SOURCE: Franklin Street Properties Corp.

February 24, 2009 16:00 ET

Franklin Street Properties Corp. Announces Fourth Quarter and Full Year 2008 Results

WAKEFIELD, MA--(Marketwire - February 24, 2009) - Franklin Street Properties Corp. (the "Company" or "FSP") (NYSE Alternext US: FSP), an investment firm specializing in real estate, announced today Net Income of $6.6 million and $32.0 million and Earnings Per Share (EPS) of $0.09 and $0.45 for the fourth quarter and year ended December 31, 2008, respectively. The Company also announced Funds From Operations (FFO) of $16.2 million and $69.2 million or $0.23 and $0.98 per share for the fourth quarter and year ended December 31, 2008, respectively, 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 under the "Real Estate Update" section of this press release.

(in 000's except       Three Months Ended
 per share data)          December 31,           Year Ended December 31,
                  ---------------------------  ---------------------------
                                    Increase                     Increase
                    2008     2007  (Decrease)    2008     2007  (Decrease)
                  -------- -------- ---------  -------- -------- ---------

Net Income        $  6,619 $  9,391 $  (2,772) $ 31,959 $ 61,085 $ (29,126)
                  ======== ======== =========  ======== ======== =========

FFO               $ 16,199 $ 18,572 $  (2,373) $ 69,204 $ 75,049 $  (5,845)
GOS                      -      257      (257)        -   23,789   (23,789)
                  -------- -------- ---------  -------- -------- ---------
FFO+GOS           $ 16,199 $ 18,829 $  (2,630) $ 69,204 $ 98,838 $ (29,634)
                  ======== ======== =========  ======== ======== =========
Per Share Data:
EPS               $   0.09 $   0.13 $   (0.04) $   0.45 $   0.86 $   (0.41)
FFO               $   0.23 $   0.26 $   (0.03) $   0.98 $   1.06 $   (0.08)
GOS               $      - $      - $       -  $      - $   0.34 $   (0.34)
FFO+GOS           $   0.23 $   0.27 $   (0.04) $   0.98 $   1.40 $   (0.42)

Weighted ave
 shares (diluted)   70,481   70,481         -    70,481   70,651      (170)
                  -------- -------- ---------  -------- -------- ---------

Comparing results for the fourth quarter of 2008 to 2007, Net Income and EPS decreased $2.8 million or $0.04 per share, FFO decreased $2.4 million or $0.03 per share and FFO+GOS decreased $2.6 million or $0.04 per share. Comparing results for the fourth quarter of 2008 to 2007, the FFO decrease was primarily attributable to a decrease in FFO from investment banking of $2.7 million, which was partially offset by increases in real estate FFO of $0.3 million. There was no GOS in the fourth quarter of 2008 compared to $0.3 million in the fourth quarter of 2007.

Comparing results for the year ended December 31, 2008 to the year ended December 31, 2007, Net Income and EPS decreased $29.1 million or $0.41 per share, FFO decreased $5.8 million or $0.08 per share and FFO+GOS decreased $29.6 million or $0.42 per share. Comparing results for the full year of 2008 to 2007, the FFO decrease was primarily attributable to a decrease in FFO from investment banking of $7.4 million. The decrease was caused by lower sales of securities by our investment bank, which decreased $90.1 million to $57.4 million for 2008 compared to $147.5 million for 2007. Revenue from our investment bank is primarily based on the value of these securities sales. This decrease was partially offset by increases in real estate FFO of $1.6 million. There was no GOS for 2008 compared to $23.8 million or $0.34 per share for 2007.

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

"For the fourth quarter of 2008, FSP's profits as represented by FFO+GOS totaled approximately $16.2 million or $0.23 per share. Dividend distributions declared for the fourth quarter of 2008, which are payable on February 20, 2009, totaled approximately $13.4 million or $0.19 per share.

"Significant portions of our real estate investment business, specifically property sales and investment banking, are transactional. Neither of these business segments made a positive contribution to the fourth quarter. Substantially all profits for the quarter were produced by our ongoing/recurring rental operations.

"Although, FSP has certain properties in its portfolio that we would contemplate selling, we have not listed any property for sale because of current adverse market conditions. Rather than sell in this negative environment, FSP continues to postpone consideration of the sale of some properties until a more attractive environment establishes itself, particularly within the mortgage/debt markets. A time frame for improvement in these markets continues to be hard to predict. However, we continue to constantly evaluate property disposition opportunities.

