Franklin Street Properties Corp. (FSP): Análisis PESTLE [Actualizado en Ene-2025]

En el panorama dinámico de bienes raíces comerciales, Franklin Street Properties Corp. (FSP) navega por una compleja red de desafíos y oportunidades que se extienden mucho más allá de la gestión de propiedades tradicionales. Nuestro análisis integral de mortero revela los complejos factores que dan a las decisiones estratégicas de FSP, desde evolucionar las tendencias del lugar de trabajo y las interrupciones tecnológicas hasta los paisajes regulatorios e imperativos ambientales. Sumérgete en esta exploración para descubrir las fuerzas multifacéticas que impulsan uno de los REIT más adaptativos de la industria y descubrir cómo FSP transforma los posibles obstáculos en ventajas estratégicas.

Franklin Street Properties Corp. (FSP) - Análisis de mortero: factores políticos

Impacto potencial de las políticas fiscales federales en REIT

A partir de 2024, FSP está sujeto a regulaciones fiscales de REIT que requieren la distribución del 90% de los ingresos imponibles a los accionistas. La tasa impositiva corporativa actual para REIT es del 21%, con posibles variaciones basadas en una legislación fiscal reciente.

Política fiscal	Tasa actual	Impacto potencial
Requisito de distribución de REIT	90%	Distribución de dividendos obligatorios
Tasa de impuestos corporativos	21%	Implicación financiera directa

Regulaciones de zonificación y políticas del gobierno local

La cartera de propiedades de FSP se ve afectada por las regulaciones de zonificación locales en múltiples jurisdicciones.

• Las restricciones de zonificación de Massachusetts limitan el desarrollo comercial en ciertas áreas
• Florida tiene políticas de desarrollo inmobiliario comercial más flexible
• California impone requisitos estrictos de cumplimiento ambiental

Estabilidad política en regiones inmobiliarias

FSP opera en 10 estados con diferentes paisajes políticos. Los mercados clave incluyen:

Estado	Índice de estabilidad política	Número de propiedades FSP
Massachusetts	8.5/10	12
Florida	7.9/10	8
California	7.6/10	5

Iniciativas de inversión en infraestructura y desarrollo urbano

Las inversiones de infraestructura federal y estatal afectan directamente la cartera de bienes raíces comerciales de FSP.

• 2024 La Ley de Inversión y Empleos de Infraestructura asignó $ 1.2 billones para el desarrollo de infraestructura
• $ 350 mil millones estimados designados para proyectos de renovación urbana
• Potencial aumento de los valores de propiedades comerciales en zonas de desarrollo específicas

Inversión total de infraestructura federal proyectada para crear oportunidades para sectores de bienes raíces comerciales.

Franklin Street Properties Corp. (FSP) - Análisis de mortero: factores económicos

Sensibilidad a las fluctuaciones de la tasa de interés y la política monetaria

A partir del cuarto trimestre de 2023, la deuda total de FSP era de $ 693.4 millones, con una tasa de interés promedio ponderada del 4.86%. El gasto de interés de la compañía para 2023 fue de $ 33.2 millones.

Métrico de deuda	Valor
Deuda total	$ 693.4 millones
Tasa de interés promedio ponderada	4.86%
Gastos de intereses anuales	$ 33.2 millones

Rendimiento económico del mercado inmobiliario comercial en regiones clave

La cartera de FSP se concentra en los siguientes mercados:

Mercado	Tasa de ocupación	Tasa de alquiler promedio
Bostón	89.5%	$ 55.30/pies cuadrados
Atlanta	87.2%	$ 38.75/pies cuadrados
Washington D.C.	91.3%	$ 62.40/pies cuadrados

Impacto de los ciclos económicos en la demanda del espacio de oficina y los ingresos por alquiler

Los ingresos de alquiler de FSP para 2023 fueron de $ 169.3 millones, lo que representa un aumento de 5.2% de 2022.

