Franklin Street Properties Closes \$320 Million Secured Credit Facility, Eliminates Near-Term Debt Risk, and Provides Strategic Alternatives Update

Key Highlights for Investors

• Franklin Street Properties Corp. (NYSE American: FSP) has closed a new \$320 million secured credit facility with TPG Credit, fully refinancing all of its outstanding indebtedness.
• The facility repays \$248.9 million in existing debt, eliminating significant near-term refinancing risk.
• The new facility has a 9.0% initial coupon rate, a 4.0% exit fee upon repayment, and matures on February 26, 2029, with an option to extend for up to one additional year (subject to conditions).
• The facility includes up to \$45 million in delayed draw term loans, which can be used for tenant improvements, leasing commissions, and building upgrades—providing FSP with capital flexibility for property-level initiatives.
• First priority lien on substantially all of FSP’s assets, giving the lender substantial security but also signaling FSP’s proactive approach to balance sheet management.
• Strategic alternatives review ongoing: With near-term debt risk addressed, FSP’s Board and management will continue exploring options to maximize shareholder value.

Details of the Credit Facility

• Aggregate principal: \$320 million (includes \$258.5 million initial term loans and up to \$45 million delayed draw term loans).
• Net initial drawdown: \$258.5 million (after deducting \$16.5 million original issue discount).
• Interest rate: 9.0% coupon, with a 4.0% exit fee due on repayment.
• Maturity: February 26, 2029, with option for a one-year extension.
• Use of proceeds: Fully repaid all \$248.9 million of prior outstanding indebtedness.
• Collateral: First priority lien on substantially all of the company’s assets.
• Delayed draw term loans: Up to \$45 million, subject to conditions, for approved capital expenditures.
• Administrative agent: Alter Domus (US) LLC.
• Legal and advisory: FSP advised by Wilmer Cutler Pickering Hale and Dorr LLP and Stifel; Lender advised by Paul, Weiss, Rifkind, Wharton & Garrison LLP.

Management Quote & Strategic Direction

George J. Carter, Chairman and CEO: “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. The Delayed Draw Term Loan feature provides flexibility for leasing and property enhancement, potentially boosting future value. Now, with near-term debt maturities addressed, we are continuing our review of potential strategic alternatives with a focus on maximizing shareholder value. This reduces near-term uncertainty and avoids the need for forced or suboptimal decisions, allowing us to focus on property-level execution in a challenging office market.”

David Busker, Managing Director, Head of Commercial Real Estate Debt, TPG Credit: “We are pleased to provide a tailored capital solution that offers financial flexibility to navigate current market conditions. We look forward to supporting FSP’s Board and management as they work to enhance value for all shareholders.”

Implications for Shareholders

• Elimination of near-term refinancing risk: The full repayment of existing debt removes a significant risk factor that could have pressured the share price.
• Strategic flexibility: The delayed draw facility provides capital for leasing and property improvements, supporting rent and occupancy stabilization or growth.
• Ongoing review of strategic alternatives: FSP’s Board remains open to value-maximizing transactions—including potential sales, mergers, recapitalizations, or other strategic options. This is a key area for shareholders to monitor, as any significant transaction could materially impact share value.
• Leverage and cost of capital: While the new facility carries a relatively high 9% coupon rate and a 4% exit fee, it provides immediate resolution to near-term maturities and flexibility for property-level initiatives.
• Market context: The office market remains “uneven,” and management’s focus is on property-level execution and maintaining maximum flexibility for future strategic actions.

About Franklin Street Properties

Franklin Street Properties Corp., headquartered in Wakefield, Massachusetts, is a REIT focusing on institutional-quality office properties, particularly in Dallas, Denver, Houston, and Minneapolis. The company’s strategy is value-oriented, targeting urban infill and central business district properties for long-term growth and income. FSP operates to maintain its REIT status for tax purposes.

Forward-Looking Statements & Risks

The press release contains forward-looking statements subject to risks and uncertainties, including economic conditions, interest rates, real estate demand, regulatory changes, and the ability to execute strategic transactions. Investors are encouraged to review the “Risk Factors” section in FSP’s SEC filings for a comprehensive understanding of potential risks.

Investor Information

For more information and to receive updates, shareholders and investors are encouraged to visit the Investor Relations section of www.fspreit.com and sign up for E-mail Alerts.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own analysis and consult with professional advisors before making investment decisions. Forward-looking statements are subject to risks and uncertainties, and actual results may differ materially from those indicated.

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