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UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM 8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date
of Report (Date of earliest event reported): February 26, 2026
Franklin
Street Properties Corp.
(Exact name of registrant
as specified in its charter)
| Maryland |
|
001-32470 |
|
04-3578653 |
(State
or other jurisdiction
of incorporation) |
|
(Commission
File
Number) |
|
(IRS
Employer
Identification No.) |
401
Edgewater Place, Suite 200,
Wakefield,
Massachusetts | |
01880 |
| (Address of principal executive offices) | |
(Zip Code) |
Registrant’s telephone
number, including area code: (781) 557-1300
(Former name or former address,
if changed since last report.)
Check the appropriate box below if the Form 8-K
filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see
General Instruction A.2. below):
¨ Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section
12(b) of the Act:
| Title
of each class |
|
Trading
Symbol (s) |
|
Name
of each exchange on which
registered |
| Common Stock, $.0001 par value per share |
|
FSP |
|
NYSE American |
Indicate by check mark whether the
registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or
Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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. ¨
Item 1.01. Entry into a Material Definitive Agreement.
Credit Agreement
On
February 26, 2026 (the “Closing Date”), Franklin Street Properties Corp. (the “Company”) entered into a Credit
Agreement (the “New Credit Agreement”) with Alter Domus (US) LLC, as administrative agent (the “Agent”), and Silver
Oak Capital LLC, an affiliate of TPG Credit (collectively, the lenders from time to time party thereto, the “Lenders”). The
New Credit Agreement provides for a secured credit facility (the “Credit Facility”) for aggregate principal commitments of
up to $320,000,000, consisting of (i) initial term loans in an aggregate principal amount of $275,000,000 (the “Initial Term
Loans”), and (ii) delayed draw term loans available upon the approval of the Lenders after the Closing Date in an aggregate
principal amount of up to $45,000,000 (the “Delayed Draw Term Loans” and together with the Initial Term Loans, the “Term
Loans”). The Delayed Draw Term Loans may be used, subject to certain conditions, to fund tenant improvements, leasing commissions,
building improvements and other uses approved by the Lenders.
The
Term Loans are not subject to amortization and have an initial stated maturity date of February 26, 2029. The maturity date is subject
to potential extension of up to one year at the option of the Company, subject to the satisfaction of certain conditions (the “Extension
Option”).
Borrowings under the Credit
Facility bear interest at an initial interest rate of 9.0% per annum. The Initial Term Loans were issued with original issue discount
of 6.0% of the principal amount thereof. The Delayed Draw Term Loans, if any, will be issued with original issue discount of 6.0% of the
principal amount thereof.
If the Company exercises the Extension Option,
the interest rate will increase to a rate of 13.0% per annum. Additionally, if the Company exercises the Extension Option, the Company
must pay the following extension fees multiplied by the then-outstanding principal amount of Term Loans on each applicable date:
(i) 36th
month anniversary of Closing Date: 2.00%
(ii) 39th
month anniversary of Closing Date: 0.50%
(iii) 42nd
month anniversary of Closing Date: 0.50%
(iv) 45th
month anniversary of Closing Date: 0.50%
(v) 48th
month anniversary of Closing Date: 0.50%
The New Credit Agreement requires
the Company to prepay outstanding Term Loans with certain proceeds of dispositions of real property. Additionally, the Company may voluntarily
prepay the outstanding Term Loans at any time; provided, that if the Company prepays any Term Loans prior to the first anniversary of
the Closing Date, the Company is required to pay a make-whole payment equal to the amount of interest that would have accrued on such
Term Loans to and excluding the first anniversary of the Closing Date. The Company is required to pay an exit fee of 4.0% of the aggregate
principal amount of such Term Loans upon any permitted repayment of the Term Loans prior to the applicable maturity date.
The Company must also pay
customary agency fees.
