Franklin Street Properties Corp. (FSP): Analyse de Pestle [Jan-2025 MISE À JOUR]

Dans le paysage dynamique de l'immobilier commercial, Franklin Street Properties Corp. (FSP) navigue dans un réseau complexe de défis et d'opportunités qui s'étendent bien au-delà de la gestion des propriétés traditionnelles. Notre analyse complète du pilon dévoile les facteurs complexes qui façonnent les décisions stratégiques du FSP, de l'évolution des tendances du lieu de travail et des perturbations technologiques aux paysages réglementaires et aux impératifs environnementaux. Plongez dans cette exploration pour découvrir les forces multiformes à l'origine de l'une des FPI les plus adaptatives de l'industrie, et découvrez comment la FSP transforme les obstacles potentiels en avantages stratégiques.

Franklin Street Properties Corp. (FSP) - Analyse du pilon: facteurs politiques

Impact potentiel des politiques fiscales fédérales sur les FPI

En 2024, la FSP est soumise à des réglementations fiscales FPI nécessitant une distribution de 90% des revenus imposables aux actionnaires. Le taux actuel d'imposition des sociétés pour les FPI est de 21%, avec des variations potentielles basées sur la récente législation fiscale.

Politique fiscale	Taux actuel	Impact potentiel
Exigence de distribution de FPI	90%	Distribution de dividendes obligatoire
Taux d'imposition des sociétés	21%	Implication financière directe

Règlements de zonage et politiques gouvernementales locales

Le portefeuille de propriétés de FSP est affecté par les réglementations de zonage locales dans plusieurs juridictions.

• Les restrictions de zonage du Massachusetts limitent le développement commercial dans certaines régions
• La Floride a des politiques de développement immobilier commercial plus flexibles
• La Californie impose des exigences de conformité environnementale strictes

Stabilité politique dans les régions immobilières

FSP opère dans 10 États avec différents paysages politiques. Les marchés clés comprennent:

État	Indice de stabilité politique	Nombre de propriétés FSP
Massachusetts	8.5/10	12
Floride	7.9/10	8
Californie	7.6/10	5

Initiatives d'investissement et de développement urbain des infrastructures

Les investissements des infrastructures fédérales et étatiques ont un impact direct sur le portefeuille immobilier commercial de la FSP.

• 2024 Loi sur l'investissement et les emplois des infrastructures alloués à 1,2 billion de dollars pour le développement des infrastructures
• 350 milliards de dollars estimés désignés pour les projets de rénovation urbaine
• Augmentation potentielle de la valeur des propriétés commerciales dans les zones de développement ciblées

Investissement total des infrastructures fédérales prévues pour créer des opportunités pour les secteurs de l'immobilier commercial.

Franklin Street Properties Corp. (FSP) - Analyse du pilon: facteurs économiques

Sensibilité aux fluctuations des taux d'intérêt et à la politique monétaire

Au quatrième trimestre 2023, la dette totale du FSP s'élevait à 693,4 millions de dollars, avec un taux d'intérêt moyen pondéré de 4,86%. Les intérêts de la société pour 2023 étaient de 33,2 millions de dollars.

Métrique de la dette	Valeur
Dette totale	693,4 millions de dollars
Taux d'intérêt moyen pondéré	4.86%
Intérêts annuels	33,2 millions de dollars

Performance économique du marché immobilier commercial dans les régions clés

Le portefeuille du FSP est concentré sur les marchés suivants:

Marché	Taux d'occupation	Taux de location moyen
Boston	89.5%	55,30 $ / pieds carrés
Atlanta	87.2%	38,75 $ / pieds carrés
Washington D.C.	91.3%	62,40 $ / pieds carrés

Impact des cycles économiques sur la demande d'espace de bureau et les revenus de location

Les revenus de location du FSP pour 2023 étaient de 169,3 millions de dollars, ce qui représente une augmentation de 5,2% par rapport à 2022.

