Good morning, and welcome to the Franklin Street Properties Corp 3Q '13 Third Quarter Results Conference Call. [Operator Instructions] Please note that this event is being recorded. Now, I would like to turn the conference over to Scott Carter, General Counsel. Mr. Carter, please go ahead.

Good morning, everyone and thank you for joining us this morning. With me 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, 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, October 30, 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 operations 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. Now, I'll turn the call over to John. John?

Thanks, Scott. Good morning, everyone. Welcome to our Third Quarter Earnings Call. And I'll start with the quarter's results and then I'll go over the balance sheet and liquidity. Afterwards, George Carter, our CEO will provide his thoughts on the quarter and our results in more detail. As a reminder, our brief remarks today will refer to our earnings release, our supplemental package and 10-Q, all of which were filed yesterday and can be found on our website. For the third quarter, 2013, we continued to generate strong results, benefiting from the growth in our portfolio, as well as the strengthening of our balance sheet. For the quarter, our FFO is $0.27 per share, which is an increase of $0.03 compared to the third quarter of 2012. This increase was driven by higher property income due to 5 acquisitions completed since July 2012 and improved portfolio occupancy, and partially offset by lower interest income as a result of secured loan repayments and increased G&A costs. Additionally, our per-share growth of 12.5% year-over-year, includes the impact of our equity offering completed in May. Regarding our balance sheet and current financial position, at the end of August, we closed on a term loan with our banking group to lock in an attractive -- to lock in attractive long-term interest rates. The $220 million unsecured loan has a term of 7 years, and provides us with significant flexibility. We fixed that rate at about 4%. At quarter end, we had about $952 million worth of debt on our balance sheet and a total market cap of about $2.2 billion. We had cash on hand of $26 million and $168 million available on our $500 million unsecured credit facility, providing us with total liquidity of approximately $194 million. Our debt-to-total market cap ratio was 42.7%, as of the end of September, and our debt service coverage ratio was about 6:1 for the third quarter. At this point, about 65% of our debt is at a fixed rate, and all of our debt is unsecured. As a reminder, all this information, including our supplemental, is available on our website, and we're happy to answer your questions after George's remarks on the portfolio and results. Thanks for listening to me. George?

Thank you, John, and good morning, everyone. And thank you for taking the time to listen to Franklin Street Properties third quarter 2013 earnings call. As usual, my remarks today will generally follow my written commentary in yesterday's earnings press release. After my comments, we will open the call for questions. For the third quarter of 2013, FSP's profits, as represented by FFO, rose approximately $5 million to $27.1 million or $0.27 per share, compared to $22.1 million or $0.24 per share in the second quarter of 2013. Relative to funds from operations, FFO, this third quarter of 2013 is the first quarter of the year that reflects the integration of a majority of our additional capital inflows during the year, with our 3 additional office property acquisitions for the year. That would be: 1999 Broadway, located in Denver, we acquired in May; 999 Peachtree, located in Atlanta, we acquired in July; and most recently, 1001 17th Street in Denver, acquired on August 28. Our directly-owned real estate portfolio of 40 properties, totaling about 9.8 million square feet, was approximately 93.8% leased as of September 30, a decrease from 94.4% as of June 30. The drop in leased percentage for the third quarter was primarily attributable to the acquisition of 1001 17th Street in Denver, a 655,000 square foot office building that was 88.5% leased at the time of its acquisition. We believe this property offers a great opportunity to increase occupancy and rental income stream within a very vibrant and growing Denver CBD office market, creating incremental value for the company. Our portfolio has a relatively modest lease expiration schedule for the balance of 2013 and 2014, and we continue to proactively address future years' scheduled expirations where it is financially advantageous to do early lease renewals. Growth in…

[Operator Instructions] And the first question comes from Dave Rogers with Robert W. Baird. David B. Rodgers - Robert W. Baird & Co. Incorporated, Research Division: Yes, George or Janet, maybe you can kind of talk to some of that growth that you just mentioned George? I think you've got a lease percentage that's about 200 basis points above the occupied percentage. Maybe run us through kind of when that occupancy starts to take shape for you and impact your financials?

Yes, I'll let Janet do that.

