Company Quick10K Filing
Franklin Street Properties
Closing Price ($) Shares Out (MM) Market Cap ($MM)
$0.00 107 $786
10-Q 2019-10-30 Quarter: 2019-09-30
10-Q 2019-07-30 Quarter: 2019-06-30
10-Q 2019-04-30 Quarter: 2019-03-31
10-K 2019-02-12 Annual: 2018-12-31
10-Q 2018-10-30 Quarter: 2018-09-30
10-Q 2018-07-31 Quarter: 2018-06-30
10-Q 2018-05-01 Quarter: 2018-03-31
10-K 2018-02-13 Annual: 2017-12-31
10-Q 2017-10-31 Quarter: 2017-09-30
10-Q 2017-08-01 Quarter: 2017-06-30
10-Q 2017-05-02 Quarter: 2017-03-31
10-K 2017-02-15 Annual: 2016-12-31
10-Q 2016-10-25 Quarter: 2016-09-30
10-Q 2016-07-26 Quarter: 2016-06-30
10-Q 2016-04-26 Quarter: 2016-03-31
10-K 2016-02-16 Annual: 2015-12-31
10-Q 2015-10-27 Quarter: 2015-09-30
10-Q 2015-07-28 Quarter: 2015-06-30
10-Q 2015-04-28 Quarter: 2015-03-31
10-K 2015-02-17 Annual: 2014-12-31
10-Q 2014-10-28 Quarter: 2014-09-30
10-Q 2014-07-29 Quarter: 2014-06-30
10-Q 2014-04-29 Quarter: 2014-03-31
10-K 2014-02-18 Annual: 2013-12-31
10-Q 2013-10-29 Quarter: 2013-09-30
10-Q 2013-07-30 Quarter: 2013-06-30
10-Q 2013-04-30 Quarter: 2013-03-31
10-K 2013-02-19 Annual: 2012-12-31
10-Q 2012-10-30 Quarter: 2012-09-30
10-Q 2012-08-01 Quarter: 2012-06-30
10-Q 2012-05-01 Quarter: 2012-03-31
10-K 2012-02-21 Annual: 2011-12-31
8-K 2019-10-29 Earnings, Exhibits
8-K 2019-07-30 Earnings, Exhibits
8-K 2019-05-09 Amend Bylaw, Shareholder Vote, Exhibits
8-K 2019-04-30 Earnings, Exhibits
8-K 2019-03-07 Enter Agreement, Off-BS Arrangement
8-K 2019-02-20 Enter Agreement, Off-BS Arrangement
8-K 2019-02-12 Earnings, Exhibits
8-K 2018-11-06 Regulation FD
8-K 2018-10-30 Earnings, Exhibits
8-K 2018-09-27 Enter Agreement, Off-BS Arrangement, Other Events, Exhibits
8-K 2018-08-02 Enter Agreement, Off-BS Arrangement, Other Events, Exhibits
8-K 2018-07-31 Earnings, Exhibits
8-K 2018-06-04 Regulation FD
8-K 2018-05-10 Shareholder Vote
8-K 2018-05-01 Earnings, Exhibits
8-K 2018-02-13 Earnings, Exhibits
8-K 2018-02-02 Amend Bylaw, Exhibits
FSP 2019-09-30
Part I - Financial Information
Item 1.Financial Statements
Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3.  Quantitative and Qualitative Disclosures About Market Risk
Item 4.  Controls and Procedures
Part II - Other Information
Item 1.  Legal Proceedings
Item 1A.  Risk Factors
Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds
Item 3.  Defaults Upon Senior Securities
Item 4.  Mine Safety Disclosures
Item 5.  Other Information
Item 6.  Exhibits
EX-31.1 fsp-20190930ex31179e9bf.htm
EX-31.2 fsp-20190930ex3121db515.htm
EX-32.1 fsp-20190930ex321060557.htm
EX-32.2 fsp-20190930ex322e268a2.htm

Franklin Street Properties Earnings 2019-09-30

FSP 10Q Quarterly Report

Balance SheetIncome StatementCash Flow

Comparables ($MM TTM)
Ticker M Cap Assets Liab Rev G Profit Net Inc EBITDA EV G Margin EV/EBITDA ROA
CMCT 917 1,197 197 182 0 343 410 699 0% 1.7 29%
CLDT 890 1,445 648 331 157 26 104 1,443 47% 13.9 2%
FSP 786 1,843 1,043 267 147 11 142 773 55% 5.4 1%
NRE 776 1,272 598 95 31 182 236 946 33% 4.0 14%
CHCT 768 490 211 53 0 4 32 956 0% 29.8 1%
IRET 754 1,348 737 184 0 -2 105 1,426 0% 13.6 -0%
CPLG 705 2,395 1,186 860 0 -245 10 1,679 0% 167.9 -10%
APTS 660 4,981 3,196 324 0 32 291 2,945 0% 10.1 1%
RC 656 3,840 3,093 0 0 81 214 892 4.2 2%
HT 650 2,156 1,242 524 0 3 156 1,301 0% 8.4 0%

30-day 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Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2019.

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from           to           

Commission File Number: 001-32470

Franklin Street Properties Corp.

(Exact name of registrant as specified in its charter)

Maryland

04-3578653

(State or other jurisdiction of incorporation

(I.R.S. Employer Identification No.)

or organization)

401 Edgewater Place, Suite 200

Wakefield, MA 01880

(Address of principal executive offices)(Zip Code)

(781) 557-1300

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class:

    

Trading Symbol

    

Name of each exchange on which registered:

Common Stock, $.0001 par value per share

FSP

NYSE American

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes  No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer

Accelerated Filer

Non-accelerated Filer

Smaller Reporting Company

Emerging Growth Company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  No

The number of shares of common stock outstanding as of October 24, 2019 was 107,231,155.

Table of Contents

Franklin Street Properties Corp.
Form 10-Q

Quarterly Report
September 30, 2019

Table of Contents

    

    

Page

Part I.

Financial Information

Item 1.

