SOURCE: Franklin Street Properties Corp.

May 03, 2011 16:01 ET

Franklin Street Properties Corp. Announces First Quarter 2011 Results

WAKEFIELD, MA--(Marketwire - May 3, 2011) - 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 $16.3 million or $0.20 per share for the first quarter ended March 31, 2011. The Company also announced Net Income of $24.8 million and Earnings Per Share (EPS) of $0.30 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.

(in 000's except per share data)           Three Months Ended March 31,
                                        ----------------------------------
                                                                 Increase
                                           2011        2010     (Decrease)
                                        ----------- ----------- ----------

Net Income                              $    24,767 $     5,562 $   19,205
                                        =========== =========== ==========

FFO                                     $    16,250 $    16,651 $     (401)
GOS                                          19,592           -     19,592
                                        ----------- ----------- ----------
FFO+GOS                                 $    35,842 $    16,651 $   19,191
                                        =========== =========== ==========
Per Share Data:
EPS                                     $      0.30 $      0.07 $     0.23
FFO                                     $      0.20 $      0.21 $    (0.01)
GOS                                     $      0.24 $        -- $     0.24
FFO+GOS                                 $      0.44 $      0.21 $     0.23

Weighted ave shares (diluted)                81,437      79,681      1,757
                                        ----------- ----------- ----------

Comparing results for the first quarter of 2011 to 2010, Net Income and EPS increased $19.2 million or $0.23 per share, FFO decreased $0.4 million or $0.01 per share and FFO+GOS increased $19.2 million or $0.23 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 $0.6 million. The decrease in real estate FFO was primarily from the sale of a property in Falls Church, Virginia in January 2011 and was partially offset by three new acquisitions made in March 2011 and the benefits of increased occupancy in the real estate portfolio at March 31, 2011 compared to March 31, 2010. The increase from investment banking resulted from greater sales of securities by our investment bank, which were $7.5 million for the first quarter of 2011 as compared to $2.1 million in the first quarter of 2010. Revenue from our investment bank is primarily based on the value of securities sales. The sale of a property in Falls Church, Virginia contributed $19.6 million or $0.24 per share of GOS for the first quarter of 2011. There was no GOS during the first quarter of 2010.

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

"For the first quarter of 2011, FSP's profits as represented by FFO + GOS totaled approximately $35.8 million or $0.44 per share, an increase of $0.22 per share compared to the fourth quarter of 2010. Dividend distributions declared for the first quarter of 2011, which are payable on May 20, 2011, will be approximately $15.5 million or $0.19 per share.

"FSP's profit results for the first quarter of 2011 had a little bit of 'noise' in them when compared to most of our past quarterly earnings periods. Contributing factors included: (1) the sale of our Falls Church, Virginia property, Fairview Park, for a gain, but the consequential loss of its rental stream for most of the quarter; (2) a significant number of newly-signed tenant leases that increased our property portfolio's leased percentage in the fourth quarter of 2010 and the first quarter of 2011 have not yet 'commenced' (although the economic benefit of those new leases should begin to produce a meaningful contribution to rental revenues in Q2); and (3) additional property acquisitions to our portfolio that occurred in the first quarter of 2011 were 'back-ended' in the quarter, and consequently, did not contribute a full quarter of rental revenue. Upcoming quarters should see our rental revenues align themselves more typically with the total size and leased percentage of our property portfolio.

"Our directly-owned real estate portfolio of 35 properties, totaling approximately 6,845,176 square feet, was approximately 88.4% leased as of March 31, 2011, up from approximately 85.6% leased as of December 31, 2010. Several of our properties experienced significant lease-roll in 2010. As a result, we have experienced lower levels of rental income from these properties. Most of the rental/leasing markets where our properties are located have finally stabilized, albeit at lower levels than before the recent downturn. It is our objective to move overall occupancy levels in the property portfolio back to the ninety-plus percentage range. We believe we will continue to make meaningful progress toward that goal throughout the balance of 2011.