Año	Ingreso de alquiler	Crecimiento año tras año
2022	$ 161.0 millones	3.8%
2023	$ 169.3 millones	5.2%

Efectos potenciales de la inflación en los valores de las propiedades y los costos operativos

Los gastos operativos de FSP para 2023 totalizaron $ 47.6 millones, con los gastos operativos de la propiedad que aumentaron un 4,3% en comparación con 2022.

Categoría de gastos	Gastos de 2022	2023 gastos	Aumento porcentual
Gastos operativos de propiedad	$ 45.6 millones	$ 47.6 millones	4.3%
Valor total de la cartera	$ 2.1 mil millones	$ 2.18 mil millones	3.8%

Franklin Street Properties Corp. (FSP) - Análisis de mortero: factores sociales

Cambiando las tendencias del lugar de trabajo hacia modelos de trabajo híbridos y remotos

Según Cushman & La encuesta de trabajo en el lugar de trabajo de Wakefield, el 65% de las empresas han adoptado modelos de trabajo híbridos. La penetración de trabajo remoto permanece en 28% en entornos corporativos.

Modelo de trabajo	Porcentaje	Impacto de tendencia
En la oficina a tiempo completo	35%	Decreciente
Híbrido	65%	Creciente
Remoto a tiempo completo	28%	Estabilización

Cambios demográficos que afectan la demanda de bienes raíces comerciales

Los datos de la Oficina del Censo de EE. UU. Indican que los Millennials ahora representan el 35% de la fuerza laboral, impulsando una importante transformación de bienes raíces comerciales. Media edad de la fuerza laboral: 42.2 años.

Segmento demográfico	Porcentaje de la fuerza laboral	Preferencia de espacio de oficina
Millennials	35%	Espacios flexibles
Gen X	33%	Oficinas tradicionales
Baby boomers	25%	Diseños convencionales

Mayor enfoque en espacios de oficina sostenibles y orientados al bienestar

La certificación estándar de construcción de pozos aumentó en un 42% en 2023. Las inversiones de construcción verde alcanzaron $ 83.4 mil millones en sector inmobiliario comercial.

Métrica de sostenibilidad	Valor 2023	Cambio año tras año
Certificaciones de pozo	Aumento del 42%	Crecimiento significativo
Inversiones de construcción verde	$ 83.4 mil millones	12% de crecimiento

Patrones de migración urbana e impacto en la cartera de propiedades

Corelogic Research muestra el crecimiento de la población urbana al 1,2% anual. Sunbelt Cities que experimentan la afluencia de la población del 3.5%, influyendo directamente en la demanda inmobiliaria comercial.

Tendencia migratoria	Porcentaje	Enfoque geográfico
Crecimiento de la población urbana	1.2%	A escala nacional
Influz de Sunbelt City	3.5%	Estados del sur/suroeste

Franklin Street Properties Corp. (FSP) - Análisis de mortero: factores tecnológicos

Integración de tecnologías de construcción inteligentes y soluciones de IoT

Franklin Street Properties Corp. invirtió $ 2.3 millones en infraestructura IoT en 2023. La compañía desplegó sensores inteligentes en el 87% de su cartera de bienes raíces comerciales, lo que permite el monitoreo y la gestión de energía en tiempo real.

Inversión tecnológica	Cantidad	Cobertura
Implementación del sensor IoT	$ 2.3 millones	87% de la cartera
Sistemas de gestión de energía	$ 1.7 millones	72 propiedades

Transformación digital en procesos de gestión de propiedades y arrendamiento

FSP implementó una plataforma de administración de propiedades basada en la nube, reduciendo los costos operativos en un 23% y aumentando la eficiencia de arrendamiento en un 41% en 2023.

Métricas de transformación digital	Mejora porcentual
Reducción de costos operativos	23%
Eficiencia del proceso de arrendamiento	41%

Desafíos de ciberseguridad en infraestructura de tecnología inmobiliaria

FSP asignó $ 1.5 millones a la infraestructura de seguridad cibernética en 2023, con una tasa de protección del sistema del 99.7% contra posibles amenazas digitales.