Unlike other quarters, I think we've got that leased versus occupied spread shrinking. And most -- we expect that most of that spread is actually going to close up very quickly in the future 2 quarters. David B. Rodgers - Robert W. Baird & Co. Incorporated, Research Division: Okay, great. And then on, I guess, leasing economics this quarter. And I realize, there's not much left to lease in the portfolio as the occupancy and lease percentage is relatively high compared to your competitors. But leasing economics per our calculation did come under a bit more pressure this quarter. Is that something to do with kind of leasing up maybe more stubborn vacancy, different kinds of spaces, or anything in the presentation there that we should be aware of kind that kind of drove those TIs and free rent higher?

Well, I think when we first started showing these numbers, we talked a little bit about how they were going to be a little bit hazy because of the GAAP accounting and the different kinds of portfolios that we have. So the biggest change, really, this quarter is doing some larger leases, which obviously have more free rent, have higher economic costs than the previous quarter where we're doing small renewals. So that's probably the biggest change. Hence, we're going to see -- you're going to see that from time to time. The other pieces that we still are reporting, gross leases, net leases and true triple net leases, so even the GAAP numbers don't always tie from 1 quarter to the other. You may have 1 type of lease expiring or renewing in 1 quarter and a different kind in the other. But the major driver of the change this quarter is that we did some larger leases compared to the other quarters. David B. Rodgers - Robert W. Baird & Co. Incorporated, Research Division: Okay. I guess with respect to '14, can you talk about where any of the unknowns are. You get a little over 500,000 square feet, I think between now and the end of '14 expiring, including the month-to-month. Anything that you're just unsure about there that you just can't handicap that we should be aware of?

I don’t think I can handicap any. But I can tell you that just looking at our biggest expiration, tenants expiring in 2014, they are, for the most part, clustered in the markets that we are really bullish about. So Denver, Houston, and a touch of Dallas. But really, a lot in those 2 markets that we've been seeing the increases in rents and that we think are going to continue. So while, I can’t handicap what's going to happen with those leases, I think, we're in good markets for reaching the point of being able to decide that delicate balance between taking the opportunity and keeping a tenant in place. David B. Rodgers - Robert W. Baird & Co. Incorporated, Research Division: Great. Last question from me, either for John or for George. Leverage pushing higher with the recent acquisitions of the high-quality assets you bought, both Denver and Atlanta. Can you talk about -- its been about 1 year since you sold the building, and I think you've only sold a couple over the last 2 or 3 years. Would you look to recycle more assets here? Clearly, leverage still is cheap, but how do you think of financing these acquisitions and the external growth you've talked about, George?

Yes, Dave. So we've been a little quiet on dispositions for a while. I would anticipate dispositions probably -- again, everything being equal, markets being equal -- picking up in the coming quarters. We have a number of smaller properties that are not fitting with our, sort of new, bigger infill core market acquisition strategies. These properties have been with us for a while. Most of these properties have now stabilized to a point where pricing makes some sense. We just closed yesterday on, you look at a property in the portfolio called East Renner. We just closed on that property yesterday, sold that. It was in North Dallas. So there are, for example, some properties in a market we like, but it's not a core property. It's not one that's sort of fits the new strategy. Pricing was great on it. And we have a number of those around the country. So that's definitely a process of recycling that will bring debt down, capital in for acquisition work. And of course, depending upon markets and specific opportunities, the broader capital markets, we will consider again next year as well, as we did in this year.

The next question comes from Rich Anderson with BMO Capital Markets.

So George, you mentioned the real opportunity right now is to buy and buy as much as you can, prudently, of course. But when does the flip -- the switch flip do you think? I mean based on what you've seen in history, when do you get to the point where the real opportunity becomes the internal growth? Do you think that's a -- do think you have a 2 or 3 year window left in front you to be the buyer? Or is it shorter or longer than that?