"There were four new property acquisitions completed in the first quarter of 2011 for a total purchase price of approximately $216.8 million. Total square footage acquired was approximately 1,086,039 square feet. All of the acquisitions were suburban office properties. Three of the properties totaling approximately 676,241 square feet at a purchase cost of approximately $166.6 million were acquired directly into the FSP portfolio. With the disposition of our Fairview Park property, these acquisitions bring our total directly-owned property portfolio to 35 properties totaling approximately 6,845,176 square feet as of the end of the first quarter. The fourth asset that was acquired is being held for syndication through our Investment Banking Group. Additional property acquisitions during the balance of 2011 are a major objective of FSP, and we would anticipate additional property acquisitions during the course of the year as we utilize our expanded credit facility and its structural flexibility to facilitate our growth.

"During the first quarter of 2011, our Investment Banking Group raised $4.75 million to fully subscribe a $30 million private placement syndication that began in the fourth quarter of 2010. In March of this year, the Investment Banking Group began a new $62 million private placement offering and completed $2.75 million of that transaction by the end of the quarter. Total equity raised between the two offerings for the first quarter of 2011 was $7.5 million. The Investment Banking business operated at a small profit for the quarter. Currently, equity-raising activity continues on our $62 million offering, and we continue to see general investor confidence and interest in commercial real estate investing slowly improving. However, capital-raising efforts in this business segment over any specific period of time are likely to remain unpredictable.

"On January 21, 2011, FSP sold its Fairview Park office property located in Falls Church, Virginia for approximately $90 million. The sale produced a gain of approximately $19.6 million or $0.24 per share. The transaction occurred via an unsolicited offer from a buyer who was very familiar with the asset and its submarket. Our agreement to sell Fairview Park was motivated by very property-specific considerations. However, we have continued to witness generally improving pricing and liquidity for quality properties in certain markets and may now consider proactively pursuing the possible selective sale of certain other properties, something we have not done for the last three years. We have always had a total-return strategy for our primarily suburban office assets, attempting to take advantage of the traditionally significant cyclical characteristic of the asset class and the markets where the properties are located. All invested capital for both initial acquisition, ongoing leasing and asset management is allocated based upon this strategy. The last three years presented few attractive opportunities on the sell-side of the ledger but have offered a number of solid acquisition choices. However, we are becoming more optimistic that the market cycle may be beginning to turn into a more broadly-based positive environment for property dispositions. Since gain on sale (GOS) is an important part of our total-return strategy, we may start to become more active relative to future property dispositions.

"We believe 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, conservative financial structure, and expanded credit facility to take advantage of competitive tenant leasing requirements, attractive real estate acquisition and disposition opportunities and opportunistic investment banking situations that are presenting themselves as a result of the current cyclical softness in the economy and commercial property market. Since the fourth quarter of 2007 we have viewed 2010 as likely our most challenging year in dealing with a broad, financially-precipitated, cyclical, economic downturn. As we begin the second quarter of 2011, we are optimistic that FSP has managed its major challenges, while taking advantage of positioning opportunities that traditionally only present themselves during severe economic downturns. We are very much looking forward to our future growth potential."

Dividend Announcement

On April 15, 2011, the Company announced that its Board of Directors declared a regular quarterly dividend for the three months ended March 31, 2011 of $0.19 per share of common stock payable on May 20, 2011 to stockholders of record on April 29, 2011.

Real Estate Update

Supplementary Schedules D & E provide property information for our continuing real estate portfolio of 35 properties and for three non-consolidated REITs that we had interests in as of March 31, 2011. 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. Our computation of FFO may not be comparable to FFO reported by other REITs or real estate companies that define FFO differently. 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)                  2011      2010
                                                        --------  --------

Net Income                                              $ 24,767  $  5,562
  Less gain on sale of property                          (19,592)        -
  GAAP (income) loss from non-consolidated REITs          (1,773)     (253)
  Distributions from non-consolidated REITs                1,767     1,407
  Acquisitions costs                                         269         -
  Depreciation of real estate & intangible amortization   10,812     9,935
                                                        --------  --------
Funds From Operations (FFO)                               16,250    16,651
  Plus gains on sales of assets (GOS)                     19,592         -
                                                        --------  --------
FFO+GOS                                                 $ 35,842  $ 16,651
                                                        ========  ========

