SOURCE: Franklin Street Properties Corp.

May 04, 2010 16:00 ET

Franklin Street Properties Corp. Announces First Quarter 2010 Results

WAKEFIELD, MA--(Marketwire - May 4, 2010) - Franklin Street Properties Corp. (the "Company," "FSP," "we" or "our") (NYSE Amex: FSP), an investment firm specializing in real estate, announced today Funds From Operations (FFO) of $16.7 million or $0.21 per share for the first quarter ended March 31, 2010. The Company also announced Net Income of $5.6 million and Earnings Per Share (EPS) of $0.07 for the first quarter and provided an update on other activities.

The Company evaluates its performance based on Net Income, EPS, FFO, Gains on Sales (GOS) and FFO+GOS, and believes each is an important measure. A reconciliation of Net Income to FFO and FFO+GOS, which are non-GAAP financial measures, is provided on page 4 of this press release.

                                         Three Months Ended March 31,
                                     -------------------------------------
                                                                 Increase
                                         2010         2009      (Decrease)
                                     ============ ============ ===========

Net Income                           $      5,562 $      7,808 $    (2,246)
                                     ============ ============ ===========

FFO                                  $     16,650 $     17,338 $      (688)
GOS                                             -            -           -
                                     ------------ ------------ -----------
FFO+GOS                              $     16,650 $     17,338 $      (688)
                                     ============ ============ ===========
Per Share Data:
EPS                                  $       0.07 $       0.11 $     (0.04)
FFO                                  $       0.21 $       0.25 $     (0.04)
GOS                                  $          - $          - $         -
FFO+GOS                              $       0.21 $       0.25 $     (0.04)

Weighted ave shares (diluted)              79,681       70,481       9,200
                                     ============ ============ ===========

Comparing results for the first quarter of 2010 to 2009, Net Income and EPS decreased $2.2 million or $0.04 per share, FFO decreased $0.7 million or $0.04 per share and FFO+GOS decreased $0.7 million or $0.04 per share. The decrease in FFO was primarily attributable to a decrease in real estate FFO of $1.0 million and was partially offset by an increase in investment banking FFO of $0.3 million. The decrease in real estate FFO consisted of approximately $0.8 million as a result of decreased occupancy in the real estate portfolio at March 31, 2010 compared to March 31, 2009; and $0.2 million from decreases in distributions received from investments in our non-consolidated REITs. The increase from investment banking resulted from greater sales of securities by our investment bank, which were $2.1 million in the first quarter of 2010 as compared to $0.2 million by our investment bank for the first quarter of 2009. Revenue from our investment bank is primarily based on the value of securities sales. There was no GOS during the first quarter of 2010 or 2009.

George J. Carter, President and CEO, commented as follows:

"For the first quarter of 2010, FSP's profits as represented by FFO + GOS totaled approximately $16.7 million or $0.21 per share, down $2.8 million from the fourth quarter of 2009. Dividend distributions declared for the first quarter of 2010, which are payable on May 20, 2010, will be approximately $15.1 million or $0.19 per share.

"For 2010, FSP's profit results are likely to have more quarter-to-quarter variability than 2009. The transactional nature, success and timing of our re-leasing efforts of existing vacancy and upcoming lease-roll in the portfolio will interplay with the timing of new property acquisitions and the capital closings of private placement offerings through our investment bank to affect FFO levels.

"Our real estate portfolio of 32 properties continued to provide steady rental income during the first quarter with occupancy rising to 85.4% from 84.4% in the previous quarter. Several of our office properties have significant lease-roll in 2010 and, as a consequence, we expect occupancy and rental income for the year from those properties to be lower. However, we anticipate positive re-leasing efforts in 2010 for all of these properties, and during the first quarter we saw strong prospective new tenant activity for all of them. Since 2010 is such a large lease-roll year for FSP, we anticipate updating our leasing progress from time to time outside of regular quarterly earnings releases. Successful leasing efforts during the course of 2010 should position FSP for a more modest vacancy/lease roll picture in 2011, 2012 and 2013 with potentially meaningful rental income growth in those years from the existing portfolio.