Financial Statements

Consolidated Balance Sheets as of September 30, 2019 and December 31, 2018

3

Consolidated Statements of Income for the three and nine months ended September 30, 2019 and 2018

4

Consolidated Statements of Comprehensive Income (loss) for the three and nine months ended September 30, 2019 and 2018

5

Consolidated Statements of Stockholders’ Equity for the nine months ended September 30, 2019 and 2018

6

Consolidated Statements of Cash Flows for the nine months ended September 30, 2019 and 2018

7

Notes to Consolidated Financial Statements

8-21

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

22

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

39

Item 4.

Controls and Procedures

41

Part II.

Other Information

Item 1.

Legal Proceedings

42

Item 1A.

Risk Factors

42

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

42

Item 3.

Defaults Upon Senior Securities

42

Item 4.

Mine Safety Disclosures

42

Item 5.

Other Information

42

Item 6.

Exhibits

43

Signatures

44

Table of Contents

PART I — FINANCIAL INFORMATION

Item 1.Financial Statements

Franklin Street Properties Corp.

Consolidated Balance Sheets

(Unaudited)

September 30,

December 31,

 

(in thousands, except share and par value amounts)

    

2019

    

2018

 

Assets:

Real estate assets:

Land

 

$

191,578

 

$

191,578

Buildings and improvements

 

1,900,131

 

1,857,935

Fixtures and equipment

 

11,099

 

8,839

 

2,102,808

 

2,058,352

Less accumulated depreciation

 

476,298

 

432,579

Real estate assets, net

 

1,626,510

 

1,625,773

Acquired real estate leases, less accumulated amortization of $68,542 and $101,897, respectively

 

45,066

 

59,595

Cash, cash equivalents and restricted cash

 

20,159

 

11,177

Tenant rent receivables

 

4,410

 

3,938

Straight-line rent receivable

 

64,111

 

54,006

Prepaid expenses and other assets

 

8,868

 

10,400

Related party mortgage loan receivables

 

21,265

 

70,660

Other assets: derivative asset

 

2,844

 

14,765

Office computers and furniture, net of accumulated depreciation of $1,355 and $1,512, respectively

 

136

 

197

Deferred leasing commissions, net of accumulated amortization of $27,433 and $24,318, respectively

 

49,781

 

47,591

Total assets

 

$

1,843,150

 

$

1,898,102

Liabilities and Stockholders’ Equity:

Liabilities:

Bank note payable

 

$

 

$

25,000

Term loans payable, less unamortized financing costs of $4,631 and $5,722, respectively

 

765,369

 

764,278

Series A & Series B Senior Notes, less unamortized financing costs of $1,026 and $1,150, respectively

198,974

198,850

Accounts payable and accrued expenses

 

61,657

 

59,183

Accrued compensation

 

3,769

 

3,043

Tenant security deposits

 

9,008

 

6,319

Lease liability

1,976

Other liabilities: derivative liabilities

 

9,934

 

Acquired unfavorable real estate leases, less accumulated amortization of $4,907 and $6,605, respectively

 

2,810

 

3,795

Total liabilities

 

1,053,497

 

1,060,468

Commitments and contingencies

Stockholders’ Equity:

Preferred stock, $.0001 par value, 20,000,000 shares authorized, none issued or outstanding

 

 

Common stock, $.0001 par value, 180,000,000 shares authorized, 107,231,155 and 107,231,155 shares issued and outstanding, respectively

 

11

 

11

Additional paid-in capital

 

1,356,457

 

1,356,457

Accumulated other comprehensive income (loss)

 

(7,090)

 

14,765

Accumulated distributions in excess of accumulated earnings

 

(559,725)

 

(533,599)

Total stockholders’ equity

 

789,653

 

837,634

Total liabilities and stockholders’ equity

 

$

1,843,150

 

$

1,898,102

The accompanying notes are an integral part of these consolidated financial statements.

3

Table of Contents

Franklin Street Properties Corp.

Consolidated Statements of Income

(Unaudited)

For the Three Months Ended September 30,

For the Nine Months Ended September 30,

(in thousands, except per share amounts)

    

2019

    

2018

    

2019

    

2018

    

Revenues:

Rental

$

68,108

$

67,436

$

196,952

$

198,473

Related party revenue:

Management fees and interest income from loans

 

426

 

1,261

 

3,100

 

3,793

Other

 

5

 

8

 

16

 

26

Total revenues

 

68,539

 

68,705

 

200,068

 

202,292

Expenses:

Real estate operating expenses

 

18,041

 

17,946

 

52,883

 

52,051

Real estate taxes and insurance

 

12,505

 

11,651

 

37,408

 

35,120

Depreciation and amortization

 

22,559

 

23,277

 

67,913

 

70,903

General and administrative

 

3,886

 

3,394

 

11,097

 

9,908

Interest

 

9,036

 

9,935

 

27,775

 

29,174

Total expenses

 

66,027

 

66,203

 

197,076

 

197,156

Income before taxes on income and equity in

income of non-consolidated REITs

 

2,512

 

2,502

 

2,992

 

5,136

Tax expense on income

 

113

 

74

 

165

 

231

Equity in income of non-consolidated REITs

 

 

7,180

 

 

6,793

Net income

$

2,399

$

9,608

$

2,827

$

11,698

Weighted average number of shares outstanding, basic and diluted

 

107,231

 

107,231

 

107,231

 

107,231

Net income per share, basic and diluted

$

0.02

$

0.09

$

0.03

$

0.11

The accompanying notes are an integral part of these consolidated financial statements.

4

Table of Contents

Franklin Street Properties Corp.

Consolidated Statements of Comprehensive Income (Loss)

(Unaudited)

For the

For the

Three Months Ended

Nine Months Ended

September 30,

September 30,

(in thousands)

    

2019

    

2018

    

2019

    

2018

 

Net income

$

2,399

$

9,608

$

2,827

$

11,698

Other comprehensive income (loss):

Unrealized gain (loss) on derivative financial instruments

 

(3,603)

 

1,069

 

(21,855)

 

10,099

 

Total other comprehensive income (loss)

 

(3,603)

 

1,069

 

(21,855)

 

10,099

Comprehensive income (loss)

$

(1,204)

$

10,677

$

(19,028)

$

21,797

The accompanying notes are an integral part of these consolidated financial statements.