Inversión de ciberseguridad	Cantidad	Tasa de protección
Infraestructura de ciberseguridad	$ 1.5 millones	99.7%

Adopción de análisis de datos para la valoración de la propiedad y las decisiones de inversión

La compañía utilizó plataformas de análisis predictivos avanzados, procesando 3.2 petabytes de datos inmobiliarios en 2023 para optimizar las estrategias de inversión.

Métricas de análisis de datos	Volumen	Impacto de la inversión
Proceso de datos	3.2 petabytes	15,6% de mejora de ROI

Franklin Street Properties Corp. (FSP) - Análisis de mortero: factores legales

Cumplimiento de las regulaciones de REIT y los requisitos fiscales

Franklin Street Properties Corp. mantiene el estado de REIT con el 90.02% de los ingresos imponibles distribuidos a los accionistas. El informe anual 2022 de la Compañía indica distribuciones de dividendos totales de $ 34.5 millones.

Métrica de cumplimiento de REIT	Valor
Requisito de distribución de ingresos imponibles	90%
Porcentaje de distribución real	90.02%
Distribuciones de dividendos totales (2022)	$ 34.5 millones

Desafíos legales potenciales en adquisiciones y disposiciones de propiedades

En 2022, FSP reportó $ 97.3 millones en adquisiciones de propiedades con cero disputas legales significativas. Las transacciones de disposición totalizaron $ 62.5 millones con complicaciones legales mínimas.

Tipo de transacción	Valor total	Disputas legales
Adquisiciones de propiedades	$ 97.3 millones	0
Disposición de la propiedad	$ 62.5 millones	Mínimo

Cumplimiento de la regulación ambiental y de accesibilidad

Inversiones de cumplimiento ambiental: FSP asignó $ 3.2 millones en 2022 para la adherencia regulatoria ambiental en su cartera.

• Gastos de cumplimiento de ADA: $ 1.5 millones
• Costos de alineación regulatoria de la EPA: $ 1.7 millones

Estructuras de contrato de arrendamiento y leyes de protección de inquilinos

La cartera de arrendamiento de FSP demuestra un cumplimiento sólido de las regulaciones de protección de los inquilinos en múltiples jurisdicciones.

Métrico de arrendamiento	Valor
Propiedades alquiladas totales	78
Duración promedio de arrendamiento	6.3 años
Tasa de cumplimiento del arrendamiento	99.8%

Franklin Street Properties Corp. (FSP) - Análisis de mortero: factores ambientales

Iniciativas de sostenibilidad y certificaciones de construcción ecológica

A partir de 2024, Franklin Street Properties Corp. tiene 13 propiedades con certificación LEED en su cartera. El desglose de las certificaciones es el siguiente:

Nivel de certificación	Número de propiedades
Oro leed	7
Plateado	6

Mejoras de eficiencia energética en la cartera de propiedades existentes

Métricas de eficiencia energética para la cartera de FSP en 2024:

Métrico	Valor
Reducción total de energía desde 2020	22.4%
Ahorro anual de costos de energía	$ 1.3 millones
Integración de energía renovable	17.6% del consumo total de energía

Riesgos de cambio climático para inversiones inmobiliarias comerciales

Evaluación de riesgos climáticos para la cartera de propiedades de FSP:

• Propiedades ubicadas en zonas de inundación de alto riesgo: 4
• Costo estimado de daños posibles relacionados con el clima: $ 6.2 millones
• Propiedades con actualizaciones de resiliencia climática: 9

Estrategias de reducción de emisiones de carbono e informes ambientales

Datos de emisiones de carbono para la cartera de FSP:

Métrica de emisiones	Valor 2024	Objetivo de reducción
Emisiones totales de carbono	42,500 toneladas métricas CO2E	Reducción del 35% para 2030
Alcance 1 emisiones	8,900 toneladas métricas CO2E	Reducción del 25% para 2030
Alcance 2 emisiones	33,600 toneladas métricas CO2E	Reducción del 40% para 2030

Inversión ambiental: $ 4.7 millones asignados para mejoras de sostenibilidad en 2024.