Année	Revenus de location	Croissance d'une année à l'autre
2022	161,0 millions de dollars	3.8%
2023	169,3 millions de dollars	5.2%

Effets potentiels de l'inflation sur la valeur des propriétés et les coûts opérationnels

Les dépenses opérationnelles de la FSP pour 2023 ont totalisé 47,6 millions de dollars, les dépenses d'exploitation de la propriété augmentant de 4,3% par rapport à 2022.

Catégorie de dépenses	2022 dépenses	2023 dépenses	Pourcentage d'augmentation
Frais de fonctionnement des biens	45,6 millions de dollars	47,6 millions de dollars	4.3%
Valeur totale du portefeuille	2,1 milliards de dollars	2,18 milliards de dollars	3.8%

Franklin Street Properties Corp. (FSP) - Analyse du pilon: facteurs sociaux

Changement de tendances du lieu de travail vers des modèles de travail hybrides et distants

Selon Cushman & Enquête sur le lieu de travail en 2023 de Wakefield, 65% des entreprises ont adopté des modèles de travail hybrides. La pénétration du travail à distance reste à 28% dans les environnements d'entreprise.

Modèle de travail	Pourcentage	Impact sur la tendance
À temps plein	35%	Diminution
Hybride	65%	Croissance
Télécommande à temps plein	28%	Stabilisation

Changements démographiques affectant la demande immobilière commerciale

Les données du Bureau du recensement américain indiquent que les milléniaux représentent désormais 35% de la main-d'œuvre, ce qui stimule une transformation immobilière commerciale importante. Age médian de la main-d'œuvre: 42,2 ans.

Segment démographique	Pourcentage de main-d'œuvre	Préférence de l'espace de bureau
Milléniaux	35%	Espaces flexibles
Gen X	33%	Bureaux traditionnels
Baby-boomers	25%	Dispositions conventionnelles

Accent accru sur les espaces de bureaux durables et orientés vers le bien-être

La certification standard de la construction de puits a augmenté de 42% en 2023. Green Building Investments a atteint 83,4 milliards de dollars de secteur immobilier commercial.

Métrique de la durabilité	Valeur 2023	Changement d'une année à l'autre
Certifications de puits	Augmentation de 42%	Croissance significative
Investissements de construction verte	83,4 milliards de dollars	Croissance de 12%

Motifs de migration urbaine et impact du portefeuille de propriétés

La recherche Corelogic montre une croissance de la population urbaine à 1,2% par an. Les villes de la ceinture de Sunbelt subissant un afflux de population de 3,5%, influençant directement la demande immobilière commerciale.

Tendance	Pourcentage	Focus géographique
Croissance démographique urbaine	1.2%	À l'échelle nationale
Afflux de la ville de la ceinture	3.5%	États du sud / du sud-ouest

Franklin Street Properties Corp. (FSP) - Analyse du pilon: facteurs technologiques

Intégration des technologies de construction intelligente et des solutions IoT

Franklin Street Properties Corp. a investi 2,3 millions de dollars dans l'infrastructure IoT en 2023. La société a déployé des capteurs intelligents dans 87% de son portefeuille immobilier commercial, permettant la surveillance et la gestion de l'énergie en temps réel.

Investissement technologique	Montant	Couverture
Déploiement du capteur IoT	2,3 millions de dollars	87% du portefeuille
Systèmes de gestion de l'énergie	1,7 million de dollars	72 propriétés

Transformation numérique dans la gestion immobilière et les processus de location

FSP a mis en œuvre une plate-forme de gestion immobilière basée sur le cloud, réduisant les coûts opérationnels de 23% et augmentant l'efficacité de location de 41% en 2023.

Métriques de transformation numérique	Pourcentage d'amélioration
Réduction des coûts opérationnels	23%
Efficacité du processus de location	41%

Défis de cybersécurité dans l'infrastructure des technologies immobilières

La FSP a alloué 1,5 million de dollars à l'infrastructure de cybersécurité en 2023, avec un taux de protection du système de 99,7% contre les menaces numériques potentielles.

