~~2023~~2024. The decrease was primarily a result of:

● A decrease in real estate operating expenses and real estate taxes and insurance of approximately $21.85 million, which was primarily attributable to the property dispositions noted above.

● A decrease in depreciation and amortization of approximately $20.58 million, which was primarily attributable to the property dispositions noted above.

● A decrease in general and administrative expenses of $0.7 million, which was primarily attributable to fees and costs incurred from the loan amendment we entered into on February 21, 2024 described above and higher professional fees incurred during the three months ended March 31, 2024.

~~These~~● ~~decreases~~A ~~were~~decrease in interest expense of approximately $1.1 million. The decrease was primarily due to a lower principal amount of debt outstanding during the three months ended March 31, 2025 compared to the same period in 2024 and was partially offset by: higher interest rates under the loan amendment we entered into on February 21, 2024.

● An increase in general and administrative expenses of $10,000, which was primarily attributable to higher professional fees during the three months ended September 30, 2024 compared to the same period in 2023.

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● An increase in interest expense of approximately $0.4 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, and February 21, 2024, described above and was partially offset by a lower principal amount of debt outstanding compared to the same period in 2023.

Loss on extinguishment of debt

During the three months ended ~~September~~March 3031, ~~2024 and September 30~~2025, ~~2023,~~ we repaid debt and incurred a loss on extinguishment of debt of ~~$477,000~~approximately ~~and~~ $392,000, ~~respectively,~~ related to unamortized deferred financing costs on the dates of the repayments.

~~Gain~~Loss ~~and loss~~ on sale of properties and impairment on asset held for sale

~~During~~On ~~the~~April ~~three~~7, ~~months~~2025, ~~ended~~Monument ~~September~~Circle ~~30,~~entered ~~2023,~~into wea ~~sold~~purchase anand ~~office~~sale agreement to sell its property located in ~~Charlotte~~Indianapolis, ~~North~~Indiana ~~Carolina~~ for a gross sales price of $96.20 million ~~at a loss of approximately $0~~.8 We ~~million,~~estimated ~~which had been recorded as an impairment during~~ the ~~three~~fair ~~months~~value ~~ended~~of ~~June~~this 30property, ~~2023. During~~less ~~the~~estimated ~~three~~costs ~~months~~to ~~ended September 30~~sell, ~~2023,~~based ~~we recorded a gain~~ on ~~sale~~the ofpurchase ~~$53,000~~price asset aforth ~~result~~in ofthe ~~conveying~~letter ~~approximately 7,826 square feet~~ of ~~land~~intent atto ~~our~~purchase ~~Addison,~~the ~~Texas~~ property tothat ~~the~~Monument ~~Town~~Circle ofentered ~~Addison~~into aswith ~~part~~the ofthird aparty, ~~road~~which ~~revitalization~~resulted ~~project~~in ~~and~~recording ~~increased~~an ~~the~~impairment loss ~~on sale~~ of ~~the office property located in Charlotte, North Carolina known as Forest Park by~~ $~~38,000~~13.3 ~~as a result of final sales adjustments~~million.

During the three months ended ~~September~~March 3031, ~~2023~~2024, we ~~entered~~sold ~~into~~ an ~~agreement~~office ~~to sell a~~ property located in ~~Miami~~Richardson, ~~Florida~~Texas ~~for~~on aJanuary ~~gross~~26, ~~sales price of approximately $68.0 million at an expected loss of $19.2 million and an agreement to sell a property in Atlanta~~2024, ~~Georgia~~ for a ~~gross~~ sales price of ~~approximately~~ $4035.0 million at ana ~~expected~~ loss of approximately $202.51 million. WeThe ~~recorded~~property ~~corresponding~~was ~~impairments~~classified onas ~~these assets~~ held for sale as of ~~September~~December 3031, 2023~~. During~~ ~~the~~and ~~three~~an ~~months~~impairment ~~ended~~of ~~September~~$2.1 30million, ~~2024,~~was werecorded ~~increased~~during the ~~expected~~year ~~loss~~ended onDecember ~~the property in Atlanta~~31, ~~Georgia by $6~~2023.6 ~~million~~An ~~after~~additional ~~the~~$5,000 ~~Company~~of ~~entered~~costs ~~into~~related ato ~~new~~the ~~agreement~~sale towere ~~sell~~recorded during the ~~property~~three ~~for~~months aended ~~gross~~March ~~sales~~31, ~~price of $34~~2024.0 ~~million.~~

On July 8, 2024, we sold a property located in Glen Allen, Virginia at a loss of $13.2 million, which had been recorded as an impairment during the three months ended June 30, 2024. 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.

Interest income

During the three months ended ~~September~~March 3031, 2025 and 2024, we invested disposition proceeds in an interest-bearing account and earned $0.3 million and $1.0 million, respectively, 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 $5652,000 during the three months ended ~~September~~March 3031, ~~2024~~2025, compared to $7058,000 during the three months ended ~~September~~March 3031, ~~2023~~2024.

Net ~~income and~~ loss

Net loss for the three months ended ~~September~~March 3031, ~~2024~~2025 was $1521.64 million, compared to a net loss of $~~45.~~7.6 million for the three months ended ~~September~~March 3031, ~~2023~~2024, for the reasons described above.

