George J. Carter, President and CEO, commented as follows:
"For the third quarter of 2012, FSP's profits as represented by FFO totaled approximately $19.9 million or $0.24 per share, an increase of approximately $0.9 million or $0.01 per share compared to the second quarter of 2012. Dividend distributions declared for the third quarter of 2012, which are payable on November 15, 2012, will be approximately $15.8 million or $0.19 per share.
"Our directly-owned real estate portfolio of 37 properties, totaling approximately 7,439,195 square feet, was approximately 89.9% leased as of September 30, 2012, down from approximately 90.0% leased as of June 30, 2012. The drop in percentage of leased space of approximately 0.1% in the third quarter was due solely to the acquisition during the quarter of the 386,603 rentable square foot "value-add" suburban office building in Atlanta, Georgia known as "One Ravinia Drive". The property portfolio excluding One Ravinia Drive increased its occupancy during the quarter. The occupancy at One Ravinia Drive also increased from 82% at the time of acquisition to 84.5% as of the close of the quarter. Our property portfolio is primarily suburban office assets. Most of the rental/leasing markets where our properties are located remained stable during the third quarter, both in terms of occupancy and rental rate levels. Within this environment, we continue to make steady leasing progress and anticipate higher year-end occupancy. Our property portfolio has relatively modest lease expirations over the next two years and, along with our improving occupancy levels, continues to allow overall tenant improvement expenditures and leasing costs to moderate in relation to the level of rental revenues being achieved.
"There were two real estate investments completed in the third quarter of 2012. On July 5, 2012, FSP made a $33 million two-year bridge loan on a suburban office property located in the I-10 energy corridor of Houston, Texas. The property is a 14-story, multi-tenant Class A office building containing approximately 325,796 rentable square feet. The property is owned by FSP Energy Tower I Corp., a single-asset REIT affiliate of FSP, and is approximately 100% leased. The loan is secured by a first mortgage on the property. On July 31, 2012, FSP purchased a Class A suburban office property in Atlanta, Georgia known as "One Ravinia Drive" for $52.8 million. The property is 17 stories, contains approximately 386,603 rentable square feet and was approximately 82% leased at the time of acquisition to numerous tenants. The property is located in the "Central Perimeter" submarket of Atlanta. FSP and its affiliates have been investing in the suburban Atlanta office market since 2003 and currently own three properties there totaling approximately 907,000 square feet. In addition, we expect to close on the acquisition of a Class A suburban office property in Houston, Texas known as "Westchase I & II" for $154.8 million on or about November 1, 2012. The property is a two-building office complex totaling approximately 629,022 rentable square feet located in Houston's Westchase District. Each building is 14 stories, and the entire property is approximately 95% leased to numerous tenants. FSP, its affiliates and predecessor have been investing in suburban Houston since 1993 and, with the addition of this asset, will own six properties totaling approximately 2,144,732 square feet in Houston. Additional potential real estate investment opportunities are actively being explored, and we would anticipate further real estate investments in the coming months.
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