Per Share Data
EPS                                                     $   0.30  $   0.07
FFO                                                     $   0.20  $   0.21
GOS                                                     $   0.24  $      -
FFO+GOS                                                 $   0.44  $   0.21

Weighted average shares (basic and diluted)               81,437    79,681
                                                        --------  --------

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 4, 2011 at 10:00 a.m. (ET) to discuss the first quarter 2011 results. To access the call, please dial 1-800-573-4754, passcode 51051421. Internationally, the call may be accessed by dialing 1-617-224-4325, passcode 51051421. 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, 2010), 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, 2010, 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
Percentage of Leased Space                               G
Largest 20 Tenants - FSP Owned Portfolio                 H
Definition of Funds From Operations (FFO) and  FFO+GOS   I





            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)                  2011      2010
                                                        ========= =========

Revenue:
   Rental                                               $  31,270 $ 28,757
Related party revenue:
   Syndication fees                                           517      121
   Transaction fees                                           691      146
   Management fees and interest income from loans             808      533
Other                                                           7        9
                                                        --------- --------
     Total revenue                                         33,293   29,566
                                                        --------- --------

Expenses:
   Real estate operating expenses                           8,732    7,955
   Real estate taxes and insurance                          4,783    4,996
   Depreciation and amortization                           10,819    8,496
   Selling, general and administrative                      2,368    2,171
   Commissions                                                287      114
   Interest                                                 2,409    1,652
                                                        --------- --------

     Total expenses                                        29,398   25,384
                                                        --------- --------

Income before interest income, equity in earnings of
non-consolidated REITs and taxes                            3,895    4,182
Interest income                                                12        8
Equity in earnings of non-consolidated REITs                  968      253
                                                        --------- --------

Income before taxes on income                               4,875    4,443
Taxes on income                                                50      (68)
                                                        --------- --------

   Income from continuing operations                        4,825    4,511
                                                        --------- --------

   Discontinued operations:
   Income from discontinued operations                        350    1,051
   Gain on sale of property less applicable income tax     19,592        -
                                                        --------- --------
   Total discontinued operations                           19,942    1,051
                                                        --------- --------

Net income                                              $  24,767 $  5,562
                                                        ========= ========

Weighted average number of shares outstanding,
basic and diluted                                          81,437   79,681
                                                        ========= ========

Earnings per share, basic and diluted, attributable to:
   Continuing operations                                $    0.06 $   0.06
   Discontinued operations                                   0.24     0.01
                                                        --------- --------
Net income per share, basic and diluted                 $    0.30 $   0.07
                                                        ========= ========







            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 amounts)    2011         2010
                                                  ===========  ===========
Assets:
Real estate assets, net                           $   984,441  $   867,608
Acquired real estate leases, less accumulated
 amortization of $19,813 and $19,294,
 respectively                                          85,290       40,578
Investment in non-consolidated REITs                   88,652       89,327
Assets held for syndication, net                       47,630        2,976
Assets held for sale                                        -       69,790
Cash and cash equivalents                              49,488       68,213
Restricted cash                                           440          420
Tenant rent receivables, less allowance for doubtful
 accounts of $1,225 and $1,600, respectively            1,688        1,922
Straight-line rent receivable, less allowance for
 doubtful accounts of $135 and $700, respectively      20,992       18,752
Prepaid expenses                                        1,400        1,654
Related party mortgage loan receivable                 60,116       57,684
Other assets                                            5,838          853
Office computers and furniture, net of accumulated
 depreciation of $538 and $493, respectively              501          503
Deferred leasing commissions, net of accumulated
 amortization of $7,613 and $7,175, respectively       20,426       18,455
                                                  -----------  -----------
      Total assets                                $ 1,366,902  $ 1,238,735
                                                  ===========  ===========

Liabilities and Stockholders' Equity:
Liabilities:
   Bank note payable                              $   404,000  $   209,968
   Term loan payable                                        -       74,850
   Accounts payable and accrued expenses               20,562       22,435
   Accrued compensation                                   603        1,803
   Tenant security deposits                             2,533        1,930
   Other liabilities: derivative termination
    value                                                 828        1,077
   Acquired unfavorable real estate leases, less
    accumulated amortization of $2,770 and
    $2,744, respectively                                7,275        5,114
                                                  -----------  -----------
      Total liabilities                               435,801      317,177
                                                  -----------  -----------