5

Table of Contents

Franklin Street Properties Corp.

Consolidated Statements of Stockholders’ Equity

(Unaudited)

Accumulated

Distributions

 

Additional

other

in excess of

Total

 

Common Stock

Paid-In

comprehensive

accumulated

Stockholders’

 

(in thousands, except per share amounts)

    

Shares

    

Amount

    

Capital

    

income (loss)

    

earnings

    

Equity

 

 

Balance, December 31, 2017

 

107,231

 

$

11

 

$

1,356,457

 

$

12,166

 

$

(497,342)

 

$

871,292

Comprehensive income

 

 

 

 

6,575

 

1,425

 

8,000

Distributions $0.19 per
share of common stock

 

 

 

 

 

(20,374)

 

(20,374)

Balance, March 31, 2018

 

107,231

$

11

$

1,356,457

$

18,741

$

(516,291)

$

858,918

Comprehensive income

 

 

 

 

2,455

 

665

 

3,120

Distributions $0.09 per
share of common stock

 

 

 

 

 

(9,651)

 

(9,651)

Balance, June 30, 2018

 

107,231

$

11

$

1,356,457

$

21,196

$

(525,277)

$

852,387

Comprehensive income

 

 

 

 

1,069

 

9,608

 

10,677

Distributions $0.09 per

share of common stock

 

 

 

 

 

(9,651)

 

(9,651)

Balance, September 30, 2018

 

107,231

$

11

$

1,356,457

$

22,265

$

(525,320)

$

853,413

Balance, December 31, 2018

 

107,231

$

11

$

1,356,457

$

14,765

$

(533,599)

$

837,634

Comprehensive loss

 

 

 

 

(6,791)

 

(1,205)

 

(7,996)

Distributions $0.09 per
share of common stock

 

 

 

 

 

(9,651)

 

(9,651)

Balance, March 31, 2019

 

107,231

$

11

$

1,356,457

$

7,974

$

(544,455)

$

819,987

Comprehensive income (loss)

 

 

 

 

(11,461)

 

1,633

 

(9,828)

Distributions $0.09 per
share of common stock

 

 

 

 

 

(9,651)

 

(9,651)

Balance, June 30, 2019

 

107,231

$

11

$

1,356,457

$

(3,487)

$

(552,473)

$

800,508

Comprehensive income (loss)

 

 

 

 

(3,603)

 

2,399

 

(1,204)

Distributions $0.09 per

share of common stock

 

 

 

 

 

(9,651)

 

(9,651)

Balance, September 30, 2019

 

107,231

$

11

$

1,356,457

$

(7,090)

$

(559,725)

$

789,653

The accompanying notes are an integral part of these consolidated financial statements.

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Franklin Street Properties Corp.

Consolidated Statements of Cash Flows

(Unaudited)

For the Nine Months Ended September 30,

(in thousands)

    

2019

    

2018

Cash flows from operating activities:

Net income

$

2,827

$

11,698

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization expense

 

70,072

 

73,127

Amortization of above and below market leases

 

(305)

 

(405)

Equity in loss of non-consolidated REITs

 

 

(6,793)

Decrease in allowance for doubtful accounts
and write-off of accounts receivable

 

(69)

 

(25)

Changes in operating assets and liabilities:

Tenant rent receivables

 

(403)

 

(58)

Straight-line rents

 

(6,950)

 

821

Lease acquisition costs

 

(3,155)

 

(683)

Prepaid expenses and other assets

 

1,261

 

(487)

Accounts payable and accrued expenses

 

2,849

 

(2,665)

Accrued compensation

 

726

 

(797)

Tenant security deposits

 

2,689

 

236

Payment of deferred leasing commissions

 

(9,485)

 

(11,051)

Net cash provided by operating activities

 

60,057

 

62,918

Cash flows from investing activities:

Property improvements, fixtures and equipment

(47,905)

(35,901)

Investment in non-consolidated REITs

 

74,931

Distributions in excess of earnings from non-consolidated REITs

 

710

Investment in related party mortgage loan receivable

 

(2,400)

Repayment of related party mortgage loan receivable

 

51,795

795

Proceeds received from liquidating trust

 

1,470

 

Net cash provided by investing activities

 

2,960

 

40,535

Cash flows from financing activities:

Distributions to stockholders

 

(28,953)

 

(39,676)

Borrowings under bank note payable

 

45,000

 

30,000

Repayments of bank note payable

 

(70,000)

 

(91,000)

Deferred financing costs

 

(82)

 

(2,162)

Net cash used in financing activities

 

(54,035)

 

(102,838)

Net increase in cash, cash equivalents and restricted cash

 

8,982

 

615

Cash, cash equivalents and restricted cash, beginning of year

 

11,177

 

9,819

Cash, cash equivalents and restricted cash, end of period

$

20,159

$

10,434

Supplemental disclosure of cash flow information:

Cash paid for:

Interest

$

23,710

$

25,388

Taxes

$

377

$

485

Non-cash investing activities:

Accrued costs for purchases of real estate assets

$

6,903

$

9,465

The accompanying notes are an integral part of these consolidated financial statements.

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Franklin Street Properties Corp.
Notes to Consolidated Financial Statements
(Unaudited)

1.  Organization, Properties, Basis of Presentation, Financial Instruments and Recent Accounting Standards

Organization

Franklin Street Properties Corp. (“FSP Corp.” or the “Company”) holds, directly and indirectly, 100% of the interest in FSP Investments LLC, FSP Property Management LLC, FSP Holdings LLC and FSP Protective TRS Corp. FSP Property Management LLC provides asset management and property management services. The Company also has a non-controlling common stock interest in two corporations organized to operate as real estate investment trusts (“REIT”). Collectively, the two REITs are referred to as the “Sponsored REITs”.