The obligations under the Credit Facility are guaranteed
by substantially all subsidiaries of the Company and secured by a first priority lien on substantially all of the assets of the Company
and its subsidiaries, including a first priority security interest in all of the Company’s and its subsidiaries’ personal
property and a first priority mortgage liens on the Company’s and its subsidiaries’ real property, in each case subject to
certain exceptions.
The
New Credit Agreement contains customary representations and affirmative and negative covenants for credit facilities of this type, including,
without limitation and subject to certain exceptions, restrictions on indebtedness, liens, investments, mergers, consolidations and other
fundamental changes, dispositions of assets (including real property), capital expenditures, changes in business, certain restricted payments,
transactions with affiliates, burdensome agreements, sale leaseback transactions, prepayments of other debt, corporate operating expenses
and severance and retention payments.
The
New Credit Agreement also contains financial covenants that require the Company to maintain (i) a minimum tangible net worth $424,884,000
plus 70% of the aggregate net proceeds received by the Company in connection with any offering of stock or other equity in the Company
after December 31, 2025 (with a step-down based on the sale of mortgaged properties of the Company and its subsidiaries) and (ii) a
minimum liquidity of not less than $5,000,000 in cash or cash equivalents.
The
Credit Agreement provides for customary events of default with corresponding grace periods, including, among other things, failure to
pay principal or interest when due, breaches of certain covenants, inaccuracies in representations and warranties, certain cross defaults,
certain defaults under material contracts, insolvency or bankruptcy events, the entry of certain judgments, the occurrence of a change
in control of the Company (as defined in the Credit Agreement) and the departure of the chairman and chief executive officer of the Company.
In the event of a default by the Company, the Agent may, and at the request of the requisite number of Lenders shall, declare any commitment
of the Lenders to make Term Loans terminated, declare all obligations under the New Credit Agreement immediately due and payable and enforce
any and all rights of the Lenders under the New Credit Agreement and related documents. Certain events of default related to bankruptcy,
insolvency, and receivership result in the automatic acceleration of all outstanding obligations.
The
Company used the proceeds of the Initial Term Loans on the Closing Date to refinance and retire all outstanding indebtedness under the
Existing Debt Agreements (as defined below in Item 1.02) and to pay fees and expenses related to the New Credit Agreement. The Company
may use the proceeds of any Delayed Draw Term Loans funded to finance tenant improvements, leasing commissions, building improvements
and other uses approved by the Lenders, subject to certain conditions, in each case as permitted under the New Credit Agreement.
The
New Credit Agreement is attached to this Current Report on Form 8-K as Exhibit 10.1. The foregoing summary of the New Credit
Agreement is qualified in its entirety by the complete text of the New Credit Agreement.
Item 1.02. Termination of a Material Definitive Agreement.
On February 26, 2026, in connection with
the entry into the New Credit Agreement described above, the Company terminated and prepaid all outstanding indebtedness under (i) the
Second Amended and Restated Credit Agreement, dated as of September 27, 2018 (as amended by the First Amendment to Second Amended
and Restated Credit Agreement, dated as of February 10, 2023 and by the Second Amendment to Second Amended and Restated Credit Agreement,
dated as of February 21, 2024), by and among Company, the Bank of Montreal, as administrative agent, and the other lenders from time
to time party thereto (the “BMO Credit Agreement”), (ii) the Credit Agreement, dated as of January 10, 2022 (as
amended by the First Amendment to Credit Agreement, dated as of February 10, 2023, and by the Second Amendment to Credit Agreement,
dated as of February 21, 2024), by and among the Company, Bank of America, N.A., as administrative agent, and the other lenders from
time to time party thereto (the “BofA Credit Agreement”) and (iii) the Note Purchase Agreement, dated as of October 24,
2017, as amended by the First Amendment to Note Purchase Agreement, dated as of February 21, 2024, by and among Company, the purchasers
named therein and Acquiom Agency Services LLC, as collateral agent, and the various notes issued thereunder (the “Note Purchase
Agreement” and together with the BMO Credit Agreement and the BofA Credit Agreement, the “Existing Debt Agreements”).
