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Franklin Street (FSP) Exits Durham Market With $89.7M Asset Sale
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Franklin Street Properties Corp. (FSP - Free Report) recently disposed an office building in Durham, NC for gross proceeds of $89.7 million. The sale marks the company’s exodus from the Raleigh-Durham marketplace.
The property is situated at 4820 Emperor Boulevard and comprises 259,531 square feet of office space. It is fully-leased to a tenant in the life sciences industry.
The company anticipates to record around $42 million of gain in fourth-quarter 2020 relating to the sale. Moreover, net proceeds from the asset sale will be used to repay the company’s debts. As of third-quarter end, the company had only unsecured debt with no maturities until Nov 30, 2021. Further, it had total debt of $997.6 million as of Sep 30, 2020.
In the press release related to this disposition, management noted that the sale “reflects our strategy to sell assets when we believe that their respective value proposition and resulting pricing have been maximized for our shareholders.”
Moreover, the company also intends to explore future alternative avenues for potential redeployment, including new property investments.
Markedly, by repaying debt using sale proceeds, the company is likely to strengthen its balance sheet and preserve liquidity. This is a strategic fit as uncertainties regarding rental receipts are anticipated to have taken a toll on its liquidity. While situations have improved since the onset of the pandemic with the company collecting 98% of October rental receipts as of Oct 31, 2020, it is still receiving rent relief requests from certain tenants.
In its third-quarter earnings, the company stated that it received rent relief requests mainly in the form of potential rent deferrals for varying lengths of time.The majority of these requests for relief have been in the form of potential rent deferrals for varying lengths of time. This will likely hinder its top-line growth in the near term.
CubeSmart’s (CUBE - Free Report) Zacks Consensus Estimate for 2020 funds from operations (FFO) per share has moved up marginally to $1.66 in the past week. The company currently carries a Zacks Rank of 2 (Buy).
Extra Space Storage Inc’s (EXR - Free Report) FFO per share estimates for the current year have been revised marginally upward to $5.10 in the past week. The company carries a Zacks Rank of 2, currently.
City Office REIT, Inc.’s (CIO - Free Report) Zacks Consensus Estimate for ongoing-year FFO per share has moved 5.3% north to $1.20 in two months’ time. The company has a Zacks Rank of 2 at present.
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
Just Released: Zacks’ 7 Best Stocks for Today
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.4% per year.
These 7 were selected because of their superior potential for immediate breakout.
Image: Bigstock
Franklin Street (FSP) Exits Durham Market With $89.7M Asset Sale
Franklin Street Properties Corp. (FSP - Free Report) recently disposed an office building in Durham, NC for gross proceeds of $89.7 million. The sale marks the company’s exodus from the Raleigh-Durham marketplace.
The property is situated at 4820 Emperor Boulevard and comprises 259,531 square feet of office space. It is fully-leased to a tenant in the life sciences industry.
The company anticipates to record around $42 million of gain in fourth-quarter 2020 relating to the sale. Moreover, net proceeds from the asset sale will be used to repay the company’s debts. As of third-quarter end, the company had only unsecured debt with no maturities until Nov 30, 2021. Further, it had total debt of $997.6 million as of Sep 30, 2020.
In the press release related to this disposition, management noted that the sale “reflects our strategy to sell assets when we believe that their respective value proposition and resulting pricing have been maximized for our shareholders.”
Moreover, the company also intends to explore future alternative avenues for potential redeployment, including new property investments.
Markedly, by repaying debt using sale proceeds, the company is likely to strengthen its balance sheet and preserve liquidity. This is a strategic fit as uncertainties regarding rental receipts are anticipated to have taken a toll on its liquidity. While situations have improved since the onset of the pandemic with the company collecting 98% of October rental receipts as of Oct 31, 2020, it is still receiving rent relief requests from certain tenants.
In its third-quarter earnings, the company stated that it received rent relief requests mainly in the form of potential rent deferrals for varying lengths of time.The majority of these requests for relief have been in the form of potential rent deferrals for varying lengths of time. This will likely hinder its top-line growth in the near term.
Moreover, shares of this Zacks Rank #3 (Hold) company have plunged 50.8% in the past year compared with the industry’s decline of 4.7%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Stocks to Consider
CubeSmart’s (CUBE - Free Report) Zacks Consensus Estimate for 2020 funds from operations (FFO) per share has moved up marginally to $1.66 in the past week. The company currently carries a Zacks Rank of 2 (Buy).
Extra Space Storage Inc’s (EXR - Free Report) FFO per share estimates for the current year have been revised marginally upward to $5.10 in the past week. The company carries a Zacks Rank of 2, currently.
City Office REIT, Inc.’s (CIO - Free Report) Zacks Consensus Estimate for ongoing-year FFO per share has moved 5.3% north to $1.20 in two months’ time. The company has a Zacks Rank of 2 at present.
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
Just Released: Zacks’ 7 Best Stocks for Today
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.4% per year.
These 7 were selected because of their superior potential for immediate breakout.
See these time-sensitive tickers now >>