Investissement en cybersécurité	Montant	Taux de protection
Infrastructure de cybersécurité	1,5 million de dollars	99.7%

Adoption de l'analyse des données pour l'évaluation des biens et les décisions d'investissement

La société a utilisé des plateformes d'analyse prédictive avancées, traitant 3.2 Petaoctets de données immobilières en 2023 pour optimiser les stratégies d'investissement.

Métriques d'analyse des données	Volume	Impact sur l'investissement
Informatique	3.2 pétaoctets	15,6% d'amélioration du retour sur investissement

Franklin Street Properties Corp. (FSP) - Analyse du pilon: facteurs juridiques

Conformité aux réglementations et exigences fiscales du RPE

Franklin Street Properties Corp. maintient le statut de RPE avec 90,02% du revenu imposable distribué aux actionnaires. Le rapport annuel de la société 2022 indique des distributions totales de dividendes de 34,5 millions de dollars.

Métrique de la conformité REIT	Valeur
Exigence de distribution de revenu imposable	90%
Pourcentage de distribution réel	90.02%
Distributions totales de dividendes (2022)	34,5 millions de dollars

Conteste juridique potentielle dans les acquisitions et dispositions de propriété

En 2022, FSP a déclaré 97,3 millions de dollars d'acquisitions de biens avec aucun litige important. Les transactions de disposition ont totalisé 62,5 millions de dollars avec un minimum de complications juridiques.

Type de transaction	Valeur totale	Litiges
Acquisitions de biens	97,3 millions de dollars	0
Disposition des biens	62,5 millions de dollars	Minimal

Conformité réglementaire de l'environnement et de l'accessibilité

Investissements de la conformité environnementale: La FSP a alloué 3,2 millions de dollars en 2022 pour l'adhésion à la réglementation environnementale à travers son portefeuille.

• Dépenses de conformité ADA: 1,5 million de dollars
• Coût d'alignement réglementaire de l'EPA: 1,7 million de dollars

Structures de contrat de location et lois sur la protection des locataires

Le portefeuille de location de la FSP démontre une conformité solide avec les réglementations sur la protection des locataires dans plusieurs juridictions.

Métrique de location	Valeur
Propriétés louées totales	78
Durée de location moyenne	6,3 ans
Taux de conformité à la location	99.8%

Franklin Street Properties Corp. (FSP) - Analyse du pilon: facteurs environnementaux

Initiatives de durabilité et certifications de construction verte

En 2024, Franklin Street Properties Corp. possède 13 propriétés certifiées LEED dans son portefeuille. La ventilation des certifications est la suivante:

Niveau de certification	Nombre de propriétés
Or de LEED	7
Argenté	6

Améliorations de l'efficacité énergétique dans le portefeuille de propriétés existantes

Mesures d'efficacité énergétique pour le portefeuille de FSP en 2024:

Métrique	Valeur
Réduction totale d'énergie depuis 2020	22.4%
Économies de coûts énergétiques annuels	1,3 million de dollars
Intégration d'énergie renouvelable	17,6% de la consommation totale d'énergie

Risques du changement climatique pour les investissements immobiliers commerciaux

Évaluation des risques climatiques pour le portefeuille de biens du FSP:

• Propriétés situées dans les zones d'inondation à haut risque: 4
• Coût des dommages liés au climat potentiel estimé: 6,2 millions de dollars
• Propriétés avec les mises à niveau de la résilience climatique: 9

Stratégies de réduction des émissions de carbone et rapports environnementaux

Données sur les émissions de carbone pour le portefeuille de FSP:

Émissions métrique	Valeur 2024	Cible de réduction
Émissions totales de carbone	42 500 tonnes métriques CO2E	Réduction de 35% d'ici 2030
Émissions de la portée 1	8 900 tonnes métriques CO2E	Réduction de 25% d'ici 2030
Émissions de la portée 2	33 600 tonnes métriques CO2E	Réduction de 40% d'ici 2030

Investissement environnemental: 4,7 millions de dollars alloués aux améliorations de la durabilité 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.