At the time of termination, there was approximately $249 million of outstanding principal amount of indebtedness under the Existing Debt
Agreements.
Item 2.03 Creation
of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information under Item 1.01
of this Current Report on Form 8-K is incorporated into this Item 2.03 by reference.
Item 5.02. Departure of Directors or Certain Officers; Election
of Directors; Appointments of Certain Officers; Compensatory Arrangements of Certain Officers.
(b) Departure of Director.
On February 27, 2026, Mr. Milton P. Wilkins, Jr.,
a member of our Board of Directors (the “Board”), notified us of his decision not to stand for re-election at our upcoming
2026 annual meeting of stockholders (the “2026 Annual Meeting”). Mr. Wilkins will continue to serve until his term expires
at our 2026 Annual Meeting. The decision by Mr. Wilkins not to stand for re-election was entirely voluntary and not the result of
any disagreement with Franklin Street Properties Corp.
Item 8.01 Other Events.
On February 27, 2026,
the Company issued a press release announcing its entry into the Credit Agreement described in Item 1.01 above. A copy of the press
release is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Item 9.01 Financial Statements and
Exhibits.
(d) Exhibits
Exhibit
No. |
|
Exhibit Description |
| 10.1 |
|
Credit Agreement, dated February 26, 2026, among Franklin Street Properties Corp., Alter Domus (US) LLC and the lenders party thereto. |
| |
|
|
| 99.1 |
|
Press Release, dated February 27, 2026. |
| |
|
|
| 104 |
|
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101 ). |
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 hereunto
duly authorized.
| FRANKLIN STREET PROPERTIES CORP. |
| |
|
| Date: March 4, 2026 |
By: |
/s/ George J. Carter |
| |
|
George J. Carter |
| |
|
Chief Executive Officer |
Exhibit 99.1
| PRESS RELEASE |
Franklin Street Properties Corp. |
401 Edgewater Place ·
Suite 200 · Wakefield, Massachusetts 01880 ·
(781) 557-1300 · www.fspreit.com
Contact: Georgia Touma, Investor
Relations - 877-686-9496
For Immediate Release
Franklin Street
Properties Corp. Closes
$320 Million
Secured Credit Facility
Refinancing All
Outstanding Indebtedness
and Provides
Additional Update on Review of Strategic Alternatives
WAKEFIELD, MA
– February 27, 2026 – Franklin Street Properties Corp. (the “Company”, “FSP”, “our”
or “we”) (NYSE American: FSP) announced today that it has closed a $320 million secured credit facility (the “Facility”)
with an affiliate of TPG Credit (the “Lender”). The Company repaid in full all of its outstanding $248.9 million aggregate
principal amount of indebtedness in an initial drawdown of $258.5 million under the Facility, net of original issue discount of $16.5
million (the “Initial Term Loans”). The Facility includes up to $45 million of delayed draw term loans, which, subject to
certain conditions, will be used to fund tenant improvements, leasing commissions, building improvements and other uses approved by the
Lender (“Delayed Draw Term Loans”) and contains customary covenants. Alter Domus (US) LLC will act as administrative agent
for the Facility.
A summary of key
terms is below:
| · | Aggregate
principal amount $320 million (including both the Initial Term Loans and the Delayed Draw
Term Loans). |
| · | Original
stated maturity of February 26, 2029. |
| · | Initial
coupon rate of 9.0%. |
| · | An
exit fee of 4.0% of the funded amount of the loans due upon repayment. |
| · | The
maturity date is subject to potential extension of up to one year at the option of the Company,
subject to certain conditions. |
| · | Collateral
consisting of a first priority lien on substantially all assets of the Company. |
FSP was represented
by Wilmer Cutler Pickering Hale and Dorr LLP and Stifel. The Lender was represented by Paul, Weiss, Rifkind, Wharton & Garrison LLP.
