For Franklin Street Properties first quarter 2019 earnings call, chairman and CEO George Carter noted that the company has talked about a large, approximately three-year lease roll bulge that FSP is dealing with. “The bulk of which occurs in 2018, 2019 and 2020,” he said, noting that a large lease roll is both a challenge and an opportunity.
“We like and are optimistic about our current portfolio of office properties, and the concentrations of square footage in targeted markets with strong infrastructure and long-term growth dynamics,” he said. “We have financially prepared for the current effort by increasing our available liquidity as well as terming out and fixing rates on much of our debt, all of which remains unsecured.”
Leasing activity within the company’s portfolio continues at a record pace, much of it renewing or backfilling existing tenant lease rollover space. “But successfully handling this rollover space is important.”
He said that it must be achieved before net new absorption can take place. “We believe net new absorption is on the way in 2019 and 2020 in our 32 operating properties as well as our three redeveloped properties.”
Generally, he says he is seeing rising rents and longer leases at the company’s properties. “We continue to believe 2019 is likely to be the trough in our percentage of lease space.”