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The following table shows financial results for the nine months ended September 30, 2024 and 2023:


	Nine months ended September 30,
(in thousands)	2024		2023		Change
Revenues:
Rental	$	91,705	$	110,927	$	(19,222)
Other		32		9		23
Total revenues		91,737		110,936		(19,199)
Expenses:
Real estate operating expenses		33,620		37,627		(4,007)
Real estate taxes and insurance		17,175		21,257		(4,082)
Depreciation and amortization		34,018		42,780		(8,762)
General and administrative		11,069		10,849		220
Interest		20,513		18,099		2,414
Total expenses		116,395		130,612		(14,217)

Loss on extinguishment of debt		(614)		(106)		(508)
Gain on consolidation of Sponsored REIT		—		394		(394)
Loss on sale of properties and impairment of assets held for sale, net		(20,459)		(32,085)		11,626
Interest income		1,696		—		1,696
Loss before taxes		(44,035)		(51,473)		7,438
Tax expense		162		212		(50)
Net loss	$	(44,197)	$	(51,685)	$	7,488

Comparison of the nine months ended September 30, 2024 to the nine months ended September 30, 2023:

Revenues

Total revenues decreased by $19.2 million to $91.7 million for the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023. The decrease was primarily a result of:

● A decrease in rental revenue of approximately $19.2 million arising primarily from the sale of four properties in 2023, and two properties in 2024 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 September 30, 2023. Our leased space in our owned and consolidated properties was 67.7% as of September 30, 2024 and 72.4% as of September 30, 2023.

Expenses

Total expenses decreased by $14.2 million to $116.4 million for the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023. The decrease was primarily a result of:

● A decrease in real estate operating expenses and real estate taxes and insurance of approximately $8.0 million, which was primarily attributable to the property dispositions noted above.

● A decrease in depreciation and amortization of approximately $8.8 million, which was primarily attributable to the property dispositions noted above.

These decreases were partially offset by:

● An increase in general and administrative expenses of $0.2 million, which was primarily attributable to higher professional fees related to debt transactions during the nine months ended September 30, 2024 compared to the same period in 2023.

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● An increase in interest expense of approximately $2.4 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 and February 21, 2024, as described above, and was partially offset by a lower principal amount of debt outstanding compared to the same period in 2023.

Loss on extinguishment of debt

During the nine months ended September 30, 2024 and September 30, 2023, we repaid debt and incurred a loss on extinguishment of debt of $0.6 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 nine months ended September 30, 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 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, for a 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 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 for a gross sales price of approximately $68.0 million at an expected loss of $19.2 million and 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. We recorded corresponding impairments on these assets held for sale as of September 30, 2023. During the three months ended September 30, 2024, we increased the expected loss on the property in Atlanta, Georgia by $6.6 million after we entered into a new agreement to sell the property for a gross sales price of $34.0 million

During the nine months ended September 30, 2024, we sold an office property located in Richardson, Texas on January 26, 2024, for a sales price of $35.0 million at a loss of approximately $2.1 million, The property had been 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 six months ended June 30, 2024.

During the nine months ended September 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, which 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.

Interest income

During the nine months ended September 30, 2024, we invested disposition proceeds in an interest-bearing account and earned $1.7 million in interest income. On February 21, 2024, we used $102.0 million of disposition proceeds to repay debt.

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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 $162,000 during the nine months ended September 30, 2024, compared to $212,000 during the nine months ended September 30, 2023.

Net loss

Net loss for the nine months ended September 30, 2024 was $44.2 million, compared to a net loss of $51.7 million for the nine months ended September 30, 2023, for the reasons described above.

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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.

FFO should not be considered as an alternative to net income or loss (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 or loss 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					~~For the~~
	Three Months Ended					~~Nine Months Ended~~
	~~September~~March 3031,					~~September 30,~~
(in thousands):	~~2024~~2025			~~2023~~2024		~~2024~~			~~2023~~
Net loss	$	(1521,~~622~~435)	$		(457,~~671~~552)	$	~~(44,197)~~	$		~~(51,685)~~
Gain on consolidation of Sponsored REIT		—			—		—			(394)
Loss on sale of properties and impairment of asset held for sale, net		13,284			5
Loss on sale of properties and impairment of assets held for sale, net		7,254			39,671		20,459			32,085
Depreciation and amortization		10,824			11,619
Depreciation and amortization		10,907			13,400		34,002			42,742
NAREIT FFO		2,673			4,072
NAREIT FFO		2,539			7,400		10,264			22,748
Lease Acquisition costs		54			121
Lease Acquisition costs		126			109		315			278


Funds From Operations	$	2,727		$	4,193
Funds From Operations	$	2,665		$	7,509	$	10,579		$	23,026

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. The information presented includes footnotes and the data is shown by region with properties owned and consolidated 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 or 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 settlements and lease termination fees. NOI, as defined by the Company, may not be comparable to NOI reported by other

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~~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)*