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, 81,437,405 and 81,437,405
    shares issued and outstanding, respectively             8            8
   Additional paid-in capital                       1,025,491    1,025,491
   Accumulated other comprehensive loss                  (828)      (1,077)
   Accumulated distributions in excess of
    accumulated earnings                              (93,570)    (102,864)
                                                  -----------  -----------
     Total stockholders' equity                       931,101      921,558
                                                  -----------  -----------
     Total liabilities and stockholders' equity   $ 1,366,902  $ 1,238,735
                                                  ===========  ===========





            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)                                            2011      2010
                                                        ========  ========
Cash flows from operating activities:
   Net income                                           $ 24,767  $  5,562
   Adjustments to reconcile net income to net cash
    provided by operating activities:
     Depreciation and amortization expense                11,109     9,284
     Amortization of above market lease                       (6)      716
     Gain on sale of real estate assets                  (19,592)        -
     Equity in earnings of non-consolidated REITs         (1,066)     (253)
     Distributions from non-consolidated REITs             1,767     1,407
     Increase (decrease) in bad debt reserve                (375)      380
   Changes in operating assets and liabilities:
     Restricted cash                                         (20)      284
     Tenant rent receivables, net                            609        17
     Straight-line rents, net                             (2,303)   (1,020)
     Prepaid expenses and other assets, net                   88       265
     Accounts payable and accrued expenses                (1,212)   (3,917)
     Accrued compensation                                 (1,200)   (1,142)
     Tenant security deposits                                603      (112)
   Payment of deferred leasing commissions                (2,819)   (5,566)
                                                        --------  --------
       Net cash provided by operating activities          10,350     5,905
                                                        --------  --------
Cash flows from investing activities:
   Purchase of real estate assets, office computers and
    furniture                                           (124,307)   (3,529)
   Acquired real estate leases                           (45,032)        -
   Investments in non-consolidated REITs                      (9)        -
   Investment in related party mortgage loan receivable   (2,432)   (4,790)
   Changes in deposits on real estate assets                 200         -
   Investment in assets held for syndication, net        (45,186)    2,005
   Proceeds received on sales of real estate assets       89,382         -
                                                        --------  --------
       Net cash used in investing activities            (127,384)   (6,314)
                                                        --------  --------
Cash flows from financing activities:
   Distributions to stockholders                         (15,473)  (15,139)
   Proceeds from equity offering, net                        (90)       (1)
   Borrowings under bank note payable                    404,000    10,960
   Repayment of bank note payable                       (209,968)        -
   Repayment of term loan payable                        (74,850)        -
   Deferred financing costs                               (4,328)        -
   Swap termination payment                                 (982)        -
                                                        --------  --------
       Net cash provided by (used in) financing
        activities                                        98,309    (4,180)
                                                        --------  --------
Net decrease in cash and cash equivalents                (18,725)   (4,589)
Cash and cash equivalents, beginning of period            68,213    27,404
                                                        --------  --------
Cash and cash equivalents, end of period                $ 49,488  $ 22,815
                                                        ========  ========





            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, 2011

                             Total      % of
Year                      Square Feet Portfolio
                          ----------- ----------
2011                          459,617        6.7%
2012                          301,049        4.4%
2013                          553,847        8.1%
2014                          467,768        6.8%
2015                          781,852       11.4%
Thereafter (2)              4,281,043       62.6%
                          ----------- ----------
                            6,845,176      100.0%
                          =========== ==========


(1) Percentages are determined based upon square footage of expiring
    commercial leases.
(2) Includes 796,706 square feet of current vacancies.