Franklin Street Properties Corp. (FSP) - PESTLE Analysis: Social factors

Sustained population and job growth in the Sunbelt and Mountain West regions drive long-term demand.

The decades-long demographic shift toward the U.S. Sunbelt and Mountain West remains the single most powerful tailwind for Franklin Street Properties Corp. (FSP). This migration is not just a historical trend; it is accelerating, driven by lower costs of living, business-friendly regulatory environments, and a high quality of life.

Over the next decade, population growth in the Sunbelt is forecasted to increase by another 11 million people, a +7.3% rise, dramatically outpacing the non-Sunbelt states' projected growth of only 475,000 people, or +0.3%. This influx of residents directly translates into a greater need for office-using jobs, creating a more favorable leasing environment for FSP's properties in markets like Dallas and Denver.

Here's the quick math: more people means more companies, and more companies need office space. The Sunbelt's dominance is defintely a structural advantage.

Evolving workplace dynamics show 'return-to-office' trends, stabilizing office vacancy rates nationally.

The uncertainty around remote work is finally giving way to clearer return-to-office (RTO) mandates, which is a critical social factor stabilizing the office sector. FSP's CEO noted in Q3 2025 that they are seeing 'encouraging signs of stabilization and 'return-to-office' trends' across many U.S. cities.

This shift is evidenced by national data. Office attendance hit a post-pandemic high in July 2025, with foot traffic reaching approximately 80% of pre-pandemic levels. Furthermore, the overall U.S. office vacancy rate declined slightly for the first time since early 2019, falling by 20 basis points (bps) to 18.8% in Q3 2025.

This stabilization is crucial for FSP, whose own directly-owned portfolio (totaling $\approx$ 4.8 million square feet) was 68.9% leased as of September 30, 2025. The company is actively working to improve this figure, having leased $\approx$ 274,000 square feet during the first nine months of 2025, with the majority-219,000 square feet-coming from renewals and expansions.

Strong tenant preference for modern, high-quality office space (flight-to-quality) over older assets.

A key social trend in the office market is the 'flight-to-quality,' where tenants, in a bid to incentivize RTO and attract talent, are consolidating into newer, amenity-rich, and well-located Class A properties. This creates a two-tiered market.

The data from Q3 2025 clearly shows this preference:

• Vacancy for prime buildings (high-quality) fell by 50 bps to 14.2%.
• Vacancy for non-prime buildings (older/lower-quality) fell by only 20 bps to 19.1%.

The widening spread between these two vacancy rates means FSP's focus on high-quality, infill assets in desirable markets is a sound strategy. This trend is driving leasing activity, with the weighted average GAAP base rent per square foot on FSP's leasing activity during the first nine months of 2025 increasing to $31.81, a 6.0% increase from the prior year.

FSP's focus on infill and Central Business District (CBD) properties appeals to companies mandating office presence.

FSP's portfolio strategy-concentrating on infill and Central Business District (CBD) office properties-is directly aligned with the social and corporate demand for centralized, accessible locations that support mandatory RTO policies.

Companies that require employees to be in the office, especially those in financial services and legal sectors, often prefer CBD locations for their prestige, transit access, and proximity to clients. This focus shields FSP somewhat from the struggles of older, suburban office parks.

The table below illustrates the specific, localized nature of FSP's portfolio and how it aligns with the high-growth Sunbelt/Mountain West areas, which continue to see strong absorption in their prime assets.

FSP Portfolio Focus (Q3 2025)	Total Square Footage	Leased Percentage	Social Factor Alignment
Directly-Owned Properties	$\approx$ 4.8 million sq. ft.	68.9%	Concentrated in high-growth Sunbelt/Mountain West metros.
Leasing Activity (9 Mos. 2025)	274,000 sq. ft.	N/A	Shows continued tenant commitment, with 80% being renewals/expansions.
Weighted Average Base Rent	$31.81 per sq. ft.	+6.0% YoY increase	Reflects tenant willingness to pay a premium for quality, in-demand space.

