Good morning, and welcome to the Franklin Street Properties Q1 '13 Results Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Mr. Scott Carter, General Counsel. Mr. Carter, please go ahead.

Hi, and good morning, everyone. Thank you for participating in our Q1 2013 earnings call. With me this morning are George Carter, our Chief Executive Officer; John Demeritt, our Chief Financial Officer; Jeff Carter, our Chief Investment Officer; and Janet Notopoulos, President of FSP Property Management. Before I turn the call over to John Demeritt, I must read the following statement. Please note that various remarks that we may make about future expectations, plans and prospects for the company may constitute forward-looking statements for purposes of the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in the Risk Factors section of our annual report on Form 10-K for the year ended December 31, 2012, which is on file with the SEC. In addition, these forward-looking statements represent the company's expectations only as of today, May 1, 2013. While the company may elect to update these forward-looking statements, it specifically disclaims any obligation to do so. Any forward-looking statements should not be relied upon as representing the company's estimates or views as of any date subsequent to today. At times during this call, we may refer to funds from operation or FFO. A reconciliation of FFO to GAAP net income is contained in yesterday's press release, which is available in the Investor Relations section of our website at www.franklinstreetproperties.com. I'll now turn the call over to John Demeritt. John?

Thank you, Scott. Welcome to our earnings call. We're going to be talking with you about our first quarter results, and I'll start with a short overview. Afterward, George Carter, our CEO, will further discuss the quarter and FSP. I'm going to be brief and will be referring to our earnings release, the supplemental package and the 10-Q that were filed yesterday and contain a lot of detail. We produced solid results in the first quarter of 2013. FFO was $0.25 per share or $0.01 share over the first quarter of 2012. The increase in FFO was primarily from increased property income due to acquisitions we made in the last year and improved occupancy in the portfolio. Our same-store NOI was up 1.1% comparing Q1 2013 to '12, primarily as a result of the leasing we achieved. Turning to our balance sheet and the current financial position. At March 31, 2013, we had cash of $17.3 million and $278.2 million in availability on our credit facility, giving us about $295.5 million in liquidity. As of March 31, 2013, we had a total of $622 million in unsecured debt on our balance sheet, and our total market capitalization was about $1.8 billion. Our debt to total market cap ratio was close to 1/3 of that, actually about 33.9%. We think this reflects the conservative balance sheet that can be used for growth. We only have unsecured debt on our balance sheet, and this debt structure continues to provide an attractive loan to value for our bank group. Our debt service coverage ratio for the first quarter was 5.9: 1, which is the highest among some of the peers that I look at. We are exploring a number of additional financing possibilities with them currently to position us for more growth than we plan to achieve. We believe the balance sheet enhances our flexibility and will support continued growth. This concludes my overview of our financial performance. As I said earlier, the earnings release supplemental information package and 10-Q filing are available in our website and provide more detail of our results. And as always, we're happy to take questions at the end of the call. I'll now turn the call to George to provide further detail on the results and our portfolio as we look ahead. Thank you for listening. George?

Thank you, John. Good morning, everyone, and thank you for taking the time to listen to our first quarter 2013 earnings call. As usual, my remarks today will generally follow my written commentary that was released in last night's earnings press release. After my comments, we will open the call for questions. For those of you who have listened to past earnings calls, you know that John talks usually year-over-year quarterly numbers, and I usually talk sequential. And we plan to continue that this year, so my comments usually are on a sequential quarterly basis. For the first quarter of 2013, FSP's profits, as represented by FFO, totaled approximately $20.6 million or $0.25 per share, which was essentially flat compared to the fourth quarter of 2012. Our directly owned real estate portfolio of 37 properties, totaling 7.8 million square feet, was approximately 94.4% leased as of March 31. That's up from approximately 94% leased at the end of the fourth quarter of 2012. We anticipate organic growth in rental revenue and FFO from our existing portfolio properties in the second half of this year as we begin to realize the benefit of significant new leases signed in recent quarters and as continuing same-store rental increases positively affect profits. We have about 176,000 square feet of recently leased space that will actually commence their leases in rental contribution to FSP during the balance of 2013, the vast majority of that in the second half of the year and at an average GAAP rent of somewhere between approximately $23 and $24 per square foot. Another 44,000 square feet, which we have, again, already leased, will commence -- actually their leases and their rental contribution to FSP in 2014, at about the same average rents as I mentioned before. So we have what…

[Operator Instructions] Our first question is from Rich Anderson with BMO Capital Markets.

So, George, I see you guys are a REIT now. If you know, do you know what I mean by that?

No, Rich. Why don't you explain that? I thought we always were but...