(dollars & square feet
 in 000's)                             As of March 31, 2011
                         -------------------------------------------------
                           # of                  % of     Square   % of
State                    Properties Investment Portfolio   Feet  Portfolio
                         ---------- ---------- ---------  ------ ---------

Texas                             9 $  286,272      29.1%  1,906      27.8%
Colorado                          4    125,798      12.8%    789      11.5%
Virginia                          4    100,674      10.2%    695      10.1%
Minnesota                         2     38,073       3.9%    627       9.2%
Missouri                          3     69,695       7.1%    477       7.0%
Maryland                          2     60,189       6.1%    424       6.2%
Georgia                           1     73,294       7.4%    387       5.7%
Michigan                          1     14,549       1.5%    215       3.1%
Florida                           1     46,690       4.7%    213       3.1%
Indiana                           1     35,486       3.6%    205       3.0%
Illinois                          1     28,468       2.9%    177       2.6%
California                        2     20,957       2.1%    182       2.7%
North Carolina                    3     69,983       7.1%    431       6.3%
Washington                        1     14,312       1.5%    117       1.7%
                         ---------- ---------- ---------  ------ ---------
                                 35 $  984,441     100.0%  6,845     100.0%
                         ========== ========== =========  ====== =========



Property by type:
(dollars & square feet                 As of March 31, 2011
in 000's)                -------------------------------------------------
                           # of                  % of     Square   % of
Type                     Properties Investment Portfolio   Feet  Portfolio
                         ---------- ---------- ---------  ------ ---------
Office                           34 $  979,560      99.5%  6,746      98.6%
Industrial                        1      4,881       0.5%     99       1.4%
                         ---------- ---------- ---------  ------ ---------
                                 35 $  984,441     100.0%  6,845     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-11  31-Mar-10
                          ---------- ----------

Tenant improvements       $    2,506 $    1,305
Deferred leasing costs         2,819      5,566
Building improvements            449        380
                          ---------- ----------
                          $    5,774 $    7,251
                          ========== ==========




Square foot & leased percentages                 March 31,   December 31,
                                                    2011        2010
                                                 ----------  ----------

Owned portfolio of commercial real estate
             Number of properties                        35          33 (1)
             Square feet                          6,845,176   6,422,357
             Leased percentage                           88%         86%

Investments in non-consolidated REITs
             Number of properties                         3           3
             Square feet                          1,995,932   1,995,913
             Leased percentage                           85%         77%

Single Asset REITs (SARs) managed
             Number of properties                        13          12
             Square feet                          3,325,694   2,915,896
             Leased percentage                           79%         75%

Total owned, investments & managed properties
             Number of properties                        51          48
             Square feet                         12,166,802  11,334,166
             Leased percentage                           85%         81%

(1) Includes asset held for sale at 12/31/2010



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-11    Held
                          ----------- ----- --------- ---------  ---------
FSP 303 East Wacker Drive
 Corp.                    Chicago     IL      844,953      92.3%      43.7%
FSP Grand Boulevard Corp. Kansas City MO      532,472      89.3%      27.0%
FSP Phoenix Tower Corp.   Houston     TX      618,507      70.6%       4.6%
                                            --------- ---------
                                            1,995,932      84.8%
                                            --------- ---------




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

                                (in 000's)

                                       Q1        Q2        Q3        Q4
Revenue:                              2010      2010      2010      2010
                                    --------  --------  --------  --------
  Rental                            $ 28,757  $ 27,219  $ 29,391  $ 29,953
  Related party revenue:
    Syndication fees                     121       541        20     1,862
    Transaction fees                     146       753       246     1,582
    Management fees and
    interest income from loans           533       558       630       718
  Other                                    9         6        20        54
                                    --------  --------  --------  --------
     Total revenue                    29,566    29,077    30,307    34,169
                                    --------  --------  --------  --------

Expenses:
  Real estate operating expenses       7,955     7,335     8,715     9,604
  Real estate taxes and insurance      4,996     4,061     4,659     4,454
  Depreciation and amortization        8,496     8,521     9,691     9,764
  Selling, general and
   administrative                      2,171     2,559     2,074     2,482
  Commissions                            114       336        16     1,011
  Interest                             1,652     1,735     1,892     2,004
                                    --------  --------  --------  --------
     Total expenses                   25,384    24,547    27,047    29,319
                                    --------  --------  --------  --------

  Income before interest income,
   equity in earnings in
   non-consolidated REITs and taxes    4,182     4,530     3,260     4,850
  Interest income                          8         9         4         4
  Equity in earnings in
   non-consolidated REITs                253       380       404       229
                                    --------  --------  --------  --------

  Income before taxes on income        4,443     4,919     3,668     5,083
  Taxes on income                        (68)        5       (37)      317
                                    --------  --------  --------  --------