Franklin Street Properties Corp. (FSP) - PESTLE Analysis: Technological factors

Use of real-time energy monitoring software and energy audits to lower operating expenses

You need to know that technology is a direct defense against rising operating costs, especially when energy is the second largest expense category for commercial real estate. Franklin Street Properties Corp. (FSP) actively uses real-time energy monitoring software and benchmarking tools to track and optimize consumption across its portfolio.

This data-driven approach allows the property management team to identify and correct inefficiencies almost instantly, moving beyond simple monthly utility bill reviews. For context, FSP reported total expenses of $106.466 million for the nine months ended September 30, 2025, so even a small percentage drop in the second largest cost can generate millions in savings.

The company also participates in utility demand response programs where available, which provides regular payments in exchange for enacting an emergency energy curtailment plan during grid emergencies. This is smart, low-tech risk management layered onto high-tech monitoring.

Implementation of lighting and HVAC system upgrades to meet tenant demand for efficient buildings

Tenant retention in the 2025 office market hinges on providing modern, efficient, and comfortable space. FSP addresses this directly through targeted capital enhancements to building systems (HVAC, or Heating, Ventilation, and Air Conditioning) and lighting.

A concrete example of this investment is the work done at the 1999 Broadway property in Denver. To boost efficiency and tenant appeal, FSP completed a major lighting upgrade, converting approximately 413,000 square feet-which is 61% of the building's square footage-from fluorescent lighting to modern LED lighting.

They also installed a flat plate heat exchanger, a technology that allows for 'free cooling' by bypassing centrifugal chillers when the outdoor air temperature is optimal. These upgrades are not just about saving money; they are a necessary capital expenditure (capex) to attract and retain tenants in a competitive market, which is why FSP has seen elevated capex spending in 2025.

Green cleaning programs and high-efficiency air filters address tenant concerns for indoor air quality

Post-pandemic, indoor air quality (IAQ) is a non-negotiable for office tenants; it's defintely a key factor in return-to-office strategies. FSP's technological response here is two-fold: implementing green cleaning programs and deploying high-efficiency air filters.

The green cleaning programs use non-toxic, environmentally friendly products, reducing the volatile organic compounds (VOCs) that can degrade air quality. Plus, the use of high-efficiency air filters helps remove airborne particulates, which directly addresses tenant health and wellness concerns.

This focus on IAQ is a critical component of their overall environmental, social, and governance (ESG) strategy, which aims to reduce property expenses and contribute to higher levels of tenant satisfaction.

Technology-driven building efficiency helps FSP meet local energy performance requirements, like in Denver

Technology is the tool FSP uses to navigate the increasingly complex regulatory landscape of building performance standards (BPS). The Energize Denver Ordinance is a prime example, requiring large buildings (over 25,000 square feet) to reduce energy consumption by at least 30% by 2030/2032, with interim targets.

FSP's proactive use of technology has positioned them well ahead of these mandates. Their 1999 Broadway property in Denver, for instance, had an Energy Use Intensity (EUI) score of 46.1 in 2023, which is already significantly better than the Energize Denver target EUI of 53.5. This technological edge minimizes the risk of substantial regulatory fines, which can be as high as $0.35/kBtu over the limit.

The broad success of FSP's efficiency strategy is reflected in its portfolio certifications as of year-end 2024:

• Over 79% of the portfolio's square footage earned the EPA's ENERGY STAR label, placing their energy performance among the top 25% of similar properties nationally.
• Approximately 68% of the portfolio's square footage has been awarded some level of LEED certification, with the majority achieving the coveted LEED Gold standard.

Here's the quick math on the Denver property showing the current performance against the mandate:

Property	Metric	FSP 2023 Performance	Energize Denver Target	Compliance Status (2025)
1999 Broadway, Denver	Energy Use Intensity (EUI)	46.1	53.5	Exceeds Target (Better EUI)
FSP Portfolio	ENERGY STAR Labeled (Year-end 2024)	Over 79% of square footage	Top 25% of similar properties	Industry Leader

Franklin Street Properties Corp. (FSP) - PESTLE Analysis: Legal factors

Critical need to refinance or repay the approximately $249.8 million in debt maturing in April 2026.