That -- boy, that's a great -- I'd like to have that -- those glasses. Your great economist, Brian Belski, is somebody that we actually agree with a lot at BMO. And what Brian says is this up cycle, he agrees that this is probably a long up cycle, has got 3 traditional phases in it: one, is the phase that we're in now is sort of the uncertainty phase or the denial phase; and then you have this phase where everybody agrees that we are, in effect, a good uptrend; and then you have usually the euphoric phase, where underwriting and lending gets a little nuts at the end. And I don't know time frames here, but I do believe that when you start to see in Office, particularly, significant speculative construction coming onboard, and when you start to see employment hit that point where employment is starting to actually push the inflation gauge a bit, those are 2 great signals. We're not seeing those signals yet. Not on speculative construction, certainly not on employment. But that would be the tipoff for us that we are starting to hit sort of the mid part or the meaty part of the up cycle, and then you start to probably acquire less, or more strategically acquire, or more strategically dispose of and reacquire. We did that in the last cycle, I think very effectively as a company, and we certainly are focused on at this cycle. But if you said to me, Rich, 2 to 3 years, I wouldn't argue with that. But again, opportunity, comes in many places at many different times for many different reasons. And regardless of the part of the cycle, if you find the right opportunity, you certainly take it. But right now, you're seeing significant properties in markets that we want to be in that have these drivers that we think are really going to push the needle faster than the averages. Coming to market, and people are calling us on these. These are properties that are fairly stabilized, 80% to 90% leased, with rents below the markets and replacement cost. Just excellent, excellent value. So that will end, whether it's 2 years, 3 years or 5 years. It will end if the cycle continues.

Maybe the litmus test is bank lending activity, and I know we've seen some uptick in the bank's -- commercial real estate loan activity is on the uptick, but largely in the residential area. Is that something that you watch dovetailing off of those comments?

Yes, absolutely. That would be another really great metric to keep your eye on, and you're right. In terms of office property, that lending has not certainly hit a red flag at this point.

Okay. In terms of the pipeline, can you give any kind of color on the size of the volume that you're looking at, at least, at least in the range of possible -- possibly happening?

Yes, I'll let Jeff do that.

Rich, Jeff Carter here. Our pipeline continues to be active and robust as it's been for the last 18 months. Currently, I'm underwriting a number of deals. I would say, at an approximate size, the range of deals that I'm underwriting is approximately $300 million. None of those deals are made. And -- but they are deals that are both on-market and off-market potential transactions that have the profile that's very similar to what you've seen us acquire over the last 18 months and that George described sort of anywhere from that 75% to 80%, 90%-plus-or-minus leased, primarily in our 5 core markets, and those are the most watched right now for us.

So $300 million, so that's what? 2 assets?

No, 1 actually.

And then, Jeff, maybe a follow-on to that for you. In the summer, I suppose maybe you saw some impact from rising rates and how that may have impacted or slowed the transaction market. First of all can you confirm that you did see some impact? And second, are we past that now? Are sellers more kind of comfortable with where we are from an interest rate perspective?

It's a great question. I would say that I saw a very, very modest impact in my world on what I was working on. Again, I've had a healthy mix of work, both on off-market deals, where I would be able to comment a little less on that. Beyond market deals that we've looked at have been -- had a healthy amount of competition associated with them, and the pricing has been, we think, advantageous and opportunistic. But the pricing held up, I thought, reasonably well through at all.

Okay. And then last question from me, and maybe this is more conceptual, for George. Do you think of the company as more of an asset aggregator, or more of a targeted market strategy, or some combination in between? And I'd like you to sort of tell me what you think is better or worse about one or the other type of models, depending on what you think you are.

I'm not sure what you mean about "asset aggregator".

Well, I mean, like you have local sharpshooter-type of company that maybe has a lot of market share in a given market, where as you're -- you have focused markets, but you own a few assets in each. So just curious if you feel yourself getting into more of a clustered story from a market perspective -- market exposure perspective?

Well, about 70% of our assets are in 5 markets. So, these 5 markets are markets that we really believe are going to outperform in general. And then, when you get within those markets, these are all large markets. I mean, Denver, Houston, Minneapolis, these are huge markets. The submarkets within those, we are definitely sharpshooting within those submarkets specific situations. And I don't think we're -- we're certainly not looking forward to simply aggregating properties in general markets to aggregate them. We certainly are not doing that. But we are looking to acquire significant new properties in our core markets, where the particular location, submarket, physical characteristic of property really sharp-shoots to a point of growth that we think will be exceptional compared to the broader office market.

Thank you. And there are no more questions at the present time. So I would like to turn the call back over to George Carter for any closing remarks.

Well thank you, everyone, for turning into the call. We appreciate it and we look forward to talking to you next quarter.

Thank you. That concludes today's conference. You may now disconnect your phone lines. Thank you for participating and have a nice day.