Fellow Stockholders
For the full year 2018, our net income was approximately $13.1 million or $0.12 per share, and our Company's profitability as measured by Funds from Operations or FFO1, totaled approximately $102.5 million or $0.96 per share. As of December 31, 2018, we had 82% of our $995 million debt stack at fixed rates with our nearest debt maturity of $205 million due on November 30, 2021. As of December 31, 2018, our debt service coverage ratio was about 3.7 times and our liquidity between our line of credit and cash exceeded $586 million.
Leasing within our property portfolio was strong during 2018, setting an all-time record of approximately 1,681,000 square feet. This was our second consecutive year of record leasing. However, we have a large amount of lease-roll occurring in 2019 and 2020, and as anticipated, we did experience known and planned for tenant move outs during the fourth quarter of 2018. Year-end 2018 lease roll dropped our total portfolio leased occupancy (including our redevelopment properties) from approximately 90% at the end of the third quarter of 2018 to approximately 86% at the start of 2019. So while we are doing a lot of leasing, additional lease-roll maturities keep giving us back more space to re-lease. While this period of time is challenging on the leasing front, it is also opportunistic for us to add value to our portfolio by leasing space at higher rental rates and signing longer-term leases. Our strategy has been to arrive at this time of lease-roll with the capability and financial resources to add value to the property portfolio in the way we believe will maximize results. Our goal is to stabilize the FSP office portfolio at a leased occupancy of 92% to 96%. As part of our value-add leasing efforts we are also redeveloping 3 of our 35 properties.
As 2019 begins, we are continuing our lease-up efforts at our approximately 130,000 square foot redevelopment property known as 801 Marquette in Minneapolis, Minnesota, which was approximately 37% leased as of December 31, 2018. In addition, we are now redeveloping an approximately 213,000 square foot property known as Blue Lagoon in Miami, Florida and an approximately 62,000 square foot property known as Forest Park in Charlotte, North Carolina, for a total of approximately 405,000 square feet of redevelopment space in the aggregate. Similar to 801 Marquette, prior to beginning our redevelopment efforts, both Blue Lagoon and Forest Park had been long-term leased to single-tenants. In addition, both assets have been owned by us (or our affiliates) for in excess of 15 years, are anchored in excellent locations within their respective markets, and have generated consistently strong cash flows. We believe that current market rents for these assets are meaningfully higher than the expiring single-tenant rents. We also believe that our redevelopment efforts will provide us the opportunity to capture significant increased value for our shareholders through higher ongoing rental cash flows, as we seek to achieve a strong, long-term rate of return on our costs of redevelopment. Currently, these three redevelopment properties contribute no material rental income to the Company.
As 2019 begins, we are optimistic about our ability to lease significant portions of our vacancy in our 32 operating properties and in our 3 redevelopment properties, and believe that successful results will mark the beginning of a longer-term, more sustainable, rise in operating performance and value creation within our property portfolio in 2020. The reduction to our dividend in 2018 allows the Company to retain more operating cash flow to fund anticipated increased leasing costs and capital expenditures during 2019 and 2020.
Thank you for your continued support.
George J. Carter
Chairman & Chief Executive Officer
1FFO is a non-GAAP financial measure currently used in the real estate industry that we believe provides useful information to investors. Please refer to page A-1 of this Annual Report for a definition of FFO and a reconciliation of net income to FFO.