As of September 30, 2019, the Company owned and operated a portfolio of real estate consisting of 32 operating properties, three redevelopment properties and two managed Sponsored REITs and held two promissory notes secured by mortgages on real estate owned by Sponsored REITs, including one mortgage loan and one revolving line of credit. From time-to-time, the Company may acquire real estate or make additional secured loans. The Company may also pursue, on a selective basis, the sale of its properties in order to take advantage of the value creation and demand for its properties, or for geographic or property specific reasons.

Properties

The following table summarizes the Company’s number of operating properties and rentable square feet of real estate. As of September 30, 2019 and September 30, 2018, the Company had three redevelopment properties and one redevelopment property, respectively, which are excluded from the table.

As of September 30,

 

    

2019

    

2018

 

Operating Properties:

Number of properties

 

32

 

34

Rentable square feet

 

9,503,964

 

9,760,699

Basis of Presentation

The unaudited consolidated financial statements of the Company include all of the accounts of the Company and its majority-owned subsidiaries. All significant intercompany balances and transactions have been eliminated. These financial statements should be read in conjunction with the Company’s consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for its fiscal year ended December 31, 2018, as filed with the Securities and Exchange Commission.

The accompanying interim financial statements are unaudited; however, the financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and in conjunction with the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the disclosures required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting solely of normal recurring matters) necessary for a fair presentation of the financial statements for these interim periods have been included. Operating results for the three and nine months ended September 30, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019 or for any other period.

Financial Instruments

As disclosed in Note 4, the Company’s derivatives are recorded at fair value using Level 2 inputs. The Company estimates that the carrying values of cash and cash equivalents, restricted cash, receivables, prepaid expenses, accounts payable and accrued expenses, accrued compensation, and tenant security deposits approximate their fair values based on their short-term

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maturity and the bank note and term loans payable approximate their fair values as they bear interest at variable interest rates or at rates that are at market for similar investments.

Cash, Cash Equivalents and Restricted Cash

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statement of cash flows.

    

September 30,

    

September 30,

 

(in thousands)

2019

2018

 

Cash and cash equivalents

$

20,159

$

10,434

Restricted cash

 

 

Total cash, cash equivalents and restricted cash

$

20,159

$

10,434

Recent Accounting Standards

In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-02, Leases (“ASU 2016-02”); in July 2018, the FASB issued ASU No. 2018-10, Codification Improvements to Topic 842, Leases and ASU No. 2018-11, Leases (Topic 842): Targeted Improvements (“ASU 2018-11”); and in December 2018, the FASB issued ASU No. 2018-20 Leases (Topic 842), Narrow-Scope Improvements for Lessors. ASU 2016-02 requires lessees to establish a lease liability for the obligation to make lease payments and a right-of-use asset for the right to use the underlying asset for the lease term on their balance sheets. Lessees will continue to recognize lease expenses on their income statements in a manner similar to previous accounting. The guidance also eliminates current real estate-specific provisions for all entities. For lessors, the guidance modifies the classification criteria and the accounting for sales-type and direct financing leases. This new standard is effective for annual periods beginning after December 15, 2018, and interim periods thereafter with early adoption permitted. The Company adopted these standards on January 1, 2019 and applied the package of practical expedients that allows an entity to not reassess (i) whether any expired or existing contracts are or contain leases, (ii) lease classification for any expired or existing leases and (iii) initial direct costs for any expired or existing leases. Additionally, the Company’s leases met the criteria in ASU 2018-11 to not separate non-lease components from the related lease component, therefore the accounting for these leases remained largely unchanged from the previous standard. The Company applied the optional transition method in ASU 2018-11, which allows entities to initially apply the new lease standard at the adoption date. The Company recorded a right-of-use asset of $2.1 million and a lease liability of $2.2 million upon adoption of this standard. The presentation and disclosure that is required to be presented under the new lease standard is provided in Note 8.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which requires that entities use a new forward looking “expected loss” model that generally will result in the earlier recognition of allowance for credit losses. The measurement of expected credit losses is based upon historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company’s Sponsored REIT Loan (as defined in Note 2 below) receivables are within the scope of this standard. The Company’s receivables associated with its real estate operating leases are not within the scope of this standard. The Company is currently assessing the potential impact that the adoption of ASU 2016-13 may have on its consolidated financial statements.

In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities (“ASU 2017-12”), which amends and simplifies existing guidance in order to allow companies to more accurately present the economic effects of risk management activities in the financial statements. The amendment also eases the application of hedge accounting in certain situations, including eliminating the requirement to separately measure and report hedge ineffectiveness for cash flow hedges. ASU 2017-12 is effective for fiscal years beginning after December 15, 2018, and earlier adoption is permitted. The Company adopted this new standard in the first quarter of 2019 using the modified retrospective method, which requires the Company to account for ASU 2017-12 as of the date of adoption with any retrospective adjustments applicable to prior periods included as a cumulative-effect adjustment to accumulated other comprehensive loss and retained earnings. No adjustment was necessary to account for the cumulative effect of the change on the opening balance of each affected component of equity in the consolidated balance sheet as of the

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date of adoption because there was no cumulative ineffectiveness that had been recorded on the Company’s existing interest rate swaps as of December 31, 2018, and all trades were highly effective. The amended presentation and disclosure guidance which is required to be presented prospectively under this new standard is provided in Note 4.

In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”). The ASU is intended to improve the effectiveness of fair value measurement disclosures. ASU 2018-13 is effective for all entities for annual periods beginning after December 15, 2019, and interim periods within those fiscal years. This ASU amends existing fair value measurement disclosure requirements by adding, changing, or removing certain disclosures. ASU 2018-13 will be effective for the Company as of January 1, 2020, and earlier adoption is permitted. The Company is currently assessing the potential impact that the adoption of ASU 2018-13 may have on its consolidated financial statements.