	Rentable
	Square
	Feet	Three Months Ended			Three Months Ended			Inc		~~Nine Months Ended~~	%		~~Three Months Ended~~						~~Nine Months Ended~~		~~Inc~~		%
(in thousands)	or RSF	31-Mar-2425		~~30-Jun-24~~	31-Mar-24		~~30-Sep-24~~	(Dec)		~~30-Sep-24~~	Change		~~31-Mar-23~~		~~30-Jun-23~~		~~30-Sep-23~~		~~30-Sep-23~~		~~(Dec)~~		~~Change~~
Region
MidWest	~~757~~971		1,~~640~~139		~~1,665~~	1,422		~~1,278~~	(283)		~~4,583~~(19.9)	%		~~2,239~~		~~1,718~~		~~1,396~~		~~5,353~~		~~(770)~~	~~(14.4)~~	%
South	21,~~069~~909		54,~~266~~331		~~5,241~~	4,621		~~5,087~~	(290)		~~15,594~~(6.3)	%		~~5,129~~		~~5,251~~		~~5,359~~		~~15,739~~		~~(145)~~	~~(0.9)~~	%
West	2,140		65,~~204~~849		~~6,224~~	6,204		~~6,037~~	(355)		~~18,465~~(5.7)	%		~~6,423~~		~~6,412~~		~~6,505~~		~~19,340~~		~~(875)~~	~~(4.5)~~	%
Property NOI* from Owned Properties	45,~~966~~020		1311,~~110~~319		~~13,130~~	12,247		~~12,402~~	(928)		~~38,642~~(7.6)	%		~~13,791~~		~~13,381~~		~~13,260~~		~~40,432~~		~~(1,790)~~	~~(4.4)~~	%
Disposition and Acquisition Properties (a)	~~214~~-		~~798~~24		~~618~~	1,661		~~(19)~~	(1,637)		~~1,397~~(10.8)	%		~~3,949~~		~~3,190~~		~~3,344~~		~~10,483~~		~~(9,086)~~	~~(17.0)~~	%
Property NOI*	5,~~180~~020	$	1311,~~908~~343	$	~~13,748~~$	13,908	$	~~12,383~~$	(2,565)	$	~~40,039~~(18.4)	%	$	~~17,740~~	$	~~16,571~~	$	~~16,604~~	$	~~50,915~~	$	~~(10,876)~~	~~(21.4)~~	%

Same Store		$	1311,~~110~~319	$	~~13,130~~$	12,247	$	~~12,402~~$	(928)	$	~~38,642~~(7.6)	%	$	~~13,791~~	$	~~13,381~~	$	~~13,260~~	$	~~40,432~~	$	~~(1,790)~~	~~(4.4)~~	%

Less Nonrecurring
Items in NOI* (b)			~~246~~55		~~255~~	246		78	(191)		~~579~~1.5	%		~~1,292~~		~~301~~		~~485~~		~~2,078~~		~~(1,499)~~	~~3.6~~	%

Comparative
Same Store		$	1211,~~864~~264	$	~~12,875~~$	12,001	$	~~12,324~~$	(737)	$	~~38,063~~(6.1)	%	$	~~12,499~~	$	~~13,080~~	$	~~12,775~~	$	~~38,354~~	$	~~(291)~~	~~(0.8)~~	%


											~~Nine Months Ended~~									~~Nine Months Ended~~
		Three Months Ended			Three Months Ended						~~Ended~~		~~Three Months Ended~~							~~Ended~~
Reconciliation to Net Income (Loss)		31-Mar-2425			3031-~~Jun~~Mar-24			~~30-Sep-24~~			~~30-Sep-24~~		~~31-Mar-23~~			~~30-Jun-23~~		~~30-Sep-23~~		~~30-Sep-23~~
Net income (loss)		$	(7,552)	$	(21,023)		$	(15,622)		$	(44,197)		$	2,406	$	(8,420)	$	(45,671)	$	(51,685)
Net loss		$	(21,435)		$	(7,552)
Add (deduct):
Loss on extinguishment of debt			~~137~~2		—	137		~~477~~			~~614~~			67		—		39		~~106~~
Gain on consolidation of Sponsored REIT			—		—			—			—			(394)		—		—		(394)
(Gain) loss on sale of properties and impairment of assets held for sale, net			13,284			5
(Gain) loss on sale of properties and impairment of assets held for sale, net			5		13,200			7,254			20,459			(8,392)		806		39,671		32,085
Management fee income			(380)			(462)
Management fee income			(462)		(443)			(422)			(1,327)			(374)		(427)		(460)		(1,261)
Depreciation and amortization			10,824			11,625
Depreciation and amortization			11,625		11,482			10,911			34,018			14,727		14,645		13,409		42,781
Amortization of above/below market leases			—			(6)
Amortization of above/below market leases			(6)		(6)			(5)			(17)			(18)		(12)		(9)		(39)
General and administrative			3,484			4,159
General and administrative			4,159		3,635			3,275			11,069			3,817		3,768		3,265		10,850
Interest expense			5,691			6,846
Interest expense			6,846		7,082			6,585			20,513			5,806		6,084		6,209		18,099
Interest income			(259)			(1,008)
Interest income			(1,008)		(348)			(340)			(1,696)			—		—		—		—
Non-property specific items, net			132			164
Non-property specific items, net			164		169			270			603			95		127		151		373



Property NOI*		$	11,343		$	13,908
Property NOI*		$	13,908	$	13,748		$	12,383		$	40,039		$	17,740	$	16,571	$	16,604	$	50,915

(a)	We define Disposition and Acquisition Properties as properties that were sold or acquired or consolidated and do not have operating activity for all periods presented.