Okay. So in the first paragraph, you're a real estate investment trust, as long as I have known you, you've been an investment firm specializing in real estate. I'm wondering why the change in language there.

Well, I think at the end of the day, it is because we have now let go our Investment Banking business. And that Investment Banking business really I think maybe put you more over on the category of that description. But as you know, we've always been a REIT.

You mentioned CapEx, TI dollars are trending down, rents are trending up. In a kind of uncertain world still from an economic standpoint, what do you think the reasons are that you're seeing a shift more in favor of landlords today?

Well, again, if you look at the broader office markets in general, you might even question whether you're seeing a more favorable shift to landlords. I think in our portfolio and in the markets that we have targeted that, again, have these big macro drivers that seem to sort of overtake all of the other issues, we are seeing that in our portfolio. But -- and in those markets. But there hasn't been much speculative construction as you know. There has been some build to suit. So you have supply very constrained, you've had financing very constrained, and now all of a sudden, you have an energy markets and housing-sensitive markets and sort of global communication, domestic communication, global and domestic transportation hubs, even in some of the Midwest food and agricultural macro drivers, you have various markets tightening up. And you have rental levels, while coming off the bottom here and trending up in those markets, they are not nearly high enough yet to support any sort of speculative supply coming on board. So we're-- generally speaking, I would say that that's why we're tightening up, specifically for us is P 2. We had the banners as we had a lot of lease roll in 2008, '09, and particularly '10. Those were the toughest years to have that lease roll. So a lot of our rents didn't roll down significantly during that period, and so we're at a fairly low base. But again, the trend is solid across our portfolio and in our markets in general. So if that gives you some color to it, I'm glad.

That does. That was very helpful. And regarding the -- what you call embedded growth, you said -- I think you said 176,000 square feet of recently leased space, is that right?

That would be for -- that's approximately the balance of 2013. That'll be -- we anticipate that coming on.

Okay, so not yet leased but to be leased.

No, no, it's leased.

Oh, coming. I understand. It's not occupied.

Those leases have not commenced yet and started to contribute, too. That's -- most of that space, the 176,000 square feet this year and the 40-some-thousand next year, most of that space is in the process of build-out right now in preparation of those tenants lease actually commencing. And once they commence, that rental income then starts to contribute.

Okay. So if you had 1.1% positive on the same- store NOI line this quarter, how do think that could trend? I mean do you have any sense of how much bigger that number could get over the course of the year as you trend out?

No, but again I think -- I can't give you an exact number, but again, I think we're fairly positive that, again, quarter-over-quarter, it can move around. But we think that trend is established in our portfolio. Again, qualified under this scenario that the economy continues its sort of slow-growth mode. I mean, not one's going to be exempt if we have a big setback in the economy. But continuing the way we are, we think that trend is up for us.

Okay. And just one more quick topic here on the acquisitions. Can you talk about cap rates on Atlanta and Denver, and if maybe on the level of occupancy and to what degree these are opportunistic investments?

I'll let Jeff give you some color there. Again, these are properties that are not yet acquired, and so we have to be a little careful here. But I'll let Jeff give you some color.

Hi, Rich. This is Jeff. For both -- relative to both acquisitions, Franklin Street has been acquiring our most recent acquisitions typically in the 6.5 to 7 cap rate range, and you will see both of these assets fall into that line. From an occupancy standpoint, we have -- we don't own the assets, and we are not going to give a lot of detail on rent rolls or leases or anything of that nature, but these assets are both over 98% leased.

Okay. And then finally, George or whoever, can you talk about -- you talked about the deep pipeline of investments going forward. Can you talk about that with a little bit more color on the relationships? Why are you getting these calls from motivated sellers? And is there something specific that you have from a relationship standpoint that puts you in a competitive advantage position to get that phone call?

Rich, this is Jeff again. I think one of the reasons why we've had these advantages that have played out for us over the last several quarters and years relates to our reputation in the marketplace. We have very a proud track record of closing on time and on price and performance. And that performance has led to consistent repeat business with some really fine names in the industry across many of our core markets. And those relationships have been very fruitful and continue to produce strong results for us in looking at opportunities.

We have -- Rich, this is George. The other thing is that we are a purchaser, as John Demeritt has said, that does not have any property secured debt. We don't have a single property with a mortgage on it, don't anticipate one. So we are acquirers from a sellers' point of view, all cash. We do not have the financing contingency up on our acquisitions. So if a seller is in distress or a seller really wants to know they've got liquidity coming, finding a buyer with the kind of reputation Jeff has talked about, that does not have a financing contingency, is a reason for a phone call.