In April 2019, the FASB issued ASU No. 2019-04, Codification Improvements to Topics 326, Financial Instruments - Credit Losses, Topic 815 Derivatives and Hedging and Topic 825, Financial Instruments (“ASU 2019-04”). The ASU clarifies areas of guidance related to the recently issued standards on credit losses (Topic 326), derivatives and hedging (Topic 815), and recognition and measurement of financial instruments (Topic 825). The new guidance is effective for fiscal years beginning after December 15, 2019, and early adoption is permitted. The Company is currently assessing the potential impact that the adoption of ASU 2019-04 may have on its consolidated financial statements.

2.  Related Party Transactions and Investments in Non-Consolidated Entities

Investment in Sponsored REITs:

At September 30, 2019 and December 31, 2018, the Company held a common stock interest in two and three Sponsored REITs, respectively. The Company previously held a non-controlling preferred stock investment in two Sponsored REITs, FSP 303 East Wacker Drive Corp. (“East Wacker”) and FSP Grand Boulevard Corp. (“Grand Boulevard”), which were liquidated during the three months ended September 30, 2018.

In December 2007, the Company purchased 965.75 preferred shares or 43.7% of the outstanding preferred shares of one of its Sponsored REITs, East Wacker. On September 24, 2018, the property owned by East Wacker was sold and, thereafter, East Wacker declared and issued a liquidating distribution for its preferred shareholders, from which the Company was entitled to $70 million. On September 27, 2018, the Company received $69 million in an initial cash distribution, and on April 3, 2019, the Company received a $1 million distribution. As a result of the sale, the Company recognized a gain on liquidation of $7.1 million.

In May 2009, the Company purchased 175.5 preferred shares or 27.0% of the outstanding preferred shares of one of its Sponsored REITs, Grand Boulevard. On July 19, 2018, the property owned by Grand Boulevard was sold and, thereafter, Grand Boulevard declared and issued a liquidating distribution for its preferred shareholders, from which the Company was entitled to $6.2 million. On August 17, 2018, the Company received $5.9 million in an initial cash distribution, and on February 2, 2019, the Company received a $0.2 million distribution. As a result of the sale, the Company recognized a loss on liquidation of $0.1 million. As of September 30, 2019, the Company held a beneficial interest in the Grand Boulevard liquidating trust in the amount of $0.1 million, which is included in other assets in the accompanying consolidated balance sheet.

Equity in income of investments in non-consolidated REITs is derived from the Company’s share of income or loss in the operations of those entities and includes gain or loss on liquidation. The Company exercised influence over, but did not control these entities, and investments are accounted for using the equity method.

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Equity in income of investments in non-consolidated REITs:

The following table includes equity in income of investments in non-consolidated REITs:

Nine Months Ended September 30,

 

(in thousands)

    

2019

    

2018

 

 

Equity in income of East Wacker

$

$

7,209

Equity in loss of Grand Boulevard

(107)

Impairment charge

 

 

(309)

Total

$

$

6,793

The Company received distributions of $710,000 from non-consolidated REITs during the nine months ended September 30, 2018.

Management fees and interest income from loans:

Asset management fees range from 1% to 5% of collected rents and the applicable contracts are cancelable with 30 days notice. Asset management fee income from non-consolidated entities amounted to approximately $152,000 and $375,000 for the nine months ended September 30, 2019 and 2018, respectively.

From time to time the Company may make secured loans (“Sponsored REIT Loans”) to Sponsored REITs in the form of mortgage loans or revolving lines of credit to fund construction costs, capital expenditures, leasing costs and for other purposes. The Company reviews Sponsored REIT Loans for impairment each reporting period. A loan is impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts recorded on the balance sheet. The Company applies normal loan review and underwriting procedures (as may be implemented or modified from time to time) in making that judgment. None of the Sponsored REIT Loans have been impaired.

The Company anticipates that each Sponsored REIT Loan will be repaid at maturity or earlier from refinancing, long term financings of the underlying properties, cash flows from the underlying properties or some other capital event. Each Sponsored REIT Loan is secured by a mortgage on the underlying property and has a term of approximately one to three years. The mortgage loan bears interest at a fixed rate and advances under the secured revolving line of credit bear interest at a rate equal to the 30-day LIBOR rate plus an agreed upon amount of basis points and also require a 50 basis point draw fee.

The following is a summary of the Sponsored REIT Loans outstanding as of September 30, 2019:

    

    

    

    

    

Maximum

    

Amount

    

    

    

    

    

Interest

 

(dollars in thousands, except footnotes)

    

Maturity

Amount

Drawn at

Interest

Draw

Rate at

 

Sponsored REIT

    

Location

Date

of Loan

30-Sep-19

Rate (1)

Fee (2)

30-Sep-19

 

 

Secured revolving line of credit

FSP Satellite Place Corp.

 

Duluth, GA

 

31-Dec-19

$

5,500

$

265

 

L+

4.4

%  

0.5

%  

6.48

%

Mortgage loan secured by property

FSP Monument Circle LLC (3)

Indianapolis, IN

6-Dec-20

21,000

21,000

7.19

%  

n/a

7.19

%

$

26,500

$

21,265

(1)The interest rate is 30-day LIBOR rate plus the additional rate indicated, otherwise a fixed rate.
(2)The draw fee is a percentage of each new advance, and is paid at the time of each new draw.
(3)This mortgage loan includes an origination fee of $164,000 and an exit fee of $38,000 when repaid by the borrower.

The Company recognized interest income and fees from the Sponsored REIT Loans of approximately $2,948,000 and $3,418,000 for the nine months ended September 30, 2019 and 2018, respectively.

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Non-consolidated REITs:

The balance sheet data below for 2019 and 2018 includes the two Sponsored REITs the Company held an interest in as of September 30, 2019 and three Sponsored REITs the Company held an interest in as of December 31, 2018. The operating data below for 2019 and 2018 include the operations of the three and six Sponsored REITs in which the Company held an interest in during the nine months ended September 30, 2019 and 2018, respectively.