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

*Excludes NOI from investments in and interest income from secured loans to non-consolidated REITs.

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The information presented below provides the weighted average GAAP rent per square foot for the ~~nine~~three months ended ~~September~~March 3031, ~~2024~~2025 for our owned and consolidated 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	~~September~~March 3031,		Rent per Occupied
Property Name	City	State	Renovated	Square Feet	Sq. Ft.	~~2024~~2025 (a)		Square Feet (b)

120 Monument Circle	Indianapolis	IN	1992	213,760	8,721	4.1	%		3334.1680
121 South 8th Street	Minneapolis	MN	1974	297,~~541~~744	~~228~~218,~~869~~098	7673.93	%		2523.9008
801 Marquette Ave	Minneapolis	MN	1923/2017	129,691	119,108	91.8	%		2526.5664
Plaza Seven	Minneapolis	MN	1987	330,096	~~192~~170,~~512~~396	5851.36	%		2930.9710
Midwest Total				971,~~088~~291	~~549~~516,~~210~~323	5653.62	%		2726.3642
Park Ten	Houston	TX	1999	157,609	~~120~~131,~~744~~982	7683.67	%		2927.1896
Addison Circle	Addison	TX	1999	289,333	~~229~~200,~~817~~305	7969.42	%		35.1850
Eldridge Green	Houston	TX	1999	248,399	248,399	100.0	%		2628.8314
Park Ten Phase II	Houston	TX	2006	156,746	~~129~~104,~~316~~785	8266.59	%		29.8808
Liberty Plaza	Addison	TX	1985	217,841	163,~~424~~337	75.0	%		2627.1864
Legacy Tennyson Center	Plano	TX	1999/2008	209,562	~~109~~106,~~140~~814	5251.10	%		30.7020
Westchase I & II	Houston	TX	1983/2008	629,025	387,~~039~~290	61.56	%		2728.7400
Pershing Park Plaza (c)	Atlanta	GA	1989	160,145	127,796	79.8	%		39.55
South Total				1,908,515	1,342,912	70.4	%		29.36
South Total				2,068,660	1,515,675	73.3	%		30.06
1999 Broadway	Denver	CO	1986	682,639	338,384	49.6	%		35.15
1999 Broadway	Denver	CO	1986	682,639	348,419	51.0	%		35.26
1001 17th Street	Denver	CO	1977/2006	649,400	482,699	74.3	%		36.13
1001 17th Street	Denver	CO	1977/2006	649,400	461,399	71.1	%		38.47
600 17th Street	Denver	CO	1982	612,135	447,961	73.2	%		34.23
600 17th Street	Denver	CO	1982	612,135	477,710	78.0	%		34.80
Greenwood Plaza	Englewood	CO	2000	196,236	127,573	65.0	%		30.50
Greenwood Plaza	Englewood	CO	2000	196,236	128,377	65.4	%		30.10
West Total				2,140,410	1,396,617	65.2	%		34.77
West Total				2,140,410	1,415,905	66.2	%		35.68

Total Owned & Consolidated Properties				5,~~180~~020,~~158~~216	3,~~480~~255,~~790~~852	6764.29	%	$	31.9221

(a) Based on weighted occupied square feet for the ~~nine~~three months ended ~~September~~March 3031, ~~2024~~2025, including month-to-month tenants, divided by the applicable property’s net rentable square footage.

(b) Represents annualized GAAP rental revenue for the ~~nine~~three months ended ~~September~~March 3031, ~~2024~~2025, per weighted occupied square foot.

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Liquidity and Capital Resources

~~Cash~~As ~~and cash equivalents were $42.4 million and $127.9 million at September 30, 2024 and December 31, 2023, respectively. The decrease~~ of ~~$85.5~~April ~~million is attributable to $6.7 million provided by operating activities~~29, plus $43.8 million provided by investing activities less $136.0 million used in financing activities. Management believes that existing cash and cash anticipated to be generated internally by operations2025, ~~including property dispositions, will be sufficient to meet working capital requirements and anticipated capital expenditures for at least~~ the ~~next~~Company 12had ~~months. Although~~aggregate ~~there~~outstanding isindebtedness nounder ~~guarantee~~three ~~that~~unsecured weloans, ~~will be able to obtain~~ the ~~funds~~BofA ~~necessary~~Term ~~for our future growth~~Loan, wethe ~~anticipate~~BMO ~~generating~~Term ~~funds~~Loan ~~from continuing real estate operations~~ and ~~property~~the ~~dispositions. We~~Senior ~~believe~~Notes ~~that~~(each weas ~~have~~defined ~~adequate funds to cover unusual expenses~~ and ~~capital~~described ~~improvements~~below), intotaling ~~addition~~approximately ~~to normal operating expenses~~$250. ~~Our~~2 ~~ability~~million toand ~~maintain~~maturing oron ~~increase~~April ~~our level of dividends to stockholders~~1, ~~however~~2026, ~~depends~~which inis ~~significant~~within ~~part~~12 ~~upon~~months of the ~~level~~date of ~~rental~~issuance ~~income~~of ~~from~~the ~~our~~financial ~~real~~statements ~~properties,~~accompanying ~~property~~this ~~dispositions~~Quarterly ~~and~~Report ~~our~~on ~~interest~~Form ~~costs~~10-Q.