"During the fourth quarter of 2008, our investment banking group raised no equity capital, compared with $4.8 million in the third quarter of 2008, $49.9 million in the second quarter of 2008 and $2.7 million in the first quarter of 2008. Concern and uncertainty continues to surround the potential impact on commercial real estate emanating from the U.S. recession and financial credit crisis, and our established investor clients continue to sit on the sidelines until a clearer sense of stability returns to the broader capital markets before considering significant investment purchases. The lack of equity raising activity resulted in our investment banking business segment operating at a loss for the fourth quarter totaling approximately $0.6 million or $0.01 per share. We anticipate business in this area to remain very volatile quarter-to-quarter as long as broader investment market activity and financial events continue to meaningfully sway investor confidence and sentiment.

"While profits continued to suffer in the fourth quarter of 2008 from our transactional businesses, our real estate portfolio of 29 properties maintained its overall 93% occupancy and provided steady rental income. FFO for the fourth quarter of 2008 was $0.23 per share, all of which came from real estate operations net of the cost of maintaining our investment banking capability.

"In late December 2008, FSP invested approximately $40 million to purchase two additional properties for its portfolio. Full quarter operations from these two additional investments will be reflected in the first quarter results of 2009. Additional property investments are currently under consideration.

"As the capital markets and U.S. economy work through the current recession, and financial/credit crisis, we will continue to pursue additional commercial property investment opportunities. It will be FSP's objective to continue to grow our property portfolio and rental income business during this period of liquidity-constrained capital markets by using our balance sheet strength to help finance and fund new acquisitions. We continue to be very optimistic about FSP's position in the current commercial real estate investment market and the opportunities that are presenting themselves to acquire commercial properties at better pricing and value metrics than we have seen in the last several years."

Dividend Announcement

On January 16, 2009, the Company announced that its Board of Directors declared a regularly quarterly dividend for the three months ended December 31, 2008 of $0.19 per share of common stock payable on February 20, 2009 to stockholders of record on January 30, 2009.

Real Estate Update

On December 11, 2008, the Company acquired an office property in Missouri for approximately $20.0 million and on December 23, 2008 the Company acquired an office property in Virginia for approximately $18.6 million. Supplementary Schedules D & E provide property information for our continuing real estate portfolio of 29 properties and for two non-consolidated REITs that we have interests in as of December 31, 2008. 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 in the next week.

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.

                                    Three Months Ended      Year Ended
                                       December 31,        December 31,
                                    ------------------  ------------------
(In thousands, except per share
 amounts)                             2008      2007      2008      2007
                                    --------  --------  --------  --------

Net income                          $  6,619  $  9,391  $ 31,959  $ 61,085
  (Gain) Loss on sale of properties        -      (257)        -   (23,789)
  GAAP (income) loss from
   non-consolidated REITs               (580)     (147)   (2,747)      472
  Distributions from
   non-consolidated REITs              1,510       607     5,348     1,806
  Depreciation of real estate &
   intangible amortization             8,650     8,978    34,644    35,475
                                    --------  --------  --------  --------
Funds From Operations (FFO)           16,199    18,572    69,204    75,049
  Plus gains on sales of properties
   (GOS)                                   -       257         -    23,789
                                    --------  --------  --------  --------
FFO+GOS                             $ 16,199  $ 18,829  $ 69,204  $ 98,838
                                    ========  ========  ========  ========

Per Share Data
EPS                                 $   0.09  $   0.13  $   0.45  $   0.86
FFO                                 $   0.23  $   0.26  $   0.98  $   1.06
GOS                                 $      -  $      -  $      -  $   0.34
FFO+GOS                             $   0.23  $   0.27  $   0.98  $   1.40

Weighted average shares (basic and
 diluted)                             70,481    70,481    70,481    70,651
                                    --------  --------  --------  --------

Today's news release, along with other news about Franklin Street Properties Corp., is available on the Internet at www.franklinstreetproperties.com.