  Income from continuing operations    4,511     4,914     3,705     4,766
  Income from discontinued
   operations                          1,051     1,040     1,052     1,054
                                    --------  --------  --------  --------

  Income before gain on sale of
   properties                          5,562     5,954     4,757     5,820
  Gain on sale of assets                   -         -         -         -
                                    --------  --------  --------  --------
  Net income                        $  5,562  $  5,954  $  4,757  $  5,820
                                    ========  ========  ========  ========

FFO and  FFO+GOS calculations:

Net income                          $  5,562  $  5,954  $  4,757  $  5,820
                                    --------  --------  --------  --------
  (Gain) Loss on sale of assets            -         -         -         -
  GAAP income from non-consolidated
   REITs                                (253)     (380)     (404)     (153)
  Distributions from
   non-consolidated REITs              1,407     1,324     1,192     1,247
  Acquisition costs of new
   properties                              -       129        (4)        -
  Depreciation of real estate and
   intangible amortization             9,934     9,675    10,510    10,605
                                    --------  --------  --------  --------
Funds From Operations (FFO)           16,650    16,702    16,051    17,519
  Plus gains on sales of assets            -         -         -         -
                                    --------  --------  --------  --------
FFO+GOS                             $ 16,650  $ 16,702  $ 16,051  $ 17,519
                                    ========  ========  ========  ========






            Franklin Street Properties Corp. Earnings Release
                         Supplementary Schedule G
                        Percentage of Leased Space
                          (Unaudited & Estimated)

                                              %     Fourth    %     First
                                            Leased  Quarter Leased Quarter
                                            as of   Average as of  Average%
Property                           Square  12/31/10 %Leased 3/31/11 Leased
 Name             Location          Feet      (1)     (2)     (1)    (2)
            --------------------- --------- ------  ------  ------  ------

1 PARK SENECA       Charlotte, NC   109,550   81.0%   82.9%   78.5%   78.5%
2 HILLVIEW CENTER    Milpitas, CA    36,288  100.0%  100.0%  100.0%  100.0%
3 SOUTHFIELD       Southfield, MI   214,697   58.6%   58.6%   61.1%   61.0%
4 BOLLMAN PLACE        Savage, MD    98,745  100.0%  100.0%  100.0%  100.0%
5 FOREST PARK       Charlotte, NC    62,212  100.0%  100.0%   77.5%   77.5%
6 CENTENNIAL Colorado Springs, CO   110,730   66.9%   66.9%   66.9%   66.9%
7 MEADOW POINT      Chantilly, VA   138,537   97.9%   97.9%  100.0%   98.6%
8 TIMBERLAKE     Chesterfield, MO   232,766   99.0%   99.0%   97.7%   97.7%
9 FEDERAL WAY     Federal Way, WA   117,010   33.6%   31.8%   42.0%   38.5%
10 NORTHWEST
 POINT      Elk Grove Village, IL   176,848  100.0%  100.0%  100.0%  100.0%
11 TIMBERLAKE
 EAST            Chesterfield, MO   116,197  100.0%  100.0%  100.0%  100.0%
12 PARK TEN           Houston, TX   155,715   48.2%   48.2%   98.8%   95.4%
13 MONTAGUE          San Jose, CA   145,951  100.0%  100.0%  100.0%  100.0%
14 ADDISON            Addison, TX   293,787   95.8%   95.8%   95.8%   95.8%
15 COLLINS
 CROSSING          Richardson, TX   298,766   79.1%   58.3%   79.1%   79.1%
16 GREENWOOD
 PLAZA              Englewood, CO   197,527   26.6%   26.6%   60.1%   60.1%
17 RIVER
 CROSSING        Indianapolis, IN   205,059   97.5%   97.7%   93.8%   93.8%
18 LIBERTY PLAZA      Addison, TX   218,934   73.7%   73.7%   75.6%   74.3%
19 INNSBROOK       Glen Allen, VA   308,771   61.4%   41.9%   60.8%   61.0%
20 380
 INTERLOCKEN       Broomfield, CO   240,184   85.1%   85.1%   85.1%   85.1%
21 BLUE LAGOON         Miami, FLA   212,619  100.0%  100.0%  100.0%  100.0%
22 ELDRIDGE GREEN     Houston, TX   248,399  100.0%  100.0%  100.0%  100.0%
23 WILLOW BEND          Plano, TX   116,622   55.5%   55.5%   67.0%   63.2%
24 ONE OVERTON PARK   Atlanta, GA   387,267   92.4%   92.4%   92.4%   92.4%
25 390 INTERLOCKEN Broomfield, CO   241,516   98.3%   98.3%   95.9%   95.9%
26 EAST BALTIMORE   Baltimore, MD   325,445   84.5%   91.4%   84.5%   84.3%
27 PARK TEN PHASE II  Houston, TX   156,746   97.8%   97.8%  100.0%   99.1%
28 LAKESIDE
 CROSSING I  Maryland Heights, MO   127,778  100.0%  100.0%  100.0%  100.0%
29 LOUDOUN TECH        Dulles, VA   135,888  100.0%  100.0%  100.0%  100.0%
30 4807 STONECROFT  Chantilly, VA   111,469  100.0%  100.0%  100.0%  100.0%
31 EDEN BLUFF    Eden Prairie, MN   153,028  100.0%  100.0%  100.0%  100.0%
32 121 S. EIGHTH
 STREET           Minneapolis, MN   473,884   92.1%   92.1%   92.2%   92.2%
33 EMPEROR BOULEVARD   Durham, NC   259,531    n/a     n/a   100.0%  100.0%
34 LEGACY TENNYSON      Plano, TX   202,600    n/a     n/a   100.0%  100.0%
35 ONE LEGACY CIRCLE    Plano, TX   214,110    n/a     n/a    89.7%   89.7%