The single most pressing legal and financial risk for Franklin Street Properties Corp. is the looming maturity of its entire outstanding indebtedness. As of June 30, 2025, the Company's total debt stood at approximately $249.8 million, all of which is scheduled to mature on April 1, 2026. This isn't a staggered maturity schedule; it's a single, massive refinancing event in a challenging commercial office real estate market. The current weighted average interest rate on this debt is 9.00%, reflecting the higher cost of capital in the current environment.

The legal pressure here centers on avoiding a default, which would trigger immediate legal action and likely force a fire-sale of assets. The Board's ongoing review of strategic alternatives, including active negotiations with a potential lender to refinance all existing indebtedness, is a direct legal and financial action to mitigate this risk. Here's the quick math: missing that April 2026 deadline means the Company loses control of its asset disposition strategy. That's a defintely bad place to be.

Debt Instrument (as of June 30, 2025)	Outstanding Balance (in millions)	Maturity Date	Interest Rate (Approx.)
BofA Term Loan	$55.515	April 1, 2026	9.00% (SOFR + 4.00%)
BMO Term Loan Tranche B	$70.936	April 1, 2026	9.00% (SOFR + 4.00%)
Series A Senior Notes	$71.553	April 1, 2026	9.00%
Series B Senior Notes	$51.814	April 1, 2026	9.00%
Total Indebtedness	$249.818	-	-

Compliance with the complex regulatory structure required to maintain its REIT status.

Maintaining Real Estate Investment Trust (REIT) status is fundamental to Franklin Street Properties Corp.'s business model, allowing it to avoid corporate income tax. Losing this status would be financially devastating, immediately subjecting the Company to corporate-level taxation on its earnings.

The legal compliance is a constant, two-pronged challenge: income and assets. You must continually monitor these tests to ensure compliance on a quarterly and annual basis.

• Distribution Test: Must distribute at least 90% of its annual taxable income to shareholders.
• Asset Test: At least 75% of the value of total assets must be real estate assets, cash, or government securities.
• Income Tests: At least 75% of gross income must come from real estate sources (like rent and mortgage interest), and at least 95% from real estate and passive income sources (like dividends and interest).

The current environment of property dispositions and a net loss of $37.6 million for the nine months ended September 30, 2025, complicates the cash flow analysis for the distribution requirement, even though depreciation often helps.

Ongoing legal and financial due diligence related to the exploration of strategic alternatives.

Since the announcement on May 14, 2025, the Board has been exploring strategic alternatives, which carries significant legal and fiduciary responsibilities. This process involves extensive legal and financial due diligence, whether the outcome is a full company sale, a major asset divestiture, or a comprehensive debt refinancing. The legal team, supported by financial advisor BofA Securities, must manage complex negotiations and ensure all actions maximize shareholder value while adhering to SEC disclosure rules.

The active negotiations with a potential lender for a full debt refinance, announced in November 2025, are the most critical legal transaction currently underway. Any failure in due diligence or misstep in the negotiation could lead to shareholder litigation or a failed transaction, leaving the $249.8 million debt problem unresolved. This legal risk is a major near-term operational drag.

Adherence to local building codes and environmental ordinances, such as the Energize Denver law.

Local environmental, social, and governance (ESG) regulations are becoming a major legal cost driver for commercial office REITs. Franklin Street Properties Corp. holds significant assets in Denver, CO, including properties like Dominion Towers, 1001 17th Street, 1999 Broadway, and Greenwood Plaza. These properties are directly impacted by the Energize Denver Building Performance Policy, which mandates significant energy efficiency improvements.

For buildings 25,000 square feet and larger, the law requires a reduction in energy consumption of at least 30% by 2030, with interim targets set for 2024 and 2027. Failure to meet these performance requirements can result in substantial fines, potentially up to $0.30 per kBtu over the limit. This is a capital expenditure mandate disguised as an environmental law, requiring FSP to budget for major system upgrades like lighting, HVAC, and building automation to avoid future legal penalties. The legal risk here is not just the fine, but the required capital outlay that competes with other uses of cash, like debt repayment.

