SOURCE: Franklin Street Properties Corp.

February 23, 2010 17:06 ET

Franklin Street Properties Corp. Announces Fourth Quarter and Full Year 2009 Results

WAKEFIELD, MA--(Marketwire - February 23, 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 $19.1 million and $71.4 million or $0.24 and $0.98 per share for the fourth quarter and year ended December 31, 2009, respectively. The Company also announced Net Income of $8.3 million and $27.9 million and Earnings Per Share (EPS) of $0.10 and $0.38 for the fourth quarter and year ended December 31, 2009, respectively. The Company also 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 below.

(in 000's
 except per
 share data) Three Months Ended December 31,    Year Ended December 31,
             ------------------------------ ------------------------------
                                  Increase                       Increase
               2009      2008    (Decrease)   2009      2008    (Decrease)
             --------- --------- ---------- --------- --------- ----------

Net Income   $   8,258 $   6,619 $    1,639 $  27,872 $  31,959 $   (4,087)
             ========= ========= ========== ========= ========= ==========

FFO          $  19,075 $  16,199 $    2,876 $  71,359 $  69,204 $    2,155
GOS                424         -        424       424         -        424
             --------- --------- ---------- --------- --------- ----------
FFO+GOS      $  19,499 $  16,199 $    3,300 $  71,783 $  69,204 $    2,579
             ========= ========= ========== ========= ========= ==========
Per Share
 Data:
EPS          $    0.10 $    0.09 $     0.01 $    0.38 $    0.45 $    (0.07)
FFO          $    0.24 $    0.23 $     0.01 $    0.98 $    0.98 $        -
GOS          $       - $       - $        - $       - $       - $        -
FFO+GOS      $    0.24 $    0.23 $     0.01 $    0.98 $    0.98 $        -

Weighted ave
 shares
 (diluted)      79,681    70,481      9,200    73,001    70,481      2,521
             --------- --------- ---------- --------- --------- ----------

Comparing results for the fourth quarter of 2009 to 2008, Net Income and EPS increased $1.6 million or $0.01 per share, FFO increased $2.9 million or $0.01 per share and FFO+GOS increased $3.3 million or $0.01 per share. The increase in FFO was primarily attributable to an increase in investment banking FFO of $1.8 million and an increase in real estate FFO of $1.1 million. The increase from investment banking resulted from greater sales of securities by our investment bank, which were $39.8 million in the fourth quarter of 2009 as compared to no sales of securities by our investment bank for the fourth quarter of 2008. Revenue from our investment bank is primarily based on the value of securities sales. The increase in real estate FFO was primarily from contributions from two acquisitions made in December 2008, two in June 2009 and one in September 2009. The GOS in the fourth quarter of 2009 resulted from a gain recognized on a small piece of land as a result of a land taking. There was no GOS in the fourth quarter of 2008.

Comparing results for the year ended December 31, 2009 to the year ended December 31, 2008, Net Income and EPS decreased $4.1 million or $0.07 per share, FFO increased $2.2 million and FFO+GOS increased $2.6 million, while each remained flat on a per share basis. Comparing results for the full year of 2009 to 2008, the FFO increase was primarily attributable to an increase in FFO real estate of $4.8 million. This increase was partially offset by an FFO decrease from investment banking of $2.6 million. The increase in real estate FFO was primarily from contributions from two acquisitions made in December 2008, two in June 2009 and one in September 2009. The decrease in investment banking resulted from lower sales of securities by our investment bank, which decreased $17.0 million to $40.4 million for 2009 compared to $57.4 million for 2008. Revenue from our investment bank is primarily based on the value of securities sales. The GOS during 2009 resulted from a gain recognized on a small piece of land as a result of a land taking. There was no GOS in the 2008.

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

"For the fourth quarter of 2009, FSP's profits as represented by FFO + GOS totaled approximately $19.5 million or $0.24 per share, down $0.01 from the third quarter of 2009. Dividend distributions declared for the fourth quarter of 2009, which were payable on February 19, 2010, will be approximately $15.1 million or $0.19 per share. For the full year 2009, FSP's profits as represented by FFO + GOS totaled approximately $71.8 million or $0.98 per share, flat compared to full year 2008. Dividend distributions for the full year 2009 were approximately $55.3 million or $0.76 per share.

Significant portions of our real estate investment business, specifically property sales and investment banking, are transactional. During the fourth quarter we recognized a gain of approximately $424,000 on a small piece of land associated with one of our office properties, but for the full year, property sales did not make a meaningful contribution to profits. In contrast, our investment banking activity increased significantly in the quarter and produced its first profit contribution of 2009.