A conference call is scheduled for February 25, 2009 at 9:30 a.m. (ET) to discuss 2008 results. The toll free number is 1-800-597-1967, passcode 61563278. Internationally, the call may be accessed by dialing 1-617-597-5526, passcode 61563278. 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, changes in economic conditions in the United States, disruptions in the debt markets, changes in 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, 2008), 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, 2008, 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
Prior 4 Quarters 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    For the Year Ended
                                    December 31,          December 31,
                                --------------------  --------------------
(in thousands, except per share
 amounts)                         2008       2007       2008       2007
                                ---------  ---------  ---------  ---------

Revenue:
  Rental                        $  28,915  $  25,851  $ 111,198  $ 100,961
Related party revenue:
  Syndication fees                      -      1,896      3,766      8,986
  Transaction fees                     35      2,452      3,641      9,898
  Management fees and interest
   income from loans                  375      1,854      1,739      7,030
Other                                  20         34         72        118
                                ---------  ---------  ---------  ---------
Total revenue                      29,345     32,087    120,416    126,993
                                ---------  ---------  ---------  ---------

Expenses:
  Real estate operating expenses    8,026      7,145     28,999     26,171
  Real estate taxes and
   insurance                        4,365      4,045     17,740     16,535
  Depreciation and amortization     7,744      7,624     30,360     29,334
  Selling, general and
   administrative                   1,711      1,791      8,268      7,466
  Commissions                         131      1,017      2,151      4,737
  Interest                          1,570      1,563      4,921      7,684
                                ---------  ---------  ---------  ---------

    Total expenses                 23,547     23,185     92,439     91,927
                                ---------  ---------  ---------  ---------

Income before interest income,
 equity in earnings (losses) of
non-consolidated REITs and
 taxes                              5,798      8,902     27,977     35,066
Interest income                        88        514        745      2,377
Equity in earnings (losses) of
 non-consolidated REITs               580        147      2,747       (464)
                                ---------  ---------  ---------  ---------

Income before taxes                 6,466      9,563     31,469     36,979
Income tax expense (benefit)         (153)       359       (490)       873
                                ---------  ---------  ---------  ---------

    Income from continuing
     operations                     6,619      9,204     31,959     36,106
                                ---------  ---------  ---------  ---------
    Discontinued operations:
      Income (loss) from
       discontinued operations          -        (70)         -      1,190
      Gain on sale of assets,
       less applicable income tax       -        257          -     23,789
                                ---------  ---------  ---------  ---------
        Total discontinued
         operations                     -        187          -     24,979
                                ---------  ---------  ---------  ---------

Net income                      $   6,619  $   9,391  $  31,959  $  61,085
                                =========  =========  =========  =========

Weighted average number of
 shares outstanding,
 basic and diluted                 70,481     70,481     70,481     70,651
                                =========  =========  =========  =========

Earnings per share, basic and
 diluted, attributable to:
    Continuing operations       $    0.09  $    0.13  $    0.45  $    0.51
    Discontinued operations             -          -          -       0.35
                                ---------  ---------  ---------  ---------
Net income per share, basic and
 diluted                        $    0.09  $    0.13  $    0.45  $    0.86
                                =========  =========  =========  =========




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

(in thousands, except share and par value
 amounts)                                               December 31,
                                                  -------------------------
                                                      2008         2007
                                                  -----------  ------------
Assets:
Real estate assets, net                           $   844,058  $    790,319
Acquired real estate leases, less accumulated
 amortization of $29,200 and $23,401, respectively     28,518        33,695
Investment in non-consolidated REITs                   83,046        85,663
Assets held for syndication, net                       13,254        26,310
Cash and cash equivalents                              29,244        46,988
Restricted cash                                           336           336
Tenant rent receivables, less allowance for
 doubtful accounts of $509 and $430, respectively       1,329         1,472
Straight-line rent receivable, less allowance for
 doubtful accounts of $261 and $261, respectively       8,816         7,387
Prepaid expenses                                        2,206         1,395
Other assets                                            3,531           406
Office computers and furniture, net of accumulated
 depreciation of $1,108 and $968, respectively            281           309
Deferred leasing commissions, net of accumulated
 amortization of $3,416 and $1,975, respectively       10,814         9,186
                                                  -----------  ------------
      Total assets                                $ 1,025,433  $  1,003,466
                                                  ===========  ============