"New property acquisition efforts in the first quarter of 2010 were vigorous with FSP working on several potential additions to its portfolio. While no new properties were purchased in the period, we anticipate current and future activity to produce additional acquisitions of properties for the FSP portfolio this year. While pricing for new property acquisitions remained attractive during the first quarter, there are more buyers in the market now compared to the last two years and, consequently, the pricing of quality well-leased properties has firmed somewhat from 2008/2009 levels. New property acquisitions, when completed, are anticipated to provide additional accretive rental income to the FSP profit picture.

"During the first quarter of 2010, our investment banking group completed capital closings totaling only $2.1 million, and consequently operated at a loss of $0.5 million or about $0.01 per share. While we believe that general investor confidence and interest in commercial real estate investing continues to slowly improve, capital-raising efforts over any specific period of time remain choppy and unpredictable. In addition, the timing of property acquisition opportunities that could be attractive for our syndication business is unpredictable. For full year 2009, our investment banking group raised equity capital totaling about $40.4 million. We are optimistic that business for full year 2010 will show increases over 2009.

"FSP did not list for sale any of its properties during the first quarter of 2010. Generally speaking, we continue to find the property sales environment challenged relative to both liquidity and pricing. However, in a continuation of the commercial property sales market improvement witnessed in the second half of 2009, the first quarter of 2010 seemed to develop more buying interest from a broader spectrum of potential investors, even though the number of completed transactions remained low by historical standards. We believe that both improving office property fundamentals as well as plentiful and attractive financing availability will likely be required to meaningfully improve the market place for property dispositions. As an important part of our total return strategy, it will be FSP's objective to be active in property dispositions once the improving part of the real estate cycle fully re-establishes itself.

"We believe that FSP continues to be in an excellent environment to position itself for meaningful future growth in profits and dividends. Our company will continue to use its capabilities and conservative financial structure to take advantage of real estate investment opportunities that are presenting themselves as a result of the current cyclical downturn in the economy and commercial property market. We are looking forward to the balance of 2010 with optimism."

Dividend Announcement

On April 16, 2010, the Company announced that its Board of Directors declared a regular quarterly dividend for the three months ended March 31, 2010 of $0.19 per share of common stock payable on May 20, 2010 to stockholders of record on April 30, 2010.

Real Estate Update

Supplementary Schedules D & E provide property information for our continuing real estate portfolio of 32 properties and for three non-consolidated REITs that we have interests in as of March 31, 2010. The Company will also be filing a supplemental information package that will provide stockholders and the financial community with additional operating and financial data. The Company will file this supplemental information package with the SEC and make it available on its website at www.franklinstreetproperties.com.

A reconciliation of Net Income to FFO and FFO+GOS is shown below and definitions of FFO and FFO+GOS are provided on Supplementary Schedule H. We believe FFO is used broadly throughout the real estate investment trust (REIT) industry as a measurement of performance and is generally calculated in a similar manner to our calculation. We also believe that FFO+GOS is an important measure as it considers investment performance.


Reconciliation of Net Income to FFO and FFO+GOS:

                                                     Three Months Ended
                                                          March 31,
                                                  ------------------------
(In thousands, except per share amounts)              2010         2009
                                                  -----------  -----------

Net income                                        $     5,562  $     7,808
  GAAP (income) loss from non-consolidated REITs         (253)        (792)
  Distributions from non-consolidated REITs             1,407        1,615
  Depreciation of real estate & intangible
   amortization                                         9,934        8,707
                                                  -----------  -----------
Funds From Operations (FFO)                            16,650       17,338
  Plus gains on sales of assets (GOS)                       -            -
                                                  -----------  -----------
FFO+GOS                                           $    16,650  $    17,338
                                                  ===========  ===========

Per Share Data
EPS                                               $      0.07  $      0.11
FFO                                               $      0.21  $      0.25
GOS                                               $         -  $         -
FFO+GOS                                           $      0.21  $      0.25

Weighted average shares (basic and diluted)            79,681       70,481
                                                  -----------  -----------

Today's news release, along with other news about Franklin Street Properties Corp., is available on the Internet at www.franklinstreetproperties.com. We routinely post information that may be important to investors in the Investor Relations section of our website. We encourage investors to consult that section of our website regularly for important information about us and, if they are interested in automatically receiving news and information as soon as it is posted, to sign up for E-mail Alerts.