George J. Carter,
Chairman and Chief Executive Officer of FSP, said, “After considering a number of different potential strategic alternatives in
consultation with our professional advisors, we concluded that refinancing our outstanding indebtedness was the best alternative available
to us at this time. In addition, the Delayed Draw Term Loan feature of the Facility provides additional flexibility to allow us to lease
additional space in our existing portfolio, which could enhance future value. We are pleased to have TPG as a strategic lending partner
and look forward to building a long-term relationship with them.
However, now that
our near-term debt maturity has been addressed, we are continuing our review of potential strategic alternatives. Our Board of Directors
and management team remain deeply committed to continuing to explore ways to maximize shareholder value. We believe that having successfully
addressed our near-term debt maturities has reduced a significant source of near-term uncertainty and avoided having to make forced or
suboptimal decisions, enabling us to focus on executing property-level initiatives in what continues to be an uneven office market environment.
We believe this approach best positions the Company to navigate current market conditions while preserving maximum strategic flexibility.
We look forward to continuing to update the market as and when appropriate.”
David Busker, Managing
Director and Head of Commercial Real Estate Debt, TPG Credit, said “We are pleased to partner with Franklin Street Properties to
provide a tailored capital solution that provides the financial flexibility needed to navigate the current market. We look forward to
supporting the Board and management team as they work to enhance value for all shareholders.”
This press release,
along with other news about FSP, is available on the Internet at www.fspreit.com. We routinely post information that may be important
to investors in the Investor Relations section of our website. We encourage investors to consult that section of our website regularly
for important information about us and, if they are interested in automatically receiving news and information as soon as it is posted,
to sign up for E-mail Alerts.
About Franklin
Street Properties Corp.
Franklin Street
Properties Corp., based in Wakefield, Massachusetts, is focused on investing in institutional-quality office properties in the U.S. FSP’s
strategy is to invest in select urban infill and central business district (CBD) properties, with primary emphasis on our core markets
of Dallas, Denver, Houston, and Minneapolis. FSP seeks value-oriented investments with an eye towards long-term growth and appreciation,
as well as current income. FSP is a Maryland corporation that operates in a manner intended to qualify as a real estate investment trust
(REIT) for federal income tax purposes. To learn more about FSP please visit our website at www.fspreit.com.
Forward-Looking
Statements
Statements
made in this press release that state FSP’s or management’s intentions, beliefs, expectations, or predictions for the future
may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. This press release 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 as a result of the long-term effects of the COVID-19 pandemic, wars, terrorist attacks or other acts of violence, which may
negatively affect the markets in which we and our tenants operate, 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 rates, interest rates, 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, 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, changes in government regulations and regulatory uncertainty, uncertainty about governmental
fiscal policy, geopolitical events and expenditures that cannot be anticipated, such as utility rate and usage increases, delays in construction
schedules, unanticipated increases in construction costs, increases in the level of general and administrative costs as a percentage
of revenues as revenues decrease as a result of property dispositions, unanticipated repairs, additional staffing, insurance increases,
real estate tax valuation reassessments, the availability of suitable third parties with which to conduct contemplated strategic transactions,
and whether we will be able to pursue a strategic transaction, or whether any transaction, if pursued, will be completed on attractive
terms or at all. See“Risk Factors” set forth in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December
31, 2024, as updated in Part II Item 1A of our Quarterly Report on Form 10-Q for the nine months ended September 30, 2025, which may
be further updated from time to time in subsequent filings with the United States Securities and Exchange Commission. Although we believe
the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity,
acquisitions, dispositions, performance or achievements. We will not update any of the forward-looking statements after the date of this
press release to conform them to actual results or to changes in our expectations that occur after such date, other than as required
by law.
For Franklin
Street Properties Corp.
Georgia Touma, 877-686-9496
Source: Franklin
Street Properties Corp.