Cash and cash equivalents were $31.6 million and $42.7 million as of March 31, 2025 and December 31, 2024, respectively. The decrease of 11.1 million is attributable to $5.4 million used in operating activities, less $4.5 million used in investing activities less $1.2 million used in financing activities. 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~~used byin operating activities for the ~~nine~~three months ended ~~September~~March 3031, ~~2024~~2025, of $65.74 million is primarily attributable to a net loss of $4421.24 million., excluding $2013.53 million offrom ~~losses~~an onimpairment ~~asset~~loss ~~sales and impairments~~ on an asset held for sale, plus the add-back of $3811.06 million of non-cash expenses, less a decrease in accounts payable and accrued compensation of $47.8 million, less an increase in payment of deferred leasing commissions of $30.25 million, less an increase in ~~lease~~tenant ~~acquisition~~receivables ~~costs~~ of $0.72 million, ~~plus~~less a decrease in ~~tenant~~prepaid ~~receivables~~expenses of $0.82 million, less an increase in lease acquisition costs of $0.1 million and less a decrease in ~~prepaid~~tenant ~~expenses~~security deposits of $0.31 million.

Investing Activities

Cash ~~provided~~used byin investing activities for the ~~nine~~three months ended ~~September~~March 3031, ~~2024~~2025, of $434.85 million is primarily attributable to ~~proceeds from an asset sale of $62.9 million, which was partially offset by~~ purchases of other real estate assets and office equipment investments of $194.15 million.

Financing Activities

Cash used in financing activities for the ~~nine~~three months ended ~~September~~March 3031, ~~2024~~2025 of $~~136~~1.02 million is primarily attributable to ~~the~~payment ~~repayment~~ of adistributions ~~portion~~to ofstockholders ~~the BMO Term Loan~~ of $361.20 million, ~~repayment~~and ~~of a portion of~~ the ~~BofA Revolver (defined below) of $22.6 million,~~ repayment of ~~a portion of the BofA Term Loan (defined below) of~~ $50.62 million, ~~repayment~~ of aour ~~portion of the Senior Notes (defined below) of $62~~debt.~~9 million, payment of deferred financing costs of $5.6 million and payment of distributions to stockholders of $3.1 million.~~

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Liquidity beyond the next 12 months

As of March 31, 2025, we had aggregate outstanding indebtedness of $250.2 million under the BofA Term Loan, the BMO Term Loan and the Senior Notes, each of which matures on April 1, 2026. Our ability to generate cash adequate to satisfy our debt obligations as they mature and meet our operating needs is dependent primarily on income from real estate investments, the sale of real estate investments, leveraging of real estate investments, availability of bank borrowings, 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 II, Item 1A, Risk Factors in our Annual Report on Form 10-K for the year ended December 31, ~~2023~~2024 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. WeIn ~~have~~the past, we considered borrowing from new lenders, 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.~~

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BMO Term Loan

WeAs of March 31, 2025, we have a term loan borrowing in the aggregate principal amount of approximately $7871.80 million ~~as of September 30~~, ~~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 ~~BMO~~tranche ~~Term~~B ~~Loan~~term loan from asset sale proceeds of a property located in Glen Allen, Virginia. ~~The~~On ~~tranche~~October B25, ~~term~~2024, ~~loan~~we ~~matures~~repaid onan ~~April 1, 2026.~~

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approximately $7.8 million portion of the tranche B term loan from asset sale proceeds of a property located in Atlanta, Georgia. On March 6, 2025, we repaid an approximately $43,000 portion of the tranche B term loan from an escrow collected on March 4, 2025, which had been held from the sale of a property located in Glen Allen, Virginia.

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. Effective April 1, 2025, the spread over SOFR or the base rate, as applicable, permanently increased 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 ~~September~~March 3031, 2025 and December 31, 2024, the interest rate on the BMO Term Loan was 8.00% ~~per~~and ~~annum. The weighted average variable interest rate on all amounts outstanding under the BMO Term Loan was~~ 8.4400% ~~for~~per ~~the nine months ended September 30~~annum, ~~2024~~respectively. As of ~~December~~April 311, ~~2023~~2025, the interest rate on the BMO Term Loan was 89.4700% ~~per annum~~. The weighted average variable interest rate on all amounts outstanding under the BMO Term Loan ~~from~~was ~~February~~ 8,.00% ~~2023,~~and ~~which~~8.34% isfor ~~when~~ the ~~Company~~three ~~terminated~~months ~~its~~ended ~~outstanding~~March ~~interest~~31, ~~rate~~2025 ~~swaps~~and ~~applicable to~~ the ~~BMO~~year ~~Term~~ended ~~Loan as described below, through~~ December 31, ~~2023~~2024, ~~was approximately 8~~respectively.~~11% per annum.~~

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.

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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 ~~September~~March 3031, ~~2024~~2025.