A conference call is scheduled for May 5, 2010 at 10:00 a.m. (ET) to discuss the first quarter 2010 results. To access the call, please dial 1-866-713-8395, passcode 28698751. Internationally, the call may be accessed by dialing 1-617-597-5309, passcode 28698751. To listen via live audio webcast, please visit the Webcasts & Presentations section in the Investor Relations section of the Company's website, www.franklinstreetproperties.com at least ten minutes prior to the start of the call and follow the posted directions. The webcast will also be available via replay from the above location starting one hour after the call is finished.

About Franklin Street Properties Corp.

Franklin Street Properties Corp., based in Wakefield, Massachusetts, is focused on achieving current income and long-term growth through investments in commercial properties. FSP operates in two business segments: real estate operations and investment banking/investment services. The majority of FSP's property portfolio is suburban office buildings, with select investments in certain central business district properties. FSP's subsidiary, FSP Investments LLC (member, FINRA and SIPC), is a real estate investment banking firm and a registered broker/dealer. FSP is a Maryland corporation that operates in a manner intended to qualify as a real estate investment trust (REIT) for federal income tax purposes. To learn more about FSP please visit our website at www.franklinstreetproperties.com.

Forward-Looking Statements

Statements made in this press release that state FSP's or management's intentions, beliefs, expectations, or predictions for the future may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. This press release may also contain forward-looking statements based on current judgments and current knowledge of management, which are subject to certain risks, trends and uncertainties that could cause actual results to differ materially from those indicated in such forward-looking statements. Accordingly, readers are cautioned not to place undue reliance on forward-looking statements. Investors are cautioned that our forward-looking statements involve risks and uncertainty, including without limitation, economic conditions in the United States, disruptions in the debt markets, economic conditions in the markets in which we own properties, changes in the demand by investors for investment in Sponsored REITs (as defined in our Annual Report on Form 10-K for the year ended December 31, 2009), risks of a lessening of demand for the types of real estate owned by us, changes in government regulations, and expenditures that cannot be anticipated such as utility rate and usage increases, unanticipated repairs, additional staffing, insurance increases and real estate tax valuation reassessments. See the "Risk Factors" set forth in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2009, as the same may be updated from time to time in subsequent filings with the United States Securities and Exchange Commission. Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. We will not update any of the forward-looking statements after the date of this press release to conform them to actual results or to changes in our expectations that occur after such date, other than as required by law.


                         Franklin Street Properties Corp.
                                 Earnings Release
                            Supplementary information
                                 Table of Contents

Franklin Street Properties Corp. Financial Results                      A-C
Real Estate Portfolio Summary Information                                 D
Portfolio and Other Supplementary Information                             E
Quarterly Information                                                     F
Largest 20 Tenants - FSP Owned Portfolio                                  G
Definition of Funds From Operations (FFO) and  FFO+GOS                    H





            Franklin Street Properties Corp. Financial Results
                         Supplementary Schedule A
                 Condensed Consolidated Income Statements
                               (Unaudited)


                                             For the Three Months Ended
                                                       March 31,
                                            ------------------------------
(in thousands, except per share amounts)         2010            2009
                                            --------------  --------------

Revenue:
  Rental                                    $       30,799  $       29,818
Related party revenue:
  Syndication fees                                     121              10
  Transaction fees                                     146              28
  Management fees and interest income from
   loans                                               533             545
Other                                                    9              18
                                            --------------  --------------
    Total revenue                                   31,608          30,419
                                            --------------  --------------

Expenses:
  Real estate operating expenses                     7,973           7,280
  Real estate taxes and insurance                    5,246           4,829
  Depreciation and amortization                      9,219           7,914
  Selling, general and administrative                2,171           2,008
  Commissions                                          114             130
  Interest                                           1,652           1,577
                                            --------------  --------------

    Total expenses                                  26,375          23,738
                                            --------------  --------------

Income before interest income, equity in
 earnings of non-consolidated REITs and
 taxes                                               5,233           6,681
Interest income                                          8              36
Equity in earnings of non-consolidated
 REITs                                                 253             792
                                            --------------  --------------