Although FSP has certain properties in its portfolio that we would have considered selling in 2009, the general property sales environment remained poor during the year with both liquidity and pricing challenged. Consequently, we did not attempt to sell any of our assets in 2009. The second half of 2009 did show some market improvement on the pricing side which we will continue to carefully monitor in 2010 to see if an improving trend is developing. While the economic realities of lower occupancy and lower rents are still being driven by high nation-wide unemployment, the broader capital markets and liquidity have begun to improve somewhat from very depressed levels. It is likely that both improving office property fundamentals as well as attractive financing availability will 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.

During the fourth quarter of 2009, our investment banking group completed investor capital closings totaling $39.8 million. This was a significant increase over the first three quarters of the year, as full year 2009 capital raised totaled only $40.4 million. Investment banking fees associated with offerings in the fourth quarter were lower than historical levels but allowed the bank to operate at a profit for the quarter, producing approximately $1.1 million or about $0.01 per share. For full year 2009, FSP's investment banking group operated at a loss which totaled approximately $0.6 million or about $0.01 per share. While we believe this business will remain very volatile quarter-to-quarter in 2010, we are cautiously optimistic that business in the new year could show significant increases in profit contribution over 2009.

Our real estate portfolio of 32 properties continued to provide steady rental income during the fourth quarter of 2009 but had a drop in occupancy to 84% from 90% in the previous quarter. The major factor in the occupancy drop was the anticipated vacancy of our property in the Richmond, Virginia suburb of Glen Allen, due to the bankruptcy of its sole tenant, Land America Financial Group, and lease-roll at our office building in Chantilly in northern Virginia. Both of these properties are in desirable markets and are very competitive with surrounding office properties. Re-leasing of these two assets is active and progress is anticipated. However, several of our properties have significant additional lease-roll in 2010 and, as a consequence, we expect occupancy and rental income for the year from those properties to be lower. We anticipate positive re-leasing efforts in 2010 for all these properties, and, if successful in those efforts, look forward to a much more modest portfolio lease-roll in 2011, 2012 and 2013 with potentially meaningful rental income growth in those years.

During 2009, FSP purchased three additional properties, bringing our directly-owned portfolio to 32 properties totaling over 5.9 million square feet. In addition, the Company invested capital in a fourth property that was also syndicated to outside investors through our investment banking group. Finally, a fifth property was purchased in the fourth quarter for syndication through our investment banking group, with FSP retaining the management role of that asset. Aided by these new acquisitions, the Company was able to grow its year-over-year rental income revenues by approximately 9.8%. It will continue to be FSP's objective to grow our property portfolio and rental income business during 2010 through additional property acquisitions. We continue to see compelling pricing valuations in commercial real estate from sellers who have become adversely affected by the downturn in the U.S. economy and liquidity-constrained capital markets. In addition to using our balance sheet strength to help finance and fund new acquisitions, raising equity by issuing additional shares of our common stock for sale to the broader public markets will also be considered as part of our capital funding/property acquisition/growth strategy. The timing and execution of such capital events will be subject to, among other things, the size and amount of our specific property acquisition opportunities and the acceptance of our shares by the public capital markets.

For 2010, FSP's profit results are likely to have more quarter-to-quarter variability than in 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. 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 2010 with all of its challenges and opportunities."

Dividend Announcement

On January 15, 2010, the Company announced that its Board of Directors declared a regular quarterly dividend for the three months ended December 31, 2009 of $0.19 per share of common stock payable on February 19, 2010 to stockholders of record on January 29, 2010.

Real Estate Update

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. 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 December 31, 2009. 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      Year Ended
                                       December 31,        December 31,
                                    ------------------  ------------------
(In thousands, except per share
 amounts)                             2009      2008      2009      2008
                                    --------  --------  --------  --------

Net income                          $  8,258  $  6,619  $ 27,872  $ 31,959
   Gain on sale of assets               (424)        -      (424)        -
   GAAP (income) loss from
    non-consolidated REITs              (301)     (580)   (2,012)   (2,747)
   Distributions from
    non-consolidated REITs             1,371     1,510     5,628     5,348
   Acquisition costs of new
    properties                             4                 643
   Depreciation of real estate &
    intangible amortization           10,167     8,650    39,652    34,644
                                    --------  --------  --------  --------
Funds From Operations (FFO)           19,075    16,199    71,359    69,204
   Plus gains on sales of assets
    (GOS)                                424         -       424         -
                                    --------  --------  --------  --------
FFO+GOS                             $ 19,499  $ 16,199  $ 71,783  $ 69,204
                                    ========  ========  ========  ========