                                  --------- ------  ------  ------  ------
       TOTAL WEIGHTED
        AVERAGE                   6,845,176   85.6%   84.1%   88.4%   87.4%
                                  --------- ------  ------  ------  ------


(1) % Lease as of month's end includes all leases that expire on the last
    day of the quarter.  A major lease (approximately 88,736 square feet)
    with Ober Kaler at East Baltimore expired on 3/31/11, and the space
    became vacant 4/1/11.
(2) Average quarterly percentage is the average of the end of the month
    leased percentage for each of the 3 months during the quarter.
(3) Fourth Quarter Totals included 3150 Fairview Park Drive (252,613 sf)
    located in Virginia, which was sold in January.






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

The following table includes the largest 20 tenants in FSP's owned
portfolio based on leased square feet:


  As of March 31, 2011
                                                                    % of
                   Tenant                       Sq Ft   SIC Code  Portfolio
                                              --------- --------- --------
1  TCF National Bank                            266,495        60      3.9%
2  Quintiles Transnational Corp.                259,531        87      3.8%
3  CITGO Petroleum Corporation                  248,399        29      3.6%
4  Burger King Corporation                      212,619        58      3.1%
5  Denbury Onshore LLC                          202,600        13      3.0%
6  RGA Reinsurance Company                      185,501        63      2.7%
7  Citicorp Credit Services, Inc.               176,848        61      2.6%
8  C.H. Robinson Worldwide, Inc.                153,028        47      2.2%
9  SunTrust Bank                                145,204        60      2.1%
10 Murphy Exploration & Production Company      144,677        13      2.1%
11 Giesecke & Devrient America, Inc             135,888        73      2.0%
12 Monsanto Company                             127,778        28      1.9%
13 Vail Holdings, Inc.                          121,913        79      1.8%
14 Northrop Grumman Information
    Technology, Inc.                            111,469        73      1.6%
15 Maines Paper & Food Service, Inc              98,745        51      1.5%
16 Federal National Mortgage Association         92,358        61      1.3%
17 Amdocs, Inc.                                  91,928        73      1.3%
18 County of Santa Clara                         90,467        91      1.3%
19 Ober Kaler Grimes & Shriver                   88,736        81      1.3%
20 International Business Machines Corp.         87,587        73      1.3%
                                              ---------           --------
                                              3,041,771               44.4%
                                              ---------           --------


                   Franklin Street Properties Corp. Earnings Release
                                Supplementary Schedule I
                     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