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.

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BofA Term Loan

As of ~~September~~March 3031, ~~2024~~2025, we have a term loan borrowing in the amount of approximately $6155.76 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 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.

36Prior 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. On March 6, 2025, we repaid an approximately $34,000 portion of the BofA Term Loan from an escrow collected on March 4, 2025, which had been held from the sale of a property located in Glen Allen, Virginia.

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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.

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. Effective April 1, 2025, the spread over SOFR or the base rate, as applicable, permanently increased 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 ~~September~~March 3031, 2025 and December 31, 2024, the interest rate on the BofA Term Loan was 8.00% ~~per~~and ~~annum. The weighted average variable interest rate on all amounts outstanding under the BofA Term Loan was~~ 8.4400% ~~for~~per ~~the nine months ended September 30~~annum, ~~2024~~respectively. As of ~~December~~April 311, ~~2023~~2025, the interest rate on the BofA ~~Revolver~~Term Loan was 89.4700% ~~per annum~~. The weighted average variable interest rate on all amounts outstanding under the BofA ~~Revolver~~Term ~~through~~Loan ~~December~~was 8.00% and 8.34% for the three months ended March 31, ~~2023~~2025 ~~was~~and ~~approximately~~for ~~8.05%~~the ~~per~~year ~~annum.~~ended December 31, 2024, respectively.

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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 ~~September~~March 3031, ~~2024~~2025.

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 (as defined in the BofA 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 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 of our outstanding obligations will become immediately due and payable.

Senior Notes

We have senior notes in the aggregate principal amount of approximately $~~137~~123.16 million as of ~~September~~March 3031, ~~2024~~2025, 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

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~~due~~property ~~April~~located 1in Glen Allen, ~~2026~~Virginia. On inOctober an25, ~~aggregate~~2024, ~~principal~~we ~~amount~~repaid ofan approximately $797.58 million, ~~which~~portion weof ~~refer to as~~ the Series A Notes, and ~~(ii)~~an ~~Series B Senior Notes due April 1, 2026 in the aggregate principal amount of~~ approximately $575.67 million, ~~which~~portion weof ~~refer to as~~ the Series B Notes~~. On~~ ~~February~~from ~~21,~~asset ~~2024,~~sale weproceeds ~~amended the terms~~ of ~~the Senior Notes by entering into~~ a ~~First~~property ~~Amendment~~located toin ~~Note Purchase Agreement~~Atlanta, ~~which we refer to as the NPA First Amendment, with the purchasers party thereto~~Georgia. ~~The~~On ~~NPA~~March ~~First Amendment amended the Note Purchase Agreement dated October 24~~6, ~~2017~~2025, ~~which~~ we ~~refer~~repaid toan asapproximately ~~the Original Note Purchase Agreement~~$44,000 ~~to,~~portion ~~among other things: (1) extend the maturity date~~ of the Series A Notes ~~from~~and ~~December~~an ~~20,~~approximately ~~2024 to April 1~~$32,000 ~~2026;~~portion ~~(2) shorten the maturity date~~ of the Series B Notes from ~~December~~an ~~20,~~escrow ~~2027~~collected toon ~~April~~March 14, ~~2026;~~2025, ~~(3)~~which ~~increase~~had ~~the~~been ~~interest~~held ~~rate applicable to the Series A Notes~~ from ~~4.49% per annum to 8.00% per annum; (4) increase~~ the ~~interest~~sale ~~rate~~of ~~applicable~~a toproperty ~~the~~located ~~Series~~in BGlen ~~Notes~~Allen, ~~from 4~~Virginia.~~76%~~ As ~~per annum to 8.00% per annum; (5) provide that, if, as~~ of March 31, 2025, ~~the~~approximately ~~aggregate principal amount outstanding under the BMO Term Loan, the BofA Term Loan and the Senior Notes exceeds~~ $~~200~~71.7 million, ~~the~~aggregate ~~per~~principal ~~annum~~amount ~~interest~~of ~~rates applicable to~~ the Series A ~~Note and the Series B~~ Notes ~~will~~remained ~~permanently~~outstanding ~~increase~~and byapproximately 1$51.~~00% from 8.00% per annum to~~ 9~~.00%~~ ~~per~~million ~~annum;~~aggregate ~~(6)~~principal ~~require~~amount ~~mandatory prepayments~~ of the ~~BMO~~Series ~~Term~~B ~~Loan, the BofA Term Loan and the Senior~~ Notes ~~with~~remained ~~net cash proceeds from the disposition of property, assets and equity issuances as follows: (a) 25~~outstanding.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.

