Franklin Street Properties Reports $7.9 Million Net Loss in Q2 2025, Improved from Previous Year

Franklin Street Properties Corp. reported a net loss of $7.9 million for the three months ended June 30, 2025, a significant improvement compared to a net loss of $21.0 million for the same period in 2024. Total revenues for the second quarter of 2025 were $26.7 million, down from $30.8 million in the prior year, primarily due to a decrease in rental income attributed to the sale of three properties in 2024 and other lease expirations. For the six months ended June 30, 2025, the company recorded a net loss of $29.3 million, slightly higher than the $28.6 million loss reported in the same period of 2024, with total revenues decreasing to $53.8 million from $62.1 million.

The company’s total expenses for the second quarter of 2025 were $35.1 million, down from $39.0 million in the previous year, reflecting reductions in real estate operating expenses, real estate taxes, and interest expenses. The decrease in expenses was largely due to the property dispositions that occurred in 2024. The company also reported a gain of $384,000 on the sale of properties during the quarter, contrasting with a loss of $13.2 million in the same period last year.

As of June 30, 2025, Franklin Street Properties owned 14 properties with a total rentable area of approximately 4.8 million square feet, down from 17 properties and 5.5 million square feet a year earlier. The occupancy rate for the owned properties was 69.1%, a decrease from 72.3% in the prior year, primarily due to lease expirations. The company leased approximately 187,000 square feet of office space during the first half of 2025, with an average lease term of 6.3 years.

In terms of financial obligations, Franklin Street Properties had total outstanding debt of approximately $249.8 million as of June 30, 2025, with significant maturities due on April 1, 2026. The company is currently exploring strategic alternatives, including potential asset sales and refinancing options, to address its debt obligations. Management expressed confidence in their ability to extend or refinance the existing debt, although they acknowledged that there is substantial doubt about the company's ability to continue as a going concern if these efforts are unsuccessful.

Looking ahead, Franklin Street Properties aims to focus on its core strategy of managing and leasing office properties in the U.S. sunbelt and mountain west regions. The company plans to continue pursuing property dispositions to enhance liquidity and reduce debt, while actively marketing existing vacancies to potential tenants. However, management noted that current economic conditions and the lingering effects of the COVID-19 pandemic may pose challenges to leasing activity in the near term.