Per Share Data
EPS                                 $   0.10  $   0.09  $   0.38  $   0.45
FFO                                 $   0.24  $   0.23  $   0.98  $   0.98
GOS                                 $      -  $      -  $      -  $      -
FFO+GOS                             $   0.24  $   0.23  $   0.98  $   0.98

Weighted average shares (basic and
 diluted)                             79,681    70,481    73,001    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 February 24, 2010 at 10:00 a.m. (ET) to discuss the fourth quarter and full year 2009 results. To access the call, please dial 1-866-713-8307, passcode 72918537. Internationally, the call may be accessed by dialing 1-617-597-5307, passcode 72918537. 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             For the
                                 Three Months Ended       Year Ended
                                     December 31,         December 31,
                                --------------------  --------------------
(in thousands, except per share
 amounts)                         2009       2008       2009       2008
                                ---------- ---------  ---------  ---------

Revenue:
  Rental                        $   31,300 $  28,915  $ 122,074  $ 111,198
Related party revenue:
  Syndication fees                   2,389         -      2,428      3,766
  Transaction fees                   1,537        35      2,080      3,641
  Management fees and interest
   income from loans                   508       375      1,740      1,739
Other                                    6        20         61         72
                                ---------- ---------  ---------  ---------
    Total revenue                   35,740    29,345    128,383    120,416
                                ---------- ---------  ---------  ---------

Expenses:
  Real estate operating
   expenses                          8,646     8,026     30,822     28,999
  Real estate taxes and
   insurance                         4,349     4,365     19,228     17,740
  Depreciation and
   amortization                      9,353     7,744     36,293     30,360
  Selling, general and
   administrative                    2,513     1,711      8,891      8,268
  Commissions                        1,623       131      1,801      2,151
  Interest                           1,650     1,570      6,570      4,921
                                ---------- ---------  ---------  ---------

    Total expenses                  28,134    23,547    103,605     92,439
                                ---------- ---------  ---------  ---------

Income before interest income,
 equity in earnings of
 non-consolidated REITs and
 taxes                               7,606     5,798     24,778     27,977
Interest income                          9        88         97        745
Equity in earnings of
 non-consolidated REITs                284       580      1,994      2,747
                                ---------- ---------  ---------  ---------

Income before taxes                  7,899     6,466     26,869     31,469
Income tax expense (benefit)            65      (153)      (579)      (490)
                                ---------- ---------  ---------  ---------

  Income from continuing
   operations                        7,834     6,619     27,448     31,959
                                ---------- ---------  ---------  ---------
  Discontinued operations:
    Income (loss) from
     discontinued operations             -         -          -          -
    Gain on sale of assets,
     less applicable income
     tax                               424         -        424          -
                                ---------- ---------  ---------  ---------
      Total discontinued
       operations                      424         -        424          -
                                ---------- ---------  ---------  ---------

Net income                      $    8,258 $   6,619  $  27,872  $  31,959
                                ---------- ---------  ---------  ---------

Weighted average number of
 shares outstanding, basic
 and diluted                        79,681    70,481     73,001     70,481
                                ---------- ---------  ---------  ---------

Earnings per share, basic and
 diluted, attributable to:
  Continuing operations         $     0.10 $    0.09  $    0.38  $    0.45
  Discontinued operations                -         -          -          -
                                ---------- ---------  ---------  ---------
Net income per share, basic and
 diluted                        $     0.10 $    0.09  $    0.38  $    0.45
                                ---------- ---------  ---------  ---------



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


(in thousands, except share and par value
 amounts)                                               December 31,
                                                  ------------------------
                                                      2009         2008
                                                  -----------  -----------
Assets:
Real estate assets, net                           $   921,833  $   844,058
Acquired real estate leases, less accumulated
 amortization of $34,592 and $29,200,
 respectively                                          44,757       28,518
Investment in non-consolidated REITs                   92,910       83,046
Assets held for syndication, net                        4,827       13,254
Cash and cash equivalents                              27,404       29,244
Restricted cash                                           334          336
Tenant rent receivables, less allowance for
 doubtful accounts of $620 and $509, respectively       1,782        1,329
Straight-line rent receivable, less allowance for
 doubtful accounts of $100 and $261, respectively      10,754        8,816
Prepaid expenses                                        2,594        2,206
Related party mortgage loan receivable                 36,535
Other assets                                              844        3,531
Office computers and furniture, net of
 accumulated depreciation of $1,233 and $1,108,
 respectively                                             384          281
Deferred leasing commissions, net of accumulated
 amortization of $4,995, and $3,416, respectively      10,808       10,814
                                                  -----------  -----------
Total assets                                      $ 1,155,766  $ 1,025,433
                                                  ===========  ===========