OnAs ~~February 21, 2024, as part~~ of ~~the~~March ~~NPA First Amendment~~31, we2025 ~~repaid~~and anDecember ~~approximately $29.2 million portion of the Series A Notes. In addition~~31, ~~on February 21,~~ 2024, ~~as part of~~ the ~~NPA~~interest ~~First~~rate ~~Amendment,~~on weeach ~~repaid an approximately $21.2 million aggregate principal amount~~ of the Series BA Notes~~. On~~ ~~July~~was ~~10, 2024, we repaid an approximately $7~~8.200% ~~million~~per ~~portion~~annum ofand the ~~Series~~interest Arate ~~Notes~~on ~~and an approximately $5.3 million portion of~~ the Series B Notes ~~from~~was ~~asset sale proceeds of a property located in Glen Allen, Virginia~~8. As00% ofper ~~September 30~~annum, ~~2024, approximately $79~~respectively.~~5 million aggregate principal amount of the Series A Notes remained outstanding and approximately $57.6 million aggregate principal amount of the Series B Notes remained outstanding.~~

AsEffective ofApril ~~September 30~~1, ~~2024~~2025, the interest ~~rate~~rates onapplicable to the Series A Notes ~~was 8.00% per annum~~ and the ~~interest rate on the~~ Series B Notes ~~was~~permanently increased from 8.00% per annum~~. As~~ ofto ~~December 31, 2023, the interest rate on the Series A Notes was 4~~9.4900% per annum, ~~and the interest rate on the Series B Notes was 4~~respectively.~~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 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, transactions with affiliates, certain restrictions on severance, retention and similar arrangements applicable to our executive officers, and real estate investment trust compliance requirements. In addition, the Note Purchase 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 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 ~~September~~March 3031, ~~2024~~2025.

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.

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corporate purposes.

Stock Repurchase Program

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 March 31, 2025, 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 the sale of the underlying property. The property is currently under a purchase and sale agreement for a gross sale price of $6.0 million.

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.

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Sponsored REIT Loan

The Sponsored REIT Loan is secured by a mortgage on the underlying property and has a current term of less than one year. We anticipate that a portion of 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~~Additional ~~Sponsored~~information ~~REIT~~about ~~Loan subjects us to credit risk. However, we believe that our position as asset manager of~~ the Sponsored REIT ~~helps~~Loan ~~mitigate~~outstanding ~~that~~as ~~risk by providing us with unique insight and the ability to rely on qualitative analysis~~ of ~~the~~March ~~Sponsored REIT. Before making the Sponsored REIT Loan~~31, ~~we considered a variety of subjective factors~~2025, ~~including~~is ~~the~~incorporated ~~quality~~herein ofby ~~the~~reference ~~underlying~~to ~~real~~Note ~~estate~~1, ~~leasing~~“Organization, ~~the~~Properties, ~~financial~~Basis ~~condition~~ of ~~the~~Presentation, ~~Sponsored~~Financial ~~REIT~~Instruments and ~~local~~Recent ~~and~~Accounting ~~national~~Standards” ~~market conditions. These factors are subject to change~~ and weNote do10 ~~not~~“Subsequent ~~apply~~Events”, ain ~~formula~~the orNotes ~~assign relative weights~~ to ~~the~~Consolidated ~~factors. Instead,~~Financial weStatements ~~make~~included ain ~~subjective~~this ~~determination after considering such factors collectively~~report.

Additional information about the Sponsored REIT Loan outstanding as of September 30, 2024, is incorporated herein by reference to Note 2, “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 nine~~ months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024, respectively, the rental income exceeded the expenses for each individual property, with the exception of Monument Circle for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024.

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 $6976,000 of rental income and $~~217~~293,000 of ~~rental~~operating ~~income,~~expenses ~~and~~for the three months ended March 31, 2025. Monument Circle had approximately $~~303~~71,000 of rental income and $~~832~~289,000 of operating expenses, for the three ~~and nine~~ months ended ~~September~~March 3031, 2024,. Monument ~~respectively,~~Circle ~~and~~ was 4.1% leased to two retail tenants asat each of ~~September~~March 3031, 2025 and 2024.

Monument Circle had approximately $70,000 and $207,000 of rental income, and, $304,000 and $830,000 of operating expenses, for the three and nine months ended September 30, 2023, respectively, and was 4.1% leased to two retail tenants as of September 30, 2023.

Off-Balance Sheet Arrangements and Contractual Obligations

There have been no material changes to our contractual obligations and off-balance-sheet arrangements as disclosed in our Annual Report on Form 10-K for the year ended December 31, ~~2023~~2024.

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Item 3. 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 ~~September~~March ~~30, 2024 and December~~ 31, ~~2023~~2025, 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 decrease future earnings and cash flows by approximately $0.54 million ~~and $0~~.~~7 million, respectively.~~ The interest rate on the BofA Term Loan as of ~~September~~March ~~30, 2024 and the BofA Revolver as of December~~ 31, ~~2023~~2025, was SOFR plus an adjustment of 0.11448% plus 300 basis points, or 8.00% ~~and 8.47%~~ per annum~~, respectively~~. There was $6155.76 million outstanding on the BofA Term Loan ~~and $90 million drawn on the BofA Revolver~~ as of ~~September~~March ~~30, 2024 and December~~ 31, ~~2023, respectively~~2025. We do not believe that the interest rate risk on the BofA Term Loan is material as of ~~September~~March 3031, ~~2024~~2025.

As of ~~September~~March 3031, ~~2024~~2025, if market rates on our outstanding borrowings under the BMO Term Loan 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 decrease future earnings and cash flows by approximately $0.6 million. The interest rate on the BMO Term Loan as of ~~September~~March 3031, ~~2024~~2025 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 ~~September~~March 3031, ~~2024~~2025.

