Franklin Street Properties, a real estate investment trust, is reviewing all strategic options for its 4.8 million-square-foot office portfolio amid weak leasing and two-and-a-half years of reported losses.
The review will examine possible actions from a sale of the company to refinancing existing debt, the publicly traded REIT disclosed in its quarterly earnings this week.
“We also continue to pursue select potential property dispositions when we believe that short to intermediate term valuation potential has been reached,” George J. Carter, chairman and CEO of Franklin Street, said in a statement. “Assuming that demand, pricing and liquidity allow us to transact on any potential dispositions, we intend to use the net proceeds primarily for the continued repayment of debt.”
The REIT has been recording losses on recent property sales. The company sold $100 million in properties during 2024 and recorded a $20.9 million loss, according to quarterly reports.
In June, Franklin Street sold the 267,200-square-foot Monument Circle in Indianapolis for $6 million, recording a $12.9 million loss. Monument Circle had been mostly empty for over six years, according to CoStar data.
Slow leasing
Franklin Street’s portfolio, which spans markets in Houston, Dallas, Denver and Minneapolis, has seen its occupancy levels falling for more than four years from nearly 83% to less than 70%.
Approximately 15% of the REIT’s leases are set to expire through next year, the REIT said.
The company is actively marketing existing vacancies to numerous potential tenants, according to the company. While leasing activity continues, Franklin Street noted that geopolitical events, current economic conditions, and the long-term impact of the COVID-19 pandemic could limit or delay new tenant leasing this quarter and potentially in future quarters.
“We remain focused on trying to improve leasing and occupancy across the portfolio,” Carter said. “Despite the modest amount of actual leasing during the first half of 2025, we continue to be encouraged by the current level of prospective leasing activity in our active pipeline. Some of this prospective leasing activity includes larger potential space requirements than we have seen over the past several years.”
About half of the REIT's operating properties are stabilized with a leased occupancy of 75% or more, while the remainder "are value-add in nature with leased occupancy of less than 75%," the company said.
The Wakefield, Massachusetts-based REIT posted a net loss of $29.3 million for the first half of 2025, extending losses from 2023 ($48.1 million) and 2024 ($52.5 million), according to company filings.
Franklin Street did not respond to a request for comment.