Summarized financial information for these Sponsored REITs is as follows:

    

September 30,

    

December 31,

 

(in thousands)

2019

2018

 

 

Balance Sheet Data (unaudited):

Real estate, net

$

44,440

$

97,034

Other assets

 

9,709

 

18,532

Total liabilities

 

(22,954)

 

(75,382)

Shareholders’ equity

$

31,195

$

40,184

For the Nine Months Ended

 

September 30,

 

(in thousands)

    

2019

    

2018

 

 

Operating Data (unaudited):

Rental revenues

$

7,819

$

35,714

Other revenues

 

 

1

Operating and maintenance expenses

 

(4,276)

 

(18,479)

Depreciation and amortization

 

(2,971)

 

(11,451)

Interest expense

 

(2,939)

 

(5,692)

Gain (loss) on sale

 

26,195

 

17,095

Net income (loss)

$

23,828

$

17,188

3.  Bank Note Payable and Term Note Payable

JPM Term Loan

On August 2, 2018, the Company entered into an Amended and Restated Credit Agreement with JPMorgan Chase Bank, N.A., as administrative agent and lender (“JPMorgan”), and the other lending institutions party thereto (the “JPM Credit Agreement”), which provides a single unsecured bridge loan in the aggregate principal amount of $150 million (the “JPM Term Loan”) that remains fully advanced and outstanding. The JPM Term Loan matures on November 30, 2021. The JPM Term Loan was previously evidenced by a Credit Agreement, dated November 30, 2016, among the Company, JPMorgan, as administrative agent and lender, and the other lending institutions party thereto, as amended by a First Amendment, dated October 18, 2017.

The JPM Term Loan bears interest at either (i) a number of basis points over a LIBOR-based rate depending on the Company’s credit rating (125.0 basis points over the LIBOR-based rate at September 30, 2019) or (ii) a number of basis points over the base rate depending on the Company’s credit rating (25.0 basis points over the base rate at September 30, 2019).

Although the interest rate on the JPM Term Loan is variable under the JPM Credit Agreement, the Company fixed the LIBOR-based rate on a portion of the JPM Term Loan by entering into interest rate swap transactions. On March 7, 2019, the Company entered into ISDA Master Agreements with various financial institutions to hedge a $100 million portion of the future LIBOR-based rate risk under the JPM Credit Agreement. Effective March 29, 2019, the Company fixed the LIBOR-based rate at 2.44% per annum on a $100 million portion of the JPM Term Loan until November 30, 2021. Accordingly,

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based upon the Company’s credit rating, as of September 30, 2019, the effective interest rate on a $100 million portion of the JPM Term Loan was 3.69% per annum.

Based upon the Company’s credit rating, as of September 30, 2019, the effective interest rate on the unhedged $50 million portion of the JPM Term Loan was 3.31% per annum. The weighted average interest rate on the unhedged $50 million portion of the JPM Term Loan during the nine months ended September 30, 2019 was approximately 3.68% per annum. The weighted average interest rate on the JPM Term Loan during the year ended December 31, 2018 was approximately 3.33% per annum.

The JPM Credit Agreement contains customary affirmative and negative covenants for credit facilities of this type, including limitations with respect to indebtedness, liens, investments, mergers and acquisitions, disposition of assets, changes in business, certain restricted payments, the requirement to have subsidiaries provide a guaranty in the event that they incur recourse indebtedness and transactions with affiliates. The JPM Credit Agreement also contains financial covenants that require the Company to maintain a minimum tangible net worth, a minimum fixed charge coverage ratio, a maximum secured leverage ratio, a maximum leverage ratio, a maximum unencumbered leverage ratio, and minimum unsecured interest coverage. The JPM Credit Agreement provides for customary events of default with corresponding grace periods, including failure to pay any principal or interest when due, certain cross defaults and a change in control of the Company (as defined in the JPM Credit Agreement). In the event of a default by the Company, the administrative agent may, and at the request of the requisite number of lenders shall, declare all obligations under the JPM Credit Agreement immediately due and payable, and enforce any and all rights of the lenders or administrative agent under the JPM Credit Agreement and related documents. For certain events of default related to bankruptcy, insolvency, and receivership, all outstanding obligations of the Company will become immediately due and payable. The Company was in compliance with the JPM Term Loan financial covenants as of September 30, 2019.

BMO Term Loan

On September 27, 2018, the Company entered into a Second Amended and Restated Credit Agreement with the lending institutions party thereto and Bank of Montreal (“BMO”), as administrative agent (the “BMO Credit Agreement”). The BMO Credit Agreement provides for a single, unsecured term loan borrowing in the amount of $220 million (the “BMO Term Loan”) that remains fully advanced and outstanding. The BMO Term Loan consists of a $55 million tranche A term loan and a $165 million tranche B term loan. The tranche A term loan matures on November 30, 2021 and the tranche B term loan matures on January 31, 2024. The BMO Credit Agreement also includes an accordion feature that allows up to $100 million of additional loans, subject to receipt of lender commitments and satisfaction of certain customary conditions. The BMO Term Loan was previously evidenced by an Amended and Restated Credit Agreement, dated October 29, 2014, among the Company, BMO, as administrative agent and lender, and the other lending institutions party thereto, as amended by a First Amendment, dated July 21, 2016, and a Second Amendment, dated October 18, 2017.

The BMO Term Loan bears interest at either (i) a number of basis points over LIBOR depending on the Company’s credit rating (125 basis points over LIBOR at September 30, 2019) or (ii) a number of basis points over the base rate depending on the Company’s credit rating (25 basis points over the base rate at September 30, 2019).

Although the interest rate on the BMO Term Loan is variable under the BMO Credit Agreement, the Company fixed the base LIBOR interest rate by entering into interest rate swap transactions. On August 26, 2013, the Company entered into an ISDA Master Agreement with Bank of Montreal that fixed the base LIBOR interest rate on the BMO Term Loan at 2.32% per annum until August 26, 2020. On February 20, 2019, the Company entered into ISDA Master Agreements with a group of banks that fixed the base LIBOR interest rate on the BMO Term Loan at 2.39% per annum for the period beginning on August 26, 2020 and ending January 31, 2024. Accordingly, based upon the Company’s credit rating, as of September 30, 2019, the effective interest rate on the BMO Term Loan was 3.57% per annum.