The following table presents, as of September 30, 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. 37

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The following table presents, as of March 31, 2025, 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	$	6155,~~708~~595	$	—	$	—	$	6155,~~708~~595	$	—	$	—	$	—
BMO Term Loan Tranche B		7871,~~850~~039		—		—		7871,~~850~~039		—		—		—
Total	$	~~140~~126,~~558~~634	$	—	$	—	$	~~140~~126,~~558~~634	$	—	$	—	$	—

Item 4. 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 ~~September~~March 3031, ~~2024~~2025. 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 Securities and Exchange Commission’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 ~~September~~March 3031, ~~2024~~2025, 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.

Changes in Internal Control Over Financial Reporting

No change in our internal control over financial reporting occurred during the quarter ended ~~September~~March 3031, ~~2024~~2025 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II - OTHER INFORMATION

Item 1. 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 1A. Risk Factors

In addition to the other information set forth in this report, you should carefully consider the risk factors discussed in the Annual Report on Form 10-K for the year ended December 31, ~~2023~~2024 (“~~2023~~2024 Form 10-K”), which could materially affect our business, financial condition or future results. The risks described in the ~~2023~~2024 Form 10-K are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

In addition to the risk factors included in the 2024 Form 10-K, we have identified the following additional risk factors:

Our current debt maturities may raise substantial doubt about our ability to continue as a going concern

When preparing financial statements for each annual and interim reporting period, management evaluates whether there are conditions or events that, when considered in the aggregate, raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the accompanying consolidated financial statements are issued as set forth in Accounting Standards Codification (ASC) 205-40, “Presentation of Financial Statements - Going Concern.”

As of April 29, 2025, we had aggregate outstanding indebtedness under the BofA Term Loan, BMO Term Loan and the Senior Notes totaling approximately $250.2 million and maturing on April 1, 2026, which is within 12 months of the date of issuance of the financial statements accompanying this Quarterly Report on Form 10-Q.

Management intends to engage in discussions with the Company’s lenders and/or third party financing sources to extend or refinance the Company’s existing debt. Management believes that it is more likely than not that the Company will be successful in extending the maturity date or refinancing all of its existing debt. Although management believes that it is more likely than not that the Company will be able to extend the maturity date or retire the existing debt through a refinancing and/or asset sales, guidance issued under ASC 205-40 requires that management not conclude that such an outcome is “probable” if, among other factors, the outcome is not within the control of the Company. Because no such restructuring, refinancing or sale transactions have closed, such outcomes are not within the control of the Company; therefore, for accounting purposes, management is unable to conclude that such an outcome is probable. Accordingly, ASC 205-40 requires management to conclude that there is substantial doubt about the Company’s ability to continue as a going concern for at least one year following the date of issuance of the financial statements accompanying this Quarterly Report on Form 10-Q. The failure to extend the maturity dates applicable to, or retire, the BofA Term Loan, the BMO Term Loan and the Senior Notes through a refinancing and/or asset sales could lead to events of default, which would have a material adverse effect on our financial condition.

Any inability to continue to operate as a going concern or the occurrence of an event of default under our outstanding indebtedness would be expected to have a material adverse effect on the price of our common stock.

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

Changes in the financial condition of our tenants or prospective tenants directly or indirectly resulting from geopolitical developments that could negatively affect important supply chains and international trade, the termination or threatened termination of existing international trade agreements, or the implementation of tariffs or retaliatory tariffs on imported or exported goods could adversely affect the financial condition and results of operations of our tenants or prospective tenants. The uncertainty regarding the ultimate impact of any changes in trade policies or tariffs could also impact tenants or prospective tenants as they continue to determine changes needed to their businesses. Such changes in trade policy or the

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imposition of tariffs could accordingly adversely affect our ability to lease our properties which in turn could have a material adverse effect on our business, results of operations, and financial condition.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The Company did not make any repurchases of any equity securities during the three months ended ~~September~~March 3031, ~~2024~~2025.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

None.

Item 5. 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 quarterly period covered by this report.

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Item 6. Exhibits

Exhibit No.		Description

3.1 (1)		Articles of Incorporation, as amended.

3.2 (2)		Amended and Restated By-laws.

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.

101*		The following materials from FSP Corp.’s Quarterly Report on Form 10-Q for the quarter ended ~~September~~March 3031, ~~2024~~2025, formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets; (ii) the Consolidated Statements of Operations; (iii) the Consolidated Statements of Stockholders’ Equity; (iv) the Consolidated Statements of Cash Flows; (v) the Consolidated Statements of Comprehensive Income (Loss); and (vi) the Notes to Consolidated Financial Statements.

104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).


Footnotes		Description

(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).

*		Filed herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	FRANKLIN STREET PROPERTIES CORP.

Date	Signature	Title

Date: October 29, 2024	/s/ George J. Carter	Chief Executive Officer and Director
Date: April 29, 2025	/s/ George J. Carter	Chief Executive Officer and Director
	George J. Carter	(Principal Executive Officer)


Date: October 29, 2024	/s/ John G. Demeritt	Chief Financial Officer
Date: April 29, 2025	/s/ John G. Demeritt	Chief Financial Officer
	John G. Demeritt	(Principal Financial Officer)

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