Income before taxes on income                        5,494           7,509
Taxes on income                                        (68)           (299)
                                            --------------  --------------


Net income                                  $        5,562  $        7,808
                                            --------------  --------------

Weighted average number of shares
 outstanding, basic and diluted                     79,681          70,481
                                            --------------  --------------

Net income per share, basic and diluted     $         0.07  $         0.11
                                            --------------  --------------






           Franklin Street Properties Corp. Financial Results
                        Supplementary Schedule B
                Condensed Consolidated Balance Sheets
                             (Unaudited)



                                                March 31,     December 31,
(in thousands, except share and par value         2010           2009
 amounts)
                                            --------------   -------------
Assets:
Real estate assets, net                            916,955         921,833
Acquired real estate leases, less
 accumulated amortization of $35,636 and
 $34,592, respectively                              41,783          44,757
Investment in non-consolidated REITs                91,787          92,910
Assets held for syndication, net                     2,791           4,827
Cash and cash equivalents                           22,815          27,404
Restricted cash                                         50             334
Tenant rent receivables, less allowance for
 doubtful accounts of $1,000 and $620,
 respectively                                        1,385           1,782
Straight-line rent receivable, less
 allowance for doubtful accounts of $100 and
 $100, respectively                                 14,215          10,754
Prepaid expenses                                     2,236           2,594
Related party mortgage loan receivable              41,325          36,535
Other assets                                           870             844
Office computers and furniture, net of
 accumulated depreciation
of $1,267 and $1,233, respectively                     350             384
Deferred leasing commissions, net of
 accumulated amortization
of $5,350, and $4,995, respectively                 15,752          10,808
                                            --------------   -------------
    Total assets                            $    1,152,314  $    1,155,766
                                            ==============  ==============

Liabilities and Stockholders' Equity:
Liabilities:
 Bank note payable                          $      119,968  $      109,008
  Term loan payable                                 75,000          75,000
  Accounts payable and accrued expenses             20,467          23,787
  Accrued compensation                                 274           1,416
  Tenant security deposits                           1,696           1,808
  Other liabilities: derivative termination
   value                                             1,995           2,076
  Acquired unfavorable real estate leases,
   less accumulated amortization                     5,137           5,397
                                            --------------   -------------
    Total liabilities                              224,537         218,492
                                            --------------   -------------

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,
   79,680,705 and 79,680,705 shares issued
   and outstanding, respectively                         8               8
  Additional paid-in capital                     1,003,712       1,003,713
  Accumulated other comprehensive loss              (1,995)         (2,076)
  Accumulated distributions in excess of
   accumulated earnings                            (73,948)        (64,371)
                                            --------------   -------------
 Total stockholders' equity                        927,777         937,274
                                            --------------   -------------
 Total liabilities and stockholders' equity $    1,152,314  $    1,155,766
                                            ==============  ===============

          Franklin Street Properties Corp. Financial Results
                     Supplementary Schedule C
           Condensed Consolidated Statements of Cash Flows
                            (Unaudited)

                                                           For the
                                                      Three Months Ended
                                                           March 31,
                                                    ----------------------
(in thousands)                                         2010        2009
                                                    ----------  ----------
Cash flows from operating activities:

  Net income                                        $    5,562  $    7,808
  Adjustments to reconcile net income to net cash
   provided by operating activities:
    Depreciation and amortization expense                9,284       7,981
    Amortization of above market lease                     716         793
    Equity in earnings of non-consolidated REITs          (253)       (792)
    Distributions from non-consolidated REITs            1,407       1,615
    Increase in bad debt reserve                           380          86
  Changes in operating assets and liabilities:
    Restricted cash                                        284           -
    Tenant rent receivables, net                            17         159
    Straight-line rents, net                            (1,020)       (374)
    Prepaid expenses and other assets, net                 265        (171)
    Accounts payable and accrued expenses               (3,917)     (3,154)
    Accrued compensation                                (1,142)     (1,404)
    Tenant security deposits                              (112)        (79)
  Payment of deferred leasing commissions               (5,566)       (162)
                                                    ----------  ----------
        Net cash provided by operating activities        5,905      12,306
                                                    ----------  ----------
Cash flows from investing activities:
  Purchase of real estate assets, office computers
   and furniture                                        (3,529)     (3,295)
  Changes in deposits on real estate assets                  -       1,300
  Investment in related party mortgage loan
   receivable                                           (4,790)     (3,600)
  Investment in assets held for syndication, net         2,005          86
                                                    ----------  ----------
        Net cash used in investing activities           (6,314)     (5,509)
                                                    ----------  ----------
Cash flows from financing activities:
  Distributions to stockholders                        (15,139)    (13,391)
  Proceeds from equity offering, net                        (1)          -
  Borrowings under bank note payable                    10,960       5,000
                                                    ----------  ----------
        Net cash used in financing activities           (4,180)     (8,391)
                                                    ----------  ----------
Net decrease in cash and cash equivalents               (4,589)     (1,594)
Cash and cash equivalents, beginning of period          27,404      29,244
                                                    ----------  ----------
Cash and cash equivalents, end of period            $   22,815  $   27,650
                                                    ==========  ==========





              Franklin Street Properties Corp. Earnings Release
                           Supplementary Schedule D
                  Real Estate Portfolio Summary Information
                           (Unaudited & Approximated)

Commercial portfolio lease expirations (1)
                   As of March 31, 2010

                            Total         % of
       Year               Square Feet   Portfolio
                          ------------ -----------
       2010                    732,934        12.3%
       2011                    460,349         7.8%
       2012                    439,496         7.4%
       2013                    361,867         6.1%
       2014                    585,420         9.9%
       2015                    482,830         8.1%
Thereafter (2)               2,879,403        48.4%
                          ------------ -----------
                             5,942,299       100.0%
                          ============ ===========

(1) Percentages are determined based upon square footage of expiring
    commercial leases.
(2) Includes 867,325 square feet of current vacancies.






(dollars & square
 feet in 000's)                     As of March 31, 2010
                  --------------------------------------------------------
                    # of                     % of      Square      % of
State             Properties Investment   Portfolio     Feet    Portfolio
                  ---------- ----------- -----------  --------- ----------

Texas                      7 $   227,269        24.8%     1,488       25.1%
Virginia                   5     161,113        17.6%       940       15.8%
Colorado                   4     127,199        13.9%       792       13.3%
Georgia                    1      75,034         8.2%       387        6.5%
Missouri                   3      71,748         7.8%       477        8.0%
Maryland                   2      61,224         6.7%       424        7.1%
Florida                    1      47,881         5.2%       213        3.6%
Indiana                    1      36,405         4.0%       205        3.4%
Illinois                   1      29,772         3.2%       177        3.0%
California                 2      21,337         2.3%       182        3.1%
Michigan                   1      14,771         1.6%       215        3.6%
Washington                 1      14,661         1.6%       117        2.0%
Minnesota                  1      14,537         1.6%       153        2.6%
North Carolina             2      14,004         1.5%       172        2.9%
                  ---------- ----------- -----------  --------- ----------
                          32 $   916,955       100.0%     5,942      100.0%
                  ========== =========== ===========  ========= ==========


Property by type:
(dollars & square
 feet in 000's)                       As of March 31, 2010
                     -----------------------------------------------------
                       # of                    % of     Square     % of
Type                 Properties Investment  Portfolio     Feet   Portfolio
                     ---------- ----------- ----------  -------- ---------
Office                       31     911,957       99.5%    5,843      98.3%
Industrial                    1       4,998        0.5%       99       1.7%
                     ---------- ----------- ----------  -------- ---------
                             32 $   916,955      100.0%    5,942     100.0%
                     ========== =========== ==========  ======== =========





                 Franklin Street Properties Corp. Earnings Release
                             Supplementary Schedule E
                   Portfolio and Other Supplementary Information
                              (Unaudited & Approximated)


Capital Expenditures
Owned Portfolio                                        Three Months Ended
(in thousands)                                        ---------------------
                                                       31-Mar-10  31-Mar-09
                                                      ---------- ----------

Tenant improvements                                   $    1,305 $    1,374
Deferred leasing costs                                     5,566        162
Building improvements                                        380        465
                                                      ---------- ----------
                                                      $    7,251 $    2,001
                                                      ========== ==========