The BMO Credit Agreement contains customary affirmative and negative covenants for credit facilities of this type, including limitations with respect to indebtedness, liens, investments, mergers and acquisitions, disposition of assets, changes in business, certain restricted payments, the requirement to have subsidiaries provide a guaranty in the event that they incur recourse indebtedness and transactions with affiliates. The BMO Credit Agreement also contains financial covenants that require the Company to maintain a minimum tangible net worth, a maximum leverage ratio, a maximum secured leverage

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ratio, a minimum fixed charge coverage ratio, a maximum unencumbered leverage ratio, and minimum unsecured interest coverage. The BMO Credit Agreement provides for customary events of default with corresponding grace periods, including failure to pay any principal or interest when due, certain cross defaults and a change in control of the Company (as defined in the BMO Credit Agreement). In the event of a default by the Company, the administrative agent may, and at the request of the requisite number of lenders shall, declare all obligations under the BMO Credit Agreement immediately due and payable, terminate the lenders’ commitments to make loans under the BMO Credit Agreement, and enforce any and all rights of the lenders or the administrative agent under the BMO Credit Agreement and related documents. For certain events of default related to bankruptcy, insolvency, and receivership, the commitments of lenders will be automatically terminated and all outstanding obligations of the Company will become immediately due and payable. The Company was in compliance with the BMO Term Loan financial covenants as of September 30, 2019.

The Company may use the proceeds of the loans under the BMO Credit Agreement to finance the acquisition of real properties and for other permitted investments; to finance investments associated with Sponsored REITs to refinance or retire indebtedness and for working capital and other general business purposes, in each case to the extent permitted under the BMO Credit Agreement.

BAML Credit Facility

On July 21, 2016, the Company entered into a First Amendment (the “BAML First Amendment”), and on October 18, 2017, the Company entered into a Second Amendment (the “BAML Second Amendment”), to the Second Amended and Restated Credit Agreement dated October 29, 2014 among the Company, the lending institutions party thereto and Bank of America, N.A., as administrative agent, L/C Issuer and Swing Line Lender (as amended by the BAML First Amendment and the BAML Second Amendment, the “BAML Credit Facility”) that continued an existing unsecured revolving line of credit (the “BAML Revolver”) and an existing term loan (the “BAML Term Loan”).

BAML Revolver Highlights

The BAML Revolver is for borrowings, at the Company's election, of up to $600 million. Borrowings made pursuant to the BAML Revolver may be revolving loans, swing line loans or letters of credit, the combined sum of which may not exceed $600 million outstanding at any time.
Borrowings made pursuant to the BAML Revolver may be borrowed, repaid and reborrowed from time to time until the maturity date of January 12, 2022. The Company has the right to extend the maturity date of the BAML Revolver by two additional 6 month periods, or until January 12, 2023, upon payment of a fee and satisfaction of certain customary conditions.
The BAML Credit Facility includes an accordion feature that allows for an aggregate amount of up to $500 million of additional borrowing capacity applicable to the BAML Revolver and/or the BAML Term Loan, subject to receipt of lender commitments and satisfaction of certain customary conditions.

As of September 30, 2019, there were no borrowings outstanding under the BAML Revolver. The BAML Revolver bears interest at either (i) a margin over LIBOR depending on the Company’s credit rating (1.20% over LIBOR at September 30, 2019) or (ii) a margin over the base rate depending on the Company’s credit rating (0.20% over the base rate at September 30, 2019). The BAML Credit Facility also obligates the Company to pay an annual facility fee in an amount that is also based on the Company’s credit rating. The facility fee is assessed against the total amount of the BAML Revolver, or $600 million (0.25% at September 30, 2019).

Based upon the Company’s credit rating, as of September 30, 2019, the interest rate on the BAML Revolver was 3.22% per annum. The weighted average interest rate on all amounts outstanding on the BAML Revolver during the nine months ended September 30, 2019 was approximately 3.67% per annum. As of December 31, 2018, there were borrowings of $25 million outstanding under the BAML Revolver at an interest rate of 3.63% per annum. The weighted average interest rate on all amounts outstanding on the BAML Revolver during the year ended December 31, 2018 was approximately 3.09% per annum.

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BAML Term Loan Highlights

The BAML Term Loan is for $400 million.
The BAML Term Loan matures on January 12, 2023.
The BAML Credit Facility includes an accordion feature that allows for an aggregate amount of up to $500 million of additional borrowing capacity to the BAML Revolver and/or the BAML Term Loan, subject to receipt of lender commitments and satisfaction of certain customary conditions.
On September 27, 2012, the Company drew down the entire $400 million under the BAML Term Loan and such amount remains fully advanced and outstanding under the BAML Term Loan.

The BAML Term Loan bears interest at either (i) a margin over LIBOR depending on the Company’s credit rating (1.35% over LIBOR at September 30, 2019) or (ii) a margin over the base rate depending on the Company’s credit rating (0.35% over the base rate at September 30, 2019).

Although the interest rate on the BAML Credit Facility is variable, the Company fixed the base LIBOR interest rate on the BAML Term Loan by entering into an interest rate swap agreement. On July 22, 2016, the Company entered into ISDA Master Agreements with a group of banks that fixed the base LIBOR interest rate on the BAML Term Loan at 1.12% per annum for the period beginning on September 27, 2017 and ending on September 27, 2021. Accordingly, based upon the Company’s credit rating, as of September 30, 2019, the effective interest rate on the BAML Term Loan was 2.47% per annum.