Liabilities and Stockholders' Equity:
Liabilities:
  Bank note payable                               $    67,468  $     84,750
  Term loan payable                                    75,000             -
  Accounts payable and accrued expenses                22,297        20,255
  Accrued compensation                                  1,654         1,564
  Tenant security deposits                              1,874         1,874
  Other liabilities: derivative termination value       3,099             -
  Acquired unfavorable real estate leases, less
   accumulated amortization of $1,779 and
   $1,226, respectively                                 5,044         4,405
                                                  -----------  ------------
      Total liabilities                               176,436       112,848
                                                  -----------  ------------

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, 70,480,705 and 70,480,705
   shares issued and outstanding, respectively              7             7
  Additional paid-in capital                          889,019       889,019
  Accumulated other comprehensive loss                 (3,099)            -
  Earnings (distributions) in excess of
   accumulated earnings/distributions                 (36,930)        1,592
                                                  -----------  ------------
    Total stockholders' equity                        848,997       890,618
                                                  -----------  ------------
    Total liabilities and stockholders' equity    $ 1,025,433  $  1,003,466
                                                  ===========  ============




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


                                                        For the Year Ended
                                                           December 31,
                                                        ------------------
(in thousands)                                            2008      2007
                                                        --------  --------
Cash flows from operating activities:
  Net income                                            $ 31,959  $ 61,085
  Adjustments to reconcile net income to net cash
   provided by operating activities:
    Gains on assets sold                                       -   (23,789)
    Depreciation and amortization expense                 30,444    30,563
    Amortization of above market lease                     4,283     4,948
    Equity in earnings (losses) from non-consolidated
     REITs                                                (2,747)      472
    Distributions from non-consolidated REITs              5,348     1,806
    Increase (decrease) in bad debt reserve                   79        (3)
  Changes in operating assets and liabilities:
    Restricted cash                                            -       425
    Tenant rent receivables, net                              64       971
    Straight-line rents, net                              (1,406)   (3,359)
    Prepaid expenses and other assets, net                  (901)      374
    Accounts payable and accrued expenses                    448     1,884
    Accrued compensation                                      90    (1,079)
    Tenant security deposits                                   -       130
    Payment of deferred leasing commissions               (3,353)   (4,314)
                                                        --------  --------

        Net cash provided by operating activities         64,308    70,114
                                                        --------  --------

Cash flows from investing activities:
    Purchase of real estate assets, office computers
     and furniture, capitalized merger costs             (73,888)  (77,894)
    Purchase of acquired favorable and unfavorable
     leases                                               (4,508)   (3,726)
    Investment in non-consolidated REITs                     (10)  (82,831)
    Investment in mortgage loan receivable                (1,125)        -
    Redemption of certificate of deposit                       -     5,143
    Changes in deposits on real estate assets             (1,300)        -
    Investment in assets held for syndication, net        12,236   (22,093)
    Proceeds received on sales of real estate assets           -    96,102
                                                        --------  --------

        Net cash used in investing activities            (68,595)  (85,299)
                                                        --------  --------

Cash flows from financing activities:
    Distributions to stockholders                        (70,481)  (87,662)
    Purchase of treasury shares                                -    (4,767)
    Borrowings (repayments) under bank note payable,
     net                                                 (17,282)   84,750
    Borrowings under term loan payable                    75,000         -
    Deferred financing costs                                (694)     (121)
                                                        --------  --------

Net cash (used in) provided by financing activities      (13,457)   (7,800)
                                                        --------  --------

Net increase (decrease) in cash and cash equivalents     (17,744)  (22,985)

Cash and cash equivalents, beginning of period            46,988    69,973

                                                        --------  --------
Cash and cash equivalents, end of period                $ 29,244  $ 46,988
                                                        ========  ========

The accompanying notes are an integral part of these condensed consolidated
financial statements.




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


         Commercial portfolio lease expirations (1)


                                            Total         % of
         Year                           Square Feet     Portfolio
                                        ------------- ------------
         2009                                 612,905         11.3%
         2010                                 752,508         13.9%
         2011                                 376,047          6.9%
         2012                                 755,752         14.0%
         2013                                 342,809          6.3%
         2014                                 477,836          8.8%
         Thereafter (2)                     2,099,658         38.8%
                                        ------------- ------------
                                            5,417,515        100.0%
                                        ============= ============


(1)  Percentages are determined based upon square footage of expiring
     commercial leases.
(2)  Includes 365,000 square feet of current vacancies.