Square foot & leased percentages                  March 31,   December 31,
                                                    2010          2009
                                                ============  ============

Owned portfolio of commercial real estate
         Number of properties                             32            32
         Square feet                               5,942,299     5,942,414
         Leased percentage                                85%           84%

Investments in non-consolidated commercial real
 estate
         Number of properties                              3             3
         Square feet                               1,995,041     1,995,041
         Leased percentage                                78%           78%

Single Asset REITs (SARs) managed
         Number of properties                             11            11
         Square feet*                              2,406,370     2,406,370
         Leased percentage*                               76%           91%

Total owned, investments & managed properties
         Number of properties                             46            46
         Square feet*                             10,343,710    10,343,825
         Leased percentage*                               82%           85%

*Excludes a property under construction with approximately 285,000
 square feet.




The following table shows property information for our investments in
non-consolidated REITs:

                                           Square    % Leased   % Interest
Single Asset REIT name    City     State   Feet     31-Mar-10      Held
                       ----------- ----- ---------- ----------  ----------
FSP 303 East Wacker
 Drive Corp.               Chicago    IL    844,081      73.89%       43.7%
FSP Grand Boulevard
 Corp.                 Kansas City    MO    532,453      90.03%       27.0%
FSP Phoenix Tower
 Corp.                     Houston    TX    618,507      74.30%        4.6%
                                         ---------- ----------
                                          1,995,041      78.32%
                                         ---------- ----------



              Franklin Street Properties Corp. Earnings Release
               Supplementary Schedule F: Quarterly Information
                                  (Unaudited)


(in thousands)
                                       Q1        Q2        Q3        Q4
Revenue:                              2009      2009      2009      2009
                                    --------  --------  --------  --------
 Rental                               29,818    29,254    31,702    31,300
 Related party revenue:
  Syndication fees                        10        29         -     2,389
  Transaction fees                        28       514         1     1,537
  Management fees and
    interest income from loans           545       317       370       508
 Other                                    18        18        19         6
                                    --------  --------  --------  --------
      Total revenue                   30,419    30,132    32,092    35,740
                                    --------  --------  --------  --------

Expenses:
  Real estate operating expenses       7,280     7,144     7,752     8,646
  Real estate taxes and insurance      4,829     4,686     5,364     4,349
  Depreciation and amortization        7,914    10,225     8,801     9,353
  Selling, general and
   administrative                      2,008     2,127     2,243     2,513
  Commissions                            130        40         8     1,623
  Interest                             1,577     1,599     1,744     1,650
                                    --------  --------  --------  --------
      Total expenses                  23,738    25,821    25,912    28,134
                                    --------  --------  --------  --------

  Income before interest income,
   equity
    in earnings in non-consolidated
     REITs                             6,681     4,311     6,180     7,606
  Interest income                         36        36        16         9
  Equity in earnings in
   non-consolidated REITs                792       443       475       284
                                    --------  --------  --------  --------

  Income before taxes on income        7,509     4,790     6,671     7,899
  Taxes on income                       (299)      (75)     (270)       65
                                    --------  --------  --------  --------

  Income from continuing operations    7,808     4,865     6,941     7,834
  Income from discontinued
   operations                              -         -         -         -
                                    --------  --------  --------  --------

  Income before gain on sale of
   properties                          7,808     4,865     6,941     7,834
  Gain on sale of assets                   -         -         -       424
                                    --------  --------  --------  --------
  Net income                        $  7,808  $  4,865  $  6,941  $  8,258
                                    --------  --------  --------  --------

FFO and  FFO+GOS calculations:

Net income                          $  7,808  $  4,865  $  6,941  $  8,258
                                    ========  ========  ========  ========
  (Gain) Loss on sale of assets            -         -         -      (424)
  GAAP income from non-consolidated
   REITs                                (792)     (443)     (475)     (301)
  Distributions from
   non-consolidated REITs              1,615     1,523     1,119     1,371
  Acquisition costs                        -       248       391         4
  Depreciation & amortization          8,707    11,216     9,561    10,167
                                    --------  --------  --------  --------
Funds From Operations (FFO)           17,338    17,409    17,537    19,075
  Plus gains on sales of assets            -         -         -       424
                                    --------  --------  --------  --------
FFO+GOS                             $ 17,338  $ 17,409  $ 17,537  $ 19,499
                                    ========  ========  ========  ========