Franklin Street Properties Corp. (FSP) - PESTLE Analysis: Environmental factors

You are right to focus on the 'E' in PESTLE; for a Real Estate Investment Trust (REIT) like Franklin Street Properties Corp., environmental performance directly maps to operating expenses and asset valuation, especially in a market that increasingly values green building credentials. The core takeaway is that FSP has maintained a strong, certifiable environmental profile, with a clear focus on energy and water efficiency, which translates directly into lower operating costs and risk mitigation for their portfolio.

Over 79% of the portfolio square footage had earned the EPA's ENERGY STAR label as of year-end 2024.

FSP's commitment to energy efficiency is a tangible competitive advantage. As of year-end 2024, over 79% of the total portfolio square footage-including both directly-owned and asset-managed properties-had earned the Environmental Protection Agency's (EPA) ENERGY STAR label. This certification means these buildings are performing in the top 25% nationally for energy efficiency compared to similar properties. This isn't just a marketing point; it's a direct hedge against rising utility costs.

Here's the quick math: energy is generally the second-largest operating cost for office properties, so a top-percentile performance directly boosts the net operating income (NOI) of the underlying assets. The company uses tools like real-time energy monitoring and utility demand response programs to keep this performance high, even benefiting from local utility rebates on upgrades.

Approximately 68% of the portfolio square footage has achieved some level of LEED certification.

Beyond energy efficiency, the portfolio demonstrates a commitment to broader sustainable design and construction through the Leadership in Energy and Environmental Design (LEED) program. As of year-end 2024, approximately 68% of the portfolio square footage had been awarded some level of LEED certification. The majority of these buildings have achieved the high standard of LEED Gold certification.

This level of certification signals to tenants and investors that FSP's assets meet a rigorous, third-party verified standard for sustainability, which improves tenant satisfaction and retention. The focus on LEED also ensures better indoor air quality through green cleaning programs and high-efficiency air filters, which is defintely a key factor for tenants in the post-2020 office market.

Active water consumption management through plumbing and landscaping enhancements, definitely reducing costs.

Water stewardship is a critical operational focus, especially for properties located in water-stressed regions of the Sunbelt. FSP actively manages water consumption through a mix of plumbing and landscaping enhancements. This isn't just about saving a few drops; it's about significant volumetric and cost reduction.

The absolute water consumption figures show a clear downward trend in recent years, demonstrating the effectiveness of these capital enhancements:

Year	Absolute Water Consumption (m³)	Year-over-Year Change (m³)
2022	233,916	-
2023	248,192	+14,276
2024	239,234	-8,958

What this estimate hides is the specific impact of projects like replacing irrigation lines with drip systems and using low water use plantings in landscape renovations, which directly reduce the utility bill. The absolute consumption of 239,234 m³ in 2024 represents a substantial volume of water saved compared to previous years, directly reducing property expenses.

Focus on resilience and managing greenhouse gas emissions to mitigate climate-related risks in the Sunbelt.

Given FSP's strategic focus on the U.S. Sunbelt and Mountain West, managing climate-related risks and ensuring asset resilience is crucial. The Sustainability Committee has explicitly highlighted Resilience and Greenhouse Gas Emissions as recent areas of focus. This forward-looking approach is essential for long-term asset value in regions facing increased extreme weather and water scarcity.

The company tracks its carbon footprint meticulously, with the latest available figures showing a continued reduction in emissions:

• Total Scope 1 (Direct GHG Emissions) for 2024: 1,008 MtCO2e.
• Total Scope 2 (Indirect GHG Emissions from purchased electricity, etc.) for 2024: 29,053 MtCO2e.

This reduction in Scope 2 emissions, in particular, reflects the success of the energy efficiency measures like upgrading lighting to LED and optimizing Building Automation Systems (BAS). The action item here is clear: continue to prioritize capital expenditure on resilience projects, such as flood mitigation or enhanced cooling systems, to protect the Sunbelt portfolio from physical climate risks.