BAML Credit Facility General Information

The BAML Credit Facility contains customary affirmative and negative covenants for credit facilities of this type, including limitations with respect to indebtedness, liens, investments, mergers and acquisitions, disposition of assets, changes in business, certain restricted payments, the requirement to have subsidiaries provide a guaranty in the event that they incur recourse indebtedness and transactions with affiliates. The BAML Credit Facility also contains financial covenants that require the Company to maintain a minimum tangible net worth, a maximum leverage ratio, a maximum secured leverage ratio, a minimum fixed charge coverage ratio, a maximum unencumbered leverage ratio, and minimum unsecured interest coverage. The BAML Credit Facility provides for customary events of default with corresponding grace periods, including failure to pay any principal or interest when due, certain cross defaults and a change in control of the Company (as defined in the BAML Credit Facility). In the event of a default by the Company, the administrative agent may, and at the request of the requisite number of lenders shall, declare all obligations under the BAML Credit Facility immediately due and payable, terminate the lenders’ commitments to make loans under the BAML Credit Facility, and enforce any and all rights of the lenders or administrative agent under the BAML Credit Facility and related documents. For certain events of default related to bankruptcy, insolvency, and receivership, the commitments of lenders will be automatically terminated and all outstanding obligations of the Company will become immediately due and payable. The Company was in compliance with the BAML Credit Facility financial covenants as of September 30, 2019.

The Company may use the proceeds of the loans under the BAML Credit Facility to finance the acquisition of real properties and for other permitted investments; to finance investments associated with Sponsored REITs to refinance or retire indebtedness and for working capital and other general business purposes, in each case to the extent permitted under the BAML Credit Facility.

Senior Notes

On October 24, 2017, the Company entered into a note purchase agreement (the “Note Purchase Agreement”) with the various purchasers named therein (the “Purchasers”) in connection with a private placement of senior unsecured notes. Under the Note Purchase Agreement, the Company agreed to sell to the Purchasers an aggregate principal amount of $200 million of senior unsecured notes consisting of (i) 3.99% Series A Senior Notes due December 20, 2024 in an aggregate principal amount of $116 million (the “Series A Notes”) and (ii) 4.26% Series B Senior Notes due December 20, 2027 in an aggregate principal amount of $84 million (the “Series B Notes”) and, together with the Series A Notes, the (“Senior Notes”). On

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December 20, 2017, the Senior Notes were funded and proceeds were used to reduce the outstanding balance of the BAML Revolver.

The Note Purchase Agreement contains customary financial covenants, including a maximum leverage ratio, a maximum secured leverage ratio, a minimum fixed charge coverage ratio, and a maximum unencumbered leverage ratio. The Note Purchase Agreement also contains restrictive covenants that, among other things, restrict the ability of the Company and its subsidiaries to enter into transactions with affiliates, merge, consolidate, create liens, make certain restricted payments, enter into certain agreements or prepay certain indebtedness. Such financial and restrictive covenants are substantially similar to the corresponding covenants contained in the BAML Credit Facility, the BMO Credit Agreement and the JPM Credit Agreement. The Senior Notes financial covenants require, among other things, the maintenance of a fixed charge coverage ratio of at least 1.50; a maximum leverage ratio and an unsecured leverage ratio of no more than 60% (65% if there were a significant acquisition for a short period of time). In addition, the Note Purchase Agreement provides that the Note Purchase Agreement will automatically incorporate additional financial and other specified covenants (such as limitations on investments and distributions) that are effective from time to time under the existing credit agreements, other material indebtedness or certain other private placements of debt of the Company and its subsidiaries. The Note Purchase Agreement contains customary events of default, including payment defaults, cross defaults with certain other indebtedness, breaches of covenants and bankruptcy events. In the case of an event of default, the Purchasers may, among other remedies, accelerate the payment of all obligations. The Company was in compliance with the Senior Notes financial covenants as of September 30, 2019.

4.  Financial Instruments: Derivatives and Hedging

On July 22, 2016, the Company fixed the interest rate for the period beginning on September 27, 2017 and ending on September 27, 2021 on the BAML Term Loan (the “2017 Interest Rate Swap”). On August 26, 2013, the Company fixed the interest rate until August 26, 2020 on the BMO Term Loan (the “2013 BMO Interest Rate Swap”). On March 7, 2019, the Company fixed the interest rate for the period beginning on March 29, 2019 and ending on November 30, 2021 on a $100 million portion of the JPM Term Loan (the “2019 JPM Interest Rate Swap”). On February 20, 2019, the Company fixed the interest rate for the period beginning August 26, 2020 and ending January 31, 2024 on the BMO Term Loan (the “2019 BMO Interest Rate Swap”). The variable rates that were fixed under the 2017 Interest Rate Swap, the 2013 BMO Interest Rate Swap, the 2019 JPM Interest Rate Swap and the 2019 BMO Interest Rate Swap (collectively referred to as the “Interest Rate Swaps”) are described in Note 3.

The Interest Rate Swaps qualify as cash flow hedges and have been recognized on the consolidated balance sheets at fair value. If a derivative qualifies as a hedge, depending on the nature of the hedge, changes in the fair value of the derivative will either be offset against the change in fair value of the hedged asset, liability, or firm commitment through earnings, or recognized in other comprehensive income until the hedged item is recognized in earnings. The ineffective portion of a derivative’s change in fair value will be recognized in earnings in the same period in which the hedged interest payments affect earnings, which may increase or decrease reported net income and stockholders’ equity prospectively, depending on future levels of interest rates and other variables affecting the fair values of derivative instruments and hedged items, but will have no effect on cash flows.

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The following table summarizes the notional and fair value of our derivative financial instruments at September 30, 2019. The notional value is an indication of the extent of our involvement in these instruments at that time, but does not represent exposure to credit, interest rate or market risks.

    

Notional

    

Strike

  

Effective

    

Expiration

    

Fair

 

(in thousands)

Value

Rate

Date

Date

Value

 

 

2017 Interest Rate Swap

$

400,000

 

1.12

%  

Sep-17

 

Sep-21

$

2,844

2013 BMO Interest Rate Swap

$

220,000

 

2.32

%  

Aug-13

 

Aug-20

$

(1,291)

2019 JPM Interest Rate Swap

$

100,000

 

2.44

%  

Mar-19

 

Nov-21

$

(2,032)

2019 BMO Interest Rate Swap (1)

$

220,000

 

2.39

%  

Aug-20

 

Jan-24

$

(6,611)

(1) The Notional Value will decrease to $165 million on November 30, 2021.