The next question is from Dave Rodgers with Robert Baird. David B. Rodgers - Robert W. Baird & Co. Incorporated, Research Division: George, I wanted to go back to the kind of leasing spreads in the portfolio mark-to-market that you referenced in your comments. And I don't know that you gave a spread number that you have that available. But I guess here's my thought, in the supplement you did give a 10% increase in GAAP rents year-over-year. That's clearly for the total portfolio. Can you give us a sense of how that might be of rent versus just mix as you've leased up the portfolio?

I can't. I don't have those numbers. I mean, certainly, a meaningful amount of it was acquisition work, absolutely. But again, a meaningful amount was same-store sales. We've had -- again, I don't look at all the peers, but looking at a broader office market, our same-store sales growth, which is a part of that effectively, are 5% last year and, again continuing this year, was a meaningful part of it. But also acquisitions were as well. David B. Rodgers - Robert W. Baird & Co. Incorporated, Research Division: And I guess you don't have much rolling this year, most is month to month. But as you look out in the near term, you said most properties, not all, are rolling up or at or below market. Is that true in the very near term as well that we shouldn't really expect to see much volatility in that number or any risk on the downside?

There's always risk on the downside, Dave. I don't care what you're talking about. But the answer to your question is yes, I think our portfolio has a broad statement. Again, there will be specific tenets that will be rolled out. There'll be specific leases that would be rolled up. Broad statement is we are marking to market up, and I think that will be the overwhelming, again, assuming the economy stays in this growth mode, even slow growth mode, that'll be the overwhelming fact. David B. Rodgers - Robert W. Baird & Co. Incorporated, Research Division: Okay. I guess going back to your comments as well regarding stability of the economy and steady growth, the way you termed it in your comments, does that change kind of how you view leverage on the portfolio, and what the target might be? You've historically run very conservatively. Any thoughts about kind of maybe pushing toward the peer group more in time?

I don't think so, Dave. The -- we had been, prior to the financial crisis and recession, we had been a REIT that pretty much was all cash. We didn't really have any significant debt at all. And that put us in good stead obviously for that downturn on 2 fronts. One is the survival front, but the other is the growth front and the acquisition front. And so we started to use our lines of credit and termed out some debt to do some acquiring and have gotten very comfortable right now with this flexible unsecured financing package, which really allow -- when I say flexible, that really does reduce a lot of risk because you don't have any property, any specific property that's tied up with debt. You can liquidate properties without being concerned about debt, if you needed to, wanted to, thought there was an opportunity to. That flexibility to us is important. A lot of the properties that we have purchased are from -- over the last few years, have been from sellers that did not have that flexibility and got hurt because of it. So when you add this sort of 1/3 debt, 2/3 equity model, which is sort of where we are at now, we think that is a good long-term model for FSP, particularly in light of our debt service coverage ratios, which are fairly, again, relative to the leverage office market, are relatively strong, and in relative terms to our flexibility. So I think you'll see us now very comfortable and going forward, very comfortable. 1/3 debt, 2/3 equity, again, that can accordion up a little bit if we're having in acquisitions and then get taken down with equity at the right time during a different period of time. So if you think of FSP that way, unsecured debt 1/3 debt, 2/3 equity, I think that's the long-term view of FSP. David B. Rodgers - Robert W. Baird & Co. Incorporated, Research Division: And I guess maybe to John regarding the debt side of that equation. It looks like you'll be fully drawn or thereabouts on the line or the revolver by midyear when you take down the acquisitions. At least as you run today, you've got the term loan drawn. How do you think about financing that 1/3 of the debt component going forward? Do you think about tapping the unsecured debt market here from a public bond perspective? Should we expect to see you go back to do a term loan or do an expanded accordion on the revolver? Give us a sense of how you're thinking about the debt component of that in the near term.

I think we're looking at a lot of different financing possibilities. You mentioned the $250 million accordion, what we have on the line with our existing bank group. That's certainly something we can talk to them about, and we can also look at potential other term loans or other activities like that as we look ahead. We've already had some discussions with some people in the bank group on that, too. I think with our current debt to total market cap and our debt service coverage ratio that George reiterated, I think we're pretty attracted to the bank group right now, and there's a lot of possibilities for us. David B. Rodgers - Robert W. Baird & Co. Incorporated, Research Division: And I guess the last question. As we think about funding, are you marketing any properties either owned or managed the way you termed it as this point or expect to throughout the course over the next 3 to 6 months?

We certainly are looking at properties both in the wholly owned portfolio and in the asset-managed portfolio for consideration of sale. We do not have any in the market right this moment.

This concludes our question-and-answer session. I would like to turn the conference back over to Mr. George Carter for any closing remarks.

Just thank you all for taking the time again. We appreciate it, and we look forward to talking to you next quarter.