(dollars & square feet
 in 000's)                        As of December 31, 2008
                ----------------------------------------------------------
                   # of                    % of       Square       % of
State           Properties  Investment  Portfolio      Feet     Portfolio
                ----------- ----------- ----------  ----------- ----------

Texas                     7 $   234,098       27.7%       1,489       27.4%
Colorado                  4     130,461       15.5%         791       14.6%
Georgia                   1      77,849        9.2%         387        7.1%
Maryland                  2      62,930        7.5%         424        7.8%
Virginia                  3      80,320        9.5%         569       10.5%
Missouri                  3      74,375        8.8%         477        8.8%
Florida                   1      49,276        5.9%         213        3.9%
Indiana                   1      37,444        4.4%         205        3.8%
Illinois                  1      31,402        3.7%         177        3.3%
California                2      21,340        2.5%         182        3.4%
Michigan                  1      15,176        1.8%         215        4.0%
Washington                1      15,051        1.8%         117        2.2%
North Carolina            2      14,336        1.7%         172        3.2%
                ----------- ----------- ----------  ----------- ----------
                         29 $   844,058      100.0%       5,418      100.0%
                =========== =========== ==========  =========== ==========



Property by type:
(dollars & square feet
 in 000's)                        As of December 31, 2008
                -----------------------------------------------------------
                   # of                    % of                    % of
Type            Properties   Investment  Portfolio  Square Feet  Portfolio
                ----------- ----------- ----------  ----------- ----------
Office                   28 $   838,915       99.4%       5,319       98.2%
Industrial                1       5,143        0.6%          99        1.8%
                ----------- ----------- ----------  ----------- ----------
                         29 $   844,058      100.0%       5,418      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   Twelve Months Ended
                                --------------------- ---------------------
(in thousands)                  31-Dec-08  31-Dec-07  31-Dec-08  31-Dec-07
                                ---------- ---------- ---------- ----------

Tenant improvements             $      823 $      998 $    5,387 $    6,596
Deferred leasing costs                 919      1,409      3,354      4,314
Building improvements                  419        908      1,728      4,504
                                ---------- ---------- ---------- ----------
                                $    2,161 $    3,315 $   10,469 $   15,414
                                ========== ========== ========== ==========


Square foot & leased percentages                          December 31,
                                                      --------------------
                                                        2008       2007
                                                      ---------  ---------

Owned portfolio of commercial real estate
         Number of properties                                29         26
         Square feet                                  5,417,515  4,998,280
         Leased percentage                                   93%        93%

Investments in non-consolidated commercial real estate
         Number of properties                                 2          3
         Square feet                                  1,461,224  1,614,380
         Leased percentage                                   80%        92%

Single Asset REITs (SARs) managed
         Number of properties                                10          9
         Square feet*                                 2,684,561  2,682,770
         Leased percentage*                                  92%        92%

Total owned, investments & managed properties
         Number of properties                                41         38
         Square feet*                                 9,563,300  9,295,430
         Leased percentage*                                  91%        93%

*Excludes a property to be constructed 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-Dec-08    Held
                        --------- --------- --------- ---------  ---------
FSP 303 East Wacker
 Drive Corp.              Chicago        IL   842,717      87.9%      43.7%
FSP Phoenix Tower Corp.   Houston        TX   618,507      68.9%       4.6%
                                            --------- ---------
                                            1,461,224      79.9%
                                            --------- ---------




            Franklin Street Properties Corp. Earnings Release
          Supplementary Schedule F: Prior 4 Quarters Information
                                (Unaudited)

(in thousands)
                                       Q4        Q1        Q2        Q3
Revenue:                              2007      2008      2008      2008
                                    --------  --------  --------  --------
  Rental                            $ 25,851    26,656    27,700    27,927
  Related party revenue:
    Syndication fees                   1,896       205     3,257       304
    Transaction fees                   2,452       168     3,138       300
    Management fees and interest
     income from loans                 1,854       561       423       380
    Other                                 34        20        19        13
                                    --------  --------  --------  --------
      Total revenue                   32,087    27,610    34,537    28,924
                                    --------  --------  --------  --------