Liabilities and Stockholders' Equity:
Liabilities:
  Bank note payable                               $   109,008  $    67,468
  Term loan payable                                    75,000       75,000
  Accounts payable and accrued expenses                23,787       22,297
  Accrued compensation                                  1,416        1,654
  Tenant security deposits                              1,808        1,874
  Other liabilities: derivative termination value       2,076        3,099
  Acquired unfavorable real estate leases, less
   accumulated amortization of $2,492, and $1,779,
   respectively                                         5,397        5,044
                                                  -----------  -----------
      Total liabilities                               218,492      176,436
                                                  -----------  -----------

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 70,480,705
   shares issued and outstanding, respectively              8            7
  Additional paid-in capital                        1,003,713      889,019
  Accumulated other comprehensive loss                 (2,076)      (3,099)
  Earnings (distributions) in excess of
   accumulated earnings/distributions                 (64,371)     (36,930)
                                                  -----------  -----------
      Total stockholders' equity                      937,274      848,997
                                                  -----------  -----------
      Total liabilities and stockholders' equity  $ 1,155,766  $ 1,025,433
                                                  ===========  ===========



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


                                          For the Year Ended December 31,
                                          --------------------------------
(in thousands)                                  2009             2008
                                          ===============  ===============
Cash flows from operating activities:
  Net income                              $        27,872  $        31,959
  Adjustments to reconcile net income to
   net cash provided by operating
   activities:
    Depreciation and amortization expense          36,561           30,444
    Amortization of above market lease              3,359            4,283
    Gain on sale of real estate assets               (424)               -
    Equity in earnings (deficit) of
     non-consolidated REITs                        (2,012)          (2,747)
    Distributions from non-consolidated
     REITs                                          5,628            5,348
    Increase (decrease) in bad debt
     reserve                                          111               79
  Changes in operating assets and
   liabilities:
    Restricted cash                                     2                -
    Tenant rent receivables, net                     (564)              64
    Straight-line rents, net                       (1,879)          (1,406)
    Prepaid expenses and other assets,
     net                                              906             (901)
    Accounts payable, accrued expenses
     and other items                                2,760              448
    Accrued compensation                             (238)              90
    Tenant security deposits                          (66)               -
  Payment of deferred leasing commissions          (2,659)          (3,353)
                                          ---------------  ---------------
        Net cash provided by operating
         activities                                69,357           64,308
                                          ---------------  ---------------
Cash flows from investing activities:
  Purchase of real estate assets and
   office computers and furniture,
   capitalized merger costs                      (104,544)         (73,888)
  Acquired real estate leases                     (27,779)          (4,508)
  Investment in non-consolidated REITs            (13,218)             (10)
  Investment in related party mortgage
   loan receivable                                (35,410)          (1,125)
  Redemption of (investment in)
   certificate of deposit                               -                -
  Merger costs paid                                     -                -
  Changes in deposits on real estate
   assets                                               -           (1,300)
  Investment in assets held for
   syndication                                      8,159           12,236
  Proceeds received on sales of real
   estate assets                                      672                -
                                          ---------------  ---------------
        Net cash used in investing
         activities                              (172,120)         (68,595)
                                          ---------------  ---------------
Cash flows from financing activities:
  Distributions to stockholders                   (55,313)         (70,481)
  Purchase of treasury shares                           -                -
  Proceeds from equity offering                   119,600                -
  Offering costs                                   (4,904)               -
  Borrowings under bank note payable                    -                -
  Repayments of bank note payable                  41,540          (17,282)
  Borrowings under term loan payable                    -           75,000
  Deferred financing costs                              -             (694)
                                          ---------------  ---------------
        Net cash provided by (used in)
         financing activities                     100,923          (13,457)
                                          ---------------  ---------------
Net decrease in cash and cash equivalents          (1,840)         (17,744)
Cash and cash equivalents, beginning of
 year                                              29,244           46,988
                                          ---------------  ---------------
Cash and cash equivalents, end of year    $        27,404  $        29,244
                                          ===============  ===============




              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
                          ----------- ----------
          2010                797,637       13.4%
          2011                402,779        6.8%
          2012                433,197        7.3%
          2013                354,393        6.0%
          2014                585,420        9.8%
          2015                467,676        7.9%
          Thereafter (2)    2,901,312       48.8%
                          ----------- ----------
                            5,942,414      100.0%
                          =========== ==========

(1) Percentages are determined based upon square footage of expiring
    commercial leases.
(2) Includes 929,000 square feet of current vacancies.