            Franklin Street Properties Corp. Earnings Release
                      Supplementary Schedule G
              Largest 20 Tenants - FSP Owned Portfolio
                     (Unaudited & Estimated)



As of March 31, 2010

                                                                   % of
      Tenant                                    Sq Ft   SIC Code  Portfolio
                                              --------- --------- ---------
1   Noblis, Inc.                                252,613        54      4.2%
2   CITGO Petroleum Corporation           (1)   248,399        29      4.2%
3   Tektronix Texas, LLC                        241,372        73      4.1%
4   Burger King Corporation                     212,619        58      3.6%
5   New Era of Networks, Inc.
    (Sybase)                                    199,077        73      3.4%
6   RGA Reinsurance Company                     185,501        63      3.1%
7   Citicorp Credit Services, Inc.        (2)   176,848        61      3.0%
8   C.H. Robinson Worldwide, Inc.               153,028        47      2.6%
9   Geisecke & Devrient America, Inc.           135,888        73      2.3%
10  Murphy Exploration & Production
     Company                                    133,786        13      2.2%
11  Monsanto Company                            127,778        28      2.2%
12  Vail Holdings, Inc. d/b/a Vail
     Resorts                              (3)   121,913        79      2.1%
13  Northrop Grumman Systems
     Corporation                                111,469        73      1.9%
14  Maines Paper & Food Service,
     Inc.                                        98,745        51      1.6%
15  Amdocs, Inc.                                 91,928        73      1.5%
16  County of Santa Clara                        90,467        91      1.5%
17  Ober Kaler Grimes & Shriver                  89,885        81      1.5%
18  International Business Machines
     Corp.                                       83,209        79      1.4%
19  Corporate Holdings, LLC                      81,818        67      1.4%
20  Noble Royalties, Inc.                        78,344        67      1.3%
                                              ---------           --------
      Total                                   2,914,687               49.1%
                                              ---------           --------

(1) On January 20, 2010, the Company signed a new lease at a Houston, Texas
    property, for approximately 248,000 square feet of space with one of
    its tenants, CITGO Petroleum Corporation, effectively extending the
    lease expiration from February 29, 2012 to February 28, 2022.
(2) The lease with Citicorp Credit Services, Inc. is guaranteed by
    Citigroup, Inc.
(3) On March 22, 2010, the Company signed a lease for an additional 38,000
    square feet of space with one of its tenants, Vail Holdings, Inc.


Franklin Street Properties Corp. Earnings Release

Supplementary Schedule H

Definition of Funds From Operations ("FFO"), and FFO plus Gains on Sales ("FFO+GOS")

The Company evaluates the performance of its reportable segments based on several measures including Funds From Operations ("FFO") and FFO plus Gains on Sales ("FFO+GOS") as management believes they represent important measures of activity and are an important consideration in determining distributions paid to equity holders. The Company defines FFO as net income (computed in accordance with generally accepted accounting principles, or GAAP), excluding gains (or losses) from sales of property and acquisition costs of newly acquired properties that are not capitalized, plus depreciation and amortization, and after adjustments to exclude non-cash income (or losses) from non-consolidated or Sponsored REITs, plus distributions received from non-consolidated or Sponsored REITs. The Company defines FFO+GOS as FFO as defined above, plus gains (or losses) from sales of properties and provisions for assets held for sale, if applicable.

FFO and FFO+GOS should not be considered as alternatives to net income (determined in accordance with GAAP), as indicators of the Company's financial performance, nor as alternatives to cash flows from operating activities (determined in accordance with GAAP), nor as measures of the Company's liquidity, nor are they necessarily indicative of sufficient cash flow to fund all of the Company's needs. Other real estate companies may define these terms in a different manner. We believe that in order to facilitate a clear understanding of the results of the Company, FFO and FFO+GOS should be examined in connection with net income and cash flows from operating, investing and financing activities in the consolidated financial statements.

Contact Information

  • Contact:
    John Demeritt
    877-686-9496