Expenses:
    Real estate operating expenses     7,145     6,698     7,116     7,159
    Real estate taxes and insurance    4,045     4,279     4,505     4,590
    Depreciation and amortization      7,624     7,359     7,591     7,666
    Selling, general and
     administrative                    1,791     2,009     2,621     1,927
    Commissions                        1,017       158     1,654       208
    Interest                           1,563     1,192     1,051     1,108
                                    --------  --------  --------  --------
      Total expenses                  23,185    21,695    24,538    22,658
                                    --------  --------  --------  --------

    Income before interest income,
     equity in earnings in
     non-consolidated REITs            8,902     5,915     9,999     6,266
    Interest income                      514       303       176       177
    Equity in earnings in
     non-consolidated REITs              147       793       694       679
                                    --------  --------  --------  --------

    Income before taxes on income      9,563     7,011    10,869     7,122
    Taxes on income                      359      (375)      335      (297)
                                    --------  --------  --------  --------

    Income from continuing
     operations                        9,204     7,386    10,534     7,419
    Loss from discontinued
     operations                          (70)        -         -         -
    Gain on sale of assets               257         -         -         -
                                    --------  --------  --------  --------
    Net income                      $  9,391  $  7,386  $ 10,534  $  7,419
                                    ========  ========  ========  ========


FFO and  FFO+GOS calculations:

Net income                          $  9,391  $  7,386  $ 10,534  $  7,419
                                    --------  --------  --------  --------
    (Gain) loss on sale of assets       (257)        -         -         -
    GAAP (income) from
     non-consolidated REITs             (106)     (147)     (694)     (680)
    Distributions from
     non-consolidated REITs              476       607       546     1,561
    Depreciation & amortization        9,008     8,978     8,498     8,784
                                    --------  --------  --------  --------
Funds From Operations (FFO)           18,512    16,824    18,884    17,084
    Plus gains on sales of
     assets (GOS)                        257         -         -         -
                                    --------  --------  --------  --------
FFO+GOS                             $ 18,769  $ 16,824  $ 18,884  $ 17,084
                                    ========  ========  ========  ========



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


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

                                                                  % of
                   Tenant                     Sq Ft   SIC Code  Portfolio
                                            --------- --------- ----------
1  Capital One Services, Inc.* (1)            297,789        61        5.5%
2  Citgo Petroleum Corporation                248,399        29        4.6%
3  Tektronix Texas, LLC                       241,372        38        4.4%
4  Burger King Corporation                    212,619        58        3.9%
5  New Era of Networks, Inc. (Sybase)         199,077        42        3.7%
6  Citigroup Credit Services, Inc.            176,848        61        3.3%
7  RGA Reinsurance Company                    171,120        63        3.2%
8  International Business Machines Corp.      138,033        73        2.5%
9  Giesecke & Devrient America                135,888        13        2.5%
10 Murphy Exploration & Production Company    133,786        73        2.5%
11 CACI Technologies, Inc.                    132,896        42        2.4%
12 Monsanto                                   127,778        87        2.4%
13 Maines Paper and Food Service, Inc.         98,745        73        1.8%
14 Jones Lang Lasalle                          92,827        81        1.7%
15 AMDOCS, Inc.                                91,928        91        1.7%
16 Ober Kaler Grimes                           90,811        79        1.7%
17 County of Santa Clara                       90,467        67        1.7%
18 Technip-Coflexip USA Holdings, Inc          86,059        73        1.6%
19 Vail Corp, dba Vail Resorts                 83,620        67        1.5%
20 Corporate Holdings, LLC                     81,818        81        1.5%
                                            ---------           ----------
  Total                                     2,931,880                 54.1%
                                            ---------           ----------

(1) Capital One sublets all of the space to LandAmerica Financial Group,
Inc.  LandAmerica Financial Group, Inc. entered into a direct lease with us
which commences at the expiration of the Capital One lease on October 31,
2009.  On November 26, 2008, LandAmerica Financial Group, Inc. filed a
voluntary motion for relief under chapter 11 of the Bankruptcy Code.  As of
February 20, 2009, no motion to assume or reject the direct lease had been
filed by LandAmerica Financial Group, 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), 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

    Franklin Street Properties Corp.
    401 Edgewater Place, Suite 200
    Wakefield, Massachusetts 01880-6210
    (781) 557-1300
    www.franklinstreetproperties.com