(dollars &
 square feet in
 000's)                           As of December 31, 2009
                ----------------------------------------------------------
                   # of                    % of       Square       % of
State           Properties  Investment  Portfolio      Feet     Portfolio
                ----------- ----------- ----------  ----------- ----------

Texas                     7 $   228,838       24.8% $     1,489       25.1%
Virginia                  5     160,593       17.4%         940       15.8%
Colorado                  4     127,985       13.9%         792       13.3%
Georgia                   1      75,593        8.2%         387        6.5%
Missouri                  3      72,584        7.9%         477        8.0%
Maryland                  2      61,616        6.7%         424        7.1%
Florida                   1      48,102        5.2%         213        3.6%
Indiana                   1      36,679        4.0%         205        3.5%
Illinois                  1      30,098        3.3%         177        3.0%
California                2      21,436        2.3%         182        3.1%
Michigan                  1      14,868        1.6%         215        3.6%
Washington                1      14,747        1.6%         117        2.0%
Minnesota                 1      14,597        1.6%         153        2.6%
North Carolina            2      14,097        1.5%         172        2.9%
                ----------- ----------- ----------  ----------- ----------
                         32 $   921,834      100.0%       5,942      100.0%
                =========== =========== ==========  =========== ==========


Property by
 type:
(dollars &
 square feet                      As of December 31, 2009
 in 000's)      ----------------------------------------------------------
                   # of                    % of       Square       % of
Type            Properties  Investment  Portfolio      Feet     Portfolio
                ----------- ----------- ----------  ----------- ----------
Office                   31     916,807       99.5%       5,844       98.3%
Industrial                1       5,027        0.5%          99        1.7%
                ----------- ----------- ----------  ----------- ----------
                         32 $   921,834      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  Twelve Months Ended
                                    ------------------- -------------------
(in thousands)                      31-Dec-09 31-Dec-08 31-Dec-09 31-Dec-08
                                    --------- --------- --------- ---------

Tenant improvements                 $   1,528 $     823 $   4,744 $   5,387
Deferred leasing costs                    457       919     2,659     3,354
Building improvements                     619       419     1,466     1,728
                                    --------- --------- --------- ---------
                                    $   2,604 $   2,161 $   8,869 $  10,469
                                    ========= ========= ========= =========




Square foot & leased percentages                         December 31,
                                                    ----------------------
                                                       2009        2008
                                                    ----------  ----------

Owned portfolio of commercial real estate
        Number of properties                                32          29
        Square feet                                  5,942,414   5,417,515
        Leased percentage                                   84%         93%

Investments in non-consolidated commercial real
 estate
        Number of properties                                 3           2
        Square feet                                  1,995,041   1,461,224
        Leased percentage                                   78%         80%

Single Asset REITs (SARs) managed
        Number of properties                                11          10
        Square feet*                                 2,406,370   2,684,561
        Leased percentage*                                  91%         92%

Total owned, investments & managed properties
        Number of properties                                46          41
        Square feet*                                10,343,825   9,563,300
        Leased percentage*                                  85%         93%

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


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


Single Asset                              Square     % Leased   % Interest
 REIT name         City       State        Feet     31-Dec-09      Held
                ----------- ----------- ----------- ----------  ----------
FSP 303 East
 Wacker Drive
 Corp.              Chicago          IL     844,081      74.18%       43.7%
FSP Grand
 Boulevard
 Corp.          Kansas City          MO     532,453      87.98%       27.0%
FSP Phoenix
 Tower Corp.        Houston          TX     618,507      73.71%        4.6%
                                        ----------- ----------
                                          1,995,041      77.72%
                                        ----------- ----------





            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 December 31, 2009
                                                                   % 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   Citigroup 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  Northrop Grumman Systems Corporation      111,469         73       1.9%
13  Maines Paper & Food Service, Inc.          98,745         51       1.6%
14  Amdocs, Inc.                               91,928         73       1.5%
15  County of Santa Clara                      90,467         91       1.5%
16  Ober Kaler Grimes & Shriver                89,885         81       1.5%
17  Vail Holding Corp d/b/a Vail Resorts       83,620         79       1.4%
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                                   2,876,394                 48.4%
                                           ----------            ---------


(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.




             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